Case Study

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Case Brief: Kerl v. Rasmussen (2004) 273 Wis. 2d 106, 682 N.W. 2d 328
The facts in this case are that Harvey Pierce ambushed and shot Robin Kerl and her fiancé David Jones in the parking lot of a Madison Wal-Mart where Kerl and Jones worked. Kerl was seriously injured in the shooting, and Jones was killed. Pierce, who was Kerl’s former boyfriend, then shot and killed himself. At the time of the shooting, Pierce was a work-release inmate at the Dane County jail who was employed at a nearby Arby’s restaurant operated by Dennis Rasmussen, INC. Pierce had left work without permission at the time of the attempted murder and murder/suicide. Kerl and Jones’ estate sued DRI and Arby’s, INC. As in pertinent to this appeal, the plaintiffs alleged that Arby’s is vicariously liable, as DRI’s negligent supervision of Pierce. The circuit court granted summary judgment in favor of Arby’s, concluding that there was no basis for vicarious liability. The court appeals affirmed.

The issue is whether and under what circumstances a franchisor may be vicariously liable for the negligence of its franchisee. The rule is that a franchisor may be held vicariously liable for the tortious conduct of its franchisee only if the franchisor has control or a right of control over the daily operation of the specific aspect of the franchisee’s business that is alleged to have caused the harm. These courts have adapted the traditional master/servant “control or right to control” test to the franchise context by narrowing its focus: the franchisor must control or have the right to control the daily conduct or operation of the particular “Instrumentality” or aspect of the franchisee’s business that is alleged to have caused the harm before vicarious liability may be imposed on the franchisor for the franchisee’s tortuous conduct. The quality and operational standards typically found in franchise agreements do not establish the sort of close supervisory control or right to control necessary to support imposing vicarious liability on a franchisor for the torts of the franchisee for all or general purposes.

The application is that the franchisor did not have control or the right to control franchisee’s supervision of its employee, who shot his former girlfriend and killed girlfriend’s fiancée, as was required to hold franchisor vicariously liable for franchisee’s alleged negligence; provisions in license agreement that were consistent with quality and operational standards commonly contained in franchise agreements to achieve product and marketing uniformity and to protect franchisor’s trademark were insufficient to establish a master/servant relationship and did not establish that franchisor controlled or had the right to control franchisee’s hiring and supervision of employees. Although, the license agreement between Arby’s and DRI imposed many quality and operational standards on the franchise, Arby’s did not have control or the right to control DRI’s supervision of its employees. Summary judgment dismissing the plaintiffs’ vicarious

liability claims against Arby’s was properly granted. The courts have concluded that Arby’s did not have control or the right to control the day-to-day operation of the specific aspect of DRI’s business that is alleged to have caused the plaintiff’s harm, that is, DRI’s supervision of its employees. These provisions in the license agreement are consistent with the quality and operational standards commonly contained in franchise agreements to achieve product and marketing uniformity and to protect the franchisor’s trademark. They are insufficient to establish a master/servant relationship. More particularly, they do not establish that Arby’s controlled or had the right to control DRI’s hiring and supervision of employees, which is the aspect of DRI’s business that is alleged to have caused the plaintiffs’ harm. By the terms of this agreement, DRI has sole control over the hiring and supervision of its employees. Arby’s...
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