Although a jury awarded $2,109,553 to Clarence Coryell and his wife, Sandra, and against Domino’s for vicarious liability, the Pennsylvania Superior Court reversed and remanded with instructions that Domino’s was not vicariously liable.

The Pennsylvania Superior Court held in Coryell v. Morris, 2023 PA Super 232 (2023) that as a matter of law, vicarious liability would not be extended to franchisor Domino’s Pizza for a tragic collision between a delivery driver of the franchisee and a motorcyclist. Although the jury awarded $2,109,553 to Clarence Coryell and his wife, Sandra, and against Domino’s for vicarious liability, the Superior Court reversed and remanded with instructions that Domino’s was not vicariously liable. The case is required reading on the law of vicarious liability for franchise businesses.

The case reinforces the law in Pennsylvania that a mere independent contractor relationship is insufficient to impose vicarious liability. The court affirmed that vicarious liability only attaches in a business relationship where the master “controls not only the result of the work but also has the right to direct the manner in which the work shall be accomplished.” The language of the franchise agreement featured prominently in its disposition.

Defendant Robizza, Inc. operated a Domino’s location under the standard franchise agreement. Defendant Morris was working as a delivery driver and driving a car leased by Robizza’s owner. While returning from a delivery, Morris collided with a motorcycle driven by plaintiff Coryell. Coryell and Domino’s filed cross-motions for summary judgment on the vicarious liability claim, which were denied by the trial court, stating that there were genuine issues of material fact as to the extent of control asserted by Domino’s.

The witnesses at trial testified about the nature of the franchise relationship based on paragraphs of the franchise documents. They testified consistent with the franchise documents that the brand promise requires consistent performance of brand standards, which the franchisee must meet or exceed. The testimony was consistent with the franchise documents that explained how each franchisee meets those standards and that the supervision, hiring and firing of the franchisee’s employees is left to the discretion of the franchisee.

As to the delivery operation, Domino’s witnesses testified that it required Robizza to ensure that its employees make all deliveries in compliance with all applicable laws, rules of the road and with due care and caution. Domino’s never inspected, drove, or maintained the vehicle, nor did it train or test any of Robizza’s drivers.

The appellate court noted that at both the summary judgment stage and during trial, the parties agreed that the franchise agreement was unambiguous and controlled the franchisor-franchisee relationship. The appellate court concluded that the parties merely disagreed over the construction of the franchise agreement and whether it created a master-servant relationship. Because no factual issues existed over the interpretation of the contract, the appellate court held that vicarious liability was a legal issue that should have been decided by the trial court. On appeal, the appellate court was entitled to decide this issue of law, regardless of whether their review was from a denied summary judgment motion or a judgment notwithstanding the verdict.

At the summary judgment stage, no facts were at issue and the trial court could have dismissed the vicarious liability claims based on the language of the franchise agreement. Because the trial court held that there were factual issues, although none had been raised regarding the scope of control by Domino’s, the case proceeded with vicarious liability as an issue. Plaintiffs had the ability at trial to establish a master-servant relationship based not only on the nature and extent of control as defined in the franchise agreement, but also based “on the actual practice of the parties.” The Superior Court held reviewed the trial record and concluded that none of the witnesses testified that the “actual practice of the parties” were different from the franchise documents.

The Superior Court then analyzed the elements necessary to prove vicarious liability and reviewed applicable precedent in the franchise space, citing that “the mere existence of a franchise relationship does not necessarily trigger a master-servant relationship, nor does it automatically insulate the parties from such a relationship, citing Drexel v. Union Prescription Centers, 582 F.2d 781 (3d Cir. 1978). Under Pennsylvania law, a franchisor can only be held vicariously liable for the negligence of a franchisee’s employee if it exercises the control of a master-servant relationship. The case surveys the vicarious liability cases of franchisors, and reviewed the testimony in the case in order to conclude that no master-servant relationship was established by the testimony or the contracts, and that no vicarious liability should have been imposed.

Notably, the dissent would hold that in the franchisor-franchisee context, the vicarious liability issue is a question of mixed fact and law. The dissent cites conflicting opinions on such issues and conflicts in the testimony that suggests individual weighing by the jury of such facts is important for the determination of vicarious liability. The dissent noted that the trial judge agreed with the master-servant finding of the jury, demonstrating that an analysis is a question of mixed law and fact.

Reprinted with permission from the November 16, 2023 issue of The Legal Intelligencer© 2023 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.