South-Western Legal Studies in Business

Ostensible Authority for Vehicle Use by Employee May Impose Liability on Employer
Description

Appeals court held that an employer could be liable for injuries caused by an employee who caused an accident while using a company car to run an errand. While there was no express permission to use the vehicle for this purpose, the jury could find ostensible authority.

Topic

Agency

Key Words

Tort; Agent; Scope of Employment; Ostensible Authority

C A S E   S U M M A R Y
Facts

Lewis, an employee of Roseville Toyota, was driving a Roseville car on a personal errand during his lunch break when he rear-ended another car that stopped for a red light. The occupants of the other car sued Lewis and Roseville for their injuries. The jury found Lewis to be negligent and that while he was not acting in the scope of his employment, he was using the car with permission of Roseville, which was found liable for $277,662 in damages. Roseville appealed.

Decision

Affirmed. The fact that a vehicle owner either failed to monitor or supervise the use of its vehicles is a factor in determining implied permission for someone to use the vehicle. Lewis testified that the employee who controlled keys to company cars said he could use the car to run an errand. This use may have been without express permission by the vehicle owner, but showed ostensible authority to use the vehicle. Ostensible authority is authority that the principal, either intentionally or by lack of ordinary care, causes or allows a third party to believe the agent possesses. The jury could reasonably infer here that the employee was acting with the permission of the employer.

Citation

Taylor v. Roseville Toyota, Inc., 138 Cal.App.4th 994 (Ct. App., Calif., 2006)

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