Court of Appeals of Texas,

Fort Worth.

RSI INTERNATIONAL, INC. and Essex Insurance Company, Appellants

v.

CTC TRANSPORTATION, INC., Appellee.

No. 2-08-383-CV.

June 18, 2009.

From the 236th District Court of Tarrant County.

Marc J. Wojciechowski, for RSI International, Inc. and Essex Insurance Company.

James H. Baumgartner, for CTC Transportation, Inc.

PANEL: LIVINGSTON, WALKER, and MEIER, JJ.

OPINION

SUE WALKER, Justice.

I. INTRODUCTION

Appellants RSI International, Inc. and Essex Insurance Company appeal the judgment entered after a bench trial ordering them to pay Appellee CTC Transportation, Inc. $54,604.91 plus interest and attorney’s fees. The primary issue that we address is whether a coinsurance provision in a motor truck cargo liability policy issued by Essex to CTC is ambiguous. Because we hold that, as a matter of law, the coinsurance provision is not ambiguous, we will reverse the trial court’s judgment and render judgment that CTC recover only $36,739.49 from Appellants.

II. BACKGROUND

CTC specializes in hauling heavy-duty equipment. CTC wanted to insure the equipment it hauled and spoke to Charles Lindamood, an agent with RSI, about obtaining insurance. Lindamood obtained a motor truck cargo liability policy for CTC with Essex. Essex issued identical policies to CTC each year from 2001 through 2005; each policy contained the same coinsurance provision. The policy CTC obtained for coverage from April 28, 2005 to April 28, 2006 (hereinafter this policy is referred to as “the policy” because it is the one at issue) provided for a 1% deductible, a $500,000 limit of loss, and the same coinsurance provision as CTC’s prior motor cargo liability policies. The coinsurance provision-which will be set forth in its entirety later in this opinion-generally provided that Essex would not be liable for a greater percentage of CTC’s liability for loss than the limit of the policy to the total value of the cargo at the time of the loss.

On November 10, 2005, one of CTC’s tractors was transporting a large crane. The value of the crane being transported was $700,000. During the transport, the crane hit a bridge as the tractor passed under the bridge. The cost to repair the crane was stipulated to be $61,604.91. CTC submitted a claim to Essex under the policy.

Joel Voelkner of York Claims Services, Inc. produced a report for Essex calculating CTC’s settlement under the policy as follows:

In review of the load, its value was $700,000. In review of the policy, it maintained a $500,000 limit for cargo. As such, this would indicate a 71% co-insurance penalty, which reduces the amount payable from $61,604.91 to $43,739.49 (a difference of $17,865.42). This amount i[s] further reduced by the 1% deductible, which in this case would be $7,000. This provides us with a final settlement figure of $36,739.49.

After CTC learned of the proposed settlement amount, CTC’s attorney wrote a letter to Lindamood and Voelkner stating that the “co-insurance penalty” of $17,865.42 was “totally unacceptable” to CTC. CTC indicated that it would agree to a reduction of Essex’s payment for the $61,604.91 loss only by the $7,000 deductible; CTC claimed that Essex was required to pay the remaining $54,604.91. Because the parties could not reach an agreement on the settlement amount required under the policy, CTC filed suit, alleging that Appellants had materially breached the terms and conditions of the insuring agreement.

After a bench trial, the trial court entered findings of fact and conclusions of law and signed a final judgment. Among its findings, the trial court found (1) that the 100% coinsurance provision provides in sum or substance that Essex would not be liable for loss or damage to cargo on any noninsured vehicle because the word “vehicle” was not in bold face type and (2) that Essex’s proposed interpretation of the exclusion would essentially void the provision providing for the limit of loss. In its conclusions of law, the trial court concluded that the “100% Co-Insurance” provision of the policy “is unintelligible as written, is vague, confusing and ambiguous”; that Essex failed to provide CTC with the insurance coverage CTC had purchased; that Essex was liable for CTC’s damage of $61,604.91, less the applicable deductible of $7,000 (1% of the value of the cargo), for a total award to CTC of $54,604.91;  and that CTC was entitled to recover its reasonable and necessary attorneys’ fees in the total sum of $40,000. This appeal followed.

The trial court concluded that CTC’s policy provided “insurance coverage for the first $500,000 of any damage, less the applicable deductible.”

III. THE COINSURANCE PROVISION IS NOT AMBIGUOUS

In their first issue, Appellants argue that the trial court erred by finding the coinsurance provision ambiguous as a matter of law. In their other three issues, Appellants challenge the legal and factual sufficiency of several findings of fact and conclusions of law. Because Appellants’ first issue is dispositive, and in substance encompasses the remainder of their issues, we will address it first.

A. Standard of Review

A contract is ambiguous only if, after the application of established rules of construction, an agreement is still susceptible to more than one reasonable meaning. Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex.1996). If a contract is unambiguous, its terms can be interpreted as a matter of law by the court. Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). When an issue turns on a question of law, we do not give any particular deference to legal conclusions of the trial court and apply a de novo standard of review. Trinity Indus., Inc. v. Ashland, Inc., 53 S.W.3d 852, 868 (Tex.App.-Austin 2001, pet. denied).

When an appellate court concludes that contract language can be given a certain or definite meaning, then the language is not ambiguous, and the appellate court is obligated to interpret the contract as a matter of law. DeWitt County Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex.1999); Loaiza v. Loaiza, 130 S.W.3d 894, 905 (Tex.App.-Fort Worth 2004, no pet.). Thus, here, we review de novo the trial court’s conclusion of law that the “100% Co-Insurance” provision of the policy “is unintelligible as written, is vague, confusing and ambiguous.”And if we conclude that it is not ambiguous, we are obligated to interpret the contract as a matter of law. Loaiza, 130 S.W.3d at 905;see also Upshaw v. Trinity Cos., 842 S.W.2d 631, 633 (Tex.1992).

B. Rules of Construction

We construe insurance policies according to the same rules of construction that apply to contracts generally. Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Crocker, 246 S.W.3d 603, 606 (Tex.2008). Enforcing the parties’ expressed intent is our primary concern. See Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex.1994). Policy terms are given their ordinary and commonly understood meaning unless the policy itself shows that the parties intended a different, technical meaning. Gonzalez v. Mission Am. Ins. Co., 795 S.W.2d 734, 736 (Tex.1990).“No one phrase, sentence, or section [of the policy] should be isolated from its setting and considered apart from the other provisions.” Forbau, 876 S.W.2d at 134.

Not every difference in the interpretation of a contract creates an ambiguity. See id.The mere disagreement over the meaning of a particular provision in a contract does not make it ambiguous. GTE Mobilnet of S. Tex. Ltd. P’ship v. Telecell Cellular, Inc., 955 S.W.2d 286, 289 n. 1 (Tex.App.-Houston [1st Dist.] 1997, writ denied). In order for an ambiguity to exist when the parties advance conflicting interpretations, both interpretations must be reasonable. See Columbia Gas Transmission Corp., 940 S.W.2d at 589.

C. The Policy’s Provisions

The insurance policy that Essex issued to CTC contained the following provisions:

IV. LIMIT OF LOSS $500,000.00 (As defined in Insuring Agreement)

V. Deductible (per paragraph 5) $1% of value of load but not less than $1,000.00 any one occurrence.Refrigeration Breakdown Deductible $N/A

….

INSURING AGREEMENTS

….

Limit of Loss.This Company will be liable for the least of the following:

Actual cash value of cargo at the point of shipment on the date of loss;

The Insured’s legal liability under the bill of lading or shipping receipt;

The cost to repair;

but in no event for more than the indicated Limit of Liability shown in the Declarations for each vehicle or terminal and not to exceed the Limit of Loss shown in the Declarations for any claims arising out of any one loss involving (1) two or more vehicles; (2) one or more terminals and one or more vehicles; (3) any other combination or circumstance.

100% Coinsurance.The Company shall in no event be liable under the policy with respect to the insured’s liability for loss or damage to cargo on any vehicle or at any terminal described in the Declarations for a greater percentage of any loss or damage than the respective limit(s) applicable under this Policy bears to the total value of the cargo on the vehicle or at the terminal at the time of the loss or damage, whether damaged or not.

D. The Parties’ Arguments

Appellants argue that the coinsurance clause was not ambiguous as a matter of law. Specifically, Appellants argue that the trial court totally disregarded and “wrote out of the [p]olicy the coinsurance language” instead of construing it in light of the policy’s limit of loss section. Appellants state that in looking at the “Insuring Agreement” for the definition of “Limit of Loss,” there is nothing ambiguous about how to determine the limit of loss; it is simply the least of the three possible amounts, which in this case was the $61,604.91 cost to repair the crane. Then, because under the coinsurance provision Essex is not responsible “for a greater percentage of any loss or damage than the respective limit(s) applicable under this [p]olicy bears to the total value of the cargo,” the $500,000 applicable limit is divided by the $700,000 total value of the cargo (the crane) that CTC was carrying at the time of the accident to obtain Essex’s liability for the loss, which comes to 71%. After adjusting the $61,604.91 by 71%, then the $7,000 deductible is subtracted because the policy states that Essex “shall have no obligation under this form until the claim exceeds the deductible” and provides that one must apply the deductible to “each adjusted claim.” Appellants’ calculation produces a figure of $36,739.49 and tracks with the calculation that Voelkner used.

CTC, on the other hand, argues that ambiguity exists on the face of the policy not only because the parties disagree on its interpretation but because, according to CTC, the policy is not susceptible to any reasonable interpretation. CTC asserts two arguments in support of the position that the policy, specifically the coinsurance provision, is not susceptible to any reasonable interpretation.

First, CTC claims no reasonable interpretation is possible because the coinsurance provision uses the term “vehicle” and the term “vehicle.” CTC argues that “vehicle” necessarily refers to an uninsured vehicle because “vehicle” is a defined term in the policy.“Vehicle” is defined in the “DEFINITIONS” section of the policy as “[a] power unit specifically scheduled on the Declarations and any trailer while physically attached to the power unit, or a detached trailer specifically scheduled on the Declarations. If blanket coverage is provided, vehicle shall include all power units and trailers attached or otherwise operated by the insured.”CTC argues that because the term “vehicle” is a defined term, it cannot be used interchangeably with “vehicle.” And, according to CTC, construing the term “vehicle” in the coinsurance provision to mean an uninsured vehicle and giving the term “vehicle” in the coinsurance provision its defined meaning, the coinsurance provision is unintelligible, vague, confusing, and ambiguous, as determined by the trial court.

As set forth above in the coinsurance provision, when that provision uses the unbolded term “vehicle,” it is modified by “described in the Declarations,” indicating that at least the coinsurance provision’s use of the unbolded term “vehicle” referred to a vehicle identified on the declarations page as a covered vehicle not, as CTC argues, an uninsured vehicle.

Second, CTC points to two alleged conflicts between the application for insurance completed by Lindamood and the policy issued. Specifically, CTC contends that the “maximum exposure per vehicle” of $500,000 Lindamood wrote on the application is synonymous with the $500,000 limit of loss in the policy but is “diametrically opposed to the ‘max value’ of the commodity from the application and its inclusion in the 100% coinsurance provision.”Thus, in arguing that the policy is subject to no reasonable interpretation, CTC points to alleged disparities between its application for insurance and the actual insurance policy.

E. Analysis

The starting point of our analysis is the instrument itself. See Coker, 650 S.W.2d at 393 (“If the written instrument is so worded that it can be given a certain or definite legal meaning or interpretation, then it is not ambiguous and the court will construe the contract as a matter of law.”). Applying the rules of construction to the instrument itself, we must construe the insurance policy to give effect to all of the policy’s terms so that none will be rendered meaningless. Id. at 393.CTC’s construction of the policy to distinguish between the terms “vehicle” and “vehicle” in the coinsurance provision is unreasonable because it renders the entire coinsurance provision meaningless; CTC essentially concedes this point by claiming that the coinsurance provision (as interpreted by CTC) is unintelligible as written, vague, confusing, and ambiguous. See Fisher v. N. Am. Life & Cas. Co., No. 05-93-01723-CV, 1995 WL 45640, at(Tex.App.-Dallas Jan. 31, 1995, no writ) (not designated for publication) (holding that “[t]o adopt [insured’s] interpretation would be to render this general limitation provision meaningless”). Moreover, CTC’s construction is not supported by the plain language of the coinsurance provision itself because that provision provides that it applies to “any vehicle … described in the Declarations” when the total value of the cargo exceeds the $500,000 policy limit.

And though not clearly readable on the “Automobile Loss Notice,” it appears that the vehicle involved in the accident was a 2001 Kenworth tractor with an identification number that looks remarkably similar to “057031.” This would match the one and only 2001 Kenworth tractor shown on the Declarations page of the policy, which lists the “vehicles” covered by the policy.

Giving the terms of the coinsurance provision their plain meanings, construing the coinsurance provision so as to harmonize it with the entire motor truck cargo liability policy, and giving effect to each clause of the policy, the coinsurance provision is subject to only one reasonable interpretation and that is the interpretation urged by Appellants. Accordingly we hold that the coinsurance provision is not ambiguous as a matter of law. See Loaiza, 130 S.W.3d at 905 (“A contract is ambiguous only if, after the application of established rules of construction, an agreement is still susceptible to more than one reasonable meaning”) (citing DeWitt County Elec. Coop., Inc., 1 S.W.3d at 100; Columbia Gas Transmission Corp., 940 S.W.2d at 589); Yancey v. Floyd W. & Co., 755 S.W.2d 914, 920 (Tex.App.-Fort Worth 1988, writ denied) (holding that because there was only one reasonable construction of the language in the policies, no ambiguity existed within the policies at issue). Accordingly, we construe the policy as a matter of law; the policy mandates the calculations propounded by Appellants.

Based on this holding, we cannot agree with CTC’s contention that we may rely on testimony of the contracting parties’ intent in construing the policy or that the language in the application for insurance may conflict with, and create ambiguity in, the policy. Cf. Rutherford v. Randal, 593 S.W.2d 949, 953 (Tex.1980) (“The absence of an ambiguity in the deed negates all justification for the consideration of extrinsic evidence concerning the original intent of the grantor…. Under these circumstances, this court will limit its search for the grantor’s intent to that intent which was expressed within the four corners of the deed.”). CTC’s subjective belief as to what the contracting parties intended to be covered under the policy limits is immaterial, insofar as such intentions are not found in, and in fact add to, the plain language of the policy itself. See Koelsch v. Indus. Gas Supply Corp., 132 S.W.3d 494, 498 (Tex.App.-Houston [1st Dist.] 2004, pet. denied); see also Gary E. Patterson & Assocs., P.C. v. Holub, No. 01-04-00108-CV, 2008 WL 100233, at (Tex.App.-Houston [1st Dist .] Jan. 10, 2008, pet. denied) (providing that “ ‘[u]nder the parol evidence rule, … all prior negotiations and agreements with regard to the same subject matter are excluded from consideration’ “ and that “ ‘a written instrument presumes that all prior agreements relating to the transaction have been merged into it and will be enforced as written and cannot be added to, varied, or contradicted by parol testimony’ ”). We sustain Appellants’ first issue.

Because we have sustained Appellants’ first issue claiming that the coinsurance provision is unambiguous as a matter of law, we likewise sustain Appellants’ third and fourth issues  challenging the trial court’s contrary conclusions of law, including conclusion of law number 7 that awarded attorney’s fees to CTC for breach of contract. See Newton v. Meade, 143 S.W.3d 571, 575 (Tex.App.-Dallas 2004, no pet.)(holding that when no breach of contract claim is established, party may not recover attorney’s fees under Texas Civil Practice and Remedies Code section 38.001(8)). We reverse the trial court’s judgment and render judgment pursuant to the unambiguous provisions of the policy that CTC recover only $36,739.49 from Appellants and that CTC take nothing on its claim for attorneys’ fees.

We need not reach Appellants’ second issue because the challenged finding of fact relates to the ambiguity of the insurance provision and has no legal significance in light of our holding that the provision is unambiguous as a matter of law.

IV. CONCLUSION

Having sustained Appellants’ issues that are necessary for disposition of the appeal, we reverse the trial court’s judgment and render judgment that CTC recover only $36,739.49 from Appellants and that CTC take nothing on its claim for attorneys’ fees.

Court of Appeals of Washington,

Division 2.

Rizwana RAHMAN, Appellant,

v.

STATE of Washington, Respondent,

v.

Mohammad Shahidur Rahman, individually and Mohammad Shahidur Rahman and Rizwana Rahman, as a marital community, Third Party Defendants.

No. 37327-1-II.

May 27, 2009.

BRIDGEWATER, J.

¶ 1 Rizwana Rahman was injured while riding in a state vehicle as an unauthorized passenger. She filed suit against the State of Washington for damages associated with her injuries. The trial court summarily dismissed her complaint. We hold that as a matter of law the State is vicariously liable for Rizwana’s injuries under the doctrine of respondeat superior. We reverse and remand for further proceedings.

FACTS

¶ 2 Mohammad Shahidur Rahman was employed as a summer intern by the Washington State Department of Ecology (Department) from June 1 to August 31, 2005. He was assigned to the dam safety office. His job duties included assisting with drafting, performing engineering calculations and basic data analysis, accompanying senior engineers on inspections, and helping to write reports.

¶ 3 When Mohammad  was hired, he was required to review Department policies including the use of state vehicles. Department of Ecology Policy 11-10 covers the operation of Ecology vehicles. It provides: “Ecology vehicles are not to be used for personal trips unrelated to the state business for which they were assigned, nor to transport passengers that are not on official state business.”CP at 155.

¶ 4 Mohammad had been working for about two months when his supervisor, Douglas Johnson, assigned him to travel for an inspection. Mohammad was to drive to Spokane in order to meet a Department hydrologist with whom he would inspect a construction site. Johnson authorized Mohammad to sign out a Department vehicle overnight so that he could leave directly for Spokane the next morning.

¶ 5 The night before Mohammad’s scheduled business trip, his wife Rizwana felt ill. She was also lonely and wanted to go with her husband the next day. The couple had been recently married and she had just moved to Washington. Mohammad agreed that Rizwana could ride with him to Spokane the next day. They planned for her to stay in the car during the site visit, and then they would drive directly home so Mohammad could be back at his office the following day. Mohammad did not inform anyone at the Department that Rizwana was going to accompany him.

¶ 6 Mohammad and Rizwana left Olympia about 5 AM on July 26. It was dark and drizzling when they passed Tiger Summit on Highway 18. As Mohammad drove downhill, he failed to negotiate a curve. The vehicle left the roadway, struck a tree, and rolled two or three times. Rizwana was badly injured.

¶ 7 Mohammad called his supervisor from the scene of the accident, explained what had happened, and said that his wife was badly injured. Prior to that call, Johnson did not know that Mohammad’s wife was with him. Johnson instructed Mohammad to attend to his wife and tell the state patrol officer at the scene that he worked for the Department. Mohammad later received a letter of reprimand for violating the Department policy that prohibits transporting passengers who are not on official business.

¶ 8 Rizwana filed a complaint for personal injuries in Thurston County Superior Court on June 16, 2006, naming the State of Washington and Mohammad as defendants. The complaint was later amended to name the State of Washington as the sole defendant.

¶ 9 The State filed a third-party complaint, denying its liability and asserting that to the extent it might be found liable for Mohammad’s actions, it was entitled to full indemnification from Mohammad and full or partial indemnification from the marital community of Mohammad and Rizwana for any damages, costs, or fees assessed against it.

¶ 10 Rizwana moved for partial summary judgment, seeking an order determining that the State was vicariously liable under the doctrine of respondeat superior for Mohammad’s negligence in causing the accident. The State filed a cross-motion, asserting that it was not liable for Rizwana’s injuries because, as a matter of law, Mohammad’s use of a state vehicle to transport his wife was outside the scope of his employment.

¶ 11 Argument was heard before Thurston County Superior Court Judge Anne Hirsch on March 16, 2007. Summary judgment was denied pending discovery as to whether the State had policies or procedures for authorizing non-employee passengers.

¶ 12 The parties later renewed their motions. Argument was heard before Thurston County Superior Court Judge Chris Wickham on January 25, 2008. The material facts were undisputed:

Everyone agrees that [Mohammad] was working for the State of Washington, that there was a policy that prevented [him] from having a passenger in a state vehicle on state business. Everyone agrees that [he] took his wife on a trip east of the mountains, in violation of the policy. She was injured in an automobile accident….

….

And everyone agrees that [Mohammad’s] operation of the vehicle was negligent.

RP (Jan. 25, 2008) at 5.

¶ 13 The court framed the question at issue as “whether the State has a duty to [Rizwana] under the Doctrine of Respondeat Superior.”RP (Jan. 25, 2008) at 5. The court granted the State’s motion, ruling that “there is no liability under the theory of Respondeat Superior under these circumstances.”RP (Jan. 25, 2008) at 18. The court noted that there is no Washington case law directly on point and relied in part on Restatement (Second) of Agency § 242 (1958) to determine that the circumstance presented warranted special treatment and that general principles of respondeat superior do not apply in this context. Rizwana’s appeal to this court followed.

ANALYSIS

¶ 14 In reviewing orders on summary judgment, this court engages in the same inquiry as the trial court. Huff v. Budbill, 141 Wash.2d 1, 7, 1 P.3d 1138 (2000). Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.CR 56(c); Huff, 141 Wash.2d at 7, 1 P.3d 1138.

¶ 15 Rizwana argues that because Mohammad was performing his job functions at the express direction of his employer when the accident occurred, the State is vicariously liable for her injuries as a matter of law under the doctrine of respondeat superior. Under this doctrine, an employer may be liable for its employee’s negligence in causing injuries to third persons if the employee was within the “scope of employment” at the time of the occurrence. Breedlove v. Stout, 104 Wash.App. 67, 69, 14 P.3d 897 (2001). The test for determining if an employee is acting in the scope of employment is “whether the employee was, at the time, engaged in the performance of the duties required of him by his contract of employment, or by specific direction of his employer.” Greene v. St. Paul-Mercury Indem. Co., 51 Wash.2d 569, 573, 320 P.2d 311 (1958). While determining the scope of employment is normally a jury question, where there can be only one reasonable inference from the undisputed facts, the issue may be resolved at summary judgment. Breedlove, 104 Wash.App. at 70 n. 5, 14 P.3d 897; Strachan v. Kitsap County, 27 Wash.App. 271, 274-275, 616 P.2d 1251,review denied, 94 Wash.2d 1025 (1980).

¶ 16 Our Supreme Court has further explained:

The general trend of authority is in the direction of holding that, where the employee is combining his own business with that of his employer, or attending to both at substantially the same time, no nice inquiry will be made as to which business the employee was actually engaged in when a third person was injured, and the employer will be held responsible unless it clearly appears that the employee could not have been directly or indirectly serving his employer; also the fact that the predominant motive of the employee is to benefit himself does not prevent the act from being within the course or scope of employment, and if the purpose of serving the employer’s business actuates the employee to any appreciable extent, the employer is subject to liability if the act otherwise is within the service.

McNew v. Puget Sound Pulp & Timber Co., 37 Wash.2d 495, 497-98, 224 P.2d 627 (1950). Moreover, the court has rejected the notion that “breaking company … policy” renders an employee not within the scope of employment. Dickinson v. Edwards, 105 Wash.2d 457, 470, 716 P.2d 814 (1986). The Dickinson court observed that “ ‘[a]n act, although forbidden, or done in a forbidden manner, may be within the scope of employment.’” Dickinson, 105 Wash.2d at 470, 716 P.2d 814 (quoting Restatement (Second) of Agency § 230 (1958)). Accordingly, Dickinson held that an employer may be liable for the negligent acts of its employee, although such act “may be contrary to instructions.” Dickinson, 105 Wash.2d at 470, 716 P.2d 814.

¶ 17 Likewise, in Smith v. Leber, 34 Wash.2d 611, 209 P.2d 297 (1949), our Supreme Court dealt with a similar issue. Leber claimed it was not liable for its employee’s negligence in causing a car accident, because the employee was driving in a manner contrary to the employer’s instructions. Smith, 34 Wash.2d at 618, 622-23, 209 P.2d 297.The employee had been directed to return a rented vehicle. However, his supervisor became aware that the employee had been drinking and told him not to drive it. The employee drove the vehicle anyway and caused an accident. Smith, 34 Wash.2d at 616-18, 209 P.2d 297.The court found Leber liable, stating “ ‘an employer is liable for acts of his employee within the scope of the latter’s employment notwithstanding such acts are done in violation of rules, orders, or instructions of the employer.’”   Smith, 34 Wash.2d at 623, 209 P.2d 297 (quoting 35 AM.JUR.Master and Servant § 559, at 993).

¶ 18 Contrary to the above noted cases, the State urges us to hold that an employer is not liable for injuries suffered by an unauthorized passenger that were caused by its employee. The State relies upon Restatement (Second) of Agency § 242 (1958) which states:

A master is not subject to liability for the conduct of a servant towards a person harmed as the result of accepting or soliciting from the servant an invitation, not binding upon the master, to enter or remain upon the master’s premises or vehicle, although the conduct which immediately causes the harm is within the scope of the servant’s employment.

But this section of the Restatement has never been adopted or even cited in a published appellate decision in this state.The State acknowledges this, but contends that the rule is in accord with the earlier Washington cases of Gruber v. Cater Transfer Co., 96 Wash. 544, 165 P. 491 (1917), and McQueen v. People’s Store Co., 97 Wash. 387, 166 P. 626 (1917).

¶ 19 In Gruber, the employer, Cater Transport, was a business engaged in the transport of goods using both automobile and horse-drawn trucks. Gruber, 96 Wash., at 545, 165 P. 491.Gruber hired Cater Transport to move his household goods. Cater’s driver allowed Gruber to ride on the cargo and Gruber was injured when he was ejected from the truck when it hit a bump in the road. The Supreme Court held that the driver was without authority to allow Gruber to ride with the cargo and therefore found in favor of Cater Transport. Gruber, 96 Wash., at 549-50, 165 P. 491.

¶ 20 Gruber is inapposite. It does not mention respondeat superior and does not meaningfully discuss scope of employment for present purposes. Moreover, the decision turns on two key facts not present here: first, that the vehicle at issue was obviously not meant to accommodate passengers in its cargo area, and second, that the parties had contracted to carry cargo and not passengers. See Gruber, 96 Wash., at 546-49, 165 P. 491.

¶ 21 In McQueen, the court considered the case of a delivery driver who chose to give two women a ride on the running board of his employer’s vehicle. One of the women was injured when she either fell or jumped off the vehicle as it was moving. McQueen, 97 Wash., at 388, 166 P. 626.The Supreme Court held that the employee was not within the scope of his employment and his employer was not liable. McQueen, 97 Wash., at 390, 166 P. 626.Addressing whether the driver’s invitation to the women to ride on the truck’s running board fell within the scope of his employment, our Supreme Court stated:

the act complained of must have been done while the servant was engaged in doing some act under authority from his master; not that, while engaged in the act, he is employed in the master’s business; but the act must have been in the furtherance of the master’s business and such as may be fairly said to have been either expressly or impliedly authorized by the master.

McQueen, 97 Wash. at 388-89, 166 P. 626.In other words, “the act causing the injury must pertain to the duties which the servant was employed to perform and is being done as a means or for the purpose of doing the work assigned him by the master.” McQueen, 97 Wash. at 389, 166 P. 626.

¶ 22 The McQueen court held that in inviting the women to ride on the running board of the truck the driver was “not acting within the scope of his employment, there being no question that he had no authority to invite or permit persons to ride with him while delivering merchandise for [his employer].” McQueen, 97 Wash. at 389-90, 166 P. 626.The court reasoned as follows.

In inviting the [women] to ride upon the truck, [the driver] was engaged in furthering his own pleasure and not in furthering his master’s business. His employment was to drive the truck. In inviting these [women] to ride with him, he was neither doing it as a means nor for the purpose of performing that work. It. had no connection with his work, either directly or indirectly. In extending this invitation, [the driver] was acting without any reference to the business in which he was employed. It was an independent and private purpose of his own contributing to his pleasure but not to his service. While so acting, he was his own master irrespective of the fact that the facilities afforded him to do his work were instrumental in inflicting the injuries complained of.

McQueen, 97 Wash. at 390, 166 P. 626.

¶ 23 McQueen’s rationale would seem to apply here. Mohammad’s conduct of taking his wife along on his business trip to Spokane as an unauthorized passenger in a state vehicle may be described as an independent and private purpose of his own contributing to his pleasure but not to his service. Nevertheless, McQueen is distinguishable from the present case because, unlike the driver in McQueen, Mohammad was clearly engaged in his employer’s business-driving to Spokane-when the accident occurred. Mohammad did not detour from his employer’s business.

¶ 24 Moreover, 20 years after McQueen, the Supreme Court in Poundstone v. Whitney, 189 Wash. 494, 65 P.2d 1261 (1937), relied in part on McQueen in affirming judgment against an employer for his employee’s negligence in causing a car accident resulting in injuries. In Poundstone, the employees of a car dealership had been instructed to be on the lookout for prospective customers. The business owner had authorized a shop employee to drive the employer’s automobile in a parade. The employee went out of his way to take a prospective customer to participate in the parade. On his way to pick up the prospect, the employee negligently injured third parties, to whom the employer was held liable. Poundstone, 189 Wash. at 495-99, 65 P.2d 1261.The Poundstone court held that “[t]he fact that [the employee] was performing an unauthorized act does not defeat a recovery.” Poundstone, 189 Wash. at 500, 65 P.2d 1261.The Poundstone court opined that whether an employee, at the time the act was done for which the employer was sought to be held liable, was within the scope of his employment, depends upon whether the act had been expressly or impliedly authorized by the employer. Poundstone, 189 Wash. at 499, 65 P.2d 1261.But additionally, “the employer is liable if the act complained of was incidental to the acts expressly or impliedly authorized or indirectly contributed to the furtherance of the business of the employer.” Poundstone, 189 Wash. at 499, 65 P.2d 1261 (citing cases including McQueen ).

¶ 25 Poundstone rejected the notion that an employee’s actions contrary to his employer’s instructions necessarily rendered the employee’s conduct outside of his scope of employment. Where an employee is “ ‘about his master’s business, but acting in a forbidden way,’ ” his disobedience “ ‘[does] not place him outside of the scope of his employment.’” Poundstone, 189 Wash. at 501, 65 P.2d 1261 (quoting Loux v. Harris, 226 Mich. 315, 197 N.W. 494, 495-96 (1924)).“ ‘The master is responsible for the negligent acts or omissions of his servants in the course of their employment, though unauthorized or even forbidden by him, and although outside of their line of duty, and without regard to their motives.’” Poundstone, 189 Wash. at 502, 65 P.2d 1261 (quoting Luckett v. Reighard, 248 Pa. 24, 93 A. 773, 775 (1915) (some internal quotation marks omitted)). Poundstone noted:

If it were true that a servant is outside the scope of his employment whenever he disobeys the orders of his master, the doctrine of respondeat superior would have but scant application, for the master could always instruct his servant to use ordinary care under all circumstances. The servant’s negligence would therefore always be contrary to orders, and the nonliability of the master would follow. But such is not the law. The servant is within the scope of his employment when he is engaged in the master’s service and furthering the master’s business, though the particular act is contrary to instructions.

Poundstone, 189 Wash., at 501, 65 P.2d 1261 (emphasis omitted) (quoting Smith v. Yellow Cab Co., 173 Wis. 33, 180 N.W. 125, 126 (1920)).

¶ 26 Moreover, as noted, our Supreme Court’s subsequent decisions instruct that where the employee combines his own business with that of his employer, “the employer will be held responsible” for the employee’s negligent conduct “unless it clearly appears that the employee could not have been directly or indirectly serving his employer.” McNew, 37 Wash.2d at 497-98, 224 P.2d 627.Here, Mohammad was clearly serving his employer by driving to Spokane when his negligent driving caused the accident. Rizwana’s presence as an unauthorized passenger did not change that. Smith, 34 Wash.2d at 623, 209 P.2d 297; Dickinson, 105 Wash.2d at 470, 716 P.2d 814.Accordingly, applying McNew, Smith, Dickinson, and Poundstone, we hold that Mohammad was acting within the scope of his employment at the time of the accident, thereby rendering his employer vicariously liable for his negligence. We decline the State’s invitation to adopt and apply Restatement (Second) of Agency § 242, because doing so would be contrary to McNew, Smith, Dickinson, and Poundstone.

¶ 27 We additionally note that the California Supreme Court has applied the same rule quoted above from McNew in the unauthorized passenger context in Perez v. Van Groningen & Sons, Inc., 41 Cal.3d 962, 968-70, 227 Cal.Rptr. 106, 719 P.2d 676, 680 (1986). Perez was injured while riding as an unauthorized passenger on a tractor driven by Garcia as Garcia performed his assigned task of disking his employer’s orchard. Perez’s injury occurred when a low branch knocked him off the tractor and onto the disk machinery being pulled by the tractor. The California Supreme Court held that the trial court erred in ruling that the issue of scope of employment was a question of fact for the jury in that case. The court observed that it was uncontroverted that at the time of the accident Garcia was driving his employer’s tractor in his employer’s orchards and was performing an assigned task during working hours. When Perez asked the court to instruct that Garcia was acting within the scope of his employment as a matter of law, the defendant (Garcia’s employer) argued against the proposed instruction, claiming that Garcia violated company instructions by taking an unauthorized passenger and that Garcia’s conduct benefited only Garcia and not Garcia’s employer. As noted, the trial court ruled that the question of scope of employment was an issue of fact for the jury and instructed the jury accordingly. Perez, 41 Cal.3d at 968-69, 227 Cal.Rptr. 106, 719 P.2d at 679.

¶ 28 In holding that the trial court erred, the California Supreme Court opined that “[a]s long as it is clear that at the time of the injury the employee was following his employer’s instructions to disk the orchard, the fact that he was not authorized to take a passenger is immaterial.” Perez, 41 Cal.3d at 969, 227 Cal.Rptr. 106, 719 P.2d at 679.The Perez court relied on a prior California Supreme Court case in which the plaintiff’s decedent had been killed in an accident when defendant’s employee drove through a red light. As in the Perez case:

[d]efendants argued that respondeat superior should not apply because the employee had no authority to invite passengers. We rejected that argument, stating: “… it is well known that employee-drivers often commit such breaches of duty by carrying unauthorized passengers, and so long as injury to the rider occurs while the driver is carrying out his employer’s business, the employer must be held liable under the familiar principle of liability for a servant’s torts committed as part of the transaction of the master’s business, even though the injury may accrue coincident with behavior contrary to the master’s express orders.”

Perez, 41 Cal.3d at 969, 227 Cal.Rptr. 106, 719 P.2d at 679 (alteration in original) (quoting Meyer v. Blackman, 59 Cal.2d 668, 679, 31 Cal.Rptr. 36, 381 P.2d 916 (1963)). We find this application of the rule expressed in McNew to be persuasive.

¶ 29 We also reject the State’s invitation to apply the law of trespass to affirm the trial court. Notably, the State’s sparse discussion of Washington trespass law cites no case from this jurisdiction that applies trespass law in this context, and we decline to do so here.

¶ 30 Finally, we decline the State’s invitation to consider RCW 42.52.160 because the statute is not properly before us. On the eve of oral argument, the State filed a document entitled “Supplemental Certificate of Authority” asking this court to consider RCW 42.52.160“on the issue of respondeat superior.”See spindle (capitalization omitted, emphasis omitted). While a party may file a statement of additional authorities, seeRAP 10.8, the present appeal concerns the trial court’s summary judgment determination, to which RAP 9.12 applies. When reviewing an order granting or denying a motion for summary judgment, we will consider “only evidence and issues called to the attention of the trial court.”RAP 9.12. See also Sourakli v. Kyriakos, Inc., 144 Wash.App. 501, 509, 182 P.3d 985 (2008) (citing RAP 9.12 as basis for declining to consider argument not made to the trial court), review denied, 165 Wash.2d 1017, 199 P.3d 411 (2009); Coronado v. Orona, 137 Wash.App. 308, 318, 153 P.3d 217 (2007) (RAP 9.12 limits appellate court’s review to issues brought to the trial court’s attention). The State did not argue RCW 42.52.160 to the trial court. Accordingly, we decline to consider the State’s “new” argument.

CONCLUSION

¶ 31 We hold that the trial court erred in granting summary judgment to the State on the issue of vicarious liability. Because Mohammad was clearly engaged in his employer’s business when his negligence caused injury to Rizwana, Mohammad’s employer, the Department of Ecology, is vicariously liable under the doctrine of respondeat superior as a matter of law. We reverse and remand with instructions to the trial court to enter partial summary judgment in favor of Rizwana on the issue of vicarious liability and for further proceedings consistent with this opinion.

We concur: PENOYAR, A.C.J., and ARMSTRONG, J.

We refer to the Rahmans by their first names in order to distinguish them.

Notably, section 242 has no equivalent counterpart in Restatement (Third) of Agency, which the American Law Institute adopted in 2005 and published in 2006. See2 RESTATEMENT (THIRD) OF AGENCY 488 (2006) (“PARALLEL TABLES”).

We acknowledge that Gruber is later recharacterized in McQueen as holding that the driver of the truck had no real or apparent authority to allow or permit Gruber to ride upon the truck, “or, stated as a legal proposition, that the driver was not acting within the scope of his employment.” McQueen, 97 Wash. at 390, 166 P. 626.Still, the circumstances of the Gruber case are significantly different than those of the present case, and the analysis employed in Gruber is simply not helpful here.

The facts recited in the McQueen case suggest that the driver’s purpose in driving his employer’s truck across the street while the women sat on the truck’s running board Was to continue to conceal one of the women from her brother-in-law’s view. See McQueen, 97 Wash. at 387-88, 166 P. 626.The case does not clearly state whether the driver was also in route to another delivery for his employer when so operating the truck, see McQueen, 97 Wash. at 387-88, 166 P. 626, but the court’s analysis suggests that he was not. See McQueen, 97 Wash. at 389, 166 P. 626 (“so long as the thing the servant is doing is in the furtherance of the master’s business, the master must answer for the manner in which the act is done”).

The dissent in Poundstone likewise relied in part on McQueen in arguing that the employer should not be held liable where the employee engaged in unauthorized acts without the knowledge or consent of his employer, thereby rendering his conduct outside the scope of his employment. See Poundstone, 189 Wash. at 504-05, 510, 65 P.2d 1261 (Steinert, C.J., dissenting). But that view did not win the day.

The State’s reliance upon Thompson v. Everett Clinic, 71 Wash.App. 548, 860 P.2d 1054 (1993), review denied, 123 Wash.2d 1027, 877 P.2d 694 (1994), and Kuehn v. White, 24 Wash.App. 274, 600 P.2d 679 (1979), is also misplaced. These cases hold that a tort committed by an agent, even if committed while engaged in the employment of the principal, is not attributable to the principal if the conduct emanated from the agent’s wholly personal motive and was done solely to gratify the agent’s personal objectives or desires. See Thompson, 71 Wash.App. at 553, 860 P.2d 1054; Kuehn, 24 Wash.App. at 278, 600 P.2d 679.These cases are distinguishable in that they address the issue of a principal’s vicarious liability where an agent assaults a third party. Because the current case does not involve an intentional tort, Thompson and Kuehn are inapposite.

Even if we were to consider the matter, we would hold that RCW 42.52.160 has no application here. The statute provides in relevant part that no state officer or employee may “employ or use any person, money, or property under the officer’s or employee’s official control or direction, or in his or her official custody, for the private benefit or gain of the officer, employee, or another.”RCW 42.52.160(1). The purpose of this statute is to ensure that state employees “do not waste official resources on personal business.” Clawson v. Grays Harbor College Dist. No. 2, 148 Wash.2d 528, 545, 61 P.3d 1130 (2003). There is no allegation or evidence that Mohammad wasted state resources. He did not use the state vehicle for personal errands for himself or his wife, he simply permitted Rizwana to ride along with him to a scheduled business meeting in Spokane.

Wash.App. Div. 2,2009.

Rahman v. State

— P.3d —-, 2009 WL 1472342 (Wash.App. Div. 2)

END OF DOCUMENT