On May 13, 2013, the Appellate Division overturned a $7.4 million judgment in Lau v. Seabring Associates, A-3864-10, in favor of a pedestrian who had been hit by an underaged drunk driver leaving a pool party at an apartment complex, finding that the apartment complex was not a social host and was not liable for the victim’s injuries. The pool party had not been sponsored by the apartment complex. Instead, a front desk concierge had permitted the party to occur, in spite of the complex’s pool hours and prohibition of alcohol at the pool.
At the trial level, a jury had awarded the pedestrian $7.4 million in damages, allocating 55% of the liability to the owner of the apartment complex, 25% of the liability to the driver, and 20% of the liability to the concierge. The driver entered into a $15,000.00 settlement with the victim, while the concierge defaulted. The apartment complex owner therefore became liable for the balance of the judgment under New Jersey’s joint and several liability statute. Joint and several liability means that a single defendant is responsible for paying a plaintiff the entirety of the judgment, and must then pursue reimbursement from its co-defendants.
However, the Appellate Division overturned the judgment, finding that the trial court had improperly instructed the jury to consider whether the apartment complex was liable as a social host and whether it was liable for the actions of the concierge. The Appellate Division found that the complex did not have any social host liability because the complex was not acting as a social host for the party. The pool party had not been sponsored or condoned by the complex’s owner, and no evidence had been introduced to suggest that the complex’s owner had supplied the alcohol for the party. Instead, it simply acted as an employer of an employee who had failed to enforce the complex’s pool rules. The Appellate Division also noted that because the driver was under age, the complex would have been liable under traditional negligence principles under common law, rather than social host liability, had it been a sponsor of the party.
The Appellate Division also found that the complex could not be liable for its employee’s failure to enforce the rules under a respondeat superior theory of liability. Respondeat superior is a legal doctrine which translates to “let the master answer” in Latin, and means that an employer is responsible for the actions of its employees performed within the course of their employment. The Appellate Division held that respondeat superior did not apply because the concierge had acted outside the scope of his employment by ignoring his employer’s rules regarding use of the pool. The Court noted that his actions “directly undermined the security of the building that [the concierge] was hired to provide.” Because the employee’s action was not within the scope of his employment, and not intended to serve his employer, the Court found that respondeat superior did not apply and that the apartment house could not be vicariously liable for the concierge’s unauthorized actions.
This opinion is an important holding for owners of multi-family developments and associations offering common elements for social events. To avoid social host liability, the owner must have clear rules about how the common areas may be used, definitively establish whether an event is sponsored by the complex or community, and insure that party-goers at sponsored events do not drive after drinking.