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Teri Gottlieb Et Al Respondents,

Teri Gottlieb Et Al Respondents,
Jerry B. Stern, Defendant, and
Paramus Auto Mall, Inc., Et Al., Appellants.

Court Discusses Whether an Employer is Vicariously Liable for Tortious Acts Committed by an Employee

The plaintiff brought action against an employee of automobile dealership and the automobile dealership for personal injuries sustained in motor vehicle accident. The injuries sustained by the plaintiff were as a result of the first defendant, who was the employee, driving a motor vehicle owned by the automobile dealership, the wrong way on a one-way street in New Jersey. The employee admitted that he was guilty of driving while intoxicated; as such, he had mistaken the one-way street for an exit. The motor vehicle being driven by the first defendant was given to him by his employer as a marketing tool to be used as a demonstrator vehicle. The employer of the first defendant sought summary judgment against the plaintiff because the first defendant was not advancing the interests of his employer at the time the accident occurred. Summary Judgment was denied by the Supreme Court because there was a failure to show an entitlement to judgment. The second defendant appealed the DUI.

The Appellate Division analyzed the concept of a demonstrator vehicle and whether the employee was advancing the interest of his employer. The first defendant was hired as a sales associate by the second defendant and was given a demonstrator vehicle as a benefit and a marketing tool. He was given the vehicle along with an “Employee Demonstrator Agreement” where it stated that it was provided as a selling tool for the benefit of the dealership and the employee should drive the vehicle for maximum visibility. The agreement further stated that the employee may drive the car to and from community functions, shopping activities or any other similar activities within 50 mile radius marketing area during normal business hours and reasonable off hours. The court considered whether there was an agency relationship between the employee and employer at the time of the accident in order for the employer to be vicariously liable. In New Jersey, the common law dictates that there is a dual purpose rule which states that an employer is vicariously liable where the employee was advancing both the interest of the employer and his personal interest. The second defendant argued that Supreme Court gave the doctrine liberal application because of the identifier on the license plate and their image on the rear bumper. However, the employer failed to show that employee was not advancing their interest while he was driving in the demonstrator vehicle. The accident happened while the first defendant was using the vehicle for his personal use. Under the agreement between the employer and employee, the employee should use the vehicle for maximum visibility. The first defendant under the agreement was permitted to use to vehicle for his personal use within reasonable hours after work to achieve maximum visibility. Therefore, the first defendant in using the car for his personal benefit also advanced the interest of his employer.

The Appellate Division of the Supreme Court affirmed the holding of the lower court as the dual purpose rule precluded the second defendant from achieving summary judgment. The issue was whether the employee of the second defendant’s dealership was advancing their interests while driving company car within dealership’s marketing region on his day off. The demonstrator vehicle agreement was dictated the relationship with the employer and employee. The purpose of the vehicle was to attract prospective buyers within the area of the dealership. The license plate and the image on the bumper were not the main considerations of the lower court as asserted by the second defendant. There were triable issues as the dealership could not show that they were not partly responsible for the negligence of the first defendant.

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