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Legal Memorandum: Vicarious Liability for Punitive Damages

Issue: Can a fiduciary’s employer be held vicariously liable for punitive damages imposed against the fiduciary?

Area of Law: Employee Law, Litigation & Procedure
Keywords: Imputed punitive damages; Respondeat superior
Jurisdiction: Arizona
Cited Cases: 641 P.2d 891; 907 P.2d 506; 732 P.2d 200
Cited Statutes: None
Date: 06/01/2010

Jacobson v. Superior Ct., 743 P.2d 410 (Ariz. 1987) (“Where there is a clearly defined master-servant relationship a stronger argument for imputed punitive damage liability is proper because the master defines the scope of employment, often in quite specific terms, and will often closely supervise the servant’s activities in the scope of that employment.  The master thus has a greater ability to control the servant’s actions and prevent the negligent or wilful tort.”). 

Hyatt Regency Phoenix Hotel Co. v. Winston & Strawn, 907 P.2d 506 (Ariz. Ct. App. 1995) (“The trial court recognized that ‘the award of punitive damages . . . against Winston & Strawn was based solely upon a theory of respondeat superior.  There was no claim that Winston & Strawn acted negligently or punitively other than through the actions of Greenfield.’ Winston & Strawn argues that under Arizona law, a wholly passive employer cannot be liable for punitive damages under the respondeat superior doctrine.  We disagree and hold that Arizona’s partnership statutes and common law permit punitive damages to be awarded vicariously against Winston & Strawn for acts that Greenfield performed in the ordinary course of the partnership’s business.”).

Rubi v. Transamerica Tit. Ins. Co., 641 P.2d 891 (Ariz. Ct. App. 1981) (“Although it is well settled that a corporation may be held liable for punitive damages because of the culpable conduct of an employee, this does not preclude the trial court from considering that the corporation’s liability is vicarious.  […]

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