Utah Supreme Court
Does releasing an employee automatically release the vicariously liable employer? Nelson v. Corp. of the Presiding Bishop Explained
Summary
Plaintiff settled with Crabtree, who injured him during a church youth activity, while expressly reserving claims against the Church under respondeat superior. The trial court granted summary judgment for the Church, ruling that the release of Crabtree automatically discharged the Church from vicarious liability.
Practice Areas & Topics
Analysis
In Nelson v. Corp. of the Presiding Bishop, the Utah Supreme Court addressed a critical question in tort law: whether releasing an employee from liability automatically releases their employer from claims based on respondeat superior.
Background and Facts: Mark Hirschfeld was seriously injured during a church youth activity when his adult supervisor, Darrin Crabtree, fell on him. Hirschfeld sued both Crabtree for negligence and the Church under respondeat superior. The parties stipulated that Crabtree was acting within the scope of his authority as a Church volunteer. Hirschfeld settled with Crabtree for $100,000 through a release that specifically reserved all claims against the Church while acknowledging the risk that a court might find the release also immunized the Church.
Key Legal Issues: The central question was whether the Joint Obligations Act or the Liability Reform Act (LRA) governed the release’s effect on the Church’s liability. The Church argued it wasn’t a “defendant” under the LRA because vicarious liability doesn’t attach “because of fault,” and that common law principles from Holmstead required dismissal.
Court’s Analysis and Holding: The Court held that the Joint Obligations Act controlled, finding both Crabtree and the Church were “obligors” liable for a tort. Under section 15-4-4, the release of one obligor doesn’t discharge co-obligors when rights are expressly reserved in writing. The Court distinguished this case from the LRA’s scope, noting the LRA only addresses defendants liable “because of fault,” while vicariously liable employers remain jointly and severally liable under traditional respondeat superior principles.
Practice Implications: This decision preserves plaintiffs’ ability to pursue vicariously liable employers even after settling with employees, provided proper reservations are made. The Court noted that plaintiffs cannot recover a windfall—any amounts paid by the employee are credited against the employer’s liability. For practitioners, this emphasizes the importance of careful drafting in settlement agreements and understanding how different statutory schemes interact with common law doctrines in tort cases involving vicarious liability.
Case Details
Case Name
Nelson v. Corp. of the Presiding Bishop
Citation
1997 UT
Court
Utah Supreme Court
Case Number
No. 950259
Date Decided
March 25, 1997
Outcome
Reversed
Holding
The release of a tort-feasor employee does not automatically release the vicariously liable employer when the plaintiff expressly reserves rights against the employer in writing under the Joint Obligations Act.
Standard of Review
Summary judgment reviewed for correctness
Practice Tip
When settling with an employee in a respondeat superior case, explicitly reserve all rights against the employer in writing as part of the release agreement to preserve vicarious liability claims.
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