Papa John's International Inc. v. McCoy ( 2008 )

Opinion of the Court by

Justice MINTON.

I. INTRODUCTION.

This is a case involving the issue of franchisor vicarious liability, an issue of first impression in Kentucky. It arises in the context of a malicious prosecution and defamation lawsuit filed by a customer as a result of a Papa John’s pizza delivery gone wrong.

The customer originally sued the delivery driver and Papa John’s International, Inc., alleging that Papa John’s was vicariously liable as the driver’s employer. The driver’s employer, however, was RWT, Inc., a Papa John’s franchisee. Consequently, the customer filed another lawsuit against RWT; and the circuit court consolidated the cases. The circuit court granted summary judgment in favor of RWT and Papa John’s for various reasons, which we will discuss in the following sections of this opinion. The Court of Appeals, however, affirmed in part and reversed in part as to both RWT and Papa John’s, concluding that genuine issues of material fact precluded summary judgment.

As is well-settled in our case law, the driver’s employer, RWT, is subject to vicarious liability for a tort committed by its employee acting within the scope of employment. We conclude that the acts complained of here occurred within an independent course of conduct that could not have been intended by the driver to serve any purpose of the employer. So, although for different reasons that we will discuss below, we conclude that the circuit court properly granted summary judgment dismissing the malicious prosecution claim against RWT. Accordingly, we reverse the Court of Appeals as to RWT.

The circuit court and the Court of Appeals addressed the vicarious liability of Papa John’s using a mixed bag of respon-deat superior and ostensible agency principles. Upon review, we conclude that we must take a more precise approach given the ubiquity of the franchise method of doing business in Kentucky. To that end, we adopt a rule in which the franchisor is vicariously liable for the tortious conduct of the franchisee when it, in fact, has control or right of control over the daily operation of the specific aspect of the franchisee’s business that is alleged to have caused the harm. Papa John’s had no control over the pizza delivery driver’s intentional, tortious conduct in this case. So Papa John’s cannot be held vicariously liable. Although for different reasons that we will discuss below, we conclude that the circuit court properly granted summary judgment dismissing the malicious prosecution and defamation claims against Papa John’s. Accordingly, we reverse the Court of Appeals as to Papa John’s.

II. FACTS AND PROCEDURAL HISTORY IN THE CIRCUIT COURT.

Gary McCoy is a resident of Prestons-burg, Kentucky. He owns two businesses, a scrap metal recycling company and a mining equipment leasing company. On the evening of February 18, 2000, he was working late at the scrap metal business. While he was working, his wife called him about dinner and told him that she would like to have Papa John’s pizza, which they had never tried. His wife asked him to order one pizza for them for delivery to their home and another pizza for their housekeeper for delivery to her home. He ordered the pizzas from a Papa John’s store, taking some time to inquire about how the store placed the pepperoni on the pizza, and set up the two deliveries. And he asked if the delivery driver could stop off at his business for payment because his wife did not have any money with her. The store stated that it could comply with his various requests.

The delivery driver that night was Wendell Burke. Burke delivered the two pizzas and then stopped at McCoy’s business for payment. Burke and McCoy tell two stories of what occurred next, although their versions are not entirely different.

According to McCoy, after McCoy paid him, Burke remained at McCoy’s business in McCoy’s office and inquired about employment. McCoy was preoccupied with other matters, and it became obvious to him that Burke had no intention of leaving. So McCoy placed a hunting video in his VCR and told Burke to watch it. McCoy admitted that he had a beer can on his desk while Burke was in his office and a rifle in one corner of his office. The tape lasted about fifteen minutes. When the tape concluded, Burke left. After Burke left, McCoy received a call from the Papa John’s store during which they inquired as to Burke’s whereabouts.

According to Burke, when he arrived at McCoy’s business, McCoy asked him to come in, which Burke did. McCoy took Burke back to his office where he paid him for the two pizzas. McCoy asked Burke to sit and talk awhile. McCoy expressed to Burke that he had been having suicidal and homicidal thoughts and had visions. While talking to him, Burke alleges that McCoy was drinking liquor and chasing it with beer. And at one point when Burke attempted to leave, McCoy stood up, picked up a rifle, showed it to Burke, and then laid it on his desk. While Burke was there, McCoy took several phone calls. After hanging up from one of the phone calls, McCoy informed Burke that that call had been from the Papa John’s store; and they were inquiring as to Burke’s whereabouts. Eventually, the subject of deer hunting came up; and McCoy asked Burke to watch a videotape of one of his deer hunting trips with him. When the tape ended, McCoy got up to take the tape out; and Burke slipped out. He returned to Papa John’s about an hour and a half to two hours after he first left the store to deliver the pizzas.

Upon hearing Burke’s version of the story and observing that Burke was quite upset, another employee of the Papa John’s store felt that he should tell the police what had occurred and contacted them for him. Two officers responded to the call and took Burke’s statement. The officers also took statements from two female employees who had spoken by telephone with McCoy that evening to take the pizza order. One employee described McCoy on the telephone as “extremely rude” and either “disoriented or highly irritated.” The other described him as “difficult.” A few hours later, the officers obtained a warrant and arrested McCoy at his home on the charge of unlawful imprisonment in the first degree. The local newspaper ran a story about the arrest a few days later.

A little over two months after the arrest, the district court, on McCoy’s motion and with no opposition by the county attorney, dismissed the charge against McCoy. Although the record of the proceedings indicates that the county attorney agreed to the dismissal only with the stipulation of probable cause, McCoy was later successful — over two years later and in the midst of this civil lawsuit when confronted with a motion for summary judgment on the malicious prosecution claim on the ground that he could not establish that the criminal proceedings terminated in his favor — in having the final judgment set aside and an amended final judgment entered. The amended final judgment reflected that the district court dismissed the charges against Gary McCoy with prejudice and with no stipulations.

The Papa John’s store where Burke worked on the night of the McCoy delivery was a Papa John’s franchise that was owned and operated by KWT. Unaware that the store was not company-owned, McCoy filed an action on February 16, 2001, against Papa John’s and Wendell Burke in which he alleged (1) wrongful arrest, (2) malicious prosecution, and' (3) defamation. In its answer to McCoy’s complaint, Papa John’s represented that it was the franchisor of the Papa John’s store and that RWT was the owner/operator.

McCoy, in response to Papa John’s representation, filed a separate complaint against RWT on March 29, 2001, alleging (1) wrongful arrest, (2) malicious prosecution, (8) defamation, and (4) outrageous conduct. The circuit court consolidated the two civil actions.

On motions for summary judgment filed by Papa John’s, RWT, and Burke, the trial court dismissed the false arrest claims against all three defendants because there was no question that the officers arrested McCoy according to a valid warrant. As to Papa John’s and RWT’s claim that Burke was not acting within the course and scope of his employment when he gave a statement to the officers, the circuit court found as a matter of law that Burke was acting within the course and scope of his employment. Consequently for RWT, the circuit court concluded that it would be responsible under the doctrine of respon-deat superior if the jury found Burke liable. But the trial court reserved ruling on summary judgment on the specific claims of malicious prosecution, defamation, and outrageous conduct.

RWT and Papa John’s filed a joint motion to alter, amend, or vacate the circuit court’s conclusion that Burke was acting within the course and scope of his employment. In the motion, they also renewed their previous motion for summary judgment. The trial court granted summary judgment to RWT and Papa John’s on all of McCoy’s claims against these two defendants. But the trial court did not dismiss the proceedings against Burke.

The circuit court’s supporting conclusions with respect to RWT were as follows: (1) as to the defamation claim, it was barred by the one-year statute of limitations under Kentucky Revised Statutes (KRS) 413.140; (2) likewise, as to the malicious prosecution claim, it was barred by the one-year statute of limitations under KRS 413.140; and (3) as to the outrageous conduct claim, it failed because it is a mechanism for providing redress for extreme emotional distress — a so-called gap filler — when other torts do not, but had McCoy timely filed his defamation and malicious prosecution claims, they would have provided for McCoy’s emotional distress.

The circuit court’s supporting conclusions with respect to Papa John’s were as follows: (1) because Burke was not an employee of Papa John’s, Papa John’s could be vicariously liable only under a theory of ostensible agency; (2) but McCoy did not rely on any representation made by Papa John’s relating to Burke’s acts, and his acts did not advance any interest of Papa John’s; (3) so both the malicious prosecution and defamation claims failed as a matter of law.

III. THE OPINION OF THE COURT OF APPEALS.

McCoy appealed, and RWT cross-appealed on the scope of employment question. Beginning with RWT, the Court of Appeals concluded that McCoy’s malicious prosecution claim against RWT was not barred by the one-year statute of limitations since the criminal charge was not dismissed until April 10, 2000; and he filed his complaint on March 29, 2001. The defamation claim, however, was time-barred. And the Court of Appeals agreed with the circuit court that McCoy could not maintain the outrageous conduct claim (also called tort of outrage or intentional infliction of emotional distress) because Burke’s conduct amounted to the commission of traditional torts for which recovery of emotional distress was allowed. On the scope of employment cross-appeal, the Court of Appeals held that it could not be presumed that Burke intentionally lied and that a jury should decide whether he acted within the scope of his employment.

Moving to Papa John’s, the Court of Appeals concluded that there were genuine issues of material fact under an ostensible agency theory that (1) Papa John’s made representations — by allowing its trade name to be listed in the telephone directory, placed on the pizza boxes, placed on the local pizzeria, placed on the delivery person’s uniform, and placed on the delivery person’s car — that RWT and, consequently, its employees, including Burké, were its agents, and (2) that McCoy justifiably relied on that representation to his detriment. So the Court of Appeals reversed the summary judgment in favor of Papa John’s on the claims of defamation (which did not have a statute of limitations issue as to Papa John’s) and malicious prosecution.

As a result of the Court of Appeals’ opinion, the following claims remain: (1) malicious prosecution against Papa John’s, (2) defamation against Papa John’s, and (3) malicious prosecution against RWT. We granted discretionary review on motion of RWT and Papa John’s. McCoy did not file a cross-motion for discretionary review.

IV. RESOLUTION AND DISCUSSION OF THE ISSUES.

A. The Malicious Prosecution Claim Against RWT Fails as a Matter of Law Because There is No Genuine Issue of Material Fact that Burke’s Act in Making an Allegedly False Statement to the Ojfi-cers Occurred Within an Independent Course of Conduct that Could Not Have Been Intended by Burke to Serve Any Purpose of the Employer.

We begin our discussion with the malicious prosecution claim against RWT. We accept McCoy’s allegations as true for the purpose of this review. The circuit court dismissed McCoy’s claims against RWT on its motion for summary judgment. This Court will not revisit the summary judgment standard of review in this opinion because it is well-settled in our case law, other than to emphasize that summary judgment should only be used “to terminate litigation when, as a matter of law, it appears that it would be impossible for the respondent to produce evidence at the trial warranting a judgment in his favor and against the movant.”¹ “It is only proper where the movant shows that the adverse party could not prevail under any circumstances.”² We will affirm the grant of summary judgment when “the pleadings, depositions, answers to interrogatories, stipulations, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”³

McCoy sued RWT, Burke’s employer, under a vicarious liability/respon-deat superior theory. Under the doctrine of respondeat superior, RWT can be held vicariously liable for Burke’s actions if he committed the tortious acts in the scope of his employment.⁴

As the procedural history of this case illustrates, the concept of scope of employment is complex. And it is even more complex when the alleged tort in question is intentional, as is malicious prosecution, as opposed to the result of employee negligence.⁵ In the area of intentional torts, however, the focus is consistently on the purpose or motive of the employee in determining whether he or she was acting within the scope of employment.⁶

For example, our predecessor court has held that an employee bus driver did not act within his scope of employment when he stopped the employer’s bus in the middle of the street, left the bus, and assaulted another driver in a fit of road rage.⁷ In that case, the employee’s motive was to settle a personal controversy; there being no issue of fact, the case stood dismissed for failure to state a cause of action.⁸ But an employee store clerk acted within the scope of his employment when he shot and killed a person in a grocery store during what he believed was a robbery.⁹ In that case, the employee’s purpose was to protect the premises; scope of employment was not a jury question.¹⁰ And this Court has held that an automobile dealership employee acted within the scope of his employment when he sought to repossess a vehicle by intercepting a person at a stoplight, demanding that he get out of the car, and shooting the tires out on the vehicle when the person refused to get out.¹¹ In that case, the trial court was correct in allowing the jury to impute liability to the employer for the employee’s actions because he was acting at all times within the scope of his employment.¹²

In this Court’s most recent case addressing the scope of employment issue, in a unanimous opinion,¹³ we considered with approval the Tentative Draft of the Third Restatement of Agency, which rejected scope of employment formulations based on assessments of foreseeability,¹⁴ instead focusing on the employee’s purpose. Since the Patterson opinion, the American Law Institute has written the Restatement (Third) of Agency § 7.07 (2006), entitled “Employee Acting Within Scope of Employment.” It is as follows:

(1) An employer is subject to vicarious liability for a tort committed by its employee acting within the scope of employment.

(2) An employee acts within the scope of employment when performing work assigned by the employer or engaging in a course of conduct subject to the employer’s control. An employee’s act is not within the scope of employment when it occurs within an independent course of conduct not intended by the employee to serve any purpose of the employer.

(3) For purposes of this section,

(a) an employee is an agent whose principal controls or has the right to control the manner and means of the agent’s performance of work, and

(b) the fact that work is performed gratuitously does not relieve a principal of liability.

This general rule is consistent with the standard advanced by Prosser and Kee-ton — as noted in the Patterson¹⁵ opinion— in their treatise on tort law: “[I]n general, ... the master is held liable for any intentional tort committed by the servant where its purpose, however misguided, is wholly or in part to further the master’s business.” ¹⁶ Thus, if the servant “acts from purely personal motives ... which [are] in no way connected with the employer’s interests, he is considered in the ordinary case to have departed from his employment, and the master is not liable.”¹⁷ This approach “conforms to the economic theory of vicarious liability ... because when the employee acts for solely personal reasons, the employer’s ability to prevent the tort is limited.”¹⁸

Turning to the facts of this case, RWT’s business was pizza and pizza delivery. Burke was supposed to deliver the two pizzas, collect payment, and return to the store to pick up more pizzas for delivery. Making a false statement to the police about a customer is no way connected to RWT’s business. Indeed, there seems no more certain way to send customers to another pizza place than to accuse them falsely of imprisoning delivery drivers when they are delivering pizza. The motive alleged by McCoy is that Burke was trying to account for the inordinate amount of time that he loitered at McCoy’s business. Another theory of McCoy’s is that Burke’s purpose was to accuse McCoy falsely of committing a crime so that he could later sue him in a civil lawsuit and obtain a judgment against him, a man who owned two businesses. But under either theory, Burke’s actions did not serve any purpose of RWT; the motives advanced for Burke’s conduct are purely personal. His actions, as alleged, are totally independent of RWT’s purpose of pizza delivery.

If, for whatever reason, Burke did not intentionally make a false statement to the officers — either he was simply confused about what had occurred or told the truth about what had occurred — then there is no tort; and no one is liable. But if he did lie, as discussed at length above, then he was acting outside the scope of his employment; and RWT is not subject to vicarious liability for a tort committed by its employee acting outside the scope of employment. Although our analysis differs from the trial court’s, which granted summary judgment on statute of limitations grounds, we conclude, nonetheless, that there being no genuine issue of material fact, summary judgment in favor of RWT was appropriate.

McCoy argues that RWT is liable for Burke’s conduct under two different theories: (1) he was acting within the scope of his employment at the time, which theory we rejected in the preceding discussion; and (2) RWT ratified the act. However, McCoy cannot demonstrate ratification in this case. So we reject this argument, as well.

In order to have ratified Burke’s alleged malicious prosecution of McCoy, RWT had to have both (1) knowledge that Burke’s statement was false and (2) the intention to ratify it.¹⁹ But McCoy can point to no facts that support his contention that RWT had knowledge that Burke’s statement was false. The only two persons who know what happened that night between Burke and McCoy are Burke and McCoy. Burke has never renounced his allegation against McCoy. McCoy’s malicious prosecution claim against Burke will not be resolved until a jury decides the case. And for that reason, McCoy’s vicarious liability claim against RWT under a ratification theory fails as a matter of law.

McCoy contends that RWT cannot insulate itself from liability by claiming ignorance. In support, he cites the following general rule:

However, under one view, where ignorance of the facts arises from the principal’s own failure to investigate and the circumstances are such as to put a reasonable person upon inquiry, the principal may be held to have ratified despite lack of full knowledge. Thus, the general rule, that in order for ratification to bind the principal he or she must have been shown to have had full knowledge of the material facts relating to the unauthorized transaction, does not apply if the principal intentionally assumed the responsibility without inquiring, or deliberately ratified, having all the knowledge with respect to the act which he or she cared to have.²⁰

But McCoy fails to cite the rest of the rule, which continues as follows: “Even then, however, for this exception to apply, the principal must have had actual knowledge of the facts relied upon to put him or her on inquiry.”²¹ McCoy points to no evidence that RWT had actual knowledge that night that Burke was fabricating his version of the events. Even McCoy did not testify in his deposition that he told RWT when he spoke to them that night— before Burke returned to the store — that Burke had loitered on his property for over thirty minutes and watched a hunting video. The evidence discussed by McCoy in his brief regarding RWT management having knowledge of prior incidents questioning Burke’s credibility concerned information gained by law enforcement officers (and attributed by them to RWT) after the fact when Burke had already made his statement to the police officers.

B. The Malicious Prosecution and Defamation Claims Against Papa John’s Fail as a Matter of Law Because Papa John’s had No Control Over Burke’s Intentional, Tortious Conduct in this Case.

As stated in the introduction to this opinion, the issue of franchisor vicarious liability is one of first impression in Kentucky. Both the trial court and the Court of Appeals utilized ostensible agency principles to resolve the issue, the trial court ruling that there was no liability, and the Court of Appeals concluding that there were genuine issues of material fact as to the existence of an agency relationship. Having reviewed the opinions of the courts below and case law from other jurisdictions, we believe that resolution of the issue requires a rule that focuses more precisely on the franchisor/franchisee arrangement.

Before we begin our discussion of the issue, we address McCoy’s preservation argument and a premise raised by Papa John’s concerning the amended judgment in the criminal proceedings. On the issue of preservation, McCoy argues that the issue of whether a franchisor such as Papa John’s, which has no involvement in the day-to-day operations of its franchisees, may be held vicariously liable for intentional torts committed by franchisee employees is not preserved for our review. But this issue lies at the very core of McCoy’s case. McCoy sued Papa John’s under a theory of vicarious liability. And one of Papa John’s defenses, as asserted in one of its memoranda in support of summary judgment, was that it had no liability, authority, participation, or responsibility with respect to the operations of the Papa John’s stores that it did not own. Papa John’s argued that McCoy could not present any evidence that Papa John’s could be responsible under any scenario for the actions of RWT or its employees either through mandatory policies or any property interest. The issue is preserved.

Moving to a premise raised by Papa John’s concerning the amended judgment in the criminal proceedings, Papa John’s argues that the circuit court should have disregarded the amended judgment and given effect to McCoy’s initial probable cause stipulation. The stipulation would have, of course, defeated McCoy’s malicious prosecution claim as to all parties.²² The district court criminal proceedings, however, evade review. But they do not evade comment. Having reviewed the record, it is clear to us that McCoy’s counsel was not forthcoming with the district court when he made his motion for an amended judgment to remove the probable cause stipulation. In no way should this case be construed as holding that such a practice will be countenanced in our courts if challenged properly. We turn to discuss the merits of Papa John’s other, arguments.

Because a franchisor typically concentrates its control on the quality and operational requirements relating to its trade or service mark, as opposed to the day-to-day operations and management of the business, “[t]he perceived fairness of requiring a principal who closely controls the physical conduct of an agent to answer for the harm caused by the agent is diminished in this context.”²³ Taking the unique franchise arrangement into consideration, there is an emerging judicial consensus to apply a franchisor vicarious liability test that considers the franchisor’s control or right of control over the instrumentality that is alleged to have caused the harm.²⁴

The Supreme Court of Wisconsin recently considered the issue with which we are confronted in this case; in so doing, it adopted and applied the test alluded to above.²⁵ In the Kerl case, an employee at an Arby’s restaurant left work without permission. While away from work, he ambushed and shot his former girlfriend, seriously injuring her, and shot and killed her fiancé. He then turned the gun on himself. The estates of the two victims sued the franchisor of the Arby’s system and the franchisee of the Arby’s restaurant where the employee worked. The specific claim against Arby’s was vicarious liability for the franchisee’s negligent supervision of its employee. The lower court granted summary judgment in favor of Arby’s, concluding that there was no basis for vicarious liability; and the Wisconsin Court of Appeals affirmed.

On review from the court of appeals, the Wisconsin Supreme Court concluded that “the ‘control or right to control’ test for determining the presence of a master/servant agency is not easily transferable to the franchise relationship.”²⁶ After considering the fact that a franchise is a commercial arrangement between two businesses and the unique aspects of such an arrangement — franchisee authorized to use the franchisor’s intellectual property and brand identity, marketing experience, and operational methods in exchange for a fee paid to the franchisor²⁷ — the Kerl court settled on an adaptation of the control or right to control test²⁸

In adapting the traditional test to suit the franchise business model, the court rejected the argument that standardized provisions commonly included in franchise agreements, which specify a right of inspection and such aspects as marketing, operational requirements, and uniform quality, “establish a franchisor’s control or right to control the daily operations of the franchisee sufficient to give rise to vicarious liability for all purposes or as a general matter.”²⁹ In rejecting that argument, the court held “that a franchisor may be held vicariously liable for the tortious conduct of its franchisee only if the franchisor has control or a right of control over the daily operation of the specific aspect of the franchisee’s business that is alleged to have caused the harm.”³⁰

Applying the rule, the court considered the claims against the franchisor — negligent supervision, hiring, and retention claims — and concluded that although the license agreement between Arby’s and its franchisee imposed many quality and operational standards on the franchisee, the franchisor did not have the control or the right to control the franchisee’s supervision of its employees.³¹ Accordingly, it affirmed the grant of summary judgment in favor of the franchisor.

We adopt the rule established in the Kerl case for evaluating a franchisor’s vicarious liability for the tortious conduct of its franchisee because we believe that it is well-reasoned and that it will lead to consistent results in our courts. Having reviewed the various turns that this case has taken regarding Papa John’s, it is clear to us that the traditional rules pertaining to scope of employment and ostensible agency are inapposite to the issue of a franchisor’s vicarious liability.

Guided by the rule, we turn to the evidence applicable to the franchisor’s control over the daily operation of the specific aspect of the franchisee’s business that is alleged to have caused the harm, which, in this case, can only be characterized as the allegedly intentional, tortious conduct of RWT’s employee, Burke. Since we have concluded above that Burke’s act in making an allegedly false statement to the officers occurred within an independent course of conduct that could not have been intended by Burke to serve any purpose of the employer, there can be only one conclusion as to the vicarious liability of Papa John’s: there is none. Here, Papa John’s, the franchisor, had no control over the franchisee’s employee’s isolated and allegedly intentional, tortious conduct.

In concluding as we do, we do not intend to diminish the importance of this case to all parties, especially McCoy. However, the intentional nature of the claims dictates our analysis.

V. CONCLUSION.

Under the doctrine of respondeat superior, an employer can be held vicariously liable for an employee’s tortious actions if committed in the scope of his or her employment. In the area of intentional torts, the focus is consistently on the purpose or motive of the employee in determining whether he or she was acting within the scope of employment. Here, we conclude that the acts complained of occurred within an independent course of conduct that could not have been intended by the employee to serve any purpose of the employer. A franchisor is vicariously liable for the tortious conduct of the franchisee when it, in fact, has control or right of control over the daily operation of the specific aspect of the franchisee’s business that is alleged to have caused the harm. We conclude that Papa John’s had no control over the employee’s intentional, tortious conduct in this case. So Papa John’s cannot be held vicariously liable. We reverse the opinion of the Court of Appeals and reinstate the judgment of the trial court for RWT and Papa John’s on all claims.

All sitting. ABRAMSON, CUNNINGHAM, NOBLE, and SCHRODER, JJ., concur. SCOTT, J., concurs in part and dissents in part by separate opinion. LAMBERT, C.J., dissents by separate opinion and joins SCOTT, J., as to dissent regarding RWT’s liability.

1 . Roberson v. Lampton, 516 S.W.2d 838, 840 (Ky.App.1974) (quoted in Paintsville Hosp. Co. v. Rose, 683 S.W.2d 255, 256 (Ky.1985)).

2 . Paintsville Hosp. Co., 683 S.W.2d at 256 (affirmed as proper standard of review in Kentucky courts in Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 483 (Ky.1991)).

3 . Kentucky Rules of Civil Procedure (CR) Rule 56.03.

4 . Patterson v. Blair, 172 S.W.3d 361, 364 (Ky.2005) (undertaking historical review of rationale for respondeat superior liability, considering economic structure and analysis); Osborne v. Payne, 31 S.W.3d 911, 915 (Ky.2000).

5 . Patterson, 172 S.W.3d at 366.

6 . Id. at 369 (reviewing and synthesizing Wood v. Southeastern Greyhound Lines, 302 Ky. 110, 194 S.W.2d 81, 82 (1946); Frederick v. Collins, 378 S.W.2d 617, 619 (Ky.1964); and Osborne, 31 S.W.3d at 915).

7 . Wood, 194 S.W.2d at 83.

8 . Id. at 83-84.

9 . Frederick, 378 S.W.2d at 620.

10 . Id.

11 . Patterson, 172 S.W.3d at 363.

12 . Id.

13 . Id. at 372 (Graves, J., not sitting).

14 . Id. at 369.

15 . Id.

16 . W. Page Keeton, et al., Prosser and Keeton on the Law of Torts 505 (5th ed. 1984).

17 . Id. at 506.

18 . Patterson, 172 S.W.3d at 369 (citing William M. Landes & Richard A. Posner, The Economic Structure of Tort Law, 208-09 (1987)).

19 . Edwards v. Kentucky Utilities Co., 289 Ky. 375, 158 S.W.2d 935, 936 (1942).

20 . 3 Am Jur.2d Agency § 185 (2007).

21 .Id.; see also Restatement (Third) Of Agency § 4.06 (2006) ("A person is not bound by a ratification made without knowledge of material facts involved in the original act when the person was unaware of such lack of knowledge.”).

22 . See Broaddus v. Campbell, 911 S.W.2d 281, 283-84 (Ky.App.1995) (holding that defendant’s admission in open court that there was probable cause for issuance of an indictment against him barred him from later bringing malicious prosecution action against his accuser).

23 . Kerl v. Dennis Rasmussen, Inc., 273 Wis.2d 106, 682 N.W.2d 328, 338 (2004) (formulating a test to determine franchisor vicarious liability, which considers a franchisor’s control or right of control over the daily operation of the specific aspect of the franchisee’s business that is alleged to have caused the harm).

24 .See id. at 338-39 (discussing at length traditional master/servant test for vicarious liability and concluding that the principles and objectives are insufficient in the franchisor/franchisee context and identifying a clear trend in the case law in other jurisdictions); Pizza K, Inc. v. Santagata, 249 Ga.App. 36, 547 S.E:2d 405, 406-07 (2001) (held summary judgment in favor of franchisor proper in case involving negligence of franchisee’s delivery driver when evidence demonstrated that franchisor did not have sufficient authority to control the time, manner, and method of executing the franchisee’s work).

25 . Kerl, 682 N.W.2d at 340.

26 . Id. at 337.

27 . Id.

28 . Id. at 340.

29 . Mat 341.

30 . Id.

31 . Id. at 342.