Indiana Supreme Court Rules in Favor of Phi Kappa Psi

Sean Callan, Manley Burke, sean.callan@manleyburke.com

In a closely watched case, the Indiana Supreme Court affirmed summary judgment in favor of Wabash College and Phi Kappa Psi, dismissing all claims against these two defendants.¹  Brian Yost, a Wabash freshman and Phi Kappa Psi pledge, alleged that he was injured in September 2007 during a hazing incident inside the chapter house.  Mr. Yost sued several parties, including the national Phi Kappa Psi fraternity.  The claims against the national fraternity rested upon three theories of liability, namely (i) breach of a general duty of due care, (ii) breach of an assumed duty of care to protect its pledges and (iii) an agency theory by which the national fraternity could be held vicariously liable for the negligence of the chapter.  Phi Kappa Psi moved for summary judgment.

PROCEDURAL POSTURE

Yost resisted summary judgment asserting that because the national fraternity promulgated behavioral guidelines, engaged in educational outreach regarding alcohol abuse and hazing, and made efforts to discourage hazing, the national fraternity could be liable for Yost’s alleged injuries.  Specifically, Yost argued that Phi Kappa Psi’s conduct standards and educational programs, together with the power of the national fraternity to suspend chapters, revoke chapters, and discipline individuals, formed the foundation of a finding that the national fraternity engaged in oversight of day-to-day operations of the chapter.  Accordingly, Yost argued, these facts supported a finding that Phi Kappa Psi (a) had a general duty of care to him, (b) assumed a duty of care to him or (iii) was vicariously liable for the acts of its agent, the chapter. The trial court granted Phi Kappa Psi’s motion for summary judgment, a decision upheld by the court of appeals.

The Indiana Supreme Court accepted transfer of the case.  On February 13, 2014, that court unanimously affirmed summary judgment in favor of Phi Kappa Psi.² In affirming summary judgment, the Indiana Supreme Court followed a long line of Indiana cases refusing to hold national fraternities liable in similar circumstances.  Specifically, the court confirmed that simply establishing accepted standards of conduct, educating members, and disciplining members and chapters that fall short of expectations does not create a duty of care on the part of a national fraternity.  It is a decision resting on good commonsense; to hold otherwise would render the national fraternity a guarantor of its members’ compliance with these aspiration goals.

COURT’S ANALYSIS

In examining the question of the existence of a general duty of care, the Court looked at (i) the relationship between the national fraternity and Mr. Yost and (ii) public policy concerns.  With respect to the relationship question, the Court noted that the national fraternity lacked any direct oversight or control over individual members, had no employees present at the chapter and no day-to-day management control over chapter operations.  The Court determined that “[d]espite the national fraternity’s efforts to establish aspirational objectives and to promote their fulfillment, the relationship between the national fraternity and the individual student members was remote and tenuous”.  (p.12)

The Court also found that public policy considerations militate against holding Phi Kappa Psi liable in this circumstance.  The Court explicitly noted that “the national organization . . . should be encouraged, not disincentivized, to undertake programs to promote safe and positive behavior and to discourage hazing and other personally and socially undesirable conduct”.  (p.13)  Again, the Court showed a great deal of common sense in analyzing the law and facts of the case, ultimately finding that given the tenuous relationship between the plaintiff and Phi Kappa Psi, and the public policy consideration of encouraging national organizations to abandon educational outreach programs, the Court found no general duty of care.

The Court used a similar analysis in considering the assumption of duty claim.  The Court began its analysis by noting that while an actor may be liable for negligence in the performance of certain services actually undertaken, such liability does not extend beyond the undertaking.  Here, the Court determined that the only undertaking by the national fraternity was educational outreach to enhance proper behavior and to discourage hazing.  The undertaking did not extend to actual oversight and control over the behavior of individual members.  As Mr. Yost did not claim that Phi Kappa Psi was negligent in the formulation and dissemination of its educational materials, the specific services arguably undertaken by the national fraternity, there was no possible claim for breaching an assumed duty of care.

Finally, the Court disposed of the agency claim quickly as well.  Again, the Court noted that there was no evidence that the national fraternity had control over the individual members, or that the chapter acted as the agent of the national fraternity with respect to the day-to-day operations of the chapter.  Accordingly, there could be no agency or vicarious liability.

GUIDANCE FOR GREEK LETTER ORGANIZATIONS

The Yost case is unsurprising on the surface as it is consistent with a long line of Indiana precedent.  However, the decision is important in light of another pending Indiana case, Smith v. Delta Tau Delta, et al.  In Smith, a different panel of the court of appeals broke from Indiana precedent, denying summary judgment to Delta Tau Delta on very similar facts.  The Smith panel held that educational programming and a hierarchical enforcement mechanism could create liability under assumption of duty and agency liability theories.  Delta Tau Delta sought transfer of the Smith case to the Indiana Supreme Court, though the Court has not yet decided to accept the case. We will carefully monitor the proceedings in Smith as the outcome could significantly impact current risk management thinking for national Greek organizations.

Given the pronouncement of the Yost court, it appears that standards of conduct, educational outreach and a disciplinary enforcement scheme neither establish a duty of care nor provide evidence sufficient to support a claim of vicarious liability.  However, Greek letter organizations should closely examine their outreach programs and materials.  Specifically, care should be given to the timing and methodology of delivering this programming.  The Yost case does appear to leave the door open to claims that the national fraternity is negligent in the preparation or dissemination of its educational materials.  It is very likely that this kind of claim will begin to appear in the next generation complaint, at least in Indiana.  All Greek letter organizations would be well served to closely examine the methodology of delivery of risk management training to its members.

1  Click here for a link to the opinion: http://www.in.gov/judiciary/opinions/pdf/02131401bd.pdf.

2  Justice Rucker filed a dissenting opinion as to summary judgment in favor of Wabash, but the decision in favor of Phi Kappa Psi was unanimous.