Smith v. Delta Tau Delta; Rules and Enforcement May Create Claims under Assumption of Duty and Agency Theories of Liability

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

In the fall of 2008, Johnny Smith was a freshman at Wabash College in Crawfordsville, Indiana.

Mr. Smith pledged the Beta Psi Chapter of Delta Tau Delta and began living in the Beta Psi Chapter House. During the Wabash Homecoming weekend of 2008, Mr. Smith con­sumed beer and hard alcohol, eventually passing out. Some­time between 11 :30 pm on October 4, 2008, and 8:45 am on October 5, 2008,

Mr. Smith died, apparently from alcohol poisoning. Mr. Smith’s parents filed suit against several parties including Delta Tau Delta, Wabash College, the Beta Psi Chapter, and the Beta Psi risk management officer. The complaint asserted three claims against Delta Tau Delta. Counts I and II asserted that Delta Tau Delta was liable for violations of the Indiana hazing and dram shop statutes. Specifically, the plaintiffs asserted liability on the part of Delta Tau Delta by way of an agency relationship with the Beta Psi Chapter. Count III asserted a claim for negligence on the theory that Delta Tau Delta assumed a duty to protect freshman pledges from harm caused by hazing and excessive alcohol consumption. After discovery, Delta Tau Delta moved for summary judgment on all claims. The trial court granted Delta Tau Delta’s motion in all respects.

The Indiana Court of Appeals reversed (Smith v. Delta Tau Delta, _ N.E.2d_ (No. 54A01-1204-CT-169) (Ind. Ct. App. May 8, 2013). The Court of Appeals deter­mined that the grant of summary judgment was in error, find­ing that the record contained material issues of fact as to (i) whether Delta Tau Delta assumed a duty to protect Mr. Smith, and (ii) whether an agency relationship existed be­tween the Beta Psi Chapter and the national fraternity.

As these analyses are largely interrelated, the Court relied on the same facts in reversing summary judgment on both theories. Essentially, the Smith Court focused on the following facts: (i) Delta Tau Delta promulgated rules and enforcement procedures focused on hazing and alcohol abuse, (ii) Delta Tau Delta increasingly focused on regulat­ing hazing and alcohol consumption over time and increased its involvement with the chapters through chapter consultants and chapter advisers, (iii) Delta Tau Delta promulgated spe­cific and detailed guidelines dedicated to hazing and alcohol, (iv) Delta Tau Delta created a hierarchical enforcement pro­gram for violations of these guidelines and, (v) Delta Tau Delta created a verification program to ensure implementa­tion of its risk management procedures. Based upon these facts, this Court found that there remained material facts in dispute as to whether Delta Tau Delta assumed a duty of care as to Mr. Smith or had an agency relationship with the Beta Psi Chapter.

This result is surprising. Courts in Indiana have been historically reluctant to find either an assumption of duty or an agency relationship in cases against national fra­ternities. For instance, in Delta Tau Delta v. Johnson, 712 N.E.2d 968 (1999), the Indiana Supreme Court found that a fraternity did not assume a duty to protect against sexual assault merely by sending written materials to the local chapter highlighting the fraternity’s efforts to lead the fight against date rape and alcohol abuse. Similarly, in Foster v. Purdue University, the Beta Mu of Beta Theta Pi, 567 N.E.2d 865 (Ind. Ct. App. 1991), the Indiana Court of Appeals affirmed summary judgment in favor of a national fraternity in a case where a pledge seriously injured himself while inebriated, specifically finding that the national fraternity had not as­sumed a duty to its pledges. Finally, a different panel of the Indiana Court of Ap­peals recently decided Yost v. Wabash, 976 N.E.2d 724 (2012). In Yost, the Court of Appeals upheld summary judg­ment in favor of Phi Kappa Psi on facts very similar to the facts before the Smith Court. Refusing to find that Phi Kappa Psi either assumed a duty to its pledges or had any agency relationship with the chapter, the Yost Court noted “we rec­ognize the untenable situation that can be created when colleg­es and fraternities attempt to deal with potentially dangerous activities by promulgating rules, only to have the enactment and enforcement of those rules thrown back at them as an as­sumption of duty.” (Yost, p.36). Indeed.

The impact of the Smith case is yet to be understood. As it stands today, it appears to be an outlier. As set forth above, the Smith Court seemingly ignored relevant Indiana Supreme Court precedent as well as recent precedent from panels of the Court of Appeals. In fact, the Yost case is not even mentioned in the Smith opinion despite its factual and legal similarities.

Instead of relying upon Indiana precedent, the Smith Court relied on a 1999 Louisiana case as support for its find­ing as to assumption of a duty, and a 1986 South Carolina case to support its finding on agency. The Yost case is currently pending before the Indiana Supreme Court. Perhaps the state’s high court will resolve an apparent split among the In­diana Court of Appeals panels.

We will carefully monitor the proceedings in Yost and Smith as the outcome could significantly impact current risk management thinking for national Greek organizations. Specifically, if rules and regulations prohibiting hazing and excessive alcohol consumption become the touchstone of lia­bility under an assumption of duty or agency theory, perhaps the very existence of such rules and regulations needs to be examined. Indeed, the Smith case, itself, demonstrates the untenable situation identified by the Yost Court; does it really make sense to allow the enactment and enforcement of rules against hazing and alcohol abuse to become the basis for an assumption of duty or agency theory of liability? We shall see, but the author, for one, hopes not.