                   IN THE SUPREME COURT OF TENNESSEE
                              AT NASHVILLE
                                   October 2, 2002 Session

JOHN HOUGHTON, ET AL. V. ARAMARK EDUCATIONAL RESOURCES,
                            INC.

                              Rule 23 Certified Question of Law
               United States District Court for the Middle District of Tennessee

                             Hon. Thomas Wiseman, Senior Judge
                           __________________________________________


                  No. M2002-00289-SC-R23-CQ - Filed November 22, 2002
                           ______________________________


Pursuant to Tennessee Supreme Court Rule 23, we accepted certification of a question of law from
the United States District Court for the Middle District of Tennessee concerning regulations issued
by the Tennessee Department of Human Services. The certified question from the district court asks
us to determine whether the rationale of statutorily imposed vicarious liability under Gleaves v.
Checker Cab Transit Corp., 15 S.W.3d 799 (Tenn. 2000), applies to rules governing licensing and
operation of day care centers in Tennessee. For the reasons given herein, we answer that our holding
in Gleaves is distinguishable from the present case, and the Tennessee regulations governing day
care centers do not, absent fault on the part of the licensee, provide for vicarious liability for the
injurious acts of an employee occurring outside the scope of employment.

                      Tennessee Sup. Ct. R. 23 Certified Question of Law


WILLIAM M. BARKER, J., delivered the opinion of the court, the panel of which consisted of FRANK
F. DROWOTA , III, C.J., E. RILEY ANDERSON, ADOLPHO A. BIRCH, JR., and JANICE M. HOLDER, JJ.

F. Dulin Kelly and Andy L. Allman, Hendersonville, Tennessee, for the petitioners, John Houghton,
et al.

Carol P. Michel, Helen M. Donnelly, Atlanta, Georgia, and Rebecca Wells Demaree, Nashville,
Tennessee, for the respondent, Aramark Educational Resources, Inc.


                                             OPINION
                                  FACTUAL BACKGROUND

        The petitioners, John Houghton and his wife Melissa Houghton, brought this suit
individually, and as guardians and next friends of their minor daughter, referred to as “Jane Doe.”
The respondent, Aramark Education Resources, Inc. (Aramark), owns and operates numerous day
care facilities throughout the United States. Aramark does business within Tennessee as “Children’s
World Learning Center, Inc.”

       In the summer of 1999, the Houghtons enrolled their infant daughter in the Children’s World
Learning Center located in the Donelson area of Nashville, Tennessee. In January of 1999, Aramark
hired Daniel Towery to work at its Donelson location. Mr. Towery assisted or supervised children
during activities and counseled children when social, academic, or other behavioral problems were
encountered. Additionally, Mr. Towery assisted in toilet training and diapering the children,
including Jane Doe. Aramark terminated the employment of Mr. Towery in July of 1999.

        The Houghtons allege that between January of 1999 and July of 1999, Mr. Towery committed
vile and lewd sexual acts against Jane Doe. In March of 2000, Mr. Towery pleaded guilty to two
counts of child rape and three counts of aggravated sexual battery. These offenses originated from
Mr. Towery’s unlawful sexual contact with six children enrolled at Aramark’s Donelson facility.
Mr. Towery confessed to abusing certain children at the Donelson facility, but denied ever molesting
or otherwise abusing Jane Doe.

       Shortly after Mr. Towery’s arrest, the Houghtons filed suit against Aramark on behalf of Jane
Doe in the Circuit Court of Davidson County, Tennessee. The suit was voluntarily non-suited, and
a subsequent suit was filed in federal district court. The Houghtons asserted a cause of action based
upon the theories of respondeat superior, negligent hiring and supervision, and statutory liability
under applicable regulations and statutes. In response to Aramark’s motion for partial summary
judgment, the district court issued a certification order to this Court. The certified question asks
whether the rationale of statutorily imposed vicarious liability under our holding in Gleaves v.
Checker Cab Transit Corp., 15 S.W.3d 799 (Tenn. 2000), applies to the rules governing licensing
and operations of day care centers in Tennessee.

                                           ANALYSIS

        We begin our analysis by acknowledging that “the most basic principle of statutory
construction is to ascertain and give effect to the legislative intent without unduly restricting or
expanding a statute’s coverage beyond its intended scope.” Owens v. State, 908 S.W.2d 923, 926
(Tenn. 1995); State v. Sliger, 846 S.W.2d 262, 263 (Tenn. 1993). Additionally, “statutes in
derogation of the common law are to be strictly construed and confined to their express terms.”
Ezell v. Cockrell, 902 S.W.2d 394, 399 (Tenn. 1995)(citing Cardwell v. Bechtol, 724 S.W.2d 739,
744 (Tenn. 1987)). Strict construction amounts to a “recognition of a presumption against the
legislature’s intention to change existing law.” Jordan v. Three Rivers Baptist Church, 984 S.W.2d
593, 599 (Tenn. 1999). Thus, common law is not displaced by a legislative enactment, except to the


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extent required by the statute itself. See Lavin v. Jordon, 16 S.W.3d 362, 368 (Tenn. 2000). We
note that this Court has applied these general rules of statutory construction to rules and regulations
drafted by administrative agencies, pursuant to a legislative delegation of power. See Consumer
Advocate Div. v. Greer, 967 S.W.2d 759, 762 (Tenn. 1998). However, when language within a
statute is ambiguous, and the parties legitimately derive different interpretations from identical
language, we must look to the entire statutory framework to determine legislative intent. See Jordan,
984 S.W.2d at 599 (citing Owens, 908 S.W.2d at 926).

         We are asked by the district court1 to construe regulations governing the licensure and
administration of day care facilities, in light of our decision in Gleaves, namely, Rules 1240-4-3-.01,
et seq., of the Tennessee Department of Human Services Social Services Division (DHS). These
rules were enacted by the DHS pursuant to Tennessee Code Annotated sections 71-3-501, et seq.,
which vests the DHS with authority to license and regulate child care agencies. The regulatory
language in Rule 1240-4-3-.02 cited in the federal district court’s certification order provides the
following definitions:
                 (4)     Central Operator -- The individual(s) . . . who . . . owns,
                 administers, or operates a child care system. The central operators
                 shall have ultimate responsibility for the administration/operation of
                 any or all child care homes and child care centers in the system . . . .

             (20) Licensee -- The person . . . or entity to whom a license to
             operate a child care center is issued and who shall assume ultimate
             responsibility for the child care center.
(Emphasis added).

        The petitioners contend that these and other DHS regulations2 require us to find Aramark
vicariously liable for the criminal acts of Mr. Towery. Specifically, petitioners argue that under the
rationale expressed in Gleaves, Aramark is vicariously liable for Mr. Towery’s acts because DHS

         1
           This Court, at its discretion, may “answer questions of law certified to it by the Supreme Court of the United
States, a Court of Appeals of the United States, a District Court of the United States in Tennessee, or a United States
Bankrup tcy Co urt in Tennessee.” Swafford v. Harris, 967 S.W .2d 319, 320 n.1 (Tenn. 199 8)(q uoting Tenn. Sup. Ct.
R. 23, § 1). The rules governing certification are properly invoked when “the certifying court determines that, in a
proceeding before it, there are questions of law of this state which will be determinative o f the cause and as to which it
appears to the ce rtifying court there is no contro lling precedent in the d ecision s of the Supreme C ourt of Ten nessee .”
Id.
         2
           Other relevant provisions include: (1) Rule 1240-4-30.01(2), which provides that the purpose of licensing is
for the “protection o f children. These minimum requirements seek to maintain adequate health, safety, and supervision
of children while in child care;” (2) Rule 1240-4-3-.07(1)(a), which states that “[t]he board, owner, applicant/licensee,
or other designated agent of the child care center shall be responsible for selecting individuals of suitable charac ter to
work with children;” (3) Rule 1240-4-3-.07(1)(b), which provides that “[t]he director, with the guidance of the board
or owner of the center, shall be responsible for staff and program and the day-to -day operation of the center;” and (4)
Rule 124 0-4-3 -.10(5 )(a), which req uires em ployees to undergo specialized training to prevent and repo rt incidents of
child abuse. Specifically, it states that "[s]uspected child abuse or neglect shall be reported immediately to the local
Department of Children’s Services office by the staff of the child welfare agency."



                                                             3
mandates that day care center licensees assume “ultimate responsibility” for their facility.
Respondent argues that this language is purely definitional in nature and that petitioners’ reliance
upon our decision in Gleaves is misplaced because no substantive similarity between the applicable
ordinances in Gleaves and the instant case is discernable.

         In order to fully explain and contrast the DHS regulations with those at issue in Gleaves, a
brief review of that decision is warranted. The primary issue in Gleaves was whether the Code of
the Metropolitan Government of Nashville and Davidson County (Metro. Code) imposed liability
upon Checker Cab Transit Corporation, Inc. (Checker) for injuries to a third party caused by the
negligence of one of Checker’s contract drivers who was off duty at the time of the incident.3 See
Gleaves, 15 S.W.3d at 800-01. The municipal ordinance at issue in Gleaves required Checker to file
liability insurance agreements for each automobile in its franchise. These agreements provided that
Checker would be “liable for any personal injuries or property damage to third parties as the result
of the negligent use of these vehicles.” Id. at 800 n.2. In addition, the ordinance provided that these
agreements “shall place the vehicle operated under [the] franchise in [Checker’s] complete
possession and control, and the taxicab company shall assume complete liability” for each vehicle
in its fleet. Id. at 800 n.1 (emphasis added). We found this language to be “plain, clear, and
unambiguous. It require[d] that all certified taxicab companies ‘assume complete liability’ for each
vehicle for which it enters into a liability insurance agreement.”4 Id. at 803. Importantly, vicarious
liability on the part of Checker was not based upon the theory of respondeat superior. Our decision
in Gleaves rested solely upon the unambiguous language contained within the municipal ordinance
and insurance agreement.

        The federal district court in this case has held that the criminal acts of Mr. Towery occurred
outside the scope of his employment, thus eliminating the petitioners’ contention that Aramark may
be held liable under the theory of respondeat superior. Therefore, if Aramark were to be held liable
for the acts of Mr. Towery based solely upon the language contained within the DHS regulations,
such a holding would be in contravention of Tennessee common law. Accordingly, we find that the
DHS regulations must be construed in light of the aforementioned principles of statutory
construction, principally that statutes in derogation of the common law be strictly construed.


         3
         W e described the inc ident as follows:
                 the record shows that Robert J. Mosley (a driver for Checker) began work at 5:30
                 a.m. and repo rted “o ff-duty” by radio at app roxim ately 9:2 0 p.m . Shortly after
                 reporting “off-duty,” and while en route home, Mosley’s high speed attracted the
                 attention of City of Lakewood police officers. A high speed chase ensued. The
                 chase ended at about 10:05 p.m. when Mosley collided with a vehicle operated by
                 Michael C. Gleaves. Gleaves sustained serious injuries.
15 S.W.3d at 801.

         4
           W e determined that “[t]he ordinance did not distinguish between cases when a driver is ‘on-duty,’ and ac tively
transporting o r seeking passengers or ‘off-duty.’ To have read the ordinance as distinguishing between ‘on-duty’ and
‘off-duty’ would have improperly diluted the meaning of the language, and unduly restricted the ordinance’s intended
scope.” 15 S.W.3d at 803.

                                                            4
         After conducting a thorough review of relevant DHS regulations, we find no intent on the
part of DHS to alter, amend, or otherwise contravene the common law relating to vicarious liability.
Indeed, based upon our interpretation of the DHS regulations in light of the doctrine of strict
construction, we find our decision in Gleaves clearly distinguishable. The language at issue in
Gleaves was contained within the directive portion of the code. It unambiguously addressed issues
of liability, personal injuries, property damage to third parties, and causation occurring through the
negligence of Checker or its employees. Hence, we concluded that the Metropolitan Government
of Nashville expressed its intent, in the unambiguous language of the ordinance, to impose liability
on the principal for the acts of its agent without regard to common law. In stark contrast, the
relevant DHS provisions are devoid of similar unambiguous language. While the term “ultimate
responsibility” can logically be construed as being synonymous with liability, we find this term
ambiguous and subject to conflicting interpretations. Accordingly, we do not construe the contested
language alone or disassociated from its framework, but examine the appropriate context and
traditional usage of terms by the legislature. The term “ultimate responsibility” is found under the
heading of “Definitions” and refers explicitly to administration and operations of child care facilities.
The term is surrounded by repeated references to licensing, administration, and operational
guidelines. If DHS had intended to contravene common law by imposing strict vicarious liability
on child care facilities, such a mandate would extend from the directives of the legislation and not
from the definitional portion. Also, the respondent correctly notes that the term “ultimate
responsibility” is routinely used in numerous definitional provisions governing businesses in
Tennessee, without providing for direct or vicarious liability.5 In the absence of direct language to
the contrary, we find that the deliberate use of the term “ultimate responsibility” cannot reasonably
be construed as being legally synonymous with unlimited vicarious liability.

                                                     CONCLUSION

      We conclude that applicable DHS regulations do not, in the absence of fault on the part of a
licensee, provide a basis for vicarious liability for the criminal acts of an employee that occur outside
the scope of employment. To hold otherwise would contravene Tennessee common law and
established rules of statutory construction. Accordingly, we answer the district court’s certified
question in the negative and reiterate that statutorily imposed vicarious liability under Gleaves does
not extend to the DHS rules regarding the licensing of day care centers in Tennessee.



         5
            For exam ple, the term “ultimate responsibility” is found in the regulations governing: nursing home
administrators (Te nn. Co mp. R . & Regs. R. 120 0-1-.16(1)); solid waste storage, processing, and disposal facilities
(Tenn. Comp. R . & Regs. R. 120 0-1-7 -.02(5 )(a)(2 )(i)); hazardo us waste treatme nt, storage, and dispo sal facilities, (Tenn.
Comp. R. & Regs. R.120 0-1-11-.07(9)(b)(2)(i)); hospitals, nursing homes, and assisted living centers (Tenn. Comp. R.
& Regs. R.1200-8-1-.02(3)(a)); home health care organizations (Tenn. Comp. R. & Regs. R. 1200 -8-8-.02(5)(e)(1)); and
birthing centers (Tenn. Comp. R. & R egs. R. 1200-8-24-.02(3)(a)). The regulations governing these businesses are
similar in content to those governing day care facilities and likewise fail to mention liability or injuries to third parties.
Thus, if the term “ultimate responsibility” were synonym ous with vicario us liability, the pre ceding organizations wo uld
be liable for the criminal and/o r intention al acts of their employees. W e cannot co nclude that such a result was intended
by the governmental bo dies who drafted these rules.

                                                               5
    ________________________________
    WILLIAM M. BARKER, JUSTICE




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