Was Louisiana responsible for an employee's work as treasurer of a professional association?

Plain-English summary

Louisiana's Commissioner of Administration asked whether the state had a fiduciary responsibility for professional or service organizations whose members were mostly government employees. Some state employees served as organization treasurers, agencies paid dues or conference costs, and a treasurer might work on organization business during state hours or receive bank statements at an agency address. In Opinion 03-0196, the AG said it found no fiduciary relationship between the state and these organizations.

The opinion separately considered whether the state might be liable for harm caused by an employee's acts. It said that question could not be answered in the abstract: liability depended on whether the employee acted within the course and scope of state employment under the facts of a particular case. On a final question, the AG concluded that the organizations themselves were not subject to Civil Service Rule 14 and suggested consulting the State Department of Civil Service. It did not give the same blanket conclusion about every individual member.

Currency note

The issue date is not legible in the available official extract. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant at issuance

State agencies

The AG found no statutory or case-law basis for a fiduciary relationship between the state and the organizations described. It distinguished that conclusion from possible vicarious liability for a state employee's conduct, which required a fact-specific course-and-scope inquiry.

Association officers and members

The opinion did not say an employee treasurer had no duties to the association. Its conclusion concerned whether the state owed the association a fiduciary duty. The AG also said the organizations were outside Civil Service Rule 14, while recommending an opinion from the state civil service department on that issue.

Common questions

Q: Did a state employee serving as association treasurer make the state a fiduciary of the association? A: The AG said it found no fiduciary relationship between the state and the described organizations, including the circumstances raised in the request.

Q: Was the state automatically free from liability for that employee's conduct? A: The opinion did not decide that. It said employer liability depended on whether particular conduct was within the course and scope of state employment.

Q: Did association work during state hours settle the liability question? A: No. The AG described time and place as factors, but said each case required analysis of the employee's duties and the conduct's connection to them.

Q: Were the associations subject to Civil Service Rule 14? A: The AG concluded the organizations were not, and suggested asking the State Department of Civil Service for its view.

Background and statutory framework

The request named organizations such as the Personnel Advisory Council and the Association of Government Accountants. The opinion discussed fiduciary relationships under cited cases and employer liability under La. C.C. art. 2320. It used LeBrane v. Lewis, 292 So.2d 216 (La. 1974), for factors in the course-and-scope analysis. Its final section referred to Article X of the Louisiana Constitution and Civil Service Rule 14.

Citations and references

Civil Code article cited: La. C.C. art. 2320. Case cited: LeBrane v. Lewis, 292 So.2d 216 (La. 1974).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/03-0196

Original opinion text

~t~t~ o~ ~mi~i~
One American Place
301 Main Street, Suite 600
DEPARTMENT OF JUSTICE
P.O. Box 94005
CIVIL DIVISION
TEL.: (225) 342-7013
BATON ROUGE
FAX: (225) 342-2090

RICHARD P. IEYOUB
70804-9005
ATTORNEY GENERAL

AUG :g 5 2003
OPINION NUMBER 03-0196

9 CIVIL SERVICE
77-A STATE OFFICERS
La. Const. Art. X, §I
Mr. Mark C. Drennen
Commissioner of Administration
I State does not have a fiduciary responsibility for the funds and/or activities of service organizations whose P. O. Box 94095 memberships generally consist of mostly state or local Baton Rouge, LA 70804
~ government employees.
Dear Mr. Drennen:

You requested the opinion of this office concerning whether the State or a state agency has a fiduciary responsibility for the funds and/or activities of service and/or professional service organizations whose memberships generally consists of mostly state or local government employees. Examples of this type entity include the Personnel Advisory Council, the Association of Government Accountants, Government Finance Officers Association Computer Information Services Directors, etc. (hereinafter referred to as the "Organization"). As you noted, often the officers and, in particular the treasurer of the Organization, is a state employee. Additionally, many state agencies pay the dues for the State employees to be members and/or pay for State employees to attend conferences sponsored by the Organization. Your first two questions are:

If a full time state employee serves as treasurer of an organization meeting the criteria mentioned above, and if the treasurer does not do work for the organization during state working hours, does the state agency or the state have a fiduciary responsibility for the funds and/or the activities of the organization?

If a full time state employee serves as treasurer of an organization meeting the criteria mentioned above, and if the treasurer does work for the organization during state working hours and the bank statements go to the employee at the agency address, does the state have a fiduciary responsibility for the funds andlor the activities of the organization?

The elements of a cause of action for a breach of fiduciary duty, or a knowing participation in such, are (1) a breach by a fiduciary of an obligation to another; (2) a knowing collusion or participation in the breach by the fiduciary; and (3) damages suffered by another as a result of the breach. Oliver v. Central Bank, 26,932 (La.App. 2 Cir. 5/10/95), 658 So.2d

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Commissioner Mark C. Drennen
OPINION NUMBER 03-0196
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1316; Brockman v. Salt Lake Farm Partnership, 33,938 (La.App. 2 Cir. 10/4/00), 768 So.2d 836.

We have been unable to find any statute or jurisprudence which creates a fiduciary relationship between the State and the Organization. In Plaquernines Parish Com’n Council v. Delta Dev. Co., Inc., 502 So.2d 1034 (La.1987), the Louisiana Supreme Court discussed the nature of a fiduciary relationship where violations of trust are claimed by persons in their roles as public officials and attorneys. The Court in the Plaquemines Parish case defined a fiduciary relationship in terms of a trust, a confidence and the advantage that one party may have over another. This definition is made in the context of a business or financial relationship. The court stated:

"The dominant characteristic of a fiduciary relationship is the confidence reposed by one in the other and [a person] occupying such a relationship can not further his own interests and enjoy the fruits of an advantage taken of such a relationship. He must make a full disclosure of all material facts surrounding the transaction that might affect the decision of his principals.
Anderson v. Thacher, 76 Cal.App.2d 50, 172 P.2d 533, 543 (1946).

A fiduciary relationship has been further described as one that exists "when confidence is reposed on one side and there is resulting superiority and influence on the other." Toombs v. Daniels, 361 N.W.2d 801, 809 (Minn. 1985) (citations omitted)."

Louisiana jurisprudence has acknowledged the existence of fiduciary obligations involving attorneys, stockbrokers, trustees, usufructuaries, executors, administrators and directors and officers of a corporation. State v. Hagerty, 251 La. 477, 205 So.2d 369 (1967), cert. denied, Hagerty v.
Louisiana, 391 U.S. 935, 88 S.Ct. 1848, 20 L.Ed.2d 855 (1968); Office of the Corer. of Ins. v. I-lartford Fire Ins. Co., 623 So.2d 37 (La.App. 1 Cir.1993), writ denied, 93-2125 (La.4/7/94), 635 So.2d 1131.

As there is no fiduciary relationship between the State and the Organization, there can be no action for a breach of fiduciary relationship against the State if a State employee violated his fiduciary duty to the Organization.

As to whether the State may be vicariously liable for any damage suffered by the Organization due to the action or inaction of the State employee cannot be answered in the abstract. La. C.C. art. 2320 provides that, "[m]asters and employees are answerable for the damage occasioned by their servants and overseers, in the exercise of the functions

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OPINION NUMBER 03-0196
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in which they are employed." An employer is liable for a tort committed by his employee if the employee was acting within the course and scope of his employment at the l~me of the incident. Baumeister v. Plunkett, 95-2270 (La. 5/21/096), 673 So.2d 994. The course of employment test refers to time and place, whereas the scope of employment test examines the employment-related risk of injury.

For an employer to be vicariously liable for the tortious acts of its employee, the "tortious conduct of the employee must be so closely connected in time, place, and causation to his employment duties as to be regarded as a risk of harm fairly attributable to the employer’s business, as compared with conduct instituted by purely personal considerations entirely extraneous to the employer’s interest." Baumeister v. Plunkett, supra; LeBrane v. Lewis, 292 So.2d 216 (La. 1974).

An employer is not vicariously liable merely because his employee commits an intentional tort on the business premises during working hours. Scott v. Commercial Union Ins. Co., 415 So.2d 327 (La. App. 2nd Cir. 1982); Baumeister, supra. Vicarious liability will attach in such a case only if the employee is acting within the ambit of his assigned duties and also in furtherance of his employer’s objective. Scott, supra; Baumeister, supra.

In LeBrane v. Lewis, the Louisiana Supreme Court set out four factors to consider in determining whether the employer is liable for the employee’s acts:

(1) whether the tortious act was primarily employment rooted;
(2) whether the act was reasonably incidental to the performance of the employee’s duties;
(3) whether the act occurred on the employer’s premises; and
(4) whether it occurred during the hours of employment.

All four of these factors do not have to be met before liability may be found. The particular facts of each case must be analyzed to determine whether the employee’s tortious conduct was within the course and scope of his employment. Felix v. Briggs of Oakwood, Inc., 99- 721 (La.App. 5th Cir. 12/15/99), 750 So.2d 1091.

Your final question is: Are such entities and participant individual members subject to the Prohibited Activities as contained in Chapter 14 of the Civil Service Rules?

As stated in Rule 4.1(a), Civil Service Rules govern all departments and persons subject to the Civil Service Article. The Civil Service Article is Article X of the Louisiana Constitution. La.Const. Art. X, Sec. 1 provides for: (A) the establishment of a state civil service which includes all persons holding offices and positions of trust or employment in the employ of the state, or any instrumentality thereof, and any joint state and federal

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agency, joint state and parochial agency, or joint state and municipal agency; and (B) the establishment of a city civil service in cities having over 400,000 population.

It is the opinion of this office that the Organizations are not subject to Civil Service Rule 14; however, we suggest that you contact the State Department of Civil Service and obtain their opinion on this issue.

Trusting this adequately responds to your request, we remain

Yours very truly,

RICHARD P. IEYOUB
Attorney General

BY:
S. HESS
;eneral

RPI/MSH