Gatzke was employed as a district manager for Walgreen Company (Walgreen), which owned a chain of restaurants. He was assigned to supervise the opening and preliminary operations of a new Walgreen-owned restaurant in Duluth, Minnesota. This assignment required Walgreen to pay for Gatzke’s temporary housing at the Edgewater Motel, which was located near the Duluth site, for several weeks. He used his motel room as a makeshift office and used the desk in the room for routine paperwork, including expense reports. Gatzke was a management-level, salaried employee and, therefore, had no set work hours. On one workday, Gatzke and several employees had spent the entire day on-site at the new restaurant and then had a business dinner and after-dinner drinks until approximately midnight. Gatzke then returned to his motel room and was filling out his expense report when he accidentally dropped a lit cigarette in the trash can next to the desk in his room. A fire started, and although Gatzke escaped unharmed, the motel was severely damaged. Among other defendants, Edgewater sued Walgreen claiming that it was vicariously liable for the acts of Gatzke as its employee agent.

CASE QUESTIONS 1. Was Gatzke’s negligent smoking outside the scope of his employment? Why or why not?
2. If the evidence showed that Gatzke had intentionally tried to commit arson, how would that impact the court’s analysis?
3. Suppose that Gatzke had been writing out personal postcards rather than filling out an expense report when he started the fire.
Would Walgreen be liable? Why or why not?