Colossal Company subsidiary Carz Bazaar, a new and used car dealership, hired Charles Wilson to perform various duties, such as cleaning and gassing vehicles, moving vehicles from one lot to another, and maintaining the showroom and vehicle lots. In this position, Wilson had access to keys to the vehicles through a key-control procedure. Under this procedure, an attendant keeps the keys in a control shack. When any employee wants to move a company vehicle, the attendant inputs information into a template request form. The information includes the date, time, stock number of the vehicle, name of the employee checking out the vehicle, and the destination of the vehicle. For example, the vehicle might be taken to a body shop for repairs, to a gas station, or to a company lot at a different location. Every time an employee checks out a vehicle, the reason must be for company business use. It is not necessary to put the expected return time on the form unless a vehicle was expected to be gone for a long time. Once the attendant has completed the form, she gives the keys to the employee who has requested them. When the vehicle is returned, the attendant indicates in the log that the vehicle was returned and replaces the keys. Sometimes vehicles are gone for more than one day. Some vehicles may be removed permanently if they are sold from another lot. In these cases, the managers of the other lots call to let the attendant know that the vehicle will not be coming back. Sometimes employees drive cars back and leave the keys with other employees to return to the attendant. This practice was acceptable to the dealership.

One day when Gina Mitchell was the attendant in charge, Wilson asked her if he could use a car for 30 minutes on his lunch break to go to his mother’s house. The attendant told him it was okay as long as he brought it back because, otherwise, she could get in trouble. Since Wilson only wanted the car for 30 minutes and she trusted him, she did not make any entry about this trip on the computer. Wilson took the car and left. On his way back to the dealership, Wilson rear-ended a car stopped at a stop light, causing injuries to the driver and a passenger. Wilson told a police officer at the scene of the accident that he was on a lunch break from his job and that he had permission to drive the car, but his boss was not aware he had the car.

The injured driver and passenger sued Carz Bazaar on the grounds that it was responsible for the injuries caused by Wilson.