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C.A. Broadens Liability for Negligent Entrustment, Hiring
Opinion Says Jury May Infer Knowledge of Person’s Unfitness to Drive From a Failure of Vehicle’s Owner or Company Hiring the Person to Inquire, As Required by Statute, Into Whether Driver’s License Is Possessed
By a MetNews Staff Writer
Div. One of the Fourth District Court of Appeal held Friday that liability for negligent entrustment of a vehicle or the negligent hiring of a person who is to drive a company vehicle may be founded on a failure to make sure that the person holds a driver’s license.
Actual knowledge of a person’s unfitness to drive is not required, Justice Cynthia Aaron wrote.
Her opinion reverses summary adjudication granted in favor of Smoothreads, Inc., owner of a vehicle entrusted to Ronald Wells, a contractor, as well as summary judgment in favor of Lance Beesley, Smoothread’s CEO, who made the loan of the vehicle. Smoothreads and Beesley were sued by Blake McKenna who was injured while crossing a street.
Wells—who did not possess a driver’s license or automobile insurance, had a bipolar disorder, and had a problem with alcohol—went through a red light, colliding with a vehicle which bumped into McKenna.
Smoothreads and Beesley disavowed any knowledge of Wells’s unfitness to drive.
Trial Court’s Decision
San Diego Superior Court Judge Gregory W. Pollack, in ruling in favor of the defendants, quoted the California Supreme Court as saying in the 1954 case of Richards v. Stanley:
“[I]t has generally been held that the owner of an automobile is under no duty to persons who may be injured by its use to keep it out of the hands of a third person in the absence of facts putting the owner on notice that the third person is incompetent to handle it.”
Pollack said:
“Accordingly, neither Beesley nor Smoothreads had a legal duty to conduct any investigation or make any inquiry regarding Wells’[s] fitness to operate a motor vehicle.”
He added:
“McKenna cites no persuasive legal authority to the effect that an owner entrusting his vehicle to a third party faces liability for negligent entrustment when, not knowing any facts to put him on notice of the third party’s unfitness, simply fails to conduct an investigation to determine fitness. This would create a new legal duty in California, and this court is not inclined to make new law....”
Aaron’s Opinion
Aaron was not reticent about making new law, discerning the establishment of unprecedented case law to be supported by new statutory law.
Addressing the cause of action for negligent entrustment, she cited Vehicle Code §14604, enacted in 1994, four decades after the high court ruled in Richards. It provides, in part:
“No owner of a motor vehicle may knowingly allow another person to drive the vehicle upon a highway unless the owner determines that the person possesses a valid driver’s license that authorizes the person to operate the vehicle. For the purposes of this section, an owner is required only to make a reasonable effort or inquiry to determine whether the prospective driver possesses a valid driver’s license before allowing him or her to operate the owner’s vehicle.”
Aaron declared:
“We conclude that a jury may find that an owner who breaches its section 14604 duty and permits an unlicensed driver to drive the owner’s vehicle had constructive knowledge of the driver’s incompetence to drive.”
She quoted from Richards, including words omitted by Pollack (which she put in italics), saying that at common law, “[i]n the absence of...a statute...it has generally been held that the owner of an automobile is under no duty to persons who may be injured by its use to keep it out of the hands of a third person in the absence of facts putting the owner on notice that the third person is incompetent to handle it.”
As to the effect of that statute on an action for negligent entrustment, she said:
“It is true, as Smoothreads points out in its brief, that section 14604, subdivision (a) establishes an affirmative duty to inquire regarding a prospective driver’s license status, while a negligent entrustment claim requires either actual or constructive knowledge of a prospective driver’s incompetence or lack of fitness to drive….
“However, a jury that finds that an owner failed to comply with the affirmative statutory duty to make a ‘reasonable effort or inquiry’…into a prospective driver’s license status could reasonably rely on that finding in determining that the owner should have known that the prospective driver ‘was incompetent or unfit to drive the vehicle.’ ”
Sixth District Opinion
In its March 7, 1988 decision in Dodge Center v. Superior Court, the Sixth District Court of Appeal said that under then-existing statutory law and under common law, negligent entrustment “requires a showing of knowledge of the incapacitating condition which under the statute is lack of a license,” adding:
“In the absence of such knowledge there is no duty to inquire.”
That statement, in light of the 1994 enactment, Aaron said, “is no longer correct.”
Negligent Hiring
The justice also said that Pollack erred in finding no liability, as a matter of law, for negligent hiring. She acknowledged that no case imposes liability based on a failure to ascertain whether a prospective employee has a driver’s license, but said: “We can think of no reason, and Beesley offers none, why a hirer who hires another to drive a vehicle has no duty to make a reasonable effort or inquiry into whether a prospective hiree is licensed before entrusting the hiree with a vehicle, given that an owner must make a reasonable effort or inquiry before permitting a person to driver the owner’s car. Instead, we agree with McKenna that a person ‘hiring a worker and entrusting a...vehicle to that worker is...analogous to the statutory framework governing owners who lend their vehicles to another person.’ Thus, we conclude that a hirer has, at a minimum, a duty to make a ‘reasonable effort or inquiry’…into whether the hiree, entrusted with a vehicle, has an appropriate driver’s license.”
Aaron cautioned in a footnote:
“We emphasize that we do not hold that an owner or hirer’s failure to make a reasonable effort or inquiry into the driver’s or hiree’s licensure status, in and of itself, establishes civil liability, or even actionable negligence. Rather, we hold only that such evidence provides a sufficient basis for a jury to find that the plaintiff has proven the constructive knowledge element of these torts.”
The case is McKenna v. Beesley, D077189.
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