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C.A. Revives Suit Seeking to Hold Hertz Liable for Accident Allegedly Caused by Renter
Opinion Says Judge Erred in Finding That Plaintiff’s Changing Course in Amended Pleading, to Pursue Negligence Claim Based on Alleged Unlicensed Status of Driver, Was Sham
By a MetNews Staff Writer
Div. Seven of this district’s Court of Appeal has revived a lawsuit accusing Hertz Corporation of negligence for allegedly failing to confirm the license status of a man, who later purportedly drove a rented car into the plaintiffs’ vehicle, finding that a trial judge erred in sustaining a demurrer to the operative complaint based on the sham pleading doctrine.
Under the sham pleading doctrine, a plaintiff cannot avoid allegations that are necessary to a cause of action by filing an amended complaint that pleads facts inconsistent with those asserted in the original filing.
The question as to the application of the doctrine arose after the plaintiff filed the original complaint, in 2023, alleging that Hertz was negligent in resolving his claim against the company for damage to his car and lost income from the accident, and asserted that the other driver was holding in his hand, at the scene, a temporary paper license.
After Hertz successfully demurred to the pleading, he filed a second amended complaint alleging that the paper held by the other driver was not a license but a vehicle registration form. He now asserts that Hertz is liable for negligence in renting to an unlicensed driver.
In an unpublished opinion, authored by Acting Presiding Justice John L. Segal and joined in by Justices Gail Ruderman Feuer and Natalie P. Stone, the court said that retired Los Angeles Superior Court Judge Rolf M. Treu, sitting by assignment, erred in applying the sham pleading doctrine to the operative complaint, saying the change in allegations was due to an honest mistake.
West Hollywood Accident
Underwood alleges that his car was side-swiped as he attempted a U-turn on La Brea Avenue in West Hollywood on Aug. 19, 2023. He claims that a Hertz vehicle being driven by Daniel Kirk hit him while speeding on the wrong side of the road.
In his original complaint, the plaintiff alleges that Kirk was uncooperative at the scene, but Underwood was able to take photographs of what he believed to be a temporary paper driver’s license in the renter’s hand as well as a California identification card. After the accident, he says he reached out to Hertz, but the company stopped responding after an adjuster noted that the company had not been able to contact Kirk.
Underwood said, in the second amended pleading, that the document that he originally identified as a temporary paper driver’s license was actually the Hertz vehicle registration form. He attached the photograph he took at the scene to the filing.
Hertz demurred again, arguing that the sham pleading doctrine barred Underwood from alleging in his operative complaint that Kirk was not holding a temporary driver’s license at the scene.
In the order sustaining the demurrer, without leave to amend, Treu took issue with the fact that the plaintiff did not file an opposition to the defendant’s motion explaining the change in allegations and said:
“Absent an explanation, the Court reads the original defect into the SAC. Therefore, the Court does not find Plaintiff has pled facts establishing that Defendant was negligent relating to this accident or owed a duty to prevent harm to Plaintiff.”
Judgment was entered in favor of Hertz.
No Real Inconsistency
Segal said that Treu “erred in applying the sham pleading doctrine to Underwood’s second amended complaint” because there was “no real inconsistency or contradiction.”
He opined:
“Underwood alleged in his initial complaint that, despite…Kirk’s hostility and refusal to exchange information after the accident, Underwood was able to obtain pictures of two of Kirk’s documents: his identification card and temporary license. Underwood clarified in his second amended complaint that the two documents he saw were actually Kirk’s identification card and the vehicle’s registration. Such clarifications to correct honest mistakes do not warrant imposing the sham pleading doctrine.”
Saying that the doctrine also “does not apply where the plaintiff provides a reasonable explanation for the purported inconsistency,” he concluded:
“Although Underwood did not file an opposition to Hertz’s demurrer to his second amended complaint, his explanation for the change in his allegations was right there in his second amended complaint. He alleged he took a picture of Kirk’s identification card and ‘what he believed was his temporary driver’s license,’ but was actually ‘the vehicle registration.’ He also attached the picture he took of the registration card. Underwood made a reasonable mistake in calling the vehicle registration a ‘paper license.’…Indeed, it was only half a mistake: He got the ‘paper’ part right.”
He also pointed out that “although Underwood alleged in his original complaint he took a picture of a temporary paper license, he did not allege it was valid.”
Under these circumstances, he declared:
“The judgment is reversed. The trial court is directed to vacate its order sustaining Hertz’s demurrer without leave to amend and to enter a new order overruling the demurrer.”
The case is Underwood v. Hertz Corporation, B340282.
Appearing for Hertz were Shayne L. Wulterin, Mark Philip Nelson, and Renee Erika Jensen of the Long Beach office of Ford Walker Haggerty & Behar LLP. Underwood represented himself on appeal.
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