Menu

Bits & Pieces

Harris v. MVT Services, Inc.

Megan HARRIS, Plaintiff

v.

MVT SERVICES, INC., Defendant.

.

 

Sept. 5, 2007.

 

 

LOUIS GUIROLA, JR., United States District Judge.

THE MATTER BEFORE THE COURT is the Motion for Partial Summary Judgment [83] filed by Defendant MVT Services, Inc. (“ MVT” ). Plaintiff has responded and the Defendant has replied. After due consideration of the submissions and the relevant law, it is the Court’s opinion that the Motion should be granted.

 

DISCUSSION

 

This lawsuit involves an accident between a tractor-trailer and an automobile on Mississippi Highway 53 at the Interstate 59 exit ramp.

 

Plaintiff’s statement of facts reads in its entirety as follows:

On or about the 8th day of June, 2004, the Plaintiff, Megan Harris, was operating a motor vehicle along Highway 53 in Pearl River County, Mississippi. As the Plaintiff was traveling along Highway 53, a motor vehicle being driven by Jorge Garcia which was owned by Defendant, MVT Services, Inc., entered Highway 53 from the north bound exit ramp of Interstate 59 into the path of the vehicle being driven by Megan Harris and collided with it (hereinafter “ the Collision” ).

 

Plaintiff’s claims against MVT are for negligence and gross negligence of its employee, Jorge Garcia (Counts I and II). In addition, Plaintiff asserts claims of “ independent negligence”  and “ independent gross negligence”  against MVT for its violation of certain Federal MotorCarrier Safety Regulations and alleged negligent entrustment, hiring, training, supervision, and retention of Garcia (Counts III and IV). It is important to note that Defendants concede that Garcia was negligent in causing the accident and concede that MVT Services, Inc. is vicariously liable for its employee’s negligence. They assert, however, that they are entitled to summary judgment on all of the remaining claims. For the reasons discussed below, the Court finds that the Defendant is entitled to judgment as a matter of law as to Counts II, III and IV of the Amended Complaint.

 

 

In addition to standard, state-law negligence claims of negligent entrustment, hiring, training, supervision and retention, Plaintiff alleges that Defendant’s violation of certain provisions of the Federal MotorCarrier Safety Regulations (“ FMCSR” ) is evidence of negligence per se. Violation of the FMCSR does not, in and of itself, create a cause of action for an injured plaintiff. See, e .g., Stewart v. Mitchell Transportation, 241 F.Supp.2d 1216, 1220 (D.Kan.2002); Schramm v. Foster, 341 F.Supp.2d 536, 547 (D.Md.2004). However, violation of a federal statute can be evidence of negligence per se, provided the plaintiff can show that she was a member of the class sought to be protected under the statute, that her injuries were of a type sought to be avoided, and that violation of the statute proximately caused her injuries.Gallagher Bassett Services, Inc. v. Jeffcoat, 887 So.2d 777, 787 (Miss.2004). But “ [a] finding of negligence per se does not end the inquiry-‘ [n]egligence per se supplies only the duty and the breach of a duty elements of a tort.’ The plaintiff must also prove that the breach of the duty proximately caused her damages.” Id. (citations omitted). In this case, it is unnecessary to examine whether Defendant’s alleged violations of the FMCSR constitute negligence per se. The negligence claims against the Defendant should be dismissed because Defendant MVT has admitted the negligence of its employee and has admitted its own vicarious liability for its employee’s negligence.

 

Defendants have brought to the Court’s attention the case of Davis v. Rocor International, No. 3:00cv864BN, slip op. (S.D.Miss. Dec. 19, 2001), in which a federal district court in this district examined claims identical to some of those at issue in this case. Defendants argue that the similarity of the facts makes that case very persuasive authority with regard to Plaintiff’s claims of MVT’s negligent entrustment, hiring, training, supervision, and retention of Garcia. In the Davis case, the court found that:

In a case such as the one sub judice in which the employer acknowledges liability for the acts of its employee, a plaintiff does not have to depend upon the negligent entrustment doctrine to recover from the employer for his injuries as liability of the employer is already established if the plaintiff can prove negligence of the employee. The need to show that the employer was negligent in having entrusted a motor vehicle to a driver it knew to be incompetent is obviated by the fact that the employer has admitted liability for any acts taken by that driver.

 

Id. at 18 (citations omitted). The court found that the negligent hiring, training and/or retention claims should be dismissed for the same reasons, citing Thacher v. Brennan, 657 F.Supp. 6, 10 (S.D.Miss.1986).“ [T]here is no need to show that the employer was negligent in hiring, training or retaining an employee in the event it concedes that it is liable for his actions.” Davis at 20.The Court agrees with this analysis, and finds that the Davis court’s conclusion should be applied to Plaintiff’s claims of negligent entrustment, hiring, training and retaining against the Defendant.

 

Next, just as in this case, the plaintiffs in Davis argued that they had stated a separate cause of action against the employer to hold the employer directly liable for the employee’s conduct. The court stated that it “ was unable to find, and was not cited to, any Mississippi case which allowed a plaintiff to recover damages on claims of negligent hiring, training or retention in addition to those that resulted because of the negligent acts of an employee.” Id. at 21.At this date, the state of the law in Mississippi on this issue remains the same. In the absence of a Mississippi case to the contrary, the Court concludes that the Defendant is entitled to judgment as a matter of law on Plaintiff’s claims of “ independent negligence of MVT”  and “ independent gross negligence of MVT”  contained in Counts III and IV of the Amended Complaint.

 

 

The Plaintiff asserts a claim of gross negligence against Defendant MVT for the actions of its employee and requests punitive damages. There is no right to punitive damages. Doe ex rel. Doe v. Salvation Army, 835 So.2d 76, 79 (Miss.2003). Only if certain statutory criteria are met does the court undertake a determination of whether the issue of punitive damages should be submitted to the jury. Id. The criteria are set out in MISS.CODE ANN. § 11-1-65(1)(d):

Punitive damages may not be awarded if the claimant does not prove by clear and convincing evidence that the defendant, against whom punitive damages are sought, acted with actual malice, gross negligence which evidences a willful, wanton or reckless disregard for the safety of others, or committed actual fraud.

 

Id. When deciding whether to submit the issue of punitive damages to a trier of fact, the trial court looks at the totality of the circumstances to determine if a reasonable, hypothetical trier of fact could find either malice or gross neglect/reckless disregard. Doe v. Salvation Army, 835 So.2d at 81. “ The facts must be highly unusual as punitive damages are only awarded in extreme cases .” Gamble ex rel. Gamble v. Dollar General Corp., 852 So.2d 5, 15 (Miss.2003) (citations omitted).

 

Plaintiff makes the following allegations in support of her claim for punitive damages: the driver was “ in gross violation”  of certain FMCSR provisions regarding driving without rest “ and other FMCSR mandates;”  the driver could not adequately read, write or speak English; and the driver “ pulled out in front of Plaintiff intending to drive over the island and go straight cross (sic) the intersection because he was lost and could not find a bathroom.” Pl. Am. Compl. 4; Pl. Resp. Memo. 26. The Plaintiff refers generally to the depositions of Rustie Milam, Raul Garcia, JoJohn Vega, Jorge Garcia and George Martinez to support her factual allegations, but does not identify any specific testimony which supports her punitive damages claim. Plaintiff is required to “ identify specific evidence in the record, and to articulate the ‘ precise manner’  in which that evidence support[s][her] claim.” Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir.1994), citing Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir.), cert. denied,506 U.S. 825 (1992) and Krim v. BancTexas Group, Inc., 989 F.2d 1435, 1443 (5th Cir.1993).“ Rule 56 does not impose upon the district court a duty to sift through the record in search of evidence to support a party’s opposition to summary judgment” .Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915 & n. 7 (5th Cir.1992). Nevertheless, the Court has reviewed the five depositions referred to by the Plaintiff; Jorge Garcia, the driver; Rustie Milam, the Safety Supervisor at the time of the accident; George Martinez, Ms. Milam’s assistant; Raul Garcia, a previous Safety Director, and JoJohn Vega, Vice-President of Operations. The Court finds no clear and convincing evidence within these depositions that Garcia, MVT’s employee, acted with gross negligence evidencing a willful, wanton or reckless disregard for the safety of others. According to Garcia’s testimony, he had exited the Interstate looking for a bathroom, did not see one off of Highway 53, and started across Highway 53 to get back on the Interstate. Def. Exh. “ A”  74. He was moving across Highway 53 at about 5 miles per hour when Plaintiff’s vehicle struck the rear truck axle. Id. at 72, 74.He had not seen her vehicle when he started across the Highway. Id. at 74.The remaining depositions contain no testimony relevant to the facts and circumstances of the accident. Plaintiff has therefore not shown facts which meet the statutory criteria governing punitive damages in Mississippi. Instead, this appears to be an ordinary negligence case involving a careless driver, not a wanton or reckless driver. The Defendant is therefore entitled to judgment as a matter of law as to Plaintiff’s claim for punitive damages.

 

IT IS THEREFORE ORDERED AND ADJUDGED that the Defendant’s Motion for Partial Summary Judgment [83] is GRANTED.Plaintiff’s claims against the Defendant in Counts II, III and IV of the Amended Complaint are DISMISSED.

 

SO ORDERED AND ADJUDGED.

 

Castro v. Budget Rent A Car

Court of Appeal, Second District, Division 5, California.

Mario CASTRO, et al., Plaintiffs and Appellants,

v.

BUDGET RENT-A-CAR SYSTEM, INC., et al., Defendants and Respondents.

 

Sept. 4, 2007.

 

Background: Motorist who was injured in traffic collision in Alabama, allegedly caused by an overturned truck, brought action against truck’s lessor and others, alleging motor vehicle negligence, general negligence, and negligence per se. The Superior Court, Los Angeles County, No. BC297942,George Wu, J., granted summary judgment in favor of truck lessor. Motorist appealed.

 

 

 

Plaintiff Mario Castro (Castro), a California resident, sustained physical injuries in a traffic collision in Alabama allegedly caused by an overturned truck owned by defendant and respondent Budget Rent-A-Car System, Inc. (Budget). Prior to the accident, Budget had leased the truck that overturned to defendant Carlos Diaz, doing business as Carlos Diaz Fresh Produce (Diaz). At the time of the accident, Diaz’s employee, defendant Jose Lopez (Lopez), was driving Budget’s leased truck while allegedly intoxicated.

 

Plaintiffs sued Budget and others in California state court for negligence and lost consortium. The trial court granted summary judgment in favor of Budget on the grounds that Alabama law-not federal or California law-applied and that under Alabama’s common law doctrine governing the permissive use of motor vehicles (permissive user law), Budget was not responsible for the negligence of either Diaz or Lopez. On appeal, plaintiffs contend that federal law or the common law nondelegable duty doctrine should apply, either of which would result in Budget’s liability. They argue that at the time of the accident, Budget qualified as a “ motorcarrier”  under applicable federal law, and as a consequence is financially responsible for their injuries.

 

We hold that in connection with the accident, Budget was not a “ motorcarrier”  as that term is defined in the relevant federal statutes, regulations, and case law and therefore is not liable under federal law or the common law nondelegable duty doctrine. As the trial court ruled, Budget’s liability to plaintiffs is governed by Alabama’s permissive user law that entitled Budget to summary judgment. We therefore affirm the judgment of the trial court.

 

 

A. Budget’s Undisputed Facts

 

On July 22, 2002, Castro, a California resident, was a passenger in a vehicle that was involved in an accident on Interstate 20 in the State of Alabama. Budget owned the other vehicle involved in the accident and had leased it to Diaz in Alabama. Budget’s truck was operated by Lopez at the time of the accident.

 

B. Castro’s Additional Disputed Facts

 

Budget is in the business of renting or leasing motor vehicles to be operated on the public highways. Budget’s truck was leased for commercial use to Diaz to transport produce from Alabama across state lines to Florida. Budget leased the truck to Diaz on July 14, 2002, with knowledge that the truck would be used in the course of Diaz’s business, and with the knowledge that the truck might be used to conduct business across state lines. On July 22, 2002, Budget’s truck was registered and licensed in the State of California. Budget’s truck weighed over 10,000 pounds.

 

Diaz purchased liability protection from Budget on July 14, 2002, for the business rental of Budget’s truck because he did not have insurance. On July 22, 2002, Budget possessed a certificate of self-insurance issued by the State of Alabama.

 

As of July 22, 2002, Budget was assigned a United States Department of Transportation (DOT) number by the Federal MotorCarrier Safety Administration (FMCSA). A “ MotorCarrier Identification Report”  or “ Form MCS-150”  is used to obtain a DOT number from FMCSA. Form MCS-150 defines “ Registrant”  as “ [a]n entity who registers commercial motor vehicles with a State, but does not operate as a motorcarrier. For example, a company that is engaged solely in renting or leasing vehicles, or [a] for-hire operator that always operates under the authority of another company.”

 

 

Plaintiffs’ first amended complaint asserted, inter alia, causes of action for motor vehicle negligence, general negligence, and negligence per se against Budget. Plaintiffs alleged that Castro was injured in a traffic accident in Alabama caused by Budget. They further alleged that Lopez was operating Budget’s truck in the course and scope of his employment with Diaz at the time of the accident, and that Lopez was intoxicated when he lost control of the truck and overturned it in the middle of the roadway, blocking both lanes of traffic. According to plaintiffs, Lopez’s “ negligent and reckless operation of his truck while intoxicated, and his subsequent abandonment thereof, created an ultra-hazardous condition which resulted in the unavoidable crash of [Castro’s] truck … [and] severe bodily injuries [to Castro].”

 

Budget filed a motion for summary judgment on the grounds that Alabama law applied and that under Alabama’s permissive user law, Budget was not liable for the negligence of either Diaz or Lopez. Plaintiffs opposed the motion, arguing that Budget was a “ motorcarrier”  subject to the federal statutes and regulations governing interstate motor transportation and therefore responsible for plaintiffs’ damages. In support of their opposition to the motion, plaintiffs filed the declaration of an expert who opined that Budget was a motorcarrier subject to federal regulation, including the regulatory provisions that require minimum insurance coverage of $750,000.

 

The trial court ruled that the federal statutes and regulations upon which plaintiffs relied did not apply to Budget, that Alabama law controlled the liability issue, and that Budget was entitled to summary judgment. The trial court subsequently entered judgment in favor of Budget and against plaintiffs. Plaintiffs timely appealed.

 

 

A. Standard of Review

 

“ We review the grant of summary judgment de novo. (Szadolci v. Hollywood Park Operating Co. (1993) 14 Cal.App.4th 16, 19 [17 Cal.Rptr.2d 356].) We make ‘ an independent assessment of the correctness of the trial court’s ruling, applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law.’ (Iverson v. Muroc Unified School Dist. (1995) 32 Cal.App.4th 218, 222 [38 Cal.Rptr.2d 35].) A defendant moving for summary judgment meets its burden of showing that there is no merit to a cause of action by showing that one or more elements of the cause of action cannot be established or that there is a complete defense to that cause of action. (Code Civ. Proc., § 437c, subd. (p)(2).) Once the defendant has made such a showing, the burden shifts back to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or as to a defense to the cause of action. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849, 853 [107 Cal.Rptr.2d 841, 24 P.3d 493].)” (Moser v. Ratinoff (2003) 105 Cal.App.4th 1211, 1216-1217, 130 Cal.Rptr.2d 198.)

 

“ In performing our de novo review, we view the evidence in the light most favorable to plaintiffs as the losing parties. [Citation.] In this case, we liberally construe plaintiffs’ evidentiary submissions and strictly scrutinize defendants’ own evidence, in order to resolve any evidentiary doubts or ambiguities in plaintiffs’ favor.” (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142, 12 Cal.Rptr.3d 615, 88 P.3d 517.)“  ‘ Regardless of how the trial court reached its decision, it falls to us to examine the record de novo and independently determine whether that decision is correct.’ ” (Carnes v. Superior Court (2005) 126 Cal.App.4th 688, 694, 23 Cal.Rptr.3d 915.)

 

B. Budget Was Not a MotorCarrier

 

Plaintiffs contend that Budget is a motorcarrier subject to the “ control and responsibility”  requirements of federal law (49 U.S.C. § 14102(a)(4); 49 C.F.R. § 376.12(c)(1) (2006); see Transamerican Freight Lines, Inc. v. Brada Miller Freight Systems (1975) 423 U.S. 28, 29, 96 S.Ct. 229, 46 L.Ed.2d 169) and is therefore liable for Diaz’s negligent operation of Budget’s truck. In support of this contention, plaintiffs rely on the federal statute and regulations that require motorcarriers to maintain specified levels of financial responsibility in the form of insurance or self-insurance. (49 U.S.C. § 31139; 49 C.F.R. § 387.1, et seq. (2006).) According to plaintiffs, Budget, through self-insurance, voluntarily complied with the minimum financial responsibility requirements under federal law, thereby demonstrating that Budget is a motorcarrier subject to those requirements. The issue therefore is whether Budget, as a lessor of the vehicle involved in the accident, qualifies as a motorcarrier in connection with that incident, so as to be subject to the federal “ control and responsibility”  requirements upon which plaintiffs rely.

 

“ During the first half of the twentieth century, interstate motorcarriers attempted to immunize themselves from liability for negligent drivers by leasing trucks and nominally classifying the drivers who operated the trucks as ‘ independent contractors.’  [Citations.] In order to protect the public from the tortious conduct of the often judgment-proof truck-lessor operators, Congress in 1956 amended the Interstate Common Carrier Act to require interstate motorcarriers to assume full direction and control of the vehicles that they leased ‘ as if they were the owners of such vehicles.’ [Citations.] The purpose of the amendments to the Act was to ensure that interstate motorcarriers would be fully responsible for the maintenance and operation of the leased equipment and the supervision of the borrowed drivers, thereby protecting the public from accidents, preventing public confusion about who was financially responsible if accidents occurred, and providing financially responsible defendants.” (Morris v. JTM Materials, Inc. (Tex.Ct.App.2002) 78 S.W.3d 28, 37-38, fn. omitted.) The goal was to make lessees of trucks responsible for the negligent operation of those trucks, regardless of whether the lessees employed the drivers. “ The Surface Transportation Board (formerly the Interstate Commerce Commission []) and the Secretary of Transportation enforce the United States Government’s transportation policy with regard to transportation by motorcarrier (49 U.S.C. § 13101(a)(2)), and the Board has jurisdiction over the transportation of property by motorcarrier between a place in one state and a place in another state. (49 U.S.C. § 13501(1)(A).)” (Serna v. Pettey Leach Trucking, Inc. (2003) 110 Cal.App.4th 1475, 1477, 2 Cal.Rptr.3d 835(Serna ).)

 

Neither party disputes that “ motorcarriers… are required to comply with the provisions of Title 49 [of the United States Code] and the regulations promulgated thereunder.” (Johnson v. S.O.S. Transport, Inc. (6th Cir.1991) 926 F.2d 516, 521.)Title 49 of United States Code section 14102(a)(4) requires motorcarriers that use leased vehicles to “ have control of and be responsible for operating those motor vehicles in compliance with requirements prescribed by the Secretary on safety of operations and equipment, and with other applicable law as if the motor vehicles were owned by the motorcarrier.” Under 49 Code of Federal Regulations part 376.12(c)(1) (2006), the lease agreements covering such vehicles “ shall provide that the authorized carrier lessee shall have exclusive possession, control, and use of the equipment for the duration of the lease. The lease shall further provide that the authorized carrier lessee shall assume complete responsibility for the operation of the equipment for the duration of the lease.” The control and responsibility requirements under federal law “ render lessee carriers vicariously liable, notwithstanding traditional principles of agency, for injuries sustained by third parties resulting from the negligence of the drivers of leased vehicles.” (Johnson v. S.O.S. Transport, Inc., supra, 926 F.2d at p. 522.)

 

Title 49 United States Code section 31139 and the regulations promulgated under that provision prescribe “ the minimum levels of financial responsibility required to be maintained by motorcarriers of property operating motor vehicles in interstate, foreign, or intrastate commerce.” (49 C.F.R. § 387.1 (2006).) The financial responsibility provisions complement the control and responsibility requirements. “ The purpose of [the regulations promulgated under section 31139] is to create additional incentives to motorcarriers to maintain and operate their vehicles in a safe manner and to assure that motorcarriers maintain an appropriate level of financial responsibility for motor vehicles operated on public highways.” (Ibid.) According to those regulations “ [n]o motorcarrier shall operate a motor vehicle until the motorcarrier has obtained and has in effect the minimum levels of financial responsibility as set forth in [part] 387.9 of this subpart.” (49 C.F.R. § 387.7(a) (2006).)

 

The financial responsibility regulations apply to (i) “ for hire motorcarriers operating motor vehicles transporting property in interstate or foreign commerce”  (49 C.F.R. § 387.3(a) (2006), italics added); and (ii) “ motorcarriers operating motor vehicles transporting hazardous materials, hazardous substances, or hazardous wastes in interstate, foreign, or intrastate commerce.”  (49 C.F.R. § 387.3(b) (2006), italics added.) Under 49 Code of Federal Regulations part 387.9 (2006), motorcarriers engaged in “ for-hire”  carriage are required to maintain liability insurance in the amount of $750,000 for nonhazardous interstate or foreign commerce that has a “ gross vehicle weight rating of 10,000 pounds or more.” That section further provides that “ motorcarriers”  engaged in either “ for-hire”  or “ private”  carriage involving the transportation of hazardous materials, hazardous substances, or hazardous waste are required to maintain higher levels of liability insurance. (49 C.F.R. § 387.9 (2006).)

 

Title 49 United States Code section 13102 contains a series of definitions applicable to, inter alia, interstate motorcarriers. Section 13102(15) defines a “ motor private carrier”  as “ a person, other than a motorcarrier, transporting property by commercial motor vehicle (as defined in section 31132) when-[¶] (A) the transportation is as provided in section 13501 of this title; [¶] (B) the person is the owner, lessee, or bailee of the property being transported; and [¶] (C) the property is being transported for sale, lease, rent, or bailment or to further a commercial enterprise.” Section 13102(14) defines “ motorcarrier”  as “ a person providing commercial motor vehicle (as defined in section 31132) transportation for compensation.”

 

The financial responsibility regulations define “ motorcarrier”  as a “ for-hire motorcarrier or private motorcarrier. The term includes, but is not limited to, a motorcarrier’s agent, officer, or representative; an employee responsible for hiring, supervising, training, assigning or dispatching a driver; or an employee concerned with the installation, inspection, and maintenance of motor vehicle equipment and/or accessories.” (49 C.F.R. § 387.5 (2006).) Although the financial responsibility regulations do not contain a specific definition of either a “ for-hire motorcarrier”  or a “ private motorcarrier,”  they define “ [f]or-hire carriage”  as “ the business of transporting, for compensation, the goods or property of another.” (Ibid.)

 

Moreover, 49 United States Code section 31139(c)-the statute under which the financial responsibility regulations were promulgated-cross-references the definition of “ motor private carrier”  contained in 49 United States Code section 13102(15). That a provision in the financial responsibility statute cross-references and incorporates the definition of “ motor private carrier”  in 49 United States Code section 13102 suggests that the general definitions in section 13102, including the definition of a “ motorcarrier”  in subdivision (14) quoted above, are applicable to section 31139 and the financial responsibility regulations promulgated under it.

 

Plaintiffs contend that Budget, as the lessor of the truck that caused Castro’s injuries, qualifies as a motorcarrier under federal law, and is therefore financially responsible for their injuries. But the code sections and regulations we have quoted do not mention “ lessors”  in the various definitions of “ motorcarrier,”  “ motor private carrier,”  or “ for-hire”  carriage. If Congress or the DOT had intended to extend to lessors of equipment (including lessor owners) the financial responsibility requirements imposed under title 49 of the United States Code, the code sections and regulations that define those requirements should contain some explicit reference to lessors that would cover vehicle leasing companies such as Budget. The absence of any such reference in the applicable code sections and regulations supports the conclusion that they do not apply to lessors of vehicles.

 

Notwithstanding the absence of any reference to lessors in the code sections and regulations upon which they rely, plaintiffs maintain that Budget is a federally regulated motorcarrier because it is in the business of leasing to others commercial vehicles that will be used to transport goods or property across state lines, and it is compensated for that activity. Budget correctly counters that the mere act of leasing the truck to Diaz did not qualify it as a motorcarrier because it did not retain possession or control over the truck or otherwise operate the truck to transport goods. Budget cites Del Real v. United States Fire Insurance Crum & Forster (E.D.Cal.1998) 64 F.Supp.2d 958(Del Real ) in support of its position.

 

In Del Real, supra, 64 F.Supp.2d 958, the plaintiffs, relatives of the victim of a fatal traffic collision, obtained a state court judgment against the owner of the truck involved in the collision. At the time of the accident, the truck was pulling a trailer that the truck’s owner had leased from Strick Leasing. (Id. at p. 960.)In a separate insurance coverage action in federal court, the plaintiffs attempted to recover the unsatisfied amount of the state court judgment from Strick Leasing’s insurer. (Id. at p. 961.)The plaintiffs argued, inter alia, that by leasing the trailer to the truck owner, Strick Leasing was a “ motorcarrier”  subject to the financial responsibility requirements of title 49 of the United States Code, including the requirement that it procure an MCS-90 endorsement  to cover injuries that arise in the operation, maintenance, or use of motor vehicles subject to the financial responsibility requirements. (Id. at pp. 963-964.)

 

The court in Del Real, supra, 64 F.Supp.2d 958 rejected the plaintiffs’ contention that Strick Leasing, as lessor of the trailer, was a motorcarrier as that term is defined in the regulations promulgated under 49 United States Code section 31139. According to the court in Del Real, Strick Leasing was “ an equipment lessor of trailers, and not a for-hire motorcarrier.” (Id. at p. 965.)Therefore, the court concluded that the leased trailer was not “ subject to the financial responsibility requirements of the Motor Vehicle Act.” (Ibid.)

 

Plaintiffs contend that Del Real, supra, 64 F.Supp.2d 958 is distinguishable from this case because here Budget was using a lease arrangement with Diaz to disguise that it qualified as a “ motorcarrier”  under federal law and to avoid the financial responsibility requirements imposed under that law. The undisputed facts in the instant case, however, do not fit the typical situation in which a lease arrangement is used to disguise the provision of transportation services in an attempt to avoid the application of the safety and financial responsibility requirements of federal law.These facts show that there was a lease agreement between the parties, nothing more. There are no facts showing that agreement was not legitimate and not entered into in good faith, or that Budget was trying to evade the letter or spirit of the law. There is nothing about the straightforward lease agreement that suggests or implies that Budget was engaging in the transportation of goods or property for compensation. On this record, Budget was not a motorcarrier within the meaning of the applicable federal statutes and regulations.

 

Plaintiffs emphasize that in certain documents filed with the DOT, Budget identified itself as an “ Interstate Carrier”  engaged in the business of transporting “ general freight”  and “ household goods.”  Therefore, according to plaintiffs, there is a triable issue of fact concerning whether Budget was acting as a motorcarrier in connection with Diaz’s lease of the truck from Budget.

 

Plaintiffs’ evidence arguably may raise a triable issue of fact as to whether, as a general matter, Budget was a registered carrier authorized to transport goods or property interstate for compensation. That evidence, however, does not address the issue in this case-whether Budget was acting as a motorcarrier in connection with the accident in question. As we have concluded, Budget was not a motorcarrier in connection with the accident because Budget’s lease transaction did not constitute the business of transporting goods for hire. It was not hired to transport the load of produce being shipped by Diaz, did not dispatch or employ Lopez to deliver the produce, and was not transporting the produce itself as a private carrier. In connection with the vehicle lease in question, Budget was not a motorcarrier under federal law, and therefore federal law does not render it liable to plaintiffs.

 

C. Nondelegable Duty Doctrine

 

Under California’s nondelegable duty doctrine, “ a carrier who undertakes an activity (1) which can be lawfully carried on only under a public franchise or authority and (2) which involves possible danger to the public is liable to a third person for harm caused by the negligence of the carrier’s independent contractor.” (Serna, supra, 110 Cal.App.4th at p. 1486, 2 Cal.Rptr.3d 835.)Plaintiffs contend that Budget was conducting business under a federal franchise as a motorcarrier, and, under the nondelegable duty doctrine, Budget is responsible for Diaz’s negligence regardless of Alabama’s permissive user law.

 

In support of their nondelegable duty argument, plaintiffs rely primarily on Serna supra, 110 Cal.App.4th 1475, 2 Cal.Rptr.3d 835.0In that case, the defendant, a carrier subject to federal regulation, entered into a contract with a Georgia poultry company for the defendant to arrange transportation to California of a load of frozen poultry. (Id. at p. 1478, 2 Cal.Rptr.3d 835.)The defendant then arranged for another company to pick up the load of poultry and transport it to California, using that company’s truck and driver. (Ibid.) After entering California, the truck collided with a motorcycle, killing the motorcycle’s driver. (Ibid.) The victim’s wife and children sued the defendant, contending the defendant was vicariously liable for the truck driver’s negligence. (Ibid.)

 

The trial court in Serna, supra, 110 Cal.App.4th 1475, 2 Cal.Rptr.3d 835 granted a nonsuit in favor of the defendant, ruling that the defendant was not vicariously liable for the truck driver’s negligence. (Id. at pp. 1478-1479, 2 Cal.Rptr.3d 835.)The trial court concluded that the type of goods being shipped exempted the defendant carrier from federal regulations and permit requirements. The Court of Appeal reversed, holding that a carrier that undertakes an activity that can be lawfully carried on only under a public franchise or authority and that involves possible danger to the public is liable to third parties who are injured by the carrier’s subcontractor. (Id. at p. 1486, 2 Cal.Rptr.3d 835.)According to the court in Serna,“ [w]ere the rule otherwise, a carrier could escape liability for the negligence of its independent contractors, thus reducing the incentive for careful supervision and depriving those who are injured of the financial responsibility of those to whom the privilege was granted. For these reasons, the carrier’s duties are nondelegable, and it is only when the carrier is ‘ not regulated’  at all that the rule is otherwise.” (Ibid.) In reaching its conclusion that the carrier was liable, the court in Serna rejected the argument that the carrier was “ not regulated,”  holding that although the cargo was exempt from economic regulation, the carrier was not exempt from federal safety and financial regulation. (Ibid.)

 

The rule stated in Serna, supra, 110 Cal.App.4th 1475, 2 Cal.Rptr.3d 835 has no application to the facts here. The Serna case presented the paradigm in which a shipper contracts with a carrier operating under a franchise to transport the shipper’s goods interstate, and the carrier arranges for a subcontractor to perform the transportation services on the carrier’s behalf. Under the nondelegable duty doctrine discussed above, the carrier is treated in such cases as if it owned the truck and employed the driver for purposes of determining the carrier’s liability for the negligence of the subcontractor.

 

Here, it is undisputed that Budget did not contract with anyone to transport the produce that was being hauled by Lopez at the time of the accident. Nor did Budget subcontract with Diaz to perform transportation services on Budget’s behalf. Budget leased the truck to Diaz under a lease agreement, and Diaz performed the transportation of goods using an employee, Lopez. In leasing the truck to Diaz, Budget did not engage in an activity that could lawfully be carried out only under a public franchise or authority. Moreover, Budget did not engage in an activity that was potentially dangerous to the public, as was the defendant’s transportation of goods across state lines in Serna, supra, 110 Cal.App.4th 1475, 2 Cal.Rptr.3d 835.Instead, as discussed above, Budget’s business lease activity in this case was “ not regulated”  under the federal statutes and regulations upon which plaintiffs rely because Budget was not acting as a “ motorcarrier,”  and therefore was not subject to the financial responsibility requirements governing such carriers. Thus, unlike the situation in Serna, which turned on the question of exempt goods, here the business activity itself is not subject to the federal regulations in issue. As a result, Budget had no duty under the common law nondelegable duty doctrine to assume financial responsibility for Diaz’s negligence.

 

D. The Applicable State Law

 

Budget contends that because federal law does not govern the issue of its responsibility for Castro’s injuries, the state law of either Alabama or California governing the liability of vehicle owners for the negligence of permissive users should control the liability issue. Because plaintiffs argue that either federal law or the common law nondelegable duty doctrine controls, they do not address the issue of whether the permissive user rules of Alabama or California should apply.1

 

As discussed above, the federal law upon which plaintiffs rely does not apply to the facts of this case. We therefore agree with Budget that either Alabama or California law should be applied to the issue of Budget’s liability to plaintiffs. Under the undisputed facts of this case, and as the trial court correctly ruled, Alabama’s permissive user law controls that issue and entitles Budget to a judgment in its favor as a matter of law.

 

“ Past decisions establish that in analyzing a choice-of-law issue, California courts apply the so-called governmental interest analysis, under which a court carefully examines the governmental interests or purposes served by the applicable statute or rule of law of each of the affected jurisdictions to determine whether there is a ‘ true conflict.’  If such a conflict is found to exist, the court analyzes the jurisdictions’ respective interests to determine which jurisdiction’s interests would be more severely impaired if that jurisdiction’s law were not applied in the particular context presented by the case. [Citations.]” (Kearney v. Salomon Smith Barney, Inc. (2006) 39 Cal.4th 95, 100, 45 Cal.Rptr.3d 730, 137 P.3d 914.)The comparison is not about “  ‘ which conflicting law manifest(s) the “ better”  or the “ worthier”  social policy.’ ” (Offshore Rental Co. v. Continental Oil Co. (1978) 22 Cal.3d 157, 165, 148 Cal.Rptr. 867, 583 P.2d 721(Offshore ).) Rather, it is about the “ relative commitment of the respective states to the laws involved.” (Id. at p. 166, 148 Cal.Rptr. 867, 583 P.2d 721.)2

 

[10] Under the governmental interest analysis, we must first determine whether there is a true conflict between Alabama’s permissive user law and California law. As Budget points out, there appears to be such a conflict in this case. Under Alabama law, the owner of a vehicle is not liable for the negligence of a permissive user of that vehicle. (Patterson v. Harris (Ala.1995) 674 So.2d 67, 69;Downes v. Norrell (1954) 261 Ala. 430, 74 So.2d 593, 597 [“ Permissive use alone does not furnish any basis for liability against the owner …” ]; Cruse-Crawford v. Rucker (1929) 220 Ala. 101, 123 So. 897 [“ The doctrine is also well known that an owner of a car is generally not liable for the consequences of the negligence of a bailee or borrower while so operating the car …” ].) In California, however, the owner of a vehicle is liable for the negligence of a permissive user of that vehicle, but the amount of damages for which the owner can be held liable is limited. (Veh.Code, §§ 17150, 17151, subd. (a).) 3

 

[11] We therefore assume, for purposes of analysis, that the application of Alabama law to this case would result in a finding that Budget has no liability, whereas the application of California law could result in a finding that Budget is liable, albeit for a limited amount. Accordingly, we must “ determine which state’s interest would be more impaired if its policy were subordinated to the policy of the other state.” (Cable v. Sahara Tahoe Corp. (1979) 93 Cal.App.3d 384, 394, 155 Cal.Rptr. 770.)“ The state with the ‘ predominant’  interest in controlling conduct normally is the state in which such conduct occurs and is most likely to cause injury.” (Ibid.; see also Offshore, supra, 22 Cal.3d at p. 168, 148 Cal.Rptr. 867, 583 P.2d 721 [“ although the law of the place of the wrong is not necessarily the applicable law for all tort actions [citation], the situs of the injury remains a relevant consideration” ].)

 

The accident and Castro’s injury occurred within Alabama’s borders, thus giving Alabama a presumptive interest in controlling the conduct of those persons who use its roadways, absent some other compelling interest to be served by applying California law. Alabama’s common law rule, noted above-that mere ownership of an automobile does not render the owner liable for the negligence of a permissive user-is well established in a long line of cases.(Cruse-Crawford v. Rucker, supra, 123 So. at p. 897;Thompson v. Curry (1951) 36 Ala.App. 334, 56 So.2d 359, 360;Downes v. Norrell, supra, 74 So.2d at p. 597;American Fire & Cas. Co. v. State Farm Mut. Auto., Ins. Co. (1973) 290 Ala. 21, 273 So.2d 186, 188;Durbin v. B.W. Capps & Son, Inc. (Ala.1988) 522 So.2d 766, 768;Patterson v. Harris, supra, 674 So.2d at p. 69.)Under Alabama law, however, there are a number of theories by which the negligence of the driver may be imputed to the owner of the automobile. These include an agency relationship (Blair v. Greene (1945) 247 Ala. 104, 22 So.2d 834, 838;Howell v. Birmingham Nehi Bottling Co. (1958) 267 Ala. 290, 101 So.2d 297, 301;Towry v. Moore (1968) 281 Ala. 644, 206 So.2d 889, 891-892;Land v. Shaffer Trucking, Inc. (1973) 290 Ala. 243, 275 So.2d 671, 674-675) and negligent entrustment (Gardiner v. Solomon (1917) 200 Ala. 115, 75 So. 621, 623;Rush v. McDonnell (1925) 214 Ala. 47, 106 So. 175, 177;Spurling v. Fillingim (1943) 244 Ala. 172, 12 So.2d 740, 742;Dean v. Johnston (1968) 281 Ala. 602, 206 So.2d 610, 613;Cooter v. State Farm Fire & Cas. Co. (Ala.1977) 344 So.2d 496, 497;Chiniche v. Smith (Ala.1979) 374 So.2d 872, 874). Thus, Alabama law has, through its case law, developed an allocation of liability in vehicle negligence cases. Alabama’s judicially formulated permissive user law imposes liability on the actively negligent permissive user, rather than the owner of the vehicle. In doing so, that law advances a fundamental state interest in deterring negligent driving on Alabama’s roadways by holding negligent drivers liable for their conduct, while at the same time shielding non-culpable vehicle owners from any of the financial burdens caused by actively negligent drivers. (See Kim v. Paccar Financial Corp. (App.Div.2006) 385 N.J.Super. 142, 896 A.2d 489, 492.)

 

Alabama also has a legitimate interest in not subjecting its residents and businesses to the laws of other states that expand liability based on vehicle ownership beyond the traditional common law principles discussed above, such as agency and negligent entrustment. And it has a further interest in not having vehicle owners and drivers in its jurisdiction subjected to different liabilities based on the fortuity of which state a plaintiff happens to be a resident. Thus, Alabama has an interest in the uniform application of motor vehicle laws to owners and drivers in Alabama.

 

California, on the other hand, does not have a similar interest in having its permissive user statute (Veh.Code, § 17150) applied in this case. “ By statute California has long provided for liability of the owner of a vehicle to third persons for damages sustained by them as the result of negligent operation of the owner’s vehicle by a driver who has the owner’s consent to drive…. [¶] The statute, as originally enacted, constituted a departure from liability recognized at common law, and has been interpreted in numerous cases as a statute subject to strict construction.” (Hartford Accident & Indemnity Co. v. Abdullah (1979) 94 Cal.App.3d 81, 87-88, 156 Cal.Rptr. 254.)“ [T]he imputed negligence act was designed to place upon the owner of a motor vehicle liability for injuries in its operation by another with his permission, express or implied, and thus hold the owner answerable for his failure to place that instrumentality in proper hands….” (Weber v. Pinyan (1937) 9 Cal.2d 226, 229, 70 P.2d 183.)The imposition of liability upon vehicle owners for the negligence of permissive users also serves to protect third parties who are injured as a result of such negligence. (Galvis v. Petito (1993) 13 Cal.App.4th 551, 556, 16 Cal.Rptr.2d 560 [“ The intent of the Legislature in imposing liability on [a vehicle] owner is to protect third parties who are injured through the negligent operation of the owner’s vehicle by a permissive user” ].)

 

Based on the foregoing authorities, it appears that Vehicle Code section 17150 is directed primarily at motivating vehicle owners who allow others to use their vehicles within California to exercise care in the selection and supervision of such permissive users, and at protecting persons using California roadways. Thus, applying California’s statute to Budget’s conduct within the state of Alabama would not further California’s interest in controlling the permissive use of vehicles within California’s borders and in compensating accident victims injured on California roadways.

 

California, however, does have a legitimate governmental interest in having its permissive user statute applied based on Castro’s status as a California resident. Application of that statute to circumstances such as these would serve to ensure that California residents injured in traffic accidents in other states would be compensated for their injuries and not become dependent on the resources of California for necessary medical, disability, and unemployment benefits.

 

Although Castro’s individual financial circumstance and the possible cost to California taxpayers and businesses are legitimate concerns for California, they are not sufficient to reallocate Alabama’s and California’s “  ‘ respective spheres of law making influence.’  ” (Offshore, supra, 22 Cal.3d at p. 165, 148 Cal.Rptr. 867, 583 P.2d 721.)In Offshore, the California plaint

© 2017 Central Analysis Bureau