Chen v. L. A. Truck Ctrs., LLC
| Decision Date | 22 July 2019 |
| Docket Number | S240245 |
| Court | California Supreme Court |
| Parties | HAIRU CHEN et al., Plaintiffs and Appellants, v. LOS ANGELES TRUCK CENTERS, LLC, Defendant and Respondent. |
Law Offices of Martin N. Buchanan, Martin N. Buchanan, Oceanside; Girardi & Keese and David R. Lira, Los Angeles, for Plaintiffs and Appellants.
Shook, Hardy & Bacon, Frank C. Rothrock, Douglas W. Robinson, Douglas W. Robinson, Irvine, and Kevin Underhill, San Francisco, for Defendant and Respondent.
In this tort action arising out of a fatal tour bus accident in Arizona, the parties initially included plaintiffs from China and defendants from both Indiana and California. Asked to decide which jurisdiction’s law applied to the case, the trial court conducted the governmental interest test (see Reich v. Purcell (1967) 67 Cal.2d 551, 63 Cal.Rptr. 31, 432 P.2d 727 ( Reich )) and concluded that Indiana law governed. Before trial, however, the plaintiffs accepted a settlement offer from the Indiana manufacturer of the tour bus and dismissed that defendant from the case. We granted review to determine if the trial court should have reconsidered the previous choice of law ruling after that Indiana defendant was no longer a party.
For reasons that follow, we conclude that the trial court was not required to reconsider the prior choice of law ruling based on the party’s settlement. Because the trial court did not err by declining to reconsider the ruling, we reverse the Court of Appeal’s judgment.
The underlying action concerns a rollover bus accident on October 17, 2010 in Meadview, Arizona. The bus passengers were ten Chinese tourists and their tour guide who were traveling from Las Vegas, Nevada for a day trip to the Grand Canyon in Arizona. The driver of the bus, Zhi Lu, a California resident, worked for TBE International, Inc. (TBE), a California tour company that owned and operated the 16-seat tour bus. Lu drove the bus from Los Angeles, California and picked up the Chinese tourists at their Las Vegas hotel.
While en route to the Grand Canyon, Lu drove the bus around a curve at a high rate of speed and lost control. The bus rolled over twice. The driver and tour guide were in the front seats, which were equipped with three-point seatbelts (lap and shoulder restraints). Neither suffered any serious injury in the accident. None of the passenger seats, however, were equipped with seatbelts of any kind. Two passengers were killed. One female passenger was impaled in the door mechanism; a male passenger was ejected from the bus and fatally fractured his skull
. Six other passengers were ejected from the bus and suffered injuries. The remaining two passengers, who were not ejected, sustained injuries as well.
In September 2011, the eight passengers and survivors of the two passengers who were killed (plaintiffs) filed an action in Los Angeles County Superior Court against two California-based defendants, the tour bus company TBE, and the distributor who sold the tour bus to TBE, Los Angeles Truck Centers, LLC dba Buswest (Buswest), a California corporation with multiple locations nationwide. Plaintiffs also sued the bus manufacturer, Forest River, Inc. (Forest River), an Indiana corporation that designed, manufactured, and modified the tour bus, and Starcraft, a division of Forest River. Because the parties have referred to the buses as "Starcraft buses," we refer to the manufacturer of the buses as Starcraft. Unless otherwise noted, references to Starcraft necessarily include Forest River.
In their operative second amended complaint, plaintiffs alleged causes of action for wrongful death, negligence, strict products liability, loss of consortium, and negligent infliction of emotional distress. That the driver, Lu, was at fault for the accident was not in dispute. The main theories of plaintiffs’ action were that Starcraft negligently designed and manufactured the bus and that Buswest chose to order the bus without seatbelts, which would have prevented the deaths and, at the very least, would have minimized the injuries of the passengers in the rollover crash.
In December 2012, TBE and Lu settled with plaintiffs for $5 million, in exchange for a full release of all claims against them. One year later, after the governing two-year statute of limitations had already run ( Code Civ. Proc., § 335.1 ), defendants Starcraft and Buswest (collectively, defendants) filed a "Joint Notice of Motion and Motion Regarding Choice of Law on Behalf of Defendants" to determine the choice of law. In that motion, defendants alleged that plaintiffs’ claims "potentially implicate" four different jurisdictions, i.e., Indiana, Arizona, China, and California. Defendants maintained that under the governmental interest test to determine the choice of law (see Reich , supra , 67 Cal.2d 551, 63 Cal.Rptr. 31, 432 P.2d 727 ), Indiana law applied. After considering the parties’ extensive briefing, the trial judge (Judge Kendig)1 granted defendants’ motion and concluded that Indiana law governed the case. Plaintiffs filed a writ of mandate challenging the trial court’s ruling on the choice of law, which the Court of Appeal denied based on plaintiffs’ failure to show entitlement to extraordinary relief.
In August 2014, the same month the trial was originally set to begin, plaintiffs settled with Starcraft for $3.25 million, and, over Buswest’s opposition, Judge Kendig granted Starcraft’s motion for good faith settlement ( Code Civ. Proc., § 877.6 ). After the settlement left California-based Buswest as the sole defendant, Buswest filed a motion for summary judgment under Indiana law, which the trial court denied. The trial court also denied plaintiffs’ request that it reconsider its choice of law ruling. The original trial date of August 18, 2014 was vacated, and the trial date was continued.
In November 2014, plaintiffs filed a "Motion in Limine No. 4 to Apply California Law," alleging that "[f]or choice-of-law purposes, plaintiffs’ settlement with the Indiana defendants has completely transformed the relevant legal landscape." On February 20, 2015, six weeks before trial was set to begin, a newly assigned trial judge (Judge Czuleger) denied the motion on procedural grounds, specifically declining to reconsider Judge Kendig’s choice of law ruling. Judge Czuleger opined that he would deny on the merits as well, noting that plaintiffs’ motion did not present "any new or different facts justifying a reconsideration." On a final note, Judge Czuleger added that a choice of law determination
After the jury was sworn in on April 9, 2015, the trial proceeded under Indiana products liability law, which imported a negligence standard in the definition of a defective product. (See Ind. Code § 34-20-2-1 []; id ., § 34-20-2-2 [].) Plaintiffs focused on Buswest’s decision to order the bus without the $12 lap belts. In its defense, Buswest contended its decision not to include seatbelts constituted an exercise of reasonable care because the federal National Highway Transportation Safety Administration standards did not require lap belts in this bus; the industry standard at the time was to not include seatbelts; and lap belts could cause serious injuries to passengers in frontal collisions, which were more common than rollover accidents.
In a vote of 10 to two, the jury rendered a defense verdict on April 27, 2015. It concluded that while Buswest was a manufacturer or seller of the bus under Indiana law, the bus was not in a "defective condition" at the time of the accident. Judgment was entered in favor of Buswest, and plaintiffs appealed.
The Court of Appeal reversed. First characterizing each side’s motion to determine the choice of law as a motion in limine, the Court of Appeal concluded that the trial court "should have fully reconsidered" the initial choice of law ruling because "once Starcraft had been dismissed from the case, any interest Indiana had in applying its law to Starcraft was no longer at issue." It did not, however, consider the correctness of the trial court’s initial choice of law ruling.
The Court of Appeal rejected Buswest’s contention that under Reich , supra , 67 Cal.2d 551, 63 Cal.Rptr. 31, 432 P.2d 727, the choice of law is fixed at the time of the accident. Rather, the court reasoned, "[t]he relevant interests cannot be accurately determined until the defendants, and the theories of liability alleged against them, are known—things that are only known for certain as the case gets closer to trial." The Court of Appeal applied the governmental interest test and determined that California law governed. Finding the error prejudicial, the court reversed the judgment and remanded for a new trial governed by California products liability law.
We granted review.
"Perhaps no legal subject has caused more consternation and confusion among the bench and bar than choice of law." (Smith, Choice of Law in the United States (1987) 38 Hastings L.J. 1041 (Smith) ; see Bernhard v. Harrah’s Club (1976) 16 Cal.3d 313, 321, 128 Cal.Rptr. 215, 546 P.2d 719 [].) ...
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