CRST, Inc. v. Superior Court of L. A. Cnty.

• Decision Date: 26 May 2017
• Docket Number: B280270
• Citation: 11 Cal.App.5th 1255,218 Cal.Rptr.3d 664
• Court: California Court of Appeals Court of Appeals
• Parties: CRST, INC., et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent; Matthew John Lennig et al., Real Parties in Interest.

11 Cal.App.5th 1255

218 Cal.Rptr.3d 664

CRST, INC., et al., Petitioners,

v. The SUPERIOR COURT of Los Angeles County, Respondent;Matthew John Lennig et al., Real Parties in Interest.

B280270

Court of Appeal, Second District, Division 4, California.

Filed May 26, 2017

As Modified June 19, 2017

Bassl, Edlin, Huie & Blum, Fred M. Blum, San Francisco, Michael E. Gallagher, and Lisa M. Stevenson, Los Angeles; Greines, Martin, Stein & Richland, San Francisco, Robert A. Olson, Cynthia E. Tobisman, and Alan Diamond ; Yoka & Smith, Christopher E. Faenza, and Benjamin A. Davis, Los Angeles, for Petitioners.

Parris Law Firm, R. Rex Parris, Lancaster, Bruce L. Schechter, Los Angeles, and Khail A. Parris, Lancaster; Grignon Law Firm, Margaret M. Grignon, Long Beach, and Anne M. Grignon for Real Parties In Interest.

MANELLA, J.

This case arises from a vehicular accident in which a freightliner driven by petitioners' employee struck a vehicle, causing serious injuries to the passengers, real parties in interest Matthew and Michael Lennig. The Lennigs brought negligence claims against the employee and petitioners and sought punitive damages. After admitting vicarious liability for any negligence by their employee, petitioners sought summary adjudication on claims against them for negligent hiring and entrustment, contending that under Diaz v. Carcamo (2011) 51 Cal.4th 1148, 126 Cal.Rptr.3d 443, 253 P.3d 535 (Diaz ), their acknowledgment of vicarious liability barred such claims. Additionally, both petitioners and the employee sought summary adjudication on the requests for punitive damages. The trial court granted summary adjudication in favor of the employee as to the request for punitive damages against him, but denied petitioners' motion for summary adjudication in its entirety.

Petitioners sought writ relief, challenging the trial court's denial of summary adjudication only as to the Lennigs' requests for punitive damages. We conclude that petitioners' admission of vicarious liability does not bar recovery of punitive damages, but further conclude there are no triable issues of fact which, if resolved in the Lennigs' favor, could subject petitioners to punitive damages. Accordingly, we grant the petition for writ of mandate.

FACTUAL AND PROCEDURAL BACKGROUND

In 2014, Hector Contreras was employed as a truck driver by petitioners CRST, Inc., CRST Expedited, Inc., CRST Van Expedited, Inc., and CRST Lincoln Sales, Inc. (CRST). On July 7, 2014, he drove a CRST freightliner on the Interstate 14 freeway. As he passed through a construction area known as the Red Rock Canyon Bridge project, he collided with a car containing Matthew and Michael Lennig.

Following the accident, CRST terminated Contreras.

In March 2015, the Lennigs initiated the underlying personal action. Their third amended complaint (TAC), filed July 5, 2016, contained claims for negligence and loss of consortium against Contreras, CRST, and other defendants. Of those claims, only the following are pertinent here: the first cause of action against Contreras and CRST for negligent operation of a motor vehicle; the fourth cause of action against CRST for negligent hiring, supervision, and retention; the fifth cause of action against Contreras for negligent infliction of emotional distress; and the seventh cause of action against CRST for negligent entrustment.¹ Each claim included a request for punitive damages.

Contreras sought summary adjudication on the request for punitive damages accompanying the first and fifth causes of action, and CRST separately sought summary adjudication on the fourth and seventh causes of action and the requests for punitive damages accompanying the first, fourth, and seventh causes of action. Contreras contended the requests for punitive damages against him failed for want of evidence to support the TAC's key allegation regarding those requests, namely, that he was intoxicated when the collision occurred. CRST maintained that under Diaz , the fourth and seventh causes of action should be dismissed because CRST admitted vicarious liability for any negligent driving by Contreras. CRST also challenged the requests for punitive damages, arguing that its conduct did not meet the standards for an award of punitive damages, as set forth in Civil Code section 3294.²

The trial court granted summary adjudication in Contreras's favor, concluding that no triable issues existed whether he was under the influence of drugs or alcohol at the time of the collision, but denied CRST's motion for summary adjudication in its entirety. On January 23, 2017, CRST filed its petition for writ of mandate, prohibition, or other relief, challenging the trial court's denial of summary adjudication only as to the requests for punitive damages. We issued an alternative writ of mandate directing the court's and parties' attention to Diaz , and imposed a temporary stay.

DISCUSSION

CRST contends the trial court erred in denying summary adjudication on the requests for punitive damages against it accompanying the first, fourth, and seventh causes of action. CRST asserts (1) that Diaz bars the recovery of punitive damages in view of CRST's acceptance of vicarious liability, and (2) that there are no triable issues regarding the propriety of an award of punitive damages under section 3294. As explained below, we reject CRST's contention regarding Diaz , but agree with its second contention.

A. Standard of Review

"An order denying a motion for summary adjudication may be reviewed by way of a petition for writ of mandate. [Citation.] Where the trial court's denial of a motion for summary judgment will result in trial on non-actionable claims, a writ of mandate will issue. [Citations.] Likewise, a writ of mandate may issue to prevent trial of non-actionable claims after the erroneous denial of a motion for summary adjudication.

[¶] Since a motion for summary judgment or summary adjudication ‘involves pure matters of law,’ we review a ruling on the motion de novo to determine whether the moving and opposing papers show a triable issue of material fact. [Citations.] Thus, the appellate court need not defer to the trial court's decision. ‘ "We are not bound by the trial court's stated reasons, if any, supporting its ruling; we review the ruling, not its rationale." '³ [Citations.]" (Travelers Casualty & Surety Co. v. Superior Court (1998) 63 Cal.App.4th 1440, 1450, 75 Cal.Rptr.2d 54.)

B. Governing Principles

Because the key issues before us concern the extent to which CRST's admission of vicarious liability shields it from an award of punitive damages, we examine the principles governing an employer's vicarious liability for damages. Under the doctrine of respondeat superior, "an employer is vicariously liable for the torts of its employees committed within the scope of the employment." (Lisa M. v. Henry Mayo Newhall Memorial Hospital (1995) 12 Cal.4th 291, 296, 48 Cal.Rptr.2d 510, 907 P.2d 358.) The employer is thus liable for the compensatory damages attributable to the employee's misconduct, even when the employer is "innocent" of fault. (Miller v. Stouffer (1992) 9 Cal.App.4th 70, 84, 11 Cal.Rptr.2d 454, italics omitted.) The rationale for the doctrine closely parallels the justification for imposing strict products liability on nonnegligent product manufacturers. (Far West Financial Corp. v. D & S Co. (1988) 46 Cal.3d 796, 813, fn. 13, 251 Cal.Rptr. 202, 760 P.2d 399.) As our Supreme Court has explained, " ‘[t]he losses caused by the torts of employees, which as a practical matter are sure to occur in the conduct of the employer's enterprise, are placed upon that enterprise itself, as a required cost of doing business.’ " (Ibid ., quoting Prosser & Keeton on Torts (1984) § 69, p. 500 [fns. omitted].)

The special features of vicarious liability determine the employer's share of liability for compensatory damages under the comparative fault system, which allocates liability for tort damages in direct proportion to fault.⁴ (Diaz , supra , 51 Cal.4th at pp. 1152, 1156, 126 Cal.Rptr.3d 443, 253 P.3d 535.) As noted above, the respondeat superior doctrine attributes liability for compensatory damages to an employer, independent of any fault on the employer's part. Accordingly, within the comparative fault system, when an employer is liable solely on a theory of respondeat superior, "the employer's share of liability for the plaintiff's damages corresponds to the share of fault that the jury allocates to the employee." (Id . at p. 1157, 126 Cal.Rptr.3d 443, 253 P.3d 535.)

In contrast, under the respondeat superior doctrine, the employer is not liable for punitive damages absent fault or misconduct on the employer's part. (College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 724, fn. 11, 34 Cal.Rptr.2d 898, 882 P.2d 894 (College Hospital ); Weeks v. Baker & McKenzie (1998) 63 Cal.App.4th 1128, 1155, 74 Cal.Rptr.2d 510 (Weeks ); Merlo v. Standard Life & Acc. Ins. Co. (1976) 59 Cal.App.3d 5, 18, 130 Cal.Rptr. 416 (Merlo ).) Unlike compensatory damages, which seek to make the plaintiff whole, punitive damages are intended to deter general types of misconduct. (College Hospital , supra , 8 Cal.4th at p. 712, 34 Cal.Rptr.2d 898, 882 P.2d 894.) California courts have long held that punitive damages may, under appropriate circumstances, be recoverable for nondeliberate or unintentional torts, including actions in which the theory of recovery for compensatory damages from the defendant is based on strict products liability (Grimshaw v. Ford Motor Co. (1981) 119 Cal.App.3d 757, 810, 174 Cal.Rptr. 348 (Grimshaw )) or vicarious liability (see Merlo , supra , 59 Cal.App.3d at p. 18, 130 Cal.Rptr. 416 ). Accordingly, upon a suitable demonstration of employer misconduct, a vicariously liable employer may be subject to an award of punitive damages when an employee was negligent. (Farvour v. Geltis (1949) 91 Cal.App.2d 603, 604–606, 205 P.2d 424 ; see Nolin v. National Convenience Stores, Inc. (1979...