Diaz v. Carcamo

• Decision Date: 24 August 2011
• Docket Number: No. S181627.,S181627.
• Court: California Supreme Court
• Parties: Dawn Renae DIAZ, Plaintiff and Respondent,v.Jose CARCAMO et al., Defendants and Appellants.

51 Cal.4th 1148

253 P.3d 535

126 Cal.Rptr.3d 443

76 Cal. Comp. Cases 637

11 Cal. Daily Op. Serv. 7807

2011 Daily Journal D.A.R. 9280

Dawn Renae DIAZ, Plaintiff and Respondent,

v.Jose CARCAMO et al., Defendants and Appellants.

No. S181627.

Supreme Court of California

June 23, 2011.Rehearing Denied Aug. 24, 2011.

OPINION TEXT STARTS HERE Sonnenschein Nath & Rosenthal, SNR Denton US, Paul E.B. Glad, David R. Simonton, San Francisco; Jones Day, Elwood Lui, Los Angeles, and Peter E. Davids, San Francisco, for Defendants and Appellants. Horvitz & Levy, H. Thomas Watson and Karen M. Bray, Encino, for The California Association of Counties Excess Insurance Authority, Association of California Insurance Companies and The American Insurance Association as Amici Curiae on behalf of Defendants and Appellants.Fred J. Hiestand, Sacramento, and Erika C. Frank for The California Chamber of Commerce and The Civil Justice Association of California as Amici Curiae on behalf of Defendants and Appellants.Harmeyer Law Group, Jeff G. Harmeyer, San Diego, for Jeld–Wen, Inc., and California Trucking Association as Amici Curiae on behalf of Defendants and Appellants.Grassini & Wrinkle and Roland Wrinkle, Woodland Hills, for Plaintiff and Respondent.KENNARD, J. [1] A person injured by someone driving a car in the course of employment may sue not only the driver but that driver's employer. The employer can be sued on two legal theories based on tort principles: respondeat superior and negligent entrustment. Respondeat superior, a form of vicarious liability, makes an employer liable, irrespective of fault, for negligent driving by its employee in the scope of employment. The theory of negligent entrustment makes an employer liable for its own negligence in choosing an employee to drive a vehicle.

If, as here, a plaintiff asserts both theories, and the employer admits vicarious liability for any negligent driving by its employee, can the plaintiff still pursue the negligent entrustment claim? The answer is “no,” as we held in Armenta v. Churchill (1954) 42 Cal.2d 448, 267 P.2d 303 ( Armenta ). The Court of Appeal here held to the contrary. Armenta, it concluded, is inconsistent with this state's current system of allocating liability for tort damages based on comparative fault—a system created by decisions of this court in the 1970's and by the California electorate's later adoption of the Fair Responsibility Act of 1986 (Proposition 51). We disagree with the Court of Appeal. We therefore reverse that court's judgment and remand for a new trial.

I

Plaintiff Dawn Renae Diaz was driving south on U.S. Highway 101 near Camarillo, Ventura County. Defendant Jose Carcamo, a truck driver for defendant Sugar Transport of the Northwest, LLC, was driving north in the center of three lanes. Defendant Karen Tagliaferri, driving in the center lane behind Carcamo, moved to the left lane to pass him. As Tagliaferri, without signaling, pulled back into the center lane, her vehicle hit Carcamo's truck, spun, flew over the divider, and hit plaintiff's SUV. Plaintiff sustained severe, permanent injuries.

Plaintiff sued Tagliaferri, Carcamo, and Sugar Transport. She alleged that Carcamo and Tagliaferri had driven negligently and that Sugar Transport was both vicariously liable for employee Carcamo's negligent driving and directly liable for its own negligence in hiring and retaining him. In their answer, Carcamo and Sugar Transport denied any negligence.

At trial, plaintiff's expert witness testified that Carcamo should have been in the right lane, should have monitored his mirrors better, and should have averted a collision by slowing or steering away as Tagliaferri entered his lane. Plaintiff's counsel argued that Carcamo sped up to keep Tagliaferri from passing, noting Sugar Transport's failure to produce the chart from the truck's tachograph, which would have recorded Carcamo's speed, acceleration, and braking. But another driver, who was the only nonparty witness to the collision between Carcamo and Tagliaferri, testified that Carcamo had not accelerated. With respect to defendant Tagliaferri, her counsel conceded that she was partly at fault; defendants Sugar Transport and Carcamo contended that she alone was at fault.

Defendant-employer Sugar Transport offered to admit vicarious liability if its employee Carcamo was found negligent. That admission, Sugar Transport argued, would bar plaintiff from further pursuing her claims for negligent entrustment, hiring, and retention. In support, Sugar Transport cited Jeld–Wen, Inc. v. Superior Court (2005) 131 Cal.App.4th 853, 32 Cal.Rptr.3d 351 ( Jeld–Wen ), in which a Court of Appeal, applying our holding in Armenta, supra, 42 Cal.2d 448, 267 P.2d 303, directed a trial court to dismiss a negligent entrustment claim after the defendant employer's admission of vicarious liability for its employee's driving.

Over defendant-employer Sugar Transport's objection, the trial court here admitted evidence of Carcamo's driving and employment history, as offered by plaintiff in support of her negligent hiring claim. The evidence showed two prior accidents involving Carcamo: one in which he was at fault and was sued, the other occurring only 16 days before the accident here. Other evidence showed that Carcamo was in this country illegally and had used a “phony” Social Security number to obtain employment, that he had been fired from or quit without good reason three of his last four driving jobs, that he had lied in his application to work for Sugar Transport, and that, when Sugar Transport had sought information from Carcamo's prior employers, the lone response gave him a very negative evaluation.

Sugar Transport opposed instructing the jury on plaintiff's negligent retention and hiring claims, arguing that its offer to admit vicarious liability barred such instructions. It also sought a mistrial, claiming the prior-accident evidence had been highly prejudicial. Its efforts failed. Before closing arguments, Sugar Transport stipulated with plaintiff to vicarious liability for employee-driver Carcamo's negligence, if any.

The jury found that defendants Tagliaferri and Carcamo had driven negligently, that defendant Sugar Transport had been negligent in hiring and retaining Carcamo as a driver, and that the retention was a cause of plaintiff's injuries. The jury allocated fault for the accident among all three defendants: 45 percent to Tagliaferri, 35 percent to Sugar Transport, and 20 percent to Carcamo. It awarded plaintiff over $17.5 million in economic damages and $5 million in noneconomic damages. The trial court entered a judgment in the form required by the Fair Responsibility Act of 1986, enacting Civil Code sections §§ 1431.1–1431.5 and amending section 1431 (Proposition 51). Under the judgment, Tagliaferri and Sugar Transport were each jointly liable for all of plaintiff's economic damages but only severally liable for part of her noneconomic damages—Tagliaferri for 45 percent and Sugar Transport for 55 percent (its 35 percent plus its employee Carcamo's 20 percent).

The Court of Appeal affirmed. It acknowledged our 1954 holding in Armenta, supra, 42 Cal.2d 448, 267 P.2d 303, that if an employer admits vicarious liability for its employee's negligent driving, a plaintiff cannot rely on a negligent entrustment claim to introduce evidence of the employee's driving record. It also recognized that in Jeld–Wen, supra, 131 Cal.App.4th 853, 32 Cal.Rptr.3d 351, another Court of Appeal had applied Armenta in directing dismissal of a negligent entrustment claim. The Jeld–Wen court rejected a claim that Armenta, which was decided “in 1954, before the 1970's development of comparative negligence rules,” had been “adversely affected” by those rules. ( Jeld–Wen, supra, at pp. 870–871, 32 Cal.Rptr.3d 351.) The Court of Appeal here distinguished Armenta because it involved negligent entrustment rather than negligent hiring and it did not involve an allocation of comparative fault. And in disagreeing with Jeld–Wen, the Court of Appeal here stated (mistakenly) that Jeld–Wen had not “purport[ed] to deal with the allocation of fault required by Proposition 51.”

Because the Court of Appeal's decision here conflicts with that in Jeld–Wen, supra, 131 Cal.App.4th 853, 32 Cal.Rptr.3d 351, and casts doubt on the viability of our holding in Armenta, supra, 42 Cal.2d 448, 267 P.2d 303, we granted the petition for review of defendants Sugar Transport and Carcamo.

II

Defendants contend the Court of Appeal erred in holding that this court's adoption of a comparative fault-based system for allocating tort liability (see Li v. Yellow Cab Co. (1975) 13 Cal.3d 804, 119 Cal.Rptr. 858, 532 P.2d 1226 ( Li )) has undermined our holding in Armenta, supra, 42 Cal.2d 448, 267 P.2d 303. Under Armenta, they argue, employer Sugar Transport's offer to admit vicarious liability for any negligence of its employee-driver Carcamo required the trial court to withhold plaintiff's negligent hiring and retention claims from the jury, and to exclude the evidence plaintiff offered to support those claims, such as Carcamo's poor driving record and employment history, his dishonesty, and his status as an illegal alien and resultant use of a “phony” Social Security number to obtain employment. We agree, as explained below.

The respondeat superior doctrine makes an employer liable, irrespective of fault, for an employee's tortious conduct in the scope of employment. ( Mary M. v. City of Los Angeles (1991) 54 Cal.3d 202, 209, 285 Cal.Rptr. 99, 814 P.2d 1341.) Such vicarious liability was at issue in Armenta, supra, 42 Cal.2d 448, 267 P.2d 303. In that case, as truck driver Dale Churchill was backing up, he hit a man, killing him. The man's survivors sued Dale and his wife, Alece, who owned the truck and employed Dale. ( Id. at p. 451, 267 P.2d 303.) The plaintiffs alleged that Dale had driven negligently in the scope of employment and that Alece, aware of Dale's...