Snyder v. Enterprise Rent-a-Car, San Lfrancisco

• Decision Date: 17 February 2005
• Docket Number: No. C 03-4234(BZ).,C 03-4234(BZ).
• Citation: 392 F.Supp.2d 1116
• Parties: Dale SNYDER, et al., Plaintiffs, v. ENTERPRISE RENT-CAR COMPANY, et al., Defendants.
• Court: U.S. District Court — Northern District of California

392 F.Supp.2d 1116

Dale SNYDER, et al., Plaintiffs, v. ENTERPRISE RENT-CAR COMPANY, et al., Defendants.

No. C 03-4234(BZ).

United States District Court, N.D. California.

February 17, 2005.

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Steven Bauer, Deepa Shailesh Vora, Latham & Watkins LLP, Jennifer L. Scafe, U.S. Securities & Exchange Commission, San Francisco, CA, Thomas Duley, Latham & Watkins, Menlo Park, CA, for Plaintiffs.

Dominique R. Shelton, Thomas P. Laffey, Folger Levin & Kahn LLP, Los Angeles, CA, Robert B. Hunter, Jeffery Richard Vincent, Esq., Martin T. Snyder, Snyder, Cornelius & Hunter, Pleasant Hill, CA, Janine Laura Scancarelli, Folger Levin & Kahn LLP, San Francisco, CA, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR SUMMARY ADJDICATION AND FOR SUMMARY JUDGMENT; GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, PARTIAL SUMMARY JUDGMENT

(Docket Nos. 76, 86, 98)

CHESNEY, District Judge.

Before the Court are the motions of (1) defendants Enterprise Rent-A-Car Company of San Francisco ("ERAC-SF"), Enterprise Rent-A-Car ("ERAC"), and ELCO Administrative Services Company ("ELCO") for summary judgment or, in the alternative, partial summary judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure, and (2) plaintiffs Dale Snyder and Michael Snyder for summary adjudication of the issue of negligence as to Counts I and II, as to all defendants, and for summary judgment on Count IV, as to ERAC—SF and ERAC, pursuant to Rule 56. Having considered the papers filed in support of and in opposition to the motions, the Court rules as follows.¹

BACKGROUND

On August 18, 2002, Marc Holland ("Holland") rented a 2002 Ford Escort from ERAC-SF. (See Duley Decl., filed October 22, 2004, Ex. 5; Watt Decl., filed November 5, 2004, Ex. B.) At the time Holland rented the subject vehicle, his driver's license was suspended. (See Pls.' Req. for Judicial Notice, filed October 22, 2004, Ex. 2; Defs.' Req. for Judicial Notice, filed November 5, 2004, Ex. A; Defs.' Req. for Judicial Notice Ex. A.)² On August 25, 2002, Brooke Snyder was killed as a result of injuries sustained when, while walking across Lombard Street in San Francisco, she was struck by Holland as he was driving the rented vehicle. (See Pls.' Req. for Judicial Notice, filed October 22, 2004, Ex. 5; Defs.' Req. for Judicial Notice, filed November 5, 2004, Ex. B.)³ On January 23, 2004, Holland pleaded guilty to violating the California Vehicle Code by, on August 25, 2002, driving under the influence of alcohol, a drug, and the combined influence of alcohol and a drug, and by driving with 0.08 percent, or more, by weight, of alcohol in his blood. (See Pls.' Req. for Judicial Notice, filed October 22, 2004, Exs. 3, 4.)⁴

Plaintiffs, who are the parents and successors in interest of the decedent, (see First Amended Complaint ¶ 1), allege that defendants are liable for the death of the decedent. In the First Amended Complaint ("FAC"), plaintiffs allege four claims against each defendant: (1) Personal Injury

and Property Damages, based on the theory that the decedent sustained injury as a result of defendants' negligent entrustment of the vehicle to Holland; (2) Wrongful Death, based on the theory plaintiffs sustained injury as a result of the negligent entrustment; (3) Permissive Use, based on the theory that defendants are vicariously liable for the negligence of Holland; and (4) Unfair Competition, based on the theory that defendants have a practice of renting vehicles to unlicensed drivers.

LEGAL STANDARD

Rule 56 provides that a court may grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." See Fed.R.Civ.P. 56(c).

The Supreme Court's 1986 "trilogy" of Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), and Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), requires that a party seeking summary judgment show the absence of a genuine issue of material fact. Once the moving party has done so, the nonmoving party must "go beyond the pleadings and by her own affidavits, or by the 'depositions, answers to interrogatories, and admissions on file,' designate 'specific facts showing that there is a genuine issue for trial.'" See Celotex, 477 U.S. at 324, 106 S.Ct. 2548 (quoting Rule 56(c)). "When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586, 106 S.Ct. 1348. "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Liberty Lobby, 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted). When determining whether there is a genuine issue for trial, "`inferences to be drawn from the underlying facts . . . must be viewed in the light most favorable to the party opposing the motion.'" See Matsushita, 475 U.S. at 587, 106 S.Ct. 1348 (quoting United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962)).

DISCUSSION

Defendants argue that they are entitled to summary judgment on all of plaintiffs' claims. Plaintiffs argue that they are entitled to summary adjudication, as to all defendants, on the issue of defendants' negligence, and, as to defendants ERAC and ERAC—SF, summary judgment on the unfair competition claim.

A. Counts I and II (Negligent Entrustment)

In Counts I and II, plaintiffs allege defendants were negligent when they rented a vehicle to Holland, a person with a suspended license. Under California law,⁵ "one who places or entrusts his or her

motor vehicle in the hands of one whom he or she knows, or from the circumstances is charged with knowing, is incompetent or unfit to drive, may be held liable for an injury inflicted by the use made thereof by that driver." See Osborn v. Hertz Corp., 205 Cal.App.3d 703, 708, 252 Cal.Rptr. 613 (1988) (internal quotation, alterations, and citation omitted). Here, plaintiffs seek to impose liability for negligent entrustment under two theories. First, plaintiffs contend that defendants were negligent per se when they violated a statute precluding the rental of a vehicle to a person without a valid license. Second, plaintiffs contend that, irrespective of any statutory violation, circumstances existed from which defendants knew or should have known that Holland was unfit to drive.

In their motion, plaintiffs argue that they are entitled to summary adjudication of the issue of negligence per se as to defendants ERAC and ERAC—SF, and are entitled to summary adjudication of the issue of common law negligence as to all defendants. In their motion, defendants argue that ERAC and ELCO are entitled to summary judgment because there is no evidence either of those two defendants entrusted the subject vehicle to Holland, and that ERAC—SF is entitled to summary judgment because there is no evidence it acted negligently or, alternatively, that any negligence by ERAC-SF was not a cause of the decedent's death. Finally, in the event plaintiffs demonstrate defendants can be held liable for negligence, defendants argue, they are entitled to summary judgment on plaintiffs' claim for punitive damages.

1. ERAC and ELCO

It is undisputed that, at the time of the rental and the accident, the subject vehicle Holland rented was owned by ERAC—SF, (see Watt Decl., filed November 5, 2004, ¶ 5, Ex. A) and that Holland rented the vehicle from ERAC—SF, (see id. ¶ 6, 252 Cal.Rptr. 613, Ex. B). It is also undisputed that ERAC—SF is a wholly owned subsidiary of ERAC, (see Duley Decl., filed October 22, 2004, Ex. 1 at 9:17-19), and that ELCO is ERAC's "insurance subsidiary," (see Rogers Dep.⁶ at 23:4-5).

Defendants argue that ERAC and ELCO, as a matter of law, cannot be liable under a theory of negligent entrustment because neither ERAC nor ELCO rented or otherwise supplied the vehicle to Holland. Plaintiffs respond that a triable issue of fact exists as to whether ERAC and ELCO were "integral participants" in the rental by ERAC—SF, and, consequently, are liable for their own conduct with respect to the rental to Holland. (See Pls.' Opp. to Defs.' Mot. for Summ. J, filed November 23, 2004, at 6:11-12.)⁷

Plaintiffs offer evidence that ERAC operates a centralized rental and reservation system, specifically, that ERAC operates a website on which reservations can be made at locations throughout the United States and other countries, (see Duley Decl., filed November 19, 2004, Ex. 38), and that when ERAC's subsidiary ERAC—SF engages in a rental transaction with a customer,

ERAC-SF uses computer terminals to access ERAC's software, known as "ECARS," to accomplish the rental transaction, (see Rogers Dep. at 25-26; Sinclair Dep.⁸ at 67). Plaintiffs also offer evidence that ERAC maintains, as part of the ECARS software program, a nationwide "do-not-rent" list, (see Rogers Dep. at 33), which ERAC-SF has the ability to update to include the names of ERAC-SF customers who, inter alia, "had too many accidents in a short period of time with [ERAC—SF] vehicles," who "allowed an unauthorized driver to use the vehicle," and/or who drove an ERAC-SF vehicle on a suspended or revoked license, (see Sinclair Dep. at 60-62). Plaintiffs further offer evidence that ERAC has evaluated the use of electronic verification systems to check the validity of driver's licenses with the DMV, but has not recommended that its subsidiaries employ such a system. (See Kaplan Dep.⁹ at 60, 169.)

The above evidence, viewed in the light most favorable to plaintiffs,...