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Snyder v. Enterprise Rent-A-Car Co.

February 17, 2005

DALE SNYDER, ET AL., PLAINTIFFS,
v.
ENTERPRISE RENT-A-CAR COMPANY, ET AL., DEFENDANTS



The opinion of the court was delivered by: Chesney, District Judge

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR SUMMARY ADJUDICATION 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)

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.*fn1

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.)*fn2 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.)*fn3 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.)*fn4

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,*fn5 "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.*fn6 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.)*fn7

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.*fn8 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.*fn9 at 60, 169.)

The above evidence, viewed in the light most favorable to plaintiffs, supports a finding that ERAC supplies its subsidiary ERAC-SF with software and other support to enable ERAC-SF to obtain reservations, to engage in rental transactions, and to maintain a list of persons to whom further rentals are ill-advised, and that ERAC is of the view that ERAC-SF need not electronically verify with the DMV the validity of driver's licenses.*fn10 Such evidence, however, does not support a finding that ERAC was the entity that rented or otherwise supplied the vehicle to Holland.

Plaintiffs also argue that both ERAC and ELCO should have added Holland to the nationwide "do-not-rent" list available to ERAC-SF, based on ERAC and ELCO's knowledge of a February 2001 accident in which Holland had been involved while driving an ERAC-SF vehicle.*fn11 Plaintiffs reason that because neither ERAC nor ELCO added Holland to the do-not-rent list after the February 2001 accident, each of them is responsible, by way of omission, for ERAC-SF's renting the subject vehicle to Holland. Plaintiffs, however, offer no evidence that ELCO has the ability to add anyone to the do-not-rent list. Plaintiffs also fail to offer any evidence that the type of minor accident in which Holland was involved, in February 2001, is the type of accident that normally would have caused ERAC to place the driver on the do-not-rent list. Further, plaintiffs fail to advance an adequate basis for the Court to recognize a duty on the part of ERAC or ELCO to place an individual who has a minor accident on a do-not-rent list.

Accordingly, because plaintiffs have not shown the existence of a triable issue of fact as to either ERAC or ELCO's having directly entrusted the subject vehicle to Holland, or a duty on the part of ERAC or ELCO to place Holland on the do-not-rent list, defendants are entitled to summary judgment in favor of ERAC and ELCO on Count I and Count II, and plaintiffs are not entitled to summary adjudication with respect to ERAC or ELCO on the issue of negligence.

2. ERAC-SF

As noted, it is undisputed that ERAC-SF entrusted a vehicle to Holland. Plaintiffs allege such entrustment was negligent, both under a per se theory and under a common law theory.

a. Negligence Per Se

Under California law, "proof of the defendant's violation of a statutory standard of conduct raises a presumption of negligence that may be rebutted only by evidence establishing a justification or excuse for the statutory violation." See Ramirez v. Plough, Inc., 6 Cal.4th 539, 547, 25 Cal.Rptr.2d 97, 863 P.2d 167 (1993).

Here, plaintiffs argue the relevant statutory standard of conduct for car rental companies is set forth in § 14608(a). Section 14608 provides:

No person shall rent a motor vehicle to another unless:

(a) The person to whom the vehicle is rented is licensed under this code or is a nonresident who is licensed under the laws of the state ...


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