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Flores v. Enterprise Rent-A-Car Co.

September 22, 2010


APPEAL from judgments of the Superior Court of Los Angeles County, Robert A. Dukes, Judge. Affirmed. (Los Angeles County Super. Ct. No. KC051847).

The opinion of the court was delivered by: Willhite, Acting P. J.



Jesus and Concepcion Flores's son died after being struck by a car driven by Alexander Wadsworth Dederer, a customer of the defendant rental car companies, Enterprise Rent-A-Car Company (ERACC), and Enterprise Rent-A-Car Company of Los Angeles (ERAC-LA) (sometimes referred to collectively as the Enterprise defendants). Plaintiffs sued defendants for wrongful death and negligent entrustment of the vehicle, contending that an electronic check of Dederer's driving record would have revealed two arrests for driving under the influence within the previous 48 months, which should have resulted in defendants not renting the car to Dederer. Plaintiffs contend electronic drivers' license checks are routinely performed in the car rental industry, and by failing to perform one on Dederer, defendants breached their duty of reasonable care. Plaintiffs argue on appeal that the trial court therefore erred in granting summary judgment in favor of the Enterprise defendants.

In this case, we consider whether rental car companies have a duty to use electronic drivers' license checks to screen their clients' driving records, before entrusting a vehicle to them. In the seminal case of Osborn v. Hertz Corp. (1988) 205 Cal.App.3d 703, the court held that in order to avoid liability for negligent entrustment, a rental car company must determine that a potential customer possesses a valid driver's license (see Veh. Code, §§ 14604 & 14608), and must not rent a car to a person who appears to be mentally or physically impaired or shows other signs of incompetence. The necessity of using drivers' license checks was not considered in Osborn. We conclude here that the duty owed by rental car companies articulated in Osborn remains an accurate statement of the law, regardless of the availability of electronic driver's license checks. The Legislature has defined the conduct required of rental car companies to determine the validity of customers' licenses, and it is not the province of the courts to supersede the Legislature's choice by imposing additional duties. We therefore affirm the judgments entered in favor of the Enterprise defendants. Because we find that plaintiffs have not alleged any breach of duty that was owed by these defendants, we need not discuss various other issues briefed by the parties, including issues of causation and whether ERACC is the alter ego of ERAC-LA.

Factual and Procedural Background

The Complaint

Plaintiffs filed the operative second amended complaint in August 2008, alleging causes of action against the Enterprise defendants for wrongful death (a survivorship claim), negligent entrustment, and punitive damages. They alleged that the standard of practice in the rental car industry was to screen potential renters for past convictions for driving under the influence (DUI) of drugs or alcohol, and to refuse to rent a vehicle to a potential client if he or she had one conviction within the previous 48 months. According to plaintiffs, the defendants "knew or should have known that persons with DUI convictions in the past 48 months posed an unreasonable risk of harm to those using the California roadways," but nonetheless adopted a corporate policy of not performing such checks. Plaintiffs alleged that the Enterprise defendants analyzed the cost of performing electronic driver's license checks, and concluded the cost was greater than the cost of paying for the losses caused by such drivers being involved in accidents. According to plaintiffs, the Enterprise defendants' decision not to check drivers' histories was made with a conscious disregard for the foreseeable harm which resulted in the death of their son. Dederer had prior DUI convictions in the last 48 months, and the Enterprise defendants should have known this information and should have declined to rent the vehicle to Dederer.

The Motion for Summary Adjudication Filed by ERAC-LA

ERAC-LA filed a motion for summary adjudication of issues, contending that plaintiffs' negligent entrustment cause of action failed because ERAC-LA had no duty to screen Dederer for prior DUI convictions, and no duty to refuse to rent to him because of his prior DUI convictions. ERAC-LA pointed out that the Legislature requires rental car companies to ascertain that a potential renter has a valid license, but also specifies that the rental car company need not check Department of Motor Vehicle records to verify the validity of licenses. (§§ 14604, 14608.) It further asserted that a potential renter's having prior DUI convictions does not render that driver unfit to drive as a matter of law. ERAC-LA also argued that even assuming the standard of care in the rental car industry was to investigate potential renter's driving histories and to refuse to rent to people with DUI convictions in the past 48 months, the existence of that standard of care would not create a legal duty on its part. Finally, ERAC-LA asserted that Dederer was not driving under the influence at the time of the accident, and therefore plaintiffs could not establish legal causation in support of their cause of action for negligent entrustment.

ERAC-LA acknowledged, however, that it could still be liable to plaintiffs based on "statutory ownership liability" pursuant to Vehicle Code section 17150.

In its separate statement of undisputed facts, ERAC-LA set forth that it, through its fictitious business name of Enterprise Leasing Company of Nevada, was the owner of the car driven by Dederer at the time of the accident. Dederer presented ERAC-LA with his California driver's license, which was valid. At the time of renting the car, Dederer showed no signs of being under the influence of alcohol. Dederer struck Diego Flores when he looked down to adjust his stereo. He displayed no signs of being under the influence of any substance at the scene of the accident. He was not under the influence of alcohol at the time of the accident, and was not charged with driving under the influence of drugs or alcohol as a result of the accident.

In response to a demand to provide all facts in support of the contention that the standard of care in the industry required ERAC-LA to screen Dederer for prior DUI convictions, plaintiffs had simply stated as fact that the standard in the industry was to perform a driver's license record check.

The Motion for Summary Judgment Filed by ERACC

ERACC asserted it was entitled to summary judgment for two reasons: it was not the owner of the rental car driven by Dederer and was not a party to the rental agreement, and in any event it could not be liable for failure to require ERAC-LA to conduct electronic driver history searches because there is no legal duty to investigate the driving history of a person with a valid driver's license.

Plaintiffs' Motion to File Confidential Documents Under Seal

Plaintiffs filed a motion seeking an order allowing them to file under seal certain confidential documents which were the subject of a stipulated protective order approved by the court. ERACC joined in the plaintiffs' motion. The court granted the motion and placed under seal ...

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