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Chen v. Los Angeles Truck Centers, LLC

Supreme Court of California

July 22, 2019

HAIRU CHEN et al., Plaintiffs and Appellants,
LOS ANGELES TRUCK CENTERS, LLC, Defendant and Respondent.

          Los Angeles County Superior Court BC469935 J. Stephen Czuleger and Holly E. Kendig judge

          Law Offices of Martin N. Buchanan, Martin N. Buchanan; Girardi & Keese and David R. Lira for Plaintiffs and Appellants.

          Shook, Hardy & Bacon, Frank C. Rothrock, Douglas W. Robinson, Janet L. Hickson and Kevin Underhill for Defendant and Respondent.

          Justice Chin authored the opinion of the Court, in which Chief Justice Cantil-Sakauye and Justices Corrigan, Liu, Cuéllar, Kruger, and Groban concurred.


          CHIN, J.

         In this tort action arising out of a fatal tour bus accident in Arizona, the parties initially included plaintiffs from China and defendants from both Indiana and California. Asked to decide which jurisdiction's law applied to the case, the trial court conducted the governmental interest test (see Reich v. Purcell (1967) 67 Cal.2d 551 (Reich)) and concluded that Indiana law governed. Before trial, however, the plaintiffs accepted a settlement offer from the Indiana manufacturer of the tour bus and dismissed that defendant from the case. We granted review to determine if the trial court should have reconsidered the previous choice of law ruling after that Indiana defendant was no longer a party.

         For reasons that follow, we conclude that the trial court was not required to reconsider the prior choice of law ruling based on the party's settlement. Because the trial court did not err by declining to reconsider the ruling, we reverse the Court of Appeal's judgment.

         Factual and Procedural Background

         The underlying action concerns a rollover bus accident on October 17, 2010 in Meadview, Arizona. The bus passengers were ten Chinese tourists and their tour guide who were traveling from Las Vegas, Nevada for a day trip to the Grand Canyon in Arizona. The driver of the bus, Zhi Lu, a California resident, worked for TBE International, Inc. (TBE), a California tour company that owned and operated the 16-seat tour bus. Lu drove the bus from Los Angeles, California and picked up the Chinese tourists at their Las Vegas hotel.

         While en route to the Grand Canyon, Lu drove the bus around a curve at a high rate of speed and lost control. The bus rolled over twice. The driver and tour guide were in the front seats, which were equipped with three-point seatbelts (lap and shoulder restraints). Neither suffered any serious injury in the accident. None of the passenger seats, however, were equipped with seatbelts of any kind. Two passengers were killed. One female passenger was impaled in the door mechanism; a male passenger was ejected from the bus and fatally fractured his skull. Six other passengers were ejected from the bus and suffered injuries. The remaining two passengers, who were not ejected, sustained injuries as well.

         In September 2011, the eight passengers and survivors of the two passengers who were killed (plaintiffs) filed an action in Los Angeles County Superior Court against two California-based defendants, the tour bus company TBE, and the distributor who sold the tour bus to TBE, Los Angeles Truck Centers, LLC dba Buswest (Buswest), a California corporation with multiple locations nationwide. Plaintiffs also sued the bus manufacturer, Forest River, Inc. (Forest River), an Indiana corporation that designed, manufactured, and modified the tour bus, and Starcraft, a division of Forest River. Because the parties have referred to the buses as “Starcraft buses, ” we refer to the manufacturer of the buses as Starcraft. Unless otherwise noted, references to Starcraft necessarily include Forest River.

         In their operative second amended complaint, plaintiffs alleged causes of action for wrongful death, negligence, strict products liability, loss of consortium, and negligent infliction of emotional distress. That the driver, Lu, was at fault for the accident was not in dispute. The main theories of plaintiffs' action were that Starcraft negligently designed and manufactured the bus and that Buswest chose to order the bus without seatbelts, which would have prevented the deaths and, at the very least, would have minimized the injuries of the passengers in the rollover crash.

         In December 2012, TBE and Lu settled with plaintiffs for $5 million, in exchange for a full release of all claims against them. One year later, after the governing two-year statute of limitations had already run (Code Civ. Proc., § 335.1), defendants Starcraft and Buswest (collectively, defendants) filed a “Joint Notice of Motion and Motion Regarding Choice of Law on Behalf of Defendants” to determine the choice of law. In that motion, defendants alleged that plaintiffs' claims “potentially implicate” four different jurisdictions, i.e., Indiana, Arizona, China, and California. Defendants maintained that under the governmental interest test to determine the choice of law (see Reich, supra, 67 Cal.2d 551), Indiana law applied. After considering the parties' extensive briefing, the trial judge (Judge Kendig)[1] granted defendants' motion and concluded that Indiana law governed the case. Plaintiffs filed a writ of mandate challenging the trial court's ruling on the choice of law, which the Court of Appeal denied based on plaintiffs' failure to show entitlement to extraordinary relief.

         In August 2014, the same month the trial was originally set to begin, plaintiffs settled with Starcraft for $3.25 million, and, over Buswest's opposition, Judge Kendig granted Starcraft's motion for good faith settlement (Code Civ. Proc., § 877.6). After the settlement left California-based Buswest as the sole defendant, Buswest filed a motion for summary judgment under Indiana law, which the trial court denied. The trial court also denied plaintiffs' request ...

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