Roland v. Golden Bay Chevrolet

Full title: George ROLAND, Sr., Plaintiff and Appellant, v. GOLDEN BAY CHEVROLET…

Court: California Court of Appeals, First District, Third Division

Date published: Oct 24, 1984

161 Cal.App.3d 102 (Cal. Ct. App. 1984)

207 Cal. Rptr. 413

Opinion

As Modified on Denial of Rehearing Nov. 20, 1984.

Opinions on pages 85-110 omitted.

Dismissed as Moot, see 217 Cal.Rptr. 415, 704 P.2d 175.

[207 Cal.Rptr. 415]Edward M. Digardi, Siegfried Hesse, Oakland, for plaintiff and appellant.

Mark G. Bonino, Michael J. Brady, Jonathan Lee Willis, Ropers, Majeski, Kohn, Bentley, Wagner & Kane, Redwood City, for defendant and respondent.

SCOTT, Associate Justice.

George Roland, Sr., appeals from judgment entered after the grant of a motion for nonsuit in favor of respondent Golden Bay Chevrolet. Appellant contends that respondent sold an automobile to an unlicensed driver, and was therefore liable under the theory of negligent entrustment as codified by Vehicle Code section 14606 for injuries resulting from an automobile accident negligently caused by the unlicensed driver.

I

In disposing of an appeal from a judgment of nonsuit, the appellate court must view the evidence in the light most favorable to appellant, must disregard all inconsistencies, and must draw only those legitimate, reasonable inferences from the evidence which are favorable to appellant. (Golceff v. Sugarman (1950) 36 Cal.2d 152, 153, 222 P.2d 665.)

Viewed in this light, the record shows that on April 25, 1979, appellant was severely injured in an automobile accident as a result of the recklessness of Ali Al Sabah (Sabah), who was driving 1977 Ford van at the time of the accident and appeared to be under the influence of alcohol. On April 21, 1979, four days before the accident, Sabah had purchased the used van from respondent Golden Bay in San Leandro, California.

Very little evidence was produced at trial regarding the specifics of Sabah's purchase of the van. In response to interrogatories, respondent stated that three of its former employees were involved in the sale: Ed Kabo, salesman; Mel Roberson, sales manager; and Mark Blacksheur, contract manager. Respondent did not know the current whereabouts of any of these individuals, however, and stated in response to further interrogatories that there were no persons currently employed by respondent who had any knowledge of the subject sale. In a deposition, Blacksheur gave general testimony about respondent's general selling practices, but he was unable to remember the specific sale at issue here. The sales contract reveals that Sabah's purchase of the used van was an all cash, no credit transaction. Blacksheur was unable to identify the salesman's initials on the sales contract, but he thought he could identify his own initials on it.

Blacksheur testified that it was the practice of respondent at the time to determine whether the purchaser of a car had a valid driver's license, "regardless of whether [the sale] was a cash deal or credit deal." Respondent's interrogatory answers stated that its employees did inquire and ascertain whether Sabah had a valid driver's license at the time he bought the vehicle. However, respondent did not identify the individual employee who made such inquiry. Moreover, the Department of Motor Vehicles certified that there was no record of any California driver's license issued to Sabah; and when asked for his driver's license by an investigating officer at the scene of the accident, Sabah replied that he did not have one. Later, at the hospital, [207 Cal.Rptr. 416] Sabah produced a passport, but no driver's license.

In response to appellant's interrogatories, respondent stated that it did "not recall at this time" whether Sabah drove the vehicle away from respondent's premises after purchase and delivery, and that it did not recall "any specific inquiries" into Sabah's driving experience or previous driving record. The evidence on the April 25, 1979, accident itself showed that Sabah drove his van through a stop sign and hit appellant broadside on the driver's side in the middle of the intersection. According to one of the officers who investigated the accident, Sabah had all the indices of being under the influence of alcohol.

From this extremely sketchy record, viewed in a light most favorable to appellant and drawing only reasonable inferences in support of appellant's position therefrom, we may assume the following facts for purposes of this appeal. Sabah purchased the used van from respondent for cash, and personally took possession of the vehicle at the time of sale. Respondent inquired of Sabah if he had a valid California driver's license. Sabah did not possess a valid California driver's license, and therefore did not show one to respondent. Finally, the accident was caused by Sabah's own recklessness, while driving under the influence of alcohol.

II

The indispensable precondition to liability founded upon negligence is the existence of a duty of care owed by the alleged wrongdoer to the injured complainant, or to a class of which the injured party is a member. (McEvoy v. American Pool Corp. (1948) 32 Cal.2d 295, 298-299, 195 P.2d 783.) Appellant's central argument is that respondent had a duty under both the common law and Vehicle Code section 14606 not to sell any vehicle to an individual who was unlicensed to drive.

Under the doctrine of negligent entrustment, a person who entrusts a potentially dangerous instrumentality to an incompetent person, under circumstances that indicate a likelihood of misuse, may be liable for damage resulting from misuse of the instrumentality. (4 Witkin, Summary of Cal.Law (8th ed. 1974) Torts, § 650, pp. 2929-2931; Rest.2d Torts, §§ 308, 390.) This principle, as it applies to unlicensed drivers, is buttressed by Vehicle Code section 14606, subdivision (a), which provides in pertinent part: "No person shall ... knowingly permit or authorize the driving of a motor vehicle, owned by him or under his control, upon the highways by any person unless the person is then licensed for the appropriate class of vehicle to be driven." Thus, a defendant who knowingly permits an incompetent, unlicensed, reckless or intoxicated person to drive the defendant's automobile will be liable for damage proximately caused thereby. (Nault v. Smith (1961) 194 Cal.App.2d 257, 267-268, 14 Cal.Rptr. 889; Caccamo v. Swanston (1949) 94 Cal.App.2d 957, 963, 212 P.2d 246; Owens v. Carmichael's U-Drive Autos, Inc. (1931) 116 Cal.App. 348, 351-352, 2 P.2d 580.)

A

We first address the issue of respondent's liability pursuant to the provisions of Vehicle Code section 14606, subdivision (a). Appellant contends that this section places an affirmative duty upon respondent to determine if Sabah was a licensed driver; and further, that if Sabah was an unlicensed driver respondent had breached his statutory duty.

Appellant's interpretation of section 14606, subdivision (a), would require anyone who sells his vehicle to first obtain proof that the purchaser had a driver's license. The statute makes no distinction between the obligations of car dealers and those of private parties. Nor is there any reason in logic or the law why there should be such a distinction. We do not believe that in enacting section 14606 the Legislature intended to place such an onerous burden on the public. With regard to liability under section 14606, the court in Johnson v. Casetta (1961) 197 Cal.App.2d 272, 17 Cal.Rptr. 81, pointed out at page 275, 17 Cal.Rptr. 81 that the statute "prohibits a person from knowingly permitting [207 Cal.Rptr. 417] or authorizing the driving of a motor vehicle owned by him or under his control by an unlicensed person. The section does not add anything to plaintiffs' case. In order to apply, the permission to drive must be given to a driver known to be unlicensed." (Emphasis added.)

We conclude that liability under Vehicle Code section 14606 only attaches where the person authorizing the driving of a vehicle retains an ownership interest in the vehicle, and has actual knowledge or knowledge of facts giving reasonable notice of the driver's lack of an appropriate license. In this case, there was evidence that respondent had knowledge or reason to know of Sabah's unlicensed status. However, respondent sold the subject vehicle to Sabah outright, retaining no ownership interest in it whatsoever. Because the vehicle was not "owned by [respondent] or under [its] control," Vehicle Code section 14606 is inapplicable to the facts of this case.

B

We next address the issue of respondent's potential liability for negligent entrustment under the common law. The doctrine of negligent entrustment was succinctly set forth in the case of Johnson v. Casetta, supra, 197 Cal.App.2d 272, 17 Cal.Rptr. 81. Like the instant case, Johnson v. Casetta was an appeal from a trial court's order granting a nonsuit. The appellate court reversed because the plaintiffs had offered to prove that the sellers had actual knowledge of the buyer's inexperience and incompetency as a driver. (Id., at p. 276, 17 Cal.Rptr. 81.) On the one hand, stated the court, the assumed fact that the plaintiffs could prove that the buyer was unlicensed, inexperienced and incompetent was insufficient: "this does not establish that [the sellers] knew of any facts from which they should have known this. And in the absence of any such knowledge, they had no legal duty or obligation to inquire. [p] ... In each of the ... cases [imposing liability], the defendant had actual knowledge of, or had knowledge of facts from which he should have known of, the driver's incompetency." (Id., at pp. 274-275, 17 Cal.Rptr. 81.) On the other hand, as long as the plaintiffs offered evidence tending to prove that the sellers knew of facts from which they "should have known" of the buyer's inexperience, incompetency, or unlicensed status, "or from which they should have been put upon inquiry as to his competency," such a showing was sufficient to defeat a motion for nonsuit. (Id., at pp. 274, 276, 17 Cal.Rptr. 81.)

Similarly, in the earlier case of Owens v. Carmichael's U-Drive Autos, Inc., supra, 116 Cal.App. 348, 2 P.2d 580, a directed verdict for the defendant was held to be error because the defendant knew that the driver had only a temporary permit and could not legally drive unless accompanied by a licensed driver. "This knowledge was sufficient to put [the defendant] upon inquiry as to the competency of [the driver] ...." (Id., at p. 352, 2 P.2d 580.)

We find the reasoning in Johnson v. Casetta and Owens v. Carmichael's U-Drive Autos applicable here. ¹ Initially, we observe that the retention of actual ownership in a vehicle is not required for liability to attach under the common law doctrine of negligent entrustment. As long as a claimant can show that the person entrusting [207 Cal.Rptr. 418] the vehicle had actual knowledge or knowledge of facts from which he should have known that the driver was unlicensed, such knowledge is sufficient to put such person upon inquiry as to the competency of the driver. (Johnson v. Casetta, supra, 197 Cal.App.2d at pp. 274-275, 17 Cal.Rptr. 81; Owens v. Carmichael's U-Drive Autos, Inc., supra, 116 Cal.App. at p. 352, 2 P.2d 580.)

1 Appellant argues that the comparatively recent case of Hartford Accident & Indemnity Co. v. Abdullah (1979) 94 Cal.App.3d 81, 156 Cal.Rptr. 254 dictates reversal here. In essence, appellant contends that the decision in Abdullah creates an affirmative duty on the part of a car vendor such as respondent to inquire of prospective car purchasers whether or not they are validly licensed drivers. Although we are not inclined to extend the duties of automobile vendors so far, we need not decide the issue at this point. Here, there was evidence that respondent knew or had reason to know that Sabah was an unlicensed, incompetent driver. There was similar evidence in Abdullah, where the dealer had already learned from previous experience with the driver that he was not responsible, and that he had even been arrested some 30 miles away from the dealership for outstanding traffic warrants during a previous "test drive" of the same car. (Id., at pp. 84-87, 92-93, 156 Cal.Rptr. 254.) Moreover, Abdullah is distinguishable from the instant case. No sale had taken place at the time of the accident in Abdullah, and the dealer had retained ownership of the vehicle. Here, the car was sold outright in an all cash, no credit deal. To the extent Abdullah places an affirmative duty on the seller of an automobile to determine if a potential purchaser is licensed, without also requiring that there be some evidence that would put the seller on notice that the person might be unlicensed, we disagree with the decision in that case.

Interpreting the evidence in the record most favorably to appellant, as we must, we conclude that it could reasonably be inferred that respondent had knowledge of facts from which it should have known that Sabah was unlicensed. Sabah did not possess a valid driver's license, and could not have shown one to respondent under any circumstances. There was evidence that respondent's usual business practice was to determine whether the purchaser of a vehicle had a valid driver's license. Respondent's own answers to appellant's interrogatories stated that its employees did in fact inquire and ascertain whether Sabah had a valid driver's license at the time he bought the vehicle. From this evidence, we must draw the inescapable conclusion that respondent knew that Sabah had no license, or had sufficient information "to put respondent upon inquiry as to the competency" of Sabah. (Owens v. Carmichael's U-Drive Autos, Inc., supra, 116 Cal.App. at p. 352, 2 P.2d 580.)

Thus, under the facts of this case, drawing only those legitimate inferences which are favorable to appellant, we find that there was sufficient evidence to support the conclusion that respondent breached a duty to appellant under the common law doctrine of negligent entrustment. (Golceff v. Sugarman, supra, 36 Cal.2d at pp. 152-153, 222 P.2d 665.)

III

In order for there to be liability in tort, respondent's breach of a duty must have been a proximate cause of appellant's injury. (4 Witkin, Summary of Cal.Law (8th ed. 1974) Torts, § 620, p. 2901.) An original negligent act or omission is not a proximate cause when the injury directly results from the independent intervening act of another, which act is not reasonably foreseeable by the negligent party as a likely outcome or result of the original negligent act or omission. (Kane v. Hartford Accident & Indemnity Co. (1979) 98 Cal.App.3d 350, 359, 159 Cal.Rptr. 446; 4 Witkin, Summary of Cal.Law (8th ed. 1974) Torts, § 628, pp. 2910-2911.)

The direct and efficient cause of appellant's injuries was the action of Sabah in recklessly, and while intoxicated, driving the subject vehicle through a stop sign and thereby hitting appellant's car broadside in the middle of an intersection. Respondent argues that Sabah's reckless driving while under the influence of alcohol was an unforeseeable independent intervening act which could not reasonably have been anticipated by respondent at the time of its initial negligence. The difficulty with this approach to the facts of the instant case, however, is twofold.

First, the whole purpose of requiring drivers to possess licenses is to protect the public against the risks of permitting incompetent or inexperienced drivers to operate vehicles on the public thoroughfares. (Hartford Accident & Indemnity Co. v. Abdullah, supra, 94 Cal.App.3d at p. 92, 156 Cal.Rptr. 254.) This is the reason that both the common law and the Vehicle Code have established sanctions against the knowing entrustment of vehicles to unlicensed drivers. Respondent's proximate cause argument inevitably conflicts with this compelling public policy interest in preventing unlicensed, incompetent drivers such as Sabah from operating motor vehicles on the streets and highways. Thus, in Johnson v. Casetta, supra, 197 Cal.App.2d at page 275, 17 Cal.Rptr. 81, the court specifically stated that under the doctrine of negligent entrustment, a seller's liability lasts "as long as the original incompetence of the driver continues. An intoxicated driver may become sober and [207 Cal.Rptr. 419] an inexperienced driver may acquire experience. Then such original incompetence could no longer be a proximate cause of an accident and, therefore, the liability of the seller ... would no longer exist." (Emphasis added.)

Second, the issue of proximate cause is a factual one. The trial court should not have interceded to take this question away from the jury as trier of fact. Here, respondent knew or had reason to know that Sabah was unlicensed and incompetent to drive. "[I]t was for the jury to determine whether under these circumstances respondent was negligent in permitting [Sabah] ... to drive the car upon the highway ...." (Owens v. Carmichael's U-Drive Autos, Inc., supra, 116 Cal.App. at p. 352, 2 P.2d 580.)

We conclude that as a matter of law, appellant established a prima facie case of liability for negligent entrustment; and that the jury should have been permitted to determine whether under all the evidence presented, respondent was negligent and legally responsible for the injuries suffered by appellant. Hence, the trial court's granting of nonsuit was erroneous.

The judgment is reversed.

WHITE, P.J., and BARRY-DEAL, J., concur.