Third Party Liability In California

If the motor vehicle crash or other incident involved catastrophic injuries, the tortfeasor (negligent driver) sometimes does not have sufficient auto insurance coverage to pay all damages. California has one of the highest numbers of uninsured drivers in the country. Furthermore, many insured drivers only carry the state minimum, and the financial requirements in California are among the lowest in the country.

One option in these cases is to collect the balance of the judgment from the individual. However, it is sometimes a much better option to find a third party liability theory that allows the victim to bring another party, and another source of compensation, into the existing lawsuit.

Respondeat Superior

According to this theory, which is Latin for “let the master answer,” employers are liable for the negligent acts of their employees, at least in most cases.

First, the tortfeasor must be an employee, and in negligence cases, a person does not need to receive a W-2 to be classified as an employee. Most courts use some variation of the Department of Labor’s definition, which is “suffer or permit to work.” So, under this standard, independent contractors, W-2 employees, and even unpaid volunteers are often “employees.”

Secondarily, courts often look to the degree of control that employers exercise over workers. If the employer controls the worker’s hours, the manner in which the work is performed provides the necessary tools, and otherwise actively oversees the worker, that worker is almost always an employee for negligence purposes, regardless of the classification used for tax or workers’ compensation purposes.

Second, the tortfeasor must be acting within the course and scope of employment at the time of the crash. In the past, the law narrowly defined this phrase to include only circumstances like delivery drivers making their normal delivery routes in their regular delivery trucks.

But along with other jurisdictions, California has recently expanded the meaning of course and scope. Now, employees are within the course and scope if they are doing anything that benefits the employer and the damage they cause was a foreseeable result of that conduct. As to the former, courts have held that driving a vehicle with a company logo benefits the employer; as to the latter, a car crash is clearly a foreseeable result of driving a car.

California is a modified joint and several liability state so, in most cases, damages are divided between the tortfeasor and third party based on the percentage of fault.

Negligent Entrustment

Respondeat superior nearly always applies to commercial operators, such as truck drivers, taxi drivers, bus drivers, and Uber drivers. If there is no employer, third party liability may also be available, under a negligent entrustment theory. This idea often applies when owners loan their vehicles to non-owners who are then involved in car crashes. The elements are:

• Incompetent: Sometimes, there is direct evidence that the tortfeasors were incompetent, because they did not have drivers’ licenses. Victims can use circumstantial evidence as well, because some operators can drive just fine during the day and in clear weather but should not be driving otherwise. In both these circumstance, the owners must actually know that the drivers are incompetent.
• Negligent: The driver’s negligence, be it speeding, alcohol impairment, making an illegal lane change, or whatever, must have caused the victim’s damages.

These rules apply in non-commercial transactions. Different rules apply in commercial transactions, primarily because of the Graves Amendment, which is a federal law that giver vehicle rental companies immunity from lawsuits if their customers negligently cause damages while driving rented vehicles.

However, in a line of cases that includes Flores v. Enterprise Rent-A-Car (2010), California courts have consistently held that vehicle rental companies are still liable for damages under certain circumstances. Typically, if a company rents a vehicle to a person with a suspended drivers’ license, that person is presumed to be incompetent, and renting a vehicle to a person with a valid license yet a bad driving record is evidence of negligence.

Alcohol Liability

Unlike some other states, California has no dram shop law or social host liability law that holds alcohol providers liable for their customers’ or guests’ negligence, unless the tortfeasors were under 21. However, such individuals or entities may still be legally responsible for negligent undertaking. This theory basically says that people who voluntarily assume a responsibility also automatically assume a duty of care.

Assume Tom Tortfeasor has several drinks at a bar. Olive Owner is concerned that Tom may be too impaired to drive and offers to call a cab for Tom. But before the cab arrives, Tom slips out a side door, drives away, and crashes into Victor Victim. Under these facts, if the jury finds that Tom relied on Olive’s promise and Olive made the situation worse by not following up, Victor could sue Olive.

The tortfeasor may not be the only person responsible for the victim’s lost wages, emotional distress, and other damages. For a free consultation or more information with an experienced personal injury lawyer in Los Angeles, contact Glotzer & Leib, LLP.