A person injured by someone driving a car in the course of employment may sue not only the driver but that driver's employer. The
If, as here, a plaintiff asserts both theories, and the employer admits vicarious liability for any negligent driving by its employee, can the plaintiff still pursue the negligent entrustment claim? The answer is "no," as we held in Armenta v. Churchill (1954) 42 Cal.2d 448 [267 P.2d 303] (Armenta). The Court of Appeal here held to the contrary. Armenta, it concluded, is inconsistent with this state's current system of allocating liability for tort damages based on comparative fault—a system created by decisions of this court in the 1970's and by the California electorate's later adoption of the Fair Responsibility Act of 1986 (Proposition 51). We disagree with the Court of Appeal. We therefore reverse that court's judgment and remand for a new trial.
Plaintiff Dawn Renae Diaz was driving south on U.S. Highway 101 near Camarillo, Ventura County. Defendant Jose Carcamo, a truckdriver for defendant Sugar Transport of the Northwest, LLC, was driving north in the center of three lanes. Defendant Karen Tagliaferri, driving in the center lane behind Carcamo, moved to the left lane to pass him. As Tagliaferri, without signaling, pulled back into the center lane, her vehicle hit Carcamo's truck, spun, flew over the divider, and hit plaintiff's SUV. Plaintiff sustained severe, permanent injuries.
Plaintiff sued Tagliaferri, Carcamo, and Sugar Transport. She alleged that Carcamo and Tagliaferri had driven negligently and that Sugar Transport was both vicariously liable for employee Carcamo's negligent driving and directly liable for its own negligence in hiring and retaining him. In their answer, Carcamo and Sugar Transport denied any negligence.
At trial, plaintiff's expert witness testified that Carcamo should have been in the right lane, should have monitored his mirrors better, and should have averted a collision by slowing or steering away as Tagliaferri entered his lane. Plaintiff's counsel argued that Carcamo sped up to keep Tagliaferri from passing, noting Sugar Transport's failure to produce the chart from the truck's tachograph, which would have recorded Carcamo's speed, acceleration, and braking. But another driver, who was the only nonparty witness to the collision between Carcamo and Tagliaferri, testified that Carcamo had not
Defendant-employer Sugar Transport offered to admit vicarious liability if its employee Carcamo was found negligent. That admission, Sugar Transport argued, would bar plaintiff from further pursuing her claims for negligent entrustment, hiring, and retention. In support, Sugar Transport cited Jeld-Wen, Inc. v. Superior Court (2005) 131 Cal.App.4th 853 [32 Cal.Rptr.3d 351] (Jeld-Wen), in which a Court of Appeal, applying our holding in Armenta, supra, 42 Cal.2d 448, directed a trial court to dismiss a negligent entrustment claim after the defendant employer's admission of vicarious liability for its employee's driving.
Over defendant-employer Sugar Transport's objection, the trial court here admitted evidence of Carcamo's driving and employment history, as offered by plaintiff in support of her negligent hiring claim. The evidence showed two prior accidents involving Carcamo: one in which he was at fault and was sued, the other occurring only 16 days before the accident here. Other evidence showed that Carcamo was in this country illegally and had used a "phony" Social Security number to obtain employment, that he had been fired from or quit without good reason three of his last four driving jobs, that he had lied in his application to work for Sugar Transport, and that, when Sugar Transport had sought information from Carcamo's prior employers, the lone response gave him a very negative evaluation.
Sugar Transport opposed instructing the jury on plaintiff's negligent retention and hiring claims, arguing that its offer to admit vicarious liability barred such instructions. It also sought a mistrial, claiming the prior-accident evidence had been highly prejudicial. Its efforts failed. Before closing arguments, Sugar Transport stipulated with plaintiff to vicarious liability for employee-driver Carcamo's negligence, if any.
The jury found that defendants Tagliaferri and Carcamo had driven negligently, that defendant Sugar Transport had been negligent in hiring and retaining Carcamo as a driver, and that the retention was a cause of plaintiff's injuries. The jury allocated fault for the accident among all three defendants: 45 percent to Tagliaferri, 35 percent to Sugar Transport, and 20 percent to Carcamo. It awarded plaintiff over $17.5 million in economic damages and $5 million in noneconomic damages. The trial court entered a judgment in the form required by Proposition 51, enacting Civil Code sections 1431.1-1431.5 and amending section 1431. Under the judgment, Tagliaferri and Sugar Transport were each jointly liable for all of plaintiff's economic damages but
Because the Court of Appeal's decision here conflicts with that in Jeld-Wen, supra, 131 Cal.App.4th 853, and casts doubt on the viability of our holding in Armenta, supra, 42 Cal.2d 448, we granted the petition for review of defendants Sugar Transport and Carcamo.
Defendants contend the Court of Appeal erred in holding that this court's adoption of a comparative fault-based system for allocating tort liability (see Li v. Yellow Cab Co. (1975) 13 Cal.3d 804 [119 Cal.Rptr. 858, 532 P.2d 1226] (Li)) has undermined our holding in Armenta, supra, 42 Cal.2d 448. Under Armenta, they argue, employer Sugar Transport's offer to admit vicarious liability for any negligence of its employee-driver Carcamo required the trial court to withhold plaintiff's negligent hiring and retention claims from the jury, and to exclude the evidence plaintiff offered to support those claims, such as Carcamo's poor driving record and employment history, his dishonesty, and his status as an illegal alien and resultant use of a "phony" Social Security number to obtain employment. We agree, as explained below.
Armenta held that Alece's admission of vicarious liability made the negligent entrustment claim irrelevant. (Armenta, supra, 42 Cal.2d at p. 457.) Vicarious liability and negligent entrustment, we explained, were "alternative theories under which . . . to impose upon [Alece] the same liability as might be imposed upon [Dale]." Alece's admission of vicarious liability, we stated, had removed "the legal issue of her liability . . . from the case" (ibid.) leaving "no material issue . . . to which the offered evidence could be legitimately directed." (Id. at p. 458.)
Armenta, supra, 42 Cal.2d 448, reflects the majority view among American jurisdictions. (Mincer, The Viability of Direct Negligence Claims Against Motor Carriers in the Face of an Admission of Respondeat Superior (2010) 10 Wyo. L.Rev. 229, 235.) But we decided Armenta nearly 60 years ago. Since then, marked changes have occurred in California law on the allocation of liability for tort damages among multiple wrongdoers. Before determining whether those changes affect our holding in Armenta, we summarize them in part III below.
In 1954, when we decided Armenta, supra, 42 Cal.2d 448, California courts imposed tort liability for a plaintiff's injuries on an "all-or-nothing" basis. (American Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 578, 583, 591-598 [146 Cal.Rptr. 182, 578 P.2d 899] (American Motorcycle); Li, supra, 13 Cal.3d at pp. 809-811 & fn. 3.) At that time, juries "generally did not determine the relative degree or proportion of fault" of the parties. (Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1196 [246 Cal.Rptr. 629, 753 P.2d 585].) Instead, if "the plaintiff's fault had contributed in any measure to his own injury, his recovery was barred," while "every defendant found some what responsible for an indivisible injury, no matter how slight his or her fault, was liable for all the damages . . . ." (DaFonte v. Up-Right, Inc. (1992) 2 Cal.4th 593, 597 [7 Cal.Rptr.2d 238, 828 P.2d 140] (DaFonte).)
In that system, once an employer admitted vicarious liability for an employee's tortious conduct within the scope of employment, it did not
In 1975, this court replaced the old all-or-nothing system of tort liability with a comparative fault system "under which liability for damage will be borne by those whose negligence caused it in direct proportion to their respective fault." (Li, supra, 13 Cal.3d at p. 813.) Under comparative fault principles, a plaintiff's negligence no longer bars recovery, but reduces "the damages awarded . . . in proportion to the amount of negligence attributable to the [plaintiff]." (Id. at p. 829.) Three years later, to ensure a similarly fair apportion ment of damages among tortfeasors, we also eliminated the all-or-nothing character of the common law doctrine of equitable indemnity. (American Motorcycle, supra, 20 Cal.3d at p. 583.) We thus permitted "a right of partial indemnity, under which liability among multiple tortfeasors may be apportioned on a comparative negligence basis." (Ibid.) We declined, however, to eliminate the common law doctrine of joint and several liability, under which any defendant whose tort was a cause of an injury was liable for all of the plaintiff's damages. (Id. at pp. 582-583.) Thus, if one defendant proved to be insolvent, the burden of paying its share of damages fell on the other defendants, not the plaintiff.
In 1986, California voters further limited the all-or-nothing character of tort liability by adopting Proposition 51. To ensure that "defendants in tort actions shall be held financially liable in closer proportion to their degree of fault" (Civ. Code, § 1431.1, subd. (c)), Proposition 51 limits the scope of joint liability among tortfeasors. In cases "based upon principles of comparative fault," each defendant is liable for all the plaintiff's economic damages but only "for the amount of non-economic damages allocated to that defendant in direct proportion to that defendant's percentage of fault." (Civ. Code, § 1431.2, subd. (a).) For that purpose, a "defendant's percentage of fault" (ibid.) is "his or her proportionate share of fault as compared with all fault responsible for the plaintiff's injuries." (DaFonte, supra, 2 Cal.4th at p. 603, italics omitted.) Accordingly, "damages must be apportioned among [the] `"universe" of tortfeasors' including `nonjoined defendants.'" (Ibid.)
Because Proposition 51 applies only to "independently acting tortfeasors who have some fault to compare," the allocation of fault it mandates cannot encompass defendants "who are without fault and only have vicarious liability." (Rashtian v. BRAC-BH, Inc. (1992) 9 Cal.App.4th 1847, 1851 [12 Cal.Rptr.2d 411] [Prop. 51 did not apply to car owner vicariously liable for
Plaintiff contends that defendant-employer Sugar Transport has forfeited its right to invoke our holding in Armenta, supra, 42 Cal.2d 448, by not admitting vicarious liability before trial, as did the defendants in Armenta and in Jeld-Wen, supra, 131 Cal.App.4th 853. Neither decision, however, required such admissions to be made before trial.
Plaintiff also claims that defendant-employer Sugar Transport forfeited its right to invoke the holding of Armenta, supra, 42 Cal.2d 448, by not moving to bifurcate the trial into two separate parts: one pertaining to the negligent driving cause of action against Tagliaferri and employee-driver Carcamo, and the other on the negligent hiring and retention causes of action against Sugar Transport. But, as we held in Armenta, and as we affirm in this decision, an employer's admission of vicarious liability for its employee's negligence makes claims of negligent entrustment, hiring, or retention irrelevant. Thus, no reason exists to try such claims at all, whether separately from the negligence claim or at the same time.
We now consider whether our 1954 holding in Armenta, supra, 42 Cal.2d 448, has been undermined by this court's later adoption of comparative fault principles (see pp. 1155-1156, ante) and by the California electorate's adoption of Proposition 51, with its related limit on joint liability (see p. 1156, ante). Armenta held that if a plaintiff sues a driver's employer on theories of respondeat superior and negligent entrustment, the employer can, by admitting liability on the first claim, bar the second. (42 Cal.2d at p. 457.) Citing Armenta, defendant-employer Sugar Transport here argues that its offer to admit vicarious liability for any negligent driving by its employee, Carcamo, barred plaintiff from pursuing claims of negligent hiring or retention, and that the Court of Appeal erred in concluding otherwise. Plaintiff responds that in cases like this in which Proposition 51 requires an allocation of fault among multiple tortfeasors, Armenta is inconsistent with the principles of comparative fault adopted after Armenta.
Plaintiff asserts that if Proposition 51 applies to limit a defendant's liability for noneconomic damages, necessitating an allocation of fault, then the principles of California's comparative fault system require the trial court to include both the employer and its employee-driver in the "`"universe" of tortfeasors'" to whom the jury will allocate fault (DaFonte, supra, 2 Cal.4th at p. 603). It logically follows, according to plaintiff, that the jury can hold an employer responsible for two shares of fault: one based on the employee's negligent driving in the scope of employment, for which the employer is liable vicariously, and one based on the employer's own negligence in
Disagreeing with Jeld-Wen, supra, 131 Cal.App.4th 853, the Court of Appeal here reasoned: Negligent hiring or retention claims entail not vicarious but direct liability, which is based on an employer's independent fault for the distinctly culpable act of entrusting a vehicle to an employee who the employer should know is unfit to drive safely; Proposition 51 requires a jury to apportion fault among all defendants to ensure that all bear responsibility for noneconomic damages "in . . . proportion to their degree of fault" (Civ. Code, § 1431.1, subd. (c)); therefore, a negligent hiring or retention claim can "impose[] greater responsibility on Sugar Transport than would be attributed to it for simply being Carcamo's employer," as Sugar Transport is liable both vicariously for Carcamo's fault and directly for its own, independent fault. Excluding proof of negligent hiring or retention, the Court of Appeal held, makes it "impossible" to allocate fault as Proposition 51 requires, because the allocation cannot include all defendants who bear independent fault.
Comparative fault "is a flexible, commonsense concept" adopted to enable juries to reach an "`equitable apportionment or allocation of loss.'" (Knight v. Jewett (1992) 3 Cal.4th 296, 314 [11 Cal.Rptr.2d 2, 834 P.2d 696].) If, as here, an employer offers to admit vicarious liability for its employee's negligent driving, then claims against the employer based on theories of negligent entrustment, hiring, or retention become superfluous. To allow such claims in that situation would subject the employer to a share of fault in addition to the share of fault assigned to the employee, for which the employer has already accepted liability. To assign to the employer a share of fault greater than that assigned to the employee whose negligent driving was a cause of the accident would be an inequitable apportionment of loss.
Our conclusion finds support in certain decisions of other state courts that have adopted or retained the majority rule that a defendant-employer's admission of vicarious liability bars claims for negligent entrustment, hiring, or retention. The relevant decisions fall into two categories: (1) those in which a state court that already used a system of comparative fault adopted the majority rule (McHaffie v. Bunch (Mo. 1995) 891 S.W.2d 822, 826; Willis v. Hill (1967) 116 Ga.App. 848 [159 S.E.2d 145, 160], revd. on other grounds (1968) 224 Ga. 263 [161 S.E.2d 281]) and (2) those in which a state court, having first adopted the majority rule and having later adopted comparative fault, then chose to retain the majority rule, as we now do (Gant v. L.U. Transport, Inc. (2002) 331 Ill.App.3d 924 [264 Ill.Dec. 459, 770 N.E.2d 1155, 1159-1160]; Loom Craft Carpet Mills, Inc. v. Gorrell (Tex.App. 1992) 823 S.W.2d 431, 432).
Plaintiff insists that the "fault" to be compared in allocating comparative fault is moral fault, and that negligently entrusting a vehicle to an employee involves moral culpability distinct from the moral culpability of the employee for driving negligently. Defendants respond that when a jury compares "fault," it primarily compares the degree to which each party's conduct
To summarize, we reaffirm our holding in Armenta, supra, 42 Cal.2d 448, that an employer's admission of vicarious liability for an employee's negligent driving in the course of employment bars a plaintiff from pursuing a claim for negligent entrustment. Therefore, the trial court here erred in not applying that holding to this case. We now turn to defendants' contention that the error prejudiced them.
To establish prejudice, a party must show "a reasonable probability that in the absence of the error, a result more favorable to [it] would have been reached." (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 574 [34 Cal.Rptr.2d 607, 882 P.2d 298].) We explore that issue below.
To show that Sugar Transport's driver, Carcamo, was prone to driving negligently (which was relevant to plaintiff's negligent hiring and retention claims against Sugar Transport), plaintiff offered evidence of his past accidents, including one in which he was at fault and another that had occurred just 16 days before the accident here. To further support her negligent hiring claim, plaintiff offered evidence of Carcamo's poor employment record: As a person illegally in this country, he had used a false Social Security number to get hired; he had been fired from (or quit without good reason) three of his last four driving jobs; and he had lied in his application to work for Sugar Transport. In addition, plaintiff presented extensive testimony about Sugar Transport's inadequate hiring practices, thereby making the company appear indifferent to the need to screen or train drivers for safety. That testimony showed, for example, that when Sugar Transport hired Carcamo, it did not make adequate efforts to get evaluations of him from his past employers and it ignored the one evaluation it did receive, which was very negative.
The second issue on which the jury would probably have reached a different result but for the trial court's error is its allocation of fault. As to this issue, however, the trial court's error prejudiced only Sugar Transport, not Carcamo. The jury assigned defendant Tagliaferri 45 percent of the fault, employee-driver Carcamo 20 percent, and employer Sugar Transport 35 percent. That allocation made Sugar Transport liable (directly or vicariously) for 55 percent of the fault. Had the trial court correctly listed only the drivers (that is, Carcamo and Tagliaferri) on the verdict form as tortfeasors to whom the jury could assign shares of fault, employer Sugar Transport's only source of liability would have been its vicarious liability, under the doctrine of respondeat superior, for the share of fault assigned to employee Carcamo. In that case, the jury might well have assigned to Carcamo alone less than the 55 percent share of fault that it assigned to both him and Sugar Transport together, thereby reducing Sugar Transport's total liability. In other words, being responsible for only one out of two shares of fault (rather than two out of three shares of fault) would probably have worked in Sugar Transport's favor.
This conclusion is supported by several facts. First, defendant Tagliaferri's counsel admitted that his client was at fault in the accident. Second, both Carcamo and the only nonparty witness to the accident testified that Tagliaferri pulled into Carcamo's lane without signaling, and that Carcamo never changed speed. (Tagliaferri's injuries left her with no recollection of the accident.) Third, the jury's allocation of fault shows that it considered Tagliaferri to be more at fault than Carcamo. Indeed, the jury assigned to Tagliaferri over twice the fault (45 percent) that it assigned to Carcamo (20 percent). We therefore perceive a reasonable probability that, had the trial court excluded the prejudicial evidence and arguments presented by plaintiff's counsel, and instructed the jury to divide fault between Carcamo and Tagliaferri alone— rather than including Carcamo's employer, Sugar Transport, among the tortfeasors to whom it could allocate fault—the jury would have assigned to
We reverse the judgment of the Court of Appeal and direct that court to reverse the trial court's judgment and remand the case for a complete retrial.
Cantil-Sakauye, C. J., Baxter, J., Werdegar, J., Chin, J., Corrigan, J., and Aldrich, J.,
We note that in Syah v. Johnson (1966) 247 Cal.App.2d 534 [55 Cal.Rptr. 741], the Court of Appeal upheld an employer's liability for negligent entrustment when the employee was found not to have been negligent. We express no views on whether Syah was decided correctly. We disapprove Syah v. Johnson, supra, 247 Cal.App.2d 534 to the extent it is inconsistent with the views expressed here.