Saving negligent entrustment claims: for more than 50 years, courts have routinely dismissed negligent entrustment claims when truck companies admit agency in crashes. Here's how to keep your client's claim from getting tossed.

Imagine a common scenario: A tractor trailer and several other vehicles collide, with your client suffering significant injury. Your investigation reveals that the truck driver had a long history of violations, was driving on a suspended license, and was in violation of the hours-of-service regulations when the collision occurred. In addition to filing negligence claims against the truck driver and his employer under a respondent superior theory, you include a count against the employer for negligent hiring, retention, and entrustment.

In response, the trucking company admits an agency relationship with its employee driver and then moves to dismiss the negligent hiring, retention, and entrustment claim. In most states, the company will prevail on its motion, thereby preventing the jury from hearing about the employer's negligence in putting the driver behind the wheel.

Such a dismissal can damage your client's ability to fully recover. To obtain full recovery, you must be allowed to present evidence of all proximate causes of your client's injury. A potential proximate cause is the trucking company's negligence. Thus, you need to recognize what situations will allow negligent entrustment counts to survive.

Two theories

The theory of respondent superior imposes vicarious liability--that is, liability without fault--on an employer for the torts of its employees. Negligent entrustment, on the other hand, does not arise out of the parties' relationship, nor does it rest on imputed negligence or on ownership or agency. Rather, it is an independent tort that rests on the negligence of an owner of a dangerous instrumentality (for example, a truck) in entrusting it to a person whose use of it causes injury to another. (1)

Proving such a claim in a trucking accident case can be difficult. Under common law, a cause of action for negligent entrustment exists where an owner entrusts his or her motor vehicle to a driver, with actual or constructive knowledge that the driver is incompetent or unfit to drive. (2) That owner can be held liable for an injury proximately caused by the driver's incompetence. For public policy reasons, this theory applies in truck crash litigation because truck companies enjoy the privilege of driving trucks on the nation's highways and should bear the risks associated with doing so.

The rationale behind decisions to dismiss negligent entrustment claims when the defendant admits agency is that the admission leaves the plaintiff with nothing else to achieve. If a truck rear-ends a car stopped at a light, and the trucking company admits agency, it becomes responsible for all the plaintiff's damages arising from the crash. A proximate cause of the damages was the collision. Although negligent entrustment may be another proximate cause, it will not increase the plaintiff's recovery because the trucking company has already admitted agency. Because it will not increase the recovery, the prior-bad-acts evidence supporting the negligent entrustment claim is deemed more prejudicial than probative.

The jurisprudence supporting this view is more than 50 years old. In 1951, a Maryland court observed that when agency is admitted, it is "quite unnecessary" to pursue negligent entrustment. The court stated that when a driver's known incompetence is at issue, as in negligent entrustment cases, the rule prohibiting evidence of a prior driving record must yield to the need to allow the plaintiff to present proof of previous misconduct. But, said the court, where agency is admitted, it can serve no purpose to allow such evidence except to inflame the jury. (3)

In the ensuing years, this theory was adopted by courts in Arkansas, California, Connecticut, Florida, Georgia, Illinois, Maryland, Mississippi, North Carolina, and Texas. (4)

Decisions preserving negligent entrustment

Despite those decisions, a plaintiff attorney can argue that in trucking cases, a negligent entrustment claim can coexist with an admission of agency. You probably should not rely solely on the earliest cases allowing negligent entrustment claims to go forward, but they can provide a foundation for your argument.

In 1933, an Ohio court held that respondent superior and negligent entrustment claims are not inconsistent and that the admission of agency in such a case does not banish the theory that the defendant knowingly entrusted the operation of his car to an incompetent driver. (5)

Similarly, in a hotly disputed Michigan wrongful death case some 30 years later, the state supreme court held that a plaintiff may properly plead liability under both the owner liability statute and the negligent entrustment theory, despite an admission of agency. "The common law rule of negligent entrustment," the court said, "is both time tried and valuable, and we are not disposed to dilute its worth." (6) The court intimated that all such evidence is prejudicial, but it should come to light because of the egregious conduct of the trucking company in that case.

More recent cases illustrate a willingness among courts to allow the negligent entrustment count to stand if the plaintiff can articulate a purpose other than just showing that the employer is a bad guy.

In 1969, for instance, the North Carolina Supreme Court said that asking for punitive damages constituted a proper purpose for the plaintiff to proceed under the negligent entrustment theory. (7) A Florida court echoed this decision in 1977, holding that factual situations could arise where the negligent entrustment theory would impose additional liability and would therefore be permissible, such as where the allegations were sufficient to allow a claim for punitive damages. The court opined that in some cases, potential prejudice to the defendants would not outweigh the desirability of allowing the plaintiff to proceed on both theories of recovery. (8)

While these decisions seem like steps in the right direction, several opinions by courts in Texas and Mississippi have held that not even a count for punitive damages will support a negligent entrustment allegation when agency has been admitted between principal and servant. (9)

Comparative fault

Today, plaintiff attorneys have an opportunity to get evidence of prior bad acts before juries in these cases in most jurisdictions because of a growing acceptance of the comparative fault doctrine in assigning liability.

Only four states--Alabama, Maryland, North Carolina, and Virginia--and the District of Columbia still follow the pure contributory negligence rule, which says that an injured party cannot recover any damages if he or she is even I percent at fault. (10) In such a scenario, a defendant is either liable or not; there is no apportionment of fault.

Of the remaining 46 states, 13 recognize the pure comparative fault rule: Alaska, Arizona, California, Florida, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, New York, Rhode Island, South Dakota, and Washington. (11) Generally, this rule permits a plaintiff to recover even if he or she is as much as 99 percent at fault, with damages reduced accordingly.

Of the 33 states that recognize the modified comparative fault standard, 12 follow the so-called 50-percent-bar rule: Arkansas, Colorado, Georgia, Idaho, Kansas, Maine, Nebraska, North Dakota, Oklahoma, Tennessee, Utah, and West Virginia. (12) Generally, this rule allows plaintiffs to recover only if they are less than 50 percent at fault.

The remaining 21 states follow the so-called 51-percent-bar rule: Connecticut, Delaware, Hawaii, Illinois, Indiana, Iowa, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Vermont, Wisconsin, and Wyoming. (13) This rule permits plaintiffs to recover only if they are 50 percent or less at fault.

Thus, in 46 states, plaintiff lawyers can argue that admission of agency does not bar negligent entrustment claims. The key to this argument's success is the work the jury must perform.

Juries in comparative negligence states must apportion fault among all responsible parties. A party is responsible for the accident if it is a proximate cause of the accident. Thus, am, proximate cause should be considered.

In a trucking case, one proximate cause could be the driver's negligence, and another could be the employer's negligence in entrusting a vehicle to the driver. When apportioning fault, this argument says, all the relevant facts and evidence should be presented to the jury because they could have a significant effect on the plaintiff's ability to recover damages. Holding all persons or entities proportionately responsible for their share of the plaintiff's damages is the core purpose of the comparative fault scheme.

This theory has some support in the federal courts. In Lorio v. Cartwright, the cross-plaintiff raised counts of negligence, respondent superior, and negligent entrustment. The cross-defendants admitted agency and moved to dismiss the negligent entrustment claim. The Illinois district court held:

   [U]nder comparative negligence that difference
   between the negligence of the entrustor
   and entrustee matters a great deal.
   If plaintiff were to prevail on both the negligence
   claim against the entrustee-agent
   and on the negligent entrustment claim
   against the entrustor-principal, the entrustor-principal
   would be liable for the percentage
   of plaintiff's damages caused by
   the entrustee-agent's negligence and for
   the percentage of plaintiff's damages
   caused by the entrustor-principal's separate
   negligence in entrusting the vehicle to the
   entrustee-agent. (14)

The Lorio court examined the case law as it existed under Illinois's contributory negligence scheme and opined that the Illinois Supreme Court would hold differently now that Illinois was a comparative fault state.

Two subsequent, unpublished opinions from the same court support the Lorio rationale. In Tapia v. Richardson, the court rejected the defendant's request for dismissal of the negligent entrustment count. (15) In Campa v. Gordon Food Services, Inc., the court upheld the dismissal of a negligent entrustment count, holding that while there was a conflict between the federal court opinions and the state court opinions, weight should be given to the intermediate courts of appeal in Illinois until the state's supreme court had spoken on the issue. (16)

The Illinois appellate courts have rejected negligent entrustment where agency is admitted. The state's high court has not addressed the issue, but the federal district court has opined that the high court would agree with Tapia. Interestingly, the Campa court did not criticize the Lorio court's rationale but deferred to the state courts until the state high court rules on the issue.

In addition to arguing that application of the comparative fault rule should preserve your client's negligent entrustment claim, consider whether a particular percentage of fault must be proved under your state's joint and several liability law. If so, this may provide additional support for your argument that the negligent entrustment claim should survive.

For example, in a multiple-vehicle collision involving a tractor trailer, the jury will have to apportion fault among all defendants. If there is no negligent entrustment count, the jury may apportion liability to the driver or trucking company in an amount less than the amount necessary to make the driver jointly and severally liable.

However, if you are allowed to present evidence of negligent entrustment, that evidence may push the trucking company's total apportionment of fault over the threshold, potentially increasing the plaintiff's ability to fully recover for his or her damages. This type of case will clearly require a specific set of facts, but when they are present, the plaintiff will have a solid argument against the longstanding theory that a negligent entrustment claim will not provide any additional benefit to the plaintiff.

It is clearly in our clients' best interests to urge courts to allow vicarious liability claims and negligent entrustment claims to coexist. Because a plaintiff is allowed to recover from any person or entity-whose actions constitute a proximate cause of the damages sustained, that plaintiff should be allowed to introduce evidence of each such cause. The integrity of the comparative fault systems demands as much.

Perhaps more important is the effect such a change could have in a

more general sense. When a trucking company understands that merely admitting agency will avoid any liability for negligent hiring or entrustment, it has little incentive to diligently research a driver's background and ability. After all, why would a trucking company spend resources to follow up on requests to a driver's prior employers when there is no penalty for not doing so?

The result of this, however, is more dangerous highways. We can help our clients, and our communities, by pursuing both recognized causes of action and the rationale to support them.

Notes

(1.) See 8 Am. Jur. 2d Automobiles and Highway Traffic [section] 643 (2006).

(2.) Id.

(3.) Houlihan v. McCall, 78 A.2d 661 (Md. 1951).

(4.) Debra E. Wax, Propriety of Allowing Person Injured in Motor Vehicle Accident to Proceed against Vehicle Owner under Theory of Negligent Entrustment Where Owner Admits Liability under Theory of Recovery, 30 A.L.R.4th 838 (1984).

(5.) Clark v. Stewart, 185 N.E. 71 (Ohio 1933).

(6.) Perin v. Peuler, 130 N.W.2d 4, 11 (Mich. 1964).

(7.) Plummer v. Henry, 171 S.E.2d 330 (N.C. 1969).

(8.) Clooney v. Geeting, 352 So. 2d 1216 (Fla. Dist. App. 1977).

(9.) See e.g. Hood v. Dealers Transport Co., 459 E Supp. 684 (N.D. Miss. 1978); Rodgers v. McFarland, 402 S.W.2d 208 (Tex. App. 1966).

(10.) Ala. Power Co. v. Schotz, 215 So. 2d 447 (Ala. 1968); Bd. of Co. Commrs. of Garrett Co. v. Bell A.Md., Inc., 695 A.2d 171 (Md. 1997); N.C. Gen. Star. [section] 99B-4(3) (West 1996); Baskettv. Banks, 45 S.E.2d 173 (Va. 1947); Wingfield v. Peoples Drug Store, Inc., 379A.2d 685 (D.C. 1977).

(11.) Alaska Stat. [section] 09.17.060 (West 2005); Ariz. Rev. Stat. [section] 12-2505 (West 2006); Liv v. Yellow Cab Co., 119 Cal. Rptr. 858 (Cal. 1975); Fla. Stat. [section] 768.81 (2) (2006); Ky. Rev. Star. Ann. [section] 411.182 (West 2006) ; La. Comp. Fault Code Ann. art. 2323 (2006); Miss. Code Ann. [section] 11-7-15 (West 2006); Gustafson v. Benda, 661 S.W.2d 11 (Mo. 1983); Scott v. Rizzo, 634 P.2d 1234 (N.M. 1981); N.Y. Civ. Prac. L. & R. [section] 1411 (McKinney 2006); R.I. Gen. Laws [section] 9-20-4 (2006) ; S.D. Codified Laws [section] 20-9-2 (2006); Wash. Rev. Code Ann. [section] 4.22.005-015 (West 2006).

(12.) Ark. Code Ann. [section] 16-64-122 (West 2006); Colo. Rev. Star. Ann. [section] 13-21-111 (West 2006) ; Ga. Code Ann. [section] 51-11-7 (West 2006); Idaho Code Ann. [section] 6-801 (West 2006); Kan. Stat. Ann. [section] 60-258a(a) (2005); 14 Me. Rev. Stat. Ann. [section] 156 (2006); Neb. Rev. Stat. [section] 25-21, 185.11 (2006); N.D. Cent. Code [section] 32-03.24)2 (2005); Okla. Stat. Ann. tit. 23, [section] 13 (West 2006); McIntyre v. Balentine, 833 S.W.2d 52 (Tenn. 1992); Utah Code Ann. [section] 78-27-38 (West 2006); Bradley v. Appalachian Power Co., 256 S.E.2d 879 (W.Va. 1979).

(13.) Conn. Gen. Stat. [section] 52-572(h) (2006); Del. Code Ann. tit. 10, [section] 8132 (2006); Haw. Rev. Stat. [section] 663-31 (2006); 735 Ill. Comp. Stat. 5/2-1116 (2006) ; Ind. Code Ann. [section] 34-51-2-6 (West 2006); Iowa Code [section] 668.3(1) (b) (2006); Mass. Gen. Laws ch. 231, [section] 85 (2006); Mich. Comp. Laws [section] 600.2959 (2006); Minn. Stat. [section] 604.01 (2006); Mont. Code Ann. [section] 27-1-702 (2005);Nev. Rev. Stat.Ann. [section] 41.141 (West 2006); N.H. Rev. Stat. Ann. [section] 507:7-d (West 2006); N.J. Stau Ann. [section] 2A:15-5.1 (West 2006); Ohio Rev. Code Ann. [section] 2315.35 (West 2006); Or. Rev. Star. [section] 31.600 (2006); 42 Pa. Consol. Stat. Ann. [section] 7102 (2006); Nelson v. Concrete Supply Co., 399 S.E.2d 783 (S.C. 1991); Tex. Civ. Prac. & Rem. Code Ann. [section] 33.001 (2006) ; Vt. Stat. Ann. tit. 12, [section] 1036 (2005);Wis. Stat. [section] 895.045(1) (2006);Wyo. Stat. Ann. [section] 1-1-109(b) (2006). For contributory versus comparative data on each state, see www.mwl-law.com/PracticeAreas/ContributoryNeglegence.asp (last accessed Jan. 3, 2007).

(14.) 768E Supp. 658,660-61 (N.D. Ill. 1991).

(15.) 1998 WL 164819 (N.D. Ill. 1998).

(16.) 2002 WL 1879262 (N.D. Ill. 2002).

SCOTT BEAL handles commercial vehicle cases at his practice in Chicago.