Tellez v. Saban

933 P.2d 1233, 188 Ariz. 165, 226 Ariz. Adv. Rep. 3, 1996 Ariz. App. LEXIS 206

• Court: Court of Appeals of Arizona
• Decided: September 24, 1996
• Docket: 1 CA-CV 94-0430
• Status: Published

Opinions

OPINION

TOCI, Judge.

Arizona prohibits a rental ear company from knowingly renting a car to an unlicensed driver. Ariz.Rev.Stat.Ann. (“A.R.S.”) § 28-477(B) (1989).¹ Dennis Saban and Saban’s Rent-A-Car (“Sabans”) violated the statute by renting a car to John Pitts, knowing that he was going to entrust the car to Karla Fernandez, an unlicensed driver. While driving the rental car, Fernandez ran a red light and collided with a van driven by Gloria M. Tellez, who died in the accident.

Jose and Rosario Tellez (“Tellez”), Gloria’s parents, sued Sabans for her wrongful death. The trial court entered summary judgment for Sabans, ruling as a matter of law that Sabans’ violation of a statute was not the proximate cause. of the fatal accident. On appeal, we hold that the trial court erred in determining as a matter of law that Sabans’ conduct was not the proximate cause of the accident. We reject the rationale of Christy v. Baker, 7 Ariz.App. 354, 439 P.2d 517 (1968), and reverse the judgment for defendants.

I. FACTUAL AND PROCEDURAL HISTORY

We view the facts in the light most favorable to Tellez, the party against whom the court entered summary judgment. Ontiveros v. Borak, 136 Ariz. 500, 503, 667 P.2d 200, 203 (1983). In August 1991, Fernandez was twenty-four years old and had neither a ear, credit card, nor valid driver’s license. Because she wanted to drive to Tucson, she asked John Pitts to use his credit card to help her rent a car.

On August 30, Pitts and Fernandez drove Pitts’ truck to Saban’s Rent-A-Car and parked in view of Michael Loan and Dennis Saban, the employees on duty. Fernandez selected a car, and Loan consulted her through Pitts concerning the rental terms. Pitts rented the car but informed Loan that Fernandez was going to drive it.

Loan asked whether Fernandez had a driver’s license. When Fernandez said that she did not, Loan told her that she could not drive the car off the lot. In Loan’s presence, Pitts told Fernandez to drive his truck off the lot. Fernandez responded, “Okay, we’ll go around the corner and we’ll switch cars.” Neither Saban nor Loan did anything to prevent the exchange of vehicles.

Although Pitts and Saban had understood that the rental was for a single day, Fernandez did not return the car after driving to and from Tucson. On September 7, 1991, seven days after taking possession of the car, Fernandez gave a party at which she drank heavily. During the evening, she left the party and drove the car to a bar where she consumed alcoholic beverages over a three-hour period. Upon leaving the bar, she stopped to purchase beer. In driving away from the store, she ran a red light and collided with Gloria Tellez’s vehicle.

Tellez brought this action on September 8, 1992, and alleged, among other matters, that Sabans had negligently rented the vehicle and that as a result of Sabans’ violation of the statute requiring inspection of Fernandez’s driver’s license, Fernandez caused the accident that killed Gloria Tellez. The trial court granted summary judgment for defendant Dennis Saban on the claim for negligent entrustment. The court found “[n]o evidence exists that Karla Fernandez’s lack of a driver’s license played any part in causing the accident.” Therefore, as a matter of law, the court concluded that the evidence “failed to show that the Defendants’ negligent entrustment of this vehicle to an unlicensed driver was a proximate cause of or contributed to Karla Fernandez negligently running the red light, hitting and killing” Gloria Tellez, citing Christy v. Baker, 7 Ariz.App. at 355-58, 439 P.2d at 518-20. The trial court also granted summary judgment to Saban Rent-A-Car on the same basis and denied Tellez’s motion for reconsideration.

II. DISCUSSION

Defendants concede that they violated A.R.S. section 28-477(B) by entrusting Fernandez with a rental ear knowing that she was an unlicensed driver. They contend, however, that the trial court correctly found no proximate cause linking either their conduct or Fernandez’s lack of a license with the fatal accident. They argue that under Christy and Quintero v. Continental Rent-A-Car System, Inc., 105 Ariz. 135, 460 P.2d 189 (1969), they are not liable to Tellez.² Tellez, on the other hand, asserts that the court erred in deciding the question of proximate cause as a matter of law and that Christy does not control this case.

One who violates A.R.S. section 28-477(B) is subject to a fíne. A.R.S. § 28-491 (1989). The court in Christy, however, assumed without discussion that a violation of this statute by the renter of an automobile constituted negligence per se. 7 ArizApp. at 355, 439 P.2d at 518. The court’s decision on this point implies that the statute establishes a standard of care for the renting of vehicles. This mandated standard of care necessarily preempts the inquiry in a common law negligence ease of whether the risk of harm in renting a vehicle to an unlicensed driver is an unreasonable one. Restatement (Second) of Torts (“Restatement”) § 286 cmt. d (1965).

We note at the outset, however, that had the legislature intended to establish A.R.S. section 28-477(B) as a standard of conduct in a negligence action, it could have easily done so. Since the legislature did not so provide, the question is whether this court in Christy properly adopted the statute as the standard of conduct for a reasonable person. Restatement § 286 cmt. d. Therefore, we begin with some observations about the relationship between common law negligence and negligence arising from the violation of a statute.

“[N]eghgence is conduct which falls below the standard established by law for the protection of others against unreasonable risk of harm.” Id. § 282, at 9. The standard of conduct required of a reasonable person “may be (a) established by a legislative enactment ... which so provides, or (b) adopted by the court from a legislative enactment ... which does not so provide----” Id. § 285, at 20. A court may adopt a statute as the relevant standard of care if it first determines that the statute’s purpose is in part to protect a class of persons that includes the plaintiff and the specific interest at issue from the type of harm that occurred and against the particular action that caused the harm. Id. § 286, at 25. Violation of the statute thus stamps the defendant’s conduct as negligence per se, id., but will not render the defendant liable to the plaintiff unless the violation is the legal cause of the plaintiffs injury and no other defenses negate liability. Id. § 288B cmt. b, at 38.

Not all statutes establish a standard of conduct applicable in a negligence action. We cannot say that A.R.S. section 28^177 was intended to protect any particular individual or class of persons from harm. Rather, it was intended to further the state’s interest in requiring that all persons who operate motor vehicles on public highways are licensed. See Restatement § 288 cmt. b (statutes intended for the protection of public at large rather than an individual or class of persons do not create the standard of conduct required of a reasonable, person). Therefore, we find no reason to allow the breach of this statute, which the legislature punishes with a fine, to create a cause of action in tort for Tellez. Sabans’ violation of section 28-477(B) is not negligence per se, and their conduct must be measured by the common law standard of conduct of a reasonable and prudent owner of rental vehicles. This conclusion, however, does not dispose of Sabans’ potential liability. We will return to that question after a brief summary of Christy v. Baker.

Defendants cite Christy v. Baker as dis-positive of their liability to Tellez. In that case, Baker, a passenger in a rented ear driven by Walter Walk, was injured in a one-car accident. 7 Ariz.App. at 354, 439 P.2d at 517. She sued Marshall Christy, the owner of a rental car company from whom Walk had rented cars on three prior occasions. On the fourth occasion, when Christy’s employee asked to see Walk’s driver’s license, Walk said that he had one but did not produce it. The employee gave Walk the keys and completed the rental application from company records. Id. at 355, 439 P.2d at 518.

The evidence established that Walk was a competent driver, that his driver’s license had been seized because he had inadvertently failed to appear at a hearing on a prior conviction for driving while intoxicated, and that had he appeared, he would have kept his license. Id. at 355, 357, 439 P.2d at 518, 520. This court relied on Lutfy v. Lockhart, 37 Ariz. 488, 295 P. 975 (1931), to conclude that lack of a driver’s license was not contrary evidence of Walk’s incompetence. 7 Ariz. App. at 357,439 P.2d at 520.

Christy’s liability thus hinged solely on a violation of A.R.S. section 28-477(B). Although the jury returned a verdict for the plaintiff, this court reversed. The court assumed that the statute was intended to protect the public safety, and because Christy admitted its violation, that Christy was guilty of negligence per se. Id. at 355, 439 P.2d at 518. Had Christy rented Walk the ear knowing that he was incompetent, the court conceded that proximate cause might exist between the statutory violation and the accident. See id. at 357, 439 P.2d at 520. But because the court found that Walk’s negligent driving alone caused the accident, it held as a matter of law that Christy’s statutory breach was not the proximate cause of Baker’s injuries. Id. at 357-58, 439 P.2d at 520-21.

For reasons stated above, the court erred in finding A.R.S. section 28-477(B) to be a “safety” statute that created a standard of care the violation of which labelled Christy’s conduct negligent. Further, although the court disposed of the case by finding no proximate cause, more accurately, Christy was simply not negligent: Christy knew that Walk was a competent driver and had produced a license on prior occasions. On the day of the accident, Walk stated that he had a license, and it was merely fortuitous that he did not. Walk’s license had been revoked for failure to appear at a scheduled hearing, but had he actually received the notice and attended the hearing, he would have retained his license and thus had it in his possession on the occasion of the fourth rental. Christy’s duty as a renter of vehicles was “to act reasonably in the light of foreseeable and unreasonable risks.” Rogers ex rel. Standley v. Retrum, 170 Ariz. 399, 400, 825 P.2d 20, 21 (App.1991).

From Christy’s perspective, he had no reason to foresee an unreasonable risk of harm when he rented to Walk, a driver he knew from prior experience to be competent. See id. at 402-03, 825 P.2d at 23-24; see also W. Page Keeton et al., Prosser and Keeton on the Law of Torts, § 42 at 275 (“In [some] cases the standard of reasonable conduct does not require the defendant to recognize the risk, or to take precautions against it____ When courts say that his conduct is not the ‘proximate cause’ of the harm, they not only obscure the real issue, but suggest artificial distinctions of causation which have no sound • basis____”).

Here, by contrast, Sabans did not know that Fernandez was a competent driver. Sabans contend, however, that their knowledge that she did not have a license nevertheless gave them no reason to believe that she was an incompetent driver or to foresee that she might drive negligently. We disagree. Although Sabans’ statutory breach does not render their conduct negligence per se, we conclude that the owner of a rental car agency owes a common law duty to other motorists to guard against unreasonable risks of harm created by persons to whom it rents vehicles. Davis v. Cessna Aircraft Corp., 182 Ariz. 26, 31, 893 P.2d 26, 31 (App.1994) (duty obliges one to act reasonably in the light of foreseeable and unreasonable risks); see also Petolicchio v. Santa Cruz County Fair & Rodeo Assoc., Inc., 177 Ariz. 256, 261, 866 P.2d 1342, 1347 (1994) (whether duty exists is decided by the court).

Having concluded that Sabans had a duty to protect the public from the unreasonable risk of harm of entrusting incompetent drivers with motor vehicles, we must determine whether a reasonable jury could conclude that Sabans’ actions breached this duty.³ The dissent contends that Sabans’ knowledge that Fernandez was unlicensed cannot support an action for negligent entrustment. We respectfully disagree.

Unlike Christy, where the rental car owner knew that the driver had exhibited his license and successfully rented and returned cars on other occasions, Sabans did not know if Fernandez possessed even minimal driving skills. We acknowledge that the mere absence of a valid driver’s license is not necessarily indicative of a person’s driving skills. For example, one who has met the minimum licensing standards and has been licensed may have let his license expire. Thus, the possibility exists that an unlicensed driver is fully competent to operate a motor vehicle.

Nevertheless, a reasonable person in Sabans’ position should have known that it was equally possible that Fernandez was unlicensed because she lacked the minimum qualifications to obtain a license. For example, she might be unlicensed because she failed to demonstrate understanding of the driving laws and of safe driving practices or because her license had been revoked as a result of the addictions, failures, or other disabilities listed in A.R.S. section 28-413. Indeed, had Sabans inquired, Fernandez might have revealed that her license had been revoked for DUI violations. We conclude that reasonable minds could differ on whether Sabans’ act of renting to an unlicensed driver without investigating the reason for the absence of a license created an unreasonable risk of harm to the public.

We are not persuaded by the dissent’s assertion that we have done violence to the law of negligent entrustment.⁴ If Sabans rented to Fernandez after learning that her license had been revoked for DUI violations, Sabans could be found negligent. See Restatement § 308 cmt. b. illus. 4. (If A lends his automobile to B, whose license has to A’s knowledge been revoked for reckless driving, and B negligently runs down C with A’s vehicle, A is negligent toward C.). To allow Sabans to avoid all liability as a matter of law simply by turning a deaf ear to the reasons for Fernandez’s lack of a license would violate the legislative policy articulated in A.R.S. section 28-477. Id. § 308 cmt. b.

Nor are we persuaded by the dissent’s citation of Anderson Aviation Sales Co. v. Perez, 19 Ariz.App. 422, 426, 508 P.2d 87, 91 (1973), and Powell v. Langford, 58 Ariz. 281, 285, 119 P.2d 230, 232 (1941). Although those cases state the general rule, they do not restrict the tort of negligent entrustment to cases in which the owner entrusts a vehicle to one known to be incompetent or inexperienced. See Restatement § 308. The latter section applies where the “third person’s known character or the peculiar circumstances of the case are such as to give the actor good reason to believe that the third person may misuse [the instrumentality].” Id. cmt. b.

Nevertheless, even assuming that a jury were to find Sabans negligent, before Tellez may recover, the jury must also find that Sabans’ conduct was the legal and proximate cause of Gloria Tellez’s death. Proximate cause is “that which, in a natural and continuous sequence, unbroken by an efficient intervening cause, produces an injury, and without which the injury would not have occurred.” Brand v. J.H. Rose Trucking Co., 102 Ariz. 201, 205, 427 P.2d 519, 523 (1967). To be a proximate cause, Sabans’ conduct need have contributed only slightly to the injury. Ontiveros, 136 Ariz. at 505, 667 P.2d at 205. Ordinarily, proximate cause is a jury question. Smith v. Johnson, 183 Ariz. 38, 41, 899 P.2d 199, 202 (App.1995).

Here, Sabans’ negligence will remain a proximate cause of the injury despite Fernandez’s intervening negligence if (1) Sabans’ conduct was a cause-in-fact and (2) the intervening acts were foreseeable by a reasonable person in Sabans’ position and do not appear abnormal or extraordinary in hindsight after the event. Robertson v. Sixpence Inns of Am., Inc., 163 Ariz. 539, 546, 789 P.2d 1040, 1047 (1990); Ontiveros, 136 Ariz. at 505-06, 667 P.2d at 205-06.⁵

Cause-in-fact turns on whether Sabans helped to cause the accident that resulted in Gloria Tellez’s death and whether that accident would not have occurred but for Sabans’ conduct. We cannot answer these questions as a matter of law in the negative. If Sabans had not rented to Fernandez without first investigating the reason for her lack of a license, Fernandez would presumably not have been driving the ear and could not have collided with Gloria Tellez seven days later. A reasonable jury could conclude that Sabans’ conduct “helped cause” the accident and that the accident would not have occurred without that conduct.

Fernandez’s own behavior was, of course, an intervening act and a cause-in-fact of the accident. An intervening act relieves the original actor of liability for his negligence if it “steps between the original wrongful act or omission of the defendant and the injury to the plaintiff ... and produces a result which would have not otherwise occurred.” City of Phoenix v. Schroeder, 1 Ariz.App. 510, 516, 405 P.2d 301, 307 (1965). The intervening act, however, must be both unforeseeable and, with the benefit of hindsight, abnormal or extraordinary. Robertson, 163 Ariz. at 546, 789 P.2d at 1047.

The definition of a reasonably foreseeable event is an event that might “reasonably be expected to occur now and then, and -would be recognized as not highly unlikely if it did suggest itself to the actor’s mind.” Keeton, et al., supra, § 44, at 307. As we stated in Rogers, in determining, the legal cause of an injury, we “ ‘take a broad view of the class of risks and victims that are foreseeable, and the particular manner in which the injury is brought about need not be foreseeable.’ ” 170 Ariz. at 401, 825 P.2d at 22 (citation omitted). Further, the “reckless or criminal nature of an intervenor’s conduct does not place it beyond the scope of a duty of reasonable care if that duty entails foresight and prevention of precisely such a risk” Id. at 401-02, 825 P.2d at 22-23 (emphasis added).

The dissent argues that Fernandez’s negligence was an intervening superseding cause. The dissent claims that no reasonable person in Sabans’ position could foresee that “renting a ear to Fernandez, through Pitts, for one day, would result in Fernandez absconding with the car, getting heavily intoxicated, running a red light, and colliding with another vehicle eight days later.”⁶ We think the issue is not whether Sabans should have foreseen that Fernandez would “abscond” with the vehicle and become intoxicated. Rather, the issue is whether a reasonable person in Sabans’ position would have foreseen that Fernandez might operate the vehicle negligently and whether, with the benefit of hindsight, her negligence is abnormal or extraordinary.

As we discussed above, a reasonable person in Sabans’ situation should have known that Fernandez’s absence of a license might be related to her competency as a driver. Consequently, Sabans should have made further inquiry to determine why Fernandez did not have a driver’s license. Had Sabans inquired, they presumably would have learned that Fernandez’s license had been revoked for DUI convictions, and as a result of that information, would not have rented the vehicle.

Similarly, a reasonable jury could find that, under these circumstances, an unlicensed driver’s negligent driving eight days after the car was entrusted to her was neither abnormal nor extraordinary in hindsight. Where cause-in-fact exists, remoteness in time and space do not defeat proximate cause. Keeton et al., supra, § 36, at 282-83. The legislature declared by the enactment of A.R.S. section 28-477(B) that renting automobiles to unlicensed drivers increases the risk of harm to the public. We cannot say as a matter of law that Fernandez’s negligence a week later was outside the scope of the risk created by Sabans’ conduct in failing to investigate the reason for Fernandez’s lack of a license. See Rossell v. Volkswagen of Am., 147 Ariz. 160, 169, 709 P.2d 517, 526 (1985), cert. denied, 476 U.S. 1108, 106 S.Ct. 1957, 90 L.Ed.2d 365 (1986) (scope of risk due to original actor’s negligence may include foreseeable negligent or criminal acts of others); Central Alarm of Tucson v. Ganem, 116 Ariz. 74, 77, 567 P.2d 1203, 1206 (App.1977) (intervening burglary “within the ambit of risk” created by original actor’s negligence).

III. CONCLUSION

We disagree with the trial court’s reliance on Christy v. Baker and its ruling that, as a matter of law, Gloria Tellez’s death was not a proximate result of Sabans’ breach of A.R.S. section 28-477(B). We conclude that although a violation of 28-477(B) is not negligence per se, a reasonable jury may find that Sabans were negligent in renting to Fernandez with knowledge that she did not possess a driver’s license. We therefore reverse the grant of summary judgment and remand for further proceedings consistent with this opinion.

FIDEL, J., concurs.

1 . A.R.S. § 28-477(B) states:

No person shall rent or lease a motor vehicle to another until he has inspected the driver’s license of the person to whom the vehicle is to be rented or leased and compared and verified the signature thereon with the signature of the person written in his presence.

2 . Sabans' reliance on Quintero is misplaced. Quintero predates our comparative negligence statute, A.R.S. section 12-2505 (Supp.1995). That case arose when Walter Walk’s surviving widow and children sued the automobile rental agency for negligently entrusting him with the vehicle in which he was killed and the plaintiff in Christy was injured. The complaint alleged that Walk's reckless and negligent driving caused the collision. 105 Ariz. at 136, 460 P.2d at 190. Our supreme court affirmed summary judgment for the defendant because under those facts, Walk’s negligence was the proximate cause of his own death, and therefore, he could not have sued Continental for his injuries. Furthermore, his survivors could sue Continental for Walk's death only if, had he survived, he could have maintained an action on his own behalf. Because he could not, they could not, and the trial court properly dismissed the action. Id. The case, however, does not say that no proximate cause existed between Continental's negligence and Walk's death.

3 . The dissent notes that we have reached issues not raised below or in the appellate briefs. The practice of not addressing issues for the first time on appeal "is merely a rule of procedure, and not a matter of jurisdiction." Town of So. Tucson v. Board of Supervisors of Pima County, 52 Ariz. 575, 582, 84 P.2d 581, 584 (1938). A legal principle, although not proposed by either party, should be adopted if it will expedite enforcement of a right or redress an injustice. Rubens v. Costello, 75 Ariz. 5, 9, 251 P.2d 306, 308 (1952) (quoting 4 C J.S. Appeal and Error § 242). Furthermore, the parties’ statement of the issues does not preclude us from raising an error or addressing an issue not contemplated by the parties. Word v. Motorola, Inc., 135 Ariz. 517, 520, 662 P.2d 1024, 1027 (1983).

4 . We note in passing that other courts have found entrustment of a vehicle to an unlicensed driver is some evidence of negligence. See Kauffman v. Gullace, 252 N.J.Super. 467, 600 A.2d 143, 147 (App.Div.1991) (entrusting a vehicle to an unlicensed person “might be considered negligence”); Williams v. Bolding, 6 Ohio App.3d 48, 452 N.E.2d 1346, 1348 (1982) (lack of a license is relevant evidence in negligent entrustment); see also Mason v. New, 475 So.2d 854, 856 (Ala.1985) (lack of a license is probative of driver’s incompetence in negligent entrustment action); Johnson v. Owens, 639 N.E.2d 1016, 1022 (Ind.App.1994) (negligent entrustment could be premised on entrusting car to unlicensed driver, but no evidence entrustor knew driver was unlicensed); Tri-State Truck & Equip. Co. v. Stauffer, 24 Md.App. 221, 330 A.2d 680, 685 (1975) (when a statute requires licenses and forbids owners from allowing unlicensed persons to drive, statutory violation is evidence of negligence or is negligence per se); LaRoque v. Sanchez, 641 S.W.2d 298, 301 (Tex.App.1982) (driver’s lack of license is an element of negligent entrustment).

5 . Foreseeability of risk plays a dual role in negligence: it not only defines the standard of care but also determines whether an actor’s conduct was the proximate cause of the injury. Jefferson L. Lankford & Douglas A. Blaze, The Law of Negligence in Arizona § 2.5, at 13 (1992).

6 . The record is clear that the car was rented by Pitts because Fernandez did not have a driver’s license. Sabans knew that the car was rented for Fernandez’s use.