Judge Audra Mori, Case 20STCV37144 2022-09-14 Tentative Ruling

Plaintiffs Terri Lynn Scrape, Linda Sue Badger, and Jay Esperance (collectively, “Plaintiffs”) filed this action against defendant Enterprise Holdings, Inc., EAN Holdings, LLC (“EAN”), and Xiao Mi (“Mi”) for damages arising from an automobile accident. The operative First Amended Complaint (“FAC”) alleges the Mi was operating a vehicle owned and entrusted to Mi by EAN and Enterprise. The FAC asserts causes of action for action for motor vehicle and negligence.

Defendant EAN now demurs to the FAC arguing it fails to state sufficient facts to constitute a claim against it, and that EAN as a rental car company cannot be held vicariously liable for the negligent acts of its customer under 49 U.S.C. § 30106 (the “Graves Amendment”). The demurrer is unopposed.

A demurrer is a pleading used to test the legal sufficiency of other pleadings. It raises issues of law, not fact, regarding the form or content of the opposing party's pleading (complaint, answer or cross-complaint). (CCP §§ 422.10, 589; see Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) It is not the function of the demurrer to challenge the truthfulness of the complaint; and for purposes of the ruling on the demurrer, all facts pleaded in the complaint are assumed to be true. (Donabedian, 116 Cal.App.4th at 994.)

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian, supra, 116 Cal.App.4th at 994.) No other extrinsic evidence can be considered. (Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881 [error for court to consider facts asserted in memorandum supporting demurrer]; see also Afuso v. United States Fid. & Guar. Co. (1985) 169 Cal.App.3d 859, 862 [disapproved on other grounds in Moradi-Shalal v. Fireman’s Fund Ins. Cos. (1988) 46 Cal.3d 287] [error to consider contents of release not part of court record].)

A demurrer can be utilized where the “face of the complaint” itself is incomplete or discloses some defense that would bar recovery. (Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971-72.) The “face of the complaint” includes material contained in attached exhibits that are incorporated by reference into the complaint; or in a superseded complaint in the same action. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94; see also Barnett v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505 [“[W]e rely on and accept as true the contents of the exhibits and treat as surplusage the pleader’s allegations as to the legal effect of the exhibits.”]).

A demurrer can only be sustained when it disposes of an entire cause of action. (Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97,119; Kong v. City of Hawaiian Gardens Redev. Agency (2003) 108 Cal.App.4th 1028, 1046.)

Before filing a demurrer, the demurring party is required to meet and confer with the party who filed the pleading demurred to for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer. (CCP § 430.41(a).)

The court finds Defendant has fulfilled this requirement prior to filing the demurrer. (Demurrer Miller Decl. ¶¶ 9-10.)

EAN requests the Court take judicial notice of a Statement of Information for EAN and Enterprise Rent-A-Car Company of Los Angeles, LLC (“Enterprise”), and that as provided in each Statement, that EAN and Enterprise are in the business of renting and/or leasing vehicles. (Dem. Exhs. C-D.)

The request as to each Statement of Information is granted pursuant to Evidence Code § 452(c). (See Friends of Shingle Springs Interchange, Inc. v. County of El Dorado (2011) 200 Cal.App.4th 1470, 1483-84.) Further, the Court takes judicial notice that the Statement for EAN states that the type of business or services of EAN is “[m]otor vehicle rental and related service,” and that the Statement for Enterprise states that the type of business or services of Enterprise is “motor vehicle rental, sharing and sales.” (Dem. Exhs. B-C.)

(a) In general. An owner of a motor vehicle that rents or leases the vehicle to a person … shall not be liable under the law of any State … by reason of being the owner of the vehicle … for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if—

(1) the owner … is engaged in the trade or business of renting or leasing motor vehicles; and

In addition, the elements of a cause of action for negligence are duty, breach, causation, and damages.” (Johnson v. Prasad (2014) 224 Cal.App.4th 74, 78.) “Ordinarily, negligence may be alleged in general terms, without specific facts showing how the injury occurred, but there are ‘limits to the generality with which a plaintiff is permitted to state his cause of action, and ... the plaintiff must indicate the acts or omissions which are said to have been negligently performed. He may not recover upon the bare statement that the defendant’s negligence has caused him injury.’ [Citation].” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 527.)

Here, EAN contends that the FAC contains merely conclusory allegations without any supporting material facts, and that under the Graves Amendment, it is not liable for the actions of its renters, so Plaintiff’s claims are barred against EAN.

The FAC alleges that Mi caused an accident with Plaintiffs’ vehicle on the freeway after making an unsafe lane change, which caused Plaintiffs to collide with a concrete wall. (FAC at p. 4.) Against EAN, the FAC alleges that it is liable for negligently entrusting the vehicle to Mi and as the registered owner of the vehicle driven by Mi. (Ibid.)

The Graves Amendment precludes vicarious liability of those that rent motor vehicles solely based on ownership, and EAN’s judicially noticeable evidence shows that it is in the business of renting motor vehicles. Notably, there are no other allegations imposing liability against EAN, such as that it employed Mi or that it had any sort of agency relationship with Mi; these allegations are made solely against Does 1 to 50. Moreover, Plaintiff does not oppose the motion or dispute that the vehicle Mi was driving was a rental vehicle from EAN. Consequently, the FAC is vague as to how EAN is liable based only on its ownership of the relevant vehicle when it is in the business of renting vehicles. Furthermore, the FAC merely alleges that EAN negligently entrusted the vehicle to Mi in a conclusory manner with no factual allegations to support the claim. This is insufficient to allege that EAN is liable for negligently entrusting the vehicle to Mi. (See Jeld-Wen, Inc. v. Superior Court (2005) 131 Cal.App.4th 853, 863–64, 864 fn. 8.) Given the judicially noticeable evidence, and that there are no other allegations concerning how the relevant vehicle was entrusted to Mi and how that entrustment was negligent, the FAC is vague as to how EAN is liable for the accident.

EAN’s demurrer to the complaint is sustained. The Court finds there is a reasonable possibility the FAC can be cured to state a claim against EAN.

Hon. Audra Mori

Judge of the Superior Court