Judge: Stephen P. Pfahler, Case: 21STCV28908, Date: 2023-05-11 Tentative Ruling

Case Number: 21STCV28908    Hearing Date: May 11, 2023    Dept: F49

Dept. F-49

Date: 5-11-23

Case #21STCV28908

Trial Date: Not Set

 

DEMURRER

 

MOVING PARTY: Defendant, Rideshare Car Rentals, LLC

RESPONDING PARTY: Plaintiffs, Rose Moroso, et al.

 

RELIEF REQUESTED

Demurrer to the Third Amended Complaint

·         1st Cause of Action: Negligence

·         2nd Cause of Action: Negligent Hiring

·         3rd Cause of Action: Negligent Entrustment

·         4th Cause of Action: Negligent Supervision

·         5th Cause of Action: Survival Action

 

SUMMARY OF ACTION

On June 24, 2021, a 2020 Ford Transit van owned by defendant Distinct Cars, LLC and operated by defendant Jacob Sanchez collided with motorcycle ridden by Lawrence Moroso. The incident occurred on The Old Road in Newhall, California. Lawrence died as a result of the injuries. Plaintiffs allege Jacob Sanchez was operating the vehicle on behalf of employer, defendant Newegg.

 

On August 5, 2021, Plaintiffs filed a complaint for Negligence, Negligent Hiring, Negligent Entrustment, Negligent Supervision, and Survival Action. On September 9, 2021, Distinct Cars answered the complaint. On September 17, 2021, Newegg Logistic Services answered the complaint and filed a cross-complaint against PDQ Pickup, LLC, for Express Indemnity, Breach of Contract (Duty to Defend), Equitable Comparative Indemnity, Declaratory Relief, Duty to Indemnify, and Declaratory Relief for Duty to Defend. On September 17, 2021, Distinct Cars, LLC filed a cross-complaint against PDQ Pickup, LLC, PDQ Rideshare Rentals, and Rideshare Rentals, Inc. for Implied Indemnity, Contribution and Indemnity, Declaratory Relief, Express Indemnity, and Negligence.

 

On December 8, 2021, the court (Department 32) granted the motion to strike brought by Newegg, Inc. Plaintiffs filed their first amended complaint for Negligence, Negligent Hiring, Negligent Entrustment, Negligent Supervision, and Survival Action on January 3, 2022. On February 2, 2022, the court entered the stipulation of the parties to file the second amended complaint. Plaintiffs filed their second amended complaint for Negligence, Negligent Hiring, Negligent Entrustment, Negligent Supervision, and Survival Action on February 16, 2022.

 

The second amended complaint adds additional allegations regarding the added defendants, as well as new factual claims regarding the existence of a Netradyne dashboard or windshield mounted camera and communication system which monitors vehicle operations, tracks positioning, and provides on board video traffic surveillance as well as other safety features for the vehicle operator. Plaintiffs allege Jacob Sanchez intentionally covered the camera lens(es) prior to the time of the collision. Plaintiff also alleges Jacob Sanchez was convicted for a number of prior traffic infractions, and disposed of “evidence” following the collision prior to the arrival of the police department, thereby delaying the provision of care of Lawrence Moroso.

 

On May 5, 2022, the action was transferred to Department 49. On September 30, 2022, the court sustained the demurrer of Distinct Cars, LLC to the first and fifth causes of action in the second amended complaint with leave to amend. On October 28, 2022, Plaintiffs filed their third amended complaint for Negligence, Negligent Hiring, Negligent Entrustment, Negligent Supervision, and Survival Action. On January 25, 2023, the court sustained the demurrer of Distinct Cars, LLC to the third amended complaint without leave to amend. The court entered the dismissal in favor of Distinct Cars, LLC on March 24, 2023. On May 3, 2023, Distinct Cars, LLC dismissed its cross-complaint.

 

RULING: Overruled.

Defendant Rideshare Car Rentals, LLC (“Rideshare”) brings the subject demurrer to the entire third amended complaint on grounds of insufficient legal basis of support and uncertainty. Rideshare contends the plain language of the operative complaint only supports an indirect rental relationship without a basis of liability above and beyond federal statutory protections. Plaintiff in opposition counters that all causes of action actions are well pled against Rideshare based on both extensive citation to the operative complaint, and an argument that the operative complaint alleges a claim based on a failure to comply with California Vehicle code requirements for the verification of a drivers license by the vehicle operator, as well as other restrictions, and an agency theory of liability. Federal law is therefore preempted. Rideshare in reply denies any claims involving direct liability.

 

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . . .” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated.  (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.

 

“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616; Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139 [“[U]nder our liberal pleading rules, where the complaint contains substantive factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty should be overruled or plaintiff given leave to amend.]

 

Rideshare refers to the prior successful demurrer of Distinct Cars, LLC regarding federal preemption under the Graves Amendment in support of the first argument for its demurrer. The ruling remains undisputed. Rideshare contends the Graves Amendment applies in that it was privity of contract for the subject vehicle with Distinct Cars and/or the vehicle was under common ownership or control, thereby qualifying for preemption.

 

Plaintiff in opposition challenges any application of the Graves Amendment based on the plain language of the statute regarding ownership. The operative complaint identifies Rideshare as the “Platform” entity with a certain level of control and discretion based on driver age and record.

 

The court again reviews the Graves Amendment as summarized in statute:

 

(a) In general -- An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), 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 (or an affiliate of the owner) is engaged in the trade or business of renting or leasing motor vehicles; and

(2) there is no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner).

(b) Financial responsibility laws--Nothing in this section supersedes the law of any State or political subdivision thereof--

(1) imposing financial responsibility or insurance standards on the owner of a motor vehicle for the privilege of registering and operating a motor vehicle; or

(2) imposing liability on business entities engaged in the trade or business of renting or leasing motor vehicles for failure to meet the financial responsibility or liability insurance requirements under State law.

(c) Applicability and effective date – Notwithstanding any other provision of law, this section shall apply with respect to any action commenced on or after the date of enactment of this section without regard to whether the harm that is the subject of the action, or the conduct that caused the harm, occurred before such date of enactment.

(d) Definitions--In this section, the following definitions apply:

(1) Affiliate--The term “affiliate” means a person other than the owner that directly or indirectly controls, is controlled by, or is under common control with the owner. In the preceding sentence, the term “control” means the power to direct the management and policies of a person whether through ownership of voting securities or otherwise.

(2) Owner--The term “owner” means a person who is--

(A) a record or beneficial owner, holder of title, lessor, or lessee of a motor vehicle;

(B) entitled to the use and possession of a motor vehicle subject to a security interest in another person; or

(C) a lessor, lessee, or a bailee of a motor vehicle, in the trade or business of renting or leasing motor vehicles, having the use or possession thereof, under a lease, bailment, or otherwise.

(3) Person--The term “person” means any individual, corporation, company, limited liability company, trust, association, firm, partnership, society, joint stock company, or any other entity.

 

49 U.S.C.A. § 30106

 

The plain language of the statute preempts any claims against a rental car agency liability based simply on the provision of a vehicle without further control of the vehicle or operator (e.g. no negligence or criminal wrongdoing). (49 U.S.C.A. § 30106(a)(2).) Consistent with the prior order sustaining the demurrer, the court again finds the existence of preemption on negligence claims arising simply from ownership of a vehicle without any further undertaking of duty to insure the safe operation of the vehicle via driver vetting or vehicle controls. (Carton v. General Motor Acceptance Corp. (8th Cir. 2010) 611 F.3d 451, 457; Garcia v. Vanguard Car Rental USA, Inc. (11th Cir. 2008) 540 F.3d 1242, 1249.)

 

“[T]he Graves Amendment prohibits vicarious liability claims against owners of leased vehicles.” (Carton v. General Motor Acceptance Corp., supra, 611 F.3d at p. 457.) State laws can create exceptions to the general bar on liability for claims arising in negligent entrustment based on the requirement of a safe driving record. (Ibid.) Other cases considering the statute and public policy are in accord. (Garcia v. Vanguard Car Rental USA, Inc. (11th Cir. 2008) 540 F.3d 1242, 1249; Green v. Toyota Motor CreditCorp (E.D.N.Y. 2009) 605 F.Supp.2d 430, 436; Dupuis v. Vanguard Car Rental USA, Inc. (M.D. Fla. 2007) 510 F.Supp.2d 980, 984; Johnson v. Agnant (D.D.C. 2006) 480 F.Supp.2d 1, 3-4; Meyer v. Nwokedi (Minn. 2010) 777 N.W.2d 218, 223-224; see Berkan v. Penske Truck Leasing Canada, Inc. (W.D.N.Y. 2008) 535 F.Supp.2d 341, 345.)

 

Given the legal framework, the court reviews the operative rental car agreement incorporated into the operative complaint. The agreement identities Rideshare as a “Platform” further defined as a “third party facilitating the transaction between car owners and car drivers by providing this platform.” [Third Amend. Comp., Ex. C.] Nothing in the language of the agreement incorporated into the operative complaint in any way identifies Rideshare as an owner, thereby squarely placing it within the course and scope of the Graves Amendment.

 

Section 4 of the agreement further vests Rideshare with apparent control of the drivers allowed to operate the vehicle based on a 21 year age minimum, and valid driers license. The agreement allows for a denial of use of the vehicle in case of a suspended license or other items reported by the “Motor Vehicle Department,” in the relevant jurisdiction or other “reliable source” providing identity validation services.

 

The lack of ownership and retained interest and control of the vehicle driver precludes any finding of Graves Amendment preemption, and in fact establishes a basis of exemption as addressed in the standard. The demurrer is therefore overruled on this basis.

 

Rideshare next contends the operative complaint lacks facts establishing any conduct by Rideshare caused the collision. The opposition to this specific argument remains non-specific in that Plaintiff seemingly dedicates the vast majority of the opposition to challenging the Graves Amendment and otherwise only offers a conclusive statement of “direct” liability with recitation of certain paragraphs in the operative complaint.

 

The argument apparently arises from any denial of an undertaking or imposition of any basis of duty against Rideshare as a “platform” operator. The argument seeks to analogize the complaint as one akin to a “common carrier passenger” case recently addressed, whereby the Second District Court of Appeal found no basis of duty based on the provision of the Uber ride sharing mobile phone application. (Jane Doe No. 1 v. Uber Technologies, Inc. (2022) 79 Cal.App.5th 410, 420-422.)

 

The court finds the argument first relies on inference beyond the scope of the demurrer itself in that nothing in the language of the agreement referred to in Exhibit C of the operative complaint in any way renders Rideshare a “platform” operator similar to Uber. Even if Rideshare were somehow factually identical in operations to Uber, the allegations regarding the negligent screening of the driver supports the finding of a special duty of care, rather than the more neutral position found for mobile application users summoning an Uber driver for transportation. For purposes of the subject demurrer, the court also finds Rideshare’s breach of duty by allowing the vehicle to be operated by an unqualified driver sufficiently pled. [Third Amend. Comp., ¶¶ 58-60, 63, 82. 87, 90, 94.] (Brown v. USA Taekwondo (2021) 11 Cal.5th 204, 221.)

 

The demurrer is therefore overruled. Rideshare is ordered to answer the third amended complaint within 10 days of this order.

 

Motion to Strike set for June 30, 2023.

 

Rideshare to provide notice to ALL parties.