Cates v. Creamer

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
November 28, 2005
FOR THE FIFTH CIRCUIT
_____________________ Charles R. Fulbruge III
Clerk
No. 03-10404
_____________________

PRISCILLA S. CATES, Individually and as Guardian of the Person and
Estate of Bobby Ray Cates, an Incapacitated Person,

Plaintiff - Appellant-Cross-Appellee,

versus

MATTHEW SCOTT CREAMER,

Defendant - Appellee-Cross-Appellant

LAMAE CREAMER; HERTZ CORPORATION,

Defendants - Appellees.
__________________________________________________________________

Appeal from the United States District Court
for the Northern District of Texas, Wichita Falls
USDC No. 7:00-CV-121
_________________________________________________________________

Before JOLLY, JONES, and DEMOSS, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

The lease for the Hertz rental car was executed in Florida.

The wreck and Bobby Cates’s injuries occurred in Texas. The

defendant driver, Matthew Scott Creamer, momentarily went to sleep

while driving. Mr. Cates’s car had stalled on the side of the

highway when Creamer hit it, severely injuring Bobby Cates. The

first jury found no negligence and returned its verdict for the

defendant, Creamer. The district court granted a new trial. The

second jury found Creamer 70% at fault for the accident and awarded

damages to the plaintiff. The court, however, applied Texas law
and exonerated Hertz from liability. Cates hopes to collect the

award from Hertz based on the Florida law relating to vicarious

liability. Creamer hopes to reinstate the first jury’s verdict,

which means we have to decide whether Creamer’s falling asleep at

the wheel was fault-free. If we uphold the grant of a new trial

and the verdict of the second jury, then we must decide whether

Texas or Florida law applies to determine Hertz’s vicarious

liability. If Texas law applies, Hertz prevails in this appeal.

If Florida law applies, Cates prevails.

Ultimately, we uphold the district court’s grant of a new

trial to Cates and, consequently, the verdict of the second trial.

We further hold that Florida law applies to the vicarious liability

issue and remand the case to the district court for further

proceedings applying Florida law.

I

A

On June 29, 1998, Florida residents Matthew and Lamae Creamer

rented a mini-van from Hertz Corporation (“Hertz”) in Florida.1

They planned to travel from Panama City, Florida to Spearman, Texas

for a family reunion. They apparently told the Hertz agent that

they planned to make the 24-hour trip without stopping for the

night by alternating drivers. The Creamers signed a rental

agreement that stated: “This agreement is solely for the purpose of

1
Hertz is incorporated in Delaware and its principal place of
business is New Jersey.

2
creating a bailment that allows You to use the car as permitted by

this agreement.” Under the agreement, the Creamers could drive the

minivan anywhere in the United States and Canada, but they were

obligated to return it to Florida. The agreement referenced

Florida’s financial responsibility and “no fault” personal injury

laws but did not contain a choice-of-laws provision.

The Creamers began driving at around noon on June 29. Matthew

Creamer (“Creamer”) drove approximately eight hours from Panama

City to New Orleans, Louisiana, at which time Mrs. Creamer began to

drive. She drove through the night into Texas while Creamer slept

in the car. He awoke near daybreak to discover that the car was

pulled over to the side of the road and that Mrs. Creamer was

asleep. He then resumed driving and set the cruise control to 70

miles per hour, the highway’s speed limit. Creamer fell asleep at

the wheel and awoke as he hit Bobby Ray Cates’s (“Mr. Cates”)

parked car. Tragically, Mr. Cates was standing in front of the

front passenger door and the impact of the collision projected him

several feet into the roadway.

As a result of the severe head injuries he sustained, Mr.

Cates is unable to work and is almost completely incapacitated.

Mr. Cates’s medical expenses exceed $200,000. He resides at a

long-term care facility. Priscilla Cates (“Cates”) is his legal

guardian.

B

3
 Cates filed a diversity suit in the Northern District of Texas

against Creamer for negligent operation of a motor vehicle under

Texas law, seeking compensation for medical expenses and lost

wages. She also sued Hertz under Florida’s “dangerous

instrumentality doctrine,” which imposes vicarious liability on the

owner/lessor of a vehicle who entrusts it to a lessee who operates

it negligently, causing damages. Hertz moved for summary judgment,

contending that Texas law, not Florida law, controls the vicarious

liability issue. Texas does not recognize the dangerous

instrumentality doctrine; instead, it has adopted the doctrine of

negligent entrustment, which provides that for Cates to make Hertz

vicariously liable she must show: “(1) entrustment of a vehicle by

the owner; (2) to an unlicensed, incompetent, or reckless driver;

(3) that the owner knew or should have known to be unlicensed, (4)

that the driver was negligent on the occasion in question and (5)

that the driver's negligence proximately caused the accident.”

Schneider v. Esperanza Transmission Co., 744 S.W.2d 595, 596 (Tex.

1987). The district court granted Hertz’s motion and dismissed

Cates’s suit against Hertz after finding that Cates could not make

a prima facie case of negligent entrustment against Hertz under

Texas law. It subsequently denied Cates’s motion to reconsider its

summary judgment order.

The first trial, with Creamer as the sole defendant, began on

July 9, 2002. Creamer denied that he was liable and argued that

4
Cates was contributorily negligent. The jury returned a verdict in

which it found that Creamer was not negligent. The district court,

however, granted Cates’s motion for new trial. The second jury

returned a verdict in favor of Cates, finding that Creamer was 70%

negligent and Mr. Cates was 30% negligent. The jury assessed

actual damages of $3,080,000.00. The district court entered

judgment of $2,156,000 plus prejudgment interest of $851,782.47.

This appeal and cross appeal present two issues. First, Cates

appeals the summary judgment dismissing Hertz, contending that

Florida law, not Texas law, controls the issue of vicarious

liability. Creamer cross-appeals the grant of Cates’s motion for

new trial. He urges that the district court abused its discretion

in granting the motion for new trial because the first verdict was

not against the great weight of the evidence. Creamer requests

that we reinstate the first verdict. We will address this issue

first.

II

We review a district court’s grant of a motion for new trial

for abuse of discretion. Gov’t Fin. Servs. One Ltd. Partnership v.

Peyton Place, Inc., 62 F.3d 767, 774 (5th Cir. 1995). Where a

motion for a new trial is granted, we scrutinize that decision more

closely. Scott v. Monsanto Co., 868 F.2d 786, 789 (5th Cir. 1989)

(noting that when a motion for new trial is granted “the broad

discretion allowed to the trial court is tempered by the deference

5
due to a jury[]”). We review a grant of summary judgment de novo,

applying the same standard as the district court. U.E. Texas One-

Barrington, Ltd. v. Gen. Star Indem. Co., 332 F.3d 274, 276 (5th

Cir. 2003). Finally, we review a district court’s conflict of laws

determination de novo. Spence v. Glock, 227 F.3d 308, 311 (5th

Cir. 2000).

III

A

A district court can grant a motion for new trial if the first

trial was unfair or if the jury verdict was against the great

weight of the evidence. Monsanto, 868 F.2d at 789. Several

factors guide us in the review of a district court’s order granting

a new trial: We consider the simplicity of the issues, “pernicious

occurrences” at trial, and the extent to which the evidence is in

dispute. Id. (quoting Smith v. Transworld Drilling Co., 773 F.2d

610, 613 (5th Cir. 1985). If we determine that one or more of the

above factors supports the district judge, we generally affirm the

grant of a new trial. Shows v. Jamison Bedding, Inc., 641 F.2d

927, 931 (5th Cir. 1982). However, even if we find that all three

of these factors weigh against the grant of a new trial, we may

still apply an overriding consideration and affirm the district

court’s order of a new trial by determining “independently[] that

the jury verdict was against the great weight of the evidence.”

Id.

6
 We will assume that each of the three factors tilts against

the grant of a new trial here. The question thus becomes whether

the fourth consideration, standing alone, supports the grant of a

new trial. See Shows, 671 F.2d at 931. We have frequently

affirmed district court grants of motions for new trials on

evidentiary grounds alone. See, e.g., Shows; United States v.

Horton, 622 F.2d 144 (5th Cir. 1980); Bazile v. Bisso Marine Co.,

Inc., 606 F.2d 101 (5th Cir. 1979); Massey v. Gulf Port Oil Corp.,

508 F.2d 92 (5th Cir. 1975); Weyerhauser v. Bucon Construction Co.,

430 F.2d 420 (5th Cir. 1970).

Creamer argues that he presented sufficient evidence for the

jury to find in his favor. He maintains that falling asleep at the

wheel creates only a rebuttable inference of negligence. Creamer

further argues that he successfully rebutted that inference by

submitting evidence that Mr. Cates was drunk at the time of the

accident, that Mr. Cates did not turn on his hazard lights after

pulling over, that Mr. Cates’s car may not have been entirely off

the road,2 that Creamer had no reason to anticipate that he would

fall asleep at the wheel because he was well-rested when he began

driving that morning, and that Creamer had nodded off only

momentarily.

2
Creamer argues that the jury could have concluded that
Cates’s car was in the road from Creamer’s testimony that his car
had just hit the roadway’s rumble strips when he collided with
Cates’s parked car.

7
 Cates counters that Creamer did not present any evidence that

justified or excused his falling asleep at the wheel and thus did

not rebut the inference of negligence. She further argues that any

evidence tending to show Mr. Cates’s negligence goes only to

comparative negligence and does not relieve Creamer of

responsibility. She also contends that Creamer’s contention that

Mr. Cates’s car was in the roadway is meritless because it is

controverted by the police officer’s report, which found that Mr.

Cates’s car was legally parked on the shoulder. Finally, Cates

argues that the danger of a crash is foreseeable when the driver

falls asleep while traveling 70 miles per hour. These facts, Cates

argues, foreclose any doubt as to the foreseeability of the

accident.

B

We agree with Cates that the district court did not abuse its

discretion in concluding that the first jury verdict was against

the great weight of the evidence. This conclusion is clearly

supportable when evaluated under Texas law. Texas case law

acknowledges that “[i]t is hardly possible to yield to sleep

without having premonitory symptoms of its approach[.]” McMillan

v. Sims, 112 S.W.2d 793, 797 (Tex. Civ. App. 1937, writ dism.

agr.). When a driver ignores these warnings and falls asleep while

driving, as Creamer concedes, an inference of negligence arises.

Id. (citing Potz v. Williams, 113 Conn. 278, 155 A. 211, 212 (Conn.

1931)). Creamer cannot point to any evidence that he did not

8
experience these premonitory symptoms of sleep. Creamer’s evidence

that he was well-rested before driving shows only that he exercised

due care before he became sleepy; it shows neither that he had no

warning signs of sleepiness nor that he was excused or justified in

ignoring such signs. Moreover, the evidence relating to Cates’s

fault does not go to exonerate Creamer -- it goes to establish

comparative fault for the injury. Because we find that Creamer did

not rebut the inference of negligence arising from his nodding off

at the wheel, we affirm the district court’s holding that the first

jury verdict -- relieving Creamer of all liability –– was against

the great weight of the evidence.

We now turn to consider whether the district court erred in

applying Texas law instead of Florida law, which had the effect of

relieving Hertz of all liability.3

IV

A

We review de novo a district court's choice of law

determination. In re Air Disaster at Ramstein Air Base, Germany,

81 F.3d 570, 576 (5th Cir. 1996).

Cates argues that the district court erred in its conflict of

laws analysis, specifically, by failing to follow the narrow issue-

by-issue approach set forth in the Second Restatement on Conflicts

of Laws, which Texas has adopted. See Duncan v. Cessna Aircraft

3
Cates does not challenge the district court’s analysis of
Texas’s negligent entrustment law.

9
Co., 665 S.W.2d 414, 421 (Tex. 1984). She contends that the court

should have focused on the facts and circumstances surrounding the

issue of vicarious liability -- not on the issue of general

negligence. In support of her argument she cites § 174 of the

Second Restatement on Conflict of Laws, which provides that

[t]he local law of the state which has the
most significant relationship to the
occurrence and the parties with respect to the
issue of vicarious liability should be applied
in determining whether one person is liable
for the tort of another person.4

Hertz argues that § 174 should not be applied to this case

because it contains a specifically relevant limitation: In

determining which state’s law should apply to an issue of vicarious

liability, “the forum will be influenced by rules of vicarious

liability prevailing in other states.” Restatement (Second)

Conflict of Laws § 174 cmt. b (1971). Hertz asserts that state

laws have overwhelmingly rejected vicarious liability arising from

the dangerous instrumentality doctrine. Thus, Hertz concludes, the

prevailing view of the majority of the states should persuade the

forum court not to apply vicarious liability under Florida law.

B

(1)

4
Further support for this proposition is found in the
Restatement’s statement that “[e]ach issue is to receive separate
consideration if it is one which would be resolved differently
under the local law rule of two or more of the potentially
interested states.” Restatement (Second) Conflict of Laws § 145
cmt. d (1971).

10
 Hertz’s argument that we should disregard the Florida rule on

vicarious liability because only three states have adopted the

dangerous instrumentality doctrine ignores the broader and more

relevant consideration. Although § 174 requires us to “be

influenced by the rules of vicarious liability prevailing in other

states[,]” it also directs that “a relationship which forms the

basis for the imposition of vicarious liability in a substantial

number of states” will likely be adequate for such an imposition,

“even if it would not result in such liability under the forum’s

local law.” Restatement (Second) Conflict of Laws § 174 cmt. b.

The relevant inquiry, thus, is not how many states have adopted the

precise rule that prevails in Florida, but how many states

recognize vicarious liability in comparable relationships between

bailor and bailee. We note that at least nineteen states,

including the District of Columbia, arguably impose vicarious

liability on automobile lessors in some circumstances, often under

the principles of agency.5 At least eight of those jurisdictions

5
See 59 Bus. Law. 1161; N.Y. Veh. & Traf. Law § 388 (McKinney
1996 & Supp. 2004); Shuch v. Means, 226 N.W.2d 285, 287 (Minn.
1975); Mich. Comp. Laws § 257.401; Burton v. Gardner Motors, Inc.,
172 Cal. Rptr. 647, 649 (Ct. App. 1981); Conn. Gen. Stat. § 14-154a
(2003); Enter. Leasing Co. S. Cent., Inc. v. Hughes, 833 So. 2d
832, 837-38 (Fla. Dist. Ct. App. 2002); Me. Rev. Stat. Ann. 29-A §
1652; RI Stat. § 31-34-4; Curtis v. Cuff, 537 A.2d 1072, 1074 (D.C.
1987); Iowa Code § 321.493; Del. Code Ann. tit. 21, § 6102(a)
(1995); Bell v. Reid, 454 N.E.2d 1117, 1119 (Ill. App. Ct.
1983)(holding that the vehicle owner is liable for negligence of
the driver unless the owner can rebut the presumption of agency);
Williams v. Wheeler, 249 A.2d 104, 110-11 (Md. 1969) (holding that
the owner of a vehicle who was not driving at the time of the
accident cannot be held vicariously liable unless there was

11
would likely impose vicarious liability on automobile lessors in

the same manner that Florida does.6 We think that this establishes

an adequate basis for a Texas court to impose Florida’s law of

vicarious liability despite the fact that Texas itself does not

recognize vicarious liability under these circumstances.

Accordingly, we reject Hertz’s argument that the imposition of

vicarious liability on these facts is so aberrant that we should

disregard a § 174 analysis.

(2)

Section 174 directs forum courts to apply “[t]he local law of

the state which has the most significant relationship to the

occurrence and the parties with respect to the issue of vicarious

liability” in deciding “whether one person is liable for the tort

of another.” Restatement (Second) Conflict of Laws § 174 cmt. a

(1971). The district court mistakenly focused solely on the

factors generally relevant to tort cases without following the

directive of §§ 145 and 174 to apply the conflicts analysis with

evidence of agency); Mass. Gen. Laws Ann. ch. 231 § 85A; Harvey v.
Craw, 264 A.2d 448, 451 (N.J. Super. Ct. App. Div. 1970), cert.
dismissed, 267 A.2d 61 (N.J. 1970) (noting that the owner/lessor
may be held vicariously liable unless the presumption of agency is
rebutted); Okla. Stat. Ann. tit. 47, § 8-102(c); Wis. Stat. Ann. §§
344.51(2), 344.01(2)(d) (1999); McGrew v. Stone, 998 S.W.2d 5,6
(Ky. 1999); Nev. Rev. Stat. § 482.305.
6
See Burton v. Gardner Motors, Inc., 172 Cal. Rptr. 647, 649
(Ct. App. 1981); Conn. Gen. Stat. § 14-154a (2003); Enter. Leasing
Co. S. Cent., Inc. v. Hughes, 833 So. 2d 832, 837-38 (Fla. Dist.
Ct. App. 2002); Me. Rev. Stat. Ann. 29-A § 1652; RI Stat. §
31-34-4; Curtis v. Cuff, 537 A.2d 1072, 1074 (D.C. 1987); Iowa Code
§ 321.493; Mich. Comp. Laws § 257.401.

12
respect to the individual issues that may arise in a given tort

case. Here, the specific issue is whether Florida or Texas law

should apply to the question of Hertz’s vicarious liability for

Creamer’s negligence.

Our finding that the district court erred in its analysis by

not focusing on § 174, however, does not determine the ultimate

question in this case: whether the court erroneously held that

Texas, not Florida, law should apply on the question of vicarious

liability. We must now conduct an analysis of that ultimate

question.

(3)

(a)

As we have already noted, Texas has adopted the Restatement

(Second) on Conflict of Laws and the “most significant

relationship” test outlined in §§ 6 and 145 of the Restatement.

See Duncan, 665 S.W.2d at 420-21. Section 145 directs that the law

of the state with the most significant relationship to the

particular issue in tort should govern that issue. Restatement

(Second) Conflict of Laws § 145(1) (1971). Section 6 requires us

to consider the relative interests of the respective states in

having their laws applied to this case.

Comment a of § 145 states that §§ 156-174 “deal[] with

particular issues in tort” with greater precision as compared to §

145, which is “cast in terms of great generality.” This comment

concludes that “the best way to bring precision into the field is

13
by attempting to state special rules for particular torts and for

particular issues in tort.” Id.7

We therefore turn once again to § 174, which directs us to

consider

(1) whether the relationship between the
defendant and the other person makes the
imposition of vicarious liability reasonable
and (2) whether there is a reasonable
relationship between the defendant and the
state whose local law is to be applied.

§ 174 cmt. a. As to the first inquiry, the rental agreement

created a bailment relationship between Creamer and Hertz in

Florida. Comment b of § 174 states that a bailment relationship

establishes “an adequate relationship” for the imposition of

vicarious liability. As to the second inquiry, there is clearly a

reasonable relationship between Hertz and Florida law: Hertz does

business in Florida, and the rental contract that provides the

potential basis for the imposition of vicarious liability refers to

Florida law. Furthermore, the rental agreement required the

Creamers to return the car to Hertz in Florida. On this basis, we

are persuaded that the bailor-bailee relationship between Hertz and

Creamer establishes an adequate basis for the imposition of

vicarious liability against Hertz and that Hertz had a reasonable

relationship with the state of Florida. We thus find that § 174

7
The Restatement’s framework does not provide a precise
method for analyzing its provisions. See Gann v. Fruehauf Corp.,
52 F.3d 1320, 1325 (5th Cir. 1995) (noting that the factors and
principles in the Second Restatement “defy mechanical application”
and are not to be “precisely followed in every instance[]”).

14
weighs in favor of applying Florida law to the vicarious liability

issue.

(b)

Continuing our analysis of the relevant Restatement

provisions, § 174 next requires us to apply “the rule of § 145.”

We thus turn to § 145, which provides a list of contacts that

should be considered in determining what state law applies to a

specific issue in a tort case. These contacts include:

(a) the place where the injury occurred,

(b) the place where the conduct causing
the injury occurred,

(c) the domicil, residence, nationality,
place of incorporation and place of business
of the parties, and

(d) the place where the relationship, if
any, between the parties is centered.

Hertz emphasizes that both the injury and the conduct causing

the injury in this case occurred in Texas. These factors, however,

are meant to be “evaluated according to their relative importance

with respect to the particular issue.” § 145. We also evaluate

these contacts qualitatively instead of quantitatively. Spence v.

Glock, Ges.m.b.H., 227 F.3d 308, 312 (5th Cir. 2000).

That both the injury and the conduct causing the injury

occurred in Texas would weigh heavily in favor of applying Texas

law to the issue of Creamer’s negligence that caused an injury to

a Texas citizen on a Texas road. But those contacts are less

important in determining which state’s law should apply to the

15
issue of Hertz’s vicarious liability for those injuries caused by

its lessee. More relevant to Hertz’s vicarious liability is the

place where the relationship of the parties is centered. See § 145

(2)(d). The most relevant relationship is that which arises from

the lease of the automobile. Although Cates may have a real

interest in the lease, Cates, a Texas resident, essentially has no

relationship with the lease. Texas has no relationship with the

lease, and Hertz has no relationship with Texas concerning this

lease. Creamer has no relationship with the state of Texas arising

from the lease. Creamer, however, is a Florida resident and is a

party to the lease. Hertz is the other party to the lease and does

its relevant business in Florida. Florida is the situs where the

lease was executed. In short, Florida, not Texas, has the most

significant relationship to the issue of Hertz’s vicarious

liability.

(c)

Now that we have identified the most significant contacts, §

145 directs that these contacts are to be considered under the

principles provided in § 6. Section 6 requires us to engage in an

analysis of the relative interests of the respective states.

Specifically, we should assess:

(a) the needs of the interstate and
international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other
interested states and the relative interests

16
 of those states in the determination of the
particular issue,

(d) the protection of justified
expectations,

(e) the basic policies underlying the
particular field of law,

(f) certainty, predictability, and
uniformity of result, and

(g) ease in the determination and
application of the law to be applied.

We note that the interests we consider are those that are

specifically relevant to the issue of vicarious liability. Our

analysis of these factors leads us to conclude that Texas has only

a minimal interest in having its law apply to the vicarious

liability issue. Texas’s interest in avoiding judgments against

defendant bailors is not implicated here because Hertz is not a

Texas corporation and did not conduct the business relating to this

rental agreement in Texas. Furthermore, although Texas has the

greater interest in seeing Cates compensated for her husband’s

injuries and in avoiding the burden of providing medical care for

Mr. Cates, it is Florida law, not Texas law, which offers greater

protection of those interests.

Florida’s interests in having its law applied to the vicarious

liability issue in this case, however, are also minimal. Florida’s

dangerous instrumentality doctrine protects plaintiffs from

impecunious drivers by imposing liability on the owners of the

vehicles, but here, the plaintiff is not a Florida resident.

17
Further, although Florida may have an interest in regulating the

conduct of vehicle bailors to reduce the incidence of accidents, we

are not persuaded that that interest extends beyond Florida’s

borders.

Thus, because the interests of neither state clearly

predominate over those of the other, the interest analysis of § 6

provides little impact on our decision. We are, however, persuaded

by our reading of the most significant relationship test of §§ 145

and 174 that Florida clearly has the greater connection to the

facts and circumstances as they relate to the vicarious liability

issue.8 We therefore conclude that the district court erred in

applying Texas law to the issue of Hertz’s vicarious liability.

Because the district court did not conduct a vicarious liability

inquiry under Florida law, we remand this case to it for

determination, under Florida law, of Hertz’s vicarious liability

for Cates’s judgment against Creamer. On remand, the district

court should focus particularly on whether the Florida law of

vicarious liability may be applied to benefit non-Florida residents

in a situation such as the case at hand. It seems that the

district court will have to make an Erie guess to resolve this

question, as no Florida precedent exists to resolve the question.

8
The dissent criticizes our failure to cite Bartley v. Budget
Rent-A-Car Corp., 919 S.W.2d 747 (Tex. App. 1996), for its
reasoning. As previously noted, Texas has adopted the Restatement
(Second) of Conflicts of Laws, and § 174 is the section that
directly addresses vicarious liability. We find Bartley, because
it fails to address § 174, unhelpful to our analysis.

18
 V

In sum, we conclude that the district court did not abuse its

discretion in granting Cates’s motion for new trial because Creamer

did not present evidence rebutting the inference of negligence that

arose from his falling asleep at the wheel. The first jury’s

verdict denying relief to Cates was, therefore, against the great

weight of the evidence. We further hold that the district court

erred in failing to analyze the conflict of laws question in the

specific context of the vicarious liability issue and in failing to

apply § 174 of the Restatement. Our own analysis of that section

leads us to conclude that Florida, not Texas, law should apply to

the vicarious liability issue because the bailment relationship,

which is the basis for vicarious liability here, is centered in

Florida and because § 174 specifically states that a bailment

relationship is an adequate basis for the imposition of vicarious

liability. Accordingly, we AFFIRM Cates’s judgment against

Creamer, VACATE the judgment for Hertz, and REMAND to the district

court for determination of Hertz’s vicarious liability under

Florida law for the judgment entered against Creamer.

AFFIRMED in part; VACATED in part and REMANDED.

19
DeMOSS, Circuit Judge, concurring in part and dissenting in part:

Insofar as the majority opinion upholds the district court’s

grant of a new trial to Cates and, consequently, the verdict of the

second trial, I concur. However, I respectfully dissent from the

portion of the majority’s opinion that holds that Florida law

applies to the issue of vicarious liability.

This case is undisputedly based on diversity jurisdiction, and

our responsibility in diversity cases is to determine what the

substantive law of the forum state is, not what we think it should

be. See Am. Nat’l Gen. Ins. Co. v. Ryan, 274 F.3d 319, 328 (5th

Cir. 2001); Boardman v. United Servs. Auto. Ass’n, 742 F.2d 847,

851 (5th Cir. 1984). Moreover, once we have determined what the law

is, our duty is to apply it, not to define its contours. Boardman,

742 F.2d at 851. I dissent from the majority’s opinion because the

majority uses the wrong approach in determining what Texas’s

conflicts law is and in doing so, reaches the wrong result.

The majority cites a Texas Supreme Court case, Duncan v.

Cessna Aircraft Co., 665 S.W.2d 414 (Tex. 1984), for the

proposition that Texas follows the Restatement (Second) of Conflict

of Laws to determine choice of law in tort cases and appears to

conclude that Texas would adopt section 174 of the Restatement in

the vicarious liability context. The majority then provides a quite
voluminous analysis of how section 174 applies to the facts of this

case. But the Texas Supreme Court has never applied the most-

significant-relationship test in a vicarious liability case.

Consequently, it is unclear (1) whether Texas’s highest court would

adopt section 174 as controlling law in the vicarious liability

context and (2) how that same court would interpret that section

even if it did. Moreover, where a state’s highest court has not yet

spoken on an issue, we have stated that we will look to the state’s

appellate courts for guidance unless we are convinced that the

highest court of the state would not adopt the appellate courts’

reasoning. Primrose Operating Co. v. Nat’l Am. Ins. Co., 382 F.3d

546, 564-65 (5th Cir. 2004). The best evidence of what the Texas

Supreme Court would do in this case can be found in Bartley v.

Budget Rent-A-Car Corp., 919 S.W.2d 747 (Tex. App.—Amarillo 1996),

which I describe below in my discussion of how this case should

have been decided.9 Remarkably, the majority makes no mention at

all of Bartley and fails to indicate why it believes the supreme

court of Texas would not follow the reasoning set out there. And

even if the majority has good reason not to follow Bartley, it

9
There is another Texas appeals court case that not only
agrees with Bartley but also agrees with the district court below
that Texas law should apply in a case like this. Perkins v. Dynasty
Group Auto, No. 08-01-00493-CV, 2003 WL 22810452, at *3-*4 (Tex.
App.—El Paso Nov. 25, 2003) (unpublished). However, because that
case is not published, I only cite it here to bolster my contention
that Bartley is the best evidence of what the Texas Supreme Court
would do.

21
fails to consider the next best solution in a choice of law case in

which guidance from the state’s supreme court is lacking:

certification.

I have spoken out on the importance of certification several

times in the past, see, e.g., Tanks v. Lockheed Martin Corp., 417

F.3d 456, 468 (5th Cir. 2005) (DeMoss, J., specially concurring);

Compass Bank v. King, Griffin & Adamson P.C., 388 F.3d 504, 506-07

(5th Cir. 2004) (DeMoss, J., dissenting), and one reason I dissent

here is to emphasize my position regarding that important judicial

tool. As I have said before, certifying an unanswered question to

a state’s supreme court is a preferable course of action to our

trying to make an Erie guess as to the question of state law

involved. Granted, we have refused to certify when the state’s law

is clear, but the law is anything but clear here — section 174 is

ambiguous, and it has never been adopted or interpreted by a Texas

court. This Circuit used to subscribe to a federalist policy of

seeking guidance in diversity cases from “the one court

constitutionally entitled to supply it,” the supreme court of the

forum state. Boardman, 742 F.2d at 851; see also Pucket v.

Rufenacht, Bromagen, & Hertz, Inc., 903 F.2d 1014, 1021 n.13 (5th

Cir. 1990) (“This course [of certifying questions directly to the

supreme court of the forum state] has been pursued often by the

Fifth Circuit and has been enthusiastically endorsed by the Supreme

Court.”). However, the majority’s refusal to even consider

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certification indicates this Circuit’s increasing animosity towards

the use of certification in diversity cases. I urge the Court to

return to these principles of federalism. As former Chief Judge

Brown aptly stated in Boardman, quoting his own law review article,

“Federal courts should hesitate to ‘trade judicial robes for the

garb of prophet’ . . . when an available certification procedure

renders the crystal ball or divining rod unnecessary.” Boardman,

742 F.2d at 851 (quoting John R. Brown, Certification—Federalism in

Action, 7 CUMB. L. REV. 455, 455 (1977)). We should heed Judge

Brown’s advice and use the great tool of certification more freely.

Another reason I dissent is that even if the majority uses the

right approach, I believe it reaches the wrong result. First,

Bartley is a good indicator of how the Texas Supreme Court would

decide this case. Not only are Bartley’s facts substantially

similar (a Texas plaintiff suing a Michigan car rental agency for

the negligence of a driver), but also the underlying policy reason

for selecting Texas substantive law is the same. In Bartley, the

Seventh Court of Appeals of Texas declined to apply the law of

Michigan, the state where the car rental agency was located,

because it found that layering Michigan’s “no fault” liability

scheme on top of Texas’s system of “proportional responsibility and

recovery” would have an unjust result, especially when the limited

damages aspect of Michigan law was not also imported. Bartley, 919

S.W.2d at 755-56. The Bartley court found it determinative that the

23
plaintiff sought a recovery unlimited by law through application of

part of a Michigan law that, if applied in its entirety, would have

limited recovery. Id. at 755. In this case, the plaintiff attempts

to recover $2,156,000.00 from the defendant car rental agency under

Florida’s dangerous instrumentality doctrine. Yet the plaintiff

does not seek application of the rest of Florida’s laws, which

limit the liability of lessors who rent or lease a motor vehicle

for less than one year. See FLA. STAT. ANN. § 324.021(9)(b)(2)

(generally limiting a lessor’s liability to $100,000 per individual

and $300,000 per incident (unless the lessor does not carry

adequate insurance)); see also Fischer v. Alessandrini, 907 So. 2d

569, 570-71 (Fla. Dist. Ct. App. 2005) (discussing the policy for

limiting recovery under the dangerous instrumentality doctrine). I

do not see how the majority can ignore Bartley on these facts,

especially where “applying the law of the forum, Texas, will

further its own policy of serving the interest of certainty,

predictability and uniformity of result, thereby providing ease in

the determination and application of the law.” Bartley, 919 S.W.2d

at 756.

The second reason I believe the majority reaches the wrong

result is that it misinterprets sections 174 and 145 of the

Restatement. First, the comments to section 174 do not cover the

situation where party A, a domiciliary of state X, rents a car from

B rental agency in state X and, with permission, drives to state Y

24
and negligently injures party C there. Furthermore, comment c

states,

Vicarious liability may also be imposed by application of

the local law of some state other than that of conduct

and injury. So, for example, vicarious liability may be

imposed under the local law of the state where the

relationship between the one sought to be held liable and

the tortfeasor is centered. Application of the local law

of this state to impose vicarious liability is

particularly likely if this state has some relationship

to the injured plaintiff.

Restatement (Second) of Conflict of Laws § 174 cmt. c (1971)

(emphasis added). Here, Florida has no relationship to the injured

plaintiff. Therefore, section 174 does not provide a concrete

answer as to whether vicarious liability should be imposed on the

car rental agency in our case, contrary to the majority’s

assertion.

Turning to section 145, the majority incorrectly interprets

the fourth contact to be considered under that section in

determining what state law applies to a specific issue in a tort

case — “the place where the relationship, if any, between the

parties is centered.” See id. § 145(2)(d). The majority states that

the relevant relationship is “that which arises from the lease of

25
the automobile.” But there was no relationship between the parties

prior to the accident in this case, and at least one Texas court

has held that section 145's fourth contact is irrelevant in that

situation. Bartley, 919 S.W.2d at 755. Because the majority finds

this contact to be determinative in Part B.3.b of its opinion, I

believe its result is flawed.

Because I have not been able to convince the majority to

certify the conflicts question presented in this case to the Texas

Supreme Court, I suggest what I believe is the next best option for

the district court on remand: Now that we have affirmed the

$2,156,000.00 judgment in favor of Cates against Creamer, the

district court should dismiss without prejudice Cates’s claim

against Hertz, and thereby permit Cates to sue Hertz in Florida on

the theory that Florida’s vicarious liability law makes Hertz

liable to pay the judgment against Creamer. See Manshack v.

Southwestern Elec. Power Co., 915 F.2d 172, 174 (5th Cir. 1990)

(“[T]he courts have generally followed the traditional principle

that dismissal should be allowed unless the defendant will suffer

some plain legal prejudice other than the mere prospect of a second

lawsuit.”). Although some courts have held that dismissal is not

appropriate when the plaintiff will reinstate the action in a forum

that will apply a different body of substantive law, see, e.g.,

Rodriguez v. Marks Bros. Pickle Co., 102 F.R.D. 104 (E.D. Wis.

1984), that is not the case here. The majority opinion requires the

26
district court in Texas to apply Florida state law, and that is the

same body of substantive law that a Florida court would apply if

the claim against Hertz were brought there. No prejudice to the

defendant would result. Manshack, 915 F.2d at 174 (finding no

prejudice where the same choice of law principles would apply in

state court).

For the above reasons, I respectfully dissent from the portion

of the majority’s opinion that holds that Florida law applies to

the issue of vicarious liability, and I recommend that the district

court below dismiss the claim against Hertz without prejudice so

that the plaintiff can bring her claim against Hertz in Florida

state court.

27