Tellez v. Saban

VOSS, Judge,

dissenting.

I must respectfully dissent for two reasons. First, the majority has improperly extended the doctrine of negligent entrustment to cover situations where the entruster has no evidence of the driver’s incompetence. Second, the negligence of Karla Fernandez was a superseding cause of the fatal accident.

I agree with the majority’s determination that A.R.S. § 28-477(B) is not a safety statute. Accordingly, Sabans must be held to the same reasonable, prudent person standard of care as anyone furnishing an automobile for another’s use. Sabans will be liable only if it “furnished an automobile to a person known to [it] to be inexperienced or incompetent as a driver.” Anderson Aviation Sales Co. v. Perez, 19 Ariz.App. 422, 426, 508 P.2d 87, 91 (1973); see also Powell v. Langford, 58 Ariz. 281, 285, 119 P.2d 230, 232 (1941). Because the statute does not establish a standard of care, Sabans’ violation of the statute is irrelevant to this matter.

I also agree with the majority that, if Sabans possessed any knowledge indicating Fernandez was incompetent to drive, its duty to protect the public from unreasonable risks of harm may have required it to inquire further. However, Sabans had no such knowledge. The most Sabans knew was that Fernandez was unlicensed. That fact alone is insufficient and the reason is clear.

A statute requiring those who drive vehicles to be licensed does not establish a standard of conduct for the road. Because the licensing statute does not establish a standard of conduct, a violation (i.e., not having a license) is not a breach of any standard of conduct in driving. Charles O. Gregory, Breach of Criminal Licensing Statutes in Civil Litigation, 36 Cornell L.Q. 622, 634-35 (1951); see also W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 36 at 226 (5th ed. 1984) (licensing statutes create no liability if the actor is competent but unlicensed).

Because a licensing statute does not tell drivers how to drive and thus does not estab*174lish a standard of conduct, one cannot determine from the mere fact that a driver is unlicensed whether he is incompetent or whether he drove with due care on a particular occasion. Gregory said it best:

An unlicensed driver may be a superb driver; and whether he is or not, he may have driven with due care on the occasion in question. Certainly his not having a license at the time is hardly probative of his not having done so.

Gregory, supra at 635.

The majority does not, and cannot, cite any authority that holds that the mere lack of a driver’s license is sufficient evidence to support a claim of negligent entrustment. The majority does drop a footnote “in passing” listing cases that have “found entrustment of a vehicle to an unlicensed driver is some evidence of negligence. ” Ante at 171, n. 4, 933 P.2d at 1239 n. 4 (emphasis added). I do not disagree with any of these authorities as they directly support the dissent. While lack of a license may be “some evidence” of negligence, alone, it simply will not suffice.7

The majority first cites Kauffman v. Gullace, 252 N.J.Super. 467, 600 A.2d 143 (App. Div.1991). Gullace states that entrustment to an unlicensed driver “might be considered negligence.” Id. 600 A.2d at 147. However, the Gullace court’s holding is unsupported by any New Jersey case law. In fact, the only ease cited by the Gullace court to support its assertion is Townsend v. Great Adventure, 178 N.J.Super. 508, 429 A.2d 601 (App.Div. 1981). Townsend does not support either the Gullace court’s holding or this court’s holding in the majority opinion. In Townsend, a claim of negligent entrustment was brought against a father who entrusted his vehicle to his son. The son was operating with a learner’s permit, and, as required by the laws of New Jersey, was accompanied by a licensed driver. 429 A.2d at 603. The court upheld a dismissal of the action against the father. Id. at 608. The court stated that “[t]he only fact that appellant showed to support the allegation of [negligent entrustment] was that [son] had no license. In the circumstances of this case such lawful act cannot be held to be negligence.” Id.

The Townsend court never reached the issue whether the mere lack of a license was sufficient to support a claim of negligent entrustment. Such a determination was unnecessary because the father’s entrustment was lawful and pursuant to a specific legislative method of training new drivers. Id.

The Gullace case cited by the majority is unsupported by New Jersey law. It should, therefore, not be used by this court to dramatically change the law of negligent entrustment in Arizona.

The majority cites Mason v. New, 475 So.2d 854, 856 (Ala.1985) as holding that the lack of a driver’s license may be probative evidence in a negligent entrustment case. However, the same court that decided New later decided Day v. Williams, 670 So.2d 914 (Ala.1995). In Day, the Alabama Supreme Court summarized its holding in New as that “the lack of a driver’s license, when combined with other evidence of a driver’s lack of skill, is probative evidence of incompetence in a negligent entrustment claim.” Day, 670 So.2d at 916 (emphasis added). In our case, the only evidence of incompetence is Fernandez’s lack of a driver’s license. Additionally, the Day court went on to state “even if Thelton had been aware [that Vernon did not possess a driver’s license], that alone would not support a finding of negligent entrustment....” Id.

Although cited by the majority, the law of Alabama is clearly contrary to the majority’s position. Alabama requires that the defendant entrust a vehicle to a driver known to *175be incompetent. Mere knowledge that the driver is unlicensed is insufficient to support a claim of negligent entrustment.

Ohio adopted a standard similar to that of Alabama in Williams v. Bolding, 6 Ohio App.3d 48, 452 N.E.2d 1346 (1982). Rather than support the majority’s holding, Williams stands for the proposition that the lack of a driver’s license alone is insufficient to support a claim of negligent entrustment. The Williams court stated, “[wjhile the mere fact that one does not have a valid Ohio driver’s license does not prove negligent entrustment, it is evidence having a bearing upon the issue when coupled with other evidence indicating the driver to be inept.” 452 N.E.2d at 1348 (emphasis added). Again, the only evidence offered of Fernandez’s incompetence was her lack of a driver’s license. Under Williams, Sabans would be entitled to judgment as a matter of law.

The majority next cites Johnson v. Owens, 639 N.E.2d 1016 (Ind.App.1994). Owens also fails to support the majority’s position. In Owens, the court began by stating the general rule that in order to establish a negligent entrustment claim, “the plaintiff must demonstrate that the defendant entrusted the vehicle to a driver with knowledge that the driver was incompetent to drive.” Id. at 1022. The court then stated that the only possible ground for a claim of negligent entrustment in that case was the driver’s lack of a license. The court did not hold that lack of a license was sufficient to support a claim of negligent entrustment. In fact, because the record was insufficient to establish that the entruster knew the driver was unlicensed, the court never reached the issue. No Indiana court has ever held that a claim of negligent entrustment could be based merely on the lack of a driver’s license. Indiana, like almost every other state, requires actual knowledge that the driver is incompetent. Fisher v. Fletcher, 191 Ind. 529, 133 N.E. 834, 835 (1922); Stocker v. Cataldi, 489 N.E.2d 144, 145 (Ind.App.1986). The same Indiana court cited by the majority defines incompetence as “incapacitated (as in the case of intoxication), uninstructed in the use of the vehicle or unfamiliar with the dangers of such use.” Stocker, 489 N.E.2d at 145. Lack of a license is not incompetence under this standard. The law of Indiana would not support a claim of negligent entrustment under the facts presently before this court.

The majority next cites Tri-State Truck & Equipment Company v. Stauffer, 24 Md.App. 221, 330 A.2d 680 (1975). Stauffer fails to support the majority’s holding for two reasons. First, the case was decided on statutory grounds. Second, newer Maryland eases have held that the lack of a license alone is insufficient to support a claim of negligent entrustment.

Unlike Arizona, which holds that the violation of a safety statute is negligence per se, Maryland subscribes to the position that the violation of a safety statute is evidence of negligence. Stauffer, 330 A.2d at 684. Therefore, after finding that the renter entrusted a vehicle to an unlicensed driver, the court properly utilized the statutory presumption and held that entrustment to an unlicensed driver is evidence of negligence. Id. 330 A.2d at 691. Stauffer was decided on statutory grounds rejected by today’s majority and is not authority for the majority’s holding in a negligent entrustment case.

The Maryland Court of Appeals underscored the distinction between the statutory cause of action and negligent entrustment in Morrell v. Williams, 279 Md. 497, 366 A.2d 1040 (1976). The court said, “[t]he critical point is that a violation of § 6-305 of the Motor Vehicle Code requires proof that the owner authorized the use of a motor vehicle by a person whom he knew to be without a license, while the doctrine of negligent entrustment may be invoked only against the vehicle owner who knows or should have known that the use would involve an inordinate risk of physical harm.” 366 A.2d at 1043.

The more recent Maryland ease of Herbert v. Whittle, 69 Md.App. 273, 517 A.2d 358 (1986), reinforces the decision of the Morrell court and is directly contrary to the majori*176ty’s position in our case. In Herbert, a vehicle was entrusted to a young, unlicensed driver. The court held that the “the mere fact that Ms. Whittle did not possess either a learner’s permit or a driver’s license at the time of the accident is important only as it relates to her inexperience with a standard transmission automobile.” Id. 517 A.2d at 363. Had the law of Maryland been that the entrustment to an unlicensed driver alone is evidence of negligent entrustment, the evidence would have been important regardless of whether Ms. Whittle was inexperienced.

Finally, the majority cites LaRoque v. Sanchez, 641 S.W.2d 298 (Tex.App.1982). Although at first blush this case appears to support the majority’s position, further analysis reveals that Texas utilizes an entirely unique test for negligent entrustment. Under Texas law, negligent entrustment consists of: “(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, incompetent, or reckless; (4) that the driver was negligent on the occasion in question; and (5) that the driver’s negligence proximately caused the accident.” Williams v. Steves Indus., Inc., 699 S.W.2d 570, 571 (Tex.1985); see also Dalworth Trucking Co. v. Bulen, 924 S.W.2d 728, 734 (Tex.App.1996). Unlike the majority of other states, including Arizona, Texas specifically recognizes entrustment to an unlicensed driver as an element of negligent entrustment. Williams, 699 S.W.2d at 571; Bulen, 924 S.W.2d at 734. Texas, unlike Arizona, does not require entrustment to an incompetent driver. See Anderson Aviation Sales Co., 19 Ariz.App. at 426, 508 P.2d at 91; Powell, 58 Ariz. at 285, 119 P.2d at 232. Because Texas employs a negligent entrustment standard with entirely different elements, Texas case law on this point is not authority for Arizona negligent entrustment cases. However, even if Texas law were authority in Arizona, the law is contrary to the majority’s holding. By specifically enumerating both “unlicensed” and “incompetent” in the test for negligent entrustment, Texas courts are recognizing that “unlicensed” does not necessarily mean “incompetent.”

Other states specifically addressing the issue have held that the mere lack of a driver’s license is insufficient to support a claim of negligent entrustment. Day v. Williams, 670 So.2d at 916 (“even if Thelton had been aware [driver did not possess a driver’s license], that alone would not support a finding of negligent entrustment”); Guay v. Winner, 189 A.D.2d 1081, 593 N.Y.S.2d 95, 97 (1993) (where the facts were that the driver was young, inexperienced and did not have a valid license, court stated the entruster “had no reason to suspect incompetency, nor has any incompetency been demonstrated”); Spencer v. Gamboa, 102 N.M. 692, 699 P.2d 623, 625 (1985) (where claim of negligent entrustment based only on furnishing car to unlicensed driver, court held plaintiff had “presented no evidence that the defendant knew or should have known [driver] was an incompetent driver”); see also Johnson v. Lanier, 140 Ga.App. 522, 231 S.E.2d 428, 430 (1976) (“As regards the contention that appellee was liable based upon a negligent entrustment of the tractor to [driver], an inexperienced, youthful and unlicensed driver, under Georgia law, actual knowledge of the dangerous potential of the entrusted driver is necessary to impose liability ... ”); Dukes v. McGimsey, 500 S.W.2d 448, 451-52 (Tenn.App.1973) (“The authorities herein cited will not permit an inference of negligent entrustment by the mere proof ... the borrower did not have a driver’s license.”).

It is clear that the lack of a license is not evidence of incompetence. Lutfy v. Lockhart, 37 Ariz. 488, 493, 295 P. 975, 977 (1931); Christy v. Baker, 7 Ariz.App. 354, 357, 439 P.2d 517, 520 (1968); see also Gregory, supra at 635. The majority, nevertheless, holds that Sabans may have had a duty to inquire further “when Fernandez revealed she did not possess a license.” Ante at 171, 933 P.2d at 1239. The majority’s analysis raises an obvious question: If the lack of a license is not evidence of incompetence, what triggered Sabans’ duty to inquire? The majority does not, and cannot, answer this question.

*177Moreover, a holding that the mere lack of a license triggers a duty to inquire is not supported by existing case law. In Christy, this court addressed the same legal and factual issues presented by this case. Although the majority found it easy to “reject the rationale” (ante at 167, 933 P.2d at 1235) of Christy — I cannot. Sound jurisprudential policy will cause the court to abandon substantive precedent only when the reasons for it have ceased to exist or it appears to be clearly erroneous. White v. Bateman, 89 Ariz. 110, 114, 358 P.2d 712, 714 (1961); see also State v. Salazar, 173 Ariz. 399, 417, 844 P.2d 566, 584 (1992), cert. denied, 509 U.S. 912, 113 S.Ct. 3017, 125 L.Ed.2d 707 (1993). The majority has not demonstrated either basis here.

In both Christy and the instant case, the facts are- indistinguishable in every relevant area. The renter knew it was renting to a driver unable to produce a valid driver’s license. See Christy, 7 Ariz.App. at 355, 439 P.2d at 518. Additionally, in each case, had the renter inquired further, it would have discovered the driver had lost the license because of a DUI conviction. See id. The majority’s claim that “it was merely fortuitous that [Walk’s] license had been revoked,” ante at 170, 933 P.2d at 1238, is, at best, disingenuous. Walk lacked a license because he was convicted for DUI and failed to appear at the required hearing. 7 Ariz.App. at 355, 439 P.2d at 518. This fact is no more fortuitous than Fernandez lacking a license because the legislature “fortuitously” increased the penalty for a DUI conviction. Walk and Fernandez lacked a driver’s license for the same reason: a DUI conviction. The majority asserts that Christy “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.” Ante at 170, 933 P.2d at 1238. However, Christy, like Sabans, knew that Walk could not produce a valid driver’s license. Christy had as much evidence of Walk’s incompetence as Sabans had of Fernandez’s incompetence. If Fernandez’s lack of a license was a red flag triggering a duty to inquire, Walk was waving that same red flag. The Christy court had the opportunity to find a duty to inquire under the same facts. The Christy court refrained from doing so, and we should follow their lead.

The majority also cited Restatement (second) Torts § 308. This section of the Restatement, which was not cited by either party to this litigation, in part provides: “It is negligence to permit a third person to use a thing ... if the actor knows or should know that such person intends or is likely to use the thing in such a manner as to create an unreasonable risk of harm to others.” I agree completely with the legal proposition stated in Restatement (second) Torts § 308. The legal proposition, however, does not support the majority’s decision.

The Restatement requires that the actor knew or should have known that the. person to whom the actor is entrusting the vehicle would use it in such a manner as to create an unreasonable risk of harm to others. Comment c to the Restatement refers us to § 307, comment a, for the factors that should be considered when determining whether the actor should realize that a third person is likely to use a thing in a manner that creates an unreasonable or dangerous risk of harm to others. Comment a describes an assumption that if a particular undertaking is reasonably capable of safe performance by a person of normal competence and skill, there is generally no negligence. To avoid this presumption, there must be evidence that the actor knew the person was “subnormal.” The Restatement analysis lends the same support to the dissent that the case law does.

Here, there is no evidence other than the mere lack of a license. Even the majority agrees “that the mere absence of a valid driver’s license is not necessarily indicative of a person’s driving skills.” Ante at 171, 933 P.2d at 1239. There is no evidence in the record that Fernandez was impaired in any way.

Notably, the majority has expanded the doctrine of negligent entrustment in a case *178where Sabans’ duty is not even at issue.8 The issue of Sabans’ duty was not the basis of the trial court’s grant of summary judgment, was not briefed on appeal, and was not argued at oral argument. We did not ask for any additional briefing on the issue. The sole issue on appeal is whether Sabans’ negligence in renting a vehicle to Fernandez was the proximate cause of Tellez’s injury.

In the present case, Pitts accommodated Fernandez and rented the car for a single day.9 However, Fernandez refused to return the car and absconded with it for several days. During these several days, Fernandez drove the car to Tucson, returned the following day, drove the car around Phoenix looking for a job and a new place to live, and allowed several friends to drive the car. Pitts informed Sabans that he was unable to regain possession of the car from Fernandez. Sabans told Pitts that Pitts was responsible for returning the ear because Pitts’s name was on the contract. Pitts was unsuccessful in regaining possession of the car. On the night of the accident, Fernandez drank heavily at a party at her house and then, despite warnings from her friends not to drive, drove to a bar and drank Long Island Iced-Teas for three hours. When she left the bar she drove to a 7-Eleven and purchased beer. Shortly thereafter, she ran a red light and collided with Tellez’s vehicle. Following the accident, marijuana was found in the car. The accident occurred eight days after the car was rented and seven days after it was to be returned to Sabans. Fernandez had put almost 1,000 miles on the vehicle.

Sabans can only be liable if its negligence proximately caused the later accident. The majority accurately sets forth the test for proximate cause. A party’s negligence is a proximate cause of an injury if:. (1) the conduct is a cause in fact of the injury; and (2) either the intervening acts were foreseeable by a reasonable person or were not. extraordinary in hindsight. Robertson v. Sixpence Inns of America, Inc., 163 Ariz. 539, 546, 789 P.2d 1040, 1047 (1990).

The majority’s proximate cause analysis is puzzling in light of its earlier statements regarding the effect of the licensing statute. In the negligence per se analysis, the majority says that had the legislature wanted the statute to establish a standard of care it could have established that as the standard— but did not. Ante at 168-169, 988 P.2d at 1236-37. Further, that A.R.S. § 28-477 was not intended to protect any particular individual or class of persons from harm. The majority concludes: “Therefore, we find no reason to allow the breach of this statute, which the legislature punishes as a fine, to create a cause of action in tort for these plaintiffs.” Ante at 169, 933 P.2d at 1237.

After articulating this, the majority attempts to breathe some life back into the statute in support of its analysis of proximate cause. Here, the majority boldly states that “[t]he legislature declared by the enactment of A.R.S. § 28^477(B) that renting automobiles to unlicensed drivers increases the risk of harm to the public.” Ante at 173, 933 P.2d at 1241. This conclusion is not supported by citation to any authority and is inconsistent with the majority’s analysis on the negligence per se issue. The majority cannot have it both ways and I respectfully submit that the majority got it right the first time.

The majority states that the supreme court in Quintero v. Continental Rent-A-Car Sys*179tern, Inc., 105 Ariz. 135, 460 P.2d 189 (1969), did “not say that no proximate cause existed between Continental’s negligence and Walk’s death.” Ante at 168, n. 2, 933 P.2d at 1236, n. 2. I disagree.

Walk died in the automobile accident and his survivors sued Continental for negligently renting the automobile to someone Continental knew to be intoxicated at the time and who did not possess a driver’s license. The complaint alleged that Walk “drove said automobile on a public highway ... in a reckless and negligent manner, causing a collision and resulting in his death.” Id. at 136, 460 P.2d at 190.

Noting that the parties have completely and extensively briefed such issues as negligent entrustment, contributory negligence, and imputed negligence, the court concluded:

In our view of the case, these issues need not be considered because the complaint itself in the language we have italicized above, clearly sets out facts which compel the conclusion that Walk’s negligence and reckless driving was the proximate cause of [Walk’s] death. Id. (emphasis added).

The supreme court clearly resolved the proximate cause issue. Walk’s accident, like Fernandez’s, was caused entirely by their acts. Two facts are inescapable in each case. First, the only link between the accident in Continental and Sabans is the fact that the renters did not have a license. Second, there is absolutely no evidence that the lack of the license had anything to do with causing the accident.

The supreme court also dealt with this issue in Mutz v. Lucero, 90 Ariz. 38, 365 P.2d 49 (1961). In Mutz, plaintiff sued defendant for negligently causing the death of her husband in an automobile/motorcycle accident. The trial court directed a verdict for defendant and plaintiff appealed. On appeal, plaintiff argued that the trial court erred by refusing to admit evidence that defendant had failed to qualify for an Arizona operator’s license. Id. at 41, 365 P.2d at 51. Plaintiff argued that defendant’s failure to possess a driver’s license was evidence of his negligence. The supreme court disagreed.

The evidence shows that the illegality of the defendant’s act was a mere condition and not a cause of the accident. It is only when there is a proximate causal connection between the violation of the license statute and the injury complained of that the violation is admissible as evidence of negligence.

Id. (emphasis added).

The lack of a license had nothing to do with proximate cause in the aforementioned cases, and it has nothing to do with proximate cause in this ease. Sabans did not proximately cause Tellez’s injury. The negligence of Fernandez was a superseding intervening cause in Tellez’s injury. No reasonable person in Sabans’ position could foresee that renting a car 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. No reasonable person could even foresee that Fernandez would still be in possession of the car eight days later, let alone that she would drive the car negligently.

CONCLUSION

“Most licensing statutes, such as those applicable to automobile drivers ... have been construed as intended only for the protection of the public against injury at the hands of incompetents, and to create no liability where the actor is in fact competent but unlicensed.” W. Page Keeton et al., Prosser & Keeton on the Law of Torts, § 36 at 226 (5th ed. 1984). Here, there is no evidence suggesting Sabans had knowledge that Fernandez was an incompetent driver. ‘While possession of an operator’s license, regularly issued, might be some evidence of his competency, the lack of such license would be no evidence whatever that he was not a capable, skilled, and safe driver.” Christy, 7 Ariz. App. at 357, 439 P.2d at 520 (quoting Lutfy v. Lockhart, 37 Ariz. at 493, 295 P. at 977). At most, Sabans knew Fernandez lacked a license. Without some knowledge of incompetence, Fernandez’s activities were not *180foreseeable. I, therefore, agree with the following statement in Christy:

The fact that [Fernandez] did not have a valid license did not make [her] incompetent to drive.... The defendant could not have foreseen that the injury which occurred would be a likely result of his act in leasing the car. The accident would, have occurred whether or not [Fernandez] had a valid driver’s license in [her] possession.

7 Ariz.App. at 357-58, 439 P.2d at 520-21 (emphasis added). Additionally, these same facts compel a finding that the intervening acts were abnormal and extraordinary.

Allowing a jury to find negligence based on nothing more than Sabans’ renting to an unlicensed driver, regardless of the driver’s actual competence, converts the rental company into an insurer for any negligent act committed by the driver. In Christy, we rejected the rationale adopted by today’s majority stating, “[w]e are not prepared to legislate strict tort liability by judicial decision .... ” 7 ArizApp. at 356, 439 P.2d at 519. Today’s majority recognizes no such restraint.

Because I believe the trial court correctly granted summary judgment for Sabans, I would affirm.

. Sabans' actions, if true, were simply wrong. However, under the facts here, these activities are not actionable in tort. The legislature recognized this potential problem and prohibited such activity when it enacted A.R.S. § 28-477. The statute imposes a "civil sanction” on any person that rents a vehicle to someone without a driver's license. As the legislature has made such sanctions available to punish and deter this activity, there is no justification for creating a tort remedy as the majority does today.

. It has been long established that an appellate court will not consider a question not first raised in the lower court. Town of South Tucson v. Board of Supervisors, 52 Ariz. 575, 84 P.2d 581 (1938). Intuitively, this rule has extended to issues not even raised by parties in their briefs on appeal. State v. Gortarez, 141 Ariz. 254, 262, 686 P.2d 1224, 1232 (1984). This court has recognized the imprudence in an appellate court considering new issues sua sponte, unless required by statute or public policy. Kalil Bottling Co. v. Burroughs Corp., 127 Ariz. 278, 281, 619 P.2d 1055, 1058 (App.1980). The reason underlying these principles is plain. If the issues had been raised at trial, opposing counsel would have been given an opportunity to directly respond, potentially causing different results at the trial and reviewing courts.

. Because of the procedural posture of this case we assume, as we must, that Sabans rented the car to Pitts with knowledge that it was to be used by Fernandez. See Ontiveros v. Borak, 136 Ariz. 500, 503, 667 P.2d 200, 203 (1983).