Tellez v. Saban
226 Ariz. Adv. Rep. 3, 933 P.2d 1233, 188 Ariz. 165 (1996)
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Rule of Law:
A vehicle owner who entrusts a vehicle to a person they know is unlicensed may be found negligent, as the lack of a license creates a question of fact for a jury as to whether the owner breached their duty of care and whether their actions were the proximate cause of a subsequent accident.
Facts:
- Karla Fernandez, a 24-year-old without a valid driver's license, asked John Pitts to help her rent a car.
- Pitts and Fernandez went to Saban’s Rent-A-Car, where Pitts rented a vehicle for Fernandez.
- Pitts explicitly informed Saban's employee, Michael Loan, that Fernandez was going to be the driver.
- When Loan asked for her license, Fernandez admitted she did not have one.
- Loan told Fernandez she could not drive the car off the lot, but then overheard Fernandez and Pitts agree to switch cars 'around the corner.'
- Neither Loan nor Dennis Saban, who was also present, did anything to prevent this exchange.
- Seven days after the one-day rental period expired, Fernandez, after drinking heavily, drove the rental car, ran a red light, and collided with a vehicle driven by Gloria M. Tellez.
- Gloria Tellez died as a result of the collision.
Procedural Posture:
- Jose and Rosario Tellez (Gloria Tellez's parents) filed a wrongful death lawsuit against Dennis Saban and Saban’s Rent-A-Car in the trial court.
- The defendants (Sabans) moved for summary judgment.
- The trial court granted summary judgment for Sabans, ruling as a matter of law that their conduct was not the proximate cause of the accident.
- The Tellezes, as appellants, appealed the trial court's grant of summary judgment to the Arizona Court of Appeals.
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Issue:
Does a rental car company's conduct of knowingly entrusting a vehicle to a person who will give it to an unlicensed driver create a question of fact for a jury regarding whether that conduct constitutes negligence and is a proximate cause of a fatal accident caused by the unlicensed driver?
Opinions:
Majority - Toci, J.
Yes. A reasonable jury could find that the rental company's actions constituted negligence and were a proximate cause of the fatal accident. Although violating the statute requiring inspection of a driver's license is not negligence per se, a rental car agency owes a common law duty to the public to guard against unreasonable risks of harm. Entrusting a vehicle to a driver known to be unlicensed creates a foreseeable risk that the driver may be incompetent, and a reasonable person in the company's position should have inquired further into why the driver lacked a license. This failure to inquire creates a question of fact for the jury on the issue of breach of duty. Furthermore, a jury could find that the company's negligence was a proximate cause of the accident, as it was a cause-in-fact and the unlicensed driver's subsequent negligence was a foreseeable intervening act, not an abnormal or extraordinary one that would break the causal chain.
Dissenting - Voss, J.
No. Sabans' conduct was not negligent, and the unlicensed driver's actions were a superseding cause that broke the chain of causation. The majority improperly extends the tort of negligent entrustment, which requires that the owner know the driver is incompetent, not merely unlicensed. The mere lack of a driver's license is not evidence of incompetence, so Sabans had no knowledge that would trigger a duty to inquire further. Even if Sabans were negligent, Karla Fernandez’s actions—keeping the car for eight days, getting heavily intoxicated, and running a red light—were not foreseeable and constituted a superseding cause of the accident, relieving Sabans of any liability.
Analysis:
This decision significantly impacts the doctrine of negligent entrustment in Arizona by expanding potential liability for those who furnish vehicles, particularly commercial rental agencies. It establishes that knowledge of a driver's unlicensed status is sufficient to create a duty to inquire further into their competence, moving the issue from a question of law often decided on summary judgment to a question of fact for the jury. This lowers the evidentiary bar for plaintiffs and makes it more difficult for defendants like rental companies to avoid trial by arguing lack of proximate cause as a matter of law. The ruling effectively treats the lack of a license as a significant 'red flag' for foreseeability of harm.
