CRST v. Super. Ct. ( 2017 )

Filed 6/19/17 (unmodified opn. attached)
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
CRST, INC. et al., B280270
Petitioners, (Los Angeles County
Super. Ct. No. MC025288)
v.
THE SUPERIOR COURT OF ORDER MODIFYING
LOS ANGELES COUNTY, OPINION
Respondent;
[NO CHANGE IN
MATTHEW JOHN LENNIG et al., JUDGMENT]
Real Party in Interest.
THE COURT:*
It is ordered that the opinion filed herein on May 26, 2017 be
modified as follows:
On page 21, lines 7 and 8, delete the sentence “According to
Davis, on one occasion, Contreras was cited for failing to wear a seat
belt.”
On page 28, lines 12 and 13, delete the phrase “for failing to wear
a seat belt”
On page 28, lines 17 and 18, delete the phrase “for failing to wear
a seat belt”
On page 28, line 20, delete “seatbelt” and substitute “seatbelt-
related”
On page 28, line 23, delete “would” and substitute “or a seatbelt-
related violation could”
The modification does not change the judgment.
_________________________________________________________________
*WILLHITE, Acting P. J., MANELLA, J. COLLINS, J.
2
Filed 5/26/17 (unmodified version)
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
CRST, INC., et al., B280270
Petitioners, (Los Angeles County
Super. Ct. No. MC025288)
v.
THE SUPERIOR COURT OF
LOS ANGELES COUNTY,
Respondent;
MATTHEW JOHN LENNIG et al.,
Real Parties in Interest.
ORIGINAL PROCEEDINGS in mandate. Bryan C.
Yep, Judge. Petition granted.
Bassl, Edlin, Huie & Blum, Fred M. Blum, Michael E.
Gallagher and Lisa M. Stevenson; Greines, Martin, Stein &
Richland, Robert A. Olson, Cynthia E. Tobisman and Alan
Diamond; Yoka & Smith, Christopher E. Faenza and
Benjamin A. Davis for Petitioners.
Parris Law Firm, R. Rex Parris, Bruce L. Schechter
and Khail A. Parris; Grignon Law Firm, Margaret M.
Grignon and Anne M. Grignon for Real Parties In Interest.
___________________________________________
This case arises from a vehicular accident in which a
freightliner driven by petitioners‟ employee struck a vehicle,
causing serious injuries to the passengers, real parties in
interest Matthew and Michael Lennig. The Lennigs brought
negligence claims against the employee and petitioners and
sought punitive damages. After admitting vicarious liability
for any negligence by their employee, petitioners sought
summary adjudication on claims against them for negligent
hiring and entrustment, contending that under Diaz v.
Carcamo (2011) 51 Cal. 4th 1148 (Diaz), their
acknowledgment of vicarious liability barred such claims.
Additionally, both petitioners and the employee sought
summary adjudication on the requests for punitive damages.
The trial court granted summary adjudication in favor of the
employee as to the request for punitive damages against
him, but denied petitioners‟ motion for summary
adjudication in its entirety.
Petitioners sought writ relief, challenging the trial
court‟s denial of summary adjudication only as to the
Lennigs‟ requests for punitive damages. We conclude that
petitioners‟ admission of vicarious liability does not bar
2
recovery of punitive damages, but further conclude there are
no triable issues of fact which, if resolved in the Lennigs‟
favor, could subject petitioners to punitive damages.
Accordingly, we grant the petition for writ of mandate.
FACTUAL AND PROCEDURAL BACKGROUND
In 2014, Hector Contreras was employed as a truck
driver by petitioners CRST, Inc., CRST Expedited, Inc.,
CRST Van Expedited, Inc., and CRST Lincoln Sales, Inc.
(CRST). On July 7, 2014, he drove a CRST freightliner on
the Interstate 14 freeway. As he passed through a
construction area known as the Red Rock Canyon Bridge
project, he collided with a car containing Matthew and
Michael Lennig. Following the accident, CRST terminated
Contreras.
In March 2015, the Lennigs initiated the underlying
personal action. Their third amended complaint (TAC), filed
July 5, 2016, contained claims for negligence and loss of
consortium against Contreras, CRST, and other defendants.
Of those claims, only the following are pertinent here: the
first cause of action against Contreras and CRST for
negligent operation of a motor vehicle; the fourth cause of
action against CRST for negligent hiring, supervision, and
retention; the fifth cause of action against Contreras for
negligent infliction of emotional distress; and the seventh
3
cause of action against CRST for negligent entrustment.1
Each claim included a request for punitive damages.
Contreras sought summary adjudication on the
request for punitive damages accompanying the first and
fifth causes of action, and CRST separately sought summary
adjudication on the fourth and seventh causes of action and
the requests for punitive damages accompanying the first,
fourth, and seventh causes of action. Contreras contended
the requests for punitive damages against him failed for
want of evidence to support the TAC‟s key allegation
regarding those requests, namely, that he was intoxicated
when the collision occurred. CRST maintained that under
Diaz, the fourth and seventh causes of action should be
dismissed because CRST admitted vicarious liability for any
negligent driving by Contreras. CRST also challenged the
requests for punitive damages, arguing that its conduct did
not meet the standards for an award of punitive damages, as
set forth in Civil Code section 3294.2
The trial court granted summary adjudication in
Contreras‟s favor, concluding that no triable issues existed
whether he was under the influence of drugs or alcohol at
the time of the collision, but denied CRST‟s motion for
summary adjudication in its entirety. On January 23, 2017,
CRST filed its petition for writ of mandate, prohibition, or
1 The first, fourth, and seventh causes of action were
asserted by Matthew and Michael Lennig, and the fifth cause of
action was asserted by Michael Lennig.
2 All further statutory citations are to the Civil Code.
4
other relief, challenging the trial court‟s denial of summary
adjudication only as to the requests for punitive damages.
We issued an alternative writ of mandate directing the
court‟s and parties‟ attention to Diaz, and imposed a
temporary stay.
DISCUSSION
CRST contends the trial court erred in denying
summary adjudication on the requests for punitive damages
against it accompanying the first, fourth, and seventh
causes of action. CRST asserts (1) that Diaz bars the
recovery of punitive damages in view of CRST‟s acceptance
of vicarious liability, and (2) that there are no triable issues
regarding the propriety of an award of punitive damages
under section 3294. As explained below, we reject CRST‟s
contention regarding Diaz, but agree with its second
contention.
A. Standard of Review
“An order denying a motion for summary adjudication
may be reviewed by way of a petition for writ of mandate.
[Citation.] Where the trial court‟s denial of a motion for
summary judgment will result in trial on non-actionable
claims, a writ of mandate will issue. [Citations.] Likewise,
a writ of mandate may issue to prevent trial of non-
actionable claims after the erroneous denial of a motion for
summary adjudication. [¶] Since a motion for summary
judgment or summary adjudication „involves pure matters of
law,‟ we review a ruling on the motion de novo to determine
5
whether the moving and opposing papers show a triable
issue of material fact. [Citations.] Thus, the appellate court
need not defer to the trial court‟s decision. „“We are not
bound by the trial court‟s stated reasons, if any, supporting
its ruling; we review the ruling, not its rationale.”‟3
[Citations.]” (Travelers Casualty & Surety Co. v. Superior
Court (1998) 63 Cal. App. 4th 1440, 1450.)
B. Governing Principles
Because the key issues before us concern the extent
to which CRST‟s admission of vicarious liability shields it
from an award of punitive damages, we examine the
principles governing an employer‟s vicarious liability for
damages. Under the doctrine of respondeat superior, “an
employer is vicariously liable for the torts of its employees
committed within the scope of the employment.” (Lisa M.
v. Henry Mayo Newhall Memorial Hospital (1995) 12
Cal. 4th 291, 296.) The employer is thus liable for the
compensatory damages attributable to the employee‟s
misconduct, even when the employer is “innocent” of fault.
(Miller v. Stouffer (1992) 9 Cal. App. 4th 70, 84, italics
3 The parties asserted numerous objections to each other‟s
evidentiary showing. Because the trial court denied some
objections but did not expressly rule on the remaining ones, we
presume all to have been overruled. (Reid v. Google, Inc. (2010)
50 Cal. 4th 512, 534 (Reid).) As neither side has resurrected their
objections before us, we examine the trial court‟s rulings in light
of the entire body of evidence submitted in connection with
CRST‟s motion for summary adjudication.
6
omitted.) The rationale for the doctrine closely parallels
the justification for imposing strict products liability on
nonnegligent product manufacturers. (Far West Financial
Corp. v. D & S Co. (1988) 46 Cal. 3d 796, 813, fn. 13.) As
our Supreme Court has explained, “„[t]he losses caused by
the torts of employees, which as a practical matter are sure
to occur in the conduct of the employer‟s enterprise, are
placed upon that enterprise itself, as a required cost of
doing business.‟” (Ibid., quoting Prosser & Keeton on Torts
(1984) § 69, p. 500 [fns. omitted].)
The special features of vicarious liability determine
the employer‟s share of liability for compensatory damages
under the comparative fault system, which allocates
liability for tort damages in direct proportion to fault. 4
(Diaz, supra, 51 Cal.4th at pp. 1152, 1156.) As noted
above, the respondeat superior doctrine attributes liability
for compensatory damages to an employer, independent of
4 The comparative fault doctrine “is designed to permit the
trier of fact to consider all relevant criteria in apportioning
liability. The doctrine „is a flexible, commonsense concept, under
which a jury properly may consider and evaluate the relative
responsibility of various parties for an injury (whether their
responsibility for the injury rests on negligence, strict liability, or
other theories of responsibility), in order to arrive at an “equitable
apportionment or allocation of loss.”‟ [Citation.]” (Rosh v. Cave
Imaging Systems, Inc. (1994) 26 Cal. App. 4th 1225, 1233, quoting
Knight v. Jewett (1992) 3 Cal. 4th 296, 314.) A defendant has the
burden of showing that some nonzero percentage of fault is
properly attributed to the plaintiff or an individual other than the
defendant. (See Sparks v. Owens-Illinois, Inc. (1995) 32
Cal. App. 4th 461, 476.)
7
any fault on the employer‟s part. Accordingly, within the
comparative fault system, when an employer is liable
solely on a theory of respondeat superior, “the employer‟s
share of liability for the plaintiff”s damages corresponds to
the share of fault that the jury allocates to the employee.”
(Id. at p. 1157.)
In contrast, under the respondeat superior doctrine,
the employer is not liable for punitive damages absent
fault or misconduct on the employer‟s part. (College
Hospital Inc. v. Superior Court (1994) 8 Cal. 4th 704, 724,
fn. 11 (College Hospital); Weeks v. Baker & Mckenzie (1998)
63 Cal. App. 4th 1128, 1155 (Weeks); Merlo v. Standard Life
& Acc. Ins. Co. (1976) 59 Cal. App. 3d 8, 18 (Merlo).) Unlike
compensatory damages, which seek to make the plaintiff
whole, punitive damages are intended to deter general
types of misconduct. (College Hospital, supra, 8 Cal.4th at
p. 712.) California courts have long held that punitive
damages may, under appropriate circumstances, be
recoverable for nondeliberate or unintentional torts,
including actions in which the theory of recovery for
compensatory damages from the defendant is based on
strict products liability (Grimshaw v. Ford Motor Co.
(1981) 119 Cal. App. 3d 757, 810 (Grimshaw)) or vicarious
liability (see Merlo, supra, 59 Cal.App.3d at p. 18).
Accordingly, upon a suitable demonstration of employer
misconduct, a vicariously liable employer may be subject to
an award of punitive damages when an employee was
negligent. (Farvour v. Geltis (1949) 91 Cal. App. 2d 603,
8
604-606; see Nolin v. National Convenience Stores, Inc.
(1979) 95 Cal. App. 3d 279, 284-289.)
The standard of misconduct for the recovery of
punitive damages from a vicariously liable employer has
been refined and modified. (See Weeks, supra, 63
Cal.App.4th at pp. 1148-1149.) Prior to the enactment of
the current version of section 3294, California courts
followed the rule stated in the Restatement of Torts section
909, which permits the imposition of punitive damages on
an employer in several circumstances, including when
“„“the [employee] was unfit and the [employer] was reckless
in employing him . . . .”‟”5 (Weeks, supra, 63 Cal.App.4th at
pp. 1148-1149; Merlo, supra, 59 Cal.App.3d at p. 18; see
College Hospital, supra, 8 Cal.4th at p. 723.)
The requisite employer misconduct is now specified
in subdivision (b) of section 3294, which states that an
employer may be liable for punitive damages when “„the
employer had advance knowledge of the unfitness of the
employee and employed him or her with a conscious
disregard of the rights or safety of others or authorized or
ratified the wrongful conduct for which the damages are
5 Restatement of Torts section 909 states: “Punitive damages
can properly be awarded against a master or other principal
because of an act by an agent if, but only if, [¶] (a) the principal
authorized the doing and the manner of the act, or [¶] (b) the
agent was unfit and the principal was reckless in employing him,
or [¶] (c) the agent was employed in a managerial capacity and
was acting in the scope of employment, or [¶] (d) the employer or
a manager of the employer ratified or approved the act.”
9
awarded or was personally guilty of oppression, fraud, or
malice . . . .‟” (Weeks, supra, 63 Cal.App.4th at p. 1148.)
The statute further provides that “„[w]ith respect to a
corporate employer, the advance knowledge and conscious
disregard, authorization, ratification or act of oppression,
fraud, or malice must be on the part of an officer, director,
or managing agent of the corporation.‟” (Ibid.) An award
of punitive damages under the statute must be supported
by findings made on clear and convincing evidence.
(Barton v. Alexander Hamilton Life Ins. Co. of America
(2003) 110 Cal. App. 4th 1640, 1644.)
C. Diaz does not bar the recovery of punitive damages
We begin with the issue to which we directed the
parties‟ attention, viz., whether under Diaz, CRST‟s
admission of vicarious liability precludes the recovery of
punitive damages against it.6 Because the material facts
here are undisputed, the key issues before us concern the
application of Diaz to section 3294, subdivision (b).
In Diaz, the Supreme Court‟s focus was on a rule set
forth in Armenta v. Churchill (1954) 42 Cal. 2d 448
(Armenta), which was decided before the adoption of the
comparative fault system. Armenta involved a wrongful
death action in which the plaintiff sought compensatory
6 Petitioners do not challenge the trial court‟s denial of
summary adjudication on the claims for negligent hiring and
entrustment. Application of Diaz to those claims is
therefore not before us.
10
damages from the driver of a dump truck and its owner,
alleging that her husband died when the dump truck
backed over him. (Id. at p. 451.) The plaintiff asserted a
claim for negligence against the driver and a claim for
negligent entrustment against the owner based on
allegations that she knew the driver had a poor driving
record. (Id. at p. 456.) After the defendants admitted that
the driver was acting within the scope of his employment
at the time of the accident, the trial court barred the
plaintiff from introducing evidence at trial regarding the
owner‟s knowledge of the driver‟s driving record. (Ibid.)
Affirming that ruling, our Supreme Court explained that
the complaint‟s allegations merely asserted two alternative
theories -- namely, negligence and vicarious liability --
under which the plaintiff “sought to impose upon [the
owner] the same liability as might be imposed upon [the
driver].” (Id. at p. 457.) Because the owner‟s admission of
vicarious liability established her liability for the driver‟s
tort, “there was no material issue remaining to which the
offered evidence could be legitimately directed.” (Id. at
pp. 457-458.)
Diaz examined whether the Armenta rule survived
adoption of the comparative fault system. In Diaz, the
plaintiff was injured when the car she was driving collided
with another passenger vehicle and a commercial truck.
(Diaz, supra, 51 Cal.4th at pp. 1152-1153.) In addition to
asserting negligence claims against the drivers of the
passenger vehicle and truck, she alleged that the truck‟s
owner was vicariously liable for the driver‟s negligence and
11
directly liable for its own negligence in hiring and retaining
him. (Ibid.) Notwithstanding Armenta, the trial court
permitted the plaintiff to introduce evidence of the driver‟s
poor employment and driving record, even though the owner
admitted vicarious liability for any negligence by the driver.
(Id. at p. 1153.) A jury returned verdicts in the plaintiff‟s
favor, including her claims against the owner for negligent
hiring and retention, and allocated different shares of
liability for compensatory damages among the three
defendants. (Ibid.) The Court of Appeal affirmed the
judgment, concluding that the adoption of the comparative
fault system vitiated Armenta. (Id. at p. 1154.)
Reversing the judgment of the Court of Appeal, our
Supreme Court reaffirmed Armenta. (Diaz, supra, 51
Cal.4th at pp. 1154-1161.) The court determined that within
the context of the comparative fault system, when the
plaintiff alleges that an employee engaged in negligent
driving, and seeks damages from the employer on the basis
of vicarious liability and claims of negligent hiring,
retention, or entrustment, the employer‟s share of liability is
necessarily coextensive with that of the employee. (Ibid.)
Accordingly, “[i]f . . . an employer offers to admit vicarious
liability for its employee‟s negligent driving, then claims
against the employer based on theories of negligent
entrustment, hiring, or retention become superfluous. To
allow such claims in that situation would subject the
employer to a share of fault in addition to the share of fault
assigned to the employee, for which the employer has
already accepted liability.” (Id. at p. 1160.) The court thus
12
restated and endorsed the Armenta rule, which it
characterized as “bar[ring]” a claim for negligent
entrustment when the employer admits vicarious liability
for an employee‟s negligent conduct. (Id. at p. 1158.)
As noted, petitioners have not challenged the trial
court‟s denial of summary adjudication on the claims for
negligent entrustment and retention. The issue before us is
whether, under Diaz, petitioners‟ admission of vicarious
liability bars the recovery of punitive damages. We conclude
it does not. Diaz and Armenta establish that when an
employer admits vicarious liability, the plaintiff may seek
compensatory damages from the employer only on a theory
of vicarious liability. Because neither Diaz nor Armenta
addressed an action in which punitive damages were sought,
in each case the employer‟s admission of vicarious liability
necessarily rendered superfluous any allegations or evidence
bearing on the employer‟s own misconduct.
That is not the case, however, when the plaintiff seeks
compensatory damages from the employer on a theory of
vicarious liability, and also requests punitive damages from
the employer. As explained above (see pt. B. of the
Discussion, ante), under the theory of vicarious liability, the
employer may be subject to punitive damages upon a proper
showing of misconduct, the standards for which are specified
in section 3294, subdivision (b). Allegations in the
complaint relating to that misconduct do not constitute a
separate cause of action, but attach to the claim for recovery
13
against the employer under the theory of vicarious liability. 7
(See Coleman v. Gulf Ins. Group (1986) 41 Cal. 3d 782, 789,
fn. 2. [“[T]here is no separate or independent cause of action
for punitive damages”]; McLaughlin v. National Union Fire
Ins. Co. (1994) 23 Cal. App. 4th 1132, 1163 [“In California
there is no separate cause of action for punitive damages”].)
Thus, when an employer such as CRST admits vicarious
liability, neither the complaint‟s allegations of employer
misconduct relating to the recovery of punitive damages nor
the evidence supporting those allegations are superfluous.
Nothing in Diaz or Armenta suggests otherwise.
CRST directs our attention to Ferrer v. Okbamicael
(Colo. 2017) 390 P.3d 836, 847-848, in which the Colorado
Supreme Court adopted a rule similar to that stated in Diaz
and Armenta, and further concluded that under Colorado
law, the rule barred the recovery of punitive damages from
the employer admitting vicarious liability. Ferrer is
distinguishable, however, because the Colorado statute
governing punitive damages, unlike section 3294, contains
no provision authorizing an award of punitive damages
7 As our Supreme Court has explained, the pleading
requirements for such a claim are minimal: “„In order to state a
cause of action against defendant for a wrong committed by his
servant, the ultimate fact necessary to be alleged is that the
wrongful act was in legal effect committed by defendant. This
may be alleged either by alleging that defendant by his servant
committed the act, or, without noticing the servant, by alleging
that defendant committed the act.‟” (Golceff v. Sugarman (1950)
36 Cal. 2d 152, 154, quoting 57 C.J.S. 386.)
14
against an employer responsible for compensatory damages
on a theory of vicarious liability.8
CRST also suggests that extending the Diaz-Armenta
rule to bar the recovery of punitive damages from an
employer admitting vicarious liability would promote
beneficial public policies, arguing that such a rule would
encourage employers to admit vicarious liability. We
disagree. In Grimshaw, the court concluded that
considerations of public policy support the recovery of
punitive damages from manufacturers of defective products
under a theory of strict products liability, which rests on a
justification similar to that underlying the doctrine of
respondeat superior. (Grimshaw, supra, 119 Cal.App.3d at
p. 810.) Absent such a rule, the court stated, “in commerce-
related torts, the manufacturer may find it more profitable
to treat compensatory damages as part of the cost of doing
business rather than to remedy the [product‟s] defect.”
(Ibid.) That rationale applies here as well. If the Diaz-
Armenta rule were extended in the manner CRST suggests,
employers indifferent to public safety might find it more
8 Colorado Revised Statutes Annotated section 13-21-
102(1)(a) provides: “In all civil actions in which damages are
assessed by a jury for a wrong done to the person or to personal or
real property, and the injury complained of is attended by
circumstances of fraud, malice, or willful and wanton conduct, the
jury, in addition to the actual damages sustained by such party,
may award him reasonable exemplary damages. The amount of
such reasonable exemplary damages shall not exceed an amount
which is equal to the amount of the actual damages awarded to
the injured party.”
15
profitable to admit vicarious liability when sued, and treat
any resulting compensatory damages as part of the cost of
doing business, rather than remedy practices that enable
them to employ unsafe drivers. In sum, we conclude CRST‟s
admission of vicarious liability did not bar the Lennigs‟
requests for punitive damages.
D. There are no triable issues under section 3294,
subdivision (b)
We turn to CRST‟s remaining contention, namely, that
it is not properly subject to punitive damages under the
standards set forth in section 3294, subdivision (b).
1. TAC’s Allegations
In assessing the trial court‟s ruling, we look first to the
allegations in the TAC, which frame the issues pertinent to
CRST‟s motion for summary adjudication. (Bostrom v.
County of San Bernardino (1995) 35 Cal. App. 4th 1654,
1662.) However, we disregard the TAC‟s allegations that
Contreras was potentially intoxicated at the time of the
accident, as the trial court determined there was insufficient
evidence to support those allegations in granting Contreras‟s
motion for summary adjudication. Although the Lennigs, in
opposing CRST‟s petition, suggest that the accident was due
to Contreras‟s intoxication, they did not seek review of the
ruling on the motion by Contreras, who -- though nominally
a real party in interest in this proceeding -- has not
appeared or filed a brief. We therefore decline to examine
the trial court‟s determination regarding Contreras‟s lack of
16
intoxication. (Transworld Systems, Inc. v. County of
Sonoma (2000) 78 Cal. App. 4th 713, 716, fn. 4 [in appeal
from grant of summary judgment, respondents‟ failure to
take cross-appeal from a related unfavorable ruling forfeited
its challenge to that ruling]; Campbell v. Superior Court
(2005) 132 Cal. App. 4th 904, 922 [in writ petition proceeding
regarding specific ruling, real party‟s failure to seek review
of related unfavorable ruling precluded attack on that
ruling].)
The TAC alleges that CRST communicates to its
employees and the public that “its single greatest priority” is
“the safety of its drivers and the public.” CRST has thus
implemented certain safety policies, including background
checks of prospective employees. To discharge the duty of
conducting those checks -- which the TAC characterizes as
nondelegable -- CRST hired a third party company to
investigate prospective employees.
According to the TAC, the third party company failed
to conduct an adequate check of Contreras‟s criminal record.
Furthermore, although it discovered that Contreras had
suffered a conviction for a misdemeanor or felony within
seven years of his employment application, CRST did not
exercise due diligence in investigating the conviction. In
addition, in violation of a CRST policy mandated by federal
law, CRST allegedly failed to make inquiries to Contreras‟s
former employers regarding his drug and alcohol use. Had
CRST done so, it would have discovered that Contreras had
a criminal history, including multiple convictions for the
possession and use of illegal substances, a conviction for
17
driving under the influence of an intoxicating substance, and
a conviction for grand theft of an automobile.
The TAC further alleges that under federal
regulations, employers must test a specified minimum
percentage of drivers per year for the use of drugs and
alcohol. However, CRST failed to implement a random drug
testing policy.
According to the TAC, on December 5, 2013, CRST
hired Contreras as a driver. Between that date and the July
7, 2014 accident involving the Lennigs, Contreras caused
four preventable accidents, two of which occurred between
June 26 and July 3, 2014. Marge Davis and Dale Stanek --
whom the TAC characterizes as “managing agents” for
CRST -- responded to the accidents by requiring Contreras
to take a driving course.
Within the two-month period preceding the July 7,
2014 accident involving the Lennigs, Richard Oliver III,
Contreras‟s co-driver, allegedly told Davis that police officers
had stopped Contreras for tailgating and speeding in a
construction zone. Although CRST has a policy of
terminating drivers who speed or compelling them to
undergo driver education, Davis took no action against
Contreras.
Some or all of CRST‟s trucks have a “Qualcomm”
system, which permits CRST‟s dispatchers to communicate
with the trucks. As early as June 25, 2014, Davis allegedly
knew that the Qualcomm system in Contreras‟s truck was
not functioning, but she permitted Contreras to continue
driving the truck.
18
Under CRST‟s policies, probationary drivers such as
Contreras must be accompanied by a co-driver.
Commencing on July 3, 2014, Davis allowed Contreras to
operate his truck alone during a 370-mile trip from San
Rafael to Lancaster, and further permitted him to have sole
possession of the truck over the July 4 weekend. According
to the TAC, on July 3, Davis and Stanek received a
notification from an electronic module in the truck that it
was travelling at 99 miles per hour, but took no action. The
following day, the module informed Davis that Contreras
had driven the truck from Lancaster to a lake. Davis did not
contact Contreras regarding his use of the truck.
Finally, the TAC alleges that on July 7, 2014, while
travelling south through the Red Rock Bridge Project
construction area, Contreras‟s truck crossed over into a lane
for northbound traffic, and hit the car containing Matthew
and Michael Lennig.
2. CRST’s Showing
In seeking summary judgment, CRST‟s motion denied
that Davis and Stanek were managing agents within the
meaning of section 3294, subdivision (b). According to
CRST, during the pertinent period, Davis was a fleet
manager responsible for dispatching and tracking trucks,
and Stanek was a safety supervisor responsible for
investigating accidents and resolving safety issues with
drivers.
CRST submitted evidence supporting the following
version of the underlying events: Contreras‟s employment
19
application stated that he had no license suspensions, felony
convictions, or convictions or accidents involving substance
abuse. Under federal regulations, CRST was required to
investigate Contreras‟s driving records and history of drug
and alcohol use for a three-year period preceding his
application. (49 C.F.R. § 391.23 (2016).) The regulations
permitted CRST to hire a third party to conduct the
investigation. In November 2013, a third party company
informed CRST that it found that Contreras had had a valid
driver‟s license since 2005, that his driving record showed no
traffic violations or convictions after the license was issued,
and that he had no record of a criminal conviction within the
previous seven years.
During the pertinent period, CRST complied with all
federal regulations regarding the testing of its drivers for
drug and alcohol use. Before hiring Contreras, CRST
required him to submit to drug and alcohol screening. He
tested negatively for drugs and alcohol.
Under CRST‟s policies, after a driver completes a 28-
day training course and acquires certain certifications, the
driver is classified as a “co-driver.” Ordinarily, co-drivers
are paired into two-person teams, but they are permitted to
drive alone unless assigned to a “high valued freight load.”
After CRST hired Contreras, he successfully completed his
training in January 2014 and was placed on a co-driver
team.
Prior to the July 7, 2014 accident involving the
Lennigs, Contreras was involved in two minor preventable
accidents. Those accidents occurred in January 2014, on
20
occasions when he backed up his truck. As a result of the
accidents, CRST required Contreras to complete additional
driver training.
Davis testified that prior to the July 7, 2014 accident,
she received no complaint from Oliver that Contreras had
been stopped for driving at an excessive speed through a
construction area. According to Davis, on one occasion,
Contreras was cited for failing to wear a seat belt. She
further testified that had police officers stopped Contreras
for speeding, they would have issued a speeding citation to
him, and CRST would have terminated him.
From June 25, 2014 to the date of the accident
involving the Lennigs, Contreras‟s truck had a working
Qualcomm unit. On July 3, 2014, Contreras used the
Qualcomm unit to inform CRST that he would be on “home
time” until July 7, and he retained possession of a CRST
tractor during that period. CRST submitted evidence that
on July 3, the electronic module in Contreras‟s truck did not
indicate that it was travelling at 99 miles per hour; rather,
the annotation “MPH 99” in the truck‟s “[l]oad [h]istory” for
that date was a default code that the load would not be
delivered on time.9
On July 7, 2014, Contreras was driving to the CRST
Riverside Terminal in the CRST tractor when he collided
with the Lennigs‟ car. At that time, he was acting within
9 CRST also submitted evidence that following the July 7,
2014 accident, CRST complied with federal rules regarding post-
accident testing of drivers.
21
the scope and course of his employment. Following the
accident, CRST complied with federal rules regarding post-
accident testing of drivers.
3. The Lennigs’ Showing
In opposing summary adjudication, the Lennigs did
not dispute numerous items in CRST‟s separate statement
of undisputed facts, including that CRST complied with
federal rules regarding drug and alcohol testing, and that in
hiring Contreras, CRST complied with federal regulations
regarding pre-employment screening.10 However, they
offered testimony from Charles Haffenden (designated by
CRST as its “person most knowledgeable”) that in or after
2011, CRST, like all other freight carriers, lowered its
standards for hiring truck drivers.
According to the Lennigs‟ showing, from 1981 to 1989,
the City of Los Angeles employed Contreras as a garbage
truck driver. He was fired from that position because he
10 The Lennigs attempted to challenge some items in CRST‟s
separate statement of undisputed facts by asserting evidentiary
objections to CRST‟s showing. Because the trial court did not rule
on the objections, they were effectively overruled. (Reid, supra,
50 Cal.4th at p. 534) As the Lennigs do not challenge those
evidentiary rulings before us, we view the pertinent items in
CRST‟s separate statement as undisputed for purposes of our
analysis. (Wall Street Network, Ltd. v. New York Times Co.
(2008) 164 Cal. App. 4th 1171, 1181 [appellant‟s failure to address
trial court‟s evidentiary rulings in connection with summary
judgment forfeited contentions of error on appeal regarding
rulings].)
22
began to use drugs heavily. From May 1995 to February
2007, Contreras suffer convictions for numerous offenses,
including possession of illegal substances and paraphernalia
and driving under the influence of an intoxicating substance.
In applying for employment with CRST, Contreras falsely
denied the existence of his criminal record, traffic offenses,
and history of substance abuse.
The Lennigs submitted evidence that CRST
contravened its safety policies in permitting Contreras to
drive their trucks. CRST allowed Contreras to drive his
truck without a co-driver, even though his personnel record
contained the notation, “co-drive until 11/28/14.”
Furthermore, CRST violated its policy that a driver should
be terminated for a serious traffic violation or for causing six
preventable accidents within an eight-month period.
According to the Lennigs‟ showing, approximately two
weeks before the July 7, 2014 accident involving the
Lennigs, Contreras drove through a construction zone,
accompanied by Oliver, and was issued a ticket. Oliver
testified that although Contreras was tailgating and
speeding, the officer issued a ticket only for a seatbelt
violation.11 Oliver reported the incident to Davis, who took
no action against Contreras. Additionally, the Lennigs
maintained the existence of another speeding incident,
contending that the truck‟s “load history,” as generated by
11 According to Oliver, the officer saw Oliver transfer from the
passenger seat to the truck‟s sleeper unit while the truck was
moving, and issued a citation to Contreras for Oliver‟s failure to
wear a seat belt.
23
the Qualcomm unit, showed on its face that the truck
travelled at 99 miles per hour on July 3, 2014.12
The Lennigs further asserted that during the eight
months preceding the July 7, 2014 accident, Contreras was
involved in four preventable accidents. Aside from the two
accidents admitted by CRST, Oliver testified that in the
course of a road trip during which he acted as Contreras‟s
co-driver, Contreras caused two other accidents, although
Oliver did not describe them.13 CRST‟s records for
Contreras contain the following remarks following the July
7, 2014, accident: “[Contreras] was on hometime and drove
the truck unauthorized and got into a accident. His accident
record shows prior accident[s] .” The records list four prior
accidents, although one is accompanied by the annotation,
“hit by other vehicle.”
In an effort to show that Stanek was aware that
Contreras was an unsafe driver prior to the July 7, 2014
accident, the Lennigs offered evidence that following the
accident, Davis and Stanek discussed Contreras in e-mails.
In an e-mail dated July 21, 2014, Stanek told Davis that he
was attempting to obtain a copy of the police report
12 Notwithstanding the TAC‟s allegation to the contrary, the
Lennigs acknowledged that from June 25 to July 7, 2014,
Contreras‟s truck had an operational Qualcomm unit.
13 In addition to this showing, the Lennigs offered evidence
regarding facts not directly relevant to Contreras‟s driving,
including that he was homeless when hired and at the time of the
July 7, 2014 accident, and that he used marijuana shortly before
his deposition in the underlying action.
24
regarding the accident through an adjuster, stating,
“Hector‟s record is questionable. If the report comes back
unfavorable, this will be his third accident in six months.”
Later, on August 6, 2014, Stanek informed Davis that he
had not heard from the adjuster, and stated: “As I
mentioned before, Hector has had other accidents. He
seemed unsure who hit who in this accident. Given his
accident record, I feel there is a reasonable chance Hector is
at fault in the last accident.”
The Lennigs also maintained that Davis and Stanek
were managing agents within the meaning of section 3294,
subdivision (b). According to the Lennigs‟ showing, Davis
supervised as many as 100 drivers, oversaw their freight-
related activities, ensured that they maintained their
qualifications and trucks, authorized their “home time” and
truck use, and interacted with safety supervisors such as
Stanek. Contreras and Oliver viewed her as their “boss” or
“immediate supervisor.” When necessary, she terminated
drivers for unsafe driving. Stanek supervised CRST staff
regarding compliance with federal safety regulations and
the prevention of future accidents.
4. Analysis
We conclude that there are no triable issues whether
CRST is properly subject to punitive damages under the
standards specified in section 3294, subdivision (b). As
explained below, although the record does not suggest that
CRST authorized or ratified Contreras‟s misconduct or
“personally” engaged in oppression, fraud, or malice, it
25
raises triable issues whether Davis -- but not Stanek -- “had
advance knowledge of . . . [Contreras‟s] . . . unfitness . . . and
employed him . . . with a conscious disregard of the rights or
safety of others . . . .” (§ 3294, subd. (b).) Nonetheless, there
is no evidence that Davis was a “managing agent,” for
purposes of section 3294, subdivision (b).
a. “Advance Knowledge” and “Conscious
Disregard”
In evaluating the existence of the requisite “advance
knowledge” and “conscious disregard,” our focus is on the
period of Contreras‟s employment by CRST. Although
Contreras had a lengthy record of substance abuse, poor
driving, and criminal activity up to 2007, it is undisputed
that CRST complied with federal regulations in conducting
the pre-employment background check and did not discover
those facts regarding Contreras. We therefore examine
whether CRST acquired knowledge of Contreras‟s unfitness
as a driver after he was hired, yet improperly continued to
employ him.
We assess CRST‟s “advance knowledge” and “conscious
disregard” in light of its policies, which required the
termination of a driver for serious traffic violations or
causing six preventable accidents within an eight-month
period.14 In view of these policies, CRST did not act
14 In making this assessment, we recognize that CRST
allowed Contreras to drive a tractor by himself on July 7, 2014,
even though his personnel file contained the notation “co-drive
until 11/28/14.” However, in view of the unrebutted evidence that
(Fn. continued on the next page.)
26
improperly by retaining Contreras, even though he may
have been involved in as many as four preventable
accidents, because nothing in the record suggests that they
were serious.
Nor did the annotation “MPH 99” in the truck‟s July 3,
2014 load history reasonably show that Contreras was an
unsafe driver. That annotation is located on a document
entitled “Load History Comment Info,” which contains
notations and acronyms, none which are defined. Among
these are the following:
“4475 TRACKING CODE SET TO 0 RS MPH 33 ON 7/02
AT 07:09 . . . [¶]
4475 TRACKING CODE SET TO 0 RS MPH 32 ON 7/02 AT
14:00 . . . [¶]
4475 TRACKING CODE SET TO 0 RS MPH 99 ON 7/03 AT
06:39 . . .”
As the document itself invites only speculation
regarding the meaning of these remarks, the existence of a
triable issue hinges on the evidence regarding their
meaning. Davis testified that in July 2014, CRST had no
method of monitoring the current speed of its trucks.
Instead, CRST tracked a truck‟s “load history,” which
included a reading -- stated in miles per hour -- of the
average speed the truck would have to travel in order to
CRST‟s policies permitted drivers with Contreras‟s qualifications
to drive alone unless assigned to a high-value freight load, we
conclude that Contreras‟s solitary driving creates no material
triable issue absent any triable issues relating to the known
safety of his driving, which we examine below.
27
deliver its load on time. Thus, a reading of 33 miles per
hour in the truck‟s load history meant that at the time of the
reading, the truck was required to travel at that average
speed in order to make a timely delivery. CRST also offered
evidence that its trucks have governors that cut power when
they exceed 65 miles per hour. In opposing summary
adjudication, the Lennigs presented no evidence that the
load history reflected that Contreras‟s truck was travelling
at 99 miles per hour on July 3. Accordingly, the annotation
“MPH 99” cannot reasonably be viewed as evidence that
Contreras was an unsafe driver.
The evidence regarding Contreras‟s traffic citation for
failing to wear a seat belt, however, raises triable material
issues regarding CRST‟s “advance knowledge” and
“conscious disregard.” According to the Lennigs‟ showing, in
mid-June 2014, before the accident involving the Lennigs,
Contreras was issued a citation for failing to wear a seat
belt. According to Oliver, although Contreras was tailgating
and speeding while driving through a construction zone, the
officer issued a ticket only for a seatbelt violation. Oliver
allegedly reported the incident to Davis. Davis denied
hearing any such report from Oliver, but acknowledged that
speeding in a construction zone would support a driver‟s
termination. In our view, Oliver‟s testimony, if credited by a
jury, is sufficient to show that CRST had “advance
knowledge of [Contreras‟s] unfitness . . . and employed him
. . . with a conscious disregard of the rights or safety of
others.” (§ 3294, subd. (b).)
28
b. Managing Agents
Because there is no dispute that CRST is a “corporate
employer,” the remaining issue is whether “the advance
knowledge” and “conscious disregard” was by a “managing
agent of the corporation.” (§ 3294, subd. (b).) Our focus is
on Davis and Stanek, the two employees identified as
potential “managing agents” in the TAC.15
Nothing before us suggests that Stanek had the
requisite “advance knowledge” regarding Contreras‟s lack of
fitness. Although the record shows that Stanek was CRST‟s
safety supervisor, it contains no evidence that Stanek was
aware of Contreras‟s driving history prior to the July 7, 2014
accident. The record shows only that in e-mails dated July
21 and August 6, 2014, Stanek described Contreras‟s driving
record as “questionable” due to two prior accidents. In our
view, that evidence supports no reasonable inference that
Stanek knew of Contreras‟s “unfitness” prior to the July 7,
2014 accident. (See College Hospital, supra, 8 Cal.4th at
pp. 723-724.)
As triable issues exist regarding Davis‟s pre-accident
knowledge of Contreras‟s driving, we examine whether she
was a managing agent. Generally, “principal liability for
punitive damages [does] not depend on employees‟
managerial level, but on the extent to which they exercise
substantial discretionary authority over decisions that
ultimately determine corporate policy.” (White v. Ultramar,
15 Although the Lennigs‟ return also points to Haffenden as a
potential managing agent for CRST, the return identifies no
evidence that he was aware of Contreras‟s driving record before
the July 7, 2014.
29
Inc. (1999) 21 Cal. 4th 563, 576-577 (White).) Thus, to
establish that an individual is a managing agent, a plaintiff
seeking punitive damages must show that “the employee
exercised substantial discretionary authority over
significant aspects of a corporation‟s business.” (Id. at
p. 577.) In this context, “corporate policy” refers to “„formal
policies that affect a substantial portion of the company and
that are of the type likely to come to the attention of
corporate leadership.‟” (Roby v. McKesson Corp. (2009) 47
Cal. 4th 686, 715; Cruz v. Homebase (2000) 83 Cal. App. 4th
160, 167-168 [“„corporate policy‟ is the general principles
which guide a corporation, or rules intended to be followed
consistently over time in corporate operations,” and thus “[a]
„managing agent‟ is one with substantial authority over
decisions that set these general principles and rules”].)
The key inquiry thus concerns the employee‟s
authority to change or establish corporate policy. (Myers v.
Trendwest Resorts, Inc. (2007) 148 Cal. App. 4th 1403, 1437.)
The fact that an employee has a supervisory position with
the power to terminate employees under his or her control
does not, by itself, render the employee a managing agent.
(White, supra, 21 Cal.4th at pp. 576-577; Kelly-Zurian v.
Wohl Shoe Co. (1994) 22 Cal. App. 4th 397, 421.) Nor does
the fact that an employee supervises a large number of
employees necessarily establish that status. (Muniz v.
United Parcel Service, Inc. (N.D. Cal. 2010) 731 F. Supp. 2d
961, 976 [fact that operations manager was “„in charge of 6
divisions, 23 package centers and approximately 40
managers, 150 supervisors and 4,200 employees‟”
30
insufficient to raise triable issue whether he was managing
agent, absent evidence that he set corporate policy].)
The record discloses no evidence that Davis had the
requisite authority. As a fleet manager, Davis served under
an operations supervisor, and her main responsibility was to
dispatch drivers. Davis testified that she managed a fleet of
drivers, planned and tracked their freight hauling, resolved
their payroll and vacation issues, ensured they maintained
their qualifications, and “deal[t] internally” with customer
services, the safety department, and “upper management.”
She oversaw from 48 to 100 drivers, and was authorized to
terminate drivers for unsafe driving.
Davis further stated that although she was the “first
person in charge of the drivers from a safety standpoint,”
she interacted with the safety department, which placed
“stop[s] on . . . driver[s],” directed them to take defensive
driving courses, and ordered random drug and alcohol
testing. When she received a complaint from a driver that
another driver had been involved in a safety incident, her
responsibility was to report the incident to the safety
department or “HR.” She adjusted the scope of her own
investigation on a case-by-case basis, taking into account the
gravity of any safety violation. She usually handled
“personal issue[s] between one driver and another driver,”
and forwarded “safety issue[s]” to the safety department. In
our view, nothing in this evidence suggests that Davis had
discretionary authority sufficiently substantial to influence
CRST‟s corporate policies.
31
The decisions upon which the Lennigs rely are
distinguishable, as in each case, the pertinent employee
exercised broad discretion capable of setting or influencing
corporate policy.16 In contrast, there is no evidence here
that Davis influenced or set corporate policy. Accordingly,
16 Those decisions are: White, supra, 21 Cal.4th at p. 577
[supervisor of eight stores with 65 employees was managing
agent because her superiors delegated to her “most, if not all, of
the responsibility for running [the] stores,” and she “ma[de]
significant decisions affecting both store and company policy”];
Powerhouse Motorsports Group, Inc. v. Yamaha Motor Corp.,
U.S.A. (2013) 221 Cal. App. 4th 867, 886 [regional manager of
district encompassing from 140 to 240 car dealerships was
managing agent because he was “„ultimately responsible for the
total well being‟” of the dealerships]; Davis v. Kiewit Pacific Co.
(2013) 220 Cal. App. 4th 358, 366-372 [triable issues existed
whether two employees were managing agents, as first was “top
onsite manager” charged with wide range of responsibilities for
completion of $170 million construction project, and second was
main equal employment opportunity officer for entire
corporation]; Major v. Western Home Ins. Co. (2009) 169
Cal. App. 4th 1197, 1221 [triable issues existed whether regional
manager of claims adjusting firm was managing agent, as she
supervised 35 employees who handled claims nationwide,
oversaw the claims operation, supervised lower ranking
supervisors, trained adjustors, worked on the budget, supervised
the handling of certain files, authorized payment of benefits, and
directly handled the claim at issue in the action]; Hobbs v.
Bateman Eichler Hill Richards, Inc. (1985) 164 Cal. App. 3d 174,
193-194, 204 [substantial evidence supported determination that
stock brokerage‟s office manager possessed broad degree of
discretion required for managing agent, as it showed that he
supervised and reviewed all 8,000 accounts in his office to ensure
suitable securities were purchased and no improper “churning”
occurred].
32
as there are no triable issues whether CRST is properly
subject to punitive damages under the standards specified in
section 3294, subdivision (b), CRST was entitled to summary
adjudication on that issue.17
17 In a footnote, the Lennigs‟ return suggests that CRST‟s
motion should be denied on another ground submitted to the trial
court, namely, that CRST failed to comply with its discovery
obligations. As explained below, the Lennigs have forfeited their
contention.
The contention relies on subdivision (h) of Code of Civil
Procedure section 437c, which provides: “If it appears from the
affidavits submitted in opposition to a motion for summary
judgment or summary adjudication, or both, that facts essential
to justify opposition may exist but cannot . . . be presented, the
court shall deny the motion, order a continuance to permit
affidavits to be obtained or discovery to be had, or may make any
other order as may be just.” Before the trial court, in opposing
Contreras‟s and CRST‟s motions for summary adjudication, the
Lennigs contended that Contreras and CRST improperly delayed
Contreras‟s deposition, and that CRST destroyed e-mails by
Stanek reflecting his suspicion that Contreras was intoxicated
when the July 7, 2014 accident occurred. However, in granting
Contreras‟s motion, the trial court necessarily concluded that the
delay in Contreras‟s deposition was not prejudicial, and that
Stanek‟s post-accident suspicions raised no triable issue of fact.
As the Lennigs have not challenged the ruling on Contreras‟s
motion, they have forfeited their contention (see pt.D.1. of the
Discussion, ante).
In a related contention, the Lennigs maintain that newly
produced discovery shows that CRST was aware of several
incidents of speeding by Contreras not reflected in the record
relating to CRST‟s motion for summary adjudication. We decline
to examine that evidence, as our review of a writ petition is
(Fn. continued on the next page.)
33
DISPOSITION
Let a peremptory writ of mandate issue directing that
respondent trial court vacate its order denying petitioners‟
motion for summary adjudication regarding the requests for
punitive damages against them, and enter a new order
granting summary adjudication on that issue. The
alternative writ, having served its purpose, is discharged,
and the temporary stay is vacated effective upon the
issuance of the remittitur. Petitioners are awarded their
costs.
CERTIFIED FOR PUBLICATION
MANELLA, J.
We concur:
WILLHITE, Acting P. J. COLLINS, J.
limited to the record before the trial court. (Spaccia v. Superior
Court (2012) 209 Cal. App. 4th 93, 96, fn. 2 & 97.)
34