Osborn v. Hertz Corp

In Osborn v. Hertz Corp. (1988) 205 Cal.App.3d 703, a passenger in a rental car was injured when the driver, to whom the car had been rented, drove the car into a tree while under the influence of alcohol. The passenger sued the rental car agency for negligently entrusting the car to the driver, asserting that the agency was negligent for failing to do more than inspect his driver's license and observe that he appeared sober at the time of the rental. The passenger argued that the agency had a further duty to investigate the driver's qualification by asking him whether he had a record of DUI, whether his license had ever been suspended, whether he had ever been denied automobile insurance, and whether he intended to drive under the influence. Had it conducted such an investigation, the passenger argued, the company would have discovered that the driver had been twice convicted of drunk driving (most recently seven years before) and that his license had been suspended for six months. (Osborn, supra, 205 Cal.App.3d at p. 706.) (2) The appellate court in Osborn affirmed the trial court's grant of summary judgment in favor of the rental car agency. The court observed that " 'it is generally recognized that one who places or entrusts his or her motor vehicle in the hands of one whom he or she knows, or from the circumstances is charged with knowing, is incompetent or unfit to drive, may be held liable for an injury inflicted by the use made thereof by that driver, provided the plaintiff can establish that the injury complained of was proximately caused by the driver's disqualification, incompetency, inexperience or recklessness ... .' " (Osborn, supra, 205 Cal.App.3d at p. 708.) As applied to a rental car agency, the court in Osborn noted that "section 14608 prohibits ... renting to unlicensed drivers" and "a rental car agency may therefore be liable for negligently entrusting a car to an unlicensed driver." (Id. at p. 709.) Moreover, the court endorsed the view of "other jurisdictions that have sensibly recognized a rental car agency may be liable for negligently entrusting a car to a customer known to the agency to be intoxicated at the time of the rental." (Osborn, supra, 205 Cal.App.3d at p. 709.) But the court found no basis on which to require rental companies to investigate the driving history of their customers. The court reasoned that such an investigation would not lead to useful information, because even if the rental car agency learned that the customer had previously been convicted of DUI, that fact in itself would not have made the rental car agency negligent in renting a vehicle to the customer. (Osborn, supra, 205 Cal.App.3d at p. 710.) More importantly, the court observed that through the statutes governing DUI, "the Legislature has carefully delineated, according to the seriousness of the offenses, the disabilities that are to be suffered by those convicted of drunk driving," including "suspension or revocation of a driver's license for various periods of time. Under this statutory scheme, neither a prior record of drunk driving nor a past refusal of insurance nor a prior suspension or revocation of a driver's license disqualifies a citizen from owning or driving a vehicle provided the legal disability has been cured and the citizen holds a valid driver's license.? (Id. at pp. 710-711.) Finding that "this detailed statutory scheme reflects a careful balance ... between the dangers of drunk driving and the recognition that driving a car may be 'essential in the pursuit of a livelihood,' " the court declined to adopt a rule that would disqualify persons previously convicted of drunk driving, but whose licenses have been reinstated, from renting cars. (Id. at p. 711.) In Osborn v. Hertz Corp. (1988) 205 Cal.App.3d 703, the court held that (1) a rental car agency is not liable for negligent entrustment when it rents a car to a validly licensed driver who shows no sign of unfitness to drive (id. at p. 713); (2) an agency has no duty to inquire into the driving record of the renter by asking a series of questions concerning, inter alia, whether the renter has previously been convicted of driving under the influence (id. at p. 710); and (3) absent a legislative declaration that persons convicted of driving under the influence or whose license was previously revoked or suspended are ineligible to rent a vehicle, the rental agency is entitled to rely on the renter's presentation of a valid driver's license as sufficient evidence of fitness to drive (id. at p. 711). In Osborn, supra, 205 Cal.App.3d 703, the court held that a rental car agency is "not negligent for entrusting a car to a person lawfully qualified and apparently fit to rent and drive it." (Id. at p. 713.) The court also held that an agency has no duty to ask questions to investigate the driving record of the customer, and that the agency may rely on presentation of a valid driver's license as sufficient evidence of fitness to drive, absent a legislative declaration to the contrary.