Broadwater v. Dorsey

RAKER, Judge. This case concerns the tort doctrine of negligent entrustment. The issue we must decide is whether the parents of an adult child who sell or who make a gift of an automobile to their adult child, with knowledge of the child’s reckless conduct, may be held answerable in damages to a third person subsequently injured by the son’s negligent operation of the automobile. The claim of liability is predicated upon the principle of legal responsibility for the negligent entrustment of an automobile to an allegedly incompetent driver.

Specifically, we must decide whether a parent who negligently entrusts a chattel to an adult son is responsible for damages subsequently incurred by a third party when the parent does not have the power of control over either the automobile or the son at the time of the accident. We conclude that parents who sell or give an automobile to an adult child are not responsible for damages when they lack the power to control the child or the automobile. On October 2, 1992, Ronald L. Broadwater, Jr., then age twenty-six, drove his automobile across the center line, colliding head-on into the vehicle driven by Matilda Dorsey and seriously injuring her. Along with her husband Dr. James H. Dorsey, she filed a lawsuit against Ronald, Jr., and Dr. and Mrs. Ronald L. Broadwater, Sr. The complaint alleged that Ronald, Jr., the owner of the automobile, breached his duty to drive his vehicle in a safe, reasonable and non-negligent manner, and the breach of that duty resulted in injury to the plaintiff.

The complaint further alleged that Dr. and Mrs. ⁵⁵¹ Broadwater negligently entrusted the automobile to Ronald, Jr., their adult son, by purchasing the vehicle and giving it to Ronald, Jr., knowing at the time they gave the vehicle to Ronald, Jr. it was likely, because of his driving record and drug abuse problems, that he would drive the vehicle recklessly and pose an unreasonable risk of physical harm to others. The case proceeded to trial in the Circuit Court for Baltimore County. The Broadwaters filed a motion for summary judgment on the grounds that they had no power to control the use of the vehicle at the time of the accident, and that they lacked sufficient knowledge to put them on notice that their son posed an unreasonable risk of harm to others. The court denied the motion.

The jury found that Ronald, Jr. negligently operated his motor vehicle on October 2, 1992, and as a result caused injury to Mrs. Dorsey. The jury also found that Dr. and Mrs. Broadwater had negligently entrusted the Mazda RX 7 to Ronald, Jr. The jury awarded damages to the plaintiffs, Dr. and Mrs. Dorsey. Dr. and Mrs. Broadwater appealed to the Court of Special Appeals, contending that the trial court had erred in concluding that they could be liable on a theory of negligent entrustment. The Court of Special Appeals, by a divided panel, affirmed the judgment.

Broadwater v. Dorsey, 107 Md.App. 58 , 666 A.2d 1282 (1995). This Court granted certiorari. The facts were set out in great detail by the intermediate appellate court as follows: “In November, 1990, appellants owned or had in their possession five cars, all insured by State Farm Mutual Automobile Insurance Company—a 1986 Mercedes, a 1988 Toyota, a 1990 Plymouth Laser, a 1956 Ford Thunderbird, and a 1988 Corvette. The Ford and the Corvette, they contended, were not driven. “Ronald, Jr. was, to say the least, not a highly motivated person.

He was born in June, 1965, and thus, by November, 1990, was 25 years old. After graduating high school in 1984 or 1985 (when he was 19 or 20), he attended three different colleges for varying periods but, despite five or six years of ⁵⁵² effort, had not graduated from any of them and had not even earned sufficient credits for an A.A. degree. Except for a brief period when he lived in an apartment paid for by his parents while he was attending one of the colleges, he lived at home or stayed with friends. Although he worked part-time for his father for a while (there is some conflict in the evidence as to whether he was paid for his services), he never had a steady, permanent job.

He was almost totally supported by his parents. “Between August, 1982 and October, 1989, Ronald, Jr. amassed 10 points on his driving record, for seven separate incidents of failing to obey traffic signals or speeding. Mrs. Broadwater paid a number of fines for her son and also paid for an attorney to represent him on one or more occasions. In 1980, when he was 15, Ronald, Jr. was involved in a motorcycle accident, as a result of which, in 1988, Dr. Broadwater was sued for having negligently entrusted the motorcycle to his son. The case was apparently settled. “Beginning in November, 1990, and continuing through February, 1991, State Farm informed the Broadwaters that it would decline to renew the insurance on any of the five vehicles then owned by them unless Ronald, Jr. was excluded from the coverage.

Those notices were each based on three recent violations by Ronald, Jr.—speeding in April and October, 1989 and failing to obey a traffic signal in July, 1988—and one accident. In October, 1990, he ran into a concrete bridge. Although the Broadwaters initially protested these notices, they eventually acceded to State Farm’s decision and, in August, 1991, signed an agreement excluding Ronald, Jr. from coverage. “The son’s irresponsible conduct may, in part, be explained by the fact that he was a drug addict. On September 20, 1991, the Broadwaters filed a petition with the District Court for an emergency evaluation of Ronald, Jr. Although Dr. Broadwater claimed in his testimony that the evaluation was “so that he would be forced to have his bipolar mental problems straightened out,” in the petition he and his wife ⁵⁵³ noted that Ronald, Jr. had a history of drug abuse dating back to 1980.

During the most recent period, 1989-1991, they implied that he was taking cocaine intravenously in both arms. In response to the question asking them to document the behavior leading them to believe that their son had a mental disorder and was in imminent danger of doing bodily harm to himself or others, they wrote, in longhand: “Drug Abuse (Addiction)—1980-83 (Cocaine + Pot) Leading to seizure—transfer U. of Md. Shock Trauma—Never would agree to treatment—1989-91 back on drugs + IV cocaine (needle tracks both arms) June ’91—Again would not agree to treatment—Last 8 wks behavior erratic—stole 2 of our cars [unclear] abuse to his mother could not finish college [unclear] Talks irrational. Has been constantly stealing money from parents. Life seems to be controlled by need for drugs.

He is threat to his self mentally + physically + to the community.” “As a result of this petition, Ronald, Jr. was committed for evaluation and, according to his mother, remained hospitalized for four to six weeks. She was asked, but claimed that she could not recall, whether, as a further result of the petition, criminal charges were filed against Ronald, Jr. for assaulting and battering Mrs. Broadwater. “On December 16, 1991, Mrs. Broadwater purchased a 1982 Mazda RX 7 sports car from a friend for $2,750. On or about February 2, 1992, Mrs. Broadwater transferred the car to Ronald, Jr., who had the vehicle retitled in his name. Prior to that transfer, Ronald, Jr. received three additional speeding tickets, one of which had already resulted in a conviction. “Although the Broadwaters insist that the transfer was an arms-length sale, the fact is that the son paid nothing for the car and the Broadwaters paid the insurance premium to permit their son to obtain the minimum required insurance coverage from the Maryland Automobile Insurance Fund.

In a document dated February 2, 1993, which he captioned as “Agreement of repayment,” and on which he referenced the Mazda, Ronald, Jr. stated “I, Ronald L. Broadwater, Jr. noted ⁵⁵⁴ on this date that I agree to pay back Eleanor V. and Ronald L. Broadwater Sr. the sum of $2750.00, for the above automobile when I have completed my college degree.” As of July, 1994, no payments had been made on that promise. “Once the car was turned over to Ronald, Jr., he apparently used and regarded it as his own. As noted, the Broadwaters disclaimed much knowledge about their son’s activities and whereabouts thereafter. The accident that led to this lawsuit occurred in October, 1992. Ronald, Jr. was driving the Mazda that had been given to him by his mother eight months earlier.” Broadwater, 107 Md.App. at 62-65 , 666 A.2d at 1284-85 .

The doctrine of negligent entrustment as stated in the Second Restatement of Torts § 390 and adopted in Maryland provides: One who supplies directly or through a third person a chattel for use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them. Restatement (Second) of Torts § 390 (1965); see, e.g., Neale v. Wright, 322 Md. 8, 13-14 , 585 A.2d 196, 198-99 (1991); Kahlenberg v. Goldstein, 290 Md. 477, 488-89 , 431 A.2d 76, 83 (1981); Morrell v. Williams, 279 Md. 497, 503 , 366 A.2d 1040, 1043 (1976); Curley v. General Valet Service, 270 Md. 248, 255 , 311 A.2d 231, 235 (1973); Snowhite v. State, Use of Tennant, 243 Md. 291, 311 , 221 A.2d 342, 353-54 (1966); Rounds v. Phillips (Rounds I), 166 Md. 151, 160-61 , 170 A. 532, 535 (1934). The issue at the heart of this case is whether the parents of an adult child, who with knowledge of their child’s incompetence, give or sell that child an automobile are to be considered “suppliers” for purposes of § 390 of the Restatement. Because a “supplier,” in terms of the Restatement, ⁵⁵⁵ must have the right to control the chattel, we must determine whether the supplier’s control over the chattel should be measured at the time of the “entrustment” or at the time of the negligent act of the “entrustee” resulting in injury.

In its review of this case, the Court of Special Appeals held that “[t]he right to permit and the power to prohibit must be considered as of the time of the entrustment.” Id. at 68, 666 A.2d at 1287 . The court concluded that the continuing ability to control the chattel is not required for a prima facie case of negligent entrustment; control need only exist at the time of the entrustment. The court noted: The tort is founded upon an entrustment—the supply of a chattel by the defendant to another person. That necessarily presumes that the defendant had a choice whether to supply the chattel or not.

Control has to be viewed in that context. The tort does not rest on any vicarious liability— on imputing to the supplier the negligence of the entrustee—but rather on the direct negligence of the supplier in supplying the chattel in the first place. That negligence must, of necessity, be viewed as of the time of the entrustment, not as of the time the entrustee improperly uses the entrusted chattel. Id. at 67 , 666 A.2d at 1287 .

The court further reasoned that a person cannot escape liability by deliberately and negligently placing a chattel in the hands of another under circumstances set out in Restatement § 390 and thereby effectively relinquish[] all practical ability thereafter to prohibit or limit the use of the chattel by the entrustee. It would be wholly inconsistent with the public policy underlying the tort to regard such an act as providing a greater advantage to the supplier than if he retained the power of control but declined to exercise it. Id. at 69, 666 A.2d at 1287-88 . The intermediate appellate court held that Petitioners had control at the time of entrustment, that they knew of Ronald, Jr.’s reckless propensities, and that the negligent entrustment of the vehicle was the ⁵⁵⁶ proximate cause of Respondents’ injuries.

Id. at 67-72 , 666 A.2d at 1286-89 . Judge Cathell dissented. He agreed with the majority’s view of the facts, the character of Ronald, Jr., and the Broadwaters’ knowledge of their son’s behavior. He parted company with the majority on the scope and application of the doctrine of negligent entrustment.

Recognizing that the “position of the majority is one that is logically supportable under an expansive (virtually all inclusive) interpretation of the applicability of the tort,” the dissent suggested that the better position for this Court to adopt would be a more limited application of the doctrine which would, “in a sales context, require the transferor to retain the legal right to control the instrumentality or have a legal responsibility to control the buyer.” Id. at 75 , 666 A.2d at 1291 (Cathell, J., dissenting). The dissent further suggested that in order to limit the application of negligent entrustment appropriately, the entrustor must retain a legal right of control over either the chattel or its user. The dissent noted: If (1) the power to control the vehicle or (2) the power to control its operator—or both—exists and the “entrustor” has knowledge of dangerous propensities of the driver, it is clear that the requirements of the tort are met. Id. at 83 , 666 A.2d at 1295 .

Otherwise, the dissent reasoned, liability for negligent entrustment would be too expansive and would subject all vendors to liability long after the vendor had relinquished control over the chattel. Dr. and Mrs. Broadwater contend that the relevant time period is the time of the recipient’s subsequent negligent use of the chattel. If the defendant has the right to permit or the power to prohibit the use of the chattel entrusted at that time, then the defendant may be liable. The Broadwaters maintain that the power to permit or prohibit use of the chattel is inherent in an entrustment, as opposed to a mere transfer, because that power to control imposes a duty upon the entrustor to guard against negligent use of' the property.

A ⁵⁵⁷ transferor without the power to control would have no such duty. Respondents argue that the significant point in time is the time of the entrustment and that there need only be negligence at the time of entrustment, not a continuing right to control. If the entrustment was negligent when made, and that negligence was a proximate cause of the foreseeable injury complained of, the entrustor will be liable to the injured party. Respondents