General Valet Service, Inc. v. Curley

Powers, J., delivered the opinion of the Court. Alonzo Stevenson, an employee of General Valet Service, Inc., operating on personal business a motor vehicle described as a step van, leased to General Valet by The Hertz Corporation, drove through a policeman’s stop sig ⁴⁵⁵ nal and a red light at Harford Road and North Avenue in Baltimore on 3 December 1967 and collided with a Baltimore City fire truck which was responding to a fire. The collision caused the death of fireman James L. Grahe, injuries to firemen Thomas Edward Curley and Joseph Kraus, injuries and property damage to James Newby, operator of a private car which was struck by the fire engine after the first collision, injuries to Virginia Newby, his passenger, and property damage to the fire engine. The following suits were filed, and consolidated for trial in the Superior Court of Baltimore City: 1.

Thomas Edward Curley v. General Valet Service, Inc., and Alonzo Henry Stevenson, alleging negligence by Stevenson, imputed to General Valet as his employer, and direct negligence by General Valet in entrusting the vehicle to Stevenson. 2. Charlotte E. Grahe as surviving widow, as mother and next friend of James L. Grahe, Jr. and Christine J. Grahe, surviving infant children, and as Administratrix of the Estate of James L. Grahe, deceased v. Alonzo Henry Stevenson, General Valet Service, Inc., and The Hertz Corporation, alleging negligence by Stevenson, and direct negligence by General Valet and by Hertz in entrusting the vehicle to Stevenson. 3. Joseph Kraus, joined by Carole Kraus, his wife v. Alonzo Henry Stevenson, The Hertz Corporation, and General Valet Service, Inc., alleging negligence by Stevenson, imputed to General Valet and Hertz as his employers, and direct negligence by General Valet in entrusting the vehicle to Stevenson. 4. James Newby, Virginia Newby, and two subrogated insurance companies v. General Valet Service, Inc., Alonzo Henry Stevenson, and The Hertz Corporation, alleging negligence by Stevenson, imputed to General Valet and Hertz as his employers, and direct negligence by General Valet in entrusting the vehicle to Stevenson. 5.

Mayor and City Council of Baltimore v. General ⁴⁵⁶ Valet Service, Inc., and Alonzo Henry Stevenson, alleging negligence by Stevenson, imputed to General Valet as his employer, and direct negligence by General Valet in entrusting the vehicle to Stevenson. 1 Trial was held before Judge William J. O’Donnell and a jury, beginning 15 November 1971 and ending on 24 November 1971. When all of- the plaintiffs had finished their evidence, the court granted motions for a directed verdict in favor of Hertz in all cases in which Hertz was named as a defendant. The court also granted partial directed verdicts in favor of General Valet as to imputed negligence based upon the allegation or inference that Stevenson was acting as General Valet’s agent. At the close of all of the evidence the court denied General Valet’s motion for a directed verdict based on the contention that the evidence was insufficient to prove that General Valet negligently entrusted the van to Stevenson.

The court granted the motions of all plaintiffs for partial directed verdicts against Stevenson as to his negligence, and instructed the jury to find against him. The case was submitted to the jury to return a special verdict in the form of answers to questions, as provided for in Maryland Rule 560. The jury assessed damages in favor of Mrs. Grahe as surviving widow at $200,000.00 and as Administratrix at $1,761.90; in favor of the two Grahe children at $75,000.00 each; in favor of Mr. Curley at $300,000.00; in favor of Mr. and Mrs. Kraus at $8,500.00; and in favor of Mr. and Mrs. Newby and their subrogees at $3,302.50. In addition to assessing damages, the jury answered that it found against General Valet Service, Inc. Judgments nisi were entered.

Stevenson and General Valet each filed motions for judgment n.o.v. and for a new trial. All motions were heard and denied, and final judgments were entered on the verdicts. ⁴⁵⁷ General Valet appealed; Stevenson did not. Entrustment of the van to Stevenson is conceded. The single issue involved is whether that entrustment was negligent.

It will be necessary to examine the law of negligent entrustment as applied to the conduct of General Valet. In 1934 the Court of Appeals decided the first case of Rounds v. Phillips, 166 Md. 151 , 170 A. 532 . The appellant there, as administratrix of the estate of her deceased son, had sued appellees, parents of William H. Phillips, Jr., also deceased, alleging in effect that the parents had been negligent in entrusting to their son the automobile he was driving when it collided with a vehicle operated by plaintiff’s decedent, resulting in the death of both. The Circuit Court for Wicomico County had sustained demurrers to the declaration below, and the appeal came up on the sufficiency of the allegations.

After setting out in full the lengthy first count of the declaration, Judge W. Mitchell Digges said for the Court, at pages 160 and 161: “The theory upon which the plaintiff seeks to recover against the defendants is that the defendants permitted, or failed to prohibit, the use of an automobile by their minor son, which son they knew, or should have known from facts known to them, was negligent, reckless, and incompetent in the operation of automobiles. * * * In other words, the plaintiff invokes the principle involved in Restatement of the Law of Torts, part IV, Negligence, chap. 2, sec. 260: ‘One who supplies directly or through a third person a chattel for the use of another whom the supplier knows, or from facts known to him should know, to be likely because of his youth, inexperience or otherwise, to use it in a manner involving unreasonable risk of bodily harm to himself and others whom the supplier should expect to share in, or be in the vicinity of its use, is sub ⁴⁵⁸ ject to liability for bodily harm caused thereby to them.’ * * * Up to the present time this court has not had presented to it a case wherein it was necessary to decide the exact point here involved.” After thus stating the principle of law involved, the Court went on to review numerous authorities; its own earlier opinions which portended the conclusion reached, and the opinions of many courts in other jurisdictions. As a preface to its reversal of the judgment of the lower court, the Court of Appeals said, at pages 166 and 167: “We have cited, perhaps at tiresome length, cases and quotations therefrom in order to demonstrate the authority upon which the quotation from the Restatement of the Law of Torts is founded, because, as we have stated, the question has not been heretofore directly passed upon by this court. We are of opinion, after a careful and exhaustive examination of cases, that the principle contained in the quotation from the Restatement is a fair and accurate statement of the rule, deduced from opinions representing the great weight of authority in this country. Of course, there are, and must be, limitations upon the application of the rule; but we find that the facts alleged in the declaration, and admitted to be true for the purpose of the decision on demurrer, are such as to create liability on the part of the defendants.” The following year saw the same litigants again before the Court of Appeals, after a trial which ended with a directed verdict for the defendants below, and judgment in their favor.

In the second Rounds v. Phillips, 168 Md. 120 , 177 A. 174 , the Court recognized that although the evidence at the trial failed to prove knowledge by the ⁴⁵⁹ parents of all of the facts alleged concerning their son’s driving, there was a series of significant facts of which there was proof at the trial. It appeared that some of these facts had been known to the parents, and that some had not been known to them. The Court said, at page 126: “The revocation of his license because of intoxication when driving an automobile was a fact which would naturally prompt an investigation by the defendants as to the habits of their son affecting his qualifications as the driver of a car. If such a course had been pursued, in the proper directions, the defendants would undoubtedly have learned the additional and regrettable facts, proved in this case, as to their son’s recklessness in the operation of his car on the public highways.

It is therefore inferable that the defendants, from the facts known to them, should have become apprised of the ‘unreasonable risk of bodily harm to himself and others’ involved in their son’s use of an automobile without restraint.” (Emphasis supplied). The opinions of the Court of Appeals in the two Rounds v. Phillips cases cited above seem to have expressed the doctrine of negligent entrustment so clearly that it received no more appellate attention in Maryland for over 30 years, except for a passing ruling in 1951 in Houlihan v. McCall, 197 Md. 130 , 78 A. 2d 661 , that negligent entrustment was not a proper issue in a case when agency was admitted. In State of Maryland v. O’Brien, 140 F. Supp. 306 (1956) Chief Judge Thomsen in the United States District Court for the District of Maryland applied the law of negligent entrustment as laid down by the Court of Appeals in the Rounds v. Phillips cases. O’Brien, employed as a truck driver by Chaney, after allegedly deviating from the course of his employment, and while ⁴⁶⁰ under the influence of intoxicants, negligently collided with another automobile, killing the operator.

His survivors sued O’Brien and Chaney. Although the case involved other issues as well, great stress was laid on the direct and indirect knowledge of Chaney, the employer, that O’Brien, the driver to whom the truck was entrusted had, on several occasions, driven the truck while drunk or while drinking. Judge Thomsen said: “No quantitative line can be drawn with respect to the amount of knowledge which an owner must have of a driver’s propensity for drinking to make the owner negligent in entrusting a motor vehicle to him. All of the circumstances of the case must be considered, including the type of vehicle and the area in which the vehicle is to be operated.

In this case, the \ vehicle was a heavy dump truck, to be driven \loaded with sand and gravel. The truck was to be driven in and around the City of Washington, a large metropolitan center, where traffic is exceedingly heavy. Chaney knew that O’Brien drank. He was so worried about O’Brien driving the truck at night and on week-ends after he had been drinking that he revoked permission previously given to O’Brien to keep the truck overnight and over the week-ends.

There was evidence from which the jury might find that within three weeks before the accident Chaney had found O’Brien drunk in the truck parked outside a tavern in the afternoon of a working day.” In conjunction with the employer’s knowledge of the driver’s habit of driving while drinking, Judge Thomsen considered the evidence of the employer’s negligence in permitting the employee to drive without a chauffeur’s license. He said: , “The fact that a chauffeur’s license must be ⁴⁶¹ renewed every two years implies that the Department of Motor Vehicles will satisfy itself every two years that the applicant continues to be qualified to operate a motor vehicle as a chauffeur. It must be presumed that the Department makes the necessary investigation and examination of such applicants. O’Brien had a Maryland operator’s license but did not have a Maryland chauffeur’s license; Chaney therefore violated Sec. Ill in permitting him to operate the truck.” Judge Thomsen concluded that there was evidence legally sufficient to go to the jury on the question whether Chaney was negligent in entrusting his truck to O’Brien.

The Court of Appeals considered negligent entrustment again in 1966 in Snowhite v. State, Use of Tennant, 243 Md. 291 , 221 A. 2d 342 . One Henderson was employed by Snowhite to drive gasoline and kerosene trucks, making deliveries in the Baltimore area. The evidence indicated that Henderson, with Snowhite’s knowledge, regularly used Snowhite’s vehicles for personal purposes, both during and after working hours. The evidence also showed that Henderson habitually stopped and drank in a bar at Pearl and Saratoga Streets, during, between, and after deliveries.

The accident which gave rise to the suit happened while Henderson, intoxicated, was driving one of Snowhite’s trucks. The Court said in relating the evidence: “In 1959 — about two years prior to the accident — Henderson began drinking heavily. He was convicted of reckless driving on February 17, 1959 and again on April 7, 1959, and still again on November 16, 1960. On October 25, 1961, he was convicted of failing to stop at a railroad crossing while driving a gasoline truck, thus making a total of four convictions for moving violations in approximately two and one- ⁴⁶² half years.

Snowhite knew about these convictions, which were for violations while Henderson was driving Snowhite’s trucks. Snowhite also knew about an accident in which Henderson was involved for which he was not convicted. Snowhite warned Henderson that if he had any more accidents Snowhite would not be able to get any more liability insurance on the trucks. During the two-year period prior to the accident during which Henderson was drinking heavily, he spent a substantial time every day at the Pearl Street bar.

This bar was on the same street as Snowhite’s office, approximately one-half a block away. Henderson drank whiskey at this bar for approximately 45 minutes to one hour between 7 and 8 a.m. (exclusive of other times), six days a week, immediately prior to driving Snowhite’s trucks. Snowhite knew that Henderson frequented the bar daily during this two-year period and that Henderson drank.

Indeed, Snowhite would send over to the bar or go over to the bar himself and get Henderson when he wanted Henderson to drive one of his trucks. Henderson would then come out of the bar, and thereafter, with Snowhite’s knowledge that he. had been drinking, he would get into one of Snowhite’s trucks and drive it. Snowhite admitted that he would go over to the bar occasionally to get Henderson when he wanted Henderson to drive.” After discussing other issues in the case the Court reviewed the law of negligent entrustment and the authorities we have discussed. It went on to hold that the evidence was sufficient to support the verdict against Snowhite.

Snowhite had conceded that Henderson’s negligence caused the accident, and that Henderson was an habitually incompetent operator of a motor vehicle. The negligent entrustment turned on two issues of fact, 1) ⁴⁶³ whether Snowhite entrusted the truck to Henderson at all, and 2) whether Snowhite had either actual or constructive notice that Henderson was unfit as a driver. The evidence clearly supported a finding against Snowhite on both issues. The doctrine of negligent entrustment has become well entrenched in Maryland law through the two cases of Rounds v. Phillips, supra, with their approval and adoption of Restatement of the Law of Torts, Part IV, Negligence, chapter 2, § 260, and Snowhite v. State, Use of Tennant, supra, with its approval of the slightly but not substantially revised version of the rule in 2 Restatement, Second, Torts, § 390.

These cars, as well as State of Maryland v. O’Brien, supra, in which Chief Judge Thomsen of the United States District Court applied Maryland law, involved