Broadwater v. Dorsey , 107 Md. App. 58 ( 1995 )

WILNER, Chief Judge.

A jury in the Circuit Court for Baltimore County found that, in February, 1992, appellants, Ronald and Eleanor Broadwater, had negligently entrusted an automobile to their adult son, Ronald Broadwater, Jr., and that, on October 2, 1992, Ronald, Jr. negligently drove that vehicle on a public highway and caused injury to appellee, Matilda Dorsey. The jury awarded damages of $556,000 to Ms. Dorsey and her husband. From the judgment entered on that verdict,¹ appellants have appealed, complaining that the court erred in failing to conclude as a matter of law that there was no liability for negligent entrustment. We shall affirm.

THE FACTS

Because appellants are urging an entitlement to judgment as a matter of law, we need to examine the evidence in a light most favorable to the Dorseys. We shall give scant attention, therefore, to the evidence supporting the defense that the jury had a right to reject and that it implicitly did reject.²

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 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 1983, 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 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 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.” (Emphasis added.) 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.

DISCUSSION

Maryland recognizes the tort of negligent entrustment as it is currently expressed in Restatement (Second) of Torts, § 390:

“One who supplies directly or through a third person a chattel for the 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.”

See Kahlenberg v. Goldstein, 290 Md. 477, 485, 431 A.2d 76 (1981); Neale v. Wright, 322 Md. 8, 585 A.2d 196 (1991); Mackey v. Dorsey, 104 Md.App. 250, 258, 655 A.2d 1333 (1995).

The Restatement articulation of the tort contains a number of discrete elements. The defendant must supply the chattel; he must know or have reason to know that the person he supplies it to is likely to use the chattel in a manner involving an unreasonable risk of physical harm to other persons; and he must have reason to expect that those other persons may be endangered by the entrustee’s use of the chattel. In addition, as is true in any action founded on negligence, the plaintiff must show injury and causation—that he suffered injury as a result of the negligent entrustment.

Citing cases either not on point or that have been rejected by the Court of Appeals and attempting to distinguish cases that, in our view, are clearly relevant, appellants challenge the sufficiency of the evidence as to each of these elements.³

Control

Viewing the situation at the time of the accident, appellants note that, as of then, the Mazda belonged to Ronald, Jr., who was an adult, and that they had no control over either the car or their son. Citing language from earlier cases and from § 308 of the Restatement (Second) of Torts, they argue that a sine qua non for liability is the ability to prohibit the use of the chattel, i.e., the ability to exercise control over either the chattel or the entrustee. We do not dispute that principle; the problem is in appellants’ application of it.

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.

The argument made by appellants here was made and rejected in Kahlenberg, supra, 290 Md. at 489, 431 A.2d 76. There was evidence in that case that the defendant father had purchased a car for his son, knowing that the son was reckless. It was not clear who actually owned the car, in part because the accident occurred before the title was transferred from the former owner. Assuming, however, that the father had purchased the car and given it to the son, the father argued that he could not be held liable thereafter because there was no evidence that he retained any right to permit or prohibit the son’s use of the car. The Court rejected that defense:

“Inasmuch as certain donors can be suppliers within the meaning of the rule, and since a donor would ordinarily relinquish any right to permit and power to prohibit the use of the chattel upon its delivery to the donee and consummation of the gift, the right to permit and the power to prohibit the use of the chattel, after the transfer and at the time of the injury, would not ordinarily be a sine qua non of liability. The reason is that the tort of negligent entrustment involves concurrent causation. The negligence of the supplier consists of furnishing the chattel with the requisite knowledge. This sets in motion one chain of causation which may or may not in fact result in injury. The other chain of causation involves the conduct of the immediate tortfeasor. If physical harm results to one within the class of foreseeable plaintiffs, as a result of the use of the chattel by the entrustee in a manner, which, because of the youth, inexperience or otherwise of the entrustee, the supplier knew or had reason to know was a likely use and which would involve an unreasonable risk of physical harm, the two chains of causation converge and liability is imposed on the supplier, for his own negligence.”

Kahlenberg, 290 Md. at 489-90, 431 A.2d 76.

Appellants seek to distinguish Kahlenberg on the ground that the son in that case—the immediate tortfeasor—was a minor. That appeared to have no determinative bearing on the Court’s analysis,⁴ however. The right to permit and the power to prohibit must be considered as of the time of the entrustment. Whether the entrustee is an adult or a minor may have relevance in determining the nature of the entrustment and if, under all the circumstances, the entrustment was negligent, but it has no broader legal significance.

A person who negligently places a chattel in the hands of another under the circumstances stated in Restatement § 390 cannot escape liability by deliberately putting it beyond his power to redress that negligence—by effectively relinquishing 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.⁵

Entrustment

There was evidence in this case that, in addition to supplying the Mazda to Ronald, Jr., appellants paid his insurance premium and generally supported him. Seizing upon that evidence, appellants raise the specter of liability being based upon a person merely providing insurance, or financing, or gasoline, or some other service to a reckless individual, ie., upon some act or service which merely facilitates his use of the chattel. Cases in other States have rejected liability premised on that more tenuous connection.⁶

Such an argument constitutes, in its clearest and most majestic form, the proverbial red herring. It has nothing whatever to do with this case. Under the instructions given by the court, to which no exception was taken, appellants’ liability was based on their entrustment of the chattel itself— directly placing the car into the possession and control of their son—not on their paying for his insurance or gasoline. Nor was it based on their merely financing the son’s arms length purchase of the vehicle, as a bank might do.

Knowledge

At trial, appellants—particularly Dr. Broadwater—attempted to distance themselves from their son’s conduct. As noted, they professed very little knowledge about his lifestyle, or even his whereabouts. Evidence was presented, however, that they were aware of their son’s many violations of the motor vehicle laws, his drug dependency, his mental or emotional problems, and his generally unsatisfactory and reckless behavior. The petition they filed with the District Court less than five months before supplying him with the Mazda sports car documented their awareness of his self-destructive and dangerous propensities.

Appellants now contend, however, that they were entitled to rely on the fact that the State Motor Vehicle Administration had not, as of the time of entrustment, seen fit to suspend or revoke their son’s license to drive. Surely, they tell us, if the State was content to allow Ronald, Jr. to drive, they should not be held liable for giving him the ability to do so.

The Motor Vehicle Code does, to be sure, authorize the Administration to suspend or revoke a person’s driver’s license upon a showing that the person (1) has been convicted of moving violations sufficiently often to indicate an intent to disregard the traffic laws and safety of other persons, or (2) is otherwise unfit, unsafe, or habitually reckless. See Md.Code, Transp. art., § 16-206. The exercise or non-exercise of that authority has no direct bearing, however, on the civil liability of persons for negligent entrustment. For one thing, the Administration may not be aware of all of the circumstances known to the supplier. In this case, for example, while the Administration was presumably aware of Ronald, Jr.’s driving record, there was no evidence that it was aware of his drug dependency, his generally erratic behavior, his mental or emotional abnormalities, or any of the facts stated by appellants in their petition to the District Court.

Causation

Underscoring the fact that eight months elapsed between the time they put their son into possession and control of the Mazda and the time of the accident, appellants urge that the former could not have been the proximate cause of the latter. We note, preliminarily, that they sought no instruction below that the lapse of eight months, or any other specific period of time, would suffice to preclude a finding of causation.

Causation is ordinarily an issue of fact, for the jury to determine. There was ample evidence to establish that, at the time of entrustment, appellants had reason to believe that Ronald, Jr.’s use of the vehicle would pose an unreasonable risk to anyone who might encounter him on the public roads and highways. How long that risk might continue to exist and thus remain a potentially causative factor depends on the circumstances, most notably the son’s behavior. There is nothing in this record to indicate any positive change in that behavior during the eight-month period; indeed, the evidence shows a continuation of his disregard for the traffic laws coupled with a conscious attitude of unconcern on appellants’ part. In light of the Court’s discussion in Kahlenberg regarding the two chains of causation that ultimately may converge, the principles stated later by the Court in Atlantic Mutual v. Kenney, 323 Md. 116, 131, 591 A.2d 507 (1991), quoted and confirmed even more recently in Hartford Ins. Co. v. Manor Inn, 335 Md. 135, 160, 642 A.2d 219 (1994) and BG & E v. Lane, 338 Md. 34, 52, 656 A.2d 307 (1995), are relevant:

“If the negligent acts of two or more persons, all being culpable and responsible in law for their acts, do not concur in point of time, and the negligence of one only exposes the injured person to risk of injury in case the other should also be negligent, the liability of the person first in fault will depend upon the question whether the negligent act of the other was one which a [person] of ordinary experience and sagacity, acquainted with all the circumstances, could reasonably anticipate or not. If such a person could have anticipated that the intervening act of negligence might, in a natural and ordinary sequence, follow the original act of negligence, the person first in fault is not released from liability by reason of the intervening negligence of another.”

Applying these principles and those enunciated in Kahlenberg, we believe that there was sufficient evidence to allow the jury reasonably to conclude that appellant’s negligent entrustment of the car in February, 1992 was an effective cause of the injuries suffered by the Dorseys in October of that year.

Judge Cathell’s Dissent

Judge Cathell, very thoughtfully, expresses concern over what he regards as an enlargement of the tort of negligent entrustment and offers the view that the tort should lie only “when there is a concurrence of both negligence on the part of the transferor at the time of the transfer and the continuing power and/or right to control either the instrument, i.e., the vehicle, or the entrustee at the time of the subsequent negligence.” He believes that, in Neale v. Wright, supra, 322 Md. 8, 585 A.2d 196, the Court reined in what it had said in Kohlenberg and effectively so limited the tort.

We do not read Neale v. Wright in that manner. In that case, Mrs. Neale was sued for having negligently entrusted a car to her husband, who later was involved in a collision with the plaintiff, Wright. The alleged entrustment was premised on the hypothesis that, because Mr. Neale had previously been excluded from coverage under the family’s automobile insurance policy, he would have been unable to purchase the car in his own name, and that, by purchasing the car with him, as joint owners, and allowing him to drive the car, she “supplied” the car to him knowing of his poor driving habits. This Court found merit in that contention. Wright v. Neale, 79 Md.App. 20, 555 A.2d 518 (1989).

The Court of Appeals rejected that analysis and reversed, concluding that the lack of insurance coverage would not have precluded the husband from purchasing and titling the car in his own name. In that context, the Court distinguished Kohlenberg, as well as a Kansas case that we had cited, on a number of grounds, the first of which was that, in those cases “the defendants purchased automobiles specifically for the use of the alleged negligent drivers,” whereas the car purchased by the Neales was used primarily by Mrs. Neale. A second ground of distinction, emphasized by Judge Cathell, was that, in Kohlenberg and the Kansas case, there existed a parent-child relationship between the defendants and the entrustees and that the entrustees, being unemancipated, were subject to some control by the parents.

An alternative ground of liability urged by Wright was that Mrs. Neale could be held liable “because she failed to exercise her power to prevent her husband from driving the [car] at the time of the injury.” Id. at 19, 585 A.2d 196. The Court rejected that approach on the ground that, as a mere co-owner, Mrs. Neale had no superior right to the vehicle and thus no power to permit or prohibit Mr. Neale from using the car.

We find no indication in Wright v. Neale that the Court intended to limit what it said or held in Kohlenberg. The two cases presented very different fact situations, one permitting liability and the other precluding it.

We recognize that the facts in this case are unusual and that there is no Maryland case “on all fours” with it. We do not share Judge Cathell’s and appellants’ concern, however, that our holding in this case will create the prospect of parents being forever liable for the conduct of their adult children or of sellers in arms length transactions being held liable for the conduct of their buyers. This case establishes no such precedent. The case, indeed, is fact-specific. A jury found, from sufficient evidence, that the Broadwaters negligently supplied a car to a child who they knew was likely to use it, and who allegedly did use it, in a manner involving unreasonable risk to other persons. The simple question is whether, having done so, they can, as a matter of law, wash their hands of all responsibility for their conduct by disclaiming any further ability to control either their son or the car. If they can, then we have given people a road map for no-risk irresponsible behavior. We decline to make such a gift.

JUDGMENT AFFIRMED; APPELLANTS TO PAY THE COSTS.

1 . Acting on a post-judgment motion, the court reduced the award to $456,000, in order to conform it to the then-applicable statutory “cap” on awards for non-economic loss.

2 . This is particularly important in this case. Most of the evidence presented in their defense came from the testimony of Dr. and Mrs. Broadwater, who were called by the plaintiff and who were veiy reluctant witnesses. They appeared to have very little knowledge about their son. Dr. Broadwater, a physician, seemed confused even as to when his son was bom; they could not agree on what year he graduated high school; and they both seemed to have no knowledge of where he lived, what his telephone number was, how to reach him, or what he did. They seemed uncertain, or hedging, on almost all of the important aspects of their son’s life and career.

Dr. Broadwater was particularly reticent. He either denied or said he could not recall important things for which clear documentary evidence existed, including documents that he had signed. At various points, he was unwilling even to admit—though he did not go so far as to deny—his own signature on these documents, and, when confronted with those documents, he more or less disavowed even statements he had written. At one point, Dr. Broadwater denied knowledge of any erratic behavior on the part of his son, only to be confronted with his own sworn statement, discussed later in this Opinion, alleging extremely erratic behavior. Just from our own reading of the transcript, we can well imagine the jury finding both parents to be less than credible witnesses.

3 . Three cases that appellants rely on—Shipp v. Davis, 25 Ala.App. 104, 141 So. 366 (1932) (holding that when a person transfers possession and title of an automobile to another, the transferor relinquishes all control over the automobile and the transferee is then solely responsible for the operation of the vehicle); Estes v. Gibson, 257 S.W.2d 604 (Ky.1953) (holding that a mother who knew that her son was an alcoholic and drug addict but nonetheless gave him an automobile did not have the requisite control over the automobile to be liable for negligent entrustment); and Brown v. Harkleroad, 39 Tenn.App. 657, 287 S.W.2d 92 (1955) (holding that a father who had knowledge of his son’s poor driving record but nonetheless purchased an automobile for him was not liable under a negligent entrustment theory because to so hold would in effect extend the liability to any person selling a vehicle to a known incompetent and that such extension is a job for the legislature)—were considered and rejected by the Court of Appeals in Kahlenberg, supra, 290 Md. 477, 431 A.2d 76.

Appellants cite Mills v. Continental Parking Corp., 86 Nev. 724, 475 P.2d 673 (1970), for the proposition that “negligent entrustment does not apply when the right to control is absent.” Although we do not disagree with that assertion, Mills is so factually distinct from the instant case that we can hardly compare the two. In Mills, the issue was whether a negligent entrustment action will lie against the operator of a parking lot who surrendered an automobile to its owner, knowing that the owner was drunk. The Court held that, under the circumstances, there could be no cause of action for negligent entrustment because the operator of the parking lot had a duty to surrender control of the automobile or suffer a possible penalty for conversion. That certainly is not the situation in this case.

Appellants’ reliance on Larsen v. Heitmann, 133 A.D.2d 533, 519 N.Y.S.2d 904 (1987), is equally misplaced. In Larsen, the Court held that there was insufficient evidence to establish that the 17-year-old son’s automobile, when operated by him, was a dangerous instrument and that the parents should have known that the son would operate the automobile in a reckless manner. The Court also held that, because the vehicle belonged to the son and, until about two weeks prior to the accident, the son had lived away from home, the son’s use of the automobile was not subject to parental control. That case seemed to be based on the parents' responsibility for their minor son’s actions generally rather than on any entrustment theory. There were certainly no facts suggesting that the parents gave or entrusted the vehicle to their son and therefore that case is inapposite.

Similarly, in Alfano v. Marlboro, 85 A.D.2d 674, 445 N.Y.S.2d 517 (1981), the Court held that the father could not be found liable in a wrongful death action arising out of an accident involving the father's 17-year-old son's operation of a snowmobile. Specifically, the Court held that where the son had been properly trained in the operation of snowmobiles, had a valid driver’s license, and the father had been separated from the son’s mother and did not have custody of the son, the father did not have the requisite control to be liable for negligent entrustment. The Court never mentioned that the father gave or entrusted the snowmobile to the son but merely stated that the father “had legally separated from his wife and had moved out of the home prior to the incident in question. Thus, at the time of the accident, he did not have custody or control over either his son or the snowmobile. Indeed, he was entirely unaware of the events leading to the fatal accident.” 445 N.Y.S.2d at 518. It appears that, as in Larsen, the Court focused on the minority of the son and the father's responsibility for his son’s actions generally rather than on a negligent entrustment theory.

4 . At the time of the accident, and apparently at the time of the entrustment, the son was 20 years of age. These events occurred two years before the Legislature lowered the age of majority from 21 to 18. See Kahlenberg, 290 Md. at 479 n. 1, 431 A.2d 76.

5 . We note that, although appellants may have lost effective control over the Mazda following their presentation of it to Ronald, Jr., they still retained the right to inform the Motor Vehicle Administration of their son’s drug dependency and erratic behavior and suggest that his license be suspended or that he be subjected to a reexamination. See Md.Code, Transp. art., §§ 16-206(a) and 16-207.

6 . See Peterson v. Halsted, 829 P.2d 373 (Colo.1992) (holding that parents who cosigned loan in order for their daughter to obtain financing to purchase an automobile were not suppliers of chattel under Restatement (Second) of Torts, § 390); Spindle v. Reid, 277 A.2d 117 (D.C. 1971) (holding that mother who titled automobile in her name in order to help son obtain financing never had control to permit or prohibit use and therefore could not be held liable for negligent entrustment); Lopez v. Langer, 114 Idaho 873, 761 P.2d 1225 (1988) (holding that a father who paid for an automobile with his son’s money and delivered title to son’s mother and car was otherwise maintained by son did not possess the requisite control over the vehicle to hold him liable for negligent entrustment); Nichols v. Atnip, 844 S.W.2d 655 (Tenn.Ct.App.1992) (holding that parents who provided their son with tires, some insurance payments, and occasional gas money did not entrust automobile to son where son purchased automobile with his own funds and held title in his own name); Brown v. Harkleroad, 39 Tenn.App. 657, 287 S.W.2d 92 (1955) (holding that a father who had knowledge of his son's poor driving record but nonetheless purchased an automobile for him was not liable under a negligent entrustment theory because to so hold would in effect extend the liability to any person selling a vehicle to a known incompetent and that such extension is the job of the Legislature); Mejia v. Erwin, 45 Wash.App. 700, 726 P.2d 1032 (1986) (holding that a father who provided his credit to his son to assist the son in renting an automobile was not liable under a negligent entrustment theory even though the automobile was rented in the father's name).