Amparan v. Lake Powell Car Rental Cos., 882 F.3d 943

On July 14, 2014 Lake Powell rented a Dodge Caravan and a Ford Mustang to a group of Turkish nationals; renter Karadeniz produced a valid Turkish license and card, Tacir was an additional authorized driver, and Demir (21) told the owner he had a valid license but was not listed on the additional-driver form.
During the rental, Demir (who was under 25) drove the Mustang, made an improper left turn on green, and collided with Amparan’s motorcycle; Mr. Amparan suffered serious injuries.
The Amparans sued for negligent entrustment and loss of consortium after adding Lake Powell as a defendant; they relied in part on evidence that Lake Powell violated internal/industry age policies (minimum age under 25) and on an expert report about rental-industry standards for young drivers.
Lake Powell moved for summary judgment arguing there was no evidence it knew or should have known Demir was likely to drive in a way creating unreasonable risk; the district court granted summary judgment, finding the policy-violation evidence insufficient to establish the required knowledge/competency element.
The Tenth Circuit affirmed: under New Mexico law evidence that a rental company violated its internal age rules—without evidence of the particular entrustee’s incompetence—is insufficient to prove the element that the entrustor knew or should have known the entrustee was likely to create an unreasonable risk of harm; the derivative loss-of-consortium claim therefore also failed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether evidence that Lake Powell violated internal age policies (renting to/allowing drivers under 25) can satisfy negligent-entrustment element that defendant knew or should have known entrustee was likely to create an unreasonable risk of harm	Amparan: violation of internal/industry age policies and expert opinion on young-driver risk show Lake Powell knew/should have known Demir was likely to be dangerous	Lake Powell: policy violation alone does not show knowledge of this particular driver’s incompetence or likelihood to create unreasonable risk; Demir had a valid license and met state minimum age	Evidence of violating internal age policies, standing alone, is insufficient to prove the knowledge/competency element of negligent entrustment; summary judgment for Lake Powell affirmed
Whether the Amparans’ expert and other materials survive to create a triable issue	Amparan: expert Tennant supports industry standard and shows violation of care; policy-violation evidence is probative	Lake Powell: expert and noncompliant filings are insufficient or unreliable to establish the required standard and specific knowledge	Court declined to resolve motions to strike as unnecessary; even considering materials, Amparans failed to show specific knowledge of Demir’s incompetence sufficient to avoid summary judgment

Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938) (federal courts in diversity apply state substantive law)
Gabaldon v. Erisa Mortg. Co., 990 P.2d 197 (N.M. 1999) (articulates negligent-entrustment doctrine under New Mexico law)
Spencer v. Gamboa, 699 P.2d 623 (N.M. Ct. App. 1985) (expired license/violation of law insufficient, by itself, to prove entrustee incompetence)
DeMatteo v. Simon, 812 P.2d 361 (N.M. Ct. App. 1991) (factors showing entrustee incompetence considered for knowledge element)
McCarson v. Foreman, 692 P.2d 537 (N.M. Ct. App. 1984) (evidence of prior citations, substance use, and warnings may show entrustee unfitness)
Grassie v. Roswell Hosp. Corp., 258 P.3d 1075 (N.M. Ct. App. 2010) (internal-policy violation is probative but may be insufficient without expert-standard proof)
Scott v. Hertz Corp., 722 So. 2d 231 (Fla. Dist. Ct. App. 1998) (rental-company policy violation on minimum age cannot alone sustain negligent entrustment claim)