CRST, Inc. v. Superior Court of Los Angeles County
11 Cal. App. 5th 1255
| Cal. Ct. App. | 2017Background
- In July 2014 CRST truck driver Hector Contreras collided with the Lennigs’ car; CRST terminated Contreras afterward. The Lennigs sued Contreras and CRST for negligence (including negligent hiring/entrustment) and requested punitive damages against both.
- CRST admitted vicarious liability for any negligence by Contreras but moved for summary adjudication that (a) negligent-hiring/entrustment claims were barred by Diaz v. Carcamo and (b) punitive damages were not recoverable under Civil Code §3294(b).
- The trial court granted summary adjudication in favor of Contreras on punitive damages (finding no intoxication evidence) but denied CRST’s motion in full. CRST petitioned for writ relief limited to the punitive-damages denial.
- The Court of Appeal held that Diaz/Armenta do not bar punitive damages claims against an employer who admits vicarious liability, but that CRST was nonetheless entitled to summary adjudication because plaintiffs failed to raise triable issues that a managing agent had the §3294(b) culpability required to impose punitive damages on the corporation.
- The court found triable issues that a fleet manager (Davis) may have known of Contreras’s unfitness and consciously disregarded it, but the record did not show she was a “managing agent” with authority to set corporate policy as required by §3294(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does an employer’s admission of vicarious liability bar punitive damages against the employer? | Lennigs: admission of vicarious liability does not negate employer misconduct allegations supporting punitive damages. | CRST: Diaz/Armenta bar employer-level claims/evidence once vicarious liability is admitted, so punitive damages should be barred. | Rejected CRST’s argument — Diaz/Armenta bar separate compensatory theories but do not preclude punitive damages under §3294(b). |
| Were there triable issues that CRST is liable for punitive damages under §3294(b) (advance knowledge + conscious disregard by a managing agent)? | Lennigs: evidence shows CRST violated its own policies, ignored speeding/seatbelt incidents, had multiple preventable accidents, and supervisors knew or should have known. | CRST: complied with federal hiring and drug-testing regs; disputed incidents (e.g., "MPH 99") do not show knowledge of unfitness; no managing agent had authority to set corporate policy. | Granted CRST summary adjudication — although factual disputes exist about knowledge/conduct, plaintiffs failed to show any corporate employee with managing-agent authority required by §3294(b). |
| Did trial court correctly grant summary adjudication for Contreras on punitive damages? | Lennigs: argue intoxication evidence exists. | Contreras: no admissible evidence of intoxication. | Trial court’s grant for Contreras was not challenged here and stands; appellate court declined to revisit it. |
| Was plaintiffs’ discovery-based contention (that CRST withheld/ destroyed evidence) enough to deny summary adjudication? | Lennigs: asserted discovery delay and lost emails prevented full opposition. | CRST: arguments were previously resolved or not shown prejudicial. | Forfeited / not considered — plaintiffs did not seek review of related adverse rulings, and the appellate review was limited to the trial court record. |
Key Cases Cited
- Diaz v. Carcamo, 51 Cal.4th 1148 (Cal. 2011) (reaffirming Armenta: when employer admits vicarious liability, negligent-hiring/entrustment claims are superfluous as to compensatory fault allocation)
- Armenta v. Churchill, 42 Cal.2d 448 (Cal. 1954) (pre-Diaz rule barring evidence of owner misconduct after owner admits vicarious liability)
- College Hospital Inc. v. Superior Court, 8 Cal.4th 704 (Cal. 1994) (punitive damages require employer fault; discussion of punitive purpose)
- Grimshaw v. Ford Motor Co., 119 Cal.App.3d 757 (Cal. Ct. App. 1981) (punitive damages may be imposed on non-negligent entities under appropriate circumstances)
- White v. Ultramar, Inc., 21 Cal.4th 563 (Cal. 1999) (defining "managing agent" and requiring substantial discretionary authority to impose punitive damages on corporation)