McKENNA v. STRAUGHAN

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Court of Appeal, Fourth District, Division 1, California.

Pamela Sue McKENNA, Plaintiff and Appellant, v. William B. STRAUGHAN, et al., Defendants and Respondents.

D001871.

Decided: January 22, 1986

Gene E. Smith, Sherman Oaks, for plaintiff and appellant. William D. Hughes, Kevin K. Johnson and Hughes & Campbell, San Diego, for defendants and respondents.

Plaintiff Pamela Sue McKenna appeals a summary judgment favoring defendants William B. and Marilyn Straughan on McKenna's complaint for damages for personal injuries.   McKenna also appeals the court's order awarding $250 in sanctions to the Straughans' attorney.

FACTS

On July 29, 1982, Cherie Straughan, the defendants' daughter, drove her car onto the wrong side of the road and hit McKenna head-on, causing McKenna extensive damages and personal injuries.   Cherie was driving under the influence of alcohol at the time and was charged with a felony and convicted of a related criminal charge.

McKenna saw Mrs. Straughan almost every Saturday for several months prior to the accident when McKenna did her hair at the beauty shop.   McKenna presented evidence the Straughans knew their daughter Cherie had a serious alcohol problem, had been in and out of eight recovery homes and was still drinking.   Cherie lived with her parents since she had wrecked her previous car.   Mrs. Straughan knew Cherie had a history of driving while intoxicated.   Just before the car was purchased, McKenna had urged the Straughans not to give a car to Cherie because of her drinking problem.   Mrs. Straughan told McKenna she and her husband were buying Cherie a car shortly before the accident because they did not want to be bothered driving Cherie to her Alcoholics Anonymous meetings.   McKenna said “Why give her another one?   That's like giving a six year old a loaded gun and telling them [sic] not to use it.”   A car was purchased with Cherie as the registered owner and William Straughan, Cherie's father, as the registered lienholder 10 days before the accident in question.

The Straughans alleged Mr. Straughan loaned the purchase money for the car to Cherie and he became the vehicle's registered lienholder to secure his loan.

The Straughans submitted evidence they had not previously owned or controlled the car in question.   The Straughans disputed McKenna's evidence they purchased the car for Cherie.

STATEMENT OF THE CASE

McKenna sued the Straughans,1 alleging they were negligent in entrusting or supplying the car to Cherie knowing she was an incompetent and unfit driver.   McKenna further alleged she suffered permanent personal injuries as a result of the negligent, incompetent and reckless operation of the car driven by Cherie.   McKenna also claimed she was entitled to punitive damages because Cherie voluntarily became intoxicated before driving and because the Straughans recklessly and wantonly supplied the car to Cherie knowing she was an unfit driver.   The Straughans answered the complaint, generally denying all allegations.

At the time the complaint was filed, Attorney Frank Crudo represented McKenna.   Five months later, Crudo told the Straughans' attorney, William Hughes, he no longer represented McKenna and Attorney Gene Smith had assumed his responsibilities.   The same day, Hughes sent a letter to Smith confirming Crudo's representations and asking Smith to consider dismissing the case.   Smith never responded to this letter.

During the next four months, Hughes sent Smith several letters and the two attorneys exchanged several telephone calls regarding the case.   Smith never indicated any continuing involvement by Crudo.   Smith appeared as counsel of record for McKenna's deposition.

The Straughans filed a notice of motion and motion for summary judgment, serving Smith personally at his office the same day.   Twenty days after receiving the Straughans' moving papers, Smith telephoned Hughes requesting a continuance of the hearing on the motion for summary judgment.   No opposition papers had been filed on behalf of McKenna and the filing deadline had passed.   Smith told Hughes service had not been timely because Crudo, not Smith, was counsel of record for McKenna.

When Hughes refused to postpone the hearing, Smith appeared ex parte in the superior court to seek a continuance.   The court denied Smith's request to continue the hearing but allowed him to file opposition papers on McKenna's behalf.   An association of attorneys was later filed designating Smith as associate counsel for McKenna.

After hearing, the court granted the Straughans' motion for summary judgment, finding “there [was] no material issue of fact regarding the custody, control or in the required sense, the supplying of the automobile.”   The court also ordered McKenna to pay $250 in sanctions because of the frivolous ex parte motion for continuance.

McKenna appeals, claiming the court erred in (1) granting the Straughans' motion for summary judgment because there was an issue of fact as to their liability;  (2) proceeding with the hearing because the Straughans did not serve their motion on McKenna's attorney of record according to the written court record;  (3) imposing sanctions of $250;  and (4) signing an inadequate order for sanctions under Code of Civil Procedure section 128.5.2

DISCUSSION

I

Whether The Straughans Are Liable In Negligence For Either Purchasing The Vehicle Driven By Their Daughter Or Loaning Her The Money To Purchase It Is A Question Of Fact

The Straughans argue that on these facts McKenna cannot state a cause of action for negligent entrustment because they never owned or controlled the vehicle which Cherie drove at the time of the accident.

McKenna has a broader view of her pleadings.   At the hearing on the summary judgment motion, her counsel argued the “allegations of the complaint, and plaintiff[s'] contentions, are [broader] than mere entrustment.”

Conceptually, McKenna is correct.   Because a negligent entrustment case involves negligence, “the standard by which the conduct of the owner is to be measured is the general one based upon the care which an ordinarily prudent person would exercise under similar circumstances and the question whether a particular owner's conduct measures up to that standard is ordinarily a question of fact for the jury.  [Citation.]”  (Owens v. Carmichael's U-Drive Autos, Inc. (1931) 116 Cal.App. 348, 350, 2 P.2d 580;  see also Civ.Code, § 1714, subd. (a).)  Although here the trial court described this case as one involving negligent entrustment, it did not decide the motion because of technical defects in the pleadings.   Indeed, although far from artful, the pleadings adequately set forth a cause of action in negligence.  (Id., at p. 350, 2 P.2d 580.)   The court, apparently sensitive to the issue of negligence presented by McKenna's second amended complaint as augmented by counsel, decided in favor of the Straughans because liability should not be extended to “an individual who loans money and ends up [as] the lienholder in such a transaction.”

 The trial court correctly stated the general rule.   In a commercial context, acting solely as a lender without more does not subject the lender to liability.  (See Altman v. Morris Plan Co. (1976) 58 Cal.App.3d 951, 130 Cal.Rptr. 397;  Drake v. Morris Plan Co. (1975) 53 Cal.App.3d 208, 125 Cal.Rptr. 667;  Skerlec v. Wells Fargo Bank (1971) 18 Cal.App.3d 1003, 96 Cal.Rptr. 434.)   Whether there is “more” turns on the facts of a particular case and the application of the criteria laid down in Biakanja v. Irving (1958) 49 Cal.2d 647, 650, 320 P.2d 16.)  (See also Connor v. Great Western Sav. & Loan Assn. (1968) 69 Cal.2d 850, 73 Cal.Rptr. 369, 447 P.2d 609;  Bradler v. Craig (1969) 274 Cal.App.2d 466, 475, 79 Cal.Rptr. 401.)   Those criteria include the foreseeability of harm to the injured party, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant's conduct and the injury suffered, the moral blame attached to the defendant's conduct and the policy of preventing future harm.   (Biakanja, supra, 49 Cal.2d at p. 650, 320 P.2d 16;  Connor, supra, 69 Cal.2d at p. 865, 73 Cal.Rptr. 369, 447 P.2d 609.)

Here, there can be no question on the foreseeability of harm.   The plaintiff herself described the risk as being similar to “giving a six year old a loaded gun.”   There is also no question that McKenna was injured and that absent the Straughans' decision to make a car available to their daughter, Cherie would not have possessed what in her hands was a dangerous instrumentality.   The incident occurred 10 days after the Straughans advanced the funds.

 In terms of moral responsibility, there is no functional difference between the Straughans giving their daughter the keys to a car or giving her funds specifically to acquire one.   Arguably, the Straughans who loaned money to their daughter so she could have permanent use of a car are more culpable than if they had merely allowed her to borrow their car for temporary use.3  In effect, they gave their daughter a weapon which she was able to use at any and all times regardless of her condition.  (See Kahlenberg v. Goldstein (1981) 290 Md. 477, 431 A.2d 76, 82, discussing the dissent in Estes v. Gibson (1953) 257 S.W.2d 604.)   Imposing potential liability on the Straughans serves the important public policy of protecting the public from intoxicated drivers who cause needless and tragic deaths and injuries on the highways.   Our holding has no effect upon the typical financial transaction in which an automobile is financed through a bank or commercial lender since we are not suggesting a lender has an affirmative duty to investigate the driver's condition before advancing funds.  (Altman v. Morris Plan Co., supra, 58 Cal.App.3d 951, 130 Cal.Rptr. 397;  Drake v. Morris Plan Co., supra, 53 Cal.App.3d 208, 125 Cal.Rptr. 667.)

 Because we conclude the Straughans' status as lienholder does not preclude their liability on a negligence theory, we reverse the summary judgment to permit a resolution in trial of the factual issues presented.

II

The $250 Sanctions For A Frivolous Continuance Motion Were Proper

McKenna contends the court erred in ordering her and her attorney, Smith, to pay $250 in costs to the Straughans.   The court ordered these sanctions because McKenna's ex parte motion for a continuance was frivolous and caused unnecessary delay.  (§ 128.5.)

McKenna asked the trial court to continue the hearing on the Straughans' motion for summary judgment, claiming Smith was improperly served.   McKenna asserts she was justified in asking for a continuance because no proper substitution or association of attorneys was executed and filed at the time the moving papers were served.   Thus, McKenna argues, Crudo was her exclusive representative and service on Smith was improper.

 However, the trial court had evidence before it that Smith, not Crudo, was representing McKenna.   The Straughans' attorney, Hughes, believed Smith was McKenna's attorney based on representations made to him and Smith acquiesced in this belief.   After December 19, 1983, all correspondence was between Hughes and Smith.   Smith appeared as attorney of record at McKenna's deposition.   Crudo was not discharged and superseded by Smith;  rather, Crudo associated Smith.   As associate, Smith was McKenna's authorized representative and could act in her behalf without the formal procedure of substitution.  (See §§ 284, 285;  Wells Fargo & Co. v. City etc. of S.F. (1944) 25 Cal.2d 37, 43, 152 P.2d 625;  Johnston, Baker & Palmer v. Record Machine & Tool Co. (1960) 183 Cal.App.2d 200, 206, 6 Cal.Rptr. 847.)   Further, Smith failed to inform Hughes that Crudo was McKenna's “sole representative.”   Smith cannot now object to his own failure to give notice.  (See Anderson v. City Ry. Co. (1935) 9 Cal.App.2d 205, 207, 48 P.2d 969.)   Thus, service on Smith was entirely proper.

 Under these circumstances, Smith's motion for a continuance was frivolous because “any reasonable attorney would agree such motion is totally devoid of merit.”  (Karwasky v. Zachay (1983) 146 Cal.App.3d 679, 681, 194 Cal.Rptr. 292, citing In re Marriage of Flaherty (1982) 31 Cal.3d 637, 649–650, 183 Cal.Rptr. 508, 646 P.2d 179.)   The court's order was in writing and stated the action taken by plaintiff and her attorney which resulted in the May 8, 1984, ex parte hearing was frivolous and caused unnecessary delay.   McKenna challenged the sufficiency of that order, alleging it failed to adequately “recite in detail the conduct or circumstances justifying the order” under Code of Civil Procedure section 128.5, subdivision (b).   Indeed, it more resembles the inadequate order in Lavine v. Hospital of the Good Samaritan (1985) 169 Cal.App.3d 1019, 1028–1029, 215 Cal.Rptr. 708, rather than the adequate order in Karwasky v. Zachay, supra, 146 Cal.App.3d 679, 681, 194 Cal.Rptr. 292.   Simply stating the action in question was frivolous and caused unnecessary delay is not adequate.   Facts must be recited to support this conclusion upon due process requirements.  (Lavine v. Hospital of the Good Samaritan, supra, 169 Cal.App.3d 1019, 1029, 215 Cal.Rptr. 708.)   However, the order for the $250 sanctions is reasonable under the facts presented in the record.   Therefore, the trial court may, on remand, write an order in compliance with the law set forth above.   The court did not abuse its discretion in awarding $250 costs to the Straughans.

DISPOSITION

Summary judgment is reversed.   The awarding of costs is affirmed and the case is remanded to prepare and enter a new order in accordance with section 128.5, subdivision (b).

FOOTNOTES

FOOTNOTE.  

1.   A separate action against Cherie has been settled.

2.   All statutory references are to the Code of Civil Procedure unless otherwise specified.

3.   There is no dispute that there would be a cause of action for negligent entrustment if the parents had merely allowed the daughter to borrow their car temporarily.

KINTNER, Associate Justice.* FN* Assigned by the Chairperson of the Judicial Council.

WIENER, Acting P.J., and WORKS, J., concur.

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