CRST, Inc. v. Superior Court

Proof of an employer’s own wrongdoing is needed to impose punitive damages on the employer for an employee’s torts, even if as a separate matter it is vicariously liable for those torts.  The trial court erred in not granting summary judgment to CRST on plaintiff’s claim for punitive damages arising from an accident that one of CRST’s truck drivers caused.  The driver was not a managing agent or officer of CRST.  Neither was the only other employee shown to have advance knowledge of (and potentially have consciously disregarded) the driver’s dangerous driving.  That employee managed a fleet of trucks and their drivers, assigning the work and resolving HR issues with the drivers.  She also reported safety violations and accidents to the safety department.  However, there was no evidence this fleet manager had any authority to change corporate policy, so she didn’t qualify as a managing agent.  In Diaz v. Carcamo (2011) 51 Cal.4th 1148, the Supreme Court held that when an employer admits vicarious liability for its employee’s acts, the plaintiff cannot sue it for negligent hiring, entrustment, or supervision because those claims are means of imposing vicarious liability on an employer for an employee’s acts that might outside the scope of his employment.  Proof of negligent hiring etc. is unnecessary once the employer admits vicarious liability.  However, Diaz does not allow an employer to escape potential punitive damages by admitting vicarious liability for the employee’s torts.  Proof of the employer’s own wrongdoing is needed to impose punitive damages on the employer even if it is vicariously liable for the employee’s torts, so evidence of employer wrong-doing is relevant and may establish the employer’s liability for punitive damages.

California Court of Appeal, Second District, Division 4 (Manella, J.); May 26, 2017; 2017 WL 2302215

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