|AT A GLANCE|
|Important items fleet managers should be aware of in regards to negligent entrustment include:
Of all the many issues for today's fleet manager, negligence bears the most risk, particularly in the case of the corporate fleet manager. For example, what if, in the eyes of a court of law, the acts of the fleet manager or fleet department are not consistent with the standards in the fleet industry? Under today's legal system, the corporation may be held liable for negligence under civil law. In certain instances, even the corporate fleet manager could be held liable under both criminal and civil bodies of law.
What about the government fleet manager? Does the doctrine of sovereign immunity shield governments from tort liability, and to what extent could a government fleet manager be individually sued or separately sued in a civil suit? Moreover, what rights are due to persons suffering losses as a result of the negligence of government employees?
The purpose of this article is to answer these questions and help federal, state, municipal, and local government fleet managers understand what liabilities they face resulting from the negligence of their employees. The basics of tort law are explained to provide government fleet managers an understanding as to how various immunity laws differ within various government jurisdictions.
What is Tort Law?
Before discussing liability for the government fleet professional, a basic background in tort law is helpful.
A "tort" is a civil wrong. West's Encyclopedia of American Law defines "tort law" as "a body of rights, obligations, and remedies that is applied by courts in civil proceedings to provide relief for persons who have suffered harm from the acts of others."
Negligence, the most common tort, has the most risk for fleet managers since negligence awards can be very large and fleet managers deal with a subject that is inherently dangerous - the operation of a motor vehicle.
Negligence is based on a duty of care. When one engages in any activity, that person is under a legal duty to act as an ordinary, prudent, reasonable person would act. It should be remembered that negligence law is, at its base, a way to spread risk fairly. So it is logical that courts tend to stretch the scope of negligence liability to cover innocent injured parties when a defendant is negligent.
The applicable standard of care is the reasonable person standard of ordinary prudence under similar circumstances. For fleet professionals, it is judged as what the reasonable, prudent fleet professional in the field of fleet management would do under similar circumstances.
Generally, for an organization to assume negligence liability for the acts of the fleet or fleet department, the court must find the fleet organization's behavior was not consistent with the standards in the fleet industry. As an example, if a driver is involved in a crash, and the other party claims the driver was not competent to operate the vehicle and the organization was negligent in hiring the driver, the standard of care would be whether the fleet department (or other responsible organization) properly checked driver motor vehicle records, had reasonable safety programs, had appropriate and current driver policies and procedures, etc., consistent with other similar fleet organizations in its geographic territory.
The employer can be held liable for negligence either directly due to the employer's negligence (e.g., negligent entrustment, negligent hiring, negligent supervision, negligent training) or under the doctrine of respondeat superior (vicarious liability). The Restatement of the Law - Agency Third in Section 2.04 defines respondeat superior as follows: "An employer is subject to liability for torts committed by employees while acting within the scope of their employment."
The negligence or fault of the employer is not an element of the respondeat superior claim. To this end, if the employee has no liability, then the employer can have no vicarious liability.
What is Sovereign Immunity?
The doctrine of sovereign immunity has its roots in English common law, adopted at the founding of the United States. Sovereign immunity in England was based on the doctrine of the "divine right of kings" and that the king "could do no wrong." As English law evolved, it became established that the king could not be sued in his own courts.
The federal government and new states of the United States adopted the English doctrine of sovereign immunity, holding that the federal government or states are not liable in tort without their express consent. The famous Judge Oliver Wendell Holmes said in Kawananakoa v. Polyblank (205 U.S. 349, 353, ), "[a] sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right against the authority that makes the law on which the right depends."
The doctrine of sovereign immunity shielded governments in the U.S. from tort liability until relatively recently. Generally, the only way for a victim of government negligence to be compensated was for Congress or a state legislature to pass an individual act compensating the victim. However, beginning in the 20th century, the trend of tort law was to compensate the victims of tort liability by enterprise acts and distribute their losses among the beneficiaries of the enterprise. This trend ran directly into the accepted doctrine of sovereign immunity. Persons suffering losses due to the negligence of government employees generally were left without a remedy.
Why is the Federal Tort Claims Act Important?
In 1946, the federal government enacted the Federal Tort Claims Act (FTCA), the most important piece of legislation affecting government immunity. Under the FTCA, the federal government can only be sued "for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act of omission occurred," (28 U.S.C. Section 1346[b]).
The FTCA did not do away with sovereign immunity; rather, it created a waiver of sovereign immunity under specific circumstances. The federal government, under the FTCA, specifically consented to be sued for negligence under the conditions specified in the Act.
To bring a negligence case under the FTCA, the claimant must have been damaged by the negligence or wrongful act of a federal employee acting within the scope of his or her employment in circumstances where a private person would be liable under the law of the state in which the negligence or wrongful act occurred. The U.S. Supreme Court has held that the FTCA is to be liberally construed (Black v. Neal, 460 U.S. 289, 298 ).
The FTCA grants exclusive jurisdiction to federal district courts and limits remedies to monetary damages only (no punitive or exemplary damages). All federal agencies and instrumentalities (such as the post office) are covered. A key limitation is that liability only attaches if the federal employee was acting within the scope of his or her employment when the act occurred. This does not mean whether the employee had the authority to act, only whether he or she was carrying out the business of the government. A second key limitation is that the government is liable only if it would be liable under state law if it were a private person.
It should be noted that numerous procedural rules apply to an FTCA claim:
- The claim must be filed first against the agency involved within two years of the negligent act.
- The agency has six months to accept the claim or reject it.
- If the agency rejects the claim or does not decide within such six-month period, the claimant may sue.
- All suits must be brought in federal district court in the venue where the plaintiff resides or the negligence occurred.
All suits under the FTCA are exclusively against the U.S. and not the individual employee or agency involved.
In fact, if the employee was acting within the scope of employment, the employee cannot be individually sued or separately sued in a civil action.
Applying the FTCA to federal government fleet operations, if a fleet driver is negligent while performing duties in the scope of his or her employment, the FTCA waiver to sovereign immunity will apply and the federal government will be subject to suit for monetary damages. And in government fleet operations where large fleets of trucks and vehicles are operated, the potential liability for the federal government is large. For example, two representative cases noted in the sidebar [Representative Cases on page 24] contain rulings against the federal government. In both cases, the U.S. Postal Service was found negligent resulting from the acts of the USPS drivers. Monetary damages ranged from $450,000 to $600,000.
Individual State Tort Claims Acts
The picture is not as clear under state law. Most states have adopted individual state tort claims acts, many patterned after the FTCA. However, the majority limit recovery under the individual state tort claims act. The National Conference of State Legislatures (NCSL) compiled a comprehensive list of all state tort claims acts (see www.ncsl.org). According to the NCSL, at least 33 states limit or cap recovery under their respective state tort claim acts. The balance of the states and the District of Columbia, following the FTCA, do not limit or cap recovery.
Some states cap recovery as low as $100,000. Florida, for instance, capped recovery at $100,000 for individual and $200,000 for claims until October 2011, when the caps will be increased to $200,000 and $300,000. Illinois and Massachusetts, for example, cap recovery at $100,000, except for negligence involving motor vehicles, which are not capped. To understand what liabilities state government fleet operators face, fleet professionals must understand the specific waivers to sovereign immunity adopted in their states.
As with the FTCA, the individual state tort claims acts have varying administrative procedures that must be followed in order to assert a claim. It is imperative that the claimant and the potential defendant (public fleet organization) understand the specific procedures in their state.
Municipal and local government liability for negligence of their employees generally follows the law of the state in which the local entity is located.
By way of illustration, a number of state and local government cases are provided in the sidebar (page 25). Two cases against the State of California, in particular, reflect the significance of potential fleet-related verdicts decided in favor of the plaintiff. In one case, the judge found the Los Angeles County Metropolitan Transportation Authority negligent for failing to adequately train a bus driver; damages amounted to almost $14 million. A second case against the City of Los Angeles, also decided by a judge, levied $7.7 million against the City for negligence involving a police officer vehicle chase. Not to be outdone by California, the City of St. Louis was recently found negligent in a jury verdict award of $3 million after a City driver negligently made a right turn on a red light, causing the plaintiff to crash into parked cars. Finally, although not caused by the negligence of the fleet vehicle driver or even the fleet organization, the State of New Jersey was found negligent for damages exceeding a whopping $31 million as a result of adopting a policy to not repair a knowingly dangerous condition until an accident occurred. All of these cases are evidence of the potential cost of damage awards even though punitive awards are not permitted. For more details, see sidebar "Representative Cases."
What does this all mean?
While individual government employees or agencies may not be held responsible for their own acts or the acts of their employees, it is still expected that the fleet organization and its drivers practice the applicable standard of care that is reasonable for the circumstances in play. In essence, it is practical to expect that innocent injured parties will seek damages (and often be successful) against a negligent defendant, even if that defendant is a government entity. Consequently, the fleet manager should be responsible for exercising due care to protect the governmental entity and its tax-paying constituents against large, avoidable negligence damage awards and the resulting negative publicity. Government fleet managers, therefore, should understand the doctrine of sovereign immunity, the FTCA, and individual state tort claims acts as appropriate for their governing jurisdiction.
To illustrate the potential liability facing government fleet operations, the following are some representative verdicts and settlements awarded to plaintiffs:
1. Federal: $450,000 verdict; U.S. District Court Judge Thomas Penfield Jackson ruled in favor of a plaintiff, who suffered back and knee injuries after his van was rear-ended by a U.S. Postal Service truck. Source: www.chaikinandsherman.com.
2. Federal: $600,000 verdict; plaintiff was riding a motorcycle when a U.S. Postal Service truck negligently pulled out from a stop sign in front of plaintiff, who suffered major fractures and injuries. Source: www.chaikinandsherman.com.
3. California: $13,820,000 verdict; Garcia v. Los Angeles County Metropolitan Transportation Authority. Joseph Garcia, a 56-year-old unemployed passenger was traveling on an LACMTA bus that collided with a parked car. Garcia suffered severe brain damage and hemiplegia of his left side. He successfully argued that the LACMTA was negligent by inadequately training the bus driver (she failed to maintain the required minimal clearance from parked vehicles four times during training). Source: www.greene-broillet.com (Greene, Broillet & Wheeler, LLP).
4. California: $7,675,000 verdict; Tartakoff v. City of Los Angeles. A 41-year-old woman was paralyzed when the car she was driving was struck by a car traveling up to 100 miles an hour fleeing from police. She successfully alleged the police were negligent in chasing the suspect without lights or siren. Source: "Jury Awards Paraplegic $7.65 Million From City," Jane Fritsch and Charisse Jones, L.A. Times, March 29, 1990.
5. Missouri: $3 million jury verdict; Alnita Smily, 21, was awarded $3 million in her suit against the City of St. Louis. She successfully argued that a marked City truck negligently made a right turn on a red light, causing her to swerve to avoid a collision and crash into parked cars. The crash resulted in serious head injuries, a severed ear, and back injuries. Source: "Jury Orders St. Louis to Pay $3 million Over Crash," Valerie Schremp Hahn, St. Louis Post Dispatch, November 12, 2010.
6. New York: $1.6 million jury verdict; plaintiff suffered injuries in auto accident caused by municipality failing to maintain safe road conditions (stop sign blocked by trees and shrubs). Source: www.friedmanhirschen.com.
7. New Jersey: $31,295,007 verdict; Nicholas Anderson, 18, was driving his car in Camden County when a driver going in the opposite direction, into his lane, caused him to swerve onto the shoulder, which was six inches lower than the highway. Unable to drive back, he went out of control, hitting the guardrail. The guardrail penetrated his car and severed his left leg. He suffered other significant injuries. At trial, it was shown that the County knew of the dangerous conditions of the shoulder and guardrail but pursuant to its policy of not fixing safety conditions until there is an accident, did nothing to correct the unsafe condition. Source: www.feldmanshepard.com.
About the Author
Janis Christensen, CAFM, is director of Corporate Fleet Consulting Services at Mercury Associates, Inc.