Facts

On Sunday, Sept. 19, 2004, at approximately 4:59 a.m., Gilberto Rodriguez was driving a rented delivery truck for his employer, Posh Bagel, Inc, and was traveling southbound on U.S. Highway 101 in Marin County. Rodriguez lost control of the vehicle, ran off the highway, and hit a bridge abutment. The crash killed his passenger, plaintiff Denitsa Shekerova, a 23-year-old Bulgarian exchange student who was visiting the United States on a break from law school. She had been befriended by Gilberto Rodriguez at a casino where they both worked.

Investigators learned that Rodriguez had tested positive on an immunoassay test for methamphetamine (meth), done by the California Highway Patrol, and that Rodriguez had had only a few hours of sleep prior to the incident. Apparently, he had invited plaintiff along with him because of his fatigue.

Defendant Enterprise Rent-A-Car of San Francisco was the owner of the rental vehicle. Enterprise had rented other delivery vehicles to Posh Bagel, Inc. in the past.

Plaintiffs were faced with a $1 million insurance policy covering defendants Posh Bagel, Inc. and Gilberto Rodriguez.

PLAINTIFF'S CONTENTIONS:
Plaintiffs alleged Posh was a federal motor carrier, and, as such, was required to comply with Title 49 of the Code of Federal Regulations Part 382. The regulatory scheme required a method for employers to monitor alcohol and chemical use among its drivers. Given the potential for punitive damage exposure, plus the company's economic condition, plaintiffs pled treble damages. While punitive damages were not insurable under defendants' policy, plaintiffs argued that the treble damages - a statutory fee - were insurable.

Plaintiffs used Civil Code section 3333.7 to plead treble damages contending that defendant employer Posh Bagel was a motor carrier that had allowed its employee (Rodriguez) to operate its rented delivery vehicle while under the influence of a controlled substance.

DEFENDANT'S CONTENTIONS:
Defendants denied plaintiff's allegations, denied that Rodriguez had used drugs, and denied Posh was a "motor carrier."

Enterprise argued that its $15,000 liability was only applicable where the driver was uninsured.

Settlement Discussions

Plaintiffs made a C.C.P. Section 998 Offer to Compromise-policy limit demand on defendants Posh Bagel, Inc. and Gilberto Rodriguez. The offer was accepted (less a prior pay-out out to the truck owners).

Result

Enterprise paid plaintiffs $15,000 - the statutory limit for owners of rental vehicles where death or injury results from a negligent or wrongful act or omission in the operation of the motor vehicle by any person using or operating the vehicle with the permission of the owner.

Other Information

Under Civil Code section 3333.7, where an injury is caused by the driver of a commercial vehicle, the victim is entitled to treble damages if: the driver of the commercial vehicle was under the influence of alcohol or another controlled substance at the time the injury was caused; and the driver’s employer willfully failed at the time of the injury to comply with any requirements of the federal law, described in Vehicle Code section 34520(a), with regard to the driver. Vehicle Code section 34520(a) requires motor carriers and drivers to comply with the controlled substances and alcohol use, transportation, and testing requirements of Title 49 of the Code of Federal Regulations.