Facts

In September 2017, defendant Kathy Lee and her family rented a vacation property in Punta Mita, Mexico. The property is owned by defendants David and Carole Kulber, who reside in Beverly Hills, California. The property was rented through the online vacation rental service, VRBO. VRBO is owned by defendant HomeAway.com, a company incorporated in Delaware with its principal place of business in Texas. The property rental included a six-seater golf cart for use getting around the resort property where the Kulbers' vacation home is located. The golf cart was advertised and rented as an included amenity of the property rental and was expressly identified in the VRBO rental contract.

Defendant Kathy Lee and her party arrived in Mexico on Sept. 3, 2017. The group included Kathy Lee, her husband, her daughter, her mother, her father, and her mother-in-law. Upon their arrival, the Lee party went to the Kulber's vacation rental home to check-in and get acclimated. They were informed of a beach club on the resort nearby where they could get food or drinks and relax. The group boarded the EZ-GO golf cart located in the Kulbers' garage to make the short drive to the beach club. Kathy Lee was driving; her mother was seated next to her. The rest of the group took up the middle and back rows. They set out for the Kupuri Beach Club, approximately 10 minutes away via golf cart. They encountered no issues for most of the ride, until they reached a steep and curvy downhill slope approaching the beach club entrance.

As the vehicle started picking up speed downhill, Kathy Lee was unable to keep the vehicle under control. She lost complete control as the vehicle quickly approached a sharp right hand turn at the bottom of the hill. She drove the vehicle through the turn, off road, and into a concrete barrier wall.
Kathy Lee's mother, seated in the front passenger seat, was ejected from the vehicle and ended up underneath the back driver's side tire. She suffered brain hemorrhage and cranial contusion and was in a coma for two days. She was pronounced dead on Sept. 5, 2017. The rest of the passengers of the golf cart suffered minor bodily injuries.

Plaintiffs (all California residents) filed their complaint against defendants David and Carol Kulber (California residents), and HomeAway.com (a Delaware company with its principal place of business in Texas) in California Superior Court, County of Santa Clara on Aug. 28, 2019, alleging negligence and premises liability related causes of action. They also made the difficult decision of suing their family member, Kathy Lee (a California resident), alleging that she was negligent in her operation of the golf cart at the time of the crash.

PLAINTIFF'S CONTENTIONS: Plaintiffs argued that the Kulbers could not be absolved of liability even if the cart involved in the crash was a defective golf cart provided by Mita Carts, unbeknownst to the Kulbers. As an essential amenity of the rental property, plaintiffs argued that the Kulbers had a non-delegable duty to ensure the safety and usability of the cart they provided to guests.

In response to the Kulbers' allegations that Kathy Lee was 100% at fault for the crash based on the Mexican police report, plaintiffs' counsel worked to prove that vehicle defects played a substantial factor in causing the crash. With the help of the photographs taken by plaintiffs at the scene of the crash and using an exemplar/replica golf cart to run experiments on, plaintiffs' counsel and expert accident reconstructionist William Woodruff were able to conclude that the cause of the crash was a failed bearing which caused the left rear wheel and axle to come out of the rear differential as it traveled downhill. This caused a complete loss of braking power and control, as described by Defendant Kathy Lee. The golf cart was not designed and manufactured as a six-seater golf cart; it had been modified to extend the passenger cabin using aftermarket parts. The excess weight of six-passengers likely led to the catastrophic bearing failure that was at the heart of this crash.

DEFENDANT'S CONTENTIONS: Defendants David and Carol Kulber argued two primary theories of defense. First, they argued that the crash was 100% the fault of defendant Kathy Lee, claiming that she negligently drove the golf cart off the road and into the wall. To support this argument, the Kulbers pointed to the Mexican police report assigning fault to Kathy Lee.

Second, the Kulbers argued that even if the cart involved in the crash was defective, that it was not their cart, and they did nothing wrong. They had received that loaner cart for their property less than a week before the crash. The Kulbers claimed to have had no idea that Mita Carts had provided them with a dangerous and defective cart, and that there was no reasonable way they could have discovered any defects in time before the crash. A few days prior to the subject accident Carole Kulber drove the subject golf cart along the same pathway as Plaintiffs down the descending grade to the beach club with 4 passengers having a combined weight of approximately 700 pounds, which is roughly equivalent to the combined weight of the 6 Plaintiffs, without experiencing any braking problems. The Kulbers contended that this was a reasonable inspection of the golf cart prior to the incident, finding it to be problem free. Therefore, the Kulbers had no notice of any braking problem with the golf cart.

Kathy Lee argued that the crash was 100% due to faulty vehicle equipment, claiming that she lost all braking power and was unable to control the golf cart as it careened downhill towards the sharp right-hand turn and that she was completely unable to avoid driving the cart off road.

Kathy Lee's contentions were supported by witness statements claiming that Kathy could be heard screaming "the brakes don't work!" before the cart reached the bottom of the hill and crashed. Physical evidence also supported Kathy's claim that she had lost braking power and control of the vehicle before the crash. Photographs at the scene of the crash showed that the rear left wheel and axle had separated from the rear differential, but it was unknown at that time if the wheel and axle separation happened before the crash or if it was part of the damage that resulted from the crash.

Insurer

DEFENSE INSURANCE CARRIERS: Allstate Northbrook Indemnity Company (Insurer for Kathy Lee) Generali Insurance (Insurer for Carole and David Kulber, provided by HomeAway.com)

Injuries

Robert Lee suffered minor bodily injury; wrongful death of his wife; negligent infliction of emotional distress (Dillon v. Legg). Huy Nguyen suffered minor bodily injury; negligent infliction of emotional distress (Dillon v. Legg). Athena Nguyen suffered minor bodily injury; negligent infliction of emotional distress (Dillon v. Legg). Kathrine Vo suffred minor bodily injury; negligent infliction of emotional distress (Dillon v. Legg).

Result

The case settled for $950,000; $200,000 paid by Kathy Lee (Allstate Insurance) $750,000 paid by David and Carol Kulber (Generali Insurance). Ultimately, the parties were able to resolve the complex case following mediation with David Samuelsen. Despite their evidence that the cart was owned by and supplied by Mita Carts in Mexico, the Kulbers agreed to put up the money remaining on the self-consuming $1,000,000 policy following mediation, which was approximately $750,000--essentially a policy limits settlement. Kathy Lee's carrier agreed to contribute an additional $200,000 for settlement of the wrongful death case brought by Robert Lee, despite her familial relationships with all Plaintiffs involved and the fact that the decedent was her mother.

Other Information

Mexican law severely limits the damages available to injury and death claimants. For this reason, defendants David and Carol Kulber attempted to dismiss the case for forum non conveniens, arguing that Mexico is a more appropriate location for the lawsuit. On May 21, 2020, the court denied the Kulbers' motion for dismissal for forum non conveniens as the Mexican courts would lack personal jurisdiction over defendant Kathy Lee and therefore "not all named, non-nominal defendants are subject to personal jurisdiction in the desired alternative forum (i.e., Mexico)." On June 16, 2020, HomeAway.com filed a Motion to Quash for lack of jurisdiction over that arguing that the incident occurred in Mexico, and HomeAway.com is not a California company, and that it never had care, custody, or control of the golf cart in question. The court agreed, dismissing HomeAway.com from the action. Despite HomeAway.com's dismissal from the case, their insurance carrier, Generali Insurance, provided $1 million in coverage to the Kulbers as part of the HomeAway.com service contract with property owners. The Generali policy was a self-consuming policy. At the time of mediation there was slightly over $750,000 remaining. Because the accident occurred in Mexico, evidentiary difficulties complicated the case. The golf cart was in the possession of Mita Carts following the accident. Within 48 hours, Mita Carts had replaced the wheels and repaired most of the cart's damage, effectively spoiling much of the physical evidence that would have been available in this case. Luckily, the plaintiffs had the foresight to take extensive photographs at the scene of the crash and documented the golf cart's condition before it was repaired. The crash was investigated by local police in Mexico who concluded that the crash was caused by negligent operation and driver error, despite physical evidence of vehicle defect and corroborating witness statements. During discovery it was also revealed that the golf cart involved in the crash was not the Kulbers' golf cart but was a "loaner" golf cart provided by a Mexican entity, Mita Carts, while the Kulbers' golf cart was in the shop for service and repair. As a Mexican entity beyond the reaches of California's jurisdiction, the parties were unable to compel Mita Carts to turn over the vehicle involved or to provide testimony or documentary evidence relating to the loaner cart or its subsequent repairs. Mita Carts was a key player in this incident as they had provided the loaner cart to the Kulbers for use by vacation rental guests. However, Mita Carts was shielded from participating due to the international nature of this case.