The Golden State has the lowest minimum auto insurance coverage requirement in the United States; by comparison, neighboring Oregon requires drivers to carry almost twice as much auto insurance as does California. At the same time, almost 15 percent of California drivers are completely uninsured, and that figure is well above the national average. So, many tortfeasors (negligent drivers) may not have enough insurance coverage to compensate victims for all the injuries they sustain, especially in catastrophic cases involving permanent injuries or wrongful death.

Legally, the tortfeasors must personally pay any damages that their insurance companies do not cover, but in some cases, there are significant hurdles to collecting money from individuals. According to this resource, third party liability is a better approach, because bringing other responsible parties into the dispute creates an additional source of compensation for victims.

Direct Employer Liability

Under California law, negligence and tort losses are part of the cost of doing business, just like any other losses. So, under the respondeat superior (“let the master answer”) doctrine, employers are legally responsible for the negligent acts of their employees. There are two prongs to this test, and courts regularly interpret both of them in very broad ways that are favorable to victims.

First, the tortfeasor must have been an employee, and this term has a very specific meaning depending on the area of law. For tax purposes, an “employee” generally receives a W-2 and is eligible for all employment benefits, like health insurance and retirement plan. However, in negligence law, the term is much broader. Most courts use a variation of the Department of Labor’s definition, which is “suffer or permit to work.” Therefore, independent contractors, like Uber drivers, truck drivers, owner-operators, are employees for negligence purposes. In fact, the definition is so broad that even some volunteers could be considered employees if the employer directly controls the type of work that they do.

Second, the tortfeasor must have been working in the course and scope of employment, and this phrase goes well beyond a delivery driver making deliveries in a delivery truck. Typically, employees are within the course and scope of employment if they are doing anything that benefits the employer in any way, no matter how slight. For example, a few courts have held that employees playing in a company softball game were acting within the course and scope of employment because the boss benefited from having happy and healthy workers.

Indirect Employer Liability

Respondeat superior does not apply if the tortfeasor stole a vehicle from the parking lot or committed an intentional tort, like vehicular assault. However, liability usually still attaches in these situations, because of the negligent supervision/hiring doctrine. So, even if the tortfeasors act outside the scope of employment, the employer is still liable for damages if:

• Unfit: A few speeding tickets or a criminal past does not automatically make people “unfit,” but people with poor driving records should not operate delivery vehicles and people with prior assault convictions should probably not be elderly caregivers.
• Knowledge: The employer must have had actual or constructive knowledge (known or should have known) about the unfitness and must have been aware that the unfitness posed a substantial risk to others.
• Causation: There must be a nexus between the incompetence and the injury, so if the delivery driver with a poor driving record slips on black ice, the doctrine is more difficult to apply.

Somewhat different rules apply to public employers, like school districts, because there must be a special relationship between the tortfeasor and the victim. This rule sometimes applies to private employers as well.

Owner Liability

If a non-owner uses another person’s vehicle, whether the non-owner paid anything for the right or not, negligent entrustment usually applies. The theory is that if owners turn a blind eye to the shortcomings of the people they allow to use their property, the owners should be liable for damages. For the rule to kick in, the tortfeasor must have been:

• Negligent, and
• Using the owner’s vehicle with the owner’s permission, even though the owner knew the driver was incompetent.

Like in negligent supervision/hiring, the victim must also prove causation in negligent entrustment cases.

This rule applies to a father who lets his daughter borrow the car and to a vehicle rental company customer who causes a car crash in a rented car or truck. In both these situations, no drivers’ license, or a suspended drivers’ license, is essentially automatic proof of negligence. If the tortfeasor had a bad driving record or had never operated that type of vehicle before, there is basically a rebuttable presumption of negligence.

California is a modified joint and several-liability state. In most cases, each defendant is jointly responsible for all economic damages, like medical bills, and individually responsible for noneconomic damages, such as pain and suffering. So, if Victor Victim obtains a $200,000 judgement (half for economic damages and half for noneconomic damages) and the jury divides fault 50-50 between Trevor Tortfeasor and ABC Company, both Trevor and ABC must normally pay $150,000.

As you can see, many times the tortfeasor is not the only person legally responsible for damages. As such, if you choose to pursue a cause of action against the negligent party, you or your attorney will need investigate to determine which defendant has the resources to pay if found liable by a court of law. Understanding who has the “deeper pocket” will help shape your legal strategy.