California Court of Appeal Holds in Favor of Injured Motorcyclist Hit by Taxi Driver in West Hollywood; Taxi Company Vicariously Liable for Driver’s Acts

The issue of whether a taxi driver was an agent or an employee of a defendant taxi company recently came before the California Court of Appeal.  Following a motorcycle crash, the plaintiff in this case had filed a personal injury claim against the taxi driver who crashed into him and the company for which he worked.  The trial court had found that the evidence did not support the jury’s finding that the driver was an agent of the taxi company, and it granted a judgment notwithstanding the verdict (JNOV).  The plaintiff appealed, arguing that the evidence did show agency and supported the verdict.  On appeal, the court held that public regulations could be used to determine principal-agent relations, when those regulations require the taxi company to exert control.

While riding his motorcycle through West Hollywood, the plaintiff had been struck by the defendant’s taxi, coming from an opposite direction, which turned left in front of the plaintiff. The defendant driver opened his taxi and set his own hours. He had a contract with the defendant taxi company, and it stated he was an independent contractor.

The jury had been asked to determine whether the driver was an employee or an independent contractor, based on a California jury instruction.  If the jury determined that the company gave the driver authority to act on their behalf, this would be deemed agency.  The court instructed the jury to determine whether the principal (taxi company) had the right to control the manner and means of accomplishing the result that was desired, as well as other factors.

The court also explained that an employer is generally not liable to others for the acts of an independent contractor. The jury found that the taxi driver was not an employee but an agent. The significance of this jury finding was that a principal-agent relationship exposed the taxi company to vicarious liability.  Then, the taxi company moved for JNOV, and the trial court granted the JNOV.

On appeal, the California Court of Appeal stated that they would review the legal question within the appeal, as well as the substantial evidence standard of review.  First, the court stated the law of agency and vicarious liability, which holds that companies can be held vicariously liable if their agent commits a tort.  Agency is a relationship that results from consent, and there must be a right of control.

Factors that determine whether agency exists include the relation of the parties and the right of control. The court examined caselaw surrounding the legal relationship between taxi companies and their drivers. The taxi company’s argument was that when public regional or third-party requirements require a level of control over drivers, that should not be considered in determining if an agency or employment relationship exists.

The appellate court stated that the taxi company relied exclusively on federal cases, rather than California law.  Furthermore, the court stated that California law recognizes that individuals hired as independent contractors may be agents.  The court rejected the federal cases and held that public regulation of an industry does not, as a matter of law, mean that a party is shielded from vicarious liability by hiring independent contractors.

The court noted that the regulated hirer exception serves to protect the public. If companies could hire independent contractors to perform regulated operations and avoid liability, injured people would not be entitled to recover financially from the responsible party:  the company.  Here, the taxi company argued that the taxi industry is not engaged in an activity that has an enhanced risk to the public.

Public obligations, according to the court, are imposed upon taxi companies to ensure the safety of drivers.  The court stated that in other regulated hirer cases, California courts have held common carriers vicariously liable for acts committed by their independent contractor drivers.  When regulations require taxi companies to control their drivers, this does not preclude the company from being vicariously liable in the event a driver negligently causes an accident.

In this case, the court stated that the evidence supported a finding that the taxi company controlled major portions of its drivers’ work. The company could terminate its relationship with drivers and supplied a training manual with rules of conduct to every driver.  Drivers were also required to train and participate with equipment purchased by the taxi company.

The court held that the evidence supported the jury’s finding that the taxi driver was the taxi company’s agent. The company was vicariously liable for the driver’s acts, and the JNOV was in error. The court reversed the judgment.

If you or someone close to you has been hurt in a motorcycle accident, we can protect your right to compensation from the at-fault party. At Sharifi Firm, our motorcycle accident attorneys represent people injured in collisions throughout Southern California. We provide a free consultation. Call us today at 1-866-422-7222.

More Blog Posts:

California Court of Appeal Affirms Judgment in Favor of County of Los Angeles Following Motorcycle Collision in Angeles National Forest, Southern California Injury Lawyer Blog, September 6, 2016

California Court of Appeal Affirms Judgment in Favor of Insured When Uninsured/Underinsured Liability Coverage Limit Had Been Met, Southern California Injury Lawyer Blog, October 14, 2015

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