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Posted by Susan J. Levy

Almost the first question claims managers and adjusters ask me about a case is whether we have exposure to punitive damages. In the majority of cases, particularly absent a punitive damage exclusion in the insurance policy, the party most at risk in an auto or trucking case is the employer of the allegedly negligent driver. What follows is a brief summary of Georgia law on the imposition of punitive damages in negligent hiring, retention and entrustment cases.

Under Georgia law, plaintiffs must first prove the underlying tort in order to prevail on a punitive damages claim. Benefit Support, Inc. v. Hall Co., 281 Ga. App. 825 (2006). Both negligent hiring and entrustment claims require the plaintiff to prove that the driver was incompetent at the time the employer hired/entrusted the driver. Western Indus., Inc. v. Poole, 280 Ga. App. 378, 381-82 (2006); Smith v. Tommy Roberts Trucking Co., 209 Ga. App. 826, 828. However, the standard of proof for negligent entrustment and negligent hiring/retention are profoundly different.

Negligent Entrustment

Under the doctrine of negligent entrustment, a party is liable if he entrusts someone with an instrumentality, with actual knowledge that the person to whom he has entrusted the instrumentality is incompetent by reason of his age or inexperience, or his physical or mental condition, or his known habit of recklessness.” Parker v. Silviano, 284 Ga App. 278, 280 (2007) (quoting Danforth v. Bulman, 276 Ga. App. 531, 535 (2) (623 SE2d 732) (2005)(emphasis added). The tort of negligent entrustment does not impose upon the employer an affirmative duty to investigate unless the employer has a statutory duty to investigate the driver’s background. And regardless of whether an employer performed its independent, statutory duty, the plaintiff must still prove that the driver was incompetent in order to prevail on a negligent entrustment claim. Webb v. Day, 273 Ga. App. 491, 493 (2005).

Once the plaintiff overcomes the first hurdle of proving the underlying tort of negligent entrustment, plaintiff has “to do more than show mere negligence, or even gross negligence on the part of” the employer in order to prove punitive damages. Durben v. American Materials, Inc., 232 Ga. App. 750, 753 (1998); Colonial Pipeline Co. v. Brown, 258 Ga. 115, 118 (1988) (“[N]egligence, even gross negligence, is inadequate to support a punitive damage award.”). Plaintiff must show “by clear and convincing evidence that [the employer’s] conduct in entrusting the vehicle to Defendant showed willful misconduct or the entire want of care which would raise the presumption of conscious indifference to consequences” as opposed to “mere negligence” or even “gross negligence.” Roper v. Siberton Fence Sales, Inc., 2008 U.S. Dist. LEXIS 7086 *17 (M.D. Ga. January 31, 2008).

This is a difficult burden for plaintiffs to overcome. Consider the Roper case where, following a car accident, the plaintiff brought a negligent entrustment claim against the driver’s employer based primarily on the facts that the driver had received “four traffic citations accumulated over three years,” and had been removed from the defendant employer’s insurance. Roper, 2008 LEXIS 7086 *18. In rejecting the driver’s driving record as a basis for punitive damages on a negligent entrustment claim, the district court noted not only that the “seriousness and frequency” of the defendant driver’s four citations failed to “rise to the level that would support punitive damages,” but also that the driver maintained a valid commercial driver’s license even in light of the violations. Id. at *17-8.

Roper follows a line of other cases where similar driving records have been rejected as supporting punitive damages “even assuming [the] employer knew that the employee’s driving record” prior to entrustment. Poole, 280 Ga. App. at 381 n. 7 (citing Bartja, 218 Ga. App. at 818-19); Bradford, 216 Ga. App. 83; Hutcherson, 984 F.2d 1152.

Negligent Hiring/Retention

To reach the question of punitive damages in a negligent hiring or retention claim, the plaintiff must first establish that the employer knew or in the exercise of ordinary care, should have known the employee was incompetent and not suited for the particular employment. To prevail on a claim for punitive damages for a negligent hire or retention claim in an auto or trucking case, a plaintiff must establish that the employer had a “knowledge of serious violations on its driver’s record, or, at the very least [that] the employer has flouted a legal duty to check a record showing such violations.” Western Indus., Inc. v. Poole, 280 Ga. App. 378, 380 (2006) (emphasis added); Frey v. Gainey Transp. Svcs., Inc., 2006 U.S. Dist. LEXIS 90639 *12-13 (N.D. Ga. December 14, 2006).

The use of the word “flout,” defined by the American Heritage Dictionary as to scorn or to show contempt for, is tellingly consistent with the language of O.C.G.A. § 51-12-5.1 which requires plaintiffs to show “willful misconduct, malice … or the entire want of care which would raise the presumption of conscious indifference to consequences” in order to prevail on a punitive damages claim.

A plaintiff cannot demonstrate the requisite culpability necessary to support a punitive damages claim just by showing that a defendant did not adequately perform its duty; rather, the question is whether it “simply ignored” its duty. Burchfield v. CSX Transp., Inc., 2009 U.S. Dist. LEXIS 42401 *22-23 (N.D. Ga. May 15, 2009). In other words, in order to support a claim for punitive damages, plaintiff is required to provide evidence of the employer’s negligence plus some aggravating factor. As is the case for punitive damages in claims of negligent entrustment, even gross negligence is “inadequate to support a punitive damage award” in negligent hiring/retention claims. Colonial Pipeline Co. v. Brown, 258 Ga. 115, 118 (1988).

Not surprisingly, however, the involvement of drugs and/or alcohol in any accident adds a completely different element to the punitive damages claim and almost always weighs in favor of sending the question of punitive damages to a jury and therefore, precluding summary judgment. See e.g. O.C.G.A. § 51-12-5.1(f); Craig v. Holsey, 264 Ga. App. 344 (2003); Carter v. Spells, 229 Ga. App. 441 (1997); Cheevers v. Clark, 214 Ga. App. 866 (1994).