§53.1 Generally

§53.1 Generally

The Case: West v. East Tennessee Pioneer Oil Co ., 172 S.W.3d 545 (Tenn. 2005).

The Basic Facts: Plaintiffs were injured in a head on collision with a drunk driver. The drunk driver had purchased gasoline from the Defendant gas station moments before and tests revealed that the drunk driver would not have had enough fuel to reach the scene of the accident without purchasing gasoline at the station. Plaintiffs filed suit against the gas station, alleging its employees were negligent in selling the drunk driver gasoline and alleging negligent entrustment.

The Bottom Line:

• "Tennessee courts have long recognized the tort of negligent entrustment. See, e.g., V.L. Nicholson Constr. Co. v. Lane, 150 S.W.2d 1069, 1070 (Tenn. 1941) (negligent entrustment of a vehicle). To prevail on such a claim 'requires proof that a chattel was entrusted to one incompetent to use it with knowledge of the incompetence, and that its use was the proximate cause of injury or damage to another.'Woodson v. Porter Brown Limestone Co., 916 S.W.2d 896, 907 (Tenn. 1996) (citing [RESTATEMENT (SECOND) OF TORTS § 390 (1964)]); see also Ali v. Fisher, 145 S.W.3d 557, 562 (Tenn. 2004). The [Restatement] explains negligent entrustment as follows:

One who supplies directly or through a third person a chattel for the use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them.

[RESTATEMENT (SECOND) OF TORTS § 390 (1965)]." 172 S.W.3d at 553-54.

• "The Court of Appeals relied upon Brown v. Harkleroad, 287 S.W.2d 92 (Tenn. Ct. App. 1955) in concluding that a supplier of a chattel who relinquishes all ownership rights, such as the present defendant, cannot be liable for negligent entrustment. Harkleroad involved a father who purchased a vehicle for his son. Id. at 94. Several months after receiving the vehicle, the son was involved in an accident and subsequently found guilty of reckless and drunken driving. Id. A party injured in the accident alleged the father had negligently entrusted the vehicle because, at the time of the purchase, the father knew his son was a habitually drunk and reckless driver. Id. at 93. The jury found in favor of the plaintiff. Id. However, upon review, the Court of Appeals concluded that the father could not be held liable because he had relinquished all rights of ownership or control by furnishing the vehicle as a gift, rather than as a loan. Id. at 96. The court was concerned that to hold otherwise could unreasonably extend potential liability.

If a father incurs liability by giving an automobile to his son, knowing him to be [a] drunken or incompetent driver, when would it end? Would it last for the life of the automobile? Would it apply to a new automobile in the event of a trade-in? Or would liability attach to a dealer who sold an automobile to a known incompetent or drunken driver? Or to a filling station operator who

sold such a person gas, knowing of his propensity? Id."

Id . at 554.

• "The Harkleroad decision has been severely criticized. One leading legal commentator stated that Harkleroad and similar decisions 'look definitely wrong,' and further explained that '[i]t is the negligent entrusting which creates the unreasonable risk; and this is none the less when the goods are conveyed.' [Keeton, supra, § 104]. In Nichols v. Atnip, 844 S.W.2d 655 (Tenn. Ct. App. 1992), the Court of Appeals offered thatHarkleroad was 'contrary to [RESTATEMENT (SECOND) OF TORTS § 390 (1964)] and has been criticized by many courts and legal scholars.'Id. at 660 (citations omitted). Extensive criticism of Harkleroad was also noted in Brown v. Wal-Mart Stores, Inc., 976 F. Supp. 729, 734 (W.D. Tenn. 1997), in which the court addressed whether a seller of ammunition could be liable for negligent entrustment. Citing the [RESTATEMENT (SECOND) OF TORTS section 390], the court concluded that 'among those who may be liable as 'suppliers' [in negligent entrustment actions] are sellers of chattels.' Id. Consequently, the court in Brown held that the plaintiff had stated a legitimate cause of action under Tennessee common law. Id. at 735." Id. at 554-55.
• "The [RESTATEMENT (SECOND) OF TORTS] specifically provides that sellers may be liable for negligent entrustment. [RESTATEMENT (SECOND) OF TORTS § 390 cmt. a. (1965)] (stating that the rule under this section 'applies to anyone who supplies a chattel,' including, 'sellers, lessors, donors or lenders'). In line with a majority of other states, this Court has previously cited section 390 with approval in defining negligent entrustment. See Ali, 145 S.W.3d at 562; Woodson, 916 S.W.2d at 907. We are also aware of a number of courts having expressly held that sellers of merchandise may be found liable for a negligent entrustment. Morin v. Moore, [309 F.3d 316, 324-25 (5th Cir. 2002)];Ireland v. Jefferson County Sheriff's Dep't, 193 F. Supp. 2d 1201, 1229 (D. Colo. 2002); Brown, 976 F. Supp. at 734-35;Flieger v. Barcia, 674 P.2d 299, 301 (Alaska 1983); Jacoves v. United Merch. Corp., 11 Cal. Rptr. 2d 468, 485 (1992);Kitchen v. K-Mart Corp., 697 So. 2d 1200, 1208 (Fla. 1997); Vince v. Wilson, 561 A.2d 103, 104 (Vt. 1989); Bernethy v. Walt Failor's, Inc., 653 P.2d 280, 283 (Wash. 1982). The Tennessee Court of Appeals has recently noted that while negligent entrustment claims typically involve a bailment, 'it is now widely agreed that the merchants may be considered to be suppliers of chattels.' Rains v. Bend of the River, 124 S.W.3d 580, 597 (Tenn. Ct. App. 2003) (concluding that Tennessee law would support a negligent entrustment claim against a seller of ammunition)." I d . at 555 (footnote omitted).
• "We agree with those decisions cited above. Cases to the contrary, such as Harkleroad, appear to misconstrue the basic premise underlying negligent entrustment by confusing it with the theory of vicarious liability. See, e.g., Broadwater v. Dorsey, 688 A.2d 436, 441 (Md. 1997) (holding that 'without the right to permit or prohibit the use of the chattel at the time of the accident, an individual cannot be liable for negligent entrustment'). This Court has recognized that negligent entrustment and vicarious liability are separate and distinct concepts. Ali, 145 S.W.3d at 564. Liability for negligent entrustment is founded upon the supplier's direct negligence in entrusting the chattel to an incompetent user. Vicarious liability, on the other hand, relies upon the supplier's right to control the chattel at the time the entrustee misuses it. See id. at 562-63; Mathis v. Stacy, 606 S.W.2d 290, 292 (Tenn. Ct. App. 1980); see also [Keeton, supra, § 104]. A negligent entrustment is committed at the moment when control of a chattel is relinquished by an entrustor to an incompetent user. Ali, 145 S.W.3d at 564 (citing Harper v. Churn, 83 S.W.3d 142, 146 (Tenn. Ct. App. 2001)). Control therefore need only exist at the time of the entrustment for a prima facie case of negligent entrustment." Id.
• "Based upon the foregoing, and construing the record in the light most favorable to the plaintiffs, we conclude that the plaintiffs have established a prima facie claim of negligent entrustment. However the plaintiffs' still bear the same burden at trial whether pursuing their theory of negligence or negligent entrustment. Both claims arise from the same facts, entail the same duty, and present the same factual issues to be resolved at trial regarding breach of duty, loss or injury, cause in fact, and proximate cause. We hold that a claim of negligent entrustment is applicable to this case and, therefore, the trial court erred in granting summary judgment in favor of the defendant. The judgment of the Court of Appeals on this issue is reversed.
  
  Id . at 555-56 (footnote omitted).

Recent Cases: Watrous v. Johnson , No. W2007-00814-COA-R3-CV, 2007 WL 4146289 (Tenn. Ct. App. Nov. 21, 2007) (reversing summary judgment finding that plaintiff has presented a prima facie case that defendants supplied their son with the essential means by which he operated the vehicle causing injury but leaving the question of whether defendants' actions were proximate cause of decedent's injury for the jury).