Verduzco v. American Valet (6/21/2016)

July 1, 2016

Arizona Court of Appeals Division One holds that valet parking services are not exempt from negligent entrustment claims under Arizona law.

An employee of a valet service operating at a Scottsdale resort gave the keys to a sports car to a man who was alleged to be visibly intoxicated, behaving erratically, and who failed to produce a claim ticket or any identification.   The man was not the owner of the sports car.  The man later crashed the sports car into an SUV, killing one passenger and seriously injuring four other passengers and the driver.  The victims sued the valet service, the employee, and the resort alleging various claims including negligent entrustment, general negligence, and wrongful death.  The defendants filed a motion to dismiss, which was granted by the trial court.  The victims appealed. 

The Court of Appeals affirmed in part and reversed in part.  To prove negligent entrustment of a vehicle, a plaintiff must show that the defendant owned or controlled a vehicle and gave the driver permission to operate the vehicle when the defendant knew or should have known that the driver was incompetent to drive safely.  Here, the Court concluded that the victims had adequately pleaded the elements of negligent entrustment based on their allegations that the valet service and its employee knew or should have known that the man was under the influence of drugs and unfit to drive because of his erratic behavior.

Next, the Court held that Arizona law should not exempt valet services from negligent entrustment claims.  Although some courts in other states had exempted valet services from liability associated with returning a vehicle to the vehicle’s owner, this case was different because the service allegedly knowingly gave the car to someone other than its owner.  Additionally, the Court concluded that the valet service had sufficient control of the vehicle for purposes of a negligent entrustment claim because it was undisputed that the valet service acted as a bailee, which Arizona law defines as having “sole custody and control” of property.  Finally, the Court concluded that the valet service’s status as a bailee rather than an owner of the vehicle did not excuse it from the general rule that one is liable for resulting physical harm to third parties when he or she supplies property to another person who is likely to use it in a manner involving unreasonable risk of physical harm. 

Judge Thumma authored the opinion of the court; Judges Portley and Gemmill concurred.