Negligent Entrustment
The definition of “negligent entrustment” hails from the Restatement (Second) of Torts § 308, “it is negligence to permit a third person to use a thing or to engage in an activity which is under the control of the actor, if the actor knows or should know that such person intends or is likely to use the thing or to conduct himself in the activity in such a manner as to create an unreasonable risk of harm to others.” Section 390 adds to our knowledge: 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.
The two Restatement sections differ in one important way. “While § 308 requires proof that the supplier of the chattel ‘knows or should know’ that the user is likely to use the thing in a manner creating an unreasonable risk of harm, § 390 sets a higher standard for a finding of liability, requiring proof that the supplier of the chattel ‘knows or has reason to know’ of the risk. A standard of ‘should know’ creates a duty to use reasonable diligence to ascertain the existence or non-existence of the fact in question, whereas a standard of ‘reason to know’ does not impose any obligation to ascertain unknown facts.” Liebelt v. Bob Penkus Volvo-Mazda, Inc., 961 P.2d 1147, 1149 (Colo. App. 1998) (citing Restatement (Second) of Torts §§12, 401 (1965)).
A typical example is one where an employer is liable for negligently entrusting a vehicle to an employee. Note that if a plaintiff is successful on a vicarious liability claim under respondeat superior, or if the employer admits liability, then the plaintiff is barred from also bringing direct negligence claims against the employer. This includes negligent entrustment or negligent hiring/supervision, etc. Why? Once the employer admits its liability under the theory of respondeat superior, a cause of action for negligent entrustment (by example) would be duplicative and unnecessary. It would only serve to double penalize the employer and produce a windfall for the plaintiff.
If you are interested in more on negligent entrustment, click here and here.
💡If you are representing a business client that comes to you because it was served a complaint due to a car accident that its employee caused, what advice do you give? What if it was found that the employee failed a sobriety test given at the time of the accident? What are your steps?
