Cobra 4 Enters. v. Powell-Newman

The defendant was not liable for another company's actions on either alter ego or joint venture grounds, and there was no evidence supporting a theory of negligent entrustment, so the defendant was entitled to summary judgment.

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These consolidated cases arise from an automobile accident that injured Karen Powell-Newman. Danny Ayala was driving a truck leased to his employer Yellow Ribbon Tree Experts “Yellow Ribbon” at the time of the accident. Ayala was arrested and charged with various traffic violations. Powell-Newman and her husband Stephen Newman collectively “the Newmans” filed a complaint against Ayala, Yellow Ribbon, and Yellow Ribbon’s owner Gary Robertson, alleging negligence; negligent hiring, supervision, retention, and entrustment; and liability under a theory of respondeat superior. They also named as a defendant Cobra 4 Enterprises “Cobra 4″, another company owned by Robertson and the owner of the truck Ayala had been driving. Cobra 4 moved for summary judgment, arguing that it could not be held vicariously liable because it had no control over the truck at the time of the accident.1 It further argued that the fact that Robertson owned both Yellow Ribbon and Cobra 4 did not create liability. The trial court considered three bases for Cobra 4′s potential liability: as an alter ego of Yellow Ribbon; for engaging in a joint venture with Yellow Ribbon; and for negligently entrusting its truck to Yellow Ribbon. The trial court concluded that there was no evidence to support a joint venture because Cobra 4 did not have any right to control the conduct of Yellow Ribbon. The trial court found, however, that the evidence supported a claim of negligent entrustment and alter ego, and it denied summary judgment on these claims “the 2014 order”.

Thereafter, Robertson, Yellow Ribbon, Ayala, and their insurance company entered into a limited liability release “the Release” with the Newmans in which the Newmans accepted $131,506.12 for their claims against Robertson, Ayala, and Yellow Ribbon.

Cobra 4 Enters. v. Powell-Newman

The defendant was not liable for another company's actions on either alter ego or joint venture grounds, and there was no evidence supporting a theory of negligent entrustment, so the defendant was entitled to summary judgment.

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