To establish a claim of Negligent Entrustment of Motor Vehicle, plaintiff must prove all of the following:

1. That the driver was negligent in operating the vehicle;
2. That the defendant owned the vehicle operated by the driver, or had possession of the vehicle operated by driver and the the driver had the owner's permission;
3. That the defendant knew, or should have known, that the driver was incompetent or unfit to drive the vehicle;
4. That the defendant permitted the driver to drive the vehicle; and
5. That the driver’s incompetence or unfitness to drive was a substantial factor in causing harm to the plaintiff.

(Flores v. Enterprise Rent-A-Car Co. (2010) 188 Cal.App.4th 1055, 1063; see also Jeld–Wen, Inc. v. Super. Ct. (2005) 131 Cal.App.4th 853, 863, citing CACI No. 724.)

“In Osborn v. Hertz Corp. (1988) 205 Cal. App. 3d 703, the court held that:

1. a rental car agency is not liable for negligent entrustment when it rents a car to a validly licensed driver who shows no sign of unfitness to drive (Id. at 713);
2. an agency has no duty to inquire into the driving record of the renter by asking a series of questions concerning, inter alia, whether the renter has previously been convicted of driving under the influence (Id. at 710); and
3. absent a legislative declaration that persons convicted of driving under the influence or whose license was previously revoked or suspended are ineligible to rent a vehicle, the rental agency is entitled to rely on the renter's presentation of a valid driver's license as sufficient evidence of fitness to drive (Id. at 711).”

(Flores, supra, 188 Cal.App.4th at 1059.)

“We conclude that the rationale of Osborn remains persuasive, and, further, that the subsequent passage of Vehicle Code section 14604[1] and the decision of the California Supreme Court in Philadelphia Indemnity Ins. Co. v. Montes-Harris (2006) 40 Cal. 4th 151 demonstrate that rental car companies have no duty to conduct an electronic search of the driving records of their customers before entrusting a vehicle to them.” (Flores at 1059.) “Rather, as a matter of law, a rental car agency is not liable for negligent entrustment where the agency has fully complied with the requirements of sections 14604 and 14608, and the customer does not appear impaired or otherwise unfit to drive at the time of rental.” (Id.)

Private Sellers of Motor Vehicles

In Krawtiz, the trial court sustained a demurrer to an injured plaintiff's third amended complaint against a private seller who sold an automobile without seatbelts, and dismissed the complaint. (Krawitz v. Rusch (1989) 209 Cal.App.3d 957 961-962.) The private seller had sold the automobile with knowledge that the purchaser's daughter, an inexperienced driver, would be using the automobile. (Id.) The daughter was involved in an accident in which plaintiff, a passenger, was severely injured. (Id.) In relevant part, the Court of Appeal affirmed the lower court’s decision and held that that the complaint did not state a cause of action for negligent entrustment since the complaint did not allege that the private seller knew that the daughter was an incompetent driver. (Id. at 966-67.) Notably, the Court of Appeal stated that inexperience did not necessarily indicate incompetency. (Id.)