Unpublished Disposition, 931 F.2d 60 (9th Cir. 1985)

MEMORANDUM^* 

The Hernandez family filed a diversity action against Robert Wright and Fuller's White Mountain Motors, Inc. (collectively, "Fullers") in federal district court seeking to recover on a claim of negligent entrustment under Arizona common law. The district court granted Fullers' motion for summary judgment, holding that the Hernandezes had failed to demonstrate that Fullers was aware of the purchaser's incompetence. The district court also declined to certify the liability question to the Arizona Supreme Court. The Hernandezes appeal the grant of summary judgment and, alternatively, request that we certify the liability issue to the Arizona Supreme Court. We affirm.

DISCUSSION

The Hernandezes concede that Fullers was unaware of Mr. DeClay's alcoholism and that, other than his lack of a license, nothing that happened during the negotiation of the car sale betokened Mr. DeClay's unfitness to drive. The Hernandezes contend nonetheless that, upon learning that Mr. DeClay did not have a driver's license, Fullers had a duty to inquire further into his competence as a driver. The Hernandezes premise this argument on the Restatement (Second) of Torts Sec. 390 (1965), which provides:

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 Arizona Supreme Court adopted section 390 as a basis for liability in Brannigan v. Raybuck, 136 Ariz. 513, 516, 667 P.2d 213, 216 (1983) (en banc). The Hernandezes contend that, upon learning that Mr. DeClay lacked a license, Fullers had "reason to know" of his incompetence to operate a motor vehicle. At a minimum, they argue, Fullers had a duty to inquire into the reason Mr. DeClay had no license.

In rejecting this argument, the district court relied on two Arizona cases predating Brannigan but expressly holding that "the lack of such [driver's] license would be no evidence whatever that [the defendant] was not a capable, skilled, and safe driver." Lutfy v. Lockhart, 37 Ariz. 488, 493, 295 P. 975, 977 (1931). See also Christy v. Baker, 7 Ariz.App. 354, 357-58, 439 P.2d 517, 520 (Ariz.Ct.App.1968) (following Lutfy, court notes that " [t]he accident would have occurred whether or not [the driver] had a valid driver's license in his possession"). Accord Mutz v. Lucero, 90 Ariz. 38, 41, 365 P.2d 49, 51 (1961) (en banc) (failure to possess driver's license is not, standing alone, evidence of negligence in automobile operation).

Although conceding that these cases have been neither overruled nor expressly disparaged in any way by subsequent opinions, the Hernandezes nonetheless invite us to disregard these precedents. The Hernandezes argue that the trend of authority in Arizona tort law points towards imposing a stricter duty of inquiry on automobile dealerships. They cite a recent case from the California Court of Appeal as evidence of this evolution in the law. In Roland v. Golden Bay Chevrolet, 207 Cal. Rptr. 413, 417-18 (Cal.Ct.App.1984), hearing granted (Jan. 30, 1985), dismissed as moot (July 18, 1985), the Court of Appeal held that knowledge that an automobile purchaser lacked a license imposed upon the seller a duty to inquire further into that person's competency as a driver. The Hernandezes posit, lastly, that Arizona's adoption of Restatement Sec. 390 in 1983 indicated that the Arizona courts would no longer adhere to Lutfy and Christy, but rather would follow California's lead and expand the duty to inquire.

The district court did not err in its interpretation of Arizona law. A federal court sitting in diversity jurisdiction should "interpret and apply state law as it now is," not as it might become. Cantwell v. University of Massachusetts, 551 F.2d 879, 880 (1st Cir. 1977) (enforcing claim of sovereign immunity despite argument that the Supreme Judicial Court would abrogate it).

Current Arizona law insists that knowledge that an automobile purchaser is unlicensed, without more, will not result in liability for negligent entrustment. Lutfy, 37 Ariz. at 493, 295 P. at 977; Christy, 7 Ariz.App. at 357-58, 439 P.2d at 520. These decisions have not been overruled. Nor can the Hernandezes point to any language in subsequent opinions rejecting these cases' reasoning or casting doubt upon their continued validity.

Arguments may be made both in favor of and against expanding liability in this manner. Ultimately it involves a policy choice and a balance of social costs. The Arizona Supreme Court may ultimately conclude that negligent entrustment liability should extend to this type of claim. But it has not done so yet, and "it is not for us to make up its mind for it." Cantwell, 551 F.2d at 880.

The Hernandezes alternatively argue that the district court abused its discretion in failing to certify the liability issue to the Arizona Supreme Court. They request that we order certification ourselves.

The district court did not abuse its discretion by declining certification. Nor are we inclined to order it. Certification is appropriate to discover what the law is, not whether the state supreme court still means what it said in an earlier opinion. See Cantwell, 551 F.2d at 880 (certification will not "permit a party to seek to persuade the state court to change what appears to be present law").

CONCLUSION

No factual issues precluded the entry of summary judgment and the district court correctly applied current Arizona law. Moreover, the district court did not abuse its discretion by not certifying the state law question to the Arizona Supreme Court. The state of the law is not unknown; binding precedent is available to be applied. The judgment of the district court is

AFFIRMED.