On March 14, 2005, Sharon Shipley, the owner of a catering business, was leaving her business in Sunnyvale, and backing her 2004 Lincoln Navigator out the driveway. A truck owned and operated by International Moving Company was parked in front of Shipley's driveway, and was partially blocking it. Colleen, who worked for the catering business, was attempting to assist Shipley, by giving verbal and hand cues to Shipley to guide her out of the blocked driveway. Shipley began to back the vehicle out, when Shipley's foot slid off the brake pedal and onto the gas pedal of her SUV, causing the vehicle to suddenly accelerate in reverse. Shipley's vehicle crushed Colleen's forearm against the parked truck, nearly severing Colleen's arm during the impact. As a result, Colleen sustained severe injuries, including numerous fractures.
Plaintiff's counsel argued that in addition to Shipley being responsible for her negligence, International Moving Co. was responsible for the truck being parked such that it partially blocked the driveway. If International had not left the truck so as to block the driveway, there would have been no need for Colleen to attempt to direct Shipley in backing out of the driveway. Yamato Transport USA, Inc. is an international transport company that hired International Moving Co. to deliver its packages at the time of the incident. Yamato Transport argued that it could not be held liable for the incident since it hired an independent contractor to do the deliveries, and was not responsible for International Moving Co.'s negligent acts.
Plaintiff argued that the Restatement of Torts Section 428 placed liability on Yamato Transport because it was a corporation carrying on an activity which can be lawfully carried on only under a franchise granted by public authority, and which involves an unreasonable risk of harm to others. Yamato was therefore subject to liability for physical harm caused to Colleen because of the negligence of its contractor. Yamato's business was regulated by the State of California. The business constituted an activity which, if negligently performed, could lead to serious injury or death.
At trial, it was determined that as the hirer of International Moving Co., Yamato Transport was 5% liable for the negligent acts of its contractor that caused injury to Colleen. International Moving Co. was also determined to be 5% liable for plaintiff's injuries. Sharon Shipley was found to be 90% liable. The judge awarded Colleen $25,750,666 in damages.