Oliverio v. Transdev Services, Inc.

Ralph Oliverio (plaintiff) was struck and seriously injured by a Yellow Cab taxicab in San Francisco. Oliverio sued Yellow Cab and won a judgment. However, because Yellow Cab did not carry the city-mandated minimum liability insurance, it did not pay Oliverio’s judgment, and it later filed for bankruptcy, leaving the judgment unsatisfied. Oliverio then sued Transdev Services, Inc. (Transdev) (defendant), alleging that its failure to monitor and enforce Yellow Cab’s compliance with the mandated insurance minimum constituted a breach of Transdev’s paratransit agreement with the City of San Francisco. The paratransit program was designed to provide transportation services to the city’s elderly and disabled citizens. Under the terms of the paratransit agreement, Transdev administered all aspects of the program, including subcontracting with transport-service providers (TSPs), including Yellow Cab. The agreement also obliged Transdev to monitor and enforce the TSPs’ performance, including their compliance with regulations requiring taxicab companies to maintain the mandated minimum liability-insurance coverage. The agreement also indemnified the city’s transportation agency for injuries caused by a provider engaged in providing paratransit services. Oliverio alleged that Transdev’s breach was the proximate cause of Yellow Cab’s inability to satisfy Oliverio’s personal-injury judgment, and that Oliverio was an intended third-party beneficiary of the paratransit agreement. The trial court sustained Transdev’s demurrer and dismissed Oliverio’s claims. Oliverio appealed.