Jeffrey P. Gale, P.A. // Motor Vehicle Rental Agencies Evade Vicarious Liability Under the Dangerous Instrumentality Doctrine

Companies make billions of dollars leasing and renting motor vehicles. One might expect that with such profits would come a corresponding responsibility to compensate innocent people injured through the negligent operation of those vehicles. They don’t.

The Florida Legislature once believed they should. It may still believe so, but its will has been overridden by federal law.

Section 324.021(9), Florida Statutes, requires rental and leasing companies to maintain substantial minimum liability insurance on vehicles operated in this state. But that requirement has been superseded by 49 U.S.C. § 30106 – the Graves Amendment – enacted in 2005.

Notably, the Graves Amendment appears to preserve state “financial responsibility” laws. Section 30106(b) provides:

“(b) Financial Responsibility Laws.—Nothing in this section supersedes the law of any State … (2) imposing liability on business entities engaged in the trade or business of renting or leasing motor vehicles for failure to meet the financial responsibility or liability insurance requirements under State law.”

Despite this language, the Florida Supreme Court held that § 324.021(9) is not a financial responsibility law. Rosado v. DaimlerChrysler Financial Services Trust, 112 So. 3d 1165 (Fla. 2013). As a result, rental and leasing companies have no obligation to maintain liability insurance on their vehicles.

Two lessons emerge.

First, We the People should not assume that state and federal governments always act in our best interests. Sometimes profits win out over people. The Graves Amendment is a prime example: it was designed to shield rental and leasing companies’ profits, leaving injured individuals without the insurance protections the Florida Legislature intended.

Second, at least in Florida, individuals do have a way to protect themselves against uninsured or underinsured drivers: uninsured/underinsured motorist (UM/UIM) coverage. The contours of UM/UIM coverage are set out in § 627.727, Florida Statutes. In short, vehicle owners can purchase this coverage to protect themselves and their families from irresponsible vehicle owners and operators.

Here is a real life example of how the Graves Amendment harms innocent people: We were contacted by a young woman who lost her leg in a horrific crash near Hard Rock Stadium. Her car had broken down. A friend came to help and parked behind her disabled vehicle. As she stood between the two cars, another vehicle slammed into the friend’s car, crushing her between the bumpers.

The at-fault vehicle was under a long-term lease – the type of lease addressed in § 324.021. But because the lessee failed to maintain the insurance required by that statute, and because the Graves Amendment prevents the lessor from being held responsible, only $10,000 in liability coverage was available for her catastrophic injuries. We could not help her.

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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.

While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.

DISCLAIMER: This information provided by Jeffrey P. Gale, P.A. is for informational purposes only and is intended to be used as a non-legal guide prior to consultation with an attorney familiar with your specific legal situation. It should not be considered legal advice or counseling. No such legal advice or counseling is either expressly or impliedly intended. This information is not a substitute for the advice or counsel of an attorney. If you require legal advice, you should seek the services of an attorney.