Fourth District finds that automobile dealerships that loan vehicles to customers are protected from vicarious liability under Graves Amendment

Posted in Newsletters - 2019 on August 1, 2019

Yesterday, the Fourth District Court of Appeal issued an important opinion relating to the Graves Amendment, finding that it applies to automobile dealerships that loan vehicles to their customers who have their cars in for service. In Collins v. Auto Partners LLC, Case No. 4D18-1855 (Fla. 4th DCA, July 31, 2019), the appellate court affirmed summary judgment in favor of the dealership in a case in which one of its employees was driving a loaner vehicle at the time he collided with the Plaintiff. The employee did not pay for the “loaner”, and the testimony was undisputed that the employee was treated as any customer who brought in a vehicle for repair or maintenance. Although the dealership was unable to produce a “rental” agreement signed by the employee before he was provided the vehicle, and the Plaintiff argued that this raised a genuine issue of material fact precluding summary judgment, the trial and appellate courts disagreed, finding the absence of an executed agreement was of no moment because the Graves Amendment did not require a written agreement in the first instance. Since it was undisputed that 1) the dealership was engaged in the business of renting or leasing motor vehicles and 2) there was no negligence on the part of the dealership, the two requirements set forth in the Graves Amendment (49 U.S.C. Sec. 30106 (a)), the Fourth District affirmed summary judgment in the dealership’s favor, holding that the Graves Amendment provides that if the defendant satisfies the foregoing requirements, the defendant is not deemed to be the owner of the vehicle for purposes of vicarious liability.    
Although the Court’s ruling on the Graves Amendment was dispositive of the defendant’s liability, the Court also noted that under Florida Statute 324.021, which provides statutory caps on a lessor’s liability for damages caused by a negligent lessee driver, would have applied to cap the dealership’s liability if the Graves Amendment did not. However, since the Graves Amendment applied in this case and preempts Section 324.021, however, the Court affirmed the judgment in the dealership’s favor.
The case was handled on summary judgment by appellate partner Hinda Klein and on appeal, by Ms. Klein and associate Sam Spinner.