Florida Supreme Court: No Accident Liability for Owner Who Leased Car – Rosado v. DaimlerChrysler Financial Services Trust

As we have mentioned in previous blog posts, it’s not just a negligent driver who may be responsible for a Florida car accident. There may also be liability for the car’s owner and the driver’s employer, for example. In Rosado v. DaimlerChrysler Financial Services Trust, the Florida Supreme Court explains that liability normally does not extend to an owner who leases the vehicle to another person or entity.

In January 2003, a Virginia law firm leased a car from a company that later assigned its interest in the vehicle to DaimlerChrysler Financial Services Trust. Under the terms of the lease, the firm was required obtain a minimum amount of insurance coverage for injury and damage. Although the firm obtained the necessary coverage, its insurance policy on the car later lapsed for non-payment in June 2003.

Terrell Parham, a firm employee who was authorized to use the car, was driving the vehicle in Florida when he crossed a median and collided with a car driven by Alejandro Rosado. The accident happened one day after the insurance policy lapsed.

Rosado sued the law firm, Parham and DaimlerChrysler. Proceeding under the dangerous instrumentality doctrine, he alleged that the company was vicariously liable for Parham’s negligence because it violated state law by allowing the insurance to lapse. The doctrine imposes strict vicarious liability on the owner of a motor vehicle who voluntarily entrusts the car to an individual whose negligent operation causes damage to another.

A trial court granted DaimlerChrysler’s motion for summary judgment, ruling that the company was shielded from liability under the state’s so-called “Graves Amendment.” The Amendment states that a car owner who leases the vehicle is not vicariously liable for harm that results from the use, operation or possession of the car during the term of the lease. The Second District Court of Appeals affirmed the decision, holding that the Amendment preempts a Florida statute providing that a lessor is a car’s owner for liability purposes if the lessee fails to obtain certain minimal insurance coverage.

The State’s highest court agreed on further appeal. Generally, “[a] long-term lessor in Florida is by default the owner of the leased vehicle and, as a result of its status as owner…” the court explained. However, the Graves Amendment expressly precludes liability for the “owner” of a car who leases it, according to the court.

The firm’s failure to keep adequate insurance coverage on the car did not change this analysis. “In Florida, a lessor’s financial responsibility for the negligence of a lessee flows from its status as the owner of the vehicle and Florida’s dangerous instrumentality doctrine, not from the lessor’s failure to purchase insurance,” the court explained.

Liability is one of the many important legal issues that may arise following a car accident in Florida. If you or someone you love has been injured in a car accident, contact the South Florida car accident attorneys at Anidjar & Levine. We serve clients throughout the region, including in Ft. Lauderdale, Hialeah and Pompano Beach. Call us toll-free at 800-747-3733 or fill out and submit an online Contact Us form to schedule a free consultation.

Related blog posts:

Court Defends Right to Lawyer in Florida Car Accident Cases – Howard v. Palmer

Court Takes on Co-Owner Liability in Florida Car Accident Case – Ortiz v. Regalado

Court Upholds $150,000 Jury Award in Florida Rear-End Car Accident Case – Costa v. Aberle