Under the negligent entrustment rule, owners who lend their property to unqualified drivers are liable for the damages that these individuals cause. Persons without valid driver’s licenses, or who drive in violation of an eyeglasses requirement or other listed drivers’ license conditions, are unqualified as a matter of law. People with bad driving records may be unqualified if the owner knows about the driving history.

But because of the Graves Amendment, the rules are a little different in commercial negligent entrustment cases, such as collisions that involve Ryder trucks or Enterprise rented cars.

Understanding 49 U.S.C. 30106

Before delving into the specifics of any piece of legislation, it’s important to examine the legislative history of that provision. Or, in this case of the Graves Amendment, the lack of such necessary background information.

Congressman Sam Graves (D-MO) attached this provision as an add-on to a huge omnibus transportation bill. As is the case with most such policy riders, Congress conducted no hearings on the Graves Amendment and the language itself is rather poorly crafted.

Based on what is known, the provision had absolutely nothing to do with roadway safety. Instead, it was designed to immunize rental car companies from large liability judgements. In other words, the Graves Amendment is corporate welfare plain and simple. Furthermore, the holes in the law give attorneys the tools they need to bypass the Graves Amendment and hold these companies responsible for the damages that they callously cause.

The “Trade or Business” Requirement

Subsection (a)(1) states that, for immunity to apply, the owner or agent must be in the “trade or business” of renting vehicles. The law does not define this essential phrase. However, the Uniform Commercial Code, which Florida lawmakers have specifically adopted, defines “merchant,” which is a similar term.

In UCC 2-104, a merchant is “a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction.” This definition does not apply to most companies that rent moving trucks.

Most such firms are moving service companies which happen to have a few trucks on the parking lot. They are not vehicle rental establishments. Moreover, the owners and employees of these companies usually have no specialized knowledge about the vehicles they rent, beyond basic starting and stopping operations.

The “Not Otherwise Negligent” Requirement

This requirement is in section (a)(2). At the time lawmakers approved the Graves Amendment, almost no vehicle rental companies verified drivers’ licenses beyond a visual inspection. The owner had no way to check the renter’s driving record or even verify that the license was indeed valid.

These tools are now widely available and easy to use. Therefore, it is becoming the industry standard to run thorough drivers’ license checks on potential vehicle rentals. The failure to run such a check is arguably negligence, and as such, the Graves Amendment immunity does not apply in these transactions.

Rely on Experienced Attorneys

Despite the Graves Amendment, vehicle rental companies may be vicariously liable for car crash damages. For a free consultation with an experienced personal injury lawyer in Brandon, contact Reed & Reed. We have four area offices (St. Petersburg, Lakeland, Tampa, and Clearwater).