Florida’s Dangerous Instrumentality Doctrine and the Graves Amendment (or the “Federal Car Rental Business Relief” Act )

March 21, 2011

As I discussed in an earlier post, motor vehicles have previously been deemed to be a “dangerous instrumentality” by numerous previous rulings of the Florida courts. As as result, I issued the warning that private automobile owners must be particularly careful when entrusting their vehicle to another driver, in that the owner can be held liable for any injuries caused to third parties by the negligence of the permissive driver.

Until recently, the Courts applied the same principle to car rental businesses which leased vehicles to the public. see: Susco Car Rental System v. Leonard, 112 So. 2d 832 ( Fla 1959).In more recent times, the Florida Legislature placed a monetary cap on the liability of businesses which offered short-term ( less than one year) car leases to $100,000 per person and $300,000 per incident. Property damage liability was also limited to $50,000.See: Florida Statute 324.021(9)(b).

No doubt as a result of extensive lobbying efforts by Avis, Hertz, Enterprise and others in Washington, D.C., Congress passed the Graves Amendment in 2005, which overruled (or preempted) all state laws which addressed the potential vicarious liability of car rental businesses. While there have been numerous attempts by Florida plaintiffs’ attorneys to convince the Courts to at least narrow the application of the Graves Amendment, in Florida, and throughout the United States, vicarious liability of auto rental companies for damages caused by the negligent operation of their vehicles has been abolished.

Is this a good thing or a bad thing? Obviously it depends upon one’s perspective. To the rental car business, the Graves Amendment has removed a huge source of potential liability. I can only assume that prior to the passage of this law, such companies included the financial cost of such exposure in the price of the rental agreement. Liberated from such liability, one would logically assume that Avis, Hertz and the others would therefore be able to reduce their rates. Don’t bet on it. The only rates that have probably been lowered are the lobbying costs spent in Congress.

In order to protect the public, I would propose that no driver should be able to rent a vehicle unless they maintain the same $100,000 / $300,000 liability coverage that was previously imposed upon the car rental businesses by Florida law. Don’t expect the same lobbyists to line up behind that proposal. Bad for business, don’t you know. Much worse for citizens in St. Petersburg and the surrounding Tampa Bay area who injured by a negligent driver in a rental vehicle who have been wronged but may no longer have a proper remedy.

Absent an unanticipated dramatic reversal in the Federal law, I can only stress once again that in Florida, please carry as much uninsured/underinsured motorist coverage as you can afford. Should you have any questions about these or any other auto coverage issues, please feel free to contact me at the Heyman Law Firm, PA either at 727-822-3700 or through this website.