Wednesday, January 20, 2021

Liability Comes with Loaning Your Car

Law Matters


 

The common law doctrine of dangerous instrumentality makes the owner of a dangerous instrumentality liable for injury resulting from someone else using the dangerous instrumentality. A dangerous instrumentality is something that by its nature is capable of causing great harm, such as explosive devices. The concept started with the employer and employee relationship or principal and agent where the employee or agent was entrusted with an item that could cause great harm and the item did cause harm. The principal was liable for injury caused by the employee or agent. 

Courts in the United States have offered varying rationales for the dangerous instrumentality doctrine. Driving the doctrine is an effort to protect the innocent party injured by the dangerous instrumentality. Some courts feel the owner of the dangerous instrumentality has a deeper pocket than the agent or servant and could more readily compensate the injured person. Others seem to believe placing liability on the owner would make the owner more vigilant and provide protection to innocent third parties. In any event, the doctrine came across the ocean from England as part of common law. 

Horses are not dangerous instrumentalities. Horse-drawn carriages are not dangerous instrumentalities and even a bucking stagecoach is not a dangerous instrumentality at common law. When motor vehicles began populating roadways, they were considered a continuation of previous methods of transportation and not considered dangerous instrumentalities. Increasing use of motor vehicles brought with it increasing injuries from motor vehicle accidents. Florida’s Supreme Court recognized that danger, and in 1920 they decided that the dangerous instrumentality doctrine applied to automobiles. Florida remains one of the few states applying the doctrine to motor vehicles. 

It may not be surprising that an employer would be responsible for injuries caused by an employee operating a vehicle owned by the employer. It can be quite a shock when someone borrows a car from a friend, has a traffic accident, and the car owner gets sued by the injured party.  

Liability is not limited to operation of vehicle on public roads, and over time, Florida courts have applied a broad brush when painting the definitions of a motor. The courts have confirmed that the vehicle must be motorized to be a dangerous instrumentality, which means trailers are excluded. 

What “motorized” vehicles fall within the dangerous instrumentality doctrine in Florida? Cars, trucks and buses all qualify. Florida courts have also ruled that golf carts, tractors and even airplanes are included. Road graders, motorized shopping carts and gokarts are excluded. 

There is some good news for those allowing others to use their cars. There are exceptions to liability under certain circumstances and there is even some statutory protection. Liability for a natural person who loans a motor vehicle to a permissive user is limited by statute to $100,000 per person$300,000 per incident for bodily injury, and $50,000 for property damage. However, if the permissive user is uninsured or has insurance with limits less than $500,000 combined property damage and bodily injury liability, the owner is liable for up to an additional $500,000 in economic damages. The additional liability is reduced by the amount actually recovered from the permissive user and any insurance covering the permissive user. 

The statutory protection is helpful, but leaves substantial liability on the owner. That should be an additional incentive to make sure one’s motor vehicle insurance policy has adequate limits. Additional protection can be found by limiting ownership of motor vehicles. A married couple should consider titling the vehicle used by each in the sole name of the primary user. Otherwise, if one of them gets in an accident, both owners are liable and that will expose their jointly owned assets to claims for damages. If a spouse gets in an accident driving a vehicle owned by the spouse alone, the other half of the couple generally has no liability. In case anyone is worried about getting title to the vehicle after a spouse dies, Florida statutes make it easy for a surviving spouse to get the title after their spouse dies. Hence, there is really no reason to title motor vehicles jointly in Florida. 

There are also exceptions to liability for common sense situations in which the owner of the vehicle really should not have liability. If you leave your car for repair or service, you do not have liability for damage caused when an employee of the repair shop operates the vehicle. There is a valet exception and an exception when vehicle is stolen. If the car is sold and is in an accident before being retitled, as long as the sale is concluded, the owner is not liable because the owner has no remaining beneficial interest in the vehicle. Even if permission is granted to use the vehicle, where the borrower engages in intentional misconduct, the owner will generally not be liable. This last exception may not be a complete insulation because lesser degree of wrongdoing will not qualify for the exception.  

Lending a car to a friend can open the door to unexpected liability. Proper insurance and titling of motor vehicles helps to limit exposure. This is one area of law where forewarned may be forearmed. 

William G. Morris is the principal of William G. Morris, P.A. William G. Morris and his firm have represented clients in Collier County for over 30 years. His practice includes litigation and divorce, business law, estate planning, associations and real estate. The information in this column is general in nature and not intended as legal advice.  

 


 

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