Normally, owners are liable for damages in these situations. The negligent entrustment rule applies if owners knowingly allow incompetent operators to drive their vehicles. People without valid drivers’ licenses are typically incompetent as a matter of law. Other evidence on this point includes a poor overall driving record and prior safety suspensions.
However, the negligent entrustment rule does not always apply in U-Haul and other commercial vehicle rental claims, because of the Graves Amendment. This federal law limits third-party liability in many of these situations. That being said, there are some holes in the Graves Amendment, which are outlined below.
So, the only honest response to this question is “maybe.” Once a Lexington car accident lawyer reviews the facts of your case, including the underlying rental transaction, that “maybe” becomes a more definitive answer. If your claim is valid, the available compensation could be substantial.
Graves Amendment Background
In the early 2000s, juries in several states issued large verdicts against Enterprise and some other vehicle rental companies, based on the aforementioned negligent entrustment doctrine. These verdicts included a multi-million dollar judgement in Connecticut following a rear-end, fireball wreck caused by a negligent Enterprise driver.
In response, these companies threatened to pull out of states with strong negligent entrustment laws on the books. These states include Kentucky.
So, Missouri Congressman Sam Graves added a policy rider to a large omnibus transportation bill. The policy rider which bears his name protects vehicle rental companies from liability lawsuits. At least that’s what it was supposed to do.
Like many other add-ons, the Graves Amendment is poorly drafted. Additionally, aside from a brief floor debate, there is no legislative history supporting this provision. These general weaknesses make it easier to exploit the Graves Amendment’s specific weaknesses, so victims can obtain proper compensation for their injuries.
This compensation usually includes money for economic losses, such as medical bills, and noneconomic losses, such as pain and suffering.
Not Otherwise Negligent
Immunity applies if the owner or agent was not otherwise negligent during the transaction. Typically, this negligence involves the failure to verify a drivers’ license. As mentioned, negligent entrustment liability only applies if the owner knew the driver was incompetent.
In the early 2000s, visual inspections were the only way for vehicle rental outlets to quickly and cheaply verify drivers’ licenses. Therefore, if the license was facially valid, the transaction could proceed. That visual inspection satisfied the owner’s duty.
Technology has advanced by leaps and bounds since then. Portable smart devices, like tablets and smartphones, are a great example. Now, it is rather easy and cheap to use the internet and verify a drivers’ license through the state’s DMV. As a result, such verifications are arguably the industry standard during such transactions.
Violating an industry standard is evidence of negligence. So, rental agencies who take shortcuts often lose Graves Amendment immunity.
Trade or Business
Additionally, immunity only applies if the owner or agent was in the trade or business of renting motor vehicles. The poorly-drafted Graves Amendment does not define this key phrase. So, attorneys must look elsewhere to determine its definition.
The Uniform Commercial Code, which lawyers use frequently, defines “merchant,” which is a similar concept, in Section 2-104. According to the UCC, a merchant is someone who:
- Deals in a particular kind of good, and
- Has special knowledge about a product.
Most vehicle rental establishments do not fit either of these elements.
“Particular kind” means most of the store’s sales come from a certain item. Many hardware stores sell candy and snacks at the counter. Nevertheless, they are still hardware stores. They are not candy stores.
Similarly, many U-Haul truck rental establishments are moving supply or storage companies. They might have a few trucks available, but that does not make the vehicle rental establishments. They are still moving supply companies.
Additionally, most U-Haul employees know nothing about the trucks available, aside from basic operation.That hardly qualifies as specialized knowledge.
It’s usually important to establish third-party liability in U-Haul truck wreck claims. Many of these drivers have little or no insurance. And, due to the sheer size of these trucks, victims often sustain catastrophic injuries.
The Graves Amendment usually does not preclude damage claims. For a free consultation with an experienced truck accident lawyer in Lexington, contact the Goode Law Office, PLLC. We do not charge upfront legal fees in personal injury cases.