Car Wrecks and Rented Moving Trucks

by | Feb 24, 2022 | Car Accidents, Injuries

A fully loaded, 26-foot U-Haul moving truck weighs over 25,000 pounds. Usually, drivers have little or no experience operating such large vehicles. Additionally, and perhaps more importantly, they often have little or no insurance. Personal auto insurance policies rarely cover such wrecks.

Usually, if a tortfeasor (negligent driver) borrows another person’s car and the tortfesor causes a wreck, the owner is liable for damages, if s/he knew the tortfeasor was incompetent. Proof of incompetency includes no drivers’ license, a safety-suspended license, or a poor driving record that includes recent at-fault collisions.

However, an obscure provision of federal law, 49 USC 30106, limits negligent entrustment liability in these situations. However, as outlined below, this law contains some loopholes. In many cases, these loopholes are almost large enough for a Lexington personal injury attorney to drive a U-Haul truck through.

What is the Graves Amendment?

In the early 2000s, juries in several states returned large negligent entrustment judgments against Enterprise and several other large rental car companies. In response, these companies threatened to stop doing business in these states. One of these states was Missouri, the home of Democrat Rep. Sam Graves. 

So, in 2005, Graves added the amendment which bears his name to a large omnibus transportation bill. His stated intent was to shield vehicle rental companies from liability judgements. Lawmakers frequently attach such measures to must-pass omnibus bills. They know their fellow lawmakers will support these provisions.

Once he realized the amendment’s effect on car crash victims, Graves made some efforts to repeal this provision. But it was too late.

The effect is simple. Car crash victims need money to pay medical bills and generally put their shattered lives back together. If the tortfeasor is uninsured, these victims usually have no options, unless they have uninsured/underinsured motorist coverage. Negligent entrustment is often the only way these victims can obtain compensation for their economic losses, such as medical bills, and noneconomic losses, such as pain and suffering.

Rep. Graves apparently thought the Graves Amendment was a blanket immunity provision for all vehicle rental companies in all situations. Fortunately for these victims, this assessment was incorrect. There are two big holes in the Graves Amendment itself.

Not Otherwise Negligent Requirement

Negligent entrustment liability only applies if the company was not negligent during the rental transaction. This potential negligence usually involves drivers’ license confirmation.

In the early 2000s, visual inspection was the only way to verify a drivers’ license. The vendoro couldn’t determine if the license was actually valid. Furthermore, there was no easy way to pull a driving record. Even if a technique was available, there was no way to evaluate these records.

Now, things are different. U-Haul establishments and other such companies can easily run drivers’ licenses and verify their validity. Arguably, such verification checks are the industry standard. Companies that violate the industry standard are presumably negligent. 

Additionally, courts have developed a standard driving record evaluation in these situations. Usually, if the renter had a safety-suspended drivers’ license, the renter is incompetent as a matter of law. A recent safety suspension is a strong presumption of incompetence. A poor driving record doesn’t prove incompetence. But it does oblige the owner to ask additional questions, such as the renter’s experience in driving a certain type of vehicle, before the contract is finalized.

Trade or Business Requirement

Additionally, Graves Amendment immunity only applies if the company was in the trade or business of renting motor vehicles.

Like many policy riders, the Graves Amendment is very brief. It does not define terms, like “trade or business.” Additionally, there is no legislative history in support of the amendment, except for a brief floor debate.

In these situations, a Lexington personal injury attorney must look elsewhere to define key terms. The Uniform Commercial Code, which provides legal contract interpretations, defines “merchant,” which is a similar term. According to Section 2-104, a merchant deals in goods of a particular kind and has special knowledge about these goods.

Most U-Haul rental places are not dealers in kind. They don’t exclusively rent trucks. Instead, they are moving companies that rent trucks on the side. Many hardware stores sell candy on the side. But that fact doesn’t make them candy stores. They are still hardware stores.

The special knowledge provision usually does not apply either. Typically, U-Haul employees have no special knowledge about the vehicles they rent. For example, they can tell renters how to start these trucks. But employees know nothing about the engine’s design or mechanical specifics.

Injury victims are usually entitled to substantial compensation. For a free consultation with an experienced personal injury lawyer in Lexington, contact the Goode Law Office, PLLC. You have a limited amount of time to act. #goodelawyers