What is the accident liability of car leasing companies?

Under New York law, a vehicle owner may liable for car accidents involving the vehicle even if the owner was not driving the vehicle at the time of the crash. The owner who rents or leases the vehicle may be held responsible if expressed or permission was given to the driver to operate the vehicle and if the car accident occurred in a state that allows these vicarious liability lawsuits.

Federal law, known as the Graves Amendment, prohibits this liability. The vehicle’s owner, or one of its affiliates, is not liable under this law if it is engaged in the business of renting or leasing motor vehicles and the owner or its affiliate committed no crime or negligent acts. The law addressed the concern with commercial rental and leasing companies having no choice with who rents the vehicle and whether the vehicle is driven into a state that has a vicarious liability law.

Many federal courts in New York also held that the Graves Amendment preempts this state’s vicarious liability law. The federal court, however, found that the law is not unambiguous.

For example, determining what constitutes an affiliate covered by this law may be confusing. A federal court ruled on a lawsuit involving a woman who was struck by a truck as she sat in her disabled car on a New York interstate. The truck driver was watching pornographic films on a laptop in his truck cab at the time of the crash and was later convicted of second degree manslaughter.

The victim’s family filed a lawsuit against the truck driver, his employer, the company that leased the truck to his employer and the company that owned the employer and leasing company. The federal court found that the truck’s owner, which leased the truck to the driver, could be held liable.

As opposed to other rental companies, according to the court, the leasing company defendant is not required to lease its vehicles to all qualified customers. The court also ruled that the Graves Amendment requires the vehicle’s owner and the employer to be free from negligence to avoid liability.

This case demonstrates that determining liability and seeking compensation for auto accidents may be complex. Prompt legal assistance may help victims and their families determine liability and obtain just compensation for losses and serious injuries.

Source: Stratton v. Wallace, 11-CV-74-A (W.D. N.Y. Aug. 1, 2014)