According to the US Census, nearly three million leased new and used vehicles are currently on our roads. In fact, in South Florida 60% of cars and trucks are leased rather than purchased. Leasing is just a fancy word for renting a car. Commonly, vehicles are leased from the financial servicing divisions of major auto manufacturers like Toyota, Honda, Dodge and Ford. Leasing is nothing more than a long-term rental agreement. During a lease period, the financing company maintains legal title to the car. At the end of a lease, the person who used the vehicle returns it to the company.
Florida’s Supreme Court recently ruled in favor of these corporate giants at the expense of the injured in the case of Rosado v. Daimler Chrysler. This decision is so strong it should prompt both leasing companies and the rental car industry to send a thank you card and a dozen roses to a few justices. Their opinion clarifies and fortifies a leasing company’s’ corporate insulation from legal responsibility to people injured or killed by someone driving one of their vehicles.
Under Florida law, cars and trucks are characterized as “dangerous instrumentalities.” Because motor vehicles are so dangerous, vehicle owners in Florida are legally and financially responsible for a Florida traffic accident that results in an injury or death caused by the operation of a vehicle they own, regardless of who is driving.
In 2005, the United States Congress enacted the Graves Amendment. It insulates the rental car and leasing industry from being sued when one of their leased or rented vehicles causes a traffic accident. The amendment was named after Missouri Congressman Sam Graves and was stuffed into a broader piece of transportation legislation signed by President George W. Bush. Arguably, this conflicts with Florida’s Dangerous Instrumentality law.
On January 15, 2003, a Virginia law firm leased a car from Daimler Chrysler Financial Services. The four-year-lease required the law firm to maintain at least $100,000 of bodily injury insurance per person and $300,000 per accident.
When Terrell Parham drove the car to Florida with the firm’s permission, he crossed over the median of a Florida highway and crashed into a car driven by Alejandro Rosado. Just one day before the crash, the insurance on the leased car had lapsed. Rosado was seriously injured from the traffic accident and sued Parham, the law firm, and Daimler Chrysler. Rosado claimed that Daimler Chrysler was legally responsible under Florida’s dangerous instrumentality law.
The leasing company argued it was not responsible since the Graves Amendment is a federal law that takes precedent over Florida’s law. Rosado argued that the Graves Amendment is unconstitutional and therefore should not apply. Since the Graves Amendment applies to both rented and leased vehicles, a finding of unconstitutionality in either a Florida leasing or a rental car injury case would invalidate the law for both businesses.
The trial court agreed with Daimler Chrysler and dismissed Rosado’s case. Rosado unsuccessfully appealed to Florida’s Second District Court, forcing an appeal to Florida’s Supreme Court.
Sadly, the Florida Supreme Court also ruled in favor of Daimler Chrysler, stating that the Graves Amendment gives leasing corporations immunity from liability. This liability extends to the leasing corporations even when the mandatory liability insurance has expired. In other words, leasing corporations and rental car companies are not obligated to comply with Florida’s financial responsibility law.
I agree with Justice Labarga’s dissenting opinion – why should corporations like Daimler Chrysler enjoy the protections and benefits the Graves Amendment affords without the burden of maintaining liability insurance to compensate those who are hurt in accidents caused by their vehicles?
Corporations like General Motors, Ford, Avis and Hertz all make money from leasing and renting cars and trucks. By definition, their product is a “dangerous thing.” Mr. Rosado was an innocent victim of a car accident caused by a dangerous thing that Daimler Chrysler owned and made money from. Businesses must be held accountable for any damage their property causes–and certainly, corporations should be held to the same standard as an individual who owns a car or truck. Sadly for Mr. Rosado and anyone else who gets hurt by a rental car in Florida and is left with medical bills, time off from work our Supreme Court does not agree.
If you or somebody you know has been injured in a car accident, reach out to us for a free consultation to see how we can help!