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Vicarious Liability for Complimentary Service Loaners

liability for complimentary service loaners Fort Lauderdale

Do not let me drive your car

The annoying maintenance light in my car has been staring me in the face for weeks (imagine I drive a BMW even though I do not). I decide to waste a few hours on Saturday morning and take my car in for service. I am horrified to learn it is a serious problem that will take at least a week to fix. The silver lining is the service advisor tells me I can have a complimentary service loaner to drive while they work on my car. Mine is an older car, so I am excited to drive the latest model and see what upgrades it has. I am even more pleased that I will not have to rent a car while mine is in the shop.

I sign (without reading) the dealership’s Rental Agreement for a Temporary Substitute Vehicle. I pay nothing for the use of the complimentary service loaner. The service advisor hands me the keys and off I go. Twelve days later, I am running late for a Thursday morning 8:45 hearing. The dealership’s complimentary service loaner has satellite radio and I am listening to the Howard Stern replay. I am dying laughing at Howard Stern yelling at Sal (a member of his staff) for Sal’s inability to correctly spell “phony phone call,” when all of a sudden I crash into another car being driven by a friend of mine, Sean, on his way to work.

Sean is injured. I, however, am fortunate because I have no money (remember I am the imaginary owner of a BMW) and have “full coverage insurance.” Realizing the futility of pursuing me, Sean’s lawyer sues the owner of the vehicle, the dealership, who allowed me to drive the complimentary service loaner. The dealership responds to Sean’s lawsuit and claims (start playing O Fortuna in your mind and let it build to a haunting crescendo) the Graves Amendment prohibits Sean’s lawsuit. The dealership also claims as a back-up defense that its liability is capped by sections 324.021(9)(b)(2) and (3) of the Florida Statutes through the application clause of section 324.021(9)(c)(1).

Sean’s lawyer gets the Rental Agreement for Temporary Substitute Vehicle that I signed and it shows the dealership charged me “$0.00” for the complimentary service loaner. The back of the Agreement states “This is a contract for the rental of the vehicle.

A fee you pay us, or our opportunity to service or repair your vehicle and the benefits we receive for the service/repair work, is adequate consideration for rental of the vehicle.” The dealership that gave me the complimentary service loaner does not “rent” its complimentary service loaners to the general public.

A primer on the common law’s response to automotive carnage

The dangerous instrumentality rule imposing vicarious liability for an entrusted motor vehicle is born of the common law. E.g., Aurbach v. Gallina, 753 So. 2d 60, 62 (Fla. 2000). The seminal Florida case is Southern Cotton Oil Co. v. Anderson, 80 Fla. 441 (1920). It holds:

An automobile is nearly as deadly as, and much more dangerous than, a street car, or even a railroad car. These are propelled along fixed rails, and all that the traveling public has to do to be safe is to keep off the tracks; but the automobiles, with nearly as great weight and more rapidity, can be turned as easily as can an individual, and for this reason is far more dangerous to the traveling public than either the street car of the railway train.

Id. at 446-47 (citing Weil v. Kreutzer, 134 Ky. 563, 563-64 (1909)).

The supreme court detailed the carnage motor vehicles caused on roadways across the nation. So. Cotton Oil Co., 80 Fla. at 450-53. The opinion continues:

An automobile being a dangerous machine, its owner should be held responsible for the manner in which it is used; and his liability should extend to its use by any one [sic] with his consent. He may not deliver it over to any one [sic] he pleases and not be responsible for the consequences. While it is quite true that a motor is not an outlaw, it must also be borne in mind that the driver is not the lord of the highway, but a man in charge of a dangerous thing, and so called upon to exercise the greatest care in its operation.

Id. at 457-458 (internal citations omitted).

Southern Cotton’s seed is prolific. Rippy v. Shepard, ___ So. 3d ___, 2012 WL 143607, *3 (Fla.) (farm tractor is dangerous instrumentality); Scott & Jobalia Constr. Co., Inc. v. Halifax Paving, Inc., 538 So. 2d 76, 79-80 (Fla. 5th DCA 1989) (crane); Meiser v. Fisher, 462 So. 2d 1071, 1071 (Fla. 1984) (golf cart); Harding v. Allen-Laux, Inc., 559 So. 2d 107, 107-08 (Fla. 2d DCA 1980) (forklift); Orefice v. Albert, 237 So. 2d 142, 145 (Fla. 1970) (airplane); Eagle Stevedores, Inc. v. Thomas, 145 So. 2d 551, 552 (Fla. 3d DCA 1962) (tow motor).

Interpreting and applying statutes in derogation of the common law

The common law represents and responds to the “felt necessities of the time.” Oliver Wendell Holmes, The Common Law 1 (1881). “Indeed, it is contrary to our common-law experience not to bring the common law into accord with the actual customs and practices of its citizens….” Claire’s Boutiques, Inc. v. Locastro, ___ So. 3d ___, 2011 WL 1774437, *1 (Fla. 4th DCA) (Levine, J., concurring and dissenting) (ellipses in original). Because the common law is the bedrock of our judicial system, “statutes which are in derogation of the common law must be strictly construed and narrowly applied.”

Nagy v. Fla. Birth-Related Neurological Injury Comp. Ass’n, 813 So. 2d 155, 159-60 (Fla. 4th DCA 2002). Statutes limiting liability are in derogation of the common law. Fla. Sonesta Corp. v. Aniballi, 463 So. 2d 1203, 1207 (Fla. 3d DCA 1975). Strict construction requires a statute to be construed in favor of the party opposing it, and requires a party seeking a statute’s protection to clearly prove its application and compliance therewith. See Chuck v. City of Homestead Police Dep’t, 888 So. 2d 736, 744 (Fla. 3d DCA 2004); see also Fla. Sonesta Corp., 463 So. 2d at 1207.

The Graves Amendment, 49 U.S.C. § 30106, and section 324.021 abolish and limit vicarious liability for leased and entrusted automobiles, and therefore are in derogation of the common law. Compare 49 U.S.C. § 30106 and §§ 324.021(9)(b)-(c) with Aniballi, 463 So. 2d at 1207. The Graves Amendment shields those “engaged in the trade or business of renting or leasing motor vehicles [when] there is no negligence or criminal wrongdoing on the part of the owner” from vicarious liability for the rented or leased vehicle. 49 U.S.C. § 30106(a). Sections 324.021(9)(b)(2) and (3) limit vicarious liability for leased or entrusted vehicles. The application clause of section 324.021(9)(c)(1) grants the limitation to rental companies and car dealers that provide “temporary replacement vehicles to its customers for up to 10 [sic] days.”

The Graves Amendment and section 324.021 do not apply to complimentary service loaners

The Graves Amendment cannot apply to Sean’s case because the dealership gave me the complimentary service loaner for free. The one decision discussing the Graves Amendment’s application to free service loaners is Zizersky v. Life Quality Motor Sales, Inc., 866 N.Y.S. 2d 501 (N.Y. Sup. Ct. 2008). The court wrote in Zizersky, “bailment of a ‘loaner’ vehicle without charge is neither a ‘lease’ nor a ‘rental.’” Id. at 507 (quotations in original). Zizersky is particularly helpful to Sean because the defendant in that case, Life Quality Motor Sales, Inc., was an authorized BMW dealership. Id. at 502. Life Quality Motors Sales, Inc. provided a free service loaner vehicle to one of its customers who was involved in an accident just like Sean and I. See id. at 502. The alleged “rental agreement” in Zizersky is a near mirror image of the alleged “rental agreement” in Sean’s case and the defendant in Zizersky claimed the same worthless “rental consideration” the dealership that gave me the complimentary service loaner to drive: the ability to work on a customer’s car. See id. at 505.

Remember, the Graves Amendment only applies to those “engaged in the trade or business of renting or leasing motor vehicles [when] there is no negligence or criminal wrongdoing on the part of the owner” from vicarious liability for the rented or leased vehicle. 49 U.S.C. § 30106(a). If the dealership did not lease me (charge me rent for) the complimentary service loaner, then it is not in the business of leasing complimentary service loaners, and is not entitled to Graves Amendment protection. Forgetting Zizersky for a moment, Webster’s Third New International Dictionary Unabridged defines complimentary as, “given for free as a courtesy or favor.” Florida law has long recognized the same obvious meaning of complimentary is “free.” Comm’n on Ethics v. Barker, 677 So. 2d 254, 255 (Fla. 1996); Parke-Davis & Co. v. Ricci, 587 So. 2d 589, 590 (Fla. 4th DCA 1991); Country Club of Coral Gables, v. McHale, 188 So. 2d 405, 406 (Fla. 3d DCA 1966). Strictly construing and narrowly applying the Graves Amendment to Sean’s case shows the dealership was not in the business of “renting or leasing” complimentary service loaners like the one it gave me to drive while it worked on my car.

Having defeated the dealership’s Graves Amendment argument, Sean’s lawyer must now address section 324.021(9)(b)’s cap on damages. Section 324.021(9)(b)(2) limits a vehicle owner’s vicarious liability for a vehicle leased for less than one year. Section 324.021(9)(c)(1) extends the cap’s application to car dealers who provide “temporary replacement vehicles” to customers for up to ten days. I did not pay rent for the complimentary service loaner while the dealership worked on my car, and therefore the Rental Agreement for a Temporary Substitute Vehicle should not be considered a lease for less than one year covered by section 324.021(9)(b)(2) under Zizersky.

The dealership in Sean’s case is not a “natural person” and so at first glance the entrustment provision of section 324.021(9)(b)(3) would not apply, but section 324.021(9)(b)(3)’s application is expanded by section 324.021(9)(c)(1). However, because I was driving the complimentary service loaner for more than ten days when I was involved in the accident, the cap does not apply to Sean’s case.

Sean’s lawyer should also argue that section 324.021(9)(b)(3) does not apply because the dealership does not rent or lease its complimentary service loaners to “the general public” as required by section 324.021(9)(c)(1). Therefore, even if the judge in Sean’s case found the Rental Agreement was a valid lease even in the absence of real consideration, the dealership’s failure to lease complimentary service loaners to the general public prevents the dealership from invoking the statutory cap on damages. Strictly construing and narrowly applying section 324.021(9) to Sean’s case shows the dealership is not entitled to the cap on damages because it does not lease complimentary service loaners to the general public and because it provides complimentary service loaners for more than ten days.

Other complimentary service loaner considerations

Following Zizersky, the Greater New York Automobile Dealers Association, issued a bulletin discussing “dress[ing] up the loaner transaction as a rental or a lease transaction.” Some dealerships have started charging nominal amounts like a flat charge of three dollars for the use of a complimentary service loaner. Do nominal charges like these make the dealership in the business of leasing complimentary service loaners and thus entitled to Graves Amendment protection, even when the small charge does not cover the actual cost of the rental? No case has addressed this recent change in “rental tactics” by the dealerships. What if the dealership provides complimentary service loaners for more than ten days, but did not do so in this article’s hypothetical case? A strict construction and narrow application of section 324.021(9) suggests that if a dealership does it at all then it loses the cap on damages. See § 324.021(9)(c)(1). That scenario has also failed to reach any Florida court.


Dealerships will continue to plumb the depths of the Graves Amendment and section 324.021(9). Push back hard when you encounter one claiming those protections to a claim of vicarious liability. Do not forget any possible claims for active negligence on the part of the dealership. Was the complimentary service loaner properly maintained? Should the dealership have given the complimentary service loaner to the driver in the first place? Do not forget to file an avoidance to any affirmative defense claiming the protections of the Graves Amendment or section 324.021(9).

Finally, if you see me running late for an 8:45 hearing, get off the road.

By Ben Murphey, Partner


Fort Lauderdale FL Accident Attorney – Lawlor, Winston, White & Murphey are seasoned accident lawyers in Coral Springs with a winning record of guiding auto accident victims through every detail of an accident case and ensuring fair and reasonable treatment by both insurance companies. Visit / or call 954-525-2345 to schedule a free consultation to discuss your case. If you’re concerned that you can’t afford the services of a car accident lawyer in Coral Springs, rest assured that we work on a contingency basis—you don’t pay us until you receive compensation.

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