Written Rental Agreement Not Required For Graves Amendment To Avoid Liability

Car Accidents

In the case of Timothy Patrick Collins v. Auto Partners V. LLC, d/b/a McGuire Chevrolet, Case Number 4D18-1855 (Fla. 4th DCA July 31, 2019), Florida’s Fourth DCA held that a written rental agreement is not required to apply the federal Graves Amendment in 49 U.S.C. Sec. 30106(a)(1), allowing car dealerships to “lease” rental cars to customers while their vehicles are in the shop and their liability is limited to $600,000 if the underlying insurance is less than than $500,000.

Facts

This case involved a plaintiff who sustained a severe injury after being hit by a car driven by a car dealership employee. The dealership employee was driving a short term courtesy vehicle provided by the dealership while the employee was having service performed at the dealership. This made the employee a customer rather than an employee at the time of the collision.

No Written Rental Agreement For The Car Involved

The dealership tried to pass off a rental agreement that was never signed by the employee (the employee testified that the initials on the document were not his). This document also stated that the vehicle was returned before the accident in question.

Thereafter, the dealership tried to produce a second rental agreement that did provide coverage during the time of the accident and was signed by the employee, but was for a different vehicle than the one involved in the collision. (It is important to note that a plaintiff likely would have faced a motion to dismiss for fraud upon the court for providing such evidence).

Judge’s Ruling And Legal Argument

The dealership also defended the case by moving for summary judgment that the vehicle involved in the accident was a short term “rental” and that the dealership was entitled to a cap on damages of $600,000 under section 324.021, Fla. Stat. (Florida’s version of the Graves Amendment).

The trial judge granted summary judgment for the dealership finding that section 324.021 does not require a written rental agreement. This is a stunning legal result considering that the dealership tried to pass off two rental agreements that were not applicable and perhaps may have even been fraudulent.

The Fourth DCA affirmed the ruling of the trial court holding that the dealership was “engaged in the trade or business of renting or leasing motor vehicles.”

The Fourth DCA also held that the “Graves Amendment simply does not require a written rental agreement, which disposes of the dispute over the legitimacy of the rental agreements.”

Upon hearing this, the question comes to mind whether this situation is covered by the “statute of frauds” (Florida’s statute of frauds is found in section 725.01, Fla. Stat.). Unfortunately for the public, despite the fact that the statute of frauds was created to limit enforcement of loose verbal agreements, car rental agreements do not appear to be included. This is unfortunately a gaping loophole for businesses who rent vehicles that the Legislature should consider fixing.

Get Help With Your Florida Car Accident Lawsuit

This case is another example of why you cannot effectively represent yourself in a car accident lawsuit in Florida. This area of law has become quite complex and oftentimes favors insurance companies and big business. To win your case, you need a good car accident attorney to help. Call us today to schedule your free consultation in Lakeland, Florida.

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