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Not So Fast: More Is Required To Establish Liability For A Vehicle Owner Involved In The Business Of Renting Or Leasing The Vehicle

May 19, 2022

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Generally, ownership of a motor vehicle in New York can create potential liability for accidents involving that vehicle. When a motor vehicle accident involves a leased or rented motor vehicle, an owner involved in the business of renting or leasing the vehicle cannot be held liable for personal injuries involving the use of the vehicle simply because one is the owner.

The Second Department recently addressed these issues in<em> <a href="">Denise Keys v. PV Holding Corp.</a> </em>The plaintiff in that case was crossing the street when she was struck by a rented Zipcar owned by defendants PV Holding, Zip Car New York, Inc., and Zipcar, Inc. The lower court granted plaintiff’s motion for summary judgment on the issue of liability against the owners and the owners appealed.

The Second Department reversed the lower court’s decision, explaining that according to the Vehicle and Traffic Law, every owner of a vehicle used or operated in New York State shall be liable for injuries to persons resulting from negligence in the use or operation of such vehicle. However, the Graves Amendment, 49 USC §30106, which preempts conflicting New York Law, provides that the owner of a leased or rented motor vehicle cannot be held liable by reason of being the owner of the vehicle if (1) the owner is engaged in the business or trade of renting or leasing motor vehicles, and (2) there is no negligence or criminal wrongdoing by the owner. The court found that because the owner defendants were in the business of renting motor vehicles and there was no evidence of negligence by the owners, the plaintiff failed to establish that the defendant owners were liable for her injuries.

The takeaway from this case is that New York’s vicarious liability rule does not automatically apply to those in the business of renting or leasing vehicles and that proof of such owner’s negligence or criminal wrongdoing is necessary to establish liability.

Thank you to Gabriella Scarmato for her contribution to this post. Please contact <a href="">Andrew Gibbs</a> with any questions.


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