You Be the Judge: Auto Dealer Courtesy Vehicle Programs and Vicarious Liability

Welcome to our “You Be the Judge” series, where we present a real case and invite you to weigh in on the verdict. Today, we explore an intriguing legal question: Should an auto dealership that provides a courtesy vehicle be held vicariously liable for a customer’s actions? Let’s dive into the case, consider the arguments, and reveal the final outcome.

Case Summary:

Kolawole Oke brought his car to Mercedes Benz of Caldwell (MFB Auto) for service, and as part of their courtesy vehicle program, he was given a vehicle while his car underwent repairs. However, Oke drove the courtesy vehicle beyond the designated radius and parked it illegally in Boston. His wife, Shanitqua Steele, who did not have permission to drive the courtesy vehicle, moved into the driver’s seat and unintentionally caused an accident, injuring a pedestrian, Garcia.

The Arguments:

The plaintiffs, Garcia and her husband, argue that MFB Auto should be held vicariously liable for Steele’s actions. They rely on a state law stating that the registered owner of a loaner vehicle is presumed to be in control at the time of an accident. They claim that MFB Auto’s position as the registered owner makes them liable under this law. Additionally, they argue that the Graves Amendment, a federal law protecting rental car companies from vicarious liability, should not apply in this case because the vehicle was provided as part of a larger repair transaction and not a separate rental agreement.
MFB Auto contends that the Graves Amendment protects them from vicarious liability. They argue that the courtesy vehicle was part of the repair transaction, even if it wasn’t billed separately. They believe that the amendment applies to their courtesy vehicle program and shields them from liability.

Now It’s Your Turn:

As the judge, it’s your responsibility to weigh the arguments and render a decision. Should MFB Auto be held vicariously liable for Steele’s actions, or is the Graves Amendment applicable to protect them from such liability? Consider the perspectives of both parties, the implications of the state law, and the interpretation of the federal amendment.
Take a moment to reflect on this case and form your opinion. What verdict would you reach in this scenario? Should the dealership be held vicariously liable, or does the Graves Amendment provide them with protection?

And the Verdict Is…

After careful consideration, the Massachusetts Supreme Judicial Court unanimously concluded that MFB Auto, the auto dealership, is protected from vicarious liability by the Graves Amendment. The court reasoned that the vehicle was provided as part of the repair transaction, and even though it wasn’t explicitly billed separately, a single performance or return promise could furnish consideration for multiple promises.
The court also reversed the claim of negligent entrustment against Oke, stating that leaving the key in the ignition while the vehicle was illegally parked could be seen as implicit permission for Steele to move it if needed.
In this case, the court’s decision grants protection to auto dealerships that provide courtesy vehicles during repairs, akin to the protections afforded to rental car companies. MFB Auto was not held vicariously liable for Steele’s actions due to the application of the Graves Amendment, and has now set a precedent for future cases.
If you or a loved one have been injured in an accident, contact OnderLaw today for your free, no-obligation consultation. Our dedicated team is here to help guide you every step of the way. Your case is our case.