Automobile Lessors Beware: Vicarious Liability in Three States

The court took a somewhat unique position in combining two cases with similar legal and factual issues. The plaintiff in the first case suffered severe injuries when her car was rear-ended by a teenager driving his father's car leased from Chase Manhattan Automotive Finance Corporation, the registered owner of the motor vehicle. In addition to suing the driver's father, the plaintiff sued Chase as the owner/lessor under Rhode Island's vicarious liability statutes. The plaintiff in the second case also suffered severe injuries in an accident involving a leased motor vehicle, but the lessor in this case was Gold Key Lease, Inc. The plaintiff sued the lessee, the third party operator (as permitted by the lease agreement), and Gold Key. Similar to the Chase case, the plaintiff alleged that Gold Key, as the record owner of the vehicle, was subject to Rhode Island's vicarious liability statutes.

At the trial level, both Chase and Gold Key were granted summary judgment. In granting summary judgment, the Chase court stated that the Rhode Island legislature did not intend to hold long-term vehicle lessors liable for the negligence of the operators of the leased vehicles, because such financiers do not possess and control the automobiles financed. The court further reasoned that Rode Island's vicarious liability statutes apply to short-term rental motor vehicles, rather than long-term rentals, because owners of short-term rentals assert control over the vehicle. In granting summary judgment, the court concluded that the term 'owner' as used in the vicarious liability statutes is a limited definition that does not include persons not in control or possession of the vehicle.