Getting Around the Graves Amendment in New York

Posted on April 11, 2019 in

Many drivers in The Big Apple are just passing through, moving to town, or moving out of town. A number of these people rent moving trucks from U-Haul, Ryder, and other such places. Under traditional negligence law, the companies could be responsible for car crash damages in these cases. If an owner loans a vehicle to an incompetent driver, and that driver causes a collision, the owner is legally responsible for damages.

But because of 49 U.S. Code § 30106, which was an obscure add-on to a huge 2005 transportation bill, the traditional rules do not apply in these cases. On its face, the Graves Amendment prevents victims from filing claims against vehicle rental companies. But, the Graves Amendment also contains some key loopholes. And, using the law to benefit accident victims is what Manhattan auto accident attorneys do best.

 

Trade or Business of Leasing Vehicles

Subsection (a)(1) states that, for immunity to apply, the vehicle owner must be “engaged in the trade or business of renting or leasing motor vehicles.”

Like many policy riders, the brief Graves Amendment does not define key terms, such as “trade or business.” Additionally, there is almost no legislative history in support of the Graves Amendment, other than a brief debate on the House floor. So, there is no way to tell what lawmakers meant by this phrase.

In the absence of a specific definition, lawyers must use the general definition. The Uniform Commercial Code, which comes up quite often in defective product claims, defines the word “merchant,” which is similar to trade or business. A merchant is someone who deals in a certain kind of goods or has special knowledge about the inventory.

Neither of these labels applies to most moving truck rental companies. Most of these firms are moving supply companies or storage companies which happen to rent a few vehicles on the side. They are like hardware stores which also sell candy bars. These businesses are not candy stores just because they have a few Snickers bars.

 

Not Otherwise Negligent

This requirement is in subsection (a)(2). Immunity only applies if “there is no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner).”

As mentioned, liability normally attaches if the owner knowingly loaned a vehicle to an incompetent driver, such as a person with a suspended driver’s license or a poor driving record.

Back in 2005, it was almost impossible to verify drivers’ licenses at retail establishments. So, a visual inspection was the industry standard. But the world has changed a lot since then. Now, mostly thanks to smartphones and digital technology, it’s relatively easy to check driving records over the internet. In fact, such verifications are fast becoming the industry standard.

So, failure to check the renter’s driving record is arguably negligent. As a rule of thumb, if the renter had a safety-suspended driver’s license, the vehicle owner may be liable as a matter of law. If the renter had a bad driving record, that record is circumstantial evidence of incompetence and negligent entrustment.

In commercial negligent entrustment cases, damages usually include compensation for economic losses, such as medical bills, and noneconomic losses, such as pain and suffering. Additional punitive damages may be available as well, in some cases.

 

Connect with a Manhattan Car Accident Attorney

In most cases, the Graves Amendment does not block commercial negligent entrustment claims. For a free consultation with an experienced Car Accident lawyer in New York, contact Michael J. Redenburg Esq. P.C. Attorneys can connect victims with doctors, even if they have no money or insurance.

Michael J. Redenburg, Esq. P.C.

In over a decade of legal practice, Attorney Michael Redenburg began his career defending cases for the clients of insurance companies. Initially defending no-fault claims at a Long Island-based law firm, he then moved on to a Manhattan-based firm where he defended the clients of insurance carriers in an auto accident and premises liability matters.

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