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Stratton v. Wallace – Vehicle Lessor Not Shielded Under Graves Amendment

Prior to implementation of the federal “Graves Amendment” in 2004, Florida was one of 17 states that had full or limited vicarious liability for vehicle owners in crash cases. Our Cape Coral car accident lawyers know this included all vehicle owners, including companies that routinely leased vehicle to the public for profit. crashedcar.jpg

The Graves Amendment changed that. Stuffed into an 835-page federal transportation bill and given just 20 minutes of discussion by legislators in the House of Representatives, the measure preempted state vicarious liability laws in personal injury cases with regard to vehicle owners who rent or lease vehicles. At the time it was passed, opponents called it a “sham,” and feared it would leave innocent accident victims without recourse, especially when the company chooses to rent or lease a vehicle to an uninsured motorist.

There has been some push back in the courts to limit the scope of this legislation, most recently in New York with the federal appellate judge ruling in Stratton v. Wallace that a commercial defendant would be unable to avoid liability under the Graves Amendment.

New York, too, was one of the many states with laws allowing for vicarious liability by all vehicle owners. The recent decision in Stratton is critical of the law as it was written and the scant discussion legislators had on it before passed. (Sometimes judges look to these discussions in weighing the intent of lawmakers before applying the law to the facts of the case before them.)

The facts in Stratton begin with a 2009 crash on a New York highway, where a woman sat waiting on the shoulder for help in her disabled vehicle, shortly after she struck a deer. A commercial trucker approached from behind, veered off course and struck her. She was pronounced dead at the scene. An investigation would later show the truck driver had been viewing pornographic images from the driver’s seat on his laptop computer.

A criminal case resulted in a conviction for second-degree manslaughter, with a prison sentence that will span anywhere from 3 to 9 years.

Subsequently, the decedent’s family filed suit against the trucker, his employer, the company that leased the vehicle to the employer and the parent company that owned both firms.

The parent company and the vehicle lessor moved for summary judgment, arguing they were precluded from liability under the Graves Amendment. That request was granted by the magistrate judge, but later overturned by the appellate court.

The fact that played a big role in the decision was that the lessor and lessee in this situation were not bound merely by an arms-length contract, but rather were owned by the same firm. That differentiated this claim from an “ordinary” Graves Amendment claim, the judge ruled.

It’s worth noting that since the Graves Amendment was implemented, it has not been uncommon for trucking companies to reconfigure their operations and corporate structure in such a way that liability is limited under the law. That means large companies are establishing smaller “affiliates,” which then “lease” vehicles to sister companies within the same corporate family. This allows the company to evade state’s vicarious liability statutes.

Rulings like the one in Stratton help ensure they don’t get away with it.

Call Associates and Bruce L. Scheiner, Attorneys for the Injured, at 1-800-646-1210.

Additional Resources:
Stratton v. Wallace, July 31, 2014, U.S. District Court, Western District of New York
More Blog Entries:
Who Can Sue for Wrongful Death – Force v. Am. Family Mut. Ins. Co., Aug. 8, 2014, Sarasota Car Accident Lawyer Blog