Estate of Byrne v. Perfect/Budget is a November 2009 Brooklyn, New York case in which a Budget agent ("Perfect") rented a delivery truck to Jamie Collins, who had a history of drug-related traffic offenses and was driving on a restricted license. During the rental, Collins struck and killed a bicycle rider. The rider's estate sued alleging that Perfect knew or should have known that Collins had a history of drug- and alcohol-related traffic offenses.
Perfect and Budget moved to dismiss. The trial court denied the motion, saying that Perfect had to show that it possessed no special knowledge of any propensity by Collins to operate the truck in an unreasonably dangerous way. The court said that Perfect had not tendered any evidence establishing that it followed the proper policies and procedures required of Budget rental locations on how to determine whether a renter's license was valid. The court found that a restricted license was a valid license; the court did not impose on Perfect any obligation to check a renter's driving record beyond verifying a valid driver's license.
But the court also said that Perfect had to show that it had internal policies and procedures to cover this type of renter and that it followed its own procedures. In other words, if Perfect failed to follow its own procedure for qualifying renters, it might be found liable for negligent entrustment. The decision, in this writer's view, unfairly places the burden of proof on Perfect. The burden should have remained on the plaintiff.
In Byrne, the court allowed the plaintiff's case to go to discovery on the strength of the specific allegation that Perfect might not have followed the Budget policies to determine validity of a renter's license. In Ellis, the court allowed the case to go to discovery even though the plaintiff alleged no means by which Enterprise should have determined the validity of the renter's license.
States without Vicarious Liability
In states that did not recognize vicarious liability before passage of the Graves Amendment, the results have been different:
Jones v. Enterprise is a March 2009 South Carolina Court of Appeals case. The court found no negligent entrustment even though the renter had six prior speeding convictions (three of which occurred while driving an Enterprise car) and failed to pay numerous traffic tickets. The court noted that precedent in South Carolina limited finding of negligent entrustment to cases where the facts showed the driver was intoxicated at the time permission was granted to drive the vehicle.
Lessons from These Lawsuits
No case imposed an obligation for rental companies to do more than check the facial validity of a renter's license. But if there are warning signs such as a restricted license, or when you know that a renter has outstanding traffic violations, you might consider refusing to rent.
In the Byrne case, Perfect was renting a truck to a regular customer - a trucking company. If Perfect knew that a trucking company employee had driving problems, it might have been time to talk to the trucking company about not permitting that particular employee to drive the truck.
Negligent entrustment cases are more likely to increase in frequency in New York, Connecticut, Florida, Iowa and the District of Columbia, where the Graves Amendment has taken more of a bite out of personal injury claims against rental and leasing companies.