Monday, October 30, 2017

Negligent Entrustment

By Jonathan Spigel

On September 29, 2017, the Texas Supreme Court issued an opinion further clarifying the law of negligent entrustment.

When you let someone use a vehicle that you own and they cause personal injury, death, or property damage to another in the operation of that vehicle, you can be held liable for the damage they cause in certain circumstances.  Those situations include when you know the person to whom you’ve entrusted the vehicle is an unlicensed, incompetent, or otherwise reckless driver and his/her conduct causes harm.  The new Texas Supreme Court opinion on this issue – Allways Auto Group, Ltd., et al. v. Steven Walters – addresses causation and holds that where (in the subject case) the harm occurs eighteen (18) days after the vehicle’s entrustment, that is too long a period of time to hold the vehicle owner liable.   

In most cases involving allegations of negligent entrustment, the harm occurs the same day or perhaps the day after the vehicle is borrowed/loaned.  In the Allways Auto Group case, an individual purchased a used vehicle from a dealership; that vehicle broke down within two days of the purchase; the dealership gave him a loaner; and then eighteen (18) days later the driver was involved in an accident with another driver, Mr. Walters.  Although the loaner driver testified to being drunk when he picked up the vehicle (but the dealership salesman did not observe any obvious signs of intoxication at that time), and the loaner driver was found to be legally drunk at the time of the accident eighteen (18) days later, the Texas Supreme Court stated that the dealership was not liable for the accident.  The Texas Supreme Court ruled that under the facts as presented, the dealership could not have foreseen that an accident would occur eighteen (18) days after the loaner was entrusted to its customer.

Negligent entrustment is different that negligent hiring.  Had the dealership employed the customer/driver and the same accident occurred, the dealership would most likely have been found liable for negligent hiring as the customer/driver was an alcoholic and had a history of DWI convictions.      

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