You’ve probably never asked this question, but it’s a very important one this time of year. The period between October and May is usually the busiest time of year for moving. Summer is extreme in many parts of the country, and summer moving is always more expensive than fall or spring moves.
That interesting fact does not explain why this question is important, but we’re getting there. Many U-Haul, Ryder, and other rented moving trucks are large vehicles that normally require commercial licenses. Yet most business owners rent these monsters to anyone with a valid credit card. These vehicles are difficult enough to drive if the operator concentrates on driving. But many of these individuals have one eye on the road and one eye on their GPS navigation devices.
For years and years, if these drivers caused car crashes, the vehicle owner may have been vicariously liable for damages. These damages could be substantial, as large truck crashes usually cause wrongful death and other catastrophic injuries. The 2005 Graves Amendment purported to change all that. But is it possible for a car accident lawyer in Buffalo, MN to get around the Graves Amendment?
What Is the Graves Amendment?
Before the Graves Amendment, injured persons could file for damages against car rental companies and moving truck rental companies after an accident with a negligent renter. This was known as vicarious liability.
In 2005, the Graves Amendment made it illegal to bring vicarious liability charges in the US. Under this law, any person or company that owns vehicles and leases them out to other parties cannot be held liable for car accidents caused by renters. The Graves Amendment also stipulates that an injured person can’t hold these lessors responsible for accidents that cause property damage while a renter is driving a leased vehicle.
The Graves Amendment is a Federal law, meaning it applies to people in all US states. This includes Minnesotans.
The only time injured persons’ car accident lawyers can bring charges against one of these companies is if the company is negligent. And that negligence has to have had something to do with the accident that caused the injury.
For example, if faulty brakes cause a car renter to crash, the car rental company may also be liable for your injuries. In this case, you can bring charges against the company without violating the Graves Amendment.
Per the Graves Amendment, the owner includes the person who is in the trade or business of renting vehicles. The owner could also be an affiliate of the vehicle renting company, including the company’s employees.
There is one exception to the above rule. If the car lease has an initial term of six or more months, the Graves Amendment considers the lessee the owner of the vehicle. But this designation is only for insurance and liability purposes.
Keep in mind that the Graves Amendment doesn’t only apply to owners of rented or leased vehicles. Graves Amendment-related lawsuits have also come up against owners of tractor leasing companies and ridesharing companies.
What About Interstate Accidents?
Often, people rent cars and moving trucks to travel across state lines. The Graves Amendment still applies in these situations.
In fact, the Graves Amendment has precedence over any contradicting laws in the state where an accident occurs.
Why Does All This Matter?
This post has a lot of questions, doesn’t it? Hopefully, it will provide a few answers as well.
A fully-loaded 26’ moving truck weighs at least 22,000 pounds. That’s not much lighter than a semi-truck. SO, when these trucks are involved in collisions, they usually cause extremely serious injuries, like:
- Serious Burns: That same truck carries sixty gallons of diesel fuel. Diesel burns at a different temperature from gasoline. So, diesel fuel explosions nearly always cause third or fourth-degree burns. These injuries are often fatal.
- Crushed Bones: A mid-sized moving truck can basically crush most cars. So, the victims’ bones are usually crushed as well. That injury usually means extensive corrective surgery as well as painful physical rehabilitation.
- Internal Injuries: These same forces cause internal organs to grind against one another. With no protective layers, these organs usually bleed profusely. And, it may be quite some time before doctors find and stop this bleeding.
These injuries often trigger medical bills that are in the tens of thousands of dollars. These wounds usually mean significant pain and suffering as well. A Buffalo, MN car accident lawyer can obtain compensation for all these damages.
Which Party Is Responsible for Damages After a Buffalo, MN Car Wreck?
Minnesota is a no-fault state, requiring all drivers to obtain a minimum personal injury protection (PiP) plan. Your PiP policy will cover up to $20,000 in personal medical care and up to $20,000 in lost wages due to auto accident-related injuries. Once you exhaust those amounts, your only option is to recover damages from the negligent driver’s insurance plan.
Typically, the tortfeasor’s (negligent driver’s) private auto insurance companies will not cover these losses. Such policies only cover losses in a specific vehicle. Furthermore, during the rental transaction, many moving truck renters decline insurance altogether or opt for the cheapest and lowest coverage.
Under Minnesota law, these limited policies must provide $30,000 of liability coverage. If two people are injured in an accident, that coverage increases to $60,000. But what happens if your medical bills, wage losses, and pain and suffering go beyond these amounts?
Under the traditional negligent entrustment theory mentioned above, the company that owned the vehicle would probably be responsible for damages. If that option is unavailable, it could mean that the victim has no recovery source.
Why Did Lawmakers Pass the Graves Amendment?
Tariffs and trade protectionism have been in the news some lately. Additional taxes on imported goods make domestically-produced goods cheaper and therefore more in demand. Basically the same principle applies to the Graves Amendment. But instead of using money to protect the vehicle rental industry, the people who wrote the Graves Amendment used the law.
Shortly before lawmakers passed 49 U.S. Code § 30106, a major vehicle rental company threatened to pull out of several states with victim-friendly vicarious liability laws, like a broad negligent entrustment rule. The Graves Amendment was designed to appease these corporate suits.
Also, more and more states were enforcing vicarious liability. And some of these state laws had no statute of limitations. That means injured parties could bring personal injury cases at any time, no matter how many years had passed since the wreck.
Similarly, many states used to forego caps on personal injury settlements against vehicle lessors. In one such case, a car rental company had to pay out $21 million to a New Yorker injured by one of its vehicles.
The Graves Amendment doesn’t just protect rental companies, though. Since its passing, the law has also decreased car rental costs for consumers. Some sources say that vicarious liability laws used to tack on $100 million annually to rental costs.
But the provision itself is very short. Furthermore, there are no hearings or other legislative history in support of the Graves Amendment. So, the provision is full of holes that a Buffalo, MN car accident lawyer can exploit.
Can a Car Accident Lawyer in Buffalo, MN Bypass the Graves Amendment?
The Graves Amendment is tough to beat. Yet, research shows that courts in states where vicarious liability used to be the law are more likely to go around this law. Minnesota is one of those states, meaning the best Buffalo car accident attorney can help you beat the Graves Amendment.
Section (a) is the meat of this law. Ironically, the provisions designed to give it teeth are also the provisions that may cripple this law.
(a)(1) contains the trade or business requirement. The Graves Amendment does not define this phrase, so attorneys must look for a definition elsewhere. The Uniform Commercial Code, which is used in legal cases, defines a “merchant” as “a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill.”
Many businesses that rent moving trucks are not vehicle rental companies. They are moving companies which happen to rent a few trucks as well. Arguably, the lessor in a car crash case may not meet this key requirement.
Further, consider the case of a company loaning a rental vehicle to someone whose personal vehicle is in repair. Because money does not exchange hands in these circumstances, the car company isn’t technically in the business of renting. So, the Graves Amendment may not apply here, depending on the terms of the vehicle loan agreement.
(a)(2) contains the not otherwise negligent requirement. In 2005, no vehicle lessors conducted electronic drivers’ license checks. The technological tools were unavailable. Now, some thirteen years later, that’s no longer the case. Indeed, according to many, verifying drivers’ licenses is now the industry standard.
Some states have a set method here. Generally, a suspended drivers’ license makes the operator incompetent as a matter of law. If the operator has a poor driving record, and the vehicle lessor knows about the poor record, there is a presumption of incompetence.
The negligent entrustment rule applies if an owner knowingly entrusts a vehicle to an incompetent driver. So, if the lessor verifies the license, learns about the bad driving record, completes the transaction, and the lessee causes a car crash, the lessor is negligent. If the lessor did not verify the license, the lessor is also negligent.
The state of Minnesota might also consider a car rental company owner negligent for failing to register its vehicles with the state. Failing to maintain minimum requirements for preparation security plans is another potentially negligent act.
A final way Buffalo car accident attorneys get around the Graves Amendment is if you’re injured in a truck wreck. Sometimes, the truck driver may be an independent contractor. That means the contractor rents equipment from another truck driver.
The layers of ownership in these cases are complex. Still, a Buffalo personal injury lawyer could help you bring a lawsuit against the original truck owner.
Team Up with a Hard-Working Attorney
The protectionist Graves Amendment may not protect the companies it was supposed to protect. For a free consultation with an experienced car accident lawyer in Buffalo, MN, contact Carlson & Jones, P.A. We routinely handle cases in Wright County and nearby jurisdictions.
Originally published October 20, 2018 and updated September 21, 2021.