Vicarious Liability Settlement

Vicarious Liability Settlement

Here is a recent interesting case wherein I represented the estate of a woman who was killed by an intoxicated driver. The vehicle operated by the drunk driver was owned by and registered in the name of an automobile dealership. I won the case on appeal and recently settled the matter after the Superior Court’s decision was reversed in a 3-0 ruling. The case involved the issue of the “vicarious liability” of an auto dealership for the operation of one of its loaner vehicles and interpretation of M.G.L. c. 231, § 85A.

Vicarious liability refers to a situation where a person or a company (like here, an auto dealership) is held responsible for the harmful actions or negligence of another. It often appears in the employment context, where the employer can be held liable for the negligent acts of its employees, as long as the acts occurred during the course of their employment or in furtherance of the employer’s business.

Vicarious liability is also referred to as the legal doctrine of “respondeat superior.” It is based on the concept of agency, that there exists a special relationship between the employer (or principal) and the person who committed the negligent act, the agent, and that the employer or principal had the right, ability or duty to control the agent.

The automobile dealership in my case provided the driver with a “loaner vehicle” pursuant to a “service loaner agreement.” The loaner vehicle was owned by and registered in the name of the dealership. The loaner agreement stated that the driver was not “nor [did he] hereby become an agent, servant or employee of [the dealership] in any manner whatsoever.” The agreement further stated that the driver agreed he would not operate the vehicle in violation of any city, state, or federal law, and he “shall be responsible for any violation thereof.”

This loaner agreement was signed by a representative of the dealership but was not signed by the driver. Also, the driver had the vehicle for nearly a month prior to the accident and he never paid any money to the dealership for the use of the vehicle.

The decedent was a passenger in the loaner vehicle when the driver caused an accident that resulted in both of their deaths. The blood alcohol level of the deceased driver was .25, more than three times the legal limit. The plaintiff brought suit against the dealership, the bar where the driver was drinking prior to the accident, the owner of the bar, and the estate of the deceased driver. The complaint made claims of wrongful death and negligence against the dealership, alleging that the dealership, as owner of the vehicle, was vicariously liable for the operator’s conduct.

After a lengthy discovery process, the dealership moved for summary judgment and, after a hearing, a judge in the Superior Court allowed the motion and dismissed the claims against the dealership.

I felt the Superior Court was incorrect on the facts and the law and appealed the decision on behalf of the plaintiff.

According to M.G. L. c. 231, § 85A, “in actions to recover for injuries resulting from motor vehicle accidents, proof that the defendant is the registered owner of a motor vehicle is ‘prima facie evidence’ of the defendant’s responsibility for the actions of the motor vehicle’s driver.” Covell v. Olsen, 65 Mass. App. Ct. 359, 362, 840 N.E.2d 555 (2006), quoting from G. L. c. 231, § 85A. General Laws c. 231, § 85A, “does not change the substantive law of negligence,” but “it does shift to the defendant the burden of proving the absence of the requisite control.” Covell v. Olsen, supra at 363.

Since the loaner agreement stated that the driver was not an agent of the dealership, the Superior Court judge concluded that the “undisputed evidence” showed that the dealership did not have the requisite “power and means” to control the driver’s operation of the vehicle so as to make it vicariously liable for the driver’s tortious conduct.

According to the Appeals Court: “When considering a motion for summary judgment, the judge should not consider the credibility of the witnesses or the weight of the evidence.” Riley v. Presnell, 409 Mass. 239, 244, 565 N.E.2d 780 (1991). His consideration is limited to determining whether “all material facts have been established and the moving party is entitled to a judgment as a matter of law.” Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120, 571 N.E.2d 357 (1991). “In reviewing a grant of summary judgment, ‘we assess the record de novo and take the facts, together with all reasonable inferences to be drawn from them, in the light most favorable to the nonmoving party.'” Pugsley v. Police Dept. of Boston, 472 Mass. 367, 371, 34 N.E.3d 1235 (2015) (citation omitted).

“Reduced to the essentials, . . . the substantive question in this case is whether [the dealership] had the authority and means to control [the driver’s]’s use of the automobile when the accident occurred.” Covell v. Olsen, supra at 364. “The question is not whether [the dealership] exercised that control, but whether [it] had the authority and means to do so.” Ibid.

Since the dealership could not produce a loaner agreement signed by the driver, this rendered it insufficient to “affirmatively eliminate any genuine issue of material fact regarding [the dealership’s] power to control [driver]’s conduct.” Covell v. Olsen, supra at 364-365. “The conflicting evidence precludes summary judgment,” Peters v. Haymarket Leasing, Inc., 64 Mass. App. Ct. 767, 775-776, 835 N.E.2d 628 (2005), and, on this record, “the existence or nonexistence of a master-servant relationship [is] a question of fact,” Cheek v. Econo-Car Rental Sys. of Boston, Inc., supra.

Basically, the Appeals Court said it was up to the jury to decide what sort of relationship existed between the auto dealership and the driver, and whether the dealership had the ability to control the driver’s conduct. The Massachusetts Appeals Court therefore vacated the decision of the Superior Court, and remanded the matter to the Superior Court for a jury trial on the issue of the vicarious liability of the dealership.

After the remand, I was able to settle the claims against the dealership on behalf of the deceased woman’s estate.