New Florida Law Broadens Federal Graves Amendment Protections to Cover Peer-to-Peer Car Sharing
Key Points:
- New law protects both peer-to-peer sharing companies and the vehicle owner from vicarious liability based solely on ownership of a vehicle, which is a departure from Florida’s Dangerous Instrumentality Doctrine.
- A similar law protects motor vehicle dealerships from vicarious liability when lending temporary courtesy cars to its service customers.
A new Florida Statute, Section 627.7483, defines “peer-to-peer car sharing” as the use of a motor vehicle by an individual other than the vehicle’s owner through a peer-to-peer program for financial consideration. Peer-to-peer car sharing is a rapidly expanding business whereby an individual allows third parties to borrow their vehicle through the use of an online platform or application, such as Turo, GetAround, Avail and Hyre Car. This business is similar to traditional car rental clubs, such as Zipcar, but creates a virtual bank of available vehicles from participating vehicle owners who rent their cars through these applications.
This law establishes Graves Amendment protections for those engaging in peer-to-peer car sharing for financial gain. The Graves Amendment was enacted in 2005 at the federal level to protect rental car companies from vicarious liability of its innumerable customers’ liability while using their rental cars solely on the basis of the vehicle ownership. Under the Graves Amendment, a rental car company could not be vicariously liable for its customer’s direct liability while using its rental vehicles solely because they owned the vehicles. Since its enactment, the Graves Amendment contradicted many state vicarious liability laws, including Florida’s, ultimately preempting these laws.
The Florida Legislature enacted Section 627.7483 not only to adopt the principles behind the Graves Amendment, but to extend Graves Amendment protections to the peer-to-peer platforms that facilitate this short-term car rental arrangement and to the vehicle owners who are essentially renting out their personal vehicles for a limited time.
New Law Creates Exemption to Florida’s Dangerous Instrumentality Strict Liability Law
This new statute creates a major carve-out exemption from Florida’s Dangerous Instrumentality Doctrine, which states that an owner of an inherently dangerous tool can be legally responsible for any injuries that result from the use of that tool. Florida has long held that a motor vehicle is a dangerous instrument and, therefore, a person who allows another person to use a vehicle they own can be strictly liable for the other person’s negligence based solely on the ownership of the vehicle. The new Florida law mirrors the language of the Graves Amendment and provides that a vehicle owner is exempt from vicarious liability if they meet two requirements: (1) they are engaged in the business of renting or leasing their vehicle in a peer-to-peer car sharing agreement; and (2) there is no negligence or criminal activity on their part.
Same Exemptions Have Been Provided to Dealerships’ Courtesy Car Benefit
In a separate law passed just last year, these same protections were given to motor vehicle dealerships, codified in Section 324.021. This separate law provides that a motor vehicle dealership, or its leasing or rental affiliate, that gives temporary use of a vehicle to a dealer’s service customer while their vehicle is being serviced may not be vicariously liable for the customer’s negligence while using its vehicle. It requires the dealership to obtain proof of the customer’s insurance, reflecting at least the minimum motor vehicle insurance coverage required in the state, and a copy of the customer’s valid driver license. Even though there is no direct financial relationship between the dealership and the service customer’s use of the courtesy vehicle, the Florida Legislature decided to protect car dealerships with similar Graves Amendment-type protections.
Insurance Requirements Can Be Shared by Any of the Three Parties Involved
The peer-to-peer car sharing statute also requires certain insurance requirements be met, including: (1) personal injury protection coverage in the amount of $10,000; (2) uninsured and underinsured motorist protection; and (3) bodily injury protection. These requirements can be fulfilled by the peer-to-peer platform and/or the shared vehicle owner and/or the shared vehicle driver. The new law specifically excludes ridesharing vehicles, rental vehicles and for-hire vehicles.
Both of these statutes display a vast departure from Florida’s traditional Dangerous Instrumentality Doctrine and negate the strict liability of the vehicle owner in the context of the ever-changing peer-to-peer car sharing relationships. Before enactment of the new laws, Florida courts found very few exceptions to strict liability of vehicle owners, broadly interpreting dangerous instrumentality laws to apply to any person or entity on a vehicle’s title. Legislative changes were necessary to address modifications to the application of dangerous instrumentality laws, and with the enactment of these statutes, the Florida Legislature has shown that it not only recognizes the significance of the Graves Amendment but, also, how it should be applied.
*Catherine is an associate in our Orlando, Florida, office. She can be reached at 407.505.4677 or CBNorris@mdwcg.com.
Defense Digest, Vol. 28, No. 1, April 2022 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2022 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.