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The Nevada Law Blogs have written a lot about Rental Car Liability and the Graves Amendment. Those posts need an update as a result of the Findings of Fact, Conclusions of Law and Judgment entered in Avalos v. Estate of Cunningham et al, Eighth Jud. Dist. Ct. Case No. A-22-862769-C (Apr. 14, 2023).
The Avalos case involves a woman who rented a vehicle from Budget Car and Truck Rental of Las Vegas. While driving the rented car, the renter was involved in a parking lot accident. Avalos sued the renter and Budget. Plaintiff Avalos alleged that Budget had negligently entrusted the rental car to the renter because Budget knew or had reason to know that the renter was inexperienced, incompetent or didn’t have a driver’s license. Plaintiff further alleged that Budget was liable as the vehicle’s short-term lessor based on NRS 482.305. This statute was previously treated by The Blog.
Plaintiff filed her case on December 19, 2022. Straight out of the gate, Budget filed its Motion for Summary Judgment on January 9, 2023. Budget’s Motion attacked the idea of vicarious liability arguing the Graves Amendment, 49 U.S. Code § 30106. Budget argued that that law preempted state law and prevented any state law from imposing vicarious liability on rental car companies.
Budget then attacked the allegations of negligent entrustment. Budget argued that it had satisfied the requirements that Nevada law imposed on car rental companies, namely NRS 483.610. That law requires rental car companies to rent only to licensed drivers and to verify the license by inspecting it, comparing the signatures and preserving an image of the license. Budget produced a copy of the license, and a representative of Budget verified by affidavit that it had met the statutory requirements. Finally, Budget cited cases standing for the proposition that possession of a valid, unrestricted driver’s license is evidence of a driver’s competency absent any evidence to the contrary. Cowan v. Jack, 922 So. 2d 559 (La. App. 4 Cir 12/21/05), Batte v. Hendricks, 137 S.W.3d 790, 791 (Tex.App.-Dallas 2004, pet. denied) and Bartley v. Budget Rent-A-Car Corp., 919 S.W.2d 747, 752 (Tex.App.-Amarillo 1996).
In Opposition, Plaintiff cited to NRS 482.305 which purports to give rise to joint and several liability against the rental car company unless the rental car company has insurance in the amount of the state’s minimum automobile liability limits. Plaintiff also said that it was premature and asked the court to delay ruling pursuant to NRCP Rule 56(d) which would allow discovery to proceed.
In its Reply, Budget pointed out that Plaintiff’ did not offer the court any evidence to rebut the fact that the driver’s license proved her competency. Budget then argued that NRS 482.305 and the Nevada cases interpreting it were all preempted by the Graves Act. Budget cited 49 USC § 30106(a) which says that “An owner of a motor vehicle that rents or leases the vehicle . . . shall not be liable under the law of any State. . . by reasons of being the owner of the vehicle.”
The Court found in favor of Budget. In its Findings of Fact, Conclusions of Law, and Judgment, the Court ruled that the Graves Amendment applied to Budget and that the Graves Amendment preempted NRS 482.305.
Budget’s General Counsel Tamer Botros anticipates that his client will continue to see activity on this issue. That is because this decision runs contrary to what Plaintiff’s attorneys have Regularly Argued In The Past.
If you have Nevada Insurance, Coverage or Trucking Law issues that you would like addressed by the Blogs, please send them to mmills@blwmlawfirm.com. We will try to work your question into our schedule. In the meantime, please contact Mike at 702.240.6060×114 with your questions.
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