Strategies, Challenges, and Answers

Shielding Rental Car Companies From Negligent Entrustment Actions: How Much Is Enough?

In a city that thrives on tourists, Las Vegas’ rental car companies cater to both national and international clientele.  The more rental car drivers that are on the streets, the more likely it is that some of these will cause accidents and injuries.  Keeping that in mind, Plaintiffs’ attorneys often choose to target defendants based on availability rather than liability.  In other words, Plaintiffs’ attorneys will sue not only the rental car driver, but they will also sue the rental car company usually on a theory of negligent entrustment.  The subject of this blog is how rental car companies can defend against such claims.

Car-rental2 When representing Las Vegas based rental car companies, Mills & Associates frequently addresses this issue.  From a practical standpoint, negligent entrustment is difficult to prove.  Absent egregious facts (i.e. the rental is made to a clearly intoxicated driver), there is usually no information to place the rental car company on notice as to whether a renter is a good or bad driver.  Nevertheless, Plaintiffs attempt to keep the rental car companies in the litigation arguing that they should have the right to discovery on the question of whether the rental car company should have looked into the renter’s driving history to determine whether the rental should have been made the first place.

In the defense of rental car companies, Mills & Associates seeks guidance from N.R.S.483.610 which provides as follows:

N.R.S.483.610 Renting motor vehicle to another: Conditions:

1.    No person shall rent a motor vehicle to any other person unless the latter person is then duly licensed under NRS 483.010 to 483.630, inclusive, or, in the case of a nonresident, then duly licensed under the laws of the state or country of his or her residence except as a nonresident whose home state or country does not require that a driver be licensed
2.    No person shall rent a motor vehicle to another until the person has inspected the driver’s license of the person to whom the vehicle is to be rented and compared and verified the signature thereon with the signature of such person written in his or her presence.
3.    Every person renting a motor vehicle to another shall keep a record of the registration number of the motor vehicle so rented, the name and address of the  person to whom the vehicle is rented, the number of the license of the latter person and the date and place when and where the license was issued. Such record shall be open to inspection by any police officer or officer of the Department.

This statute implies that the rental car company has no duty to conduct any investigation into a renter’s driving background beyond the scope of the statutory language. Consequently, it would appear that compliance with the statute satisfies any duty the rental car company has under Nevada law, thereby shielding the same from liability for negligent entrustment.  It is this statute, combined with an appropriate affidavit demonstrating that the rental company complied with the statute that should be a sufficient foundation for a Partial Summary Judgment in favor of the rental car company.  This may effectively shift the burden to the Plaintiff to produce evidence to the contrary.  Will such a tactic be effective?  We have blogged about the likelihood that Motions for Summary Judgment will be granted in Las Vegas HERE.  Nevertheless, it may be worth a try to reduce the risk of exposure to the company itself.  If the case comes to trial, this same evidence will be useful to demonstrate to the jury the rental car company did what the law required.

In conclusion, strict compliance with the statutory provisions of NRS 483.610 appears to provide a sufficient basis for defeating a negligent entrustment claim, which might otherwise constitute a long haul in the litigation process.

Additional information on rental car issues may be found on our Nevada Coverage Law blog.  Just click HERE.

About Michael Mills

Mr. Mills practices in the area of civil litigation and appeals, with particular experience in matters involving trucking liability, insurance defense, insurance coverage, premises liability, products liability and defense of personal injury. Mr. Mills is a member of the Trucking Insurance Defense Association, the Defense Research Institute Trucking Committee and the Nevada Motor Transport Association. Mr. Mills is licensed to practice before the Nevada Supreme Court and the Utah Supreme Court. He is also licensed to appear before the United States Supreme Court, the U.S. District Courts for the Districts of Nevada and Utah, as well as the U.S. Court of Appeals for the Ninth Circuit. Mr. Mills has created 3 Blogs for the benefit of the insurance industry. He serves as editor and publisher of the Nevada Insurance Law Blog, the Nevada Coverage and Bad Faith Blog and the Nevada Trucking Law Blog.

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