Topic:
LEASES; MOTOR VEHICLES; LIABILITY (LAW);
Location:
LEASING;
Scope:
Court Cases; Connecticut laws/regulations;

OLR Research Report


The Connecticut General Assembly

OFFICE OF LEGISLATIVE RESEARCH




December 16, 1994 94-R-1057

TO:

FROM: Pamela Lucas, Research Attorney

RE: Motor Vehicle Lessor Liability

You asked for an explanation of the meaning of CGS 14-154a, concerning liability of an owner for damages caused by a rented or leased motor vehicle, and a summary of court interpretations of the provision.

SUMMARY

CGS 14-154a provides:

Any person renting or leasing to another any motor vehicle owned by him shall be liable for any damage to any person or property caused by the operation of such motor vehicle while so rented or leased, to the same extent as the operator would have been liable if he had also been the owner.

It makes an owner who rents out or leases a motor vehicle liable for any personal or property damage caused by the motor vehicle's operation, if the operator (1) was legally in possession of the vehicle and (2) would be liable for such damage. It does not free the operator of liability for his or her negligence, but allows the injured party to sue and recover damages from the owner/lessor in addition to, or in lieu of, the operator.

The remainder of this memo briefly summarizes court interpretations and the legislative history of the statute. Notably the courts construe it to impose on the owner/lessor responsibility for any damages for which the operator would be liable, whether compensatory or punitive. The statute originates in a 1797 statute which imposed treble damages for injuries caused by someone violating certain rules of the road and made the vehicle's owner liable if the driver could not pay.

COURT INTERPRETATIONS

Purpose and General Effect

According to the courts, the primary purpose of CGS 14-154a was not to give the injured person a right of recovery, but to protect highway traffic safety by providing an incentive to the lessor of motor vehicles to rent them to competent and careful operators (Levy v. Daniels' U-Drive Auto Renting Co., Inc., 108 Conn. 333, 336 (1928)).

The statute's imposition of liability on the lessor is “an expression of legislative judgment as to the extent—beyond the limitations of the general principles of respondeat superior and the 'family-car doctrine'-to which the owner of a motor vehicle which he entrusts to another should be liable for the acts of the latter” (Marshall v. Fenton, 107 Conn. 728, 731 (1928)). Thus, in interpreting the statute, the courts generally have looked to its purpose and plain language, rather than interpreting it in light of common law vicarious liability doctrines. (Under the respondeat superior doctrine, a master generally is liable for the acts of his servant, provided the servant acts within the legitimate scope of his authority or employment. Under the 'family-car doctrine,' a car owner generally is liable for the negligence of a member of his family who was using the car as a family car, provided that member had general authority to drive it.)

The courts treat the lessor's liability as a mandatory provision inserted into the lease contract. The lessor and lessee may not contract to limit this liability (see Levy, 108 Conn. at 336, 338; Fisher v. Hodge, 162 Conn. 363, 369-70 (1972)).

The courts view the owner-lessor as the alter-ego of the operator, so that the latter's acts regarding the operation of the vehicle essentially are treated as the acts of the owner-lessor (Graham v. Wilkins, 145 Conn. 34, 42 (1958); Gionfriddo v. Avis Rent-a-Car System, 192 Conn. 280, 285 (1984)).

Operator's Identity

In general the courts have held that the statute imposes liability on the owner/lessor when the operator (1) is the lessee or (2) has come into possession under the lease contract with the express or implied authority of the owner. The lessor is not liable when the operator has wrongfully acquired possession (Graham, 145 Conn. at 37; Connelly v. Deconinck, 113 Conn. 237, 240 (1931)). Recently the Connecticut Supreme Court appears to have interpreted wrongful possession narrowly, focussing on theft, fraud or duress, and permitted liability to be imposed even though the lease contract would have prohibited the particular operator from using the car.

In that case, Fisher v. Hodge, 162 Conn. 363 (1972), the Court held that a lessor could be found liable for damage caused by the adult brother of the lessee, even though the lease contract limited family use of the vehicle to members of the lessee's immediate family. The Court observed that there was no claim that the brother had acquired possession by theft, fraud, or duress. It found merit to the injured plaintiff's claim that the lessor was liable regardless of the rental contract restrictions, based on the legislature's unequivocal declaration that the owner shall be liable “to the same extent as the operator would have been liable if he had also been the owner.” Thus, even if the brother was not an immediate family member, the lessor could be found liable for damages caused by operation of the vehicle with the lessee's permission (id. at 369-71).

Lessor's Liability When Worker's Compensation Law Prohibits Injured Party's Recovery From Lessee

The courts have held that if the vehicle operator and injured person are both employees of the lessee, the lessor may still be liable to the injured person under CGS 14-154a, even though under the worker's compensation statute the injured person may not sue the lessee. The worker's compensation statute is not a defense to the lessor under CGS 14-154a. This is because the latter provision imposes on the lessor the separate liability of the operator, not the lessee (Farm Bureau v. Mutual Automobile Insurance Co., 141 Conn. 539, 543 (1954)). The lessor may then recover from the lessee the amount he was compelled to pay as damages, regardless of the injured party's inability to recover from the lessee (id. at 544).

Punitive Damages

The courts have held that CGS 14-154a allows an injured party to recover exemplary or punitive damages from the lessor, when such damages may be assessed against the operator (Gionfriddo, 192 Conn. at 285; Lanese v. Carlson, 32 Conn. Supp. 163 (1975)).

In Gionfriddo the Connecticut Supreme Court reasoned that this was a logical conclusion in light of its construction of the statute as making the owner-lessor the alter-ego of the operator. The Court rejected arguments that its interpretation should be governed by common law restraints on the imposition of punitive damages based on vicarious liability. Instead, the Court emphasized that the statutory mandate of CGS 14-154a imposes liability to a greater extent than vicarious liability at common law. The statute's broad reference to “any damage to any person or property” must, according to the Court, be construed in light of the statutory purpose to protect the public from unsafe drivers, and thus includes any damages, whether compensatory, exemplary, or treble (id. at 288-290).

LEGISLATIVE HISTORY

Origins in 1797 Treble Damages

According to Gionfriddo, the legislative roots of CGS 14-154a are found in a statute enacted in 1797 known as “An Act to Regulate Stage and Other Carriage Drivers.” This statute imposed treble damages for injuries caused by someone violating certain rules of the road, and made the vehicle's owner liable if the driver could not pay.

In 1905 the legislature amended the statute to limit an owner's liability to “actual” damages, and to situations in which the driver was shown to be the owner's agent or the owner was negligent in his entrustment of the vehicle to the driver (1905 Public Acts, Ch. 216, 4). The statute was repealed in 1921, and replaced in 1925 with a provision that “any person renting or leasing to another any motor vehicle owned by him shall be liable for any damage to any person or property caused by operation of such motor vehicle while so rented or leased” (Public Acts 1925, Ch. 195, 21). In 1929 the legislature added the phrase “to the same extent as the operator would have been liable if he had also been the owner” (Public Acts 1929, Ch. 256). This language is now codified at CGS 14-154a (Gionfriddo, 192 Conn. at 288).

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