The “Graves Amendment” prohibits the imposition of vicarious liability on a category of commercial vehicle lessors for injuries resulting from the negligent use of the leased or rented vehicle, under certain conditions. What happens when a car dealer provides a “loaner vehicle” at no charge to a customer while the customer’s vehicle is in the shop? Does the “Graves Amendment” protect the car dealer from vicarious liability when the customer causes a crash? The Fifth District recently told us the answer is no.

In Romero v. Fields Motorcars of Florida, Inc., 333 So. 3d 746 (Fla. 5th DCA 2022), Natasha Romero appealed a final summary judgment rendered in favor of Fields Motorcars of Florida, Inc. (“Fields”) in her suit seeking to hold Fields vicariously liable under the dangerous instrumentality doctrine for damages she incurred when her vehicle was allegedly struck by a loaner vehicle owned by Fields and driven by its customer, Mr. Abriola. Fields successfully claimed it was immune from liability under the federal Graves Amendment, 49 U.S.C. § 30106(a), which prohibits imposition of vicarious liability on a category of commercial vehicle lessors for injuries resulting from the negligent use or operation of the leased or rented vehicle under certain conditions. Romero argued that the Graves Amendment does not apply where a dealership has provided a complimentary loaner vehicle to its customer because the Graves Amendment expressly applies only in a rental or lease situation. The appellate court agreed and reversed.

The Graves Amendment provides that the:

owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if—

(1) the owner (or an affiliate of the owner) is engaged in the trade or business of renting or leasing motor vehicles; and

(2) there is no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner).

49 U.S.C. § 30106(a). Romero did not contest that Fields was a dealership that buys, sells, leases, and services automobiles, nor did she allege any wrongdoing or negligence on the part of Fields. Rather, the case turned on whether Fields’ provision of the admittedly complimentary loaner vehicle—without its customer knowingly entering into a rental or lease agreement and knowingly providing consideration therefor—brought Fields within the term “owner of a motor vehicle that rents or leases the vehicle.” The appellate court held it does not. Because the plain meaning of the phrase “rents or leases” used in the Graves Amendment does not encompass a dealership’s gratuitous provision of a loaner vehicle, the appellate court reversed the judgment in favor of Fields. The facts of the case were these:

In March 2015, Mr. Abriola and Romero were involved in a vehicle accident in Winter Park. Mr. Abriola was driving a complimentary loaner vehicle obtained from Fields at the time. He explained that he had taken his personal truck, which he had purchased from Fields, back to Fields to have warranty work performed on it and had obtained a loaner vehicle to drive while his truck was being serviced. To obtain the loaner vehicle from Fields, Mr. Abriola signed the “Fields Loaner Agreement,” acknowledging that Fields was providing him with “a loaner car (`Vehicle’) for the express purpose of my personal transportation while my car is being serviced. In consideration for use of the Vehicle, I agree to the following terms and conditions….” Included in those terms was paragraph three, which states that the “Agreement is solely for the purposed [sic] of creating a bailment which allows Customer to use the Vehicle as permitted by the terms and conditions of this Agreement.” Mr. Abriola signed and initialed as required. No payment exchanged hands, and the invoice for the service work reflected a zero charge for the use of the complimentary loaner vehicle.

Although the evidence was clear that Mr. Abriola did not directly pay for the use of the complimentary loaner vehicle, Fields’ contention below was that the cost of the short-term complimentary loaner vehicle is factored into the cost of the customer’s vehicle upon purchase and into the subsequent service costs; as such it had, in fact, received consideration for the loaner vehicle. Fields argued that because there was consideration, the transaction with Mr. Abriola constituted a lease or rental, thus bringing it within the Graves Amendment’s requirement that the owner “rents or leases the vehicle.”

The appellate court, however, held that the mere fact that Fields may have built into the purchase price or service charges the cost of its complimentary loaner vehicles “d[id] not a rent or lease contract make..”

The appellate court first analyzed the language of the Graves Amendment, because the beginning point in interpreting the language of a statute is the language of the statute itself. See Lieupo v. Simon’s Trucking, Inc., 286 So. 3d 143, 145 (Fla. 2019). In the absence of a statutory definition for a given word, noted the court, the words of a statute are to be given their “plain and ordinary meaning.” Barnett v. Dep’t of Fin. Servs., 303 So. 3d 508, 513 (Fla. 2020). Indeed, the Florida Supreme Court has spoken on the issue of statutory interpretation:

In interpreting the statute, we follow the “supremacy-of-text principle”—namely, the principle that “[t]he words of a governing text are of paramount concern, and what they convey, in their context, is what the text means.” Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 56 (2012). We also adhere to Justice Joseph Story’s view that “every word employed in [a legal text] is to be expounded in its plain, obvious, and common sense, unless the context furnishes some ground to control, qualify, or enlarge it.” Advisory Op. to Governor re Implementation of Amendment 4, the Voting Restoration Amendment, 288 So. 3d 1070, 1078 (Fla. 2020) (quoting Joseph Story, Commentaries on the Constitution of the United States 157-58 (1833), quoted in Scalia & Garner, Reading Law at 69).

The appellate court thus recognized that the goal of interpretation is to arrive at a “fair reading” of the text by “determining the application of [the] text to given facts on the basis of how a reasonable reader, fully competent in the language, would have understood the text at the time it was issued.” Scalia & Garner, Reading Law at 33. This, noted the court, requires a methodical and consistent approach involving “faithful reliance upon the natural or reasonable meanings of language” and “choosing always a meaning that the text will sensibly bear by the fair use of language.” Frederick J. de Sloovère, Textual Interpretation of Statutes, 11 N.Y.U. L.Q. Rev. 538, 541 (1934), quoted in Scalia & Garner, Reading Law at 34. See Ham v. Portfolio Recovery Assocs., LLC, 308 So. 3d 942, 946-47 (Fla. 2020). The appellate court continued:

The words “rents” and “leases” are not defined in the Graves Amendment, but they have well-defined meanings. “Rent,” when used as a noun, is the “[c]onsideration paid, usu. periodically, for the use or occupancy of property (esp. real property).” Rent, Black’s Law Dictionary (8th ed. 2004).^[3] “Lease,” as a noun, is defined as to personal property as “[a] contract by which the rightful possessor of personal property conveys the right to use that property in exchange for consideration.” Lease, Black’s Law Dictionary (8th ed. 2004). As a verb, “lease” is defined as meaning “[t]o grant the possession and use of (land, buildings, rooms, movable property, etc.) to another in return for rent or other consideration.” Id. Other dictionaries contain similar definitions. See, e.g., The New Oxford American Dictionary 1434 (2d ed. 2005) (defining, as pertinent here, the noun “rent” as “a tenant’s regular payment to a landlord for the use of property or land” and “a sum paid for the hire of equipment”; defining the verb “rent” as to “pay someone for the use of (something, typically property, land, or a car)” and to “let someone use (something) in return for payment”); The New Oxford American Dictionary 964 (2d ed. 2005) (defining the noun “lease” as “a contract by which one party conveys land, property, services, etc., to another for a specified time, usually in return for a periodic payment”; defining the verb “lease” as meaning to “grant (property) on lease”).

Indeed, said the appellate court, these definitions comport with the longstanding rule that the amount of rent to be paid is an essential element of a lease. See Edgewater Enters., Inc. v. Holler, 426 So. 2d 980, 983 (Fla. 5th DCA 1982) (“[T]he amount of rental is an essential element of a lease, if not the basis for a lease, and an agreement to make a lease, or to renew or extend a lease, that fails to specify either the amount of the rental or a definite procedure to be followed to establish the amount of the rental, is too indefinite to be legally binding and enforceable.”) (footnote omitted); see also Alachua Cnty. v. Expedia, Inc., 110 So. 3d 941, 947 (Fla. 1st DCA 2013) (Padovano, J., dissenting) (collecting definitions of “rent” and “lease”). Statutory interpretation, said the court, requires a fair reading of the text, based on how a reasonable reader would have understood the text, and a reasonable reader competent in English would not contemplate that dropping a vehicle off for service and obtaining a complimentary loaner vehicle constitutes a lease or rental situation: “A gratuitous bailment, yes; a lease or rental, no.”

Had Congress intended the Graves Amendment to include all forms of bailment, reasoned the court, including gratuitous bailments, it could have used the word “bailment” in addition to, or included in, the phrase “rents or leases.”

In sum, said the Fifth District:

… a transaction involving the provision of a complimentary loaner vehicle is not a rental or lease transaction where no money or other consideration is identified by the parties at the time of the transaction; where the purported lessee was not made aware he was entering into a lease; and where there is no indicia of a lease agreement, oral or written. It defies logic to conclude Mr. Abriola was a party to a lease when he himself never agreed to a lease or the terms thereof. All he agreed to, via the Loaner Agreement, was a bailment, as expressly identified in that Agreement, and a gratuitous bailment at that. He did not believe he paid anything for the use of the complimentary loaner vehicle and certainly could not be said to have agreed to the essential terms of any rental or lease.

Because there was no meeting of the minds between Fields and Mr. Abiola as to a lease or rental agreement for the use of the complimentary loaner vehicle and the evidence instead established a gratuitous bailment, the appellate court concluded that the trial court erred in granting summary judgment to Fields based on the protection of the Graves Amendment.