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Automobile Lessors Beware: Vicarious Liability in Three States

By Pauline P. Clark

A Rhode Island Supreme Court decision has caused lessors to think twice about leasing motor vehicles in the State of Rhode Island. In Oliveira v. Lombardi, 794 A.2d 453 (R.I. 2002), the Rhode Island Supreme Court held that two automobile leasing companies may be held vicariously liable under Rhode Island's vicarious liability statutes for the negligence of drivers operating motor vehicles titled in the leasing companies' name.

The court took a somewhat unique position in combining two cases with similar legal and factual issues. The plaintiff in the first case suffered severe injuries when her car was rear-ended by a teenager driving his father's car leased from Chase Manhattan Automotive Finance Corporation, the registered owner of the motor vehicle. In addition to suing the driver's father, the plaintiff sued Chase as the owner/lessor under Rhode Island's vicarious liability statutes. The plaintiff in the second case also suffered severe injuries in an accident involving a leased motor vehicle, but the lessor in this case was Gold Key Lease, Inc. The plaintiff sued the lessee, the third party operator (as permitted by the lease agreement), and Gold Key. Similar to the Chase case, the plaintiff alleged that Gold Key, as the record owner of the vehicle, was subject to Rhode Island's vicarious liability statutes.

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