Negligent Entrustment and You

When Are You Responsible for What Someone Else Does with Your Car?

Every licensed driver in the country goes through the same rite of passage: learning how to drive. Whether you learned from your parents, learned through a school program, or used a private company, every state requires some degree of on-the-road driving experience before it will grant a prospective driver a license. Think about all those times you purchased or rented a car. The dealership checks your license, proof of insurance, and your credit. But once they sell you that car, it is unlikely, absent some ridiculous facts, that the dealership will be responsible for what happens to that car.

Now I want you to think about all those times you let someone else drive YOUR car. Did you check their credit? Did you ensure that they had their own insurance? Have you ever asked to see someone’s drivers license before letting them borrow your car? Have you ever checked someone else’s license before getting in the car with them?

Let’s say for the sake of argument that you are the type of person who requests to examine the drivers license and insurance documents of every driver—just because a person is licensed to drive does not necessarily mean that they are competent to actually operate a car.

So what happens when some driver you let use your car (or other instrumentality) , either through their inexperience, youth, or reckless tendency, causes injury to another through the use of a car (or other instrumentality)? Are you, as the owner, responsible? The answer to that question, like all great legal questions, is that it depends.

Negligent Entrustment Generally: A Brief Overview

Lets start at the top: Everybody has heard the word “negligence,” but what does that word mean in the legal world? Negligence is a type of civil penalty called a “tort”. In English, a “tort” is a civil crime that one person can bring against another to recovery, in most instances, money damages The purpose of having these types of civil penalties is to allow people to hold each other accountable for the choices they make that result in some damage, or injury. A common example of a tort action is a car crash.

In a car crash, a person makes a choice to do, or not do, something that results in two cars colliding. In other words: When cars crash, it happened because someone failed to follow the safety rules that protect all of us on the road. Tort law allows for the injured person to recover, financially, for the harm caused by the conduct of the at-fault party. In a car crash, that takes the form of economic damages, like medical bills or lost wages, and non-economic damages, like the injuries’ impact on a person’s ability to do the things they want to do, the things that make them who they are, things like travelling, working, playing with their children, or pursuing their dreams.

So now that we have “negligence” and “torts” defined, what is Negligent Entrustment, and why should you care? Negligent Entrustment entered the legal scene in Maryland in 1934 when the Maryland Court of Appeals decided to recognize Negligent Entrustment but rejected the definition of the concept given by the Second Restatement of Torts, which is a guide used by many states in forming their tort laws.^[1][2] The Restatement of Torts defines negligent entrustment as:

One who supplies directly or through a third person a chattel for use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience or otherwise, to use it in a manner involving unreasonable risk of physical harm to others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm… ^[3]

In 1989, the Maryland Court of Special Appeals articulated the elements required to establish negligent entrustment as: 1) the making available to another a chattel, 2) which the supplier knows or should have known the user is likely to use in a manner involving risk of physical harm to others; and 3) the supplier should expect to be endangered by its use. ^[4]

You may be asking yourself “Okay, great. But what the heck is a chattel?” I am so glad you asked. A “chattel” is any physical item; any piece of personal property other than real estate. With that in mind, you can see how negligent entrustment might apply to other situations outside of a standard car crash. For example:

Ex.1: A tour company regularly rents jet skis to non-English speakers. However, the company is only capable of providing safety instructions for using the jet skis in English. The tour company knows, or should know, that it is putting its “chattel” into the hands of people who will likely not understand how to operate the chattel, or jet skis, safely. The company is well-aware of the potential dangers that can result from operating a jet ski without proper instruction. Additionally, for the sake of this example, let’s assume that the safety instructor sees the riders operating the jet skis with reckless disregard for other people in the water, but does nothing other than yell to them to “cut it out.” If one of those jet ski-riders slams headlong into a fishing boat, it follows that the supplier of the jet ski (the tour company) should be held responsible for the damage that is caused. After all, they had the responsibility to make sure that their customers understood how to operate the jet skis safely.

Negligent Entrustment in Context: Focus on Relationships

A more relatable example might be when parents allow their child, a new and inexperienced driver, the use of the family automobile.

In order for Person A to be held liable under the theory of Negligent Entrustment as a result of the negligent conduct of Person 2, while Person 2 is driving Person A’s car, there needs to be some compelling circumstances that evidence Person A’ knowledge that Person 2 is a menace. For example:

Ex.2: Dad and Mom are teaching their 16-year-old daughter to drive now that the she has gotten her learner’s permit. Mom and Dad provide her with one of their cars, titled in Mom and Dad’s names, to practice driving while either Mom or Dad are in the car with her. They spend time discussing safe driving practices with her when she is a passenger in their cars. Unfortunately, during one of those practice sessions, the 16-year-old crashes the car into the rear of a car in front of them.

The Restatement specifically itemizes that the “inexperience” of a driver is one reason to find liability on the part of the supplier of the vehicle. However, the Maryland Courts have held that there is “no litmus test to determine whether a supplier had the requisite knowledge of an entrustee’s propensity to use the entrusted chattel in an improper or dangerous manner.”^[5]. This means that, without some specific factual circumstance, the court will not automatically attach liability to the owner of a vehicle under the theory of negligent entrustment.

So what kind of facts should we be looking for in a negligent entrustment claim? Let’s take a look at another example, this time involving employees of a trucking company.

Ex.3: Derrick was hired as a commercial truck driver for XYZ Corp. Derrick does NOT hold a Commercial Drivers License. At the time of Derrick’s hiring, the company did not have any procedures for checking whether newly-hired drivers held a CDL. As a result, Derrick was hired to drive a vehicle that he is not licensed to drive. On his first run, while driving without any kind of supervisor or trainer or a more experienced truck driver, Derrick loses control of his truck, causing a massive crash which resulted in multiple injuries to other drivers.

In the above instance, XYZ Corp supplied a chattel (the truck) to an individual who they should have known would be incapable of operating the truck safely. Derrick would not have caused a crash without a) XYZ Corp. handing over the keys to that 26,000 pound piece of machinery, and b) Derrick having no idea whatsoever how to handle a commercial vehicle of that size and weight.

The example above demonstrates the true goal of negligent entrustment: to hold people accountable for their own negligence. In an any relationship like the examples above, the insurance purchased by the owner of the vehicle will cover another driver that operates that vehicle with the permission and consent of the owner. This means that when someone crashes a car that you own after you have given them permission to drive it, it is YOUR insurance that is going to cover the damage regardless of whether or not you know they can drive safely.

So, what’s the point of negligent entrustment as a legal theory if the injured person has an avenue to recover the expense of their injury through the insurance of the person who owns the vehicle? The point is that both the driver and the owner of the car have acted negligently in these circumstances: the person driving the vehicle did so negligently, resulting in the crash, and the owner of the car acted negligently in entrusting the car to the at-fault driver in the first place. If you only claim negligence on the part of the driver the company, or owner of the vehicle, learns nothing. They fire the driver, tell themselves that this was a one-time occurrence, and proceed with business as usual. But when an injured party brings claims against the company for their driver’s negligence AND bring the claim for the company’s choices regarding their system of entrusting property to their employees, XYZ Corp. and all of the competitors in their industry get the message that they have a responsibility to the public to only allow qualified individuals to operate their heavy machinery.

The civil justice system is designed to provide relief to people who are injured by the conduct of others, to impose liability on those who are responsible, and to deter others in the community from committing similar harmful acts. The theory of negligent entrustment couples well with all three goals of the civil system in that it provides an additional way for the injured party to recover, it imposes liability on those responsible (not just the driver, but the guy who put keys in his hand), and deters this specific company, and other companies in their industry, from operating with the subpar hiring, training, and supervision practices that created the situation with XYZ Corp. in Ex3. above.

End Game: When Will I Be on the Hook for Handing over My Keys?

This answer to this question may be frustrating but the reality is that it depends. Compare the outcome in the example with XYZ Corp. to the example of parents allowing their child use of the family car to gain driving experience. with Ex2. Mom and Dad in Ex 2In the second example, Mom and Dad did nearly everything they could to ensure the safe driving of their 16-year-old. Before allowing her to drive the car, Mom and Dad made sure that she had obtained her learners permit and they discussed safe driving practices with her while they were driving and she was a passenger in their car. Ultimately, the question becomes “What else could they have done?” If the answer is “nothing,” then there is likely no basis to bring a claim for negligent entrustment.

Now look back at the example involving XYZ Corp. In that example, the company had nor process to ensure that newly-hired drivers were actually capable of handling the trucks that they would be required to drive. They hired Derrick without checking his credentials. They put him behind the wheel of a tractor trailer without verifying that he was actually qualified to drive the truck. They put him out on the road without any training in their system and procedures, and without someone there to ensure his maiden voyage went smoothly. Worst of all, as a result of their choice to put their profits over people, Derrick causes a massive crash using their truck.

Here is the bottom line:

• If a vehicle that you own is involved in a crash and the at-fault driver is someone who you allowed to use the car, your car insurance is on the hook for the damage caused by the driver, regardless of whether or not you “negligently entrusted” the car to them.
• When there is “negligent entrustment” between individuals, i.e., when you are aware, or should have been aware, that the person you let drive your car is a menace on the road, or will likely be, if given the right opportunity, negligent entrustment means that you will be named personally in any suit that results—and rightfully so!
• The best way for any vehicle owner to avoid liability under the negligent entrustment theory is to make sure that the people you allow to drive your car are safe drivers. That may include looking into their driving history on the internet, discussing the risks and rewards of safe driving with your soon-to-be teenage drivers or close friends who borrow your car, and to incentivize caution for anyone who will use your vehicles.
• Keeping the roads safe is everybody’s responsibility. Please share with us things you have done to teach your teen drivers how to drive safely, or share with us things that you learned from the person who taught you to drive.

[1] See Rounds v. Phillips, 166 Md. 151 (1934).
[2] The Restatement of Torts is a text written by the American Legal Institute to “restate” common legal principles in the area of Tort Law. There are restatements in various other areas of law as well.
[3] See Second Restatement of Torts §390 (1965).
[4] See Wright v. Neal, 79 Md. App. 20 (1989).
[5] See Morris v. Weddington, 74 MD App 650 (1988)