Opinion
No. CV 05-5001192 S
April 6, 2010
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (#128)
I. PROCEDURAL AND FACTUAL BACKGROUND
On December 7, 2005, the plaintiffs, James Peterson and Linda Peterson, filed a six-count amended complaint against the defendants, Tyreise Swain, DCFS Trust (also known as Daimler Chrysler Services North America, LLC) and Mercedes-Benz Credit Corporation for damages arising out of an automobile accident. In their complaint, the plaintiffs allege the following. On November 9, 2003, James Peterson was operating a motor vehicle in New Haven, Connecticut when a motor vehicle operated by Swain, and owned by the defendants DCFS Trust and Mercedes-Benz Credit Corporation, struck Peterson's vehicle, thereby causing injury. Because Swain was given permission to operate the vehicle rented from the defendants, the defendants are liable for the damages sustained by the plaintiffs. The defendants' carelessness and negligence caused the collision as the defendants were negligent in the following ways: they failed to put into effect safeguards to establish that Swain had insurance coverage; they failed to properly screen Swain prior to leasing him a vehicle; they knew or should have known that Swain was an unfit lessor; they violated Connecticut General Statutes § 14-112 by failing to maintain insurance on the leased motor vehicle; and they failed to adequately monitor the lessee's maintenance of insurance coverage. As a result of the collision and the defendants' carelessness and negligence, James Peterson suffered physical injuries, past and expected future medical expenses, a reduction in his ability to enjoy life's activities and a diminution of his earning capacity. His wife, Linda Peterson, has lost the care, companionship and consortium of her husband. The plaintiffs seek monetary damages.
On April 18, 2007, Swain was defaulted for failure to appear. The remaining defendants have filed the pending motion for summary judgment, seeking to prevail on counts three through six.
Hereafter, reference to "the defendants" refers to DCFS Trust and Mercedes-Benz Credit Corporation.
On December 23, 2005, the defendants filed an answer denying the plaintiffs' allegations and filed special defenses to the action. First, the defendants claim that James Peterson's injuries were caused by his own negligence in that he was inattentive, failed to keep a proper lookout and failed to turn the motor vehicle to the left or right so as to avoid a collision. Second, the defendants claim that they cannot be held liable as the contract between Mercedes-Benz Credit Corporation and DCFS Trust was void ab initio due to the fraud and misrepresentations of the alleged lessee. Third, the defendants claim they cannot be held liable because, at the time of the collision, the vehicle owned by the defendants was stolen and/or operated by persons who did not have the permission of the defendants. Finally, the defendants claim that the plaintiffs' cause of action is barred by federal statute, 49 U.S.C. § 30106. On September 4, 2007, the plaintiffs filed a response denying all allegations set forth in the defendants' special defenses.
On January 13, 2010, the defendants filed a motion for summary judgment and a memorandum of law in support of their motion. The plaintiffs filed an objection to the motion, and the defendant filed a reply to the objection. The plaintiffs' surreply was filed on January 26, 2010, and argument was heard on the matter at short calendar on February 1, 2010.
This motion for summary judgment (#128) is identical to the motion for summary judgment that the defendants had originally filed on June 5, 2008 (#114). The June 5, 2008 motion was never heard at oral argument. The exhibits attached to the June 5, 2008 motion were incorporated by reference into the present motion for summary judgment. Furthermore, the arguments made in the plaintiffs' original objection to the motion for summary judgment, filed on September 16, 2008, as well as the defendants' reply to the objection, filed on September 25, 2008, were also incorporated by the parties' arguments at short calendar on February 1, 2010.
II DISCUSSION
"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Internal quotation marks omitted.) Durrant v. Board of Education, 284 Conn. 91, 99-100 n. 7, 931 A.2d 859 (2007). Further, "[i]n seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact . . . [The movant must show] the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law." (Emphasis added; internal quotation marks omitted.) Zielinski v. Kotsoris, 279 Conn. 312, 318, 901 A.2d 1207 (2006). "When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue . . . Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue." (Citations omitted; internal quotation marks omitted.) Allstate Ins. Co. v. Barron, 269 Conn. 394, 405-06, 848 A.2d 1165 (2004).
The defendants move for summary judgment "on the grounds that no genuine issue of material fact exists and the defendants are therefore, entitled to judgment as a matter of law." The defendants argue in support of their motion that they cannot be found liable because the vehicle which caused the collision was insured pursuant to General Statutes § 14-154a, and because the Graves Amendment, 49 U.S.C. § 30106, preempts state tort suits which seek to impose liability on owners or lessors for injuries that arise without any negligent maintenance or criminal wrongdoing on the part of the owner. They also argue that they cannot be found liable as the lease is invalid ab initio since it was fraudulently obtained. Finally, the defendants argue that they cannot be found liable as the plaintiffs cannot prove the elements necessary for holding the defendants vicariously liable. That is, the plaintiffs will be unable to prove that the accident was foreseeable or that Swain had the defendants' permission to use or operate the vehicle. In support of their arguments, the defendants submit the following evidence: the notarized affidavit of Marco G. DeSanto, the Assistant General Counsel of Daimler Financial Services; a copy of the Mercedes-Benz credit application (business credit application); certificate of authority from Life Dental, Inc.; a photocopy of Jordan Raider's Texas drivers license; a copy of a temporary insurance identification card from Progressive Insurance Company; a copy of a Connecticut motor vehicle lease agreement; a Connecticut department of motor vehicle certificate of title; an uncertified copy of the police accident report from the November 9, 2003 accident; an uncertified copy of the case incident report from the New Haven police department, detailing an investigation into the November 9, 2003 accident; and a letter and notarized affidavit of fraud from James Raider to Daimler Chrysler Service.
On July 8, 2008, the defendants submitted an affidavit that failed to state the affiant's name, whether the affiant had reached eighteen years of age, whether the affiant understood the obligations of an oath and the details of the affiant's relationship to any of the defendants. The plaintiffs objected to the introduction of the affidavit as evidence on the ground that it was legally insufficient pursuant to Practice Book § 17-46. In order to remedy the deficiencies of the original affidavit, the defendants filed the affidavit of Marco G. DeSanto on September 25, 2009.
DeSanto's affidavit complies with the requirements of Practice Book § 17-46 and is admissible as evidence. The July 8, 2008 affidavit, however, will not be considered by the court.
In their objection to the defendants' motion, the plaintiffs argue that the action is not barred by the Graves Amendment because they have alleged "negligence in connection with the lack of due diligence on the part of the lessor" and further, that "there was criminal conduct [on behalf of the defendants] by failing to undertake steps to see that the motor vehicle maintained its financial responsibility." The plaintiffs also argue that the defendants are parties to the lease agreement because the defendants obtained the lease on the same day it was executed by Swain at the car dealership, thereby making "[t]he lease agreement . . . effectively an arm's length transaction between the [d]efendants and identity thief Tyreise Swain." The plaintiffs contend, therefore, that the defendants cannot defend the present action by arguing that they should not be held liable as a purchaser of a lease agreement obtained by fraud when genuine issues of fact exist regarding whether the defendants "used adequate safeguards to keep their car out of the hands of an unfit driver." The plaintiffs assert that "[a] reasonable factfinder could find that the defendants intentionally ignored the identity theft in order to obtain the financial benefits of the lease while passing substantial risk on to the driving public."
As a final argument, the plaintiffs assert that the court should deny summary judgment as genuine issues of fact exist regarding whether the defendants had adequate screening measures in place to keep unfit drivers out of their cars and whether an accident of the nature alleged in the complaint was a foreseeable result of the defendants placing their vehicle in the hands of an unfit driver. In support of their arguments, the plaintiffs rely on a photocopy of Jordan Raider's Texas drivers license; a copy of a temporary insurance identification card from Progressive Insurance Company; a copy of a Connecticut motor vehicle lease agreement; an uncertified copy of the police accident report from the November 9, 2003 accident; and an uncertified copy of the case incident report from the New Haven police department, detailing an investigation into the November 9, 2003 accident.
A Admissibility of Evidence
As a preliminary matter, the court must determine whether the documents submitted by the parties in support of their respective arguments are admissible before the court as evidence. "[B]efore a document may be considered by the court in support of a motion for summary judgment, there must be a preliminary showing of [the document's] genuineness, i.e., that the proffered item of evidence is what its proponent claims it to be. The requirement of authentication applies to all types of evidence, including writings . . . Documents in support of or in opposition to a motion for summary judgment may be authenticated in a variety of ways, including, but not limited to, a certified copy of a document or the addition of an affidavit by a person with personal knowledge that the offered evidence is a true and accurate representation of what its proponent claims it to be." (Citation omitted; internal quotation marks omitted.) New Haven v. Pantani, 89 Conn.App. 675, 679, 874 A.2d 849 (2005). Despite this rule, however, uncertified documents may be "admitted at trial without objection to create an evidentiary foundation for the determination that a genuine issue of material fact exists . . ." Barlow v. Palmer, 96 Conn.App. 88, 92, 898 A.2d 835 (2006). In the present case, both parties rely upon uncertified police reports as evidence. Because neither party has objected to the use of unauthenticated evidence, the court will consider such documents when ruling on this motion for summary judgment.
Considering the affidavits and other documentary proof submitted by the parties, the court finds the following facts to be undisputed. DCFS USA, LLC is the successor in interest to Mercedes-Benz Credit Corporation and is the sub-servicing agent for DCFS Trust. New Country Motor Cars, Inc., located in Hartford Connecticut, is a Mercedes-Benz dealership that does business with Mercedes-Benz Credit Corporation. On September 19, 2003 Swain falsely identified himself as Jordan Raider, the President of Life Dental, Inc., and sought to lease a Mercedes-Benz 2004 C230K Sports Sedan from New Country Motor Cars. In order to obtain financing for the vehicle, New Country Motor Cars sent to Mercedes-Benz Credit Corporation a business credit application and a certificate of authority executed by Swain, posing as Raider, on behalf of Life Dental, a copy of Raider's Texas driver's license and a copy of a temporary insurance identification card issued by Progressive Insurance Company, policy number 574317320. The business credit application and certificate of authority contained personal information about Raider, including his social security number, as well as Life Dental's tax identification number. Swain, posing as Raider, represented on the business credit application that he was born on May 11, 1937, and had been renting an apartment in Hamden, Connecticut for $1,500 per month for the last year and eleven months. He also represented that he had been a self-employed dentist for the last thirty-nine years and eleven months and earned a gross salary of $320,000. By presenting the temporary identification card issued by Progressive, Swain, posing as Raider, represented that Life Dental had insured the 2004 Mercedes-Benz C230K Sports Sedan with coverage that became effective as of September 19, 2003, and would not expire for 60 days thereafter.
Upon running a credit check, Mercedes-Benz Credit Corporation discovered that Raider, acting as a guarantor, had an excellent credit record. Financing for the lease of the car was approved. Swain, posing as Raider and acting on behalf of Life Dental, executed a Connecticut vehicle lease agreement with New Country Motor Cars on September 19, 2003, for the lease of a Mercedes-Benz 2004 C230K Sports Sedan. Pursuant to a term in the lease agreement, DCFS Trust became the owner of the lease at the moment the lease was executed. The department of motor vehicles registered DCFS Trust as the owner of the vehicle on the certificate of title.
On November 9, 2003, an automobile accident occurred between James Peterson and the operator of the Mercedes-Benz 2004 C230K Sports Sedan that defendant DCFS Trust owned. Officer Hoyte of the New Haven police department observed the accident. When Hoyte approached the driver of the Mercedes-Benz, the operator informed Hoyte that he was not injured, but the operator of the other vehicle may be seriously injured. When Hoyte went to assist James Peterson, the operator of the Mercedes-Benz fled the scene on foot. Hoyte and the New Haven police department initiated an investigation to discover the identity of the driver of the Mercedes-Benz. Swain was ultimately identified as the operator of the Mercedes-Benz. During the course of the investigation, Hoyte spoke with Progressive and discovered that Swain was the stated policy owner of policy number 574317320. Hoyte also discovered that the policy taken out to cover the Mercedes-Benz 2004 C230K Sports Sedan was both effective and canceled on September 19, 2003.
On December 2, 2003, the real Jordan Raider notified the defendants that fraud had been committed using his identification. In an affidavit of fraud, Raider attested that at no time did he prepare, sign or submit a credit application to Mercedes-Benz Credit Corporation for the purchase of a Mercedes-Benz, he did not authorize anyone to submit a credit application on his behalf or to use his credit, he did not sign a lease for the purchase or lease of a Mercedes-Benz, he did not authorize another to sign a lease for the purchase or lease of a Mercedes-Benz, he has never been in possession of the Mercedes-Benz and any use of his name, credit history, social security number or income information was fraudulent and without his knowledge and consent.
B Plaintiff's Prima Facie Case
The court begins its analysis of the merits of the defendants' motion by examining the defendants' contention that they are entitled to judgment as a matter of law because the plaintiffs cannot prove their prima facie case. The defendants contend that they cannot be held vicariously liable under General Statutes § 14-154a for the motor vehicle accident as Swain did not have their permission to use the vehicle. The defendants further argue that the plaintiffs cannot prove causation as they cannot demonstrate that the accident was foreseeable. Finally, the defendants argue they cannot be held liable pursuant to § 14-154a because the vehicle was insured at the time the lease was executed. The plaintiffs contend, however, that the defendants' issuance of the lease in the face of blatant identity theft makes Swain an authorized driver under the lease, and that the "[d]efendants' willingness, eagerness even, to treat Swain as Jordan Raider despite substantial evidence that he was not Raider made Swain `a person who had possession of the vehicle in accordance with the lease agreement.'" Further, the plaintiffs argue that whether the accident was foreseeable is a question for the jury and that "[i]t is not a big leap for the jury to connect that an individual undertaking . . . fraudulent steps [to obtain a lease] would be an unfit driver having demonstrated his irresponsibility and criminal intent."
As an initial matter, the court takes notice of the plaintiffs' failure to comply with Practice Book § 10-3. This section provides that "[w]hen any claim made in a complaint . . . is grounded on a statute, the statute shall be specifically identified by its number." Practice Book § 10-3(a). "[T]his rule has been construed as directory rather than mandatory . . . As long as the defendant is sufficiently apprised of the nature of the action . . . the failure to comply with the directive of Practice Book § 10-3(a) will not bar recovery." (Citations omitted.) Spears v. Garcia, 66 Conn.App. 669, 675-76, 785 A.2d 1181 (2001), aff'd, 263 Conn. 22, 818 A.2d 37 (2003). In the present case, though not identified in the complaint, the facts alleged by the plaintiffs give rise to the inference that their vicarious liability action, against the defendants is premised on General Statutes § 14-154a.
"[I]n Connecticut, we have long eschewed the notion that pleadings should be read in a hypertechnical manner. Rather, [t]he modern trend, which is followed in Connecticut, is to construe pleadings broadly and realistically, rather than narrowly and technically . . . [T]he complaint must be read in its entirety in such a way as to give effect to the pleading with reference to the general theory upon which it proceeded, and to do substantial justice between the parties . . . Our reading of the pleadings in a manner that advances substantial justice means that a pleading must be construed reasonably, to contain all that it fairly means, but carries with it the related proposition that it must not be contorted in such a way so as to strain the bounds of rational comprehension." (Internal quotation marks omitted.) Dimmick v. Lawrence Memorial Hospital, Inc., 286 Conn. 789, 802, 945 A.2d 955 (2008).
Because the plaintiffs in the present case have alleged that the defendants are liable for the plaintiffs' injuries because the defendants "gave permission" to Swain and "allowed" Swain to operate the vehicle, the court can reasonably construe the plaintiffs' complaint as alleging negligence pursuant to General Statutes § 14-514a. In a similar case, Petrushonis v. Andrews, Superior Court, judicial district of Ansonia-Milford at Derby, Docket No. CV 07 5003502 (October 20, 2009, Bellis, J.), the court considered the merits of a plaintiff's vicarious liability claim against a defendant-lessor, even though the plaintiff had failed to identify § 14-154a anywhere in the complaint.
1 Authorized Driver
General Statutes § 14-154a(a) provides that "[a]ny 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." "[T]he application of this statute is limited to situations in which a driver authorized under the terms of the lease was operating the vehicle." Moncrease v. Chase Manhattan Auto Finance Corp., 98 Conn.App. 665, 668, 911 A.2d 315 (2006). Section 14-154a imposes "on one who rents or leases a motor vehicle to another the same liability as that of its operator, provided the vehicle, at the time in question, is being operated by one in lawful possession of it pursuant to the terms of the contract of the rental." (Internal quotation marks omitted.) Pedevillano v. Bryon, 231 Conn. 265, 268, 648 A.2d 873 (1994).
The defendants rely on Izzo v. GMAC, Superior Court, judicial district of New Haven, Docket No. 01 0453550 (May 28, 2004, Corradino, J.) ( 37 Conn. L. Rptr. 181), in support of their argument that they cannot be held vicariously liable because Swain did not have permission to use the vehicle. In Izzo v. GMAC, the court granted the defendant-lessor's motion for summary judgment on the ground that the operator of the vehicle at the time of the accident was not an authorized user, but rather was a thief who had stolen the car keys and vehicle from the authorized user. The court ultimately held that "a thief cannot be an authorized driver of a rented vehicle." 37 Conn. L. Rptr. 181, 182.
The facts of this case are significantly different than the facts in Izzo v. GMAC. This is not a case whereby an independent third party stole a leased vehicle from the lessee before causing the plaintiff harm. Rather, in this case, the plaintiffs have introduced evidence demonstrating that the same man that was operating the leased vehicle at the time of the November 9, 2003 accident was the same man that had executed the September 19, 2003 vehicle lease agreement, albeit using a different name. Because the plaintiffs have introduced evidence that the same man that the lessor placed in possession of the leased vehicle was the same man involved in the November 9, 2003 accident, the plaintiffs have demonstrated that a genuine issue of material fact exists as to whether Swain was an authorized driver.
The plaintiffs do not dispute that the lease was executed in the name of "James Raider." Rather they argue that the same individual, Swain, who executed the lease and was given possession of the vehicle from the lessor was also the same individual operating the vehicle at the time of the accident.
2 Foreseeability
The defendants also argue that they cannot be held liable pursuant to § 14-154a because the accident was not foreseeable. "With respect to the element of causation, a plaintiff must establish that the defendant's conduct legally caused the injuries, that is, that the conduct both caused the injury in fact and proximately caused the injury . . . The test for cause in fact is, simply, would the injury have occurred were it not for the actor's conduct . . . The test of proximate cause is whether the defendant's conduct is a substantial factor in producing the plaintiff's injury. The substantial factor test asks . . . whether the harm which occurred was of the same general nature as the foreseeable risk created by the defendant's negligence." (Internal quotation marks omitted.) Archambault v. Soneco/Northeastern, Inc., 287 Conn. 20, 32-33, 946 A.2d 839 (2008). "[T]he analysis of foreseeability logically cannot be extended so far that the term `general harm' incorporates any accident . . . with no consideration given to the direct cause of the accident." Lodge v. Arett Sales Corp., 246 Conn. 563, 574, 717 A.2d 215 (1998). "[T]he proximate cause requirement must be used to temper the expansive view of causation in fact so as to exclude remote or trivial [actual] causes of harm." (Internal quotation marks omitted.) Demers v. Rosa, 102 Conn.App. 497, 505, 925 A.2d 1165, cert. denied, 284 Conn. 907, 931 A.2d 262 (2007).
The defendants contend that "[t]he accident at issue was caused by the co-defendant Swain and not by the purported negligence of the undersigned defendants in allegedly failing to ensure coverage, screen the co-defendant and/or determine that the co-defendant was an unfit lessee" and that "impos[ing] liability on these defendants would be akin to holding them accountable for limitless unforseen consequences of the actions of third parties." In support of their argument, the defendants rely on Escaleria v. Powell, Superior Court, judicial district of Fairfield, Docket No. CV 06 5004566 (November 6, 2007, Matasavage, J.) ( 44 Conn. L. Rptr. 468). In Escaleria v. Powell, the court granted a rental car company's motion to strike the plaintiff's vicarious liability claim on federal preemption grounds after the court determined that the rental car company's negligence in failing to assure that the operator maintained insurance coverage was not the proximate cause of the automobile accident which injured the plaintiff. 44 Conn. L. Rptr. 468, 470.
The present case differs from Escaleria v. Powell, as the plaintiffs have alleged that the defendants engaged in negligent behavior that extends beyond failing to assure that the lessee maintained insurance on the vehicle. In their amended complaint, the plaintiffs claim that the defendants' carelessness and negligence caused the collision as the defendants failed to properly screen Swain prior to leasing him a vehicle and they knew or should have known that Swain was an unfit lessee. As proof that genuine issues of material fact exist as to whether the accident was a foreseeable consequence of such behavior, the plaintiffs introduced evidence that the documents submitted by Swain for the lease of the Mercedes-Benz, and the representations made thereon, contained inconsistencies which created red flags that should have placed the defendants, through their agent New Country Motor Cars, on notice that Swain was attempting to obtain the vehicle in a fraudulent and criminal manner.
Issues of fact remain as to the relationship between the dealership, New Country Motor Cars, and the defendants. The plaintiffs have presented evidence that the dealership may have been acting on behalf of the defendants in securing the lease of the vehicle. The language of the lease itself, which creates an automatic assignment of right in favor of the defendant DCFS Trust, indicates that the transaction may have been an arms length transaction between the defendants and Swain (posing as Raider): "By signing below, the Lessor (or if DCFS Trust is Lessor, through its attorney-in-fact) accepts the terms and conditions of this Lease. If Lessor is not DCFS Trust, Lessor assigns all right, title, and interest in this Lease, Vehicle and Guaranty to DCFS Trust."
Evidence that should have placed the defendants on notice included the following. Twenty-five-year-old Swain presented a Texas drivers license, which listed a date of birth of June 17, 1937, as proof that he was the sixty-six-year-old Raider. On the business credit application, Swain represented that he had been self-employed as a dentist for nearly forty years, a period of time extending more than 15 years before he had been born. He also represented that he had been a resident of Connecticut for nearly two years, but presented an out-of-state drivers license. The temporary insurance card issued by Progressive indicated that the policy was taken out in Life Dental's name, but there was evidence that the card was actually taken out in Swain's name.
The New Haven police department case incident report provides that Swain's actual date of birth was April 13, 1978. At the time Swain posed as the sixty-six-year-old Raider in order to lease the Mercedes-Benz, Swain was only twenty-five years old.
The court agrees with the plaintiffs that these inconsistencies create genuine issues of material fact as to whether the defendants knew or should have known about Swain's misrepresentations and whether the defendants intentionally ignored Swain's identity theft in order to obtain the financial benefits of the lease while passing substantial risk onto the driving public. "The question of proximate causation generally belongs to the trier of fact because causation is essentially a factual issue." (Internal quotation marks omitted.) Archambault v. Soneco/Northeastern, Inc., supra, 287 Conn. 33. Because the plaintiffs have introduced evidence which creates genuine issues of fact as to whether the defendants' failure to properly screen Swain, or their act of placing an unfit lessee in possession of their vehicle, was the proximate cause of the plaintiffs' injuries, the defendants' argument as to the foreseeability of the accident fails.
3 Vehicle was Insured
Regardless of whether the accident was foreseeable, the defendants argue that they cannot be held liable pursuant to General Statutes § 14-154a(a) because the leased vehicle was insured. General Statutes § 14-154a(a) contains an exception, which states that it "shall not apply to . . . [a]ny person, with respect to the person's lease to another of a private passenger motor vehicle, if the total lease term is for one year or more and if, at the time damages are incurred, the leased vehicle is insured for bodily injury liability in amounts of not less than one hundred thousand dollars per person and three hundred thousand dollars per occurrence." General Statutes § 14-154a(b)(1).
Pursuant to the terms of the September 19, 2003 lease agreement, the lease of the Mercedes-Benz 2004 C230K Sports Sedan was for a term of forty-one months, and the lessee was to maintain liability insurance for at least one hundred thousand per person and three hundred thousand per occurrence for bodily injury or death and fifty thousand per occurrence for property damage. At the time the vehicle was leased, Swain provided a temporary identification card stating that coverage was effective on the vehicle as of September 19, 2003, and that the coverage complied with the terms of the lease. Because the defendants have no record of notification regarding changes to or the cancellation of the Progressive policy, the defendants maintain that the exception to liability outlined in § 14-154a(b) should apply.
The exception to liability contained in § 14-154a(b) applies only " if, at the time damages are incurred, the leased vehicle is insured." (Emphasis added.) The plaintiffs have introduced evidence that the insurance policy was cancelled on September 19, 2003. Because a genuine issue of material fact exists with respect to whether the leased vehicle was insured at the time of the November 9, 2003 accident, the defendants' argument is unsuccessful.
C The Graves Amendment
The defendants argue that regardless of whether the plaintiffs can prove the elements necessary for their § 14-154a suit, they cannot be held liable for the plaintiffs' injuries as federal law, 49 U.S.C. § 30106, preempts state tort suits which seek to impose vicarious liability upon owners or lessors of motor vehicles. The plaintiffs contend, however, that the Graves Amendment is not applicable to the present case as they are alleging "negligence in connection with a lack of due diligence on the part of the lessor and [that] there was criminal conduct [on the part of the defendants as they] . . . fail[ed] to undertake steps to see that the motor vehicle maintained its financial responsibility."
In their surreply to the defendants' motion for summary judgment, the plaintiffs request that the court stay its decision on the pending motion until the Connecticut Supreme Court issues a decision in Rodriguez v. Testa, Supreme Court Docket No. 18389 (oral argument held December 10, 2009). While Rodriguez v. Testa does involve the Graves Amendment, it differs from the present case as the plaintiffs in this case have alleged negligent conduct on behalf of the defendant-lessor. Because of the significant factual differences between the two cases, the court has decided to proceed in the present case. Accordingly, the plaintiffs' request for a stay is hereby denied.
The Graves Amendment provides that "[a]n owner of a motor vehicle that rents or leases the vehicle to a person . . . shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle . . . 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 . . . 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." 49 U.S.C. § 30106(a). However, "[n]othing in this section supercedes the law of any State or political subdivision thereof (1) imposing financial responsibility or insurance standards on the owner of a motor vehicle for the privilege of registering and operating a motor vehicle; or (2) imposing liability on business entities engaged in the trade or business of renting or leasing motor vehicles for failure to meet the financial responsibility or liability insurance requirements under State law. 49 U.S.C. § 30106(b).
"The law on the question of the effect of 49 U.S.C. § 30106 is well settled. Connecticut can no longer impose vicarious liability on the owner of a rented or leased vehicle . . . Moreover, the preemption of our state statute by the federal act has been recognized by both the Supreme and Appellate courts. (Citations omitted; internal quotation marks omitted.) Vallombroso v. Formica, Superior Court, Docket No. CV 06 500751 (July 16, 2009, Gould, J.) [ 48 Conn. L. Rptr. 328]. See Farmers Texas County Mutual v. Hertz Corp., 282 Conn. 535, 544 n. 9, 923 A.2d 673 (2007) (noting that 49 U.S.C. § 30106, though inapplicable to that action, preemptively eliminated vicarious liability imposed by § 14-154a); CT Page 8341 Moncrease v. Chase Manhattan Auto Finance Corp., 98 Conn.App. 665, 668 n. 1, 911 A.2d 315 (2006) (noting that as of August 10, 2005, federal law preempts state law and abolishes claims for vicarious liability against lease companies)." (Internal quotation marks omitted.) Petrushonis v. Andrews, Superior Court, judicial district of Ansonia-Milford at Derby, Docket No. CV 07 5003502 (October 20, 2009, Bellis, J.). However, while Connecticut can no longer impose vicarious liability on the owner of a rented or leased vehicle, § 30106 does not prevent an owner of a rented or leased vehicle from being liable for its own negligent conduct. "[T]he plain language of the statute states that its protection is unavailable where the rental car company commits independent acts of negligence that lead to the eventual injury at the heart of the litigation." Ellis v. Jamin, Superior Court, judicial district of New London, Docket No. CV 09 5010839 (December 17, 2009, Cosgrove, J.) [ 49 Conn. L. Rptr. 1]. Because the plaintiffs have demonstrated that genuine issues of material fact exist regarding whether the defendants engaged in independent negligent conduct by failing to put into affect safeguards to properly screen Swain prior to leasing him the vehicle or by ignoring the red flags posed by the drivers license, temporary insurance card and business credit application, the plaintiffs' claims are not preempted by the Graves Amendment.
The court has considered the defendants' argument that § 30106(a)(2) applies to claims predicated on criminal wrongdoing or negligent maintenance claims, and not those claims of negligent entrustment, as well as the defendants' reliance upon Dubose v. Transport Enterprise Leasing, LLC, United States District Court, Docket No. 6:08-cv-385-Orl-31DAB (M.D.Fla. January 27, 2009), in support of their argument. The court is not convinced that Congress intended to forestall all suits against defendant-lessors where negligent entrustment is alleged, especially where the plaintiffs have raised substantial issues of fact regarding the defendant-lessors' active disregard of apparent red flags at the time the lease was executed.
D Validity of Lease Agreement
Finally, the defendants argue that they cannot be held liable for the plaintiffs' injuries as the underlying lease is invalid ab initio since it was fraudulently obtained. The defendants claim that they should be able to rescind the lease to avoid liability since they purchased a lease that was executed under false pretenses. The plaintiffs argue, however, that the defendants had reason to know that Swain was not Raider and that a minimal amount of diligence would have confirmed the identity theft and prevented an unfit driver from taking possession of the car. The plaintiffs contend that the defendants' attempt to evade liability by invalidating the lease constitutes bad faith.
"Fraud consists in deception practiced in order to induce another to part with property or surrender some legal right, and which accomplishes the end designed . . . The elements of a fraud action are: (1) a false representation was made as a statement of fact; (2) the statement was untrue and known to be so by its maker; (3) the statement was made with the intent of inducing reliance thereon; and (4) the other party relied on the statement to his detriment." (Internal quotation marks omitted.) Weinstein v. Weinstein, 275 Conn. 671, 685, 882 A.2d 53 (2005). "Where there is a misrepresentation, the fault of the victim in failing to discover the truth does not preclude relief unless it is so extreme as to amount to a failure to act in good faith and in accordance with reasonable standards of fair dealing. 1 Restatement (Second), Contracts § 172." Pacelli Brothers Transportation, Inc. v. Pacelli, 189 Conn. 401, 409, 456 A.2d 325 (1983). "In determining whether the recipient of a misrepresentation has conformed to the standards of good faith and fair dealing, account is taken of his peculiar qualities and characteristics, including his credulity and gullibility, and the circumstances of the particular case, including the fraudulent or innocent nature of the misrepresentations . . . If the recipient knows that the assertion is false or should have discovered its falsity by making a cursory examination, his reliance is clearly not justified and he is not entitled to relief . . . He is expected to use his senses and not rely blindly on the maker's assertion." 1 Restatement (Second), Contracts § 172, comment (b), p. 469-70 (1981).
The plaintiffs have introduced evidence which creates a genuine issue of material fact as to whether the defendants should have discovered Swain's misrepresentations and identity theft by making a cursory examination of the paperwork and identification submitted to them through their agent. Because an examination of the license provided by the twenty-five year old Swain, which listed his date of birth as May 11, 1937, or an examination of the credit application, which stated that the twenty-five year old had been practicing dentistry for nearly forty years, could have placed the defendants on notice that Swain was not who he purported to be, the court cannot find that the defendants were justified in their reliance on the misrepresentations. Whether the defendants were justified in their reliance upon Swain's misrepresentations is a determination more appropriate before a trier of fact.
See note 7.
III Conclusion
The plaintiffs have demonstrated that genuine issues of material fact exist with respect to the defendants' liability. Accordingly, for the foregoing reasons, the defendants' motion for summary judgment is denied.