SJC Affirms Summary Judgment for Auto Dealership / Graves Amendment Applies to Courtesy Vehicle


Attorney Michael Melville recently obtained a ruling from the Supreme Judicial Court that an auto dealership, which provided courtesy vehicles to customers, was not liable to an injured pedestrian.

In 2016, the client auto dealership in New Jersey provided a courtesy vehicle to its customer while performing service on his car.  The customer drove the courtesy vehicle to Boston, Massachusetts.  The customer’s wife was a passenger in the vehicle. The customer allegedly illegally parked the car, left it running, and exited the car to meet with his attorney.  While parked, an enforcement officer allegedly approached and informed the customer’s wife that the illegally parked car had to be moved.  The customer’s wife – who did not hold a driver’s license, nor was she an authorized driver under the courtesy vehicle agreement – moved to the driver’s seat and drove through a red light into a crosswalk, allegedly striking and seriously injuring a pedestrian.

The pedestrian filed suit in the Suffolk Superior Court against multiple parties, including the dealership which was the registered owner of the vehicle.  The pedestrian claimed serious injuries.

The plaintiffs sought to hold the dealership liable under Massachusetts General Laws Chapter 231 Section 85A, arguing that, as the owner of the courtesy vehicle, the dealership was presumptively vicariously liable for the injuries caused by the customer’s wife.  In response to this argument, Attorney Melville argued that a federal law, the Graves Amendment, applied to the courtesy vehicle arrangement and preempted Section 85A.

The Graves Amendment is a federal law enacted in 2005 and provides that “an owner of a motor vehicle that rents or leases the vehicle to a person… shall not be liable under the law of any State… 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.”  This protection extends to owners of vehicles that rent or lease the vehicle, are in the business or trade of renting or leasing vehicles, and are not negligent or criminal in connection with the rental or lease.  The plaintiffs argued that the Graves Amendment did not apply to the dealership in this case because it did meet the requirements for renting or leasing a vehicle, since it did not charge a separate fee for the use of the courtesy vehicle, and it was therefore not a rental.

Attorney Melville argued, and the Supreme Judicial Court agreed, that the dealership received consideration for the vehicle in the form of acquiring the opportunity to perform the repair work on the customer’s car. Attorney Melville argued that since there was consideration the transaction was a rental or lease.  The Supreme Judicial Court defined consideration as “the inducement to a contract; it can take the form of an act, a forbearance, or a return promise bargained for and received by a promisor from a promisee” and held that “Consideration need not take the form of a monetary payment.”  The Supreme Judicial Court accordingly agreed with Attorney Melville and held that there was consideration and that the courtesy vehicle transaction was a “rent” and or “lease” within the meaning of the Graves Amendment.  The Supreme Judicial Court further held that the dealership client was not negligent.  The Supreme Judicial Court accordingly found that the dealership client was entitled to protection under the Graves Amendment and that judgment was appropriate for Attorney’s Melville’s client.

To read the full decision, click here.

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