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EmailA tourist arrives at Las Vegas’ McCarran Airport and rents a car. On the way to the hotel, the tourist causes an accident and injures a local driver. The injured driver sues naming both the renter and the rental car company as defendants. Is this proper?
Of course, it depends. If the rental car company rented the car to someone who was intoxicated or who did not furnish proof of a valid driver’s license, there may be grounds for an independent cause of action against the rental car company. But more than 98% of the time, the rental car company should be dismissed as a defendant. Here’s how.
Usually, Plaintiffs argue the rental car company is liable with the rental car driver based on NRS 482.305. That statute imposes liability against the rental car company in a very unique way. NRS 482.305 says the rental car company is jointly and severally liable with the rental driver, but only if the rental car company has not provided the driver with minimum liability insurance coverage or otherwise complied with NRS 482.295
Under NRS 482.305(4), when a Plaintiff sues the rental car company, the presiding Judge is obliged to hold a preliminary hearing in the absence of the jury to determine whether the rental car company has provided insurance or a surety bond. Whenever it appears the rental car company has provided the mandatory insurance or a surety bond or has deposited cash or securities covering the rental car driver in the required amount ($15,000 per person/$30,000 per occurrence), the Judge must then dismiss the rental car company as a Defendant.
In practice, Mills & Associates never waits until the jury has been impaneled to present this defense in favor of the rental car company. We do our best to locate the rental car company’s proof of insurance and then produce a copy to Plaintiff’s attorney as early as possible. We then ask Plaintiff’s attorney to dismiss the rental car company. If the Plaintiff’s lawyer won’t stipulate to dismiss the rental car company, we attach a copy of the proof of adequate coverage to a Motion and ask the court to dismiss the Defendant rental car company.
However, we often face a problem with obstinate Plaintiffs and their attorneys. Early in the litigation, those folks will oppose our Motion to Dismiss the rental car company, arguing that somewhere out in the wide world there might be evidence that the rental car company negligently entrusted the vehicle to the rental driver. Sometimes that forces the rental car company to remain in the costly and unnecessary litigation. Not only that, it can cause discovery, that should be focused on the accident itself, to become sidetracked on questions of the rental car company’s policies and procedures to screen out improper drivers and whether the company complied with those procedures related to this renter. There are strategies to handle these types of situations as well.
Even if it has to wait for the close of discovery, properly insured rental car companies must be removed from the suit. Leaving the name of the rental car company in the caption would be the same as naming the insurance company providing the coverage on the vehicle, something that is never done, since Nevada does not allow for direct actions against insurers. By the same token, when the rental car company can demonstrate it has provided the minimum limits of coverage for the car, and that there is no negligent entrustment, the Court is obliged to dismiss the company that rented the car to the tourist who was unlucky enough to have a mishap on the way from McCarran Airport to the hotel.
Give us a call and Mills & Associates we will gladly discuss those strategies with you.
