Danler v. Rosen Auto Leasing, Inc.
| Decision Date | 07 April 2000 |
| Docket Number | No. S-98-577.,S-98-577. |
| Citation | 609 N.W.2d 27,259 Neb. 130 |
| Parties | Kevin DANLER, appellant, v. ROSEN AUTO LEASING, INC., a Nebraska corporation, appellee. |
| Court | Nebraska Supreme Court |
Patrick J. Ickes, of Baird, Holm, McEachen, Pedersen, Hamann & Strasheim, Omaha, for appellant.
John T. Rogers, Omaha, for appellee.
This is an appeal from the grant of a demurrer and the dismissal of Ms. Kevin Danler's petition that sought recovery from Rosen Auto Leasing, Inc. (Rosen), for property damage sustained when her automobile was struck by a vehicle leased by Rosen to Theresa Wilburn. The issue presented is whether a company in the business of leasing automobiles can be held liable in negligence when the lessor company is aware that the liability insurance provided by the lessee at the inception of the automobile lease has expired and the lessor fails to take steps to prevent the lessee from operating the vehicle without proof of insurance. For the reasons that follow, we affirm the judgment of the district court.
This case arises out of a petition filed by Danler in the district court, wherein she sought recovery from Rosen for property damage caused to her 1996 Chevrolet Corsica when it was hit by a vehicle driven by Will Hodge. At the time of the accident, Hodge was driving the vehicle with permission from the lessee of the vehicle, Wilburn. Danler alleges the following facts, restated, in her petition:
Wilburn leased a Ford Explorer sport utility vehicle from Rosen on April 9, 1997. Prior to delivering the vehicle to Wilburn, Rosen required her to show proof of liability insurance on the vehicle. After providing Rosen with proof of insurance and obtaining possession of the Explorer, Wilburn received notice that her insurance coverage was canceled due to her failure to pay premiums. The company with which Wilburn had insurance also notified Rosen of the cancellation because Rosen was designated as the loss payee on the policy. The cancellation became effective on May 27, 1997. Throughout the entire course of events, Rosen held legal title to the Explorer.
After Rosen received notice of the policy cancellation, Rosen took no affirmative steps to ensure that liability insurance was obtained for the vehicle or to prevent Wilburn's operation of the vehicle without proof of insurance. On August 9, 1997, while Danler's vehicle was parked on the street outside her office in Omaha, the Explorer leased by Wilburn and driven by Hodge struck and damaged Danler's vehicle.
As a result of the accident, Danler filed a petition against Rosen alleging, inter alia, that Rosen had an affirmative duty, by virtue of the terms of the lease and as a matter of law, to ensure that its lessee had obtained a policy of liability insurance on the vehicle and that the policy remain in force and effect throughout the term of the lease. Furthermore, Danler alleged that Rosen had breached this duty by not compelling Wilburn to obtain insurance after Rosen became aware of the cancellation of the previous policy and that such breach was the proximate cause of the damages in the instant case.
Rosen demurred to the petition, maintaining that Danler had failed to allege facts sufficient to constitute a cause of action. The district court sustained Rosen's demurrer, providing no specific reasons therefor. Danler did not avail herself of the opportunity given by the trial court to amend her petition and chose to stand on her petition. The trial court dismissed the petition, and Danler timely appealed. Danler thereafter filed a motion to bypass the Nebraska Court of Appeals, which we granted.
Danler claims, consolidated and restated, that the district court erred in (1) finding that no legal duty was owed by Rosen to Danler when Rosen had knowledge that its lessee was operating a motor vehicle without proper insurance or proof of financial responsibility and (2) sustaining Rosen's demurrer and dismissing her petition.
In an appellate court's review of a ruling on a demurrer, the court is required to accept as true all the facts which are well pled and the proper and reasonable inferences of law and fact which may be drawn therefrom, but not the conclusions of the pleader. Prokop v. Hoch, 258 Neb. 1009, 607 N.W.2d 535 (2000). In determining whether a cause of action has been stated, the petition is to be construed liberally. If as so construed the petition states a cause of action, a demurrer based on the failure to state a cause of action is to be overruled. Cobb v. Sure Crop Chem. Co., 255 Neb. 625, 587 N.W.2d 355 (1998).
We initially note that the district court did not state its reasons for sustaining the demurrer. Despite Danler's assignment of error that her petition was dismissed based on a finding by the trial court that Danler was owed no duty by Rosen, there is no such determination in the record before us. Thus, in order to determine whether Danler's petition states a cause of action, we will address the necessary elements to state a negligence claim in order to decide if sufficient facts have been alleged to constitute a cause of action. See Pratt v. Nebraska Bd. of Parole, 252 Neb. 906, 567 N.W.2d 183 (1997). The question with which we are confronted is a question of first impression, specifically, whether, in the absence of any relationship between a lessor of a vehicle and an injured third party, the lessor has an affirmative duty to ensure that its lessee does not operate a leased vehicle without proper liability insurance coverage when the lessor has been given notice that the lessee's liability policy is no longer in effect.
Danler has not sued the operator of the vehicle which allegedly caused the damage to her car but has sued Rosen, as the owner and commercial lessor thereof. Danler's petition sounds in negligence, the thrust of which is that when Rosen became aware of the fact that Wilburn had allowed her insurance on the Explorer to lapse and had failed to obtain liability insurance thereon, Rosen had an affirmative duty by virtue of the lease contract and as a matter of law to ensure that Wilburn obtained liability insurance on the Explorer. Put another way, Danler seeks to impose a duty upon Rosen to compel its lessee to obtain insurance when the policy in effect at the inception of the lease lapses.
The threshold inquiry in any negligence action, of course, is whether the defendant owed the plaintiff a duty. Knoll v. Board of Regents, 258 Neb. 1, 601 N.W.2d 757 (1999). Duty is a question whether the defendant is under any legal obligation for the benefit of the particular plaintiff; and in negligence cases, the duty is always the same—to conform to the legal standard of reasonable conduct in light of the apparent risk. Woollen v. State, 256 Neb. 865, 593 N.W.2d 729 (1999). A duty, in negligence cases, may be defined as an obligation, to which the law will give recognition and effect, to conform to a particular standard of conduct toward another. Id. The question whether a legal duty exists for actionable negligence is a question of law dependent on the facts in a particular situation. Knoll v. Board of Regents, supra.
Actionable negligence cannot exist if there is no legal duty to protect the plaintiff from injury. Id.
In reviewing the applicable statutes, we observe that it is unlawful for an owner of an automobile to seek registration of the same when that owner does not have or keep in effect a current and effective automobile liability policy or proof of financial responsibility. See Neb.Rev.Stat. § 60-312 (Cum.Supp.1996). See, also, Neb.Rev. Stat. § 60-302(2) (Cum.Supp.1996). At all times pertinent to this case, Rosen was the holder of legal title to the Explorer. Notwithstanding the foregoing statutes imposing a statutory duty upon the owner of the vehicle to obtain liability insurance, it is the statutory definition of "owner" that gives us pause when considering the duty urged by Danler in this case.
The Legislature has defined "owner" as it is to be interpreted in the statutes governing motor vehicle registration. See Neb.Rev.Stat. § 60-301(19) (Cum.Supp. 1996). The statutory definition sets forth that when an automobile is subject to a lease of 30 days or more with an immediate right of possession vested in the lessee, the lessee "shall be deemed the...
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