Kraemer v. General Motors Acceptance Corp., No. 75580

• Court: United States State Supreme Court of Florida
• Writing for the Court: GRIMES; SHAW; McDONALD
• Citation: 572 So.2d 1363
• Docket Number: No. 75580
• Decision Date: 20 December 1990
• Parties: 15 Fla. L. Weekly S657, 16 Fla. L. Weekly 20 Robert Thomas KRAEMER, Jr., etc., et al., Petitioners, v. GENERAL MOTORS ACCEPTANCE CORPORATION, Respondent.

Page 1363

572 So.2d 1363 15 Fla. L. Weekly S657, 16 Fla. L. Weekly 20 Robert Thomas KRAEMER, Jr., etc., et al., Petitioners,
v.
GENERAL MOTORS ACCEPTANCE CORPORATION, Respondent. No. 75580. Supreme Court of Florida. Dec. 20, 1990.

Page 1364

David J. Abbey of Fox & Grove, Chartered, St. Petersburg, and Thomas P. Fox of Thomas P. Fox, P.A., Tampa, for petitioners.

Larry I. Gramovot of Mallery & Zimmerman, S.C., Wausau, Wis., for respondent.

William C. Owen and F. Townsend Hawkes of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tallahassee, amicus curiae for Florida Auto. Dealers Ass'n.

Jeffrey B. Shapiro and Judy D. Shapiro of Herzfeld and Rubin, Miami, amicus curiae for Florida Motor Vehicle Leasing Group.

GRIMES, Justice.

We review Kraemer v. General Motors Acceptance Corp., 556 So.2d 431 (Fla. 2d DCA 1989), because of its conflict with Susco Car Rental System v. Leonard, 112 So.2d 832 (Fla.1959), and Lynch v. Walker, 159 Fla. 188, 31 So.2d 268 (Fla.1947). We have jurisdiction under article V, section 3(b)(3) of the Florida Constitution.

In May of 1986, Michael A. Green entered into a closed-end lease agreement with General Motors Acceptance Corporation (GMAC) for a 1987 Nissan automobile. The lease was for a term of four years and provided that Green had an option to purchase the automobile at its market value upon the termination of the lease. Green was responsible for maintenance of the leased vehicle and for obtaining the tag and registration. He was also required to obtain liability insurance on the automobile.

On May 6, 1987, Calvin Gary borrowed the automobile from Green. While Gary was driving the automobile the following day, he was involved in an accident with another vehicle which resulted in the death of Marguerite Kraemer. At the time of the accident, Green was five months' delinquent in his payments on the lease, and the liability insurance on the automobile had lapsed for nonpayment.

GMAC sued for declaratory judgment, asserting that it was not liable for the death because GMAC did not have beneficial ownership of the car. Robert Thomas Kraemer, as husband and personal representative of the decedent, counterclaimed seeking damages from GMAC for Gary's negligence on the basis of GMAC's vicarious liability as the owner and lessor. The trial judge entered summary judgment in favor of GMAC. On appeal, Kraemer asserted that GMAC was liable under the dangerous instrumentality doctrine. However, the district court of appeal affirmed the summary judgment for GMAC. The court stated:

Here, GMAC maintained none of the indicia of beneficial ownership. The long-term lessee was free to use the vehicle in any way he chose, consistent with protecting the long-term lessor's financial interest should the lessee elect not to exercise his option to purchase.

Kraemer, 556 So.2d at 434.

Florida's dangerous instrumentality doctrine originated in the case of Southern Cotton Oil Co. v. Anderson, 80 Fla. 441, 468, 86 So. 629, 638 (1920), in which this Court said:

[O]ne who authorizes and permits an instrumentality that is peculiarly dangerous in its operation to be used by another on the public highway, is liable in damages for injuries to third persons caused

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by the negligent operation of such instrumentality on the highway by one so authorized by the owner.

Thereafter, in Lynch v. Walker the Court held that a bailor for hire is vicariously liable for the negligence of the bailee under the dangerous instrumentality doctrine. Finally, in Susco Car Rental System, the doctrine was extended to hold the lessor responsible for damages resulting from the operation of the vehicle by someone other than the person to whom it was rented even though the operation was contrary to the express terms of the lease. There has been no subsequent Florida appellate decision limiting the liability of a lessor for hire under the dangerous instrumentality doctrine until the instant case.

In support of its position, GMAC relies primarily upon Palmer v. R.S. Evans, Jacksonville, Inc., 81 So.2d 635 (Fla.1955). In that case, a man had agreed to buy a car from a used-car dealer and drove it out of the lot. About twenty minutes later, he became involved in an accident in which a third party was injured. Both the car dealer and the driver considered the purchase closed when possession of the automobile was delivered. However, the transaction was not memorialized in writing until a conditional sales contract was signed a few days after the accident. In the ensuing lawsuit by the injured plaintiff, the issue of ownership was submitted to the jury which returned a verdict in favor of the car dealer. On appeal, the court rejected the plaintiff's contention that the car dealer was vicariously liable as a matter of law. The court reasoned that the dangerous instrumentality doctrine would not be served by extending it to one who holds mere naked legal title as security for the payment of the purchase price because under such circumstances "the authority over the use of the vehicle which reposes in the beneficial owner is absent." Id. at 637.

GMAC analogizes the Evans conditional sales contract to a long-term lease and asserts that, as the lessor, it did not have beneficial ownership...