Vargas v. Enterprises Leasing Co.

• Citation: 993 So.2d 614
• Decision Date: 31 October 2008
• Docket Number: No. 4D07-3929.,4D07-3929.
• Parties: Rafael VARGAS, Appellant, v. ENTERPRISE LEASING COMPANY, a Florida corporation, Elizabeth Price, and Jimmy Middleton, Appellees.
• Court: Court of Appeal of Florida (US)

993 So.2d 614

Rafael VARGAS, Appellant, v. ENTERPRISE LEASING COMPANY, a Florida corporation, Elizabeth Price, and Jimmy Middleton, Appellees.

No. 4D07-3929.

District Court of Appeal of Florida, Fourth District.

October 31, 2008.

Marjorie Gadarian Graham of Marjorie Gadarian Graham, P.A., Palm Beach Gardens, and Mariano Garcia of Gonzalez Porcher Alber & Garcia, Lake Worth, for appellant.

David C. Borucke of Holland & Knight LLP, Tampa, for appellee Enterprise Leasing Company, a Florida corporation.

En Banc¹

GROSS, J.

The issue before the court is whether by enacting 49 U.S.C. § 30106, the Graves Amendment, Congress preempted section 324.021(9)(b)2, Florida Statutes (2007), involving short term leases of motor vehicles. We hold that the Florida statute has been preempted and affirm the judgment of the trial court. We conclude that the section is neither a "financial responsibility law" nor a "liability insurance requirement" under the exceptions to preemption in 49 U.S.C. § 30106(b).

Enterprise Leasing Company leased a motor vehicle to Elizabeth Price for a period of less than one year. On February 12, 2006, Mrs. Price's son, Jimmy Middleton, crashed the rental vehicle into the rear end of a car driven by Rafael Vargas. Vargas filed suit against Price, Middleton, and Enterprise. The only count of the complaint directed at Enterprise claimed that the company was vicariously liable as the owner of the motor vehicle, pursuant to section 324.021(9)(b)2. Vargas did not contend that Enterprise was negligent, that its lease of a vehicle to Price was improper, or that it was in any way at fault for the accident. Enterprise filed an amended answer and affirmative defenses, asserting that pursuant to 49 U.S.C. § 30106, it had no liability.

The circuit court granted Enterprise's motion for summary judgment, ruling that the Graves Amendment preempted section 324.021(9)(b)2, which it determined was a vicarious liability provision and not a financial responsibility statute. After the entry of a final judgment consistent with Enterprise's consent to judgment, Vargas timely filed a notice of appeal.

Congress enacted 49 U.S.C. § 30106 in 2005. The two pertinent subsections of the statute important to this appeal provide:

(a) In general.—An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), 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 (or an affiliate of 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 (or an affiliate of the owner).

(b) Financial responsibility laws.—Nothing in this section supersedes 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.

In subsection (a), the statute preempts state laws imposing liability on owners in the business of renting or leasing motor vehicles, except when there is negligence or criminal wrongdoing on the part of the lessor. Subsection (b) excepts from preemption those state "financial responsibility laws" (1) "imposing financial responsibility ... for the privilege of registering and operating a motor vehicle," or (2) "imposing liability" on entities in the "trade or business of renting or leasing motor vehicles" for failing "to meet the financial responsibility or liability insurance requirements under State law."

In 1999, the Florida legislature created statutory caps on the amount of vicarious liability rental car companies could face under the dangerous instrumentality doctrine. Part of Florida's common law, that doctrine "imposes strict vicarious liability upon the owner of a motor vehicle who voluntarily entrusts that motor vehicle to an individual whose negligent operation causes damage to another." Estate of Villanueva v. Youngblood, 927 So.2d 955, 957 (Fla. 2d DCA 2006). "The dangerous instrumentality doctrine is unique to Florida and has been applied with very few exceptions." Aurbach v. Gallina, 753 So.2d 60, 62 (Fla.2000). In 1959, the Florida Supreme Court extended the doctrine to lessors, making them vicariously liable, as owners, for the lessee's negligent operation of a motor vehicle. See Susco Car Rental Sys. of Fla. v. Leonard, 112 So.2d 832 (Fla.1959). Against this legal backdrop, the legislature adopted section 324.021(9)(b)2, which provides:

(b) Owner/lessor.—Notwithstanding any other provision of the Florida Statutes or existing case law:

2. The lessor, under an agreement to rent or lease a motor vehicle for a period of less than 1 year, shall be deemed the owner of the motor vehicle for the purpose of determining liability for the operation of the vehicle or the acts of the operator in connection therewith only up to $100,000 per person and up to $300,000 per incident for bodily injury and up to $50,000 for property damage. If the lessee or the operator of the motor vehicle is uninsured or has any insurance with limits less than $500,000 combined property damage and bodily injury liability, the lessor shall be liable for up to an additional $500,000 in economic damages only arising out of the use of the motor vehicle. The additional specified liability of the lessor for economic damages shall be reduced by amounts actually recovered from the lessee, from the operator, and from any insurance or self-insurance covering the lessee or operator. Nothing in this subparagraph shall be construed to affect the liability of the lessor for its own negligence.

Ch. 99-225, § 28, at 1421-22, Laws of Fla.

Section 324.021(9)(b)2 comes within the preemption language of 49 U.S.C. § 30106(a), since it is a state law that imposes liability upon a lessor "by reason of being the owner of" a motor vehicle. Section 324.021(9)(b)2 states:

The lessor, under an agreement to rent or lease a motor vehicle for a period of less than 1 year, shall be deemed the owner of the motor vehicle for the purpose of determining liability for the operation of the vehicle or the acts of the operator in connection therewith ....

Id. (emphasis added). The statute thus involves precisely that type of vicarious liability targeted by the Graves Amendment, a liability derived from a status as owner, rather than fault. See Kumarsingh v. PV Holding Corp., 983 So.2d 599 (Fla. 3d DCA 2008). Vargas seeks to recover from Enterprise solely on the basis of vicarious liability.

Vargas's lawsuit is preempted unless section 324.021(9)(b)2 falls within the savings clause of section 30106(b). Vargas argues that his lawsuit comes within the savings clause because section 324.021(9)(b)2 is a "financial responsibility law" under section 30106(b). We reject that argument. Although Florida has adopted "financial responsibility laws," as the term was used by Congress, section 324.021(9)(b)2 is not one of them.

A court's "objective [in] interpreting a statute is to determine the drafters' intent." United States v. Grigsby, 111 F.3d 806, 816 (11th Cir.1997). Section 30106(b) speaks to "financial responsibility laws" and "financial responsibility." The federal statute does not define the term "financial responsibility." We therefore assume that Congress used the term according to its ordinary and common meaning, "unless it is apparent from [the] context that the disputed term is a term of art." Garcia v. Vanguard Car Rental USA, Inc., 540 F.3d 1242, 1246 (11th Cir. 2008). "When Congress employs a term of art, it presumptively adopts the meaning and `cluster of ideas' that the term has accumulated over time." Id. at 1246-47 (quoting Med. Transp. Mgmt. Corp. v. Comm'r of I.R.S., 506 F.3d 1364, 1368-69 (11th Cir.2007)). "The starting point for [the] interpretation of a statute is always its language," so that "courts must presume that a legislature says in a statute what it means and means in a statute what it says there." Garcia v. Vanguard Car Rental USA, Inc., 510 F.Supp.2d 821, 829-30 (M.D.Fla.2007), aff'd, 540 F.3d at 1242 (quoting Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 739, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989), and Connecticut Nat. Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992)). One source of common usage is BLACK'S LAW DICTIONARY, which provides these definitions:

Financial responsibility. Term commonly used in connection with motor vehicle insurance equivalents. See also Financial responsibility acts.

Financial responsibility acts. State statutes which require owners of motor vehicles to produce proof of financial accountability as a condition to acquiring a license and registration so that judgments rendered against them arising out of the operation of the vehicles may be satisfied.

BLACK'S LAW DICTIONARY 631 (6th ed. 1990). The common usage of "financial responsibility" thus means an insurance equivalent, that level of security required to pay for damages arising from motor vehicle accidents, as a condition of acquiring a driver's license or registering a vehicle. As a term of art, this is the meaning that the term has accumulated over time as many states have adopted minimum standards requiring drivers to be responsible for damages they cause.

Reaching a similar conclusion, the Eleventh Circuit has concluded "that Congress used the term `financial responsibility law' to denote state laws which impose insurance-like requirements on...