A dealership that didn't maintain liability insurance on a car it let an uninsured customer test drive may be held liable for up to the amount of state minimum insurance requirements, the Ohio Court of Appeals has ruled.
The decision allows a crash victim and the estate of another to pursue part of their suit against the Columbus dealership that owned the car, Ricart Properties Inc.
In November 1996, Andrea Hairston told a Ricart sales representative she was interested in buying a 1994 Toyota Camry, as well as how much money she had for a down payment, the court said. The salesperson allegedly told her that financing would be preapproved and let her take the car off the lot so her mechanic could check it.
While she was driving, she lost control and crashed into another vehicle, according to the court. One occupant of the other car died and another was injured.
Hairston had no automobile liability insurance or other proof of financial responsibility, as Ohio law requires, the court said.
The survivor and the estate sued Hairston and Ricart. Hairston filed for bankruptcy protection, and a Franklin County Court of Common Pleas judge dismissed the suit against Ricart without trial.
The appeals court found no basis to hold Ricart liable on a theory of negligent entrustment, saying two dealership employees who saw Hairston that day testified there was no indication she was an inexperienced or incompetent driver.
However, the three-judge panel ruled that the victim and the estate can pursue a claim under the Ohio law that requires all drivers to have insurance or proof of financial responsibility.
At the same time, the court said the amount of potential damages is limited to the minimum required to show financial responsibility, $12,500 for one personal injury victim, $25,000 for more than one and $7,500 for property damage.
Dealership lawyer Gary Gillett of Columbus said that even if the plaintiffs could win a verdict for that amount, the money would go to their own insurance company, which had paid $80,000 in uninsured motorist benefits.
Gillett also said the potential impact of the decision is that dealerships that don't maintain insurance for customers and don't verify that customers have their own coverage could be held liable for the minimum amounts required by law.
Naren Biswas of Reynoldsburg, a lawyer for the plaintiffs, said his clients are appealing the part of the ruling that caps the amount of damages they could recover. Their actual damages are much higher, he said.