The Colorado Court of Appeals said a dealership is liable for damage resulting from an accident on a test drive because someone from the dealership was in the car with the driver.
The case stems from an incident involving Colorado resident Kristin Hart, who was test driving a vehicle from what was then Go Courtesy Ford in Littleton, Colo., when she turned left into oncoming traffic and hit another vehicle. The driver of that vehicle, Kelly Minna-Angard, then filed a claim with her insurer, American Family Mutual Insurance Co., and a negligence claim against Hart and the Ford dealership, saying the test drive represented a “joint venture” between the two.
In a unanimous decision on Thursday, the appeals court ruled that the test drive is indeed a joint venture. The three-judge panel said Thursday in an opinion that the sales representative and Hart each had a “common goal” and had a right to control the vehicle, the two thresholds needed to determine a joint venture. Therefore, the dealership is liable for damages and owes American Family.
The ruling overturns a prior district court decision that said the dealership, now called AutoNation Ford Littleton, does not owe American Family anything because Hart, the driver who was seeking to buy a car, and the sales rep, who was seeking to sell a car, had different goals and therefore could not have been in a joint venture.
The “Go Courtesy Ford salesman who accompanied Hart on the test drive testified in his deposition that he and Hart had already negotiated and agreed on a price,” the panel’s decision reads. “Thus, both participants had a common interest in conducting the test drive successfully to complete the transaction.”
Both courts said there is undisputed proof that both Hart and the sales rep had the right to control the car.
Accompanied or not
The panel said this is the first example of the joint venture rule being applied to a test drive in Colorado. Therefore, it had to look to cases outside of the state for guidance.
“Most courts have followed the general rule that a dealer is not liable for a prospective purchaser’s negligence during a test drive if the prospective purchaser is unaccompanied by the dealer’s representative,” the panel said. “However, where, as here, the dealer’s representative is a passenger during the test drive, the majority rule is that the dealer is liable for the prospective purchaser’s negligence.”
Representatives from the dealership and American Family were not available Friday for comment.