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LEGAL RESOURCES

Vicarious Liability

J. Eric Gregory, Attorney

This article is not designed to be legal As a creditor in a BHPH store, you will stays with you and cannot be transferred
advice or representation to you or your on occasion have to repossess a vehicle. solely to the contractor. While they may
dealership. It is instead written to help Generally, under O.C.G.A. § 11-9-609(b) still be liable, so are you and this can also
you consider your dealership’s practices (2) self-help repossession is permissible carry punitive damages. The repossession
and help you better manage your dealer- in Georgia so long as it does not breach does not even have to be completed for
ship. It is intended as informational and the peace. Breach of peace has a much you to be held liable for a breach of peace;
educational; always check with your at- in Deavers v. Stanridge the attempt was
torney when applying general principles abandoned but the contractor verbally
to specific facts. "...while the law generally and physically assaulted the owner and
may insulate you from the finance company was still liable to the
You have probably heard the term but owner. As in the case of your staff, make
not fully grasped the implications of it to liability for someone else’s sure your contractors understand the law
you as a dealer. Vicarious liability is the negligence, there are real or that you are indemnified by them for
“imposition of liability on one person for their illegal acts.
the actionable conduct of another, based world exceptions you need
solely on a relationship between the two to be aware of and take As an employer, you can be held liable
persons.” (Black’s Law Dictionary). More precautions against." for the negligent acts of your employees.
simply put your dealership or your lend- This can also be the case even if you con-
ing company can be responsible for the sider the “employee” to be an “indepen-
actions of a broad group of other people broader meaning under the Uniform dent contractor” (the differences will be
based on their relationship with your Commercial Code than it does under a topic for a future article). If the driv-
company. criminal law. Most courts find a breach er is acting as a “servant” at the time of
of peace by a creditor includes repossession the wrongful act you, the “master”, can
This concept was initially concerning to over the “unequivocal oral protest” of the be held liable under the doctrine of re-
the auto industry because many states debtor; in fact, some courts even require spondeat superior. Determining the mas-
had laws holding the owner of a vehi- that the debtor affirmatively consent for the ter-servant relationship can be tricky, but
cle liable for the actions of a permissi- repossession to be lawful. (Deavers v. Stan- an essential element is that the employer
ble driver; leasing and rental companies ridge 144 Ga. App. 673). In other words, no (master) had a right to control and direct
were caught in the crosshairs of the laws means no. When the debtor protests, your the driver’s conduct. That is, did you con-
because they were the “owners” of the option is to use the judicial process to exe- trol the time, manner, means or method
vehicle. An amendment commonly re- cute the repossession, costing both time and by which the task was completed versus
ferred to as the Graves Amendment be- money. If you self-execute repossessions, just requiring a result? If you send a driv-
came part of the Transportation Equity make sure your staff or other third-parties er on an errand and there is injury caused
Act of 2005 (49 USC § 30106) to all but that you may use are informed on the law by his or her negligence while performing
eliminate this liability of rental and leas- or seek adequate counsel because under Vi- that errand you could be held liable. One
ing companies as “owners”. Numerous carious Liability you will likely be responsi- exception is if they vary from the task at
courts have ruled that it overrides state ble for their actions. hand, such as running a personal errand
laws allowing leasing and rental com- at the same time. If you don’t do it now,
panies to be held liable for the actions As mentioned above, Vicarious liability make sure you run regular MVR’s (Mo-
of drivers, though most state laws have applies to repossessions if you contract tor Vehicle Records) on any employees or
since been revised as well. There are, a service to carry out the task. While an contractors who drive company vehicles
however, still instances where you as a employer is not normally liable for the and give strict instructions that the vehi-
creditor, employer, or dealer can be held negligence of a contractor (agent), there cle is used for company business only. If
accountable for the actions of others. The are exceptions. One is under O.C.G.A. § you don’t have a company policy manual,
accountability depends on the relation- 51-2-5(4) “If the wrongful act is the vio- consider one and get a sign-off that the
ship you have with the driver, which can lation of a duty imposed by statute”. The policy is clearly understood.
be as employer-employee, master-ser- “duty” is on you as the creditor to make
vant, principal-agent, or bailor-bailee. sure that there is no breach of peace and As a dealer, there are certain instances
that duty is non delegable, meaning it Continued on page 36

34 | GIADA Independent Auto Dealer JUNE 2017