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U-Have a Duty: Short-Term Lessor’s Duty Triggered by Negligence in Leasing Process

Motor Vehicle Litigation / January 28, 2019

The Michigan Court of Appeals held that Section 3 of the Owner’s Liability Statute, MCL 257.401, plainly sets forth the circumstances under which a short-term lessor (such as U-Haul) will be liable for injuries caused by the negligent operation of the motor vehicle that it leased, and that the statute limits liability to the state minimum of $20,000.00/$40,000.00. However, the Court noted that this limitation on liability does not apply if “the lessor, or his or her agent, was negligent in the leasing of the motor vehicle.” MCL 257.401(3). 

The Court of Appeals concluded that Michigan law permits a plaintiff to bring a claim for any negligence in the leasing process regardless of whether or not the elements for negligent entrustment can be satisfied under the circumstances. 

The Court of Appeals also held that a short-term lessor does owe a legal duty to the general public in connection with the leasing process pursuant to MCL 257.401(3).

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