Vermont Supreme Court - 151 Vt. 425
The case involves a personal injury claim arising from a car accident where the plaintiff was a passenger in a car purchased by her grandnephew with funding provided by the defendant Wilson. The trial court erred in directing verdicts in favor of Ace Auto Sales and its president Gary Gardner. The claim against Wilson for negligent entrustment was submitted to the jury, and they returned a verdict in favor of the plaintiff. The court affirmed the decision to submit the question to the jury and remanded for further proceedings. The plaintiff argues that the tort of negligent entrustment should apply to a person who knowingly provides funding to an incompetent driver to purchase a vehicle and to a person who knowingly sells a vehicle to an incompetent driver. Defendants argue that recovery under a claim of negligent entrustment should be limited to situations where the defendant is the owner or has the right to control the instrumentality entrusted. Some courts have applied the rule of negligent entrustment more broadly, allowing recovery against automobile dealers or individuals who funded the purchase of a car for an incompetent driver. Liability is established if the defendant had ownership and control over the instrumentality at the time it was turned over to an incompetent individual. The Restatement of Torts serves as the basis for both lines of cases. According to the Restatement (Second) of Torts, a person who supplies a chattel to another, knowing or having reason to know that the user is likely to use it in a manner involving unreasonable risk of physical harm to themselves or others, is liable for resulting physical harm. This rule applies to sellers, lessors, donors, lenders, and all kinds of bailors, regardless of whether the bailment is gratuitous or for a consideration. The cases that limit liability to situations where the defendant owns or has control over the instrumentality have been criticized by legal commentators. The negligence of the owner in entrusting the instrumentality to an incompetent user, combined with the user's careless operation, creates liability.
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