U.S. District Court for the Eastern District of Michigan, Southern Division; Docket No. 97-75917;
Honorable John Corbett O'Meara; Unpublished
Official Federal Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Motor Vehicle Code (Civil Liability of Owner) (MCL 257.401)
Leased / Rented Vehicles
CASE SUMMARY:
In this written opinion by Judge O'Meara, the court held that because Thrifty Rental had failed to notify its lessee in its lease agreement that its liability under MCLA 257.401(3) was limited to $20,000/$40,000 liability limits, Thrifty was “negligent” within the meaning of that statute in failing to notify the lessees of the limitation on liability, and therefore, Thrifty's liability could not be limited by MCLA 257.401(3).
In this case, defendant Risvi entered into a vehicle rental agreement with Thrifty in Michigan. Defendant Abbas was a named additional authorized driver. While Abbas was driving, an accident occurred resulting in two (2) deaths and other serious injuries. Risvi was insured by Allstate and Abbas was insured by American Express. Allstate filed a declaratory judgment action seeking a declaration that Thrifty Rent A Car, for negligently failing to notify its lessee of the limitations of liability contained in MCLA 257.401(3), was not entitled to the limitations contained in that statute that would limit its liability to $20,000/$40,000. The statute provides:
"Unless the lessor, or his or her agent, was negligent in the leasing in the motor vehicle, the lessor's liability under this subsection is limited to $20,000 because of bodily injury to or death of J person in any 1 accident and $40,000 because of bodily injury to or death of 2 or more persons in any 1 accident."
The provisions of MCLA 256.401(4) further require that a person engaged in the business of leasing motor vehicles “shall notify a lessee that the lessor is liable only up to the maximum amounts provided for in subsections."
There was no dispute that Thrifty in its rental car agreement had failed to notify lessees that it was liable only up to $20,000/$40,000. The court found that Thrifty's negligence in failing to notify the lessees of this limitation on liability resulted in the conclusion that Thrifty's liability could not be limited by MCLA 257.401(3).
