In Russ v. XPO Logistics, LLC, No. 19-2719(DSD/JFD), 2022 U.S. Dist. LEXIS 145938, at *22-25 (D. Minn. Aug. 16, 2022), Judge Dotv ruled on whether a lessor of a commercial motor coach could be liable on a negligent entrustment theory, allowing the claim to survive summary judgment.
Plaintiff also alleges that KLE negligently entrusted its equipment to Ecklund. Negligent entrustment “impose[s] direct liability on ‘[o]ne who supplies … a chattel for the use of another whom the supplier knows or has reason to know to be likely because of [the other’s] youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm.'” Soto v. Shealey, 331 F. Supp. 3d 879, 887 (D. Minn. 2018) (quoting Axelson v. Williamson, 324 N.W.2d 241, 243-44 (Minn. 1982)). “In the automobile-accident context, ‘negligent entrustment has been defined as a separate wrongful act when the negligence of the driver is reasonably foreseeable and the entrustor fails in the duty to take steps to prevent operation of the vehicle by the driver.'” Id. (quoting Lim v. Interstate Sys. Steel Div., Inc., 435 N.W.2d 830, 832 (Minn. Ct. App. 1989)). KLE argues first that plaintiff’s negligence claims are barred by the Graves Amendment. KLE also contends that it had no notice that Ecklund posed an unreasonable risk to others and thus cannot be liable for negligent entrustment. The Graves Amendment provides that: “An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), for harm to person or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if – (1) The owner (or an affiliate of the owner) is engaged in the trade or business of renting or leasing motor vehicles; and (2) There is no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner). 49 U.S.C. § 30106(a).” The court agrees that under the plain language of the Graves Amendment, KLE cannot be vicariously liable for the acts of Ecklund or Michaels. It can, however, be directly liable for its own negligence or criminal wrongdoing. Here, plaintiff asserts that KLE is directly liable for its own negligence in allowing Ecklund to lease its equipment. Thus, the question becomes whether KLE knew or should have known that Ecklund posed an unreasonable danger to others in its operations. Plaintiff argues that KLE was negligent because it did not employ any safety standards in selecting its lessees. In fact, KLE admits that it did not conduct any due diligence into its lessees before agreeing to lease its equipment. Further, plaintiff argues that KLE was on notice of Ecklund’s past collisions, extensive insurance claims, poor hiring practices, and financial instability. In contrast, KLE argues that Ecklund was a registered motor carrier that was authorized to deliver interstate loads country-wide and thus there were no indications that Ecklund posed an unreasonable danger. Here, the court finds that there is a factual dispute sufficient to deny summary judgment. As plaintiff notes, KLE knew of Ecklund’s business practices and safety record due to the dual ownership stakes of Kirk Ecklund. Further, there are facts in the record showing that Ecklund had previously been involved in accidents and had submitted numerous insurance claims. KLE offers no evidence to dispute these facts or to show that its safety record is standard in the industry. Therefore, whether the facts offered by plaintiff show that Ecklund posed an unreasonable risk to public safety is a question properly left to the factfinder.