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Am I Legally Responsible for Damages to a Stolen Rental Car?


A motor vehicle accident can leave you on the hook for significant damages, not just to injured persons but also to the vehicle’s owner. If you take out a rental car, for instance, your contract with the owner may require you to assume financial responsibility in the event of an accident. You may even be liable for a stolen rental car that is damaged while the thief is driving it.

This is why you always need to read the “fine print” of a rental agreement beforehand.

  • Your contract with a rental car company may make you liable for any damages to the rented vehicle, including for damages to a stolen rental car while the thief is driving it.
  • If you purchase a damage waiver, you must be certain to comply with any conditions to coverage.
  • Always read a rental contract and related documents carefully to ensure you understand your rights and responsibilities.

Enterprise Rent-A-Car Canada v. Bryan: Damage Waiver Waived No Damages in Case of Stolen Rental Car

Consider this recent decision from the Ontario Superior Court of Justice. This lawsuit involves significant damages to a stolen rental car as the result of an April 2017 accident.

The exact circumstances of the accident remain something of a mystery, but the legal question before the Court was rather straightforward: Did a “damage waiver” purchased by the defendant renter, George Bryan, absolve him of responsibility for the stolen rental car’s damages?

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Bryan rented the vehicle beginning on March 17, 2017. He signed a rental agreement with the rental company, Enterprise Rent-a-Car. The agreement stated that Bryan, as the renter, “accepts responsibility for damage to, loss or theft of, [the rental] Vehicle, Optional Accessories or any part or accessory occurring during the Rental Period regardless of fault or negligence of Renter or any other person or act of God.”

Bryan could avoid that liability by purchasing a damage waiver, which he did. The waiver, however, was subject to several conditions. As relevant here, in the event the rental car was stolen, the damage waiver would only protect Bryan if he took the following actions:

  • Return “the original ignition key and owners key tag” to Enterprise.
  • File a police report no later than 24 hours after “discovering the theft.”
  • Fully cooperate with the “owner, police, and other authorities” responsible for investigating the theft.
  • Ensured that the vehicle ignition was off just prior to the theft.

Rental Car Stolen While Keys Were in Ignition

With this background in mind, here were the facts of the theft presented to the Superior Court: Bryan testified that around 1 a.m. on the morning of April 3, 2017, he “stopped at his daughter’s former residence in North York to see if there was mail for her.” He said that he was traveling to pick up his daughter at a friend’s house.

Bryan “could not recall if he left the vehicle running or not” when he went to check the mail. During the brief period that he was away from the rental car, someone stole the vehicle. The defendant said he subsequently called a ride-sharing service to take him back to his own home.

About 20 minutes later, at 1:21 a.m., the stolen rental car rear-ended another vehicle and “flipped over” the side of Highway 401, where police eventually discovered it. Although police found two passengers in the car at the time, they could not identify or apprehend the driver, who apparently fled the scene.

The following afternoon, the defendant contacted Enterprise and reported that the rental car “had been stolen from his daughter’s residence at 2:00 a.m. and that he left the original ignition keys in the vehicle.” Later, the defendant told Toronto police that the theft occurred “at 1:45 a.m.”

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Enterprise filed a claim for damages on the stolen rental car which was declared a total loss, but Bryan argued the damage waiver applied, thereby absolving him of any financial responsibility.

Failure to Return Keys and Changing Stories Doomed Renter

The matter was heard before Justice Michael David McArthur of the Superior Court. On August 29, 2018, Justice McArthur granted Enterprise’s motion for summary judgment. “Summary judgment” means the judge determined there was “no genuine issue requiring a trial.” Instead, the court looks at the existing evidentiary record.

In this case, Justice McArthur noted that the main factual issue in dispute was whether Bryan’s actions “render[ed] the damage waiver invalid.” As discussed above, the waiver included several conditions that Bryan had to comply with for the damages to be covered.

The first condition was that Bryan had to return the “original ignition key and owner’s key tag identifying the vehicle” to Enterprise. By the defendant’s own account, he failed to do this. He said he found the stolen rental car’s “vehicle fob” in his pants a year after the accident and turned it over to his lawyer. But he never returned it to the rental company.

For this reason alone, Justice McArthur said the damage waiver was invalid.

But Bryan also failed to comply with the requirement to “ensure the vehicle ignition was turned off at the time the vehicle was stolen.” The Court cited Bryan’s own admission on this point. When he first notified Enterprise of the theft, Bryan said he left the keys in the ignition.

Although he later equivocated on this point, the judge said the burden was on the defendant to prove he complied with the conditions, and he failed to do so.

Accordingly, the Court ordered the defendant to pay the plaintiff $32,339.06 in damages. This represents the “fair market value” of the stolen vehicle–which, remember, was declared a total loss–at the time of the theft. Bryan was also made liable for the plaintiff’s legal fees and other court costs.

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Justice McArthur suggested the defendant may have also been responsible for the underlying theft. He noted that police suspected “that the defendant’s daughter was driving the vehicle at the time of the accident and was not a permitted driver.” The judge made no findings on this issue, as it was not relevant to the question of the defendant’s compliance with the damage waiver conditions.

There is an important lesson here: If you are involved in an auto accident, do not try and lie your way out of it. Especially when dealing with well-funded corporations, such as rental car agencies or insurance companies, such lies will be exposed to your detriment.

The best thing you can do following any motor vehicle accident is to contact an Ontario personal injury lawyer who can give you proper advice on what steps to take next. Call Preszler Injury Lawyers to schedule a free, no-obligation consultation with one of our lawyers today.

 
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