My wife and I wish to sell our 21 year old son a car. Although he will get a bill of sale reflecting ongoing payments, we wish to maintain the title in our names until he has finished paying for the car (approx 12 months). He will have valid driver's license and auto insurance. Will we be liable, in any way, for any potential mishaps, accidents or tickets he may come in contact with during the 12 months he is paying the car off and the title is in our name?
2 Answers from Attorneys
Yes. As the titled owner of the car you may have vicarious liability under a negligent entrust/permissive use theory if an accident were to occur.
This is directly from the form California jury instructions:
720. Motor Vehicle Owner Liability - Permissive Use of Vehicle
[Name of plaintiff] claims that [he/she] was harmed and that [name of defendant] is responsible for the harm because [name of defendant] gave [name of driver] permission to operate the vehicle. To establish this claim, [name of plaintiff] must prove all of the following:
1. That [name of driver] was negligent in operating the vehicle;
2. That [name of defendant] was an owner of the vehicle at the time of the injury to [name of plaintiff]; and
3. That [name of defendant], by words or conduct, gave permission to [name of driver] to use the vehicle.
In determining whether permission was given, you may consider the relationship between the owner and the operator. [For example, if the parties are related or the owner and the operator are employer and employee, such a relationship may support a finding that there was implied permission to use the vehicle.]
[If the vehicle owner has given a person permission to use the vehicle, and that person authorizes a third person to operate the vehicle, the third person may be considered to have used the vehicle with the permission of the owner.]
Vehicle Code section 17150 provides: "Every owner of a motor vehicle is liable and responsible for death or injury to person or property resulting from a negligent or wrongful act or omission in the operation of the motor vehicle, in the business of the owner or otherwise, by any erson using or operating the same with the permission, express or implied, of the owner."
Vehicle Code section 17151(a) provides, in part: "The liability of an owner . . . is limited to the amount of fifteen thousand dollars ($15,000) for the death of or injury to one person . . . and . . . to the amount of thirty thousand dollars ($30,000) for the death of or injury to more than one person . . . and is limited to the amount of five thousand dollars ($5,000) for damage to property."
The statutory limitation under section 17151(a) "does not apply . . . to a vehicle owner's own common law negligence, as distinguished from the owner's statutory vicarious liability for the operator's negligence." (Fremont Compensation Insurance Co. v. Hartnett (1993) 19 Cal.App.4th 669, 675-676 [23 Cal.Rptr.2d 567].)
I agree with Mr. Becker.