Opinion ID: 1832520
Heading Depth: 1
Heading Rank: 5

Heading: bare legal title versus beneficial ownership

Text: Legal title remains the most common basis for imposing vicarious liability under the dangerous instrumentality doctrine. However, a narrow exception for the legal title owner to escape vicarious liability has been recognized where the holder of mere naked title is able to demonstrate the absence of beneficial ownership of the vehicle. In Palmer v. R.S. Evans, Jacksonville, Inc., 81 So.2d 635, 637 (Fla.1955), this Court first explained that mere naked title could repose in one entity but beneficial ownership in another. In Palmer, a man agreed to buy a motor vehicle from a used-car dealer, made a down payment, signed a conditional sales contract and a power of attorney, then drove the car out of the lot. 81 So.2d at 636. Shortly thereafter, he became involved in an accident in which a third party was injured. Both the car dealer and the driver considered the purchase closed when possession of the automobile was delivered. However, the transaction was not memorialized in writing until the conditional sales contract was signed a few days after the accident. In upholding the jury's determination that the car dealer was not vicariously liable, the Court explained that the rationale of our cases which impose tort liability upon the owner of an automobile operated by another ... would not be served by extending the doctrine to one who holds mere naked legal title as security for payment of the purchase price. In such a titleholder, the authority over the use of the vehicle which reposes in the beneficial owner is absent. Id. at 637 (emphasis supplied); see also Smith v. Baker, 206 So.2d 409, 412 (Fla. 4th DCA 1968). Thus, an entity or individual who complies with the statutory requirements of the conditional sales statute may be exempt from vicarious liability, even though the entity retains legal title to the vehicle as security for the payment of the purchase price. [3] See Kraemer, 572 So.2d at 1365; Rutherford v. Allen Parker Co., 67 So.2d 763 (1953). In Metzel v. Robinson, 102 So.2d 385, 385-86 (Fla.1958), the Court made it clear that, absent a conditional sales agreement, the circumstances where an entity or individual who possessed legal title would not be vicariously liable under the dangerous instrumentality doctrine were extremely limited. In Metzel, a nephew caused injuries to the plaintiff by negligently operating a motor vehicle, which was titled in his aunt's name. See id. at 385. The plaintiff sued the aunt, the record title holder of the vehicle, under the dangerous instrumentality doctrine. See id. According to the facts, the aunt had taken title to the vehicle only to assist her nephew in purchasing and financing the vehicle. See id. The nephew took possession of the vehicle after its purchase, and the aunt had nothing more to do with the vehicle. See id. Nevertheless, because the aunt took no action to divest herself of title to the car, the Court determined that she was the owner of the automobile as a matter of law. See Metzel, 102 So.2d at 385-86. In making this determination, the Court further explained that the aunt was still in a position to exert some dominion and control over the vehicle.  Id. at 386 (emphasis supplied). Thus, because the aunt held title to the vehicle and could exercise dominion and control over the vehicle, the Court concluded as a matter of law that the aunt would be held vicariously liable under the dangerous instrumentality doctrine. See id. at 386. The Second District in Marshall v. Gawel, 696 So.2d 937, 938-39 (Fla. 2d DCA 1997), also examined the dangerous instrumentality doctrine in the context of a family relationship. Similar to Metzel, the issue in Marshall was whether the legal title holder of a motor vehicle could be held vicariously liable under the dangerous instrumentality doctrine. See id. In Marshall, the defendant mother was the legal title holder of the vehicle, although she merely signed as a coguarantor to help her daughter obtain the necessary financing to purchase the vehicle. See id. at 938. After the defendant mother's husband negligently drove the vehicle and injured the plaintiff, the plaintiff sought to hold the mother accountable under the dangerous instrumentality doctrine. See id. However, the mother claimed that even though the vehicle was titled solely in her name, she was not liable under the dangerous instrumentality doctrine because she: (1) did not pay for the vehicle, its insurance, or its maintenance; (2) never drove the vehicle or had keys to it; and (3) had no authority or control over the vehicle's use. See id. The Second District explained that [t]he parties' intent regarding who would have beneficial ownership must be determined from their overt acts. Marshall, 696 So.2d at 939. According to the Second District, the fact that the mother was the registered owner of the vehicle, did not take steps to divest herself of title, had insurance on the vehicle, and resided together with her daughter could indicate that she had  the ability to exert some dominion or control over the vehicle.  Id. (emphasis supplied). Therefore, the Second District concluded that the record reflected a genuine issue of material fact as to the mother's vicarious liability as the owner of the vehicle. See id. The statements in Marshall must be read in the context of the facts of that opinion. In both Metzel and Marshall the legal title holders were attempting to avoid liability under the dangerous instrumentality doctrine by asserting that another individual was the actual beneficial owner. In neither Metzel nor Marshall, however, did the courts hold that the ability to exert some degree of dominion and control constitutes an independent basis for vicarious liability under the dangerous instrumentality doctrine absent an identifiable property interest in the vehicle.