Opinion ID: 1654119
Heading Depth: 2
Heading Rank: 1

Heading: We Affirm the Court of Appeals as to the Scotts' Appeal.

Text: The Scotts contend that the Court of Appeals erred in ruling that Moore Pontiac had no legal liability for the accident and the resulting injuries. We disagree. It has long been the law in this Commonwealth that a vehicle's owner, such as a dealership, is not liable for injuries sustained by a third party during a test drive if the vehicle's owner or a representative of the owner, such as a salesperson, is not present in the vehicle during the test drive. On the other hand, a vehicle's owner may potentially be liable for injuries sustained by a third party if the owner or his or her representative is present during the test drive. [5] Our holdings on those issues appear to be in accord with the general rule in these types of cases. [6] The Scotts do not contest this settled rule of law. They actually concede the established Kentucky precedent regarding a dealer's liability for an accident occurring during a test drive. [7] But the Scotts contend that precedent is not pertinent because they argue that Moore Pontiac's liability arises from its own independent acts of negligence rather than being held vicariously liable for Morgan's negligence. Toward that end, the Scotts present two theories under which they contend Moore Pontiac should be liable for their injuries. First, they contend that Moore Pontiac's actions (or inaction) cause it to be liable under our oft quoted statement in Grayson Fraternal Order of Eagles, Aerie No. 3738, Inc. v. Claywell that every person owes a duty to every other person to exercise ordinary care in his activities to prevent foreseeable injury. [8] Certainly we agree with the principle espoused in that statement, but we disagree with the Scotts that its application leads to liability for Moore Pontiac. First, Claywell is factually dissimilar to the case at hand because Claywell involved dram shop liability. And we later noted that much of our holding in Claywell might have been superseded by statute. [9] Second, and more importantly, our language in Claywell did not speak of creating new causes of action. Rather, our statement was an expression of the general principle that each member of the public owes the remainder of the public a duty to exercise reasonable care in his or her everyday affairs. As the Court of Appeals has noted, Claywell is often invoked by parties advocating a theory of liability or a cause of action where none previously existed and legal authority is otherwise lacking. Despite its use of the catch phrase `universal duty of care,' the Grayson case itself demonstrates that the duty referred to is not without limits. [10] Indeed, we remain committed to the longstanding tort principle that liability based upon negligence is premised upon the traditional prerequisites, such as proximate cause and foreseeability. [11] Simply put, the concept of a universal duty of care is not so broad as to lead to a conclusion that a vehicle's owner has automatically breached a legal duty of care simply by permitting an apparently competent driver to take the owner's vehicle for a test drive. Or, in other words, a vehicle owner generally satisfies his or her duty of care in test-drive situations simply by determining before the test drive that the prospective purchaser and test driver is duly licensed and is otherwise not obviously impaired. [12] Since Moore Pontiac met its relatively low burden to ascertain that Morgan was not an incompetent driver, we reject the Scotts' claim that the unfortunate circumstances of this case are so extraordinary as to hold Moore Pontiac liable for a purported breach of ordinary care to the Scotts. [13] The Scotts' second and closely related theory of recovery is that Moore Pontiac assumed a duty of ordinary care to the Scotts. The gist of the Scotts' argument is that Moore assumed a duty of care toward the Scotts, and the rest of the public, by adopting and then failing to follow its own in-house rule requiring a Moore Pontiac employee to accompany Morgan on his test drive. We disagree. We have previously adopted Restatement (Second) of Torts § 324A regarding the elements necessary for liability for the breach of a voluntarily assumed duty. [14] Under § 324A, [o]ne who undertakes ... to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if the person's failure to exercise reasonable care increases the risk of such harm, or if the harm is suffered because of reliance of the other or the third person upon the undertaking. [15] The Scotts cannot meet these criteria. We agree with the Court of Appeals that the Scotts could not have reasonably relied upon Moore Pontiac's policy regarding having a salesperson accompany a test driver because the evidence showed that the Scotts were unaware of the policy's existence. After all, one cannot logically rely upon an unknown. And even if the Scotts had somehow divined the existence of Moore Pontiac's in-house policy before the accident, they have pointed to no evidence tending to prove that Candria Scott drove differently in reasonable reliance upon Moore Pontiac's internal policy. We also agree with the Court of Appeals that Moore Pontiac's failure to observe its own in-house policy did not increase the risk of harm to Candria Scott. First, we reject any argument that a person or business entity's adoption of an internal guideline or policy and subsequent failure to follow that internal guideline automatically leads to liability under § 324A. [16] Second, we fail to see how Moore Pontiac's failure to abide by its own internal policy increased the risk of harm to Candria. As the Court of Appeals noted, without the internal policy, Moore Pontiac could have lent its cars to responsible drivers without making itself liable for the damages caused by their negligence. The existence and subsequent non-observance of the in-house rule did nothing to increase this risk. The situation is exactly what it would have been had Moore Pontiac not instituted the policy. And Morgan testified that he was going under the speed limit before the accident and, furthermore, that he drove more safely during the test drive because his family was with him than he would have driven had the salesperson alone accompanied him. Therefore, it is clear that Moore Pontiac's failure to observe its in-house policy was not the proximate cause of the Scotts' injuries, which is fatal to the Scotts' claims against Moore Pontiac. [17] We therefore affirm the Court of Appeals' conclusion that Moore Pontiac should have been granted a directed verdict dismissing the Scotts claims against it, and that the judgment against Moore Pontiac must be vacated.