## Facts

- Louisiana residents were injured in a 1994 automobile collision in Louisiana.
- The other vehicle was owned by National Car Rental System, Inc., a Delaware corporation that was self-insured and did business in Florida.
- National’s vehicle had been rented in Florida to a Florida resident under a written rental agreement naming only the renter as an authorized driver.
- At the time of the Louisiana accident, the National vehicle was driven by a Florida resident who was not an authorized driver under the rental agreement.
- Plaintiffs sued National in Louisiana, seeking to impose vicarious/derivative liability on the vehicle owner.
- National moved for summary judgment, arguing Louisiana law barred owner liability for accidents caused by unauthorized users of a self-insured rental vehicle.
- The trial court denied summary judgment, applying Florida law based on the Florida rental contract and Florida’s dangerous instrumentality doctrine.
- National sought supervisory review; reversal would end the case as to National.

## Issues

1. Whether Louisiana or Florida law governs a self-insured rental car company’s derivative liability for a Louisiana accident involving an unauthorized driver where the rental contract was executed in Florida.
2. Whether the owner-liability question is characterized as a “standards of conduct and safety” issue or an “loss distribution and financial protection” issue under Louisiana conflict-of-laws rules.
3. Whether, under the applicable law, a self-insured rental car company may avoid liability by limiting authorized drivers to those expressly listed in the rental agreement.

## Decision

- Supervisory writs were granted to review the denial of summary judgment.
- The court held that Louisiana law governs the owner-liability issue.
- The court classified National’s potential vicarious/derivative liability as an issue of loss distribution and financial protection, not driving standards.
- Applying Louisiana Civil Code article 3544(2)(a), Louisiana law controlled because the injury and the conduct causing it occurred in Louisiana and the injured and injuring parties were domiciled in different states.
- The trial court’s contract-based rationale for applying Florida law was rejected because the unauthorized driver was not a party to the rental agreement and the dispute sounded in tort-based loss allocation.
- Under Louisiana law applicable to self-insured rental companies, National could limit permissive use to authorized drivers and was not liable for an accident caused by an unauthorized driver.
- The denial of summary judgment was reversed, and judgment was rendered dismissing plaintiffs’ claims against National.

## Legal Principles

- Louisiana conflict-of-laws articles governing torts apply to multistate automobile accidents; more specific provisions control over the general “most seriously impaired” standard when applicable.
- “Standards of conduct and safety” are governed by the law of the place where the injurious conduct occurred.
- Owner vicarious/derivative liability and immunity-like limits on responsibility are issues of “loss distribution and financial protection.”
- When the injured person and the person who caused the injury are domiciled in different states, and both the injury and the conduct causing it occurred in one of those states, Louisiana Civil Code article 3544(2)(a) applies that state’s law to loss-distribution issues.
- Under Louisiana law for self-insured rental car companies, the owner may restrict vehicle operation to expressly permitted drivers listed in the rental agreement and is not liable for accidents caused by unauthorized users.

## Conclusion

The court applied Louisiana’s tort conflict-of-laws rules to hold that Louisiana law governed loss allocation for a Louisiana accident and that a self-insured rental car company was not vicariously liable when its vehicle was driven by an unauthorized user not listed in the rental agreement.


Salavarria v. Nat'l Car Rental Sys., Inc., 705 So. 2d 809 (La. Ct. App. 4th Cir. 1998)