Facts
- A waterfront hotel permitted a sailboat rental operation to run from its premises through a lessee and sublessee arrangement.
- The rental business regularly rented sailboats to hotel guests for profit.
- The hotel marketed sailing to guests and integrated rentals into the guest experience, including room-charge billing and use of a room key as collateral.
- A hotel guest rented a sailboat and was injured when a crossbar on the boat broke.
- The crossbar had been repaired by a welder a few days before the accident.
- The injured guest and her spouse sued the hotel, the entities operating the rental business, and the welder, asserting multiple theories including strict products liability.
- The trial court directed verdicts for defendants on strict products liability; the intermediate appellate court reversed and certified a question on whether strict liability extends to commercial leases.
Issues
- Whether strict products liability extends to commercial lease transactions involving allegedly defective products.
- Whether a commercial lessor engaged in the business of leasing may be strictly liable for injuries caused by a defect in a leased product.
- Whether a hotel may face strict-liability exposure where the rental operation functioned under the hotel’s apparent authority and was presented to guests as part of the hotel’s services.
Decision
- The court answered the certified question yes: strict products liability applies to commercial lease transactions in Florida.
- The court concluded the entity that regularly rented the sailboats could be subject to strict liability because it was engaged in the business of leasing and placed the boats into the stream of commerce.
- The court held there was sufficient evidence for strict-liability exposure to extend to the hotel because the rental operation was conducted under the hotel’s apparent authority, given the hotel’s marketing and integration of rentals into its guest billing and operations.
- The court approved the appellate court’s reversal of the directed verdicts on strict liability and remanded for further proceedings consistent with its ruling.
- The court declined to address negligence and warranty issues because they were outside the certified question.
Legal Principles
- Strict products liability extends beyond sales to commercial leasing when the lessor is engaged in the business of leasing the product.
- A commercial lessor that regularly leases products for profit is treated as part of the product’s distributive chain because it can influence product safety, obtain insurance, and spread the cost of injuries from defects.
- Strict-liability extension to leasing is limited; casual or isolated leases are not automatically covered.
- A non-owner may be subject to strict-liability exposure where it holds a leasing operation out as acting with its apparent authority such that consumers could reasonably believe the product was supplied by that entity.
Conclusion
The court held that Florida strict products liability applies to commercial lease transactions and may reach both the commercial boat-rental lessor and a hotel that effectively presented the rental operation as acting on the hotel’s behalf through apparent authority, requiring further proceedings on the strict-liability claims.