Florida product liability law is primarily based on strict liability. Strict product liability refers to a claim in which the plaintiff alleges that the product at issue was defective or unreasonably dangerous. The focus of these claims is on the product itself, and these claims do not require a plaintiff to show that the defendant was negligent in any way.
While strict product liability may seem like a straightforward doctrine to apply, determining which parties are subject to strict liability can actually be quite complicated. A recent state appellate decision illustrates the concept of successor liability as it pertains to the plaintiff’s strict liability claim against a rental car company.
According to the court’s opinion, the plaintiff was seriously injured when the rental car she was riding in was involved in a head-on collision. The vehicle was previously rented through National Car Rental Systems (NCRS); however, NCRS sold the vehicle to a private party years before the plaintiff’s accident. The plaintiff filed her claim against Enterprise rental car company because Enterprise eventually acquired NCRS’s rental car business after the NCRS assets were transferred several times through various companies in a complex series of transactions.
Enterprise claimed that it could not be held strictly liable for any alleged defect in the car because the liability that NCRS may have had did not transfer to Enterprise. The court agreed.
The court explained that, as a general rule, a company that buys another company does not assume the liabilities of the selling company unless:
- There is an express or implied agreement of assumption;
- The transaction amounts to a consolidation or merger of the two corporations;
- The purchasing corporation is a mere continuation of the seller; or
- the transfer of assets to the purchaser is for the fraudulent purpose of escaping liability for the seller’s debts.
The court noted that recent developments in the law clarified when a lawsuit based on successor liability is appropriate, allowing such claims only when the plaintiff can establish:
- The plaintiff has virtually no other remedy against any other member in the supply chain;
- The purchasing company can spread the risk of such liability; and
- It is fair to require the purchasing company to assume responsibility as part of the selling company’s goodwill.
Here, the court rejected the plaintiff’s claim for two reasons. First, the court noted that the plaintiff could have pursued a claim against General Motors, the manufacturer of the vehicle involved in the accident. Second, the court explained that when one of the successor companies to NCRS went through bankruptcy before Enterprise purchased the rental car business, any liability NCRS faced was extinguished. Thus, when Enterprise purchased the rental car business, it did so without any of the previous company’s liabilities.
Consult with a Dedicated South Florida Injury Law Firm
If you have recently been injured in a South Florida car accident, you may be entitled to monetary compensation. At the law firm of Friedman Rodman & Frank, we pride ourselves in providing exceptional representation to accident victims across Florida. We handle all types of Florida car accident claims, including those involving complex product liability issues. To learn more about how our team of dedicated attorneys can help you pursue a claim for compensation, call 877-448-8585 today.