United States District Court, S.D. Illinois
MEMORANDUM AND ORDER
STACI M. YANDLE, District Judge.
This matter comes before the Court on Defendants' Enterprise Rent-A-Car Company of Tennessee, L.L.C. and EAN Holdings, L.L.C. Motion for Summary Judgment (Doc. 45) and Memorandum in Support (Doc. 46) in which Defendants seek judgment in their favor on Counts III and IV of Plaintiffs' Second Amended Complaint (Doc. 2). Plaintiffs responded in opposition (Doc. 50) and Defendants replied (Doc. 51). For the reasons that follow, the Court grants Defendants' Motion.
Plaintiffs' action follows an August 1, 2012 head-on motor vehicle collision that killed Defendant James Nash and caused serious injuries that resulted in the death of Larry Bates. Plaintiffs Darrena Bates and minor child G.B. allege painful, permanent and disabling injuries resulted from the accident, which they claim was caused by Defendant James Frank Nash driving under the influence of numerous substances and traveling in the wrong direction on Interstate 57 near mile marker thirty-four (34) in the State of Illinois.
Plaintiffs include Defendants Enterprise Rent-A-Car and EAN Holdings in their Complaint as the lessor and owner of the motor vehicle driven by Nash and allege liability for the negligent entrustment of their vehicle to Nash. In particular, Plaintiffs allege Nash was under the influence of intoxicating substances when he rented the vehicle from Enterprise Rent-A-Car, used the vehicle to engage in illegal activities (the transport and distribution of illegal prescription medications) and breached his agreement with Enterprise by driving the vehicle outside of the state boundaries set forth in the rental agreement, driving while intoxicated and failing to return the vehicle at the assigned date and time. Plaintiffs further allege that Enterprise and EAN knew or should have known these facts and therefore their initial and continued entrustment of the vehicle to Nash was negligent. Finally, Plaintiffs allege that because Enterprise and EAN had a duty to enforce the terms of their rental agreement and a duty to investigate when their vehicle was not returned for nearly two weeks past the agreed-upon return date (a fact sufficient to create reasonable suspicion), they share liability for Plaintiffs' injuries.
Enterprise and EAN deny any liability for negligent entrustment and claim their only legal duty in renting the vehicle was to not knowingly entrust the vehicle to a person incompetent to drive. Enterprise claims that Nash did not appear intoxicated, Nash's driver's license appeared valid and that Nash signed an acknowledgement certifying that the license was "currently valid and is not suspended, expired, revoked, cancelled or surrendered." As such, they complied with their legal duty in entrusting the vehicle to Nash and neither Enterprise nor EAN had any further duty to inquire when Nash kept the vehicle beyond the agreed return date or to ensure Nash was honoring the terms of their agreement.
Enterprise and EAN also assert that Tennessee law should apply to Plaintiff's claims against them because the lease agreement was executed in Tennessee and the agreement contains a choice-of-law provision that adopts Tennessee law. Enterprise and EAN further urge in their Motion for Summary Judgment that Tennessee law should apply because the entrustment took place in Tennessee. Plaintiffs do not address the choice-of-law allegations of Enterprise and EAN but rather claim the Motion for Summary Judgment fails to address Plaintiff's alleged material facts.
Choice of Law
In determining which state's substantive law applies, a Federal District Court must look to the choice-of-law rules of the jurisdiction in which the District Court sits. Budget Rent-A-Car System, Inc. v. Chappell, 407 F.3d 166, 169-70 (3rd Cir. 2005) (citing Klaxon Vo. V. Stentor Electric Mfg. Co., 313 U.S. 487, 496 (1941)). As this Court sits in Illinois, Illinois choice-of-law principles apply. The Supreme Court of Illinois provided substantial guidance to courts applying Illinois choice-of-law principles in Townsend v. Sears, Roebuck and Co., 879 N.E.2d 893, 898-902 (2007). As an initial matter, the question is governed by the Restatement (Second) of Conflict of Laws. Id. In personal injury tort actions, the place of injury controls unless another state has a more significant relationship with the occurrence and with the parties with respect to the particular issue. Id (quoting Restatement (Second) of Conflict of Laws § 146).
The Court must first determine, therefore, whether the presumption in favor of the law of Illinois, as the place where the injury occurred, can be overcome by the "most significant relationship factors" set forth in the Restatement's section on general tort principles (§ 145). This section provides,
Contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury occurred,
(c) the domicil, residence, nationality, place of incorporation and place of ...