Car Dealership Test Drive and Permissive Use/Vicarious Liability

Madrigal v. Paragon Motors of Woodside, Inc., et al, 2025 NY Slip Op 01620 (App. Div., 2nd Dept., decided on or around March 19, 2025) involves a car dealership, an accident that occurred during the course of a test drive of a car from the dealership, and a question of permissive/authorized use of that vehicle.

The case arose when, in 2021, a plaintiff was allegedly injured when her vehicle was struck in the rear by a vehicle driven by the defendant driver. At the time of the accident, the defendant driver was test driving a vehicle owned by the defendant Paragon Motors of Woodside, Inc (with the test drive’s purpose to determine whether to purchase the vehicle). A lawsuit was filed, and at some point the injured plaintiff filed a motion for summary judgment, which included a request to the trial court to determine that no triable issues of fact existed for a jury with regards to the negligence of the car dealership (as, plaintiff claimed, as the dealership owned the car, then it should be vicariously liable for the accident/resulting injuries). The court granted the motion – thereby determining, as a matter of law, that the car dealership, as the owner of the car, is vicariously liable for the defendant driver’s conduct.

On appeal, however, the Appellate Division, Second Department reversed that aspect of the lower court’s determination, with the appellate decision setting forth the following: “…an owner [of a vehicle] may avoid liability under the statute [VTL 388] if the driver exceeded the time, place[,] and purpose of the use permitted by the owner”…Here, [the defendant driver] testified at his deposition that [a car dealership sales representative] gave him the keys to the vehicle and told him to ‘go ahead and do your thing.’ [The defendant driver] then drove the vehicle on local roads near Paragon’s dealership before proceeding to the expressway, where he operated the vehicle for more than ten minutes before the collision occurred. However, in support of her motion, the plaintiff also submitted a transcript of the deposition testimony of [the car dealership salesman], who testified that he advised [the defendant driver] to drive ‘around the block one time’ and to return within ‘five or ten minutes’…The plaintiff was therefore not entitled to summary judgment on the issue of liability against Paragon, since there were triable issues of fact as to whether [the defendant driver] ‘was driving the vehicle in a place and’ for the time period ‘that exceeded the terms of the consent given.'”

Salvatore R. Marino, Esq.