Federal Court Addresses Liability of Both Renters of Vehicles and Out-of-Possession Landlords Under Dram Shop Act

In the case of Stopko v. Cobbs, No. 2:25-CV-00074-CB (W.D. Pa. Dec. 31, 2025 Bissoon, J.), the court addressed the issue of the liability of renters of cars and issues surrounding the Dram Shop statute.

According to the Opinion, the Plaintiff alleged that the Defendant rented a vehicle from a Co-Defendant company. 

The Plaintiff alleged that the Co-Defendant company did not perform any background check on the Defendant driver or review the Defendant driver’s driver’s history before renting him the vehicle. The Plaintiff alleged that, if the rental company had done so, they would have discovered that the Defendant driver should not have been entrusted with the rental vehicle.

The Plaintiff further alleged that, on the date of the accident, the Defendant driver went to a bar where he was allegedly served alcohol, including allegedly being served after he was allegedly visibly intoxicated.

The Plaintiff alleged that the Defendant driver then got into the vehicle that he had rented from the rental company and drove it, while intoxicated, the wrong way on the roadway, colliding in a head-on fashion with the Plaintiff.

In this decision, the court was addressing Motions to Dismiss filed by the Defendants with respect to allegations of negligence against the rental car company and with respect to the Defendant owners of the bar where the Defendant driver was drinking on the night of the accident.

The court granted the rental car company’s Motion to Dismiss after finding that the Plaintiff’s allegations were both factually and legally insufficient to state a claim upon which relief may be granted.

The court noted that the Plaintiff’s entire theory of liability rested on the allegation that the rental car company should have performed a background check on the Defendant driver or investigated his driver’s history before renting him the vehicle. The Plaintiff alleged that, due to these failures, the Defendant rental car company was negligent in entrusting the driver with the vehicle.

The court found that the Plaintiff had only pled conclusory statements regarding the Defendant driver’s driver’s history in support of these allegations. The court noted that no facts regarding the actual driver’s history appeared anywhere in the Complaint. The court held that, without more, the Plaintiff had failed to plead sufficient facts to support the claim stated.

The court otherwise noted that lessors of vehicles are not liable for a lessee’s negligent driving, unless the lessor was negligent in leasing or renting the vehicle to a person they had reason to know was incompetent to drive the vehicle. 

The court also noted that there was no basis under Pennsylvania law to interpret this standard to impose a duty on rental car companies to investigate a driver’s history before renting a vehicle to them.

The court also noted that other Pennsylvania courts have only considered lessors liable for the harm caused by a lessee’s intoxicated driving when the lessee was intoxicated at the time the vehicle was entrusted to the driver, or where the lessor had reason to know that the driver would later drink and drive. Such was not the case under the facts presented in this matter.

The court noted that, where lessees or drivers unexpectedly become intoxicated later unbeknownst to the lessor or owner of the vehicle, other courts had found that the owners and/or lessors are not liable for the injuries caused by the driver.

Relative to the separate claims against the liquor license holder for the bar and the owner of the bar, the court found that there was no basis in Pennsylvania law to support and argument by the Plaintiff that there is a duty on such Defendants, that is, bars and taverns, to prevent visibly intoxicated patrons from leaving the establishment without safe transportation, to offer alternative transportation, or to contact friends or family of the intoxicated customer. 

This court noted that there was no Pennsylvania or federal appellate court decisions in the Third Circuit that appeared to have directly addressed this issue. However, the court pointed to an unreported Eastern District court decision in which that court found that there was no basis in Pennsylvania law to impose a duty on an alcohol licensee or its agents to prevent an intoxicated patron from operating a motor vehicle.

Relative to the separate argument by the Defendants that all of the Plaintiff’s common law negligence claims should be dismissed because the Pennsylvania Dram Shop Act restricts liability for liquor licensees only to those duties imposed by the Act, the court stated that there was a lack of consensus among the Pennsylvania courts on the exclusivity of the Act. As such, this court attempted to anticipate how the Pennsylvania Supreme Court would rule if faced with this issue.

In the end, this court noted that the Dram Shop Act imposes a statutorily created duty on liquor licensees not to sell alcohol to visibly intoxicated customers and that the breach of such a duty constitutes negligence per say under the Act. This court noted that, once this duty is breached, “it does not stand to reason that [the Dram Shop Act] should shield licensees from all derivative common law liability for their actions in breaching it, including the negligent supervision that led to the breach.” See Op. at 12. Accordingly, the court allowed the Plaintiff’s common law negligence claim to proceed.

This court otherwise ruled that there was support under Pennsylvania law to also allow a claim against a landlord to go forward under an allegation that the landlord may be liable for injuries caused by their tenants’ intoxicated business invitees when the landlord knew, at the time of the lease, that the tenant would sell alcohol on the property, and later, that tenant was doing so improperly. As such, the court in this case allowed the claims against the landlord Defendant to proceed.

Anyone wishing to review a copy of this decision may click this LINK.


I send thanks to Attorney Joseph Hudock of the Pittsburgh office of the law firm of Summers McDonnell Hudock Guthrie & Rauch P.C. for bringing this case to my attention.

Source of image:  Photo by Brett Jordan on www.pexels.com.

Summary Judgment Secured on Negligent Entrustment Claim

In the case of Jones v. Ritchie, No. 4983-Civil-2019 (C.P. Monroe Co. June 28, 2021 Williamson, J.), the court granted a defendant-owner’s motion for summary judgment on a negligent entrustment claim arising out of a motor vehicle accident matter.

In this case, the plaintiff had sued a number of parties, including the person who had rented a rental car and who had then allowed the defendant driver to operate the vehicle during which trip that driver rear-ended another vehicle.  At the time, the person who had rented the car and the driver who as in the accident were in a boyfriend-girlfriend relationship.

According to the Opinion, before the subject accident, the defendant driver had a prior conviction for a DUI, of which the party who had rented the vehicle was aware. 

The record before the Court also revealed that the renter of the car was also aware that, around the time of the accident, the defendant driver was taking methadone to address addiction issues. In fact, the renter of the car had allowed the defendant driver to utilize the vehicle on the day of the accident because driver was going to her methadone clinic for treatment.

In addition to suing the defendant driver and the rental car company, the plaintiff filed a negligent entrustment claim against the party who had rented the vehicle and then let the defendant driver drive the vehicle. 

The party who had rented the car filed a motion for summary judgment on the negligent entrustment claim.

After reviewing the current status of the law of negligent entrustment, the court ruled in favor of the person who had rented the car and asserted that there was no evidence that the defendant driver had just taken methadone or was on any other drugs or alcohol at the time of the accident. Nor was there any evidence that the cause of the accident was due to any methadone medication used by the driver. 

Additionally, the court stated that there was no evidence stated or presented by the plaintiff that would show that the defendant driver was a bad driver, or that on the date of the accident the defendant driver was in a condition that would make her unable to operate a vehicle in a safe manner, or that such was known to the defendant lessor.

In the end, the court stated that there was no evidence to show that the defendant who had rented the car would have had any reason to know or have any actual knowledge of the fact that allowing the defendant driver to operate the vehicle would give rise to an unreasonable risk of harm to others.

Rather, based upon the facts of the case, under which the plaintiffs were caused to come to an abrupt stop on the roadway due to traffic ahead, after which the defendant driver could not stop in time and contacted the rear of the plaintiff’s vehicle, it appeared to the court that this accident occurred due to simple human error.

As such, the court granted the defendant who had rented the car summary judgment on the negligent entrustment claims asserted against him.

Anyone wishing to review a copy of this decision may click this LINK.

Note:  I was the defense counsel for the defendant who rented the car and who allowed the defendant driver to drive the vehicle.  Anyone who may wish to review my Motion for Summary Judgment and Supporting Brief may contact me at dancummins@comcast.net.

Trial Court Finds That Regular Use Exclusion Applies to Rental Vehicle Rented by Employer for Employee's Use

In the case of Rawl v. Geico, No. 11435-CV-2018 (C.P. Beaver Co. July 1, 2019 Ross, J.), the court issued an Opinion in a declaratory judgment action instituted by a Plaintiff against Geico Insurance Company in which the Plaintiff sought a judicial declaration on an issue of coverage involving the regular use exclusion under the policy.  

According to the Opinion, the Geico policy contained a regular use exclusion applicable to UIM claims under the policy, which exclusion provided that when an insured is “using a motor vehicle furnished for the regular use of you, your spouse, or a relative who resides in your household, which is not insured under this policy” coverage is excluded.  

The Plaintiff in this matter was involved in a motor vehicle accident that was the fault of a third party tortfeasor.   The Plaintiff secured the liability limits from the tortfeasor and then turned to Geico for UIM coverage.

At the time of the accident, the Plaintiff was occupying a Dodge Ram van which had been rented by his employer, State Industrial Products, from Enterprise Rent-A-Car.   The The plaintiff was using the rental van because his employer’s regular work van was out of service on the date of the accident.  

The rental van was insured by Traveler’s Insurance Company and provided UIM coverage, which the Plaintiff received.  As noted, the Plaintiff then made a claim for additional UIM benefits under his own policy with Geico.  Geico denied the claim based upon the regular use exclusion contained in the Geico policy, asserting that the rental van in question was a temporary substitute vehicle for the Plaintiff’s work van.  

The parties agreed in a joint stipulation of facts that the rental van in question was not a part of the regular fleet of vehicles owned and operated by the Plaintiff’s employer.   It was further agreed that the rental van had been picked up and rented for only one or two days leading up to the subject accident.   It was additionally agreed between the parties that the Plaintiff had not operated that same rental van on any prior occasion for any purpose.  

Based upon the facts before the court, the parties filed cross-Motions for Summary Judgment. 

The defense asserted that the Plaintiff in this matter was operating a rental vehicle which was a replacement for his regularly used company provided vehicle.   The Defendant carrier submitted that this is a distinction without difference with respect to the regular use exclusion since the vehicle in question was available for the Plaintiff’s regular use at the time of the accident.   The carrier asserted that the fact that the Plaintiff may have used the rental vehicle on only one or two occasions prior to the accident was not material. The fact remained, according to the defense, that the vehicle was furnished and available for the Plaintiff’s regular use. 

In contrast, the Plaintiff pointed to the stipulation of the parties confirming that the rental van in question had only been rented for one or two days before the incident and not any extended period of time to qualify as a temporary substitute vehicle under the policy.   The Plaintiff also emphasized that he did not operate the same rental van on any prior occasion for any purpose.   As such, the Plaintiff asserted that the rental van did not fall within the definition of a vehicle furnished for the regular use of the Plaintiff.  

After a review of the positions of both parties in this matter, as well as a summary of the current status of Pennsylvania law on the regular use exclusion, the court noted that the case before it appeared to be one of first impression.  

Based upon his review of several cases involving the regular use exclusion, Judge Ross held that the exclusion applied in this matter to warrant summary judgment in favor of the Defendant insurance company. 

Anyone wishing to review a copy of this case may click this LINK.

I send thanks to Attorney Joseph Hudock of the Pittsburgh law firm of Summers, McDonald, Hudock, Guthrie & Rauch, P.C. for bringing this case to my attention.