Enterprise Rent-A-Car Co. v. Koshy, et al.
2010 ME 44
May 25, 2010
Erica Johanson and John Wall recently convinced the Maine Law Court to overturn summary judgment against their client, Pramodh Koshy, in an action for contribution and indemnification in which Enterprise Rent-A-Car Company was looking to Koshy to pay over $1.0 million in settlement costs and attorneys’ fees. The Law Court ruled that the statute imposing joint and several liability on owners and renters of rental cars did not apply to a renter who was not operating the vehicle and who was not negligent in allowing someone else to operate the rental car. The Law Court also ruled that the rental agreement may be unenforceable to the extent that it requires a renter to fully indemnify Enterprise for liability arising out of an accident.
The case arose out of an accident on I-295. Koshy had rented a car from Enterprise at the request of his employer, Scandent. At the time of the accident, the rental car was being operated by another Scandent employee identified on the rental contract as an additional driver. Enterprise settled the personal injury claims and sought contribution from Koshy on the basis that he was joint and severally liable under 29-A M.R.S.A. § 1652, a statute that imposes such liability on the owners and renters of rental vehicles. Enterprise also sought indemnity from Koshy based upon an indemnification provision on the reverse side of the Enterprise rental agreement.
On appeal, Erica and John argued that Section 1652 should not apply to Koshy and that the indemnification provision in the rental agreement was unenforceable as unconscionable. The Law Court agreed with the first argument in its entirety. As to the second argument, the Law Court held that the indemnification provision may be unconscionable, depending upon the circumstances in which the agreement was reached and the relative bargaining positions of the parties. The Law Court remanded the case to the Superior Court for additional findings of fact on this issue.
