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Salas v. Allstate Rent-A-Car12/14/2000
This case presents the issue of whether a short-term lessor of motor vehicles may be required to pay damages to persons injured by lessees of its motor vehicles when a lessee's personal insurance has paid the Nevada financial responsibility minimum coverage to the injured parties. We conclude that it may be so required.
FACTS
Stephen J. Romeo, a resident of Pahrump, Nevada, leased a car from Allstate Rent-A-Car, Inc. According to an addendum attached to Romeo's contract with Allstate, Romeo declined all supplemental coverage. The contract provided a warning that read, " our own insurance policy may cover all or a portion of your liability while renting this vehicle. You should consult your insurance agent to determine the scope of your coverage." At the time that Romeo leased the vehicle, he was personally covered by an insurance policy with California State Automobile Association ("CSAA") with third-party liability limits of $15,000.00 per person injured or killed in a single accident, $30,000.00 total per accident for bodily injury /death, and $25,000.00 per accident for property damage.
On July 12, 1996, Romeo was operating his leased car in an allegedly negligent manner and rear-ended a car driven by Pedro Salas. Pedro's wife, Florence Salas, and Thomas and Ester Rivieras were also in the car. The four sustained injuries for which they received medical treatment.
On June 9, 1997, the Salases filed a personal injury action against Romeo and Allstate. Thereafter, the Salases entered into agreements with Romeo and CSAA under which CSAA, pursuant to Romeo's insurance policy, agreed to pay Pedro $6,000.00 and Florence $11,000.00 in exchange for a partial covenant not to execute against Romeo. The covenant stated in part that the Salases:
expressly reserve all rights of action, claims and demand against all other persons and entities above, including any and all other coverages . . . and/or personal coverages through any entity, including, but not limited to, ALLSTATE RENT A CAR, its agents, subsidiaries or any other auto rental company or entity, with whom they are associated. (Emphasis in original.)
CSAA also settled with the Rivieras in the amount of $13,000.00, bringing CSAA's total payment for the accident to $30,000.00, Romeo's policy limit and the statutorily required minimum for injury to two or more persons in one accident. See NRS 485.3091.
After settling with CSAA, the Salases filed an action against Allstate alleging that the injuries sustained were greater than the $30,000.00 CSAA had paid pusuant to the covenant not to execute. In response to the Salases' complaint, Allstate filed a motion for summary judgment arguing primarily that it had no obligation to appellants because CSAA had paid an amount equal to the minimum liability limits set by NRS 482.305(1) as interpreted by this court in Alamo Rent-A-Car v. State Farm, 114 Nev. 154, 953 P.2d 1074 (1998).
After a hearing, the district court granted summary judgment for Allstate, stating that:
The reason that [Allstate] is liable for anything is because the statute says you're liable up to the minimum of fifteen/thirty. So, the issue is did the Legislature intend for them to have to pay in accidents where the damages allegedly exceed the fifteen/thirty limits provided by the driver's insurance company, or whatever the applicable policy limits are. Should [Allstate] have to pay above and beyond that, either another fifteen/thirty or anything above and beyond that? And my answer to that is I don't think that the statute contemplates that the rental car companies are to pay, except in a circumstance where the driver does not have
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