DENVER — A dealership will be on the hook for damages caused by a customer during a test drive, according to a unanimous decision reached last week by the Colorado Court of Appeals.
The court overturned an earlier decision by a district court that said Go Courtesy Ford of Littleton, Colo. — which now does business as AutoNation Ford Littleton — did not owe the customer’s insurer, American Family Mutual Insurance Co., for the damages resulting from the accident.
According to court documents, Go Courtesy Ford customer Kristin Hart, who was accompanied by a salesman, made a left turn in front of oncoming traffic during a test drive and struck another vehicle. American Family paid the claim, but it also filed a negligence claim against both Hart and the dealership to recoup the costs. The insurer claimed that “the test drive constituted a joint venture between Go Courtesy Ford and Hart, making Go Courtesy Ford vicariously liable for Hart’s negligence.”
The district court ruled that the test drive was not a joint venture because Hart and the dealership had “adverse financial interests.” However, the Colorado Court of Appeals determined that Hart and the dealership “shared a common purpose in conducting the test drive itself, notwithstanding their differing financial interests in the underlying transaction.”
This was the first time the joint venture doctrine has been considered in the context of a test drive in Colorado, according to court documents.
Originally posted on F&I and Showroom
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