The New York Appellate Division, First Department recently issued a decision with significant implications for the motor-vehicle rental industry, rejecting a potential significant expansion of liability. In Grandelli v The City of New York, the court reversed the motion court and dismissed claims against Home Depot U.S.A. arising from a terrorist attack involving a rental truck.
The underlying lawsuits stemmed from a tragic 2017 incident in which Sayfullo Saipov rented a pickup truck from a Home Depot location in New Jersey and deliberately drove it into pedestrians and cyclists on a Manhattan bike path. The plaintiffs asserted that Home Depot negligently entrusted the truck to Saipov and should be held liable for the resulting injuries and deaths.
The Appellate Division disagreed. It held that the plaintiffs failed to establish a key element of a negligent entrustment claim—that the entrusting party had some special knowledge concerning a characteristic or condition peculiar to the person to whom the chattel is given, which renders that person’s use of the chattel unreasonably dangerous. The Court found no evidence that Home Depot had such knowledge.
Although the plaintiffs cited government bulletins identifying “red flags” for rental transactions potentially linked to terrorism, the Court concluded that these did not impose an independent legal duty on private rental companies. The Court noted:
The only discrepancy cited—the omission of Saipov’s middle name on one document—did not amount to a meaningful warning sign.
Saipov’s conduct during the transaction was routine and non-suspicious.
There was nothing in the record to suggest that Saipov was on a terrorist watchlist or that Home Depot had access to watchlists or databases, if they exist.
The Court explicitly declined to expand the doctrine of negligent entrustment to require rental companies to act as law enforcement proxies, analyze subjective indicators, or predict criminal intent without clear warning signs.
The key implications of the Grandelli decision for the motor-vehicle rental industry are:
(1) Negligent Entrustment Requires Specific Knowledge
Rental companies will not be liable for renters’ criminal acts unless specific knowledge or clear warning signs indicate a dangerous propensity. Allegations of negligent entrustment must show that the rental company knew or should have known of a renter’s specific risk to public safety;
(2) General Government Advisories Do Not Establish a Duty
Internal or government advisories on potential terrorism indicators do not automatically create a legal duty on rental companies; and
(3) Rental Employees Are Not Law Enforcement Substitutes
Courts should not view rental company employees as proxies for law enforcement agencies to weigh subjective factors to determine whether a renter threatens the public unless there are indicators that suggest a renter’s propensity for violence.
Despite prevailing on summary judgment, the allegations in Grandelli highlight the importance of rental businesses training their employees, thoroughly documenting transactions, and creating standardized checklists to show due diligence and protect against negligence entrustment claims.
Gerber Ciano Kelly Brady LLP, represented a nationwide industry leader as amicus curiae supporting Home Depot. The firm’s appellate advocacy team has extensive experience preparing amicus briefs for trade associations and businesses in high-stakes litigation, offering courts valuable insight into the broader implications of legal doctrines.
To discuss the Grandelli decision, negligent entrustment liability, or best practices for mitigating risk through employee training and documentation systems, contact our appellate attorneys:
