Tips for Parents of Minor Children who are Driving by Philip Mize
Parents, you need to be aware that under Tennessee law, you can be held vicariously liable for any damages or losses your teenage child might cause as a result of an automobile accident which occurs while your child is driving a vehicle that is registered in your name. The significance of this little known law is that the parents, who literally have done nothing to cause the accident, may nonetheless face financial disaster simply because their teenage child mistakenly caused an automobile accident while driving a vehicle that was owned and/or registered to the parent. In Tennessee, such imputed liability is generally triggered under two principles of law:  the principle/agent relationship created by operation of Tennessee Code Annotated, §55-10-311, and  the Family Purpose Doctrine as adopted by the State of Tennessee.
In Tennessee, unless a child is legally emancipated, it is unlawful for a child under the age of eighteen to be the registered owner of a vehicle. Therefore, nearly every vehicle that is driven by a teenage driver is registered in the name an adult owner, generally their parent/parents. In almost every lawsuit where a victim sustains personal injuries resulting from an automobile accident caused by the negligence of a teenage driver, the parents/owners are included within the lawsuit as named defendants. Such lawsuits often result in damages ranging into the hundreds of thousands of dollars. If at the conclusion of the lawsuit, if the injured party is awarded a judgment that exceeds the amount of liability insurance limits which insure both the parent and the culpable underage driver, then the parent (owner) and child will both be held personally responsible for the excess portion of the Judgment, or in other words, you will be personally responsible for the portion of the Judgment not paid by your personal automobile insurance policy.
The good news is that with a little careful planning on the front end, parents can minimize their risk of being held financially responsible for the negligent actions of their children. The foregoing suggestions are offered to help you minimize you and your family’s financial exposure to such imputed liability.
- I. Imputed Liability to Parents by Operation of Tennessee Code Annotated, §55-10-311
Tennessee Code Annotated, §55-10-311 provides as follows:
(a) In all actions for injury to persons and/or to property caused by the negligent operation or use of any automobile, auto truck, motorcycle, or other motor propelled vehicle within this state, proof of ownership of the vehicle shall be prima facie evidence that the vehicle at the time of the cause of action sued on was being operated and used with authority, consent and knowledge of the owner in the very transaction out of which the injury or cause of action arose, and the proof of ownership likewise shall be prima facie evidence that the vehicle was then and there being operated by the owner, or by the owner’s servant, for the owner’s use and benefit and within the course and scope of the servant’s employment. The prima facie evidence rules of the preceding sentence shall also apply in cases of the negligent operation of a vehicle being test-driven by a prospective purchaser with the knowledge and consent of the seller or the seller’s agent, whether or not the seller or the seller’s agent is present in the vehicle at the time of the alleged negligent operation.
The Tennessee Court of Appeals in case of Lindsey v. Baker, 2011 Tenn.App. LEXIS 103 (Tenn.Ct.App. Feb. 10, 2011)(attached as Exhibit “1”), also recently held that “although the statute [T.C.A. § 55-10-311] creates prima facieevidence that the minor driver was operating the vehicle with the authority, knowledge, and consent of Owner/Parent, this does not automatically mean that parents is liable for minor child’s actions. The Court ruled that “Tenn. Code Ann. § 55-10-311 does not create any cause of action but rather establishes certain prima facie evidence. ‘Permissive use, standing alone, establishes only a bailment. In and of itself it is not a basis for the imposition of personal liability upon the owner of a vehicle.” See Hamrick v. Spring City Motor Co., 708 S.W.2d 383, 385 (Tenn. 1986).
The Courts in Tennessee have held that the presumption raised by this statute is a bare, rebuttable presumption available only in the absence of any evidence upon the subject and operates merely to shift to the Defendant the burden of going forward with the evidence on the point involved and when this burden is met, the presumption is void. See Southern Motors, Inc. v. Morton, 154 S.W.2d 801 (Tenn.Ct.App. 1941). The foregoing presumption will not apply with the introduction of credible evidence that the automobile was not being used on the owner’s business. See Wright v. Bridges, 65 S.W.2d 265 (Tenn.Ct.App. 1948).
Based upon the foregoing cases, it is important for the parent to establish boundaries for the minor child’s permissive use of the Parent’s vehicle to insulate the Parent from liability stemming from the child’s use of said vehicle. Parents, the following are tips which can help you protect your personal assets and which can help to minimize your exposure to such lawsuits:
[A] Consider having the parent who was the least amount of personal financial assets be named the registered owner of the vehicle. For instance, in a traditionally family setup, it is recommended that only one parent have an ownership interest in the family home, properties and family business. The other spouse, who has very limited assets, should be named the registered owner of the vehicle to be primarily driven by the teenage driver. The purpose of this arrangement is to shield the family’s financial assets from being exposed in a lawsuit involving an accident caused by the teenage driver.
[B] Establish very strict boundaries regarding when your teenage driver is allowed to use the vehicle. For instance, establish an understanding that the teenage driver will only use the vehicle for driving to and from school and work, and under no circumstances should the teenage driver be allowed to drive the vehicle with general permission of the owner. Instead, the minor should be required to obtain special permission from the owner/parent before each use of the vehicle. If the teenage driver is involved in an accident at a time or location where the driver was not permitted by the parent to drive such vehicle, then an argument can be made that the agent/principle relationship created by T.C.A. §55-10-311 is rebutted by proof that the teenager used the vehicle outside the scope and permission of the parent[s].
[C] Establish strict boundaries about what persons are allowed to occupy the vehicle and use the vehicle. Prepare a document that you require you underage child to sign which evidences their understanding that under no circumstances are they allowed to have more than one occupant under the age of 16 within the vehicle at any given time, and include within that document the instruction that no other person other than the underage child, regardless of reason, is allowed to drive the vehicle. Although minors are not eligible to enter into contracts, said document would be evidence that you the parent, set out specific parameters and restrictions regarding your child’s use of the family vehicle, and said document would be beneficial to any lawsuit the parent might himself/herself defending which arises from an automobile accident caused by the minor driver.
[D] Be sure to purchase an adequate liability insurance policy from your insurer, and consider purchasing a general liability umbrella policy from your insurer which will better protect you and your family. Be certain to include each of your minor children as named drivers under the policy to be covered for any vehicle you own. Generally, you can purchase higher limits of liability insurance coverage with only a minimal increase in your policy premiums. Tennessee law only requires vehicle owners to maintain a minimum of $25,000 in automobile liability insurance. However, if you find yourself named in a lawsuit which seeks recovery for personal injuries caused by you and/or your children, you will quickly find that $25,000 of insurance coverage is inadequate. The liability insurance policy you purchase provides you and your responsible child with coverage up to the amount of you policy limits, and the policy will afford you a defense. Attorney fees and litigation costs can be quite expensive in almost any lawsuit. Generally every liability automobile liability insurance policy will afford the insured persons with an attorney to be paid be the insurer, and the defense litigation costs will typically be paid by the insurer. Having an adequate amount of automobile liability insurance will increase your peace of mind, and better protect your family and assets. In order to adequately protect yourself and your family with sufficient insurance coverage, you should consult with your insurance agent
[E] Once your child reaches the age of eighteen (18), Parents be sure to remove your name as the registered owner of the vehicle being driven by your children. To do so, you will need to negotiate a legitimate sale of the vehicle to your child and then visit your county clerk’s office to amend the vehicle registration as that your adult child is officially named as the only owner of the vehicle. If the vehicle is financed, then you will need to consider having the vehicle financed solely within the adult child’s name so the parent can be removed from the vehicle registration. By removing yourselves as registered owners of such vehicles, you have taken a necessary step to insulate yourselves from being liable for any damages or losses which may arise from your adult child’s operation of that vehicle. However, also keep in mind that once you facilitate this transaction, your child may no longer be covered under your policy of automobile insurance which originally insured your child as he/she was driving your vehicle while living in your household. Again, you should consult with your insurance agent to verify that your child is properly insured and coordinate having your child insured under a separate insurance policy if necessary.
- II. Imputed Liability by operation of the Family Purpose Doctrine
The Family Purpose Doctrine is a legal doctrine under which the head of a family may be held liable under the theory of respondeat superior for the negligence of another family member while operating a motor vehicle. See Droussiotis v. Damron, 958 S.W.2d 127, 131-32 (Tenn. Ct. App. 1997); Gray v. Amos, 869 S.W.2d 925, 926 (Tenn. Ct. App. 1993). In order for the family purpose doctrine to be applicable, two requirements must be met. First, the head of the household must maintain the motor vehicle for the purpose of providing pleasure or comfort to his or her family. Additionally, the driver of the vehicle must have been using the motor vehicle in furtherance of that purpose and with the permission of the owner, either expressed or implied, at the time that negligence occurred. See Camper v. Minor, 915 S.W.2d 437, 447 (Tenn. 1996); Droussiotis, 958 S.W.2d at 131; Gray, 869 S.W.2d at 927
The first question to be determined is whether the vehicle owner would be deemed the “head of household” of the residence whether the culpable underage driver resided at the time of the automobile accident. Most parents who reside with their underage children would be legally deemed the child’s head of household.
The next question to be determined is did the head of the household maintain the motor vehicle for the purpose of providing pleasure or comfort to his or her family. If the parent/owner restricts the use of the vehicle to only the designated underage driver, then arguably the vehicle is not being used for the family, but instead is being used solely for the single child driver. Multiple Tennessee courts have held that the Family Purpose Doctrine does not apply where the vehicle was not purchased and maintained by the owner for the pleasure and convenience of the other members of the family with general permission for them to use it for that purpose.
The final question to be determined, and likely the most important question of all is, did the members of the family who operated the vehicle in issue have to obtain special permission from the owner on each occasion of the vehicle’s use by them.
The Tennessee Supreme Court case of Harber v. Smith, 292 S.W.2d 468 (Tenn. 1956), illustrates how you can protect yourself from the being held vicariously liable for the damages and losses caused by your negligent child by negating the application of the Family Purpose Doctrine:
 First, do not purchase the vehicle for the pleasure and convenience of the family in general, meaning, other than the underage driver in issue, do not personally drive the subject vehicle nor allow any other persons in the family or household to use said vehicle.
 Second, require your underage child to personally pay for the maintenance and operation of the vehicle.
 Third, and most importantly, require your child to obtain special permission from you each and every time the vehicle is to be used by the child. In many cases, whether the Family Purpose Doctrine applies hinges upon whether the child had general permission to use the vehicle at his/her own discretion, or whether the child was required to obtain special permission from his/her parents each and every time the vehicle was used.
In the end, the best method of protecting yourself, your financial assets and your family from being held vicariously liable for the mistakes and negligence of your child is obtain a liability insurance policy from a reputable insurance provider, which provides liability insurance coverage sufficient in amount to fully protect you and your family. Obviously the more financial assets you have to lose, the more liability insurance coverage you need. In addition to liability insurance coverage, consider purchasing an Umbrella Policy which stacks in addition to your automobile insurance policy to provide you and your family with increased liability coverage. The umbrella coverage is also beneficial to protect the Parent/homeowner from numerous types of liability which may arise from injuries sustained within the Parent’s residential property. Again, consult your insurance agent to address how much insurance is enough under your specific circumstances.
About the Author:
Attorney Philip M. Mize, is a member/shareholder of Batson Nolan PLC, and he practices in the firm’s litigation section. Philip’s practice focuses upon representing clients who have been injured in automobile accidents and semi-truck accidents.
If you have any questions about this article or if you or a loved one have been involved in an automobile accident, please do not hesitate to contact Philip (firstname.lastname@example.org) with any legal concerns you may have.