202.684.8460

Owner’s Liability Following a Minor’s Golf Cart Accident

Oct 15, 2024 | Family Law, General Estate Planning

​“Owner’s Liability Following a Minor’s Golf Cart Accident,” that is the subject of today’s ACTEC Trust and Estate Talk.

Transcript/Show Notes

This is Travis Hayes, ACTEC Fellow from Naples, Florida. There was a recent decision in Florida where a minor was driving the family golf cart and got into an accident that severely injured the passenger, who was also a minor. This resulted in the minor who was driving the golf cart and the owner of the golf cart incurring significant liability.

ACTEC Fellow Barry Nelson of North Miami Beach, Florida joins us today to review the liability implications of the case and the potential ways to limit liability for owners and drivers. Welcome, Barry.

Barry Nelson:  Thanks, Travis, and I’m pleased to be here. I want to just let you know some of the materials that I strongly suggest that you look at. There’s a Florida Bar Journal article in July or August that Barry Nelson and my daughter Cassie Nelson wrote that’s open to the public. That has all of the sites and materials that I’m going to talk about today. There’s also a great article called “A Good Ride Spoiled Legal Liability and Golf Carts.” It’s in the Marquette Sports Law Review 2013, written by Robert Lang. Robert Lang is a very frequent speaker on golf cart liability. I suggest that you pull out his article as well.

National Issue of Golf Cart Liability

When I looked at this issue in preparation for today’s presentation, I wanted to go nationally as compared to just Florida to get an idea if this issue is a national problem as compared to a Florida problem. The case we’re going to talk about today is a Florida case. It is amazing how many Google articles there are on golf cart liability. It is a growing problem.

The number of golf carts being utilized is enhanced annually, especially post-COVID. And there are developments being created with the intent that their second car is a golf cart. So this is a problem, an issue that we all have to be aware of.

Why is this important to estate planning attorneys and our clients? Well, in this case- a Florida case- there was a total of $68 million of damages as a result of an accident that was where the driver was the niece- step-niece- of the owner of the golf cart. She was 16 years old. She picked up four children. She went through a stop sign in a development. A car hit a broadside. The golf cart went over and one of the children, a 12-year-old, experienced lifelong traumatic brain injury. And as a result, the parents of that child sued both the owner of the vehicle and received a judgment in excess of $50 million. And they sued the driver of the vehicle. And so the article and what I want to express is that there are two dangers. There’s a danger as the owner of the vehicle and there’s a danger as the driver of the vehicle.

Now, I just moved from Miami Beach to  Palm Beach area, and I moved into a golf cart community, and I bought a golf cart. And so one of the things that I looked into when I moved there as a paranoid practitioner is what kind of insurance do I need? And our community requires a minimal amount of insurance. So, one of the topics that we’re going to talk about today is how to make sure that your clients are adequately insured. And why is this important?

Estate Planner’s Concerns With Golf Cart Liability and Asset Protection

Well, my practice encompasses integrating estate planning and asset protection planning. For one reason, in this case, the person who has a judgment against him for $50 million, well, if he had a $50 million estate and his lawyer spent $50,000 of legal fees to create a sophisticated estate plan and now he gets hit with this $50 million judgment and doesn’t have insurance, his estate is going to be $0. So, all the work that we did for this person is going to have zero value if we didn’t at least try to advise him or any of our clients of the benefits of considering various asset protection techniques in connection with their estate plan.

The purpose of today is to tell you that there is another liability that we may not have been focused on in the past and to consider that there are always unexpected types of liabilities that we need to be aware of. And for that reason, consider integrating estate planning and asset protection planning.

Legal Exposure of Owning a Golf Cart

So, we’re going to talk about the exposure to the golf cart owner. And in some states, the exposure is not as great as in Florida. So, everyone who’s listening, you need to find out the type of exposure that your golf cart owners have. Florida is very bad, bad for a golf cart owner. There’s a broad exposure without any limitations on potential judgments. Also, consider the consequences of a child or anyone else driving a golf cart. If you were driving your own golf cart, you have exposure just like a car, but you need to make sure you’re covered because some golf carts are made strictly for, you know, inside the community on the golf course. Others are street-ready. And the rules are different because if you have a registered golf cart, you come in with one set of rules that are actually more protective. But if you have an unregistered golf cart like the person in this case, because he wasn’t registered, he had no limitation on that $50 million judgment. He was exposed to that full $50 million judgment. So many of the cases that I’ve looked at involve golf carts negligently driven by minors, as was in the case in this situation.

Negligent Entrustment and Dangerous Instrumentality Doctrine Legal Theories

And there’s a theory that there’s “negligent entrustment,” and that’s probably similar to the laws of many states. So if you own a golf cart or your client owns a golf cart and they let a minor or they let somebody who is intoxicated, if they let that person drive the golf cart, the legal theory of negligence is negligent entrustment. And that theory is one theory. But there’s another theory in Florida called a “dangerous instrumentality doctrine.” And that doctrine also says that if you lend out a car or a golf cart, which is considered for purpose of dangerous instrumentality doctrine, a car, and somebody gets into an accident, you, because you are solely the owner of that vehicle, can be held liable for the damages.

In this case, there were two theories that they utilized to sue. One was negligent entrustment, and the other was that the golf cart was a dangerous instrumentality. And, again, for people who live outside of Florida, you need to see which theories are concerning to you. But I can tell you this. I know so many people that have told me that they see the grandchildren riding around in the golf carts and the grandparents- who are our clients- very wealthy probably, they don’t realize when they give those golf carts out, and people are riding them that they could have a problem because they could be exclusively liable for those damages. Maybe not in a different state, but people need to look into what the laws are in those states.

Insurance that Covers Your Golf Cart

So part of what I want to make sure that the people think about looking at is, number one, do you have insurance for the golf cart? Number two, does your golf cart have liability coverage in excess of whatever coverage the person has? Very often, someone has $500,000 of coverage for an incident, but they could have a $10 million liability umbrella. So, both policies need to reflect the golf cart as an additional asset that the client owns. See if the homeowner’s policy covers it.

When I spoke to the lawyer who was the one who litigated this, he said that this case probably would have settled had there been sufficient insurance in place because they would have settled for the policy limits. I see that my 10 minutes is rapidly going by, and I would just encourage you to say, like Billy Joel in his song, “You ought to know by now” that there is tremendous exposure if your client’s utilizing a golf cart and loaning that golf cart.

For much more information on the details of the exposure, what the cases came out, and how there was a $50 million judgment against the owner of the vehicle. In addition, an $18 million consent judgment against the family of the 16-year-old who was driving the cart. And that is still being settled as to how much of that is going to be paid for by the insurance company. The insurance company denied coverage for the driver, but the appeals court in Florida held that the policy covered a golf cart, so that insurance company was at risk.

I hope this has opened your eyes to at least understanding that there is tremendous exposure that my grandchildren are not going to be happy with me when they can’t drive my golf cart. But we need to make sure that our clients are aware of these issues. Please read the articles and see what the law is in your state. And I hope this helped you be aware of a very expensive problem for people who do not take this issue seriously. Thank you very much.

Travis Hayes:  Thank you, Barry, for discussing the recent Florida case and what estate planning professionals can learn from the ruling about limiting liability for owners and drivers of vehicles such as golf carts.

Additional Resources

This podcast was produced by The American College of Trust and Estate Counsel, ACTEC, and made possible through a grant from The ACTEC Foundation. Listeners, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal or tax advice from their own counsel. The material in this podcast is for information purposes only and is not intended to and should not be treated as legal advice or tax advice. The views expressed are those of speakers as of the date noted and not necessarily those of ACTEC or any speaker’s employer or firm. The information, opinions, and recommendations presented in this Podcast are for general information only and any reliance on the information provided in this Podcast is done at your own risk. The entire contents and design of this Podcast, are the property of ACTEC, or used by ACTEC with permission, and are protected under U.S. and international copyright and trademark laws. Except as otherwise provided herein, users of this Podcast may save and use information contained in the Podcast only for personal or other non-commercial, educational purposes. No other use, including, without limitation, reproduction, retransmission or editing, of this Podcast may be made without the prior written permission of The American College of Trust and Estate Counsel. If you have ideas for a future ACTEC Trust & Estate Talk topic, please contact us at ACTECpodcast@ACTEC.org. © 2018 – 2024 The American College of Trust and Estate Counsel. All rights reserved.

Latest ACTEC Trust and Estate Talk Podcasts