Iowa’s Highest Court Holds Plaintiff’s Release of Driver Extinguishes the Vehicle Owner’s Vicarious Liability Notwithstanding Plaintiff’s Express Reservation of Right to Sue the Vehicle Owner

Posted on: April 13th, 2021

Plaintiff was a passenger in a golf cart driven by his son when they struck a bridge and the impact ejected Plaintiff, causing severe injuries. After settling his claims with the driver with a signed release that expressly reserved his claims against the golf course, the owner of the golf cart, Plaintiff sued the golf course for premises liability, as well as owner liability under Iowa Code section 321.493(2)(a), which provides: “in all cases where damage is done by any motor vehicle by reason of negligence of the driver, and driven with the consent of the owner, the owner of the motor vehicle shall be liable for such damage.” The owner moved for summary judgment arguing Plaintiff’s release with the driver extinguished the vicarious liability claim. The district court disagreed and the case proceeded to trial. The jury returned a defense verdict on the premises liability claim and found the driver 100 percent at fault for Plaintiff’s damages. Plaintiff filed a motion for a new trial, which the district court granted. The owner appealed and the Iowa Supreme Court retained the appeal.

On appeal, the owner argued that by releasing the driver, Plaintiff extinguished any claim he had against the owner under section 321.493. The Iowa Supreme Court agreed, holding “the release of the driver effectively extinguishes the vicarious liability of the vehicle owner under section 321.493, even when the release purported to reserve the plaintiff’s claim against the owner.” The Court disagreed with Plaintiff’s assertion that its ruling would discourage settlements with drivers if the release extinguished the owner’s vicarious liability. Instead, the court reasoned that its ruling would avoid a number of problems, including “circuity of litigation” such as owners filing indemnity and/or contribution claims against drivers.

The Iowa Supreme Court reversed the district court’s grant of a new trial and remanded the case for dismissal.

Jones v. Glenwood Golf Corp., No. 20–0303 (Iowa Mar. 12, 2021).

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