Vermont Suit Raises Liability Issue

Woman faces property loss because of her loan to reckless nephew

LUELLA WILSON, an elderly widow from Vermont, never dreamed she would be fighting a legal battle to keep her life savings and her home. The tiny, white-haired woman feels cheated by a legal system which found her liable for $950,000 in a precedent-setting lawsuit. A state Supreme Court decision backed a lower jury court ruling that found Mrs. Wilson guilty of ``negligent entrustment'' because she lent her grandnephew money to buy a car.

A few weeks after she lent him $6,300, the grandnephew, Willard Stuart, drove the car off a bridge in an accident after he had been drinking alcohol and smoking marijuana. One of the passengers, Mark Vince, was injured in the crash. Mr. Vince later sued Mrs. Wilson for lending the money to her grandnephew.

Wilson is afraid of losing everything she owns including her Vermont home where she has lived for more than 50 years. Since her insurance company has refused to pay the liability settlement, her assets have been frozen except for a modest amount of money for her to live on. But Wilson says it is not enough and feels she should not be held responsibile for an accident of which she had no part.

``They froze every bank account I had in town,'' she says. ``I began to wonder how I was going to live.''

The Wilson case raises important questions because it extends liability to the act of lending money, says David Evans, chairman of the Alcoholism and Drug Law Reform Committee of the American Bar Association. Should banks check a person's driving record before lending money for a car? Are banks liable for lending to companies that are polluters? ``This could have a chilling effect on the economy,'' he says.

Wilson, who was home the evening of the accident, has never met Vince and feels she has been targeted because of her money. Over the years, she and her husband have lived a comfortable, at times flamboyant, lifestyle. Together they owned and managed a dude ranch in North Bennington, a night club in Troy, N.Y., and a hotel in Miami.

In her younger days she would accompany her father on hunting trips and she brags of being the first woman in town to own a motorcycle. Her living room is decorated with a collection of statues, paintings, family photographs, and stuffed animals.

But she worries she will have to give up all of her belongings to pay the liability cost.

``I think about it day and night,'' she says.

The Vermont Supreme Court also ruled last year that the lower court judge should not have excused the car dealership and the auto salesman from the case before the trial began. Both were originally included in the suit along with Wilson. A retrial is scheduled for Feb. 20 at Bennington Superior Court to determine if they share the liability costs.

The plaintiff's attorney, Rolf Sternberg, argued that Wilson could have foreseen the accident because she knew that her grandnephew, then 18, was irresponsible and that he did not have a license. She also accompanied her grandnephew to the dealership on two separate occasions to purchase the car. The car's title, however, was in Stuart's name.

``This has nothing to do with a loan. It's plain old, `Let's go down and buy a kid a car''', says Mr. Sternberg. ``It's common sense that you don't give something to someone who you know or have reason to believe would use it dangerously.''

The lower court's ruling against Wilson is backed by a legal doctrine known as negligent entrustment where individuals can be found liable for the consequences of giving potentially dangerous items to those who cause harm. The case has gained national attention and some legal experts say it could have important ramifications. They point to questions about liability.

The issue of liability hinges on the foreseeability of the accident, Mr. Evans says.

``You've got to show a direct relationship between the act and the injury,'' he says. Such instances could include giving car keys to an intoxicated person or a parent giving a child a gun.

The case also draws attention to concerns about liability when alcohol is involved. The Wilson decision is similar to the ``bartender liability'' statutes many states have recently adopted, says Douglas Richards, president of the Vermont Bar Association. Under such statutes, a bartender can be found liable if he serves someone liquor when he knows that person is already intoxicated.

In a sense, the state Supreme Court ``expanded in a given area in tort law the responsibility of parties,'' Mr. Richards says.

Waving a stack of envelopes, Wilson says she has received numerous letters of support. The feisty Vermonter says she is determined to put up a fight at the coming trial on Feb. 20. She could not testify at the first trial for health reasons but is determined to make it this time.

``I'm going to the trial if I can walk there,'' she says. ``We'll see how smart their lawyers are.''