GUS KASSIS, administrator, [Note 1] vs. LEASE AND RENTAL MANAGEMENT CORPORATION & another. [Note 2]

WOLOHOJIAN, J. At issue in this appeal is whether a long-term lessor of a vehicle owes a duty of care to a person who is injured as a result of a mechanical defect arising after the beginning of the lease. We conclude that, under the law of bailment, no such duty exists. Accordingly, we affirm the trial judge's allowance of the defendant's motion for a new trial, as well as the judgment entered in the second trial.

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Background. The plaintiff brought this suit as administrator of Dib Kassis, who was struck by a car driven by Angela Marie Tropeano. Tropeano leased the car under a four-year lease from the defendant, Lease and Rental Management Corporation (L & R). [Note 3] At the time the lease was entered into, the car had been inspected, and it bore an inspection sticker valid through September 30, 2003. [Note 4] By every indication, the vehicle was in safe and proper working order [Note 5] and was in compliance with all applicable statutes and regulations at the time it was leased to Tropeano.

The lease agreement expressly placed on Tropeano a number of duties and responsibilities regarding the maintenance and upkeep of the vehicle. The lease required Tropeano to maintain the vehicle in good working condition and to have mechanical problems repaired at her own expense. Paragraph 'M' of the agreement ("Vehicle Upkeep and Alterations") provided:

"I [Tropeano] will at my expense, have the vehicle serviced in accordance with the manufacturer's recommendations, maintain the vehicle in good working order and condition, and have all necessary repairs made."

In addition, paragraph 'C' of the agreement ("Vehicle Warranties") provided: "I [Tropeano] understand that I have the entire risk during the lease term as to the vehicle's quality and performance and that if I have a mechanical problem with the vehicle I am required to have the problem fixed and pay all repair and service costs to the extent they are not covered by any manufacturer's new car warranty assigned to me."

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Tropeano also agreed to carry minimum insurance coverage naming L & R as an additional insured. L & R, for its part, reserved the right to inspect the vehicle at any reasonable time. [Note 6]

On September 30, 2003, the annual inspection sticker on the vehicle expired, and Tropeano did not take the car to be inspected. [Note 7] Around early January, 2004, Tropeano began to notice problems with the vehicle's brakes, and she had them repaired that same month. The uncontested expert testimony at trial was that the repair was faulty, resulting in a substantial leak of brake fluid. [Note 8] There was also uncontested expert testimony that a standard annual inspection -- had one been conducted after the repair -- would have disclosed the leak.

The accident was caused by a brake failure the following month (fifteen months into the lease). Tropeano was driving her children to daycare, unaware of any continuing problem with the brakes. She was unable to stop the car before it struck and fatally injured Kassis.

The plaintiff sued Tropeano and L & R. This appeal concerns only the negligence claim asserted against L & R, the liability portion of which was twice tried to a jury. In the first trial, the judge, relying on Instruction 2.2.5 of the Massachusetts Superior Court Civil Practice Jury Instructions (Mass. Cont. Legal Educ. 2d ed. 2008), [Note 9] drafted a jury verdict slip that required the jury to find whether L & R had:

"a duty of care to take the reasonable steps necessary to

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assure that the Neon leased to Angela Tropeano and operated by her at the time of the accident was in good repair and capable of being operated safely and without posing an unreasonable danger to others."

The jury found that L & R owed this duty and that the duty had been breached. The jury awarded damages in the amount of $1,124,084. [Note 10]

L & R timely filed a motion for new trial, arguing that, as lessor of the vehicle, it had no duty to keep the vehicle in safe mechanical condition at the time of the accident and that the finding was, therefore, in error. The judge agreed, concluding that the long-term vehicle lease was a form of bailment. As bailor, L & R was not liable for harm to third parties caused by a defect in the bailed property unless L & R had actual knowledge of the defect at the time of the accident or had agreed to maintain the vehicle after its delivery to Tropeano. Because neither of those two conditions existed here, the judge concluded that the instruction was both erroneous and prejudicial. The judge also concluded that a new trial (rather than judgment notwithstanding the verdict) was in order because L & R's obligation to have the car annually inspected, G. L. c. 90, § 7A; 540 Code Mass. Regs. § 4.03 (1999), imposed a duty on L & R toward Kassis, although this duty was materially different from the one on which the jury were instructed in the first trial. In the second trial, the jury found that L & R owed no duty to Kassis. A judgment entered in favor of L & R. The plaintiff now appeals from that judgment and argues that the allowance of L & R's motion for new trial was error. [Note 11]

Discussion. "The decision to grant or deny a motion for a new trial rests in the discretion of the trial judge, and an appellate court will not vacate such an order unless the judge has abused that discretion." W. Oliver Tripp Co. v. American Hoechst Corp.

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34 Mass. App. Ct. 744, 748 (1993). A judge acts within his discretionary authority in granting a new trial when he does so upon a "proper determination that his instructions to the jury were prejudicially incorrect." Galvin v. Welsh Mfg. Co., 382 Mass. 340, 343 (1981). It is "sufficient to justify a trial judge's determination to grant a new trial for defects in his jury instructions, if an appellate court would have reversed the judgment had those instructions been properly challenged on appeal." Id. at 345. Our inquiry, accordingly, is whether the original instructions were erroneous as a matter of law and, if so, whether the result in the first trial might have been different absent the error. Masingill v. EMC Corp., 449 Mass. 532, 540 n.20 (2007).

As a general principle, the owner of a vehicle owes a duty to exercise reasonable care to keep the vehicle in safe mechanical condition. Facteau v. Gould, 310 Mass. 105, 106-107 (1941). Pellegatti v. Pellegatti, 345 Mass. 591, 593-594 (1963). Carney v. Bereault, 348 Mass. 502, 505 (1965). However, where (as here) the owner has leased the vehicle to another under a long-term lease, we think the owner's obligations are controlled by the common law of bailment to the extent they are not otherwise governed by the terms of the lease or by statute. [Note 12] See Remy v. MacDonald, 440 Mass. 675, 677 (2004) ("Whether a duty exists is a question of common law, to be determined by reference to existing social values and customs and appropriate social policy" [quotation and citation omitted]). "A bailment is established by 'delivery of personalty for some particular purpose, or on mere deposit, upon a contract, express or implied, that after the purpose has been fulfilled it shall be redelivered to the person who delivered it, or otherwise dealt with according to his directions, or kept until he reclaims it, as the case may be.' " King v. Trustees of Boston Univ., 420 Mass. 52, 59 (1995), quoting 9 S. Williston, Contracts § 1030 (3d ed. 1967).

At common law, a bailor's only duties are to deliver nondefective chattels, see Mitchell v. Lonergan, 285 Mass. 266, 269 (1934), and to deliver them to bailees capable of using them safely. [Note 13] Leone v. Doran, 363 Mass. 1, 11, 13 n.3, vacated in

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part, 363 Mass. 886 (1973), and S.C., 369 Mass. 956 (1975). Upon delivery of the bailed property, the bailor relinquishes possession and control to the bailee, together with responsibility for the property's continuing safety. Absent contract, statute, or an agency relationship, a bailor of property is not liable to third persons injured as a result of a bailee's negligent use or operation of the bailed property. See Strogoff v. Motor Sales Co., 302 Mass. 345, 347 (1939); Rich v. Finley, 325 Mass. 99, 107 (1949). A bailor has no common-law duty to inspect or repair bailed property, nor is a bailor liable for injuries resulting from a defect arising after the property's delivery to the bailee. See Corlett v. Hi Lo Corp., 350 Mass. 769, 769 (1966). See also Standard Oil Co. v. Foster, 280 F.2d 912, 914-915 (5th Cir. 1960); Rigby v. Suburban Rendco, Inc., 548 F. Supp. 202, 206 (D. Del. 1982); 8A Am. Jur. 2d Bailments § 180 (2009). However, if a bailor agrees to retain control over the bailed property, such as by an agreement to repair, maintain, or inspect, he or she may on that basis be held liable for later-arising defects. Standard Oil Co., supra at 914. Rigby, supra at 206. See 8A Am. Jur. 2d Bailments § 180.

Applying these principles to the case at hand, we conclude -- as did the judge below -- that L & R had no general common-law duty to assure the safety of the vehicle leased to Tropeano and that, accordingly, the jury were incorrectly instructed regarding such a duty during the first trial. The motor vehicle annual inspection laws, G. L. c. 90, § 7A, and 540 Code Mass. Regs. § 4.03, imposed only limited duties on L & R as the owner of the vehicle, [Note 14] and L & R assumed no duty of maintenance or care under the lease. The lease did give L & R the right to

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inspect the vehicle upon request, see note 6, supra. But that provision was designed to preserve the value and utility of the vehicle; it did not create an affirmative obligation on L & R to inspect or maintain the vehicle.

We also conclude that the erroneous instruction prejudiced L & R such that the judge did not abuse his discretion in deciding that a new trial was warranted. See Dartt v. Browning-Ferris Indus., Inc. (Mass.), 427 Mass. 1, 14 (1998). Under the broad duty of care given in the original instructions, the jury could have found L & R negligent for failing to discover the brake fluid leak or for failing to itself repair the brakes, even though the car was in good working order when it left L & R's possession and was delivered to Tropeano. Such a result would be inconsistent with L & R's limited duties as bailor. [Note 15]

For the reasons set out above, the order allowing L & R's motion for a new trial is affirmed. The judgment entered in the second trial is affirmed.

So ordered.