Opinion
38515/06.
Decided May 29, 2008.
Plaintiff was represented by Andrew Wiese, Esq. of Sacco Fillas, LLP.
Defendant Elrac Incorporated was represented by Jacob J. Wisniewski, Esq. of Peknic, Peknic Schaefer, LLC.
Defendant Justin J. Cupid was represented by Marjorie Zavath, Esq. of the Law Offices of Robert P. Tusa.
The pending motions raise questions as to the evidentiary burden of a defendant seeking dismissal pursuant to CPLR 3211 (a) (7) by reason of the Graves Amendment; and as to the evidentiary burden of a plaintiff seeking leave to amend the complaint pursuant to CPLR 3025 (b) in order to avoid dismissal on that ground.
Plaintiff's Verified Complaint alleges that she sustained serious personal injuries as a result of a collision on April 29, 2006 between her vehicle and a vehicle owned by defendant Elrac, Incorporated and operated by defendant Justin J. Cupid. (Verified Complaint, ¶¶ 13,14, 21, 25 and 28.) She alleges further that Cupid was an employee of Elrac, and was operating the Elrac vehicle "under the course of his employment," and "with the express knowledge, consent and/or on the business" of Elrac. ( Id. at ¶¶ 22-24.) The collision was allegedly caused by "the defendants' negligence, carelessness and recklessness" ( id. at 26), but the Verified Complaint provides no particulars.
In a Verified Bill of Particulars, however, served in response to Elrac's demand, Plaintiff alleges negligence in the operation of the vehicle by Cupid; and that Elrac "carelessly and negligently permitt[ed] [its] automobiles to be, become and remain in an unsafe, dangerous and dilapidated condition in so far as to [ sic] the mechanism of the various parts thereof was concerned"; and that Elrac "failed to maintain said vehicle in a proper, reasonable and safe condition." (Verified Bill of Particulars, ¶ 9.)
A Preliminary Conference Order dated June 29, 2007 required the examination before trial of all parties on August 15, 2007. Plaintiff was deposed on February 13, 2008; Cupid failed to appear for a deposition scheduled for March 24, 2008; Elrac has not yet produced a witness for deposition. (Affirmation in Support of Cross-Motion and in Opposition to Motion to Dismiss, ¶¶ 5-8.) Although Elrac maintains that "Plaintiff has made no demand for a representative from ELRAC, INC. to be deposed" (Affirmation in Opposition and Affirmation in Reply, ¶ 5), the Preliminary Conference Order does not require a demand. The Court notes, however, that "[s]ervice of a motion under rule 3211, 3212, or section 3213 stays disclosure until determination of the motion unless the court orders otherwise" (CPLR 3214 [a].) Elrac served its motion to dismiss on November 26, 2007.
A Federal statue, known as the Graves Amendment and codified at 49 USC § 30106, "bars vicarious liability actions against professional lessors and renters of vehicles," as would otherwise be permitted by Vehicle and Traffic Law § 388. ( See Graham v Dunkley , 50 AD3d 55 , 57 [2d Dept 2008].) The statute has been upheld as "a constitutional exercise of Congressional power pursuant to the Commerce Clause of the United States Constitution." ( Id. at 58.) "[V]icarious liability laws caused lessors to either cease leasing cars in states having them, opting for more expensive balloon note structures, or spread the cost of higher insurance premiums to lease customers nationwide." ( Id. at 61.)
Specifically, the Graves Amendment provides that "[a]n owner of a motor vehicle that rents or leases the vehicle to a person . . . shall not be liable under the law of any State . . ., by reason of being the owner of the vehicle . . ., for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if . . . the owner . . . is engaged in the trade or business of renting or leasing motor vehicles; and . . . there is no negligence or criminal wrongdoing on the part of the owner." (42 USC § 30106 [a].)
In order to claim immunity to vicarious liability under the Graves Amendment, the owner of the subject vehicle must be "engaged in the trade or business of renting or leasing motor vehicles"; the subject vehicle must have been "rent[ed] or lease[d] . . . to a person"; and "harm to persons or property" must have occurred "during the period of the rental or lease." ( See id.) If these conditions are met, the statutory immunity attaches unless there is "negligence or criminal wrongdoing on the part of the owner." ( See id.) On the other hand, vicarious liability is not abrogated where injury or damage results from the negligence of the owner's employee in the operation or maintenance of the vehicle, nor it seems where the owner was negligent in entrusting the vehicle to the operator ( see Murphy v Pontillo , 12 Misc 3d 1146 [A], 2006 NY Slip Op 26289 [U], * 2 [Sup Ct Nassau County]; see also Vedder v Enterprise Rent-A-Car, 18 Misc 3d 1142 [A], 2008 NY Slip Op 50408 [U], * 6 [Sup Ct Nassau County].)
New York courts have shown willingness to give determinative effect to the Graves Amendment on motions by defendants to dismiss pursuant to CPLR 3211 (a) (7) for "fail[ure] to state a cause of action" ( see Johnson v King, 48 AD3d 637 [2d Dept 2008]; Jones v Bill , 34 AD3d 741 [2d Dept 2006], lv granted 9 NY3d 954; see also Graham v Dunkley , 50 AD3d 55 ); and on motions by plaintiffs pursuant to CPLR 3025 (b) for leave to amend the pleadings to name additional parties ( see Rawlings v National Car Rental System, Inc. , 48 AD3d 389 [2d Dept 2008]; Kuryla v Halabi , 39 AD3d 485 [2d Dept 2007].) It is important to note, however, that the statute provides immunity only from liability and not from suit, and, although courts should be sensitive to the legislative purpose, as they should always be when called upon to give effect to a Federal or State statute, there is nothing in the Graves Amendment that abrogates any state procedural or evidentiary rule. Indeed, that sensitivity must extend to Vehicle and Traffic Law § 388; the legislative policy of this State can be ignored only to the extent Federal law requires.
"On a CPLR 3211 motion to dismiss, the court will accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory'." ( Nonnon v City of New York , 9 NY3d 825 , 827 [ quoting Leon v Martinez, 84 NY2d 83, 87-88 (1994)].) "While affidavits may be considered, if the motion has not been converted to a 3212 motion for summary judgment, they are generally intended to remedy pleading defects and not to offer evidentiary support for properly pleaded claims." ( Id.) Where the defendant submits evidentiary material on a motion to dismiss, "it may be considered in assessing the viability of a complaint, although the complaint should not be dismissed unless the defendant demonstrates that a material fact alleged by the plaintiff is not a fact at all' and that no significant dispute exists regarding it'." ( Pechko v Gendelman , 20 AD3d 404 , 406-07 [2d Dept 2005] [ quoting Guggenheimer v Ginzburg, 43 NY2d 268, 275 (1977)].)
Defendant here supports its motion with an affirmation of counsel, to which are attached a document that counsel characterizes as a "rental agreement" and an Affidavit of Non-Agency, five sentences in total and signed by Defendant's "Loss Control Manager." The Affidavit was executed and notarized in New Jersey, and is neither acknowledged nor accompanied by a certificate of conformity. ( See CPLR 2309 [c].) Although Plaintiff states that the Affidavit is "inadmissible," she specifies neither this nor any other deficiency, other than that it is "self serving" (Affirmation in Support of Cross-Motion and in Opposition to Motion to Dismiss, ¶ 66), which, of course, one would expect it to be.
Plaintiff also objects to consideration of the purported "rental agreement," properly noting that "it has not been in any way authenticated" (Reply Affirmation to Opposition,¶ 6.) "[A] requirement of evidence of authenticity, or, as sometimes termed, genuineness, applies to all writings whose relevancy depends upon authorship by a particular person." (Prince, Richardson on Evidence § 9-101 [Farrell 11th Ed]; see also NYCTL 1998-2 Trust v Santiago , 30 AD3d 572 , 573 [2d Dept 2006]; People v Butler , 2 AD3d 1457 , 1458 [4th Dept 2003].) The authentication requirement applies on this motion. ( See Citibank [ S.D.] N.A. v Roberts, 304 AD2d 901, 901-02 [2d Dept 2003]; First Interstate Credit Alliance, Inc. v Sokol, 179 AD2d 583, 584 [1st Dept 1992].)
To the extent, moreover, that the "rental agreement" is offered as evidence of facts stated therein, it is inadmissible hearsay, unless shown to be subject to some exception, such as the business records exception ( see CPLR 4518 [a]; People v Kennedy, 68 NY2d 569, 579-80.) The foundation requirements for the admissibility of a document as a "business record" apply on this motion ( see Whitfield v City of New York , 48 AD3d 798 , 799 [2d Dept 2008]; Contreras v Klein, 17 AD3d 396, 396 [2d Dept 2005]), and "must be provided by someone with personal knowledge of the maker's business practices and procedures" ( see W. Valley Fire Dist. No. 1 v Vill. of Springfield, 294 AD2d 949, 950 [4th Dept 2002]; see also Dayanim v Unis, 171 AD2d 579, 580 [1st Dept 1991].)
An affirmation of counsel who demonstrates no personal knowledge of the facts asserted "is without evidentiary value and thus unavailing." ( See Zuckerman v City of New York, 49 NY2d 557, 563; see also Jefferson v Vill. of Ossining , 18 AD3d 502, 502 [2d Dept 2005].) Defendant's Loss Control Manager might be competent to provide the foundation for admissibility of the "rental agreement," but the Affidavit makes no reference to the document.
The Affidavit of Non-Agency asserts that "ELRAC, INC. d/b/a Enterprise Rent-A-Car is engaged in the business of renting motor vehicles" (¶ 4), and is sufficient, together with judicial notice of Defendant's extensive advertising and promotion, to establish prima facie that Defendant meets that requirement for coverage under the Graves Amendment ( see 42 USC § 30106 [a].) The Affidavit is insufficient, however, to establish even prima facie that the subject vehicle was "rent[ed] or lease[d] . . . to a person," and that the collision occurred "during the period of the rental or lease." ( See id.)
The Loss Control Manager asserts only that she is "fully familiar with the personnel and records of" Defendant, and that "[b]ased upon [her] knowledge and review of this matter, the Renter [ sic] of our vehicle, Justin Cupid, was not an . . . employee . . . at the time of the subject accident." (Affidavit of No Agency, ¶¶ 2-3.) The assertion that Cupid was a "Renter" of the subject vehicle must be based upon some writing or record, but it is neither provided with the affidavit nor described or identified; and the assertion that Cupid was not an employee of Defendant must be based upon a search of records that did not reveal his name, but no description of the records or the search is provided. ( See Whitfield v City of New York, 16 Misc 3d 1115 [A], 2007 NY Slip Op 51433 [U], * 4-* 7 [Sup Ct Kings County], aff'd 48 AD3d 798 [2d Dept 2008].)
Since Defendant has not established prima facie that the subject vehicle was in Cupid's possession pursuant to a rental or lease agreement when it allegedly collided with Plaintiff's vehicle, the Court need not decide whether Defendant was required to also establish prima facie that it failed to properly maintain the vehicle, as Plaintiff alleges. The Graves Amendment confers immunity on a rental/leasing owner "if . . . there is no negligence or criminal wrongdoing on the part of the owner." ( See 42 USC § 30106 [a].) The word "if" is conditional, and generally one claiming a benefit must show that any condition to the benefit has been satisfied. Here, however, the condition is a negative, "no negligence or criminal wrongdoing," and it does not seem practicable to require an owner to establish freedom from all fault, at least in the absence of particularized negligence or wrongdoing. On the other hand, "[i]t is generally inappropriate to place the burden of proof on a party" — here, the injured plaintiff who is a stranger to the rental/leasing arrangement — "in a case where the facts governing the resolution of the controversy are within the exclusive knowledge of the opposing party." ( See Matter of Johnson v City of New York, 302 AD2d 463, 464 [2d Dept 2003]; see also Reback v Reback , 41 AD3d 814 , 816 [2d Dept 2007]; Matter of Cruz v Westchester County Health Care Corp. , 9 AD3d 460 , 461 [2d Dept 2004].)
It is neither necessary, nor would it be appropriate, to determine on this motion which party is ultimately to bear the burden of production and the burden of persuasion on the negligence/criminal wrongdoing conditions to Graves Amendment protection. Generally on a motion seeking summary dismissal, however, a defendant must establish, at least prima facie, the basis for an affirmative defense ( see CPLR 3018 [b]), or must negate, at least prima facie, an essential element of the plaintiff's cause of action. ( See for example Velasquez v Gomez, 44 AD3d 649, 650-51 [2d Dept 2007]; Castleton v Broadway Mall Properties, Inc. , 41 AD3d 410 , 412 [2d Dept 2007]; DeFalco v BJ's Wholesale Club, Inc. , 38 AD3d 824 , 825 [2d Dept 2007]; Restrepo v Rockland Corp , 38 AD3d 742 , 743 [2d Dept 2007]; Pappalardo v Long Is. R.R., Co. , 36 AD3d 878, 880 [2d Dept 2007].)
Here, Defendant makes no showing that, as a matter of law, a claim for negligent maintenance does not survive the Graves Amendment, and Defendant makes no showing that, as a matter of fact, it properly maintained the subject vehicle. Even if, therefore, Defendant had established prima facie the other elements of Graves Amendment immunity, this Court would have denied its motion to dismiss. The Court refers Defendant to the description of an affidavit of one of its loss control managers that it filed in support of its motion to dismiss in another action, also grounded on the Graves Amendment.
"William Perry, who is employed by ELRAC, Inc. as a loss control manager states, in a supporting affidavit dated December 21, 2007, he searched the loss control file associated with the ELRAC, Inc. rental vehicle New York plate number CRG5777 which had been closed and in storage. Perry states the vehicle in question was a 2004 Nissan Maxima allegedly involved in a December 4, 2003 accident which was rented by the defendant Bryan Cox on November 17, 2003, for a period of 19 days pursuant to a rental agreement. Perry asserts the defendant Bryan Cox was not an employee of ELRAC, Inc. Perry avers, upon searching the file for the vehicle in question, he was able to determine the vehicle had approximately 4,545 miles at the time of the rental. Perry reports a search of the maintenance record of the vehicle revealed the 2004 Nissan Maxima had no maintenance or repairs performed prior to the accident. Perry states the vehicle was not due to have any maintenance performed because the vehicle just entered the fleet, and no maintenance was scheduled to performed [ sic] prior to the accident pursuant to the manufacturer's specifications. Perry states ELRAC, Inc. did view the vehicle between the rentals for any damage or performance problems, and none existed for this vehicle prior to the accident. Perry indicates a further search of the file revealed no complaints were registered by the prior renters regarding any maintenance or performance problems for this vehicle." ( Vedder v Enterprise Rent-A-Car, 2008 NY Slip Op 50408 [U], at * 2.)
Although Plaintiff's Verified Bill of Particulars alleges negligent maintenance, there is no allegation in the Verified Complaint or the Verified Bill of Particulars of negligent entrustment. Indeed, Plaintiff seeks leave to add such allegations with its pending motion.
Finally as to Defendant's motion to dismiss, the Court notes that neither an appropriate representative of Defendant nor the alleged driver Cupid has been examined, nor does it appear that Defendant has produced any documents concerning its relationship with Cupid or the history and condition of the subject vehicle. The Graves Amendment does not require that state courts grant premature dispositive motions. ( See CPLR 3211 [d]; CPLR 3212 [f]; Hall Enterprises, Inc. v Liberty Mgnt. Constr., Ltd. , 37 AD3d 658 , 659 [2d Dept 2007]; Adrianis v Fox , 30 AD3d 550, 550-51 [2d Dept 2006].)
As noted, with her cross-motion Plaintiff seeks leave to amend her Verified Complaint to allege negligent entrustment. Specifically, the proposed Verified Amended Complaint alleges that Defendant "negligently entrusted" the subject vehicle to defendant Cupid when it "knew or should have known that [he] was incompetent, untrained, and not fit to operate the automobile." (Proposed Amended Verified Complaint, ¶ 40.) "In the absence of prejudice or surprise resulting directly from the delay in seeking leave," an application for leave to amend a pleading pursuant to CPLR 3025 (b) is "to be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit." ( See Lucido v Mancuso , 49 AD3d 220 , 221-22 [2d Dept 2008].)
Defendant claims no prejudice or surprise resulting from any delay. Little disclosure appears to have been completed, and it does not appear that Defendant has provided any. Defendant has made no showing that, as a matter of law, a cause of action based upon negligent entrustment is "palpably insufficient or patently devoid of merit" ( see id.)byreason of the Graves Amendment. One trial court has sustained a complaint based upon such a claim ( see Murphy v Pontillo, 12 Misc 3d at 1148), but another has dismissed a complaint notwithstanding such an allegation where the defendant made a showing as to the driving record of the defendant operator of the vehicle, and the defendant operator had been deposed ( see Vedder v Enterprise Rent-A-Car, 2008 NY Slip Op 50408 [U], at * 6.)
Defendant has made no showing that, as a matter of fact, a claim of negligent entrustment is "patently devoid of merit" in this case. Again, it is neither necessary, nor would it be appropriate, for the Court to address the evidentiary burdens with respect to a claim for negligent entrustment in a Graves Amendment case. But where no factual showing is made as to any investigation made on rental of a vehicle, and the operator has not been deposed, there is no substantive basis to deny leave to amend the complaint to include allegations of negligent entrustment.
Defendant Elrac, Incorporated's motion to dismiss is denied.
Plaintiff's cross-motion for leave to serve the Supplemental Summons and Amended Verified Complaint, attached as Exhibit B to the Affirmation in Support of Cross-Motion and in Opposition to Motion to Dismiss, is granted; provided that Plaintiff shall make service in accordance with CPLR 2103 (b), together with Notice of Entry and a copy of this Decision and Order, within 20 days after entry. Defendants shall answer or otherwise respond within 20 days after service.