Opinion
01 Civ. 2951 JSM)
July 17, 2002
Stephen D. Chakwin, Jr., White Plains, NY., Attorney for Plaintiff.
Yolanda L. Himmelberger, Morris, Duffy, Alonso Faley, LLP, New York, NY., Attorney for Defendant.
OPINION AND ORDER
Following an automobile accident in New Mexico, Plaintiff Monica Gopysingh commenced this action in state court against Hector Santiago and Budget Rent-A-Car pursuant to the New York State Comprehensive Motor Vehicle Insurance Reparations Act. The case was thereafter removed to this Court. Plaintiff has made a claim for damages in the sum of twenty five million dollars, as well as for costs and disbursements. Defendant Budget Rent-A-Car now moves for summary judgment and seeks dismissal of the Complaint.
Facts
On March 7, 1998, Plaintiff Monica Gopysingh was riding in a car owned and driven by her daughter, Ceta Gopysingh. While traveling on a highway in New Mexico, the vehicle was struck from behind by a truck and Plaintiff sustained injuries. The truck was operated by Hector Santiago and owned by Budget Rent-A-Car.
According to the Amended Complaint, Plaintiff was a New York domiciliary at the time of the accident. Hector Santiago was a New York domiciliary at that time as well. Budget Rent-A-Car is a Delaware corporation with its principal place of business in Illinois. Budget Rent-A-Car does, however, have a presence in New York and in New Jersey. The Budget Rent-A-Car truck was registered in Oklahoma at the time of the accident, and was rented by Hector Santiago from a branch in New Jersey.
Defendant points out that after the accident, Plaintiff provided a New Jersey address to the police and to physicians. Even if Plaintiff was a New Jersey resident at the time of the accident, the result in this case would be no different because New Jersey law mirrors New Mexico law with respect to the vicarious liability of vehicle owners. See Heisler v. Toyota Motor Credit Corp., 884 F. Supp. 128, 129-30 (S.D.N.Y. 1995).
Discussion
A party is entitled to summary judgment as a matter of law when the evidence demonstrates that there is no genuine issue as to any material fact. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). "`Only when no reasonable trier of fact could find in favor of the nonmoving party should summary judgment be granted.'" White v. ABCO Eng'g Corp., 221 F.3d 293, 300 (2d Cir. 2000) (quoting Taggart v. Time Inc., 924 F.2d 43, 46 (2d Cir. 1991); Howley v. Town of Stratford, 217 F.3d 141, 150-51 (2d Cir. 2000) ("[T]he court is required to resolve all ambiguities, and to credit all factual inferences that could rationally be drawn, in favor of the party against whom summary judgment is sought.").
As Plaintiff has withdrawn the negligent maintenance claim against Defendant Budget Rent-A-Car, the only substantive issue is whether Defendant Budget Rent-A-Car is subject to vicarious liability. On this point, the parties are in dispute over what law must be applied. Plaintiff argues that New York law applies and Defendant advocates for New Mexico law.
The first issue is whether an actual conflict exists between the laws of the different jurisdictions. If there is no conflict between the legal principles of the various jurisdictions, then the Court need not engage in a choice of law analysis. Matter of Allstate Ins. Co. [Stolarz-N.J. Mfrs. Ins. Co.], 81 N.Y.2d 219, 223 (1993); Portanova v. Trump Taj Mahal Associates, 704 N.Y.S.2d 380, 383 (3rd Dep't 2000). The relevant jurisdictions are New York (Plaintiff's domicile), New Mexico (the situs of the accident), and Illinois (Budget Rent-A-Car's domicile). See People by Vacco v. Alamo Rent A Car, Inc., 89 N.Y.2d 560, 563 (1997) ("[T]he domicile of a corporation for choice-of-law purposes is the state where it maintains its principal place of business."). With respect to Budget Rent-A-Car's liability, New York Vehicle and Traffic Law § 388 provides for vicarious liability of vehicle owners for the negligence of drivers who operate the vehicles with the owner's permission, even if the accident occurs outside of New York. See Farber v. Smolack, 20 N.Y.2d 198, 203-04 (1967). In Illinois, however, vicarious liability is not imposed on vehicle owners unless there is an agency relationship or negligent entrustment. See Coats v. Hertz Corp., 296 Ill. App.3d 697, 699 (Ill.App.Ct. 1998). Similarly, in New Mexico, absent a statute, an owner of a vehicle is not liable for the negligence of the person using the vehicle with the owner's permission, although liability can rest on theories of agency and negligent entrustment. See Maya v. General Motors Corp., 953 F. Supp. 1245, 1248 (D. N.M. 1996); Spencer v. Gamboa, 699 P.2d 623, 624-25 (N.M.Ct.App. 1985); Bryant v. Gilmer, 639 P.2d 1212, 1214 (N.M.Ct.App. 1982). Here, there is a clear conflict between the law of New York and that of the other two jurisdictions. Accordingly, if New Mexico or Illinois law applies, then Defendant Budget Rent-A-Car cannot be found liable and must prevail as a matter of law.
In this diversity action, the Court follows the choice of law rules of the forum state. With torts, New York courts employ an interest analysis to determine the applicable law. When dealing with loss allocating rules in the tort context, New York courts follow the three part test adopted by the Court of Appeals in Neumeier v. Kuehner, 31 N.Y.2d 121 (1972). Under the first Neumeier rule, if the parties are domiciled in the same state, the law of that state controls. If the tort takes place in the state where one party is domiciled and the law of that state favors the domiciliary, the second Neumeier rule mandates the application of the law of the situs of the tort. In other situations, when the parties are domiciled in different states with conflicting laws, the third Neumeier rule states that "[t]he law to be applied is that of the jurisdiction where the accident happened unless it appears that `displacing [the] normally applicable rule will advance the relevant substantive law purposes' of the jurisdictions involved." Id. at 128 (citations omitted).
Plaintiff argues that the first Neumeier rule applies because Plaintiff is a New York resident, Defendant Santiago is a New York resident, and Defendant Budget Rent-A-Car has a business presence in New York. Defendant Santiago has not been served with the Complaint or Defendant Budget's counterclaims and thus is not a party in interest. His connections to New York are therefore irrelevant to the choice of law analysis. See Aboud v. Budget Rent A Car Corp., 29 F. Supp.2d 178 (S.D.N.Y. 1998). Furthermore, while Plaintiff is correct in stating that Budget Rent-A-Car does business in New York, see People by Vacco v. Alamo Rent A Car, Inc., 89 N.Y.2d 560, 563 (1997), as noted above, "the domicile of a corporation for choice-of-law purposes is the state where it maintains its principal place of business." Dorsey v. Yantambwe, 715 N.Y.S.2d 566, 570 (4th Dep't 2000). Accordingly, with Defendant Budget Rent-A-Car domiciled in Illinois and Plaintiff domiciled in New York, the first Neumeier rule is inapplicable.
Both parties agree that the third Neumeier rule applies. The parties are domiciled in different jurisdictions (Illinois and New York), and the laws of these jurisdictions differ. Given the conflict, the Court should apply the law of New Mexico, the situs of the accident. See Neumeier, 31 N.Y.2d at 128. Plaintiff, however, argues that New York law should still control because this is a case in which "displacing [the] normally applicable rule will advance the relevant substantive law purposes" of the jurisdictions involved. Id. at 129 (citations omitted). Plaintiff claims that while the public policy of New Mexico will not be affronted by the application of New York law, the New York law was written for the specific purpose of "provid[ing] a means for those injured through the negligence of others to recover from the tort-feasors and those who have been made legally responsible for their actions." (Pl.'s Opp. Mem. at 8).
First, there is a question of whether § 388 of Vehicle and Traffic Law even applies to this case. While this statute has been used to impose vicarious liability on automobile owners where the accident happens outside of New York, see Aboud, 29 F. Supp.2d at 181 (discussing cases), such liability has only been established where the vehicle has previously been "used or operated" in New York, see New York Vehicle and Traffic Law § 388; Fried v. Seippel, 80 N.Y.2d 32, 39-40 (1992). Here, the rental vehicle was registered in Oklahoma and was rented from a Budget Rent-A-Car office in New Jersey. There is no evidence from which an inference can be drawn that the truck had a connection to New York. See Aboud, 29 F. Supp.2d at 182.
For the same reasons, there is no substantive legal purpose that will be advanced by displacing the law of New Mexico with that of New York. As stated by the Fourth Circuit in a case involving New York choice-of-law rules and Vehicle and Traffic Law § 388:
New York has an interest in providing additional security for the protection of innocent victims, whether or not residents of New York, of vehicular accidents. To the extent that it does so by creating statutory vicarious liability upon innocent owners and by requiring liability insurance covering the possible statutory liability, it may do so only if the owner or the vehicle has such a connection with New York as to warrant New York's exercise of its legislative powers. It has little or no legitimate interest in providing additional security for the protection of innocent New York residents who are injured in other states while riding in vehicles having no connection with New York. . . . So far as appears, the vehicle had never been in New York State, and there is no indication that its owner had any intention that it be driven into that state. In such circumstances, though the injured plaintiff was a resident of New York, New York has little interest in regulating the rights and liabilities arising out of [an non-New York] lease.
Klippel v. U-Haul Co. of Northeastern Michigan, 759 F.2d 1176, 1182 (4th Cir 1985).
New Mexico, on the other hand, does have "a very substantial interest in seeing that the victims of automobile accidents occurring in that state are treated fairly and uniformly and that some of those victims not be granted extraordinary rights and preferences solely because of the victim's residence in New York." Id. . See also Aboud, 29 F. Supp.2d at 182-84. Accordingly, under the third Neumeier rule, the law of New Mexico would apply.
Conclusion
Because Defendant Budget Rent-A-Car cannot be held vicariously liable under the law of New Mexico, Defendant Budget Rent-A-Car's motion for summary judgment is granted and Plaintiff's Complaint is dismissed.