Opinion
20024/2015E
08-11-2021
Sheba Shajahan HUSSAIN, Plaintiff, v. Obadah M. ABUAWWAD et al., Defendants.
Counsel for Defendant/movant Benzel Busch Motor Car Corp: Cerussi & Spring, (Christopher B. Roberta, Esq.) Counsel for plaintiff Sheba Shajahan-Hussain: Buttafuoco & Associates, PLLC (Ellen Buchholz, Esq.) Counsel for co-defendants Obadah M. Abuawwad and Abdallah M. Abuawwad: DeCicco, Gibbons & McNamara, P.C. (No papers submitted on the motion) Counsel for co-defendant Richard K. Soriano: Lowe and Reilly (No papers submitted on the motion).
Counsel for Defendant/movant Benzel Busch Motor Car Corp: Cerussi & Spring, (Christopher B. Roberta, Esq.)
Counsel for plaintiff Sheba Shajahan-Hussain: Buttafuoco & Associates, PLLC (Ellen Buchholz, Esq.)
Counsel for co-defendants Obadah M. Abuawwad and Abdallah M. Abuawwad: DeCicco, Gibbons & McNamara, P.C. (No papers submitted on the motion)
Counsel for co-defendant Richard K. Soriano: Lowe and Reilly (No papers submitted on the motion).
Mary Ann Brigantti, J.
The following papers numbered 1 to 5 were read on this motion (Seq. No. 5) for SUMMARY JUDGMENT (DEFENDANT) noticed on October 21, 2020 .
Notice of Motion - Order to Show Cause - Exhibits and Affidavits Annexed No(s). 1, 2
Answering Affidavit and Exhibits No(s). 3,4
Replying Affidavit and Exhibits No(s). 5
Upon the foregoing papers, the defendant Benzel Busch Motor Car Corp. ("Benzel") moves for summary judgment, dismissing the complaint of the plaintiff Sheba Shajahan Hussain ("Plaintiff") and any cross-claims and counterclaims on the grounds that such claims are barred by the Federal Transportation Equity Act of 2005, or the "Graves Amendment," 49 U.S.C. § 30106. Plaintiff opposes the motion.
Standard of Review
To be entitled to the "drastic" remedy of summary judgment, the moving party "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact from the case." ( Winegrad v. New York University Medical Center , 64 NY2d 851 [1985] ; Sillman v. Twentieth Century-Fox Film Corp. , 3 NY2d 395 [1957] ). The failure to make such prima facie showing requires denial of the motion, regardless of the sufficiency of any opposing papers. (Id. , see also Alvarez v. Prospect Hosp. , 68 NY2d 320, 324 [1986] ). Facts must be viewed in the light most favorable to the non-moving party ( Sosa v. 46th Street Development LLC. , 101 AD3d 490 [1st Dept. 2012] ). Once a movant meets his initial burden, the burden shifts to the opponent, who must then produce sufficient evidence, also in admissible form, to establish the existence of a triable issue of fact ( Zuckerman v. City of New York , 49 NY2d 557 [1980] ). When deciding a summary judgment motion the role of the Court is to make determinations as to the existence of bonafide issues of fact and not to delve into or resolve issues of credibility ( Vega v. Restani Constr. Corp. , 18 NY3d 499 [2012] ).
Applicable Law and Analysis
This matter arises out of an alleged three-vehicle accident. At the time of the accident, defendant Richard K. Soriano ("Soriano") was operating a Mercedes-Benz vehicle owned by Benzel. Benzel contends that it is entitled to summary judgment because, as they are a dealership engaged in a business of renting or leasing motor vehicles, and at the time of this incident, their vehicle had been rented by Soriano at the time of the accident. Benzel further asserts that in this case there is no evidence of any negligent maintenance or independent negligence on their part.
In opposition, Plaintiff initially contends that the motion should be denied because Benzel waived any affirmative defense predicated upon the "Graves Amendment" by failing to plead it in their answer. However, "[t]here is no prohibition against moving for summary judgment based on an unpleaded defense where the opposing party is not taken by surprise and does not suffer prejudice as a result" ( Arteaga v. City of New York , 101 AD3d 454 [1st Dept. 2012] ; Matthew Adam Properties, Inc. v. The United House of Prayer for All People of the Church on the Rock of the Apostolic Faith , 126 AD3d 599 [1st Dept. 2015] ). "A party suffers prejudice where he or she ‘has been hindered in the preparation of his [or her] case or has been prevented from taking some measure in support of his [or her] position’ " ( Scholastic Inc. v. Pace Plumbing Corp. , 129 AD3d 75, 80 [1st Dept. 2015] [internal citations omitted]).
In this case, Plaintiff asserts that since Benzel failed to plead the Graves Amendment, Plaintiff was foreclosed from discovery on the issue. However, as noted in reply, prior counsel for Benzel served documentation related to this "vehicle rental" prior to the filing of the note of issue, thus Plaintiff cannot claim to be surprised by the assertion of a defense predicated on the Graves Amendment (see, e.g., BMX Worldwide v. Coppola N.Y.C. , 287 AD2d 383, 384 [1st Dept. 2001] ). The motion did not raise any new issues of fact—e.g., the relationship between Benzel and the subject vehicle—thus further defeating any claim of surprise or prejudice (see McSorley v. Philip Morris Inc. , 170 AD2d 440 [2d Dept. 1991], appeal dismissed , 77 NY2d 990 [1991] ). Furthermore, Plaintiff here had a full and fair opportunity to argue the merits of the Graves Amendment defense in opposing this motion (see Kirlescu v. American Home Products Corp. , 278 AD2d 457, 458 [2d Dept. 2000], lv. denied , 96 NY2d 933 [2001] ). The motion is therefore addressed on its merits.
The "Graves Amendment," 49 U.S.C.A. § 30106, states in pertinent part:
(a) An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), 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—
(1) the owner (or an affiliate of the owner) is engaged in the trade or business of renting or leasing motor vehicles; and
(2) there is no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner) (emphasis added).
In this case, Benzel produced sufficient evidence establishing that it owned the vehicle operated by Soriano, and at the time of this accident, Benzel was engaged in the trade or business of renting or leasing motor vehicles. Benzel further established through testimonial and documentary evidence that no negligence or criminal wrongdoing on their part caused this accident. The critical inquiry, however, is whether Benzel "rented" or "leased" the subject vehicle to Soriano.
It is not disputed that the Benzel vehicle was a "loaner"—insofar as it was given to Soriano to drive while his personal vehicle was being serviced by Benzel. The First Department has implied that the Graves Amendment does not protect the owner a "loaner" vehicle from vicarious liability. In this regard, the First Department distinguished between "rental companies" which are clearly protected by the Graves Amendment, and other entities not protected by the Graves Amendment—the latter category including repair shop owners that provide "loaner" vehicles, and car dealerships that provide test drives. While the First Department addressed only repair shop "loaners" and did not directly address car dealerships that provide "loaner" vehicles (as opposed to test drives), the distinction between true rentals and other uses is significant:
"Plaintiff's vicarious liability claims against respondent are barred by 49 USC § 30106, the ‘Graves Amendment.’ We reject plaintiff's argument that the Graves Amendment violates the Commerce Clause of the US Constitution ( Graham v Dunkley , 50 AD3d 55, 852 NYS2d 169 [2d Dept 2008], appeal dismissed 10 NY3d 835, 859 NYS2d 607, 889 N.E.2d 484, 2008 NY Slip Op 70255 [2008] [no substantial constitutional question involved], revg 13 Misc 3d 790, 827 NYS2d 513 [2006] ; see also Hernandez v Sanchez , 40 AD3d 446, 447, 836 NYS2d 577 [1st Dept 2007] ). We also reject plaintiff's argument that the Graves Amendment violates equal protection by favoring car rental companies over other vehicle owners, such as taxi owners, repair shop owners who provide loaner vehicles to customers, and car dealerships that allow test drives, who also allow others to operate their vehicles. The renting of vehicles has a clear substantial effect on interstate commerce ( Graham , 50 AD3d at 61-62 ), unlike these other activities, and the same rational basis for regulating the renting of vehicles under the Commerce Clause even in purely intrastate instances—that elimination of vicarious liability will result in a reduction of insurance costs that will in turn result in a reduction of consumer prices and allow more lessors to remain in business (see id. at 61 )—supports the classification for purposes of equal protection. We have considered and rejected plaintiff's other arguments." ( Hall v. Elrac, Inc. , 52 AD3d 262, 262-263 [1st Dept. 2008] ).
Lower courts have generally held that the Graves Amendment does not insulate the owner from vicarious liability where the vehicle involved was a "loaner" vehicle (see Zizersky v. Life Quality Motor Sales, Inc. , 21 Misc 3d 871 [Sup. Ct., Kings Cty., 2008] ; see also Murphy v. Pontillo , 12 Misc 3d 1146 [Sup. Ct., Nassau Cty., 2006] ). Citing to the First Department's reasoning in Hall , the Court in Zizersky noted that there was no suggestion that a "loaner" vehicle, "even if connected to the purchase or lease of another vehicle, has any effect whatsoever on the market for leased or rented vehicles, or, in particular, contributes in any way to the problems Congress attempted to address with the Graves Amendment" ( Zizersky , 21 Misc 3d at 880 ). The parties here appear to agree that the Graves Amendment would be inapplicable to an owner where the vehicle was a "loaner" courtesy vehicle issued by a dealership. Benzel, however, contends that this matter is distinguishable because Soriano was assessed a fee for using the "loaner" vehicle, thus essentially converting the use of the vehicle from a mere "borrowing" or "loaning" to a rental or lease.
"Lease" is defined as "[t]o grant the possession and use of (land, buildings, rooms, moveable property, etc.) to another in return for rent or other consideration" (Lease, Black's Law Dictionary (11th ed. 2019). "Rent" is defined as "[c]onsideration paid, usu. periodically, for the use or occupancy of property (esp. real property)." To find an enforceable lease agreement, said agreement must include essential terms such as the price to be paid or consideration remitted for use of the property (see Matter of Davis v. Dinkins , 206 AD2d 365, 367 [2d Dept. 1994] ; see also Bernstein v. 1995 Associates , 185 AD2d 160, 162 [1st Dept. 1992] ). Missing terms of a contract may still bind the parties where there exists and objective method for supplying the missing term (see 166 Mamaroneck Ave. Corp. v. 151 East Post Road Corp. , 78 NY2d 88, 92 [1991] ).
In this case, after close review of the submissions, the Court finds that Benzel has failed to eliminate fact issues as to whether Soriano was in fact assessed a rental fee in exchange for his use of the loaner vehicle, and thus Benzel failed to carry its initial summary judgment burden. Benzel supports its motion with, among other things, two documents entitled "loaner agreement." One of them (Benzel's Exhibit "H") is entitled "Loaner Agreement." There is no indication on this document that any "rental rates" charges were assessed for use of the subject vehicle. The only charge listed is a "surcharge" of $15.00 with no description of what the charge is for. Another document (Benzel's Exhibit "I"), also entitled "Loaner Agreement," similarly contains no "rental rates" charges, but it contains a "surcharge" of $110.00, again with no accompanying description. The second page of the Loaner Agreement entitled "Benzel-Busch Motor Car Keypoints" as identified by Soriano and Benzel's witness Christopher Iseman, indicates that customers would be charged a $500 hold on their credit card, and they would be charged a $55.00 daily fee for failing to return the vehicle as required when repairs to the customer's car were completed. However, Benzel produced no evidence that Soriano was actually assessed such a daily fee for failing to return to vehicle as required, or that the surcharges appearing on the loaner agreement was meant to be a "rental" fee for use of the vehicle, and not some other sort of fee. Soriano did not testify that he was ever charged a fee for using the Benzel vehicle. In fact, he testified that he did not pay any money to the dealer to get the loaner car (Soriano EBT at 58-59). Benzel's own witness Iseman did not testify that Soriano was assessed a daily rental fee for failing to return the vehicle in a timely manner.
On this motion record, this Court cannot assume that the "surcharge" fees listed on the loaner agreements constitute rental fees assessed in exchange for use of the vehicle—or in other words, constituted consideration remitted in exchange for use of the vehicle—so as to constitute the type of lease agreement or rental agreement that is subject to the Graves Amendment (see Murphy , 12 Misc 3d 1146 ). Morever as noted above there is no testimony that Soriano actually remitted any sort of payment whatsoever for use of the vehicle. Benzel thus failed to carry their initial summary judgment burden.
Accordingly, it is hereby
ORDERED, that Benzel's motion for summary judgment is denied.
This constitutes the Decision and Order of this Court.