New York Law Review

Tag: permissive use

  • Country-Wide Ins. Co. v. Nat’l R.R. Passenger Corp., 712 N.E.2d 173 (N.Y. 2006): Statutory Presumption of Permissive Use and Rebuttal

    Country-Wide Ins. Co. v. Nat’l R.R. Passenger Corp., 712 N.E.2d 173 (N.Y. 2006)

    Uncontradicted statements from the owner and driver that the vehicle was operated without permission generally warrant summary judgment for the owner, but not always, and the presence of suspect disavowals or evidence suggesting implausibility, collusion, or implied permission requires the issue of consent to be decided by a jury.

    Summary

    This case addresses the issue of vicarious liability of a vehicle owner under New York Vehicle and Traffic Law § 388 when a driver uses the vehicle without express permission. Amtrak employee Sanchez took an Amtrak truck without permission to retrieve his radio, causing an accident. Amtrak moved for summary judgment, arguing no vicarious liability because Sanchez lacked permission. The Second Circuit certified questions to the New York Court of Appeals regarding the sufficiency of uncontradicted statements and circumstantial evidence to rebut the presumption of permissive use. The Court of Appeals held that while such statements usually warrant summary judgment, a jury must decide if the disavowals are suspect or imply permission. In this specific case, summary judgment for Amtrak was appropriate.

    Facts

    Alex Sanchez, an Amtrak employee, needed his Amtrak-issued radio for his shift. He took an Amtrak pickup truck without permission or advising anyone. While driving back on the Gowanus Expressway, Sanchez struck the plaintiffs’ car. Sanchez did not have a valid driver’s license. Amtrak’s internal investigation charged Sanchez with unauthorized use of the vehicle. Sanchez accepted discipline, including restitution and docked wages, based on charges he took the vehicle without permission.

    Procedural History

    Plaintiffs sued Amtrak in state court; Amtrak removed the case to the United States District Court. The District Court granted Amtrak’s motion for summary judgment, finding the presumption of permissive use rebutted by substantial evidence. The Second Circuit appealed the District Court’s decision and certified five questions to the New York Court of Appeals regarding the interpretation and application of Vehicle and Traffic Law § 388.

    Issue(s)

    Whether uncontradicted statements of both the owner and driver that the driver operated the vehicle without permission, bolstered by additional evidence like accident reports, warrant summary judgment for the owner.

    Holding

    Yes, usually, but not always, because the court must consider the strength and plausibility of the disavowals and whether any doubts necessitate jury consideration. On the specific facts of this case, summary judgment for Amtrak is warranted.

    Court’s Reasoning

    The Court reviewed its prior cases, including St. Andrassy v. Mooney, Barrett v. McNulty, and Manning v. Brown, noting the common thread: disavowals by both owner and driver, without competent evidence suggesting consent. However, the Court emphasized that disavowals alone don’t automatically warrant summary judgment. In cases like Winnowski v. Polito and Motor Veh. Acc. Indem. Corp. v. Continental Natl. Am. Group Co., summary judgment was denied due to implied permission or public policy concerns. The Court determined that summary judgment depends on the strength and plausibility of the disavowals. In this case, the disavowals were reinforced by Amtrak’s contemporaneous accident reports and Sanchez’s acceptance of punishment for unauthorized use. The court stated, “[W]hether summary judgment is warranted depends on the strength and plausibility of the disavowals, and whether they leave room for doubts that are best left for the jury.” The Court also addressed the absence of a report to law enforcement, stating that this alone should not defeat summary judgment when the evidence against permission is strong and uncontested.

  • Hassan v. Hendel Products, Inc., 92 N.Y.2d 354 (1998): Statutory Owner May Sue Other Owners Under Vehicle and Traffic Law § 388

    Hassan v. Hendel Products, Inc., 92 N.Y.2d 354 (1998)

    Under New York Vehicle and Traffic Law § 388, a statutory owner of a vehicle is not precluded from bringing a claim against other statutory owners for injuries sustained as a result of the negligent operation of the vehicle by a permissive user.

    Summary

    Marianne Hassan, an employee of Hendel Products, Inc., was injured while a passenger in a company car leased from First Union Auto Finance, Inc. Her husband, who was driving with permission, was killed in the accident. Hassan sued Hendel and First Union as owners of the vehicle under Vehicle and Traffic Law § 388. The defendants moved for summary judgment, arguing that Hassan, as a statutory owner due to her exclusive use of the vehicle, could not sue co-owners. The Court of Appeals reversed the Appellate Division’s grant of summary judgment, holding that the statute does not preclude a statutory owner from suing other owners for injuries caused by a permissive driver.

    Facts

    Marianne Hassan was employed by Hendel Products, Inc., and provided with a company vehicle leased from First Union Auto Finance, Inc., for both business and personal use. She used the vehicle for approximately two years. On May 25, 1997, Hassan was a passenger in the vehicle, driven by her husband, with the permission of Hendel and First Union. The car collided with a truck, resulting in her husband’s death and her severe injuries.

    Procedural History

    Hassan sued First Union and Hendel as owners of the vehicle, pursuant to Vehicle and Traffic Law § 388. The Supreme Court denied the defendants’ motion for summary judgment. The Appellate Division modified the Supreme Court’s order and granted summary judgment in favor of Hendel and First Union, concluding that Hassan was a statutory owner and could not sue co-owners. The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether a statutory owner of a vehicle, as defined by Vehicle and Traffic Law § 128, is precluded from bringing a claim under Vehicle and Traffic Law § 388 against other statutory owners of the same vehicle for injuries sustained as a result of the negligence of a permissive user.

    Holding

    No, because Vehicle and Traffic Law § 388 does not limit the class of possible plaintiffs to non-owners, and the statute’s purpose is to ensure access to a financially responsible party for those injured by the negligence of a permissive user.

    Court’s Reasoning

    The Court of Appeals focused on the language of Vehicle and Traffic Law § 388, noting that it does not limit the class of plaintiffs to non-owners. The statute states that “Every owner of a vehicle used or operated in this state shall be liable and responsible for death or injuries to person or property resulting from negligence in the use or operation of such vehicle…by any person using or operating the same with the permission, express or implied, of such owner.” The court emphasized that the defendants, Hendel and First Union, were owners who permitted the negligent driver to operate the vehicle. Therefore, whether or not Hassan was also an “owner,” her injuries caused by a driver operating the vehicle with the owners’ consent brought her within the statute’s protection. The court reiterated the purpose of Vehicle and Traffic Law § 388 is to “ensure access by injured persons to ‘a financially responsible [party] against whom to recover for injuries’ ” and “to impose liability upon the owner of a vehicle ‘for the negligence of a person legally operating the car with the permission, express or implied, of the owner.’” (Morris v Snappy Car Rental, 84 NY2d 21, 27 [1994]). The court did not find any language suggesting an intention to preclude a statutory owner from recovering against other owners under the statute. There were no dissenting or concurring opinions.

  • Guariglia v. Blima Homes, Inc., 89 N.Y.2d 852 (1996): Adverse Possession Requires Hostile, Not Permissive, Use

    Guariglia v. Blima Homes, Inc., 89 N.Y.2d 852 (1996)

    To establish title by adverse possession, the claimant’s possession must be hostile and under a claim of right; permissive use, even if prolonged, defeats such a claim.

    Summary

    The plaintiffs, the Guariglias, sought to establish legal title to a strip of land adjoining their property through adverse possession. The defendant, Blima Homes, Inc., held the record title to the land. The Court of Appeals held that the Guariglias’ claim failed because their use of the land was initially permissive, stemming from an agreement concerning the acquisition of the adjoining parcel. This permissive use negated the element of hostility required for adverse possession. The court emphasized that while a predecessor’s adverse possession could overcome this, the plaintiffs failed to provide sufficient proof of such prior adverse use.

    Facts

    The Guariglias acquired their property in 1977. They claimed adverse possession over a 10-foot by 40-foot strip of land bordering their property on the west. Blima Homes, Inc. had held legal title to the entire adjoining parcel since 1984. In 1982, Concetta Guariglia entered into an agreement regarding the acquisition of the westerly adjoining parcel (now owned by Blima) from the State of New York.

    Procedural History

    The plaintiffs brought an action to establish title by adverse possession. The lower court granted summary judgment dismissing their cause of action against Blima Homes, Inc. The Appellate Division affirmed this decision. The plaintiffs appealed to the New York Court of Appeals.

    Issue(s)

    Whether the plaintiffs established adverse possession of the disputed strip of land, considering their permissive use stemming from the 1982 agreement.

    Holding

    No, because the plaintiffs’ initial use of the disputed strip was permissive, not hostile, due to the 1982 agreement acknowledging ownership by others, and they failed to adequately prove adverse possession by their predecessors in interest.

    Court’s Reasoning

    The court began by stating that Blima Homes, Inc., as the record holder of legal title, was presumed to be in possession of the disputed strip, and the Guariglias’ occupancy was presumed to be subordinate, not hostile. The court highlighted the significance of the 1982 agreement, stating it “constituted an acknowledgement that actual ownership rested in others.” The court reasoned that this acknowledgement negated the “essential element” of hostility necessary for an adverse possession claim. The court cited Van Gorder v. Masterplanned, Inc., 78 N.Y.2d 1106, 1108, reinforcing this principle. The court acknowledged that the effect of this acknowledgement could be overcome by demonstrating that the plaintiffs’ predecessors had adversely possessed the strip for the statutory period. However, the plaintiffs “failed to submit proof in admissible form to substantiate that contention.” The court cited Di Leo v. Pecksto Holding Corp., 304 N.Y. 505, 514, and City of Tonawanda v. Ellicott Cr. Homeowners Assn., 86 A.D.2d 118, 124, to support the principle of tacking a predecessor’s adverse possession. The court found no admissible evidence to support tacking. Therefore, the court affirmed the dismissal of the adverse possession claim.

  • Albouyeh v. County of Suffolk, 62 N.Y.2d 681 (1984): Rebutting Presumption of Permissive Use of a Vehicle

    Albouyeh v. County of Suffolk, 62 N.Y.2d 681 (1984)

    The presumption that the owner of a vehicle consented to its use is rebutted when presented with uncontradicted evidence that the vehicle was stolen, and the plaintiff fails to demonstrate that the theft location was a public highway or private road open to public motor vehicle traffic.

    Summary

    This case addresses the presumption of permissive use of a vehicle under New York law. The Court of Appeals held that the owner of a vehicle, Cusimano, was entitled to summary judgment because uncontradicted evidence showed the vehicle was stolen by Conlon. The court emphasized that the plaintiff failed to prove that the location from which the car was stolen was a public highway or a private road open to public motor vehicle traffic, which is necessary to invoke Vehicle and Traffic Law § 1210(a). The court found that the plaintiff’s speculation about potential future evidence was insufficient to overcome the established facts indicating a lack of permission.

    Facts

    Defendant Cusimano testified in a deposition that he had locked his car in his driveway. He denied that defendant Conlon had permission to drive the vehicle. Conlon, the driver of the vehicle involved in the accident, stated she had stolen the car from the driveway of the New York Institute of Technology. The arresting officer confirmed that Conlon admitted to stealing the car at the accident scene. Mrs. Cusimano was, at the time, a student at New York Institute of Technology.

    Procedural History

    The plaintiff brought suit against Cusimano (the owner) and Conlon (the driver). The lower court denied Cusimano’s motion for summary judgment. The Appellate Division reversed, granting summary judgment for Cusimano. The plaintiff appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether the presumption of permissive use arising from Cusimano’s ownership of the vehicle was rebutted by uncontradicted evidence that the vehicle was stolen?

    2. Whether Vehicle and Traffic Law § 1210(a) foreclosed summary judgment for Cusimano, given the car was stolen from the New York Institute of Technology driveway?

    Holding

    1. Yes, because the uncontradicted evidence of the theft rebutted the presumption of permission. Conlon’s admission against penal interest established the car was stolen, overriding the presumption arising from ownership.

    2. No, because Vehicle and Traffic Law § 1210(a) applies only to highways or private roads open to public motor vehicle traffic, and the plaintiff failed to prove that the New York Institute of Technology driveway qualified as such a location.

    Court’s Reasoning

    The Court of Appeals relied on precedent from St. Andrassy v. Mooney and Der Ohannessian v. Elliott, stating that the presumption of permissive use is rebutted by uncontradicted evidence. Conlon’s admission that she stole the car was considered an admission against penal interest, lending credibility to the claim that Cusimano did not grant permission. The court emphasized that “Under those circumstances the presumption of permission arising from Cusimano’s admission of ownership was rebutted by the uncontradicted evidence and he was entitled to summary judgment dismissing the complaint.”

    Regarding Vehicle and Traffic Law § 1210(a), the court noted that this provision applies only to highways and private roads open to public motor vehicle traffic, as per Vehicle and Traffic Law § 1100(a). The court stated, “There is, however, no presumption that the New York Institute driveway is a private road open to public motor vehicle traffic. It was, therefore, plaintiffs’ burden to go forward with proof establishing prima facie that the place from which Conlon stole the vehicle was a highway or such a private road.” The court rejected the plaintiff’s argument that they could potentially introduce evidence at trial showing the car was stolen from a public highway, stating that such a suggestion was insufficient to meet the burden of proof required for summary judgment, per CPLR 3212(b).

  • Kenig v. Motor Vehicle Accident Indemnification Corp., 58 N.Y.2d 34 (1982): Timeliness of MVAIC Claim After Insurer Disclaims Coverage

    Kenig v. Motor Vehicle Accident Indemnification Corp., 58 N.Y.2d 34 (1982)

    When an insurance company disclaims coverage based on the driver’s lack of permission to operate the vehicle, the claimant has an additional 90 days from the date of the disclaimer to file a notice of claim with the Motor Vehicle Accident Indemnification Corporation (MVAIC).

    Summary

    The executrix of an estate, whose husband was killed by a tow truck, initially received no-fault benefits from the truck’s insurer, USF&G. Subsequently, USF&G, representing the truck owner, asserted a lack of consent defense, claiming the driver did not have permission to operate the vehicle. This prompted the executrix to file a claim with MVAIC, which MVAIC rejected as untimely. The Court of Appeals held that the executrix’s claim was timely because it was filed within 90 days of the insurer’s explicit disclaimer of coverage based on the driver’s lack of permission, as required by the amended Insurance Law § 608(c). The court emphasized that the initial answer asserting the lack of consent defense did not constitute a formal disclaimer from the insurer.

    Facts

    Wolf Kenig was killed on January 27, 1980, when struck by a tow truck owned by Peter Bowen and driven by Douglas Hollingsworth. Kenig’s wife was appointed executrix of his estate on March 21, 1980. She received no-fault benefits from USF&G, Bowen’s insurer. On December 29, 1980, the executrix sued Hollingsworth, and on January 5, 1981, she sued Bowen, alleging Hollingsworth’s negligence caused Kenig’s death. On January 23, 1981, USF&G filed an answer on behalf of Bowen, asserting Hollingsworth lacked Bowen’s permission to drive the truck.

    Procedural History

    The executrix contacted USF&G about their failure to represent Hollingsworth. Hollingsworth filed a pro se answer. USF&G eventually informed the executrix on May 15, 1981, that they would not defend Hollingsworth due to lack of consent. On May 21, 1981, the executrix filed a late notice of claim with MVAIC. MVAIC rejected the claim. Special Term denied MVAIC’s motion to be absolved of responsibility and ordered MVAIC to accept the claim as timely. The Appellate Division affirmed. The Court of Appeals affirmed the Appellate Division’s order.

    Issue(s)

    Whether the executrix filed a timely notice of claim with MVAIC, considering the insurer’s assertion that the driver lacked permission to operate the vehicle and the subsequent disclaimer of coverage.

    Holding

    Yes, because the executrix filed the notice of claim within 90 days of receiving notice from USF&G that it was disclaiming coverage for Hollingsworth based on his lack of permission to operate the vehicle, satisfying the requirements of Insurance Law § 608(c) as amended.

    Court’s Reasoning

    The Court reasoned that the amended version of Insurance Law § 608(c), effective June 30, 1980, applied to the case because the claim was ongoing when the amendment took effect and it was a remedial amendment. The amended statute provides an additional 90 days to file a notice of claim with MVAIC when an insurer disclaims coverage due to the driver’s actions, including lack of permission to operate the vehicle. The court stated that this amendment “covers situations, such as here, where the insurer has disclaimed based on the driver’s operation of the vehicle without the owner’s consent and in effect overrules this court’s holding to the contrary in Allegretti v Mancuso (33 NY2d 882).”

    The critical issue was determining when the executrix received notice of the disclaimer. MVAIC argued that the notice was given in January 1981 when USF&G filed an answer on behalf of the owner alleging lack of consent and when Hollingsworth filed his pro se answer. The Court rejected this argument, explaining that the owner’s answer merely indicated an intent to defend the owner while raising lack of consent as a defense on the merits. The court noted that, although the executrix might have inferred a disclaimer from Hollingsworth’s pro se answer, this did not constitute formal notice of disclaimer from USF&G. The court determined that official notice was first given on May 15, 1981, and the claim filed on May 21, 1981, was therefore timely. The court also dismissed MVAIC’s argument regarding the executrix’s failure to make timely efforts to ascertain coverage, noting she had received no-fault benefits and the insurer had not raised the issue of disclaimer earlier.

  • Guercio v. Hertz Corp., 40 N.Y.2d 680 (1976): Liability of Self-Insured Car Rental Company

    Guercio v. Hertz Corp., 40 N.Y.2d 680 (1976)

    A self-insured car rental company can be held liable for damages caused by a permissive driver of a rental vehicle if the rental agreement extends liability coverage to such drivers, consistent with the terms of standard automobile liability insurance policies.

    Summary

    Rosario Guercio rented a car from Hertz and allowed Raymond Frost to drive. Frost negligently caused an accident injuring Guercio. Guercio sued Frost and obtained a judgment, but Frost could not pay. Guercio then sued Hertz, arguing that as a self-insurer, Hertz was responsible for Frost’s negligence. The court held that Hertz was liable because the rental agreement extended liability coverage to permissive drivers, mirroring the coverage required in standard insurance policies. This obligation arose from the terms of the self-insurance Hertz agreed to in its rental agreement, not merely from the fact of being a self-insurer.

    Facts

    Guercio rented a car from Hertz, with the rental agreement restricting vehicle operation to the lessee, immediate family members over 21, or the lessee’s employer or employees. The agreement stated that the vehicle was covered by a liability policy with specific limits, but this policy did not apply if the vehicle was operated in violation of the agreement. The agreement also provided that Hertz, where permitted by state law, could provide liability coverage through a bond or self-insurance. Guercio allowed Frost, who was neither a family member nor over 21, to drive. Frost negligently crashed the car, injuring Guercio. At the time of the accident, Hertz was self-insured.

    Procedural History

    Hertz initially sued Guercio and Frost for property damage in Civil Court, alleging negligence by Frost and breach of contract by Guercio. The jury found for Guercio. Guercio then sued Frost and Hertz for personal injuries. The claim against Hertz was initially dismissed due to imputed contributory negligence. Guercio obtained a judgment against Frost, which remained unsatisfied, leading Guercio to sue Hertz to compel payment. Special Term denied relief, and the Appellate Division affirmed. This decision was appealed. Later, Guercio’s motion to set aside the dismissal against Hertz, based on a change in law eliminating imputed contributory negligence, was denied. Guercio then initiated the present action, which the Appellate Division reversed, holding Hertz liable as a self-insurer. Hertz appealed to the New York Court of Appeals.

    Issue(s)

    Whether Hertz, as a self-insured car rental company, is liable for damages caused by a driver operating the rental vehicle with the lessee’s permission, when the driver is not authorized under the rental agreement’s restrictions, and the rental agreement extends liability coverage to permissive drivers as if the company was actually insured?

    Holding

    Yes, because the rental agreement extended liability coverage to permissive drivers, consistent with the terms of a standard automobile liability insurance policy, and Hertz is bound by the prior Civil Court jury finding that it gave permission to Guercio to allow underage friends to operate the rental vehicle.

    Court’s Reasoning

    The court reasoned that self-insurance, in this context, is not insurance itself, but a method for vehicle owners to comply with the Motor Vehicle Financial Security Act by demonstrating their ability to pay judgments. While Hertz, as a self-insurer, is generally only obligated to respond to judgments against it, in this case, the rental agreement promised liability insurance or equivalent coverage through self-insurance. Because the agreement included the same terms as a liability insurance policy, it effectively made Hertz the insurer of Frost, who was driving with Guercio’s permission. The court stated that “Hertz, in its rental agreement with Guercio, promised to maintain a liability insurance policy or, failing that, to obtain the same liability coverage under a bond or as a matter of self-insurance.” Furthermore, the court invoked collateral estoppel, noting that Hertz was bound by the prior Civil Court’s finding that Hertz gave permission to Guercio to allow underage friends to operate the vehicle, thus precluding Hertz from arguing the operation violated the rental agreement. The court determined that Guercio could enforce his rights against Hertz through section 167 of the Insurance Law, which mandates a direct action against the insurer if the insured fails to pay, or through CPLR article 52, as Frost was an insured under Hertz’s policy of self-insurance.

  • Breen v. Cunard Lines, 33 N.Y.2d 508 (1974): Limiting Insurance Coverage for Loading and Unloading of Vehicles

    Breen v. Cunard Lines, 33 N.Y.2d 508 (1974)

    An insurance policy may limit liability coverage for loading and unloading of a vehicle to specific individuals or entities, such as lessees, borrowers, or employees of the named insured, pursuant to valid regulations by the Superintendent of Insurance.

    Summary

    Michael Breen, a truck driver, sued Cunard Lines for injuries sustained while unloading cargo. Cunard sought indemnity from Wooster Express’s insurer, Liberty Mutual, based on Wooster’s policy covering permissive users of the truck. The policy limited coverage for loading/unloading to lessees, borrowers, or Wooster’s employees. The court affirmed summary judgment for Liberty Mutual, holding that the policy limitation was valid under a regulation allowing such restrictions. The court reasoned that general statutory requirements for liability coverage do not preclude reasonable regulations defining the scope of coverage for loading and unloading operations. This case clarifies the extent to which insurance regulations can limit coverage mandated by broader statutes.

    Facts

    Michael Breen, a truck driver for Wooster Express, was injured on Cunard Lines’ pier when he fell through a broken board on a pallet while unloading heavy cases of paper from his truck.

    Procedural History

    Breen sued Cunard Lines for his injuries. Cunard then filed a third-party complaint against Liberty Mutual, Wooster Express’s liability insurer, seeking indemnity. The lower court granted summary judgment to Liberty Mutual, finding that Cunard was not covered under the policy’s loading/unloading provisions. The Appellate Division affirmed. The case then went to the New York Court of Appeals.

    Issue(s)

    Whether an insurance policy can validly limit liability coverage for loading and unloading of a vehicle to a lessee or borrower of the vehicle or an employee of the named insured, pursuant to a regulation of the Superintendent of Insurance, despite broader statutory requirements for liability coverage.

    Holding

    Yes, because the regulation of the Superintendent of Insurance permitting such limitation is valid and not in conflict with statutory provisions mandating liability coverage for permissive users of a vehicle. The statutory reference to “users” does not necessarily include every attenuated event associated with loading or unloading; therefore, the Superintendent has broad authority to define the scope of coverage.

    Court’s Reasoning

    The court reasoned that while Vehicle and Traffic Law § 345(b)(2) and Insurance Law § 167(2) mandate liability coverage for any party “using” the vehicle with the named insured’s permission, these provisions do not prevent a regulation from clarifying the extended coverage required for loading and unloading. The court acknowledged that the process of loading and unloading can be broadly construed, involving many parties and activities. However, it also noted that it may not be desirable or rational to extend the concept of “use” indefinitely. The court distinguished Wagman v. American Fid. & Cas. Co., 304 N. Y. 490, where the insurance policy expressly designated loading and unloading as a “use” of the vehicle for which all users were covered. Here, the statutory reference to “users” is general and does not automatically include every event associated with loading/unloading. The court emphasized the Superintendent of Insurance’s broad power to interpret and implement legislative policy, finding a rational basis for the regulation given the generality of the statutes, the indefiniteness of loading/unloading, and the practicalities of insurance rates. The court quoted, “Given the generality of the applicable statutes, the indefiniteness inherent to the loading and unloading process, and the practicalities of the overlapping of liability insurance and the insurance rate structure, there was a rational basis for the regulation by the Superintendent.” As Cunard was excluded by the policy provision pursuant to a valid regulation, it had no cause of action against Wooster’s insurer.