New York Law Review

Tag: Vehicle Owner Liability

  • 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.

  • Murdza v. D.L. Peterson Trust, 3 N.Y.3d 189 (2004): Rebutting Vehicle Owner’s Liability Under VTL § 388(1)

    Murdza v. D.L. Peterson Trust, 3 N.Y.3d 189 (2004)

    An employer-lessee can rebut the presumption of vehicle owner liability under Vehicle and Traffic Law § 388(1) through restrictive provisions in its employee manual, but the vehicle’s lessors cannot benefit from those same restrictions as a matter of law.

    Summary

    Murdza sued Zimmerman, B&W (Brown & Williamson Tobacco Corp), the Trust, and PHH after being injured by a van driven by Zimmerman. The van was owned by the Trust and PHH, leased to B&W, and driven by Zimmerman, the boyfriend of B&W employee Scicchitano. B&W’s employee handbook restricted vehicle use to employees and their licensed spouses. The Second Circuit certified questions to the New York Court of Appeals regarding whether B&W’s employee manual rebutted the presumption of owner consent under VTL § 388(1) for B&W, PHH, and the Trust. The Court of Appeals held that B&W effectively rebutted the presumption, but PHH and the Trust did not.

    Facts

    Stanley Murdza, a Canadian resident, was injured when struck by a van operated by Robert Zimmerman. Zimmerman was the boyfriend of Margaret Scicchitano, a B&W employee. B&W leased the van from D.L. Peterson Trust and PHH Fleet America Corporation. B&W’s employee handbook restricted the use of company vehicles to employees and their licensed spouses. The lease agreement between B&W and the Trust/PHH contained no such restrictions.

    Procedural History

    Murdza sued Zimmerman, B&W, the Trust, and PHH in United States District Court. The District Court granted summary judgment for Murdza against Zimmerman on his negligence. The District Court granted summary judgment to B&W, the Trust, and PHH, dismissing the claims against them. The Second Circuit certified questions to the New York Court of Appeals regarding whether B&W’s employee manual rebutted the presumption of owner consent under VTL § 388(1) for B&W, PHH, and the Trust.

    Issue(s)

    1. Did the lessee Brown and Williamson effectively rebut the presumption of consent of the owner, so as to make it immune as a matter of law from imposition of owner’s liability under Section 388 (1) by reason of the restrictive provision in its employee manual?

    2. Were the lessors PHH and the Trust immune as a matter of law from imposition of owner’s liability under Section 388 (1) by reason of the restrictive provision in Brown & Williamson’s employee manual?

    Holding

    1. Yes, because B&W, as an employer explicitly restricting vehicle operation through its employee handbook, encourages careful selection of operators, aligning with the curative policy underpinning of VTL § 388.

    2. No, because PHH and the Trust are lessors of the van and fall within the public policy considerations discussed in Motor Veh. Acc. Indent. Corp. v Continental Natl. Am. Group Co., 35 N.Y.2d 260 (1974), and thus may not benefit from restrictions adopted by their lessee.

    Court’s Reasoning

    Vehicle and Traffic Law § 388(1) makes vehicle owners liable for injuries resulting from negligence in the use or operation of the vehicle by someone using it with the owner’s permission. Proof of ownership creates a rebuttable presumption that the driver was using the vehicle with the owner’s permission. This presumption can be rebutted by substantial evidence that the vehicle was not operated with the owner’s consent.

    The Court distinguished its holding in Motor Veh. Acc. Indent. Corp. v Continental Natl. Am. Group Co. In that case, the court deemed a car rental agency to have “constructively” consented to a third-party driver’s operation of its rental vehicle despite a lease provision restricting use of the vehicle to the lessee and his immediate family. Here, by permitting an employee’s use of its vehicle, B&W stands in a very different position than a car rental agency, which “rent[s] large numbers of vehicles to the general public for profit” (Motor Vehicle, 35 NY2d at 263). The relationship between an employer and employee demands compliance with restrictions on vehicle operation placed on the employee, therefore, allowing an employer to restrict operators encourages careful selection.

    PHH and the Trust, however, are lessors of the van and therefore fall squarely within the public policy considerations discussed in Motor Vehicle. The court noted that a question of fact exists as to whether Zimmerman operated the vehicle with Scicchitano’s permission, as required under Motor Vehicle for a finding of constructive consent. Whether PHH and the Trust constructively consented to Zimmerman’s use of the van depends not on the restrictions in B&W’s employee handbook, but on his status as either a thief or a permissive user.

  • Averill v. DERRICO, 43 N.Y.2d 722 (1977): Owner’s Liability for Unauthorized Passengers

    43 N.Y.2d 722 (1977)

    If a jury finds that a vehicle owner forbade the driver from carrying passengers, the owner is not liable to a passenger injured due to the driver’s negligence.

    Summary

    This case concerns the liability of a vehicle owner for injuries sustained by an unauthorized passenger due to the driver’s negligent operation. The Court of Appeals affirmed the lower court’s decision, holding that if the jury finds the owner forbade the driver from carrying passengers, the owner isn’t liable to a passenger injured by the driver’s negligence. The court declined to reconsider the existing New York rule on this matter, emphasizing the jury’s role in resolving factual disputes, particularly those involving credibility. Evidentiary rulings by the trial court were also upheld, finding either no error or the issues not properly preserved for review.

    Facts

    The plaintiff, Averill, was injured while riding as a passenger in a tractor owned by Derrico and driven by Jenkins, who died in the accident. The tractor was completely destroyed. Averill claimed negligence on the part of Jenkins caused his injuries. Derrico asserted that Jenkins was forbidden from carrying passengers.

    Procedural History

    The case proceeded to trial, where the jury found in favor of the defendant, Derrico. The Appellate Division affirmed the trial court’s judgment. Averill appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether the trial court erred in its evidentiary rulings regarding photographs of the tractor and conversations between the deceased driver and the defendant.

    2. Whether the court should reconsider the existing New York rule that a vehicle owner is not liable to an unauthorized passenger if the driver was forbidden from carrying passengers.

    3. Whether the trial court failed to properly instruct the jury on the relationship between Federal Transportation Act and New York Public Service Commission rules restricting the transportation of unauthorized persons and the issues in the case.

    Holding

    1. No, because the issues were either not preserved for review or without merit.

    2. No, because the court declined to reconsider the existing rule of law in New York.

    3. No, because the appellant failed to request a pertinent charge or object on this ground to the instructions as given by the court.

    Court’s Reasoning

    The Court of Appeals affirmed the lower court’s decision, emphasizing the jury’s role in resolving conflicts in the evidence, especially concerning credibility. The court declined to reconsider the established New York rule, stating, “if the jury finds that the owner of a motor vehicle has forbidden its user to carry any passenger in the vehicle, the owner is not liable to a person who nevertheless is permitted to ride as a passenger for injuries suffered in consequence of the negligent operation of the vehicle by the user.” The court addressed several asserted errors by the trial court, finding them either unpreserved or meritless. The court deemed the admission of a photograph of a “sister tractor” proper, as it was a fair representation of the tractor involved in the accident. The exclusion of police photographs was also deemed proper as the witness could not attest to their accuracy. The court noted that the appellant failed to request a specific jury charge regarding the Federal Transportation Act and Public Service Commission rules, thus failing to preserve the issue for appeal. The court determined that the testimony of conversations between the appellant and the deceased driver was properly excluded as hearsay. Lastly, the court dismissed the claim that undue emphasis was placed on conversations between other employees and the deceased driver, as no protest was raised at trial.

  • Continental Auto Lease Corp. v. Campbell, 19 N.Y.2d 350 (1967): Imputation of Contributory Negligence to Vehicle Owners

    Continental Auto Lease Corp. v. Campbell, 19 N.Y.2d 350 (1967)

    The negligence of a vehicle operator is not imputed to the owner to bar the owner’s recovery against a negligent third party unless the owner has a relationship with the operator that gives the owner the right to control the operator’s conduct.

    Summary

    Continental Auto Lease Corp. sued Ralph Shepard (later his administratrix, Campbell) for damage to its car caused by an accident involving Shepard and Continental’s lessee, Kamman. The jury found both drivers negligent. The court addressed whether Kamman’s negligence should be imputed to Continental, barring Continental’s recovery. The Court of Appeals held that Kamman’s negligence was not imputable to Continental because Continental lacked the right to control Kamman’s operation of the vehicle. The mere fact that the bailment was commercial rather than gratuitous was not sufficient ground for imputing negligence. This case clarifies the circumstances under which contributory negligence is imputed to a vehicle owner, emphasizing the necessity of control.

    Facts

    Continental Auto Lease Corp. leased a car to Kamman for four days at a fixed rate plus mileage.
    During the lease, Kamman was in an accident with Shepard.
    Both drivers were found negligent by the jury.
    Continental sued Shepard for damages to its vehicle.

    Procedural History

    Continental sued Shepard; upon Shepard’s death, his administratrix, Campbell, was substituted as the defendant.
    The trial court directed a verdict for Continental, finding Shepard negligent.
    The Appellate Division affirmed the trial court’s judgment.
    Campbell appealed to the New York Court of Appeals.

    Issue(s)

    Whether the negligence of the operator of a leased vehicle (Kamman) should be imputed to the vehicle’s owner (Continental) to bar the owner’s recovery from a negligent third party.

    Holding

    No, because Continental had no relationship with Kamman that would give Continental the right to control Kamman’s operation of the vehicle. The commercial nature of the bailment, by itself, is insufficient to impute negligence.

    Court’s Reasoning

    The court distinguished between imputed negligence (widening liability) and imputed contributory negligence (narrowing liability).
    Vehicle and Traffic Law Section 388 imputes negligence to the owner to protect injured third parties, ensuring a financially responsible defendant.
    The court relied on Mills v. Gabriel, 284 N.Y. 755, which refused to impute contributory negligence to an absentee owner in a gratuitous bailment.
    It distinguished Gochee v. Wagner, 257 N.Y. 344, where the owner was present in the car, retaining control.
    The “touchstone of imputed contributory negligence is the existence of a relationship between the owner of the vehicle and the operator such that the operator of the vehicle is subject to the owner’s control.” The court reasoned that mere financial benefit from the lease agreement does not establish sufficient control for imputing negligence.
    The Court stated: “If a car owner’s relationship to the driver of his car is such that a degree of physical control over the driver can reasonably be deemed to exist, under Gochee v. Wagner (supra) the negligence of the driver can he imputed to the owner to bar the owner’s recovery against a negligent third party.” Since Continental lacked such control over Kamman, Kamman’s negligence could not be imputed to Continental.