Motor Club of America Ins. Co. v. Hanifi

• Decision Date: 21 May 1998
• Docket Number: No. 96-1603,96-1603
• Citation: 145 F.3d 170
• Parties: MOTOR CLUB OF AMERICA INSURANCE COMPANY, Plaintiff-Appellant, Lorraine Weil; Carol Wilke; Lawrence Wilke; Michael Wilke, Plaintiffs, v. Ebrahim HANIFI; Gulagha Sultan, Defendants-Appellees, Allstate Insurance Company, Defendant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 170

145 F.3d 170

MOTOR CLUB OF AMERICA INSURANCE COMPANY, Plaintiff-Appellant Lorraine Weil; Carol Wilke; Lawrence Wilke; Michael Wilke, Plaintiffs, v. Ebrahim HANIFI; Gulagha Sultan, Defendants-Appellees Allstate Insurance Company, Defendant.

No. 96-1603.

United States Court of Appeals, Fourth Circuit.

Argued April 9, 1997.

Decided May 21, 1998.

ARGUED: Joanna Jesperson, Epstein, Becker & Green, P.C., Washington, DC, for Appellant. Richard Thomas Radcliffe, Jr., Church & Houff, P.A., Baltimore, MD, for Appellees. ON BRIEF: David E. Manoogian, Peyton S. Isaac, Epstein, Becker & Green, P.C., Washington, DC, for Appellant.

Before WILKINSON, Chief Judge, WIDENER, Circuit Judge, and DUFFY, United States District Judge for the District of South Carolina, sitting by designation.

Vacated and remanded by published opinion. Judge WIDENER wrote the opinion, in which Chief Judge WILKINSON and Judge DUFFY joined.

OPINION

WIDENER, Circuit Judge:

In this case, Motor Club of America Insurance Company appeals the April 3, 1996 order of the United States District Court for the District of Maryland granting summary judgment in favor of two New York defendants, Ebrahim Hanifi and Gulagha Sultan. The district court ruled that Maryland's law governed the issue of liability for the automobile accident so the plaintiffs had to establish the identity of the driver and show his negligence. The court therefore rejected the application of New York Traffic and Vehicle Law § 388 which imposes vicarious liability on the owners of vehicles registered in New York for the negligence of any permissive users, even when the car is outside of New York. The court decided that the plaintiffs could not establish a genuine issue of fact as to the identity of the driver of the vehicle which caused the accident and thus summary judgment was appropriate as to both defendants.

We reverse the grant of summary judgment because we find the plaintiffs did establish a genuine dispute of fact as to the identity of both the driver and the car. Additionally, we find summary judgment as to Hanifi was also improper where the district court erred in not applying New York Section 388.

I.

The plaintiffs, Lorraine Weil, and the Wilkes--Lawrence, Michael and Carol--resided in New Jersey at the time of the accident. The defendants, Ebrahim Hanifi and his brother-in-law Gulagha Sultan are residents of New York. At all times relevant to this action Mrs. Weil had an uninsured motorist policy with plaintiff-intervenor Motor Club which provided her with insurance coverage in the event that she became injured, or otherwise incurred damages from the actions of an uninsured motorist. The Wilkes were not insured by Motor Club.

On May 11, 1991 at about seven a.m. the plaintiffs were traveling south in the passing lane on Interstate 95 in a vehicle owned and driven by Robert Weil, Mrs. Weil's husband. According to the plaintiffs and witnesses the accident resulted when a white car from the northbound lanes crossed over the median strip into the southbound lanes just in front of the plaintiffs' car. The police report indicates that the white car performed a U-turn into the southbound lanes, and while it did not strike the plaintiffs' car, in swerving to evade the white car, the plaintiffs' car struck another and overturned. The white car left the scene heading south.

The occupants of two other southbound cars witnessed the accident and reported what they saw to police. John McGovern was driving south on Interstate 95 with his wife Elda McGovern in the passenger seat when they saw the accident and proceeded to follow the white car as it drove off. They both saw the license plate and Mrs. McGovern recorded it. Shortly thereafter they stopped at a fire station to call the police. Officer James Gruver later included that information in a supplement to the accident report. The accident was also witnessed by Colleen Young. She too followed the white car, and was observed by the McGoverns as they both trailed the white car. Miss Young also remembered the number and relayed the information to the police.

Officer Gruver recorded the license plate number as New York tag number VZY-653, the same license number reported by both the McGoverns and Miss Young. Officer Gruver investigated the tag number and determined that Ebrahim Hanifi owned a white car with that license plate. The police report reflects that the McGoverns identified the occupants of the cars as three black males, while Young said they were three white males.

Hanifi admits that in May 1991 he owned a white car with New York plates VZY-653. However, he states that in April 1991 he had loaned the car to his brother-in-law, Sultan. Sultan's statement corroborates this, and he states that he had exclusive possession of the vehicle, and that only he knew where he kept the spare set of keys. Sultan further verifies that the car was in his possession in New York on the day of the accident, May 11, 1991. Four family members signed affidavits to the effect that the car was in Sultan's driveway the morning of the accident. Sultan also stated that while his car was not involved in the accident at issue, it was involved in a "slight fender-bender" earlier in April 1991.

II.

Motor Club notes that this action had an involved procedural history prior to the filing of this suit in the Maryland district court. ¹ We detail here only the procedure of the instant suit, which is all that is relevant to the issue at hand.

On May 10, 1994 the individual New Jersey plaintiffs filed their negligence action against the New York defendants, Hanifi and Sultan, in the Circuit Court for Harford County, Maryland, alleging that the defendants caused the Maryland wreck. The defendants removed the action to the United States District Court for the District of Maryland on the basis of diversity jurisdiction. Thereafter, the defendants filed a third-party complaint against Motor Club alleging that because the defendants were not involved in the accident, Motor Club was liable to Mrs. Weil as her uninsured motorist carrier.

On January 17, 1995 defendants Hanifi and Sultan filed their first motion for summary judgment against the plaintiffs, asserting that there was insufficient evidence to prove the identity of the driver of the white vehicle which caused the accident. In their respective answers to interrogatories, Hanifi admitted ownership of a white four door Oldsmobile with the New York registration "VZY-653," and Sultan admitted that he possessed the white car on the day of the accident, and that it was parked at his house. Motor Club opposed the motion for summary judgment on the grounds that it was premature, that the prior intercompany arbitration had found that Hanifi's car had caused the accident, and that there was sufficient evidence from which to find the defendants liable for the accident. On March 2, 1995 the court found that Motor Club had fulfilled its burden of coming forward with evidence to create a genuine dispute of fact and denied the defendants' motion for summary judgment. The defendants moved in April for reconsideration of their motion for summary judgment, which the court denied on May 1, 1991.

On April 10, 1995 the defendants had moved to dismiss the third party complaint against Motor Club. Motor Club opposed the defendants' motion and simultaneously filed its own motion to intervene in the lawsuit. The court denied the motion to dismiss and granted Motor Club's motion to intervene. On May 24, 1995 Motor Club filed its complaint in intervention suing both the individual plaintiffs and the defendants for declaratory relief and indemnification. Motor Club alleged that because the accident was caused by a known vehicle, the one owned, insured, and registered to Hanifi and in the admitted exclusive possession of Sultan, Motor Club as the uninsured motorist carrier for Mrs. Weil was not responsible for her damages.

In their third attempt to secure summary judgment, on November 15, 1995, Hanifi and Sultan renewed their motion for summary judgment. In opposition to the motion, Motor Club argued that New York Vehicle and Traffic Law § 388 applied, such that Hanifi, as the vehicle owner, should be held vicariously liable for any permissive driver, and that Sultan would be liable for his negligent operation. On January 4, 1996 a different judge than the one who had denied the previous motions reversed the March 2, 1995 order denying summary judgment, and granted the motion for summary judgment as to Sultan. The court found there was insufficient evidence as to the identity of the driver of the vehicle to create a genuine issue of fact. That same order denied the motion for summary judgment as to Hanifi because Section 388 "seem[ed] clearly to apply" and therefore created an issue of fact as to Hanifi's liability as the owner of the car. Thus, as the case went to trial, Motor Club remained as an intervened plaintiff against the individual plaintiffs and against defendant Hanifi.

On April 2, 1996 the matter came on for a jury trial before the same judge who had issued the January 4 order dismissing Sultan and finding that because of the application of Section 388, Hanifi could not obtain summary judgment in his favor. Motor Club represents that present at trial were plaintiff Lorraine Weil, defendant Hanifi and former defendant Sultan, as well as Motor Club by its counsel. Also present under subpoena by Motor Club was eyewitness Colleen Young and a passenger in her car, Heather Young. Further, video depositions of John and Elda McGovern had been recorded by Motor Club for use at trial, and Motor Club states that the police officer who wrote the police report, Officer Gruver, had been subpoenaed and was in attendance.

On the day of trial, prior to the impaneling of the jury, counsel for Hanifi submitted without prior notice to Motor Club a pre-trial memorandum arguing that Section 388 and its vicarious...