Buglioli v. Enterprise Rent-A-Car

• Decision Date: 20 January 1993
• Docket Number: No. 91 C 3983.,91 C 3983.
• Citation: 811 F. Supp. 105
• Parties: William BUGLIOLI v. ENTERPRISE RENT-A-CAR and Frank R. Reidinger.
• Court: U.S. District Court — Eastern District of New York

811 F. Supp. 105

William BUGLIOLI v. ENTERPRISE RENT-A-CAR and Frank R. Reidinger.

No. 91 C 3983.

United States District Court, E.D. New York.

January 20, 1993.

Harry H. Lipsig & Partners (Alan M. Shapey, of counsel), New York City, for plaintiff.

Quirk and Bakalor, P.C. (Thomas E. Tookey, of counsel), New York City, for defendant Enterprise Rent-A-Car.

Conway, Farrell, Curtin & Kelly, P.C., New York City (Jonathan Uejio, of counsel), for defendant Reidinger.

MEMORANDUM AND ORDER

NICKERSON, District Judge:

Plaintiff William Buglioli, a New Jersey citizen, brought this diversity action to recover for injuries he sustained while driving a BMW automobile in a high-speed "cat and mouse" automobile chase in New Jersey. Defendant Enterprise Rent-a-Car Company ("Enterprise"), a Delaware corporation, is located in St. Louis, Missouri. Defendant Frank R. Reidinger is a citizen of New York.

Buglioli moves for partial summary judgment with respect to defendants' liability. He proposes to litigate the amount of damages at a later time.

Enterprise cross-moves for summary judgment contending that it was not the actual or constructive owner of the rental vehicle driven by Reidinger and that even if it was the owner, it was not vicariously liable under New Jersey law.

I

The largely undisputed facts may be briefly summarized.

Reidinger rented a Toyota Corolla from a "Enterprise Rent-a-Car" office located in Staten Island, New York in January of 1991. On March 1, 1991 Buglioli, his passenger and Reidinger and his two passengers were drinking at a bar named "Scoundrels" in Linden, New Jersey. Some sort of altercation occurred between the Buglioli and Reidinger passengers. Soon after driving away from the Scoundrels parking lot, Buglioli, Reidinger and a third car spontaneously initiated a high-speed automobile chase, described by witnesses as a game of "cat and mouse," across two miles of New Jersey roadway. According to one witness (but not another), the third car veered toward Reidinger who veered into Buglioli's lane. Buglioli lost control of his car and struck two telephone poles. As a result, according to his physician, he suffered severe head injury and brain damage, his speech is substantially unintelligible, and he has no recollection of the accident.

On December 16, 1991, Reidinger voluntarily pleaded guilty to two counts of aggravated assault by automobile, fourth degree offenses, before the Superior Court of New Jersey. He admitted in open court that by driving in a reckless manner, he caused serious bodily injury to Buglioli. He further explained that after consuming alcohol and while speeding, he swerved toward Buglioli's automobile, causing Buglioli "to go off the road and into the post."

Reidinger was informed at the time of his plea that he could receive a sentence of up to three years in prison and a fine of up to $15,000. On March 27, 1992, he was placed on probation for a period of three years.

II

Buglioli moves for summary judgment on the issue of Enterprises's liability as constructive owner of the rented Toyota driven by Reidinger. Enterprise cross-moves for summary judgment contending, first, that it was not the actual or constructive owner of the Toyota rented by Reidinger and, second, that even if it was the owner, the court should deny vicarious liability under New Jersey law.

A

Assuming that Enterprise (or its corporate parent which could be joined in this action) constructively owned the Toyota rented to Reidinger, the court must first determine whether to apply New Jersey or New York law to the question of the owner's liability.

Under New Jersey law, the owner of a vehicle, without more, is not liable for the negligence of a driver of the vehicle. White v. Smith, 398 F.Supp. 130 (D.N.J. 1975). To recover damages, plaintiff must establish (1) an agency relationship between the owner and the driver (such as employer/agent), or (2) negligence by the owner in renting or loaning the vehicle to a reckless, incompetent or irresponsible bailee. Id. "Thus," as plaintiff concedes, "an owner in the business of leasing automobiles may not be held liable for the bailee's negligence absent a showing of agency or negligent choice of bailee." See also Noreiga v. Lever Bros. Co., 671 F.Supp. 991, 995 (S.D.N.Y.1987) (applying New Jersey law); Schimek v. Gibb Truck Rental Agency, 69 N.J.Super. 590, 592-93, 174 A.2d 641 (App.Div.1961); Zuppa v. Hertz Corp., 111 N.J.Super. 419, 421-22, 268 A.2d 364 (Essex County Ct.1970). Cf. Kauffman v. Gullace, 252 N.J.Super. 467, 600 A.2d 143 (App.Div.1991).

Under section 388 of the New York Vehicle and Traffic law,

(1) 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, in the business of such owner or otherwise, by any person using or operating the same with the permission, express or implied, of such owner.

Because the laws of New Jersey and New York are in sharp conflict regarding the circumstances in which an automobile owner is liable for the negligence of a driver, this court must follow the conflict of laws rules of New York, the state in which this court sits. Klaxon Co. v. Stentor Electric Mfg. Co., Inc., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941).

The New York Court of Appeals has developed rules for resolving conflicts in tort actions arising from automobile accidents without the state. When New York law conflicts with a foreign state's law regarding the appropriate standards of conduct, such as the rules of the road, the law of the place of the tort "will usually have a predominant, if not exclusive, concern." Babcock v. Jackson, 12 N.Y.2d 473, 483, 240 N.Y.S.2d 743, 191 N.E.2d 279 (1963).

But where the conflicting law relates to the manner in which losses are to be distributed and a New York citizen has suffered a loss, New York courts will apply its own loss distribution rules. For example, in Babcock, the New York Court of Appeals applied the New York guest statute requiring a negligent driver to compensate his passenger (a New York domiciliary) for injuries sustained in an accident without the state. The court found that New York had an important interest in protecting its own citizens from unfair or anachronistic statutes of foreign states. See Schultz v. Boy Scouts of America, Inc., 65 N.Y.2d 189, 199, 491 N.Y.S.2d 90, 480 N.E.2d 679 (1985).

Where, however, a non-domiciliary is injured in an automobile accident without the state, the court will apply the loss-distribution rules of the place of the tort. In Neumeier v. Kuehner, 31 N.Y.2d 121, 335 N.Y.S.2d 64, 286 N.E.2d 454 (1972), for example, the Court of Appeals applied a Canadian guest statute in an action arising from an automobile accident in Ontario, Canada brought by a Canadian. The Neumeier court found that New York had no interest in protecting a foreign domiciliary injured in a foreign land. Moreover, the court observed that "application of New York law would result in the exposure of this State's domiciliaries to a greater liability than that imposed upon resident users of Ontario's highways." See also Schultz, 65 N.Y.2d at 201, 491 N.Y.S.2d 90, 480 N.E.2d 679 (decided in 1985 and applying Neumeier rules outside guest-host context).

Here, a New Jersey plaintiff was injured by an automobile rented in New York and owned by a corporation doing business in New York. Applying principles enunciated in Neumeier and affirmed in Schultz, a New York court would apply New Jersey law to the issue of an automobile owner's vicarious liability. New York has no interest in permitting a New Jersey plaintiff to impose vicarious liability on the New York owner of an automobile involved in an accident in New Jersey simply because the owner is a New York domiciliary.

Plaintiff cites several cases in which New York or New Jersey courts have applied section 388 of the New York Vehicle and Traffic Law when drivers of vehicles owned by New Yorker domiciliaries cased accidents without the state. E.g., Van Dyke v. Bolves, 107 N.J.Super. 338, 258, 258 A.2d 372 (App.Div.1969); Maffatone v. Woodson, 99 N.J.Super. 559, 240 A.2d 693 (App.Div.1968); Farber v. Smolak, 20 N.Y.2d 198, 282 N.Y.S.2d 248, 229 N.E.2d 36 (1967). But in each of these cases, both the plaintiffs and the defendant-owners were domiciliaries of New York. Under principles enunciated in Neumeier and affirmed in Schultz, New York had a strong interest in applying its laws.

Plaintiff cites White v. Smith, 398 F.Supp. 130 (D.N.J.1975) for the proposition that the domicile of the plaintiff need not be controlling or even relevant to the choice of law analysis. There, a federal District Court, applying New Jersey choice of law rules and drawing upon New York cases, applied New York law regarding the vicarious liability of an automobile owner where a Pennsylvania plaintiff was injured in New Jersey by a Michigan defendant while defendant drove an automobile rented from the New York office of a national rental car company.

However accurately the White opinion stated the then choice of law rules of New Jersey, it does not state the law of New York today. The decision mentions the landmark Neumeier case only once, in a footnote, where it concludes that the rules stated in that case apply solely to guesthost disputes and that the relationship of the Neumeier parties "centered" outside New York. 398 F.Supp. at 139 n. 9. But in Schultz, the New York Court of Appeals thereafter applied the Neumeier rules outside of a guest-host context. Moreover, that decision disfavored the multi-factored "center of gravity" analysis (which gives weight to facts such as the origin and destination of defendant's automobile trip) employed in cases such as White. 65 N.Y.2d at 197, 491 N.Y.S.2d 90, 480 N.E.2d 679.

Plaintiff also cites Johnson v. Hertz, 315 F.Supp. 302 (S.D.N.Y.1970), in which the court applied ...