Cooney v. Osgood Machinery, Inc.

• Decision Date: 25 March 1993
• Citation: 612 N.E.2d 277,81 N.Y.2d 66,595 N.Y.S.2d 919
• Parties: , 612 N.E.2d 277, Prod.Liab.Rep. (CCH) P 13,497 Dennis J. COONEY, Plaintiff, v. OSGOOD MACHINERY, INC., Defendant and Third-Party Plaintiff-Appellant. Paul Mueller Company, Third-Party Defendant-Respondent; Hill Acme Company, Third-Party Defendant-Appellant, et al., Third-Party Defendants.
• Court: New York Court of Appeals Court of Appeals

Page 919

595 N.Y.S.2d 919

81 N.Y.2d 66, 612 N.E.2d 277,

Prod.Liab.Rep. (CCH) P 13,497

Dennis J. COONEY, Plaintiff, v. OSGOOD MACHINERY, INC., Defendant and Third-Party

Plaintiff-Appellant.

Paul Mueller Company, Third-Party Defendant-Respondent;

Hill Acme Company, Third-Party Defendant-Appellant, et al.,

Third-Party Defendants.

Court of Appeals of New York.

March 25, 1993.

[81 N.Y.2d 68] [612 N.E.2d 278] Smith, Murphy & Schoepperle, Buffalo (Victor Alan Oliveri and Bonnie T. Hager, of counsel), for defendant and third-party plaintiff-appellant.

Bouvier, O'Connor, Buffalo (Chris G. Trapp, of counsel), for third-party defendant-appellant.

[81 N.Y.2d 69] Hurwitz & Fine, P.C., Buffalo (Sheldon Hurwitz, of counsel), for third-party defendant-respondent.

OPINION OF THE COURT

KAYE, Chief Judge.

The issue on this appeal is whether a Missouri statute barring contribution claims against an employer--which conflicts with New York law permitting such claims--should be given effect in a third-party action pending here. Applying relevant choice of law principles, we conclude that the Missouri workers' compensation statute should be given effect, and therefore affirm the dismissal of the third-party complaint seeking contribution against a Missouri employer.

I.

The facts relevant to this appeal are essentially undisputed. In 1957 or 1958, Kling Brothers, Inc. (succeeded in interest by third-party defendant Hill Acme Co.) manufactured a 16-foot wide "Pyramid Form Bending Roll," a machine to shape large pieces of metal. The device was sold in 1958 to a Buffalo company, American Standard Inc., through a New York sales agent, defendant Osgood Machinery, Inc., which assisted American in the setup and initial operation of the machine. American closed its Buffalo plant around 1961, and the history of the bending roll is obscured until 1969, when Crouse Company--which obtained the equipment in some unknown manner--sold the machine to Paul Mueller Co., a Missouri domiciliary.

Mueller installed the bending roll in its Springfield, Missouri, plant and subsequently modified it by adding a foot switch. In October 1978, plaintiff Dennis J. Cooney, a Missouri resident working at the Missouri plant, was injured while cleaning the machine. The machine was running at the time--a piece of wood having been wedged in the foot switch--and Cooney was unable to reach the switch to stop the machine and avoid injury.

In Missouri, Cooney filed for and received workers' compensation benefits. Because under Missouri law an employer providing such benefits "shall be released from all other liability * * * whatsoever, whether to the employee or any other person" (Mo.Rev.Stat. § 287.120[1], he could not additionally sue his employer, Mueller, in tort. Cooney did, however, bring a products liability action against Osgood--the machine's initial sales agent--in Supreme Court, Erie County. (Missouri apparently would not have had personal jurisdiction over Osgood.)

Seeking contribution from parties it deems more culpable in the event it is found liable to Cooney, Osgood brought a third-party action against Mueller, American Standard, and Hill Acme. Mueller invoked the Missouri statute shielding employers from both direct claims by employees and contribution claims by others, and moved for summary judgment dismissing Osgood's third-party complaint. In light of the conflict between the Missouri statute and New York law permitting contribution claims against employers, Supreme Court undertook a choice of law analysis and concluded that New York law should apply. The Appellate Division unanimously reversed and dismissed the third-party complaint as well as all cross claims against Mueller. 179 A.D.2d 240, 582 N.Y.S.2d 873. We now affirm.

II.

An inevitable consequence of a mobile society, where people and goods routinely cross State and national borders, is that disputes may implicate the interests of several jurisdictions having conflicting laws. Choice of law principles become relevant, however, only when a State can, consistent with the Full Faith and Credit and Due Process Clauses of the Constitution (U.S. Const., art. IV, § 1; 14th Amend., § 1), choose between the conflicting laws. A State may lack sufficient nexus with a case so that choice of its law is arbitrary or fundamentally unfair (Phillips Petroleum Co. v. Shultz, 472 U.S. 797, 818, 105 S.Ct. 2965, 86 L.Ed.2d 628; Allstate Ins. Co. v. Hague, 449 U.S. 302, 312-313, 101 S.Ct. 633, 639-640, 66 L.Ed.2d 521; Schultz v. Boy Scouts, 65 N.Y.2d 189, 202-203, n. 4, 491 N.Y.S.2d 90, 480 N.E.2d 679). Mueller argues that New York's connection with the case is so tenuous that a decision to apply New York contribution law would be unconstitutional.

In Hague, the Supreme Court upheld the Minnesota high court's decision to interpret an automobile insurance policy under Minnesota law instead of under contrary Wisconsin precedent. The policy was issued to a Wisconsin domiciliary, who was a passenger on a motorcycle operated by a Wisconsin resident when he was struck and killed--in Wisconsin--by an automobile driven by another Wisconsin resident. Nevertheless, the Supreme Court plurality found that three contacts with Minnesota, in the aggregate, were sufficient to generate an adequate Minnesota interest in the case: the decedent was employed in Minnesota; his wife, the appointed representative of the estate, subsequently moved to Minnesota; and the insurance company was at all times present and doing business in Minnesota (449 U.S. at 313-319, 101 S.Ct. at 640).

Similarly, New York's contacts with the present case are, in the aggregate, sufficient to satisfy the constitutional threshold. Osgood has alleged that Mueller has a substantial presence in this State, and there is indication in the record that Mueller does business in New York. ¹ Additionally, Osgood, which seeks contribution under New York law, is a domiciliary of this State. Finally, Osgood's alleged tortious conduct with respect to the machine arose in New York, where the machine was ordered, operated for several years, and eventually shipped out of State.

We conclude, therefore, that this State has sufficient interest in the litigation so that if we chose to apply New York law on the contribution issue, that decision would not run afoul of the Federal Constitution. Accordingly, we turn to a choice of law analysis.

III.

The traditional approach to choice of law problems arising in tort was simply to apply lex loci delicti, the law of the place of the tort, to all substantive issues in the case (see, e.g., Poplar v. Bourjois, 298 N.Y. 62, 66, 80 N.E.2d 334; Restatement of Conflict of Laws §§ 377-390). The theoretical underpinning of that rule was the vested rights doctrine: the right to recover in tort is created by, and exists solely to the extent of, the law of the jurisdiction where the injury occurred (Babcock v. Jackson, 12 N.Y.2d 473, 477-478, 240 N.Y.S.2d 743, 191 N.E.2d 279).

Although the vested rights doctrine did have the salutary characteristics of predictability and ease of application, it failed to accord any significance to the policies underlying the conflicting laws of other jurisdictions (see, Babcock, 12 N.Y.2d, at 478, 240 N.Y.S.2d 743, 191 N.E.2d 279; Miller v. Miller, 22 N.Y.2d 12, 15, 290 N.Y.S.2d 734, 237 N.E.2d 877). Thus in Babcock the Court adopted a more flexible approach intended to give "controlling effect to the law of the jurisdiction which, because of its relationship or contact with the occurrence or the parties, has the greatest concern with the specific issue raised in the litigation." (Babcock, 12 N.Y.2d, at 481, 240 N.Y.S.2d 743, 191 N.E.2d 279).

Of the various, sometimes competing, schools of thought on choice of law, the one that emerged as most satisfactory was "interest analysis," which sought to effect the law of the jurisdiction having the greatest interest in resolving the particular issue (see, Schultz v. Boy Scouts, 65 N.Y.2d 189, 197, 491 N.Y.S.2d 90, 480 N.E.2d 679 supra; Miller v. Miller, 22 N.Y.2d 12, 15-16, 290 N.Y.S.2d 734, 237 N.E.2d 877 supra ). An immediate distinction was drawn between laws that regulate primary conduct (such as standards of care) and those that allocate losses after the tort occurs (such as vicarious liability rules). If conflicting conduct-regulating laws are at issue, the law of the jurisdiction where the tort occurred will generally apply because that jurisdiction has the greatest interest in regulating behavior within its borders. But if competing "postevent remedial rules" are at stake other factors are taken into consideration, chiefly the parties' domiciles (see, Schultz v. Boy Scouts, 65 N.Y.2d, at 197-199, 491 N.Y.S.2d 90, 480 N.E.2d 679; Babcock, 12 N.Y.2d, at 483, 240 N.Y.S.2d 743, 191 N.E.2d 279).

Babcock itself involved a loss distribution rule--an Ontario guest statute limiting an automobile passenger's ability to recover from the driver--as did subsequent cases (Dym v. Gordon, 16 N.Y.2d 120, 262 N.Y.S.2d 463, 209 N.E.2d 792 [Colorado guest statute]; Long v. Pan Am. World Airways, 16 N.Y.2d 337, 266 N.Y.S.2d 513, 213 N.E.2d 796 [conflicting Maryland and Pennsylvania laws governing wrongful death recoveries]; Macey v. Rozbicki, 18 N.Y.2d 289, 274 N.Y.S.2d 591, 221 N.E.2d 380 [Ontario guest statute]; Farber v. Smolack, 20 N.Y.2d 198, 282 N.Y.S.2d 248, 229 N.E.2d 36 [vicarious liability]; Miller v. Miller, 22 N.Y.2d 12, 290 N.Y.S.2d 734, 237 N.E.2d 877 [Maine statute limiting wrongful death damages to $20,000]; Tooker v. Lopez, 24 N.Y.2d 569, 301 N.Y.S.2d 519, 249 N.E.2d 394 [Michigan guest statute].

In Neumeier v. Kuehner, 31 N.Y.2d 121, 335 N.Y.S.2d 64, 286 N.E.2d 454, yet another guest statute case, the Court in seeking to return greater predictability and uniformity to the law, adopted a series of three rules that had been proposed by Chief Judge Fuld (see, Tooker v. Lopez, 24 N.Y.2d, at 585, 301 N.Y.S.2d 519, 249 N.E.2d 394, [Fuld, Ch....