Elrac LLC v. Duque

• Decision Date: 31 May 2016
• Citation: 2016 N.Y. Slip Op. 26169,52 Misc.3d 30,35 N.Y.S.3d 627
• Parties: ELRAC LLC f/k/a Elrac, Inc. d/b/a Enterprise Leasing Company a/k/a Ean Holdings, Inc., Plaintiff–Respondent, v. Jessenia DUQUE, Defendant–Appellant.
• Court: New York Supreme Court — Appellate Term

52 Misc.3d 30

35 N.Y.S.3d 627

2016 N.Y. Slip Op. 26169

ELRAC LLC f/k/a Elrac, Inc. d/b/a Enterprise Leasing Company a/k/a Ean Holdings, Inc., Plaintiff–Respondent,

v.Jessenia DUQUE, Defendant–Appellant.

Supreme Court, Appellate Term, First Department, New York.

May 31, 2016.

Cheven Keely & Hatzis, New York City (Jason Levine of counsel), for appellant.

Carman, Callahan & Ingham, LLP, Farmingdale (Michael F. Ingham of counsel), for respondent.

PRESENT: LOWE, III, P.J., HUNTER, JR., LING–COHAN, JJ.

PER CURIAM.

Judgment (Anthony Cannataro, J.), entered on or about February 26, 2015, reversed, with $30 costs, and complaint dismissed.

Defendant rented a car from plaintiff, a self-insured company commonly known as Enterprise Rent–A–Car [Enterprise]. The rental agreement provided, inter alia, that Enterprise furnishes “its renters and authorized drivers with minimum liability coverage” as required by the Vehicle and Traffic Law, including, as relevant herein, coverage of “$25,000 per accident for bodily injury.” Paragraph 8 of the rental agreement also required the renter to indemnify Enterprise for all damages incurred by Enterprise “in excess of the minimum dollar amounts required to be maintained” by Enterprise.

On July 25, 2009, defendant, who was the only authorized driver listed on the rental agreement, loaned the vehicle to one David Cedeno. While operating the vehicle, Cedeno struck and injured Juan Castillo, a bicyclist. Enterprise paid Castillo $9,000 in settlement of his personal injury claim, then sued defendant for the $9,000 it paid to Castillo. Civil Court granted judgment to Enterprise for that amount, rejecting defendant's argument that the antisubrogation rule bars the claim. Defendant appeals and we now reverse.

Section 388 of the Vehicle and Traffic Law states that the owner of a motor vehicle may be held civilly liable for any damage caused by the owner or any permissive user of the vehicle. Vehicle and Traffic Law § 370 requires rental car companies to provide insurance for their vehicles, including minimum liability coverage of $25,000 for bodily injury, and further requires that such insurance “inure to the benefit” of any permissive user of the vehicle (Vehicle and Traffic Law § 370[1][b] ). As a result of the interplay of §§ 370 and 388, a rental car company such as Enterprise is prohibited from seeking indemnification from its renter “for amounts up to the limited liability requirements” of the Vehicle and Traffic Law (Elrac, Inc. v. Ward, 96 N.Y.2d 58, 73, 724 N.Y.S.2d 692, 748 N.E.2d 1 [2001], rearg. denied 96 N.Y.2d 855, 729 N.Y.S.2d 670, 754 N.E.2d 773 [2001] ). Since the underlying claim is for a sum considerably less than the statutory minimum of $25,000, the action must be dismissed. To allow Enterprise to pass on the $9,000 cost to its insured would...