Feldman v. Acapulco Princess Hotel

• Decision Date: 24 July 1987
• Citation: 520 N.Y.S.2d 477,137 Misc.2d 878
• Parties: George and Delores FELDMAN, Plaintiffs, v. ACAPULCO PRINCESS HOTEL, Defendants.
• Court: New York Supreme Court

Page 477

520 N.Y.S.2d 477

137 Misc.2d 878

George and Delores FELDMAN, Plaintiffs, v. ACAPULCO PRINCESS HOTEL, Defendants.

Supreme Court, New York County IAS 20.

July 24, 1987.

Lipsig, Sullivan & Liapakis, P.C. (Howard M. Goldstein and Robert C. Shenfeld, New York City, of counsel), for plaintiffs.

Bigham Englar Jones & Houston (Neil E. Higgins, New York City, of counsel), for defendants.

KRISTIN BOOTH GLEN, Judge.

This case presents a simple question of first impression and broad application whose resolution requires exegesis of an exceptionally complicated body of law. The question is whether, absent extraordinary circumstances, the law of the place of a tort governs the issue of damages in a personal injury action arising out of that tort. The answer requires a close reading not only of New York cases, and federal cases purporting to interpret and apply New York law, but also of scholarly controversy which has arisen out of the "conflicts of law revolution" which began with the New York Court of Appeals decision in Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E.2d 279 (1963).

FACT AND PROCEDURAL POSTURE OF THE CASE

Plaintiff George Feldman sues for damages incurred as a result of an accident which he sustained using a slide into the salt-water pool of the Acapulco Princess Hotel in February, 1981. In addition to damages for pain and suffering and lost income, Feldman alleges special damages for hospital and medical costs in excess of $29,000.00. Plaintiff Delores Feldman, his wife asserts a derivative claim. Both plaintiffs are residents of the state of New York, and the defendants are residents of, and incorporated under the laws of Mexico.

Prior to jury selection, the parties were requested to brief the choice of law questions presented as to both liability and damages in this case. All parties have agreed that, as to liability, the law of Mexico must be applied. There is, however, sharp dispute as to whether the law of New York or the law of Mexico should control as to damages.

Applicable Mexican law (contained in the Civil Code of Guerrero state, and identical to that of the Federal District of Mexico, designated as Article 1910, 1912, 1915, 1916, 1918, and the Mexican Federal Labor Law Article 500, 501, 502 and 503) provides for limitations on damages for disability and for pain and suffering (denominated "moral damages" under Mexican law) which in this case would limit the plaintiff to recovery in the amount of $5,256.00. Under New York law there is no limitation on recovery either for permanent disability or for pain and suffering. Defendants argue that the law of the place of the tort controls the issue of damages, citing several New York cases. Plaintiff argues that a limitation of the amount which would be imposed in this case is contrary to New York's policy of justly compensating its residents for injury, and cites federal cases applying New York law for that proposition.

Based on the papers submitted by both sides on this in limine motion, and for all the reasons discussed below, I find that the law of Mexico must apply to the issue of damages in this case. Because the New York case law language which supports defendants' position does not occur in cases involving tort damages, and because the whole question of the applicable rules in New York choice of law cases is somewhat in flux, separate analysis will be made of the cited New York decisions, the trends in New York choice of law doctrine since Babcock, federal decisions from the Southern District and the Second Circuit concerning

damages in tort cases, and the result of almost twenty-five years of judicial and scholarly controversy as to choice of law questions. The result of this analysis compels the principled and consistent application of a set of clearly defined rules which have been proposed by our highest court during this period of confusion, experimentation, and creativity.

NEW YORK CASES

The Court of Appeals has decided several post-Babcock cases in which a choice-of-law question as to compensatory damages was raised in a non-tort setting. Leading among these is James v. Powell, 19 N.Y.2d 249, 279 N.Y.S.2d 10, 225 N.E.2d 741 (1967) which involved the alleged fraudulent conveyance of property in Puerto Rico for purposes of frustrating enforcement of a judgment. In broad strokes the Court wrote

--[I]t is clear that the measure of compensatory damages is determined by the same law under which the cause of action arises. (see Long v. Pan American World Airways, 16 N.Y.2d 337, 343 [266 N.Y.S.2d 513, 213 N.E.2d 796]; Davenport v. Webb, 11 N.Y.2d 392 [230 N.Y.S.2d 17, 183 N.E.2d 902] ), ... an award of compensatory damages depends upon the existence of wrong doing--in this case an issue for resolution under the lex situs of the property alleged to have been fraudulently conveyed. ¹ Pd., p. 259 [279 N.Y.S.2d 10, 225 N.E.2d 741]

In Hacohen v. Bolliger, Ltd., 108 A.D.2d 357, 489 N.Y.S.2d 75 (1st Dept.1985), the First Department also applied the law of the state whose law gave rise to liability to determine the measure of damages. In that case, involving warehouse bills of lading and the liability of a bailee for loss of property, the court first found that the law of Connecticut applied to the issue of liability. After granting partial summary judgment to the plaintiff based on its reading of Connecticut law, it proceeded, without discussion, to hold that the Connecticut law of damages would also apply. ²

Both of these cases, holding that the law by which liability is determined also governs damages, would appear to strongly support the finding that Mexican law as to damages governs in the instant action. However, since the cases do not involve tortious accidents, since there is language in other New York cases which could be read to indicate that New York has a strong policy in insuring complete recovery for its residents, and because there are federal cases to the contrary, a review of the development of choice-of-law over the past twenty-five years, with particular emphasis on New York, must be undertaken so as to ground more firmly the choice of law reached here.

THE DEVELOPMENT OF MODERN CHOICE OF LAW JURISPRUDENCE

Traditional conflict-of-law theory in the United States reflected the tension between the doctrine of comity, associated particularly with the writings of Justice Story, see, e.g. J. Story, Commentaries on the Conflicts of Laws, Foreign and Domestic Sections 33, 36, 38 (4th Ed.1852), and the notion of "vested rights" developed in large part by Joseph Beale during the early A public policy exception arose in order to ameliorate arbitrary or inappropriate results under the vested rights or comity theories. Under this exception, a foreign state might refuse to apply the foreign law of lex loci delicti where application of that foreign law would injure its own citizens. See, e.g., Hilton v. Guyot, 159 U.S. 113, 164, 16 S.Ct. 139, 143, 40 L.Ed. 95 (1895). The public policy exception, however, lacked a clear analytical base, and was subject to criticism by the commentators who struggled to find a new basis which would more adequately reflect both the realities of modern life and the increasing importance of the domicile of the parties.

                1900's. 3  Under these theories, the rule of lex loci --the law of the place where the act in question occurred--was controlling.  With massive industrialization, and rapid advances in transportation and communication, the transactions or activities in which people engaged began frequently to transcend state and even national borders.  Under these circumstances, more than one sovereignty might well have an interest in a dispute, and indeed the location of the occurrence giving rise to liability might be little more than fortuitous
                

With the demise of the underpinnings for the vested rights and comity theories of choice-of-law, a bewildering number of new theories, each with its own academic sponsor, arose. Among these were the "governmental interest analysis" first advanced by Professor Brainerd Currie in the late 1950's, the "in most significant relationship" theory of the Second Restatement, propounded primarily by Professor Willis L.M. Reese, and the "choice-influencing considerations" theory propounded primarily by Professor Robert A. Leflar. ⁴

Professor Hill has described the impact of these various theories on the judicial decision making process as follows:

"... what has emerged on the judicial plain is chaos. Different courts have had their favorite scholars, with occasional shifting of allegiances, notwithstanding inconsistent views propounded in these writings ... [W]hat the judges have undertaken, on pain of academic derision if they clench, is a task comparable to the re-invention of the wheel, only more complicated" Hill, The Judicial Function in Choice-of-Law, 85 Colum.L.Rev. 1585, 1600 (1985) (footnote omitted) ("Hill").

New York was the first state to clearly reject the rigid lex delicti rules, initially adopting a "center of gravity" or "grouping of contacts" theory of conflicts in contracts actions, Auten v. Auten, 308 N.Y. 155, 160, 124 N.E.2d 99 (1954) and then in torts, Babcock, supra. A series of subsequent Court of Appeals decisions, all involving choice-of-law questions in guest statute cases, demonstrated disagreement over the meaning of the Babcock approach. ⁵ In these, and other choice-of-law cases decided at around the same time, it appeared that the test applied by the New York Court, especially under the leadership of Judge Keating, had shifted to Professor Currie's governmental interest analysis.

In Neumeier, supra, Chief Judge Fuld, who had dissented in Dym and concurred in Tooker, noted the difficulties which had arisen from the court's somewhat meandering post-Babcock path. He described the Babcock court's "sacrifice [of] the certainty The single all-encompassing rule which called, inexorably, for selection of the law of the...