McCann v. Somoza

• Decision Date: 26 July 1996
• Docket Number: No. 95 Civ. 756.,95 Civ. 756.
• Citation: 933 F. Supp. 362
• Parties: Maryann E. McCANN, Plaintiff, v. Gregory D. SOMOZA and Miguel G. Somoza, Defendants.
• Court: U.S. District Court — Southern District of New York

933 F. Supp. 362

Maryann E. McCANN, Plaintiff, v. Gregory D. SOMOZA and Miguel G. Somoza, Defendants.

No. 95 Civ. 756.

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

July 26, 1996.

COPYRIGHT MATERIAL OMITTED

Robert A. Lubitz, Chestnut Ridge, NY, for plaintiff.

Rivkin, Radler & Kremer by Craig Rizzo, James P. Nunemaker, Jr., Uniondale, NY, for defendants.

MEMORANDUM DECISION

CHIN, District Judge.

In this diversity action arising out of an automobile accident that occurred in Connecticut, plaintiff Maryann E. McCann ("McCann" or "plaintiff") moves for an order declaring that the threshold contained in Connecticut's no-fault statute governs her right to seek recovery for non-economic losses, such as pain and suffering. Defendants Gregory D. Somoza and Miguel G. Somoza (together, the "Somozas" or "defendants") cross-move for a declaration that New York law governs this issue. For the reasons set forth below, I hold that the law of Connecticut governs plaintiff's ability to recover for non-economic losses.

FACTS

On August 23, 1992, while travelling on Interstate 95 in Connecticut, the car in which plaintiff was riding was allegedly struck from behind by a car driven by defendant Gregory Somoza. McCann and Gregory Somoza were both in Connecticut on pleasure trips. The car driven by Gregory Somoza was owned by defendant Miguel Somoza and was registered in the State of New York. At the time of the accident, plaintiff was domiciled in New Jersey and both defendants were domiciled in New York.

McCann sustained injuries in the accident and incurred medical expenses, which were paid by her no-fault insurance carrier.¹ She commenced this action in the District of New Jersey in July 1994; the action was transferred to this Court in December 1994.

DISCUSSION

The parties disagree as to which state's no-fault insurance law should be applied to determine whether plaintiff can recover noneconomic damages for the pain and suffering she allegedly sustained as a result of the accident. Plaintiff argues that the law of Connecticut, the locus of the accident, should govern this issue. In the alternative, plaintiff argues that, if Connecticut law is not applied, New Jersey law should govern, as she is domiciled in New Jersey. Defendants argue that the law of their domicile, New York, should govern their liability for plaintiff's non-economic losses.

A. The Conflicting No-Fault Statutes

Under the no-fault statute in effect in Connecticut at the time of the accident, a plaintiff could recover non-economic damages caused by a motor vehicle accident only if the plaintiff had suffered specified injuries or incurred medical expenses over $400. See Conn.Gen.Stat. §§ 38a-368(a), 38a-363(b)(1) (1992).² New York's no-fault law provides that plaintiffs can only recover non-economic damages when they suffer "serious injury," as defined in the statute. See N.Y.Ins.Law §§ 5104(a), 5102(d) (McKinney 1985).³ Although the parties do not dispute that McCann has incurred medical expenses in excess of $400, the parties disagree as to whether plaintiff has suffered a "serious injury." Thus, if plaintiff has not suffered a "serious injury," as defined in the New York statute, she would recover for her non-economic losses if Connecticut law is applied, but not if New York law is applied. Hence, a potential conflict of laws is presented.

A third option is to apply New Jersey law. The applicable New Jersey no-fault statute contains a threshold requirement similar to that contained in the New York statute, but it appears that plaintiff would be able to sue for non-economic damages in this case because in her insurance policy she selected an option that permits claimants to sue for pain and suffering without meeting the threshold requirements imposed by the New Jersey statute. See N.J.Rev.Stat. § 39:6A-8 (1990) (permitting election of "zero threshold" option).

B. New York's Choice-of-Law Rules

A federal court sitting in diversity is to apply the choice-of-law rules of the forum state, in this case New York. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941); AroChem Int'l, Inc. v. Buirkle, 968 F.2d 266, 269-70 (2d Cir.1992); see also Barkanic v. General Admin. of Civil Aviation of the People's Republic of China, 923 F.2d 957, 960 (2d Cir.1991) (federal courts are required to apply state choice-of-law rules where state's substantive law governs under Erie doctrine).

In the tort context, New York applies an "interest analysis to determine which of two competing jurisdictions has the greater interest in having its law applied in the litigation." Padula v. Lilarn Properties Corp., 84 N.Y.2d 519, 620 N.Y.S.2d 310, 311, 644 N.E.2d 1001, 1002 (1994); see Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 749, 191 N.E.2d 279 (1963) (rejecting automatic application of lex loci delicti, the law of the place where the tort occurred, for an approach that gives "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"). Interest analysis requires the court to determine whether the purpose of the law is to regulate conduct or to allocate losses and to identify the significant contacts among the parties and the different states involved. Padula, 620 N.Y.S.2d at 311, 644 N.E.2d at 1002.

Rules of law that regulate conduct, such as rules of the road, are generally supplied by the law of the place where the tort occurred because that state has "the greatest interest in regulating behavior within its borders." Padula, 620 N.Y.S.2d at 311, 644 N.E.2d at 1002 (citing Cooney v. Osgood Mach., Inc., 81 N.Y.2d 66, 595 N.Y.S.2d 919, 922, 612 N.E.2d 277, 280 (1993)); see Schultz v. Boy Scouts of Am., Inc., 65 N.Y.2d 189, 491 N.Y.S.2d 90, 95-96, 480 N.E.2d 679, 684-685 (N.Y.1985). Thus, Connecticut law governs the conduct that resulted in the accident giving rise to this case.

For loss-allocating rules, which limit liability after the commission of a tort, New York applies the three-part set of rules adopted in Neumeier v. Kuehner, 31 N.Y.2d 121, 335 N.Y.S.2d 64, 286 N.E.2d 454 (1972), to determine which state's law should apply. See Padula, 620 N.Y.S.2d at 312, 644 N.E.2d at 1003; see also Barkanic, 923 F.2d at 963 ("It appears to us that New York courts would now apply the Neumeier rules to all post-accident loss distribution rules...."). Rules governing an accident victim's ability to sue the car's driver and owner for pain and suffering are clearly loss-allocating, as they limit liability after the occurrence of a tort. See Padula, 620 N.Y.S.2d at 312, 644 N.E.2d at 1003 (examples of loss-allocating rules include guest statutes, wrongful death statutes, charitable immunity statutes, and contribution rules) (citations omitted).

Where the issue concerns conflicting loss-allocating rules, the significant contacts are the locus of the tort and the parties' domiciles. See Schultz, 491 N.Y.S.2d at 95, 480 N.E.2d at 684. Accordingly, the Neumeier rules provide that: (1) where the plaintiff and the defendant are domiciled in the same state, the law of that state should control; (2) where the accident occurred in a state in which only one of the parties is domiciled, and the law of that state favors that party, the law of that state will generally apply; and (3) where the plaintiff and the defendant are domiciled in different states and the accident occurred in a third state, the law of the state where the accident occurred will apply unless "it can be shown that displacing that normally applicable rule will advance the relevant substantive law purposes without impairing the smooth working of the multi-state system or producing great uncertainty for litigants." Neumeier, 335 N.Y.S.2d at 70, 286 N.E.2d at 458.

New York's choice-of-law rules also provide that a party may avoid the application of another state's law if that party can show that enforcement of the foreign law "would violate some fundamental principle of justice, some prevalent conception of good morals, or some deep-rooted tradition of the common weal as expressed in New York's Constitution, statutes and judicial decisions." Bader ex rel Bader v. Purdom, 841 F.2d 38, 40 (2d Cir.1988) (quoting Schultz, 491 N.Y.S.2d at 99, 480 N.E.2d at 687) (internal quotations omitted); see Loucks v. Standard Oil Co. of N.Y., 224 N.Y. 99, 110-11, 120 N.E. 198 (1918); accord Gray v. Busch Entertainment Corp., 886 F.2d 14, 15 (2d Cir. 1989) (noting "heavy burden" placed upon party invoking exception); Heisler, 884 F.Supp. at 132.

C. Application of the Conflict of Laws Principles

1. The Third Neumeier Rule

Here, the third Neumeier rule applies, as plaintiff is domiciled in New Jersey, defendants are domiciled in New York, and the accident occurred in Connecticut. See Schultz, 491 N.Y.S.2d at 98, 480 N.E.2d at 686 (applying third Neumeier rule where plaintiff and defendant were domiciled in different states that had conflicting loss-allocation rules and tort occurred in third jurisdiction); Heisler v. Toyota Motor Credit Corp., 884 F.Supp. 128, 131 (S.D.N.Y.1995). Under this rule, the law of Connecticut would govern unless defendants can show that applying a different state's law "will advance the relevant substantive law purposes without impairing the smooth working of the multi-state system or producing great uncertainty for litigants." Neumeier, 335 N.Y.S.2d at 70, 286 N.E.2d at 458. Hence, the purposes behind each state's law must be considered.

a. Connecticut's Statute

The basic purposes of Connecticut's no-fault statute include: guaranteeing prompt payment of benefits; reducing premiums and increasing efficiency; addressing problems with the fault system such as underpayment of large claims and overpayment of minor claims; and reducing pressure on court dockets. Shelby Mut. Ins. Co. v. Della Ghelfa, 3 Conn.App. 432, ...