Milkovich v. Saari

• Decision Date: 05 January 1973
• Docket Number: No. 43667,43667
• Parties: Anne L. MILKOVICH, Respondent, v. Erma SAARI, et al., Appellants.
• Court: Minnesota Supreme Court

Page 408

203 N.W.2d 408

295 Minn. 155

Anne L. MILKOVICH, Respondent, v. Erma SAARI, et al., Appellants.

No. 43667.

Supreme Court of Minnesota.

Jan. 5, 1973.

Syllabus by the Court

1. The doctrine of 'lex loci' has been replaced in many states during the last decade. The evolution of a new standard has been led by the cases of Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E.2d 279, 95 A.L.R.2d 1 (1963), and Clark v. Clark, 107 N.H. 351, 222 A.2d 205 (1966). The writings of Professor Robert Leflar were the basis for these new court decisions.

2. Minnesota has abandoned the doctrine of 'lex loci' and has based its change primarily on the case law of New York and New Hampshire. In dealing with choice-of-law problems, Minnesota has chosen a methodology of anaysis rather than a series of rules.

3. Minnesota will follow the 'better-law' concept in choice-of-law situations.

4. Simplification of the judicial task, predictability of results, and maintenance of international and interstate relations are of relatively little improtance in tort cases where the competing rules are the common-law rules of negligence and a guest statute.

5. The compelling considerations are the advancement of the forum's legitimate governmental interests and application of the better law. Both factors lead to application of the common-law rules of negligence of Minnesota rather than the Ontario guest statute.

6. Strong support for the 'better-law' concept can be found in decisions of other states and in the writings of various authorities on this subject.

7. The facts of this case permit the application of the 'better-law' concept, and the nonresident plaintiff shall be allowed to sue the nonresident defendants in Minnesota and have the Minnesota common law of negligence apply rather than the guest statute of Ontario, the residence of all parties.

Lindquist & Vennum and Daryle L. Uphoff, Minneapolis, for appellants.

Palmer, Hood, Crassweller & McCarthy, Duluth, for respondent.

Heard and considered en banc.

TODD, Justice.

Defendants appeal from an order of the trial court denying their motion to dismiss plaintiff's complaint for failure to state a cause of action because the law of Ontario, where plaintiff and defendants reside, has a guest statute requiring proof of gross negligence, which was not alleged. Defendants further appeal from the granting of plaintiff's motion to strike their affirmative defense that the law of Ontario should apply. The trial court certified the question as important and doubtful. We affirm.

Plaintiff and both defendants are residents of Thunder Bay (formerly Port Arthur), Ontario, Canada. On November 8, 1968, they left Thunder Bay for Duluth, Minnesota, to shop and attend a play. The car belonged to defendant Erma Saari, who drove the first part of the trip. At the United States Customs House at Pigeon River, Minnesota, defendant Judith Rudd took over the driving, and about 40 miles south of the border the car left the road and crashed into rock formations adjacent to the road, causing the injuries to plaintiff. Plaintiff was hospitalized at Duluth for approximately 1 1/2 months and thereafter returned to her home in Thunder Bay.

Defendant Saari's automobile was garaged, registered, and insured in the Province of Ontario, Canada. Ontario has a guest statute, and if the law of Ontario is to be applied to this case, plaintiff would have to establish gross negligence in order to recover. Minnesota does not have a guest statute, and the rulings of the court would be correct if Minnesota law is to apply.

1. The field of 'conflict of laws' in tort matters has undergone dramatic change in the last decade. Prior to that time, most courts were willing to accept the doctrine of 'lex loci,' which proved to be easy to administer since the happening of an accident in any particular forum established that the law of the place of the accident would apply. Criticism of this entrenched doctrine mounted from all sides. The issue was met head on in Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E.2d 279, 95 A.L.R.2d 1 (1963). There the New York Court of Appeals, in an opinion by Mr. Justice (now Chief Justice) Fuld, held that where plaintiff was a New York resident and commenced a trip in the State of New York with the defendant, a New York resident, and was involved in an accident in Ontario, Canada, plaintiff was entitled to have her claim decided under the law of the State of New York. The legislature of New York had rejected the guest statute, which was the law of Ontario and the law of the place of the accident. The decision was premised on the doctrine that New York had the most significant contacts with the litigants and that consequently New York law should apply. The court further held that the law of Ontario, the place of the accident, should not apply, since Ontario had no significant contact with the litigants.

Application of Babcock to different fact situations has been confusing. The Babcock decision left open the question of the manner of determining each state's interest in a particular situation, and it did not discuss the issues of whether the relationship of the parties is established at the commencement of the trip and whether the relationship continues to be governed by the law of the state in which it was established or changes as state or international lines are crossed. This confusion is best illustrated in Dym v. Gordon, 16 N.Y.2d 120, 262 N.Y.S.2d 463, 209 N.E.2d 792 (1965). In that case, plaintiffs were both New York residents and students in Colorado. They met in Colorado and the plaintiff was injured in an automobile accident in which she alleged the defendant was negligent. New York again had no guest statute, but Colorado did. The New York court in a divided opinion held that the Colorado law was applicable and placed emphasis on the fact that the parties met in Colorado and established their relationship as guest and host in Colorado. This seemed to introduce a new doctrine, namely 'seat of the relationship,' into the law. This doctrine was short-lived and was apparently put to rest in Macey v. Rozbicki, 18 N.Y.2d 289, 274 N.Y.S.2d 591, 221 N.E.2d 380 (1966). In Macey the New York court shifted the emphasis away from the seat of the relationship and seemed to focus more on the common domicile of guest and host as determinative of the applicable law. In a concurring opinion Mr. Justice Keating more forcefully argued that the court 'should no longer follow the decision in Dym v. Gordon (supra).' 18 N.Y.2d 298, 274 N.Y.S.2d 598, 221 N.E.2d 385.

Finally, the New York court was confronted with the exact factual situation we have in this case. In Kell v. Henderson, 47 Misc.2d 992, 263 N.Y.S.2d 647 (1965), affirmed, 26 A.D.2d 595, 270 N.Y.S.2d 552 (1966), the New York Supreme Court allowed the plaintiff to proceed under New York law, and the Appellate Division affirmed. In that case, the plaintiff, a minor child, in the company of the two defendants, a mother and son, set out from Ontario, Canada, to tour nearby New York. The plaintiff and the defendants were all residents of Ontario. The car was garaged in Ontario and insured in Ontario. While being driven in New York by the defendant son, the car went out of control and careened off the highway, striking a bridge and injuring Miss Kell. The defendants in that case argued that under the Babcock decision the most significant interests were in Ontario and not New York and therefore the plaintiff could not recover by reason of the Ontario guest statute. The New York Supreme Court, after pointing out that the state had significant interests by reason of its traffic vehicle regulations, its public policy regarding guest statutes, and the fact that its laws applied to residents and nonresidents equally, stated (47 Misc.2d 993, 263 N.Y.S.2d 649):

'The conflict-of-laws doctrine enunciated in Babcock (supra) recognizes that we no longer mechanically turn to the common-law rule of Lex loci delicti in tort cases. The courts now have adopted a rule of choice of law in a conflict situation which looks to reason and justice in its selection of which law is to apply and which fits the needs of today's changing world where frequent travel is the rule, rather than the exception.'

This case would seem to have completed the cycle for New York in moving fully away from the lex loci doctrine. However, in Arbuthnot v. Allbright, 35 A.D.2d 315, 316 N.Y.S.2d 391 (1970), the New York Supreme Court, Appellate Division, again sitting in the same division but with different justices, sought to distinguish Kell v. Henderson, Supra, on a procedural issue which, in fact, was an Additional basis for the decision which had been advanced in concurring opinions in both the lower court and the appellate division. Under the facts of Arbuthnot, which are indistinguishable from the facts in Kell, the court held that the Ontario law should apply. The New York Court of Appeals has apparently not yet acted on this conflict but hopefully will dispose of the conflicting cases and probably reverse the Arbuthnot case and support the Kell decision, not only because of the shallowness of the opinion in Arbuthnot, but also because of the substantial backing Kell has received from various law commentators and professors. ¹

While New York was experiencing its difficulties in the changing field of conflict of laws, a fact situation arose in a case appealed to the Supreme Court of New Hampshire, which allowed its learned Mr. Chief Justice Kenison to enunciate a doctrine which has been followed by many courts throughout the country, including our own Minnesota court. In Clark v. Clark, 107 N.H. 351, 222 A.2d 205 (1966), a husband and wife had left their home in New Hampshire to proceed to another part of New Hampshire for a visit and were to return that evening. Part of their trip took them through Vermont, where the accident occurred. The plaintiff...