Shaw v. Coach

• Decision Date: 01 March 2011
• Parties: Frederick J. SHAW, plaintiff-respondent, v. Carolina COACH, individually and doing business as Carolina Trailways, et al., appellants, Estate of Lillian Brown, defendant-respondent.
• Court: New York Supreme Court — Appellate Division

918 N.Y.S.2d 120

82 A.D.3d 98

Frederick J. SHAW, plaintiff-respondent,

v. Carolina COACH, individually and doing business as Carolina Trailways, et al., appellants,Estate of Lillian Brown, defendant-respondent.

Supreme Court, Appellate Division, Second Department, New York.

March 1, 2011.

Fabiani Cohen & Hall, LLP, New York, N.Y. (Michele V. Ficarra of counsel), for appellants.

The Cochran Firm, New York, N.Y. (Paul A. Marber and Gerard A. Lucciola of counsel), for plaintiff-respondent.

Epstein Harms & McDonald, New York, N.Y. (Michael A. Buffa and Bruce Roth of counsel), for defendant-respondent.

PETER B. SKELOS, J.P., THOMAS A. DICKERSON, RANDALL T. ENG, and PLUMMER E. LOTT, JJ.

SKELOS, J.P.

The question presented on this appeal is which state's law regarding the issue of joint and several liability—that of New York or that of New Jersey—applies to the plaintiff's New York action to recover damages for personal injuries insofar as asserted against certain defendants who are neither domiciled in New York nor in New Jersey.

The plaintiff, a New York resident, allegedly was seriously injured when the car in which he was a passenger, and which was operated by his late mother, Lillian Brown, also a New York resident, collided with a bus allegedly owned by the defendants Carolina Coach, individually and doing business as Carolina Trailways (hereinafter Carolina Coach), and Greyhound Lines, Inc., individually and doing business as Carolina Coach (hereinafter Greyhound). The bus was operated by the defendant Edward Smith, Jr., within the scope of his employment withGreyhound. The accident occurred in New Jersey. Greyhound allegedly was incorporated in Delaware and had its principal place of business in Texas. Carolina Coach allegedly was domiciled in North Carolina. Smith was a resident of Maryland.

After commencement of this action against Carolina Coach, Greyhound, and Smith (hereinafter the appellants) and Brown's estate (hereinafter the Estate), the appellants moved, inter alia, to apply New Jersey law, specifically, NJ Stat. Ann. 2A:15-5.3, to the action. According to that statute, a plaintiff may recover the full amount of his or her damages from any party determined to be 60% or more at fault in the happening of the accident, while a party found to be less than 60% at fault is only responsible for its proportionate share of the damages ( see NJ Stat. Ann. 2A:15-5.3). The plaintiff and the Estate opposed the motion, arguing that New York law on the issue of joint and several liability was applicable. In contrast to the law of New Jersey, under New York law, a party "held liable by reason of his use, operation, or ownership of a motor vehicle" is exempt from the limited liability provisions of CPLR article 16, and thus can be held responsible for the full amount of the plaintiff's damages without regard to its percentage of fault (CPLR 1602 [6] ). The Supreme Court, agreeing with the plaintiff and the Estate, held that New York law governed the issue of joint and several liability.¹

Resolution of the question presented on this appeal is dictated by New York's choice-of-law principles ( see Tanges v. Heidelberg N. Am., 93 N.Y.2d 48, 687 N.Y.S.2d 604, 710 N.E.2d 250; Padula v. Lilarn Props. Corp., 84 N.Y.2d 519, 521, 620 N.Y.S.2d 310, 644 N.E.2d 1001). The "historical approach [ ]" to choice-of-law questions arising in tort cases in this State was to invariably apply the law of the place where the tort occurred to all substantive issues arising from the occurrence ( Matter of Allstate Ins. Co. [ Stolarz—New Jersey Mfrs. Ins. Co.], 81 N.Y.2d 219, 225, 597 N.Y.S.2d 904, 613 N.E.2d 936; see Cooney v. Osgood Mach., 81 N.Y.2d 66, 71-72, 595 N.Y.S.2d 919, 612 N.E.2d 277; Babcock v. Jackson, 12 N.Y.2d 473, 477, 240 N.Y.S.2d 743, 191 N.E.2d 279). "[D]espite the advantages of certainty, ease of application and predictability" which that rule afforded, the Court of Appeals long agorejected this approach, largely because it failed to take any account of the underlying purposes of the conflicting laws, and the corresponding interests possessed by other relevant jurisdictions ( Babcock, 12 N.Y.2d at 478, 481, 240 N.Y.S.2d 743, 191 N.E.2d 279; see Miller v. Miller, 22 N.Y.2d 12, 15, 290 N.Y.S.2d 734, 237 N.E.2d 877). The traditional rule has therefore been replaced by a more flexible "interest analysis," under which "the law of the jurisdiction having the greatest interest in resolving the particular issue" is given controlling effect ( Cooney, 81 N.Y.2d at 72, 595 N.Y.S.2d 919, 612 N.E.2d 277; see Schultz v. Boy Scouts of Am., 65 N.Y.2d 189, 196-197, 491 N.Y.S.2d 90, 480 N.E.2d 679; Padula, 84 N.Y.2d at 521, 620 N.Y.S.2d 310, 644 N.E.2d 1001; Babcock, 12 N.Y.2d at 481, 240 N.Y.S.2d 743, 191 N.E.2d 279).

In applying the interest analysis, a "distinction [is made] between laws that regulate primary conduct (such as standards of care) and those that allocate losses after the tort occurs" ( Cooney, 81 N.Y.2d at 72, 595 N.Y.S.2d 919, 612 N.E.2d 277; see Padula, 84 N.Y.2d at 521, 620 N.Y.S.2d 310, 644 N.E.2d 1001; DeMasi v. Rogers, 34 A.D.3d 720, 826 N.Y.S.2d 106; King v. Car Rentals, Inc., 29 A.D.3d 205, 209, 813 N.Y.S.2d 448). If the conflicting laws regulate conduct, the law of the place of the tort "almost invariably obtains" because "that jurisdiction has the greatest interest in regulating behavior within its borders" ( Cooney, 81 N.Y.2d at 72, 74, 595 N.Y.S.2d 919, 612 N.E.2d 277). If, as in the present case, "competing 'postevent remedial rules' are at stake, other factors are taken into consideration," principal among which is the location of the parties' domiciles ( id. at 72, 595 N.Y.S.2d 919, 612 N.E.2d 277).

In weighing the relevant considerations where conflicting loss-allocating laws are implicated, the courts are guided by a series of principles set forth in Neumeier v. Kuehner (31 N.Y.2d 121, 335 N.Y.S.2d 64, 286 N.E.2d 454; see Cooney, 81 N.Y.2d at 73, 595 N.Y.S.2d 919, 612 N.E.2d 277; King, 29 A.D.3d 205, 813 N.Y.S.2d 448). The first Neumeier principle pertains where the parties share a common domicile, and provides that the law of the parties' domicile controls in that instance ( see Cooney, 81 N.Y.2d at 73, 595 N.Y.S.2d 919, 612 N.E.2d 277;Neumeier, 31 N.Y.2d at 128, 335 N.Y.S.2d 64, 286 N.E.2d 454). Here, the plaintiff and the appellants do not share a common domicile.² The second Neumeier principle operatesto protect a defendant from exposure to liability under the law of the plaintiff's domicile where the conduct occurred in the defendant's state of domicile, and conversely, to prevent an out-of-state defendant from avoiding liability imposed under the laws of the plaintiff's state of domicile where the injury occurred in that state ( see Cooney, 81 N.Y.2d at 73, 595 N.Y.S.2d 919, 612 N.E.2d 277; Neumeier, 31 N.Y.2d at 128, 335 N.Y.S.2d 64, 286 N.E.2d 454). This principle is not applicable in the instant case because the appellants do not seek to apply the law of their domiciles, and the conduct and injury did not occur in the state of any party's domicile. Accordingly, as all of the parties to this appeal correctly acknowledge, the question presented in this case is governed by the third Neumeier principle, which is applicable to split domicile cases not within the purview of the second rule. This principle provides:

" 'Normally, the applicable rule of decision will be that of the state where the accident occurred but not if 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, 31 N.Y.2d at 128, 335 N.Y.S.2d 64, 286 N.E.2d 454, quoting Tooker v. Lopez, 24 N.Y.2d 569, 585, 301 N.Y.S.2d 519, 249 N.E.2d 394; see Cooney, 81 N.Y.2d at 74, 595 N.Y.S.2d 919, 612 N.E.2d 277).

The appellants contend that, under this principle, New Jersey law must be applied because there are no "special circumstances" which would require displacement of the default, lex loci delicti rule. While the appellants, focusing on the phrase "special circumstances" in this Court's decision in Reale v. Herco, Inc. (183 A.D.2d 163, 169, 589 N.Y.S.2d 502), essentially characterize the third Neumeier principle as imposing merely a "special circumstances" test, that approach oversimplifies the analysis, and this Court's decision in Reale. In applying the third Neumeier principle, this and other Courts, in decisions including Reale, have analyzed the purposes of each state's rule, and, taking into account the workings of the multistate system and the need for certainty, have determined whether, in light of those purposes, the interest of the state in which the tort occurred was outweighed by the interest of another affected state (usually, the domicile state of one party) ( see Schultz, 65 N.Y.2d at 201-202, 491 N.Y.S.2d 90, 480 N.E.2d 679; King, 29 A.D.3d 205, 813 N.Y.S.2d 448; Reale, 183 A.D.2d at 169-171, 589 N.Y.S.2d 502). Indeed while the Neumeier principles provide a framework for applyingchoice-of-law principles, the overarching inquiry is "which of two competing jurisdictions has the greater interest in having its law applied in the litigation" ( Padula, 84 N.Y.2d at 521, 620 N.Y.S.2d 310, 644 N.E.2d 1001 [1994] ).

Thus, the analysis begins with an examination of the purposes of the relevant conflicting laws. In New York, under the common law, tortfeasors were jointly and severally liable, allowing a plaintiff to recover the entire amount of damages awarded to him or her from any one of the joint tortfeasors ( see Siler v. 146 Montague Assoc., 228 A.D.2d 33, 37, 652 N.Y.S.2d 315; Musco v. Conte, 22 A.D.2d 121, 254 N.Y.S.2d 589). CPLR article 16 was enacted to modify the common law rule. It was "the product of a painstaking balance of interests," which "included, among many others, the burdens to be imposed on innocent plaintiffs as well as a concern that defend...