The defendants move for summary judgment.
This case presents a novel choice of law question.
The plaintiff, a New Jersey resident, was injured when she was struck by an automobile leased by the defendant, Dollar Systems,
Inc., doing business as Dollar Rent A Car, (Dollar) Newark, New Jersey, to the defendant, John Bosco Cedeno, a resident of Florida. The accident occurred in New Jersey. The owner of the vehicle, Dollar Systems, Inc., is a Delaware corporation with its principal place of business in New York. Dollar registered and insured the vehicle in New York. The parties executed the lease agreement at the Dollar Rent A Car Agency in Newark.
Dollar now moves for summary judgment contending that, under New Jersey law, it is not vicariously liable to the plaintiff because the plaintiff has failed to demonstrate an agency relationship with the lessor of the vehicle, a requirement under New Jersey law. New Jersey follows the common law, which provides that an automobile owner who loans or rents his vehicle to another is not vicariously liable for the bailee's negligence unless the driver is the agent or employee of the owner. Zuppa v. Hertz Corp., 111 N.J. Super. 419, 268 A.2d 364 (Law Div.1970).
The plaintiff concedes that she cannot prove an agency relationship, but relies on a New York statute which imposes vicarious liability on the owner of a vehicle irrespective of whether an agency relationship exists between the owner and driver. That statute provides:
Every owner of a vehicle used or operated in this state shall be liable and responsible for death or injuries to person or property resulting from negligence in the use or operation of such vehicle, in the business of such owner or otherwise, by any person using or operating the same with the permission, express or implied, of such owner . . . .
[N.Y. Vehicle and Traffic Law, McKinney's § 388 (Consol. (1986))]
If the New York statute is applied in this case, the plaintiff may maintain an action against Dollar even though the plaintiff is unable to establish an agency relationship. If New Jersey law is applied, the court must grant the defendant's motion and dismiss the plaintiff's complaint.
New Jersey has adopted a governmental interest analysis approach to choice of law problems. This governmental interest analysis was first expressed by the New York Court of Appeals in
the case of Babcock v. Jackson, 12 N.Y. 2d 473, 240 N.Y.S. 2d 743, 191 N.E. 2d 279 (1963). In that case, the plaintiff, a New York resident, brought suit in New York against a New York defendant for injuries she sustained while a passenger in the defendant's automobile, which was involved in an accident in Canada. The defendant contended that the plaintiff was barred from bringing suit against him because of Canada's guest statute which granted hosts immunity from suits for injuries sustained in auto accidents by their guest passengers.
The New York Court of Appeals repudiated the lex loci delicti, which applies the law of the place of the wrong, and adopted a theory based on interests and contacts, concluding that Canada's guest statute should not be applied. With regard to contacts, the court stated:
The present action involves injuries sustained by a New York guest as the result of the negligence of a New York host in the operation of an automobile, garaged, licensed and undoubtedly insured in New York, in the course of a week-end journey which began and was to end there. In sharp contrast, Ontario's sole relationship with the occurrence is the purely adventitious circumstance that the accident occurred there.
[ Id. 240 N.Y.S. 2d at 750, 191 N.E. 2d at 284.]
With regard to the policy criteria, the court held:
New York's policy of requiring a tort-feasor to compensate his guest for injuries caused by his negligence cannot be doubted -- as attested by the fact that the Legislature of this State has repeatedly refused to enact a statute denying or limiting recovery in such cases -- and our courts have neither reason nor warrant for departing from that policy simply because the accident, solely affecting New York residents and arising out of the operation of a New York based automobile, happened beyond its borders. Per contra, Ontario has no conceivable interest in denying a remedy to a New York guest against his New York host for injuries suffered in Ontario by reason of conduct which was tortious under Ontario law . . . .
It is hardly necessary to say that Ontario's interest is quite different from what it would have been had the issue related to the manner in which the defendant had been driving his car at the time of the accident. Where the defendant's exercise of due care in the operation of his automobile is in issue, the jurisdiction in which the allegedly wrongful conduct occurred will usually have a predominant, if not exclusive, concern. In such a case, it is appropriate to look to the law of the place of the tort so as to give effect to that jurisdiction's interest ...