On appeal from the Superior Court of New Jersey, Law Division, Mercer County.
Before Judges Baime, Wefing and Braithwaite.
The opinion of the court was delivered by: Wefing, J.A.D.
Argued: February 19, 1998
This case requires a determination of which law governs the relationships between these parties, the law of New Jersey or the law of New York. The trial court concluded that New York law applies. Because we are satisfied that the trial court erred when it reached this conclusion, we reverse and remand for further proceedings.
On July 18, 1993, Xiao Su and Kuide Chen rented a car in Lawrenceville, New Jersey from defendant Freedom River, Inc. (Freedom River). Mr. Su and Mr. Chen intended to use the car to take their families to visit Cornell University in Ithaca, New York and then go on further, apparently as far as Wisconsin. The contract called for the car to be returned to Lawrenceville on July 27, 1993.
There were six in the group: Mr. Su and his wife, Li Fu, and their child Daniel Su and Mr. Chen and his wife, defendant Hong Fu, and their child, Michelle Chen. All are residents of New Jersey. The rental contract identified Mr. Su and Mr. Chen as the individuals who would drive the vehicle. Mr. Su testified at depositions that the two men were assured when they rented the car that their wives could drive it as well.
Freedom River, the lessor, is a franchisee of Budget Rent-A-Car. Freedom River, however, does business in only two locations, Philadelphia, Pennsylvania and Lawrenceville, New Jersey. The car which Mr. Su and Mr. Chen rented was registered in Pennsylvania.
On July 19, 1993, while the group was passing through Hamburg, New York, with Hong Fu at the wheel, they were involved in a one-car accident. The five passengers were injured and all presented claims for damages against Hong Fu and against Freedom River.
Both Mr. Su and Mr. Chen had insurance coverage through their own personal vehicles. The amount available, however, was insufficient to provide for all the injured claimants, particularly for Li Fu, the most seriously injured of the passengers. We are informed that she spent thirty days in intensive care following the accident and that her medical expenses approach $400,000. We are further informed that the claims of the other passengers have all been settled; only Li Fu's claim remains outstanding.
Freedom River moved for summary judgment. It maintained that the matter was controlled by New Jersey law, under which the owner of a motor vehicle is not liable for the negligence of the vehicle's operator unless the operator is acting as the owner's agent or employee. Harvey v. Craw, 110 N.J. Super. 68 (App. Div.), certif. denied, 56 N.J. 479 (1970). Our courts have long applied this principle to rental vehicles. Schimek v. Gibb Truck Rental Agency, 69 N.J. Super. 590 (App. Div. 1961).
Plaintiffs opposed this motion. They contended that the matter was controlled by the law of New York, which is to the contrary. New York, by statute, imposes liability upon a vehicle's owner for the negligence of the vehicle's operator.
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 ...