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Kim v. Paccar Financial Corp.

April 19, 2006

OKSUN KIM, PLAINTIFF-RESPONDENT,
v.
PACCAR FINANCIAL CORP., PACCAR LEASING CO., AND PACCAR, INC., DEFENDANTS-APPELLANTS.



On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. BER-L-11198-04.

The opinion of the court was delivered by: Fisher, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued March 1, 2006

Before Judges Fall, Parker and C.S. Fisher.

In this appeal we review a choice-of-law ruling in an action for personal injury damages resulting from a New Jersey automobile accident that involved New Jersey and New York residents -- a variation on the choice-of-law problem encountered in Fu v. Fu, 160 N.J. 108 (1999). Guided by Fu, we conclude that, under these circumstances, the trial judge erred in declaring that New York law governs plaintiff's claim.

On August 9, 2002, plaintiff Oksun Kim, a New Jersey resident, was a passenger in a vehicle owned and operated by Ok J. Hwang, another New Jersey resident. The Hwang vehicle was struck by a truck operated by Timothy Harvey (Harvey), a New York resident, on a New Jersey highway. Defendant Paccar Financial Corp., a Washington corporation with its principal place of business in Washington, is the owner of the truck. On November 18, 1999, R & L Smith Trucking Inc. (R&L) leased the truck from Paccar for a five-year period. This lease transaction occurred in New York and called for the truck to be registered in New York.

Plaintiff commenced this action on August 9, 2004.*fn1 Her complaint demanded damages from Paccar Financial Corp., Paccar, Inc., and Paccar Leasing Co., alleging that one or more of these Paccar defendants was the owner of the truck leased by R&L and driven by Harvey.

The Paccar defendants moved for summary judgment, acknowledging that Paccar Financial Corp. was the owner of the truck driven by Harvey on the date in question, and also that Paccar Financial Corp. leased the vehicle to R&L nearly three years earlier. Plaintiff cross-moved for summary judgment, seeking a declaration that -- as the truck's owner -- Paccar Financial Corp. should be held liable for plaintiff's damages in accordance with New York Vehicle and Traffic Law § 388 (hereafter Section 388). After hearing argument, the trial judge denied Paccar Financial Corp.'s motion for summary judgment,*fn2 and granted plaintiff's cross-motion for summary judgment, holding that Section 388 should apply instead of New Jersey's contrary common law rule. We granted leave to appeal.

Because New Jersey is the forum state, its choice-of-law rules apply. Gantes v. Kason Corp., 145 N.J. 478, 484 (1996).

In applying those rules, we initially observe that there is a true conflict between the laws of New Jersey and New York in this regard. New Jersey common law shields a vehicle owner such as Paccar Financial Corp. (Paccar) from vicarious liability in the absence of an agency or employment relationship. Fu v. Fu, supra, 160 N.J. at 118. On the other hand, Section 388 imposes vicarious liability on such a vehicle owner, stating:

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, expressed or implied, of such owner.

As the Court said in Fu, "the two states' laws governing the issue to be resolved in this case -- whether an automobile owner is vicariously liable for negligent permissive use of that owner's vehicle -- are fundamentally different." 160 N.J. at 118. The resolution of the choice-of-law problem thus posed is dispositive of plaintiff's suit against Paccar because there is no doubt that Paccar cannot be held liable for plaintiff's injuries should New Jersey's substantive law be applied.

In applying New Jersey's choice-of-law rules to this dispute, we recognize that the traditional lex loci delicti rule, which mechanically applied the law of the place of the wrong, Veazey v. Doremus, 103 N.J. 244, 247 (1986), has been jettisoned and replaced by "a more flexible 'governmental-interest' test that seeks to apply the law of the state with the greatest interest in governing the specific issue in the underlying litigation." Fu, supra, 160 N.J. at 118. That test ...


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