[*1]
Byrne v Collins
2009 NY Slip Op 52395(U) [25 Misc 3d 1232(A)]
Decided on November 24, 2009
Supreme Court, Kings County
Rivera, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on November 24, 2009
Supreme Court, Kings County


David Byrne, individually, and as Surviving Brother, and Administrator of the Estate of Elizabeth Byrne, Deceased, Plaintiff,

against

James Collins, J.G.B. Trucking a/k/a Johnny's Delivery Service, Perfect Car Rental d/b/a Budget Truck Rental, Budget Truck Trust I Wilmington Trust Co., Budget Truck Rental, LLC, and Budget Rent-A-Car System, Inc., Defendants.




38029/06



Counsel:

For Plaintiff:

Kreindler & Kreindler

100 Park Avenue

New York, NY 10017

212-687-8181

For Defendants (Perfect & Budget Rental)

Reardon & Sclafani, PC

220 White Plain, Suite 235

Tarrytown, NY 10591

914-366-0201

Francois A. Rivera, J.



Upon the foregoing papers, defendants Perfect Car Rental, Inc. (Perfect), Budget Truck Trust I (Budget Trust), Budget Truck Rental, LLC (Budget LLC), and Budget Rent-A-Car System, [*2]Inc. (Budget System)[FN1] move for an order, pursuant to CPLR 3211 (a) (7) and 3212, Vehicle and Traffic Law §§ 128, 388, 2108, and 49 USC § 30106, granting summary judgment dismissing the Second Verified Complaint on the ground that it fails to state a cause of action as against defendants Perfect and Budget LLC, and because plaintiff's action is preempted by federal law.

BACKGROUND FACTS AND PROCEDURAL HISTORY


Plaintiff David Byrne (Byrne) commenced this action on or about December 11, 2006 to recover damages for personal injuries allegedly sustained by, and the wrongful death of, decedent Elizabeth Byrne (Elizabeth) as a result of a motor vehicle accident. The accident occurred at about 9:30 p.m. on September 23, 2005 at the intersection of McGuinness Boulevard and Kent Street in Brooklyn, New York, when a truck operated by defendant Jamie Collins s/h/a/ James Collins (Collins) struck plaintiff's intestate while she was riding a bicycle down McGuinness Boulevard. At the time of the accident, Collins, an employee of J.B.G. Trucking, Inc. a/k/a Johnny's Delivery Service (JBG Trucking),[FN2] was driving the truck in the course of his employment and turning left from McGuinness Boulevard onto Kent Street.

According to the Oklahoma Tax Commission's records, the subject truck was owned by Budget Trust and registered as a rental vehicle in Budget System's name. Budget LLC (or its predecessor, Budget Rent a Car Corporation), the rental division and affiliated subsidiary of Avis Budget Group, LLC (Avis),[FN3] rented the subject truck to Perfect pursuant to a 2002 Dealer Agreement which allowed Perfect to operate a Budget rental location. As an authorized independent contractor/dealer, Perfect then rented the subject Budget truck to JBG Trucking. The rental agreement between Perfect and JBG Trucking provided that any authorized employee of the company-renter with a valid driver's license be permitted to operate the vehicle upon presentation of a valid driver's license by the company employee who picks up the vehicle.

THE PARTIES' CONTENTIONS


The first cause of action in plaintiff's complaint alleges that Perfect, Budget Trust, Budget LLC, and Budget System (collectively, the moving defendants) were all engaged in the business of "purchasing, owning, servicing, repairing and maintaining motor vehicles and/or renting motor vehicles, including those that they owned[,] to their customers for profit;" they rented the subject truck to JBG Trucking; and, as owners of the truck, they are liable for Collins' negligent acts, among other things. The second cause of action in the complaint alleges that the moving defendants are liable for negligent entrustment of the truck because Collins' alleged failure to present a valid driver's license should have alerted them to his inability to operate a motor vehicle properly and safely.

The moving defendants argue that the complaint fails to state a cause of action as against Perfect and Budget LLC because neither entity was the titled owner or registered owner of the truck [*3]and therefore did not owe any duty to plaintiff or decedent. They assert that Perfect, acting as Budget Trust's agent or representative, merely rented the subject vehicle to JBG Trucking under a rental agreement, and that Budget LLC similarly rented the vehicle to Perfect. Purportedly, neither entity had any ownership role in the transaction. According to the moving defendants, it is undisputed that Budget Trust — not Perfect nor Budget LLC — owned the subject truck on the date of the accident, and neither Perfect nor Budget LLC can be held vicariously liable under Vehicle and Traffic Law for decedent's wrongful death or for any personal injuries that were allegedly caused by the permissive user of the rental truck.

The moving defendants also argue that the action is barred because federal law regarding rented or leased motor vehicle safety and responsibility, codified as part of the Transportation Equity Act of 2005, 49 USC § 30106 (the Graves Amendment), preempts any state statute imposing liability on them, considering that they are owners and owner-affiliates engaged in the business of renting or leasing motor vehicles who were not negligent in entrusting the subject vehicle to Collins. Additionally, they contend that plaintiff's allegations of negligent entrustment in the second cause of action are meritless and, furthermore, do not place the action within the exception to the federal preemption, because Collins did in fact have a valid New York State driver's license, albeit restricted. They also aver that Collins did not suffer from any impairment at the time of the accident, nor during working hours, generally; that none of the moving defendants had any special knowledge of any propensity by Collins to use the truck improperly or dangerously; and that they did not have any duty to investigate Collins' prior driving or criminal record. Finally, they maintain that the subject truck was not a "commercial motor vehicle" under Vehicle and Traffic Law § 530 (5) (Restricted use license) because the subject truck had a gross vehicle weight rating of only 25,500 pounds.

In opposition, plaintiff argues that a question of fact remains as to whether the moving defendants knowingly allowed Collins to operate the subject truck with a restricted license, thereby removing this action from the protection afforded by the Graves Amendment. Plaintiff contends that the Graves Amendment does not apply to preclude this action because his allegations are specific enough to assert a valid negligent entrustment claim, given that Collins' restricted license placed the moving defendants on constructive or inquiry notice of Collins' propensity to operate the truck improperly or dangerously. Plaintiff also maintains that the moving defendants mistakenly rely on Vehicle and Traffic Law § 530, which he asserts does not address the responsibility between a motor vehicle rental company and the third party public, and instead addresses only the restrictions and limitations of a restricted license as a privilege granted by the State.

The moving defendants' reply challenges the admissibility of the evidence plaintiff submitted in rebuttal. They aver that, with the exception of the certified copy of Collins' driving record abstract, which purportedly only authenticates Collins' driving privileges status as of the date of the accident, all of the exhibits annexed to plaintiff's attorney's affirmation are uncertified and inadmissible. Furthermore, the moving defendants emphasize plaintiff's failure to show that they possessed "special knowledge" of Collins' conduct or some characteristic which rendered his use of particular chattel unreasonably dangerous, which is required to establish a cause of action sounding in negligent entrustment. According to the moving defendants, Collins' restricted license does not raise a red flag regarding any dangerous conduct or characteristics, nor were defendants obligated to investigate his record after learning that Collins held a restricted license.

[*4]DISCUSSION


Summ ary judgment should only be granted where there are no triable issues of fact (see Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [1957]). The moving party on a motion for summary judgment has the burden of demonstrating "a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case" (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 852 [1985]). Once the movant has made this showing, the burden of proof shifts to the party opposing the motion to produce evidentiary proof in admissible form to establish that material issues of fact exist which require a trial (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). "[M]ere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient" (Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). The evidence presented on summary judgment must be scrutinized in the light most favorable to the party opposing the motion (Goldstein v Monroe County, 77 AD2d 232, 236 [1980]). Accordingly, "[i]f there is any doubt about the existence of a triable issue of fact, or a material issue of fact is arguable, summary judgment should be denied" (Celardo v Bell, 222 AD2d 547, 547 [1995]).

Vehicle and Traffic Law § 388 (1) imposes liability on the owner of a vehicle 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 . . ."[FN4] "The purpose of this section is to ensure recourse to the vehicle's owner, a financially responsible party,' and to discourage owners from permitting people who are irresponsible or who might engage in unreasonably dangerous activities to use their vehicles'" (Chambers v City of New York, 309 AD2d 81, 84 [2003], quoting Argentina v Emery World Wide Delivery, 93 NY2d 554, 562 [1999]).

The Graves Amendment, regarding rented or leased motor vehicle safety and responsibility, "bars vicarious liability actions against professional lessors and renters of vehicles," as would otherwise be permitted under Vehicle and Traffic Law § 388 (see Graham v Dunkley, 50 AD3d 55 [2008]). The statute provides in pertinent part:

"(a) In general. An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if

(1) the owner (or an affiliate of the owner) is engaged in the trade or business of renting or leasing motor vehicles; and [*5]

(2) there is no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner) . . ."

The Graves Amendment thus preempts state statutes to the extent that they hold owners in the business of renting or leasing motor vehicles vicariously liable for the negligence of drivers, except when there is negligence or criminal wrongdoing on the part of the owner (id.; see also Graham v Dunkley, 13 Misc 3d 790, 792 [2006]). Vicarious liability is not abrogated where the injury or damage results from the negligence of the owner's employee in the operation or maintenance of the vehicle, nor where it seems the owner was negligent in entrusting the vehicle to the operator (see Luma v ELRAC, Inc., 19 Misc 3d 1138[A], *2 [2008]).

As a preliminary matter, the Court finds that the moving defendants have established with evidentiary proof that neither Perfect nor Budget LLC was the registered nor titled owner of the subject vehicle.[FN5] Plaintiff does not oppose the moving defendants' assertion that, for that reason, neither entity can be held vicariously liable under Vehicle and Traffic Law § 388 for decedent's wrongful death or any personal injuries that were allegedly caused by the permissive user of the rental truck. Thus, the Court grants that part of the moving defendants' motion dismissing the first cause of action as against defendants Perfect and Budget LLC.

The Court now turns to the issue of negligent entrustment: the heart of the second cause of action against all moving defendants, and the issue on which the first cause of action is predicated as against the remaining moving defendants, Budget Trust and Budget System. In any negligence action, the threshold question is whether the defendant owes a legally-recognized duty of care to the plaintiff (see Hamilton v Beretta U.S.A. Corp., 96 NY2d 222, 232 [2001]). Generally, to establish liability under a theory of negligent entrustment, a plaintiff must demonstrate that "the defendant . . . [has or should have] some special knowledge concerning a characteristic or condition peculiar to the [person to whom a particular chattel is given] which renders [that person's] use of the chattel unreasonably dangerous . . . or some special knowledge as to a characteristic or defect peculiar to the chattel which renders it unreasonably dangerous" (Cook v Shapiro, 58 AD3d 664, 666 [2009], quoting Zara v Perzan, 185 AD2d 236, 237 [1992] [internal citations omitted]; see also Hamilton, 96 NY2d at 237). Thus, in the context of the Graves Amendment, the court must decide whether the corporation was under an obligation to check Collins' driving record and determine whether the moving defendants fall under the "own negligence" exception. Such definition of the existence and scope of an alleged tortfeasor's duty is a question of law reserved for the courts (see Palka v Servicemaster Mgt. Servs. Corp., 83 NY2d 579, 585 [1994]; Eiseman v State, 70 NY2d 175, 189-190 [1987]).

The moving defendants focus their motion on plaintiff's allegation that Perfect was negligent because it knew or should have known that Collins had a history of drug and/or alcohol related offense(s), given his restricted driver's license. In support of their motion, they attach various exhibits, including the deposition testimony of various witnesses, to demonstrate that Collins did in [*6]fact have a valid New York State driver's license, albeit restricted.[FN6] In particular, Collins' Driving Record Abstract from the Department of Motor Vehicles (annexed as Exhibit L to the moving defendants' motion papers herein) specifies that the status of his license is valid.

The Court agrees that a restricted license is nevertheless a valid license, as is necessary for Collins to conduct business in the course of his employment. Such restricted licenses are issued with the intent that a person whose privilege of driving would otherwise be invalid can still operate a motor vehicle for purposes of maintaining his or her livelihood and avoid substantial financial hardship (see Vehicle and Traffic Law § 530 [1]).[FN7] The "valid" designation on the face of Collins' restricted license is thus sufficient endorsement by the Department of Motor Vehicles that he is authorized and qualified to operate a motor vehicle in the course of his employment for JBG Trucking.[FN8] The restricted license does not, in and of itself, compel a motor vehicle rental agent of average ken to scrutinize the renters (see Cook, 58 AD3d at 667).

However, at this juncture we cannot find that the moving defendants are entitled to summary judgment as a matter of law. Upon searching the record, the Court finds that triable issues of material fact remain regarding whether Perfect possessed special knowledge of any propensity by Collins to operate the subject truck in an unreasonably dangerous way. Specifically, the moving defendants have not tendered any evidence establishing that Perfect followed the proper policies and [*7]procedures required of Budget rental locations before renting vehicles to drivers.[FN9] Nor does the moving defendants' reply address their failure to produce such documents. Although we decline to impose upon motor vehicle rental agents any obligation to check a renter's driving record beyond verifying that he or she has a valid driver's license, absent further evidence of the unsuitability of the renter and the agent's knowledge thereof, we need also conclude that such precautions are not part of Budget's internal policies and procedures before granting summary judgment to the moving defendants. The moving defendants have not persuaded us of that fact with their showing. Having failed to eliminate all material issues of fact from the case, they do not meet their prima facie burden of establishing that they had no reason to doubt Collins' ability to operate a motor vehicle properly and safely. The Court need not examine the sufficiency of the supporting evidence in plaintiff's opposition papers.

Construing the facts in a light most favorable to plaintiff, a trier of fact could conclude that the elements necessary to establish a claim for negligent entrustment are present in this case. Movant has failed to demonstrate that plaintiff has no cause of action under a negligent entrustment theory as a matter of law, and issues of material fact exist with respect to the negligent entrustment cause of action that preclude granting summary judgment. Similarly, issues of material fact preclude granting summary judgment on federal preemption of the action against Budget Trust and Budget System under the Graves Amendment.

Accordingly, it is

ORDERED that the moving defendants' motion for summary judgment dismissing the complaint is granted only as against Perfect and Budget LLC, and denied in all other respects.

The foregoing constitutes the decision and order of the court.

E N T E R,

J. S. C.

Footnotes


Footnote 1: Perfect is sued herein as "Perfect Car Rental d/b/a Budget Truck Rental," and Budget Truck Trust I is sued herein as "Budget Truck Trust I Wilmington Trust Co."

Footnote 2: JBG Trucking is erroneously sued herein as J.G.B. Trucking.

Footnote 3: Perfect, as well as the three Budget defendants (Budget Trust, Budget LLC, Budget System), were divisions, subsidiaries and/or affiliates of parent company Avis that operated as professional lessors and renters of motor vehicles.

Footnote 4: Vehicle and Traffic Law § 128 defines "owner" as "[a] person, other than a lien holder, having the property in or title to a vehicle or vessel . . . includ[ing] a person entitled to the use and possession of a vehicle or vessel subject to a security interest in another person and . . . any lessee or bailee of a motor vehicle or vessel having the exclusive use thereof, under a lease or otherwise, for a period greater than thirty days."

Footnote 5: The subject truck's registered owner was Budget System and its titled owner was Budget Trust (the nominee titleholder) according to Oklahoma Tax Commission records; Perfect and Budget LLC merely rented out such Budget motor vehicles for hire.

Footnote 6: Collins' driver's license was suspended on March 23, 2005 by court order. He was subsequently issued a restricted license on June 8, 2005, permitting him to continue pursuing or commuting to/from his business, trade occupation or profession under Vehicle and Traffic Law § 530 (3).

Footnote 7: Under Vehicle and Traffic Law § 530, restricted licenses allow "[a] person whose driving license or privilege of operating a motor vehicle . . . has been heretofore suspended or revoked pursuant to provisions of section five hundred ten . . . and for whom the holding of a valid license is a necessary incident to his employment, business, trade occupation or profession" to nevertheless operate a motor vehicle in the state as a restricted privilege "during the time the holder is actually engaged in pursuing or commuting to or from his business, trade, occupation or profession."

Footnote 8: Moreover, contrary to plaintiff's protest, Section 530 is applicable to the instant facts, as it relates to the type of license in Collins' possession; plaintiff cannot disregard the statute as irrelevant to the relationship between motor vehicle rental companies and third parties. As the moving defendants point out, although operation of a commercial motor vehicle is prohibited under Vehicle and Traffic Law § 530 (5), the subject truck in this action is not a commercial motor vehicle because it has a gross vehicle weight rating of only 25,500 pounds. Collins' operation of the truck is therefore permissible with his restricted license. Although this observation reflects only on whether Collins had legal authority to operate the truck, and not whether Perfect had special knowledge of any incompetence on Collins' part, it still offers guidance regarding the expectations of the average motor vehicle rental agent in assessing whether to rent a motor vehicle to Collins.

Footnote 9: The court notes plaintiff's repeated requests for Budget's policies and procedures, which plaintiff avers the moving defendants have yet to produce, in large part.