Argued March 22, 2005; decided May 5, 2005

Tikhonova v Ford Motor Co., 10 AD3d 185, affirmed.

Rosenblatt, J.

On this appeal two statutes intersect: on the one hand, vehicle owners are [*2]vicariously liable for the negligence of those whom they allow to drive their vehicles (Vehicle and Traffic Law § 388). On the other, a diplomat who drives a vehicle negligently is immune from suit (22 USC § 254d). The question before us is whether a vehicle owner is vicariously liable for the negligence of a diplomat, himself immune from suit. Put differently, when these two statutes go head to head, does the driver's immunity extinguish the vicarious liability of the owner?

At issue is the scope of 28 USC § 1364. That statute is part of the Diplomatic Relations Act, which requires members of a diplomatic mission to secure automobile liability insurance and gives injured persons the right to sue the wrongdoers' insurance carriers in federal court. We must decide whether 28 USC § 1364 is an exclusive remedy that bars the action before us.

We hold that the driver's immunity does not shield the owner. Moreover, because 28 USC § 1364 does not provide an exclusive remedy, the suit before us is tenable.

Alexey Konovalov, a Russian diplomat driving in New York City, rear-ended another car. Konovalov's passenger, plaintiff here, was seriously injured and sued Konovalov and Ford, the car's owner.^[FN1] Supreme Court dismissed the suit against Konovalov owing to his diplomatic immunity. By way of affirmative defense, Ford asserted that given the driver's immunity it could not be held vicariously liable. Plaintiff moved for summary judgment against Ford, which cross-moved to dismiss. Supreme Court agreed with Ford, concluding that the company could not be held vicariously liable, and further, that 28 USC § 1364 relegated plaintiff to a federal court action against Konovalov's insurance carrier.{**4 NY3d at 624}

The Appellate Division reversed and reinstated the complaint against Ford (10 AD3d 185 [1st Dept 2004]). We affirm.

Under the Diplomatic Relations Act (22 USC § 254a et seq.) an action against an individual entitled to immunity must be dismissed where immunity is established "upon motion or suggestion by or on behalf of the individual" (22 USC § 254d).^[FN2] Konovalov's diplomatic [*3]immunity is conceded.

In pertinent part, section 388 of the Vehicle and Traffic Law provides that:

"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" (§ 388 [1]).

In 1924, the Legislature enacted Highway Law § 282-e, the predecessor to section 388. In the 80 years since then, the Legislature has amended or consolidated the section 14 times, but never once has it retreated from its intention to assure injured plaintiffs that there will be a financially responsible party to provide compensation for negligent driving.

In arguing against liability, Ford asserts that, in other contexts, this Court has declined to impose derivative liability where the tortfeasor enjoys immunity. In Naso v Lafata (4 NY2d 585, 589 [1958]), we explained that a worker injured in a car driven negligently by a coemployee (and in the course of their employment) may not resort to the Vehicle and Traffic Law for a cause of action against the car's owner. The Workers' Compensation Law, we held, offers the only remedy for injuries caused by the coemployee's negligence. This conclusion flowed directly from the statutory language in what was then Workmen's Compensation Law § 29 (6), which stated that "[t]he right to compensation or benefits under this chapter, shall be the exclusive remedy to an employee . . . when such employee is injured or killed by the negligence or wrong of another in the same employ" (quoted in Naso, 4 NY2d at 589 [emphasis omitted]). Similarly, in the companion case of Rauch v Jones (4 NY2d 592, {**4 NY3d at 625}596 [1958]), we confirmed that the statute prohibits any remedy but that provided by the Workers' Compensation Law.

Contrary to Ford's assertion, the basis for these decisions was not that derivative liability could never derive from an immune party's negligence. Rather, both decisions rest on the statutory language making plain that in the special context of workers' compensation, the system of remedies provided by the Workers' Compensation Law supplants all other statutory or common-law causes of action. The federal statute providing diplomats' tort victims with a direct action against the diplomats' insurance carriers contains nothing like the "exclusive remedy" [*4]clause specified in the Workers' Compensation Law (see 28 USC § 1364).

Ford also argues that our precedents denying the liability of owners of cars lent to emergency workers should apply here. In Sikora v Keillor (13 NY2d 610 [1963], affg 17 AD2d 6, 8 [2d Dept 1962]), we affirmed, without opinion, the Appellate Division's determination that no liability attaches to a vehicle owner where the negligent driver (a volunteer firefighter) was immune from suit under General Municipal Law § 205-b. That case does not govern the appeal before us. The Appellate Division reasoned that the owner's vicarious liability could derive only from a finding of liability against the driver. On policy grounds, a contrary result would have discouraged volunteers from responding to emergencies by reducing the number of people willing to lend vehicles to those volunteers. By interpreting section 388 as we did, the Court stood behind the strong policy interest in protecting those who aid emergency workers. That result, however, is not compelled in every instance in which the vehicle's operator benefits from some immunity. We do not see a strong state policy in favor of renting cars to diplomats.

Moreover, a finding that the owner was not liable did not leave the injured party without the opportunity to seek full compensation, because General Municipal Law § 205-b holds the fire district liable for the negligence of its volunteer firefighters. Here, by contrast, the Russian mission's insurance, although greater than the state minimum, would likely not be enough to compensate the victim in full.

Ford would have us interpret section 388 to necessarily absolve the owner of liability whenever the driver cannot be held liable. The statute, however, is not written that way. It hinges the owner's liability not on the driver's liability but on the driver's negligence.{**4 NY3d at 626}

As a final argument, Ford maintains that 28 USC § 1364 bars this action. Congress enacted that statute to assure that deserving plaintiffs can look to financially responsible parties to answer for injuries negligently caused by diplomats.^{[FN3 ]} Section 6 (b) of the Act requires members of the diplomatic mission to acquire liability insurance for risks "arising from the operation in the United States of any motor vehicle, vessel, or aircraft" (22 USC § 254e [b]), while section 7 authorizes an injured party to sue the diplomat's carrier directly in federal court (28 USC § 1364).

Ford argues that because plaintiff has this right, she is barred from suing the [*5]company in state court. We disagree. There is nothing in the federal statutes that can be read to prohibit this action. Allowing a federal suit against the driver's carrier does not foreclose a state court suit against another party—in this case, Ford.^[FN4]

Accordingly, the order of the Appellate Division should be affirmed, with costs, and the certified question answered in the affirmative.

Chief Judge Kaye and Judges G.B. Smith, Ciparick, Graffeo, Read and R.S. Smith concur.

Order affirmed, etc.