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Matthews v. Cti Container Transport International

decided: March 23, 1989.


Appeals from judgment of the United States District Court for the Southern District of New York, Miriam Goldman Cederbaum, J., awarding damages to Thomas Matthews and Kathleen Matthews for injuries sustained in automobile collision. Affirmed, with modification.

Feinberg, Newman and Altimari, Circuit Judges.

Author: Feinberg

FEINBERG, Circuit Judge:

Interpool, Ltd., Barbara and Dennis A. O'Connor, Grato & Sons Trucking (Grato) and Raymond Rodino appeal from a judgment entered against them in the United States District Court for the Southern District of New York, Miriam Goldman Cedarbaum, J., after a jury trial. Compania Trasatlantica Espanola, S.A. (Spanish Lines) also appeals from the judgment after a simultaneous bench trial. The judgment awarded Thomas J. Matthews damages against appellants for injuries sustained in a collision, and Kathleen Matthews damages for loss of the services of her husband. In addition, Thomas and Kathleen Matthews appeal from the district court's dismissal of their complaint against two other defendants. For the reasons given below, we affirm the judgment of the district court, with one modification discussed below.


This action arises out of an automobile accident in Jericho, New York on October 24, 1985 between an automobile and a tractor trailer. Rodino, the driver of the tractor trailer, drove through a red light and "broadsided" the automobile driven by Dennis O'Connor as it emerged from an office complex and proceeded through an intersection governed by a green light. Thomas Matthews, who was a passenger in a car driven by O'Connor, suffered serious brain damage and other injuries as a result of the accident. The tractor trailer consisted of three separate parts: a tractor, a trailer or chassis, and a container that rode on top of the chassis. Each part was owned, or in the control of, a separate party or parties.

In November 1985, plaintiffs Thomas Matthews and his wife Kathleen sued Rodino and Dennis O'Connor for negligent operation of their vehicles. Plaintiffs also sued Grato, as the owner of the tractor; Interpool and Spanish Lines, as the owners of the chassis; CTI Container Transport International, Inc. (CTI) and Gelco CTI Container Corp. (Gelco), as the owners of the cargo container riding on the chassis; and Barbara O'Connor, as the owner of the automobile in which Thomas Matthews was a passenger. Some of these defendants also filed cross-claims against each other, and all of them impleaded as third party defendants Hubsport Company (Hubsport) and Chaco Company (Chaco),*fn1 the owners and maintainers of the office complex from which the O'Connor vehicle had emerged at the time of the accident.

In January 1987, CTI and Gelco moved to dismiss the claims against them. In March 1987, the district court granted the motion, finding that a container is not a vehicle under § 388 of the New York Vehicle and Traffic Law (NYV&TL) and, therefore, the owner of the cargo container could not be held vicariously liable for the negligence of the driver of the tractor and chassis carrying the container.

In June 1987, Interpool twice moved for summary judgment, claiming that it was not vicariously liable for the accident because it was not an "owner" of the chassis within the meaning of § 388 of the NYV&TL. The district court denied the first motion from the bench in order to allow the parties to complete discovery on the issue of whether Interpool was an "owner" of the chassis. In July 1987, after discovery, the district court denied the motion again, holding that Interpool's financing arrangement gave it effective ownership of the chassis.

Plaintiffs' claims against all of the remaining defendants other than Spanish Lines were resolved after trial by a jury. The case against Spanish Lines, which comes within the definition of a "foreign state" under the Foreign Sovereign Immunities Act (FSIA), was tried by the court pursuant to 28 U.S.C. § 1441(d).

The jury rendered its verdict in June 1988, awarding $7 million to Thomas Matthews. Judgment was entered against Rodino, Grato, Barbara O'Connor, Dennis O'Connor and Interpool. In its answers to a series of questions, the jury found that Thomas Matthews was entitled to damages of $7 million, that Rodino and Dennis O'Connor were 82% and 18%, respectively, at fault for the accident and that third-party defendants Hubsport and Chaco were not liable. The jury also rendered a verdict of $1 million in favor of Kathleen Matthews. This sum was later reduced to $400,000 by the court.

In the simultaneous bench trial against Spanish Lines, the district judge made her own findings of fact and conclusions of law, which differed in significant respects from the jury verdict. The court found that Thomas Matthews was entitled to damages of $4,783,150, a figure over $2 million less than the jury verdict against the other defendants. The components of this total, as found by the court, were: $3,883,150 for future lost earnings, $300,000 for physical pain and suffering and loss of enjoyment of life to date, $300,000 for future physical pain and suffering and permanent diminution of the enjoyment of life, and $300,000 for past and future depression and mental anguish. The court found Rodino 100% responsible for the accident, and Dennis O'Connor not negligent. The judge also determined that under the terms of the lease agreement for the chassis, Spanish Lines has a contractual obligation to indemnify Interpool for the amount of the judgment against it and that O'Connor may obtain contribution from Spanish Lines but in an amount not to exceed Spanish Lines' total liability, as determined by the court. The court awarded Kathleen Matthews $300,000 for the lost services of her husband.

Because there are so many parties in this case, we will not refer hereafter to any as "appellant" or "appellee" but only by their names. For convenience, we will discuss the principal issues in roughly the chronological order they were decided in the district court, not in their order of relative importance.


I. Pre-trial Motions

A. The Motion to Dismiss in Favor of CTI and Gelco

Matthews*fn2 and O'Connor*fn3 argue that the district court erred in finding that CTI and Gelco were not owners of a vehicle subject to vicarious liability under NYV&TL § 388. Their theory is that since the New York statute makes the owner of a trailer liable for the negligence of the trailer's driver, the statute should also make the owners of the container here liable for the negligence of the driver of the trailer. As indicated below, the "owners" of the trailer (or chassis) were Interpool and Spanish Lines. CTI and Gelco owned only the container, and they argue that containers are not defined in the statute as trailers, are not registered or insured as trailers, and are, in effect, simply cargo.

The owner of a trailer is subject to vicarious liability under New York Law. NYV&TL § 388(2). A trailer is defined as "[a]ny vehicle not propelled by its own power drawn on the public highways by a motor vehicle. . . ." NYV&TL § 156. A container has neither wheels nor axles and cannot be "drawn" by itself "on the public highways by a motor vehicle." Cf. People v. Guilianti, 10 N.Y.2d 433, 436, 224 N.Y.S.2d 4, 179 N.E.2d 850 (1962) (presence of wheels on van in shape of trailer and used as a field office indicated capability to be drawn on highway). Matthews and O'Connor have not cited, and we have not found, any persuasive New York authority equating a cargo container with a trailer. We are nonetheless offered policy reasons for stretching the coverage of the NYV&TL to include a container, thereby offering further financial protection to those injured on the highways of New York. Judge Cedarbaum stated that she could not find "any evidence that the legislature intended that the definition of trailer include a container that was placed on top of a trailer" and observed that she should not "legislate for the State of New York." Whatever we might think of the policy arguments were we legislators, we agree with the district judge.

B. Denial of Interpool's Summary Judgment Motion

Interpool argues that it is not an "owner" of the chassis and cannot be held vicariously liable to Matthews for the negligence of Rodino, the driver of the truck and chassis. Interpool claims that it was simply an intermediary between the title-holder, the First National Bank of Evanston, Illinois, and the lessee with exclusive use and possession, Spanish Lines.

New York law defines the "owner" of a vehicle as follows:

[1] A person, other than a lien holder, having the property in or title to a vehicle or vessel. [2] The term includes a person entitled to the use and possession of a vehicle or vessel subject to a security interest in another person and [3] also includes any lessee or bailee of a motor vehicle or vessel having the exclusive use ...

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