The opinion of the court was delivered by: EUGENE H. NICKERSON
NICKERSON, District Judge:
Plaintiff William Buglioli, a New Jersey citizen, brought this diversity action to recover for injuries he sustained while driving a BMW automobile in a high-speed "cat and mouse" automobile chase in New Jersey. Defendant Enterprise Rent-a-Car Company ("Enterprise"), a Delaware corporation, is located in St. Louis, Missouri. Defendant Frank R. Reidinger is a citizen of New York.
Enterprise cross-moves for summary judgment contending that it was not the actual or constructive owner of the rental vehicle driven by Reidinger and that even if it was the owner, it was not vicariously liable under New Jersey law.
The largely undisputed facts may be briefly summarized.
Reidinger rented a Toyota Corolla from a "Enterprise Rent-a-Car" office located in Staten Island, New York in January of 1991. On March 1, 1991 Buglioli, his passenger and Reidinger and his two passengers were drinking at a bar named "Scoundrels" in Linden, New Jersey. Some sort of altercation occurred between the Buglioli and Reidinger passengers. Soon after driving away from the Scoundrels parking lot, Buglioli, Reidinger and a third car spontaneously initiated a high-speed automobile chase, described by witnesses as a game of "cat and mouse," across two miles of New Jersey roadway. According to one witness (but not another), the third car veered toward Reidinger who veered into Buglioli's lane. Buglioli lost control of his car and struck two telephone poles. As a result, according to his physician, he suffered severe head injury and brain damage, his speech is substantially unintelligible, and he has no recollection of the accident.
On December 16, 1991, Reidinger voluntarily pleaded guilty to two counts of aggravated assault by automobile, fourth degree offenses, before the Superior Court of New Jersey. He admitted in open court that by driving in a reckless manner, he caused serious bodily injury to Buglioli. He further explained that after consuming alcohol and while speeding, he swerved toward Buglioli's automobile, causing Buglioli "to go off the road and into the post."
Reidinger was informed at the time of his plea that he could receive a sentence of up to three years in prison and a fine of up to $ 15,000. On March 27, 1992, he was placed on probation for a period of three years.
Buglioli moves for summary judgment on the issue of Enterprises's liability as constructive owner of the rented Toyota driven by Reidinger. Enterprise cross-moves for summary judgment contending, first, that it was not the actual or constructive owner of the Toyota rented by Reidinger and, second, that even if it was the owner, the court should deny vicarious liability under New Jersey law.
Assuming that Enterprise (or its corporate parent which could be joined in this action) constructively owned the Toyota rented to Reidinger, the court must first determine whether to apply New Jersey or New York to the question of the owner's liability.
Under New Jersey law, the owner of a vehicle, without more, is not liable for the negligence of a driver of the vehicle. White v. Smith, 398 F. Supp. 130 (D.N.J. 1975). To recover damages, plaintiff must establish (1) an agency relationship between the owner and the driver (such as employer/agent), or (2) negligence by the owner in renting or loaning the vehicle to a reckless, incompetent or irresponsible bailee. Id. "Thus," as plaintiff concedes, "an owner in the business of leasing automobiles may not be held liable for the bailee's negligence absent a showing of agency or negligent choice of bailee." See also Noreiga v. Lever Bros. Co., 671 F. Supp. 991, 995 (S.D.N.Y. 1987) (applying New Jersey law); Schimek v. Gibb Truck Rental Agency, 69 N.J. Super 590, 592-93, 174 A.2d 641 (App. Div. 1961); Zuppa v. Hertz Corp., 111 N.J. Super. 419, 421-22, 268 A.2d 364 (Essex County Ct. 1970). Cf. Kauffman v. Gullace, 252 N.J. Super 467, 600 A.2d 143 (App. Div. 1991).
Under section 388 of the New York Vehicle and Traffic law,
Because the laws of New Jersey and New York are in sharp conflict regarding the circumstances in which an automobile owner is liable for the negligence of a driver, this court must follow the conflict of laws rules of New York, the state in which this court sits. Klaxon Co. v. Stentor Electric Mfg. Co., Inc., 313 U.S. 487, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941).
The New York Court of Appeals has developed rules for resolving conflicts in tort actions arising from automobile accidents without the state. When New York law conflicts with a foreign state's law regarding the appropriate standards of conduct, such as the rules of the road, the law of the place of the tort "will usually have a predominant, if not exclusive, concern." Babcock v. Jackson, 12 N.Y.2d 473, 483, 240 N.Y.S.2d 743, 191 N.E.2d 279 (1963).
But where the conflicting law relates to the manner in which losses are to be distributed and a New York citizen has suffered a loss, New York courts will apply its own loss distribution rules. For example, in Babcock, the New York Court of Appeals applied the New York guest statute requiring a negligent driver to compensate his passenger (a New York domiciliary) for injuries sustained in an accident without the state. The court found that New York had an important interest in protecting its own citizens from unfair or ...