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HEISLER v. TOYOTA MOTOR CREDIT CORP.

May 10, 1995

BETTY ANN HEISLER and JOHN M. HEISLER, Plaintiffs, against TOYOTA MOTOR CREDIT CORPORATION, Defendant.


The opinion of the court was delivered by: KIMBA M. WOOD

 WOOD, D.J.

 Pursuant to Rule 56 of the Federal Rules of Civil procedure, defendant Toyota Motor Credit Corporation moves for summary judgment on the ground that choice of law principles compel the application of New Jersey law in this diversity action, and that, under New Jersey law, defendant is not liable to plaintiffs Betty Ann Heisler and John M. Heisler (together the "Heislers"). Plaintiffs argue that New York law of vicarious liability applies, both because New York's choice of law rules favor the application of New York law in this case, and because defendant has waived its right to invoke New Jersey law. Plaintiffs also argue that even if New Jersey law were to apply, that law is sufficiently unclear on the issue of defendant's liability that summary judgment would not be warranted. For the reasons set forth below, I grant defendant's motion for summary judgment.

 I. Background

 On January 16, 1991, while driving through Pompton Lakes, New Jersey, en route to Betty Ann Heisler's place of employment in Wayne, New Jersey, the Heislers were struck by a car driven by Steven West ("West"). Plaintiffs allege that the accident was "a result of the carelessness, recklessness and negligence of the defendant in the ownership, operation, management, maintenance and control" over its car, (Complaint at P 8), *fn1" and they now seek recompense for the personal injuries sustained by Mrs. Heisler, and for the loss of consortium suffered by Mr. Heisler. The Heislers are New York domiciliaries, West is a New Jersey domiciliary, and the car driven by West had been leased to him by defendant, a California corporation.

 II. Discussion

 Summary judgment is appropriate when "there is no genuine issue as to any material fact, and the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); Citizens Bank of Clearwater v. Hunt, 927 F.2d 707, 710 (2d Cir. 1991). Because the parties are in agreement as to the material facts -- that is, the domiciles of the relevant parties and the location of the car accident -- the court must decide whether, as a matter of law, New Jersey law governs, and, if so, whether the application of New Jersey law compels entry of summary judgment in favor of defendant.

 a. Choice of Law Analysis

 Section 388 of the New York Vehicle and Traffic Law provides:

 
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.

 Although the statute speaks of vehicles operated "in this state," New York courts have interpreted § 388 to have extraterritorial effect. See Sentry Ins. Co. v. Amsel, 36 N.Y.2d 291, 327 N.E.2d 635, 637, 367 N.Y.S.2d 480 (N.Y. 1975) (noting that "the legislative history of section 388 of the Vehicle and Traffic Law indicates that the Legislature intended to enlarge the vehicle owner's vicarious liability and not to draw a line at the boarder"); cf. Farber v. Smolack, 20 N.Y.2d 198, 229 N.E.2d 36, 39, 282 N.Y.S.2d 248 (N.Y. 1967). Accordingly, if applied to the instant action, section 388 would render defendant liable for injuries sustained by plaintiffs, provided that plaintiffs could prove West's negligence.

 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. Buglioli, 811 F. Supp. at 108 (citing Klaxon Co. v. Stentor Electric Mfg. Co., Inc., 313 U.S. 487, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941)). *fn2"

 Until 1963, New York courts confronting choice of law problems in tort actions simply applied lex loci delicti, or the law of the place of the tort, to all substantive issues in the case. While uniform application of lex loci delicti furthered the important goals of predictability and ease of application, the doctrine necessarily was incapable of taking into account the competing policies underlying the conflicting laws of other jurisdictions. That is, by focusing exclusively on the location of the tort, courts ignored "the interest which jurisdictions other than that where the ...


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