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Isabella v. Koubek

United States Court of Appeals, Second Circuit

August 13, 2013

Matthew ISABELLA, Mary Isabella, his wife, Plaintiffs,
v.
Michael W. KOUBEK, Third Party Defendant-Appellant. Doris A. Hallock, Peter T. Hallock, Third Party Plaintiffs-Appellees,

Argued: April 2, 2013.

Page 385

[Copyrighted Material Omitted]

Page 386

Arthur J. Siegel, Bond, Schoeneck & King, PLLC, Albany, NY, for Third Party Defendant-Appellant.

Glenn A. Kaminska (Nicholas M. Cardascia, on the brief), Ahmuty, Demers & McManus, Albertson, NY, for Third Party Plaintiffs-Appellees.

Before: LOHIER, CARNEY, Circuit Judges, and RAKOFF, District Judge. [*]

LOHIER, Circuit Judge:

In this appeal, involving a car accident, we consider an apparent conflict between two provisions of New York law: Section 29(6) of New York's Workers' Compensation Law (" Section 29(6)" ), which provides that workers' compensation is the exclusive remedy of an employee injured by his co-employee's negligence, and Section 388 of New York's Vehicle and Traffic Law (" Section 388" ), which provides that every owner of a vehicle operated in New York is liable for injuries resulting from the negligent permissive use of that vehicle. Ultimately, we conclude that the New York Court of Appeals is in a better position to resolve the conflict, if any, between these two provisions, both of which arguably apply in this case. The Court of Appeals previously prohibited plaintiffs who are injured by the negligence of a co-employee driver from suing the owner of the vehicle, reasoning that vicarious liability against the owner cannot exist in the absence of direct liability against the driver. More recent New York state court decisions have not been consistent on the issue, however, leading us to believe that the more specific question presented in this case is not yet fully resolved. Accordingly, we defer decision and certify the following question to the New York Court of Appeals:

Page 387

Whether a defendant may pursue a third-party contribution claim under New York Vehicle and Traffic Law § 388 against the owner of a vehicle, where the vehicle driver's negligence was a substantial factor in causing the plaintiff's injuries, but the driver is protected from suit by the exclusive remedy provisions of New York Workers' Compensation Law § 29(6)?

BACKGROUND

This case arises from a car accident in New York. Third-party defendant-appellant Michael Koubek appeals from a decision of the United States District Court for the Northern District of New York (Sharpe, C.J. ), which refused to dismiss the contribution claims of third-party plaintiffs-appellees Doris and Peter Hallock (" the Hallocks" ). On November 27, 2007, Roberta Oldenborg, Koubek's wife, was driving Koubek's car back from a business meeting when she collided with a car driven by Doris Hallock (and owned by Peter Hallock). Oldenborg's co-worker, Matthew Isabella (" Isabella" ) had been riding as a passenger in Oldenborg's car and was injured in the accident. Because the injury occurred in the course of his employment, Isabella was prevented by New York's Workers' Compensation Law from suing Oldenborg, and he eventually obtained workers' compensation benefits.

In 2009 Isabella and his wife sued the Hallocks in federal court based on diversity of citizenship. They claimed that Doris Hallock's negligent and reckless driving proximately caused Isabella's injuries. In turn, the Hallocks filed a third-party complaint against Koubek for contribution and indemnification, claiming that his wife Oldenborg's negligence, not Doris Hallock's, proximately caused Isabella's injuries. Koubek countered that his wife's statutory immunity under Section 29(6) of the New York Workers' Compensation Law protected him from liability, and he moved for summary judgment.

The District Court denied Koubek's motion in view of Clamp v. Estate of Hales, 10 Misc.3d 988, 807 N.Y.S.2d 512 (Sup.Ct.2005), which held that a defendant in the Hallocks' position could sue the owner of a car under New York Vehicle and Traffic Law § 388 even though the negligent driver of that car enjoyed statutory immunity based on Workers' Compensation Law § 29(6). The District Court reasoned that the purpose of Section 29(6) would not be frustrated by allowing the third-party suit to proceed because the parties were not related by employment.[1]

Just before trial, the parties entered into an agreement pursuant to which the Isabellas would receive $800,000, plus interest, and the jury trial would apportion liability between Koubek and the Hallocks. The parties also agreed that if this Court were to reverse the District Court's denial of summary judgment on appeal, the Hallocks would be responsible for paying the full amount of the settlement. At trial, the jury found Koubek ninety percent liable and the Hallocks ten percent liable for the accident. After the District Court denied Koubek's post-trial motion for judgment as a matter of law, Koubek appealed.

DISCUSSION

" We review a district court's grant of summary judgment de novo, construing the evidence in the light most favorable to the non-moving party and drawing all reasonable inferences in its favor." Allianz Ins. Co. v. Lerner, 416 F.3d 109, 113 (2d Cir.2005). ...


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