Country Wide Insurance v. National Railroad Passenger Corp.

407 F.3d 84, 2005 U.S. App. LEXIS 7337, 2005 WL 977560
CourtCourt of Appeals for the Second Circuit
DecidedApril 28, 2005
DocketDocket No. 04-0513-CV
StatusPublished
Cited by1 cases

This text of 407 F.3d 84 (Country Wide Insurance v. National Railroad Passenger Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Country Wide Insurance v. National Railroad Passenger Corp., 407 F.3d 84, 2005 U.S. App. LEXIS 7337, 2005 WL 977560 (2d Cir. 2005).

Opinion

RAKOFF, District Judge:

At issue in this case is whether the presumption effectively created by § 388(1) of New York’s Vehicle & Traffic Law — that a driver of a vehicle has the [86]*86owner’s permission to drive the vehicle— may be overcome, sufficiently to warrant summary judgment in the owner’s favor, by uncontradicted evidence from the owner and the driver denying such permission. Although variants of this issue recur with some frequency and implicate important public policies of the state, New York case law, as we read it, provides no clear answers. Accordingly, we deem it prudent to certify certain questions to the New York Court of Appeals pursuant to 2d Cir. R. § 0.27 and N.Y. Comp.Codes R. & Regs. tit. 22, § 500.17.

The case comes to us on the appeal of defendant-appellant Country Wide Insurance Company (“Country Wide”) from an order of the district court dated December 16, 2003 granting summary judgment in favor of defendant-appellee National Railroad Passenger Corporation (“Amtrak”). Plaintiffs did not participate in the underlying summary judgment practice, nor are they participating in this appeal.

The action stems from events that transpired on February 27, 2000, when an Amtrak foreman named Alex D. Sanchez arrived for work at Amtrak’s Sunnyside Yard facility at 6:45 p.m., although his shift did not begin until 8 p.m. After arriving at work, Sanchez realized that he had left at home his Amtrak-issued radio, which he would need for his work. Without requesting permission, he took an Amtrak vehicle and drove back home to pick up the radio. Returning to work with the radio in the vehicle, he struck the vehicle of plaintiffs Hui How So, Pyong Mun So, and Christina So at around 7 p.m., causing various injuries. Plaintiffs thereafter brought a negligence action against Amtrak in state court, which Amtrak, as a federally-owned corporation, removed to the Eastern District of New York. On July 24, 2003, plaintiffs filed an amended complaint adding Country Wide, plaintiffs’ automobile insurance carrier, as a co-defendant, since plaintiffs’ uninsured motorist coverage would be triggered if Amtrak were to escape liability.

Amtrak subsequently moved for summary judgment on the ground that it could not be held liable because Sanchez did not have Amtrak’s express or implied permission to operate Amtrak’s vehicle within the meaning of New York Vehicle and Traffic Law § 388(1). That section 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.” In support of its motion, Amtrak submitted the following documents:

• A declaration from David Zwolinski, Sanchez’s supervisor, stating that Sanchez took the vehicle without permission and that his use of the vehicle was not within the scope of his employment.
• A two-paragraph statement from Sanchez himself, given the day after the accident, explaining that he took the vehicle to go pick up the radio after he arrived early for his shift, that he lost control of the vehicle, and that he was ejected from the vehicle into the roadway. This statement was witnessed by Zwolinski.
• Two contemporaneous internal Amtrak accident reports, both of which indicate that the use of the vehicle was “unauthorized.” Both reports are signed by Zwolinski.
• A letter dated March 13, 2000 from Dane P. Wagner, Charging Officer at Amtrak, notifying Sanchez that he should appear on March 27, 2000 for a formal investigation into his conduct in [87]*87taking an Amtrak vehicle without permission and getting into an accident.
• A written waiver dated September 20, 2000 signed by Sanchez agreeing to waive his right to a formal investigation and instead accepting certain specified terms of discipline, to wit: that all lost wages between February 27, 2000 and March 27, 2000, plus 30 workdays, would be held in abeyance for a period of two years; that no claim would be submitted with the exception of Sanchez’s medical bills, which would be paid “at the discretion” of the Amtrak claims department; and that Sanchez would pay restitution to Amtrak in the amount of $17,600, at the rate of approximately $68 per week for five years, for the destruction of the Amtrak vehicle.

Country Wide offered no contrary evidence, but opposed the motion on the ground that a reasonable jury could infer from Amtrak’s evidence that Sanchez had at least implied permission to take the vehicle. This inference arose, Country Wide argued, from Sanchez’s use of the vehicle for a business-related purpose, from the absence of any evidence that Amtrak reported the vehicle as stolen or missing, and from the possibility of collusion in the manner in which Amtrak gathered evidence of the events and disciplined Sanchez. The district court, however, regarding Country Wide’s arguments as speculative at best, granted Amtrak’s motion for summary judgment. This timely appeal followed.

Section 388(1) reflects the policy judgments of the New York legislature that an injured plaintiff should have recourse to a financially responsible defendant and that owners of vehicles will select and supervise drivers with more care if the owners are held responsible for the drivers’ negligence. See Murdza v. Zimmerman, 99 N.Y.2d 375, 756 N.Y.S.2d 505, 786 N.E.2d 440, 441-42 (2003). To further these purposes, the statute has been interpreted by the New York courts as creating a presumption that a driver of a vehicle operates the vehicle with the owner’s permission, implied or express — a presumption that may be rebutted only by “substantial evidence” that the vehicle was not operated with such consent. Barrett v. McNulty, 27 N.Y.2d 928, 318 N.Y.S.2d 144, 266 N.E.2d 823, 824 (N.Y.1970); Leonard v. Karlewicz, 215 A.D.2d 973, 974-75, 627 N.Y.S.2d 169 (3d Dep’t 1995); Guerrieri v. Gray, 203 A.D.2d 324, 325, 610 N.Y.S.2d 301 (2d Dep’t 1994); see Horvath v. Lindenhurst Auto Salvage, Inc., 104 F.3d 540, 542 (2d Cir.1997) (applying New York law).

In Mandelbaum v. United States, 251 F.2d 748, 751 (2d Cir.1958), we reviewed the New York law as it then stood and noted that “[sjeveral New York cases have considered this requirement of ‘substantial evidence’ [and] indicate that even where the owner and driver testify without contradiction as part of the defendant’s case that the driver had no permission or was out of the scope of employment, the case should still go to the trier of fact and if that evidence of interested witnesses is disbelieved the presumption has not been overcome.” This statement refers to trial testimony, rather than testimony offered in the context of summary judgment; but if applicable to summary judgment as well, it would seemingly preclude summary judgment in favor of a vehicle owner if substantially premised on the averments of interested witnesses, even if otherwise un-contradicted.

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407 F.3d 84, 2005 U.S. App. LEXIS 7337, 2005 WL 977560, Counsel Stack Legal Research, https://law.counselstack.com/opinion/country-wide-insurance-v-national-railroad-passenger-corp-ca2-2005.