Robert K. Monette et al., Appellants,v.Christina L. Trummer, et al., Defendants, Jim Ball Pontiac-Buick-GMC, Inc., Respondent.BriefN.Y.October 8, 2013DWYER, BLACK & LYLE, LLP JEFFREY A. BLACK<> ETHAN M. LYLE<> KEVIN M. HABBERFIELO<> OF COUNSEL JOSEPH C. OWYER<> OADMITTED IN NEW YORK AND PENNSYLVANIA ATTORNEYS AT LAw 1616 WEST STATE STREET P.O. Box 648 OLEAN, NEW YORK 14760-0648 www.dwyerblacklyle.com July 22,2013 State of New York Court of Appeals Andrew W. Klein, Chief Clerk 20 Eagle Street Albany, NY 12207-1095 Re: Monette v. Trummer, et al APL-2013-00131 Dear Mr. Klein: MARY M. BE:YTH, R.N. 716-373-1920 800-524-9481 FAX 716-373-3110· Pursuant to the Court's letter of July 1,2013, enclosed are our written comments and arguments in support of appellants' position on the merits and subject matter jurisdiction. I. Subject Matter Jurisdiction and Finality This Court has subject matter jurisdiction to hear this appeal in multiple respects. This appeal is taken from an April 26, 2013 order of the Appellate Division, Fourth Department (Smith, J.P., Peradotto, Lindley, Sconiers and Valentino) reversing the trial court and granting summary judgment to the Defendant-Respondent Jim Ball Pontiac-Buick-GMC, Inc. (Jim Ball, Inc.). This court has jurisdiction of the appeal and of the questions presented herein under Article VI §§ 3(b)(1) and 3(a) of the New York Constitution as well as CPLR 5601(a) and 5501(b). The New York Constitution mandates that only final orders are appealable to the Court of Appeals. This Court has held that a final order is "one that disposes of all the causes of action between the parties and leaves nothing for further judicial intervention apart from mere ministerial matters" (Burke v Crosson, 85 NY2d 10, 15 [1995]). Further, "it has long been settled that an order of the Appellate Division which [] on reversal [] directs, the dismissal of the complaint in an action [] is a final determination" (Cohen & Karger, Powers of the New York Court of Appeals § 12 P 59). That is precisely the case here as the 1 o NOT FOR LEGAL SERVICE DWYER, BLACK & LYLE, LLP Appellate Division order reversed the trial court, immediately dismissing the complaint against Jim Ball, Inc., terminating the case in total. In addition, the Appellate Division, Fourth Department found new facts while entering its final order wholly dismissing the case, again granting jurisdiction (see CPLR § 5501(b); Suria v Shiffman, 67 NY2d 87 [1986]). All defendants with the exception of Jim Ball, Inc. have been dismissed from the lawsuit. On December 17, 2010, Defendant Jim Ball Holdings, LLC was dismissed without opposition by order of Hon. Michael E. Nenno. R. 17. On August 2, 2011, Defendant David Leederman was also dismissed on a motion for summary judgment by Order of Hon. Michael E. Nenno. R. 8. No appeals have been filed from either order and the time to appeal has lapsed. On December 8, 2012, Defendants Jesse L. Ball and Christina L. Trummer were released upon partial satisfaction of judgment. A copy of said partial satisfaction of judgment is attached hereto as Exhibit "A." This leaves only the plaintiffs and Jim Ball, Inc. As such, the Appellate Division's order finally determined this action in all respects as to the sole remaining parties, including cross claims and third-party claims (see gen. Barile v Kavanaugh, 67 NY2d 392, 395 n2 [1986]; see also We're Assocs. Co. v Cohen, 65 NY2d 148, 149 nl [1985]). Nothing could be more final as to the plaintiffs and Jim Ball, Inc. As noted in the discussion of the merits below, the Appellate Division also found new facts, in error, leading to the majority's decision. See, Section III (c), infra. II. Section 500.11 Review may be Inappropriate for This Matter as Affirmance of the Appellate Division Order Will Have Statewide Significance Jim Ball, Inc. is claiming that it loaned an employee's personal vehicle, Jesse Ball, to a customer at its dealership and, because of this, it is not liable as an owner under Vehicle and Traffic Law § 388. If this Court were to determine that the Appellate Division Order should be affirmed and find, as a matter of law, that the defendant had no ownership or co-ownership interest in the striking vehicle whatsoever, it would essentially be creating a blueprint that automobile dealers across the state could use to circumvent the purpose of Vehicle and Traffic Law § 388. Indeed, endorsing the defendant's conduct in this matter would entice other automotive dealerships, loaning thousands of vehicles throughout this state every day, to use a purported "employee's" vehicle as a "straw man" to insulate 2 DWYER, BLACK & LYLE, LLP themselves from liability and perform an end-around of § 388, leaving thousands of injured people throughout our state without a financially responsible party to compensate them for their losses. Such an idea has already b~en proffered by the Greater New York Automobile Dealers Association (GNYADA). See, GNY ADA "Vicarious Liability and Loaner Cars" by Russ McRory, Esq. attached hereto as Exhibit "B." In this letter, the GNY ADA discusses how the titling and registering of loaner cars under a different corporate entity may help avoid liability as an owner for automobile dealers. This idea would certainly apply to titling or registering the vehicle with an employee as welL As such, should the Appellate Division order be affirmed, it may trigger other dealerships across this state to attempt using this "straw man" business model in the future, clearly having great statewide impact on the innocent victims' of motor vehicle crashes ability to be made whole. ill. Discussion of Merits The Dissent at the Appellate Division correctly determined that Summary judgment on the issue of ownership or co-ownership was not appropriate in this matter because Jim Ball, Inc. failed to meet its burden of proof as there are credibility and factual questions present that can only be resolved by a jury. In addition, it is undisputed that the Graves Amendment would not apply as Jim Ball, Inc. is not engaged in the trade or business of renting or leasing motor vehicles. a. Summary Judgment Standard This Court has repeatedly held that "summary judgment should not be granted when there is 'any doubt' (Sillman v Twentieth Century-Fox Film, Corp., 3 NY2d 395, 404, 165 NYS2d 498 [1957]) as to the existence of a triable issue or when the issue is 'arguable' (id.; Barret v Jacobs, 255 NY 520, 522 [1931]). 'If the issue is fairly debatable a motion for summary judgment must be denied' (Stone v Goodson, 8 NY2d 8, 12, 200 NYS2d 627 [1960]; Ferluckaj v Goldman Sachs & Co., 12 NY3d 316, 321, 880 NYS2d 879 [2009]). "In other words, if it is reasonable to disagree about the materials facts or about what may be inferred from undisputed facts, summary judgment may not be granted." Id. In making such a determination, "the facts must be viewed in the light most favorable to the nonmoving party" (Matter of Council of City of N.Y. v Bloomberg, 6 NY3d 380, 401 813 NYS2d 3 [2006]). In addition the moving party has the burden of proof and "failure to make a prima facie showing of entitled to judgment as a matter of law 'requires a denial of the motion, regardless of the sufficiency of the opposing papers' and it is only if the movant succeeds in making this showing that the 3 DWYER, BLACK & LYLE, LLP burden shifts to the party opposing the motion" (Ferluckaj, supra; citing, Alvarez v Prospect Hosp., 68 NY2d 320, 508 NYS2d 923 [1986]). b. Jim Ball, Inc. Has Failed To Meet Its Burden Robert Monette suffered serious personal injuries when struck by a vehicle driven by Christina Trummer who had borrowed the vehicle from David Leederman. Mr. Leederman had obtained possession of the vehicle from Jim Ball, Inc. while his vehicle was being repaired. To obtain possession of the vehicle, Jim Ball, Inc. entered into a rental agreement with Mr. Leederman listing Jim Ball, Inc. as the owner of the vehicle and Mr. Leederman as the renter. Jim Ball, Inc. set the terms and conditions of the loan. When suit was brought, Jim Ball, Inc. alleged that it was not the owner of the vehicle it loaned to Mr. Leederman but instead that it was owned by one of its' employees, Jesse Ball, the daughter of the president of Jim Ball, Inc. Jim Ball, Inc. then unsuccessfully moved for summary jUdgment on the issue of ownership or co-ownership of the vehicle; losing twice before the trial court. This Court has repeatedly recognized that the statutory purpose of Vehicle and Traffic Law § 388 is to insure that "one injured by the negligent operation of a motor vehicle should have recourse to a financially responsible defendant" (MVIAC v Continental National American Group Co., 35 NY2d 260, 264, 360 NYS2d 859 [1974]; citing Continental Auto Lease Corp. v Campbell, 19 NY 2d 350, 352, 280 NYS2d 123 [1967]). "Thus, section 388 simultaneously increases the likelihood of compensation for those injured in motor vehicle accidents and decreases the probability of such accidents by encouraging an owner's prudent selection of drivers" (Murdza v Zimmerman, 99 NY2d 375, 379, 756 NYS2d 505 [2003]). This Court and all New York courts recognize that there can be joint ownership of a motor vehicle (Payne v Payne, 28 NY2d 399, 322 NYS2d 238 [1971]) and that a dispute as to true ownership ofa vehicle is generally a question of fact to be determined by a jury (Bornhurst v Massachusetts Bonding & Insurance Company, 21 NY2d 581, 289 NYS2d 937 [1968]; Zegarowicz v Ripatti, 77 AD3d 650, 911 NYS2d 69 [2nd Dept 2010]; Young v Seckler, 74 AD2d 155,426 NYS2d 311 [2nd Dept 1980]; Aronov v Bruins Transportation, Inc., 294 AD2d 523,743 NYS2d 131 [2nd Dept 2001]). Thus, a jury should be permitted the opportunity to determine whether Jim Ball, Inc. is a co-owner of the striking vehicle and afford the Plaintiffs-Appellants the opportunity to have a financially responsible party compensate them for their injuries. 4 DWYER, BLACK. & LYLE, LLP The only evidence Jim Ball, Inc. put forth in support of its motion for summary judgment was the testimony of James and Jesse Ball and a copy of the rental agreement that Jim Ball, Inc. entered into with David Leederman. With regard to James Ball it must be noted that he has no recollection of whether he was even at the business on the date of the transaction and any information that he has regarding the transaction is strictly hearsay. R. 217, 222. Neither James Ball nor Jesse Ball was aware of who is actually listed on the title as the owner of the vehicle. Jesse Ball, R. 248, James Ball R. 231-232. In addition both testified that the payments for the vehicle were provided by Jim Ball, Inc. (R. 243-244) and J esse Ball testified that she believed Jim Ball, Inc. also provided insurance on the vehicle. R. 248. In their moving papers Jim Ball, Inc. failed or refused to produce the title or registration for the vehicle even though specifically demanded by plaintiffs. They also failed to produce any documentary evidence of ownership such as a copy of the purported lease, any documentation regarding payment for the vehicle, and any insurance documentation such as the insurance card or declaration page. Instead, the only evidence Jim Ball, Inc. brought forth is the bare assertions of a father and daughter; assertions that contradict themselves. As noted by the Second Department in Young, supra, as the party moving for summary judgment Jim Ball, Inc. "was obligated to lay bare his evidence so as to negate any material fact on the question of ownership." In this case Jim Ball, Inc. has failed to do so. The only documentary evidence submitted was a rental agreement which lists Jim Ball, Inc. as the owner of the vehicle, not Jesse Ball. The Court has to ask if the title, registration and insurance were in Jesse Ball's name, why would Jim Ball, Inc. not have produced it? If the documentary evidence was conclusive on the issue, why was it not turned oyer in discovery? Instead why did Jim Ball, Inc. move for summary judgment a mere thirteen (13) days after depositions were conducted and without supplying any of the requested documentation? We are left with contradictory testimony from James and Jesse Ball. Neither are able to testify who is listed as the owner on the title. Jesse Ball believes that Jim Ball, Inc. might have insurance on the vehicle and only James Ball has any information about the terms of the lease. R.232-233. We are left attempting to resolve a credibility issue as to whether James and Jesse Ball are telling the truth, or whether the rental agreement, by its express terms, is the truth as to who is the owner or co-owners of the vehicle. As the Court is aware, such credibility issues cannot be determined in a motion for summary judgment (Vega v Restani Constr. Corp., 18 NY3d 499,942 NYS2d 13 [2012]). 5 DWYER, BLACK & LYLE, LLP The facts are similar to those encountered by the Second Department in Aronov, supra. In Aronov, following a bus crash, defendant ABC moved for summary judgment arguing that it was not the owner of the vehicle and produced a title which listed Defendant Firstar as the owner. The Second Department held that a question of ownership remained as ABC had entered into a short term lease of the bus (less than 30 days) with the operator prior to the crash. In this case, although we do not know who the titled owner was, we do know that Jim Ball, Inc. had the unfettered power to loan out the vehicle and had unrestricted possession and control of the vehicle just as ABC did in Aronov. The loan or rental agreement alone is sufficient to create an issue of fact as to ownership. As both Jesse and James Ball testified, Jim Ball, Inc. had the ability to enter into the rental agreement with sole possession of the vehicle and the ability to set the terms, conditions and length of the agreement, without any input from Jesse Ball. Jesse Ball testified that she did not know how long Mr. Leederman would have possession of the vehicle (R. 249), never met him (R. 247) and had no involvement in the rental agreement. R. 249. Instead when approached by the Chief Financial Officer of Jim Ball, Inc. she immediately transferred possession of the vehicle to Jim Ball, Inc. R. 217, 246, 247, 252. Such testimony at a minimum raises a question of fact as to whether Jim Ball, Inc. had "property in" the vehicle. Vehicle and Traffic Law § 388. c. The Appellate Division Made New and Incorrect Findings of Fact While the majority in the Appellate Division concluded that there was not an issue of fact, the opinion unfortunately contains new findings of fact and significant factual errors which may have led to the incorrect result. In its majority opinion the Court stated that "Plaintiffs concede that Jesse Ball, not defendant, was the titleholder of the vehicle." That statement is in error. In fact that issue is one of the key disputes in this matter. Not only do plaintiffs dispute that Jesse Ball was the titleholder of the vehicle, Jesse Ball herself and James Ball both testified that they did not know wh<;> the titleholder is or was. Jesse Ball, R. 248 and James Ball, R. 231-232. The title and registration were never produced for any Court or provided to any party, thus this concession is impossible. The majority also incorrectly concluded that Jesse Ball leased the vehicle at issue from GMAC. Once again, defendant failed to produce any copy of the lease documents and instead James Ball testified that in fact the vehicle might not have been leased but instead a "Smart Buy." R. 232. The majority also determined that Jesse Ball made the lease payments on the vehicle and paid for the 6 DWYER, BLACK & LYLE, LLP insurance on the vehicle. Once again that issue was disputed by defendants own testimony as Jim Ball testified that the "company (Jim Ball, Inc.) gives her a car allowance for that" (R. 232) and Jesse Ball testified that Jim Ball, Inc. provided a stipend for the cost of the vehicle and was not sure how that was paid to her. R. 244. In addition she also testified that Jim Ball, Inc. may have also provided insurance on the vehicle. R. 247-248. Once again, Jim Ball, Inc. failed to produce the policy of insurance or declaration page for any insurance on the vehicle. Finally, the majority concluded that the vehicle was Jesse Ball's "personal vehicle" and noted that "she had not previously been asked to loan 'her vehicle' to a customer." However, Jesse Ball testified that Jim Ball, Inc. would provide other vehicles that she could take home and that "she thought" this was the first time they had asked to use this vehicle. R. 245-246. Absent the title, registration, lease documents or any proof as to the titleholder of the vehicle and the contradictory testimony, defendants failed to meet their burden of proof. d. A Jury Should Determine if Jim Ball, Inc. is an Owner of the Vehicle In the instant matter, Defendant Jesse Ball testified that she was told by her superior, the Chief Financial Officer of Jim Ball, Inc., that it was loaning a vehicle to Defendant Leederman. R. 217, 246. This transaction is precisely the type that § 388 is designed to address. Further, Defendant Jesse Ball is an employee of Jim Ball, Inc. and was acting under its specific direction and control in furtherance of Jim Ball, Inc.'s business pursuits. R. 215 - 216; 241, 245 - 246. In fact, Jim Ball, Inc.' s president, James Ball, stated that "we gave him a car" and testified that it provided Defendant Leederman with a vehicle from its place of business. R. 213 In 5 - 6; 214 In 2 - 4. What is more, loaning a vehicle to someone is consistent with a property interest, ownership, dominion and control. In fact, it is axiomatic that an entity must own a vehicle or have some property right in it to be able to loan it to another, otherwise it is theft. To be curt, if you do not own - you cannot loan. Vehicle and Traffic Law § 388 states, in relevant part: "1. [eJvery owner of a vehicle used or operated in this state shall be liable and responsible for [J injuries to person [J 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 [J . .. 7 DWYER, BLACK & LYLE, LLP 3. As used in this section, "owner" shall be as defined in section one hundred twenty-eight of this chapter [J" (emphasis added). An owner under New York law is someone who has 1) property in or 2) title to a vehicle and can also include, but does not have to, a person who has the use and possession of a vehicle subject to the interest of another or, a lessee or bailee that has the exclusive use thereof for thirty (30) days. As such, there are at least three separate ways to determine ownership and co-ownership as clearly envisioned in the statute. New York Vehicle and Traffic Law § 128 defines an "owner" of a vehicle as "A person, other than a lien holder, having the property in or title to a vehicle . . ." The question becomes whether Jim Ball, Inc. met its burden to prove that it neither had the property in nor the title to the vehicle. As noted above, the evidence proffered by Jim Ball, Inc. is utterly lacking as to who was the titled owner of the vehicle. Neither Jesse Ball nor James Ball were able to testify who the titled owner was. They failed to produce the title. The only documeI!tation they were able to provide was a rental agreement indicating that Jim Ball, Inc. had the unrestricted authority to loan the vehicle as the owner and listed a Jim Ball, Inc. stock number for the vehicle, indicative of ownership. A stock number is a system car dealerships use to keep track of their vehicles. It is not used by layperson owners. Only after suit was commenced did Jim Ball, Inc. allege that it was not the titled owner to the vehicle. It is also undisputed that at the time David Leederman received possession of the vehicle Jim Ball, Inc. had exclusive possession, use and control of the vehicle. Jim Ball, Inc. had the exclusive ability to determine the length of the loan and the terms of the loan. As Jesse Ball made clear, when she surrendered possession of the vehicle she had no information as to what would happen with the vehicle, other than it was being "loaned" to a customer. She had no role in the terms or conditions of the arrangement and in fact did not know how long the arrangement would last or even if the vehicle would be returned. As Jim Ball, Inc. was paying for the vehicle she apparently had no concern in surrendering complete use of the vehicle, especially in light of the fact that Jim Ball, Inc. had other vehicles available for her use. Which begs the question, why did Jim Ball, Inc. give Leederman this vehicle when it had an entire lot of vehicles it could loan. As courts throughout New York have consistently held, title is not the only consideration regarding ownership. as a possessory interest, financial interest, dominion and control are also relevant (Dobson v Gioia, 39 AD3d 995, 999; 834 NYS2d 356, 359 [3rd Dept 2007](appellate court determines there is a triable issue 8 DWYER, BLACK & LYLE, LLP of fact on ownership); Young v Seckler, 74 AD2d 155; 426 NYS2d 311 [2nd Dept 1980] (presumption of ownership rebutted requiring a jury determination); see gen. Fulater v Palmer's Granite Garage, Inc., 90 AD2d 685; 456 NYS2d 289 [4th Dept 1982]; see also Cunningham v Ford, 20 AD3d 897; 798 NYS2d 281 [4th Dept 2005]). Clearly, Jim Ball, Inc. fits squarely within the definition of ownership in this matter as it had a property interest by controlling the vehicles' use and possession. Indeed, Jim Ball, Inc. exclusively used and possessed the vehicle prior to loaning it to Defendant Leederman. The statutory language itself states that ownership can be found for those who have property in or title to a vehicle. In this case, Jim Ball, Inc. may be listed on the title and it had a property interest in the vehicle, creating a question of fact as to co..:ownership. Jim Ball, Inc.'s argument that there is a thirty (30) day exclusive use requirement for ownership to exist, while informative, is just one way to establish ownership, albeit one that is not applicable to this case. To be clear, this is not a lease or bailment, only a loaner arrangement. Furthermore, a jury could determine that since Jim Ball, Inc. paid for the vehicle and had the power to direct its use and operation whenever it saw fit that Jim Ball, Inc. was a co-owner of the vehicle from the moment it purchased the car and it had simply chosen to allow Jesse Ball to use it until Jim Ball, Inc. needed it. See, Payne v Payne, supra. e. The Graves Amendment is not Applicable to This Case. Jim Ball, Inc. attempts to argue that because it and Defendant Leederman executed a document titled a "Truck Rental Agreement" that this establishes that Jim Ball, Inc. "rented" Defendant Leederman a vehicle and, as such, it cannot be liable under federal law. Indeed, 49 USC § 30106(a), states in relevant part: In General. - An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if - (1) the owner (or an affiliate of the owner) is engaged in the trade or business of renting or leasing motor vehicles; and 9 DWYER, BLACK & LYLE, LLP (2) there is no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner). However, this was clearly not a rental as no money changed hands and James Ball testified that Jim Ball, Inc., not Jesse Ball, "loaned" the vehicle to Defendant Leederman while they performed repairs on Defendant Leederman's vehicle. R. 212- 213. Further, in paragraph 2 of Jim Ball, Inc.'s Answer, it is admitted that Jim Ball, Inc., not Defendant Jesse Ball, "loaned" Defendant David Leederman the vehicle at issue. R. 51. As such,_ Jim Ball, Inc. cannot now claim that the vehicle was "rented" to Defendant Leederman, rendering any discussion relative to the so-called Graves Amendment moot. In addition James Ball testified that Jim Ball, Inc. is not engaged in the trade or business of renting and leasing vehicles. Instead, he specifically testified that Jim Ball, Inc. "sells and services automobiles, GM products, and used cars, has a body shop, has a service facility." While it had "loaner vehicles" such vehicles were provided to customers without charge. Accordingly, the Graves Amendment does not apply (see Cassidy v CDFS Trust, 89 AD3d 591, 933 NYS2d 31 [1 st Dept 2011]). Conclusion Jim Ball, Inc. has not met its burden of proof on the issue of ownership of the vehicle. It failed to lay bare its proof and failed to submit the title, registration, insurance or any documentary evidence as to the true owner of the vehicle. The only proof it did produce was a rental agreement with its stock number listed, evidencing that Jim Ball, .Inc. had full use and possession of the vehicle. In addition, the Graves Amendment clearly has no application here because Jim Ball. Inc. has admitted it is not engaged in the business or trade of renting or leasing motor vehicles. As such, the decision of the Appellate Division should be reversed and a jury be allowed to determine who the owner or co-owner of the vehicle was. JAB/jdg Enclosures 10 ~lY~OM Jeffrey A. Black, Esq. Exhibit A STATE OF NEW YORK SUPREME COURT : COUNTYOFCATTARAUGUS I ?~Jl DEC -28 P 2= 32 CATTARAUGUS COUNTY CLERK ROBERT K. MONETTE and SHARON M. MONETTE, Plaintiff, v. CHRISTINA 1. TRUMMER, JESSE 1. BALL and JIM BALL PONTIAC-BUICK-GMC, Defendants. PARTIAL SATISFACTION OF Judgment entered November 16,2012 For $1,410,935.53 in favor of ROBERT K. MONETTE and SHARON M. MONETTE Said Judgment is Discharged as to CHRISTINA L. TRUMMER and JESSE L. BALL ONLY Index No.: 75875 WHEREAS, a judgment was recovered on the 16th day of November, 2012 against Christina 1. Trummer, Jesse L. Ball and Jim BallPontiac-Buick-GMC, Inc., in the above entitled action for the sum of One Million, Four Hundred, Ten Thousand, Nine Hundred, Thirty- Five and 53/100 dollars, which judgment was, on the 16th day of November, 2012, duly entered in the judgment book in the office of the Clerk of the above named Court and said judgment has been partially paid in the amount of $513,869.49 by Christina 1. Trummer and Jessie 1. Ball on the 18th day of December, 2012, said payment being first applied to interest accrued on said judgment calculated to be $11,133.12 and the balance $502,736.37 of to the principal thereof and that said judgment is discharged as to the said Christina L. Trummer and Jessie 1. Ball and that the balance of said judgment, including accrued interest thereon, remains in full force and effect as against Jim Ball Pontiac-Buick-GMC, Inc. THEREFORE,partial satisfaction of said judgment is hereby acknowledged, and the Clerk of said Court is hereby authorized and directed to cancel, satisfy the judgment to the 1 extent of the aforesaid payment and to discharge the said judgment as against Christina L. Trummer and Jessie L. Ball only and that judgment for the remaining principal balance of $908,199.16, together with interest thereon from the 18th day of December, 2012 remain in full force and effect against Jim Ball Pontiac-Buick-GMC, Inc., and the clerk is hereby directed to so record the same. Dated: December 27,2012 2 DWYER, BLACK & LYLE, LLP Attorneys for the Judgment Creditors 1616 West Slate Street P.O. Box 648 Olean, New York 14760-0648 (716) 373-1920 Exhibit B Vicarious Liability and Loaner Cars By Russ McRory, Esq. Vicarious liability for vehicle owners is the law in New York State. Under the vicarious liability statute, the oWner of a vehicle is liable and responsible for death or injuries to persons and· property resulting from the negligent use or· operation of such vehicles by third parties. Because of this, an automobile dealership is liable if a service customer gets into an accident while negligently operating a dealership-owned loaner car. In 2005, a federal law called the Graves Amendment was enacted to protect rental and leasing companies from vicarious liability laws. Unfortunately, the Graves Amendment provides little safe haven for dealers in the loaner car scenario because the vehicle owner must be engaged in the business of renting or leasing motor lIehicles in order to fall under its umbrella. Several courts have ruled that the Graves Amendment does not protect automobile dealerships that provide loaner cars to a service customer-even when dealerships attempt to dress up the loaner transaction as a rental or a lease transaction. In one case, the court rejected a dealership's argument that an agreement titled as "Rental Agreement" with a "Loaner Car Addendum" was a rental or lease within the meaning of the Graves Amendment. That court brushed aside arguments that consideration for a "rental" was provided by the customer giving the dealership right to repair the vehicle, the customer's obligation to refill the gas tank, and the late charges that would apply if the loaner was not timely returned. While that court left open the possibility that under a different set of facts, a loaner vehicle transaction might quality as a rental or lease arrangement, the odds of that argument prevailing are not good. As a result, the Graves Amendment rental or lease exception is largely a dead end for dealers. What Can a Dealer Do? By definition, the vicarious liability statute applies only to the owner of a vehicle. Titling and registering loaner cars in a distinct but affiliated corporation or limited liability company may provide some protection from New York's strict application of vicarious liability. In that scenario, someone attempting to sue a dealership whose loaner fleet is owned by a distinct affiliated business entity would have to allege and prove the traditional elements of piercing the corporate veil in order to establish liability against the dealership entity. Those elements include a disregard of corporate formalities or misuse of the corporate form that defrauds and damages the plaintiff. While it has become easier to pierce the veil over the years, it remains better than nothing in the face of strict vicarious liability. Finally, a claim for negligent entrustment is always a risk for dealers. Under the negligent entrustment theory, dealers are liable if they knowingly or negligently entrust a loaner vehicle to an incompetent driver. At a minimum, dealership personnel must require that the recipient of a loaner car present a valid driver's license and current proof of insurance. © 2010 Greater New York Automobile Dealers Association www.gnyada.com
