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Decision breaks new ground on vehicle liability

A decision handed down in an ongoing Livingston County civil trial over a fatal 2005 bus crash on I-390 near Geneseo-involving a team of Canadian hockey players-marks the first court ruling in Upstate New York on a controversial state vehicle-leasing liability law.
New York’s vicarious liability law-passed early in the last century and still on the books-makes vehicle owners liable for damages caused by anyone they let drive their vehicle. New York was one of roughly a dozen states that held car rental companies vicariously liable but the only state that held auto dealers responsible for damages caused by drivers of vehicles leased through their dealerships. In the late 1990s, the law drove several car rental companies out of New York. In 2005, it induced automakers to halt or modify their leasing programs in New York and to offer substitute arrangements that the auto dealers said upped consumers’ costs.
In the Livingston County case, state Supreme Court Justice Thomas Van Strydonck ruled in a decision handed down May 22 that a 2005 federal statute exempting leasing companies from states’ vicarious liability laws supersedes the New York law.
The ruling came in the second case in the state to deal with vicarious liability since the passage of the federal law, known as the Graves Amendment. The first led to a 2006 decision by a Queens state Supreme Court justice, who drew an opposite conclusion, finding the federal law was “an unwarranted intrusion on state prerogatives.”
A New York Second Department Appellate Division panel reversed the Queens judge’s ruling in 2007. And in February, New York’s highest court, the Court of Appeals, declined to hear the case.
The New York State Trial Lawyers Association filed a friend of the court brief in the appeal noting New York’s “longstanding interest in ensuring that individuals injured by drivers of rented or leased cars are compensated for their injuries.”
The trial lawyers group maintained in the brief that the Graves Amendment would mean a significant number of injured victims would not recover damages for injuries suffered in accidents caused by drivers of rented or leased vehicles driven by uninsured or underinsured drivers.
The New York State Auto Dealers Association, which backed the Graves Amendment and had sought reform legislation at the state level, filed a brief arguing against the ruling by the Queens judge.
The accident that sparked the Livingston County case happened on a Sunday afternoon in late January 2005. A Canadian Coach USA bus heading south on I-390 and carrying 22 members of a Windsor, Ontario 18-21-year-old women’s hockey team slammed into a parked 18-wheeler’s rear end. The driver of the truck, who had pulled off the road to walk his dogs, was killed instantly. His wife, who was waiting in the truck, was injured badly but survived. Bus passengers killed were a father and son and the mother of a team member. Several members of the Windsor Wildcats were critically injured. The women’s team had just played a match at the ESL Arena in Brighton and was headed for Swain Ski Center.
In the lawsuit, injured bus passengers and families of those killed are targeting the bus driver and the company that owned the bus; the Pennsylvania produce supplier whose goods were being hauled; the trucking company that was hauling the produce; a leasing company that rented a refrigerated trailer to the trucking company; and the estate of the truck driver, who was killed in the crash, along with his wife, who was among those critically injured, as the executor of his estate.
Rochester attorney Glenn Pezzulo of Culley, Marks, Tanenbaum & Pezzulo LLP, who represents three of the dozen or so named defendants in the three cases, scored a partial victory in the May 22 decision.
Xtra Corp., the leasing firm that rented a refrigerated trailer to the hauling company, was cleared of liability. Whether his other clients, J& J Trucking Inc. or Verdelli Farms Inc., will be found liable for damages is to be decided at trial, Pezzulo said. No date has been set for trial.
Van Strydonck’s three-page decision hinges on the applicability of the 2005 federal vicarious liability provision. The Graves Amendment, which specifically and narrowly exempts leasing firms from states’ vicarious liability provisions, properly preempts state law and applies to any court action begun after Aug. 10, 2005, Van Strydonck states. Xtra, whose only business is leasing, is covered by the federal amendment, the judge found.
Pezzulo argued in court papers that the Graves Amendment showed “a genuine concern for leasing companies (targeted by) lawsuits in which they have done nothing wrong” and that all three of his clients met requirements for Graves Amendment exemptions. Verdelli met the standard by having leased a refrigerated trailer from Xtra and supplying it to J&J, and J&J met the standard by having used the trailer, Pezzulo maintained.
Verdelli Farms and J&J Trucking, both of which “are not in the vehicle leasing business” cannot claim Graves Amendment protection and would have to have their liability determined at trial, the judge found.
The Graves Amendment ruling against Verdelli Farms and J&J would not prevent their being cleared of blame for the bus crash in the trial, Pezzulo said.
[email protected] / 585-546-8303

06/20/2008 (C) Rochester Business Journal

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