Opinion ID: 3015893
Heading Depth: 3
Heading Rank: 1

Heading: Scope of the Statute

Text: Noting that “[t]he facts here fall in the middle ground between Farber and Fried because the Xterra was not registered in New York but Powell did drive it there,” the District Court interpreted these cases to mean that “New York courts would conclude that the New York legislature did not intend . . . to cover vehicles that are registered outside of New York and that were not being used or operated in New York at the time of an accident.” Budget, 304 F. Supp. 2d at 647–48. We disagree with this creative legal interpretation. The Fried Court stated that “the holding in Farber ha[d] little bearing on the statutory construction problem presented [in Fried], since, by virtue of its prior ‘use . . . or operat[ion] in [New York],’ the accident vehicle in Farber was indisputably within section 388's substantive coverage . . . .” Fried, 599 N.E.2d at 654 (emphasis added). This statement by New York’s highest Court is irreconcilable with the District Court’s view and is arguably sufficient of itself to settle the statutory construction issue before us. As in Farber, by virtue of its prior use and operation in New York, the accident vehicle here is indisputably within § 388’s substantive coverage. 15 Yet we need not labor, as the District Court did, to discern the scope of New York’s law from the disposition of its precedents, for the Fried Court explicitly drew a line for us: “vicarious liability imposed by section 388(1) does not extend to owners of vehicles that have never been registered, used, operated or intended for use within this State.” Fried, 599 N.E.2d at 654 (emphasis added). The vehicle in this case was used, operated and intended for use within New York. Lest we be left with doubt as to the meaning of the seemingly clear rule announced in Fried, we refer to New York’s intermediate courts for further guidance. “Where an intermediate appellate state court rests its considered judgment upon the rule of law which it announces, that is a datum for ascertaining state law which is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise.” West v. Am. Tel. & Tel. Co., 311 U.S. 223, 237 (1940). In Vasquez v. Christian Herald Ass’n, 588 N.Y.S.2d 291, 292 (N.Y. App. Div. 1992), only five months after Fried, the First Department of the Appellate Division of New York’s Supreme Court cited Fried as authority for the applicability of § 388(1) to facts similar to this case. 6 Leave to appeal the intermediate appellate court’s 6 In Vasquez one plaintiff was a New York resident (the other an Ohio resident), the owner of the vehicle was a Pennsylvania resident (a co-defendant was a New York resident), and the accident took place in Pennsylvania. The Court explained that 16 decision in Vasquez was denied by the Court of Appeals.7 In short, the District Court’s conclusion that § 388(1) does not “cover vehicles that are registered outside of New York and that were not being used or operated in New York at the time of an accident,” Budget, 304 F. Supp. 2d at 648, runs afoul of New York’s precedent. To the contrary, the provision applies unless the accident vehicle “ha[s] never been registered, used, operated or intended for use within [New York].” Fried, 599 the “[d]efendant . . . erroneously relie[d] upon . . . Fried . . . [because] [an agent of the New York defendant (not the owner)] had operated the subject van to and from New York with [the New York defendant]'s permission.” Id. The use of the car in New York was enough to extend liability under New York law to the Pennsylvania owner of the vehicle notwithstanding that the accident took place in Pennsylvania. We also note that the United States District Court for the Eastern District of New York has decided, albeit in a not precedential opinion we cite solely as persuasive authority, that § 388(1) applied to an out-of-state accident involving a car not registered in New York on the basis of prior use and operation of the vehicle in the State. Roberts v. Xtra Lease, Inc., No. 98 CV 7559, 2001 WL 984872, at  (E.D.N.Y. June 25, 2001). 7 When a state’s highest court denies review, the policy reasons for following an intermediate court decision (absent compelling evidence to the contrary) are strengthened. See, e.g., Comer v. Texaco, Inc., 514 F.2d 1243, 1244 (5th Cir. 1975). 17 N.E.2d at 654 (emphasis added). Thus, the provision applies to our case.