Opinion ID: 3015893
Heading Depth: 2
Heading Rank: 2

Heading: Relevant State Law Provisions on Vicarious

Text: Liability
New York law imposes unlimited vicarious liability on the owners of vehicles. It provides that “[e]very owner of a vehicle used or operated in [that] state shall be liable and responsible for . . . injuries to person[s] . . . resulting from negligence in the use or operation of such vehicle . . . .” N.Y. Veh. & Traf. Law § 388(1) (McKinney 2002). By passing § 388(1), the New York “[l]egislature intended that the injured party be afforded a financially responsible insured person against whom to recover for injuries.” Plath v. Justus, 268 N.E.2d 117, 119 (N.Y. 1971). It is beyond dispute that § 388(1) has extraterritorial scope, that is, it can apply to accidents occurring beyond New York’s borders. Farber v. Smolack, 229 N.E.2d 36, 40 (N.Y. 1967) (holding that “[t]o the extent . . . earlier decisions declined to give extraterritorial effect to [§ 388], they are overruled”). 7 This dispute requires us to assess the extent of the extraterritorial scope of § 388(1). The New York Court of Appeals has held that “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 [New York].” Fried v. Seippel, 599 N.E.2d 651, 654 (N.Y. 1992) (emphasis added). We later address whether (under New York law) the Xterra in our case falls within that exclusion.
Michigan also imposes vicarious liability on the owners of vehicles. Its law provides that “[t]he owner of a motor vehicle is liable for an injury caused by the negligent operation of the motor vehicle . . . [if] the motor vehicle is being driven with his or her express or implied consent or knowledge.” Mich. Comp. Laws § 257.401(1) (2003) (“Subsection 1”). Liability is capped, however, in certain circumstances: “[The liability of] a person engaged in the business of leasing motor vehicles who is the lessor of a motor vehicle under a lease providing for the use of the motor vehicle by the lessee for a period of 30 days or less . . . is limited to $20,000.00 because of bodily injury to or death of 1 person in any 1 accident . . . .” Mich. Comp. Laws § 257.401(3) (2003) (“Subsection 3”). In effect, vicarious liability is imposed on an owner when the driver's negligence causes an accident in another state so long as the owner-driver relationship was entered into in Michigan. Sexton v. Ryder Truck Rental, Inc., 320 N.W.2d 843, 856 8 (Mich. 1982). At the time of Chappell’s accident, Michigan law provided that it was a misdemeanor for “an owner knowingly [to] permit to be operated, upon any highway, a vehicle required to be registered . . . unless there is attached to and displayed on the vehicle . . . a valid registration plate issued for the vehicle . . . .” Mich. Comp. Laws §§ 257.255(1), (2) (2001).2 2 The parties presented (and the District Court relied on) several legal arguments implicating the significance of this provision, all involving events that took place before Powell rented the vehicle. For reasons explained below, we need not reach these arguments. For the sake of completeness, however, we set out the pertinent pre-rental facts. Assuming that Budget followed its regular procedures, after the Xterra arrived in Romulus, Michigan (on or about January 30, 2002), a Budget fleet clerk obtained Michigan license plate NVQ532 and placed that plate on one of the Xterra's seats. A “lot person” later removed the plate from the Xterra's seat and affixed it to the vehicle. After placing the plate in the Xterra, the fleet clerk wrote license plate number “NVQ532” at the top of the vehicle's certificate of origin and took the certificate to the office of Michigan's Secretary of State. Someone unknown crossed out the fleet clerk's initial reference to “NVQ532” and wrote “PHS756” next to it. Michigan license plate NVQ532 was registered for use with a 2001 Ford with Vehicle Identification Number 9
Pennsylvania follows the common law rule that, absent an employer-employee relationship, an automobile’s owner is not vicariously liable for the negligence of its driver. Solomon v. Commonwealth Trust Co., 100 A. 534, 535 (Pa. 1917); Shuman Estate v. Weber, 419 A.2d 169, 172 (Pa. Super. 1980).