Coats v. Hertz Corp.

May 20, 1998


                               NO. 5-97-0441

                                  IN THE

                        APPELLATE COURT OF ILLINOIS

                              FIFTH DISTRICT
_________________________________________________________________

VICKI ANN COATS, Individually   )  Appeal from the 
and as Administrator of the     )  Circuit Court of
Estate of Robert D. Coats,      )  Union County.
                                )
     Plaintiff-Appellee,        )
                                )
v.                              )  No. 95-L-13
                                )
THE HERTZ CORPORATION,          )
                                )
     Defendant-Appellant,       )
                                )
and                             ) 
                                ) 
RONALD C. WILLS and FORD MOTOR  )
COMPANY,                        )  Honorable
                                )  Bruce D. Stewart,
     Defendants.                )  Judge, presiding.
_________________________________________________________________

     JUSTICE CHAPMAN delivered the opinion of the court:
     On October 19, 1993, Roberts Coats burned to death in the back
seat of a car that had been driven into a ditch by the defendant,
Ronald Wills.  Plaintiff filed suit against Wills, and later,
plaintiff filed counts XIII, XIV, and XV of an amended complaint
against Hertz Corporation (Hertz), which had leased the car to
Wills in New York.  Those counts are based on a New York statute
that provides:
          "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 *** by any person using or operating
     the same with the permission *** of such owner."  New York
     Vehicle & Traffic Law 388 (McKinney 1993).
     Hertz filed a motion to dismiss counts XIII, XIV, and XV, and
the trial court denied it.  The trial court did, however, allow
Hertz's motion for a Supreme Court Rule 308 certification (155 Ill.
2d R. 308) of the following question:
          "Whether, under Illinois conflict[-]of[-]law doctrine,
     New York Vehicle and Traffic Law Section 388, which holds an
     owner of a vehicle vicariously liable for the negligence of
     the driver regardless of his relationship with the owner,
     should be applied to a vehicle leased in New York and involved
     in an accident in Illinois, where Illinois law holds that an
     owner is not liable for the acts of a driver unless agency or
     negligent entrustment is established."
     This court granted Hertz's application for leave to appeal. 
We review only the question certified (Lewis v. Norfolk & Western
Ry. Co., 269 Ill. App. 3d 483, 646 N.E.2d 1378 (1995)), and our
standard of review is de novo (S.B. Lexington, Inc. v. Near North
Insurance Agency, Inc., 244 Ill. App. 3d 1023, 614 N.E.2d 234
(1993)).
     In 1970 the Illinois Supreme Court rejected the lex loci
delicti doctrine and adopted the most-significant-relationship test
for deciding which state's law to apply.  Ingersoll v. Klein, 46 Ill. 2d 42, 262 N.E.2d 593 (1970).  The application of the most-
significant-relationship test requires a court to consider:  (1)
the location of the injury, (2) where the injury-causing conduct
occurred, (3) the domicile of the parties, and (4) where the
relationship of the parties is centered.  
     More recently, the supreme court has indicated that the
contacts can also be considered in light of the relevant general
principles governing all choice-of-law decisions.  Nelson v. Hix,
122 Ill. 2d 343, 522 N.E.2d 1214 (1988).  Section 6 of the
Restatement (Second) of Conflict of Laws furnishes seven general
principles:
     "(a)  the needs of the interstate and international systems,
     (b)  the relevant policies of the forum,
     (c)  the relevant policies of other interested states and the
     relative interests of those states in the determination of the
     particular issue,
     (d)  the protection of justified expectations,
     (e)  the basic policies underlying the particular field of
     law,
     (f)  certainty, predictability and uniformity of result, and
     (g)  ease in the determination and application of the law to
     be applied."  Restatement (Second) Conflict of Laws 6, at 10
     (1971).
     The parties agree that Illinois law does not impose liability
on the owner of a vehicle unless agency or negligent entrustment is
established.  Hertz contends that Illinois law should apply because
the most significant contacts in this case are in Illinois. 
Plaintiff contends that the most significant relationship to be
considered in its claim against Hertz is the contract which was
entered into in New York.  It is important to note that it is only
the claim against Hertz that involves a conflict-of-laws question,
and it is equally important to note that section 145 of the
Restatement (Second) of Conflict of Laws provides:
     "(1)  The rights and liabilities of the parties with respect
     to an issue in tort are determined by the local law of the
     state which, with respect to that issue, has the most
     significant relationship to the occurrence and the parties
     under the principles stated in 6."  (Emphasis added.) 
     Restatement (Second) of Conflict of Laws 145, at 414 (1971).
     For this issue, plaintiff relies upon Cortes v. Ryder Truck
Rental, Inc., 220 Ill. App. 3d 632, 581 N.E.2d 1 (1991), which
involved strikingly similar circumstances.  In Cortes, the
plaintiff was severely injured when the car in which he was riding
was struck from behind by a rented Ryder truck, which was driven by
an A&H Trucking Company (A&H) driver.  The plaintiff, Cortes, was
apparently from Illinois, the collision occurred in Indiana, and
the rental agreement between Ryder and A&H was executed in
Wisconsin.  A Wisconsin statute provided:
          "(1)  No person may for compensation rent any motor
     vehicle to be operated by or with the consent of the person
     renting the vehicle unless there is filed with the department
     a good and sufficient bond or policy of insurance ***.  ***
          (2)  Any person failing to comply with this section is
     directly liable for all damages caused by the negligence of
     the person operating such rental vehicle ***."  Wisconsin
     Statutes 344.51 (1985).  
After a jury verdict of approximately $15,000,000 for the plaintiff
against A&H, and a finding for Ryder on an agency basis, the trial
court granted summary judgment for the plaintiff against Ryder for
$15,000,000 less the $750,000 insurance coverage of A&H.  The
judgment against Ryder was based solely on the Wisconsin statute.
     In addressing the choice-of-law question, the Cortes court
held:
          "We initially find that the trial court correctly applied
          Wisconsin Law.  Although choice[-]of[-]law principles
          might indicate that Illinois or Indiana law applied to the
          tort of negligence committed by A&H, Ryder's liability was not
          based on negligence, directly or vicariously.  Ryder's
          liability was based on a public policy to compensate an
          injured plaintiff.  Ryder's liability to Mr. and Mrs. Cortes
          arose, therefore, through its contractual relationship as
          lessor to A&H, the negligent lessee.  That contractual
          relationship was created by the rental agreement between Ryder
          and A&H, executed in Wisconsin.  Clearly, Wisconsin had the
          most significant contacts to the lease agreement between Ryder
          and A&H, and the greatest interest in the contractual
          relationship."  (Emphasis added.)  Cortes, 220 Ill. App. 3d at
          638, 581 N.E.2d  at 4-5.  
     The emphasized portions of the quoted language apply equally
to this case.  Plaintiff's claim against Hertz is not based upon
any negligent conduct of Hertz; it is based upon the absolute
liability that is imposed upon Hertz, as an owner of a vehicle, by
the New York statute.
     Hertz attempts to distinguish Cortes because the Wisconsin
statute imposed financial responsibility on owners of vehicles who
entered into rental agreements with drivers, while the New York
statute makes no reference to any rental agreement.  This
distinction makes no real difference; both statutes impose
financial responsibility on owners of vehicles who allow others to
drive them.  In fact, it would appear that New York is even more
interested than Wisconsin in seeing that a remedy is afforded to
injured parties, since its statute imposes financial responsibility
on all owners, not just on those who enter into rental agreements
with drivers.  This policy is in keeping with the Illinois Supreme
Court's recognition in conflict-of-laws cases of paying special
attention to "providing tort remedies to its injured citizens." 
Esser v. McIntyre, 169 Ill. 2d 292, 301, 661 N.E.2d 1138, 1143
(1996).
     Therefore, we conclude that the conflict question should be
answered affirmatively.

     Certified question answered; cause remanded.
     WELCH, P.J., and HOPKINS, J., concur.