Justia.com Opinion Summary: These six lawsuits involved an accident near Geneseo, New York, where a charter bus carrying members of an Ontario women's hockey team plowed into the rear-end of a tractor-trailer parked on the shoulder of the highway. The charter bus's driver, his employer, and the company that leased the bus were Ontario domiciliaries (collectively, bus defendants), as were all the injured and deceased passengers. The tractor-trailer driver was a Pennsylvania domiciliary, as were his employer and the companies that hired the trailer (collectively, trailer defendants). In a certified question from the Appellate Division, the court was called upon to decide the choice-of-law issue presented by the lawsuits, which were brought to recover damages for wrongful death and/or personal injuries. As a preliminary matter, the court held that the lower courts were not foreclosed from engaging in choice-of-law analysis where CPLR 3016(e) must be read together with CPLR 4511(e). The court concluded that Ontario had weighed the interests of tortfeasors and their victims in cases of catastrophic personal injury, and had elected to safeguard its domiciliaries from large awards for non-pecuniary damages. Therefore, in lawsuits brought in New York by Ontario-domiciled plaintiffs against Ontario-domiciled defendants, the bus defendants in this case, the court held that New York courts should respect Ontario's decision, which differed from but certainly did not offend New York's public policy. The court held, however, that there was no cause to contemplate a jurisdiction other than New York with respect to the trailer defendants where the conduct causing injuries and the injuries themselves occurred in New York. The trailer defendants did not ask the Supreme Court to consider the law of their domicile, Pennsylvania, and they had no contacts whatsoever with Ontario other than the happenstance that plaintiffs and the bus defendants were domiciled there. Accordingly, the orders in these cases should be modified in accordance with this opinion.
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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
----------------------------------------------------------------No. 131
Sheila Elizabeth Edwards, &c., et
al.,
Appellants,
v.
Erie Coach Lines Company, et al.,
Respondents,
et al.,
Defendants.
--------------------------------No. 132
Megan Godwin, et al.,
Appellants,
v.
Trentway-Wagar, Inc., et al.,
Respondents,
et al.,
Defendants.
--------------------------------No. 133
Traci Butler,
Appellant,
v.
Stagecoach Group, PLC, et al.,
Defendants,
Trentway-Wagar, Inc., et al.,
Respondents.
--------------------------------No. 134
Courtney Cowan, et al.,
Appellants,
v.
Stagecoach Group, PLC, et al.,
Respondents,
XTRA Lease, Inc., et al.,
Defendants.
--------------------------------No. 135
Lauralee Davidson,
Appellant,
v.
Coach USA, Inc., et al.,
Respondents.
--------------------------------No. 136
Michael Roach, &c., et al.,
Appellants,
v.
Coach USA, Inc., et al.,
Respondents.
Case No. 131:
Christopher A. Seeger, for appellants.
- 1 -
- 2 -
Nos. 131-136
Glenn E. Pezzulo, for respondents J&J Trucking, et al.
Anthony J. Piazza, for respondents Erie Coach Lines
Company, et al.
Case Nos. 132 and 134:
Lawrence T. D'Aloise, Jr., for appellants.
Glenn E. Pezzulo, for respondents J&J Hauling, Inc., et al.
Anthony J. Piazza, for respondents Trentway-Wagar, Inc., et al.
Case No. 133:
Lawrence T. D'Aloise, Jr., for appellant.
Glenn E. Pezzulo, for respondents J&J Hauling, Inc., et al.
Anthony J. Piazza, for respondents Trentway-Wagar, Inc., et al.
Case Nos. 135:
Mitchell A. Toups, for appellant.
Glenn E. Pezzulo, for respondents J&J Hauling, Inc., et al.
Anthony J. Piazza, for respondents Coach USA, Inc., et al.
Case No. 136:
Mitchell A. Toups, for appellants.
Glenn E. Pezzulo, for respondents J&J Hauling, Inc., et al.
Anthony J. Piazza, for respondents Coach USA, Inc., et al.
READ, J.:
Near Geneseo, New York on January 19, 2005 a charter
bus carrying members of an Ontario women's hockey team plowed
into the rear-end of a tractor-trailer parked on the shoulder of
the highway.
Four bus passengers and the trailer's driver died;
several bus passengers were seriously hurt.
We are called upon
to decide the choice-of-law issue presented by these six
lawsuits, which were brought to recover damages for wrongful
death and/or personal injuries.
I.
Nearly a half-century ago, in Babcock v Jackson (12
NY2d 473 [1963]), we abandoned what had long been our choice-oflaw rule whereby the law of the place of the tort invariably
governed.
Because "in nearly all such cases, the conduct causing
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Nos. 131-136
injury and the injury itself occurred in the same jurisdiction"
(id. at 477, n 2), this rule offered "the advantages of
certainty, ease of application and predictability," but at the
expense of "the interest which [other] jurisdictions . . .
[might] have in the resolution of particular issues" (id. at 478;
see also Cooney v Osgood Mach., Inc., 81 NY2d 66, 72 [1993]
[place-of-the-tort theory "failed to accord any significance to
the policies underlying the conflicting laws of other
jurisdictions"]).
To "accomodat[e] the competing interests in tort cases
with multi-State contacts," we adopted the "center of gravity" or
"grouping of contacts" approach, which gave the "controlling
effect to the law of the jurisdiction which, because of its
relationship or contact with the occurrence or the parties, ha[d]
the greatest concern with the specific issue raised in the
litigation" (12 NY2d at 481).
This new method of analysis,
however, was limited to competing loss-allocation -- not conductregulating -- rules.1
As we explained in Babcock,
"[w]here the defendant's exercise of due care in the
operation of his automobile is in issue, the
jurisdiction in which the allegedly wrongful conduct
occurred will usually have a predominant, if not
exclusive, concern. In such a case, it is appropriate
to look to the law of the place of the tort so as to
give effect to that jurisdiction's interest in
regulating conduct within its borders, and it would be
almost unthinkable to seek the applicable rule in the
1
Loss-allocation rules "prohibit, assign, or limit liability
after the tort occurs," whereas conduct-regulating rules "have
the prophylactic effect of governing conduct to prevent injuries
from occurring" in the first place (Padula v Lilarn Props. Corp.,
84 NY2d 519, 522 [1994] [emphasis added]).
- 3 -
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Nos. 131-136
law of some other place" (id. at 483).
The facts of Babcock illustrate how "grouping of
contacts" worked.
In that case, a New York passenger in a car
operated by a New York driver was injured in an automobile
accident that occurred in Ontario during a weekend trip to
Canada.
We noted that the trip began and was to end in New York,
where the car was garaged, licensed and insured, and where the
driver-passenger relationship arose (id. at 482-483).
The
"guest" passenger sued the "host" driver in New York for
negligence.
At the time, the Ontario guest statute barred the
passenger from recovering damages from the driver,2 while New
York law did not.
Looking to the "grouping of contacts," we decided that
New York -- not Ontario, the place of the tort -- possessed "the
dominant contacts and the superior claim for application of its
law" as to whether the passenger should "recover[] for damages
for a wrong concededly committed" (id. at 483).
We commented
that, in this context,
"[a]lthough the rightness or wrongness of [the
driver's] conduct may depend upon the law of the
particular jurisdiction through which the automobile
passes, the rights and liabilities of the parties which
stem from their guest-host relationship should remain
constant and not vary and shift as the automobile
proceeds from place to place. Indeed, such a result .
2
This statute provided that "the owner or driver of a motor
vehicle, other than a vehicle operated in the business of
carrying passengers for compensation, is not liable for any loss
or damage resulting from bodily injury to, or the death of any
person being carried in . . . the motor vehicle" (see Highway
Traffic Act of Province of Ontario [Ontario Rev Stat (1960), ch
172, § 105 (2), quoted in Babcock, 12 NY2d at 477]).
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Nos. 131-136
. . accords with the interests of the host in procuring
liability insurance adequate under the applicable law,
and the interest of his insurer in reasonable
calculability of the premium" (id. at 483-484 [internal
quotation marks omitted]).
Over time, the "grouping of contacts" approach put into
place by Babcock evolved into a more explicit "interest
analysis."
This method of deciding choice-of-law issues
"reject[ed] a quantitative grouping of contacts" because
"[c]ontacts obtain significance only to the extent that they
relate to the policies and purposes sought to be vindicated by
the conflicting laws" (Miller v Miller, 22 NY2d 12, 17 [1968];
see also Cooney, 81 NY2d at 72 ["Of the various, sometimes
competing, schools of thought on choice of law, the one that
emerged as most satisfactory was 'interest analysis,' which
sought to effect the law of the jurisdiction having the greatest
interest in resolving the particular issue"]).
We refined our "interest analysis" so as "to assure a
greater degree of predictability and uniformity" in Neumeier v
Kuehner (31 NY2d 121, 127 [1972]), a case where a domiciliary of
Ontario was killed when the automobile in which he was a
passenger collided with a train in Ontario.
The vehicle was
owned and driven by a resident of New York, who was also killed
in the accident.
The passenger's wife and administratix, a
citizen of Canada and a domiciliary of Ontario, brought an action
for wrongful death in New York against the driver's estate and
the railway company, both of which interposed affirmative
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Nos. 131-136
defenses involving the Ontario guest statute.3
The wife,
asserting that the Ontario statute was unavailable, moved to
dismiss the affirmative defenses, and Supreme Court granted the
motion.
The Appellate Division reversed, and asked us if its
order was properly made.
We answered, "No."
Neumeier set up a three-rule framework for resolving
choice of law in conflicts settings involving guest statutes,
which by definition allocate losses after the tort occurs rather
than regulate primary conduct.
Under the first Neumeier rule,
when the driver and passenger are domiciled in the same state,
and the vehicle is registered there, the law of their shared
jurisdiction controls (id. at 128).
The second rule addresses
the situation where the driver and the passenger are domiciled in
different states, and the law of the place where the accident
occurred favors its domiciliary.
When the driver's conduct
occurs in the state where he is domiciled, which would not impose
3
When we handed down Neumeier, the Ontario guest statute
provided that the owner or driver of a motor vehicle was not
liable for damages for the injury or death of a guest-passenger
in the absence of gross negligence (see Highway Traffic Act of
Province of Ontario [Ont Rev Stat (1960), ch 172, § 105 (2), as
amd by Stat of 1966, ch 64, § 20 (2), discussed in Neumeier, 31
NY2d at 124]). We noted in Neumeier that although in Babcock we
considered that the statute's sole purpose was to protect Ontario
defendants and their insurers from collusive lawsuits, "[f]urther
research . . . revealed the distinct possibility that one
purpose, and perhaps the only purpose [of the statute], was to
protect owners and drivers against suits by ungrateful guests"
(31 NY2d at 124 [internal citations and quotation marks
omitted]).
- 6 -
- 7 liability, that state's law applies.
Nos. 131-136
Conversely, if the law of
the place where the accident occurred permits the injured
passenger to recover, then the driver, "in the absence of special
circumstances," may not interpose a conflicting law of his state
as a defense (id.; see also Cooney, 81 NY2d at 73 ["In essence, .
. . the second Neumeier rule adopts a 'place of injury' test for
true conflict guest statute cases"]).
"In other situations, when the passenger and the driver
are domiciled in different states, the rule is necessarily less
categorical" (31 NY2d at 128).
Thus, under the third Neumeier
rule, the law of the state where the accident occurred governs
unless "it can be shown that displacing that normally applicable
rule will advance the relevant substantive law purposes without
impairing the smooth working of the multistate system or
producing great uncertainty for litigants" (id.).
Since the passenger in Neumeier was domiciled in
Ontario, where the guest statute did not allow recovery, and the
driver in New York, the third rule -- the law of the place of the
tort (i.e., Ontario) -- would normally control.
We saw no reason
to apply the third rule's proviso since the wife "failed to show
that [New York's] connection with the controversy was sufficient
to justify displacing" lex loci delicti, the law of the place of
the wrong (id. at 129).
The wife did not show that ignoring
Ontario's guest statute in a case "involv[ing] an Ontariodomiciled guest at the expense of a New Yorker . . . further[ed]
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Nos. 131-136
the substantive law purposes of New York"; and "failure to apply
Ontario's law would impair . . . the smooth working of the multistate system [and] produce great uncertainty to litigants by
sanctioning forum shopping and thereby allowing a party to select
a forum [countenancing] a larger recovery than [that party's] own
domicile" (id. [internal quotation marks omitted]).
We have routinely applied the Neumeier framework to
conflicts in loss-allocation situations not involving guest
statutes.
For example, the issue in Schultz v Boy Scouts of Am
(65 NY2d 189 [1985]) was whether the doctrine of charitable
immunity would apply in a lawsuit brought by plaintiffs domiciled
in New Jersey.
The plaintiffs were the parents of two boys, one
of whom committed suicide.
They sued the Boy Scouts of America
and the Brothers of the Poor of St. Francis, Inc. for negligent
hiring and supervision of a sexually abusive brother (also a
defendant), who was supplied by the Franciscan Brothers, pursuant
to an agreement with the Roman Catholic Archdiocese of Newark, as
a teacher at a school owned and operated by the Archdiocese, and
who was a scoutmaster of a boy scout troop sponsored by the
school and chartered by the Boy Scouts.
The plaintiffs' sons
attended the class taught by the brother at the school, and were
members of his scout troop.
Acts of sexual abuse were alleged to have taken place
mostly during boy scout camping outings in New York, but also at
- 8 -
- 9 the school in New Jersey.4
Nos. 131-136
The Boy Scouts were domiciled in New
Jersey; the Franciscan Brothers, in Ohio.
At the time the
plaintiffs' causes of action arose, New Jersey and Ohio both
recognized charitable immunity while New York did not.
The Ohio
rule, however, denied immunity in actions based on negligent
hiring and supervision.5
And the plaintiffs' claims had already
been determined to have been barred by the New Jersey doctrine of
charitable immunity in an earlier action brought by the
plaintiffs in New Jersey against the Archdiocese.
We held that
New Jersey law governed, and that the plaintiffs were precluded
from relitigating its effect in light of the final determination
in their action against the Archdiocese.
Under the first Neumeier rule, New Jersey law clearly
controlled the plaintiffs' claim against the Boy Scouts because
the plaintiffs and this defendant had "chosen to identify
themselves in the most concrete form possible, domicile, with a
jurisdiction that [had] weighed the interests of charitable tortfeasors and their victims and decided to retain the defense of
charitable immunity" (id. at 199-200).
But because this was "the
first case for our review [where] New York [was] the forum-locus
4
We observed that "both parties and the dissent implicitly
assume[d]" that "the locus of the tort . . . [was] New York
because most of the [the brother's] acts were committed there"
(Schultz, 65 NY2d at 195).
5
We speculated that it was for this reason that the
Franciscan Brothers never claimed that Ohio law governed
(Schultz, 65 NY2d at 195).
- 9 -
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Nos. 131-136
rather than the parties' common domicile," we examined "the
reasons most often advanced for applying the law of the forumlocus and those supporting application of the law of the common
domicile" (id. at 200).
We identified those reasons "most often urged" to favor
the forum-locus as "(1) to protect medical creditors who provided
services to injured parties in the locus State, (2) to prevent
injured tort victims from becoming public wards in the locus
State and (3) the deterrent effect application of locus law
[would have] on future tort-feasors in the locus State" (id. at
200).
We opined that the first two reasons shared "common
weaknesses," since neither "necessarily require[d] application of
the locus jurisdiction's law, but rather invariably mandate[d]
application of the law of the jurisdiction that would either
allow recovery or allow greater recovery" (id.).
As a result,
they were "subject to criticism . . . as being biased in favor of
recovery" (id.).
Further, we observed, neither consideration was
relevant in Schultz since there was no evidence of unpaid medical
creditors or that the plaintiffs were about to become wards of
the State.
As for the third reason, we acknowledged that
although it was "conceivable that application of New York's law
in this case would have some deterrent effect on future tortious
conduct" in New York, our "deterrent interest [was] considerably
less because none of the parties [was] a resident and the rule in
conflict [was] loss-allocating rather than conduct-regulating"
- 10 -
- 11 -
Nos. 131-136
(id.).
On the other side of the ledger, we toted up
"persuasive reasons for consistently applying the law of the
parties' common domicile."
These included (1) reduced
opportunities for forum-shopping; (2) rebuttal of "charges that
the forum-locus is biased in favor of its own laws and in favor
of rules permitting recovery"; (3) "the concepts of mutuality and
reciprocity support consistent application of the common-domicile
rule" since "[i]n any given case, one person could be either
plaintiff or defendant and one State could be either the parties'
common domicile or the locus, and yet the applicable law would
not change depending on their status"; and (4) such a rule was
"easy to apply and [brought] a modicum of predictability and
certainty to an area of the law needing both" (id. at 201).
We then turned our attention to the plaintiffs' claim
against the Franciscan Brothers.
We evaluated choice of law with
respect to this defendant under the third Neumeier rule "because
the parties [were] domiciled in different jurisdictions with
conflicting loss-distribution rules and the locus of the tort
[was] New York, a separate jurisdiction"; and the law of the
place of the tort would "normally apply" (id.).
We decided,
however, that this situation fit the proviso to the third rule
"[f]or the same reasons stated in our analysis of the action
against" the Boy Scouts; namely, this result "would further [New
Jersey's] interest in enforcing the decision of its domiciliaries
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Nos. 131-136
to accept the burdens as well as the benefits of that State's
loss-distribution tort rules and its interest in promoting the
continuation and expansion of [the Franciscan Brothers']
charitable activities in the State" (id.).
In addition,
"although application of New Jersey's law may not
affirmatively advance the substantive law purposes of
New York, it will not frustrate those interests because
New York has no significant interest in applying its
own law to this dispute. Finally, application of New
Jersey law will enhance the smooth working of the
multi-state system by actually reducing the incentive
for forum shopping and it will provide certainty for
the litigants whose only reasonable expectation surely
would have been that the law of the jurisdiction where
plaintiffs are domiciled and defendant sends its
teachers would apply, not the law of New York where the
parties had only isolated and infrequent contacts as a
result of [the brother's] position as a Boy Scout
leader" (id. at 201-202).
Finally, we rejected the plaintiffs' argument that New
York public policy foreclosed application of the New Jersey
charitable immunity statute.
We emphasized the difficulty of
upsetting the choice of law in a conflicts situation on this
basis; specifically, the proponent of a public policy bar would
have to "establish that to enforce the foreign law would violate
some fundamental principle of justice, some prevalent conception
of good morals, some deep-rooted tradition of the common weal
expressed in them" (id. at 202).
Further, "the proponent must
establish that there [were] enough important contacts between the
parties, the occurrence and the New York forum to implicate our
public policy and thus preclude enforcement of the foreign law"
(id.).
We concluded that we did not need to decide whether
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Nos. 131-136
enforcement of New Jersey's charitable immunity statute offended
New York pubic policy "because there [were] not sufficient
contacts between New York, the parties and the transactions
involved to implicate our public policy and call for its
enforcement" (id. at 203).
II.
The charter bus's driver (Ryan A. Comfort), his
employer (Erie Coach Lines Company), and the company that leased
the bus (Trentway-Wagar, Inc.) are Ontario domiciliaries, as are
(or were) all the injured and deceased passengers.
The tractor-
trailer driver (Ernest Zeiset) was a Pennsylvania domiciliary, as
are his employer (Joseph French, d/b/a/ J&J Trucking) and the
companies that hired the trailer (Verdelli Farms, Inc. and V.F.
Transportation, Inc.).
The injured passengers and the
representatives of those who died (collectively, plaintiffs)
filed multiple wrongful death and personal injury lawsuits in
Supreme Court.
These split-domicile lawsuits presented an obvious
choice-of-law issue because Ontario caps noneconomic damages
where negligence causes catastrophic personal injury,6 while New
6
The clearest statement of Canada's rule appears in Andrews
v Grand & Toy Alberta, Ltd. (2 SCR 229, ¶ 98 [1978]; see also
Thornton v Prince George School District No. 57, 2 SCR 267 ¶ 38
[1978]; Arnold v Teno, 2 SCR 287 ¶¶ 108-109 [1978]). The cap
apparently applies only to "catastrophic personal injury cases"
arising from negligence and medical malpractice (see Young v
Bella, 1 S.C.R. 108 ¶¶ 62-66 [2006] [Supreme Court of Canada
rejected a nonpecuniary cap for defamation damages (¶ 65); stated
- 13 -
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Nos. 131-136
York does not cap such damages in a No-Fault case involving
serious injury.
Following extensive discovery, Erie Coach,
Trentway7 and Comfort (collectively, the bus defendants) and J&J
Trucking, the administratrix of Zeiset's estate, Verdelli Farms
and V.F. Transportation (collectively, the trailer defendants)
moved for orders from Supreme Court determining that, under New
York's choice-of-law principles, Ontario law applied to "all loss
allocation issues" in these cases.
On March 23, 2009, Supreme Court granted both motions,
noting that the Supreme Court of Canada had capped noneconomic
damages at CDN $100,000 in 1978 dollars, which was then
equivalent to US $310,000.
In reaching its decisions, the court
concluded that "[p]roper analysis" began with Neumeier.
Citing
the third Neumeier rule, the judge stated, without elaboration,
that "[a]pplying Ontario loss allocation laws [would] not impair
the smooth working of the multi-state system, and [would] advance
the relevant substantive law purposes of the jurisdiction having
the most significant connections to the allocation of loss"; and
that Ontario "clearly [had] the predominant interest[] in
applying its loss allocation laws to its citizens, whereas New
that cases other than catastrophic personal injury cases do not
raise the same policy considerations (id.); and left open the
question whether policy considerations might warrant a cap in
other circumstances (¶ 66)]).
7
Parent companies originally listed as defendants (Coach
Canada, Inc., Stagecoach Group, PLC and Coach USA, Inc.)
successfully moved for dismissal.
- 14 -
- 15 York [had] no such interest."
Nos. 131-136
Further, Supreme Court discussed
Schultz, which it regarded as analogous; it saw no reason to
consider Pennsylvania law since none of the parties requested
this.
The trial of these cases was bifurcated, and, during
the course of the jury trial on liability, the parties reached a
settlement of that issue.
In the stipulation of settlement,
placed on the record on June 17, 2009, the bus defendants agreed
to 90 percent and the trailer defendants to 10 percent liability.
Meanwhile, plaintiffs had appealed Supreme Court's orders
determining that Ontario law would govern any award of
noneconomic damages to be made at a damages trials.
The
Appellate Division affirmed (72 AD3d 1581 [4th Dept 2010]; 74
AD3d 1813 [4th Dept 2010]).
"As a preliminary matter," the Appellate Division
decided that Supreme Court "did not abuse its discretion by
taking judicial notice of Ontario law . . . despite the failure
of defendants to raise [its] applicability . . . as an
affirmative defense and to provide the substance of the law in
their pleadings in accordance with CPLR 3016 (e)" (72 AD3d at
1583).
The court subscribed to the Third Department's view,
expressed in Burns v Young (239 AD2d 727, 728 [3d Dept 1997]),
that "because CPLR 4511 (b) permits . . . judicial notice of the
laws of foreign countries that are presented 'prior to the
presentation of any evidence at the trial,'" a court has
- 15 -
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Nos. 131-136
discretion to apply the law of a foreign country notwithstanding
"a party's failure to comply with the requirement in 3016 (e)
that the substance of such laws shall be set forth in the
pleading" (72 AD3d at 1583).
Further, the court rejected
plaintiffs' argument that the Ontario cap was procedural rather
than substantive, citing Davenport v Webb (11 NY2d 392, 393
[1962]) for the "well-established" proposition that "the measure
of damages is substantive" (72 AD3d at 1583).
The Appellate Division agreed with Supreme Court's
bottom-line conclusion that the Ontario cap applied to damages
recovered from the bus and trailer defendants, but conducted
separate choice-of-law analyses.
With respect to the bus
defendants, the court looked to the first Neumeier rule, which
directs that the law of the parties' common domicile -- here,
Ontario -- governs.
The court observed that applying the law of
a shared domicile reduced the risk of forum shopping; rebutted
the charge of local bias; and served "'the concepts of mutuality
and reciprocity,'" which are "'support[ed] by the consistent
application of the common-domicile law'" (id. at 1584, quoting
Schultz, 65 NY2d at 201).
As between plaintiffs and the truck defendants, the
Appellate Division applied the third Neumeier rule, which prefers
the law of the place of the tort.
Invoking the proviso to the
third rule, the court decided, however, that Ontario law should
govern, reasoning that "while applying Ontario law '[might] not
- 16 -
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Nos. 131-136
affirmatively advance the substantive law purposes of New York,
it [would] not frustrate those interests because New York has no
significant interest in applying its own law to this dispute'"
(72 AD3d at 1585, quoting Schultz, 65 NY2d at 201).
The court
also commented that New York law created great uncertainty for
the litigants because the trailer defendants were only 10 percent
liable for the accident pursuant to the parties' settlement.
If
the trailer defendants' exposure to noneconomic damages was
unlimited while the bus defendants' liability for this item of
damages was capped, the trailer defendants might end up paying
far more than their stipulated share.
Finally, the Appellate Division concluded that
plaintiffs failed to meet the "'heavy burden' of establishing
that the application of Ontario law violate[d] the public policy
of New York" (72 AD3d at 1585, quoting Schultz, 65 NY2d at 202).
The court pointed out that "'resort to the public policy
exception should be reserved for those foreign laws that are
truly obnoxious'" (id., quoting Cooney, 81 NY2d at 79), which was
not the case here.
In any event, the Appellate Division decided
that the parties' contacts were too few and limited in scope to
implicate New York's public policy (65 AD3d at 1585, citing
Schultz, 65 NY2d at 201-202).
The Appellate Division granted plaintiffs permission to
appeal, and asked us whether its orders were properly made (2010
NY Slip Op 76969[U] [4th Dept 2010]).
- 17 -
For the reasons that
- 18 -
Nos. 131-136
follow, we answer "No" with respect to the trailer defendants.
III.
On this appeal, plaintiffs again contend that the lower
courts were foreclosed from engaging in choice-of-law analysis
because defendants did not raise the Ontario cap in their
answers.
In our view, defendants' motions were properly
entertained.
As the Appellate Division mentioned, CPLR 4511 (b)
vests Supreme Court with discretion to take judicial notice of
foreign law prior to the presentation of evidence at trial.
This
provision states that the court shall take judicial notice of
specified matters (which include the laws of foreign countries or
their political subdivisions) if a party so requests; furnishes
the court sufficient data to enable it to take judicial notice;
and advises adverse parties of its intent to ask the court to
take judicial notice.
This third requirement -- notice to
adverse parties -- must be "given in the pleadings or prior to
the presentation of any evidence at the trial, but a court may
require or permit other notice" (CPLR 4511 [b] [emphasis added]).
Defendants complied with these three conditions when they made
their pretrial motions.
Plaintiffs rely on CPLR 3016 (e), however, which
provides that "[w]here a cause of action or defense is based upon
the law of a foreign country or its political subdivision, the
substance of the foreign law shall be stated" (emphasis added).
But CPLR 3016 (e) must be read together with CPLR 4511 (e).
- 18 -
As a
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Nos. 131-136
result, while "[o]bedience to [CPLR 3016 (e)'s] pleading
requirement . . . would seem ipso facto to satisfy the trio of
requirements necessary to compel judicial notice" under CPLR 4511
(b), "omission to plead the foreign law . . . need prove no more
fatal, or serious, than any other omission under CPLR 3015 or
3016," and "the fact that the court can on its own volunteer to
give the foreign law judicial notice under CPLR 4511 (b) should
further divest CPRL 3016 (e) of any undue rigidity" (see Connors,
Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR
C3016:8 [emphasis added]).
Further, we do not detect the
complained-of unfairness or prejudice.
A split-domicile lawsuit,
such as this one, always presents a choice-of-law dilemma where
loss-allocation rules conflict.
This issue may have lain dormant
during discovery, but there was no reason for plaintiffs to
assume that it had vanished.8
Next, plaintiffs press for what they call a "single,
joint Neumeier analysis" in cases, such as this one, with
multiple tortfeasors.
As a result, the Edwards plaintiffs argue,
the trial judge "properly analyzed both sets of Defendants -those related to the bus and those related to the tractor trailer
-- together," although he reached the wrong conclusion.
In our
view, however, the correct way to conduct a choice-of-law
8
With respect to another preliminary matter raised by the
Roach plaintiffs -- whether the Ontario cap is "procedural" or
"substantive" -- we conclude that, however the cap may be
characterized, it is a loss-allocation rule subject to "interest
analysis" under New York's choice-of-law principles.
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Nos. 131-136
analysis is to consider each plaintiff vis-à-vis each defendant,
which is essentially the approach taken by the Appellate
Division.
More to the point, this is the path we ourselves have
already traveled: in Schultz, the plaintiffs likewise demanded
judgment, jointly and severally, against multiple defendants, and
we applied the Neumeier rules separately in relation to the New
Jersey-domiciled Boy Scouts and the Ohio-domiciled Franciscan
Brothers.9
The rules in the Neumeier framework, in fact, by
their very nature call for a plaintiff-by-defendant inquiry.10
Here, the Ontario cap controls any award of noneconomic
damages against the bus defendants because they share an Ontario
9
The dissent seeks to distinguish Schultz from this case on
the ground that the torts alleged in the former "were distinct
acts occurring at different times" while here, "the causes of
action arise from a single incident" (dissenting op at 3). But
regardless of the factual dissimilarities between the two cases,
the defendants in Schultz were -- just like defendants in this
case -- subject to joint and several liability for their separate
allegedly tortious acts.
10
The dissent opines that "[a]pplying a single Neumeier
analysis to jointly and severally liable defendants and having
them subject to the same laws would further the goals of
predictability and uniformity" (dissenting op at 3-4). Making
multiple defendants ultimately subject to the same lossallocation rules might make management of a case simpler for the
courts and the parties. A "single analysis," however, would not
guarantee "uniformity and predictability." For one thing, under
this approach the choice of law for loss allocation in a multistate, multi-tortfeasor case would depend on which potential
defendants a plaintiff chose to sue. The fact is, when we
departed from lex loci delicti in Babcock, we knowingly
sacrificed a degree of certainty so as to honor our sister
states' interests in enforcing their own loss-allocation rules
with respect to their own domiciliaries (see, Babcock, 12 NY2d at
478; Cooney, 81 NY2d at 72).
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- 21 domicile with plaintiffs.
Nos. 131-136
We described the relevant choice-of-
law principle and its rationale in Cooney:
"Under the first Neumeier rule, when [the
plaintiff and the defendant] share a common domicile,
that law should control. Indeed, when both parties are
from the same jurisdiction, there is often little
reason to apply another jurisdiction's loss allocation
rules. The domiciliary jurisdiction, which has weighed
the competing considerations underlying the loss
allocation rule at issue, has the greater 'interest in
enforcing the decision of both parties to accept both
the benefits and the burdens of identifying with that
jurisdiction and to submit themselves to its
authority.' Moreover, this rule reduces opportunities
for forum shopping because the same law will apply
whether the suit is brought in the locus jurisdiction
or in the common domicile, the two most likely forums"
(Cooney, 81 NY2d at 73, quoting Schultz, 65 NY2d at
198).
We had earlier made the same point at least as
forcefully in Schultz, where we stressed that "the locus
jurisdiction has at best a minimal interest in determining the
right of recovery or the extent of remedy in an action by a
foreign domiciliary for injuries resulting from the conduct of a
codomiciliary that was tortious under the laws of both
jurisdictions" (65 NY2d at 198 [emphasis added]).
We cited
substantial precedent -- Tooker v Lopez (24 NY2d 569, 576
[1969]), Miller (22 NY2d at 18-19) and Babcock (12 NY2d at 482) - to support this proposition.
In sum, Ontario has weighed the interests of
tortfeasors and their victims in cases of catastrophic personal
injury, and has elected to safeguard its domiciliaries from large
awards for nonpecuniary damages.
In lawsuits brought in New York
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Nos. 131-136
by Ontario-domiciled plaintiffs against Ontario-domiciled
defendants, New York courts should respect Ontario's decision,
which differs from but certainly does not offend New York's
public policy (see Schultz, 65 NY2d at 202 [emphasizing the
"heavy burden" borne by a party seeking to show that a foreign
law contravenes New York public policy]).
Finally, we look to the third Neumeier rule to decide
whether the Ontario cap controls with respect to the trailer
defendants.
Critically, the third rule establishes the place of
the tort -- here, New York -- as the "normally applicable" choice
in a conflicts situation such as this one, where the domicile of
plaintiffs, the domicile of the trailer defendants and the place
of the tort are different.
Initially, the fact that the trailer
defendants declined to advocate for Pennsylvania law does not
permit them to take advantage of the Ontario cap.
To rule
otherwise would only encourage a kind of forum shopping.
Moreover, the stipulation of settlement on liability is not
relevant to "interest analysis," which seeks to recognize and
respect the policy interests of a jurisdiction in the resolution
of the particular issue where a conflict of law exists.
The trailer defendants contend that Schultz controls,
meaning that their situation is comparable to that of the
Franciscan Brothers, and so the law of New York should not
govern, even though the accident occurred there.
agree.
We do not
While New York employs "interest analysis" rather than
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Nos. 131-136
"grouping of contacts," the number and intensity of contacts is
relevant when considering whether to deviate from lex loci
delicti under the third Neumeier rule -- i.e., whether even to
analyze if displacing this "normally applicable" choice would
"advance the relevant substantive law purposes without impairing
the smooth working of the multistate system or producing great
uncertainty for litigants" (Neumeier, 31 NY2d at 128).
In Schultz, New Jersey was the state where the
Franciscan Brothers supplied teachers for a New Jersey school,
where some of the acts of sexual abuse allegedly took place,
where one of the boys committed suicide, where the two boys
allegedly suffered from and were treated for psychological
injuries, where the Franciscan Brothers were said to have hired
and failed to fire the brother.
Under these circumstances, there
was every reason to evaluate, under the proviso to the third
Neumeier rule, whether New Jersey law should displace New York
law with respect to the negligent hiring and supervision claim
asserted against the Franciscan Brothers in the plaintiffs'
lawsuit.
Here, by contrast, there was no cause to contemplate a
jurisdiction other than New York, the place where the conduct
causing injuries and the injuries themselves occurred.
The
trailer defendants did not ask Supreme Court to consider the law
of their domicile, Pennsylvania, and they had no contacts
whatsoever with Ontario other than the happenstance that
plaintiffs and the bus defendants were domiciled there.
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Nos. 131-136
Accordingly, the orders in these cases should be
modified, without costs, in accordance with this opinion and as
so modified, affirmed, and the certified questions answered in
the negative.
- 24 -
Edwards, et al. v Erie Coach Lines Company, et al.; Godwin, et
al. v Stagecoach Group, PLC, et al.; Butler v Stagecoach Group,
PLC, et al.; Cowan, et al. v Stagecoach Group, PLC, et al.;
Davidson v Coach USA, Inc., et al.; and Roach v Coach USA, Inc.
Nos. 131; 132; 133; 134; 135; & 136
CIPARICK, J.(dissenting in part):
Because I believe that a single analysis pursuant to
Neumeier v Kuehner (31 NY2d 121 [1972]) should be applied where
non-domiciliary defendants are jointly and severally liable to
non-domiciliary plaintiffs in a tort action arising out of a
single incident within the State of New York, and that under such
an analysis New York law should apply to all defendants for
purposes of uniformity and predictability, I respectfully
dissent.
Neumeier sets forth a three rule framework for
determining what law should govern when there is a conflict
between the laws of the domiciles of the parties or the state in
which the tort occurred.1
The first Neumeier rule provides that
when the plaintiff and the defendant are domiciled in the same
state, the law of that state shall govern (see id. at 128).
The second rule "addresses true conflicts, where the
parties are domiciled in different States and the local law
1
While the Neumeier rules specifically referred to guest
statutes, the rules have been expanded to cover other loss
allocation conflicts (see Cooney v Osgood Mach., 81 NY2d 66, 73
[1993]).
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Nos. 131-136
favors the respective domiciliary" (Cooney, 81 NY2d at 73
[internal quotation marks omitted]).
This rule is not applicable
to this case.
The third rule provides that when plaintiff and
defendant are differently domiciled, the law of the location of
the tort shall usually apply unless "it can be shown that
displacing the normally applicable rule will advance the
substantive law purposes without impairing the smooth working of
the multi-state system or producing great uncertainty for
litigants" (Neumeier, 31 NY2d at 128).
In this matter, all plaintiffs and the bus defendants
are domiciliaries of Ontario whereas the tractor-trailer
defendants are domiciled in Pennsylvania.
The majority opines
that each defendant should be analyzed separately under the
Neumeier rules relying on Schultz v Boy Scouts of Am. (65 NY2d
189 [1985]) (see majority op at 19).
In applying a separate
Neumeier analysis to each defendant, the majority determines that
Ontario law should apply to the bus defendants, while New York
law should apply to the tractor-trailer defendants.
I disagree.
While the facts in Schultz lent themselves to a
separate analysis for each defendant, the facts in this case do
not justify such an analysis.
The plaintiffs in Schultz alleged
that the two defendants, the Boy Scouts of America and the
Brothers of the Poor of St. Francis, had each negligently hired
and supervised the same sexually abusive employee.
- 2 -
The alleged
- 3 -
Nos. 131-136
sexual abuse occurred while the plaintiffs were at a boy scout
camp in New York and continued at a school in New Jersey.
The
tortious activities in Schultz took place over varied periods of
time and in different locations.
Moreover, there was no
relationship between the defendants actions other than the fact
that they employed the same alleged bad actor.
Because the torts
were distinct acts occurring at different times, it was
appropriate for us to perform a separate choice-of-laws analysis.
In contrast, in the instant case, the causes of action
arise from a single incident in New York -- the collision of the
bus into the parked tractor-trailer -- and the liability of the
defendants is interrelated (see King v Car Rentals, Inc., 29 AD3d
205, 213 [2d Dept 2006] ["(b)ecause the liability of all of the
defendants here is thus interrelated, the application of the laws
of different jurisdictions to the several defendants may lead to
unanticipated complications as potentially inconsistent law is
applied"]).
Furthermore, a separate Neumeier analysis for
differently domiciled defendants creates additional
unpredictability and lack of uniformity in litigation that arises
from a single incident.
The purpose of the Neumeier rules is to
"assure a greater degree of predictability and uniformity, on the
basis of our present knowledge and experience" (31 NY2d at 127).
Applying a single Neumeier analysis to jointly and severally
liable defendants and having them subject to the same laws would
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Nos. 131-136
further the goals of predictability and uniformity.
In fact,
this case illustrates the potential for grossly inequitable
results when different laws are applied to defendants who are
jointly and severally liable.
Here, during a jury trial on
liability, defendants entered into a stipulation whereby they
agreed that they are 100 percent jointly and severally liable to
plaintiffs and further agreed to apportion such liability between
themselves at 90 percent to the bus defendants and the remaining
10 percent to the tractor-trailer defendants.
The majority
allows for a situation whereby the tractor-trailer defendants may
end up paying more than the bus defendants because of the cap
applied on non-economic tort awards by Ontario -- a patently
absurd result.
Therefore, to further the goal of predictability
and uniformity, this matter should be analyzed under a single
Neumeier analysis.
In analyzing this matter under a single Neumeier
analysis, it is clear that, because plaintiffs and defendants are
differently domiciled, the law of the site of the tort -- here
New York -- should apply as set forth in the third Neumeier rule
(see 31 NY2d at 128).2
Moreover, the exception to the third
Neumeier rule does not apply to these facts.
2
While Neumeier involved a situation with one plaintiff and
one defendant, I see no reason why the rule should not be applied
to situations, such as here, where there are multiple jointly and
severally liable defendants (see Restatement [Second] of Conflict
of Laws § 172).
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- 5 -
Nos. 131-136
Indeed, applying New York law here will not "impair . .
. the smooth working of the multi-state system and produce great
uncertainty for litigants by sanctioning forum shopping" (id. at
129 [internal quotation marks and brackets omitted]).
New York
was the site of the accident and the only state in which
jurisdiction over all defendants could be acquired.
New York is
a proper location for this action and there is no indication that
the cases were brought here on account of its favorable lossallocation rules.
In addition, the exception to the third Neumeier rule
should only apply when a state other then the forum-locus state
has a "great[er] interest in the litigation" (see Schultz 65 NY2d
at 197, quoting Miller v Miller, 22 NY2d 12, 15 [1968]; see also
Cooney, 81 NY2d at 72).
Here, it is uncontroverted that both
defendants are commercial enterprises that perform significant
business in the State of New York and more significantly are
frequent users of New York's highways in pursuit of their
business.
New York has a strong interest in the conduct of
business enterprises on its highways and in properly compensating
the victims of torts, whether New York or foreign domiciliaries,
committed by business enterprises on its highways (see Sullivan v
McNicholas Transfer Co., 224 AD2d 966, 967 [4th Dept 1996]
[applying Ohio law to an accident in Ohio because "Ohio has a
substantial interest in regulating conduct on its highways and in
ensuring that those who use its highway(s) will compensate those
- 5 -
- 6 -
Nos. 131-136
whom they have injured"]).
Thus, in determining which forum has the greatest
interest in this litigation, it is clear that it is New York.
Not only does New York have a strong interest in regulating the
conduct of commercial vehicles on its highways, it also has an
even stronger interest in having commercial vehicles that use its
highways maintain insurance to compensate victims of torts
committed by said vehicles.
In contrast, Ontario's primary
interest in having its law applied and capping non-pecuniary
losses is to keep motor vehicle insurance costs low (see Arnold v
Teno, 2 SCR 287 ¶ 109 [1978]).
That interest, however, need not
extend to commercial vehicles operating outside of Ontario and
subject to the loss-allocation laws of those states.
Finally, because New York is "the only State with which
[all] parties have purposefully associated themselves" (Cooney,
81 NY2d at 74) and availed themselves of New York highways for
profit and tourism, applying New York law is entirely appropriate
in this matter.
Accordingly, I would reverse the order of the Appellate
Division.
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For Case No. 131: Orders modified, without costs, in accordance
with the opinion herein and, as so modified, affirmed, and
certified questions answered in the negative. Opinion by Judge
Read. Judges Graffeo, Smith, Pigott and Jones concur. Judge
Ciparick dissents in part and votes to reverse in an opinion in
which Chief Judge Lippman concurs.
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Nos. 131-136
For Case Nos. 132, 133, 134, 135 and 136: Orders modified,
without costs, in accordance with the opinion herein and, as so
modified, affirmed, and certified question answered in the
negative. Opinion by Judge Read. Judges Graffeo, Smith, Pigott
and Jones concur. Judge Ciparick dissents in part and votes to
reverse in an opinion in which Chief Judge Lippman concurs.
Decided June 30, 2011
- 7 -
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