Miller v. White

Miller v. White  (96-310); 167 Vt. 45; 702 A.2d 392

[Filed 08-Aug-1997]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                            No. 96-310


Wade Miller                                  Supreme Court

                                             On Appeal from
    v.                                       Franklin Superior Court

Steven White                                 March Term, 1997


Linda Levitt, J.

       Joshua B. Lobe of Lobe & Burlington, for plaintiff-appellee

       R. Allan Paul and Mark G. Hall of Paul, Frank & Collins, Inc.,
  Burlington, for defendant-appellee


PRESENT:  Amestoy, C.J., Gibson, Dooley, Morse and Johnson, JJ.


       DOOLEY, J.   Defendant and plaintiff are both residents of Vermont. 
  They planned a short car trip to Quebec, Canada and, while in Quebec, were
  involved in a single-car accident in an automobile owned and operated by
  defendant and registered in Vermont.  Plaintiff was injured in the accident
  and claims defendant's negligence caused the accident and his injuries.
  Defendant seeks interlocutory review of the trial court's decision to apply
  Vermont law to this personal injury action.  We affirm.

       On the evening of April 16, 1994, plaintiff Wade Miller, defendant
  Steven White and a group of friends decided to drive from Burlington,
  Vermont to the Frontier Bar in the Province of Quebec, Canada, where the
  lower drinking age allowed them to drink legally.  The group arrived at the
  bar at approximately 10 p.m. and stayed until about 3 a.m.  While still in
  Canada and shortly after leaving the bar, defendant drove off the side of
  the road.  As a result of the accident, plaintiff, who was a passenger in
  defendant's car, suffered head injuries and fractured vertebrae.  He claims
  medical bills of $11,717, lost wages of $2,727, and other damages.

 

  Another passenger in the car brought suit against defendant in federal
  court.(FN1)

       Plaintiff claimed that the action should be governed by Vermont law,
  which has retained a fault-based compensation system for automobile
  negligence claims.  Defendant argued that the action should be governed by
  Quebec law, which provides a no-fault compensation system for injuries
  arising from automobile accidents and prohibits personal injury lawsuits. 
  Consistent with that argument, defendant moved to dismiss on the basis that
  the suit is prohibited by Quebec law.  Because no material facts were in
  dispute, both parties sought summary judgment on the choice-of-law issue. 
  The trial court, applying the "most significant relationship" test from the
  Restatement (Second) of Conflict of Laws, concluded that Vermont law should
  govern.  On appeal, defendant argues that the trial court should have
  applied the rule of lex loci delicti to resolve the choice-of-law question. 
  In the alternative, defendant contends that Quebec has a more significant
  relationship to this case than Vermont, and that Quebec law should govern.

       While this case was on appeal, we adopted the Restatement (Second) of
  Conflict of Laws test and held that the "choice of law in a tort action
  that implicates states or countries beyond Vermont will be determined by
  which state or country has the most significant relationship to the
  occurrence and the parties."  Amiot v. Ames, ___ Vt. ___, ___, 693 A.2d 675, 677 (1997); see Restatement (Second) of Conflict of Laws § 145(1)
  (1969).  We therefore affirm the trial court's use of the Restatement
  (Second) rule to resolve the choice-of-law issue in this case.  See State
  v. Styles, ___ Vt. ___, ___, 693 A.2d 734, 735 (1997) (change in law will
  be given effect while case is on direct review, except in extraordinary
  circumstances).  This case gives us the opportunity to explain the
  application of the Restatement principles to the facts and circumstances of
  a concrete case.

       The task of applying the provisions of the Restatement (Second) test
  to the facts of this

 

  case is one of law, which we review de novo.  See Amiot, ___ Vt. at ___,
  693 A.2d at 678-80; Shields v. Consolidated Rail Corp., 810 F.2d 397, 400
  (3d Cir. 1987) (trial court's application of significant relationship test
  is issue of law subject to plenary review).  Section 145(1) of the
  Restatement (Second) sets out the general standard: "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."  Section 6 of the Restatement (Second) states in
  turn the following general principles:

     (1) A court, subject to the constitutional restrictions, will follow
     a statutory directive of its own state on choice of law.

     (2) When there is no such directive, the factors relevant to the
     choice of the applicable rule of law include (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.

  The parties' expectations, the policies underlying the field of law, and
  the need for certainty carry less weight in tort law than in other areas of
  law.  See Amiot, ___ Vt. at ___, 693 A.2d  at 678.  As a result, our
  analysis stresses the relevant policies of Vermont and Quebec and the needs
  of the international system.

       The principles set forth in § 6 are general.  To aid in applying them,
  the drafters of the Restatement (Second) have developed more specific lists
  applicable to the area of law for the choice being made.  Section 145(2)
  highlights the specific contacts to be taken into account in applying the
  principles of § 6 in tort cases:


     (a) the place where the injury occurred, (b) the place where the
     conduct causing the injury occurred, (c) the domicil, residence,
     nationality, place of incorporation and place of business of the
     parties, and (d) the place where the relationship, if any, between
     the parties is centered.

 

  These contacts "are to be evaluated according to their relative importance
  with respect to the particular issue" before the court.  Restatement
  (Second) of Conflict of Laws § 145(2).

       We emphasize that the Restatement (Second) calls for an issue-by-issue
  determination of choice-of-law questions.  Thus, it is possible that within
  one case, the law of one jurisdiction will apply to one issue and the law
  of another jurisdiction to another issue.  For example, in a negligence
  action, the standard of care is normally determined by the "local law of
  the state where the injury occurred."  Id. § 157(2).  On the other hand,
  issues of damages are usually determined by the law of the parties'
  domicile, so long as the parties are both domiciled in the same state and
  there is a particular relationship between them which is centered in that
  state. Id. § 171 cmt. b.  Along the same lines, the New York Court of
  Appeals has differentiated between laws that regulate primary conduct and
  those that allocate loss after the event occurs:

     If conflicting conduct-regulating laws are at issue, the law of the
     jurisdiction where the tort occurred will generally apply because
     that jurisdiction has the greatest interest in regulating behavior
     within its borders.  But if competing "postevent remedial rules"
     are at stake other factors are taken into consideration, chiefly the
     parties' domiciles.

  Cooney v. Osgood Mach., 612 N.E.2d 277, 280 (N.Y. 1993); see also
  Restatement (Second) Conflicts of Laws § 145 cmt. d (drawing similar
  distinction in more detail).

       The question before us is what law applies to defendant's motion to
  dismiss, which claims that plaintiff's sole remedy is through the Quebec
  no-fault compensation system and not through this negligence action.  The
  motion raises competing policies that allocate postevent losses, and both
  the Restatement (Second) and relevant precedents suggest that the domicile
  of the parties is the most significant contact bearing on the determination
  of the relevant law.  To test this conclusion, we look at the competing
  interests of the domicile of the parties, Vermont, and the place of the
  accident, Quebec, in the question before us, and the needs of the
  international system, as specified in § 6 of the Restatement (Second).

       Under Quebec's Automobile Insurance Act (Act), Quebec residents
  injured in automobile

 

  accidents are compensated by the Societe de l'Assurance du Quebec (Societe)
  on a no-fault basis, regardless of where the accident occurred.  R.S.Q.
  1995 ch. A-25, Automobile Insurance Act § 7.  Nonresidents injured in a car
  accident while in Quebec may also recover under the Act, but only to the
  extent that they are "not responsible for the accident."  Id. § 9; see
  generally C. Walsh, "A Stranger in the Promised Land?" The Non-Resident
  Accident Victim and the Quebec No-Fault Plan, 37 U. New Brunswick L.J. 173,
  174-80 (1988) (summarizes different treatment of residents and
  nonresidents).  As of 1989, the maximum indemnity under the Act for the
  loss of income was $38,000 (FN2) per year.  R.S.Q. 1995 ch. A-25, supra, §
  54.  The maximum indemnity for pain and suffering was, in 1992, $125,000. 
  Id. § 73.  Separate limits exist for persons who were unemployed or
  attending school at the time of their injury.  Id. §§ 23, 24. See generally
  J. O'Connell & C. Tenser, North America's Most Ambitious No-Fault Law:
  Quebec's Auto Insurance Act, 24 San Diego L. Rev. 917 (1987) (outlining
  benefits).  Medical expenses are covered to the extent not already covered
  by a social security scheme.  R.S.Q. 1995 ch. A-25, supra, § 83.2.
  
       The Act eliminates the right of an automobile accident victim to bring
  a personal injury claim in Quebec: "Compensation under this title stands in
  lieu of all rights and remedies by reason of bodily injury and no action in
  that respect shall be admitted before any court of justice."  Id. § 83.57. 
  A Quebec resident who is injured outside of the Province retains the right
  to recover damages under the law of the place of injury, and the Societe is
  subrogated to such rights to the extent it has paid the victim's claim. 
  Id. §§ 83.59, 83.60.  The Societe is also subrogated to the rights of a
  Quebec resident injured in Quebec by a nonresident, insofar as the Societe
  has compensated the Quebec resident.  Id. § 83.61.  In such a case, the
  non-resident is liable to the Societe to the extent of his or her
  responsibility as determined by normal liability

 

  rules applicable in Quebec.  Finally, the Societe is subrogated to the
  rights of a nonresident injured in Quebec by another nonresident to the
  extent of the benefits paid to the injured party. Id.

       As with other no-fault systems, the Quebec Automobile Insurance Act
  seeks to expedite compensation to victims of automobile accidents, reduce
  the amount of tort litigation in Quebec courts, and guarantee relatively
  low automobile-insurance rates.  O'Connell & Tenser, supra, at 927; see
  also Thomas v.     Hanmer, 489 N.Y.S.2d 802, 805 (N.Y. App. Div. 1985).

       Vermont, in contrast to Quebec, retains a traditional tort system of
  recovery for automobile accidents.  Under this scheme, motor vehicle
  operators compensate third parties who have been injured by the operator's
  negligence.   More often, insurance companies provide the compensation on
  behalf of their policyholders and the important relationship is between the
  insurance company and the policyholder, rather than the victim. 
  Traditional tort systems tend to compensate victims at higher levels than
  no-fault systems and seek to optimize the level of risky activity in
  society, reduce the occurrence and severity of injury-causing events, and
  provide relatively clear standards of conduct.  See generally S. Stenger,
  No-Fault Personal Injury Automobile Insurance: The Quebec and New York
  Experiences and a Proposal for California, 14 Hastings Int'l & Comp. L.
  Rev. 505, 509 (1991); W. Beckham et al., Report to the American Bar
  Association, Towards a Jurisprudence of Injury: The Continuing Creation of
  a System of Substantive Justice in American Tort Law, 4-1 to 4-219 (1984).

       Given its policies, we conclude that Quebec has "little interest in
  the determination of whether its Automobile Insurance Act precludes the
  rights of action of an United States citizen against another United States
  citizen in an United States court."  Reisch v. McGuigan, 745 F. Supp. 56,
  61 (D.Mass. 1990).  Pursuit of this claim will not raise insurance rates in
  Quebec nor hinder the administration of its courts.  Id.; O'Connor v.
  O'Connor, 519 A.2d 13, 24 (Conn. 1986).  Quebec does not seek to deter
  negligent conduct by a fault-based determination of liability.  Indeed,
  Quebec may even prefer application of Vermont law to this case because the

 

  Societe does not have to serve as an intermediary, paying benefits to
  plaintiff and collecting from defendant's insurance carrier.  See Walsh,
  supra, at 182.

       Quebec's choice-of-law rules further suggest its weak interest in this
  type of action.  See Restatement (Second) of Conflict of Laws § 145 cmt. e,
  illus. 1 (forum's interest in applying own law to case is indication of
  overall interest).  The Quebec Civil Code states that, in actions involving
  foreign residents of the same country, the law of that country should
  apply:

     The obligation to make reparation for injury caused to another
     is governed by the law of the country where the injurious act
     occurred.  However, if the injury appeared in another country, the
     law of the latter country is applicable if the person who committed
     the injurious act should have foreseen that the damage would
     occur.

     In any case where the person who committed the injurious act
     and the victim have their domiciles or residences in the same
     country, the law of that country applies.

  Quebec Civil Code (1996) Art. 3126 (emphasis added).  Specific laws such as
  the Automobile Insurance Act override the general law of the Quebec Civil
  Code only to the extent that the preemptive effect of the specific law is
  clearly stated.3  Szeto v. Federation (La), Cie d'Assurances du Canada,
  1986 R.J.Q. 218, 220 (translated from French).  Although we do not attempt
  to decide whether the Automobile Insurance Act preempts the Code, we note
  that the Code's conflict rules are an indication of Quebec's weak interest
  in this type of action.

       In contrast, the domicile of plaintiff and defendant, Vermont, has a
  strong interest in applying its law to this case.  The domicile of the
  plaintiff has a significant interest in assuring proper compensation to the
  victim because the "social and economic repercussions of personal injury"
  will occur in plaintiff's domicile.  Walsh, supra, at 178; see also Thomas,
  489 N.Y.S.2d 

 

  at 805 (domicile of plaintiff has significant interest in guaranteeing
  adequate compensation to victim); O'Connor, 519 A.2d  at 25.  Vermont also
  has a significant interest in deterring risky behavior by domiciliaries who
  cross the northern border to take advantage of Quebec's lower drinking age,
  and generally has an interest in deterring negligent conduct by its
  licensed operators, wherever that conduct may occur.

       The needs of the international system also point to the law of the
  parties' domicile.  See Restatement (Second) of Conflict of Laws § 6(2)(b). 
  In the international sphere, it is generally considered appropriate to
  apply the laws of the domiciliary forum to tort claims that involve the
  residents of a single country, regardless of where the tort took place. 
  See Gagnon v. Lucas, 3 S.C.R. 1022, 1060 (1994); Hague Convention on the
  Law Applicable to Traffic Accidents Art. 4(a), (b) (1961).  Here, strict
  application of Quebec law to automobile accidents would result in
  preferential treatment of Quebec residents, who would reap the benefits of
  a traditional fault system outside of Quebec, while simultaneously denying
  nonresidents the full benefits of Quebec's no-fault system for accidents
  inside Quebec.  See Reach v. Pearson, 860 F. Supp. 141, 144 (S.D.N.Y. 1994)
  (application of Quebec law would produce anomalous results); Reisch, 745 F. Supp.  at 61 (same); O'Connor, 519 A.2d  at 24-25 (same). Conversely,
  application of the law of the parties' domicile to this case would
  correspond with international norms and promote consistent treatment of
  accident victims across borders.

       Thus, applying the principles of § 6 of the Restatement (Second), we
  conclude that the most important contacts for the issue before us are the
  domiciles of the parties and the place where the relationship between them
  is centered.4  Both parties are domiciled in Vermont.  Their

 

  relationship as long-time friends is centered in Vermont, and the trip
  during which the accident occurred started and ended in Vermont.  We
  conclude that the parties' residency and relationship in Vermont outweigh
  the other jurisdictional contacts with Quebec, and that Vermont law applies
  to defendant's motion to dismiss.

       Affirmed.


                              FOR THE COURT:



                              _______________________________________
                              Associate Justice





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                                  Footnotes

FN1.  The federal court case presented a similar choice-of-law issue,
  and the court held that Vermont law applied to the plaintiff's claims.  See
  Griffith v. White, 929 F. Supp. 755, 761 (D. Vt. 1996).

FN2.  This and the amount in the following sentence are expressed in
  Canadian dollars.  As of July 21, 1997, the Federal Reserve Bank of New
  York reported that one dollar Canadian is worth approximately .73 U.S.
  dollars.

FN3.  To complicate matters further, the Supreme Court of Canada
  recently adopted the rule of lex loci delecti for choice-of-law issues that
  arise under federal common law of the provinces, resulting in a direct
  conflict between Canadian federal common law and Quebec civil law.  See
  Gagnon v. Lucas, 3 S.C.R. 1022, 1050 (1994); W. Tetley, New Developments in
  Private International Law: Tolofson v. Jensen and Gagnon v. Lucas, 44 Am.
  J. Comp. L. 647, 666-67 (1996) (suggesting that Quebec conflict rules
  should prevail over Canadian common law).

FN4.  We note that every American court that has considered the
  question before us under a significant-contacts test has ruled that the law
  of the jurisdiction in which the parties are domiciled controls to
  determine which compensation system applies.  See O'Connor, 519 A.2d  at 25;
  Thomas, 489 N.Y.S.2d  at 807.  In fact, the law of the domicile of the
  defendant has controlled in each case in which neither the plaintiff nor
  the defendant was a citizen of Quebec and the accident occurred in Quebec. 
  See Reisch, 745 F. Supp.  at 64; Reach, 860 F. Supp.  at 143; Griffith, 929 F. Supp.  at 760.  Finally, the Delaware Supreme Court has ruled that the
  law of the domicile of the plaintiff applies in a case where the plaintiff
  was the victim of a hit-and-run motorist in Quebec and seeks compensation
  from his uninsured motorist carrier.  See Travelers Indem. Co. v. Lake, 594 A.2d 38, 48 (Del. 1991).