Zwiebel v Guttman

[*1] Zwiebel v Guttman 2004 NY Slip Op 50805(U) Decided on April 15, 2004 Supreme Court, Kings County Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on April 15, 2004
Supreme Court, Kings County

Solomon Zwiebel, et al., Plaintiffs,

against

Shmiel D. Guttman, et al., Defendant(s).



45021/02

Randolph Jackson, J.

Upon the foregoing papers, plaintiffs Solomon Zwiebel, Faigy Zwiebel, Yaakov T. Bron and Chanah Bron move for an order granting summary judgment on liability pursuant to CPLR 3212 against the defendants, Shmiel D. Guttman (Guttman), Williamsburg Leasing (Williamsburg) and Chase Manhattan Automotive Finance Corp., sued herein as Chase Manhattan Auto Finance Corp. (Chase). Defendants Williamsburg and Chase both cross-move for an order granting leave to amend their answer pursuant to CPLR 3025 (b) to deny ownership of the subject vehicle and assert a counterclaim for contractual indemnification against Solomon Zwiebel. Defendant Chase's cross motion also seeks to disqualify Hershel Kulefsky, Esq. as attorney for plaintiffs and defendant [*2]Williamsburg's cross motion seeks summary judgment pursuant to CPLR 3212 dismissing the complaint as against it.[FN1]

This personal injury action stems from a September 1, 2002 automobile accident that occurred about 11 AM in Essex County New York on the southbound side of Interstate 87. Plaintiff Solomon Zwiebel, the lessor of the vehicle involved in the accident and a passenger therein, together with plaintiff Yaakov T. Bron, also a passenger in the vehicle, and their co-plaintiff spouses, suing derivatively, allege that defendant Guttman negligently drove the vehicle causing them injuries. More specifically, they claim that Guttman lost control of the vehicle and crashed into a rock cut alongside the roadway.

Guttman explained in his deposition testimony that he sought to pass on the left a slower moving trailer in the right lane. However, the trailer's movement, which Guttman characterized as "going not straight" caused him "to go more left," contact the shoulder rumble strips and go out of control. He then steered right and left and, according to the police accident report, went "off the east side of I-87 striking a rock cut & flipping over landing on his wheels."

Plaintiffs' Summary Judgment Motion

Plaintiffs thereafter initiated this suit in October 2002 against Guttman and both Williamsburg, which leased the GMC Yukon suburban vehicle involved herein, and Chase, who received Williamsburg's assignment of the lease and provided its financing. Williamsburg and Chase acknowledged vehicle ownership in their answer and proceeded with discovery. Plaintiffs claim that no non-negligent explanation exists for the accident, which allows granting summary judgment against Guttman. In addition, plaintiffs claim that Williamsburg and Chase, as owners, bear vicariously liability for Guttman's actions as driver of the vehicle.

Guttman and Chase each assert an emergency doctrine defense. They contend that the trailer's movement and possible entry into the left lane constitute a sudden and unforseen situation which nullifies negligence if a jury believes that Guttman took reasonable and prudent action in such emergency context. Chase additionally argues that a jury could also consider the 2002 GMC Yukon's poor handling characteristics as evidenced by a rollover resistance rating given by the United States Department of Transportation's National Highway Traffic Safety Administration. That rating, according to Chase, indicates the 2002 Yukon's greater likelihood to roll over than other vehicles involved in a single-vehicle crash. Williamsburg and Chase also have sought leave to amend their answer, as mentioned above, in part to deny vehicle ownership herein which, in turn, would provide a further defense against Guttman's actions as driver. Those defendants argue that their status as long term vehicle lessors and out of possession holders of security interests exempt them from the vicarious liability which Vehicle and Traffic Law (VTL) § 388 imposes on owners [*3]for permissive users' negligence. Williamsburg separately contends that breaches of the lease also nullify vicarious liability. Such breaches allegedly include, for example, simply allowing Guttman to drive the vehicle and allowing use of the vehicle in Canada. Paragraph 23 of the lease in this regard permits just the lessee, plaintiff Solomon Zwiebel, to operate the vehicle and permits such operation to occur only within the United States.[FN2]

Plaintiffs reply that prevailing case law fails to relieve Williamsburg and Chase for any breach of the lease conditions and that the trailer's movement within its own lane constitutes a routine traffic condition, not a sudden, unforeseeable occurrence. Guttman, they believe, needed to anticipate such movement. In addition, they further believe that driving over rumble strips, a safety installation, neither constitutes an emergency situation nor requires an immediate, uncontrolled response. Consequently, they view the emergency doctrine as inapplicable in this case and regard Guttman as causing, not confronting, the alleged emergency. Plaintiffs also cite the absence of an expert's affidavit discussing the 2002 Yukon's stability or connecting Guttman's loss of control to any alleged instability. They discount the NHTSA's rollover resistance rating as inapplicable to this highway maneuvering case. The rating, they observe, relates to the vehicle's overturning after the loss of control and crash and fails to bear on the driver's and other defendants' liability herein.

The Cross Motions For Leave To Amend

Plaintiffs also oppose granting Williamsburg and Chase leave to amend their answers in all respects. They substantively assert that the amendment to deny ownership for purposes of VTL § 388 lacks merit under prevailing case law and that vicarious liability thus validly flows from Guttman's alleged negligence. Plaintiffs also procedurally cite the nearly one year delay in moving to amend which now comes, they observe, after they filed their note of issue on October 3, 2003. Presently allowing assertion of contractual indemnification counterclaims, plaintiffs indicate, would necessarily force re-opening of discovery with attendant delay considering that they waived Williamsburg's and Chase's depositions based upon the prior defense position. Plaintiff Solomon Zwiebel also claims that defending the indemnification counterclaims would prejudice him by generating an added representation expense that his insurance carrier would have previously borne.

Plaintiffs equally set forth a variety of substantive objections to the indemnification counterclaims. They allege that the lease's indemnification clause, which provides the basis for the counterclaims, (1) violates CPLR 4544 because it appears in less than eight point print, (2) violates the anti-subrogation rule which prohibits an insurance company from recovering from its own insured for the very risk for which the insured was covered, (3) violates public policy, (4) impermissibly followed the lessee's signature by appearing on the reverse side without appropriate reference on the front of the lease and (5) constitutes an unconscionable provision in the lease, which plaintiffs characterize as a contract of adhesion.

They further argue that (6) ambiguity exists in the indemnification provision which, when strictly construed against Chase, the drafting party, should exclude Solomon Zwiebel's indemnity obligation for vicarious liability, particularly given his status as an unsophisticated party, that (7) Williamsburg and Chase have waived indemnification by their course of conduct and by choosing [*4]not to assert a counterclaim, that (8) Chase, itself waived indemnification by initially agreeing to representation by Williamsburg's counsel, that (9) Williamsburg as a non-owner could not receive indemnification from Solomon Zwiebel and could not assign such non-existent indemnity right to Chase and that (10) Williamsburg's lease assignment to Chase, in any event, cannot increase Solomon Zwiebel's liability by imposing an indemnity obligation upon him considering that Chase, as an assignee, cannot receive more than Williamsburg could obtain from Solomon Zwiebel.

Chase counters that its new counsel moved to amend within a week after taking over its representation, that no scheduling of an appearance before a trial part has even occurred and that permitting plaintiffs to conduct further discovery regarding the counterclaim can alleviate any prejudice to them. It substantively responds that (1) the lease agreement presents clear and legibly printed terms, not less than eight points in depth and in compliance with CPLR 4544 requirements, that (2) anti-subrogation principles fail to apply herein where Chase has procured excess liability policies that exclude the lessee, Solomon Zwiebel, and permissive users from coverage, that (3) public policy permits excluding the lessee and permissive users from excess coverage when a primary motor vehicle liability policy provides coverage for the lessee and all permissive users, that (4) the lease referenced terms on its reverse side which Solomon Zwiebel, a competent person, acknowledged thereby binding him, that (5) (a) the lease agreement fails to qualify under relevant case law as a contract of adhesion and that (5) (b) the indemnification provision emerges as an enforceable, not an unconscionable, contract responsibility of the lessee.

Chase further replies that (6) the indemnification clause clearly and unambiguously mandates its reimbursement for all sums in excess of primary coverage which necessarily embraces statutory vicarious liability, that (7) no indemnification waiver occurred,[FN3] that (8) it retained its own counsel, separate from Williamsburg's counsel, to presently assert an indemnification counterclaim and that (9 and 10) Solomon Zwiebel's rights and duties remained the same under the law which requires a lessee to obtain motor vehicle liability insurance. Consequently, the mere assignment of the lease, which Williamsburg fully assigned, simply preserved rather than increased Zwiebel's statutory obligations to maintain liability insurance.

Williamsburg's Summary Judgment Motion

Williamsburg claims that its denial of vehicle ownership and permissive use, the alleged breaches of the lease, previously discussed, and its contractual indemnification counterclaim enable finding no liability on its part and granting it summary judgment. Plaintiffs, on the other hand, have asserted that ownership extends to Williamsburg and Chase herein, have thus opposed the amendment motion, have concurrently challenged the alleged breaches of the lease as a basis for avoiding vicarious liability and further oppose summary judgment considering the absence of discovery on the newly pleaded defenses. Chase's Cross Motion To Disqualify Counsel

Chase claims that an inherent conflict exists between Solomon Zwiebel's indemnity obligation to it for damages above his primary coverage and the liability obligations he owes to the co-plaintiffs, the injured passengers and their spouses. Their natural preference to recover significant damage awards allegedly conflicts with Solomon Zwiebel's equally natural preference to minimize such recoveries to avoid triggering his indemnity obligation. Chase thus argues that allowing the [*5]same counsel, the Law Office of Herschel Kulefsky, to represent these conflicting interests compromises loyalty owed clients and requires that law office's disqualification herein. Chase further argues that the onset of litigation and the possible receipt of confidential information from adverse parties makes the entire removal of that law office appropriate in this case.

Mr. Kulefsky's law office question the disqualification motion as a delaying litigation tactic, attributes the alleged conflict to the belated amendment motion seeking to assert the indemnification counterclaims and, in any event, attempts to diffuse the alleged conflict. The Kulefsky law office first observes that no suit directly exists by Yaakov T. Bron against Solomon Zwiebel and then presents affidavits from Solomon Zwiebel and Yaakov T. Bron consenting to dual representation by the Kulefsky law office and waiving any conflict of interest. Solomon Zwiebel recognizes in his affidavit that he stands subject to Chase's indemnity claim for money it pays to Yaakov Bron and hopes that Mr. Bron "receive[s] such compensation even if ultimately CHASE will seek indemnification from me." Mr. Bron concurrently states in his affidavit that "if CHASE did seek indemnification from SOLOMON ZWEIBEL for monies paid out to me, I would not permit any recovery that would ultimately cause SOLOMON ZWEIBEL to suffer any personal financial loss."[FN4] Hence, the Kulefsky law office views the disqualification motion as unwarranted.

Discussion

Plaintiffs' Summary Judgment Motion Re Guttman

Governing case law, which plaintiffs present, instructs that "An innocent passenger . . . who, in support of [a] motion for summary judgment, submits evidence that the accident resulted from the driver losing control of the vehicle, shifts the burden to the driver to come forward with an exculpatory explanation" (Siegel v Terrusa, 222 AD2d 428, 428-429). Here, Guttman and Chase offer the emergency doctrine defense based on a trailer's movement within its own lane and possible entry into the left lane as Guttman sought to pass it on its left.

However, trial judges must determine whether a "qualifying emergency" exists, i.e., "a sudden and unexpected circumstance" where "the actor has not created the emergency." (Caristo v Sanzone, 96 NY2d 172, 174, 175). Reasonably viewing the evidence presented in this case simply shows a passing maneuver by Guttman leading to contact with the roadway's shoulder rumble strips. Guttman, himself thus at least initiated the situation and a "driver should reasonably have anticipated and been prepared to deal with the situation with which [he] was confronted" (Pincus v Cohen, 198 AD2d 405, 406). Furthermore, "[w]here a defendant driver fails to be aware of the potential hazards presented by traffic conditions . . . the emergency doctrine is inapplicable (see Maye v Liben, 282 AD2d 661; Pappas v Opitz, 262 AD2d 471; Pincus v Cohen, 198 AD2d 405, 406)" (Cascio v Metz, 305 AD2d 354, 356). Contacting rumble strips, a safety precaution, like encountering potentially [*6]hazardous traffic conditions, fails as a "qualifying emergency," particularly under this case's circumstances.

Defendants Guttman and Chase equally fail to present an expert's affidavit linking the loss of control during highway maneuvering to the vehicle's alleged instability. Such "issues are not within the ken of lay people" (Mevorah v King, 303 AD2d 657, 658). The affirmations of opposing counsel cannot substitute for needed expert opinion, as required in medical malpractice cases, to defeat summary judgment (Scally v Weintraub, 295 AD2d 334, 335; Spicer v Community Family Planning Council Health Ctr., 272 AD2d 317, 318). The opposing defendants also offer no admissible proof relating the NHTSA's rollover resistance rating to highway maneuvering. That stability rating, in any event, concerns the vehicle's overturning after a crash, not, as here, the underlying basis for the driver first losing control. Consequently, the absence of an exculpatory explanation warrants granting plaintiffs' summary judgment motion against the driver, defendant Guttman.

Plaintiffs' Summary Judgment Motion Re Williamsburg and Chase and

The Cross Motions To Amend To Deny Ownership

Extending this ruling to defendants Williamsburg and Chase on the basis of vicarious liability necessarily involves considering that portion of their amendment motion which seeks to deny vehicle ownership. Although leave to amend a pleading should be freely given absent prejudice to the opposing party (see CPLR 3025 [b]; Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959; Charleson v City of Long Beach, 297 AD2d 777), leave should be denied if the proposed amendment is palpably insufficient as a matter of law or is totally devoid of merit (see AYW Networks v Teleport Communications Group, 309 AD2d 724; Leszczynski v Kelly & McGlynn, 281 AD2d 519)" (Ruddock v Boland Rentals, Inc., ___ AD2d ___, 2004 NY Slip Op 01369). Indeed, "'a court must examine the underlying merit of the proposed claims, since to do otherwise would be wasteful of judicial resources'" (Toscano v Toscano, 302 AD2d 453, 454 quoting Morgan v Prospect Park Assocs. Holdings, 251 AD2d 306).

Here, Williamsburg seeks to deny ownership but not title ownership of the vehicle.[FN5] VTL § 128 defines a vehicle owner as "[a] person, other than a lien holder, having the property in or title to a vehicle . . ."[FN6] Retaining title to the vehicle leased to Solomon Zwiedel therefore makes Williamsburg an owner (Sullivan v Spandau, 186 AD2d 641, 642-643). VTL § 388 (1) and (3), in turn, make vehicle owners, as defined in VTL § 128, vicariously liable for a driver's negligence.[FN7] [*7]

Chase, which seeks to simply deny ownership [FN8] and which characterizes itself as a long-term lessor holding a security interest, recognizes that VTL § 388 (3) excludes a secured party from the ownership definition.[FN9] The assigned lease, though, charges rent, imposes several conditions upon the lessee,[FN10] requires insurance coverage for the lessor as a an additional insured and even states in point 30, as plaintiffs highlight, that "this is a true lease and you [designated earlier as the "lessee"] will not own or have any equity in the vehicle . . . unless you exercise your purchase option." The lessee must either return the vehicle where Chase specifies at the end of the term or then pay Chase $21,418.04, about half the purchase price, to acquire the vehicle.

These requirements indicate Chase's ownership interest in the vehicle and distinguish this case from those Chase cites involving contracts for sale with security interests disguised as leases. Here, "it cannot be said that the lease was one intended for security" (Sullivan v Spandau, 186 AD2d at 643; cf. Hassan v Montuori, 99 NY2d 348, 353 [categorizing First Union Auto Finance, Inc, a lessor like Chase herein, as an owner], and Motor Veh. Acc. Indem. Corp. v Continental Natl. Am. Group Co., 35 NY2d 260, 263-264 [recognizing that car rental agencies renting vehicles for profit over long periods of time constitute owners for purposes of VTL § 388]). Hence, Williamsburg and Chase emerge as owners under VTL § 388, their amendment motion to deny ownership lacks merit and the above summary judgment can include their vicarious liability.

The alleged breaches of the lease in allowing Guttman to drive and allowing use of the vehicle outside the United States [FN11] provide no relief from such vicarious liability. The Court of Appeals in Murzda v Zimmerman (99 NY2d 375, 380) reaffirmed its holding in the Motor Veh. Acc. [*8]Indem. Corp. case (35 NY2d at 265) that "where the lessee of a rental vehicle permits another person to operate it, the rental company is deemed to have constructively consented to such use, even where the lessee violated the rental agreement by entrusting the rental car to another" (Lancer Ins. Co. v Republic Franklin Ins. Co., 304 AD2d 794, 796). Constructive consent, in turn, requires "'the third-party driver's permissive use vis-a'-vis the lessee' (Murdza v Zimmerman, supra at 381)" (id. at 797). Here, no question exists that Solomon Zwiebel, the lessee and passenger in the 2002 Yukon, allowed Guttman to drive the vehicle. Hence, plaintiffs' summary judgment properly embraces Williamsburg's and Chase's vicarious liability.

The Contractual Indemnification Counterclaim: Procedural Aspects

The other aspect of the cross motions to amend, leave to assert a contractual indemnification counterclaim, involves different substantive considerations but the procedural objections pose no bar to allowing this relief. "'Mere lateness is not a barrier to the amendment. It must be lateness coupled with significant prejudice to the other side, the very elements of the laches doctrine.' (Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR 3025:5, p 477)" (Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959). "[L]eave to amend should be granted where there is no significant prejudice or surprise to the defendants [citations omitted], and where the documentary evidence submitted in support of the motion indicates that proposed amendment to the complaint may have merit (see Eagle Ins. Co. v Queens Tunnel Serv. Sta., 287 AD2d 434)" (Holchendler v We Transport, Inc., 292 AD2d 568, 569).

Here, the lease itself contains the lessee's indemnity obligation [FN12] thus providing a documentary basis for the counterclaim and such indemnity provisions within lease agreements have received judicial approval (Elrac v Ward, 96 NY2d 58, 77-78). Chase's new counsel swiftly acted after retention to assert this right, no initial appearance in the trial part has even occurred and tightly scheduled discovery concerning the counterclaim can at least minimize the manageable prejudice. The Appellate Division, Second Department's Holchendler's decision (292 AD2d at 569) allowed an amendment motion to assert a new cause of action on the eve of trial and reminded trial courts that "'the failure to offer an excuse for the delay does not, alone, bar amendment absent a showing of prejudice resulting from the delay' (Northbay Constr. Co. v Bauco Constr. Corp., 275 AD2d 310, 312; Hilltop Nyack Corp. v TRMI Holdings, 275 AD2d 440)" (id.). This case, given the factors mentioned, deserves equivalent procedural treatment. The alleged prejudice of requiring Solomon Zwiebel to retain defense counsel to the counterclaim presently appears speculative. His primary insurance carrier could provide such representation for him under the circumstances and a declaratory judgment action against the carrier, if necessary, would provide a further remedy. The cross movants thus hurdle procedural objections to the indemnification counterclaims which necessitates addressing the substantive disputes.

[*9]The Contractual Indemnification Counterclaim: Substantive Aspects

Conflicting affidavits about the depth of the print in the lease agreement would require a hearing to resolve but CPLR 4544, alternatively, makes an agreement containing clear and legible print admissible.[FN13] The lease meets this test upon visual inspection (see Exhibit C annexed to Chase's cross-motion).

The lease also comports with "the anti-subrogation rule [which] provides that an insurance company cannot recover from its own insured for the very risk for which the insured was covered (see North Star Reins. Corp. v Continental Ins. Co., 82 NY2d 281)" (Storms v Dominican College of Blauvelt, 308 AD2d 575, 577). Solomon Zwiebel, as lessee, obtained liability insurance coverage of $100,000 per person, $300,000 per accident and $50,000 for property damage, in compliance with his lease obligation [FN14] and exceeding the lower statutory minimum requirements of $25,000/$50,000 and $10,000.[FN15] Chase also obtained excess insurance coverage but, as statutorily permitted,[FN16] excluded lesses and permissive users. Hence, anti-subrogation principles present no bar to Chase's excess carrier seeking indemnity for awarded sums exceeding the lessee's underlying policy limits as the Court of Appeals allowed in Elrac v Ward (96 NY2d at 77-78).

The provision in Chase's excess policy excluding lessees and other permissive users violates no public policy and supports allowing indemnification considering that the lessee maintains four times the amount of statutorily required coverage (State Farm Mutual Automobile Ins. Co. v John Seere Ins. Co., 288 AD2d 294, 296; Davis v DeFrank, 33 AD2d 236, 242 affd 27 NY2d 924 ["There is no reason of policy to refuse to enforce a clear exclusionary provision which excludes liability only when there is other full legal coverage"]).

Solomon Zwiebel's acknowledgment herein that two sides to the lease agreement exist, binds him regardless whether he actually read those terms (Morris v Snappy Car Rental Inc., 189 AD2d 115, 120 affd 84 NY2d 21). "[O]ne who signs a document without any valid excuse for having [*10]failed to read it is 'conclusively bound by' its terms (Gilman v Chase Manhattan Bank, 73 NY2d 1, 11)" (id.). "If the signer could read the instrument, not to have read it was gross negligence; if he could not read it, not to procure it to be read was equally negligent; in either case the writing binds him" (Pimpinello v Swift & Co., Inc., 253 NY2d 159, 162-163).

Mr. Zwiebel no where indicates that he sought someone's assistance to explain the lease provisions to him and thus allegedly being unaware of the indemnification provision fails to prevent its enforcement. "Although plaintiff would use to [his] advantage the fact that [he] did not read the terms of the rental agreement and was unaware of its indemnification language, this is simply no bar to enforcement of the rental agreement" (Morris, 84 NY2d at 30).

The Morris case also rejected "plaintiff's contention that the indemnification agreement is void and unenforceable because it was part of an adhesion contract or the result of procedural unconscionability in the contract formation process" (id.). Earlier Court of Appeals case law instructed to evaluate such claims "by whether the party seeking to enforce the contract has used high pressure tactics or deceptive language in the contract and whether there is inequality of bargaining power between the parties" (Sablosky v Gordon Co., 73 NY2d 133, 139). Solomon Zwiebel has failed to show improper tactics, deceptive language or no freedom of choice or that anyone compelled him to sign the lease. Dealership choices and transportation options existed and here, as in the Morris case, the adhesion contract and unconscionability arguments carry no traction.

No ambiguity affects the indemnity provision as it clearly requires the lessee's reimbursement for all sums exceeding primary coverage.[FN17] The provision obligates the lessee for "all liability . . . arising from the use . . . of the vehicle." Such wording, contrary to Solomon Zwiebel's claims, covers the statutory vicarious liability in VTL § 388 (1) which concerns negligence in a vehicle's use or operation attributable to an owner.[FN18]

Plaintiffs' waiver and assignment arguments also carry no weight. Both Williamsburg and Chase now permissibly seek leave to assert an indemnification counterclaim and Chase retained its own counsel, in part, for this very purpose. In addition, VTL § 345 (b) (3), as supplemented by the lease's insurance coverage terms,[FN19] imposed the liability insurance duty on Solomon Zwiebel, not the lease's assignment. Hence, the assignment simply maintained Mr. Zwiebel's insurance obligation without increasing it. Analyzing and rejecting all the substantive objections thus also makes granting leave appropriate for defendants Williamsburg and Chase to assert an indemnification counterclaim.

Williamsburg's Summary Judgment Motion

The conclusion that Williamsburg and Chase stand as owners in this case and the recognition that case law, as discussed earlier, fails to relieve those defendants of vicarious liability for the alleged breaches of the lease mandate denying Williamsburg's summary judgment motion seeking a no negligence finding against it.

The Disqualification Motion [*11]

Both Chase and plaintiffs' counsel recognize that an inherent conflict exists between Solomon Zwiebel's understandable desire to minimize his indemnity obligations and his co-plaintiffs' equally understandable desire to maximize their recovery. The Kulefsky law office's concurrent representation of all plaintiffs therefore contravenes the New York Code of Professional Responsibility's disciplinary rules and ethical considerations.[FN20] The representation arrangement itself creates the problem even if Chase's belated indemnity counterclaim amendment now brings the conflict into sharp focus and would necessitate delay for successor counsel. "[T]he court's function is to take such action as is necessary to insure the proper representation of the parties and fairness in the conduct of the litigation" (Solomon v New York Prop. Ins. Underwriting Assn., 118 AD2d 695, 695).

The conflict remains despite Yaakov Bron's previously quoted statement that "I would not permit any recovery that would ultimately cause SOLOMON ZWEIBEL to suffer any personal financial loss." This ambiguous statement hardly suffices for a release limiting his recovery against Williamsburg and Chase to no greater than Solomon Zwiebel's primary coverage under the lease. In addition, the other co-plaintiffs, Chanah Bron, Mr. Bron's spouse, and Faigy Zwiebel, Mr. Zwiebel's spouse, present no such releases. Consequently, the Kulefsky law office's disqualification must presently occur for all plaintiffs including Solomon Zwiebel [FN21] to avoid even the possibility of compromising fiduciary confidences in this already on-going litigation (Greene v Greene, 47 NY2d 447,453 [party's right to select attorney of his or her choosing "is not limitless. The attorney may not accept employment in violation of a fiduciary relationship . . ."]; Rose Ocko Foundation, Inc. v Liebovitz, 155 AD2d 426, 428). Accordingly, it is

ORDERED that plaintiffs' summary judgment motion on liability is granted in its entirety, and it is further

ORDERED that Williamsburg's and Chase's cross motions for leave to amend are denied to the extent that such motions seek to deny vehicle ownership; and it is further

ORDERED that Williamsburg's and Chase's cross motions for leave to amend are granted to the extent that such motions seek for each defendant to assert a contract indemnification counterclaim; and it is further [*12]

ORDERED that Williamsburg's cross motion for summary judgment seeking a no negligence finding against it is denied; and it is further

ORDERED that Chase's cross motion to disqualify the law office of Herschel Kulefsky from representing plaintiffs herein is granted with leave to the Kulefsky law office to seek reconsideration should each of the plaintiffs separately execute a release limiting recovery against Williamsburg and Chase to Solomon Zwiebel's primary coverage under the lease herein.

The foregoing constitutes the decision and order of this court.

E N T E R,

J. S. C.

Footnotes

Footnote 1:The same defense counsel, the Law Offices of Composto & Fitzgerald, previously represented both defendants Williamsburg and Chase. That defense counsel cross-moved for leave to serve an amended answer and for summary judgment in behalf of both those defendants. However, a stipulation, dated November 18, 2003, substituted a new attorney of record, Wilson, Elser, Moskowitz, Edelman & Dicker LLP, as defendant Chase's counsel. That firm brought a separate cross motion, mentioned above, to amend Chase's answer and to disqualify plaintiffs' attorney. Williamsburg's counsel has not withdrawn its earlier filed cross motion so that motion remains but only in behalf of defendant Williamsburg.

Footnote 2:That lease provision pertinently provides that: "[y]ou agree not to use or permit use of the vehicle: . . . (d) by anyone other than an authorized driver, which shall be the Lessee(s) to this Lease; or (e) outside the United States, without our prior consent . . ."

Footnote 3:Williamsburg's motion to amend, as mentioned above, also seeks leave to assert an indemnification counterclaim.

Footnote 4:Mr. Bron's affidavit and Mr. Zwiebel's own affidavit both use the spelling Zweibel rather than Zwiebel which otherwise appears throughout the court papers. The actual signature on the affidavit appears to show Zwiebel as the correct spelling and the police accident report, which requires the name "exactly as printed on [the] registration" states Zwiebel in the vehicle owner box on the form. Hence, Zweibel appears as simply a misspelling in the referenced affidavits.

Footnote 5:Williamsburg's amendment motion, which originally applied to both Williamsburg and Chase but which now applies only to Williamsburg, seeks to deny paragraph 15 of the complaint which identifies Williamsburg as an owner of the subject vehicle but seeks no change of its admission to paragraph 16 of the complaint which identifies Williamsburg as title owner of the vehicle.

Footnote 6:The term "owner" in VTL § 128 also includes "any lessee . . . of a motor vehicle . . . having the exclusive use thereof, under a lease or otherwise, for a period greater than thirty days."

Footnote 7:That provision pertinently provides in subdivision 1 that: "[e]very 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, in the business of such owner or otherwise, by any person using or operating the same with the permission, express or implied, of such owner." That provision then pertinently provides in subdivision 3 that: "[a]s used in this section, 'owner' shall be as defined in section one hundred twenty-eight of this chapter and their liability under this section shall be joint and several."

Footnote 8:Chase's prior counsel had sought to deny both paragraphs 22 and 23 of the complaint which identifies Chase as owner and title owner of the vehicle. Chase, through its present counsel, "seeks to amend its Answer, denying ownership of the subject vehicle . . ." Interestingly, Chase's opposition to plaintiffs' summary judgment motion states that "[t]he Motor Vehicle Lease between Chase and Solomon [Zwiebel] in actuality transferred all indicia of ownership, save for title alone, onto the lease defendant Zwiebel." {Emphasis added].

Footnote 9:That provision pertinently provides that: "[a] secured party in whose favor there is a security interest in any vehicle out of his possession, shall not be deemed an owner within the provisions of this section."

Footnote 10:For example, the lease prohibits, in paragraph 21, modifying or painting the vehicle without the lessor's consent and gives any installed accessories, equipment or parts to the lessor.

Footnote 11:The Canadian driving, as plaintiffs aptly observe, "is irrelevant because this accident happened in New York."

Footnote 12:Paragraph 33 of the lease, entitled Indemnity, pertinently provides that: "you [the lessee] will hold us harmless and indemnify us from any and all liability, loss and expense including court costs and attorney fees arising from the use, maintenance, condition or possession of the vehicle . . . except that in the case of a claim for bodily injury, such indemnity shall be limited to damages in excess of your primary coverage."

Footnote 13:That provision pertinently provides that: [t]he portion of any printed contract or agreement involving a consumer transaction . . . where the print is not clear and legible or is less than eight points in depth or five and one-half points in depth for upper case type may not be received in evidence in any trial, hearing or proceeding on behalf of the party who printed or prepared such contract or agreement, or who caused said agreement or contract to be printed or prepared . . ." [Emphasis added]. See Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR 4544, p 337: "The statute, as originally enacted, used the word 'and,' which created a loophole for drafters of contracts that required a magnifying glass to read but were technically clear and legible. The Legiuslature plugged the loophole in 1979 by changing 'and' to 'or.'"

Footnote 14:See lease paragraph 27.

Footnote 15:VTL § 345 (b) (3).

Footnote 16:VTL § 345 (f) provides that: "[s]uch motor vehicle liability policy may, however, grant any lawful coverage in excess of or in addition to the coverage herein specified and such excess or additional coverage shall not be subject to the provisions of this article."

Footnote 17:See fn 13 and lease paragraph 33.

Footnote 18:See fn 8.

Footnote 19:See lease paragraph 27.

Footnote 20:22 NYCRR § 1200.24 (a) pertinently provides that: "[a] lawyer shall decline proffered employment if the exercise of independent professional judgment on behalf of a client . . . would be likely to involve the lawyer in representing differing interests . . ." Ethical Consideration 5-17 pertinently provides that: "[t]ypically recurring situations involving potentially differing interests are those in which a lawyer is asked to represent . . . co-plaintiffs or co-defendants in a personal injury case . . ."

Footnote 21:Solomon Zwiebel's concurrent but separate execution of a release with his co-plaintiffs limiting recovery against Williamsburg and Chase to his primary coverage under the lease appears the only possible way of avoiding the conflict herein and allowing the Kulefsky law office to continue representing all the plaintiffs. Such releases would appear to moot both the indemnification counterclaim and Solomon Zwiebel's need to otherwise retain counsel other than the Kulefsky law office to represent him on the counterclaim.