Yosi Trans, Inc. v Toyota Motor Credit Corp.

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[*1] Yosi Trans, Inc. v Toyota Motor Credit Corp. 2012 NY Slip Op 52059(U) Decided on October 9, 2012 Civil Court Of The City Of New York, Kings County Thompson, J. 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 October 9, 2012
Civil Court of the City of New York, Kings County

Yosi Trans, Inc., Plaintiff,


Toyota Motor Credit Corp. And XIOMARA DURANGO-NEVES, Defendant.


Appearances by:

Gerber & Gerber, PLLC

Attorney for Plaintiff

26 Court Street, Suite 1405

Brooklyn, NY 11242

London Fischer, LLP

Attorney for Defendant Toyota Motor Credit Corp.

59 Maiden Lane

New York, NY 10038

Longo & D'Apice, Esqs.

Attorney for Defendant Xiomara Durango-Nieves

26 Court Street, Suite 1700

Brooklyn, NY 11242

Harriet Thompson, J.


The facts here are quite simple. In or about August 14, 2007, Xiomara Durango-Neves (Lessee), one of the named Defendants, entered into a lease agreement with DMT Automotive Enterprise (Lessor), an authorized Toyota Dealership, for the lease of a 2007 Toyota Camry for a period of 36 months. The lease agreement provides, in pertinent part, as follows: "[t]he Lessor hereby accepts this lease and assigns to Toyota Motor Credit Corporation all rights, title and interest in the lease and in the vehicle, and Lessor's right under any guaranty executed in connection with this Lease, with full powers to Toyota Motor Credit Corporation to collect and discharge all obligations related to this lease, any guaranty and this assignment." (See Notice Regarding Assignment in "LEASE-CLOSED END MOTOR VEHICLE LEASE AGREEMENT-NEW JERSEY" dated August 16, 2007 annexed as Exhibit B to Defendant's motion).

The underlying action arises out of a two car collision that occurred on May 2, 2010 at or near the intersection of Tenth Avenue and 39th Street in Brooklyn, NY. The Plaintiff, YOSI TRANS, INC. (hereinafter referred to as "YOSI") claims that the negligent operation of the vehicle by the Defendant, XIOMARA DURANGO-NEVES, caused property damage and the loss of the use of the vehicle in the amount of $2,257.74.

In or about September 28, 2011, the Plaintiff commenced this action by the filing of a Summons and Endorsed Complaint which stated, in pertinent part , that: "[t]he accident resulted from the negligent operation of the Defendant's vehicle...in or about May 2, 2010...and without any contributory negligence on the part of the Plaintiff..." On January 5, 2012, issue was joined by the service of an answer by Defendant, Toyota Motor Credit Corporation (hereinafter "TMCC"), that denied, inter alia, all allegations of negligence and asserted the affirmative defense of federal preemption, pursuant to 49 U.S.C. §30106 (commonly referred as the "Graves Amendment), which bars state vicarious liability actions against professional lessors and renters of motor vehicles.

In this instance, TMCC now moves by Notice of Motion made returnable March 2, 2012 for an order pursuant to CPLR §3211(a)(7) to dismiss the instant complaint and cross-claims against TMCC and, to sever TMCC from this action.

In opposition, the Plaintiff asserts that TMCC failed to establish its prima facie case; arguing specifically that the presented car lease agreement is unauthenticated, inadmissable hearsay and does not qualify as a business record for the Defendant corporation pursuant to CPLR §4518; the affidavit of KEVIN SHULMAN as the Lease Collection Manager is inadmissible since its lack a proper certificate of conformity and TMCC has not demonstrated that TMCC was not negligent or liable for the accident based on claims of negligent entrustment of the subject vehicle to the Defendant, XIOMARA DURANGO-NEVES.

In reply, TMCC argues that its affiliate, DMT and itself are shielded from liability based on the "Graves Amendment" and relies on well settled authority from the First and Second Judicial Departments. Moreover, TMCC, in reply, now presents this court with a proper certificate of conformity for the affidavit of KEVIN SHULMAN and argues that he has the legal capacity as a Lease Collections Manager to authenticate the lease as a business record of TMCC based on his professional and personal knowledge of the business practices of TMCC. As equally important, TMCC correctly states that the Plaintiff asserts the cause of action of negligent entrustment for the first time in its opposition papers that is absent from the endorsed complaint. Lastly, TMCC asserts that YOSI, notwithstanding its claims that discovery is not complete, has not presented any facts to [*2]support its liability theory of negligent entrustment.

After oral argument before this court on March 26, 2012, the motion was submitted for a final disposition.


Logic dictates that the procedural claims by YOSI be resolved in the first instance. YOSI argues that the lease does not contain any assignment, is inadmissable, and unauthenticated. YOSI's arguments are without merit. As described above, the lease between DMT Automotive Enterprise and XIOMARA DURANGO-NEVES was explicitly assigned on the date of the execution of the lease. The lease provides that "all rights, title and interest in the lease and in the vehicle, and any guaranty" executed in connection with the lease, is assigned to the Toyota Motor Credit Corporation to collect and discharge all obligations thereunder. YOSI's claims are belied by the language of the assignment.

YOSI correctly states that the certificate of conformity is defective-it clearly fails to comply with CPLR §2309( c ). Notwithstanding this fact, the courts, pursuant to CPLR §2001, may at any stage of an action, permit a mistake, omission, defect or irregularity, to be corrected and disregarded, upon such terms as may be just, if a substantial right of a party is not prejudiced. This court has reviewed the case precedent cited by TMCC and is in accord. The absence of a proper certificate of conformity is not fatal to this motion but is "a mere defect in form which can be given nunc pro tunc effect once properly acknowledged". JP Morgan Chase Bank, N.A. v. S.I. Wood Furniture, 34 Misc 3d 1214(A)946 N.Y.S.2d 67 (Supreme Court, Kings County, (2012); Hall v. Elrac, Inc.,79 AD3d 427; 428 (2012);Betz v. Daniel Conti, Inc., 69 AD3d 545, 892 N.Y.S.2d 477 (2010); Matapos Tech. Ltd v. Compania Andina De Comercio Ltd, 68 AD3d 672, 673 (2009) Moccia v. Carrier Car Rental, Inc., 40 AD3d 504, 837 N.Y.S.2d 67 (2007); Smith v. Allstate Ins. Co., 38 AD3d 5 22, 832 N.Y.S.2d 587 ( A.D. 2nd Dept., 2007); Falah v. Stop & Shop Cos., Inc., 38 AD3d 522 (2007); Sparaco v. Sparaco, 309 AD2d 1029 (A.D. 2nd Dept. 2003); Nandy v. Albany Med. Ctr. Hosp., 155 AD2d 833 (1989); see also Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, C2309:3 at 348). The certificate of conformity now complies with CPLR 2309 (c).

In any event, YOSI has not disputed the authority of the notary public or the veracity of any of the statements made in the affidavit of KEVIN SHULMAN. As equally important, YOSI has not made any allegations of any prejudice or undue hardship resulting from this defect and the record in this action does not support any finding of any prejudice or hardship to YOSI. As Judge Demarest so aptly stated in JP Morgan Chase N.A. v. S.I. Wood Furniture Corp., supra, " inasmuch as the content of the documents submitted, as opposed to their form, is what is critical to the determination of this motion, [Plaintiff] cannot be permitted to seize upon any technical requirements of CPLR 2309 (c) to create delay and avoid [dismissal]) see Falah, 41 AD3d at 639; Smith , 38 AD3d at 523; Nandy, 155 AD2d at 834). Consequently, this Court deems the certificate of conformity executed by Michael N. Russo, Esq. dated March 19, 2012 that was submitted in the reply papers, proper in form and is admissible.

Now turning our attention to the substantive issues of law, YOSI asserts its negligence claim as against TMCC based on a theory of vicarious liability as the owner of the motor vehicle that was leased to XIOMARA DURANGO-NEVES pursuant to New York Vehicle and Traffic Law §388 [*3](hereinafter referred to as "NYVTL"). NYVTL§388, effective September 24, 2002, imposes vicarious liability on the owner of a motor vehicle for the negligent acts of a permissive driver and provides, in pertinent part, as follows:

"Every owner of a vehicle used or operated in this state shall be liable or responsible for death or injuries to person or property resulting from negligence in the use or operation of such

vehicle...and the owners thereof shall be jointly and severally liable hereunder."

However, the enactment of 49 U.S.C. §30106, effective August 10, 2005, commonly referred to as the "Graves Amendment", preempts such state statutes which impose vicarious liability on automobile lessors based solely on ownership, and is applicable to any action commenced on or after the effective date. The "Graves Amendment" reads, in pertinent part, as follows:

§ 30106. Rented or leased motor vehicle safety and responsibility

(a) In general - an owner of a motor vehicle that rents or leases the vehicleto a person (or an affiliate of the owner) shall not be liable under the lawof any State or political subdivision thereof, by reason of being the ownerof thevehicle (or an affiliate of the owner), for harm to persons orproperty that results or arises out of the use, operation, or possession of thevehicle during the period of the rental or lease, if—

(1) the owner (or affiliate of the owner) is engaged in the trade or businessof renting or leasing motor vehicles; and

(2) there is no negligence or criminal wrongdoing on the part of theowner (or an affiliate of the owner).

It is clear to this Court that based on the plain language of USC § 30106, as well as case authority, the U.S. Congress intended to exempt all owners and affiliated business entities engaged in the trade or business of renting or leasing motor vehicles from state vicarious liability laws. (See Green v. Toyota Motor Credit Corp., Andre Polhill and Loretta Polhill, 605 F. Supp. 2d 430, [E.D.NY 2009], "The Graves Amendment clearly intended to preempt such a policy as a matter of federal law and bar recovery against car rental and leasing companies based on vicarious liability" ; see also Graham v Dunkley v. NILT, Inc., 50 AD3d 55, 852 N.Y.S.2d 169 [App. Div., 2nd Dep't., 2008] which held that "[49 USC § 301016] has been enforced as preempting the vicarious liability imposed on commercial lessors by the Vehicle and Traffic Law § 388").

The Appellate Division, Second Department, in the case of Gluck v. Nebgen and NILT, 72 AD3d 1023, 898 N.Y.S.2d 881, (2010), affirmed the Supreme Court, Suffolk County, decision dismissing the Plaintiff's complaint, reasoning that "the respondent showed that it was an owner (or an affiliate of the owner)...engaged in the trade or business of renting or leasing motor vehicles' (49 USC § 30106[a][1]). Since there are no allegations of negligence or wrongdoing on its part, the respondent was entitled to dismissal of the complaint insofar as asserted against it for failure to state a cause of action (internal citations omitted)."

For the first time in opposition papers to this motion, YOSI argues that TMCC is liable for damages based on the theory of negligent entrustment. YOSI states that TMCC "has failed to submit any admissible evidence demonstrating that it was entirely free from any negligence, [*4]including, but not limited to negligent entrustment." ( Zelenetsky affirmation at ¶2). YOSI s arguments are without merit in fact and in law.

First, it has been repeatedly held that a party may not defeat a proper motion for summary judgment by asserting a new theory of liability for negligence for the first time in opposition papers. See Winters v. St. Vincent's Med. Ctr of Richmond, 273 AD2d 465, 711 N.Y.S.2d 892 (2000) granting summary judgment dismissing the complaint and rejecting the new theory of negligent snow removal in opposition papers as improper; Araujo v. Brooklyn Arts Academy, 304 AD2d 779, 758 N.Y.S.2d 401 (2003) reversing the Supreme Court for improperly allowing the new assertion of a defective handrail for the first time in opposition as the theory of negligence citing Winters v. St. Vincent Med. Ctr of Richmond, supra; Gustavsson v. County of Westchester, 264 AD2d 408 (1999) Alvarez v. Lindsay Park Housing Corp., 175 AD2d 225 [1991]; Golubov v. Wolfson, 22 AD3d 635, 801 N.Y.S.2d 914 (2005) affirming the Supreme Court's dismissal of the complaint on the new theory of vicarious liability raised for the first time in opposition to a motion for summary judgment as properly rejected.

Although this case involves a motion to dismiss, this court is of the opinion that the same rule of law is applicable. Certainly, YOSI must present some competent evidence to support this new theory of liability other than mere surmise. YOSI has not presented any evidence.

Second, to establish a cause of action under negligent entrustment, "the defendant must either have some special knowledge concerning a characteristic or condition peculiar to the [person to whom a particular chattel is given] which renders [that person's] use of the chattel unreasonably dangerous...or some special knowledge as to a characteristic or defect peculiar to the chattel which renders it unreasonably dangerous" (See Cook v Schapiro, 58 AD3d 664, 871 NYS2d 714 (2009); citing Zara v Perzan, 185 AD2d 236, 237 [1992]; see generally Restatement of Torts [Second] : Negligence § 390). In Cook v Schapiro, supra, the Plaintiff alleged that the Defendant's age (80 years of age) and the fact that she stated that she was "nervous" about driving the new car was insufficient evidence to defeat a motion to dismiss pursuant to CPLR 3211(a)(7) for failure to state a cause of action by the car dealership. The Appellate Division held that "in the absence of any evidence whatsoever that the car dealership's salesperson possessed special knowledge concerning a characteristic or condition peculiar to [defendant driver] that rendered her use of the car unreasonably dangerous, there can be no viable cause of action alleging negligent entrustment." The court justifiably found that "notwithstanding the tragic nature of the instant accident, but "mindful of the precedential, and consequential, future effects of [this] ruling" (Lauer v. City of New York , 95 NY2d 100 (2000), we decline to impose on an automobile salesperson in a commercial transaction such as this a duty to assess the ability or mental or physical fitness of a customer to operate a motor vehicle that is beyond the ken of the average salesperson." Id at p. 667.

In the matter of Byrne v Collins, 77 AD3d 782, 910 NYS2d 449 (2010) , a case in which the pedestrian was struck and killed on bicycle by the driver of the Defendant's rental truck, the Appellate Division reversed the Supreme Court by finding that the rental truck was not negligently entrusted to the driver. The supporting rationale was based on the fact that the agent for the rental car company verified that the driver had a restricted, yet valid, driver's license on the date of rental and the accident, and the testimony established that the driver had not used drugs on the date of the accident. Thus, the Plaintiff's evidence was insufficient to raise any triable issue as to whether or not the Defendant possessed any special knowledge concerning characteristics or conditions peculiar [*5]to the driver that rendered his use of the truck unreasonably dangerous.

Moreover, in Burrell v Barreiro, 83 AD3rd 984, 922 NYS2d 465 (2011) the Appellate Division determined that "[t]he Supreme Court also properly concluded that NILT could not be held liable on a negligent entrustment theory. NILT demonstrated that Barreiro leased the subject vehicle from the dealership rather than from NILT, and the plaintiff did not allege that NILT played a role in the dealership's decision to lease the vehicle to her. Morever, even if NILT had been involved in the decision to lease the vehicle to Barreiro, the plaintiff failed to allege that NILT possessed special knowledge concerning a characteristic or condition peculiar to Barreiro that rendered her use of the leased vehicle unreasonably dangerous".

Third, YOSI contends that "depositions have not been held and TOYOTA MOTOR CREDIT CORP has failed to submit any admissible evidence demonstrating that it was entirely free from any negligence, including but not limited to negligent entrustment (Zelenetsky affirmation at ¶2). YOSI arguments are rejected by this court. The Court of Appeals and the Appellate Division, Second Department have repeatedly dismissed complaints like the instant complaint where the Plaintiff seeks discovery to create a cause of action instead of complaints that state a cause of action. The Plaintiff's "speculative assertions and expressions of hope that further discovery may produce favorable evidence supportive of their contentions is insufficient... to defer resolution of the questions pertaining to the [negligent entrustment cause of action]" (Corrigan v. DiGuardia, 166 AD2d 408, citing Zuckerman v. City of New York, 49 NY2d 557, 562).

YOSI also improperly contends that TMCC must come forward with evidence that it is free' of any negligence. Although this case involves a motion to dismiss, the burden nonetheless shifts to YOSI to submit competent evidence to raise a triable issue of fact that TMCC was negligent; at the very least assert some facts that the saleperson had some special knowledge concerning some characteristic or condition peculiar to XIOMARA DURANGO-NEVES that rendered her use of the leased vehicle unreasonably dangerous.

As described above, the complaint provides in pertinent part that "[t]he accident resulted from the negligent operation of the Defendant's vehicle...in or about May 2, 2010...and without any contributory negligence on the part of the Plaintiff..." This claim is clearly a claim of negligence in the operation of the vehicle and does not assert any claim of affirmative negligence or negligent entrustment by TMCC. In addition to the complaint lacking any claim of negligent entrustment by TMCC, YOSI has not presented any evidence to suggest TMCC had any special knowledge about a characteristic or physical or mental condition of XIOMARA DURANGO-NEVES that would establish liability based on negligent entrustment. This court, like the Appellate Division, declines to impose on an automobile salesperson in this commercial transaction any duty to assess the ability or mental or physical fitness of XIOMARA DURANGO-NEVES to operate a motor vehicle that is beyond the ken of the average salesperson. Cook v Schapiro, supra .As equally important, KEVIN SHULMAN asserts that the lease was in effect on the date of the accident and represents that after a diligent search of the employment records of TMCC, he affirmed that the Defendant, XIOMARA DURANGO-NEVES, was not an agent, servant or employee of TMCC. His sworn statement, not rebutted by YOSI or any party or nonparty, explicitly states that TMCC does not repair, maintain, service, operate, manage, supervise, control or inspect in any manner the vehicles that are leased through its authorized dealerships like DMT Automotive Enterprise. The Lessee, the Defendant, XIOMARA DURANGO-NEVES, is responsible for repairs, maintenance, service, [*6]operation, and control of the leased vehicle. In fact, the lease agreement, in paragraph 17, provides that ... "You [Lessee] are responsible for all maintenance, repair, service and operating expenses of the Vehicle. You agree to follow the owner's manual and maintenance schedule, and to provide us [Lessor] with written proof of such maintenance..." Thus, YOSI has failed to demonstrate that the Defendant was acting for or under the control of TMCC or DMT Automotive Enterprise.

Likewise, the Plaintiff has asserted mere conclusory, and apparently, unsupported allegations of negligent entrustment. Not one scintilla of evidence has been alleged in the complaint or in the opposition papers, for that matter, to substantiate that TMCC was negligent in any manner. It appears that YOSI has no viable cause of action and merely attempts to create a cause of action. Even if this court were to accept as true the claims in the complaint, the Plaintiff must set forth some material facts to support negligent entrustment and not speculative claims that it hopes to uncover by disclosure. As Judge Wachtler so appropriately stated in his dissent in the matter of Rovell v. Orofino Realty Co., 40 NY2d 633, 357 N.E.2d 970 (1976), "although viability of a party's cause of action should not depend on the degree of skill by his counsel, this shield should not be transformed into a sword by allowing the Plaintiff's cause of action to stand under these circumstances. The burden should not be placed on the defendant to go forward with a defense to this insufficient complaint..." If there were material facts of negligent entrustment, YOSI should have plead it. Since the TMCC has already borne the expense of legal representation with respect to this motion, any further representation in this matter would only increase that burden and this court will not allow it.

Contrary to the Plaintiff's contentions, this Court finds that TMCC has established its entitlement to the protection of the "Graves Amendment" through the affidavit of KEVIN SHULMAN, the lease agreement, and the Certificate of Title for the vehicle (D, B, & C respectively). The affidavit of KEVIN SHULMAN, the Lease Collections Manager, provides that he has been employed by his company for seven years and in his current capacity for more than one and one-half years. He has the responsibility of reviewing files, car leases and managing account for collection purposes in the Northeast region including New Jersey (SHULMAN affidavit at ¶1). He sufficiently describes the operation of his company with regard to the assignments of leases and represents to this court that he has personal knowledge of the leasing and assignment process of TMCC. Contrary to the contentions of YOSI, KEVIN SHULMAN, as the Lease Collections Manager, is the person to review all leases and supporting documents of all commercial lease transactions at TMCC in the Northeast region and qualifies as the custodian of the leases and assignment records of TMCC. His affidavit sets forth with sufficient detail that the records of the leases, assignments and other related documents are records maintained by TMCC in the ordinary course of business and thus, lays the proper foundation for the admissibility of the business records presented by TMCC in Exhibits B (lease and assignment) and C (certificate of motor vehicle ownership).

In sum, the Defendant's Lease Collections Manager sufficiently established that TMCC is and always was in the business of leasing vehicles. The vehicle at bar was owned and leased by TMCC, and therefore entitled to the protections of the Graves Amendment. TMCC has also established that not only did YOSI not assert any affirmative negligence by TMCC in its complaint or opposition, YOSI did not establish any facts for this court to conclude that TMCC was liable under the theory of negligent entrustment.

Accordingly, the motion to dismiss pursuant to CPLR §3211(a)(7) is granted, and the [*7]complaint and all cross claims are dismissed with prejudice against Toyota Motor Credit Corporation only. The Clerk of the Court is directed to sever the name of Toyota Motor Credit Corporation from this action.

Toyota Motor Credit Corporation shall serve a copy of this decision and order together with the judgment entered by the Clerk of the Court upon all parties with notice of entry within 30 days of the date of this order.

This constitutes the Decision and Order of this Court.


DateHON. Harriet Thompson

Judge of the Civil Court