Statute of Limitations, But Not Graves Amendment, Held to Bar Adding Vehicle Lessor as Defendant

AUTO – GRAVES AMENDMENT – RELATION BACK DOCTRINE
Flederbach v. Fayman
(2nd Dept., decided 12/2/2008)

Since its enactment, the "Graves Amendment" has provided vehicle lessors and renters with a statutory basis for dismissing vicarious liability claims in motor vehicle accident lawsuits.  The New York courts have previously held that the Graves Amendment only applies to actions commenced by the filing of the initial summons and complaint after its August 10, 2005, enactment date, and does not bar vicarious liability claims against vehicle lessors asserted in amended pleadings in actions commenced prior to that date.  See, Jones v Bill, 10 NY3d 550 (2008); Tirado v ELRAC Inc., 54 AD3d 261 (3rd Dept. 2008).

New York Vehicle and Traffic Law § 388 provides that "[e]very owner of a vehicle . . . 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."

In pertinent part, the Graves Amendment provides:

§ 30106. Rented or leased motor vehicle safety responsibility(a) In general. An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if: (1) the owner (or an affiliate of the owner) is engaged in the trade or business of renting or leasing motor vehicles; and(2) there is no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner).

In this case, plaintiff learned during the deposition of the offending driver taken more than three years after the accident that the offending vehicle was a leased vehicle, and that Chase Manhattan Automotive Finance Corp. (now known as Chase Auto Finance Corp.) was the lessor.  Plaintiff moved for leave to serve a supplemental summons and amended complaint adding Chase as a party defendant, and Suffolk Supreme denied that motion based on its conclusion that such a supplemental claim could not be made after August 10, 2005 effective date of the Graves Amendment.

The Second Department AFFIRMED but for a different reason.  While acknowledging that the Graves Amendment does not bar vicarious liability claims against vehicle lessors asserted in amended pleadings in actions originally commenced prior to its effective date, the Second Department found that plaintiff's claim against Chase was barred by the applicable three-year statute of limitations: 

The plaintiffs argue that the claim against Chase relates back to the timely-commenced action against the operator of the offending vehicle. However, the plaintiffs failed to meet their burden of proving that the relation-back doctrine is applicable, since there is no evidence that Chase knew or should have known that, but for a mistake on the part of the plaintiff, it would have been named in the action as well (see, Buran v Coupal, 87 NY2d 173 [1995]). Indeed, there is no evidence that Chase was aware of the accident, much less the lawsuit, within the limitations period (see Williams v Majewski, 291 AD2d 816 [2002]; compare Porter v Annabi, 38 AD3d 869 [2007]). Since notice within the limitations period is "the 'linchpin' of the relation back doctrine" (Buran v Coupal, 87 NY2d 173, 180 [1995]), the denial of the plaintiffs' motion for leave to serve a supplemental summons and amended complaint adding Chase as a defendant to the action was correct. 

Thus, before the relation back doctrine under CPLR § 203 may be invoked to permit an otherwise time-barred claim, the plaintiff must demonstrate that: 

(1) both claims arose out of same conduct, transaction or occurrence; 

(2) the new party is "united in interest" with the original defendant, and by reason of that relationship can be charged with such notice of the institution of the action that he will not be prejudiced in maintaining an action on the merits; and 

(3) the new party knew or should have known that, but for an excusable mistake by plaintiff as to the identity of the proper parties, the action would have been brought against him as well.

In this case, plaintiff did not demonstrate the third condition -- that Chase knew of should have known, but for the plaintiff's mistake not suing the vehicle's actual owner, that this action would have been brought against it, as well.  Graves Amendment did not apply, but the statute of limitations did.

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