Tuesday, March 17, 2009

Graves Amendment Held to Apply to Leased Trailer

Zawatsky v Barker Materials, Ltd.

(Sup. Ct., Suffolk Co., decided 1/29/2009)

Does the vicarious liability-immunizing Graves Amendment apply to leased trailers? Yes, says this court.

In relevant 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).
For purposes of the Graves Amendment, section 30102(a)(6) of Chapter 301 of Title 49 of the United States Code, entitled Motor Vehicle Safety, defines "motor vehicle" as "a vehicle driven or drawn by mechanical power and manufactured primarily for use on public streets, roads, and highways, but does not include a vehicle operated only on a rail line."

Motor vehicle rental and leasing defendants use the Graves Amendment as a tort defense to indirect or vicarious liability under state laws such as New York's Vehicle & Traffic Law § 388. In pertinent part, that statute provides:
§ 388. Negligence in use or operation of vehicle attributable to owner.

1. Every 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. Whenever any vehicles as hereinafter defined shall be used in combination with one another, by attachment or tow, the person using or operating any one vehicle shall, for the purposes of this section, be deemed to be using or operating each vehicle in the combination, and the owners thereof shall be jointly and severally liable hereunder.

2. As used in this section, "vehicle" means a "motor vehicle", as defined in section one hundred twenty-five of this chapter, except fire and police vehicles, self-propelled combines, self-propelled corn and hay harvesting machines and tractors used exclusively for agricultural purposes, and shall also include "semitrailer" and trailer" as defined in article one of this chapter, whether or not such vehicles are used or operated upon a public highway. For the purpose of this section, self-propelled caterpillar or crawler-type equipment while being operated on the contract site, shall not be defined as motor vehicles.
CIT Group/Equipment Financing, Inc., leased a 2000 HEIL trailer to Mystic Transportation, Inc., as lessee. The driver of the 2000 Kenworth truck to which the trailer was attached at the time of an accident which caused the deaths of the plaintiff's decedent, was not an employee or agent of CIT. Pursuant to the express terms of its lease agreement with Mystic, CIT was not responsible for the maintenance, operation, repair, or control of the trailer.

In granting CIT's unopposed motion for summary judgment, Suffolk County Supreme Court Justice Ralph Gazzillo held:
The language of the Graves Amendment covers the lease by Mystic of the CIT trailer. Courts have consistently held that the Graves Amendment prohibits states from imposing vicarious liability on owner-lessors such as CIT where the lessor is not negligent. The Graves Amendment has been upheld as a constitutional exercise of Congress' Commerce Clause powers.
For other posts on the Graves Amendment, click here.

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