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Vicarious Liability for Homeowner

In an important decision rendered August 23, 2007, the Appellate Division concluded that where a car rented in New York and driven by a New York resident was involved in an accident in New Jersey with a New Jersey driver, New Jersey law would apply to shield the vehicle’s owner, Avis, from liability.

In Aria v. Figueroa, the defendant driver rented a van from Avis in New York City and struck the plaintiff, a New Jersey resident, while in New Jersey. There is a significant distinction between New York and New Jersey law concerning a plaintiff’s ability to sue the owner of a vehicle for negligence committed by the driver. Under the New Jersey common law rule, so long as the driver is not an agent of the owner, a vehicle owner is not liable for the actions of the driver. On the other hand, N.Y. Vehicle and Traffic Law 388(1) provides: “[e]very owner of a vehicle used or operated in [New York] for death or injuries to person or property resulting from negligence in the use or operation of such vehicle[,]” where such use is permissive will be liable. The court held that although New York and New Jersey both have interests supporting the application of their respective law regarding Avis’ vicarious liability, given the literal limitation on the scope of operation of the New York statute, New Jersey law should apply.

This case is important for New Jersey auto carriers insofar as plaintiff’s attorneys will often attempt to apply the New York statute whenever an accident has any tie to New York. The Court was clear here that unless the accident occurs in New York, the statute is inapplicable.

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