Motor Club of Amer v. Hanifi, 4th Cir. (1998)
Motor Club of Amer v. Hanifi, 4th Cir. (1998)
Motor Club of Amer v. Hanifi, 4th Cir. (1998)
COUNSEL
ARGUED: Joanna Jesperson, EPSTEIN, BECKER & GREEN, P.C.,
Washington, D.C., for Appellant. Richard Thomas Radcliffe, Jr.,
CHURCH & HOUFF, P.A., Baltimore, Maryland, for Appellees. ON
BRIEF: David E. Manoogian, Peyton S. Isaac, EPSTEIN, BECKER
& GREEN, P.C., Washington, D.C., for Appellant.
_________________________________________________________________
OPINION
WIDENER, Circuit Judge:
In this case, Motor Club of America Insurance Company appeals
the April 3, 1996 order of the United States District Court for the District of Maryland granting summary judgment in favor of two New
York defendants, Ebrahim Hanifi and Gulagha Sultan. The district
court ruled that Maryland's law governed the issue of liability for the
automobile accident so the plaintiffs had to establish the identity of
the driver and show his negligence. The court therefore rejected the
application of New York Traffic and Vehicle Law 388 which
imposes vicarious liability on the owners of vehicles registered in
New York for the negligence of any permissive users, even when the
car is outside of New York. The court decided that the plaintiffs could
not establish a genuine issue of fact as to the identity of the driver of
the vehicle which caused the accident and thus summary judgment
was appropriate as to both defendants.
We reverse the grant of summary judgment because we find the
plaintiffs did establish a genuine dispute of fact as to the identity of
both the driver and the car. Additionally, we find summary judgment
as to Hanifi was also improper where the district court erred in not
applying New York Section 388.
I.
The plaintiffs, Lorraine Weil, and the Wilkes--Lawrence, Michael
and Carol--resided in New Jersey at the time of the accident. The
defendants, Ebrahim Hanifi and his brother-in-law Gulagha Sultan are
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residents of New York. At all times relevant to this action Mrs. Weil
had an uninsured motorist policy with plaintiff-intervenor Motor Club
which provided her with insurance coverage in the event that she
became injured, or otherwise incurred damages from the actions of an
uninsured motorist. The Wilkes were not insured by Motor Club.
On May 11, 1991 at about seven a.m. the plaintiffs were traveling
south in the passing lane on Interstate 95 in a vehicle owned and
driven by Robert Weil, Mrs. Weil's husband. According to the plaintiffs and witnesses the accident resulted when a white car from the
northbound lanes crossed over the median strip into the southbound
lanes just in front of the plaintiffs' car. The police report indicates that
the white car performed a U-turn into the southbound lanes, and while
it did not strike the plaintiffs' car, in swerving to evade the white car,
the plaintiffs' car struck another and overturned. The white car left the
scene heading south.
The occupants of two other southbound cars witnessed the accident
and reported what they saw to police. John McGovern was driving
south on Interstate 95 with his wife Elda McGovern in the passenger
seat when they saw the accident and proceeded to follow the white
car as it drove off. They both saw the license plate and Mrs. McGovern recorded it. Shortly thereafter they stopped at a fire station to call
the police. Officer James Gruver later included that information in a
supplement to the accident report. The accident was also witnessed by
Colleen Young. She too followed the white car, and was observed by
the McGoverns as they both trailed the white car. Miss Young also
remembered the number and relayed the information to the police.
Officer Gruver recorded the license plate number as New York tag
number VZY-653, the same license number reported by both the
McGoverns and Miss Young. Officer Gruver investigated the tag
number and determined that Ebrahim Hanifi owned a white car with
that license plate. The police report reflects that the McGoverns identified the occupants of the cars as three black males, while Young said
they were three white males.
Hanifi admits that in May 1991 he owned a white car with New
York plates VZY-653. However, he states that in April 1991 he had
loaned the car to his brother-in-law, Sultan. Sultan's statement cor3
On January 17, 1995 defendants Hanifi and Sultan filed their first
motion for summary judgment against the plaintiffs, asserting that
there was insufficient evidence to prove the identity of the driver of
the white vehicle which caused the accident. In their respective
answers to interrogatories, Hanifi admitted ownership of a white fourdoor Oldsmobile with the New York registration "VZY-653," and
Sultan admitted that he possessed the white car on the day of the accident, and that it was parked at his house. Motor Club opposed the
motion for summary judgment on the grounds that it was premature,
that the prior intercompany arbitration had found that Hanifi's car had
caused the accident, and that there was sufficient evidence from
which to find the defendants liable for the accident. On March 2, 1995
the court found that Motor Club had fulfilled its burden of coming
forward with evidence to create a genuine dispute of fact and denied
the defendants' motion for summary judgment. The defendants
moved in April for reconsideration of their motion for summary judgment, which the court denied on May 1, 1991.
On April 10, 1995 the defendants had moved to dismiss the thirdparty complaint against Motor Club. Motor Club opposed the defendants' motion and simultaneously filed its own motion to intervene in
the lawsuit. The court denied the motion to dismiss and granted Motor
Club's motion to intervene. On May 24, 1995 Motor Club filed its
complaint in intervention suing both the individual plaintiffs and the
defendants for declaratory relief and indemnification. Motor Club
alleged that because the accident was caused by a known vehicle, the
one owned, insured, and registered to Hanifi and in the admitted
exclusive possession of Sultan, Motor Club as the uninsured motorist
carrier for Mrs. Weil was not responsible for her damages.
In their third attempt to secure summary judgment, on November
15, 1995, Hanifi and Sultan renewed their motion for summary judgment. In opposition to the motion, Motor Club argued that New York
Vehicle and Traffic Law 388 applied, such that Hanifi, as the vehicle owner, should be held vicariously liable for any permissive driver,
and that Sultan would be liable for his negligent operation. On January 4, 1996 a different judge than the one who had denied the previous motions reversed the March 2, 1995 order denying summary
judgment, and granted the motion for summary judgment as to Sultan.
The court found there was insufficient evidence as to the identity of
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the driver of the vehicle to create a genuine issue of fact. That same
order denied the motion for summary judgment as to Hanifi because
Section 388 "seem[ed] clearly to apply" and therefore created an issue
of fact as to Hanifi's liability as the owner of the car. Thus, as the
case went to trial, Motor Club remained as an intervened plaintiff
against the individual plaintiffs and against defendant Hanifi.
On April 2, 1996 the matter came on for a jury trial before the
same judge who had issued the January 4 order dismissing Sultan and
finding that because of the application of Section 388, Hanifi could
not obtain summary judgment in his favor. Motor Club represents that
present at trial were plaintiff Lorraine Weil, defendant Hanifi and former defendant Sultan, as well as Motor Club by its counsel. Also
present under subpoena by Motor Club was eyewitness Colleen
Young and a passenger in her car, Heather Young. Further, video
depositions of John and Elda McGovern had been recorded by Motor
Club for use at trial, and Motor Club states that the police officer who
wrote the police report, Officer Gruver, had been subpoenaed and was
in attendance.
On the day of trial, prior to the impaneling of the jury, counsel for
Hanifi submitted without prior notice to Motor Club a pre-trial memorandum arguing that Section 388 and its vicarious liability did not
apply and that Maryland law should govern. Over Motor Club's
objections the court heard oral argument and the court reversed the
portion of its January 4, 1996 order with respect to Section 388 and
held on the next day that Section 388 did not apply. The court ruled
that under the rule of lex loci delicti Maryland's substantive law prevented the application of the New York statute in deciding the issue
of liability for the Maryland accident. Although Motor Club requested
extra time to brief the issue and pointed out that it had in its preparations for trial relied on the prior ruling of the court that New York law
applied, the district court denied Motor Club's request for additional
time and a continuance of the trial date.
The court entered its final order on the next day, April 3, 1996
granting judgment in favor of Hanifi, and entering judgment in favor
of Hanifi and all defendants against the plaintiffs and Motor Club pursuant to Federal Rule of Civil Procedure 50. This judgment incorporated by reference all prior rulings into its final order. Motor Club
6
the day of the accident, and that Hanifi's car was in Sultan's driveway
in New York. The defendants note that the individual plaintiffs
responded to the defendants' first motion for summary judgment by
stating that they had no facts with which to oppose the motion. However, Motor Club did oppose the motion, and submitted the affidavits
of Hanifi and Sultan admitting ownership and possession, respectively, of the car, but asserting that it was in New York. Later, after
winning the initial summary judgment motion, in its opposition to the
defendants' motion for reconsideration and then in its opposition to
the defendants' renewed motion for summary judgment, Motor Club
submitted several other documents. These submissions included: a
copy of the police report; a transcription of the statement by John
McGovern who observed the white car and recorded the license plate;
the transcribed statement of the driver of the plaintiffs' car, Robert
Weil, that the car was white; the handwritten statement of plaintiff
Lorraine Weil who also observed the white car; and finally, Motor
Club's own interrogatory responses.
During oral argument defendants' counsel contended that the plaintiffs could not rely on their opposition to the summary judgment
motion on the police report, which contained the license plate number, because that report contained hearsay. Thus, the defendants
argue, the motions for summary judgment were properly granted as
to both Hanifi and Sultan where the plaintiffs had not established a
material issue of fact as to the identity of the white car which caused
the accident, and where the defendants had submitted their own sworn
affidavits denying involvement in the accident which they buttressed
with sworn statements from four other individuals who stated the car
was in New York on the morning of the accident.
The defendants' hearsay objection to the admissibility of the police
report, which establishes a material issue as to the involvement of
Hanifi's car in the accident, is not well taken. The report does contain
hearsay, for at some point after the accident eyewitnesses telephoned
the police with their observations as to the license plate of the car they
saw perform the U-turn, and those statements are recorded in the
report. However, the defendants waived any objection to the admissibility of that report when they submitted it to the court on at least
three separate occasions with their motions for summary judgment.
Our review of the record indicates that the defendants submitted the
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report with at least the following: (1) their denied motion for summary judgment of January 17, 1995; (2) their denied motion for
reconsideration of the summary judgment of April 27, 1995; (3) their
opposition filed April 27, 1995 to a motion of Allstate, and (4) their
renewed motion for summary judgment of November 15, 1995
(granted as to Sultan). Indeed, Motor Club noted in its very first opposition to summary judgment that the defendants had submitted the
police report as their Exhibit 2, and that the report contained Colleen
Young's description of the car bearing Hanifi's license plate as the
vehicle causing the accident. Having resolved that evidentiary issue
and determined the facts properly before the district court at summary
judgment, we now address the propriety of granting summary judgment to defendants Sultan and Hanifi.
V.
Even aside from any extraterritorial effect of New York's Traffic
and Vehicle Section 388, the district court's initial ruling denying
summary judgment to Hanifi and Sultan was correct given the dispute
of fact presented. Thus, its later rulings to the contrary should be
reversed.
Maryland requires proof of an owner's negligence, or some sort of
agency to hold the owner liable for the driver's negligence.
Mere ownership of a car does not impose liability for injuries caused in the driving of it. Liability, when it exists, is
not for the car, but only for the act or omission of the person
driving. And when the owner has not himself been the negligent cause of an injury, he can be held vicariously liable
only when the negligence has been that of his servant
engaged in his affairs.
Schneider v. Schneider, 152 A. 498, 499 (Md. 1930). With this
requirement in mind we review the conflicting nature of the facts
properly before the district court at summary judgment.
A.
Hanifi admitted he owns a 1987 white four door Oldsmobile Delta
88 with New York license plate VZY-653. He admitted that he had
9
loaned that car to his brother-in-law at the time of the accident. His
brother-in-law's sworn statement is to the same effect and categorically states that he had exclusive possession, that the car was in his
driveway in New York, and that it was not involved in the accident.
Four family members similarly stated the car was in that driveway on
the morning in question.
In contrast, the police report contains the statements of eyewitnesses, apparently unrelated to the Weils, whose statements put Hanifi's car at the scene of the accident in Maryland. One George Reid
told the reporting officer that the accident was caused by a white car
that made a U-turn through the median. Colleen Young advised the
officer that the car was a white four door Oldsmobile or Buick with
New York license VZY-653 which caused the accident, and that it
was occupied by three black males. While John McGovern indicated
the car was driven by three white males, his report was otherwise consistent inasmuch as the report indicates he described the vehicle as a
mid-size white car with New York registration.2
The conflicting statements illustrate a genuine dispute of material
fact both as to the identity of the car and the driver. The district court,
in its first ruling on the summary judgment issue, correctly applied
Rule 56(c) when it denied the motion stating as follows:
The motion will be DENIED. Summary judgment cannot be
granted unless there is no genuine dispute of material fact.
Fed. R. Civ. P. 56(c). Here, the opponent of the motion,
Motor Club of America Insurance, has fulfilled its burden of
bringing forward evidence that a reasonable fact finder
could use to justify a finding in its favor by a preponderance
that Hanifi was the owner -- and Sultan, with his permission, the operator -- of the "phantom car" whose illegal
U-turn caused the accident, injuring the plaintiffs. It may
well be that the movants and their friends swear the car was
_________________________________________________________________
2 McGovern's statement in the police report does not indicate the number of the New York license plate, thus the report seems to indicate that
only Young provided the actual plate number. However, McGovern's
subsequent video deposition is unambiguous that he called in the plate
number.
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would probably follow, not fashion a rule which we, as an independent federal court, might consider best." Lowe's North Wilkesboro
Hardware v. Fidelity Mut. Life Ins. Co., 319 F.2d 469, 472 (4th Cir.
1953). Accordingly, we are of opinion that the existence of Maryland
common law which is different from Section 388 would not of itself
cause the Maryland Court of Appeals to deny full faith and credit to
a statute of a sister State which requires the liability insurance of a
resident of the latter State to compensate innocent victims injured in
an accident in Maryland. As explained below, Section 388 provides
a statutory cause of action which supplements existing common law
owner liability. Additionally, the policies underlying Section 388 mirror those recognized by the Court of Appeals as guiding Maryland
law, so that Maryland's public policy would not be offended by
applying the New York statute.
Section 388 provides as follows:
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.
N.Y. Vehicle and Traffic Law 388. "In New York, the owner of a
motor vehicle is liable for the negligence of one who operates the
vehicle with the owner's express or implied consent." Horvath v. Lindenhurst Auto Salvage, 104 F.3d 540, 542 (2d Cir. 1997). The New
York Court of Appeals has explained the policy behind the statute as
follows.
Vehicle and Traffic Law 388 is part of the legislatively
prescribed system for protecting innocent victims of automobile accidents by assuring that there will be a financially
responsible party who is available to answer in damages. . . .
In addition to making the owner of a vehicle vicariously liable for the negligence of anyone driving it with permission,
the statute requires that all vehicle owners procure insurance
to cover the liability it creates (see, Vehicle and Traffic Law
388[1], [4]). This linkage of an owner's vicarious liability
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icy did not require the application of Maryland law in part on the
basis that those cases did not involve a Maryland statute, but as here,
involved judge-made common law. Bethlehem Steel Corp., 498 A.2d
at 608-09 (distinguishing Texaco v. Vanden Bosche, 219 A.2d 80, and
Mutual v. Bruchey, 238 A.2d 115, finding "no Maryland public policy
sufficiently strong to prevent the application of the Virginia statutes").
In fact, absent a statement by the legislature that something is contrary to Maryland public policy, the Maryland Court of Appeals is not
hesitant to enforce another state's law even though it would produce
a distinct or opposite outcome to that which would result under Maryland law. In Texaco v. Vanden Bosche, 219 A.2d 80, 83 (Md. 1966),
the court stated that "[r]ecent thinking is that a public policy which
will permit a state to refuse to enforce rights created by the law of a
sister state must be very strong indeed." Similarly, in Harford Mutual
Insurance Co. v. Bruchey, 238 A.2d 115 (1968), the court found that
a Virginia statute preventing wives from suing for loss of consortium,
while contrary to the Maryland rule, did not violate public policy. The
court reconfirmed the language of Texaco that "there is a heavy burden on him who urges rejection of foreign law on the ground of public policy." 238 A.2d at 117-18.
To the same effect, Rhee v. Combined Enterprises, Inc., 536 A.2d
1197 (Md. App. 1988), held that Maryland public policy was not so
offended that a sister-state's law should not be enforced. There the
court found that to "circumvent the announced public policy of Maryland barring interfamilial tort suits is not so`hurtful or detrimental to
the interest and welfare of . . . [Maryland's] citizens' as to violate the
principle of comity which would permit the law of New Jersey [which
permitted interfamilial torts] to be applied in Maryland courts." 536
A.2d at 1201. Rhee relied on Linton v. Linton, 420 A.2d 1249, 1250
(Md. App. 1980), in which the Court of Special Appeals had noted
that "a `heavy burden' is shouldered by one who seeks to block a
cause of action in Maryland courts on the premise that the case is contrary to this state's public policy."
Perhaps most telling, however, is Kramer v. Bally's Park Place,
Inc., 535 A.2d 466 (Md. 1988), in which the Court of Appeals
enforced a gambling contract from New Jersey, where the form of
gambling in question was legal, even though such gambling was ille19