| Cioffi v S.M. Foods, Inc. |
| 2015 NY Slip Op 05145 [129 AD3d 888] |
| June 17, 2015 |
| Appellate Division, Second Department |
[*1]
| Frederick M. Cioffi et al., Respondents, v S.M.Foods, Inc., et al., Appellants. (And a Third-Party Action.) |
Baxter Smith & Shapiro, P.C., White Plains, N.Y. (Sim R. Shapiro andKimberley A. Carpenter of counsel), for appellants S.M. Foods, Inc., GFI Boston, LLC,PLM Trailer Leasing, Daniel E. Burke, and Ryder Truck Rental, Inc.
White, Quinlan & Staley, LLP, Garden City, N.Y., for appellants Atlanta FoodsInternational, Russell McCall's, Inc., and Doug Jay.
Grant & Longworth, LLP, Dobbs Ferry, N.Y. (Jonathan Rice and Marie R.Hodukavich of counsel), for respondents.
In an action to recover damages for personal injuries, etc., the defendants S.M.Foods, Inc., GFI Boston, LLC, PLM Trailer Leasing, Daniel E. Burke, and Ryder TruckRental, Inc., appeal, as limited by their brief, from so much of an order of the SupremeCourt, Westchester County (Smith, J.), dated November 20, 2012, as granted that branchof the plaintiffs' motion which was for leave to renew and reargue their opposition to themotion of the defendant Ryder Truck Rental, Inc., pursuant to CPLR 3211 (a) (7) todismiss the complaint insofar as asserted against it or, in the alternative, for summaryjudgment dismissing the complaint insofar as asserted against it, and, upon renewal andreargument, vacated the determination in an order of the same court dated August 13,2012, granting the motion of the defendant Ryder Truck Rental, Inc., and thereupondenied the motion, and granted that branch of the plaintiffs' motion which was for leaveto serve an amended complaint, and the defendants Atlanta Foods International, RussellMcCall's, Inc., and Doug Jay appeal (1), as limited by their brief, from so much of thesame order as granted that branch of the plaintiffs' motion which was for leave to servean amended complaint and denied their cross motion for an order directing that the actionbe tried without a jury and severing the legal and equitable claims for trial, and (2), aslimited by their notice of appeal and brief, from so much of an order of the same courtdated January 11, 2013, as granted their motion pursuant to CPLR 3211 (a) to dismissthe amended complaint insofar as asserted against them only to the extent of dismissingthe plaintiffs' claims against them for punitive damages.
Ordered that the order dated November 20, 2012, is modified, on the law, by deletingthe provision thereof granting those branches of the plaintiffs' motion which were forleave to renew their opposition to the motion of the defendant Ryder Truck Rental, Inc.,and for leave to serve an amended complaint, and substituting therefor a provisiondenying those branches of the [*2]plaintiffs' motion; as somodified, the order is affirmed; and it is further,
Ordered that the order dated January 11, 2013, is affirmed insofar as appealed from;and it is further,
Ordered that the plaintiffs are awarded one bill of costs, payable by the defendantsS.M. Foods, Inc., GFI Boston, LLC, Ryder Truck Rental, Inc., PLM Trailer Leasing, andDaniel E. Burke and the defendants Atlanta Foods International, Russell McCall's, Inc.,and Doug Jay, appearing separately and filing separate briefs.
On May 22, 2009, the plaintiff Frederick M. Cioffi (hereinafter the injured plaintiff),a police officer, allegedly was injured while he was conducting a traffic stop on footwhen he was struck by a tractor trailer operated by the defendant Daniel E. Burke. Thetractor trailer was owned by the defendant Ryder Truck Rental, Inc. (hereinafter Ryder).On September 19, 2008, the tractor trailer had been leased pursuant to a rental agreementto the defendant GFI Boston, LLC (hereinafter GFI), Burke's employer. Pursuant to therental agreement, the tractor trailer was to be returned to Ryder by October 19, 2008.
The injured plaintiff, and his wife suing derivatively, commenced this action against,among others, Ryder, GFI, Burke, and certain of GFI's corporate parents and principals,namely, the defendants Atlanta Foods International, Russell McCall's, Inc., and Doug Jay(hereinafter collectively the Atlanta defendants), to recover damages for personalinjuries, etc. Ryder moved pursuant to CPLR 3211 (a) (7) to dismiss the complaintinsofar as asserted against it or, in the alternative, for summary judgment dismissing thecomplaint insofar as asserted against it, on the ground that, under 49 USC§ 30106, known as "the Graves Amendment," it could not be heldvicariously liable for the accident.
In an order dated August 13, 2012, the Supreme Court granted Ryder's motion,finding that the plaintiffs had no cause of action against it. The plaintiffs moved for leaveto renew and reargue their opposition to the motion and for leave to serve an amendedcomplaint. Ryder, GFI, Burke, S.M. Foods, Inc., and PLM Trailer Leasing (hereinaftercollectively the Ryder defendants) opposed the plaintiffs' motion. The Atlanta defendantscross-moved for an order directing that the action be tried without a jury and severing thelegal and equitable claims for trial.
In an order dated November 20, 2012, the Supreme Court granted that branch of theplaintiffs' motion which was for leave to renew and reargue and, upon renewal andreargument, vacated the order dated August 13, 2012, and thereupon denied Ryder'smotion. The court also granted that branch of the plaintiffs' motion which was for leaveto serve an amended complaint. The court denied the Atlanta defendants' crossmotion.
Thereafter, the Atlanta defendants moved pursuant to CPLR 3211 (a) to dismiss theamended complaint insofar as asserted against them. In an order dated January 11, 2013,the Supreme Court granted the Atlanta defendants' motion only to the extent ofdismissing so much of the amended complaint as sought punitive damages againstthem.
The Ryder defendants appeal from so much of the order dated November 20, 2012,as granted the plaintiffs' motion. The Atlanta defendants appeal from so much of thesame order as granted that branch of the plaintiffs' motion which was for leave to servean amended complaint and denied that branch of their cross motion which was for anorder directing that the action be tried without a jury. The Atlanta defendants also appealfrom so much of the order dated January 11, 2013, as granted their motion pursuant toCPLR 3211 (a) to dismiss the amended complaint insofar as asserted against them onlyto the extent of dismissing so much of the amended complaint as sought punitivedamages against them.
"A motion for leave to renew shall be based upon new facts not offered on the priormotion that would change the prior determination and shall contain reasonablejustification for the failure to present such facts on the prior motion" (Lindbergh v SHLO 54, LLC,128 AD3d 642, 644-645 [2d Dept 2015] [internal quotation marks omitted]; seeCPLR 2221 [e] [2], [3]; Deutsche Bank Trust Co. v Ghaness, 100 AD3d 585,585-586 [2012]; Jovanovic vJovanovic, 96 AD3d 1019, 1020 [2012]; Matter of Nelson v Allstate Ins. Co., 73 AD3d 929, 929[2010]). The new or additional facts presented "either must have not been known to theparty seeking renewal or may, in the Supreme Court's discretion, be based on factsknown to the party seeking renewal at the time of the original motion" (DeutscheBank Trust Co. v Ghaness, 100 AD3d at 586; see Rowe v NYCPD, 85 AD3d 1001, 1003 [2011])."However, in either instance, a reasonable justification for the failure to present suchfacts on the original motion must be presented" (Deutsche Bank Trust Co. vGhaness, 100 AD3d at 586 [internal quotation marks omitted]). Accordingly, "theSupreme Court lacks discretion to grant renewal where the moving party omits areasonable justification for failing to present the new facts on the original motion"(Jovanovic v Jovanovic, 96 AD3d at 1020; see Rowe v NYCPD, 85AD3d at 1003). Reasonable justification does not exist where "the 'new evidence'consists of documents which the [moving party] knew existed, and were in fact in hisown possession at the time the initial motion was made" (Rowe v NYCPD, 85AD3d at 1003; see Jovanovic v Jovanovic, 96 AD3d at 1020).
Here, the Supreme Court should have denied that branch of the plaintiffs' motionwhich was for leave to renew their opposition to Ryder's motion. The record establishesthat the materials relied upon by the plaintiffs in support of that branch of their motionwhich was for leave to renew were either in their possession prior to the date on whichthey filed their opposition to Ryder's motion or were reasonably available to them. Thus,because the plaintiffs failed to set forth "a reasonable justification for failing to presentthe new facts on the original motion," the Supreme Court improvidently exercised itsdiscretion in granting that branch of their motion which was for leave to renew (seeJovanovic v Jovanovic, 96 AD3d at 1020; Rowe v NYCPD, 85 AD3d at1003).
However, the Supreme Court providently exercised its discretion in granting thatbranch of the plaintiffs' motion which was for leave to reargue. A motion for leave toreargue is similarly directed to the trial court's discretion and, to warrant reargument, themoving party must demonstrate that the court overlooked or misapprehended the relevantfacts or misapplied a controlling principle of law (see CPLR 2221 [d]; Central Mtge. Co. vMcClelland, 119 AD3d 885, 886 [2014]). The Graves Amendment provides,generally, that the owner of a leased or rented motor vehicle cannot be held liable forpersonal injuries resulting from the use of such vehicle by reason of being the owner ofthe vehicle 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 isengaged in the trade or business of renting or leasing motor vehicles, and (2) "there is nonegligence or criminal wrongdoing on the part of the owner (or an affiliate of theowner)" (49 USC § 30106 [a]; see Bravo v Vargas, 113 AD3d 579, 580 [2014]; Ballatore v HUB Truck RentalCorp., 83 AD3d 978, 979 [2011]; Gluck v Nebgen, 72 AD3d 1023 [2010]). Here, theplaintiffs demonstrated that the court overlooked the fact that, although Ryder was in thebusiness of leasing vehicles, it failed to offer evidence demonstrating that the accidentoccurred during the period of rental or lease.
Further, upon granting reargument, the Supreme Court properly determined thatRyder was not entitled to summary judgment dismissing the complaint insofar as assertedagainst it. Ryder failed to meet its prima facie burden of demonstrating that the plaintiffs'claim against it arose "during the period of the rental or lease," as is required to obtainthe protection of the Graves Amendment (49 USC § 30106 [a]; see Davido v Salazar, 89 AD3d463 [2011]; cf. Burrell vBarreiro, 83 AD3d 984, 985 [2011]). Instead, the evidence Ryder submitted insupport of its motion failed to eliminate all triable issues of fact as to whether there wasany lease agreement in effect between Ryder and GFI on the date of the accident.Consequently, upon reargument, the Supreme Court correctly vacated its prior ordergranting Ryder's motion, and thereupon denied the motion.
The Supreme Court should have denied that branch of the plaintiffs' motion whichwas for leave to serve an amended complaint. CPLR 3025 (b) provides that leave toamend a pleading should be "freely given upon such terms as may be just." This has beeninterpreted to mean that leave to amend a pleading should be granted provided that "theproposed amendment [is] not palpably insufficient or patently devoid of merit, and there[is] no evidence that it would prejudice or surprise the [opposing party]" (Blue Diamond Fuel Oil Corp. vLev Mgt. Corp., 103 AD3d 675, [*3]676 [2013];see Hothan v Mercy Med.Ctr., 105 AD3d 905, 906 [2013]; Maldonado v Newport Gardens, Inc., 91 AD3d 731,731-732 [2012]; Lucido vMancuso, 49 AD3d 220, 225, 226-227 [2008]). However, where this standard ismet, "[t]he sufficiency or underlying merit of the proposed amendment is to be examinedno further" (Maldonado v Newport Gardens, Inc., 91 AD3d at 732; seeLucido v Mancuso, 49 AD3d at 227).
Here, the proposed amendments set forth additional details regarding the defendants'alleged violations of various technical requirements relating to the operation ofcommercial vehicles, including requirements for the display of registration numbersissued by the Department of Transportation, and alleged that the defendants collectivelycolluded to avoid state and federal vehicle and tax regulations relating to the subjectvehicle. The plaintiffs contend that these proposed amendments do not set forthindependent causes of action but, instead, demonstrate "criminal wrongdoing" within themeaning of the Graves Amendment, such that the protection of that statute would notapply (see 49 USC § 30106 [a] [2]).
"Under the Graves Amendment (49 USC § 30106), the owner of aleased or rented motor vehicle cannot be held liable for injuries resulting from the use ofsuch vehicle if the owner (i) is engaged in the trade or business of renting or leasingmotor vehicles, and (ii) engaged in no negligence or criminal wrongdoing" (Bravo vVargas, 113 AD3d at 580; see 49 USC § 30106 [a];Ballatore v HUB Truck Rental Corp., 83 AD3d at 979). The legislative history ofthe Graves Amendment indicates that it was intended to "protect the vehicle rental andleasing industry against claims for vicarious liability where the leasing or rentalcompany's only relation to the claim was that it was the technical owner of the [vehicle]"(Rein v Cab E. LLC, 2009 WL 1748905, *2, 2009 US Dist LEXIS 52617, *6[SD NY, June 22, 2009, No. 08 Civ 2899 (PAC)], citing statement of RepresentativeGraves, 151 Cong Rec H1034, H1200 [Mar. 9, 2005]; see Carton v General MotorAcceptance Corp., 611 F3d 451, 457 [8th Cir 2010]). Although the plaintiffs urgethat "criminal wrongdoing" within the Graves Amendment encompasses any violationrelating to the rented or leased vehicle, such an interpretation would eviscerate theprotection Congress sought to offer companies in the business of renting and leasingvehicles by permitting plaintiffs to impose vicarious liability whenever any violation, nomatter how technical, could be found, and whether or not that violation had anyrelationship to the injuries at issue. Instead, in light of this history and the principle that itis the role of the courts to "attempt to effectuate the intent of the Legislature"(Patrolmen's Benevolent Assn. of City of N.Y. v City of New York, 41 NY2d205, 208 [1976]), we hold that, in referring to "criminal wrongdoing," and in couplingthat term with "negligence," Congress intended to remove the protection of the GravesAmendment only where the defendant had engaged in criminal wrongdoing which was aproximate cause of the plaintiff's injuries. Consequently, we find that the plaintiffs'proposed amendments relating to violations of vehicle regulations were not pertinent tothe safety of the subject vehicle and, thus, were "palpably insufficient [and] patentlydevoid of merit." Therefore, the Supreme Court should have denied that branch of theplaintiffs' motion which was for leave to serve an amended complaint (see BlueDiamond Fuel Oil Corp. v Lev Mgt. Corp., 103 AD3d at 676).
The Supreme Court properly denied the Atlanta defendants' cross motion for an orderdirecting that the action be tried without a jury and severing the legal and equitableclaims for trial. A plaintiff's attempt to pierce a defendant's corporate veil "does notconstitute a cause of action independent of that against the corporation; rather it is anassertion of facts and circumstances which will persuade the court to impose thecorporate obligation on its [parent]" (Goel v Ramachandran, 111 AD3d 783, 793 [2013][internal quotation marks omitted]; see Old Republic Natl. Tit. Ins. Co. vMoskowitz, 297 AD2d 724, 725 [2002]). Nevertheless, " '[t]he concept isequitable in nature, and the decision whether to pierce the corporate veil in a giveninstance will depend on the facts and circumstances' " (Millennium Constr., LLC vLoupolover, 44 AD3d 1016, 1016 [2007], quoting Hyland Meat Co. vTsagarakis, 202 AD2d 552, 553 [1994]). " '[W]here a plaintiff seeks legaland equitable relief in respect of the same wrong, his [or her] right to trial by jury islost' " (Bockino v Metropolitan Transp. Auth., 224 AD2d 471, 471-472[1996] [emphasis omitted], quoting Di Menna v Cooper & Evans Co., 220NY 391, 396 [1917]).
The Atlanta defendants maintain that because the plaintiffs sought to pierce theircorporate veils, they are seeking equitable relief and, thus, waived their right to a jurytrial. Here, [*4]however, the plaintiffs seek only legalrelief in the form of money damages (cf. Bockino v Metropolitan Transp. Auth.,224 AD2d at 471-472). The fact that they relied upon the equitable theory of piercing thecorporate veil did not amount to a waiver of the right to a jury trial. Accordingly, theSupreme Court correctly denied the Atlanta defendants' cross motion for an orderdirecting that the action be tried without a jury and to sever the legal and equitable claimsfor trial.
Finally, the Supreme Court correctly granted the Atlanta defendants' motion pursuantto CPLR 3211 (a) to dismiss the amended complaint insofar as asserted against themonly to the extent of dismissing so much of the amended complaint as sought punitivedamages against them. The Atlanta defendants' arguments, which were aimed almostexclusively at the amendments made to the original complaint, failed to establish that theplaintiffs had not stated causes of action against them to recover for, inter alia,negligence and vicarious liability.
In light of the foregoing, we need not reach the parties' remaining contentions.Balkin, J.P., Hall, Austin and Barros, JJ., concur. [Prior Case History: 2012 NY SlipOp 33237(U).]