Appeal Pursuant To The Graves Amendment Defeated In The Appellate Division, Second Department

April 27, 2010

London Fischer congratulates Clifford B. Aaron, Matthew K. Finkelstein and Stephanie Kudrle for successfully defeating plaintiffs’ appeal in the Appellate Division, Second Department in Gluck v. Nebgen and NILT, 2010 N.Y. Slip Op. 03408 (2d Dep’t, April 27, 2010). In this case, plaintiffs sought to exclude NILT, Inc., a trustee and title owner of a leased motor vehicle from protection under the Graves Amendment.

The Gluck action arose out of a two-vehicle accident that occurred on August 20, 2005. Plaintiff, an 18-year old, soon-to-be freshman at Indiana University, was a front-seat passenger in a vehicle operated by defendant James Nebgen when it was struck on the passenger side at a high rate of speed by the NILT vehicle operated by defendant Yvonne Turco. Plaintiff sustained a permanent catastrophic head injury with cognitive deficit as a result of the accident. Plaintiffs’ negligence theory against NILT, Inc. was based upon vicarious liability, pursuant to Section 388 of the Vehicle and Traffic Law (VTL), as the title owner of the vehicle leased to defendant Turco at the time of the accident.

London Fischer on behalf of NILT, Inc. prevailed in the lower court and Justice Peter H. Mayer in Supreme Court, Suffolk County dismissed the action on behalf of NILT, Inc. Plaintiffs appealed to the Appellate Division, Second Department. After oral argument, the Court, in a brief, unanimous decision, adopted the arguments set forth in the brief submitted on behalf of NILT, Inc. and upheld the lower court decision. The Court held that NILT, Inc. was an owner or an affiliate engaged in the business of leasing motor vehicles which was entitled to Graves Amendment protection. As such, plaintiffs’ appeal was summarily dismissed.

This is a significant decision because it is the first time an appellate court has addressed whether a company, which was involved in a business’s leasing structure but did not actually lease a vehicle, was entitled to dismissal under the Graves Amendment.