Monday, August 19, 2013

Certified Question: Does a Vehicle and Traffic Law Indemnity/Contribution Claim Trump the "Exclusivity" Provision in the Workers’ Compensation Law?

In Hallock v. Koubek, the Second Circuit Court of Appeals has certified a question to the New York Court of Appeals involving the exclusivity of the Workers Compensation remedy and the Vehicle and Traffic Law.

The plaintiff was injured as a passenger in a car driven by a co-worker as they returned from a business conference.  The plaintiff could not pursue a claim against the driver of the vehicle in which he was injured because the Workers Compensation Law generally bars claims against an employer and co-workers.  Notably, though, the vehicle was owned by the co-workers spouse.

The plaintiff did bring claims against the driver and owner of the second vehicle involved in the collision.  Those defendants then brought a third-party claim against the owner of the first vehicle for indemnity and contribution.  The third-party claim was based on a Vehicle and Traffic Law provision that imposes statutory liability against an owner for the negligence of a driver permitted to use the vehicle.  

The third-party defendant moved for summary judgment, arguing that the Workers Compensation provision that barred claims against his spouse also inured to his benefit as the vehicles owner.  The defendants countered that the Vehicle and Traffic Law controlled, making the owner potentially liable even if the driver could not be sued.

In certifying this case to the Court of Appeals, the Second Circuit noted two lines of cases that made it unclear how the Court of Appeals would rule.  One line of cases suggested that the Workers Compensation exclusivity provision controls, precluding a contribution action against the vehicles owner.  In those cases, the prohibition on liability against the driver meant there was no derivative liability under the Vehicle and Traffic Law.

In another line of cases were two decisions that suggested an outcome was less than certain.  The Second Circuit pointed to a recent trial-level decision, which it found to be on all fours with the case at hand, that allowed a third-party contribution claim against the vehicles owner.  The other decision came from the Court of Appeals and it allowed a Vehicle and Traffic Law claim against a vehicles owner when the driver had diplomatic immunity from suit.  In the case involving diplomatic immunity, the Court of Appeals distinguished its prior and potentially conflicting Workers Compensation holdings.  Given these divergent cases, the Second Circuit decided it was necessary to seek guidance from the Court of Appeals.  

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