WeSueThem in federal, state, and local courts, protecting YOU every step of the way.

LAW | CONSUMER RIGHTS | PRODUCT LIABILITY | EMPLOYMENT RIGHTS | PERSONAL INJURY

WeSueThem Blog

4-8 MINUTE READ

The permissive use statute trumps the rental agreement

4 MINUTE READ


WeSueThem.com

ELRAC LLC v Duque, 2016 NY Slip Op 26169 (App. Term 1st Dept. 2016)

This is not a no-fault issue but something that has always worried me in my own life.  Assume like many people you rent a car.  Furthermore, assume you let someone drive it who is not on the rental contract.  That someone else gets into a car accident.  Under New York law, the rental company is primary for the standard 25/50/10 and $50 PIP.

Assume the rental company pays our monies to settle the third-party liability and/or PD case.  Now, the rental company wants their money back from you, the renter.  The theory for recovery is that you breached the contract through allowing someone drive the vehicle.

It was thought in the subrogation circles that this was a viable basis of recovery.  The Appellate Term has now held otherwise and appears to be applying the anti-subrogation rule (an insurance carrier cannot generally recover from its own insured the amounts it pays out on the insurance contract covering the insured)

The theory is that the rental car is self-insured; the coverage is not contractual but forced upon the rental car company; and the vehicle was used outside of the scope of contractual use between the renter and rental company.  The Appellate Term disagreed and stated the following:

“Section 388 of the Vehicle and Traffic Law states that the owner of a motor vehicle may be held civilly liable for any damage caused by the owner or any permissive user of the vehicle. Vehicle and Traffic Law § 370 requires rental car companies to provide insurance for their [*2]vehicles, including minimum liability coverage of $25,000 for bodily injury, and further requires that such insurance “inure to the benefit” of any permissive user of the vehicle (Vehicle and Traffic Law § 370[1][b]). As a result of the interplay of §§ 370 and 388, a rental car company such as Enterprise is prohibited from seeking indemnification from its renter “for amounts up to the limited liability requirements” of the Vehicle and Traffic Law (Elrac, Inc. v Ward, 96 NY2d 58, 73 [2001], rearg. denied 96 NY2d 855 [2001]). Since the underlying claim is for a sum considerably less than the statutory minimum of $25,000, the action must be dismissed. To allow Enterprise to pass on the $9,000 cost to its insured would permit Enterprise to avoid the coverage it was statutorily bound to provide (id. at 77).”

I am curious if instead of bringing suit under a breach of contract, the rental company can bring suit under a “fraudulent procurement” theory.  This of course requires ELRAC to assert that the vehicle would not have been rented to the renter had it knew the ULD was operating the vehicle.  Assuming this is answered in the affirmative, then a Kaplun type recover is appropriate.

ARTICLE

WeSueThem.com

Privacy Policy

This privacy policy applies to information collected online from users of this website. In this policy, you can learn what kind of information we collect, when and how we might use that information, how we protect the information, and the choices you have with respect to your personal information.

What personal information is collected through this website and how is it used?

We collect information about our users in three ways: directly from the user, from our Web server logs and through cookies. We use the information primarily to provide you with a personalized Internet experience that delivers the information, resources, and services that are most relevant and helpful to you. We don’t share any of the information you provide with others, unless we say so in this Privacy Policy, or when we believe in good faith that the law requires it. 

User-supplied information: If you fill out the “contact” form on this website, we will ask you to provide some personal information (such as e-mail address, name, phone number and state). We only require that you provide an e-mail address on the contact form. Further, if chat is available through this site, you may be asked to provide information if you participate in an online chat. Please do not submit any confidential, proprietary or sensitive personally identifiable information (e.g. Social Security Number; date of birth; drivers license number; or credit card, bank account or other financial information) (collectively, “Sensitive Information”). If you submit any Sensitive Information, you do so at your own risk and we will not be liable to you or responsible for consequences of your submission. Information that you provide to us through the contact form or an online chat will be used so that we may respond to your inquiry. We may also use information you provide to us to communicate with you in the future. If you do not wish to receive such communications, you may opt out (unsubscribe) as described below. 

Web server logs: When you visit our website, we may track information about your visit and store that information in web server logs, which are records of the activities on our sites. The servers automatically capture and save the information electronically. Examples of the information we may collect include:

  • your unique Internet protocol address;
  • the name of your unique Internet service provider;
  • the town/city, county/state and country from which you access our website;
  • the kind of browser or computer you use;
  • the number of links you click within the site;
  • the date and time of your visit;
  • the web page from which you arrived to our site;
  • the pages you viewed on the site; and
  • certain searches/queries that you conducted via our website(s).

The information we collect in web server logs helps us administer the site, analyze its usage, protect the website and its content from inappropriate use and improve the user’s experience. 

Cookies: In order to offer and provide a customized and personal service, our websites and applications may use cookies and similar technologies to store and help track information about you. Cookies are simply small pieces of data that are sent to your browser from a Web server and stored on your computer’s hard drive. We use cookies to help remind us who you are and to help you navigate our sites during your visits. Cookies also can tell us where visitors go on a website and allow us to save preferences for you so you won’t have to re-enter them each time you visit. The use of cookies is relatively standard. Most Internet browsers are initially set up to accept cookies, but you can use your browser to either notify you when you receive a cookie or to disable cookies. If you wish to disable cookies from this site, you can do so using your browser. You should understand that some features of many sites may not function properly if you don’t accept cookies. For more information about using browsers to manage cookies, please see All About Cookies. You can also refuse to accept Flash cookies from this website using Adobe’s Flash management tools. You can opt out of Google’s use of cookies by visiting Google’s Ad Settings. By visiting this website, you consent to the use of cookies and similar technologies in accordance with this Privacy Statement. 

Third-party Services: We may use services hosted by third parties, including Adobe Site Catalyst, to assist in providing our services and to help us understand the use of our site by our visitors. These services may collect information sent by your browser as part of a web page request, including your IP address or cookies. If these third-party services collect information, they do so anonymously and in the aggregate to provide information helpful to us such as website trends, without identifying individual visitors. In addition, we may use services provided by third parties to display relevant content, products, services and advertising to you. These third parties may use cookies, web beacons and similar technologies to collect or receive information from this website and elsewhere on the internet. They may then use that information to provide measurement services so we can understand your interests and retarget advertisements based on your previous visits to this website. Please keep in mind that we do not share your personal information with any third-party advertiser, ad server or ad network. You may be able to opt-out of the collection and use of information for ad targeting by some third parties by visiting www.aboutads.info/choices. You can opt out of Google’s use of cookies by visiting Google’s Ad Settings. You can visit this page to opt out of AdRoll’s and their partners’ targeted advertising. Please see “Cookies” in the section above for more information on how you can control the use of cookies on your computer. 

California Do Not Track: Our web services do not alter, change, or respond upon receiving Do Not Track (DNT) requests or signals in browsers. As described in more detail above, we track user activity using web server logs, cookies and similar technologies. Information collected in web server logs helps us analyze website usage and improve the user’s experience. Cookies allow us to offer you a customized experience and present relevant advertising to you.

How is personal information protected?

We take certain appropriate security measures to help protect your personal information from accidental loss and from unauthorized access, use or disclosure. However, we cannot guarantee that unauthorized persons will always be unable to defeat our security measures.

Who has access to the information?

We will not sell, rent, or lease mailing lists or other user data to others, and we will not make your personal information available to any unaffiliated parties, except as follows:

  • to agents, website vendors and/or contractors who may use it on our behalf or in connection with their relationship with us;
  • if we are unable to assist with your matter, but know an unaffiliated attorney or firm that may be able to help you, we may refer you and share information you provided us with that party; and
  • as required by law, in a matter of public safety or policy, as needed in connection with the transfer of our business assets (for example, if we are acquired by another firm or if we are liquidated during bankruptcy proceedings), or if we believe in good faith that sharing the data is necessary to protect our rights or property.

How can I correct, amend or delete my personal information and/or opt out of future communications?

You may opt out of any future contacts from us at any time. Contact us via the phone number, contact form or mailing address on our website at any time to:

  • see what data we have about you, if any;
  • change/correct any data we have about you;
  • ask us to delete any data we have about you; and/or
  • opt out of future communications from us.

If you have any additional questions or concerns about this privacy policy, please contact us via the phone number, contact form or mailing address listed on this website. If our information practices change in a significant way, we will post the policy changes here.

Contact Us

The Muhlstock Law Firm

WeSueThem.com

Attention: Compliance Department

35 Pinelawn Road

Suite 105E

Melville, NY 11747