When Cars, and Laws, Collide

The Second Circuit, in Isabella v. Koubek, recently certified a question to the New York Court of Appeals involving an apparent conflict between two statutes:

  • Section 29(6) of New York’s Workers’ Compensation Law, which provides that workers’ compensation is the exclusive remedy of an employee injured by his co-employee’s negligence, and
  • Section 388 of New York’s Vehicle and Traffic Law, which provides that every owner of a vehicle operated in New York is liable for injuries resulting from the negligent permissive use of that vehicle.

The facts are relatively simple:  Oldenborg was driving passenger and co-worker Isabella on company business when they collided with a car driven by Hallock. Because this was a work-related injury, the Workers’ Compensation Law prevented Isabella from suing Oldenborg.  Isabella eventually obtained workers’ compensation benefits.  Isabella sued the Hallocks, who in turn brought a third-party action against Koubek, Oldenborg’s husband and the owner of the car occupied by Oldenborg and Isabella.

Acting under Second Circuit Local Rule 27.2, the court certified the following question to the New York Court of Appeals:

Whether a defendant may pursue a third-party contribution claim under New York Vehicle and Traffic Law § 388 against the owner of a vehicle, where the vehicle driver’s negligence was a substantial factor in causing the plaintiff’s injuries, but the driver is protected from suit by the exclusive remedy provisions of New York Workers’ Compensation Law § 29(6)?

The resolution of this issue will determine the outcome of this appeal.  If Koubek is protected from liability by the Workers’ Compensation Law, the Hallocks will be required to pay an $800,000 settlement, plus interest, to compensate the Isabellas for their injuries.  If, on the other hand, a third-party action against Koubek is permissible, Koubek and the Hallocks will split that amount in respective amounts of 90 and 10 percent.

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