The Rogak Report: 4 May 2011 ** Rental Cars - Additional Coverage **
2011 NY Slip Op 31123(U), (Supreme Court, Queens County) (Docket Number: 1026/08) (Judge: Bernice Daun Siegal)
Edited by Lawrence N. Rogak
Does "additional coverage" -- insurance over and above the statutory minimum -- purchased by someone who rents a car, extend to other drivers not authorized by the rental agreement? This court holds "no."In this action, plaintiff Clarence Crummell ("Plaintiff") seeks to recover for personal injuries allegedly sustained in a motor vehicle accident on June 10, 2006. Plaintiff was a passenger in a vehicle he rented from defendant Avis Rent A Car System Inc. ("Avis"), that was owned by Avis and operated by defendant Thomas Pinkerton (Pinkerton). Avis moved for summary judgment on its fourth affirmative defense asserting that the amount of liability insurance that it must provide in the underlying personal injury action should be limited to the statutory minimum because Pinkerton was not an "authorized driver" as defined in the rental agreement between Avis and Plaintiff, as only "authorized drivers" are entitled to additional liability insurance coverage under the terms of the agreement.
In support of the motion for summary judgment, Avis relied upon, inter alia, a copy of the agreement and the deposition testimony of the Plaintiff. The Agreement provided that additional liability insurance would be provided as "additional coverage" to an "authorized driver" as defined in the agreement. An "authorized driver" is defined as being limited to a spouse, significant other, employer or regular fellow employee incidental to business duties, someone who operates the vehicle during an emergency, or someone who appears at the rental counter with an authorized driver and signs an additional driver form. The agreement further provides that an "authorized driver" must be at least 25 years old and hold a valid driver's license.
Moreover, Avis, in further support of its motion, relies on the deposition of Plaintiff wherein he testified that he purchased additional liability insurance when he rented the vehicle, that Pinkerton was under the age of 25 at the time that the agreement was signed, and that Pinkerton was not listed as an additional authorized driver in the agreement. Plaintiff was the only individual to sign the agreement.
In [a prior court order in this case], the Court concluded that "...Pinkerton was not an authorized driver as defined in the agreement. Therefore, Pinkerton as the operator of the vehicle, is not entitled to additional liability insurance coverage in excess of the statutory minimum pursuant to the terms of the agreement."
Crummell contends that the Court [in its prior decision] misapprehended the law. Specifically, the court cited authority inapposite to its holding, specifically Motor Veh. Acc. Indem. Corp. v Continental Natl. Am. Group Co., 3 NY2d 260, 264  and Bernstein v Diaz, 27 AD3d 602, 603 . The prior Court clearly restated the law, as set forth in MVAIC and Bernstein, but then quickly distinguished the within action from the abovementioned cases and concluded, based on the unique facts of this case, that the clause in the agreement regarding additional liability insurance expressly provided that such additional coverage would only be provided to an "authorized driver" as defined in the rental agreement.
However, the ruling failed to clearly address the intent of the Court of Appeals in MVAIC, wherein the court deemed a car rental agency to have "constructively" consented to a third-party driver's operation of its rental vehicle despite a lease provision restricting use of the vehicle to the lessee and his immediate family. (Motor Veh. Acc. Indem. Corp. v Continental Natl. Am. Group Co., 35 NY2d 260 .) Specifically, "a commercial lessor of vehicles is deemed to have "constructively consented to the operation of its vehicle by anyone with the lessee's permission." (Bernstein v Diaz, 27 AD 2d 602, 603). Pursuant to this principle of constructive consent, a car rental agency is subject to statutory liability under Vehicle and Traffic Law §388 for the permissive use of its vehicle. (Murdza v. Zimmerman, 99 N.Y.2d 375  citing Motor Veh. Acc. Indem. Corp. v Continental Natl. Am. Group Co., 35 NY2d 260 .) To do otherwise, the Court of Appeals in MVAIC argued, innocent victims would have no redress given the large number of rental cars, many of which are driven by someone other than the renter, would "inevitably" be involved in accidents.
The defendant concedes that VTL §311 requires AVIS, as the owner of the rental vehicle, to provide New York's mandatory minimum insurance coverage of $25,000 per person/$50,000 per accident to any "permissive user" as defined by VTL §388. Defendant contends, however, that MVAIC's ruling does not extend to "additional coverage," as the public policy concerns underpinning the ruling in MVAIC do not exist here.
This court notes that the "innocent victims" MVAIC considered are still covered under the statutory requirements and have their redress. The "additional coverage" provided for in the within rental agreement goes above and beyond the statutory requirements and therefore there is no "public policy" concern as set forth in MVAIC.
As the prior court concluded "[a] written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms" (Greenfield v Philles Records, 98 NY2d 562, 569 ; see Lobacz v Lobacz, 72 AD3d 653 ). The parties to the agreement contracted to "additional coverage" pursuant to the rental agreement provisions and innocent victims could not properly assume that other motorists would have "additional coverage." If that were the case, the legislature would have required that all rental companies provide "additional coverage." Absent a "public policy" concern that would warrant ignoring the plain meaning of the terms of the parties agreement, this court sees no reason to extend the ruling in MVAIC to include "additional coverage, as "additional coverage" is not statutorily mandated. So long as the contract does not run afoul of the Vehicle and Traffic Law § 338 and the statutory minimum is available, the parties are free to limit the additional coverage. (cf. Government Employees Inc. Co. -v- Chrysler Inc. co., 256 AD2d 1212 [4th Dept. 1998].)
Accordingly, the motion to reargue is granted and after reargument, the court adheres to the prior decision and summary judgment is granted defendant Avis on the fourth affirmative defense.