Development through New York Case Law
Due to the inconsistencies and associated dissatisfaction of the First Restatement of Conflicts, New York began on a journey to develop a newer approach. However, they did so through the common law method, meaning their early decisions may seem odd until the court figured out what it was doing in search of a more just approach. The following cases illustrate this journey.
Most Significant Contacts
Auten v. Auten
308 N.Y. 155 (1954).
Whether the court will apply New York law (where the contract was formed) or the law of England (where the most significant contacts were.
Conflict: In New York, there was no remedy for a breach of contract of this nature while there was in England.
The law that will be applied is the location where the most significant contacts are.
The most significant contacts are within England, thus English law will apply and the wife has a recovery.
Mr. and Mrs. Auten had been married for 14 years in England. Eventually, Mr. Auten left his wife and two children and came to the United States where he sought a divorce. Mrs. Auten then traveled to the United States where the parties entered into an agreement that she would not contest the divorce if he provided child support. She then traveled back to England. At this point the husband failed to make the payments, so Mrs. Auten sued in England. In defense, Mr. Auten said that the lawsuit was a breach of the contract and under New York law, no recovery could be made.
Had this case been resolved under the First Restatement approach, the law to be applied would be New York. However, the court said that there should be no distinction between the obligation and the performance. Instead, they should apply the law where the most contacts are located. In the present case, that place is England. The wife and children are from England, the husband was originally from England, the marriage was formed in England, payments were to be made in England. Literally everything is in England except for the signing of the contract and where the payments were to be made from.
Haag v. Barnes
9 N.Y.2d 554 (1961).
Does New York or Illinois law apply? Where are the most significant contacts?
Conflict: The contract would be enforced in Illinois, but not so in New York (because this particular contract would need court approval, which was lacking).
The most significant contacts are in Illinois so Illinois law applies.
Barnes is a Chicago attorney who went to New York and temporarily hired Haag, a legal assistant there. While in New York, the two became romantically involved, leading to Haag becoming pregnant. At Barnes’s request, Haag traveled to Chicago and had the baby there. Later the two parties separated and signed a contract where Barnes would pay a sum of child support in return for being released from other claims. Despite paying more than the agreed sum, Haag sued Barnes in New York claiming she needed more child support.
This presents a situation where the court is balancing the contacts. In New York, the parties first engaged and it is the location of the mother and child. In Illinois, it is the location where the contract was formed, where the birth took place, where the parties obtained representation, and where the money was being paid from. All these factors tend to show that the most significant contacts were Illinois and thus the contract is valid and the lawsuit may not continue.
It is interesting to compare the above two cases which ultimately leads to questioning how the court determines which contacts are more substantial and have more weight than other contacts.
Most Significant Interest
Babock v. Jackson
12 N.Y.2d 473 (1963).
Whether New York or Ontario’s guest statute would apply.
New York would allow recovery (there is no guest statute) while Ontario would not (guest statute bars recovery).
Not only will the courts consider where the most significant contacts are, but also the state’s interest in governing over it’s citizens (when compared to the burden on the other state).
New York law will apply and recovery may be allowed.
The plaintiff (passenger) and defendants (driver) were going on a roadtrip traveling from New York to Ontario then back again. During the drive, while in Ontario, the defendant lost control of the vehicle and the plaintiff was injured from the ensuing crash. Consequently this lawsuit was filed.
Had the First Restatement been applied, the place of the wrong was Ontario and Ontario law would apply. However, the court sees it more fit to see (1) where the most significant contracts were, and (2) which state has more interest in governing the litigation.
Clearly, the most significant contacts were in New York because all the parties were domiciled in New York and their travel into Ontario was incidental to a longer roadtrip set to complete back in New York. Second, New York also has more interest because the cause of action occurred between all parties who are New York residents. Had one of the parties been a resident of Ontario, that may have been a different story. Ontario has an interest in maintaining the safety of their highway, but New York has an interest in making sure the parties are held accountable. In this instance, the New York interests win.
The only interest Ontario has are to prevent insurance fraud and to protect other Canadian citizens. However, those interests are not in play here as both the plaintiff and defendant is in New York, the vehicle was insured in New York. In other words, there are no Canadian insurance companies or defendants that need to be protected under the stated interest.
This case is an example of a “false conflict.” That is, there are not two jurisdictions who have a conflict. Instead, only one state has an interest.
Tooker v. Lopez
24 N.Y.2d 569 (1969).
Does Michigan or New York law apply?
Michigan would not allow recovery from a guest—unless there is a showing of gross negligence—while New York would.
New York law will apply.
Tooker and Lopez were college friends at Michigan. The two were involved in a car accident in Michigan that took both of their lives. Both the parties and the car were from New York, including the insurance policies on the car.
Michigan has no or limited interest in what happens between these parties. New York has all the interest because New York law and policy strives to compensate families for their losses. Here, because everything was centered around New York, except for the location of the accident, it makes sense to apply New York law.
In New York, the interest or purpose of the lack of a guest statute is so that the victim can be compensated. Michigan’s interest is to protect the drivers in Michigan.
Once again, this is a false conflict case because the driver was domiciled in New York so Michigan does not actually have an interest.
Had the above two cases utilized the “significant contacts” test, the outcome would likely be the same, applying New York law. The nice thing about the interest test is that it helps give good clarity about which jurisdiction is going to apply and why (for policy reasons).
Had both the cases above utilized the First Restatement, the law would have been Ontario or Michigan respectfully.
Neumeier v. Kuehner
286 N.E.2d 454 (N.Y. 1972).
Whose laws apply, New York or Ontario?
- When the parties are both domiciled in the same state, use the rules of the domicile state. – False conflict, no split domicile
- If the parties are from different states, and the driver’s conduct occurred in the state of his domicile where there is no liability, no liability should be imposed from a different state. Some goes for the guest, if injured in their state where recovery is permitted, recovery should be allowed. – True conflict, split domicile
- If the parties are domiciled in different states, go with the law where the accident occurred unless if it displaces a relevant substantial purpose of the other State without impairing the smooth working of the multi-state system. – Split domicile
Ontario law is best served here. No or limited recovery may be made.
Defendant was a New York resident who traveled to Ontario and picked up the plaintiff. The two were to spend some time at a bakehouse in Ontario but was struck by a train on the way and killed, also in Ontario. At this point in history, Ontario did not allow a passenger to sue the driver unless there is a showing of gross negligence by the driver. New York would allow the suit to continue regardless.
This case presents a distinction between Babock. Specifically, the parties are domiciled in different states. The accident occurred in Ontario, where the person seeking recovery was located. Thus, it makes sense that Ontario would have a much stronger interest in adjudicating this case because it directly affects its citizens.
However, the dissent argues that this distinction is unfair to parties, to allow recovery in one situation but not another seems discriminatory.
The above facts mean that rule 3 is being applied. Both the parties are domiciled in different states, so the place of injury will govern unless there are substantial purposes displaced by the other state. Here, although New York has an interest, applying New York law may create uncertainty and impair the smooth working of the multi-state system. So, they decide to use Ontario.
Conduct-regulating or Loss-allocating
Schultz v. Boy Scouts
480 N.E.2d 679 (N.Y. 1985).
Does New York (or Ohio or Texas) or New Jersey law apply.
Conflict, New York would allow recovery (having no charitable immunity) while New Jersey would not.
New Jersey law applies for suits against both the Boy Scouts and Brothers.
Schultz had two children who were sexually assaulted by a Boy Scout leader on a trip in New York. Apparently the offensive conduct continued to occur when the boys returned to New Jersey. Eventually, one of the boys committed suicide. Consequently, Schultz brought the lawsuit forward against Boy Scouts and Brothers for negligence hiring and supervision of their employee.
Boy Scouts was headquartered in New Jersey at the time of the incident but had since moved to Texas.
Brothers was incorporated in Ohio. The particular abuser was domiciled in New Jersey.
The court looks at each party individually, first the Boy Scouts then Brothers.
For the Boy Scouts, it is easy for the court to adopt the first rule articulated in Neumeier because the parties were domiciled in New Jersey at the time of the incident. As such, the only interest New York has in applying New York law is that it was the place of the wrong. Because everything else is centered around New Jersey, New Jersey has the most interest in resolving the issue.
As for Brothers, the parties are from different domiciles but neither have a need for applying New York law (other than for biased recovery reasons). In that situation, the law of the wrong would usually apply unless there is a substantial interest in another state. Here, the substantial interest resides in New Jersey, being where the hiring occurred and where the majority of the parties involved are located.
Padula v. Lilarn Properties Corp.
644 N.E.2d 1001 (N.Y. 1994).
Does New York or Massachusetts law apply? Is the statute primarily conduct-regulating or loss-allocating?
New York allows recovery while Massachusetts does not.
When the law in question is conduct-regulating, go to where the tort occurred. However, if the law in question is loss-allocating (such as it was in Schultz) go to the place where the parties have a common domicile (Neumeier Rules).
Apply Massachusetts law.
Both the plaintiff and the defendant corporation are domiciled in New York. The injury occurred in Massachusetts where the plaintiff was working on the defendant’s worksite. This law suit is brought forth claiming that the injury was caused by negligent maintenance of the worksite.
The statute in question has both a conduct-regulating element and loss-allocating element. However, the statute is primarily conduct-regulating. As such, the law will be applied where the tort occurred. This is because that state has the greatest interest in regulating conduct within the state. The result in this case is that Massachusetts law applies.
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