Although no one is traveling now because we are home with the pandemic, at some point, people will begin traveling again and with that comes the inevitability of accidents. What happens when a New York resident has an accident in New Jersey and has a Massachusetts policy? What state law should apply? New York, New Jersey, or Massachusetts? A recent no-fault case shows how this conflict of laws was resolved.
Because automobiles frequently cross state lines, law conflicts often arise as to which state’s laws apply to claims for first-party benefits and damages. This is especially true in New York and New Jersey, where both states have “no-fault” laws imposing coverage for first-party benefits, but the details of those laws are very different.
In Schottenstein Pain & Neuro PLLC v. Travelers Ins. Co., (70 Misc 3d 131), New York’s Appellate Term, Second Department, considered an all-too-common scenario: a New York resident, was a passenger in a car insured under a Massachusetts policy (note: MA is also a no-fault state), was involved in a collision in New Jersey. The New York claimant received medical treatment in New York and assigned her benefits to her medical provider. When Travelers denied benefits, the provider sued in New York Civil Court.
Travelers moved for summary judgment, arguing that New Jersey law should apply (NJ imposes its no-fault law upon any out-of-state vehicle operated in NJ). Under NJ law, the plaintiff was compelled to submit its claim to NJ arbitration. Civil Court, Kings County, denied Travelers’ motion and ruled in favor of the plaintiff.
The Appellate Term affirmed. “This conflict of law, although arising in the context of a motor vehicle accident, must be resolved by the conflict of law rules relevant to contracts, not torts” (citing Matter of Eagle Ins. Co. v. Singletary, 279 AD2d 56 ). In Auten v. Auten (308 NY 155 ), the Court of Appeals developed a flexible “center of gravity” or “grouping of contacts” approach which gave controlling effect to the law of the state that has “the most significant relationship to the transaction and the parties.”
The court noted that a conflict exists between NY and NJ no-fault laws. “We find that the Civil Court properly determined that New York law controls, since New York has the most significant contacts, as both the assignor and medical provider are located in New York. We note that defendant’s papers failed to establish that New Jersey has more significant contacts than New York.”
Comment: New York’s conflict of laws rules are different for no-fault litigation (where the law of contracts applies) than in tort litigation. For tort cases, the rules were laid down in Neumeier v. Kuehner (31 NY2d 121). In any conflict of law case, however, the more complex the facts, the more difficult it is to predict how a court will decide the result.
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