## Facts

- Robert Smolack, a New York resident, owned a New York-registered station wagon and lent it in New York to his brother, Arthur Smolack, also a New York resident, for a family trip to Florida.
- While returning to New York, Arthur experienced worsening mechanical problems while driving in North Carolina but continued the trip.
- The car overturned in North Carolina, killing Arthur’s wife and injuring his children, including Kenneth S. Smolack, who later died.
- The plaintiffs sued in New York, asserting Arthur’s negligence and seeking to hold Robert liable as owner based on permissive use.
- New York Vehicle and Traffic Law § 388 imposes vicarious liability on an owner for the negligence of a permissive operator.
- North Carolina law treated owner liability as a rebuttable presumption based on agency, subject to being overcome by evidence such as lack of benefit to the owner.

## Issues

1. Whether New York or North Carolina law governs the owner’s vicarious liability for a permissive driver’s negligence when the accident occurs in North Carolina but the parties, vehicle, and permission relationship are centered in New York.
2. Whether New York’s policy embodied in Vehicle and Traffic Law § 388 should be applied to an out-of-state accident involving New York parties and a New York-registered vehicle.

## Decision

- The Court of Appeals reversed the dismissal of the claim against Robert Smolack.
- Applying New York’s interest-analysis conflicts approach, the court held New York law governed the owner-liability issue.
- Because Robert owned the vehicle and permitted Arthur to operate it, § 388 required that Robert be subject to vicarious liability for Arthur’s negligence.
- The case was remitted for further proceedings consistent with applying New York law to the owner-liability question.

## Legal Principles

- In multi-state torts, New York applies interest analysis (grouping of contacts) rather than a mechanical rule that the law of the accident location controls.
- For owner liability arising from permissive use, New York gives substantial weight to the jurisdiction most connected to the owner–driver relationship and the compensatory policy at stake.
- Vehicle and Traffic Law § 388 reflects a strong New York policy to assure compensation by imposing vicarious liability on owners for negligence of permissive operators.
- When the vehicle, owner, driver, and permission are New York-centered, the out-of-state location of the accident may be treated as incidental for the owner-liability issue.

## Conclusion

The court held that New York’s vicarious liability statute governed because New York had the primary interest in regulating and allocating loss for a New York owner’s permissive entrustment of a New York-registered vehicle to a New York driver, even though the crash occurred in another state.


Farber v. Smolack, 20 N.Y.2d 198 (N.Y. 1967)