KATHLEEN HARE AS POWER OF ATTORNEY FOR DANIEL HARE PLAINTIFF RESPONDENT v. MICHAEL EDDO DEFENDANT AND TOWNE FORD INC DEFENDANT APPELLANT (2026)

MEMORANDUM AND ORDER

It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.

Memorandum: Plaintiff, Kathleen O'Hare, as power of attorney for Daniel T. O'Hare (O'Hare), commenced this action seeking damages for injuries sustained by O'Hare when he was struck by a Mazda vehicle operated by defendant Michael A. Eddo (Eddo) and owned by defendant Towne Ford, Inc. (Towne). Towne, an automotive corporation that operates car dealerships of various manufacturers, had permitted Eddo to drive the vehicle pursuant to Towne's participation in the Mazda Courtesy Vehicle Program (courtesy vehicle program), which was extended only to Mazda customers whose own Mazda vehicles were being serviced in Towne's service department. Plaintiff alleged that Towne was vicariously liable for the negligence of Eddo pursuant to Vehicle and Traffic Law § 388. Towne asserted as an affirmative defense in the answer that the imposition of vicarious liability upon it pursuant to section 388 was prohibited by the Graves Amendment (49 USC § 30106).

Following discovery, Towne moved for summary judgment dismissing the amended complaint against it on the ground that the Graves Amendment preempted Vehicle and Traffic Law § 388 and thus precluded imposition of vicarious liability upon it under the circumstances. Towne asserted that it qualified for the protection of the Graves Amendment because, among other things, it had rented the vehicle to Eddo within the meaning of the statute and it was in the business of renting or leasing motor vehicles. Plaintiff opposed Towne's motion and cross-moved for partial summary judgment seeking, among other things, to dismiss Towne's affirmative defense based on the Graves Amendment. Plaintiff contended that the Graves Amendment is inapplicable because, among other things, Towne did not “rent” the vehicle to Eddo within the meaning of the statute by providing it as a courtesy without charge and Towne was not in the business of “renting” motor vehicles.

Supreme Court, in relevant part, denied Towne's motion and granted plaintiff's cross-motion insofar as it sought partial summary judgment dismissing Towne's affirmative defense based on the Graves Amendment. Towne now appeals, contending that the court should have granted its motion because it established as a matter of law that the Graves Amendment applies under the circumstances of this case and therefore precludes the imposition of vicarious liability upon Towne pursuant to Vehicle and Traffic Law § 388. Towne contends in particular that, under its reading of the Graves Amendment, it fulfilled each of the qualifying conditions for application of the statute, including that it rented the vehicle to Eddo and was in the business of renting or leasing motor vehicles. Plaintiff and Eddo respond that the Graves Amendment is inapplicable because, under a correct understanding of the statute, Towne neither rented the vehicle to Eddo nor was in the business of renting motor vehicles. We affirm for the reasons that follow.

“We interpret federal statutes according to [their] ordinary, contemporary, common meaning” (Second Child v Edge Auto, Inc., — NY3d —, —, 2026 NY Slip Op 02436, *3 [2026] [internal quotation marks omitted]; see Southwest Airlines Co. v Saxon, 596 US 450, 455 [2022]). “To discern that ordinary meaning, th[e] words [of the statute] must be read and interpreted in their context, not in isolation” (Southwest Airlines Co., 596 US at 455 [internal quotation marks omitted]). Consequently, “[w]e assess plain meaning by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole” (Second Child, — NY3d at —, 2026 NY Slip Op 02436, *3 [internal quotation marks omitted]).

Critical to the context of the federal statute at issue here, the Graves Amendment contains an express preemption provision that shields certain motor vehicle owners under qualifying circumstances from the imposition of vicarious liability pursuant to state laws such as Vehicle and Traffic Law § 388 (49 USC § 30106; see Second Child, — NY3d at —, 2026 NY Slip Op 02436, *3-4). Inasmuch as “the States are independent sovereigns in our federal system, [the courts] have long presumed that Congress does not cavalierly [preempt] state-law causes of action” (Medtronic, Inc. v Lohr, 518 US 470, 485 [1996]; see Sutton 58 Assoc. LLC v Pilevsky, 36 NY3d 297, 306 [2020], cert dismissed — US —, 142 S Ct 53 [2021]). “In all [preemption] cases, and particularly in those in which Congress has ‘legislated ․ in a field which the States have traditionally occupied,’ ” such as the provision of tort remedies to their citizens in state laws like Vehicle and Traffic Law § 388, “we ‘start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress’ ” (Medtronic, Inc., 518 US at 485, quoting Rice v Santa Fe El. Corp., 331 US 218, 230 [1947]; see generally Wos v E.M.A., 568 US 627, 639-640 [2013]). That presumption applies “to questions concerning the scope of [the federal law's] intended invalidation of state law” (Medtronic, Inc., 518 US at 485); therefore, when analyzing an express preemption statute like the Graves Amendment, we “ ‘take heed of the rule of interpretation that preemption clauses in a statute are to be narrowly construed and that matters beyond their scope are not preempted’ ” (Matter of Petralia v New York State Dept. of Labor, 191 AD3d 1466, 1468 [4th Dept 2021], appeal dismissed 37 NY3d 1036 [2021], reconsideration denied 37 NY3d 1138 [2022]; see Medtronic, Inc., 518 US at 485; Cipollone v Liggett Group, Inc., 505 US 504, 518, 523 [1992]). Inasmuch as “[t]he purpose of Congress is the ultimate touchstone in every [preemption] case ․, any understanding of the scope of a [preemption] statute must rest primarily on a fair understanding of congressional purpose” (Medtronic, Inc., 518 US at 485-486 [internal quotation marks and emphasis omitted]). “Congress’ intent, of course, primarily is discerned from the language of the [preemption] statute and the statutory framework surrounding it” (id. at 486 [internal quotation marks omitted]).

The Graves Amendment provides in relevant part that “[a]n owner of a motor vehicle that rents or leases the vehicle to a person ․ shall not be liable under the law of any State ․, by reason of being the owner of the vehicle ․, for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if ․ the owner ․ is engaged in the trade or business of renting or leasing motor vehicles[ ] and ․ there is no negligence or criminal wrongdoing on the part of the owner” (49 USC § 30106 [a]). There is no dispute here that Towne owned the vehicle that it provided to Eddo pursuant to its courtesy vehicle program and that the harm to O'Hare arose out of Eddo's use, operation, or possession of the vehicle during that period, nor does plaintiff allege any negligence or criminal wrongdoing on the part of Towne. Additionally, Towne does not contend that it leased the vehicle to Eddo within the meaning of the statute. Thus, to trigger the protection afforded by the Graves Amendment, Towne first has to establish that it “rent[ed]” the vehicle to Eddo (49 USC § 30106 [a]).

The Graves Amendment does not define what it means to be the owner of a motor vehicle that “rents” the vehicle (49 USC § 30106 [a]; cf. § 30106 [d]). “In the absence of any controlling statutory definition, we construe words of ordinary import with their usual and commonly understood meaning, and in that connection ․ dictionary definitions [serve] as ‘useful guideposts’ in determining the meaning of a word or phrase” (Rosner v Metropolitan Prop. & Liab. Ins. Co., 96 NY2d 475, 479-480 [2001]; see e.g. Wisconsin Bell, Inc. v United States, 604 US 140, 148-149 [2025]; Delaware v Pennsylvania, 598 US 115, 127-128 [2023]). Most relevantly, the transitive verb “rent” means “to grant the possession and enjoyment of in exchange for rent,” and the noun “rent,” in turn, means “the amount paid by a hirer of personal property to the owner for the use thereof” (Merriam-Webster's Collegiate Dictionary 1054 [11th ed 2003]). Other contemporaneous dictionaries similarly provide that the transitive verb “rent” means, from the owner's perspective, to “let someone use (something) in return for payment,” and from the hirer's perspective, to “pay someone for the use of (something, typically property, land, or a car)” (The New Oxford American Dictionary 1434 [2d ed 2005]; see The Merriam-Webster Dictionary 614 [2004]; see also Romero v Fields Motorcars of Fla., Inc., 333 So 3d 746, 749 [Fla Dist Ct App 2022], review denied 2022 WL 3368547, *1 [Fla 2022]). Thus, according the word “rents” as used in the Graves Amendment (49 USC § 30106 [a]) its “ordinary, contemporary, common meaning” and considering “the specific context in which that language is used,” i.e., in relation to the rental of personal property in the form of a motor vehicle (Second Child, — NY3d at —, 2026 NY Slip Op 02436, *3 [internal quotation marks omitted]), we conclude that an owner must receive payment for the use of the vehicle to meet that statutory condition (accord Romero, 333 So 3d at 749; Zizersky v Life Quality Motor Sales, Inc., 21 Misc 3d 871, 878 [Sup Ct, Kings County 2008]). Under that understanding of the plain meaning of the statute, Towne does not qualify for the protection of the Graves Amendment inasmuch as the undisputed evidence submitted on the motions, including deposition testimony and the content of the agreement that Towne had Eddo sign before providing the vehicle under its courtesy vehicle program, establishes that Eddo did not pay any rental charges nor any incidental fees related to the use of the vehicle, such as for gasoline.

Towne nonetheless contends, relying on case law from other jurisdictions that have employed a broader definition of the word “rents” in concluding that the Graves Amendment protects car dealerships from being held vicariously liable for the tortious conduct of the driver of a courtesy vehicle (see Thayer v Randy Marion Chevrolet Buick Cadillac, LLC, 30 F4th 1290 [11th Cir 2022]; Garcia v Steele, 492 Mass 322 [2023]), that it rented the vehicle to Eddo within the meaning of the statute because there was an exchange of consideration insofar as Towne received the opportunity to service Eddo's own vehicle and received incentive payments from Mazda for Towne's participation in the courtesy vehicle program. We reject that contention because, in our view, the reasoning in Thayer and Garcia is unpersuasive.

Preliminarily, Thayer and Garcia immediately resorted to a legalistic definition of the noun “rent” as contained in a contemporaneous version of Black's Law Dictionary, even while acknowledging that the edition that “was current when the Graves Amendment was enacted and for several years thereafter[ did] not define ‘rent’ as a verb,” which is the part of speech actually used in the operative portion of the statute (Thayer, 30 F4th at 1293 n 3; see Garcia, 492 Mass at 328 n 6). Notably, the current edition of Black's Law Dictionary now defines “rent” as a verb in a manner that is consistent with the plain meaning of the word as construed above: “[t]o pay for the use of another's property” (Black's Law Dictionary [12th ed 2024], rent [emphasis added]).

More importantly, Thayer and Garcia gave inadequate attention to the rule of interpretation, born of the presumption against preemption arising from respect for state sovereignty, “ ‘that preemption clauses in a statute are to be narrowly construed and that matters beyond their scope are not preempted’ ” (Petralia, 191 AD3d at 1468). To the contrary, Thayer and Garcia admittedly construed the statute in precisely the opposite manner: those cases defined “rents” by incorporating therein the concept of consideration in its “broad[ ]” (Thayer, 30 F4th at 1294) and “widest” sense (Garcia, 492 Mass at 329 [internal quotation marks omitted]). But preemption statutes should be construed narrowly, not broadly, in order to avoid extending such statutes beyond their intended scope (see Medtronic, Inc., 518 US at 485; Petralia, 191 AD3d at 1468). Employing that rule of interpretation and reading the statute “based on how a reasonable reader would have understood the text,” we conclude that “a reasonable reader competent in English would not contemplate that dropping a vehicle off for service and obtaining a complimentary loaner vehicle [free of charge, even if the car dealership receives incentive payments from the manufacturer for providing the courtesy vehicle,] constitutes a ․ rental situation” (Romero, 333 So 3d at 749).

Taken all together, “[w]ithout clearer indication from Congress, we see no reason to infer greater ․ application of a law that otherwise denies injured plaintiffs a viable cause of action” (Jones v Bill, 10 NY3d 550, 555 [2008]). In light of our conclusion that Towne does not qualify for the protection of the Graves Amendment because it did not, as a matter of law, “rent[ ]” the vehicle to Eddo within the meaning of the statute (49 USC § 30106 [a]), we need not opine regarding whether Towne fulfilled the additional condition that it be “engaged in the trade or business of renting or leasing motor vehicles” (49 USC § 30106 [a] [1]).

Entered: July 24, 2026

Ann Dillon Flynn

Clerk of the Court