Cooney v. Osgood Machinery, Inc.
612 N.E.2d 277, 81 N.Y.2d 66, 595 N.Y.S.2d 919 (1993)
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Rule of Law:
When a true conflict exists between the loss-allocating laws of two states, each favoring its respective domiciliary, the law of the jurisdiction where the tort occurred will generally apply as a tie-breaker. This choice is further supported if it protects the reasonable expectations of the parties involved.
Facts:
- In 1957 or 1958, Kling Brothers, Inc. manufactured a large metal-bending machine.
- In 1958, the machine was sold to American Standard Inc., a Buffalo company, through Osgood Machinery, Inc., a New York-based sales agent.
- Osgood Machinery, Inc. assisted American Standard in the setup and initial operation of the machine at its plant in Buffalo, New York.
- In 1969, the machine was sold to Paul Mueller Co., a Missouri company, which installed it in its plant in Springfield, Missouri.
- Mueller later modified the machine by adding a foot switch.
- In October 1978, Dennis J. Cooney, a Missouri resident and employee of Mueller, was injured while cleaning the machine at the Missouri plant.
- Cooney applied for and received workers' compensation benefits from his employer, Mueller, under Missouri law.
Procedural Posture:
- Dennis J. Cooney brought a products liability action against Osgood Machinery, Inc. in the Supreme Court of Erie County, New York, a state trial court.
- Osgood, as a third-party plaintiff, filed a third-party action against Paul Mueller Co., seeking contribution.
- Mueller moved for summary judgment to dismiss Osgood's third-party complaint, arguing Missouri law barred the claim.
- The trial court denied Mueller's motion, ruling that New York's contribution law should apply.
- Mueller, as appellant, appealed to the Appellate Division (an intermediate appellate court), which unanimously reversed the trial court and dismissed the third-party complaint against Mueller.
- Osgood, as appellant, then appealed to the Court of Appeals of New York, the state's highest court.
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Issue:
Does a Missouri statute that bars contribution claims against employers who have paid workers' compensation benefits apply in a New York contribution action, where New York law would otherwise permit such a claim?
Opinions:
Majority - Chief Judge Kaye
Yes, the Missouri statute barring contribution claims applies. This case presents a true conflict between competing post-event, loss-allocating rules, where Missouri's law favors its domiciliary (Mueller) and New York's law favors its domiciliary (Osgood). Applying the framework from Neumeier v. Kuehner, the court finds that the law of the locus of the tort—Missouri—should apply as a neutral tie-breaker. This approach is consistent with protecting the reasonable expectations of the parties, as Mueller reasonably expected protection under Missouri's workers' compensation scheme, while Osgood could not have reasonably expected the availability of contribution, which was not established in New York law at the time of its involvement with the machine. Finally, the Missouri statute does not violate New York's public policy, as the public policy exception is reserved for foreign laws that are truly 'obnoxious,' not merely different.
Analysis:
This case solidifies the application of the Neumeier rules beyond guest-statute cases to other loss-allocation conflicts in New York's choice-of-law jurisprudence. It establishes the law of the place of injury as the presumptive tie-breaker in true conflict situations involving split-domicile parties. The decision also emphasizes the role of protecting parties' reasonable expectations as a key factor in interest analysis and confirms that the public policy exception to applying foreign law is a very high bar to meet.
