Avis Rent A Car Systems, Inc. v. Heilman

• Decision Date: 12 September 2003
• Citation: Avis Rent A Car Systems, Inc. v. Heilman, 876 So.2d 1111 (Ala. 2003)
• Parties: AVIS RENT A CAR SYSTEMS, INC., et al. v. Cindy Wiegel HEILMAN and Rosalind Davis Meyer. Avis Licensee Defendants, v. Cindy Wiegel Heilman and Rosalind Davis Meyer.
• Court: Alabama Supreme Court

876 So.2d 1111

AVIS RENT A CAR SYSTEMS, INC., et al. v.Cindy Wiegel HEILMAN and Rosalind Davis Meyer.

Avis LicenseeDefendants, v.Cindy Wiegel Heilman and Rosalind Davis Meyer.

1067.

Supreme Court of Alabama.

September 12, 2003.

Robert A. Huffaker of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for appellantsAvis Rent A Car Systems, Inc., Avis Rent A Car, Inc., and Cendant Corporation.

Billy C. Bedsole of Stockman & Bedsole, Mobile, for appellantsCoates Motor Rental, Inc.; Mobile U-Drive It, Inc.; Car & Truck Rentals, Inc.; Clark Car & Truck Rental, Inc.; and Southeastern Car & Truck Rentals, Inc.

Russell Jackson Drake and Charlene P. Ford of Whatley Drake, L.L.C., Birmingham; and Robert D. Segall of Copeland, Franco, Screws & Gill, P.A., Montgomery, for appellees.

WOODALL, Justice.

Avis Rent A Car Systems, Inc.; Avis Rent A Car, Inc.; and Cendant Corporation(hereinafter collectively referred to as "Avis");¹ and "the Avis Licensee Defendants," namely, Coates Motor Rental, Inc.; Mobile U-Drive It, Inc.; Car & Truck Rentals, Inc.; Clark Car & Truck Rental; and Southeastern Car & Truck Rentals, Inc.(hereinafter collectively referred to as "the licensees"),² appeal from an order certifying a class action pursuant to Ala. R. Civ. P. 23(b)(3); the class action asserts claims of breach of contract, unjust enrichment, and conspiracy.We affirm the order in part, vacate it in part, and remand.

This dispute began in 1998, when Cindy Wiegel Heilman and Rosalind Davis Meyer each rented automobiles from Avis or the licensees at the airports in Birmingham and Montgomery, respectively, and paid, in addition to a fee for a rental period, charges described in their "transaction" documents as (1) an "8% tax recovery surcharge"("the surcharge"), and (2) a 10% "concession fee recoupment"("the recoupment").³With each transaction, the renters received three documents.

When Heilman and Meyer took possession of their rented vehicles, they each received a "rental document," stating that they would be charged, among other things, the following:

"10.00% CONCESSION FEE RECOUP TAX: .000% 8% TAX RECOVERY SURCH."

Heilman and Meyer each signed her respective rental document.The rental document was accompanied by a "rental jacket," containing a list of "rental terms and conditions."The rental jacket provided, in part:

"1.These terms and conditions, the rental document signed by me, and a return record with computed rental charges together constitute the rental agreement between myself and Avis Rent A Car System, Inc., or the independent Avis System Licensee identified on the rental document.

"....

"5.Rental Charges.I will pay for the number of miles I drive and the length of time I rent the car at the time and mileage rates indicated on the rental document.The minimum charge is one day (24 hours) plus mileage, or a fixed fee.Miles determined by reading the factory-installed odometer.Daily charge applies to consecutive 24 hour periods starting at the hour and minute the rental begins.I'll pay charges for miscellaneous services which apply to the rental.On tour rate rentals an additional per day charge will apply to certain renters as specified on the rental document.

"6.I'll pay all sales, use, rental, and excise taxes, including tax-related surcharges."

(Emphasis added.)Finally, upon the return of each car, the renter received a "return record."The return record listed the itemized charges, including the surcharge and the recoupment.Heilman was subsequently reimbursed by her employer, Douglas Stewart Company, Inc.("Stewart"), for the cost of the rental.

On March 13, 2000, Heilman and Meyer sued Avis and the licensees on behalf of themselves and "all others similarly situated," alleging that the surcharge and the recoupment were unauthorized by law and that they had been assessed in violation of the terms of the transaction documents.They sought compensatory and punitive damages under several theories, including breach of contract, fraud, suppression, and misrepresentation.The complaint also contained a conspiracy count, which alleged in toto:

"42.[Heilman and Meyer] reallege the allegations contained in all preceding paragraphs of the complaint.

"43.Avis [and the licensees] entered into a conspiracy beginning as early as 1990 to, among other things, suppress the information and/or to make the false representations as aforesaid.

"44.[Avis and the licensees] have done those things they conspired and concerted to do.As a proximate consequence thereof, [Heilman and Meyer] and the class [have] been injured as aforesaid.

"WHEREFORE, premises considered, [Heilman and Meyer] pray for judgment for compensatory damages in an amount to be determined by the jury and punitive damages, interest and costs."

They also sought injunctive relief and restitution under a theory of "unjust enrichment."

On July 30, 2002, Heilman and Meyer moved to certify the action as a class action, pursuant to Rule 23(b)(3).On December 17, 2002, the trial court entered an order, stating in part:

"With respect to the following causes of action: breach of contract, unjust enrichment, and conspiracy, this lawsuit shall be maintained as a class action on behalf of the following class of [Heilman and Meyer]:

"All persons, firms and corporations or their employees or agents (other than [Avis and the licensees], their parents and subsidiaries and their directors, officers, employees, agents or representatives) who rented cars or other vehicles from one or more of the [Avis and the licensees] at any time since December 1, 1990, at car rental locations in the State of Alabama."

(Emphasis added.)The trial court declined to certify the fraud-based claims for class treatment.

Moreover, the court stated: "In written responses and in oral argument, [Heilman and Meyer] have confirmed that they seek to recover solely on their written contracts....[Avis and the licensees] do not argue that the terms of the written contracts were varied by oral agreements.Accordingly, [Heilman and Meyer's] breach of contract claims are limited to their written contracts...."(Emphasis added.)Avis and the licensees appealed, contending that the trial court's analysis and holding fail to satisfy the Rule 23 requirements of class certification.

It is well settled that the party seeking certification of a Rule 23(b)(3) class must demonstrate the existence of all the criteria set forth in Rule 23(a), namely, (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation, plus the Rule 23(b)(3) requirements of (1) predominance and (2) superiority.SeeReynolds Metals Co. v. Hill,825 So.2d 100, 103(Ala.2002).More specifically, putative Rule 23(b)(3) class representatives must demonstrate that "the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy."Rule 23(b)(3).

A number of these criteria, such as the Rule 23(a) requirements of commonality and typicality and the Rule 23(b)(3) requirement of predominance, are analytically similar.Heartland Communications, Inc. v. Sprint Corp.,161 F.R.D. 111, 117(D.Kan.1995).Avis and the licensees contend, in substance, that the class was certified without the requisite showing of Rule 23(a)typicality and adequacy of representation, or of Rule 23(b)(3)predominance.

I.Typicality and Adequacy

Avis and the licensees argue that Heilman and Meyer are not similarly situated with all members of the certified class, and, therefore, that they cannot adequately represent the class.They also argue that Heilman lacks standing to sue, either as an individual or as a class representative.We first address the typicality of the claims of Heilman and Meyer, as that factor relates to the adequacy of their class representation.

A.Adequacy of Heilman and Meyer as Class Representatives

Avis and the licensees contend that Heilman and Meyer cannot adequately represent the class certified by the trial court, because, they insist, the circumstances under which they contracted with Avis and the licensees are atypical of the circumstances under which other class members contracted with Avis and the licensees.We find some merit in this contention.

"`The essence of the typicality requirement is that the relationship between the injury to the class representatives and the conduct affecting the entire class of plaintiffs must be sufficient for the court to properly attribute a collective nature to the challenged conduct.'"Atlanta Cas. Co. v. Russell,798 So.2d 664, 668(Ala.2001)(quotingWarehouse Home Furnishing Distribs., Inc. v. Whitson,709 So.2d 1144, 1149(Ala.1997)).The typicality requirement " "serve[s] as [a] guidepost[] for determining whether under the particular circumstances ... the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.'"Atlanta Cas. Co.,798 So.2d at 666-67(quotingGeneral Telephone Co. of the Southwest v. Falcon,457 U.S. 147, 158, 102 S.Ct. 2364, 72 L.Ed.2d 740(1982)).

Heilman and Meyer base their claims on two species of fee charged by Avis and the licensees in connection with their vehicle rentals: the surcharge and the recoupment.The trial court certified a class composed of individuals and corporations that had rented cars from Avis or the licensees.However, the manner in which the challenged fees were presented to, or affected, the putative class members differed considerably among the members, depending on (1) whether the renter was an individual or a corporation; (2) whether the renter was a "corporate traveler"; and (3) whether a national corporate contract accorded the renter "preferred" or "nonpreferred customer" status.

A significant percentage of...