Budget Rent-A-Car Sys., Inc. v. Cleveland

• Decision Date: 18 December 2020
• Docket Number: 5-17-0458
• Citation: 2020 IL App (5th) 170458,186 N.E.3d 942
• Parties: BUDGET RENT-A-CAR SYSTEM, INC., Plaintiff-appellee, v. Shanika CLEVELAND, Defendant-appellant.
• Court: United States Appellate Court of Illinois

2020 IL App (5th) 170458

186 N.E.3d 942

BUDGET RENT-A-CAR SYSTEM, INC., Plaintiff-appellee,

v.Shanika CLEVELAND, Defendant-appellant.

NO. 5-17-0458

Appellate Court of Illinois, Fifth District.

Rule 23 order filed December 2, 2020.

Motion to publish granted December 18, 2020.

Opinion filed December 18, 2020

David Maxwell Duree of David M. Duree & Associates, P.C., for appellant.

Laura Kristin Beasley of Baker, Sterchi, Cowden & Rice, LLC, for appellee.

JUSTICE BARBERIS delivered the judgment of the court, with opinion.

¶ 1 Plaintiff, Budget Rent-A-Car System, Inc. of St. Louis, Missouri (Budget), filed a breach of contract action against defendant, Shanika Cleveland, seeking to recover damages from a car accident involving a rental car it had leased to Cleveland. Following a jury trial in St. Clair County, a judgment was entered in favor of Budget. On appeal, Cleveland argues that the circuit court erred in denying her posttrial motion for judgment notwithstanding the verdict (JNOV). Alternatively, Cleveland requests a new trial to submit her affirmative defense that Budget paid as a volunteer, because, according to Cleveland, Budget was not legally obligated to pay the claimed damages. For the following reasons, we reverse the judgment and remand for a new trial consistent with this opinion.

¶ 2 I. Background

¶ 3 On May 16, 2010, Cleveland rented a vehicle from Budget and signed a one-page "Rental Document Jacket" that incorporated the rental agreement. The rental agreement contained all rental terms and conditions, as well as the following notice: "NO ADDITIONAL DRIVERS ARE AUTHORIZED OR PERMITTED WITHOUT BUDGET'S PRIOR WRITTEN APPROVAL * * *." As such, Cleveland was the only authorized driver of the rental car per the rental agreement. On May 22, 2010, Sammy Morning, Cleveland's boyfriend, was driving the rental car in East St. Louis, Illinois, without a valid driver's license, when he was involved in a car accident that allegedly caused damage to two other automobiles and injured four occupants.

¶ 4 The rental agreement also defined prohibited uses of the vehicle and contained an indemnity clause. The relevant sections at issue are paragraphs 14, 15, and 18. With regard to the prohibited uses of the rental car, paragraph 14 provided the following:

"14. Prohibited Use of the Car : Certain uses of the car and other things you or a driver may do, or fail to do, will violate this agreement * * *. A VIOLATION OF THIS PARAGRAPH, WHICH INCLUDES USE OF THE CAR BY AN UNAUTHORIZED DRIVER, WILL AUTOMATICALLY TERMINATE YOUR RENTAL, VOID ALL LIABILITY PROTECTION AND ANY OPTIONAL SERVICES THAT YOU HAVE ACCEPTED, INCLUDING SUPPLEMENTAL LIABILITY INSURANCE, PERSONAL ACCIDENT & EFFECTS INSURANCE, EMERGENCY SICKNESS PROTECTION AND LOSS DAMAGE WAIVER. IT ALSO MAKES YOU LIABLE TO US FOR ALL THE PENALTIES, FINES, FORFEITURES, LIENS AND RECOVERY AND STORAGE COSTS, INCLUDING ALL RELATED LEGAL EXPENSES, FEES AND COSTS.

It is a violation of this paragraph if:

A. You * * * permit the car to be used: 1) by anyone other than an authorized driver, as defined in paragraph 15 below * * * or

B. You or an additional driver, authorized or not: 1) fail to properly report any damage in or loss of the car when it occurs or when you learn of it and provide us with a written accident/incident report or fail to cooperate fully with our investigation * * *. * * * 3) leave the car and fail to remove the keys or close and lock all doors, close all windows and the truck and the car is stolen or vandalized."

Next, paragraph 15 provided the following:

"15. Who May Drive the Car : Except where otherwise specifically authorized by applicable law, only you, your spouse, or domestic partner * * * may drive the car, but only with your permission. The other driver must be at least 25 years old and must be a capable and validly licensed driver * * *."

Lastly, paragraph 18 provided the following indemnification clause:

"18. Indemnification and Waiver : You agree to indemnify us, our parent and affiliated companies, for and hold us harmless from any loss, liability and expense that we incur arising out of the use of the car, including reasonable attorney's fees: * * * (b) which results from any unauthorized use or prohibited operation of the car."

¶ 5 On July 10, 2015, Budget filed a verified complaint against Cleveland, suing as the owner of the rental car, not the insurer. Budget alleged that Cleveland had breached the rental agreement by engaging in "unauthorized and/or prohibited use of the rented vehicle, namely negligence, gross negligence" and for allowing an "unauthorized person, Sammy Morning, to operate the vehicle owned by Budget and rented by Cleveland." In addition, Budget asserted that, as a result of the accident, it had reimbursed the third parties for damages suffered to their persons and vehicles in the amount of $36,462.48. Budget claimed that it was entitled, pursuant to the "Indemnification and Waiver" provision, to be reimbursed for the payments it made to the third parties.

¶ 6 On August 6, 2015, Cleveland filed a motion to dismiss, pursuant to section 2-606 of the Code of Civil Procedure ( 735 ILCS 5/2-606 (West 2014) ), claiming that the rental agreement had not been attached to Budget's complaint. Shortly thereafter, on August 21, 2015, after Cleveland received a copy of the complete contract from Budget's attorney, Cleveland withdrew her motion to dismiss. That same day, Cleveland filed a verified answer to Budget's complaint, attaching the "Rental Document Jacket" that had been referenced in Budget's complaint and a complete copy of the "Rental Terms and Conditions."¹ Cleveland asserted an affirmative defense, denying liability for any damages as a result of the accident, because Morning had taken the rental car without her permission. As such, Cleveland argued she was not liable to Budget under the indemnity clause.

¶ 7 The case was set for mandatory arbitration on January 13, 2016. Pursuant to Illinois Supreme Court Rule 90(c) (eff. July 1, 2008), Budget disclosed the Agreement, the police report prepared on May 22, 2010, and Budget's incident report, also prepared on May 22, 2010, by Cleveland. Additionally, Budget disclosed an affidavit from Scott Seemann, an investigator who had been hired by Budget to look into the cause of the collision and to assist in resolving claims by those who claimed property loss or personal injuries, "establishing damages of $36,462.48," and a statement from Rosie Marshall. The arbitration proceeding did not result in a resolution of the dispute, and the case was set for trial.

¶ 8 Several motions were filed in anticipation of trial. Cleveland filed a "Trial Memorandum" that included her affirmative defense, and raised, for the first time, the defense that "Budget was not obligated to pay other drivers and passengers and therefore paid as a volunteer." Cleveland's attorney also submitted a proposed jury instruction based upon "I.P.I. 700.09V, 700.07V, 700.3V, 700.16V, 700.12VC and 700.18V (Modified)." This burden of proof instruction included Cleveland's affirmative defenses and provided as follows:

"If you find that each of the above elements has been proved, then you must consider:

Shanika Cleveland's claim of an affirmative defense.

Shanika Cleveland claims and has the burden of proving the following affirmative defense:

That Budget Rent-A-Car System, Inc. paid the other drivers and passengers in the automobile accident as a volunteer, when it was not obligated to pay.

Budget Rent-A-Car System, Inc. denies Shanika Cleveland's affirmative defense."

Therefore, when Cleveland's attorney submitted her trial memorandum on December 8, 2016, the affirmative defense alleged that Budget had not been obligated to pay for the losses suffered by the third parties as a result of Morning's use of the rental vehicle. Simply put, Cleveland alleged that Budget voluntarily paid the damages claimed by the third parties without any legal obligation to do so.

¶ 9 On May 2, 2017, the circuit court ordered the parties to submit a stipulation regarding evidence that the parties agreed would be introduced at trial. Following the rescheduling of the final pretrial hearing, originally set for June 29, 2017, Budget's attorney filed stipulations, although the record does not contain a proof of service indicating whether Cleveland received the proposed stipulations prior to that date. Specifically, Budget stipulated that Cleveland had rented a vehicle from Budget and, per Seemann's affidavit, Cleveland, the only person authorized to operate the rental car, had failed to report the rental car stolen and refused to provide any information following the accident. Also, the stipulation indicated that the accident on May 22, 2010, occurred while the rental car was being driven by Morning, an unauthorized driver. As a result of the accident, Budget made payments, totaling $36,462.48, for property damages and personal injuries.² Attached to Budget's stipulations were two exhibits—Exhibit A, a copy of the Agreement, and Exhibit B, the affidavit of Seemann.

¶ 10 On July 10, 2017, prior to jury selection, the circuit court entertained several pretrial matters. The circuit court first addressed Budget's stipulations, file-marked June 29, 2017. Cleveland's attorney indicated to the court that he had not agreed to the stipulations filed by Budget's attorney. Although he had no objection to the admissibility of Exhibit A, Cleveland's attorney objected to Exhibit B. Budget's attorney agreed that Budget could read Seemann's affidavit to the jury, in lieu of live testimony, but Cleveland was not stipulating to the truth of the facts stated in the affidavit and reserved the right to rebut the facts set forth in Seemann's affidavit.

¶ 11 After considering the parties' arguments, the circuit court set aside the previously file-marked stipulations. The court indicated that Exhibit A would be admitted and go to the jury. With regard to Exhibit B, the court offered Budget's...