Chochorowski v. Home Depot U.S.A.

• Decision Date: 30 July 2013
• Docket Number: No. SC 92594.,SC 92594.
• Citation: 404 S.W.3d 220
• Parties: Janet CHOCHOROWSKI, Individually and as the Representative of a Class of Similarly–Situated Persons, Appellant, v. HOME DEPOT U.S.A., d/b/a The Home Depot, Respondent.
• Court: Missouri Supreme Court

404 S.W.3d 220

Janet CHOCHOROWSKI, Individually and as the Representative of a Class of Similarly–Situated Persons, Appellant,

v.HOME DEPOT U.S.A., d/b/a The Home Depot, Respondent.

No. SC 92594.

Supreme Court of Missouri, En Banc.

July 30, 2013.

Phillip A. Bock, James M. Smith, Bock & Hatch LLC in Chicago, Mark L. Brown, SL Chapman LLC, St. Louis, for Chochorowski.

S. Stewart Haskins, King & Spaulding LLP, Atlanta, John C. Holstein, Lauren E. Tucker McCubbin, Polsinelli Shughart PC, Kansas City, and Russell K. Scott, Greensfelder, Hemker & Gale PC, Belleville, Ill., for Home Depot.

Jason R. Scheiderer, SNR Denton U.S. LLP, Kansas City, Deborah J. La Fetra, Sacramento, for the Pacific Legal Foundation.

PATRICIA BRECKENRIDGE, Judge.

Janet Chochorowski filed a class-action lawsuit against Home Depot, claiming that Home Depot violated the Missouri Merchandising Practices Act (MMPA), section 407.010 et seq.,¹ by automatically including a damage waiver fee in its tool rental agreement that Ms. Chochorowski signed when she rented a garden tiller. She also claimed the tool rental contract did not make clear that the damage waiver fee was optional and the damage waiver was of no value, allegedly unfair practices in violation of the MMPA. Home Depot filed a motion for summary judgment, which the trial court sustained. Ms. Chochorowski appealed. After an opinion by the court of appeals, this Court granted transfer. Mo. Const. art. V, sec. 10. Because the damage waiver in the rental contract was clearly optional and provided a benefit of value to Ms. Chochorowski, the undisputed material facts show that Home Depot did not engage in any unfair practice prohibited by MMPA and is entitled to judgment as a matter of law. The trial court's judgment is affirmed.

Factual and Procedural Background

On April 27, 2002, Janet Chochorowski and her husband went to a Home Depot store in Brentwood to rent a garden tiller. Before renting the tiller to Ms. Chochorowski, a Home Depot employee presented her with a rental agreement for the tiller.

At the top of the first page of the rental agreement was personal information for Ms. Chochorowski that had been stored in Home Depot's computer system from previous transactions and printed onto the form. As Ms. Chochorowski reviewed the agreement, she noticed that the address and driver's license information printed on the form was out of date. She wrote her current address next to the out-of-date address, lined through and corrected the state designation next to the driver's license number, and lined through and corrected her address in a second place on the form.

Below Ms. Chochorowski's personal information was a description of the equipment being rented and fees for the possible terms of the rental. On the lower half of the first page of the rental agreement was a box titled “SPECIAL TERMS AND CONDITIONS.” To the right of the box were listed the charges Ms. Chochorowski was incurring. Specifically, the charges were an “agreement subtotal” charge of $25 that was the per-day rental fee, a “damage waiver” charge of $2.50, sales tax in the amount of $1.83, and an estimated total of $29.33.

The terms and conditions inside the box, which appear on all standard Home Depot tool rental agreements, read as follows:

1. I HAVE BEEN OFFERED OPERATING MANUALS ON THE ABOVE LISTED RENTAL EQUIPMENT AND HAVE ACCEPTED THEM.

2. I ACCEPT THE BENEFIT OF THE DAMAGE WAIVER (IF APPLICABLE) DESCRIBED IN PARAGRAPH 11 IN THE TERMS AND CONDITIONS OF THE RENTAL AGREEMENT.

3. A CLEANING CHARGE OF $25.00 WILL BE ASSESSED IF THE ABOVE LISTED RENTAL EQUIPMENT IS NOT RETURNED CLEAN.

I HAVE READ AND AGREE, AS INITIALED TO THE RIGHT, TO THESE SPECIAL TERMS AND CONDITIONS.

Paragraph 11, referenced in the second enumerated paragraph in the box, appearedon the agreement's second page and stated:

If I pay the damage waiver charge for any Equipment, this agreement shall be modified to relieve me of liability for accidental damage to it, but not for any losses or damage due to theft, burglary, misuse or abuse, theft by conversion, intentional damages, disappearances or any loss due to my failure to care properly for such Equipment in a prudent manner (including without limitation by using proper fuel, oil and lubricants and not exceeding such Equipment's rated capacity, if applicable).

At the bottom of the box was written: “I HAVE READ AND AGREE, AS INITIALED TO THE RIGHT, TO THESE SPECIAL TERMS AND CONDITIONS.” Ms. Chochorowski initialed the box in the blank provided.

Finally, at the bottom of the agreement's first page was a paragraph that also appears on all standard Home Depot tool rental agreements. The paragraph contains a merger clause, acknowledges the renter's receipt of the tool, states that the renter agrees “to the terms and conditions printed on this page and on the other page(s) of the agreement,” and provides a procedure for modifying the agreement. The paragraph read:

I understand and agree that no representative of THE HOME DEPOT is authorized to make any oral or written promise, affirmation, warranty or representation to me other than those reflected in writing in this agreement. I acknowledge that I have received the above-listed Equipment and that I agree to the terms and conditions printed on this page and on the other page(s) of the agreement. I understand and agree that this agreement cannot be modified, amended, rescinded or otherwise changed except by a writing signed by THE HOME DEPOT and me, and that I have read and understand this provision regarding modification of the agreement.

Below the paragraph on a blank provided, Ms. Chochorowski signed her name.

After initialing and signing the agreement, Ms. Chochorowski returned it to the Home Depot employee and retained a copy for herself.² She also gave the employee her credit card information but, pursuant to the rental agreement, she was not charged anything at that time. She and her husband left the store with the tiller.

In the car on the way home from the store, Ms. Chochorowski examined the rental agreement more carefully. For the first time, she read the special terms and conditions in the box on the first page and noticed the charge of $2.50 for the damage waiver. When she read the special terms and conditions, she understood them. The next day when she returned the tiller, she asked a Home Depot employee about the damage waiver fee and was told “by the girl at the counter that it was insurance, and that they charge everybody this insurance. That if I would have damaged the tiller or did anything to it, it would have been covered. And I said, but I didn't damage it.” Ms. Chochorowski paid the bill without asking that the damage waiver fee be removed.

In March 2008, Ms. Chochorowski filed a class action petition against Home Depot in Madison County, Illinois. The petition included two counts. Count I alleged that Home Depot violated the Missouri Merchandising Practices Act (“MMPA”) by deceiving Ms. Chochorowski into believing that the damage waiver charge was not optional. Count II alleged that Home Depot violated the MMPA by imposing automatically the damage waiver charge, which Ms. Chochorowski claimed was worthless. On Home Depot's motion, the case was dismissed on the basis of forum non conveniens. Ms. Chochorowski refiled the case in St. Louis County. Home Depot filed a notice of removal to federal district court. In federal court, Ms. Chochorowski moved to remand the case back to St. Louis County. The federal district court sustained her motion. Chochorowski v. Home Depot USA, 585 F.Supp.2d 1085, 1096 (E.D.Mo.2008).

In St. Louis County circuit court, Home Depot moved to dismiss both counts of Ms. Chochorowski's petition for failure to state a claim. The circuit court granted its motion. The court of appeals reversed, finding that the circuit court, in evaluating Home Depot's motion, had considered materials outside Ms. Chochorowski's petition, namely the rental agreement and damage waiver. Chochorowski v. Home Depot USA, Inc., 295 S.W.3d 194, 198–99 (Mo.App.2009). The court of appeals remanded the cause to the circuit court. Id. at 199. On remand, Home Depot moved for summary judgment, claiming that the written terms of the rental agreement and its damage waiver provisions contradicted and disproved Ms. Chochorowski's allegations. The circuit court sustained Home Depot's motion for summary judgment and entered a final judgment in its favor.

Ms. Chochorowski appealed. After opinion by the court of appeals, this Court granted transfer. On appeal, Ms. Chochorowski claims that the circuit court erred in granting summary judgment for Home Depot because Home Depot automatically included the damage waiver charge in its tool rental contracts and required her to insist on its removal, in violation of the MMPA and 15 CSR 60–8.060. She also claims that Home Depot's form contract did not make clear that the damage waiver charge was optional and that the damage waiver was worthless.

Standard of Review

This Court's review of summary judgment is de novo. Roberts v. BJC Health System, 391 S.W.3d 433, 437 (Mo. banc 2013). On review, the record is viewed in the light most favorable to the party against whom judgment was entered. Id. A defendant is entitled to summary judgment if the defendant demonstrates, on the basis of facts as to which there is no genuine dispute, a right to judgment as a matter of law. Id. This can be done by showing (1) facts negating any one of the claimant's elements necessary for summary judgment; (2) that the claimant, after an adequate period of discovery, has not been able to and will not be able to produce evidence sufficient to allow the trier of fact to find the existence of one of the claimant's elements; or (3) facts necessary to support the defendant's properly pleaded affirmative defense. Id.

Damage Waiver Not a Negative Option

Ms. Chochorowski claims that Home Depot's tool rental agreement automaticallyincluded a...