Crowe v. Hertz Corporation

• Decision Date: 19 June 1967
• Docket Number: No. 23775.,23775.
• Citation: 382 F.2d 681
• Parties: Sara C. CROWE, by and through L. L. Crowe, as next friend, and Donald Cox, Appellants, v. The HERTZ CORPORATION, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

382 F.2d 681 (1967)

Sara C. CROWE, by and through L. L. Crowe, as next friend, and Donald Cox, Appellants, v. The HERTZ CORPORATION, Appellee.

No. 23775.

United States Court of Appeals Fifth Circuit.

June 19, 1967.

James I. Parker, Cedartown, Ga., Wade C. Hoyt, Jr., Rome, Ga., Harold L. Murphy Tallapoosa, Ga., for appellants.

Donald M. Fain, Nall, Miller, Cadenhead & Dennis, Atlanta, Ga., for appellee.

Before TUTTLE, Chief Judge, AINSWORTH, Circuit Judge, and FULTON, District Judge.

TUTTLE, Chief Judge:

This is an appeal from a summary judgment dismissing a personal liability damage suit arising out of an injury suffered by the appellant in the Bahama Islands while she was riding in an automobile driven by the defendant, Donald Cox, rented by the latter from the local Hertz Rent-A-Car station. The appeal is joined by Cox, an original defendant, whose cross-complaint against Hertz was also dismissed by the order of the trial court.

The substance of the complaint was that the defendant, The Hertz Corporation, held itself out, both by long, continuous and saturation-type advertising to offer rent-a-car service throughout the world; that this service included furnishing of the highest standard of insurance coverage; that Cox, together with two friends, rented a "Hertz" car for their use from a rent-a-car station bearing the "Hertz" sign and symbol under circumstances that made Cox an insured driver; that in driving the appellant, Miss Crowe, on the roads in the Bahamas, Cox was involved in a head-on collision with another car owing to his lack of knowledge of the local driving requirements that automobiles be driven on the left rather than the right side of the road; that Cox's negligent driving seriously injured the plaintiff;¹ that Miss Crowe was entitled to the protection of a public liability insurance policy, both contracted for from the local agency and as held out under the worldwide advertising by the defendant, Hertz Corporation; that the policy actually issued for the protection of the drivers of the rent-a-car system in the Bahamas excluded protection of the drivers against liability claims of passengers and thus excluded any benefit to an injured passenger like Miss Crowe; that this exclusion was false and contrary to the representations contained in national advertising of the Hertz Corporation and amounted to a fraud upon the renters of automobiles such as Cox, for which recovery could be had for the benefit of the passenger.

In his defense, Cox admitted the accident, but denied liability, contending that the accident was not due to his negligence. Cox also filed a third party claim over against the Hertz Corporation, reasserting the grounds of action as alleged by Miss Crowe and also relying upon the holding out by the national advertising of Hertz Corporation to him as a renter of a Hertz car.

In view of our conclusion that the trial court erred in summarily dismissing not only Miss Crowe's, but also Cox's claim against the Hertz Corporation, without determining whether there existed facts upon which relief could be granted in the event that Hertz was found to be a proper party defendant, we find it necessary to make a fairly full statement of the facts.

The following is a statement which the trial court found to be uncontradicted facts. The statement is taken from the opinion of the trial court.

On June 7, 1965, the defendant, Donald Cox, with Bill Grubbs and Aldo Bergomi went to a desk bearing a large sign, "Hertz Rent A Car" at the Sheraton British Colonial Hotel in Nassau, Bahama Islands, where an automobile was rented. It was a 1964 or 1965 model Chevelle red convertible.

The three of them talked with each other in the presence of the man at the desk about sharing the use, and cost, of the car rental and discussed with the man the rental cost, with and without insurance, and decided to contract to pay the "with insurance" rate. The man at the desk, so Cox believes, wore a shirt or uniform with a parallelogram "Hertz" on it. Donald Cox believed that the three of them rented the automobile jointly, but only Bergomi signed the rental agreement.

Cox drove the rented car away from the rental agency on the afternoon of June 7, 1965, and the three of them took turns driving about the island. That night Cox and Grubbs used the car, Bergomi was not along. Cox and Grubbs returned the keys to the "Hertz" desk at the hotel that night. Bergomi, Cox and Grubbs divided the costs of renting the car.

Late the next day, on June 8, 1965, Bergomi told Grubbs and Cox that he wanted to again rent a car and asked them if they wished to "go in on it", and they agreed to share the use and expense of the car. Bergomi went alone and rented a Vauxhall 4-door sedan and the three boys drove the three Crowe girls about the island.

On the evening of June 8, 1965, Cox and the plaintiff, Sara Crowe went out in the car together and at about 11:30 P.M. were involved in a headon collision with another automobile and the plaintiff was injured.

After the accident the wrecked car was towed to a large fenced in lot bearing a large "Hertz" sign and there stored.

The Hertz signs were the same type as used by the Hertz Corporation in their advertising in the United States.

After the occurrence here involved, Mr. James I. Parker visited Nassau, and a "Hertz" Rent A Car station nearby and photographed the station, which bore "Hertz Rent A Car" signs.

On March 23, 1966, counsel for plaintiff, Harold L. Murphy, along with associate counsel, James I. Parker, went to the office of Hertz Rent A Car in Nassau, Bahamas, to interview its manager, Terry Morrissey, and while waiting for him, Mr. Murphy picked up from the ground to the rear of the offices certain receipts and certain rental car invoices showing the front and back of rental contracts.

Mr. Murphy examined the agreements found there with rental agreements issued by offices of the Hertz Corporation in the United States, and the rental agreement issued upon the automobile in which plaintiff was riding at the time of her injury, and in each instance found page one to be identical, and page two to be identical except for the filled in information as to type of car, charges, time, etc.

At the time of Murphy's visit to "Hertz Rent A Car" Nassau, Bahamas, he acquired a Hertz Rent A Car reservation entitled Hertz Reservation Office, 660 Madison Avenue, New York, N. Y., reserving an automobile for a customer arriving at Nassau, Bahamas, on March 10, 1966, which address is also that of the executive offices of the Hertz Corporation as shown in the 1964 annual report of the Hertz Corporation.

At the office of Hertz Rent A Car in Nassau, "Hertz Rent A Car," signs were prominent in several places as were the same type signs in two rental station places in down town Nassau. This is the same type sign that appears on rental agreements issued by the Hertz Corporation and its licensees in the United States.

Murphy obtained at the Hertz Rent A Car office in Nassau a Hertz circular advertising Hertz Rent A Car and Hertz Service in Nassau — "We'd like to show you Nassau. Let Hertz put you in the driver's seat," etc. "Just give us a call at 77366 or 23496 and watch Hertz in action."

Van G. Hunt, an expert on American automobile liability insurance, has read advertisements displaying the Hertz Rent A Car in a parallelogram familiar to him as the Hertz trademark, which advertisements contain the language, "Rental fees include — all gasoline, oil * * * public liability, property damage, fire and theft insurance, and $100 deductible collision protection", and which state Hertz low rates cover everything including $100 collision protection. Hunt also read in the 1964 Annual Report of the Hertz Corporation:

"`Certified Service\' was vigorously merchandised during the year to emphasize the quality of Hertz Rent A Car. This program — an industry exclusive, backed up a pledge of $50 in car rental credits — sets the highest standards for equipment used, maintenance, appearance, cleanliness, insurance coverage and reservation reliability. It is Hertz\'s assurance to each customer that he will be satisfied with all phases of his car rental anywhere in the world."

It is Mr. Hunt's opinion that "proper insurance" includes adequate public liability insurance to cover personal injury caused by the negligence of an insured driver to protect him from claims of persons who might be struck by the automobile or injured while riding therein as a passenger.

"According to custom, practice and usage in the insurance industry, bodily injury liability insurance is considered the most important coverage in the field of automobile insurance and would certainly be included in `proper insurance\'.

"According to common usage and custom in the insurance industry, bodily injury liability insurance covering passengers of an automobile would certainly be included in `insurance coverage\' of `the highest standard\' as referred to as a part of `certified service\' in the Hertz Corporation 1964 annual report."

On August 15, 1965, Mr. James I. Parker went to Nassau, Bahamas, to investigate the automobile collision of June 8, 1965, and the claim of Sara C. Crowe and while there Mr. Terry Morrissey furnished to him a carbon copy of a rental agreement which is attached to the complaint, stating to Mr. Parker that this was the office copy of the rental agreement on the automobile in which plaintiff was injured.

At Morrissey's direction Mr. Parker went to the agency office of McCarthy Miller, Ltd., and was there told by the adjuster in charge that the automobile in which plaintiff was riding at the time of the collision was covered by a policy of insurance issued by Fireman's Insurance Company of Newark, New Jersey, but that there was no coverage afforded plaintiff because she was a passenger. Passengers, he stated, were excluded. The adjuster furnished to Mr. Parker a copy of the policy provisions which were made...