Hershenow v. Enterprise Rent-a-Car Company

• Decision Date: 17 January 2006
• Parties: Barry HERSHENOW & another<SMALL><SUP>1</SUP></SMALL> v. ENTERPRISE RENT-A-CAR COMPANY OF BOSTON, INC., & another.<SMALL><SUP>2</SUP></SMALL>
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 526

840 N.E.2d 526

445 Mass. 790

Barry HERSHENOW & another¹ v. ENTERPRISE RENT-A-CAR COMPANY OF BOSTON, INC., & another.²

Supreme Judicial Court of Massachusetts, Suffolk.

Argued September 7, 2005.

Decided January 17, 2006.

John Roddy (Elizabeth A. Ryan with him) for the plaintiffs.

Michael A. Kahn, San Francisco, CA (M. Kay Martin, San Francisco, CA, & John H. Henn, Boston with him) for the defendants.

The following submitted briefs for amici curiae:

Ben Robbins & Andrew Grainger for New England Legal Foundation.

Stephen D. Poss & S. Jason P. Baletsa, Boston, for The Hertz Corporation & another.

Present: MARSHALL, C.J., GREANEY, IRELAND, SPINA, COWIN, SOSMAN, & CORDY, JJ.

MARSHALL, C.J.

We consider in this case whether two consumers who rented motor vehicles from the defendants, Enterprise Rent-A-Car Company of Boston, Inc., and Enterprise Rent-A-Car Company (collectively Enterprise), have stated a claim under G.L. c. 93A, § 9(1), which permits an action by any person who has been "injured" by another's unfair or deceptive act or practice. The rental customers contend that the collision damage waiver provision (CDW) in Enterprise's form rental contract violated G.L. c. 93A, because its terms failed to comply with the requirements of G.L. c. 90, § 32E ½, which regulates collision damage waivers in private passenger automobile rental agreements.³ In the alternative, the plaintiffs argue that the CDW was sufficiently unfair or deceptive as to violate Chapter 93A, irrespective of § 32E ½.

We conclude that, because the CDW did not cause the plaintiffs to suffer any loss, they have failed to satisfy the causation requirement of the "injury" provision of G.L. c. 93A, § 9(1); proving a causal connection between a deceptive act and a loss to the consumer is an essential predicate for recovery under our consumer protection statute. We affirm the order of a judge in the Superior Court granting summary judgment for the defendants, albeit for different reasons.⁴

1. Facts. The essential facts are not disputed. Enterprise is a national consumer automobile rental company. On February 3, 2001, Barry Hershenow entered into a contract for a one-day rental of a motor vehicle at Enterprise's West Newton branch. The rental charge was $14.99.⁵ Hershenow purchased optional collision damage waiver protection for an additional $14.99. In general terms, when a customer purchases CDW, the rental company agrees to waive claims against the customer for any damage to the car during the rental period. Hershenow admits that his rental automobile was not involved in a collision nor otherwise damaged during the rental period.

On July 13, 2001, Dana Beaumier rented an automobile for three days at Enterprise's Somerville branch. The rental charge was $80. Beaumier too opted for CDW protection, at an additional cost to her of $47.97. Beaumier also admits that the automobile she rented was not damaged during the rental period.

Enterprise's preprinted form contracts contained numerous specific restrictions on the use of the vehicles.⁶ The collision damage waiver provision provided in pertinent part:

"If Owner offers and Renter agrees to pay an additional fee for DAMAGE WAIVER, renter is relieved of any deductible on renter's policy, and an additional amount, the total of renter's deductible and the additional amount will not exceed $1,000.00.... Damage Waiver does not apply if the car is stolen, or if renter or driver fails to or refuses to make a report of damages to police or other lawful authorities, or to cover tire chain damages. A violation of any provision of this agreement invalidates Damage Waiver" (emphasis added).

Pursuant to this last sentence, a violation of any provision of the Enterprise rental contract would purportedly cancel the CDW. This provision is contrary to the requirements of G.L. c. 90, § 32E ½, which permits rental companies to cancel CDW only as specifically listed in the statute. See § 32E ½ (C)(5).⁷ Additionally, as applied to the CDW, many restrictions that Enterprise imposed on the use of its vehicles were inconsistent with other provisions of § 32E ½. For example, § 32E ½ (C)(5) (e), permits CDW exclusion for damage incurred while an authorized driver "is driving outside the United States or Canada, unless expressly authorized in the rental agreement," but Enterprise's form contract provided for exclusion if the vehicle was driven outside Massachusetts without Enterprise's written consent. See note 6, supra, (subsection [f]).⁸ Enterprise characterizes its contract provisions that are contrary to the Massachusetts statute as a "mistake."

On November 21, 2001, the plaintiffs wrote to Enterprise pursuant to G.L. c. 93A, § 9, on their own behalf and on behalf of a class of other Massachusetts renters whom they sought to represent.⁹ The letter demanded that Enterprise cease including the "illegal" CDW exclusions in future rental contracts, cease relying on those exclusions to deny CDW protection, and refund all CDW payments to each purported class member, with interest. Enterprise responded that the contracts complied with G.L. c. 90, § 32E ½. It nonetheless agreed to modify its rental agreements and remove the challenged language that a "violation of any provision of this agreement invalidates Damage Waiver." They noted that the automobiles at issue had sustained no damage. Thus, asserted Enterprise, even if its CDW provision contained impermissible exclusions, "the only customers who could have been injured would have been those who damaged the rented cars and against whom Enterprise refused to waive its claims based on a reason not allowed [under Massachusetts law]."

On November 21, 2001, the plaintiffs also filed this action in the Superior Court. Before the issue of class certification was addressed, Enterprise moved for judgment on the pleadings and for summary judgment. Mass. R. Civ. P. 12(c), 365 Mass. 754 (1974). Mass. R. Civ. P. 56, 365 Mass. 824 (1974). The plaintiffs also moved for summary judgment. A judge in the Superior Court ruled in favor of Enterprise on both motions, and judgment entered on August 6, 2003.¹⁰ The judge concluded that no private right of action exists under G.L. c. 90, § 32E ½, and that there is no right to bring a separate action for any violation of that statute under G.L. c. 93A. He entered judgment on the pleadings for the defendants. The judge also entered summary judgment for the defendants "because there is no claim for private right of action under [G.L. c. 90, § 32E ½] or under [G.L. c. 93A]," noting that he was not ruling "on the merits of the motion." The plaintiffs appealed. We transferred the case here on our own motion.

2. Discussion. As noted, the Superior Court judge did not rule "on the merits" of Enterprise's motion for summary judgment. The judge did not, however, exclude any of the evidence submitted by Enterprise in support of the motion that was beyond the pleadings, and the amended judgment states that the judge considered the pleadings, depositions, answers to interrogatories, admissions, and affidavits. We therefore consider the entire record on appeal. Mass. R. Civ. P. 12(c). We will sustain the judge's ruling entering judgment for Enterprise if it is sound on any ground established in the record. Aetna Cas. & Sur. Co. v. Continental Cas. Co., 413 Mass. 730, 734-735, 604 N.E.2d 30 (1992).

The plaintiffs here advance two theories for recovery under G.L. c. 93A, § 9. First, they argue that Enterprise's violation of G.L. c. 90, § 32E ½, constituted a "per se" violation of G.L. c. 93A, § 9. In support of this argument, they point to 940 Code Mass. Regs. § 3.16(3) (1993), which provides that an act or practice is a violation of § 2 of G.L. c. 93A, if it fails to comply with consumer protection statutes, rules, regulations, or laws.¹¹ Second, they contend that Enterprise's CDW was "unfair and deceptive" within the meaning of G.L. c. 93A, independent of any noncompliance with G.L. c. 90, § 32E ½.¹²

Before we turn to the plaintiffs' arguments, we address the defendants' predicate argument that a violation of G.L. c. 90, § 32E ½, may not be enforced in a private action under G.L. c. 93A.¹³ The defendants maintain that, because G.L. c. 90, § 32E ½ (E), provides for civil fines and a public enforcement action brought by the Commonwealth, private relief for violations of that statute is not available. The plaintiffs counter that the absence of a private remedy in § 32E ½ does not demonstrate a legislative intent to preclude consumer claims under G.L. c. 93A, and that the two statutes form a "complementary," rather than an "irreconcilable," scheme.

We do not perceive a conflict between the two statutory schemes, nor do we perceive any clearly expressed legislative intent that G.L. c. 90, § 32E ½, displace entirely any existing private remedies for deceptive practices concerning collision damage waivers in private passenger automobile rental agreements. Section 32E ½ was enacted in 1990, one year after a report by the National Association of Attorneys General (NAAG) detailed nationwide "abuses" in the car rental industry, including the industry's use of "high pressure sales tactics" to persuade consumers to purchase collision damage waivers. See Final Report and Recommendations of the National Association of Attorneys General Task Force on the Car Rental Industry Advertising and Practices, 56 Antitrust & Trade Reg. Rep. S-1, S-3, S-5, S-15 (Special Supp. Mar. 16, 1989). NAAG reported that some rental companies had sold damage waivers that were "so unreasonably restricted as to be worthless," and that "[c]ar rental contracts [were] not a useful source of information on either the extent of the consumer's liability or CDW." Id. at S-14. NAAG recommended that State Legislatures enact statutes to address these abuses. The Massachusetts Legislature promptly did so.¹⁴ These events lead us to conclude that the Legislature's intent was to supplement,...