Jackson By and Through Whitaker v. Hertz Corp.

Decision Date04 December 1990
Docket NumberNo. 88-2261,88-2261
Parties15 Fla. L. Weekly D2927, 17 Fla. L. Weekly D70 Billy JACKSON, By and Through his mother and natural guardian Henrietta WHITAKER, and Henrietta Whitaker, individually, Appellants, v. The HERTZ CORPORATION, Appellee.
CourtFlorida District Court of Appeals

Horton, Perse & Ginsberg and Jay Rothlein and Arnold Ginsberg, Miami, for appellants.

Roland Gomez and Steven A. Edelstein, Miami Lakes, for appellee.

Before BARKDULL, FERGUSON and JORGENSON, JJ.

JORGENSON, Judge.

Billy Jackson and his mother, Henrietta Whitaker, appeal from a final judgment in favor of the Hertz Corporation in an action for negligence. We affirm.

On February 5, 1985, Hertz entered into a two-day rental agreement with a woman purporting to be Linda Major, and her companion, Lawrence King. The woman presented Hertz with a Visa credit card issued in Linda Major's name. Mr. King's driver's license number, the license expiration date, the issuing state, and King's age were entered on the additional authorized operator attachment of the rental agreement. Additionally, King's driver's license number and the license expiration date were entered on the front of the Hertz rental agreement. No separate driver's license information was written on the rental agreement for the woman identifying herself as Linda Major. Before relinquishing possession of the vehicle, Hertz ran a credit check on the Visa card presented. Upon receipt of a favorable credit check, Hertz released the vehicle to the above individuals.

Hertz was informed on February 17, 1985, by Metro-Dade Police that the Hertz-owned vehicle had been fraudulently leased with a stolen credit card and that the woman who gave her name as Linda Major was an imposter. Thereafter, on February 26, 1985, and March 1, 1985, respectively, Hertz sent certified letters 1 to both renters demanding the return of the automobile. On March 31, 1985, both letters were returned to Hertz as undeliverable. On April 5, 1985, Hertz reported the vehicle as stolen to the police. Eleven days after the Hertz vehicle was reported stolen, the vehicle, operated by Christopher Harris, an alleged participant in the fraud, was involved in an accident, injuring Billy Jackson.

Billy and his mother brought this action against Hertz as the owner of the vehicle involved in the accident, alleging that Hertz was liable for Billy's damages because its employees had negligently entrusted the car to a person who (1) did not present a valid driver's license; (2) obtained the vehicle by fraud, and (3) negligently operated the vehicle causing the accident. After the jury deadlocked on the issue of liability, the trial court directed a verdict for Hertz.

NEGLIGENT ENTRUSTMENT

Although the Hertz agent who handled the rental transaction failed to note on the rental agreement the relevant driver's license information, if such information existed, for the woman purporting to be Linda Major, Hertz's handling of the transaction as a matter of law did not constitute negligence. At trial, Hertz presented credible testimony establishing a common industry practice permitting rental to a person with a credit card but no driver's license when accompanied by someone with a valid driver's license. Hertz further established that its policy and procedure manuals do not prohibit this particular rental procedure. Based on the evidence presented, even if the woman posing as Linda Major did not possess a valid driver's license, Hertz's handling of the transaction was not negligent.

We likewise conclude that Hertz was not negligent under the terms of section 322.38(2), Florida Statutes (1985). 2 There is no evidence that a rental car company has ever been charged with a violation of section 322.38(2) in a case where, as here, rental was made to a person with a credit card but no driver's license who was accompanied by someone with a valid license. Moreover, based on the uncontroverted testimony regarding a common rental industry practice and because a valid driver's license was presented and inspected, we conclude that Hertz complied with section 322.38(2) and was not negligent. 3

NEGLIGENT DELAY IN REGAINING POSSESSION

Hertz also acted reasonably upon learning that its vehicle had been fraudulently obtained. Nine days after learning of the fraud, Hertz, in compliance with Metro Dade police procedures, sent two certified letters to "Linda Major" and Lawrence King demanding return of its vehicle. Five days after the last attempted delivery by the post office, Hertz reported the vehicle as stolen to the police.

Contrary to the dissent's opinion, there was no evidence that Hertz was guilty of inaction upon notification by Metro Dade Police that the Hertz vehicle had been fraudulently obtained. We cannot find Hertz negligent for delay in regaining possession when Hertz was merely following Metro Dade rules requiring rental companies to refrain from reporting vehicles as stolen until after certified letters are sent to the renters demanding return of the vehicle. On the contrary, we conclude that Hertz acted reasonably and with due diligence to regain possession of its vehicle.

DANGEROUS INSTRUMENTALITY DOCTRINE

Hertz was not liable under the dangerous instrumentality doctrine. There is no dispute that the owner of the vehicle must voluntarily relinquish possession of its vehicle in order to be held liable under the dangerous instrumentality doctrine. In Susco Car Rental Sys. of Fla. v. Leonard, 112 So.2d 832, 837 (Fla.1959), the Florida Supreme Court emphasized that "the rule governing liability of an owner of a dangerous agency who permits it to be used by another is based on consent ... [O]nly in a situation where the vehicle is not in operation pursuant to his authority, or where he has in fact been deprived of the incidents of ownership, can such an owner escape responsibility." In Susco, there was no doubt that the automobile was being used with the owner's consent. Here, however, it is undisputed that Hertz's consent to rent the vehicle was procured by fraud, through the use of a stolen credit card. This fraud vitiated Hertz's consent from the outset. See Padgett v. State, 82 So.2d 372 (Fla.1955) (where owner's consent procured by false pretense with intent to defraud, fraud vitiated owner's consent and taking amounted to larceny); State v. Oates, 330 So.2d 554 (Fla. 4th DCA 1976) (same). Because the plaintiff has the burden of proving that possession of the vehicle was relinquished with the owner's consent, Slitkin v. Avis Rent-a-Car Sys., 382 So.2d 883 (Fla. 3d DCA 1980), and because plaintiffs here have not met this burden, Hertz, as a matter of law, is relieved from liability for the negligent operation of its vehicle under the dangerous instrumentality doctrine.

Even if Hertz had voluntarily relinquished possession of its vehicle, Hertz is still relieved from liability under the dangerous instrumentality doctrine. The Florida Supreme Court in Susco held that "when control of such a vehicle is voluntarily relinquished to another, only a breach of custody amounting to a species of conversion or theft will relieve an owner of responsibility for its use or misuse." Susco, 112 So.2d at 835-836. The events that occurred here clearly constituted a "species of conversion or theft" within the meaning of Susco, both initially by the use of a stolen credit card to obtain possession 4 and, subsequently, when the vehicle was not returned to Hertz after demand for its return had been made. See Senfeld v. Bank of Nova Scotia Trust Co., 450 So.2d 1157 (Fla. 3d DCA 1984) (where person having right to possession of property makes demand for its return and property is not relinquished, conversion has occurred, and it is not necessary to prove demand and refusal where the act complained of amounts to conversion regardless of whether demand is made); United States v. Edwards, 576 F.2d 1152 (5th Cir.1978) (vehicle rented with stolen credit card and not returned to rental agency exceeded scope of rental agreement and constituted interstate transportation of stolen vehicle). Under these circumstances, Hertz cannot be liable.

Appellants' reliance on Tillman Chevrolet Co. v. Moore, 175 So.2d 794 (Fla. 1st DCA 1965), is misplaced. In Tillman, the court found that the owner of an automobile dealership was negligent in permitting a "prospective buyer" who developed to be a thief to take sole possession of a vehicle for sale to drive it a limited distance. Id. at 795. The salesman's negligence in Tillman was critical to the court's finding of liability. Second, in Tillman, the dealer was in the business of selling, rather than renting, automobiles. In contrast to a rental agreement in which there is a formerly executed contract supported by consideration and reliance by the rental company on the validity of the renter's credit, there is no such contractual relationship in the case of a "test drive" by a prospective customer. Lastly, Tillman omitted any reference to the Florida Supreme Court's decision in Susco which established the foundation for determining whether the owner of a vehicle can be held liable for its negligent use by a third party. Tillman, therefore, does not control this case.

Other jurisdictions have held that rental and leasing companies were not liable for injuries sustained by third persons from the negligent use of the renter/lessor's vehicle when the vehicle is obtained by fraud. In Zuppa v. Hertz Corp., 111 N.J.Super. 419, 421, 268 A.2d 364, 365 (1970), the court held that Hertz was not liable as the owner of a rental vehicle for damage caused in a collision involving a rented automobile because the driver came into possession wrongfully, through the use of another's credit card. Further, in Matter of Utica Mut. Ins. Co., 95 A.D.2d 150, 153-154, 465 N.Y.S.2d 553, 555 (1983), the court held that "where the lessee of a vehicle was guilty of...

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