Lazar v. Hertz Corp.

• Decision Date: 19 May 1983
• Citation: 143 Cal.App.3d 128,191 Cal.Rptr. 849
• Court: California Court of Appeals Court of Appeals
• Parties: Seymour LAZAR, Plaintiff and Appellant, v. The HERTZ CORPORATION, Defendant and Respondent. Civ. 26596.

Page 849

191 Cal.Rptr. 849

143 Cal.App.3d 128

Seymour LAZAR, Plaintiff and Appellant, v. The HERTZ CORPORATION, Defendant and Respondent.

Civ. 26596.

Court of Appeal, Fourth District, Division 1, California.

May 19, 1983.

As Modified May 26, 1983.

David J. Yardley, William S. Lerach, William S. Dato, Godfrey L. Duke, Jr., Milberg, Weiss, Bershad & Specthrie and Milberg, Weiss, Bershad, Specthrie & Lerach, San Diego, for plainiff and appellant.

Jack W. Crumley, Lee R. Rydalch, Peter R. Thompson, Luce, Forward, Hamilton & Scripps, San Diego, Arthur H. Kahn, Deena Jo Schneider and Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., for defendant and respondent.

BUTLER, Associate Justice.

Seymour Lazar rented a 1980 Pontiac from The Hertz Corporation in California at Ontario International Airport on March 21, 1980. He drove the car 78 miles to Palm Springs returning the car there to a Hertz facility the following day without filling up the gas tank. Hertz charged him $11.15 for gasoline. Based on EPA estimates, Lazar concluded he was charged at least $1.97 and as much as $2.95 per gallon which was at least 57% and perhaps 136% higher than the maximum price permitted under federal regulations. Lazar filed this class action against Hertz on behalf of himself and all persons in California who rented cars from Hertz during the four-year period ending November 1, 1980, and were charged by Hertz for gasoline upon return of rented automobiles with less than a full tank. The court declined to certify the lawsuit as a class action. Lazar appeals.

THE STANDARD OF REVIEW

We now determine the scope and the standard of our review of the court's order refusing to certify the class.

"A decision by a trial court denying certification to an entire class is an appealable order. (Daar v. Yellow Cab Co., supra, 67 Cal.2d at pp. 698-699 [63 Cal.Rptr. 724, 433 P.2d 732]; see also Morrissey v. City and County of San Francisco (1977) 75 Cal.App.3d 903, 907 .) However, trial courts have been given great discretion with regard to class certification. (Petherbridge v. Altadena Fed. Sav. & Loan Assn. (1974) 37 Cal.App.3d 193, 199-200 .) (3) For example, in the absence of other error, this court will not disturb a trial court ruling on class certification which is supported by substantial evidence unless (1) improper criteria were used (see Occidental Land, Inc. v. Superior Court (1976) 18 Cal.3d 355, 361 [134 Cal.Rptr. 388, 556 P.2d 750].); or (2) erroneous legal assumptions were made (Fletcher v. Security Pacific National Bank (1979) 23 Cal.3d 442, 446 [153 Cal.Rptr. 28, 591 P.2d 51] )." (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470, 174 Cal.Rptr. 515, 629 P.2d 23.)

In Occidental Land, Inc. v. Superior Court, supra, 18 Cal.3d 355, 134 Cal.Rptr. 388, 556 P.2d 750, the court considered whether the trial court abused its discretion in ruling that a group of homeowners in a planned development subdivision could maintain a class action against the developer for fraudulent misrepresentation.

"In reviewing the ruling of the trial court, we are guided by the principle that The court noted if the complaint had relied exclusively on alleged oral misrepresentations to each homeowner, the challenge to certification would be arguably meritorious. However, the court also considered written representations in identical final subdivision public reports provided each purchaser. The court did not limit itself to the allegation of the complaint. Other evidence was considered.

the showing required for certification of a class is within the trial court's discretion provided that correct criteria are employed. (Petherbridge v. Altadena Fed. Sav. & Loan Assn. (1974) 37 Cal.App.3d 193, 199 [112 Cal.Rptr. 144].) (4b) Because defendant does not claim that the trial judge used improper criteria in denying its motion, the sole question is whether the trial court abused its discretion. We find no such abuse." (Id., at p. 361, 134 Cal.Rptr. 388, 556 P.2d 750.)

Reviewing courts consistently look to the allegations of the complaint and the declarations of attorneys representing the plaintiff class to determine if the class is ascertainable and has a well-defined community of interest. (La Sala v. American Sav. & Loan Assn. (1971) 5 Cal.3d 864, 97 Cal.Rptr. 849, 489 P.2d 1113; Richmond v. Dart Industries, Inc., supra, 29 Cal.3d at p. 478, 174 Cal.Rptr. 515, 629 P.2d 23.)

Without objection, the trial court received and considered declarations of Lazar's counsel and of Hertz employees and a deposition of Lazar and a Hertz employee. The record on appeal includes transcripts of hearings before the trial court. With those materials before us, we review the evidence and inquire whether the trial court applied the correct criteria or made erroneous legal assumptions in refusing to certify the class.

Code of Civil Procedure section 382 authorizes class action suits when the question is one of common or general interest, of many persons and it is impracticable to bring them all before the court.

"The party seeking certification as a class representative must establish the existence of an ascertainable class and a well-defined community of interest among the class members. (Daar v. Yellow Cab Co., supra, 67 Cal.2d at p. 704 [63 Cal.Rptr. 724, 433 P.2d 732].) The community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class. (See Civ.Code, § 1781, subds. (b)(2)-(4).)" (Richmond v. Dart Industries, Inc., supra, 29 Cal.3d at p. 470, 174 Cal.Rptr. 515, 629 P.2d 23.)

FACTUAL BACKGROUND

Hertz is in the business of renting automobiles through corporate facilities and licensed franchisees in California and elsewhere in the United States and abroad. Customers are required to sign a standard, preprinted form of rental agreement. During the class period (November 1, 1976, through November 1, 1980), the rental agreement forms included the following paragraph 6(b) on the reverse side:

"REFUELING SERVICE CHARGES: if the rate does not include gasoline and Vehicle is returned with less gasoline than when rented, Customer shall pay an additional charge determined by Lessor for refueling service measured by: such difference if Customer has purchased gasoline during rental; or the number of miles traveled; or as otherwise determined by Lessor at its option."

Using a bank credit card on March 21, 1980, Lazar rented a 1980 Pontiac at the Hertz facility at Ontario International Airport. He signed the rental agreement which included applicable daily and mileage rates but did not include for gasoline as noted on the face of the rental agreement.

                ------------------------------------------------
                RATES DO NOT INCLUDE GASOLINE
                [ ]   BY MILES       [ ]  BY TANK
                      ------------------------------------------------------------
                IN    E    1/8  1/4  3/8  1/2   5/8  3/4  7/8  F  REFUELING
                      ------------------------------------------  SERVICE
                      ------------------------------------------             11.15
                OUT   E    1/8  1/4  3/8  1/2   5/8  3/4  7/8  F
                      ------------------------------------------------------------
                

Neither Hertz nor Lazar at any time marked either the boxes or the "in" or "out" bar graphs. Lazar drove to Palm Springs and returned the car the next day to the Hertz facility in Palm Springs having driven 78 miles. He did not put any gasoline into the tank. Hertz inserted $11.15 for refueling service in the appropriate box above. The record on appeal does not tell us when Lazar discovered the charge and what redress he sought other than filing this lawsuit eight months later.

The complaint alleges Hertz overcharged for gasoline and refueling services California customers who return cars to Hertz without refilling the gas tank. These charges are said to be set without regard to the amount of gasoline actually used, the cost of labor involved in refueling, cost to Hertz of the gasoline used or the cost to Hertz of the refueling services.

The first cause of action alleges violation of federal regulations which fix the resale price of gasoline in that Hertz charged prices in excess of those fixed and seeks imposition of an involuntary trust on the profits so realized by Hertz for the benefit of the class. An injunction is sought to restrain Hertz and punitive damages are also claimed.

The second cause of action charges a breach of the duty of good faith and fair dealing in that Hertz' refueling charges are arbitrary, capricious and are established to increase Hertz' income at the expense of the class.

The third cause of action in fraud and deceit claims Hertz did not advise the class a substantial premium over the legal price would be charged for failing to refill the gas tank and did not inform customers the refueling charge bore no relation to the amount of the refill, labor involved, cost to Hertz of the fuel or cost of the refueling service. Further, Hertz falsely implies to its customers they will pay no more than the federal maximum for gasoline if they elect to have Hertz refill the tank.

The fourth cause of action charges violation of the Consumers Legal Remedies Act, Civil Code section 1750, et seq. Lazar concedes he is not a consumer. We later discuss his proposal to add a plaintiff-consumer.

During the class period, Hertz used two different methods of calculating refueling service charges at its corporate locations depending on whether the customer purchased gasoline during the rental.

When a customer returned the rented car without having put in any gasoline, the refueling service charge was determined by reference to a chart that took into account the prevailing retail price of gasoline in the area, the estimated miles per gallon of gasoline for the car based on average EPA estimated miles per gallon for a group of similar car models, and the number...