NATIONAL CAR RENT. SYS., INC. v. COUNCIL WH. DISTRS., INC., Civ. A. No. 74-3-Alb.

• Decision Date: 18 December 1974
• Docket Number: Civ. A. No. 74-3-Alb.
• Parties: NATIONAL CAR RENTAL SYSTEM, INC., Plaintiff, v. COUNCIL WHOLESALE DISTRIBUTORS, INC., Defendant.
• Court: U.S. District Court — Middle District of Georgia

393 F. Supp. 1128

NATIONAL CAR RENTAL SYSTEM, INC., Plaintiff, v. COUNCIL WHOLESALE DISTRIBUTORS, INC., Defendant.

Civ. A. No. 74-3-Alb.

United States District Court, M. D. Georgia, Albany Division.

December 18, 1974.

COPYRIGHT MATERIAL OMITTED

Albert H. Parnell, Atlanta, Ga., for plaintiff.

Hilliard P. Burt, Albany, Ga., for defendant.

OWENS, District Judge:

National Car Rental System, Inc.¹ (National), filed its diversity jurisdiction complaint against Council Wholesale Distributors, Inc.² (Council) seeking to recover the $14,923.35 fair market value of a semi-tractor and trailer rig leased³ from National by Council and wrecked by Council's driver, Bobby Sherman.

The pleadings, depositions and answers to interrogatories together with the affidavits show that the defendant's driver, Bobby Sherman, departed driving the leased rig from somewhere near Akron, Ohio, and around ten o'clock at night stopped at a Lexington, Kentucky, interstate highway ramp to pick up two teen-age boys who were hitchhiking south. He told the boys "he was pretty tired and he needed somebody to talk to to keep him awake." (Deposition of Steve Lawson at 11). About an hour later the driver stopped at a truck stop and got something to eat. They continued south and after crossing into Tennessee pulled off and into a roadside fireworks place remaining there about an hour while the driver slept. The boys at the direction of the driver woke him up, and they continued south. Sometime later—"maybe half an hour or something"—(Deposition of Ray Peters at 13), the driver stopped at a restaurant, Ray Peters went in and got french fries and coffee for him and he slept about twenty minutes. Then the driver started again.

Around eight o'clock in the morning defendant's driver with his hitchhikers still aboard was proceeding south on I-75 in the vicinity of Calhoun, Georgia. Defendant's driver was in the righthand lane and ahead of him was another semi-tractor and trailer rig. Seated to the right of defendant's driver was hitchhiker Ray Peters; hitchhiker Steve Lawson was sleeping in the sleeper berth. As Ray Peters testified: "I was laying with my head over the window and I looked up and I seen this green truck about a hundred yards or something like that . . ." travelling the same direction that we were on the interstate highway. "I kept staring at that truck and we got close to it. I looked over at the driver and looked at the truck." I didn't think the driver gave any acknowledgment that he had seen the truck. He "was a little slumped but it didn't really look like he was asleep too much to me. So then I yelled, watch out, and, you know, he straightened his head up and started to turn the wheel to the left . . . then he clipped the back corner of that truck in front of us. . . ." (Deposition of Ray Peters at 15, 16). The leased rig went to the driver's left into and across the median, into and across the northbound lane and off the side of the highway into two trees. The tractor and trailer were damaged beyond repair, and the driver was killed. Both hitchhikers received only minor injuries.

National contends that Council's employee by (a) driving more than 10 hours without resting for eight hours before continuing again; (b) driving in a fatigued condition, and (c) giving a ride to two hitchhikers violated Department of Transportation Regulations §§ 392.3,⁴ 392.60⁵ and 395.3.⁶ National further contends that Council's driver violated certain motor vehicle laws of the State of Georgia. These actions National states violated Council's agreement in paragraph "(3) that he will not cause or permit the vehicle to be used in violation of any local, county, state or federal law, ordinance or regulation. . . .", and thus makes Council responsible for the loss in question because of Council's agreement "(12) to release, indemnity and hold Lessor harmless from and against: . . . (c) all loss, damage, cost and expense resulting from customer's violation of any terms of this agreement or breach of customer's convenants as expressed herein."

Defendant responds by contending that National charged and defendant paid for collision and comprehensive coverage without any deductible as shown by the collision damage waiver which Council accepted, to wit:

"In consideration of the C.D.W. rate agreed upon herein, lessor agrees to relieve customer of liability for damages caused by collision as provided in paragraph 11 on page 1 hereof, but customer shall be fully liable for all damages of any nature if the vehicle described herein shall be operated in violation of any of the provisions of this rental agreement and for all overhead damages. CUSTOMER ACCEPTS OR DECLINES PURCHASE OF C.D.W. AT RATE SPECIFIED. C.D.W. IS APPLICABLE ONLY IF ACCEPTED. IF DECLINED—DEDUCTIBLE IS $500 FOR VAN TRUCKS—$1,000 FOR TRACTOR, TRAILER OR REFRIGERATED VAN."

that National indicated on the front of the agreement "G NATL. SUPPLIES INSURANCE" and that the term "operated" in the Collision Damage Waiver is plainly not intended to encompass the previously quoted portion of paragraph 3 which according to Council, restricts the "use" but not the "operation" of the vehicle. Council further contends that whatever its driver did or failed to do was done in the operation of National's vehicle and was not done in using National's vehicle. Therefore Council says National's contentions are without merit.

"The construction of a contract is a question of law for the court. Where any matter of fact is involved (as the proper reading of an obscurely written word), the jury should find the fact." 1933 Georgia Code Annotated § 20-701. When there is an ambiguity in a written contract, its construction using rules of construction laid down by the Supreme Court of Georgia, is still a matter for the court. Only if an ambiguity remains after application of the applicable rules of construction, is there a question to be decided by a jury. Chalkley v. Ward, 119 Ga.App. 227, 235, 166 S.E.2d 748 (1969).

The defendant Council has moved for summary judgment pursuant to Rule 56, Federal Rules of Civil Procedure. That rule provides that "the judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c). For reasons hereinafter stated the court, after considering the entire case, is of the opinion that there is no genuine issue as to any material fact⁷ and that the defendant is entitled to a judgment as a matter of law.

The contracts in question are identical printed forms authored and prepared by plaintiff National. As printed by National, Exhibit "A" is a seven-copy carbonized snap-out form. The front page denominated "ORIGINAL" but not otherwise numbered, has many blank spaces to be completed, a signature line for the customer and above that signature line the following:

"THIS CERTIFIES THAT I HAVE READ, UNDERSTOOD AND AGREE TO THE TERMS AND CONDITIONS ON PAGE ONE OF THIS AGREEMENT AND ON THIS PAGE AND ACCEPT VEHICLE IN THE CONDITION INDICATED ABOVE:

______________ CUSTOMER"

Nothing on the front page indicates that on the reverse side in print generally smaller than that used on the front, is an entire page of terms and conditions. The reference to "THE TERMS AND CONDITIONS ON PAGE ONE OF THIS AGREEMENT . . ." in the absence of an indication that the front of the form is PAGE TWO, means clearly that the terms and conditions are on page one, the first page.⁸ While this could be fatal to National's contentions that provisions on the reverse thereof were violated, the court is not granting summary judgment on this basis. Instead the merits of National's claims are considered as if there were a reference to them on the front page.

Defendant Council's employee executed each of them for Council. In executing them Council's employee initialed under the word "ACCEPTS" in the box on the front underneath which appear the aforesaid Collision Damage Waiver provisions. Council was charged and National was paid an additional amount of money for the Collision Damage Waiver (C.D.W.). National did not use Council's "C.D.W." money to purchase or pay for collision insurance; National did not carry or procure such insurance for itself or Council. Instead National deposited Council's "C.D.W." money into a special account which contains all "C. D.W." money collected from all of National's customers and which is used by National to pay for collision damage to its vehicles.

Council's employee did not initial the red X in the box entitled "CUSTOMER TO PROVIDE COLLISION INSURANCE" or the red X in the box entitled "CUSTOMER TO PROVIDE LIABILITY INSURANCE". Under rental conditions there are various blocks designed to be marked if applicable to the transaction. Four of those blocks are marked on Exhibit "B", and three are marked on Exhibit "C". Of those, block "G NATL. SUPPLIES INSURANCE" is marked on both Exhibit "B" and Exhibit "C" with an X.

The Court of Appeals of Georgia in Howkins v. Atlanta Baggage & Cab Co., 107 Ga.App. 38, 42, 129 S.E.2d 158 (1962), in a case where the court was called upon to construe an Avis motor vehicle rental agreement, set forth the basis for construction of such agreements:

"The record shows that this `Standard Rental Agreement' of Avis Rent-A-Car System was executed on a form 3 5/8 ? × 8 7/8 ? having on one side 12 paragraphs in fine print (paragraphs 10, 11, and 12 having a heading in larger print), and on the other side a form with spaces for certain information to be filled in, including the name, home address, firm name, firm address, and driver's license number of the renter, and lines for `Signature of Renter' and `Additional Renter.' Under these lines for signatures is the following: `(subject to terms and conditions on page 1, also printed on

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