Wood v. Holiday Inns, Inc.

• Decision Date: 17 February 1975
• Docket Number: No. 74-1753,74-1753
• Citation: 508 F.2d 167
• Parties: Glen L. WOOD, Plaintiff-Appellant, v. HOLIDAY INNS, INC., et al., Defendants-Appellees. INTERSTATE INNS, INC., and Jessie Goynes, Defendants-Appellants, v. GULF OIL CORPORATION, Defendant-Appellee
• Court: U.S. Court of Appeals — Fifth Circuit

Page 167

508 F.2d 167

Glen L. WOOD, Plaintiff-Appellant, v. HOLIDAY INNS, INC., et al., Defendants-Appellees.

INTERSTATE INNS, INC., and Jessie Goynes, Defendants-Appellants, v. GULF OIL CORPORATION, Defendant-Appellee.

No. 74-1753.

United States Court of Appeals, Fifth Circuit

Feb. 17, 1975.

Joseph D. Phelps, Albert P. Brewer, Montgomery, Ala., Thomas J. Gardner, III, Tupelo, Miss., for Wood.

Charles A. Tarter, Birmingham, Ala., Robert A. Huffaker, Montgomery, Ala., for Interstate Inns & Jessie Goynes.

William C. Woods, Jr., Robert D. Norman, Birmingham, Ala., for Holiday Inns.

W. F. Horsley, Opelika, Ala., for Gulf oil Corp.

Appeals from the United States District Court for the Middle District of Alabama.

Before GODBOLD, MORGAN and CLARK, Circuit Judges.

LEWIS R. MORGAN, Circuit Judge:

After a jury verdict, the district court ordered, inter alia, a new trial for one of the several defendants below. At oral argument on this appeal we raised, sua sponte, the question of whether this court had jurisdiction to consider a decision which was not a final judgment as to all of the parties. See Wagner v. Burlington Industries, Inc., 423 F.2d 1319 (6th Cir. 1970).

Briefs were then submitted on the question of jurisdiction and the case was subsequently remanded for certification by the district court, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure. See Turtle v. Institute for Resource Management, Inc., 154 U.S.App.D.C. 341, 475 F.2d 925 (1973); United States v. Crow, Pope and Land Enterprises, Inc., 474 F.2d 200 (5th Cir. 1973); Aetna Insurance Co. v. Newton, 398 F.2d 729 (3rd Cir. 1968). The district court having certified that 'there is no just reason for delay,' we proceed to the merits. See Kull v. Mid-America Pipeline Co., 476 F.2d 271 (5th Cir. 1973).

I.

Glen Wood, an executive vice president of SAR Manufacturing Company, checked into the Holiday Inn facility at Phenix City, Alabama, during the late afternoon of February 1, 1972. When Wood checked in, he tendered payment for his room by using his Gulf Oil Company credit card. An imprint was made of his card and it was returned to him as was the normal practice.

After Gulf issues a card it continues to evaluate a customer account and, if it concludes from available information that a customer cannot afford to pay, it cancels credit to that customer. In order to facilitate this process, Gulf furnishes to National Data Corporation a list of all credit cancellations. Under the system established by Gulf, Holiday Inns are authorized to contact National Data, which disperses undetailed credit information concerning Gulf credit cards upon inquiry by telephone from properly identified parties authorized to extend credit to Gulf card holders. The information is generally brief and consists of either an authorization or denial of credit.

Gulf maintained a file on Wood. In compiling its information Gulf had received a credit report on the plaintiff from a credit bureau in Tupelo, Mississippi. The report was incomplete in that it did not contain the plaintiff's annual income; in all other respects the credit report was favorable to the plaintiff.

The credit manager of Gulf testified that on January 17, 1972, sixteen days preceding the incident in question, he reviewed the credit file of Wood. Although the file was current at the time he reviewed it, he expressed concern about the increasing amounts which were being charged on the card in relation to Wood's monthly income and made the determination that Wood's card should be placed in the 'derog' file. Apparently Wood had not informed Gulf that the credit card was used for business as well as personal expenses. Wood was not notified, but Gulf directed National Data to give the following reply to anyone seeking credit approval on Wood:

Pick up travel card. Do not extend further credit. Send card to billing office for reward.

Sometime during the early morning of February 2, 1972, Jessie Goynes, the 'night auditor' of the Phenix City Holiday Inn, called National Data in Atlanta on a toll-free number provided by Gulf in order to confirm the plaintiff's credit card number and receive an authorization to extend credit on the basis of the card. He received a communication from National Data advising him: 'Do not honor this sale. Pick up the credit card and send it in for reward.'

Wood testified that he was awakened about 5:00 a.m. by Goynes who told Wood that he, Goynes, needed the credit card for the purpose of making another imprint, since the imprint at the time of the registration was indistinct. Goynes came to appellant's room and took his card for the avowed purpose of securing the imprint and with the promise to return it in a few minutes. After 30 minutes Wood became concerned because his card had not been returned and was fearful that someone had taken it under a scheme to fraudulently secure it. Wood then dressed and went to the front desk of the motel where he was told by Goynes that the card was 'seized upon the authority of National Data' and that cash payment was required. Goynes refused to call Gulf Oil at appellant's request. Wood then paid in cash and left the motel. Upon returning home Wood called Gulf and explained that he used the card for business purposes. He complained that his account was current and his credit was immediately reinstated.

Goynes, however, stated that after getting the directive from National Data, he telephoned the plaintiff's room at 7:00 a.m., and advised him that he was unable to obtain credit authorization and requested plaintiff to surrender the card. Goynes said that Wood voluntarily complied.

At any rate, Wood's anger and frustration continued to build. Three days later, while he was relating the incident to a friend, he had a heart attack, precipitated apparently by the stress of the incidents surrounding the revocation of credit.

Wood sued the Gulf Oil Corporation, Holiday Inns, Inc., Interstate Inns, Inc. (the owner of the Phenix City Holiday Inn) and Jessie Goynes. Interstate and Goynes denied any negligence or wrongful conduct and asserted by way of cross-claim that they were acting under the direction of Gulf and were therefore entitled to indemnification by Gulf.

After trial, the jury returned a verdict in favor of Wood but apportioned damages in the amounts of $25,000 compensatory damages against Gulf, $25,000 punitive damages against Interstate and Goynes, and $10,000 punitive damages against Holiday Inns. The court then granted the motions of Gulf and Holiday Inns, Inc., for judgments notwithstanding the verdict and granted the motion of Interstate and Goynes for a new trial.

Wood appeals. Interstate and Goynes also appeal the district court's action in overturning the jury's verdict on the cross-claim in their favor through the granting of Gulf's motion for judgment notwithstanding the verdict. In evaluating the propriety of the trial court's entry of judgment notwithstanding the verdict, we consider all the evidence, but do so in a light most favorable to the party opposing the motion. Boeing Co. v. Shipman, 411 F.2d 365, 374 (5th Cir. 1969) (en banc). 'If the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict,' granting a motion for judgment notwithstanding the verdict is proper. Id. But, 'if there is substantial evidence opposed to the motions, that is, evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions,' the motion should be denied. Id.

II.

Wood's primary claim against Gulf is based upon the Fair Credit Reporting Act, 15 U.S.C. 1681-1681t (1974). The Act charges 'consumer reporting agencies' and users of 'consumer credit reports' with various responsibilities. Failure to discharge these duties appropriately may give rise to civil liability. See 15 U.S.C. 1681n, 1681o.

Wood alleged that Gulf negligently failed to comply with the provisions of the Fair Credit Reporting Act as both a consumer reporting agency and a user of a consumer report. Gulf argues that it was not a consumer reporting agency as defined in 15 U.S.C. 1681a(f), and the district court so held, apparently as a matter of law.

The Act defines a consumer reporting agency as:

Any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties . . . 15 U.S.C. 1681a(f).

Gulf vigorously asserts that it falls outside the purview of this statute because no third party was furnished a report. In essence, Gulf contends, and the district court held, that the credit in this case was to be extended only by Gulf, not by Interstate. Hence, while Gulf did terminate Wood's credit vis-a-vis Gulf, it did not make a report advising Interstate as to whether to extend its own credit.

Much of the confusion in this case stems from the multifaceted position of the Phenix City facility, the recipient of Gulf's communication. The Phenix City Holiday Inn accepted the Gulf credit card and was therefore Gulf's representative in facilitating the extension of Gulf's credit. But the Phenix City facility also honored a number of major credit cards, and, in fact, nothing prevented the Phenix City Inn from extending credit on its own account.

The communication by Gulf to the Phenix City Inn was made to a separate business entity. However, the credit to be extended was Gulf's and the Phenix City facility was merely acting as Gulf's representative in extending the credit. Hence, the communication was not 'for the purpose of furnishing consumer reports to third parties.' It was merely directed from Gulf to its local representative, made for the purpose of protecting Gulf...