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09/26/88 Purcell and Wardrope v. the Hertz Corporation

September 26, 1988





530 N.E.2d 994, 175 Ill. App. 3d 1069, 125 Ill. Dec. 585 1988.IL.1439

Appeal from the Circuit Court of Cook County; the Hon. Roger J. Kiley, Judge, presiding.


JUSTICE QUINLAN delivered the opinion of the court. CAMPBELL, P.J., and MANNING, J., concur.


Plaintiff Purcell and Wardrope Chartered brought a class action suit on behalf of a nationwide class *fn1 to recover security deposits and accrued interest on security deposits that the defendant, Hertz Corporation (Hertz), required pursuant to the terms of its automobile lease contracts. Hertz filed several affirmative defenses and a counterclaim for alleged damages specific to the automobile P&W had leased. The trial court denied class certification, finding that individual questions of fact and law predominated, and that since Hertz had raised several affirmative defenses and filed a counterclaim specific to P&W, P&W could not provide adequate representation for a class action. Accordingly, the case was tried as an individual action under Illinois law. Following a bench trial, judgment was entered in favor of Hertz on counts I and II of P&W's amended complaint and in favor of Hertz and against P&W on Hertz' counterclaim. The court, however, only awarded "nominal" damages to Hertz in the amount of $6 on its counterclaim. On count III of the amended complaint, judgment was entered in favor of P&W, and the court awarded P&W compensatory damages in the amount of $451.61.

P&W appeals the trial court's denial of the class certification and that portion of the judgment rendered in Hertz' favor. Hertz has cross-appealed the trial court's award of $6 in damages to it.

On February 2, 1977, P&W entered into a lease agreement with Hertz for the use of a 1977 Oldsmobile Regency 98. The lease was a form lease, which was for a term of 26 months, and required a monthly payment of approximately $260. The lease was signed by John Wardrope for P&W and by George Lochetto, the Hertz regional manager, in Illinois. The provisions of the lease stated that acceptance would take place in Hertz' home office in New York, although there was no indication that any formal action for approval was necessary by Hertz' office in New York. Thereafter, the car was picked up and licensed in Illinois. For the duration of the lease, the car was stored, kept, used, and maintained in Illinois.

The agreement provided that the monthly rental payments were to be sent by P&W to Hertz' office in New York. The express terms of the lease required P&W to pay a security deposit, authorized Hertz to commingle the security deposit with Hertz' general funds, and provided that the security deposit would not bear any interest while in the possession of Hertz. In conjunction with the written lease agreement, and as was apparently Hertz' practice, the parties orally agreed that the amount of the security deposit would be one month's rental payment, which, in this case, was $260.

On June 22, 1979, the plaintiff returned the car to Hertz, in Illinois, in termination of the lease. There was no dispute that P&W had substituted a replacement tire for the spare, but P&W asserted that the car was otherwise in "top" condition. Moreover, Mr. Wardrope testified that when he returned the car at the end of the lease, a Hertz employee told him that the car was the cleanest she had ever seen. Nevertheless, Hertz' vice-president in charge of leasing operations, Mr. Rybicki, testified at trial that an inspection report on the car, prepared approximately 22 days after the car had been returned to Hertz, showed damages in the amount of $280, which was in excess of ordinary wear and tear. Mr. Rybicki, however, could not explain how these figures were ascertained, nor could he explain when the photographs of the alleged damage to the car were taken. Furthermore, Mr. Rybicki stated that Hertz' standard procedure regarding the return of security deposits at the termination of the lease period required the lessee to request the deposit in writing, although this requirement was not set forth in the lease. The evidence showed that P&W called Hertz to request the balance of its deposit and that Hertz had then instructed P&W to send a written request for the deposit. P&W did not make a written request for its deposit. It was only after P&W brought this suit to recover its security deposit that Hertz claimed that it, not P&W, was entitled to the deposit because of the alleged damage to the car.

Mr. North, vice-president of Hertz' car leasing division, claimed, in an affidavit, that Hertz entered into many different types of leasing agreements, each of which was uniquely tailored to the individual lessee's needs and that, consequently, different lessees often incurred different costs and liabilities under the different leasing agreements. However, contrary to Mr. North's assertions, the lease between P&W and Hertz was a preprinted, form-type lease, drafted by Hertz, with blanks for the lessee's name, the type of vehicle, the term and the payment amounts.

Four issues are raised on review: (1) did the trial court err when it denied class certification of the claim; (2) did the trial court err when it applied Illinois law to the plaintiff's claim; (3) did the trial court err when it found that P&W waived certain rights pertaining to the security deposit which were provided under Illinois law regarding leases of personal property; and (4) did the trial court err when it entered judgment for Hertz on its counterclaim and in its calculation of damages pursuant to that judgment.

The first issue raised by P&W is whether the trial court erred when it denied class certification of its claim. In Illinois, class certification is governed by section 2-801 of the Civil Practice Law (Ill. Rev. Stat. 1985, ch. 110, par. 2-801). That section requires that four elements be satisfied before an action may be maintained as a class action: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of fact or law common to the class which predominate over individual questions; (3) the representative parties will fairly and adequately protect the interest of the class; and (4) the class action is an appropriate method for the fair and efficient adjudication of the controversy. (Ill. Rev. Stat. 1985, ch. 110, par. 2-801.) Certification of a class is within the sound discretion of the trial court and will be disturbed only if there is an abuse of that discretion or if impermissible legal criteria are applied. Wenthold v. AT&T Technologies, Inc. (1986), 142 Ill. App. 3d 612, 616, 491 N.E.2d 1263, 1266.

The dispute here arises as to the second, third, and fourth requirements of section 2 -- 801, since both parties have agreed that the first requirement has been met. The leading case in Illinois on class actions, Miner v. Gillette Co. (1981), 87 Ill. 2d 7, 428 N.E.2d 478, specifically addressed the first requirement of predominating common questions. (Gillette, 87 Ill. 2d at 16-20, 428 N.E.2d at 483-85.) In Gillette, the Illinois Supreme Court upheld a class action certification where all members of the plaintiff class claimed that they were to have received a table lighter from the defendant, Gillette, as part of a promotional offer. The free table lighter was to be supplied by Gillette upon a person submitting proof of the purchase of two Gillette throw-away lighters. The demand exceeded the supply of table lighters and Gillette was unable to fill all requests; thereafter, a class action was filed on behalf of those who did not receive the free table lighter. The court there found that the series of essentially identical transactions between the plaintiffs and Gillette, which gave rise to their claim for the table lighters, presented common questions of fact and law. The Gillette court noted that the existence of individual issues, a separate ...

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