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Rickher v. Home Depot

July 28, 2008


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 05 C 2152-John F. Grady, Judge.

The opinion of the court was delivered by: Kanne, Circuit Judge


Before KANNE, EVANS, and SYKES, Circuit Judges.

John Rickher brought a class-action lawsuit against Home Depot, arguing that Home Depot's sale of a "Damage Waiver" in connection with tool rentals violated the Illinois Consumer Fraud and Deceptive Business Practices Act ("CFA"), see 815 Ill. Comp. Stat. 505/2. Rickher claims that the waiver is a worthless product because it does not provide any value or protection to the customer beyond what is already provided in the basic "Rental Agreement." In Rickher's view, the sale of the worthless Damage Waiver is both deceptive and unfair under the CFA. The district court rejected Rickher's argument and denied his motion for class certification. Because we agree with the district court that the Damage Waiver has value, we affirm the judgment.


This appeal deals with a question that many consumers face on a regular basis-should I buy the extra protection being offered with this purchase or rental? John Rickher faced this question on over a dozen occasions over the past few years when he rented tools and equipment from Chicago-area Home Depot stores. On each occasion, Rickher entered into a three-page contract-the Rental Agreement-with Home Depot. The first page is Home Depot's copy of the agreement. It outlines the description and price of the rental, with itemized charges; one line item is labeled "Damage Waiver." The first page also contains a "Special Terms and Conditions" section, which includes the following statement: "I accept the benefits of the damage waiver (if applicable) described in paragraph 11 in the terms and conditions of this rental agreement." The customer signs the first page of the agreement, underneath this statement of acceptance. The second page is the customer's copy of the agreement, and it also describes the rented item and the itemized charges. It looks very much like the first page (Home Depot's copy), but does not contain the Special Terms and Conditions that are identified on the front page.

The third page details the specific terms and conditions of the agreement. Four provisions are relevant to Rickher's appeal. According to the "Risk of Loss" provision (¶ 3), a rental customer is liable for all "damage or destruction, partial or complete" to the equipment. A different provision (¶ 5) explains that the customer is not liable for "reasonable wear and tear resulting from proper use." Then, according to the "Repair or Replacement" provision (¶ 6), in the event a tool or piece of equipment becomes unsafe or in a state of disrepair, Home Depot has the "option" to fix the equipment, provide the customer with a comparable item, or adjust the rental charge. The Repair or Replacement provision goes on to explain that if the equipment is damaged or in disrepair because of the customer's improper use or maintenance, the customer will bear the cost of the replacement or repair. Finally, there is the Damage Waiver provision (¶ 11), which relieves the customer of liability for damage to the equipment that does not result from the customer's improper use of the equipment, provided the customer pays an additional fee.

The precise language of the baseline Risk of Loss provision (¶ 3) states:

. . . I [the customer] assume all risks of loss, theft, damage or destruction, partial or complete, of the Equipment from any and every cause whatsoever.

The second relevant condition, which Rickher characterizes as the "Wear and Tear" provision (¶ 5), specifically provides:

I acknowledge that I have examined the Equipment, seen it in operation (if appropriate) and that its condition is acceptable. I agree to surrender the Equipment to you upon termination hereof, in as good order and condition as when received, except for reasonable wear and tear resulting from proper use, and if returned unclean, I may be charged a reasonable cleaning fee. I agree to keep and maintain the Equipment in good condition, use it in a careful and proper manner (including without limitation maintenance of proper fuel, oil and lubricant levels, if applicable) and comply with all applicable laws and regulations.

In the Repair or Replacement provision (¶ 6), the customer agrees: immediately to discontinue using Equipment that becomes unsafe or in a state of disrepair, and immediately to notify [Home Depot] of such fact. You [Home Depot] have the option to make such Equipment operable within a reasonable time, provide me with a similar piece of Equipment or adjust the rental charge. However, if such Equipment is unsafe or in disrepair because of my improper use or maintenance, I will bear the expense of such replacement or repair or, at your option, be declared in default.

The Damage Waiver provision (¶ 11) explains that, if the customer pays the Damage Waiver charge-a fee equal to ten percent of the cost of the equipment's regular rental charge-Home Depot will "waive" its right to hold the customer liable for damage caused to the product while in the customer's possession-except for damage caused by the customer's misuse or abuse of the equipment (among other exceptions).

If I pay the Damage Waiver charge for any Equipment, this agreement shall be modified to relieve me of liability for accidental damage to it, but not for any losses or damages due to theft, burglary, misuse or abuse, theft by conversion, intentional damage, disappearance or any loss due to my failure to care properly for such Equipment in a prudent manner (including without limitation by ...

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