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Spotswood v. Hertz Corp.

United States District Court, D. Maryland

November 22, 2016



          William M. Nickerson Senior United States District Judge.

         Before the Court is a Motion to Dismiss filed by Defendant The Hertz Corporation (Defendant or Hertz). ECF No. 50. The motion is ripe. Upon a review of the briefs submitted and the applicable case law, the Court determines that no hearing is necessary, Local Rule 105.6, and that the Motion to Dismiss will be granted in part and denied in part.


         Plaintiff brought this action challenging certain charges that Defendant assessed against him after the car he had rented from Defendant was damaged in a minor accident. Plaintiff, a resident of Alabama, rented a car from Defendant at the Baltimore Washington International Airport on July 3, 2013. Plaintiff is a member of Defendant's Gold Plus Rewards Program and when he enrolled in that program he agreed to certain terms and conditions that would govern future rentals. Those terms and conditions were set out in a 40-plus page Rental Terms Agreement booklet (Agreement). First Amended Compl. (FAC) ¶ 11; see also ECF No. 16-2 (the Agreement). When he rented the car on July 3, 2013, he also agreed to certain additional terms specific to this rental that were set out in a “Rental Record.” FAC ¶ 11; see also ECF No. 10-2 at 71-74 (Rental Record). It is undisputed that these two documents form the entire contract between Plaintiff and Defendant regarding the subject rental.

         The Agreement provides that the renter of the vehicle is “responsible for any and all loss of or damage to the car resulting from any cause including but not limited to collision, rollover, theft, vandalism, seizure, fire, flood, hail or other acts of nature or God regardless of fault.” Agreement § 4(a).[1]The Agreement provides further that the renter's “responsibility will not exceed the greater of the retail fair market value of the car and its manufacturer buyback program value at the time the car is lost or damaged, less its salvage value, plus actual towing, storage and impound fees, an administrative charge and a reasonable charge for loss of use.” Id. § 4(b). The Agreement also permits Defendant to charge the renter's “credit, charge or debit card for these losses, costs and charges, together with any other applicable charges, at or following the completion of the rental.” Id.

         On July 5, 2013, Plaintiff was involved in a minor parking lot accident which resulted in some minor damage to Defendant's vehicle. Defendant assessed the following charges related to this accident:

Repairs to the vehicle: $662.90
Administration[2] Fees: $85.39
Loss of Use: $362.94
Diminishment of Value Fees: $111.80

FAC ¶ 20. Because Plaintiff had declined Defendant's loss damage insurance, the claim for this accident was submitted to American Express which provided car rental insurance through Plaintiff's credit card program. American Express agreed to pay and has paid for all of the Repairs and for one half of the Loss of Use, but has declined payment for the Administrative or Diminishment of Value Fees. Defendant takes the position that Plaintiff is responsible for the fees unpaid by American Express, which amount to $378.66. Id. ¶ 22.

         Plaintiff initially filed this suit as a putative class action in the Superior Court of New Jersey, Bergen County, on April 6, 2015. Defendant removed this action to the United States District Court for the District of New Jersey and then filed a motion to have the case transferred to this Court. That motion was granted on October 27, 2015. After the case arrived in this Court, Defendant filed a motion to dismiss some of the claims asserted against it in the Complaint. ECF No. 42. Defendant also filed a motion to stay the time for filing an answer to the claims that were not the subject of its motion to dismiss. ECF No. 41. Shortly thereafter, Plaintiff filed a First Amended Complaint, ECF No. 48, rendering Defendant's two previous motions moot.

         In his First Amended Complaint, as he did in his original Complaint, Plaintiff challenges the Loss of Use, Administrative, and Diminishment of Value fees. He observes that nowhere in the Agreement is there an expressed allowance for any Diminishment of Value fee. While acknowledging that the Agreement permits the assessment of Loss of Use and Administrative fees, he contends that those fees must be reasonably related to actual costs incurred by Defendant. He asserts that they are not so related, but, instead, are simply a means by which Defendant creates additional profit.

         Based upon these allegations, Plaintiff brings the following claims in the First Amended Complaint: Count I (Breach of Contract), Count II (Violations of the Maryland Consumer Protection Act), Count III (Injunctive Relief), Count IV (Injunctive Relief Pursuant to Common Law), Count V (Unjust Enrichment), and Count VI (Negligent Misrepresentation). Plaintiff proposes a class consisting of all persons and entities that have rented vehicles from Defendants in the 6 years prior to the original filing of this action and who were charged a Diminishment of Value fee, a Loss of Use fee, and/or an Administrative fee for damage and/or loss by Defendant. As a subclass, Plaintiff proposes a similarly defined group of persons and entities who rented their vehicles in Maryland.

         Unlike the motion to dismiss the original Complaint which did not challenge Plaintiff's breach of contract claim, the instant motion seeks to dismiss the First Amended Complaint in its entirety. Briefly stated, Defendant argues that there was no breach of contract because both the Agreement and Maryland common law permit the recovery of these challenged fees. For the same reasons, Defendant argues that the Maryland Consumer Protection Act (MCPA) claim fails because the challenged fees were fully disclosed. As for the unjust enrichment and negligent misrepresentation claims, Defendant asserts that those claims should be dismissed because these tort claims cannot be brought where the parties' relationship is governed by a contract. Finally Defendant suggests that claims for injunctive relief asserted in Counts III and IV should be dismissed because injunctive relief is a remedy and not an independent cause of action. As to that last argument, Plaintiff concedes that Counts III and IV should be withdrawn as separate counts.


         A complaint must contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Facial plausibility exists “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “Factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. Although when considering a motion to dismiss a court must accept as true all factual allegations in the complaint, this principle does not apply to legal conclusions couched as factual allegations. Id.


         A. ...

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