DELANEY v. ENTERPRISE RENT-A-CAR

Superior Court of New Jersey

February 26, 2003

Bruce D. Greenberg, Esq.
Lite, DePalma, Greenberg & Rivas
Two Gateway Center- 12th Floor
Newark, NJ 07102

Vincent E. Gentile, Esq.
Drinker, Biddle, Shanley
105 College Road East- Suite 300
P.O. Box 627
Princeton, NJ 08542

Samuel Miller, Esq.
Folger, Levin, & Kahn
Embarcadero Center West
275 Battery Street- 23rd Floor
San Fransisco, CA 94111

Re: DELANEY v. ENTERPRISE RENT-A-CAR (Docket No. OCN-l-1160-01)

Dear Counsel:

I have had the opportunity to review the various documents submitted to the Court as well as the pleadings in the matter of Enterprise Rent-A-Car v. Charisse Lewis and Patrick Maxie individually on behalf of other similarly situated v. Enterprise Leasing Company/South Central, Inc., aCorporation. In addition to the original complaints I have reviewed the various amendments to the complaint. These two complaints were consolidated by order of the Court in Alabama on August 11, 1998.

The original Lewis case alleged that the plaintiff sold various forms of insurance such as collision damage waiver and personal accident insurance coverage as well as supplemental liability protection without first obtaining a license to sell the same. In addition Lewis also alleged that the plaintiff made certain misrepresentations of material fact concerning the obligation of a renter to purchase optional waiver or coverages and that the cost of insurance was included in the daily rental rate. Count three of the complaint alleges that these representations constituted fraud, wantonness, oppression, or malice under Alabama law. Count four of the complaint alleges that Enterprise suppressed the fact that they were not licensed to sell insurance; that the insurance was provided on the vehicle; that the insurance was included in the daily rate. Count five further alleges that Enterprise suppressed facts they were not licensed to sell insurance; and finally Count six alleges that Enterprise's conduct was part of a scheme to unlawfully sell waiver and insurance coverage.

This complaint was subsequently amended under the first amended counterclaim in which for the first time a class action is now alleged. In addition a Count seven is introduced which alleges a scheme to induce customers to purchase insurance by fraudulent misrepresentations and that such action constituted fraud. Count eight alleges a scheme to induce customers to purchase insurance by fraudulently suppressing and/or concealing from the customer the existence of insurance coverage on the rental cars that resulted in the purchase of additional insurance coverage. Count nine of the complaint alleges misrepresentation of the existence and the extent of automatic coverage and finally Count ten alleges that the sale of insurance was done without an insurance license. The second amended counterclaim added a tenth count to the complaint that it sought an injunctive relief requiring Enterprise to disclose at the point of contract to the customer that the suggested insurance is not required and that there may be duplicate coverage with other insurance policies owned by the customer. And finally, the third amended counterclaim names all of the various entities that operate under the Enterprise umbrella.

The Maxie case commenced initially as a class action and alleged that the defendant's selling of insurance in connection with the rental of vehicles in all 50 states without a license constituted an act of consumer fraud. It alleged that the plaintiff in that particular case as a member of a class purchased supplemental insurance coverage consisting of damage waiver, personal accident insurance and supplemental liability protection. It sought relief under the various provisions of Consumer Protection Laws in the States throughout the Country.

A liberal reading of the pleadings first initially in the Maxie case reflects that it is a general action for protection under the Consumer Protection Laws of the various 50 States and the Lewis case not only alleges a violation of the various consumer protection statutes in the various States but also alleges that Enterprise through its various entities committed common law fraud with respect to certain misrepresentations made to customers. These allegations are identical to the allegations that are before me in the Delaney case. This reading is also consistent with the final judgment entered in the Circuit Court of Jefferson County, Alabama on November 12, 1999. In the summary of proceedings filed with the Court specifically reference both the Lewis case and the Maxie case and noted that both cases assert claims for restitution, rescission, breach of contract, misrepresentation, fraudulent omissions, consumer fraud or protection, unfair competition, and unfair deceptive acts or practices. Furthermore, this particular judgment under the provision of Paragraph 5 on Page 11 permanently barred and enjoined all class members from instituting, maintaining, prosecuting or enforcing either directly or indirectly of any and all claims which are released or discharged by Paragraph 6.6 of the stipulation including, but not limited to any claims for damages, restitution, rescission, breach of contract, misrepresentation, fraudulent omission, consumer fraud, or protection, unfair competition or unfair or deceptive acts or practices under the laws of the District if Columbia, and all States except Texas arising out of, based upon, or relating to any of the matters alleged in the actions and the amended claims and counterclaims, excluding only coverage claims.

I find particular entry of the judgment to be consistent with the pleadings that were filed and to encompass a prohibition against this particular plaintiff from instituting any claims for consumer fraud, misrepresentation or common law fraud or restitution or breach of contract during the period of July 31, 1993 through August 1, 1999. Thus Paragraph 2 of the proposed order for classification should exclude any claims for the period of July 31, 1993 through August 1, 1999. Mr. Greenberg is to prepare an appropriate order that is consistent with this letter. My suggestion would be for Mr. Greenberg to prepare the appropriate order, submit it to the Court, as well as copies to all counsel. I then would suggest a conference call so that I as well as counsel can go over the order and if there are any minor changes to be made consistent with my ruling it can be made without any further delay.

With respect to the case management order, please be advised that I do not have any objection to the entry of the order except that I would omit Paragraphs 10 and 11 of the order. I would enter an order ending discovery on December 31, 2003. After that particular date you will automatically receive a notice of Trial from the Trial Administrator's Office. That particular Trial us usually scheduled for approximately 60 days after the end of the discovery date.

You should be further advised that once the matter is placed on the Master Trial List it is then assigned to the Presiding Judge to be assigned for Trial.

If there is no objection to the case management order that has been submitted to me I will sign it after waiting 10 days from the date of this letter. I will make the appropriate corrections before signing.

Should anyone have a question concerning this matter, please do not hesitate to contact me. I await notification concerning the preparation of the order for classification and the date for a conference call regarding that order.

Very truly yours,

EDWARD M. OLES, J.S.C.

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