Citation Numbers: 42 A.D.2d 104
Judges: Benjamin, Shapiro
Filed Date: 7/2/1973
Status: Precedential
Modified Date: 1/12/2022
At .Special Term, Allstate Insurance Company, as the petitioner, sought a stay of an arbitration proceeding commenced by Agnes La Perta, a passenger in her husband’s automobile when it came in contact with an automobile owned by the appellant, the Hertz Corp. In asking for arbitration she invoked the arbitration provision of the uninsured motorist clause in the automobile liability policy issued by Allstate to her husband.
Hertz had rented its car to one Jean Riquier and at the time of the accident it was being driven by one Louis Tonioli.
The La Pertas first brought suit in the Supreme Court, Orange County, against Hertz and Tonioli. When Hertz interposed its answer it denied liability on the ground that its automobile was not being operated with its permission and consent, since Tonioli was not within the class of persons authorized to operate the vehicle under its rental contract with Riquier. Mrs. La Perta then invoked the arbitration clause in the Allstate policy. Allstate thereupon brought the instant proceeding to stay the arbitration, contending that the La Pertas had failed to establish that Tonioli was uninsured and that, until that was done, it was entitled to a stay of arbitration. Special Term made an order (1) that Allstate bring in Hertz as a party respondent (which was done); (2)that a hearing be held in Special Term of the issue of Tonioli’s status as an uninsured motorist; (3) that pending the determination of that issue the arbitration sought by the La Pertas be stayed; and (4) that if Tonioli were found to be uninsured the interim stay of arbitration shall cease.
After the hearing thus directed Special Term made an order permanently staying the arbitration proceeding (Matter of Allstate Ins. Co. [La Perta], 71 Misc 2d 754). It is Hertz’s appeal from that order which is now before us for review.
The issue on this appeal therefore is whether the clause on the back of Hertz’s automobile rental agreement, which, among other things, limited the use of the rented car to the customer (Jean Riquier), a member of her immediate family, her employer, and her employees in the course of their regular and • usual employment by the customer, is effective to release Her|z from liability to a person injured by the negligence of the person
Hertz contends that, as an owner of a motor vehicle, it could, in its rental thereof, reasonably restrict its operation to certain specified persons and that, if the limitations were breached, it necessarily followed, as a matter of1 law, that it was not responsible for the automobile’s operation, since it was being driven without its, the owner’s, permission (Hinchey v. Sellers, 7 NY 2d 287; Arcara v. Moresse, 258 N. Y. 211; Burmaster v. State of New York, 7 N Y 2d 65, 70).
The above-mentioned provision in Hertz’s rental agreement reads: “2. Under no circumstances shall vehicle be used, operated or driven: (A) for the transportation of persons or property for hire; (B) by any person in violation of law as to age, or by any person who has given to Lessor a fictitious name or false age or address; (C) in any race, speed, test or contest; (D) to propel or tow any vehicle or trailer; or (E) by any person other than Customer, except (1) a member of Customer’s immediate family; (2) Customer’s employer; (3) an employee of Customer in the course of such employee’s regular and usual employment by Customer; provided that any such person specified in (1), (2) or (3) must have first obtained Customer’s permission, and provided further that no person, including Customer, shall operate or drive vehicle unless such person is a qualified licensed driver and, if a member of customer’s immediate family, is 21 years of age or older. The foregoing restrictions are cumulative, and each of them shall apply to every use, operation or driving of vehicle.” Hertz contends that this provision was breached when Biquier, the person to whom it had rented its car, let Tonioli, not a member of her family, her employer or her employee, use it and drive it and that, therefore, it had no liability for . the injury caused by Tonioli to the La Pertas while he was driving its car.
Claiming that section 388 of the Vehicle and Traffic Law imposes liability on the owner only for the negligence of a person driving a vehicle with the owner’s permission, Hertz argues that any owner, whether a renter or one who lends his car to another, can impose limits on that permission and', if such limits are exceeded, the result is a use without the owner’s permission, which absolves the owner of liability for damages resulting from such an unpermitted use.
Nowhere in its brief does the appellant deal with the point stressed by the learned Justice at Special Terna, that the driver
Yet, it is these two factors which, in our opinion, are decisive of the issue of whether the restriction relied on by Hertz was brought home to Riquier, the person renting the car from it, so as to cut off Hertz’s liability as the owner of the vehicle.
The condition relied on by Hertz to absolve it from liability, although artfully designated as being on page 1, is really on the back of the rental agreement and is co-joined with a great number of other “ terms and conditions ” so “ compactly printed and in such very small type as almost to defy readability ’ ’ (Febbraro v. Hertz Corp., 64 Misc 2d 794, 795). Under the circumstances, “ to believe that the customer has actually read the terms and conditions on the reverse side would be to believe the unbelievable ” (Febbraro v. Hertz Corp., supra, p. 795).
In the absence of any proof that the customer was specifically made aware of the limitations contained in fine print on the reverse side of the rental agreement, she had a right to believe that the only use limitation was the above notice and, since it was inapplicable to her, that there was in fact no other limiting or restrictive driver provision in the rental agreement.
It follows, therefore, that the specific limitation in its rental agreement upon which Hertz relies is without binding effect on its customer. A fortiori, it is without binding effect upon an innocent victim of the negligence of one using the car with the permission of the person.to whom Hertz rented it.
The conclusion which I have here reached is consistent with the decision of this court in Cooperman v. Ferrentino (37 A D 2d 474, 476-477), where we said, “ The public policy expressed by the statute frames a remedy unknown at common law for the compensation of a party injured by the negligent driver of an automobile through recourse to the owner (Continental Auto Lease Corp. v. Campbell, 19 N Y 2d 350, 352; Rauch v. Jones, 4 N Y 2d 592, 596); and the ownership of the automobile imports a rebuttable presumption of permission (Leotta Y. Plessinger, 8 N Y 2d 449, 461; Brindley v. Kirzsan, 18 A D 2d 971, affd. 13 N Y 2d 976).” We then Went on to say (pp. 477-478): “Finally, we must treat the circumstances of the case against the background of the statute. Hittner, as an dperator of a car rental business, is not in the same position as an individual owner of an automobile who lends it to a relative or friend for a specified purpose or limited to a described area (cf. Hinchey v. Sellers, 7 N Y 2d 287, 292; Chaika v. Vandenberg, 252 N. Y. 101; Psota v. Long Is. R. R. Co., 246 N. Y. 388). The business of leasing automobiles has assumed a widespread and growing role in our economy. The restrictions laid down by the dealer affect the use of many automobiles, not one; and the restrictions continue
It is true that in Cooperman this court’s finding of liability on the part of the car-renting owner was based, in part, on the fact that the owner’s rental had been to another company which it knew would rent the automobile from time to time to the public and which it also knew was using a rental contract devoid of the restrictions it had placed in its lessor’s rental contract. While holding that “ this kind of casual disregard of written restrictions on the use of an automobile in the practice of the car rental business contemplated” signified 1 ‘ that the restrictions were abandoned ” (p. 477), we also based our decision on a finding that the owner’s ‘‘ consent under section 388 of the Vehicle and Traffic Law was established as a matter of law and that Hittner [the owner] is liable to the plaintiffs as the owner of the automobile which negligently caused the injury ” (p. 478). Though the court added that the condition Hittner, the owner-lessor, sought unsuccessfully to invoke ‘1 might well apply to an individual case ” (p. 478), that statement was made without consideration of the vital issue in the case at bar. That issue is the nature of the notice that an owner engaged in the business of renting cars must give to its customers in order to advise them of the limitation on their right to let other persons drive the cars before the owner can avail itself of the right to rebut the presumption of consent and consequent liability established by section 388 of the Vehicle and Traffic Law.
Motor Vehicle Acc. Ind. Corp. v. Continental Nat. Amer. Group Co. (42 A D 2d 712) is also distinguishable, because in that case the driver limitation appeared together with the price and period of the rental (matters of real interest to the renter) on the very page and immediately above where the renter signed his name. The limitation in that case was not hidden among numerous other conditions and provisions in small print on the back of the agreement. Contrariwise, it was clearly to be seen by the renter when he signed his name, was in larger print and w;as specific in its
Furthermore, in that case there was absent the “notice ” in larger type under the customer’s signature, mentioned above, which imposed a limitation substantially different from, and narrower than, that imposed by the fine-type clause on the back of the appellant’s rental agreement and by reason of which, as we have noted, the renter had a right to infer that there were no other restrictive driver limitations in the rental agreement.
In view of the above, I do not find it necessary to reach the issue, discussed in the concurring memorandum, of whether any driver-restrictions (except against illegal operators) imposed by a company engaged in the .rental of automobiles for hire is per se void as against public policy.
The order appealed from should therefore be affirmed, with $20 costs and disbursements against respondent the Hertz Corp.
. This is so even though the leasing agreement contains a provision that “ I have read the terms & conditions on page 1 (other side) and page 2 of this rental agreement and agree thereto ”, for as 1 Williston, Contracts (3d ed.), § 90C, pp. 309-310, states: “Many courts qualify the principle stated in the preceding sections [‘where an offeree signs a document though in ignorance of its contents, he is bound by its terms’ {ibid., § 90A, pp. 291-292)] by adding that if the terms of a document are not fairly legible, the acceptance of it does not involve assent to its terms unless they were actually known. This qualification is applicable where the terms are printed in too fine type, or in cramped type * * * or where they are printed on the bach of the document ” (emphasis supplied).
See, also, Blossom v. Dodd (43 N. Y. 264, 268) where our Court of Appeals said, “ This paper [a baggage check with a small type legend limiting liability for loss of baggage] is subject to the criticism made by Lord Ellenborough, is
. In the light of the above “notice” just below the signature and address of the customer, is it realistic to believe that a customer would realize that, under the fine-type language of paragraph 2 on the reverse side of his rental agreement, he would be canceling his insurance coverage on the car he was renting if, for example, he allowed his fiancee to spell him as the driver on a trip he took with her in the rented car or allowed any passenger, other than a member of his family, his employer or his employee, to take the wheel and drive the car if he should become tired or otherwise indisposed?