Hertz 2007 Annual Report Download - page 71

new cause of action was also added for conversion for which the plaintiff is seeking punitive
damages. After some limited discovery, we filed a motion for summary judgment in December
2004. That motion was denied in January 2005. The parties then engaged in more extensive
discovery. In April 2006, the plaintiff further amended his petition by adding a cause of action for
fraudulent misrepresentation and, at the plaintiff’s request, a hearing on the plaintiff’s motion for
class certification was scheduled for August 2006. In May 2006, the plaintiff filed a fourth
amended petition which deleted the cause of action for conversion and the plaintiff also filed a
first amended motion for class certification in anticipation of the August 2006 hearing on class
certification. After the hearing, the plaintiff filed a fifth amended petition seeking to further refine
the putative class as including all Texas residents who were charged a FSC in Texas after
February 6, 2000. In October 2006, the judge entered a class certification order which certified a
class of all Texas residents who were charged an FSC in Texas after February 6, 2000. We are
appealing the order.
2. Oklahoma
On November 18, 2004, Keith Kochner, individually and on behalf of all similarly situated
persons, v. The Hertz Corporation was commenced in the District Court in and for Tulsa County,
State of Oklahoma. As with the Gomez case, Kochner purports to be a class action, this time on
behalf of Oklahoma residents who rented from us and incurred our FSC. The petition alleged
that the imposition of the FSC is a breach of contract and amounts to an unconscionable
penalty or liquidated damages in violation of Article 2A of the Oklahoma Uniform Commercial
Code. The plaintiff seeks an unspecified amount of compensatory damages, with the return of
all FSC paid or the difference between the FSC and our actual costs, disgorgement of
unearned profits, attorneys’ fees and costs. In March 2005, the trial court granted our motion to
dismiss the action but also granted the plaintiff the right to replead. In April 2005, the plaintiff
filed an amended class action petition, newly alleging that our FSC violates the Oklahoma
Consumer Protection Act and that we have been unjustly enriched, and again alleging that our
FSC is unconscionable under Article 2A of the Oklahoma Uniform Commercial Code. In May
2005, we filed a motion to dismiss the amended class action petition. In October 2005, the court
granted our motion to dismiss, but allowed the plaintiff to file a second amended complaint and
we then answered the complaint. After the parties engaged in some limited discovery, we filed a
motion for summary judgment in August 2007.
3. New Mexico
On December 13, 2005, Janelle Johnson, individually and on behalf of all other similarly situated
persons v. The Hertz Corporation was filed in the Second Judicial District Court of the County of
Bernalillo, New Mexico. Johnson purported to be a class action on behalf of all New Mexico
residents who rented from us and who were charged a FSC. The complaint alleged that the
FSC is unconscionable as a matter of law under pertinent sections of the New Mexico Uniform
Commercial Code and that, under New Mexico common law, the collection of a FSC does not
constitute valid liquidated damages, but rather is a void penalty. The plaintiff sought an
unspecified amount of compensatory damages, with the return of all FSC paid or the difference
between the FSC and its actual cost. In the alternative, the plaintiff requested that the court
exercise its equitable jurisdiction and order us to cease and desist from our unlawful conduct
and to modify our lease provisions to conform with applicable provisions of New Mexico
statutory and common law. The complaint also sought attorneys’ fees and costs. We removed
the action to the U.S. District Court for the District of New Mexico and, in lieu of an answer, filed a
motion to dismiss. In November 2006, the judge granted our motion to dismiss the liquidated
damages claim and the substantive unconscionability claim but did not grant our motion to
dismiss the procedural unconscionability claim or the claim for equitable relief. Plaintiff then
amended her complaint to replead the unconscionability claim and to add a fraudulent
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