Wednesday, October 4, 2006
C.A. Revives Unfair Competition Suit Over U-Haul Fueling Charges
By KENNETH OFGANG, Staff Writer
A U-Haul customer seeking class action status for a suit charging the truck rental firm with deceiving customers about fees charged for fuel has a viable claim under the Unfair Competition Law and Consumers Legal Remedies Act, the Court of Appeal for this district ruled yesterday.
Div. Seven, reversing a contrary ruling by Los Angeles Superior Court Judge Wendell Mortimer Jr., reinstated Leonard E. Aron’s suit against U-Haul Company of California and U-Haul International, Inc.
U-Haul has a standard of practice of renting trucks with whatever fuel was left in the vehicle by the previous renter. It gives each customer two options, which appear explicitly in its customer agreement: return the vehicle with at least the same amount of fuel as was in the truck when it was rented, or pay a $20 fueling fee plus $2 per gallon for fuel estimated to have been used and not replaced.
The estimate is based on the fuel gauge reading, and customers who return vehicles with more fuel than was in the truck at time of rental do not receive credit.
Aron contends that the fueling charges are illegal, unfair and fraudulent, arguing that since there is no accurate way of measuring exactly how much fuel was in the vehicle at the time of rental, the only way to avoid the charge is to purchase more fuel than the customer actually uses.
The trial judge granted judgment on the pleadings in favor of the defendants, but Justice Laurie Zelon, writing for the Court of Appeal, said the complaint adequately pled causes of action under both the UCL and the CLRA.
No ‘Safe Harbor’
She rejected U-Haul’s contention that it has a complete defense under the “safe harbor” of Civil Code Sec. 1936(n)(2), which permits a rental company to “charge for an item or service provided in connection with a particular rental transaction if the renter could have avoided incurring the charge by choosing not to obtain or utilize the optional item or service,” including “charges for refueling the vehicle at the conclusion of the rental transaction in the event the renter did not return the vehicle with as much fuel as was in the fuel tank at the beginning of the rental.”
The statute only applies to “passenger vehicle” rental companies, which are regulated by a different statutory scheme than “motortruck” rental companies such as U-Haul, whose vehicles are rented primarily to transport property, Zelon said.
The justice went on to write that Aron “sufficiently alleges an unlawful act” by pleading that the use of fuel gauges as the sole measure of fuel use violates a state law making it unlawful to use “any weight or measure or weighing, measuring or counting instrument, knowing it to be ‘incorrect’ as...defined in [Business and Professions Code] Section 12500.” That section provides that an instrument is “incorrect” if it fails to meet reliability standards adopted by the state.
Aron’s claim that customers are forced, in light of the inaccuracy of the gas gauge, to either pay the refueling fee or purchase more gas than they actually use alleges an unfair business practice under the UCL and CLRA, Zelon went on to say. She distinguished a case upholding similar charges imposed by a car rental company, noting that the ruling was based on Sec. 1936(n)(2).
The justice also distinguished a case upholding a mandatory service charge imposed by a hotel on room service customers. That charge, the jurist reasoned, was mandatory and was disclosed as such; as alleged by Aron, U-Haul’s fueling practice is falsely advertised as giving the customer a means of avoiding a fuel charge that is in fact unavoidable.
The case is Aron v. U-Haul Company of California, B181756.
Copyright 2006, Metropolitan News Company