Rental Car Company And Its Security Guard Company Found Not Liable For An Accident Involving A Stolen Rental Car
August, 2007
In Phillips v. Budget Rent-A-Car Systems, Inc., 372 Ill.App.3d 155, 864 N.E.2nd 709 (1st Dist. 2007), the Illinois Appellate Court, First District, held that an accident involving a stolen vehicle from defendant Budget Rent-A-Car Systems, Inc. (“Budget”) was not foreseeable to the company, and defendant Ranger Security, Inc. (“Ranger Security”) did not owe a duty of care to the plaintiff. The court further held that plaintiff’s injuries were not proximately caused by the breach of any duty.
Facts
The accident at issue occurred as the result of a high-speed chase between the police and an unidentified driver of a stolen rental car from Budget’s O’Hare Airport location. During the chase, the stolen car collided with plaintiff’s vehicle, causing plaintiff to sustain various injuries. Plaintiff filed suit alleging, inter alia, that Budget was negligent in that it breached its duty to “maintain control over its vehicles so as to prevent harm to persons lawfully on public streets, and that Budget and Ranger breached their duties to prevent unauthorized personnel access to that vehicle so as to prevent harm to members of the general public.”
It was disclosed during discovery that Budget kept the keys of its vehicles in their ignitions in order to “facilitate the movement of its vehicles.” Budget employed “hikers” to transport the rental cars between facilities to make sure that each rental location had enough vehicles. In order to transport a rental car from O’Hare Airport to another rental facility, a hiker had to produce a nonrevenue transport ticket (“NRT”) to a security guard of Ranger Security before leaving the facility. The hiker would be provided with a blank NRT and select a vehicle to transport. The hiker would then write the vehicle’s identification information on the NRT, and also record his own identification number and the rental car’s mileage before signing the NRT.
It was the contractual duty of Ranger Security, under its security guard agreement, “to [ensure] that no vehicles [were] taken from the facility without the proper authorizations.” A Ranger Security guard could permit a service agent or customer service representative to remove a rental car, without a rental contract, from a Budget facility if the driver had an NRT signed by a Budget manager. It was not disputed between the parties, however, that Budget never gave Ranger Security personnel a list of names of Budget managers who were permitted to authorize an NRT.
The driver of the stolen Budget rental car at issue presented a falsified NRT to a Ranger Security guard and was allowed to drive the car out of the Budget facility. After it was determined that the driver did not transport the rental car to the proper facility, a “missing vehicle report” was prepared and faxed to Budget’s security manger. After additional investigation, the Chicago Police Department was contacted and advised that the rental car had been stolen.
The stolen vehicle, with the driver inside, was subsequently located by the police. After unsuccessfully attempting to stop the driver, they began to pursue him in what became a high-speed police chase. During this chase, the stolen rental car struck the plaintiff. After the collision, the unidentified driver got out of the vehicle, fled, and was never apprehended.
Budget and Ranger Security filed motions for summary judgment, both of which were granted by the trial court. Plaintiff appealed both rulings.
Analysis
The appellate court first addressed whether or not Budget owed a duty of care to plaintiff. The court noted that there were two classes of cases in Illinois involving the duty of a vehicle owner to lock his or her vehicle and to remove the keys from the ignition after the vehicle had been parked.
The first class of cases dealt with statutory violations by defendants. In this class of cases, the defendants’ vehicles were stolen while they were parked on public property in violation of specific state statutes. In finding liability on the part of defendants in these cases, the courts concluded that the statutory violations were prima face evidence of negligence.
The second class of cases involved common law negligence claims in which the defendant left his or her keys in the ignition of his/her automobile on private property as opposed to public property. Accordingly, statutory violations did not come into play. The court noted that this second class of cases applied here since the alleged negligence occurred on private property.
With respect to the second class of cases, Illinois courts have repeatedly held that a duty does not exist to an injured third party by a defendant’s stolen vehicle unless there were “special circumstances” that made the theft foreseeable. For example, in Ruyle v. Reynolds, 43 Ill.App.3d 905, 357 N.E.2d 804 (4th Dist. 1976), a vehicle was stolen when the defendant’s agent left it in a parking lot, unattended and unlocked. The stolen car was later involved in an accident with the plaintiff. In reversing the trial court’s order dismissing plaintiff’s complaint, the appellate court explained that “given the neighborhood in which the defendant’s agent left the vehicle unattended, it was foreseeable that a theft would occur.” Ruyle, 43 Ill.App.3d at 909. In other words, the court found there to be special circumstances.
In Hallmark Ins. Co. v. Chicago Transit Authority, 534 N.E.2d 501 (1989), a Chicago Transit Authority bus was stolen and the driver subsequently ran the bus into plaintiff’s building. In reversing summary judgment for defendant, the appellate court stated that special circumstances existed because it was undisputed that the defendant knew of numerous prior thefts at the location where the bus was parked and maintained. Accordingly, the court found that a genuine issue of material fact existed with respect to the defendant’s duty to the plaintiff.
In the present case, the court found that plaintiff waived her argument on appeal regarding “special circumstances” because no such arguments were asserted before the trial court. As such, the trial court’s order granting summary judgment to Budget was affirmed. However, the court stated that even if it considered plaintiff’s allegations of special circumstances, her argument would fail. Plaintiff argued on appeal that due to the fact that Budget’s employees spend approximately 200 days a year in court litigating criminal matters in connection with their rental cars, special circumstances existed making the theft of Budget’s vehicle foreseeable. However, the appellate court disagreed as plaintiff failed to allege whether any of the past thefts of rental cars at Budget facilities occurred at O’Hare Airport, and plaintiff also failed to allege a specific time frame with respect to when the thefts occurred. Additionally, plaintiff was only able to cite one other incident in which a falsified NRT was utilized in order to steal a rental car from a Budget facility. As such, the court held that the specific theft in the present case was not reasonably foreseeable and therefore, plaintiff failed to prove that Budget owed a duty of care to her.
In summary, the court explained that:
Although Budget was arguably negligent in the administration of its security measures to protect against vehicular thefts, we do not find that those errors created a duty of care to Plaintiff with regard to an accident involving Budget’s stolen vehicle. To conclude otherwise would place a significant burden on Budget and would expose all rental car companies to third-party criminal liability involving their vehicles. We do not find such a broad duty of care to the general public to be a prudent or reasonable holding.
With respect to Ranger Security, the court also found that it could not have reasonably foreseen the motor vehicle accident at issue. Plaintiff argued that Ranger Security assumed a duty to protect her when it entered into its contract with Budget. Plaintiff specifically maintained that Ranger Security agreed to perform a duty that Budget allegedly owed to the public to protect against individuals stealing and operating Budget’s rental cars. In affirming summary judgment for Ranger Security, the appellate court held that Ranger Security did not owe plaintiff a duty of care because the motor vehicle accident in this case did not occur at the facility that Ranger Security was hired to protect. Additionally, the accident resulted from a forged NRT which, as noted above, had only happened once before. Therefore, Ranger Security did not owe plaintiff a duty of care.
The appellate court also noted that plaintiff could not establish that defendants’ alleged negligence was the proximate cause of the accident. There must be both “cause in fact” and “legal cause” to properly establish proximate cause. In order to prove cause in fact, it must be shown that a “defendant’s conduct is a material factor in bringing about the injury if the injury would not have occurred absent the defendant’s conduct.” Legal cause is “a question of foreseeability.” Abrams v. City of Chicago, 211 Ill.2d 251, 258, 811 N.E.2d 670 (2004). The court held that since the accident in the present case occurred 8 days after the car was stolen and 26 miles away from the Budget facility at O’Hare Airport, that this “remoteness of time and distance” precluded plaintiff from establishing proximate cause.
Learning Point
The court’s holding in Phillips is positive in that it further defines the limits of liability that can be imposed on entities such as rental car and security guard companies with respect to criminal activity, such as the theft of their rental cars. The decision indicates an unwillingness on the part of the court to broaden the duties owed to third parties by defendants like Budget and Ranger Security. Instead, the court is re-asserting the proposition that there must be specific “special circumstances” present in order establish the foreseeability of criminal activity resulting in an accident involving a third party.
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