Enterprise Rent-A-Car admits negligence in crash that killed Santa Cruz sisters; court awards $15 million to family—FTC Settlement with Budget Rent-A-Car

Santa Cruz Sentinel
6/21/10

SANTA CRUZ – A jury has awarded $15 million to the parents who filed a wrongful death lawsuit against Enterprise Rent-A-Car of San Francisco after their daughters, Raechel and Jacqueline Houck of Santa Cruz, died in a fiery crash in 2004.
Enterprise, the nation’s largest rental car company, and its corporate parent contested the lawsuit for five years, then admitted in May they were negligent and that "their negligence was the sole proximate cause of the fatal injuries," according to a document signed by their attorneys.
The jury awarded damages June 9; the defendants have 30 days to decide whether to appeal.
Company attorneys at Yukevich Calfo & Cavanaugh in Los Angeles were not available to comment. Enterprise spokeswoman Laura Bryant, in St. Louis, said the company would have a statement today.
"This is a consumer issue of vital importance," said Carol "Cally" Houck, mother of the two young women, citing a deposition from a company official indicating Enterprise had no plans to change policies regarding recalled cars in their fleets.
Raechel Houck, 24, who worked at The Catalyst, had rented a 2004 Chrysler PT Cruiser on Oct. 7, 2004, at Enterprise’s Capitola location for herself and her sister, 20, who worked at Little Tampico in Soquel.
The previous month, Daimler Chrysler sent out safety recall notices for 435,000 PT Cruisers from 2002 through 2005. The notice said the power steering hose could leak, resulting in a fire.
Enterprise records showed the PT Cruiser in which the Houck sisters died had not been repaired, it had been rented four times since the recall and the Houcks were the fourth.
In a sworn declaration, Mark Matias, manager of Enterprise’s Northern California area including Capitola from 1994 to 2004, said that before the accident, he was not aware the PT Cruiser was a recalled vehicle.
Furthermore, he said the Enterprise corporate philosophy was "you’ve got to keep booking, because you don’t know when you are going to get a car back. But then of course, you run short on vehicles, and if all you have are recalled vehicles on the lot, you rent them out. It was a given. The whole company did it."
His statement explained his understanding of the policy: If a priority recall appears on the computer screen in the rental office, the employee is required to write the word "recall" on a Post-it note and place it on the key in an area designated for non-rentals, but nothing prevents an employee from renting that vehicle.

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Budget Rent-A-Car Corp., FTC Consent Order, Docket No. C-3316 (December 27, 1990), File No. 882 3135 (Dec. 28, 1988), proposed 54 Fed. Reg. 35 (1989).

On December 27, 1990, the FTC and Budget-Rent-A-Car Corp. reached a consent agreement in which the company agreed to inspect and repair vehicles subject to recall notices within a reasonable period of time. The original complaint stemmed from Budget’s failure to disclose to prospective renters that it did not inspect and repair automobiles subject to recall notices.

Under the consent agreement, Budget will inspect and repair the vehicles within 120 days after receiving a recall notice. Alternatively, the order would require Budget to generally disclose to prospective renters that the vehicles are subject to safety recall notices and may contain defects, if it chooses not to inspect. This proposed consent order became final on February 26, 1991.