ANCHORAGE – Last Thursday, US District Judge Timothy M. Burgess issued an order for Avis Budget Car Rental LLC to pay Alaska Rent A Car $16 million in damages, following a jury verdict last October. In hearing the decision, Robert C. Halcro, a 54-year veteran franchisee said, “We couldn’t help but feel elated with the decision. After seven years of harassment and abuse, it was about time justice was served. We wish for a quick conclusion to this incredibly long unnecessary affair.” Halcro started his car rental business in 1955 in Valdez, Alaska.

Halcro’s legal battle began in 2002 when Cendant Corporation, then parent to the Avis car rental franchisor, acquired and continued to operate competitor Budget Rent A Car. He alleged that the acquisition violated all three of his franchise agreements.

Prior to the jury trial the judge had issued a decision on seven motions of summary judgment filed by both parties, granting in part and denying in part on certain motions. He resolved most claims in the franchisor’s favor, with the exception of count two. The judge stated that Cendant Rent A Car Group was unequivocally in breach of the agency settlement agreement, and ruled that Halcro’s franchised car rental agency was entitled to whatever damages it actually incurred as a result of the breach of the Agency Settlement—no more, no less."

Following the jury verdict, Halcro’s attorney Jeffrey M. Feldman, Feldman Orlansky & Sanders, stated that their expert witness testimony on damages had been critical in the case, that the jury accepted it and rejected the testimony of the defendant’s expert. John Dienelt, DLA Piper, representing the Cendant and Avis defendants, opposed that notion stating, "I disagree with Mr. Feldman's analysis, but I respect his right to be wrong."

Dienelt asserted in trial that the franchisee’s expert witness testimony’s damage calculations were unreliable because they were speculative, founded on flawed or incorrect assumptions, fail to consider the impact of other factors, and ignored any benefits to Alaska Rent-A-Car arising from the combined sales force of Avis and Budget. He further claimed that the expert’s report failed to satisfy the required relevancy and reliability standards for the admission of expert testimony established in case law and federal rules.

But the judge disagreed with Dienelt’s position that Halcro’s expert witness testimony was insufficient.  “The court, having heard the testimony and the evidence presented at trial, independently finds that there was sufficient evidence to support the jury’s verdict,” he stated.

Regarding Avis’ motion for a new trial, the judge declared that the court had no basis upon which to revisit its earlier ruling. And in Avis’ argument that the court erred with respect to instructing the jury, Judge Burgess also ruled against it.

Most interesting was the judge’s answer to Avis’ argument that there was no evidence to support the jury award of $16 million. He scolded, “If the jury erred, Avis invited this error.” Judge Burgess explained that while the court agrees that there is no direct evidence to support the award, the court had noted in Avis’ closing arguments that its counsel insisted the jury “should either award $16,000,000 or nothing.” Quoting from the case of Sovak v. Chugai Pharmaceutical the judge wrote, “One may not complain on review of errors below for which he is responsible.”

Attorney Feldman said the judge’s order was not a surprise to them or Mr. Halcro, but they were obviously pleased with the result. He said next the judge will rule on the parties applications for the award of costs and fees and prejudgment interest. “So at this point we don’t know what amounts the judge will put in for the judgment rendered in favor of the plaintiff or the judgment that was rendered in favor of the defendant on some dismissed claims.” Feldman said their position is that their client is entitled to an award of attorney’s fees under Alaska law and an award of prejudgment interest as well. But he adds, “The defendants are opposing that and the judge hasn’t ruled on that part of the case yet.”

Dienelt said Avis Budget Car Rental will appeal the judgment, that they have 30 days in which to file a notice of appeal and he suspects that will be done well within the 30 days.

Regarding the prejudgment interest awarded to the franchisee, Dienelt was not sure how it would be calculated. “Prejudgment interest goes up to the date of the judgment and because the order will go through the appellate process there is the possibility of post-judgment interest as well.” He said there are issues about whether New York law, Alaska law or federal law applies to pre- and post judgment interest. And the percentage rate differs from jurisdiction to jurisdiction. “It can be complicated,” he explained.

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Related Reading:

• Avis Franchisee Awarded $16 Million in Damages
• Legal Updates (Franchise Times Magazine: September, 2009)
• 50-year Avis franchisee continues battle with Cendant conglomerate ...