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Budget Rent-A-Car Systems Inc. v. Ricardo6/16/1997
OPINION OF THE COURT BY KLEIN, J.
This declaratory relief action arose out of a one-car accident that took place on Ahukini Road on the island of Kauai. Clemente Ricardo, driving a Ford Mustang that he had rented from Budget Rent-A-Car Systems collided with a telephone pole, resulting in injuries to the passenger, Robert Gates. Relying on language in its rental agreement with Ricardo that denies liability if the renter drives while under the influence of alcohol, Budget filed this action seeking a declaratory judgment that it had no obligation to defend or indemnify Ricardo for any claims arising out of the accident because he was drunk at the time. The trial court ruled in favor of Ricardo on public policy grounds and awarded attorney's fees and costs. We affirm in part and reverse in part.
I. BACKGROUND
Following the October 30, 1992, accident, Ricardo was given a blood test at Wilcox Memorial Hospital, which revealed a blood alcohol content of .24 percent. The back of the rental agreement signed by Ricardo contained, in paragraph 5 (B), the following restriction: "Vehicle will not be used or operated by anyone . . . while intoxicated or under the influence of any drugs or other substances which would impair driving ability; [.]" The rental agreement purported to deny liability coverage in case of violation of this and other use restrictions.
Gates filed a personal injury action against Ricardo and Legends Nightclub. Budget filed this Complaint for Declaratory Relief on April 15, 1994, against Ricardo and Gates, alleging that Ricardo was in violation of paragraph 5(B) of the rental agreement and was therefore not entitled to defense or indemnification by Budget against any claims arising out of the October 1992 accident. Motions for summary judgment were filed by both Budget and Ricardo. On June 29, 1995, the circuit court denied Budget's motion and granted Ricardo's. The court ruled that the intoxication use restriction in paragraph 5(B) was in violation of public policy and that Budget had a duty to defend and indemnify Ricardo.
Gates and Ricardo then requested and were awarded attorneys' fees and costs pursuant to Hawai'i Revised Statutes (HRS) §§ 431:10-242 and 431:10C-105 (1993). Budget's Motion for Leave to Amend Complaint was denied. Following entry of judgment, Budget brought this timely appeal.
II. Discussion
A. Standard of Review
Under the Hawai'i Rules of Civil Procedure (HRCP), summary judgment should be entered "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." HRCP Rule 56 (1993). The evidence should be viewed in the light most favorable to the non-moving party. Maguire v. Hilton Hotels Corp., 79 Haw. 110, 112, 899 P.2d 393, 395 (1995). On appeal, an order of summary judgment is reviewed de novo under the same standard. Harris v. Desoto, 80 Haw. 425, 431, 911 P.2d 60, 66 (1996).
B. A Self-Insured Car Rental Agency's Attempt To
Limit Its Liability Through An Intoxication Restriction
In Its Rental Agreement Violates Public Policy
Budget claims that it is not contractually obligated to defend or indemnify Ricardo because he was operating the vehicle while intoxicated, which is in violation of the express terms of Ricardo's rental agreement with Budget. On the back of the rental agreement signe
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