When Raechel and Jacqueline Houck were killed in a fiery head-on collision late one afternoon in October 2004, California state police blamed it on Raechel Houck, 24, the driver.
She had made an “unsafe turning maneuver,” they said. “It’s a very rural stretch and people can fall asleep or lose control easily or not pay attention.”
But in reality, a defective Chrysler PT Cruiser and a rental car company’s callous indifference to customer safety caused the tragedy.
Even though Enterprise Rent-A-Car had been notified more than a month earlier that the PT Cruiser was under recall, it rented the vehicle to the young sisters without fixing its lethal defect which is why it is important to check vehicle details before renting it out – a flaw in the power steering hose that allowed flammable power brake fluid to leak onto hot engine surfaces and burst into flames.
The Houck sisters’ violent deaths were the start of an incredible eleven-year saga that culminated in the congressional passage last December of a landmark law, the Raechel and Jacqueline Houck Safe Rental Car Act of 2015, banning rental car companies from keeping recalled vehicles in service without fixing their defects.
In his new book – Death by Rental Car: How The Houck Case Changed The Law – author Ben Kelley, gives a blow-by-blow account of Houck v. Enterprise, the parents’ hard-fought lawsuit against Enterprise.
Drawing from the testimony of experts and witnesses in the lawsuit, the book takes the reader inside the litigation, in which the rental car corporation, despite overwhelming evidence to the contrary, aggressively attempted to blame Raechel Houck for causing the crash.
But what caused the crash was the defect, which triggered an engine compartment fire. Smoke penetrated the passenger compartment, frightening Raechel and causing her to veer off the road and into the path of an oncoming tractor-trailer.
When Enterprise tried to settle the case by paying the parents $3 million dollars in return for their agreement to hide the facts of the crash and Enterprise’s role in causing it, the Houcks in rejecting the offer.
“The defect was a power steering hose that could fray against a structure and open up a hole and leak volatile fluid onto hot surfaces of the engine and start a fire and smoke that could invade the passenger compartment,” Kelley told Corporate Crime Reporter in an interview last week.
“It was 2004. The Houck girls had visited with their parents in Ojai. And they were going north to Santa Cruz, where they lived. They were driving north on 101, south of Monterey, when the defect kicked in. There was smoke and flame in the passenger compartment. Rachel lost control of the car, veered off the road and had a head on crash with an 18 wheeler coming in the other direction.”
“It was a separated highway, two lanes in each direction. They crossed the median and head on into the 18 wheeler. They died of traumatic blunt injury. The car was consumed by fire. They had rented the car from Enterprise.”
“The parents sued Chrysler, which had produced the car, and Enterprise, which had rented it to their daughters. There were settlement negotiations that went nowhere, but just before trial, Enterprise’s lawyers admitted negligence. Enterprise offered the family a $3 million settlement in exchange for a confidentiality agreement. The parents would not have a confidentiality agreement. They wanted to world to know about the rental car practices of putting out recalled defective cars. So the parents said no. But that meant that there would be a trial, but just on damages.”
Enterprise admits to negligence. The PT Cruiser by Chrysler was recalled to fix the defect about a month before the Houck accident. Why weren’t the Enterprise PT Cruisers fixed?
“Enterprise would never explain this,” Kelley said. “And much of the book is about Enterprise’s attempts to exculpate itself. The bottom line seemed to me was that their system just completely missed the recall. Much of the testimony suggested that Enterprise’s policy was that you rent out every car on the lot, whether it has been recalled or not. This policy, which was a profit driven policy, is what controlled this car.”
What about the case against Chrysler?
“By recalling the car, Chrysler had admitted that it was defective. The other issue was — did the defect cause the crash. Chrysler said that the defect didn’t cause the crash. Throughout the case, Enterprise and Chrysler insisted that it was the driver that caused the crash — that she had lost control and it had nothing to do with the defect. They said there was no fire — the flaw never happened in that car and she just lost control because she was a bad driver. They said that the big fire was caused by the collision — and it probably was. But in the time leading up to the collision, and leading up to her leaving the road, it took careful forensic and engineering testimony to find out that yes, actually the fuel line had been frayed and it had leaked. But Chrysler did eventually settle.”
What did Chrysler settle for?
“Chrysler offered $1 million to get out of the case. It was just before the bankruptcy. The attorneys for the Houcks advised the Houcks to take it because Chrysler wouldn’t exist in another few weeks. They accepted the settlement.”
“Chrysler sent the check to its local attorney in California. The attorney called the Houcks and said — we have a check. And then he had to call back a day later and said — Chrysler just cancelled the check. Chrysler had just declared bankruptcy. They put a stop payment order on the check.”
There was never any money from Chrysler?
“No.”
Their only hope at recovery was from Enterprise?
“Yes,” Kelley says. “It goes to trial on the damages. Enterprise had admitted negligence, so the trial was precluded from hearing any evidence of what actually had happened. The jury never heard about the crash, about the defects. They never heard any of that information. They simply knew that they were somehow negligent in the deaths of these two young women. That made it a puzzling case for the jury. Most of the trial was friends and family talking about the two girls. The decision would depend on what the loss meant to the parents. It was not an economic loss. It was a loss of comfort and companionship of their children. The trial went on for three days. And at the end of the trial, the jury brought in a verdict of $15 million against Enterprise.”
Did Enterprise pay that amount?
“Yes immediately. They didn’t appeal.”
The father worked for a Daimler Benz dealership for ten years. He was in the service department. Tell us what happened to him.
“After the lawsuit was filed, the father was called in by his boss. And boss was a close friend of the local Enterprise people — they had an office in that dealership. The father was called in and the boss said — either you drop this case against Chrysler and Enterprise or I will fire you. The father said — that’s outrageous. I’m not going to drop the case. So they fired him. There is a whole chapter in the book devoted to this.”
“The lawyers for the Houcks then brought a suit against the employer for wrongful discharge. And they fought that lawsuit all the way to the appeals court, but they lost. There had to be a public policy implication — and the court couldn’t find one. At that time, no one could discern a public policy implication of the case. Of course, it had tremendous public policy implications later on.”
“The mother – Cally – went on to campaign for state and federal laws to make sure rental companies fixed recalled cars. At the California level, the rental car companies opposed it and they beat it back. At the federal level, bills were introduced in the Senate, and those bills eventually made it into the omnibus transportation bill last year and was passed into law. The bill was called the Raechel and JacquelineHouck Rental Car Safety Bill of 2015. It passed in December 2015. And now rental car companies must fix a recalled vehicle.”
[For the complete q/a format Interview with Ben Kelley, see 30 Corporate Crime Reporter 13(12), March 28, 2016, print edition only.]