● Do I need a limited license to sell a supplemental liability insurance policy?
● Are dealer loaners covered by the Graves Amendment?
● Why has there been a recent increase in negligent entrustment lawsuits?
● Should an international driver’s permit be accepted as evidence of a valid license?
● Does economic loss need to be proven to recover for loss of use of a rental vehicle?
If you didn’t know the answers to these questions, chances are you knew who had them — Michael LaPlaca. LaPlaca, “the” auto rental industry’s lawyer, died in January. His passing leaves a hole in the industry. It removes a counselor to hundreds of auto rental operators, a trusted authority on auto rental law, a business adviser, an advocate for the industry, a voice of logic and reason and wisdom, a steady hand.
LaPlaca’s career was almost entirely devoted to the auto rental industry. He began at a time when auto rental essentially constituted business travel through airports. He helped shepherd the industry as it evolved into leisure travel and insurance replacement, then neighborhood rentals and new business models such as car sharing. “When I started in the business, only 5% of drivers had ever rented a car,” LaPlaca has said. “Now the percentage may well be reversed.”
LaPlaca was born and raised in the Washington, D.C. area. He landed a rare full-ride scholarship to Georgetown University in 1955, though after graduation he detoured into Army service that took him overseas to Korea. Fresh out of the Army in 1965, LaPlaca was recruited to join a startup car rental company, Valcar, which was going after a new business niche, the value-minded customer in the local market. Valcar was owned by Hertz, but Frank Olson, in charge of the D.C. area, couldn’t recruit from within Hertz for antitrust reasons.
“I interviewed Michael,” Olson recounts. “He was bright, enthusiastic and enjoyable to be with. I said to myself, this guy has talent.” LaPlaca joined Valcar’s sales force in D.C., and was later transferred to San Francisco.
“You always enjoyed being with Michael LaPlaca,” Olson continues. “He was the type of personality that you felt at ease with. And the customers felt the same way. He was a great asset.”
Hertz divested Valcar when the company was taken over by RCA in 1967. Olson was transferred back to Hertz corporate, on the path to becoming Hertz’s chairman and CEO for more than 20 years. And LaPlaca’s career was ready for a new direction as well.
LaPlaca stayed in San Francisco to get his law degree at the University of California/Hastings College of Law. Upon graduation, he rejoined Hertz and became national sales manager for the corporate office in New York. There he was part of the team that developed an automated rental system that would later become the Hertz #1 Club, which pioneered customer data capture that is omnipresent today.
Enjoying his sales job but not the heavy travel schedule, LaPlaca decided to put his law degree to work. He first joined a large law firm in D.C., and then teamed with Sol Edidin, former general counsel for Hertz Corp. and director of CATRALA (Car and Truck Rental and Leasing Association) to open a practice in 1976. Edidin mentored LaPlaca in franchise law, rental agreement drafting and compliance and rental insurance. Edidin died in the mid-1980s, and LaPlaca continued the practice. LaPlaca later gained expertise in motorcycle and recreational vehicle rentals.[PAGEBREAK]
An Industry Advocate
LaPlaca took on legislative advocacy as he grew the practice. He formed the Car Rental Coalition (CRC) with Bill McPike, a former attorney for Avis licensees. CRC was organized to fight federal legislation that would have forgiven renters of all responsibility for damage to rented vehicles.
LaPlaca served as the group’s executive director from 1989 to 1993. During this period, bills seeking to eliminate collision damage waivers (CDW) were introduced in three successive sessions of Congress. LaPlaca successfully orchestrated a grassroots campaign based on personal letters to Congress written by car rental business owners. Each bill was defeated.
Longtime Thrifty licensee Ken Elder remembers LaPlaca’s advocacy on a tax issue in Virginia, where car rental companies had to pay a Virginia titling tax on every car, plus a large personal property tax to the county. To avoid the tax, RACs were registering and housing cars in other states. LaPlaca helped Virginia CATRALA to develop legislation that changed the law from a personal property tax/titling tax to simple percentage of revenue paid to the state.
“The state and counties still got their money and it saved rental operations a lot of money and effort in ‘tax avoidance strategies,’” Elder says. “More importantly, it was the first time we learned that large and small companies could work together for the good of the industry, the consumer and the State of Virginia.” Similar grassroots efforts were taking hold through other state CATRALAs. “It is my belief that these efforts were the genesis of the national association that would become ACRA (American Car Rental Association),” Elder says.
A Trusted Adviser
LaPlaca’s relationships with his clients often spanned decades. In the 1980s, LaPlaca was named outside general counsel to the U-Save Auto Rental system, and through a stock purchase would later become part owner. His work with U-Save continued until his death.
In the 1980s he also served as counsel to FACT, an association of Hertz licensees.
LaPlaca worked with Rent-A-Wreck and Priceless Rent-A-Car for more than 30 years, and he attended every Rent-A-Wreck and Priceless convention for nearly 20. LaPlaca saw Rent-A-Wreck go through many changes and was instrumental in introducing past management to current ownership, as related by Jason Manelli of Rent-A-Wreck.
After many years of consulting to Payless Car Rental, he became that company’s general counsel in 2006.
A Written Legacy
The rental agreement is perhaps taken for granted by the renting public, but it’s of utmost importance to the rental company. LaPlaca’s work on rental agreements, as well as franchise agreements, is woven throughout each of the companies he worked for.
“Rental transactions are controlled by the rental agreement and Michael protected his clients when those rental agreements were executed,” says Sean Harrigan of PDP, an insurance provider specializing in dealer loaner programs.
“I think just about everyone’s rental agreement has some if not all of the language that he drafted,” says Rick Stevens, president of Payless.
The rental agreement is an ever-evolving document that needs to coincide with insurance law and other regulations in 50 states, taking into account a myriad of issues such as prohibitions of use and authorized drivers. “Each state handles CDW a little differently,” says Duane Heiman of Zurich, noting that if the contract didn’t have a certain size type or didn’t contain specific language, the rental agency couldn’t transfer coverage to the renter’s insurance carrier.[PAGEBREAK]
“He was always following the changes in the laws in the insurance and rental industries and bringing it all together to stay ahead of the curve,” Harrigan says.
His contract language was written to be specifically understandable by the lay person — he hated legalese — and at the same time precise to the meaning. “He wrote a damn good rental agreement,” says Noah Lehmann-Haupt of Gotham Dream Cars. “It was well designed. His work will outlive him in that sense.”
LaPlaca Law’s publications stand as another important legacy, and form the backbone of legal and regulatory compliance reference for vehicle rental companies large and small.
The Federal and State Guide to Vehicle Rental Law is a continually updated subscription service widely used by the rental industry. Launched in the 1990s, the State Guide is a comprehensive database containing laws, regulations and court decisions affecting day-to-day rental operations.
Web-based program Claims Involving Rented Vehicles is designed for use in accident and loss claims. LaPlaca Law also produces the LaPlaca Law Legislative Report, which tracks all state and federal legislation affecting the vehicle rental industry.
LaPlaca’s work can also be found in the many articles contributed to Auto Rental News (ARN), in which he apprised readers of pending legislation and regulations, court cases and legal trends to keep an eye on.
A Different Kind of Lawyer
“He was our attorney, but he was way more than that,” says Stevens of Payless, summing up the general sentiment of LaPlaca as not only a colleague but a friend. “I could always call him and he would solve problems and get me thinking in the right direction. It wasn’t always on legal matters; he was more of a trusted adviser, and really a mentor to me.”
“He was so friendly and so talkative and so willing to offer advice, I’d sometimes have to yell at him to send me a bill,” says Noah Lehmann-Haupt of Gotham Dream Cars. “He genuinely enjoyed this stuff.”
“I’d call him sometimes and get all fired up and I’d say we have to sue this guy,” Lehmann-Haupt continues. “And his response would almost always be, ‘that’s probably not the best course of action; why don’t you take this approach instead.’ He took a very non-litigious approach to the law, which is terrific.”
“He was not confrontational,” says Bonnie LaPlaca, his wife of 37 years. “He was a businessman’s businessman. His approach was to know the law and lay it out for his clients so they could come up with a business solution. He was the first one to tell them to take a deep breath before saying ‘I’ll sue him.’”
“He was a voice of reason,” says Bob Barton, president and COO of U-Save, and president of ACRA. “Michael could take the emotion and frustration out of a situation — whether it was a contentious subject matter, legislative issues or taxation — and still come up with a reasonable solution for everyone to move forward with.”[PAGEBREAK]
The office atmosphere balanced hard work for clients with philosophical legal discussions and just plain fun.
“We could spend hours discussing loss of use, the Graves Amendment and financial performance representations, and at the same time commiserate with each other on the seasons of his Redskins and my Cornhuskers,” says Leslie Pujo, who LaPlaca hired to his firm in 2008.
“We knew and cared about each other’s families, and I think that is the bottom line,” Pujo says. “We were more than colleagues or even friends — we were family.”
In a 2005 ARN article celebrating his career milestones, LaPlaca summed up his professional relationships, “I’ve learned a lot about life from the rental business,” he said. “I’ve met truly great people — good, honest people who like doing business with the public and having happy customers.”
LaPlaca not only attended every Car Rental Show since its inception, he spoke at almost all of them. Many attendees considered his annual legal and legislative seminars as the most important and informative function of the show.
At the 2011 Car Rental Show, LaPlaca was awarded the Russell Bruno trophy for outstanding service to the car rental industry. LaPlaca was introduced by Pujo.
“Michael became a tireless advocate for the industry as a whole, as well as for his individual clients,” she says. “On a personal note, I would like to say that Michael has been the best attorney and best mentor with whom I’ve ever worked.” Though the timeframe is unceremoniously abrupt, LaPlaca had planned for Pujo to succeed him.
During the awards presentation, LaPlaca chose to recognize the contributions of Russell Bruno, a colleague and friend. This modesty doesn’t surprise Bonnie, who says she has come to understand Michael’s place in the industry from others, not from Michael himself.
Frank Olson weighs in from another angle: “Michael was always certain of his position. If he thought he was right, he told you that he was right. That was one of his greatest assets. He wasn’t looking to get recognition; he was looking to get the right thing done.”
The Russell Bruno Award might have been a fitting cap to an illustrious career — had he any thoughts of hanging it up. “Michael was as well-spoken and well-versed as anyone at any age,” Lehmann-Haupt says. “The one thing that gives me and every other young person hope about growing older is that Michael did not slow down one bit.”
Bonnie concurs. “Michael loved to work and he wanted to work until his last day. He never wanted to retire. He would tell me ‘work is good.’ But it wasn’t about work for money. It was about helping people, doing for them, helping them. You get back from them their friendship and success stories. And that’s what made him happy.”
LaPlaca succeeded in his wish.
The Practice Continues
Leslie Pujo, who joined LaPlaca Law in 2008, is continuing the practice. Pujo is retaining Kristen Graf, who has worked with LaPlaca Law since May 2011. Pujo also reports that Michelle Daley and Tanja Hens will be joining her as “Of Counsel” this month.
Pujo’s team is continuing the LaPlaca Law guides: the Federal and State Guide to Vehicle Rental Law, Claims Involving Rented Vehicles and the LaPlaca Law Legislative Report. She expects to complete updates by the end of the first quarter or early second quarter.
Pujo focuses on two primary areas — vehicle rental law, including regulatory compliance and rental agreement drafting, and franchise law, including registration and disclosure matters, franchise relationship issues and structuring of franchise systems.
Before joining LaPlaca Law, Pujo was in-house franchise counsel at Choice Hotels International Inc. and an associate at Wiley Rein LLP in Washington, DC.
Previously, Pujo was an adjunct professor at the University of Maryland University College where she taught face-to-face and online classes in multinational management, business law and business ethics. Pujo is currently on the board of directors of MCCPTA Educational Programs Inc., a nonprofit organization providing enrichment programs in science, foreign languages and cultural arts to elementary and middle-school students.
Pujo has been a speaker on several occasions at the International Franchise Association Legal Symposium and also speaks regularly on vehicle rental issues.
Pujo received a J.D. with highest honors from George Washington University in 1995 and an advanced degree (with honors) in international law from the University of Toulouse, France in 1996.
For a blog and further thoughts on LaPlaca's passing, click here.