Advertising & Policy Committee of the Avis Rent a Car System v. Avis Rent a Car System

780 S.W.2d 391, 1989 WL 89856
CourtCourt of Appeals of Texas
DecidedAugust 10, 1989
DocketB14-88-738-CV
StatusPublished
Cited by12 cases

This text of 780 S.W.2d 391 (Advertising & Policy Committee of the Avis Rent a Car System v. Avis Rent a Car System) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Advertising & Policy Committee of the Avis Rent a Car System v. Avis Rent a Car System, 780 S.W.2d 391, 1989 WL 89856 (Tex. Ct. App. 1989).

Opinion

OPINION

ROBERTSON, Justice.

This companion case to our cause number B14-88-00413-CV, decided this day, concerns the resolution of those portions of the underlying suit severed upon the granting of summary judgment on the advertising issue. At the close of evidence the trial court granted an instructed verdict on the remaining declaratory relief sought and submitted questions to the jury on damages and attorney’s fees. Based on jury answers, the court rendered a take nothing judgment as to damages from breach of agreements, breach of fiduciary duties or fraud, but rendered judgment that Avis (defendants in the trial court) pay $5,250,-000 in attorney’s fees. Both sides have appealed — the A & P Committee and the trust contest the failure of the court to grant the requested declaratory relief and the failure of the jury to find damages while Avis contests its liability for attorney’s fees. We affirm the judgment except as to the award of attorney’s fees; as to that portion we modify the judgment to delete the attorney’s fees award.

The overall dispute arises over the terms of the license agreement (the Exclusive License Agreement, the contract or ELA) between Avis Rent A Car System, Inc. (Avis or licensor) on the one hand and its licensees (licensees), the Advertising and Policy Committee of the Avis Rent a Car System (the A & P Committee) and the Avis System Advertising Trust (the trust) on the other. The broad basis for the litigation is stated in the brief for the committee and the trust:

Since 1955, this relationship has been , governed by the terms of a standard form Exclusive License Agreement (the “ELA”), and by certain other agreements between the parties. The ELA grants the Licensees the right to use the Avis System in their passenger vehicle rental businesses and creates the Advertising and Policy Committee, a joint committee representing Avis and all of the Licensees. Through their elected representatives on this Committee, the Licensees have enjoyed considerable influence and a large measure of control over matters affecting the System as a whole. In July 1981, however, Avis advanced a new “interpretation” of the ELA that greatly limits the Licensees’ influence on the affairs of the System, and renounced other long-standing agreements with the Licensees.

At the time the ELA came into existence, an Advertising Trust was created. Large sums of money were generated from fees paid into the trust by both the licensees and Avis, the control of which was in the A & P Committee. When Avis ceased making payments to this fund in 1981, the A & P Committee and the trust filed this litigation contending, among other things, that Avis had breached its agreement, for which the committee sought monetary damages, declaratory relief and attorney’s fees. Because the terms of the ELA control, it is essential that certain of its provisions be summarized.

The preamble to the agreement recognizes that Avis is the exclusive owner of, and has the right to use and to license others to use, a plan or system for the business of renting vehicles. The plan or system consists of, among other things, “uniform methods of operation, accounting, advertising service and publicity.” One de *394 siring to obtain a license to use the system was required to enter into a standard contract, called Exclusive License Agreement, with Avis, which authorized the licensee to conduct a car rental business in a specific geographical area.

In Section 2, the licensee recognized Avis’ exclusive right to the system, and all parts thereof, including all advertising matter, and further agreed to conduct the business in accordance with the rules and regulations “as now constituted, or as the same may from time to time be changed or amended by licensor.” It was further “agreed that Licensor shall have the right to change the System and change or amend the methods, rules and regulations of said System upon giving notice thereof to licensee.”

_ In Section 3, the licensee agreed to pay a monthly administrative fee for each vehicle on its monthly report. Section 4 provided for a “National Advertising Program.” Each licensee agreed “to subscribe to the National Advertising Campaign which the Licensor and licensees may carry out and to contribute to the expense thereof.” The advertising fees which the licensee agreed to pay was a set amount for each vehicle contained in the monthly report. Avis was to collect the funds and account for them “as the Advertising and Policy Committee ... shall direct.” Section 4.3 provided that the expenditure of “these advertising funds shall be the complete responsibility of said Advertising and Policy Committee and shall be carried out only in such manner as shall be approved by said Committee.” The section authorized the A & P Committee to appoint trustees to manage such funds. In Section 4.4, Avis expressly reserved the right to stipulate the manner in which the name of Avis or the system was to be used in any advertising and “to disapprove any advertising in which such names may be used.”

Section 5 created the Advertising and Policy Committee. It was to be a 13 member joint committee representing Avis and the licensees — six members to be appointed by Avis and seven members elected by the system licensees. Section 5.2 charged the committee with “full responsibility for the Avis System National Advertising program as set forth in Section 4, above.” The committee was to serve “as a general policy committee for the Avis System” and Avis “agree[d] to call meetings of the Committee at least two times per year to consult with Licensor concerning System Policy.” The section further required the meetings and decisions of the committee to be reported to the licensees after each meeting. Section 5.3 required a quarterly financial report concerning the advertising funds to be filed with the committee and an annual certified financial report and its review by a committee of licensees.

Through Section 6, licensor convenanted, among other things “[T]o make available to Licensee the privilege of consulting with the appropriate personnel of Licensor upon the problems of advertising, promoting, operating, and developing the Licensee’s rent-a-car business.”

In Section 8, Avis expressly reserved the right to change “when and as it chooses,” the system or any part thereof, including procedures and standard rental agreements.

Section 11 wholly integrates the agreement by providing that “[Tjhis Agreement supercedes all prior agreements whether written or oral between the parties hereto and contains the entire agreement of the parties and no representations, inducements, promises or agreements, oral or otherwise, between the parties not embodied herein shall be of any force or effect.”

At the conclusion of the evidence the trial court instructed a verdict on the plea for declaratory relief concerning the construction of the ELA, ruling as a matter of law:

1. The Advertising and Policy Committee has the exclusive right and responsibility to conduct the Avis System National Advertising Program subject to Avis’ right to stipulate the manner in which the name “Avis” or the name of the System may be used in any such advertising and disapprove any advertising in which such names may be used, all as set out in the Declaratory Judgment and In *395

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Bluebook (online)
780 S.W.2d 391, 1989 WL 89856, Counsel Stack Legal Research, https://law.counselstack.com/opinion/advertising-policy-committee-of-the-avis-rent-a-car-system-v-avis-rent-a-texapp-1989.