12/7/2018Insurance Company Wants Nothing To Do With Toll Road Lawsuit
Navigators insurance asks federal judge to deny ATS compensation for its alleged ongoing deceptive practices related to rental car tolls.
Government agencies and private individuals are calling out what they say are the deceptive practices of rental car companies with respect to toll road usage fees. These "PlatePass" charges are a big moneymaker for photo enforcement provider American Traffic Solutions (ATS, now known as Verra Mobility). Florida's attorney general and the city of San Francisco have both accused Verra Mobility of misleading rental customers, and Navigators Insurance Companies wants nothing to do with defending these practices.
Not so fast, says ATS/Verra Mobility, which secured a $5 million policy from Navigators to protect company officers from liability. Navigators is asking a federal judge to rule that the insurance firm is not required to pick up the tab for the rapidly mounting legal bills ATS/Verra Mobility is racking up in the toll road lawsuits.
Nearly all of the major rental car companies have a deal with Verra Mobility (Dollar, Thrifty and Hertz, plus Avis, Budget, Enterprise, Advantage, Silvercar and Sixt have arrangements with Verra Mobility through a recent business acquisition). In Florida, for example, if a renter uses a toll road once, incurring a 25 cent toll, PlatePass will automatically bill him $10.49 per day for the entire length of the rental -- even if he does not drive on any other toll roads. Many consumers first learn about the fees when they notice an unexpected charge on their credit card statement.
To make its case, Navigators produced documents suggesting that Hertz agreed to pay for the defense of the PlatePass program. Hertz was the one with the duty to inform customers about the PlatePass charges, Navigators argued. Moreover, since ATS has been sued at least three other times on this very issue, Navigators believes further reimbursement does not fall under the terms of the insurance policy.
"All claims involving the same wrongful act or related wrongful acts of one or more insureds will be considered a single claim, and will be deemed to have been made on... the earliest date on which any such claim was first made," the insurance policy states.
The first lawsuit was filed in 2009, seven years before ATS hired Navigators. The cases were settled for over $11 million. The insurance firm argues that the alleged wrongful conduct involves the exact same people -- ATS and Hertz -- continuing the exact same business practices. As such, the claim for damages should have been made in 2009 against the photo ticketing firm's insurer at the time.
"The fact that the same wrongful business practices may give rise to claims by different claimants over time and different causes of action based on the laws of different states does not prevent these class actions from being 'related' under the clear terms of the Navigators policy," Navigators attorney Robert L. Sallander Jr wrote in a denial letter to ATS.