## Facts

- United Truck Rental Equipment Leasing, Inc. (“United”) rented trucks to the public, including a 1987 one-half ton Toyota pickup.
- Kleenco Corp. (“Kleenco”), a commercial cleaning business, rented the pickup from United through its employee, who signed a written rental agreement on Kleenco’s behalf.
- The rental agreement included a “full responsibility” clause placing responsibility for loss or damage to the truck during the rental period on the renter.
- During the rental period, a Kleenco employee left the truck unattended and unlocked with the keys in the ignition, parked in an alley where it was accessible from the street.
- The truck was stolen and never recovered.
- United sued Kleenco for the loss of the truck. Kleenco counterclaimed, alleging United failed to disclose the truck lacked theft insurance and asserting theories including unfair trade practices and fraud.
- After a bench trial, the circuit court dismissed Kleenco’s counterclaim, found Kleenco liable under the rental agreement for the theft loss, and awarded United damages that included (a) the truck’s retail market value, (b) an appraisal charge, and (c) loss-of-use damages based on rental value for roughly a month.
- Kleenco appealed, challenging the use of retail (rather than wholesale) value, the award of loss-of-use damages without proof of lost net profits and without a proper time limit, and the admission of rebuttal testimony from a witness not listed before trial.

## Issues

1. Was Kleenco liable to United for the stolen truck under the rental agreement’s “full responsibility” clause when the theft occurred during Kleenco’s possession?
2. Did the trial court use the proper measure of property damages by awarding the truck’s retail market value rather than limiting damages to United’s wholesale acquisition cost?
3. May an owner recover loss-of-use damages when a vehicle is totally lost by theft, and if so, what proof is required as to the amount and the period of compensable loss of use?
4. Did the trial court abuse its discretion by allowing an unlisted rebuttal witness to testify?

## Decision

- The Intermediate Court of Appeals held Kleenco liable under the rental agreement for the loss of the truck.
- The court affirmed the trial court’s award of the truck’s retail market value (and related appraisal costs) as the measure of the truck’s value.
- The court agreed that loss-of-use damages can be available even when a vehicle is totally lost, but held United’s proof did not support the amount and period awarded.
- The court affirmed the judgment in part, reversed in part as to loss-of-use damages, and remanded for entry of judgment awarding only nominal loss-of-use damages.
- The court held the trial court did not abuse its discretion in permitting the unlisted rebuttal witness to testify.

## Legal Principles

- A vehicle rental creates a bailment for the mutual benefit of the parties, and the parties’ written agreement may allocate responsibility for loss, including theft, during the rental period.
- For permanent loss of personal property, damages are generally measured by the property’s fair market value at the time and place of loss; retail market value may be used even if the owner originally obtained the item at a discounted or fleet price.
- Loss-of-use damages may be recoverable even when a vehicle is totally destroyed or stolen, because the owner can still suffer compensable deprivation of use.
- Loss-of-use damages in total-loss cases are generally limited to the period reasonably necessary to obtain a replacement vehicle.
- Loss of use may be measured by reasonable rental value of a substitute vehicle or by provable lost profits, but the measures are alternatives and are not both awarded for the same deprivation.
- A claimant must present evidence supporting the duration and amount of loss-of-use damages; if the record does not support more than minimal harm, only nominal loss-of-use damages should be awarded.
- Admission of rebuttal testimony is reviewed for abuse of discretion, and allowing a rebuttal witness not listed before trial may be proper when the testimony responds to matters raised by the opposing party.

## Conclusion

The court held that Kleenco was responsible under the rental agreement for the theft loss of United’s truck and affirmed damages based on the truck’s retail market value, but it reversed the loss-of-use award because United did not adequately prove the amount and time period of compensable loss of use, remanding for entry of only nominal loss-of-use damages while otherwise affirming the judgment.


United Truck Rental Equipment Leasing, Inc. v. Kleenco Corp., 84 Hawai'i 86, 929 P.2d 99 (1996)