If you’ve rented a car from Hertz, there could be a warrant out for your arrest

Paula Murray wasn’t thinking about the car she’d rented from Hertz in 2016 when she walked into a State Police station in January of 2021 to finalize her new job as a dispatcher.

She’d filled out the paperwork for the required background check without hesitation. She’d even brought her grandchildren along to see her launch her new career.

Instead, the children watched their grandmother be handcuffed; arrested for allegedly stealing a car she’d in fact returned to Hertz five years earlier.

The job offer was gone and Murray spent the next three months trying to get answers from the car rental company, headquartered in Estero, Florida, before her charges were dismissed on March 30.

She’s now one of 230 plaintiffs suing Hertz for false arrest and in some cases prosecution. The lawyers for this cohort say they know there are more cases out there – warrants for arrest that people who rented from Hertz years ago don’t even know exist, like ticking time bombs waiting to explode their lives at any moment.

In recently unsealed court documents, Hertz admitted it files an average of 3,365 police reports about stolen vehicles involving its customers each year. That means over the past seven years since false theft report cases have been known to occur, theft charges have been levied against more than 23,000 people. How many of them were innocent paying customers is unknown.

DAILY MONEY NEWSLETTER: Money tips and advice delivered right to your inbox. Sign up here

FOOD RECALLS: How technology could alert you before you eat that tainted salad

“What we know is that 230 is not the majority. … It's the tip of the iceberg,” said Francis Alexander Malofiy, the lead attorney for the claimants, based in Pennsylvania.

“You're talking 20,000 people who were stuck in the criminal justice system because they had a dispute or an issue with their rental, or that (Hertz) couldn't find their car.”

Hertz responded to USA TODAY about this story with a statement that said, "Hertz cares deeply about our customers, and we successfully provide rental vehicles for tens of millions of travelers each year. Unfortunately, in the legal matters being discussed, the attorneys have a track record of making baseless claims that blatantly misrepresent the facts."

According to court documents, the current group of claimants has spent a total of 2,742 days in jail or prison because of false arrests. That’s more than seven years. They’ve endured a collective 3,600 months of prosecution. Some took plea deals, admitting to stealing cars they didn’t steal, just to make the ordeal stop.

Other cases are still pending, so those totals are evolving.

► Past coverage: Hertz accused of falsely reporting that customers stole rental cars

Hertz has described the suits as meritless and the accusations as baseless, vehemently defending itself in court documents and company statements.

Further, Hertz contends the vast majority of the customers involved in the suits failed to return their cars for "weeks past their due date," violating their rental agreements, despite the company's "repeated attempts to communicate with them about the status of the vehicle."

A hearing in a U.S. Bankruptcy Court in Delaware on Wednesday was described as pivotal for Hertz.

A ‘make-or-break’ day in court

On Wednesday, Judge Mary Walrath heard arguments from both sides on whether to allow 32 of the claimants to continue with their cases in bankruptcy court.

She agreed that 17 of them should have been notified about Hertz's bankruptcy claim deadline. Those cases now move forward along with about half of the 230 which were filed before that deadline and 14 that already cleared the hurdle of being "known creditors" by Hertz.

Walrath ruled 10 claims didn't meet the standard to be notified about the bankruptcy, but those cases are not thrown out, Malofiy said. The lawyers have additional arguments that could get those cases ruled back in.

Hertz's lawyers declined to proceed with rulings on another 77 claims during Wednesday's hearing so those will be decided at a later date.

When Hertz exited bankruptcy last June, the false arrest lawsuits stayed behind unresolved, as the company focused on re-establishing itself as a rental car leader. Collectively, the claims stand as the last big legal hurdle for the company to overcome, with customers seeking more than $500 million in damages combined.

► Hertz: Rental car company emerges from bankruptcy, with changes to board

►Bankruptcy: Judge approves Hertz's exit plan, describes it as 'remarkable'

The complainants are divided into groups, based on when they filed their claims in relation to Hertz's bankruptcy case. Two of those groups met the court deadlines for claims, so they won't be affected by the judge's decisions from this week's hearing, Malofiy said.

"The court may, however, articulate standards and give guidance that could apply to new claimants who come forward," he said.

Hertz’s lawyers argue any claims initiated after the deadlines should be dismissed.

In court documents, the company objects to the late claims for several reasons. Hertz contends the late claimants have failed to "identify any basis" for not meeting the court-approved deadlines, like the other accusers who came before them did.

But lawyers for the claimants, whose numbers continue to grow, say the company didn’t inform more recent victims about the bankruptcy case as legally required, so they can’t be tossed aside.

► A $750 car rental for three days?: Don't wait to book a rental car and other tips to avoid sticker shock

"Because Hertz did not tell the people … those customers who were falsely reported did not know they needed to file claims in the bankruptcy. Hertz is now, conveniently, claiming that because many claimants did not file by certain deadlines in the bankruptcy case that their claims should be barred as untimely," Malofiy said.

Despite national media coverage of the false arrests and lawsuits, many people remain unaware of the problem.

Hertz has refused to change its policies and practices, so new victims continue to come forward to this day, Malofiy said.

“This isn't an old Hertz issue. It's currently happening,” he said. “It's a continuing problem and needs to be addressed. It needs to stop.”

For example, he said, one claimant Brandy Porter got arrested and jailed this year on Jan. 4, with her child in the car, despite having paid for her Hertz car rental back in 2019.

Malofiy contends the problem is systemic for Hertz, which the company denies.

New Hertz arrests continue into 2022

Dustin Pollitt is living proof that the problem persists today. In fact, he said he lives in fear of arrest.

Pollitt, of Hellenwood in eastern Tennessee, was rear-ended in late January. His car insurance company, Progressive, rented a car for him to use while his vehicle was being repaired.

On Jan. 30, he had more bad luck. He needed to exchange that rental car at a local Hertz location because there was a nail in the tire. That exchange went smoothly.

But on Valentine’s Day, Pollitt hit a pothole that resulted in a flat tire on the second rental vehicle. He informed Progressive and headed to Hertz for another exchange, driving an hour and a half on the donut.

He’s still unclear what the issue was when he arrived at Hertz that day – if they couldn’t find his paperwork or something else. But he sat in the car for two and a half hours waiting to make a simple vehicle exchange. He had his 9-month-old son in the car.

He needed to get to a shift at work, so he left, deciding he’d replace the tire himself or work something else out with the insurance company.

“I get halfway home and I get a phone call from Progressive saying that the car has now been reported stolen,” Pollitt said. “They can't understand why Hertz has done it … but now Hertz won't even speak with them and they're placing them on hold and hanging up.”

Hertz sent a tow truck to the family’s farm the next day to take the car. The driver told Pollitt’s wife the same thing – that they were there to retrieve a stolen car and a warrant was issued for Pollitt.

He’s working with Malofiy to navigate the legal situation but hadn’t been arrested as of last week. He’s living in fear that a cop will knock on the door and take him to jail and that he won’t be able to get bail.

“If I go to jail now, I'm going to miss my son’s first steps, his first words his first birthday,” Pollitt said. “Over what? A mistake in a computer? That I’m not responsible for.”

A ‘systemic nationwide catastrophe’

The lawsuits against Hertz allege a pattern of missing inventory in which Hertz, instead of conducting internal investigations to locate vehicles or correct records, files police reports immediately and pushes the issue to the courts.

“They have a head office in Oklahoma City who's basically not doing any investigation at the local level when a car is lost, misplaced, can't be found,” Malofiy said. “It's reported as stolen and they shift the costs of their inventory control to the police and to the prosecutors, which in the end is a taxpayer-funded repo service.”

During a lawsuit in Philadelphia in 2017, before the Hertz bankruptcy, Hertz’s national vehicle control supervisor took the stand and admitted on cross-examination that police reports do not always contain accurate payment information, contacts with customers, and that Hertz does not correct or supplement reports that it knows are false or misleading.

“Hertz is on record as saying that even when they learn information (in police reports) is inaccurate, they refused to correct it because it would hurt their relationship with the police and the police will no longer take their false police reports,” Malofiy said.

Court records show that police at the Indianapolis and Louisville airports did just that. After multiple reports of stolen vehicles that ended up being located on Hertz's lots, those agencies reportedly said they wouldn't take new reports from the company.

USA TODAY first wrote about the Hertz police reports and lawsuits in 2020.

A day before Hertz Global Holdings, parent of The Hertz Corp., sought bankruptcy protection, the claimants' attorneys filed two lawsuits with similar allegations in Delaware and Pennsylvania.

Initially, the two civil actions had 26 plaintiffs. It ballooned from there.

It was that first story that led to a recent exoneration for Larry Wilcoxson, of Marco Island, Florida, who after spending time in jail and being labeled a felon for more than seven years, now joins the case against Hertz.

‘I had to kill all my dreams’

In 2014, in his mid-30s, Larry Wilcoxson felt his dream of serving as a Florida state representative was within reach.

He’d lost the District 80 race in 2010 but was confident about his chances four years later.

Wilcoxson had previously worked at the Hertz Naples airport location and had rented a car from there in late 2013, renewing his rental agreement each week by phone.

So when police arrived at his door in February of 2014 and accused him of stealing the rental car that was sitting in plain view in his driveway, he thought, clearly, there was a misunderstanding. He showed the officers his rental agreement. They too seemed perplexed and called Hertz.

A local employee said they couldn’t find any issue with the rental. But because there was a valid warrant, the police took Wilcoxson to jail where he was released on his own recognizance.

He prepared to go to trial assuming his evidence – including a rental agreement and bank statements where his debit card had been charged – would be sufficient to prove his innocence.

It wasn’t.

Hertz maintained through the trial that the company had no record of Wilcoxson’s rental.

“As if the payment was fraudulent and the paper was fraudulent? Like, come on man,” Wilcoxson said. “How can someone lose at trial when the evidence that is presented is far beyond a reasonable doubt?”

He was sentenced to two years probation in October of 2014, a few weeks before he’d expected to be watching election results with his name on them. He’d forgone the campaign to deal with the trial.

Now he was a convicted felon.

“I had to kill all my dreams of being a state representative,” he said.

Things got worse when a change of address led to Wilcoxson being arrested for a probation violation and sent to jail for 180 days.

During the trial, he’d been offered diversion if he just apologized for stealing the car. But he said his moral code would never allow pleading guilty to something he didn’t do.

“I'm going to go down standing up. I'm not going down kneeling,” Wilcoxson said.

After being released he spent years struggling with the embarrassment and collateral damage of being a convicted felon.

“Get a job in the state of Florida as a felon? You can forget about it,” he said.

Wilcoxson, now 43, had been burned by the system. But it wasn’t until he saw the story that ran in the Naples Daily News and USA TODAY years later that he realized he was far from the only one.

He took the story to his lawyer, connected with Malofiy, and set about getting a new trial.

On Jan. 6, 2022, the court vacated Wilcoxson’s conviction. He’s part of the plaintiff group in the bankruptcy case that will learn the fate of their civil cases today.

“Seven and three-quarter years later. … It’s a long time,” he said.

Wilcoxson currently works as a senior adviser for Rep. Byron Donalds, R-Naples.

One week car rental leads to arrest and eviction

Warrants related to Hertz rentals have followed people for years, and across state lines. Popping up when they’ve all but forgotten about that car they rented that one time. And long after it would be understandable to have discarded the rental paperwork.

October of last year marked 13 months since Jimmy Turpen rented and returned a car from the Hertz local in Southaven, Mississippi.

In that time, he moved to Arkansas, to the lakeside town of Greers Ferry, a popular area for retirees like Turpen.

He said he’d gotten up from a nap when five police cruisers pulled up outside his home.

“It sounded like they were taking my door down,” he said.

They handcuffed Turpen, who was still wearing a hospital bracelet from a recent stroke-related medical stay. They told him he was wanted in Mississippi and was being arrested on a felony warrant. They used the term “fugitive from the law.”

The 62-year-old, who worked as an electronics technician and custom-home builder, had never once been in trouble with the law. The officers didn’t tell him any more details about what the charge was; they simply took him to the county jail.

He told officers about his recent stroke and hospitalization for a brain bleed, and while in jail the stress of the situation caused a heart issue and Turpen blacked out. He was taken to a hospital and released from custody after five days due to his medical issues.

After hiring an attorney, he learned that the charge had to do with his September 2020 car rental. A warrant had been issued for him in July even though he returned the car at the end of the one-week rental period and paid $375.

In fact, Hertz had charged his card again without him noticing – a charge of nearly $4,000. The exact same amount was later reported to a collection agency as overdue to Hertz. Even more bizarre was the fact that Turpen had rented another car from Hertz, with no issues, while helping a friend move in early 2021.

The charge against Turpen is still pending in Mississippi and has upended his life in numerous ways.

He was evicted from his new place in Arkansas because the landlord and neighbors had watched him be led away in handcuffs. They didn’t want a felon in their retirement haven.

His possessions are in storage, which he’s paying for, while he stays with a friend. His credit is dinged, and he can’t get a loan to buy a home because the warrant comes up. He owns a company in Florida that he can’t go check on because he’s afraid to drive there and risk getting pulled over.

He’s actually driving a damaged car right now because someone hit his truck in a parking lot in January. Turpen said the responding officer pulled him aside about the warrant but took pity on him after hearing his story. The officer said he wouldn’t file a report about the accident so that he didn’t have to haul Turpen to jail. But he doesn’t have money to fix the car and was warned that any other officer who pulls him over might not be so understanding.

“I’ve been living out of a suitcase,” Turpen said. “I just cannot believe they get away with doing this.”

Judge says public has the right to know how many police reports Hertz files

Over the past month, Malofiy has claimed some victories in bankruptcy court, with rulings in his clients' favor.

A few weeks ago, Judge Walrath decided to let Malofiy appear in the case, although he doesn’t have a license to practice law in Delaware. That means he no longer has to rely on other attorneys to argue his points or to provide him with information as it unfolds.

Hertz protested his appearance, seeking to discredit him for past sanctions involving ethics violations in other states, including Pennsylvania and California.

"The court’s decision indicated that this case is going to focus on the merits, not on Hertz’s attempts to distract from its abysmal conduct," Malofiy said.

The judge also decided to allow one of his associates to appear in the case over Hertz's objections. That associate has no record of any sanctions or questionable behavior.

On Feb. 9, Hertz lost a motion to keep information about the volume of its stolen car reports under seal, or out of the public eye, arguing it would reveal trade secrets and might put the company at a competitive disadvantage – by giving its competitors information it doesn't have on them.

Attorneys for the claimants argued they should be able to share the information with their clients, to give them a better picture of what’s going on.

CBS News successfully intervened, contending the public had the right to know the information. The judge agreed, finding that the bankruptcy filing necessitated it.

In compliance with the judge's order, Hertz revealed that it reports about 3,365 of its customers each year to the police for "theft by conversion," after they don't return their cars on time.

“You know that's not the world-class experience that Hertz has committed to their customers," Malofiy said. “When you have this situation that's happening to so many people and so many people, primarily the black and brown community, it's something that you can't make that commitment to a world-class experience when you're sending your customers to jail.”

He points out that Hertz has the customers' credit card information on file, allowing the company to continue charging them, if they don’t turn in their car on time.

While the number of police reports every year may sound high, Hertz explained in a company statement that it handles more than 25 million rental transactions in the United States per year – and that .014% fall into the "rare situation where vehicles are reported to the authorities after exhaustive attempts to reach the customer."

Further, the company stated that it "cares deeply" about its customers, unlike the picture painted by the claimants and their attorneys.

As part of its reorganization, Hertz agreed to pay back all of its other creditors in full – who together were owed nearly $19 billion. Malofiy said he wants the same treatment for his clients.

Hertz filed for bankruptcy after the coronavirus pandemic brought travel to a virtual halt, delivering a devastating financial blow to the car rental business globally.

The company emerged from bankruptcy June 30, a few weeks after Walrath approved Hertz's plan of reorganization, paving the way for the 100-plus-year-old car rental company to make a comeback.

In addition to its namesake brand, Hertz operates the Dollar and Thrifty car rental services.

Now, the company has roughly 470,900 vehicles in its fleet. That's up from about 382,000 last year, but down from more than 686,000 in 2019 – before the pandemic hit.

Follow Katie Wedell on Twitter: @KatieWedell and Facebook: facebook.com/ByKatieWedell

Contact reporter Laura Layden at laura.layden@naplesnews.com or 239-253-8953.

This article originally appeared on USA TODAY: Hertz stolen cars lawsuit: Bankruptcy hearing to address false arrests