Deployed Service Members to Receive $2.4 Million in Class Action Over Canceled Leases
The settlement comes in a yearslong case where one of two named plaintiffs, Walter Venneman, is himself an attorney, in addition to serving in the U.S. Army.
September 27, 2019 at 04:40 PM
5 minute read
A U.S. District Court judge has entered a final order approving a class action settlement of $2.4 million for 770 service members who sued BMW Financial Services, which buys vehicles from auto dealers to lease out.
The settlement comes in a yearslong case where one of two named plaintiffs, Walter Venneman, is himself an attorney, in addition to serving in the U.S. Army.
It includes $675,000 in attorney fees and approximately $55,000 in litigation costs for the plaintiffs in addition to the $2.4 million.
"The Court finds, upon review of the Settlement Agreement and consideration of the nine factors enunciated in Girsh v. Jepson, 521 F.2d 153, 157 (3d Cir. 1975), that the Settlement and the proposed payment distribution program provided for in the Settlement are fair, reasonable and adequate," said U.S. District Judge John Michael Vazquez of the District of New Jersey in the Sept. 25 order. "The Parties and their counsel are ordered to implement and to consummate the Settlement Agreement according to its terms and provisions."
In Venneman v. BMW FS, the plaintiffs alleged that California-based BMW FS wasn't complying with the law that protects service members who lease homes or autos by allowing them to cancel leases and surrender leased vehicles or property without penalty due to deployment.
That law, known as the Servicemembers Civil Relief Act, is a federal statute which provides that when a service member/soldier receives orders to go to combat or serve overseas, he or she is entitled to surrender a leased vehicle back to the manufacturer, as long as a proof of deployment notice is shown.
Section 535f of the act provides, "Rents or lease amounts paid in advance for a period after the effective date of the lease shall be refunded to the lessee by the lessor within 30 days of the effective date of the termination of the lease."
The plaintiffs won a summary judgment motion from U.S. District Judge Esther Salas on Dec. 30, 2013, in which the court entered an opinion holding that capitalized cost reduction is rent paid in advance that should be refunded, at least in part, when the vehicle is surrendered due to military orders.
The suit claimed that BMW FS didn't adhere to this practice of paying back portions of the capitalized cost reduction.
Over the last six years, the plaintiffs have been fighting to stop BMW FS from continuing this practice, according to Venneman, a senior trial counsel at Gill & Chamas in Woodbridge, who is also an Army Colonel and was named lead plaintiff in the case with Theodore Collins, a military service member.
The two first filed their complaint in 2009. Venneman claimed his issue arose when he was deployed to Afghanistan in 2008.
Under Vazquez's Sept. 25 order, the class consists of those who (a) terminated their motor vehicle leases from Jan. 1, 2004, until Aug, 23, 2011, pursuant to the Servicemembers Civil Relief Act, or any analogous state statute; (b) made a capitalized cost reduction payment in connection with their leases with BMW FS; and (c) did not receive a pro rota refund of their capitalized cost reduction payment.
"The Court finds that the Settlement Class meets all the applicable requirements of Rule 23 of the Federal Rules of Civil Procedure, affirms certification of the Settlement Class for settlement purposes, and approves the Settlement set forth in the Agreement as being fair, just reasonable, and adequate," wrote Vazquez.
BMW FS's co-counsel was Ryan DiClemente at Saul Ewing Arnstein & Lehr in Princeton. When reached, DiClemente said he had no comment.
Michael Hassen of Walnut Creek, California, who was co-counsel for BMW FS with DiClemente, said he, too, had no comment.
"It's an excellent settlement and we are very pleased with the results," said Michael J. DeBenectis of DeBenedictis & DeBenedictis in Haddonfield, Venneman's counsel, in a phone call. "I am very honored to have been able to assist Mr, Venneman and other members of the military that deserve this money. It's a 100% refund to them."
Venneman, also reached by phone, said he was "thrilled by the outcome."
Venneman said the settlement has been a decade in the making. "It's a fantastic result that has changed the auto industry and how it treats service members who turn in their cars to go serve their nation."
"I am honored to have participated in this case and very glad that so many service members in this class, and in other classes, will get refunds and get their hard-earned money back," added Venneman.
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