California Repossession Law Blog

Ford Motor Credit Company (“FMCC”) has agreed to settle a consumer class action involving vehicle repossessions. Consumers alleged FMCC failed to provide post-repossession notices that comply with California law. Although it denies the allegations, FMCC will provide substantial relief to the 15,877 class members, including a promise to stop collection of approximately $110,810,774.38 in outstanding deficiency balances and to refund the full amount that class members have already paid on their deficiencies, if any.

Bryan Kemnitzer and Nancy Barron of San Francisco, along with co-counsel Alexander Trueblood of Los Angeles and Lilys McCoy of San Diego, represent the class.

On September 14, 2009, Judge William Cannon of the San Diego Superior Court preliminarily approved the settlement. Class Notice has been mailed to class members.

The case arose out of Timothy O’Neal’s purchase of a vehicle on July 21, 2004 from Perry Ford in National City, San Diego County. The dealer, Perry Ford, arranged financing for the purchase with FMCC. O’Neal eventually fell behind in his payments and the vehicle was repossessed in June 2006. Thereafter FMCC sent him a “notice of intent” to sell the vehicle. This post-repossession notice is sometimes referred to as an “NOI.” This NOI failed to provide O’Neal certain information that would enable him to know exactly what was owed (and to whom), and just what he had to do to reinstate or redeem the contract in time to avoid auction of his vehicle. He did not reinstate or redeem, and was subsequently charged a deficiency of $10,443.89, which is the difference between the wholesale price obtained for the vehicle after repossession and the debt FMCC claimed remained due. When O’Neal failed to pay that amount, FMCC sued him. At that point he sought legal counsel from us. We answered the complaint on O’Neal’s behalf and filed a class action cross-complaint on behalf of him and other California consumers who had received the similar post-repossession notices from FMCC. The cross-complaint pointed out a whole list of specific reasons the NOI did not comply with California law. FMCC continues to deny that its NOI notices violate the law. Nonetheless, FMCC changed its standard form NOI in California while this case was pending.

Under the terms of the proposed settlement in the lawsuit entitled Ford Motor Credit Company v O’Neal (San Diego Superior Court Case No. 37-2007-00077225-CL-CL-SC) the class will be defined as all persons: (1) who purchased a Motor Vehicle, and as part of that transaction entered into an agreement subject to California’s Rees-Levering Automobile Sales Finance Act, Civil Code §2981, et seq.; (2) whose contract was assigned to FMCC; (3) whose Motor Vehicle was repossessed or voluntarily surrendered;(4) who were issued an NOI by FMCC during the Class Period; (5) against whose account a deficiency balance was assessed in any amount; and (6) against whom FMCC has not obtained a judgment. The class does not include persons who have obtained a bankruptcy discharge of the alleged debt to FMCC, or persons who filed for bankruptcy, but whose cases are still pending in the bankruptcy court. The Class Period is from November 8, 2003 to September 7, 2008 (defined by the date the NOI was mailed).

A final hearing is currently scheduled for January 2010, after which time payment checks will be mailed. If you believe you are a member of this settlement class, but did not receive a Class Notice, please give us a call (415) 861-2265. Ask for legal assistant Sean Barry and identify the case.