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Venneman v. BMW Financial Services NA, LLC

United States District Court, D. New Jersey

December 30, 2013

W. DANA VENNEMAN and THEODORE COLLINS, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
BMW FINANCIAL SERVICES NA, LLC and FINANCIAL SERVICES VEHICLE TRUST, Defendants

For W. DANA VENNEMAN, on behalf of himself and all other similarly situated, Plaintiff: MICHAEL JOHN DEBENEDICTIS, LEAD ATTORNEY, DEBENEDICTIS & DEBENEDICTIS LLC, Haddonfield, NJ; THOMAS T. BOOTH, JR., LEAD ATTORNEY, LAW OFFICES OF THOMAS T. BOOTH, JR., LLC, VOORHEES, NJ.

For BMW FINANCIAL SERVICES NA, LLC, FINANCIAL SERVICES VEHICLE TRUST, Defendants: RYAN L. DI CLEMENTE, LEAD ATTORNEY, Saul Ewing LLP, PRINCETON, NJ.

OPINION

Page 469

Esther Salas, United States District Judge.

Pending before this Court are the parties' cross motions for partial summary judgment. (D.E. Nos. 59, 60). The issue is whether the capitalized cost reduction payments (" CCR" ) paid by Plaintiffs W. Dana Venneman (" Venneman" ) and Theodore Collins (" Collins" ) (collectively, " Plaintiffs" ) at the inception of their automotive leases constitute rent paid in advance under the Servicemembers Civil Relief Act (" SCRA" ), codified at 50 U.S.C.A. App. § 535(f). Under Section 535(f), " [r]ents or lease amounts paid in advance for a period after the effective date of termination of the lease shall be refunded to the lessee by the lessor (or the lessor's assignee or the assignee's agent) within 30 days of the effective date of the termination of the lease." 50 U.S.C.A. App. § 535(f).

Plaintiffs contend tat the CCR is included within the protections afforded by Section 535(f). (D.E. No. 62, Plaintiffs' Brief in Opposition to Defendants' Motion for Partial Summary Judgment (" Pl. Opp. Br." ) 7). Therefore, since Plaintiffs believe that CCR is covered by Section 535(f), they argue that they should receive a pro-rated refund of the CCR based on the number of months left on the lease at the time of termination. ( Id. ). Defendants BMW Financial Services NA, LLC (" BMW FS" ) and Financial Services Vehicle Trust's (" FSVT" ) (collectively, " Defendants" ) contend that the CCR is not prepaid rent and, therefore, that none of it should be refunded. (D.E. No. 59, Defendants' Memorandum of Points and Authorities

Page 470

in Support of Motion for Partial Summary Judgment (" Def. Br." ) 25).

The Court has considered the submissions made in support of and in opposition to the instant motions, and heard oral argument, pursuant to Fed.R.Civ.P. 78. Based on the following reasons, Plaintiffs' motion for partial summary judgment is GRANTED in part [1] and Defendants' motion for partial summary judgment is DENIED.

I. PROCEDURAL HISTORY

On January 13, 2012, Plaintiffs and Defendants both filed motions for partial summary judgment on Plaintiffs' fifth cause of action for a declaratory judgment as to whether the CCR paid by Plaintiffs at the inception of their automotive leases is rent paid in advance under the SCRA. (D.E. Nos. 59, 60). The Court held oral argument on the partial summary judgment motions on August 2, 2012. (D.E. No. 102). Since the parties relied only on the original enactment of SCRA in 2003, the Court asked the parties to submit supplemental briefing in light of the congressional amendment made in 2010. (D.E. Nos. 108, 111, 114). Following supplemental briefing, the Court held another oral argument on December 6, 2012. (D.E. No. 130).

II. FACTUAL BACKGROUND[2]

Plaintiffs Venneman and Collins each entered into a lease with Defendant BMW FS. (D.E. No. 59-2, Def. 56.1 Statement ¶ ¶ 71, 82). On October 6, 2005, Venneman leased a used 2006 BMW 330i from De Simone BMW Ltd. ( Id. ¶ 71). Venneman's vehicle was valued at $42,336.24. ( Id. ¶ 77). Venneman paid $6,000 at closing. ( Id. ¶ 72). Seven hundred dollars was allocated to closing costs, and $5,289.88 was allocated to the CCR. ( Id. ). Venneman agreed to pay 36 monthly payments of $450.62 and could opt to purchase the vehicle at the conclusion of the lease for $26,800.20. ( Id. ¶ 73). In total, Venneman paid $5,289.88 (the CCR) to the dealer and Defendants paid $37,046.36 when Defendants assumed Venneman's lease. ( Id. ¶ ¶ 77, 78).

On February 27, 2008, Venneman was ordered to report for active duty and notified his lessor, BMW FS, that he elected to terminate his lease pursuant to Section 305 of the SCRA. ( Id. ¶ ¶ 87, 88). Venneman turned in his vehicle on March 5, 2008. ( Id. ¶ 91). On April 6, 2008, Venneman requested a partial refund of the CCR, claiming it was prepaid rent as defined by the SCRA. ( Id. ¶ 92). BMW FS denied his request, advising him that the CCR was a down payment, not prepaid rent. ( Id. ¶ 93).

On July 22, 2004, Collins leased a new BMW X5 3.0 from Thompson Automotive Group (" TAG" ). ( Id. ¶ 82). Collins paid $5,935 when he leased the vehicle, $4,600 of which TAG allocated to CCR. ( Id. ¶ 83). Collins traded in a 1995 Nissan Maxima that had a net trade-in allowance of $3,500 towards the amount due to TAG. ( Id. ¶ 84). Therefore, Collins was only required to submit $2,435 in cash at the closing. ( Id. ¶ 85). Collins agreed to pay 39 monthly payments of $499.00 and had the option to purchase the vehicle at the conclusion of his lease for $30,132.00. ( Id. ¶ 86). On September 24, 2004, Collins received orders

Page 471

to report to active duty and terminated his lease pursuant to the SCRA. ( Id. ¶ 89). Collins returned the vehicle on May 1, 2005. ( Id. ¶ 90). On May 1, 2005, Collins requested a pro rata refund of the CCR. ( Id. ¶ 94). BMW FS did not issue a refund. ( Id. ¶ 95).

III. LEGAL STANDARD

A court shall grant summary judgment under Rule 56(c) of the Federal Rules of Civil Procedure " if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). On a summary judgment motion, the moving party must show, first, that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the non-moving party to present evidence that a genuine issue of material fact compels a trial. Id. at 324. In so presenting, the non-moving party must offer specific facts that establish a genuine issue of material fact, not just " some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

Thus, the non-moving party may not rest upon the mere allegations or denials in its pleadings. See Celotex, 477 U.S. at 324. Further, the non-moving party cannot rely on unsupported assertions, bare allegations, or speculation to defeat summary judgment. See Ridgewood Bd. of Educ. v. N.E. ex rel. M.E., 172 F.3d 238, 252 (3d Cir. 1999). The Court must, however, consider all facts and their reasonable inferences in the light most favorable to the non-moving party. See Pa. Coal Ass'n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995).[3]

IV. DISCUSSION

a. Parties' Contentions


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