Aguiar v. Santander Consumer USA INC BA et al
Filing
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Judge George A. OToole, Jr: OPINION AND ORDER entered granting 14 Motion for Summary Judgment ( Copy of Opinion and Order mailed out to plaintiff). (Lyness, Paul)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 17-11349-GAO
DANIEL AGUIAR,
Plaintiff,
v.
SANTANDER CONSUMER USA INC., and CCAP AUTO LEASE LTD.,
Defendants.
OPINION AND ORDER
August 29, 2018
O’TOOLE, D.J.
The plaintiff, Daniel Aguiar, proceeding pro se, sued the defendants, Santander Consumer
USA Inc., and CCAP Auto Lease Ltd., after they repossessed Aguiar’s leased 2015 Dodge
Durango. Aguiar asserts claims of wrongful repossession in violation of his rights under
Massachusetts consumer protection laws and regulations. Massachusetts General Laws Chapter
93A, Section 9; (see Compl. ¶ 6 (dkt. no. 1)).
The defendants moved for summary judgment and filed a statement of undisputed material
facts on April 2, 2018. After Aguiar did not timely oppose the motion, on May 18 the Court by
order extended the time for his filing any opposition until June 1. (Order, May 18, 2018 (dkt. no.
17).) To date, Aguiar has neither opposed the defendants’ motion nor disputed the defendants’
statement of material facts. Accordingly, the Court is entitled to take “as uncontested all evidence
presented with” the defendants’ motion. Perez-Cordero v. Wal-Mart P.R., 440 F.3d 531, 533–34
(1st Cir. 2006). The following facts are thus derived from the defendants’ statement of undisputed
material facts and supporting documents.
On July 6, 2015, Aguiar entered into a Motor Vehicle Lease Agreement (the “Agreement”)
with Herb Chambers Chrysler to lease a 2015 Dodge Durango (the “Vehicle”). The lease called
for Aguiar to pay $6209.25 as a down payment, and to thereafter make thirty-six monthly
installment payments of $527.12. Aguiar’s total obligated payments under the Agreement
amounted to $25,053.45. The Agreement listed the Vehicle’s agreed upon value as $42,461.00,
and established its residual value (its value at the end of the lease term) as $22,368.50. The
Agreement contains a number of additional terms, including an option for Aguiar to purchase the
Vehicle for its residual value upon the lease’s expiration, a clause stipulating that late payments
constitute a default, and a clause allowing the lessor to take back the Vehicle upon the lessee’s
default. The Agreement was assigned to defendant CCAP Auto Lease Ltd. (”CCAP”), and serviced
by defendant Santander d/b/a Chrysler Capital on CCAP’s behalf.
From July 6 through March 1, 2016, Aguiar made eight payments of or about $527.12,
totaling $4216.96. His last payment satisfied a delinquency for a missed payment that was due the
previous month. He made no further payments under the lease.
On March 31, 2016, Aguiar filed a voluntary petition under Chapter 7 of the Bankruptcy
Code, In re Aguiar, Case No. 16-40534-CJP (Bankr. D. Mass. Mar. 31. 2016), and received a
discharge on March 9, 2017. The following June, the Vehicle was repossessed at Chrysler Capital’s
request without prior notice to Aguiar.
Summary judgment is properly awarded if “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits . . . show that there is no genuine
issue of material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.
R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Although “[i]n most cases, a
party’s failure to oppose summary judgment is fatal to its case,” Perez-Cordero, 440 F.3d at 534,
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a district court “is still bound to review the case on the merits based on the uncontroverted facts
before [it],” Cordi-Allen v. Halloran, 470 F.3d 25, 28 (1st Cir. 2006).
The defendants contend that they are entitled to summary judgment as a matter of law
because (1) the plaintiff defaulted under the Agreement, (2) they were entitled to repossess the
Vehicle due to the default, (3) they were not required to provide any notice to the plaintiff prior to
repossessing the Vehicle, and (4) the plaintiff failed to serve a written demand for relief on the
defendants prior to filing his Chapter 93A claim.
A.
Defendants’ Duty to Notify Aguiar of Default or Intent to Repossess
The defendants assert that they were lawfully permitted to repossess the Vehicle without
prior notice because the Agreement was a true lease, and under Massachusetts law a lessee “is not
entitled to notice of default or notice of enforcement from the other party to the lease agreement.”
Mass. Gen. Laws ch. 106, § 2A-502. Further, upon the lessee’s default, a lessor is entitled to “take
possession of goods previously delivered if the lease contract so provides.” Id. §§ 2A-523, 2A525.
As the defendants point out, Aguiar might have been entitled to pre-seizure notice if his
agreement to lease the Vehicle had been of a different legal type, such as a retail installment
contract subject to regulation under Massachusetts General Laws Chapter 255B. A defaulting
lessee in a retail installment contract is granted the right to receive written notice of default and an
opportunity to cure before a creditor may “proceed against the collateral.” Mass. Gen. Laws ch.
255B, § 20A; see Wilder v. Toyota Fin. Servs. Ams. Corp., 764 F. Supp. 2d 249, 256 (D. Mass.
2011). An automobile lease agreement may meet the definition of a motor vehicle retail installment
contract if (1) the total lease payments are substantially equivalent to or greater than the full value
of the vehicle, and (2) the lessee is bound to become, or has the option of becoming, owner of the
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vehicle after full compliance with lease terms at no cost or for a nominal price. Mass. Gen. Laws
ch. 255B, § 1; see Philibotte v. Nisourse Corp. Servs., Co., 793 F.3d 159, 165–66 (1st Cir.
2015); Saia v. Bay State Gas Co., 41 N.E.3d 1104, 1107–8 (Mass. App. Ct. 2015). Neither of those
circumstances is satisfied in Aguiar’s case.
The Agreement obligates Aguiar to make lease payments totaling approximately 57% of
the Vehicle’s agreed upon value, which is not “substantially equivalent” for the purposes of a retail
installments contract. See Philibotte, 793 F.3d 165–66. The Agreement also stipulates that Aguiar
must return the vehicle after the lease term expires unless he exercises the $22,368.50 purchase
option. The option purchase price is equal to the stipulated residual value at the time the option
would be exercised. An option to purchase for 100% of the Vehicle’s residual value cannot
constitute “nominal consideration” under the retail installment sale statute. See Saia, 41 N.E.3d at
1108 (holding that option purchase price of approximately 66.5% of item’s total price was not
nominal); Marine Midland Bank, NA v. Moran, No. 9274, 1994 WL 475336, at *3 (Mass. App.
Div. Aug. 23, 1994) (holding that option purchase price for 100% of vehicle’s estimated wholesale
value was not nominal).
Accordingly, no reasonable jury could find that the Agreement constituted a retail
installment contract and not a true lease. As a result, Aguiar was not entitled to notice by the
defendants before they repossessed the Vehicle, and therefore summary judgment for the
defendants is appropriate on Aguiar’s claim of unlawful repossession without prior notice.
B.
Effect of Aguiar’s Bankruptcy
Aguiar’s bankruptcy discharge did not cure his existing default, nor did it afford him the
right to cease lease payments and yet retain the Vehicle. If a debtor in a chapter 7 bankruptcy
wishes to continue possession under an unexpired lease, then the debtor must assume that lease; if
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a lease is assumed, then the lessee remains bound by the payment (and other) terms of the lease
agreement. See 11 U.S.C § 365(a); N.L.R.B v. Bildisco & Bildisco, 465 U.S. 513, 53–52 (1984).
If a debtor wishes to discharge his obligations under an unexpired lease, then the debtor must reject
that lease; if an unexpired lease is rejected, then the lease is breached, the “leased property is no
longer property of the estate,” and the automatic stay precluding a creditor’s action against the
leased property is terminated. 11 U.S.C. §§ 365(g), (p)(1); see 11 U.S.C. § 362(a). The bankruptcy
proceedings did not preclude the repossession of the Vehicle in the circumstance of continuing
default by the lessor as to his payment obligations. See In re Canning, 706 F.3d 64, 69 (1st Cir.
2013); In re Pratt, 462 F.3d 14, 17–18 (1st Cir. 2006); In re BankVest Capital Corp., 360 F.3d 291,
296 (1st Cir. 2004).
C.
Aguiar’s Chapter 93A Claim
Aguiar summarily mentions Massachusetts General Laws Chapter 93A. The defendants
point out that he failed to meet the procedural requirement of serving a demand letter prior to filing
a Chapter 93A claim. The demand letter provision in Chapter 93A, Section 9(3) “is not merely a
procedural nicety, but, rather, a prerequisite to suit.” See McKenna v. Wells Fargo Bank, N.A.,
693 F.3d 207, 217–18 (1st Cir. 2012). The undisputed record in this case indicates that no demand
letter was sent by Aguiar prior to his filing his complaint.
Independent of Aguiar’s procedural deficiency, he has also failed to provide any facts to
support a viable Chapter 93A claim. The undisputed facts of record indicate that Aguiar was in
default on the Agreement, that the defendants were entitled to repossess the Vehicle, and that
Aguiar was not entitled to notice of his default or of an intent to repossess prior to the Vehicle’s
repossession.
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For the reasons stated, the defendants’ Motion for Summary Judgment (dkt. no. 14) is
GRANTED. Judgment shall be entered in favor of the defendants.
It is SO ORDERED.
/s/ George A. O’Toole, Jr.
United States District Judge
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