Posted On: July 25, 2012 by Nancy Barron

Federal Court Grants Preliminary Approval of Class Action in Baker v GEMB, et al

The U.S. District Court for the Northern District of California (Oakland) has issued an order of preliminary approval in the class action entitled Baker v GEMB Lending Inc., et al (Case No. C10-05261). Judge Saundra Brown Armstrong ordered class notice to be sent out to a class of approximately 2,304 California consumers.

The settlement class is composed of California consumers who entered into a conditional sale contract in California for the purchase of a motor vehicle (including an RV or motorhome) that was later repossessed or voluntarily surrendered, who were issued a post repossession notice by GEMB and/or Thor at any time from October 12, 2006 through February 1, 2012, whose conditional sale contract was owned by GEMB, Thor and/or E*Trade at the time the notice was sent and who were assessed a deficiency balance following sale of the vehicle. The class definition excludes certain judgment and bankruptcy debtors.

This consumer class action challenges post-repossession notices sent by or on behalf of GEMB Lending, Inc., Thor CC Inc, Thor Credit Corporation, E*Trade Financial Corporation, CCB Credit Services, Inc and certain affiliated companies. Plaintiffs and the class alleged the notices did not comply with the Rees-Levering Act, thereby banning defendants from collecting any deficiency debt claimed to be owing after the vehicles were sold at auction. The class members will have 100% of the debt extinguished. Defendants will cease all collection activity concerning those accounts, and will contact the three major credit reporting agencies to delete the associated trade lines. The total amount of outstanding deficiencies to be eliminated is about $44,705,357. In addition to complete elimination of the remaining deficiency debt of nearly $45 million, the defendants agree to refund about 64% of the amount and borrower already paid toward the deficiency. Lenders sometimes refer to the latter amount as "voluntary payments," and even such "voluntary payments" will get the benefit of the 64% refund in this settlement. There is no claims process. Class members automatically will get the benefits to which they are entitled.

At the same time, each defendant denies that its post-repossession notices are defective or that they did anyting else that was unlawful. Thus, the settlement is a compromise, intended to resolve the matter without the delay of further litigation.

Bryan Kemnitzer and Nancy Barron of the law firm Kemnitzer, Barron & Krieg LLP, and Alexander Trueblood of the Trueblood Law Firm have been named co-lead counsel in the case. Class notice will be mailed out within 30 days. If you believe you are a member of the class, look for the class notice in the mail; if you have moved or believe class notice might not reach you, contact class counsel.The final fairness hearing is scheduled for December and distribution should occur early next year, subject to final approval by the court.