Court Grants Preliminary Approval of $46 Million Settlement in Class Action Against Citizens Automobile Finance
The U.S. District Court for the Northern District of California has ordered class notice to be sent out in cases consolidated under the title Citizens Automobile Finance, Rees-Levering Cases, Cases No. C 10-05345 JSW. The Honorable Jeffrey S. White conditionally certified a class of approximately 2,167 California consumers who meet the definition paraphrased as follows: persons who purchased a motor vehicle and as part of that transaction entered into an agreement subject to California's Rees-Levering Automobile Financing Act, whose contract was assigned to Citizens, whose vehicle was repossessed or voluntarily surrendered, who were issued an NOI by Citizens from May 20, 2005 to June 30, 2011, and whose account was assessed a deficiency balance.
This consumer class action challenges the post-repossession notices sent by Citizens Automobile Finance, Inc. or RBS Citizens, N.A. Plaintiffs and the class alleged the notices did not comply with the Rees-Levering Act, thereby banning Citizens 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. Citizens will cease all collection activity concerning those accounts. Citizens will contact the three major credit reporting agencies instructing them to delete the trade lines associated with these accounts. The total amount of outstanding deficiencies to be eliminated is about $46,786,977. The evidence in the case showed that Citizens has collected about $1,715,640 from class members. As part of this settlement, Citizens has agreed to refund about 85% of this amount.These sigificant and substantial benefits are automatic, without any claims process.
At the same time, Citizens expressly denies any wrongdoing and denies that its post-repossession notices are defective. Thus, the settlement is a compromise, intended to resolve the matter without the delay of protracted litigation.
In addition to Bryan Kemnitzer and Nancy Barron of the law firm Kemnitzer, Barron & Krieg LLP, the class was represented by Mark Chavez of the law firm Chavez & Gertler LLP, as well as attorneys Michael Lindsey and John Hanson.
Class notice will be mailed out on August 6, 2012. Final approval is scheduled for November and distribution should occur early next year subject to final approval by the court.