8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
1/32
Chapter 9 Automobile Lease Case
9.1 Complaint
CV 93 XXXXXXX
JON CONSUMER, on behalfof himself and all others similarly situated,[vs.]CREDIT AUTO LEASE, INC. and FRED'S MOTORS, INC.,
SUPERIOR COURTJUDICIAL DISTRICT AT NEW HAVEN
COMPLAINT
Jon Consumer ("Consumer"), suing on behalf of himself and all others similarly situated,
complains as follows against Credit Auto Lease, Inc. ("CAL") and Fred's Motors, Inc. ("FM"):
MATTERS COMMON TO ALL COUNTS
PARTIES
1. Consumer is an individual who resides at 100 Main Street, New Haven, Connecticut.
2. CAL is a corporation with its principal place of business in Chicago, Illinois. It is
engaged in the business of leasing vehicles and purchasing leases of vehicles.
3. FM is a corporation which operates a car dealership at Auto Row, New Haven
Connecticut. FM regularly leases vehicles.
PLAINTIFF'S TRANSACTION
4. On August 31, 1992, Consumer leased a 1993 Jeep Cherokee from FM and CAL. In
connection with the transaction, Consumer signed the combination lease/ disclosure statement
attached hereto asExhibit A [not reprinted infra]. The scheduled term of the lease was 60
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
2/32
2
months and the total contractual obligation was $24,757.20 plus $89 for registration of the
vehicle.
5. At the time he leased the vehicle, Consumer intended to keep it for the term of 60
months.
6.Exhibit A provides for early termination, both voluntarily at the instance of the lessee
and by the lessor for default.
7. According to the report of an investigation by the Attorney General of New York,
approximately 50-80% of automobile leases are terminated early.
8. The description of the provision for "liquidated damages" for default and early
termination on the printed form of lease represented byExhibit A is totally incomprehensible to
the average consumer. It requires multiple, totally unnecessary cross-references and knowledge
of technical accounting concepts, such as the "rules for journal entries for lessors as to direct
financing leases contained in Statement of Financial Accounting Standards No. 13," the
"depreciation and lease charge portions" of each payment, and how "lease charges" are "earned
by you on a constant yield basis in relation to the Adjusted Lease Balance as it declines during
the lease term," and the "rate which provides a constant yield throughout the lease term."
9. The leased vehicle had significant mechanical problems:
a. Windows leaking badly.
b. Misaligned window wiper.
c. Malfunctioning cruise control.
d. Loose metal parts found under the carpet.
e. Abnormal whining noises from under hood when engine was cold.
10. Consumer brought the vehicle back to FM for repairs several times. The problems
were not corrected.
11.Exhibit A purports to provide that the lessee must make all payments to CAL
notwithstanding problems with the leased vehicle. In paragraph G ofExhibit A, the lessee
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
3/32
3
purportedly "acknowledges that I am leasing the vehicle from you [CAL] [sq]as is' and that you
do not make any warranty or representation, either express or implied, as to the design,
compliance with specifications, operation or condition of, or as to the quality of the material,
equipment or workmanship in the vehicle or any of its components, and you specifically disclaim
any implied warranties including warranties of merchantability or fitness of the vehicle or any of
its components for any particular purpose."
12. Because Consumer was dissatisfied with the condition of the leased vehicle, he
terminated the lease early and returned the car, in April 1993.
13. CAL thereupon applied or purported to apply the early termination formula inExhibit
A to determine that Consumer owed CAL $8,878.23.
14. CAL sent ConsumerExhibit B, attached [not reprinted infra], reflecting this
purported liability.
DAMAGES
15. Consumer and each member of the class described below have been injured by the
collection and/or attempted collection of early termination and default charges, in one or more of
the following ways:
a. Injury to credit.
b. Expenditure of money, time and effort in resisting attempts by CAL to collect the
charges.
c. Creation of an unlawful and fictitious indebtedness, for which the consumer is
ostensibly liable.
d. Payment of the charges.
CLASS ALLEGATIONS16. Counts I and II of this action are brought on behalf of a class. The class consists of all
persons who satisfy the following criteria:
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
4/32
4
a. They signed an automobile lease with CAL written on a printed form containing
the same early termination and warranty provisions asExhibit A.
b. The lease shows a Connecticut address for the lessee.
c. The lease has the "consumer use" box checked or initialled.
d. The lease either (i) was terminated within three years next before the filing of this
action or (ii) is still outstanding.
17. Certification of a class under Conn. G.S. 86-90 is appropriate in that the class is so
numerous that joinder of all members is impracticable, there are questions of law or fact common
to the class, the claims of the representative party are typical of the claims of the class, and the
representative will fairly and adequately protect the interests of the class.
18. Alternatively, certification of a class under CUTPA, Conn. G.S., 42-110g-i is
appropriate, in that the questions of law or fact common to the members of the class predominate
over any questions affecting only individual members and a class action is superior to other
available methods for the fair and efficient adjudication of the controversy.
19. The class is so numerous that joinder of all members is impracticable. Consumer's
lease was entered into in 1992 on a printed form that contains a legend indicating that it was
issued in 1989. During the ensuing period, CAL undoubtedly entered into leases with numerous
persons. It is therefore reasonable to infer that the number of class members exceeds the 20-40
required for satisfaction of the numerosity requirement.
20. There are questions of law and fact common to the class, which questions
predominate over any questions affecting only individual class members. These questions
include:
a. Whether it is an unfair and deceptive trade practice to describe substantial
pecuniary obligations incurred by 50-80% of consumers entering into a
transaction in terms which are incomprehensible to the average consumer and then
enforce the terms against consumers.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
5/32
5
b. Whether the incomprehensible provisions are a lawful part of the contract
between Consumer and defendants.
c. Whether the warranty provisions of the CAL lease are lawful.
21. The claims and defenses of Consumer are typical of the claims and defenses of the
class members. All are based on the same factual and legal theories.
22. Consumer will fairly and adequately protect the interest of the class. He has a
substantial pecuniary stake in the controversy, and has retained experienced counsel.
23. CAL has acted in a uniform manner with respect to the entire class, by imposing
substantial pecuniary obligations through incomprehensible language and disclaiming warranty
responsibility with respect to all class members.
24. A class action is superior to other available methods for the fair and efficient
adjudication of this controversy.
25. Because CAL is a major financial institution and effective presentation of the cause of
action asserted requires expert testimony, the interest of members of the class in individually
controlling the prosecution or defense of separate actions is minimal.
26. Many class members are unaware of their rights. Typically, leasing companies
institute collection actions and secure default judgments against lessees for the charges in
question.
27. The difficulties likely to be encountered in the management of a class action are much
less than in the case of many types of action routinely certified, such as class actions for
securities fraud.
COUNT I -- CUTPA28. Consumer incorporates 1-27 by reference.
29. The early termination charges under an automobile lease are generally very
substantial, amounting to thousands of dollars.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
6/32
6
30. CAL engaged in unfair and deceptive acts and practices by:
a. Describing substantial pecuniary obligations in terms incomprehensible to the
average consumer.
b. Then attempting to collect the obligations charges from consumers.
c. Providing in its lease form that the consumer must make lease payments
irrespective of the condition of the leased vehicle.
31. CAL thereby violated the Connecticut Unfair Trade Practices Act ("CUTPA"),
Conn. G.S., 42-110b(a).
32. The violations complained of were committed for pecuniary gain, and with
knowledge of probable illegality. 33. A dispute exists between Consumer and the class
described below, on the one hand, and defendants, on the other, concerning the validity of these
charges.
WHEREFORE, the Court should enter judgment in favor of
Consumer and the class and against defendants granting the following relief:
a. Declaring that the inadequate disclosure of default/ early termination charges in the
form represented byExhibit A is an unlawful and unenforceable unfair trade practice, enjoining
the collection of default/ early termination charges from the class members, and requiring a
refund of all such charges that have been collected from the class members.
b. Awarding statutory and punitive damages in an amount sufficient to deter further
violations of law.
c. Attorney's fees, litigation expenses and costs.
d. Such other or further relief as the Court deems appropriate.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
7/32
7
COUNT II -- DECLARATORY RELIEF
34. Plaintiff incorporates 1-33.
35. Because the early termination charges are incomprehensible, they are not a valid
and effective part of the contract between plaintiff and the class members, on the one hand, and
defendants, on the other.
WHEREFORE, the Court should enter judgment in favor of
Consumer and the class and against defendants granting the following relief:
a. Declaring that the default/ early termination charges in the form represented byExhibit
A are not a valid part of the contract, enjoining the collection of default/ early termination
charges from the class members, and requiring a refund of all such charges that have been
collected from the class members.
b. Awarding statutory and punitive damages in an amount sufficient to deter further
violations of law.
c. Attorney's fees, litigation expenses and costs.
d. Such other or further relief as the Court deems appropriate.
COUNT III -- INDIVIDUAL BREACH OF WARRANTY CLAIM
36. Plaintiff incorporates 1-27.
37. The warranty provisions of Article 2 of the UCC apply to leases as contracts for
transactions in goods.
38. The warranty disclaimer inExhibit A is ineffective for the following reasons:
a. The contradictory and confusing language of the disclaimer makes it unclear
whether there is a manufacturer's express warranty.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
8/32
8
b. The disclaimer requires the lessee to make a legal judgment as to whether the
manufacturer's express warranties are assignable.
39. Because the leased vehicle could not be repaired, the leased vehicle was not
merchantable. By providing an unmerchantable vehicle, CAL and FM breached the implied
warranty of merchantability, in violation ofConn. G.S. 2-314.
WHEREFORE, Consumer requests that the Court enter judgment on his behalf and
against CAL and FM:
a. For appropriate damages.
b. For costs.
c. Granting such other and further relief as the Court deems appropriate.
COUNT IV -- INDIVIDUAL LEMON LAW CLAIM
40. Plaintiff incorporates 1-27.
41. Consumer was damaged as a result of the breach, in an amount equal to the lease
payments and early termination charges imposed in the lease.
WHEREFORE, Consumer requests that the Court enter judgment pursuant to the
Connecticut "New Automobile Warranties" law, Chapter 743b, Conn. G.S. 42-179(b),
commonly known as the "lemon law," and 42-184, on his behalf and against defendants:
a. For appropriate damages.
b. For costs.
c. For attorneys fees in accordance with Conn. Gen. Stat. 42-180.
d. Granting such other and further relief as the Court deems appropriate.
Attorney For Plaintiff
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
9/32
9
9.2 Discovery
CV 93 XXXXXXX
JON CONSUMER, on behalf of himself and all others similarly situated,
[vs.]
CREDIT AUTO LEASE, INC. and FRED'S MOTORS, INC.,
SUPERIOR COURT
JUDICIAL DISTRICT AT NEW HAVEN
December 24, 1993
PLAINTIFF'S FIRST DISCOVERY REQUEST
Plaintiff hereby requests,that defendants respond to the following interrogatories,
document request, and requests for admissions. Documents are to be produced at the offices of
plaintiff's counsel, Joanne S. Faulkner, 123 Avon Street, New Haven, Connecticut 06511.
Throughout this request:
A. Unless otherwise specified in a particular paragraph, the time period covered by this
request is November 22, 1990 to present.
B. "Early termination charges" include excess mileage charges, disposition charges, the
formula for rebating unearned lease charges, and any and all other charges payable upon the early
termination of a lease that are not payable if the lease is fully performed.
C. References to the form of lease attached asExhibit A to the complaint in this action
include any lease with the same text asExhibit A, irrespective of whether it contains the name
and logo of defendant, another firm, or no name and logo.
D. Exhibit A meansExhibit A to the complaint in this action.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
10/32
10
Other instructions and definitions to be used in making your response are attached as
Exhibit 1. If any paragraph of this request is believed to be ambiguous or unduly burdensome,
please contact the undersigned an effort will be made to remedy the problem.
If your response to any of the requests for admission is anything other than an unqualified
admission, please explain the basis for the denial.
If you are declining to produce any document or respond to any paragraph in whole or in
part because of a claim of privilege, please: (a) identify the subject matter, type (e.g. letter,
memorandum), date, and author of the privileged communication or information, all persons that
prepared or sent it, and all recipients or addressees; (b) identify each person to whom the contents
of each such communication or item of information have heretofore been disclosed, orally or in
writing; (c) state what privilege is claimed; and (d) state the basis upon which the privilege is
claimed.
If any document requested was, but no longer is, in your possession or subject to your
control, please state: (a) the date of its disposition; (b) the manner of its disposition (e.g., lost,
destroyed, transferred to a third party); and (c) an explanation of the circumstances surrounding
the disposition of the document.
I. REQUESTS FOR ADMISSION
1. Plaintiff, Jon Consumer ("Mr. Consumer"), is a resident of New Haven, Connecticut.
2. Defendant Fred's Motors, Inc. ("Fred's") is a Connecticut corporation.
3. Defendant Credit Auto Lease, Inc., ("CAL") is a foreign corporation which is
registered to do business and does business in Connecticut.
4. The regular business activities of Fred's includes selling and leasing automobiles.
5. The regular business activities of CAL includes leasing and offering to lease and
purchasing leases of motor vehicles.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
11/32
11
6. Many of Fred's and CAL's leases are made with natural persons who lease vehicles for
personal, family or household purposes.
7. The intended term of all Fred's and CAL's leases exceeds four months.
8. Fred's and CAL enter into vehicle leases where the total contractual obligation under
the lease is less than $25,000. 9. On August 31, 1992, Mr. Consumer signed a
"Closed End" Vehicle Lease Agreement with Fred's, covering a 1993 Jeep Cherokee. A true and
accurate copy of this document is attached to the complaint asExhibit A.
10. Mr. Consumer's lease (Exhibit A) was immediately assigned to CAL.
11. Mr. Consumer leased the 1993 Jeep Cherokee for purposes of personal
transportation.
12. Fred's and CAL received money from Mr. Consumer pursuant toExhibit A.
13. Exhibit A is a preprinted form which Fred's and CAL used in all automobile lease
transactions from November 22, 1990 to the present.
14. From November 22, 1990 to the present, AHMC issued new vehicle warranties on all
new Honda cars, whether leased or sold.
15. From November 22, 1990 to the present, it was Fred's and CAL's practice to lease
new vehicles "as is", except to the extent the vehicle is subject to the manufacturer's new vehicle
warranty, as to which Fred's assigned lessee all rights and remedies under that warranty, "to the
extent they are assignable." (Exhibit A, Paragraph G).
16. Fred's and CAL did not issue a new vehicle warranty on the new 1993 Jeep Cherokee
leased to Mr. Consumer on August 31, 1992.
17. CAL has permitted lessees whose leases are written on the form attached asExhibit A
to terminate their leases prior to the expiration of the scheduled term.
18. Mr. Consumer paid Fred's $951.62 upon entering into the lease attached asExhibit A.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
12/32
12
19. The standard manufacturer's warranty on a 1993 Jeep Cherokee did not require a
consumer purchaser to resort to a manufacturer's dispute resolution mechanism prior to enforcing
rights under the warranty.
26. Between November 22, 1990, and the present, CAL entered into and/or purchased
more than 50 automobile leases that (i) were (according) to the leases) entered into for personal,
family or household purposes, (ii) were entered into with natural persons in Connecticut, (iii)
were for a period of time exceeding four months, (iv) were for a total contractual obligation not
exceeding $25,000 and (v) were written on forms containing the same terms asExhibit A
(irrespective of what name or logo they contained).
27. Between November 22, 1990 and the present, CAL entered into and/or purchased
more than 500 automobile leases that (i) were (according to the leases) entered into for personal,
family or household purposes, (ii) were entered into with natural persons in Connecticut, (iii)
were for a period of time exceeding four months, (iv) were for a total contractual obligation not
exceeding $25,000 and (v) were written on forms containing the same terms asExhibit A
(irrespective of what name or logo they contained).
29. Between November 22, 1990 and the present, Fred's entered into more than 25
automobile leases that (i) were (according to the leases) entered into for personal, family or
household purposes, (ii) were entered into with natural persons, (iii) were for a period of time
exceeding four months, (iv) were for a total contractual obligation not exceeding $25,000 and (v)
were written on forms containing the same terms asExhibit A (irrespective of what name or logo
they contained).
30. Between November 22, 1990 and the present, Fred's entered into more than 50
automobile leases that (i) were (according to the leases) entered into for personal, family or
household purposes, (ii) were entered into with natural persons, (iii) were for a period of time
exceeding four months, (iv) were for a total contractual obligation not exceeding $25,000 and (v)
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
13/32
13
were written on forms containing the same terms asExhibit A (irrespective of what name or logo
they contained).
31. Between November 22, 1990 and the present, Fred's entered into more than 100
automobiles leases that (i) were (according to the leases) entered into for personal, family or
household purposes, (ii) were entered into with natural persons, (iii) were for a period of time
exceeding four months, (iv) were for a total contractual obligation not exceeding $25,000 and (v)
were written on forms containing the same terms asExhibit A (irrespective of what name or logo
they contained).
33. Fred's and CAL do not provide lessees, at the time they enter into leases containing
the same terms asExhibit A, with any document identifying the "lease charge portion" of each
payment or explaining how "lease charges" are "earned by you on a constant yield basis in
relation to the Adjusted Lease Balance as it declines during the lease term." (Exhibit A, Item D).
II. INTERROGATORIES
1. Identify each person involved in preparing or composing advertisements for Fred's.
2. Identify each person involved in preparing or composing advertisements for CAL
concerning vehicle leases.
3. State the name and address of each newspaper, magazine, radio, television and other
media outlet in which Fred's advertised, along with the dates or periods that advertisements were
run in each.
4. State whether any efforts were made, prior to or after the issuance of the form of
contract of whichExhibit A is an example, to estimate or quantify the financial impact of defaults
on the early termination of a consumer automobile lease, and if there were, describe the efforts
and identify each individual involved in the efforts.
5. State whether a computer is used by CAL to perform any functions relating to the
administration of automobile leases or to communications with lessees under such leases, and if
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
14/32
14
it is, describe each such function and how a computer is used to perform it and state when a
computer was first used to perform each such function and how that function was performed
previously.
6. Identify each form of motor vehicle lease contract used by CAL, its purpose, and its
period of use.
7. Identify each person who was involved in the decision to adopt the form of contract of
whichExhibit A is an example.
8. State whether any decision was made to cease using or modify the form of contract of
whichExhibit A is an example, and if it was, state when such decision we made, whether it was
implemented, and identify each person who was involved in the decision.
9. (a) State, broken down by Connecticut zip code, the number of automobile leases CAL
entered into and/or purchased. (b) State how many of the leases were on the form used inExhibit
A. (c) State how many of the leases in group (b) were entered into (according to the lease files )
for personal, family or household purposes, with natural persons, for a period of time exceeding
four months, and for a total contractual obligation not exceeding $25,000. (d) State how many
leases in groups (a), (b) and (c) had default or early termination charges assessed. (e) State how
many leases in groups (a), (b) and (c) were for new cars and how many of these lessees received
new vehicle warranties.
10. Describe in detail how Mr. Consumer's early termination liability was calculated. If a
formula was used, state the entire formula, define each term in the formula and give the value
used for each term when calculating Mr. Consumer's liability.
11. Identify each person (1) who was involved in the decision to use the formula used to
calculate Mr. Consumer's early termination liability, (2) who was involved in the calculation of
Mr. Consumer's early termination liability, and (3) who was involved in the calculation of early
termination liability for any other customer.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
15/32
15
12. State for each year from 1990 through 1993, the total amount that was assessed and
collected on account of default or early termination charges. explain in detail the reasons for any
difference between the two figures, including a statement of any amounts assessed on account of
early termination charges that were compromised.
13. State whether CAL has ever treated any of the following as part of the "any other
amounts owed arising from your failure to keep promises under this Lease" referred to in Item F
ofExhibit A: excess mileage charge; "excessive wear and tear". If so, explain the justification
for charging the lessee with such items when the realized value of the vehicle is used to
determine the lessees liability.
14. Identify each person who was involved in any decision to charge, alter, or stop
charging the "dealer conveyance" fee on motor vehicles sold or leased by Fred's, or to change the
amount or designation of such fees.
15. State whether a "dealer conveyance" fee was assessed and, if so, how the amount of
the "dealer conveyance fee" was determined.
16. State for each year from 1990 through 1993, the number of people that paid the
"dealer conveyance" fee to Fred's and the amount each person was charged.
17. Identify each expert whom you will or may call upon to give evidence in connection
with this case, including the subject matter of his expertise, his educational background including
academic degrees, employment history, and any other matters which you contend qualify him as
an expert, the substance of all facts and opinions to which he could testify if called as a witness, a
summary of the grounds for each such opinion.
III. REQUESTS FOR PRODUCTION OF DOCUMENTS
Please produce:
1. All advertisements, commercials, point of sale and other promotional materials for
leasing cars that Fred's ran, or participated in running. In the case of radio and television
commercials, produce the script and storyboards.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
16/32
16
2. All documents compiling or summarizing information relating to early termination or
default charges, on automobile leases.
3. All documents compiling or summarizing information relating to dealer conveyance
fees.
4. All documents which refer to dealer conveyance fees.
5. All documents compiling and summarizing information relating to the financial
impact on CAL of the early termination of automobile leases (either by default or voluntarily).
6. All documents describing practices or policies or procedures relating to the
compromise of amounts demanded by CAL procedures relating to the compromise of amounts
demanded by CAL on account of default or early termination charges, on automobile leases.
7. All form documents relating to vehicle leases which CAL supplies to dealers.
8. All manuals, memoranda, and other documents setting forth policies, practices and
procedures which CAL supplies to dealers.
9. All manuals which Fred's uses in its business which refer to leases and/or dealer
conveyance fees.
10. All documents relating to the use of computers to perform any functions relating to
automobile leases.
11. All documents relating to any complaint, claim, criticism or inquiry, by any person,
concerning Fred's and/or CAL's computation or method of computation of automobile lease
default or early termination charges, and taxes, including the pleadings in any other litigation
involving these subjects.
12. All documents relating to any complaint, claim, criticism or inquiry, by any person,
concerning dealer conveyance fees, including the pleadings in any other litigation involving that
subject.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
17/32
17
13. All documents relating to any complaint, claim, criticism or inquiry, by any person,
concerning defendants' disclosures of the terms of automobile leases, including the pleadings in
any other litigation involving these subjects.
14. Fred's and CAL's annual financial statements, annual reports and semiannual and
quarterly annual financial statements.
15. All documents relating to any judicial or administrative proceeding in which Fred's
and CAL were accused of any illegal or improper conduct relating to automobile leases.
16. All documents summarizing information on automobile leases that Fred's and CAL
entered into and/or purchased. Include only documents containing information relating to two or
more leases.
17. All documents summarizing information concerning the amounts CAL (i) assessed
and (ii) collected on account of early termination charges and default charges.
18. All documents describing or discussing CAL's policies, practices or standards for
compromising amounts assessed on account of default or early termination charges.
19. All documents which describe or discuss the impact which excess mileage has on the
value of a car.
20. All documents relating to the payment to salesmen or other employees of Fred's of
any part of the "dealer conveyance" fees, or of compensation based on "dealer conveyance" fees
generated.
21. All documents showing the posting of amounts collected on account of "dealer
conveyance" fees on Fred's books and records.
22. All insurance policies that may afford coverage with respect to the matters
complained of. (Alternatively, you may state the name and address of the insurer, the policy
limits per claim, occurrence and aggregate, and the policy language relevant to how a claim or
occurrence is defined in the event of a class action or other multiple person claim).
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
18/32
18
23. All budgets, forecasts, projections and other planning documents which describe,
discuss, mention, or otherwise relate to early termination charges or default charges or dealer
conveyance charges.
24. Sufficient documents to identify the location and program for any computer system
which CAL uses to address mailing labels or otherwise communicate with its lessees.
25. All warranties applicable to the motor vehicle leased by Mr. Consumer on August 31,
1992.
26. All documents that discuss, describe, refer to and/or relate to new vehicle warranties
on new cars leased by Fred's and CAL.
27. All documents that discuss, describe, refer to and/or relate to formula(s) and/or
method(s) for determining the amount or method of determining the amount of any penalty or
other charge for delinquency, default, or late payments on leases.
28. All documents which disclose or explain to one or more lessees how "lease charges
will be earned . . . on a constant yield basis in relation to the Adjusted Lease Balance" as it
declines during the Lease Term". (Exhibit A, Item D).
29. All documents which describe, discuss or explain the manner of computing or
determining the number to be inserted in the blanks alongside the following items ofExhibit A:
(a) "Sales Tax" (Item 3D), (b) "Estimated Personal Property/Excise/Other Tax" (Item 2E, 4C), (c)
"Estimated Sales Taxes During Lease term" (Item 4a) and (d) "Estimated Personal Property,
Excise, or Other Taxes During Lease Term" (Item 4c).
30. All documents which describe, discuss or explain to one or more lessees the
difference between the "Sales Tax" (Exhibit A, Item 3D) and the "Estimated Personal Property,
Excise, or Other Taxes During Lease term (if applicable)" under the "Estimated Official Fees and
Taxes" (Exhibit A, Item 4c), as well as their respective effect on the price or cost of the leased
vehicle, or on any other charge or fee to the lessee.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
19/32
19
31. All documents which disclose or explain to one or more lessees "the rules for journal
entries for lessors as to "Direct Financing Leases" set forth in "Financial Accounting Standards
Board Rule 13". (Exhibit A, Item D).
32. All documents describing Fred's and CAL's policies, practices or procedures for
disposing of leased vehicles returned by or taken from lessees.
33. One example of each form of automobile lease that Fred's and CAL made, used or
purchased, other than that of whichExhibit A is an example.
34. All documents which describe or discuss the ability of consumers to understand the
disclosures made in automobile lease forms.
35. All manuals and other documents that CAL provided to other companies (including
but not limited to dealers) to inform, instruct or advise them how to fill out automobile lease
forms or how to determine the amounts to be inserted in such forms.
36. All documents relating to Mr. Consumer, or which are indexed, filed or retrievable
under his name or any number, symbol, designation or code (such as a lease number of Social
Security number) assigned to him or his transaction.
37. All documents or communications concerning default or early termination charges,
dealer conveyance fees, taxes, and warranties between Fred's or CAL and any regulatory or law
enforcement or consumer protection agency (including any state Attorney General's office), the
Federal Trade Commission, the Better Business Bureau, or other public or private agency which
receives consumer complaints.
38. All documents concerning complaints form lessees or other persons concerning
default or early termination charges, dealer conveyance fees, or taxes,including claims in judicial
proceedings, correspondence, and any other documents expressing dissatisfaction with such
charges.
39. All documents discussing the default or early termination charges, dealer conveyance
fees, and taxes charged by companies other than Fred's and CAL.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
20/32
20
40. All arrangements between Fred's and CAL.
41. All documents provided to or obtained by any expert who will or may be called to
testify in this case.
42. All documents relied upon by any expert, who will or may be called to testify in this
case, as a basis for each of his or her opinions.
THE PLAINTIFF
BY
Attorney for the Plaintiff
9.3 Class Certification Motion
CV 93 XXXXXXX
JON CONSUMER, on behalf of himself and all others similarly situated,
[vs.]
CREDIT AUTO LEASE, INC. and FRED'S MOTORS, INC.,
SUPERIOR COURT
JUDICIAL DISTRICT AT NEW HAVEN
January 28, 1994
PLAINTIFF'S MOTION FOR CLASS CERTIFICATION
Plaintiff respectfully requests, pursuant to Connecticut Practice Book 86-90 that the
Court certify a class, with respect to Counts I and II, consisting of all persons:
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
21/32
21
(i) who signed leases with CAL written on a printed form containing the same early
termination and warranty provisions asExhibit A,
(ii) where the lease shows a Connecticut address for the lessee,
(iii) where the lease has the "consumer use" box checked or initialled, and
(iv) where the lease either was terminated after three years next before the filing of
this action or is still outstanding.
In support of this motion, plaintiff states:
1. The class is so numerous that joinder of all
members is impractical. New Haven personal property tax records indicate there are over 70 cars
in that city alone on which CAL is liable for personal property taxes. Declaration of Joanne
Faulkner,Exhibit B.
2. There are questions of law and fact common to the class, which common issues
predominate over any issues involving only individual class members. The principal issues are:
3. Whether it is an unfair and deceptive trade practice, in violation of CUTPA, Conn.
G.S., 42-110a et. seq. to describe substantial pecuniary obligations incurred by 50-80% of
consumers entering into a transaction in terms which are incomprehensible to the average
consumer and then enforce the terms against consumers.
4. Whether the incomprehensible provisions are a lawful part of the contract between
Consumer and defendants.
5. Whether the warranty provisions of the CAL lease violate CUTPA, 42-110b(a).
6. Mr. Consumer's claims are typical of those of the class members. All are based on the
same facts and legal theories.
7. Mr. Consumer will fairly and adequately protect the interests of the class. He has
retained counsel experienced in handling class actions and actions involving unlawful business
practices. Declarations setting forth counsels' qualifications are inExhibit B. Neither Mr.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
22/32
22
Consumer nor his counsel have any interests which might cause them not to vigorously pursue
this action.
8. Certification of the class under Connecticut Practice Book 88 is appropriate in that:
9. The questions of law or fact common to the members of the class predominate over any
questions affecting only individual member.
10. A class action is superior to other available methods for the fair and efficient
adjudication of the controversy.
Respectfully submitted,
Attorney For Plaintiff
9.4 Memorandum In Support of Class Certification
CV 93 XXXXXXX
JON CONSUMER, on behalf of himself and all others similarly situated,
[vs.]
CREDIT AUTO LEASE, INC. and FRED'S MOTORS, INC.,
SUPERIOR COURT
JUDICIAL DISTRICT AT NEW HAVEN
January 28, 1994
CV 93 0529101
MEMORANDUM IN SUPPORT OF
PLAINTIFF'S MOTION FOR CLASS CERTIFICATION
Plaintiff has requested that the Court certify a class, pursuant to Connecticut Practice
Book 88. This memorandum is submitted in support of that motion.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
23/32
23
I.NATURE OF THE CASE
Plaintiff complains that defendants use a standard printed form automobile lease that
imposes substantial early termination charges in language which is totally incomprehensible to a
lay consumer. This is the same type of claim involved inLundquist v. Security Pacific
Automotive Financial Services Corp., Civ. No. 5:91-754 (TGFD) (D.Conn.), aff'd, 993 F.2d 11
(2d Cir. 1993), reh'genbancdenied, cert.deniedU.S. (1993). Indeed, defendant's lease
disclosures are very similar to those held unlawful inLundquist. Count I alleges that the lease
fails to comply with the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn.Gen.Stat.
42-110a et seq., while Count II alleges that because the early termination charges are
incomprehensible, they are not a valid and effective part of the contract between plaintiff and the
class members, on the one hand, and defendants on the other.
II. STANDARD FOR CLASS CERTIFICATION
In determining whether a class will be certified, the merits of the case are not examined
and the substantive allegations of the complaint should be taken as true. Blackie v. Barrack, 524
F.2d 891, 901 n. 16 (9th Cir. 1975);Heastie v. Community Bank of Greater Peoria, 125 F.R.D.
669, 671 n. 2 (N.D.Ill. 1989);Riordan v. Smith Barney, 113 F.R.D. 60, 62 (N.D.Ill. 1986);In re
Energy Systems Equipment Leasing Securities Litigation, 642 F.Supp. 718, 724 (E.D.N.Y. 1986).
Moreover, the Court should resolve any doubt regarding the propriety of certification in favor of
allowing the class action, so that it will remain an effective vehicle for deterring corporate
wrongdoing. In re Folding Cartons Antitrust Litigation, 75 F.R.D. 727, 733 (N.D.Ill. 1977).
Class actions are essential to enforce laws protecting consumers. As the Illinois
Appellate Court stated inEshaghi v. Hanley Dawson Cadillac Co., 214 Ill.App.3d 995, 574
N.E.2d 760 (1st Dist. 1991):
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
24/32
24
In a large and impersonal society, class actions are often the last barricade of
consumer protection. . . . To consumerists, the consumer class action is an
inviting procedural device to cope with frauds causing small damages to large
groups. The slight loss to the individual, when aggregated in the coffers of the
wrongdoer, results in gains which are both handsome and tempting. The
alternatives to the class action -- private suits or governmental actions -- have
been so often found wanting in controlling consumer frauds that not even the
ardent critics of class actions seriously contend that they are truly effective. The
consumer class action, when brought by those who have no other avenue of legal
redress, provides restitution to the injured, and deterrence of the wrongdoer. (574
N.E.2d at 764, 766)
III. THE PROPOSED CLASS MEETS THE REQUIREMENTS FOR CERTIFICATION
Under Connecticut Practice Book 87 "[o]ne or more members of a class may sue or be
sued as representative parties on behalf of all only if":
(1) the class is so numerous that joinder of all members is impracticable,
(2) there are questions of law or fact common to the class,
(3) the claims or defenses of the representative parties are typical of the claims ordefenses of the class, and
(4) the representative parties will fairly and adequately protect the interests of theclass.
Under Connecticut Practice Book 88 an action that satisfies these requirements may be
maintained as a class action if:
the court finds that the questions of law or fact common to the members of the
class predominate over any questions affecting only individual members, and that
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
25/32
25
a class action is superior to other available methods for the fair and efficient
adjudication of the controversy.
The matters pertinent to the findings include:
(1) the interest of members of the class in individually controlling the prosecution or
defense of separate actions;
(2) the extent and nature of any litigation concerning the controversy already
commenced by or against members of the class;
(3) the desirability or undesirability of concentrating the litigation of the claims in the
particular forum;
(4) the difficulties likely to be encountered in the management of a class action.
We will discuss each requirement in turn.
A. 87(1) -- Numerosity
Connecticut Practice Book 87 requires that the class be "so numerous that joinder of all
members is impracticable." "When the class is large, numbers alone are dispositive . . . ."
Riordan v. Smith Barney, 113 F.R.D. 60, 62 (N.D.Ill. 1986). Where the class numbers at least
40, joinder is generally considered impracticable. Swanson v. American Consumer Industries,
415 F.2d 1326, 1333 (7th Cir. 1969) (40 sufficient); Cypress v. Newport News General &
Nonsectarian Hospital Ass'n, 375 F.2d 648, 653 (4th Cir. 1967) (18 sufficient);Riordan v. Smith
Barney, 113 F.R.D. 60 (N.D.Ill. 1986) (10-29 sufficient); Sala v. National Railroad Passenger
Corp., 120 F.R.D. 494, 497 (E.D.Pa. 1988) (40-50 sufficient). It is not necessary that the precise
number of class members be known.McCleery Tire Service, Inc. v. Texaco, Inc., 1975-2 Trade
Cas. (CCH) 60,581 (E.D.Pa. 1975). "A class action may proceed upon estimates as to the size
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
26/32
26
of the proposed class." In re Alcoholic Beverages Litigation, 95 F.R.D. 321 (E.D.N.Y. 1982);
Lewis v. Gross, 663 F.Supp. 1164, 1169 (E.D.N.Y. 1986).
Attorney Joanne Faulkner examined the New Haven personal property tax records and
found over 70 cars in that city alone on which CAL was liable for personal property taxes.
Exhibit B.
B. 87(2) -- Commonality
Connecticut Practice Book 87 requires that there be a common question of law orfact.
The commonality requirement is satisfied if there are common questions linking the class
members which are substantially related to the outcome of the litigation. Jordan v. County of
Los Angeles, 669 F.2d 1311, 1320 (9th Cir. 1982);Blackie v. Barrack, 524 F.2d at 910; Crowley
v. Banking Center, 1992 Conn. Super. LEXIS 704 (Conn.Super. 1992) Not all factual or legal
questions raised in the litigation need be common so long as at least one issue is common to all
class members. Spencer v. Central States Pension Fund, 778 F.Supp. 985, 989 n.2 (N.D.Ill.
1991). Where a question of law involves "standardized conduct of the defendants toward
members of the proposed class, a common nucleus of operative facts is typically presented, and
the commonality requirement . . . is usually met." Franklin v. City of Chicago, 102 F.R.D. 944,
949 (N.D.Ill. 1984); Patrykus v. Gomilla, 121 F.R.D. 357, 361 (N.D.Ill. 1988).
Plaintiff has identified a number of common questions. a. Whether it is an
unfair and deceptive trade practice to describe substantial pecuniary obligations incurred by 50-
80% of consumers entering into a transaction in terms which are incomprehensible to the average
consumer and then enforce the terms against consumers.
b. Whether the incomprehensible provisions are a lawful part of the contract between
Consumer and defendants.
c. Whether the warranty provisions of the CAL lease violate Conn. G.S. 42-110a et. seq.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
27/32
27
C. 87(3) -- Typicality
The rule requires that the claims of the named plaintiffs be typical of the claims of the
class:
A plaintiff's claim is typical if it arises from the same event or practice or courseof conduct that gives rise to the claims of other class members and his or herclaims are based on the same legal theory. The typicality requirement may besatisfied even if there are factual distinctions between the claims of the namedplaintiffs and those of other class members. Thus, similarity of legal theory maycontrol even in the face of differences of fact.
De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th
Cir. 1983) (citation omitted). See also, Crowley v. Banking Center, 1992 Conn. Super. LEXIS
704 (Conn.Super. 1992); Rosario v. Livaditis, 963 F.2d 1013, 1018 (7th Cir. 1992).
In the instant case, typicality is inherent in the class definition. All class members' claims
arise from the same practices of defendants which gave rise to the named plaintiff's claims.
D. 87(4) -- Adequacy of Representation
The rule also requires that the named plaintiff provide fair and adequate protection for the
interests of the class. That protection involves two factors: "(a) the plaintiff's attorney must be
qualified, experienced, and generally able to conduct the proposed litigation; and (b) the plaintiff
must not have interests antagonistic to those of the class." Rosario v. Livaditis, supra, 963 F.2d
1013, 1018 (7th Cir. 1992).
Plaintiff is capable of serving as class representative, as established by his affidavit
(Exhibit C). He has retained experienced counsel (Exhibit B).
The second relevant consideration under 87(4) is whether the interest of the named
plaintiff is coincident with the general interests of the class. Given the identity of claims between
the plaintiff and the class members, there is no potential for conflicting interests in this action.
There is no antagonism between the interests of the named plaintiff and those of the class.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
28/32
28
E. 88 -- Common Questions of Law or Fact Predominate
Connecticut Practice Book 88 requires that the questions of law or fact common to all
members of the class predominate over questions pertaining to individual members. This
criterion is normally satisfied when there is an essential common factual link between all class
members and the defendants for which the law provides a remedy. Halverson v. Convenient
Food Mart, Inc., 69 F.R.D. 331 (N.D.Ill. 1974). Other courts have stated that common questions
predominate if classwide adjudication of the common issues will significantly advance the
adjudication of the merits of all class members' claims. McClendon v. Continental Group, Inc.,
113 F.R.D. 39, 43-44 (D.N.J. 1986); Genden v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 114
F.R.D. 48, 52 (S.D.N.Y. 1987); Spicer v. Chicago Board Options Exchange, CCH
Fed.Sec.L.Rptr. [1989-90 Transfer Binder] 94,943, at p. 95,254 (N.D.Ill. 1990);Alexander
Grant & Co. v. McAllister, 116 F.R.D. 583, 590 (S.D.Ohio 1987).
With respect to the challenge of defendants' printed form leases, cases dealing with the
legality of standardized documents are generally appropriate for resolution by class action
because the document is the focal point of the analysis. Each class member has a printed form
contract. Since the contract is a standard form, it is given a uniform construction with respect to
all signatories. Restatement (Second) of Contracts 211(2) (1982); Kleiner v. First National
Bank of Atlanta, 97 F.R.D. 683, 694 (N.D.Ga. 1983) (certifying class in "prime rate" case);
Haroco, Inc. v. American National bank & Trust Co., 121 F.R.D. 664 (N.D.Ill. 1988) (certifying
breach of contract class action identical to that in Kleiner);Indianer v. Franklin Life Ins. Co.,
113 F.R.D. 595 (S.D.Fla. 1986) (certifying breach of contract class action involving meaning of
form insurance documents);La Sala v. American S. & L. Ass'n, 5 Cal.3d 864, 877, 97 Cal.Rptr.
849, 489 P.2d 1113 (1971) ("Controversies involving widely used contracts of adhesion present
ideal cases for class adjudication; the contracts are uniform, the same principles of interpretation
apply to each contract, and all members of the class will share a common interest in the
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
29/32
29
interpretation of an agreement to which each is a party"); Sharon Steel Corp. v. Chase Manhattan
Bank, 691 F.2d 1039 (2nd Cir. 1982) (standard form trust indenture provisions "must be given a
consistent, uniform interpretation");Broad v. Rockwell International Co., 642 F.2d 929, 947 and
n.20 (5th Cir. 1981) (enbanc) (standard form trust indenture provisions must be given uniform
construction). "Since plaintiffs' claims arise from allegations of common practice and rights
derived from form contracts, the case appears to present the classic case for treatment as a class
action."Haroco, Inc. v. American Nat'l Bank & Trust Co., 121 F.R.D. 664, 669 (N.D.Ill. 1988).
The suitability of Truth in Leasing cases for class certification is illustrated by several
recent cases in federal and state court in Illinois. InLynch Leasing Co. v. Moore/ Moore v. Lynch
Leasing Co., the Circuit Court of Cook County certified a class and entered summary judgment
on the disclosure claim, after which the case was settled on a classwide basis. (Copy of order
attached asExhibit D). Classes were also certified in Simon v. World Omni Leasing, Inc., 146
F.R.D. 197 (S.D.Ala. 1992);Johnson v. Suburu, 1993 U.S.Dist. LEXIS 8018 (Exhibit E);Blank
v. Nissan Motor Acceptance Corporation, 91 L 8516 (Exhibit F); Wesley v. General Motors
Acceptance Corporation, 91 C 3368 (N.D.Ill.) (Exhibit G); Kedziora v. Citicorp National
Services, Inc., 91 C 3428 (Exhibit H);Lundquist v. Security Pacific Automotive Financial
Services Corp., 993 F.2d 11 (2d Cir. 1993), reh'g denied, July 22, 1993 (Exhibit I).
The only "individual" issues appear to concern identification of the class members. This
requires nothing more than ministerial examination of defendants' files. This type of "individual
issue" is not a barrier to class certification. Heastie v. Community Bank of Greater Peoria, 125
F.R.D. 669 (N.D.Ill. 1989).
F. 87 -- Class Action Is Superior to
Other Available Methods to Resolve This Controversy
Efficiency is the primary focus in determining whether the class action is the superior
method for resolving the controversy presented. Eovaldi v. First Nat'l Bank, 57 F.R.D. 545
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
30/32
30
(N.D.Ill. 1972). The Court is required to determine the best available method for resolving the
controversy in keeping with judicial integrity, convenience, and economy. Scholes, 143 F.R.D. at
189;Hurwitz v. R.B. Jones Corp., 76 F.R.D. 149 (W.D.Mo. 1977). It is proper for a court, in
deciding the "best" available method, to consider the ". . . inability of the poor or uninformed to
enforce their rights, and the improbability that large numbers of class members would possess the
initiative to litigate individually." Haynes v. Logan Furniture Mart, Inc., supra, 503 F.2d 1161
(7th Cir. 1974).
In this case there is no better method available for the adjudication of the claims which
might be brought by each individual lessee. First, "the interest of members of the class in
individually controlling the prosecution or defense of separate actions" is nonexistent because the
average claim is a few thousand dollars, while the investment of lawyer's and expert's time
necessary to prosecute the claim is substantially larger.
This is precisely the sort of case contemplated by 86 et seq. -- a situation where a
defendant unlawfully obtains moderate sums from a large number of persons, resulting in
millions of dollars in unlawful gains but insufficient damage to anyone to warrant an individual
action. Individual victims suffer substantial damages, but cannot economically bring suit.
"[O]ne of the primary functions of the class suit is to provide a device for vindicating claims
which, taken individually, are too small to justify legal action but which are of significant size if
taken as a group." Brady v. LAC, Inc., 72 F.R.D. 22, 28 (S.D.N.Y. 1976). SeealsoCrowley v.
Banking Center, 1992 Conn. Super. LEXIS 704 (Conn.Super. 1992).
Even if individual actions were feasible, they would be incredibly wasteful of judicial
resources. The legal fees from thousands of individual cases would far exceed those required to
resolve this action.
Second, "the difficulties likely to be encountered in the management of a class action" are
minimal. Distribution of benefits to class members is not expected to pose any difficulty.
Defendants have addresses, social security numbers, and driver's license numbers for all class
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
31/32
31
members, so that they should be findable. The management of this action is likely to present
fewer difficulties than many other types of cases which are routinely certified, such as those for
securities fraud. For example, in any securities fraud case, individual reliance is a possible issue.
Such actions are nevertheless routinely certified as class actions. Here, the only individual issues
appear to relate to the amount by which some class members were overcharged, and that can be
determined by computer. Even if some individual issues are found to exist, the common
questions of the legality of the formula and the disclosures predominate.
The special efficacy of the consumer class action has been noted by the courts and is
applicable to this case:
A class action permits a large group of claimants to have their claims adjudicated
in a single lawsuit. This is particularly important where, as here, a large number
of small and medium sized claimants may be involved. In light of the awesome
costs of discovery and trial, many of them would not be able to secure relief if
class certification were denied . . . .
In Re Folding Carton Antitrust Litigation, 75 F.R.D. 727, 732 (N.D.Ill. 1977) (citations omitted).
IV. CONCLUSION
With respect to the of the proposed class, plaintiffhas shown that each of the
prerequisites for class certification set forth in 87 is satisfied: (1) the class is so numerous that
joinder of all members is impractical; (2) there are many questions of law and fact common to
the class; (3) plaintiff's claims are typical of those of the class members; and (4) plaintiff is an
adequate representatives of the class. Plaintiff has also shown that the criteria for certification ofa class under 88 are satisfied.
8/4/2019 Chapter 9 Automobile Lease Case PL94Ch09
32/32
32
This action is even more suitable for class treatment than many other actions which are
commonly certified as class actions. Accordingly, the Court should enter an order determining
that this action may proceed as a class action.
Respectfully submitted,
Attorney For Plaintiff
Top Related