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It’s clear to me too, and again if you don’t think MBFS team of lawyers can argue a case that it’s clear better than the OP can argue it’s not…I’m not sure what to tell you. All manufacturers use that lease language, I’m sure the attorneys who wrote it thought of these situations. That’s what they were paid to do.
This is precisely why they reduce the interest when you make MSDs. If there was no way that money could provide them security why would they do that?
Yeah, I'm honestly kinda flabbergasted that some people here think MBFS would just cancel $18k in debt and return the $20k MSDs. Where did you guys learn Finance?
Yeah, I don’t agree, but I’m very literal when I look at these things. The “insurance” referenced in the gap waiver seems pretty clear to me in that they’re talking about “vehicle insurance required by this lease at the time of total loss.” A security deposit wasn’t required nor is it insurance in the context of the gap waiver.
Also, just because a corporation is large and filled with a huge legal staff doesn’t mean they are immune to mistakes on these things.
Regardless, filing a small claims court is painless, and in this case worth the simple filing fee imo. There’s really nothing to be embarrassed about no matter what the outcome is and until you try, you’ll never know.
---------------------------------------------------------------------------------------------------------------------------20. Total Vehicle Loss/Gap Waiver. If the vehicle is subject to a total loss due to collision, destruction or theft, you will pay us the Gap Amount which is the difference between the Early Termination Liability and the insurance proceeds we receive based on the total loss. We agree to waive the Gap Amount if you had the vehicle insurance required by this lease at the time of total loss, in which case you will pay to us the sum of: (a) all unpaid amounts that are due or past due under this lease; plus (b) the amount of your insurance deductible; plus (c) any other amounts that were subtracted from the vehicle's actual cash value to determine the insurance proceeds we received for the total loss. If this is a single payment lease, you will receive a refund equal to your lease payment divided by your Lease Term (as shown on page 1 of this lease) times the number of months left in this lease at the time of the loss of the vehicle. If you do not have insurance on the vehicle or your insurance company denies part or all of your claim, you will be in default and will pay us the early termination liability set forth in section 23.
This subsection will not apply and you will be in default if you accept a cash-value settlement from your insurance company without first receiving our consent and forwarding any such settlement to us
Yeah, I'm honestly kinda flabbergasted that some people here think MBFS would just cancel $18k in debt and return the $20k MSDs. Where did you guys learn Finance?
Yeah we all went to the community colleges, I graduated the second from the last like our current president. Regardless, it is a legal issue and and OP should either consult an good attorney or contact MBFS management directly.
I don’t know what jurisdiction the OP is in, but a lot of small claims court don’t even allow you to bring in an attorney. It doesn’t mean he can’t and shouldn’t consult one, but I think the small filing fee and inconvenience of fighting for it outweighs any negatives. The worst that can happen is the judge ruling against him.
He just needs to present his evidence and let the court decide.
I don’t know what jurisdiction the OP is in, but a lot of small claims court don’t even allow you to bring in an attorney. It doesn’t mean he can’t and shouldn’t consult one, but I think the small filing fee and inconvenience of fighting for it outweighs any negatives. The worst that can happen is the judge ruling against him.
He just needs to present his evidence and let the court decide.
You can always be represented by an attorney in a court of law. Have you ever been in court? Even if he wins MBFS will appeal, then it will go to circuit court and that’s real court. He is going to need an attorney.
And you can not agree with how the document is worded, but unless you are an contract attorney that doesn’t have any value to the OP or anybody else.
People are really self righteous. Sometimes you get legally screwed and that’s what happened here.
Well, maybe I’m mistaken, but I thought in some jurisdictions a lawyer wasn’t even allowed in small claims court. Even if it is, the amount of loss/gain doesn’t necessitate one, especially if you have nothing to lose so to speak, which in this case is the OP.
Well, maybe I’m mistaken, but I thought in some jurisdictions a lawyer wasn’t even allowed in small claims court. Even if it is, the amount of loss/gain doesn’t necessitate one, especially if you have nothing to lose so to speak, which in this case is the OP.
You are mistaken. He can certainly do that but like I said it’s an exercise. If he wins MBFS is going to appeal and then it goes to the circuit court and he will have no idea how to navigate that without a lawyer. He will be forced to get one or withdraw his suit.
This whole situation happened because he listened to somebody tell him something when they had no idea what they were talking about (the dealer sales manager), don’t be another one of those guys telling him stuff when you don’t know what you’re talking about. I’m not an attorney but I am attorney adjacent and I know how court proceedings and the process works.
He will not beat MBFS in small claims court. Unless he wants to try and make this a much bigger thing, like a class action he is going to be out this $20,000. Does he want to throw hundreds of hours of time and thousands more dollars at it and still be out the $20,000 or does he want to learn from this and move on. He can still try and work up the chain at MBFS and get some relief, but if he files a lawsuit that is doomed at the start they will just stop talking to him.
He met with attorneys and they told him to file a claim on his own in small claims court. That’s attorney speak for “get out of my office” lol
Something to keep in mind. There are 4 parties to this: OP, MBFS, Collision Insurance, Gap Insurance
From the start, MBFS must be made whole regardless of where the money comes from, that is Total Owed: Insurance + Gap Insurance + OP, or Insurance + OP + Gap Insurance. At the moment the latter one was used.
MBFS is not part of where the money comes from, they are just the recipient. Unfortunately, they are also the part executing the ordering of who pays what and that is where the OP got caught
The argument here is what is the correct ordering for payment. The total is fixed, and it must be paid between OP, Collision Insurance and Gap Insurance (if available)
Indeed and might wanna add that MBFS has been doing leases for much longer than any of us here have driven MBs, so if anything in their lease agreement is against the law, it'd have been challenged a long time ago. This is not their first rodeo.
I think there might be other states that are similar.
But again, what does he have to lose? Nothing other than the filing fee and his time.
You don't understand what that means. That means that lawyers cannot file claims in small claims court on behalf of clients, the individual must file the claim. An attorney can come to the court proceeding and speak on behalf of the claimant. No court in the United States will not allow a claimant or defendant in ANY court proceedings not to be accompanied by and represented by an attorney. In the case of MBFS as a defendant, they WILL send a lawyer as an employee with authority of the company, if they show up at all. In CA defendants don't even have to respond to small claims suits at all. If they don't, they may be summarily judged against but they will then appeal and it goes to circuit court and thats real court.
Do you have any idea how many times a year MBFS gets sued? Its thousands of times.
Also, the limit in CA for small claims court is $10,000...so none of this matters anyways his claimed damages are higher than the threshhold where CA would hear the case in small claims court, it would have to go to the circuit court.
Let me give you a little background on where I'm coming from. I am in the real estate business, and we get sued and threatened to be sued all the time. Sometimes those arguments about how customers were wronged are legitimate, usually they aren't. Even when they aren't though, we may still cough up money to avoid having to defend a case in court. Happens all the time. BUT, once a customer files a suit, we're not talking to them or coming to any mutually acceptable outcomes. He can still negotiate some money with MBFS by appealing to them as a customer, but if he files a suit all of that is over and he will almost certainly lose.
So aside from his filing fees and his time (which is worth a lot), he also has any chance of a resolution that returns some or all of his $20,000 to lose. Its a stunning level of hubris to assume that one person will prevail in a contractural dispute with a huge multi-national corporation in small claims court lol.
He would be better off calling the news than filing a suit.
Something to keep in mind. There are 4 parties to this: OP, MBFS, Collision Insurance, Gap Insurance
From the start, MBFS must be made whole regardless of where the money comes from, that is Total Owed: Insurance + Gap Insurance + OP, or Insurance + OP + Gap Insurance. At the moment the latter one was used.
MBFS is not part of where the money comes from, they are just the recipient. Unfortunately, they are also the part executing the ordering of who pays what and that is where the OP got caught
The argument here is what is the correct ordering for payment. The total is fixed, and it must be paid between OP, Collision Insurance and Gap Insurance (if available)
And the gap INSURANCE insures the lender (MBFS) against a shortfall in insurance payout in the event of a total loss. There is no shortfall because MBFS has the MSDs and contractually those MSDs are used to secure the lease against default. Totalling the vehicle (or death of the lessee) amounts to a default. If you think about it, this is logical. If holding MSDs provided the lender no security, then they would not reduce the interest rate in exchange for you placing MSDs.
The only way he gets his MSDs back is if MBUSA negotiates the insurance payout to ensure they can return them to the lessee, and why would they do that? Only reason they would is because they care about making their customer whole...and they don't.
Small claims court is a special court where disputes are resolved quickly and inexpensively. In small claims court, the rules are simplified and the hearing is informal. Attorneys are generally not allowed.
And I don’t see any language in here that says they won’t waive the gap amount because of a security deposit, so I disagree there as well.
20. Total Vehicle Loss/Gap Waiver. If the vehicle is subject to a total loss due to collision, destruction or theft, you will pay us the Gap Amount which is the difference between the Early Termination Liability and the insurance proceeds we receive based on the total loss. We agree to waive the Gap Amount if you had the vehicle insurance required by this lease at the time of total loss, in which case you will pay to us the sum of: (a) all unpaid amounts that are due or past due under this lease; plus (b) the amount of your insurance deductible; plus (c) any other amounts that were subtracted from the vehicle's actual cash value to determine the insurance proceeds we received for the total loss.
What does the contract say about the security deposit?
Was going to ask this too. Looking at my MBFS contract, it's summarized as:
The Refundable Security Deposit may be used to pay all amounts that you fail to pay under this lease or to satisfy any remedy for Default.
...
Even if we have refunded to you all or any portion of the Security Deposit, you are still responsible for amounts due and owning after termination of this lease, such as personal property tax.
Sorry I cant paste in the entire section, my PDF is just scan and cant extract text.
And I don’t see any language in here that says they won’t waive the gap amount because of a security deposit, so I disagree there as well.
You can believe what you want, but again that doesn't mean you have any frame of reference from which to have an opinion that has value to others. No court is going to bar an attorney from standing alongside their client in the courtroom. I ask again, have you ever been to court?
From your own link:
Attorneys are generally not allowed.
The word "generally" is important. Who, if not an attorney, would be present at a court proceeding on behalf of a huge corporation?
In any event, the threshhold for small claims court in CA is $10,000...and his damages are twice that so if he sues he cannot sue in small claims court, so the issue with how small claims court operates in the context of his situation is moot.
Was going to ask this too. Looking at my MBFS contract, it's summarized as:
Sorry I cant paste in the entire section, my PDF is just scan and cant extract text.
Totalling the car is default. So it says it right there in black and white:
The Refundable Security Deposit may be used to pay all amounts that you fail to pay under this lease or to satisfy any remedy for Default. ... Even if we have refunded to you all or any portion of the Security Deposit, you are still responsible for amounts due and owning after termination of this lease, such as personal property tax.
Totalling the car amounts to a default of the agreement...so does dying...and the security deposit may be used to pay all amounts to satisfy any remedy for default. Judge slams the gavel, case dismissed.
I just went back through my lease agreement just for giggles, and something jumped out at me I didn't even think of. it includes an arbitration clause, so you really can't sue them anyways:
You can believe what you want, but again that doesn't mean you have any frame of reference from which to have an opinion that has value to others. No court is going to bar an attorney from standing alongside their client in the courtroom. I ask again, have you ever been to court?
From your own link:
The word "generally" is important. Who, if not an attorney, would be present at a court proceeding on behalf of a huge corporation?
In any event, the threshhold for small claims court in CA is $10,000...and his damages are twice that so if he sues he cannot sue in small claims court, so the issue with how small claims court operates in the context of his situation is moot.
To me, “generally” means “typically,” which means that attorneys are not typical and by definition the exception and not the rule. Maybe it’s different for defendants, I have no idea.
I’ve never been to a California small claims court. Have you?
@SW20S your perseverance is higher than mine. The discussion is going in circles. Nice find about the arbitration. Didn't even think of that, either, so yeah half this thread is moot. LOL at the attorney suggesting to OP to take it to small claims court. Lesson learned for OP and others, read and understand the contract before signing the dotted line.
To me, “generally” means “typically,” which means that attorneys are not typical and by definition the exception and not the rule. Maybe it’s different for defendants, I have no idea.
I’ve never been to a California small claims court. Have you?
No but I have been to court in the state of Maryland many times. And what it means to you does not mean anything, not typical does not mean "not allowed". The point is attorneys cannot file a claim in small claims court, only plaintiffs can.
If reality was "whatever it means to you" then nothing would be enforcable.
And here is the default paragraph in the lease that clearly says destruction of the vehicle amounts to default, see line 8:
Coupled with the language posted above:
The Refundable Security Deposit may be used to pay all amounts that you fail to pay under this lease or to satisfy any remedy for Default.
The OP has no leg to stand on, MBFS is completely within their rights to keep the MSDs.
Just take this as a lesson, never put any money down on a lease.
@SW20S your perseverance is higher than mine. The discussion is going in circles. Nice find about the arbitration. Didn't even think of that, either, so yeah half this thread is moot. LOL at the attorney suggesting to OP to take it to small claims court. Lesson learned for OP and others, read and understand the contract before signing the dotted line.
I love it when people spout a bunch of BS without any knowledge or experience of value. Only in America lol
My guess is the OP was arguing with the attorney because he wasn't telling him what he wanted to hear and he just wanted him out of his office.
You might be right. This would have been an entertaining Judge Judy episode .
Yes it would have been lol
To close, this sucks for the OP and he has every right to feel screwed. He was told a bunch of BS by the dealer and they had no idea what they were talking about. Unfortunately though, he got legally screwed and doesn't have any recourse. He is forced to submit to arbitration that is binding and has waived any ability to appeal the result of that arbitration including to be a part of any class action suit. The lesson is, don't listen to dealer personnel, they are not very high caliber, and don't put money down on a lease.
08-23-2023, 10:16 PM
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