Lawsuit: BMW kept equity after leased M5 totaled
“However, despite numerous attempts by Plaintiff’s attorneys to persuade Safeco to pay out the equity portion to Plaintiff, Safeco complied with BMW’s demands to forward the entire amount to [BMW Financial Services],” Russell’s lawsuit states.
The lawsuit said BMW Financial Services “made misleading statements” in March to Russell’s counsel claiming a total loss both eliminated Russell’s ability to buy the leased vehicle and allowed BMW to cancel the lease. Russell’s suit alleged BMW “provided what looks like a legal conclusion” stating a cancellation meant BMW automatically obtained Russell’s rights to own the vehicle and deal with Safeco.
Russell’s litigation also alleges BMW knowingly falsely contended the captive finance company was entitled to the proceeds of a total-loss claim.
A spokesman for BMW said last week that the company does not comment on pending litigation.
Russell’s attorney, Leon Ozeran, said BMW could call in the lease because of the loss of the collateral involved in the financing. However, Russell could pay off the balance of the loan and keep the vehicle — and any equity left over, Ozeran said. He said Russell is prepared to testify that he would buy the M5.
“In a closed-end consumer vehicle lease, the consumer is always entitled to purchase the vehicle during the term of the lease, or at the end of the lease,” Russell’s lawsuit states.
A copy of Russell’s lease contract provided by Ozeran says he has the option to buy the M5 “as-is, where-is.”
When Russell and BMW executed the lease contract, nobody thought vehicle values would increase, according to Ozeran. BMW provided Russell with free guaranteed asset protection, coverage which covers the balance between an amount financed and the vehicle cash value paid out by an insurer in the event of a total loss. The contract states he won’t owe the gap amount “if the claim to total loss is actually paid to you by my insurance company.”