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Tort/Negligence — Car Buyers Lose Claim for Repo Relief

Gardner v. GMAC Inc. (Lawyers Weekly No. 15-01-0797, 18 pp.) (Diaz, J.) No. 14-1048, Aug. 6, 2015; USDC at Baltimore, Md. (Motz, J.) 4th Cir.

Holding: The 4th Circuit affirms a district court decision rejecting plaintiff car buyers’ suit for relief from defendant creditors’ alleged violation of repossession notice requirements under Maryland consumer protection law; the Maryland Credit Grantor Closed End Credit Provisions statute requires borrowers to have repaid more than the original principal amount of their loans in order to obtain relief.

The main question raised by this appeal is when borrowers may seek a remedy after their creditors, in repossessing appellants’ vehicles, violated the repossession notice requirements in Maryland’s Credit Grantor Closed End Credit Provisions, Md. Code Ann., Com. Law § 12-1001. Because we conclude that CLEC requires borrowers to have repaid more than the original principal amount of their loans before they are entitled to relief, we affirm.

Two CLEC provisions are at issue in this appeal. First, CLEC’s civil remedies section provides that except for a bona fide error of computation, if a credit grantor violates any provision of this subtitle, the credit grantor may collect only the principal amount of the loan and may not collect any interest, costs, fees or other charges with respect to the loan. Second, CLEC’s repossession section states that if the provisions of this section, including the requirement of furnishing a notice following repossession, are not followed, the credit grantor shall not be entitled to any deficiency judgment to which he would be entitled under the loan agreement.

Despite the fact that neither appellant has paid anything in excess of the principal, they nonetheless insist that they are entitled under CLEC to a refund of the funds they claim GMAC collected after repossessing their cars and their payments to GMAC during the life of their loans to cover interest, costs, fees or other charges. That is not correct.

Other Claims

We turn now to appellants’ claims for breach of contract, restitution/unjust enrichment and violations of Maryland’s Consumer Protection Act. None succeed.

Plaintiffs claim that, regardless of their lack of actual damages under CLEC, they have a claim for nominal damages for breach of contract under Maryland law. Here, though, the borrowers’ sole basis for a contract claim is that GMAC violated CLED. To allow them to pursue nominal damages by asserting a stand-alone breach-of-contract claim would effectively render CLEC’s requirement that a borrower suffer actual damages a nullity. This is so because the only way for CLEC to govern a dispute is for the creditor to specifically elect it in the contract. We do not think Maryland’s highest court would countenance such a result and neither shall we.

On the restitution/unjust enrichment claim, the borrowers’ entire argument is that they are entitled to actual damages for amounts unlawfully collected on their deficiency balances. But GMAC has not collected anything “unlawfully” because it has yet to recoup the full principal amount of the loan, and has not collected anything since it sent the repossession notices. Plaintiffs also have failed to state claims for actual damages under Maryland’s Consumer Protection Act.

Judgment for defendants affirmed.

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