MARTINS IBELEME v. FREEDOM CREDIT UNION

The Court approved the notice because you have a right to know about a proposed settlement of a class action lawsuit, and about all of your options, before the Court decides whether to approve the settlement. If the Court approves it, and objections and appeals (if any), are resolved, the Settlement Administrator will make the payments the settlement allows.

The Court in charge of the case is the Court of Common Pleas of Philadelphia County, Pennsylvania, and the case is known as Martins Ibeleme, individually and on behalf of all others similarly situated v. Freedom Credit Union, June Term 2021, No. 002461. The person suing is Martins Ibeleme, the Plaintiff (also called “Class Representative”) and the company being sued, Freedom Credit Union, is called the Defendant, or “Freedom.”

The package explains the lawsuit, the settlement, your legal rights, what benefits are available, who is eligible, and how to get them.

Freedom’s records reflect that you and any co-borrower on your vehicle loan were sent one or more notices from Freedom following the repossession of your vehicle between June 30, 2015 through July 26, 2021. Freedom’s conduct post-repossession, including its use of these notices forms the basis for this lawsuit.

The lawsuit claims that Freedom violated Pennsylvania’s Uniform Commercial Code by failing to send its borrowers in Pennsylvania (a) proper notice of disposition of collateral (“Repossession Notice”) after repossession of their vehicle(s), and (b) proper explanation of calculation of deficiency (“Deficiency Notice”) after the sale of the vehicle(s).

Specifically, Plaintiff alleges on behalf of himself and a class of borrowers (“Repossession Notice Class”) that the Repossession Notice sent by Freedom misrepresents the right to redeem by including unincurred storage costs in the cost to redeem. Plaintiff also alleges on behalf of himself and a class of borrowers (“Deficiency Notice Subclass”) that the Deficiency Notice fails to provide a proper explanation of how Freedom calculated a deficiency balance.

Freedom denies that its disclosures violated any law, and Freedom asserts that it satisfied all of the legal requirements as to its notices. Freedom also asserts other defenses.  Freedom further contends that many of the members of the Class owe Freedom money for balances still due on their accounts following the sale of their repossessed vehicle(s) at auction.

In a class action, one or more people called Class Representatives (in this case Martins Ibeleme) sue on behalf of all people who have similar claims. All these people are “Class Members,” and grouped together are a “Class.” One court resolves the issues for all Class Members, except for those who exclude themselves from the Class. Freedom has challenged whether this case should proceed as a class action but has agreed not to oppose this case proceeding as a class for settlement purposes only.

Plaintiff believes the Class might have won more money than the settlement amount had the case gone to trial, but substantial delays and risks would have occurred, including the risk of the case not being certified as a class. Freedom believes that the claims asserted in the case are without substantial merit, and that the Plaintiff may have recovered nothing if there had been a trial. But there has been no trial. Instead, both sides agreed to a settlement. That way, they avoid the cost of a trial and appeal, and class members like yourself will get compensation and other settlement benefits promptly. The Class Representative and his attorneys think the settlement is best for all Class Members.

If you received the Notice in the mail, Freedom’s records reflect that you are part of the Class. The Court has preliminarily certified two classes, the Repossession Notice Class and the Deficiency Notice Subclass (collectively, the “Classes”). The Repossession Notice Class includes those borrowers who were sent certain notices after their vehicle was repossessed. The Deficiency Notice Subclass includes those borrowers who were sent certain notices after their repossessed vehicle was sold by Freedom.

Cash Component:

• Freedom has agreed to create a Settlement Fund of $1,700,000.00. Approved administrative costs, Class Counsel fees and expenses, and a service award for the Class Representative will be paid from that fund. The Net Fund that remains will be distributed to the members of the Classes.

• If fees and expenses are allowed as requested, your expected cash payment can be found in your personalized Notice, unless there were multiple borrowers on your loan in which case you will receive a portion of this amount.

• If after the first distribution of checks to the Class, more than $50,000 remains in the Net Fund (from uncashed or undistributable checks), there will be a second distribution of checks to the Class who cashed their initial check. A balance remaining after the second distribution will be paid to cy pres beneficiaries, Pennsylvania Interest on Lawyers Trust Account (“IOLTA”) and Community Legal Services of Philadelphia, for consumer uses.

Credit Reporting Relief:

Freedom will request that the credit reporting agencies update your credit report to remove any reference to the Freedom auto loan contract. Details about how and when this will be done, and limits on Freedom’s obligation to provide credit reporting relief are spelled out further in the Settlement Agreement.

Elimination of Disputed Deficiency Balance:

If you have been advised by Freedom that there is a shortfall after the auction of your repossessed vehicle, that balance claimed due is called a “Deficiency Balance.” Freedom’s right to these Deficiency Balances is disputed by the parties. Unless you elect otherwise, any disputed Deficiency Balance on your vehicle loan will be eliminated as a result of this settlement. The average Deficiency Balance claimed due is around $9,121.00. Yours could be more or less than this amount. You will not receive this relief if you got your car back (redeemed or reinstated) after the repossession. If you want to know if you have any Deficiency Balance or the amount, you can call the Settlement Administrator at 1-888-267-0132 or Class Counsel at 1-888-668-1225. NOTE: see Are there Tax Implications in question 7 below. You can choose not to have your disputed Deficiency Balance eliminated as a result of this Settlement by submitting the enclosed Election Not to Accept Compromise of Disputed Deficiency Balance.

This settlement has potential tax implications for you.  The Settlement Administrator plans to issue IRS 1099-series forms for cash payments over $600.  You may be required to furnish your Social Security Number to the administrator as a condition of payment of settlement proceeds over $600.

If you accept the elimination of your disputed Deficiency Balance, Freedom might issue to you an IRS 1099c form for the amount of the Deficiency Balance eliminated. This could result in your having to declare income in that amount on your next tax return and pay tax on all or some of that amount! You should consult your tax advisor to help decide if agreeing to the elimination of your disputed Deficiency Balance is right for you.

No. You do not need to do anything further to remain in the Class. You will get a payment and any credit reporting benefit automatically, assuming court approval of the Settlement.

No. Any outstanding debt remaining after the auction of your repossessed vehicle will automatically be eliminated upon final approval of the settlement by the Court unless you tell us you do not want your debt eliminated. If you do not want your alleged Deficiency Balance to be eliminated, please read these instructions carefully, fill out the Election Not To Accept Compromise of Disputed Deficiency Balance form, and mail it postmarked no later than July 28, 2023 to:   

Ibeleme v Freedom Credit Union
c/o Settlement Administrator
PO Box 23698
Jacksonville, FL 32241

If you have already been sued and there is a legal judgment against you relating to your disputed Deficiency Balance, Freedom will inform the Court that you have resolved the issue and will satisfy the judgment. If you do not know if you have any Deficiency Balance, you can call the Settlement Administrator at 1-888-267-0132 or Class Counsel at 1-888-668-1225 to inquire or to find out the amount of your alleged Deficiency Balance.

The Court will hold a hearing on September 14, 2023 at 10:00 A.M. via Zoom using the link https://zoom.us/j/4043810373 to decide whether to approve the settlement. If the Court approves the settlement after hearing, there may be appeals. It is always uncertain whether there will be an appeal and if so, when it will be resolved. Resolving an appeal can take time, often well more than a year. Please be patient.

Unless you exclude yourself, you will stay in the Class, and that means that you can’t sue, continue to sue, or be part of any other lawsuit against Freedom related to your repossessed motor vehicle. It also means that the Court’s orders will apply to you and legally bind you. Unless you “opt-out” or exclude yourself from this case, you will automatically be deemed to have agreed to a “Release of Claims” which describes exactly the legal claims that you give up if you remain in the Class. The specific language of the release is set forth in the Settlement Agreement, which can be found on the website: https://www.freedomcreditunionreposettlement.com/.

EXCLUDING YOURSELF FROM SETTLEMENT

If you do not want a payment or other benefits from this settlement but you want to keep the right to sue or continue to sue Freedom on your own about any of the subjects or issues set forth in the paragraph above, then you must take steps to get out. This is called excluding yourself – sometimes referred to as “opting out” of the Class.

To exclude yourself from the settlement, you must send a letter to the Settlement Administrator, with copies to counsel, by mail (first class, postage pre-paid) saying that you, as well as any and all other person(s) who signed your vehicle loan, want to be excluded from Martins Ibeleme, individually and on behalf of all others similarly situated v. Freedom Credit Union, June Term 2021, No. 002461. Be sure to include your name, address, email (if available), telephone number and your signature. Mail your exclusion request postmarked no later than July 28, 2023 to all three addresses below.

No. Unless you exclude yourself, you give up any right to sue Freedom for the claims that this settlement resolves. If you have a pending lawsuit, speak to your lawyer in that case immediately. You must exclude yourself from this Class to continue your own lawsuit.

No. If you exclude yourself, you will not receive any money from this lawsuit or settlement, credit report deletion, elimination of any disputed Deficiency Balance, or other relief that this Class Settlement provides.

The Court has approved the law firm of Flitter Milz, P.C., in Narberth, PA to represent you and other Class Members. The lawyers at this firm are called Class Counsel. You will not be charged individually for these lawyers. If you want to be represented by your own lawyer, you may hire a lawyer at your own expense.

As part of the class settlement, Plaintiff will ask the court to approve a $15,000 service award for his time and effort in bringing this case. Plaintiff will ask the Court to approve a payment out of the settlement fund in the amount of $680,000 for Class Counsel fees and up to $7,000 for reimbursement of expenses. The fees would pay Class Counsel for investigating the facts, litigating the case, negotiating the settlement, filing legal papers with the Court, and oversight of future implementation of the settlement, including fielding inquiries from Class Members. Class Counsel has not been paid for its time or services since this case was originally filed in June 2021. The Court could award less than this amount.

If you are a Class Member, you can object to the settlement if you don’t like any part of it. You should state why you object and why you think the Court should not approve the settlement. The Court will consider your views. To object, you must send a letter to the Settlement Administrator and to counsel at the three different addresses listed in question 12 above, on or before July 28, 2023, saying that you object to the settlement in Martins Ibeleme, individually and on behalf of all others similarly situated v. Freedom Credit Union, June Term 2021, No. 002461, and your letter should include your name, address, email address (if available), telephone number, your signature, and the reasons you object to the settlement.

Objecting is telling the Court that you don’t like something about the settlement, and that you, for that reason, want the settlement not to be approved. You can object only if you stay in the Class. Excluding yourself is telling the Court that you don’t want to be part of the Class. If you exclude yourself, you have no basis to object because the case no longer affects you.

THE COURT'S FAIRNESS HEARING

The Court will hold a hearing to decide whether to approve the settlement. You may attend and you may ask to speak, but you don’t have to, and attendance is not required or expected unless you advise that you intend to appear or have your lawyer appear.

The Court will hold a Fairness Hearing on September 14, 2023, at 10:00 A.M. via Zoom using the link https://zoom.us/j/4043810373 . At this hearing, the Court will consider whether the settlement is fair, reasonable, and adequate and meets the test for class action settlements. If there are objections, the Court will consider them. The Court will listen to people who have asked to speak at the hearing. The Court may also determine the Class Representative Service Award and Class Counsel fees and expenses. Following the hearing, the Court will decide whether to approve the settlement. We do not know how long these decisions will take.

No. Class Counsel will answer any questions the Court may have. But you are welcome to come at your own expense. If you file an objection, you don’t have to come to Court to talk about it, but you may. As long as you properly mailed your written objection on time, the Court will consider it. You may also pay your own lawyer to attend, if you wish.

You may ask the Court for permission to speak at the Fairness Hearing. To do so, you or your lawyer must send a letter stating that it is your “Notice of Intention to Appear in Martins Ibeleme, individually and on behalf of all others similarly situated v. Freedom Credit Union, June Term 2021, No. 002461.” Your Notice of Intention to Appear must be mailed no later than July 28, 2023, to Counsel and the Administrator at the addresses in question 12. You cannot speak at the hearing if you exclude yourself from the settlement.

If you do not exclude yourself and the Court finally approves the settlement, you will receive a settlement payment(s), elimination of your disputed Deficiency Balance (if any), and credit reporting relief as provided in the Class Action Settlement Agreement. If you do not want your disputed Deficiency Balance eliminated you must elect in writing by returning the enclosed form.

The notice summarizes the proposed settlement. The pleadings and other records in this litigation, including a copy of the Settlement Agreement, may be examined at any time during regular office hours at the Office of Judicial Records – Civil – Court of Common Pleas of Philadelphia County, Room 284, City Hall, Philadelphia, PA 19107. These documents will also appear on the Important Court Documents page.

You may also call or write to the following:

Ibeleme v Freedom Credit Union                1-888-267-0132
c/o Settlement Administrator
PO Box 23698
Jacksonville, FL 32241

OR

Class Counsel                                                1-888-668-1225
FLITTER MILZ, P.C.
450 N Narberth Ave Ste 101
Narberth, PA 19072

Please do not call the Court, Freedom, or Freedom’s counsel.