Opinion ID: 2817828
Heading Depth: 2
Heading Rank: 1

Heading: Philibotte's Claim under RISSA

Text: The district court correctly held that Philibotte's RISSA claim is precluded under Massachusetts SJC precedent in Silva v. Rent-A-Center, Inc., 912 N.E.2d 945 (Mass. 2009). This is because RISSA's disclosure requirements only apply to consumer leases meeting specific [statutory] requirements that, as Silva makes clear, Philibotte's lease cannot meet. Silva, 912 N.E.2d at judicial economy, and convenience). Accordingly, we continue to the merits, and affirm on narrower grounds than the district court. - 12 - 949-53 (discussing the standard for identifying retail installment sale agreement[s]). In particular, a consumer lease must satisfy two statutory requirements to trigger RISSA's disclosure protections: (1) the lessee contracts to pay as compensation for use a sum substantially equivalent to or in excess of the value of goods involved; and (2) it is agreed that the . . . lessee will become, or for no other or for a nominal consideration has the option to become the owner of the goods upon full compliance with his obligations under the contract. RISSA, Mass. Gen. Laws ch. 255D, § 1;8 see also Silva, 912 N.E.2d at 950 n.11 (emphasizing that, 8 The relevant definition under RISSA states in full: Retail installment sale agreement, [is] an agreement, other than a revolving credit agreement or agreement reflecting a sale made pursuant thereto, signed by the buyer in this commonwealth, involving a finance charge and providing for the sale of goods or the rendering of services or both, or for the issuance of merchandise certificates, for a specified amount which the buyer undertakes to pay in more than one payment subsequent to the making of the agreement, or not involving a finance charge and providing for the sale of goods or the rendering of services or both, or for the issuance of merchandise certificates, for a specific amount which the buyer undertakes to pay in five or more installments subsequent to the making of the agreement. A retail installment sales agreement shall not include an agreement signed by a nonresident buyer in the commonwealth if such buyer has agreed that the law of his state shall apply. “Retail installment sale agreement” shall also include any contract in the form of a bailment or lease if the bailee or lessee contracts to pay as compensation for use a sum substantially equivalent to or in excess of the value of goods involved - 13 - under RISSA, both definitional requirements must be met). In applying at least the first of these requirements, the SJC directs us to look . . . to the nature of the contract at the time it was formed. Silva, 912 N.E.2d at 951 (emphasizing that we are to evaluate parties' contractual rights and obligations at that point).9 Under this standard, leases will not satisfy the first requirement if they do not require payments substantially equivalent to or in excess of the value of the goods under their original term. Id. at 951-52 (citation omitted). Because of this emphasis on the lease's original term, this RISSA requirement is not satisfied by a consumer who renews multiple times and so eventually makes payments exceed[ing] the value of the item. Id. and it is agreed that the bailee or lessee will become, or for no other or for a nominal consideration has the option to become the owner of the goods upon full compliance with his obligations under the contract. A retail installment sale agreement shall not include an agreement which provides (a) for the payment of the total sale price in no more than three monthly installments and (b) a finance charge not in excess of one dollar and (c) no collateral security for the seller. Mass. Gen. Laws ch. 255D, § 1. 9 Some doubt has been cast on how this standard applies to the second statutory requirement. See, e.g., Saia v. Bay State Gas Co., 965 N.E.2d 224, 2012 WL 1145913, at  (Mass. App. Ct. Apr. 6, 2012) (unpublished disposition). Because we can resolve this case on the first prong, we do not reach this issue. - 14 - Philibotte's lease cannot meet this requirement because the original term of her agreement [does] not require [her] . . . to pay a 'sum substantially equivalent to or in excess of the value of the goods involved.' Id. at 950 (quoting Mass. Gen. Laws ch. 255D, § 1). That agreement only obligated her to pay $204, which she concedes is less than half the alleged value of the water heater involved. This absence of any obligation on the part of [Philibotte] to pay a sum substantially equivalent to the value of the leased [water heater] is decisive under the standard applied by the SJC. Id. at 951.