Opinion ID: 1128901
Heading Depth: 1
Heading Rank: 3

Heading: The resolution of the conflict

Text: Although the issue is not entirely free from doubt, we have concluded that we agree with the Fourth Circuit's decision of the issues. With regard to (a) above, the deficiency judgment issue: The lease agreement in question confers no right of ownership onto the lessee. It is not, for instance, a lease-purchase agreement, by which the lessee obtains the absolute right to purchase or to receive title to the vehicle, so that the monthly rentals can also be regarded as payments on a purchase price. The leased vehicle remained at all times the property of the lessor, with the lessee having no right of ownership of it, or no right to obtain ownership of it. The Deficiency Judgment Act, La.R.S. 13:4106, 4107, thus does not apply. The act is designed to protect against a creditor's non-judicial sale of a debtor's property. [3] It does not apply here, where additional rental compensation is determined by the fictitious sale of the creditor's property to determine any additional loss in value during the debtor's use of it. With regard to (b) above, the future rentals issue: The termination value adjustment was part of the rental consideration for the use of the vehicle during the months it was leased. At the inception of the lease, the lessee agreed to be responsible for such amount when the lease was terminated. As formulated by the contract, the adjustment in rent was reasonably calculated to compensate the lessor for a loss in depreciated value over the months in use in excess of that mutually agreed upon as reasonable at the time of the lease. Such adjustment value agreement was thus not an attempt to collect future rentals beyond the termination of the lease. Under the circumstances, it cannot be invalidated on such account. We are not faced with a situation where, at the inception of the lease, the stated value of the automobile or the monthly depreciation in value are so overstated or understated, respectively, as to enable us to conclude that what is denoted as a lease agreement in fact contemplates a buyer-seller or lender-borrower relationship or one in which future rentals may be collected in the guise of additional compensation for the use of the vehicle during the lease-months.