Toyota Motor Credit Corp. did not violate the Uniform Commercial Code when it failed to pay interest on refundable security deposits it collected on two Lexus leases, the Illinois Appellate Court has ruled.
In a unanimous decision, the court threw out a lawsuit asserting Toyota Credit was obligated to pay interest.
The case stemmed from closed-end leases assigned to Toyota Credit. In one, Rock-Tred Corp. leased a new 1991 Lexus LS 400 and made a $500 refundable security deposit. In the other, Joseph and Barbara Spina put down a $500 deposit on a new 1992 Lexus SC 300.
Their lease agreements made no mention of interest.
The customers filed a class-action complaint against Toyota Credit in Cook County Circuit Court in Chicago. Judge Robert Boharic dismissed the case without trial.
The three-judge appellate court panel upheld that decision, ruling Toyota Credit's handling of the security deposits did not conflict with the Illinois Uniform Commercial Code in effect when the leases were made.
The Illinois legislature amended the law as of January 1997 to state explicitly that lessors are not required to pay interest on a lessee's security deposit.
The appellate court also found no basis for claims that Toyota Credit violated the state consumer leasing and consumer fraud laws.
Michele Odorizzi, a Chicago lawyer who represents Toyota Credit, said it is the first time an appeals-level court in Illinois has addressed the issue.
'This ought to be the end of the thing,' she said.
The plaintiffs' lawyer declined to discuss the case.