Two courts in North Carolina have signed off on a combined $8 million class action settlement, closing years of litigation over claims that customers were charged excessive fees on rent-to-own contracts for storage sheds.

The related cases, filed in federal and state court, accused Carolina Lease Management Group LLC and affiliated companies of structuring “lease” agreements that functioned like credit sales with finance charges that exceeded limits set by state law.

Final judgments were entered this week, bringing the dispute to an end.

Federal and State Cases Ran in Parallel

The federal case, handled in the U.S. District Court for the Eastern District of North Carolina, covered one group of customers. A separate action in Jones County Superior Court addressed an earlier group.

Court records show the two class periods did not overlap. Together, the cases covered more than 11,000 consumers.

The lawsuits alleged violations of North Carolina’s Retail Installment Sales Act, as well as claims under the state’s unfair trade practices and debt collection statutes.

Claims Focused on Fee Structure

Plaintiffs argued that the companies charged rental and financing costs that exceeded what would be allowed under consumer credit rules. According to the complaints, the agreements were labeled as leases but operated in practice like installment sales with added charges.

In the state court matter, the dispute began after Carolina Lease sought to recover a shed from a customer who missed payments. The customer filed counterclaims challenging the fee structure, leading to broader class allegations.

The parties litigated for more than five years, including an appeal to the U.S. Court of Appeals for the Fourth Circuit, before agreeing to settle.

How the Settlement Is Divided

Under the approved terms, most of the funds go to members of the federal class.

About $6.9 million will be distributed among 7,412 federal class members. Attorneys from the National Consumer Law Center and Lapas Law Offices will receive roughly $2.3 million in fees and costs. Each class representative will receive $10,000.

In the state case, just over $1 million is set aside for 3,811 class members. Counsel will receive about $330,000 in fees and costs. The named class representative is scheduled to receive $20,000.

Carolina Lease also agreed to cancel nearly $670,000 in outstanding balances it claimed customers still owed.

Case Details: The federal action is titled Bland et al. v. Carolina Lease Management Group LLC et al., filed in the Eastern District of North Carolina. The settlement orders formally conclude both cases and release the claims tied to the challenged contracts.