The National List publishes White Paper authored by Attorney Dubord

A white paper authored by Attorney Dubord has been published on The National List Blog. The white paper can be found at http://www.nationallist.com/white_papers/maine. The white paper has information concerning Maine collection related laws and practices including discussion of court fees, jurisdictional limits, statutes of limitation, exemptions, and service of process. Where available, hyperlinks to case law and statutes are inserted in the white paper, making access to source documents readily available. The white paper serves a good starting point for creditors who are unfamiliar with Maine’s collection laws and practices and as a refresher for those creditors who have not used Maine’s court system in a while.

If you have any questions concerning Maine collection laws or need assistance with creditor representation in Maine, the attorneys at Gosselin & Dubord, P.A. would be happy to assist you. Please contact Attorney David R. Dubord at 207-783-5261, extension 212 or drd@gosselindubord.com.

WHEN IS A MONEY JUDGMENT TOO OLD TO COLLECT?

Under Maine law, a judgment is presumed satisfied twenty years after the judgment is entered. 14 M.R.S. § 864. However, the presumption can be overcome by evidence that the judgment has not been paid in full. See Brewer v. Thomes, 28 Me. 81, 87 (1848); Jackson v. Nason, 38 Me. 85, 89 (1854); Knight v. Macomber, 55 Me. 132, 134 (1868). The means of enforcing a judgment that is more than 20 years old is by means of bringing suit on the judgment. Maine has no statute of limitations on judgments, therefore a suit on a judgment which has not been satisfied can be brought at any time. See Carter v. Carter, 611 A.2d 86 (Me. 1992). Prior to the twenty year period, an alias writ of execution can be requested. See 14 M.R.S. § 4651-A(9). If requested just prior to the end of the twenty year period, the writ presumably is valid until three years from the date of its issue.

If you have any questions concerning collection of a judgment or need assistance with creditor representation in Maine, the attorneys at Gosselin & Dubord, P.A. would be happy to assist you. Please contact Attorney David R. Dubord at 207-783-5261, extension 212 or drd@gosselindubord.com.

Attorney Dubord Speaker at Collection Law Seminar

Attorney David R. Dubord recently spoke at a seminar attended by attorneys, paralegals, lenders and other credit grantors entitled “The Nuts and Bolts of Collection Law.” Attorney Dubord spoke on the topic of collecting a judgment, addressing issues relating to post-judgment disclosure proceedings, sheriff’s sales, bank account levies, and other judgment collection techniques. The seminar, sponsored by the National Business Institute, was held in South Portland. Attorney Dubord has been practicing law in Lewiston for over thirty years. Throughout that time he has represented creditors in all aspects of debt collection including foreclosures, repossessions, unsecured collections and creditor bankruptcy representation. Attorney Dubord’s clients include credit unions, banks, finance companies, lessors and debt buyers from all over the country. If you need assistance with debt collection and/or judgment enforcement in the State of Maine, please contact Attorney David R. Dubord at 207-783-5261 or drd@gosselindubord.com.

SUBROGATION LIMITATION REPEALED

In 2009, the Maine Legislature amended a provision of the Maine Insurance Code (24-A M.R.S. § 1 et seq.) regarding an insurer’s subrogation rights concerning medical payments made by the insurer pursuant to the medical payments coverage provisions of a liability policy. The 2009 legislation amended section 2910-A of the Code to prohibit any recovery by the insurer for medical payments when the insured’s settlement or award was $20,000.00 or less. The most recent legislative change to section 2910-A of the Code removed the $20,000.00 threshold entirely, thereby restoring the insurer’s right to subrogation regardless of the size of the insured’s recovery. The effective date of the most recent change in the statute was August 30, 2012.

Both the 2009 and 2012 changes to section 2910-A of the Code are silent as to the retroactive effect of the changes on policies and claims. When the statute was changed in 2009, the Maine Bureau of Insurance issued a bulletin clarifying that the amended statute applied to policies issued or renewed on or after September 12, 2009, which was the effective date of the change. Hence, the Bureau’s opinion was that changes to the statute are not retroactive. However, the Bureau almost immediately withdrew the bulletin without comment, leaving all to wonder whether the change in the statute was truly retroactive. No bulletin has been issued yet regarding whether the newest amendment to the statute is retroactive and none is expected. I believe the Bureau of Insurance is leaving it up to the courts to decide whether the statutory changes are retroactive. So far, Maine’s courts have been silent on the issue.

Whether the statutory change is retroactive or not, the change must also be reflected in the policies containing the subrogation rights. If a policy has the $20,000.00 threshold language that complies with the prior law, then the recent statutory change will not expand the insurer’s subrogation rights. Also, under the statute, all policy changes regarding subrogation rights must be approved by the Bureau of Insurance.

Lastly, the statute has always reserved to the insurer the right to directly pursue the third party responsible for the insured’s damages. If the insurer choses this option, then the statutory threshold and the other requirements of the statute do not apply.

If you are an insurer in need of assistance regarding subrogation claims for insureds located in the State of Maine, the attorneys at Gosselin & Dubord, P.A. located in Lewiston, Maine have extensive experience with insurer representation and stand ready to assist you. Please contact Attorney David R. Dubord at (207) 783-5261 or drd@gosselindubord.com.

WHEN IS A DEBT TOO OLD TO COLLECT?

Banks, credit unions, debt buyers, finance companies, automobile dealers who finance purchases, and other lenders seeking to collect on delinquent accounts are well advised to aggressively pursue non-paying accounts soon after the accounts become delinquent. Creditor delay generally impairs the prospects for collection as debtors become more difficult to locate and key witnesses become unavailable. In addition, if a creditor waits too long to institute suit on a claim, the claim may become time barred by the applicable statute of limitations. The statute of limitations bars the filing of a lawsuit to collect the debt although it does not extinguish the debt, which still may be collected by resort to any collateral which secures the debt. See Johnson v. McNeil, 800 A.2d 702 (Me. 2002).

In Maine, the applicable statute of limitations depends upon the type of document evidencing the debt. If the debt is based on a negotiable promissory note which is signed in the presence of an attesting witness, then the statute is 20 years. 14 M.R.S. § 751; see Tornesello v. Tisdale, 2008 ME 84; 948 A.2d 1244. What constitutes a negotiable promissory note is defined by Maine’s Uniform Commercial Code. 11 M.R.S. § 3-1104. Generally, standard promissory notes prepared by lenders are negotiable instruments. If the debt arises out of an agreement for the sale of goods, such as the sale of an automobile by a dealer which finances the sale, then the statute is 4 years. 11 M.R.S. § 2-725. All other debts, including debts based on a promissory note not signed in the presence of an attesting witness, general contract claims, and claims based oral agreements, are subject to a six year statute of limitations. 14 M.R.S. § 752.

In all contract cases, the statute starts to run on the date when the contract is breached. Tornesello v. Tisdale, 2008 ME 84; 948 A.2d 1244. The contract language will generally define when a breach occurs or will set the parameters for determining when a breach has occurred.

If you are a creditor seeking to collect a debt, the attorneys of Gosselin & Dubord, P.A. can assist you. Please contact Attorney David R. Dubord at 207-783-5261, ext. 212 or drd@gosselindubord.com  for more information or for representation.

Options for recovery of personal property in Maine

Secured creditors are often faced with uncooperative borrowers following a default, resulting in the need to resort to legal action to recover collateral.  In the State of Maine, there are two basic remedies available to creditors to pursue recovery of personal property by legal action.  One is a replevin action and the other is a forcible entry and detainer action.

A replevin action may be commenced in either the District or Superior Court.  A replevin action is commenced by filing a complaint for replevin with the court along with a motion for writ of replevin and supporting client affidavit.  Once these documents are filed with the court, the court sets a date and time for the hearing on the motion for writ of replevin.  The complaint and related documents are then served on the defendant along with the notice of hearing.  At the hearing, if the court grants the motion the plaintiff must then provide the court with a bond from a bonding company in order to be able to obtain the writ of replevin.  The bond amount must be twice the value of the collateral to be recovered.  Once the writ of replevin is issued by the court, it is given to the sheriff who then serves it on the defendant and recovers the collateral. This requires coordination with a repossession agent who can take actual possession of the collateral.  Once recovered, the collateral is sold and the lawsuit is pursued to conclusion, resulting in a final judgment confirming the plaintiff’s right to possession of the collateral and a monetary judgment against the defendant for any deficiency balance, if the plaintiff proves its case.

A forcible entry and detainer action may be plenary or summary in nature and can only be filed in the District Court.  In the plenary action, the complaint demanding possession of the equipment is filed with the court and served on the defendant.  If the defendant files an answer, then the parties may proceed with discovery, motion practice, and ultimately a trial, if needed.   If the summary forcible entry and detainer process is used, then the defendant is served with a complaint and a summons which has a return day for the hearing.  The defendant is not required to file an answer to the complaint but can simply appear on the return day and contest the matter.  The case is to be tried on the return day if the court schedule permits.  Hence, the summary procedure requires that the plaintiff have a witness available for trial on the return day if the defendant appears and contests the matter.  The parties can also be ordered by the court to participate in mediation on the return day, using court appointed mediators who are present on the return day to mediate cases.  Whether the summary or plenary procedure is used the result, if the plaintiff prevails, is the issuance of a writ of possession which is then served on the defendant by the sheriff, who demands possession of the collateral. No bond is required in a forcible entry and detainer action.

If you are a creditor in need of assistance in recovering collateral located in the State of Maine, the attorneys of Gosselin & Dubord, P.A. can assist you.  Please contact Attorney David R. Dubord at 207-783-5261, ext. 212 or drd@gosselindubord.com for more information or for representation.

Changes to Civil Orders of Arrest

On May 31, 2011, Governor LePage signed into law An Act To Enhance Enforcement of Civil Orders of Arrest. The Act takes effect on September 28, 2011. This Act gives a judgment creditor additional tools it can use in its attempt to collect on a judgment.

After a creditor has successfully won a judgment against a debtor, the next step is often a disclosure hearing. At a disclosure hearing, the creditor has the opportunity to either ask the court to an order providing for satisfaction of the judgment, including a specific monthly payment or the sale of certain assets of the debtor.

In many cases, the debtor does not appear in court throughout the collection process. If a debtor does not appear for a disclosure hearing, the creditor has the option of requesting that the court issue a civil order of arrest.  The civil order of arrest is given to the sheriff to serve upon the debtor, who ordered to appear in court on a specified date and time and who is usually released upon the personal recognizance as long as the debtor promises to show up at the court hearing date specified on the civil order of arrest.

The new law makes the following changes to the civil order of arrest process:

  • When a debtor is released on the debtor’s personal recognizance, the debtor must provide personal identifying information and employment information to be returned to the creditor with the personal recognizance bond.
  • If a debtor fails to appear at the date and time specified on the civil order of arrest, the creditor will be able to request that the court order the Department of Labor to provide to the creditor the debtor’s most recent employment information.
  • If the creditor requests that a second civil order of arrest issue, the debtor will not be able to be released on the debtor’s personal recognizance, but will instead have to be arrested and brought to the court for a bond to issue.

The new rules do not change the criminal penalty for failing to appear at the date and time specified on the civil order of arrest, which is a Class E crime. However, these enhancements will give a creditor more information  regarding the debtor’s employment, potentially allowing the creditor to obtain a wage withholding order from the debtor’s employer.  It is anticipated that these changes in the current law will also make it far less likely that a debtor will fail to appear for a disclosure hearing.

Maine Attorney Stanley Greenberg of Greenberg & Greenberg in Portland, Maine deserves special recognition for sheperding this new law through the legislative process.

The creditors rights attorneys at Gosselin & Dubord, P.A. are experienced litigators who have successfully prosecuted many collections actions on behalf of clients. If you have any questions regarding collection of judgments or need representation in connection with any creditor matter in Maine, please contact Attorney David R. Dubord at 207-783-5261, extension 212 or drd@gosselindubord.com.

BANKRUPTCY FILINGS INCREASING

According to records maintained by the United States Bankruptcy Court for the District of Maine, the number of new bankruptcy cases filed through the end of October, 2010, is almost 8% higher than the total number of new bankruptcy cases filed through the first ten months of 2009. The biggest percentage increase is in the number of Chapter 7 filings, which increased 9.8%, from 2779 cases for the first ten months of 2009, to 3053 cases for the first ten months of 2010. Chapter 13 filings increased 4.7%, from 467 to 489 over the same period. Chapter 11 cases for the same period decreased substantially, dropping 66% from 50 cases to 17 cases. The 2010 Maine filing statistics can be found at http://tinyurl.com/36raew7.

The trend in Maine filings is reflective of the trend in bankruptcy filings nationally where non-business bankruptcy filings have increased 14.4% over fiscal year 2009 and business bankruptcy filings have decreased 3.8% over the same period. The national filing statistics can be found at http://tinyurl.com/27mneop.

The attorneys at Gosselin & Dubord, P.A. located in Lewiston, Maine have extensive experience with creditor representation in bankruptcy matters and stand ready to assist you. Please contact Attorney David R. Dubord at (207) 783-5261 or drd@gosselindubord.com.

MAINECARE ESTATE RECOVERY ON THE RISE BUT EXEMPTIONS DO EXIST

MaineCare estate recovery is a program by which the State seeks reimbursement for the value of MaineCare benefits bestowed upon a now deceased individual. The MaineCare estate recovery program is mandated under federal law in order for the State to receive federal funding for MaineCare. The program is administered by the Estate Recovery Unit at the Department of Health and Human Services (DHHS). While DHHS is limited to the actual value paid by MaineCare to the deceased individual, recoverable assets include the real, personal, probate and non-probate property of the deceased beneficiary. These include assets which passed at death to the individual’s children, survivors, heirs or assigns.

In the last five years, the State has recovered more than $27 million through estate recovery, including nearly $8 million in the past year. There are a number of exceptions and exceptions to estate recovery, including care given, hardship or if the individual is survived by a disabled child, but such claims must be made by or on behalf of the deceased individual’s surviving family or Estate and within strict time limits.

Gosselin & Dubord, P.A. provides a full range of services to Maine’s senior citizens, their families and heirs, including MaineCare planning and assistance with MaineCare estate recovery appeals. If you have been contacted by DHHS’ Estate Recovery Unit regarding MaineCare benefits and would like to determine if you qualify for an exception or exemption, please contact Attorney David R. Dubord at (207) 783-5261 or drd@gosselindubord.com.

DEBT BUYERS BEWARE – PROPER DOCUMENTATION NEEDED TO PROVE TERMS AND CONDITIONS AND OWNERSHIP OF A CLAIM

Debt buyers must be able to provide documentation which proves the terms and conditions of the underlying debt and the proper assignment of the debt to the debt buyer in order to prevail in a contested debt collection case. In the case of North Star Capital Acquisitions, LLC v. Victor, 2009 ME 129, North Star Capital sued Peter Victor on a credit card debt which was originated by Capital One Bank. North Star filed a motion for summary judgment supported by an affidavit stating the existence of the credit card account and the amount of the debt at the time of its assignment to North Star. Attached to the affidavit was a credit card statement from the time of chargeoff by Capital One Bank. Mr. Victor challenged the District Court’s entry of summary judgment against him, arguing that North Star failed to prove ownership of the account and the amount due. Noting that North Star’s summary judgment filings failed to “provide any documentation or other proof of the original loan, the terms and conditions of the original loan, or its assignment to North Star,” the Maine Law Court held that the entry of summary judgment against Mr. Victor was inappropriate, as he had properly raised genuine issues of fact regarding the debt at issue.

Debt buyers often are unable to obtain full documentation for assigned claims. Most often, the original credit card application or signed credit card agreement are unavailable because the original creditor did not retain the documents or the account was established without a signed agreement, as in the case of telephonic applications. If the terms and conditions for the account are available, the debt buyer can often prove its case based on the common credit card terms and conditions which state that the debtor’s use of the card is evidence of the debtor’s agreement to the terms and conditions, thereby establishing liability for the account. If the terms and conditions are not available, however, the debt buyer will have great difficulty in prevailing on a contested claim. In the case of non-credit card claims, proof of liability on the account without documentation may not be possible at all.

The creditors rights attorneys at Gosselin & Dubord, P.A. are experienced litigators who have successfully prosecuted many assigned debt cases on behalf of debt buyer clients. If you have any questions regarding collection of assigned debts or need representation in connection with any creditor matter in Maine, please contact Attorney David R. Dubord at 207-783-5261, extension 212 or drd@gosselindubord.com.