STUDY SHOWS INCREASE IN LEGAL NEEDS OF MAINE’S SENIOR CITIZENS

A new study has confirmed that the legal needs of Maine’s senior citizens will soon outweigh available resources.  In the next five to ten years, up to half of Maine’s older population will find themselves in need of legal services.  Current legal service options for elderly Mainers, especially lower income Mainers, will not be sufficient to meet the increased demand.

For more information, please see: http://www.sunjournal.com/state/story/931371?sms_ss=email&at_xt=4cc896ed9c1c24bb,0

Gosselin & Dubord, P.A., provides a full range of services of services to Maine’s senior citizens, including elder law, wills, powers of attorney, MaineCare/Medicare planning, estate planning and probate. If or a loved one you have any questions or need representation in connection with any elder law or probate matter in Maine, please contact Attorney David R. Dubord at (207) 783-5261 (extension 226) or drd@gosselindubord.com.

DON’T LET THE BEDBUGS BITE: UPDATES TO MAINE LANDLORD-TENANT LAW ON BEDBUG INFESTATION

Bedbugs have become the subject of widespread attention throughout the country. Current owners or prospective purchasers of residential rental properties (including single-family homes) need to be aware of a statute adopted in Maine in 2009 and updated this past summer regarding the treatment of bedbug infestation in rental property.

Under the statute, once a tenant notifies a landlord (the notice does not need to be in writing) that a unit may have a bedbug infestation, the landlord must conduct an inspection of the unit within 5 days. Upon a determination that an infestation exists, the landlord must contact a certified (and insured) pest control agent within 10 days. The landlord is obligated to “take reasonable measures to effectively identify and treat the bedbug infestation” as determined by the pest control agent, and must employ the agent to treat the infestation.

The statute also prohibits a landlord from offering a dwelling unit for rent that the landlord knows or suspects is infected with bedbugs. Further, the landlord is required to disclose to a prospective tenant if an adjacent unit is infested or is being treated for bedbugs and upon request from the tenant, the landlord must also disclose the last date that the dwelling unit the landlord seeks to rent or an adjacent unit was infested and found to be free of infestation.  In addition, the statute requires a landlord to offer “reasonable assistance,” including financial, to a tenant who is unable to comply with requested bedbug inspection or control measures.  Such assistance is mandatory where necessary but is subject to a repayment schedule.

The statute also imposes obligations upon the tenant, beginning with the prompt notification of the landlord when the tenant knows or suspects a bedbug infestation.  Upon receiving a reasonable request from the landlord for access to the unit (including the reasons for and the scope of the request), the tenant must grant the landlord and its pest control agent access to the unit for inspection or control. The initial inspection is limited to a visual and manual inspection of the tenant’s bedding and upholstered furniture with some exceptions. If the pest control agent finds bedbugs, the agent may have additional reasonable access to the tenant’s personal belongings. The tenant is further required to comply with reasonable measures to eliminate and control an infestation as set forth by the landlord and the agent. If the tenant unreasonably fails to comply with the pest control measures, the tenant may become financially responsible for all further pest control measures.

The law imposes strict penalties upon a landlord for failure to comply, including a civil penalty of $250 or actual damages, whichever is greater, plus reasonable attorney’s fees. A landlord’s failure to comply with the statute within 6 months of the filing of an eviction action against the tenant also creates a rebuttable presumption the action was commenced in retaliation against the tenant’s rights, making eviction difficult. Finally, the landlord’s failure to comply with the statute constitutes a finding that the landlord has reasonably failed to take prompt effective steps to remedy a condition that endangers or materially impairs the health and safety of a tenant in a civil action filed by the tenant against the landlord.

With no evidence that the widespread bedbug infestation will abate anytime soon, and in light of the ambiguity of several sections of the statute’s revisions, we expect that the bedbug will become the subject of much litigation in Maine.  The attorneys at Gosselin & Dubord, PA., have represented both commercial and residential landlords for more than thirty years and welcome calls from property owners who are in need of assistance in dealing with bedbugs.  If you have any questions regarding bedbugs or need representation in connection with any landlord-tenant matter, please contact Attorney Paul R. Gosselin at (207) 783-5261 (extension 217) or prg@gosselindubord.com.

SEPTEMBER DECLINE IN CREDIT CARD CHARGE-OFF RATES

September saw significant improvement in credit card charge-off rates at major U.S. banks as well as improvement in delinquencies. 

For more detailed information, please see: http://www.insidearm.com/go/arm-news/credit-card-charge-offs-decline-at-major-issuers-in-september

The creditors rights attorneys at Gosselin & Dubord, P.A. are experienced litigators who are prepared to answer any questions regarding the collection of unsecured debt, including accounts receivable, credit card and medical receivables.  If you have any questions regarding unsecured debtor or need representation in connection with any creditor matter in Maine, please contact the Attorney David R. Dubord at (207) 783-5261 (extension 212) or drd@gosselindubord.com.

CALCULATING INTEREST IN CIVIL ACTIONS

Creditors are keenly aware of the time value of money. Delay in the collecting of a debt without compensation in the nature of interest results in a continually decreasing rate of return for the person or entity to whom the money is owed. In Maine, a creditor is entitled to collect interest on a debt if the creditor can prove that there is an agreement with the debtor for the payment of interest on the principal amount due the creditor or, absent such an agreement, a statute specifically provides for the recovery of interest.

Maine statutes allow for the award of interest to a creditor who files a civil lawsuit and subsequently obtains a judgment on the claim. In fact, the Maine Supreme Judicial Court has found that the award of statutory interest to the prevailing party in civil actions is a matter of right. Ginn v. Penobscot Co., 342 A.2d 270, 278 (Me.1975). Under Maine law, different criteria apply to the award of prejudgment and post-judgment interest.

Prejudgment interest in civil actions is governed by 14 M.R.S. § 1602-B. “Section 1602-B is broad in scope, and applies to all civil actions except small claims actions and actions involving a contract or note that already contains an interest provision.” Avery v. Kennebec Millwork, Inc., 2004 ME 147, ¶ 7, 861 A.2d 634, 636 (Me. 2004). In those cases (other than small claims cases) where there is no agreement for the payment of interest, prejudgment interest is calculated at the rate of the one-year United States Treasury bill rate plus 3%. This rate is adjusted at the beginning of each year based on the weekly average treasury bill yield for the last full week of the prior calendar year. The applicable rate can be easily ascertained by contacting any of Maine’s clerks of court. In any case (including small claims cases) where there is a contract or note which provides for interest on the debt, then prejudgment interest is calculated at the rate specified in the contract or note in effect on the earlier of the date when the complaint is filed with the court or the date on which a notice of claim has been given to the defendant in accordance with the terms of the statute. Prejudgment interest is not allowed in small claims cases which are not based on a contract or note that provides for interest.

Post-judgment interest in civil actions is governed by 14 M.R.S. § 1602-C. In those cases (including small claims cases) where there is no agreement for the payment of interest, post-judgment interest is calculated at the rate of the one-year United States Treasury bill rate plus 6%. As in the case of prejudgment interest, the post-judgment rate is adjusted at the beginning of each year. In any case (including small claims cases) where there is a contract or note which provides for interest on the debt, then post-judgment interest is calculated at the rate specified in the contract or note in effect on the date of the judgment or at the rate of the one-year United States Treasury bill rate plus 6%, whichever is greater. Prejudgment interest is not included in the amount used to calculate post-judgment interest. 14 M.R.S. § 1602-B(6).

In all cases, the judgment must specifically state the applicable prejudgment and post-judgment interest rates. The interest rate statutes allow for the suspension of interest during any period of time in excess of 30 days when the case is continued at the request of the prevailing party. The interest rate statutes also allow the court to fully or partially waive prejudgment and post-judgment interest on petition of the nonprevailing party and on a showing of good cause. The interest rules discussed in this article apply to all cases where interest begins to accrue after July 1, 2003.

The creditors rights attorneys at Gosselin & Dubord, P.A. are experienced litigators who are prepared to answer any questions regarding interest rates in civil actions. If you have any questions regarding interest rates in civil actions 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.

WHEN CAN A BANK OR CREDIT UNION EXERCISE ITS SETOFF RIGHTS IN A CUSTOMER’S DEPOSIT ACCOUNTS?

Banks and credit unions accept deposits from and lend money to their customers. When customers fail to repay loans owed to the financial institution or become indebted to the financial institution for overdraft or other charges on their deposit accounts, the bank or credit union often seeks to recover monies owed to it by taking funds from the customer’s deposit account(s). This self-help recovery method is often referred to as a right of setoff. This setoff right can arise by operation of law and/or by agreement between the financial institution and its customer.

In Maine, financial institutions have a common law right of setoff which was first expressly recognized by Maine’s highest court in 1973. In the case of Joler v. Depositors Trust Company, 309 A.2d 871 (Me. 1973) the Maine Law Court recognized and adopted as Maine law the principle that “‘[w]hen . . . (the depositor) owes to the bank independent debts, already due and payable, the bank has the right to apply the balance of his general account to the satisfaction of any such debts of his.’” (Quoting National Mahaiwe Bank v. Peck, 127 Mass. 298, 300, 301 (1897)). Therefore, without advance notice to the customer, the financial institution can take funds from the customer’s deposit account to satisfy a debt owed to the financial institution.

The financial institution’s right to setoff is not without limitation, however. In the context of consumer debts covered by the Maine Consumer Credit Code, the financial institution must first give the customer a legally sufficient notice of right to cure which specifically includes a reference to the financial institution’s right to setoff against deposit accounts if the customer does not cure the default within the allowed cure period. Also, the financial institution may have limited or no rights to setoff funds held in special purpose accounts, qualified retirement accounts, and jointly held accounts. Federal law also prevents setoff to satisfy a credit card debt and most credit card agreements specifically incorporate this prohibition.

Before exercising setoff rights against a customer’s deposit accounts, a financial institution should carefully examine all of the facts underlying the proposed setoff including the contract documents giving rise to the setoff, the nature of the deposit account against which a setoff is to be processed, and the law applicable to the proposed setoff transaction.

If you are a financial institution in need of advice regarding setoff rights involving depositors with accounts located in the State of Maine, the attorneys at Gosselin & Dubord, P.A. located in Lewiston, Maine have extensive experience with creditor representation and stand ready to assist you. Please contact Attorney David R. Dubord at (207) 783-5261 (extension 212) or drd@gosselindubord.com.

CHANGES TO MAINE SMALL CLAIMS ACT ADVANTAGEOUS TO DEBT BUYERS

In 2009, the Maine Legislature made several changes to the Maine Small Claims Act, 14 M.R.S. § 7482 et seq. which changes became effective on June 13, 2009. The change which has attracted the most attention was the increase in the amount which can be considered a small claim from $4,500.00 to $6,000.00. This change was in keeping with the Legislature’s express intent that the monetary limit for small claims actions be reviewed every four years and adjusted as necessary to keep pace with inflation. See 14 M.R.S. § 7482.

Another significant change to the Maine Small Claims Act which did not receive as much attention but which opened the door for an increase in the filing of small claims actions was the Legislature’s recognition that a creditor could reduce the amount of its claim to meet the jurisdictional limits of the Maine Small Claims Act. 14 M.R.S. § 7485. For example, if a creditor has a claim in the amount of $6,600.00, exclusive of interest and costs, the creditor can choose to sue for the principal sum of $6,000.00 and elect to waive the balance of its claim. Prior to this change in the Small Claims Act, creditors attempting to waive the amount of their claims above the jurisdictional limit then in effect had increasingly been rebuffed by judges who ruled that a waiver was not allowed and that claims in excess of the jurisdictional limit could not be heard in small claims court even if the parties agreed to submit the claim at a reduced amount.

These two changes to the Maine Small Claims Act have resulted in a significant increase in claims being filed with the court, especially by debt buyers. Statistics maintained by the Maine Judiciary indicate that small claims filings increased statewide by 28% in 2009 over 2008, reaching a new all-time high of 11,392 small claims cases filed that year. A review of local court dockets reveals an increasing number of cases where debt buyers are plaintiffs. Debt buyers who purchase credit card and deficiency balance claims hold a high volume of claims that are under or slightly above $6,000.00 in amount. Such claims can now be processed at a much lower out of pocket outlay to creditors compared with the conventional pursuit of such claims by civil action as opposed to the small claims process. The small claims filing fee is $50.00 per case compared to a $150.00 filing fee for civil actions. Post-judgment disclosure filing fees are also less in small claims actions, where the filing fee is $15.00 per defendant compared to $60.00 for non-small claims disclosures. Given the significant volume of cases processed through the courts by debt buyers in particular, these lower filing fees result in a substantial reduction in capital outlay for litigation.

In recognition that debt buyers are increasingly using the small claims process, another change that the Maine Legislature also enacted in 2009 to the Maine Small Claims Act was the requirement that a plaintiff include with the small claims complaint a statement listing the name and address of the original creditor if the debt being collected was purchased by the plaintiff. 14 M.R.S. § 7484-A(3). This new requirement, which places minimal additional burden on debt buyer plaintiffs, should reduce confusion among defendants regarding the nature of the debt that is being collected, thereby hopefully reducing the number of disputed cases that the court must deal with.

The 2009 changes to the Maine Small Claims Act were intended, in the words of the Legislature, to “increase access to justice . . ..” PL 428 Sec. 4. These changes, coupled with the previous Legislative mandate that the Maine Supreme Judicial Court not enact any rule which restricts the number of claims that may be filed in any given period, seem to be achieving their desired intent.

If you are a debt buyer or lender in need of assistance with collection of small claims accounts involving debtors located anywhere in the State of Maine, the attorneys at Gosselin & Dubord, P.A. located in Lewiston, Maine have extensive experience with collection matters and stand ready to assist you. Please contact us at (207) 784-0037 or collections@gosselindubord.com.