Debt cases max out Vt. courts
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By Brent Curtis Staff Writer - Published: November 8, 2009
Perhaps there's no better sign of the tough economic times in Vermont than the long dockets in the state's court system.
Already shouldering a high percentage of debt cases before the start of the recession, Vermont's superior and small claims courts have had to deal with a sharp increase in their caseloads while balancing budget cuts and furlough days that have made it harder to keep up, court administrators say.
The increased work comes after years of cutbacks and streamlining in order to meet shrinking state budgets. While it is impossible to calculate how much more debt cases are costing the court system, the burden is significant both in time and money.
Any debt case exceeding $5,000 in damages goes to superior court, anything less than $5,000 to small claims.
"Seventy percent of our caseload before the recession involved foreclosures, collections and tenant-landlord issues," said Rutland Superior Court clerk Therese Corsones. "I think it's fair to say our caseload for debt-related cases has become even more lopsided since the recession began."
A breakdown of the docket in Rutland illustrates her point.
Between 2007 and 2008, the number of debt-related cases in Rutland's Superior and Small Claims courts increased 11.6 percent from 880 to 982. At the end of October, Corsones recorded 911 debt cases on her docket, with a projected year's-end caseload of 993 debt cases, which would amount to only a 1 percent increase between recession years.
In Chittenden Superior Court, clerk Diane Lavallee said the increased load of debt cases on her docket has been just as dramatic since the start of the recession.
In 2007, Lavallee said her court dealt with 2,027 small claims cases — 1,910 of which dealt with collections. In 2008, the caseload ballooned 27 percent to 2,577 — 2,477 of which dealt with debt collection.
"We're dealing with an incredible amount of credit card cases," Lavallee said.
Foreclosure cases increased dramatically in Chittenden County, as well, with a 44 percent increase in the caseload between 2007 and 2008, when foreclosures filings jumped from 182 to 262. With 256 foreclosures submitted so far this year, Lavallee said she expects the number to be higher by year's end.
In Rutland, foreclosures actually represent a shrinking portion of debt cases. The number of foreclosures increased almost 65 percent from 161 in 2007 to 265 in 2008. But with only 193 foreclosures filed by the end of October, Corsones estimates that the number of foreclosures by the end of the year would fall significantly short of last year.
At the same time that Corsones, Lavallee and other court clerks statewide are juggling more cases, they're doing so with fewer court days to hear them.
Under orders from the Legislature to trim $1 million from its budget, Vermont's judiciary branch decided to close an additional 12 days during the fiscal year to save roughly $400,000.
The cuts, combined with the bigger caseload, have kept court officials busy, Corsones and Lavallee said, but the burden has been manageable, they agreed.
"We're keeping up," Corsones said.
Robert Greenmore, the top administrator for Vermont's judicial system, said the recession has been a factor in putting additional cases before the state's criminal and family courts, as well.
Greenmore, who has been part of a judicial committee working to find ways to trim the remainder of the $1 million in cuts, said he wasn't worried about the courts' ability to handle the increased workload in a timely fashion.
"It's tough times right now and it's not easy on anybody but we're pulling through," he said.
On the bright side, Corsones said the recession has tested the mettle and proven the importance of a pilot project in Rutland County that has provided legal services to those unable to afford them.
Put in place last year, the pilot project uses grants from the Vermont Bar Foundation to pay reduced fees to lawyers who accept roughly one-third their usual fee to represent clients who can't afford legal counsel.
Considering the high number of debt cases in the court, the service, which had provided counsel to 159 people by the end of October, has made a big difference, not only for its clients but for the court, Corsones said.
"It's been helpful in a lot of ways," she said. "Things go more smoothly in cases when there's a lawyer involved."
In Rutland County's Small Claims Court, Assistant Judges Marlene Burke and Jean Coloutti said the volume and complexity of credit card collection cases they've heard prompted them to seek extra training to ensure both creditor and debtor get a fair shake.
Their main concern was untangling the chain of evidence that proved individual defendants owed money to the credit card company taking them to court. While the connection might sound simple, the practice of bundling and selling debt — a common practice in the industry — can make it hard to connect the dots.
"If you acquire $800 worth of debt on your (credit) card and you don't pay, eventually the credit card will sell your debt to a collection agency for pennies on the dollar," Coloutti said. "Your debt could be bundled and sold over the course of years before it goes to court, so it's not as simple as saying just because someone showed up in court they must owe a creditor money."
The simple way to prove ownership of a debt is for a credit company to produce a contract and chain of assignment linking the defendant to the debt held by the credit card company, Coloutti and Burke said. On more than a few occasions, credit card companies haven't been able to meet that burden of proof, the assistant judges said.
"Now that we've been through the training, we know to ask for the contract and if they can't produce it, we're going to dismiss it," Burke said.
Which is why it always behooves a defendant in a credit card collection case to come to court, they said.
"It's always to their advantage to show up," she said.
Lawyer Gwendolyn Harris, who represents credit card companies in courthouses statewide, said from what she has seen, Vermonters are in better shape credit-wise than residents in other New England states.
"Vermonters have the highest monthly payment plan of all six New England states," said Harris, whose firm handles collection cases throughout the Northeast. "I think the people of this state aren't irresponsible. They're hard-working folks who lost their jobs, became disabled or became burdened with other hardships beyond their control."
brent.curtis@rutlandherald.com
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