The Marianas Office does a lot of defense in consumer collection cases. Still, there are hundreds and hundreds of cases where poor people default on claims against them and end up in deeper debt. The CNMI law is not consumer friendly. For example, post-judgment interest is 9%--and this is typically put on not only principal, but pre-judgment interest and attorney's fees and costs. This exorbitant interest rate far exceeds any likely return creditors would get on their profits, if prudently invested, so they continue to have great incentive to improvidently extend credit and then take draconian measures to collect on their debts.
In a recent case, the creditor, represented by attorney Mike White, got a default judgment and then tried to seize the debtor's bank account at First Hawaiian Bank ex parte based on 7 CMC 4104. In other words, because the creditor got a default, it tried to also get the debtor's funds on deposit without any further notice.
The consumer had defaulted; had no attorney; and no one to interpose any objection.
In this case, however, the Honorable Joseph N. Camacho, judge of the Superior Court, questioned the creditor's counsel on his legal authority to take such collection action. WOW! This is new ground for a CNMI judge in a default consumer debt case.
In the end, the Court held that it was not convinced the creditor could just swoop in and take the funds without notice, an opportunity to be heard, and some effort to protect exempt funds, such as wages or salary necessary for the support of the judgment debtor or his or her dependents, or funds protected by federal law like Social Security, or by CNMI law like NMIRF funds.
A footnote in the decision adds emphasis to the need, even in writs of execution, to include adequate notice about exemptions.
MLSC was not involved in this case. But it's not the first time we have seen this particular creditor's counsel try this tactic. In the past, when a Superior Court judge just rubber-stamped such an application, MLSC sued in federal court to stop execution of the seizure. (Kochi v. Superior Court, http://www.nmid.uscourts.gov/documents/decisions/1-02-cv-00054-105.pdf) This attorney KNOWS that the US federal district court has declared the statute unconstitutional as he was applying it, and yet he has continued to try to do so.
MLSC can't be everywhere. So many consumer debtors go unrepresented simply because they never come to see us. It's good to know the Superior Court is now looking a little more cautiously at such attempts. It's unfortunate, however, that it didn't even mention the existing federal court decision on the very statute at issue.