Evansville-Vanderburgh County schools suing hundred of families for unpaid fees

But over three months this year, Evansville Vanderburgh School Corporation officials sued nearly 500 families and individuals over unpaid balances for textbook and netbook/laptop rentals, meals and daycare services. The money owed EVSC ranged from $21 to more than $1,400, according to court records filed in March, April and May.

The people ensnared in EVSC’s net include some who say they can’t afford to pay and some who swore they didn’t know they owed anything – including one of Evansville’s most prominent residents.

“There’s a Small Claims against me? I was completely unaware,” said Lynn Miller Pease, chief executive officer of Leadership Evansville.

Online court records show EVSC never served Pease with a complaint, likely because that data shows what she calls an “old, old” address. No Small Claims judgment is possible when complaints are not served. Small Claims Court data indicated Pease owes $203.60.

Other individuals sued told the Courier & Press they can’t afford to pay.

What began as a $74 debt for Evansville resident Karla Keese ballooned to $290 with court costs, the $75 minimum attorney fee and 8 percent interest per annum that accrues until payment. The latter figure incentivizes quicker payments and compensates EVSC for waiting to get paid. The attorney fee is paid when the debtor pays.

Keese works two jobs and lives with her mother to save money. She doesn’t have $290 to give EVSC right now. She said she had no clue that a default judgment was rendered against her in May — although that could not have happened unless a judge believed she was properly served with a complaint.

“My kids, the last two years that they were in EVSC, they were on free lunches and free textbooks,” Keese said. “The last time anybody (in her family) has been in the EVSC has to have been three or four years ago -- so I don’t have any idea what I could have owed them for.” 

Textbook and netbook/laptop rental charges are not charged to any student who receives free or reduced price meals.

Newburgh resident Michon Hemenway admits she got EVSC’s notices about what is now a $391 debt with the extra fees. But Hemenway, a medical claims analyst who has since moved out of EVSC’s system, said she couldn’t pay because she was “working on and off.”

“I was really blessed because I came into some money recently and I’m able to clear things like this,” she said. “Otherwise, I’d still be wondering what I’m going to do.”

Giavanna Moneer, a middle school art teacher in La Grange, Kentucky, owes $513 that she said she can afford to pay down at $20 per pay period.

Moneer, who attributed the debt to “book fees and lunches” for her two children, said she wasn’t working from May until October.

“I had to cash in my 401(k) so I could make it through this summer,” she said.

Karla Keese feels oppressed by the weight of the $290 she owes EVSC.

“I’m going to have to either pay it or dispute it, but I don’t have the money for a lawyer to dispute it, so I guess I’m going to have to pay it,” she said.

The impact

EVSC never wanted it to come to this, said the school corporation’s spokesman, Jason Woebkenberg.

It is a message Woebkenberg recites tirelessly in response to questions about EVSC’s Small Claims lawsuits. And in case the message still doesn’t get through, he says it again: EVSC bends over backward to avoid taking people to court.

But in the end, school corporation officials say they can indulge debtor families only so much. There are food service, textbook rental and daycare departments to run for all students, not just those with negative balances. And there’s reality: EVSC must pay for labor, food and other resources. The three school corporation departments spent a combined $17 million in fiscal year 2016-17.

“Once we’ve worked and worked and worked with a family and tried to create a payment plan, ultimately, unless they're qualified for free lunches, the payment has to be made,” Woebkenberg said. “If somebody -- in spite of multiple contacts, and in spite of many flexible payment options, just doesn't pay anything -- then we have an obligation to turn that over.”

The actual impact of unpaid balances on EVSC's overall financial position is modest -- at least in food services, by far the largest of the three funds with unpaid balances generating lawsuits.

The school system reported $55,970 in unpaid student meals as of early December, a figure that carries over yearly but doesn't include debts turned over for collections. It's not pocket change, but it's also not a back-breaker for a food services department that spent nearly $12.8 million on operations in 2016-17.

‘We'll take a dollar a week’

Professing themselves reluctant to complicate the lives of parents who owe money -- and perhaps sensitive about the optics of suing people who are economically disadvantaged -- EVSC officials do throw several lifelines to debtors that could keep them out of court.

The low figures involved bespeak the sensitivity of the endeavor.

The school corporation mails a letter explaining payment options twice yearly to anyone who owes at least $20 for meals. By the time the letter arrives, Woebkenberg said, families will have had numerous contacts with schools – cafeteria managers and other staff.

Using the U.S. Postal Service gives EVSC another mode of contact, given a reality nearly everyone acknowledges: Notes sent home with students don’t always get there.

Every two weeks, the school corporation sends robo calls to households of students with negative meal balances of at least $10.

All along the way, Woebkenberg said, school system officials are trying to induce parents to enter into payment plans. EVSC will take nearly any deal that yields money.

“We'll take a dollar a week,” he said. 'I mean, we will set up very small amounts -- but yes, you can't say, 'I'll pay $5,' and then six months later, we haven't had any money turned in. There has to be some consistency -- but even in that example, if somebody gives us $5, if they call the school and they say, 'I can't pay $5 this week but I'll pay it next week' -- and they pay the next week, it’s no problem at all.'

But there comes a moment of truth when individual schools reach out to EVSC for guidance about a chronic debtor, and the decision is made to turn the file over to Cox Law Office of Evansville for collections.

It’s right there in EVSC’s Cafeteria Meal Charging Guidelines: Warning letters go to households that are at least $50 in arrears. “If there is no attempt to make a payment (partial payments are accepted) within a two-week period of time, the negative meal account balance will be turned over,” the guidelines state.

The $50 policy applies to everyone except the 49 percent of EVSC students who receive free meals through the federal government’s free-and-reduced-lunch program.

EVSC officials are quick to say they will put together payment plans for those who hit the $50 threshold -- but clemency has its limits.

Even the 9 percent of families who pay reduced student meal prices – 40 cents for lunch for all grade levels and 30 cents for breakfast – can find themselves in collections if their debt reaches $50 and they aren't making payments. So can families who are eligible for free or reduced price meals – perhaps becoming eligible after a life-changing circumstance – if they run up negative balances before filling out an application.

There is no dollar figure at which EVSC takes action to collect unpaid textbook and netbook/laptop rentals. Those payments are expected by the end of a school year.

Last chance

Very few of EVSC’s 475 debtors have actually paid the amounts Small Claims judges found they owe -- which means, among other things, that Cox Law hasn’t collected court-awarded attorney fees. EVSC doesn’t pay that fee upfront upon judgment.

Typically $75, the attorney fee is Cox Law’s only compensation for generating and sending demand letters, negotiating with defendants and investigating their whereabouts. EVSC doesn’t pay the law firm.

All of this is very much to the point for Robert Garwood, a former Cox Law Office attorney who said he filed suit against, or negotiated with, 2,000 families for EVSC in 2016 and 2017.

Garwood said Cox Law begins every case by sending its own demand letter and waiting 30 days for a response. The intent is to help debtors avoid the court costs that come with default judgments. After all, the lawyers don’t get that money. It goes to the court.

Coming after all of EVSC and individual schools’ outreach efforts, the demand letter is a last chance to avoid litigation.

“We’re not trying to be the bad guy,” Garwood said. “We’re just trying to get back the money that EVSC is in the negative on, at least on your account, and who knows how many other children’s accounts.”

Some debtors pay what they owe after receiving Cox Law’s letter. Those people are making the collections work “sustainable” for the lawyers, Garwood said.

Some debtors are really, genuinely, indigent. Garwood said EVSC sometimes asked him to dismiss book rental cases after determining a defendant should have applied for free or reduced price services. Other people can pay relatively small amounts, and they will if the alternative is going to court.

And then there are the people who simply refuse to pay anything. Having made the work a large part of his practice for the past two years, Garwood has seen enough of those. He gave voice to his long-simmering frustration.

“There are just a lot of people out there saying, ‘I don’t care if this has to come out of taxpayers’ pockets,’” he said. “They say, ‘I don’t care if this is impinging on anybody else’s right to have books or putting a strain on EVSC.’ They just don’t pay.”

There are consequences for ignoring Cox Law’s letter.

If process servers cannot find a defendant, Cox Law engages a search engine service and sends a letter to the U.S. Postal Service to root out newer addresses. If that doesn’t work – and if a debtor owes $500 or more -- Cox seeks EVSC approval to use private investigators to dig into credit reports.

“It could be reported to a credit bureau. Do we at our office do that? No, but there are runners that I believe go over to the court and get up-to-date dockets so that they can constantly generate things for credit bureaus,” Garwood said.

“You’re certainly going to have a judgment lien placed on any property you currently have -- realty or property that is entitled to a lien of that nature.”

But those things don’t mean much to someone who has few assets and even fewer scruples about ignoring a bill. Property tax liens and credit scores don’t resonate in some households.

There’s only so much EVSC can do about some chronic debtors, said Pat Shoulders, the school corporation’s longtime general counsel.

“You can garnish somebody’s wages, but in this country, unlike what we all learned in school, we don’t have debtors prisons,” Shoulders said. “People can (fail to) pay and, if they don’t have any money, then you just can’t collect it. Bankruptcy is in the United States Constitution.

“They can discharge all their debt and in the end, the taxpayer -- the people who support public schools -- are the people who lose.”

Shannon Hall contributed to this story.