Having financial issues with boarders is a common problem in the horse industry. Often, a boarder will get behind on monthly board payments but what happens when a boarder seemingly pays his/her bills, but in fact turns out to be writing fraudulent checks to barn owner? The appearance is that the boarder is taking care its financial obligations but in reality, he/she may be acting in a fraudulent manner to avoid paying his/her bills. What recourse does the barn owner have before moving forward with a full blown lawsuit? In Kentucky, among other options and legal remedies, enter KRS Section 514.40, Theft by Deception. This KY statute provides among other things, that an individual will be considered guilty of theft by deception when an individual issues a check knowing that it will not be honored (e.g. boarder writes a check on an account that is closed, boarder writes a check on fake checks, boarder writes a check to an account knowing that there are insufficient funds to satisfy obligations). The statute goes on to explain that an individual in violation of this statute may also be guilty of a Class A, C, or D misdemeanor depending on the amount of the check ranging from $0-$10,000+. Notice requirements must also be satisfied pursuant to the statute and the local county attorney should also be contacted. The guilty party has 10 days to correct the issue after notice, as well. Subject to the individual facts and circumstances, the barn owner should consider notifying the boarder in writing, specifically identifying the bad check(s), specifically noting the violation of KRS Section 514.40 and the repercussions of the same, that the boarder has X days to correct the issue, and that the matter will be pursued to the fullest extent by the law.
To recap, if a boarder writes a bad check, consider taking the following steps under KRS Section 514.40: (1) Notify the boarder in writing that it has violated KRS 514.40 and if he/she fails to correct the issue within the time prescribed by the statute, he/she may be guilty of Class X misdemeanor (depending on amount of check, as noted above) and subject to criminal prosecution by the County Attorney’s office;and (2) Notify the local county attorney’s office and mail a “legal copy of the check(s)” – front and back – to the local branch making sure that the check is stamped noting the reason that it was declined (e.g. insufficient funds, closed account, non-existing account #, etc.); and (3) consult with an attorney, as appropriate to ensure compliance with the legal requirements of the statute are met.