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West Paris hopes to collect taxes from failed oil business/Property up for public sale June 19
WEST PARIS — The town is hoping to collect more than $11,000 in taxes owed to it by Jordan and Wainwright Oil Company Inc., a failed heating fuel company with property holdings in West Paris.
The company – commonly referred to as "J&W Oil" – was the subject of consumer complaints between 2009 and 2011 that it did not deliver oil purchased by customers and is no longer in operation.
The company's West Paris property, at 88 Bethel Road, is in foreclosure and is due to be auctioned by the mortgage holder, Bethel Road Holdings, in June.
The West Paris property is owned by Western Maine Energy, LLC, a Rumford-based company DBA J&W Oil, according to Jacob Manheimer, a lawyer from Pierce Atwood, the firm representing Bethel Road Holdings.
According to West Paris Town Manager John White, J&W Oil has not paid its personal property tax in four years. J&W Oil currently owes the town of West Paris a principal amount of $5,977.86 in personal property tax, including $982.36 in interest.
The real estate taxes on the property amount to $4,632, for two years. J&W owes the town $390.85 in interest, White said.
That is on top of $1,600 in oil the town purchased from J&W that was never delivered.
White said the town was hopeful it could collect the real estate taxes owed on the property, but reclaiming all the personal property taxes was less certain.
The town placed a lien against the property in June 2012 for unpaid taxes in 2011, White said. The real estate taxes are protected by the lien and will be paid off once the property's sale is finalized, White explained.
"Debt will always be attached to that building, regardless of who actually owns it," White said.
Personal property taxes, however, cannot be protected by a lien, White said. That means there is no certainty the town will fully recover the nearly $7,000 owed it by J&W.
The town's attorney Geoff Hole of Portland law firm Bernstein Shur has filed with the Department of Secretary of State's Uniform Commercial Code, U.C.C., to work with creditors to collect the personal property taxes, White said.
"We are in hopes that we ... get the whole thing, but it may be a lot less," White said of the personal property taxes. "We had to file [with U.C.C.]. They are taxes that are due to the town."
As for the $1,600 owed the town in oil by J&W, there is little hope the town will be reimbursed.
A couple of years ago, when it came time for West Paris to put its heating oil out to bid, it chose J&W Oil, which had just moved to town from Mechanic Falls, White said.
Selectmen signed a pre-purchase agreement with J&W and had made two payments to cover the next two years.
Under the agreement, any of the oil not used by the town for those purchases would be returned to the company, White said.
According to White, the town ended up with a balance of more than $1,600 in oil that J&W never delivered in the winter of 2010-2011.
"We tried to have them give it [back] to us in cash, or even oil," White said.
"We talked with them a number of times and they [J&W] seemed willing to settle," White explained – but the company never budged.
White said he was familiar with other customers encountering problems with J&W Oil.
"We have had calls ... of people who had not received all of their pre-buys and were told to go to the Attorney General," White explained.
According to Martha Demeritt, a complaint examiner at the Consumer Protection Division of the Attorney General's Office, J&W Oil failed to deliver heating oil to a number of its customers under pre-paid contracts.
The company has received a total of 22 complaints filed about its service since January 2009 through October 2011, Demeritt reported.
She said those 12 of J&W's customers have still not been reimbursed nor have they had their orders fulfilled. The credit balances on these accounts up to $5,927.05, Demeritt said.
According to a 2011 story in the Advertiser Democrat, the Better Business Bureau of Boston, which covers eastern Massachusetts, Maine, Rhode Island and Vermont, said J&W Oil has received far more complaints – 12 from 2009-2011 – than any other company of its type.
In November 2012, the Attorney General's Office took action against J&W and signed an "assurance of discontinuance" with the company.
Under the agreement, J&W agreed to not accept payments from customers for a period of three years and reimburse its customers by March 31, 2012. It also could not advertise it sells pre-paid heating fuel plans.
The agreement states that "J&W Oil neither admits nor denies their actions described above constitute unfair and/or deceptive trade practices in violation of 5 M.R.S. 207, but acknowledges that it has had financial problems related to its heating fuel business. J&W Oil denies any intentional wrongdoing."
Multiple attempts to contact representatives of J&W Oil or Western Maine Energy to comment on the foreclosure or unpaid taxes were unsuccessful.