Current as of: 2009 Chapter 75D: Section 14. Damages; license surety bonds; other forms of indemnificationSection 14. Any pupil of a private business school, who is misled by an officer or representative of said school, or by any advertisement or circular issued by said school, which representation is false, deceptive or misleading, may recover treble damages, or one thousand dollars, whichever is greater, and court costs and reasonable attorney’s fees. No license shall issue under the provisions of this chapter until the prospective licensee, or two or more prospective licensees who intend to secure a joint indemnification, shall furnish either a bond with surety or a form of indemnification acceptable to the commissioner or his designee in the amount determined by the state auditor in a sum not less than five thousand dollars and not more than one hundred thousand dollars in the case of a school’s license, and in the amount of one thousand dollars in the case of a license for a representative of a private business school; provided, however, that the liability of the person providing indemnification shall be limited to indemnifying the claimant only for his actual damages. The state auditor shall require additional security in those cases where he is of the opinion that the cash resources of the licensee may not be sufficient to make tuition refunds to students as required under section thirteen K of chapter two hundred and fifty-five; and provided further, that the amount of the indemnification in the case of the school shall not exceed the anticipated maximum unearned tuitions. For the purposes of this section the forms of indemnification other than a surety bond which shall be furnished to the department of education for licensure are the following: (1) An irrevocable letter of credit, maintained for a period of one year, issued by a financial institution as defined in section one of chapter one hundred and forty E in an amount determined annually by the state auditor and approved by the department of education payable to the commonwealth in which the commonwealth is designated as the beneficiary. (2) A term deposit account held in a financial institution as defined in section one of chapter one hundred and forty E, payable to the commonwealth, commissioner of education, shall be held in trust for the benefit of students entitled thereto under section thirteen K of chapter two hundred and fifty-five or subject to refund provisions and policies approved by the department of education. Said account shall be maintained for a period of one year, the amount to be determined annually by the state auditor and acceptable to the commissioner of education or his designee. All interest shall be paid annually to the appropriate school, unless the term deposit account is activated due to a school closing. Should the licensee for any reason, while not in default, discontinue operation, all monies on deposit, including interest, shall be released to the appropriate school subject to the approval of the department of education. A joint indemnification shall be defined as an indemnification issued to cover all prospective licensees to be insured under the indemnification in an amount sufficient to cover the tuition refunds of the participating schools. Each such indemnification shall be conditioned to provide that the obligor shall satisfy all judgments rendered against it in actions to recover damages sustained by students resulting from a breach of contract; provided, however, that the aggregate liability of the person providing indemnification for all breaches of the conditions of the indemnification shall in no event, exceed the sum of such indemnification. Such indemnification shall not limit or impair any right of recovery otherwise available pursuant to law nor shall the amount of the indemnification be relevant in determining the amount of damages or other relief to which any plaintiff may be entitled. The surety on any bond may cancel the bond upon giving sixty days’ notice in writing to the commissioner and thereafter shall be relieved of the liability for any breach of condition occurring after the effective date of said cancellation. The indemnification shall be procured only from companies or institutions doing business in the commonwealth. Prev | Next________________________________________________________________________
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