HF 1159

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to dispute resolution; providing for
mediation of disputes; adopting the Uniform Mediation
Act; amending Minnesota Statutes 2004, sections
115B.414, subdivision 2; 469.1771, subdivision 2b;
572.40; 572.41, subdivision 1; proposing coding for
new law as Minnesota Statutes, chapter 572C; repealing
Minnesota Statutes 2004, sections 572.31; 572.33;
572.35, subdivision 1; 572.36; 572.37; 572.39.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

UNIFORM MEDIATION ACT

Section 1.

new text begin [572C.01] TITLE.
new text end

new text begin Sections 572C.01 to 572C.15 may be cited as the Uniform
Mediation Act.
new text end

Sec. 2.

new text begin [572C.02] DEFINITIONS.
new text end

new text begin In sections 572C.01 to 572C.15:
new text end

new text begin (1) "Mediation" means a process in which a mediator
facilitates communication and negotiation between parties to
assist them in reaching a voluntary agreement regarding their
dispute.
new text end

new text begin (2) "Mediation communication" means a statement, whether
oral or in a record or verbal or nonverbal, that occurs during a
mediation or is made for purposes of considering, conducting,
participating in, initiating, continuing, or reconvening a
mediation or retaining a mediator.
new text end

new text begin (3) "Mediator" means an individual who conducts a mediation.
new text end

new text begin (4) "Nonparty participant" means a person, other than a
party or mediator, that participates in a mediation.
new text end

new text begin (5) "Mediation party" means a person that participates in a
mediation and whose agreement is necessary to resolve the
dispute.
new text end

new text begin (6) "Person" means an individual, corporation, business
trust, estate, trust, partnership, limited liability company,
association, joint venture, government; governmental
subdivision, agency, or instrumentality; public corporation, or
any other legal or commercial entity.
new text end

new text begin (7) "Proceeding" means:
new text end

new text begin (A) a judicial, administrative, arbitral, or other
adjudicative process, including related prehearing and
posthearing motions, conferences, and discovery; or
new text end

new text begin (B) a legislative hearing or similar process.
new text end

new text begin (8) "Record" means information that is inscribed on a
tangible medium or that is stored in an electronic or other
medium and is retrievable in perceivable form.
new text end

new text begin (9) "Sign" means:
new text end

new text begin (A) to execute or adopt a tangible symbol with the present
intent to authenticate a record; or
new text end

new text begin (B) to attach or logically associate an electronic symbol,
sound, or process to or with a record with the present intent to
authenticate a record.
new text end

Sec. 3.

new text begin [572C.03] SCOPE.
new text end

new text begin (a) Except as otherwise provided in subsection (b) or (c),
sections 572C.01 to 572C.15 apply to a mediation in which:
new text end

new text begin (1) the mediation parties are required to mediate by
statute, court, or administrative agency rule or referred to
mediation by a court, administrative agency, or arbitrator;
new text end

new text begin (2) the mediation parties and the mediator agree to mediate
in a record that demonstrates an expectation that mediation
communications will be privileged against disclosure; or
new text end

new text begin (3) the mediation parties use as a mediator an individual
who holds himself or herself out as a mediator or the mediation
is provided by a person that holds itself out as providing
mediation.
new text end

new text begin (b) Sections 572C.01 to 572C.15 do not apply to a mediation:
new text end

new text begin (1) relating to the establishment, negotiation,
administration, or termination of a collective bargaining
relationship;
new text end

new text begin (2) relating to a dispute that is pending under or is part
of the processes established by a collective bargaining
agreement, except that sections 572C.01 to 572C.15 apply to a
mediation arising out of a dispute that has been filed with an
administrative agency or court;
new text end

new text begin (3) conducted by a judge who might make a ruling on the
case; or
new text end

new text begin (4) conducted under the auspices of:
new text end

new text begin (A) a primary or secondary school if all the parties are
students; or
new text end

new text begin (B) a correctional institution for youths if all the
parties are residents of that institution.
new text end

new text begin (c) If the parties agree in advance in a signed record, or
a record of proceeding reflects agreement by the parties, that
all or part of a mediation is not privileged, the privileges
under sections 572C.04 to 572C.06 do not apply to the mediation
or part agreed upon. However, sections 572C.04 to 572C.06 apply
to a mediation communication made by a person that has not
received actual notice of the agreement before the communication
is made.
new text end

Sec. 4.

new text begin [572C.04] PRIVILEGE AGAINST DISCLOSURE;
ADMISSIBILITY; DISCOVERY.
new text end

new text begin (a) Except as otherwise provided in section 572C.06, a
mediation communication is privileged as provided in subsection
(b) and is not subject to discovery or admissible in evidence in
a proceeding unless waived or precluded as provided by section
572C.05.
new text end

new text begin (b) In a proceeding, the following privileges apply:
new text end

new text begin (1) A mediation party may refuse to disclose, and may
prevent any other person from disclosing, a mediation
communication.
new text end

new text begin (2) A mediator may refuse to disclose a mediation
communication, and may prevent any other person from disclosing
a mediation communication of the mediator.
new text end

new text begin (3) A nonparty participant may refuse to disclose, and may
prevent any other person from disclosing, a mediation
communication of the nonparty participant.
new text end

new text begin (c) Evidence or information that is otherwise admissible or
subject to discovery does not become inadmissible or protected
from discovery solely by reason of its disclosure or use in a
mediation.
new text end

Sec. 5.

new text begin [572C.05] WAIVER AND PRECLUSION OF PRIVILEGE.
new text end

new text begin (a) A privilege under section 572C.04 may be waived in a
record or orally during a proceeding if it is expressly waived
by all parties to the mediation and:
new text end

new text begin (1) in the case of the privilege of a mediator, it is
expressly waived by the mediator; and
new text end

new text begin (2) in the case of the privilege of a nonparty participant,
it is expressly waived by the nonparty participant.
new text end

new text begin (b) A person that discloses or makes a representation about
a mediation communication which prejudices another person in a
proceeding is precluded from asserting a privilege under section
572C.04, but only to the extent necessary for the person
prejudiced to respond to the representation or disclosure.
new text end

new text begin (c) A person that intentionally uses a mediation to plan,
attempt to commit or commit a crime, or to conceal an ongoing
crime or ongoing criminal activity is precluded from asserting a
privilege under section 572C.04.
new text end

Sec. 6.

new text begin [572C.06] EXCEPTIONS TO PRIVILEGE.
new text end

new text begin (a) There is no privilege under section 572C.04 for a
mediation communication that is:
new text end

new text begin (1) in an agreement evidenced by a record signed by all
parties to the agreement;
new text end

new text begin (2) available to the public under chapter 13 or made during
a session of a mediation which is open, or is required by law to
be open, to the public;
new text end

new text begin (3) a threat or statement of a plan to inflict bodily
injury or commit a crime of violence;
new text end

new text begin (4) intentionally used to plan a crime, attempt to commit
or commit a crime, or to conceal an ongoing crime or ongoing
criminal activity;
new text end

new text begin (5) sought or offered to prove or disprove a claim or
complaint of professional misconduct or malpractice filed
against a mediator;
new text end

new text begin (6) except as otherwise provided in subsection (c), sought
or offered to prove or disprove a claim or complaint of
professional misconduct or malpractice filed against a mediation
party, nonparty participant, or representative of a party based
on conduct occurring during a mediation; or
new text end

new text begin (7) sought or offered to prove or disprove abuse, neglect,
abandonment, or exploitation in a proceeding in which a child or
adult protective services agency is a party, unless the case is
referred by a court to mediation and a public agency
participates.
new text end

new text begin (b) There is no privilege under section 572C.04 if a court,
administrative agency, or arbitrator finds, after a hearing in
camera, that the party seeking discovery or the proponent of the
evidence has shown that the evidence is not otherwise available,
that there is a need for the evidence that substantially
outweighs the interest in protecting confidentiality, and that
the mediation communication is sought or offered in:
new text end

new text begin (1) a court proceeding involving a felony or misdemeanor;
or
new text end

new text begin (2) except as otherwise provided in subsection (c), a
proceeding to prove a claim to rescind or reform or a defense to
avoid liability on a contract arising out of the mediation.
new text end

new text begin (c) A mediator may not be compelled to provide evidence of
a mediation communication referred to in subsection (a)(6) or
(b)(2).
new text end

new text begin (d) If a mediation communication is not privileged under
subsection (a) or (b), only the portion of the communication
necessary for the application of the exception from
nondisclosure may be admitted. Admission of evidence under
subsection (a) or (b) does not render the evidence, or any other
mediation communication, discoverable or admissible for any
other purpose.
new text end

Sec. 7.

new text begin [572C.07] PROHIBITED MEDIATOR REPORTS.
new text end

new text begin (a) Except as required in subsection (b), a mediator may
not make a report, assessment, evaluation, recommendation,
finding, or other communication regarding a mediation to a
court, administrative agency, or other authority that may make a
ruling on the dispute that is the subject of the mediation.
new text end

new text begin (b) A mediator may disclose:
new text end

new text begin (1) whether the mediation occurred or has terminated,
whether a settlement was reached, and attendance;
new text end

new text begin (2) a mediation communication as permitted under section
572C.06; or
new text end

new text begin (3) a mediation communication evidencing abuse, neglect,
abandonment, or exploitation of an individual to a public agency
responsible for protecting individuals against such treatment.
new text end

new text begin (c) A communication made in violation of subsection (a) may
not be considered by a court, administrative agency, or
arbitrator.
new text end

Sec. 8.

new text begin [572C.08] CONFIDENTIALITY.
new text end

new text begin Unless subject to chapter 13 or 13D, mediation
communications are confidential to the extent agreed by the
parties or provided by other law or rule of this state.
new text end

Sec. 9.

new text begin [572C.09] MEDIATOR'S DISCLOSURE OF CONFLICTS OF
INTEREST; BACKGROUND.
new text end

new text begin (a) Before accepting a mediation, an individual who is
requested to serve as a mediator shall:
new text end

new text begin (1) make an inquiry that is reasonable under the
circumstances to determine whether there are any known facts
that a reasonable individual would consider likely to affect the
impartiality of the mediator, including a financial or personal
interest in the outcome of the mediation and an existing or past
relationship with a mediation party or foreseeable participant
in the mediation; and
new text end

new text begin (2) disclose any such known fact to the mediation parties
as soon as is practical before accepting a mediation.
new text end

new text begin (b) If a mediator learns any fact described in subsection
(a)(1) after accepting a mediation, the mediator shall disclose
it as soon as is practicable.
new text end

new text begin (c) At the request of a mediation party, an individual who
is requested to serve as a mediator shall disclose the
mediator's qualifications to mediate a dispute.
new text end

new text begin (d) A person that violates subsection (a), (b), or (g) is
precluded by the violation from asserting a privilege under
section 572C.04.
new text end

new text begin (e) Subsections (a), (b), (c), and (g) do not apply to an
individual acting as a judge.
new text end

new text begin (f) Sections 572C.01 to 572C.15 do not require that a
mediator have a special qualification by background or
profession.
new text end

new text begin (g) A mediator must be impartial, unless after disclosure
of the facts required in subsections (a) and (b) to be
disclosed, the parties agree otherwise.
new text end

Sec. 10.

new text begin [572C.10] PARTICIPATION IN MEDIATION.
new text end

new text begin An attorney or other individual designated by a party may
accompany the party to and participate in a mediation. A waiver
of participation given before the mediation may be rescinded.
new text end

Sec. 11.

new text begin [572C.11] INTERNATIONAL COMMERCIAL MEDIATION.
new text end

new text begin (a) In this section, "Model Law" means the Model Law on
International Commercial Conciliation adopted by the United
Nations Commission on International Trade Law on June 28, 2002,
and recommended by the United Nations General Assembly in a
resolution (A/RES/57/18) dated November 19, 2002, and
"international commercial mediation" means an international
commercial conciliation as defined in Article 1 of the Model Law.
new text end

new text begin (b) Except as otherwise provided in subsections (c) and
(d), if a mediation is an international commercial mediation,
the mediation is governed by the Model Law.
new text end

new text begin (c) Unless the parties agree in accordance with section
572C.03, paragraph (c), that all or part of an international
commercial mediation is not privileged, sections 572C.04,
572C.05, and 572C.06, and any applicable definitions in section
572C.02 also apply to the mediation and nothing in Article 10 of
the Model Law derogates from sections 572C.04, 572C.05, and
572C.06.
new text end

new text begin (d) If the parties to an international commercial mediation
have agreed under Article 1, subsection (7), of the Model Law
that the Model Law shall not apply, sections 572C.01 to 572C.15
apply.
new text end

Sec. 12.

new text begin [572C.12] RELATION TO ELECTRONIC SIGNATURES IN
GLOBAL AND NATIONAL COMMERCE ACT.
new text end

new text begin Sections 572C.01 to 572C.15 modify, limit, or supersede the
federal Electronic Signatures in Global and National Commerce
Act, United States Code, title 15, section 7001 et seq., but
sections 572C.01 to 572C.15 do not modify, limit, or supersede
section 7001(c) of that act or authorize electronic delivery of
any of the notices described in section 7003(b) of that act.
new text end

Sec. 13.

new text begin [572C.13] UNIFORMITY OF APPLICATION AND
CONSTRUCTION.
new text end

new text begin In applying and construing sections 572C.01 to 572C.15,
consideration should be given to the need to promote uniformity
of the law with respect to its subject matter among states that
enact it.
new text end

Sec. 14.

new text begin [572C.14] SEVERABILITY CLAUSE.
new text end

new text begin If any provision of sections 572C.01 to 572C.15 or their
application to any person or circumstance is held invalid, the
invalidity does not affect other provisions or applications of
sections 572C.01 to 572C.15 which can be given effect without
the invalid provision or application, and to to this end the
provisions of sections 572C.01 to 572C.15 are severable.
new text end

Sec. 15.

new text begin [572C.15] APPLICATION TO EXISTING AGREEMENTS OR
REFERRALS.
new text end

new text begin (a) Sections 572C.01 to 572C.15 govern a mediation pursuant
to a referral or an agreement to mediate made on or after August
1, 2005.
new text end

new text begin (b) On or after August 1, 2005, sections 572C.01 to 572C.15
govern an agreement to mediate whenever made.
new text end

Sec. 16. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, sections 572.31; 572.33; 572.35,
subdivision 1; 572.36; 572.37; and 572.39, are repealed.
new text end

Sec. 17. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 16 are effective August 1, 2005.
new text end

ARTICLE 2

CONFORMING AMENDMENTS

Section 1.

Minnesota Statutes 2004, section 115B.414,
subdivision 2, is amended to read:

Subd. 2.

Mediation.

A third-party claim or group of
third-party claims that all arise from the same facility may be
submitted to the Minnesota Office of Dispute Resolution for
mediation under deleted text begin the Minnesota Civil Mediation Act, deleted text end sections
deleted text begin 572.31 to 572.40 deleted text end new text begin 572C.01 to 572C.15 new text end . The costs of mediation
must be allocated equally between the person or persons against
whom the claims are made and the person or persons making the
claims.

Sec. 2.

Minnesota Statutes 2004, section 469.1771,
subdivision 2b, is amended to read:

Subd. 2b.

Action to suspend tif authority.

(a) Upon
receipt of a notification from the state auditor under
subdivision 1, paragraph (d), the attorney general shall review
the materials submitted by the auditor and any materials
submitted by the municipality and development authority. If the
attorney general finds that the municipality or development
authority violated a provision of the law enumerated in
subdivision 1 and that the violation was substantial, the
attorney general shall file a petition in the Tax Court to
suspend the authority of the municipality and development
authority to exercise tax increment financing powers.

(b) Before filing a petition under this subdivision, the
attorney shall attempt to resolve the matter using appropriate
alternative dispute resolution procedures, such as those under
sections deleted text begin 572.31 to 572.40 deleted text end new text begin 572C.01 to 572C.15 new text end .

(c) If the Tax Court finds that the municipality or
development authority failed to comply with the law and that the
noncompliance was substantial, the court shall suspend the
authority of the municipality or development to exercise tax
increment financing powers. The court shall set the period of
the suspension for a period not to exceed five years. In
determining the length of the suspension, the court may consider:

(1) the substantiality of the violation or violations;

(2) the dollar amount of the violation or violations;

(3) the sophistication of the municipality or development
authority;

(4) the extent to which the municipality or development
authority violated a clear and unambiguous requirement of the
law;

(5) whether the municipality or development authority
continued to violate the law after receiving notification from
the state auditor that it was not in compliance with the law;

(6) the extent to which the municipality or development
authority engaged in a pattern of violations; and

(7) any other factors the court determines are relevant to
whether the municipality or development authority's authority to
exercise tax increment financing powers should be suspended.

(d) For purposes of this subdivision, the exercise of tax
increment financing powers means:

(1) the authority to request certification of a new tax
increment financing district or the addition of area to an
existing tax increment financing district;

(2) the authority to issue bonds under section 469.178;

(3) the authority to amend a tax increment financing plan
to authorize new activities or expenditures.

Sec. 3.

Minnesota Statutes 2004, section 572.40, is
amended to read:

572.40 SCOPE.

Sections deleted text begin 572.31 to 572.36 deleted text end new text begin 572C.01 to 572C.15 new text end do not apply
to proceedings relating to the determination of criminal
liability or proceedings brought under chapters 518, 518A, 518B,
and 518C, or proceedings relating to guardianship,
conservatorship, or civil commitment.

Sec. 4.

Minnesota Statutes 2004, section 572.41,
subdivision 1, is amended to read:

Subdivision 1.

General.

The debtor and creditor in any
transaction may request the other party to the transaction to
enter mediation concerning possible adjustment, refinancing, or
payment under this section and sections deleted text begin 572.31 to 572.40 deleted text end new text begin 572C.01
to 572C.15 new text end .