Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1985, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1985
CHAPTER 306-S.F.No. 401
An act relating to creditor's remedies; providing for
an increase in the amount of farm machines and
implements exemption; clarifying the garnishment
limitation for the sale of farm products; extending
the effective period of a garnishee summons; modifying
and extending remedies for persons defaulting on
homesteads; making technical changes related to
persons buying farm products; requiring certain time
limits and descriptions for crop financing statements;
amending Minnesota Statutes 1984, sections 47.20,
subdivision 15; 223A.01; 336.9-307, as amended;
336.9-402; 336.9-403; 550.37, subdivisions 5, 7, 13,
14, and 24; 559.21, subdivision 6; 565.25, subdivision
2; 571.41, subdivisions 6 and 7; 571.42; 571.495,
subdivision 3; 571.55, subdivision 1; 580.031; 583.02;
583.03, subdivision 2; 583.04; and Laws 1983, chapter
215, section 16, as amended.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1984, section 47.20,
subdivision 15, is amended to read:
Subd. 15. Notwithstanding the provisions of any other law
to the contrary, any notice of default on homestead property as
defined in section 583.02, mailed after May 24, 1983 and prior
to May 1, 1985 or after the effective date of this section and
prior to May 1, 1987, shall indicate that the borrower has 60
days from the date the notice is mailed in which to cure the
default. The notice shall include a statement that the borrower
may be eligible for an extension of the time prior to
foreclosure and execution sale under sections 583.01 to 583.12.
Sec. 2. Minnesota Statutes 1984, section 550.37,
subdivision 5, is amended to read:
Subd. 5. Farm machines and implements used in farming
operations by a debtor engaged principally in farming,
livestock, farm produce, and standing crops, not exceeding
$5,000 $10,000 in value.
Sec. 3. Minnesota Statutes 1984, section 550.37,
subdivision 7, is amended to read:
Subd. 7. The total value of property selected by a debtor
pursuant to subdivisions 5 and 6 shall not exceed $5,000 $10,000.
Sec. 4. Minnesota Statutes 1984, section 550.37,
subdivision 13, is amended to read:
Subd. 13. [WAGES EARNINGS.] All wages earnings not subject
to garnishment by the provisions of section 571.55. A
subsequent attachment, garnishment or levy of execution shall
impound only that pay period's nonexempt disposable earnings not
subject to a prior attachment, garnishment or levy of execution,
but in no instance shall more than an individual's total
nonexempt disposable earnings in that pay period be subject to
attachment, garnishment or levy of execution. Garnishments
shall impound the nonexempt disposable earnings in the order of
their service upon the employer. The disposable earnings exempt
from garnishment are exempt as a matter of right, whether
claimed or not by the person to whom due. The exemptions may
not be waived. The exempt disposable earnings are payable by
the employer when due. The exempt disposable earnings shall
also be exempt for 20 days after deposit in any financial
institution, whether in a single or joint account. This 20-day
exemption also applies to any contractual set-off or security
interest asserted by a financial institution in which the
earnings are deposited by the individual. In tracing the funds,
the first-in first-out method of accounting shall be used. The
burden of establishing that funds are exempt rests upon the
debtor. As used in this section, the term "financial
institution" includes credit unions. Nothing in this paragraph
shall void or supersede any valid assignment of wages earnings
or transfer of funds held on account made prior to the
attachment, garnishment, or levy of execution.
Sec. 5. Minnesota Statutes 1984, section 550.37,
subdivision 14, is amended to read:
Subd. 14. [PUBLIC ASSISTANCE.] All relief based on need,
and the wages earnings or salary of a person who is a recipient
of relief based on need, shall be exempt from all claims of
creditors including any contractual set-off or security interest
asserted by a financial institution. For the purposes of this
chapter, relief based on need includes AFDC, general assistance
medical care, supplemental security income, medical assistance,
Minnesota supplemental assistance, and general assistance. The
salary or wages earnings of any debtor who is or has been a
recipient of relief based on need, or an inmate of a
correctional institution shall, upon his return to private
employment or farming after having been a recipient of relief
based on need, or an inmate of a correctional institution, be
exempt from attachment, garnishment, or levy of execution for a
period of six months after his return to employment or farming
and after all public assistance has been terminated. The
exemption provisions contained in this subdivision also apply
for 60 days after deposit in any financial institution, whether
in a single or joint account. In tracing the funds, the
first-in first-out method of accounting shall be used. The
burden of establishing that funds are exempt rests upon the
debtor. Agencies distributing relief and the correctional
institutions shall, at the request of creditors, inform them
whether or not any debtor has been a recipient of relief based
on need, or an inmate of a correctional institution, within the
preceding six months.
Sec. 6. Minnesota Statutes 1984, section 550.37,
subdivision 24, is amended to read:
Subd. 24. [EMPLOYEE BENEFITS.] The debtor's right to
receive a payment present or future payments, or payments
received by the debtor, under a stock bonus, pension, profit
sharing, annuity, individual retirement account, individual
retirement annuity, simplified employee pension, or similar plan
or contract on account of illness, disability, death, age, or
length of service, to the extent reasonably necessary for the
support of the debtor and any dependent of the debtor.
Sec. 7. Minnesota Statutes 1984, section 559.21,
subdivision 6, is amended to read:
Subd. 6. [TEMPORARY MINIMUM NOTICE.] (a) Notwithstanding
the provisions of any other law to the contrary, no contract for
conveyance of homestead property, as defined in section 583.02,
shall terminate until 60 days after service of notice if the
notice is served after May 24, 1983, and prior to May 1, 1985 or
after the effective date of this section and prior to May 1,
1987, or 90 days after service of notice if the contract was
entered into after May 1, 1980 and the contract vendee has paid
25 percent or more of the purchase price. The notice shall
specify this 60- or 90-day period. The notice shall include a
statement that the borrower may be eligible for an extension of
the time prior to foreclosure and execution sale under sections
583.01 to 583.12.
(b) The notice must be in bold type, capitalized letters,
or other form sufficient for the reader to quickly and easily
distinguish the notice from the rest of the writing; violation
of this requirement is a petty misdemeanor.
(c) This section does not apply to earnest money contracts,
purchase agreements or exercised options.
Sec. 8. Minnesota Statutes 1984, section 565.25,
subdivision 2, is amended to read:
Subd. 2. (a) Except as otherwise provided in clause (b)
and section 9, the respondent may retain or regain possession of
the property by filing of a bond approved by the court
conditioned that the property shall be delivered to the
claimant, if delivery be adjudged, and for the payment to the
claimant of any sum adjudged against the respondent. The bond
shall be in an amount 1-1/4 times the fair market value of the
property or 1-1/2 times the amount of the claimant's claim,
whichever is less. An order for seizure may specify a time
limitation within which the bond must be filed. For the purpose
of protecting or preserving the property pending final hearing
on the merits, the court may in extraordinary circumstances,
which shall be specified in its order, provide that the
respondent may not retain or regain possession of the property
upon rebonding, or may limit or condition the right to retain or
regain the property upon rebonding. The costs of regaining
possession of the property from the sheriff or the claimant
shall be borne by respondent except as set forth in clause (b).
(b) If at a hearing following seizure of property pursuant
to section 565.24 claimant fails to establish a right to
continued possession, the court shall order the property
returned to respondent, the costs to be borne by claimant. The
court may order claimant's bond to continue in an amount
sufficient to offset damages claimed by respondent by reason of
the seizure.
Sec. 9. [565.251] [POSSESSION BY RESPONDENT WITHOUT BOND;
STAY OF PROCEEDING.]
The court may allow the respondent to retain or regain
possession of the property without filing a bond and may stay
the action by the claimant for a reasonable period of time not
to exceed six months if the following conditions are met:
(1) the respondent is unable to make the required payments
due to unforeseen economic circumstances beyond the respondent's
control;
(2) the respondent is dependent on the use of the property
to earn a living;
(3) the respondent insures the property for its fair market
value;
(4) the respondent makes periodic payments to the claimant
representing the depreciation in market value of the property
while the respondent retains possession, in an amount and during
the times determined by the court; and
(5) the respondent makes periodic payments to the claimant
representing the value of the use of the property or the cost to
the claimant of the lost opportunity to use the property, in an
amount and during the times determined by the court.
Sec. 10. Minnesota Statutes 1984, section 571.41,
subdivision 6, is amended to read:
Subd. 6. [FORM OF NOTICE.] The ten day notice informing a
judgment debtor that a garnishee summons may be used to garnish
the wages earnings of an individual to enforce a judgment, shall
be substantially in the following form:
STATE OF MINNESOTA )
) ss
County of ) ............ Court
...................................... (Judgment Creditor)
...................................... (Judgment Debtor)
Garnishment Exemption Notice
The State of Minnesota
To the above named Judgment Debtor:
Please take notice that a Garnishment Summons may be served
upon your employer or other third parties, without any further
court proceedings or notice to you, ten days or more from the
date hereof. Your wages earnings are completely exempt from
garnishment if you are now a recipient of relief based on need,
if you have been a recipient of relief within the last six
months, or if you have been an inmate of a correctional
institution in the last six months. Relief based on need
includes, only AFDC, general assistance medical care,
supplemental security income, medical assistance, Minnesota
supplemental assistance, and general assistance.
If you wish to claim an exemption, you should fill out the
appropriate form below, sign it, and send it to the judgment
creditor's attorney and the garnishee.
You may wish to contact the attorney for the Judgment
Creditor in order to arrange for a settlement of the debt.
PENALTIES
1. Be advised that even if you claim an exemption, a
Garnishment Summons may still be served on your employer. If
your wages earnings are garnished after you claim an exemption,
you may petition the court for a determination of your
exemption. If the court finds that the creditor disregarded
your claim of exemption in bad faith, you will be entitled to
costs, reasonable attorney fees, actual damages, and an amount
not to exceed $100.
2. HOWEVER, BE WARNED if you claim an exemption, the
creditor can also petition the court for a determination of your
exemption, and if the court finds that you claimed an exemption
in bad faith, you will be assessed costs and reasonable
attorney's fees plus an amount not to exceed $100.
3. If after receipt of this notice, you in bad faith take
action to frustrate the garnishment, thus requiring the creditor
to petition the court to resolve the problem, you will be liable
to the creditor for costs and reasonable attorney fees plus an
amount not to exceed $100.
Dated: .......... ................................
(Attorney for) Judgment Creditor
Address
Telephone
I hereby claim under penalty of perjury that my wages
earnings are exempt from garnishment because:
(1) ...... I am presently a recipient of relief based on
need. (Specify the program, case number, and the county from
which relief is being received.)
........... ......................... .........
Program Case Number (if known) County
(2) ...... I am not now receiving relief based on need, but
I have received relief based on need within the last six
months. (Specify the program, case number, and the county from
which relief has been received.)
........... ......................... ..........
Program Case Number (if known) County
(3) ...... I have been an inmate of a correctional
institution within the last six months. (Specify the
correctional institution and location.)
............................ ............
Correctional Institution Location
I hereby authorize any agency that has distributed relief
to me or any correctional institution in which I was an inmate
to disclose to the above-named creditor or his attorney whether
or not I was a recipient of relief based on need or an inmate of
a correctional institution within the last six months.
.....................
Judgment Debtor
Address
Sec. 11. Minnesota Statutes 1984, section 571.41,
subdivision 7, is amended to read:
Subd. 7. [FORM OF EXEMPTION NOTICE.] The notice informing
a judgment debtor that a writ of attachment, garnishee summons,
or levy of execution has been used to attach and bind funds of
the judgment debtor to satisfy a claim shall be substantially in
the following form:
EXEMPTION NOTICE
STATE OF MINNESOTA
COUNTY OF ......................Court
............................................(Judgment Creditor)
..............................................(Judgment Debtor)
To..................(Judgment Debtor):
A writ of attachment, garnishee summons, or levy of
execution (strike inapplicable language) has been served on
..........(Bank or other Financial Institution)...........where
you have an account.
Your account balance is $.............. .
The amount being held is $............. .
However, the funds in your account will normally be exempt
from creditors' claims if they are in one of the following
categories:
(1) Relief based on need. This includes AFDC, Medical
Assistance, Supplemental Security Income (SSI), Minnesota
Supplemental Assistance, General Assistance, and General
Assistance Medical Care.
(2) Social Security benefits (Old Age, Survivors, or
Disability Insurance).
(3) Unemployment compensation, workers' compensation, or
veteran's benefits.
(4) An accident, disability, or retirement pension or
annuity.
(5) Life insurance proceeds, or the earnings of your minor
child.
(6) Money from a claim for damage or destruction of exempt
property (such as household goods, farm tools, business
equipment, a mobile home, or a car).
The following funds are also exempt:
(7) All wages earnings of a person in category (1).
(8) All wages earnings of a person who has received relief
based on need, or who has been an inmate of a correctional
institution, within the last six months.
(9) Seventy-five percent of every wage earner's debtor's
after tax earnings.
(10) All of a wage earner's debtor's after tax earnings
below 40 times the federal minimum wage (this equals $134 for a
40-hour week).
TIME LIMIT ON EXEMPTIONS AFTER DEPOSIT IN BANK:
Categories (9) and (10): 20 days.
Categories (7) and (8): 60 days.
All others: no time limit, as long as funds are traceable
to the exempt source. (In tracing funds, the first-in,
first-out method is used. This means money deposited first is
spent first.) The money being sought by the creditor is being
held in your account to give you a chance to claim an exemption.
TO CLAIM AN EXEMPTION:
Fill out, sign, and mail or deliver one copy of this
exemption claim form to the institution which sent you this
notice, and one copy to the judgment creditor. Both copies must
be mailed or delivered on the same day.
If they don't get the exemption claim back from you within
14 days of the date they mailed or gave it to you, they will be
free to turn the money over to the sheriff or the creditor. If
you are going to claim an exemption, do so as soon as possible,
because your money may be frozen until it is decided.
IF YOU CLAIM AN EXEMPTION:
(1) Nonexempt money can be turned over to the creditor or
sheriff;
(2) The financial institution will keep holding the money
claimed to be exempt; and
(3) Seven days after receiving your exemption claim, the
financial institution will release the money to you unless
before then it receives an objection to your exemption claim.
IF THE CREDITOR OBJECTS TO YOUR EXEMPTION CLAIM:
(1) The institution will hold the money until a court
decides if your exemption claim is valid, BUT ONLY IF the
institution gets a copy of your court motion papers asserting
the exemption WITHIN 10 DAYS after the objection is mailed or
given to you. You may wish to consult an attorney at once if
the creditor objects to your exemption claim.
MOTION TO DETERMINE EXEMPTION:
At any time after your funds have been frozen, you may ask
for a court decision on the validity of your exemption claim by
filing a request for hearing which may be obtained at the office
of the clerk of the above court.
PENALTIES:
If you claim an exemption in bad faith, or if the creditor
wrongly objects to an exemption in bad faith, the court may
order the person who acted in bad faith to pay costs, actual
damages, attorney fees, and an additional amount of up to $100.
...................... ................................
Date (Attorney for) Judgment Creditor
Address
EXEMPTION:
(a) Amount of exemption claim.
/ / I claim ALL the funds being held are exempt.
/ / I claim SOME of the funds being held are exempt. The
exempt amount is $....... .
(b) Basis for exemption.
Of the ten categories listed above, I am in category number
..... . (If more than one category applies, you may fill in as
many as apply.) The source of the exempt funds is the following:
..........................................................
..........................................................
(If the source is a type of relief based on need, list the
case number and county:
case number: ...............;
county: ................ .)
Dated: ............... ...........................
Judgment Debtor
Address
Sec. 12. Minnesota Statutes 1984, section 571.42, is
amended to read:
571.42 [EFFECT OF SERVICE OF SUMMONS.]
Subdivision 1. [ATTACH FOR JUDGMENT.] Except as provided
in sections 571.43 and 571.50, service of the garnishee summons
upon the garnishee shall attach and bind, to respond to final
judgment in the action, all personal property of the judgment
debtor in his possession or under his control and all
indebtedness owing by him to the judgment debtor at the time of
service and all nonexempt disposable earnings earned or to be
earned within that pay period and within 30 60 days thereafter.
Subd. 2. [PROPERTY ATTACHED.] Subject to the provisions of
sections 550.37 and 571.55 all moneys, all nonexempt disposable
earnings earned or to be earned within that pay period and
within 30 60 days thereafter and other personal property
including property of any kind due from or in the hands of an
executor, administrator, receiver or trustee and all written
evidences of indebtedness whether negotiable or not or under or
overdue may be attached by garnishment, and money or any other
thing due or belonging to the judgment debtor may be attached by
this process before it has become payable if its payment or
delivery does not depend upon any contingency, but the garnishee
shall not be compelled to pay or deliver it before the time
appointed by the contract.
Sec. 13. Minnesota Statutes 1984, section 571.495,
subdivision 3, is amended to read:
Subd. 3. [FORM OF DISCLOSURE.] A garnishment disclosure
form must be served upon the garnishee. The disclosure shall be
substantially in the following form:
STATE OF MINNESOTA )
) ss
County of............ ) ............... Court
.......................
Judgment Creditor
vs.
.......................
Judgment Debtor
and
.......................
Garnishee
I am the ........................... of the garnishee
herein, and duly authorized to disclose for said garnishee.
On the ..... day of .........., 19.., the time of service
of garnishee summons herein on said garnishee, there was due and
owing the judgment debtor above named from said garnishee the
following:
(1) Earnings. For the purposes of garnishment, "earnings"
means compensation paid or payable for personal service or
compensation paid or payable to the producer for the sale of
agricultural products; livestock or livestock products; milk or
milk products; or fruit or other horticultural products produced
when the producer is operating a family farm, a family farm
corporation, or an authorized farm corporation, as defined in
section 500.24, subdivision 2, whether denominated as wages,
salary, commission, bonus or otherwise, and includes periodic
payments pursuant to a pension or retirement program.
"Disposable earnings" means that part of the earnings of an
individual remaining after the deduction from those earnings of
amounts required by law to be withheld. If the garnishee
summons was served upon you at a time when earnings from a prior
completed pay period were owing but not paid, complete the
following disclosure for earnings from both that past pay period
and the current pay period.
(a) Enter on the line below the amount of disposable
earnings earned or to be earned by the judgment debtor within
the judgment debtor's pay periods which may be subject to
garnishment.
..............................
(b) Enter on the line below 40 times the hourly federal
minimum wage times the number of work weeks within the judgment
debtor's pay periods which may be subject to garnishment. When
such pay periods consists of other than a whole number of work
weeks, each day of a pay period in excess of the number of
completed work weeks shall be counted as a fraction of a work
week equal to the number of work days divided by the number of
work days in the normal work week.
..............................
(c) Enter on the line below the difference obtained (never
less than zero) when line (b) is subtracted from line (a).
..............................
(d) Enter on the line below 25 percent of line (a).
..............................
(e) Enter on the line below the lesser of line (c) and line
(d).
..............................
(2) Money. Enter on the line below any amounts due and
owing the judgment debtor, except earnings, from the garnishee.
..............................
(3) Property. Describe on the line below any personal
property, instruments or papers belonging to the judgment debtor
and in the possession of the garnishee.
..............................
(4) Set-off. Enter on the line below the amount of any
set-off, defense, lien or claim which the garnishee claims
against the amount set forth on lines (1)(e), (2) and (3)
above. Allege the facts by which such set-off, defense, lien or
claim is claimed. (Any indebtedness to a garnishee-employer
garnishee incurred by the judgment debtor within 10 days prior
to the receipt of the first garnishment on a debt is void and
should be disregarded.)
..............................
(5) Exemption. Enter on the line below any amounts or
property claimed by the judgment debtor to be exempt from
execution.
..............................
(6) Adverse Interest. Enter on the line below any amounts
claimed by other persons by reason of ownership or interest in
the judgment debtor's property. (Any assignment of wages made
by the judgment debtor within 10 days prior to the receipt of
the first garnishment on a debt is void and should be
disregarded. State the names and addresses of such persons and
the nature of their claim, if known.)
..............................
(7) Enter on the line below the total of lines (4), (5) and
(6).
..............................
(8) Enter on the line below the difference obtained (never
less than zero) when line (7) is subtracted from the sum of
lines (1)(e), (2) and (3).
..............................
(9) Enter on the line below 110 percent of the amount of
the judgment creditor's judgment which remains unpaid.
..............................
(10) Enter on the line below the lesser of line (8) and
line (9). As garnishee, you are hereby instructed to retain
this amount only if it is $10 or more.
..............................
......................................
Authorized Representative of Garnishee
......................................
Title
Subscribed and sworn to before me
This ...... day of ........, 19...
..................................
Notary Public
........... County, Minnesota.
Sec. 14. Minnesota Statutes 1984, section 571.55,
subdivision 1, is amended to read:
Subdivision 1. For the purposes of this section,
"earnings" means compensation paid or payable for personal
service or compensation paid or payable to the producer for the
sale of agricultural products; livestock or livestock products;
milk or milk products; or fruit or other horticultural products
produced when the producer is operating a family farm, a family
farm corporation, or an authorized farm corporation, as defined
in section 500.24, subdivision 2, whether denominated as wages,
salary, commissions, bonus, or otherwise, and includes periodic
payments pursuant to a pension or retirement program.
"Disposable earnings" means that part of the earnings of an
individual remaining after the deduction from those earnings of
amounts required by law to be withheld.
Sec. 15. Minnesota Statutes 1984, section 580.031, is
amended to read:
580.031 [TEMPORARY MINIMUM NOTICE.]
(a) Notwithstanding the provisions of any other law to the
contrary, eight weeks' published notice must be given prior to
the foreclosure sale of a homestead, as defined in section
583.02, if the notice is published for the first time after May
24, 1983 and prior to May 1, 1985 or after the effective date of
this section and prior to May 1, 1987. The notice must contain
the information specified in section 580.04.
(b) The notice must be in bold type, capitalized letters,
or other form sufficient for the reader to quickly and easily
distinguish the notice from the rest of the writing; violation
of this requirement is a petty misdemeanor.
(c) At least eight weeks before the appointed time of sale,
a copy of the notice must be served upon the person in
possession of the mortgaged premises, if the premises are
actually occupied.
Sec. 16. Minnesota Statutes 1984, section 583.02, is
amended to read:
583.02 [DEFINITIONS.]
As used in sections 583.01 to 583.12 this chapter, the term
"homestead" means residential or agricultural real estate, a
portion or all of which, at the time of the filing of the
petition under section 583.04, is occupied by the owner and is
entitled to receive homestead credit under section
273.13, subdivision 15a or would be entitled to receive the
credit if it remained the residence of the owner on June 1 of
the current year or January 2 of the next year.
Sec. 17. Minnesota Statutes 1984, section 583.03,
subdivision 2, is amended to read:
Subd. 2. [GENERAL EXCLUSION.] The provisions of sections
47.20, subdivision 15, 559.21, subdivision 6, 580.031, and
583.01 to 583.12 do not apply to mortgages or contracts for deed
made after May 24, 1983 the effective date of this act, nor to
mortgages or contracts for deed made before May 24, 1983, the
effective date of this act which are renewed or extended
after May 24, 1983 the effective date of this act, for a period
longer than one year, nor to mortgages, judgments, or contracts
for deed, regardless of when made, if a second or subsequent
mortgage is made against the property after May 24, 1983 the
effective date of this act.
No court shall allow a stay, or postponement, or extension
of time that would cause any right to be lost or adversely
affected by any statute of limitation.
Sec. 18. Minnesota Statutes 1984, section 583.04, is
amended to read:
583.04 [MORTGAGOR MAY APPLY TO DISTRICT COURT FOR RELIEF.]
Any mortgagor, or owner in possession of the mortgaged
premises including farm homestead premises, or anyone claiming
under the mortgage, or anyone liable for the mortgage debt, may
at any time after the issuance of the notice of the foreclosure
proceedings default and prior to the sale, petition the district
court of the county where the foreclosure proceedings are
pending, serving a summons and verified complaint petition
requesting that the sale in foreclosure be postponed for up to
six months or, in the case of a farm homestead located on more
than ten acres, for up to 12 months. A contract for deed vendee
or anyone claiming under the contract or liable for the contract
payment, in any case where the contract has not yet been
terminated as of May 24, 1983, may petition the district court
in the same manner, requesting that the contract termination
be delayed postponed for up to 90 days. Upon receiving the
petition, the court shall order a stay in the foreclosure
proceedings or contract termination until after the hearing on
the petition. As a condition precedent to the postponement of
the foreclosure sale, the party serving the verified complaint
shall file it and pay to the clerk for the person foreclosing
the mortgage the actual costs incurred, including attorney's
fees, in the foreclosure proceeding before postponement. As a
condition precedent to delay of the contract termination, the
party seeking relief shall file the verified complaint and pay
to the clerk for the person canceling the contract, the actual
costs, including attorney's fees incurred in the cancellation.
If payment is made by other than cash or certified check, the
order postponing the sale or termination is not final until
after the check or other negotiable instrument has been
paid. The court may order costs and attorney fees to be paid by
the person applying for relief. If the court orders attorney
fees to be paid, the amount may not exceed $150 or one-half of
the attorney fees allowed in section 582.01, whichever is less.
The court may order the attorney fees to be prorated and
combined with payments ordered under section 583.08. The court
may not order attorney fees to be paid by the person applying
for relief, if the person is receiving public assistance or
legal aid for their own legal representation.
Sec. 19. Minnesota Statutes 1984, section 583.05, is
amended to read:
583.05 [COURT MAY ORDER DELAY IN POSTPONEMENT OF SALE;
FINDINGS.]
The court may consider the following criteria in
determining whether or not to order a delay in postponement of
the sale or contract termination:
(1) that the petitioner is unemployed, underemployed,
facing catastrophic medical expenses, or facing economic
problems due to low farm commodity prices; and
(2) that the petitioner has an inability to make payments
on the mortgage or contract for deed.
If the court grants or denies a delay in postponement of
the sale, the mortgagee shall publish notice of the new sale
date as provided in section 580.03. If the court grants a
postponement of the sale, the mortgagee shall not publish notice
of a new sale date as provided in section 580.03 until the
postponement period has expired, except as provided in section
583.08. Section 580.07 does not apply to foreclosure sales
postponed by a court pursuant to sections 583.01 to 583.12.
Sec. 20. Minnesota Statutes 1984, section 583.07, is
amended to read:
583.07 [REDUCTION OF REDEMPTION PERIOD.]
If the court grants a delay in postponement of the
foreclosure sale pursuant to sections 583.01 to 583.12, the
redemption period pursuant to section 580.23 shall may be
reduced by an equivalent period of time provided, that in no
event shall the redemption period be less than 30 days. If the
court does not grant a delay in postponement of the foreclosure
sale, the redemption period shall be as provided in section
580.23.
Sec. 21. Minnesota Statutes 1984, section 583.10, is
amended to read:
583.10 [HEARING.]
The court shall schedule and hold a hearing on the petition
must be held within 30 days after the filing of the petition.
The order therein must be made and filed within five days after
the hearing. Review by the supreme court may be had by
certiorari, if application for the writ is made within 15 days
after notice of the order. The writ is returnable within 30
days after the filing of the order.
Sec. 22. Minnesota Statutes 1984, section 223A.01, as
added by S.F. No. 919, section 6, if enacted by the 1985 regular
session, is amended to read:
223A.01 [FARM PRODUCTS THAT ARE BOUGHT SUBJECT TO A
SECURITY INTEREST.]
Subdivision 1. [REGISTERED BUYER TAKES FREE OF SECURITY
INTEREST UNLESS NOTIFIED.] A buyer in the ordinary course of
business who is a registered buyer in the county of the seller's
residence under section 386.42, and who purchases farm products
from a person engaged in farming operations takes free of a
security interest created by the seller even though the security
interest is perfected and the buyer knows of its existence,
unless the buyer is notified of the security interest as
provided in subdivision 4 3.
Subd. 2. [BUYERS THAT PURCHASE SUBJECT TO A SECURITY
INTEREST.] A buyer in the ordinary course of business that is
registered under section 386.42 in the seller's county of
residence who is notified by a secured party as provided under
subdivision 3, purchases farm products from a person engaged in
farming operations subject to the perfected security interest.
A buyer who is not registered under section 386.42 in the
seller's county of residence purchases farm products from a
person engaged in farming operations subject to perfected
security interests.
A buyer who purchases farm products subject to a security
interest under this section subdivision shall include the name
of the secured party as joint payee on any check or other
instrument issued in payment for the farm products, unless the
secured party gives the buyer written notice of waiver of this
requirement. Issuance of joint payment as herein required
relieves the buyer of any further liability to the secured party.
Subd. 3. [NOTIFICATION OF SECURITY INTEREST.] A secured
party may, by certified mail or another method by which receipt
can be verified, notify a buyer that a debtor has farm products
subject to a security interest.
The notification is effective upon receipt until September
1 after the notification is made; or for a notification made
after August 20 but before September 1, the notification is
effective for one year beginning September 1. A buyer who
receives notification from a secured party under this
subdivision shall not publicly post or disseminate to any
person, other than its agents and employees who reasonably
require the information for purposes related to this act
section, any information contained in the notification.
A secured party that furnishes to a buyer a list of debtors
who have farm products subject to a security interest is not
liable to a debtor whose name is on the list for furnishing the
list.
Subd. 4. [COMMISSION MERCHANT.] Notwithstanding section
336.1-201, subsection (9), a commission merchant or selling
agent who sells farm products for another for a fee, that is a
registered buyer under section 386.42, is a buyer in the
ordinary course of business under this chapter and section
336.9-307, subsection (1), for transactions involving farm
products.
Sec. 23. Minnesota Statutes 1984, section 336.9-307, as
amended by S.F. No. 919, section 7, if enacted by the 1985
regular session, is amended to read:
336.9-307 [PROTECTION OF BUYERS OF GOODS.]
(1) A buyer in ordinary course of business (subsection (9)
of section 336.1-201) takes free of a security interest created
by his seller even though the security interest is perfected and
even though the buyer knows of its existence, except that a
buyer in the ordinary course of business who purchases farm
products from a person engaged in farming operations is subject
to section 386.42 223A.01.
(2) In the case of consumer goods, a buyer takes free of a
security interest even though perfected if he buys without
knowledge of the security interest, for value and for his own
personal, family or household purposes unless prior to the
purchase the secured party has filed a financing statement
covering such goods.
(3) A buyer other than a buyer in ordinary course of
business (subsection (1) of this section) takes free of a
security interest to the extent that it secures future advances
made after the secured party acquires knowledge of the purchase,
or more than 45 days after the purchase, whichever first occurs,
unless made pursuant to a commitment entered into without
knowledge of the purchase and before the expiration of the 45
day period.
Sec. 24. Minnesota Statutes 1984, section 336.9-402, is
amended to read:
336.9-402 [FORMAL REQUISITES OF FINANCING STATEMENT;
AMENDMENTS; MORTGAGE AS FINANCING STATEMENT.]
(1) A financing statement is sufficient if it gives the
name of the debtor and the secured party, is signed by the
debtor, gives an address of the secured party from which
information concerning the security interest may be obtained,
gives a mailing address of the debtor and contains a statement
indicating the types or describing the items, of collateral. A
financing statement may be filed before a security agreement is
made or a security interest otherwise attaches. When the
financing statement covers crops growing or to be grown, the
statement must also contain a description of the real estate
concerned and the name of the record owner thereof. The
financing statement may only cover the crops grown by a debtor
in a single growing season and may not cover other collateral.
When the financing statement covers timber to be cut or covers
minerals or the like (including oil and gas) or accounts subject
to subsection (5) of section 336.9-103, or when the financing
statement is filed as a fixture filing (section 336.9-313) and
the collateral is goods which are or are to become fixtures, the
statement must also comply with subsection (5). A copy of the
security agreement is sufficient as a financing statement if it
contains the above information and is signed by the debtor. A
carbon, photographic or other reproduction of a security
agreement or a financing statement is sufficient as a financing
statement if the security agreement so provides or if the
original has been filed in this state.
(2) A financing statement which otherwise complies with
subsection (1) is sufficient when it is signed by the secured
party instead of the debtor when it is filed to perfect a
security interest in
(a) collateral already subject to a security interest in
another jurisdiction when it is brought into this state, or when
the debtor's location is changed to this state. Such a
financing statement must state that the collateral was brought
into this state or that the debtor's location was changed to
this state under such circumstances; or
(b) proceeds under section 336.9-306 if the security
interest in the original collateral was perfected. Such a
financing statement must describe the original collateral; or
(c) collateral as to which the filing has lapsed within one
year; or
(d) collateral acquired after a change of name, identity or
corporate structure of the debtor (subsection (7)); or
(e) a lien filed pursuant to Minnesota Statutes, chapter
514; or
(f) collateral which is subject to a filed judgment.
(2a) Except for documents filed under clauses (e) and (f),
the reason for the omission of the debtor signature must be
stated on the front of the financing statement.
(3) A form substantially as follows is sufficient to comply
with subsection (1):
Name of debtor (or assignor)
..............................
Address
..............................
Name of secured party (or assignee)
..............................
Address
..............................
1. This financing statement covers the following types (or
items) of property:
(Describe)
..............................
2. (If collateral is crops) The above described crops are
growing or are to be grown on:
(Describe real estate and the name of the record owner
thereof) ......
....................................................... ....
3. (If applicable) The above goods are to become fixtures
on
(Describe real estate).......................... and this
financing statement is to be filed for record in the real estate
records. (If the debtor does not have an interest of record)
The name of a record owner is .................
4. (If products of collateral are claimed)
Products of the collateral are also covered.
Use whichever signature line is applicable.
Signature of debtor (or assignor)
.........................
Signature of secured party (or assignee)
.........................
(4) A financing statement may be amended by filing a
writing signed by both the debtor and the secured party. If the
sole purpose of the amendment is to change the name or address
of the secured party, only the secured party need sign the
amendment. A writing is sufficient if it sets forth the name
and address of the debtor and secured party as those items
appear on the original financing statement or the most recently
filed amendment, the file number and date of filing of the
financing statement. An amendment does not extend the period of
effectiveness of a financing statement. If any amendment adds
collateral, it is effective as to the added collateral only from
the filing date of the amendment. In this article, unless the
context otherwise requires, the term "financing statement" means
the original financing statement and any amendments.
(5) A financing statement covering timber to be cut or
covering minerals or the like (including oil and gas) or
accounts subject to subsection (5) of section 336.9-103, or a
financing statement filed as a fixture filing (section
336.9-313) where the debtor is not a transmitting utility, must
show that it covers this type of collateral, must recite that it
is to be filed for record in the real estate records, and the
financing statement must contain a description of the real
estate sufficient if it were contained in a mortgage of the real
estate to give constructive notice of the mortgage under the law
of this state. If the debtor does not have an interest of
record in the real estate, the financing statement must show the
name of a record owner. No description of the real estate or
the name of the record owner thereof is required for a fixture
filing where the debtor is a transmitting utility.
Notwithstanding the foregoing a general description of the real
estate is sufficient for a fixture filing where a railroad is
the record owner of the real estate on which the fixtures are or
are to be located; and for the purposes of this subsection, the
requirement of a general description is satisfied if the fixture
filing (1) identifies the section, township and range numbers of
the county in which the land is located; (2) identifies the
quarter-quarter of the section that the land is located in; (3)
indicates the name of the record owner of the real estate; and
(4) states the street address of the real estate if one exists.
(6) A mortgage is effective as a financing statement filed
as a fixture filing from the date of its recording if (a) the
goods are described in the mortgage by item or type, (b) the
goods are or are to become fixtures related to the real estate
described in the mortgage, (c) the mortgage complies with the
requirements for a financing statement in this section other
than a recital that it is to be filed in the real estate
records, and (d) the mortgage is duly recorded. No fee with
reference to the financing statement is required other than the
regular recording and satisfaction fees with respect to the
mortgage.
(7) A financing statement sufficiently shows the name of
the debtor if it gives the individual, partnership or corporate
name of the debtor, whether or not it adds other trade names or
the names of partners. Where the debtor so changes his name or
in the case of an organization its name, identity or corporate
structure that a filed financing statement becomes seriously
misleading, the filing is not effective to perfect a security
interest in collateral acquired by the debtor more than four
months after the change, unless a new appropriate financing
statement is filed before the expiration of that time. A filed
financing statement remains effective with respect to collateral
transferred by the debtor even though the secured party knows of
or consents to the transfer.
(8) A financing statement, amendment, continuation,
assignment, release, or termination substantially complying with
the requirements of this section is effective even though it
contains minor errors which are not seriously misleading.
Sec. 25. Minnesota Statutes 1984, section 336.9-403, is
amended to read:
336.9-403 [WHAT CONSTITUTES FILING; DURATION OF FILING;
EFFECT OF LAPSED FILING; DUTIES OF FILING OFFICER.]
(1) Presentation for filing of a financing statement and
tender of the filing fee or acceptance of the statement by the
filing officer constitutes filing under this article.
(2) Except as provided in subsection subsections (6) and
(9) a filed financing statement is effective for a period of
five years from the date of filing. The effectiveness of a
filed financing statement lapses on the expiration of the five
year period unless a continuation statement is filed prior to
the lapse. If a security interest perfected by filing exists at
the time insolvency proceedings are commenced by or against the
debtor, the security interest remains perfected until
termination of the insolvency proceedings and thereafter for a
period of 60 days or until expiration of the five year period,
whichever occurs later regardless of whether the financing
statement filed as to that security interest is destroyed by the
filing officer pursuant to subsection (3). Upon lapse the
security interest becomes unperfected, unless it is perfected
without filing. If the security interest becomes unperfected
upon lapse, it is deemed to have been unperfected as against a
person who became a purchaser or lien creditor before lapse.
(3) A continuation statement may be filed by the secured
party within six months prior to the expiration of the five year
period specified in subsection (2). Any such continuation
statement must be signed by the secured party, set forth the
name and address of the debtor and secured party as those items
appear on the original financing statement or the most recently
filed amendment, identify the original statement by file number
and filing date, and state that the original statement is still
effective. A continuation statement signed by a person other
than the secured party of record must be accompanied by a
separate written statement of assignment signed by the secured
party of record and complying with subsection (2) of section
336.9-405, including payment of the required fee. Upon timely
filing of the continuation statement, the effectiveness of the
original statement is continued for five years after the last
date to which the filing was effective whereupon it lapses in
the same manner as provided in subsection (2) unless another
continuation statement is filed prior to such lapse. Succeeding
continuation statements may be filed in the same manner to
continue the effectiveness of the original statement. Unless a
statute on disposition of public records provides otherwise, the
filing officer may remove a lapsed statement from the files and
destroy it immediately if he has retained a microfilm or other
photographic record, or in other cases after one year after the
lapse. The filing officer shall so arrange matters by physical
annexation of financing statements to continuation statements or
other related filings, or by other means, that if he physically
destroys the financing statements of a period more than five
years past, those which have been continued by a continuation
statement or which are still effective under subsection (6)
shall be retained. If insolvency proceedings are commenced by
or against the debtor, the secured party shall notify the filing
officer both upon commencement and termination of the
proceedings, and the filing officer shall not destroy any
financing statements filed with respect to the debtor until
termination of the insolvency proceedings. The security
interest remains perfected until termination of the insolvency
proceedings and thereafter for a period of 60 days or until
expiration of the five year period, whichever occurs later.
(4) Except as provided in subsection (7) a filing officer
shall mark each statement with a file number and with the date
and hour of filing and shall hold the statement or a microfilm
or other photographic copy thereof for public inspection. In
addition the filing officer shall index the statements according
to the name of the debtor and shall note in the index the file
number and the address of the debtor given in the statement.
(5) The secretary of state shall prescribe uniform forms
for statements and samples thereof shall be furnished to all
filing officers in the state. The uniform fee for filing and
indexing and for stamping a copy furnished by the secured party
to show the date and place of filing for an original financing
statement or for a continuation statement shall be $5 if the
statement is in the standard form prescribed by the secretary of
state and otherwise shall be $10, plus in each case, if the
financing statement is subject to subsection (5) of section
336.9-402, $5. An additional fee of $5 shall be collected if
more than one name is required to be indexed or if the secured
party, at his option, shows a trade name for any debtor listed.
There shall be no fee collected for the filing of an amendment
to a financing statement if the amendment is in the standard
form prescribed by the secretary of state and does not add
additional debtor names to the financing statement. The fee for
an amendment adding additional debtor names shall be $5 if the
amendment is in the form prescribed by the secretary of state
and, if otherwise, $10. The fee for an amendment which is not
in the form prescribed by the secretary of state but which does
not add additional names shall be $5.
The secretary of state shall adopt rules for filing,
amendment, continuation, termination, removal, and destruction
of financing statements.
(6) If the debtor is a transmitting utility (subsection (5)
of section 336.9-401) and a filed financing statement so states,
it is effective until a termination statement is filed. A real
estate mortgage which is effective as a fixture filing under
subsection (6) of section 336.9-402 remains effective as a
fixture filing until the mortgage is released or satisfied of
record or its effectiveness otherwise terminates as to the real
estate.
(7) When a financing statement covers timber to be cut or
covers minerals or the like (including oil and gas) or accounts
subject to subsection (5) of section 336.9-103, or is filed as a
fixture filing, it shall be filed for record and the filing
officer shall index it under the names of the debtor and any
owner of record shown on the financing statement in the same
fashion as if they were the mortgagors in a mortgage of the real
estate described, and, to the extent that the law of this state
provides for indexing of mortgages under the name of the
mortgagee, under the name of the secured party as if he were the
mortgagee thereunder, or, for filing offices other than the
secretary of state, where indexing is by description in the same
fashion as if the financing statement were a mortgage of the
real estate described. If requested of the filing officer on
the financing statement, a financing statement filed for record
as a fixture filing in the same office where nonfixture filings
are made is effective, without a dual filing, as to collateral
listed thereon for which filing is required in such office
pursuant to section 336.9-401 (1) (a); in such case, the filing
officer shall also index the recorded statement in accordance
with subsection (4) using the recording data in lieu of a file
number.
(8) The fees provided for in this article shall supersede
the fees for similar services otherwise provided for by law
except in the case of security interests filed in connection
with a certificate of title on a motor vehicle.
(9) A financing statement that covers crops growing or to
be grown is effective for a period of two years. A continuation
statement may be filed for the products of the crop covered in
the original financing statement. A continuation statement is
effective for a period of two years and may be filed within six
months prior to the expiration of the two-year period for the
financing statement.
Sec. 26. Laws 1983, chapter 215, section 16, as amended by
Laws 1984, chapter 474, section 7, is amended to read:
Sec. 16. [REPEALER.]
Sections 1 to 15 are repealed effective July 1, 1985 1987,
but any postponement or other relief ordered by a court
continues to be valid for the period ordered by the court.
Sec. 27. [EFFECTIVE DATE.]
Sections 4 to 6, and 8 to 14 are effective July 1, 1985.
Sections 24 and 25 are effective for crops planted after
September 1, 1985. The remaining sections of this act are
effective the day following final enactment.
Approved June 7, 1985
Official Publication of the State of Minnesota
Revisor of Statutes