2006 Minnesota Statutes

CHAPTER 583. MORTGAGE AND CONTRACT FOR DEED MORATORIUMS

583.01 [Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 1985 c 306 s 26; 1987 c 292 s 36; 1989 c
350 art 16 s 7]

583.02 [Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 1985 c 306 s 26; 1987 c 292 s 36; 1989 c
350 art 16 s 7]

583.03 [Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 1985 c 306 s 26; 1987 c 292 s 36; 1989 c
350 art 16 s 7]

583.04 [Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 1985 c 306 s 26; 1987 c 292 s 36; 1989 c
350 art 16 s 7]

583.05 [Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 1985 c 306 s 26; 1987 c 292 s 36; 1989 c
350 art 16 s 7]

583.06 [Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 1985 c 306 s 26; 1987 c 292 s 36; 1989 c
350 art 16 s 7]

583.07 [Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 1985 c 306 s 26; 1987 c 292 s 36; 1989 c
350 art 16 s 7]

583.08 [Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 1985 c 306 s 26; 1987 c 292 s 36; 1989 c
350 art 16 s 7]

583.09 [Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 1985 c 306 s 26; 1987 c 292 s 36; 1989 c
350 art 16 s 7]

583.10 [Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 1985 c 306 s 26; 1987 c 292 s 36; 1989 c
350 art 16 s 7]

583.11 [Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 1985 c 306 s 26; 1987 c 292 s 36; 1989 c
350 art 16 s 7]

583.12 [Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 1985 c 306 s 26; 1987 c 292 s 36; 1989 c
350 art 16 s 7]

FARMER-LENDER MEDIATION ACT

583.20 CITATION.
Sections 583.20 to 583.32 may be cited as the "Farmer-Lender Mediation Act."
History: 1986 c 398 art 1 s 5,18; 1987 c 292 s 37; 1989 c 350 art 16 s 8; 1990 c 525
s 1; 1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art 2 s 11; 1997 c 183 art 3 s 29; 1998
c 395 s 7; 1998 c 402 s 6; 1999 c 214 art 2 s 19; 2001 c 195 art 1 s 23; 1Sp2001 c 1 art 2 s
25; 1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55
NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.21 LEGISLATIVE FINDINGS.
The legislature finds that the agricultural sector of the state's economy is under severe
financial stress due to low farm commodity prices, continuing high interest rates, and reduced
net farm income. The suffering agricultural economy adversely affects economic conditions for
all other businesses in rural communities as well. Thousands of this state's farmers are unable to
meet current payments of interest and principal payable on mortgages and other loan and land
contracts and are threatened with the loss of their farmland, equipment, crops, and livestock
through mortgage and lien foreclosures, cancellation of contracts for deed, and other collection
actions. The agricultural economic emergency requires an orderly process with state assistance to
adjust agricultural indebtedness to prevent civil unrest and to preserve the general welfare and
fiscal integrity of the state.
History: 1986 c 398 art 1 s 6,18; 1987 c 292 s 37; 1989 c 350 art 16 s 8; 1990 c 525
s 1; 1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art 2 s 11; 1997 c 183 art 3 s 29; 1998
c 395 s 7; 1998 c 402 s 6; 1999 c 214 art 2 s 19; 2001 c 195 art 1 s 23; 1Sp2001 c 1 art 2 s
25; 1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.215 EXPIRATION.
(a) Sections 336.9-601, subsections (h) and (i); 550.365; 559.209; 582.039; and 583.20 to
583.32, expire June 30, 2009.
(b) Laws 1986, chapter 398, article 1, section 18, as amended, is repealed.
History: 2005 c 107 art 2 s 55

583.22 DEFINITIONS.
    Subdivision 1. Applicability. The definitions in this section apply to sections 583.22 to
583.32.
    Subd. 2. Agricultural property. "Agricultural property" means real property that is
principally used for farming as defined in section 500.24, subdivision 2, paragraph (a), and raising
poultry, and personal property that is used as security to finance a farm operation or used as part of
a farm operation including equipment, crops, livestock, proceeds of the security, and removable
agricultural structures under lease with option to purchase. "Agricultural property" does not
include: personal property that is subject to a possessory lien under sections 514.18 to 514.22;
property that is leased to the debtor other than removable agricultural structures under lease with
option to purchase; or farm machinery that is primarily used for custom field work.
    Subd. 3.[Repealed, 1Sp1986 c 2 art 2 s 14]
    Subd. 4. Creditor. "Creditor" means the holder of a mortgage on agricultural property, a
vendor of a contract for deed of agricultural property, a person with a lien or security interest in
agricultural property, or a judgment creditor with a judgment against a debtor with agricultural
property.
    Subd. 5. Director. "Director" means the director of the Minnesota Extension Service or the
director's designee.
    Subd. 6. File. "File" means to deliver by the required date by certified mail or another
method acknowledging receipt.
    Subd. 6a. Financial analyst. "Financial analyst" means a person: (1) knowledgeable in
agricultural and financial matters that can provide financial analysis; (2) who is able to aid the
debtor in preparing the financial information required under section 583.26, subdivision 3; and
(3) who is approved by the director. A financial analyst may include county extension agents,
adult farm management instructors, technical college instructors, and other persons able to carry
out the duties of a financial analyst.
    Subd. 7. Mediator. "Mediator" means a farm mediator appointed by the director.
    Subd. 7a. Necessary farm operating expenses. As used in section 583.27, "necessary
farm operating expenses" means a sum or sums adequate to continue, during the mediation
period, farm operations begun prior to the notice of default. "Necessary farm operating expenses"
does not include expenses for increasing the scale of an ongoing farming operation or planting
additional crops.
    Subd. 7b. Necessary living expenses. As used in section 583.27, "necessary living expenses"
means a sum approximately equal to 1-1/2 times the amount to which the family would be entitled
if eligible for payments under chapter 256J, unless limited by section 583.27, subdivision 1,
paragraph (b).
    Subd. 8. Serve. "Serve" means (1) personal service as in a district court civil action; (2)
service by certified mail using return receipt signed by addressee only; (3) actual delivery of
required documents with signed receipt; or (4) if an unsuccessful attempt is made to serve under
clause (1) or (2), service may be made by mail with a certificate of mailing to the last known
address of the debtor. For purposes of serving under clause (4), the addressee is considered to
have been served the documents five days after the date on the certificate of mailing.
History: 1986 c 398 art 1 s 7,18; 1Sp1986 c 2 art 2 s 1-4; 1987 c 258 s 12; 1987 c 292 s
11-14,37; 1989 c 246 s 2; 1989 c 350 art 16 s 8; 1990 c 525 s 1; 1991 c 208 s 2; 1Sp1993 c 2 art
6 s 2; 1995 c 212 art 2 s 11; 1997 c 183 art 3 s 28,29; 1998 c 395 s 7; 1998 c 402 s 6; 1999 c 159
s 153; 1999 c 214 art 2 s 18,19; 2001 c 195 art 1 s 23; 1Sp2001 c 1 art 2 s 25; 1Sp2001 c 2 s
150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.23 FARM MEDIATION.
    Subdivision 1. Training. The director must provide training and support for mediators.
    Subd. 2. Appointment. The director must provide mediators by contracting with qualified
persons experienced in farm finance, agricultural law, and negotiation.
    Subd. 3. Administration. The director may appoint a farm mediation administrator. The
administrator and director shall provide training for farm mediators and credit analysts and
coordinate community legal education programs for farmers.
History: 1986 c 398 art 1 s 8,18; 1987 c 292 s 37; 1989 c 350 art 16 s 8; 1990 c 525
s 1; 1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art 2 s 11; 1997 c 183 art 3 s 29; 1998
c 395 s 7; 1998 c 402 s 6; 1999 c 214 art 2 s 19; 2001 c 195 art 1 s 23; 1Sp2001 c 1 art 2 s
25; 1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.24 APPLICABILITY.
    Subdivision 1. Creditors. (a) The Farmer-Lender Mediation Act applies to creditors who are
owed debts subject to the Farmer-Lender Mediation Act and are:
(1) the United States or an agency of the United States;
(2) corporations, partnerships, and other business entities; and
(3) individuals.
(b) The Farmer-Lender Mediation Act does not apply to creditors of a debtor described
under subdivision 2, paragraph (b).
    Subd. 2. Debtors. (a) Except as provided in paragraph (b) the Farmer-Lender Mediation Act
applies to a debtor who is:
(1) a person operating a family farm as defined in section 500.24, subdivision 2;
(2) a family farm corporation as defined in section 500.24, subdivision 2; or
(3) an authorized farm corporation as defined in section 500.24, subdivision 2.
(b) The Farmer-Lender Mediation Act does not apply to a debtor who owns and leases
less than 60 acres if the debtor has less than $20,000 in gross sales of agricultural products the
preceding year.
    Subd. 3.[Repealed, 1987 c 292 s 39]
    Subd. 4. Debts. The Farmer-Lender Mediation Act does not apply to a debt:
(1) for which a proof of claim form has been filed in bankruptcy by a creditor or that was
listed as a scheduled debt, of a debtor who has filed a petition in bankruptcy after July 1, 1987,
under United States Code, title 11, chapter 7, 11, 12, or 13;
(2) if the debt was in default when the creditor received a mediation proceeding notice under
the Farmer-Lender Mediation Act and the creditor filed a claim form, the debt was mediated
during the mediation period under section 583.26, subdivision 8, and (i) the mediation was
unresolved; or (ii) a mediation agreement with respect to that debt was signed;
(3) for which the creditor has served a mediation notice, the debtor has failed to make a
timely request for mediation, and within 60 days after the debtor failed to make a timely request
the creditor began a proceeding to enforce the debt against the agricultural property of the debtor;
(4) for which a creditor has received a mediation proceeding notice and the creditor and
debtor have restructured the debt and have signed a separate mediation agreement with respect
to that debt; or
(5) for which there is a lien for rental value of farm machinery under section 514.661.
History: 1986 c 398 art 1 s 9,18; 1Sp1986 c 2 art 2 s 5,6; 1987 c 292 s 15,16,37; 1988 c
474 s 2; 1988 c 700 s 3; 1989 c 350 art 16 s 5,8; 1990 c 525 s 1; 1991 c 208 s 2; 1Sp1993 c 2
art 6 s 1,2; 1995 c 212 art 2 s 11; 1997 c 183 art 3 s 29; 1998 c 395 s 7; 1998 c 402 s 6; 1999 c
214 art 2 s 19; 2001 c 195 art 1 s 23; 1Sp2001 c 1 art 2 s 25; 1Sp2001 c 2 s 150; 2002 c 379
art 1 s 104; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.25 VOLUNTARY MEDIATION PROCEEDINGS.
A debtor that owns agricultural property or a creditor of the debtor may request mediation
of the indebtedness by a farm mediator by applying to the director. The director shall make
voluntary mediation application forms available at the county recorder's and county extension
office in each county. The director must evaluate each request and may direct a mediator to meet
with the debtor and creditor to assist in mediation.
History: 1986 c 398 art 1 s 10,18; 1987 c 292 s 37; 1989 c 350 art 16 s 8; 1990 c 525 s
1; 1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art 2 s 11; 1997 c 183 art 3 s 29; 1998 c
395 s 7; 1998 c 402 s 6; 1999 c 214 art 2 s 19; 2001 c 195 art 1 s 23; 1Sp2001 c 1 art 2 s 25;
1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.26 MANDATORY MEDIATION PROCEEDINGS.
    Subdivision 1. Mediation notice. (a) A creditor desiring to start a proceeding to enforce a
debt against agricultural property under chapter 580 or 581 or sections 336.9-601 to 336.9-628, to
terminate a contract for deed to purchase agricultural property under section 559.21, or to garnish,
levy on, execute on, seize, or attach agricultural property, must serve an applicable mediation
notice under sections 336.9-601, 550.365, 559.209, and 582.039 on the debtor and the director.
The creditor must also file with the director proof of the date the mediation notice was served on
the debtor. The creditor may not begin the proceeding until the stay of the creditor's remedies is
lifted under subdivision 5, or as allowed under sections 583.20 to 583.32.
(b) For purposes of the Farmer-Lender Mediation Act, starting a proceeding to enforce a debt
means initiating a proceeding under chapter 550, 580, or 581; sections 336.9-601 to 336.9-628; or
section 559.21.
(c) The director shall combine all mediation notices for the same debtor that are received
prior to the initial mediation meeting into one mediation proceeding.
    Subd. 2. Mediation request. (a) A debtor must file a mediation request form with the director
by 14 days after receiving a mediation notice. The debtor must state all known creditors with debts
secured for agricultural property. The mediation request form must include an instruction that the
debtor must state all known creditors with debts secured by agricultural property and unsecured
creditors that are necessary for the farm operation of the debtor. It is the debtor's discretion as to
which unsecured creditors are necessary for the farm operation. The mediation request must state
the date that the notice was served on the debtor. The director shall make mediation request forms
available in the county recorder's and county extension office of each county.
(b) Except as provided in section 583.24, subdivision 4, paragraph (a), clause (3), a debtor
who fails to file a timely mediation request waives the right to mediation for that debt under the
Farmer-Lender Mediation Act. The director shall notify the creditor who served the mediation
notice stating that the creditor may proceed against the agricultural property because the debtor
has failed to file a mediation request.
(c) If a debtor has not received a mediation notice and is subject to a proceeding of a creditor
enforcing a debt against agricultural property under chapter 580 or 581 or sections 336.9-601 to
336.9-628, terminating a contract for deed to purchase agricultural property under section 559.21,
or garnishing, levying on, executing on, seizing, or attaching agricultural property, the debtor
may file a mediation request with the director. The mediation request form must indicate that the
debtor has not received a mediation notice.
    Subd. 3. Financial analyst and farm advocate. (a) Within three business days after
receiving a mediation request, the director shall provide a financial analyst to meet with the
debtor and assure that information relative to the finances of the debtor is prepared for the initial
mediation meeting. The financial analyst must review and, if necessary, prepare the debtor's
financial records before the initial mediation meeting.
(b) After receiving the mediation notice, the director shall provide the debtor with a list of
farm advocates that may be available without charge to assist the debtor and the financial analyst.
    Subd. 3a. Orientation session. The director shall schedule an orientation session to be
held at least five days before the first mediation meeting. The debtor, the financial analyst, and
a mediator shall participate in the orientation session. The mediator at the session need not be
the one assigned to the mediation proceeding under subdivision 4. Creditors participating in the
mediation may participate in the orientation session. At the orientation session, the financial
analyst shall review the debtor's financial and inventory records to determine if they are adequate
for the mediation and inform the debtor of any inadequacies, and the mediator shall inform the
debtor of the requirements of the mediation process.
    Subd. 4. Mediation proceeding notice. (a) By ten days after receiving a mediation request,
the director shall send: (1) a mediation proceeding notice to the debtor; (2) a mediation proceeding
notice to all creditors listed by the debtor in the mediation request; and (3) a claim form to all
secured creditors stated by the debtor.
(b) The mediation proceeding notice must state:
(1) the name and address of the debtor;
(2) that the debtor has requested mediation under the Farmer-Lender Mediation Act;
(3) the time and place for the orientation session;
(4) the time and place for the initial mediation meeting;
(5) a list of the names of three mediators that may be assigned to the proceeding, along with
background information on those mediators including biographical information, a summary of
previous mediation experience, and the number of agreements signed by parties to previous
mediation;
(6) that the debtor and the initiating creditor may each request the director to exclude one
mediator by notifying the director within three days after receiving the notice;
(7) that in lieu of having a mediator assigned by the director, the debtor and any one or
more of the creditors may agree to select and pay for a professional mediator that is approved
by the director;
(8) that the Farmer-Lender Mediation Act prohibits the creditor from beginning or continuing
a proceeding to enforce the debt against agricultural property for 90 days after the debtor files a
mediation request with the director unless otherwise allowed; and
(9) that the creditor must provide the debtor by the initial mediation meeting with copies of
notes and contracts for debts subject to the Farmer-Lender Mediation Act and provide a statement
of interest rates on the debts, delinquent payments, unpaid principal and interest balances, the
creditor's value of the collateral, and debt restructuring programs available by the creditor.
(c) An initial mediation meeting must be held within 20 days of the notice.
(d) The initiating creditor and the debtor may each request the director to exclude one
mediator from the list by sending the director a notice to exclude the mediator within three days
after receiving the mediation proceeding notice.
(e) In lieu of the director assigning a mediator, the debtor and any one or more of the
creditors may agree to select and pay for a professional mediator for the mediation proceeding.
The director must approve the professional mediator before the professional mediator may be
assigned to the mediation proceeding. The professional mediator may not be approved unless the
professional mediator prepares and signs an affidavit:
(1) disclosing any biases, relationships, or previous associations with the debtor or creditors
subject to the mediation proceedings;
(2) stating certifications, training, or qualifications as a professional mediator;
(3) disclosing fees to be charged or a rate schedule of fees for the mediation proceeding; and
(4) affirming to uphold the Farmer-Lender Mediation Act and faithfully discharge the
duties of a mediator.
(f) After receiving a mediation proceeding notice, a secured creditor must return a claim
form if the debt is not subject to the Farmer-Lender Mediation Act and specify why the debt
is not subject to sections 583.20 to 583.32.
    Subd. 5. Effect of mediation proceeding notice. (a) Except as provided in paragraphs (b),
(c), and (d), if a creditor receives a mediation proceeding notice under subdivision 4 the creditor
and the creditor's successors in interest may not begin or continue proceedings to enforce a
debt subject to the Farmer-Lender Mediation Act against agricultural property of the debtor
under chapter 580 or 581 or sections 336.9-501 to 336.9-508, to terminate a contract for deed to
purchase agricultural property under section 559.21, or to garnish, levy on, execute on, seize,
or attach agricultural property until 90 days after the date the debtor files a mediation request
with the director.
(b) Except as provided in paragraph (c), if a creditor is an agency of the United States
and receives a mediation proceeding notice under subdivision 4, the creditor and the creditor's
successors in interest may not begin or continue proceedings to enforce a debt against agricultural
property of the debtor under chapter 580 or 581 or sections 336.9-501 to 336.9-508, to terminate
a contract for deed to purchase agricultural property under section 559.21, or to garnish, levy
on, execute on, seize, or attach agricultural property until 90 days after the date the debtor files a
mediation request with the director.
(c) Notwithstanding paragraphs (a) and (b) or subdivision 1, a creditor receiving a mediation
proceeding notice may begin proceedings to enforce a debt against agricultural property of the
debtor:
(1) at the time the creditor receives a mediator's affidavit of the debtor's lack of good faith
under section 583.27; or
(2) five days after the date the debtor and creditor sign an agreement allowing the creditor
to proceed to enforce the debt against agricultural property if the debtor has not rescinded the
agreement within the five days.
(d) A creditor receiving a mediation proceeding notice must provide the debtor by the initial
mediation meeting with copies of notes and contracts for debts subject to the Farmer-Lender
Mediation Act and provide a statement of interest rates on the debts, delinquent payments, unpaid
principal balance, a list of all collateral securing debts, a creditor's estimate of the value of the
collateral, and debt restructuring programs available by the creditor.
(e) The provisions of this subdivision are subject to section 583.27, relating to extension
or reduction in the period before a creditor may begin to enforce a debt and court-supervised
mediation.
    Subd. 6. Eligibility and duties of mediator. (a) A person is not eligible to be a mediator if
the person has a conflict of interest that does not allow the person to be impartial. A conflict of
interest includes being a current officer or board member or officer of the initiating creditor.
(b) At the initial mediation meeting and subsequent meetings, the mediator shall:
(1) listen to the debtor and the creditors desiring to be heard;
(2) attempt to mediate between the debtor and the creditors;
(3) advise the debtor and creditors of assistance programs available;
(4) attempt to arrive at an agreement to fairly adjust, refinance, or pay the debts; and
(5) advise, counsel, and assist the debtor and creditors in attempting to arrive at an agreement
for the future conduct of financial relations among them.
    Subd. 7. Mediator liability and immunity. (a) A mediator is immune from civil liability for
actions within the scope of the position as mediator. A mediator does not have a duty to advise
a creditor or debtor about the law or to encourage or assist a debtor or creditor in reserving or
establishing legal rights. This subdivision is an addition to and not a limitation of immunity
otherwise accorded to a mediator under law.
(b) A mediator cannot be examined about a communication or document, including
worknotes, made or used in the course of or because of mediation under this section and section
583.27. This paragraph does not apply to the parties in the dispute in an application to a court
by a party to have a mediated settlement agreement set aside or reformed. A communication or
document otherwise not privileged does not become privileged because it is used in the cause
of mediation. This paragraph is not intended to limit the privilege accorded to communication
during mediation by the common law.
    Subd. 8. Mediation period. The mediator may call mediation meetings during the mediation
period, which is up to 60 days after the initial mediation meeting.
    Subd. 9. Mediation agreement. (a) If an agreement is reached among the debtor and
creditors the mediator shall witness and sign a written mediation agreement, have it signed by the
debtor and creditors, and, if applicable, submit the agreement to the Minnesota Rural Finance
Authority for approval of debt restructuring.
(b) The debtor and creditors who are parties to the approved mediation agreement and
creditors who have filed claim forms and have not objected to the mediation agreement:
(1) are bound by the terms of the agreement;
(2) may enforce the mediation agreement as a legal contract; and
(3) may use the mediation agreement as a defense against an action contrary to the mediation
agreement.
(c) A debtor may agree to allow a creditor to proceed to enforce a debt against agricultural
property before the enforcement is otherwise allowed under subdivision 5, but the debtor or
creditor may rescind the agreement within five business days after the debtor and particular
creditor both sign the agreement.
    Subd. 10. End of mediation. (a) The mediator shall sign and serve to the parties and the
director a termination statement by the end of the time period specified in subdivision 5.
(b) The mediator shall prepare a termination statement that:
(1) acknowledges that mediation has ended; and
(2) describes or references agreements reached between a creditor and the debtor, if any, and
agreements reached among creditors, if any.
(c) Mediation agreements may be included as part of the termination statement.
History: 1986 c 398 art 1 s 11,18; 1Sp1986 c 2 art 2 s 7; 1Sp1986 c 3 art 2 s 13; 1987 c 292
s 17-25,37,38; 1987 c 396 art 1 s 31; 1988 c 474 s 3; 1989 c 350 art 16 s 6,8; 1990 c 525 s 1;
1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art 2 s 11; 1997 c 183 art 3 s 29; 1998 c 395 s
7; 1998 c 402 s 6; 1999 c 214 art 2 s 19; 2001 c 195 art 1 s 23; art 2 s 36,37; 1Sp2001 c 1 art 2 s
25; 1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.27 GOOD FAITH REQUIRED, COURT SUPERVISED MEDIATION.
    Subdivision 1. Obligation of good faith. (a) The parties must engage in mediation in good
faith. Not participating in good faith includes: (1) a failure on a regular or continuing basis to
attend and participate in mediation sessions without cause; (2) failure to provide full information
regarding the financial obligations of the parties and other creditors including the obligation of a
creditor to provide information under section 583.26, subdivision 5, paragraph (d); (3) failure of
the creditor to designate a representative to participate in the mediation with authority to make
binding commitments within one business day to fully settle, compromise, or otherwise mediate
the matter; (4) lack of a written statement of debt restructuring alternatives and a statement
of reasons why alternatives are unacceptable to one of the parties; (5) failure of a creditor to
release funds from the sale of farm products to the debtor for necessary living and farm operating
expenses; or (6) other similar behavior which evidences lack of good faith by the party. A failure
to agree to reduce, restructure, refinance, or forgive debt does not, in itself, evidence lack of
good faith by the creditor.
(b) The amount that the creditor is required to release for necessary living expenses under
this section is limited to $1,600 per month less the debtor's off-farm income.
(c) If the debtor and creditor do not agree on the amount of necessary living expenses to
be released, the debtor or creditor may petition conciliation court in the county of the debtor's
residence to make a determination of the amount to be released. The conciliation court must make
the determination within ten days after receiving the petition.
(d) If the debtor and creditors do not agree on the amount of necessary operating expenses or
necessary living and operating expenses to be released, the debtor or a creditor requested to release
necessary living or operating expenses may petition the district court of the debtor's residence to
make a determination of the amount to be released. The court shall hear and make a determination
of the amount of living and operating expenses to be released within ten days after receiving the
petition. The court shall also add or subtract up to ten days to the time when the creditor can begin
to enforce a proceeding to collect the debt against agricultural property of the debtor and assess
costs, including any attorney fees, among the parties to the court proceeding. The court shall
equitably adjust the time to begin a creditor's proceeding and the assessment of costs based on the
parties' good faith claim to the amount of living and operating expenses to be released.
    Subd. 2. Party's bad faith; mediator's affidavit. If the mediator determines that either party
is not participating in good faith as defined in subdivision 1, the mediator shall file an affidavit
indicating the reasons for the finding with the director and with parties to the mediation.
    Subd. 3. Creditor's bad faith; court supervision. If the mediator finds the creditor has
not participated in mediation in good faith, the debtor may require court supervised mandatory
mediation by filing the affidavit with the district court of the county of the debtor's residence with
a request for court supervision of mediation and serving a copy of the request on the creditor.
Upon request the court shall require both parties to mediate under the supervision of the court in
good faith for a period of not more than 60 days. All creditor remedies must be suspended during
this period. The court may issue orders necessary to effect good faith mediation. Following the
mediation period, if the court finds the creditor has not participated in mediation in good faith,
the court shall by order suspend the creditor's remedies for an additional period of 180 days. A
creditor found by the mediator not to have participated in good faith shall pay attorneys' fees
and costs of the debtor requesting court-supervision of mediation or additional suspension of
creditor's remedies.
    Subd. 4. Debtor's lack of good faith. (a) A debtor is not mediating in good faith if the debtor
fraudulently conceals, removes, or transfers agricultural property in which the debtor knows
there is a security interest. The concealing, removing, or transferring must be in violation of a
security agreement without remitting the proceeds to the secured party and must have occurred
during the mediation period.
(b) A creditor may immediately proceed with creditor's remedies upon receipt of a mediator's
affidavit of a debtor's lack of good faith notwithstanding any other requirements of sections
583.20 to 583.32.
    Subd. 5. Inspection of collateral. (a) After a debtor requests mediation under section
583.26, subdivision 2, a creditor who is participating in the mediation and who has a security
agreement relating to agricultural property under the debtor's control may inspect the secured
agricultural property during normal business hours on 24 hours' notice to the debtor. For purposes
of this subdivision, "normal business hours" means 8:00 a.m. to 6:00 p.m. Monday through
Saturday but excludes legal Minnesota and United States holidays.
(b) Failure to permit this inspection by the creditor, or destruction or waste of the property
securing the debt, is evidence of the debtor's lack of good faith under subdivision 1, clause (6).
    Subd. 6. Review of good faith finding. (a) Upon petition by a debtor or creditor, a court
may review a mediator's affidavit of lack of good faith or a mediator's failure to file an affidavit
of lack of good faith of a creditor under subdivision 3 or a debtor under subdivision 4. The
review is limited to whether the mediator committed an abuse of discretion in filing or failing
to file an affidavit of lack of good faith. The petition must be reviewed by the court within ten
days after the petition is filed.
(b) If the court finds that the mediator committed an abuse of discretion in filing, or failing
to file, an affidavit of lack of good faith, the court may: (1) reinstate mediation and the stay of
creditors' enforcement actions; (2) order court supervised mediation; or (3) allow creditors to
proceed immediately with creditors' remedies.
(c) A mediator may offer testimony but is not required to testify as part of the court's review.
    Subd. 7. Conversion of security. A debtor who fraudulently conceals, removes, or transfers
agricultural property in which the debtor knows there is a security interest is ineligible for
mediation under the Farmer-Lender Mediation Act if the concealing, removing, or transferring
was in violation of a security agreement without remitting the proceeds to the secured party. The
secured party must petition the district court in the county of the debtor's residence for an order
permitting the secured party to proceed with the secured party's remedies notwithstanding sections
583.20 to 583.32. The petition must be brought within one year after the concealing, removing, or
transferring occurred. The district court shall issue a summons within seven days commanding the
person against whom the petition is made to appear before the court on a day and place stated in
the summons. The appearance must be no less than seven and no more than 14 days from the
issuance of the summons. The district court must deliver findings within ten days after the close
of the hearing. A petition under this subdivision cannot be brought after the secured party has
served a mediation notice on the debtor under section 583.26.
    Subd. 8. Appraisal if value disputed. In case of a dispute between the debtor and creditors
concerning the market value of real property involved in mediation, the true and acceptable
market value must be determined by appraisal as provided in this subdivision. The appraisal to
determine true market value must be performed by an accredited appraiser and made within 45
days of the date of the dispute. The accredited appraiser shall be selected as follows:
(1) the mediator shall submit the names of three accredited appraisers to the principal
creditor and debtor;
(2) the principal creditor and the debtor may each, within a time determined by the mediator,
strike the name of one of the appraisers submitted by the mediator;
(3) the accredited appraiser whose name is not stricken by either the principal creditor or
the debtor shall perform an appraisal which shall be the true market value accepted by all parties
to the dispute.
The cost of the appraisal shall be divided equally between the principal creditor and debtor.
History: 1986 c 398 art 1 s 12,18; 1Sp1986 c 2 art 2 s 8; 1987 c 292 s 26-31,37; 1988 c 700
s 11; 1989 c 350 art 16 s 8; 1990 c 525 s 1; 1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art
2 s 11; 1997 c 183 art 3 s 29; 1998 c 395 s 7; 1998 c 402 s 6; 1999 c 214 art 2 s 19; 2001 c 195
art 1 s 23; 1Sp2001 c 1 art 2 s 25; 1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.28 CREDITOR NOT ATTENDING MEDIATION MEETING.
    Subdivision 1. Filing and effect of claim form. A creditor that is notified of the initial
mediation meeting is subject to and bound by a mediation agreement if the creditor does not attend
mediation meetings unless the creditor files a claim form. In lieu of attending a mediation meeting,
a creditor may file a notice of claim and proof of claim on a claim form with the mediator before
the scheduled meeting. By filing a claim form the creditor agrees to be bound by a mediation
agreement reached at the mediation meeting unless an objection is filed within the time specified.
The mediator must notify the creditors who have filed claim forms of the terms of any agreement.
    Subd. 2. Objections to agreements. A creditor who has filed a claim form may serve
a written objection to the terms of the agreement on the mediator and the debtor within ten
days after receiving notice of the agreement. If a creditor files an objection to the terms of
an agreement, the mediator shall meet again with debtors and creditors within ten days after
receiving the objection to mediate a new agreement. Notwithstanding the mediation period under
section 583.26, subdivision 8, if an objection is filed, the mediator shall call mediation meetings
during the ten-day period following receipt of the objection.
History: 1986 c 398 art 1 s 13,18; 1Sp1986 c 2 art 2 s 9; 1987 c 292 s 37; 1989 c 350 art 16
s 8; 1990 c 525 s 1; 1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art 2 s 11; 1997 c 183 art 3
s 29; 1998 c 395 s 7; 1998 c 402 s 6; 1999 c 214 art 2 s 19; 2001 c 195 art 1 s 23; 1Sp2001 c 1
art 2 s 25; 1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.284 RETENTION OF PURCHASE MONEY SECURITY INTEREST.
If a creditor has a purchase money security interest under section 336.9-103, and renegotiates
the debt under the Farmer-Lender Mediation Act to reduce the principal balance or the interest
rate or to extend the repayment period, the creditor retains the purchase money security interest
for the renegotiated debt.
History: 1986 c 398 art 1 s 18; 1987 c 292 s 32,37; 1989 c 350 art 16 s 8; 1990 c 525 s 1;
1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art 2 s 11; 1997 c 183 art 3 s 29; 1998 c 395 s
7; 1998 c 402 s 6; 1999 c 214 art 2 s 19; 2001 c 195 art 1 s 23; art 2 s 38; 1Sp2001 c 1 art 2 s
25; 1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.285 MEDIATION RULES.
The commissioner of agriculture, in consultation with the commissioner of the Bureau
of Mediation Services and the director of the University of Minnesota Agricultural Extension
Service, shall make rules under chapter 14, to implement the Farmer-Lender Mediation Act.
History: 1986 c 398 art 1 s 18; 1Sp1986 c 2 art 2 s 10; 1987 c 186 s 15; 1987 c 292 s 33,37;
1989 c 350 art 16 s 8; 1990 c 525 s 1; 1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art 2 s
11; 1996 c 305 art 2 s 65; 1997 c 183 art 3 s 29; 1998 c 395 s 7; 1998 c 402 s 6; 1999 c 214 art 2
s 19; 2001 c 195 art 1 s 23; 1Sp2001 c 1 art 2 s 25; 1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.29 PRIVATE DATA.
All data regarding the finances of individual debtors and creditors created, collected, and
maintained by the mediators or the director are classified as private data on individuals under
section 13.02, subdivision 12, or nonpublic data under section 13.02, subdivision 9.
History: 1986 c 398 art 1 s 14,18; 1Sp1986 c 2 art 2 s 11; 1987 c 292 s 33,37; 1989 c 350
art 16 s 8; 1990 c 525 s 1; 1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art 2 s 11; 1997 c
183 art 3 s 29; 1998 c 395 s 7; 1998 c 402 s 6; 1999 c 214 art 2 s 19; 2001 c 195 art 1 s 23;
1Sp2001 c 1 art 2 s 25; 1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.30 FORMS AND COMPENSATION.
    Subdivision 1. Compensation. The director shall set the compensation of mediators and
credit analysts.
    Subd. 2. Forms. The director shall adopt voluntary mediation application, mediation request,
and claim forms.
History: 1986 c 398 art 1 s 15,18; 1987 c 292 s 37; 1989 c 350 art 16 s 8; 1990 c 525 s
1; 1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art 2 s 11; 1997 c 183 art 3 s 29; 1998 c
395 s 7; 1998 c 402 s 6; 1999 c 214 art 2 s 19; 2001 c 195 art 1 s 23; 1Sp2001 c 1 art 2 s 25;
1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.305 PROHIBITED WAIVERS.
A waiver of mediation rights under the Farmer-Lender Mediation Act is void except as
expressly allowed under the Farmer-Lender Mediation Act.
History: 1986 c 398 art 1 s 18; 1987 c 292 s 34,37; 1989 c 350 art 16 s 8; 1990 c 525 s
1; 1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art 2 s 11; 1997 c 183 art 3 s 29; 1998 c
395 s 7; 1998 c 402 s 6; 1999 c 214 art 2 s 19; 2001 c 195 art 1 s 23; 1Sp2001 c 1 art 2 s 25;
1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.31 ENFORCEMENT.
The mediation agreement must be enforced by the district court.
History: 1986 c 398 art 1 s 16,18; 1987 c 292 s 37; 1989 c 350 art 16 s 8; 1990 c 525 s
1; 1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art 2 s 11; 1997 c 183 art 3 s 29; 1998 c
395 s 7; 1998 c 402 s 6; 1999 c 214 art 2 s 19; 2001 c 195 art 1 s 23; 1Sp2001 c 1 art 2 s 25;
1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.311 VOLUNTARY ALTERNATIVE DISPUTE RESOLUTION.
The administrator shall establish procedures and measures to ensure maximum use of
alternative dispute resolution under this chapter for disputes in rural areas. Referrals may be
accepted from courts, state agencies, local units of government, or any party to a dispute
involving rural land, regulation, rural individuals, businesses, or property, or any matter affecting
rural quality of life. The legislature encourages state and federal agencies and governmental
subdivisions to use the services provided by the administrator under this chapter and to cooperate
fully when matters under this jurisdiction are subjected to alternative dispute resolution methods.
The administrator may set fees for participation in voluntary procedures to pay all or part of
the costs of providing such services.
History: 1998 c 395 s 2; 1998 c 402 s 5

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.

583.32 INCONSISTENT LAWS.
The Farmer-Lender Mediation Act has precedence over any inconsistent or conflicting laws
and statutes including chapters 336, 580, and 581, and section 559.21.
History: 1986 c 398 art 1 s 17,18; 1987 c 292 s 37; 1989 c 350 art 16 s 8; 1990 c 525 s
1; 1991 c 208 s 2; 1Sp1993 c 2 art 6 s 2; 1995 c 212 art 2 s 11; 1997 c 183 art 3 s 29; 1998 c
395 s 7; 1998 c 402 s 6; 1999 c 214 art 2 s 19; 2001 c 195 art 1 s 23; 1Sp2001 c 1 art 2 s 25;
1Sp2001 c 2 s 150; 2005 c 107 art 2 s 55

NOTE: This section expires June 30, 2009. Section 583.215, as added by Laws 2005,
chapter 107, article 2, section 55.