Where the consumer receives on-screen electronic notice of a fee and consents to pay the fee, the consumer suffers no harm if the placard has been damaged, removed, or omitted. However, ATM providers have faced expensive class action litigation over failure to provide these external notices. While actual damages are almost never available for failure to provide only the placard notice, the EFTA provided for statutory damages of $100 to $1,000 per transaction in addition to statutory attorneys’ fees where an ATM operator has failed to provide dual-notice. This problem was exacerbated by the fact that it is not possible to constantly monitor all ATMs to ensure that the placard has not been removed.

Because consumers were not actually harmed by the lack of dual-notice, the House and Senate recently unanimously passed legislation to eliminate dual-notice. The President signed this legislation on December 20, 2012, and the amendment was effective immediately. It is an open question whether the change will affect preexisting litigation or lawsuits filed alleging violations of the dual-notice requirement which took place prior to the amendment. However, because the EFTA contains a one-year statute of limitations, any claim not filed by December 21, 2013, will presumably be barred.

It is important to continue to provide on-screen notice of and consent to incur ATM fees. This sensible amendment provides financial institutions much needed relief from frivolous lawsuits while protecting consumers from incurring hidden fees.

(4)  … [i]f the debtor is an individual to whom this state has issued a driver’s license or state identification card that has not expired, only if the financing statement provides the name of the individual which is indicated on the driver’ license or the state identification card;

(5)  If the debtor is an individual to whom paragraph (4) does not apply, only if the financing statement provides the individual name of the debtor or the surname and first personal name of the debtor…

(g)  …If this state has issued to an individual more than one driver’s license or state identification card or any kind described in subsection (a)(4), the one that was issued most recently is the one to which subsection (a)(4) refers.

Minn. Stat., § 336.9-503(a)(4)-(5), (g) (emphasis added).

There is generally no need to take any action with regard to financing statements properly filed before July 1, 2013.  Under Section 9-805(b), financing statements that were properly filed before the amendments take affect will continue to be effective.  But if a debtor changes his or her name, under Section 9-507(c), the creditor has four months to file Form UCC-3 stating the debtors name consistent with the debtor’s driver’s license or state identification card.  Similarly, once the original financing statement expires (typically five years after the original filing date), the debtor’s name must be corrected.  Merely filing a continuation of the original statement will be ineffective if the original statement did not comply with the new requirements.  While it is not clear from the text of the UCC as adopted by Minnesota, it is likely the most prudent course of action to file Form 3 amending the debtor’s name then to file a separate Form 3 continuing the original statement.

While the new rule is more precise, it has the advantage of generally being easier to follow.  Making a photocopy of the debtor’s driver’s license or state identification card and filing using the debtor’s name exactly as it appears will place the secured party in a good position.  It is important to make a note of when the driver’s license or state identification card expires.  After expiration, subsection (4) above will not apply, and the filing must “provide[] the individual name of the debtor or the surname and first personal name of the debtor.”  Therefore, it is important to confirm that the debtor’s new unexpired driver’s license or personal identification card contains the same name as the previous card or that the financing statement complies with subsection (5).

It is important to remember that even minor discrepancies in the name of the debtor can prevent perfection of a security interest.  Accordingly, confirming compliance with the new law is essential for the financing statement to have any value for the secured party.

Minnesota law also provides that employees serving as election judges must also receive paid time off from their employer to serve.  An employer may, however, offset those employees’ wages by the amount the worker is paid to serve as an election judge, and may also require that the worker provide 20 days’ notice and the certificate from the appointing authority that states the hours to be served and the compensation to be paid for the election judge’s service.  [Minn.Stat. § 204B.195].

Workers in Wisconsin must also be provided up to three consecutive hours of leave to vote, but it is not mandatory that such leave be paid.  [Wis. Stat. 6.76].  Additionally, the Wisconsin employer may choose the hours that the employee is absent and the employee must provide the employer with a request for the time off before election day.

For more information about voting leave, other leave or employment law matters, contact Jerrie Hayes, Chris Wendland, Dave Pederson or Mark Utz at 507-288-5440.

As you may know, hiring a qualified appraiser can help you assess the validity of your own determination of investment value, i.e., the return on your investment in the closely-held business, and help you structure an offer and convince the seller of a negotiating price range.

You may also need the independent appraisal to get financing (e.g. to establish the value of the company’s tangible assets) and to provide documentation to support any valuation. In fact, where the valuation of stock in a closely-held corporation is relevant to the correctness of a tax return, the taxpayer must submit with the return complete financial data on which the valuation is based, including copies of reports of any examination made by accountants, engineers, or technical experts, as of, or near, the valuation date.

Thus, the appraiser’s report can provide this substantiation. What’s more, should the valuation issue become the subject of litigation with IRS, the appraiser’s expert testimony can be the best way of presenting the factors used to value closely-held corporation stock. In fact, it would appear that the taxpayer can even shift the burden of proof to IRS on the valuation issue if the appraiser’s testimony provides credible evidence.

Caution is appropriate in reviewing an expert’s qualifications. The general standard applied to the admissibility of an expert’s opinion is whether that testimony would assist the trier of fact in deciding the case. If an appraiser’s techniques, experience or qualifications are found unreliable and irrelevant, a district court or Tax Court judge may find that the expert’s testimony does not meet the admissability standards of Federal Rule of Evidence and, thus, the testimony will not be evidence in the case.

To save time and money, it may make sense to find an appraiser who can provide both asset appraisals and business valuation. In any case, you should check the appraiser’s references, experience, and credentials. In that regard, you need to determine whether the appraiser has been certified or accredited by the American Society of Appraisers (ASA), the Institute of Business Appraisers (IBA), the National Association of Certified Valuation Analysts (NACVA), or the American Institute of Certified Public Accountants (AICPA).

You should also ask whether your appraiser is familiar with the widely recognized professional standards for appraisers. The Uniform Standards of Professional Appraisal Practice (USPAP) and the Principles of Appraisal Practice and Code of Ethics (PAPCE) establish authoritative principles and a code of professional ethics for appraisers. In addition, the Business Valuation Standards (BVS) of the American Society of Appraisers supplement and clarify the USPAP and the PAPCE with respect to the valuation of businesses, business ownership interests, and securities.

You should also select an appraiser who has real experience in buying or selling businesses. Moreover, it would be a good idea to inquire whether the appraiser has experience testifying as an expert witness to establish valuation and whether the appraiser has represented both taxpayers and IRS. The fact that an appraiser has provided expert testimony on behalf of taxpayers and IRS can only add to the appraiser’s credibility should you someday need his testimony to establish valuation.

For each of the foregoing reasons, it is essential that you select an appraiser whose qualification, experience and analysis are beyond reproach.

In HSBC Mortgage Services, Inc. vs. Graikowski, __ N.W.2d __ (Minn. Ct. App. 2012), the Minnesota Court of Appeals decided a case in which an unmarried borrower, Graikowski,  applied to refinance a mortgage on his homestead, but married two days before closing.  The mortgage was not signed by the non-owner spouse.  Graikowski defaulted on the mortgage and the lender initiated foreclosure proceedings.  Graikowski argued that the mortgage was void because the mortgage lacked his wife’s signature. If Graikowski’s argument was successful, HSBC could not foreclose on the property, and would have no interest in the property.

The Court of Appeals dismissed Graikowski’s argument and found the mortgage to be valid.  The Court of Appeals determined that Graikowski was “estopped” (i.e., legally prevented) from asserting that the mortgage was void because Graikowski had misrepresented his marital status in his loan application.

In most closings, as in Graikowski, a borrower signs a loan application to initiate the underwriting process.  The borrower signs a second loan application at the time of closing (which may be several weeks or months after the initial loan application was signed). When signing a loan application, a borrower affirms that the statements contained therein are true and correct and that the borrower will correct any erroneous information contained on the loan application. Graikowski committed a misrepresentation by signing the second loan application as a “single man”.  Had Graikowski correctly represented his marital status, HSBC would have required Graikowski’s spouse’s signature on the mortgage, and the requirements of § 507.02 would be satisfied.  The Court of Appeals would not allow Graikowski to benefit from his own misrepresentation.

The decision in HSBC Mortgage Services, Inc. v. Graikowski confirms existing law that lenders are allowed to rely on, as true, the representations made by their borrowers.  The decision also provides a cautionary tale to borrowers to inform their lenders of changes that may affect their financing.

Under Minnesota Statutes, at any time before the sheriff’s sale of the mortgaged property, the borrower has the right to reinstate his mortgage, which will act to terminate the foreclosure proceeding.  That is, the borrower may pay all delinquent amounts due and owing under the mortgage, plus costs identified in the statute to the mortgage holder.  Such costs may include interest, the cost of publication of the notice of mortgage foreclosure sale, and limited attorneys’ fees incurred by the financial institution to begin the foreclosure.

If the borrower is uncertain of the total amount due, he may submit a written request to the sheriff, asking for the reinstatement amount.  Pursuant to Minnesota Statutes, the sheriff must provide the borrower with that information within seven days of the date of the written request.

Initially, the Conciliation Court was authorized to hear and determine certain civil trials in which a maximum of $6,000 was sought.  The Conciliation Court’s jurisdiction rose to $7,500 for Conciliation Court matters filed on or after July 1, 1994.

After 18 years, the State Legislature has again increased the Conciliation Court’s jurisdiction.  Effective August 1, 2012, the Conciliation Court will be authorized to hear and determine civil trials for money damages up to $10,000.  This amount will increase to $15,000 for Conciliation Court matters filed on or after August 1, 2014.

The newly enacted revision can be found on the Minnesota State Legislature’s website here.  The language of the revision is subject to change, and the official language will be available on the Minnesota Office of the Revisor of Statute’s webpage later this summer.

The Guidance, published April 25, 2012 and formally entitled, Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, advises employers to exercise caution and restraint in using criminal background checks in making employee selection or retention decisions. Because the EEOC considers criminal records use to run a high risk of disparately impacting minorities and other protected classes, the Guidance cautioned employers to be certain that any employment decisions based on a background check be “job related and consistent with business necessity.” Unfortunately for employers, the Guidance also advised that the EEOC considered such decisions acceptable in only two situations, both of which would have imposed considerable additional “check and balance” obligations on employers that would have, according to many trade and industry groups opposing the Guidance, effectively made it financially and administratively impossible for the average employer to use criminal history information in decision making.

The House vote is a strong signal to the EEOC and the country’s employers that it supports business use of criminal history in hiring and retaining employees. Until the bill is law, however, the EEOC’s Guidance must be taken seriously by employers who do use, or are considering the use of, criminal arrest and conviction records in making human resource decisions. If you have concerns or questions about how the EEOC’s recent Guidance might impact your business, contact Wendland Utz, and its experienced Employment and Labor attorneys, for information and consultation.

http://www.nytimes.com/2011/11/20/realestate/mortgages-inheriting-a-home-and-a-loan.html?_r=1

As you probably already know, Congress recently formed a “Super Committee” (12 members of Congress evenly split between Democrats and Republicans).  That Committee is charged with the task of finding $1.2 to $1.5 trillion in debt savings over a ten-year period.  If reductions cannot be agreed upon by November 23, $1.2 trillion in spending cuts automatically kick in.

Word spread this week that some members of the Committee are suggesting changes to the estate and gift tax portions of the 2010 Tax Act   effective January 1, 2012, including the following:

• Reducing the gift tax exemption from$5 Million to $1 Million.

• Reducing the estate and GST tax exemption from$5 Million to $3.5 Million.

• Increasing the maximum gift, GST and estate tax rates from 35% to 45%.

• Eliminating the use of several estate planning strategies, such as GRATs (Grantor Retained Annuity Trusts) and discounts for family transfers.

There are even rumors that some members of the Committee would like to make these changes effective November 23, 2011.

While it remains to be seen what actions the Committee will recommend and Congress will ultimately take, if you are intent on taking advantage of the previously reported “window of opportunity”, you may not want to wait until next year.  Our attorneys continue to monitor these developments.  Should you have questions about your planning needs or recommendations for year-end planning, please contact one of our estate planning attorneys:  Craig W. Wendland, Mark E. Utz, David M. Pederson, or Christopher C. Wendland.