Tips & Traps

Tip:
Updating Corporate Information.  I check the Secretary of State’s Web site periodically to ensure that the name, address and other information about my business clients is correct and current.  I am surprised at how often something (particularly an address) needs to be updated.  Clients appreciate the effort, and often will hire me to do the necessary updating.  Business entity information is available online at:  http://online.sos.state.mn.us.

Mary Martin
Law Offices of Mary K. Martin
South St. Paul
mminlaw@aol.com 

Trap:
Antenuptial Agreements. Failure to attach the required financial disclosure information as exhibits to an otherwise valid antenuptial agreement may render it invalid, thereby allowing a surviving spouse, or his or her estate, to exercise certain statutory rights to family allowance, exempt property, and elective share. This was the issue presented in In re: Estate of John P. Meath aka John Paul Meath, Deceased. C4-02-1905, (Minn. App. 2003).

In Meath, the trial court awarded the surviving spouse’s estate family maintenance and a certain amount of exempt property. The court also concluded that the estate was entitled to an elective share because the antenuptial agreement was invalid and unenforceable as a matter of law. The court’s conclusion was based, in part, on its findings that financial disclosure exhibits were not only never attached to the agreement, they were never drafted.

William Forsberg
Parsinen Kaplan Rosberg & Gotlieb
Minneapolis
wforsberg@parlaw.com 

Tip:
Voice Mail Tag. Combining your cellular phone and the call-forwarding feature of your office desk phone can defeat, once and for all, the Voice Mail Message monster that threatens to engulf many of us.

When out of the office on business or vacation, forward your incoming calls to your cell phone.  Instruct your receptionist to forward calls to your desk phone without informing callers that you are “out of the office.”

If you are free and able to field an incoming call, do so.  If you are in a position where fielding an incoming call would be inconvenient, activate the “silent” feature on your cell phone and let your cell phone voice mail message function take the call.

Clients will be impressed at their improved ability to reach you.  Opposing counsel in the habit of “returning” your calls when you are usually out will be chagrined when you pick up — and you can for once get done what such a caller has been avoiding by playing the voice mail tag game.

For added efficiency, use a hand held Dictaphone to capture the time spent making and returning calls on your cell phone. 

Michael J. Ford
Quinlivan & Hughes, PA
St. Cloud
mford@quinlivan.com 

Tip:
Liquidated Damages.  One of the oldest forms of alternative dispute resolution (ADR), which antedates the term “ADR,” is liquidated damages.  It consists of a provision in a contract stipulating the amount of damages incurred in the event of a breach of agreement.  But liquidated damage clauses are fraught with hazards.  To be valid, these prescribed damages must be of a kind that are not readily calculable.  They also must be a reasonable attempt to forecast actual damages, rather than penalize a breaching party.  (See LeFavor v. Stuebner, 2004 wl 228358 (Minn. App. 2004) (unpublished), where the appellate court invalidated a liquidated damages clause on these grounds.) Notwithstanding the ruling in the LeFavor case, liquidated damages can be an effective device to provide for economic and expeditious resolution of legal disputes.  They generally cannot be used when the harm can be rectified by an ascertainable amount of money.  Although not binding, a statement in the contract that the parties recognize that damages may be difficult to calculate in the event of a breach can be helpful.  The parties also should avoid referring to the sum as a forfeiture or “penalty,” a flaw that contributed to the invalidation of the clause in the LeFavor case.

Marshall H. Tanick
Mansfield, Tanick & Cohen, PA
Minneapolis
mtanick@mansfieldtanick.com 

Tip:
Foreclosure Redemption. If you have trouble explaining mortgage foreclosure redemption priority to clients, try this analogy — it’s like playing poker.

Suppose the property is subject to liens held by A, B and C.  Those are the three players at the poker table.  Mortgage Company A foreclosed, so that becomes their opening bid: A bids $125,000.  Home Equity Loan Company B is owed $50,000.  B must decide whether to see A and raise A’s bid by the amount of B’s loan (in other words, to redeem from A), or to fold.  If B redeems, the bid is $175,000 to Judgment Creditor C.

To bid, you must “ante,” by filing the evidence of your client’s lien and a Notice of Intention to Redeem with the Recorder/Registrar and delivering to the Sheriff (along with his fees) copies of those documents showing the recording data, all before the end of the redemption period of A’s foreclosure (Minn. Stat. §580.24, newly amended).

Nathan Bissonette
Deputy Examiner of Titles
Ramsey County
bls1664@comcast.net