Tips & Traps

Trap:
Cloudy Sunshine.  Litigation under the Minnesota “sunshine” laws — the Government Data Practices Act and the Open Meeting Law — may have become more difficult for claimants due to a ruling late last year.  Ironically, the ruling came in litigation in which the Data Practices challengers actually prevailed.  In Star Tribune Co. v. University of Minnesota Board of Regents, 683 N.W.2d 274 (Minn. 2004), a group of media claimants succeeded in requiring the University of Minnesota to disclose the identities of candidates who were interviewed for a vacancy in the position of University president.  Claiming “autonomy” under Article 13, §3, of the State Constitution, the University refused to disclose the names of other candidates who were interviewed for the opening.  The Supreme Court ruled that the identities of all the interviewees must be disclosed under both the Data Practices Act and the Open Meeting Law. 

But in a subsequent unpublished order, the Court rejected a claim of more than $300,000 in attorney’s fees by the successful challengers, because the statutory language under §13.08 of the Data Practices Act is permissive, rather than mandatory, as it is in many other fee-shifting measures. On the merits, fees were not awarded because the University had a “reasonable” basis for refusing disclosure.  As a result, “sunshine” litigants may be unable to recover attorney’s fees in successful Data Practices or Open Meeting litigation unless the action of the public entity was blatantly illegal or improper. 

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

Tip:
Trustee’s Discretion. When does a trustee of a trust go too far in exercising his or her discretion in making a distribution?  The Minnesota Court of Appeals addressed that issue in In re Trusts A & B of Divine, 672 N.W.2d 912, (Minn. App. 2004).

The court adopted the following six factors for determining whether a trustee has abused such discretion:  (1) the extent of the discretion conferred upon the trustee by the terms of the trust; (2) the purposes of the trust; (3) the nature of the power; (4) the existence or nonexistence, the definiteness or indefiniteness, of an external standard by which the reasonableness of the trustee’s conduct can be judged; (5) the motives of the trustee in exercising or refraining from exercising the power;  and (6) the existence or nonexistence of an interest in the trustee conflicting with that of the beneficiaries.

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

Trap:
Trademark Clearance.  When setting up a client’s company, do not assume that availability of a corporate name at the state level means that the name can be used as a trademark.  If the corporate name is to be used to identify goods or services to consumers it will be considered a trademark.  Therefore, trademark clearance of the name at a local and even federal level is advisable to avoid a costly rebranding effort should a third party issue a cease and desist letter.  A free resource to begin the clearance effort is the registered trademark database of the United States Patent and Trademark Office, found at www.uspto.gov (click on “Trademarks” and then “Search”).  A trademark attorney can interpret your search results in more depth.

Christopher J. Schulte
Merchant & Gould
Minneapolis
cschulte@merchant-gould.com 

Tip:
Waiving Contingencies. A buyer under a purchase agreement unable to timely close should consider waiving all outstanding contingencies, including financing.  This will assure that buyer will have 30 days (or 15 days, in the case of residential real estate) after seller’s service of the statutory notice to close.  A purchase agreement with outstanding buyer contingencies (other than title) is not subject to (and need not be canceled under) Minn. Stat. §§559.21 or 559.217, subd. 3.  Buyer’s right to perform expires automatically. See Jones v. Amoco Oils Co., 483 N.W.2d 718,724 (Minn.App. 1992).  The effect of waiving the contingencies (other than title) will be to trigger a need for seller to serve the 30- or 15-day cancellation notice, giving buyer an additional 30 or 15 days to close.  If buyer does not ultimately close, however, waiver of contingencies will result in buyer’s earnest money being forfeited. 

Larry M. Wertheim
Kennedy & Graven, Chartered
Minneapolis
lwertheim@kennedy-graven.com 

Trap:
Filing Mechanic’s Liens.  Under Minn. Stat §514.08, parties attempting to enforce a mechanic’s lien have just 120 days after the last day work was performed to file the mechanic’s lien statement.  It is vital that the filing attorney determine, with certainty, whether the property subject to the lien is Torrens, Abstract or both before filing.  Failure to properly file the lien statement in that timeframe renders the lien void.  If a party mistakenly files the lien statement with either the registrar of titles or the county recorder, the lien will not be valid, and if the error is not identified and corrected within the 120-day period, the lien will be lost.  It is advisable for the attorney to perform the research personally, rather than rely upon a client’s representation or even a phone call with a county employee.

Peter C. Brehm
Peter C. Brehm & Associates PSC
Minneapolis
pbrehm@minn-law.com