Lien Jumping Statutes

1. Lien Jumping Statutes Presented by: Thomas H. Sellnow Sellnow Law Office, P.A. 229 Central Ave Long Prairie, MN 56347 Tel: 320-732-1919 Email: sellnowt@sellnowlaw.com Slides available at www.sellnowlaw.com

2. PERSONALITY IN POSSESSION • Lien jumping attribute • Yes - If possession • Maybe - If possession lost, subject to purchaser or encumbrancer in good faith w/o notice whose rights were acquired prior to filing and who has filed. 514.18 subd. 3 • Attorney fees permitted? • Yes - 514.18 Subd. 1. • Notice § 336.9-501 • Within 60 days of loss of possession.

3. Personality in Possession: Point of interest Elements Subd. 1 • Motor vehicles (Subd. 1(a) • Does not apply to snow emergency tow. • Subd. 1 and 2 do not apply to motor vehicles. • Non-possessory lien • Surrender or loses possession. • File immediately!! • Verified statement • Conseco – They had a claim (but not a lien) for reasonable costs and expenses incurred in storing for an abandoned manufactured home on the rental premises. The PMSI remained superior. • The court recognized that 514.18 would take priority over a previously perfected security interest in the property. • But – manufactured home was not stored at the request of owner or legal possessor. • No bailment was created.

4. NONPOSSESSORY AIRCRAFT MECHANIC’S LIEN • Lien jumping attribute • Yes? - As long as in possession per 514.18. • No - 514.221 Subd. 3 except those filed in the appropriate filing office. • Attorney fees permitted • No • Notice § 336.9-501 • Within 90 days after performing work verified statement.

5. LOGS TIMBER • Lien jumping attribute • Yes - Except as to State of MN. and owner/occupant from which timber was unlawfully removed. • Attorney fees permitted • No • Notice • Commissioner of Natural Resources, if mark • Court Administration, if no marks

6. WAGES • Lien jumping attribute • Yes - As to mortgages, judgments, or liens which attach after the beginning of labor or services. • Attorney fees permitted • No • Notice • Notice to sheriff within 5 days after levy. • (As against any attachment or execution levied.)

7. MACHINERY LIEN DURING MEDIATION • Lien jumping attribute • Yes - In crops produced by debtor during calendar year in which mediation occurs, creditor must participate in mediation. • Attorney fees permitted • No • Notice § 336.9-501 • Within 30 days after the conclusion of mediation; void after 18 months.

8. GOVERNMENT SERVICES • Lien jumping attribute • Yes - Shall constitute and be a first and prior lien from the date of inspection, examination or service. • Attorney fees permitted • No • Notice • No record of such lien shall be deemed necessary, must be presented or proven in bankruptcy, insolvency, receivership or other similar proceeding or be barred thereby.

9. Points of Interest • Utility charges associated with real property, sewer, water, garbage, assessments. • Sheriff fees incurred in sale. • Assessments for improvement to the real property.

10. ENVIRONMENTAL LIEN • Lien jumping attribute • No - Subject to rights of prior perfected owner, purchaser, holder of mortgage or security interest or judgment creditor. • Attorney fees permitted • No • Notice § 514.673 • File with recorder/registrar.

11. HOSPITAL CHARGES • Lien jumping attribute • Yes - Subject to attorney liens. • Attorney fees permitted • No • Notice • Court administration, county of hospital within 10 days of discharge.

12. General Provisions 514.73 – 514.76 • Lien is assignable • Not affected by inaccuracies in the particulars of the lien statement, but the lien shall not exceed the lessor of amount claimed or justly due.

13. LAUNDERERS • Lien jumping attribute • Yes - Retain possession until paid. • Attorney fees permitted • No • Notice • Owner, by certified mail after 90 days, can sell at public or private sale 10 days later.

14. VETERINARIAN UNCLAIMED ANIMALS • Lien jumping attribute • Yes • Attorney fees permitted • No • Notice • 10 days after completion of care, written notice to owner or lawful possessor or publication at least 10 days prior to sale.

15. AGRICULTURAL PRODUCERS LIEN • Lien jumping attribute • Yes - Priority over all other liens. • Attorney fees permitted • Yes - To prevailing party. • Notice 20 days then § 336.9-501 • Until 20 days after delivered without filing; • Under 336.9-501 by filing 20 days.

16. AGRICULTURAL LIENS LandlordStat. 514.964 Subd. 1 • Lien jumping attribute • Yes - Over all competing security interest and all agricultural liens with crops, products and proceeds for unpaid rents on crops produced upon landlord’s real property in crop year subject to the lease. • Attorney fees permitted • No - But see 336.9-615(a)(1)…reasonable attorney’s fees and legal expenses incurred by the secured party. • Notice § 336.9-501 • On or before 30 days after crops become growing crops.

17. AGRICULTURAL LIENS Harvester’sStat. 514.964 Subd. 2 • Lien jumping attribute • Yes - Over all competing security interest and all agricultural liens except a landlord’s lien and except a perfected crop production input lien for seed. • Attorney fees permitted • No - But see 336.9-615(a)(1)…reasonable attorney’s fees and legal expenses incurred by the secured party. • Notice § 336.9-501 and 514.964 Subd. 3 • 15 days after last date furnished

18. Agricultural Liens Crop Production Input Stat. 514.964 Subd. 3 • Lien jumping attribute • Yes – maybe. If perfected, has priority against all competing agricultural liens except landlord’s and harvester’s. • Has priority over competing security interest in crops and proceeds if lien is effective before the secured party has given value to debtor. • Attorney fees permitted • No – but see 336.9-615(a)(1)…reasonable attorney’s fees and legal expenses incurred by the secured party. • Notice § 336.9-501 and 336.9-530 • 6 months after the last date that inputs are furnished. Plus notice 514.964 Subd. 3(c) (1-5) to lender.

19. Lender’s Response to Crop Production Input Liens • Ten day clock • Commitment to all or part of cost. • Written refusal. • Practice Tip – When in doubt deny in time (10 days). • Keep the envelope “IMPORTANT LEGAL NOTICE”

20. LIVESTOCK LIENS Veterinarian’s Lien § 514.966 Subd. 1 • Lien jumping attribute • Yes - Over all competing security interest and agricultural liens on same animals. • Attorney fees permitted • No - But see 336.9-615(a)(1)…reasonable attorney’s fees and legal expenses incurred by the secured party. • Notice § 336.9-501 to 336.9-530 • Within 180 days after the last item of veterinarian service is provided.

21. LIVESTOCK LIENS Breeder’s Lien § 514.966 Subd. 2 • Lien jumping attribute • Yes - Over all competing security interest and all agricultural liens except a perfected vet lien and feeder’s lien. • Attorney fees permitted • No -But see 336.9-615(a)(1)…reasonable attorney’s fees and legal expenses incurred by the secured party. • Notice § 336.9-501 to 336.9-530 • Within 6 months after last day that breeding services are furnished.

22. LIVESTOCK LIENS Feeder’s Lien § 514.966 Subd. 4 • Lien jumping attribute • Yes - Over all competing security interest and all agricultural liens except a perfected veterinarians lien. • Attorney fees permitted • No - But see 336.9-615(a)(1)…reasonable attorney’s fees and legal expenses incurred by the secured party. • Notice § 336.9-501 to 336.9-530 • Within 60 days after the last day that feeding services are furnished.

23. LIVESTOCK LIENS Livestock Production Input Lien § 514.966 Subd. 3 • Lien jumping attributes • Yes - Maybe • If perfected, has priority against all agricultural liens except vet liens, feeders liens and breeders liens. • Has priority over a competing security interest in livestock and proceeds if lien is effective before the secured party gave value to debtor. • Attorney fees permitted • No - But see 336.9-615(a)(1)…reasonable attorney’s fees and legal expenses incurred by the secured party. • Notice § 336.9-501 to 336.9-530 • 6 months after last inputs are furnished plus notice to lender. • Plus notice 514.966 Subd. 3(c)(1-6) to lender.

24. LIEN ON PERSONAL PROPERTY IN SELF STORAGE • Lien jumping attribute • Yes - Except those perfected before the lien attaches. Normally attaches is equal to date of default. • Attorney fees permitted • Perhaps look at agreement “…other charges in relation to the personal property specified in the rental agreement…” • Notice § 514.974 and 514.975 • Rental agreement must include a disclosure of lien rights upon failure of occupant to pay rent including the right to deny access to certain personal property contained in unit.

25. MEDICAL ASSISTANCE LIEN • Lien jumping attribute • No - Subject to the rights of any person whose interest in real property in perfected before a lien notice has been filed under 514.982 including: • An owner other than recipient or recipient’s spouse; • Purchase or holder of mortgage or security interest; • Judgment lien creditor. • Attorney fees permitted • No • Notice § 514.982 • County recorder or registrar of titles, as appropriate in county where real property is located.

26. POINTS OF INTEREST • A lien in favor of the agency upon all real property that is owned by the M.A. recipient on or after institutionalized. • Attaches and becomes enforceable against specific real property • Payments made by an agency for M.A. • Notice and opportunity to be heard (due process) • A lien notice has been filed § 514.982 • If registered property – memorialized on COT • Restrictions against enforcement have ceased have ceased to apply

27. Lien Filing Restrictions § 514.981 Subd. 2 • M.A. recipient or legal representative has been sent by certified or registered mail, w/ notice of rights and agency determines by medically verified by attending physician that M.A. recipient cannot reasonably be expected to be discharged and return home. • May not file notice while it is the home of recipient’s spouse or • Child under 21 or blind or permanently and totally disabled • Child resided in homestead for 2 yrs before M.A. recipient received medical institution services AND child provided care that permitted the recipient to live w/o medical institution services • A sibling of M.A. recipient if the sibling has an equity interest in property and resided in the property for one year immediately before recipient began receiving medical institution services • Lien applies only to the specific real property described in the lien notice

28. Continuation of Lien Notice and Lien § 514.981 Subd. 3 • Effective from time of filed until discharged • M.A. lien that has attached to specific real property continues until satisfied, becomes unenforceable under § 514.981 Subd. 6 (10 years) or is released or discharge under Subd. 5.

29. Lien Priority § 514.981 Subd. 4 • A M.A. lien that attaches to specific real property is subject to the prior perfected interests including: • Owner (other than recipient or recipient’s spouse) • Purchaser • Holder of a MTG or security interest or • Judgment creditor • Inferior to a lien for taxes or special assessments or other lien that would be superior to the perfected lien of a judgment creditor

30. Time & Claim Limits § 514.981 Subd. 6 • Ten years, but agency may renew • Not enforceable against real property if the court determines that are insufficient asserts of the estate in while or in part because: • Homestead exemption § 256B.15 Subd. 4 • Rights of surviving spouse or minor children § 524.2-403(a) & (b) • Claims w/ priority § 524.3-805(a) (1-4)

31. Life Estates and Joint Tenancies • If subject to a M.A. lien, shall not end but merge into the remainder interest or other interest • M.A. lien attaches to the extent of M.A. recipients interest at the time of death. • Life estate – lien is percentage factor based upon recipient's age on the date of death as listed in Life Estate mortality table in health care program manual • If Joint Tenancy – portion of that interest equal to fractional interest the M.A. would have owned as T/C on date of M.A. recipient’s death (i.e. 4 owners of J.T. – M.A. recipient's interest is ¼) • Statutes modifies common law w/ respect to L.E. & J.T.’s.

32. Limitation of Life Estate and Joint Tenancy Liens • Does not apply to J.T. homestead owned with spouse and owned of record on date of recipient’s death • An affidavit may be used to prove homestead – prima facie evidence • Lien is effective only against L.E.’s & J.T.’s established after August 1, 2003.

33. NONCONSENUAL COMMON LAW LIENS • Lien jumping attribute • No - Invalid lien • Attorney fees permitted • Yes - To owner of real property plus $5,000.00 or actual damage, whichever is greater. • Notice § 514.99 Subd. 3 • No earlier than 6 nor later than 21 days following service of petition and order.

34. FINAL SLIDE • Questions? • Contact Information • Thomas H. Sellnow • Email: sellnowt@sellnowlaw.com • Phone: 320-732-1919