Wind Energy Development – Cities Weigh In

Many cities have not yet even considered the possibility that a homeowner may wish to generate wind energy on his or her own property, so those cities certainly haven’t implemented codes or ordinances directly on point.  However, that tide is shifting, as more cities begin to not only anticipate, but regulate how/where a homeowner may implement a wind turbine on his or her own property.

Clearly, commercial-scale turbines have an inherent cost and complexity that serves as an impediment to someone in a residential neighborhood having any intention of implement one in her own backyard.  However, as technologies and products expand, and as individual homeowners become increasingly interested in producing some of their own energy to offset what is taken from “the grid”, home-scale wind turbines will be considered.  Consequently, cities and municipalities would be wise to consider whether they will implement ordinances, restrictions, and proactive policies in advance of the first request, or whether they will instead react when called upon.

As identified in a recent Star Tribune article, even inner-ring suburbs such as St. Louis Park (which one would not ordinarily link to wind energy development) have begun to consider and prepare their city ordinances for addressing how wind turbines will be allowed or disallowed.  (St. Louis Park Drafting Rules for Wind Turbines, October 13, 2009 by Mary Jane Smetanka).  View the full article here. Homeowners who are looking into options for generating their own energy using “green” or renewable technologies on-site would be well advised to investigate applicable zoning and ordinances prior to investing much time or money.  Similarly, proactive cities and municipalities would do well by preparing for this progressive and evolutionary trend.

Link to Star Tribune article: http://www.startribune.com/local/west/63891967.html

This blog entry is written by Brad Boyd, Shareholder at Thomsen & Nybeck, P.A. Brad’s practice focuses primarily in Real Estate, Real Estate Brokerage, Business and Corporate law, and Wind Energy Law.  Brad works regularly with real estate buyers, sellers, and investors, real estate brokerages and agents, landowners, and small businesses.  He provides legal advice, guidance, and representation related to risk management in a wide variety of real estate and business law matters.

Man Pleads Guilty to Drunken Reclining

Under Minnesota law, it is illegal to drive any motorized vehicle while intoxicated.  Case in point, this gentleman from Proctor, MN, http://www.startribune.com/local/65533627.html?elr=KArks:DCiUHc3E7_V_nDaycUiD3aPc:_Yyc:aULPQL7PQLanchO7DiUr, pled guilty to operating a motorized La-Z-Boy recliner while intoxicated, while driving/reclining home from a bar no less.  How did the police find him?  He crashed his recliner into a “more traditional vehicle” in the bar parking lot.

 

One interesting side note, and to illustrate the importance of using a motor for the purposes of the law, to be found guilty of boating while intoxicated (BWI), the operator has to be using the boat’s motor.  Thus, although a sailboat can reach significant speeds, there is no violation of the BWI laws unless law enforcement can show that the auxiliary motor was used, as opposed to just the power of the wind and the sails’ ability to harness it.

 

Because of the seriousness of the violation, the state forfeited the recliner and will sell it at the next police auction.  It’s likely to be a hot commodity.

 

Entry by Ryan Wood. Ryan is an associate in the litigation section at Thomsen & Nybeck and practices in the areas of criminal law and general civil litigation.  Ryan has a wealth of varying experience in the field of criminal law as a prosecutor in multiple jurisdictions, and as a defense attorney handling adult, felony, white collar and juvenile matters.  He also has experience in complex civil litigation.  Ryan has directed cases through mediations, arbitrations, jury trials and the state and federal appellate courts, including oral argument, and has handled literally hundreds of court trials.  Ryan’s public service experience includes authoring materials for and lecturing at Continuing Legal Education and training seminars, serving as a law clerk to a Minnesota District Court judge and also serving as a staffer in the United States Senate.

Matt Drewes recently contributed quotes for the following articles published at www.hoaleader.com, a national web-based publication focused on homeowners association and condominium board members and association management professionals: 

 

•  “HOA Reserve Studies: What You Need to Know” (http://www.hoaleader.com/public/320.cfm), August 2009, Publisher: Plain-English Media, LLC;

 

• “HOA and Condo Insurance: 5 Tips to Double-Check Your Association’s Insurance Coverage” (http://www.hoaleader.com/public/332.cfm), August 2009, Publisher: Plain-English Media, LLC;

 

• “Recalls, Part II: If You Must Do a Recall Vote, Read This First” (http://www.hoaleader.com/public/333.cfm), August 2009, Publisher: Plain-English Media, LLC; and

 

• “HOA Elections: 6 Mistakes to Avoid with your Condo or Homeowners Association Elections” (http://www.hoaleader.com/public/326.cfm), August 2009, Publisher: Plain-English Media, LLC.

Postponing a mortgage foreclosure sale

Note – although we posted a previous T&N Legal Update blog article (June 16) regarding the change in law allowing a mortgage foreclosure sale to be postponed for a five-month period, questions still arise about this issue, and this article is intended to provide explanation for recent and current questions.

 

In Minnesota, new legal ground was broken in June regarding the applicable timelines and remedies available in the real estate mortgage foreclosure process.  On June 15, 2009, a law became effective (although it is not yet widely understood or frequently utilized) that allows a mortgage foreclosure sheriff’s sale to be postponed for a period of five months. 

 

Typically, a mortgage foreclosure in the state of Minnesota provides a six-month “right of redemption” for the homeowner to buy the property back after the sheriff’s sale, by paying all outstanding amounts (including the full amount of the mortgage not just the past due debt) and applicable costs.  This six-month period may be shorter if the property is abandoned, or in other circumstances provided for by statute.  Quite often, by the time the property is in foreclosure, rebounding from the past due debt is difficult enough and paying the full balance of the mortgage is next to impossible.

 
The effect of the new law is to allow the foreclosure sale to be postponed for an extended period (five months) for the borrower to catch up on the past due amount owed, without having to repay the full loan (which would be required during the redemption period).  If the loan is not made current in the 5-month extended period before sale, the redemption period is automatically shortened to five weeks (from the typical six months).

 

The result of this law, effectively, is that a homeowner facing foreclosure can make an elective decision to have an extended period of time prior to sale, to try to collect the funds needed to payoff any past due debt on the mortgage, to bring it current and stop the sale.  This shortens the redemption period after sale, but in many cases will afford borrowers a more realistic chance of saving their home from foreclosure.  For more questions about this, see your attorney.

 

This blog entry is written by Brad Boyd, Shareholder at Thomsen & Nybeck, P.A. Brad’s practice focuses primarily in Real Estate, Real Estate Brokerage, Business and Corporate law, and Wind Energy Law.  Brad works regularly with real estate buyers, sellers, and investors, real estate brokerages and agents, and small businesses.  He provides legal advice, guidance, and representation related to risk management in a wide variety of real estate and business law matters.

American Family to Pay More than $2,000,000 due to Finding of Bad Faith

On Friday, August 14, 2009 a three-judge panel of the United States Court of Appeals for the Eighth Circuit upheld a decision by a Federal judge of the North Dakota Federal District Court not to overturn a jury’s verdict finding that American Family Mutual Insurance Company committed bad faith adjustment practices and should pay punitive damages.  The case involved a farmer, Thomas Moore, and his wife, who purchased a structure to use as rental property and insured it for $50,000.  The property burned down and American Family accused the Moores of arson, which apparently the jury concluded was so unfounded as to constitute bad faith on the part of American Family.  You can read the case here:  http://www.ca8.uscourts.gov/opndir/09/08/083238P.pdf.

 

The jury concluded that the Moores should have received their original insurance claim of $48,414.97, as well as $1,150,000 for, among other things: economic losses that Moores suffered from loss of income on their rental property; the potential expenses they might incur as a result of being deemed uninsurable as a result of American Family’s reporting its unfounded conclusion to various agencies; and the related emotional trauma caused by the accusation that they were arsonists.  The jury also added $1,150,000 in punitive damages, which are warranted under North Dakota law where an insurer “guilty by clear and convincing evidence of oppression, fraud, or actual malice.”  The panel of Eighth Circuit judges held that the punitive damage award was not excessive and was supported by the evidence.

 

This case should be compelling reason for insurers to exercise appropriate discretion before accusing insureds of wrongdoing and/or denying an insurance claim.  Importantly, it should also encourage people who feel their insurance claims have wrongfully been denied to pursue their rights.  Minnesota does have its own version of North Dakota’s bad faith adjustment practices statues and provides a policy holder with the right to seek additional damages and attorneys’ fees if the insurance company acts in bad faith or is knowingly unreasonable.  These rights are affected where the insured proceeds with an arbitration or appraisal proceeding, so it is important to get proper advice before pursuing that option under an insurance policy.  Contact an attorney right away if you believe you are not being offered the insurance benefits you paid for.  Thomsen & Nybeck has insurance coverage litigation attorneys who can help.

 

Entry by Matt Drewes.  Matt is a shareholder at Thomsen & Nybeck, P.A. and head of the firm’s Community Association Representation Group and Co-chairs the firm’s Construction Defect Litigation Group.  He practices primarily in the areas of real estate litigation, townhome and condominium law, construction litigation, debtor/creditor law, insurance litigation and employment law.

Climate Bill May Override Association Regulations on Solar Energy Systems

 

The United States House of Representatives passed a bill, a section of which permits the federal government to issue regulations prohibiting any covenant, rule or bylaw of an association that delays or prevents installation, maintenance, or use of a solar energy system.  The bill goes on to provide that in the event an association has an approval process for the installation of a solar energy system, it shall follow the same process as an architectural modification request and shall be neither avoided or delayed. 

 

The United States House of Representatives passed—HR2454, also known as the American Clean Energy and Security Act (for a version of the full bill, click here) on June 26, 2009, in a narrow vote (219-212).  On July 7, 2009, it was placed on the Senate calendar.  The association-related provision is Section 209 of that bill.

 

It is not clear from the current wording of the statute how many different types of units governed by homeowners associations would be restricted.  The wording of the bill restricts it to “any residential structure designed for occupancy by 1 family…”  However, whether that limits the bill’s application to single-family homes or whether it could include townhomes, row homes, etc…, each of which is intended for single family occupancy, is unclear. 

 

This is not the first time that the federal government, for purposes of seeking to effectuate broader goals, has stepped into the forum of homeowners associations.  In 1996, the FCC adopted regulations preventing restriction on impairing the use of devices used to receive video programming (in short, cable dishes) (for more information on that law, click here).  Associations have seen the FCC restriction come into play through members demands and threatened or real litigation by attorneys.  Should the prohibition on solar restrictions become law, it is expected to also have the necessary teeth, though the use of solar energy systems, compared with the rampant use of cable dishes, is unclear.

 

Whether the bill contemplating prohibition of restrictions on solar energy systems becomes law, considering its narrow Senate passage, and its effect once passed are not entirely clear.  However, associations should keep their eyes on the bill to be prepared to properly handle members seeking to install solar energy systems on their units.

 

Author:
This blog entry is written by Chris Renz, a shareholder at Thomsen & Nybeck, P.A. Chris practices in the litigation area of the firm with primary focus on wind energy-related lease litigation, real estate litigation, employment litigation, townhome and condominium law, and criminal law, particularly as the prosecutor for the Metropolitan Airports Commission.

Restitution Ordered in Minnesota Mortgage Fraud Case

It was reported today by the Minneapolis Star Tribune that Jonathan Helgason and Thomas Balko, former owners of a now-inactive corporation known as TJ Waconia, Inc., were ordered this morning to pay restitution of $11.7 million following their guilty pleas in a fraud scheme which the government says involved $35 million in mortgages.  The two men allegedly bear much of the blame for the large number of foreclosures in north Minneapolis.

Restitution is the obligation of a criminal defendant convicted of a crime to pay money to the person or persons financially harmed by the alleged crime.  The men are obligated to pay this money in addition to their prison terms.

Entry by Matt Drewes.  Matt is a shareholder at Thomsen & Nybeck, P.A. and head of the firm’s Community Association Representation Group and Co-chairs the firm’s Construction Defect Litigation Group.  He practices primarily in the areas of real estate litigation, townhome and condominium law, construction litigation, debtor/creditor law, insurance litigation and employment law.

Clearing the myths and misconceptions of Short Sales

For anyone who is contemplating or negotiating a short sale, it is important that several myths and misconceptions get “debunked”, and that some information gets demystified.  Read on, and then contact your real estate attorney with questions.

 
What is a short sale?  In simple terms, a short sale is a lender or creditor’s approval or a sale of your home for less than the amount owed.  Where the value of the property is less than the debt balance, people often talk about or consider doing a “short sale” to get out from under the debt, in an effort to avoid foreclosure.  That’s where the myths and misconceptions often begin.

 

No automatic right to short sale

First, it is important to recognize there is no automatic right or entitlement to be able to sell your property in a “short-sale” situation.  Banks or creditors are not obligated to allow a short sale to proceed, and they will do so only if it makes economic or practical sense for them to do so (which it does in many instances). 

 

How a short sale works

For a concrete example, let’s assume you have a home that is worth $125,000, and you owe $150,000 (first mortgage only, no other debt against the home).  If you receive an offer for $125,000, you cannot sell the property unless the mortgage gets released.  The lender holding the mortgage would have to approve the release of the mortgage, or you would have to bring the $25,000 that remains unsatisfied from the sale in order for the sale to close.  Otherwise, the sale would have insufficient proceeds to satisfy the debt owed, and the home may be foreclosed if you can’t make payments on the mortgage.

 

Release v. satisfaction

In the example above, I only mentioned that the lender would have to approve the sale and release the mortgage.  If the mortgage is released, that does not mean the debt is satisfied.  A mortgage is the security instrument securing the lender for the amount owed by you, using the home as collateral.  The amount you owe is based on your contractual obligation to repay the lender through the terms of a Prommissory Note. 

 

If the mortgage is released, with nothing more, you may remain obligated to pay the outstanding/unsatisfied amount of the Note.  In the example above, then, the home may sell for $125,000, but you may still owe the lender $25,000 after sale.  In some instances a lender may ask you to reaffirm the debt at closing, and in other instances they may not even mention it.  Either way, you could end up owing the money, which the lender may call due immediately, or could perhaps delay and require you to pay weeks or months down the road.

 

 Avoiding repayment of unsatisfied debt

With the above in mind, it is clear that a “short sale” does not automatically mean “satisfaction of outstanding debt”.  In other words, if you go into a short sale thinking the bank will simply forgive the amount of debt you contractually agreed to repay, you may be in for a dramatic surprise. 

 

There are certainly instances when a bank will make a financial decision to forgive all, or a portion of the debt, depending upon factors such as the amount of debt between sale value and debt owed, whether there are additional lenders, creditors, tax liens, and other financial obligations recorded against the property that must be negotiated, and your financial picture.  In my experience, I have seen lenders be more accommodating when your financial picture (and their ability to recover from you) is bleak, and the amount of debt that will be unsatisfied is small.  They tend to be less accommodating where a large amount of the borrowed money will be unsatisfied by the proposed sale, where the borrower has investments, income, or other property that could be accessed to satisfy the amount owed, and related circumstances.

 

 Proactive planning

Before you enlist the help of a real estate agent or other professional to list your property for sale or to negotiate a short sale, you should spend some time upfront with a knowledgeable attorney or financial advisor to discuss some of the issues identified above, and how these issues may impact your own personal financial goals, expectations, and circumstances. As you may now understand, lenders with whom a borrower is negotiating a short sale do not treat all borrowers alike, and each property, each proposed sale, and each result is different. 

 

You should approach this type of transaction with eyes wide open, ideally with the assistance of your attorney who may help identify pitfalls, ensure the appropriate agreements confirm your expectations regarding the release of the mortgage, the satisfaction of debt, and ensuring the related legal consequences and financial outcomes meet with your expectations. 

 

Clients of mine sometimes are uneasy paying money to an attorney to advise them of the risks and assist them in the process of negotiating a short sale.  However, it is far easier (and less expensive) to address such issues proactively, as they arise, then to react to and try to correct any surprises or problems that could have been planned for or circumvented.  If you are facing or contemplating a short sale, be sure to speak with your attorney.  If you aren’t already working with an attorney, feel free to contact Brad Boyd at Thomsen & Nybeck. 

 

This blog entry is written by Brad Boyd, Shareholder at Thomsen & Nybeck, P.A. Brad’s practice focuses primarily in Real Estate, Real Estate Brokerage, Business and Corporate law, and Wind Energy Law.  Brad works regularly with real estate buyers, sellers, and investors, real estate brokerages and agents, and he provides advice, guidance, and representation related to risk management in a wide variety of real estate matters.  For more information about Thomsen & Nybeck’s Real Estate practice, please visit http://www.tn-law.com/CM/Real-Estate/Real-Estate-Law.asp.

Wind Energy – Becoming a Major Player in the Energy Sector

In its latest annual review of the global renewable power market, PricewaterhouseCoopers came to conclusions suggesting that renewable energy, and particular wind energy, is gaining greater ground in becoming a significant portion of the energy market.  The full report from PricewaterhouseCoopers is available here.  Highlights of that report include the fact that in the last two years, one-fourth of the deals in the power sector have been for renewable assets or technology.  Beyond the sheer number of deals, one-tenth of the total merger and acquisition value in the power sector is attributable to renewable energy.  To quantify those statements, in the last two years there have been 441 “deals” valued at approximately 70.3 billion dollars worldwide in the renewable energy sector.

 

Wind energy remains of paramount importance within the surge of growth in renewable energy.  Wind constitutes 57% of all renewable energy deal making.  The report notes that offshore wind is a particularly emerging growth sector.  The report was not without recognition of the recent economic crisis.  However, the report notes that the numbers of deals that involve the renewable energy sector appear to be holding steady, though their value has declined.  The importance that the renewable energy sector, in particular wind, will continue to play in the world energy economy will continue to rise according to the report from PricewaterhouseCoopers.  The new United States administration under President Obama and the regulation in the energy sector will continue to drive the importance of renewable energy, as is true with other governments as the world moves forward to the December 2009 United Nations Climate Summit in Copenhagen Demark.

 

Thomsen & Nybeck, P.A. looks forward to serving the needs of its clients in this globally growing field by offering services in the area of negotiating wind energy leases and other related acquisition documents.  For more information, please see the wind energy law page of our website at http://www.tn-law.com/CM/Custom/Custom8.asp.

 

Author:
This blog entry is written by Chris Renz, a shareholder at Thomsen & Nybeck, P.A. Chris practices in the litigation area of the firm with primary focus on wind energy-related lease litigation, real estate litigation, employment litigation, townhome and condominium law, and criminal law, particularly as the prosecutor for the Metropolitan Airports Commission.

U.S. Supreme Court- Defendants Can Confront Crime Lab Technicians

On Thursday, June 25, 2009, the United States Supreme Court issued a decision providing that defendants have the right to cross-examine forensic experts.  In Melendez-Diaz v. Massachusetts, 557 U.S. ___ (2009) (read the full opinion here), the high court, in a 5-4 decision, held that the admission of certificates from forensic scientists, which stated that the substance found on a defendant was cocaine, were not sufficient to satisfy the confrontation clause in the Sixth Amendment of the United States Constitution.

 

In the trial, the government offered, and the trial court admitted, certificates in which forensic scientists swore that the substance was cocaine.  The defendant objected that the admission of the certificates violated his right to confrontation as recognized in Crawford v. Washington, 541 U.S. 36 (2004).  The trial court overruled the defendant’s objection based on state law allowing such certificates as prima facie evidence of the composition and weight of a narcotic. 

 

The Supreme Court, in an opinion by Justice Scalia, stated that the case was a simple application of Crawford (which Justice Scalia also authored) and that evidence against a defendant that is testimonial, which these certificates were, must be subject to cross examination.  The Supreme Court dismissed an attempt by the government to claim that the documents admitted were not testimonial because they were actually certificates, rather than affidavits.

 

The dissent of Justices Kennedy, Roberts, Breyer and Alito, believed the majority holding overruled an accepted practice as to scientific analysis and that there were already “ample protections against the misuse of scientific evidence.”  The dissent distinguished these types of affidavits from personal testimony, such as that which was at issue in Crawford.

 

Author:
This blog entry is written by Chris Renz, a shareholder at Thomsen & Nybeck, P.A. Chris practices in the litigation area of the firm with primary focus on real estate litigation, employment litigation, townhome and condominium law, and criminal law, particularly as the prosecutor for the Metropolitan Airports Commission.