Utility Companies Must “Buy the Farm”
Quinlivan & Hughes, P.A. is a St Cloud, MN law firm with over 90 years of experience. We are organized as a professional association consisting of 20 attorneys, four of whom are associates and two who are Of Counsel to the Firm.
Utility Companies Must “Buy the Farm”
Steve Schwegman served on the faculty at the International Association of Defense Counsel (IADC) 42nd Annual Trial Academy at the prestigious Stanford Law School in Palo Alto, CA.
The IADC Trial Academy is one of the oldest and most respected programs for developing trial advocacy skills. The seven-day intensive program blends faculty instruction and demonstration with individual student participation.
The faculty consists of leading defense trial lawyers selected on a national basis from different regions of the country. Each faculty member is assigned to a group of five to seven students which allows for individualized attention and instruction. There were 98 student/lawyers from around the country as well as Brazil and Canada.
Quinlivan & Hughes, P.A. is pleased to announce Laura A. Moehrle has been elected shareholder of the firm, effective January 1, 2014.
Laura practices primarily in the area of insurance defense litigation, including automobile liability and professional liability and also practices in the areas of premises liability, employment law and appellate law. She is a frequent presenter on issues related to automobile and professional liability. Laura was born and raised in St. Cloud, Minnesota
by: John Wenker, Attorney at Law
On December 5, 2013, the Minnesota District Court entered summary judgment for Quinlivan & Hughes client Lake County on a $5 million claim related to the sale of county revenue bonds. ORIX Public Finance, LLC, a Texas-based investment group, sued Lake County when Lake County could not perform on a bond purchase agreement.
The case arose out of Lake County’s attempt to provide broadband internet services to its residents. The County obtained a $66 million loan and grant from the Rural Utility Service (“RUS”) a federal agency, on the condition that it provide $3.5 million in matching funds—funds that would cover costs the federal loan and grant could not cover. The County planned to provide the matching funds by selling revenue bonds. The bond purchase agreement provided that the County would sell ORIX $5.6 million in revenue bonds at a very high (15%) interest rate.
As it turned out, the County could not sell the bonds and provide the matching funds in this manner because the RUS would not approve the financing on the terms stated in the bond purchase agreement. When the RUS would not approve the financing, the County decided to fund the match by taking money from its own reserves. ORIX then sued, claiming approximately $5 million in damages.
The case presented some interesting challenges. Ordinarily, the bond purchase agreement would contain language that would allow the County to back out of the agreement if the federal funds were not available. But a drafting error made this argument difficult. Additionally, the RUS, wanting to stay out of the fray, refused to state its position in writing or allow its employees to give depositions, a prerogative allowed by federal law.
The key to the defense of the case was the doctrine of “frustration of purpose,” which applies when the fundamental purpose of a transaction has been frustrated so as to excuse a party from performing a contract. Lake County argued that there was no purpose to the bond transaction, given that without the federal funds there was no need for matching funds because there was nothing to match. ORIX argued that the RUS had never formally rejected the bond purchase agreement and that it was therefore entitled to $5 million in damages.
Alain Baudry and Maslon, Edelman, Borman & Brand LLP associated with Quinlivan & Hughes on the briefing. Quinlivan & Hughes attorney Kenneth Bayliss argued the case before Minnesota District Court Chief Judge Michael Davis on October 9.
Judge Davis’s opinion found that the case was one where the doctrine of frustration of purpose applied. The decision first rejected ORIX’s assertion that witness statements about what RUS representatives said in a key phone conference were hearsay. The court noted that the RUS statements about its rejection of the revenue bond financing were not hearsay, but “verbal acts” or “words of independent legal significance.” The court went on to find that even if the statements were hearsay they would be admissible hearsay.
Farmers sometimes hire on farmhands or laborers when their operations grow. However, busy farmers may not consider the potential need for workers’ compensation insurance coverage until someone gets hurt and medical bills, disability payments and other forms of compensation must be paid. Some may be surprised especially if the farmer hasn’t needed to carry worker’s compensation coverage in the past because only family members were working on the farm.
When things begin to change in your farm operation, review your insurance policies. A farm liability insurance policy will not cover injuries to a farm laborer who meets the Minnesota Workers’ Compensation statutory definition of “employee.” If a farm laborer sustains a work-related injury and the farmer has no Worker’s Compensation coverage, the Minnesota Department of Labor & Industry (Special Compensation Fund) (“MN DOLI – SCF”) may pay the workers’ compensation benefits for the injured laborer and seek reimbursement directly from the farmer. The MN-DOLI & SCF may also seek to impose penalties on the farmer for failure to have workers’ compensation insurance in place at the time the employee was injured. Minnesota statutes require qualified employers to purchase worker’s compensation insurance coverage for their employees. Even a farmer is considered a qualified employer if the farming operation meets certain criteria.
If all employees on a farm earn less than $8,000 per calendar year, the Minnesota Workers’ Compensation scheme doesn’t require the farmer to carry worker’s compensation insurance. According to Minn. Stat. § 176.041, subd.1(b), the Worker’s Compensation Act doesn’t apply to persons employed by a “family farm” as defined by Minn. Stat. § 176.011, subd.11(a)(1-2)(2010). However, if a farmer hires farmhands or laborers who earn (in aggregate) more than $8,000 annually, the farmer is required to carry worker’s compensation insurance. Essentially, farmers are allowed one year to begin worker’s compensation coverage once they employ qualified farm laborers making more than a total of $8,000 in a calendar year.
A recent case involved a family farmer who wanted to cut back his hours on the farm. He hired a farm hand to assist his son in running the crop farming operation. During harvest, a piece of equipment broke down. While driving back to the farm to get another machine, the truck that the farmer, farmer’s cousin and the farm hand were riding in lost control and went off the road, causing all three serious injuries. The farmer didn’t have worker’s compensation insurance in place, and was a workers’ compensation claim was brought for medical expenses and damages sustained by the farmhand. In a Worker’s Compensation Court of Appeals decision, the WCCA held that the farmer was not required to carry such insurance as it was the first year he had hired a farm worker. The farmer avoided paying penalties and damages that would have been in the six figure range.
No one expects bad things to happen on their family farm, and certainly nobody is happy when they do. Be careful to check whether you need to add worker’s compensation insurance coverage when hiring farmhand or laborer. You may avoid unnecessary fees, expenses and penalties imposed by the state.
The First Annual Quinlivan & Hughes Tip-Off Tournament will be held Friday November 15th and Saturday November 16th in Claire Lynch Gymnasium at the College of St. Benedict. Quinlivan & Hughes is a proud sponsor of Blazer athletics and wishes all players and coaches the very best in 2013-2014!
Quinlivan & Hughes’ attorney Cally Kjellberg-Nelson is the recipient of the 2013 Deb Oberlander Award from the Minnesota Defense Lawyers Association (MDLA). The award, created in memory of MDLA’s former executive director who passed away in 2008, recognizes the professionalism, service, and contribution to excellence in the practice of law by a new lawyer. Cally served as the Vice Co-Chair of the MDLA’s New Defense Lawyers Group (2011–2012) and Co-Chair (2012-2013). Cally has also been involved with the Mid-Winter Conference Planning Committee (2012 and 2013), as well as with the Association’s 50th Anniversary Celebration held in conjunction with the Trial Techniques Seminar and the Trial Academy Planning Committee (2013). Cally is published in Minnesota Defense Magazine, "Laches, A Defense That Is Alive and Well in Minnesota", Minnesota Defense Magazine | Spring 2010, and recently presented at the 2013 MDLA Trial Techniques Seminar on the recently amended Rules of Civil Procedure.
In addition to her MDLA activities, Cally has also been active in the Stearns/Benton Bar Association, the Seventh District Bar Association, and the Minnesota State Bar Association. She also serves as the Central Chapter Liaison to the Minnesota Women Lawyers Association (2012-2014).
We congratulate Cally on this well-deserved honor!
Quinlivan & Hughes attorney Michael Rajkowski successfully argued before the Minnesota Supreme Court in the CapX2020 high-voltage transmission line matter that landowners are entitled to relocation costs and minimum compensation. The decision overturns a Court of Appeals decision and affirms the ruling by Stearns County District Court Judge Frank Kundrat.
The case involves landowners who invoked the Buy the Farm statute, which allows homeowners and farmers to force a utility to purchase their entire property at fair market value rather than selling an easement to the utility. Judge Kundrat previously ruled that the homeowners who invoked the Buy the Farm statute were entitled to relocation costs and minimum compensation. A three-judge panel of the Court of Appeals, however, reversed that decision, in a 2-1 vote. Court of Appeals Judge Edward Cleary dissented, writing that the landowners essentially were forced from their property by an involuntary taking by CapX and that they were entitled to the compensation and relocation costs.
The Supreme Court decision overturned that Court of Appeals decision agreeing with Judge Cleary's dissent. The Supreme Court's decision can be found .
Has the government taken a condemnation / eminent domain action against you? Know your rights and protect your inventment. Contact the Quinlivan & Hughes Condemnation and Eminent Domain team today!
Rachael Holthaus was born and raised in the St. Cloud area. She was admitted to the Minnesota Bar in May 2013 and joined the firm as an associate at that time. She received her B.S. from the University of Wisconsin-River Falls (Business Administration with a Minor in Spanish) in 2009 and her J.D. from William Mitchell College of Law in 2013. While in law school, Rachael worked as a law clerk at Acumen Legal Advisors, PLLC where she assisted in business law and real estate matters. She also externed at Hennepin County District Court and was a research assistant for Professor John O. Sonsteng. Rachael was also involved in William Mitchell's moot court competition where she competed in the New York Bar Association National Competition.
Dyan J. Ebert has been invited to become a member of the Association of Defense Trial Attorney’s Executive Council. She will be one of nine council members selected from the United States and Canada to serve on the Council. The ADTA limits membership to one prime member with at least 5 years of experience in civil trial defense for every million in population. John Quinlivan who recently passed in September 2012 served as the Association’s President from 1981-92. Dyan has been an associate member under John Quinlivan and assumed his prime membership after he retired from practice.
Jolene Schley was born and raised in the St. Cloud area. She was admitted to the Minnesota Bar in May 2006 and joined the firm as an associate in February 2013. She received her B.A. from The College of St. Benedict (Political Science) in 2002 and her J.D. from the University of St. Thomas School of Law in 2005. Prior to joining Quinlivan & Hughes, Ms. Schley was Legal/Compliance/Credit Administration Officer at Maple Bank in Champlin. Jolene practices in the areas of Business and Corporate Law, Wills, Probate Estate Planning, Trusts and Real Estate.