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A lawyer may not, “knowingly disobey an obligation under the rules of a tribunal.” Rule 3.4(c), Minn. R. Prof. Conduct (MRPC).  When does a lawyer deserve discipline for violating a procedural rule, such as a filing deadline?  The answer is important, because the 2019 Minnesota Rules of Court book has 1,303 pages of rules. On March 6, 2019, the Minnesota Supreme Court answered this question, reversing a private admonition.  The Court’s opinion and the oral argument colloquies show careful analysis, high principle, and common sense. [i]   Serendipitously, the Court also resolved a constitutional, due process issue raised in another, otherwise unrelated, admonition. ...
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Greater MN Project

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Here are updates to five new visualizations produced by the MSBA and our good friend and colleague, Armen Stromquist (also, full disclosure: Armen is my stepson and he's in St. Thomas' data analytics master's program). We welcome your feedback, tips, and other thoughts.  Minnesota Attorneys:  This map plots all attorneys in Minnesota based on address data found in the Minnesota Supreme Court database of active attorneys. Active attorneys include any attorney with a CLE code of 1,2, or 3 and NOT those who have been voluntarily or involuntarily restricted. We also limited to attorneys with Minnesota addresses. Last year, we processed zip codes only. ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Karl Johnson, Hellmuth & Johnson, PLLC Eighth_Circuit___First_State_Bank_of_Roscoe_v__Stabler.pdf             In First State Bank of Roscoe and John Beyers v. Stabler (In re Stabler) , 914 F.3d 1129 (8th Cir. 2019), The Eighth Circuit affirmed sanctions for violating a final bankruptcy discharge injunction and affirmed findings that neither a prior bankruptcy court order nor a related state court judgment had preclusive effect.             When the debtors’ agricultural services business failed, ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Karl Johnson, Hellmuth & Johnson, PLLC Judge_Ridgway___In_re_Jaworski.pdf             In In re Jaworski , BKY No. 13-43296-MER (Nov. 30, 2018), Judge Ridgway held that an attorney’s administrative priority claim for allowed but unpaid fees does not survive a chapter 13 discharge. More than a year after the debtors filed their voluntary petition under chapter 13, the debtors’ modified plan was confirmed with an estimate of $5,000 for attorney fees to be paid through the trustee.             More ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Karl Johnson, Hellmuth & Johnson, PLLC BAP___Frakes_v__Arch_Coal__Inc_.pdf             The BAP dismissed the appeal as premature because (1) the underlying order was not final and appealable, (2) appellants did not move for leave to appeal, and (3) the facts did not support leave to appeal an interlocutory order. The bankruptcy court had denied the appellants’ “Amended Motion for Determination that Confirmation Order Does Not Bar a State Court Action Relating to the Springfield, Illinois Coal Contract” ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Karl Johnson, Hellmuth & Johnson, PLLC BAP___Curran_v__Moon.pdf             In reviewing denial of the debtor’s motion under Rule 60(b) to reconsider an order indefinitely extending the deadline to pay the final two out of four installments of the debtor’s filing fee, the BAP applied an abuse of discretion standard and found no clear error of fact or abuse of discretion. The debtor filed under chapter 7 and applied for a fee waiver, but was ordered to pay the fee in four equal installments. After the ...
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​ BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Kesha Tanabe, Tanabe Law Eighth_Circuit____Cole_v__Strauss.pdf In Cole v Straus (In re Mamtek U.S., Inc.) , 732 Fed.Appx. 497 (8th cir. 2018), the Eighth Circuit affirmed the order of the District Court, which in turn had affirmed the bankruptcy court’s order holding Mr. and Mrs. Cole in contempt and requiring proceeds of the sale of their house to be transferred to the Trustee.  The Eighth Circuit affirmed without comment.   The Trustee commenced the underlying adversary proceeding against the Coles ...
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​ BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Kesha Tanabe, Tanabe Law BAP___Lerbakken_v__Sieloff_and_Associates.pdf In In re: Lerbakken, 590 B.R. 895 (B.A.P. 8th Cir.2018), the B.A.P.  affirmed the bankruptcy court’s order disallowing the debtor’s claimed exemptions in his ex-wife’s 401K and IRA accounts.  The B.A.P. explained that such accounts were not “retirement funds,” as defined by the U.S. Supreme Court in Clark v. Rameker. To clarify, the funds were not in Lerbakken’s own 401k or IRA accounts. Rather, he was awarded a 50% interest in ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Mary Sieling, Manty & Associates, P.A. BAP___Marshall_v__Deutsche_Bank_Natl_Trust_Co_.pdf The bankruptcy court denied the debtor’s request to continue a hearing on Deutsche Bank’s motion for relief from the automatic stay and entered an order granting relief to the bank. The debtor timely appealed to the BAP, but failed to obtain a stay pending appeal.  Thereafter, the bank sold the subject real property at foreclosure sale and the debtor was evicted from the property.  The BAP ruled the appeal was ...
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Note:  A version of this blog first appeared in Minnesota Lawyer.  The blog adds to that version identifications of mentors, colleagues and friendly opponents without whom I would have achieved little. You could say my career as an ethics lawyer began at St. Thomas College, where I studied philosophy, and St. Thomas Academy, where I had a clerical job.  My duties included posting demerits for cadets’ offenses to master cards.  Too many demerits meant suspension.  One day I asked myself, “Does the offense of ‘unshined buttons’ warrant suspension, even where the offender leads a life of constant danger?”  I decided not, without pausing over my own authority ...
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​ ​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Alexander J. Beeby, Larkin Hoffman Daly & Lindgren Ltd. Eighth_Circuit____Sears_v__Sears__In_re_AFY__Inc__.pdf In Sears v. Sears (In re AFY, Inc.) , 902 F.3d 884 (8th Cir. 2018), the Eighth Circuit agreed that the Nebraska Bankruptcy Court had jurisdiction and authority to consider the merits of a shareholder derivative action. The Eighth Circuit also agreed that the shareholder-standing rule barred the shareholders’ claim. The debtor, Ainsworth Feed Yards Company, Inc., filed for bankruptcy in ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Matthew D. Swanson, Fuller, Seaver, & Swanson, P.A. Eighth_Circuit___Hanson_v__Seaver.pdf In Hanson v. Seaver (In re Hanson) , 903 F.3d 793 (8th Cir. 2018) (Smith, J.), the Eighth Circuit held that a Minnesota property tax refund does not fit within the Minnesota Legislature’s definition of “government assistance based on need” and is therefore not exempt under Minn. Stat. § 550.37 Subd. 14. The Chapter 7 Trustee objected to the debtor’s claimed exemption of a Minnesota property tax refund as “government ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Alexander J. Beeby, Larkin Hoffman Daly & Lindgren Ltd. Kressel___Seaver_v__Noll.pdf In Seaver v. Noll , Adv. No. 17-4066, 2018 WL 4693813 (Bankr. D. Minn. Sept. 27, 2018), the bankruptcy court held that transfers “executed to prevent the defendant’s property from being caught up in the debtor’s bankruptcy case” were neither constructively nor actually fraudulent. The Court also analyzed each transaction to determine that, except for one miscalculation, the transfers were not otherwise voidable. ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Christopher (C.J.) Harayda, Faegre Baker Daniels LLP Nelson_13-cv-3451_RFC_v_RESCAP.pdf In In re RFC and RECAP Liquidation Trust Action , 13-cv-3451, 2018 WL 4469249 (D. Minn. Sept. 18, 2018), the District Court for the District of Minnesota held that the issue of whether a bankruptcy settlement is reasonable and prudent must be proven to a jury as finder of fact, rather than the court. Residential Funding Company, LLC (“RFC”) was involved in the residential mortgage-backed securities (RMBS) market. ...
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Tweet rants, Facebook controversies, and alleged e-mail crimes dominate the daily news. Electronic social media also create ethics issues for lawyers and judges. Some issues are variations on old themes, but other issues arise from social media’s special traits. For example, social media provide public platforms for marketing, for attacks on lawyers and for spreading the news. Social media culture is spontaneous, casual and often irreverent. Posts are readily sent and re-sent and have a long after-life. Social media users may have hidden agendas or identities. Competence is a threshold issue for social media ethics. A lawyer must keep “abreast of changes in ...
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BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A. Contributing Editor: Amanda Schlitz, U.S. Bank BAP___Kemp_v__U_S__Dept__of_Education.pdf In Kemp v. U.S. Dep’t of Educ. (In re Kemp) , 588 B.R. 226 (8th Cir. BAP Aug. 24, 2018), the BAP affirmed the bankruptcy court’s finding that repayment of student loans would not constitute undue hardship because, among other reasons, the debtor’s current financial difficulties were the result of her own choices, not expected to be long-term, and the debtor could afford income-based repayments of $0.00 per month. Notably, this case is similar ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A. Contributing Editor: Jackie Williams, Manty & Associates, P.A. Eighth_Circuit___McCormick_v__Starion_Finan_.pdf In McCormick v Starion Financial (In re McCormick) , 894 F.3d 953 (8th Cir. 2018) (Beam, J.), the Eighth Circuit held that “the entirety of the dealings” between the debtors and the creditor provided for attorneys’ fees even if the oversecured status arose from nonconsensual judgment liens. A creditor objected to the debtors' second amended plan of reorganization because the plan did not provide for the ...
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This blog expands an article published in Bench & Bar of Minnesota (October 2018), as “Confidentiality Rules in the Age of Social Media – A Historical Perspective.”  This expansion adds discussion of a third value – the public interest in accurate information regarding a lawyer.  This expansion also explains how Minnesota has only one more disclosure permission than the ABA Model Rules. When, if ever, may a lawyer disclose confidential information to defend, outside a legal proceeding, against a client’s public accusation of serious misconduct?  “Never” and “almost never” are the answers proposed, respectively, by the Lawyers Board and the Minnesota ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Phillip J. Ashfield, Stinson Leonard Street, LLP Eighth_Circuit___U_S__Dept__of_Labor_v__Harris.pdf In U.S. Department of Labor v. Harris (In re Harris) , 898 F.3d 834 (8th Cir. 2018), Harris, the former CEO of Fairbault Woolen Mills (“Fairbault”), diverted withheld employee wages to be used for payment of health plan premiums toward corporate and personal expenses, thereby rendering his debt to the Department of Labor (“DOL”) nondischargeable under 11 U.S.C. § 523(a)(4). While Harris served as its ...
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On July 31, 2018, disciplinary charges were filed against a lawyer, Nelson. The charges included that in 2008 [sic!], Nelson sent a written solicitation to a prospective client.  The word “Advertisement” was at the top of the document.  In 2005, Rule 7.3 had been amended, to substitute “Advertising Material” for the previously-required “Advertisement.” [i] Explaining how ethics complaints are handled, the Office of Lawyers Professional Responsibility (OLPR) has assured Minnesota lawyers, “This is not a gotcha game.” [ii]   On the other hand, OLPR takes the position that discipline may be imposed, “regardless of whether an innocent oversight is to blame, ...
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