Laue v. Production Credit Ass'n of Blooming Prairie
| Decision Date | 22 July 1986 |
| Docket Number | Nos. CX-86-617,C1-86-652,s. CX-86-617 |
| Parties | Walter E. LAUE, Petitioner, v. PRODUCTION CREDIT ASSOCIATION OF BLOOMING PRAIRIE, Respondent. State of Minnesota, Intervenor. Charles B. KELLY, a.k.a. Charles Kelly, et al., Petitioners, v. FEDERAL LAND BANK OF ST. PAUL et al., Respondents. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
The 1986 Farmer-Lender Mediation Act authorizes debtors subject to collection proceedings against agricultural property to request mediation if not served with a E. Kent Christian, Moulton Law Office, Rochester, for petitioner in No. CX-86-617.
mediation notice, even though notice was not required when collection proceedings were initiated. Application of the Act to pending proceedings does not result in unconstitutional impairment of contract rights without due process
Robert M. Halvorson, New Ulm, for respondent in No. CX-86-617.
Hubert H. Humphrey, III, Minnesota Atty. Gen., John Tunheim, Sol. Gen., Catherine F. Haukedahl, Jon K. Murphy, Sp. Asst. Attys. Gen., St. Paul, for State.
E. Kent Christian, Rochester, for petitioners in No. C1-86-652.
John B. Arnold, Michaels Seeger Rosenblad & Arnold, Rochester, for respondents in No. C1-86-652.
Considered and decided by POPOVICH, C.J., and FOLEY and FORSBERG, JJ., without oral argument.
Petitioners seek writs of mandamus directing the trial courts to stay collection actions pending against their agricultural property. Both trial courts found the 1986 Farmer-Lender Mediation Act, 1986 Minn. Laws ch. 398, art. 1, inapplicable to proceedings initiated before the Act's effective date. We stayed further collection proceedings, ordered briefing and granted the State of Minnesota leave to intervene. We grant mandamus.
By summons and complaint served on March 12, 1986, respondent Production Credit Association of Blooming Prairie (PCA) sought (1) a money judgment against petitioner Walter Laue for unpaid loans and (2) recovery of secured collateral. Simultaneously, PCA sought pretrial possession of the property pursuant to Minn.Stat. § 565.23 (1984). A hearing on that motion was scheduled for April 7, 1986.
Petitioners Charles, Lois and Michael Kelly had problems with repayment of loans secured by a mortgage on their farm in 1983. Their petition for bankruptcy was dismissed in December 1984, after the bankruptcy court found reorganization of the farming operation was not economically feasible. Foreclosure proceedings began in May 1985. In August, the district court denied a petition for stay of foreclosure pursuant to the mortgage moratorium act, Minn.Stat. §§ 583.04-.05 (Supp.1985), finding additional time would not permit petitioners to cure the default.
Negotiations between the Kellys and the Federal Land Bank (FLB) continued in an attempt to arrange an alternative to foreclosure. New foreclosure proceedings commenced and a sale was scheduled for January 1986. That sale was cancelled after negotiation progress was made. A proposal for petitioners to sell their land to a relative was never completed, however, and a new foreclosure proceeding was brought in February 1986 with a sale scheduled for April 16.
The Minnesota Legislature adopted an omnibus farm bill in March 1986, after foreclosure and replevin proceedings had been served against all petitioners in this case. Chapter 398, art. 1, 1986 Minnesota Laws, is the Farmer-Lender Mediation Act (hereinafter the Act), which became effective on March 22, 1986, the day after it was signed by Governor Perpich.
The Act requires creditors desiring "to garnish, levy on, execute on, seize, or attach agricultural property" to first serve notice on the debtor of the right to mandatory mediation. Id. § 11, subd. 1. If the debtor promptly requests mediation, debt proceedings may not continue until 90 days after mediation is concluded or until a mediation agreement is reached. Id. subds. 2, 5. If a debtor has not received a mediation notice, the debtor may request mediation. Id. subd. 2(c).
Petitioners Laue and Kelly did not receive mediation notices. Laue requested mediation on April 3, after the claim and delivery hearing was already scheduled for April 7. At that hearing, Laue argued further proceedings should be stayed pending mediation. The trial court ruled the Act did not stay proceedings brought before the Act's effective date, and granted relief to PCA.
On April 8, Laue brought an ex parte motion for a temporary restraining order before a different judge of the district court. The motion was denied, based upon the prior ruling. Laue now seeks a writ of mandamus compelling the trial court to stay proceedings pending mandatory mediation.
Petitioners Kelly sought a stay of the April 16 foreclosure sale pending mediation. On April 14, the trial court denied injunctive relief, finding the Act applies only to proceedings commenced after its effective date. The Kellys seek a writ of mandamus compelling the trial court to stay foreclosure pending mediation.
1. Does mandatory mediation apply to proceedings begun before March 22, the effective date of the Act?
2. Does application of the statutory provisions result in an unconstitutional impairment of contract?
The primary objective of courts interpreting statutes is to ascertain and give effect to legislative intent. Stawikowski v. Collins Electric Constr. Co., 289 N.W.2d 390, 395 (Minn.1979). Our interpretation is guided by the principles of statutory construction adopted by our legislature. See Minn.Stat. §§ 645.01-.49 (1984).
Statutes must be construed to give effect to all provisions.
When the words of a law are not explicit, the intention of the legislature may be ascertained by considering, among other matters:
(1) The occasion and necessity for the law;
(2) The circumstances under which it was enacted;
(3) The mischief to be remedied;
(4) The object to be attained;
(5) The former law, if any, including other laws upon the same or similar subjects;
(6) The consequences of a particular interpretation;
(7) The contemporaneous legislative history; and
(8) Legislative and administrative interpretations of the statute.
Minn.Stat. § 645.16.
There is a presumption against retroactive application, unless legislative intent is clearly and manifestly expressed. 1 Minn.Stat. § 645.21. This court may "not give retroactive effect to a statute unless a purpose that it have such effect is implicit therein." Schoening v. United States Aviation Underwriters Inc., 265 Minn. 119, 127, 120 N.W.2d 859, 864 (1963). We hold the statute applies to pending proceedings for the following reasons.
(a) Article 2 of chapter 398 relating to redemption of agricultural homesteads under the omnibus farm bill, explicitly applies only to:
foreclosures or executions on real property that have foreclosure notices or summons and complaint served on the mortgagor or execution notices served on the debtor on or after the effective date.
1986 Minn. Laws ch. 398, art. 2, § 5 (emphasis added). By contrast, article 1 contains no explicit statement regarding its application to pending proceedings. Since the statute is ambiguous, we must therefore construe the Act. See id. art. 1, § 19.
(b) The Act requires creditors to serve notice upon the debtor of the right to mediation. Id. § 11, subd. 1. "The creditor may not begin the [debt enforcement] proceeding until the creditor and debtor have completed mediation," id. (emphasis added), an agreement is reached, id. subd. 5, court ordered additional suspension for lack of good faith by the creditor expires, id. § 12, subd. 3, or the mediator finds the debtor is not mediating in good faith. Id. subd. 4. For proceedings begun after the Act's effective date, it is clear a mediation notice must be served by the creditor.
Less clear is the intent of the following passage.
(c) If a debtor has not received a mediation notice and is subject to a proceeding of a creditor enforcing a debt against agricultural property under chapter 580 or 581 or sections 336.9-501 to 336.9-508, terminating a contract for deed to purchase agricultural property under section 599.21, or garnishing, levying on, executing on, seizing, or attaching agricultural property, the debtor may file a mediation request with the commission. The mediation request form must indicate that the debtor has not received a mediation notice.
1986 Minn. Laws ch. 398, art. 1, § 11, subd. 2(c).
Respondents argue subdivision 2(c) allows only debtors who should have received a mediation notice from the creditor before the proceedings began to request mediation. Petitioners and the State of Minnesota argue the subdivision confers upon all agricultural debtors who have not received mediation notices the right to request mediation, even though notice was not required to be served when the action began.
Legislative intent is clearly expressed in findings regarding the need for adoption of the Act:
The legislature finds that the agricultural sector of the state's economy is under severe financial stress due to low farm commodity prices, continuing high interest rates, and reduced net farm income. The suffering agricultural economy adversely affects economic conditions for all other businesses in rural communities as well. Thousands of this state's farmers are unable to meet current payments of interest and principal payable on mortgages and other loan and land contracts and are threatened with the loss of their farmland, equipment, crops, and livestock through mortgage and lien foreclosures, cancellation of contracts for deed, and other collection actions. The agricultural economic emergency requires an orderly process with state assistance to adjust agricultural indebtedness to prevent civil unrest and to preserve the general welfare and fiscal integrity of the state.
These findings are relevant for ascertaining legislative intent....
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