Court Opinion

ID: 9724716
Source: CourtListenerOpinion
Date Created: 2023-08-26 11:10:18.939594+00
Date Added: 2024-06-11T18:25:05.133608
License: Public Domain

FOLEY, Judge
(concurring in part and dissenting in part).
I respectfully concur in part and dissent in part. It is my view that as a temporary emergency measure the Farmer-Lender Mediation Act is prospectively constitutional but is not retroactive in its application to the cases on appeal.
1. THE FARMER-LENDER MEDIATION ACT OF 1986, AS A TEMPORARY EMERGENCY MEASURE, IS CONSTITUTIONAL WHEN VIEWED AND APPLIED PROSPECTIVELY.
The temporary emergency Farmer-Lender Mediation Act, 1986 Minn. Laws ch. 398, art. 1, §§ 5-17 (codified as Minn.Stat. §§ 583.20-32), was enacted to help preserve the integrity of the farm economy of Minnesota in light of the present farm economic crisis. 1986 Minn. Laws ch. 398, art. 1, § 6. This Act temporarily extends the time for foreclosure1, not requiring any change of contract terms, without the voluntary consent of the parties. See id. §§ l(6)-4.2
The Act postpones the creditor’s remedies to allow both parties time to engage in good faith mediation in the hope that financially distressed farmers may reach some agreement with their creditors that enables them to repay their debts. Id. §§ 6, 10-13. *831If a creditor fails to mediate in good faith, the Act allows a trial court to require good faith mediation for up to 60 days during which time all creditor remedies are suspended. Id. § 12, subd. 3. If a creditor still fails to engage in good faith mediation, the trial court must suspend the creditor’s remedies for an additional period of 180 days. Id. § 12, subd. 3. The duty of good faith is likewise placed upon the debtor. Id. § 12, subds. 1 and 4. The debtor’s failure to mediate in good faith allows the creditor to immediately proceed with its remedies. Id. § 12, subd. 4.
The Act, as applied prospectively to creditors who have not commenced proceedings against farmer-debtors before its effective date (March 22, 1986), does not change creditor’s contract rights, but merely postpones the time for foreclosure to allow time for mediation. Thus, the Act is within the constitutional power of the legislature to enact as prospective legislation and does not impair the creditor’s contract rights where the creditor had not commenced legal proceedings before its effective date. Home Building & Loan Association v. Blaisdell, 290 U.S. 398, 54 S.Ct. 231, 78 L.Ed. 413 (1934).
In Blaisdell, the United States Supreme Court found that a similar temporary emergency measure did not impair contract rights where it did not change the rights but only postponed foreclosure. Chief Justice Hughes noted that the Minnesota statute postponing foreclosure of mortgages
does not impair the integrity of the mortgage indebtedness. The obligation for interest remains. The statute does not affect the validity of the sale or the right of a mortgagee-purchaser to title in fee, or his right to obtain a deficiency judgment, if the mortgagor fails to redeem within the prescribed period. Aside from the extension of time, the other conditions of redemption are unaltered.
Id. at 425.
The Supreme Court considered five factors important to its analysis and conclusion that the Minnesota statute did not violate the contract clause of the Constitution:
(1) “An emergency existed in Minnesota which furnished a proper occasion for the exercise of the reserved power of the state to protect the vital interests of the community.” Id. at 444, 54 S.Ct. at 242;
(2) “The legislation was addressed to a legitimate end * * *.” Id. at 445, 54 S.Ct. at 242;
(3) “[T]he relief afforded and justified by the emergency [was of] a character appropriate to that emergency [and was granted] upon reasonable conditions.” Id.;
(4) “The conditions upon which the period of redemption is extended do not appear to be unreasonable.” Id.; and,
(5) “The legislation is temporary in operation. It is limited to the exigency which called it forth.” Id. at 447, 54 S.Ct. at 243.
The same factors are pertinent here and support a finding that the Farmer-Lender Mediation Act, as applied prospectively, does not violate the contract clause of the Constitution.
The rules set forth in Blaisdell have been consistently followed by Minnesota courts. See, e.g., Christensen v. Minneapolis Municipal Employees Retirement Board, 331 N.W.2d 740 (Minn.1983); Western States Utilities Co. v. City of Waseca, 242 Minn. 302, 65 N.W.2d 255 (1954); Minnesota Gas Co. v. Public Service Commission, Department of Public Service, State of Minnesota, 523 F.2d 581 (8th Cir.1975), cert. denied, 424 U.S. 915, 96 S.Ct. 1114, 47 L.Ed.2d 320 (1976); Minnesota Trust Company of Austin v. Hatch, 368 N.W.2d 372 (Minn.Ct.App.1985).
I nonetheless disagree with the majority to the extent that it holds that application of the Act does not impair the contract rights of creditors who commenced actions against debtor-farmers before the Act went into effect on March 22, 1986. Here, the Production Credit Association commenced action on March 12, 1986 against Walter Laue seeking a money judgment and recov*832ery of secured collateral and the Federal Land Bank commenced foreclosure proceedings in February 1986 against Charles, Lois and Michael Kelly. Both creditors thus had vested rights in the actions already commenced.
It is recognized that vested rights include not only legal or equitable title to enforcement of a demand but include as well an exemption from new obligations created after the right vested.
* * H- * * *
Where * * * the liability of the [parties] has been fixed under [statute], their vested right in such determined liability may not be destroyed by legislation which imposes a new obligation or an additional liability.
Yaeger v. Delano Granite Works, 250 Minn. 303, 307, 84 N.W.2d 363, 366 (1957) (citations omitted) (cited with approval in Ridgewood Development Co. v. State, 294 N.W.2d 288, 294 (Minn.1980)). The interference imposed by the majority here (which holds these creditors must now stop commenced proceedings, stay court dates and mediate the disputes) unreasonably burdens and unconstitutionally impairs vested contract rights.
2. BY ITS CLEAR LANGUAGE THE FARMER-LENDER MEDIATION ACT IS NOT TO BE APPLIED RETROACTIVELY.
Minn.Stat. § 645.21 (1984) provides: “No law shall be construed to be retroactive unless clearly and manifestly so intended by the legislature.” Whether the Act is to be applied retroactively depends on the express intent of the legislature. See Lovgren v. Peoples Electric Co., Inc., 380 N.W.2d 791, 795 (Minn.1986), rev’g 368 N.W.2d 16 (Minn.Ct.App.1985). In Lovgren, the supreme court noted that the fact a certain statute became effective after a 115-day delay period due to the fact the act contained no effective date, was “not sufficient evidence of a clear and manifest legislative intent that [the statute] be applied retroactively.” Id. at 796.
■ Although the supreme court did review this court’s ruling in Lovgren that the statute implied an intent that it be applied retroactively, it clearly stated that the statute itself must expressly indicate it is to be applied retroactively:
In prior cases where the court has found sufficient evidence of the requisite legislative intent, there have been provisions in the statute clearly providing for retroactive application or, at least, a delayed enactment date has been explicitly included in the provisions of the statute. See, e.g., Viereck v. Peoples Savings and Loan Ass’n, 343 N.W.2d 30 (Minn.1984); Kozisek v. Brigham, 169 Minn. 57, 210 N.W. 622 (1926) * * *; State ex rel. Anderson v. General Accident Fire and Life Assurance Corp., 134 Minn. 21, 158 N.W. 715 (1916) * * *.
Id. (emphasis supplied).
Lovgren is dispositive on the retroactivity issue here and precludes application of the Act to matters commenced before enactment. The majority incorrectly construes the Act under the authority of Minn. Stat. § 645.16 which may only be used “[w]hen the words of the law are not explicit.” Id. The majority concedes “article 1 contains no explicit statement regarding application to pending proceedings.” I am therefore puzzled at the majority’s footnote reference to my reliance on Lovgren, the most recent statement from the Minnesota Supreme Court on retroactivity. Lovgren is not so limited to its own facts, as the majority suggests.
The Act states: “The article is effective the day following final enactment.” 1986 Minn. Laws ch. 398, art. 1, § 19. The article was enacted March 21, 1986, after respondents had commenced civil actions against appellants. Respondent Production Credit Association had commenced its litigation against Laue on March 12, 1986 and respondent Federal Land Bank commenced its action against the Kellys in February 1986. The Act does not state that it is to be applied retroactively to creditors and debtors who are in the midst of legal proceedings when the obligation to mediate became effective on March 22, *8331986. Lovgren requires an explicit statement of such intent. Id., 380 N.W.2d at 796. No inquiry beyond the words of the Act is therefore required because the Act is not ambiguous. See Minn. Stat. § 645.16; Christopherson v. Federal Land Bank of St. Paul, 388 N.W.2d 373 (Minn.1986); Graber v. Peter Lametti Construction Co., 293 Minn. 24, 29, 197 N.W.2d 443, 447 (1972).
The majority engages in mental gymnastics and reverse logic to find that the Act is retroactive. For example, contrary to the principles of Lovgren and Christopherson, the majority looks at article 2, § 5 of chapter 398, which is not part of the Farmer-Lender Mediation Act, to construe the Farmer-Lender Mediation Act as a retroactive act. The majority finds that because article 2 indicates an intent for prospective application, article 1 must be construed as retroactive since no words denying this are stated in the Act.3 This method of analysis ignores the mandate of Lovgren that a statute is to be construed as retroactive only, where there is a “clear and manifest legislative intent that [it] be applied retroactively.” Id., 380 N.W.2d at 796.
The majority’s analysis also ignores the direct language of Lovgren, quoted above, which notes that in prior cases a finding of retroactivity has been based on “provisions in the statute clearly providing for retroactive application. ” Id. (emphasis supplied). Instead of looking for an express provision (which obviously does not exist), the majority finds an ambiguity in isolating and construing article 1, § 11, subd. 2(c) of the Act. Although I do not think Lovgren requires refutation of the majority’s construction of this isolated provision, I think it is important to note that if subdivision 2(c) is put into the perspective of the entire section, a logical time sequence appears.
Section 11 begins by stating:
Subdivision 1. A creditor desiring to start a proceeding to enforce a debt against agricultural property under chapter 580 or 581 or sections 336.9-501 to 336.9-508, to terminate a contract for deed to purchase agricultural property under section 559.21, or to garnish, levy on, execute on, seize, or attach agricultural property, must serve an applicable mediation notice under sections 1, 2, 3, and 4 on the debtor and the director. The creditor may not begin the proceeding until the creditor and debtor have completed mediation or as allowed under sections 5 to 17.
1986 Minn. Laws ch. 398, art. 1, § 11, subd. 1 (emphasis supplied). The language used in this subdivision indicates that the legislature intended that before a creditor begins pursuing its legal remedies, it must follow the procedures of the Act. No language obligates creditors who had already begun actions before March 22, 1986 to serve notice of mediation or engage in mediation.
Subdivision 2 of section 11 indicates the next action to occur:
Subd. 2. (a) A debtor must file a mediation request form with the director by 14 days after receiving a mediation notice. The mediation request form must state all known creditors. The director shall make mediation request forms available in the county recorder’s and county extension office of each county.
(b) A debtor who fails to file a timely mediation request waives the right to mediation under the farmer-lender mediation act. The director shall notify a creditor stating that the creditor may proceed against the agricultural property because the debtor has failed to file a mediation request.
(c) If a debtor has not received a mediation notice and is subject to a proceeding of a creditor enforcing a debt against *834agricultural property, the debtor may file a mediation request with the [director]. The mediation request form must indicate that the debtor has not received a mediation notice.
Id,., § 11, subd. 2.
Subdivision 3 and the following subdivisions of article 11 explain the director’s duties and finally the mediator's duties. Viewing section 11 in its entirety, it is clear that the legislature set forth each parties’ duties in a logical time sequence of events. Only when one isolates part (c) of subdivision 2 does any ambiguity possibly arise as to whether a debtor may request mediation when the creditor had no obligation to provide notice of mediation under subdivision 1.
Finally, the majority musters support for its view that the Act is retroactive by noting the findings of the legislature regarding the current agricultural economic crisis. While I am mindful of a serious state-wide agricultural economic crisis (as the legislature was aware of the plight of our farmers and equally aware of the legitimate concern by the lending institutions), nonetheless, the Minnesota Supreme Court has held:
Neither the wisdom of the laws nor their adequacy to accomplish a desired purpose may be taken into consideration by courts in determining what interpretation the lav/s should have; we must give effect to them as they are, regardless of our personal opinion regarding their adequacy.
Norris Grain Co. v. Seafarers’ International Union, 232 Minn. 91, 109-10, 46 N.W.2d 94, 105 (1950) (footnote omitted) (quoted in State v. Connelly, 389 N.W.2d 734 (Minn.Ct.App.1986)). In addition, the supreme court has previously rejected the argument that a statutory omission may be explained as a legislative oversight: “We must reject this argument on the well-established ground that courts cannot supply that which the legislature purposely omits or inadvertently overlooks.” Wallace v. Commissioner of Taxation, 289 Minn. 220, 230, 184 N.W.2d 588, 594 (1971) (quoted with approval in State v. Corbin, 343 N.W.2d 874, 876 (Minn.Ct.App.1984)).
The decision whether an act should be applied retroactively rests with the legislature which has the power to expressly state this intent. The legislature is well aware that Minn. Stat. § 645.21 mandates a presumption of prospectivity unless the statute contains an express intent that it should be applied retroactively. Therefore I would affirm the trial court in each case here, holding that the Farmer-Lender Mediation Act does not apply retroactively to creditors who have commenced civil proceedings before March 22, 1986.
Finally, I wish to comment on appellants’ attempt to rely on the affidavit and ex parte letter of individual legislators as indicative of the legislature’s intent that this Act be applied retroactively. I agree with the trial court and majority that such material is irrelevant, and it is also inappropriate evidence of legislative intent.
Laws would rest on an insecure foundation if courts were to seek to determine motives of individual members of the legislature in passing laws by resort to extraneous evidence which was not part of the journal entry.
Starkweather v. Blair, 245 Minn. 371, 380, 71 N.W.2d 869, 876 (1955) (cited in State v. Howard, 360 N.W.2d 637, 640 (Minn.Ct.App.1985)).
The overwhelming and great majority of farmers with mortgage debt will benefit by the Farmer-Lender Mediation Act of 1986 and there will be only a few cases (perhaps fewer than 10) where farmer-debtors who had actions commenced against them before March 22, 1986 assert the claims raised by the appellants. But those few cases, including those on appeal here, are exempt from application of the new Act for all the reasons stated herein. Because of the state-wide importance of the issues, both constitutional and statutory, these cases should be reviewed by the Minnesota Supreme Court.

. The Farmer-Lender Mediation Act is repealed on July 1, 1988. 1986 Minn. Laws ch. 398, art. 1, § 18.

. The changes effected in the Act by the 1986 Special Session do not affect these proceedings.

. No article of chapter 398 provides for retroactive application; all the articles of this chapter indicate either an effective date or that the article becomes effective the day after final enactment. Furthermore, to hold that the legislature intended that the act as written applies retroactively might very well constitute an invasion of the doctrine of separation of powers. See U.S. Const, arts. I, II, III; Minn. Const, art. 3, § 1; see also State v. Osterloh, 275 N.W.2d 578, 579-80 (Minn.1978).