Photo by Jonathan Rotondo-McCord

Photo by Jonathan Rotondo-McCord

Updated Post (April 1, 2015):  Sometimes there is a kind of attenuated slow-down of time in civil litigation. When there are dangerous errors or wrong-doing in civil litigation, the consequences sometimes can play out over months or years. It is as if you stumble over a trip wire, hear a click, you know you are now in a bad spot, but detonation might be months later… I wonder if someone might be dealing with those unsettling circumstances in the Fagen v. Exergy fight, which I’ve covered in several previous posts.

Defendant Exergy wants to add a new party to this long-running and intensely litigated dispute. Why the new party in this case that has been pending for more than two years?

Exergy has located and produced a series of promissory notes ($12 million worth) executed by the project entity, Big Blue Windfarm, LLC (which is owned by Plaintiff/ Counterdefendant [MET]) in favor of Exergy relating to costs paid by Exergy for the development of the Big Blue Project between 2006 and 2011. See Declaration of James T. Carkulis, filed concurrently herewith (“Carkulis Decl.”). “These notes were misplaced in the course of a large scale office move that resulted in documents being divided across multiple locations.”

(Here is the declaration about the newly located promissory notes. Here are the promissory notes.)

Really? This case has been pending since October, 2012 and Defendant Exergy “found” $12 million in promissory notes related (apparently) to the subject of the litigation in October, 2014?


CatAndMouseChaseJeorenMoeszCongratulations to attorney John E. Trojack might be premature but they also seem appropriate. Trojack represents Elfi Janssen, a widow in a battle over her former husband’ estate with Anna McCormick, Ms. Janssen’s former husband’s daughter. Janssen’s case was dismissed by the trial court but was revived on appeal and the Minnesota Supreme Court denied defendants’ petition for review a few weeks ago.

Plaintiff’s allegations are that Ms. McCormick got her father to change his estate planning at a time when he was “confused and disoriented” and “rambling and incoherent.” At that time, it is alleged that Ms. McCormick set up an entity, Sibley Holdings where she put all of her assets, so when Janssen sued McCormick based on the misappropriation of the her late husband’s assets, Ms. McCormick could (and did) claim to be penniless and powerless to “make things right.”


Flickr Creative Commons License,

Dive Bar Image, Flickr Creative Commons License,

Update (March 30, 2015): Getting permission to make a claim for punitive damages is difficult under Minnesota law. In my opinion, it is too difficult.

If a buyer of expensive and sophisticated machinery makes clear to the seller that it requires Features A, B, C, D, if seller assures buyer that the expensive machine will have Features A, B, C, D, if seller delivers the product and it does not have Features A, B, C, D, and, finally, if there is sufficient evidence from which a jury could conclude that seller knowingly misstated the nature and quality of the product and knowingly sold the product without Features A, B, C, D, which seller knew that buyer felt were critical and material needs, in my view, seller should be financially punished. Such a narrative should, in my view, support a claim for punitive damages.

Plaintiff Alotech, Ltd. and its lawyers agree. Of course, defendant Northstar Imaging emphatically disagrees. In fact, Northstar Imaging argues that it provided exactly what it promised to provide so, Northstar argues, Alotech’s claim is simply and completely factually unsupported. U.S. Mag. Judge Tony Leung (D. Minn.) agreed last month with the Defendant’s opposition to the motion to amend.

Maybe Judge Leung properly applied the law. Let’s assume so. But if that is the law, I think it is wrong. Keep in mind that this is a threshold or preliminary issue, a request to make a punitive damages claim, not a request for a finding that punitive damages are warranted. Keep in mind that the legal standard is whether, looking at all of the evidence in favor of the movant (and not even looking at any evidence submitted by the non-movant) there is a “prima facie” case for punitive damages.

We are in a world these days where it seems many sellers over-promise. We are in a world where many sellers agree to provide a product with Features A, B, C, D and then provide paperwork in connection with the sale that describes a product WITHOUT Features A, B, C, D. When the disappointed buyer raises a ruckus, he is directed back to “the contract” with terms that are flat out inconsistent with the deal that buyer thought it was getting. In my view, our legal system should deter such conduct.

I understand and can identify with the defendants’ concern of the open-endedness of the threat of punitive damages. I understand that over-reaching plaintiffs will exploit the threat of punitive damages to extort higher settlements from innocent defendants. In other words, there are clearly arguments on both sides. But I think there are imbalances and unfairness in the law today and this is one example.


Minnesota Litigator - federal rule changesThe Minnesota Supreme Court is considering an array of proposed amendments to the court rules. Many are occasioned by the move to e-filing and digital court records.

One new rule will make everything easier. It will simply require that all documents filed be consecutively numbered. So, for example, an affidavit with exhibits will have to be numbered from beginning to end, running from the first page of the affidavit to the last exhibit page.

The changes will apply to documents filed in support of motions and to trial exhibits.

Why is this change important?

It will help save time and effort in the district court, as all participants will be able to pinpoint the exact page of a document being considered.

And this change will be especially helpful at the appellate level. Under amendments to the appellate rules adopted last year, appendices are eliminated. Addenda may now be longer (up to 50 pages in addition to the order or judgment at issue). But attorneys will no longer be able to include everything they want to cite to in a long appendix. Judges will be working with digital files. So it will be important to be able to direct them to the exact page.

This proposed amendment will work in sync with an administrative change made by the court recently.

The district courts are now assigning unique numbers to docket entries in the case register (as in the federal courts). So instead of citing to Affidavit of Mary Roe filed on March 18, 2014 at page x, you will be able to cite to a document entry number, for example, Doc. ID # Y at page x. (Or ROA # Y at page x to refer to the Register of Actions. The same thing with a different name.)

These ways of citing will be shorter and more precise, especially since Mary Roe may have filed more than one affidavit on a day!  So watch for the numbered docket entries and use them in citing.

"A Tough Knot to Crack" (photo by Jay Fanelli)

“A Tough Knot to Crack” (photo by Jay Fanelli)

Normally, when one party brings a motion to enforce a settlement agreement against another party, it is a matter of “buyer’s remorse.” In other words, one party to the deal wants to back out or re-neg. (Last year, I covered a particularly beloved dispute in which a litigant sought to weasel out of a settlement agreement because his name had been misspelled.)

But what happens when a litigant agrees to a particular transaction in a settlement (like the transfer of property) but, in the mean time, something happens and the litigant simply cannot do the deal (like he loses the property)? Can the disappointed counter-party sue to enforce the settlement when it’s become impossible for the other side? If the plaintiff is the one who cannot perform its part of the deal, does the defendant get to just walk away and pay nothing?



Image by Jeroen Moesz, subject to Creative Commons license.

Update (March 25, 2015): This past week, the Minnesota Supreme Court denied defendant’s petition for review of the decision described below. The plaintiff’s lawyer can now enjoy the relief that his crossing the line in closing argument did not blow up his client’s favorable verdict.

Original post (December 17, 2014): Trials are relatively infrequent and they are expensive. They are one-time (normally) theatrical productions or, if you prefer, laboratory experiments – that is, they are multi-player orchestrations, requiring a great deal of preparation, resources, and time. So courts understandably are extremely reluctant to order “encores.”

This reluctance, in turn, gives trial lawyers the incentive to bend, if not break, the rules — not egregiously so that they are all but assured stern condemnation and punishment, but just so much, just enough to help their cause without tanking the entire effort.

Giving into this temptation presents obvious and serious risk. I would invariably advise against it, across the board, in any case. But, on the other hand, lawyers can and do get away with shenanigans…


Cemetery Tombstone GraveyardUnder Minnesota common law, a life insurance policy “issued to one who has no interest in the continuation of the life of the person insured, is both a gambling contract, and a contract which creates a motive for desiring the termination of such life, and is therefore against public policy and void.”

But “once a life insurance policy has been validly procured, it may be assigned to a third party that does not have an insurable interest.”

But “an exception to the rule permitting the assignment of life insurance policies exists when an assignment is not made in good faith, but is instead ‘a mere cover for taking out insurance in the beginning in favor of one without an insurable interest . . . .'”

So, a stranger cannot buy a stranger’s life insurance policy (gambling and hoping the insured will die soon), except when he can, except when he cannot?


Slimed Person cropped SLIMEImagine you work for a grocery store chain and you are under great pressure to think up ways to increase revenue.

Here’s an idea: As people go through the store, have your smiling and sweet bagger-employees place bags in the bottom of customers’ carts as they amble through the store. When the customers get to the register, charge them, say, $0.10 per bag. Easy money!

Consumer rights advocates could have a problem with your scheme though. You’re tricking people into purchasing things that they actually would get for free. You’re surreptitiously imposing an unnecessary expense on your customers. What you’re doing is essentially fraud.

In your defense, you might say: (1) we don’t “sneak” the bags into the carts, we do so openly and we will take them out upon request; (2) many of our customers appreciate the convenience of having the bags “preloaded”; (3) some customers actually think this service saves them money because, as they shop, the presence of the bags makes them more mindful about the volume of their purchases and the “preloaded bags” deter “impulse buys.” Maybe you even have some experts to back up these defenses?


Judge, Ye Shall Be Judged

Judge, Ye Shall Be Judged

Minnesota Litigator’s secret recipe of success is its ambitious attempt to provide readers with five “fresh” posts per week, 50 weeks a year (more or less).

So when my readers, who tend to be Minnesota litigators, those who love them, those who sit in judgment of them, and those ensnared with them in what can seem like a toxic, viscous, and revolting network of webs, nettles, thickets, ooze, and dense fog (civil litigation) are at work, they can all rely on a few minutes of distraction, a few minutes of local legal news, feeble attempts at humor, and, from time to time, I like to think I stumble upon some hard-to-otherwise-find insights.

This “publishing pressure” has given me new-found deep appreciation and sympathy for journalists. Do we really have to have “news” every day? You have any idea or the ratio of news to days? And if you limit yourself to “news and commentary about Minnesota civil litigation”? Stuff happening five days/week, 50 weeks a year?


Photo by Jonathan Rotondo-McCord

Photo by Jonathan Rotondo-McCord

At large Minneapolis law firms (and large law firms nationwide), they have specific ethics partners and the rugs in the doorways to their offices are worn bare. Their colleagues are constantly running things past the ethics experts. Small firm lawyers, on the other hand, do not enjoy such support. What’s more, they tend to have less sophisticated clients and given the challenges of small firm practice might be tempted to take on risks that other more secure colleagues will pass over.

Is it ok if Uncle Pete pays his nephew’s (that is, your client’s) legal bill for the nephew’s divorce? For his DWI? How about Pete paying for his employee’s legal bill?

Is it ok to take part ownership in a client’s business as payment for legal fees that the client owes?

If you have come to view your client as a stubborn vindictive bully, is this sufficient basis for you to withdraw from representing him?

Do you have to get your client’s okay to dismiss a co-defendant (crossclaim defendant) if you think it’s consistent with the best legal strategy? If your client says, “No,” can you dismiss the party regardless consistent with your ethical obligations to your client?

What can you say in your advertising and what not consistent with ethics rules about lawyer advertising?

Does missing a deadline in a case always equate to a violation of lawyers’ ethical duties? Are breaches of ethical duties always actionable legal malpractice?

Karin Ciano, Brian Hagerty, and Seth Leventhal wade into the dark and foreboding jungle of Everyday Ethics for Small Firm Attorneys in a webcast of the National Business Institute set to air on April 21, 2015. Join us. Invest the $259. Maybe you will learn something that could save you a great deal more than that somewhere along the line in your legal practice.