EDEN PRAIRIE, MN – Hellmuth & Johnson, PLLC is pleased to announce that Jack Bouquet has joined the firm. Bouquet joins the firm as Of Counsel with over forty years of experience. He practices in the areas of real estate law, community association law, corporate and business law, estate planning, and probate.

Jack is licensed to practice law in the state of Minnesota. Jack is a certified real property law specialist, certified by the Minnesota State Bar Association (MSBA), past chair of the Hennepin County Real Property Section, member of the MSBA's MCIOA committee (charged with reviewing all proposed changes to the Minnesota Common Interest Ownership Act), past chair of the Minnesota Chapter of the Community Associations Institute (CAI) and currently a member of the CAI Legislative Action Committee.

Hellmuth & Johnson, PLLC offers a range of legal services to meet both corporate and individual needs. Named among Minnesota's 50 largest law firms, Hellmuth & Johnson holds the highest possible Peer Review Rating from Martindale-Hubbell — the AV® Peer Review Rated designation. For more information, visit www.hjlawfirm.com or call (952) 941-4005.

H&J reminds its clients and friends that on July 1, 2009, the Minnesota state general sales and use tax rate increases from 6.5% to 6.875%.

This increase is a result of the constitutional amendment approved by voters in the November 2008 general election. The amendment increases the tax rate to fund various environmental protection programs.

If you are presently required to collect and remit sales tax, this would be a good time to double check your billing system to make sure it reflects the new rate. Tax tables are provided by the Minnesota Department of Revenue (MN-DOR), including taxing areas by zip code breakdowns for some popular tax districts. (Some areas have additional sales tax levies on top of the 6.875% that increase the sales tax rate.)

For construction entities, please remember that there is transitional language provided in Minnesota Statute 297A.68, Subd. 39 that applies specifically to construction contracts when the sales and use tax rate changes. This permits an exemption from the tax increase under certain circumstances. (In order to avail yourself to this exemption, the contractor should provide sellers with a fully completed form ST3. (See the online version of ST3 from MN-DOR). Other examples of phasing in of the tax increase are found on the State of Minnesota, Department of Administration maintained website.

Business entities should bear in mind that a failure by the business entity (whether it be a corporation, LLC, LLP, partnership, etc.) to collect and remit sales taxes could subject those individuals who have "control of, supervision of, or responsibility for filing returns or reports, paying taxes, or collecting or withholding and remitting taxes and who fail to do so" to personal liability for the unpaid taxes, interest and penalties. This group of individuals could include employees, officers, directors, governors, shareholders, members and partners. Where the MN-DOR makes a determination that there is personal liability for nonpayment of sales taxes, the burden is on the person assessed to show why the Commissioner was wrong.

If you have specific questions about the sales tax increase, any other issue raised in this H&J Client alert, or any other general business question, we would be happy to visit with you. Please contact one of our Business Services Group Co-Chairs, Joe Beckman or Shane Kelley at (952) 941-4005 or jbeckman@hjlawfirm.com or skelley@hjlawfirm.com.

In a recent unpublished opinion, the Minnesota Court of Appeals held that individuals could be held personally liable for a judgment against a corporation, even where the individuals were not specifically named in corporate documents as having been shareholders or members.

In Equity Trust Company et al. v. Joseph Cole, et al., decided on June 9, 2009, the Court of Appeals affirmed a district court decision to pierce the corporate veil and hold individuals liable for default judgments entered against companies involved in a complex real estate fraud scheme. The individuals had argued that the district court incorrectly held them responsible for the default judgments against the corporate entities, as the individuals had not been shareholders or members of the defaulted entities.

The Court of Appeals disagreed, focusing on the fact that the defaulted companies had been alter egos of the individuals. The Court examined a number of factors, and found substantial evidence that the individuals had been personally involved in the ownership, management, and operation of the corporate entities. However, more generally, the Court stated that if piercing of the corporate veil were solely dependent on a party's ownership interest in a corporate entity, unscrupulous parties could avoid personal liability under the doctrine by simply acting in a capacity that did not involve ownership.

The Court thus reaffirmed the rule that a district court may pierce the corporate veil to impose personal liability against any party who disregards the corporate form, regardless of whether the party holds an ownership interest in the corporate entity. This is an important reminder for business entities of the dangers of disregarding corporate formalities.

To have your corporate status or records reviewed, or to have any general corporate questions answered, please contact Joseph P. Beckman, Shane R. Kelley, or Barton C. Gernander at 952-941-4005.

Recently, the U.S. Supreme Court decided a case which will make it much more difficult for employees (or former employees) to bring claims of age discrimination based upon the ADEA (Age Discrimination in Employment Act).

Previously, the framework for proving an ADEA claim in the Eighth Circuit (including Minnesota) had been that the employee bore the initial burden to prove that age was motivating or substantial factor in the employer's adverse action (demotion, firing, etc.). The burden then switched to the employer to show a non-discriminatory reason for the action (i.e., that the decision or action would have been the same regardless of the employee's age). This was known as the “McDonnell Douglas” burden-shifting framework.

However, in Gross v. FBL Financial Services, Inc., the Supreme Court held that a plaintiff bringing an ADEA disparate-treatment claim must prove instead, by a preponderance of the evidence, that age was the "but-for" cause of the challenged adverse employment action. The burden of persuasion does not shift to the employer (to show that it would have taken the action regardless of age), not even when a plaintiff has produced some evidence that age was one motivating factor in the decision.

This ruling changes the treatment of age-related discrimination claims, as the burden-shifting “McDonnell Douglas” framework no longer applies to ADEA claims, and the Court emphasized that most recent amendments to Title VII of the Civil Rights Act of 1964 did not include a burden-shifting provision for age discrimination claims.

In other words, going forward, without hard evidence that age was the single “but-for” cause of the adverse employment action, an employee’s claims of age discrimination under the ADEA or Title VII will fail. And because employees almost certainly will not have been present while the employer discussed laying them off, demoting them, or firing them, it will be extremely difficult for employees to obtain such evidence.

Please contact Barton C. Gernander, John J. Steffenhagen, or any of our other employment law attorneys at H&J with questions.

EDEN PRAIRIE, MN – Hellmuth & Johnson, PLLC is pleased to announce that Karl E. Robinson and Chad A. Kelsch have joined the firm.

Robinson joins the firm as a partner with over twelve years of experience. He practices in the areas of litigation including business and commercial litigation, appeals, employment disputes, real estate litigation and securities litigation. Karl is licensed to practice law in the states of Minnesota and Iowa. He is a Member of the Minnesota, Hennepin County, Ramsey County, American and Federal Bar Associations, Member of the Governing Council of the Minnesota State Bar Association Appellate Practice Section, Member of the Board of Directors and Treasurer for the Eighth Circuit U.S. Court of Appeals Bar Association, and Adjunct Professor at William Mitchell College of Law.

Kelsch joins the firm with nearly ten years of experience and practices in the areas of business/consumer bankruptcy, bankruptcy litigation, debtor/creditor remedies, construction law and real estate. Chad is licensed to practice law in Minnesota, North Dakota and Missouri. He is a member of the Minnesota State Bar Association, American Bar Association, and Hennepin County Bar Association. He is also a volunteer for the Minnesota Volunteer Lawyers Network, and a volunteer at the Children’s Law Center.

Hellmuth & Johnson, PLLC offers a range of legal services to meet both corporate and individual needs. Named among Minnesota's 50 largest law firms, Hellmuth & Johnson holds the highest possible Peer Review Rating from Martindale-Hubbell — the AV® Peer Review Rated designation. For more information, call (952) 941-4005.

Hellmuth & Johnson, PLLC is pleased to announce that the Board of Governors has named Barton C. Gernander a partner.

A member of the firm's Litigation and Employment Law Practice Groups, Bart primarily represents clients in banking, construction, real estate, entertainment, and others involved in standard and complex litigation in both state and federal courts. He serves on the Minnesota State Bar Association Court Rules and Administration Committee, the Hennepin County Bar Association's

Although we had all hoped that the fraud related to the "subprime mortgage meltdown" was behind us, perpetrators of fraud seem to create new schemes with each new moon, and some of the more "lucrative" schemes of the past remain a risk today.

Fraudulent Promissory Note & Bonds

The U.S. Treasury, Office of Inspector General (OIG), has recently published an alert regarding a new fraud scheme. Real estate professionals should be aware of the scheme and its potential impact on a purchas

Hellmuth & Johnson, PLLC and award-winning design and build firm College City Homes and Remodeling are again partnering to present Moisture Intrusion seminars for homeowners in 2009. These highly popular, free seminars provide homeowners and prospective home buyers with information on identifying and resolving moisture intrusion issues - including the home investigation process, remediation, and the legal rights and responsibilites of homeowners. Real estate and building professionals are

Intentionally Defective Grantor Trusts

Here's a great technique used to transfer wealth in an advantageous and unique way: gifting an asset's appreciation while keeping its income. An Intentionally Defective Grantor Trust (IDGT) is an irrevocable trust designed for the benefit of your children and future descendants.

How Does a Defective Trust Work?

Typically, the trust maker sets up an irrevocable trust. The trust is drafted so that the trust maker retains enough control to cause it t

Hellmuth & Johnson, PLLC is pleased to announce that firm partner Lee R. Bissonette has been certified as a member of the Multi-Million Dollar Advocates Forum.

Lee is presently a Life Member of the Million Dollar Advocates Forum, one of the most prestigious groups of trial lawyers in the United States. Membership in the Million Dollar Advocates Forum is limited to attorneys who have won million and multi-million dollar verdicts, awards and settlements.

Less than 1% of U.S. lawyers a

Does North Dakota law protect those who provide horse boarding, training, and riding services from liability for injuries sustained by their customers?

Yes. North Dakota's equine activity statute generally shields "equine activity sponsors" and "equine professionals" from liability for bodily injuries sustained by participants during equine activities.

An equine activity sponsor or an equine professional is not liable for an injury to or the death of a participant engaged in an equine ac

Hellmuth & Johnson, PLLC is pleased to announce that Mark E. Rath and Carol R.M. Moss have joined the firm's Litigation Practice Group.

Mark Rath concentrates his practice in the areas of insurance defense, municipal defense litigation and commercial litigation. He is licensed to practice law in the state courts of Minnesota and Michigan, the United States District Courts for the Eastern and Western Districts of Michigan, the U.S. Sixth Circuit Court of Appeals, and the Tribal Court f

Recognized Among Top 2.5% Attorneys in State

Hellmuth & Johnson, PLLC today announced that Minnesota Law & Politics magazine has named five firm attorneys to the 2009 Minnesota Rising Star^® list. The attorneys will be recognized in the December 2008 issues of Minnesota Law & Politics, Twin Cities Business and Mpls/St.Paul Magazine.

The attorneys named to the 2009 Rising Star list are:

Matthew J. Franken / General Litigation, Construction Litigation, Real Estate

The Federal Fair Housing Act (FHA) and the Minnesota Human Rights Act (MHRA) prohibit discrimination against some protected classes, such as disabled individuals. Normally, a residential housing provider is required to make reasonable accommodations in its policies, procedures and practices to afford a disabled individual with an equal opportunity to use and enjoy a dwelling. These acts have been held to apply to community associations.

In the context of pet and animal restrictions, an a

In a previous article, we discussed use of electronic communications to conduct business of associations governed by Minnesota Statutes Chapter 515B, the Minnesota Common Interest Ownership Act (MCIOA). (See our Spring 2008 newsletter.) As that article indicated, boards acting on behalf of associations governed by MCIOA are required to have open board meetings except when the discussion involves certain sensitive matters (as enumerated in MCIOA).

Not all associations, of course, are gove