Tips&Traps Tips Traps ; ;
Mechanic’s
Liens
Traditional laborers who perform visible improvements have long benefited from
the protection of mechanic’s liens, which—
when employed properly—provide the labor-
er with a security interest in the property
that their work improves. In the 1970s, the
Minnesota Legislature extended mechanic’s
lien rights to architects, engineers, and
similar such contractors who perform
“non-visible” improvements such as
drafting blueprints, plans, or construc-
tion specifications. If a developer fails
to pay the contractor for its work, a
contractor (even an engineer or archi-
tect) with an enforceable mechanic’s lien
can obtain a court order directing the
county sheriff to sell the property and
use the sale proceeds to pay the con-
tractor what it is owed for its work.
In these days of failing resi-
dential developments,
mechanic’s liens are often the
only reliable method for con-
tractors to recover full payment
;
for their work. Through a mechanic’s lien,
moreover, a contractor may recover the interest and attorney fees they incur in prosecuting their claims.
As a “race-notice” state, Minnesota
affords priority to the encumbrance with
the earliest priority date. To optimize the
priority position of its lien for engineering
or architectural work, the contractor should
record a brief statement of the nature of its
contract in the property records. If this
statement is recorded before a mortgage,
the contractor has a strong argument that
its lien has priority over the subsequently
recorded mortgage. Failure to record such a
statement doesn’t preclude claiming priority
for the lien, but without such a record one
must show that the bank had “actual
knowledge” that development was under-way at the time it recorded its mortgage—
not an easy task for an architect or engineer
whose services are not visible.
Jason Tarasek
Best & Flanagan LLP
Minneapolis
jtarasek@bestlaw.com
Medical
Privacy
The privacy provisions of a federal law governing health care providers were
strengthened last year by a portion of the
Obama Administration stimulus package, formally known as
the American
Recovery &
Reinvestment
Act of 2009. The
measure includes
changes to the Health
Insurance Portability
and Accountability
Act (HIPAA), 42
U.S.C. §1320D etseq.,
pertaining to privacy
and security requirements. The most significant change involves requirements
for notification of breach of privacy and
allowance of some private civil actions.
Under the act, health care providers
that are covered by the law are required
to notify individuals when a breach of
privacy occurs. This alters the law
which formerly required that covered
entities only try to limit the negative
effects of a privacy breach. Additionally,
if the breach affects more than 500 people, the company must report the incident to the federal authorities and the
media within 60 days of the discovery of
the breach. The new law also requires
;
conspicuous posting on a website or
notice in print or broadcast for other privacy breaches.
Despite the strengthening of the law,
private individuals whose privacy rights
have been violated may not pursue civil
claims; however, lapses of
confidentiality with respect
to medical records may be
pursued under
common law and
state statutory pro-
visions, such as the
Minnesota Health
Records Act, Minn.
Stat. §144.229, or
the Patient’s Bill of
Rights, §144.651.
The new measure
allows state attor-
neys general to bring civil suits in federal
court to enforce privacy provisions and
seek damages on behalf of state residents.
Health care facilities that transgress
HIPAA requirements now can be fined
up to $1,000 per individual, a ten-fold
increase from previous law, subject to a
maximum annual penalty of $100,000.
Marshall H. Tanick
Mansfield Tanick & Cohen, P.A.
Minneapolis
mtanick&mansfieldtanick.com
Online
Directory
Searching
If finding lawyer listings in
MSBA’s online
directory seems
more labor-inten-
sive than “letting
your fingers do
the walking”
through the printed book, consider
leaving the directory search window
open as you work. Open a new “tab”
on your browser and navigate to
http://BBDirectory.notlong.com where
you’ll find links to the member list-
ings, instrumentalities of the MSBA,
courts, and community resources
including law schools, law libraries,
and law-related organizations. You
will need to log in as an MSBA
member to view the member listings
but all of the organizational links are
open for public use. Leave the direc-
tory tab open for easy access through
your workday.
Jud Haverkamp
MSBA
Minneapolis
jhaverkamp@mnbar.org
;
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