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Fannie Mae v. Heather Apartments Ltd. Partnership
811 N.W.2d 596
Minn.
2012
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Background

  • The case asks whether Minn.Stat. § 575.05 permits a district court to enjoin transfer or disposition of a judgment debtor's property that is not currently in the debtor's hands or due to the debtor.
  • The property at issue is respondent Grossman's interest in a spendthrift trust established by his father.
  • The district court issued a temporary injunction prohibiting Grossman from transferring or disposing of trust-related money or property he has received, is due to receive, or will receive from the trust.
  • The court of appeals reversed, holding § 575.05 does not authorize future-distribution assets; the injunction also conflicted with spendthrift trust law.
  • The court analyzes the plain language of § 575.05, which allows intervention only for property in the debtor's hands, in another's hands, or due to the debtor, and for forbidding transfer of unexempt property.
  • The record showed no evidence Grossman had received trust assets or that assets were currently due to him by the time of the injunction.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Does § 575.05 authorize an injunction for future trust proceeds? Fannie Mae argues for anticipatory control of future proceeds. Grossman contends only current or presently due property can be controlled. No; not authorized for future proceeds.
Can the court issue an anticipatory standstill injunction under § 575.05? Prohibits disposal even if not currently owned or due. Statute allows protection of future interests once they become due. Not permitted; anticipatory restraint not authorized.
Does Lange v. Fidelity & Casualty Co. support anticipatory injunctions under § 575.05? Lange supports pursuing assets due to judgment debtor, including contingent claims. Lange is distinguishable and does not authorize future dispossession of non-current assets. Lange does not support the instant anticipatory injunction.
Is the district court's order authorized by § 575.05 given the three property categories? Proceeds could become property due to Grossman and should be protected. The trust proceeds do not fall into current hands, third-party hands, or currently due categories. No; order not authorized under § 575.05.

Key Cases Cited

  • Knott v. Hawley, 166 Minn. 363 (Minn. 1926) (no authority to impound future earnings; based on predecessor statute)
  • Lange v. Fidelity & Casualty Co., 290 Minn. 61 (Minn. 1971) (appointment of receiver to pursue unliquidated claim against insurer authorized)
  • State v. Gaiovnik, 794 N.W.2d 643 (Minn.2011) (statutory interpretation must consider statute as a whole)
Read the full case

Case Details

Case Name: Fannie Mae v. Heather Apartments Ltd. Partnership
Court Name: Supreme Court of Minnesota
Date Published: Mar 21, 2012
Citation: 811 N.W.2d 596
Docket Number: Nos. A10-1336, A10-1505
Court Abbreviation: Minn.