Subdivision 1.Bond or letter of credit.

(a) If the suitable guaranty is a surety bond, a person may recover from the surety the full amount of a qualified right to payment against the principal named in the bond.

Terms Used In Minnesota Statutes 325K.18

  • Financial institution: means a national or state-chartered commercial bank or trust company, savings bank, savings association, or credit union authorized to do business in the state of Minnesota and the deposits of which are federally insured. See Minnesota Statutes 325K.01
  • Person: means a human being or an organization capable of signing a document, either legally or as a matter of fact. See Minnesota Statutes 325K.01
  • Qualified right to payment: means an award of damages against a licensed certification authority by a court having jurisdiction over the certification authority in a civil action for violation of this chapter. See Minnesota Statutes 325K.01
  • Suitable guaranty: means :

    (1) a surety bond or an irrevocable letter of credit issued for the benefit of persons holding qualified rights of payment against the licensed certification authority named as the principal of the bond or the customer of the letter of credit; or

    (2) a policy of insurance that provides that claims may be made and resolved without obtaining a qualified right to payment. See Minnesota Statutes 325K.01

(b) If the suitable guaranty is a letter of credit, a person may recover from the issuing financial institution the full amount of a qualified right to payment only in accordance with the terms of the letter of credit.

(c) If the suitable guaranty is a policy of insurance, a person may recover under the terms of the policy.

(d) Claimants may recover successively on the same suitable guaranty.

Subd. 2.Attorney fees and court costs.

(a) Subject to paragraph (b), in addition to recovering the amount of a qualified right to payment, a claimant may recover from the proceeds of the guaranty, until depleted:

(1) the attorneys’ fees, reasonable in amount; and

(2) court costs incurred by the claimant in collecting the claim.

(b) However, the total liability on the suitable guaranty to all persons making qualified rights of payment or recovering attorneys’ fees during its term must not exceed the amount of the suitable guaranty.

Subd. 3.Qualified right to payment.

(a) To recover a qualified right to payment against a surety or issuer of a suitable guaranty, the claimant must:

(1) file written notice of the claim with the issuer of the suitable guarantee stating the name and address of the claimant, the amount claimed, and the grounds for the qualified right to payment; and

(2) append to the notice a certified copy of the judgment on which the qualified right to payment is based.

(b) Recovery of a qualified right to payment from the proceeds of the suitable guaranty is barred unless the claimant substantially complies with this subdivision.

Subd. 4.Statute of limitations.

Recovery of a qualified right to payment from the proceeds of a suitable guaranty are forever barred unless notice of the claim is filed as required in subdivision 3, paragraph (a), clause (1), within three years after the occurrence of the violation of this chapter that is the basis for the claim. Notice under this subdivision need not include the requirement imposed by subdivision 3, paragraph (a), clause (2).