Minnesota Statutes 327B.11 – Recourse to the Bond
Subdivision 1.Consumer claimants.
Any consumer customer sustaining injuries within the terms of a surety bond issued pursuant to section 327B.04 may proceed against the principal and surety without making the state a party to the proceedings. Provided, however, that the aggregate liability of the surety to all persons for all losses or damages shall in no event exceed the amount of the bond.
Subd. 2.Payment of claims; notice to commissioner.
Terms Used In Minnesota Statutes 327B.11
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- state: extends to and includes the District of Columbia and the several territories. See Minnesota Statutes 645.44
Terms Used In Minnesota Statutes 327B.11
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- state: extends to and includes the District of Columbia and the several territories. See Minnesota Statutes 645.44
Before paying any claim against a surety bond, the surety company must first notify the commissioner in writing of the amount of the claim, the basis of the claim and the surety company’s intention to pay the claim. Unless the commissioner objects in writing within ten days of receiving the notice, the surety company may proceed upon its intention. The commissioner’s failure to object is not evidence of the validity of the claim or of the propriety of paying the claim. The commissioner shall object only with reasonable grounds to believe that paying the claim will reduce the obligation of the bond to an amount less than the total amount of other outstanding and valid claims against the bond.
Subd. 3.Application for a referee.
Within 15 days of objecting to the payment of a claim, the commissioner shall apply to the district court for an order:
(a) directing the surety company to pay the full obligation of the bond into court; and
(b) appointing a referee to hear claims against the bond and to propose to the court the proper distribution of the bond proceeds.
The surety company and the principals on the bond shall be parties to the proceedings.