Minnesota’s strange law surrounding bouncing a check got some spotlight attention today when the Minnesota Supreme Court ruled that a woman who bounced a check to pay back property taxes in Wabasha County can’t be prosecuted under the state’s so-called “dishonored check” law, even though she may have known at the time there wasn’t enough cash to cover the check.
That’s illegal in Minnesota except if the check is in exchange for what the Legislature termed “past considerations.”
Kristyn Nicole Schouweiler was charged with a felony for submitting the near $2,000 check in 2015 to pay back property taxes for 2014. She claims back taxes are “past considerations” under the law and she shouldn’t be prosecuted.
Such is the nature of contract law, and so the Supreme Court headed for the dictionary and found that there is meaning and then there is technical meaning. It said in a ruling today she’s protected from prosecution, thus overturning a Minnesota Court of Appeals ruling:
In ordinary, nonlegal speech, the word “consideration” means a payment given as compensation for a good or service. See Webster’s Third New International Dictionary of the English Language Unabridged 484 (2002) (defining “consideration,” in part, as “something given as recompense: as . . . payment, reward”); see also The American Heritage Dictionary of the English Language 392 (5th ed. 2011) (defining “consideration,” in part, as “[p]ayment given in exchange for a service rendered; recompense”). “Past,” of course, refers to something that has “existed or occurred in an earlier time.” The American Heritage Dictionary 1290. “A check given for a past consideration” would then refer, according to its common and ordinary meaning, to a check given as payment for something of value received in the past.
As a contractual term of art, however, the phrase “past consideration” has a different meaning. “Consideration” is an act or forbearance that induces a contractually binding promise. See Consideration, Black’s Law Dictionary (10th ed. 2014). But when the act or forbearance was given before the return promise was made, the act or forbearance is called “past consideration.” See id. Because a “past consideration” does not actually induce a return promise, a promise given for “past consideration” is not legally binding.
Why would the Legislature pass such an obvious loophole that would allow people to submit bad checks to pay their taxes? Good question, and one Justice Margaret Chutich tried to answer.
“When the Legislature enacted the dishonored-check statute, including the past-consideration exception, it may have intended to criminally punish only the issuance of a worthless check that actually induced the other party to provide a good or service to the issuer of the check,” she wrote in her opinion today. “The Legislature may have concluded that the physical presence of a check at the time of exchange would be more likely to induce the immediate delivery of goods or services than a mere promise by the issuer to write a check at a later date.”
The court also wrestled with whether your tax payment is for past considerations, given that you’re paying to fund future and ongoing services.
“Because property taxes may be reasonably understood to support public services, and Schouweiler presumably received at least some of these services — fire and police protection or snow removal, for example — by the time she issued her check for the past year’s property taxes, her check was given for a past consideration,” Chutich said, thus allowing Schouweiler to escape criminal prosecution by fitting the exception the Legislature created.
State authorities argued that it’s absurd to allow someone to escape prosecution for issuing a bad check, but Chutich said Wabasha County still is owed the tax money from the woman and still has the power to get it.
In her dissent, Chief Justice Lorie Gildea said the Legislature likely did not intend that your tax payments be considered payment for something homeowners already received.
“… local governments use property taxes to pay for services that they provide; taxpayers do not ‘give’ tax payments for services, except in the most abstract way as a part of the social compact. Local governments provide many benefits to our citizens, and to do so they must be funded. Nevertheless, I am certain the Legislature did not intend to include a landowner’s required contribution to that funding as payment for ‘goods or services received in the past.’”
On such fine points, law is established.
Unanswered in all of this, of course, is what’s now to prevent property owners from submitting bad checks to try to buy a little more time?