Golden Valley case spurs new legislation that requires estate-sale companies to be bonded

Customers who hire an estate-sale company in Minnesota will soon have a way to collect a check, besides the courtroom, if the company fails to pay up.

The new law, signed May 13, requires estate-sale firms to be bonded. It was inspired by a case involving a Golden Valley estate salesman, Craig Birkeland, who was sued last year by the state for failing to pay dozens of customers after he and his company, Birkeland & Associates, sold off their antiques and possessions. The law takes effect Jan. 1, 2014.

Rep. Linda Slocum, D-Richfield, sponsored this year's bill after lobbying for a similar one last year that never got a hearing. "Most people have good businesses, but like every occupation, there are some bad actors," she said. The bonding requirement "will help the reputation and professional ­relationship of the estate sale industry."

Linda Pegelow of Bloomington is still waiting for a $21,000 check from Birkeland and pushed legislators to consider the bill.

"This will just give [customers] more protections," she said. "If we had had that in place, we would have gotten something back."

As more baby boomers downsize, estate sales have grown increasingly popular. But companies don't have to be licensed in Minnesota, unlike auctioneers, leaving customers often grieving a family member's death or downsizing with little recourse. Last year, a similar House bill, sponsored by Rep. Linda Slocum, never got a hearing.

The new law will offer some comfort to Pegelow for future estate-sale customers, but it will provide little relief to her and the 61 other former Birkeland customers who were part of the state attorney general's lawsuit against him. Last month, a Hennepin County district judge ordered Birkeland to pay $2 million to the state by May 8 — totaling about $588,000 in restitution and $1.4 million in fines. The check never came.

Birkeland is reportedly living in a St. Louis Park apartment after his wife filed for divorce earlier this year. He didn't show up or have an attorney represent him in recent hearings and hasn't returned repeated messages left by the Star ­Tribune.

For two decades, Birkeland ran a reputable estate-sale business. But in the last few years, customers started filing civil lawsuits, claiming they were underpaid or never paid. Customers such as Minnetonka retirees Joyce and Larry Johnson got $3,000 of the $10,000 they estimate Birkeland owes from selling their furniture and grand piano before they moved to Florida. Others like Pegelow never got a cent.

He owes her about $21,000 for selling her late cousin's estate in 2010, money meant to support her cousin's 92-year-old mother. Birkeland didn't pay her then — or after she took him to court and was awarded a judgment. Since the Star Tribune first wrote about the case a year ago, a dozen other customers have told similar stories.

Now, Pegelow hopes the new law will change that.

"You feel violated," she said. "Hopefully no one else will have to go through this."