This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).


Lynette M. Robinson, et al.,


Kenneth L. Poferl,

Filed January 25, 2000
Harten, Judge

St. Louis County District Court
File No. C9-98-602360

Keith M. Carlson, 807 Cloquet Avenue, P.O. Box 770, Cloquet, MN 55720 (for appellant)

Peter J. Nickitas, 1507 Tower Avenue, Suite 301, Superior, WI 54880-2562 (for respondents)

Considered and decided by Harten, Presiding Judge, Kalitowski, Judge, and Amundson, Judge.

U N P U B L I S H E D   O P I N I O N


In this usury action, the district court granted respondents/borrowers’ motion for summary judgment, thus implicitly denying appellant/lender’s motion to implead a third-party defendant. Appellant challenges the summary judgment, arguing that genuine issues of material fact exist regarding his intent and good faith in connection with the loan. Appellant also argues that the district court abused its discretion in implicitly denying his motion to implead a third-party defendant. Because we see neither genuine issues of material fact nor abuse of discretion, we affirm.


Appellant Kenneth Poferl loaned respondents Lynette Robinson and Dennis Pearson $32,000 at 14% interest for a 15-year term. A promissory note and a mortgage deed on respondents’ real property secured the loan. Appellant "concedes that the interest rate charged under the terms of the mortgage exceeded the maximum interest rate allowed by law."

Respondents and their attorney were present at the closing, which took place at National Title Company of Duluth (National Title), the closing agent. Appellant was not represented by an attorney at the closing.

Thereafter, respondents brought this action, alleging that the loan was usurious and void as a matter of law. Respondents moved for summary judgment and appellant moved to implead National Title as a third-party defendant. The district court granted respondents’ motion for summary judgment and did not address the motion to implead.


On appeal from a summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 1, 4 (Minn. 1990). There is no genuine issue of material fact when the nonmoving party presents evidence that merely creates a metaphysical doubt as to a factual issue and that is not sufficiently probative of an essential element of the nonmoving party’s case to permit reasonable persons to draw different conclusions. DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997). Appellant raises two challenges: (1) the district court erred in granting summary judgment because genuine issues of material fact exist as to his intent and good faith in transacting the loan, and (2) the district court abused its discretion by denying appellant’s motion to implead a third-party defendant.

1. Usurious Intent

Intent, for the purposes of usury law

consists in the intent to take or receive more for the forbearance of money than the law permits, and this is true whether or not the taker knows he is violating the usury law. If a lender intends to charge an interest rate that is greater than the legal rate, the intent element is presumed met.

Trapp v. Hancuh, 530 N.W.2d 879, 885 (Minn. App. 1995) (citations omitted). A limited exception to this rule exists when, prior to making the loan, a lender takes reasonable precautions that indicate a purpose to act in good faith and comply with the usury law, e.g., talking to a qualified third-party for a review of the transaction’s propriety. See id. at 886, (citing Wetsel v. Guaranteed Mortgage Co., 195 Minn. 509, 511-12, 263 N.W. 605, 606 (1935) (holding that the mortgage company acted in good faith in relying on schedules from reputable counsel); Washington Fed. Sav. & Loan Ass’n v. Baker, 374 N.W.2d 786, 788 (Minn. App. 1985) (holding bank had good faith belief that it met the requirements of a HUD insured loan), review denied (Minn. Dec. 13, 1985)).

Here, appellant intended to charge the 14% interest rate. But he argues that he made a good faith effort and took reasonable precautions to comply with the usury law. Appellant states in his affidavit:

I relied on [respondents’ attorney and National Title] regarding the drafting of the promissory note and mortgage deed. I assumed that [they] had knowledge of the usury law and that the rate that was being charged for interest was not usurious.

Unlike the lender in Wetsel, however, appellant did not take the precaution of retaining counsel or other professionals to advise him about the legality of the loan agreement. See Wetsel, 195 Minn. at 511-12, 263 N.W. at 606. Instead, appellant edited one of his previous loan agreements and instructed National Title to draft the promissory note in accordance with his instructions. Accordingly, appellant had neither a good-faith basis to rely on respondents’ attorney, nor a good-faith basis to rely on National Title. Moreover, after the closing and upon respondents’ discovery that the interest was unlawful, respondents offered to "reform the loan and establish a proper interest rate." See affidavit of respondent Robinson. Appellant refused, thus confirming his intent to charge 14% interest and inviting this lawsuit. The district court did not err in granting summary judgment.

2. Motion to Implead

Appellant also argues that he had a right to implead National Title as a third-party defendant. The decision to permit a party to implead a third-party defendant rests in the sound discretion of the district court. Grothe v. Shaffer, 305 Minn. 17, 25, 233 N.W.2d 227, 232 (1975). Minn. R. Civ. App. P. 14 allows a defendant to bring in a third-party; it does not create a substantive right to implead another party. Id. (citing Koenigs v. Travis, 246 Minn. 466, 469, 75 N.W.2d 478, 481 (1956)).

The district court implicitly denied appellant’s motion by granting respondents’ motion for summary judgment. Appellant concedes that under the rules of civil procedure, National Title is not a necessary party to this lawsuit. We see no abuse of discretion in the district court’s tacit denial of appellant’s motion to implead.