This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).







David Shipley, et al.,





Duane Sjoblom,

d/b/a Sjoblom’s Nursery,




Filed June 12, 2001

Reversed and remanded

Toussaint, Chief Judge


Koochiching County District Court

File No. C899128



Steven A. Nelson, 210 Fourth Avenue, International Falls, MN  56649 (for appellants)


Jerrod Anthony Shermoen, Shermoen & Jaksa, PLLP, 345 Sixth Avenue, P.O. Box 1072, International Falls, MN  56649 (for respondent)


            Considered and decided by Hanson, Presiding Judge, Toussaint, Chief Judge, and Crippen, Judge.

U N P U B L I S H E D   O P I N I O N

TOUSSAINT, Chief Judge

            Appellants challenge the district court determination that the loan they made to respondent in 1989 was usurious from its inception and that the proper remedy was to void the loan and interest.  Because there was insufficient evidence in the record at the close of appellants’ case to support the district court’s finding that the parties had agreed to an interest rate of 11% from the inception of the loan, the district court determination that the loan was usurious is reversed.  We remand to allow respondent to present his case.


            When a matter is tried to the court, which then dismisses a plaintiff’s case pursuant to Minn. R. Civ. P. 41.02(b) with written findings, the findings are reviewed under a clearly erroneous standard.  Fidelity Bank & Trust Co. v. Fitzimons, 261 N.W.2d 586, 588 & n.5 (Minn. 1977).


            “Usury is the taking or receiving of more interest or profit on a loan or forbearance than the law allows.”  Barton v. Moore, 558 N.W.2d 746, 750 (Minn. 1997) (citation omitted).  The lender must intend the loan to be usurious “at the inception of the transaction.”  Citizen’s Nat’l Bank v. Taylor, 368 N.W.2d 913, 918 (Minn. 1985).  “Whether a transaction is usurious is ordinarily a question of fact.”  Kantack v. Kreuer, 280 Minn. 232, 240, 158 N.W.2d 842, 848 (1968) (citation omitted).  The party asserting usury has the burden of proving it by a preponderance of the evidence.  Dege v. Produce Exchange Bank, 212 Minn. 44, 47, 2 N.W.2d 423, 425 (1942).

            The district court determined that appellants made a loan of $10,000 to respondent on July 23, 1989, with an interest rate of 11%.  The court found little evidence in the record addressing the crucial issue of when the 11% interest rate became part of the contract.  The court relied on appellants’ summary of the debt in a letter dated May 5, 1997, claiming that the transaction was a loan, with a balance due of $16,631.86, and an attachment calculating interest at a rate of 11%.  But this does not provide evidence that the parties intended a rate of 11% at the inception of the loan.  Consequently, the district court decision that the loan was usurious from its inception was clearly erroneous and not supported by the record.


            When a borrower has a loan that is found to be usurious under section 334.01 (1998), which provides the general usury limit, it may choose one of two remedies.  First, the borrower may recover any interest paid for the usurious loan under section 334.02 (1998).  Second, the borrower may have the contract voided under section 334.03 (1998), so that the borrower would no longer be liable for the principal or interest on the loan.  Id.

            When the loan is for business or agricultural purposes in an amount less than $100,000, however, a different remedy applies.  Minn. Stat. § 334.011 (1998).  Barton, 558 N.W.2d at 751.  Either the entire interest on the loan is forfeited or, if the interest has already been paid, then the lender has a cause of action to recover an amount equal to twice the amount of interest paid, but there is no provision for voiding the usurious agricultural or business loan.  Id.

            The district court determined that appellants stipulated that the loan was governed by section 334.01 based on appellants’ opening statements, in which they stated that they were willing to stipulate to 6% interest under section 334.01.

            Courts favor stipulations to simplify and expedite litigation.  Ronay v. Ronay, 369 N.W.2d 6, 12 (Minn. App. 1985).  Such stipulation is binding on the parties, district court, and appellate court.  Abendroth v. National Farmers Union Prop. & Cas. Co., 363 N.W.2d 785, 787 (Minn. App. 1985).  Stipulations may be abandoned.  Gethsemane Lutheran Church v. Zacho, 253 Minn. 469, 479-80, 92 N.W.2d 905, 913 (1958).  “[W]here the parties at the trial abandon such stipulation and proceed to try the issue, they are bound by the results of that trial.”  Id. at 480, 92 N.W.2d at 913.  While appellants may have stipulated to an interest rate of 6%, they litigated the issue of whether the loan was under section 334.01 or section 334.011 by submitting evidence as to the use of the check, citing section 334.011 in their closing statements, and discussing that provision in their memorandum to the district court regarding the appropriate remedy.  Consequently, the district court erred in ruling appellants were bound by this stipulation.

            When an appellate court reverses the district court’s judgment made at the close of the plaintiff’s case pursuant to Minn. R. Civ. P. 41.02(b), the matter will be remanded to allow respondent to present his case.  Poured Concrete Found. Inc. v. Andron, Inc. 507 N.W.2d 888, 891-92 (Minn. App. 1993), review denied (Minn. Jan. 27, 1994).  Consequently, this matter is reversed and remanded to the district court.

            Reversed and remanded.