This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
The Loan Store,
Hennepin County District Court
File No. AC 05-11208
Considered and decided by Wright, Presiding Judge; Randall, Judge; and Halbrooks, Judge.
U N P U B L I S H E D O P I N I O N
This appeal results from a judgment based on the district court’s finding that the parties agreed to an oral modification of a contract. On appeal, appellant argues that the district court failed to take into consideration the statute-of-frauds writing requirement for credit agreements stated in Minn. Stat. § 513.33, subd 2 (2000). We affirm on all issues.
On or about July 14, 1999, Dionte
Davis and respondent Latanya McConnell executed an installment contract (the “Contract”)
with Walser Buick Isuzu Mazda, pledging a 1995 Ford Taurus as security on the contract. The Contract was then assigned to appellant
The Loan Store (“Loan Store”). The terms
of the Contract were such that Davis and McConnell were required to make
monthly payments of $323.06, beginning August 28, 1999, and continuing for a period
of forty-two months. Davis and McConnell
subsequently defaulted under the terms and conditions of the Contract by failing
to make monthly payments after September of 2000. As a result of this default, Loan Store filed
suit against Davis and McConnell in
McConnell testified that in April of 2001 she contacted Loan Store and talked to Jeremy Stangler, a Loan Store manager. According to McConnell, the two agreed the balance owed on the Contract would be $4,000, not $16,459.03. McConnell also testified that she and Stangler agreed that the monthly payments would be reduced and McConnell would pay $125 a month toward the remaining $4,000, and that once $2,500 had been reached, they would discuss whether or not she needed to make additional payments. Loan Store sent McConnell a payment book reflecting payments of $125 per month, corroborating McConnell’s testimony. McConnell introduced into evidence financial statements showing her payments of $125 or more per month as per the coupon book. Loan Store never rejected a $125 payment as being inadequate. McConnell further testified that in December of 2002, she called Stangler who informed her that the account would be closed as she had now reached payments totaling more than $2,500. McConnell sent a letter to Loan Store stating the oral agreement between herself and Loan Store, asking for documents evidencing no balance due on the Contract, and stating that she would discontinue payments. Loan Store testified that it had never seen the letter before the trial and claimed that Loan Store had no conversations with McConnell regarding the closing of her account. A Loan Store collection manager testified that “I think you still owed money, that’s why we had a court case after this letter.”
Loan Store sought a deficiency judgment in the amount of $7,500 for breach of contract, the maximum amount available in conciliation court. On July 5, 2005, the conciliation court entered judgment in favor of Loan Store in the amount of $1,313. On July 20, 2005, Loan Store filed and served a demand for removal to Hennepin County District Court which was granted on July 27, 2005. Loan Store then filed an amended complaint requesting judgment against McConnell in the amount of $16,459.03, together with costs, disbursements, and attorneys’ fees. On October 25, 2005, the district court entered judgment favoring Loan Store in the amount originally ordered, $1,313. Loan Store requested an opportunity to file a motion to reconsider, stating as part of its’ reasoning that even if respondent did meet her evidentiary burden, the parties could not orally modify the Contract as a matter of law because the Contract falls within the statute of frauds.
The motion to reconsider was granted but the district court limited reconsideration to the amount sought by Loan Store. On November 23, 2005, the district court submitted an amended order, altering only the amount Loan Store sought from McConnell. The district court reaffirmed the judgment for Loan Store in the amount of $1,313. This appeal followed.
D E C I S I O N
reviewing the findings of fact and conclusions of law made by a court sitting
without a jury, the judgment shall not be set aside unless the findings of fact
are clearly erroneous and the findings do not sustain the conclusions of law
argues that the district court erred in finding that a modification was made to
the Contract. It is appellant’s position
that the district court failed to take into consideration the statute-of-frauds
writing requirement for credit agreements, and therefore there was not a valid
modification to the Contract. “Credit
agreement” is defined as “an agreement to lend or forbear repayment of money,
goods, or things in action, to otherwise extend credit, or to make any other
financial accommodation.” Minn. Stat. § 513.33,
subd. 1(1) (2000). The statute also
states that “[a] debtor may not maintain an action on a credit agreement unless
the agreement is in writing, expresses consideration, sets forth the relevant
terms and conditions, and is signed by the creditor and the debtor.”
In Drewes v. First Nat’l Bank of Detroit Lakes, it was found that the
purpose of Minn. Stat. § 513.33 is to prevent fraud in credit claims. 461 N.W.2d 389, 392 (
Carlson v. Estes, 458 N.W.2d 123, 128 (
In this case, the district court found that appellant and respondent agreed to a remaining balance of $4,000, and not $16,459.03. This is akin to Carlson where the lender waived its claim for monetary value. As such, this modification would constitute a credit agreement under Minn. Stat. § 513.33, subd. 1(1). Even if we were to interpret the statute very narrowly, an agreement that would excuse remaining payment on the debt would fall under forbearing repayment of money. Appellant is correct that the Statute of Frauds is in play – but, the record before the district court showed that appellant sent respondent a coupon payment book requiring respondent to pay $125 per month. Since the original contract called for payments of $323 per month, the coupon book given to respondent reflected a radically different payment, and a schedule in accord with respondent’s sworn testimony. The record shows that respondent made timely payments by signed checks in the amount of $125 per month, or more, until she had paid over $2,500. There is no evidence in the record that any payments from respondent were rejected by appellant.
We can only conclude that the acceptance of payments (differing from the original agreement) by appellant, pursuant to a written coupon that appellant sent, constituted enough of a form of writing to satisfy the district court that the statute, when equitably construed, was satisfied. We note that several writings may be read together, and may constitute a sufficient memorandum to satisfy the requirements of the statute of frauds. See Carlson, 458 N.W.2d at 127 (finding that written agreements pertaining to the same transaction were to be considered together and could be found to constitute a credit agreement).
The district court’s findings of fact were proper and support its conclusion of law holding that the writing was sufficient to meet the statute of frauds credit agreement standards.
 McConnell did not retain a copy of the letter for herself, however, Loan Store’s attorney had the letter in his files.