This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).






The Loan Store,





Latanya McConnell,



Filed December 5, 2006


Randall, Judge


Hennepin County District Court

File No. AC 05-11208


Chad A. Kelsch, Molly M. Gill, Leonard, O’Brien, Spencer, Gale & Sayre, Ltd., 100 South Fifth Street, Suite 2500, Minneapolis, MN 55402 (for appellant)


Latanya McConnell, 6920 Humboldt Avenue North, Apt. 302, Brooklyn Center, MN 55430 (pro se respondent)



            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 Hennepin County Conciliation Court seeking a deficiency judgment for breach of the Contract.  Loan Store subsequently dismissed Davis as a defendant.  Later, Loan Store regained possession of the vehicle and sold it for $1,612, applying the proceeds to the principal balance owed. 

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.[1]  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.


            When 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 and judgment.  Minn. R. Civ. P. 52.01.  A finding is clearly erroneous only if the reviewing court is “left with the definite and firm conviction that a mistake has been made.”  Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn. 1999) (quotation omitted).  Also, the appellate court defers to credibility determinations made by the district court.  Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988).

Appellant 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.”  Id., subd. 2 (2000). 

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 (Minn. App. 1990) (“[R]equiring claims by debtors to be based on written credit agreements does not benefit a small interest group, but is supported by the significant legislative purpose of protecting institutions and their depositors against fraudulent claims.”), review denied (Minn. Dec. 20, 1990).  Appellant claims that this purpose would not be furthered if respondent were allowed to raise oral modification as a defense to the Contract.  

Carlson v. Estes, 458 N.W.2d 123, 128 (Minn. App. 1992), addressed the issue of whether an alleged oral agreement was a credit agreement under the statute.  The court found that where the alleged agreement, lowering the interest rate on the loan balance, went to the very essence of the financial relationship between the parties, it was most certainly a financial accommodation.  Id.  Where the lender waived a claim to some monetary value, it clearly constituted an agreement to forbear repayment of money, thus making it a credit agreement subject to Minn. Stat. § 513.33, subd. 1(1).  Id.

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.


[1] McConnell did not retain a copy of the letter for herself, however, Loan Store’s attorney had the letter in his files.