IN COURT OF APPEALS
James R. Bresnahan,
Cochrane & Bresnahan, P.A.,
Filed April 7, 1998
Dissenting, Short, Judge
Ramsey County District Court
File No. CX-93-003399
James J. Schumacher, 390 West Cottage Avenue, St. Paul, MN 55117 (for appellant)
Considered and decided by Short, Presiding Judge, Amundson, Judge, and Harten, Judge.
Appellant argues that the district court improperly included collection costs (mainly attorney fees) in its calculation of judgment against appellant resulting from a confession of judgment. Respondent argues that appellant waived such claims in its warrant of attorney. We remand for findings regarding the statutory provisions for the award of costs.
On January 20, 1995, the parties settled by executing a confession of judgment in favor of Midway for $525,908.25, payable on or before August 8, 1995. Appellant failed to pay the sum by that date and Midway moved the district court for administrative entry of judgment for the remaining principal, interest, and collection costs. Appellant argued that the confession of judgment did not comply with statutory law and that it was ambiguous regarding Midway's entitlement to costs. The district court held a hearing on these points and determined that the confession of judgment complied with the statute and that it entitled Midway to costs for collection. Judgment in favor of Midway was entered, in the sum of $145,221.24: $93,776.68, the remaining principal on Cochrane's loan; $3,603.34, interest; and $47,841.22, collection costs (which were mainly attorney fees). This appeal followed.
Cochrane & Bresnahan, P.A. further empowers Murnane, Conlin, White & Brandt Professional Association, Attorneys at Law, or any other attorney designated by Midway to confess judgment against Cochrane & Bresnahan, P.A., without hearing or process, in favor of Midway, and to waive all errors which may intervene or occur in such proceeding, and consents to and authorizes execution to be issued on such Judgment.
Because confessions of judgment are intended to expediently settle matters, particularly those of debt, and to end costly litigation, such waivers are commonly used in conjunction with them. There is no indication that the waiver was not voluntarily, intelligently, and knowingly made, and therefore it is valid. See Hutson v. Christensen, 295 Minn. 112, 118, 203 N.W.2d 535,538 (1972) (commenting on D. H. Overmyer Co. Inc. v. Frick Co., 405 U.S. 174, 92 S. Ct. 775 (1972), in which the Supreme Court has held that such waivers are not per se violative of due process rights). While the district court agreed with Midway that appellant waived its right to object to the entry of judgment, it heard appellant's objections. Similarly, while we agree that the waiver was valid, we will hear appellant's challenge.
The district court stated that the costs "were not charged back to Cochrane & Bresnahan, but rather were properly deducted to arrive at the net proceeds as provided under the Settlement Agreement." However, the settlement agreement never specified collection costs would be subtracted in calculating net proceeds.
We therefore look to statutory authorization for the award of costs. Minnesota law authorizes the award of costs (including reasonable attorney fees) if the party charged acted in bad faith, asserted a frivolous claim that is costly to the other party, asserted an unfounded position in order to delay the proceedings or to harass, or committed fraud upon the court. Minn. Stat. § 549.21 (1996). Here, however, there were no findings that Cochrane behaved in any fashion outlined by section 549.21, only that the collection costs were "reasonable and necessary."
We remand to the district court to make findings regarding whether Cochrane's actions fell under section 549.21; if they do not, the award of collection costs is inappropriate.
SHORT, Judge (dissenting).
I respectfully dissent. By agreeing to "waive all errors," "without hearing or process," and authorizing "execution to be issued on such judgment," the legally trained appellants waived their rights to object to the entry of judgment under the express terms of the confession of judgment and warrant of attorneys. See Minn. Stat. § 548.22 (1996) (providing judgment may be entered upon filing plea of confession with court); Atwater v. Manchester Sav. Bank, 45 Minn. 341, 351, 48 N.W. 187, 190 (1891) (holding statements for confessions of judgment adequate if states facts sufficient to enable other creditors to investigate transaction and to form opinion of honesty of judgment); see also Coolbaugh v. Roemer, 30 Minn. 424, 427, 15 N.W. 869, 870 (1883) (holding judgment by confession valid and effectual between parties to it, though statement of facts upon which it was entered deemed insufficient to answer statutory requirements). In addition, the trial court's finding that Midway's collection costs are reasonable and necessary is not clearly erroneous. See Minn. R. Civ. P. 52.01 (stating findings of fact will not be set aside unless clearly erroneous). Under these circumstances, the trial court did not abuse its discretion in awarding judgment in Midway's favor.