This opinion will be unpublished and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


Marvin N. Christensen,


Gerald Jirava, et al.,

Filed December 7, 1999
Short, Judge
Dissenting, Anderson, Judge

Mahnomen County District Court
File No. C698178

Kenneth F. Johannson, Johannson, Rust, Fagerlund & Unkenholz, 407 North Broadway, P.O. Box 605, Crookston, MN 56716 (for respondent)

Charles A. Krekelberg, Tracey R. Lindberg, Krekelberg, Skonseng & Lindberg, P.L.L.P., 213 South Mill Street, Fergus Falls, MN 56537 (for appellants)

Considered and decided by Short, Presiding Judge, Willis, Judge, and Anderson, Judge.


U N P U B L I S H E D   O P I N I O N

SHORT, Judge

This action involves a promissory note given by Gerald and Debra Jirava (makers) to the Midwest Bank. Marvin Christensen (holder) sued makers for recovery of the principal balance and accrued interest. After the close of evidence, holder moved for a directed verdict. The trial court granted the motion. On appeal from the judgment and order denying a new trial, makers argue: (1) factual questions concerning affirmative defenses and amounts due under the note preclude a directed verdict; and (2) other evidentiary irregularities necessitate a new trial. We affirm.


A motion for a directed verdict presents a question of law regarding the sufficiency of the evidence to establish a fact question for the jury to decide. M.W. Ettinger Transfer & Leasing Co. v. Schaper Mfg., Inc., 494 N.W.2d 29, 34 (Minn. 1992); Minn. R. Civ. P. 50.01. On review from a directed verdict, we independently determine the sufficiency of the evidence. Nemanic v. Gopher Heating & Sheet Metal, Inc., 337 N.W.2d 667, 669 (Minn. 1983). Viewing the evidence in the light most favorable to the adverse party, a directed verdict will be sustained only if it clearly would be the duty of a trial court to set aside a contrary verdict as against the evidence or law of the case. Id. at 669-70 (citation omitted).


Makers argue the trial court erred by granting a directed verdict where the evidence supports their affirmative defenses of accord and satisfaction, waiver, estoppel, and negligence. See Minn. Stat. §§ 336.3-305, .3.306 (1998) (noting party who is not holder in due course takes subject to claims and defenses). Viewing the evidence favorable to the makers, the record demonstrates: (1) the promissory note’s unpaid principal is $61,742.00, with accrued interest of $69,485.93; (2) a bank loan officer told Gerald Jirava if he helped in collecting on the delinquent promissory note, "it would be a done deal"; (3) makers liquidated all collateral and applied the proceeds to the note; (4) Farmers Home Administration (FmHA) reduced their guarantee from 90% to 50% of the loan, and wrote the bank a check for 50% of the loan; and (5) the bank loan officer wrote a letter to FmHA, not to makers, that stated, "[t]his loan was settled with a reduced guarantee and a cash settlement."

Significantly, makers offered no evidence at trial that the bank settled the note obligations with them or that the bank chose to recover from FmHA under its guarantee in lieu of a lawsuit under the note against the makers for any deficiencies. See Roaderick v. Lull Eng’g Co., 296 Minn. 385, 389, 208 N.W.2d 761, 764 (1973) (recognizing accord and satisfaction may be implied only from circumstances that clearly and unequivocally indicate parties’ intention); Total Equip. Leasing Corp. v. LaRue Inv. Corp., 357 N.W.2d 347, 350 (Minn. App. 1984) (noting burden of proof for accord and satisfaction is on debtor who must prove parties objectively intended new promise would settle original claim), review denied (Minn. Feb. 19, 1985); see also Farnum v. Peterson-Biddick Co., 182 Minn. 338, 341, 234 N.W. 646, 648 (1931) (noting intention and knowledge are essential elements of waiver). In addition, there was no evidence that makers were induced to take or defer action to their detriment or that the bank owed makers a duty. See Ridgewood Dev. Co. v. State, 294 N.W.2d 288, 292 (Minn. 1980) (noting claim for estoppel requires party to demonstrate detrimental reliance); Thies v. St. Paul’s Evangelical Lutheran Church, 489 N.W.2d 277, 279 (Minn. App. 1992) (holding prima facie case of negligence requires party to show duty owed and neglect of duty). Finally, makers never challenged the claimed amount of principal and interest. Because makers failed to offer evidence on essential elements of their alleged defenses, the trial court properly directed a verdict for holder.


Makers also argue the trial court abused its discretion by refusing to admit the entire contract for sale of holder’s bank stock and oral agreements between holder and the purchaser of the bank. But entitlement to a new trial on grounds of improper evidentiary rulings depends on the complaining party demonstrating prejudicial error. Uselman v. Uselman, 464 N.W.2d 130, 138 (Minn. 1990). Because makers failed to demonstrate prejudicial error, the trial court properly declined to grant a new trial.



ANDERSON, Judge (dissenting)

I respectfully dissent from that portion of the majority opinion affirming the district court dismissal of appellant’s accord and satisfaction and waiver defenses.

As the majority recognizes, in viewing the evidence in a light most favorable to the appellants, the record reflects that appellant Gerald Jirava met with representatives of his bank and a statement was made to the effect that if he, appellant Jirava, would help in collecting on the government loan guarantee, "it would be a done deal." There is no dispute in the record that following this statement he did cooperate with the bank and also liquidated assets to help pay off the loan.

While the reference to a "done deal" is, to say the least, not a model of clarity, appellant Jirava would have absolutely no reason to cooperate with the bank unless the bank, in turn, was going to forego collection on all or part of the debt. Absent the bank’s commitment, as counsel for respondent conceded at oral argument, appellants would remain liable to the government agency insuring the loan at issue and thus appellants would have simply substituted one creditor for another. In short, there would be no reason for him to cooperate with the bank. And yet, in this case, appellant Jirava did cooperate, and a reasonable implication of the statement made to him, and his actions, is that he would be relieved of further liability if he was helpful to the bank in securing payment from the government agency.

This argument becomes particularly persuasive when examined in light of the letter written by a bank official to the government agency noting "[t]his loan was settled with a reduced guarantee and a cash settlement." Respondents rely on the fact that a copy of this letter was never sent to appellants and, indeed, a reasonable argument can be made that a failure to do so supports respondent’s argument that no agreement existed. But an equally reasonable argument can be made that the bank did not bother to send a copy of the letter to appellants because the deal had already been cut, appellants had been relieved of any further responsibility, and thus, there was no reason to send them a copy of the letter.

In addition, there is undisputed testimony in the record that the bank was in serious trouble with the government agency insuring this loan. Records had not been adequately documented. The bank official responsible for handling the file was unavailable. It is also undisputed that the loan was classified and appellants were unable to pay the loan off. Thus, from the bank’s perspective, collection on the government agency guarantee was absolutely critical. And apparently the cooperation of appellants was essential to collecting on the guarantee.

It is also worth noting that the bank itself has not sought to collect on this note but rather, as part of the transaction in which the bank was sold, assigned the note to its former president Marvin N. Christensen, the respondent in these proceedings. It is in Christensen’s name that this action is litigated.[1]

The evidence here is less than overwhelming. But the record contains sufficient evidence such that a jury could find an express agreement supporting the accord and satisfaction defense, Ladwig & Ladwig, Inc. v. Orlin Ladwig, Inc., 372 N.W.2d 408, 411 (Minn. App. 1985), or more likely, waiver by the bank of the right to collect on the note. Farnum v. Peterson-Biddick Co., 182 Minn. 338, 341, 234 N.W. 646, 648 (1931) (waiver is simply the intentional relinquishment of a known right).

The mere fact, however, that a defense is difficult to establish or the evidence is not clear, or that it is more likely than not that a jury will arrive at some other result is not the same as concluding that appellant should be deprived of jury deliberations on the issue. As this court noted in Beck v. American Sharecom, Inc., 514 N.W.2d 584, 587 (Minn. App. 1994), review denied (Minn. June 29, 1994):

A directed verdict is appropriate only in the clearest of cases where but one conclusion can be drawn from the facts, and the question for determination becomes a question of law for the court.

I do not believe that a review of the facts in this case leads to only one conclusion. Appellant’s theory that having secured the desperately needed assistance of appellant Jirava, the bank then entered into an accord and satisfaction, or, at a minimum, waived its right to collect from appellants, is not unreasonable and has sufficient support in the record to submit these issues to the jury. I would reverse and remand for retrial.

[1] Respondent Christensen concedes, as he must, that he is not a holder in due course and is subject to the defenses of appellants. Minn. Stat. § 336.3-302(a)(2).