This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C5-97-469

Mylon E. Ash,

Respondent,

vs.

Marquette Bank, NA, f/k/a Marquette Bank Lakeville,

f/k/a First Lakeville Bank,

Appellant.

Filed July 29, 1997

Reversed and remanded.

Parker, Judge

Dakota County District Court

File No. CX9610476

Robert J. Vose, David K. Nightingale, Bernick & Lifson, P.A., The Colonnade, Suite 1200, 5500 Wayzata Boulevard, Minneapolis, MN 55416 (for respondent)

Steven J. Quam, David R. Marshall, John Koneck, Fredrikson & Byron, P.A., 1100 International Centre, 900 Second Avenue South, Minneapolis, MN 55402 (for appellant)

Considered and decided by Harten, Presiding Judge, Parker, Judge, and Davies, Judge.

U N P U B L I S H E D O P I N I O N

PARKER, Judge

First Lakeville Bank appeals the district court's entry of summary judgment. The district court ruled that a February 1996 payment agreement executed by respondent Mylon Ash was not supported by consideration and Ash was entitled to restitution of $4,800 in payments. We reverse and remand.

FACTS

Respondent Mylon Ash borrowed $50,000 from appellant First Lakeville Bank on August 28, 1984. The loan was secured by a mortgage on property owned by Ash. Subsequently, Ash defaulted on the note, the bank foreclosed the mortgage, and bid the full amount of the mortgage debt. On October 17, 1990, Ash was indicted for bank fraud. The charges were based on Ash's overstating the purchase price of the foreclosed property given as security for the loan. Ash entered a plea agreement with the U.S. Attorney and agreed to pay the bank $57,135.83 as restitution. Ash was placed on probation for five years and made sporadic restitution payments during that time. Ash's probation expired on February 3, 1996, and, at that time, he still owed $49,055.83, plus accrued interest, in restitution. On February 13, 1996, Ash and the bank executed a payment agreement wherein Ash acknowledged the indebtedness and agreed to pay the bank $35,000. Ash paid $4,800 under the February 1996 payment agreement before informing the bank that he would no longer make payments.

D E C I S I O N

An appeal from summary judgment raises two questions for an appellate court: (1) are there any genuine issues of material fact; and (2) did the district court misapply the law? State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). Evidence must be viewed in favor of the party opposing summary judgment. Abdallah, Inc. v. Martin, 242 Minn. 416, 424, 65 N.W.2d 641, 645 (1954).

The district court concluded that the February agreement lacked consideration and was unenforcable. The court's conclusion was based on its erroneous finding that

13. On February 13, 1996, Ash and [bank] entered into a Payment Agreement wherein Ash agreed to pay the remaining balance due on the August 28, 1984 Note in the amount of $49,055.83.

The parties' February 1996 agreement settled a disputed claim of $49,055.83, plus accrued interest, for $35,000. In return, the bank agreed to forbear its legal remedies. The district court's failure to recognize this compromise as consideration that could support the parties' agreement was an error of law. Hillmeyer v. Watz, 415 N.W.2d 89, 92 (Minn. App. 1987) (a claim that is disputed or in doubt can be consideration for an agreement to compromise the claim), review denied (Minn. Jan. 28, 1988).

The district court also erroneously concluded that the six-year statute of limitations had run on the bank's civil fraud claim. The court found that the bank knew or should have known of its claim by October 17, 1990. Assuming this finding to be correct, at the time of the parties' February 1996 payment agreement, the bank still had eight months remaining to bring a claim. We hold that the issues of the bank's good faith and reasonable grounds to believe the validity of its claim on the date the parties entered into their payment agreement are jury questions precluding summary judgment. Stanley Trucking Co. v. National Indem. Co., 271 Minn. 311, 315, 136 N.W.2d 101, 104 (1965).

The parties' February 1996 payment agreement also states that the criminal restitution order is evidence of Ash's obligation to pay. This language contradicts Ash's claim that the extinguished mortgage debt was the sole consideration for the agreement and presents a further fact issue precluding summary judgment.

In view of our disposition, we need not address the bank's procedural challenges.

Reversed and remanded.