FRESH LOOK PROBLEM UNPUBLISHED OPINIONS

Notes&Trends
Landmarks in the Law
Current developments in judicial law, legislation, and administrative action together with a foretaste
of emergent trends in law and the legal profession for the complete Minnesota lawyer.
Commercial and
Consumer Law
by Fred Miller
34
Environmental Law
by Vanessa Johnson
35
Family Law
by Jaime Driggs
36
Federal Practice
by Josh Jacobson
37
Intellectual Property
by Tony Zeuli
& Joe Dubis
38
Real Property
by Michael Kreun
39
Tax
by Morgan Holcomb
& Jessica Dahlberg
40
Torts & Insurance
by Jeff Mulder
42
COMMERCIAL AND
CONSUMER LAW
JUDICIAL LAW
n History repeats itself. Ever since
the Uniform Commercial Code wrote
a statute of frauds into the code, there
has been debate over whether it creates
more fraud than it prevents, and
whether it is a relic of past procedure
that enlightened law should discard as
many of the legal systems in the world
have done. See, e.g., United Nations
Convention on Contracts for the
International Sale of Goods Article 11.
American law has not agreed with discarding
the concept of the statute, as it
avoids disputes over whether there was
an agreement, and indeed the protection
of the statute’s concept was expanded
when a spate of “lender liability” cases
arose a while ago. As a result, much of
the history under the UCC of trying to
avoid the statute is being repeated.
Exhibit One is Figgens v. Wilcox, ___
N.W.2d ___, No. A14-1358 (Minn.
2016). Figgens owned a business and
received a loan from Grand Rapids State
Bank. That loan matured in late 2009
and a balloon payment was due. Figgens
entered into negotiations to refinance
instead, and allegedly the bank’s CEO
advised Figgens that he need not pay
while negotiations were ongoing. Figgens
also sought financing at Woodland
Bank, and Woodland contacted Grand
Rapids and was informed Figgens had
a poor payment record and was delinquent.
This allegedly was false. As a
result Woodland backed off and Figgens
alleged that allowed Grand Rapids
to charge a higher rate, so he sued for
intentional misrepresentation. Grand
Rapids moved to dismiss the suit on
the basis of Minn. Stat. §513.33 (2014)
enacted in 1985 in response to the thenfarm
crisis.
Minn. Stat. §513.33 provides in
part that a debtor may not maintain an
action on a credit agreement unless the
agreement is in writing… and is signed
by the creditor and the debtor. Figgens
in defense asserted the statute did not
apply because:
(1) there was no enforceable agreement
as no consideration; and
(2) promissory estoppel.
The court thought the use of “agreement”
as opposed to “contract” showed
an intent to address a broader set of
interactions than those just qualifying
as enforceable contracts citing legal
dictionaries. It then had no trouble
finding a “credit agreement” existed by
the actions of the parties. While the
court did not say so, this seems sound in
comparison to the UCC as UCC §2-201
uses “contract” and the Code makes the
same differentiation between “agreement”
(UCC §1-201(b)(3)) and “contract”
(UCC §1-201(b)(12)). Whether it
is wise policy is perhaps another matter.
The court also refused to create a
judicial exception for promissory estoppel
given that the statute was plain,
clear, and unambiguous. In reference to
the UCC, that has not stopped court use
of estoppel. See, e.g., Hitzke v. Easterday,
285 Wis. 2d 807, 701 N.W.2d 654 (Wis.
Ct. App. 2005); but see, Siesta Sol, LLC
v. Brooks Pharmacy, Inc., 617 F. Supp.2d
38 (D.R.I. 2007). The unsuccessful
amendments to UCC Article 2 in the
amended Official Comment to amended
§2201 encouraged the estoppel exception,
which may well be one reason for
the lack of success of that effort, and
evidences the continued adherence
to the concept of a statute of frauds in
American law. Whether it is consistent
with the more relaxed approach of the
Minnesota statute is a question worth
consideration.
FRED MILLER
Retired G.L. Cross Research Professor,
University of Oklahoma
fmiller@lindquist.com
34 Bench&Bar of Minnesota s December 2016 www.mnbar.org