Kohanowski v. Burkhardt
2012 ND 199
| N.D. | 2012Background
- Kohanowski lent $10,000 to Shaun Kohanowski to help purchase a home; Burkhardt was present and overheard the loan discussion.
- Alleged repayment terms: 36 monthly installments over three years at 7.5% interest, with escalating payments (roughly 215 first year, 315 second year, 415 third year).
- In 2007 Burkhardt paid two $215 checks from the couple’s joint account; no further payments after early 2007.
- September 2010 Shaun Kohanowski sent a Letter of Intent acknowledging the debt and offering to pay half and assist collecting the other half from Burkhardt.
- October 2010 Kohanowski sued Burkhardt; district court awarded damages and costs; judgment totaled $12,256.94; Burkhardt appealed arguing the oral loan was barred by the statute of frauds.
- Court reverses, holding the oral loan agreement is barred by the statute of frauds under N.D.C.C. § 9-06-04(1) because it by its terms could not be performed within one year.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the oral loan agreement falls within the statute of frauds | Kohanowski argues the contract could be performed within a year; lack of a written note should not bar the claim | Burkhardt argues the agreement, by its terms, could not be performed within one year and thus is barred | Barred by the statute of frauds |
| Whether partial performance takes the contract out of the statute of frauds | Partial payments by Burkhardt could remove the contract from the statute | Partial performance must unmistakably point to the existence of the oral contract | Partial performance not established; does not remove the contract from the statute |
| Whether the contract’s terms as stated require performance beyond one year | Terms allowed installment payments over three years; could be within one year if payoff possible | Express terms show performance over more than one year | Express terms show not performable within one year; barred |
Key Cases Cited
- Bergquist-Walker Real Estate, Inc. v. William Clairmont, Inc., 333 N.W.2d 414 (N.D. 1983) (statute of frauds applies when terms do not specify time; open-ended may still be within frauds if performance within year)
- Oster v. First State Bank of Goodrich, 500 N.W.2d 593 (N.D. 1993) (loan/open-ended line of credit cases; performance timeframe matters)
- Rickert v. Dakota Sanitation Plus, Inc., 2012 ND 37, 812 N.W.2d 413 (N.D. 2012) (applies to contracts which by express terms cannot be fully performed within one year)
- Thompson v. North Dakota Workers’ Comp. Bureau, 490 N.W.2d 248 (N.D. 1992) (discussion of part performance and statute of frauds)
- Delzer v. United Bank of Bismarck, 459 N.W.2d 752 (N.D. 1990) (statute of frauds and performance within one year)