Advantage Financial, LLC, Appellant,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A21-1215

Advantage Financial, LLC,
Appellant,

vs.

Janice C. Marschel as Trustee for the Janice C. Marschel Revocable Trust, et al.,
Respondents.

Filed May 16, 2022
Reversed and remanded
Reilly, Judge

Wright County District Court
File No. 86-CV-20-5885

Ryan J. Hatton, Gurstel Law Firm, P.C., Golden Valley, Minnesota (for appellant)

Michael C. Glover, Michael J. Pfau, De Witt LLP, Minneapolis, Minnesota (for
respondents)

Considered and decided by Smith, Tracy M., Presiding Judge; Connolly, Judge; and
Reilly, Judge.
NONPRECEDENTIAL OPINION
REILLY, Judge
In this appeal, appellant challenges the di strict court’s order granting respondents’
motion to vacate the judgment against them. Appellant also argues that remand is
necessary to consider a motion for judgment against garnishee. Because the district court
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abused its discretion in gran ting relief under Minn. R. Civ. P. 60.02(f), we reverse and
remand.
FACTS
In 2016, respondents Janice C. Marschel, as trustee for the Janice C. Marschel
revocable trust, and Kevin Schmidt, indivi dually and as trustee for the trust, opened
commodity trading accounts with appellant Advantage Financia l LLC. In 2018,
respondents’ accounts fell below the minimu m margin requirements, and respondents
failed to pay the negative balance. Appellant sued respondents in Illinois federal district
court for breach of contract, seeking repayment of a negative margin balance well over two
million dollars.
On November 19, 2020, the parties reac hed a settlement agreement. Under the
settlement agreement, respondents agreed to pay appellant $50,000 by December 1, 2020,
and execute a promissory note in the amount of $307,500. Respondents also agreed that if
they failed to make the initial payment, appellant “will be immediately entitled to entry of
judgment . . . for all amount s due and owing to [appellant ] from [respondents].” The
settlement agreement referenced three confessions of judgment that were executed around
the same time as the agreement. In the first confession of judgment, respondents agreed to
the following: (1) respondents confess to judgm ent for $50,000 plus all amounts owed to
appellant under the note plus fees; (2) if respondents fail to pay $50,000 by December 1,
appellant may file the confession with the affidavit setting forth the amount due; (3) the
district court is allowed to immediatel y enter judgment for appellant; and (4) no
circumstances will prevent appellant from obtaining judgment. The signature page of the
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confession was signed by bo th respondents, but some dates were not completed. 1 T he
second and third confessions of judgment included additional terms that are not at issue in
this appeal.
Respondents did not deliver the $50,000 initial payment to appellant by December
1, 2020. Respondents tried to renegotiate the agreement, but appellant declined. Appellant
filed the first confession of ju dgment with the district c ourt on December 22, 2020, but
mistakenly attached the verification page for the third confession of judgment. The district
court administrator sent appellant a deficien cy notice, and appellant filed the correct
verification page for the first confession of judgment. On December 31, 2020, the district
court administratively entered judgment against respondents in the amount of $362,587.92.
In mid-January 2021, respondent Schmidt wired $25,000 to his attorney. Appellant
sent a garnishment notice to the law firm and later filed a motion for judgment against
garnishee. Respondents moved to quash the garnishment and vacate the judgment against
them under Minn. R. Civ. P. 60.02(a) and 60.02 (f). Respondents argued that Schmidt
suffered serious medical issues during and following settlement negotiations and his failure
to pay the $50,00 0 constituted excusable neglect under rule 60.02(a). 2 Respondents also

1 On the signature page of the first confession, respondent Marschel’s signature was dated
“November, 2020” and her signature was notar ized on November 25, 2020. Respondent
Schmidt’s signature is dated November 25, 2020, and his signature was notarized on “this
___ day of November, 2020.” The corresp onding verification pa ge was signed by both
respondents and dated “November, 2020.”
2 During settlement negotiations in mid-Oct ober 2020, respondent Schmidt was in the
hospital for two weeks, being treated for a serious medical condition while in the intensive
care unit. Schmidt was rel eased from the hospital on October 27, 2020 and signed the
settlement agreement weeks later on November 19, 2020.
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argued that the first confession of judgment did not comply with th e law and should be
vacated under rule 60.02(f).
The district court granted respondents’ mo tion to vacate judgment under Minn. R.
Civ. P. 60.02(f). The district court reasoned th at “the equities weigh heavily in favor of
[respondents] for relief from the judgme nt entered on December 31, [2020]. The
Confession of Judgment did not meet the st atutory requirements for administrative entry
of judgment.” Because the district court vaca ted the judgment, the district court declined
to address appellant’s motion for judgment against garnishee.
This appeal follows.
DECISION
Appellant challenges the district court’s decision to vacate the judgment against
respondents under Minn. R. Civ. P. 60.02(f). Under this rule, a district court may relieve
a party from a final judgment for “[a]ny other reason justifying relief from the operation of
judgment.” Minn. R. Civ. P. 60.02(f). “The decision to vacate judgment under rule 60.02
rests within the district court’s discretion and will not be reversed absent an abuse of that
discretion.” Meyer v. Best W. Seville Plaza Hotel , 562 N.W.2d 690, 694 (Minn. App.
1997), rev. denied (Minn. June 26, 1997). The district court abuses its discretion if it “acts
under a misapprehension of the law or when its factual findings are clearly erroneous.”
Gams v. Houghton, 884 N.W.2d 611, 620 (Minn. 2016) (quotations omitted).
I. The district court misapplied the law of judgments.
The district court vacated the judgment under Minn. R. Civ. P. 60.02(f) after finding
that the confession submitted by appellant was invalid because it was not properly verified
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by respondents. Appellant argues that the di strict court erred in vacating the judgment
against respondents because the district court misapplied the law of judgments.
The statute governing confessions of judgment reads:
A judgment for money due or to become due, or to secure any
person against a contingent liability on behalf of the defendant,
or for both, may be entered in the district court by confession
and without action, upon filing with the court administrator a
statement, signed and verified by the defendant, authorizing
the entry of judgment for a specified sum . If the judgment be
for money due or to become due, the writing shall state
concisely the facts out of which the debt arose, and show that
the sum confessed is justly due or to become due.

Minn. Stat. § 548.22 (2020) (emphasis added). A judgment is valid when it “compl[ies]
with the provisions of Minn. Stat. § 548.22 . . . , which requires a verified statement by the
defendant debtor setting out facts concisely showing the sum confessed is justly due or to
become due.” Miller v. Shugart, 316 N.W.2d 729, 735 n.6 (Minn. 1982).
The district court found that the confessi on was not properly ve rified because the
signature page of the first confession of judgment did not have complete dates and because
appellant initially submitted mism atched documents. The dist rict court found that the
judgment against respondents should not have been entered administratively, but instead
required a hearing because of the improper verification.
Appellant argues that the statute governin g confessions requires only a signed and
verified statement to obtain a judgment and that the signed and verified statement need not
be dated or notarized to be valid. We agree. The sole statutory requirements for a
confession of judgment include “a statemen t, signed and verified by the defendant,
authorizing the entry of judgment for a specified sum.” Minn. Stat. § 548.22. The statute
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does not require the signed and verified statement to have a complete date, or even be dated
at all—although complete dates would be a best practice.
Here, appellant filed the confession of judg ment laying out the facts leading to the
settlement agreement. The c onfession stated that the sett lement agreement was dated
November 19, 2020 and required respondents to execute and deliver a secured promissory
note to pay appellant $307,500. The confession also stated that respondents agreed to pay
appellant an initial sum of $50,000 by December 1, 2020, and that if respondents failed to
pay $50,000 by that date, appellant “shall immediately be entitled to file this First
Confession with a court.” The confession in cluded a separate page titled “verification,”
which included the coun ty in which the confession was signed, both respondents’
signatures, and the date of “November, 2020.” While the verification page did not specify
the exact date that responden ts signed it, the verification page and confession met all
necessary statutory requirements: statemen t of facts, signed and verified by the
respondents, authorizing judgment for a specified sum.
Additionally, while appellant at first s ubmitted mismatched documentation to the
district court when filing the confession, appellant quickly corrected the mistake by filing
the correct verification page. The revise d filing satisfied all necessary statutory
requirements, and the verification pages matched the confession of judgment. The district
court administrator accepted th e amended filing a nd properly en tered judgment against
respondents.
Relief under Minn. R. Civ. P. 60.02 (f) is available only in “exceptional
circumstances.” Buck Blacktop, Inc. v. Gary Contracting and Trucking Co., 929 N.W.2d
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12, 20 (Minn. App. 2019) (quotation omitted). The facts here do not present extraordinary
circumstances. Instead, the parties entered into a settleme nt agreement after years of
litigation and the agreement ou tlined the amount owed and when the amounts were due
and included signatures of both respondents. Respondents failed to make the initial
payment on December 1, thus au thorizing appellant to file the first confession with the
district court.
Respondents argue that Schmidt’s hospitalization coupled with the failure to file the
correct verification page with the confe ssion of judgment amounte d to extraordinary
circumstances. But respondent Schmidt sign ed the settlement agre ement weeks after his
hospitalization, and as stated above, the confession of judgme nt was properly verified.
“The burden of proof in a proceeding under Rule 60.02 is on the party seeking relief.” City
of Barnum v. Sabri, 657 N.W.2d 201, 205 (Minn. App. 2003). Respondents presented the
district court with no extraordinary facts, nor could they show that the agreement violated
the law of confessions. Thus, because the dist rict court abused its discretion in vacating
the judgment against respondents under rule 60.02(f), we reverse and remand to the district
court to enter judgment for appellant.3

3 Appellant also argues that the district cour t erred in granting relief under rule 60.02(f)
because respondents failed to es tablish a meritorious defense. Because we conclude the
district court abused its discretion by misa pplying the law of judgments, appellant’s
remaining argument is moot.
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II. Remand is also appropriate for the di strict court to consider appellant’s
pending motion for judgment against garnishee.

Because the district court vacated the judgment against respondents under rule
60.02(f), the district court did not address appellant’s cross-motion for judgment against
garnishee. On remand, the district court sh all address appellant’s motion. Whether to
reopen the record for purposes of this motion shall be discretionary with the district court.
Reversed and remanded.