Affirmative Defenses (Minn. R. Civ. P. 8.

03)
Posted Thu, Nov 11, 2010 05:56:22 PM

Affirmative Defenses (Minn. R. Civ. P. 8.03)

8.03 AFFIRMATIVE DEFENSES

In pleading to a preceding pleading, a party shall set forth affirmatively (1) accord and satisfaction, (2)
arbitration and award, (3) assumption of risk, (4) contributory negligence, (5) discharge in bankruptcy,
(6) duress, (7) estoppel, (8) failure of consideration, (9) fraud, (10) illegality, (11) injury by fellow
servant, (12) laches, (13) license, (14) payment, (15) release, (16) res judicata, (17) statute of frauds,
(18) statute of limitations, (19) waiver, and (20) any other matter constituting an avoidance or
affirmative defense. When a party has mistakenly designated a defense as a counterclaim or a
counterclaim as a defense, the court, on such terms as justice may require, shall treat the pleading as if
there had been a proper designation.

(1) Accord and Satisfaction

Accord and satisfaction is an affirmative defense to a breach of contract enumerated in Minnesota
Rules of Civil Procedure 8.03. All affirmative defenses, including accord and satisfaction, must be
stated in a pleading. Minn. R. Civ. P. 8.03. The most common use of an affirmative defense is in a
defendant’s Answer to a Complaint.

In analyzing the definition of accord and satisfaction, Minnesota courts have held “accord is ‘a
contract in which a debtor offers a sum of money, or some other stated performance, in exchange for
which a creditor promises to accept the performance in lieu of the original debt.’” Nelson v. Am.
Family Ins. Group, 651 NW2d 499, 512 (Minn. 2002) quoting Webb Bus. Promotions, Inc. v. Am.
Elecs. & Entm’t Corp., 617 NW2d 67,72 (Minn. 2000) (emphasis added). And “[s]atisfaction is the
performance of the accord, generally acceptance of money, which operates to discharge the debtor’s
duty as agreed to in the accord.” Nelson, 615 NW2d at 512 quoting Webb, 617 NW2d at 72 (emphasis
added).

The purpose of accord and satisfaction was to promote dispute resolution without the need for judicial
intervention. Nelson, 615 NW2d at 512. Accord and satisfaction allows the creditor to accept an
alternate form of payment, one different than originally agreed upon, and discharges the debtor from all
debt owed to the creditor. Id.

For a party to successfully claim the affirmative defense of accord and satisfaction to a breach of
contract claim, the party must prove “(1) the party, in good faith, tendered an instrument to the claimant
as full satisfaction of the claim; (2) the instrument or an accompanying written communication
contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of
the claim; (3) the amount of the claim was unliquidated or subject to a bona fide dispute; and (4) the
claimant obtained payment of the instrument.” Id. The four-step process established by the Supreme
Court of Minnesota in Nelson basically states that the debtor and claimant agreed on an amount that the
debtor could pay the claimant to satisfy the debtor’s debt, the claimant put into writing his satisfaction
with the agreed upon amount, and the payment was actually received by the claimant. All four steps
must be satisfied in order to be successful on an accord and satisfaction defense. See AgCountry Farm
Credit Servs. v. Oelke, 2005 Minn. App. Unpub. LEXIS 171 (Minn. App. August 16, 2005) (holding
since creditor did not agree that payment would satisfy full satisfaction of the claim, steps (1)-(3) were
not satisfied, and therefore debtor could not be successful on an accord and satisfaction defense).

(2) Arbitration and Award

Arbitration and award is an affirmative defense to a breach of contract enumerated in Minnesota Rules
of Civil Procedure 8.03. All affirmative defenses, including arbitration and award, must be stated in a
pleading. Minn. R. Civ. P. 8.03. The most common use of an affirmative defense is in a defendant’s
Answer to a Complaint.

Arbitration is a form of dispute resolution that can be an attractive alternate to the judicial system
because of its low cost and ability to resolve disputes quickly. Minnesota statue states arbitration is a
“valid, enforceable, and irrevocable” method of resolving controversies, including contract disputes.
Minn. Stat. § 572.08 (2009).

If a party claims the affirmative defense of arbitration and award, the party is expressly stating that the
controversy should be resolved in arbitration and not in the judicial system. The affirmative defense of
arbitration and award must be in the party’s pleading, “[f]ailure to do so may constitute waiver of the
defense.” West St. Paul Federation of Teachers v. Independent School District No. 197, West St. Paul,
Minnesota, 713 N.W.2d 366, 377 (Minn. App. 2006). Minnesota courts will reject a party’s claim of
arbitration if the party participates in judicial litigation first and then claims the affirmative defense of
arbitration and award at a later time. See Driveway Design, LLC, Appellant, vs. Johnson and Johnson
Land Development, LLC, et al., 2009 Minn. App. Unpub. LEXIS 658 (Minn. App. June 16, 2009)
(denying appellant’s claim to arbitration after it filed an Answer without claiming the affirmative
defense of arbitration and award).

If a party pleads the affirmative defense of arbitration and award, the court will consider a motion to
compel arbitration, which will effectively dismiss the judicial action and send the dispute to arbitration.
When considering a motion to compel arbitration, the court will look to “(1) whether a valid arbitration
agreement exists, and (2) whether the dispute falls within the scope of the arbitration agreement.”
Amdahl, et al., v. Green Giant Company, d/b/a the Pillsbury Company, 497 N.W.2d 319, 322 (Minn.
App. 1993).
(3) Assumption of Risk
Assumption of risk is an affirmative defense to a breach of contract enumerated in Minnesota Rules of
Civil Procedure 8.03. All affirmative defenses, including assumption of risk, must be stated in a
pleading. Minn. R. Civ. P. 8.03. The most common use of an affirmative defense is in a defendant’s
Answer to a Complaint.

Assumption of risk is “[t]he principle that one who takes on the risk of loss, injury, or damage cannot
maintain an action against a party that causes the loss, injury, or damage.” Black’s Law Dictionary, 143
(9th Ed. 2009). The Minnesota Supreme Court defined assumption of risk as “the defendant owes a
limited duty of care to the plaintiff with respect to the risk incident to their relationship.” Olson v.
Hansen, 216 N.W.2d 124, 127 (Minn. 1974).

The Olson court explained primary assumption of risk is available “only where parties have voluntarily
entered a relationship in which plaintiff assumes well-known, incidental risks.” Id. In Wu v. Shattuck-
St. Mary's Sch., 393 F.Supp. 2d 831, 836 (D. Minn. 2005), the court declared “[p]rimary assumption of
risk is rarely applied by Minnesota courts.”

A common example of a party voluntarily encountering a known or appreciated danger is when parents
sign their children up for youth sports and sign a waiver contract (also known as exculpatory contracts).
In Wu, the mother signed a waiver contract to allow her daughter to participate in extracurricular
activities at the high school, and the daughter was subsequently injured while playing golf. 393
F.Supp.2d at 833-836. In denying the high school’s affirmative defense of assumption of risk, the court
held the high school was not free from liability because of “enhancement of risk, negligent
maintenance of a facility, or negligent supervision of a sporting activity.” Id. at 837. The Wu court was
cautious with its decision to invalidate the waiver contract, but reasoned that assumption of risk “does
not bar a claim where a defendant's conduct has enhanced the risk of an activity.” Id. at 836.

(4) Contributory Negligence

Contributory negligence is an affirmative defense to a breach of contract enumerated in Minnesota
Rules of Civil Procedure 8.03. All affirmative defenses, including contributory negligence, must be
stated in a pleading. Minn. R. Civ. P. 8.03. The most common use of an affirmative defense is in a
defendant’s Answer to a Complaint.

Contributory negligence is a claim by a defendant that the “plaintiff’s own negligence … played a part
in causing the plaintiff’s injury and that is significant enough to bar the plaintiff form recovering
damages.” Black’s Law Dictionary, 1134 (9th Ed. 2009). The defendant is shifting the blame from
himself to the plaintiff.

However, Minnesota Statute states contributory negligence does not bar recovery “if the contributory
fault [by plaintiff] was” less than defendant’s fault. Minn. Stat. § 604.01. The Statute further states,
“any damages allowed must be diminished in proportion to the amount of fault attributable to the
person recovering [plaintiff].” Id.

(5) Discharge in Bankruptcy

Discharge in bankruptcy is an affirmative defense to a breach of contract enumerated in Minnesota
Rules of Civil Procedure 8.03. All affirmative defenses, including discharge in bankruptcy, must be
stated in a pleading. Minn. R. Civ. P. 8.03. The most common use of an affirmative defense is in a
defendant’s Answer to a Complaint.
A party who files for bankruptcy is named a “debtor.” When a debtor initiates a bankruptcy proceeding,
the Bankruptcy Code restricts all proceedings against the debtor’s property. Bernick v. Caboose
Enterprises, Inc., 395 N.W.2d 412, 413 (Minn. App. 1986). This is also called a stay in judicial
proceedings. The affirmative defense of discharge in bankruptcy will protect a debtor from being
named as a defendant in a civil action. The public policy reasons behind the stay in judicial proceedings
for the debtor are it allocates the “debtor a breathing spell from his creditors. It stops all collection
efforts, all harassment, and all foreclosure actions. It permits the debtor to attempt a repayment or
reorganization plan, or simply to be relieved of the financial pressures that drove him into bankruptcy.”
Id at 414.

A court, State or federal, does not have discretion to hear a case involving a debtor who has initiated a
bankruptcy proceeding. The Bankruptcy Code strips all courts of jurisdiction to hear actions against the
debtor. Id. See Borg-Warner Acceptance Corp. v. Hall, 685 F.2d 1306, 1308 (11th Cir. 1982) (“Actions
taken in violation of the automatic stay are void and without effect”). A defendant who has initiated a
bankruptcy proceeding can successfully claim discharge in bankruptcy as an affirmative defense to any
breach of contract lawsuit.

(6) Duress
Duress is an affirmative defense to a breach of contract enumerated in Minnesota Rules of Civil
Procedure 8.03. All affirmative defenses, including duress, must be stated in a pleading. Minn. R. Civ.
P. 8.03. The most common use of an affirmative defense is in a defendant’s Answer to a Complaint.

A party claiming duress must prove the other party induced the contract by threat with either actual
force or an unlawful threat of death or bodily harm. If an aggrieved party’s manifestation of assent is
induced by an improper threat by the other party that leaves the aggrieved party no reasonable
alternative, the contract is voidable by the aggrieved party. Restatement, Second of Contracts § 175. In
plain terms, if one party to a contract (1) threatens the other party and (2) leaves the other party with no
reasonable alternative, the contract is voidable. A voidable contract (also known as an “avoidable
contract”) is a contract in which the aggrieved party has the option to either enforce the contract or
cancel the contract.

The Restatement defines an improper threat to a fair contract as “if (a) what is threatened is a crime or
a tort, or the threat itself would be a crime or a tort if it resulted in obtaining property; or (b) what is
threatened is a criminal prosecution; or (c) what is threatened is the use of civil process and the threat
is made in bad faith; or the threat is a breach of the duty of good faith and fair dealing under a contract
with the recipient.” Restatement, Second of Contracts § 176(1). The Restatement defines an improper
threat to an unfair contract as “ (a) the threatened act would harm the recipient and would not
significantly benefit the party making the threat; or (b) the effectiveness of the threat in inducing the
manifestation of assent is significantly increased by prior unfair dealing by the party making the
threat; or(c) what is threatened is otherwise a use of power for illegitimate ends.” Restatement,
Second of Contracts § 176(2). Basically, if the contract’s terms are fair, it is more difficult for the
aggrieved party to prove there was an improper threat in making the contract; if the contract’s terms are
intrinsically unfair, it is easier for the aggrieved party to prove there was an improper threat in forming
the contract.

Keep in mind the Restatement is helpful in defining the law, but it is not binding on Minnesota courts,
rather it is a secondary source for legal scholars. The Restatement defines three categories of improper
threats to an unfair contract, what is threatened is (1) crime or tort; (2) criminal prosecution; or (3) use
of civil process (party threatening a lawsuit). Surprisingly, what is not included in the definition is
economic duress. “Economic duress or business compulsion generally is defined as wrongful or
unlawful conduct resulting in the pressure of a business necessity or financial hardship, which compels
the injured party to execute an agreement against their will and to their economic detriment.” St. Louis
Park Inv. Co. v. R.L. Johnson Inv. Co., Inc., 411 N.W.2d 288, 291 (Minn. App. 1987). Similar to the
Restatement, Minnesota courts have refused to include in its definition of duress “economic duress,”
holding “duress [is] a defense to a contract when there is coercion by means of physical force or
unlawful threats, which destroys one's free will and compels compliance with the demands of the party
exerting the coercion.” Id. (emphasis added). See St. Louis Park Inv. Co., 411 N.W.2d 288, 291 (stating
“[m]erely driving a hard bargain or wresting advantage of another's financial difficulty is not duress.”)

Minnesota courts have further limited duress as an affirmative defense, holding “a claim of duress will
not be sustained when the claimant entered into the contract with full knowledge of all the facts, advice
from an attorney, and ample time for reflection.” Id. The fact that the aggrieved party had knowledge of
the facts that he now alleges caused him harm, had advice from an attorney, and time to reflect on the
terms of the contract will cause Minnesota courts to reject a claim of duress. All of the abovementioned
elements will prove the aggrieved party in fact did have a reasonable alternative. Proof of the
reasonable alternative is most evidenced by the aggrieved party’s reliance on attorney advice.

(7) Estoppel
Estoppel is an affirmative defense to a breach of contract enumerated in Minnesota Rules of Civil
Procedure 8.03. All affirmative defenses, including estoppel, must be stated in a pleading. Minn. R.
Civ. P. 8.03. The most common use of an affirmative defense is in a defendant’s Answer to a
Complaint.

A defendant can plead two types of estoppel as an affirmative defense: promissory estoppel and
collateral estoppel.

The Restatement defines promissory estoppel as (1) a promise that the promisor knows or reasonably
should know will induce action and (2) a promisee acts or refrains from acting based on the promisor’s
promise. Restatement, Second of Contracts § 90. If a promisor makes a promise he knows (or
reasonably should know) will induce action or forbearance on behalf of the aggrieved party and the
aggrieved party acts (or fails to act) relying on that promise, the aggrieved party can claim promissory
estoppel. The Restatement further states that the promise is binding if injustice can be avoided by
enforcement of the promise. Id. The aggrieved party can use the affirmative defense of promissory
estoppel to claim that he acted (or refrained from acting) in response to the other party’s promise.

Minnesota courts address promissory estoppel frequently. In 2010, the Court of Appeals of Minnesota
stated a party “invoking estoppel must show that she reasonably relied to her detriment on material
misrepresentations made by” the other party. Singelman v. St. Francis Med. Ctr., 777 N.W.2d 540, 543
(Minn. App. 2010). The Supreme Court of Minnesota held “[a]n essential element of estoppel is that
the party asserting the estoppel acted, or failed to act, in reliance upon the representation claimed to
give rise to the estoppel, whereby he has changed his position for the worse.” Stribling v. Fredericks,
Clark & Co., Inc., 300 Minn. 525, 526, (1974).

Collateral estoppel, commonly referred to as issue preclusion, is a very different doctrine from
promissory estoppel. The Minnesota Supreme Court outlined collateral estoppel as “once an issue is
determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits
based on a different cause of action involving a party to the prior litigation.” Kaiser v. N. States Power
Co., 353 N.W.2d 899, 902 (Minn. 1984). The doctrine of collateral estoppel prevents a plaintiff from
suing a defendant after that plaintiff previously sued the same defendant on the same issue, and that
prior court entered final judgment on that issue. The key to collateral estoppel is that the issue must be
the same and the parties to the prior lawsuit must be the same as the parties to the current lawsuit. The
Minnesota Supreme Court has outlined four elements that must be satisfied to plead collateral estoppel
as an affirmative defense: “(1) the issue was identical to one in a prior adjudication; (2) there was a
final judgment on the merits; (3) the estopped party was a party or in privity with a party to the prior
adjudication; and (4) the estopped party was given a full and fair opportunity to be heard on the
adjudicated issue.” Willems v. Comm'r of Pub. Safety, 333 N.W.2d 619, 621 (Minn. 1983). Collateral
estoppel is similar to the doctrine of res judicata that is addressed below.

(8) Failure of Consideration

Failure of consideration is an affirmative defense to a breach of contract enumerated in Minnesota
Rules of Civil Procedure 8.03. All affirmative defenses, including failure of consideration, must be
stated in a pleading. Minn. R. Civ. P. 8.03. The most common use of an affirmative defense is in a
defendant’s Answer to a Complaint.

The classic definition of the formation of a contract includes offer, consideration and acceptance. The
affirmative defense of failure of consideration is pleaded when the defendant claims there was no
consideration in forming the contract, and therefore the contract is void. The Restatement echoes the
classic definition of a contract by defining the formation of a contract as a “bargain in which there is a
manifestation of mutual assent to the exchange and a consideration.” Restatement, Second of Contracts
§ 17. The Restatement further defines consideration, stating “a performance or a return promise must
be bargained for.” Restatement, Second of Contracts § 71(1). A performance can be payment (such as
“I hereby give you $5 in consideration…”) or a return promise. A contract that includes a promise and a
return promise is a bilateral contract, because both parties to the contract have promised something and
no action on behalf of either party has occurred when the contract was formed. A bilateral contract is
complete once both parties perform their promises.

A defendant will plead the affirmative defense of failure of consideration if he (or the other contracting
party) either did not perform for the contract or did not give a return promise for the contract. When a
defendant pleads the affirmative defense of failure of consideration, the burden is on the defendant to
prove the contract was lacking consideration. Penn Mut. Life Ins. Co. v. Utne, 207 F. Supp. 521, 524
(D. Minn. 1962). If the defendant meets its burden of proving failure of consideration, “a contract valid
when formed becomes unenforceable because the performance bargained for has not been rendered.”
Franklin v. Carpenter, 309 Minn. 419, 422, (1976). As the Minnesota Supreme Court in Franklin stated,
the previously valid contract becomes enforceable when the defendant proves the contract lacked
consideration. “Where a promisor received what he bargained for, however, there is no failure of
consideration.” In re MJK Clearing, Inc., 408 F.3d 512, 515 (8th Cir. 2005).

(9) Fraud
Fraud is an affirmative defense to a breach of contract enumerated in Minnesota Rules of Civil
Procedure 8.03. All affirmative defenses, including fraud, must be stated in a pleading. Minn. R. Civ. P.
8.03. The most common use of an affirmative defense is in a defendant’s Answer to a Complaint.

The Restatement has established two types of fraud: fraud in the inducement and fraud in the factum.

Fraud in the inducement requires one party to a contract to make some sort of statement or active
nondisclosure which has induced the aggrieved party’s actions. Restatement, Second of Contracts §
167. If fraud in the inducement is proven, the contract becomes voidable. A voidable contract (also
known as an “avoidable contract”) is a contract in which the aggrieved party has the option to either
enforce the contract or cancel the contract. The Restatement further defines fraud in the inducement as
“[a] misrepresentation induces a party’s manifestation of assent if it substantially contributes to his
decision to manifest assent.” Id.

Fraud in the factum requires one party to a contract misrepresenting the terms of the contract to the
aggrieved party. Restatement, Second of Contracts § 163. If fraud in the factum is proven, the contract
becomes void. A contract that is deemed void becomes null and inoperative, even if the aggrieved party
wishes to enforce the terms of the contract. The Restatement further defines fraud in the factum as “[i]f
a misrepresentation as to the character or essential terms of a proposed contract induces conduct that
appears to be a manifestation of assent by one who neither knows nor has a reasonable opportunity to
know of the character or essential terms of the proposed contract, his conduct is not effective as a
manifestation of assent.” Id.

The Minnesota Supreme Court has created a five-step test that must be satisfied for a party to claim
fraud: “(1) there was a false representation by a party of a past or existing material fact susceptible of
knowledge; (2) made with knowledge of the falsity of the representation or made as of the party's own
knowledge without knowing whether it was true or false; (3) with the intention to induce another to act
in reliance thereon; (4) that the representation caused the other party to act in reliance thereon; and (5)
that the party suffer[ed] pecuniary damage as a result of the reliance.” Hoyt Properties, Inc. v. Prod.
Res. Group, L.L.C., 736 N.W.2d 313, 318 (Minn. 2007). In Hoyte Properties, the Minnesota Supreme
Court combined both fraud in the inducement and fraud in the factum for a party to plead fraud.

An example of fraud is if one party “secretly substitute[s] one type of document for another.”
BankCherokee v. Insignia Dev., LLC, 779 N.W.2d 896, 900 (Minn. App. 2010). However, the
Minnesota Court of Appeals in BankCherokee limited when a party can plead fraud even when the
other party was in fact fraudulent: “one party's misrepresentation as to the nature of a proposed contract
does not amount to fraud . . . if the other party had a reasonable opportunity to acquaint himself with
the contract and failed to do so.” Id.

(10) Illegality
Illegality is an affirmative defense to a breach of contract enumerated in Minnesota Rules of Civil
Procedure 8.03. All affirmative defenses, including illegality, must be stated in a pleading. Minn. R.
Civ. P. 8.03. The most common use of an affirmative defense is in a defendant’s Answer to a
Complaint.

Contracts in Minnesota have been protected by the State courts: “[c]ourts should not invalidate
enforceable promises except in the clearest of cases.” Cohen v. Cowles Media Co., 479 N.W.2d 387,
391 (Minn. 1992). The general rule is that contracts for performance of illegal conduct are
unenforceable and void. The Minnesota Court of Appeals addressed this, stating “the application of the
doctrine of in pari delicto is appropriate for (1) preventing enforcement of a contract the performance
of which is illegal.” Brubaker v. Hi-Banks Resort Corp., 415 N.W.2d 680, 684 (Minn. App. 1987). The
Supreme Court of Minnesota has held “anyone who engages in a fraudulent scheme forfeits all right to
protection, either at law or in equity.” State by Head v. AAMCO Automatic Transmissions, Inc., 293
Minn. 342, 347 (1972).

A plaintiff who sues a defendant for breach of contract when the contract was for an illegal activity will
be unsuccessful if the defendant raises the affirmative defense that the contract was for the performance
of an illegal act.
(11) Injury by Fellow Servant
Injury by fellow servant is an affirmative defense enumerated in Minnesota Rules of Civil Procedure
8.03. All affirmative defenses, including injury by fellow servant, must be stated in a pleading. Minn.
R. Civ. P. 8.03. The most common use of an affirmative defense is in a defendant’s Answer to a
Complaint.

The Supreme Court of Minnesota has defined the injury by fellow servant (“injury by fellow”) defense
as a rule that “absolves the employer from liability to one in his employ for injuries incurred or suffered
solely as the result of the negligence, carelessness, or misconduct of others who are in the service of the
employer and who are engaged in the same common or general employment as the injured employee.”
Lunderberg v. Bierman, 241 Minn. 349, 356, (1954). Basically, a defendant-employer named as a
defendant in a lawsuit may plead the affirmative defense of injury by fellow if the plaintiff is an
employee of defendant, and is alleging negligence, carelessness, or misconduct on the part of his fellow
employee(s). The Lunderberg court was explicit to not extend the injury by fellow doctrine to injuries
of third parties. See 241 Minn. at 356 (holding “[t]he doctrine has no application in connection with
the liability of the master to a third party.”)

The doctrine of injury by fellow servant has common law roots. The Supreme Court of Minnesota
stated the injury by fellow servant doctrine in an 1880 opinion, holding “as a general rule the master is
not liable to one servant for an injury caused by the negligence of another servant in the same common
employment.” Brown v. Winona & St. P.R. Co., 27 Minn. 162, 163, (1880).

(12) Laches
Laches is an affirmative defense enumerated in Minnesota Rules of Civil Procedure 8.03. All
affirmative defenses, including laches, must be stated in a pleading. Minn. R. Civ. P. 8.03. The most
common use of an affirmative defense is in a defendant’s Answer to a Complaint.

Laches is an “equitable doctrine by which a court denies relief to a claimant who has unreasonably
delayed in asserting the claim, when that delay has prejudiced the party against whom relief is sought.”
Black’s Law Dictionary, 953 (9th Ed. 2009). The Restatement has defined the doctrine of laches as
“[i]n proceedings in equity, a person otherwise entitled to restitution is barred from recovery if he has
failed to bring or, having brought has failed to prosecute, a suit for so long a time and under such
circumstances that it would be inequitable to permit him now to prosecute the suit.” Restatement, First
of Restitution § 148(1).

The Supreme Court of Minnesota defined three scenarios where the doctrine of laches is applicable:
“[a] suit in equity for restitution is barred by the lapse of time only if it would be unjust to allow the
complainant to maintain it. The existence of such injustice depends on (a) whether the complainant has
been unreasonable in his delay after learning the facts, or (b) whether the delay has made it unfair to
permit the suit either because of hardship to the defendant or to third persons by reason of a change in
circumstances, or (c) whether the lapse of time has made it difficult to ascertain the facts so that a
substantial chance of arriving at an erroneous decision exists.” Knox v. Knox, 222 Minn. 477, 486,
(1946).

The Supreme Court of Minnesota commented on the doctrine laches, stating, “[a] party who comes into
a court of equity must act with reasonable diligence, under all the circumstances, or he is chargeable
with laches.” Lindquist v. Gibbs, 122 Minn. 205, 208 (1913). The Lindquist court further narrowed
circumstances where a defendant can claim the affirmative defense of laches when a party delayed
because of mistake, “[b]ut where it is sought to rescind a contract or deed on the ground of mistake, a
party is not guilty of laches until he discovers the mistake, or until he is chargeable with knowledge of
facts from which, in the exercise of proper diligence, he ought to have discovered it.” Id. The relaxation
of the doctrine of laches due to mistake allows plaintiffs more flexibility in bringing suit, even when
the delay in brining suit prejudices the defendant.

(13) License
License is an affirmative defense to a breach of contract enumerated in Minnesota Rules of Civil
Procedure 8.03. All affirmative defenses, including license, must be stated in a pleading. Minn. R. Civ.
P. 8.03. The most common use of an affirmative defense is in a defendant’s Answer to a Complaint.

(14) Payment
Payment is an affirmative defense enumerated in Minnesota Rules of Civil Procedure 8.03. All
affirmative defenses, including payment, must be stated in a pleading. Minn. R. Civ. P. 8.03. The most
common use of an affirmative defense is in a defendant’s Answer to a Complaint.

Generally, payment is when the defendant has satisfied the plaintiff’s claim prior to litigation by
“[p]erformance of an obligation by the delivery of money or some other valuable thing accepted [by
plaintiff] in partial or full discharge of the obligation.” Black’s Law Dictionary, 1243 (9th Ed. 2009). In
pleading the affirmative defense of payment, the defendant bears “the burden of showing payment” was
received and accepted by plaintiff. Marshall & Illsley Bank v. Child, 76 Minn. 173, 177 (1899).

Minnesota courts have allowed for payment to be satisfied if the defendant’s insurer paid the plaintiff,
holding “in property-damage cases, where the [defendant]’s insurer makes a payment directly or
indirectly to the injured party, such payment shall offset the [defendant]’s liability to the injured party.”
VanLandschoot v. Walsh, 660 N.W.2d 152, 156 (Minn. App. 2003).

(15) Release
Release is an affirmative defense enumerated in Minnesota Rules of Civil Procedure 8.03. All
affirmative defenses, including release, must be stated in a pleading. Minn. R. Civ. P. 8.03. The most
common use of an affirmative defense is in a defendant’s Answer to a Complaint.

The Court of Appeals of Minnesota defined release as “an agreement not to enforce a legal cause of
action against a party to the agreement. One party was, therefore, released upon signing from being
required to defend a legal action. The other party was obligated not to sue.” Petition of Anderson, 565
N.W.2d 461, 464 (Minn. App. 1997). The Supreme Court of Minnesota compared a release to a
contract, stating “[a]s with any contract, a release requires consideration, voluntariness, and contractual
capacity.” Karnes v. Quality Pork Processors, 532 N.W.2d 560, 562 (Minn. 1995).

In determining the validity of a release, Minnesota courts consider the following factors: “(a) The
length of period between the injury and the settlement; (b) the amount of time elapsed between the
settlement and the attempt to avoid the settlement; (c) the presence or absence of independent medical
advice of plaintiff's own choice before and at the time of the settlement; (d) the presence or absence of
legal counsel of plaintiff's own choice before and at the time of the settlement; (e) the language of the
release itself; (f) the adequacy of consideration; (g) the competence of the releasor; and (h) whether the
injury complained of by the releasor was an unknown injury at the time of the signing of the release or
merely a consequence flowing from a known injury.” Id.
(16) Res Judicata
Res Judicata is an affirmative defense enumerated in Minnesota Rules of Civil Procedure 8.03. All
affirmative defenses, including res judicata, must be stated in a pleading. Minn. R. Civ. P. 8.03. The
most common use of an affirmative defense is in a defendant’s Answer to a Complaint.

Res judicata, also known as claim preclusion, is defined as “[a]n affirmative defense barring the same
parties from litigating a second lawsuit on the same claim, or any other claim arising from the same
transaction or series of transactions and that could have been – but was not – raised in the first suit.”
Black’s Law Dictionary, 1425 (9th Ed. 2009). The Supreme Court of Minnesota has defined the
doctrine of res judicata as “a final judgment on the merits bars a second suit for the same claim by
parties or their privies.” Kaiser v. N. States Power Co., 353 N.W.2d 899, 902 (Minn. 1984).

Res judicata is very similar to the doctrine of collateral estoppel (issue preclusion). The Supreme Court
of Minnesota has differentiated between res judicata and collateral estoppel, stating “[t]he effect of res
judicata on a judgment or final order has at least two distinct and important aspects: (1) merger or bar;
and (2) collateral estoppel. The principles of merger and bar operate where a subsequent action or suit
is predicated on the same cause of action which has been determined by a judgment, no matter what
issues were raised or litigated in the original cause of action. On the other hand, the principle of
collateral estoppel operates as to matters which were actually litigated and determined by, and essential
to, a previous judgment, irrespective of whether the subsequent action is predicated upon the same or a
different cause of action. In short, one stands for claim preclusion, the other for issue preclusion. It is
essential to bear this distinction in mind in determining the issue in this case.” Hauser v. Mealey, 263
N.W.2d 803, 806 (Minn. 1978).

The general rule in Minnesota, dating back to 1889, is “[a] judgment on the merits constitutes an
absolute bar to a second suit for the same cause of action, and is conclusive between parties and privies,
not only as to every matter which was actually litigated, but also as to every matter which might have
been litigated therein.” Id. at 807.

(17) Statute of Frauds

Statute of frauds is an affirmative defense to a breach of contract enumerated in Minnesota Rules of
Civil Procedure 8.03. All affirmative defenses, including statute of frauds, must be stated in a pleading.
Minn. R. Civ. P. 8.03. The most common use of an affirmative defense is in a defendant’s Answer to a
Complaint.

(18) Statute of Limitations

Statute of limitations is an affirmative defense to a breach of contract enumerated in Minnesota Rules
of Civil Procedure 8.03. All affirmative defenses, including statute of limitations, must be stated in a
pleading. Minn. R. Civ. P. 8.03. The most common use of an affirmative defense is in a defendant’s
Answer to a Complaint.

(19) Waiver
Waiver is an affirmative defense to a breach of contract enumerated in Minnesota Rules of Civil
Procedure 8.03. All affirmative defenses, including waiver, must be stated in a pleading. Minn. R. Civ.
P. 8.03. The most common use of an affirmative defense is in a defendant’s Answer to a Complaint.