Court Opinion

ID: 9667735
Source: CourtListenerOpinion
Date Created: 2023-08-24 01:53:50.181859+00
Date Added: 2024-06-11T18:15:40.307641
License: Public Domain

MacLaughlin, Justice
(dissenting).
I believe that this court should declare a waiver-of-defense clause such as the one involved in this case to be against the public policy of the State of Minnesota. The pertinent statute, Minn. St. 336.9 — 206(1), makes such clauses enforceable, subject however “to any statute or decision which establishes a different rule for buyers or lessees of consumer goods.” I would accept the invitation to issue a decision of this court declaring such provisions in consumer transactions to be against public policy.
While some courts have upheld waiver-of-defense clauses, others have regarded such waivers to be at variance with state public policy. Annotation, 39 A. L. R. 3d 518, 522. Among those cases invalidating waiver-of-defense clauses in consumer transactions are Quality Finance Co. v. Hurley, 337 Mass. 150, 148 N. E. 2d 385 (1958); Unico v. Owen, 50 N. J. 101, 232 A. 2d 405 (1967); Toker v. Perl, 108 N. J. Super. 129, 260 A. 2d 244 (1970); Fairfield Credit Corp. v. Donnelly, 158 Conn. 543, 264 A. 2d 547, 39 A. L. R. 3d 509 (1969). Cf. Rehurek v. Chrysler Credit Corp. 262 So. 2d 452 (Fla. App. 1972). In Fairfield Credit *463Corp. v. Donnelly, supra, the Connecticut Supreme Court held that a waiver-of-defense clause in an installment contract for a television set was void as against public policy and stated (158 Conn. 550, 264 A. 2d 550, 39 A. L. R. 3d 515):
“* * * [T]he use of a waiver of defense clause is an attempt to impart the attributes of negotiability to an otherwise nonnegotiable instrument. [Uniform Commercial Code, § 3-104], An attempt to evade the clear prerequisites of negotiability by the use of such clauses (often, as here, in fine print and couched in technical language the significance of which is difficult for the ordinary consumer to appreciate) is opposed to the policy and spirit of [Uniform Commercial Code, § 3-306], which provides that one not a holder in due course of an instrument is subject to all elaims and defenses which would have been available against the original holder.”
The Donnelly case also points out the policy of the Connecticut Legislature to protect purchasers of consumer goods from the impositions of overreaching sellers. I believe the same legislative goal exists in Minnesota. See, e.g., Minn. St. 325.78 to 325.80 (prevention of consumer fraud); 45.15 and 45.16 (establishing a consumer services section of the department of commerce); 325.92 (unsolicited goods deemed gifts); 325.94 and 325.941 (consumer credit sales). See, generally, c. 325.1 Since there exists in Minnesota a strong public policy in favor of protecting purchasers of consumer goods, it is contrary to that policy for us to enforce a waiver-of-defense clause in a consumer-goods transaction.
The majority opinion states that the claims of plaintiff do not *464relate directly to a consumer credit sale. Inasmuch as her claims arise from an agreement made incident to the purchase of a new automobile pursuant to an installment sales credit contract which contained the waiver-of-defense clause, it seems clear to me that the sale was a consumer credit sale within the meaning of the code.
Further, I do not believe it is relevant that neither Herzog nor Drovers State Bank acted in bad faith or that Drovers bank did not have information which would have put it on notice that plaintiff delegated to Herzog the responsibility for satisfying her mortgage to the credit union out of the proceeds of the loan. Had the bank been on notice of the agreement, or acted in other than good faith, the waiver-of-defense clause would have been unenforceable under the express terms of Minn. St. 336.9— 206(1), set forth in the majority opinion. The issue to be decided in this case is whether waiver-of-defense clauses should be against public policy in transactions involving consumer goods where the assignee takes his assignment for value, “in good faith and without notice of a claim or defense * * § 336.9 — 206(1).
Rather than decide this question on a case-by-case basis, I would take the prerogative left to this court by the legislature and abolish waiver-of-defense clauses in any transaction involving a buyer or lessee of consumer goods.
Because this case is nonprecedential in that our legislature has passed a statute invalidating a waiver of this kind,2 I will not further enlarge upon my reasons for believing that we should declare such waivers against public policy. I would reverse.

 The most recent legislative session resulted in laws protecting a wide range of consumer interests. See, e.g., L. 1973, c. 264 (prohibiting odometer tampering); c. 383 (regulating hearing aid sales); c. 442 (requiring itemizing of funeral costs); c. 443 (regarding sales not made at seller’s place of business); c. 467 (banning dangerous toys); c. 687 (requiring display of octane ratings); c. 692 (limiting disclaimer of implied warranties).

 Minn. St. 325.941, subd. 3, which makes an assignee subject to any defenses the consumer has against the seller, is effective as to any consumer credit sale entered into on or after July 1, 1971. L. 1971, c. 275, § 3. The instant sale was in 1967.