author: SCHUMACHER, Judge

text:
    Barbara Swaden ROSEN, et al., Respondents, v. PRIMUS AUTOMOTIVE FINANCIAL SERVICES, INC., d/b/a Subaru American Credit, et al., Appellants.
    Nos. C9-00-1006, C1-00-1145.
    Court of Appeals of Minnesota.
    Nov. 7, 2000.

      Ronald S. Goldser, James P. Watts, Zimmerman Reed, P.L.L.P., Minneapolis, MN, (for respondents).
    Roger J. Magnuson, Vernle C. Durocher, Jr., Thomas L. Nuss, Dorsey & Whitney LLP, Minneapolis, MN, (for appellants).
    Considered and decided by KLAPHAKE, Presiding Judge, LANSING, Judge, and SCHUMACHER, Judge.
   OPINION

SCHUMACHER, Judge

Respondent Barbara Swaden Rosen sued appellants PRIMUS Automotive Financial Services, Inc., d/b/a Subaru American Credit, and Ford Motor Credit, alleging that they violated Section 9-207 of the Uniform Commercial Code in connection with an automobile leasing transaction. The district court denied the motions for summary judgment and for reconsideration of PRIMUS and Ford Motor Credit and granted Rosen’s motion for partial summary judgment. We reverse and remand.

FACTS

On August 27, 1994, Rosen and/or respondent DCT Corporation leased a car from Brooklyn Park Automotive, Inc. (the dealer). As part of the transaction, Rosen paid the dealer a $350 security deposit. The dealer assigned the lease to Subaru American Credit, a trade name for PRI-MUS Automotive Financial Services, Inc. At the time, PRIMUS was a wholly-owned subsidiary of Ford Motor Credit. In 1996, Rosen terminated the lease and her security deposit was credited in full to her account at a different dealer.

On February 19, 1998, Rosen filed a class action lawsuit against PRIMUS for breach of contract. Rosen claimed that the security deposit qualified as collateral under U.C.C § 9-207 (Minn.Stat. § 336.9-207 (1998)), and that PRIMUS had violated that statute by failing to return any “increase or profit” on the security deposit. The district court later granted Rosen leave to amend the complaint to add DCT as a plaintiff and Ford Motor Credit as a defendant and certified the case as a class action. (Because the class action aspects of the case are not relevant to our decision, we refer to Rosen as respondent in this opinion.)

The district court denied several motions by PRIMUS and Ford Motor Credit to dismiss and for summary judgment. On February 3, 2000, however, after these rulings, the Minnesota Supreme Court decided State v. Larson, 605 N.W.2d 706, 712 (Minn.2000), holding that a dealer’s receipt of an automobile security deposit in a commercial leasing transaction creates a debt- or-creditor relationship between the dealer and consumer. Based on the supreme court’s decision in Larson, PRIMUS and Ford Motor Credit moved the district court for reconsideration and summary judgment. The district court denied the motion, stating that “the general rule stated in Larson does not apply to the case at hand.” The court went on to grant partial summary judgment to Rosen, holding that “the deposit does constitute collateral under U.C.C. § 9-207 as a matter of law.”

ISSUE

Did the trial court err by failing to apply Larson’s holding that an automobile dealer’s receipt of a security deposit in a commercial leasing transaction creates a debt- or-creditor relationship between the dealer and consumer?

ANALYSIS

Rosen’s main contention is that the $350 security deposit paid in connection with the automobile lease was “collateral” within the meaning of the U.C.C. By returning only the $350, with no interest or other increase, Rosen alleges that PRIMUS and Ford Motor Credit violated U.C.C. § 9-207. That section provides that absent an agreement to the contrary, when a secured party holds collateral,

the secured party may hold as additional security any increase or profits (except money) received from the collateral, but money so received, unless remitted to the debtor, shall be applied in reduction of the secured obligation * * *.

Minn.Stat. § 336.9-207(2)(c) (1998).

But the Minnesota Supreme Court ruled in Larson that an automobile dealer’s receipt of a security deposit in a commercial leasing transaction creates a debtor-creditor relationship between the dealer and consumer. In Larson, the defendant, owner of an automobile and equipment leasing business, failed to repay numerous customers’ lease security deposits. Larson, 605 N.W.2d at 708. Larson was convicted of three counts of theft by temporary taking. Id. at 709. Larson challenged the convictions, arguing that the security deposits were not “property of another.” Id. at 710. In analyzing this contention, the supreme court looked to landlord-tenant law for guidance and reviewed three different ways of characterizing the nature of security deposits: the “debtor-creditor model,” the “pledgor-pledgee” model, and the trust model. Id. at 712. The court observed that a “majority of jurisdictions apply the debtor-creditor model to security deposits when analyzing landlord-tenant relationships.” Id. Ultimately, the court concluded that Minnesota would “join the majority of states in defining the lessor-lessee security deposit relationship as one of debtor to creditor.” Id.

PRIMUS and Ford Motor Credit argue that if the “lessor-lessee security deposit relationship [is] one of debtor to creditor,” then Minn.Stat. § 336.9-207, which applies to secured parties holding collateral, is inapplicable, and Rosen’s lawsuit must be dismissed. Rosen argues, however, that the Larson decision did not consider any specific contractual language in reaching its holding and that the contractual language in the lease clearly establishes a secured creditor relationship, thus distinguishing this case from Larson.

The lease contract Rosen signed contained the following provision:

Any security deposit held by the Lessor under this Lease may be used to pay all costs that the Lessee should pay under this Lease but does not.

Rosen argues that because the lease provides that the security deposit is to be “held” by the lessee and “used to pay all costs” for which the lessee is liable but does not pay, the security deposit meets the statutory definition of a security interest, which is “an interest in personal property ⅜ * ⅜ which secures payment or performance of an obligation.” Minn.Stat. § 336 .1-201(37) (1998). Rosen further argues that the “word ‘held’ does not indicate an intent to transfer title.”

But the supreme court specifically rejected the secured creditor/collateral interpretation of an automobile lease security deposit in Larson. Although the supreme court was well aware of the interpretation Rosen urges, the court rejected it in favor of the debtor-creditor model. Larson, 605 N.W.2d at 712. Despite Rosen’s argument, the use of the word “held” does not negate an intent to' transfer title to the security deposit. As the supreme court observed, in the debtor-creditor model, the “security deposit is described as held for the benefit of the lessor because it protects the lessor’s vulnerability under the lease.” Id. (emphasis added).

In Larson, the supreme court “defin[edj the lessor-lessee security deposit relationship as one of debtor to creditor.” Id. (emphasis added). The supreme court’s ruling was based not on specific contractual language, but on the nature of the relationship created by an automobile lease security deposit. Because nothing in the typically sparse contractual language in Larson’s lease changes the nature of that relationship, the rule announced in Larson applies. PRIMUS and Ford Motor Credit are therefore entitled to summary judgment.

DECISION

The district court erred in granting partial summary judgment to Rosen and in denying summary judgment to PRIMUS and Ford Motor Credit.

Reversed and remanded.


source: Caselaw Access Project

author: THOMAS G. FORSBERG, Judge

license: Public Domain

text:
    David J. TUREK, Respondent, v. A.S.P. OF MOORHEAD, INC., d/b/a A.S.P., Inc., Appellant.
    No. C8-00-1045.
    Court of Appeals of Minnesota.
    Nov. 7, 2000.

      Andrea F. Rubenstein, Minneapolis, MN, (for respondent).
    Stephen R. Dawson, Fargo, ND, (for appellant).
    Considered and decided by LANSING, Presiding Judge, PETERSON, Judge, and FORSBERG, Judge.
   OPINION

THOMAS G. FORSBERG, Judge

Appellant A.S.P. of Moorhead, Inc., contends that the district court erred in denying its motion to vacate the default judgment because the district court lacked jurisdiction, since respondent David J. Tu-rek failed to effectively serve appellant pursuant to Minn.R.Civ.P. 4.05. Because the rule unambiguously states service is effected when the acknowledgment is received within the period allowed by the rules, we reverse.

FACTS

Respondent David J. Turek was terminated from his employment with appellant A.S.P. of Moorhead, Inc. (A.S.P.) in October 1994. In February 1996, Turek filed a lawsuit against A.S.P. alleging unlawful reprisal under the Minnesota Whistleblower Act, Minn.Stat. § 181.932 (1998). On or about February 12, 1996, Turek’s attorney sent a letter to A.S.P. enclosing a summons and complaint, notice and acknowledgment of service pursuant to Minn. R.Civ.P. 4.05. The Form 22 notice requested A.S.P. to “complete the acknowledgment part of this form and return one copy of the completed form to the sender within 20 days.” The notice further read that if A.S.P. did not return the acknowledgment within the time period, “you (or the party on whose behalf you are being served) may be required to pay any expenses incurred in serving a Summons and Complaint in any other manner permitted by law.”

A.S.P. forwarded the information to its attorney, who sent a letter to Turek’s attorney providing notice that he represented A.S.P. and would accept service, if Tu-rek had not already served A.S.P. On May 17, 1996, 96 days after A.S.P. received the summons and complaint, A.S.P.’s attorney signed and returned the acknowledgment of receipt to Turek’s attorney. Despite this action and for reasons that are not apparent in the record, this attorney sent a letter to A.S.P., at the conclusion of his representing A.S.P., indicating he had never returned the acknowledgment form.

The district court granted a judgment by default in favor of Turek in the amount of $50,952.76. A.S.P. filed a motion to vacate the default judgment, alleging lack of jurisdiction due to ineffective service of process pursuant to Minn.R.Civ.P. 4.05. The district court denied the motion, which A.S.P. appeals.

ISSUE

Did respondent effectively serve the summons and complaint pursuant to Minn. R.Civ.P. 4.05 when appellant signed and returned the acknowledgment of receipt 96 days after appellant had received the summons and complaint and well after the period allowed by Minn.R.Civ.P. 4.05 to return the acknowledgment?

ANALYSIS

A.S.P. argues that Turek never effectively completed service of process pursuant to Minn.R.Civ.P. 4.05, because A.S.P. did not sign and return the acknowledgment within the time allowed by the rule.

Determination of whether service of process was proper is a question of law reviewed de novo. Amdahl v. Stonewall Ins. Co., 484 N.W.2d 811, 814 (Minn.App.1992), review denied (Minn. July 16, 1992); see, e.g., Patterson v. Wu Family Corp., 608 N.W.2d 863, 866 (Minn.2000) (reviewing de novo waiver of insufficient service of process defense). Rules concerning the commencement of an action should be construed to provide a single, uniform course of procedure applicable to all civil actions. Leek v. American Express Property Cas., 591 N.W.2d 507, 508-09 (Minn.App.1999), review denied (Minn. July 7, 1999).

“A judgment entered without due service of process must be vacated under Minn.R.Civ.P. 60.02.” Blaeser & Johnson, P.A. v. Kjellberg, 483 N.W.2d 98, 100 (Minn.App.1992), review denied (Minn. June 10, 1992). “ ‘Service of process in a manner not authorized by the rule is ineffective service.’ ” Lundgren v. Green, 592 N.W.2d 888, 890 (Minn.App.1999) (quoting Tullis v. Federated Mut. Ins. Co., 570 N.W.2d 309, 311 (Minn.1997)), review denied (Minn. July 28, 1999); see Minn. R.Civ.P. 3.01(a) (commencing a suit requires plaintiff to serve summons and complaint upon defendant). In Minnesota, a plaintiff may effectively serve a summons and complaint by two methods: personally under Minn.R.Civ.P. 4.03 or acknowledged by mail under Minn.R.Civ.P. 4.05. Service of process using acknowledgment by mail entails:

In any action service may be made by mailing a copy of the summons and of the complaint (by first-class mail, postage prepaid) to the person to be served, together with two copies of a notice and acknowledgment conforming substantially to Form 22 and a return envelope, postage prepaid, addressed to the sender. If acknowledgment of service under this rule is not received by the sender within the time defendant is required by these rules to serve an answer, service shall be ineffectual.

Minn.R.Civ.P. 4.05 (emphasis added). According to the plain language of this rule, service is ineffectual if the sender does not receive the acknowledgment within 20 days. See Minn.R.Civ.P. 12 .01 (allowing 20 days after service of the summons to file an answer). The rule unambiguously establishes a dispositive period when service by mail is effected. The purpose of the rules is to make procedures readily ascertainable, settled and predictable. State v. Curtis, 393 N.W.2d 10, 12-13 (Minn.App.1986); see Lundgren, 592 N.W.2d at 890 (“Service of process ‘must accord strictly with statutory requirements.’ ”) (quoting Berryhill v. Sepp., 106 Minn. 458, 459, 119 N.W. 404, 404 (1909)).

The purpose of the rule permitting service by mail through acknowledgment is to shift the cost of service to uncooperative defendants. Blaeser, 483 N.W.2d at 100. If an uncooperative defendant forces the plaintiff to effectuate service personally pursuant to Minn.R.Civ.P. 4.03, the defendant will bear the added cost of personal service:

Unless good cause is shown for not doing so, the court shall order the payment of the costs of personal service by the person served if such person does not complete and return the notice and acknowledgment of receipt of summons within the time allowed by these rules.

Minn.R.Civ.P. 4.05; see Minn.R.Civ.P. 4.05 1985 advisory comm. note. The risk of using service by mail is that a defendant will not cooperate and a plaintiff may have to personally serve the defendant. This court has previously anticipated this problem:

[T]he drafters of rule 4.05 * ⅜ ⅜ were cognizant of the ability of a defendant to frustrate a plaintiffs attempts to serve by mail, and for that reason set out [a] warning. Because effective service under rule 4.05 requires the cooperation of defendants, plaintiffs should secure the cooperation of defendants before at- ■ tempting service, or else plaintiffs should choose another method of service.

Coons v. St. Paul Cos., 486 N.W.2d 771, 775 (Minn.App.1992) (referring to 1 David Herr & Roger S. Haydock, Minnesota Practice § 3.3 (1985)), review denied (Minn. July 16, 1992); see Dean v. KIS Corp., 121 F.R.D. 74, 76 (N.D.Ill.1988) (“The [plain language of the] rule requires personal or abode service when an acknowledgment is not returned within 20 days of mailing.”). When A.S.P. did not return the acknowledgment within 20 days, Turek had alternative means to effectuate service. See Coons, 486 N.W.2d at 776 (emphasizing plaintiff had alternate means to serve defendant personally); Gulley v. Mayo Found., 886 F.2d 161, 165 (8th Cir.1989) (emphasizing strict application of the rule when alternative means of service are available).

Whether A.S.P. had actual notice of the lawsuit and Turek substantially complied with the rules for service of process is irrelevant, because the actual notice exception applies only to cases involving substitute service at a defendant’s usual place of abode. Thiele v. Stick, 425 N.W.2d 580, 584 (Minn.1988); Coons, 486 N.W.2d at 775. Since personal service was not made at the defendant’s usual place of abode, the actual notice exception does not apply to this case.

By signing the acknowledgment form beyond the period prescribed by the rule, A.S.P. did not waive its right to challenge the court’s jurisdiction. An improperly served defendant submits to a court’s jurisdiction if it has taken an affirmative step to invoke the power of the court to determine the merits of all or part of a claim. Patterson, 608 N.W.2d at 869; Larson v. New Richland Care Ctr., 520 N.W.2d 480, 482 (Minn.App.1994); see Blaeser, 483 N.W.2d at 102 (finding defendant led plaintiff to believe he would not challenge the effectiveness of service). A.S.P. made absolutely no appearance before the district court, which would constitute an affirmative step to invoke the power of the district court. A.S.P. did not appear before the district court prior to its motion to vacate judgment. Rather, the record contains only one letter from A.S.P. which actually questions whether A.S.P. had even been served and does not reflect that A.S.P. knew of the lawsuit or the consequences of a failure to answer. Tu-rek asserts that A.S.P. requested an extension of time to answer, but that request does not invoke the court’s power to recognize jurisdiction. See Larson, 520 N.W.2d at 482 (finding no evidence in the record defendant had any contact with the district court, only contact with opposing counsel). Given that A.S.P. took no affirmative steps to invoke the power of the court prior to its motion to vacate the default judgment, A.S.P. did not waive its right to challenge the effectiveness of service of process.

DECISION

The district court erred in denying the motion to vacate judgment. The default judgment was void for lack of jurisdiction because Turek failed to effectively serve A.S.P.

Reversed.

       Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const, art. VI, § 10.

      . Another letter provides evidence that A.S.P. never knew the acknowledgment form had been signed and returned. In his closing letter, A.S.P.’s attorney stated he had not returned the acknowledgment, when he had in fact done so.


author: TOUSSAINT, Chief Judge

text:
    ILLINOIS FARMERS INSURANCE COMPANY, Appellant, v. Michael Terrance DUFFY, Jason Robert Duffy, Mathias Joseph Conroy, Linda E. Brockway, as Trustee for the Heirs of Kevin G. Brockway, Mark Roy Adams, Jr., a minor, by and through his parent and natural guardian, Mark Adams, Respondents.
    No. C4-00-782.
    Court of Appeals of Minnesota.
    Nov. 7, 2000.

      Laura L. Myslis, Gislason & Hunter, LLP, Minnetonka, MN (for appellant).
    Michael Terrance Duffy, Maplewood, MN (pro se respondent).
    Jason Robert Duffy, St. Paul, MN (pro se respondent).
    Joel A. Montpetit, Montpetit, Freiling & Kranz, So. St. Paul, MN (for respondent Matthias Conroy).
    Michael D. O’Neill, Brian M. Meloy, O’Neill, Grills & O’Neill, P.L.L.P. St. Paul, MN (for respondent Linda E. Brockway).
    Harry A. Sieben, Jr., Jeffrey M. Mont-petit, Sieben, Grose, Von Holtum, McCoy & Carey, Ltd., Minneapolis, MN (for respondent Mark Roy Adams, Jr.).
    Considered and decided by TOUSSAINT, Chief Judge, PETERSON, Judge, and WILLIS, Judge.
   OPINION

TOUSSAINT, Chief Judge

The district court, in a declaratory judgment action, determined that a homeowner’s insurance policy provided coverage for injuries and death resulting from a motor vehicle accident that occurred after the insureds supplied alcohol to the minor driver. The insurer appeals, contending that the insureds’ act of providing alcohol to minors did not constitute an “occurrence” within the meaning of the insurance policy and the motor vehicle and intentional act exclusions apply. We reverse, concluding that the act of supplying alcohol to minors is not a covered occurrence under the homeowner’s policy and that the motor vehicle exclusion of that same policy applies.

FACTS

The basic facts are undisputed. Michael Duffy (1) allowed his underage daughter to hold a New Year’s Eve party at their house and (2) purchased alcohol to be served at the party, as did his 21-year-old son, Jason Duffy. Two teenagers who attended the party, Kevin Brockway and Mark Adams, left together. Brockway, the intoxicated driver, lost control of his vehicle, hit a tree and was killed. Adams, who was a passenger in the Brockway vehicle, was injured. Michael Duffy pleaded guilty to six gross misdemeanors, and Jason Duffy pleaded guilty to a misdemeanor for furnishing alcohol to minors.

The injured passenger and the trustee for the deceased driver sued the Duffys, who tendered defense of the lawsuit to Illinois Farmers Insurance Company, their homeowner’s liability insurer. The insurer brought a declaratory judgment action, contending it was not obligated to defend or indemnify the Duffys. The district court granted summary judgment in favor of respondents, finding coverage, and the insurer appeals.

ISSUES

I. Was the act of providing alcohol to minors an “occurrence” within the meaning of the homeowner’s policy?

II. Does the motor vehicle exclusion in the homeowner’s policy preclude coverage?

ANALYSIS

On review of a summary judgment, an appellate court will assess whether there are genuine issues of material fact and whether the district court erred as a matter of law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). The interpretation of insurance language is a question of law, which we review de novo. Meister v. Western Nat’l Mut. Ins. Co., 479 N.W.2d 372, 376 (Minn.1992). “General principles of contract interpretation apply to insurance policies.” Lobeck v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246, 249 (Minn.1998). If the language is clear and unambiguous, it “must be given its usual and accepted meaning.” Id. (quotation omitted). An appellate court will construe exclusions from coverage narrowly. State Farm Ins. Cos. v. Seefeld, 481 N.W.2d 62, 64 (Minn.1992). The burden of proving that the policy exclusion bars coverage rests on the insurance company. Id.

I.

The homeowner’s policy defines occurrence as

an accident including exposure to conditions which results during the policy period in bodily injury or property damage. Repeated or continuous exposure to the same general conditions is considered to be one occurrence.

(Emphasis omitted) An “accident” includes “all negligently caused injury, provided such injury was not intentional.” Milbank Ins. Co. v. B.L.G., 484 N.W.2d 52, 58 (Minn.App.1992) (citations omitted), review denied (Minn. July 16, 1992). Respondents contend that because the Duffys did not intend to cause the harm that resulted, their actions were covered under the policy. While it is undisputed that the Duffys did not intend to cause harm, the inquiry does not end there. Instead, we must examine the nature of the acts that respondents contend are covered.

This court has discussed the meaning of “occurrence” and “accident” when the insured intended the wrongful act, but did not intend to cause the harm that resulted. Gilman v. State Farm Fire & Cas. Co., 526 N.W.2d 378, 382 (Minn.App.1995) (addressing situation in which insured tackled another, causing the other to suffer a broken ankle). In addressing whether the act of tackling was an occurrence under the policy, this court concluded that

the proper analysis requires the fact-finder to determine whether the wrongful or tortious event was an accident. * * * [I]n this case, the wrongdoing was the tackle, which the jury found was not “unexpected, unforeseen, or unde-signed,” and was not negligent.
We hold that in cases such as this, where there is an allegedly tortious and nonconsensual act, the jury should properly be instructed that an “accident” is an “unexpected, unforeseen, or unde-signed” happening, and that it includes negligently caused injury that was not intentional. The “happening” is the wrongful or tortious act or event.

Id. at 383.

In this case, the wrongful or tor-tious events for which the insureds sought coverage were their actions of supplying alcohol to minors. It is undisputed that giving alcohol to minors was wrongful; the Duffys later pleaded guilty to criminal charges for their conduct. Because the wrongful or tortious acts were not accidental, they do not constitute an occurrence within the meaning of the policy. Consequently, the unintended harm that resulted is not covered under the policy.

II.

We also address whether the motor vehicle exclusion applies. The homeowner’s policy excludes coverage for injuries arising out of the use of a motor vehicle. A plaintiff nonetheless may recover on the tortfeasor’s homeowner’s policy for injuries sustained through the use of a motor vehicle where “two independent acts, one vehicle-related and one nonvehi-cle-related, were involved.” Waseca Mut Ins. Co. v. Noska, 331 N.W.2d 917, 921 (Minn.1983) (footnote omitted). The determinative question “is whether the two causes could have operated independent of a motor vehicle to cause the loss.” Seefeld, 481 N.W.2d at 65. But if there is only a “remote possibility” that injury could have occurred from the concurrent cause without a motor vehicle, the doctrine will not be applied. Id.

In Seefeld, the injury arose when the insured was negligently driving an all-terrain vehicle and pulling a negligently designed and constructed trailer. Id. at 64. Because the injury caused by the trailer could have occurred only through the use of a motor vehicle, both causes of injury were deemed related to a motor vehicle and subject to the motor vehicle exception in the homeowner’s insurance. Id. at 65. In contrast, in Noska, when the insured hauled barrels of live embers in a truck, and the barrels emitted sparks that ignited fires, the act of placing the live embers in the barrels was deemed a concurring, nonvehicle-related act covered by homeowner’s insurance. Noska, 331 N.W.2d at 923.

• Respondents contend that the act of furnishing alcohol to a minor, who subsequently drives a motor vehicle, is equivalent to placing live embers into a barrel, to be subsequently transported by a motor vehicle. They assert that just as damages could have resulted from the live embers without the act of driving, so too the intoxicated minors could have been injured through the use of alcohol without a motor vehicle, such as from alcohol poisoning or sustaining injuries from a fight.

We disagree. As in Seefeld, 481 N.W.2d at 65, the death and injuries here were directly linked to the motor vehicle. Absent the minor driver’s use of the motor vehicle, the resulting injuries and death would not have occurred. Consequently, we hold that under the motor vehicle exclusion, the homeowner’s insurance does not provide coverage. In light of this decision, we need not reach the application of the exclusion for intentional acts.

DECISION

The decision by the district court determining that the homeowner’s insurance policy provided coverage is reversed.

Reversed.

      . We find no support in the policy for respondent Brockway's claim that the exclusion applies only to motor vehicles owned by or rented to the insured.


author: LANSING, Judge

text:
    MEDICA, INC., Respondent, v. Aubry L. BILLINGSLEA, Appellant.
    No. C1-00-934.
    Court of Appeals of Minnesota.
    Nov. 7, 2000.
    Review Granted Dec. 20, 2000.

      Kevin P. Hickey, Bassford, Lockhart, Truesdell & Briggs, P.A., Minneapolis, MN, (for respondent).
    Thomas J. Laughlin, Laughlin Law Office, St. Paul, MN, (for appellant).
    Considered and decided by LANSING, Presiding Judge, PETERSON, Judge, and FORSBERG, Judge.

       Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const, art. VI, § 10.

   OPINION

LANSING, Judge

In an appeal from summary judgment, Aubry Billingslea contends that federal law preempts enforcement of a state statute imposing a lien on a medical-assistance recipient’s cause of action or recovery rights for injuries necessitating the medical expenses. Under the reasoning in Martin ex rel. Hoff v. City of Rochester, 615 N.W.2d 867 (Minn.App.2000), review granted (Minn. Oct. 17, 2000), we conclude that federal law does not conflict with or otherwise preempt Minn.Stat. § 256B.042, and we affirm.

FACTS

Aubry Billingslea applied for and received medical assistance to pay medical bills for injuries sustained in a car accident. As a condition of receiving medical assistance, Billingslea signed a contract assigning to the State of Minnesota her rights to payment of medical expenses from any other source. See 42 U.S.C. § 1396K(a)(l)(A) (1994); Minn.Stat. § 256.056, subd. 6 (1998). Medica administered the medical-assistance program through a contract with the state. As an agent of the state, Medica filed a section 256B.042 cost-of-care lien to secure reimbursement from any award or settlement proceeds paid to Billingslea.

Billingslea obtained an underinsured-motorist settlement from her insurer, and Medica sued to enforce its lien against the settlement. Medica moved for summary judgment, arguing that it was entitled to the lien proceeds under Minnesota law. Billingslea filed a cross-motion for summary judgment, arguing that 42 U.S.C. § 1396p(a)(l) preempts section 256B.042.

The district court granted summary judgment to Medica, concluding that 42 U.S.C. § 1396p(a)(l), which prohibits medical-assistance liens on a recipient’s property before the recipient’s death, does not conflict with section 256B.042 and therefore does not preempt its enforcement. Billingslea appeals.

ISSUE

Did the district court err in holding that federal law does not preempt cost-of-care lien rights granted to the state under Minn.Stat. § 256B.042?

ANALYSIS

On appeal from summary judgment, the reviewing court must determine whether the case raises genuine issues of material fact and whether the district court erred in its application of the law. Offerdahl v. University of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn.1988). A statute’s preemptive effect involves a question of law, which this court reviews de novo. In re Speed Limit for Union Pac. R.R. Through Shakopee, 610 N.W.2d 677, 682 (Minn.App.2000).

Billingslea appealed the district court’s judgment that enforced Minnesota’s statutory medical-assistance lien before this court decided Martin ex rel. Hoff v. City of Rochester, 615 N.W.2d 867 (Minn.App.2000), review granted (Minn. Oct. 17, 2000). Martin held that Minn. Stat. § 256.015 (Supp.1999) does not conflict with 42 U.S.C. § 1396p(a)(l). Relying on decisions in similar cases from other jurisdictions, this court concluded that the lien rights are simply a vehicle for enforcing the prior assignment of recovery rights and, as such, do not conflict with the federal statutory provision protecting a Medicaid recipient’s property prior to death. Martin, 615 N.W.2d at 869-70.

Both parties acknowledge that the issues in this case are essentially identical to the issues in Martin, and we agree. Martin interprets section 256.015, the human-services lien provisions for medical care and subsistence payments. Billingslea appeals the enforcement of a lien imposed under section 256B.042, which provides for medical assistance for needy persons. But the lien provisions in section 256B.042 are essentially identical to those in section 256.015. The lien created by section 256.015, the statute analyzed in Martin, does not vary from the lien created by section 256B.042 in any way that affects the preemption issue raised in both appeals. Consequently, the Martin decision that 42 U.S.C. § 1396p(a)(l) does not preempt section 256.015 applies with equal force to section 256B.042.

DECISION

The district court properly granted summary judgment to Medica.

Affirmed.


author: PER CURIAM.

text:
    2000 ND 194
    DISCIPLINARY BOARD OF the SUPREME COURT OF the STATE OF NORTH DAKOTA, Petitioner, v. Thomas W. ROBB, Respondent
    No. 20000259.
    Supreme Court of North Dakota.
    Nov. 2, 2000.
   DISBARMENT ORDERED

PER CURIAM.

[¶ 1] On September 11, 2000, the Hearing Body of the Disciplinary Board filed its Report for consideration under N.D.R. Lawyer Discipl. 3.1(F)(2). Objections to the Report of the Hearing Body were due September 28, 2000; no objections were filed. The Record indicates Robb refused mail addressed to him by the Clerk of the Supreme Court and Secretary of the Disciplinary Board.

[¶ 2] The Petition for Discipline was served on Robb- on May 23, 2000, and alleges Robb violated N.D.R. Prof. Conduct 1.3(diligence); 1.5(a)(4)(fees); 5.5(a) (unauthorized practice of law); and 8.4(d)(misconduct in violation of N.D.C.C. § 27-14-02(2)). Robb failed to serve and file an appropriate response to the Petition for Discipline but did file a letter with the Chair of the Hearing Body asserting that he is not a member of the bar of North Dakota and not subject to the jurisdiction of the Disciplinary Board.

[¶ 3] The Hearing Body found Robb was admitted to practice as an attorney in the courts of North Dakota on December 11, 1975, and since that date his name has appeared on the roll of attorneys maintained by the Supreme Court. Robb is not currently licensed to practice law. Under Rule 1.1(C), N.D.R. Lawyer Discipl., Robb remains subject to the disciplinary jurisdiction of this Court.

[¶ 4] In June of 1999, Robb was retained by Todd Keller to represent him in a bankruptcy proceeding and Keller paid Robb $675 for the bankruptcy filing. By order dated August 9, 1999, Robb was suspended by the Supreme Court from the practice of law for a period of 60 days, effective September 1, 1999. See Disciplinary Board v. Robb, 1999 ND 161, 598 N.W.2d 808. Under N.D.R. Lawyer Discipl. 6.3, Robb was to notify his clients of the suspension.

[¶ 5] Throughout September, October, November and December, Keller contacted Robb about the status of his case. No work was performed on Keller’s case between June 1999 and December 1999, and Keller was never informed about Robb’s suspension. Robb did not return Keller’s money; Keller was refunded his $675 from the North Dakota State Bar Association Client Protection Fund.

[¶ 6] The Hearing Body found Robb’s prior disciplinary record to be an aggravating factor under N.D.Stds. Imposing Lawyer Sanctions 9.22. Specifically, Robb has received the following discipline:

1. Private Reprimand by the Disciplinary Board for violation of Canon 1, Disciplinary Rule 8(j)(4), N.D.Code of Professional Responsibility.
2. Private reprimand by Inquiry Committee West for violation of N.D.R. Prof. Conduct 1.3(requiring diligence and promptness in representing a client), 1.4(requiring a lawyer make reasonable efforts to keep a client reasonably informed about the status of a matter), N.D. Procedural Rules for Lawyer Disability and Discipline 1.2(a)(3)(it is misconduct and grounds for disciplinary sanctions for a lawyer to engage in conduct involving dishonesty, fraud, deceit, or misrepresentation), and N.D.R. Prof. Conduct 1.5(C)(failure to have a written contingency fee agreement).
3. Private Reprimand by Inquiry Committee West for violation of N.D.R. Prof. Conduct 1.3(requiring diligence and promptness in representing a client) and 1.4(requiring a lawyer make reasonable efforts to keep a client reasonably informed about the status of a matter).
4. Public Reprimand by the Supreme Court for violating Disciplinary Rule 7-101(A)(1) and (2)(failing to seek the lawful objectives of his client and failing to carry out a contract of employment) of the Code of Professional Responsibility, and N.D.R. Prof. Conduct 1.3, 1.4(a) and 1.5(a lawyer shall act with reasonable diligence and promptness in representing a client, make reasonable efforts to keep a client informed about the status of a matter, and charge a reasonable fee). Robb was also ordered to pay restitution to the client in the amount of $690 and the costs and expenses of the disciplinary proceedings in the amount of $627.49. In the Matter of the Disciplinary Action Against Robb [Disciplinary Bd. v. Robb], 506 N.W.2d 714 (N.D.1993).
5. Reprimand by the Disciplinary Board for violating N.D.R. Lawyer Dis-cipl. 1.2(A)(2)(a lawyer may be disciplined for ... [committing a criminal act that reflects on the lawyer’s honesty, trustworthiness or fitness as a lawyer).
6. 60-day suspension by the Supreme Court for violation of N.D.R. Prof. Conduct 3.4(c)(Fairness to Opposing Party and Counsel), in failing to follow Rule 11.2, N.D.R.Ct., governing the withdrawal of attorneys, and N.D.R. Prof. Conduct 1.16(e)(Declining or Terminating Representation), in failing to take steps to protect a client’s interests when he terminated his representation. Disciplinary Board v. Robb, 1999 ND 161, 598 N.W.2d 808.
7. One year suspension by the Supreme Court for violation of N.D.R. Prof. Conduct 1.15(a)(safekeeping client property) and 5.5(a) (practicing law before he had renewed his license as required by N.D.C.C. § 27-11-22). Disciplinary Board v. Robb, 2000 ND 146 [In re Disciplinary Action Against Robb], 615 N.W.2d 125.

[¶ 7] The Hearing Body further found that Robb’s failure to respond to the allegations in Petition for Discipline is an admission under N.D.R. Lawyer Discipl. 3.1E(2) that the allegations are meritorious.

[¶ 8] The Hearing Body recommends Robb be disbarred from the practice of law, pay restitution to the North Dakota State Bar Association Client Protection Fund in the amount of $675, and pay costs in the amount of $318.50.

[¶ 9] ORDERED the Report of the Hearing Body of Disciplinary Board is adopted and Thomas W. Robb is DISBARRED from the practice of law, effective immediately.

[¶ 10] FURTHER ORDERED that Thomas W. Robb pay restitution in the amount of $675 to the North Dakota State Bar Association Client Protection Fund.

[¶ 11] FURTHER ORDERED that Thomas W. Robb pay the costs and expenses of the disciplinary proceedings in the amount of $318.50, payable to the Secretary of the Disciplinary Board.

[¶ 12] Dated at Bismarck, North Dakota, November 1, 2000.

[¶ 13] GERALD W. VANDE WALLE, C.J., WILLIAM A. NEUMANN, DALE Y. SANDSTROM, MARY MUEHLEN MARING, CAROL RONNING KAPSNER, JJ., concur.


author: SABERS, Justice

text:
    2000 SD 137
    Betty Ann PESICKA, Plaintiff and Appellant, v. Gerald Gary PESICKA, Defendant and Appellee.
    No. 21303.
    Supreme Court of South Dakota.
    Considered on Briefs Sept. 18, 2000.
    Decided Nov. 1, 2000.
    Patrick M. Ginsbach of Farrell, Farrell and Ginsbach, Hot Springs, South Dakota, Attorneys for plaintiff and appellant.
    Richard A. Johnson of Strange Farrell & Johnson, Sioux Falls, South Dakota, Attorneys for defendant and appellee.
   SABERS, Justice

[¶ 1.] The Judgment and Decree of Divorce incorporated a Stipulation and Agreement providing for the division of Gary’s teacher retirement benefit. The circuit court held that the provision was a clear and unambiguous statement of the amount Betty was to receive and refused to set aside the provision or award interest pursuant to SDCL 15 — 6—60(b)(6). Betty appeals. We affirm.

FACTS

[¶ 2.] Gary and Betty were divorced on October 1, 1985 after twenty-eight years of marriage. Both parties were represented by counsel in the divorce proceedings. Counsel for Betty drafted the provision on the division of Gary’s teacher retirement benefit. It provides that:

When Gary draws his teacher’s retirement or becomes 65 years of age, whichever is first, the parties shall divide the present teacher retirement benefit equally, that amount is $12,092.87.

This provision was accepted by Gary and was subsequently incorporated into the Judgment and Decree of Divorce. At the time the agreement was drafted $12,092.87 was the amount of Gary’s contributions to the retirement account, as opposed to the total value of benefits to be received upon retirement.

[¶ 3.] Betty asserts that this provision is ambiguous. She argues that a contradiction exists between the language utilized in the agreement (“teacher retirement benefit”) and the dollar figure representing the contribution amount. Based on this alleged ambiguity she sought to have a Qualified Domestic Relations Order (QDRO) issued for the benefits earned during marriage. Gary opposed, maintaining that the provision only entitles her to half of the amount of contributions made during the marriage ($12,092.87) as stated therein.

[¶ 4.] A hearing was held to determine if a QDRO should be issued, or in the alternative, if the Judgment and Decree should be set aside to award Betty a monthly benefit amount or interest on the lump sum amount. The circuit court held that “although the terminology used in the paragraph misspeaks in referring to the ‘phrase present teacher retirement’ the paragraph is clear and unambiguous as to the amount to be divided, i.e. $12,092.87.” The circuit court denied the motion to enter the QDRO or set aside the original Judgment and Decree.

[¶ 5.] Betty appeals contending: (1) A QDRO should have been entered based on the ambiguity in the language of the provision; and, (2) relief should have been granted pursuant to SDCL 15 — 6—60(b)(6). Gary made a timely motion for an award of appellate attorney fees in the amount of $1,290.32.

STANDARD OF REVIEW

[¶ 6.] “Contractual stipulations in divorce proceedings are governed by the law of contracts.” Houser v. Houser, 535 N.W.2d 882, 884 (S.D.1995). The interpretation of a contract is a question of law and is reviewed de novo. Hayes v. Northern Hills General Hosp., 1999 SD 28, ¶ 62, 590 N.W.2d 243, 254. When the meaning of contractual language is plain and unambiguous, construction is not necessary. If a contract is found to be ambiguous the rules of construction apply. Alverson v. Northwestern Nat. Cas. Co., 1997 SD 9, ¶ 8, 559 N.W.2d 234, 235. “Whether the language of a contract is ambiguous is ... a question of law.” Enchanted World Doll Museum v. Buskohl, 398 N.W.2d 149, 151 (S.D.1986); see also Overfield v. American Underwriters Life Ins. Co., 2000 SD 98, ¶ 12, 614 N.W.2d 814, 816.

[¶ 7.] 1. WHETHER A QDRO SHOULD ISSUE FOR HALF THE AMOUNT OF THE RETIREMENT BENEFIT EARNED DURING MARRIAGE.

[¶ 8.] We must first determine whether the provision is ambiguous. “A contract is ambiguous when application of rules of interpretation leave a genuine uncertainty as to which of two or more meanings is correct.” Alverson, 1997 SD 9, ¶ 8, 559 N.W.2d at 235 (citations omitted).

[¶ 9.] “In determining the proper interpretation of a contract the court must seek to ascertain and give effect to the intentions of the parties.” Singpiel v. Mortis, 1998 SD 86, ¶ 10, 582 N.W.2d 715, 718. The intention of the parties is. determined by “look[ing] to the language the parties used.” Id. “If that intention is clearly manifested by the language of the [Stipulation and Agreement], it is the duty of this court to enforce it.” In Re Estate of Stevenson, 2000 SD 24, ¶ 14, 605 N.W.2d 818, 821.

[¶ 10.] In determining ambiguity we have stated:

A contract is not rendered ambiguous simply because the parties do not agree on its proper construction or their intent upon executing the contract. Rather, a contract is ambiguous only when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement.

Singpiel, 1998 SD 86, ¶ 16, 582 N.W.2d at 719 (citations omitted).

[¶ 11.] Applying these principles to the language of the Stipulation and Agreement no ambiguity exists. The provision states that “the parties shall divide the present teacher retirement benefit equally, that amount is $12,092.87.” The use of the word “benefit” here does not refer to future monthly installments from Gary’s retirement account, but is instead used to refer to the amount that will be divided. The language of the provision then clearly specifies that this “benefit” or the amount to be divided is $12,092.87.

[¶ 12.] In interpreting the meaning of this provision we are bound by the words chosen by the parties. The language used here supports a determination that the amount indicated was to be divided equally “[w]hen Gary draws his retirement or becomes 65 years of age.” That amount was clearly $12,092.87. The provision does not create “a genuine uncertainty as to which of two or more meanings is correct.” Alverson, 1997 SD 9, ¶ 8, 559 N.W.2d at 235. If no ambiguity exists our inquiry ends. See Overfield, 2000 SD 98, ¶26, 614 N.W.2d at 820.

[¶ 13.] Both parties have urged us to apply varying rules of construction to the language of the provision. Yet, “the prerequisite to all of these rules of construction is that some ambiguity or doubt must exist about the meaning of the contract and the intent of the parties.” Middleton v. Klingler, 410 N.W.2d 184, 186 (S.D.1987). Finding no ambiguity we reject this invitation. See Overfield, 2000 SD 98, ¶ 15, 614 N.W.2d at 817.

[¶ 14.] We affirm issue 1.

[¶ 15.] 2. WHETHER THE TRIAL COURT ABUSED ITS DISCRETION BY REFUSING TO SET ASIDE THE PROVISION, OR BY FAILING TO GRANT INTEREST ON THE LUMP SUM AMOUNT UNDER SDCL 15-6-60(b)(6).

[¶ 16.] In the alternative, Betty requests that if the provision is found unambiguous “the Court award her a monthly benefit or at least • interest on the lump sum of $6,056.43.” She asserts that SDCL 15 — 6—60(b)(6) supports such a result.

[¶ 17.] SDCL 15-6-60(b)(6) provides an equitable remedy when a party “seeks extraordinary relief.” Hrachovec v. Kaarup, 516 N.W.2d 309, 310 (S.D.1994). “Relief under SDCL 15 — 6—60(b) is granted only upon a showing of exceptional circumstances.” Id. “The purpose of Rule 60(b) is to preserve the delicate balance between the sanctity of final judgments and the incessant command of a court’s conscious that justice be done in light of all the facts.” Id. at 311 (citations omitted).

[¶ 18.] Any decision to grant or deny such relief “rests within the sound discretion of the trial court and will not be disturbed on appeal except for abuse.” Id. It has not been shown that the circuit court abused its discretion in finding no “exceptional circumstances” on these facts.

[¶ 19.] We affirm issue 2.

[¶ 20.] Gary made a motion for an award of appellate attorney fees. He submitted an affidavit and itemized statements reflecting his attorney fees and costs to be $1290.32. See Malcolm v. Malcolm, 365 N.W.2d 863, 866 (S.D.1985). In determining if a party is entitled to attorney fees, we consider “property owned by each party, their relative incomes, the liquidity of the assets, and whether either party unreasonably increased the time spent on the case.” Abrams v. Abrams, 516 N.W.2d 348, 352 (S.D.1994) (citations omitted). Considering these factors and the inability of Betty to pay attorney fees and costs, we decline to award them.

[¶ 21.] MILLER, Chief Justice, and AMUNDSON, KONENKAMP, and GILBERTSON, Justices, concur.

      . Betty contends that the decree should be set aside or interest granted under the “catchall provision” of SDCL 15 — 6—60(b)(6). That statute provides in relevant part:
      On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: 6) Any other reason justifying relief from the operation of the judgment.

      . Even if an ambiguity existed it would be construed against Betty as her counsel drew the provision. Singpiel, 1998 SD 86, ¶ 18, 582 N.W.2d at 720. Betty's assertion that the husband controlled the reporting of the amount does not detract from this fact.
      Additionally, even if we were to consider the conduct of the parties after the provision was drafted to establish intent, the most significant example was that in 1986 another attorney for Betty argued in her brief to reevaluate alimony that "[l]he parties agreed to equally divide the Husband’s retirement benefit of $12,092.87 at the time Husband draws it or becomes 65, each then to receive $6,046.43.”

      . See supra note 1 for the relevant text of SDCL 15 — 6—60(b).


author: PER CURIAM

text:
    2000 SD 136
    STATE of South Dakota, Plaintiff and Appellee, v. Sheldon Charles DUBRAY, Defendant and Appellant.
    No. 21150.
    Supreme Court of South Dakota.
    Considered on Briefs April 24, 2000.
    Decided Nov. 1, 2000.

      Mark Barnett, Attorney General, Grant Gormley, Assistant Attorney General, Pierre, South Dakota, Attorneys for plaintiff and appellee.
    David J. Huss, Rapid City, South Dakota, Attorney for defendant and appellant.
   PER CURIAM

[¶ 1.] Sheldon Charles DuBray appeals from an order finding him in direct contempt of court. SDCL 23A-38-1. He was ordered to serve twenty-five (25) days in the Pennington County Jail. We affirm.

FACTS

[¶ 2.] On August 2, 1999, Circuit Judge Kern sentenced DuBray to two years in the penitentiary for distribution of one ounce or less of marijuana with consideration. SDCL 22-42-7. DuBray “was mad” and “vented.” When he pounded his hands on the wooden railing surrounding the jury box the court ordered him to cease and desist.

[¶ 3.] As DuBray turned the corner to leave the courtroom he uttered an obscenity directed at the court. The court heard that he had uttered something under his breath. The deputy escorting DuBray immediately brought him back to the courtroom where the following occurred:

THE COURT: All right. We’ll go on the record. Do you need any additional assistance, officer?
DEPUTY SHERIFF: Well, Mr. Du-bray had something to say as he left the courtroom. Do you want to tell- the judge what you said?
THE DEFENDANT: I said bitch.
THE COURT: All right. The Court is going to find you in direct contempt of this Court. We’ll set this matter on for a proceeding on that. The Court then finding that you have committed a contemptuous act in the presence of the Court.

According to the deputy’s incident report, DuBray actually said “fuckin’ bitch.”

[¶ 4.] During DuBray’s sentencing for criminal (direct) contempt, the trial court explained:

MR. HUSS: Your Honor, for clarification purposes, based upon some of these statements that you made, you indicate that Mr. Dubray uttered the obscenity outside the courtroom?
THE COURT: He uttered it right here. I could hear he had uttered something underneath his breath. He had already beat on the wood railing which in itself is a contemptuous act committed in the direct presence of the Court. The Court then finds his utterance in the presence of the deputy under his breath as he was going out of the corner here further contemptuous. The deputy then had him step back in and asked him to repeat it, he stated, then he repeated. The Court finds both those acts to be direct contempt of this Court and sentenced to 25 days for which he will receive no credit. Now, I’ve prepared an order, you are certainly permitted to obtain a copy.
If there is nothing further we’re adjourned and that direct contempt being 23A-38-1. The Court finds it’s necessary for control of the Court’s decorum and to assure that all litigants express proper respect towards the Court and towards judicial proceedings.
We’re adjourned.

ISSUE ONE

[¶ 5.] Does the Supreme Court have jurisdiction to hear DuBray’s appeal?

[¶ 6.] The State contends that an appeal from an order of direct contempt is not an appeal from a final judgment of conviction and therefore not subject to appeal under SDCL 23A-32-2, which provides:

An appeal to the Supreme Court may be taken by the defendant from final judgment of conviction.

The State also claims that this Court has no jurisdiction because the appellate case was not “disposed of’ within 30 days of filing the appeal pursuant to SDCL 23A-38-7, which provides:

Any person confined pursuant to § 23A-38-1 or 23A-38-2 shall be admitted to bail or released in accordance with chapter 23A-43, pending the determination of an appeal taken by him from the order of his confinement unless it affirmatively appears that the appeal is frivolous or taken for delay. Any appeal from an order of confinement under this section shall be disposed of as soon as practicable, and in no event more than thirty days from the filing of such appeal.

[¶ 7.] In 1893, this Court recognized that a final judgment in proceedings for criminal contempt could be reviewed by a writ of error under the general criminal procedure statutes. State v. Knight, 3 S.D. 509, 54 N.W. 412 (1893). In 1919, however, writs of error were abolished and appeal substituted. S.D.Rev.Code 1919, §§ 5030, 5031. Thereafter, in 1934, this Court held that a criminal contempt proceeding is a criminal proceeding, “and the adjudication is a judgment of conviction” appealable under the statute that then allowed appeals “[f]rom a final judgment of conviction.” State v. American-News Co., 62 S.D. 456, 465, 253 N.W. 492, 496 (1934). This Court has continued to adhere to this precedent by allowing criminal contempt appeals pursuant to SDCL ch. 23A-32. See State v. Bullis, 315 N.W.2d 485 (S.D.1982); Karras v. Gannon, 345 N.W.2d 854 (S.D.1984). Therefore, this Court has jurisdiction to review this case.

ISSUE TWO

[¶ 8.] Did the trial court err when it found DuBray in direct criminal contempt of court pursuant to SDCL 23A-38-1?

[¶ 9.] SDCL 23A-38-1 provides:

Criminal contempt may be punished summarily if a judge or magistrate judge certifies that he saw or heard the conduct constituting the contempt and that it was committed in the actual presence of the court. An order of contempt shall recite the facts and shall be signed by the judge or magistrate judge and entered of record. Contempt prosecuted under this section shall be punishable by imprisonment of not more than thirty days in the county jail or a fine not exceeding one hundred dollars, or both.

[¶ 10.] DuBray contends that his actions do not rise to the level of criminal contempt because he merely whispered to himself outside of the courtroom. Consequently, he argues his actions were outside of the presence of the court, that did not either see or hear them. He also claims that the use of the term “bitch,” while inappropriate, is not necessarily disparaging to women.

[¶ 11.] The act of criminal contempt is directed at the power and dignity of the court American-News, 62 S.D. at 459, 253 N.W. at 493. It is “usually defined as words spoken or acts committed in the presence of the court or during its intermission which tend to subvert, embarrass or prevent the administration of justice and may be summarily punished by the presiding judge as [she] may deem just and necessary.” Fienup v. Rentto, 74 S.D. 329, 331-32, 52 N.W.2d 486, 488 (1952). “To constitute direct contempt, the act must be within the judge’s personal knowledge, although it does not necessarily have to occur inside a court or during the judicial proceeding.” 17 CJS Contempt § 4 (1999). “Direct contempt occurs when contumacious acts take place in the presence of the court, ... or when the acts are committed outside the presence of the judge but are admitted in open court.” In re Marriage of Marshall, 278 Ill.App.3d 1071, 215 Ill.Dec. 599, 663 N.E.2d 1113, 1120-1121 (1996).

[¶ 12.] In this case, the court saw DuBray pound the railing of the jury box, told him to cease and desist, and found this act to be contemptuous. In addition, the court heard DuBray utter something under his breath and within seconds DuBray admitted, in open court, to using the term “bitch.” The term “bitch” is slang used in some circumstances among some circles, but when applied to a woman, it is, by definition, offensive. The American Heritage College Dictionary, 3d ed (1997). While contempt of court is directed to the court itself rather than to the individual judge, in court proceedings the court is so much the judge and the judge so much the court that contempt of one is contempt of another. 17 CJS Contempt at § 3. Here, it was clearly directed at a female judge, as DuBray’s letter of apology indicates.

[¶ 13.] The court was correct in finding DuBray in direct criminal contempt of court under SDCL 23A-38-1. The court’s comments are apt, “The Court finds it’s necessary for control of the Court’s decorum and to assure that all litigants express proper respect towards the Court and towards judicial proceedings.”

ISSUE THREE

[¶ 14.] DuBray also contends that he was entitled to a contempt hearing under SDCL 23A-38-2 and disqualification of the judge at this hearing because his contempt was not direct. DuBray committed direct, criminal contempt. Accordingly, there is no merit to this issue.

[¶ 15.] Affirmed.

[¶ 16.] MILLER, Chief Justice, SABERS, AMUNDSON, KONENKAMP and GILBERTSON, Justices, participating.

       Dubray claims he did not intend the negative connotation concerning women when he referred to the trial court as a "bitch." Under the circumstances of this case, such a claim is dubious. However even if Dubray's claim is accepted at face value, the other recognized definition of this term is that of a female dog. See Webster's New World Dictionary, (2d ed 1984) Thus, even under Dubray's interpretation of the incident, he called the court a dog which in itself is contemptuous.


author: KONENKAMP, Justice SABERS, Justice

text:
    2000 SD 138
    STATE of South Dakota, Plaintiff and Appellant, v. Nancy MARTIN, Defendant and Appellee.
    No. 21344.
    Supreme Court of South Dakota.
    Considered on Briefs Sept. 18, 2000.
    Decided Nov. 1, 2000.
    Mark Barnett, Attorney General, Sherri Sundem Wald, Assistant Attorney General, Pierre, South Dakota, Attorneys for plaintiff and appellant.
    Gregory T. Brewers, Beresford, South Dakota, Attorney for defendant and appel-lee.
   KONENKAMP, Justice

[¶ 1.] If an out-of-state resident operates a motor vehicle in South Dakota with a valid driver’s license from one state and a revoked license from another, does probable cause exist to arrest the driver for driving under revocation? We answer affirmatively and reverse the circuit court’s decision to the contrary.

FACTS

[¶ 2.] Early in the morning of October 11, 1999, North Sioux City police officer Elliot Crayne stopped Nancy Martin’s vehicle for speeding. The vehicle bore Iowa license plates and, when the officer cheeked its registration, he found that it was registered to Martin and another party at an address in Sioux City, Iowa. When the officer asked Martin for her driver’s license, however, she gave him a Nebraska license issued to her in October 1998 at an address in Winnebago, Nebraska. With the discrepancy between Martin’s Iowa vehicle registration and her use of a Nebraska driver’s license, the officer radioed dispatch to verify Martin’s driver’s license status in both Iowa and Nebraska. Dispatch reported that Martin had a valid Nebraska license, but it also reported that her license in Iowa was revoked. Based on this information, the officer arrested Martin for driving with a revoked license.

[¶ 3.] When a person is arrested for driving with a revoked license, it is the policy of the North Sioux City Police Department to have the person’s vehicle towed to an impound location. It is also the Department’s policy to inventory any valuables left inside the vehicle before it is towed. Acting in accord with this policy, Officer Crayne inventoried Martin’s vehicle after her arrest. His findings were relayed to the trial court during the following exchange at the suppression hearing:

Q And did you find anything, and if so, where, in relation to contraband?
A Yes, I did. In the front seat of the vehicle, I found a black backpack. Within the black backpack I found a small black change purse. When opened, I discovered two small blue Ziplock baggies with a white powder inside also.
Q Okay. And you - I guess you inventoried this small black purse for what possibly?
A Cash, money.
Q Okay. What else did you find?
A Lying inside of the backpack, I found stem seeds, which I believed to be marijuana.

[¶ 4.] Martin was indicted on one count of possession of a controlled substance, one count of possession of marijuana, and one count of driying with a revoked license. Martin’s counsel moved to suppress the evidence seized from her vehicle on the grounds that her arrest and the related inventory search were invalid. After a hearing on the motion, the trial court entered findings of fact, conclusions of law, and an order suppressing the evidence. We granted the State’s petition for intermediate appeal.

ISSUE

[¶ 5.] Did the trial court err in suppressing the evidence seized from Martin’s vehicle?

[¶ 6.] We review factual findings under the clearly erroneous standard, and once the facts have been decided, the application of a legal standard to those facts is a question of law reviewed de novo. State v. Hirning, 1999 SD 53, ¶ 8, 592 N.W.2d 600, 603. Probable cause to arrest exists when an officer has reasonably trustworthy information that a suspect has committed or is committing an offense. Id. at ¶ 13, 592 N.W.2d at 604. We examine the arresting officer’s actions under the totality of circumstances. State v. Hanson, 1999 SD 9, ¶ 13, 588 N.W.2d 885, 890. Whether a lawful basis existed to conduct a warrantless search is reviewed de novo as a question of law. State v. Buchholz, 1999 SD 110, ¶ 9, 598 N.W.2d 899, 902.

[¶ 7.] The circuit court ruled that Officer Crayne did not have a lawful basis to conduct the warrantless search of Martin’s vehicle because he lacked probable cause to arrest Martin. The court further concluded that this lack of probable cause invalidated the arrest and the related inventory search of Martin’s vehicle. We hold that based on a practical and reasonable view of the totality of the facts known to Officer Crayne at the time of Martin’s arrest, there was adequate probable cause to support the arrest and to validate the related inventory search of Martin’s vehicle.

[¶ 8.] The circuit court placed heavy emphasis on its finding that Officer Crayne knew Martin had a valid Nebraska driver’s license. Therefore, the court concluded that the officer knew Martin had valid South Dakota driving privileges under SDCL 32-12-24 and that there was no basis for him to arrest her for driving with a revoked license. Yet the trial court ignored in its findings and conclusions that the officer also knew that Martin’s driver’s license in Iowa had been revoked. Thus, the officer was confronted with conflicting information on whether Martin had a valid out-of-state driver’s license. It does not fall upon an arresting officer at the scene to sort through the available information and make a “fine resolution of conflicting evidence.” See State v. Johnson, 660 So.2d 942, 946 (La.Ct.App.1995)(determi-nation of probable cause does not require the fíne resolution of conflicting evidence that a reasonable doubt or even a preponderance standard demands). Officer Crayne was not obligated and could not be expected to have sorted out at the scene whether Martin’s privilege to drive on South Dakota’s highways was valid with a Nebraska license or invalid under Iowa’s revocation. These are matters more properly decided in subsequent legal proceedings.

[¶ 9.] The issue for arresting officers is whether they have trustworthy information sufficient to warrant a reasonable belief that a suspect is committing an offense. Hirning, supra. In this instance, the officer possessed such information and, therefore, his arrest of Martin and the inventory search of her vehicle were valid. See U.S. v. Caves, 890 F.2d 87, 93 (8th Cir.1989)(inventory search constitutionally permissible if individual whose possession is to be searched has been lawfully arrested and search satisfies the Fourth Amendment standard of reasonableness). See also State v. Flittie, 425 N.W.2d 1, 6 (S.D.1988)(inventory search of vehicle is an incidental administrative step following arrest). It follows that the trial court erred in suppressing the evidence seized as a result of the search.

[¶ 10.] Reversed and remanded.

[¶ 11.] MILLER, Chief Justice, and GILBERTSON, Justice, concur.

[¶ 12.] SABERS and AMUNDSON, Justices, dissent.

SABERS, Justice

(dissenting).

[¶ 13.] A plurality of this Court has determined that a person driving with a revoked, suspended or expired license is súb-ject to arrest, search, interrogation, and having the contents of their vehicle inventoried. See State v. Vocu, 2000 SD 109, ¶ 11, 615 N.W.2d 623; State v. Brassfield, 2000 SD 110, ¶ 16, 615 N.W.2d 628. This intrusion is unwarranted and flies in the face of statutory authority. See Vocu, 2000 SD 109, ¶¶ 16-21, 615 N.W.2d at 626-28 (Amundson, J., dissenting); Brassfield, 2000 SD 110, ¶¶ 22-27, 615 N.W.2d at 632-34 (Sabers, J., dissenting).

[¶ 14.] SDCL 32-12-65 provides that “[a]ny person who drives a motor vehicle on any public highway of this state at a time when his privilege” is revoked suspended or canceled is subject to a misdemeanor offense. Additionally, SDCL 32-33-2 provides in relevant part:

Except as otherwise specifically provided, whenever a person is arrested for a violation of any provision of this title punishable as a misdemeanor, the arresting officer shall take the name and address of the person and the license number of his motor vehicle and driver’s license and issue a summons or otherwise notify him in writing to appear at a time and place to be specified in the summons or notice.... The arresting officer shall upon the person’s written promise to appear, release him from custody.

(emphasis added). Because driving with a suspended, revoked, or canceled license is a misdemeanor and not specifically exempted from SDCL 32-33-2, that statute applies to Martin. Therefore, “the arresting officer shall upon [Martin’s] written promise to appear, release [her] from custody.” SDCL 32-33-2.

[¶ 15.] Martin was not released from custody as provided by SDCL 32-33-2. Instead, she was arrested, her vehicle impounded, and its contents inventoried and seized. The contents illegally seized by law enforcement as a result of the illegal detention should be suppressed.

[¶ 16.] By ignoring the specific requirements of SDCL 32-33-2, a plurality of this Court subjects anyone driving with a revoked, suspended or canceled license to custodial arrest and the illegal search that follows such arrest. Such an interpretation eviscerates the protection provided by the South Dakota Legislature and is contrary to the plain meaning of the statutes. See Vocu, 2000 SD 109, ¶¶ 16-21, 615 N.W.2d at 626-28 (Amundson, J., dissenting); Brassfield, 2000 SD 110, ¶¶ 22-27, 615 N.W.2d at 632-34 (Sabers, J., dissenting).

[¶ 17.] Therefore, I respectfully dissent for these reasons and the reasons stated in Vocu and Brassfield. See Vocu, 2000 SD 109, ¶¶ 16-21, 615 N.W.2d at 626-28 (Amundson, J., dissenting); Brassfield, 2000 SD 110, ¶¶ 22-27, 615 N.W.2d at 632-34 (Sabers, J., dissenting).

[¶ 18.] AMUNDSON, Justice, joins this dissent.

      . SDCL 32-12-65(1) provides:
      Any person who drives a motor vehicle on any public highway of this state at a time when his privilege is:
      (1) Revoked is guilty of a Class 1 misdemeanor!.]

      . SDCL 32-12-24 provides:
      A nonresident who is at least sixteen years of age and who has in his immediate possession a valid operator's license issued to him in his home state or country may operate a motor vehicle in this state without a license under this chapter.

      . At the suppression hearing and in this appeal, Martin’s counsel repeatedly took the position that it was only Martin's in-state driving privileges in Iowa that were revoked and not her driver’s license. However, there was never any such evidence to this effect. Officer Crayne consistently testified during the suppression hearing that he sought to verify Martin’s "license” status at the time of the arrest and that it was her "license” that was revoked. Whether that ultimately proves to be accurate is a matter more properly decided by a trier of fact after a trial or evidentiary hearing, not by a law enforcement officer making a probable cause determination at the scene of a potential traffic violation.


author: MILLER, Chief Justice.

text:
    2000 SD 139
    FRATERNAL ORDER OF EAGLES # 2421 OF VERMILLION, South Dakota, Plaintiff and Appellee, v. Paul HASSE, d/b/a Coyote Vending and Lottery Company, Defendant and Appellant.
    No. 21262.
    Supreme Court of South Dakota.
    Considered on Briefs Sept. 18, 2000.
    Decided Nov. 8, 2000.

      Craig K. Thompson, Vermillion, Attorney for plaintiff and appellee.
    James E. McCulloch, Vermillion, Attorney for defendant and appellant.
   MILLER, Chief Justice.

[¶ 1.] In this declaratory judgment action, we hold that a video lottery lease was not effectively terminated.

FACTS

[¶ 2.] The Fraternal Order of Eagles #2421 (F.O.E.) of Vermillion, South Dakota entered into a written lease with Paul Hasse on September 6, 1989. The lease provided that F.O.E. would lease floor space to Hasse for installation of video lottery machines in return for Hasse’s remittance of a specified percentage of the net proceeds earned by the machines. According to the terms of the lease, it would automatically renew every four years unless either party exercised the termination provision contained therein. Under this provision, either party could cancel the lease by providing written notice to the other by certified mail no less than sixty days prior to the end of the current four year term. Neither party exercised the option to terminate in 1993, so the lease, according to its terms, automatically renewed for another four years beginning September 6,1993.

[¶ 3.] On June 22, 1994, ten months after the lease automatically renewed, this Court declared video lottery unconstitutional. Poppen v. Walker, 520 N.W.2d 238 (S.D.1994). Hasse’s video lottery machines at the F.O.E. building were turned off. The machines were again activated on November 22, 1994 subsequent to a general election where South Dakota voters amended the South Dakota State Constitution by permitting video lottery. The constitutional amendment authorizing video lottery contained a specific savings clause ratifying and approving leases of the type between F.O.E. and Hasse. However, on November 16, 1994 under the mistaken belief that pursuant to Poppen the 1989 lease was null and void F.O.E. sent Hasse a letter requesting that he remove his machines within forty-eight hours of receipt of its letter. This letter precipitated a meeting between the parties to discuss modifying the original lease. Out of this meeting, F.O.E.’s attorney produced a Memorandum Agreement purporting to modify the original lease. Neither party ever signed the agreement. Hasse’s machines continued to operate at the F.O.E. and he continued to make payments according to the terms in the 1989 lease.

[¶ 4.] On August 8, 1997, F.O.E. sent Hasse another letter purporting to terminate the lease pursuant to the unsigned Memorandum Agreement. Again Hasse met with F.O.E. on September 9, 1997 to discuss the lease. According to notes from the meeting, the stated purpose was to maximize profits for F.O.E. The parties discussed ways to accomplish this goal and proceeded forward. Hasse continued to operate the machines in F.O.E.’s building and pay it the percentage of net proceeds provided for under the 1989 lease.

[¶ 5.] On February 19, 1999, F.O.E. sent Hasse a letter asking him to attend a meeting to discuss the relationship between the parties. Hasse met with F.O.E., but he refused to negotiate. F.O.E then sent Hasse a certified letter on April 5, 1999 stating its desire to end any further lease relationship with him. The letter stated F.O.E.’s position that it was unsure whether the parties were operating under the 1989 lease or the Memorandum Agreement’s purported modification of the 1989 lease. The letter reiterated F.O.E.’s mistaken belief that this Court’s Poppen decision invalidated the 1989 lease. F.O.E. filed a notice of termination in circuit court on May 20, 1999 and sent Hasse a certified letter of such notice. The letter stated F.O.E.’s desire to terminate any and all contracts or leases existing between the parties.

[¶ 6.] Hasse’s video lottery machines have remained in the F.O.E. building at all pertinent times. Except for the brief period between our Poppen decision and the constitutional amendment, Hasse has continued to operate the machines and pay F.O.E. according to the terms set forth in the 1989 lease.

[¶ 7.] F.O.E. commenced this declaratory judgment action in circuit court asking the court 'to determine whether the 1989 lease, the Memorandum Agreement or some other arrangement governed the relationship between the parties. The complaint also asked the court to determine the effective termination date of the parties’ contractual relationship. The circuit court held that the 1989 lease governed the parties’ relationship and that the November 16,1994 letter effectively terminated the lease as of September 6, 1997. Hasse appeals. We reverse.

STANDARD OF REVIEW

[¶ 8.] This Court reviews declaratory judgments as we do any other order, judgment, or decree. SDCL 21-24-13; Mid-Century Ins. Co. v. Lyon, 1997 SD 50, ¶ 4, 562 N.W.2d 888, 890. We give no deference to a trial court’s conclusions of law under the de novo standard of review. Wood v. South Dakota Cement Plant, 1999 SD 8, ¶ 9, 588 N.W.2d 227, 229 (citing Jasper v. Smith, 540 N.W.2d 399, 401 (S.D.1995)).

DECISION

[¶ 9.] The circuit court decided that the November 16, 1994 letter effectively terminated the video lottery lease preventing a four year renewal on September 6, 1997. For reasons set forth below, we disagree.

[¶ 10.] The circuit court arrived at its conclusion by adopting a holding from a 1962 federal case originating out of Iowa. There, the United States Eighth Circuit Court of Appeals adopted what F.O.E. terms the “erroneous date doctrine.” Shain v. Washington Nat’l Ins. Co., 308 F.2d 611, 614 (8th Cir.1962). The court therein stated:

the general rule that where a contract, whether it be one for employment or for insurance or of a different kind, requires written notice of cancellation upon a stated time, a notice failing to meet the time requirement, but otherwise appropriate, is nonetheless effective upon the lapse of the time required by the contract.

Id. Based upon this language, the trial court concluded as a matter of law that F.O.E.’s November 16, 1994 letter to Hasse effectively terminated the video lottery lease in September 1997.

[¶ 11.] We note at the outset that Shain is not binding on issues of South Dakota state law. S.D. Const. art. V, § 2; State v. Fountain, 534 N.W.2d 859, 864 (S.D.1995); State v. Janis, 317 N.W.2d 133, 137 (S.D.1982). In fact, the Shain court was itself simply predicting what the Iowa Supreme Court would do were it presented with the same question. Shain, 308 F.2d at 617.

[¶ 12.] In reality, this is a simple contract case. F.O.E.’s November 16, 1994 letter did not act as a notice of termination under the lease. On the contrary, it simply stated its erroneous belief that the lease was null and void and requested Hasse to remove his machines within forty-eight hours. As stated above, F.O.E.’s belief was erroneous because specific language in the amendment to the South Dakota Constitution permitting video lottery contained a savings clause which ratified and approved such leases. S.D. Const. art. III, § 25. F.O.E.’s letter informed Hasse that it would be seeking new video lottery services to be operative upon the effective date of the amendment permitting video lottery. We cannot understand why F.O.E. erroneously believed the 1989 lease was null and void in light of the specific language in the savings clause which ratified and approved the type of lease F.O.E. had with Hasse. The November 16, 1994 letter cannot be said to have acted as a notice of termination under a lease it erroneously declared null and void.

[¶ 13.] The events following the November 16, 1994 letter add further support that it was not in fact a notice of termination. After F.O.E. sent the letter, the date set for removal of Hasse’s machines came and went while the parties continued their discussions. Furthermore, F.O.E. attempted but failed to negotiate a modification of the lease as pertains to the length and automatic renewal provisions subsequent to the November 16, 1994 letter. After the failed attempt at modifying the 1989 lease, Hasse continued to operate his video lottery machines at F.O.E., and paid according to the 1989 lease. These payments were accepted by F.O.E. without protest.

[¶ 14.] Hasse did not hear from F.O.E. again until August 8, 1997 when F.O.E. sent Hasse a notice of termination. This notice fell far short of the sixty day notice F.O.E. agreed to under the lease and is insufficient as a matter of law to terminate the 1989 lease. Associated Press v. Heart of Black Hills Stations, Inc., 325 N.W.2d 49, 52-53 (S.D.1982) (citing Standard Pub. Corp. v. Mitchell Pub. Co., 59 S.D. 552, 554, 241 N.W. 520, 521 (1932)). It would be fundamentally unfair to allow F.O.E. to claim in hindsight that its November 16, 1994 letter erroneously declaring the lease null and void was in fact a proper notice of termination under that lease.

[¶ 15.] F.O.E. argues that Hasse took advantage of F.O.E.’s managerial confusion caused by the election of new trustees every three years. We reject this argument. According to the record, F.O.E. trustees are elected to manage F.O.E.’s business matters. The 1989 video lottery lease was certainly such a business matter. Any confusion F.O.E. claims existed was due in large part to the trustees’ failure to be clear and consistent in business dealings with Hasse.

[¶ 16.] Had F.O.E. wanted to terminate the lease effective September 1997, it simply needed to provide Hasse with proper notice of termination no less than sixty days prior to the end of the current four year term. It failed to do this. The November 16, 1994 letter did not terminate the lease, and the August 8, 1997 notice of termination was too late.

[¶ 17.] Reversed.

[¶ 18.] SABERS, AMUNDSON, KONENKAMP, and GILBERTSON, Justices, concur.

      . The savings clause in South Dakota Constitution article III, section 25 states:
      SDCL 42-7A, and its amendments, regulations, and related laws, and all acts and contracts relying for authority upon such laws and regulations, beginning July 1, 1987, to the effective date of this amendment, are ratified and approved.

      . We note in the record that F.O.E. did ultimately provide Hasse with an effective notice of termination. Accordingly, the lease will terminate September 5, 2001 and will not renew itself on September 6, 2001, absent contrary agreement by the parties.