author: GIENAPP, Circuit Judge.

text:
    2005 SD 101
    Daniel C. GODFREY, Plaintiff and Appellee, v. Pamila K. GODFREY, Defendant and Appellant.
    No. 23312.
    Supreme Court of South Dakota.
    Considered on Briefs May 23, 2005.
    Decided Sept. 28, 2005.

      Barton R. Banks of Banks, Johnson, Colbath, Sumner & Kappelman, Rapid City, South Dakota, Attorneys for plaintiff and appellee.
    Linda Lea M. Viken of Viken Law Firm, Rapid City, South Dakota, Attorneys for defendant and appellant.
   GIENAPP, Circuit Judge.

[¶ 1.] Pamila K. Godfrey appeals from a judgment and decree of divorce. This appeal challenges the division of property and, specifically, the determination by the trial court that certain property was non-marital property.

[¶ 2.] The trial of this matter was held on January 28 and 29, 2003. Additional hearings were held on May 19, 2003, September 30, 2003, December 31, 2003, and April 6, 2004. The judgment and decree of divorce was signed and filed on April 26, 2004. We reverse and remand.

FACTS

[¶ 3.] Pamila and Daniel Godfrey were married in Florida in 1977. At the time of the marriage Pamila was eighteen years old and Daniel was twenty-four. That same year the couple moved to South Dakota and Daniel began his employment with a family owned business. The couple had three children, all of whom were adults at the time of the divorce. Both parties resided in South Dakota.

[¶ 4.] Daniel was employed and was a minority stockholder in the family owned business known as Godfrey Brake Service, Inc. The business was located in Rapid City, South Dakota. Daniel was earning a base salary of $50,000 per year plus dividends ranging from $20,000 to $48,000 per year.

[¶ 5.] Pamila was a stay-at-home mother for approximately ten years while the children were at a young age. She held a volunteer position at the YMCA during portions of that ten year time period. The volunteer position evolved into a paid position with the gymnastics program. Pamila ultimately rose to the position of gymnastics director at the YMCA. She was injured in a work related accident in 1989 that resulted in nine surgeries over a seven year period. She resigned her position in 1995. The accident caused injuries to Pamila’s femur, ribs, back and pelvis. Pa-mila received a worker’s compensation settlement of $887,485.43. Approximately $70,000 of the settlement was used to pay off a mortgage on the parties’ homestead.

[¶ 6.] After leaving her employment with the YMCA in 1995, Pamila started a private business called Rising Star Gymnastics. The profitability of the business was minimal.

[¶ 7.] Daniel’s parents owned real estate on Highway 16 near Rapid City. His parents had three children and in 1992 they made lifetime distributions of some of their estate. One of the three children did not want real estate and was given a cash distribution. Daniel and Pamila and Daniel’s brother and his spouse were deeded portions of the Highway 16 real estate. Daniel and Pamila received 66.410 acres of land platted as Lot 2 of the Godfrey Addition. On July 31, 1992, Daniel’s parents executed a warranty deed conveying Lot 2 to Daniel and Pamila as joint tenants with rights of survivorship. A corrective deed was filed in 1994 which also listed Daniel and Pamila as joint tenants. In addition, Daniel’s father and mother filed separate gift tax returns. Each return specified that an undivided one-fourth interest in the property was gifted to Pamila and an undivided one-fourth interest was gifted to Daniel.

[¶ 8.] Subsequent to their receipt of the gifted property, Daniel and Pamila sold their previous residence and built a home on the 66.410 acre tract. They were still residing in that home at the time of the commencement of this action.

[¶ 9.] During pretrial negotiations Daniel and Pamila agreed that the home and approximately 10 acres out of the 66.410 acre tract were marital property. They did not agree that the remaining 56 acres of gifted property was marital property subject to distribution. Resolution of that dispute was left to the trial court. The trial court found that the remaining 56 acres of gifted property was non-marital property and awarded it to Daniel.

ISSUES

[¶ 10.] The following issues are presented in this appeal:

Whether the trial court erred in excluding the 56 acres of gifted property from marital property and in failing to consider the value of the 56 acres in making the appropriate distribution of property. If the trial court was correct in excluding the 56 acres of gifted property from marital property, whether the appreciation in value of the gifted property should have been included as a marital asset.
Whether Pamila is entitled to attorney fees on appeal.

STANDARD OF REVIEW

[¶ 11.] The standard of review is the abuse of discretion standard. Pellegrin v. Pellegrin, 1998 SD 19, ¶ 10, 574 N.W.2d 644, 646. Abuse of discretion refers to a discretion exercised to an end or purpose not justified by, and clearly against, reason and evidence. Id. The determination is not “ ‘whether we would have made the same ruling, but whether “a judicial mind, in view of the law and the circumstances of the particular case, could reasonably have reached such a conclusion.” ’ ” (quoting DeVries v. DeVries, 519 N.W.2d 73, 75 (S.D.1994)). Findings of fact, reviewed under the clearly erroneous standard, will not be overturned unless the reviewing court is left with a firm conviction that a mistake has been made. Hilbrands v. Hilbrands, 429 N.W.2d 750, 751 (S.D.1988).

ANALYSIS ISSUE ONE

[¶ 12.] Whether the trial court erred in excluding the 56 acres of gifted property from marital property and in failing to consider the value of the 56 acres in making the appropriate distribution of property.

[¶ 13.] The evidence in this case established certain specific and unique facts that require reversal and the inclusion of the disputed 56 acres as marital property subject to distribution by the trial court.

[¶ 14.] SDCL 25-4-44 provides:

When a divorce is granted, the courts may make an equitable division of the property belonging to either or both, whether the title to such property is in the name of the husband or the wife. In making such division of the property, the court shall have regard for equity and the circumstances of the parties.

[¶ 15.] In Billion v. Billion, 1996 SD 101, 553 N.W.2d 226, this Court stressed the fact that a court must consider both equity and the circumstances of the parties when a property division is made.

[¶ 16.] Before a court sets aside properties as non-marital there are seven principal factors that this Court has repeatedly held should be considered. These seven factors are:

(1) the duration of the marriage; (2) the value of the property owned by the parties; (3) the ages of the parties; (4) the health of the parties; (5) the competency of the parties to earn a living; (6) the contribution of each party to the accumulation of the property; and (7) the income-producing capacity of the parties’ assets.

Pellegrin, 1998 SD 19 at ¶21, 574 N.W.2d at 648 (quoting Billion, supra.) The Pel-legrin court went on to state: “Only in the case where one spouse has made no or de minimis contributions to the acquisition or maintenance of an item of property and has no need for support, should a court set it aside as ‘non-marital’ property.” Id.

[¶ 17.] In this case the trial court made the following finding of fact relating to the real estate at issue:

Despite the form of this transaction, the Court finds that this land was intended to be Plaintiffs inheritance and is not marital property. No marital monies were spent in the acquisition of this property and the monies used to pay the real estate taxes were largely, if not entirely, obtained from dividends issued by Godfrey Brake Service. Further, this property borders other land gifted to Plaintiffs brother as well as land retained by Raymon and Gladys God-frey. Accordingly, based upon the intent of the donor and the treatment of the property by the parties after the gift, the Court finds that this property is not marital property except as to the 10 acres that the parties have stipulated is appurtenant to the marital residence.

[¶ 18.] The trial court made the following conclusion of law:

The real property gifted by Raymon and Gladys Godfrey along Highway 16, other than the ten acres associated with the marital residence as stipulated between the parties, is not marital property and shall be retained by the Plaintiff as his sole and separate property free of any claim by the Defendant. In making this conclusion, the Court is considering the intention of the donor who made the gift, the date of the gift, the nature of the property gifted, the treatment of the gifted property by the parties during their marriage, the assets and debt being distributed to each party, and is placing substance over form.

[¶ 19.] The trial court did not address in either its findings of fact or its conclusions of law the seven principal factors to be considered. Rather, the trial court relied primarily on the intention of the donor. The intention of the donor may be considered by the trial court, but it is not the deciding factor. With respect to inherited property, it is not ipso facto excluded from consideration in the overall division of property. Gamos v. Gamos, 376 N.W.2d 571, 573 (S.D.1985).

[¶ 20.] An examination of the seven principal factors, combined with other evidence unique to this case, establishes that the disputed property should have been included as marital property. The duration of this marriage was approximately twenty-six years and brought into this world three children who are now adults. Pamila had significant health problems as a result of the 1989 accident that led to nine surgeries over a seven year period. This resulted in a significant worker’s compensation settlement. Daniel has a significantly greater competency to earn a living than Pamila. Daniel retained the stock in the family corporation, an asset with significant income producing capacity. Pami-la had no training or education other than her experience in gymnastics.

[¶ 21.] Under the facts it is also clear that Pamila made more than de minimis contributions to the acquisition or maintenance of the property. The real estate taxes were paid out of marital assets. Pa-mila was involved in entering into a contract for the construction of a road across the property. She was a participant in an agreement with Daniel’s parents and brother and sister-in-law concerning a well. She was also a participant in developing other easements related to the property. Daniel and Pamila entered into a contract with a construction company to build a road across the property. They constructed a fence around the land, landscaped it and planted trees. All of those improvements were paid for with marital funds. Proceeds from the sale of hay harvested from the property were deposited in marital accounts. The parties built a home on the parcel which was divided into separate parcels for the purpose of this litigation. The fact that real estate taxes may have been paid out of dividends received by Daniel does not mean that Pami-la did not contribute as the dividends were a marital asset.

[¶ 22.] In Billion this Court discussed the fact that it always reviews property divisions and post-divorce alimony awards in conjunction with each other. In this case Pamila was awarded alimony of $800 per month. Daniel was awarded a judgment of $181,655.50 against Pamila payable in fifteen years with. interest at the rate of six percent per annum. This judgment was granted primarily to equalize assets as a result of Pamila receiving the marital home built on the gifted property. The alimony award did not obviate the error in the non-marital property designation in light of the sizeable judgment against the home.

[¶23.] -Other unique facts involved in this case supported the inclusion of the gifted property as marital property such as the form of the deeds involved and the filing of the federal gift tax returns. Although. the trial court was not bound by the form of the deed, this Court has held that a deed conveying real estate to a husband and wife as joint tenants is convincing evidence of the realty’s status as marital property. See Heckenlaible v. Heckenlaible, 1996 SD 32, ¶ 8, 545 N.W.2d 481, 483. In Billion one of the decisive factors was that there was no question that the assets at issue in that case were not given jointly to the parties.

[¶ 24.] In addition to the foregoing, Daniel’s mother and father filed separate federal gift tax returns designating on each return that each of the parties to this action received an undivided one-fourth interest.

[¶ 25.] In deciding the nature of these transactions was form over substance, the trial court relied on the following deposition testimony from Daniel’s father:

Initially, we gave them — we split, between him and Bob, the land, equally and it was given to the two boys, and they were married and so their wives names was on there, too.

[¶ 26.] When asked about the fact that both names were on the warranty deed Daniel’s father responded: “Well, that’s what it said on the sheet, but that isn’t the way we worded it when we gave it to them.” Further testimony was as follows:

Q: Was it given to them, jointly, on the ■ deed?
A: It was given to them.
Q: Well you put his wife’s name on the deed?
A: We didn’t make up the deed. It was done by an attorney and they put his wife’s name on there.
Q: But you and your wife both signed the deed?
A: Yes.

[¶ 27.] Such testimony, ten years after a transaction, was insufficient to overcome the evidence consisting of the deeds establishing joint tenancy and the representation to the federal government that the property was a gift to both Daniel and Pamila. This testimony ,was from Daniel’s father. No testimony was received from Daniel’s mother who also signed both the deeds and filed a separate gift tax return.

[¶ 28.] Under the foregoing facts unique to this case, this Court finds that the trial court abused its discretion and that the decision of the trial court was not justified by, and was clearly against reason and evidence. The trial court’s decision is reversed and the case is remanded with instructions to consider the 56 acres of gifted property as marital property.

ISSUE TWO

[¶ 29.] If the trial court was correct in excluding the 56 acres of gifted property from marital property, whether the appreciation in value of the gifted property should have been included as a marital asset.

[¶30.] As an alternate issue, Pamila argues that, at a minimum, the trial court should have considered the appreciation in the value of the gifted property that occurred after its receipt and during the marriage of the parties. Under our ruling on Issue One, all of the gifted property should have been considered as marital property and it is not necessary to address this issue.

ISSUE THREE

[¶ 31.] Whether Pamila is entitled to attorney fees on appeal.

[¶ 32.] Pamila moved this Court for an order granting attorney’s fees and costs in connection with this appeal. SDCL 15-17-38 provides for the allowance of attorney’s fees in divorce actions. The factors to be considered in awarding appellate attorney’s fees are: “ ‘The property owned by each party; their relative incomes; whether the requesting party’s property is in fixed or liquid assets; and whether either party unreasonable increased the time spent on the case.’ ” Strickland v. Stride-land, 470 N.W.2d 832, 840 (S.D.1991)(quoting Senger v. Senger, 308 N.W.2d 395 (S.D. 1981)). Pamila’s counsel has requested $14,518.96 in attorney’s fees, sales tax, and costs in connection with this appeal. After consideration of the appropriate factors, including the central issue on appeal, this Court awards Pamila attorney fees in the sum of $7,250.

DECISION

[¶ 33.] Based upon the foregoing, we hold that the trial court erred in excluding the 56 acres of gifted property from marital property. The decision of the trial court is reversed and the case is remanded to the trial court to consider the 56 acres as marital property in connection with the equitable division of the property of the parties. We further award Pamila attorney fees of $7,250 in connection with this appeal.

[¶ 34.] GILBERTSON, Chief Justice, and SABERS, ZINTER and MEIERHENRY, Justices, concur.

[¶ 35.] GIENAPP, Circuit Judge, for KONENKAMP, Justice, disqualified.

      . There was a factual dispute as to whether Pamila quit her position with the YMCA because of the work related injuries or just quit. The trial court found that she voluntarily quit her YMCA position.

      . The trial court found that Pamila was earning approximately $25,000 per year from the business at the time of trial.

      .Given that the acreage in the gifted property was not measured in whole numbers, the figure "56 acres” in this decision is used as an approximation of the amount of property actually in dispute, i.e. the original 66.410 acre tract less the agreed upon 10 acres.

      . This settlement, in the amount of $387,485.43, was a settlement under the worker’s compensation laws of the State of South Dakota. In addition to the use of settlement proceeds to pay off the mortgage on the homestead, portions of the settlement were utilized to pay off marital debt and also to fund Rising Star Gymnastics. The settlement amount was merged into the parties' finances and was not set aside as non-marital property. The trial court did find that Pamila was not disabled at the time of trial.

      . 26 USC § 7206 makes it a federal felony to willfully make and subscribe any return which the subscriber does not believe to be true and correct as to every material matter.

      . Pamila’s appellate counsel was not her trial counsel. In addition to considering the referenced factors this Court is also taking into consideration that increased time and cost occurs when new counsel appears on appeal which should not normally be the responsibility of the non-prevailing party.


source: Caselaw Access Project

author: MILLER, J.

license: Public Domain

text:
    In re the MARRIAGE OF Laura Kate ELLIS and James M. Ellis. Upon the Petition of Laura Kate Ellis, Petitioner-Appellee, and Concerning James M. Ellis, Respondent-Appellant.
    No. 04-1449.
    Court of Appeals of Iowa.
    Sept. 14, 2005.
    Margaret Lainson of Meardon, Sueppel & Downer, Iowa City, for appellant.
    John Hayek and Alison Smith of Hayek, Hayek, Brown, Moreland & Hayek, L.L.P., Iowa City, for appellee.
    Heard by VOGEL, P.J., and MILLER and HECHT, JJ.
   MILLER, J.

James Ellis appeals the physical care provisions of the decree dissolving his marriage to Laura Ellis. He contends the court erred in not granting his request for joint physical care of the parties’ minor son, Paxton. He argues that joint physical care is in the child’s best interests. We modify to award joint physical care and remand for further proceedings.

I. BACKGROUND FACTS AND PROCEEDINGS.

Laura and James were married on May 25, 1996. Laura filed a petition for dissolution of marriage on September 5, 2003. Trial was held on her petition August 3 and 4, 2004.

When the parties were married Laura had just graduated from the University of Georgia with a Bachelor of Science degree in secondary education. James earned a bachelor’s degree in music from Western Michigan University in 1991, with cello as his primary instrument. He met Laura at the University of Georgia while working on his masters degree in music, which he received in 1994. After they married the parties moved to Iowa City because James had been, accepted to a doctoral music arts program at the University of Iowa. After briefly holding other jobs, Laura took a job with National Computer Systems (NCS) in Iowa City in January 1997. She was still employed there at the time of the dissolution trial. James completed his doctorate in 1998. At the time of trial he was teaching music at Cornell College and playing with several different Iowa symphonies. James also gives private cello lessons out of his home.

The parties’ only child, Paxton Ellis, was born December 22, 2002. He was nineteen months old at the time of the trial. Laura stayed home for approximately three months after Paxton’s birth and provided his primary care. James was teaching at Wartburg College but was also actively involved in Paxton’s care during this time. In March of 2003, Laura went back to work at NCS, working approximately 7:30 a.m. to 4:00' p.m. Monday through Friday. When the Quad City Symphony season and James’s teaching obligations were completed in April 2003 he became Pax-ton’s primary care giver while Laura worked during the weekdays. Laura, however, continued to be actively 'involved in Paxton’s care during this time and cared for him during the evenings while James taught private lessons of was involved in various symphony activities. At trial each party was complimentary of the other party’s parenting skills.

The parties separated in October 2003 when Paxton was a little over ten months old. After the separation they almost equally shared Paxton’s care, in accordance with their work schedules. - Initially, James had Paxton every weekday, Laura had him every weeknight, and they would alternate weekends. During mediation in February 2004 it was agreed they would try a new schedule, proposed by James but agreed to by both parties. James would take care of Paxton during the weekdays while Laura worked, from approximately 6:30 a.m. to 4:00 p.m. Paxton would then spend Monday and Tuesday evenings and overnights with Laura, Wednesday and Thursday evenings and overnights with James, and they would then alternate the Friday, Saturday, and Sunday weekends. During the summer some of James’s weekday private cello lessons in the home would occur during the daytime and at those times Paxton would have to be with a babysitter, approximately eight hours per week. Laura testified that Paxton seemed to be ,well adjusted to this present schedule and happy in both homes. However, her objection- to the schedule is that there are times when it would be possible for her to go for five consecutive days without seeing Paxton.

Although Laura agreed Paxton was doing well with this shared physical care arrangement, and that James was a good parent, she requested the court grant her physical care and reject James’s request for joint physical care: Laura agreed they had been able to cooperate for the most part and to make certain Paxton saw both parents on a regular basis, but also testified that the reason they had been able to work out shared care was because she had usually gone along with what James wanted. She also agreed that it would be possible for the parties to cooperate to ensure Paxton’s success in a shared care arrangement if compromise was involved. However, she objected to joint physical care because she believed it would lead to more conflict and problems over the course of Paxton growing up than if one parent were able to make the decisions concerning Paxton.

Although Laura stated that at times since they had separated she and James had been able to reasonably discuss matters about Paxton, she felt that at other times James had issued “ultimatums” without opportunity for discussion. The main example given by Laura of the parties’ inability to communicate about decisions regarding Paxton was the fact James had not consulted her about having a babysitter to watch Paxton for. eight hours per week during the summer while he taught private cello lessons.

Laura testified that she had both a- personal objection to joint physical' care and did not think it would be best for Paxton. In response to a question on cross-examination concerning whether basically ■ she wanted to be the parent that makes the decisions, Laura answered she wanted to be able to work with James to make decisions “but, yes, I would in the event that it’s something that we cannot agree on, I would like to be the parent who makes the decision.” She agreed the parties should have joint legal custody of Paxton.

James testified that if joint physical care were ordered as he was requesting he and Laura would be able to communicate and cooperate for Paxton’s benefit. He believes joint physical care is in Paxton’s best interest because at all times since Paxton’s birth the parties have fully shared in his upbringing. He hoped that could continue. James testified that if the court did not order joint physical care his second choice would be that physical care of Paxton be placed with him. However, he still believed joint physical care was best because both parties are Paxton’s parents, they both want what is best for him, and they would- make the best decisions for him together. With regard to the summer babysitter issue, James agreed he should have specifically told Laura he was going to have a sitter for eight hours per week. However, James testified that he thought Laura would know he was going to have to do so because-it had been necessary to do so the previous summer, when the parties were still living together, and she was well aware of that arrangement.

Both parties agreed that James had a problem with alcohol in the past which culminated in an incident on a Friday in July 2003 when James got drunk. Laura testified she was afraid to go to sleep because she thought he would disappear with Paxton. She stated she thought he might take their vehicle and Paxton and try to drive, and if he had done so he could have killed himself or Paxton. James testified he remembered drinking on the day in question and that it was the- first and only time he had drank while Paxton was in his sole care. He remembered having a beer at a friend’s house, having more after he got home, and that he was cooking a meal when Laura got home around 4:00 p.m. However, James stated he does mot remember anything that took place that night after dinner. The next thing he remembered was waking up the next morning with a terrible hangover, Laura’s mother was there, and he could tell “peor pie were not happy.”

After this incident James decided to stop drinking. However, by the following Monday morning James actually felt worse and was dizzy. He was concerned enough to call Laura’s parents because her mother is a nurse. They came over and took James to the hospital where he was treated for dehydration. James testified he was never formally diagnosed as an alcoholic or told that he suffered from alcoholism but decided on his own that he had a problem with alcohol. He saw an alcohol and drug counselor for four sessions and attended Alcoholics Anonymous meetings. James testified he entirely stopped drinking for six months, kept no alcohol in his home, had not abused alcohol since the incident in July 2003, and drank only one or two drinks about four nights a month on social occasions and then only when he is not caring for Paxton. James acknowledged he had smoked marijuana until July 2003, but testified he had not smoked marijuana or used any other types of illegal substances since then.

After the July 2003 incident involving alcohol the parties continued to reside together for over three months during which time James continued to provide for Pax-ton’s daily care. Although at trial Laura testified that she has at times thought about and has been “scared” about the possibility of James drinking while he is watching Paxton, from the time Laura left the family home in, October 2003 to the time of trial James continued to provide daily care for Paxton while Laura worked and Laura voiced no concerns on the issue. Laura testified she had not seen James drink since the July 2003 incident.

The district court filed written findings of fact, conclusions of law, and a decree of dissolution on August 19, 2004. It ordered joint legal custody of Paxton but denied James’s request for joint physical care and instead placed physical care with Laura. James appeals. . ,

II. SCOPE AND STANDARDS OF REVIEW.

We conduct a de ■ novo review of physical care awards. In re Marriage of Murphy, 592 N.W.2d 681, 683 (Iowa 1999). Our overriding consideration is the child’s best interests. In re Marriage of Ford, 563 N.W.2d 629, 631 (Iowa 1997). We give weight to the fact findings of the district court, especially when considering the credibility of witnesses, but are not bound by them. Iowa R.App. P. 6.14(6)(y).

III. MERITS.

The district court found, in part, that the parties “have had problems in some communications and agreement as to decisions,” and that “[James] has had some serious substance abuse problems in the past.” In its conclusions of law the court stated, in part:

Under Iowa law there is a preference for joint custody with physical care granted to one parent and liberal visitation to the other....
Joint physical care or shared care is disfavored. [Citations]. All of the cited cases clearly require that the parents be able to communicate and cooperate with each other and respect each other’s parenting and lifestyles. Further, the arrangement must be shown to be in the best interests of the child and would foster a relationship with both parents.
Iowa Code Section 598.41(5) was amended effective July 1, 2004, to allow joint physical care upon the request of either party. If the request is made, a denial by the court must include specific findings of fact and conclusions of law that the awarding of joint physical care is not in the best interest of the children.

In the “Decision” portion of its ruling the district court stated, in relevant part:

The primary decision in this case is whether the parties shall share physical care or have the more common primary physical care division. There' is no question that either parent is capable of raising Paxton alone or having primary physical care of Paxton alone or having primary physical care of Paxton with very liberal visitation for the other. It is equally clear that shared care will not work in this case if shared care means sharing decisions. The Findings of Fact describe a relationship in which [James] has been unwilling to compromise when [Laura] does not agree with his point of view. [Laura] is not willing to concede all important issues to [James] when there is a disagreement. One of the ■ cornerstones of shared physical • care is the ability to communicate and reach mutually agreeable decisions. The court has no confidence in The ability of the parties to reach mutually agreed dé-cisions. The court has a substantial concern that in a crisis or important decision, [James] will not be willing to consider a contrary view of [Laura]. Not only would this lead to conflict between the parties, it would tend to teach Pax-ton destructive concepts in communication and relationships. The court will not grant shared care in this case.

The court further stated:

The more difficult decision is the choice of the party to be granted primary physical care. The parties love Paxton very much and have done an excellent job to this point in raising their son. The court is confident that Paxton will thrive with either parent. However, a choice must be made.

The court found the primary difference between the parties to be a history of substance abuse by James, not shared by Laura. Based on this history, together with a concern about a potential for James to use alcohol at some future time, the court' awarded Paxton’s physical care to Laura and “very liberal visitation” to James.

James first claims the district court ignored the legislative mandates of amended Iowa Code section 598.41(5) in denying his request for joint physical care. In 2004 the Iowa General Assembly amended Iowa Code section 598.41(5) to read, in relevant part, as follows:

If joint legal custody is awarded to both parents, the court may award joint physical care to both joint custodial parents upon the request of either parent. If the court denies the request for joint physical care, the determination shall be accompanied by specific findings of fact and conclusions of law that the awarding of joint physical care is not in the best interest of the child.

2004 Iowa Acts ch. 1169, § 1 (now codified at Iowa Code § 598.41(5) (2005)). This provision became effective July 1, 2004, and applies in this case, which was tried and decided in August 2004. James argues that the district court’s findings do not meet the requirement for- specific findings of fact as to why joint physical care is not in the child’s best interest. He further argues that following the 2004 amendment joint custody and joint physical care are the preferred custodial arrangements; that by holding Iowa continues to disfavor joint physical care the court mistakenly relied on outdated case law; and that the court thus erred in failing to adopt and apply the change in law effected by the 2004 amendment. Laura argues in response that the court’s decision, when read as a whole without undue focus on any particular sentence, does comport with the requirement for specific findings of fact and is not otherwise affected by error as claimed.

We agree with James that joint physical care no longer remains generally disfavored. In 1997 our General Assembly amended the relevant portion of section 598.41(5) to read, in part:

Joint physical care may be in the best interest of the child, but joint legal custody does not require joint physical care. When the court determines such action would be in the best interest of the child and would preserve the relationship between each parent and the child, joint physical care may be awarded to both joint custodial parents or physical care may be awarded to one joint custodial parent.

See 1997 Iowa Acts ch. 175, § 199 (previously codified at Iowa Code § 598.41(5) (2003)). Citing that amendment, we thereafter stated:

Although there is a multitude of case law stating joint physical care is strongly disfavored, the legislature recently proclaimed joint physical care a viable disposition of a custody dispute if in the best interests of the children. If the parents of the children are able to cooperate and respect each other’s parenting and lifestyles, a joint care arrangement can work.

In re Marriage of Walton, 577 N.W.2d 869, 870 (Iowa Ct.App.1998) (citations omitted). We thus believe that this 1997 legislation disavowed the general bias against joint physical care, finding it to be a viable disposition provided it is in the best interest of the affected child or children and the parents are able to appropriately communicate and cooperate.

We disagree, however, with James’s argument that following the 2004 amendment joint physical care is a preferred custodial arrangement. The 1997 legislation for the first time defined “joint physical care,” see 1997 Iowa Acts ch. 175, § 183 (now codified at Iowa Code § 598.1(4) (2005)), and the 1997 amendment to section 598.41(5) repeatedly employed the permissive term “may” when speaking of the court’s ability to award joint physical care. Following the 2004 amendment, section 598.41(5) still provides that the court “may” award joint physical care. The statute’s language following the 1997 amendment, as well as its language following the 2004 amendment, constitutes neither a ringing endorsement of joint physical care, nor a mandate for courts to grant joint physical care unless the best interest of the child requires a different physical care arrangement.

We also disagree with James’s argument that the district court’s findings of fact do not meet section 598.41(5)’s requirement that a court rejecting a party’s request for joint physical care make specific findings of fact as to why joint physical care is not in a child’s best interest. The court expressly recognized the statutory requirement for such findings. It found the parties had “problems in some communications and agreement as to decisions.” It later reasoned that its findings described a relationship in which James had been unwilling to compromise when Laura does not agree with his point of view. We agree with Laura that a court rejecting a request for joint physical care is not required to parrot the specific wording of section 598.41(5) by stating a finding in the specific terms that “the awarding of joint physical care is not in the best interest of the child [because].... ” We also agree that the court’s decision, when read as whole, does comport with the requirement for specific findings of fact in rejecting joint physical care.

We are left to consider whether, after giving appropriate weight to the district court’s findings of fact, we agree with those findings and the court’s resulting reasoning and conclusions rejecting joint physical care. Because the court’s view that joint physical care remains generally disfavored may have informed and influenced its decision, we carefully review the record to determine whether we agree with its findings, reasoning, and ultimate rejection of joint physical care.

The district court found that the parties had had “problems in some communications and agreements as to decisions.” This was based on findings that Laura had testified James had not been able to share decision making with her, when the parties were unable to agree the decisions were made by James without her consent, when she attempted to discuss conflicts James would not compromise, she felt verbally attacked when the parties could not reach agreement, and James made changes without her input which resulted in him having increased time with Paxton and her having less. The court concluded that although either parent was capable of raising Pax-ton alone, or having his physical care with the other parent having very liberal visitation, joint physical care would not work because as a result of James’s unwillingness to compromise the parties would be unable to reach mutually agreed decisions. For the reasons that follow we disagree to some extent with the court’s findings, and we respectfully disagree with its resulting decision to reject joint physical care.

The district court’s rejection of joint physical care was based on its view that the parties had been unable to reach shared decisions concerning Paxton, and would be unable to do so in the future, all largely as a result of James’s unwillingness to compromise when the parties had differing opinions. The court’s belief on this point was based largely upon Laura’s testimony. We have in the preceding paragraph briefly summarized the court’s principal findings concerning her testimony. Those findings and our review of the record reveal the very general nature of Laura’s complaints. Her principal example of James’s unwillingness to compromise is her complaint that in the summer of 2004 he did not consult her about having a babysitter for Paxton eight hours per week on the weekdays she was working, he had Paxton, and he gave some cello lessons during the daytime hours. However, as previously noted James acknowledged he should have discussed the matter with Laura, but he also points out that she was or should have been well aware of his need for the babysitter as his situation was the same as it had been while the parties were still living together during the prior summer. The record is for all practical purpose devoid of other concrete examples of events causing Laura’s complaints.

It appears the parties’ communication and cooperation has not at all times been the best, and probably more of the fault lies with James than with Laura. However, when a marriage is being dissolved we would find excellent communication and cooperation to be the exception and certain failures in cooperation and communication not to be surprising.

We also note and place great emphasis upon the parties’ highly successful shared care of Paxton from his birth to the time of the dissolution trial. The district court found that “[sjince the separation of the parties, they have essentially shared care of Paxton.” This finding somewhat understates the extent of the parties’ shared care, for the record in fact shows that they have almost equally shared Paxton’s care since his birth, although each has at times provided somewhat more of his care than the other has. In findings fully supported by the record and with which we agree the court also found that “each parent is complimentary of the training and care of Pax-ton by the other,” “Paxton is well adjusted, happy and thriving,” and “[b]oth parents live relatively close to each other at this time and expect that Paxton will be involved in school activities close to their current residences.” As we have earlier noted, the court also believed that either parent was capable of raising Paxton alone or having his physical care, with the other parent having very liberal visitation. At the time of trial the family had been living according to a shared physical care arrangement for the ten months since their separation. Paxton has thrived in the parties’ shared care, both before and after their October 2003 separation.

IV. SUMMARY.

Laura’s complaints of communication and cooperation failures are general in nature and not surprising in the context of a dissolution of marriage. Her primary concrete example of such failures has minimal significance. The parties have, both before and after their separation, been highly successful in their shared care of Paxton, resulting in a happy, healthy, thriving child. The parties have kept Pax-ton’s best interests in mind and made what amounts to a joint physical care arrangement work successfully.

V. CONCLUSIONS AND DISPOSITION.

We conclude joint physical care will best assure Paxton the opportunity for the maximum continuing physical and emotional contact with both parents and will best encourage his parents to share the rights and responsibilities of raising him. We conclude a joint physical care arrangement most effectively serves Paxton’s best interest. We therefore conclude the district court should not have rejected James’s request for joint physical care and should have awarded the parties joint physical care of Paxton.

We modify the decree of dissolution to provide that the parties shall have joint physical care of Paxton. We therefore vacate the trial court’s child support order, which was based on Paxton’s physical care being placed with Laura. The record does not indicate that the parties fully agree on the schedule or details of a joint physical care arrangement. We therefore remand to the district court for such further proceedings as are necessary to establish a joint physical care schedule and to resolve any other issues that may arise as a result of our modification of its decree. Costs on appeal are taxed three-fourths to Laura and one-fourth to James.

AFFIRMED AS MODIFIED AND REMANDED.

      . Iowa's General Assembly has on numerous occasions, including occasions in relatively recent years, demonstrated its ability to expressly state when "preference” is to be given to a class of persons or to a course of action. See, e.g., 2003 Iowa Acts ch. 145, § 30 (codified at Iowa Code § 8A.311(1) (2005)) (requiring that in the purchasing of equipment, supplies, or services by the department of administrative services through competitive bidding "[p]reference shall be given to purchasing Iowa products and purchases from Iowa-based businesses_”); 1996 Iowa Acts ch. 1174, § 7 (codified at Iowa Code § 600.7A (2005)) (requiring department of human services to adopt rules providing that if adoption services are provided by the department the overriding criterion shall be a "preference for placing a child in a stable home environment as expeditiously as possible.”); 1978 Iowa Acts ch. 1088, § 41 (codified at Iowa Code § 232.80 (2005)) (directing, in child in need of assistance proceedings, that homemaker-home health aide services in a child’s place of residence "shall be provided in preference to removal of the child from the home.”); 1974 Iowa Acts ch. 1172, § 11 (requiring that in employing personnel the then newly-created area education agencies "shall give preference” to qualified personnel who sought employment because their employment by county school systems and joint county systems was ending); 1904 Iowa Acts ch. 9, § 1 (now codified as part of Iowa Code ch. 35C (2005)) (establishing "preference in appointment and employment” for veterans).


author: /s/ Helen H. Meyer Associate Justice

text:
    Laree E. HUFF, Respondent, v. NORTHWEST AIRLINES CORP., and Liberty Mutual Insurance Company, Relators.
    No. A05-604.
    Supreme Court of Minnesota.
    Oct. 18, 2005.
    Robin Simpson, Radd Kulseth, Aafedt, Forde, Gray, Monson & Hager, P.A., Minneapolis, MN, for relators.
    James A. Batchelor, Batchelor Law Firm, Minneapolis, MN, for respondent.
   ORDER

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that the decision of the Workers’ Compensation Court of Appeals filed February 24, 2005, be, and the same is, affirmed without opinion. See Hoff v. Kempton, 317 N.W.2d 361, 366 (Minn.1982) (summary dispositions have no precedential value because they do not commit the court to any particular point of view, doing no more than establishing the law of the case).

Employee is awarded $1,200 in attorney fees.

BY THE COURT:

/s/ Helen H. Meyer Associate Justice


author: BLATZ, Chief Justice. HANSON, Justice PAGE, Justice

text:
    HY-VEE FOOD STORES, INC., Appellant, v. MINNESOTA DEPARTMENT OF HEALTH, Respondent.
    No. A04-548.
    Supreme Court of Minnesota.
    Oct. 27, 2005.

      Michael R. Drysdale, Dorsey & Whitney, L.L.P., Minneapolis, for appellant.
    Michael A. Hatch, MN Atty. Gen., Kristen M. Olsen, Audrey Kaiser Manka, Asst. Attys. Gen., St. Paul, for respondent.
    George Green, Vice President, Gen. Counsel, Food Marketing Institute, Washington, DC, John P. Borger, Faegre & Benson., L.L.P., Minneapolis, for amici curiae.
    Heard, considered, and decided by the court en banc.
   OPINION

BLATZ, Chief Justice.

Respondent Minnesota Department of Health (MDH) administers the federally funded Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). MDH disqualified appellant Hy-Vee Food Stores, Inc. as a WIC vendor for three years for violating a rule that prohibits selling tobacco products in exchange for WIC vouchers. Hy-Vee appealed, arguing that the inadvertent acceptance of a WIC voucher in payment for groceries that included one pack of cigarettes did not constitute a violation. An administrative law judge (ALJ) recommended summary disposition in favor of MDH, and the Commissioner of Health adopted the ALJ’s recommendation. Hy-Vee appealed, and the court of appeals affirmed. Hy-Vee Food Stores, Inc. v. Minnesota Dept, of Health, No. A04-548, 2004 WL 2340189 (Minn.App. Oct. 19, 2004). We affirm.

The WIC program, which is administered at the federal level by the United States Department of Agriculture (USDA), provides limited-income infants, young children, and pregnant, postpartum or breastfeeding women with supplemental foods, nutrition education, and health development. 7 C.F.R. § 246.1 (2005). WIC participants exchange WIC vouchers for WIC-eligible products, which are listed on the face of the vouchers, at local authorized vendors. 7 C.F.R. § 246.12(f) (2005). MDH receives federal cash grants to administer the WIC program in Minnesota and has promulgated rules pursuant to, and consistent with, USDA’s WIC rules. See Minn. R. ch. 4617 (2005). To participate in the program, a vendor must enter into a written vendor agreement with MDH that sets forth compliance procedures and details the sanctions to be imposed in the event of a violation. 7 C.F.R. § 246.12(h)(1), (3), (5) (2005).

The Hy-Vee store in Windom, Minnesota, was authorized as a WIC vendor on January 1, 2003. Hy-Vee’s vendor agreement with MDH specified that MDH “shall disqualify a vendor for three years if the Vendor provides any alcohol, alcoholic beverage, or tobacco product in exchange for one or more vouchers.” That provision was based on an identical MDH administrative rule, Minn. R. 4617.0084, subp. 4 (2005). The MDH rule was in turn based on a USDA regulation that provides: “The State agency must disqualify a vendor for three years for: (A) One incidence of the sale of alcohol or alcoholic beverages or tobacco products in exchange for food instruments.” 7 C.F.R. 246.12©(l)(iii) (2005).

On April 13, 2003, the father of a WIC-eligible child and boyfriend of the child’s mother, a WIC participant, went to the Windom Hy-Vee store and purchased eight items, totaling $19.34, with a WIC voucher. Among the eight items purchased was a $3.19 pack of cigarettes. The remaining seven items were WIC-approved food items. The father did not offer any form of payment other than the voucher. The cashier accepted the voucher in payment for all eight items, including the cigarettes, writing the total price on the voucher, which the father then signed. The cashier gave the father a receipt for the transaction. Hy-Vee subsequently redeemed the voucher for the full amount of the transaction.

After the father returned home with his purchases from Hy-Vee, the mother reviewed the receipt and noticed that the cigarettes had been included in the WIC voucher purchase. Concerned that the tobacco purchase might jeopardize her participation in the WIC program, she contacted the local WIC agency to report what had occurred and sent it the receipt. The local agency notified MDH, and the MDH compliance coordinator notified Hy-Vee by letter that it was terminating the store’s authorization as a WIC vendor for three years because Hy-Vee “violated the terms of your WIC vendor agreement and the Minnesota rules that govern the WIC program.”

Hy-Vee appealed the three-year disqualification, and a contested case was initiated before an ALJ. Both parties moved for summary disposition. In support of its motion, Hy-Vee submitted the affidavit of the father stating that he had intended to pay for the cigarettes with cash, but was distracted by his young son during the transaction and “did not notice that the cigarettes were included in the WIC purchase.” Hy-Vee also submitted an affidavit from the assistant manager of the store, who was likely the cashier that processed the transaction. She stated that she did not remember the transaction, but that she was certain “I did not realize that I had included the cigarettes” in the father’s purchase. She further stated that she had “never deliberately exchanged a tobacco product for a WIC voucher.”

For the purposes of deciding the summary disposition motions, the ALJ viewed the facts in the light most favorable to Hy-Vee and accepted as true Hy-Vee’s assertions that the inclusion of cigarettes in the transaction was inadvertent, and that neither Hy-Vee nor the buyer intended to exchange WIC vouchers for tobacco products. The ALJ recommended summary disposition for MDH because there was no genuine issue of material fact regarding whether Hy-Vee provided tobacco products in exchange for a WIC voucher. The ALJ concluded that under the applicable state and federal rules intent is not an element of the violation, and that the rules require a three-year vendor disqualification for the first violation of the WIC tobacco rule. The Commissioner of Health adopted the ALJ’s recommendation, granted MDH’s motion for summary disposition, and ordered Hy-Vee’s disqualification for three years.

Hy-Vee appealed by petition for writ of certiorari, and the court of appeals affirmed. The court held that (1) MDH’s interpretation of the WIC tobacco rule was entitled to some deference; (2) there was sufficient proof of intent to establish a sale of tobacco products even though neither party may have intended a tobacco-for-WIC-voucher exchange; (3) inadvertent acceptance of a WIC voucher in payment for tobacco products constitutes a violation of the tobacco rule; and (4) the 3-year disqualification was not arbitrary or capricious. Hy-Vee Food Stores, Inc., 2004 WL 2340189 at ⅜1-⅜4. We granted Hy-Vee’s petition for review.

The scope of our review is governed by the Minnesota Administrative Procedures Act, Minn.Stat. § 14.63-69 (2004), which provides that an appellate court reviewing an agency decision “may reverse or modify the decision if the substantial rights of the petitioners may have been prejudiced because the administrative” decision (a) violated a constitutional provision, (b) exceeded the agency’s statutory authority or jurisdiction, (c) was made upon unlawful procedure, (d) was affected by an error of law, (e) was unsupported by substantial evidence in view of the entire record as submitted, or (f) was arbitrary or capricious. Minn.Stat. § 14.69. Hy-Vee argues that the decision here was affected by an error of law, because MDH and the court of appeals misinterpreted the WIC tobacco rule in concluding that an inadvertent exchange of tobacco products for a WIC voucher constitutes a prohibited sale in violation of the rule.

The WIC tobacco rule provides: Three-year disqualification. The State agency must disqualify a vendor for three years for:
(A) One incidence of the sale of alcohol or alcoholic beverages or tobacco products in exchange for food instruments.

7 C.F.R. § 246.12ffl(l)(iii)(A). The plain language of the WIC tobacco rule dictates the result reached by MDH and the court of appeals. The rule requires three elements to establish a violation: (1) there must be a sale; (2) the object of the sale must be tobacco products; and (3) the method of payment must be food instruments. All three elements were established by MDH. Hy-Vee admits that the father intended to buy and the cashier intended to sell the cigarettes, and the means of payment was a WIC voucher.

Hy-Vee does not dispute that the vendor and the buyer engaged in a tobacco-for-voucher exchange. Hy-Vee contends, nevertheless, that this exchange did not constitute a “sale” under the WIC tobacco rule. Hy-Vee argues that the sworn statements of the cashier and buyer, set forth in their respective affidavits, that they did not intend to sell or buy cigarettes as part of the WIC transaction, demonstrate a “mutual mistake.” Hy-Vee further asserts that “[a]ny transaction that is the product of such a mutual mistake is void and subject to rescission.” In Hy-Vee’s view, the cashier and buyer mistakenly engaged in a voucher-for-tobacco exchange, but intended a casfe-for-tobacco exchange. According to Hy-Vee, because the cashier and the buyer have averred that they did not intend to exchange the cigarettes for a WIC voucher, “there was no meeting of the minds” — that is, no mutual assent. Thus, Hy-Vee asserts “there was no ‘sale’ as a matter of law” and therefore no violation. We disagree.

The term “sale” is not defined in the rules, but its meaning is not uncertain. MDH and the court of appeals relied on the definition of sale found in the Uniform Commercial Code, which defines “sale” as “the passing of title from the seller to a buyer for a price.” Minn.Stat. § 336.2-106(1) (2004). We see no reason to deviate from that commonly-accepted definition for the purposes of the WIC tobacco rule. Cf Minn.Stat. § 645.08(1) (2004) (words and phrases are construed according to their common and approved usage). Hy-Vee asserts — and we agree — that the formation of a sales contract requires the mutual assent of the parties engaging in the transaction. See Cederstrand v. Lutheran Brotherhood, 263 Minn. 520, 531, 117 N.W.2d 213, 221 (1962); Bergstrom v. Sambo’s Restaurants, Inc., 687 F.2d 1250, 1256 (8th Cir.1982) (applying Minnesota law); Restatement of Contracts (Second) § 17(1) (1988). A manifestation of mutual assent “may be inferred wholly or partly from words spoken or written or from the conduct of the parties.” Cederstrand, 263 Minn, at 532, 117 N.W.2d at 221; Restatement of Contracts (Second) § 19(1).

Here, the undisputed facts, as found by the ALJ, are that:

[A] customer placed items in the checkout aisle, those items were scanned by a Hy-Vee employee, a total price was identified, a food instrument (WIC voucher) was offered by the customer as payment, the food instrument was accepted as payment for all the items scanned, a receipt was given to the customer, and the customer left with the items.

As the court of appeals stated, “[t]he record demonstrates that the cigarettes were delivered to the customer and [Hy-Vee] received the price.” Hy-Vee Food Stores, Inc., 2004 WL 2340189 at *2. This conduct satisfies the UCC definition of sale, and there is no suggestion that either participant intended otherwise. In fact, Hy-Vee admits that the father intended to buy the cigarettes and Hy-Vee intended to sell them. Accordingly, we agree with the court of appeals’ conclusion that “MDH did not make an error of law in concluding that a sale occurred.” Id.

Hy-Vee argues, however, that the conclusion that the vendor intended to sell cigarettes and the buyer intended to buy cigarettes — establishing their mutual assent to engage in a sale — “begs the proper question.” From Hy-Vee’s perspective, the vendor intended to sell tobacco for cash, a “perfectly legal transaction.” But the vendor did not intend to “engage in prohibited conduct” by selling tobacco for vouchers. Thus, from Hy-Vee’s perspective, and the dissent agrees, the question of whether the vendor acted with intent goes to the method of payment the vendor intended to accept. Under such an analysis, a “sale” has taken place for the purposes of the WIC tobacco rule only if the vendor specifically intended to accept a WIC voucher rather than cash. Hy-Vee asserts that this proposition is supported by the state and federal rules and the common law. On the contrary, the governing rules and the generally accepted test for a sale dispel rather than support Hy-Vee’s argument.

We first observe that the method of payment is not generally germane to determining whether a sale has taken place. Rather, as discussed above, a sale requires the mutually-assented-to transfer of title from seller to buyer for a price — all elements that have been met as a matter of law in the case at hand. The WIC tobacco rule, however, requires three elements to establish a violation: (1) there must be a sale; (2) the object of the sale must be tobacco products; and (3) the method of payment must be food instruments. Importantly, a sale can occur even if either or both of the latter two elements are not satisfied, but a violation cannot. Under the rule, therefore, the method of payment establishes not whether a sale has taken place, but whether a violation of the rule has occurred. Indeed, as Hy-Vee states in its brief, “[e]xchanging tobacco products for a WIC voucher is an essential element of the violation.” (Emphasis in original.) But it is not an essential element of a sale, and the WIC tobacco rule’s description of the additional elements that constitute a violation does not expand the definition of sale.

Hy-Vee’s assertion that the vendor did not subjectively intend to accept a voucher as the means of payment is relevant only if liability under the rule requires a showing of intent to accept a voucher as the method of payment. There is, however, nothing in the WIC tobacco rule that supports imposing an intent requirement on the method of payment element. Hy-Vee attempts to achieve that effect by conjoining the element of a sale, which does require intent, with the element of method of payment (exchange for food instruments). The language of the rule does not support that conjunction. Moreover, imposing an intent requirement on the method of payment is directly contrary to the express provision in the federal regulations that eliminates intent as an element of vendor violations. Specifically, USDA defines “vendor violation” as

any intentional or unintentional action of a vendor’s current owners, officers, managers, agents, or employees (with or without the knowledge of management) that violates the vendor agreement or Federal or State statutes, regulations, policies, or procedures governing the Program.

7 C.F.R. § 246.2 (emphasis added). Under this definition, where — as here — a vendor has engaged in conduct that violates a provision of the state or federal regulations, the enforcing agency is not required to prove intent in order to prove a violation. See 64 Fed. Reg. 13,315-16 (Mar. 18, 1999) (“The intent to commit a violation versus inadvertent human error is not a distinction that State agencies must establish in order to impose sanctions * * *.”).

Hy-Vee asserts that the definition of “vendor violation” is circular, because MDH and reviewing courts must look to the specific language of a provision to determine what constitutes a violation. Although we agree that we must look to the language of specific provisions to identify the conduct that constitutes a violation, we disagree that this renders the vendor violation definition circular. Rather, the definition clarifies that a vendor is liable for actions that violate the standard of conduct set forth in its vendor agreement, state regulations, or federal regulations — regardless of whether the violation was intentional or inadvertent. Thus, when a vendor engages in proscribed conduct, strict liability applies.

Hy-Vee also argues that the vendor violation definition only establishes “that intent is not a required element of all violations,” and that when a specific violation provision involves conduct that inherently requires intent, the general vendor violation definition is superseded. Specifically, Hy-Vee contends that three sections of the mandatory vendor sanctions rule involve conduct that necessarily must be intentional in order to be a violation, and therefore the general vendor violation definition that eliminates the intent requirement cannot be construed to apply to all violations. Hy-Vee argues that intent is inherent in the conduct described in the parts of the rule that mandate sanctions for (1) criminal convictions of trafficking in food instruments or buying or selling firearms, ammunition, or drugs in exchange for food instruments, 7 C.F.R. § 246.12ffi(l)(i) (2005), (2) buying or selling of food instruments for cash, id. § 246.12(l)(l)(ii)(B) (2005), and (3) selling alcohol or tobacco products in exchange for food instruments — the WIC tobacco rule at issue here, id. § 246.12(Z)(1)(iii)(A).

Hy-Vee’s analysis is based on misreading of the regulations. While a criminal conviction for trafficking in food instruments may require some level of criminal intent, the mandatory sanction rule itself recognizes that in some circumstances there could be a conviction without vendor intent. The regulation that prescribes permanent disqualification for a vendor “convicted of trafficking in food instruments or selling firearms, ammunition, explosives, or controlled substances * * * in exchange for food instruments,” 7 C.F.R. § 246.12(i)(l)(i), also contains a form of an “innocent owner” defense. Specifically, it provides that the state agency may impose a civil money penalty in lieu of disqualification if it determines that the vendor had in place an effective program “to prevent trafficking and the ownership of the vendor was not aware of, did not approve of, and was not involved in the conduct of the violation.” Id. § 246.12(Z)(l)(i)(B). This provision not only acknowledges. the possibility of lack of intent for the violation, but consistent with the policy of strict liability for vendor violations, this defense affects only the sanction imposed, not liability. Second, with regard to the section that imposes disqualification for “buying or selling of food instruments for cash (trafficking),” Hy-Yee argues that the parenthetical reference to “trafficking” essentially imports into the WIC rule an intent requirement from the Federal Sentencing Guidelines for drug trafficking offenses. However, USDA’s comments on adoption of the mandatory sanctions for trafficking reveal that those provisions are based on specific legislation directed at trafficking in this program, so reference to criminal drug trafficking language is both unnecessary and inappropriate. See 64 Fed. Reg. 13,311, 14-15 (explaining that adjustments to penalties for trafficking in food instruments were necessitated by the William F. Goodling Child Nutrition Reauthorization Act of 1998, P.L. 105-336). Finally, with respect to the WIC tobacco rule itself, we have demonstrated that' the intent factor inherent in the proof of a sale does not extend to the separate element of exchange for food instruments that is necessary for a violation. Accordingly, the three specific sections of the mandatory vendor sanctions rule relied on by Hy-Vee do not support the conclusion that the vendor violation definition is applicable only to some vendor violations. More importantly, they provide no basis to conclude that the elimination of an intent requirement by that definition does not apply to the WIC tobacco rule.

Hy-Vee’s attempt, and that of the dissent, to cabin the scope of the vendor violation definition also fail because that definition is located in the general definitions section for Part A of the WIC regulations. Part A describes the scope of the definitions contained therein broadly, stating that they are “[flor the purpose of this part and all contracts, guidelines, instructions, forms and other documents related hereto.” 7 C.F.R. § 246.2.

Furthermore, where USDA intended to require intent under the WIC rules, it did so expressly. For example, in contrast to the strict liability imposed for vendor violations, USDA defined violations by participants — that is, women and children receiving WIC assistance — as requiring intent. Id. (“Participant violation means any intentional action of a participant * * * that violates Federal or State statutes, regulations, policies, or procedures governing the Program.”) (emphasis added). In contrast, and of critical importance here, the WIC tobacco rule does not expressly require that the agency show that the vendor intentionally accepted vouchers in exchange for tobacco. Thus, the strict liability established under the vendor violation definition applies, and Hy-Vee’s asserted lack of intent to accept a WIC voucher as payment for the cigarettes does not provide a defense.

Hy-Vee also argues that the WIC program’s regulatory history supports its contention that the WIC tobacco rule requires a showing that the vendor intentionally accepted a WIC voucher as the method of payment. According to Hy-Vee, the regulatory history indicates that USDA did not intend to impose liability for “inadvertent errors.”

Although it is unnecessary to look beyond the plain language of administrative rules where, as here, their meaning is unambiguous, we examine the history of the WIC rules because it demonstrates the fallacy of Hy-Vee’s assertions. Contrary to Hy-Vee’s argument, the history of the promulgation of the WIC rules demonstrates clearly that USDA purposefully structured the program to impose strict liability for vendor sanctions, but mollified the effect of strict liability where it thought it appropriate by adjusting the sanction imposed and the amount of misconduct that triggers the sanction. When USDA published the Final Rule promulgating the definition of “vendor violation” currently in effect, it explained that vendors are strictly liable for all actions that violate WIC regulations, whether intentional or unintentional:

[T]he violations that trigger mandatory sanctions do not require the State agency to distinguish between fraudulent (intentional) and abusive (unintentional) vendor violations, because both types of vendor violations result in loss of program funds. The State agency is not required to demonstrate that a vendor intended to commit a vendor violation(s) to support its sanction. Instead, the State agency is required to provide evidence that the vendor committed the vendor violation(s) and that the evidence is sufficient to support the sanction being imposed.

65 Fed. Reg. 83,265-66 (Dec. 29, 2000). USDA also explained:

As noted in the discussion of the definition of vendor violation in the proposed rule, we believe vendors should be held accountable for all violations, whether they are deliberate attempts to violate program requirements or inadvertent errors, because both ultimately result in increased food costs and fewer participants being served. * * * We want to emphasize that not all vendor violations will give rise to a vendor sanction. For example, even though an inadvertent mistake in entering the purchase price on a food instrument may constitute both a vendor violation and a vendor overcharge, it would not necessarily trigger a sanction. Only a pattern of overcharges triggers the mandatory sanction.

65 Fed.Reg. 83,260.

Hy-Vee and the dissent argue that USDA’s statement that an inadvertent error may constitute a vendor violation, but not trigger a sanction, demonstrates that USDA did not intend to impose liability for inadvertent errors. In so arguing, Hy-Vee and the dissent improperly conflate the concepts of liability and sanctions. USDA’s comments establish that liability arises from all violations — even inadvertent errors. But, although some inadvertent errors — like vendor overcharges — are vendor violations, they may not result in a mandatory sanction of disqualification. Accordingly, USDA requires a pattern of overcharge violations before it imposes a sanction. See 7 C.F.R.

§ 246.12(0(l)(iii)(C) (2005). In contrast, several of the mandatory vendor sanctions are expressly triggered by just “one incidence” of the prohibited conduct, such as the sale of tobacco products in exchange for food instruments. Thus, the enforcement scheme created in the federal regulations imposes strict liability for all vendor violations, but mandates sanctions for those violations according to a carefully-constructed hierarchy. In the case of the WIC tobacco rule, one incidence of a tobacco sale for a voucher constitutes a violation and mandates the sanction of a three-year disqualification.

We conclude that the plain text of the rules, supported by the regulatory history, demonstrates that vendors are subject to sanction for both intentional and unintentional violations of the WIC tobacco rule. Thus, Hy-Vee’s argument that proof of intent is necessary not only to establish a sale, but also regarding the method of payment, is contrary to the plain language of the rules and the considered enforcement structure created by USDA. We therefore hold that MDH properly disqualified Hy-Vee for three years. In so holding we note that our court has recognized that there are times, in applying an administrative rule in a contested case, .that the result may seem harsh. See Mammenga v. State Dept, of Human Services, 442 N.W.2d 786, 789 (Minn.1989). However, “[t]he mere fact * * * that application of a rule [yields] a harsh or undesirable result in a particular case does not make the rule invalid.” Mammenga, 442 N.W.2d at 789. Although the effect of the WIC tobacco rule in this context may strike some as draconian, the straightforward language of the rule and the fact that Hy-Vee sold cigarettes in exchange for a WIC food instrument mandates the conclusion that the Minnesota Department of Health properly disqualified Hy-Vee from participating in the WIC program for three years.

Affirmed.

HANSON, Justice

(dissenting).

I respectfully dissent. I would conclude that Hy-Vee may avoid the 3-year sanction by proof that its acceptance of the voucher was the product of the mutual mistake of the parties to the sale. Because there are genuine issues of material fact concerning Hy-Vee’s claim of mutual mistake, I would reverse the court of appeals and remand to MDH for hearing.

The WIC tobacco rule mandates a 3-year disqualification on a WIC vendor for “[o]ne incidence of the sale of * * * tobacco products in exchange for food instruments.” 7 ‘ C.F.R. § 246.12(Z )(l)(iii)(A). But the federal rule does not define the word “sale,” and the state’s counterpart rule does not define the word “provide.”

The court of appeals reconciled the parties’ arguments by viewing the word “sale” in isolation and concluding that a sale does require intent but that such intent need only be proven by the parties’ objective conduct (i.e., the presentation of the item, the calculation of the price, the offer and acceptance of payment and the delivery of the item). Hy-Vee Food Stores, Inc., 2004 WL 2340189 at *2. I agree that the word “sale” implies an element of intent and that such intent can be proven by the objective facts and need not explore the subjective thoughts of the parties to the transaction. See, e.g., Minn.Stat. § 336.2-204(1) (2002) (“contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract”); Barker v. Allied Supermarket, 596 P.2d 870 (Okla.1979) (holding sale occurred under Uniform Commercial Code when supermarket customer placed item in shopping cart).

But the WIC tobacco rule does not use the word “sale” in isolation. In order to give meaning to all words in the rule, “sale” must be read in conjunction with the words “in exchange for food instruments.” Hy-Vee argues that the cashier and customer both intended for tobacco to be sold in exchange for cash, not for a WIC food instrument, and that their mutual mistake as to method of payment invalidated the transaction for WIC disqualification purposes. Ordinarily, as the majority notes, the method of payment would not be material to the accomplishment of a sale. But here, the violation depends precisely on the method of payment. No regulation is violated by the mere sale of cigarettes. The violation only occurs if the proscribed method of payment (exchange for food instruments) is used. Thus the question arises whether the intent element implicit in a sale also applies to the method of payment where that method is made material to the completion of the sale. And, if so, may the vendor attempt to prove that there was no intent to use a WIC voucher as the method of payment by showing that the presentation and acceptance of the WIC voucher for a prohibited, item was the product of a mutual mistake?

In Winter v. Skoglund, 404 N.W.2d 786 (Minn.1987), we endorsed the framework for analyzing mutual mistake that is provided in the Restatement (Second) of Contracts § 152 (1981):

(1) Where a mistake of both parties at the time a contract was made as to a basic assumption on which the contract was made has a material effect on the agreed exchange of performances, the contract is voidable by the adversely affected party unless he bears the risk of the mistake under the rule stated in § 154.
(2) In determining whether the mistake has a material effect on the agreed exchange of performances, account is taken of any relief by way of reformation, restitution, or otherwise.

In Winter, we found mutual mistake when two parties both entered a contract with the erroneous beliefs that a third party already had been bound in the agreement. 404 N.W.2d at 793. We held that “[t]his was a basic assumption on which the contract was made and its falsity would materially change the bargain.” Id. Five years earlier, in Gartner v. Eikill, we found mutual mistake when parties to a property sale erroneously believed that the property could be developed. 319 N.W.2d 397, 399 (Minn.1982). We concluded that a mistake regarding the viability of property development “went to the very nature of the property.” Id.

The facts presented here do not fit precisely within the mutual mistake framework because the mistaken tender of payment arguably took place after the customer had accepted Hy-Vee’s offer of groceries. See Restatement (Second) of Contracts § 50(2) (1981) (“[acceptance by performance requires that at least part of what the offer requests be performed or tendered”). In addition, there was no mistake as to the nature of the goods being sold. But I agree with Hy-Vee that, because the use of a “food instrument” is the determinative fact under the WIC tobacco rule, the method of payment goes to the “very nature” of the transaction. See Gartner, 319 N.W.2d at 399. Accordingly, I would conclude that a vendor who accepts a WIC voucher in payment for cigarettes may attempt to prove that the transaction did not violate the WIC tobacco rule because the use of the voucher was the result of the mutual mistake of the parties.

I reach that conclusion, in part, by applying a strict construction to the WIC tobacco rule based on the severity of the sanction. In contrast to the WIC tobacco rule, which imposes disqualification for a single incident in violation, other WIC rules require proof of a pattern or series of what appear to be regarded by the USDA as equally serious violations before a mandatory disqualification is imposed. 7 C.F.R. § 246.12(l)(iii)(B)-(F) (addressing vendor overcharges, charging for food that participant does not receive, providing credit or nonfood items, claiming reimbursement for sales that exceeds store’s documented inventory, and receiving, transacting, or redeeming vouchers “outside of authorized channels”); 7 C.F.R. § 246.12(l)(iv) (addressing provision of unauthorized food items). I am reluctant to imply administrative agency authority to impose more severe sanctions where express authority to do so is not clear. See Pet. of Northern States Power Co., 414 N.W.2d 383, 388 (Minn.1987) (holding that “less harsh result” was warranted when Minnesota Public Utilities Commission lacked express authority to dismiss a regulatory proceeding).

My conclusion is reinforced by the history surrounding the adoption of the WIC tobacco rule. The rule was added in 1998 as a part of a larger USDA effort to “mandate uniform sanctions across States for the most serious WIC Program vendor violations, including seven specific WIC Program violations * * *.” 63 Fed.Reg. 19,415 (Apr. 20, 1998). USDA explained that “[t]he implementation of these mandatory sanctions is intended to promote WIC and [Food Stamp Program] coordination in the disqualification of retailers and vendors who violate program rules.” Id. at 19,416. At the time, there was a “major movement in the USDA to control fraud and abuse in the WIC Program.” Brandi M. King, Note, Separating Food from Culture: The USDA’s Failure to Help Its Culturally Diverse WIC Population, 6 Drake J. Agrie. L. 223, 237 (2001). In a report to Congress about the changes, the General Accounting Office observed that vendors’ “intentional” and “deliberate” actions were the chief concern:

Vendor fraud or abuse is an intentional or deliberate action taken to violate program regulations, policies, or procedures. Actions include, but are not limited to, accepting food vouchers for cash, which is known as trafficking, or providing credit toward the purchase of unauthorized items; giving cash or credit for returned food items that were purchased with food vouchers; altering food vouchers or accepting expired vouchers; charging more than the shelf price or exceeding the maximum price allowed by WIC; or charging for food that the participant does not receive.

Food Assistance: Efforts to Control Fraud and Abuse in the WIC Program Can Be Strengthened (United States General Accounting Office, Report to Congressional Committees, August 1999), at 17, available at http://www.fns.usda .gov/wic/resources/ Efforts.pdf (last visited Sept. 29, 2005).

The majority relies on USDA’s definition of “vendor violation” for guidance in gauging the intent behind the WIC tobacco rule. A “vendor violation” is defined as “any intentional or unintentional action of a vendor’s current owners, officers, managers, agents, or employees (with or without the knowledge of management) that violates the vendor agreement or Federal or State statutes, regulations, policies, or procedures governing the Program.” 7 C.F.R. § 246.2. In recommending Hy-Vee’s disqualification, the ALJ relied in part on this definition, and the court of appeals concluded that the regulatory history of the “vendor violation” definition “expressly provides that state agencies are not required to show that a vendor intended the violation.” Hy-Vee Food Stores, Inc., 2004 WL 2340189 at *2.

But I find the history of this definition to be contradictory. It is true that when USDA proposed this definition of “vendor violation” in 1999, it explained that vendors were to be held accountable for “deliberate” violations as well as “inadvertent” errors because both “ha[d] the same negative effect on the Program.” 64 Fed. Reg. 32,316 (June 16, 1999). But, in the same explanation, USDA observed that “this does not mean that a minor unintentional action by a cashier without management knowledge would result in disqualification.” Id. This observation states the ultimate conclusion that is to be reached by applying the definition to a specific set of facts — that no disqualification will result, and a vendor violation does not occur, when a cashier commits a “minor unintentional” error without management knowledge. This ultimate conclusion is instructive on how the definition of vendor violation should be applied here because these are the precise facts — an unintentional error — that the ALJ assumed to be true for purposes of summary disposition.

This contradiction in the “vendor violation” definition history was underscored when the rule was being made final late in 2000. USDA then observed that “limiting the scope of vendor overcharges only to those that are intentional or fraudulent would undermine the integrity of the WIC Program,” but again stated that “[w]e want to emphasize that not all vendor violations will give rise to a vendor sanction” and that an “inadvertent mistake” may not trigger a sanction. 65 FecLReg. 83,260-61 (Dec. 29, 2000).

Of course, as Hy-Vee argues, any attempt to use the definition of “vendor violation” to determine whether a violation has occurred is necessarily circular — it presumes the existence of the underlying violation that is in question. Moreover, the term “vendor violation” is not used in the WIC tobacco rule. Where it is used in other rules, an array of possible sanctions is provided. For example, the sanctions for “vendor violations” that states must describe in vendor contracts include withholding of payment of vendor claims, “administrative fines, disqualification and civil money penalties in lieu of disqualification.” 7 C.F.R. § 246.12(h)(3)(ix), (xviii) (2005). Thus, although the definition of vendor violation contemplates strict liability, the administrator is given significant discretion when choosing the sanction. All of this suggests that the definition of vendor violation has no application here.

I realize that USDA and MDH have strong interests in ensuring that WIC-eligible women and children are not exposed to tobacco or alcohol. But given the ambiguities and contradictory, comments in the promulgation history, I am not prepared to characterize a single, inadvertent sale of tobacco in exchange for a WIC voucher as a violation that triggers the 3-year mandatory disqualification.

I would hold that when a WIC vendor appeals to MDH from a mandatory 3-year disqualification under 7 C.F.R. 246.12(Z )(l)(iii)(A), the vendor may show, as an affirmative defense, that the vendor’s acceptance of a WIC voucher in exchange for tobacco products was the result of a mutual mistake of the parties to the transaction. See Theisen’s, Inc. v. Red Owl Stores, Inc., 309 Minn. 60, 65, 243 N.W.2d 145, 148 (1976) (party seeking reformation of written instrument because of mutual mistake bears burden of proof); see also Bryan v. Moore, 863 A.2d 258, 260 n. 4 (Del.Ch.2004) (characterizing mutual mistake as affirmative defense); Smith v. First Choice Services, 158 N.C.App. 244, 580 S.E.2d 743, 748 (2003) (same). Because Hy-Vee made such a showing, sufficient to avoid summary disposition, I would determine that the grant of summary disposition in favor of MDH was affected by an error of law.

PAGE, Justice

(dissenting).

I join in the dissent of Justice Hanson.

      . The parties agree that the word "provides” in the state rule and the vendor agreement is synonymous with the word "sale” in the federal rule. In addition, the term "voucher” in the state rule is a form of acceptable WIC payment that is included in the term “food instruments" used in the federal rule. See 7 C.F.R. § 246.2 (2005) (defining “food instrument”). For convenience, we will refer collectively to the state and federal rules as "the WIC tobacco rule.”

      . The father was authorized by proxy to use his girlfriend's voucher.

      . Summary disposition is the administrative equivalent of summary judgment. Pietsch v. Minnesota Bd. of Chiropractic Examiners, 683 N.W.2d 303, 306 (Minn.2004). “Consistent with law, the [administrative law] judge shall * * * recommend a summary disposition of the case or any part thereof where there is no genuine issue as to any material fact or recommend dismissal where the case or any part thereof has become moot or for other reasons.” Minn. R. 1400.5500(K) (2005).

      . We reiterate that for simplicity of discussion, we address only the language of the federal rule, which the parties agree bears the same meaning as the state rule. We note, however, that the disqualification sanction was based on violation of the vendor agreement and the state rule.

      . Because the language of the rules is unambiguous, the argument between the parties about the extent to which the courts should defer to the agency's interpretation of its rule is irrelevant to our analysis. "No deference is given to the agency interpretation if the language of the regulation is clear and capable of understanding.” St. Otto’s Home v. Minn. Dept, of Human Services, 437 N.W.2d 35, 40 (1989); see Jasper v. Comm’r of Public Safety, 642 N.W.2d 435, 440 (Minn.2002).

        .See also Black's Law Dictionary 1337 (7th ed. 1999) (defining "sale” as, inter alia, "The transfer of property or title for a price.”)

      . USDA explained:
      Regarding the number of incidences of each violation that trigger a mandatory sanction, the Department has determined that some violations are so serious that only one incidence warrants disqualification. For example, trafficking and the sale of alcohol or tobacco products are flagrant violations of program rules and completely undermine program goals. As such, this final rule requires a mandatory sanction for one incidence of either of these violations. 64 Fed.Reg. 13,314.

      . The dissent's proposed creation of a mutual mistake affirmative defense would introduce the subjective intent of the parties as a factor in determining whether a vendor has violated the WIC tobacco rule and in doing so would undermine the carefully designed enforcement scheme described above and compromise the ability of the government to enforce the WIC tobacco rule. In cases like this one, where the objective facts unambiguously establish that a tobacco-voucher exchange took place, but a vendor produces testimony that the vendor’s agent and the buyer did not subjectively intend to violate the rule, a trial will be required in which the parties’ testimony regarding their subjective intent will be pitted against the objective manifestations of their conduct. USDA obviously intended to avoid such an unwieldy enforcement mechanism for vendor violations by eliminating the intent element in the vendor violation definition. Where USDA intended for intent to be a factor in the enforcement scheme, it either expressly so provided or required a pattern of conduct for imposition of a sanction. We will not disrupt that construct and substitute our judgment for that of USDA by creating an intent-based affirmative defense.

      . The majority suggests that the appropriate framework for this question is to decouple the words of the rule into three separate elements: (1) the sale, (2) the object of the sale, and (3) the method of payment, confining the relevance of intent to only the first such element. But the rule does not separate the words in such a way, and this analytical framework does not shed any light on the question of whether the method of payment is material to the type of sale with which the rule is concerned. I read the words to be dependent, not independent, parts of the rule.

      . I acknowledge that mutual mistake is more commonly used as a contract doctrine that may apply when a party to a contract seeks to void it. But I would conclude that the underlying principles of the mutual mistake doctrine provide an appropriate framework, by analogy, both for addressing the intent elements implicit in the rule and allocating the burden of proof concerning those elements. Moreover, the affidavits of the parties to the transaction suggest that each would gladly void the transaction and substitute cash as the method of payment. I see no purpose being served by any requirement that the parties go through formal steps of rescission in order to avail themselves of the rationale of the doctrine.

      . In addition, I question whether this definition of “vendor violation” was meant to be applied outside the context of "overcharges,” for which a “pattern” of wrongdoing is required before a disqualification must be imposed. 7 C.F.R. 246.12(Z )(l)(iii)(C). After USDA published the proposed definitions of "vendor violations” and “vendor overcharges” in the Federal Register, two commenters objected to the use of the word "unintentional” in the definition of vendor overcharges. 65 Fed.Reg. 83,261. In explaining its rationale, USDA observed that "limiting the scope of vendor overcharges only to those that are intentional or fraudulent would undermine the integrity of the WIC Program.” Id. In contrast, when two commenters objected to the use of the word “unintentional” in the definition of "vendor violations,” the USDA responded quite differently:
      We acknowledged the complexity of WIC transactions and noted that even with training and supervision, cashiers may occasionally make unintentional errors. We also stated that the State agency has a wide range of actions that it may take as a result of a vendor violation, including assessing a claim, requiring increased training, identifying the vendor as a high-risk vendor subject to compliance investigation, and imposing a sanction.
      65 Fed. Reg. 83,260.

      . Other uses of the term "vendor violation” provide the vendor with an opportunity to correct the error. See, e.g., 7 C.F.R. § 246.12(k)(2) (2005) ("When the State agency determines that the vendor has committed a vendor violation that affects the payment to the vendor, the State agency must delay payment or establish a claim. Such vendor violations may be detected through compliance investigations, food instrument reviews, or other reviews or investigations of a vendor's operations.”); and 7 C.F.R. § 246.12(k)(3) (2005) (stating that when payment "is delayed or a claim is established, the State agency must provide the vendor with an opportunity to justify or correct the vendor overcharge or other error”).