author: GILBERTSON, Chief Justice. ZINTER, Justice

text:
    2007 SD 32
    NORTHWESTERN SERVICES CORPORATION, Plaintiff and Appellant, v. SI-TANKA HURON UNIVERSITY, Defendant, and Wells Fargo Bank South Dakota, N.A., (f/k/a Marquette Bank, N.A.), Defendant and Appellee.
    No. 24135.
    Supreme Court of South Dakota.
    Argued Jan. 10, 2007.
    Decided March 28, 2007.

      Donald T. Campbell of Leonard, Street and Deinard, P.A., Minneapolis, MN, Stephen C. Landon of Cadwell, Sanford, Dei-bert & Garry, Sioux Falls, SD, for plaintiff and appellant.
    Thomas J. Welk, Michael F. Tobin of Boyce, Greenfield, Pashby & Welk, Sioux Falls, SD, for defendant and appellee.
   GILBERTSON, Chief Justice.

[¶ 1.] On February 2, 2004, Northwestern Services Corporation (NSC) commenced an action in the South Dakota Third Judicial Circuit for breach of contract against Si-Tanka Huron University (Si-Tanka) and to enforce a guarantee by Wells Fargo Minnesota, N.A. (Wells Fargo). On June 2, 2005, NSC filed a motion for summary judgment against Wells Fargo. On October 21, 2005, Wells Fargo filed a cross-motion for summary judgment against NSC. A hearing was held on the motions on January 23, 2006. The circuit court issued its memorandum opinion on April 21, 2006, granting Wells Fargo’s motion and denying NSC’s. On May 2, 2006, the order on the motions was filed and judgment in favor of Wells Fargo was entered. We reverse and remand for proceedings consistent with this opinion.

FACTS AND PROCEDURE

[¶ 2.] The facts upon which our review of this appeal is based are not in dispute. In September 1999, Marquette Bank, N.A. (Marquette) issued a loan to Newco, L.L.C. (Newco) for the purchase of Huron University (the University), located in Huron, South Dakota. The amount of the loan was $3.6 million. Prior to the transaction, Newco owned the heating, ventilation and air-conditioning system (HVAC) installed at the University.

[¶ 3.] Contemporaneous with its purchase of the University, Newco negotiated a sale-lease-back agreement with NSC for the HVAC. The terms of the agreement were memorialized in the Facility Management Contract, dated September 1, 1999(FMC). In addition to NSC and New-co, Marquette was also a signatory to the contract.

[¶ 4.] The terms of the FMC provided that NSC would pay $250,000.00 for the HVAC. Newco agreed to lease back the HVAC from NSC at a stated monthly installment. The installment included not only the cost of the equipment lease, but also provided for maintenance and the cost of natural gas to be supplied by NSC. In addition, NSC at its discretion was permitted to upgrade the HVAC at a cost of up to an additional $250,000.00. The term of the lease was fifteen years. At the end of the term, Newco could purchase the original HVAC for $1.00 and any upgrade equipment at its retail price less accumulated straight-line depreciation. In anticipation of the HVAC transaction, on August 11, 1999, Marquette’s credit committee approved the loan to Newco with the infusion of the $250,000.00 purchase funds from NSC. NSC paid the $250,000.00 for the purchase of the HVAC from Newco, directly to Marquette. Marquette applied the funds to pay down Newco’s loan.

[¶ 5.] The FMC also included a “Buyout Provision” that would trigger in the event Newco defaulted on the lease or became subject to lender foreclosure. The provision stated that Marquette would purchase the HVAC from NSC if the buyout was triggered. Marquette’s purchase price would be calculated by taking the retail price of the original equipment, valued at $250,000.00, and the retail value of any upgrade equipment, less the accumulated straight-line depreciation of each component. Since it was agreed that upgrades would not exceed $250,000.00, Marquette’s purchase price could not exceed $500,000.00. Marquette’s loan-to-value (LTV) analysis contemplated a maximum LTV ratio of 66.5% based on the market value of the University assets less Marquette’s maximum buyout purchase price of $500,000.00. Marquette’s loan approval documents included a discussion of the risk minimizing benefits of the HVAC transaction for its loan to Newco weighed against Marquette’s maximum exposure of $500,000.00, in the event the HVAC buyout provisions were triggered.

[¶ 6.] In April 2001, the Cheyenne River Sioux Tribe purchased the University from Newco and changed its name to Big Foot (Si-Tanka) College (herein collectively referred to together with Si-Tanka Huron University as “Si-Tanka”). On April 26, 2001, Marquette and Si-Tanka executed a loan agreement in the principal amount of $3.3 million for the purchase. This agreement expressly provided that Si-Tanka would “assume the rights, duties and obligations owed to [NSC] ... by Newco ... pursuant to the terms of the [FMC].” On that same day, NSC, Si-Tanka, Newco, Marquette and the United States Department of Agriculture executed a document entitled “Consent to Assume” (the Consent). The Consent included NSC’s consent to Si-Tanka’s assumption of the terms of the FMC. The Consent also restated the continuing obligations of the parties under the FMC as well as “their successors and assigns.”

[¶ 7.] After making several monthly installment payments as required under the FMC, Si-Tanka discontinued making payments in October 2001. As required by the FMC, on January 14, 2003, NSC sent Si-Tanka notice of default with 30 days to cure. During the intervening time, Marquette was acquired by Wells Fargo. When Si-Tanka failed to cure, NSC sent notice to Wells Fargo on February 14, 2003, of its intent to exercise its option to invoke the buyout provisions of the FMC, thus compelling Wells Fargo to purchase the HVAC. NSC calculated the purchase price, based on the value of the HVAC and upgrade equipment less accumulated strait-line depreciation, to be $450,000.00. Under the terms of the FMC, Wells Fargo had six months to satisfy its purchase obligations. Having failed to do so, NSC initiated an action in the South Dakota Third Judicial Circuit against Wells Fargo on February 2, 2004, alleging breach of a guarantee for failure to perform its purchase obligations under the FMC. After NSC and Wells Fargo filed cross-motions for summary judgment, the circuit court entered its order on the motions and judgment in favor of Wells Fargo on May 2, 2006. NSC appeals raising the following issue:

Whether Wells Fargo’s obligation, to purchase the HVAC when Si-Tanka defaulted on its lease obligations under the FMC, was an enforceable guarantee.

STANDARD OF REVIEW

Under our familiar standard of review in summary judgment cases, we decide only whether genuine issues of material fact exist and whether the law was correctly applied. If any legal basis exists to support the trial court’s ruling, we will affirm. “With the material facts undisputed, our review is limited to determining whether the trial court correctly applied the law.” Kobbeman v. Oleson, 1998 SD 20, ¶ 4, 574 N.W.2d 633, 635.

Schulte v. Progressive Northern Ins. Co., 2005 SD 75, ¶ 5, 699 N.W.2d 437, 438 (internal citations omitted).

ANALYSIS AND DECISION

[¶ 8.] Whether Wells Fargo’s obligation, to purchase the HVAC when Si-Tanka defaulted on its lease obligations under the FMC, was an enforceable guarantee.

[¶ 9.] There is no dispute as to the fact that at all times relevant both Marquette and Wells Fargo were nationally chartered banks. Wells Fargo argues that as national banks, neither Marquette nor Wells Fargo was statutorily authorized to guarantee the obligations of the FMC lessee. Wells Fargo contends that the buyout provision of the FMC, obligating it to purchase the HVAC in the event of lessee default, constituted a guarantee of a third party obligation — here originally that of Newco whose lease obligations were assumed by Si-Tanka. As such, Wells Fargo avers that Marquette’s agreement to be obligated under the buyout provision, subsequently assumed by Wells Fargo when it acquired Marquette, is ultra vires and thus unenforceable.

The General Rule

[¶ 10.] We have observed that national banks derive their authority to conduct business from 12 U.S.C. § 24. Western Petroleum Co. v. First Bank Aberdeen (N.A.), 367 N.W.2d 773, 777 (S.D.1985). The authority to guarantee the debts of another is not provided within this statute. Id. “It is therefore generally held that ‘a national bank cannot lend 'its credit by guaranteeing the debt of another solely for his benefit.’ ” Id. at 777-78 (quoting 9 CJS Banks and Banking § 661, at 1214 (1938)) (additional citations omitted). Many venerable cases have recognized this principle. See Federal Intermediate Credit Bank of Omaha v. L’Herisson, 33 F.2d 841, 847 (8th Cir.1929) (citations omitted) (noting that a national bank does not have the statutory authority, even when solvent, to lend its credit for the benefit of another); Merchants’ Bank of Valdosta v. Baird, 160 F. 642, 646 (8th Cir.1908) (holding that a guarantee by a national bank, to honor checks of its depositor within a given period and without regard to amount, was an unenforceable loan of the bank’s credit where the bank had no interest in the obligations created therein by the depositor); Commercial Nat’l Bank v. Pirie, 82 F. 799, 801-02 (8th Cir.1897) (recognizing that the federal law authorizing the organization of national banks confers upon them no authority to guarantee the payment of debts contracted by a third person for his benefit and that acts of this nature are necessarily ultra vires); Bowen v. Needles Nat’l Bank, 94 F. 925, 931 (9th Cir.1899) (holding ultra vires a national bank’s guarantee to pay all checks of a third person, although such person had no funds on deposit); Thilmany v. Iowa Paper-Bag Co., 108 Iowa 333, 79 N.W. 68, 69 (1899) (holding that a national bank’s guarantee for the fulfillment of the obligation of another is not authorized unless such guarantee is made in connection with the transfer of a chose in action or other property belonging to the bank); First Nat’l Bank v. American Nat’l Bank, 173 Mo. 153, 72 S.W. 1059, 1061 (1903) (disagreed with on other grounds) (holding a national bank has no power to bind itself that a draft drawn on its customer will be paid, and when sued on such a contract, it can plead ultra vires).

Exceptions to the General Rule

[¶ 11.] While it is clear that a national bank may not merely lend its credit or guarantee the obligations of another solely for the other’s benefit, there are circumstances in which a bank may issue a guarantee. In People’s Bank v. National Bank, 101 U.S. 181, 181, 25 L.Ed. 907 (1879), a national bank’s debtor made a note payable to himself and then endorsed it to the order of a third party. The debtor delivered the note to the bank, which then negotiated it to the third party with an additional guarantor’s endorsement. The bank then applied the proceeds to credit the account of the debtor. The United States Supreme Court held that such a contract of guarantee is within the implied statutory powers of a national bank and thus the bank had issued an enforceable guarantee. Id. at 183, 101 U.S. 181, 25 L.Ed. 907. See also Cochran v. United States, 157 U.S. 286, 297, 15 S.Ct. 628, 632, 39 L.Ed. 704 (1895) (citing People’s Bank, supra) (restating the principle that national banks have the implied statutory authority to make contracts of guarantee).

[¶ 12.] The court in Dunn v. McCoy, 113 F.2d 587 (3d Cir.1940) addressed the absence of an express statutory provision granting national banks the authority to make contracts of guarantee. The court noted that such absence “has not prevented the enforcement of guaranties which the courts would characterize as having been entered into by banks for the furtherance of their own rights or as an incident to the transaction of their own business.” Id. at 589 (citations omitted). Recognizing the justification for enforcement under such circumstances as a “flexible rule,” the court further observed, “it is clear that in order to protect authorized loans, a bank may ordinarily guarantee to its debtors’ other creditors that their preexisting or subsequently created loans will be paid.” Id. (citations omitted).

[¶ 13.] The federal regulations governing banks and banking are more explicit in their grant of guarantor authority to national banks. 12 C.F.R. § 7.1017 provides:

A national bank may lend its credit, bind itself as a surety to indemnify another, or otherwise become a guarantor ... if: (a) The bank has a substantial interest in the performance of the transaction involved ...

(Emphasis added).

[¶ 14.] The Office of the Comptroller of the Currency (OCC) has issued several interpretive letters addressing the issue of what constitutes a substantial interest. The United States Supreme Court has noted that deferential treatment is to be afforded the regulatory interpretations of government agencies. NationsBank of North Carolina, N.A. v. Variable Annuity Life Ins. Co., 513 U.S. 251, 256-57, 115 S.Ct. 810, 813, 130 L.Ed.2d 740 (1995) (citations omitted). Charged with enforcement of federal banking laws, the OCC is to be afforded deference with respect to regulatory interpretations. Id. (citations omitted). This doctrine was recently confirmed in Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735, 116 S.Ct. 1730, 135 L.Ed.2d 25 (1996) wherein the Court held:

It is our practice to defer to the reasonable judgments of agencies with regard to the meaning of ambiguous terms in statutes that they are charged with administering.
As we observed only last Term, that practice extends to the judgments of the Comptroller of the Currency with regard to the meaning of the banking laws. “The Comptroller of the Currency,” we said, “is charged with the enforcement of banking laws to an extent that warrants the invocation of [the rule of deference] with respect to his deliberate conclusions as to the means of these laws.” NationsBank of N.C., N.A. v. Variable Annuity Life Ins. Co., 513 U.S. 251, 256-57, 115 S.Ct. 810, 813, 130 L.Ed.2d 740 (1995).

Id. at 738, 517 U.S. 735, 116 S.Ct. at 1733, 135 L.Ed.2d 25 (internal citation omitted).

[¶ 15.] Mindful of this deferential standard of interpretation, we note that the OCC, interpreting 12 C.F.R. § 7.1017, has concluded:

A “substantial interest” exists if the guarantee provided by the bank is incidental to an authorized activity. To put it another way, the nexus between the bank permissible transaction and the guarantee provides the substantial interest for the bank.

OCC Interp. Ltr. 1022 (Feb. 15, 2005), 2005 WL 1939709 (citations omitted) (emphasis added); OCC Interp. Ltr. 1014 (Jan. 10, 2005), 2005 WL 1939716 (citations omitted); OCC Interp. Ltr. 929 (Feb. 11, 2002), 2002 WL 432437 (citations omitted); OCC Interp. Ltr. (June 4, 1993), 1993 WL 740922 (citations omitted).

[¶ 16.] In Arnold Tours, Inc. v. Camp, 472 F.2d 427 (1st Cir.1972), it was held “that a national bank’s activity is authorized as an incidental power, ‘necessary to carry on the business of banking,’ within the meaning of 12 U.S.C. § 24, Seventh, if it is convenient or useful in connection with the performance of one of the bank’s established activities pursuant to its express powers under the National Bank Act.” Id. at 433 (quoting 12 U.S.C. § 24, (Seventh)) (emphasis added). The OCC has subsequently recognized the Austin court’s interpretation of “incidental power.” OCC Interp. Ltr. 1014 (Jan. 10, 2005), 2005 WL 1939716; OCC Interp. Ltr. No. 742 (Aug. 19, 1996); OCC Interp. Ltr. No. 737 (Aug. 19, 1996). Similarly, this Court has noted that a national bank’s guarantee of the debt of another is permissible “if done in the ordinary course of banking or if ‘it owns or has an interest in the obligation guaranteed.’ ” Western Petroleum Co., 367 N.W.2d at 778 (quoting 7 Michie, Banks and Banking § 163, at 279-80 (1980)).

The FMC “Buyout Provisions”

[¶ 17.] Wells Fargo argues that it received nothing from NSC to validate its guarantee to purchase the HVAC in the event of lessee default. It further argues that the guarantee is invalid because the payment of the HVAC purchase price from NSC to the bank was merely inherent to its normal lender-borrower relationship with Si-Tanka. We disagree.

[¶ 18.] That NSC’s payment of the HVAC purchase price to the bank was inherent to a normal lender-borrower relationship of Wells Fargo alone establishes the validity of the guarantee. Loaning money for the purchase of the University was an authorized activity for Wells Fargo. NSC’s $250,000.00 payment directly to the bank that was applied as credit against the loan balance was convenient and useful in connection with Wells Fargo’s performance of its authorized activity of lending money. Wells Fargo’s guarantee that it would purchase the HVAC from NSC in the event of lessee default was an inducement for NSC to enter into the FMC, hence giving rise to the payment. As such, the guarantee was incidental to Wells Fargo’s authorized activity of lending money for the purchase of the University. Therefore, Wells Fargo had a substantial interest in making the guarantee.

[¶ 19.] Wells Fargo similarly had a substantial interest in making the guarantee from the standpoint that the building infrastructure collateral for the University loan had more value with the guarantee than without. Had NSC entered into the FMC absent Wells Fargo’s guarantee, NSC would have been entitled to repossess the HVAC when Si-Tanka defaulted. Wells Fargo attempts to claim that the guarantee added no value to the loan collateral by evincing its perfected security interest in all University property. However, Wells Fargo overlooks the fact that it was anything but assured to garner sufficient proceeds on a foreclosure sale to cover the outstanding loan balance. Absent a functioning HVAC, the likelihood of a full recovery at foreclosure would have been even more remote. Since the guarantee did add value to the collateral it was likewise convenient and useful to the loan and thus incidental to that authorized activity. Consequently, Wells Fargo also had a substantial -interest in making the guarantee from this perspective.

[¶'20.] Although the enforceability of Wells Fargo’s guarantee is evident from this analysis, we also deem it necessary to address Wells Fargo’s claim that it received nothing from the HVAC transaction. First and obviously, the bank received cash in hand from NSC that it applied against the loan balance thereby reducing its exposure and increasing its equity in the loan by $250,000.00. Second, as discussed, the bank benefited from the value added to the collateral by the guarantee. Third, Wells Fargo benefited from NSC’s additional expenditures made in upgrading the HVAC.

[¶ 21.] The second benefit is not quantifiable. However, the first and the third are completely quantifiable as evident from the “buyout provisions” of the FMC. That Wells Fargo and its predecessor, Marquette, were cognizant of these benefits is obvious from the credit committee’s August 11, 1999 loan approval that made reference to the anticipated $250,000.00 payment from NSC. This cognizance is further demonstrated by the loan approval documents that show, as part of the loan approval process, Wells Fargo considered the weight of the maximum potential buyout price against the risk minimizing benefits of the HVAC transaction.

[¶ 22.] Wells Fargo received $250,000.00 in cash, based on the retail price of the HVAC, thus improving its equity position in the loan. NSC invested an additional $250,000.00 that enhanced the value of the HVAC to Wells Fargo on buyout. Less straight-line depreciation, Wells Fargo realized a quantifiable benefit of $450,000.00 and its guarantee is enforceable to that extent.

[¶ 23.] We reverse and remand for further proceedings consistent with this opinion.

[¶ 24.] SABERS and MEIERHENRY, Justices, and MILLER, Retired Justice, concur.

[¶ 25.] ZINTER, Justice, concurs in result.

[¶ 26.] MILLER, Retired Justice, sitting for KONENKAMP, Justice, disqualified.

ZINTER, Justice

(concurring in result).

[¶ 27.] I agree that the guarantee was not ultra vires. In my view, it was a lawful activity even without relying on the $250,000.00 payment that was used to reduce the amount of the initial loan. The guarantee was lawful simply because the Facilities Management Contract (FMC) was in furtherance of Marquette/Wells Fargo’s own rights and it was an integral part of Marquette/Wells Fargo’s authorized lending transaction with the University’s owners.

[¶ 28.] First, the FMC was in furtherance of Marquette/Wells Fargo’s own rights. It has not been specifically mentioned that Marquette/Wells Fargo apparently did not have a first security interest in the HVAC, water heating, kitchen, and lighting equipment at the University. And, there is no dispute that such equipment was indispensable to the functional viability of Marquette/Wells Fargo’s collateral; ie. the University and its physical plant. Therefore, on the limited record we have before us, in the event of default, it was through the FMC that Marquette/Wells Fargo acquired a right to obtain the equipment that was indispensable to making its collateral viable.

[¶ 29.] Second, the FMC was an integral part of the University loan. As a part of the loan, Marquette/Wells Fargo made a default on the FMC a default on the loan. Furthermore, Marquette/Wells Fargo acknowledged that the FMC transaction was important to maintain the equipment and minimize its risk. The loan approval documentation specifically indicated that the FMC transaction was being pursued in “an effort to minimize risk in the maintenance of the HVAC system.” Obviously, by entering into the FMC, Marquette/Wells Fargo was being assured that the equipment necessary to make its collateral valuable would be maintained (and actually updated), increasing the likelihood of the University’s success and improving the chances that the loan would be repaid.

[¶ 30.] I would simply hold that these two interests were “substantial,” i.e. “incidental” to Marquette/Wells Fargo’s authorized lending activities within the meaning of 12 C.F.R. § 7.1017 and the relevant OCC decisions cited by the Court. See supra, ¶ 15. Therefore, Marquette/Wells Fargo was authorized to guarantee the FMC, and the judgment of the circuit court must be reversed.

[¶ 31.] Regarding the remand, I would note that it may include consideration of Marquette/Wells Fargo’s contractual defenses of lack of consideration and lack of officer authority to enter into the contract. Marquette/Wells Fargo raised these issues before the circuit court. However, because the circuit court’s summary judgment was based solely upon a national bank’s authority to guarantee the FMC, these contractual defenses were not considered. In its appellate brief, Marquette/Wells Fargo also requests a remand to challenge whether the FMC constitutes a guarantee. It does not appear this issue was raised before the circuit court. I would leave it to the circuit court to determine whether that issue was preserved by presenting it below.

      . In fact NSC did invest $250,000.00 in upgrades shortly after it purchased the HVAC.

      . “Bigfoot (Si-Tanka) College” is a non-profit corporation registered with the South Dakota Secretary of State and established by the Cheyenne River Sioux Tribe to operate the University under the name Si-Tanka Huron University.

      . Si-Tanka received an additional $3.3 million loan, for the purchase of the University, from the United States Department of Agriculture, Rural Housing Service.

      . Wells Fargo acquired Marquette in February 2002.

      . We also take note that subsequent to the First Circuit Court of Appeals decision in Arnold Tours Inc., the United States Supreme Court expanded the scope of that decision by holding that the “business of banking” is not limited to the enumerated powers of 12 U.S.C. § 24 (Seventh), but that the Comptroller of the Currency has, within reasonable bounds, the discretion to authorize activities beyond those specifically enumerated. NationsBank of North Carolina, N.A. v. Variable Annuity Life Ins. Co., 513 U.S. 251, 258, 115 S.Ct. 810, 814, 130 L.Ed.2d 740 n. 2 (1995).

      . Our decision in Western Petroleum Co., 367 N.W.2d 773 preceded 12 C.F.R. § 7.1017 and the recent OCC Interpretive Letters. Although the language we used in Western Petroleum Co., is not technically the same as the "substantial interest” language utilized in 12 C.F.R. § 7.1017, as interpreted by the OCC, it does nonetheless recognize the same principle.
      In noting that a bank has to be more than interested in the success of its debtor before it can issue an enforceable guarantee of its debtor’s obligations, id. at 779 (citing Rice & Hutchins Atlanta Co. v. Commercial Nat'l Bank, 18 Ga.App. 151, 88 S.E. 999, 1000 (1916)), we held that a national bank’s guarantee that its customer would pay vendor invoices was not enforceable because the bank did not have an interest in and was not benefited by the vendor goods. Id. Specifically, the would-be guarantor received no consideration for its letter of guarantee; no property was transferred to it; no security interest was created and no direct pecuniary interest arose in it. Id. To put it another way, in Western Petroleum Co., there was no nexus between the bank-permissible transaction (the borrower-lender relationship between the bank and its customer) and the guarantee of the customer's agreement to pay vendor invoices. See OCC Interpretive Letters supra. In reaffirming the continued applicability of our decision in Western Petroleum Co., we hereby for the sake of consistency adopt the "substantial interest" language of 12 C.F.R. § 7.1017, as interpreted by the OCC, as the standard by which the enforceability of national bank guarantees are determined.

      . The Court appears to suggest that Marquette/Wells Fargo did have a security interest in the HVAC system. See supra, ¶ 18. However, at the hearing on the motions for summary judgment, Northwestern specifically indicated "that Wells Fargo did not have a security interest in the HVAC system.” And, Marquette/Wells Fargo did not dispute that assertion at the hearing. Moreover, although there is no dispute that Marquette/Wells Fargo had a blanket security interest in buildings and equipment, Marquette/Wells Fargo has not disputed Northwestern's numerous statements in its brief that, when Si-Tanka defaulted on the FMC, Northwestern was entitled to repossess the equipment. Therefore, although the record is not clear, it appears that at a minimum, any Marquette/Wells Fargo security interest in the equipment at issue was inferior to Northwestern's rights in the collateral.

      . No argument has been raised regarding "fixtures” and the potential incorporation of Northwestern's equipment into Marquette/Wells Fargo’s collateral and security interest. The parties have treated the equipment as severable and removable from the Marquette/Wells Fargo's collateral. Therefore, as the parties have, we must assume the equipment was removable and not subject to a first security interest of Marquette/Wells Fargo. Moreover, although Marquette/Wells Fargo does note that it was secured on the "property of the University,” Marquette/Wells Fargo does not argue that it was fully secured or over-secured. Consequently, Marquette/Wells Fargo had a substantial interest in the equipment at issue.


source: Caselaw Access Project

author: WIGGINS, Justice.

license: Public Domain

text:
    David FELDERMAN, Executor of the Estate of Mary Belle Westphal, Deceased, Appellant, v. CITY OF MAQUOKETA, Iowa, Appellee.
    No. 05-1407.
    Supreme Court of Iowa.
    May 11, 2007.

      Robert F. Wilson of Wilson, Mafias, Hauser & Den Beste, Cedar Rapids, for appellant.
    Michael C. Walker of Hopkins & Hueb-ner, P.C., Davenport, for appellee.
   WIGGINS, Justice.

In this case we must decide if the district court was correct when it directed a verdict in favor of the City of Maquoketa in a personal injury action. Because the district court correctly directed the verdict in favor of the City, we vacate the decision of the court of appeals and affirm the judgment of the district court.

On July 8, 2003, Mary Belle Westphal went to the Maquoketa Community Center to watch her great-grandson attend a swimming class. It was a rainy day, so the swimming class was held indoors at the center. Westphal walked up the center’s front stairs. She reached the landing on the top of the stairs, but after pulling on the front door, she fell backward, flew through the air, and landed at the base of the stairs. No one witnessed Westphal’s fall. Westphal suffered multiple elbow fractures, a fractured shoulder, a fractured hip, a fractured rib, and a gash in her head. She was in and out of the hospital and other care facilities from the time of the fall until May 2004 when she died.

Westphal’s estate brought a negligence action against the City. The estate’s petition alleged the City was negligent in the design, construction, and maintenance of the center. The matter proceeded to a jury trial. At the close of the estate’s case, the City moved for a directed verdict. The district court granted the motion finding there was insufficient evidence to create a jury question on the issue of liability. The estate appealed the directed verdict.

We transferred the case to our court of appeals. The court of appeals upheld the district court’s directed verdict with respect to the estate’s negligent design and construction claims. However, the court of appeals determined the evidence generated a jury question on whether the City negligently maintained the center’s front entrance. The court of appeals remanded the case to the district court for a retrial.

The City petitioned our court for further review and this court granted the petition.

We review the district court’s grant of a directed verdict for correction of errors at law. Determan v. Johnson, 613 N.W.2d 259, 261 (Iowa 2000). In doing so we take into consideration all reasonable inferences that could be fairly made by the jury and view the evidence in the light most favorable to the nonmoving party. Yates v. Iowa West Racing Ass’n, 721 N.W.2d 762, 768 (Iowa 2006). If there is substantial evidence in the record to support each element of a claim, the motion for directed verdict must be overruled. Id. Evidence is substantial when reasonable minds would accept the evidence as adequate to reach the same findings. Id.; see also Determan, 613 N.W.2d at 261. “Our role, then, is to determine ‘whether the trial court correctly determined that there was insufficient evidence to submit the issue ... to the jury.’ ” Determan, 613 N.W.2d at 261 (quoting Hasselman v. Hasselman, 596 N.W.2d 541, 545 (Iowa 1999)).

I. Negligent Design and Construction. Viewing the evidence in the light most favorable to the estate, the evidence establishes the center’s front threshold, doors, landing, railings, and stairs had not been reconstructed since 1967 when the building was erected. The estate argues the City’s answer to an interrogatory indicates in approximately 1992 the City replaced the outside exterior front doors and in approximately 1999 the City installed new latches on the outside doors. However, the estate never made this interrogatory answer a part of the record. Accordingly, we will not consider the answer in deciding this appeal.

The only evidence supporting a negligent design or construction theory came from the estate’s expert. He testified the center’s front landing, stairs, and railings failed to comply with certain provisions of the ADA Standards for Accessible Design. The ADA standards relied upon by the expert were revised as of July 1, 1994. See 28 C.F.R. pt. 36 app. A (1994).

The Code provides a city is immune from liability for negligent design or construction of a public facility if the facility “was constructed or reconstructed in accordance with a generally recognized engineering or safety standard, criteria, or design theory in existence at the time of the construction or reconstruction.” Iowa Code § 670.4(8) (2003). A city is not required to upgrade, improve, or alter any aspect of an existing public facility to new, changed, or altered design standards. Id. The person making a negligent design or construction claim holds the burden to establish the city did not construct or reconstruct the public facility in accordance with a generally recognized engineering or safety standard, criteria, or design theory in existence at the time of the construction or reconstruction. Fischer v. City of Sioux City, 695 N.W.2d 31, 34 (Iowa 2005).

The estate offered no proof of the City’s failure to adhere to a generally recognized engineering or safety standard, criteria, or design theory in existence in 1967 when the center was constructed. Consequently, the estate’s claims based on negligent design and construction must fail.

In its reply brief the estate raises for the first time its argument that the City purchased insurance; thus, its immunity for negligent design and construction is waived. See Iowa Code § 670.4; see also City of West Branch v. Miller, 546 N.W.2d 598, 604 (Iowa 1996) (stating “if a liability insurance policy is purchased covering the section 670.4 exceptions, governmental immunity is waived as to those exceptions to the extent stated in the policy”). The estate failed to raise the waiver of immunity issue in the district court. Ordinarily we do not decide an issue on appeal that was not raised by a party or decided by the district court. Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002). Accordingly, we will not address the waiver issue for the first time on appeal.

Therefore, we affirm the district court’s ruling granting the City a directed verdict on the estate’s claims for negligent design and construction.

II. Negligent Maintenance. Section 670.4(8) does not provide a city with immunity for negligent maintenance. Iowa Code § 670.4(8); see also Radley v. Transit Auth., 486 N.W.2d 299, 302 (Iowa 1992) (holding “Iowa has a policy that permits suits against the state for negligent maintenance of highways”). Generally, questions of negligence and proximate cause are for the jury. Larkin v. Bierman, 213 N.W.2d 487, 488 (Iowa 1973). Only in exceptional cases can a court decide questions of negligence and proximate cause as a matter of law. Id.

The undisputed evidence establishes the entrance to the center had two front doors, a right door and a left door. Viewing the evidence in the light most favorable to the estate, reasonable minds could find Westphal was unable to pull open the door to gain access to the center. Further, reasonable minds could accept that the force Westphal exerted to pull open the door caused her to lose her grip of the handle, fall backward, and land at the base of the stairs.

We also find reasonable minds could determine Westphal attempted to open either the right or the left door. We base this conclusion on Westphal’s testimony, taken by the City’s insurance adjuster, and admitted into evidence by the district court. In her statement Westphal initially stated when she tried to enter the center she attempted to pull open the right door. Later in her statement Westphal said she was somewhat confused by the references to the right and the left. She then changed her statement and said the door she attempted to pull open was the left door.

Regardless if reasonable minds determine Westphal lost her grip on the right door or the left door, the estate’s claim for negligent maintenance cannot withstand the City’s motion for directed verdict. It does not matter which door Westphal lost her grip on because there is no evidence in the record to establish the City did not properly maintain either door on the day Westphal fell.

The estate attempted to offer evidence of negligent maintenance through the testimony of its expert and Westphal’s granddaughter-in-law. This testimony, however, does not establish the City failed to maintain either of the center’s front doors at the time of Westphal’s fall.

The estate’s expert based his testimony on Westphal’s statement that she was trying to open the left door and on his inspection, some two years after Westphal’s fall, of the center’s front threshold, doors, landing, railings, and stairs. The expert testi-Red the left door was the “active” door. The expert further testified there were markings on the concrete below the left door indicating a door had previously dragged on the landing. He was unable to testify when these markings were made on the concrete.

On the day the expert made his inspection, the doors were locked and unavailable for testing. Therefore, he was not able to open or close the left door to determine if it made or was making the markings on the concrete. He was also unable to determine if there were any other problems with the left door. The expert testified he did not know if the door was difficult to open or not. Additionally, he testified even if he knew the door was difficult to open on the day of his inspection, this fact does not mean the door would have been difficult for Westphal to open on the day of her fall. Thus, specific to the day of West-phal’s fall, the expert could not and did not give any opinion regarding a maintenance problem with the center’s left door. Accordingly, there was not substantial evidence in the record so reasonable minds could find the City failed to properly maintained the center’s left door at the time of Westphal’s fall.

Westphal’s granddaughter-in-law provided the only evidence regarding the right door. She testified that on the day of Westphal’s fall, she arrived at the center shortly before Westphal. As she attempted to pull the right door open, the granddaughter-in-law held her child with her left hand. She was unable to pull the right door open. She thought the door was locked. After pulling on the door twice, someone from inside the center came and opened the door for her.

The granddaughter-in-law’s testimony does not establish that the City failed to maintain the right door at the time of Westphal’s fall. At best, this testimony supports the testimony of the estate’s expert that the left door was the only active door. If the right door was locked, as Westphal’s granddaughter-in-law thought, the door failed to open because it was locked not because the City failed to maintain the right door at the time of West-phal’s fall. Accordingly, there was not substantial evidence in the record so reasonable minds could find the City failed to properly maintain the center’s right door at the time of Westphal’s fall.

Consequently, this is one of those exceptional cases where the court should find, as a matter of law, a fact question regarding the issue of negligence or proximate cause was not generated by the evidence. Therefore, we must affirm the decision of the district court when it directed a verdict in favor of the City.

Because the district court correctly directed the verdict in the City’s favor, we vacate the decision of the court of appeals and affirm the judgment of the district court.

DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED.

All justices concur except HECHT, J., who takes no part.


author: LARSON, Justice.

text:
    STATE PUBLIC DEFENDER, Plaintiff, v. IOWA DISTRICT COURT FOR WOODBURY COUNTY, Defendant.
    No. 04-2028.
    Supreme Court of Iowa.
    May 11, 2007.

      Thomas G. Becker, State Public Defender, Mark C. Smith, First Assistant State Public Defender, and Julie A. Miller, Senior Assistant State Public Defender, Des Moines, for plaintiff.
    Elizabeth A. Rosenbaum, Sioux City, for defendant.
   LARSON, Justice.

Attorney Elizabeth Rosenbaum was appointed by the juvenile court to act as guardian ad litem in a child-in-need-of-assistanee proceeding. Rosenbaum was not under contract with the State Public Defender. Upon completion of her representation, Rosenbaum submitted her fee claim to the public defender. The public defender denied that portion of Rosen-baum’s fee claim in excess of statutory fee limitations because Rosenbaum did not submit to the juvenile court her application to exceed fee limitations prior to exceeding the fee limitations, and there was no finding of good cause for the late filing of her application in the court’s order authorizing her to exceed. The public defender filed a petition for writ of certiorari after the juvenile court ordered it to pay Rosen-baum’s entire fee claim on the basis of quantum meruit. We conclude that quantum meruit cannot serve as the basis for recovery when the statutory requirements for compensation of court-appointed attorneys have not been met. Writ sustained.

I. Facts and Prior Proceedings.

In October 2003 the juvenile court for Woodbury County appointed Elizabeth Rosenbaum as guardian ad litem in a child-in-need-of-assistance proceeding. Rosenbaum was not under contract with the public defender at the time of the appointment, though she had, in the past, been under such a contract. The court appointed Rosenbaum to this particular case because she had represented the child in a prior proceeding and was familiar with the child’s background and the complicated case history.

In March 2004 Rosenbaum submitted a fee claim of $2194.81 for her representation of the child pursuant to Iowa Code section 815.7 (2003). Because Rosen-baum’s fees exceeded the statutory limit of $1000, an application and order to exceed fee limitations, both filed March 17, 2004, were attached to the fee claim. The public defender reduced Rosenbaum’s fee claim to $1117.31 (the $1000 fee limit for appointment as a guardian ad litem in a child-in-need-of-assistance proceeding plus $117.31 for reasonable expenses), explaining that Rosenbaum’s application to exceed was untimely because it was not filed, and approved, prior to actually exceeding the fee limitations. See Iowa ' Code § 815.10A(2). Further, the order authorizing Rosenbaum to exceed did not contain a finding of good cause for the late filing of the application, as required by Iowa Code section 815.10A(2).

Rosenbaum filed a motion for review of her fee claim, arguing she was entitled to her entire fee claim on the basis of quantum meruit. Rosenbaum asserted that she had previously been permitted to obtain any necessary orders to exceed statutory fee limitations at the time she submitted her fee claim, and the public defender had honored such orders. After a hearing on the matter, the juvenile court concluded that, although Rosenbaum did not comply with the statutory requirements governing compensation of court-appointed attorneys, she was entitled to fees in excess of the fee limitations under a theory of quantum me-ruit. The juvenile court stated:

Although there is a statute [Iowa Code section 815.10A(2) and Iowa Administrative Code rule 493-12.6(3)] setting forth the rule cited by the Public Defender, it has not been enforced until recently. To hold a party responsible for a rule that has consistently been ignored does not conform to equity principles. Moreover, this rule is one of procedure and seems to be something of a technicality. Even though Rosenbaum has completed a great amount of work in this case, the Public Defender claims she should not be paid for 50% of her fee claim because she did not file the correct paper at the correct time. This Court finds that to deny Rosenbaum her fee does not comply with principles of equity.

The public defender filed a petition for writ of certiorari, which we granted. The public defender argues that Rosenbaum did not properly raise the issue of quantum meruit in her motion for review and that quantum meruit cannot be used to supersede the statutory requirements of Iowa Code section 815.10A(2).

II. Standard of Review.

In a certiorari case, we review the district court’s ruling for correction of errors at law. State Pub. Defender v. Iowa Dist. Ct., 721 N.W.2d 570, 572 (Iowa 2006).

“A writ of certiorari lies where a lower board, tribunal, or court has exceeded its jurisdiction or otherwise acted illegally .... ‘Illegality exists when the court’s findings lack substantial evidentiary support, or when the court has not properly applied the law.’ ”

Id. (quoting State Pub. Defender v. Iowa Dist. Ct., 633 N.W.2d 280, 282 (Iowa 2001) (citations omitted)). We are bound by the district court’s factual findings, if well supported. State Pub. Defender v. Iowa Dist. Ct., 644 N.W.2d 354, 356 (Iowa 2002).

III. Merits.

The public defender is statutorily authorized to review fee claims for representation of indigents in Iowa. Iowa Code § 13B.4(4). Because Rosenbaum was not under contract with the public defender, Iowa Code sections 815.7 and 815.10A govern her compensation. The public defender is required to establish fee limitations for particular categories of cases, and the fee limitation for an attorney appointed as guardian ad litem for a minor in a child-in-need-of-assistance proceeding is $1000. Iowa Code § 13B.4(a); Iowa Admin. Code r. 493-12.6. An attorney may recover fees in excess of this fee limitation for good cause. The procedure for recovering fees in excess of fee limitations is set forth in Iowa Code section 815.10A(2):

An attorney shall obtain court approval prior to exceeding the fee limitations established by the state public defender pursuant to section 13B.4. An attorney may exceed the fee limitations, if good cause is shown. An attorney may obtain court approval after exceeding the fee limitations, if good cause is shown. The order approving an application to exceed the fee limitations shall be effective from the date of filing the application unless the court order provides an alternative effective date. Failure to file an application to exceed a fee limitation after exceeding the fees shall not constitute good cause. The application and the court order approving the application to exceed fee limitations shall be submitted with any claim for compensation.

(Emphasis added.)

The reasonableness of Rosen-baum’s fee claim is undisputed. Thus, had she filed a timely application to exceed fee limitations, the court likely would have found good cause for her to exceed and would have issued an order to that effect. As the juvenile court emphasized, this was an extremely complicated case involving a contested emergency removal and allegations of severe child abuse by adoptive parents. Rosenbaum’s prior involvement with the child and her knowledge of the past case history improved the quality of representation for the minor child. We commend Rosenbaum for her willingness to act as a court-appointed attorney in these difficult cases and for providing quality representation for indigents. However, it is clear that she did not comply with the requirements set forth in section 815.10A(2). A testament to the difficulty of this particular case, Rosenbaum exceeded the $1000 fee limitation on November 8, 2003, a full three months before she completed her representation. Unfortunately, she did not file her application to exceed until March 17, 2004. Although the juvenile court approved her application, thus finding good cause for her to exceed the fee limitation, it did not find good cause for Rosenbaum’s failure to file a timely application. Therefore, pursuant to Iowa Code section 815.10A(2), the public defender was clearly entitled to deny that portion of Rosenbaum’s fee claim in excess of the fee limitation.

Nonetheless, the juvenile court concluded that, under a theory of quantum meru-it, Rosenbaum was entitled to her entire fee claim. We do not address the public defender’s contention that Rosenbaum failed to properly raise this issue in her motion for review, as required by Iowa Administrative Code rules 493-12.9(1)(b) and 493-12.9(2)(d), and assume, for purposes of this certiorari action, that the issue was properly pled.

Quantum meruit is a quasi-contractual theory of recovery providing that, “ ‘[when] one person renders services for another which are known to and accepted by him, the law implies a promise on his part to pay therefor.’ ” In re Estate of Walton, 213 Iowa 104, 105-06, 238 N.W. 577, 577 (1931) (quoting Scully v. Scully’s Ex’r, 28 Iowa 548, 550-51 (1870)). The theory of quantum meruit is premised on the idea that it is unfair to allow a person to benefit from another’s services when the other expected compensation. While it is tempting to allow recovery under a theory of quantum meruit in the instant case, ^especially considering the hard work and quality representation Rosenbaum provided to thexpiinor child, we cannot do so.

In impacting section 815.10A(2), the legislature set forth clear requirements with which a court-appointed attorney must comply in order to receive compensation in excess of statutory fee limitations. This legislation serves to protect both the court-appointed attorney and the taxpayer by ensuring that the attorney will be compensated for all reasonable services provided, and the taxpayer will not be saddled with costs that are unnecessary for the representation in each particular case. Requiring prior approval to exceed the fee limitations provides a level of control over the indigent-defense fund, which is necessary to ensure that all those who are entitled to legal representation receive it. Allowing a theory of quantum meruit to supersede clear statutory requirements would serve to undermine the legislature’s purpose in enacting section 815.10A(2).

We have considered this issue previously in other contexts and have concluded that quantum meruit cannot be used to supersede the affirmative requirements of a statute. See Equal Access Corp. v. Utils. Bd., 510 N.W.2d 147, 151 (Iowa 1993) (quoting Madrid Lumber Co. v. Boone County, 255 Iowa 380, 387, 121 N.W.2d 523, 527 (1963)) (“ ‘[The court is] bound by positive provisions of a statute ... and where the contract is void because not in compliance with express statutory provisions, a court ... cannot give validity to the contract [under a theory of quantum meruit].’ ”); Maynes Real Estate, Inc. v. J.F. McPherron, 353 N.W.2d 425 (Iowa 1984). As we stated in Maynes,

[u]nder the plaintiffs’ theory, it would make little difference whether the statutory requirement of a writing had been complied with or not if they could fall back on the theory of quantum meruit. Clearly, the result would defeat the purpose of the rule ....
We hold since plaintiffs cannot recover on an oral contract of employment, neither can they recover for the same services on a quantum meruit theory.

Maynes Real Estate, Inc., 353 N.W.2d at 427-28. We conclude that the juvenile court exceeded its authority by ordering the public defender to pay Rosenbaum fees in excess of statutory fee limitations on the basis of quantum meruit.

IV. Conclusion.

Iowa Code section 815.10A(2) clearly sets forth the requirements with which a court-appointed attorney must comply in order to recover fees in excess of statutory fee limitations. Although it appears the public defender has, in the past, failed to consistently enforce these requirements, a theory of quantum meruit cannot be asserted in order, to circumvent affirmative statutory requirements. We sympathize with Rosenbaum and understand her frustration with the public defender’s denial of her fee claim. However, as we have stated in the past, “[i]f this rule works some ‘inequities in particular cases, it is within the purview of the legislature and not this court to correct what is now well-settled public policy.’ ” Maynes Real Estate, Inc., 353 N.W.2d at 428 (quoting Wright v. Smith, 105 R.I. 1, 249 A.2d, 56, 57 (1969)). The juvenile court exceeded its authority by ordering the public defender to pay Rosenbaum fees in excess of statutory feé limitations on the basis of quantum meru-it. We sustain the public defender’s writ of certiorari.

WRIT SUSTAINED.


author: PAGE, Justice. ANDERSON, G. BARRY, Justice

text:
    In re the Matter of Nancy SOOHOO, petitioner, Respondent, v. Marilyn JOHNSON, Appellant.
    No. A05-537.
    Supreme Court of Minnesota.
    May 10, 2007.

      M. Sue Wilson, James T. Williamson, M. Sue Wilson Law Offices, P.A., Minneapolis, MN, for Appellant.
    Michael L. Perlman, Perlman Law Office, Minnetonka, MN, for Respondent.
   OPINION

PAGE, Justice.

Appellant Marilyn Johnson appeals from the judgment of the district court granting respondent Nancy SooHoo’s petition seeking visitation with Johnson’s two minor children pursuant to Minn.Stat. § 257C.08, subd. 4 (2006), which allows the court to grant reasonable visitation to a person with whom the child has resided for at least two years. Johnson challenges the constitutionality of section 257C.08, subdivision 4, as well as the visitation schedule ordered by the court. In addition, Johnson challenges the court’s order requiring Johnson to attend counseling “to address her tension and anxiety relative to the girls” and the discretion awarded by the court to SooHoo’s therapist to determine “whether either child or both needs to accompany [SooHoo] to therapy.” We conclude that the statute is constitutional both on its face and as applied, and that the court did not abuse its discretion in the amount of visitation it ordered or in awarding visitation without first holding an evidentiary hearing. We also conclude, however, that the court abused its discretion in ordering Johnson to attend therapy. Accordingly, we affirm in part and reverse in part.

Johnson and SooHoo, who lived together and jointly owned a house in Minneapolis, ended a 22-year relationship in the fall of 2003. During the course of that relationship, Johnson adopted two children from China. When Johnson adopted the first child, both she and SooHoo traveled to China. When Johnson adopted the second child, SooHoo remained in Minneapolis and cared for the first child while Johnson went to China. SooHoo did not adopt either of the children, but the record indicates that Johnson and SooHoo co-parented the children, recognized themselves as a family unit with two mothers, and represented themselves to others as such. For example, SooHoo took maternity leave to care for both children upon their arrival in the United States. SooHoo also participated in the selection of child-care providers and schools for the children and shared in the daily parenting responsibilities, including dropping off and picking up the children from day care, helping with school projects and homework, preparing meals for the family, taking the children to doctors appointments (including authorizing the children’s immunizations), coordinating extracurricular activities and play dates, providing the sole care while Johnson was away on business, and taking the children to California to visit SooHoo’s extended family, all without apparent objection by Johnson. The record further reflects that the children referred to SooHoo as “mommy,” and referred to SooHoo’s parents as their grandparents. In the information provided to the children’s schools, Johnson listed SooHoo as mother number two and listed the last name of one of the children as Johnson-SooHoo. SooHoo attended the children’s parent-teacher conferences with Johnson, during which both women signed off on the teacher’s goal setting report as “Parent/Guardian.”

The relationship between Johnson and SooHoo dissolved after a domestic incident that resulted in reciprocal orders for protection. The district court order against SooHoo barred SooHoo from residing at or visiting the home she owned with Johnson. During the five or six months after the court issued the reciprocal orders for protection, SooHoo was allowed to see the children for a total of only 48 hours.

In late 2003, SooHoo filed a petition seeking sole physical and legal custody of the children. In the alternative, she sought visitation. Under chapter 257C, only de facto custodians and interested third parties (as defined in section 257C.01, subdivisions 2 and 3 (2006)) have standing to petition for custody. Accordingly, the district court first addressed SooHoo’s petition for custody by conducting an evidentiary hearing to determine whether SooHoo had standing under chapter 257C to pursue custodial rights. The court found that SooHoo was an interested third party under the statute and ordered the Hennepin County Department of Court Services (court services) to perform a custody and parenting time evaluation. The court also ordered temporary visitation for SooHoo.

After further evidentiary hearings, during which the district court heard testimony from SooHoo and Johnson, several of their acquaintances, and the court services evaluator who conducted the custody and parenting time evaluation, the court denied SooHoo’s custody petition. In its order denying the custody petition, the court ordered Johnson and SooHoo to submit proposed visitation schedules. Johnson submitted a memorandum along with her proposed visitation schedule in which she urged the court to halt temporary visitation and argued that court-ordered visitation would violate her due process rights as a fit parent. Ultimately, the court awarded SooHoo visitation, which, in addition to weekly visitation, included a holiday visitation schedule that divided the major holidays between SooHoo and Johnson and an extended period of visitation during the summer months. The court also ordered that SooHoo employ a therapist to address her differential attention to the children and that Johnson “employ a counselor (or continue with existing counseling) to address her tension and anxiety relative to the [children].” In awarding visitation, the court concluded that Minn. Stat. § 257C.08, subd. 4, withstood constitutional muster. The court of appeals affirmed. Soohoo v. Johnson, A05-537, 2006 WL 851808 (Minn.App. Apr. 4, 2006), rev. granted (Minn. June 20, 2006).

I.

Johnson first challenges the constitutionality of Minn.Stat. § 257C.08, subd. 4, arguing that it violates her right to due process. Section 257C.08, subdivision 4, provides that a third party (excluding foster parents), who resided in a household with a child for two or more years but no longer resides with the child, may petition the court for an order granting reasonable visitation with the child. Before a court may grant visitation, the statute requires it to determine: (1) that visitation with the third party would be in the child’s best interest; (2) that the third party and the child have established “emotional ties creating a parent and child relationship”; and (3) that granting the third-party visitation would not interfere with the relationship between the custodial parent and the child. Minn.Stat. § 257C.08, subd. 4(l)-(3).

The U.S. Supreme Court has explained that the substantive due process rights provided by the Fourteenth Amendment afford “heightened protection against government interference with certain fundamental rights and liberty interests.” Washington v. Glucksberg, 521 U.S. 702, 720, 117 S.Ct. 2258, 138 L.Ed.2d 772 (1997). A parent’s right to make decisions concerning the care, custody, and control of his or her children is a protected fundamental right. Troxel v. Granville, 530 U.S. 57, 65, 120 S.Ct. 2054, 147 L.Ed.2d 49 (2000) (citing Meyer v. Nebraska, 262 U.S. 390, 399, 401, 43 S.Ct. 625, 67 L.Ed. 1042 (1923)). Johnson contends that section 257C.08, subdivision 4, is unconstitutional on its face and as applied in this case because it violates her rights as a fit parent to decide the care, custody, and control of her children.

In Troxel, the Supreme Court struck down as unconstitutional a Washington statute that granted “[a]ny person” standing to petition for visitation at “any time” so long as visitation was in the best interests of the child. Troxel, 530 U.S. at 61, 73, 120 S.Ct. 2054 (quoting Wash. Rev. Code. § 26.10.160(3) (1994)). The case came to the Court from the Washington Supreme Court, which held the statute unconstitutional and based its holding on its conclusion that the U.S. Constitution allows states to interfere with the due process rights of parents to raise their children only when it is necessary to prevent harm to the child. Id. at 63, 120 S.Ct. 2054. Additionally, the Washington Supreme Court reasoned that the Washington statute swept too broadly because it allowed any person to petition for court-ordered visitation at any time with the only requirement being that visitation be in the best interests of the child. Id.

A four Justice plurality affirmed the judgment but issued a substantially narrower holding than the Washington Supreme Court. The Supreme Court declared the Washington statute unconstitutional as applied but declined to address whether third-party visitation statutes are per se unconstitutional. Id. at 73, 120 S.Ct. 2054. The Court explained:

Because we rest our decision on the sweeping breadth of [the Washington statute] and the application of that broad, unlimited power in this case, we do not consider the primary constitutional question passed on by the Washington Supreme Court — whether the Due Process Clause requires all nonpa-rental visitation statutes to include a showing of harm or potential harm to the child as a condition precedent to granting visitation. We do not, and need not, define today the precise scope of the parental due process right in the visitation context. In this respect, we agree with Justice KENNEDY that the constitutionality of any standard for awarding visitation turns on the specific manner in which that standard is applied and that the constitutional protections in this area are best “elaborated with care.”

Id. (quoting id. at 101, 120 S.Ct. 2054 (Kennedy, J., dissenting)). In addition, the Court set out three guiding principles necessary for a third-party visitation statute to survive a constitutional challenge: (1) the statute must give some special weight to the fit custodial parent’s decision regarding visitation; (2) there can be no presumption in favor of awarding visitation; and (3) the court must assert more than a mere best-interest analysis in support of its decision to override the fit parent’s wishes. Id. at 69-70, 120 S.Ct. 2054. These guiding principles ensure that third-party visitation statutes are narrowly tailored to the governmental interest in protecting the general welfare of children.

The constitutionality of a statute is a question of law that we review de novo. Hamilton v. Com’r of Pub. Safety, 600 N.W.2d 720, 722 (Minn.1999). Our power to “declare a law unconstitutional is to be exercised only when absolutely necessary in the particular case and then with great caution.” Grobe v. Oak Ctr. Creamery Co., 262 Minn. 60, 61, 113 N.W.2d 458, 459 (1962) (internal quotation marks omitted). We presume that, in enacting section 257C.08, the legislature did not intend to violate either the U.S. Constitution or the Minnesota Constitution. Minn.Stat. § 645.17 (2006). Accordingly, we will uphold a statute unless the challenging party demonstrates that it is unconstitutional beyond a reasonable doubt. Hamilton, 600 N.W.2d at 722.

Johnson first contends that third-party visitation statutes like section 257C.08, subdivision 4, are unconstitutional per se because they fail to give proper deference to a fit parent’s decision regarding visitation. A facial challenge to the constitutionality of a statute requires a showing that “ ‘no set of circumstances exists under which the Act would be valid.’ ” Ohio v. Akron Ctr. for Reprod. Health, 497 U.S. 502, 514, 110 S.Ct. 2972, 111 L.Ed.2d 405 (1990) (quoting Webster v. Reprod. Health Serv., 492 U.S. 490, 524, 109 S.Ct. 3040, 106 L.Ed.2d 410 (1989) (O’Connor, J., concurring)). But the Supreme Court in Troxel declined to hold that third-party visitation statutes are per se unconstitutional. Troxel, 530 U.S. at 73, 120 S.Ct. 2054. And we believe that in expressly declining to hold that third-party visitation statutes are per se unconstitutional, the Court recognized that there may be instances when the state may constitutionally intrude upon a fit parent’s right to the care, custody, and control of the parent’s child and order visitation against the parent’s wishes. ' Id. We believe such is the case with section 257C.08, subdivision 4, and we reject Johnson’s argument on this point.

We therefore turn to an analysis of the language of the statute. As a preliminary matter, we note that the Supreme Court in Troxel did not articulate the standard of review to be applied when reviewing third-party visitation statutes; we conclude that the appropriate standard in this case is strict scrutiny. Strict scrutiny is the appropriate standard of review when fundamental rights are at issue and, as we noted above, the Court has declared that a parent’s right to make decisions concerning the care, custody, and control of his or her children is a protected fundamental right. Troxel, 530 U.S. at 65, 120 S.Ct. 2054; see Wisconsin v. Yoder, 406 U.S. 205, 220-21, 92 S.Ct. 1526, 32 L.Ed.2d 15 (1972) (applying strict scrutiny when parent’s fundamental right to the care, custody, and control of their children was implicated).

In order to survive strict scrutiny, a law must advance a compelling state interest and must be narrowly tailored to further that interest. See Kahn v. Griffin, 701 N.W.2d 815, 831 (Minn.2005) (citing Bernal v. Fainter, 467 U.S. 216, 219, 104 S.Ct. 2312, 81 L.Ed.2d 175 (1984)). As to the first prong of the strict scrutiny analysis, Johnson asserts that the state “does not have a compelling interest in second guessing the determinations of a fit-parent as to what is in the best interest of her children.” Johnson centers this argument on her fundamental right to the care, custody, and control of her children. That right, however, is not absolute. The Supreme Court has long recognized that states may intrude on parental rights in order to protect the “general interest in the youth’s well being.” Prince v. Massachusetts, 321 U.S. 158, 166, 64 S.Ct. 438, 88 L.Ed. 645 (1944). The Court explained in Prince that

the state as parens patriae may restrict the parent’s control by requiring school attendance, regulating or prohibiting the child’s labor, and in many other ways. * * * [Tjhe state has a wide range of power for limiting parental freedom and authority in things affecting the child’s welfare.

Id. at 166-67, 64 S.Ct. 438 (footnotes omitted). The Court has also explained that “the relationship of love and duty in a recognized family unit is an interest in liberty entitled to constitutional protection.” Lehr v. Robertson, 463 U.S. 248, 258, 103 S.Ct. 2985, 77 L.Ed.2d 614 (1983). It follows then, that a state, in its role as parens patriae, has a compelling interest in promoting relationships among those in recognized family units (for example, the relationship between a child and someone in loco parentis to that child) in order to protect the general welfare of children. See, e.g., London Guar. & Accident Co. v. Smith, 242 Minn. 211, 217, 64 N.W.2d 781, 785 (1954) (extending parental immunity to a stepfather who was in loco parentis and explaining that to do otherwise would be contrary to public policy in that it would “discourage a stepfather from voluntarily assuming the unselfish, in loco parentis position to a child in need of parental care”).

We turn next to whether the requirements of section 257C.08, subdivision 4, are narrowly drawn to further the state’s compelling interest. Initially, we note that section 257C.08, subdivision 4, is, on its face, more narrowly drawn than the Washington statute at issue in Troxel. The Washington statute allowed courts to award visitation to any person at any time so long as it was in the child’s best interests. In contrast, section 257C.08, subdivision 4, limits the class of individuals who may petition for visitation to those persons who have resided with the child for two years or more (excluding foster parents). In addition to that threshold requirement, the statute further narrows the class of those who may be awarded visitation to petitioners who have “established emotional ties creating a parent and child relationship.” Minn.Stat. § 257C.08, subd. 4(2). We read this requirement as mandating that the petitioner stand in loco parentis with the child. As we have previously explained:

The term “in loco parentis,” according to its generally accepted common-law meaning, refers to a person who has put himself in the situation of a lawful parent by assuming the obligations incident to the parental relation without going through the formalities necessary to legal adoption and embodies the two ideas of assuming the parental status and discharging the parental duties.

London Guar. & Accident Co., 242 Minn. at 215, 64 N.W.2d at 784 (internal quotation marks omitted). Therefore, unlike the statute at issue in Troxel, the requirements that the petitioner have resided with the child for two or more years and have a parent-child relationship with the child substantially limits the class of individuals who may successfully petition for visitation. Section 257C.08, subdivision 4, is further narrowly tailored by providing that before a court may order visitation, the court must find that visitation is in the best interests of the child and that visitation will not interfere with the custodial parent’s relationship with the child.

But section 257C.08, subdivision 4, does not specify the level of proof required or who bears the burden of proving the requirements of section 257C.08, subdivision 4. We believe that in order to afford due deference to the fit custodial parent, the burden of proof must be on the party seeking visitation, and the standard of proof must be clear and convincing evidence. We base this conclusion on the following analysis. The Supreme Court has explained that “the minimum standard of proof tolerated by the due process requirement reflects not only the weight of the private and public interests affected, but also a societal judgment about how the risk of error should be distributed between the litigants.” Santosky v. Kramer, 455 U.S. 745, 755, 102 S.Ct. 1388, 71 L.Ed.2d 599 (1982). The balancing test set forth by the Court in Matheivs v. Eldridge guides our determination regarding the minimum standard of proof required in these cases. 424 U.S. 319, 335, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); see Santosky, 455 U.S. at 754, 102 S.Ct. 1388. That balancing test requires us to weigh: (1) “the private interests affected by the proceeding”; (2) “the risk of error created by the State’s chosen procedure”; and (3) “the countervailing governmental interest supporting use of the challenged procedure.” Santosky, 455 U.S. at 754, 102 S.Ct. 1388.

Looking at the first Mathews factor, the Supreme Court has explained that the clear and convincing evidentiary standard is mandated when the individual interests in the proceeding are “ ‘particularly important’ ” and “ ‘more substantial than mere loss of money.’ ” Id. at 756, 102 S.Ct. 1388 (quoting Addington v. Texas, 441 U.S. 418, 424, 99 S.Ct. 1804, 60 L.Ed.2d 323 (1979)). The Court has specifically explained that a parent’s right to the care, custody, and control of his or her child is “an interest far more precious than any property right.” Id. at 758-59, 102 S.Ct. 1388. We have also observed that parents have a fundamental right to the care, custody, and control of their children that should not be interfered with except for “ ‘grave and weighty reasons.’ ” In re Welfare of Children of Coats, 633 N.W.2d 505, 514 (Minn.2001) (quoting In re Welfare of H.G.B., 306 N.W.2d 821, 825 (Minn.1981)).

As for the second factor, the Supreme Court has explained that proceedings that “employ imprecise substantive standards that leave determinations unusually open to subjective values of the judge” magnify the risk for erroneous deprivation of private interests. Santosky, 455 U.S. at 762, 102 S.Ct. 1388. Section 257C.08, subdivision 4, requires the district court to make subjective determinations regarding what is in the best interests of the child, whether the petitioner and child established a parent-child relationship, and whether visitation would interfere with the parental relationship. As explained in Troxel, one of the dangers of utilizing a best-interest analysis is the potential for a court to make the decision based entirely on the court’s subjective estimation without regard to the fit parent’s wishes. Troxel, 530 U.S. at 67, 120 S.Ct. 2054.

Finally, the government interest in this case under the third Mathews factor is the state’s interest as parens patriae in the welfare of the child. As we have already explained, the state’s interest as parens patriae in the welfare of the child and in promoting relationships among recognized family units is compelling.

Balancing the interests involved in a petition for third-party visitation, we conclude that requiring the party seeking visitation to prove the requirements of subdivision 4 by clear and convincing evidence is necessary to protect against the risk of erroneously depriving a parent of his or her interest in the care, custody, and control of his or her children. Therefore, we must strike Minn.Stat. § 257C.08, subd. 7 (2006), as unconstitutional. Subdivision 7 requires the district court to grant third-party visitation unless the court finds by a preponderance of the evidence after a hearing that visitation would interfere with the custodial parent’s relationship with the child. We read the plain language of subdivision 7 as impermissibly placing the burden on the custodial parent to prove that visitation would interfere with the parent-child relationship. The parent’s fundamental right to the care, custody, and control of his or her child carries with it the presumption that the parent is acting in the best interest of the child and requires deference to the parent’s wishes. Troxel, 530 U.S. at 70, 120 S.Ct. 2054. Accordingly, placing the burden on the parent to prove no interference violates that fundamental right. Further, subdivision 7’s preponderance of the evidence standard is not sufficient to protect parents against the risk of an erroneous deprivation of their parental rights.

Because Minn.Stat. § 257C.08, subd. 4, limits the class of individuals who may be granted third-party visitation to those who have a longstanding parent-child relationship with the child and prohibits the district court from granting visitation if the visitation is not in the child’s best interest or interferes with the custodial parent’s relationship, and because we conclude that the petitioner has the burden of proof by clear and convincing evidence, we also conclude that it is narrowly drawn to the state’s compelling interest in protecting the general welfare of children by preserving the relationships of recognized family units. We therefore hold that Minn.Stat. § 257C.08, subd. 4, is not unconstitutional on its face.

Turning then to the district court’s application of section 257C.08, subdivision 4, to the facts in this case, we reject Johnson’s as-applied challenge to the constitutionality of section 257C.08, subdivision 4. In order to make this determination, we look first at whether the court applied the legal framework set forth in section 257C.08, subdivision 4. If so, we then must determine whether the circumstances of this case are such that the Con-stitntion requires a more rigorous legal framework. See Troxel, 530 U.S. at 68, 120 S.Ct. 2054 (noting that the trial court’s order “was not founded on any special factors that might justify the State’s interference” with the parent’s fundamental rights).

Here, the district court applied the legal framework set forth in section 257C.08, subdivision 4, which we have just held to be constitutional on its face. The court awarded visitation after finding that SooHoo resided with the children for more than two years, that SooHoo was in loco parentis with the children, and that SooHoo and the children had developed emotional ties creating a parent-child relationship. The court then determined that visitation with SooHoo was in the children’s best interest after giving special weight to Johnson’s wishes regarding visitation. Finally, the court determined that granting visitation with SooHoo would not interfere with Johnson’s relationship with the children. Although the court stated, presumably based on the language of subdivision 7, that the burden of proof on this element rested with Johnson, the court went on to explain that regardless of who bore the burden of proof, the evidence in the record strongly demonstrated that visitation with SooHoo would not interfere with Johnson’s relationship with her children. Having concluded that SooHoo carried her burden of proving all the elements required under section 257C.08, subdivision 4, the court awarded a visitation schedule that it deemed reasonable in light of the circumstances of the case and the relationship between SooHoo and the children.

Because we conclude that the district court applied the correct legal framework, we next look at whether the facts of this case are such that section 257C.08, subdivision 4, cannot be constitutionally applied to Johnson. Johnson has not identified, and we have not found, any facts in this case that support a holding that section 257C.08, subdivision 4, was unconstitutionally applied to Johnson. Accordingly, we conclude that the court’s application of section 257C.08, subdivision 4, was constitutional and, therefore, we reject Johnson’s argument that section 257C.08, subdivision 4, is unconstitutional as applied to her.

II.

We next address Johnson’s argument that the district court abused its discretion in the amount of visitation it awarded SooHoo. Johnson’s primary argument is that the amount of visitation is unreasonable because it is commensurate with that which a court would award a noncustodial parent. She also argues that the amount of visitation is not reasonable because it interferes with her parental relationship with her children.

The district court enjoys broad discretion in determining visitation. Olson v. Olson, 534 N.W.2d 547, 550 (Minn.1995). When reviewing visitation determinations for an abuse of discretion, we must determine whether the court made findings unsupported by the evidence or improperly applied the law. See id. Accordingly, we will not reverse the court’s findings unless they are clearly erroneous. Pikula v. Pikula, 374 N.W.2d 705, 710 (Minn.1985). A finding is clearly erroneous if we are left with the definite and firm conviction that the court made a mistake. Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn.1999). We review the court’s findings in a light most favorable to those findings. See Rogers v. Moore, 603 N.W.2d 650, 656 (Minn.1999).

Although Johnson forcefully argues that the amount of visitation awarded is unreasonable because it is commensurate with that which would be awarded to a noncustodial parent, Johnson cites no authority, nor have we found any authority, for the proposition that an award of visitation to a third party that is commensurate with what would be awarded to noncustodial parents is inherently unreasonable.

Minnesota Statutes § 257C.08, subd. 4, allows the district court to grant reasonable visitation. Generally, the reasonableness of an award of visitation turns on the specific facts and circumstances of each case. The district court, having heard the witnesses, is in the best position to determine what is reasonable under the circumstances. Given the evidence presented in the record before us, and the court’s broad discretion, we are not in a position to say, based on our standard of review, that the court’s findings are clearly erroneous or that the court abused its discretion. Here, the court carefully reviewed the applicable law and then applied that law to the facts contained in the record. As for Johnson’s argument that the visitation award is unreasonable because it interferes with her parental relationship with the children, it is enough to say, as discussed above, that the visitation awarded does not interfere with Johnson’s parental relationship. Therefore, we affirm the court’s visitation award.

III.

Johnson next asserts that the district court erred in ordering visitation without first holding an evidentiary hearing. Chapter 257C does not require a district court to conduct an evidentiary hearing dealing solely with the issue of visitation in order for the court to grant visitation. Here, the court considered the court services evaluation, testimony from several evidentiary hearings (including testimony from SooHoo, Johnson, and others), and additional evidence such as official school documents and affidavits submitted by the parties. We believe this evidence provided a sufficient basis for the court to make a determination regarding reasonable visitation. Accordingly, we conclude that the court did not err in declining to conduct an evidentiary hearing exclusively dedicated to the issue of visitation.

IV.

Johnson challenges the district court’s order requiring her to “employ a counselor (or continue with existing counseling) to address her tension and anxiety relative to the girls” and the discretion awarded by the court to SooHoo’s therapist to determine “whether either child or both needs to accompany [SooHoo] to therapy.” The court found that “the children’s therapy needs represents an aspect of their health care that is unlikely to be met without court involvement” and we will not disturb the court’s finding. But we conclude that the court abused its discretion in ordering Johnson to counseling in the absence of a factual finding that such counseling is in the best interests of the children as opposed to Johnson. We therefore reverse that portion of the district court’s order.

Affirmed in part, reversed in part.

ANDERSON, G. BARRY, Justice

(concurring).

I concur in the opinion of the court but write separately to note concerns with respect to whether the district court abused its discretion in the amount and character of visitation awarded to respondent.

Appellant correctly notes that third-party visitation rights are governed by Minn. Stat. § 257C.08 subd. 4, and SooHoo is entitled to visitation only to the extent that visitation is in the best interest of the children and does not interfere with the custodial parent’s relationship with her children. In that context, a reflexive award of visitation to a third party that mirrors an award of visitation more typically granted to a non-custodial parent might very well constitute an abuse of discretion. Given the importance of holiday events to parent-child relationships, alternating holiday arrangements are particularly problematic in visitation awards under the third-party visitation statute.

That said, here, I am persuaded by the unique facts before us, and the detailed and thorough findings and conclusions of the district court, that there was no abuse of discretion in the visitation award.

      . To the extent the court of appeals applied intermediate scrutiny in In re Santoro, 578 N.W.2d 369, 376 (Minn.App.1998) (granting visitation rights to grandparents), it is overruled.

      . Subd. 7. Establishment of interference with parent and child relationship. The court may not deny visitation rights under this section based on allegations that the visitation rights would interfere with the relationship between the custodial parent and the child unless after a hearing the court determines by a preponderance of the evidence that interference would occur.
      Minn.Stat. § 257C.08, subd. 7.

      . Our holding is consistent with what other state supreme courts have concluded regarding statutes similar to Minn.Stat. § 257C.08, subd. 4. See, e.g., Rideout v. Riendeau, 761 A.2d 291, 298-99, 302, 303 (Me.2000) (upholding the constitutionality of a grandparent visitation statute with the following requirements: (1) the requirement that the grandparent establish standing to petition for visitation by demonstrating that he or she acted as a quasi-parent to the child; (2) the requirement that the court consider any objection of the parent concerning visitation; and (3) the requirement that the court deny visitation if it finds that visitation would significantly interfere with any parent-child relationship or with the parent’s rightful authority over the child); West Virginia ex rel. Brandon v. Moats, 209 W.Va. 752, 551 S.E.2d 674, 684-85 (2001) (upholding the constitutionality of a grandparent visitation statute that requires the petitioner to establish standing, that visitation be in the best interest of the child, and that visitation not interfere with the parent's relationship with the child).

      . The district court also ordered SooHoo to counseling, but SooHoo has not challenged that aspect of the district court's order.


author: /s/Helen M. Meyer Associate Justice

text:
    In re Petition for DISCIPLINARY ACTION AGAINST John C. HOTTINGER, a Minnesota Attorney, Registration No. 4734X.
    No. A07-264.
    Supreme Court of Minnesota.
    May 14, 2007.
   ORDER

The Director of the Office of Lawyers Professional Responsibility has filed a petition for disciplinary action alleging that respondent John C. Hottinger committed professional misconduct warranting public discipline, namely, misappropriation of $8,820 of a client’s settlement funds from respondent’s trust account for a period of six months, in violation of Rules 1.15(a) and 8.4(c), Minnesota Rules of Professional Conduct.

Respondent admits his conduct violated the Rules of Professional Conduct, waives his rights under Rule 14, Rules on Lawyers Professional Responsibility (RLPR), and has entered into a stipulation with the Director in which they jointly recommend that the appropriate discipline is an indefinite suspension with no right to petition for reinstatement for a minimum of 18 months. Reinstatement is further conditioned upon successful completion of the professional responsibility portion of the bar examination under Rule 18(e)(2), RLPR, and satisfaction of continuing legal education requirements under Rule 18(e)(4), RLPR. The reinstatement hearing required by Rule 18(d), RLPR, is not waived.

The court has independently reviewed the file. Although the misappropriation of client funds is a serious matter typically warranting disbarment, the court notes that the stipulated discipline is in line with the discipline imposed in In re DeVaughn, 722 N.W.2d 927 (Minn.2006) (indefinite suspension with no right to apply for reinstatement for at least 18 months for misappropriation of $7,750 in client funds), and In re Rooney, 709 N.W.2d 263 (Minn.2006) (18-month suspension followed by three years of supervised probation for misappropriation of $27,700 in client funds where attorney had no prior disciplinary history, exhibited genuine remorse, made complete restitution, performed significant pro bono work, and was a long-time public servant). The court further notes that respondent has no prior disciplinary history in over 34 years of practice, has exhibited genuine remorse for his conduct, has made complete restitution of all missing funds, has done significant pro bono work throughout the course of his legal career, and has been a long-time public servant. Although not a mitigating circumstance, the Director notes that respondent has fully cooperated in the Director’s investigation.

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that respondent John C. Hottinger is indefinitely suspended from the practice of law with no right to apply for reinstatement for a minimum of 18 months, effective 14 days from the date of filing of this order. Respondent shall be reinstated only upon satisfaction of the conditions recited above. Respondent shall pay costs and disbursements in the amount of $900 under Rule 24, RLPR, and shall comply with Rule 26, RLPR (requiring notice of suspension to clients, opposing counsel, and tribunals).

BY THE COURT:

/s/Helen M. Meyer Associate Justice