author: HARTEN, Judge

text:
    STATE of Minnesota, Respondent, v. Kenneth Wayne WOELFEL, Appellant.
    No. C1-00-643.
    Court of Appeals of Minnesota.
    Jan. 2, 2001.
    Review Denied March 27, 2001.

      Mike Hatch, Attorney General, Alison Eckstein Colton, Assistant Attorney General, St. Paul, MN; and Michelle A. Dietrich, Redwood County Attorney, Redwood Falls, MN, for respondent.
    Melissa V. Sheridan, Assistant State Public Defender, St. Paul, MN, for appellant.
    Considered and decided by HARTEN, Presiding Judge, KLAPHAKE, Judge, and G. BARRY ANDERSON, Judge.
   OPINION

HARTEN, Judge

A jury convicted appellant Kenneth Wayne Woelfel on one count of bribery by a public officer or public employee in violation of Minn.Stat. § 609.42, subd. 1(2) (1996); three counts of theft in violation of Minn.Stat. § 609.52, subds. 2(1) and 3(2) (1996); and three counts of theft by false representation in violation of Minn.Stat. § 609.52, subd. 2(3) (1996). The district court vacated the jury verdict on the three counts of theft by false representation and sentenced appellant to four concurrent, executed prison terms for the bribery and theft convictions. The sentence is an upward durational and dispositional departure. Appellant challenges the sufficiency of the evidence supporting his bribery conviction, an evidentiary ruling, and the sentence. We affirm in part, affirm as modified in part, and reverse in part.

FACTS

In March of 1997, appellant was fired from his job as a Redwood County child support officer, and on April 30, 1997, his paychecks and benefits were permanently discontinued. In June and July of 1997, appellant requested an affidavit from Richard Rohlik, a non-custodial parent whose case had formerly been assigned to appellant. Rohlik, who had been paying his court-ordered child support of $301 per month to appellant in cash, sought appellant’s help after receiving a notice from Redwood County that the bulk of his child support had not been paid. Appellant asked Rohlik to sign an affidavit falsely stating he had not paid the child support. In exchange for this, appellant promised to get Rohlik a court order forgiving the arrears. Appellant told Rohlik that unless he provided the false affidavit, appellant would deny that the money had been paid, leaving Rohlik open to an enforcement action. Intent on proving that he had paid the child support, Rohlik spoke with Deputy Sheriff Rick Morris, which resulted in Rohlik’s agreement to wear a body wire while meeting with appellant.

During the first meeting, appellant told Rohlik that a computer error resulted in the system not recording Rohlik’s payments and that Rohlik should have been paying $600 a month. Appellant instructed Rohlik to trust him, to plead stupidity, and not to discuss the situation with Ann Bavier, appellant’s successor who was now handling Rohlik’s case. In a second meeting, appellant again told Rohlik that he should have been paying $600 a month and suggested that Rohlik simply admit he owed the extra $300 a month. Appellant assured Rohlik that either he or Sheryl Dudgeon, another child support officer, would clear the debt. In a third meeting, appellant threatened Rohlik by telling him that without appellant, Rohlik would have no way to prove he had paid the child support. He later assured Rohlik, “I am 99.999 percent sure that I’m going to be back there [working in the child support office].”

Appellant also encouraged Rohlik’s younger brother to talk with Rohlik about admitting the arrearage in child support. At Rohlik’s brother’s suggestion that Roh-lik simply try to work things out himself with the county, appellant observed, “The one thing about cash * * * [i]t can’t be tracked.”

From January 1, 1996, through June 30, 1997, appellant took approximately $21,000 in cash, checks, and other forms of child support payments. This amount includes the cash payments appellant received from Rohlik. Respondent State of Minnesota offered the testimony of Abigail Grenfell, a Management Analyst who performed an audit of more than 400 Redwood County case files. She found problems in over 25 percent of the cases. All of the cases with problems had been assigned to appellant. Grenfell also reviewed all of the checks appellant cashed and determined that the checks were not posted or recorded on the child support computer system, and that there were no records of receipt from the State or the custodial parent and no records of credit for the payment. Grenfell also found that appellant modified child support obligations and adjusted arrearag-es on the computer system without the requisite court order. She testified that there is no reason for a child support officer to cash a child support check.

Appellant testified that he often cashed child support checks to distribute the money directly to financially strapped custodial parents and to avoid the long and complicated distribution* process. He claimed to have kept careful records of when and why he cashed the checks, but by the time criminal charges were brought, the records had mysteriously disappeared. Appellant also testified that he occasionally modified child support obligations without asking for a court order for efficiency’s sake.

The jury found appellant guilty on all counts. At sentencing, appellant moved for a new trial or a judgment of acquittal, and respondent moved for an upward du-rational departure pursuant to Minn. R.Crim. P. 27.03, arguing that appellant’s conduct constituted a “major economic offense.” The district court granted appellant’s motion for acquittal of the three theft by false representation counts. In sentencing appellant on the three counts of theft of more than $2,500 and the one count of bribery, the district court departed both dispositionally and durationally, and sentenced appellant to four concurrent, executed prison terms of 24, 30, 30, and 42 months. The presumptive sentences for the three theft convictions and the bribery conviction are stayed prison terms of 12,15,15, and 21 months.

ISSUES

1. Is the evidence sufficient to support appellant’s conviction of bribery by a public officer or public employee under Minn. Stat. § 609.42, subd. 1(2)?

2. Did the district court abuse its discretion in excluding evidence of the outcome of appellant’s termination hearing as a child support officer?

3. Did the district court abuse its discretion in departing dispositionally and dura-tionally in sentencing appellant?

ANALYSIS

1. Sufficiency of the Evidence

In considering a claim of insufficient evidence, this court’s review is limited to a painstaking analysis of the record to determine whether the evidence, when viewed in the light most favorable to the conviction, is sufficient to allow the jurors to reach the verdict that they did. State v. Webb, 440 N.W.2d 426, 430 (Minn.1989). The reviewing court must assume that the jury believed the state’s witnesses and disbelieved any evidence to the contrary. State v. Moore, 438 N.W.2d 101, 108 (Minn.1989). The reviewing court will not disturb the verdict if the jury, acting with due regard for the presumption of innocence and the requirement of proof beyond a reasonable doubt, could reasonably conclude the defendant was guilty of the charged offense. State v. Alton, 432 N.W.2d 754, 756 (Minn.1988).

Appellant contends that his bribery conviction must be reversed because the evidence is insufficient to prove beyond a reasonable doubt that he was a public officer or public employee when he solicited a false affidavit from Rohlik.

For purposes of Minn.Stat. § 609.42, subd. 1(2):

(1) “Public officer” means:
(a) an executive or administrative officer of the state or of a county, municipality or other subdivision or agency of the state;
(b) a member of the legislature or of a governing board of a county, municipality, or other subdivision of the state, or other governmental instrumentality within the state;
(c) a judicial officer;
(d) a hearing officer;
(e) a law enforcement officer; or
(f) any other person exercising the functions of a public officer.
(2) “Public employee” means a person employed by or acting for the state or a county, municipality, or other subdivision or governmental instrumentality of the state for the purpose of exercising their respective powers and performing their respective duties, and who is not a public officer.

Minn.Stat. § 609.415, subd. 1 (1996).

In March of 1997, appellant was fired; on April 30, 1997, his paychecks and benefits were permanently discontinued. He did not solicit the false affidavit from Roh-lik until June 1997. But even after his termination, appellant was still a “resource person” on the Rohlik case who continued to refer to Rohlik as a “client;” appellant specifically instructed child support officer Bavier to change the amount of Rohlik’s child support from $50 to $301 effective June 1, 1997, and appellant had frequent contact with Dudgeon regarding child support matters while she was still employed as a child support officer. Appellant held himself out as a child support officer to Rohlik, told Rohlik it was “99.999 percent certain” that he would be re-employed, and directed Rohlik to continue to make payments to him. Appellant collected Roh-lik’s child support payments in June of 1997 and told Rohlik that he had the authority to affect Rohlik’s child support obligations by obtaining an order from the court forgiving the arrears, providing Roh-lik supplied the false affidavit.

The jury found that appellant was a public officer or public employee at the time he solicited the false affidavit from Rohlik. However, “penal statutes must be construed strictly; any reasonable doubt must be interpreted in favor of the defendant.” State v. Corbin, 343 N.W.2d 874, 875-76 (Minn.App.1984) (citing State v. Olson, 325 N.W.2d 13, 19 (Minn.1982); State v. Haas, 280 Minn. 197, 200, 159 N.W.2d 118, 121 (1968)). Appellant had been terminated from his position as a child support officer and his paychecks and benefits had been permanently discontinued for over a month before he solicited the false affidavit. Appellant was no longer “employed by” the county, and whether he was “acting for” the county or “exercising the functions of a public officer,” is ambiguous and unclear. As a criminal statute, Minn.Stat. § 609.42, subd. 1(2), must be construed in favor of appellant and against the state. See Corbin, 343 N.W.2d at 875-76. Accordingly, we reverse appellant’s bribery conviction because considering the statutory definitions of public officer and public employee, the evidence is ambiguous as to whether appellant was included in either category when he solicited the false affidavit from Rohlik. A conviction that rests upon a material evidentiary ambiguity must be reversed because such evidence cannot provide proof beyond a reasonable doubt of a defendant’s guilt. See State v. Auchampach, 540 N.W.2d 808, 816 (Minn.1995) (citations omitted).

2. Evidentiary Ruling

We largely defer to the district court’s evidentiary rulings, which will not be overturned absent a clear abuse of discretion. State v. Kelly, 435 N.W.2d 807, 813 (Minn.1989). “[E]ven when a defendant alleges that his constitutional rights were violated, evidentiary questions are reviewed for abuse of discretion.” State v. Profit, 591 N.W.2d 451, 463 (Minn.1999) (citing State v. Gustafson, 379 N.W.2d 81, 84 (Minn.1985)), cert. denied, sub. nom. Profit v. Minnesota, 528 U.S. 862, 120 S.Ct. 153, 145 L.Ed.2d 130 (1999).

Appellant contends that the district court violated his constitutional rights to confront and cross-examine witnesses and to present a defense by excluding as irrelevant evidence of the outcome of his employment termination hearings and the administrative findings. “[A] defendant has no constitutional right to present irrelevant evidence.” State v. Jensen, 373 N.W.2d 364, 366 (Minn.App.1985), review denied (Minn. Oct. 11, 1985). Evidence that is not relevant is inadmissible. Minn. R. Evid. 402. A decision to exclude evidence as irrelevant is subject only to an abuse of discretion standard of review. See State v. Horning, 535 N.W.2d 296, 298 (Minn.1995).

Appellant contends that the administrative findings were necessary to attack the credibility of respondent’s witnesses. However, the district court gave appellant wide latitude to question his former coworkers regarding their dislike of him or their knowledge of others’ dislike of him. The jury heard specific testimony that someone surreptitiously made copies of appellant’s time sheets, that animosity toward appellant existed in the office, that it was general knowledge that people disliked appellant, and that another child support officer was disliked because of her association with appellant. Appellant testified as to his handling of office matters and his disputes with co-workers. Accordingly, the record does not support appellant’s claim that the district court’s ruling prevented him from exposing the alleged bias of his former co-workers.

Even if the evidence was erroneously excluded, the exclusion was harmless.

Harmless error impact analysis applies to the erroneous exclusion of defense evidence in violation of the defendant’s right to present evidence. * * * The correct inquiry is * * * whether, assuming that the damaging potential of the [excluded evidence] were fully realized, a reviewing court might nonetheless say that the error was harmless beyond a reasonable doubt. * * * [T]he reviewing court must be satisfied beyond a reasonable doubt that if the evidence had been admitted and the damaging potential of the evidence fully realized, an average jury (i.e., a reasonable jury) would have reached the same verdict.

State v. Post, 512 N.W.2d 99, 102 (Minn.1994) (quotation and citations omitted). Based upon the overwhelming evidence in support of appellant’s theft convictions, we conclude that a reasonable jury would have reached the same verdict even if the excluded evidence had been admitted and its damaging potential fully realized.

3. Sentencing Departures

We review departures from presumptive sentences under an abuse of discretion standard; there must be “substantial and compelling circumstances” in the record to justify a departure. Rairdon v. State, 557 N.W.2d 318, 326 (Minn.1996).

If the record supports findings that substantial and compelling circumstances exist, this court will not modify the departure unless it has a “strong feeling” that the sentence is disproportional to the offense.

State v. Anderson, 356 N.W.2d 453, 454 (Minn.App.1984). Generally, in determining whether to depart in sentencing, a district court must decide “whether the defendant’s conduct was significantly more or less serious than that typically involved in the commission of the crime in question.” State v. Broten, 343 N.W.2d 38, 41 (Minn.1984). Relevant aggravating factors include:

(4) The offense was a major economic offense, identified as an illegal act or series of illegal acts committed by other than physical means and by concealment or guile to obtain money or property, to avoid payment or loss of money or property, or to obtain business or professional advantage. The presence of two or more of the circumstances listed below are aggravating factors with respect to the offense:
(a) the offense involved multiple victims or multiple incidents per victim;
(b) the offense involved an attempted or actual monetary loss substantially greater than the usual offense or substantially greater than the minimum loss specified in the statutes;
(c) the offense involved a high degree of sophistication or planning or occurred over a lengthy period of time;
(d) the defendant used his or her position or status to facilitate the commission of the offense, including positions of trust, confidence, or fiduciary relationships; or
(e) the defendant has been involved in other conduct similar to the current offense as evidenced by the findings of civil or administrative law proceedings or the imposition of professional sanctions.

Minnesota Sentencing Guidelines II. D.2(b)(4). See also State v. O’Hagan, 474 N.W.2d 613, 623-24 (Minn.App.1991) (upward durational and dispositional departure from presumptive guidelines sentence appropriate where conduct constitutes major economic offense and aggravating factors exist), review denied (Minn. Sept. 25, 1991).

The district court specified that the aggravating factors it placed on the record applied to both the durational and the dispositional departures. “The same aggravating factors may be used to justify both durational and dispositional departures.” Id. at 624 (citing State v. Lalli, 338 N.W.2d 419, 421 (Minn.1983)).

The district court found that appellant’s conduct constituted a major economic offense and that at least four of the five aggravating factors existed: (a) the offenses involved multiple victims and involved multiple instances per victim; (b) each of the counts of theft involved double or triple the minimum loss specified for that offense; (c) the offenses involved a high degree of sophistication and planning and occurred over a lengthy period of time; and (d) appellant used his position or status to facilitate the commission of the offense including positions of trust, confidence, or a fiduciary relationship.

The district court also indicated additional factors supporting the dispositional departure:

[A]s far as the dispositional departure, your conduct is more egregious and you are unamenable to treatment. * ⅝ *
[N]ot only you are not showing any remorse for what you are doing but you are continuing to do what you can to prevent a recovery of restitution and one of the main places it goes is to, is low income families with children.

Appellant contends that the district court’s findings that appellant’s conduct was more egregious and that appellant was unamenable to treatment because he did not show any remorse are not supported by the record and cannot justify a dispositional departure. But we conclude that they are supported by the record, and contrary to appellant’s argument, “[a defendant’s] remorse, his cooperation, [and] his attitude while in court” are appropriate factors in determining whether to depart dispositionally. State v. Trog, 323 N.W.2d 28, 31 (Minn.1982).

Because the district court has an opportunity to actually observe the defendant throughout the proceedings, a reviewing court must defer to the district court’s assessment of the sincerity and depth of the remorse and what weight it should receive in the sentencing decision. The presence or absence of remorse can be a very significant factor in determining whether a defendant is particularly amenable to probation.

State v. Sejnoha, 512 N.W.2d 597, 600 (Minn.App.1994) (citations omitted), review denied (Minn. April 21, 1994).

Appellant also contends that the district court erred by using the Hernandez method to generate criminal history scores in addition to doubling the presumptive sentence for each conviction. See State v. Hernandez, 311 N.W.2d 478 (Minn.1981). However,

[T]he use of the Hernandez method of. computing a criminal history score in conjunction with a durational departure does not necessarily constitute an unfair manipulation of the guidelines.

State v. O’Brien, 429 N.W.2d 293, 296 (Minn.App.1988), review denied (Minn. Nov. 16, 1988). The district court did not abuse its discretion in making a disposi-tional and a double upward durational departure in sentencing appellant.

Because we reverse appellant’s bribery conviction, his sentence is modified to three concurrent, executed prison terms of 24, 30, and 30 months for his theft convictions. We therefore affirm appellant’s sentence as modified.

DECISION

We affirm the district court’s evidentia-ry ruling, affirm appellant’s sentence as modified, and reverse appellant’s bribery conviction.

Affirmed in part, affirmed as modified in part, and reversed in part.

      . Under Minn.Stat. § 609.42, subd. 1(2), the crime of bribery by a public officer or employee is defined as:
      Subdivision 1. Acts constituting. Whoever does any of the following is guilty of bribery and may be sentenced to imprisonment for not more than ten years or to payment of a fine of not more than $20,000, or both:
      (2) Being a public officer or employee, requests, receives or agrees to receive, directly or indirectly, any such benefit, reward or consideration upon the understanding that it will have such an influence * ⅞ *.

      . While State v. Moore, 340 N.W.2d 671, 673 (Minn.1983), cautioned against using Hernandez with consecutive sentences, appellant's sentences are to run concurrently.


source: Caselaw Access Project

author: HARTEN, Judge. KLAPHAKE, Judge

license: Public Domain

text:
    Ronald Paul BAUGHMAN, individually and on behalf of all others similarly situated, Appellant, v. MELLON MORTGAGE COMPANY, Respondent. Dennis Driggers, et al., Appellants, v. FBS Mortgage Corporation, Respondent.
    Nos. C1-00-1016, CX-00-1340.
    Court of Appeals of Minnesota.
    Jan. 9, 2001.

      Charles H. Johnson, Neal A. Eisen-braun, Charles H. Johnson & Associates, New Brighton, MN; and John M. Tanca-bel, Tancabel Law Offices, St. Paul, MN, (for appellants).
    Alan H. Maclin, Brent R. Lindahl, Briggs & Morgan, P.A., St. Paul, MN, (for respondent Mellon).
    Patrick J. McLaughlin, Julie A. Casserly, Dorsey & Whitney, L.L.P ., Minneapolis, MN, (for respondent FBS).
    Considered and decided by HARTEN, Presiding Judge, KLAPHAKE, Judge, and ANDERSON, Judge.
   OPINION

HARTEN, Judge.

In this consolidation of two class actions, appellants, mortgagors, challenge the tax service fees imposed by respondents, mortgagees, as violative of MinmStat. § 47.20, subd. 9(g) (1998). Respondents moved for dismissal of appellants’ complaints on the ground that Minn.Stat. § 47.204, subd. 1 (1998) supersedes Minn. Stat. § 47.20, subd. 9(g). Because we see no error of law, we affirm.

FACTS

Appellant Ronald Baughmann and appellant Dennis Driggers, both mortgagors, brought separate actions, on behalf of themselves individually and all others similarly situated, against their mortgagees, respectively, respondent Mellon Mortgage Company and respondent FBS Mortgage Company. Appellants alleged that the tax service fees charged by respondents violated Minn.Stat. § 47.20, subd. 9(g), and its predecessor. In each case, the district court dismissed the complaint on the ground that Minn.Stat. § 47.204, subd. 1, allows the tax service fees respondents charged appellants notwithstanding the disallowance of such tax service fees purportedly imposed by Minn.Stat. § 47.20, subd. 9(g).

Appellants challenge the dismissals; their appeals were consolidated.

ISSUE

Does Minn.Stat. § 47.204, subd. 1 (1998), exempt the fees respondents charged appellants from the limitations purportedly imposed by Minn.Stat. § 47.20, subd. 9(g) (1998)?

ANALYSIS

Statutory construction is a question of law, which this court reviews de novo. Brookfield Trade Ctr., Inc., v. County of Ramsey, 584 N.W.2d 390, 393 (Minn.1998).

Minn.Stat. § 47.20, subd. 9(g) (1998), provides that:

The mortgagee shall not charge a direct fee for the administration of the escrow account, nor shall the mortgagee charge a fee or other consideration for allowing the mortgagor to discontinue the escrow account.

This statute was codified in 1996 to replace Minn.Stat. § 47.20, subd. 9(3), which was codified in 1975. Minn.Stat. § 47.20, subd. 9(3), read, “A mortgagee shall be prohibited from charging a direct fee for the administration of the escrow account.” The 1996 change was limited to replacing “shall be prohibited from charging” with “shall not charge” and adding a second clause, which is not relevant here. Both versions of this statute protect the rights of mortgagors such as appellants and both preclude mortgagees such as respondents from charging a tax service fee. Thus, the 1996 amendment of Minn.Stat. § 47.20, subd. 9(3) made no significant changes pertinent to the narrow issue before us.

In 1980, Congress passed the Depository Institutions Deregulation and Monetary Control Act of 1980, 12 U.S.C. § 1735f-7a (the federal law). The federal law preempted statutes like Minn.Stat. § 47.20, subd. 9(3), by providing that any state statute “expressly limiting the rate or amount of interest, discount points, finance charges, or other charges” made by mortgagees did not apply to certain mortgages such as appellants’. The overall purpose of the federal law was to encourage bank financing.

In 1981, Minnesota exercised its right to “opt out” of the federal law, see Minn.Stat.' § 47.203, but it also exercised its own right to preempt statutes like Minn.Stat. § 47.20, subd. 9(3), by passing Minn.Stat. § 47.204, subd. 1 (1998), which reads:

Notwithstanding any law to the contrary, no limitation on the rate or amount of interest, discount points, finance charges, or other charges shall apply to a * * * mortgage * * * which would have been exempt from the laws of this state pursuant to [the federal law] but for section 47.203 * * *.

Minn.Stat. § 47.20, subd. 9(3), and later Minn.Stat. § 47.20, subd. 9(g), are “limitation[s] on the rate or amount of * * * finance charges” within the meaning of Minn.Stat. § 47.204, subd. 1, because they forbid mortgagees to make those charges. The tax service fees here in question constituted “finance charges” under the federal law and its Minnesota correlative because they were included in the calculation of the annual percentage rate (APR) of the loan. The issue, then, is whether Minn.Stat. § 47.20, subd. 9(3), and later Minn.Stat. § 47.20, subd. 9(g), were in full force to disallow the charging of the tax service fees notwithstanding the federal law exempting such fees from limitation by state law.

Appellants contend that they were in full force and offer three grounds for this contention.

First, appellants rely on the legislative history of the federal law. As a threshold matter, this rebanee is misplaced because the language of the federal law is plain, and, as appellants acknowledge, broad. Recourse to the legislative history is therefore not only unnecessary; it is not even permitted. See State by Beaulieu v. RSJ, Inc., 552 N.W.2d 695, 701 (Minn.1996) (when legislative intent manifested by plain and unambiguous statutory language, statutory construction neither necessary nor permissible).

Appellants’ reliance on the legislative history is also misplaced because they misread that history. They cite language from the Senate Report 96-368, 96 Cong., 2nd Sess., stating that Congress did “not intend to exempt limitation * * * designed to protect borrowers” and argue that because Minn.Stat. § 47.20, subd. 9(g), is a limitation designed to protect borrowers, Congress did not intend to exempt it. But appellants ignore the previous sentence, stating that Congress “intends to exempt only those limitations that are included in the [APR].” Respondents’ tax service fees were included in the APR; exempting them from state regulation was the intent of the federal law.

Second, appellants quote the federal law reference to state laws “expressly limiting the rate or amount of interest, discount points, finance charges, or other charges” and argue that Minn.Stat. § 47.20, subd. 9(g), is not “an ‘express’ limitation on the interest rate.” But the federal law refers to state laws that expressly limit the rate or amount of four entities: interest, discount points, finance charges, and other charges. The federal law is not confined to state laws that limit the interest rate.

Third, appellants contend that the “notwithstanding any law to the contrary” language in MinmStat. § 47.204, passed in 1981, cannot apply to MinmStat. § 47.20, subd. 9(g), passed in 1996. But when MinmStat. § 47.204 was passed, the predecessor of Minn.Stat. § 47.20, subd. 9(g), Minn.Stat. § 47.20, subd. 9(3), had been in effect for six years. And the provision of its successor statute, so far as it pertains to the issue before us, remained essentially the same. See MinmStat. § 47.20, subd. 9(g), replacing the phrase “shall be prohibited from charging” in Minn.Stat. § 47.20, subd. 9(3), with “shall not charge.” The 1996 changes and additions made to Minn. Stat. § 47.20, subd. 9(3), by MinmStat. § 47.20, subd. 9(g), do not reach the superseding effect of Minn.Stat. § 47.204.

This court addressed similar arguments in Fratzke v. Pung, 378 N.W.2d 112 (Minn.App.1985), review denied, (Minn. Jan. 31, 1986). Fratzke was sentenced under Minn.Stat. § 244.05, effective date May 1, 1980, under which he had to serve 17 years before being eligible for supervised release; he wanted to be sentenced under an earlier statute, Minn.Stat. § 243.05, under which he would have had to serve only 14 years before being eligible. He contended that drafters of Minn.Stat. § 244.05 “overlooked the provisions of § 243.05.” Id. at 114. The court concluded that Fratzke’s contention was unsupported. Fratzke also argued that Minn.Stat. § 243.05 applied to his case because it had been amended subsequent to the adoption of Minn.Stat. § 244.05. This argument also was rejected.

The 1981 amendment essentially made minor stylistic changes. The 1983 amendment similarly made stylistic changes * * *. Neither of these amendments shows a legislative intent to implicitly repeal § 244.05.

Id. Similarly, the 1996 amendment of Minn.Stat. § 47.20, subd. 9(3), by Minn. Stat. § 47.20, subd. 9(g), shows no legislative intent to repeal Minn.Stat. § 47.204.

Moreover, we cannot read into Minn.Stat. § 47.20, subd. 9(g), the phrase, “Notwithstanding Minn.Stat. § 47.204 to the contrary” because we may not “supply [to a statute] that which the legislature purposefully omits or inadvertently overlooks.” Green Giant Co. v. Commissioner of Revenue, 534 N.W.2d 710, 712 (Minn.1995). Nor can we hold that the legislature in 1996 enacted a statute prohibiting mortgagees from making certain charges intending that statute to be in conflict with a 1981 statute prohibiting regulation of those charges “[n]otwithstanding any law to the contrary”; such a result would be absurd and we presume that the legislature did not intend an absurd result. See Minn.Stat. § 645.17 (1998).

DECISION

Because Minn.Stat. § 47.204, subd. 1, supersedes MinmStat. § 47.20, subd. 9(g), respondents did not violate Minn.Stat. § 47.20, subd. 9(g), by charging appellants the tax service fees. The district courts correctly dismissed appellants’ complaints.

Affirmed.

KLAPHAKE, Judge

(concurring specially).

Although I agree with the result reached by the majority in this case, I disagree with its holding that Minn.Stat. § 47.204, subd. 1 (1998) supersedes Minn. Stat. § 47.20, subd. 9(g) (1998). I agree that the “tax service fees” charged in this case are “finance charges” and thus exempt from state regulations and allowed by Minn.Stat. § 47.204, subd. 1. I disagree that these types of “finances charges” can also be considered “direct fee[s] for the administration of [an] escrow account,” so as to be prohibited under Minn.Stat. § 47.20, subd. 9(g). Because these two statutes govern different types of charges and do not conflict, Minn.Stat. § 47.204, subd. 1, should not be construed to supersede Minn.Stat. § 47.20, subd. 9(g).

Minn.Stat. § 47.204, subd. 1, temporarily preempts any state law limiting “the rate or amount of interest, discount points, finance charges, or other charges” imposed by lenders on mortgages. These charges are all related to the loan itself and are included in a borrower’s annual percentage rate (APR). See 12 C.F.R. § 226.4(a) (2000) (defining “finance charge” as “cost of consumer credit as a dollar amount”); Currie v. Diamond Mortgage Corp., 859 F.2d 1538, 1542 (7th Cir.1988) (federal law exemption applies to “those [state] limitations which are included in the [APR] ”).

The “tax service fees” at issue here were one-time charges assessed at settlement to offset the cost of services provided to the lender by a private company over the life of the loan. Although the exact nature of the services provided in this case is unclear, the record contains a September 16, 1986 opinion by a Maryland Assistant Attorney General to that state’s bank commissioner, describing the services provided by “tax service fees” to include obtaining tax bills for each loan, correlation of tax bills with individual loan numbers and presentation to the lenders for payment, and verification of tax payments even if a loan is not subject to escrow requirements. The opinion letter further explains that these fees are charged on all first mortgage loans regardless of whether a loan requires an expense escrow account.

Thus, a tax service fee is a one-time fee levied at the beginning of a loan to minimize the administrative costs inherent in the annual coordination of real property tax levies and is assessed equally for escrow and non-escrow loans. Because these fees were included in the APR and were part of the cost of the loan, they are “finance charges” under Minn.Stat. § 47.204, subd. 1. As such, they are exempt from any limitation state law might attempt to impose. Cf. Chaires v. Chevy Chase Bank, 131 Md.App. 64, 748 A.2d 34, 46 (2000) (rejecting claim that settlement related fees, including tax service fee, were illegal under Maryland law and holding that federal law preempted state law in this area). I therefore agree that appellants’ challenge to imposition of these tax service fees must fail under Minn.Stat. § 47.204, subd. 1.

This does not mean, however, that Minn. Stat. § 47.20, subd. 9(g), is superseded, allegedly because it directly conflicts with Minn.Stat. § 47.204, subd. 1. Minn.Stat. § 47.20, subd. 9(g), prohibits lenders from charging “a direct fee for the administration of [an] escrow account.” Escrow accounts are often required by lenders and are used to accumulate funds for the payment of insurance, taxes, assessments, or other ongoing charges or expenses of this type. Unlike finance charges, escrow accounts are separate from -the underlying loan and are not computed into the APR or subject to federal disclosure requirements. See Umdenstock v. American Mortgage & Inv. Co., 495 F.2d 589, 591-92 (10th Cir.1974) (although federal law requires disclosure of finance charges and APR, escrows are specifically exempted from these requirements). Thus, fees imposed for the administration of an escrow account are not considered part of the cost of a loan.

Tax service fees are not ongoing, direct fees used to administer escrow accounts; rather, they are one-time fees in the nature of finance charges and are imposed on a loan even if it is not subject to escrow requirements. Because Minn.Stat. § 47.20, subd. 9(g), does not apply to tax service fees, this statute does not attempt to limit these fees and does not conflict with Minn. Stat. § 47.204, subd. 1.

Minnesota statutes must be interpreted to give effect to all provisions and avoid rendering any one statute meaningless. Minn.Stat. §§ 645.16, 645.17 (1998). My analysis of this case gives effect to both statutes and voids neither.

I therefore concur in the result, but would not render meaningless the Minnesota statutory provision prohibiting charges on the administration of escrow accounts. That statute, in my opinion, remains viable.

      . The district court in Driggers also held that, although Driggers was a member of the class whose claims against FBS were settled by an agreement that resolved an earlier class action suit (Miller individually and o/b/o all others similarly situated v. FBS) and the claims Driggers made were among the claims released by the Miller settlement, the Miller settlement did not bar Driggers’ action because the Notice of Settlement was insufficient. FBS filed a Notice of Review of the district court’s decision that Notice was insufficient. Because our decision renders that issue moot, we do not address it.

      . Appellants also argue that holding that Minn.Stat. § 47.204 preempts the first clause of Minn.Stat. § 47.20, subd. 9(g), would mean holding that it also preempts the second clause of that subdivision as well as Minn. Stat. § 47.207. But neither the second clause of Minn.Stat. § 47.20, subd. 9(g), nor Minn. Stat. § 47.207 meets the federal law criterion because neither is a state law "expressly limiting the rate or amount of interest, discount points, finance charges, or other charges * * * » Therefore, Minn.Stat. § 47.204 has no application to them.


author: TOUSSAINT, Chief Judge.

text:
    In re the Award of Damages to Dennis RAPP for Condemnation of Land on County Road 61.
    No. C4-00-1124.
    Court of Appeals of Minnesota.
    Jan. 16, 2001.

      Christopher Daniel Karpan, Douglas County Courthouse, Alexandria, MN, (for appellant Douglas County).
    Michael J. Dolan, Alexandria, MN, (for respondent).
    Considered and decided by TOUSSAINT, Chief Judge, CRIPPEN, Judge and PETERSON, Judge.
   OPINION

TOUSSAINT, Chief Judge.

Douglas County is appealing from an entry of summary judgment, holding Minn. Stat. §§ 163.11-12 (1998) unconstitutional, and ordering the county to recondemn land owned by respondent Dennis Rapp under Minn.Stat. eh. 117 (1998). Because (1) the United States Constitution guarantees to property owners a right to judicial review of the public purpose of a taking; (2) the Minnesota Constitution guarantees to property owners a right to judicial review of both the public purpose and necessity of a taking prior to the actual taking; and (3) Minn.Stat. § 163.12, subds. 7, 10 (1998) do not provide for such review, we affirm in part and reverse in part.

FACTS

Appellant Douglas County (the county) passed a resolution on'May 25,1999 authorizing condemnation of four parcels of land for reconstruction and improvement of County Road 61. Respondent Dennis Rapp owned two and one-half acres of the land subject to condemnation.

Following the enactment of the resolution, the county proceeded with condemnation of the land under Minn.Stat. §§ 163.11-12 (1998), and awarded Rapp $6,000 in damages. Thereafter, the county constructed the county road over Rapp’s property.

Rapp filed suit in district court challenging the condemnation. The district court ruled that the condemnation' procedures established in sections 163.11 and 163.12 were not preempted by those in Minn.Stat. ch. 117 (1998). However, the district court ruled that sections 163.11 and 163.12 effected an unconstitutional taking. As a result, the district court held that the county’s actions pursuant to these sections were void. The county appeals.

ISSUES

Is the issue in this case moot because the property has been condemned and the highway constructed?

Are Minn.Stat. §§ 163.11-12 (1998) unconstitutional because they prevent judicial review of the public purpose and necessity of a condemnation occurring under Minn.Stat. ch. 163 (1998) prior to the actual taking?

ANALYSIS

“On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact; and (2) whether the lower courts erred in their application of the law.” State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990) (citation omitted). Where, as here, the material facts are not in dispute, we need not defer to the district court’s application of the law to the undisputed facts. Lefto v. Hoggsbreath Enters., Inc. 581 N.W.2d 855, 856 (Minn.1998) (citing Wallin v. Letourneau, 534 N.W.2d 712, 715 (Minn.1995)).

I.

Neither party has briefed the issue of mootness to this court, but this court must address the issue as a prerequisite to exercising jurisdiction. See In re Minnegasco, 565 N.W.2d 706, 710 (Minn.1997) (when an event occurs that makes decision unnecessary, the case should be dismissed as moot); In re Schmidt, 443 N.W.2d 824, 826 (Minn.1989) (same). An issue is not moot if a party could be afforded relief should the issues be resolved in that party’s favor. Schmidt, 443 N.W.2d at 826. Although Rapp’s land has been condemned and a highway constructed across it, Rapp still has relief in the form of the return of his property. See Blue Earth County v. Stauffenberg, 264 N.W.2d 647, 650 (Minn.1978) (if a court fails to find adequate public purpose and necessity to support a condemnation, the governmental body which took the disputed property could be compelled to return it to the previous owner). Therefore, the issue before this court is not moot.

II.

The issue before this court is whether Minn.Stat. §§ 163.11-12 (1998) are unconstitutional because they provide for the condemnation of land without providing for a pre-taking judicial review of the public purpose and necessity of a condemnation occurring under Minn.Stat. ch. 163 (1998). “Minnesota statutes are presumed constitutional, and our power to declare a statute unconstitutional should be exercised with extreme caution and only when absolutely necessary.” In re Haggerty, 448 N.W.2d 363, 364 (Minn.1989) (citation omitted). “In evaluating challenges to the constitutionality of statutes, this court recognizes that the interpretation of statutes is a question of law.” In re Blilie, 494 N.W.2d 877, 881 (Minn.1993) (citation omitted); see also Estate of Jones by Blume v. Kvamme, 529 N.W.2d 335, 337 (Minn.1995). Accordingly, this court “is not bound by the lower court’s conclusions.” Blilie, 494 N.W.2d at 881 (quoting Sherek v. Independent Sch. Dist. No. 699, 449 N.W.2d 434, 436 (Minn.1990)).

An analysis of whether the condemnation proceedings established in chapter 163 are constitutional starts with a review of the mandates imposed by the federal and state constitutions. The Takings Clause of the Fifth Amendment to the United States Constitution provides that “nor shall private property be taken for public use, without just compensation.” The Taking Clause of the Fifth Amendment to the United States Constitution has been applied to the states through the Fourteenth Amendment. Chicago, B. & Q.R. Co. v. City of Chicago, 166 U.S. 226, 236, 17 S.Ct. 581, 584, 41 L.Ed. 979 (1897). Similarly, Minnesota Constitution, art. I § 13, provides that, “[pjrivate property shall not be taken, destroyed or damaged for public use without just compensation.”

While the provisions of the state and federal constitutions are similar, a review of state and federal case law makes it clear that the Minnesota Constitution guarantees significantly broader rights than those secured by the Fifth Amendment to the United States Constitution. The United States Supreme Court, applying the Fifth Amendment to the United States Constitution, has determined that a property owner has a right to judicial review of a condemnation to ensure that the taking is for a public use or purpose. See, e.g., Hawaii Housing Auth. v. Midkiff, 467 U.S. 229, 240, 104 S.Ct. 2321, 2329, 81 L.Ed.2d 186 (1984); Berman v. Parker, 348 U.S. 26, 32-33, 75 S.Ct. 98, 102, 99 L.Ed. 27 (1954). The Supreme Court of Minnesota has similarly held that, under the Minnesota Constitution, a property owner has a right to judicial review of a condemnation to ensure that the taking is for a public use or purpose. See, e. g., City of Duluth v. State, 390 N.W.2d 757, 763 (Minn.1986); City of Shakopee v. Minnesota Valley Electric Coop., 303 N.W.2d 58, 62 (Minn.1981); Lieser v. Town of St. Martin, 255 Minn. 153, 158-59, 96 N.W.2d 1, 5-6 (Minn.1959).

Yet, the Minnesota Supreme Court has found certain rights guaranteed to property owners under the Minnesota Constitution that are not similarly guaranteed under the United States Constitution. Under the Minnesota Constitution, a property owner has a right to judicial review of a condemnation to ensure that the taking is for a public use or purpose, but also to ensure that the taking is necessary. City of Duluth, 390 N.W.2d at 764; City of Shakopee, 303 N.W.2d at 62; Lieser, 255 Minn. at 158-59, 96 N.W.2d at 5-6. This additional requirement is not imposed by the United States Constitution. See Midkiff, 467 U.S. at 242-43, 104 S.Ct. at 2330 (a party whose property is subject to condemnation may litigate the issue of public use or purpose but not public necessity).

Further, not only is there an entitlement to judicial review of both the public purpose and necessity for a taking under the Minnesota Constitution, there is a temporal requirement to such review. Land may be condemned only after a determination of public purpose and necessity. See City of Minneapolis v. Wurtele, 291 N.W.2d 386, 395-96 (Minn.1980) (holding that actual taking may not occur until public purpose has been established); Itasca County v. Carpenter, 602 N.W.2d 887, 889 (Minn.App.1999) (same). Therefore, a property owner is entitled to judicial review of the public purpose and necessity of a taking prior to the actual taking of property.

Bearing this analysis in mind, we now turn to the case before us. The legislature has delegated to counties the power to acquire property needed for the construction of a county highway by condemnation. Minn.Stat. § 163.11, subd. 3. The county may elect to proceed by either the procedure established in Minn.Stat. ch. 117, or the procedure established in sections 163.11 and 163.12. Id. In this case, the county condemned Rapp’s property by following the procedures established in sections 163.11 and 163.12.

To condemn land pursuant to sections 163.11 and 163.12, the county must first pass a resolution describing the highway and the tracts of land through which the highway will pass. Minn.Stat. § 163.11, subd. 2. Then, the county board must schedule a time and place that it will meet to discuss the issue of damages for the condemned property. Minn.Stat. § 163.12, subd. 2. At that hearing, the county board must hear from all interested parties regarding the issue of damages. Id., subd. 3. The county may then enter into a written agreement with the party whose land has been condemned regarding the amount of damages to be paid. Id., subd. 4. After an award of damages has been made, section 163.12 provides, in pertinent part, that:

Subd. 7. Appeal from award. [W]ith-in 40 days after the filing of the award of damages, any owner or occupant may appeal from the award by filing a notice of the appeal with the court administrator of the district court of the county where the lands lie. The notice of appeal shall be accompanied by a bond of not less than $250, with sufficient surety approved by the judge or by the county auditor, conditioned to pay all costs arising from the appeal in case the award is sustained. A copy of the notice together with a copy of the bond shall be served upon the county auditor. The notice of appeal shall specify the award or failure to award appealed from, the land to which it relates, the nature and amount of the claim of appellant, and the grounds of the appeal.
Subd. 10. Appeal not to delay prosecution of improvement. After the award of damages has been filed, the board may proceed to open, construct, alter, or change the highway. An appeal from the award of damages shall not delay the prosecution of the proposed improvement, and the county board may proceed as if no appeal had been taken.

Minn.Stat. § 163.12, subds. 7,10 (emphasis added).

Rapp argues that section 163.12 is unconstitutional because there is no opportunity for judicial review of the public purpose and necessity of a condemnation prior to the actual taking of property. A statute is entitled to a fair and reasonable construction, and one that will voice and give effect to the intention of the legislature. Lyons v. Health & Human Servs. Dept. 413 N.W.2d 264, 265 (Minn.App.1987). Provided that the intention of the legislature can be ascertained from the whole act, legislative enactments are not to be defeated on account of inaccuracies of language. Minn.Stat. § 645.16 (1998); Kersten v. Minnesota Mut. Life Ins. Co., 608 N.W.2d 869, 875 (Minn.2000). However, we “cannot supply language that the legislature may have omitted or overlooked.” State v. Hulst, 510 N.W.2d 262, 264 (Minn.App.1994).

Nowhere within chapter 163 do we find the right to challenge before a court the public purpose and necessity of a taking prior to the taking of land. To the contrary, section 163.12, subdivision 7 limits judicial review of a condemnation occurring under sections 163.11 and 163.12 to the issue of damages. The statute explicitly states:

[Wjithin 40 days after the filing of the award of damages, any owner or occupant may appeal from the award by filing a notice of appeal with the court administrator of the district court of where the county where the lands lie.

Minn.Stat. § 163.12, subd. 7 (emphasis added). Thus, a court is limited to reviewing only" the damage award and cannot review either the public purpose or the public necessity of the taking. Moreover, “an appeal from the award of damages shall not delay” the county from taking the selected land while the appeal is pending. Id., subd. 10. Thus, not only is the court precluded from reviewing the public purpose and necessity of a condemnation, the plain language of section 163.12, subdivision 10, also precludes judicial review of the public purpose and necessity of a condemnation before the actual taking occurs.

This reading of section 163.12, subdivisions 7 and 10 is consistent with the statutory language of, and the case law developed under, the general condemnation provisions of Minn.Stat. ch. 117 (1998). Chapter 117 limits a landowner’s right of appeal to an appeal from an award of damages. Minn.Stat. §§ 117.042, 117.145, 117.155. However, case law has found that the reference to public purpose and necessity in section 117.075 provides the requisite right to judicial review of the public purpose and necessity of a condemnation occurring under chapter 117. City of Shakopee, 303 N.W.2d at 62. There is no similar language existing in chapter 163 that refers to public purpose or necessity of a condemnation occurring under chapter 163. Absent such language, and in light of the limited review provided for in section 163.12, subdivision 7, we cannot find statutory authority for, or construe the statute to allow, a court to review the public purpose and necessity of a condemnation occurring under chapter 163.

The county argues that even if section 163.12, subdivisions 7 and 10 do not provide for judicial review of public purpose and necessity of a condemnation, such review may be independently obtained by filing a declaratory judgment action. See Minn.Stat. §§ 555.01-16 (1998). This court will generally not consider matters not argued and considered in the court below. Thiele v. Stick, 425 N.W.2d 580, 582 (Minn.1988). Because appellant did not raise this issue below, we will not consider it.

DECISION

Because Minn.Stat. § 163.12, subds. 7, 10 (1998) do not provide for judicial review of the public purpose and necessity of a taking occurring under Minn.Stat. ch. 163 (1998) prior to the actual taking of property, those subdivisions violate the Fifth Amendment to the United States Constitution and Article I, section 13 of the Minnesota Constitution. Accordingly, the condemnation of Rapp’s land occurring under chapter 163 is void.

Affirmed in part and reversed in part.


author: SCHUMACHER, Judge

text:
    Richard A. MYERS, et al., Respondents, v. HEARTH TECHNOLOGIES, INC., f/k/a Heatilator, Inc., Defendant and Third-Party Plaintiff, Appellant, v. Energy Plus, Inc., Respondent.
    No. C7-00-596.
    Court of Appeals of Minnesota.
    Jan. 22, 2001.

      Michael S. Kreidler, Stich, Angelí, Krei-dler, Brownson & Ballou, P.A., Minneapolis, MN, for respondents Richard and Sandy Myers.
    David M. Johnson, Thibodeau, Johnson, Feriancek & Costley, PLLP, Duluth, MN, for appellant.
    John D. Kelly, Robin C. Merritt, Hanft Fride, P.A., Duluth, MN, for respondent Energy Plus.
    Considered and decided by SCHUMACHER, Presiding Judge, TOUSSAINT, Chief Judge, and AMUNDSON, Judge.
   OPINION

SCHUMACHER, Judge

Respondents Richard A. and Sandy Myers (the Myers) sued appellant Hearth Technologies, Inc., i/k/a Heatilator, Inc., and respondent Energy Plus, Inc. for negligence and products liability. After a jury trial, the trial court denied directed verdict motions, and the jury found Hearth liable. Hearth moved for a new trial on several grounds, a new trial on damages, or for a remittitur. The trial court denied the motion. We affirm.

FACTS

In 1994 the Myers purchased a gas fireplace insert called a DVi-10 manufactured by Hearth from Energy Plus, which also installed it. Part of the DVi-10 was a two-part venting system installed in the chimney: one vent drew air from the outside for combustion; the other was an exhaust vent. The unit was designed to draw all air needed for operation from outside the home; as a result, the doors to the unit were designed to be airtight.

When Hearth designed the DVi-10, it realized that the pilot light might sometimes extinguish during normal use, so it was important to design the unit to prevent the accumulation of an explosive amount of gas in such situations. As a result, it installed a thermopile in the unit to sense when the pilot light had gone out and shut off the flow of gas to the unit. The thermopile in the DVi-10 was designed to halt the flow of gas to the unit within three minutes of the pilot light going out. The instructions for the DVi-10, however, do not specifically address the situation where the pilot light goes out during normal use. The instructions do address the situation in which the pilot light goes out when the user is starting the unit for the first time or at the start of a new season. In such a situation, the instructions tell the user to turn the valve to OFF and wait five minutes before relighting the pilot light.

Shortly after bringing the DVi-10 to market, Hearth learned of numerous complaints that the pilot light on the unit would extinguish during normal use because the unit was not getting enough air to operate. To attempt to correct this problem, in early 1995 Hearth sent its distributors Technical Bulletin No. 3, which described a new method of installing the venting that was designed to prevent the problem. Hearth did not contact purchasers of the unit, and the Myers’s unit was not retrofitted to incorporate this new venting method.

In fall 1995, Hearth began selling the DVi-40 fireplace insert. This unit incorporated a thermopile that would halt the flow of gas to the unit within 30 seconds of the pilot light going out. Even though the unit was designed to allow less gas to build up in the event the pilot light went out, Hearth also changed the instruction manual. The instructions for the DVi-40, unlike those for the DVi-10, specifically address the situation where the pilot light goes out during normal use. The DVi-40 instructions tell the user in such a situation to wait ten minutes before attempting to relight the pilot light and to remove the airtight glass door before doing so, an instruction not given in the DVi-10’s manual.

On October 20,1997, Richard Myers was watching a hockey game on television when the pilot light in his DVi-10 fireplace insert went out. He turned off the gas valve to the pilot light, then waited for about five minutes, watching the game as he waited. When he then attempted to relight the pilot light, the unit exploded. Richard Myers was seriously injured by the explosion, which left him legally blind in his right eye. The Myers sued Hearth and Energy Plus, obtaining a $1.2 million jury verdict against Hearth. Hearth appeals the denial of its posttrial motions.

ISSUES

1. Did the trial court abuse its discretion by admitting evidence of the changed instructions?

2. Did the trial court err by denying Hearth’s motion for directed verdict against Energy Plus?

3. Did the trial court abuse its discretion by denying Hearth’s motion for a new trial on damages or for remittitur?

4. Did the trial court err by awarding preverdict interest on the past general damages award?

ANALYSIS

The decision to grant a new trial lies within the sound discretion of the trial court and will not be disturbed absent a clear abuse of that discretion. Holla Nursery, Inc. v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn.1990). We will reverse a jury’s verdict only if it is “manifestly and palpably contrary to the evidence viewed as a whole and in the light most favorable to the verdict.” Roemer v. Martin, 440 N.W.2d 122, 124 (Minn.1989) (quotation omitted).

1. Hearth first challenges the district court’s decision to allow the Myers to introduce evidence concerning Hearth’s changed instructions for the DVi 40. Hearth argues that the evidence of the changed instructions is inadmissible for three reasons: (1) it is irrelevant; (2) it violates Minnesota Rule of Evidence 403; and (3) it is barred by Minn. R. Evid. 407 as evidence of a subsequent remedial measure.

Evidence is relevant if it has “any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Minn. R. Evid. 401. One of the Myers’s causes of action is breach of post-sale duty to warn. It is undisputed that well before the Myers’s explosion, Hearth knew of a design defect on the DVi-10 that sometimes resulted in oxygen starvation in the unit and the pilot light extinguishing. Hearth sent a technical bulletin to its distributors concerning the problem, but did not contact purchasers of the unit. Hearth’s expert witness opined that the Myers’s pilot light extinguished on the night of the explosion because of an air starvation problem.

In Hodder v. Goodyear Tire & Rubber Co., 426 N.W.2d 826 (Minn.1988), the Minnesota Supreme Court found that one of the factors relevant to a post-sale failure-to-warn claim is whether the seller either knows or reasonably should know that the product poses a substantial risk of harm. Id. at 833; see also 4A Minnesota Practice CIVJIG 75.40 use note (1999). A jury could well infer from the changed instructions that Hearth knew that the venting problem on the DVi-10, which caused pilot lights to extinguish during normal use, posed a substantial risk of harm to users, and it therefore made the changes in its instructions to reduce that risk. The fact that Hearth changed the instructions would allow a reasonable jury to find a fact of consequence to the determination of the Myers’s post-sale failure-to-warn claim. Therefore, the evidence about the changes is relevant. Because we assume the jury disbelieved any testimony in conflict with the result it reached, we reject Hearth’s argument that its testimony demonstrated the irrelevance of the changes. State v. Merrill, 274 N.W.2d 99, 111 (Minn.1978).

Hearth also argues that the trial court erred in not excluding evidence of the changes under Minnesota Rule of Evidence 403. It argues that admitting evidence of the changes

allowed Myers’ lawyer to argue squarely that the changes were substantive evidence of the inadequacy of the earlier manual, even though the law requires that the product be judged at the time of the manufacture.

But events that occur after manufacture— such as Hearth’s changing the instructions — can be relevant to a determination whether the product (here, the initial instructions) was adequate as of the time of the manufacture. We will reverse a trial court’s determination under rule 403 only when the trial court has “clearly abused” its discretion. Wagner v. Thomas J. Obert Enter., 396 N.W.2d 223, 229 (Minn.1986). Because the evidence is clearly probative and Hearth has failed to show that it presented any significant danger of unfair prejudice, the trial court did not abuse its discretion by admitting the evidence.

As part of its rule 403 argument, Hearth also argues that the trial court erroneously applied a “presumption of admissibility,” thus justifying reversal. But the trial court statement to which Hearth objects is a mere reflection that in close cases the court may properly exercise its discretion in favor of allowing relevant evidence. Such an approach comports with rule 403, which provides that relevant evidence may only be excluded “if its probative value is substantially outweighed by the danger of unfair prejudice.” Minn. R. Evid. 403 (emphasis added). Hearth’s argument that the trial court applied a “presumption of admissibility” is unfounded.

Hearth next argues that evidence of the changes was inadmissible under Minnesota Rule of Evidence 407, which bars evidence of subsequent remedial measures under certain circumstances. But the changes were made well before the explosion that injured Richard Myers. (Hearth’s own representative provided testimony from which the jury could have concluded it was true.) As a result, the changes were not subsequent remedial measures within the meaning of the rule. See Beniek v. Textron, Inc., 479 N.W.2d 719, 723 (Minn.App.1992) (“The accident was the event contemplated by the rule.”), review denied (Minn. Feb. 19, 27, 1992). Nonetheless, Health argues that the public policy underlying the rule supports its application in this situation, citing the following statement by the Minnesota Supreme Court:

Better protection is afforded the public by encouraging manufacturers to pursue actions to correct perceived design flaws without fear that the corrections will be used by plaintiffs to raise the inference that the manufacturer has admitted the product’s defect by altering the product.

Kallio v. Ford Motor Co., 407 N.W.2d 92, 98 (Minn.1987).

Hearth’s reliance on Kallio is misplaced, however, because Beniek specifically decides the issue, while Kallio does not. Furthermore, the Beniek court was familiar with Kallio, which is cited in the paragraph of the Beniek opinion immediately preceding the one containing the holding on rule 407. Beniek, 479 N.W.2d at 723. The trial court did not err by refusing to exclude the evidence of the changes under rule 407.

2. Hearth contends that the district court erred by denying its motion for a directed verdict against Energy Plus. Hearth claims that Energy Plus was negligent because one of its employees installed the fireplace insert in such a way that instruction plates that were supposed to hang from a chain inside the fireplace insert were instead pinned to the back of the unit by a screw, so that they could not be read.

In an appeal from a denial of a motion for a directed verdict, this court is to review “whether the evidence and its inferences could have reasonably sustained a contrary verdict.” Woodrow v. Tobler, 269 N.W.2d 910, 917 (Minn.1978). The basic elements of a negligence claim are (1) a duty; (2) a breach of that duty; (3) proximate cause; and (4) an injury. Johnson v. State, 553 N.W.2d 40, 49 (Minn.1996). In this case, there was testimony that Richard Myers read and understood the instruction manual that came with the DVi 10 and evidence that the instructions on. the instruction plates were substantially the same as those found in the manual. Under these circumstances, a reasonable factfinder could conclude that the failure to install the unit in such a way that the instruction plates would be visible was not the proximate cause of the explosion, and that Energy Plus was therefore not liable for negligence. The trial court did not err in denying Hearth’s motion for a directed verdict against Energy Plus.

3. Hearth next challenges the trial court’s denial of its motions for a new trial on damages or for remittitur. A trial court may grant a new trial because of excessive damages that appear to have been given under the influence of passion or prejudice or are not justified by the evidence. Minn. R. Civ. P. 59.01(e), (g). A trial court possesses “the broadest possible discretion in determining whether a new trial should be granted for excessive damages.” Bisbee v. Ruppert, 306 Minn. 39, 48-49, 235 N.W.2d 364, 371 (1975). Likewise, a trial court exercises discretion in granting or denying remittitur, and appellate courts will not reverse unless there was “a clear abuse of discretion.” Kwapien v. Starr, 400 N.W.2d 179, 184 (Minn.App.1987).

Hearth argues that our standard of review is “conditioned” on the trial court providing an explanation of its reasons for denying Heath’s motion for a new trial on damages or remittitur, and the trial court’s failure to do so requires that we, “at minimum, remand the matter for an analysis of those issues.” To support this conclusion, Hearth relies on Kamrath v. Suburban Nat’l Bank, 363 N.W.2d 108 (Minn.App.1985), which states that the “trial court’s judgment regarding remittitur is entitled to great deference when the court carefully examines the verdict and explains its decision.” Id. at 112. The Kamrath court supports that statement by citing Sorenson v. Kruse, 293 N.W.2d 56 (Minn.1980). At first glance, Sorenson appears to support the Kamrath decision and Hearth’s position, cautioning that trial courts should explain their decisions on remittitur or risk reversal. Id. at 62-63. Nonetheless, the supreme court in Sorenson went on to affirm the trial court’s denial of the motion for remittitur even though the trial court performed no such specific analysis. Id. at 63; see also Minn. R. Civ. P. 52.01 (“Findings of fact and conclusions of law are unnecessary on decisions on motions pursuant to Rule 12 or 56 or any other motion except as provided in Rule 41.02 [involuntary dismissal].”) Based on Sorenson and rule 52.01, therefore, the trial court’s failure to explain its reasons for its decision on the motion for new trial on damages or for remittitur does not require us to alter our standard of review or remand.

The jury awarded the Myers $28,000 for future medical expenses. Hearth contends that the amount is excessive, pointing out, among other things, that the Myers’s counsel only asked for $13,000 in closing arguments. To justify an award of future medical expenses, the plaintiff must show that future medical treatments will be required and must establish the amount of the damages through expert testimony. Krutsch v. Walter H. Collin GmBh Verfahrenstechnik Und Maschinenfabric, 495 N.W.2d 208, 213 (Minn.App. 1993), review denied (Minn. Mar. 22, 1993). The jury heard through expert testimony that Richard Myers’s injuries put him at risk for several other conditions that would require treatment, including glaucoma, retinal detachment, or phthisis. The Myers’s medical expert testified that corneal transplant and lens implant surgery would cost a “minimum” of $10,000 and that he would miss at least several weeks of work. Because the evidence supports an award of future medical expenses, and the jury was the final arbiter of the amount, the trial court did not abuse its discretion by refusing to grant Hearth a remittitur on this element of damages, regardless of the amount of damages requested by the Myers’s attorney in final argument.

The jury also awarded the Myers more than $1 million in general damages: $500,000 for “[e]mbarrassment, emotional distress, pain, disability, and disfigurement” through the date of trial, and $540,000 for future damages for those reasons.

Richard Myers was seriously injured by the explosion. As a result, he is legally blind in his right eye, and even surgery cannot improve his sight in that eye. His left eye was also damaged, though not as severely. Glass from the explosion cut him on his face, ear, neck, chest, and arm. He has “slight scarring” on his neck and chest. His ability to do his job has been impaired because of his reduced vision and depth perception. His ability to do everyday things such as driving or household chores has also been impaired or destroyed. Bright light bothers him, and he wears sunglasses whenever he goes outside. He worries about injuring his remaining good eye and becoming blind.

When considering whether a verdict is excessive, “a comparison with previous verdicts is not justified because of the variations in facts and fluctuations in the economy.” Stenzel v. Bach, 295 Minn. 257, 261, 203 N.W.2d 819, 822 (1973) (citation omitted). While a damages amount may be large compared to the severity of a plaintiffs injuries, “the assessment of damages is the peculiar province of the jury.” Schindele v. Ulrich, 268 N.W.2d 547, 552 (Minn.1978). The test for setting aside a verdict as excessive by the trial court is whether it shocks the conscience. DeWitt v. Schuhbauer, 287 Minn. 279, 286, 177 N.W.2d 790, 795 (1970). Although the verdict may be generous, the trial court did not abuse its discretion in refusing to grant the motion for new trial or for remit-titur.

4. Hearth argues that the court erred in awarding the Myers preverdict interest on the award for past general damages, contending that an award of pre-verdict interest is not proper where the amount of damages was not readily ascertainable before trial or required substantial jury discretion. The Myers claim that the plain language of Minn.Stat. § 549.09 (1998), as well as caselaw interpreting that statute, entitles him to preverdict interest on the past general damages award.

This court has squarely held that it is proper to award preverdict interest on such damages. Skifstrom v. City of Coon Rapids, 524 N.W.2d 294, 295-97 (Minn.App.1994) (award of preverdict damages for past pain, disability, and emotional distress proper), review granted (Minn. Feb. 3, 1995), review dismissed (Minn. Oct. 25, 1995). The Skifstrom court specifically rejected the argument that awards of pre-verdict interest are dependent on the as-certainability of damages. The court relied on a 1988 decision by the Minnesota Supreme Court holding that a 1984 amendment to section 549.09 eliminated the ascertainability requirement that had applied at common law:

[S]ection 549.09 was amended to allow pre-verdict interest irrespective of a defendant’s ability to ascertain the amount of damages for which he might be held liable. .

Skifstrom, 524 N.W.2d at 296 (quoting Lienhard v. State, 431 N.W.2d 861, 865 (Minn.1988)). In Lienhard, the supreme court also cited legislative history supporting its interpretation that the 1984 amendment changed the ascertainability rule, observing that the statute “appears to represent a retreat from the defendant’s point of view in favor of the plaintiffs perspective with respect to compensation.” Lienhard, 431 N.W.2d at 865.

The court’s discussion of section 549.09 and the ascertainability rule was necessary to its ultimate holding; because preverdict interest can be awarded even when the amount of such interest cannot be ascertained until fixed by verdict, the supreme court held that preverdict interest is not “conventional interest,” but instead an additional element of compensatory damages subject to a statutory cap on damages awarded against the state. Id. at 865-66. Lienhard thus considered and decided the question of the continued applicability of the ascertainability rule in a context where the issue was necessary to the holding in the case. Because the supreme court has held that preverdict interest is available “irrespective of a defendant’s ability to ascertain the amount of damages,” id. at 865, we conclude that post -Lienhard cases that apply the ascertainability rule, including those cited by Hearth, are incorrect. See, e.g., Pine Valley Meats, Inc. v. Canal Capital Corp., 566 N.W.2d 357, 364 (Minn.App.1997), review denied (Minn. Sept. 18, 1997). The trial court did not err by awarding the Myers preverdict interest.

DECISION

We affirm on all grounds the trial court’s decision to deny Hearth’s motion for a new trial or remittur.

Affirmed.


author: HARVEY A. HOLTAN, Judge

text:
    Harlan BAUMANN, et al., Appellants, v. CHASKA BUILDING CENTER, INC., Respondent, C.H. Robinson Company, et al., Defendants.
    No. CX-00-1208.
    Court of Appeals of Minnesota.
    Jan. 28, 2001.

      Eric Robert Heiberg, Coleman, Hull & Van Vliet, PLLP, Minneapolis, MN, for appellants.
    Michael Joseph Orme, Orme & Associates, Eagan, MN, for respondent.
    Considered and decided by WILLIS, Presiding Judge, SHUMAKER, Judge, and HOLTAN, Judge.
   OPINION

HARVEY A. HOLTAN, Judge

Appellants Harlan and Cheryl Baumann appeal the district court’s summary judgment in favor of respondent Chaska Building Center. The district court concluded that because the market value of appellants’ home exceeded $200,000, the homestead exemption protected only $200,000 of its market value. Appellants claim the homestead exemption applies to their equity in the property, not its market value. By notice of review, respondent challenges the portion of the summary judgment ruling that because appellants’ property is located outside a laid-out or platted portion of a city, the property qualifies for a homestead exemption under Minn.Stat. § 510.02 (1998). We reverse and remand.

FACTS

Appellants Harlan and Cheryl Baumann owned 3.9 acres of real property and occupied it as their homestead. The property is not located within the laid-out or platted portion of any city and is not within the city limits of any city. The county’s 1999 real-estate valuation notice classified the property as “residential homestead.”

In June 1998, respondent Chaska Building Center, Inc. sued appellant Harlan Baumann based on a personal guaranty he executed on behalf of Ahlquist Corporation, d/b/a Gunnard Company (Gunnard). The guaranty was for debts Gunnard owed to respondent. In July 1998, respondent obtained a default judgment against Gun-nard and appellant Harlan for $13,647.60. The judgment was later modified and increased to $15,049.13. After entry of the judgment, Gunnard became insolvent.

In 1999, appellants sold their property to David and Connie Rikke for $370,000 and used all of the sale proceeds to pay off three mortgages on the property. The mortgages totaled more than the property’s sale price. Wanting to remove the cloud on the title caused by the 1998 default judgment, appellants sought a declaratory judgment that the default judgment was unenforceable against their homestead. On summary judgment, the district court ruled that the geographic limitation contained in the homestead-exemption statute, Minn.Stat. § 510.02 (1998), did not apply to appellants’ property because the property was outside a laid-out or platted portion of a city. The district court also ruled that because the property’s market value exceeded $200,000, the homestead exemption applied to only the first $200,000 of that market value.

ISSUES

I. Does the homestead-exemption statute, Minn.Stat. § 510.02 (1998), apply to the market value of the property or the value of the debtor’s equity in the property?

II. Did the district court err in concluding that because appellants’ property is located outside a laid-out or platted portion of a city, the amount of property exempted may exceed that allowed if the property was in the laid-out or platted portion of a city?

ANALYSIS

On appeal from a summary judgment where the parties agree that the material facts are not in dispute, the only questions before this court are questions of law. Reads Landing Campers Ass’n, Inc. v. Township of Pepin, 546 N.W.2d 10, 13 (Minn.1996). The interpretation of statutes is a question of law which we review de novo. Boutin v. LaFleur, 591 N.W.2d 711, 714 (Minn.1999) (citation omitted).

I.

Appellants challenge the district court’s ruling that the homestead-exemption statute, Minn.Stat. § 510.02 (1998), protects $200,000 of the market “value” of their property. They allege that the word •“value” as used in the statute is ambiguous and applies to the debtor’s equity in the homestead rather than the market value of the property. A statute is ambiguous if “it is reasonably susceptible to, more than one interpretation.” Astleford Equip. Co., Inc. v. Navistar Int'l Transp. Corp., 611 N.W.2d 33, 37 (Minn.App.2000) (citation omitted). If a statute is ambiguous, courts, in construing a statute, may examine related statutes and use the statute’s legislative history to determine how the ambiguous language should be read. See Amaral v. Saint Cloud Hosp., 598 N.W.2d 379, 385-86 (Minn.1999) (illustrating proper analysis of a statute). Here, section 510.02 states:

The homestead may include any quantity of land not exceeding 160 acres, and not included in the laid out or platted portion of any city. If the homestead is within the laid out or platted portion of a city, its area must not exceed one-half of an acre. The value of the homestead exemption, whether the exemption is claimed jointly or individually, may not exceed $200,000 or, if the homestead is used primarily for agricultural purposes, $500,000, exclusive of the limitations set forth in section 510.05.

Id. (emphasis added). Section 510.02 refers to “[t]he value of the homestead exemption.” The phrase “homestead exemption” is not otherwise defined and its “value” could be read to refer to the market value of the property used as a homestead or to only the debtor’s equity therein. Because the word “value” has an ascertainable but neutral meaning, it does not suggest a preference for one reading of “value of the homestead exemption” over the other. Therefore, we conclude that section 510.02 is ambiguous under Astleford. The district court construed the statute to refer to the property’s market value.

A. Related Statutes

“Statutory construction is a question of law subject to de novo review.” See Astleford, 611 N.W.2d at 37 (citing Wynkoop v. Carpenter, 574 N.W.2d 422, 425 (Minn.1998)). A statute should be interpreted, whenever possible, to give effect to all of its provisions, and “no word, phrase, or sentence should be deemed superfluous, void, or insignificant.” Amaral, 598 N.W.2d at 384 (citing Owens v. Federated Mut. Implement & Hardware Ins. Co., 328 N.W.2d 162, 164 (Minn.1983)). “Various provisions of the same statute must be interpreted in light of each other.” Baker v. Ploetz, 616 N.W.2d 263, 269 (Minn.2000) (citation omitted). Courts should also construe a statute to avoid absurd and unjust consequences. Id. (citation omitted).

Respondent claims that Minn.Stat. § 550.175 (1998), the execution statute, supports the determination that “value,” as used in section 510.02, refers to “fair market value” because the execution statute repeatedly refers to “the value of the property” or “the value of the homestead,” but does not refer to the owner’s equity in the property or homestead. See Minn.Stat. § 550.175, subd. 3 (“The debtor must designate the legal description of the homestead property to be sold separately and the debtor’s estimate of the value of the property ”) (emphasis added); id., subd. 4(b) (“If the executing creditor is dissatisfied with the homestead property designation or the debtor’s valuation of the property * ⅜ * the executing creditor is entitled to a court approved designation of the homestead and a court determination of value") (emphasis added); id., subd. 4(d) (“If the court determines that the property claimed as a homestead exceeds in value the amount of the homestead exemption * * * the court shall order the sale of the entire property, including the designated homestead”) (emphasis added). But, while section 550.175, subdivision 3, outlines a procedure for estimating “the value of the property” and subdivision 4(b) allows a creditor to challenge that valuation, neither provision equates the “value” of the property with the “value” of the exemption. Both provisions contemplate that valuing the property is but one step in the process of determining whether the limits on the homestead exemption have been exceeded, i.e., whether the total value of the property, minus any pre-existing 'encumbrance, exceeds $200,000.

Specifically, sales of a homestead under execution are accomplished by bid and the bids will reflect any prior encumbrance or encumbrances on the property. Therefore, the sale price of a homestead under execution will reflect the property’s equity. No bid on a homestead under execution can be accepted unless the bid “exceeds the amount of the homestead exemption.” Minn.Stat. § 550.175, subd. 4(e). Thus, “[i]f no bid exceeds the exemption, the homestead is exempt.” Id. Alternatively stated: if there is less equity in a homestead than is protected by the homestead-exemption statute, all of that equity is exempt. Similarly, from the proceeds of a sale of a homestead sold under execution, “the court shall pay the debtor the amount of the homestead exemption” and apply the remainder on the execution. Minn. Stat. § 550.175, subd. 4(d). Thus, if there is more equity in a homestead than is protected by the homestead-exemption statute, the full amount protected by the statute is paid to the debtor and only the remainder is used to satisfy the execution. For this reason, we conclude that statutes related to the homestead-exemption statute support the conclusion that the homestead is exempt from execution unless the debtor’s equity therein exceeds $200,000.

B. Legislative History

The legislative history of the homestead-exemption statute also supports construing “value of the homestead exemption” to refer to the debtor's equity in the property. See Tuma v. Commissioner of Econ. Sec., 386 N.W.2d 702, 706 (Minn.1986) (stating that legislative history can be considered in interpreting a statute only after the statute is found to be ambiguous).

The homestead-exemption statute was* amended to include the $200,000 limit in 1993 based on a bill introduced by Representative Thomas Pugh. When explaining his bill to the civil law subcommittee of the judiciary committee, he stated that it “proposes to * * * limit the [exempt] value, equity, in a home to $200,000.00 * * *.” Hearing on H.F. No. 592 Before the Civil Law Subcomm. of Judiciary (March 10, 1993) (emphasis added). When explaining to Representative Solberg how the bill worked, he further stated:

What this [bill] does, in essence, is to provide the procedure for [the] sale of the property and more particularly, provide a procedure in the event that the debtor and creditor disagrees to the value of the property. In other words, we’re protecting up to $200,000.00 in equity.

Id. (emphasis added). When Representative Pugh introduced his bill to the Committee on Judiciary, he was asked by Representative Limmer the following question:

On section 2(a), I’m just following the bill semi, but it says it limits the exemption to $200,000 in equity. That’s not in value of the property, its $200,000 in equity?

Hearing on H.F. No. 592 Before the Judiciary Comm. (Mar. 15, 1993). Representative Pugh replied: “Mr. Chair, Representative Limmer, that is correct. The equity.” Id. (emphasis added). Later, in describing the bill to the entire House of Representatives, Representative Pugh once again explained the bill:

What House File 592 does is limit that amount that is subject to protection to the sum of $200,000 in equity over and above any mortgaged value for a homestead in residential areas ⅜ * *.

House Floor Debate on H.F. No. 592 (Apr. 15, 1993) (statement of Rep. Pugh) (emphasis added).

While the Senate made some amendments to the bill, none affected the portion at issue in this appeal. Based on this legislative history, we cannot help but conclude that the legislature that amended the statute intended the amended statute to exempt up to $200,000 in homestead equity-

C. Effect of Contrary Interpretation

To read “value of the homestead exemption” to refer to the market value of the property would seriously erode the protection afforded by the homestead exemption. It would allow a creditor to force the sale of a homestead even where the debtor’s equity is less than $200,000. Such a result would violate the purpose of the exemption — to allow debtors to retain their family home as a safe harbor — and would not accomplish any practical benefit for the creditor. The homestead would be sold subject to prior encumbrances and the court would distribute the proceeds to the debtor to the extent of the exemption as required by section 550.175, subdivision 4(d). Thus, while the debtor would lose his or her home and receive the net proceeds from the sale, the creditor would receive nothing. It is only where the debt- or’s equity exceeds $200,000 that the creditor can achieve any benefit from the sale on execution. Thus, there is no public policy rationale for allowing an execution sale of homestead unless the debtor’s equity exceeds $200,000.

In light of the ambiguity in section 510.02, the interaction of that provision with aspects of other relevant statutes, the unmistakably clear legislative history of the 1993 amendment of the provision, and the counterproductive results of reading the statute to protect market value rather than equity, we conclude that the phrase “value of the homestead exemption” used in section 510.02 refers to the value of the debtor’s equity in the property.

II.

Respondent claims that the district court erred in concluding that because appellants’ 3.9-acre property is located outside a laid-out or platted portion of a city, it qualifies for a homestead exemption of up to 160 acres under section 510.02. Where a district court applies a statute in light of its factual findings, the district court’s “conclusion of law will include a determination of mixed questions of law and fact, determination of ‘ultimate’ facts, and legal conclusions.” Maxfield v. Maxfield, 452 N.W.2d 219, 221 (Minn.1990). Under these circumstances, we will affirm if the findings of fact “are not without support in the evidence” and if the conclusions based on those facts are not contrary to the statutory mandate. Colburn v. Pine Portage Madden Bros., 346 N.W.2d 159, 161 (Minn.1984).

Geographically, for a homestead to be exempt from legal process, it

may include any quantity of land not exceeding 160 acres, and not included in the laid out or platted portion of any city. If the homestead is within the laid out or platted portion of a city, its area must not exceed one-half of an acre.

Minn.Stat. § 510.02. It is undisputed that appellants’ property is not located within the laid-out or platted portions of any city and is not within the city limits of any city. Rather, the property is part of a lakeshore subdivision in Carver County. Respondent, however, claims that the nature of the property, rather than whether the property is in a “city,” is dispositive.

The courts have long struggled with the language of the homestead-exemption statute. See In re Becker, 215 B.R. 585, 586 (8th Cir.BAP 1998) (stating that the language and application of section 510.02 has long vexed the Minnesota courts); National Bank v. Banholzer, 69 Minn. 24, 26, 71 N.W. 919, 919 (1897) (stating that the “court has struggled with this statute ever since its passage”); Smith’s Estate v. Schubert, 51 Minn. 316, 316, 53 N.W. 711, 711 (1892) (characterizing the statute as “crude”); Mintzer v. St Paul Trust Co., 45 Minn. 323, 325, 47 N.W. 973, 974 (1891) (characterizing the statute as “beyond any satisfactory construction”). Banholzer was the last case to do an in-depth analysis of how to determine whether property is within a “city” under the language of what is now section 510.02. In Banholzer, the Minnesota Supreme Court, after several prior attempts to interpret the statute, “adopt[ed] the distinction between rural and urban as the controlling principle.” Banholzer, 69 Minn. at 26, 71 N.W. at 919. In doing so, the Supreme Court established a two-part test:

If, as a factual matter, the surrounding area is conclusively urban in character, the claimants are limited to the one-half acre permitted under section 510.01. If the surrounding area is conclusively rural, the claimants are permitted to exempt up to 160 acres. However, if the surrounding area is not conclusively rural or urban, a second factual determination must be made as to the character of the homestead itself.

Becker, 215 B.R. at 587 (citing Banholzer, 69 Minn. at 28-29, 71 N.W. at 920). Here, the record does not conclusively show that the surrounding area is rural in nature or urban in nature and the district court did not make a finding as to the nature of appellants’ property. Because the district court did not make the findings required by the law, we reverse and remand to with instruction that it apply the Banholzer test.

DECISION

Section 510.02 is ambiguous regarding whether it refers to the market “value” of the property or the “value” of the debtor’s equity in the property. Related statutes, the legislative history of section 510.02, and the nonviability of alternative interpretations of the statute indicate that the statutory homestead exemption applies to the value of the debtor’s equity. Therefore, we reverse the district court’s conclusion to the contrary. In addition, because the trial court did not make the findings required to determine whether appellants’ property is rural or urban, we reverse and remand with instruction that such a finding be made. Whether to reopen the record on remand shall be discretionary with the district court. We express no opinion on how to resolve the remanded issue.

Reversed and remanded.

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

      . The Banholzer court did not apply Minn. Stat. § 510.02, but rather, Gen.Stat. 1894, § 5521. However, other than different acreage limitations, on the critical issue of whether the property was within a platted portion of land, the language of both statutes is essentially the same.


author: SHUMAKER, Judge

text:
    STIGLICH CONSTRUCTION, INC., Appellant, v. Vernet B. LARSON, III, Respondent. Kathleen M. Larson, et al., Defendants.
    No. C6-00-1190.
    Court of Appeals of Minnesota.
    Jan. 30, 2001.
    Review Denied March 27, 2001.
    Marvin T. Fabyanske, Jocelyn L. Knoll, Aaron A. Dean, Fabyanske, Westra & Hart, P.A., Minneapohs, MN, for appellant.
    Ronald Snelling, Snelling, Christensen & Laue, P.A., Minneapohs, MN, for respondent.

      Considered and decided by SHUMAKER, Presiding Judge, WILLIS, Judge, and HOLTAN, Judge.

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

   OPINION

SHUMAKER, Judge

Appellant Stiglich Construction, Inc., brought a mechanic’s lien foreclosure action against respondent Vernet B. Larson, III. The parties arbitrated the contract dispute and appellant then moved the district court to award attorney fees incurred in the arbitration. The district court ruled that appellant waived its right to arbitration attorney fees by failing to request them in the arbitration. Because appellant properly reserved its right to request attorney fees in the district court mechanic’s lien foreclosure, we reverse and remand.

FACTS

General contractor Stiglich Construction, Inc., agreed to build a warehouse addition and to do remodeling and site improvements for Vernet Larson. The parties signed an American Institute of Architects (AIA) standard form contract.

When a dispute over payment arose, Stiglich filed a mechanic’s lien statement; demanded arbitration in accordance with a mandatory arbitration provision in the AIA contract; and started a mechanic’s lien foreclosure action, claiming entitlement to a lien in the amount of $241,218, plus costs and attorney fees.

The parties arbitrated their respective claims and counterclaims and the arbitrator made an award. Stiglich did not ask for attorney fees in the arbitration.

When Stiglich moved the district court for an order confirming the arbitrator’s award and establishing and foreclosing a mechanic’s lien, Stiglich added to the lien claim the attorney fees it incurred for the arbitration. Larson objected to the inclusion of Stiglich’s arbitration attorney fees, contending that Stiglich waived such fees by failing to submit them to the arbitrator. Citing language in the AIA contract, the district court ruled that Stiglich was entitled to attorney fees and costs incurred in the district court but not in the arbitration. Stiglich appeals.

ISSUE

The general contractor and property owner enter a contract that requires arbitration of all claims but allows parties to reserve other rights and remedies. By failing to request an award of attorney fees in the arbitration, did the contractor waive its right to claim such fees during the mechanic’s lien foreclosure action?

ANALYSIS

The premise of the district court’s order is that Stiglich and Larson agreed to arbitrate all claims arising out of or related to the contract. The district court concluded that the attorney fee claim is related to the contract, and, by failing to arbitrate that claim, Stiglich waived its right to obtain attorney fees and costs incurred in the arbitration. Whether or not a party has agreed to arbitrate a particular dispute is a matter of contract interpretation, which this court reviews de novo. Ottman v. Fadden, 575 N.W.2d 593, 595 (Minn.App.1998). A party can be required to arbitrate only those disputes it agreed to submit to arbitration. Id., citing AT & T Techs., Inc. v. Communications Workers of Am., 475 U.S. 643, 648, 106 S.Ct. 1415, 1418, 89 L.Ed.2d 648 (1986).

There are two provisions of the AIA contract at issue here. The first defines the scope of arbitrable issues:

4.5.1 Controversies or Claims Subject to Arbitration. Any controversy or Claim arising out of or related to the Contract, or the breach thereof, shall be settled by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof * * *.

The second provision allows parties to reserve rights and remedies otherwise available by law:

18.4.1 Duties and obligations imposed by the Contract Documents and rights and remedies available thereunder shall be in addition to and not a limitation of duties, obligations, rights and remedies otherwise imposed or available by law.

Stiglich contends that it reserved its right under the second provision to seek attorney fees in the lien foreclosure action pending in district court during the arbitration.

In a mechanic’s lien foreclosure action, a prevailing lienor is entitled to “costs and disbursements to be fixed by the court * * *.” Minn.Stat. § 514.14 (1998). As part of the lienor’s costs and disbursements, the court may award a reasonable attorney fee. See Obraske v. Woody, 294 Minn. 105, 108, 199 N.W.2d 429, 431 (1972) (stating that costs and disbursements include an award for attorney fees). The parties’ AIA contract does not specifically provide for an award of attorney fees in the mandatory arbitration.

If we were to read the AIA contract as Larson urges, and as the district court did, we would be giving legal force to the “claims” provision, but we would be ignoring the “reservation of rights” provision. The law requires us to construe a contract as a whole so as to harmonize all provisions, if possible, and to avoid a construction that would render one or more provisions meaningless. Chergosky v. Crosstown Bell, Inc., 463 N.W.2d 522, 525-26 (Minn.1990).

We believe that a reasonable construction of the AIA contract, one that harmonizes the provisions at issue, mandates arbitration for contractual claims but allows the contractor to reserve statutory lien rights to secure payment. The right to attorney fees, found only in the statutes, is a component of the statutory rights the contractor may reserve for district court determination.

Other jurisdictions that have examined identical or substantially similar AIA provisions have reached the same result. See, e.g., Stanley Smith & Sons, Inc. v. Dumas, 315 S.C. 30, 431 S.E.2d 595, 596 (1993) (holding that a reservation of rights provision entitled the contractor to seek attorney fees in the statutory enforcement action for both that action and the arbitration); Sentry Eng’g & Const. Inc., v. Mariner’s Cay Dev. Corp., 287 S.C. 346, 338 S.E.2d 631, 636 (S.C.1985) (holding that “where a contract providing for arbitration includes a reservation of rights and the lienor must bring a foreclosure action to enforce an arbitration award * * * ” the lienor may obtain attorney fees for both proceedings).

Although we are not bound by authorities in other jurisdictions, we find persuasive the view of the Oregon court in its construction of provisions identical to those at issue here:

It does not seem the most likely reading of this reservation of rights that it meant to sacrifice attorney fees which the law allows when all the phases of the foreclosure remedy are litigated in court. Rather, it seems more consonant with the apparent objective of including a reservation of rights * * * as disavowing such a limitation on the otherwise available right to attorney fees.

Harris v. Dyer, 292 Or. 238, 637 P.2d 918, 921 (1981).

Finally, the district court cites a construction industry rule as to an arbitrator’s authority to award attorney fees:

The award of the arbitrator may include * * * (b) an award of attorney’s fees if all parties have requested such an award or it is authorized by law or their arbitration agreement.

R-43, Construction Industry Dispute Resolution Procedures. We do not hold that parties to an AIA contract cannot voluntarily arbitrate attorney fee claims. Rather, we note that the agreement did not require the arbitration of attorney fees and that the reservation of rights provision allowed the contractor to reserve that issue for the final phase of the entire litigation.

Stiglich is entitled to submit to the district court a claim for attorney fees for both the arbitration and the court proceeding. The district court’s conclusion that Stiglich waived its right to claim attorney fees for the arbitration was error. Because the district court made no findings as to the attorney fees Stiglich incurred in the arbitration, we remand. See Richard Knutson, Inc. v. Westchester, Inc., 374 N.W.2d 485, 490 (Minn.App.1985).

DECISION

Stiglich properly reserved its right under the parties’ contract to submit a claim for arbitration attorney fees during the lien foreclosure action in district court. The court erred in concluding that Stiglich waived its right to such fees by failing to request them in the arbitration.

Reversed and remanded.

      . The contract further defines a claim as:
      a demand or assertion by one of the parties seeking, as a matter of right, adjustment or interpretation of the Contract terms, payment of money, extension of time or other relief with respect to the terms of the Contract. The term "Claim” also includes other disputes and matters in question between the Owner and Contractor arising out of or relating to the Contract.