author: MARING, Justice.

text:
    2005 ND 146
    CYBRCOLLECT, INC., Appellee and Cross-Appellant v. NORTH DAKOTA DEPARTMENT OF FINANCIAL INSTITUTIONS and Timothy J. Karsky, Commissioner of the North Dakota Department of Financial Institutions, Appellants and Cross-Appellees.
    No. 20040214.
    Supreme Court of North Dakota.
    July 27, 2005.

      Scott A. Miller, Assistant Attorney General, Office of Attorney General, Bismarck, N.D., for Appellants and Cross-Appellees.
    Ronald H. McLean (argued) and Timothy G. Richard, Serkland Law Firm, Fargo, N.D., for Appellee and Cross-Appellant.
    Marilyn K. Foss, Bismarck, N.D., ami-cus curiae for the National Automated Clearing House Association.
   MARING, Justice.

[¶ 1] The North Dakota Department of Financial Institutions (“DFI”) appeals and CybrCollect, Inc., (“CybrCollect”) cross appeals a district court amended judgment reversing the DFI’s order directing Cy-brCollect to cease its electronic collection of N.D.C.C. § 6-08-16(2) fees for checks that have been returned for insufficient funds (“NSF”) without the debtor’s signed authorization. We affirm the amended judgment of the district court reversing the order of the DFI.

I

[¶ 2] The DFI is authorized to regulate debt collection agencies under N.D.C.C. ch. 13-05. CybrCollect, a Wisconsin corporation, has been a licensed debt collection agency in North Dakota since April 2003. The DFI, in an administrative decision that rejected the recommendations of an administrative law judge (“ALJ”), determined that the electronic collection of NSF fees, without a check writer’s signed authorization, violates N.D.C.C. eh. 13-05.

[¶ 3] CybrCollect contracts with North Dakota merchants to electronically collect checks that have been returned for insufficient funds. A person issuing a check without sufficient funds is liable for collection fees or costs in an amount not to exceed $25. N.D.C.C. § 6-08-16(2). The $25 collection fee is recoverable by the holder of the check, its agent, or representative. Id. On behalf of the merchant, CybrCollect collects the amount of the NSF check, as well as the $25 statutory fee. CybrCollect’s standard merchant contract requires the merchant to post a sign that states:

Check Policy
In the unlikely event that your check is returned for Insufficient or Held Funds, we will debit your checking account electronically for the face amount of the check PLUS the fee listed below.... The transaction will appear on your bank statement and no one will have to contact you about payment.

$25.00

[¶ 4] When CybrCollect receives an NSF check from the contracting merchant’s bank, it scans the check into its computer system. The system converts the information into electronic data in the form of two debits: one for the face value of the check, and another for the amount of the merchant’s collection fee. When sufficient funds become available in the check writer’s account, the two electronic records are transmitted to the check writer’s bank through the Automated Clearing House (“ACH”), and the check writer’s account is debited for both amounts. If re-presentment is attempted twice and there are still insufficient funds in a check writer’s account, CybrCollect sends the cheek to a traditional collection agency for collection.

[¶ 5] CybrCollect uses the ACH, a nationwide electronic funds transfer system, as a means to electronically debit an NSF check writer’s checking account for both the face value of the NSF check and the NSF collection fee. The ACH is operated in accordance with the National Automated Clearing House Association (“NA-CHA”) rules. 2005 Electronic Payments Review and Buyer’s Guide, Understanding the ACH Network: An ACH Primer at 1.

[¶ 6] The NACHA rules constitute an agreement between all ACH participants as to how ACH transactions will be conducted, enabling participants to exchange debit and credit payments on common, agreed-to terms. NACHA 2003 Operating Rules, Article One, § 1.1. In a typical ACH transaction, five participants are involved: (1) an originating company or individual (“originator”); (2) a receiving company or individual (“receiver”); (3) an originating depository financial institution (“ODFI”); (4) a receiving depository financial institution (“RDFI”); and, (5) an ACH operator. 2005 Electronic Payments Review and Buyer’s Guide, Understanding the ACH Network: An ACH Primer at 1. The originator, generally a company directing a transfer of funds to or from a check writer’s account, initiates an ACH debit or credit payment based on a transaction with a receiver. Id. The receiver is typically a company, employee, or consumer that authorizes an originator to initiate an ACH debit or credit payment to or from the receiver’s account with an RDFI. Id. at 2. An ODFI is a depository financial institution, bank, savings association, or credit union that acts on behalf of an originator and forwards payment to an ACH operator for clearing. Id. at 1. An RDFI is a depository financial institution, bank, savings association or credit union that receives an ACH debit or credit payment from an ACH operator and posts the debit or credit payment to the receiver account, i.e., the RDFI’s depositor. Id. at 2. An ACH operator is a central clearing facility operated by a private organization or Federal Reserve Bank from which participating financial institutions transmit or receive ACH payments. Id.

[¶ 7] NACHA rules require that the receiver authorize the originator to initiate a credit or debit payment to or from a receiver’s account. NACHA 2003 Operating Rules, Article Two, § 2.1.2. In order for an originator to initiate a re-presentment payment to a receiver’s account, the receiver must authorize payment. See id., Article Two, §§ 2.1.2, 2.8.1. Re-presentment payments may only be initiated for the amount indicated on the NSF check. Id., Article Two, § 2.8.3.6. Therefore, the NSF fee must consist of a separate debit to the check writer’s account and requires a check writer’s authorization that is “signed or similarly authenticated by the consumer.” Id., Article Two, § 2.1.2.

[¶ 8] The DFI, contending NACHA rules are incorporated into North Dakota law, concluded CybrCollect’s electronic collection of NSF check fees, without written authorization from the check writer, violated NACHA rules, and consequently, violated North Dakota law. On March 7, 2003, the DFI issued a Cease and Desist Order against CybrCollect. The Order, in pertinent part, stated:

WHEREAS, it appears to the Commissioner CybrCollect, Inc., is engaging, has engaged, or is about to engage in acts and practices which may constitute violation of the North Dakota Collection Agency Act (N.D.C.C. ch. 13-05).
NOW THEREFORE, IT IS HEREBY ORDERED that CybrCollect, Inc., its directors, officers, employees, agents, and successors; cease and desist from engaging in further acts and practices in violation of N.D.C.C. ch. 13-05.

On March 21, 2003, CybrCollect served a Request for Hearing on the DFI. The DFI requested an ALJ conduct a hearing. In late April 2003, CybrCollect signed an agreement with the DFI and was issued a collection agency license, authorizing the corporation to engage in collection activity within North Dakota. The agreement specifically noted CybrCollect “may only collect collection fees electronically if it verifies that the debtor has signed a separate authorization allowing the electronic debit of the debtor’s account for those fees.” The agreement further stated, “[t]he restriction on the electronic collection of fees shall remain in force permanently unless the Department of Financial Institutions, the Burleigh County District Court or the North Dakota Supreme Court issues a final determination that allows CYBRCOLLECT, Inc., to collect those fees electronically without a separate signed authorization.”

[¶ 9] The ALJ held a hearing on May 12, 2003. The issues specified were: “Whether CybrCollect has engaged in acts, practices, or transactions in violation of N.D.C.C. ch. 13-05 such that the Commissioner may impose a cease and desist order against CybrCollect under the provisions of N.D.C.C. ch. 13-05, and whether such acts, practices, or transactions require further relief beyond the imposition of a cease and desist order.” The ALJ’s recommended Findings of Fact, Conclusions of Law, and Order, dated June 24, 2003, found:

There is simply nothing stated in North Dakota law or policy that would allow DFI to prohibit CybrCollect from interpreting the law in a reasonable fashion, as it has, based on Federal Reserve Board interpretation, to do what it currently does in its business activities. It is not against North Dakota law to do so, and the DFI is, at this time, powerless to prevent it, notwithstanding any powers or duties pursuant to agreements any other entities may have in regard to the business practices of Cy-brCollect, and notwithstanding any risks to North Dakota consumers or the potential for fraud occurring with regard to North Dakota consumers. There has to date been no allegation of specific fraud or allegation of violation of specific statute or rule by DFI against CybrCol-lect.
If one of the interpretations of the law offered by the parties in this matter is to be authoritative in North Dakota, it is up to DFI to adopt a rule or for the North Dakota Legislative Assembly to pass a statute to deal with this situation of consumer risk and risk for financial institutions, if indeed there is a risk.

[¶ 10] In a letter dated July 29, 2008, the DFI commissioner requested that Cy-brCollect brief two additional issues related to the Fair Debt Collection Practices Act (“FDCPA”): (1) whether CybrCol-lect’s contact with the check writer’s financial institution inquiring whether sufficient funds were available to re-present the NSF check is a “communication with third parties,” which is prohibited by 15 U.S.C. § 1692c(b); and, (2) whether CybrCollect’s debiting of a check writer’s account is a communication with the check writer that necessitates CybrCollect’s sending of a written notice to the check writer under 15 U.S.C. § 1692g(a). CybrColleet objected, claiming that those issues were new legal theories that could not be raised after the ALJ hearing and decision. CybrColleet then requested a DFI hearing. The DFI granted the request and a hearing was held on September 29, 2003.

[¶ 11] In November 2003, the DFI issued its Order, rejecting the recommended Order by the ALJ and affirming the DFI’s earlier Cease and Desist Order. The DFI ordered CybrColleet to “cease and desist from engaging in further acts, practices, and transactions in violation of N.D.C.C. chapter 13-05, specifically including, but not limited to, the electronic collection of N.D.C.C. § 6-08-16(2) collection fees without the debtor’s signed authorization.” Specifically, the Order concluded:

3. CybrColleet does not have the authority to collect NSF fees pursuant to N.D.C.C. § 6-08-16 without the check writer’s signed authorization for the following reasons:
a. State law does not allow CybrCol-lect to unilaterally debit a check-writer’s account without notice and an opportunity for hearing. CybrCollect’s actions in debiting a check writer’s account for the NSF fees without the appropriate authority is a “fraudulent, deceptive, or misleading representation or means to collect or attempt to collect claims,” which is a violation of N.D.A.C. § 13-04-02-08.
b. CybrColleet contractually agreed in two separate contracts to follow the NACHA Operating Rules. CybrCol-lect’s intentional and knowing violation of those agreements is “conduct which will bring reproach upon the industry or the commissioner of financial institutions” and is, therefore, a violation of N.D.A.C. § 13-04-03-01. The fines to which CybrColleet would be subject due to its repeated violation of the NACHA Operating Rules would place CybrColleet in a position that would violate N.D.A.C. § 13-04-03-10. CybrCollect’s agreement to comply with the NACHA rules while never intending to so comply is a “fraudulent, deceptive, or misleading representation or means to collect or attempt to collect claims,” which is a violation of N.D.A.C. § 13-04-02-08.
c. NACHA Operating Rules have been incorporated into state law. Since the NACHA Operating Rules have been incorporated into state law, CybrCollect’s actions in submitting electronic debit entries without the check writers’ signed authorizations violates state law.
CybrCollect’s actions in debiting a check writer’s account for the NSF fees without the appropriate authority is a “fraudulent, deceptive, or misleading representation or means to collect or attempt to collect claims,” which is a violation of N.D.A.C. § 13-04-02-08. CybrCollect must obtain the check-writer’s written permission prior to removing the NSF fee from the check-writer’s account.
4. CybrCollect is a “debt collector” under the FDCPA. CybrCollect’s actions in calling the check-writers’ banks to verify funds and in submitting electronic debit entries to the ACH network and debtors’ banks without a customer’s pri- or consent is a “communication with third parties” which is prohibited under 15 U.S.C. § 1692e(b). CybrCollect’s signage is insufficient to establish consumer consent. CybrCollect’s violation of 15 U.S.C. § 1692c(b) is a violation of N.D.A.C. § 13-04-02-04(6). CybrCol-lect can neither call a check-writer’s bank nor submit electronic debit entries to the ACH network without a consumer’s prior consent. However, that consent does not need to be in writing under the FDCPA.

[¶ 12] CybrCollect appealed the DFI decision to the district court. The district court issued an amended judgment reversing the DFI’s order and awarding attorney’s fees and costs to CybrCollect. The DFI appeals, arguing CybrCollect’s debiting of a check writer’s account for NSF fees without the appropriate authority violates N.D.C.C. ch. 13-05 in at least four ways. First, CybrCollect is violating N.D. Admin. Code § 13-04-02-08, which prohibits “fraudulent, deceptive, or misleading representation or means to collect or attempt to collect claims” because N.D.C.C. § 6-08-16 does not explicitly provide for electronic collection of NSF fees without the check writer’s signed authorization. Second, CybrCollect’s collection practice violates the NACHA Operating Rules. Cy-brCollect contractually agreed in two separate contracts to abide by the NACHA rules; therefore, its knowing violation of the agreements violates N.D. Admin. Code § 13-04-03-01 because it is “conduct which will bring reproach upon the industry or the commissioner of financial institutions” and violates N.D. Admin. Code § 13-04-02-08 because it is a deceptive means to collect a claim. Third, because NACHA Operating Rules have been incorporated into North Dakota law, violation of NACHA rules violates state law. Fourth, CybrCollect is violating the Federal Fair Debt Collection Practices Act, and consequently, N.D. Admin. Code § 13-04-02-04(6), which states debt collectors may not “[vjiolate sections 804 through 810 of the Federal Fair Debt Collection Practices Act.” The DFI further argues that the district court erred in awarding attorney’s fees to CybrCollect because the DFI’s actions were substantially justified.

[¶ 13] On cross appeal, CybrCollect argues it was denied due process by the DFI because the DFI did not follow the proper procedures for an administrative hearing under N.D.C.C. ch. 28-32 or provide a fair hearing. CybrCollect further contends the district court erred when it limited Cy-brColleet’s attorney’s fees to only its North Dakota counsel.

III

[¶ 14] Administrative agency decisions are subject to limited judicial review. Huff v. North Dakota State Bd. of Medical Examiners, 2004 ND 225, ¶ 8, 690 N.W.2d 221. Under N.D.C.C. §§ 28-32-46 and 28-32-49, the district court, and this Court on further appeal, must affirm an administrative agency decision unless one of the following is present:

1. The order is not in accordance with the law.
2. The order is in violation of the constitutional rights of the appellant.
3. The provisions of this chapter have not been complied with in the proceedings before the agency.
4. The rules or procedure of the agency have not afforded the appellant a fair hearing.
5. The findings of fact made by the agency are not supported by a preponderance of the evidence.
6. The conclusions of law and order of the agency are not supported by its findings of fact.
7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.
8. The conclusions of law and order of the agency do not sufficiently explain the agency’s rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

Id.

[¶ 15] When reviewing an administrative agency decision, we do not substitute our judgment for that of the agency or make independent findings. Id. We determine only if a reasoning mind reasonably could have concluded the findings were supported by the weight of the evidence in the entire record, deferring to the hearing officer’s opportunity to judge the credibility of witnesses. Id. An agency’s decision on questions of law are fully reviewable. Id.

IV

[¶ 16] The DFI appeals, arguing Cy-brCollect’s debiting of a check writer’s account for NSF fees without the check writer’s signed authorization violates N.D.C.C. ch. 13-05.

[¶ 17] Section 13-05-06, N.D.C.C., provides:

Insofar as consistent with other provisions of law, the department of financial institutions has the power to:
4. Adopt any and all rules and regulations necessary to carry out the purpose of this chapter.
5. Issue and serve upon any person or licensed collection agency an order to cease and desist to take corrective action when the department has reason to believe the person or agency is violating, has violated, or is about to violate the provisions of this chapter. An interested party may appeal issuance of a cease and desist order under the provisions of chapter 28-32 by filing written notice of appeal within twenty days after service of the order.

N.D.C.C. § 13-05-06.

[¶ 18] The chapter further provides:

1. The department of financial institutions may:
a. Make such public or private investigation within or outside this state as it deems necessary to determine whether a person has violated or is about to violate a provision of this chapter or a rule or order under this chapter, or to aid in the enforcement of this chapter or in the adopting of rules and forms under this chapter.
b. Require or permit a person to file a statement in writing, under oath or otherwise as the department determines, as to all the facts and circumstances concerning the matter to be investigated.
c. Publish information concerning a violation of this chapter or a rule or order under this chapter.
2. For the purpose of an investigation or proceeding under this chapter, the department of financial institutions may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of books, papers, correspondence, memoran-da, agreements, or other documents or records which the department deems relevant or material to the inquiry.

N.D.C.C. § 13-05-06.2.

A. Violation of N.D. Admin. Code § 13-04-02-08

[¶ 19] Section 13-04-02-08, N.D. Admin. Code, prohibits a debt collector from using “any fraudulent, deceptive, or misleading representation or means to collect or attempt to collect claims or to obtain information concerning consumers.” The DFI contends CybrCollect is violating N.D. Admin. Code § 13-04-02-08 because N.D.C.C. § 6-08-16 does not explicitly provide for electronic collection of NSF fees without the check writer’s signed authorization. The DFI asserts that construing N.D.C.C. § 6-08-16 to be statutory permission for a merchant or a merchant’s agent to unilaterally take the NSF fee from a check writer’s account without written authorization makes the statute unconstitutional. The DFI cites Garrison Memorial Hospital v. Rayer, 453 N.W.2d 787 (N.D.1990), in which this Court considered the constitutionality of the issuance of an ex parte writ of attachment under N.D.C.C. ch. 32-08.1 on a debtor’s property. In considering the constitutionality of the statutorily-authorized prejudgment seizure of property, this Court stated, “a debtor must ordinarily be afforded a hearing before his property may be seized at the instance of a creditor.” Id. at 791. This Court gave the following requirements for an ex parte prejudgment attachment to be valid:

In such cases, an ex parte prejudgment attachment procedure may be valid if the creditor must make a showing of the nature of the claim and the amount thereof, if any, and the grounds relied upon for the issuance of the writ to a judge exercising judicial discretion whenever necessary, to aid in minimizing the likelihood of an improvident issuance of a writ.

Id. (citations omitted). The debtor must also receive a “prompt” hearing on the matter. Id.

[¶ 20] The DFI argues that under Cy-brCollect’s procedure, CybrCollect never has to commence a civil action to debit the collection fee from the check writer’s account; a judge never reviews the application to relieve the check writer of his assets; and, the check writer receives no hearing. The DFI urges a different interpretation of N.D.C.C. § 6-08-16: The statute allows a creditor or collection agency to collect the NSF fee from a check writer’s account without a lawsuit, but only with the check writer’s written permission. If the check writer does not give written permission, then the creditor or collection agency must institute the appropriate civil remedies available to them in order to collect. Accordingly, the DFI argues N.D.C.C. § 6-08-16 does not provide statutory permission for CybrCollect to unilaterally remove the collection fee from a check writer’s account, because, if it did, it would be of doubtful constitutionality. See State ex rel. Heitkamp v. Family Life Services, Inc., 2000 ND 166, ¶ 42, 616 N.W.2d 826 (holding that if a statute may be construed in two ways, one that renders it of doubtful constitutionality and one that does not, we adopt the construction that avoids constitutional conflict).

[¶ 21] The DFI contends that further support for its position is found in N.D.C.C. § 6-08-16(4). The last sentence of subsection 4 provides that notice to the debtor indicating the debtor has issued a dishonored check may contain a statement regarding “the possibility of a civil action to recover any collection fees or costs or civil penalty authorized by this section.” N.D.C.C. § 6-08-16(4). The DFI argues that this language, in addition to the constitutional issues previously discussed, lead to the conclusion that N.D.C.C. § 6-08-16 does not provide the authorization to unilaterally debit an NSF check writer’s bank account.

[¶ 22] Finally, the DFI argues that because it lacks the statutory authority to do so, CybrCoIIect’s actions are “fraudulent, deceptive, or misleading representation or means to collect or attempt to collect claims,” which is also a violation of N.D. Admin. Code § 13-04-02-08. We disagree.

[If 23] Section 6-08-16(2), N.D.C.C., provides: “The person is also liable for collection fees or costs, not in excess of twenty-five dollars, which are recoverable by the holder, or its agent or representative, of the check, draft, electronic funds transfer authorization, or order.” Section 6-08-16(4), N.D.C.C., sets forth the form for a notice of dishonor that notifies the person “you must pay or tender to” the holder sufficient funds to cover the NSF check and collection fees within ten days or a civil penalty is also recoverable. The issue of whether the DFI commissioner correctly interpreted a statute is a question of law fully reviewable by our Court. State v. American West Community Promotions, Inc., 2002 ND 98, ¶ 7, 645 N.W.2d 196. Our primary goal in statutory construction is to ascertain the intent of the legislature. Id. at ¶ 14. We first look to the plain language of the statute and give words their ordinary meaning. Id. “If a statute is ambiguous, extrinsic aids useful in construing the statute to determine legislative intent include the object sought to be obtained, the legislative history, and the administrative construction of the statute.” Hamich, Inc. v. State ex rel. Clayburgh, 1997 ND 110, ¶ 13, 564 N.W.2d 640. Section 6-08-16, N.D.C.C., is not ambiguous. The plain language of the statute cannot be read to prohibit a holder of an NSF check from electronically debiting collection fees without a written authorization from the check writer. There is nothing in N.D.C.C. ch. 13-05 that prohibits the procedures used by CybrCollect. Furthermore, none of the regulations promulgated under N.D.C.C. § 13-05-06(4) to carry out the purpose of N.D.C.C. ch. 13-05 specifically prohibit the procedures used by CybrCollect. The DFI has rulemaking authority, but it has not exercised it on this issue. N.D.C.C. § 13-05-06(4). The function of the courts is to interpret the law, not to legislate. Doyle v. Sprynczynatyk, 2001 ND 8, ¶ 16, 621 N.W.2d 353 (citing Fetzer v. Minot Park Dist., 138 N.W.2d 601, 604 (N.D.1965) (holding we cannot legislate, regardless of how much we might desire to do so or how worthy an argument. If the rule is wrong, the legislature has ample power to change it, but the duty of the judiciary is to enforce the law as it exists)).

[¶ 24] CybrCollect contends its business practice is not prohibited by North Dakota law and is instead governed by the Electronic Funds Transfer Act (“EFTA”), 15 U.S.C. §§ 1693, et seq. and Regulation E, 12 C.F.R. Part 205, issued by the Federal Reserve Board to carry out the purpose of the Act. 12 C.F.R. § 205.1(b). The Federal Reserve Board has taken the position that a check submitted for payment by a customer that is returned for insufficient funds and re-presented electronically through the ACH system is outside the scope of the Act, but electronic debits for NSF fees are subject to the Act and Regulation E. See Commentary to 12 C.F.R. § 205.3(b)(l)(v) and Commentary to 12 C.F.R. § 205.3(c)(l)(l). Under Regulation E, electronic fund transfers for non-recurring debits, such as NSF fees, may be authorized “where the consumer has received notice that a fee imposed for returned checks will be debited electronically from the consumer’s account.” Commentary to 12 C.F.R. § 205.3(c)(1). The DFI concluded in its Order that while notice is sufficient under Regulation E, CybrCollect’s sign did not constitute adequate notice, because CybrCollect could not verify the sign was always placed in an area that might give a check writer notice of its contents. During oral argument, DFI indicated there were federal court decisions supporting its position that Cy-brCollect was not providing adequate notice to consumers. DFI submitted several post-argument decisions for our review. These decisions can be distinguished because they do not interpret the EFTA, 15 U.S.C. §§ 1693, et seq. or Regulation E, 12 C.F.R. Part 205, but rather they interpret the FDCPA, 15 U.S.C 1692. We are not persuaded by the DFI’s arguments and conclude its interpretation of the statutes is not supported by the law and its finding is not supported by a preponderance of the evidence. See N.D.C.C. § 28-32^16(1), (5).

B. Violation of NACHA Operating Rules

[¶ 25] The DFI contends CybrCollect’s collection practices violate the NACHA Operating Rules. Because CybrCollect contractually agreed in two separate contracts to abide by the NACHA rules, its knowing violation of the agreements violates N.D. Admin. Code § 13-04-03-01 because it is “conduct which will bring reproach upon the industry or the commissioner of financial institutions” and violates N.D. Admin. Code § 13-04-02-08 because it is a deceptive means to collect. The DFI argues CybrColleet’s agreement with Wells Fargo Bank requires CybrCol-lect to comply with NACHA rules, which require a check writer’s written authorization before debiting the check writer’s account for NSF fees. Therefore, the DFI contends CybrCollect is intentionally and knowingly violating this agreement with both Wells Fargo Bank and the NACHA each time it accomplishes an NSF fee debit. We are not persuaded by the DFI’s argument that CybrCollect’s alleged breach of its agreement with Wells Fargo Bank is a violation of N.D.C.C. ch. 13-05 or any of the regulations enacted to carry out its purpose. These contracts were never offered into evidence and even if they had been and a breach of contract were proven, it would not be evidence of a violation of N.D.C.C. ch. 13-05.

[¶ 26] The DFI argues that because NACHA Operating Rules have been incorporated into North Dakota law, violation of NACHA rules violates state law. The DFI further argues the NACHA Rules are “clearing house” and “funds-transfer” rules as provided under N.D.C.C. ch. 41-04.1. The DFI contends that given the repeated statutory reference to and incorporation of clearing house and fund-transfer rules in state law, the NACHA rules are the correct place to look to determine CybrCollect’s responsibilities with regard to its electronic debiting practices. Therefore, the DFI argues that because the NACHA rules have been incorporated into state law, CybrCollect’s actions in submitting electronic debit entries without the check writer’s signed authorization violates state law, authorizing the DFI to order them to cease and desist. We disagree.

[¶ 27] First, North Dakota’s version of Article 4 of the Uniform Commercial Code is not applicable to electronic debits of NSF collection fees. The legislature adopted N.D.C.C. ch. 41-04 virtually verbatim from Article 4 of the Uniform Commercial Code. Section 41-01-04(1)® applies to “items” that are defined as “an instrument or a promise or order to pay money handled by a bank for collection or payment.” An “instrument” is a “negotiable instrument.” N.D.C.C. §§ 41-04-04(3)® and 41-03-04(1) and (2). A “negotiable instrument” is an “unconditional promise or order to pay a fixed amount of money.” N.D.C.C. § 41-03-04(1). A “promise” is “a written undertaking to pay money.” N.D.C.C. §§ 41-04-04(3)(o) and 41-03-03(1)®. An “order” is “a written instruction to pay money.” N.D.C.C. §§ 41-04-04(3)(k) and 41-03-03(1)®. Therefore, an electronic debit does not meet the definition of “item” under N.D.C.C. ch. 41-04. Consequently, electronic debits of NSF fees are outside the scope of N.D.C.C. ch. 41-04.

[¶ 28] Second, the references to “clearinghouse” and “fund-transfer” rules in N.D.C.C. tit. 41 are specific and limited. Title 41, N.D.C.C., gives no indication that its references to “clearinghouse” and “fund-transfer” rules is meant to be an incorporation of the rules into North Dakota law. See N.D.C.C. tit. 41. Third, N.D.C.C. § 41-04.1-08 expressly states, “[t]his chapter does not apply to a funds transfer any part of which is governed by the Electronic Fund Transfer Act of 1978 as amended from time to time.” Therefore, the North Dakota Legislative Assembly expressly acknowledges that consumer electronic fund transfer transactions are subject to the Electronic Fund Transfer Act. Fourth, some states have adopted their own version of the EFTA. See, e.g., Mass. Stats. 167B § 1, et seq. Our legislature has recently adopted legislation regulating electronic fund transfers from consumer accounts, amending N.D.C.C. § 6-08-16(2) requiring the holder of electronic funds transfer authorization, who uses the automated clearinghouse network to collect the collection fees or costs, to comply with the network’s rules and regulations. See 2005 N.D. Sess. Laws ch. 86, § 15. As of the date of this case, however, it had not done so. Therefore, at the time of the DFI order, consumer electronic fund transactions in North Dakota remain subject only to the EFTA and Regulation E.

C. Violation of the FDCPA

[¶ 29] The DFI contends Cy-brCollect is violating 15 U.S.C. 1692c(b), the Federal Fair Debt Collection Practices Act. Consequently, according to the DFI, CybrCollect is in violation of N.D. Admin. Code § 13-04-02-04(6), which states debt collectors may not “[v]iolate sections 804 through 810 of the Federal Fair Debt Collection Practices Act.” The FDCPA states:

(b) COMMUNICATION WITH THIRD PARTIES. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

15 U.S.C. 1692e(b).

[¶ 30] Under North Dakota law, an administrative hearing may not be held unless the parties have been served with “a written specification of issues for hearing or other document indicating the issues to be considered and determined at the hearing.” N.D.C.C. § 28-32-21(3)(c). In the Notice of Hearing and Specification of Issues provided to CybrColleet, the issues were: “Whether CybrColleet has engaged in acts, practices, or transactions in violation of N.D.C.C. ch. 13-05 such that the Commissioner may impose a cease and desist order against CybrColleet under the provisions of N.D.C.C. ch. 13-05, and whether such acts, practices, or transactions require further relief beyond the imposition of a cease and desist order.” These were the issues CybrColleet received notice of and the issues before the ALJ.

[¶ 31] In a letter dated July 29, 2003, the DFI commissioner requested that CybrColleet brief two additional issues related to the FDCPA: (1) whether Cy-brCollect’s contact with the check writer’s financial institution inquiring whether sufficient funds were available to re-present the NSF check is a “communication with third parties,” which is prohibited by 15 U.S.C. § 1692c(b); and, (2) whether CybrCollect’s debiting of a check writer’s account is a communication that necessitates CybrCollect’s sending of a written notice to the debtor according to 15 U.S.C. § 1692g(a).

[¶ 32] CybrColleet argues the actions of the DFI in expanding the scope of this case to include new legal theories raised after the first ALJ hearing violates the procedural requirements of the Administrative Agencies Practice Act. See N.D.C.C. ch. 28-32. Our Court has held that “[d]ue process requires a participant in an administrative proceeding be given notice of the general nature of the questions to be heard, and an opportunity to prepare and to be heard on those questions.” Saakian v. N.D. Workers Compensation Bureau, 1998 ND 227, ¶ 11, 587 N.W.2d 166. We have stated that notice is adequate if it fairly apprises the party of the nature of the proceedings. Id. “These due process principles are embodied in N.D.C.C. § 28-32-05(3)(c), which requires a written specification of issues before an administrative hearing....” Id. “Basic notions of fundamental fairness dictate a person challenging an agency action must be adequately informed in advance of the questions to be addressed at the hearing so the person can be prepared to present evidence and arguments on those questions.” Id. In this case, the specification of issues was broadly stated as whether CybrColleet had engaged in acts in violation of N.D.C.C. ch. 13-05, but the record makes it clear that the alleged violation was CybrCollect’s failure to obtain a written authorization from the check writer prior to electronically collecting collection fees.

[¶ 33] On April 19, 2003, CybrColleet signed an agreement with the DFI that CybrColleet could only collect collection fees electronically if it verified the check writer had signed a written authorization. The agreement provided the restriction would remain in force until the DFI, district court, or Supreme Court entered a final order. The ALJ framed the issue before him as “Without a written authorization from the debtor can a fee of $25.00 be collected electronically from an account?” After the administrative hearing, the DFI raised an entirely new violation and asked CybrColleet to brief it. The DFI alleged a violation by CybrColleet of N.D. Admin. Code § 13-04-02-04(6) because of its violation of the Federal Fair Debt Collection Practices Act, 15 U.S.C. 1692(b), which prohibits communication by the debt collector with the debtor’s bank. CybrCollect did not have any prior notice of this alleged violation and no opportunity to prepare and present evidence on the issue to the ALJ. We conclude CybrCol-lect did not receive adequate notice of this violation, was unfairly surprised and prejudiced. The DFI, therefore, cannot rely on this alleged violation to support its cease and desist order and decision in this case.

V

[¶ 34] The DFI argues an award of attorney’s fees was improper because its actions with regard to CybrCollect’s NSF fee collection practice are “substantially justified” as required by N.D.C.C. § 28-32-50. This Court addressed the issue of “substantial justification” as follows:

We have adopted the federal courts’ interpretation of substantial justification:
In Pierce v. Underwood, 487 U.S. 552, 565, 108 S.Ct. 2541, 2550, 101 L.Ed.2d 490, 504 (1988), the United States Supreme Court construed ‘substantially justified’ to mean ‘ “justified in substance or in the main” — that is, justified to a degree that could satisfy a reasonable person.’ The court observed that ‘a position can be justified even though it is not correct, and we believe it can be substantially (i.e., for the most part) justified if a reasonable person could think it correct, that is, if it has a reasonable basis in law and fact.’ Id.[, 487 U.S. at 565, 108 S.Ct. at 2550, 101 L.Ed.2d] at 504.

Peterson v. North Dakota Dept. of Transp., 518 N.W.2d 690, 696 (N.D.1994).

[¶ 35] The DFI argues, therefore, that considering CybrCollect violates its Wells Fargo Bank and ACH agreement with each singular ACH transaction, a “reasonable person” would find its attempt to stop CybrCollect’s NSF fee collection process to be “substantially justified.” Therefore, CybrCollect is not entitled to attorney’s fees and costs.

[¶ 36] CybrCollect argues that because the DFI’s conduct, including issuing a cease and desist order, without basis for a violation of North Dakota law and raising new issues after the hearing before the ALJ which resulted in unnecessary expense and loss of business, has been egregious and lacked “substantial justification,” the award of attorney’s fees and costs is justified.

[¶ 37] Because of our resolution of the issues raised in this appeal, we affirm the district court’s award of attorney’s fees to CybrCollect.

[¶ 38] The DFI further argues the amount of the award was not justified and CybrCollect counters on cross appeal that the award of attorney’s fees should be increased to include the amount of its Wisconsin attorney’s fees.

[¶ 39] CybrCollect requested an award of attorney’s fees and costs under N.D.C.C. § 28-32-50 and Rule 54(e)(2), N.D.R.Civ.P. The trial court found it was reasonable to award attorney’s fees to CybrCollect, which resulted from the representation by the attorneys of the Serkland Law Firm, but not the attorneys of the Foley and Larndner Law Firm. The trial court found that the fees of the Foley and Larndner Firm “may be duplicative, they would result in legal costs far in excess of what would be assessed locally and that including them would make the award unreasonably high.” We have identified the factors in N.D.R. Prof. Conduct 1.5(a) as a guide for the trial court in determining the reasonableness of the fees it shall award. T.F. James Co. v. Vakoch, 2001 ND 112, ¶ 23, 628 N.W.2d 298. We have said that all factors must be considered and no single factor controls. Id. “A trial court is considered an expert in determining the amount of attorney fees.” State Farm Fire and Cas. Co. v. Sigman, 508 N.W.2d 323, 327 (N.D.1993). Its decision concerning the amount and reasonableness of the attorney’s fees will not be overturned on appeal absent a clear abuse of discretion. Id. In this case, the trial court considered appropriate factors. We are not persuaded that the trial court’s award of attorney’s fees was an abuse of discretion.

VI

[¶ 40] We conclude all other arguments raised by the DFI to be without merit. We affirm the amended judgment of the district court reversing the order of the DFI.

[¶ 41] GERALD W. VANDE WALLE, G.J., ALLAN L. SCHMALENBERGER, D.J., and CAROL RONNING KAPSNER, J., concur.

[¶ 42] The Honorable ALLAN L. SCHMALENBERGER, D.J., sitting in place of SANDSTROM, J., disqualified.

[¶ 43] Justice WILLIAM A. NEUMANN, a member of the Court when this case was heard, resigned effective March 14, 2005, and did not participate in this decision. The Honorable DANIEL J. CROTHERS did not participate in this decision.

      . The legislature amended subsection 2 of section 6-08-16, N.D.C.C., effective August 1, 2005, to state: "If the holder of the check, draft, electronic funds transfer authorization, or order or the holder's agent or representative uses the automated clearinghouse network to collect the collection fees or costs, that person shall comply with the network’s rules and requirements.” 2005 N.D. Sess. Laws ch. 86, § 15.


source: Caselaw Access Project

license: Public Domain

text:
    2005 ND 147
    Mark ROJAS, Claimant and Appellee v. WORKFORCE SAFETY AND INSURANCE, Appellant and Holland Enterprises, Inc., Respondent.
    No. 20040352.
    Supreme Court of North Dakota.
    July 28, 2005.

      Stephen D. Little, Dietz & Little Lawyers, Bismarck, N.D., for claimant and ap-pellee.
    Leo F.J. Wilking, Special Assistant Attorney General, Nilles, Ilvedson, Stroup, Plambeck & Seibo, Ltd., Fargo, N.D., for appellant.
   MARING, Justice.

[¶ 1] Workforce Safety and Insurance (“WSI”) has appealed from a district court judgment reversing WSI’s final order, which denied Mark Rojas’s reapplication for disability benefits, and remanding for entry of an order allowing further disability benefits. We modify the judgment and affirm as modified.

I

[¶ 2] In January 2000, Rojas injured his left knee when he slipped on ice at a truck stop in Gary, Indiana. Rojas was at the time employed as an over-the-road truck driver by Holland Trucking of Fargo, North Dakota, and was a resident of Maryland. Rojas filed a claim for workers compensation benefits, and WSI accepted the claim and paid medical and disability benefits.

[¶ 3] WSI alleges that, on May 10, 2000, it mailed a Notice of Intention to Discontinue/Reduce Benefits (“NOID”) to Rojas at his last known address in Maryland advising him that his disability benefits would be terminated as of May 31, 2000. Rojas claims he never received the NOID. When Rojas realized he was no longer receiving disability benefit checks, he attempted to contact his claims analyst at WSI by telephone to determine the status of his claim. Neither the claims analyst, nor anyone else from WSI, ever returned any of Rojas’s calls to WSI.

[¶ 4] Faced with discontinuation of his disability benefits and WSI’s failure to return his telephone calls seeking information on his claim, Rojas eventually hired an attorney. Rojas’s counsel contacted WSI, explaining that Rojas had never received the NOID and wished to appeal the decision terminating his benefits. WSI responded that its prior decision to terminate Rojas’s disability benefits was final, and Rojas’s only option was to file a reapplication for disability benefits.

[¶ 5] Rojas filed a reapplieation for disability benefits in June 2001. On July 10, 2001, WSI entered its Notice of Decision denying his reapplication. Rojas requested reconsideration and a formal hearing.

[¶ 6] In October 2001, Rojas underwent arthroscopic surgery on his knee. The surgeon diagnosed Rojas with synovial hypertrophy and atrophy of the left quadriceps. WSI paid the medical costs of the surgery and the subsequent physical therapy.

[¶ 7] A hearing before an administrative law judge (“ALJ”) was held on August 20, 2003. The ALJ subsequently issued recommended findings of fact, conclusions of law, and order. The ALJ specifically found Rojas had never received the NOID. The ALJ also found Rojas had proved he had suffered a significant change in his medical condition and a resulting actual wage loss, and Rojas was therefore entitled to ongoing disability benefits from May 2001.

[¶ 8] WSI adopted some of the ALJ’s recommended findings of fact and conclusions of law, and rejected others. WSI adopted the ALJ’s finding that Rojas did not receive the NOID, but rejected the ALJ’s findings that Rojas had shown a significant change in his medical condition and had suffered an actual wage loss. WSI therefore concluded Rojas had failed to show he was entitled to any further disability benefits under the reapplication statute.

[¶ 9] Rojas appealed from WSI’s final order to the district court. The district court determined WSI had failed to adequately address the evidence favorable to Rojas and to adequately explain its rationale for rejecting the ALJ’s decision. The court also found there had been improper communications between WSI’s litigation counsel, WSI’s in-house counsel, and WSI’s final adjudicator. The district court therefore reversed WSI’s order and directed WSI to reinstate the ALJ’s recommended decision. WSI moved for reconsideration, seeking clarification of the court’s order. In a written order, the district court responded in part that Rojas’s failure to receive notice and an opportunity to respond “placefd] a greater burden on him.” A final judgment was entered, and WSI appealed.

II

[¶ 10] Under ND.C.C. § 28-32-46, the district court must affirm an order of an administrative agency unless it finds any of the following are present:

1. The order is not in accordance with the law.
2. The order is in violation of the constitutional rights of the appellant.
3. The provisions of this chapter have not been complied with in the proceedings before the agency.
4. The rules or procedure of the agency have not afforded the appellant a fair hearing.
5. The findings of fact made by the agency are not supported by a preponderance of the evidence.
6. The conclusions of law and order of the agency are not supported by its findings of fact.
7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.
8. The conclusions of law and order of the agency do not sufficiently explain the agency’s rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

On appeal from the district court’s decision on an administrative appeal, this Court reviews the agency order in the same manner. N.D.C.C. § 28-32-49; Ringsaker v. Workforce Safety & Ins. Fund, 2005 ND 44, ¶ 9, 693 N.W.2d 14.

III

[¶ 11] The right to continuing disability benefits under the Workers Compensation Act is a property right protected by the due process clauses of the federal and state constitutions. Sjostrand v. North Dakota Workers Comp. Bureau, 2002 ND 125, ¶ 9, 649 N.W.2d 537; Jacobson v. North Dakota Workers Comp. Bureau, 2000 ND 225, ¶ 19, 621 N.W.2d 141. Before WSI terminates ongoing disability benefits, it must provide notice of the contemplated action and a meaningful preter-mination opportunity to respond:

We addressed the due process implications of termination of disability benefits in Beckler v. North Dakota Workers Compensation Bureau, 418 N.W.2d 770 (N.D.1988). We concluded in Beckler that the continuing right to workers compensation disability benefits was a property right protected by the due process clause. Analyzing the due process requirements for termination of ongoing benefits under Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970) and Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), we concluded workers compensation disability benefits could be discontinued without a pretermination hearing only when there were “elaborate” pre-termination procedural safeguards and a right to a timely post-termination evi-dentiary hearing. The pretermination procedure must include, at a minimum, pretermination notice of the contemplated action, a summary of the evidence supporting the proposed termination, and a pretermination opportunity to respond in writing to the alleged grounds for termination.

Stewart v. North Dakota Workers Comp. Bureau, 1999 ND 174, ¶ 12, 599 N.W.2d 280 (citations omitted); see also Sjostrand, at ¶ 10.

[¶ 12] Before Rojas’s continuing disability benefits could be terminated, he was entitled to pretermination notice of the contemplated action, a summary of the evidence, and an opportunity to respond. WSI alleges it mailed the NOID to Rojas’s last known address by regular mail. The ALJ and WSI specifically found, however, that Rojas never received the NOID.

[¶ 13] This Court has repeatedly stated that “notice of an opportunity for a hearing sent by regular mail is insufficient to guarantee due process when the presumption of receipt raised by Section 31-11-03(24), N.D.C.C., is rebutted.” State v. Egan, 1999 ND 59, ¶ 7, 591 N.W.2d 150; In re Estates of Gustafson, 381 N.W.2d 208, 211-12 n. 5 (N.D.1986); State v. Tininenko, 371 N.W.2d 762, 763 (N.D.1985); State v. Knittel, 308 N.W.2d 379, 384 (N.D.1981). The potential risks of delivery of notice by regular mail have been noted:

But, there is also some frailty in notice by ordinary mail. As Justice O’Connor dissenting in Greene [v. Lindsey], 456 U.S. [444,] 460, 102 S.Ct. [1874,] 1883, [72 L.Ed.2d 249 (1982)] observed, there is risk of “loss, misdeliv-ery, lengthy delay, or theft” of ordinary mail and “unattended mailboxes are subject to plunder.” When a statutory regime relies on the economy and efficiency of ordinary mail for the notice required by procedural due process, its purpose may fail if there is no actual notice. Where presumptive evidence “that a letter duly directed and mailed was received in the regular course of the mail” is “contradicted by other evidence,” N.D.C.C. § 31-11-03(24), the issue of actual notice is for the trier of fact to decide.

Tininenko, at 766 (Meschke, J., specially concurring). In this case, both the ALJ and WSI made a finding of fact that Rojas did not receive any notice before his disability benefits were terminated in May 2000.

[¶ 14] WSI contends it is statutorily authorized to send notice of its decisions by regular mail under N.D.C.C. § 65-01-16. Compliance with the statute does not, however, relieve WSI of its duty to comport with due process, or trump a claimant’s constitutional due process right to adequate notice and an opportunity to be heard. Sending the NOID to the claimant by regular mail under N.D.C.C. § 65-01-16 “is insufficient to guarantee due process when the presumption of receipt raised by Section 31-11-03(24), N.D.C.C., is rebutted.” Egan, 1999 ND 59, ¶ 7, 591 N.W.2d 150; Gustafson, 381 N.W.2d at 211-12 n. 5; Tininenko, 371 N.W.2d at 763; Knittel, 308 N.W.2d at 384.

[¶ 15] Furthermore, this Court has repeatedly held that a claimant’s due process rights are violated if the NOID does not adequately advise the claimant of the reason for the proposed termination and include a summary of the evidence relied upon by WSI. See, e.g., Jacobson, 2000 ND 225, ¶ 19, 621 N.W.2d 141; Stewart, 1999 ND 174, ¶¶ 15-19, 599 N.W.2d 280; Vernon v. North Dakota Workers Comp. Bureau, 1999 ND 153, ¶¶ 17-21, 598 N.W.2d 139; Flink v. North Dakota Workers Comp. Bureau, 1998 ND 11, ¶¶ 15-18, 574 N.W.2d 784. The requirement that the NOID set forth WSI’s rationale supporting termination and delineate the evidence supporting WSI’s conclusions is intended to provide the claimant with a meaningful opportunity to respond:

[W]hen ongoing governmental benefits are to be terminated without a predepri-vation hearing, the claimant must respond directly to the pretermination notice. The claims delineated in the notice are not fleshed out in an evidentiary hearing before benefits are terminated. The additional requirement of a summary of the evidence in pretermination cases is intended to allow the claimant to construct a meaningful response to the governmental action:
[P]rior to the cutoff of benefits the agency informs the recipient of its tentative assessment, the reasons therefor, and provides a summary of the evidence that it considers most relevant. Opportunity is then afforded the recipient to submit additional evidence or arguments, enabling him to challenge directly the accuracy of information in his file as well as the correctness of the agency’s tentative conclusions. These procedures, again as contrasted with those before the Court in Goldberg, enable the recipient to “mold” his argument to respond to the precise issues which the deci-sionmaker regards as crucial.
Beckler, 418 N.W.2d at 773, quoting Mathews v. Eldridge, 424 U.S. 319, 346, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976).

Stewart, at ¶ 18. If a claimant’s due process rights are violated when he receives a notice that does not adequately set forth WSI’s theories and evidence supporting termination because it deprives him of the opportunity to meaningfully respond, then certainly the failure to receive any notice at all, which completely deprives the claimant of any opportunity to respond or to seek a hearing, is also a denial of due process.

[¶ 16] We conclude WSI’s termination of Rojas’s ongoing disability benefits when he had not received any prior notice or opportunity to respond violated due process.

IV

[¶ 17] The ALJ and WSI applied the reapplication statute, which requires that a claimant whose disability benefits have been discontinued must reapply for further benefits and may not receive additional benefits unless he proves (1) he has sustained a significant change in his com-pensable medical condition; (2) he has sustained an actual wage loss caused by the change in medical condition; and, (3) he has not retired or voluntarily withdrawn from the job market. N.D.C.C. § 65-05-08(1). The ALJ concluded Rojas was entitled to further benefits, finding that Rojas had sustained a significant change in his medical condition resulting in actual wage loss. The ALJ further determined the change in medical condition was diagnosed by Rojas’s doctor on July 26, 2001, and, applying the maximum 60-day look-back for certifying disability under N.D.C.C. § 65-05-08.1(2)(d), Rojas had proven he was entitled to resumption of benefits effective May 27, 2001.

[¶ 18] When Rojas’s counsel originally contacted WSI he was told that, because Rojas had failed to respond to the NOID within 30 days, WSI’s decision terminating his benefits was final and his only option was to file a reapplication. By applying the reapplication statute rather than reviewing its original decision to terminate benefits, WSI placed a greater burden of proof upon Rojas, requiring him to establish not only that he was disabled but also that he had suffered a significant change in his medical condition and an actual wage loss caused by the change in condition. The reapplication statute is only applicable, however, if the claimant’s prior benefits have been validly terminated. In this case, Rojas’s failure to receive the NOID violated due process and effectively nullified WSI’s May 31, 2000, termination of his benefits. Accordingly, the reapplication statute was inapplicable and the ALJ should not have limited reinstatement of benefits to the period beginning May 27, 2001.

[¶ 19] The appx-opriate remedy in this case is reinstatement of all benefits from May 31, 2000, the date of the original teimination of benefits. This case is similar to Flink, 1998 ND 11, ¶ 19, 574 N.W.2d 784, in which the Court held that WSI was, in effect, required to start over when it had violated due process notice requirements and failed to address appropriate issues at the hearing:

Because the Bureau failed to properly address Flink’s rehabilitation options and also failed to give Flink proper notice, “we hold that he is entitled to the benefits he seeks.” Beckler at 775. The Bureau’s decision denying Flink temporary total disability benefits as of May 5, 1993, is reversed, and Flink is entitled to temporary total disability benefits retroactive to May 5, 1993, and prospectively until the Bureau adequately addresses Flink’s rehabilitation options and provides proper notice of intention to discontinue or reduce benefits. Upon receiving proper notice, Flink may challenge the Bureau’s decision and request a hearing.

See also Bjerke v. North Dakota Workers Comp. Bureau, 1999 ND 180, ¶ 23, 599 N.W.2d 329 (quoting Flink).

[¶ 20] This case is distinguishable from prior cases in which this Court allowed a limited period of reinstated benefits for a due process violation when the claimant eventually received proper notice and an evidentiary hearing on all proper issues was held with a meaningful opportunity for the claimant to respond. See, e.g., Bjerke, 1999 ND 180, ¶ 24, 599 N.W.2d 329; Stewart, 1999 ND 174, ¶¶ 30-35, 599 N.W.2d 280. In Stewart, at ¶ 32, the Court distinguished Flink because in Flink the claimant had never received a hearing on the appropriate issues. In this case, WSI has consistently refused to allow Rojas to challenge its initial decision to terminate benefits, requiring that he instead meet the more stringent burdens under the reapplication statute. Accordingly, under Flink, Rojas is entitled to disability benefits retroactive to May 31, 2000, the date of the original termination, and prospectively until WSI provides proper notice of intention to discontinue or reduce benefits.

V

[¶ 21] The parties and the district court raised the issue of alleged improper contacts between WSI’s litigation counsel, WSI’s in-house counsel, and WSI’s final adjudicator. We recently addressed similar issues in Miller v. Workforce Safety & Ins., 2004 ND 155, 684 N.W.2d 641. Because we conclude Rojas is entitled to reinstatement of all disability benefits from the date of the original termination, we find it unnecessary to address the improper communication issue.

VI

[¶ 22] We modify the judgment of the district court to direct WSI to enter an order consistent with this opinion reinstating Rojas’s disability benefits from May 31, 2000, and prospectively. As modified, the judgment is affirmed.

[¶ 23] GERALD W. VANDE WALLE, C.J., JAMES M. BEKKEN, D.J., and CAROL RONNING KAPSNER, J., concur.

[¶ 24] The Honorable JAMES M. BEKKEN, D.J., sitting in place of SANDSTROM, J., disqualified.

[¶ 25] The Honorable DANIEL J. CROTHERS did not participate in this decision.


author: PER CURIAM.

text:
    2005 ND 148
    In the Matter of the Application for DISCIPLINARY ACTION AGAINST John T. KORSMO, a Member of the Bar of the State of North Dakota. Disciplinary Board of the Supreme Court, Petitioner, v. John T. Korsmo, Respondent.
    No. 20050251.
    Supreme Court of North Dakota.
    Aug. 3, 2005.
   INTERIM SUSPENSION ORDERED

PER CURIAM.

[¶ 1] On July 27, 2005, an Application for the Interim Suspension of John T. Korsmo, a member of the Bar of North Dakota, and a certified copy of the Judgment in a Criminal Case in United, State of America John T. Korsmo, United States District Court, District of Columbia, Case No. CR05-104-01, was filed under N.D.R. Lawyer Discipl. 4.1(D) by Paul W. Jacobson, Disciplinary Counsel. The Judgment in a Criminal Case shows that Korsmo was found guilty of one count of false and fictitious statements in violation of 18 U.S.C. § 1001(a)(2), a felony.

[¶ 2] N.D.R. Lawyer Discipl. 4.1(D) provides that upon the filing with the court of a certificate or other satisfactory evidence of conviction demonstrating that a lawyer has been convicted of a serious crime, the court shall enter an order immediately suspending the lawyer pending final disposition of a disciplinary proceeding predicated upon the conviction.

[¶ 3] Under N.D.R. Lawyer Discipl. 4.1(C), a serious crime is any felony and any lesser crime a necessary element of which, as determined by the statutory or common law definition of the crime, involves interference with the administration of justice, false swearing, misrepresentation, fraud, willful failure to file income tax returns, deceit, bribery, extortion, misappropriation, theft, or an attempt or a conspiracy or solicitation of another to commit any of those crimes.

[¶ 4] ORDERED, under N.D.R. Lawyer Discipl. 4.1(D), John T. Korsmo’s certificate of admission to the Bar of the State of North Dakota is SUSPENDED effective immediately and until further order of this Court, pending final disposition of a disciplinary proceeding predicated upon the conviction.

[¶ 5] GERALD W. VANDE WALLE, C.J., MARY MUEHLEN MARING and CAROL RONNING KAPSNER, JJ., concur.

[¶ 6] The Honorable DALE V. SANDSTROM and the Honorable DANIEL J. CROTHERS, deeming themselves disqualified, did not participate in this decision.


author: VANDE WALLE, Chief Justice.

text:
    2005 ND 152
    STATE of North Dakota, Plaintiff and Appellee v. Travis PARISIEN, Defendant and Appellant.
    Nos. 20040348, 20040349, 20040350.
    Supreme Court of North Dakota.
    Aug. 18, 2005.

      Mary Kathleen O’Donnell, State’s Attorney, Rolla, N.D., for plaintiff and appellee.
    Robin L. Olson, Olson Johnston Law Office, Grand Forks, N.D., for defendant and appellant.
   VANDE WALLE, Chief Justice.

[¶ 1] Travis Parisién appealed from criminal judgments entered on jury verdicts finding him guilty of class A felony gross sexual imposition, class C felony aggravated assault and class C felony felonious restraint. We conclude that, under the totality of the circumstances, Parisien was denied his constitutional rights to be present and to a fair trial. We reverse the criminal judgments and remand for a new trial.

I

[¶ 2] These criminal convictions stem from charges that Parisién physically and sexually assaulted his girlfriend during a two-hour period at her home in St. John on August 27, 2002. Parisien’s jury trial began Tuesday morning, June 22, 2004, and continued through the week. On Friday, June 25, 2004, the trial resumed at 9:30 a.m. After the prosecution and the defense rested their cases, the court informed the jury that final instructions would be prepared and, after deliberations began the court would continue jury deliberations until verdicts were rendered. The jury left the courtroom at 3:40 p.m. The judge later received a note from the jury stating, “Roberta has to go home to care for her 91 yr old mother evenings. No one else available. Also Roberta doesn’t drive at night. Several would like to call family members before 5:00.” The judge responded at 4:40 p.m. in a note stating, “I’m sorry that I cannot excuse you but I hope you can make some other arrangements with your mother. If you need to make any phone calls, please let the bailiff know.” The jury reconvened in the courtroom at 5:05 p.m. for presentation of closing arguments and the closing'jury instructions. The jury retired for deliberations at 7:40 p.m.

[¶ 3] During its deliberations, the jury sent several questions to the court. The first jury question relevant to this appeal was sent to the judge at 11:25 p.m. and stated, “Hung jury on Sexual charge. Vote — 10-2.” After conferring with the prosecutor and defense attorney in chambers without Parisién being present and without the proceedings being recorded, the judge responded to the jury in a note stating, “Please try your best to see if you can arrive at a verdict if you can.” At 12:15 a.m. on Saturday, June 26, 2004, the jury sent another note to the judge stating, “Sexual charge[.] Hung jury[.]” After conferring with counsel, again in Pari-sien’s absence and without recordation of the proceedings, the judge responded in a note stating, “1. Have you reached a verdict on the other 2 charges? 2. Would a recess until later today be of any assistance in reaching a verdict?” At 12:27 a.m., the jury responded “yes” to the judge’s first question, and in response to the second question stated, “We are taking a break [and] then vote again.” At 2:19 a.m., the jury returned verdicts finding Parisién guilty of all three charges.

[¶ 4] After the judgments were entered and the appeals were filed, Parisien, through different counsel, moved under N.D.R.App.P. 10(f) and (h) for modification or correction of the record to reflect what occurred during the in-chamber conferences when the jury questions were addressed. After obtaining the written recollections of the in-chambers conferences from the attorneys involved in those discussions, the trial court found:

1. The written questions and responses are the best evidence as to the decisions made after discussions between the Court and the attorneys.
2. The Court recalls that Mr. Slorby, who was representing Travis at the trial, did make an oral request for a mistrial after the jury could not reach a verdict. This was about five hours after the jury had begun deliberations. Miss O’Donnell resisted the request by stating that it was too early to consider a mistrial. The Court declined to grant the Motion because of the short period of time that the jury had deliberated.
3. The Court was informed by the jury that it had reached a verdict in two cases and could not agree on the third verdict. The Court does not recall that it was informed by the jury in writing that they stood ten to two. If Mr. Slor-by had this information, he must have learned of it after the verdict.
4. All of the discussions relating to jury questions were held in the Judge’s office. This is a small office that is close to the courtroom. The office door and the court room door were open. Because the office is small, the Court knows that Travis was not in the office, but may have been in the hall way between the office and the Court room. If Travis was in the court room, he could have easily heard the discussions. Mr. Slorby did not request that Travis be present, and the Court overlooked requiring Travis be present. The Court assumed that his attorney kept him informed as to the communications between the Court and jury.

II

[¶ 5] The dispositive issues in this case are whether the procedure the trial court used when it answered the jury’s questions and the allegedly coercive effect the circumstances surrounding the jury’s deliberations had on the guilty verdicts entitle Parisien to a new trial.

A

[¶ 6] Parisien argues the trial court erred in answering the jury’s questions in his absence and without calling the jury into open court.

[¶ 7] A defendant has a right to be present in the courtroom at every stage of trial. State v. Klose, 2003 ND 39, ¶ 32, 657 N.W.2d 276; N.D.R.Crim.P. 43(a). Section 29-22-05, N.D.C.C., sets forth the procedure to be followed when a jury has a question for the trial court after the jury has retired for deliberations:

After the jurors have retired for deliberation, if they desire to be informed on a point of law arising in the cause, or to have any testimony about which they are in doubt or disagreement read to them, they, upon their request, must be conducted into the courtroom by the officer who has them in custody. Upon their being brought into court, the information required must be given in the presence of, or after notice to, the state’s attorney and the defendant or his counsel, or after they have been called.

[¶ 8] Although N.D.C.C. § 29-22-05 specifically refers only to jury questions on a “point of law” and jury requests to have testimony read, this Court has long construed the statute to require that all communications with the jurors, after a case has been submitted to them, must be made in open court and in the presence of the defendant. See Klose, 2003 ND 39, ¶¶ 32-34, 657 N.W.2d 276; Hill v. State, 2000 ND 143, ¶¶ 16-18, 615 N.W.2d 135; State v. Ash, 526 N.W.2d 473, 481 (N.D.1995); State v. Zimmerman, 524 N.W.2d 111, 117 (N.D.1994); State v. Smuda, 419 N.W.2d 166, 167 (N.D.1988); State v. Hatch, 346 N.W.2d 268, 277-78 (N.D.1984). This Court stated in State v. Klein, 200 N.W.2d 288, 292 (N.D.1972):

After a case has been submitted to the jury, the only proper forum for communication between the jury and the judge is in open court, where a proper record may be made of any conversation had. Any such communication should be made in the presence of the entire jury panel, counsel for both sides, and, in a criminal prosecution, in the presence of the defendant.

Because of the constitutional underpinnings of the defendant’s right to be present, a violation of the right “is subject to the harmless error standard for constitutional errors — ‘harmless beyond a reasonable doubt.’ ” City of Mandan v. Baer, 1998 ND 101, ¶ 10, 578 N.W.2d 559 (quoting Chapman v. California, 386 U.S. 18, 24, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967)). The rights afforded a defendant under N.D.C.C. § 29-22-05 are not absolute, however, and may be waived by failing to object to the trial court’s procedure in responding to the jury’s request. See State v. Jahner, 2003 ND 36, ¶ 10, 657 N.W.2d 266; see also Baer, at ¶ 9 (noting constitutional right of the defendant to be present may be affirmatively waived by the defendant).

[¶ 9] We hold the trial court erred in responding to the jury’s questions without the defendant being present and without calling the jury into open court where a proper record could be made of discussions concerning the jury questions.

B

[¶ 10] Parisien argues the jury was coerced into rendering the guilty verdicts by being kept “late into the night” to deliberate and by being instructed by the trial court to try to reach a verdict after the court knew the jury was deadlocked and knew of the jury’s numerical division.

[¶ 11] A trial court has broad discretion over the conduct of a trial, including the time in which a jury may properly deliberate, but the court must exercise this discretion in a manner that best comports with substantial justice. See Selzler v. Selzler, 2001 ND 138, ¶ 10, 631 N.W.2d 564; 75B Am.Jur.2d Trial § 1648 (1992). It is often stated that the mere length of time a jury is kept in deliberations, in itself, does not establish that a verdict was coerced:

[M]ere lateness of the hour or length of the jurors’ day does not establish that the resulting verdict was coerced; in this regard, the late hour of deliberations does not, by itself, create an inference that one or more jurors might have surrendered their conscientious views to arrive at a verdict. However, while, as a rule, a conviction will not be reversed when the jury reports that it is unable to reach a verdict, is directed to deliberate further, and later returns a verdict, unless the trial court has abused its discretion in some way or the record indicates that the verdict may have been coerced, keeping the jury confined for a long period after they have reported an inability to agree may, together with other circumstances, amount to coercion.

75B Am.Jur.2d Trial § 1648, at p. 424 (footnotes omitted). See, e.g., People v. Pecka, 183 Ill.App.3d 60, 131 Ill.Dec. 633, 538 N.E.2d 1189, 1197 (1989) (length of jury deliberations from 1 p.m. until 2:50 a.m. the following morning did not establish improper coercive influence where jurors did not indicate they were deadlocked and nothing in the record showed the verdict arrived at was the result of fatigue or exhaustion); State v. Trimble, 371 N.W.2d 921, 925-26 (Minn.App.1985) (length of jury deliberations from 4 p.m. until 2 a.m. the following morning was not coercive where nothing showed the jury felt compelled to deliberate into the late hours of the night).

[¶ 12] Nevertheless, “courts have acknowledged that a verdict might be forced where the deliberations of a jury are prolonged beyond a reasonable period, since the verdict of such a jury may be the result of fatigue, exhaustion, weariness, and the physical and mental inability of disagreeing minority jurors to withstand the arguments and importunities of the majority, instead of the result of free action and voluntary agreement of each individual juror.” Annot., Time jury may be kept together on disagreement in criminal case, 93 A.L.R.2d 627, 632 (1964) (footnote omitted). The “State and the court, independently, have an interest and obligation to assure that the jury reaches a verdict free of extraneous pressures, strain, or discomfort.” State v. Bergeron, 340 N.W.2d 51, 58 (N.D.1983).

[¶ 13] Courts have arrived at varying results in assessing coerciveness when other circumstances combine with prolonged jury deliberations. One circumstance often accompanying prolonged jury deliberations is a trial court giving a deadlocked jury an instruction based on Allen v. United States, 164 U.S. 492, 17 S.Ct. 154, 41 L.Ed. 528 (1896). See Annot., Instructions urging dissenting jurors in state criminal case to give due consideration to opinion of majority (Allen charge) — modern cases, 97 A.L.R.3d 96 (1980), and cases collected therein. Generally, an ‘Allen” charge, often called the “dynamite” charge “is a supplemental instruction given to encourage deadlocked jurors to reach agreement.” State v. Champagne, 198 N.W.2d 218, 237 (N.D.1972). In Champagne, at 236, the jury commenced its deliberations at 2:05 p.m. on June 12, 1971, and after receiving a message that the jury was deadlocked, the trial court had the jury return to the courtroom at 12:05 a.m. on June 13, 1971. The trial court gave the jury an “Allen-type instruction” stating in part that “ ‘You should consult again with one another and deliberate to reaching agreement if you can do so without doing violence to your individual judgments,’ ” and that “ ‘you should not surrender your honest convictions concerning the effect or weight of evidence for the mere purpose of returning a verdict or solely because of opinion of the other jurors.’ ” Id. at 236. After the jury was given the instruction, it deliberated until 1:15 a.m., when the jury returned a verdict finding the defendant guilty of murder. Id. at 237. This Court concluded that, under the circumstances, “the modified Allen charge ... did not constitute prejudicial error to the defendant.” Id. at 239. See also Davis v. State, 832 So.2d 239, 240 (Fla.App.2002) (applying totality of the circumstances test, court found no improper coercion where after several hours of deliberation jury sent judge note indicating jury was deadlocked and court told jurors “ ‘I’m going to send you back to talk about it a little bit more’ ”).

[¶ 14] However, in Weaver v. Thompson, 197 F.3d 359, 365 (9th Cir.1999), the jury sent a note to the judge “at 8:30 p.m., after a full day of trial followed by four hours of deliberations,” asking whether the jury must decide all four of the counts. The bailiff relayed the contents of the note to the judge, who had left the courthouse, and the judge told the bailiff he would return immediately to discuss the note with counsel. Id. at 361. Before the judge arrived, the bailiff told the jurors they were required to return a verdict on all four counts. Id. at 366. Five minutes later, the jury reported it had reached verdicts and found the defendant guilty on all four counts. Id. at 361. The court treated the bailiffs comments to the jury as a de facto Allen charge, applied a totality of the circumstances test, and concluded the charge had an impermissibly coercive effect on the jury and violated the defendant’s due process rights. Id. at 365-66. Among the factors relied upon by the court was the absence “of an offsetting cautionary instruction informing jurors that they need not give up their conscientiously held views” and “that the jurors’ lengthy day and the lateness of the hour would make them susceptible to influence.” Id. at 366.

[¶ 15] A trial judge’s knowledge of the numerical division of a deadlocked jury is also an important factor to consider in assessing improper coercion. See Annot., Propriety and prejudicial effect of trial court’s inquiry as to numerical division of jury, 77 A.L.R.3d 769 (1977), and cases collected therein. The Supreme Court has long held that a trial court may not ask a deadlocked jury the nature or extent of its numerical division. See Brasfield v. United States, 272 U.S. 448, 450, 47 S.Ct. 135, 71 L.Ed. 345 (1926) (“We deem it essential to the fair and impartial conduct of the trial, that the inquiry itself should be regarded as ground for reversal”); Burton v. United States, 196 U.S. 283, 308, 25 S.Ct. 243, 49 L.Ed. 482 (1905) (“[W]e do not think that the proper administration of the law requires such knowledge or permits such a question on the part of the presiding judge. Cases may easily be imagined where a practice of this kind might lead to improper influences”). The “rule is a prophylactic one, designed to shield the jury from the unpredictable effects of both the inquiry itself and the jury’s knowledge of the judge’s awareness of its division.” United States v. Sae-Chua, 725 F.2d 530, 531 (9th Cir.1984). The disclosure of a jury’s numerical split also has been said to, consciously or subconsciously, influence the judge to insist that the jury continue deliberating and reach a verdict because any holdouts “may give in at any time.” Thomas v. State, 748 So.2d 970, 979 (Fla.1999). The inadvertent disclosure to the trial court of the nature and extent of the jury’s numerical division before the issuance of an Allen charge, under some circumstances, has been held to be at least as coercive as the inquiry itself. See, e.g., Sae-Chua, 725 F.2d at 531-32; Williams v. United States, 338 F.2d 530, 532-33 (D.C.Cir.1964); see also Thomas, 748 So.2d at 979 (“Although this information was not requested by the judge, its disclosure was fraught with the danger that any further instruction to deliberate might be construed as pressure on the single ‘holdout’ to give in. We have recently reiterated that the better practice is for the trial judge to admonish the jury at the outset of deliberations that they should not indicate how they stand during their deliberation”). Although the Ninth Circuit Court of Appeals has indicated that the giving of an Allen charge after the trial court has been informed of the jury’s numerical division is per se coercive and requires reversal, see Sanders v. Lamarque, 357 F.3d 943, 944 (9th Cir.2004), most courts hold that disclosure of the jury’s numerical split is simply a factor to consider in assessing whether the totality of the circumstances indicate a coerced verdict. See, e.g., United States v. Mejia, 356 F.3d 470, 477 (2nd Cir.2004); United States v. Degraffenried, 339 F.3d 576, 580 (7th Cir.2003); United States v. Tanios, 82 F.3d 98, 101 (5th Cir.1996); Thomas, 748 So.2d at 979-80; People v. Logston, 196 Ill.App.3d 30, 142 Ill.Dec. 525, 552 N.E.2d 1266, 1269-70 (1990). Annot., 77 A.L.R.3d 769, at § 6(c).

[¶ 16] In this case, the jury deliberated from 7:40 p.m. until 2:19 a.m. after a full day of trial, and the trial court instructed the jury to “try your best to see if you can arrive at a verdict” after the jury had informed the court it was “[h]ung” on the “[s]exual charge” by a vote of “10-2.” Parisién contends these circumstances show the jury was improperly coerced into reaching the guilty verdicts.

C

[¶ 17] Although Parisién alleges errors of constitutional dimension which the State carries the burden of establishing are harmless beyond a reasonable doubt, see, e.g., Clark v. State, 2001 ND 9, ¶ 15, 621 N.W.2d 576, Parisien’s trial attorney did not object to the procedure the trial court used to answer the jury’s questions or to the supplementary jury instructions given during deliberations. When a problem arises during a trial, the party affected must bring the irregularity to the trial court’s attention and seek appropriate remedial relief, because issues not raised below, even constitutional issues, generally will not be addressed on appeal unless the alleged error rises to the level of obvious error under N.D.R.Crim.P. 52(b). State v. Miller, 2001 ND 132, ¶ 24, 631 N.W.2d 587. To establish obvious error, the defendant has the burden of establishing plain error that affects substantial rights. State v. Krull, 2005 ND 63, ¶ 6, 693 N.W.2d 631. Only constitutional error that is “egregious” or “grave” is subject to the obvious error rule. State v. Murphy, 527 N.W.2d 254, 257 (N.D.1995). Under the totality of the circumstances in this case, we conclude Parisién has established obvious error affecting his substantial constitutional rights to be present and to a fair trial.

[¶ 18] June 25, 2004, was a Friday before an early summer weekend. Trial proceedings commenced at 9:30 a.m. that day and the jury did not return verdicts until 2:19 a.m. the following morning, almost 17 hours after proceedings began. At least one juror, before deliberations started, expressed reservations about staying at the courthouse into the night because of her inability to find someone to care for her elderly mother and her reluctance to drive at night. The trial court received questions from the jury at 11:25 p.m. and 12:15 a.m. indicating the jurors were unable to arrive at a verdict on the “[s]exual charge.” Parisién was not present during the in-chambers discussions between the trial court and counsel regarding proper responses to the questions. Although Parisien’s trial attorney did not object to Parisien’s absence, Parisién filed an affidavit with the trial court stating he did not discover until after the trial had concluded that the jury sent questions to the judge and “I was not asked to give up my right to be present nor did I give my permission to any person to waive my right to be present when these discussions took place.” Parisien’s trial attorney explained that the reason for Parisien’s “absence [from the in-chamber discussions] is I was quite exhausted at the time and quite frankly too tired to have thought of it.” The prosecutor did not “recall the subject of the defendant waiving his right to be present being brought up in any manner,” and confirmed that “[i]t had been a long trial, and everyone was exhausted.” It is safe to assume the jury was equally “exhausted.”

[¶ 19] The jury also was not called into open court where a proper record could be made of the discussions concerning the jury questions as required under this Court’s interpretations of N.D.C.C. § 29-22-05. If this procedure had been followed, the trial court and counsel would have had an opportunity to observe the appearance of the jurors and the sounds of their voices in assessing the effect these prolonged late-night deliberations were having on the jurors and in deciding whether to adjourn or to continue deliberations until verdicts were rendered. If the trial court had conducted its communications in open court, or if the in-chambers discussions had been recorded, a complete record of the proceedings also would have been made to enable us to determine whether Parisién knowingly and voluntarily forfeited any objection to these procedural irregularities. See, e.g., United States v. Neff, 10 F.3d 1321, 1324 (7th Cir.1993).

[¶ 20] Although the trial court in its order for modification or correction of the record said it did “not recall that it was informed by the jury in writing that they stood ten to two” and that Parisien’s trial attorney “must have learned of it after the verdict,” the jury’s 11:25 p.m. note to the judge states the vote was “10-2,” and no record was made of the in-chamber discussions. The trial court inadvertently obtained knowledge of the deadlocked jury’s numerical division and then instructed the jury to “try your best to see if you can arrive at a verdict if you can.” The trial court did not include an offsetting cautionary instruction informing the jurors they need not give up their conscientiously held views, which should accompany an Allen- type charge whether or not the judge has knowledge of the jury’s numerical division. See Weaver, 197 F.3d at 366; see also Champagne, 198 N.W.2d at 237 (quoting Benzmiller v. Swanson, 117 N.W.2d 281, 289 (N.D.1962)) (“ ‘trial courts should scrupulously avoid any statement or suggestion which would induce the jurors to conciliate arbitrarily or coerce them into returning a verdict at the cost of any juror’s surrendering his honest convictions’ ”). When the jury again informed the trial court at 12:15 a.m. that it was “[h]ung” on the “[s]exual charge,” the court asked if the jury had reached a verdict on the other charges and whether “a recess until later today [would] be of any assistance in reaching a verdict.” The jury decided to take a break and “vote again.” The totality of the circumstances indicate the jurors were susceptible to influence and could have formed the belief that they would not be allowed to leave until a verdict had been rendered.

[¶ 21] Given the jury’s 17-hour workday, the lateness of the hour, the trial court’s knowledge of the deadlocked jury’s numerical division, the two responses to the jurors encouraging them to continue to try to reach a verdict, the failure of the court to follow the proper procedure in addressing the jury’s questions, and the lack of a record of the in-chamber conferences, we conclude that Parisien’s right to be present was violated and the verdicts were improperly coerced in violation of Parisien’s due process right to a fair trial. Although the jury indicated it was deadlocked only on the sexual assault charge, we do not know what verdicts, if any, the jury had reached on the other two charges when it sent its first note to the judge at 11:25 p.m.

[¶ 22] In the past, this Court has declined to reverse convictions based on the cumulative effect of any alleged errors because the asserted errors were not errors or, if they were error, they were not unfairly prejudicial. See, e.g., State v. Ebach, 1999 ND 5, ¶ 16, 589 N.W.2d 566; State v. Sievers, 543 N.W.2d 491, 498 (N.D.1996). However, while each of the errors in this case, standing alone, arguably may have been harmless, the errors are so intertwined and interrelated that we conclude the cumulative effect of the errors requires reversal of all three criminal judgments and a remand for a new trial. See Schuhmacher v. North Dakota Hosp. Ass’n, 528 N.W.2d 374, 383 (N.D.1995); Fuhrman v. Fuhrman, 254 N.W.2d 97, 98 (N.D.1977).

III

[¶ 23] Parisien also argues the trial court failed to give a correct closing jury instruction regarding deliberations in the jury room and erred during the trial in allowing admission of prior-act evidence.

[¶ 24] We decline to rule on Pari-sien’s challenge to the jury instruction because Parisien’s trial attorney did not object to the instruction that was given, see, e.g., Jahner, 2003 ND 36, ¶ 12, 657 N.W.2d 266, and because this alleged error is not likely to recur on remand. If the same instruction is offered during a new trial, Parisien’s attorney may object at that time to give the trial court an opportunity to correct any alleged deficiencies the instruction might contain.

[¶ 25] We also decline to determine whether the trial court erred in admitting the challenged prior-act evidence because resolution of the issue is not necessary to the disposition of the appeal and because the issue may not arise on retrial. However, we do note that under N.D.R.Ev. 404(b), evidence of prior bad acts or crimes is generally not admissible unless it is substantially relevant for some purpose other than to point out the defendant’s criminal character and thus to show the probability that the defendant acted in conformity therewith. State v. Osier, 1997 ND 170, ¶ 4, 569 N.W.2d 441. The rule acknowledges the inherent prejudicial effect prior-act evidence may have on the trier of fact. State v. Micko, 393 N.W.2d 741, 744 (N.D.1986). Under N.D.R.Ev. 404(b), the trial court is required to apply a three-step analysis which considers: 1) the purpose for which the evidence is introduced; 2) the evidence of the prior act or acts must be substantially reliable or, clear and convincing; and 3) in criminal cases, there must be proof of the crime charged which permits the trier of fact to establish the defendant’s guilt or innocence independently on the evidence presented, without consideration of the evidence of the prior acts. State v. Christensen, 1997 ND 57, ¶ 6, 561 N.W.2d 631. If the trial court concludes this three-part test has been satisfied, the evidence is not yet automatically admissible, for the court must further determine whether, under N.D.R.Ev. 403, the probative value of the evidence outweighs any possible prejudicial effect. State v. Ramsey, 2005 ND 42, ¶ 26, 692 N.W.2d 498.

[¶ 26] The record in this case reflects the trial court followed the three-part test in determining that the prior-act evidence was admissible. The record does not affirmatively show that the trial court applied the N.D.R.Ev. 403 balancing test to weigh the probative value of the evidence against the possible prejudicial effect to Parisien. Trial courts should place on the record their reasons for admitting or excluding prior-act evidence to show that they have complied with all of the N.D.R.Ev. 404(b) and 403 requirements.

IV

[¶ 27] We reverse the criminal judgments and remand for a new trial.

[¶ 28] CAROL RONNING KAPSNER, MARY MUEHLEN MARING, and DALE V. SANDSTROM, JJ., concur.

[¶ 29] The Honorable DANIEL J. CROTHERS did not participate in this decision.