author: WRIGHT, Judge.

text:
    MINNWEST BANK CENTRAL, Respondent, v. FLAGSHIP PROPERTIES LLC, et al., Appellants, U.S. Small Business Administration, et al., Defendants.
    No. A04-476.
    Court of Appeals of Minnesota.
    Dec. 7, 2004.

      John F. Bonner, III, Robyn K. Johnson, Bonner & Borhart, L.L.P., Minneapolis, MN, for appellants.
    Virginia A. Bell, Mary R. Vasaly, Maslon Edelman Borman & Brand, L.L.P., Minneapolis, MN, for respondent.
    Considered and decided by WRIGHT, Presiding Judge; PETERSON, Judge; and FORSBERG, Judge.

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

   OPINION

WRIGHT, Judge.

To recover outstanding debts, respondent brought a foreclosure by action. Appellants filed counterclaims, alleging defamation, promissory estoppel, breach of contract, and breach of the implied covenant of good faith and fair dealing. The district court ordered summary judgment in favor of respondent and against appellants’ counterclaims. Appellants now challenge the district court’s ruling, arguing that the district court erred when it concluded that (1) a condition precedent in the parties’ commitment letter was not satisfied and, thus, respondent had no duty to provide long-term financing; (2) respondent was entitled to summary judgment on appellants’ counterclaims; and (3) post-judgment interest on a foreclosure decree is calculated at the loan rate, rather than the statutory postjudgment interest rate. Respondent moved to dismiss as moot appellants’ appeal as it relates to the post-judgment interest rate on an unsecured debt. We affirm in part, reverse in part, and remand. We also deny respondent’s motion.

FACTS

At all times relevant to this appeal, appellants Robert Barwick, Janet Barwick, Flagship Properties LLC, and Barwick Manufacturing Company (collectively Flagship) were in the business of building and operating hotels. In the spring of 1997, Flagship sought financing from respondent Minnwest Bank Central (Minn-west) for the construction of a new hotel. Minnwest granted Flagship a construction loan in July 1997 for $1.3 million, to be paid in full by July 24, 1998. The loan agreement was accompanied by a commitment letter, which reiterated the terms of the construction loan and added the following:

As stated earlier, [Minnwest] intends to participate with the Small Business Administration 504 Loan Program whereby $300,000.00 of the construction loan amount will be sold on the secondary market after project completion at the then prevailing rate. The remaining balance will be financed by the Bank. The terms of this will be an amortization of at least ten years (120 equal payments) at a five-year fixed rate commitment ....

Flagship subsequently applied for a Section 504 loan in the amount of $311,000 and, in September 1997, received preliminary authorization from the United States Small Business Administration (SBA). The preliminary authorization provided that, before final approval, Flagship must certify “that no unremedied material adverse change has occurred in the condition of [Flagship] ... since the date of application which would endanger [Flagship’s] ability to meet the debt service [for the loan].”

Flagship completed construction and opened its hotel in February 1998. The SBA subsequently received financial statements indicating that the hotel was operating at a loss. As a result, the SBA found a “material adverse change,” and in March 1999, it declined to proceed with the Section 504 loan until Flagship could demonstrate positive cash flow.

Until mid-2001, the parties agreed to several extensions on the deadline for the repayment of the Minnwest construction loan. The extensions were based on the parties’ expectation that Flagship would eventually generate positive cash flow from the hotel and, thus, would satisfy the requirements to receive the Section 504 loan. But in the meantime, Minnwest did not provide long-term financing for the “remaining balance” of the construction loan.

Minnwest informed Flagship in April 2001 that its construction loan had been “classified” and that it would have to seek long-term financing for the loan elsewhere. Flagship solicited several other institutions but was unable to procure financing, purportedly because it disclosed that Minn-west had “classified” the construction loan.

Minnwest formally demanded payment of the construction loan in full in July 2002 and subsequently brought an action in foreclosure to recover this and other debts. Flagship brought counterclaims, alleging defamation, promissory estoppel, breach of contract, and breach of the implied covenant of good faith and fair dealing. Minn-west then moved for summary judgment on the foreclosure action and on Flagship’s counterclaims. The district court granted Minnwest’s motion, dismissed Flagship’s counterclaims, and ordered judgment for the amount due on the construction loan. The district court further ordered that, following the entry of judgment, interest would continue to accrue at a rate equal to that of the original loan. This appeal followed.

ISSUES

I. Did the district court err in holding that Minnwest had no duty to provide long-term financing for the construction loan?

II. Are there sufficient issues of material fact to defeat summary judgment on Flagship’s counterclaims?

III. Did the district court err in awarding postjudgment interest at the loan rate instead of the statutory rate?

ANALYSIS

Flagship initially disputes the district court’s determination that Minnwest had no duty to provide long-term financing and that Flagship’s counterclaims lacked merit.

When reviewing a summary judgment, we determine whether any genuine issue of material fact exists and whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). In doing so, we view the evidence in the light most favorable to the party against whom summary judgment was granted. Fabio v. Bellomo, 604 N.W.2d 758, 761 (Minn.1993). A genuine issue for trial must be established by substantial evidence. DLH, Inc. v. Russ, 566 N.W.2d 60, 69-70 (Minn.1997). Summary judgment is appropriate when “the record taken as a whole could not lead a rational trier of fact to find for the non-moving party.” Id. at 69 (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986)).

I.

Flagship challenges the district court’s determination that Minnwest’s duty to provide long-term financing was subject to an unsatisfied condition precedent. Flagship contends that the contract does not contain a condition precedent. In the alternative, Flagship implies that, because Minnwest improperly frustrated the satisfaction of the condition, Minnwest is not excused from its duty to perform.

A condition precedent is an event that must occur before a party is required to perform a certain contractual duty. Carl Bolander & Sons, Inc. v. United Stockyards Corp., 298 Minn. 428, 433, 215 N.W.2d 473, 476 (1974). “[N]o particular code words [are] needed to form an express condition.” Id. (citing 5 Samuel Williston, Williston on Contracts § 671 (3d ed. 1961)). In Aslakson v. Home Sav. Ass’n, 416 N.W.2d 786 (Minn.App.1987), we considered the effect of a contract requiring a party to establish credit as a condition precedent. The controversy involved a sales contract, which provided in relevant part, “This offer is contingent upon buyer being able to assume the loan.” Id. at 787. We concluded that this language created a condition precedent. Id. at 789. Because the purchaser was unable to demonstrate acceptable credit, the seller had no obligation to complete the sale. Id. at 790.

The Minnesota Supreme Court in 451 Corp. v. Pension Sys. for Policemen & Firemen, 310 N.W.2d 922 (Minn.1981), reached the same conclusion based on a more complex set of facts. The owners of an office building had a short-term construction loan and sought long-term financing from a state pension fund. Id. at 922. The parties executed a contract, which stated that the loan was “subject to approval of the documents as to legality and form” by a state official. Id. at 923. On review of the contract, that state official found an illegal amortization and rejected the loan. Id. The supreme court concluded that, because the approval condition was not met, the pension fund had no obligation to supply the loan. Id. at 924; see also Nat’l Union Fire Ins. v. Schwing America, Inc., 446 N.W.2d 410, 412 (Minn.App.1989) (“[A] breach of contract does not occur when a contract is conditioned on third-party approval and the approval is not received.” (quoting Aslaksan, 416 N.W.2d at 789)).

Here, the July 1997 commitment letter provided in relevant part:

[Minnwest] intends to participate with the Small Business Administration 504 Loan Program whereby $300,000.00 of the construction loan amount will be sold on the secondary market after project completion at the prevailing rate. The remaining balance will be financed by the Bank.

(Emphasis added.) This language does not provide an unqualified promise to supply long-term financing. Rather, it indicates that Flagship agreed to obtain a portion of long-term financing from a Section 504 loan. Only after this event would the bank have a duty to provide long-term financing for the “remaining balance.” The letter explicitly contemplated that Flagship would qualify for credit from the SBA. Thus, it is indistinguishable from other contracts in which conditions precedent require third-party approval. Bee 451 Corp., 310 N.W.2d at 924. Because the SBA never authorized a Section 504 loan, the condition precedent was not satisfied. Accordingly, Minnwest had no duty to provide long-term financing.

Flagship maintains that the district court relied on inadmissible hearsay to evaluate whether the condition precedent was satisfied. It alleges that the only proof of an unsatisfied condition precedent was a statement, indirectly from the SBA to officers at Minnwest, directing Minn-west not to close the Section 504 loan. But as the nonmoving party on a motion for summary judgment, it was Flagship’s burden to establish by substantial evidence that there was a genuine issue for trial. DLH, Inc., 566 N.W.2d at 69-70. Assuming for the purpose of our analysis that the statement was not admissible, there was no evidence that the Section 504 loan had in fact closed, and thus, no duty to finance the remaining balance. Because there was no genuine issue of fact as to whether the condition precedent was satisfied, Flagship’s argument on this point is unavailing.

Flagship contends that Minnwest interfered with the process for obtaining the Section 504 loan, thereby preventing the occurrence of the condition precedent. If a party to a contract unjustifiably prevents the occurrence of a condition precedent, then that party’s duty to perform is not excused. In re Hennepin County 1986 Recycling Bond Litigation, 540 N.W.2d 494, 502-03 (Minn.1995). But prevention may be justified by the pecuniary circumstances of the other party. See Nodland v. Chirpich, 307 Minn. 360, 366, 240 N.W.2d 513, 516 (1976) (quoting Restatement of Contracts § 295 (1932)).

To establish interference, Flagship alleges that the SBA sent Minnwest a letter to proceed with the Section 504 loan. This letter, however, is not part of the record. We assume for the purpose of our analysis that Minnwest declined to proceed. Even when the facts are viewed in the light most favorable to Flagship, the only reasonable conclusion is that Minnwest declined to proceed because of Flagship’s poor financial condition. As such, Minnwest’s prevention of the condition precedent, if indeed this occurred, was justified and not a bar to summary judgment on behalf of Minnwest.

II.

Flagship also challenges the summary judgment in favor of Minnwest, dismissing Flagship’s counterclaims for defamation, promissory estoppel, breach of contract, and breach of the covenant of good faith and fair dealing.

A.

Defamation ordinarily is established by proof of a statement communicated to someone other than the claimant that is false and that harmed the claimant’s reputation and esteem in the community. Weinberger v. Maplewood Review, 668 N.W.2d 667, 673 (Minn.2003). Under limited circumstances, a defamation claim may be established even though the statement was communicated only to the claimant. If the claimant is compelled to communicate the statement to another, and this duty is foreseeable to the original declarant, then the declarant may be liable for defamation. Lewis v. Equitable Life Assurance Soc’y, 389 N.W.2d 876, 888 (Minn.1986).

Flagship asserts that it was compelled to disclose Minnwest’s statement that the construction loan was “classified.” For the purpose of our analysis, viewing the record in the light most favorable to Flagship, we presume that Minnwest’s statement was false and that Flagship was compelled to publish the statement.

The dispositive issue is whether Minnwest’s statement is entitled to a qualified privilege, which provides a complete defense to common-law defamation. A qualified privilege is applied as a matter of law, in certain contexts when a candid statement is encouraged. Bol v. Cole, 561 N.W.2d 143, 149 (Minn.1997). A statement is protected by a qualified privilege if it is made in good faith, for a proper reason, and is based on probable cause. Keuchle v. Life’s Companion P.C.A, Inc., 653 N.W.2d 214, 220 (Minn.App.2002).

Minnesota authorities have long established that the statements of a financial officer regarding the creditworthiness of another are protected by a qualified privilege. See Froslee v. Lund’s State Bank of Vining, 131 Minn. 435, 437-38, 155 N.W. 619, 620 (1915) (holding that bank’s statements that buyer was “financially weak and ... in the habit of borrowing from farmers” were privileged); Lowry v. Vedder, 40 Minn. 475, 475, 42 N.W. 542, 542 (1889) (noting that commercial agency’s reports containing statements injuring plaintiffs credit are privileged as long as made in good faith). Here, Minnwest classified the loan and explained its status based on Flagship’s negative cash flow. Because this statement about Flagship’s creditworthiness was made in good faith, for a proper reason, and was based on probable cause, Minnwest’s statement is entitled to qualified-privilege protection.

Malice will defeat a qualified privilege when a statement is based on ill will, improper motive, or an intent to injure the claimant without cause. Bauer v. State, 511 N.W.2d 447, 449 (Minn.1994). But malice cannot be inferred from a dispassionate statement based on reasonable information. See, e.g., Buchanan v. State, Dep’t of Health, 573 N.W.2d 733, 738 (Minn.App.1998) (holding that state department’s correction orders drafted during course of work duties contained no evidence of malice), review denied, (Minn. Apr. 30, 1998); Michaelson v. Minn. Mining & Mfg. Co., 474 N.W.2d 174, 182 (Minn.App.1991), aff'd, 479 N.W.2d 58 (Minn.1992) (holding that letter from employer candidly addressing concerns about employee’s job performance lacked evidence of malice).

t)n a motion for summary judgment, a claim of malice will not defeat a qualified privilege in the absence of some facts demonstrating the animosity of the adverse party. Wallin v. State, Dep’t of Corrections, 598 N.W.2d 393, 402-03 (Minn.App.1999), review denied (Minn. Oct. 21, 1999). Flagship failed to argue the existence of any facts demonstrating that Minnwest’s statement was motivated by ill will or improper motive. Because the record lacked any evidence of malice to overcome the application of a qualified privilege to Minnwest’s statement, the district court did not err in granting summary judgment in favor of Minnwest on Flagship’s defamation counterclaim.

B.

Promissory estoppel provides an equitable remedy to parties that lack recourse on an enforceable contract. Martens v. Minn. Mining & Mfg. Co., 616 N.W.2d 732, 746 (Minn.2000). If a clear and definite promise is made to a promis-ee, the promisor intends to induce reliance on the promise, and the promisee reasonably relies on the promise, then the promise is enforceable to prevent an injustice. Heidbreder v. Carton, 645 N.W.2d 355, 371 (Minn.2002). The district court determined that, because Flagship did not demonstrate that Minnwest made a “clear and definite promise,” Flagship’s promissory estoppel counterclaim failed.

We have previously considered whether a promise of credit is sufficiently clear to support an action for promissory estoppel. In Norwest Bank Minn., N.A. v. Midwestern Mach. Co., a surviving partner refused to purchase his deceased partner’s interest in a business unless a bank promised to supply a $5 million line of credit. 481 N.W.2d 875, 877 (Minn.App.1992), review denied (Minn. May 15, 1992). Purportedly in reliance on the bank’s promise, the partner purchased the entire business, which then defaulted on its debts. Id. at 877-78. We reversed summary judgment, concluding that the partner raised a genuine issue of material fact as to whether the bank had made a clear and definite promise. Id. at 880.

These facts contrast with Froelich v. Aspenal, Inc., 369 N.W.2d 37 (Minn.App.1985), which involved a corporation that owed significant debt to its former controlling shareholder. When that shareholder threatened action to recover the debt, a corporate officer responded, “I’ll personally guarantee you that you’ll get your money when it’s due.” Id. at 39. On review, we held that the corporate officer had not made a clear promise to personally secure the loan. Id.

The Minnesota Supreme Court considered similar issues in Nicollet Restoration, Inc. v. City of St. Paul, 533 N.W.2d 845 (Minn.1995). To purchase property, a developer requested $3.6 million in financing from the city. Id. at 847. The city’s counsel issued a “memorandum of understanding,” and the city passed a resolution that preliminarily approved the financing. Id. But the developer and the city never settled on a specific amount to be financed. Id. The supreme court affirmed the entry of summary judgment in favor of the city, concluding that reliance on the promise was not reasonable when the proposal was not finalized. Id. at 848.

Flagship summarily contends that, between 1997 and 2002, Minnwest promised to provide long-term financing for the construction loan. It also asserts that, in March 1999, after the SB A rejected financing for the Section 504 loan, Minnwest promised to supply long-term financing and “keep all of it right here, in house.” These facts, however, do not evince a clear, definite promise. When the SBA loan was rejected, Minnwest may have responded with vague assurances of additional financing, see Froelich, 369 N.W.2d at 39, but it did not produce a clear and definite coun-terproposal, see Nicollet Restoration, Inc., 533 N.W.2d at 848. Flagship’s promissory estoppel counterclaim, therefore, does not state sufficient facts to survive summary judgment.

C.

Based on its interpretation of the July 1997 commitment letter, Flagship also asserts a counterclaim for breach of contract. Because we have previously concluded that Minnwest has no duty to perform according to the terms in the letter, Flagship has no cause for relief. Summary judgment was, therefore, correctly ordered by the district court on Flagship’s breach-of-contract counterclaim. See Gunderson v. Alliance of Computer Prof'ls, Inc., 628 N.W.2d 173, 182 (Minn.App.2001), review granted (Minn. July 24, 2001) and appeal dismissed (Minn. Aug. 17, 2001).

D.

Flagship’s remaining counterclaim asserts a violation of the covenant of good faith and fair dealing. This covenant ordinarily will be implied between the parties to a contract. In re Hennepin County 1986 Recycling Bond Litigation, 540 N.W.2d at 502. When parties take action with respect to a contract, this covenant bars a party from unjustifiably hindering the other party’s performance. Id. To establish a violation of this covenant, a party must establish bad faith by demonstrating that the adverse party has an ulterior motive for its refusal to perform a contractual duty. Sterling Capital Advisors, Inc. v. Herzog, 575 N.W.2d 121, 125 (Minn.App.1998). Again, because we have concluded that Minnwest had no contractual duty to perform, the district court did not err in ordering summary judgment on this counterclaim.

III.

Flagship also contends that, following the entry of judgment pursuant to the foreclosure decree, the district court erroneously ordered payment of the construction-loan rate of interest, rather than the postjudgment statutory interest rate, up to the time of the foreclosure sale. The determination of postjudgment interest is a legal issue, which we review de novo. See C.J. Duffey Paper Co. v. Reger, 588 N.W.2d 519, 527 (Minn.App.1999).

Because postjudgment interest is controlled by statute, we apply principles of statutory interpretation. The object of statutory interpretation is to give effect to the intention of the legislature. State v. Koenig, 666 N.W.2d 366, 372 (Minn.2003). If the meaning of a statute is clear, then it shall be given effect according to its plain language. Molloy v. Meier, 679 N.W.2d 711, 723 (Minn.2004). But if a statute is reasonably susceptible of more than one meaning, we apply principles of statutory construction to determine the legislature’s intent. Gomon v. Northland Family Physicians, Ltd., 645 N.W.2d 413, 416 (Minn.2002).

Postjudgment interest is governed by Minn.Stat. § 549.09, subd. 2 (2002), which provides in relevant part: “During each calendar year, interest shall accrue on the unpaid balance of the judgment or award from the time that it is entered or made until it is paid [at the statutory rate].” If an ordinary debt is reduced to a money judgment, postjudgment interest is computed at the statutory rate, not the contract rate. Reger, 588 N.W.2d at 527. The operative question here is whether, in a foreclosure by action, the debt is reduced to a judgment by the foreclosure decree or the foreclosure sale.

In a foreclosure by action, judgments are governed by Minn.Stat. § 581.03 (2002), which provides:

Judgment shall be entered, under the direction of the court, adjudging the amount due, with costs and disbursements, and the sale of the mortgaged premises, or some part thereof, to satisfy such amount, and directing the sheriff to proceed to sell the same according to the provisions of law relating to the sale of real estate on execution, and to make report to the court.

Statutes involving judgments are in pari materia and shall be construed in light of one another. See Bolstad v. Paul Bunyan Oil Co., 215 Minn. 166, 169, 9 N.W.2d 346, 348 (1943). The postjudgment interest statute requires that interest accrue “from the time that [the judgment] is entered,” Minn.Stat. § 549.09, subd. 2, and the foreclosure statutes consistently describe the foreclosure decree as a judgment entered, Minn.Stat. § 581.03. Therefore, in a foreclosure by action, postjudgment interest accrues at the statutory rate from the foreclosure decree, not the foreclosure sale.

Our conclusion is consistent with the analysis of other authorities. According to the historical rule expressed by courts in equity, when a debt is secured by a mortgage, the contract terminates at the foreclosure decree, and interest is thereafter calculated at the statutory rate. See Beeler v. Am. Trust Co., 28 Cal.2d 435, 170 P.2d 439, 442 (1946); Whitehurst v. Camp, 699 So.2d 679, 683-84 (Fla.1997); 55 Am. Jur. 2d Mortgages § 711 (1996). Although the Minnesota Supreme Court has not expressly adopted this rule, the supreme court has described a foreclosure decree as a final judgment when determining its effect on other proceedings. Smude v. Amidon, 214 Minn. 266, 269, 7 N.W.2d 776, 778 (1943) (mechanic’s lien); Fiman v. Hagedorn, 185 Minn. 582, 585, 242 N.W. 292, 294 (1932) (bankruptcy).

To support its argument that the contract rate applies up to the foreclosure sale, Minnwest relies substantially on Minn.Stat. § 581.10 (2002). This statute, which controls postsale rights of redemption in a foreclosure by action, provides in relevant part:

The mortgagor ... within the time specified [for postsale redemption], after the date of the order of confirmation, may redeem the premises sold, or any separate portion thereof, by paying the amount bid therefor, with interest thereon from the time of sale at the rate provided to be paid on the mortgage debt, not to exceed eight percent per annum....

Because this statute calculates the amount for postsale redemption using the contract rate, Minnwest asserts that the contract rate should also apply to the period from the foreclosure decree to the foreclosure sale.

Of the 23 states that provide a postsale statutory right of redemption, our research discloses eight states that apply the contract rate of interest for the period from the foreclosure sale to the redemption, if such occurs. See generally 4 Richard R. Powell, Poioell on Real Property § 37.46 (2004). Two of these states, Illinois and Maine, have authority that dictates the rate of interest for the period from the foreclosure decree to the foreclosure sale. Both states describe the foreclosure decree as a judgment and, as part of a unitary statutory scheme, require that the contract rate run from the foreclosure decree up to the sale and thereon to post-sale redemption, if such occurs. See 735 Ill. Comp. Stat. Ann. 5/15-1506, -1603 (West 2003); Me.Rev.Stat. Ann. tit. 14, §§ 6204, 6322 (West 2003). Of the 14 states that apply a postjudgment rate of interest for the period from the foreclosure sale to the redemption, only California has authority dictating the rate of interest for the period from the foreclosure decree to the foreclosure sale. See Beeler, 170 P.2d at 442. The California Supreme Court held in Beeler that, unless the mortgage note expressly reserves a contract rate for this period, the statutory rate will run from the foreclosure decree to the foreclosure sale. Id.; cf. Ex parte Aurora Fed. Sav. & Loan Ass’n, 223 Md. 135, 162 A.2d 739, 741-42 (1960) (adopting a similar rule in a jurisdiction without postsale redemption); ERHAL Holding Corp. v. Rusin, 229 A.D.2d 417, 645 N.Y.S.2d 93, 95 (1996) (same).

Based on the foregoing survey, we observe that, in the rare case where a state expressly dictates the rate of interest in a foreclosure proceeding, the same rate typically applies to both the period before and after the foreclosure sale. Two states (Illinois and Maine) have opted for the contract rate, and one state (California) has opted for the statutory rate. But in each of these states, interest is governed throughout by a uniform, unambiguous scheme.

Minnesota’s foreclosure statutes fail to supply a comprehensive scheme for the calculation of interest, especially for the period between the foreclosure decree and the foreclosure sale. Absent statutory guidance, we distinguish between the legal obligations imposed by a judgment and the equitable interests served by the postsale rights of redemption. See 4 Powell, supra, § 37.49. Thus, relying solely on the plain meaning of the relevant statutes affecting judgments, we apply the statutory post-judgment interest rate upon entry of the foreclosure decree. Although Minnwest proposes what may be a more consistent approach to the calculation of interest in foreclosure proceedings, “courts are not free to substitute amendment for construction and thereby supply ... legislative omissions.” Underwood Grain Co. v. Harthun, 563 N.W.2d 278, 281 (Minn.App. 1997).

Here, the district court applied the contract rate of interest for the period from the foreclosure decree to the foreclosure sale. Because we conclude that the post-judgment statutory rate of interest applies for this period, we reverse this aspect of the district court’s ruling and remand with instructions to apply the postjudgment statutory rate of interest from the date of the foreclosure decree.

DECISION

Because the parties’ commitment letter contained a condition precedent that was not satisfied, Minnwest had no contractual duty to provide Flagship with long-term financing. Flagship is otherwise unable to establish a genuine issue of material fact precluding summary judgment on its counterclaims. Accordingly, the district court properly ordered summary judgment for Minnwest. But when Flagship’s debts were reduced to a judgment by the foreclosure decree, the district court erroneously applied postjudgment interest at the contract rate, rather than the statutory rate. We affirm in part, reverse in part, and remand to correct the calculation of interest.

Affirmed in part, reversed in part, and remanded; motion denied.

      . Flagship submitted its application for the SBA loan through Minnwest, which in turn relayed the application to the Minnesota Business Finance Corporation (MBFC). The MBFC is a nonprofit “certified development company” that administers the Section 504 loan program on the SBA’s behalf. See generally 13 C.F.R. § 120.2(c) (2004) (requiring that a "certified development company” provide final portion of long-term financing with 504 loan made from debenture proceeds and guarantied by the SBA). The SBA is the final arbiter for Section 504 loans.

      . Neither the parties nor the district court specifically itemized how postjudgment interest would be calculated, but the construction loan provided for a variable interest rate of .75 percent over “Norwest Base.” Based on the judgment, which determined that $1,359,323.56 was the amount due and assessed postjudgment interest of $249.42 per day, the district court ordered simple annual interest of approximately 6.70 percent. Regardless of whether these figures are precisely accurate, neither party contests on appeal that the district court applied the contract interest rate.

      . Because we conclude that Minnwest had no-duty to perform in accordance with the terms of the commitment letter, we need not address Minnwest's alternative argument that the commitment letter was not a contract.

      . Although Flagship also brought a counterclaim for unjust enrichment, Flagship does not raise that issue on appeal. We, therefore, do not address it here.

      . The implied covenant of good faith and fair dealing does not apply to sales contracts, Sterling Capital Advisors, Inc. v. Herzog, 575 N.W.2d 121, 125 (Minn.App.1998), or to employment contracts, Lee v. Metro. Airport Comm’n, 428 N.W.2d 815, 822 (Minn.App.1988).

      . In its brief, Minnwest cited Minn.Stat. § 580.23, subd. 1 (2002), which relates to foreclosures by advertisement. We note that both Minn.Stat. §§ 580.23 and 581.10 provide identical methods for calculating the amount for postsale redemption for foreclosure by action and foreclosure by advertisement.

      . See 735 Ill. Comp. Stat. Ann. 5/15— 1603(d)(l)(vi) (West 2003); Iowa Code § 628.13 (2001); Me. Rev. Stat. Ann. tit. 14, § 6204 (West 2003); Mich. Comp. Laws Ann. § 600.3140 (West 2000); Minn. Stat. § 581.10 (2002); Mo. Ann. Stat. § 443.410 (West 2000); N.D. Cent. Code § 28-24-02 (1991); Heimerdinger v. Heimerdinger, 299 Mich. 149, 299 N.W. 844, 846 (1941) (holding that contract rate of interest applied at redemption); Lang v. Bank of Steele, 415 N.W.2d 787, 791 n. 2 (N.D.1987) (citing N.D. Cent. Code § 28-24-02).

      . See Alaska Stat. § 09.35.250 (Michie 2002); Ariz. Rev. Stat. Ann. § 12-1285 (West 2003); Ark. Code Ann. § 18-49-106 (Michie 2003); Cal. Civ. Proc. Code § 729.060(b)(4) (West Supp. 2004); Kan. Stat. Ann. § 60-2414(d) (1994); Ky. Rev. Stat. Ann. § 426.220 (Michie 1992); Mont. Code Ann. § 25-13-802 (2003); N.M. Stat. Ann. § 39-5-18(A)(1) (Michie 1991 & Supp. 2004); Or. Rev. Stat. § 18.582(2) (2003); Tenn. Code Ann. § 66-8-110 (2004); Utah R. Civ. P. 69(j)(3); Wash. Rev. Code Ann. § 6.23.020(2) (West 1995 & Supp. 2005); Wyo. Stat. Ann. § 1-18-103(a) (Michie 2003); Beavers v. Transamerica Fin. Servs., Inc., 474 So.2d 1105, 1107-08 (Ala.1985); cf. Fed. Land Bank of Wichita v. Burgett, 97 N.M. 519, 641 P.2d 1066, 1067-68 (1982) (holding that, when calculating interest on amount for right of redemption, no interest is assessed from decree to sale and statutory interest is assessed thereafter).

      . Minnwest also moves to "dismiss as moot” Flagship's appeal with respect to the rate of postjudgment interest on an unsecured debt. When Minnwest brought action in foreclosure to recover its debts against Flagship, one debt was not secured by a mortgage. But the district court disposed of all the debts in the foreclosure decree, uniformly ordering judgment with interest at the contract rate. With respect to the unsecured debt, the court administrator entered judgment with interest at the statutory rate, notwithstanding the district court's order. The parties’ arguments on appeal have addressed only the postjudgment rate of interest on a debt secured by a mortgage. Our resolution of the matters argued has no effect on postjudgment interest for an unsecured debt. We now conclude that the court administrator correctly entered judgment on the unsecured debt with post-judgment interest at the statutory rate. See Reger, 588 N.W.2d at 527. Because we reach this issue on its merits, Minnwest's motion to dismiss as moot is denied.


source: Caselaw Access Project

author: HUDSON, Judge.

license: Public Domain

text:
    STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Respondent, v. Naima M. AHMED, Appellant.
    No. A04-310.
    Court of Appeals of Minnesota.
    Dec. 7, 2004.

      Kay Nord Hunt, Lommen, Nelson, Cole & Stageberg, P.A., Minneapolis, MN; and Patrick M. Conlin, Brett W. dander & Associates, St. Paul, MN, for respondent.
    Rhett A. McSweeney, McSweeney & Fay, P.L.L.P., Minneapolis, MN, for appellant.
    Considered and decided by HUDSON, Presiding Judge; KALITOWSKI, Judge; and KLAPHAKE, Judge.
   OPINION

HUDSON, Judge.

Appellant challenges the district court’s decision (1) quashing an arbitrator’s order concerning appellant’s attendance at a future independent medical examination; and (2) dismissing appellant’s Minnesota no-fault claim for unreimbursed medical expenses. Because we conclude that the arbitrator’s order did not constitute an “award” subject to vacation by the district court under Minn.Stat. § 572.19, subd. 1(3) (2002), the district court lacked jurisdiction to consider the matter and we vacate the judgment accordingly.

FACTS

Appellant Naima M. Ahmed was injured in an automobile accident on May 24, 2002. Following the accident, appellant received medical and chiropractic treatment for her injuries. Respondent State Farm Insurance Company scheduled two independent medical examinations (IMEs) to determine whether appellant’s injuries were related to the car accident. Appellant failed to attend both IMEs, and respondent suspended appellant’s no-fault benefits. Appellant then petitioned for arbitration, seeking reimbursement under her no-fault insurance policy for the medical care she received.

The arbitrator set a hearing date, and respondent scheduled an IME for appellant, pursuant to Minn.Stat. § 65B.56, subd. 1 (2002). Appellant failed to attend the IME and respondent requested that appellant’s claim be dismissed for failure to attend'an IME. In response, appellant’s attorney notified the arbitrator that appellant was unable to attend the IME because she was in London for a family emergency, and that she would return in two weeks and attend an IME. The arbitrator continued the hearing to August 5, 2003, and ordered appellant to attend the next scheduled IME.

Respondent scheduled a second IME, in conjunction with the arbitration proceedings. Approximately one week before the second IME appointment, appellant’s attorney notified respondent that appellant would be unable to attend because she had not yet returned to the United States. Respondent rescheduled the IME, and simultaneously requested that the arbitrator dismiss appellant’s claim based on her failure to comply with the arbitrator’s order requiring her to submit to the next scheduled IME. Appellant failed to attend the rescheduled IME, and respondent renewed its request that the arbitrator dismiss appellant’s claim. At the August 5, 2003, hearing, the arbitrator did not dismiss appellant’s claim, but instead took evidence concerning appellant’s failure to attend any of the scheduled IMEs. Following the hearing, the arbitrator ordered appellant to attend the next scheduled IME and warned that failure to attend the IME would result in an award of costs against appellant. The arbitrator also continued the hearing for a second time, until October 14, 2003.

Respondent then sought relief in the district court from the arbitrator’s August 5, 2003 order, alleging that the arbitrator exceeded his powers under Minn.Stat. § 572.19, subd. 1(3) (2002). The district court vacated the arbitrator’s order, dismissed appellant’s claim for unreimbursed medical expenses, and awarded respondent costs. This appeal follows.

ISSUE

Is an arbitrator’s interlocutory order concerning compliance with independent medical examinations subject to district court review under Minn.Stat. § 572.19, subd. 1(3) (2002), prior to the completion of arbitration proceedings and the issuance of an award?

ANALYSIS

Appellant argues that in a matter involving the arbitration of no-fault insurance benefits, the district court lacks jurisdiction to review an arbitrator’s “discovery ruling” because it does not constitute an “award” under Minn.Stat. § 572.19 (2002). Respondent contends that the arbitrator’s discovery order constitutes an “award” under Minn. R. No-Fault Arb. 32, because the order provided appellant with a clear remedy — that she be permitted to attend the next IME and that the arbitration hearing be continued. We find no merit in respondent’s position.

This court reviews de novo the existence of subject-matter jurisdiction. Olson v. Am. Family Mut. Ins. Co., 636 N.W.2d 598, 601 (Minn.App.2001). Upon application by a party, the district court shall vacate an award when the arbitrator exceeds his power. Minn.Stat. § 572.19, subd. 1(3); see Minn. R. No-Fault Arb. 38 (applying the provisions of Minn.Stat. § 572.19 to a vacation of an award issued under the rules of procedure for no-fault arbitration). Minn.Stat. § 65B.525, subd. 1 (2002), provides that the American Arbitration Association has jurisdiction to arbitrate no-fault disputes when the claim at the commencement of arbitration is $10,000 or less. Minn.Stat. § 65B.525, subd. 2, also sets out rules that govern such arbitrations. One specific rule, Minn. R. No-Fault Arb. 32, provides that an award includes “any remedy or relief that the arbitrator deems just and equitable consistent with the Minnesota No-Fault Act.”

Here, it is undisputed that the arbitrator’s order requiring appellant to submit to the next scheduled IME was an interlocutory order involving discovery matters. See Minn.Stat. § 65B.56, subd. 1 (2002) (authorizing discovery of condition of claimant); see also Minn. R. No-Fault Arb. 12 (discovery rule authorizing arbitrator to order insured to submit to medical examination). Therefore, respondent cannot obtain judicial review of the arbitrator’s discovery order because it is not an “award” under Minn.Stat. § 572.19.

Likewise, we reject respondent’s argument that the arbitrator’s discovery order constitutes an award based on Minn. R. No-Fault Arb. 32, entitled “scope of award.” That rule provides “[t]he arbitrator may grant any remedy or relief that the arbitrator deems just and equitable consistent with the Minnesota No-Fault Act. The arbitrator may, in the award, include arbitration fees, expenses, rescheduling fees and compensation....” Minn. R. No-Fault Arb. 32. While that rule grants broad authority to arbitrators to grant any remedy or relief they deem necessary in the award, this does not mean that an interlocutory discovery order constitutes an award. Rather, the rule empowers arbitrators with great leeway in fashioning fair and equitable awards.

At oral argument respondent’s counsel suggested that if an “award” must be final to fall within Minn. R. No-Fault Arb. 32, then the legislature would have preceded the word “award” in the statute with the word “final.” We disagree. An “award” is “final.” Indeed, “award” is defined as “[a] final judgment or decision, esp[ecially] one by an arbitrator or by a jury assessing damages.” Black’s Law Dictionary 132 (7th ed.1999); see also Hoit v. Berger-Crittenden Co., 81 Minn. 356, 358, 84 N.W. 48, 49 (1900) (“[a]n award of arbitrators must be final and certain, and so determine the matter submitted that an action between the same parties will not after-wards lie in regard to it, or the award is void”). Thus, there is no need for “final” to precede “award” in the statute because an award is final.

Finally, we note that the cases respondent cites in support of its position are distinguishable because none of them address whether an arbitrator’s discovery order may constitute an award. See Yasuda Fire & Marine Ins. Co. of Eur., Ltd. v. Cont’l Cas. Co., 37 F.3d 345, 348-49 (7th Cir.1994) (order to post security for costs); Pac. Reinsurance Mgmt. Corp. v. Ohio Reinsurance Corp., 935 F.2d 1019, 1023-25 (9th Cir.1991) (“Interim Final Order” requiring contribution to escrow account); Island Creek Coal Sales Co. v. City of Gainesville, 729 F.2d 1046, 1049 (6th Cir.1984) (order for specific performance of a contract), abrogated on other grounds, Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193, 196-97, 120 S.Ct. 1331, 1335, 146 L.Ed.2d 171 (2000).

Respondent’s arguments are creative, but they are unsupported by the prevailing law. Moreover, to hold that a discovery order constitutes an award would undermine the fundamental principles of efficiency and effectiveness in arbitration by stripping arbitrators of the authority to make decisions regarding discovery matters and by allowing parties to appeal such orders to the district court before an award has been issued. Allowing review of this type of interlocutory order also contradicts the principle that a district court has limited review of arbitration awards. See Aaron v. Illinois Farmers Ins. Group, 590 N.W.2d 667, 669 (Minn.App.1999) (holding appeal from an arbitration decision is subject to an “extremely narrow standard of review” and that the reviewing court must exercise “every reasonable presumption” in favor of the arbitration award’s finality and validity). To hold otherwise would denigrate the longstanding principle that district courts have limited jurisdiction to deal with arbitration matters.

Finally, we note that respondent is not without a remedy. Following the issuance of an arbitration award, respondent may pursue its statutory remedies in the district court. Because we hold that the district court lacked jurisdiction to review the arbitrator’s order, we need not reach respondent’s claim that the arbitrator exceeded his authority in refusing to dismiss appellant’s claim.

DECISION

An interlocutory order dealing with discovery matters is not an award under Minn.Stat. § 572.19, subd. 1(3) (2002), and therefore the district court lacked jurisdiction to review the arbitrator’s order.

Vacated.


author: TOUSSAINT, Chief Judge.

text:
    John H. RYDBERG, Respondent, v. Kevin GOODNO, Commissioner of Human Services, Appellant.
    No. A04-1087.
    Court of Appeals of Minnesota.
    Dec. 7, 2004.

      Lisbeth J. Nudell, Minneapolis, MN, for respondent John H. Rydberg.
    Mark Lindahl, Assistant Blue Earth County Attorney, Mankato, MN, for respondent Blue Earth County.
    Mike Hatch, Attorney General, Michael E. Burns, Assistant Attorney General, St. Paul, MN, for appellant commissioner.
    Considered and decided by TOUSSAINT, Chief Judge; PETERSON, Judge; and KLAPHAKE, Judge.
   OPINION

TOUSSAINT, Chief Judge.

This is an appeal by the Commissioner of Human Services from a judicial appeal panel decision, which granted pass-eligible status to respondent John H. Rydberg, who is subject to an indeterminate commitment as a psychopathic personality. The commissioner contends that the judicial appeal panel erred as a matter of law (1) in requiring the commissioner to show by clear and convincing evidence that Rydberg should not be granted pass-eligible status after Rydberg established a prima facie case for being placed on pass-eligible status; and (2) in granting Rydberg pass-eligible status. Because the appeal panel did not err in its burden of proof determination and because the evidence supports the decision, we affirm.

FACTS

Respondent John Rydberg has a long history of engaging in violent sexual assaults. In 1969, he was convicted of attempted rape. In 1975, he was convicted of forced penile-oral penetration. In 1976, following two violent sexual assaults committed at gunpoint, he was convicted of rape, attempted rape, sexual perversion, and operating a motor vehicle without the owner’s consent.

Rydberg was then committed to a sex offender treatment program in Wisconsin. He escaped in 1977 and in 1979. During the latter escape, he sexually assaulted a woman in Blue Earth County at knifepoint in the presence of her three children. He cut her thighs and clothes with the knife, threatened her and her children, and tried to strangle her. Rydberg was subsequently convicted of second-degree criminal sexual conduct and aggravated robbery.

In 1993, following his incarceration, Rydberg was committed to the Minnesota Sex Offender Program (MSOP) as a psychopathic personality for an indeterminate period of time. Although Rydberg initially refused to participate in treatment, he began to do so in 1998. During treatment, Rydberg self-reported dozens of additional rapes and sexual assaults. He then successfully completed a four-phase inpatient sex offender treatment program at MSOP’s Moose Lake facility. On July 22, 2002, Rydberg was transferred to MSOP’s St. Peter facility to begin the “transition phase” of his treatment.

When Rydberg arrived at St. Peter, he was initially escorted and observed by staff while he was working, but he was later allowed to engage in unsupervised activities on the grounds and at work. Additionally, Rydberg was allowed to go off campus on supervised trips. All of these activities took place without incident. Rydberg is currently working 33 hours a week, has groups twice a week for an hour and a half, and keeps daily logs of his activities to provide accountability. He believes the treatment program and relapse-prevention programs will be with him for life.

As part of his treatment, Rydberg prepared an eight-page proposed pass plan. Because he met the expectations of the transition-phase program and was adjusting well, in May 2003, the clinical director of MSOP notified the appropriate persons of her intent to grant Rydberg pass-eligible status. Following this notification, the Blue Earth County Sheriffs Department objected, as did the victim of Rydberg’s last offense, and the issue came before the special review board. After a hearing, the review board recommended granting Rydberg pass-eligible status, but the commissioner denied the request.

Rydberg then petitioned for rehearing and reconsideration before the judicial appeal panel. At the hearing, the parties stipulated that Rydberg had made a prima facie showing that met his burden of persuasion. Rydberg nonetheless testified. No witnesses were called in opposition by the commissioner, but Blue Earth County presented testimony from a deputy sheriff and from the program manager for the Blue Earth County Mental Health Center.

The appeal panel subsequently concluded that Rydberg had sustained his burden of establishing that he qualifies for pass-eligible status. The appeal panel found that (1) Rydberg had fully met MSOP’s clinical and program expectations; (2) the pass-eligible status was proposed by, and supported by, MSOP staff; (3) Rydberg received a unanimous recommendation for pass-eligible status from the special review board; and (4) the pass plan can be implemented while reasonably protecting the public. The appeal panel also concluded that the commissioner had failed to meet his burden of establishing, by clear and convincing evidence, that Rydberg should not be granted pass-eligible status. Accordingly, the judicial appeal panel reversed the commissioner’s decision and granted Rydberg pass-eligible status. This appeal follows.

ISSUES

1. After Rydberg sustained his burden of showing that he should be placed on pass-eligible status, did the judicial appeal panel err as a matter of law in requiring the commissioner to show, by clear and convincing, evidence that Rydberg should not be granted pass-eligible status?

2. Did the judicial appeal panel err in granting pass-eligible status to Rydberg?

ANALYSIS

I.

Issues of statutory interpretation are reviewed de novo. Hince v. O’Keefe, 632 N.W.2d 577, 582 (Minn.2001). Findings of fact will not be reversed if the record as a whole sustains those findings. Piotter v. Steffen, 490 N.W.2d 915, 919 (Minn.App.1992), review denied (Minn. Nov. 17,1992).

The commissioner first argues that the appeal panel erred in ruling that after Rydberg met the burden of showing that he should be placed on pass-eligible status, the burden shifted to the parties opposing pass-eligible status to show by clear and convincing evidence that he should not be granted pass-eligible status.

A pass is “any authorized temporary, unsupervised absence from a treatment facility.” Minn.Stat. 253B.02, subd. 21 (2002). Passes play an important role in treatment and may allow a treatment team to evaluate the readiness of the patient to reenter the community. County of Hennepin v. Levine, 345 N.W.2d 217, 220 (Minn.1984) (addressing passes for mentally ill and dangerous patients). Before a patient committed as a psychopathic personality may be released into the community on a pass, the medical director of the treatment facility must approve pass-eligible status. Minn.Stat. 253B.18, subd. 4b(b).

At least ten days before making this determination, the medical director must notify certain persons of the intent to grant pass-eligible status and inform them of their right to seek review before the special review board. Minn.Stat. 253B.18, subd. 4b(b). Those to be notified include the committing court, the county attorney, the designated agency, an interested person, the petitioner, and the petitioner’s counsel. Id. If any of those notified seek review of the proposal, they must file a notice of objection and a hearing will be held before the special review board. Id. The proposed status may not be implemented unless there is a favorable recommendation by a majority of the special review board and approval by the commissioner. Id. The commissioner’s order may be appealed to the judicial appeal panel pursuant to Minn.Stat. 253B.19, subd. 2 (2002). Minn.Stat. 253B.18, subd. 4b(b).

Under Minn.Stat. 253B.19, subd. 2, “[t]he petitioning party bears the burden of going forward with the evidence. The party opposing discharge bears the burden of proof by clear and convincing evidence that the respondent is in need of commitment.” Id. (emphasis added). The statute is silent as to the burden on those opposing actions other than discharge.

The commissioner first argues that after Rydberg met his burden of establishing that he should be granted pass-eligible status, the burden of proof should not then shift to the commissioner but should remain with Rydberg. Generally, “[w]hen a plaintiff proves a prima facie case and it is unrebutted by defendant, the plaintiff has met his burden of proof.” Fidelity Bank Trust Co., v. Fitzimons, 261 N.W.2d 586, 590 (Minn.1977). This then shifts the burden of proof to the opposing party. Id. at 590 n. 10. When the appeal panel found that Rydberg met his burden because he fully met the clinical and program expectations for pass-eligible status, it is unclear what more the commissioner would have Rydberg prove. The appeal panel properly ruled that at this point, the burden shifted to the parties opposing pass-eligible status.

Next, the commissioner argues that the burden for one opposing pass-eligible status should not be clear and convincing. He contends that the clear and convincing standard applies to discharges because they involve a liberty interest. Minn.Stat. 253B.19, subd. 2; Linder v. Com’r. of Human Servs., 394 N.W.2d 824, 826 (Minn.App.1986). In contrast he asserts that pass-eligible status, like transfer, is a form of treatment and that the preponderance of the evidence standard should apply. Linder, 394 N.W.2d at 827; see Levine, 345 N.W.2d at 223 (noting that a pass program is a form of treatment).

Levine addressed the issue of whether, in the absence of a specific statutory provision, the special review board was required to approve the issuance of passes for one committed as mentally ill and dangerous. 345 N.W.2d at 223. Finding that because the pass program was part of the treatment and that public safety was adequately protected by the commitment and discharge process, the court held that to require special review board approval of passes would “eviscerate the physician’s discretion necessary for treatment of patients committed as MID.” Id.

Since Levine, however, the statute has been changed to its present form, which now requires the special review board to review pass-eligible status for one committed as psychopathic personality upon notice of objections. Minn.Stat. 253B.18, subd. 4b(b). Because the discharge decision requires clear and convincing proof by those objecting, so too should the pass-eligible decision. See Minn.Stat. 253B.19, subd. 2. We conclude that once Rydberg met his burden of proof, the appeal panel properly shifted the burden to those opposing pass-eligible status to prove, by clear and convincing evidence, that Rydberg should not be granted that status.

II.

Next, the commissioner argues that even if the burden of proof shifted, he met that burden by establishing that Rydberg is not entitled to pass-eligible status. In reviewing a decision of the judicial appeal panel, this court does not weigh the evidence as if trying the matter de novo; rather, we examine the record to determine whether the evidence as a whole sustains the appeal panel’s findings. Johnson v. Noot, 323 N.W.2d 724, 728 (Minn.1982). If it does, “it is immaterial that the record might also provide a reasonable basis for inferences and findings to the contrary.” Id.

The commissioner contends that through the testimony of the Blue Earth County officials and Rydberg’s own admissions, he met his burden of showing that Rydberg was not ready for unsupervised passes. First, he contends that Rydberg’s testimony regarding his “fixation” with a woman on the grounds of the campus calls into question his clinical stability. While Rydberg testified that he found a woman on the grounds attractive, he also indicated he discussed it with members of his group. The record does not show the so-called “fixation” or that it called into question Rydberg’s clinical stability.

Next, the commissioner cites Rydberg’s admission that his anxiety level has increased with each reduction in custody and his acknowledgment that in, the past, he has dealt with stress through sexual aggression. He testified that he is presently taking medication for anxiety, and he explained that previously, when he had been feeling anxious and had increases in his sexual fantasies, he was not taking medication. Further, he explained that the medication helps him control them and slows down his thinking. There was no evidence showing that this testament made Rydberg’s pass-eligible status improper.

Next, the commissioner points to the testimony of the Blue Earth County witnesses that Rydberg had participated in unsupervised visits on campus for a very short time. As found by the appeal panel, Rydberg had done so for more than a year without incident. The commissioner also faults the treatment team for failing to take adequate precautions to ensure public safety. In response to these concerns, the appeal panel strongly recommended that the clinical director proceed cautiously and advise the sheriff when Rydberg is granted unsupervised passes.

Finally, the commissioner argues that there were concerns expressed by the county attorney’s office as to Rydberg’s violent and random assaults, his bold use of weapons, and his commission of offenses in the presence of family members. Rydberg does not deny that he engaged in violent criminal sexual conduct.

But, the panel found that Rydberg had established that (1) he understands the gravity of his crimes; (2) his treatment professionals agree that an unsupervised pass plan should be implemented with prescribed conditions, including time checks, cheek-in, evaluation procedures, and destination limits, and Rydberg understands and accepts these conditions; (3) MSOP was developed and implemented with the intent of releasing “even the most violent sexual offenders” into the community after successful completion of the MSOP program; (4) Rydberg fully met the clinical and program expectations of MSOP; (5) and the conditions of the pass-eligible status will provide a reasonable degree of protection to the public and will enable Rydberg to begin a successful adjustment to the community.

We conclude that the record as a whole supports the appeal panel’s findings. Because the findings are supported by the evidence and the law, the appeal panel did not err in deciding to grant Rydberg pass-eligible status.

DECISION

The decision by the judicial appeal panel to grant Rydberg pass-eligible status is affirmed.


author: PER CURIAM.

text:
    2004 ND 205
    In the Matter of the Application for DISCIPLINARY ACTION AGAINST Donald L. PETERSON, a Member of the Bar of the State of North Dakota. Disciplinary Board of the Supreme Court of North Dakota, Petitioner v. Donald L. Peterson, Respondent.
    Nos. 20040167-20040169.
    Supreme Court of North Dakota.
    Nov. 4, 2004.
   DISBARMENT ORDERED.

PER CURIAM.

[¶ 1] • On November 17, 2003, Donald L. Peterson admitted service of a Summons and Petition for Discipline. The Petition asserts that Peterson was admitted to practice law in the State of North Dakota on September 22, 1976, and has been an attorney at law since that time. On May 28, 2004, Peterson was placed on Interim Suspension by this Court. See Disciplinary Board v. Peterson, 2004 ND 101, 680 N.W.2d 238.

[¶ 2] Beginning in May, 2002, Peterson represented Robert Taylor in a divorce matter. Peterson agreed to represent Taylor in an appeal of the divorce judgment, and to bring a contempt proceeding against Taylor’s ex-wife for failing to pay her portion of the debts as ordered in the divorce. Peterson did not pursue the appeal as agreed.

[¶ 3] On May 14, 2003, Peterson told Taylor that he had filed the papers necessary to bring a contempt motion against Taylor’s ex-wife. On May 15, 2003, Taylor called the Ward County Clerk’s office and was told that papers had not been filed. On May 16, 2003, Peterson filed the contempt papers with the Ward County Clerk of Court’s office. Included with the papers was an “Affidavit of Robert Taylor” which purported to bear the signature of Taylor. Taylor’s purported signature was noted as “Subscribed and sworn to before me this 30th day of April, 2003,” and was signed by Donald L. Peterson, Notary public. Taylor did not sign the document notarized by Peterson, rather Peterson wrote Taylor’s name or had someone else write Taylor’s name. Peterson’s notarization of the document was in violation of N.D.C.C. § 44-06-13.1.

[¶ 4] The Petition further asserts that Peterson also represented Taylor in a criminal matter concerning the taping of his ex-wife’s calls. Peterson received a proposed plea agreement from the prosecutor in January 2003, but did not communicate the proposal to Taylor.

[¶ 5] The Petition asserts that Taylor discharged Peterson as his attorney in early June, 2003. Peterson was requested to turn over Taylor’s civil and criminal files to his new attorney. Peterson had to be contacted several times before the civil file was turned over to the new attorney; part of the criminal file was never turned over to the new attorney.

[¶ 6] The Petition alleges that Peterson violated N.D.R. Prof. Conduct 1.3 (Diligence), N.D.R. Prof. Conduct 1.4 (Communication), N.D.R. Prof. Conduct 3.3 (Candor Toward Tribunal), N.D.R. Prof. Conduct 4.1 (Truthfulness in Statements to Others), N.D.R. Prof. Conduct 8.4 (Misconduct), N.D.R. Lawyer Discpl. 1.2(A)(3) (Grounds for Discipline), N.D.R. Prof. Conduct 1.16(e) (Declining or Terminating Representation) in the Taylor matters.

[¶ 7] The Petition further asserts that Peterson represented Austin Mutual Insurance Company in a civil action brought by Edwin and Lisa Paulson. Austin Mutual had difficulty communicating with Peterson, and retained attorney Barbara Lewis to find out the status of the case. Peterson told Lewis the matter had been dismissed. In response to a request from Lewis, Peterson sent Lewis a copy of a purported Order Dismissing Complaint, dated March 2, 2003, signed by Judge Gary A. Holum, bearing Case No. 51-01-C-0450, venued in District Court, Ward County, North Dakota. Peterson had prepared the Order Dismissing Complaint. The Order Dismissing Complaint was not signed by Judge Holum, but rather by Peterson or at his direction.

[¶ 8] The Petition alleges that Peterson violated N.D.R. Prof. Conduct 1.3 (Diligence), N.D.R. Prof. Conduct 1.4 (Communication), N.D.R. Prof. Conduct 4.1 (Truthfulness in Statements to Others), N.D.R. Prof. Conduct 8.4 (Misconduct), and N.D.R. Lawyer Discipl. 1.2(A)(3) (Grounds for Discipline) in the Austin Mutual Insurance Company Matter.

[¶ 9] Peterson was given an extension to December 15, 2003, to file an Answer to the Petition for Discipline. Peterson filed his Answer on December 15, 2003, admitting in part and denying in part, the allegations in the Petition. In his Answer, Peterson argued that mitigating circumstances existed.

[¶ 10] The matters were heard before a Hearing Panel on March 26, 2004. The Hearing Panel filed its Report on June 24, 2004, concluding that Peterson violated N.D.R. Prof. Conduct 1.4 in that Peterson told Barbara Lewis that the Paulson matter had been dismissed by the Court and provided her with the false “order;” N.D.R. Prof. Conduct 3.3 in that Peterson filed with the Court, in the Taylor matter, an affidavit which was purportedly signed by Taylor, when it was in fact signed with Taylor’s name by Peterson, and falsely notarized by Peterson as having been signed by Taylor; N.D.R. Prof. Conduct 4.1 and N.D.R. Prof. Conduct 8.4 in that Peterson falsely notarized the affidavit purportedly signed by Taylor in violation of N.D.C.C. § 44-06-13.1(1), and forged the Order bearing the purported signature of Judge Holum; and N.D.R. Lawyer Dis-cipl. 1.2(A)(3) in that Peterson filed with the Court the purported Affidavit of Taylor, and he submitted the Order with the forged signature of Judge Holum to Barbara Lewis.

[¶ 11] The Hearing Panel considered aggravating factors under N.D. Stds. Imposing Lawyer Sanctions 9.22(c), a pattern of misconduct, 9.22(d), multiple offenses, 9.22(i), substantial experience in the practice of law, and 9.22(a), prior disciplinary offense in that Peterson acknowledged an admonition for not timely filing a judgment. The Hearing Panel also considered N.D. Stds. Imposing Lawyer Sanctions 9.32(c), personal or emotional problems, as possible mitigation, in the context of Peterson’s testimony concerning an anxiety disorder, and a statement from Dr. L. Mark Bell, D.O., psychiatrist, concerning Peterson’s treatment for depression and anxiety; however, the Hearing Panel did not conclude this information to be mitigating. The Hearing Panel considered, but did not accept, mitigation on the grounds that Peterson became a solo practitioner. The Hearing Panel also considered the fact that there was no harm or injury to either Taylor or Austin Mutual Insurance Company, and that Peterson obtained no pecuniary gain or benefit by his conduct.

[¶ 12] The Hearing Panel recommended Peterson be suspended from the practice of law for one year, and pay the costs of the disciplinary proceeding in the amount of $4,156.38. The matter was submitted to the Court under N.D.R. Lawyer Discipl. 3.1(F)(2). (pbjeetions to the Report of the Hearingj Panel were due July 15, 2004; no objections were filed. At the request of the Cou^t, on August 14, 2004, the parties filed briefs on the issue of whether the recommended sanction adequately reflected the seriousness of the violations. The Court considered the matter, and

[¶ 13] ORDERED, Donald L. Peterson is DISBARRED from the practice of law. Under N.D. Std. Imposing Lawyer Sanctions 5.11, disbarment is generally appropriate when: (a) a lawyer engages in serious conduct a necessary element of which includes intentional interference with the administration of justice, false swearing, misrepresentation, fraud, extortion, misappropriation, or theft; ... or (b) a lawyer engages in any other intentional conduct involving dishonesty, fraud, deceit, or misrepresentation that seriously adversely reflects on the lawyer’s fitness to practice.

[¶ 14] FURTHER ORDERED, Donald L. Peterson pay the costs and expenses of the disciplinary proceedings in the amount of $4,156.38.

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