text:
    2002 ND 30
    David Lee OLSON, Plaintiff and Appellee, v. Mary Ann OLSON, Defendant and Appellant.
    No. 20010156.
    Supreme Court of North Dakota.
    Feb. 20, 2002.

      John C. Irby, Burgum and Irby, Cassel-ton, N.D., for defendant and appellant.
    Duane R. Breitling, Ohnstad Twichell, P.C., Fargo, N.D., for plaintiff and appel-lee.
   MARING, Justice.

[¶ 1] Mary Ann Olson appeals from a judgment dated April 20, 2001, arguing the trial court erred in determining the value of marital property and in calculating her child support obligation. We affirm the trial court’s property valuation, but we reverse the trial court’s child support determination and remand for recalculation in accordance with the child support guidelines.

I

[¶ 2] David and Mary Ann Olson were married on March 3, 1980. At the time of the divorce, David was 41 years old and Mary Ann was 42 years old. Two children were born of the marriage, Joshua, who was 18 at the time of the divorce, and Michael, who was 15.

[¶ 3] David commenced the action for divorce on August 23, 1999. At a hearing held on October 26, 1999, the parties orally stipulated to a number of matters. As part of these stipulations, Mary Ann received primary physical custody of Joshua and David received primary physical custody of Michael. The parties agreed that the child support obligations would cancel each other out, leaving no child support obligation owing either way until the date Joshua became ineligible for child support. At that date, Mary Ann would owe child support to David. The amount of the child support payments would be determined under the child support guidelines with her income fixed at minimum wage. The parties also agreed each party would be entitled to one-half of the value of Northland Security Insurance Services (“Northland Security”). Under the terms of the stipulation, David would purchase Mary Ann’s share of Northland Security from her. The parties could not, however, agree on the value of the business. Consequently, a hearing was held to determine the value of Northland Security on December 7, 2000.

[¶4] At the hearing, the trial court heard testimony from Kenneth Swanson and Roy Webb regarding the value of Northland Security. Additionally, the trial court received as evidence the deposition of Earl Ross, in which he explained a formula for determining the value of Northland Security. Each of these experts based their value determinations on the stipulated amount of the business’s annual renewals, $34,642.59. According to Swanson, Northland Security was worth 0.9 times its annual renewals, or $31,178.73. Webb stated the value of Northland Security was 12 to 18 times its monthly renewals, or between $34,642.56 and $51,963.84. Mary Ann’s counsel and David’s counsel each provided different interpretations of the formula explained by Ross in his deposition testimony. Under Mary Ann’s counsel’s interpretation, the value of Northland Security was between $59,181.09 and $75,058.88. Under David’s counsel’s interpretation, the value of Northland Security was $44,385.78.

[¶ 5] In its Memorandum Opinion, the trial court found the formula explained by Ross to be the most accurate method for determining the value of Northland Security. The court adopted, as the value of Northland Security, the interpretation of Ross’s testimony provided by David’s counsel in Plaintiffs Exhibit 5. According to this exhibit, the value of Mary Ann’s share was equal to one-half of $44,385.78, minus one-half of Northland Security’s secured business debt of $14,500.00. Thus, the trial court determined David was to pay Mary Ann $14,942.89 for her share of Northland Security. A judgment reflecting this finding was filed on April 20, 2001, and Mary Ann appealed.

II

[¶ 6] On appeal, Mary Ann argues the trial court erred in finding the value of her half of Northland Security was $14,942.89 because Plaintiffs Exhibit 5 does not accurately reflect Ross’s testimony.

[¶ 7] The value a trial court places on marital property depends on the evidence presented by the parties. See Fox v. Fox, 2001 ND 88, ¶ 22, 626 N.W.2d 660. Because a trial court is in a far better position than an appellate court to observe demeanor and credibility of witnesses, we presume a trial court’s property valuations are correct. See Hoverson v. Hoverson, 2001 ND 124, ¶ 13, 629 N.W.2d 573. We will not reverse a trial court’s findings on valuation and division of marital property unless they are clearly erroneous. See Corbett v. Corbett, 2001 ND 113, ¶ 12, 628 N.W.2d 312. “A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, there is no evidence to support it, or if, although there is some evidence to support it, on the entire evidence the reviewing court is left with a definite and firm conviction a mistake has been made.” Kautzman v. Kautzman, 1998 ND 192, ¶ 8, 585 N.W.2d 561. “A choice between two permissible views of the evidence is not clearly erroneous if the trial court’s findings are based either on physical or documentary evidence, or inferences from other facts, or on credibility determinations.” Hoverson, at ¶ 13. Marital property valuations within the range of evidence presented to the trial court are not clearly erroneous. See id.; Fox, at ¶ 19; Wald v. Wald, 556 N.W.2d 291, 295 (N.D.1996).

[¶ 8] In this case, the trial court received evidence on the value of North-land Security from three expert witnesses. Based on this evidence, the value of North-land Security ranged anywhere from $31,178.73 to $75,058.88. The trial court found that $44,385.78 was the most accurate value of Northland Security. This finding falls within the range of evidence presented to the trial court and is not clearly erroneous. See Hoverson, 2001 ND 124, ¶ 15, 629 N.W.2d 573.

[¶ 9] Mary Ann also contends it was clearly erroneous for the trial court to subtract half of Northland Security’s secured debt from the value of her share of the business. At trial, however, Swanson testified that the amount of this debt must be subtracted when determining the value of Northland Security. Thus, there was evidence in the record supporting the subtraction of the debt and we are not left with a definite and firm conviction a mistake has been made. The trial court’s decision to subtract half the debt from the value of Mary Ann’s share is not clearly erroneous. See Fox, 2001 ND 88, ¶ 14, 626 N.W.2d 660.

[¶ 10] In her final argument relating to the value of her share of Northland Security, Mary Ann contends the trial court erred by not giving her interest on her share of Northland Security for the months preceding the parties’ divorce when David had sole control of the business. The stipulation the parties entered into on October 26, 1999, provided David would purchase Mary Ann’s share of Northland Security for one-half of the total value of the business. The stipulation made no provision for interest, and Mary Ann never argued to the trial court or to this Court that the stipulation was unconscionable or otherwise unenforceable. See Weber v. Weber, 1999 ND 11, ¶¶ 12-13, 589 N.W.2d 358 (listing grounds for finding a settlement agreement unenforceable). Therefore, it was not clearly erroneous for the trial court to decline to provide Mary Ann interest on the value of her share.

Ill

[¶ 11] Mary Ann argues the trial court erred in computing her child support obligation because no information concerning the parties’ respective incomes was presented to the trial court.

[¶ 12] “Child support determinations involve questions of law which are subject to the de novo standard of review, findings of fact which are subject to the clearly erroneous standard of review, and may, in some limited areas, be matters of discretion subject to the abuse of discretion standard.” Heinz v. Heinz, 2001 ND 147, ¶ 16, 632 N.W.2d 443. A trial court errs as a matter of law when it fails to comply with the child support guidelines. See id. A proper finding of net income is essential to a correct child support determination. See id. at ¶ 17. A trial court must clearly explain how it determined the amount of net income and the corresponding level of child support. See id. A stipulation which results in a child support obligation less than that required by the child support guidelines violates public policy and will not be enforced. See id.

[¶ 13] David contends the argument raised by Mary Ann is similar to an argument we rejected in Heinz. In Heinz, the parties stipulated that the child support obligor’s net monthly income was $1,596. Heinz, at ¶ 17. Under N.D. Admin. Code § 75-02-04.1-10, this resulted in a child support obligation of $469. Heinz, at ¶ 17. The appellant argued the stipulation was invalid because there were no specific figures supporting the child support obligation. Id. We rejected this argument, reasoning “counsel does not argue the stipulation itself is a miscalculation of income resulting in less support than required by the guidelines, but argues only that the trial court erred in accepting the parties’ stipulation and not requiring litigation and adjudication of [the obligor’s] net monthly income.” Id. Unlike the parties in Heinz, however, the parties in this case never stipulated to an amount of net income. Without any figures concerning the parties’ net incomes in the record, it is impossible to determine if the stipulation in this case complies with the child support guidelines. See Heinz, at ¶ 17 (“A proper finding of net income is essential to determine the correct amount of child support under the guidelines.... ”).

IV

[¶ 14] We, therefore, affirm the valuation of Mary Ann’s share of Northland Security, but we reverse the child support award and remand for recalculation in accordance with the child support guidelines.

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


source: Caselaw Access Project

author: BLATZ, Chief Justice. PAGE, Justice

license: Public Domain

text:
    KMART CORPORATION, Relator, v. COUNTY OF BECKER, Respondent.
    No. C6-01-826.
    Supreme Court of Minnesota.
    Feb. 28, 2002.

      Laurie J. Miller, Thomas R. Wilhelmy, Fredrikson & Byron, P.A., Minneapolis, Relator’s Attorney(s).
    Gretchen Dee Thilmony, Assistant Becker County Attorney, Detroit Lakes, Respondent’s Attorney(s).
   OPINION

BLATZ, Chief Justice.

This property tax appeal raises two issues for our consideration. The first issue concerns when a property’s status as income-producing is determined for the purposes of Minn.Stat. § 278.05, subd. 6(a) (2000), the 60-Day Rule, and the second concerns whether relator provided suffi: cient income information to the county pursuant to the 60-Day Rule. The tax court ruled that the relevant date of inquiry for whether property is income-producing is the date of assessment and that the income information the relator provided within the statutory time period was insufficient. Accordingly, the tax court dismissed relator’s chapter 278 petition for failure to comply with the statute. Because the tax court did not err in determining the property’s status nor in applying the clear language of the 60-Day Rule to the undisputed facts, we affirm.

Relator Kmart Corporation operates a retail store in a shopping center in Detroit Lakes, Minnesota. Kmart leased the property for its store until October 14, 1999, when it purchased the same property. On March 31, 2000, Kmart filed a chapter 278 petition challenging the Becker County assessor’s 1999 valuation of the property. Minnesota Statutes § 278.05, subd. 6(a) requires that all petitioners challenging assessments for income-producing property provide the county with information, “including income and expense figures, verified net rentable areas, and anticipated income and expenses * * * within 60 days after the petition has been filed under this chapter.” Id. Kmart timely provided the county with a lease summary and a copy of pertinent sections of its former lease. This information disclosed that Kmart’s lease provided for an annual minimum rent, but also contained a provision known as a percentage rent clause, requiring additional rent if Kmart’s gross retail sales for the year exceeded a specified amount. Kmart did not provide other information specifying the actual rent paid or whether the percentage rent clause was triggered.

Becker County filed a motion to dismiss the petition, arguing that the income information provided by Kmart was incomplete and, therefore, insufficient. Specifically, the county asserted that the information provided by Kmart did not meet the requirements of the 60-Day Rule because the information provided did not indicate whether the percentage rent clause had been triggered. Thus, the county argued that it did not know and could not determine what rent was actually paid.

In response to the county’s motion to dismiss, Kmart first contended that its property was not subject to section 278.05, subd. 6(a) because it had purchased the property on October 14, 1999, and consequently the property was owner-occupied and therefore not income-producing at the time the petition was filed in March of 2000. Kmart further argued that if the property was subject to section 278.05, subd. 6(a), the information it supplied did comply with the statute because the percentage rent clause had not been triggered and no additional rent beyond the minimum amount stated in the lease summary was owed.

The tax court dismissed Kmart’s petition. In doing so, the tax court stated: “We find the relevant date for determination of the status of a property for purposes of the 60-Day Rule to be the date of assessment. Therefore, in this case, because the subject property was income-producing on the date of assessment * * * the 60-Day Rule requirements apply.” Kmart Corp. v. County of Becker, No. C2-00-395, 2001 WL 311234 (Minn. T.C. March 16, 2001). The tax court then concluded that the income information provided by Kmart failed to comply with the requirements of the statute, because even though Kmart provided some lease information, it failed to provide necessary information as to what rent was in fact paid.

Our review of the tax court’s decision is limited to whether the tax court had jurisdiction, whether its decision was justified by the evidence and in conformity with the law or whether it committed an error of law. Minn.Stat. § 271.10, subd. 1 (2000). When the parties do not dispute the relevant facts, as here, we review legal issues de novo. BFW Co. v. County of Ramsey, 566 N.W.2d 702, 704 (Minn.1997).

Minnesota Statutes § 278.05, subd. 6(a), the 60-Day Rule, applies to income-producing property. Kmart first raises the issue of when a property’s status as income-producing is determined for purposes of this rule. In Minnesota, real property subject to taxation is appraised with reference to its value on January 2 of the assessment year. Minn.Stat. § 273.01 (2000). Because the purpose of the 60-Day Rule is to provide information that would be useful to the determination of value, the relevant date of inquiry for whether property is income-producing is the date of assessment, not the date the petition is filed. See Menards, Inc. v. County of Sherburne, No. C2-98-460, 1998 WL 668734 at *2 (Minn. T.C. Aug. 20, 1998) (finding that property was not income-producing because it had no rental income at the time of assessment). Kmart’s purchase of the leased property on October 14, 1999, does not change the property’s status on the assessment date, January 2, 1999. Therefore we affirm the tax court and hold that the assessment date is the relevant date of determination of a property’s status as income-producing under Minn.Stat. § 278.05, subd. 6(a).

Next we determine whether the income information provided by Kmart complies with the requirements of the 60-Day Rule, which states:

Information, including income and expense figures, verified net rentable areas, and anticipated income and expenses, for income-producing property must be provided to the county assessor within 60 days after the petition has been filed under this chapter. Failure to provide the information required in this paragraph shall result in the dismissal of the petition, unless the failure to provide it was due to the unavailability of the evidence at that time.

Id. The text of the statute is clear— information must be timely provided unless it is unavailable. Further, the statute mandates dismissal upon the failure to provide the information, and does not require that the delay in providing information cause actual prejudice. BFW, 566 N.W.2d at 704-05. Kmart has not argued that the disputed information was not available to it during the statutory time period.

We recognize that section 278.05 subd. 6(a) provides an extraordinary remedy unlike our traditional rules of discovery. A chapter 278 petition exists to provide “an adequate, speedy, and simple remedy” for a taxpayer who claims that real estate has been unfairly assessed. Land O’Lakes Dairy Co. v. Village of Sebeka, 225 Minn. 540, 548, 31 N.W.2d 660, 665 (1948). The legislature has made clear that a chapter 278 petition must be adjudicated promptly. Minn.Stat. § 278.05, (stating that a court “shall without delay summarily hear and determine the claims”). Delays in adjudication have obvious adverse impacts on taxing authorities’ ability to set levies and establish budgets. Therefore, as we have recognized previously, strict enforcement of the 60-Day Rule advances the legislative purpose of providing an adequate, speedy, and simple remedy. BFW, 566 N.W.2d at 705; see also Mendota Mall Assocs. v. County of Dakota, 578 N.W.2d 350, 350 (Minn. 1998) (applying BFW).

Nonetheless, Kmart urges this court to soften what it views as the hard edges of the law. Specifically, Kmart contends that when a petitioner provides the lease information provided here, then the counties and the court should presume that the minimum rent was the only rent due, and that the petitioner satisfied its disclosure obligations under the 60-Day Rule. Thus Kmart advocates that county assessors and the courts proceed, in the absence of an indication to the contrary, on the presumption that contingent clauses in the lease have not affected base rent. While at first glance such an approach is seemingly reasonable, problems in its application become readily apparent. To begin with, we have concerns that such a presumption may not in fact be justified. Further, creating a presumption in favor of the petitioner is likely to result in tax petitioners providing and the county relying on incomplete or vague information. In that event, valuations would be unequal and inaccurate, contrary to legislative intent.

Second, in order to rebut such a court-created presumption, the burden would shift to the county to conduct further discovery of the accuracy of the information provided by petitioner. While on the facts of this case it may appear reasonable for the county to obtain from the taxpayer a simple indication whether the percentage rent clause was triggered, this burden-shifting directly contradicts the allocation of the burden of proof to the petitioner in a chapter 278 proceeding. In re Objections & Defenses to Real Property Taxes for the 1970 Assessment, 306 Minn. 184, 186-87, 235 N.W.2d 390, 392 (1975). Further, it would delay the process in other cases where insufficient but necessary information is provided that needs further clarification in order to be meaningful to the assessor. Therefore, we reject the invitation to modify the 60-Day Rule by reading such a presumption into it.

In reaching this decision, we recognize that taxation is uniquely a function of the legislature, Wulff v. Tax Court of Appeals, 288 N.W.2d 221, 224 (Minn.1979), and the legislature has provided chapter 278 as the exclusive remedy for challenging the assessments upon which property taxes are based, Bethke v. County of Brown, 301 Minn. 380, 385, 223 N.W.2d 757, 761 (1974). The legislature has chosen to limit the remedy by requiring tax petitioners to provide certain information within 60 days and requiring dismissal upon failure to provide that information. We therefore decline to soften the 60-Day Rule and instead, leave the overall balancing of competing tax policy considerations to the legislative branch of government.

Accordingly, we continue to strictly enforce Minn.Stat. § 278.05, subd. 6(a). In this case, there can be no dispute that the rent Kmart paid to the property owner constitutes income relating to the property. While Kmart timely provided its lease information, it never disclosed the amount of rent it actually paid. While the county later learned that Kmart’s gross retail sales in 1999 did not exceed the specified amount triggering the percentage rent clause, the county did not and could not have known this within the 60-day period based on the information provided by Kmart. Without this information, the assessor could not begin the valuation process. Therefore, the decision of the tax court to dismiss the case is affirmed.

Affirmed.

PAGE, Justice

(dissenting).

I respectfully dissent from the court’s decision to dismiss Kmart’s petition under the 60-Day Rule contained in Minn.Stat. § 278.05, subd. 6(a) (2000). The court accepts the county’s argument that, because Kmart failed to affirmatively state that the percentage rent clause in its lease did not apply, the county did not know and could not determine the amount of rent actually paid by Kmart. The county’s argument ignores the facts of this case. The lease furnished by Kmart did contain the amount of rent to be paid. In addition, it stated that this amount could be adjusted upward, but only if Kmart’s gross sales for the year exceeded a specified amount. In fact, the amount of rent set out in the lease was the actual amount paid because the gross sales escalator was not triggered. Under these circumstances, Kmart satisfied its burden under the 60-Day Rule, and the assessor, relying on the information provided, should have proceeded under the reasonable assumption that the percentage rent clause did not apply.

The court is worried that, as in the companion case of Kmart Corp. v. County of St. Louis, 639 N.W.2d 866 (Minn. 2002), this assumption may prove to be inaccurate. Yet this risk is present whenever assumptions are made, and the reality is that an assessor has no choice but to make a wide range of assumptions about the accuracy and completeness of information submitted by every petitioner. An assessor must assume, for example, that the lease is a true and accurate copy of the agreement between petitioner and lessor, and not a work of fiction penned by the petitioner in an effort to minimize his or her tax liability. An assessor must assume, also, that the lease has not been modified or supplanted by a subsequent lease agreement. The law does not require a petitioner to submit information attesting to the authenticity of the lease to guard against the risk that these assumptions are not accurate; I see no reason why it should require such information in this case.

The court also expresses concern that a decision favorable to Kmart would tempt petitioners to provide incomplete or vague information, and that it would shift the burden of proof from the petitioner to the assessor. Apparently, the fear is that a petitioner whose lease contains a base rent amount and a contingent clause might knowingly fail to report that the actual rent paid exceeded the base amount — in other words, that a petitioner might withhold information and hope that the assessor does not discover the omission. I have two responses to this concern. First, the court’s decision does not solve this problem. Under the court’s reasoning, a petitioner committed to the goal of violating chapter 278’s reporting requirements could do so by falsely indicating that a contingent clause does not apply. Unless the assessor assumes that the petitioner’s statement is accurate, a practice that the court finds unpalatable, the assessor would then have to engage in further discovery to verify its truth.

Second, the legal consequences that attach to a violation of the reporting requirements, which include immediate dismissal under the 60-Day Rule and the possibility of civil penalties under Minn.Stat. § 289A.60, subd. 12 (2000), greatly diminish the possibility of intentional underre-porting. I believe that these remedies should be reserved for those situations in which the paucity of information submitted prevent the assessor from performing the valuation. This case does not present such a situation.

In sum, it appears that Kmart’s mistake was not that it provided too little information, but that it provided too much. Under the court’s reasoning, had Kmart simply redacted the percentage rent clause from the copy of the lease it submitted to the assessor, the present controversy would almost certainly have been averted. Because Kmart did not do so, the court would require even more information indicating that the clause did not apply. Thus, it seems that the court is more concerned with the form of Kmart’s submission than its substance. In light of the fact that the information contained in Kmart’s lease included the amount of rent actually paid for the property and time period at issue here, and that the lease was submitted within the statutory period of 60 days, dismissal of Kmart’s petition is unwarranted.

      . Property that generates rental income for its owner is considered to be income-producing. Northwest Airlines Inc. v. County of Hennepin, 632 N.W.2d 216, 219 (Minn.2001); Equitable Life Assurance Soc’y v. County of Ramsey, 530 N.W.2d 544, 549 (Minn. 1995).

      . The rules of civil procedure governing discovery allow parties to file a motion to compel discovery to resolve disputes regarding a party's response to a request for discovery. Minn. R. Civ. P. 37.01(b) (providing that a party may move the court to compel discovery after conferring or attempting to confer in an effort to secure the information without court action). In addition, the rules of civil procedure allow a court to dismiss an action for failure to comply with discovery obligations only under exceptional circumstances. Minn. R. Civ. P. 37.02(b)(3); Beal v. Reinertson, 298 Minn. 542, 544, 215 N.W.2d 57, 58 (1974). Were we operating in the traditional realm of civil discovery, those principles would apply.

      . This point is illustrated by a comparison of this case with the companion cases from St. Louis County also released today. Kmart Corp. v. County of St. Louis, 639 N.W.2d 866 (Minn. 2002). In each of the three consolidated St. Louis County cases, the same lease information was provided as here — that is, simply the lease and lease summary, with no specification of whether additional rent was owed under each lease’s percentage rent clause. In fact, the percentage rent clause was triggered as to each of the St. Louis county properties, arguably indicating a greater property value than would have been indicated by the presumption Kmart urges here.

        . The dissent rejects this conclusion on the basis that during the assessment process the assessor makes many assumptions regarding the truthfulness and accuracy of information provided, and then continues to illustrate this point by referring to several examples of how information provided may be untruthful. In response, we simply note that this case is not about the intentional provision of untruthful information but rather Kmart's provision of meaningless income information that would require the assessor to create and apply legal presumptions to it to avoid the statutorily required dismissal of the petition under Minn. Stat. § 278.05.

      . In 1994 the legislature changed the statute to its present form. Act of May 4, 1994, ch. 587, § 15, subd. 6(a), 1994 Minn. Laws 1043, 1115; codified at Minn.Stat. § 278.05, subd. 6(a). Prior to 1994, the law allowed petitioners only 45 days to provide the necessary information, but had a more relaxed sanction for noncompliance: Failure to timely provide the required information rendered the information inadmissible, "except if necessary to prevent undue hardship or when the failure to provide it was due to the availability of the evidence at that time.” Minn.Stat. § 278.05, subd. 6(a) (1992). Thus, while in 1994 the legislature extended the time for disclosing information, it strengthened the sanction for noncompliance from suppression of the evidence to dismissal of the petition. See id.

        . At the hearing before the tax court in the related case, Kmart Corp. v. County of Douglas, No. C7-00-309, 2001 WL 40361 (Minn. T.C. Jan. 11, 2001) counsel for Kmart conceded this point.
      Question by the Court: In order for an appraiser * * ⅝ to make any beginning at a decision as to the value of this property, they need to have — and this is the reason for the 60-day statute — they need to have the actual rent paid, wouldn’t they?
      Kmart’s counsel: Yes, they would. And by giving them the base rent, we did give them the actual rent paid.
      Court: But they didn't know that, because you didn’t give them the rest of the information.
      Counsel: Right. Yes, Your Honor. We knew that, when we turned over what we did. They didn't know that.

        Id. at * 4, n. 2.

      . In responding to this observation, the court explains that, while the information provided by Kmart in this case was not untruthful, it was meaningless. I find the court’s response unpersuasive. Rmart's lease lacks meaning only if an assessor refuses to accept the reasonable notion — whether termed a "presumption” or an "assumption,” and whether court-created or the product of common sense— that a contingent clause does not apply unless the petitioner indicates otherwise. The court's aversion to presumptions aside, the fact remains that, no matter how much information a petitioner provides, an assessor must always make reasonable presumptions/assumptions about the accuracy and completeness of that information.

      . These consequences are in addition to any criminal sanction that may apply.


text:
    KMART CORPORATION, Relator, v. COUNTY OF DOUGLAS, Respondent.
    No. C5-00-2122.
    Supreme Court of Minnesota.
    Feb. 28, 2002.

      Thomas R. Wilhelmy, Laurie J. Miller, Fredrikson & Byron, P.A., Minneapolis, MN, for Relator.
    Christopher D. Karpan, Douglas County Attorney, Daniel Clark Lee, Alexandria, MN, for Respondent.
   OPINION

BLATZ, Chief Justice.

This property tax appeal raises the question of the sufficiency of income information relator provided pursuant to Minn. Stat. § 278.05, subd. 6(a) (2000), the 60-Day Rule. The tax court ruled that the income information provided within the 60-day deadline was insufficient and dismissed relator’s chapter 278 petition for failure to comply with the statute. Because the tax court did not err in applying the clear language of the 60-Day Rule to the undisputed facts, we affirm.

Relator Kmart Corporation leases space for and operates a retail store in a shopping center in Alexandria, Minnesota. On March 30, 2000, Kmart filed a chapter 278 petition challenging the Douglas County assessor’s January 2,1999 valuation of that property. Minnesota Statutes § 278.05, subd. 6(a) requires that all petitioners challenging assessments for income-producing property provide the county with information, “including income and expense figures, verified net rentable areas, and anticipated income and expenses * * ⅜ within 60 days after the petition has been filed under this chapter.” Id Kmart timely provided the county with a lease summary and copies of pertinent sections of its lease. This information disclosed that Kmart’s lease provided for an annual minimum rent, but also contained a provision known as a percentage rent clause, requiring additional rent if Kmart’s gross retail sales for the year exceeded a specified amount. Kmart did not provide other information specifying the actual rent paid or whether the percentage rent clause was in fact triggered.

Respondent Douglas County filed a motion to dismiss the petition on August 7, 2000, arguing that the information provided by Kmart was insufficient on three grounds: (1) that it failed to provide information about the expenses of the property; (2) that it failed to provide income or expense information for neighboring properties; and (3) that it failed to provide complete income information to allow determination of rent paid. The tax court granted the county’s motion on the basis that Kmart failed to supply any information regarding expenses for the property. Kmart Corp. v. County of Douglas, No. C7-00-309, 2000 WL 1526312 (Minn. T.C. Oct. 9, 2000). The court did not address the other two grounds for dismissal raised by the county in its motion to dismiss. Id at *2. On November 22, 2000, Kmart moved to reconsider the tax court’s decision, arguing that the court had misunderstood Kmart’s position as to expense information.

On January 11, 2001, the tax court granted Kmart’s motion to reconsider in part, and reversed its earlier order that had concluded that Kmart did not provide required expense information. Kmart Corp. v. County of Douglas, No. C7-00-309, 2001 WL 40361 (Minn. T.C. Jan. 11, 2001). Nonetheless, the court dismissed Kmart’s petition because the court concluded that Kmart provided insufficient income information regarding rent paid, the third ground that Douglas County set forth in its August 4, 2000 motion to dismiss. It is this ruling that is now on appeal.

Our review of decisions of the tax court is limited to whether the tax court had jurisdiction, whether its decision was justified by the evidence and in conformity with the law or whether it committed an error of law. Minn.Stat. § 271.10 (2000). When the parties do not dispute the relevant facts, as here, we review legal issues de novo. BFW Co. v. County of Ramsey, 566 N.W.2d 702, 704 (Minn.1997).

This appeal turns on whether the income information provided by Kmart complied with the requirements of the 60-Day Rule, which states:

Information, including income and expense figures, verified net rentable areas, and anticipated income and expenses, for income-producing property must be provided to the county assessor within 60 days after the petition has been filed under this chapter. Failure to provide the information required in this paragraph shall result in the dismissal of the petition, unless the failure to provide it was due to the unavailability of the evidence at that time.

Minn.Stat. § 278.05, subd. 6(a).

This issue is squarely addressed and decided in the companion case filed today, Kmart Corp. v. County of Becker, 639 N.W.2d 856 (Minn. 2002). In Becker County we held that Minn.Stat. § 278.05, subd. 6(a) is not satisfied when the taxpayer merely provides a lease and lease summary stating the amount of minimum rent required, where contingent clauses in the lease make the amount of actual rent unclear, and the taxpayer does not disclose how much rent in fact was paid. Id. (op. at 860-861. The reasoning set forth in Becker County applies to the facts of this case.

Here, although Kmart timely provided Douglas County with its lease information, disclosing the annual minimum rent and the terms of the percentage rent clause, it never disclosed the amount of rent it actually paid. While the county later learned that Kmart’s gross retail sales in 1999 did not exceed the specified amount triggering the percentage rent clause, the county did not and could not have known this within the 60-day period based on the information provided by Kmart. Without this information, as Kmart acknowledged at the tax court hearing, the assessor could not begin the valuation process.

In so ruling, we recognize the importance of a speedy resolution to assessment disputes. The legislature has made clear that a chapter 278 petition must be adjudicated promptly. Minn.Stat. § 278.05, subd. 1 (2000). Delays in adjudication have obvious adverse impacts on taxing authorities’ ability to set levies and establish budgets. Accordingly, we continue to strictly enforce the 60-Day Rule in order to advance the legislative purpose of an adequate, speedy and simple remedy. BFW, 566 N.W.2d at 705. The decision of the tax court to dismiss the case on the basis of Kmart’s failure to meet the requirements of the 60-Day Rule is affirmed.

Affirmed.

PAGE, Justice

(dissenting).

For the reasons stated in my dissent in Kmart Corp. v. County of Becker, 639 N.W.2d 856 (Minn. 2002), I dissent.

      . Kmart owned the neighboring properties until 1989.

      . In response to Kmart's motion to reconsider, the county did not raise its second ground for dismissal regarding provision of information for neighboring properties, but instead relied on the third ground for dismissal, Kmart’s failure to provide complete income information.

      . At the hearing before the tax court, counsel for Kmart conceded this point.
      Question by the Court: In order for an appraiser * * * to make any beginning at a decision as to the value of this property, they need to have — and this is the reason for the 60 day statute — they need to have the actual rent paid, wouldn't they?
      Kmart’s counsel: Yes, they would. And by giving them the base rent, we did give them the actual rent paid.
      Court: But they didn’t know that, because you didn’t give them the rest of the information.
      Counsel: Right. Yes, Your Honor. We knew that, when we turned over what we did. They didn’t know that.

        Kmart Corp. v. County of Douglas, No. C7-00-309, 2001 WL 40361, at *4, n. 2 (Minn. T.C. Jan. 11, 2001).


author: BLATZ, Chief Justice.

text:
    KMART CORPORATION, Relator, v. COUNTY OF ST. LOUIS, Respondent.
    Nos. C7-01-446, C9-01-447, C0-01-448.
    Supreme Court of Minnesota.
    Feb. 28, 2002.

      Thomas R. Wilhelmy, Laurie J. Miller, Minneapolis, Relator’s Attorney(s).
    Alan L. Mitchell, St. Louis County Attorney, Barbara A. Russ, Michael R. Dean, Duluth, Respondent’s Attorney(s).
   BLATZ, Chief Justice.

OPINION

This consolidated property tax appeal raises the question of the sufficiency of income information relator provided pursuant to MinmStat. § 278.05, subd. 6(a) (2000), the 60-Day Rule. The tax court ruled that the income information provided within the statutory deadline was insufficient and dismissed relator’s chapter 278 petitions for failure to comply with the statute. We affirm.

Relator Kmart Corporation filed chapter 278 petitions on March 31, 2000, contesting the 1999 assessed value of three leased properties operated by Kmart in St. Louis County, Minnesota: a store in Virginia, another on Mall Drive in Duluth, and a third on Central Avenue in Duluth.

Minnesota Statutes § 278.05, subd. 6(a) requires that all petitioners challenging assessments for income-producing property provide the county with information, “including income and expense figures, verified net rentable areas, and anticipated income and expenses * * * within 60 days after the petition has been filed under this chapter.” Kmart timely provided the county with a lease summary for each store, and copies of pertinent sections of each lease. This information disclosed that Kmart’s lease at each of the three stores provided for an annual minimum rent, but also contained a provision commonly known as a percentage rent clause, requiring additional rent if Kmart’s gross retail sales for the year exceeded a specified amount. Each lease also contained another provision known as a property-tax off-set clause, or real-estate-tax adjustment clause. Under this provision any additional rent that might be payable under the percentage rent clause would be off-set if Kmart’s real estate taxes for that year exceeded a specified level. Kmart did not provide any information specifying the actual rent paid or whether the percentage rent clauses or property tax offset clauses were triggered.

Respondent St. Louis County filed motions to dismiss each property tax petition, arguing that the information timely provided by Kmart was incomplete. The county asserted that the information provided by Kmart did not meet the requirements of the 60-Day Rule because the information did not indicate whether the percentage rent clauses and property tax off-set clauses had been triggered. Thus the county argued that it did not know and could not determine what rent was actually paid.

The tax court granted the county’s motion to dismiss on January 11, 2001, concluding that the information provided was insufficient under Minn.Stat. § 278.05, subd. 6(a). Kmart Corp. v. County of St.

Louis, Nos. C1-00-600670, C3-00-600671, C8-00-600665, 2001 WL 40370 (Minn. T.C. January 11, 2001). Specifically, the court stated that the income information provided by Kmart was insufficient because it did not give the county necessary information to begin its appraisal of the properties. Id. at * 2.

This appeal turns on whether the income information provided by Kmart complied with the requirements of Minn.Stat. § 278.05, subd. 6(a), the 60-Day Rule, which states:

Information, including income and expense figures, verified net rentable areas, and anticipated income and expenses, for income-producing property must be provided to the county assessor within 60 days after the petition has been filed under this chapter. Failure to provide the information required in this paragraph shall result in the dismissal of the petition, unless the failure to provide it was due to the unavailability of the evidence at that time.

Id.

The resolution of this appeal is guided by our holdings in Kmart Corp. v. County of Becker, 639 N.W.2d 856 (Minn. 2002), and Kmart Corp. v. County of Douglas, 639 N.W.2d 863 (Minn. 2002), decided today. In these cases we held that the 60-Day Rule has not been satisfied when the taxpayer subject to a lease containing a contingent clause did not disclose what rent was in fact paid. The reasoning set forth in Becker County and Douglas County applies to the present matter.

Here, although Kmart timely provided St. Louis County with general lease information, it never disclosed the amount of rent it actually paid for the property. Further, unlike in Douglas County and Becker County, Kmart’s gross retail sales in each St. Louis County store exceeded the amount specified in each lease’s percentage rent clause. Thus the percentage rent clause in each of the St. Louis County leases was triggered. In addition to the insufficient information, the fact that gross sales exceeded the amount specified in the lease is relevant and pertinent information to the assessor in valuing the property, independent of its effect on the actual rent paid.

Thus we hold that Kmart’s failure to disclose sufficient information about what rent was actually paid violates the letter and the spirit of the 60-Day Rule. See Kmart v. County of Becker, 639 N.W.2d 856, 861 (Minn. 2002). While the county later learned that Kmart owed no additional rent in two of the three St. Louis stores because of the property tax off-set clause, the county did not and could not have known this within the 60-day period based on the information provided by Kmart. Further, the county did not know whether additional rent was paid for the Virginia store. Accordingly, Kmart did not comply with the requirements of the 60-Day Rule.

The decision of the tax court to dismiss each of these cases is affirmed.

Affirmed.

      . In the same order the tax court also considered the county's motion to dismiss Kmart’s chapter 278 petition concerning a fourth Kmart property in St. Louis County, the Hib-bing store. This appeal does not concern the Hibbing store.

      . The triggering of the percentage rent clause did not automatically result in additional rent owed, because another contingency clause-the real estate tax adjustment provision-might offset the additional rent that would be owed. For the two Duluth stores, operation of the real estate tax adjustment clause completely off-set any additional rent. Thus zero additional rent was owed over and above the base rent stated in the lease summary for the two Duluth stores. As to the Virginia store, the record is clear the percentage rent clause was triggered, but it is not clear whether the additional rent was off-set by any real estate tax adjustments. Moreover, the record does not reflect whether Kmart actually paid additional rent, over and above the minimum rent, for that store.


author: ANDERSON, RUSSELL A., Justice.

text:
    Kari LOVEN, et al., Respondents, v. CITY OF MINNEAPOLIS, et al., Petitioners, Appellants, Federal Signal Corporation, et al., Defendants, and Kelsey Loven, a minor by her father and natural guardian, Kyle A. Loven, and Kyle A. Loven, individually, Respondents, v. City of Minneapolis, et al., petitioners, Appellants, and Jean M. Lanz, Respondent, v. State Farm Mutual Automobile Insurance Company, Defendant, City of Minneapolis, et al., petitioners, Appellants.
    No. C5-00-1925.
    Supreme Court of Minnesota.
    March 7, 2002.
    James A. Moore, Minneapolis City Attorney’s Office, Minneapolis, MN, Appellant’s Attorney(s).

      James S. Ballentine, James R. Schwebel, Schwebel, Goetz & Sieben, Minneapolis, MN, Respondent’s Attorney(s).
    Clayton M. Robinson, Jr., St. Paul City Attorney, Peter G. Mikhail, Assistant City Attorney, St. Paul, MN, for Amicus Curiae City of St. Paul.
    Wilbur W. Fluegel, Fluegel Law Office, Minneapolis, MN, for Amicus Curiae MN Trial Lawyers Assoc.
   OPINION

ANDERSON, RUSSELL A., Justice.

Respondents brought actions against the City of Minneapolis seeking tort damages and basic economic loss benefits under the Minnesota No-Fault Automobile Insurance Act (“No-Fault Act”) for injuries resulting from the crash of a police van into a crowd of people. The city moved for partial summary judgment declaring that the municipal tort liability cap of $750,000 includes any payments the city is required to make to respondents under the No-Fault Act. After finding that the no-fault benefits sought were in the nature of tort damages and were to be included in the tort liability cap, the district court granted the city partial summary judgment. The court of appeals reversed, concluding that the city’s obligation to pay basic economic loss benefits under the No-Fault Act is not limited by the municipal tort liability cap. Loven v. City of Minneapolis, 626 N.W.2d 198, 201 (Minn.App.2001). We affirm.

On the evening of December 4, 1998, during the seasonal “Holidazzle Parade” along Nicollet Mall in downtown Minneapolis, a city-owned police van crashed into a crowd of spectators, killing two people and seriously injuring several others, including respondents. The city admitted that respondents had reasonably incurred medical expenses as a result of the accident. In addition, all parties agree that damages for the Holidazzle accident will exceed the municipal tort liability cap of $750,000 for claims arising out of a single occurrence. See Minn.Stat. § 466.04, subd. 1(a)(2) (2000). The city, which self-insures under the No-Fault Act, deposited with the district court $750,000, and respondents seek additional payment from the city of basic economic loss benefits under the No-Fault Act. The issue this case presents is whether the tort liability cap includes basic economic loss benefit payments under the No-Fault Act, or whether respondents are able to collect under the No-Fault Act in addition to any damages they might receive within the tort liability cap.

To resolve the issue of whether the municipal tort liability cap includes payments of basic economic loss benefits required by the No-Fault Act, we must interpret and give effect to the two applicable statutes. Our construction of statutes is de novo. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 393 (Minn.1998).

We begin with an overview of each statute. The No-Fault Act requires all automobile owners in Minnesota to carry no-fault automobile insurance and provides for the prompt payment by the reparation obligor of basic economic loss benefits without regard to fault. Minn.Stat. §§ 65B.42, 65B.48, subd. 1 (2000). Basic economic loss benefits include medical expense benefits, disability and income loss benefits, funeral and burial benefits, replacement service loss benefits, survivor’s economic loss benefits, and survivor’s replacement services loss benefits. Minn. Stat. § 65B.44 (1998). The No-Fault Act includes an offset provision requiring that courts deduct any payment of no-fault economic loss benefits paid from the same kind of damages received as part of a negligence lawsuit. See Minn.Stat. § 65B.51, subd. 1 (2000); Tuenge v. Konetski 320 N.W.2d 420, 421-23 (Minn.1982). This provision is consistent with the goal of the No-Fault Act to avoid duplicate recovery. Minn.Stat. § 65B.42(5). At the time of the accident, the statute provided for a maximum coverage for basic economic loss benefits of $40,000 per automobile accident victim, including $20,000 for medical expense loss and $20,000 for income and the other losses described above. Minn.Stat. § 65B.44, subd. 1 (1998).

As a limited waiver of sovereign immunity, the Tort Claims Act allows a city to be held liable for its torts subject to certain exceptions and limitations. Watson v. Metro. Transit Comm’n, 553 N.W.2d 406, 412 (Minn.1996). The statute limited a city’s tort liability for certain claims arising on or after January 1, 1998, and before January 1, 2000, to $750,000 for any number of claims arising out of a single occurrence. Minn.Stat. § 466.04, subd. 1(a)(2). We recognized the legitimacy of government liability caps in Lienhard v. State, 431 N.W.2d 861, 867 (Minn.1988), where we acknowledged that based on the myriad functions of government, “public entities are exposed to far greater risks and liability than a private individual.” Not all tort claims are covered under the cap; for example, a city remains immune from liability for claims in connection with the assessment and collection of taxes, or certain claims based on snow or ice conditions on any highway. See Minn.Stat. § 466.03, subds. 3, 4 (1998).

The city argues that payment of basic economic loss benefits should be included within the municipal tort liability cap, since the No-Fault Act is simply a part of automobile accident tort liability law that requires, without regard to fault, prompt payment of benefits for the same type of loss that a plaintiff seeks recovery for in a tort action. That is, the medical expenses, disability and income loss, and burial expenses included in the definition of basic economic loss benefits are the same types of damages a plaintiff would receive in a tort action, and therefore basic economic loss benefits should be included in the tort liability cap. According to the city, the offset provision of the No-Fault Act, Minn. Stat. § 65B.51, subd. 1, confirms that no-fault benefits are the same as tort damages.

According to respondents, basic economic loss benefits are required by contract, and thus are not tort damages. Respondents argue that the city entered into a contractual agreement to meet its obligations as the reparation obligor under the No-Fault Act when it promised, upon authorization from the Commissioner of Commerce, to self-insure under Minn. Stat. § 65B.48, subd. 3 to pay basic economic loss benefits as required by the No-Fault Act. Respondents argue that tort damages and claims for basic economic loss benefits under the No-Fault Act are fundamentally different in nature, as basic economic loss benefits are payable regardless of fault, and tort damages are payable only when fault is established. Moreover, the city may be required to pay basic economic loss benefits even when a claimant has not met the threshold requirements of Minn.Stat. § 65B.51, subd. 3 (2000) to permit a tort claim.

However, “[t]he object of all interpretation and construction of laws is to ascertain and effectuate the intention of the legislature.” Minn.Stat. § 645.16 (2000). Therefore, whether basic economic loss benefits derive from a contract obligation or tort damages does not answer the question. Rather, we must determine whether the legislature intended the municipal tort liability cap to include payments of basic economic loss benefits under the No-Fault Act.

While the legislature has not expressly addressed the issue before us, it has included provisions in the municipal tort liability statute and the No-Fault Act that are instructive. The No-Fault Act provides for a minimum amount of coverage for any one person injured, whereas the tort liability statute operates on a per occurrence limit. Thus, in accidents involving a large number of victims, the tort liability cap conflicts with the first purpose of the No-Fault Act to provide a basic level of recovery for all uncompensated victims of automobile accidents. See Minn. Stat. § 65B.42. For example, if an accident involved more than 19 people, each entitled to $40,000 in no-fault benefits, the tort liability cap would be reached before full recovery under the No-Fault Act by the victims. In that scenario, the legislative policy of compensation up to the no-fault limits is frustrated, although the liability cap is effective. See also Farmers Ins. Exchange v. Sittner, 902 P.2d 938, 941 (Colo.Ct.App.1995) (holding county could not deduct personal injury protection payments from tort liability cap because to do so would result in inadequate compensation for tort claim).

We recognize that the legislature had a legitimate purpose in limiting the liability of municipalities. Snyder v. City of Minneapolis, 441 N.W.2d 781, 789 (Minn.1989) (holding liability cap on municipal tort liability to be “ ‘rationally related to the legitimate government objective of insuring fiscal stability to meet and carry out the manifold responsibilities of government,’ ” quoting Lienhard, 431 N.W.2d at 868). However, in order to facilitate the underlying purposes and philosophy of our tort law, we read the tort liability cap restrictively. See Wilson v. City of Eagan, 297 N.W.2d 146, 149-50 (Minn.1980) (holding sovereign immunity should be treated restrictively). In Wilson, this principle led us to conclude that punitive damages against municipal officers were allowable in tort actions against municipalities and their officers despite the liability cap for compensatory damages and the ban on punitive damages against the city. Id. We noted that the legislature did not amend the statute to preclude such an award based on our decision in Douglas v. City of Minneapolis, 304 Minn. 259, 230 N.W.2d 577 (1975). Wilson, 297 N.W.2d at 149. Similarly, in this case the legislature did not include no-fault payments within the types of liability under the tort liability cap in Chapter 466, nor did it limit the applicability of the No-Fault Act to actions against municipalities falling within the cap.

Contrasted with our restrictive reading of the tort liability cap is the “over-arching policy of full compensation” reflected in the No-Fault Act. Scheibel v. Illinois Farmers Ins. Co., 615 N.W.2d 34, 38 (Minn.2000). We believe that we can best give effect to both statutes consistent with these principles by holding that the liability cap applies to tort damages separate from the basic economic loss benefits to which all persons injured as a result of the maintenance or use of a motor vehicle are entitled. Under this reading, the municipality will not be exposed to unlimited liability. First, respondents may receive only limited basic economic loss benefits, specifically, $40,000 per individual in a single occurrence. MinmStat. § 65B.44, subd. 1. Moreover, tort damages not included in basic economic loss benefits but included within the scope of Minn.Stat. § 466.01-15 are limited by the municipal tort liability cap. Finally, respondents are denied duplicate recovery, as provided in Minn.Stat. § 65B.51, subd. 1. See also Wirig v. Kinney Shoe Corp., 461 N.W.2d 374, 379 (Minn.1990) (rejecting double recovery for the same harm as a general matter).

We hold that the municipal tort liability cap, Minn.Stat. § 466.04, does not limit a self-insured municipality’s obligation to pay basic economic loss benefits as a reparation obligor under the Minnesota No-Fault Automobile Insurance Act.

Affirmed.

      . The No-Fault Act provides for self-insurance upon approval from the Commissioner of Commerce. Minn.Stat. § 65B.48, subd. 3 (1998).

      . This subdivision was amended in 1999 to replace “maximum of $40,000” with "minimum of $40,000.” Act of May 18, 1999, ch. 177, § 67, 1999 Minn'. Laws 956, 998.

      . Minnesota Statutes § 65B.51, subdivision 3 provides that there may only be recovery of damages for noneconomic detriment in a negligence action when certain conditions are met. Of course, a person may also bring a negligence action for economic loss not paid or payable under Minn.Stat. § 65B.44. Minn. Stat. § 65B.51, subd. 2 (2000).

      . The city's argument that the tort liability cap is an "other condition” in Minn.Stat. § 65B.44 disregards the context of that phrase. The statute reads, "Basic economic loss benefits shall provide reimbursement * * * subject to any applicable deductibles, exclusions, disqualifications, and other conditions, * * Minn.Stat. § 65B.44, subd. 1. The context suggests that the conditions referred to are conditions of coverage under the insurance policy, and not statutory conditions.


author: PAGE, Justice.

text:
    SHAW ACQUISITION COMPANY, d/b/a Stewart Lumber Company, Respondent, v. The BANK OF ELK RIVER, Petitioner, Appellant.
    No. C2-00-1803.
    Supreme Court of Minnesota.
    March 7, 2002.
    Rehearing Denied April 10, 2002.

      James M. Neilson, Matthew A. Anderson, Babcock, Neilson, Mannella, La-Fleur & Klint, P.L.L.P., Anoka, for Appellant.
    Mark J. Johnson, Lang, Pauly, Greger-son, & Rosow, Ltd., Minneapolis, for Respondent.
    Gerald G. Workinger, Jr., Edina, for Amici Curiae Minnesota Bankers Association, Mortgage Bankers Association of Minnesota, and Independent Community Bankers of Minnesota.
   OPINION

PAGE, Justice.

This case presents the issue of whether, under Minn.Stat. §§ 580.10 (2000) and 580.225 (2000), the junior portion of a split-priority mortgage, must be satisfied before an intervening mechanic’s lien in the second-priority position is satisfied. The court of appeals affirmed summary judgment for the mechanic’s lienor. We affirm.

Allied Mortgage of Brooklyn Center, Inc. (Allied Mortgage), owned two adjoining parcels of land in Mille Lacs County, Minnesota — the “North Property” and “South Property” (collectively, the Properties). On March 5, 1998, Allied Mortgage executed and delivered to The Bank of Elk River (Bank) a note for each property in the amount of $105,000. To secure payment of the notes, Allied Mortgage also executed and delivered to the Bank a mortgage on each property. Allied Mortgage and the Bank did not enter into a written construction loan agreement of any type for either property. Shaw Acquisition Company, doing business as Stewart Lumber Company (Stewart Lumber), supplied lumber and other building materials for the North Property and plans and specifications for the South Property.

On January 26, 1999, Stewart Lumber commenced a mechanic’s lien foreclosure action (Underlying Litigation) in Mille Lacs County District Court seeking to foreclose on its mechanic’s lien against the Properties. In February 2000, Stewart Lumber and the Bank entered into a stipulation containing what the stipulation called “Findings of Fact” and “Conclusions of Law.” As part of the stipulation, Stewart Lumber and the Bank agreed to have the district court adopt the stipulation as its Findings of Fact, Conclusions of Law and Order for Judgment.

Pursuant to the stipulation, the district court found that the first actual and visible improvements to the Properties occurred on March 23, 1998, and Stewart Lumber’s mechanic’s lien attached to the parcels jointly on that date. Before March 23, 1998, the Bank made advances in the amount of $61,731.41 on the North Property note and $36,731.41 on the South Property note. After March 23, 1998, the Bank made additional advances in the amount of $43,268.59 on the North Property note and $68,268.59 on the South Property note. As of January 6, 2000, the total amount of principal and interest and real estate taxes due to the Bank for the North Property was $118,880.51 and $118,929.79 for the South Property.

The district court found, in accordance with the stipulation, that the principal advances made on the two notes before March 23, 1998, and the advances for real estate taxes were superior to Stewart Lumber’s mechanic’s lien and that advances made after that date were subordinate and, thus, junior to Stewart Lumber’s mechanic’s lien. The court also found, in accordance with the stipulation, that Stewart Lumber was entitled to a mechanic’s lien in the amount of $43,253.76, plus statutory interest. The district court entered judgment on March 3, 2000, and neither party appealed.

On March 23, 2000, there were two mortgage foreclosure sales, one each with respect to the North Property and the South Property. The highest bidder and purchaser at each sale was the Bank, which bid $122,653.42 for the North Property and $122,779.32 for the South Property. Each bid represented the full amount of the mortgage indebtedness, plus costs, fees, interest, and taxes for the property purchased.

On April 12, 2000, Stewart Lumber filed a summons and complaint in Mille Lacs County District Court seeking a judgment against the Bank for the amount of its lien on the Properties, plus interest, costs, and disbursements. That same day, the Bank recorded notices of intent to redeem from its third-priority positions, although it appears from the record that the Bank never actually redeemed. Subsequently, the parties filed cross-motions for summary judgment and, on September 14, 2000, the court entered summary judgment in favor of Stewart Lumber. Adopting the arrangement of priorities adjudicated in the Underlying Litigation, the court concluded that the foreclosure sale of each property produced a surplus in excess of the Bank’s first-priority position and that Stewart Lumber was entitled to judgment against the Bank in the amount of its mechanic’s lien, plus interest from the date of the foreclosure sale. The court of appeals affirmed, holding that “[t]he district court properly granted [Stewart Lumber’s] motion for summary judgment and properly ordered that proceeds from the foreclosure sales in excess of [the Bank’s] first-priority mortgages be distributed to satisfy [Stewart Lumber’s] second-priority mechanic’s lien.” Shaw Acquisition Co. v. Bank of Elk River, 627 N.W.2d 365, 369 (Minn.App. 2001). We affirm.

At issue is whether the Bank’s bid at the foreclosure sale resulted in a surplus, under Minn.Stat. § 580.10, from which Stewart Lumber can satisfy its mechanic’s lien. Statutory construction is a question of law, which this court reviews de novo. Sorenson v. St. Paul Ramsey Med. Ctr., 457 N.W.2d 188, 190 (Minn. 1990). Section 580.10 provides:

In all cases not provided for in section 580.09 [foreclosure of mortgage installments], if, after sale of any real estate, made as herein prescribed, there remains in the hands of the officer making the sale any surplus money, after satisfying the mortgage, with interest, taxes paid, and costs of sale, the surplus shall be paid over by such officer, on demand, to the mortgagor, the mortgagor’s legal representatives or assigns.

The Bank contends that its bid at the foreclosure sale did not create a surplus under the statute. In support of this contention, the Bank makes a number of arguments. The Bank argues that the plain language of section 580.10 dictates that there is no surplus until the mortgage has been satisfied in full, regardless of whether the mortgage has a split priority. The Bank argues that the court of appeals’ interpretation of the statute leaves the holder of a split-priority mortgage without protection. It contends that, on the one hand, if the mortgagee bids only the amount in the first-priority position at the foreclosure sale, that priority position would be forfeited because Minn.Stat. § 580.225 provides that “[t]he amount received from foreclosure sale under this chapter is full satisfaction of the mortgage debt.” On the other hand, if, as here, the mortgagee bids the full amount of the mortgage debt, the result of the ruling of the court of appeals is that the mortgagee has protected the holder of the intervening lien instead of its own lower-priority position. The Bank argues that this interpretation puts mortgage lenders in a “Catch 22” situation that will make them less amenable to providing construction loans. Finally, the Bank argues that a split-priority mortgagee may redeem from the junior portion of its lien.

We note that section 580.10 does not define the term “surplus”; nor does the language “after satisfying the mortgage” indicate that the term “mortgage” refers to the full mortgage indebtedness as opposed to the senior portion of a split-priority mortgage. While this court has not had occasion to define the term “surplus” under section 580.10, we have addressed the distribution of foreclosure sale proceeds in cases involving split-priority mortgages. See, e.g., Finlay son v. Crooks, 47 Minn. 74, 79, 49 N.W. 398, 400 (1891) (disallowing mortgagee to claim benefit of security for junior portion of split-priority mortgage); cf. Home Lumber Co. v. Kopfmann Homes, Inc., 535 N.W.2d 302, 304 (Minn.1995) (restating obligatory-optional advance rule).

When property is sold under the execution of the power of sale, the proceeds of the sale stand in place of the property sold. Carlson v. Headline, 100 Minn. 327, 330, 111 N.W. 259, 260 (1907); see Ness v. Davidson, 49 Minn. 469, 477, 52 N.W. 46, 47 (1892). Liens transfer from the security sold and attach to the proceeds, out of which the secured debts must be paid. Hage v. Drake Marble & Tile Co., 145 Minn. 113, 115, 176 N.W. 192, 193 (1920). We have stated that “[t]he rights of the parties, as they before existed, are not transposed by the sale, and the court will apply the fund in accordance with their rights as they existed in respect to the land.” Brown v. Crookston Agric. Ass’n, 34 Minn. 545, 546, 26 N.W. 907, 907 (1886); see, e.g., Finlayson, 47 Minn. at 79, 49 N.W. at 400.

Here, the Bank stands precisely as if the district court had declared that the advances the Bank made under its mortgages were optional, as opposed to obligatory. See, e.g., Model Home Bldg., Inc. v. Turnquist, 258 Minn. 53, 56, 102 N.W.2d 717, 719 (1960); Finlayson, 47 Minn. at 79, 49 N.W. at 400. As the Bank itself summarized, its “loan advances were optional, and that part of each mortgage was in first priority position, [Stewart Lumber’s] mechanic’s lien was in second priority position, and the remainder of each mortgage was in third priority position.” If we apply our common law rule that priority with respect to the land governs priority with respect to the proceeds, we arrive at the conclusion that Stewart Lumber is entitled to satisfaction of its mechanic’s lien once the Bank has received satisfaction of the portions of its mortgages in the first-priority positions. See L.M. Sullivan Co. v. Essex Broadway Sav. Bank, 117 N.H. 985, 380 A.2d 1087, 1089 (1977) (permitting satisfaction of mechanic’s lien before satisfaction of junior portion of a split-priority mortgage). After Stewart Lumber has received satisfaction for its mechanic’s lien, the Bank may claim satisfaction for the portions of its mortgages in the third-priority positions.

Unless statutory provisions instruct otherwise, the conclusion we reach under the common law will stand. We “presume[] that statutes are consistent with the common law, and if a statute abrogates the common law, the abrogation must be by express wording or necessary implication.” Ly v. Nystrom, 615 N.W.2d 302, 314 (Minn.2000); see also Bloom v. Am. Express Co., 222 Minn. 249, 253, 23 N.W.2d 570, 573 (1946) (stating that statutes in derogation of the common law must be strictly construed). The Bank contends that sections 580.10 and 580.225 plainly and unambiguously provide that the full mortgage indebtedness must be satisfied before a surplus can exist. As we noted earlier, however, section 580.10 does not define “surplus” and does not indicate that the term “mortgage” refers to the full mortgage indebtedness as opposed to the senior portion of a split-priority mortgage. Section 580.225 also does not specifically address split-priority mortgages; nor does it contain a clear mandate that the full mortgage indebtedness must be satisfied regardless of priority. Thus, we cannot say with any certainty that the legislature intended either section 580.10 or 580.225 to abrogate the common law rule expressed in Brown, 34 Minn. at 546, 26 N.W. at 907, as it relates to the distribution of the proceeds of a foreclosure sale.

The Bank asserts that a parade of horri-bles will beset the mortgage industry if we do not uphold the priority of all advances made under a mortgage over competing mechanic’s lien claims. We recognize that the obligatory-optional advance rule, under which some mortgage advances may be denied priority in preference of intervening mechanics’ liens, is the subject of much criticism. See 5 Richard R. Powell, Powell on Real Property § 38.16[1], at 38-119 (Michael Allan Wolf ed., 2001) (“The obligatory-optional advance rule has been criticized as over protective of local tradesmen and suppliers and unduly prejudicial against lending institutions.”); Robert Kratovil & Raymond J. Werner, Mortgages for Construction and the Lien Priorities Problem — The “Unobligatory” Advance, 41 Tenn. L.Rev. 311, 321-22 (1974). We note, however, that the resolution of this case does not turn on the application of the obligatory-optional advance rule, but on the stipulation that the parties drafted and the district court adopted in its Findings of Fact, Conclusions of Law and Order for Judgment. As such, the facts of this case do not present us with the opportunity to reconsider the obligatory-optional advance rule, which is the true subject of the Bank’s complaint.

The solution under Minnesota law for a construction lender seeking to protect itself from the loss of its mortgage’s priority is to enter into a written construction loan agreement making all advances obligatory. See Landers-Morrison-Christenson Co. v. Ambassador Holding Co., 171 Minn. 445, 449, 214 N.W. 503, 505, (Minn.1927) (“It is well settled that a mortgage may be given to secure future advances; and that such advances at least if made pursuant to an agreement to make them, have priority over mechanics’ liens which attached after the recording of the mortgage but before the making of the advances.”) (emphasis added). Here, the Bank failed to have any construction loan agreement.

Finally, we note that it is not necessary to address whether the junior portion of a mortgage may be redeemed. Although the Bank filed notices of intent to redeem from its third-priority positions, there is no evidence in the record that it did redeem. Not having the issue squarely before us, we decline to address it.

Affirmed.

GILBERT, J., took no part in the consideration or decision of this case.

      . Split-priority mortgages generally arise in the context of the application of the obligatory-optional advance rule. Under this rule, a mortgage that is given to secure obligatory future advances takes priority over mechanics' liens that attach after the mortgage is given but before the advances are made. Axel Newman Heating & Plumbing Co. v. Sauers, 234 Minn. 140, 145, 47 N.W.2d 769, 772 (1951); Erickson v. Ireland, 134 Minn. 156, 158, 158 N.W. 918, 919 (1916). When the advances are optional, however, the mechanics’ liens take priority over advances that are made after the mortgagee receives actual notice of the mechanics’ liens. Axel Newman Heating & Plumbing Co., 234 Minn, at 145, 47 N.W.2d at 772; see Pinlayson v. Crooks, 47 Minn. 74, 79, 49 N.W. 398, 400 (1891).

      . The Bank also argues that Stewart Lumber does not have a claim to the proceeds of the foreclosure sale because the mortgagor, of whom Stewart Lumber is the assignee, does not have a claim to the proceeds. This contention is inconsistent with the district court's March 3 judgment. That judgment, from which no appeal was taken, declared that Stewart Lumber was entitled to a mechanic’s lien against the Properties. That judgment is the law of the case.

      . As stated earlier, section 580.225 provides, “The amount received from foreclosure sale under this chapter is full satisfaction of the mortgage debt, except as provided in section 582.30.” The language of that statute, given its ordinary meaning, appears to provide that a mortgagee having foreclosed upon its mortgage once cannot return to press the debtor for more money. See State v. Maidi, 520 N.W.2d 414, 420 (Minn.App.1994) (Amund-son, J., concurring in part, dissenting in part) (observing that section 580.225 was an attempt "to prevent economic serfdom by outlawing deficiency judgments in mortgage foreclosure actions”), aff’d, 537 N.W.2d 280 (Minn. 1995); see also National City Bank of

        Minneapolis v. Lundgren, 435 N.W.2d 588, 591-92 (Minn.App.) (interpreting section 580.225), rev. denied (Minn. Mar. 29, 1989). This meaning of section 580.225 does not conflict with our common law rules, which permit split-priority mortgages and require the distribution of sale proceeds according to the rights of the parties, as they existed against the land.


author: FOLEY, Judge.

text:
    STATE of Minnesota, Respondent, v. Scott Thomas KUJAK, Appellant.
    No. C2-01-855.
    Court of Appeals of Minnesota.
    Jan. 15, 2002.
    Review denied March 25, 2002.

      Mike Hatch, Attorney General, St. Paul; and Charles E. MacLean, Winona County Attorney, Nancy L. Bostrack, Assistant County Attorney, Winona County Courthouse, Winona, for respondent.
    Lisa Lodin Peralta, Minneapolis; and Earl P. Gray, Gray & Malacko Law Offices, St. Paul, for appellant.
    Considered and decided by TOUSSAINT, Chief Judge, CRIPPEN, Judge, and FOLEY, Judge.
   OPINION

FOLEY, Judge.

In this postconviction appeal from a sentencing order for drug-related racketeering, appellant argues that (1) his “typical” drug dealing activities do not justify an upward durational departure, (2) the $100,000 fine is unconstitutionally excessive, and (3) restitution to a drug task force is improper. Because the court did not abuse its discretion by imposing an upward departure, did not impose a fine grossly disproportional to the offense, and simply mischaracterized reimbursement as restitution in an amended order, we affirm.

FACTS

Appellant Scott Thomas Kujak was charged by indictment with racketeering in violation of Minn.Stat. § 609.903, subd. 1(1) (2000). The grand jury heard testimony stemming from a 30-day investigation of Kujak, during which his telephones and pager were intercepted.

On May 10, 1999, Kujak, then 21 years old, pleaded guilty to racketeering. He admitted to selling crack cocaine (cocaine) during parts of 1998 and 1999 in Winona County. He also admitted to buying cocaine from his uncle, selling it to others, and recruiting others, including juveniles, to sell it for him. Kujak also set up a business to hide his drug dealing. He specifically admitted to 13 predicate crimes as part of his plea, including 13 separate cocaine sales of .6 to 3 grams each, two conspiracies to import cocaine from across state borders, and possession of approximately 17 grams of cocaine with intent to sell. Kujak also admitted that from these sales he made substantially more than the $12,200 reported on his 1998 tax return.

Kujak was sentenced ori July 5, 2000. Before sentencing, the court had as exhibits the wiretap applications and the grand jury transcripts. The court determined Kujak’s crime was a severity level VIII offense and sentenced him to 162 months in prison, an upward departure from the presumptive 122 months, or the range of 117 to 127 months. At the sentencing hearing, the court found Kujak indigent and ordered him to pay (1) a fine of $100,000, (2) a surcharge of $30,000, and (3) an assessment of $30. In addition, the court ordered Kujak to reimburse the Southeastern Drug Task Force $950 for costs of prosecution. After the postconviction motions, the court amended its order on May 18, 2001, by reducing the surcharge from $30,000 to $25, reducing the assessment from $30 to $5, and ordering “restitution” to the Southeastern Drug Task Force in the amount of $950. The initial fine of $100,000 remained unchanged.

ISSUES

1. Did the sentencing court abuse its discretion by imposing an upward dura-tional departure from the presumptive sentence?

2. Does the fine the court imposed on Kujak violate the excessive-fines clause of the United States and Minnesota Constitutions?

3. Did the sentencing court abuse its discretion in ordering that Kujak reimburse the drug task force?

ANALYSIS

I.

The district court sentenced Kujak to 162 months for his racketeering conviction. This was an upward durational departure from the presumptive 122-month sentence for the offense, or the presumptive range of 117 to 127 months. Under the plea agreement, the court could consider the grand jury transcripts and the wiretap applications, and could assign severity level VIII or IX to the offense. The court assigned severity level VIII to Kujak’s racketeering offense. Kujak argues the district court abused its discretion by relying on factors that are “typical” of racketeering in departing upwardly.

A district court may depart from the presumptive sentence provided by the guidelines when a case involves “substantial and compelling circumstances.” Minn. Sent. Guidelines II.D. When considering a departure “as to duration, a sentencing court must ‘analyze the act as compared with other acts constituting the same offense.’ ” State v. Behl, 573 N.W.2d 711, 713 (Minn.App.1998) (quoting State v. Herrmann, 479 N.W.2d 724, 728-29 (Minn. App.1992), review denied (Minn. Mar. 19, 1992)), review denied (Minn. Mar. 19, 1998). When the record “‘supports findings that substantial and compelling circumstances exist, this court will not modify the departure unless it has a ‘strong feeling’ that the sentence is disproportional to the offense.’ ” State v. Woelfel, 621 N.W.2d 767, 774 (Minn.App.2001) (quotation omitted), review denied (Minn. Mar. 27, 2001).

The district court found the following “aggravating factors” justifying an upward departure: (1) Kujak committed a major controlled-substanee crime because he was involved in 13 separate transactions; (2) Kujak transferred cocaine for resale by another; (3) packaging the drugs constituted manufacturing the drugs for use by other persons; (4) Kujak occupied a high position in the drug distribution hierarchy; (5) the offense required a high degree of sophistication; (6) racketeering occurred over a lengthy period of time; and (7) Kujak committed the crime as one in a group of three or more persons actively participating in the crime. Kujak argues that, absent weapons, violence, and large amounts of drugs and money, these factors are “typical” for racketeering and do not justify an upward departure.

Under Minnesota law, a person is guilty of racketeering if the person is “employed by or associated with an enterprise and intentionally conducts or participates in the affairs of the enterprise by participating in a pattern of criminal activity.” MinmStat. § 609.903, subd. 1(1) (2000) (RICO). By pleading guilty to racketeering, Kujak pleaded guilty to organized, not sporadic, run-of-the-mill, criminal activity. See State v. Huynh, 519 N.W.2d 191, 195 (Minn.1994). He pleaded guilty to his involvement in an enterprise with (1) a common purpose among the individuals associated with it, (2) an ongoing organization whose members function under some structure, and (3) an ascertainable structure under which the underlying criminal acts are coordinated into a pattern of racketeering activity. See State v. Kelly, 519 N.W.2d 202, 204-05 (Minn.1994) (listing characteristics of enterprise under RICO statute).

At this time, Minnesota has no body of law by which this court can compare drug-related racketeering activities and define a “typical” drug-related RICO offense. However, the sentencing guidelines’ nonexclusive list of aggravating factors applies to all offenses, including racketeering. See Minn. Sent. Guidelines II.D.2.b (listing factors that may be used as reasons for departure). As is the case with other drug-related offenses, two or more of those factors would distinguish Kujak’s offense from a typical offense and would justify an upward departure. Id., II.D.2.b(5). It is clear from the guidelines that weapons and violence and large quantities of money or contraband are not the only aggravating factors justifying departure.

Kujak’s admissions in his guilty plea alone, independent of the volumes of damaging grand jury testimony, provide sufficient aggravating factors justifying an upward departure. Kujak pleaded guilty to 13 separate sales of cocaine (within the 13 predicate crimes), most of which took place in April 1999, but some of which occurred as early as March 1998. He admitted to being in the business during both years. Although the sales were primarily in amounts that could be considered “for personal use,” Kujak also admitted to one attempted, but unsuccessful, transfer of 25 grams and to possession of approximately 17 grams with the intent to sell at the time of his arrest. While Kujak challenges the court’s characterization of his racketeering as involving a “high degree of sophistication or planning,” he set up a business to hide his illegal activities, investigated competition in the drug business, and used pagers, cell phones, and customer identification numbers to conduct his business. He also admitted to using juveniles, those mentioned in the indictment and others, to sell cocaine, and to setting up another individual in the cocaine business in September 1998. Kujak typically packaged the cocaine in baggies and specifically avoided touching it to avoid detection by his probation officer. From illegal cocaine sales, he made significantly more than the $12,200 reported as his gross income for the tax year 1998.

The penalty our state legislature imposed for a RICO conviction is up to 20 years in prison. Minn.Stat. § 609.904, subd. 1 (2000). “The legislature clearly intended to punish severely those persons who engage in racketeering.” Huynh, 519 N.W.2d at 198. The Minnesota legislature also intended to allow courts broad discretion in sentencing for racketeering by making it an unranked crime and subjecting it to the same departure guidelines as other offenses. See Minn. Sent. Guidelines II.D. & V. Consequently, courts exercise their discretion twice in the sentencing of a racketeer — first by assigning a severity level, and then by deciding whether to depart from the guidelines. Under the facts of this case, we conclude the district court properly exercised its broad discretion by imposing an upward durational departure.

II.

In its postconviction order, the district court fined Kujak $100,000. Pursuant to the plea agreement, the parties agreed that they could argue freely the issue of fines, costs, surcharges, and assessments. Kujak argues that the court imposed an excessive fine violating the United States and Minnesota Constitutions.

Both the United States and Minnesota Constitutions protect individuals from excessive fines. U.S. Const. Amend. VIII; Minn. Const, art. I, § 5. Whether the imposition of a fine violates these constitutional provisions presents a question of law that a reviewing court examines de novo. State v. Rewitzer, 617 N.W.2d 407, 412 (Minn.2000). In reviewing the district court’s decision, this court is mindful of the “broad authority that legislatures necessarily possess in determining the types and limits of punishment for crimes, as well as to the discretion that trial courts possess in sentencing convicted criminals.” Solem v. Helm, 463 U.S. 277, 290, 103 S.Ct. 3001, 3009, 77 L.Ed.2d 637 (1983) (footnote omitted).

No penalty is per se constitutional. Id. at 290, 103 S.Ct. at 3009, 77 L.Ed.2d 637. A fine is unconstitutional as applied if the fine is “grossly disproportional to the gravity of the offense.” Rewitzer, 617 N.W.2d at 413 (citing United States v. Bajakajian, 524 U.S. 321, 337, 118 S.Ct. 2028, 2038, 141 L.Ed.2d 314 (1998)). Disproportionality depends on three factors:

1. the gravity of the offense and the harshness of the penalty,
2. a comparison of the contested fine with fines imposed for the commission of other crimes in the same jurisdiction, and
3. a comparison of the contested fine with fines imposed for commission of the same crime in other jurisdictions.

Rewitzer, 617 N.W.2d at 413 (citing Solem, 463 U.S. at 290-92, 103 S.Ct. at 3001, 77 L.Ed.2d 637). No one factor is dispositive. Helm, 463 U.S. at 290 n. 17, 103 S.Ct. at 3010 n. 17, 77 L.Ed.2d 637.

A. Gravity of the Offense and Harshness of the Penalty

The Minnesota Legislature has targeted both racketeering activity and controlled-substance crime because of their social and economic impact and has set severe maximum penalties for both. Minn.Stat. §§ 609.901, .904, subd. 1, 152.021, subd. 3 (2000) (RICO and controlled-substance crime statutes allow fines of up to one million dollars). Drug-related racketeering, therefore, is a combination of two of the most severe criminal activities covered by our criminal code. Upon a plea to or verdict of guilty of racketeering, the court is no longer concerned with isolated drug sales and the “run-of the mill” criminal offender. See Huynh, 519 N.W.2d at 194.

Kujak was involved in an enterprise whose purpose was to distribute crack cocaine for profit. His offense was aggravated by his long-term involvement, large circle of associates, importation from out-of-state, and distribution in his hometown. His business disregarded the safety and welfare of his sellers and buyers, and the community as a whole. In short, Kujak’s offense was grave.

The harshness of a penalty may be determined by comparing it to the gross profits gained through the illegal activities. See Rewitzer, 617 N.W.2d at 414 & n. 4 (determining $273,000 fine and surcharges was 1,368 times the $200 street value of drugs sold); MinmStat. § 609.904, subd. 2 (2000) (providing alternative fine provision for racketeering using a basis of three times the gross value gained or the gross loss caused, whichever is greater). Ku-jak’s illicit profits from his two years of racketeering are unclear. Nevertheless, he admits to making, in 1998 alone, substantially more than $12,200 from his drug dealing. In the predicate acts Kujak admitted to under the guilty plea, the transactions involved 82.8 grams of cocaine with an estimated value of $5,980. Based on the figures available from Kujak’s admissions alone, therefore, the $100,000 fine was less than ten times the gross profits and not unduly harsh.

B. Comparison To Other Minnesota Crimes

The second factor in the excessive-fines analysis requires the court to compare Kujak’s fine with fines authorized for the commission of other crimes in Minnesota. Rewitzer, 617 N.W.2d at 415. “If more serious crimes are subject to the same penalty, or to less serious penalties, that is some indication that the punishment at issue may be excessive.” Solem, 463 U.S. at 291, 103 S.Ct. at 3010, 77 L.Ed.2d 637. The district court found that $100,000 was “not substantially higher than the fines authorized for similarly ranked crimes.” We agree.

Under Minnesota’s criminal code, all of the crimes more serious than Kujak’s racketeering offense are severity level IX or X crimes — primarily types of murder that call for imprisonment without the option of a fine. See Minn. Sent. Guidelines V. The highest potential fines attach to severity level VIII crimes, the severity level assigned to Kujak’s crime. Two of those, controlled-substance crime in the first degree and importing controlled substances across state borders, have the highest potential fines of $1 million and $1.25 million, respectively. Minn.Stat. §§ 152.021, subd. 3 (controlled-substance crime in the first degree); .0261, subd. 3 (importing controlled substances across state borders) (2000). All other severity VIII crimes include fines ranging from $30,000 to $50,000.

Again, the Minnesota Legislature has declared by its criminal penalty provisions, that, short of murder, racketeering and higher-degree drug crimes are the most serious offenses. They are also crimes involving economic power. Kujak’s plea to racketeering included two predicate crimes of importing controlled substances across borders. Alone, importing controlled substances across borders carries a $1.25 million maximum fine. Minn.Stat. § 152.0261, subd. 3. Therefore, the $100,000 fine imposed on Kujak is not grossly disproportionate to other offenses in Minnesota.

C. Comparison To Other Jurisdictions

The third excessive-fines factor requires that the court consider fines imposed for commission of the same crime in other jurisdictions. ReuAtzer, 617 N.W.2d at 413. The district court found that the fine imposed was within the range for a similar federal offense, and the parties agree. The parties offer that under federal law, Kujak would have been found guilty of either a level 32 or level 34 offense subjecting him to a fine of up to $175,000. Kujak also provides a survey of other states’ maximum sentences for similar crimes falling within a $150,000-250,000 range.

While Kujak’s $100,000 fine falls within or below the maximum fines in these other jurisdictions, he argues that indigent defendants may not be subject to a fine if unable to pay and not likely to become able to pay any fine. See U.S.S.G. §§ 5E1.2(a) (federal sentencing guidelines). In Minnesota, however, sentencing judges need not specifically find that a defendant has the ability to pay a fine before imposing the fine as part of a sentence. Perkins v. State, 559 N.W.2d 678, 693 (Minn.1997). Therefore, we conclude that the third factor also fails to show disproportionality.

Under the facts of this case, the district court did not impose an unconstitutionally excessive fine.

III.

The district court’s amended order required Kujak to pay “restitution” of $950 to the Southeastern Drug Task Force. A court may order as part of a criminal defendant’s sentence that the defendant pay “the whole or any part of the disbursements of the prosecution,” Minn. Stat. § 631.48 (2000). But directing payment of restitution to a drug task force is inappropriate. State v. Murray, 529 N.W.2d 453, 455-56 (Minn.App.1995) (citing several other similar cases). Here, however, the court originally ordered that Kujak pay $950 as “reimbursement” to the Southeastern Drug Task Force and specifically identified the reimbursement as “costs of prosecution.” Such an order is clearly permissible under Minn.Stat. § 631.48. Although the record is devoid of any reconsideration of the $950 payment, the amended order characterized it as “restitution.” Clearly, this was a clerical error. Minn. R. Crim. P. 27.03, subd. 8; see State v. Walsh, 456 N.W.2d 442, 443 (Minn.App.1990) (distinguishing clerical and judgmental errors). The amended order’s characterization of the $950 as “restitution” was simply an inadvertent, technical error. Therefore, we affirm that portion of the district court’s order.

DECISION

The district court did not abuse its discretion by imposing an upward durational departure from the presumptive sentence, did not violate Kujak’s constitutional rights by imposing a fine of $100,000, and did not err in ordering payment to the drug task force.

Affirmed.

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

      . Kujak urges the court to consider Minnesota Sentencing Guidelines Commission data showing that, in 1998, the 22 RICO offenders received no fines. The Rewitzer court footnoted such statistics for felony-level drug offenses. State v. Rewitzer, 617 N.W.2d 407, 415 n. 6 (Minn.2000). These statistics alone do not control our decision, however, and without a factual context for them, they are unpersuasive.