author: WILLIS, Judge

text:
    Carmen Yolanda Berrios RIVERA, petitioner, Respondent, and Angel Louis Montanez-Torres, Respondent, v. RAMSEY COUNTY, Appellant, New York City Law Department, Respondent.
    No. C4-00-99.
    Court of Appeals of Minnesota.
    Aug. 7, 2000.

      Carmen Yolanda Berrios Rivera, Jackson Heights, N.Y. (pro se respondent).
    Robin Dietz-Mayfield, St. Paul (for respondent Montanez-Torres).
    Susan Gaertner, Ramsey County Attorney, Vance B. Grannis III, Special Assistant Ramsey County Attorney, Hastings (for appellant).
    New York City Law Department, Office of Corporation Counsel, Family Court Division, Interstate Child Support Unit, New York, N.Y. (respondent).
    Considered and decided by RANDALL, Presiding Judge, LANSING, Judge, and WILLIS, Judge.
   OPINION

WILLIS, Judge

Appellant Ramsey County argues that the district court erred by denying the county’s motion to establish a child-support obligation for respondent Angel Louis Montanez-Torres under Minn.Stat. § 256.87, subd. 5 (1998). We affirm.

FACTS

The 13-year marriage of respondents Carmen Yolanda Berrios Rivera and Angel Louis Montanez-Torres was dissolved on October 5, 1987; by an order of the superi- or court of Puerto Rico. The order incorporated the parties’ agreement that they would share legal custody of their three children, A.M.B., born in 1975; born in 1977; and M.Y.M.B., born in 1984; and that Rivera would have physical custody of the children. Montanez-Torres was ordered to pay child support of $1,300 per month through January 1988 and $1,000 per month thereafter.

In August 1993, Rivera and Montanez-Torres jointly moved the superior court to modify the dissolution order by “staying” Montanez-Torres’s child-support obligation because he had been diagnosed with cancer. The parties agreed that Monta-nez-Torres would close his Puerto Rican law practice and undergo experimental cancer treatment at the Mayo Clinic in Rochester, Minnesota; that Rivera and M.Y.M.B. would move to New York City; that A.M.B., then age 18, would move to Minnesota to attend St. Cloud State University; and that M.A.M.B. would stay in Puerto Rico with his grandfather, who would have shared physical custody. On October 13, 1993, the court modified the dissolution order as requested by the parties.

In September 1997, appellant Ramsey County notified Montanez-Torres that a child-support enforcement agency of the State of New York had requested that the county enforce the 1987 Puerto Rican child-support order. The county alleged that Montanez-Torres owed child-support arrears of $42,800 and was subject to automatic income withholding. Montanez-Tor-res contested the county’s proposed action and a hearing was held before an administrative law judge (“ALJ”) in October 1997. Neither Rivera nor the county appeared. The ALJ found that the county erroneously told Montanez-Torres that he was obligated to register the Puerto Rican orders to contest its action and that Ramsey County had not registered either order as required under Minn.Stat. ch. 518C (1996). The ALJ dismissed Ramsey County’s action without prejudice.

In May 1998, at Rivera’s request, the Queens County Support Collection Unit in New York asked Ramsey County to seek a child-support order and medical-coverage order for M.Y.M.B. In December 1998, the county initiated an action against Monta-nez-Torres in Dakota County district court. The court transferred the matter to Ramsey County district court.

In April 1999, the county moved the Ramsey County district court to establish an ongoing child-support obligation and a past-support obligation commencing two years before the date of service pursuant to Minn.Stat. § 256.87, subd. 5 (1998), ongoing and past child-care cost payments, and health and dental support.

The district court denied the county’s motion, finding that the county was obligated to proceed under Minn.Stat. ch. 518C (1998) and that “there is no reason for this [cjourt to establish another child-support order under Minn.Stat. § 256.87, subd. 5, when there is already a valid way of enforcing the Puerto Rican dissolution decree.” The county appeals.

ISSUES

1. Does the county have standing to appeal?

2. Is the county required to seek modification of the Puerto Rican orders to establish a child-support obligation for Mon-tanez-Torres?

ANALYSIS

I. Standing on Appeal

Montanez-Torres argues that because the county has never “provided public benefits” to Rivera the county does not have standing to appeal independently of Rivera, who does not appeal from the district court’s order. An appellant must have standing for this court to exercise jurisdiction. State by McClure v. Sports and Health Club, Inc., 370 N.W.2d 844, 850 (Minn.1985); In re Custody of E.A.Q.D. and T.L.D., 405 N.W.2d 262, 264 (Minn.App.1987); cf. Lujan v. Defenders of Wildlife, 504 U.S. 555, 559-60, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351 (1992) (stating that plaintiff must have standing for federal courts to exercise jurisdiction under U.S. Const, art. III).

The county argues that the district court erred in denying its motion to establish a child-support obligation for Montanez-Torres under Minn.Stat. § 256.87, subd. 5 (1998). “[T]he fundamental aspect of standing is that it focuses on the party seeking to get his complaint before a * * court and not on the issues he wishes to have adjudicated.” Sundberg v. Abbott, 423 N.W.2d 686, 688 (Minn.App.1988) (quoting Flast v. Cohen, 392 U.S. 83, 99, 88 S.Ct. 1942, 1952, 20 L.Ed.2d 947 (1968) (emphasis added)), review denied (Minn. June 29, 1988). Thus, in addressing whether the county has standing to appeal, the question is’ not whether the county could properly seek to establish a child-support obligation for Montanez-Tor-res under section 256.87, subdivision 5. Rather, we must determine whether' the county “has a sufficient stake in a justicia-ble controversy to seek relief.” Leffler v. Leffler, 602 N.W.2d 420, 422 (Minn.App.1999) (citation omitted). Á justiciable controversy exists where there is a “genuine conflict in the tangible interests of opposing litigants.” Id. (quoting Izaak Walton League of Am. Endowment, Inc. v. State, Dep’t of Natural Resources, 312 Minn. 587, 589, 252 N.W.2d 852, 854 (1977)). And standing may be conferred on a party by statute. In re Objections. & Defenses to Real Property Taxes, 410 N.W.2d 321, 322 (Minn.1987).

Section 256.87, subdivision 5, provides that a court is to order child-support “under chapter 518.” Chapter 518 provides that ■

[p]ublie authorities responsible for child support enforcement may act on behalf of other public authorities responsible for child support enforcement. This includes the authority to represent the legal interest of * * the other public authority.

Minn.Stat. § 518.551, subd. 1(b) (1998); cf. Krogstad v. Krogstad, 388 N.W.2d 376, 384 (Minn.App.1986) (holding that a “county attorney is authorized to represent a custodial parent” in child-support matters “even if the parent is not a recipient of public assistance” (citations omitted)). Here, the county seeks to establish a child-support obligation under section 256.87, subdivision 5, on behalf of the Queens County Support Collection Unit. Thus, we conclude that the county is invested by statute with a sufficient stake • in these proceedings, in which there is a genuine conflict in the tangible interests of the county and Montanez-Torres, to have standing to appeal the district court’s order.

II. Denial of the County’s Motion

The county argues that the district court erred in denying the county’s motion to establish Montanez-Torres’s child-support obligation under section 256.87, subdivision 5, and instead requiring it to seek a child-support order under chapter 518C. Section 256.87, subdivision 5, provides that a

person or entity having physical custody of a dependant child not receiving public assistance * * * has a cause of action for child support against the child’s noncustodial parents. Upon a motion served on the noncustodial parent, the court shall order child support payments,- including medical support and child care support, from the noncustodial parent.

Chapter 518C, Minnesota’s codification of the Uniform Interstate Family Support Act, sets forth the procedures for the recognition, enforcement, and modification of child-support orders issued by the courts of other states.

Montanez-Torres argues that the county’s motion to establish a child-support obligation under section 256.87, subdivision 5, rather than to modify the Puerto Rican orders under chapter 518C, violates the federal Full Faith and Credit for Child Support Orders Act, 28 U.S.C. § 1738B (1994 & Supp. IV 1998). Statutory construction is a question of law, which we review de novo. Kasdan v. Berney, 587 N.W.2d 819, 321 (Minn.App.1999).

Section 1738B provides that when a state’s court has issued a child-support order “made consistently” with section 1738B, the authorities of another state “shall not seek or make a modification” of that order except in accordance with section 1738B. 28 U.S.C. § 1738B(a) (1994). A child-support order is “made consistently” with section 1738B if the order was made pursuant to the laws of the state of the issuing court, the court had subject-matter jurisdiction, and the court had personal jurisdiction over the parties. Id. (c). Any order that would affect the amount, scope, or duration of a previous child-support order and “modifies, replaces, supersedes, or otherwise is made subsequent to” a previous child-support order is a “modification” under section 1738B. Id. (b).

It is clear that the 1993 order was issued pursuant to the laws of Puerto Rico by a Puerto Rican superior court with both subject-matter jurisdiction and personal jurisdiction over the parties, who were residents of Puerto Rico and jointly moved the superior court to issue the order. See P.R. Laws Ann. tit. 8, § 513 (1990) (providing that parties may submit child-support agreement to superior court for approval). And the county, by requesting that the district court establish a child-support obligation of $467.80 per month, seeks an order that would affect the amount of Montanez-Torres’s child-support obligation established in the 1993 order and that would replace and supersede that order. Thus, the 1993 Puerto Rican child-support order was made consistently with section 1738B, and the county seeks modification of that order.

But the county argues that it is not required to seek modification of the order in accordance with section 1738B because Puerto Rico no longer has continuing, exclusive jurisdiction. This contention is clearly without merit. The county correctly asserts that a Minnesota court may modify the Puerto Rican order because Puerto Rico is no longer M.Y.M.B.’s, Rivera’s, or Montanez-Torres’s state of residence and thus Puerto Rico no longer has continuing, exclusive jurisdiction. See § 1738B(d), (e) (Supp. IV 1998). But that does not mean that the Puerto Rican order is not entitled to full faith and credit under section 1738B. Rather, if neither of the parents nor the child reside in the state that issued an existing child-support order, a court in another state may modify the obligor’s child-support obligation only if the party seeking modification has registered the order in the second state and the court in which modification is sought has jurisdiction over the non-moving party. Id. (e), (i); see id. (d). Thus, the county is required to register the 1993 order before seeking to modify Montanez-Torres’s child-support obligation.

The county argues that regardless of its obligations under section 1738B, it may still seek to establish a child-support obligation for Montanez-Torres under section 256.87, subdivision 5. But Minn.Stat. § 518C.603(c) provides that

[e]xcept as otherwise provided in this chapter [518C], a tribunal of this state shall recognize and enforce, but may not modify, a registered [support or income-withholding] order if the issuing tribunal had jurisdiction.

See generally Minn.Stat. §§ 518C.609-.614 (1998) (discussing registration and modification of foreign child-support orders). And an order that must be registered under section 1738B must be issued by a court with both subject-matter jurisdiction and personal jurisdiction over the parties. § 1738B(c), (i) (1994 <& Supp. IV 1998). Thus, we conclude that when, as here, a party seeks to modify an obligor’s child-support obligation established by a foreign child-support order that 28 U.S.C. § 1738B requires to be registered, the party seeking modification may do so only as provided in chapter 518C.

The county alleges that because Monta-nez-Torres’s child-support' obligation was “stayed” in the 1993 order, the order is not a child-support order, and, therefore, the county is not required to modify Monta-nez-Torres’s child-support obligation under chapter 518C. See generally Mulroy v. Mulroy, 354 N.W.2d 66, 69 (Minn.App.1984) (stating that where district court reserves issue of child support in dissolution decree, when party later seeks child support, court must proceed as if determining initial child-support obligation). But when a court considers the financial resources and needs of both parents and orders that the non-custodial parent has no child-support obligation, the order is not a reservation of the issue of child support. Englund v. Englund, 352 N.W.2d 800, 803 (Minn.App.1984); see Mulroy, 354 N.W.2d at 69.

The superior court’s 1993 order “stayed” Montanez-Torres’s child-support ■ obligation upon Rivera and Montanez-Torres’s joint motion because Montanez-Torres would no longer be able financially to provide support and Rivera would be moving to New York City to take a job. Thus, the 1993 order established that Montanez-Tor-res has no child-support obligation on the basis of the parents’ financial resources and did not, therefore, reserve the issue.

Because the county was obligated under section 1738B to register the 1993 order before seeking to modify Montanez-Tor-res’s child-support obligation, we conclude that the county may seek modification of his child-support obligation only under chapter 518C. The district court did not err in concluding that the county could not proceed under section 256.87, subdivision 5.

In November 1997, the ALJ put the county on notice of its obligation to register the Puerto Rican court’s orders and dismissed the county’s action without prejudice. But instead of registering the 1993 Puerto Rican order, the county chose to proceed in its April 1999 motion as if the order, of which the county is clearly aware, does not exist. Congress established the registration requirement of section 1738B specifically because of the failure of state authorities and courts to give full faith and credit to the child-support proceedings of other jurisdictions. See Full Faith and Credit for Child Support Orders Act, Pub.L. No. 103-383, § 2(a)(4)(A), 108 Stat. 4063, 4064 (1994). And the Minnesota legislature enacted chapter 518C to “unify state laws relating to the establishment, enforcement, and modification of child support orders.” Kasdan, 587 N.W.2d at 322. By not registering the Puerto Rican order and not seeking to modify that order as provided in chapter 518C, the county has attempted to circumvent the intent of both Congress and the Minnesota legislature and to have this state’s courts ignore the full faith and credit owed under both federal and Minnesota law to the judicial proceedings of a co-equal United States jurisdiction. This the county cannot do.

DECISION

Ramsey County has standing to appeal the district court’s November 1999 order. But to establish a child-support obligation for Montanez-Torres, the county is required by 28 U.S.C. § 1738B (1994 & Supp. IV 1998) to register the October 1993 order issued by the superior court of Puerto Rico and thus must seek modification of that order under Minn.Stat. ch. 518C (1998).

Affirmed.

      . The Commonwealth of Puerto Rico is a "State” under section 1738B. § 1738B(b) (1994).

      . A child-support order must also be issued "pursuant” to sections 1738B(e), (f), and (g), to be made consistently with section 1738B. 28 U.S.C. § 1738B(c)(l) (Supp. IV 1998). But because there was no preexisting child-support order from a jurisdiction other than Puerto Rico issued before the 1987 and 1993 orders, those subsections of section 1738B are not applicable to our analysis here. See id. (e) (discussing modification of child-support orders issued by another state’s court), (!) (discussing recognition of child-support orders from separate jurisdictions), (g) (Supp. IV 1998) (discussing enforcement of modified orders by court of a state that no longer has continuing, exclusive jurisdiction of previous order).

      . Section 1738B does not contain a definition of "register” or a required registration procedure. But Minnesota's chapter 518C sets forth the procedure to register a child-support order issued by another state for the purpose of modification or enforcement. Minn. Slat. § 518C.609 (1998) (registration for modification); Minn.Stat. §§ 518C.601-.604 (1998) (registration for enforcement).

      . The county concedes that it has failed to register either the October 1987 or the October 1993 order.

      . In the 1997 proceeding, the county sought to enforce the 1987 order and did not acknowledge the 1993 order.


source: Caselaw Access Project

author: CRIPPEN, Judge

license: Public Domain

text:
    In re the Marriage of Anna T. LUND, petitioner, Respondent, v. Loni J. LUND, Appellant.
    No. C3-00-112.
    Court of Appeals of Minnesota.
    Aug. 15, 2000.

      Donald H. Walser, Kraft, Walser, netting & Honsey, PLLP, Hutchinson (for respondent).
    Kenneth R. White, Farrish Johnson Law Office, Mankato and Raymond 0. Walz, Walz Law Office, Redwood Falls (for appellant).
    Considered and decided by AMUNDSON, Presiding Judge, CRIPPEN, Judge, and G. BARRY ANDERSON, Judge.
   OPINION

CRIPPEN, Judge

Appellant Loni Lund disputes the trial court’s refusal to recognize his tax cost in distributing assets to respondent Anna Lund, asserting that, as a result, the court’s division of the marital estate is inequitable. More particularly, appellant contends that there is clear error in the findings of fact made by the trial court to explain its decision to overlook appellant’s income tax costs — findings that appellant could avoid the tax consequences that he fears.

The trial court findings at issue being critical to its division of the marital estate, •and there being no evidence to permit the findings, we reverse and remand for a redetermination of pertinent facts and the consequential reconsideration of -the cash award made to respondent.

FACTS

The bulk of the Lunds’ marital estate consisted of assets used in a farming operation, including considerable stored grain, a moderate real estate investment, farm animals, vehicles, and equipment. The court awarded most farm assets to appellant and determined that respondent should have an equalizing cash award of $100,138.50, payable in four annual installments. Appellant testified that if he were required to make a cash payment to respondent, “I would either sell crop or take a loan on the crop and sell it in the immediate future in order to cover the loan.” The court found that appellant’s need to sell grain is speculative because he has discretion whether to finance the cash payment.

ISSUE

Does the trial court’s division of property rest on a clearly erroneous finding of fact?

ANALYSIS

The trial court has broad discretion in dividing property in a marriage dissolution, and the court’s decision will not be disturbed on appeal unless there has been an abuse of that discretion. Rut-ten v. Rutten, 347 N.W.2d 47, 50 (Minn.1984). An abuse of discretion will be found only where the trial court resolves the matter in a manner that is against logic and the facts on the record. Id. The valuation of an asset is a finding of fact, and an appellate court will reverse only if it is clearly erroneous on the record as a whole. Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975); see also Minn. R. Civ. P. 52.01.

Appellant testified that he would have to' sell grain in order tó make the cash payments. The trial court found that the need to sell was “speculative” because appellant, alternatively, could finance the cash payment. But this finding lacks any backing in the record. Except as stored grain serves temporarily as collateral for a loan, still being sold in the near future, there is no evidence of credit available to appellant, no evidence of any security he could provide for credit, and no evidence of any source of funds from which he could repay the loans. . Under the circumstances, the matter must be remanded for a determination - of whether appellant has an absolute need tó sell the grain and the record must be reopened singularly to explore whether appellant has any borrowing prospects or reasonable prospects to repay borrowed money. If grain must be sold, it is evident that the value of the marital estate is significantly reduced by tax costs.

We note that our study of the record indicates a number of considerations not thoroughly discussed by the parties or made clear in the court’s findings. These are all matters that should be clarified in order to determine questions left open on remand. For example, we observe that (a) the record does not support the stipulated equity in the farm or demonstrate what assets are being used to secure appellant’s operating line of credit, and (b) the record shows that appellant is a vendee in a contract for deed but provides no evidence of how this form of ownership will affect appellant’s ability to borrow on the farm equity. The court’s rationale no doubt took into account the inexplicable failure of appellant’s counsel at trial to produce more information related to appellant’s ability to produce cash, but we are mindful in this regard that courts ordinarily are reluctant to punish an innocent client in circumstances like these. See Nguyen v. State Farm Mut. Auto. Ins. Co., 558 N.W.2d 487, 491 (Minn.1997) (noting that even where a client’s attorney’s neglect was “inexcusable,” courts are ordinarily loath to punish the innocent client for the attorney’s neglect) (citing Charson v. Temple Israel, 419 N.W.2d 488, 491 (Minn.1988)).

Based on a final determination of the question of grain sales appellant is bound to incur, the court on remand will consider measuring the tax consequences and determine the resulting fair and equitable distribution of property in the marital estate. We observe in this regard that the court found it appropriate to make an equal division of the marital estate, a formula for division that is substantially threatened if appellant must pay considerable income taxes to make the cash payments ordered by the court. The circumstances of the case establish an unusual equity in favor of consideration of appellant’s tax consequences.

Appellant contends on appeal that this court should establish a new rule for valuation of grain being held for future sale, arguing that in such circumstances tax consequences always occur. We decline to attempt formulating a rigid proposition of law to deal with the unique facts of this case and defer instead to the discretion of the trial court in its determination of the facts of the case.

Appellant’s dispute on appeal goes both to the trial court’s judgment and its decision to deny a new trial. The court denied the new-trial motion based on a conclusion that the evidence offered to support appellant’s motion could have been produced at trial and thus did not provide a basis to reopen the judgment under Minn. R. Civ. P. 59.01(d). Appellant’s production of new evidence is largely in the form of letters from his accountant that project the tax consequences of the sale of stored grain, and correspondence from a local banker stating that the bank would not lend appellant $100,000 based on his available collateral and projected cash flow. Because the matters at issue in the motion are all within the scope of the issues on remand, we need not address appellant’s motion for a new trial.

DECISION

An essential finding of fact having no support in the record, we reverse the trial court’s judgment on the division of the marital estate and remand the matter for redetermination of the issue.

Reversed and remanded.

      . The court also found that the amount of tax consequences was speculative due to appellant's ability to choose the year to sell the grain. This finding was made notwithstanding the court’s determination that appellant would have to produce approximately $25,000 plus interest in each of four successive years to meet the property distribution chosen by the court. Unless temporary loan prospects are identified to permit appellant some discretion in delaying the occurrence of grain sales to meet his payment obligations, it is evident he will have to make sales of at least $25,000 of grain in each of four years.

      . There is irony in the property division provided in the court’s order. It threatens an unequal division of the marital estate in favor of the party freed from the risks of a farm operation and against a party whose entire property award is substantially committed to the operation of the farm business. Cf. Koenen v. Koenen, 413 N.W.2d 280, 282 (Minn.App.1987) (affirming a 57%-43% division in favor of party carrying on a farm operation, finding it "proper for the court to consider the preservation of an operable farm unit” and the need to free the other party from the risk of farm indebtedness).


author: HARTEN, Judge

text:
    In the Matter of the RATE APPEAL OF MIDWAY CARE CENTER, INC. and Kelliher Care Center, Inc., Relators, v. MINNESOTA COMMISSIONER OF HUMAN SERVICES, Respondent.
    No. CX-00-382.
    Court of Appeals of Minnesota.
    Aug. 15, 2000.

      Samuel D. Orbovich, Ryan J. Brengman, Orbovieh & Gartner, Chartered, St. Paul (for relators).
    Mike Hatch, Attorney General, Steven J. Lokensgard, Assistant Attorney General, St. Paul (for respondent).
    Considered and decided by RANDALL, Presiding Judge, DAVIES, Judge, and HARTEN, Judge.
   OPINION

HARTEN, Judge

Relators, two nursing homes that failed to provide documentation for the reported cost of their mutual administrator’s compensation, challenge the decision of the Commissioner of Human Services to disallow part of that cost. Because we see no error of law and no constitutional violation, we affirm.

FACTS

The parties have stipulated to the facts. Allen Potvin is the owner and administrator of relators Midway Care Center, Inc., and Kelliher Care Center, Inc., two rural nursing homes. Potvin believed that, as a shared administrator, he was not required to keep records of his time and attendance; he did not keep records for the reporting years 1993 (October 1, 1992, to September 30, 1993) and 1994 (October 1, 1993, to September 30, 1994). Relators reported the cost of Potvin’s compensation as $91,681 or 1993 and $165,042 for 1994. Respondent Department of Human Services (DHS) disallowed the reported cost because there were no supporting time and attendance records.

Relators opposed the disallowance. The administrative law judge (ALJ) recommended applying the “reasoned assumption” statute, Minn.Stat. § 256B.48, subd. 3a, (1998), and setting Potvin’s compensation at the average per-bed rate of long-term care administrator compensation for non-metro facilities during the relevant years. These averages were $584 for 1993 and $598 for 1994 for relators’ 68 beds. The AL J recommended that Potvin receive $39,712 (68 beds x $584) for 1993 and $40,664 (68 beds x $598) for 1994. Rela-tors now challenge the commissioner’s adoption of that recommendation.

ISSUE

Was the disallowance of part of the reported compensation cost of relators’ administrator affected by an error of law or a constitutional violation?

ANALYSIS

In reviewing a contested case hearing, this court may reverse or modify a decision that exceeds the agency’s authority, is made on unlawful procedure, is affected by an error of law, is unsupported by substantial evidence, is arbitrary or capricious, or violates constitutional provisions. Minn.Stat. § 14.69 (1998). Rela-tors contend that the commissioner’s disal-lowance of part of Potvin’s compensation based on his failure to submit the required records is affected by an error of law and violates constitutional provisions. To the extent that this contention is not explicit, we infer it from relators’ arguments.

The commissioner’s decision was based on Minn.Stat. § 256B.48, subd. 3a, (1998).

If the commissioner requests supporting documentation during an audit for an item of cost reported by a long-term care facility, and the long-term care facility’s response does not adequately document the item of cost, the commissioner may make reasoned assumptions considered appropriate in the absence of the requested documentation to reasonably establish a payment rate rather than disallow the entire item of cost.

The commissioner allowed Potvin a payment rate equal to the average per-bed cost of an administrator in other non-metro facilities.

Relators argue first that this rate violated the commissioner’s obligation to treat alike all instances of missing documentation. For this argument, they rely on Richview Nursing Home v. Minnesota Dept. of Pub. Welfare, 354 N.W.2d 445 (Minn.App.1984) (applying the “equal treatment rule” and allowing a nursing home an undocumented 15% increase in fuel oil and gas costs because all nursing homes were allowed that increase during that period), review denied (Minn., Oct. 31, 1984). Relators misconstrue Richview; it holds that what is permitted for one nursing home should be permitted for similarly situated nursing homes during the same period, not that all facilities that fail to provide documentation should be treated equally. Id. at 455. Allowing Potvin the average per-bed rate paid to administrators of similar facilities during the relevant period follows Richview; allowing his entire reported compensation would run counter to Richview and provide a disincentive for administrators to document their compensation costs.

Relators then argue that the commissioner’s per-bed rate payment was based on an unpromulgated rule because there is no rule governing the application of Minn. Stat. § 256B.48, subd. 3a. Relators’ argument is counterproductive: if the statute cannot be applied in the absence of a rule, and there is no rule, relators’ entire reported cost would be disallowed because the commissioner would lack the discretion conferred by the statute to allow any cost that is unsupported by the required documentation. Moreover, setting a precedent of allowing compensation claims in then-entirety without regard to supporting documentation would in effect overrule the legislature, thereby exceeding agency authority. See Minn.Stat. § 14.69 (providing that exceeding authority is a basis for reversal of an agency decision).

Relators also challenge the constitutionality of Minn.Stat. § 256B.50, subd. 3 (Supp.1993), requiring reversal of compensation disallowances based on lack of documentation “for rate years beginning prior to June 30, 1994.” A rate year is based on the reporting year that ended the previous September 30. Relators agree that their disputed rate years began after June 30,1994, but argue their disallowance should nevertheless be reversed because treating cases for rate years beginning after June 30, 1994, differently from cases for rate years beginning before that date violates equal protection and substantive due process. But

[a] legislative classification which might result in inequalities or inequities is not unconstitutional if persons within that classification are similarly treated and the distinctions between the classes bear a reasonable relationship to the objects of the legislation.

New London Nursing Home v. Lindeman, 382 N.W.2d 868, 871 (Minn.App.1986) (quotation and citation omitted). Here, the object of the legislation was to resolve disputes over disallowances based on lack of documentation and avoiding further disputes. Choosing a date after which such disallowances would not be permitted has a reasonable relationship to that object.

To make a case for equal protection, relators must show that they were treated differently from similarly situated facilities, i.e., the commissioner must have allowed all administrator compensation claimed by a facility whose administrator did not keep or submit the required documentation during the same period. See id. at 870-871. They make no such showing. Similarly, to make a case for violation of substantive due process, relators must show that in their case the commissioner made a substantial departure from accepted norms and did not exercise professional judgment. See Ross v. University of Minnesota, 439 N.W.2d 28, 34-35 (Minn.App.1989) (to prove a violation of substantive due process, student had to show that his dismissal was such a substantial departure from accepted norms that the person responsible did not exercise professional judgment), review denied (Minn. July 12, 1989). Again, they make no such showing; the commissioner followed the statute by setting a reasonable pay rate.

Finally, relators argue that the dis-allowance violates the constitutional prohibition against taking. This argument would effectively annul the legislature’s right to require documentation, in that those who do not submit documentation would have the same status as those who do.

DECISION

The commissioner properly applied Minn.Stat. § 256B.48, subd. 3a (1998), by making a reasoned assumption to establish a payment rate for relators’ administrator.

Affirmed.

      . Relators also challenge on appeal the denial of their pre-hearing motion to compel discovery about an alleged DHS practice of allowing lump-sum settlements as a means of settling rate paybacks. But the hearing was to determine whether and how to apply Minn.Stat. § 256B.48, subd. 3a, to which the proposed discovery was irrelevant. We find no abuse of discretion in the ALJ denying the motion to compel discovery. See Surf and Sand Nursing Home v. Department of Human Servs., 422 N.W.2d 513, 520 (Minn.App. 1988) (ALJ’s ruling on discovery motion will not be reversed absent an abuse of discretion), review denied (Minn. June 23, 1988).

      . Relators claim to be challenging the commissioner’s "unconstitutional application” of the statute, but they are actually challenging its constitutionality.


author: DAVIES, Judge

text:
    Joan MARTIN, guardian ad litem for Troy HOFF, Respondent, and State of Minnesota, plaintiff on impleader, Appellant, v. CITY OF ROCHESTER, et al., Defendants.
    No. C3-00-398.
    Court of Appeals of Minnesota.
    Aug. 15, 2000.
    Review Granted Oct. 17, 2000.

      Charles A. Bird, Bird & Jacobsen, Rochester (for respondent Martin).
    Mike Hatch, Attorney General, Suzette C. Schommer, Assistant Attorney General, St. Paul (for appellant).
    Michael A. Bryant, Bradshaw & Bryant Law Offices, Waite Park (for amicus curiae Minnesota Trial Lawyers Association).
    Considered and decided by HALBROOKS, Presiding Judge, DAVIES, Judge, and PETERSON, Judge.
   OPINION

DAVIES, Judge

The state claims that the district court erred in finding that Minnesota’s medical-assistance lien provision is in conflict with federal Medicaid law. Because we find that compliance with both state and federal law is possible, we reverse.

FACTS

Troy Hoff suffered brain damage in a motor-vehicle accident and was permanently disabled. Respondent Joan Martin, Hoffs mother, applied for and received medical assistance on Hoffs behalf and, under Minnesota statutes, assigned Hoffs rights to any insurance recovery to appellant State of Minnesota.

Respondent then brought a personal-injury action against the City of Rochester and others on behalf of her son. Under Minn.Stat. § 256.015, the state filed a lien against this action to secure reimbursement of medical expenses it had paid to treat his injuries. The district court held that Minn.Stat. § 256.015 was invalid because it conflicted with 42 U.S.C. §§ 1396k and 1396p, and, thus, the federal statute preempted the state statute. On appeal, the state contends there is no preemption and the federal statute does not bar the state from placing a hen on the tort recovery.

ISSUES

I. Does federal law allow the state to impose a lien on a third-party tort settlement to secure reimbursement of medical assistance paid?

II. Is this court required to strike appellant’s appendix as outside the record?

ANALYSIS

I.

The preemption doctrine stems from the Supremacy Clause of the United States Constitution, which provides that the laws of the United States “shall be the supreme Law of the Land * * * any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const, art. VI, cl. 2. According to the preemption doctrine, conflicts between federal and state law are to be resolved in favor of federal law. Fidelity Fed. Sav. and Loan Ass’n v. de la Cuesta, 458 U.S. 141, 152-53, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982).

Minnesota’s three-part analysis to determine whether a federal statute preempts operation of a state statute looks at whether: (1) compliance with both the federal and state provisions is impossible; (2) preemption is express and unequivocal in the language of the federal statute; and (3) congressional preemptive intent is implicit in the overall scheme of federal and state regulation. Highland Chateau, Inc. v. Minnesota Dep’t of Pub. Welfare, 356 N.W.2d 804, 809-10 (Minn.App.1984), review denied (Minn. Feb. 6, 1985). The question in this case is whether compliance with both federal and state law is possible.

The relevant federal statute provides:

No lien may be imposed against the property of any individual prior to his death on account of medical assistance paid or to be paid on his behalf under the State plan * * *.

42 U.S.C. § 1396p(a)(l) (1994). Another federal provision, however, directs the ' states to require that an individual receiving medical assistance must assign his rights to “payment for medical care from any third party.” 42 U.S.C. § 1396k(a)(l)(A) (1994).

The state lien statute provides that the state shall have a lien for the cost of medical care against “any and all causes of action.” Minn.Stat. § 256.015 (Supp.1999). Respondent asserts that this provision violates the foregoing federal statute because it provides for a lien against the property of Hoff before his death. Respondent argues that, although the state may seek reimbursement directly from a third party who is legally hable for the injuries resulting in medical care, it may not proceed as it did in the instant case by asserting a lien against the recipient’s “property”, i.e., their cause of action.

The Utah Supreme Court recently addressed this issue in Wallace v. Estate of Jackson, 972 P.2d 446 (Utah 1998), cert. denied, - U.S. -, 120 S.Ct. 42, 145 L.Ed.2d 38 (1999), and a companion case, S.S. v. State, 972 P.2d 439 (Utah 1998). The Utah court was presented with a challenge to the state’s ability to assert liens against a Medicaid recipient’s third-party tort recovery. That court upheld the statute by finding that

payments made by a third party do not legally become the property of the recipient until after a valid settlement which must include reimbursement to the State for Medicaid benefits.

Wallace, 972 P.2d at 448.

In upholding the Utah lien statute, the Utah court relied in part on a decision by the New York Court of Appeals in Cricchio v. Pennisi, 90 N.Y.2d 296, 660 N.Y.S.2d 679, 683 N.E.2d 301 (1997), which stated that

settlement proceeds are resources of the third-party tortfeasor that are owed to [the state]. Accordingly, the lien on the settlement proceeds attaches to the property of the third party, and thus does not violate the statutory prohibition against imposing a lien against a beneficiary’s property until after his or her death. The flaw in plaintiffs’ theory that the lien cannot be satisfied until the recipient’s death is that it fails to appreciate this critical distinction between the assets of a responsible third party and assets belonging to the Medicaid recipient.

Id. at 305 (citations omitted).

The Second Circuit recently reached the same result, but on a rationale we find more persuasive. The Second Circuit stated:

Pursuant to federal law, Medicaid recipients must assign to the state their rights to seek and collect payment for medical care from a responsible third party. As part of its recoupment power, the [state agency] administering Medicaid may place a lien on the Medicaid recipient’s personal injury claims against a tortfea-sor in order to recover the agency’s medical expenditures. [These] liens enjoy a specific exemption from the general rule that the state may not encumber a Medicaid recipient’s property prior to death.

Sullivan v. County of Suffolk, 174 F.3d 282, 285 (2d Cir.1999), cert. denied, — U.S. -, 120 S.Ct. 372, 145 L.Ed.2d 290 (1999) (citations omitted).

In Norwest Bank v. Doth, 159 F.3d 328 (8th Cir.1998), the Eighth Circuit, while applying Minnesota law, found that

a state may require a Medicaid lien imposed on the proceeds of a personal injury award or settlement to be satisfied before the remaining funds are placed in [a trust].

Id. at 333. The Eighth Circuit, however, declined to address the specific preemption issue before this court.

The Minnesota medical-assistance-recovery statute contemplates alternative procedures that the state may utilize to recover reimbursement of medical assistance. The state may either bring its own action or impose a lien on any recovery the medical-assistance recipient might gain in the recipient’s own action. The lien is simply a device to protect the state’s legitimate sub-rogation interest. This lien does not have the effect of allowing the state to make a claim on property that is not connected to the medical assistance it has provided. Further, the lien allowance does not prevent all recovery to the injured party. Under the lien procedure, the plaintiff is guaranteed “at least one-third of the net recovery after attorney fees and other collection costs.” Minn.Stat. § 256.015, subd. 5 (1998).

Minnesota’s medical-assistance statute, thus, does not conflict with the federal Medicaid statutory scheme. See In re Estate of Turner, 391 N.W.2d 767, 770 (Minn.1986) (medical assistance serves system “whereby money paid to qualified individuals for health care purposes may be recovered and reused to help other similarly situated persons”).

II.

Respondent asks this court to strike a portion of appellant’s appendix. The challenged materials consist of: (1) the testimony of Mike Hash, Deputy Administrator for HCFA, before the Senate Appropriations Subcommittee on Labor, HHS, Education, and related agencies dated March 15, 1999; (2) a pamphlet titled “Third Party Liability in the Medicaid Program,” a guide to successful state-agency practices; and (3) the State Medicaid Manual. This information consists only of general information concerning Minnesota’s medical-assistance program and is a matter of public record.

[There is] no reason why a party may not submit such a report to us as part of its brief when we could refer to such a report in the course of our own research, if we were so inclined.

See id. at 771 (denying motion to strike report consisting of general information about state medical assistance finding it matter of public record). Accordingly, respondent’s motion to strike that portion of appellant’s appendix is denied.

DECISION

Minnesota’s medical-assistance-lien statute is not in conflict with federal law. The third-party tort settlement is subject to a state subrogation claim for medical assistance that has been paid. Under state law, the subrogation claim may be protected by a lien.

Reversed.

      . The lien provision, in relevant part, reads: When the state agency provides, pays for, or becomes liable for medical care or furnishes subsistence or other payments to a person, the agency shall have a lien for the cost of the care and payments on any and all causes of action or recovery rights under any policy, plan, or contract providing benefits for health care or injury which accrue to the person to whom the care or payments were furnished, or to the person's legal representatives, as a result of the occurrence that necessitated the medical care, subsistence, or other payments.
      Minn.Stat. § 256.015, subd. 1 (Supp.1999). A similar provision is found at Minn.Stat. § 256B.042, subd. 1 (Supp.1999).

        . The provision, in relevant part, reads: "The plaintiff, however, must receive at least one-third of the net recovery after attorney fees and other collection costs.” Minn.Stat. § 256.015, subd. 5.


text:
    STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Respondent, v. GREAT WEST CASUALTY COMPANY, Appellant.
    No. C9-00-566.
    Court of Appeals of Minnesota.
    Aug. 15, 2000.

      William M. Hart, Melissa Dosick Rieth-of, Meagher & Geer, PLLP, Minneapolis (for respondent).
    Michael W. Lowden, Stempel & Associates, PLC, Hopkins (for appellant).
    Considered and decided by RANDALL, Presiding Judge, HARTEN, Judge, and WILLIS, Judge.
   OPINION

HARTEN, Judge

The district court ordered the parties, both insurers, to arbitrate and confirmed the arbitrators’ award to respondent. Because we see no error in the application of Minnesota law or in the award, we affirm.

FACTS

Mark Anderson was injured in Nevada when a semi-truck driven by Larry Thie-man rear-ended Anderson’s flatbed truck. Anderson, a Minnesota resident, was returning to Minnesota where his flatbed was principally garaged; he was insured by respondent State Farm Mutual Automobile Insurance Co. (State Farm) under a policy issued in Minnesota. Pursuant to the Minnesota No-Fault Act, State Farm paid Anderson no-fault medical expenses and wage loss benefits.

Thieman was and is a Nebraska resident. He was driving a vehicle owned by Hollis Trucking Company, whose principal place of business is in Nebraska. Hollis Trucking was insured by appellant Great West Casualty (Great West) under a policy issued in Nebraska. Great West is licensed to write insurance in Minnesota and has filed the required Motor Carrier Certificate of Insurance with the Minnesota Commissioner of Insurance.

State Farm sought indemnification for its no-fault benefits from Great West and moved the district court to compel Great West to arbitrate. A panel of arbitrators awarded State Farm $30,111, and the district court confirmed the award. Great West challenges the order compelling arbitration and the award.

ISSUE

Is State Farm entitled to indemnity from Great West under Minn. Stat. § 65B.53, subd. 1?

ANALYSIS

Standard of Review

The parties stipulated to the relevant facts. The application of law to stipulated facts is a question of law, which this court reviews de novo. Morton Bldgs., Inc. v. Commissioner of Revenue, 488 N.W.2d 254, 257 (Minn.1992).

State Farm recovered from Great West under the following provision of the Minnesota No-Fault Act:

A reparation obligor paying or obligated to pay basic or optional economic loss benefits is entitled to indemnity * ⅜ * from a reparation obligor providing residual liability coverage on a commercial vehicle of more than 5,500 pounds curb weight if negligence in the operation, maintenance or use of the commercial vehicle was the direct and proximate cause of the injury for which the basic economic loss benefits were paid or payable * * *.

Minn.Stat. § 65B.53, subd. 1 (1998). Great West argues that Nevada law, not Minnesota law, applies, and, in any event, that State Farm is not entitled to indemnification under the Minnesota No-Fault Act.

1. Choice of Law

The first two criteria in a choice-of-law question are whether there is an actual conflict and whether the law of both states can be constitutionally applied. See Jepson v. General Cas. Co., 513 N.W.2d 467, 469-70 (Minn.1994). The parties agree that the law of either Minnesota or Nevada could be constitutionally applied here and that there is an actual conflict. State Farm is not entitled to indemnification under Nevada law and may be entitled to indemnification under Minnesota law.

We next consider the five factors influencing choice of law: (1) predictability of result; (2) maintenance of interstate order; (3) advancement of the forum’s governmental interest, (4) application of the better rule of law, and (5) simplification of the judicial task. Id. at 470. Great West agrees that factors (4) and (5) are irrelevant here.

(1) Predictability of Result

In Jepson, the insurance policy was issued and the insureds resided in Minnesota; the insureds listed their address, were incorporated, and registered most of the vehicles covered under the policy in North Dakota; the accident occurred in Arizona. Id. at 468-69.

Although the accident occurred in Arizona, nothing was planned or done by either of the parties with regard to the insurance contract that was in any way directed to that state.

Id. at 471. Analogously, nothing done by any of the insureds here was directed to Nevada or with the expectation of Nevada law being applied. The predictability factor does not support the application of Nevada law over Minnesota law.

(2) Maintenance of Interstate Order

This factor is “concerned with whether the application of [one state’s] law would manifest disrespect for [the other state’s] sovereignty or impede the interstate movement of people and goods.” Id. Nevada does not have a no-fault act; therefore, Minnesota is not interfering with any Nevada law. Nor has Nevada any interest in whether the insurer of the victim, a Minnesota resident, can obtain indemnification from the insurer of the tortfeasor, a Nebraska corporation. Applying Minnesota law will manifest no disrespect for Nevada’s sovereignty.

Appellant relies on Maxwell v. Allstate Ins. Cos., 102 Nev. 502, 728 P.2d 812, 815 (1986) (denying an insurer the right to subrogation of medical benefits paid to an insured), to argue that Nevada has an interest in preventing one insurer from indemnifying another. That reliance is misplaced. The dispute in Maxwell was not between two insurers but between an insurer and its insured; the policy behind Maxwell is the protection of the insured victim. Here, the victim’s interests are not at issue. The dispute is between two insurers.

This factor favors applying Minnesota law.

(3)Advancement of Forum’s Governmental Interest

Minnesota law provides that insurers paying economic loss benefits to insureds injured by the negligent operation of commercial vehicles may be indemnified by the insurers of the commercial vehicles. See Minn.Stat. § 65B.53, subd. 1. State Farm paid economic loss benefits to an insured injured by the negligent operation of a commercial vehicle insured by Great West. Applying Nevada law and denying State Farm indemnification would contravene Minnesota’s interest. Applying Minnesota law would not impugn any interest of Nevada, because Nevada is without a no-fault act and has no interest in not requiring the insurers of negligent operators of commercial vehicles to indemnify the insurers of their victims.

Great West relies on Maxwell to argue that Nevada has a governmental interest in preventing windfalls to insurers. Again, that reliance is misplaced. Maxwell is concerned with preventing insurers from benefiting at the expense of their insureds; it has no application to requiring insurers of commercial vehicles to indemnify insurers of those injured by the negligent operation of those vehicles. C.f Maxwell, 728 P.2d at 814.

This factor also favors applying Minnesota law. We conclude that because three of the five factors are neutral and the other two favor Minnesota law over Nevada law, Minnesota law applies.

2. Indemnification

Great West argues that Minn. Stat. § 65B.53, subd. 1, applies only to accidents that occur in Minnesota. Another provision of the no-fault act, Minn.Stat. § 65B.46, subd. 2 (1998), explicitly provides for recovery in the case of out-of-state accidents. “Every law shall be construed, if possible, to give effect to all its provisions.” Minn.Stat. § 645.16 (1998). There is no basis to suppose that insurers of commercial vehicles negligently operated outside Minnesota are to be treated differently from insurers of commercial vehicles negligently operated inside Minnesota.

To support its argument that Minn.Stat. § 65B.53, subd. 1, applies only to Minnesota accidents, Great West cites Minn.Stat. § § 65B.42 (1) (one purpose of the no-fault act is “[t]o relieve the severe economic distress of uncompensated victims of automobile accidents within this state”), and 65B.50, subd. 1 (Minnesota-licensed insurers of nonresident policy holders must certify that security is provided “with respect to accidents occurring in this state”). But Minn.Stat. § 65B.53, subd. 1, includes no language restricting it to accidents in Minnesota and neither of the cited statutes precludes its application to an accident occurring outside Minnesota.

Great West also relies on five cases to support its argument: Reed v. Continental W. Ins. Co., 374 N.W.2d 436 (Minn.1985); AID Ins. Co. v. Continental W. Ins. Co., 374 N.W.2d 440 (Minn.1985); Western Nat’l Mut. Ins. Co. v. State Farm Ins. Co., 374 N.W.2d 441 (Minn.1985); Principal Fin. Group v. Allstate Ins. Co., 472 N.W.2d 338 (Minn.App.1991); and Hedin v. State Farm Mut. Auto. Ins. Co., 351 N.W.2d 407 (Minn.App.1984). Because none of these cases mentions Minn.Stat. § 65B.53, subd. 1, or involves an out-of-state accident, they are irrelevant. We conclude that Minn.Stat. § 65B.53, subd. 1, applies to this Nevada accident.

DECISION

Minnesota law applies and imposes on Great West, as the insurer of a negligently operated commercial vehicle, the obligation to indemnify State Farm. The district court did not err in confirming the arbitration award.

Affirmed.


author: G. BARRY ANDERSON, Judge.

text:
    Michael ALTENBURG, et al., Appellants, v. BOARD OF SUPERVISORS OF PLEASANT MOUND TOWNSHIP, Blue Earth County, et al., Respondents.
    No. C9-99-2133.
    Court of Appeals of Minnesota.
    Sept. 5, 2000.

      Daniel W. Godfrey, Dustan James Cross, Gislason & Hunter LLP, New Ulm, MN (for appellant).
    Peter Bellanti Tiede, Nancy Ann Prof-fitt, Murnane Conlin White & Brandt, St. Paul, MN (for respondent).
    Considered and decided by STONEBURNER, Presiding Judge, CRIPPEN, Judge, and ANDERSON, Judge.
   OPINION

G. BARRY ANDERSON, Judge.

Appellants Michael and Karen Alten-burg sought to build an animal feedlot on their property. Feedlots are prohibited by a Pleasant Mound Township ordinance. Accordingly, appellants commenced the present action alleging that the ordinance is invalid. The district court determined that the township ordinance was valid and entered summary judgment in favor of the township.

On appeal, appellants argue that, in light of county ordinances relating to the same subject matter, the township’s ordinance was invalid and preempted. Appellants also argue that the township’s ordinance is arbitrary and capricious. Because a township has the authority to adopt official controls more restrictive than county controls and because the ordinance is not arbitrary and capricious, we affirm.

FACTS

The present case involves three ordinances — two county ordinances and one township ordinance — all of which purport to set restrictions on animal feedlots. The first of the three ordinances, the Livestock Manure Management Ordinance, was adopted by Blue Earth County in 1994. Under this ordinance, new feedlots of 300 animal units or more are designated as conditional uses. The ordinance also establishes a number of pollution control and setback requirements for feedlot operators.

In 1995, respondent Pleasant Mound Township decided to study the possibility of establishing a comprehensive plan and official controls for the benefit of its citizens. The mainly rural township was concerned about the effects of large commercial developments. Ultimately, the township adopted a moratorium on the construction or expansion of feedlots exceeding a certain number of animal units.

During the township’s moratorium period, the county adopted a second ordinance, the Blue Earth County Land Use Ordinance, which restricted feedlot operations. The ordinance permits feedlots of fewer than 100 animal units. New feedlots of fewer than 100 to 300 animal units are designated conditional uses. The ordinance also establishes setback requirements between feedlots and dwellings.

While the county was adopting its land use ordinance, the township was engaged in planning activities as well. The township established an advisory committee for the purpose of studying planning options. Between February 1996 and October 1997, the advisory committee held numerous meetings, heard from speakers and citizens and studied written materials. Eventually, on October 21, 1997 the township supervisors established a five-member planning commission to draft a comprehensive plan and a zoning ordinance.

On January 20, 1998, after extensive public hearings, the township’s supervisors adopted the commission’s comprehensive plan. The plan detailed objectives and the policies intended to implement those objectives. The goals, policies and objectives of the comprehensive plan were later incorporated into the township’s zoning ordinance.

On March 23, 1998, the township passed its zoning and land use ordinance. The township ordinance limited the number of animal units permissible or conditionally permissible. The ordinance also established various setback requirements. The limitations on animal units and setback requirements in the township ordinance are much more restrictive than the county ordinances.

Appellants Michael and Karen Alten-burg own property in Pleasant Mound Township in Blue Earth County. The county issued appellants a conditional use permit for a feedlot on their property. The proposed feedlot operation, however, is a prohibited use under the township ordinance. Appellants commenced the present action seeking a judgment that the township ordinance is invalid. Appellants claimed that the ordinance was arbitrary and capricious and that it was invalid under the doctrines of preemption and conflict.

Both appellants and the township filed motions for summary judgment. The dis-triet court granted partial summary judgment in favor of the township. The court dismissed all of appellants’ claims except for the claim that the ordinance was arbitrary and capricious. Following a bench trial on this remaining claim, the district court ruled that the ordinance was not arbitrary and capricious and entered judgment in favor of the township.

ISSUES

I. Did the district court err by concluding that, under Minn.Stat. § 394.33 (1996), the township’s ordinance properly established official controls that were more restrictive than those of the county?

II. Did the district court err by determining that the doctrines of preemption and conflict were not applicable to the present case?

III. Is the township’s ordinance arbitrary and capricious?

ANALYSIS

As a preliminary matter, the township contends that there is no controversy before the court because appellants have not applied for, nor been denied, a conditional use permit or a variance from the township. Before challenging an ordinance, a party must exhaust all available administrative remedies. Minn.Stat. § 462.361, subd. 2 (1996). A party is not required to pursue administrative remedies, however, if such attempts would be futile. McShane v. City of Faribault, 292 N.W.2d 253, 256 (Minn.1980). In this case, we reject the township’s argument because the remedies suggested by the township would be pointless and futile. Because appellants’ proposed feedlot is a prohibited use under the ordinance, they could not be granted a conditional use permit. Moreover, a township is prohibited by statute from granting a variance for a use not permitted by the ordinance. Minn.Stat. § 462.357, subd. 6(2) (1996); see also McShane, 292 N.W.2d at 256 (party need not seek a variance where the granting of a variance would undermine the goals of the ordinance).

I.

In reviewing the grant or denial of summary judgment, we must determine whether any genuine issues of material fact exist and whether the district court erred in applying the law. Wartnick v. Moss & Barnett, 490 N.W.2d 108, 112 (Minn.1992). The court must view the evidence in the light most favorable to the party against whom judgment was granted. State by Beaulieu v. City of Mounds View, 518 N.W.2d 567, 571 (Minn.1994). The interpretation of a statute or ordinance is a question of law, which this court reviews de novo. Hibbing Educ. Ass’n v. Public Employment Relations Bd., 369 N.W.2d 527, 529 (Minn.1985).

Townships are vested with the statutory authority to enact official controls, such as zoning ordinances. Minn. Stats. §§ 462.351-.365 (1996 & Supp.1997). Counties are also authorized to adopt official controls by ordinance. Minn.Stat. § 394.24, subd. 1 (Supp.1997). Where the county has adopted official controls applicable to a township, the township’s ability to adopt its own controls is limited:

The governing body of any town including any town with the powers of a statutory city pursuant to law may continue to exercise the authority to plan and zone as provided by law, but after the adoption of official controls for a county or portion thereof by the board of county commissioners no town shall enact or enforce official controls inconsistent with or less restrictive than the standards prescribed in the official controls adopted by the board. Nothing in this section shall limit any town’s power to adopt official controls, including shore-land regulations which are more restrictive than provided in the controls adopted by the county.

Minn.Stat. § 394.33, subd. 1 (1996) (emphasis added).

Appellants argue that the township ordinance is inconsistent with the county ordinances and, therefore, is invalid under Minn.Stat. § 394.33. Appellants would have this court read the last sentence of the statute as two independent clauses: (1) “Nothing in this section shall limit any town’s power to adopt official controls,” and (2) “including shoreland regulations which are more restrictive than provided in the controls adopted by the county.” Thus, according to appellants, the only township controls that can be more restrictive than county controls are shoreland regulations.

The township asks that the court infer a comma after “shoreland regulations.” Under this interpretation, a township would be permitted to adopt more restrictive official controls including, but not limited to, shoreland regulations. Application of the rules of statutory construction leads to the conclusion that the township’s interpretation is correct.

If a statute is unambiguous, this court will look only to the plain meaning of its language. In re Estate of Ablan, 591 N.W.2d 725, 727 (Minn.App.1999). When interpreting an ambiguous statute, effect must be given to the intent of the legislature. Minn.Stat. § 645.16 (1998). Because the statute at issue in the present case is reasonably subject to two different interpretations this court must ascertain the legislature’s intent.

As a general rule of statutory construction, “a statute is to be construed, if possible, so that no word, phrase, or sentence is superfluous, void, or insignificant.” Duluth Firemen’s Relief Ass’n v. City of Duluth, 361 N.W.2d 381, 385 (Minn.1985) (citation omitted). Appellants’ interpretation would leave a superfluous phrase. If the language stating that the section does not limit the town’s power to adopt official controls is left unmodified, that phrase has no meaning. Clearly, the first part of the subdivision does limit the town’s power by restricting it from adopting official controls inconsistent with, or less restrictive than, county controls. The “more restrictive” clause must, therefore, modify the first clause.

The township argues that a prior version of the statute adds to the validity of its interpretation. If statutory language is ambiguous, courts may look to prior versions of the statute to determine legislative intent. Welscher v. Myhre, 231 Minn. 33, 36, 42 N.W.2d 311, 313 (1950). Prior to adoption of the present statute, Minn.Stat. § 394.33 read as follows:

The governing body of any town may continue to exercise the authority to plan and zone as provided by law, but after the adoption of official controls for a county or portion thereof by the board of county commissioners no town shall enact official controls inconsistent with the standards prescribed in the official control adopted by the board. Nothing in this section shall limit any town’s power to zone more restrictively than provided in the controls adopted by the county.

Minn.Stat. § 394.33 (1971) (emphasis added). The changes made by the legislature only expand and clarify the language in the original version and do not evidence an intent to alter the substance. Here, the prior statutory language is a powerful guide to the intention of the legislature.

Appellants nevertheless argue that the township ordinance is “inconsistent” with the county ordinances because it forbids what the county allows. But we construe the term “inconsistent” to mean circumstances where a township implements standards that are different in nature from county standards. For example, a township could not zone an area as a commercial district when the same area has been zoned as a residential district by the county. See Berggren v. Town of Duluth, 304 N.W.2d 24, 26-27 (Minn.1981) (indicating a town’s ordinance zoning three areas as light industrial was inconsistent with a county ordinance that zoned the areas as an environmental district, an agricultural district, and a residential district). Because the township ordinance is more restrictive than, but based on the same standards as, the county ordinances, the ordinance is valid under Minn.Stat. § 394.33.

II. Preemption and Conflict

Appellants argue that the township’s ordinance is preempted by and in conflict with the county ordinances. Minnesota recognizes two separate doctrines that determine preemption questions. The first, referred to specifically as “preemption,” is based on “occupation of the field.” Mangold Midwest Co. v. Village of Richfield, 274 Minn. 347, 356, 143 N.W.2d 813, 819 (1966). A state law may so fully occupy a particular field of legislation that there is no room for local regulation. Id. Under the doctrine of preemption, it does not matter whether the local legislation complements or contradicts the state law. Id. The doctrine of conflict provides that a local ordinance is invalid if its terms are irreconcilable with those of a state law. Id.

Appellants support their arguments with three recent court of appeals decisions reviewing township controls relating to animal feedlots. See Canadian Connection v. New Prairie Township, 581 N.W.2d 391 (Minn.App.1998), review denied (Minn. Sept. 30, 1998); Blue Earth County Pork Producers, Inc. v. County of Blue Earth, 558 N.W.2d 25 (Minn.App.1997), review denied (Minn. Mar. 26, 1997); Board of Supervisors of Crooks Township v. ValAdCo, 504 N.W.2d 267, 269 (Minn.App.1993), review denied (Minn. Sept. 30, 1993). But Canadian Connection, Blue Earth, ValAd-Co all involved challenges to local ordinances on the grounds that they were preempted by or in conflict with the regulations of the MPCA, a state agency. In contrast, appellants do not argue that the MPCA regulations preempt the township’s ordinance. Instead, appellants contend that the doctrines of preemption and conflict should apply between a county and a township. This is a significant distinction.

Both counties and townships are entities of state creation and have only the powers conferred to them by the state. See County of Pine v. State, Dept. of Natural Resources, 280 N.W.2d 625, 629 (Minn.1979) (county ordinances may not exceed a “valid exercise of the police power”); Mangold, 274 Minn, at 357, 143 N.W.2d at 820 (municipality has no inherent powers, only those conferred by statute). Because counties and townships have only the powers granted to them by the state, the doctrines of preemption and conflict apply between the two only insofar as the state has directed. It is conceivable that, absent an express indication of the legislature’s intent on preemption or conflict, the applicability of the doctrines could be implied. See City of Birchwood Village v. Simes, 576 N.W.2d 458, 461 (Minn.App.1998) (affirming the district court’s determination “that the statute creating the [other local governing body] preempts any regulations imposed by the city”). In this case, however, we need not ponder concepts of implied preemption or conflict because the legislature has already expressed its intention with regard to whether a township control is invalidated under those doctrines. That intent is found in Minn.Stat. § 394.33.

To a certain extent, counties have been given priority over township in matters of zoning. Berggren, 304 N.W.2d at 27. Nevertheless, by allowing townships to enact more restrictive ordinances, the legislature has made it clear that the doctrine of preemption does not preclude all township ordinances that cover the same subject matter as county controls. See Minn. Stat. § 394.33, subd. 1. Moreover, because the township is expressly authorized to prohibit what the county might permit, the usual rules of the conflict doctrine also do not apply. See Mangold, 274 Minn. at 352, 143 N.W.2d at 816 (holding that “a conflict exists where the ordinance forbids what the statute expressly permits”). Simply stated, the preemptive effect of a county ordinance is delineated by Minn.Stat. § 394.33 and, as discussed above, the township ordinance does not exceed the authority permitted by the statute.

III. Arbitrary and Capricious

Appellants’ final argument is that the township’s ordinance is arbitrary and capricious. Local ordinances bear a presumption of constitutionality. City of Richfield v. Local No. 1215, Int’l Ass’n of Fire Fighters, 276 N.W.2d 42, 45 (Minn.1979). The party challenging an ordinance has the burden of proving its invalidity. Sun Oil Co. v. Village of New Hope, 300 Minn. 326, 334, 220 N.W.2d 256, 261 (1974). The challenger must show that a zoning classification is “unsupported by any rational basis related to promoting the public health, safety, morals, or general welfare.” State, by Rochester Ass’n of Neighborhoods v. City of Rochester, 268 N.W.2d 885, 888 (1978). As long as the reasonableness of the ordinance is debatable this court will not interfere with the township’s discretion. Id. In determining whether a zoning ordinance is valid, this court conducts a review of the township’s decision independent of the findings and conclusions of the district court. VanLandschoot v. City of Mendota Heights, 336 N.W.2d 503, 508 (Minn.1983).

Appellants imply that the ordinance, at least to some extent, is invalid because of the township’s failure to consider materials on the cap of the number of animal units permissible. This court has noted, however, that ordinances are not invalidated because of the failure to review empirical evidence, but rather that they are invalidated because they lack a rational basis. (Holt v. City of Sauk Rapids, 559 N.W.2d 444, 445-46 Minn.App.1997), review denied (Minn. Apr. 24, 1997). Moreover, in reviewing the zoning decision of a township, courts are permitted to consider evidence that was not before the local body so long as it is relevant to the issues considered by the township in making its decision. Honn v. City of Coon Rapids, 313 N.W.2d 409, 416 (Minn.1981).

We note that the township conducted detailed and lengthy studies before enacting its zoning ordinance. We are also cognizant of the fact that this court has found valid similar restrictions on animal feedlots. See Canadian Connection, 581 N.W.2d at 395 (holding valid a township ordinance imposing setback requirements on animal feedlots where the ordinance was intended to prevent odor pollution). As a matter of public policy, whether the county’s approach is preferable is not for this court to say. Indeed, whether the county, the township, both or neither should determine these contentious issues is a matter for the legislature to resolve.

Bearing in mind the presumption of validity and the voluminous evidence in support of the ordinance, we conclude that the district court did not err in determining the township ordinance was not arbitrary and capricious.

DECISION

The district court did not err by determining that the township zoning ordinance is valid.

Affirmed.


author: PER CURIAM.

text:
    2000 SD 107
    Elliott A. BEERS, Jr., Plaintiff and Appellee, v. PENNINGTON COUNTY, South Dakota, Defendant and Appellant.
    No. 21212.
    Supreme Court of South Dakota.
    Considered on Briefs April 24, 2000.
    Decided Aug. 16, 2000.
    Timothy J. Becker of Midland Professional Associates, Rapid City, Attorneys for plaintiff and appellee.
    Ronald D. Buskerud, Pennington County, Deputy State’s Attorney, Rapid City, Attorney for defendant and appellant.
   PER CURIAM.

[¶ 1.] In this appeal we affirm the circuit court and hold that a self-employed person’s failure to purchase health insurance, despite his apparent financial ability to do so, does not preclude him from qualifying for assistance as a medically indigent person under SDCL ch 28-13.

FACTS AND PROCEDURE

[¶2.] This case was presented to the circuit court on stipulated facts. Elliott A. Beers, Jr., a 63-year-old resident of Pennington County, was admitted to Rapid City Regional Hospital May 1, 1998 for emergency medical care related to heart problems. He was diagnosed with dilated cardiomyopathy, left ventricular thrombosis, severe mitral regurgitation and encephalopathy. During his seven-week hospitalization, his lower limbs were amputated. He was discharged June 19 to a nursing home.

[¶3.] At the time he was hospitalized, Beers was self-employed as a small engine repairperson. He did not have health insurance. From May 1995 to May 1998, he carried a balance in his bank account ranging between $4,600 and $11,000. Within fifteen days of Beers’ admission, pursuant to SDCL 28-13-34.1, Hospital notified County of his hospitalization. Upon his discharge, Hospital provided County with an itemized statement of charges totaling $113,536.08 for his care. Beers sought assistance for payment of his hospital bill through veterans’ benefits, Social Security Disability, Medicaid, and Social Security Supplementary Security Income. He received no financial aid from these sources.

[¶ 4.] On September 25, 1998, Beers applied to County seeking assistance with payment of his hospital bill pursuant to SDCL ch. 28-13. County determined he was ineligible for county assistance under SDCL 28-13-27(6) on the basis that he was “indigent by design” for failure to purchase health insurance prior to hospitalization when financially able to do so.

[¶ 5.] Beers appealed this decision to the circuit court which held he was income and resource eligible for county assistance, and thus entitled to payment of his medical bills under SDCL ch. 28-13. The court also found Beers did not have health insurance but had the financial ability to purchase such insurance. The court concluded that despite this ability to purchase insurance, Beers was a medically indigent person as defined by SDCL 28-13-1.3 and therefore eligible for county assistance. The circuit court reversed the decision of County and entered summary judgment for Beers. County appeals.

ANALYSIS AND DECISION

[¶ 6.] Beers makes no argument on appeal that he was financially unable to purchase health insurance. There was no evidence presented that he was uninsura-ble. The issue is whether a resident of a county, determined to be income and resource eligible for county, assistance under SDCL ch. 28-13, is indigent by design and thus precluded from such assistance when he failed to purchase health insurance although he was financially able to do so. This is a matter of first impression in this state and is purely a question of statutory construction, reviewable de novo. Lucero v. Van Wie, 1999 SD 109, ¶ 6, 598 N.W.2d 893, 895 (citing LPN Trust v. Farrar Outdoor Advertising, Inc., 1996 SD 97, ¶ 8, 552 N.W.2d 796, 798). “Since there are no factual issues in this case, summary judg ment will be affirmed if the trial court correctly decided the legal issues presented.” Id. (citing Ward v. Midcom, Inc., 1998 SD 10, ¶ 9, 575 N.W.2d 233, 236).

[¶ 7.] The duty of a county to provide poor relief to its indigent residents is statutory and predates statehood. Revised Dakota Territory Laws of 1877, PolC ch. 33, § 4; Dakota Territory Compiled Laws of 1887, PolC ch. 22, § 2143; Hamlin County v. Clark County, 1 S.D. 131, 137, 45 N.W. 329, 331 (1890) (noting our “poor laws” were adopted from Indiana’s and the obligation is purely statutory); In re Appeal of Presentation Sisters, Inc., 471 N.W.2d 169, 174 (S.D.1991). Because the expenditure of public funds is involved, we have- strictly construed SDCL ch. 28-13. Id.) Sioux Valley Hosp. Ass’n v. Davison County, 298 N.W.2d 85 (S.D.1980).

[¶ 8.] SDCL 28-13-1 provides that “[e]very county shall relieve and support all poor and indigent persons who have established residency therein, as that term is defined in §§ 28-13-2 to 28-13-16.2, inclusive, and who have made application to the county, whenever they shall stand in need.” The term “medically indigent” is defined by statute:

A medically indigent person is one who meets the following criteria:
(1) Requires medically necessary hospital services for which no public or private third-party coverage, such as insurance, veterans’ assistance, medicaid, or medicare, is available which covers the actual cost of hospitalization;
(2) Has no ability or only limited ability, as determined under the provisions of this chapter, to pay a debt for hospitalization;
(3) Has not voluntarily reduced or eliminated ownership or control of an asset for the purpose of establishing eligibility;
⅜) Is not indigent by design; and
(5) Is not a veteran or a member of a Native American tribe who is eligible or would have been eligible for services through the Veterans’ Administration or the Indian Health Service if the services had been applied for within seventy-two hours of the person’s admission.

SDCL 28-13-1.3 (emphasis added). SDCL 18-13-27(6) further defines “indigent by design” as an individual who meets any of the following criteria:

(a) Is able to work but has chosen not to work;
(b) Is a student at a postsecondary institution who has chosen not to purchase health insurance;
(c) Has failed to purchase health insurance 'which ivas made available through the individual’s employer; or
(d) Has transferred resources for purposes of establishing eligibility for medical assistance available under the provisions of this chapter. The lookback period for making this determination includes the thirty-six month period immediately prior to the onset of the individual’s illness and continues through the period of time for which the individual is requesting services.

(emphasis added). This section, and SDCL 28-13.1.3 in its entirety, were enacted by the legislature in 1997. Prior to that time, the concept of “indigent by design” did not exist in our poor relief statutes. SDCL 28-13-32.10, also enacted in 1997, provides that “[i]f an individual is indigent by design, the individual is ineligible for medical assistance under the provisions of this chapter and there may be no other criteria used to determine eligibility.”

[¶ 9.] The particular statutory provision at issue in this appeal is SDCL 28-13-27(6)(c): An individual is “indigent by design” who “[h]as failed to purchase health insurance which was made available through the individual’s employer.”

One of the primary rules of statutory ... construction is to give words and phrases their plain meaning and effect. This court assumes that statutes mean what they say and that legislators have said what they meant. When the language of a statute is clear, certain and unambiguous, there is no occasion for construction, and the court’s only function is to declare the meaning of the statute as clearly expressed in the statute.

Zoss v. Schaefers, 1999 SD 105, ¶ 6, 598 N.W.2d 550, 552 (quoting South Dakota SIF v. CRE, 1999 SD 2, ¶ 17, 589 N.W.2d 206, 209). Applying the plain meaning rule of statutory construction, it is clear that neither SDCL 28-13-1.3 nor 28-13-27(6) requires Beers to purchase health insurance and, as a self-employed person, he has no insurance available to him through an employer.

[¶ 10.] County asks this Court to hold both that self-employed persons are employers in this instance and that health insurance is “made available” by an individual’s employer if that person is insurable and has the financial resources to obtain insurance. Adoption of this argument would expand the statutory language beyond its plain meaning. “[T]his Court ‘must assume that the legislature meant what the statute says and therefore give its words and phrases a plain meaning and effect.’ ” McIntyre v. Wick, 1996 SD 147, ¶ 51, 558 N.W.2d 347, 362 (quoting Nilson v. Clay County, 534 N.W.2d 598, 601 (S.D.1995)). In addition, as previously noted, this state’s poor relief statutes are strictly construed. Sioux Valley Hosp. Ass’n, supra. Nothing in the statutes required Beers to purchase health insurance. He has already been found to be income and resource eligible for county assistance, a determination that is not appealed or argued to this Court. Under a plain reading of the law, he is medically indigent.

[¶ 11.] “The remedy is entirely statutory. If the statutes are found to be wanting, the remedy should be addressed to the legislature.” In re Certification of Question of Law, 402 N.W.2d 340, 343 (S.D.1987) (quoting Sioux Valley Hosp. Ass’n, 298 N.W.2d at 87).

The duty of supporting the poor, aiding poor people, or those temporarily requiring assistance, may be imposed by the legislature upon counties or towns in such manner as it may deem expedient. There is no question of moral obligation involved.... It is simply a question of public policy, and, being such, is entirely within the control of the legislature.

Hamlin County, 1 S.D. at 138, 45 N.W. at 331.

[¶ 12.] Beers informs this Court that County did look to the legislature for a remedy and in fact proposed legislation to revise the definition of “indigent by design.” The following amendment to SDCL 28-13-27(6), quoted below in pertinent part, became effective July 1, 2000:

(c) Has failed to purchase or elect major medical health insurance or health benefits made available though an employer-based health benefit plan although the person was financially able, pursuant to § 28-13-32.11, to purchase or elect the insurance or health benefits;
(d) Has failed to purchase available major medical health insurance although the individual was insurable and was financially able, pursuant to § 28-13-32.11, to purchase the insurance. For purposes of this subdivision, an individual is presumed insurable unless the individual can produce sufficient evidence to show that the individual was declined major medical insurance by an insurance company and the individual did not qualify for any guarantees of major medical insurance available through any legal or contractual right that was not exercised!.]

SL 2000, ch. 134, § 1. We recently stated that:

When an amendment is passed, it is presumed the legislature intended to change existing law. An amendment indicates a change in rights:
The courts have declared that the mere fact that the legislature enacts an amendment indicates that it thereby intended to change the original act by creating a new right or withdrawing an existing one. Therefore, any material change in the language of the original act is presumed to indicate a change in legal rights.

South Dakota SIF, 1999 SD 2, ¶ 18, 589 N.W.2d at 210 (quoting 1A, Sutherland, Statutory Construction, § 22.30 (5thed. 1991) (internal citations omitted)).

[¶ 13.] Neither party has suggested that this amendment be retroactively applied to Beers. Perhaps that is because the law does not permit it. SDCL 2-14-21 (newly enacted statutes will not be given a retroactive effect unless such an intention is plainly expressed by the legislature); Lyons v. Lederle Lab., 440 N.W.2d 769, 770 (S.D.1989) (statutes affecting substantive rights are not given retroactive effect). The amended statute does not apply as it was not in effect when Beers was hospitalized and then applied for county assistance in 1998. Therefore, we do not further address it.

[¶ 14.] Under the plain meaning of the applicable statute, Beers’ failure to purchase health insurance despite his apparent financial ability to do so does not preclude him from being medically indigent. We affirm.

[¶ 15.] MILLER, Chief Justice, and SABERS, AMUNDSON, KONENKAMP, and GILBERTSON, Justices, participating.