author: HALBROOKS, Judge.

text:
    Katherine GRIFFIS, Respondent, v. Marianne LUBAN, Appellant.
    No. C3-01-296.
    Court of Appeals of Minnesota.
    Sept. 11, 2001.

      Peter Erlinder, St. Paul, MN, (admitted pro hac vice); and Ralph Overholt, Hopkins, MN, (for respondent).
    John P. Borger, C. David Flower, Faegre & Benson, Minneapolis, MN, (for appellant).
    Considered and decided by WILLIS, Presiding Judge, HALB ROOKS, Judge and PARKER, Judge.

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

   OPINION

HALBROOKS, Judge.

Respondent Katherine Griffis obtained a default injunction in a defamation action against appellant Marianne Luban in Alabama and sought to enforce it in Minnesota. The district court found that Alabama’s long-arm statute permitted the exercise of personal jurisdiction over appellant. The court, therefore, concluded that it must give full faith and credit to the Alabama decision. Appellant contends that she did not have minimum contacts with Alabama and was not constitutionally subject to personal jurisdiction there, and that the injunction issued by the Alabama court was inequitable and in violation of the First Amendment’s prohibition against prior restraint. Because the district court properly found that Alabama could exercise personal jurisdiction over appellant, we affirm. But because the issue of whether the injunction violates the First Amendment was not addressed by the district court, we reach no conclusion on that issue.

FACTS

This case originally came before this court on the procedural issue of whether entering a judgment was illegal when it was based on a referee’s decision without countersignature or review by a judge. Griffis v. Luban, 601 N.W.2d 712, 714 (Minn.App.1999). Because this court vacated the judgment, it declined to reach the merits of the claim. Id. at 716.

Respondent Katherine Griffis is a resident of Alabama. She teaches noncredit courses in ancient Egyptian history and culture at the University of Alabama at Birmingham, and she is also a self-employed consultant on museums, international protocol, grant-development activities, and other matters. Respondent frequently uses the internet to communicate with clients and other business contacts and tq solicit prospective clients.

Both respondent and appellant Marianne Luban, a Minnesota resident, participated in an internet newsgroup on archeology. A newsgroup addresses a specific topic and allows anyone with an interest in the topic to “chat,” or to exchange information and engage in discussions or debates by posting messages on a website. It is unclear from the record who or what organization maintained this newsgroup.

A dispute arose between respondent and appellant over the topic of Egyptology. In December 1996, appellant posted a message challenging respondent’s credentials as an Egyptologist and alleging that respondent had received her degree from a “Cracker Jack box.” Respondent responded to the posting by citing her professional credentials in a private e-mail to appellant, and the University of Alabama posted a message verifying that respondent had taught noncredit courses in Egyptian history and culture in the university’s special-studies department since 1980. Appellant continued posting messages that disputed respondent’s credentials and accused her of being untruthful.

In May 1997, respondent’s attorney sent appellant a letter stating that respondent had obtained legal representation “to put a stop to [appellant’s] periodic attacks on [respondent’s] character and professional reputation.” The attorney demanded that appellant refrain from making future attacks against respondent and retract any and all false statements. Appellant was advised that failure to comply would result in legal action. Appellant continued her postings, and it is estimated that between December 1996 and June 1998, appellant posted to the chat line approximately 100 derogatory messages about respondent.

In October 1997, respondent brought a defamation claim against appellant in Alabama state court. Appellant did not answer the complaint or make any appearance in the Alabama action, and respondent obtained a $25,000 default judgment against appellant. Respondent also obtained an injunction prohibiting appellant from asserting or implying that respondent misrepresented her credentials. After respondent filed the Alabama judgment in Ramsey County District Court, appellant moved to vacate the Alabama judgment on the ground that the Alabama court lacked personal jurisdiction over her.

On May 15, 2000, a hearing was held in district court. Appellant reiterated her argument that Alabama lacked personal jurisdiction and, therefore, the default judgment could not be enforced in Minnesota. Appellant also argued that the injunction violated the First Amendment. The district court found that the Alabama court had personal jurisdiction over appellant and, therefore, the judgment must be given full faith and credit. The court did not make any findings or legal conclusions on the First Amendment issue. This appeal follows.

ISSUES

I. Did Alabama have personal jurisdiction over appellant?

II. Does the injunction violate the First Amendment?

ANALYSIS

I.

Whether personal jurisdiction exists is a question of law and, therefore, our review is de novo. State Inc. v. Sumpter & Williams, 553 N.W.2d 719, 721 (Minn.App.1996). “If the defendant does not appear in the foreign proceedings and does not litigate the issue of personal jurisdiction, the foreign judgment does not have res judicata effect on that issue.” Corsica Cheese, Inc. v. Roers Enters., Inc., 389 N.W.2d 751, 753 (Minn.App.1986) (citation omitted).

Under the Uniform Enforcement of Foreign Judgment Acts, Minn.Stat. § 548.27 (2000), Minnesota will not give full faith and credit to a foreign court’s judgment if that court lacks proper personal jurisdiction. Electro-Measure, Inc. v. Ewald Enters., Inc., 398 N.W.2d 85, 88 (Minn.App.1986), review denied (Minn. Mar. 13, 1987). To acquire personal jurisdiction, the foreign court must comply with its own state’s laws regarding jurisdiction and with the Due Process Clause of the United States Constitution. S.V. Mgmt. Co. v. Ellis, 472 N.W.2d 674, 676 (Minn.App.1991), revieio denied (Minn. Sept. 13, 1991). In determining whether the foreign court properly obtained personal jurisdiction, this court must apply the law of the foreign state as construed by the courts of that state. Id.

We recently addressed whether Minnesota courts could exercise personal jurisdiction over a foreign resident who made a defamatory statement regarding a Minnesota corporation over the internet. N.W. Airlines, Inc. v. Friday, 617 N.W.2d 590 (Minn.App.2000). Our holding that personal jurisdiction did not exist turned on a specific provision in Minnesota’s long-arm statute, which limits the statute’s reach over defamation claims. Id. at 593 (discussing MinmStat. § 543.19, subd. 1(d)(3) (2000)).

But jurisdiction here turns on Alabama’s long-arm rule, and it does not have a special exclusion for defamation. The reach of the Alabama long-arm rule over a nonresident defendant extends to the permissible limits of due process under the Fourteenth Amendment. Lowry v. Owens, 621 So.2d 1262, 1264 (Ala.1993). Therefore, our inquiry concerns constitutional, not statutory, principles — whether Alabama can exercise personal jurisdiction over appellant without violating the Due Process Clause.

To satisfy due process requirements, the nonresident defendant must “have certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” Larson v. Dunn, 460 N.W.2d 39, 43 (Minn.1990) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (citation omitted)) (alteration in original). In determining what constitutes minimum contacts, a district court must focus on “the relationship among the defendant, the forum, and the litigation.” Colder v. Jones, 465 U.S. 783, 788, 104 S.Ct. 1482, 1486, 79 L.Ed.2d 804 (1984) (quotation omitted). “This relationship is defined by the defendant’s contacts with the forum state, not with its residents.” Larson v. Dunn, 449 N.W.2d 751, 759 (Minn.App.1990), aff'd, 460 N.W.2d 39 (Minn.1990).

The Alabama courts have construed the minimum-contacts requirement to mean that “[t]here must be some contact with the state that results from an affirmative act of the defendant.” Williams, 781 So.2d at 246 (citing Ala. R. Civ. P. 4.2 comm. cmt.). Similarly, we have found that a single act may be enough to establish personal jurisdiction, but if jurisdiction is based on such a singular occurrence, the nature and quality of the contact becomes dispositive. Johnson v. Sel-mor Distrib. Co., 430 N.W.2d 495, 497 (Minn.App.1988), review denied (Minn. Dec. 21, 1988). For example, a single telephone call is unlikely to constitute sufficient contact. Kittle Heavy Hauling v. Gary A. Rubel, Inc., 647 So.2d 743, 744 (Ala.Civ.App.1994) (“The use of an interstate facility (i.e., telephone) is an ancillary factor and does not, alone, provide the requisite minimum contacts.” (citation omitted)). The unilateral activity of one party claiming a relationship with a nonresident party will not satisfy the requirement of minimum contacts with the forum state. Id. (relying on Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)).

In reviewing the district court’s determination, we find Calder v. Jones especially instructive. In that case, the Supreme Court held that personal jurisdiction properly could be exercised over nonresident media when the effects of their intentional conduct were felt in the forum state. Calder, 465 U.S. at 787 n. 6 & 790, 104 S.Ct. at 1485 n. 6 & 1487. The plaintiff was a California resident and the subject of an article in a national newspaper. Id. at 785, 104 S.Ct. at 1484. In addition to suing the newspaper, she also named the article’s author and its editor as defendants. Id. Because they lived and worked in Florida, the employees argued that they could not be haled into a California court as they had “no direct economic stake in their employer’s sales in a distant State. Nor are ordinary employees able to control their employer’s marketing activity.” Id. at 789, 104 S.Ct. at 1487.

The Supreme Court rejected the employees’ arguments, finding that their lack of an economic contact with California was irrelevant. Id. Such contact might be meaningful in a case alleging negligence, but here, the employees were being accused of an intentional tort that was aimed at the forum state. Id. The employees prepared

an article that they knew would have a potentially devastating impact upon [the plaintiff]. And they knew that the brunt of that injury would be felt by [the plaintiff] in the State in which she lives and works and in which [their employer] has its largest circulation. Under the circumstances, [the employees] must “reasonably anticipate being haled into court there” to answer for the truth of the statements made in their article. An individual injured in California need not go to Florida to seek redress from persons who, though remaining in Florida, knowingly cause the injury in California.

Id. at 789-90, 104 S.Ct. at 1487 (quotations omitted).

Likewise, we agree with the district court in holding that, consistent with the Fourteenth Amendment, Alabama could exercise personal jurisdiction over appellant. First, appellant should have foreseen that she might be sued in Alabama because she had actual knowledge of the effect that her messages were having in Alabama. The messages appellant posted directly attacked the professional credentials of respondent and were related to her employment in Alabama.

Appellant contends that she lacked actual knowledge because she did not know that respondent lived in and worked from Alabama. But this statement rings false. On December 23, 1996, the University of Alabama posted information about respondent’s relationship with the university. The district court found that this verification of respondent’s employment indicated that appellant’s postings were reaching Alabama and affecting respondent’s professional standing in Alabama. Additionally, the May 20, 1997 letter from respondent’s attorney to appellant stated that appellant’s accusations impugned respondent’s professional reputation and threatened her business. Despite being warned that her actions were affecting respondent, appellant continued to make postings.

Second, appellant made multiple contacts with the foreign state. We have previously dismissed defamation claims for want of personal jurisdiction where the defendant had no connection with Minnesota. E.g., Johnson, 430 N.W.2d at 498 (holding a Wisconsin corporation that was not licensed to conduct business in Minnesota and had sporadic business dealings with Minnesota companies did not have sufficient minimum contacts). While we agree with appellant that she had no economic contacts with Alabama, we disagree that she did not establish a connection with that state. Appellant repeatedly made postings, even after she was threatened with legal action. Although the postings were not made in Alabama, these repeated messages could be — and were — received in Alabama. Just as the employees in Colder were aware that their article would be carried outside their home state’s boundaries, appellant wrote messages that she knew would be read in a foreign state. She was also aware that her messages were causing damage in Alabama. Although a Minnesota resident, appellant should have realized that by making potentially defamatory statements that were being read in Alabama, she could be haled into court in Alabama to prove the truth of those statements. Therefore, we agree with the district court that the Alabama court had personal jurisdiction over appellant.

II.

Appellant also argues that the injunction violates the First Amendment. Because of this alleged illegality, appellant argues that the district court erred when it found in favor of respondent. The First Amendment plays no role in the jurisdictional analysis. Colder, 465 U.S. at 790, 104 S.Ct. at 1487. This issue, however, is not properly before us in the context of this appeal from the order and judgment from December 2000.

DECISION

The district court did not err in determining that the Alabama court had personal jurisdiction over appellant. The issue of whether the injunction violates the First Amendment is not before this court in this appeal.

Affirmed.

      . Alabama does not have a long-arm statute; its rules of civil procedure provide an equivalent legal basis. Williams v. Skysite Communications Corp., 781 So.2d 241, 245 (Ala.Civ.App.2000). The jurisdictional rule provides that an
      [ajppropriate basis exists for service of process outside of this state upon a person in any action in this state when
      (A) the person is, at the time of the service of process, either a nonresident of this state or a resident of this state who is absent from the state, and
      (B) the person has sufficient contacts with this state * * * so that the prosecution of the action against the person in this state is not inconsistent with the constitution of this state or the Constitution of the United States * * *.
      Ala. R. Civ. P. 4.2(a)(1).


source: Caselaw Access Project

author: LINDBERG, Judge. RANDALL, Judge

license: Public Domain

text:
    STATE of Minnesota, Appellant, v. Stephen Daniel ANGOTTI, Respondent.
    No. C7-01-642.
    Court of Appeals of Minnesota.
    Sept. 11, 2001.
    Mike Hatch, Attorney General, St. Paul; and James C. Backstrom, Dakota County Attorney, Kaarin Long, Assistant Dakota County Attorney, Hastings, for appellant.
    Mark D. Nyvold, Richard J. Malacko, St. Paul, for respondent.

      Considered and decided by RANDALL, Presiding Judge, HANSON, Judge, and LINDBERG, Judge.

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

   OPINION

LINDBERG, Judge.

The state appeals the district court’s order for a stay of adjudication of respondent Stephen Daniel Angotti’s conviction for wrongfully obtaining public assistance. Because the district court has abused its discretion by failing to articulate adequate reasons to support its stay of adjudication order, we reverse and remand.

FACTS

Respondent Stephen Daniel Angotti received public assistance from the Minnesota Family Investment Program and food stamps from May 1998 through March 2000. Angotti owns a cleaning company, which received its income through a contract with Huber Commercial Services. Angotti failed to report all of his income to Dakota County even though he was informed that he had to report all forms of income and that failure to due so was a crime. The county calculated that it had overpaid Angotti approximately $11,720.

Angotti was charged with four counts of theft by wrongfully obtaining public assistance, Minn.Stat. §§ 256.98, 393.07 (2000). Angotti pleaded guilty to count two for wrongfully obtaining public assistance from November 1998 to April 1999. Pursuant to the plea bargain, the remaining charges were dropped and Angotti agreed to make restitution of $11,720. The state indicated that it would seek a felony presumptive sentence of twelve months and one day stayed incarceration.

The district court ordered completion of a pre-sentence investigation report. The PSI recommended stayed imposition of a sentence for up to five years, with certain conditions. The PSI also indicated that Angotti’s wife, also charged with wrongfully obtaining public assistance, was allowed to enter a diversion program.

At the sentencing hearing, Angotti told the district court that his lack of understanding about the reporting requirements had led to his underreporting of income. Angotti stated that he thought that the money he received from Huber Commercial Services used to pay his employees was not considered income. He admitted that he had poor record-keeping practices. In addition, Angotti stated that a felony conviction would make it impossible for his company to obtain cleaning contracts because he would have to undergo criminal-background checks.

The district court, sua sponte, ordered a stay of adjudication and placed Angotti on probation for up to five years. The court stated:

In view of the circumstances and overall record of this case, this Court feels that perhaps the state may have had an uphill battle in proving the elements, especially the element of intent, beyond a reasonable doubt had this case gone to trial. However, Mr. Angotti has admitted wrongdoing and there should be consequence[s].
Under the unusual circumstances and confusion of this particular case and the facts related to this Court, I am going to stay adjudication of sentence in this matter, place you on probation for a period of zero to five years.

The state appeals the district court’s order for a stay of adjudication.

ISSUE

Did the district court clearly abuse its discretion at sentencing by deferring adjudication of conviction?

ANALYSIS

Where a defendant has been found guilty, by his plea, the district court has the “inherent judicial power” to stay the ultimate adjudication of guilt. State v. Foss, 556 N.W.2d 540, 541 (Minn.1996); State v. Krotzer, 548 N.W.2d 252, 254-55 (Minn.1996). “Stays are the ‘final disposition of a criminal case.’ ” State v. Lattimer, 624 N.W.2d 284, 286 (Minn.App.2001) (quoting Krotzer, 548 N.W.2d at 254) (emphasis added), review denied (Minn. May 15, 2001). “[W]ith a stay of adjudication, the district court has the power to impose terms and conditions of probation,” including incarceration for up to 12 months. Id. The stay of adjudication, as applied in this case, is a sentencing function of the district court. Id. at 287, 290. As noted in the concurring opinion in Lattimer, “[njeither Krotzer nor Foss, nor their progeny, make evident the appropriate standard of review for the appellate courts.” Id at 291. As sentencing guidelines require adequate written reasons for departing from the guidelines for durational and dispositional departures, there is also need for adequate reasons for stays of adjudication. See Minn. Sent. Guidelines II.D. The need for a stay of adjudication, a sentencing function, must be substantial and compelling, as in Lattimer. Id. We will reverse a district court’s decision regarding sentencing only for “a clear abuse of discretion.” Lattimer, 624 N.W.2d at 290 (citing State v. Lundberg, 575 N.W.2d 589, 591 (Minn.App.1998), review denied (Minn. May 20, 1998)).

The district court must provide reasons, in writing or on the record, supporting an order for a stay of adjudication. State v. Ohrt, 619 N.W.2d 790, 792 (Minn.App.2000); see, e.g., Lattimer, 624 N.W.2d at 290 (stating district court considered the offense, the defendant’s conduct, the recommendations of the victim and the victim’s family, and the pre-sentence investigation report). The district court did not clearly articulate any adequate reasons to support its sentencing order.

The district court stated that “perhaps the state may have had an uphill battle in proving the elements, especially the element of intent.” The issue of intent, stemming from Angotti’s “confusion” about common business practices and the rules defining reportable income, is irrelevant, however. The supreme court stated that a stay of adjudication should be employed only for injustices “resulting from the prosecutor’s clear abuse of discretion in the exercise of the charging function.” State v. Foss, 556 N.W.2d 540, 541 (Minn.1996). This statement has been interpreted to mean that the court may assess whether “the state had sufficient evidence to prove that an offense had occurred.” See Lattimer, 624 N.W.2d at 291 (Crippen, J., concurring).

But the weight of evidence supporting a charge is largely beside the point when considering the cause for staying an adjudication, as it no doubt was in Krotzer and the subsequent cases that address the same issue. What was at issue in those cases was whether the trial court had cause to strongly question whether the prosecution erred in its insistence that a conviction be recorded, perhaps when it brought the charges * * * but more commonly when the ease advanced to the point where an adjudication and disposition might occur.

Id.

In this case, unlike Lattimer, the record does not appear to establish that a conviction should be deferred. In Lattimer, the defendant had formed an unusually strong bond with the victim, and if the defendant lost his driver’s license as a result of having a felony conviction “the victim would [have lost] his connection to the community, and the victim’s mother would [have lost] her support.” 624 N.W.2d at 290; see, e.g., Krotzer, 548 N.W.2d at 254 (stating district court’s determination that defendant’s situation “warranted unusual judicial measures” was supported “by the special circumstances” of the case).

In this case, the record does not show that special circumstances exist making a stay of adjudication necessary to the furtherance of justice. See Krotzer, 548 N.W.2d at 255. Neither party requested a stay of adjudication, and the PSI recommended a stay of imposition. The fact that the defendant could lose his business because he would not be able to obtain contracts is a collateral consequence that does not support a stay of adjudication. State v. Twiss, 570 N.W.2d 487, 487 (Minn.1997); State v. Scaife, 608 N.W.2d 163, 164 (Minn.App.2000), review denied (Minn. May 16, 2000). The record does not show that the district court considered any other factors to support its decision.

We are mindful of the problems inherent in crowded dockets and the potential for abuse of the stay of adjudication process, as stated in the dissents in Krotzer and Foss. Krotzer, 548 N.W.2d at 256 (Coyne, J., dissenting); State v. Foss, 554 N.W.2d 82, 84-85 (Minn.App.1996) (Harten, J., dissenting). The standards set out herein will keep in check some of the potential abuse of the separation-of-powers argument articulated in Krotzer and Foss.

DECISION

The district court clearly abused its discretion in deferring adjudication of a conviction without providing adequate reasons to support that decision. We remand to the district court to provide adequate reasons supporting a stay of adjudication or to impose a sentence under the sentencing guidelines.

Reversed and remanded.

RANDALL, Judge

(dissenting).

I respectfully dissent. The majority correctly notes that we reverse district court decisions regarding sentencing only for “a clear abuse of discretion.” State v. Lattimer, 624 N.W.2d 284, 290 (Minn.App.2001) (citation omitted), review denied (May 15, 2001). I do not find any clear abuse of discretion here by the district court. I would have affirmed.


author: G. BARRY ANDERSON, Judge.

text:
    CUP FOODS, INC., a Minnesota Corporation, and its President Samir Hamaden Abumayyaleh, Relators, v. CITY OF MINNEAPOLIS, Respondent.
    No. C2-01-399.
    Court of Appeals of Minnesota.
    Sept. 11, 2001.

      Ronald I. Meshbesher, Jonathan M. Peck, Meshbesher & Spence, Ltd., Minneapolis, for relators.
    Jay M. Heffern, Minneapolis City Attorney, Scott Reeves, Assistant Minneapolis City Attorney, Minneapolis, for respondent.
    Considered and decided by G. BARRY ANDERSON, Presiding Judge, R.A. RANDALL, Judge, and ROBERT H. SCHUMACHER, Judge.
   OPINION

G. BARRY ANDERSON, Judge.

Respondent city stayed revocation of relator’s business licenses subject to store closure for six months and compliance thereafter with several conditions. Relator argues that respondent’s decision is not supported by substantial evidence and that the sanction was arbitrary and capricious. Relator also argues that the administrative law judge (ALJ) abused her discretion by denying his motion to strike testimony concerning controlled drug buys. We conclude that there is substantial evidence to support respondent city’s finding of good cause for adverse license action against relator. In addition, because relator did not make a timely motion to strike, we conclude that the ALJ acted within her discretion by denying the motion. But because respondent deviated from the ALJ’s recommendations when imposing its sanction, without making findings explaining the reasons for doing so, we reverse and remand.

FACTS

In 1989, relator Samir Abumayyaleh opened a convenience store at the northeast corner of 38th Street and Chicago Avenue South in Minneapolis. The store sold groceries and the usual convenience items. Eventually, relator added numerous goods and services to the store, including a delicatessen, cellular phone and pager sales, tobacco products, and off-sale 3.2 beer.

Respondent City of Minneapolis issued CUP Foods (Chicago Unbeatable Prices) four licenses: (1) grocery store; (2) food manufacturer; (3) tobacco dealer; and (4) off-sale 3.2 beer vendor. Respondent first issued the licenses in 1989 and each is subject to annual renewal. Relator’s family, including his father and two younger brothers, work at the store, but relator also employs other workers. Relator’s younger brother Nabil, known as “Billy,” one of the store employees, has a prior felony conviction for auto theft.

CUP Foods is located in a high-crime area of Minneapolis and, not surprisingly, experienced problems with loitering and drug activity in and around the store. In 1991, relator complained to respondent about the loitering problem, and at a city crime specialist’s recommendation, relator placed two yellow “no trespassing” signs outside his store. Respondent conditioned relator’s licenses on reduced hours of operation. On several occasions, however, the store remained open after the designated closing time.

In 1993, after receiving additional complaints about loitering and drug activity-near CUP Foods, respondent scheduled a committee meeting to consider adverse license action. As a result of the meeting, relator agreed to remove public pay phones, hire off-duty police officers for security, reduce hours of operation, hire older employees for evening shifts, report drug activity to police, and remove signs blocking store windows. Relator understood that failure to comply with the agreed-on conditions could result in revocation, suspension, or non-renewal of his licenses. Relator complied with the conditions, including the employment of off-duty police officers as security guards. But approximately one-year later, relator discontinued their employment because of the cost and because “things got a lot better at the intersection.”

As time went on, however, the crime problem at 38th and Chicago became worse. In 1996, neighborhood residents formed a task force to improve safety and reduce drug-dealing activity in the neighborhood. In 1998, the number of complaints concerning CUP Foods prompted police community crime specialists to open a file on the store. Crime-prevention specialists visited CUP Foods and relator signed a Minneapolis “no trespassing” affidavit and received two new “no trespassing” signs. The specialists advised relator to call 911 to report trouble, and he and his employees did so.

On July 13, 1998, a shooting took place near CUP Foods. Shortly thereafter, relator attended a task-force meeting and asked for a greater police presence at the intersection. A few months later, two more shootings took place near CUP Foods.

Beginning in October 1998, police conducted surveillance of CUP Foods. Police observed loitering and hand-to-hand exchanges outside the store and in the store entryway. Using confidential informants, police made several “controlled buys” of either crack cocaine or apparent crack cocaine inside CUP Foods.

Based on the results of the controlled buys, police obtained a search warrant for CUP Foods and executed that warrant on November 18, 1998. Police recovered: stolen cell phones; a bullet-proof vest; live ammunition; a stolen bicycle; ephedrine, an ingredient in methamphetamine; glass tubing; baggies of what appeared to be crack cocaine (but later proved to lack cocaine base); postal scales; and three firearms. Police also observed bullet holes in a door. The state charged Nabil Abu-mayyaleh with unlawful possession of a firearm, but later dismissed that charge. Police did not link any of the stolen items to relator, and did not charge him with any crime.

Police continued to make controlled buys in CUP Foods during 1999. On one occasion, the participants completed a transaction in plain view of Nabil Abumayyaleh as he worked as a cashier. On November 9, 1999, a Minneapolis police officer recovered crack cocaine from a CUP Foods shelf during the course of answering a call reporting an armed man in the area.

In November 1999, the Hennepin County Attorney’s Office commenced a nuisance-abatement proceeding against CUP Foods. That proceeding was stayed pending the city’s resolution of appellant’s licensing issues because, on November 19, 1999, respondent filed a notice of hearing concerning all CUP Foods licenses. Respondent filed amended notices on February 26, 2000, and again on March 27, 2000.

An ALJ conducted evidentiary hearings on March 28, 30, and 31, and on May 5 and 15, 2000. Respondent presented testimony from police and neighbors, and argued for revocation of relator’s licenses. Relator presented favorable testimony from neighbors and customers, testified to his own compliance with recommendations, and explained that he, too, sought to end the criminal activity near the intersection.

The ALJ concluded that respondent had shown good cause for taking adverse action against CUP Foods, but recommended that the city council consider placing conditions on CUP Foods licenses, rather than revoking the licenses outright. On December 29, 2000, the Minneapolis City Council adopted the ALJ’s report but, rather than placing conditions on relator’s business licenses, it revoked all the licenses, stayed on the conditions that CUP Foods (1) close for six months and (2) take additional specified crime-prevention measures upon re-opening. The council, however, waived 90 days of the closure period, upon relator’s payment of a $10,000 administrative fine. The mayor approved the decision on January 4, 2001. Relator now proceeds by writ of certiorari.

ISSUES

I. Was respondent city’s decision to stay revocation of relator’s business licenses, subject to conditions, a denial of due process, arbitrary and capricious, or unsupported by substantial evidence?
II. Did the ALJ violate relator’s right to due process of law by denying relator the opportunity to cross-examine confidential informants who made controlled buys at CUP Foods?

ANALYSIS

I.

Appellant first argues that respondent city’s decision to revoke his business licenses is arbitrary and capricious, is unreasonable, is irrational, and not supported by substantial evidence, and that it violates his due-process rights because neither relator nor his employees had direct knowledge that drug activity took place inside CUP Foods.

Generally, decisions of administrative agencies, including cities, enjoy a presumption of correctness and will be reversed only when they reflect an error of law or where the findings are arbitrary, capricious, or unsupported by substantial evidence. Cable Communications Bd. v. Nor-West Cable Communications P’ship, 356 N.W.2d 658, 668 (Minn.1984); see also Minn.Stat. § 14.69 (2000) (setting forth the scope of judicial review).

Where the evidence is conflicting or more than one inference may be drawn from the evidence, findings must be upheld. City of Minneapolis v. Richardson, 307 Minn. 80, 88, 239 N.W.2d 197, 202 (1976). If the agency engaged in reasoned decision-making, a reviewing court will affirm its decision even though the court may have reached another conclusion. State by Khalifa v. Hennepin County, 420 N.W.2d 634, 639 (Minn.App.1988), review denied (Minn. May 4, 1988).

A. Due Process

Relator argues that respondent’s decision denies him “due process of law.” To determine what process is due, this court first determines whether a property interest is implicated. Humenansky v. Minnesota Bd. of Med. Exam’rs, 525 N.W.2d 559, 566 (Minn.App.1994), review denied (Minn. Feb. 14, 1995). Relator correctly points out that he has a property interest in his business licenses. See Bird v. Dep’t of Pub. Safety, 376 N.W.2d 36, 42 (Minn.App.1985) (finding property interest in automobile dealer’s license). Our second inquiry requires weighing the particular interests involved. Humenansky, 525 N.W.2d at 566.

Sufficient due process generally requires reasonable notice and a hearing. In re License of W. Side Pawn, 587 N.W.2d 521, 522 (Minn.App.1998), review denied (Minn. Mar. 30, 1999). Although relator argues that he was denied due process, he does not allege that he was denied either reasonable notice or an opportunity to be heard. The record shows relator received initial notice of the hearings approximately four months before the license proceedings, a five-day trial-type hearing, representation by counsel, an impartial decision-maker, and a decision based solely on the record. This is sufficient to satisfy the due-process requirement. See Humenansky, 525 N.W.2d at 565 (describing the process due when property interests are implicated).

B. Substantial Evidence

Relator argues that respondent violated his due-process rights because revocation

extinguishes [relator’s] property interest and deprives [relator] from making a living without a factual finding that either [relator] or any of his employees permitted, encouraged, or had any direct knowledge of the alleged controlled buys.

In essence, relator alleges that respondent lacked substantial evidence of “good cause” to take adverse license action against relator’s business.

Substantial evidence, for the purpose of appellate review of an administrative agency’s decision, is: (1) such relevant evidence as a reasonable mind might accept as adequate to support a conclusion; (2) more than a scintilla of evidence; (3) more than some evidence; (4) more than any evidence; and (5) evidence considered in its entirety. In re Friedenson, 574 N.W.2d 463, 467 (Minn.App.1998) (citation omitted), review denied (Minn. Apr. 30, 1998). We defer to the agency’s fact-finding process and it is the challenger’s burden to establish that the findings are not supported by the evidence. In re Lakedale Telephone Co., 561 N.W.2d 550, 554 (Minn.App.1997). Unless manifestly unjust, inferences must be accepted even though it may appear that contrary inferences would be better supported by the record. Id. Thus, relator must show that the evidence, considered in its entirety, and drawing inferences in favor of the decision, is not substantial, and, therefore, does not adequately support respondent’s finding that good cause existed to take adverse action against his business licenses.

The Minneapolis Code of Ordinances provides that “[a]ny license granted under this chapter may be revoked by the mayor or the city council as in the city charter provided.” Minneapolis, Minn., Code of Ordinances § 188.350 (1999). The city charter provides:

Section 16. Licenses May Be Revoked. Any license issued by the authority of the City Council may be revoked by the City Council at any time upon proper notice and hearing for good cause * * *.

Minneapolis, Minn., City Charter ch. 4, § 16.

The ALJ’s memorandum explained that relator’s employment of his brother Nabil Abumayyaleh, a convicted felon, and the handguns found during the search of CUP Foods, did not warrant taking adverse license action against relator because relator legally employed his brother and legally possessed the handguns for protection. Similarly, the ALJ found that, because respondent failed to link any of the stolen items recovered during execution of the 1998 search warrant to relator, that evidence alone did not support adverse license action. Further, the ALJ found that the three shootings near CUP Foods had no connection to the store and were simply a “by-product of the gang violence that is prevalent in this south Minneapolis neighborhood.”

But respondent, through the testimony of police officers and neighbors, presented evidence of: (1) chronic loitering at CUP Foods; (2) numerous hand-to-hand exchanges, an indication of drug dealing, taking place in and outside the store; and (3) controlled drug buys inside the store. Respondent also presented evidence that despite the earlier license conditions, the store’s windows remain obstructed by advertising, signs, and shelving, and that the lack of visibility inside the store hampers law-enforcement efforts.

For these reasons, the city council adopted the ALJ’s conclusion that

[respondent] has demonstrated by a preponderance of the evidence that drug dealing and loitering have occurred on a frequent basis on and near CUP Foods’ premises. * * * [Relator’s] failure or inability to prevent or meaningfully control the sale of drugs occurring inside his store constitutes good cause for taking adverse action against CUP Foods’ licenses. While [relator] testified that he routinely asks loiterers to leave, substantial credible testimony from neighborhood residents and police officers established that there is an ongoing pattern of loitering and drug dealing both inside the store and outside the store’s front entrance. And, despite some measures taken by [relator] to increase visibility in his store, the record established that the majority of the store’s windows remain obstructed by shelving, advertisements, and other signage. The inability to see into the store’s windows encourages loitering and criminal activity in general at CUP Foods.

Although there is no direct evidence that relator or his employees observed drug transactions, there is ample evidence, including the evidence of the controlled buys, that such transactions took place in and around CUP Foods and that relator knew that crime in and near the store was an ongoing problem. Although relator made efforts to improve security and reduce crime, he failed to decrease the height of store shelves or remove window advertisements, and, until very recently, relator had abandoned the use of security guards.

Drawing inferences in favor of respondent city’s decision, as we must, and viewing the record as a whole, we conclude that the evidence, though hardly overwhelming, is reasonable, “more than a scintilla,” “more than some,” and “more than any” evidence. The evidence, therefore, is substantial and supports the conclusion that respondent had “good cause” to take adverse license action against relator.

C. Arbitrary and capricious

Relator also argues that the adverse license action is arbitrary and capricious. Reviewing courts may reverse an agency’s decision if the decision is arbitrary or capricious. Minn.Stat. § 14.69(f) (2000). An agency decision is arbitrary and capricious if it is an exercise of the agency’s will, rather than its judgment, or if the decision is based on whim or is devoid of articulated reasons. Friedenson, 574 N.W.2d at 467; Mammenga v. State Dept. of Human Servs., 442 N.W.2d 786, 789 (Minn.1989). “Where there is room for two opinions on the matter, [an agency’s choice of one course of] action is not arbitrary and capricious * * *.” Friedenson, 574 N.W.2d at 467 (citing Brown v. Wells, 288 Minn. 468, 472, 181 N.W.2d 708, 711 (1970)).

The problems at CUP Foods illustrate the collision between two important principles of United States jurisprudence: the reasonable public safety expectations of citizens and the preservation of private property rights, which, in this case, take the form of business licenses.

A city council may affirm, reject, or modify an ALJ’s findings or conclusions. See Hymanson v. City of St. Paul, 329 N.W.2d 324, 326-27 (Minn.1983) (a city council may make new findings or decide contrary to the hearing examiner’s recommendations). Despite this authority, when an agency significantly deviates from a reviewing authority’s conclusions, it must explain the deviation. Beaty v. Minnesota Bd. of Teaching, 354 N.W.2d 466, 472 (Minn.App.1984). Failure to do so “evidences the agency’s desire to exercise its will and not its judgment.” Id.; see also Burnett v. Steams County Welfare Bd., 370 N.W.2d 452, 455 (Minn.App.1985) (holding county welfare board acted arbitrarily and capriciously by rejecting without comment merit system council recommendation to grant relator a merit increase). But see Friedenson, 574 N.W.2d at 467-68 (holding revocation of relator’s medical license not arbitrary and capricious, even though board failed to explain its reasons for deviating from ALJ’s findings of fact and conclusions of law, because reviewing court was satisfied penalty was the product of “careful and prudent judgment”).

Respondent adopted the ALJ’s findings, as well as the conclusions supported by those findings. But respondent did not adopt the ALJ’s recommendations to place conditions on relator’s business licenses, and instead stayed revocation on the conditions that CUP Foods close for six months and, upon re-opening, comply with numerous crime-prevention measures. Respondent significantly deviated from the ALJ’s recommendations without explaining why the ALJ’s recommendations were rejected or making additional findings to support this disposition. At a minimum, a business owner with property rights in the form of government licenses is entitled to know the reasons for adverse action by the city council. We therefore hold that the absence of such findings renders the respondent city’s decision arbitrary and capricious, and we reverse and remand for additional proceedings and to permit respondent to make appropriate findings explaining its decision.

We caution respondent, however, that any additional findings or conclusions it may adopt on remand, to explain its reasons for significantly deviating from the ALJ’s recommendations, must be limited to the issues raised in the earlier proceedings. See Interstate Power Co. v. Nobles County Bd. of Comm’rs, 617 N.W.2d 566, 580 (Minn.2000); Earthburners, Inc. v. County of Carlton, 513 N.W.2d 460, 463 (Minn.1994) (reviewing board “must confine its inquiry to those issues raised in [the] earlier proceedings”); White Bear Rod & Gun Club v. City of Hugo, 388 N.W.2d 739, 742 (Minn.1986) (city council not required to make formal findings but, at a minimum, must “ ‘have the reasons for its decision recorded or reduced to writing and in more than just a conclusory fashion’ ” (quotation omitted)).

II.

Relator also argues that the ALJ abused her discretion by denying relator’s motion to strike testimony concerning the confidential informants who completed “controlled buys” inside CUP Foods, contending that by failing to strike that testimony the ALJ denied him his right to confront the informants. Eviden-tiary rulings in administrative proceedings are subject to an abuse-of-discretion standard. See Lee v. Lee, 459 N.W.2d 365, 369 (Minn.App.1990) (applying abuse-of-discretion standard to appeal of evidentiary ruling on hearsay evidence made during an administrative child-support hearing conducted under Minnesota Administrative Procedure Act rules), review denied (Minn. Oct. 18, 1990).

During the license hearings, respondent’s counsel questioned Sherry Apple-dorn, the police officer who arranged the controlled buys, about her conversations with the confidential informants. Relator’s counsel objected on hearsay grounds. The ALJ sustained the objection, but permitted the officer to testify concerning matters within her own knowledge. At the close of the hearings, relator moved to strike all testimony concerning the controlled buys on the basis that he was denied the right to confront the informants. The ALJ ruled that the request was untimely. Respondent argues that this court need not reach the issue of confrontation because relator’s motion to strike was untimely. We agree.

The rule that an objection to the admission of evidence must be made at the time the evidence is offered is well established. Eilola v. Oliver Iron Mining Co., 201 Minn. 77, 79, 275 N.W. 408, 409 (1937); see also Minn. R. Evid. 103(a)(1) (providing that there is no error unless an evidentiary ruling affects a substantial right of a party and a timely objection or motion to strike is made). Although relator objected to out-of-court statements made by the informants as hearsay, relator did not (1) bring any motion to compel respondent to disclose the informants’ identities, even though the initial notice of hearing indicated that the controlled buys would be part of respondent’s evidence, or (2) object to the admission of Appledorn’s testimony concerning her knowledge of the controlled buys until the close of the hearing in May 2000, more than one month after she testified. We therefore conclude that the ALJ acted within her discretion by denying relator’s motion to strike, and we decline to further address relator’s confrontation claims.

DECISION

Respondent’s conclusion that there is good cause to take adverse license action against relator is supported by substantial evidence. Respondent’s decision to deviate from the sanctions recommended by the ALJ, however, is arbitrary and capricious because the deviations are significant and respondent did not make findings explaining its decision to deviate. Finally, the ALJ did not abuse her discretion by denying relator’s motion to strike testimony concerning controlled drug buys because the motion was untimely.

Affirmed in part, reversed in part, and remanded.

      . Relator devotes more than three pages of his brief to a discussion of Saxon Coffee Shop, Inc. v. Boston Lic. Bd., 380 Mass. 919, 407 N.E.2d 311 (1980). In Saxon, a license-revocation action, criminal activity inside a store and the non-cooperation of the store's management did not meet the substantial-evidence test. Id at 319. We reject Saxon's reasoning because City of Mankato v. Mahoney, 542 N.W.2d 689 (Minn.App.1996), suggests that a city may take adverse-license action in response to criminal activity if the licensee does not cooperate to prevent future violations. Id. at 692 (reversing revocation of landlord's license where landlord acted responsibly to prevent further violations of city noise codes).


author: HUSPENI, Judge.

text:
    In the Matter of the CERTIFICATE OF AUTHORITY OF MUTUAL PROTECTIVE INSURANCE COMPANY, a Nebraska Corporation.
    No. C1-01-314.
    Court of Appeals of Minnesota.
    Sept. 18, 2001.
    Michael O. Freeman, Amy J. Reed, Lindquist & Vennum P.L.L.P., Minneapolis (for appellant Mutual Protective Insurance Company).
    Mike Hatch, Attorney General, Michael J. Tostengard, Assistant Attorney General, St. Paul (for respondent Department of Commerce).
    Considered and decided by RANDALL, Presiding Judge, STONEBURNER and HUSPENI, Judges.

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

   OPINION

HUSPENI, Judge.

The department of commerce issued a cease and desist order pursuant to Minn. Stat. § 45.027, subd. 5a (2000), based upon a determination that relator insurance company was in an “unsafe or unsound” financial condition. Relator contends that the department erred as a matter of law because it used the standards of Minn. Stat. § 60A.052 (2000) to justify an action under section 45.027. It contends that the department should instead have issued an order to show cause under section 60A.052. Finally, it contends that the decision is not supported by substantial evidence. Because we conclude that the department exceeded its statutory authority by proceeding under section 45.027, we reverse.

FACTS

Appellant Mutual Protective Insurance Company (Mutual Protective), domiciled in Nebraska, sells insurance coverage in Minnesota. The vast majority of the policies carried by its 3,000 plus Minnesota policyholders are “long-term care” policies designed to reimburse the policyholder for nursing-home expenses. Mutual Protective has sold insurance in Minnesota since 1955.

The Minnesota Department of Commerce monitors the financial condition of insurance companies licensed to operate within the state, including their profitability. Mutual Protective posted increasingly large net losses between 1996 and 1999 and this trend continued through the first quarter of 2000. On May 19, 2000, the assistant commissioner of commerce issued a cease and desist order that was prompted by the recommendation of the department’s life and health insurance actuary that Mutual Protective was in an unsound or unsafe financial condition. The order prevented Mutual Protective from transacting new business in Minnesota and from entering into any new reinsurance contracts with Minnesota domiciled insurers. The order also required that Mutual Protective continue to honor obligations under existing policies, pay claims thereon, continue to pay any and all fees to the Minnesota Department of Commerce, and make all required financial filings. The order further provided that Mutual Protective could request a hearing. A hearing was requested and held.

Following an administrative hearing, the administrative law judge (ALJ) issued findings and conclusions of law on September 11, 2000, and recommended that the cease and desist order be made permanent, subject to periodic review by the department of Mutual Protective’s financial condition. On January 19, 2001, the commissioner adopted and augmented the ALJ’s findings and conclusions and issued a permanent cease and desist order. This appeal followed.

ISSUES

I. Did the department exceed its statutory authority in issuing the cease and desist order?

II. Is the decision supported by substantial evidence?

ANALYSIS

Decisions of administrative agencies enjoy a presumption of correctness and we will reverse an agency decision only where it reflects an error of law, the agency acted in an arbitrary and capricious manner, or the decision is not supported by substantial evidence. Cable Communications Bd. v. Nor-West Cable Communications, 356 N.W.2d 658, 668 (Minn.1984); see also Minn.Stat. § 14.69 (2000) (setting forth the standard of review). In considering questions of law, however, we “are not bound by the decision of the agency and need not defer to agency expertise.” St. Otto’s Home v. Minnesota Dep’t of Human Servs., 437 N.W.2d 35, 39-40 (Minn.1989) (citations omitted).

Statutory Authority

The commissioner adopted the administrative law judge’s (ALJ) determination that issuance of a cease and desist order . was authorized by Minn.Stat. § 45.027, subd. 5a(a) (2000). Mutual Protective contends that the commissioner improperly implemented the remedy provided by section 45.027, while acting under the authority of Minn.Stat. § 60A.052 (2000), an entirely separate statute. Mutual Protective observes that these provisions are found in different chapters, are not related, serve separate purposes, call for different procedures, establish different standards, and provide different penalties. There is merit in these observations.

Section 45.027, subdivision 5a, grants the authority to issue a cease and desist order

[wjhenever it appears to the commissioner that a person has engaged or is about to engage in an act or practice constituting a violation of a law, rule, or order related to the duties and responsibilities entrusted to the commissioner.

Minn.Stat. § 45.027, subd. 5a(a) (emphasis added). Section 60A.052, in contrast, empowers the commissioner to “impose conditions or restrictions on the insurance company’s authority to transact business in Minnesota” where such an order “is in the public interest” and the company “is in an unsound or unsafe condition.” Minn.Stat. § 60A.052, subds. 1, 1(3). Importantly, prior to implementation of the power granted in section 60A.052, the insurance company must be granted an opportunity to show cause why the commissioner should not act. Id., subd. 2.

Mutual Protective argues that, since it did not engage in “a violation of a law, rule, or order,” the proper action would have been to issue an order to show cause why the department should not act to prohibit Mutual Protective from selling new policies in Minnesota.

In addressing the question of whether an order to show cause should have issued rather than a cease and desist order, the ALJ stated:

[Although the Commissioner had the option under section 60A.052 to issue an order to show cause in this case or propose the suspension or revocation of the Company’s Certificate of Authority, he was free to choose the alternative approach of issuing a Cease and Desist Order under section 45.027 to enforce the provisions of section 60A.052.

In so ruling, the ALJ necessarily construed Mutual Protective’s “unsafe or unsound” financial condition to constitute a violation of a “law, rule or order,” and thus justification for a cease and desist order under section 45.027. We conclude that this construction is incorrect.

Minn.Stat. § 60A.052, subd. 1, contains a list of conditions that are considered grounds for discretionary actions by the commissioner. Some of those conditions are indeed violations in and of themselves, and are expressly identified as such. See, e.g., id., subds. 1(8) (“has violated or failed to comply with any order of the insurance regulator of any other state or jurisdiction”), 1(11) (“has violated or failed to comply with[ ] any of the provisions of the insurance laws including chapter 45 or chapters 60A to 72A or any rule or order under those chapters”). But subdivision 1 does not by itself make such conditions unlawful; rather, it supplies a list of conditions upon which the commissioner may take further action as provided in subdivision 2 of section 60A.052. Id., subd. 1. That possible further action does not, however, include or permit issuance of a cease and desist order; it does permit, at the discretion of the commissioner, issuance of an order to show cause. Id., subd. 2.

Mutual Protective’s “unsafe or unsound” financial condition did not constitute a “violation of the law” sufficient to trigger the cease and desist power provided to the commissioner under Minn.Stat. § 45.027, subd. 5a. Pursuant to Minn. Stat. § 60A.052, subd. 2, and prior to any action, Mutual Protective was entitled to an opportunity to show cause why the department should not act to restrict the company’s authority to issue new insurance policies in Minnesota.

We recognize that the department has a duty to safeguard insurance consumers in this state from companies that operate while in an unsafe or unsound financial condition. The department must be permitted to discharge that duty through all means available. The legislature has, we believe, provided the department and its commissioner with a specific and effective tool for protection of consumers in section 60A.052.

Substantial Evidence

Because we conclude that the department exceeded its statutory powers by instituting proceedings against Mutual Protective through a cease and desist order rather than an order to show cause, it is not necessary to address whether the decision was supported by substantial evidence. However, because both parties have argued this issue extensively, a brief comment is appropriate. Mutual Protective alleges that the decision rests solely on the opinion of one department employee, that Mutual Protective was not provided notice that the department was even contemplating action, and that the decision was made without any consultation between the parties. Further, Mutual Protective argues that considerable evidence favorable to it, especially evidence of recent improvement in financial condition, was ignored. In contrast, the department argues, in effect, that notwithstanding the statutory basis on which this action was commenced, the decision itself is fully supported by the record established at the hearing and should not be interfered with “at this level.”

We do not reject the department’s argument as meritless. Nor do we ignore the conclusion of the ALJ that the department bore the burden of proving the allegations made against Mutual Protective. We nonetheless conclude that Mutual Protective was entitled to certain procedures and opportunities under section 60A.052 and was deprived of those procedures and opportunities because the action was initiated by a cease and desist order. It would be unfair and unjust, we conclude, to continue that deprivation by declaring that even though the proceeding was initiated by way of an inappropriate order, sufficient evidence was ultimately presented. Mutual Protective is entitled to respond to an order to show cause, as provided by section 60A.052, if the department chooses to issue such an order upon completion of appellate proceedings.

DECISION

The department of commerce improperly commenced this action against Mutual Protective by issuance of a cease and desist order.

Reversed.

      . Mutual Protective also contends that the commissioner erred by taking any action because the company's risk-based capital ratio never fell below 200%. Mutual Protective’s risk-based capital ratio was cited by the commissioner's insurance actuary as evidence of the company's worsening financial health. Certain disclosures by a company are mandated by Minn.Stat. § 60A.62 (2000) when this ratio falls below 200%. Action by the commissioner is required by Minn.Stat. § 60A.64 (2000) when the figure has fallen below 100%. While we recognize that these thresholds are relevant to the department's review of a company's financial health, we do not accept the assertion that a risk-based capital ratio above 200% precludes discretionary action under Minn.Stat. § 60A.052.

      . If a company is determined to be in an unsafe or unsound condition, Minn.Stat. § 60A.052, subd. 2, provides that
      the commissioner may issue an order requiring the insurance company to show cause why any or all of the following should not occur: (1) revocation or suspension of any or all certificates of authority granted to the foreign or domestic insurance company or its agent; (2) censuring of the insurance company; [or] (3) the imposition of a civil penalty.
      The department argues that the language "the commissioner may issue an order” in this context means that the commissioner need not issue an order to show cause before acting, and may instead issue a cease and desist order. We disagree, and conclude that the appropriate reading of the quoted language grants the commissioner discretion whether to act at all once it finds one of the grounds enumerated in subdivision 1 (such as being in an unsafe or unsound condition) has been satisfied. Cf. Minn.Stat. § 60A.64, subd. 2 (stating that the commissioner "shall” take regulatory action where a company has reported a risk-based capital ratio at or below 100%).

      . The "unsafe or unsound” standard set forth in section 60A.052 is, we believe, an amorphous one. Minnesota law provides little to no guidance as to the definition of an "unsafe or unsound” financial condition. Therefore, we consider this a standard best applied within the reasoned confines of due process.


text:
    In re the ESTATE OF Anita Ann LUND, Deceased.
    No. C6-01-390.
    Court of Appeals of Minnesota.
    Sept. 25, 2001.

      Charles C. Kallemeyn, Kallemeyn & Kallemeyn Law Office, Coon Rapids, for respondent.
    Michael W. Coopet, Arden Hills, for appellant.
    Considered and decided by KALITOWSKI, Presiding Judge, KLAPHAKE and HALBROOKS, Judges.
   OPINION

HALBROOKS, Judge.

In this probate matter, the testator’s will contained a provision entitling respondent to funds for each month that the respondent cared for the testator before the testator died. Appellant personal representative argued that the devise was to be satisfied by the proceeds from specific real estate and that the devise was adeemed by extinction when the named real estate was sold and its proceeds used to purchase different property before the testator’s death. The district court ruled for respondent and the personal representative appealed. Because the district court correctly applied the law of ademption, we affirm.

FACTS

On September 25, 1992, decedent Anita Ann Lund (testator) executed her will. The will gave respondent Robert Lund, one of testator’s sons, the right to purchase her “home at 13929 Quinn St.” within one year following her death. Pursuant to the terms of the will, the purchase price would to be reduced by 1/5 — respondent’s per stirpes share of the home — and a $500 per month credit for each month he cared for the testator in her home (the “care credit”). If respondent chose not to purchase the home, the will provided that he would receive the care credit “before the remainder of the sale proceeds [were] distributed” per stirpes to the testator’s children, including respondent.

In December 1992, respondent and his family moved into the Quinn Street home with testator and began caring for her. In 1996, testator sold the Quinn Street home and purchased a home on 215th Lane. Testator, respondent, and respondent’s family lived together in the new home on 215th Lane until the testator’s death in August 1999.

Subsequent to the testator’s death, respondent presented statements of claim to his mother’s estate for the care credit. Appellant Lawrence Lund, personal representative of the testator’s estate and brother of respondent, disallowed the claim. Respondent brought a claim in probate court.

The parties stipulated to the facts, including the fact that the testator “intended” that respondent “receive a payment from her estate in the amount of $500.00 multiplied by the number of months for which [respondent] provided for [testator’s] care at her home.” In addition, the parties agreed that respondent provided in-home care for his mother from December 1992 until her death in August 1999. The court held that respondent’s right to purchase the Quinn Street home was adeemed by extinction, but that the $500 monthly care credit remained valid. The court directed appellant to pay $40,000 to respondent to satisfy the care credit ($500 per month for 80 months of care). This appeal follows.

ISSUES

1. Was the care credit a specific or demonstrative legacy?
2. Were the proceeds from the sale of the Quinn Street home intermingled, thereby subject to ademption?

ANALYSIS

I.

Appellant argues that the care credit was a specific devise to be paid only if the proceeds from the Quinn Street home existed in the testator’s estate at the time of her death. Therefore, appellant asserts, the district court erred when it held that the care credit was not adeemed by extinction once the Quinn Street home was sold.*'

A specific legacy fails if the fund or thing given is not in the estate at the time of the testator’s death. In re Douglas’ Estate, 149 Minn. 276, 278, 183 N.W. 355, 356 (1921). “A legacy is specific, when it is the intention of the testator that the legatee should have the very thing bequeathed, and not merely a corresponding amount in value.” In re Lewis’ Estate, 148 Neb. 592, 28 N.W.2d 427, 431 (1947). In contrast,

[a] demonstrative legacy is a money gift, made a charge on a specific fund and directed to be paid out of that fund, but payable at all events even if the fund fails.

Douglas’ Estate, 149 Minn, at 278, 183 N.W. at 356 (citations omitted). Because of the harsh results that occur when a legacy is deemed specific, courts prefer to construe a bequest as general or demonstrative. Chalkwater v. Dolly, 108 Md.App. 539, 672 A.2d 673, 676 (1996).

Appellant argues that the testator’s intent must be ignored in determining whether a specific bequest is adeemed. Appellant correctly notes that this is the rule in the majority of states. In re Estate of Hume, 984 S.W.2d 602, 604-05 (Tenn.1999). But this rule applies only after a court determines that a bequest is specific. Id. (concluding that the specific bequest was adeemed). The theory behind ademption by extinction is that when a testator makes a specific bequest, he or she intends the bequest to fail when the designated asset is no longer part of the estate. Wasserman v. Cohen, 414 Mass. 172, 606 N.E.2d 901, 902-03 (1993) (holding that the doctrine of ademption “seeks to give effect to a testator’s probable intent by presuming he intended to extinguish a specific gift of property when he disposed of that property prior to his death.”). Therefore, a testator’s intent is relevant in determining ‘if a devise is a specific or demonstrative bequest. Douglas’ Estate, 149 Minn, at 278-79, 183 N.W. at 356 (examining testator’s intent in determining whether a bequest is specific, general, or demonstrative). Moreover, because courts disfavor specific bequests, the intent to create a specific legacy must, therefore, be especially clear. In re Estate of Lung, 692 A.2d 1349, 1350 (D.C.1997) (citations omitted).

When interpreting a will, we determine the testator’s intent from a full and complete consideration of the entire will. In re Estate of Zagar, 491 N.W.2d 915, 916 (Minn.App.1992). The district court did not label the care credit, but, by holding that it was not adeemed by extinction, we assume the court found it to be a demonstrative legacy. A reading of the will in its entirety supports the district court’s conclusion. The bequest to respondent, in the article of the will entitled “Special Gifts,” begins by stating generally that property used by the testator “for residential purposes” will be distributed to her children as designated. Only within the next subsection is the Quinn Street home expressly mentioned. Specifically, the provision of the will at issue states that

[respondent] shall have the right and option to purchase my home at 13929 Quinn St. * * *. His option shall be to purchase the home for its fair market value (FMV), less the value of his equal percentage among my children (i.e., less ⅜ of FMV), and $500 per month credit for his care for me at home from July, 1992 * * *. If [respondent] does not purchase the house, he shall still receive credit for his care for me at home * * * before the remainder of the sale proceeds are distributed in equal shares to all my children.

(Emphasis added.)

Based on the phrase “he shall still receive credit for his care for me,” it is reasonable to conclude that the testator intended the care credit be given to respondent regardless of the source. The bequest was not an object or a specific fund. Cf. In re Estate of Kelleher, 140 Minn. 409, 412, 168 N.W. 586, 587 (1918) (finding bequest of life insurance proceeds to be specific bequest). Rather, it was to compensate respondent for services provided to testator during her life. The proceeds from the real estate sale were simply the primary fund from which to pay the care credit. Accordingly, we hold that the testator intended respondent to receive the “value” of $500 for each month he cared for the testator, whether or not the proceeds of the sale of the Quinn Street home were available to fund the bequest.

Our holding is in conformity with the Uniform Probate Code. In 1990, the Uniform Probate Code was revised to include a rebuttable presumption of intent not to adeem, based on the assumption that this approach is more likely in accord with the testator’s wishes. See Unif. Probate Code § 2-606(a)(6) & cmt (amended 1997), 8 U.L.A. 176-77 (Supp.2001); Gregory S. Alexander, Ademption and the Domain of Formality in Wills Law, 55 Alb. L.Rev. 1067, 1067, 1079 (1991) (explaining the amendment). After this revision to the Code, the beneficiary of a specific devise that is no longer found in the testator’s estate is entitled to the value of the gift unless facts and circumstances indicate that the testator intended an ademption. Unif. Probate Code § 2-606(a)(6) (amended 1997), 8 U.L.A. 176 (Supp.2001). Here, there are no facts in the record indicating an intent to adeem. In fact, the contrary is true. Both respondent’s conduct in providing the home care for the testator and the stipulated facts demonstrate to us that the testator intended that respondent receive the care credit.

conclusion, given that the will identifies a certain amount of money, and that the money was intended to compensate for services and to be paid regardless of the source, we hold that the testator intended a demonstrative bequest. Cf. In re Cosgrave’s Will, 225 Minn. 443, 458, 31 N.W.2d 20, 30 (1948) (finding no demonstrative legacy because there was no specified sum of money, the gift was “not to be paid at all events,” and only to be paid out one source). Because the care credit bequest was demonstrative, it was not adeemed when the Quinn Street home was sold, and the district court correctly ordered the estate to satisfy respondent’s claim.

II.

Appellant argues that because the proceeds of the sale of the Quinn Street home are not traceable, they are not available to satisfy the care credit. Because the tracing issue was not raised or addressed at the district court, we will not address this issue. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn.1988) (issues not argued should not be considered).

DECISION

The district court did not err in holding that the care credit was not adeemed and by ordering the estate to satisfy respondent’s claim.

Affirmed.

      . The district court concluded that respondent's right and option to purchase the Quinn Street home was adeemed by extinction, implicitly ruling that it was a specific bequest.


author: VANDE WALLE, Chief Justice.

text:
    2001 ND 155
    In the Matter of the ESTATE OF Wallace W. ZIMMERMAN, Deceased. Sarah L. Zimmerman, Surviving Spouse of Wallace W. Zimmerman, and Maureen K. Zimmerman, Daughter and Residuary Devisee of Wallace W. Zimmerman, Petitioners and Appellees, v. Andrew C. Zimmerman, Personal Representative of the Estate of Wallace W. Zimmerman, Deceased, Respondent and Appellant. In the Matter of the Estate of Wallace W. Zimmerman, Deceased. Sarah L. Zimmerman, Surviving Spouse of Wallace W. Zimmerman, and Maureen K. Zimmerman, Daughter and Residuary Devisee of Wallace W. Zimmerman, Petitioners and Appellants, v. Andrew C. Zimmerman, Personal Representative of the Estate of Wallace W. Zimmerman, Deceased, Respondent and Appellee.
    Nos. 20000361, 20010002.
    Supreme Court of North Dakota.
    Aug. 30, 2001.

      Robert G. Hoy (argued) and Steven E. McCullough (on brief), Ohnstad Twichell, P.C., West Fargo, ND, for petitioners, ap-pellees, and appellants.
    Edmund G. Vinje II, Vinje Law Office, Fargo, ND, for respondent, appellant, and appellee.
   VANDE WALLE, Chief Justice.

[¶ 1] Andrew Zimmerman, the personal representative of Wallace Zimmerman’s estate, appealed a probate court order excluding Sarah Zimmerman’s property from Wallace’s augmented estate for purposes of calculating her elective share of his augmented estate. Sarah and Maureen Zimmerman appealed a probate court order allowing the personal representative attorneys’ fees and refusing to award Sarah interest on her elective share. We reverse the court’s decision excluding Sarah’s property from Wallace’s augmented estate, and we affirm the decision allowing the personal representative attorneys’ fees.

I

[¶ 2] In Matter of Estate of Zimmerman, 1998 ND 116, 579 N.W.2d 591, we outlined the factual background regarding Sarah’s claim for an elective share of Wallace’s augmented estate. Wallace and Sarah were married in April 1954, and they had three children during their marriage: Maureen, Karen, and Andrew. Wallace and Sarah were divorced in 1982. The divorce court distributed the couple’s marital estate, awarding Sarah property valued at about $357,000. However, the divorce court refused to include Wallace’s military retirement benefits in the couple’s marital estate.

[¶ 3] Sarah subsequently learned she had a claim against Wallace’s military retirement benefits, and she moved to reopen the divorce decree so those benefits could be considered in the property division. However, Sarah withdrew her motion when she remarried Wallace in March 1985. Before Wallace and Sarah remarried, they entered into a March 1985 prenuptial agreement, which provided:

1. The parties agree that upon their remarriage the military retirement pay of [Wallace] shall be considered a marital asset to be considered by the Court in the event of any future separation or divorce.
2. Both parties agree that property owned by them separately at this time, with the exception of the military retirement pay described above, shall remain their separate property in the event of their remarriage and shall further remain their separate property in the event of their divorce or separation.
3. Both parties stipulate and agree that any property acquired after their marriage and the question of spousal support, if any, will be settled by the parties or by the court in the event of a future separation or divorce.

[¶ 4] After their remarriage, Wallace and Sarah again experienced marital problems. In May 1986, they informally separated and thereafter lived apart from each other. Although they never lived together again, neither Wallace nor Sarah sought a legal separation or divorce.

[¶ 5] In August 1986, Wallace executed his final will, designating Andrew Zimmerman as personal representative of his estate and devising his property to his three “children, share and share alike, per stirpes,” subject to the following provision:

I am presently married and separated, contemplating divorce. I hereby leave my wife the legal minimum required by law. When we are legally divorced, I understand that the legal minimum is zero and it is my intention that if we are not husband and wife at the time of my demise my present wife, Sarah Lily Zimmerman, shall receive nothing from my estate.

[¶ 6] Wallace died on January 1, 1994, and the probate court appointed Andrew personal representative of the estate. Rather than taking under Wallace’s will, Sarah petitioned for an elective share of his augmented estate under N.D.C.C. ch. 30.1-05. The probate court initially rejected Sarah’s claim for an elective share, ruling the prenuptial agreement waived all of her rights in Wallace’s estate.

[¶ 7] In Zimmerman, 1998 ND 116, ¶¶ 24, 28, 579 N.W.2d 591, we concluded the prenuptial agreement was not a waiver of Sarah’s right to an elective share of Wallace’s augmented estate, and the probate court erred in deciding she was entitled to nothing under Wallace’s will. We remanded for determination of Sarah’s elective share. Id. at ¶ 29.

[¶ 8] On remand, Sarah argued the property distributed to her in the 1982 divorce should not be included in Wallace’s augmented estate. She claimed that, after excluding her property, Wallace’s augmented estate was about $400,000 and her one-third elective share was about $133,000. The personal representative argued the property distributed to Sarah in the 1982 divorce should be included in Wallace’s augmented estate. The personal representative claimed Sarah was not entitled to any additional property from Wallace’s estate to satisfy her elective share because, with the property distributed to her in -the divorce, she had already received more than one-third of Wallace’s augmented estate. The probate court excluded from Wallace’s augmented estate the property distributed to Sarah in the 1982 divorce. The court said the property distribution in the divorce was not a transfer of Wallace’s property to Sarah, but rather was a distribution of the marital estate of the parties. The court concluded the property distributed to Sarah was not “ ‘derived’ from Wallace, but if it was so derived, Sarah, by virtue of the distribution in the divorce is deemed to have given money’s worth for that property” under N.D.C.C. § 30.1-05-02. The probate court also allowed the personal representative attorneys’ fees and denied Sarah’s request for interest on her elective share.

II

[¶ 9] The personal representative argues the probate court erred in excluding from Wallace’s augmented estate property distributed to Sarah in the 1982 divorce. The personal representative argues the property was derived from Wallace without a full consideration in money or money’s worth under N.D.C.C. § 30.1— 05-02(2). Sarah responds the distribution of property to her in the divorce was for full consideration in money or money’s worth under N.D.C.C. § 30.1-05-02(2), because her share of the property distribution was in recognition of her contribution to the marriage.

[¶ 10] Chapter 30.1-05, N.D.C.C., was repealed effective January 1, 1996, and replaced by a new N.D.C.C. ch. 30.1-05. See 1995 N.D. Sess. Laws ch. 322, § 27 and 1993 N.D. Sess. Laws ch. 334, §§ 50 and 51. The current provisions of N.D.C.C. ch. 30.1-05 permit a surviving spouse to take an elective share of one-half of the decedent’s augmented estate. The former N.D.C.C. ch. 30.1-05 applies to this case, and all references to N.D.C.C. ch. 30.1-05 in this opinion refer to former N.D.C.C. ch. 30.1-05.

[¶ 11] Under the version of N.D.C.C. ch. 30.1-05 in effect when Wallace died on January 1, 1994, the surviving spouse of a married person domiciled in this state had the right to take an elective share of one-third of the decedent’s augmented estate. Under that law, the decedent’s augmented estate consisted of the decedent’s net probate estate plus (1) the value of property transferred by the decedent during the marriage to any person other than the surviving spouse to the extent the decedent did not receive adequate and full consideration in money or money’s worth for the transfer, and (2) the value of property owned by the surviving spouse at the decedent’s death to the extent that property was derived from the decedent by any means other than testate or intestate succession without a full consideration in money or money’s worth. N.D.C.C. § 30.1-05-02. See Matter of Estate of Luken, 551 N.W.2d 794, 797 (N.D. 1996). See generally Sheldon F. Kurtz, The Augmented Estate Concept Under the Uniform Probate Code: In Search of an Equitable Elective Share, 62 Iowa L.Rev. 981, 1012 (1977). Under N.D.C.C. § 30.1-05-02(2)(c), property owned by the surviving spouse at the decedent’s death is presumed to have been derived from the decedent except to the extent the surviving spouse establishes it was derived from another source. To rebut the presumption, the surviving spouse must show the extent to which his or her property was derived from sources other than the deceased spouse. Luken, at 798.

[¶ 12] Section 30.1-05-02, N.D.C.C. is derived from Uniform Probate Code § 2-202, and the Editorial Board Comment to that section explains the purposes of augmenting a probate estate and the two categories of property that are added to the probate estate to compute the augmented estate:

The purpose of the concept of augmenting the probate estate in computing the elective share is twofold: 1. to prevent the owner of wealth from making arrangements which transmit his property to others by means other than probate deliberately to defeat the right of the surviving spouse to a share, and 2. to prevent the surviving spouse from electing a share of the probate estate when the spouse has received a fair share of the total wealth of the decedent either during the lifetime of the decedent or at death by life insurance, joint tenancy assets, and other nonprobate arrangements. Thus essentially two separate groups of property are added to the net probate estate to arrive at the augmented net estate which is the basis for computing the one-third share of the surviving spouse. In the first category are transfers by the decedent during his lifetime [to persons other than the surviving spouse] which are essentially will substitutes, arrangements which give him continued benefits or controls over the property. However, only transfers during the marriage are included in this category....
In the second category of assets, property of the surviving spouse derived from the decedent and property derived from the decedent which the spouse has, in turn, given away in a transaction that is will-like in effect or purpose, the scope is much broader. Thus a person can during his lifetime make outright gifts to relatives and they are not included in this first category unless they are made within two years of death (the exception being designed to prevent a person from depleting his estate in contemplation of death). But the time when the surviving spouse derives her wealth from the decedent is immaterial; thus if a husband has purchased a home in the wife’s name and made systematic gifts to the wife over many years, the home and accumulated wealth she owns at his death as a result of such gifts ought to, and under this section do, reduce her share of the augmented estate. Likewise, for policy reasons life insurance is not included in the first category of transfers to other persons, because it is not ordinarily purchased as a way of depleting the probate estate and avoiding the elective share of the spouse; but life insurance proceeds payable to the surviving spouse are included in the second category, because it seems unfair to allow a surviving spouse to disturb the decedent’s estate plan if the spouse has received ample provision from life insurance. In this category no distinction is drawn as to whether the transfers are made before or after marriage.

[¶ 13] Here, the issue is whether the property distributed to Sarah in the 1982 divorce is “property owned by the surviving spouse at the decedent’s death ... to the extent the owned property ... is derived from the decedent by any means other than testate or intestate succession without a full consideration in money or money’s worth,” within the meaning of N.D.C.C. § 30.1-05-02(2).

[¶ 14] The interpretation and application of a statute is a question of law, which is fully reviewable on appeal. Matter of Estate of Opatz, 554 N.W.2d 813, 815 (N.D.1996). Our primary goal in construing statutes is to ascertain legislative intent. Id. In ascertaining legislative intent, we look first at the words used in a statute, and we give those words their ordinary, plain-language meaning. In re Estate of Wirtz, 2000 ND 59, ¶ 8, 607 N.W.2d 882. We construe statutes as a whole to give effect to each of their provisions whenever fairly possible. Id. We interpret uniform laws in a uniform manner, and we may seek guidance from decisions in other states which have interpreted similar provisions in a uniform law. Luken, 551 N.W.2d at 798. We also may look to the Editorial Board Comments of the Uniform Probate Code to interpret its provisions. Zimmerman, 1998 ND 116, ¶ 21, 579 N.W.2d 591.

[¶ 15] We initially consider whether Sarah’s property was “derived from [Wallace] by any means other than testate or intestate succession.” The Uniform Probate Code Editorial Board Comment to N.D.C.C. § 30.1-05-02 says that, for property owned by a surviving spouse, “the time when the surviving spouse derives her wealth from the decedent is immaterial [and] no distinction is drawn as to whether the transfers are made before or after marriage.” Although Sarah received most of her property in the divorce decree before her remarriage to Wallace, the Editorial Board Comment and the plain language of N.D.C.C. § 30.1-05-02(2) do not exclude from Wallace’s augmented estate the property distributed to Sarah in the 1982 divorce. See Matter of Ridgeway, 877 S.W.2d 167, 170-71(Mo.Ct.App.1994) (recognizing surviving spouse’s property may be derived from decedent spouse before marriage). Compare N.D.C.C. § 30.1-05-02(1) (limiting property transferred by decedent to any person other than surviving spouse to property transferred at any time during the marriage). The ordinary meaning of “derive” is “to get or receive (from a source)” or “to trace from or to a source.” Webster’s New World Dictionary 380 (2nd Coll. Ed.1980). See also Matthews v. State, 187 N.J.Super. 1, 453 A,2d 543, 547 (App.Div.1982). The use of the word “any” in a statute generally is comprehensive in scope and inclusive in meaning in the sense of “all” or “every.” See State v. Zueger, 459 N.W.2d 235, 237 (N.D.1990).

[¶ 16] When the ordinary meaning of the words used in N.D.C.C. § 30.1-05-02(2) are considered together, we construe those words to mean the property distributed to Sarah in the 1982 divorce was “derived from [Wallace] by any means other than testate or intestate succession,” and that property therefore is includable in his augmented estate to the extent it was derived from him “without a full consideration in money or money’s worth.”

[¶ 17] In In re Estate of Carman, 213 Neb. 98, 327 N.W.2d 611 (1982), the Nebraska Supreme Court discussed the meaning of “money’s worth.” In Carman, at 613-14, a couple jointly operated a farm during their marriage, and the wife extensively participated in the operation. After the husband died, the wife, as a surviving spouse, claimed only one-half of the farming property should be included in his augmented estate. Id. at 613. The surviving spouse claimed the other half of the farming property was her separate property because she had essentially functioned as a partner in the farming operation. Id. at 613. The Nebraska Supreme Court disagreed, concluding “a spouses’s labor does not become a contribution ‘in money’s worth’ such as to take one-half the value of jointly produced and acquired assets out of the augmented estate computation.” Id. at 614.

[¶ 18] Although the facts in Carman differ from this case, the underlying conclusion about “money’s worth” is consistent with the ordinary and general meaning of “money or money’s worth.” In other contexts, that phrase generally means cash or its equivalent, see Gillett v. Chicago Title & Trust Co., 230 Ill. 373, 82 N.E. 891, 904 (1907), or money or other consideration reducible to money value. See 26 C.F.R. § 301.6323(h)-1(a)(3) (2001). See also Adelvision L.P., v. Groff, 869 F.Supp. 797, 806 (E.D.Pa.1994). Under bankruptcy law, a debtor’s future contributions of labor, experience, and expertise in running a farm are not “money or money’s worth,” see Northwest Bank v. Ahlers, 486 U.S. 197, 204-05, 108 S.Ct. 963, 99 L.Ed.2d 169 (1988), and it is settled law that “sweat equity” is not money’s worth. See In re Woodmere Investors, Ltd., 178 B.R. 346, 363 (Bankr.S.D.N.Y.1995); In re Resorts Int'l, Inc., 145 B.R. 412, 483 (Bankr.D.N.J.1990).

[¶ 19] In yet other contexts, a spouse’s contribution has been held to be “in money’s worth.” Leve v. Leve, 704 S.W.2d 263, 267 (Mo.Ct.App.1986) (affirming the probate court’s holding “that homemaking duties may be considered as contributions in money’s worth” for the purpose of determining a spouse’s contribution to the acquisition of jointly held property); In re Estate of Kersten, 71 Wis.2d 757, 239 N.W.2d 86, 90 (1976) (holding that, for inheritance tax purposes, a wife’s contribution of “services, industry, and skills to operation of the farm enterprise constituted contribution ‘in money’s worth’ in the production of the joint income used to acquire the jointly held assets.”).

[¶ 20] Although the recognition of a spouse’s contributions to a marital relationship governs equitable property distributions, see, e.g., Williams v. Williams, 302 N.W.2d 754, 758 (N.D.1981), we are not persuaded those contributions constitute money or money’s worth within the meaning of N.D.C.C. § 30.1-05-02(2). The policy considerations permitting a surviving spouse to receive an elective share of the decedent’s augmented estate are different than the policy considerations underlying an equitable distribution in a divorce action. One of the purposes of augmenting a decedent’s probate estate to compute an elective share is to prevent a surviving spouse from electing a share of a probate estate when the spouse already has received a fair share of the accumulated wealth of the decedent from nonprobate transfers. See N.D.C.C. § 30.1-05-02 (Uniform Probate Code Editorial- Board Comment). That purpose is fortified by the presumption that property owned by the surviving spouse as of the decedent’s death is derived from the decedent. See Luken, 551 N.W.2d at 798. Under the unique factual circumstances of this case, the policy of precluding a surviving spouse from receiving more than a fair share of the accumulated wealth of the decedent would not be served by construing a spouse’s contributions to a marriage as money or money’s worth under N.D.C.C. § 30.1-05-02(2). If the statutes and the commentary thereto did not reflect current policy in these matters, it was for the legislative branch, which established the policy, to conform the statutes and commentary to reflect current reasoning.

[¶21] When construed to effect the purposes for permitting a surviving spouse to take an elective share, we conclude the property distributed to Sarah in the 1982 divorce was not derived from Wallace for full consideration in money or money’s worth within the meaning of N.D.C.C. § 30.1-05-02(2). We conclude the property is includable in Wallace’s augmented estate and was subject to the rebuttable presumption it was derived from Wallace except to the extent Sarah established it was derived from another source under N.D.C.C. § 30.1-05-02(2)(c).

[¶ 22] Sarah argues the divorce decree, the findings of fact, conclusions of law, and order for judgment in the divorce action, and the prenuptial agreement established her property came from the distribution in the divorce action, and that evidence was sufficient to rebut the presumption her property was derived from Wallace. That evidence, however, does not constitute evidence of money or money’s worth, and we conclude it does not establish Sarah’s property was derived from another source. We conclude that evidence is insufficient, as a matter of law, to rebut the presumption Sarah’s property was derived from Wallace. Sarah does not argue that any of the property awarded to her in the 1982 divorce decree was owned separately by her prior to the divorce, gifted to her alone from someone other than Wallace, inherited by her alone from someone other than Wallace, or paid for out of her sole income. See, e.g., Estate of Lettengarver, 249 Mont. 92, 813 P.2d 468, 472 (1991) (husband’s testimony that property being .sold under a contract for deed was acquired with proceeds from the sale of property owned solely by the husband was sufficient to rebut the presumption that the contract for deed was derived from his wife); Estate of Fisher, 545 A.2d 1266, 1270 (Me. 1988) (husband’s testimony that money in a joint bank account was from his paychecks was sufficient to rebut the presumption that the account was derived from his wife).

[¶ 23] In the absence of any other evidence about the source of Sarah’s property, we hold the probate court erred as a matter of law in excluding from Wallace’s augmented estate the property distributed to Sarah in the 1982 divorce. The parties do not dispute that if Sarah’s property is included in Wallace’s augmented estate, she already has received sufficient property to satisfy her elective share. We therefore hold Sarah has received sufficient property to satisfy her elective share, and she is not entitled to any further property to satisfy her claim for an elective share.

Ill

[¶24] Sarah argues the probate court erred in allowing the personal representative attorneys’ fees. She argues the probate court misapplied the law, because it considered only the personal representative’s good faith and failed to address whether the personal representative’s actions benefitted the estate.

[¶ 25] Under N.D.C.C. § 30.1-05-02, the augmented estate includes the probate estate reduced by certain deductions, including attorneys’ fees. Section 30.1-18-20, N.D.C.C., provides:

If any personal representative or person nominated as personal representative defends or prosecutes any proceeding in good faith, whether successful or not, the personal representative or nominee is entitled to receive from the estate necessary expenses and disbursements, including reasonable attorneys’ fees incurred.

[¶ 26] In Flaherty v. Feldner, 484 N.W.2d 615, 518 (N.D.1992), we said:

In construing § 30.1-18-20, we have said that “it must appear that the personal representative acted in good faith, that his conduct was free from fraud, and that he benefitted the estate before attorney fees and costs may be awarded by the court.” Matter of Estate of Honerud, 326 N.W.2d 95, 97 (N.D.1982). A “benefit” to an estate certainly includes services that bring about an enhancement in value or an increase in the assets of the estate. See, e.g., Matter of Estate of Ambers, 477 N.W.2d 218, 224 (N.D.1991). However, we believe that a “benefit” to the estate is not to be measured solely in monetary terms, but can also include a personal representative’s good faith attempts to effectuate the testamentary intention set forth in a facially valid will. See, e.g., In re Estate of Lewis, 442 So.2d 290, 292 (Fla.Ct.App.1983).

[¶ 27] The probate court denied Sarah’s motion to disallow the personal representative’s attorneys’ fees, concluding the proceedings represented “a good faith attempt by the parties to apply the law to Wallace’s will and that the issue of inclusion in the augmented estate of the assets received by [Sarah] in the divorce is an issue in genuine controversy.” Because we have agreed with the personal representative’s position regarding Sarah’s claim for an elective share of Wallace’s augmented estate, the personal representative’s actions have ultimately preserved additional assets for the estate and we need not further consider this matter. The personal representative’s actions ben-efitted the estate, and he is entitled to reasonable attorneys’ fees incurred on behalf of the estate.

' IV

[¶ 28] We reverse the probate court’s decision to exclude Sarah’s property from Wallace’s augmented estate for purposes of calculating her elective share, and we affirm the court’s decision to allow the personal representative attorneys’ fees.

[¶ 29] CAROL RONNING KAPSNER, MARY MUEHLEN MARING, WILLIAM A. NEUMANN, and DALE V. SANDSTROM, JJ., concur.

      . Section 30.1-05-02, N.D.C.C., defined the augmented estate, in relevant part:
      The augmented estate means the estate reduced by funeral and administration expenses, homestead as defined in section 47-18-01, family allowances and exemptions, and enforceable claims, to which is added the sum of the following amounts:
      1. The value of property transferred by the decedent at any time during marriage, to or for the benefit of any person other than the surviving spouse, to the extent that the decedent did not receive adequate and full consideration in money or money’s worth for the transfer, if the transfer is of any of the following types:

      2. The value of property owned by the surviving spouse at the decedent’s death, plus the value of property transferred by the spouse at any time during marriage to any person other than the decedent which would have been includable in the spouse's augmented estate if the surviving spouse had predeceased the decedent, to the extent the owned or transferred property is derived from the decedent by any means other than testate or intestate succession without a full consideration in money or money’s worth. For purposes of this subsection:

      c. Property owned by the surviving spouse as of the decedent’s death, or previously transferred by the surviving spouse, is presumed to have been derived from the decedent except to the extent that the surviving spouse establishes that it was derived from another source.

      (emphasis added).

      . In her appeal, Sarah argues she is entitled to interest on her elective share. Because we conclude Sarah has already received sufficient property to satisfy her elective share, we do not consider that issue.