author: ANDERSON, G. BARRY, Justice.

text:
    STATE of Minnesota, Respondent, v. Morgan Michael SCHULZ, Appellant.
    No. A03-1883.
    Supreme Court of Minnesota.
    Feb. 3, 2005.

      John Stuart, State Public Defender, Marie Wolf, Assistant Public Defender, Minneapolis, MN, for Appellant.
    Mike Hatch, Attorney General, John Ga-lus, Assistant Attorney General, St. Paul, MN, Larry Collins, Waseca County Attorney, Waseca County Courthouse, Waseca, MN, for Respondent.
   OPINION

ANDERSON, G. BARRY, Justice.

Appellant Morgan Michael Schulz was convicted of first-degree felony murder, second-degree intentional murder, and second-degree felony murder, under Minn. Stat. § 609.185(a)(3), MinmStat. § 609.19, subd. 1(1), and Minn Stat. § 609.19, subd. 2(1) (2000), respectively. He was acquitted of first-degree premeditated murder and sentenced to life-imprisonment for first-degree felony murder. No sentences were imposed for the second-degree murder convictions. Schulz now appeals from the judgment of conviction, arguing that the admission of evidence concerning his nickname “Kill” was unfairly prejudicial under Minn. R. Evid. 403. We 'affirm.

On Thursday, August 2, 2001, Schulz, his girlfriend, Megan Striemer, and Erica Boerner drove from Fairmont to Waseca to meet Tyler Janovsky and Janovsky’s girlfriend Jamie Siem. These five individuals drove to Rickey Buker’s apartment building. Although accounts of the -witnesses varied, two individuals testified that Schulz wanted to purchase marijuana from Buker. Striemer testified that she heard Janovsky mention to Schulz that Buker might have a stack of money sitting on a table in his apartment (Buker had won a total of $200, paid in $1 bills, at bingo on the nights of July 25 and August 1). Ja-novsky noticed the stack of cash at Buker’s apartment during a social visit on July 29.

Schulz entered Buker’s apartment building alone. After approximately a half hour, wondering why Schulz was taking so long to return, Boerner and Striemer went into the apartment building and knocked on Buker’s door. Buker answered, but according to Boerner’s testimony, told them that Schulz was not there. After waiting a while longer in the car, Boerner, Striemer, Janovsky and Siem began driving around Waseca looking for Schulz. They found Schulz about a half hour later. Boerner testified that Schulz’s hand was bleeding when he got back in the car.

Over the course of the next few hours, Schulz disclosed possession of a film canister containing a quantity of marijuana similar to a film canister previously used by Buker for this purpose, a pink metallic marijuana pipe resembling Buker’s pipe, and a “bunch” of one dollar bills. Siem and Janovsky stayed with Schulz that evening, watching movies and drinking. Siem testified that as the evening progressed, Schulz began making admissions. Schulz told Siem and Janovsky that, after arriving at Buker’s apartment, he had smoked marijuana at the kitchen table with Buker. Schulz then stated he went into the bathroom and retrieved a tie from a- bathrobe'. He then went back to Buker and wrapped the bathrobe tie around Buker’s neck, demanding to know where the money was. When Buker said he had none, Schulz choked him until Buker fell to the ground. Schulz claimed that Buker attempted to get up, but Schulz punched him. Janovsky also testified that Schulz told him that he had tied Buker up with a piece from a bathrobe, punched him, and knocked him out.

On August 3, a regular marijuana customer went to Buker’s apartment seeking to purchase marijuana. After several previous attempts, the customer knocked on the apartment door, opened the unlocked door, entered, and found Buker lying dead on the floor. When police arrived on the scene, they found Buker with a bathrobe tie wrapped twice around his neck and tied with a half-hitch knot. There was blood on the tie. A forensic pathologist from the Ramsey County Medical Examiner’s office determined the cause of death to be asphyxia due to ligature strangulation. The forensic pathologist testified that a fair amount of force was used to strangle Buker, and that the attacker probably strangled him for at least thirty seconds and possibly up to a couple of minutes. The examiner also observed signs of blunt trauma consistent with injury sustained from a human fist.

Before his arrest, Schulz made further incriminating admissions to a number of persons, describing his robbery of and assault on Buker. Two of these persons reported these admissions to police. Several of these persons testified at Schulz’s trial, but no witness testified that Schulz seriously admitted to killing Buker.

On about August 6, Schulz telephoned a friend incarcerated at the Martin County jail and left a voicemail message. On the recording, Schulz said, “Man, it’s Kill. Remember that robbery that I was talkin’ about? You know, where shit just gets crazy. Yeah, Kill lived up to his name. Ha!” Schulz also has a tattoo of the word “Kill” on his stomach. Schulz was arrested on August 9, 2001.

Prior to trial, the state sought the permission of the district court to introduce the message Schulz left on the Martin County Jail voicemail system. In order to provide context and explain the voicemail message, the state also sought to introduce a photograph of a tattoo on appellant’s stomach of the word “Kill.” The defense objected, arguing that the evidence was extremely prejudicial, and was essentially character evidence. The district court admitted the evidence. Schulz was convicted.

The single issue on appeal is whether the district court abused its discretion in allowing the introduction of the voicemail message and the photograph of the “Kill” tattoo.

I

Rulings concerning the admissibility of evidence under Minn. R. Evid. 403 are within the discretion of the district court, and will only be reversed for a clear abuse of that. discretion. State v. Ashby, 567 N.W.2d 21, 25 (Minn.1997). The district court has a wide range of discretion in determining the relevancy of evidence. State v. Swain, 269 N.W.2d 707, 714 (Minn.1978). . Further, on direct appeal, we must find actual prejudice to the defendant’s case in order to reverse the district court and provide relief. See State v. Ebert, 346 N.W.2d 350, 351 (Minn.1984) (holding that even when evidence is admitted erroneously, a reversal is not required unless the evidence actually prejudiced the defense).

Schulz contends that the probative value of the taped voicemail message and the photograph of the tattoo is outweighed by the danger of unfair prejudice and by the consideration of needless presentation of cumulative evidence.

Minn. R. Evid. 403 states:

Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.

The rule favors admission of relevant evidence, as the probative value of the evidence must be “substantially” outweighed by prejudice, confusion of the issues, and the other dangers listed in the rule. See Minn. R. Evid. 403.

We begin by analyzing the probative value of the disputed evidence. Evidence is relevant and has probative value when it, in some degree, advances the inquiry. State v. Carlson, 268 N.W.2d 553, 559 (Minn.1978). A fact is relevant if, when taken alone or in connection of other facts, warrants a jury in drawing a logical inference assisting, even though remotely, the determination of the issue in question. State v. Upson, 162 Minn. 9, 12-13, 201 N.W. 913, 914 (1925); State v. Lee, 282 N.W.2d 896, 901 (Minn.1979) (“Any evidence that logically tends to prove or disprove a material fact in issue is relevant.”). The convincing power of that inference is for the jury to determine. Upson, 162 Minn. at 12-13, 201 N.W. at 914. There is no question that the voicemail evidence is probative of a material fact — it is an implied admission of guilt by the appellant, and directly advances the inquiry in forceful way.

The photograph of the tattoo is relevant and has probative value because it helps to identify appellant as the individual whose voice is heard on the tape. Photographs are admissible whenever they “accurately portray anything which it is competent for a witness to describe in words” and are not rendered inadmissible merely because they “incidentally tend to arouse passion or prejudice.” State v. DeZeler, 230 Minn. 39, 46, 41 N.W.2d 313, 319 (1950), reh’g denied, (Minn. March 6, 1950) (emphasis omitted). When a photograph is not misleading and is properly illustrative, the rule is liberally construed in favor of admission of the disputed evidence; the decision to admit the evidence is within the broad discretion of the district court. See State v. Dame, 670 N.W.2d 261, 264 (Minn. 2003). Here, the jury may properly and logically infer a connection between the photograph and the voicemail evidence. A photograph of an identifying mark on the defendant’s body is identification evidence of a different kind and character than the testimony that was introduced by witnesses, and has direct probative force.

The district court did not abuse its discretion when it found that the probative value of the evidence was not substantially outweighed by the danger of unfair prejudice. Unfair prejudice under rule 403' is not merely damaging evidence, even severely damaging evidence; rather, unfair prejudice is evidence that persuades by illegitimate means, giving one party an unfair advantage. State v. Cermak, 365 N.W.2d 243, 247 n. 2 (Minn.1985) (quoting 22 Charles A. Wright Kenneth W. Graham, Federal Practice and Procedure-Evidence § 5215 at 274-75 (1978)); State v. Axford, 417 N.W.2d 88, 92 (Minn.1987), reh’g denied (Minn. Jan. 15, 1988). Even highly damaging evidence is nonetheless admissible when it is relevant and highly probative of a material issue of fact. State v. Yang, 644 N.W.2d 808, 817 (Minn.2002). Evidence that is probative, though it may arouse the passions of the jury, will still be admitted unless the tendency of the' evidence to persuade by illegitimate means overwhelms its legitimate probative force. See, e.g., Cermak, 365 N.W.2d at 246^17 (affirming the admission of photographs of child sexual abuse when the pictures significantly strengthened the states case against the defendant).

Here, while it is clear the voice mail message had a devastating impact on the defendant’s case, principally because a confession recorded in the defendant’s own voice is highly incriminating, there is no support in the record for the assertion by Schulz that introduction of such a confession is evidence giving one party an unfair advantage.

The photograph, on the other hand, arguably carries a slightly greater risk of unfair prejudice than the voicemail recording, but we conclude that the slightly greater risk of prejudice does not “substantially” outweigh the probative value of the photograph to the extent that admitting the evidence was an abuse of the district court’s discretion. The photograph had probative value because it established a link between the defendant’s nickname and the defendant and while it may have aroused emotions not favorable to the defendant, it did not constitute persuasion by illegitimate means. See State v. Ferguson, 581 N.W.2d 824, 834-35 (Minn.1998), reh’g denied (Minn. Aug. 3, 1998) (holding that while gang graffiti photographs and police testimony as to its meaning may have been highly prejudicial, both were admissible because they were highly probative of motive).

II

Schulz next contends that the voi-cemail message and photograph constitute needless presentation of cumulative evidence, and that therefore the district court abused its discretion by admitting them. Schulz argues that because alternative evidence that does not carry a danger of prejudice was admitted, the marginal probative value of evidence that carries even a small danger of prejudice is slight or nonexistent. See United States v. Layton, 767 F.2d 549, 556 (9th Cir.1985). This contention does not apply here, however, because the evidence at issue is probative of material facts in ways unique and distinct from the other evidence in the case. The voice-mail evidence is uniquely probative because, despite considerable damaging testimony heard at trial, no witness testified to a genuine admission of guilt on the part of Schulz. Only in the voicemail message does the appellant himself imply that he actually killed Rickey Buker. Moreover, the witness testimony regarding Schulz’s admissions was subject to impeachment on cross-examination, whereas the voicemail is an admission in the defendant’s own voice, and was not subject to impeachment. Furthermore, a defendant’s tone of voice and inflection is evidence the jury can use to form an impression of the defendant’s state of mind after the crime, and give the jury some clue as to his intent. The photograph confirms the identity of the confessor, corroborating other evidence as to Schulz’s nickname.

Rulings on the admissibility of evidence, including whether evidence is improperly cumulative, are committed to the sound discretion of the district court. See, e.g., State v. Martin, 614 N.W.2d 214, 225 (Minn.2000); State v. Olkon, 299 N.W.2d 89, 101 (Minn.1980), cert. denied, 449 U.S. 1132, 101 S.Ct. 954, 67 L.Ed.2d 119 (1981) (holding that rulings under rule 403 are committed to the sound discretion of the district court); Colby v. Gibbons, 276 N.W.2d 170; 175 (Minn.1979), reh’g denied (Minn. Mar. 13, 1979); Hiedeman v. Hiedeman, 290 Minn. 210, 217, 187 N.W.2d 119, 124 (1971). Here, we conclude that the district court did not abuse its discretion in admitting the alleged evidence because of its cumulative nature when, at the very worst, the evidence was only marginally repetitive and it was highly probative.

Because the decision to admit evidence against a claim that its probative value is substantially outweighed by the danger of unfair prejudice is within the discretion of the district court, and because the district court did not abuse its discretion, we affirm.

Affirmed.


source: Caselaw Access Project

author: STONEBURNER, Judge.

license: Public Domain

text:
    Amanda R. NEWMAN, Appellant, v. BRENDEL & ZINN, LTD., Respondent.
    No. A04-1175.
    Court of Appeals of Minnesota.
    Jan. 18, 2005.

      Robert Edwards, Robert N. Edwards, Chtd., Anoka, MN, for appellant.
    Richard J. Thomas, Chad J. Hintz, Burke & Thomas, P.L.L.P., St. Paul, MN, for respondent.
    Considered and decided by HARTEN, Presiding Judge; KLAPHAKE, Judge; and STONEBURNER, Judge.
   OPINION

STONEBURNER, Judge.

Appellant Amanda R. Newman, who was a plaintiff . in a personal-injury action against a client of respondent Brendel & Zinn, Ltd. (law firm), alleges that law firm violated MinmStat. § 144.335, subd. 3a(a) (2002), by sharing her medical records obtained under Rule 35 of the Minnesota Rules of Civil Procedure with the physician retained by law firm to inspect the records and conduct a medical examination of appellant. The district court dismissed appellant’s complaint for failure to state a claim on which relief can be granted. Because we conclude that Rule 35 specifically authorized, and appellant consented to, law firm’s sharing of the subject medical records with the Rule ,35 examiner, we affirm.

FACTS

Appellant was injured in an automobile accident and sued the driver of the other-involved automobile for negligence. Respondent law firm was retained to represent the defendant in appellant’s negligence action. Under Minn. R. Civ. P. 35.04, appellant authorized thirteen providers to release medical records pertaining to “treatment for neck pain, low back pain, headaches or TMJ” and “any treatment for November 12, 1998 motor vehicle accident injuries” to law firm, “its representatives or employees.” The authorization stated, “I do not authorize re-release of this information by/to a third party.”

Law firm obtained appellant’s medical records pursuant to appellant’s authorizations and provided the records to a physician it had retained for the defense. This Rule 35 examiner testified in appellant’s negligence trial, and law firm argued that this expert witness was the most qualified to discuss appellant’s claimed injuries because he was the only doctor who had reviewed all of appellant’s medical records.

Appellant initiated this action alleging that by “re-releasing” her medical records to its Rule 35 examiner and referring to the records during her negligence trial, law firm willfully or intentionally violated MinmStat. § 144.335, subd. 3a(a) (2002), which prohibits a person who receives health records from a provider from releasing those records “to a person without a signed and dated consent from the patient ... unless the release is specifically authorized by law.” The district court granted law firm’s motion to dismiss appellants complaint for failure to state a claim on which relief can be granted pursuant to Minn. R. Civ: P. 12.02(e). This appeal followed:

ISSUES

I. Should law firm’s motion to strike documents in appellant’s appendix be granted?

II. Did the district court err by dismissing, for failure to state a claim on which relief can be granted, appellant’s claim that law firm violated Minn.Stat. § 144.335, subd. 3a(a) (2002), by giving appellant’s medical records, obtained from medical providers under Minn. R. Civ. P. Rule 35, to law firm’s retained Rule 35 examiner?

ANALYSIS

I. Motion to strike

Law firm moved to strike several documents contained in appellant’s appendix and references in appellant’s brief to those documents, arguing that those items were not presented to or considered by the district court and are outside the record on appeal. The items are clearly not a part of the record. See Minn. R. Civ.App. P. 110.01 (stating that only papers and exhibits filed or admitted at trial and the transcript constitute the record on appeal). Accordingly, we grant law firm’s motion to strike.

II. Dismissal under Rule 12

a. Standard of review

When reviewing a dismissal under Rule 12.02(e) of the Minnesota Rules of Civil Procedure, this court determines de novo “whether the complaint sets forth a legally sufficient claim for relief.” Bodah v. Lakeville Motor Express, Inc., 663 N.W.2d 550, 553 (Minn.2003). This court will not uphold a Rule 12.02(e) dismissal “if it is possible on any evidence which might be produced, consistent with the pleader’s theory, to grant the relief demanded.” Martens v. Minnesota Min. & Mfg. Co., 616 N.W.2d 732, 739-40 (Minn.2000) (citation omitted).

A provider, or a person who receives health records from a provider, may not release a patient’s health records to a person without a signed and dated consent from the patient or the patient’s legally authorized representative authorizing the release, unless the release is specifically authorized by law.

Minn.Stat. § 144.335, subd. 3a(a) (2002). Law firm argues that release to the physician it retained to conduct an independent medical examination was both consented to by appellant and specifically authorized by law. The district court agreed. Appellant does not dispute that she consented to release of her medical records by providers to law firm, but appellant argues that the district court erred by concluding that she consented to law firm’s release of the records to the Rule 35 examiner and that such release is specifically authorized by law.

b. Rule 35 of the Minnesota Rules of Civil Procedure constitutes authorization for release of non-privileged medical records to Rule 35 examiner.

The district court concluded that Rule 35 of the Minnesota Rules of Civil Procedure specifically authorizes review of a personal-injury-plaintiffs medical records concerning a condition as to which privilege has been waived, so that, as a matter of law, there was no violation of Minn. Stat. § 144.335, subd. 3a(a). Rule 35.01 permits examination by a “suitably licensed or certified examiner” of any party whose physical or mental condition or blood relationship is in controversy. Rule 35.03 provides:

If at any stage of an action a party voluntarily places in controversy the physical, mental, or blood condition of that party ... such party thereby waives any privilege that party may have in that action regarding the testimony of every person who has examined or may thereafter examine that party or the person under that party’s control with respect to the same physical, mental, or blood condition.

And Rule 35.04 provides in relevant part:

When a party has waived medical privilege pursuant to Rule 35.03, such party within 10 days of a written request by any other party,
(a) shall furnish to the requesting party copies of all medical reports previously or thereafter made by any treating or examining medical expert, and
(b) shall provide written authority signed by the party of whom request is made to permit the inspection of all hospital and other medical records, concerning the physical, mental, or blood condition of such party as to which privilege has been waived.

Appellant asserts that because Rule 35.03 only refers to waiver of medical privilege regarding testimony of medical providers, medical records regarding the condition put in controversy remain privileged. We disagree. Rule 35.04 plainly requires waiver of any privilege for the associated medical records by compelling a party to disclose and provide written authorizations for inspection of the records.

Appellant argues that because nothing in Rule 35 states that “the defense may re-release medical records obtained under Rule 35 to the Rule 35 examiner,” providing the records to the Rule 35 examiner is not authorized by the rule and constitutes a violation of Minn.Stat. § 144.335, subd. 3a(a). We disagree.

Although the meaning of “specifically authorized by law” as used in Minn.Stat. § 144.335, subd. 3a(a), is a matter of first impression, this court has construed an identical phrase in the context of the Data Practices Act, Minn.Stat. § 13.49,- subd. 1 (2000), concerning an employer’s release of employee’s social security numbers to a third party. See American Fed. of State, County, Mun. Employees v. Grand Rapids Pub. Util. Comm’n, 645 N.W.2d 470 (Minn.App.2002), review denied (Minn. Aug. 6, 2002). In that context, this court stated that the term “specifically authorized by law,” “equates with ‘specifically permits’ or ‘specifically allows’ ” and held that “a law that specifically references the disclosure of social security numbers as one method of complying with a mandated drug and alcohol testing program specifically authorizes the release of those social security numbers ...” Id. at 474.

Rule 35.04 requires a personal-injury plaintiff to “permit the inspection of all hospital and other medical records” related to the-.condition that he or she has placed in controversy. Common sense dictates that only an expert witness can conduct a meaningful inspection of such medical records. We therefore conclude that Rule 35 specifically authorizes a Rule 35 examiner to inspect non-privileged medical records obtained under the rule, and that a lawyer or law firm does not violate Minn. Stat. § 144.335, subd. 3a(a), by giving such records to its retained Rule 35 examiner.

c. The authorization signed by appellant constitutes consent to release of non-privileged medical records by law firm to Rule 35 examiner.

Appellant’s authorization specifically authorized providers to release specified medical records “to [law firm], its representatives or employees.” Appellant argues that, under this language, the provider can release medical records to law firm, but law firm cannot provide the records to its representatives or employees who could only obtain the records directly from the providers. Appellant has not provided any authority that would require this absurd construction of the language of the authorization and we find the argument without merit.

Appellant asserts that the district court erred by concluding that the Rule 35 examiner is law firm’s “representative” for purposes of appellant’s personal-injury lawsuit. Appellant argues that the Rule 35 examiner is a “third party” as used in the authorization and that she specifically withheld consent for release to such a third party. But appellant concedes in her brief that the Rule 35 examiner was “chosen” by law firm to review the medical records and perform a physical examination. Webster’s Third New International Dictionary defines “representative” as “standing for or in the place of another; acting for another or others; constituting the agent for another esp. through delegated authority.” In this case, the Rule 35 examiner performs, on behalf of law firm, the inspection of medical records provided for in Rule 35.04. We conclude that, in the context of Minn.Stat. 144.335, subd. 3a(a), a Rule 35 examiner is law firm’s representative as the term is used in the authorizations. Law firm’s providing appellant’s non-privileged medical records to the Rule 35 examiner was authorized and did not violate Minn.Stat. § 144.335, subd. 3a(a).

DECISION

Because authorization for the inspection of a personal-injury-plaintiffs non-privileged medical records by a party is compelled under Minn. R. Civ. P. 35.04, we conclude that a party’s law firm’s provision of such records to its retained Rule 35 examiner is specifically authorized by law. And an authorization for a provider to release such records to a law firm, its representatives or employees consents to provision of such medical records by the law firm to its Rule 35 examiner. Therefore the district court did not err by dismissing appellant’s claim that law firm violated Minn.Stat. § 144.335, subd. 3a(a), for failure to state a claim on which relief can be granted.

Affirmed; motion granted.


author: WILLIS, Judge.

text:
    JERRY’S ENTERPRISES, INC., Appellant, v. LARKIN, HOFFMAN, DALY & LINDGREN, LTD., et al., Respondents.
    No. A04-188.
    Court of Appeals of Minnesota.
    Jan. 24, 2005.

      James P. McCarthy, Christopher L. Lynch, Lindquist & Vennum, PLLP, Minneapolis, MN, for appellant.

      Lindsay G. Arthur, Jr., Kirsten J. Hansen, Arthur, Chapman, Kettering, Smetak & Pikala, PA, Minneapolis, MN, for respondents.
    Considered and decided by WILLIS, Presiding Judge; HALBROOKS, Judge, and HUDSON, Judge.
   OPINION

WILLIS, Judge.

Appellant challenges the district court’s order granting respondents’ motion for a directed verdict on appellant’s legal-malpractice claim. Because we conclude that the district court erred by granting the motion, we reverse and remand.

FACTS

Appellant Jerry’s Enterprises, Inc. (Jerry’s) owns and operates grocery stores. Respondents are law firm Larkin, Hoffman, Daly & Lindgren, Ltd., which began representing Jerry’s in 1987; attorney Tim Stoltman, Jerry’s primary contact at the law firm; and attorney Gary Renneké, a Larkin, Hoffman attorney who represented Jerry’s at the closing of the property at issue here (hereafter collectively referred to as Larkin, Hoffman). This case arises from Larkin, Hoffman’s representation of Jerry’s from 1993 to 2001, when it assisted Jerry’s in acquiring certain property in Woodbury.

William Bruggeman and Eugene Zugschwert, as trustee for The Builders Wholesale, Inc. Profit Sharing' Trust, (hereafter together referred to as Brugge-man), owned a parcel of the Woodbury property. Jerry’s, represented by Stolt-man, negotiated an option agreement for the purchase by Jerry’s of the Bruggeman parcel. At Bruggeman’s insistence, the final option agreement gave Bruggeman the right to repurchase the parcel if Jerry’s failed to develop the parcel within two years after exercising its purchase option. Stoltman drafted the option agreement, but before adding the repurchase provision, he advised Jerry’s in writing that, strategically, Jerry’s should not close on the purchase of the property until it had a commitment for construction of its intended development and all necessary approvals. He explained that the two-year period for development of the parcel “provides you a safety net in the event a market study or some other reason comes up which prevents commencement of construction immediately after closing.”

Jerry’s originally intended to build a Cub Foods store on the Bruggeman parcel, but its plans changed before it exercised the purchase option.. Jerry’s told Stoltman that its new plan was to purchase the property, subdivide it, and develop it for resale.

Although Stoltman’s notes shortly after the option agreement was signed indicate that he recognized that he should request the elimination of the repurchase provision, he did not discuss eliminating the provision either with Jerry’s or with Brug-geman. And the repurchase provision was never eliminated.

The closing documents, which were drafted by Bruggeman’s counsel, did not mention the option agreement or its repurchase provision. Stoltman testified that when he reviewed the closing documents, he did not consider whether the repurchase provision in the option agreement would survive closing. He also testified that he did not warn Jerry’s that the repurchase provision possibly created a cloud on the title that Jerry’s received because he did not believe that such a possibility existed.

Jerry’s exercised its purchase option, and its purchase of the Bruggeman parcel for $2.4 million closed on August 10, 1995. Jerry’s was represented at closing by Stoltman’s colleague,, Gary Renneke, because Stoltman was unavailable. Ren-neke testified that he noticed that the repurchase provision was not mentioned in the closing documents but that he did not form an opinion regarding whether the repurchase provision merged into the deeds at closing and did not discuss with any representative of Jerry’s whether the repurchase provision survived the closing.

During the two years after Jerry’s exercised its purchase option, Jerry’s began improving the property by grading -and doing utility-installation work. Jerry’s received no advice from Larkin, Hoffman about the nature of the development necessary to avoid the repurchase provision if that provision survived the closing. On August 13, 1997, Jerry’s president, Robert Shadduck, received notice that Bruggeman was exercising its right under the repurchase provision. Stoltman advised Shad-duck, in writing, that the response to the notice should be (1) that the repurchase provision merged into the deeds that were delivered to Jerry’s at closing, and neither deed mentioned the repurchase provision as a “permitted encumbrance”; (2) that the sellers failed to indicate in the closing documents that they intended to retain the repurchase provision; and (3) that Jerry’s has avoided the repurchase provision by commencing the construction of improvements in the form of grading and utility-installation work. On August 22, Stoltman wrote such a letter on behalf of Jerry’s, rejecting Bruggeman’s repurchase attempt. Stoltman testified that he did not research the merger issue before advising Shadduck or before writing the letter.

Bruggeman then' sued Jerry’s, seeking specific performance of the repurchase provision. Because Larkin, Hoffman had not informed the title insurer of the existence of the repurchase provision in the purchase-option agreement, the title insurer rejected the tender of the defense of Bruggeman’s claim. Jerry’s hired Larkin, Hoffman to defend it in the suit, and Lar-kin, Hoffman researched for the first time the issue of whether the repurchase provision survived the closing.

The district court granted summary judgment to Jerry’s. This court reversed. See Bruggeman, 591 N.W.2d at 706 (Minn.1999). The Minnesota Supreme Court affirmed the court of appeals and remanded the case to the district court for further proceedings. Id. at 711. The supreme court acknowledged that it had “not squarely addressed, until now, whether agreements to perform acts subsequent to closing are governed by the merger doctrine.” Id. at 709. The supreme court held “that the presumption of merger does not apply to this repurchase option agreement which could not, by its very nature, be performed prior to closing.” Id. at 710. The court went on to explain that “no presumption of merger exists to bar respondents, as a matter of law, from asserting their contract claims. It will be the task of- the district court on remand to evaluate the parties’- competing claims and determine whether appellant owes respondents a contractual duty to re-convey the property.” Id. at 711.

' In November 2000, the district court entered judgment for Bruggeman. The parties subsequently entered into a settlement agreement that required Jerry’s to pay Bruggeman $4,2 million for a quitclaim deed transferring all of Bruggeman’s right, title, and interest in the parcel to Jerry’s. There was evidence in the district court in the case now on appeal that at the time of the settlement, the property had a. fair market value of $7.9 million.

In May 2002, Jerry’s- commenced this action against Larkin, Hoffman, alleging legal malpractice, professional negligence, and breach of duty. Larkin, Hoffman moved for summary judgment, which the district court denied on the grounds that genuine issues of material fact existed regarding the applicable standard of care, proximate cause, and damages.

At trial, Theodore Meyer, an expert witness for Jerry’s, testified that the standard of care for a-Twin Cities commercial-real-estate attorney representing a buyer of property included: (1) a duty to advise clients of all relevant legal considerations affecting the client’s interests; and (2) a duty to make certain that the title the client receives is adequate for the client’s purposes. Meyers testified that, in his opinion, Larkin, Hoffman’s failure to identify the possible cloud on the title that .the repurchase provision represented and its failure to raise the issue with Jerry’s was negligence and malpractice.

The district court permitted witnesses to testify about their understanding of the scope of the merger doctrine in Minnesota before the supreme court’s Bruggeman decision. Witnesses were asked how district court orders, published opinions from-foreign jurisdictions, and CLE materials influenced their opinions. But the district court interpreted Minnesota law to prohibit the jury from considering unpublished judicial opinions and would not permit the witnesses to explain whether their opinions were influenced by this court’s unpublished opinions.

When Jerry’s rested its case, Larkin, Hoffman moved for a directed verdict, arguing that its attorneys had no duty to research whether the repurchase provision would survive closing or to warn Jerry’s of the possibility that it might do so because no attorney could have predicted that the supreme court would create a new exception to the merger doctrine. The district court granted Larkin, Hoffman’s motion and subsequently denied a motion by Jerry’s for a new trial. The district court reasoned that “but for the Minnesota Supreme Court’s decision in Bruggeman the Defendants would not be liable .... [because ... there wasn’t any financial loss that was certain” until the supreme court’s decision. The district court also determined that because attorneys have no duty to predict changes in the law, there was no persuasive evidence that Larkin, Hoffman did not meet the applicable standard of care. This appeal follows.

ISSUES

I. Did the district court err by granting Larkin, Hoffman’s motion for a directed verdict after concluding that attorneys cannot be liable for malpractice when an issue of unsettled law is decided against their client’s interests, even when the attorneys have failed to exercise any legal judgment?

II. Did the district court abuse its discretion by allowing witnesses to testify regarding their opinions of the scope of the merger doctrine in Minnesota before the Bruggeman decision? Alternatively, did the district court abuse its discretion by refusing to allow attorneys to testify whether unpublished opinions of the Minnesota Court of Appeals influenced their opinions regarding the scope of the merger doctrine in Minnesota before the Bruggeman decision when it allowed attorneys to testify how other nonprecedential sources informed their opinions regarding this doctrine?

ANALYSIS

I.

Jerry’s argues that the district court erred by granting Larkin, Hoffman’s motion for a directed verdict after concluding that attorneys cannot be liable for malpractice when an issue of unsettled law is decided against their client’s interests, regardless of the attorneys’ lack of effort to determine the state of the law or their failure to inform the client of the law’s uncertainty. On appeal from a directed verdict, this court makes an independent determination of whether sufficient evidence existed to present a fact question to the jury. Boone v. Martinez, 567 N.W.2d 508, 510 (Minn.1997). In making this determination, we review the evidence in a light most favorable to the nonmoving party. Id. We must therefore decide whether Jerry’s has shown that sufficient evidence exists to establish a question of fact for the jury on its legal-malpractice claim.

The plaintiff in a legal-malpractice action must usually prove four elements: (1) the existence of an attorney-client relationship; (2) acts by the attorney amounting to negligence or breach of contract; (3) that the attorneys acts were the proximate cause of the plaintiffs damages; and (4) that but for the attorneys conduct, the plaintiff would have been successful in the action. Rouse v. Dunkley & Bennett, P.A., 520 N.W.2d 406, 408 (Minn.1994). The- parties here disagree about the applicability of the fourth element. Larkin, Hoffman appears to argue that the Brug-geman ease is the “action” here, and it asserts that Jerry’s would not have succeeded in that case regardless of Larkin, Hoffman’s conduct because the supreme court created a new exception to the merger doctrine in Bruggeman. Jerry’s argues that because Larkin, Hoffman’s negligence occurred in a transactional matter, the fourth element described in Rouse does not apply.

This court has noted that “when an attorney’s negligence harms a plaintiff by some means other than destruction of or damage to a cause of action, the fourth ... element is inapplicable.” First Bank v. Olson, 557 N.W.2d 621, 623 (Minn.App.1997), review denied (Minn. Mar. 18, 1997). A transactional matter, for example, does not involve a cause of action. See Fiedler v. Adams, 466 N.W.2d 39, 42 (Minn.App.1991), review denied (Minn. April 29, 1991). In such instances, more traditional concepts, of proximate cause, rather than “but for” causation, are used. Hill v. Okay Constr. Co., 312 Minn. 324, 338, 252 N.W.2d 107, 117 (1977).

Here, the district court concluded that “but for” the decision in the Bruggeman case, Jerry’s had no claim for legal malpractice because any financial loss was uncertain until the Minnesota Supreme Court decided Bruggeman. The district court reasoned that Larkin, Hoffman could not be liable for malpractice-because it had no duty to predict that the supreme court would create a new exception to the merger doctrine.

But Jerry’s argues that Larkin, Hoffman was negligent when it reviewed the closing documents, when it failed to identify the possible cloud on the title, and when it failed to inform Jerry’s of that issue. This alleged negligence occurred during a transactional matter — negotiations for purchase and the purchase of property' — not during the course of litigating a claim. We conclude, therefore, that the district court erred by applying a “but for” analysis.

Because we conclude that the “but for” element is inapplicable here, Jerry’s must show that sufficient evidence exists at least to raise questions of fact regarding the first three elements of a legal-malpractice claim: the existence of an attorney-client relationship between Jerry’s and Larkin, Hoffman; acts by Larkin, Hoffman amounting to negligence; and that Larkin, Hoffman’s acts were the proximate cause of the damage that Jerry’s suffered.

a. Attorney-client relationship

The parties stipulate that an attorney-client relationship existed here.

b. Acts amounting to negligence

Jerry’s argues that it introduced sufficient evidence for the jury to decide that Larkin, Hoffman breached the applicable standard of care, in other words, that a question of fact exists regarding whether Larkin, Hoffman acted negligently. An attorney is negligent when he or she fails to exercise the “degree of care and skill that is reasonable under the circumstances, considering the nature of the undertaking.” Fiedler, 466 N.W.2d at 42 (quoting Prawer v. Essling, 282 N.W.2d 493, 495 (Minn.1979)). But an attorney is protected from malpractice claims as tong-as the attorney “acts honestly and in good faith to the best of his skill and knowledge, or with at least reasonable skill and learning and an ordinary degree of attention or care.” Sjobeck v. Leach, 213 Minn. 360, 365, 6 N.W.2d 819, 822 (1942) (quotation omitted).

The applicable standard of care for attorneys and whether that standard of care has been breached are usually established through expert testimony in legal-malpractice actions. Fiedler, 466 N.W.2d at 43. Here, Meyer, the expert witness for Jerry’s, testified that the applicable standard of care for a Twin Cities commercial-real-estate attorney representing a buyer requires: (1) that the attorney advise the client of all relevant legal considerations affecting the client’s interests; and (2) that the attorney makes certain that the client receives adequate title for the client’s purposes. Meyer also testified that, in his opinion, Larkin, Hoffman breached the applicable standard of care by failing to identify the possible cloud on the title created by the repurchase provision and by failing to raise the issue with Jerry’s. He testified that Larkin, Hoffman’s failure to consider this issue at all was negligence and malpractice.

In contrast, Larkin, Hoffman argues that it did not breach a duty to Jerry’s because attorneys are not required to predict future changes in the law. Larkin, Hoffman also argues that it did not have a duty, in a transactional setting, to conduct research into dicta of the Minnesota Supreme Court, unpublished decisions of this court, and decisions from foreign jurisdictions to determine whether the repurchase provision might survive closing.

We agree that attorneys do not have a duty to predict changes in the law.

It is well settled that ... [a]n attorney who acts in good faith and in an honest belief that his advice and acts are well founded and in the best interest of his client is not answerable for a mere error of judgment or for a mistake in a point of law which has not been settled by the court of last resort in his State and on which reasonable doubt may be entertained by well-informed lawyers.

Meagher v. Kavli, 256 Minn. 54, 60-61, 97 N.W.2d 370, 375 (1959) (quotation omitted). But we conclude that while an attorney is not liable for an error of judgment or mistake in a point of unsettled law, the attorney must exercise legal judgment in some way to be so protected. Because Larkin, Hoffman did not research the issue created by the repurchase provision before advising Jerry’s, we conclude that Larkin, Hoffman did not exercise legal judgment before providing its advice and therefore is not immune from liability here.

In light of Meyer’s expert testimony, a question of fact exists regarding the applicable standard of care owed to clients by Twin Cities commercial-real-estate attorneys, and a question of fact exists regarding whether Larkin, Hoffman breached that standard of care in representing Jerry’s.

c. Proximate cause of the damages

A question of fact also exists regarding whether Larkin, Hoffman’s acts proximately caused the damages suffered by Jerry’s. Minnesota has adopted the following test for proximate cause in legal-malpractice cases:

For negligence to be the proximate cause of an injury, it must appear that if the act is one which the party ought, in the exercise of ordinary care, to have anticipated was likely to result in injury to others, then he is liable for any injury proximately resulting from it, even though he could not have anticipated the particular injury which did happen.

Rouse, 520 N.W.2d at 409 (Minn.1994) (quotation omitted).

There is sufficient record evidence to create a fact question for the jury regarding whether Jerry’s suffered damages as a result of Larkin, Hoffman’s acts. Jerry’s did not receive clear title to the Brugge-man parcel; Jerry’s had to pay Larkin, Hoffman to defend the lawsuit brought by Bruggeman; and Jerry’s had to pay Brug-geman $4.2 million to acquire clear title to the parcel.

Questions of fact exist regarding whether these damages were proximately caused by Larkin, Hoffman’s failure to identify and address the effect of the possible survival of the repurchase provision; its failure to warn Jerry’s of the cloud on the title and advise Jerry’s regarding the nature of the development required to avoid the repurchase provision; and its failure to provide the title insurer with information regarding the repurchase provision. Whether Larkin, Hoffman could reasonably anticipate that its acts would harm Jerry’s is also a question of fact.

Larkin, Hoffman argues that Jerry’s was damaged solely because Bruggeman created a new exception to the merger doctrine. Larkin, Hoffman claims that if the court had “left the doctrine of merger alone, Jerry’s would have kept the property and would have had no basis for a malpractice claim against Larkin.” But, again, this is a fact question for the jury because Jerry’s asserts damages that do not arise solely from the Bruggeman decision.

Larkin, Hoffman also argues that the Bruggeman decision was a superseding cause of the damage Jerry’s suffered. The district court found this argument unpersuasive, as do we. Four elements must be proved to show a superseding cause of the damage suffered by a plaintiff:

(1) Its harmful effects must have occurred after the original negligence; (2) it must not have been brought about by the original negligence; (3) it must actively work to bring about a result which would not otherwise have followed from the original negligence; and (4) it must not have been reasonably foreseeable by the original wrongdoer.

Wartnick v. Moss & Barnett, 490 N.W.2d 108, 113 (Minn.1992) (quotation omitted). When an uncertain legal issue has not been addressed by the supreme court, it is reasonably foreseeable that the supreme court could decide the issue either way. Therefore, the fourth element of a superseding cause cannot be met.

Because questions of fact exist regarding the applicable standard of care owed by Larkin, Hoffman, regarding whether that standard of care was breached, regarding the damages suffered by Jerry’s, and regarding whether Larkin, Hoffman’s acts were the proximate cause of those damages, the district court erred by granting Larkin, Hoffman’s motion for a directed verdict. .

II.'

Jerry’s asks this court to address two evidentiary issues that arose during the trial and are likely to arise on remand: first, Jerry’s argues that the district court abused its discretion by allowing witnesses to testify regarding their opinions of the scope of the merger doctrine in Minnesota before the Bruggeman decision; and second, Jerry’s argues, in the alternative, that the district court abused its discretion by prohibiting witnesses from testifying how unpublished decisions of this court influenced their opinions regarding the scope of the merger doctrine in Minnesota before the Bruggeman decision while allowing witnesses to testify about how other non-precedential materials informed their opinions.

“Evidentiary rulings rest within the sound discretion of the trial court and will not be reversed absent a clear abuse of discretion. On appeal, the appellant has the burden of establishing that the trial court abused its discretion and that appellant was thereby prejudiced.” State v. Amos, 658 N.W.2d 201, 203 (Minn.2003) (citations omitted).

Generally, the opinions of experts regarding legal issues are not admissible. Safeco Ins. Co. of Am. v. Dain Bosworth, Inc., 531 N.W.2d 867, 873 (Minn.App.1995), review denied (Minn. July 20, 1995). But in legal-malpractice cases, expert testimony is used to establish the applicable standard of care and to establish whether a defendant-attorney’s conduct deviated from that standard of care. Admiral Merchs. Motor Freight, Inc. v. O’Connor & Hannan, 494 N.W.2d 261, 266 (Minn.1992). The standard of care for attorneys includes the requirement that an attorney act “with at least reasonable skill and learning.” Sjobeck, 213 Minn. at 365, 6 N.W.2d at 822 (quotation omitted).

Here, the basis for the opinions of local commercial-real-estate attorneys regarding the scope of the merger doctrine before the Bruggeman decision is important in determining the applicable standard of care. The district court did not abuse its discretion by allowing such testimony.

Jerry’s argues alternatively that the district court abused its discretion by prohibiting witnesses from testifying regarding how this court’s unpublished decisions influenced their opinions of the scope of the merger doctrine before Bruggeman. Unpublished opinions of this court are not precedential, but they may be persuasive. Minn.Stat. § 480Á.08, subd. 3(c) (2002); Dynamic Air, Inc. v. Bloch, 502 N.W.2d 796, 800-01 (Minn.App.1993). And attorneys are not prohibited from mentioning unpublished decisions in pretrial conferences, hearings, trials, memoranda, or briefs. Minn.Stat. § 480A.08, subd. 3(c).

Here, the district court allowed witnesses to testify how decisions from foreign jurisdictions, district court opinions, and CLE materials informed their understanding of the scope of the merger doctrine before Bruggeman. But the district court refused to allow the jury to hear or consider any information from unpublished decisions of this court, although unpublished opinions of the court of appeals are of no less weight than the materials about which the district court allowed testimony. The jury would not need to determine what the law was before the Bruggeman decision. Rather, it would be relevant for the jury to learn how other Twin Cities commercial-real-estate attorneys formed their opinions of the scope of the merger doctrine. The district court should not have excluded testimony of how unpublished opinions of this court might inform an attorney of trends in the law. The district court abused its discretion by refusing to allow the witnesses to testify regarding how the unpublished opinions of this court affected their understanding of the merger doctrine. Because witnesses could have testified that such unpublished opinions might have suggested to attorneys that the repurchase provision would not merge into the deeds at closing, the exclusion of this evidence prejudiced Jerry’s. On remand, the district court should not exclude attorney-witnesses’ testimony regarding how unpublished opinions of this court informed their understandings of the merger doctrine in Minnesota.

DECISION

Because fact questions exist regarding whether Larkin, Hoffman was negligent in representing Jerry’s and because attorneys may be liable when no legal judgment is exercised in rendering advice about an unsettled area of law, the district court erred by granting Larkin, Hoffman a directed verdict. Because expert testimony about a Twin Cities commercial-real-estate attorney’s understanding of the scope of the merger doctrine in Minnesota before the Bruggeman decision was at issue in establishing the applicable standard of care, the district court did not abuse its discretion by admitting such testimony. But the district court did abuse its discretion by prohibiting testimony about how this court’s unpublished opinions informed this understanding, when testimony about the influences of other nonprecedential sources was allowed.

Reversed and remanded.

      . Bruggeman’s repurchase price was to be the sum of (a) the purchase price paid by Jerry's for the Bruggeman parcel and for an adjacent parcel; (b) the cost incurred by Jerry's for all improvements made to or incorporated, into these properties, including real estate taxes and special assessments paid by Jerry's; and (c) interest equal to the prime rate of interest plus two percent per year from the date of each expenditure by Jerry’s.

      . Generally, the merger doctrine prevents "parties from asserting their rights under a purchase agreement after the deed has been executed and delivered.... [T]he rights of the parties are to be determined by the deeds, and not by the contracts, the presumption being that the deeds give expression to the final purposes of the parties....” Bruggeman v. Jerry's Enters., Inc., 591 N.W.2d 705, 708 (Minn.1999) (quotations omitted).


author: HALBROOKS, Judge.

text:
    STATE FUND MUTUAL INSURANCE COMPANY, Appellant, Delbert Doubrava, et al., Respondents, v. Jack MEAD, et al., Respondents, Kane Transport, Inc., Respondent.
    No. A04-561.
    Court of Appeals of Minnesota.
    Feb. 1, 2005.

      M. Chapin Hall, Lynn, Scharfenberg & Associates, Minneapolis, MN, for appellant.
    David K. Cody, Richard O’Dea, Palmer, Cody & O’Dea, LLC, Roseville, MN, for respondents Delbert and Judy Doubrava.
    Considered and decided by SHUMAKER, Presiding Judge, RANDALL, Judge, and HALBROOKS, Judge.
   OPINION

HALBROOKS, Judge.

Appellant insurance company challenges the district court’s order denying its motion to intervene, arguing (1) that it is entitled to party status because respondents do not adequately represent and protect its workers’ compensation subrogation interest in the lawsuit and (2) that it should be allowed to intervene so it can conduct discovery concerning the tortfea-sor’s assets. Appellant also moves to dismiss issues allegedly raised by respondent on appeal for the first time. Respondents separately arg-ue that the district court erred in denying their request for attorney fees and costs. Because we conclude that the district court did not abuse its discretion by denying respondents’ motion for attorney fees, we affirm in part. But because we conclude that the district court erred by denying appellant’s motion to intervene as of right, we reverse in part and remand. Appellant’s motion to dismiss issues on appeal is denied because it is now moot.

FACTS

In June 2000, respondent Delbert Dou-brava sustained serious injuries as a result of a motor-vehicle accident caused by respondent Jeremy Mead. At the time of the accident, Doubrava was working in the course and scope of his employment with Kane Transport, Inc. (Kane).

Mead was driving a vehicle owned by his father and that was insured by Federated Mutual Insurance Company (FMIC), with a policy limit of $300,000. Kane was insured for workers’ compensation coverage by appellant State Fund Mutual Insurance Company (State Fund). Soon after the accident, Delbert and his wife, Judy Dou-brava, initiated both a workers’ compensation claim against Kane and a personal-injury claim against Mead.

In mid-2003, the Doubravas secured a settlement offer from Mead for his adjusted policy limits in the amount of $296,390. The Doubravas moved for approval of the settlement and provided the district court with the results of an asset search that revealed that Mead “ha[d] no assets of significance which could be pursued if a judgment in excess of the underlying insurance policy limits was obtained.” Mead subsequently confirmed this information in a sworn affidavit.

State Fund moved to intervene in order to block the settlement and the potential exhaustion of its workers’ compensation subrogation interest, asserting that Mead had other financial resources which had not yet been disclosed, including future wages. After the Doubravas’ counsel was properly notified of State Fund’s motion to intervene, they objected within 30 days, as required by Minn. R. Civ. P. 24.03.

The district court found that it was not reasonable to allow State Fund to intervene for the primary purpose of blocking the settlement offer and ultimately concluded that the motion to intervene was premature because the district court had not yet ruled on the settlement motion. In addition to denying State Fund’s request for intervention, the court also denied its motions to compel discovery and for sanctions against the Doubravas’ attorney. The court further denied the Doubravas’ request for attorney fees. This appeal follows.

ISSUES

1. Did the district court err by denying State Fund’s motion for intervention of right?

2. Did the district court abuse its discretion by denying the Doubravas’ attorney-fees request?

ANALYSIS

I.

State Fund argues that it is entitled to intervene as a party because the Doubravas are not adequately representing and protecting its subrogation interest in the lawsuit. Orders concerning intervention as a matter of right, pursuant to Minn. R. Civ. P. 24.01, are subject to de novo review and are independently assessed on appeal. Norman v. Refsland, 383 N.W.2d 673, 676 (Minn.1986). Moreover, this court is “not held to a standard of review requiring a clear abuse of discretion before [it] may reverse the district court denial for a petition for intervention as of right.” Id. In order to intervene as of right, a nonparty must demonstrate the following:

(1) timely application for intervention;
(2) an interest relating to the property or transaction which is the subject of the action;
(3) circumstances demonstrating that the disposition of the action may as a practical matter impair or impede the party’s ability to protect that interest; and
(4)a showing that the party is not adequately represented by the existing parties.

Blue Cross/Blue Shield of Rhode Island v. Flam, 509 N.W.2d 393, 395-96 (Minn.App.1993) (citing Minn. R. Civ. P. 24.01), review denied (Minn. Feb. 24, 1994). In rejecting State Fund’s motion to intervene, the district court ultimately concluded that the motion was untimely.

State Fund argues that it should be permitted to intervene because the Dou-bravas have not diligently prosecuted the claim or adequately represented its subro-gation interest, as required by Minn.Stat. § 176.061, subds. 5(a), 8a (2004). State Fund contends that its interests have been inadequately represented because its sub-rogation right will be extinguished and the Doubravas’ attorneys will “reap a windfall of attorney fees” if the settlement is approved.

The Minnesota Workers’ Compensation Act (WCA) creates and describes the subrogation rights of employers and insurers who have paid workers’ compensation benefits. Minn.Stat. § 176.061 (2004). ‘When a compensable injury is caused by a party other than the employer, the [WCA] gives the employee a right to workers’ compensation benefits from the employer while preserving the employee’s common law right of action against the tortfeasor.” Conwed Corp. v. Union Carbide Chems. & Plastics Co., 634 N.W.2d 401, 406 (Minn.2001). Normally, an employer who pays workers’ compensation benefits to an employee injured by a third party’s negligence is entitled to bring a subrogation action against the third party and seek reimbursement for those payments. Id.

Minn.Stat. § 176.061, subds. 5(a) and 8a, address the intervention and settlement rights of an employer-insurer. Subdivision 5(a) reads, in pertinent part:

If an action against the other party is brought by the injured employee ... [and] [i]f the action is not diligently prosecuted or if the court deems it advisable in order to protect the interests of the employer ..., upon application the court may grant the employer ... the right to intervene in the action for the prosecution of the action.

Minn.Stat. § 176.061, subd. 5(a). Subdivision 5(a) thus explains that the employer is subrogated to the rights of the employee, but also provides that if the employee fails to prosecute the action diligently or if the court deems it advisable to protect the interests of the employer, the court may permit the employer to intervene. Jackson v. Zurich Am. Ins. Co., 542 N.W.2d 621, 623 (Minn.1996).

Subdivision 8a provides for notice to the employer of an intention to settle a third-party action, which has been accomplished in this case. More importantly, in pertinent part, subdivision 8a reads:

If the employer or insurer pays compensation to the employee under the provisions of this chapter and becomes subro-gated to the right of the employee or the employee’s dependents or has a right of indemnity, any settlement between the employee or the employee’s dependents and the third party is void as against the employer’s right of subrogation or indemnity.

Minn.Stat. § 176.061, subd. 8a (emphasis added). The supreme court specifically addressed subsection 8a in Jackson. 542 N.W.2d 621.

In Jackson, a worker sustained injuries under the WCA. The worker’s employer and its workers’ compensation insurer accepted liability and paid various workers’ compensation benefits. Id. at 622. The insurer was represented with respect to its subrogation interest and had been advised of pending settlement negotiations between the plaintiffs and a third party, the owner of the property on which the injury occurred. Id. Without the consent of the insurer, plaintiffs’ counsel negotiated a $200,000 settlement with the third party, which included all claims against it, including the insurer’s subrogation interest. Id. at 622-23. The insurer refused to sign a release for the $200,000 settlement, “which contemplated a payment of not more than 20 percent of the liability limit of [the third party’s] insurance coverage.” Id. at 623. In response, plaintiffs sought a writ of mandamus to compel acceptance of the settlement and plaintiffs’ proposed distribution of the proceeds. Id. The district court dismissed the petition, and we affirmed. Id. at 622. The supreme court further affirmed and concluded that “when taken as a whole, one cannot read section 176.061 without concluding ... that without the employer’s consent an employee cannot settle the entire action, including the employer’s subrogation interest.” Id. at 624.

While the Doubravas do not comment on the breadth of their settlement agreement with the Meads, they argue that State Fund’s intervention should be denied because they have an agreement with Meads’ insurer to pay its policy limits. The Doubravas distinguish Jackson on the basis that the Jackson employee’s settlement with the tortfeasor was only for 20% of the policy limits. But the Doubra-vas fail to address the critical issue from Jackson — -whether or not the employer’s subrogation interest is preserved by the underlying settlement. The underlying-settlement in Jackson involved a comprehensive settlement of all claims and was not a Naig settlement. Jackson, 542 N.W.2d at 622-23. The focus of the supreme court’s analysis in Jackson rested on this fact, as opposed to the percentage of the policy limits, which the Doubravas have argued.

Therefore, the critical question is whether the settlement proposed by the Doubra-vas — in the context of the suit against the Meads — compromises the subrogation interest of State Fund. The record on appeal does not answer this question. But in response to questioning at oral argument, Doubravas’ counsel stated that this settlement is not a Naig settlement. It is therefore a comprehensive settlement that would settle State Fund’s interest without its consent.

Here, the district court placed great weight on Jackson to support its conclusion that State Fund’s motion to intervene was premature and should have come after the court had an opportunity to rule on the settlement motion. The court reasoned that if settlement were eventually granted, State Fund would properly “be permitted the opportunity to intervene [regarding] the division of the [settlement] proceeds” under Minn.Stat. § 176.061, subd. 6 (2004). The district court also noted that Mead “appears to lack the financial resources to respond to a claim beyond that of the policy limits which are already being tendered [by his insurer, FMIC].” In denying State Fund’s motion to intervene, the district court essentially ruled that its motion was untimely.

The determination of whether intervention is timely must be considered on a case-by-case basis. Omegon, Inc. v. City of Minnetonka, 346 N.W.2d 684, 687 (Minn.App.1984), review denied (Minn. June 12, 1984). “Timeliness of an application depends on factors such as how far the suit has progressed, the reason for the delay in seeking intervention, and any prejudice to the existing parties because of the delay.” Blue Cross/Blue Shield, 509 N.W.2d at 396. In addition, intervention should not be allowed where circumstances show that the would-be intervenor was aware of the suit and permitted it to proceed, waiting to see if the outcome would be favorable to its interest. Id.

But given the circumstances here and the clear language of MinmStat. § 176.061, subd. 8a- — that “any settlement between the employee or the employee’s dependents and the third party is void as against the employer’s right of subroga tion or indemnity” — we conclude that State Fund must be given the right to intervene before approval or disapproval of the settlement motion in order to protect its subrogation interest. Id. (emphasis added). If State Fund is not permitted to intervene and the settlement motion is approved, State Fund’s subrogation right would be completely compromised without its input, and its only relief would lie within the confines of the allocation formula of subdivision 6. Even if evidence exists that Mead is in all likelihood judgment-proof, State Fund should be allowed to refute this evidence before a settlement is approved. As in Nommi, here State Fund “has met its burden under Rule 24.01 by proving that it has an interest in the action and that its interest would be impaired or impeded by not fully participating in the litigation.” 383 N.W.2d at 677.

Moreover, the supreme court has emphasized that, “under modern practice, the extensive use of intervention should- be encouraged.” Id. at 678. It has also continuously “stressed the value of intervention for the employer seeking to protect its subrogation rights.” Id.; see also Easterlin v. State, 330 N.W.2d 704, 708 (Minn. 1983) (explaining that “it is important for the employer, if the employee has already commenced suit, to be able to appear therein or to exercise its statutory right to intervene.”). It is thus our policy to encourage intervention whenever possible. Norman, 383 N.W.2d at 678.

Given the clear directive of subdivision 8a, as well as State Fund’s important interest in protecting its subrogation interest, we fail to see how the circumstances here could deny State Fund its statutory right to vigorously protect that interest. In restating the rule of subdivision 8a, Jackson highlights the statute’s “explicit provision that any settlement agreement between an employee and a third-party tortfeasor which purports to settle the employer’s subrogation interest without the employer’s consent ‘is void as against the employer’s right of subrogation....’” 542 N.W.2d at 624 (emphasis added) (quoting Minn.Stat. § 176.061, subd. 8a). We therefore reverse and remand with instructions that State Fund be permitted to intervene at this point in the litigation in order to protect its subrogation interest before the district court rules on the settlement motion.

Finally, State Fund argues that it should be allowed to intervene so it can conduct discovery with regard to fact issues such as the reasonableness of the Doubravas’ attorney fees in the underlying settlement proposal. Because we reverse and remand the district court’s ruling denying intervention, we need not address this related claim here.

II.

In their notice of review, the Doubravas separately argue that the district court erred in denying their request for attorney fees and costs against State Fund. The standard of review for an appellate court examining an award or denial of attorney fees and costs is whether the district court abused its discretion. Minn. Council of Dog Clubs v. City of Minneapolis, 540 N.W.2d 903, 904 (Minn.App.1995), review denied (Minn. Jan. 25, 1996).

The Doubravas submitted their motion for attorney fees and sanctions under Minn. R. Civ. P. 11 and Minn.Stat. § 549.211 (2004). The motion was based on State Fund’s attempts to depose the Dou-bravas’ attorney and conduct other allegedly improper discovery, prior to having been granted intervention status in the underlying liability action. The district court summarily denied the request without discussion in its opinion.

Minn.Stat. § 549.211, subd. 2, provides that an attorney who presents any document to the court must certify four things:

(1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
(3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.

Id. The dispute here seems to center around State Fund’s initial failure to give notice to the Doubravas’ counsel of its motion to intervene in the case. See n. 3 (above). When State Fund gave notice of intervention to the Doubravas — but not their counsel- — it proceeded with discovery on the “reasonable cost of collection” issue under Minn.Stat. § 176.061, subd. 6(a) (“After deducting the reasonable cost of collection, including but not limited to attorneys fees ... ”). This was presumably done in an effort to challenge the Doubravas’ projected attorney fees under the proposed settlement as “unreasonable.” See City of Minnetonka v. Carlson, 298 N.W.2d 763, 766-67 (Minn.1980) (articulating factors to be considered in determining the reasonableness of attorney fees). But under these facts, and given the potential misunderstanding, we determine that the district court did not abuse its broad discretion by denying the Doubravas’ request for attorney fees.

III.

In a motion filed with this court just before oral argument, State Fund seeks to dismiss issues that it alleges the Doubravas raised for the first time on appeal in their brief. State Fund claims that the Doubravas did not argue to the district court (1) that Minn.Stat. § 176.061 refers only to “employer” and not to “insurer,” thereby precluding statutory rights to a workers’ compensation insurer, and (2) that State Fund’s intervention was untimely. But given our decision to permit State Fund’s intervention on the merits, we deny State Fund’s motion as moot.

DECISION

Because the district court erred by denying State Fund’s motion to intervene, we reverse and remand with instructions for the district court to permit the intervention, as required by Minn.Stat. § 176.061, subd. 8a (2004). In addition, we affirm the district court’s denial of attorney fees and deny State Fund’s motion to dismiss issues allegedly raised on appeal for the first time.

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

      . A balance of $296,390 from the $300,000 policy limit remained because $3,610 had already been paid for property damage.

      . State Fund alleges that its total subrogation claim is approximately $250,000— $111,961.32 representing workers' compensation benefits paid to and on behalf of the Doubravas by State Fund and the balance representing future payable benefits.

      .While State Fund had previously filed a motion to intervene in October 2003, it failed to serve the motion upon the Doubravas’ counsel. State Fund's argument that the Doubravas failed to timely object is thus without merit.

      . We note that Doubrava's injury occurred in June 2000. State Fund moved to intervene in January 2004. Only minor changes not relevant to our analysis were made to the Workers' Compensation Act (WCA) in 2000. Accordingly, for ease of reference, we cite to the 2004 version of the WCA throughout this opinion.

      . Under the statutory formula of Minn.Stat. § 176.061, subd. 6 (2004), the Doubravas estimate the following allocation between the parties: $99,730.50 to the Doubravas' attorneys; $65,487.54 to the Doubravas; $73,894.46 to State Fund; and the remaining balance of $57,277.27 to the Doubravas, with future credit to State Fund.

      . Naig settlements are settlements "wherein the employee recovers from the third party all damages not recoverable under worker's compensation, notifies the employer of the settlement negotiations, and expressly reserves the employer’s right to be subrogated to the employee's negligence claim pursuant to Minn.Stat. § 176.061.” M.W. Ettinger Transfer & Leasing Co. v. Schaper Mfg., Inc., 494 N.W.2d 29, 32 (Minn. 1992) (citing Naig v. Bloomington Sanitation, 258 N.W.2d 891, 894-95 (Minn. 1977)).

      . Any tort recovery an employee receives in judgment or in settlement is to be divided between the employee and the employer-insurer.
      Under subdivision 6, the employee's tort recovery is divided as follows: first, collection expenses and attorney fees (about 1/3 of the recovery); then 1/3 outright to the employee; next the employer's subrogation claim less a pro rata share for attorney fees; and finally, any balance remaining to the employee subject to a credit to the employer for any future benefits payable.

        Kliniski v. Southdale Manor, Inc., 518 N.W.2d 7, 9 n. 2 (Minn. 1994).


text:
    In re Marcus LeRoy SIEWERT, petitioner, Appellant, v. Janet Marie SIEWERT, Respondent.
    No. A04-702.
    Court of Appeals of Minnesota.
    Feb. 8, 2005.
    Jill I. Frieders, O’Brien & Wolf, LLP, Rochester, MN, for appellant.
    Steven C. Youngquist, Youngquist Law Office, Rochester, MN, for respondent.
    Considered and decided by PETERSON, Presiding Judge; WILLIS, Judge; and HUDSON, Judge.
   OPINION

WILLIS, Judge.

Appellant challenges the district court’s interpretation and application of the ante-nuptial agreement executed by him and respondent. Respondent, by notice of re■view, challenges both the district court’s determination that the .antenuptial agreement was valid and its application of the agreement to certain properties awarded to appellant as nonmarital property. Because the district court erred by determining that .the antenuptial agreement was valid and enforceable, we reverse and remand.

FACTS

Appellant Marcus LeRoy Siewert and respondent Janet Marie Siewert, now known as Janet Holst (Holst), were married on July 16, 1982. Four days before they were married, the parties signed an antenuptial agreement, which was also signed and notarized by the lawyer who drafted the agreement. No other witnesses signed the agreement.

Siewert filed a petition on April 12, 2001, for dissolution of the marriage. Holst challenged the enforceability of the ante-nuptial agreement, and in July and August 2002, the parties appeared before the district court for an evidentiary hearing to determine that issue. In November 2002, the district court determined that the ante-nuptial agreement was a valid and legally binding contract. A dissolution trial was held in the spring of 2003 before a second district court judge, and judgment was filed on September 16, 2003. Siewert moved for a new trial or, in the alternative, for amended findings and conclusions of law. The district court filed an amended judgment in March 2004. The district court divided the parties’ property in accordance with its reading of the antenup-tial agreement. This appeal follows.

ISSUE

Did the district court err by determining that the antenuptial agreement at issue was valid and enforceable?

ANALYSIS

Holst claims that the antenuptial agreement here is invalid because it was not executed in accordance with statutory requirements. Siewert argues that because Holst’s notice of review only identifies the orders for judgment entered on September 16, 2003, and on March 9, 2004, she failed to preserve for appeal the issue' of the validity of the antenuptial agreement; . therefore, Siewert argues, this court does not have jurisdiction to review the November 2002 order.

Minnesota appellate courts may review “any order affecting the order from which the appeal is taken and on appeal from a judgment may review any order involving the merits or .affecting the judgment.” Minn. R. Civ.App. P. 103.04. They may also “review any other matter as the interest of justice may require.” Id.

“A respondent may obtain review of a judgment or order entered in the same action which may adversely affect respondent by filing a notice of review with the clerk of the appellate courts. The notice of review shall specify the judgment or order to be reviewed.... ” Id., 106. Here, Holst filed a notice of review specifying the September 2003 and March 2004 judgments for this court’s review.

Nonappealable orders may be considered on appeal from a judgment if such orders involve the merit's or affect the judgment. Thuma v. Kroschel, 506 N.W.2d 14, 19 (Minn.App.1993), review denied (Minn. Dec. 14, 1993). A district court’s order in an evidentiary hearing is a nonappealable order. See Minn. R. Civ. App. P. 103.03 (listing appealable orders and not mentioning orders in evidentiary hearings). The November 2002 order resulting from the evidentiary hearing was therefore not appealable. The order determined that the antenuptial agreement was a valid and legally binding contract and affected the judgment because the district court relied on the antenuptial agreement to determine what property of the parties was marital property. Consequently, this court may review whether the district court erred by concluding that the antenuptial agreement is valid and enforceable..

Holst argues that the antenuptial agreement is invalid and unenforceable because it was improperly executed and is both procedurally and substantively unfair. Whether an antenuptial agreement is valid is a question of law subject to de novo review. Pollock-Halvarson v. McGuire, 576 N.W.2d 451, 454 (Minn.App.1998), review denied (Minn. Maya 28, 1998). An antenuptial contract must be “in writing, executed in the presence of two witnesses and acknowledged by the parties, executing the same before any officer or person authorized to administer an oath under the laws of this state.” Minri.Stat. § 519.11, subd. 2 (2002). Such an agreement is valid and enforceable if “(a) there is a full and fair disclosure of the earnings and property of each party, and (b) the parties have had an opportunity to consult with legal counsel of then- own choice.” Id., subd. 1 (2002). The person challenging a duly acknowledged and attested antenuptial contract carries the burden of proof. Id., subd. 5 (2002). The relevant statutory language is unchanged from the language that was in effect when the parties signed the antenuptial agreement. See Minn. Stat. § 519.11 (1980).

Holst argues that the antenuptial agreement is invalid and unenforceable because it was executed before only one witness and does not, therefore, comply with the statute. Siewert points to Petty v. Reese, No. C8-98-1576 (Minn.App. May 7, 1999), an unpublished decision of this court, to argue that the fact that there is only one witness does not make an antenuptial agreement unenforceable. But not only is Petty nonpreeedential, it is also inappo-site. The antenuptial agreement at issue in Petty was executed in Nebraska, and “the pai-ties reasonably relied on the appearance that Nebraska law required only one witness for proper execution of the agreement, since the standard form [the attorney] used to draft the agreement contained only one signature line for witnesses.” Id. at *2.

Siewert also cites Pollock-Halvarson to argue that the absence of a witness is not fatal to the validity and enforceability of the antenuptial agreement here. In that case, this court determined that an ante-nuptial agreement was valid even though only the notary public and one other person witnessed the agreement and even though the notary public was not commissioned. Pollock-Halvarson, 576 N.W.2d at 457-58. The court determined that a notary can act as a witness and that the statute does not require two witnesses in addition to the notary. Id. And the court also found no reason to disturb the agreement when the parties acted in good faith and believed that the notary public was commissioned. Id.

The antenuptial agreement here was signed by the parties and one witness — the notary public. Siewert offers no explanation for the fact that the antenuptial agreement was not witnessed by two people. He does not allege, for example, that the parties believed in good faith that one witness satisfied the statutory requirement and that there was a reasonable basis for that belief. The district court determined that “[t]he absence of a second witness at execution time is of no impact in this matter,” without further explanation or citation of any legal authority. Because two witnesses did not sign the antenuptial agreement here, on its face it does not satisfy the plain requirement of Minn.Stat. § 519.11, subd. 2, and it is invalid and unenforceable.

Because of our conclusion that the ante-nuptial agreement is invalid and unenforceable, we do not reach whether the agreement was substantively or procedurally unfair.

DECISION

Because the antenuptial agreement was not executed in accordance with statutory requirements, we find that the district court erred by holding that the antenuptial agreement is valid and enforceable. We therefore reverse and remand for a division of the parties’ property in accordance with Minnesota law.

Reversed and remanded.