author: KLAPHAKE, Judge.

text:
    Lee Thomas MARTINEK, petitioner, Appellant, v. STATE of Minnesota, Respondent.
    No. A03-1033.
    Court of Appeals of Minnesota.
    May 4, 2004.

      John M. Stuart, State Public Defender, Cathryn Middlebrook, Assistant State Public Defender, Minneapolis, MN, for appellant.
    Mike Hatch, Attorney General, St. Paul, MN and Amy Klobuchar, Hennepin County Attorney, Michael Richardson, Assistant County Attorney, Minneapolis, MN, for respondent.
    Considered and decided by HARTEN, Presiding Judge, RANDALL, Judge, and KLAPHAKE, Judge.
   OPINION

KLAPHAKE, Judge.

Appellant Lee Thomas Martinek appeals from an order denying his petition for postconviction relief. Appellant challenges the addition of a 10-year conditional release term to his sentence for second-degree criminal sexual conduct, arguing that the district court could not add sanctions after expiration of his sentence.

Because the district court judge’s letter to the Department of Corrections (DOC), which was neither filed in the court file nor served on appellant, is not an effective order to amend appellant’s sentence, and because appellant’s sentence expired before a valid order was issued, we reverse.

FACTS

On September 7,1994, appellant pleaded guilty to one count of second-degree criminal sexual conduct for an offense committed on July 23, 1994. See Minn.Stat. § 609.343, subd. 1(a) (1994). At the time of this plea, appellant was on probation for a 1991 conviction for third-degree criminal sexual conduct. According to the plea negotiations, appellant agreed to plead guilty in exchange for a guidelines sentence, to be served concurrent with the 88-month unexecuted sentence on the 1991 conviction. No conditional release requirement was mentioned. See Minn.Stat. § 609.346, subd. 5 (1994).

On October 31, 1994, after a presentence investigation, the district court accepted appellant’s plea, sentenced him to 54 months, and executed his suspended sentence on the 1991 conviction. Both sentences were to be served concurrently. At the sentencing hearing, the prosecutor stated:

One other thing [the probation officer] pointed out to me, under Minn.Stat. 609.346, Subd. 5, [appellant] will be on supervised release following the length of the sentence in that the Court is to advise him that he will be on supervised release. It is unclear whether he will have to serve an additional five years of release time or 10 years depending on how the Commissioner construes that statute regarding second or subsequent offenses with you. In any event, I think [appellant] should be aware that there will be additional supervisory period following his release from prison and parole status.

Neither appellant nor his attorney commented on the prosecutor’s statements. The district court imposed the 54-month sentence, explaining that at least two-thirds of it must be served in prison and that the remaining one-third would be on supervised release, unless appellant committed a disciplinary violation. In that case, the court warned appellant that “if [he commited] a disciplinary violation in or out of prison [his] actual time in prison could be extended to the entire 54 months in this case.” The court added, “What I am hearing here is if there’s a lack of clarity and when we proceed to the revocation whether there will be extended time added onto the supervisory release, ... is that correct?” The prosecutor responded, “That is correct, Your Honor.”

The court then executed appellant’s sentence on the 1991 conviction. The following exchange ensued:

THE COURT: ... Now, there is some question as we’ve discussed earlier in court here exactly how long your supervisory release will be between the revocation matter as well as the plea that you put in today.
[APPELLANT]: I understand.
THE COURT: That will be determined and you will have notice but I think they need to look at your previous matter as well as new matter and figure out how that sentence will be structured.
[APPELLANT]: Yes.
THE COURT: Any questions?
[APPELLANT]: Nope.

The sentencing judgment and warrant of commitment contained no reference to any conditional release.

In 1996, the DOC contacted the district court judge to determine whether conditional release terms had been added to the sentences. On April 3, 1996, the judge wrote a letter to the DOC stating that appellant’s sentence should include a 10-year conditional release period, minus any time spent on supervised release. Appellant did not receive a copy of this letter and the letter apparently remained in the DOC file; it was never filed or included in the district court file. On October 3, 1999, appellant’s sentence for the 1994 conviction expired; on July 3, 2001, appellant’s 88-month sentence for the 1991 conviction expired.

On April 25, 2000, the district court issued amended sentencing orders, adding a conditional release term of five years to the 1991 conviction and ten years to the 1994 conviction. No hearing was held and appellant testified that he did not receive the amended orders.

Assuming that he was discharged, appellant failed to contact his parole officer after his 1991 sentence expired on July 3, 2001. He was subsequently arrested on a warrant for failing to keep in touch with his parole officer while on conditional release.

On May 30, 2002, appellant petitioned for postconviction relief from the amended sentencing orders. On July 2, the district court vacated both orders, concluding that the 1991 conviction pre-dated the conditional release law and that the 1994 sentence expired prior to issuance of the amended sentencing orders. The district court expressly stated: “The Court notes however that [appellant’s] motion is limited to the Amended Sentencing Orders issued on April 26, 2000 and therefore this Court takes no position as to the validity of the 1996 letter sent and filed by [the original district court judge].”

After this order was entered, appellant assumed he was discharged, but he was again arrested and held for failing to contact his parole officer while on conditional release. Appellant filed a second petition for postconviction relief. On June 3, 2003, the district court issued an order denying his request for relief, concluding that appellant had been advised at sentencing that an additional supervisory period would be imposed and that the district court judge’s 1996 letter constituted an order. This appeal followed.

ISSUE

Did the district court abuse its discretion by denying appellant’s request for postconviction relief?

ANALYSIS

Appellate review of a postconviction proceeding is limited to determining whether there is sufficient evidence to support the findings of the postconviction court and whether the postconviction court abused its discretion. State v. Christopherson, 644 N.W.2d 507, 509-10 (Minn.App.2002), review denied (Minn. July 16, 2002).

“The United States and Minnesota Constitutions, through their due process clauses, ensure that sentencing proceedings observe the standards of fundamental fairness essential to justice.” State v. Calmes, 632 N.W.2d 641, 645 (Minn.2001) (quotation omitted). “In sentencing proceedings, due process requires that a defendant have notice, an opportunity to be heard, and an opportunity to confront and cross-examine witnesses.” State v. Kortkamp, 560 N.W.2d 93, 96 (Minn.App.1997). Considerations of due process are also implicated when a defendant is not accurately apprised of the consequences of a plea. See State v. Wukawitz, 662 N.W.2d 517, 521 (Minn.2003).

At issue here is whether the district court’s 1996 letter to the DOC, which was neither filed nor served on appellant, constituted a valid, enforceable order. We conclude that fundamental principles of due process require that a defendant be given some notice of an order before that order can be effective.

A district court may correct an unauthorized sentence without violating due process, where a defendant has notice that a correction is required and has not developed a crystallized expectation as to the finality of the sentence. Calmes, 632 N.W.2d at 648. In Calmes, the district court added a conditional release term two weeks after sentencing. Calmes immediately moved to vacate the conditional release term, and the sentencing court granted the motion. Id. at 644. Between that time and the time of his release, the supreme court released a number of decisions holding that the conditional release term is mandatory and nonwaivable. Id. Upon Calmes’ release, the sentencing court reimposed, through an amended sentencing order, the five-year conditional release term. Id. On appeal from the amended sentencing order, the supreme court concluded that Calmes had sufficient notice of the requirement of conditional release due to the district court’s earlier attempt to impose a conditional release requirement. Id. at 648-49.

While the facts of this case tend to resemble those in Calmes, nothing in the record here shows that appellant received any notice that a conditional release term had been imposed. At sentencing, the district court merely acknowledged that a term would be imposed at some later time. While an amended sentencing order was subsequently issued, that order was vacated by the first postconviction court because appellant’s sentence expired before the order was issued. Here, the state attempts to rely solely on the district court judge’s 1996 letter to the DOC, which was neither filed with the court administrator, nor included in the district court file. There is no evidence that appellant received a copy of the letter, which was simply placed in the DOC’s file. Given these facts, we conclude that the 1996 letter cannot be construed as an order amending appellant’s sentence.

To be effective, a court order must become a part of the official record, whether by transcript or document. See State v. Hoelzel, 639 N.W.2d 605, 609 (Minn.2002) (stating that district court’s record conviction and enter judgment in court file); State v. Pflepsen, 590 N.W.2d 759, 767 (Minn.1999) (stating that because of imprecision of transcripts relating to sentencing and conviction orders, “we typically look to the official judgment of conviction, which generally appears as a separate entry in the file”). An exchange of letters, to which a defendant is not privy and which is not made a part of the official record, deprives a defendant of a fundamental right of due process. On the facts before us, appellant did not receive notice of the imposition of conditional release, nor could he have discovered this by reviewing the district court file.

Finally, we acknowledge that if appellant had not been discharged from his sentence, an amended sentencing order could be entered imposing a conditional release term. However, “[t]he expiration of a sentence operates as a discharge that bars further sanctions for a criminal conviction.” State v. Purdy, 589 N.W.2d 496, 498 (Minn.App.1999). While conditional release is mandatory and nonwaivable, it represents a significant modification to a criminal sanction, carrying with it the possibility of imprisonment for an additional 10 years. See Calmes, 632 N.W.2d at 650. Once a sentence has expired, the court no longer has jurisdiction to modify even what may be an unauthorized sentence. Purdy, 589 N.W.2d at 498-99. The district court no longer has jurisdiction to modify appellant’s sentence by adding a conditional release term.

DECISION

Because the district court’s 1996 letter cannot be construed to amend appellant’s sentence and because appellant’s sentence has since expired, the district court lacks authority to add a conditional release term to his sentence. The district court therefore abused its discretion by denying appellant’s petition for postconviction relief.

Reversed.

      . In 1998, the requirement for conditional release of sex offenders was recodified at Minn.Stat. § 609.109, subd. 7 (2002). See 1998 Minn. Laws ch. 367, art. 6, § 6.


source: Caselaw Access Project

author: ROBERT H. SCHUMACHER, Judge.

license: Public Domain

text:
    STATE FARM, as insurer of Andrew Heberling, et al., Respondent, v. LIBERTY MUTUAL INSURANCE CO., as insurer of Tiller Corporation, d/b/a Barton Sand and Gravel Co., Appellant.
    No. A03-1205.
    Court of Appeals of Minnesota.
    May 4, 2004.

      Bradley T. Cosgriff, La Bore, Giuliana, Cosgriff Viltoft, Ltd., Hopkins, MN, for respondent.
    John H. Guthmann, Elyssa J. Weber, Hansen, Dordell, Bradt, Odlaug Bradt, P.L.L.P., St. Paul, MN, for appellant.
    Considered and decided by WILLIS, Presiding Judge; SCHUMACHER, Judge; and WRIGHT, Judge.
   OPINION

ROBERT H. SCHUMACHER, Judge.

Liberty Mutual Insurance Company, as insurer of Tiller Corporation, d/b/a Barton Sand and Gravel Co., appeals from a judgment partially vacating the arbitrator’s award and granting summary judgment to respondent State Farm, as insurer of Andrew Heberling, Michael Heberling, and Evan McCartney-Melstad. Liberty Mutual argues the district court improperly vacated the arbitrator’s award regarding the no-fault benefits paid for Andrew Heber-ling’s injuries because the claim arises under the Minnesota Wrongful Death Act, Minn.Stat. §§ 573.01-573.02 (2002), and thus barred by a three-year statute of limitations. State Farm has also filed a notice of review claiming the district court erroneously denied its motion for an award of interest pursuant to Minn.Stat. § 65B.54, subd. 2 (2002). We affirm.

FACTS

This case arises from an accident in April 1997 between a tractor-trailer and a school bus. Michael Heberling, Andrew Heberling, and Evan McCartney-Melstad were passengers on the school bus when it was struck and all were injured. State Farm was the no-fault insurer for all three children. Andrew Heberling died as a result of his injuries. State Farm paid no-fault medical expense in the amount of $59,919 for Andrew Heberling and $6,000 for funeral expenses, as well as no-fault benefits for the other children. Liberty Mutual provided residual liability insurance for Tiller Corporation, the owner of the tractor-trailer that struck the bus.

State Farm filed for arbitration under Minn.Stat. § 65B.53 (2002), seeking indemnity from Liberty Mutual on all expenses it paid to Andrew Heberling and the other children. The arbitrator found State Farm’s claim of indemnity for expenses paid on behalf of Andrew Heberling could not stand because the “wrongful death statute of limitations ha[d] run” and awarded State Farm the expenses it paid on behalf of the other children.

State Farm sought district court review of the arbitrator’s award. It requested the court vacate the portion of the arbitrator’s award that found Andrew Heberling’s claim was time barred. The district court vacated the requested portion of the arbitrator’s award and entered judgment against Liberty Mutual in the amount of $59,327 with respect to Andrew Heberling and in amounts claimed with respect to the other two children.

Liberty Mutual filed a notice of appeal. State Farm filed a notice of review with this court seeking review of the district court’s judgment, which it claims denied its motion for an award of interest.

ISSUES

1. Is State Farm’s claim for indemnity under Minn.Stat. § 65B.53, where its insured died as a result of injuries sustained in the accident, a claim under the Wrongful Death Act, which provides a three-year statute of limitations?

2. Is State Farm entitled to interest for the no-fault benefits it has paid?

ANALYSIS

1. Liberty Mutual argues that the three-year statute of limitations provided by the Wrongful Death Act is the proper statute of limitation for a claim of indemnity under Minn.Stat. § 65B.53, subd. 1, when the no-fault benefits were paid on behalf of its insured who’ later died from injuries suffered in the accident, rather than the general six-year statute of limitations.

On an appeal from summary judgment, this court asks two questions: (1) whether there are any genuine issues of material fact and (2) whether the lower courts erred in their application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). The district court’s summary judgment was based on a no-fault arbitrator’s decision of fault. An arbitrator’s findings of fact are final. Ortega v. Farmers Ins. Group, 474 N.W.2d 7, 9 (Minn.App.1991). There are no issues of fact in this case.

When reviewing a no-fault arbitration award, questions of law are reviewed de novo. Id. (stating in no-fault cases normal finality of arbitrator’s judgment on questions of law does not apply). The construction and applicability of statutes of limitations are questions of law. Noske v. Friedberg, 670 N.W.2d 740, 742 (Minn.2003).

This court in 1995 addressed whether an action for indemnification under Minn.Stat. § 65B.53, subd. 1, was subject to the six-year statute of limitations of Minn.Stat. § 541.05, subd. 1(2), or whether there was no statute of limitations for such actions. Metro. Prop. & Cas. Ins., Co v. Metro. Transit Comm’n, 526 N.W.2d 628 (Minn.App.1995), aff'd on other grounds by 538 N.W.2d 692 (Minn.1995). We concluded: “Because indemnification rights among insurers under the no-fault act are created by statute, we find the six-year statute of limitations of Minn.Stat. § 541.05, subd. 1(2) applies to indemnification actions under Minn.Stat. § 65B.53, subd. 1.” Id. at 630.

The present case, however, requires this court to determine whether a no-fault insurer’s claim for indemnity under section 65B.53, subd. 1, falls under the scope of the Wrongful Death Act when the insured dies as a result of injuries sustained in the accident. “The object of all interpretation and construction of laws is to ascertain and effectuate the intention of the legislature.” MinmStat. § 645.16 (2002). Thus, we must determine the legislature’s intent in enacting the Minnesota No-Fault Automobile Insurance Act, Minn.Stat. §§ 65B.41-65B.71 (2002), and the Wrongful Death Act. ■

Minnesota has developed a comprehensive set of statutes regulating no-fault automobile insurance. See Minn.Stat. § 65B.41 (stating sections 65B.41-65B.71 may be cited as “Minnesota No-Fault Automobile Insurance Act”). One of the stated purposes of the Minnesota No-Fault Automobile Insurance Act is “to create a system of mandatory intercompany arbitration to assure a prompt and proper allocation of the costs of insurance benefits between motor vehicle insurers.” Minn. Stat. § 65B.42(4). In furtherance of this purpose, the legislature provided a right of indemnity between insurers under section 65B.53, which provides:

A reparation obligor paying or obligated to pay basic or optional economic loss benefits is entitled to indemnity subject to the limits of the applicable residual liability coverage from a reparation obli-gor providing residual liability coverage on a commercial vehicle of more than 5,500 pounds curb weight if negligence in the operation, maintenance or use of the commercial vehicle was the direct and proximate cause of the injury for which the basic economic loss benefits were paid or payable to the extent that the insured would have been liable for damages but for the deduction provisions of section 65B.51, subdivision 1.

Minn.Stat. § 65B.53, subd. 1. When a no-fault insurer seeks indemnity from the residual liability insurer of a commercial vehicle, section 65B.53 provides the right “shall be enforceable only through mandatory good-faith and binding arbitration procedures.” Minn.Stat. § 65B.53, subd. 4.

Liberty Mutual argues that because Andrew Heberling died, State Farm’s claim for indemnity is subject to the Wrongful Death Act, which provides, “A cause of action arising out of an injury to the person dies with the person of the party in whose favor it exists, except as provided in section 573.02.” Minn.Stat. § 573.01. Liberty Mutual argues that because State Farm’s claim for indemnity falls under the Wrongful Death Act, State Farm was required to file its claim within the three-year time frame required under that act.

The exception to the general rule extinguishing a cause of action for a pure personal tort when the injured party died, provides:

When death is caused by the wrongful act or omission of any person or corporation, the trustee appointed as provided in subdivision 3 may maintain an action therefor if the decedent might have maintained an action, had the decedent lived, for an injury caused by the wrongful act or omission. An action to recover damages for a death caused by the alleged professional negligence of a physician, surgeon, dentist, hospital or sanitarium, or an employee of a physician, surgeon, dentist, hospital dr sanitarium shall be commenced within three years of the date of death, but in no event shall be commenced beyond the time set forth in section 541.076. An action to recover damages for a death caused by an intentional act constituting murder may be commenced at any time after the death of the decedent. Any other action under this section may be commenced within three years after the date of death provided that the action must be commenced within six years after the act or omission. The recovery in the action is the amount the jury deems fair and just in reference to the pecuniary loss resulting from the death, and shall be for the exclusive benefit of the surviving spouse and next of kin, proportionate to the pecuniary loss severally suffered by the death. The court then determines the proportionate pecuniary loss of the persons entitled to the recovery and orders distribution accordingly. Funeral expenses and any demand for the support of the decedent allowed by the court having jurisdiction of the action, are first deducted and paid. Punitive damages may be awarded as provided in section 549.20.

Minn.Stat. § 573.02, subd. 1 (emphasis added).

The supreme court has long recognized that the Wrongful Death Act is a codification of the common law rule that “a cause of action for a pure personal tort” does not survive the death of the injured party unless the Wrongful Death Act provides for specific exceptions. Green v. Thompson, 26 Minn. 500, 5 N.W. 376 (1880) (emphasis added) (discussing Gen. St. 1878, c. 77, § 2); see Regie de l’assurance Auto, du Quebec v. Jensen, 399 N.W.2d 85, 91 (Minn.1987) (noting Gen. St. 1878, c. 77, § 2 was the predecessor statute to Minn. Stat. § 573.02, subd. 1, and applying supreme court cases interpreting 1878 law); W. Union Tel. Co. v. Spaeth, 232 Minn. 128, 132, 44 N.W.2d 440, 442 (1950) (stating “reenactment of a statute without change, after construction of the statute by [the supreme court], presumptively constitutes an adoption of such construction”).

Further, the supreme court has stated:

It is well understood that our wrongful death act was enacted for the manifest purpose of granting a right of action, that did not exist at common law, to the personal representative of decedent for the exclusive benefit of the surviving spouse or next of kin of the deceased person, provided the injured party himself could have maintained the action had he lived.

Beck v. Groe, 245 Minn. 28, 45, 70 N.W.2d 886, 897 (1955) (emphasis added). In considering whether a cause of action under section 573.02 was assignable, the supreme court stated: “[A] death by wrongful act claim does not survive the death of the decedent so to be assertable by a personal representative. Rather, it is created by the decedent’s death.” Regie, 399 N.W.2d at 89.

We conclude the statutory right of indemnity granted a no-fault insurer under section 65B.53, is outside the scope of claims the legislature intended section 573.02 to cover. First, the no-fault act provides the insurer the right to recover the money and not the insured. A provision of the no-fault act provides:

With respect to a cause of action in negligence accruing as a result of injury arising out of the operation, ownership, maintenance or use of a motor vehicle with respect to which security has been provided as required by sections 65B.41 to 65B.71, the court shall deduct from any recovery the value of basic or optional economic loss benefits paid or payable, or which would be payable but for any applicable deductible.

Minn.Stat. § 65B.51, subd. 1. Subdivision 2 of the same statute states: “A person may bring a negligence action for economic loss not paid or payable by a reparation obli-gor....” Minn.Stat. § 65B.51, subd. 2. When reviewed together with the specific grant given to the no-fault insurer to recover for the benefits it has paid, under section 65B.53, we conclude the legislature intended the right to recover no-fault benefits to be placed in the hands of the party who actually paid the expenses and not the injured party. Because the injured party could not maintain an action for no-fault benefits paid on his behalf had he lived, it is not appropriate to consider a claim for indemnity under section 65B.53 a wrongful death action subject to section 573.02. See Beck, 245 Minn, at 45, 70 N.W.2d at 897.

Furthermore, a wrongful death claim is created by the decedent’s death.' Regie, 399 N.W.2d at 89. Whereas, section 65B.53, subdivision 1, creates a right of indemnity for a no-fault insurer when it “pay[s] or [is] obligated to pay basic or optional economic loss benefits.” A no-fault insurer is required to pay basic economic benefits as they accrue. Minn.Stat. § 65B.54, subd. 1. “Loss accrues not when injury occurs, but as income loss, replacement services loss, survivor’s economic loss, survivor’s replacement services loss, or medical or funeral expense is incurred.” Id. Thus, the no-fault insurer’s claim for indemnity arises from the payment of covered expense and not the death of the insured. Because the no-fault insurer’s claim is not created by the insured’s death, the claim does not fall within the scope of the wrongful death act. See Regie, 399 N.W.2d at 89.

Moreover, what is recoverable under the Wrongful Death Act is inconsistent with a claim of indemnity under section 65B.53. The Wrongful Death Act provides, “The recovery in the action is the amount the jury deems fair and just in reference to the pecuniary loss resulting from the death, and shall be for the exclusive benefit of the surviving spouse and next of kin, proportionate to the pecuniary loss severally suffered by the death.” Minn.Stat. § 573.02, subd. 1 (emphasis added). In contrast, under section 65B.53, subdivision 1, the no-fault insurer may recover from the commercial residual liability insurer the amount of no-fault benefits paid,.which are primarily expenses that result from injuries sustained in the accident. See Minn.Stat. § 65B.44 (defining basic economic loss benefits to include medical expenses).

Finally, the Wrongful Death Act indicates a wrongful death claim should be resolved in a jury trial. Minn.Stat. § 573.02, subd. 1. Section 573.02 provides that the “recovery in the action is the amount the jury deems fair and just,” and that the “court then determines the proportionate pecuniary loss” and details how to manage certain expense “allowed by the court having jurisdiction of the action.” Id. (emphasis added). In contrast, a claim for indemnity under 65B.53, subd. 1, is “enforceable only through mandatory good-faith and binding arbitration procedures.” Minn.Stat. § 65B.53, subd. 4.

Liberty Mutual argues that the supreme court’s decision in Regie is disposi-tive of the present issue because the court should not treat a statutory right of indemnity any different from an equitable right of subrogation. Setting aside the distinction between a claim specifically granted by statute and one based on equity, the plain language of section 65B.53 demonstrates the legislature intended to distinguish between a no-fault insurer’s right of indemnity from a residual liability insurer of a commercial vehicle operator and an insurer’s right of subrogation.

Subdivisions 2 and 3 describe the situations in which a no-fault insurance provider has a right of subrogation. Subdivision 2 provides:

A reparation obligor paying or obligated to pay basic or optional economic loss benefits is subrogated to the claim for the recovery of damages for economic loss that the person to whom the basic or optional economic loss benefits were paid or payable has against another person whose negligence in another state was the direct and proximate cause of the injury for which the basic economic loss benefits were paid or payable. This right of subrogation exists only to the extent that basic economic loss benefits are paid or payable and only to the extent that recovery on the claim absent subrogation would produce a duplication of benefits or reimbursement of the same loss.

Minn.Stat. § 65B.53, subd. 2. Subdivision 3 provides the no-fault insurer with a subro-gation right for an insured’s recovery for basic economic losses in “a claim based on an intentional tort, strict or statutory liability, or negligence other than negligence in the maintenance, use, or operation of a motor vehicle.” Minn.Stat. § 65B.53, subd. 3. Because the legislature specified when a no-fault insurer had a right of subrogation, this court presumes the legislature intended the right of indemnity provided in subdivision 1 to be distinct from a right of subrogation. See United States v. Bean, 537 U.S. 71, 123 S.Ct. 584, 587 n. 4, 154 L.Ed.2d 483 (2002) (“The use of different words within related statutes generally implies that different meanings were intended.”) (quoting 2A N. Singer, Statutes and Statutory Construction § 46.06, p. 194 (6th ed.2000)). Although a claim for indemnity under MinmStat. § 65B.53 may not be a “true indemnity claim” as Liberty Mutual argues, see Allstate Ins. Co. v. Eagle-Picker Indus., Inc., 410 N.W.2d 324, 328 (Minn.1987), it is clear the legislature intended the claim to be distinct from a claim of subrogation.

2. State Farm is seeking review of what it claims was the district court’s denial of its motion for an award of interest pursuant to Minn.Stat. § 65B.54, subd. 2. At the time the district court rendered its decision, there was no motion before the court by State Farm for interest. State Farm argues it requested an award of interest by way of its proposed order. A line in a proposed order does not place an issue before a court and we decline to review the issue. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn.1988) (appellate courts generally will not considered matters not argued and considered in court below).

In Liberty Mutual’s reply brief it suggests this court, on its own initiative, should sanction State Farm under Minn. R. Civ. P. 11.03(a)(2) because it “has no good faith basis to seek interest.” Rule 11 sanctions are a matter for the district court. Minn. R. Civ. P. 1 (“These rules govern the procedure in the district courts.... ”).

DECISION

A claim of indemnity by a no fault insurer against a residual liability insurer under MinmStat. § 65B.53, subd. 1, when insured dies is not a cause of action covered by the wrongful death act. Even in those cases where the no-fault insurer’s insured dies, the claim, as a statutorily created action, is subject to the six-year statute of limitations under Minn.Stat. § 541.05, subd. 1(2).

Affirmed.


author: PER CURIAM.

text:
    2004 ND 84
    In the Matter of the RECIPROCAL DISCIPLINE OF Kenneth F. JOHANNSON, a member of the Bar of the State of North Dakota.
    No. 20040102.
    Supreme Court of North Dakota.
    April 16, 2004.
   SUSPENSION ORDERED

PER CURIAM.

[¶ 1] On April 12, 2004, the Disciplinary Board notified the Supreme Court under N.D.R. Lawyer Discipl. 4.4 that it was recommending the reciprocal discipline of Kenneth F. Johannson, a member of the bar of the State of North Dakota.

[¶ 2] The Record reflects that an Order suspending Johannson for violation of Minn. R. Prof. Conduct 1.8(k), which provides a lawyer shall not have sexual relations with a current client unless a consensual sexual relationship existed between them when the lawyer-client relationship commenced, was filed by the Minnesota Supreme Court on March 9, 2004, and a certified copy of the Order was filed by the Secretary of the Disciplinary Board on March 18, 2004.

[¶ 3] The Record further reflects that on March 25, 2004, Disciplinary Counsel served Notice pursuant to N.D.R. Lawyer Discipl 4.4(B) on H. Patrick Weir, Attorney for Johannson, by certified mail, return receipt requested; the return receipt was signed on March 26, 2004.

[¶ 4] Under N.D.R. Lawyer Discipl. 4.4(B) Johannson was given notice that a certified copy of the Order of suspension filed by the Minnesota Supreme Court was received, and he had 30 days to file any claim that the imposition of the identical discipline in North Dakota would be unwarranted and the reasons for the claim.

[¶ 5] By letter dated March 29, 2004, Johannson agreed to identical discipline as imposed by the Supreme Court of Minnesota. Johannson waived any due process defenses based upon lack of an identical North Dakota rule, and requested the suspension run .concurrent with the dates of the Minnesota suspension.

[¶ 6] Under N.D.R. Lawyer Discipl. 4.4(D), the Disciplinary Board forwarded its recommendation that Johannson be suspended from the practice of law for 90 days, to run concurrent with the suspension imposed by the Minnesota Supreme Court, and pay the costs of the disciplinary proceedings in the amount of $250. The Court considered the matter, and

[¶ 7] ORDERED, Kenneth F. Johann-son is suspended from the practice of law for a period of 90 days, effective March 23, 2004.

[¶ 8] FURTHER ORDERED, Kenneth F. Johannson pay the costs and expenses of- the disciplinary proceedings in the amount of $250, payable to the Secretary of the Disciplinary Board.

[¶ 9] FURTHER ORDERED, Kenneth F. Johannson comply with N.D.R. Lawyer Discipl. 6.3.

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

[¶ 11] The Honorable CAROL RONNING KAPSNER, deeming herself disqualified, did .not participate in this decision.


text:
    2004 ND 83
    In the Matter of the RECIPROCAL DISCIPLINE OF Robert J. SCHAEFER, a member of the Bar of the State of North Dakota.
    No. 20040101.
    Supreme Court of North Dakota.
    April 16, 2004.
   DISBARMENT ORDERED

PER CURIAM.

[¶ 1] On April 12, 2004, the Disciplinary Board notified the Supreme Court under N.D.R. Lawyer Discipl. 4.4 that it was recommending the reciprocal discipline of Robert J. Schaefer, a member of the bar of the State of North Dakota.

[¶ 2] The Record reflects that an Order disbarring Robert J. Schaefer for violation of Minn. R. Prof. Conduct 8.1(a), 8.4(c), and (d), namely misappropriation of client funds and making misrepresentations to the ethics investigator to conceal his use of the funds, was filed by the Minnesota Supreme Court on January 7, 2004, and a certified copy of the Order was received by Disciplinary Counsel for North Dakota on February 17, 2004.

[¶ 3] The Record further reflects that on February 27, 2004, Disciplinary Counsel served Notice pursuant to N.D.R. Lawyer Discipl 4.4(B) on Schaefer by certified mail, return receipt requested, at two separate addresses; two return receipts were signed by Schaefer on March 1, 2004, and March 4, 2004.

[¶ 4] Under N.D.R. Lawyer Discipl. 4.4(B) Schaefer was given notice that a certified copy of the Order of disbarment filed by the Minnesota Supreme Court was received, and he had 30 days to file any claim that the imposition of the identical discipline in North Dakota would be unwarranted and the reasons for the claim. Schaefer did not file a claim and 30 days has passed since he received the Notice.

[¶ 5] Under N.D.R. Lawyer Discipl. 4.4(D), the Disciplinary Board forwarded its recommendation that Schaefer be disbarred from the practice of law and pay the costs of the disciplinary proceedings in the amount of $250. The Court considered the matter, and

[¶ 6] ORDERED, Robert J. Schaefer is disbarred effective immediately.

[IT 7] FURTHER ORDERED, Robert J. Schaefer pay the costs and expenses of the disciplinary proceedings in the amount of $250, payable to the Secretary of the Disciplinary Board.

[¶ 8] FURTHER ORDERED, Robert J. Schaefer comply with N.D.R. Lawyer Discipl. 6.3.

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


author: MAKING, Justice.

text:
    2004 ND 86
    OLIVER-MERCER ELECTRIC COOPERATIVE, INC., Plaintiff and Appellee v. Richard D. DAVIS, III, Michael P. Ossanna, Joseph Hauer and Berkley Strothman, Defendants. Richard D. Davis, III, Joseph Hauer and Berkley Strothman, Defendants and Appellants. Oliver-Mercer Electric Cooperative, Inc., Plaintiff and Appellee, v. AquaConcept Technologies, Inc., Defendant and Appellant.
    Nos. 20030157, 20030158.
    Supreme Court of North Dakota.
    April 19, 2004.

      Michael L. Wagner (argued), Wagner Law Firm, Bismarck, N.D., for defendants and appellants.
    Gregory L. Lange (argued), Richardson, Lange & Donovan, Hazen, N.D., for plaintiff and appellee.
   MAKING, Justice.

[¶ 1] AquaConcept Technologies, Inc. (“AquaConcept”), Richard D. Davis, III, Joseph Hauer, and Berkley Strothman appeal a deficiency judgment granted -to Oliver — Mercer Electric Cooperative (“the Cooperative”) entered on April 4, 2003. Subsequently a final judgment was entered on August 22, 2003. We affirm the trial court’s denial of AquaConcept’s request for a jury trial. We reverse the trial court’s deficiency judgment and remand the case for the trial court to make a finding of the fair market value of the collateral at the time of sale. The trial court must also make a finding of whether the Cooperative’s sale of AquaConcept’s collateral was commercially reasonable, taking into consideration its finding of fair market value. Finally, the trial court must decide if the Cooperative is entitled to a deficiency judgment and, if so, in what amount.

[¶ 2] On remand, the findings must be based on the record before the trial court. If it so desires, the trial court may request additional briefing or argument by the parties on the issue, or both briefing and argument by the parties on the issues.

I

[¶ 3] AquaConcept borrowed 1.8 million dollars from the Cooperative to purchase Fish N’ Dakota, a fish farm. The loan was documented by a promissory note and was secured by a mortgage and security agreement. The loan was also secured by the personal guarantees of each of the four AquaConcept stockholders. AquaConcept became delinquent on the loan, and on January 20, 2000, the Cooperative took possession of the business. The Cooperative ran the business and sold AquaConcept’s assets. After a period of time, it brought a deficiency and foreclosure action against AquaConcept and its personal guarantors for the unpaid portion of the debt.

[¶ 4] AquaConcept, Hauer, Davis, and Strothman requested a jury trial. At a pre-trial conference, the Cooperative moved to set aside their jury request. The trial court concluded that because all of the issues in the case related to security agreements and an action to foreclose a security agreement is an action in equity, AquaConcept was not entitled to a jury trial.

[¶ 5] After a bench trial, the trial court concluded the Cooperative was entitled to a deficiency judgment against AquaCon-cept and its personal guarantors. It granted the Cooperative a final deficiency judgment in the amount of $884,761.16 against AquaConcept. The trial court found the personal guarantors liable as follows: Davis, not to exceed $290,000; Os-sanna, Hauer, and Strothman, not to exceed $386,667.

[¶ 6] AquaConcept, Davis, Hauer, and Strothman (hereinafter collectively referred to as “AquaConcept”) appealed the deficiency judgments.

II

[¶ 7] AquaConcept argues it was entitled to a jury trial because the Cooperative’s complaint did not unambiguously request the equitable relief of foreclosure. Further, it argues there were many fact issues in dispute that were proper for a jury to decide. We disagree.

[¶ 8] Article 1, Section 13, of the North Dakota Constitution guarantees the right to a jury trial. However, this right does not exist in all civil cases. There is no right to a jury trial in a suit in equity absent an express constitutional or statutory provision. Gen. Elec. Credit Corp. v. Richman, 338 N.W.2d 814, 817 (N.D.1983). In an action at law, the parties are entitled to a jury trial. Id. Therefore, the distinction between law and equity remains important to determine a party’s right to a jury trial. Id.

[¶ 9] “The right to a trial by jury is determined by the character of the issues as framed by the complaint or appearing on the face of the pleadings.” Gen. Elec. Credit Corp., 338 N.W.2d at 817 (internal citations omitted). Courts are not bound by the pleadings, “but by the real, meritorious controversy between the parties as shown by all the pleadings in the case.” Id. at 817-18.

[¶ 10] The Cooperative sought, and was granted, permission to amend its complaint to include foreclosure on the remaining collateral, which is an equitable action. AquaConcept argues its counterclaim for legal relief entitled it to a jury trial. However, “[e]ven when the counterclaim seeks monetary damages, there is no entitlement to a jury trial if the damage claim is incidental to and dependent upon a primary claim where a jury trial is not allowed.” Sargent County Bank v. Wentworth, 547 N.W.2d 753, 761 (N.D.1996). We conclude, based on the pleadings and order granting an amendment to the complaint in this case, AquaConcept was not entitled to a jury trial because the character of the issues in this case were essentially equitable.

Ill

[¶ 11] Generally, a deficiency judgment is “[a] judgment against a debtor for the unpaid balance of the debt if a foreclosure sale or a sale of repossessed personal property fails to yield the full amount of the debt due.” Black’s Law Dictionary 846 (7th ed.1999). If the secured creditor disposes of the collateral in a commercially reasonable manner and complies with the provisions of the commercial code, it is entitled to a deficiency judgment of the difference between the debt and the amount received from the sale of the collateral. State Bank of Towner v. Hansen, 302 N.W.2d 760, 768 (N.D.1981). If the secured creditor does not dispose of the collateral in a commercially reasonable manner or fails to give notice of the sale, it is presumed that the fair market value of the collateral is equal to the debt. Id. If the secured creditor meets its burden of proving that the fair market value of the collateral is less than the debt, “the secured creditor is entitled to a deficiency judgment for the lesser of: (a) the difference between the indebtedness and the fair market value of the collateral sold, or (b) the difference between the indebtedness and the amount received upon disposition of the collateral.” Id.; see also N.D.C.C. § 41-09-50(1) (setting forth the expenses the secured party may deduct from the proceeds).

[¶ 12] Section 41-09-50(3), N.D.G.C., states:

Disposition of the collateral may be by public or private proceedings and may be made by the way of one or more contracts. Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms, but every aspect of the disposition, including the method, manner, time, place, and terms must be commercially reasonable .... reasonable notice of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, if he has not signed after default a statement renouncing or modifying his right to notification of sale.

Therefore, under N.D.C.C. § 41-09-50(3), a secured creditor has two obligations in order to recover a deficiency judgment. It must give reasonable notification of the time and place of a sale of collateral, and it must conduct the sale in a commercially reasonable manner. If the secured party complies with these obligations, it may seek a deficiency judgment for the amount of the debt remaining unpaid. N.D.C.C. § 41-09-50(2). The requirements of notice and commercial reasonableness are separate and distinct obligations. American State Bank of Killdeer v. Hewson, 411 N.W.2d 57, 63 (N.D.1987). A secured party who complies with the notice provisions of the code may still be barred from obtaining a deficiency judgment if the sale was commercially unreasonable. Id.

[¶ 13] In this case, AquaConcept argues the Cooperative failed to satisfy both the obligation to give it proper notice of the sale of its collateral and the obligation to dispose of the collateral in a commercially reasonable manner, and it is not entitled to a deficiency judgment.

A

[¶ 14] In State Bank of Burleigh County Trust Co. v. All-American Sub, Inc., our Court held that when a secured creditor, who failed to give proper notice, seeks a deficiency judgment, it will be presumed the fair market value of the collateral is equal to the debt. 289 N.W.2d 772, 779-80 (N.D.1980). Under N.D.R.Ev. 301, a presumption in a civil case:

substitutes for evidence of the existence of the fact presumed until the trier of fact finds credible evidence that the fact presumed does not exist, in which event tine presumption is rebutted and fails to operate. A party against whom a presumption is directed has the burden of proving that the nonexistence of the presumed facts is more probable than its existence.

This rule of evidence “operates to shift the original burden of proof to the opponent of the presumption.” In re Luken, 551 N.W.2d 794, 797 (N.D.1996) (quoting Land Office Co. v. Clapp-Thomssen Co., 442 N.W.2d 401, 406 (N.D.1989)).

[¶ 15] Thus, failure to give notice shifts the burden to the secured creditor to prove by a preponderance of the evidence that the fair market value of the collateral is less than the debt in order to be entitled to a deficiency judgment. Id.; see also N.D.R.Ev. 301; All-American Sub, Inc., 289 N.W.2d at 779-80. Therefore, a finding regarding the fair market value of collateral is essential to determining entitlement to any deficiency.

[¶ 16] All parties agree that the Cooperative failed to properly notify AquaCon-cept of the sale of its collateral; therefore, the presumption that the fair market value is equal to the debt applies. A trial court must determine the fair market value of the collateral from credible evidence other than the foreclosure sale proceeds. Lindberg v. Williston Indus. Supply Corp., 411 N.W.2d 368, 374 (N.D.1987). In this case, the trial court, however, concluded that “the sale of all residual personal property and prior sales of [AquaConcept] assets, appear to have a fair market value less than the debt against it.” AquaConcept argues the trial court erred when it granted the Cooperative a deficiency judgment because the trial court failed to find that the Cooperative overcame the presumption with evidence of the fair market value aside from the amount of the sales. We agree, and we must remand this case for the trial court to determine the fair market value of the collateral.

B

[¶ 17] AquaConcept argues the time to determine the fair market value of collateral is the date of repossession and cites Georgia cases for this proposition. See Enter. Fin. Corp. v. Georgia Nut & Bolt Co., 212 Ga.App. 459, 441 S.E.2d 908 (1994); Granite Equip. Leasing Corp. v. Marine Dev. Corp., 139 Ga.App. 778, 230 S.E.2d 43 (1976); Ace Parts & Distributors, Inc. v. First Nat’l Bank of Atlanta, 146 Ga.App. 4, 245 S.E.2d 314 (1978); Barker v. Horn, 245 Ark. 315, 432 S.W.2d 21 (1968).

[¶ 18] This is an issue of first impression in relation to our pre-2001 Article 9 statutes. The few courts that have directly addressed this issue are split, and many courts have not addressed the issue. Some courts hold that the fair market value must be determined at the time of repossession. See, e.g., First Florida Bank v. Howard, 604 So.2d 1286 (Fla.Dist. Ct.App.1992); Butte County Bank v. Hobley, 109 Idaho 402, 707 P.2d 513 (App.1985); Kobuk Eng’g & Contracting Servs., Inc. v. Superior Tank & Constr. Co-Alaska, Inc., 568 P.2d 1007 (Alaska 1977); A.A. Store Fixture Co. v. Kouzoukas, 87 Ill.App.3d 631, 43 Ill.Dec. 131, 410 N.E.2d 131 (1980). Other courts hold that the fair market value must be determined at the time of the sale. See, e.g., FDIC v. Tempest Fugat, H.L.I., Inc., 75 Or.App. 536, 707 P.2d 81 (1985); Life Investors Ins. Co. of America v. Horizon Res. Bethany, Ltd., 182 Ariz. 529, 898 P.2d 478 (App.1995).

[¶ 19] We conclude our case law favors the second line of cases holding that the fair market value must be determined at the time of the sale. In All-American Sub, Inc., 289 N.W.2d at 779-80, we adopted the presumption that when a creditor fails to properly notify the debtor of a sale of collateral, the fair market value is equal to the debt. Id. We adopted this presumption citing Levers v. Rio King Land & Inv. Co., 93 Nev. 95, 560 P.2d 917 (1977); United States v. Whitehouse Plastics, 501 F.2d 692 (5th Cir.1974); Conti Causeway Ford v. Jarossy, 114 N.J.Super. 382, 276 A.2d 402 (Ocean County Ct.1971); Universal C.I.T. Credit Co. v. Rone, 248 Ark. 665, 453 S.W.2d 37 (1970).

[¶ 20] The cases we cited in All-American Sub, Inc. indicate the time to determine the fair market value is the date of sale. See Levers, 560 P.2d at 920 (stating that “when a creditor is derelict in complying with the code’s provisions, it will be presumed the collateral had a fair market value equal to the amount of the debt, and no deficiency will be permitted unless the creditor produces evidence to establish the reasonable amount that the collateral would have sold for at a proper sale ”) (emphasis added); Whitehouse Plastics, 501 F.2d at 697 (stating that the “jury was entitled to reject Baker’s assessment as not probative of the fair value of the property at the time and place of sale .... And having so found, the jury was entitled to infer that the total amount received at the sale was evidentiary of the fair value of the goods.”) (emphasis added); Universal C.I.T. Credit Co., 453 S.W.2d at 39 (stating that “in determining entitlement to deficiency judgment under such circumstances, the debt is to be credited with the amount that reasonably should have been obtained through a sale conducted according to law, rather than the actual sale price”) (emphasis added).

[¶ 21] We find further support in Lindberg, 411 N.W.2d 368 and Hansen, 302 N.W.2d 760. Although in Lindberg and Hansen the proper time to determine the fair market value of collateral was not at issue, we stated in each that “when a secured creditor disposes of collateral without proper notice ..., he must then prove, in his action for a deficiency judgment, that the reasonable value of the collateral at the time of the sale was less than the amount of the debt.” Lindberg, 411 N.W.2d at 374 (quoting Hall v. Owen County State Bank, 175 Ind.App. 150, 370 N.E.2d 918, 928 (1977)) (emphasis added); Hansen, 302 N.W.2d at 767 (same).

[¶ 22] Therefore, we conclude the proper time to determine the fair market value for purposes of entitlement to a deficiency judgment is the time of sale.

C

[¶ 23] When a sale is conducted according to the requirements of Article 9, the amount received at a sale of collateral is evidence of the fair market value. Lindberg, 411 N.W.2d at 374 (quoting Hall, 370 N.E.2d at 928). However, when a sale is not conducted according to the requirements of Article 9, a secured creditor may not rely on the value which he received from the sale of collateral. Id. Additionally, the secured creditor may not rely on the testimony of his credit manager or other employees as to their opinions of the fair market value. Id. In this case, the Cooperative failed to notify AquaCon-cept of the sale of its collateral. Therefore, the amount received at the sales of AquaConcept’s collateral is not evidence of the fair market value.

[¶ 24] We have not previously discussed what kind of evidence is “credible evidence” under N.D.R.Ev. 301 to rebut the presumption that the fair market value of the collateral is equal to the debt. A secured creditor may prove the fair market value of collateral in a number of ways. For example, appraisals, stipulations, market conditions, subsequent sales, and testimony of the purchaser are all proper evidence from which" a trial court can determine the fair market value of collateral. Kathryn Page Seebart, A Secured Party’s Right to a Deficiency Judgment After Noncompliance with the Resale Provisions of Article 9, 60 N.D. L.Rev. 531 (1984).

[¶ 25] On remand, the trial court must determine whether the Cooperative overcame the presumption with credible evidence in the record from which it can determine the fair market value of the collateral at the time of sale. If the record does not contain credible evidence allowing the trial court to make a finding as to, the fair market value at the time of the sale, the Cooperative is not entitled to a deficiency judgment. All-American Sub, Inc., 289 N.W.2d at 779-80. Without proof of the fair market value at the time of the sale, the Cooperative will not have satisfied its burden to rebut the presumption that the fair market value of AquaCon-cept’s collateral is less than the debt.

D

■ [¶ 26] In addition, AquaConcept - challenges the commercial reasonableness of the sale of its collateral. However, if the trial court finds the Cooperative failed to prove that the fair market value of the collateral is less than the debt and, therefore, fails to rebut the presumption, the trial court, need not reach the issue of commercial reasonableness of the sales because the Cooperative is not entitled to a deficiency.

[¶ 27] Under the second obligation of N.D.C.C. § 41-09-50(3), the secured party has the burden to prove every aspect,of the sale was'commercially reasonable, including the method, manner, time,- place, and terms. N.D.C.C. § 41-09-50(3); In re Estate of Sagmiller, 2000 ND 151, ¶ 5, 615 N.W.2d 567. Any secured -creditor, whether one who gave proper. notice or -one who did not give proper- notice, may be barred from obtaining a deficiency judgment if the sale of the collateral was commercially unreasonable. Hewson, 411 N.W.2d at 65 (VandeWalle, J., concurring in'result). “Once the secured party makes a prima'facie case indicating the collateral was sold in a commercially reasonable manner, the burden of persuasion, not the burden of proof, shifts to the debtor to elicit specific evidence of commercial unreasonableness.” Sagmiller, 2000 ND 151, ¶ 5, 615 N.W.2d 567. Commercial reasonableness is a question of fact that'we review under the clearly erroneous standard. Advanced, Irrigation, Inc. v. First Nat’l Bank of Fargo, 366 N.W.2d 783, 786 (N.D.1985).

[¶28] The fair market value as compared to the price obtained, although not the sole determinative factor, is one of the relevant factors to determine if a sale of collateral was commercially reasonable. See Levers, 560 P.2d at 920; Sagmiller, 2000 ND 151, ¶ 8, 615 N.W.2d 567. In the event the trial court finds on remand the Cooperative rebutted the presumption and proved the fair market value of the collateral at the time of the sale was less than the debt, the issue of whether the Cooperative disposed of AquaConcept’s collateral in a commercially reasonable manner must also be addressed on remand because the fair market value finding may impact the commercial reasonableness of the sale.

IV

[¶ 29] We affirm the trial court’s denial of AquaConeept’s request for a jury trial. However, we reverse the trial court’s deficiency judgment and remand the case for the trial court to make a finding whether the Cooperative rebutted the presumption and met its burden to prove by a preponderance of the evidence that the fair market value of AquaConeept’s collateral was less than the debt on the date of the sale and for further proceedings consistent with this opinion.

[¶ 30] GERALD W. VANDE WALLE, C.J., WILLIAM F. HODNY, S.J., EVERETT NELS OLSON, S.J., and WILLIAM A. NEUMANN, JJ., concur.

[¶ 31] The Honorable WILLIAM F. HODNY, S.J., and the Honorable EVERETT NELS OLSON, S.J., sitting in place of KAPSNER, J., and SANDSTROM, J., disqualified.

      . In 2001, the legislature repealed N.D.C.C. ch. 41-09 and created and enacted N.D.C.C. ch. 41-09/ with an effective date of July 1, 2001. Under N.D.C.C. § 41-09-124(3), the revisions do not affect any "action, case, or proceeding commenced before July 1, 2001.” The complaint in this case was filed before July 1, 2001, and therefore, pre-2001 Article 9 provisions govern. The substance of N.D.C.C. § 41-09-50(3) was created and enacted at N.D.C.C. §§ 41-09-107 through 110.

      . In Conti Causeway Ford, 276 A.2d at 403, the parties agreed to the fair market value of the collateral, they disagreed as to the result of failing to follow the requirements of Article 9.


author: KAPSNER, Justice.

text:
    2004 ND 85
    STATE of North Dakota, Plaintiff and Appellee v. Larry CLARK, Defendant and Appellant.
    No. 20030238.
    Supreme Court of North Dakota.
    April 19, 2004.

      Ladd Ronald Erickson, State’s Attorney, Washburn, ND, for plaintiff and appellee.
    Chad R. McCabe, Vinje Law Firm, Bismarck, ND, for defendant and appellant.
   KAPSNER, Justice.

[¶ 1] Larry Clark appealed from a criminal conviction entered upon a jury verdict finding him guilty of aggravated assault and reckless endangerment. We conclude the State’s closing argument was not obvious error, and we affirm.

I

[¶ 2] Clark was charged with reckless endangerment under N.D.C.C. § 12.1-17-03 for willfully creating a substantial risk of serious bodily injury or death to his daughter by stopping a motorcycle on which she was a passenger in front of a moving semi-truck driven by Jeff Gerou and with aggravated assault under N.D.C.C. § 12.1-17-02(1) for willfully causing serious bodily injury to Gerou.

[¶ 3] According to Clark, he was driving his motorcycle about 50-55 mph with his ten-year-old daughter as a passenger on a county road in McLean County and Gerou was hauling gravel in his semi-truck from a gravel pit near Riverdale, when Gerou turned onto the county road right in front of Clark. According to Clark, he took evasive action through a ditch, pulled up past Gerou’s truck, parked his motorcycle on the side of the road, and walked to the middle of the road to stop Gerou. According to Clark, he

started running back to [Gerou’s truck] and I was screaming some profanity, that he damn near killed us and run us off the road. And he was sitting up in his truck, had his window down and, you know, I said, “You damn near killed us,” I said, “you run us off the road.” [He said,] “I didn’t see you.” I said, “That’s the problem, you guys aren’t looking, you’re not even looking and,” I said, “this is the third time in less than two weeks I’ve been chased in the ditch here and,” I says, “the only difference is this time I’ve got my daughter with me.” And he looked out the window and he had this spacey, big dilated eyes and he went, “So what,” he went. I said, “Get out of the truck, let’s talk about this.” And he said, “No, I’m not getting out.” So I said, “I’m coming up there,” and I grabbed the handrail and I started up; and he swung the door at me and I swung around and I just about got my arms on the stacks, got my balance and I got back. I was going to pull myself up and he kept slamming the door trying to knock me off.... He kept trying to knock me off with the door and I was hanging on here (indicating) and finally I got my hand on the door and held it open like this (indicating) and I started to pull myself up, you know, up closer to his height.... As I was coming up, he had his seat belt on, he turned, he went to throw a punch at me, kind of down; and I just held on with this here one so I threw a left as he was coming around and kind of had my head down a little bit ‘cause like I said I was a little bit below him and I seen his arm starting to come and I hit him; and his head snapped around and he looked back and he goes, “You crazy bastard.” And I told him, I said, “No, you’re the crazy bastard.” ... I pulled myself up even with him, I grabbed on to the A post and he looked at me and he went — he just hyperventilated and he started to throw a punch again and I was standing there, I was hanging on with my left hand then I just hit him in the jaw. He just kept shaking his head and hyperventilating and he tried it probably three times. The last time I seen blood coming out of his nose and down his mustache and he tried one more hit and I hit him and then he turned around and he goes, “Okay, okay, I’m sorry,” he said, “I’m sorry.” I said, “It’s kind of late for that now.” ... I got down off the truck. You know, I got down, I turned around, looked back at him and he picked his cell phone up off his console kind of over here (indicating) and he was dialing on it and I just walked away and got on the motorcycle and left.

[¶ 4] According to Gerou, he saw a motorcycle about one-half or one-quarter mile down the road when he turned onto the county road, and he

rounded the corner, started shifting gears and watched the motorcycle in my mirror as I rounded the corner and once I got going above 20, 25 miles an hour, I couldn’t see behind me because of the dust.... I no more than drove a couple of minutes and a motorcycle came out of the dust beside me waving his arms and pointing for me to pull over so I start to stop. The motorcycle pulled in front of me, ... I couldn’t see his motorcycle in front of my truck. I couldn’t see him over the hood of my truck.... Oh, I locked up the tires, I had to or I would have run him over. I mean, he cut in front of me, was waving his arms and turned in front of me and was pointing to pull over and I had no choice.... I was reaching to set brakes and I saw his helmet round the corner of my truck and I went to open my door to him figuring he was going to tell me my gates were open or I had a flat tire, something of that nature, so I opened my door to him. I turned my head to set my brakes and the next thing I knew I got hit in the head. I turned to look at him and met his hand hitting my face, after that [the njext thing I remember is another driver at my door wiping my face with a wet rag.

A jury found Clark guilty of aggravated assault and reckless endangerment.

II

[¶ 5] Clark argues obvious error occurred during the State’s closing argument. He argues the prosecutor incorporated his personal beliefs into his closing argument, vouched for the credibility of the complaining witness, commented on facts not in evidence, improperly asked jurors to place themselves in the shoes of Gerou, and suggested Clark had the burden of proof for the defense of excuse. Clark concedes he did not object to the prosecutor’s closing argument and review of these issues is for obvious error.

[¶ 6] This Court exercises its authority to notice obvious error cautiously and only in exceptional circumstances in which the defendant has suffered a serious injustice. State v. Anderson, 2003 ND 30, ¶ 8, 657 N.W.2d 245; State v. Evans, 1999 ND 70, ¶ 9, 593 N.W.2d 336. In State v. Olander, 1998 ND 50, ¶ 13, 575 N.W.2d 658, we applied the plain error framework from federal law for analyzing claims of obvious error under North Dakota law. We said an appellate court may notice a claimed error that was not brought to the attention of a trial court if there was (1) error, (2) that is plain, and (3) affects substantial rights. Id. at ¶ 14. Under that framework, we said that once an accused establishes a forfeited plain error affects substantial rights, we have discretion to correct the error and should correct it if it “seriously affeetfs] the fairness, integrity or public reputation of judicial proceedings.” Id. at ¶ 16 (quoting United States v. Olano, 507 U.S. 725, 736, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993)).

[¶ 7] A trial court is vested with discretion to control the scope of closing argument, and we will not reverse on the ground the prosecutor exceeded the scope of permissible closing argument unless a clear abuse of discretion is shown. State v. Skorick, 2002 ND 190, ¶ 11, 653 N.W.2d 698; Evans, 1999 ND 70, ¶ 11, 593 N.W.2d 336; City of Williston v. Hegstad, 1997 ND 56, ¶8, 562 N.W.2d 91. Unless an error is fundamental, a defendant must demonstrate a prosecutor’s comments during closing argument were improper and prejudicial. Skorick, at ¶ 11; Evans, at ¶ 11. To be prejudicial, improper closing argument must have stepped beyond the bounds of any fair and reasonable criticism of the evidence, or any fair and reasonable argument based upon any theory of the ease that has support in the evidence. Evans, at ¶ 11.

A

[¶ 8] Clark argues the prosecutor incorporated his personal beliefs into his closing argument and vouched for the credibility of the complaining witness. During closing argument, the prosecutor said:

Okay. There are some things in this case that don’t make any sense. I don’t know how to try to justify them, I don’t know if I can, there’s a term that was coined about — probably over ten years now out on the West Coast called “road rage” and it didn’t make any sense where you heard about those cases where people stuck in traffic would get into confrontations because somebody cut them off or whatever and they would just lose control and there was a big battle. That doesn’t make sense.
Another thing that doesn’t make a lot of sense to me, Mr. Clark reports this to the police in a couple different ways.... And in his statement — and I was not out there, I’m not submitting that I was — he makes a lot of dramatic claims. This is the third time in a couple weeks he almost got run off that road, that his head was almost right by the tire, that this driver was speeding through this intersection when they turned and cut him off. Okay. That the driver, when he walked up to him to just talk to him, said when he said you almost killed us and he said, so what, he was empathetic, he was cocky or whatever, he made all these claims.
Well, what doesn’t make sense to me if any of that or part of that is true is why, when you live out there and you know that there’s an intersection that supposedly in the last — let’s see, I’m going to move these corners — right here is the gravel pit, here’s where Mr. Clark comes from his house (indicating). It’s just a questionable spot: This is supposedly this dangerous spot, that this is the third time now he was run off the road, okay. Okay. If that was true, it doesn’t make sense to me if you’re an experienced motorcycle driver that you would go 50 miles an hour or 55r whatever he said he was going, down this road with your daughter on the back approaching this intersection knowing a truck’s coming, already claiming that these guys don’t watch, that they just pull out, into his way, that they speed. Why would you ever put yourself in a position that that could happen if that was true. In other words, you have an experience you’re not — this isn’t an area you’re not familiar with. That doesn’t make any sense to me when you’re on a motorcycle especially with your child, you have to drive on the defense and you certainly, if you know that there’s a problem intersection, if it was true he knew there was a problem intersection, doesn’t make any sense, he wouldn’t drive on the defense there. Trying to stop a truck with a motorcycle with your child, that makes absolutely, absolutely no sense, no rational person can do that. I don’t know how that can be justified.

The prosecutor also argued, “I think [Ger-ou] was unconscious and I think he had a lot of pain,” and “I’ve heard no evidence and I submit to you there was no evidence in this case that there was an excuse.”

[¶ 9] A prosecutor’s closing argument may properly draw reasonable conclusions and argue permissible inferences from the evidence, but a prosecutor may not create evidence by argument or by incorporating personal beliefs. Evans, 1999 ND 70, ¶ 8, 593 N.W.2d 336; State v. Schimmel, 409 N.W.2d 335, 342-43 (N.D.1987). In Schimmel, at 343 (citations omitted), this Court discussed issues about a prosecutor incorporating personal beliefs into an argument:

When the state’s attorney comments personally on the evidence, he is acting as an unsworn witness for the prosecution who is not subject to cross-examination and who may be perceived as an expert witness testifying about scientific evidence. Additionally, we are concerned that personal comments made by the state’s attorney may convey the impression that evidence not presented to the jury, but known to the prosecutor, supports the charges against the defendant. Our final concern is that the prosecutor’s opinion carries with it the “imprimatur of the Government.” Improper argument by the state’s attorney may induce the jury to trust the government’s view rather than its own judgment of the evidence when deliberating. Correspondingly, the prosecution’s improper suggestions, insinuations and assertions of personal knowledge distort the fundamental guarantee of a fair trial by placing the great weight and presence of the government on the side of the prosecutor, who is not the representative of an ordinary party but of the sovereignty, whose obligation is not only to govern but to govern impartially. The sovereign’s interest in a criminal prosecution is not to win at all costs but to see that justice is done.

[¶ 10] In Schimmel, 409 N.W.2d at 341, the prosecutor in a DUI case commented that the defendant’s blood-alcohol concentration was over the legal limit and argued, “I don’t think there’s much doubt about that at all.” We concluded the prosecutor’s argument did not impermissibly express his personal beliefs and conclusions about evidence regarding the results of a blood-alcohol test. Id. at 343. We said the prosecutor did not invoke the imprimatur of the government on his behalf; rather, he merely offered his opinion that the evidence revealed the defendant was guilty of driving with a blood-alcohol concentration greater than the legal limit. Id. We concluded the prosecutor’s comments were not an improper assertion of personal belief in the truth or falsity of the evidence of the guilt of the defendant. Id. In reaching that conclusion, we recognized the trial court had instructed the jury that counsel’s argument was not to be considered as evidence in the jury’s deliberation, and we concluded the prejudice, if any, that resulted from the prosecutor’s closing argument was minimized by the court’s cautionary instruction. Id.

[¶ 11] Although prosecutors should be vigilant not to inject their personal beliefs into closing argument, we conclude the prosecutor’s statements in this case were permissible comments about the nature of the evidence and his opinion that Clark’s version did not make sense. There were conflicting versions about the events leading up to the incident between Clark and Gerou. In our view, the prosecutor’s statements about Clark’s version not making sense and there being no evidence of excuse, taken in the context of the entire argument, reflect permissible inferences about Clark’s version of the incident and were not statements of an unsworn witness for the prosecution. There also was evidence that Gerou underwent surgery as a result of the incident and he may have been unconscious when Clark left the scene, which supports a permissible inference that Gerou was in pain. The prosecutor’s comments were not beyond the bounds of any fair and reasonable criticism of the evidence. Moreover, the trial court instructed the jury that “arguments of counsel are not evidence,” and “[i]f counsel have made statements or expressed opinions to you not supported by the evidence, you should disregard those statements and opinions and be guided by the evidence in this case.” Under the circumstances of this case, we conclude any possible prejudice was minimized by the court’s cautionary instruction and we conclude any isolated statements that may suggest the prosecutor incorporated his personal beliefs into closing argument or vouched for the credibility of witnesses are not obvious error.

B

[¶ 12] Clark argues the prosecutor’s statements about “no evidence” of excuse could have been interpreted by the jury to suggest the burden of proof on excuse had shifted to him. During closing argument, the prosecutor said:

The other thing that you’ll consider in the jury instructions is whether the defendant’s conduct should be excused. In other words, he was mistaken, he thought he could use self-defense and that really isn’t true. And the legal definition of an excuse is the defendant’s conduct is excused if he believes the facts are such that his conduct was necessary and appropriate for any purposes that would establish self-defense. Let me give you an example to highlight how this makes sense ‘cause it sounds a little legalistic. If a person is walking and another person comes up and pulls out a gun, that person points it at this person, the gun. Okay. The person that’s having the gun pointed at him reacts, pulls out their gun and shoots the person. Okay. And it’s later found out that the gun that was pulled was actually a plastic gun but it looked real. Okay. You still have a defense even though that person really couldn’t have shot you. That’s the example I would use on excuse, you’re excused because of the circumstances, it still was appropriate. There’s nothing like that in this case. These are legal things that come up on all the assaults but that doesn’t mean they apply to this case. There’s nothing that would excuse that the driver could have done that, would have misconstrued that he was going to come out and try to assault the Clarks. I’ve heard no evidence and I submit to you there was no evidence in this case that there was an excuse, that something could have given him a mind that I’ve got to use self-defense here, my daughter is going to get beat up or something like that.

[¶ 13] In Skorick, 2002 ND 190, ¶¶ 14-17, 653 N.W.2d 698, we considered a defendant’s claim the prosecutor had attempted to shift the burden of proof during closing argument when the prosecutor mentioned the lack of physical evidence. We recognized some courts have concluded a defendant is not denied a fair trial when the prosecutor makes statements concerning the lack of physical evidence during closing argument. Id. at ¶ 16. Although we expressed concern with the prosecutor’s comment, we concluded, when viewed in the context of the entire proceeding, the prosecutor’s argument regarding the lack of physical evidence did not affect the jury’s ability to judge the evidence fairly. Id. at ¶ 17. We also said the prejudice, if any, that resulted from the prosecutor’s argument was minimized by jury instructions, and we concluded the State’s closing argument did not deny the defendant a fair trial. Id. at ¶ 17.

[¶ 14] In State v. Marks, 452 N.W.2d 298, 299 (N.D.1990), a prosecutor argued that if the defendant thought there was something wrong with the toxicologist’s methodology for a blood test, the defendant could have obtained the remainder of the blood sample for her own test. On appeal, the defendant argued the prosecutor’s comments suggested the burden of proof had shifted to the defendant. Id. at 299-303. We concluded the trial court did not abuse its discretion in denying the defendant a new trial, because the jury was instructed that counsel’s arguments were not evidence and the State had the burden to prove the essential elements of the offense beyond a reasonable doubt, and the alleged improper statement received brief attention in the context of the entire closing argument. Id. at 303.

[¶ 15] Here, the trial court instructed the jury the “State must prove, beyond a reasonable doubt, that the defendant was not acting in self-defense and that his conduct was not excused.” In defining the offenses of aggravated assault, assault, and simple assault, the court instructed the jury, in part, that the prosecution satisfied its burden as to each of those offenses only if the evidence showed beyond a reasonable doubt that Clark was not acting in self defense and did not have a defense of excuse. The court also instructed the jury that Clark’s conduct was excused if he believed the facts were such that his conduct was necessary and appropriate for any of the purposes which establish self-defense, even though his belief was mistaken, and if Clark’s belief was recklessly held, his conduct was not excused.

[¶ 16] On this record and in view of the court’s instructions about counsel’s arguments and the burden of proof, we conclude Clark’s claims about shifting the burden of proof do not rise to the level of obvious error.

C

[¶ 17] Clark argues obvious error was committed when the prosecutor argued that “Sheriff Charging testified that basically he has to take the word of Larry Clark with a grain of salt based on his background when he called him and said he assaulted somebody, he didn’t know if it was true because he knows Larry.” Clark argues the prosecutor’s argument was an improper comment on facts not in evidence, and it was improper to assert that Sheriff Charging knew Clark and did not believe him. Clark argues Sheriff Charging never testified that Clark used the word “assault.” Rather, Clark argues Sheriff Charging testified Clark had called him in reference to an individual Clark had hit and wanted to know if there was a report about it. Clark argues it was improper to characterize Sheriff Charging’s testimony that Clark “hit an individual” as testimony of an “assault.”

[¶ 18] There was evidence Clark called Sheriff Charging shortly after the incident, and Sheriff Charging testified Clark said he “hit” someone. Sheriff Charging testified Gerou later reported an assault. Sheriff Charging also testified he was “skeptical” about what Clark said during the telephone call. We conclude the prosecutor’s argument was not beyond the bounds of any fair and reasonable comment about the evidence, and we reject Clark’s claims the prosecutor’s arguments about Sheriff Charging’s testimony constitute obvious error.

D

[¶ 19] Clark also argues the prosecutor’s argument violated the “golden rule” because the prosecutor asked the jurors to place themselves in the shoes of the complaining witness. The State argues it was fairly responding to Clark’s counsel’s “golden rule” argument.

[¶ 20] During closing argument, Clark’s counsel asked the jury to put themselves in Clark’s shoes on the day of the incident. During rebuttal argument, the prosecutor responded “if you put yourself in Mr. Clark’s shoes for the defense, I’m going to ask you now to put yourself in Mr. Gerou’s shoes as you sit there strapped in that seat and this guy comes up here and starts hitting you with that motorcycle helmet on.”

[¶ 21] A “golden rule” argument asks jurors to place themselves in the shoes of a party, and is improper and should be avoided in both civil and criminal actions. State v. Carlson, 1997 ND 7, ¶ 46, 559 N.W.2d 802. However, a defendant may not claim error for arguments that are invited. Evans, 1999 ND 70, ¶ 14, 593 N.W.2d 336; Marks, 452 N.W.2d at 300-01; Schimmel, 409 N.W.2d at 342-43. In Evans, at ¶ 14, we said courts often decline to reverse convictions challenging a prosecutor’s improper remarks if those remarks were invited in response to improper remarks by defense counsel. In determining if a prosecutor’s invited response unfairly prejudiced the defendant, courts weigh the impact of the prosecutor’s remarks and take into account defense counsel’s opening salvo. Id. If a prosecutor’s remarks were invited and did no more than respond substantially in order to right the scale, those comments do not warrant reversal of a conviction. Id.

[¶ 22] In this case, the State should have objected to Clark’s counsel’s improper argument. We conclude, however, the prosecutor’s argument was an invited response to Clark’s counsel’s improper argument and did no more than to respond substantially in order to right the scale. Although two wrongs do not make a right, see Evans, 1999 NÍ) 70, ¶ 14, 593 N.W.2d 336, under these circumstances we conclude the prosecutor’s argument was not obvious error.

Ill

[¶ 23] We affirm Clark’s conviction.

[¶ 24] GERALD W. YANDE WALLE, C.J., MARY MUEHLEN MARING, and WILLIAM A. NEUMANN, JJ., and KIRK SMITH, Surrogate Judge, concur.

[¶ 25] The Honorable KIRK SMITH, Surrogate Judge, sitting in place of SANDSTROM, J., disqualified! .


author: KONENKAMP, Justice.

text:
    2004 SD 42
    CONVENIENCE CENTER, INC., Plaintiff and Appellee, v. David COLE d/b/a Cole Petroleum Co. and Cole’s Petroleum Products, Inc., a South Dakota corporation, Defendants and Appellants.
    Nos. 22861, 22875.
    Supreme Court of South Dakota.
    Considered on Briefs Feb. 17, 2004.
    Decided March 31, 2004.
    Thomas K. Wilka of Hagen, Wilka & Archer, Rapid City, South Dakota, Attorneys for plaintiff and appellee.

      James C. Roby of Green, Schulz, Roby, Oviatt, Cummings & Linngren, Water-town, South Dakota, Attorneys, for defendants and appellants.
   KONENKAMP, Justice.

[¶ 1.] Convenience Center, Inc. (CCI) brought a declaratory action requesting the circuit court to rule that Cole’s Petroleum Co. had breached a petroleum product delivery agreement between the parties when it charged CCI an unreasonable and unfair price for the products. After discovery, CCI amended its complaint to allege that Charlotte Cole had held all rights under the delivery agreement and that she had effectively released CCI from any obligations under the agreement. The circuit court ruled that (1) the prices charged were fair and reasonable, (2) Charlotte, not Cole’s Petroleum, was the assignee of the rights under the agreement, and (3) Charlotte had released CCI from the agreement. Because we find no error in the court’s interpretation of the agreement and because the court was not clearly erroneous in its factual determinations, we affirm.

Background

[¶ 2.] Thomas Cole and Charlotte Cole, husband and wife, entered into an “Option to Purchase Real Estate” with Venerts Investments, Inc. The option gave Venerts the right to purchase real estate in Cod-ington County, South Dakota. It provided:

The conveyance to be made will be subject to the provisions that Thomas E. Cole or his heirs and assigns shall have the exclusive right to sell the petroleum products for twenty (20) years to any retail outlot [sic] that sells petroleum products that maybe [sic] located on said property. The cost of said products sold to said retail outlot [sic] shall be at a fair and reasonable cost, and not to exceed the cost that the supplier sells similar products to any other outlot [sic] in Wa-tertown.

Venerts exercised the purchase option and the deal was closed on July 1,1992. Eventually, title to the property passed to CCI. Owing to an error, the deed conveying the property from Thomas and Charlotte to Venerts did not contain a reference to the twenty-year petroleum sale agreement mentioned in the option. Consequently, CCI’s title also failed to set forth the option language.

[¶ 3.] William Folkerts and James B erven, principals in Venerts, were the promoters and developers of several corporations including CCI. CCI planned to develop a Pump ‘N Pak convenience center on a portion of the conveyed property. Among the investors in CCI were Thomas and Charlotte Cole, and Joan and Judd Cole. Many of the CCI investors, including Thomas, Charlotte, Joan, and Judd, also invested in the other corporations developed by Folkerts and Berven.

[¶ 4.] To correct the earlier omission of the petroleum delivery agreement, Thomas and Charlotte asked CCI to execute an agreement identical to the one in the original option. On January 29, 1993, CCI executed an identical agreement, except that it was limited to the parcel of land owned by CCI. That agreement gave Thomas, his heirs, and assigns

the exclusive right to sell petroleum products for twenty years to any retail outlet that sells petroleum products that maybe [sic] located on said property. The cost of said products sold to said retail outlot [sic] shall be at a fair and reasonable cost, and not to exceed the cost that the supplier sells similar products to any other outlot [sic] in Water-town.

The agreement referred to Thomas as the licensee. It was then properly recorded.

[¶ 5.] From 1992 until his death in 1997, Judd ran Cole’s Petroleum Products, Inc. Thomas, Judd’s brother, worked for the company until his death in 1994. On Thomas’s death, Charlotte, his widow, became heir to the delivery agreement. When Judd died, David Cole, Judd’s son, and Joan, Judd’s widow, became the sole shareholders in Cole’s Petroleum. Charlotte held no interest in the company.

[¶ 6.] Beginning with the opening of CCI in 1992, Cole’s Petroleum supplied all CCI’s petroleum requirements. Cole’s Petroleum generally charged CCI $0,025 over the “rack” price for the fuel it delivered. This markup did not exceed the cost of petroleum sold by Cole’s Petroleum to other Watertown outlets. Through the years 1999 to 2002, accounting errors resulted in a net overcharge by Cole’s Petroleum to CCI of $5,062.55.

[¶ 7.] Eventually, the Venert business ventures began to experience financial difficulty, resulting in cash calls. Some of the investors became dissatisfied with the management. By December 6, 1997, at a Board of Directors meeting of CCI, a workout plan was discussed that would ultimately result in some of the shareholders redeeming their stock in exchange for certain accommodations made by the corporation. As part of Charlotte’s buyback agreement, she was to “release [CCI] of the Cole covenant ... to remove cloud on title[.]” On December 3, 1998, Charlotte released “any and all claim of whatever nature” against CCI, Venerts, and others. On February 7, 2000, Charlotte surrendered to the corporation her stock and signed a “Mutual Release of All Claims.”

[¶ 8.] Despite the releases, Cole’s Petroleum continued to exclusively supply CCI with petroleum products. Concerned that they were not being charged a fair and reasonable mark-up, however, Berven and Folkerts scheduled a meeting with David. They were unable to resolve the dispute.

[¶ 9.] Believing that David had succeeded to the agreement between Thomas and CCI, CCI brought an action against Cole’s Petroleum praying for a declaratory judgment canceling the agreement between the parties and for damages for the unfair and unreasonable charges billed by Cole’s Petroleum. Later, CCI amended its complaint alleging that Cole’s Petroleum was not an assignee of the delivery agreement, that the agreement was not a covenant running with the land, and that Charlotte, the true party succeeding to the agreement, had earlier released CCI.

[¶ 10.] After a trial, the circuit court concluded that (1) the delivery agreement between Thomas and CCI was not a covenant running with the land, (2) the agreement was not a license, (3) Charlotte, not Cole’s Petroleum, was the successor in interest to the rights of Thomas, (4) the price charged by Cole’s Petroleum to CCI was fair and reasonable, and (5) Charlotte had effectively terminated the agreement when she signed the mutual release. On appeal, Cole’s Petroleum questions “Whether the January 29, 1993 Agreement between [CCI], as licensor, and Thomas E. Cole, his heirs and assigns, as licensee, is a contractual obligation binding [CCI], and its successors-in-interest to purchase petroleum products from Cole’s Petroleum for a 20-year term?” For its part, CCI requests that this Court overturn the trial court’s conclusion that the prices charged by Cole’s Petroleum were fair and reasonable and requests that damages be recalculated.

Analysis and Decision

[¶ 11.] Our standard of review is guided by SDCL 15-6-52(a). Under that statute, we reverse a trial court’s findings of fact only when we find clear error. Id. This remains true whether the finding was based on oral or documentary evidence. Id. A trial court’s findings of fact are clearly erroneous only if, after review, we are left with a firm and definite conviction that a mistake was made. Wiedmann v. Merillat Indus., 2001 SD 23, ¶ 10, 623 N.W.2d 43, 47. However, when an issue presents a question of law, such as contract interpretation, our standard of review is de novo. Roden v. Gen. Cas. Co. of Wisconsin, 2003 SD 130, ¶ 6, 671 N.W.2d 622, 625 (citations omitted).

[¶ 12.] Although Cole’s Petroleum frames its issue as hinging on whether the delivery agreement was a license or some other conveyance, we need not address that question unless we conclude that the trial court was clearly erroneous in ruling that (1) Charlotte, not Cole’s Petroleum, was the successor-in-interest to Thomas’s rights and (2) Charlotte released her right to enforce the CCI agreement when she signed the mutual release. If those rulings were correct, it is irrelevant what type of conveyance CCI and Thomas intended.

[¶ 13.] We begin by addressing the argument that Cole’s Petroleum, not Charlotte, held the rights to the delivery agreement with CCI. In support of this contention, Cole’s Petroleum argues that “[u]p until nine days before the trial of this dispute, it had not dawned on CCI to claim that Cole’s Petroleum was not the sucees-sor-in-interest to Thomas E. Cole.” Cole’s Petroleum also notes that “[a]ll petroleum sales during the history of the relationship with CCI, were made by [Cole’s Petroleum].”

[¶ 14.] CCI’s mistaken belief that Cole’s Petroleum, not Charlotte, was the successor-in-interest to Thomas Cole’s Petroleum rights is not dispositive. Under the agreement, Thomas had the right to exclusively supply any petroleum retail outlet on the property with petroleum products. It was his prerogative to choose to supply petroleum products to CCI through Cole’s Petroleum. Per the agreement, CCI was bound to accept the chosen supplier. However, had Thomas chosen some other supplier, the plain language of the agreement allowed him to do so. While Thomas may have had in mind at the time of the agreement that Cole’s Petroleum would be the only supplier of petroleum products, that is not what he negotiated for and received. He negotiated for and received a right for himself, not Cole’s Petroleum. On Thomas’s death, he passed his rights to Charlotte. Charlotte continued to supply CCI through Cole’s Petroleum. However, she too could have chosen a different supplier. While CCI may have mistakenly believed it was contractually bound through an agreement with Cole’s Petroleum, it was not. Instead, CCI was obligated to purchase petroleum products from any supplier designated by Thomas and later Charlotte.

[¶ 15.] Cole’s Petroleum also argues that “CCI’s dealings and course of conduct and performance confirmed that Cole’s Petroleum held the supply rights.” It points to the fact that it has been the sole supplier for CCI and that CCI attempted to renegotiate the agreement directly with Cole’s Petroleum, not Charlotte. Although under these arrangements Charlotte’s acquiescence to Cole’s Petroleum representation might be classified as an implied agency, alone, it does not reassign the parties to the agreement. In sum, we are not definitely and firmly convinced that the trial court erred in finding that Charlotte was the successor-in-interest to Thomas’s rights. The plain language of the contract supports the trial court’s conclusion.

[¶ 16.] Next then, we must determine whether Charlotte released CCI from its obligation when she signed the mutual release. Cole’s Petroleum argues that before signing the mutual release Charlotte “acknowledged that the right to supply petroleum to CCI was held by Cole’s Petroleum.” However, Cole’s Petroleum does not cite to any portion of the record to support this assertion. As such, we cannot say that the trial court was clearly erroneous in finding that she did not. Finally, Cole’s Petroleum contends in its reply brief that Cole’s Petroleum and CCI never reached a “firm agreement” which would release CCI from its obligation to purchase petroleum products from Cole’s Petroleum. However, there was no need for CCI to reach an agreement with Cole’s Petroleum because Charlotte was the successor-in-interest.

[¶ 17.] Having concluded that the trial court was not clearly erroneous in determining that Charlotte, as successor-in-interest to Thomas, released CCI of its obligation under the agreement, it is unnecessary to resolve what type of agreement was terminated. Therefore, we move to CCI’s claim that the trial court clearly erred in finding that Cole’s Petroleum did not unreasonably and unfairly charge CCI for the products it sold under the agreement.

[¶ 18.] Pertinent to this issue, the agreement between Thomas and CCI provided that “[t]he cost of said products sold to said retail outlot [sic] shall be at fair and reasonable cost, and not to exceed the cost that the supplier sells similar products to any other outlot [sic] in Watertown.” (Emphasis added.) CCI does not dispute the trial court’s finding that the charges to CCI did not exceed what Cole’s Petroleum charged other Watertown outlets. Instead, CCI claims clear error in the finding that the $0,025 markup was “fair and reasonable.”

[¶ 19.] The trial court found this markup fair and reasonable based on expert testimony and the inclusion of freight delivery. CCI’s analysis turns on its assertion that “fair and reasonable” costs must be based on “market rate.” Citing Fed. Land Bank of Omaha v. Carlson, 411 N.W.2d 415, 417 (S.D.1987), CCI argues that “[f]am and reasonable value is determined by market value.” We note, however, that CCI’s cited authority “equated the term ‘fair and reasonable value’ with ‘market value [.] ” Id. (emphasis added) (citation omitted). That same Court then defined “market value” as “the highest price for which property considered at its best and most profitable use can be sold in the open market by a willing seller to a willing buyer, neither acting under compulsion and both exercising reasonable judgment.” Id. (emphasis added). CCI then attempts to substitute in its analysis the term “market value” with the term “market rate,” defined at trial as the “common mark-up over cost.”

[¶20.] Though we might agree that a “fair and reasonable value” can be defined as “market value,” we cannot agree with CCI’s attempt to analogize “market value” with “market rate.” This argument ig-ñores the rational conclusion that “the highest price” for which property can be sold is not necessarily the “common markup over cost.” Cole’s Petroleum presented evidence through expert testimony and through its dealings with other outlets that CCI’s costs did not exceed the “market rate.” However, even a conclusion that CCI’s costs exceeded the “market rate” would not have mandated that the trial court find that the charges exceeded the “market value.”

[¶ 21.] Even if CCI paid the “highest price for which [petroleum when] considered at its best and most profitable use [could] be sold in the open market by a willing seller to a willing buyer, neither acting under compulsion and both exercising reasonable judgment,” its costs would still not be beyond the bounds permitted under a “fair and reasonable” analysis. See Id. Although CCI points to some expert testimony that concluded that the charges exceeded a “fair and reasonable” cost based on “market rate,” CCI points to no expert testimony or evidence that demonstrated that the charges exceeded a “fair and reasonable” cost based on “market value.” Thus, we cannot say the trial court clearly erred in finding that CCI’s costs were fair and reasonable.

[¶ 22.] Affirmed.

[¶ 23.] GILBERTSON, Chief Justice, and SABERS, ZINTER, and MEIERHENRY, Justices, concur.

      . Thomas Cole was neither an owner nor an officer of Cole's Petroleum.

      . "Rack” price is the price Cole's Petroleum paid its supplier at the terminal.

      .The trial court awarded CCI $5,062.55, the amount of overcharges caused by accounting errors.

      . The fact that Thomas included in his will his rights in the agreement clearly demonstrates that he thought he had not assigned his rights to Cole's.