author: SNELL, Justice. CARTER, Justice

text:
    STATE of Iowa, Appellee, v. Larry Lee HOOK, Appellant.
    No. 99-1340.
    Supreme Court of Iowa.
    March 21, 2001.

      Linda Del Gallo, State Appellate Defender, and Shellie L. Knipfer, Assistant State Appellate Defender, for appellant.
    Thomas J. Miller, Attorney General, Sharon K. Hall, Assistant Attorney General, J. Patrick White, County Attorney, and Linda M. Paulson, Assistant County Attorney, for appellee.

       Senior judge assigned by order pursuant to Iowa Code section 602.9206 (1999).

   SNELL, Justice.

This is a direct appeal from the district court decision accepting the defendant’s written guilty plea to a felony. We are asked to consider the procedures required when a defendant enters a guilty plea to a felony. We find the procedures utilized by the court in accepting the guilty plea were inadequate. We hold the plea was invalid and therefore reverse and remand for proceedings consistent with this opinion.

I. Factual Background and Procedure

The defendant, Larry Lee Hook, pled guilty to one count of possession with the intent to deliver, a class “D” felony. See Iowa Code §§ 124.204(4)(m), 124.401(l)(d) (1997). Rather than conduct a full-length, in-court colloquy concerning Hook’s plea, the court requested that Hook submit a written plea of guilty to be considered by the court. The court did not use the written plea as a complete substitute for the in-court colloquy. Instead, it shortened its discussion with the defendant and questioned the validity of the defendant’s plea in reference to the executed written plea.

The court was satisfied with the answers given by the defendant and determined that together with the written plea information, the guilty plea was legally acceptable. The court then asked Hook’s counsel if he “took up Rule 23” with the defendant in the execution of the written plea, to which counsel replied in the affirmative. See Iowa R.Crim. P. 23(3)(a); see also Iowa R.Crim. P. 8(2)(d).

Hook received a deferred judgment and was placed on probation. As a result of several probationary violations, his probation was revoked, and he was sentenced to an indeterminate term of five years imprisonment. Following this final judgment, Hook filed a timely appeal to this court. Hook’s counsel did not file a motion in arrest of judgment. Hook now raises the present issue for the first time on direct appeal. Specifically, Hook challenges the district court’s reliance on the written guilty plea rather than conducting a full in-court colloquy as required by Iowa Rule of Criminal Procedure 8(2)(b) and his attorney’s failure to object to the alleged deficiencies in this process. He asks this court to impose a per se rule that when counsel allows his client to submit a written plea for a felony charge he commits automatic ineffective assistance.

II. Scope and Standard of Review

Our court reviews the application of a rule of criminal procedure for correction of errors at law. Iowa R.App. P. 4; accord State v. Schuessler, 561 N.W.2d 40, 41 (Iowa 1997). Because we are interpreting the language and the import of Rule 8(2) in this case, we will reverse only where there exists legal error. See State v. White, 587 N.W.2d 240, 241-42 (Iowa 1998). Rule 8(2) “specifies the colloquy in which a court must engage to ensure that a plea is knowingly and voluntarily made.” State v. Sayre, 566 N.W.2d 193, 195 (Iowa 1997). Noncompliance with this Rule is reversible error. See Saadiq v. State, 387 N.W.2d 315, 324-25 (Iowa 1986).

III. Procedural Impediments

A. Guilty Plea as Waiver

In State v. LaRue, we recognized a guilty plea works as an effective waiver of all constitutional challenges inherent in the conviction. State v. LaRue, 619 N.W.2d 395, 397-98 (Iowa 2000); see State v. Antenucci, 608 N.W.2d 19, 19 (Iowa 2000). However, “[a] guilty plea does not waive challenges that do not affect the validity of the conviction.” State v. Mann, 602 N.W.2d 785, 789 (Iowa 1999). The defendant’s Sixth Amendment right to adequate representation has no bearing on the actual validity of Hook’s guilt or conviction. U.S. Const, amend. VI. Further, Hook is essentially challenging the validity of the procedures used to arrive at his plea which implicates Iowa Rule of Criminal Procedure 8(2). Accordingly, this issue has not been waived by Hook.

B. Error Preservation

The State contends that the defendant did not preserve error with respect to his guilty plea because he did not file a motion in arrest of judgment prior to sentencing. Iowa Rule of Criminal Procedure 23(3)(a) provides:

3. Arrest of judgment.
a. Motion in Arrest of Judgment; Definition and Grounds. A motion in arrest of judgment is an application by the defendant that no judgment be rendered on a finding, plea, or verdict of guilty. Such motion shall be granted when upon the whole record no legal judgment can be pronounced. A defendant’s failure to challenge the adequacy of a guilty plea proceeding by motion in arrest of judgment shall preclude his or her right to assert such challenge on appeal.

Iowa R.Crim. P. 23(3)(a). Pursuant to this Rule, a defendant may not challenge a guilty plea on appeal unless the defendant has first filed a motion in arrest of judgment. See State v. Gant, 597 N.W.2d 501, 503 (Iowa 1999). Hook failed to do so. Nevertheless, we have held that the failure to file a motion in arrest of judgment will not bar a later challenge to a guilty plea if the trial court did not comply with Rule 8(2)(d). See State v. Oldham, 515 N.W.2d 44, 46 (Iowa 1994); State v. Worley, 297 N.W.2d 368, 370 (Iowa 1980). Rule 8(2)(d) states:

The court shall inform the defendant that any challenges to a plea of guilty based on alleged defects in the plea proceedings must be raised in a motion in arrest of judgment and that a failure to so raise such challenges shall preclude the right to assert them on appeal.

Iowa R.Crim. P. 8(2)(d).

In Worley, we considered the effect of the defendant’s failure to file a motion in arrest of judgment and the court’s responsibility to advise the defendant under Rule 8(2)(d). Worley, 297 N.W.2d at 370. We held that Rule 23(3)(a) must be read in conjunction with Rule 8(2)(d). Worley’s counsel, not the court as required by Rule 8(2)(d), told Worley during the plea proceedings that he could file a motion in arrest of judgment. We held that this procedure did not satisfy the requirements of Rule 23(3)(a) and Rule 8(2)(d) to properly inform the defendant of the information contained in these Rules. We said:

No defendant ... should suffer the sanction of rule 23(3)(a) unless the court has complied with rule 8(2)(d) during the plea proceedings by telling the defendant that he must raise challenges to the plea proceeding in a motion in arrest of judgment and that failure to do so precludes challenging the proceeding on appeal .... [WJhere, as in Worley’s case, the court fails to personally inform the defendant that he may file a motion in arrest of judgment and the consequences of failing to do so, rule 23(3)(a) does not preclude our review.

Id. Therefore, the court in Worley considered the defendant’s challenge to the plea procedure despite his failure to file a motion in arrest of judgment. Id.

Here, the trial court proceeded to take the guilty plea of Hook by combining the admissions contained in the written plea and the answers of Hook to oral questions by the court. The district court was proceeding from the premise that a fairly comprehensive list of questions and answers pertaining to a plea of guilty was contained in the written plea submitted to the court. As such, the oral colloquy in the courtroom with the defendant was supplementary.

After receiving the oral answers, the court accepted the plea and inquired of counsel about a motion in arrest of judgment. The court’s inquiry on this point was as follows. Addressing Hook’s counsel, the court said: “And you took up Rule 23 in this written portion?. ... And it was understood by your client?” Hook’s attorney assured the court that the defendant had been so advised. The court did not formally address the defendant or state what Rule 23 provided. Nor was it stated that Hook’s failure to challenge the adequacy of his guilty plea proceeding by motion in arrest of judgment would preclude his right to challenge his plea on appeal. In the case at bar, as in Worley, the court did not orally advise the defendant of the requirements of Rules 23(3)(a) and 8(2)(b) and the consequences of failing to file a motion in arrest of judgment.

Rule 8(2)(b), para. 6, provides that the court may, with the approval of the defendant, waive the procedures required by Rule 8(2)(b) for an oral colloquy in a plea of guilty to a serious or aggravated misdemeanor. But Rule 8(2)(d) does not contain a comparable provision that the required in-court colloquy about the appeal process can be waived by a written plea. This is true as to a guilty plea for serious and aggravated misdemeanors as well as felonies. Thus, the court’s failure to personally advise Hook of his right to file a motion in arrest of judgment and the consequences of failing to do so relieves Hook of the requirement that he file a motion in arrest of judgment in order to preserve a challenge to his guilty plea for appeal.

We hold that error was preserved on Hook’s claim that his guilty plea was not taken in accordance with the requirements of Rule 8(2)(b). Therefore, we need not consider his claim that his trial counsel was ineffective in failing to file a motion in arrest of judgment.

IV. Issue on Appeal

In State v. Kirchoff, we discussed the subject of written guilty pleas in the context of nonfelonies. State v. Kirchoff, 452 N.W.2d 801 (Iowa 1990). The Kirchoff case involved the acceptance of a guilty plea to two aggravated misdemeanors through the vehicle of written plea statements and some in-court colloquy between the judge and the defendant. Our court held that acceptance of the defendant’s guilty plea was valid because the trial court had substantially complied with the requirements of Rule 8(2)(b). Id. at 805.

The colloquy in the instant case is similar to that in Kirchoff. The State urges us to extend the rationale and result in Kir-choff that applied to aggravated misdemeanor cases to embrace written guilty pleas in felony cases. For reasons following, we decline to do so.

Our court has for decades decided cases where the pros and cons of the court’s acceptance of guilty pleas have been fully discussed from the standpoint of the court’s responsibility to ensure the protection of a defendant’s constitutional rights. See generally White, 587 N.W.2d 240; Kirchoff, 452 N.W.2d 801; State v. Fluhr, 287 N.W.2d 857 (Iowa 1980); State v. Reaves, 254 N.W.2d 488 (Iowa 1977); Brainard v. State, 222 N.W.2d 711 (Iowa 1974); State v. Sisco, 169 N.W.2d 542 (Iowa 1969).

Those constitutional rights involving due process have been largely codified in Rule 8(2)(b). See Sisco, 169 N.W.2d at 548-51. This Rule lists the matters for which the court must assure itself that a defendant’s plea is voluntarily and intelligently made. They provide in relevant part as follows:

b. Pleas of guilty. The court ... shall not accept a plea of guilty without first determining that the plea is made voluntarily and intelligently and has a factual basis. Before accepting a plea of guilty, the court must address the defendant personally in open court and inform the defendant of, and determine that the defendant understands, the following:
(1) The nature of the charge to which the plea is offered.
(2) The mandatory minimum punishment, if any, and the maximum possible punishment provided by the statute defining the offense to which the plea is offered.
(3) That the defendant has the right to be tried by a jury, and at trial has the right to assistance of counsel, the right to confront and cross-examine witnesses against the defendant, the right not to be compelled to incriminate oneself, and the right to present witnesses in the defendant’s own behalf and to have compulsory process in securing their attendance.
(4) That if the defendant pleads guilty there will not be a further trial of any kind, so that by pleading guilty the defendant waives the right to a trial.
The court may, in its discretion and with the approval of the defendant, waive the .above procedures in a plea of guilty to a serious or aggravated misdemeanor.

Iowa R.Crim.P. 8(2)(b) (second emphasis added).

Our court in Kirchoff determined that these requirements in Rule 8 can be adequately satisfied in a guilty plea to an aggravated misdemeanor when the procedure employed combines written admissions and statements with oral colloquy between the defendant and the court. Kirchoff, 452 N.W.2d at 804-05. This holding, limited to misdemeanors, is now codified in Rule 8. Iowa R.Crim. P. 8(2)(b), ¶ 6. We believe, however, that this procedure is not sufficient to satisfy the demands of Rule 8 when a defendant is pleading guilty to a felony because of the graver consequences involved. Kirchoff, 452 N.W.2d at 810 (Neuman, J., dissenting) (“It is the court’s duty to inform the defendant of the trial rights being waived upon plea of guilty to a crime more onerous than a serious misdemeanor.”).

In felony guilty pleas, we subscribe as a guide to the statement made by the Supreme Court in Boykin v. Alabama:

What is at stake for an accused facing death or imprisonment demands the utmost solicitude of which courts are capable in canvassing the matter with the accused to make sure he has full understanding of what the plea connotes and of its consequence. When the judge discharges that function, he leaves a record adequate for any review that may be later sought and forestalls the spin-off of collateral proceedings that seek to probe murky memories.

Boykin v. Alabama, 395 U.S. 238, 243-44, 89 S.Ct. 1709, 1712-13, 23 L.Ed.2d 274, 280 (1969).

C. Public Policy

Conviction of a felony carries with it more than a sentence. The consequences of a felony conviction greatly affect society’s view of a defendant, his job opportunities, his liberty interests, and other rights and privileges the rest of us take for granted. The additional stigma of a felony conviction creates a greater need for the justice system to ensure that justice is, indeed, being served. The historical reasons behind Rule 8 have always been “to assure that the defendant’s plea of guilty is a voluntary and intelligent act,” and “to help reduce the great waste of judicial resources required to process the frivolous attacks.” Brainard, 222 N.W.2d at 713 (citations omitted). “Both of these goals are undermined in proportion to the degree the district judge resorts to ‘assumptions’ not based upon recorded responses to his inquiries.” McCarthy v. United States, 394 U.S. 459, 467, 89 S.Ct. 1166, 1171, 22 L.Ed.2d 418, 426 (1969).

The Supreme Court has instructed: “It is ... not too much to require that, before sentencing defendants to years of imprisonment, district judges take the few minutes necessary to inform them of their rights and determine whether they understand the action they are taking.” Id. at 472, 89 S.Ct. at 1174, 22 L.Ed.2d at 428-29. This is true because a plea of guilty carries with it more than the repercussions of an admission. Brainard, 222 N.W.2d at 723 (“A guilty plea is a grave and solemn act to be accepted only with care and discernment.” (citation omitted)); Sisco, 169 N.W.2d at 545.

Like a verdict of a jury it is conclusive. More is not required.... Out of just consideration for persons accused of' crime, courts [should be] careful that a plea of guilty shall not be accepted unless made voluntarily after proper advice ....

Kercheval v. United States, 274 U.S. 220, 223, 47 S.Ct. 582, 583, 71 L.Ed. 1009, 1012 (1927).

Because of the greater loss of liberty, status, voting rights, gun ownership, right to travel abroad, employment opportunities, and other rights we are persuaded that we should heighten our inquiry into the understanding and voluntariness of the defendant’s plea to the felony charge. We also believe: “[T]he more meticulously the Rule is adhered to, the more it tends to discourage, or at least to enable more expeditious disposition of, the numerous and often frivolous post-conviction attacks on the constitutional validity of guilty pleas.” McCarthy, 394 U.S. at 465, 89 S.Ct. at 1170, 22 L.Ed.2d at 425 (discussing the federal counter-part of Rule 8).

V. Disposition

At no time can a written guilty plea to a felony serve as a substitute for a question the court is required to pose to the defendant directly. Such a discourse between the court and the defendant need only take a modest amount of time. “It would comply with the requirements of our laws, in spirit and in truth. And, it would not unduly burden our courts.” White, 587 N.W.2d at 246. Obviously, the nature of each felony charge necessitates an inquiry that varies on a case-by-case basis. See McCarthy, 394 U.S. at 467-68, 89 S.Ct. at 1171-72, 22 L.Ed.2d at 435-27. “One procedure cannot be right for every case; yet a right procedure must be followed in every case.” Brainard, 222 N.W.2d at 723. The right procedure for a felony guilty plea is a full, oral colloquy.

In the case at bar, we hold that the requirements of Rule 8(2) for the court’s acceptance of a guilty plea to a felony charge have not been met. This constitutes an error of law. Because of the district court’s error, it is not necessary to discuss whether Hook’s counsel was ineffective.

For the aforesaid reasons, we vacate Hook’s guilty plea and reverse and remand this case for further proceedings to allow the defendant to plead anew.

REVERSED AND REMANDED.

All justices concur except CARTER, J. and McGIVERIN, S.J., who dissent, and LARSON, J., who takes no part.

CARTER, Justice

(dissenting).

I dissent.

Although Iowa Rule of Criminal Procedure 8(2)(b) requires the court to address the defendant personally in order to ascertain defendant’s understanding of those matters specifically designated in that rule, a failure to comply with this requirement should not in all instances entitle defendant to withdraw a plea of guilty. In State v. Kirchoff, 452 N.W.2d 801, 805 (Iowa 1990), we recognized that, if information concerning the rights listed in rule 8(2)(b) are conveyed to the defendant in the form of a written guilty plea, and it does not appear that defendant misunderstood the resulting loss of those rights, there is no entitlement to withdraw the plea. That appears to be the situation in regard to defendant’s plea in the present case. Moreover, it appears that when the guilty plea was entered this was much to defendant’s advantage. Without an affirmative showing on his part that he misunderstood his rights, he should not be permitted to withdraw his plea. See State v. West, 326 N.W.2d 316, 318 (Iowa 1982) (defendant must show he was misled concerning rule 8(2)(b) rights in order to withdraw plea).

I would affirm the judgment of the district court.

McGIVERIN, S.J., joins in this dissent.


source: Caselaw Access Project

author: SNELL, Justice.

license: Public Domain

text:
    WESTFIELD INSURANCE COMPANIES, Appellant, v. ECONOMY FIRE & CASUALTY COMPANY and Universal Underwriters Insurance Company, Appellees, and Empire Fire & Marine Insurance Company, Defendant.
    No. 99-0460.
    Supreme Court of Iowa.
    March 21, 2001.

      J. Michael Weston, James P. Craig, and Brenda K. Wallrichs of Moyer and Bergman, P.L.C., Cedar Rapids, for appellant.
    Michael P. Byrne and Cameron A. Davidson of Lane & Waterman, Davenport, for appellee Economy Fire & Casualty Co.

      John M. Bickel and Theresa C. Davis of Shuttleworth & Ingersoll, P.C., Cedar Rapids, for appellee Universal Underwriters Insurance Co.

       Senior judge assigned by order pursuant to Iowa Code section 602.9206 (1999).

   SNELL, Justice.

This is an appeal by plaintiff, Westfield Insurance Companies (Westfield), from an adverse summary judgment. The issue before the district court was how to assess liability among several insurance companies for money damages paid in settlement to.an injured driver. The injured driver was involved in a car accident where multiple insurance companies provided coverage. The district court held that West-field, as primary insurer, was liable for payment of all the money damages paid to the injured driver. Westfield claims the district court erred in failing to apply a pro rata standard to assess liability. We reverse and remand for further proceedings.

I. Factual Background and Proceedings

A simple car accident involving two private citizens has turned into a six-year dispute between multiple insurance companies. The actors involved in the accident are nearly irrelevant to this determination, but some background information is helpful to put the issue in context.

Dr. Andrew Edwards was an employee of Bettendorf Medical Center (Bettendorf) in 1993. Because his car was receiving some necessary repairs, he needed a rental car. Bettendorf rented a car for Edwards’s use during this time. While driving this rental car, Edwards was involved in a collision with Chamein Clark-Melroy. It was her lawsuit to recover damages that precipitated the legal issue before us today. She sued jointly Edwards, Betten-dorf, the rental car company, and the company from whom the rental company leased the car. She received a settlement of $382,000.

(1) Edwards was insured by Economy Fire & Casualty Company (Economy) with a $100,000 policy limit. The settlement agreement provided that Economy pay $102,000 of the settlement amount. Economy reserved the right to adjudicate the appropriateness of its payment of this amount. Economy is an appellee in the present case.

(2) Bettendorf was insured by Westfield with a $1,000,000 policy limit. The settlement agreement provided that Westfield pay the remaining balance of damages equaling $280,000. Westfield also reserved the right to adjudicate the appropriateness of its payment of this amount.

(3) Dollar-Rent-A-Car (Dollar) rented the car involved in the accident to Betten-dorf for Edwards’s use. It was insured by Empire Fire & Marine Insurance Company (Empire) with a $50,000 policy limit. Empire was not assessed any portion of the money damages in the settlement. Empire is not involved in this appeal.

(4) Dollar leased the car in question from Bi-State Leasing, Incorporated (Bi-State). Bi-State was the actual owner of the car. Bi-State was insured by Universal Underwriters Insurance Company (Universal) with a $500,000 policy limit. No damages were allocated to Universal under the settlement. Universal is an ap-pellee in the present suit.

Following the settlement, Westfield sought reimbursement for the amount it paid from the other three companies. The suit and counterclaim between Empire and Westfield has been settled. Universal counterclaimed against Westfield seeking to remain free from liability for any damages. Economy also counterclaimed against Westfield alleging Economy should be reimbursed by Westfield for the amount Economy paid in settlement. Numerous other counterclaims not relevant here were filed. At all points, Westfield denied sole liability. A motion to adjudicate law points was filed by all four insurance companies, seeking a district court determination of what each competing policy covered. Specifically, Westfield sought a pro rata share ruling for the settlement and a finding that every policy involved provided excess coverage because all contained an excess clause.

The adjudication of law points ruling issued by Judge Sivright found Westfield was the primary insurer. As such, it was liable for the entire amount up to its policy limits. With a $1,000,000 policy limit, Westfield was liable for all $382,000. Although all four policies contained an excess insurance clause, the court found that Westfield remained the primary insurer because of additional language in its policy, specifically, a hired auto endorsement.

Economy, Empire, and Universal sought summary judgments in their favor. Economy also sought reimbursement of the $102,000 it had originally paid from West-field. After an unsuccessful attempt to secure an interlocutory appeal, Westfield filed its own motion for summary judgment despite the adverse adjudication of law points ruling.

In February of 1999, the district court, Judge Nahra presiding, granted summary judgment in favor of Economy, Empire, and Universal. It also held Economy must be reimbursed by Westfield for the entire portion it had paid in settlement. All other counterclaims were granted in the opposing sides’ favor. In its resistance to the other insurance companies’ motions for summary judgment, Westfield argued that the district court’s ruling on the adjudication of law points motion was in error. Specifically, Westfield charged the district court with applying an improper contribution standard in order to find that West-field was the primary insurer. The district court held that such a claim should have been addressed in a motion to modify the adjudication of law points ruling, not a resistance to a summary judgment motion. Thus, the court considered this issue inappropriate for its review.

The contribution formula which the district court would not address in its summary judgment ruling is now the subject of this appeal. Westfield argues every policy involved in the present appeal contains an excess clause. Westfield seeks a ruling that the pro rata formula is implicated under these circumstances. Economy and Universal argue that because Westfield is the only primary insurer, its policy must first be exhausted before it can seek contribution from the other insurance companies. Universal also argues the district court erred in its adjudication of law points by finding Universal provided any insurance at all under these facts.

We are asked to determine whether Westfield’s policy language can be construed as providing primary coverage or excess coverage. We must also decide, if the policy provides excess coverage, whether this court should force the remaining insurance companies to split the settlement cost on a pro rata basis.

II. Scope and Standard of Review

We review the interpretation of the language of an insurance policy for correction of errors at law. Austin v. CUNA Mut. Life Ins. Co., 603 N.W.2d 577, 578 (Iowa 1999). “Interpretation of an insurance policy, including resolution of disputed coverage, is a legal matter which we review on error.” Stine Seed Farm, Inc. v. Farm Bureau Mut. Ins. Co., 591 N.W.2d 17, 18 (Iowa 1999); Ottumwa Hous. Auth. v. State Farm Fire & Cas. Co., 495 N.W.2d 723, 726 (Iowa 1993). Due to the nature of an insurance policy, the benefit of the doubt in the drafting is interpreted against the insurance company. LeMars Mut. Ins. Co. v. Joffer, 574 N.W.2d 303, 307 (Iowa 1998). As such, limits in “coverage are construed strictly against the insurer.” Id.

Similarly, we review a grant or denial of a motion for summary judgment at law. Iowa R.App. P. 4; Krause v. Krause, 589 N.W.2d 721, 724 (Iowa 1999). In such cases, we determine whether the district court correctly applied the law. Krause, 589 N.W.2d at 724. In that regard, “[sjummary judgment is properly granted if the only controversy concerns the legal consequences flowing from undisputed facts.” Diggan v. Cycle Sat, Inc., 576 N.W.2d 99, 102 (Iowa 1998). “Summary judgment is appropriate only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.” Joffer, 574 N.W.2d at 306. In the present case, we review the record in the light most favorable to Westfield as the nonmoving party. Id.

Moreover, an appeal challenging the district court’s “adjudication of law points is confined to a determination of legal matters on uncontroverted pleadings.” Mortensen v. Heritage Mut. Ins. Co., 590 N.W.2d 35, 38 (Iowa 1999); see Iowa R. Civ. P. 116. As such, our standard of review for an adjudication of law points is on errors at law. Iowa R.App. P. 4; Mortensen, 590 N.W.2d at 38. A party need not move to amend this ruling to be able to challenge it on appeal. Iowa R. Civ. P. 179(b).

We have previously held that when the adjudication of law points determines the ruling on a motion for directed verdict, the former ruling may be reviewed on appeal of the latter. Powell v. Khodari-Intergreen Co., 334 N.W.2d 127, 130-31 (Iowa 1983). The same is true when the adverse adjudication of law points ruling is the basis for the grant of a motion for summary judgment. Caniglia v. Lary, 366 N.W.2d 548, 549-50 (Iowa 1985). When the summary judgment motion is not decided on a discussion of the presence or absence of material issues, but based solely on a former adjudication of law points, review on appeal of the prior ruling is unavoidable. Id.; Powell, 334 N.W.2d at 130.

III. Issue on Appeal

We have before us the language from three policies from three different insurance companies. The district court concluded that the language of the Westfield policy provided primary coverage, while the others were limited to excess coverage. The district court recognized that the Westfield policy also had an excess coverage provision, but determined this provision was secondary to the primary coverage the policy provided. Westfield has appealed this interpretation.

Specifically, Westfield alleges the district court applied the “closer to the risk” doctrine to find Westfield was the primary insurer. Westfield argues this was error given our recent decision in Illinois National Insurance Co. v. Farm Bureau Mutual Insurance Co., 578 N.W.2d 670 (Iowa 1998). Whether the district court applied this prohibited doctrine is something we must first address prior to discussing Westfield’s second claim that the pro rata share rule should govern this decision.

A. The District Court Analysis

We have recently held that our courts should apply the pro rata distribution rule in situations where there are conflicting excess insurance provisions. Illinois Nat’l, 578 N.W.2d at 673. This is not true where one insurance company provides primary insurance and the remaining companies provide excess insurance. In the present case, the three disputed policies each contain an excess insurance provision. The dispute here concerns the district court’s determination that the Westfield policy provides primary insurance such that the pro rata share rule would only be implicated when its limits are exhausted. Westfield asks us to reverse this determination under the rationale that the court imper-missibly applied the closer to the risk rule to determine it was a primary insurer.

The closer to the risk rule was adopted by the courts in Minnesota. Interstate Fire & Cas. Co. v. Auto-Owners Ins. Co., 433 N.W.2d 82, 86 (Minn.1988). Specifically, this rule provides that whichever excess insurer’s coverage more particularly contemplates the present incident is the primary insurer for dispute purposes. Id. There are three factors utilized by the court to determine which policy is closer to the risk. Id.; see also Illinois Nat’l, 578 N.W.2d at 673 (detailing the Minnesota approach). (1) Which policy, if any, particularly mentions the accident-causing instrumentality? Interstate Fire, 433 N.W.2d at 86. (2) Which premium suggests it provides broader coverage? Id. (3) Does any disputed policy contemplate the risk at issue, if so, which policy’s language is the most specific? Id.

In Illinois National we compared Minnesota’s rule with Iowa’s pro rata approach, and held that we “prefer to apply our own rule.” Illinois Nat’l, 578 N.W.2d at 673. The reason for this conclusion is:

For one thing[,] the [pro rata] rule ... is clear and easy to apply. Assessing which policy is closer to the risk would often be a tricky business, and would be a fertile field for much dispute and litigation. Coverage of losses by an unrelated policy, might, as it does here, lead to a surprising result in view of a modest premium charge. But we do not think it follows that we should therefore fail to apply a clear and workable rule.

Id.

The district court in the instant case did not expressly mention the three factors used by the Minnesota court in its determination. Moreover, it is not readily apparent what formula the court utilized except to look at the language of the Westfield policy and determine the hired auto endorsement specifically insured the present scenario. Although the Westfield policy also contained an excess insurance clause, the district court found the hired auto endorsement “provided coverage for risks not covered by the employees’ primary auto insurance.” As such, if the excess clause were to trump the hired auto endorsement, the district court reasoned this would “impinge[ ] upon the insureds’ right to expect full coverage for liability arising from non-owned hired autos in the course of their employment.” The court concluded that the policy provided protection for the uncovered, additional risk of renting a car. “Therefore, the Westfield policy should be categorized as primary insurance for such additional risks.”

The district court placed much emphasis on the fact that the Westfield policy has a broader coverage base. Unlike the other policies, it contains a hired auto liability endorsement provision. This provision states: “The insurance provided ... applies to ‘bodily injury’ or ‘property damage’ arising out of the maintenance or use of a ‘hired auto’ by you or your employees in the course of your employment.” Hired auto is described as “any ‘auto’ you lease, hire or borrow” from a nonemployee. No where in the endorsement does it state it provides primary coverage. Moreover, the Westfield excess insurance provision purports to apply to the entire policy.

Westfield argues that the district court’s use of the hired auto endorsement as proof that Westfield provides primary insurance actually applies the closer to the risk rule rejected by our court in Illinois National. We agree. On closer inspection, we believe the district court used this endorsement to find Westfield provided primary coverage because (1) the policy particularly mentions the accident-causing instrumentality by way of the endorsement, and (2) the policy more specifically contemplates the risk at issue. These reasons are two factors out of the three that make up the closer to the risk rule.

Without weighing the specificity of Westfield’s policy against the others, each policy provides basic auto coverage. The hired auto endorsement does not state it provides primary coverage. As such, the excess clause should govern. We find the district court used an improper standard for allocating loss because it ranked specificity over the presence of the excess clause. The district court’s analysis is consistent with the closer to the risk formula and cannot be upheld.

B. Excess Clauses in Each Policy

The district court should have applied the pro rata distribution standard. Our court reaffirmed the pro rata approach for situations involving dueling excess insurance providers in Illinois National. Id. The rule recognized in Iowa was first espoused in 1969. Truck Ins. Exch. v. Maryland Cas. Co., 167 N.W.2d 163 (Iowa 1969). The court held: “As a general rule, when two insurance companies provide insurance on the same loss, the question of their respective insurance obligations is determined by construction of the language used by the respective insurers.... ” Id. at 164. When the disputed policies contain excess clauses, those excess clauses cannot exist without a primary insurance coverage, and the loss must' be shared proportionately. Id. Put another way,

if two polices purport to afford only excess insurance, there can be no primary coverage. Without primary coverage neither policy can operate as a'policy of excess insurance. Because the excess provision would thus be rendered inoperative, the general coverage of each policy must apply on a prorated basis.

Illinois Nat’l, 578 N.W.2d at 672 (citing Track, 167 N.W.2d at 164-65). Here, because the Westfield policy provides excess coverage only, it can only be forced to pay its proportionate share of the loss.

There is no dispute that the Economy policy does not provide primary coverage for non-owned vehicles. Its policy reads: “[AJny insurance we provide for a vehicle you do not own shall be excess over any other collectible insurance.” As such, it is an excess insurer and liable for a pro rata share of the cost of.settlement negotiated by it and Westfield.

The Universal policy also contains an excess insurance clause. Under its general conditions it states: “[T]his insurance is excess over any other insurance .... ” Under the auto portion of the policy the language reads: “The insurance afforded by this Coverage Part is primary, except it is excess ... while the OWNED AUTO ... is in the care, custody, or control of any person or organization other than YOU.” This language clearly indicates primary coverage does not exist for vehicles owned by Bi-State in the care of others. Although Universal now argues it provides no coverage at all under these circumstances, if we find that it does, the most it provides is excess coverage.

We find the three insurance policies each provide excess insurance. The court impermissibly used specificity in policy language to find. Westfield provided primary coverage in its adjudication of law points. Judge Nahra was not at liberty to question the validity of the adjudication of law points because it was a final ruling. Iowa R. Civ. P. 116 (original version at Iowa R. Civ. P. 105); see also Bruner v. Varley, 411 N.W.2d 150, 154-55 (Iowa 1987) (finding an adjudication of law points is “a final order becoming the ‘law of the case’ in all further proceedings in the absence of an appeal” (citation omitted)). While the district court was correct in applying the previous ruling when it made the summary judgment determination, summary judgment based upon an erroneous adjudication of law points cannot stand. Bruner, 411 N.W.2d at 155 (“[W]e are not bound by the erroneous ruling on appeal.”). The district court did not apply the pro rata standard as enunciated in Illinois National. This was error. When competing insurance policies contain excess clauses, each is repugnant to the others, and the loss should be prorated.

C. The Universal Policy Coverage Exclusion

Because the loss should be prorated among the remaining insurance providers which provide coverage, we must determine now whether Universal provides coverage, such that it must contribute proportionately. If not, the pro rata share must be absorbed by Westfield and Economy. Universal argues that given exclusionary language in the Universal policy, it does not provide any coverage to Bi-State, its insured, under these circumstances. In the adjudication of law points ruling, the district court dismissed the exclusionary language in the policy as contravening the intent of Bi-State to seek insurance for its vehicles used in its business. The court then found that Universal was liable to Bi-State as an excess insurer. On appeal, Westfield argues Universal should be es-topped from denying coverage because it failed to deny coverage during the settlement proceedings and discovery.

1. Estoppel

Westfield argued in its motion to adjudicate law points filed in the district court that Universal was estopped to deny coverage because Universal had defended its insured, Bi-State, without reserving its rights, and Bi-State had admitted in answers to interrogatories that coverage for the accident was provided by Universal. To support its motion, Westfield relied on the doctrine of estoppel by acquiescence and our decision in American Family Mutual Insurance Co. v. Allied Mutual Insurance Co., 562 N.W.2d 159, 165 (Iowa 1997).

We have held “that while a forfeiture of benefits contracted for may be waived, the doctrine of waiver or estoppel cannot be successfully invoked to create a liability for benefits not contracted for at all.” Pierce v. Homesteaders Life Ass’n, 223 Iowa 211, 217, 272 N.W. 543, 546 (1937); accord Richardson v. Iowa State Traveling Men’s Ass’n, 228 Iowa 319, 328, 291 N.W. 408, 412 (1940) (holding the doctrine of estoppel cannot “create by waiver a contractual liability not contained in the policy itself’); see also City of Carter Lake v. Aetna Cas. & Sur. Co., 604 F.2d 1052, 1059 (8th Cir.1979) (“Iowa follows the general rule that the doctrine of estoppel may not be used ‘to bring within the coverage of a policy risks not covered by its terms, or risks expressly excluded therefrom.’ ” (quoting Randolph v. Fireman’s Fund Ins. Co., 255 Iowa 943, 950, 124 N.W.2d 528, 532 (1963))). There is, however, a well-recognized exception to this rule: “[W]hen an insurance company assumes the defense of an action, with knowledge actual or presumed, of facts which would have permitted it to deny coverage, it may be estopped from subsequently raising the defense of non-coverage.” City of Carter Lake, 604 F.2d at 1059 (applying Iowa law). The court in Carter Lake noted that there was some “authority for the proposition that prejudice is presumed from undertaking the defense of an action without a reservation of rights or, alternatively stated, that the loss of control of one’s own case is itself prejudice.” Id. at 1061. Nonetheless, the court did not rely on a presumption of prejudice in concluding that the insurer was estopped. Instead, the court identified specific ways in which the insured was harmed by the insurer’s delay in denying coverage. Id. at 1061-62.

The doctrine of estoppel by acquiescence upon which Westfield relies does not fall within the exception to the general rule identified in the Carter Lake case. Although this doctrine bears an “es-toppel” label, it is, in reality, a waiver theory. We have held that this doctrine applies “ Vhere a person knows or ought to know that he is entitled to enforce his right ... and neglects to do so for such a length of time as would imply that he intended to waive or abandon his right.’ ” Anthony v. Anthony, 204 N.W.2d 829, 884 (Iowa 1973) (emphasis added) (quoting Humboldt Livestock Auction, Inc. v. B & H Cattle Co., 261 Iowa 419, 432, 155 N.W.2d 478, 487 (1967)). Similarly, we have stated: “Estoppel by acquiescence is based on an examination of the ... actions [of the individual] who holds the right in order to determine whether the right has been waived.” Davidson v. Van Lengen, 266 N.W.2d 436, 439 (Iowa 1978) (emphasis added). Under Iowa law, it is not necessary to prove prejudice to establish estop-pel by acquiescence. See id. In contrast, the doctrine of equitable estoppel requires proof that the party alleging an estoppel relied on a false representation or concealment of material fact “to his prejudice and injury.” Fencl v. City of Harpers Ferry, 620 N.W.2d 808, 815 (Iowa 2000).

These cases indicate that the doctrine of estoppel by acquiescence is more akin to waiver than to equitable es-toppel due to the absence of the justifiable reliance and prejudice elements. The exception to the general rule that coverage cannot be established by waiver or estop-pel is limited to equitable estoppel. Justifiable reliance and prejudice must be shown to estop an insurer from denying coverage. See Bruns v. Hartford Accident & Indem. Co., 407 N.W.2d 576, 580 (Iowa 1987) (noting, in case alleging insurer was estopped to claim insured had forfeited coverage by failing to give notice, that person claiming estoppel “ha[d] not explained what elements eompose[d] her es-toppel cause of action, ’’and then holding that person “must demonstrate justifiable reliance”).

There is, nonetheless, a question as to the effect of our decision in American Family, 562 N.W.2d at 165. In that case, two insurers, American Family and Allied, potentially provided coverage for an alleged tortfeasor. Id. at 161. American Family assumed the defense and settled the tort claim. It then sought to recoup a portion of its payment from Allied. Allied successfully moved for summary judgment on the basis of estoppel by acquiescence. On appeal, our court held that the summary judgment could not be affirmed on the basis of estoppel by acquiescence. We stated that American Family had not neglected its right to seek indemnity or contribution against Allied for such time as would imply an intention to waive or abandon the right. Id. at 165.

It is significant to note that the court in American Family did not discuss whether, as a legal matter, the doctrine of estoppel by acquiescence was appropriately applied in this context. Moreover, no discussion of the doctrine of equitable estoppel was made as to its applicability to the claim of one insurer against another for contribution. We believe that in the case at bar the appropriate legal doctrine to apply to Westfield’s claim against Universal is equitable estoppel. As such, Westfield must prove the elements of equitable estoppel to successfully prevent Universal from denying coverage under its policy.

Therefore, we must examine the record to determine whether Westfield established justifiable reliance on Universal’s representations to its prejudice as a matter of law. The estoppel issue was raised in Westfield’s motion to adjudicate law points, not its motion for summary judgment. Consequently, there were no affidavits or other testimony submitted in support of Westfield’s estoppel theory. In fact, Westfield did not even allege in its pleadings filed in connection with its motion to adjudicate law points or its motion for summary judgment that it justifiably and detrimentally relied on Universal’s representations and actions with respect to Universal’s coverage for the accident. This state of the record is fatal to West-field’s argument on appeal that judgment should be entered in its favor, whether this contention is considered under the requirements for a motion to adjudicate law points or under the requirements for summary judgment.

Westfield has made no showing that the uncontroverted pleadings establish its justifiable and detrimental reliance. In the absence of a showing that there is no genuine factual dispute with respect to Westfield’s justifiable reliance and resulting prejudice, Westfield is not entitled to an adjudication of law points or summary judgment on the basis of estoppel.

2. Reasonable Expectations

The issue of reasonable expectations was raised in Westfield’s motion to adjudicate law points. In that motion Westfield contended that Universal’s policy provided coverage to Bi-State for the accident in question because the exclusion upon which Universal relied to deny coverage eliminated the dominant purpose of the policy issued to Bi-State. The district court agreed, ruling that “[t]he doctrine of reasonable expectations supports a finding of coverage” and obligated the court to ignore the policy exclusion.

On appeal, Westfield argues that “[i]n making its coverage determination, the district court went beyond the specific terms of the policy and used extrinsic evidence to ascertain the reasonable expectations of the insured.” Westfield contends, therefore, that the district court “made a finding of fact” that the Universal policy provided coverage and that this finding is binding on this court because it is supported by substantial evidence. To the extent that the district court did, in fact, resolve a contested issue of fact in ruling on the reasonable expectations issue, its decision was improper. A motion for adjudication of law points is not intended to be used to resolve factual disputes, but rather to determine “legal matters on uncontroverted pleadings.” Mortensen, 590 N.W.2d at 38. As Westfield’s argument illustrates, the issue of reasonable expectations is a factual matter, not a legal matter. Moreover, the record shows no uncontroverted pleadings establishing the factual predicates for application of the reasonable expectations doctrine.

Under the reasonable expectations doctrine

the objectively reasonable expectations of applicants and intended beneficiaries regarding insurance policies will be honored even though painstaking study of the policy provisions would have negated those expectations. The doctrine is carefully circumscribed and does not contemplate the expansion of coverage on a general equitable basis. It can only be invoked when an exclusion (1) is bizarre or oppressive, (2) eviscerates terms explicitly agreed to, or (3) eliminates the dominant purpose of the transaction. A 'preliminary criterion must be satisfied before we apply the doctrine. The policy must either be such that an ordinary layperson would misunderstand its coverage, or there must be circumstances attributable to the insurer which would foster coverage expectations.

Krause, 589 N.W.2d at 727 (emphasis added) (citations omitted). We note initially that the district court made no express determination that either of the preliminary criterion was satisfied before it proceeded to decide that the exclusion eliminated a dominant purpose of the policy. However, such a conclusion was apparently an unwritten premise of the court’s ultimate decision that the doctrine of reasonable expectations applies. The question now is whether the district court correctly concluded that an ordinary layman would misunderstand the coverage provided by the policy or that the uncontroverted pleadings established “circumstances attributable to [Universal] which would foster coverage expectations.” See id.

The parties agree that the Universal policy includes coverage for “garage operations and auto hazard.” This coverage requires Universal to pay

all sums the INSURED legally must pay as damages ... because of INJURY to which this insurance applies, caused by an OCCURRENCE arising out of GARAGE OPERATIONS or AUTO HAZARD.

Although the “auto hazard” includes coverage for the use of any auto owned by Bi-State and “furnished for the use of any person or organization,” this coverage is limited by an exclusion for “INJURY arising out of the ... use ... of any ... AUTO, while ... leased or rented by YOU [Bi-State] to others.” The only exception to this exclusion is for a lease or rental to Bi-State’s “customers for a term of two months or less when it temporarily replaces the CUSTOMER’S AUTO or when the customer is awaiting delivery of an AUTO purchased from [Bi-State].”

We do not think an ordinary layperson would misunderstand the exclusion; it clearly excludes coverage for leased vehicles unless the vehicle replaces a customer’s current or soon-to-arrive auto for a lease period of two months or less. In the case at bar, Bi-State leased the vehicle in question to Dollar for a six-month period. An ordinary layperson, reading the exclusion and its exception, could not reasonably conclude that such a situation would be covered. Accordingly, Westfield has not established that “an ordinary layperson would misunderstand [the policy] coverage.” See id.

The alternative prerequisite for the reasonable expectations doctrine is proof of circumstances attributable to the insurer that fostered coverage expectations on the part of Bi-State. There is nothing in the record indicating what coverage expectations Bi-State had.

Because the uncontroverted pleadings do not establish either of the preliminary criterion for application of the reasonable expectations doctrine, the district court erred in ruling, as a legal matter, that this doctrine prevented Universal from relying on its policy exclusion to deny coverage. Consequently, we reverse the district court’s determination that Universal had coverage under its policy for Bi-State’s liability.

The case is reversed and remanded for trial of the issue of Universal’s liability to Westfield based on the principles of equitable estoppel and reasonable expectations and for determination of the pro rata share of the settlement damages to be assigned to Westfield, Economy, and Universal (if found to be liable).

REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.

NEUMAN, J„ takes no part, and McGIVERIN, S.J., participates in place of CARTER, J., who takes no part.


author: Alan C. Page Associate Justice

text:
    In re Petition for DISCIPLINARY ACTION AGAINST Christopher James BIANCO, an Attorney at Law of the State of Minnesota.
    No. C0-00-1850.
    Supreme Court of Minnesota.
    March 23, 2001.
   ORDER

The Director of the Office of Lawyers Professional Responsibility has filed a petition for disciplinary action alleging that respondent Christopher James Bianco has committed professional misconduct warranting public discipline, namely, he consumed alcohol in violation of his criminal probation and a pretrial release order, represented a client after suspension of his license for nonpayment of attorney registration fees, and failed to cooperate with the Director’s investigation in violation of Minn. R. Prof. Conduct 3.4(c), 5.5(a) and 8.1(a)(3), Rule 25, Rules on Lawyers Professional Responsibility (RLPR), and the Court’s holding in In re Cartwright, 282 N.W.2d 548 (Minn.1979).

Respondent admits his conduct violated the Rules of Professional Conduct, waives his rights pursuant to Rule 14, RLPR, and has entered into a stipulation with the Director wherein they jointly recommend that the appropriate discipline is a 60-day suspension followed by two years of supervised probation subject to the following conditions:

(a) Respondent may not be reinstated by payment of his attorney registration fee until he has completed the 60 day suspension and fully satisfied the requirements herein.
(b) Respondent shall comply with Rule 26, RLPR.
(c) Respondent may be reinstated following the expiration of the suspension provided that respondent files an affidavit with the Clerk of Appellate Courts and the Director’s Office, in accordance with Rule 18(b), RLPR, establishing that respondent is current with Continuing Legal Education and has fully complied with Rules 24 and 26, RLPR. Respondent may file said affidavit 15 days before the expiration of the suspension period in order to be reinstated at the end of the 60-day suspension.
(d) Respondent’s probation shall be subject to the following conditions:
(i) Respondent shall be supervised by a licensed Minnesota attorney, appointed by the Director to monitor compliance with the terms of this probation. Respondent shall provide the Director with the names of four attorneys who have agreed to be nominated as respondent’s supervisor within two weeks of reinstatement. If, after diligent effort, respondent is unable to locate a supervisor acceptable to the Director, the Director will seek to appoint a supervisor. Until a supervisor has signed a consent to supervise, the respondent shall on the first day of each month provide the Director with an inventory of active client files described in paragraph (ii) below. Respondent shall make active client files available to the Director upon request.
(ii) Respondent shall cooperate fully with the supervisor in his/her efforts to monitor compliance with this probation. Respondent shall contact the supervisor and schedule a minimum of one in-person meeting per calendar quarter. Respondent shall submit to the supervisor an inventory of all active client files by the first day of each month during the probation. With respect to each active file, the inventory shall disclose the client name, type of representation, date opened, most recent activity, next anticipated action, and anticipated closing date. Respondent’s supervisor shall file written reports with the Director at least quarterly, or at such more frequent intervals as may reasonably be requested by the Director.
(iii) Respondent shall initiate and maintain office procedures that insure that there are prompt responses to correspondence, telephone calls, and other important communications from clients, courts, and other persons interested in matters that respondent is handling, and which will insure that respondent regularly reviews each and every file and completes legal matters on a timely basis.
(iv) Within 30 days from reinstatement, respondent shall provide to the Director and to the probation supervisor, if any, a written plan outlining office procedures designed to insure that respondent is in compliance with probation requirements. Respondent shall provide progress reports as requested.
(v) Prior to reinstatement, and if respondent has not already done so, respondent agrees to undergo a chemical dependency evaluation by a treatment center acceptable to the Director and to follow all recommendations of the evaluating treatment center.
(vi) Respondent shall maintain total abstinence from alcohol and other mood-altering chemicals, except that respondent may use prescription drugs in accordance with the directions of a prescribing physician who is fully advised of respondent’s chemical dependency before issuing the prescription.
(vii) Respondent shall attend weekly meetings of Acoholics Anonymous or another out-patient alcohol treatment program acceptable to the Director. Respondent shall, by the tenth day of each month, without a specific reminder or request, submit to the Director an attendance verification on a form provided by the Director, which provides the name, address, and telephone number of the person personally verifying the attendance. Such attendance verification shall also, upon request, be provided to the respondent’s supervisor, if any.
(viii) Respondent shall, at his own expense, no more than four times per month, submit to random urinalysis for drug screening at a facility approved by the Director and shall direct the drug screening facility to provide the results of all urinalysis testing to the Director’s Office. If, after six months, all such tests have been negative, the frequency of the random tests may be reduced. Respondent shall cooperate with the phone-in program established by the Director for the random tests. Any failure to phone-in in accordance with the random test program shall be considered the same as receipt of a positive test result. Any positive test result will be grounds for revoking this probation.
(ix) Respondent shall be required to successfully complete the professional responsibility portion of the state bar examination within one year of the date of reinstatement.

IT IS HEREBY ORDERED that respondent Christopher James Bianco is suspended from the practice of law for 60 days, and upon reinstatement is placed on two years’ supervised probation subject to the agreed-upon conditions set forth above. Respondent shall pay $900 in costs and disbursements pursuant to. Rule 24, RLPR.

BY THE COURT:

Alan C. Page Associate Justice


author: GILBERT, Justice.

text:
    STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Respondent, v. GREAT WEST CASUALTY COMPANY, Petitioner, Appellant.
    No. C9-00-566.
    Supreme Court of Minnesota.
    April 5, 2001.

      Stempel & Associates, Michael W. Low-den, Hopkins, for appellant.
    Meagher & Geer, P.L.L.P., William M. Hart, Melissa Dosick Riethof, Minneapolis, for respondent.
   OPINION

GILBERT, Justice.

This case involves a dispute between two insurance companies regarding the Minnesota No Fault Automobile Insurance Act (“No Fault Act”) indemnification provision, which is contained in Minn.Stat. § 65B.53, subd. 1 (2000). Great West Casualty Company, the insurer of a Nebraska commercial trucking company, appeals from the court of appeals’ holding that section 65B.53, subdivision 1 requires Great West to indemnify State Farm Mutual Automobile Insurance Company for basic economic loss benefits State Farm paid to its Minnesota policyholder as a result of an accident that occurred between the Minnesota and Nebraska policyholders on Nevada roads. Great West argues in the alternative that even if Minnesota’s statute requires indemnification, Nevada law, which has no motor vehicle indemnity statute, governs this case under a choice-of-law analysis. Because the accident occurred outside Minnesota, we conclude that Minnesota’s No Fault Act does not require Great West to indemnify State Farm based on the Nebraska insurance policy Great West issued to its nonresident policyholder. We therefore reverse.

The facts of this case are not disputed. On October 29, 1996, Mark Anderson, a Minnesota resident, was driving his pickup truck home to Minnesota from California. At about 10:30 p.m., Anderson was driving on Interstate Highway 80 in Lander County, Nevada when a semi-tractor trailer driven by professional truck driver Larry Thiemann and owned by Hollis Trucking Company rear-ended Anderson’s automobile. Anderson suffered extensive injuries.

At the time of the accident, Anderson was domiciled in Minnesota and had an insurance policy issued by State Farm. In contrast, Hollis Trucking’s principal place of business was Nebraska, Thiemann was domiciled in Nebraska, and Hollis had a commercial lines insurance policy issued by Great West Casualty Company in Nebraska. Great West is licensed to write insurance in Minnesota and has filed Motor Carrier Certificates of Insurance in both Minnesota and Nebraska in compliance with Minn.Stat. § 65B.50, subd. 1 (2000) and Neb.Rev.Stat. § 60-529 (2000). Nevada does not require insurers to file a certification of coverage in most circumstances. Nev.Rev.Stat. § 482.390 (1999).

Under Minnesota’s No Fault Act, State Farm paid Anderson no-fault benefits totaling $43,015.53 for medical expenses and lost wages. State Farm then sought indemnity for those payments from Great West under Minn.Stat. § 65B.53, subd. 1, which requires reparation obligors providing residual liability coverage on commercial vehicles to indemnify reparation obligors paying no-fault benefits if negligence in the operation of the commercial vehicle caused the injury. This provision can only be enforced through binding arbitration. Minn.Stat. § 65B.53, subd. 4 (2000).

Great West refused to submit to arbitration. As a result, State Farm petitioned Hennepin County District Court for an order compelling Great West to participate in binding arbitration. In response, Great West claimed that it was not obligated to arbitrate because, under these facts, it is not a “reparation obligor” within the meaning of section 65B.53, subdivision 1 and therefore has no duty to indemnify State Farm. Even if Minnesota law would require Great West to indemnify State Farm, Great West argued that Nevada law, which does not include an indemnification statute comparable to Minn.Stat. § 65B.53, subd. 1, governs. The district court granted State Farm’s motion, determining that Minnesota law applied instead of Nevada law and that “[njothing in Minn. Stat. § 65B.53 limits State Farm to indemnification only for accidents occurring within the State of Minnesota.” The court of appeals denied Great West’s subsequent petition for intermediate discretionary review of the order compelling arbitration.

Great West then submitted to arbitration, where it was found that Thiemann was 70% at fault for the accident. Upon entry of judgment on the arbitration award in favor of State Farm, Great West appealed to the court of appeals. The court affirmed, holding that Minnesota law applies and that Minn.Stat. § 65B.53, subd. 1 requires Great West to indemnify State Farm because the section “includes no language restricting it to accidents in Minnesota” and no other statute precludes the application of section 65B.53, subdivision 1 to accidents that occurred outside Minnesota. State Farm Mut. Auto. Ins. Co. v. Great W. Gas. Go., 615 N.W.2d 871, 874 (Minn.App.2000).

On appeal, we are asked to determine whether the lower courts correctly determined that Minn.Stat. § 65B.53, subd. 1 requires Great West to indemnify State Farm. This application of the law to a particular set of facts is a question of law, which we review de novo. Morton Bldgs., Inc. v. Comm’r of Revenue, 488 N.W.2d 254, 257 (Minn.1992).

Before determining whether Minnesota law or Nevada law applies, the threshold question is whether there is a conflict between those laws that would affect the outcome of this case. Myers v. Gov’t Employees Ins. Co., 302 Minn. 359, 363, 225 N.W.2d 238, 241 (1974). Nevada has not enacted a no-fault act and Nevada statutes contain no counterpart to Minn. Stat. § 65B.53, subd. 1. See Maxwell v. Allstate Ins. Co., 102 Nev. 502, 728 P.2d 812, 813 (1986). However, this conflict is outcome determinative only if Minnesota’s law actually requires Great West to indemnify State Farm and Nevada law does not. See Blarney v. Brown, 270 N.W.2d 884, 889-90 (Minn.1978) (disposing of conflict of law issue on grounds of statutory interpretation because the conclusion that Minnesota’s Civil Damages Act did not apply to Wisconsin resident rendered Wisconsin law controlling and made analysis of choice-influencing considerations unnecessary); overruled on other grounds, West Am. Ins. Co. v. Westin, Inc., 387 N.W.2d 676, 679-80 (Minn.1983); cf. Nodak Mut. Ins. Co. v. Am. Family Mut. Ins. Co., 604 N.W.2d 91, 93-4 (Minn.2000) (noting that a choice of law analysis was necessary where the interpretation of Minnesota and North Dakota laws was clear and there was an obvious outcome determinative conflict between the states’ laws). We therefore begin with the statutory interpretation question.

Minnesota Statutes § 65B.53, subd. 1, which is the indemnity provision on which State Farm relies to obtain payment from Great West, states:

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 obligor providing residual liability coverage on a commercial vehicle of more than 5,500 pounds curb weight if negligence in the operation, maintenance or use of the commercial vehicle was the direct and proximate cause of the injury for which the basic economic loss benefits were paid or payable to the extent that the insured would have been liable for damages but for the deduction provisions of section 65B.51, subdivision 1.

Minnesota Statutes § 65B.53, subd. 4 provides that this right of indemnity is enforceable “only through mandatory good-faith and binding arbitration procedures ⅜ ⅜ *»

Great West agrees that State Farm is a reparation obligor that paid basic economic loss benefits and that Thiemann was driving a commercial vehicle of more than 5,500 pounds curb weight, and it does not dispute the arbitrator’s finding that Thiemann was 70% responsible for the accident. Given these admissions, both the district court and court of appeals concluded that Great West is obligated to indemnify State Farm simply because section 65B.53 does not explicitly state that it does not apply where the commercial insured was a nonresident policyholder involved in an out-of-state accident. Although the lower courts were correct in noting that section 65B.53, subdivision 1 does not expressly state the scope of the indemnification requirement, provisions of the No-Fault Act should not be construed in isolation from related sections of the Act. Western Nat’l Mut. Ins. Co. v. State Farm Ins. Co., 374 N.W.2d 441, 445 (Minn.1985). For example, the very use of the term “reparation obligor” in section 65B.53, subdivision 1 implicates at least Minn.Stat. § 65B.43, subd. 9, which defines this term. Accordingly, we turn to other provisions of the No Fault Act to address Great West’s argument that in this case it is not a reparation obligor obligated by section 65B.53, subdivision 1 to submit to arbitration and indemnify State Farm.

Although Great West does not dispute that it is an insurer, it argues that it is not a reparation obligor in this situation because it is not “obligated to provide the benefits required” by the No-Fault Act. See Minn.Stat. § 65B.43, subd. 9. We agree.

Under the various subdivisions of Minn. Stat. § 65B.49 (2000), reparation obligors are required to provide basic economic loss coverage, residual liability coverage, and underinsured and uninsured motorist coverages. However, section 65B.49 must also be interpreted in conjunction with the following statute, Minn.Stat. § 65B.50, subd. 1, which provides that:

Every insurer licensed to write motor vehicle accident reparation and liability insurance in this state shall, * * * as a condition to such licensing, file with the commissioner and thereafter maintain a written certification that it will afford at least the minimum security provided by section 65B.49 to all policyholders, except that in the case of nonresident policyholders it need only certify that security is provided with respect to accidents occurring in this state.

(Emphasis added.) Furthermore, Minn. Stat. § 65B.50, subd. 2 (2000) states that “every contract of liability insurance for injury, wherever issued, * * * includes basic economic loss benefit coverages and residual liability coverages required by sections 65B.41 to 65B.71, while the vehicle is in this state.” (Emphasis added.)

Reading subdivisions 1 and 2 of section 65B.50 in conjunction with the definition of “reparation obligor” in section 65B.43, subdivision 9, one of two factors is required for an insurer to be considered a reparation obligor under Minnesota’s No-Fault Act: the first is the issuance of a Minnesota insurance policy to a Minnesota resident, and the second is the involvement of an insured motor vehicle in an accident occurring within Minnesota. Neither factor is present with regard to Great West in the instant case because Great West issued a Nebraska policy to a Nebraska policyholder and the accident occurred in Nevada. Great West therefore is not a “reparation obligor” under these facts and does not have a reparation obligor’s duty to indemnify State Farm pursuant to Minn. Stat. § 65B.53, subd. I.

Our holding in Western National Mutual Automobile Insurance Co. v. State Farm Insurance Co. is consistent with this construction of Minn.Stat. §§ 65B.50 and 65B.53, subd. 1, 374 N.W.2d 441 (Minn. 1985). In Western National, we determined that an out-of-state insurer licensed to do business in Minnesota was not liable to pay no-fault benefits to its insured passenger injured in a Minnesota accident where the insured’s vehicle was not in Minnesota. Id. at 444-45; accord Reed v. Cont’l W. Ins. Co., 374 N.W.2d 436, 438 (Minn.1985). In concluding that coverage followed the insured vehicle under Minn. Stat. § 65B.50, subd. 1 rather than the policyholder, we noted that a different conclusion would

impose on an insurer of vehicles owned and garaged by nonresidents in foreign states an unreasonable and economically heavy burden of being compelled to attempt to adjust premiums to reflect the highly unpredictable likelihood that the nonresident might be entitled to benefits under the Minnesota No Fault Act even if they entered this state by public transportation * ⅝ *.

Western National, 374 N.W.2d at 444.

State Farm argues that this policy consideration is irrelevant to the instant case because Western National involved the importation of economic loss coverage into a non-Minnesota contract. According to State Farm, section 65B.53 does not import additional coverage into Great West’s insurance contract with Hollis Trucking, which State Farm admits would be contrary to section 65B.50, but merely requires that the preexisting residual liability coverage in the insurance policy be invoked to indemnify State Farm. State Farm further argues that insurers such as Great West should be compelled to adjust policy premiums, regardless of the insured’s activities, simply because the insurance company is licensed to do business in Minnesota.

Despite these arguments, we find the reasoning in Western National applicable here. Indemnifying another insurer, like paying basic economic loss benefits, involves an outlay of money that affects premium schedules even though the sums will be paid to insurers rather than insureds. Furthermore, insurers of Minnesota policyholders necessarily charge premiums for no-fault coverage because Minnesota law requires its insurers to pay no-fault benefits regardless of whether there is any possibility of reimbursement. See Nodak, 604 N.W.2d at 95. Like the insurer in Western National, however, Great West had little reason to charge premiums based on the remote possibility of a duty to indemnify under Minnesota law. Thus, Minn.Stat. § 65B.50, subd. 1 protects insurers such as Great West from the unreasonable burden of adjusting premiums based on the “highly unpredictable likelihood” that they will be required to indemnify a Minnesota insurer even where the insured tortfeasor was not involved in an accident in Minnesota and did not contract for a Minnesota insurance policy. Western National, 374 N.W.2d at 444.

For these reasons, we hold that MinmStat. § 65B.53, subd. 1 does not require Great West, an insurer of a nonresident policyholder, to indemnify State Farm for basic economic loss benefits paid to its insured as a result of an out-of-state accident. Because Great West would have no duty to indemnify State Farm under Minnesota law, there is no outcome determinative conflict between the laws of Minnesota and Nevada and it is not necessary to complete the choice of law analysis. Accordingly, we reverse.

Reversed and remanded to the district court so that judgment may be entered in accordance with this opinion.

      . A "reparation obligor” is defined in Minnesota Statutes as "an insurer or self-insurer obligated to provide the benefits required by sections 65B.41 to 65B.71, including natural persons, firms, partnerships, associations, corporations, governmental units, trusts and syndicates.” Minn.Stat. § 65B.43, subd. 9 (2000).

      . Great West also argues that there is an outcome determinative conflict between Minnesota and Nevada law because Minneso-la has a 6-year statute of limitations on indemnity actions running from the date of the first benefit payment, while Nevada has a 2-year limitations period running from the date of the accident. Compare Metro. Prop. & Cas. Ins. Co. v. Metro. Transit Comm’n, 538 N.W.2d 692, 694 (Minn.1995) with State Farm Mut. Auto. Ins. Co. v. Wharton, 88 Nev. 183, 495 P.2d 359, 361 (1972). Here, State Farm brought its action seeking indemnity 29 months after the accident, so its action would be timely under Minnesota law but not under Nevada law. Nevada courts, however, abolished the contractual right to subrogation after Wharton was decided and the Nevada legislature has not established a statutory right to indemnification. Maxwell, 728 P.2d at 813. As a result, Nevada’s statute of limitations on indemnification actions is not dispos-itive if Nevada law is applicable because the Nevada law gives parties no substantive right to indemnity.

      . In addition to the indemnification requirement in Minn.Stat. § 65B.53, subd. 1, Minn. Stat. § 65B.49, subd. 3(2) (2000) states "A reparation obligor shall also be liable to pay sums which another reparation obligor is entitled to recover under the indemnity provisions of section 65B.53, subdivision 1.” This language does not add to our analysis because it merely reiterates that a reparation obligor may have indemnification responsibilities. Great West is not a reparation obligor; thus, section 65B.49, subdivision 3(2) does not require it to “pay sums * * ⅜ under the indemnity provisions of section 65B.53, subdivision 1.”


author: G. BARRY ANDERSON, Judge.

text:
    Tamia MOE, Relator, v. INDEPENDENT SCHOOL DISTRICT NO. 696, ELY, MINNESOTA, Respondent.
    No. C9-00-1605.
    Court of Appeals of Minnesota.
    March 27, 2001.

      William F. Garber, Education Minnesota, St. Paul, MN, (for relator).
    Scott C. Neff, Trenti Law Firm, Virginia, MN, (for respondent).
    Considered and decided by LANSING, Presiding Judge, ANDERSON, Judge, and HALBROOKS, Judge.
   OPINION

G. BARRY ANDERSON, Judge.

Respondent Independent School District No. 696 placed relator Tamia Moe on an approximately 15% unrequested leave of absence. Relator sought to exercise seniority rights pursuant to Minn.Stat. § 122A.40, subd. 11 (2000). Following a hearing, respondent determined that relator’s teaching schedule did not allow her to bump into supervisory assignments held by two less-senior teachers without compromising the educational needs of the district’s students. Because respondent did not err in applying the law and because the decision is supported by substantial evidence, we affirm.

FACTS

Relator, employed by respondent Independent School District No. 696 in Ely, Minnesota, is a continuing-contract art teacher who teaches both elementary and secondary students. Relator, the only art teacher in the district, has a “seniority date” of July 5,1994 and is ranked 38 of 40 teachers on respondent’s tenured seniority list. The district also employs 14 probationary teachers.

In response to a decline in enrollment and budget, respondent eliminated a 40 minute afternoon section of elementary art for the 2000-01 school year. Respondent proposed to place relator on an unrequested leave of absence (ULA) equal to about 65 minutes per day, or a .155 full-time equivalent (FTE). Relator requested and received a hearing before an independent hearing examiner.

At the hearing, relator contended that she was not the appropriate teacher to be placed on ULA because statutory bumping rights allowed her to take supervisory periods, such as lunch and study hall, from less-senior teachers. Relator argued that by changing her preparation and lunch schedule, she could assume the supervisory duties held by one or both of two less-senior probationary teachers. The less-senior teachers, relator contended, would become the appropriate teachers to be placed on ULA.

The independent hearing officer found that relator’s elementary and secondary, teaching schedule did not coincide with the periods supervised by the less-senior teachers. The hearing officer concluded that allowing relator to bump into one of the less-senior teachers’ supervisory periods would leave students unattended for several minutes. The hearing officer determined that scheduling must meet the best interests of the students and that those interests could not be discounted in favor of furthering seniority rights. The school board adopted the hearing officer’s findings and conclusions and further concluded that, based on the proportion of time relator taught in the secondary school, she would not be entitled to sufficient supervisory time there. Respondent placed relator on ULA to the extent of .155 FTE.

Relator proceeds by writ of certiorari, alleging legal error and a result based on insufficient evidence.

ISSUES
I. Did respondent base the decision to place relator on unrequested leave of absence on an erroneous theory of law?
II. Is there substantial evidence in the record to support respondent’s decision to place relator on unrequested leave of absence?

ANALYSIS

Relator argues that respondent applied an erroneous theory of law and reached a conclusion that was not supported by the evidence by placing her on ULA. Relator contends that the evidence shows she is, pursuant to Minn.Stat. § 122A.40, subd. 11(a) (2000), entitled to bump less-senior teachers from supervisory positions, such as lunch room or study hall, and that such positions were available.

The nature of judicial review in a certiorari proceeding is limited. The school board’s decision is not reviewed de novo and will not be set aside unless the decision is fraudulent, arbitrary, unreasonable, not supported by substantial evidence in the record, not within the school board’s jurisdiction, or based on an erroneous theory of law. Ganyo v. Independent Sch. Dist. No. 832, 311 N.W.2d 497, 500 (Minn. 1981).

I.

We-first consider whether respondent applied an erroneous theory of law in determining the scope of relator’s contractual bumping rights. Respondent concluded that, based on past district practice, relator was entitled to bump into existing supervisory positions of less-senior teachers. But respondent found, considering relator’s teaching schedule, that she could not bump into an existing supervisory position without leaving students unattended for several minutes. Respondent decided that because the interests of the district’s students would not be served by leaving them unattended, no existing position was available to relator.

Because relator’s contract does not contain a negotiated unrequested leave provision, her situation is governed by state statute. Minnesota law provides that boards of education may place teachers on unrequested leaves of absence as needed to respond to declining enrollment or a reduced budget. Minn.Stat. § 122A.40, subd. 11. Moreover, a teacher with continuing contract rights must not be placed on ULA while probationary teachers are retained “in positions for which the teacher who has acquired continuing contract rights is licensed * * Id., subd. 11(a). Case law interpreting Minn.Stat. § 122A.40 has further clarified the scope of bumping rights.

If a senior teacher whose position is discontinued is licensed for a position held by a less-senior teacher, the senior teacher is entitled to bump the less-senior teacher directly or through a realignment of other staff positions, provided that the senior teacher is appropriately licensed for the position sought. Kvernmo v. Independent Sch. Dist. No. 403, 541 N.W.2d 620, 621 (Minn.App.1996), review denied (Minn. Mar. 19, 1996); see also Beste v. Independent Sch. Dist. No. 697, 398 N.W.2d 58, 61 (Minn.App.1986) (distinguishing bumping from realignment; the latter requires reassignment of a second senior teacher to accommodate the first senior teacher).

Bumping rights do not, however, require districts to make unlimited staffing changes. The demanded position must be an existing position; a teacher has no right to ask the school board to create one. In re Independent Sch. Dist. No. 318, 435 N.W.2d 81, 84 (Minn.App.1989). Relator is a licensed, contract art teacher with seniority over two contract teachers and fourteen probationary teachers. Relator had a right to bump into their schedules for existing art-teaching positions. The school district, however, did not have any other art positions available. As a result, relator sought to bump into a supervisory position, such as a study hall or lunchroom assignment.

Because a teacher cannot be “licensed” to supervise, “seniority rights normally do not attach for the supervision of study halls.” Kvemmo, 541 N.W.2d at 621 and n. 1. But whether seniority rights attach to a particular position, including supervision of study halls, turns on the past practice of the school district. Id. at 622; see also Foley Educ. Ass’n v. Independent Sch. Dist. No. 51, 353 N.W.2d 917, 924 (Minn.1984) (recognizing the importance of past practice and determining that school district’s departure from past practice of assigning licensed teachers to supervise study halls constituted an unfair labor practice).

In this case, the past practice of the school district was to allow licensed teachers in the secondary school to have supervisory assignments from time to time. Past practice shows those assignments were 50 minutes in length and available only in the secondary school. Thus, relator had a right to bump into any less-senior secondary school teacher’s assignment for which relator was licensed, including the right to bump into, at most, 50 minutes of a less-senior teacher’s supervisory assignment in the secondary school.

But “[t]he exercise of school management prerogatives * * * may limit the availability of positions and the possibilities for seniority bumping or realignment.” Kvemmo, 541 N.W.2d at 622. Even if a teacher has a contractual right to bump into supervisory duties, a school board must balance the feasibility of doing so with the educational interests of the school children:

The policy basis for according discretion to school boards is premised not on the fact that school board discretion is an end unto itself, but rather that this discretion be exercised so as to advance and protect the educational interests of school children.

In re Independent Sch. Dist. No. 318, 435 N.W.2d at 84-85 (applying policy in a bumping situation and citing Strand v. Special Sch. Dist. No. 1, 392 N.W.2d 881, 885 (Minn.1986) (holding that in realignment situations, “the school district’s needs reflecting the welfare of the students and public” must be considered) and Westgard v. Independent Sch. Dist. No. 715, 400 N.W.2d 341, 345 (Minn.App.1987) (discussing school district’s needs as a factor in a realignment context), review denied (Minn. Apr. 17, 1987)). Accordingly, as respondent concluded, relator was entitled to bump into an existing secondary-school supervisory position held by a less-senior teacher so long as the bump did not require scheduling adverse to the interests of the district’s students. Because respondent correctly assessed the extent of relator’s bumping rights, we hold that respondent did not base its conclusion on an erroneous theory of law.

II.

Relator next argues that respondent has not shown, by substantial evidence, that if she bumped into an existing less-senior teacher’s supervisory assignment, the bump would be adverse to student interests. Respondent counters that, given relator’s teaching schedule, there were no supervisory assignments held by less-senior teachers into which relator could bump without leaving students unattended for brief periods of time.

In 2000-01, relator’s art-teaching schedule, reflecting the .155 FTE reduction, is:

AM 8:10 to 9:00 Secondary School
9:10 to 9:40 Elementary School
9:45 to 10:15 Elementary School
10:20 to 10:50 Elementary School
10:50 to 11:40 Preparation Time
11:40 to 12:12 Lunch
PM 12:12 to 1:02 Secondary School
1:06 to 1:56 Secondary School

Only two less-senior teachers hold 2000-01 supervisory assignments. Respondent assigned secondary-school math teacher Thomas Maloney to supervise study hall on Mondays, Wednesdays, and Fridays from 10:52 to 11:42. On Tuesdays and Thursdays, Maloney supervises a lunchroom from 10:48 to 11:18. Secondary-school science teacher Todd Hohenstein’s supervisory assignment is scheduled from “11:40 to 12 — approximately 12:15.” Respondent also considered: (1) respondent provides teachers with a duty-free lunch period of at least 30 minutes; (2) relator’s contract requires that the district give her preparation time equal to 20% of teaching time; (3) students are allowed four minutes to pass between classes; and (4) the elementary and secondary schools are in separate buildings.

Comparing relator’s schedule with the less-senior teachers’ supervisory assignments shows:

(1) Maloney’s Tuesday/Thursday lunchroom duty overlaps relator’s last morning elementary art class by two minutes. Relator could not bump into this assignment without leaving her elementary art class at least two minutes early or arriving at Maloney’s lunchroom duty at least two minutes late.
(2) Maloney’s Monday/Wednesday/Friday study-hall duty overlaps relator’s lunch by two minutes. Relator could bump into this partial assignment, but only by reducing or rescheduling her preparation and lunch times.
(3) Hohenstein’s daily supervisory duty overlaps relator’s first afternoon secondary-school art class by three minutes. Relator could not “bump” into this assignment without leaving the supervisory duty at least three minutes early or arriving at least three minutes late to her secondary-school art class.

The school superintendent testified that if the district were required to cut into other teachers’ time, or forced to provide supervisory time that is not consistent with existing schedules, the result would be an “unreasonable mess” and that the district could not “afford to diminish the quality of education” provided to students. The supervision of students at all times is a legitimate school-management concern that sufficiently supports respondent’s decision in this case.

Relator, however, contends that by shortening her lunch, she could bump into Ma-loney’s Monday/Wednesday/Friday study hall. Alternatively, she contends, by switching her lunch and preparation times, she could bump into Hohenstein’s supervisory duty, which she alleges actually ends at 12:12, not 12:15, based on her own secondary-school schedule. Relator also suggests that the less-senior teachers could “cover” for her for the few minutes she may need to arrive late to or leave early from the supervisory assignments. But there is no evidence in the record that Hohenstein’s supervisory schedule actually ends at 12:12. Additionally, and significantly, the partial bumping and covering arrangements relator proposes do not result in the desired cost savings to the district because the less-senior teachers must be paid to remain at school to fulfill portions of the supervisory assignments.

Relator argues that Westgard “makes it explicit that the district must attempt to create a schedule which will accommodate the most senior teachers” and contends that the school did not make the required attempt to shift positions. Though West-gard recognized the statutory right to bump, the decision to reverse and reinstate the terminated teacher turned on the district’s failure to consider realignment. 400 N.W.2d at 345-46. As Westgard explains, realignment involves the shifting of several licensed positions to accommodate a senior teacher. Id. at 345. Because relator, licensed only to teach art, could not have been reassigned a different licensed position, we reject this argument.

Finally, to the extent that relator argues she is entitled to bump into parts of both Maloney’s and Hohenstein’s assignments, she in essence asks that the school district craft a position for her from two other positions. The argument that a school district must create a position or move a class time contrary to student needs to accommodate bumping has been rejected by this court. See In re Independent School Dist. No. 818, 435 N.W.2d at 84-85 (concluding that district was not required to move a Title I class from morning to afternoon to allow teacher placed on ULA to exercise bumping rights).

Consequently, relator has not pointed to an existing position into which she can bump without leaving students unattended, a situation that respondent reasonably seeks to avoid. We conclude that there is substantial evidence to support respondent’s conclusion that there is no existing position into which relator can bump. Accordingly, we hold that respondent correctly determined that relator is the correct teacher to be placed on unrequested leave of absence.

DECISION

Respondent school district did not apply an erroneous theory of law by concluding that, consistent with past district practice, relator had a right to bump into existing supervisory assignments held by less-senior teachers so long as the exercise of that right did not compromise the students’ educational needs or the district’s supervisory responsibilities. Substantial evidence that the exercise of relator’s bumping rights would leave students unattended supported respondent’s decision to place relator on unrequested leave of absence.

Affirmed.

      . In 1998, the legislature recodified Minn. Stat. § 125.12 as Minn.Stat. § 122A.40. See 1998 Minn. Laws ch. 397 (recodification). Consequently, pre 1998 case law in this area references the earlier version of the statute.

      . Relator teaches ¾ time in the secondary school, and the parties dispute the number of minutes of supervisory time relator is entitled to bump. Respondent concluded that a full-time secondary-school teacher would only be entitled to a supervisory assignment equivalent to 20% of teaching time (50 minutes) and therefore relator, teaching ⅜ time in the secondary school, is only entitled to 30 minutes of secondary-school supervisory time. A 20% supervisory assignment is consistent with past practice of full-time secondary-school teachers, but there is no evidence in the record concerning any past practice by the district of granting a pro-rated share of supervisory time to teachers who, like relator, instruct in both the elementary and secondary schools. We do not address the percentage of relator’s entitlement, however, because respondent’s decision rested on schedule incompatibility.