author: TOUSSAINT, Chief Judge.

text:
    In re the Marriage of Deborah K. MINGEN, Petitioner, Appellant, v. Thomas M. MINGEN, Respondent.
    No. C6-03-152.
    Court of Appeals of Minnesota.
    June 17, 2003.

      John T. Burns, Jr., Sheridan & Burns, Burnsville, MN, for appellant.
    Timothy J. McLarnan, McLarnan, Han-naher & Skatvold, Moorhead, MN, for respondent.

      Considered at Special Term and decided by TOUSSAINT, Chief Judge; MINGE, Judge; and HUDSON, Judge.
   SPECIAL TERM OPINION

TOUSSAINT, Chief Judge.

This appeal was filed by mail on January 22, 2003. Appellant Deborah K. Mingen seeks review of an amended judgment entered on August 16, 2002, that modifies respondent Thomas M. Mingen’s spousal-maintenance obligation. The underlying August 16, 2002, order directs entry of an amended judgment. After entry of the August 16 judgment, no postdecision motions were made until October 23, 2002, when appellant served and filed a motion to amend the August 16 order. On November 20, the district court issued an order denying appellant’s motion.

Because it appeared that the 60-day period to appeal the August 16 judgment expired before appellant brought her motion to amend on October 23, this court questioned whether the appeal is timely. The parties submitted memoranda.

DECISION

An appeal may be taken from an order that grants or denies modification of custody, visitation, maintenance, or child-support provisions in an existing judgment or decree. Minn. R. Civ.App. P. 103.03(h). An appealable order is not rendered non-appealable by language directing the entry of judgment. Marzitelli v. City of Little Canada, 582 N.W.2d 904, 906 (Minn.1998). The August 16 order modifying respondent’s maintenance obligation was appeal-able even though the order directs entry of judgment.

Unless a different time is provided by statute, an appeal may be taken from an appealable order within 60 days after service by any party of written notice of its filing. Minn. R. Civ.App. P. 104.01, subd. 1. Neither party served a written notice of filing of the August 16 order. But another appellate timing rule provides that no order made prior to the entry of judgment shall be appealable after the expiration of the time to appeal from the judgment. Minn. R. Civ.App. P. 104.02.

Under rule 104.02, expiration of the time to appeal the judgment precludes appellate review of the underlying order for judgment, even if an appeal from the order otherwise would have been timely. Singer v. City of Minneapolis, 586 N.W.2d 804, 806 (Minn.App.1998). Appellant argues that Singer is inconsistent with Marzitelli because in Marzitelli, the court held that the order at issue was appealable despite the district court’s express direction for entry of judgment. Marzitelli, 582 N.W.2d at 906. But Marzitelli does not address the effect of rule 104.02 on the time to appeal the order. In accordance with rule 104.02 and Singer, appellate review of the August 16 order is precluded if the time to appeal the August 16 judgment expired before this appeal was filed. See Harcum v. Benson, 135 Minn. 23, 24, 160 N.W. 80, 80 (1916) (dismissing appeal from prejudgment order denying new trial because appeal was not taken until after time to appeal judgment expired).

Unless a different time is provided by statute, an appeal may be taken from a judgment within 60 days after its entry. Minn. R. Civ.App. P. 104.01, subd. 1. If any party serves and files a proper and timely motion of a type specified in the rule, the “time for appeal” of the order or judgment that is the subject of the motion runs for all parties from the service by any party of notice of filing of the order disposing of the last such motion outstanding. Id., subd. 2. Unless extended by the filing of a proper and timely postdecision motion, the time to appeal the August 16 judgment expired on October 15, which was 60 days after judgment was entered.

A timely motion is proper if the motion is made in compliance with the rules of civil procedure and if, on the face of the document, the party has filed a motion that is expressly allowed under Minn. R. Civ.App. P. 104.01, subd. 2. Madson v. Minn. Mining & Mfg. Co., 612 N.W.2d 168, 171-72 (Minn.2000). The enumerated motions that extend the appeal time include motions to amend or make findings of fact under Minn. R. Civ. P. 52.02 and to alter or amend the judgment under rule 52.02. Minn. R. Civ.App. P. 104.01, subd. 2(b), (c). Although appellant’s postdecision motion does not cite rule 52.02, the motion expressly seeks amendment of the August 16 order. Appellant’s motion meets the Madson requirements for a “proper” motion. But the motion did not affect the time to appeal the August 16 judgment unless it was also “timely.”

A notice of motion to amend shall be served within 80 days after a general verdict or service of notice by a party of the filing of the decision or order. Minn. R. Civ. P. 52.02, 59.03. Neither party served notice of filing of the August 16 order. But appellant’s motion to amend was not served and filed until October 23, which was after the expiration of the 60-day period to appeal the August 16 judgment.

The district court’s jurisdiction to determine a post trial motion does not extend beyond the running of the time for appeal. Marzitelli, 582 N.W.2d at 907. Because Minn. R. Civ.App. P. 104.01, subd. 2, was not in effect at the time Marzitelli was decided, parties had to file timely appeals and then apply to the appellate court for a stay of the appeal to allow the district court to decide postdecision motions. Huntsman v. Huntsman, 633 N.W.2d 852, 855 (Minn.2001). Rule 104.01, subdivision 2, was promulgated to solve the problem the court confronted in Marzitelli. Huntsman, 633 N.W.2d at 855. Under rule 104.01, subdivision 2, once the time to appeal has been “tolled” by a proper and timely postdecision motion, the appeal time commences upon a party’s service of notice of filing of the order disposing of the last outstanding postdecision motion. Id.

Appellant’s motion to amend could not toll the “time for appeal” of the underlying August 16 judgment under rule 104.01, subdivision 2, because the time for appeal of the August 16 judgment had run by the time the motion to amend was served and filed. Rule 104.01, subdivision 2, does not operate to revive an expired appeal period. Appellant’s motion to amend was not “timely” within the mean-* ing of rule 104.01, subdivision 2, because, due to the expiration of the time to appeal the August 16 judgment, the district court lacked jurisdiction to consider the motion.

Because appellant’s motion to amend did not extend the appeal time, the time to appeal the August 16 judgment expired before this appeal was filed, and appellate review of the August 16 order is precluded under Minn. R. Civ.App. P. 104.02. We must dismiss this untimely appeal. See Minn. R. Civ.App. P. 126.02 (prohibiting appellate court from extending time to file notice of appeal); Township of Honner v. Redwood County, 518 N.W.2d 639, 641 (Minn.App.1994) (holding that court of appeals lacks jurisdiction to consider untimely appeal), review denied (Minn. Sept. 16, 1994).

Appeal dismissed.


source: Caselaw Access Project

author: SCHUMACHER, Judge.

license: Public Domain

text:
    TIG INSURANCE COMPANY, et al., Respondents, v. Christopher W. ANDERSON, et al., Appellants.
    No. C5-02-1413.
    Court of Appeals of Minnesota.
    March 11, 2003.

      Mathew M. Meyer, Moss Barnett, P.A., Minneapolis, MN, for respondents.
    James B. Wallace, Robert D. Tiffany, Park Rapids, MN, for appellants.
    Considered and decided by HUDSON, Presiding Judge, SCHUMACHER, Judge, and HALBROOKS, Judge.
   OPINION

SCHUMACHER, Judge.

Appellants Christopher W. Anderson, Warren Anderson, and Linda P. Anderson argue the district court erred in granting the motions for partial summary judgment of respondents TIG Insurance Company and GenRoe, Inc., d/b/a Complete Title Service of Walker & Park Rapids, and awarding attorney fees. We affirm.

FACTS

In early 1992, W. Anderson assisted his son, C. Anderson, in purchasing property from Julia R. Turner in Cass County near the Northern Lights Casino for the purpose of opening a restaurant. Turner required that the purchase be by way of a contract for deed and that W. Anderson sign as a purchaser on the contract. On March 31, 1992, a contract for deed was executed conveying the property to W. Anderson.

C. Anderson and W. Anderson constructed a restaurant on the property. C. Anderson obtained a loan from First National Bank of Walker (Walker Bank) and W. Anderson co-signed as additional obli-gor. The loan was to finance the construction of the restaurant, and upon completion of the construction, the loan was to be refinanced. C. Anderson and W. Anderson signed a promissory note for $57,000 in favor of Walker Bank and simultaneously gave Walker Bank a mortgage in that amount as security for the loan. The mortgage was duly registered and recorded.

At that same time, L. Anderson and W. Anderson conveyed an undivided 1/2 interest in the property to C. Anderson and retained the other 1/2 undivided interest jointly as husband and wife. In June 1993, C. Anderson purchased fire insurance on the restaurant from Secura Insurance Company, listing himself and “C W Burger” (the name of the restaurant) as the insured(s) and listing Walker Bank as the mortgagee. W. Anderson was not listed as an insured on the policy.

On March 7, 1994, a fire destroyed the restaurant. The investigation of the fire resulted in criminal arson charges being brought against C. Anderson. He agreed to enter an Alford plea to the charge of “negligent fire” in exchange for dismissal of other charges. Prior to this time, Secu-ra paid Walker Bank the amount of its mortgage, $58,696.22, in exchange for assignment of the mortgage and promissory note of the Andersons per the standard mortgage clause set forth in the insurance policy. Walker Bank sent a letter to C. Anderson and W. Anderson at W. Anderson’s address, stating that Secura had paid the.full amount of the mortgage in exchange for the assignment.

C. Anderson commenced a- lawsuit against Secura, seeking a declaratory judgment that the fire damage was covered under the policy and claiming a breach of the insurance contract. W. Anderson did not join in the lawsuit. Sec-ura alleged- that no coverage was owed to C. Anderson due to an exclusion in the policy for damage caused by the “dishonest or criminal acts” of the insured. After a court trial, the district court issued judgment against C. Anderson, finding that the fire and property loss were caused by the “dishonest or criminal acts” of C. Anderson and he was therefore not owed coverage.

While C. Anderson’s lawsuit was still pending, he placed the property on the market. A company called JDOB, Inc. purchased the property. GenRoe was retained to perform a title search in connection with the purchase. GenRoe failed to discover the mortgage listing Walker Bank as mortgagee. The closing on the property occurred on August 16, 1996. Several documents were executed. Turner, still holding the contract for deed, executed a warranty deed conveying an undivided 1/2 interest to C. Anderson and the same to W. Anderson. L. Anderson, C. Anderson, and W. Anderson executed a warranty deed in favor of JDOB, conveying the property pursuant to the purchase agreement. Some of the proceeds from the sale were used to pay off the remainder of Turner’s contract for deed. The Andersons did not reveal the existence of the mortgage. JDOB thereafter transferred the property to Centennial Bank.

Upon learning of the sale of the property, Secura sought to foreclose on the mortgage. In response to Secura’s demand on the mortgage, GenRoe’s failure to discover the mortgage was revealed. GenRoe tendered the claim to its errors and omissions carrier, respondent TIG. Eventually, TIG and GenRoe settled with Secura and Centennial Bank by paying $45,000 and taking an assignment of the note and mortgage from Secura as well as an assignment of Centennial Bank’s claim against the Andersons for breach of covenant against encumbrances.

The district court granted TIG and Gen-Roe’s motions for summary judgment against C. Anderson and W. Anderson jointly and severally on the breach of contract claim and awarded $52,137.41, plus interest and attorney fees. The court also awarded judgment in the amount of $45,000 against L. Anderson, C. Anderson, and W. Anderson on the breach of warranty against encumbrances. The Andersons appeal from the judgment.

ISSUES

1. Did the district court err in concluding that TIG and GenRoe were entitled to judgment against W. Anderson and C. Anderson for the full value of the promis-, sory note?

2. Did the district court err in concluding that TIG’s and GenRoe’s enforcement of the promissory note was not barred as an unasserted compulsory counterclaim in C. Anderson’s lawsuit against Secura?

3. Did the district court abuse its discretion in awarding attorney fees?

ANALYSIS

1. The district court’s decision with respect to TIG’s and GenRoe’s ability to recover on the promissory note and the extent of that recovery js a legal determination, which this court reviews de novo. Hubred v. Control Data Corp., 442 N.W.2d 308, 310 (Minn.1989). If the district court grants summary judgment based on the application of the law when no material facts are in dispute, the result is a legal determination to which this court owes no deference. Lefto v. Hoggsbreath Enters., Inc., 581 N.W.2d 855, 856 (Minn.1998).

The Andersons argue that TIG’s and GenRoe’s lawsuit is a subrogation claim and accordingly is subject to the limitations attendant to subrogation claims. TIG and GenRoe argue that their claims are contractual in nature, based on the assignments of the note and mortgage. The district court found that TIG and Gen-Roe could recover the full amount under the note from W.. Anderson and C. Anderson, the co-obligors on the note, because TIG and GenRoe had taken a valid assignment of the note.

We agree with the district court’s analysis. Secura took a valid assignment of Walker Bank’s mortgage and promissory note when it paid Walker Bank under the standard mortgage clause. The Secu-ra policy language conforms to the Minnesota Standard Fire Insurance Policy, which was enacted by the legislature to establish policy language requirements to protect the public from “ingeniously worded” conditions and exclusions designed to afford less protection than would be- reasonably expected. Watson v. United Servs. Auto. Assoc., 566 N.W.2d 683, 690 (Minn.1997) (quotation omitted).

[Wlhenever this company shall be liable to a mortgagee or vendor for any sum for loss under this policy * * * this company shall elect by itself, or with others, to pay the mortgagee or vendor the full amount secured by such mortgage or contract for deed, then the mortgagee or vendor shall assign and transfer to the company the mortgagee’s or vendor’s interest, upon such payment, in the said mortgage or contract for deed together with the note and debts thereby secured.

Minn.Stat. § 65A.01, subd. 3 (2002).

Accordingly, the Secura policy language conforms to the statute:

If we pay the mortgage holder for any loss or damage and deny payment to you because of your acts or because you have failed to comply with the terms of this Coverage Part:
⅜ ⅜: ⅜ ⅝
At our option, we may pay to the mortgage holder the whole principal on the mortgage plus any accrued interest. In this event, your mortgage and note will be transferred to us and you will pay your remaining mortgage debt to us.

This policy language creates a contractual right to assume any and all benefits flowing from the assigned note and mortgage. The legislature has explicitly authorized and validated assignments such as Secu-ra’s under Minn.Stat. § 65A.01, subd. 3. The Andersons’ argument that Secura had only a subrogation claim is without merit.

W. Anderson argues that he is an “innocent insured” and not subject to Secu-ra’s “subrogation” claim. He asserts that he had an insurable interest in the realty at the time of loss, and therefore he should occupy a “co-insured” status under C. Anderson’s policy with Secura. As a co-insured, and an innocent insured, W. Anderson argues that a subrogation claim against him must be barred.- W. Anderson claims that he should be granted “co-insured” status pursuant to this court’s decision in United Fire & Casualty Co. v. Bruggeman, 505 N.W.2d 87. (Minn.App. 1993) review denied (Minn. Oct. 19, 1993).

In Bruggeman, this court adopted the reasoning from other jurisdictions prohibiting a subrogation claim against a negligent tenant for fire damage to the realty, the rationale being that an insurer, by agreeing to insure rental property, is on notice that the tenant will be occupying the premises, and thus, the insurer has actually insured the precise risk that materialized. Id. at 89. Additionally, the tenant and landlord have a shared proprietary interest in the realty, and the tenant pays the premiums, at least indirectly, to insure the realty. Id. These factors led this court to set forth a limited legal fiction wherein the tenant is granted a co-insured (or additional insured) status on the landlord’s insurance policy for purposes of negating the insurer’s subrogation claim against the negligent tenant for damages to the realty. Id.

Bruggeman does not apply to the case before us. As set forth above, TIG’s and GenRoe’s claims against the Andersons are not subrogation claims. Bruggeman specifically limited its application to subrogation claims. Id. at 89-90. The supreme court acknowledged that limitation in Osborne v. Chapman, 574 N.W.2d 64, 66 (Minn.1998), declining to directly decide whether to adopt or reject the Bruggeman doctrine because the Osborne case did not involve subrogation. Additionally, there is nothing in the record indicating that W. Anderson contributed to the premiums insuring the realty at the time of loss, nor is there anything in the record to suggest that Secura undertook the risk of insuring W. Anderson as of the time of loss. Cf. Bruggeman, 505 N.W.2d at 89 (“The insurer knows the risk it is undertaking when insuring a rental property.” The insurer knows the property will be rented and tenants sometimes negligently start fires; the insurer has calculated that risk into the premium charged, and the tenant’s rent pays the premium). Accordingly, W. Anderson’s attempts to utilize the Brugge-man doctrine to establish a co-insured status under C. Anderson’s policy with Secu-ra, and to argue that TIG’s and GenRoe’s claims should be barred, must fad.

As noted above, W. Anderson did have an ownership interest in the realty as of the time of loss. As such, W. Anderson had an insurable interest in the property. This does not mean, however, that he had an insured interest. W. Anderson was not listed as an insured on Secura’s policy in effect at the time of the loss, nor can W. Anderson acquire insured status through the Bruggeman doctrine or otherwise.

The Andersons also argue that TIG and GenRoe cannot be allowed to recover in excess of the amount they paid to settle Secura . and Centennial Bank’s claims, which is $45,000. The Andersons claim that an insurer’s subrogation claim is limited to the amount paid to the insured under the policy. The Andersons’ assertion is basically correct, but immaterial; TIG’s and GenRoe’s claims are not subrogation claims. TIG and GenRoe took an assignment of the promissory note and mortgage securing that note from Secura following-Secura’s receipt of an assignment of the note and mortgage from Walker Bank.

The Andersons essentially argue that the assignments are illusory and contrary to law and that the district court should have categorized TIG’s and GenRoe’s lawsuit as one of subrogation despite TIG’s and GenRoe’s assertion that theirs were assigned claims. But Minn.Stat. § 65A.01, subd. 8, specifically allows for an assignment of the mortgage if the policy language so authorizes. In this case, the policy explicitly provides that, if the insured voids coverage by way of an intentional act causing the loss, the insurer pays the mortgagee and takes an assignment of the mortgage. The Andersons claim that Secura “satisfied” the mortgage with payment to the bank. This is not correct. Instead, Secura satisfied the debt owed to Walker Bank and took an assignment of the note on that debt and of the mortgage securing that debt. The mortgage remained in effect, pending the determination of whether or not C. Anderson was owed insurance coverage for the loss. The district court did not err in determining that C. Anderson and W. Anderson were jointly and severally liable to TIG and GenRoe for any and all damages allowed under the promissory note, including interest and recovery costs.

2. The Andersons argue that TIG’s and GenRoe’s claims are barred because they were not asserted as counterclaims in C. Anderson’s lawsuit against Secura for insurance coverage for the fire loss. The Andersons maintain that TIG’s and GenRoe’s claims for breach of contract and breach of warranty against encumbrances arise out of the same transaction or occurrence and were thus compulsory counterclaims under Minnesota Rule of Civil Procedure 18.01.

We disagree. TIG and GenRoe were not parties in C. Anderson’s lawsuit with Secura. Additionally, TIG’s and GenRoe’s claims did not arise out of the fire causing damage to the realty. Instead, TIG’s and GenRoe’s claim of breach of warranty against encumbrances arose out of the flawed property transfer years after the fire, and the breach of contract claim arose only after it was determined that Secura did not owe C. Anderson coverage under the policy. At that point, TIG and Gen-Roe, as assignees of the note and mortgage, had the right to demand payment under the note. The Andersons’ refusal to pay ripened TIG’s and GenRoe’s breach of contract claim, and TIG and GenRoe initiated suit in a timely fashion. The district court did not err in deciding that TIG’s and GenRoe’s claims were not barred as unasserted compulsory counterclaims in the earlier lawsuit between C. Anderson and Secura.

3. The Andersons claim that the district court erred in awarding TIG and GenRoe attorney fees. The promissory note provided for interest and reasonable collection costs, including attorney fees, in the event of a default. The district court made a specific finding regarding fees and costs:

[TIG and GenRoe] have submitted evidence that their cost of collection against * * * Warren and Christopher Anderson is $25,691.98. This amount included $22,832.50 in attorneys’ fees and $2,859.48 in costs and disbursements.
The amount of $25,691.98 represents the actual costs in attorneys’ fees, costs and disbursements incurred in [TIG’s and GenRoe’s] collection efforts against * * * Warren and Christopher Anderson. Such costs are reasonable under the circumstances and were necessarily incurred in the prosecution of [TIG’s and GenRoe’s] claims against * * * Warren and Christopher Anderson.

Accordingly, the district court’s finding and fee award was specific to the claims against W. Anderson and C. Anderson only, as opposed to the claim asserted against L. Anderson.

“On review, this court will not reverse a trial court’s award * * * of attorney fees absent, an abuse of discretion.” Becker v. Alloy Hardfacing & Eng’g Co., 401 N.W.2d 655, 661 (Minn.1987) (citation omitted). The district court found that the fees were reasonably incurred on the claims against W. Anderson and C. Anderson. The record supports the district court’s findings. Accordingly, we will not disturb the fee award.

DECISION

The district court properly granted TIG’s and GenRoe’s motions for partial summary judgment.

Affirmed.

      . The district court did limit L. Anderson’s liability to this amount because she was not a co-obligor on the promissory note. Her liability arose only by way of her breach of the covenant against encumbrances when she signed off on the faulty transfer of the realty to JDOB.


text:
    STATE of Minnesota, Respondent, v. Jaimie Lynn CUNNINGHAM, et al., Appellants.
    No. C5-02-1718.
    Court of Appeals of Minnesota.
    June 10, 2003.

      Mike Hatch, Attorney General, St. Paul, MN, Alan L. Mitchell, Duluth, MN; and Bryan F. Brown, William A. Blodgett, Duluth City Attorneys, Shawn B. Reed, Her-mantown Prosecuting Attorney, Duluth, MN, for respondent.
    Fred T. Friedman, Chief Public Defender, Sixth District, Camille V. Doran, Assistant Public Defender, Duluth, MN, for appellants.
    Considered and decided by SHUMAKER, Presiding Judge, TOUSSAINT, Chief Judge, and ANDERSON, Judge.
   OPINION

TOUSSAINT, Chief Judge.

Appellants challenge the trial court’s imposition of the $28 co-payment required by Minn.Stat. § 611.17(c) (2002). They argue that the co-payment infringes on then-rights to counsel and equal protection under the Minnesota and United States Constitutions, and that the trial court abused its discretion in imposing the co-payment on appellants. Appellants Sommerlot, Peterson, and Cunningham argue further that the trial court impermissibly ordered them to pay twice for the same public defender services when the court ordered them to pay the $28 co-payment and to reimburse the public defender’s office $20. Because we conclude that the co-payment required by section 611.17(c) is constitutional, and that the court was within its discretion in imposing the co-payment on appellants, but that the court must take the $28 co-payment into account when ordering reimbursement and that the court erred in ordering appellants Sommerlot, Peterson, and Cunningham to reimburse the public defenders office $20 in addition to the co-payment, we affirm in part and reverse in part.

FACTS

This case involves ten appellants who were all assessed a $28 co-payment under Minn.Stat. § 611.17(c) (2002). Under section 611.17(c), any individual who receives public defender services shall pay a $28 co-payment, unless it is waived by the court. All of the appellants in this case appeared at arraignment hearings between July 23 and 26, 2002, and they were all approved for representation by the public defender.

Nine of the ten appellants pleaded guilty to misdemeanor or gross misdemeanor charges. In each of the nine cases, the trial court either assessed the $28 co-payment, or reserved the question of the assessment of the co-payment until after a hearing regarding appellants’ challenge to the constitutionality of the co-payment requirement. In addition to the $28 co-payment, because appellants Sommerlot, Peterson, and Cunningham were employed, they were each ordered to reimburse the public defender $20 under Minn.Stat. § 611.20, subd. 4 (2002).

Appellant Spratley agreed to waive her right to a speedy trial in exchange for the deferred prosecution of a misdemeanor no-proof-of-insurance charge and dismissal of a no-taillights charge. The court neither assessed Spratley the $28 co-payment, nor waived her co-payment. But the court later agreed at the hearing regarding the constitutionality of section 611.17(c) that it was the practice of court administration to automatically impose the $28 co-payment in any case where a public defender is appointed if the court does not expressly waive the co-payment. Thus, although it is unstated in the record, it appears that Spratley was assessed the $28 co-payment because the court did not expressly waive the co-payment requirement.

On September 4, 2002, the trial court heard arguments regarding the constitutionality of the co-payment required by section 611.17(c). The court held that the statute was constitutional and imposed the $28 co-payment on nine of the ten appellants, finding that the imposition of the co-payment would not cause a manifest hardship. The court did not impose the co-payment on Spratley because she was not convicted. This appeal follows.

ISSUES

1. Did appellant Sommerlot waive her right to appeal by failing to object to the imposition of the $28 co-payment?
2. Does Minn.Stat. § 611.17(c) (2002) violate appellants’ right to counsel under the Minnesota and United States Constitutions?
3. Does Minn.Stat. § 611.17(c) violate appellants’ right to equal protection under the Minnesota or United States Constitutions?
4. Was the trial court within its discretion in imposing a co-payment on nine of the ten appellants?
5. Did the trial court impermissibly order appellants Sommerlot, Peterson, and Cunningham to pay twice for the same services when the court ordered the three appellants to pay the co-payment under Minn.Stat. § 611.17(c) and to reimburse the public defender under Minn.Stat. § 611.20, subd. 4 (2002)?

ANALYSIS

I.

The state argues that appellant Marie Sommerlot’s failure to object to the imposition of the $28 co-payment under Minn.Stat. § 611.17(c) (2002), constituted a waiver of her right to challenge the constitutionality of the statute on appeal. Generally, this court will not consider matters not argued and considered in the court below. Roby v. State, 547 N.W.2d 354, 357 (Minn.1996).

Here, Sommerlot did not object to the trial court’s imposition of the $28 co-payment. But when the court heard arguments regarding the constitutionality of section 611.17(c) on September 4, 2002, the state did not object to the inclusion of Sommerlot in the group of ten defendants challenging the statute. At the beginning of the hearing, the public defender stated:

Finally, Judge, as noted, [as to] the first six named defendants, the Court had reserved its ruling on the constitutionality of the challenge to the co-payment statute. On the last four named defendants, the challenge had not been made at the time the Court had imposed the $28 co-pay, and what I’m doing here today is asking the Court if it holds the statute unconstitutional to vacate its order imposing the co-pay.

The judge responded that the court would “accept the challenge as to all of the cases.” Because the trial court specifically allowed the challenge as to all ten defendants and the state did not object, Som-merlot’s claim is properly before this court on appeal.

II.

Appellants argue that the $28 co-payment required by Minn.Stat. § 611.17(c) violates their right to counsel under the Minnesota and United States Constitutions. “Evaluating a statute’s constitutionality is a question of law.” Hamilton v. Comm’r of Pub. Safety, 600 N.W.2d 720, 722 (Minn.1999) (citation omitted). Accordingly, this court “is not bound by the lower court’s conclusions.” In re Blilie, 494 N.W.2d 877, 881 (Minn. 1993) (quoting Sherek v. Indep. Sch. Dist. No. 699, 449 N.W.2d 434, 436 (Minn.1990)). “Minnesota statutes are presumed constitutional, and our power to declare a statute unconstitutional should be exercised with extreme caution and only when absolutely necessary.” In re Haggerty, 448 N.W.2d 363, 364 (Minn.1989) (citation omitted). Thus, when this court is confronted with a statute that is susceptible to more than one interpretation, we adopt the alternative that stands in harmony with the constitution, even if another construction might be a more accurate reflection of legislative intent. State v. Carroll, 639 N.W.2d 623, 627 (Minn.App.2002), review denied (Minn. May 15, 2002).

“The Sixth Amendment guarantees that an accused in a criminal prosecution has the right to have the assistance of counsel for his defense.” Hanson v. Passer, 13 F.3d 275, 278 (8th Cir.1994). The requirements of the Sixth Amendment extend to criminal defendants in state court proceedings through the Fourteenth Amendment of the United States Constitution. Gideon v. Wainwright, 372 U.S. 335, 342-44, 83 S.Ct. 792, 795-96, 9 L.Ed.2d 799 (1963) (stating that “any person haled into court, who is too poor to hire a lawyer, cannot be assured a fair trial unless counsel is provided for him.”) The right to have the assistance of counsel also extends to misdemeanor cases. State v. Borst, 278 Minn. 388, 397, 154 N.W.2d 888, 894 (1967) (extending right to misdemeanors in which jail sentence may be imposed).

Concomitant with the right to counsel is the right of indigent criminal defendants to have counsel appointed for them. In Minnesota, criminal defendants who are financially unable to obtain adequate representation are entitled to the appointment of counsel. Minn. R.Crim. P. 5.02, subds. 1(2), 3, 5. But a court “may require a defendant, to the extent able, to compensate the governmental unit charged with paying the expense of the appointed public defender.” Id., subd. 5; see Minn.Stat. §§ 611.20, subd. 4 (requiring courts to order defendants who are employed, or who become employed while represented, to reimburse state for cost of representation to extent they are able); 35, subd. 1 (2002) (requiring any person who is financially able to reimburse government for costs of appointment of public defender).

In Hanson v. Passer, the Eighth Circuit Court of Appeals addressed the requirement of reimbursing the government for public defender services. 13 F.3d at 278-80. The Eighth Circuit considered the financial ability to repay paramount:

Certainly, when court-appointed counsel is provided, it is constitutionally permissible to require the defendant to repay the expense incurred by the state in providing the representation if the defendant later becomes able to repay, so long as “[tjhose who remain indigent or for whom repayment would work ‘manifest hardship’ are forever exempt from any obligation to repay.”

Id. at 279 (quoting Fuller v. Oregon, 417 U.S. 40, 53, 94 S.Ct. 2116, 2124, 40 L.Ed.2d 642 (1974)).

Section 611.17(c) mandates imposition of the co-payment upon disposition of a case, but affords the court discretion to waive the requirement. The statute provides no guidance as to when a court should exercise its discretion to waive the co-payment requirement. Each individual judge is left to determine which circumstances justify or require waiver.

The lack of statutory limitations on the imposition of the co-payment raises serious constitutional concerns. The statute does not specifically provide that those who remain indigent or those for whom payment would work a manifest hardship must remain exempt from having any obligation to repay the services of a public defender. Because the statute gives courts the discretion to waive the co-payment, we narrowly construe the statute to require courts to exercise their discretion consistent with Fuller, Hanson, and the Sixth Amendment, even though this may not have been the intent of the legislature. In short, a defendant is exempt from the co-payment and courts must exercise their discretion to waive the co-payment when a defendant is indigent or when the co-payment would cause a defendant to suffer manifest hardship. Therefore, we conclude that section 611.17(c), as construed by this court, does not violate appellants’ right to counsel under the Minnesota or United States Constitutions.

Appellants also argue, relying on In re Allen, 71 Cal.2d 388, 78 Cal.Rptr. 207, 455 P.2d 143 (1969), that the unilateral assessment of the co-payment required by Minn. Stat. § 611.17(c) has a chilling effect on the right to counsel provided by the Sixth Amendment. But in Fuller, the United States Supreme Court stated that the California Supreme Court’s reasoning in Allen was “wide of the constitutional mark.” 417 U.S. at 52, 94 S.Ct. at 2124. The Fuller Court held that requiring an individual to reimburse the state for the services of a public defender was in line with the Sixth Amendment, as long as the requirement was not enforced against the indigent or those for whom the requirement would work manifest hardship. Id. at 53-54, 94 S.Ct. at 2124-25. Thus, as discussed above, as long as section 611.17(c) is interpreted to protect the indigent and those for whom the payment of the co-payment would cause a manifest hardship, the statute conforms with the Sixth Amendment. Because the United States Supreme Court rejected the California Supreme Court’s reasoning in Allen, appellants’ reliance on Allen is misplaced and appellants’ argument that section 611.17(c) has a chilling effect on the Sixth Amendment right to counsel is without merit.

III.

Appellants argue that section 611.17(c) violates their right to equal protection under the Minnesota or United States Constitutions. The Fourteenth Amendment provides that “[no state shall] deny to any person within its jurisdiction the equal protection of the laws.” U.S. Const, amend. XIV, § 1. Article one, section two of the Minnesota Constitution has been analyzed under the same principles as the Federal Equal Protection Clause. Scott v. Minneapolis Police Relief Ass’n, 615 N.W.2d 66, 74 (Minn.2000). Both clauses mandate that all similarly situated individuals shall be treated alike, but only “invidious discrimination” is deemed constitutionally offensive. Id.

Appellants argue that section 611.17(c) targets poor people, and that it has a disparate impact on racial minorities. Out of the whole population of defendants applying for representation by a public defender and subject to section 611.17(c), no one segment of the population is treated differently than another. In fact, the statute treats all public defender applicants the same whatever their economic status or race, in that it requires all persons receiving the services of a public defender to pay the $28 co-payment. There also is no evidence in the record demonstrating that the statute has a disparate impact on racial minorities. Because similarly situated persons are not treated differently on the basis of economic status or race under section 611.17(c), we conclude that the trial court correctly held that the statute does not violate appellants’ right to equal protection under the Minnesota or United States Constitutions.

IV.

Appellants argue that the trial court abused its discretion by imposing the co-payment on appellants without showing that their financial circumstances had changed since the time counsel was appointed. The United States Supreme Court has held that an indigent defendant who accepts court-appointed counsel may only be required to repay the state for the cost of legal services if he or she later becomes able to repay. Fuller, 417 U.S. at 53, 94 S.Ct. at 2124 (stating that defendants who remain indigent will forever be exempt from any obligation to repay).

In Minnesota, courts may appoint counsel for individuals who are indigent and for those who are financially unable to obtain adequate representation Minn. R.Crim. P. 5.02, subds. 1(2), 3, 5. Thus, a defendant who is appointed a public defender is not necessarily indigent. The non-indigent may constitutionally be required to pay a co-payment or reimbursement even though their circumstances have not changed since the time counsel was appointed. See Hanson, 13 F.3d at 279 (stating that “[t]he phrase ‘financially unable to obtain counsel’ does not require a showing of indigency to entitle an accused to counsel; it is a less stringent standard). Accordingly, the trial court was within its discretion to impose the co-payment on appellants.

Appellants Sommerlot, Peterson, and Cunningham argue that they were impermissibly required to pay twice for the same services when the trial court ordered them to pay the $28 co-payment and to reimburse the public defender’s office $20 under Minn.Stat. § 611.20, subd. 4 (2002).

The legislature did not set forth in section 611.17(c) how it intended the $28 co-payment to be imposed in conjunction with section 611.20, subd. 4, which allows courts to order defendants, who are financially able, to reimburse the public defender’s office for legal services. Statutory construction is a question of law, which this court reviews de novo. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 393 (Minn.1998). In interpreting a statute, we presume that the legislature did not intend a result that is absurd or unreasonable. Minn.Stat. § 645.17(1) (2002).

Here, after appellants Sommerlot, Peterson, and Cunningham each pleaded guilty, the trial court asked the public defender how much time she had spent on the eases, and the public defender responded that she had spent less than a half an hour on each case. The trial court then ordered each of the three appellants to pay the $28 co-payment and to reimburse the public defender’s office $20. See generally Minn.Stat. § 611.20, subd. 5 (2002) (stating that amount of public defender legal fees is determined by multiplying number of hours worked by $40). Thus, the three appellants were each ordered to pay a total of $48 for $20 worth of legal services. We conclude that the legislature did not intend such an unreasonable result, and that the legislature intended courts to take the $28 co-payment into account when determining the amount of reimbursement owed by a defendant. We also conclude that in this case the trial court erred in ordering appellants Sommerlot, Peterson, and Cunningham to reimburse the public defender’s office $20, in addition to the $28 co-payment, for $20 in legal services. Therefore, as stated above, we affirm the trial court’s imposition of the co-payment on the three appellants, but reverse the trial court’s order requiring appellants Sommerlot, Peterson, and Cunningham to reimburse the public defenders office $20.

DECISION

The trial court correctly concluded that MinmStat. § 611.17(c) (2002) is constitutional and was within its discretion in imposing the $28 co-payment on appellants. The trial court erred in ordering appellants Sommerlot, Peterson, and Cunningham to reimburse the public defender’s office $20 in addition to the co-payment.

Affirmed in part and reversed in part.


author: GORDON W. SHUMAKER, Judge.

text:
    FIRST CONSTRUCTION CREDIT, INC., Respondent, v. SIMONSON LUMBER OF WAITE PARK, INC., Appellant.
    No. C0-02-2002.
    Court of Appeals of Minnesota.
    June 10, 2003.

      Brad A. Sinclair, Serkland Law Firm, Fargo, ND, for respondent.
    David J. Meyers, Gerald W. Yon Korff, Rinke-Noonan, St. Cloud, MN, for appellant.
    Considered and decided by TOUSSIANT, Chief Judge, KLAPHAKE, Judge, and SHUMAKER, Judge.
   OPINION

GORDON W. SHUMAKER, Judge.

Appellant Simonson Lumber of Waite Park, Inc. (Simonson Lumber) foreclosed a mortgage and bought the property at the foreclosure sale. Respondent First Construction Credit, Inc. (First Construction) later redeemed the property from Simon-son Lumber. To redeem the property, First Construction paid Simonson Lumber $14,000 more than was necessary to redeem the property from the foreclosed mortgage. It did so because Simonson Lumber alleged that it held a purchase agreement for the property that created an additional $14,000 security interest in that property. Because First Construction believed that the purchase agreement did not create an additional secured interest in the property, First Construction paid the additional $14,000 under protest.

First Construction then brought an action seeking a district court order to determine the rights and priorities of redemption from the sheriffs sale. In dispute was whether the original purchase agreement created a second hen or mortgage upon the real estate and, hence, whether First Construction had to pay the additional $14,000 to fully redeem the real estate. First Construction also wanted the district court to cancel the recorded notice of lis pendens filed by appellant Simonson Lumber upon the redeemed real estate. Finally, First Construction sought costs, disbursements, and attorney fees.

The district court determined that the purchase agreement did not constitute a second lien or mortgage upon the real estate and awarded First Construction a judgment against Simonson Lumber for $14,000 (plus pre-judgment interest), which constituted First Construction’s overpayment on redemption. The district court also canceled the notice of lis pen-dens and awarded First Construction $750 in attorney fees. After the district court denied Simonson Lumber’s motion for reconsideration, Simonson Lumber brought this appeal. On appeal, Simonson Lumber argues that the purchase agreement created a second lien or mortgage and, therefore, was secured by the real estate. First Construction also challenges the amount of attorney fees it was awarded.

FACTS

First Construction financed a construction project for Oscarson Development Company (Oscarson Development), who bought unimproved real estate from the Lutheran Church of the Cross (the church) for $196,000. Oscarson Development intended to build 28 townhouses on the property, and the purchase agreement the parties signed on May 4, 1996, provided that, upon the sale of each unit, Oscarson Development would pay $7,000 to the church and would deposit $1,000 in escrow. The escrow account was to be used for construction expenses if the church elected to build a community center for the townhouse residents.

To secure payment of the purchase price of the land, Oscarson Development gave the church a purchase-money mortgage. Oscarson Development also signed a promissory note for the purchase price, and Glen Oscarson personally guaranteed the note. On May 4,1996, the parties contemporaneously signed the mortgage, note, guarantee, and purchase agreement that included a non-merger clause. The church recorded the mortgage and the purchase agreement in August of 1996.

In. return for financing the project, First Construction received a second mortgage on the real estate. Subsequently, Oscar-son Development gave a third mortgage to appellant Simonson Lumber, a material supplier, in exchange for Simonson Lumber’s release of mechanics’ liens Simonson Lumber filed because Oscarson Development failed to pay for materials. Oscarson Development also defaulted on the loan from First Construction.

With 14 lots unsold, there were three mortgages against the property. The church assigned all of its interest in the mortgage and purchase agreement to Si-monson Lumber, who then foreclosed the church’s purchase-money mortgage. As a lienor, Simonson Lumber bid at the foreclosure sale the mortgage balance plus the $14,000 payable into escrow upon sale of the remaining 14 lots, and thereby purchased the property.

Following the foreclosure sale, First Construction started two successive lawsuits against Simonson Lumber. In the first action, the district court determined that the amount necessary to redeem the purchase-money mortgage was the mortgage balance and that the purchase agreement was not secured by that mortgage. There was no appeal in that case.

First Construction then sought to redeem the purchase-money mortgage. But Simonson Lumber then claimed that the $14,000 for the 14 unsold lots was an obligation under the purchase agreement and that the purchase agreement constituted a lien against the property. First Construction paid the primary redemption amount and, under protest, the additional $14,000.

In its second lawsuit, First Construction sought, among other relief, the district court’s declaration that the purchase agreement is not a lien against the property and, therefore, First Construction is entitled to judgment against Simonson Lumber for its redemption overpayment of $14,000, with prejudgment interest. During the pendency of this action, Simonson Lumber filed a notice of lis pendens against the property. First Construction moved for an award of attorney fees, contending that Simonson Lumber filed the notice of lis pendens in bad faith.

Both parties moved for summary judgment. The court denied Simonson Lumber’s motion and granted First Construction’s motion, ruling that the “May 4, 1996 purchase agreement does not constitute a second lien/mortgage upon the real estate.” The court also awarded the $14,000 redemption overpayment with prejudgment interest and $750 in attorney fees to First Construction. • Simonson Lumber appealed, and First Construction seeks review of the amount of the attorney fee award.

ISSUES

I. Does a recorded purchase agreement for real estate, which contains a non-merger clause, create a valid, enforceable second lien or mortgage upon that real estate without language that shows a specific intention to do so?

II. Did the district court abuse its discretion in awarding respondent attorney fees of $750 after concluding that appellant filed a notice of lis pendens in bad faith?

ANALYSIS

I.

Simonson Lumber concedes that the purchase-money mortgage is not security for the payment of the $14,000 escrow fund. Rather, Simonson Lumber argues that the recorded purchase agreement, by virtue of its non-merger clause, creates either a vendor’s lien or an equitable lien that secures payment of the escrow fund. The district court concluded that the purchase agreement did not create a security interest and thus granted summary judgment in favor of First Construction.

In reviewing the grant of a summary judgment, this court determines whether there exists a genuine issue of material fact for trial and whether the district court erred in its application of the law. Schons v. State Farm Mut. Auto. Ins. Co., 621 N.W.2d 743, 745 (Minn.2001). The parties do not dispute the material facts. Thus, we review the legal issues de novo. Moreno v. Crookston Times Printing Co., 610 N.W.2d 321, 327 (Minn.2000). Among those legal issues is the district court’s interpretation of the meaning and legal effect of the purchase agreement for the sale of the property in question. Contract interpretation is a legal issue that we review de novo. Blackburn, Nickels & Smith, Inc. v. Erickson, 366 N.W.2d 640, 643 (Minn.App.1985), review denied (Minn. June 24, 1985).

The purchase agreement is not ambiguous. It expressly governs the sale of real estate for the price of $196,000, to “be secured by a first mortgage in favor of [the church] on the property.” The purchase agreement is accompanied by a promissory note in which the vendee promises to pay $196,000. The promissory note is accompanied by a mortgage in which the mortgagor is obligated to pay a sum “not to exceed a principal amount of * * * ($196,000.00) * *

The purchase agreement also requires payment of $1,000 per unit at the time the unit is sold, to be applied toward the construction of a community center. The money is to be deposited in an escrow fund until the church elects either to build or not to build the community center. The purchase agreement treats this obligation separately from the obligation to pay the purchase price and does not include the escrow fund within the security of the mortgage. Nothing in the language of the purchase agreement provides for any security for the obligation to pay money into the escrow fund.

The purchase agreement includes a non-merger clause that provides for the survival of the contract obligations beyond the closing and the conveyance of title:

All covenants and agreements herein made, including the terms of this Purchase Agreement itself, shall not merge, but shall survive the closing hereunder and shall constitute conditions and obligations of the parties hereafter.

Because the obligation to pay into the escrow fund is one of the obligations provided in the purchase agreement, the parties’ intent is clear that it will continue to be a contractual duty until it is satisfied, despite the closing of the sale. But contractual obligations may be secured or unsecured. The parties clearly and expressly intended to secure the payment of the purchase price. And it is clear that the parties did not expressly secure collection and payment of the escrow funds. Thus, if the escrow is secured, it is secured only by implication or by operation of law.

Simonson Lumber argues that the escrow is secured by an implied lien. Case-law has used the terms “vendor’s lien,” “equitable lien,” and “equitable mortgage” as synonymous. See Trondson v. Janikula, 458 N.W.2d 679, 682 (Minn.1990) (noting that Kurz v. Gramhill, 269 N.W.2d 68, 71 (Minn.1978) “use[s] the terms equitable lien and equitable mortgage interchangeably”); Grace Dev. Co., Inc. v. Houston, 306 Minn. 334, 335, 237 N.W.2d 73, 75 (1975) (equating vendor’s lien with implied equitable lien upon real property).

A “vendor’s lien” is a concept applicable only to sales of real estate. Peters v. Tunell, 43 Minn. 473, 475, 45 N.W. 867, 868 (1890). It is a lien created by equity rather than contract or statute. Soukup v. Wenisch, 163 Minn. 365, 367, 204 N.W. 35, 35 (1925). Its historical purpose was to avoid “the unjust rule of early common law by which land was free from the claims of simple contract creditors.” Hammond v. Peyton, 34 Minn. 529, 531, 27 N.W. 72, 72 (1886). A vendor’s lien is customarily defined as “an implied equitable hen upon real property for the amount of the unpaid purchase price.” In re Butler, 552 N.W.2d 226, 229 (Minn.1996).

It exists independently of any express agreement at the time of the conveyance and without regard to the absence of the grantor’s intention to claim it. [a]n examination of the documents of record discloses no indication that either of the parties, the bank or the decedent, intended the loan agreement to be a second obligation and in fact, the renewal note drafted by the bank conclusively states that it is an unsecured loan.

Grace Dev., 306 Minn, at 335, 237 N.W.2d at 75. It is not generally assignable. Law v. Butler, 44 Minn. 482, 486-87, 47 N.W. 53, 54 (1890). And although Minnesota courts recognize and may enforce it where it applies, a vendor’s lien is not favored. Hecht v. Anthony, 204 Minn. 432, 437, 283 N.W. 753, 755 (1939). “The policy of the law favors a requirement that there be written and recordable evidence of interests in land.” Soukup, 163 Minn, at 366, 204 N.W. at 35. When presented with opportunities to expand the doctrine, Minnesota courts have specifically declined to extend the theory of vendor’s hen. Brooks v. Thorne, 176 Minn. 188, 191, 222 N.W. 916, 918 (1929); Soukup, 163 Minn, at 365, 204 N.W. at 35.

An equitable mortgage can be implied when parties to a loan transaction intend that there be security for the loan: “An equitable mortgage is created when the parties to the transaction intended it to be essentially a security transaction.” First Nat’l Bank v. Ramier, 311 N.W.2d 502, 503 (Minn.1981).

In Ramier, the bank lent money to a borrower on the borrower’s unsecured promissory note. Id. After the borrower’s death, the bank asked the surviving spouse to pay the note. Id. When she denied liabihty, the bank sought to have the district court declare that the spouse was unjustly enriched by the loan and that the bank was entitled to an equitable hen against the homestead. Id. On appeal, the supreme court looked to the transaction between lender and borrower and the documents employed in the transaction and held it proper to deny relief to the bank because

Id. at 503-04.

Similarly, there is nothing in the documents employed in the sale of the church property to indicate that the parties intended to secure any obligation, other than the payment of the purchase price. The fact that paragraph 2a of the agreement ties the mortgage only to the purchase price and that paragraph 2b, immediately following, provides no security for the escrow account compels the conclusion that the parties did not intend a security transaction as to the escrow.

Beyond the clear language of the documents involved in the transaction and the manifested intent of the parties, there are other plausible reasons that the purchase agreement should not be held to create an equitable hen in the escrowed funds.

The escrow fund did not pertain to the real estate that was sold. Rather, the community center was to be built on land that the church owned, albeit the center would be for the townhouse owners’ use. Thus, the escrow fund was personal property as to which no equitable lien could attach. Furthermore, there is no unjust enrichment or other inequity that results from a treatment of the escrow obligation as unsecured. Simonson Lumber is not deprived of its remedy for breach of contract and may also avail itself of any remedy provided in the purchase agreement that survived the closing.

Finally, Simonson Lumber’s reliance on Rosendahl v. Mudbaden Sulphur Springs Co., 144 Minn. 361, 175 N.W. 609 (1919), is misplaced. The Rosendahl court stated “[t]hat it was the intention of both parties that the unpaid purchase price should be a lien is not open to serious question.” Id. at 362-63, 175 N.W. at 609. The Rosen-dahl court drew its conclusion from the express language of the purchase agreement. Here, the parties expressed the opposite intention, namely, that there be no lien to secure the escrow fund. The district court did not err when it determined that the purchase agreement did not constitute a lien upon the real estate.

II.

Simonson Lumber argues that the district court erred in awarding attorney fees because Simonson Lumber did not file a notice of lis pendens in bad faith. The district court has the discretion to award costs, disbursements, and reasonable attorney fees if a party acted in bad faith. Tran v. Estate of Ditzler, 411 N.W.2d 6, 9 (Minn.App.1987).

“A lis pendens serves warning that title to property is in litigation and impedes a property owner’s right to free alienability of real estate.” Bly v. Gensmer, 386 N.W.2d 767, 769 (Minn.App.1986). A notice of lis pendens is filed properly only if a complaint has been filed “in which the title to, or any interest in or lien upon, real property is involved or affected.” Minn.Stat. § 557.02 (2002). “If the cause of action and notice of lis pen-dens involves a lien, the lien must exist at the time the action is commenced.” Bly, 386 N.W.2d at 768 (citation omitted). If the notice of lis pendens is filed with malice, the filing of a false statement on real property may constitute slander of title, which could subject the person filing to civil or criminal penalties. Id. at 769.

The district court concluded that Simonson Lumber acted in bad faith because it had prompt notice that the filing was improper, yet Simonson Lumber failed to remove the lis pendens until the day of oral arguments for the summary judgment motions in this case. The court also determined that bad faith existed because Si-monson Lumber filed the notice of lis pen-dens without verifying ownership of the real property following a proper redemption by First Construction and First Construction’s subsequent sale of the property. The filing of a notice of lis pendens created a cloud upon the title to the property.

In this case, because Simonson Lumber filed the notice of lis pendens after First Construction had already sold the property, the filing was improper. Neither Si-monson Lumber nor First Construction had any interest in the property at that time. Simonson Lumber’s failure to promptly remove the notice of lis pendens arguably can be construed as bad faith.

First Construction argues that the amount of the attorney-fee award is insufficient because Simonson Lumber acted in bad faith both in claiming that the purchase agreement constituted a second lien on the property as well as by filing the notice of lis pendens. We find nothing in the record to support that Simonson Lumber acted in bad faith in claiming the purchase agreement was a second lien. In light of the discretion afforded to the district court in awarding attorney fees, we find that the district court acted within its discretion.

DECISION

The district court properly granted the summary judgment motion in favor of respondent upon concluding that the purchase agreement for the sale of real property did not create a second lien or mortgage on that property.

Affirmed.


author: KLAPHAKE, Judge.

text:
    Angela Michelle WALSWICK-BOUTWELL, Petitioner, Respondent, v. William Thurston BOUTWELL, Jr., Appellant.
    No. C4-02-1791.
    Court of Appeals of Minnesota.
    June 17, 2003.

      Timothy J. McLarnan, McLarnan, Han-naher & Skatvold, P.L.L.P., Moorhead, for respondent.
    Timothy H. Dodd, Detroit Lakes, for appellant.
    Considered and decided by KLAPHAKE, Presiding Judge, WILLIS, Judge, and HUDSON, Judge.
   OPINION

KLAPHAKE, Judge.

Appellant William Boutwell challenges the district court’s amended judgment awarding a portion of his disability annuity to respondent Angela Walswick-Boutwell as marital property, while basing child support on the remainder of the annuity, as well as the district court’s calculation of his contribution to child-care expenses. Because the district court did not err in determining that appellant’s disability annuity is marital property, but that the portion reserved to appellant is income for purposes of child support, we affirm in part. Because the district court erred by not subtracting the cost of appellant’s dependent health insurance from his gross income in calculating net income, we reverse in part and remand for recalculation of appellant’s child-care contribution.

FACTS

The parties were married on September 21, 1991, and have two minor children. Respondent filed for marriage dissolution in June 2001. Appellant worked for 12 years as a policeman, including 10 years during the marriage, until he suffered a severe work-related back injury on March 1, 2000. He was unable to successfully return to work and in March 2001 was awarded $573 per week in workers’ compensation temporary total disability benefits. In April 2001, he began receiving $795 per month in disability income benefits as well from Minnesota Public Employees Retirement Association (PERA).

In October 2001, appellant entered into a stipulated settlement of his workers’ compensation claim, agreeing to a lump-sum payment of future retraining benefits in the amount of $57,000 net. He also stipulated to the discontinuance of temporary total disability benefits. As a result, his PERA disability income benefit increased to $2,123 per month. As a former police officer, respondent had the option of receiving a statutory disability benefit equal to 60% of his average salary, with various adjustments, or an optional annuity. He chose to receive the optional annuity, a single life benefit with no survivor-ship benefit. This disability annuity will become a retirement benefit at age 65. Upon his death prior to age 65, any lump sum remaining will be paid to a surviving current spouse, dependent children, or a designated beneficiary.

The district court awarded respondent $400 per month from appellant’s disability benefits as marital property. Because of appellant’s disability, however, the district court limited the award to $400 per month as an equitable, rather than equal, division of marital property. The district court also awarded respondent a marital interest in appellant’s retirement pension, to be paid when appellant turns 65. The district court did not award any part of the workers’ compensation settlement to respondent. In addition, appellant was ordered to pay child support based on his net monthly income minus the $400 marital property payment to respondent. He pays $217 per month for health insurance for himself and the minor children.

ISSUES

1. Did the district court err in awarding respondent a portion of appellant’s disability annuity as marital property while calculating child support based on the remaining portion of the annuity?

2. Did the district court err in its calculation of appellant’s child-care contribution?

ANALYSIS

The determination of whether disability funds are income or marital property is a question of law, subject to de novo review. Swanson v. Swanson, 583 N.W.2d 15, 17 (Minn.App.1998), review denied (Minn. Oct. 20, 1998). The district court has broad discretion in the division of marital property. Chamberlain v. Chamberlain, 615 N.W.2d 405, 412 (Minn. App.2000), review denied (Minn. Oct. 25, 2000). On appeal, we will “affirm the trial court’s division of property if it had an acceptable basis in fact and principle even though this court may have taken a different approach.” Servin v. Servin, 345 N.W.2d 754, 758 (Minn.1984) (citations omitted).

1. Disability Benefits

This court has consistently treated disability benefits as marital property. See Swanson, 583 N.W.2d at 18 (stating that “spouse’s right to receive a disability annuity can be construed as a marital asset to be divided”); Watson v. Watson, 379 N.W.2d 588, 591 (Minn.App.1985); VanderLeest v. VanderLeest, 352 N.W.2d 54, 57 (Minn.App.1984).

Appellant argues that, unlike Swanson, which involved a California pension benefit, his disability benefit is exempt from attachment, garnishment, or legal process by virtue of Minn.Stat. § 353.15, subd. 1 (2002) (“No money, annuity, or benefit provided for in this chapter [regulating PERA] is assignable or subject to any state estate tax, or to execution, levy, attachment, garnishment, or legal process, except as provided in * * * section 518.58, 518.581, or 518.6111.”).

Appellant asserts that because Minn. Stat. § 518.58, subd. 4 (2002), deals specifically with pension plans and not disability benefits, PERA disability benefits are necessarily exempted from legal process under Minn.Stat. § 353.15. Minn.Stat. § 518.58, subd. 1 (2002), however, grants broad discretion to the district court to make a just and equitable division of marital property. The definition of “marital property” includes “vested public or private pension plan benefits or rights.” Minn.Stat. § 518.54, subd. 5 (2002).

Appellant argues that pension benefits or rights are retirement benefits only and distinguishable from disability benefits. Although retirement benefits, disability benefits, and survivor benefits are treated in separate provisions of the same chapter, Minn.Stat. §§ 353.651, .656, and .657 (2002) respectively, the funding source for each of these benefits is the same, the police and firefighters fund. Minn.Stat. § 353.65 (2002). The particular optional annuity selected by appellant is governed by Minn. Stat. § 353.30, subd. 3 (2002), which is entitled “Annuities upon Retirement.” Furthermore, “retirement” itself is defined by Minn.Stat. § 353 as

the commencement of payment of an annuity based on a date designated by the board of trustees * * * [that] determines the rights under this chapter which occur either before or after retirement.

Minn.Stat. § 353.01, subd. 28 (2002). Thus, Minn.Stat. § 353 treats the concept of “retirement” expansively, encompassing disparate benefits within the same term.

The supreme court has previously construed Minn.Stat. § 518.54, subd. 5, as “operating] to give an expansive definition of what constitutes marital property.” Janssen v. Janssen, 331 N.W.2d 752, 755 (Minn.1983). The district court could properly conclude that appellant’s disability annuity was marital property.

Appellant also argues that the district court improperly treated his annuity as both marital property and as income for purposes of awarding child support. Appellant relies on Kruschel v. Kruschel, 419 N.W.2d 119 (Minn.App.1988), where this court stated, “there is support for [the] argument that the pension should be viewed as property or income, but not as both.” Id. at 122.

Appellant’s reliance on Kruschel is misplaced. Although appellant asserts that he is being “unfairly treated” by the district court, this court affirmed the same approach in both Swanson and Watson. Swanson, 583 N.W.2d at 18 (directing district court to consider disability benefit less that portion paid in satisfaction of marital property division to determine child support obligation); Watson, 379 N.W.2d at 591 (directing district court on remand to reconsider child support award based on respondent’s lowered income due to partial apportionment of disability income as marital property).

This approach is consistent with the statutory definitions of “marital property” and “income,” which imply an overlap between these two categories. As noted in Swanson, both Minn.Stat. § 518.54, subd. 5 (marital property) and subd. 6 (2002) (income) include pension plan benefits in their respective definitions. Swanson, 583 N.W.2d at 17-18. Although the disability annuity is marital property, it is also income or a resource to be considered in setting child support. Minn.Stat. § 518.551, subd. 5(c)(1) (2002); Swanson, 583 N.W.2d at 18. We conclude that the district court did not abuse its discretion by treating a portion of the monthly benefit as marital property and the remaining portion as income for purposes of child support.

2. Child-care Expense Contribution

Appellant argues that the district court erred in calculating his contribution toward child-care expenses. A party’s contribution to child-care expenses is based on the proportion of the party’s net income to the total income of the parties. Minn.Stat. § 518.551, subd. 5(b) (2002). “Net income” is defined as total monthly income less federal and state taxes, social security, and reasonable pension deductions and, among other possible deductions, child support and “Cost of Dependent Health Insurance Coverage.” Id.

In the amended judgment, the district court subtracted appellant’s child support obligation of $517 and the marital property payment of $400, but failed to subtract appellant’s monthly payment of $217 for dependent health care. We conclude that the district court erred in failing to deduct the cost of dependent health care when calculating appellant’s child-care contribution.

DECISION

The district court did not err in awarding a portion of appellant’s disability annuity to respondent as marital property, while determining child support based on the remaining portion of the annuity. Because the district court erred in its calculation of appellant’s child-care contribution by failing to deduct the cost of dependent health care, we reverse and remand this issue to the district court.

Affirmed in part, reversed in part, and remanded.


author: HUSPENI, Judge.

text:
    STATE of Minnesota, Respondent, v. Amber Lynn BLUHM, Appellant.
    No. C6-02-1775.
    Court of Appeals of Minnesota.
    June 17, 2003.

      John M. Stuart, State Public Defender, Roy G. Spurbeck, Assistant State Public Defender, Minneapolis, MN, for appellant.
    Mike Hatch, Attorney General, Kelly O’Neill Moller, Assistant Attorney General, St. Paul, MN, and John Carlson, Pine County Attorney, Pine County Courthouse, Pine City, MN, for respondent.
    Considered and decided by RANDALL, Presiding Judge, SHUMAKER, Judge, and HUSPENI, Judge.
   OPINION

HUSPENI, Judge.

Appellant challenges her sentence for fifth-degree controlled-substance crime, arguing that (1) the district court erred in concluding it was required to incarcerate appellant for six months; and (2) Minn. Stat. § 152.025, subd. 3(b) (2000), does not require a mandatory minimum incarceration period of six months. Because the district court erred in concluding that it was required to sentence appellant to a mandatory six-month incarceration, we reverse and remand.

FACTS

Appellant Amber Bluhm was charged with first-degree and fifth-degree controlled-substance violations and subsequently pleaded guilty to possessing methamphetamine, a fifth-degree controlled-substance offense. She also had a prior fifth-degree controlled-substance conviction for possession of methamphetamine.

Before her sentencing, appellant filed several letters in support of the progress she had made in rehabilitation after her prior conviction. The letters indicated that she entered and completed a primary and aftercare chemical dependency treatment program, completed a three-month stay at a halfway house, returned to school and obtained her high school diploma, and regularly attended AA and NA meetings. Appellant also recently became a new mother.

The district court stayed imposition of sentence and placed appellant on probation for up to three years. As a condition of probation, appellant was ordered to servé six months in the county jail pursuant to Minn.Stat. § 152.025, subd. 3(b) (2000). The district court believed it had no discretion to stay the six-month incarceration. The court noted it would have considered mitigating factors and other dispositional alternatives had it been allowed to do so, but added

the legislature in its wisdom or lack thereof, indicates that the Court shall, and when the language indicates shall that becomes mandatory language on the Court. So I have to impose a minimum of six months or up to a year.

This appeal resulted.

ISSUE

Did the district court err in interpreting Minn.Stat. § 152.025, subd. 3(b) (2000), to require a mandatory minimum six-month incarceration?

ANALYSIS

Statutory construction is a legal determination reviewed by this court under a de novo standard. In re Welfare of A.A.E., 590 N.W.2d 773, 776 (Minn.1999). When interpreting a statute, this court first looks to see whether the statute’s language is clear or ambiguous. Am. Fam. Ins. Group v. Schroedl, 616 N.W.2d 273, 277 (Minn.2000). “A statute is only ambiguous when the language therein is subject to more than one reasonable interpretation.” Id. (quotation omitted). The object of all statutory interpretations is to ascertain and effectuate legislative intent. Minn.Stat. § 645.16 (2002); In re Welfare of C.R.M., 611 N.W.2d 802, 805 (Minn.2000).

I.

In this case, we must determine whether a mandatory period of incarceration is required under Minn.Stat. § 152.025, subd. 3(b) (2000), which provides:

If the conviction is a subsequent controlled substance conviction, a person convicted under subdivision 1 or 2 shall be committed to the commissioner of corrections or to a local correctional authority for not less than six months nor more than ten years and, in addition, may be sentenced to payment of a fine of not more than $20,000.

(Emphasis added.) The state argues that subdivision 3(b) “unambiguously” requires a minimum six-month incarceration when the offender has a prior controlled-substance conviction. Because the statute states “shall be committed,” the state argues that the district court has no discretion, and that appellant, twice convicted for controlled-substance violations, was required to serve six months in jail. We disagree with the state’s interpretation of the statute.

We note initially that the power to define criminal conduct and to fix the punishment for such conduct is vested in the legislature. State v. Osterloh, 275 N.W.2d 578, 580 (Minn.1978); State v. Stacey, 359 N.W.2d 671, 672 (Minn.App.1984). The district court, however, has broad discretion to stay imposition or execution of sentences and to fashion conditions of probation within the statutory limits prescribed by the legislature. State v. Schwartz, 628 N.W.2d 134, 139 (Minn. 2001); State v. Olson, 325 N.W.2d 13, 18 (Minn.1982).

Minnesota law supports our conclusion that in this case the district court had discretion not only to stay imposition of appellant’s sentence, as it did, but to fashion conditions of probation to include or to eliminate a period of actual incarceration. In State v. Childers, 309 N.W.2d 37, 38 (Minn.1981), the Minnesota Supreme Court examined whether Minn.Stat. § 152.15, subd. 1(2) (1980), a predecessor version of the controlled-substance statute, required a mandatory minimum prison sentence. The version of the statute addressed in Childers provided that previously convicted drug offenders “shall be imprisoned for not less than one year nor more than ten years.” Minn.Stat. § 152.15, subd. 1(2) (1980). Given that language, the district court believed that it had no discretion to stay the execution of the' sentence and place defendant on probation. Childers, 309 N.W.2d at 37. The supreme court disagreed, and analyzed Minn.Stat. § 152.15, subd. 1(2), by examining both the court’s statutory authority and the statutory limitations in sentencing criminal defendants. In concluding that the district court had discretion to determine appropriate sentencing conditions, the court reasoned:

The sentencing statute in question does not specifically exclude defendant from consideration for probation * * * and section 609.135 authorizes the trial court to stay imposition or execution of sentence in all cases except when life imprisonment is required or a minimum term is specified by section 609.11. We therefore remand for resentencing.

Childers, 309 N.W.2d at 38.

The rationale of Childers was reaffirmed in State v. Feinstein, 338 N.W.2d 244 (Minn.1983). The Feinstein court examined whether Minn.Stat. § 609.346, subd. 1 (1982), required both the imposition and the execution of a three-year minimum prison sentence for repeat sex offenders. The sentencing statute then read:

If a person is convicted of a second or subsequent offense * * * the court shall commit the defendant to the commissioner of corrections for imprisonment for a term hot less than three years

Minn.Stat. § 609.346, subd. 1 (1982). Consistent with Childers, the Feinstein court reasoned that Minn.Stat. § 609.135, subd. 1 (1982), authorized probation in all cases, except when life imprisonment is required or a minimum term of imprisonment is listed by Minn.Stat. § 609.11, subds. 1, 9 (1982). Minn.Stat. § 609.11, subd. 9, did not list Minn.Stat. § 609.346, subd. 1, as an offense requiring a mandatory minimum term. The Feinstein court observed:

Section 609.346, subd. 1, requires that the trial court “commit the defendant to the Commission of Corrections” for a minimum term of 8 years. When a trial court sentences a defendant to 3 years in prison and then stays execution of sentence, the trial court has fully complied with the requirement of this section. This interpretation is consistent with the rule in interpreting minimum sentencing statues the presumption is that probation is an authorized disposi-tional alternative.

Feinstein, 338 N.W.2d at 247.

Although the state urges that the rationale of Childers and Feinstein has been undermined by later statutory enactments, we find the rationale of those cases still sound, and fully applicable here. The district court in this case had discretion in sentencing. Minn.Stat. § 152.025, subd. 3(b), did not compel incarceration for six months.

Our recognition that a district court has discretion in sentencing and fashioning conditions of probation under section 152.125 is consistent with the state’s acceptance of the stay of imposition of sentence ordered by the district court in this case. In accepting the stay of imposition, but urging that appellant must be incarcerated for six months, the state is, in effect, arguing that a period of incarceration must be a part of probation. But conditions of probation are peculiarly within the province of the district court. MinmStat. § 609.135, subd. 1(2) (2000) (authorizing probation “on the terms the court prescribes”); see also State v. Alladin, 408 N.W.2d 642, 647-48 (Minn.App.1987) (stating that “sentencing judge has broad discretion when setting the conditions of probation.”). Section 152.025 does not purport to address what conditions must be ordered when a person is placed on probation. That statute addresses sentencing concerns, not judicial discretion in fashioning conditions of probation.

We note further that MinmStat. § 609.11, around which so much of the controversy here swirls, does not prevent the court from sentencing without regard to mandatory mínimums unless there has been a previous conviction involving the use of a firearm.

In addition, we believe that the state mistakenly relies on State v. Sheppard, 587 N.W.2d 53 (Minn.App.1998), review denied (Minn. Jan. 27, 1999), and State v. Humes, 581 N.W.2d 317 (Minn.1998), arguing these cases overrule Childers and Feinstein. In Sheppard, we noted in dictum that

[t]he legislature should not be expected to enumerate a prohibition against stayed executions in every mandatory sentencing statute, particularly when the language and removal of discretion is clear.

Sheppard, 587 N.W.2d at 56. In that case, however, this court was interpreting Minn. Stat. § 609.11, subd. 8(b), a section that clearly removed judicial discretion from sentencing a felon in possession of a firearm. Sheppard, 587 N.W.2d at 56. Similarly, in Humes, the Minnesota Supreme Court addressed the narrow issue of whether the district court had jurisdiction to amend a defendant’s sentence to include a statutorily mandated conditional release term. 581 N.W.2d at 319 (holding that because statute read “shall be placed on conditional release,” conditional release term must be included in sentence). Humes did not address the broad question of whether the court retains discretion in sentencing or in fashioning conditions of probation.

The state, in continuing to argue that Childers and Feinstein no longer provide guidance on the issue of judicial discretion in sentencing, cites Minn.Stat. § 152.026 (2000). The state contends that this statute specifically excludes discretion by prohibiting stayed sentences under Minn.Stat. § 152.025, subd. 3(b). We disagree. Minn.Stat. § 152.026 provides:

A defendant convicted and sentenced to a mandatory sentence under sections 152.021 to 152.025 is not eligible for probation, parole, discharge, or supervised release until that person has served the full term of imprisonment as provided by law, notwithstanding section[ ] * * * 609.135. “Term of imprisonment” has the meaning given in section 244.01, subdivision 8.

Nothing in this section, however, limits judicial discretion in initially fashioning a sentence or conditions of probation. “Term of imprisonment” refers to the period of time for which an inmate is committed to the custody of the commission of corrections. Minn.Stat. § 244.01, subd. 8 (2000). Thus, we conclude section 152.026’s mandate requires an inmate to serve two-thirds of his or her executed sentence before becoming eligible for parole.

When the legislature wishes to restrict judicial discretion, it selects language that leaves no doubt. E.g., Minn.Stat. §§ 609.107 (excluding judicial discretion in sentencing certain murders if defendant was previously convicted of a heinous crime); .109 (specifically excluding judicial discretion for certain repeat sex offender cases); .11, subd. 5 (2002) (removing judicial discretion for certain offenses committed while in possession of a firearm). For example, in State v. Moose, 266 N.W.2d 521 (Minn.1978), the Minnesota Supreme Court examined whether an earlier version of Minn.Stat. § 609.11 barred the court from considering probation. The court held the 1976 version of Minn.Stat. § 609.11 did not prohibit the district court from considering probation under Minn. Stat. § 609.135. Id. at 525-26. In 1977, the legislature responded by amending Minn.Stat. § 609.135 to specifically bar probation in cases covered by Minn.Stat. § 609.11. 1977 Minn. Laws ch. 349, § 1; State v. Jonason, 292 N.W.2d 730, 733 (Minn.1980) (recognizing the amendment to Minn.Stat. § 609.135 conclusively eliminated judicial discretion in sentencing under Minn.Stat. § 609.11). In this case, some 22 years after Childers, the legislature has not amended Minn.Stat. § 609.135 to exclude judicial discretion in sentencing controlled-substance offenders.

Finally, in seeking affirmance on the record before us, and in effect asking this court to agree with the district court that there is no room for exercise of judicial discretion, the state directs us to provisions of the sentencing guidelines that assist the court in sentencing controlled-substance offenders. Minn. Sent. Guidelines cmt. II.E.02 provides:

When the mandatory minimum sentence is for less than one year and one day, the Commission interprets the minimum to mean any incarceration including time spent in local confinement as a condition of a stayed sentence. The presumptive disposition would not be commitment to the Commissioner unless the case falls below the dispositional line of the Sentencing Guidelines Grid. An example would be a conviction for simple possession of cocaine, a Fifth Degree Controlled Substance Crime. If the person has previously been convicted of a controlled substance crime, the mandatory minimum law would require at least six months incarceration which could be served in a local jail or workhouse.

We initially note the comments to the sentencing guidelines are advisory and not binding. State v. Notch, 446 N.W.2d 383, 386 (Minn.1989) (interpreting comment to the Minnesota Sentencing Guidelines as advisory and not controlling); see also State v. Pero, 590 N.W.2d 319, 326 (Minn.1999) (noting advisory comments to the Minnesota Rules of Court are not binding). Nonetheless, we recognize the tension between the advisory comment and our holding because the comment seems to require “at least six months incarceration.” We do not, however, read the comment to prohibit any exercise of discretion in fashioning conditions of probation. Indeed, comment II.E.04 goes on to acknowledge judicial discretion in sentencing mandatory minimum sentences for subsequent sex offenders.

In State v. Feinstein, 338 N.W.2d 244 (Minn.1983), the Supreme Court held that judges had the authority to stay execution of mandatory three-year prison sentences for second or subsequent sex offenses * * *. A stay of execution for such a case constitutes a dispositional departure and written reasons which specify the substantial and compelling nature of the circumstances and which demonstrate why the disposition selected is more appropriate, reasonable, or equitable than the presumptive disposition are required.

Minn. Sent. Guidelines cmt. II.E.04. In any event, we do not interpret the guidelines to modify the discretion recognized in Childers and Feinstein.

In view of our determination that neither the statutes nor the sentencing guidelines restrict the discretion of the district court in sentencing or in fashioning conditions of probation, we reverse and remand to enable the court to exercise the discretion vested in it.

DECISION

Minn.Stat. § 152.025, subd. 3(b) (2000), does not limit the exercise of judicial discretion in sentencing, and does not require six months of incarceration. Contrary to the district court’s interpretation, mitigating factors can be considered in sentencing appellant and in fashioning conditions of probation. We, therefore, reverse the district court’s ruling and remand for further proceedings consistent with this opinion.

Reversed and remanded.

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

      . The Childers court employed an analysis similar to that set forth in State v. Zaitz, 254 N.W.2d 381 (Minn.1977). The Zaitz court held that probation was an authorized dispo-sitional alternative to a three-year minimum prison term under Minn.Stat. §§ 609.11 and 135 (1970). Id. at 382; see also State v. Moose, 266 N.W.2d 521, 525-26 (Minn.1978) (holding predecessor version of the minimum sentencing statute did not exclude the possibility of probation).

      . See discussion of Minn.Stat. § 152.026 (2000).

      . The language of Minn.Stat. § 152.025, subd. 3(b), could be reasonably construed, we believe, to permit the district court to sentence as a misdemeanor, a gross misdemeanor, or a felony. Such a construction is supported by the provision permitting commitment "to the commissioner of corrections or to a local correctional authority." Minn.Stat. § 152.025, subd. 3(b) (emphasis added). Although we do not intend here to restrict the district court’s discretion on remand, it appears that a felony sentence was intended, and the court was troubled only by its perceived lack of discretion in fashioning conditions of probation. Therefore, we do not address the permissible range of sentencing alternatives under Minn. Stat. § 152.025.

      . We note once more that the state makes no objection to the exercise of judicial discretion in staying imposition of sentence and placing appellant on probation for up to three years. While the state argues Minn.Stat. § 152.026 prohibits stayed sentences under Minn.Stat. § 152.025, it simultaneously seeks affirmance of the stay of imposition, asserting the Minnesota Sentencing Guidelines "seem to contemplate the type of sentence given in this case.”

      . Minn.Stat. § 244.01, subd. 8, provides:
      "Term of imprisonment,” * * * is the period of time for which an inmate is committed to the custody of the commissioner of corrections minus earned good time. "Term of imprisonment,” as applied to inmates ⅜ * *, is the period of time equal to two-thirds of the inmate's executed sentence.