author: LAVORATO, Chief Justice.

text:
    STATE of Iowa, Appellee, v. Timothy A. RHINER, Appellant.
    No. 99-1854.
    Supreme Court of Iowa.
    Sept. 4, 2003.
    Rehearing Denied Oct. 28, 2003.

      Kermit L. Dunahoo of Dunahoo Law Firm, P.C., Des Moines, and Timothy A. Rhiner, pro se, for appellant.
    Thomas J. Miller, Attorney General, Kevin Cmelik, Assistant Attorney General, John P. Sarcone, County Attorney, and John Courter, Assistant County Attorney, for appellee.
   LAVORATO, Chief Justice.

In a bench trial, the district court found the defendant Timothy R. Rhiner guilty of conspiracy to manufacture a controlled substance and failure to possess a drug tax stamp. Rhiner appealed, raising a number of issues as well as claims of ineffective assistance of counsel. We transferred the case to the court of appeals and that court affirmed.

We granted Rhiner’s application for further review. We now hold that the court of appeals correctly decided all of the issues save one. As to the one exception, we conclude the conviction on the drug tax stamp charge cannot stand. We therefore vacate the court of appeals decision on the drug tax stamp conviction and sentence, reverse the district court’s judgment of conviction and sentence on this charge, and remand for resentencing. We affirm the decision of the court of appeals on all the other issues as well as on Rhiner’s claims of ineffective assistance of counsel. We also affirm the district court’s judgment of conviction on the conspiracy charge.

I. Background Facts and Proceedings.

In the early evening hours of July 4, 1998, Des Moines Police Officer Gregory Dickel was on routine patrol. The officer was traveling west on Army Post Road in Des Moines, Iowa, when he saw a vehicle coming towards him. The vehicle crossed the centerline. Rhiner was driving the vehicle and Frank Nucaro was a front seat passenger. As the vehicle passed the officer’s patrol car, the officer saw a large cloud of smoke coming from the vehicle’s exhaust and noticed the vehicle’s muffler was unusually loud. The officer turned his patrol car around and began pursuing the vehicle. When the officer got closer to the vehicle, he saw its two occupants reach over their shoulders and pull their seat belts across their bodies.

Eventually the officer stopped the vehicle. As he exited his patrol car, the officer detected what he believed was a smell of ether. The officer asked Rhiner to exit the vehicle and step away from it and told Nuearo to put his hands on the dashboard.

As the officer escorted Rhiner back to the patrol car to issue citations, the officer saw Nuearo reach back behind the seat and pull a blanket over something in the backseat. The officer secured Rhiner in the backseat of the patrol car by handcuffing him and then asked Nuearo to exit the vehicle. The officer conducted a pat-down search of Nuearo and placed him in handcuffs. The officer then looked inside the vehicle and saw a black bag on the passenger floorboard with a container of clear liquid. He reached in and pulled back the open-zippered bag to see what was in the container. The officer — a certified drug recognition expert — backed away from the vehicle, thinking it possibly contained a methamphetamine laboratory. According to the officer, such laboratories are very volatile and potentially explosive.

At this point, the officer called in the State Clandestine Laboratory Enforcement Team to investigate. Officers from that team searched the vehicle and found items consistent with the manufacture of methamphetamine. Officer Dickel eventually arrested Rhiner and Nuearo at the scene. The vehicle was later impounded and eventually sold after its registered owner, Steven Sheeley, failed to claim it.

Drug testing of samples of the liquid from the container in the vehicle confirmed the liquid contained between 9.5 and 9.9 grams of methamphetamine. However, the liquid was in step three of five in the manufacture of a usable form of methamphetamine.

The State charged Rhiner with numerous drug offenses. Later, Rhiner filed a motion to suppress all of the evidence taken in the search of the vehicle. He also filed a motion to dismiss in which he alleged prosecutorial misconduct and destruction of evidence. In addition, Rhiner filed a motion to compel disclosure of the identity of the passenger who was in Officer Dickel’s patrol car at the time of the stop. The district court denied the motions. Later the district court denied Rhiner’s renewed motion to compel disclosure of the identity of the passenger who was in Officer Dickel’s patrol car.

Eventually, Rhiner was tried on stipulated evidence in a bench trial. Before any evidence was presented, Rhiner’s counsel argued that the purity of the methamphetamine was less than was necessary to trigger the drug tax stamp requirement and that he should only be responsible for half the amount of the methamphetamine because there were two people in the vehicle. He also argued that the drug tax stamp requirement did not apply because the methamphetamine was in an unfinished state.

The district court rejected these arguments and found Rhiner guilty of conspiracy to manufacture a controlled substance in violation of Iowa Code section 124.401(l)(c )(6) (Supp.1997) and failure to possess a drug tax stamp in violation of Iowa Code sections 45BB.3 and 458B.12 (1997).

Following the district court’s ruling, Rhiner’s counsel filed a motion in arrest of judgment, alleging newly discovered evidence. Later, Rhiner’s counsel filed a motion for new trial in which he raised issues related to the motion to suppress and destruction of evidence. The motion also requested testing of drug samples by an independent laboratory. Finally, the motion again raised the same issues related to the drug tax stamp that counsel raised before evidence was taken in the trial.

In a pro se addendum to the motion in arrest of judgment, Rhiner raised, among other things, issues of prosecutorial misconduct. Rhiner also filed a second pro se addendum to the motion in arrest of judgment.

The district court denied all the motions, and sentenced Rhiner to ten years on the conspiracy conviction and five years on the drug tax stamp conviction. The court ordered the sentences to run consecutively.

Rhiner appealed, contending the district court erred in (1) overruling his motions to suppress and dismiss, (2) overruling his motion in arrest of judgment based on newly discovered evidence, (8) denying his motion for new trial, and (4) denying his renewed motion to compel the State to identify the passenger in the patrol car with Officer Dickel at the time of the stop. Rhiner also raised numerous claims of ineffective assistance of counsel.

The court of appeals affirmed the convictions, rejecting all of Rhiner’s contentions including his claims of ineffective assistance of counsel. We granted Rhiner’s application for further review in which he raised all of the same issues as well as all of his claims of ineffective assistance of counsel.

We conclude, with one exception, that the court of appeals correctly decided all of the issues, including the claims of ineffective assistance of counsel. We therefore give no further consideration to those issues and the claims of ineffective assistance of counsel. The one exception relates to the drug tax stamp conviction, which we now proceed to consider.

II. The Drug Tax Stamp Conviction.

On this issue, Rhiner’s contention is simply that the drug tax stamp law does not apply because the methamphetamine here was in an unfinished form. For reasons that follow we agree.

Because our resolution of this issue turns on statutory interpretation, our review is for correction of errors at law. State v. Snyder, 634 N.W.2d 613, 615 (Iowa 2001).

Our ultimate goal in interpreting statutes “is to discover the true intention of the legislature, considering the clearly stated objects and purposes involved.” Bernau v. Iowa Dep’t of Transp., 580 N.W.2d 757, 761 (Iowa 1998). We will not search for meaning beyond the express terms of a statute when the statute is plain and its meaning is clear. Snyder, 634 N.W.2d at 615. When the explicit terms of a statute are ambiguous, we will resort to rules of statutory construction. City of Waukee v. City Dev. Bd., 590 N.W.2d 712, 717 (Iowa 1999). In searching for legislative intent, we are bound by what the legislature said, not by what it should or might have said. Krull v. Thermogas Co., 522 N.W.2d 607, 612 (Iowa 1994). ‘Where the legislature has not defined the words of the statute, we may refer to prior decisions of this court and others, similar statutes, dictionary definitions, and common usage.” Bernau, 580 N.W.2d at 761.

Iowa Code chapter 453B deals with imposing an excise tax on unlawful dealing in certain substances. See generally Iowa Code ch. 453B. Iowa Code section 453B.3 of that chapter provides in relevant part:

A dealer shall not possess, distribute, or offer to sell a taxable substance unless the tax imposed under this chapter has been paid as evidenced by a stamp, label, or other official indicia permanently affixed to the taxable substance.
Taxes imposed on taxable substances by this chapter are due and payable immediately upon manufacture ....

Iowa Code § 453B.3 (emphasis added).

A “taxable substance” means, among other things, “a controlled substance.” Iowa Code § 453B.1(10). Methamphetamine is a controlled substance. See Iowa Code §§ 124.101(5), 124.206(4)(6).

A dealer means “any person who ... manufactures ... seven or more grams of a taxable substance.... ” Iowa Code § 453B.l(3)(a). The methamphetamine here was more than seven grams.

According to the first paragraph of section 453B.3, the drug tax stamp is required to show that the tax imposed under Iowa Code section 453B.7 has been paid. In the second paragraph of section 453B.3, the tax is due and payable immediately upon manufacture. Iowa Code § 453B.3.

Chapter 453B does not define “manufacture,” so we resort to its common meaning. Gardin v. Long Beach Mtg. Co., 661 N.W.2d 193, 197 (Iowa 2003). The common meaning of “manufacture” is “to make (as raw material) into a product suitable for use.” Webster’s Third New International Dictionary 1378 (2002). Payment is not due and therefore a drug tax stamp is not required until the drug manufacturing process is completed. This is so because unless the manufacturing process is completed the controlled substance is not suitable for use.

If the legislature intended to require a drug tax stamp on methamphetamine in its unfinished state,, it knew how to do so. For example, chapter 453B distinguishes between unprocessed and processed marijuana plants. See Iowa Code §§ 453B.1(2)(&) and (c), (8), (11).

Nila Bremer, a criminalist for the Iowa Department of Public Safety, analyzed the samples of the liquid taken from the vehicle Rhiner was driving. The liquid contained methamphetamine, pseudoephed-rine, engine starting fluid, and the byproduct CMP (1 — (1', 4'-eyclohexadienyl)— 2-methylaminopropane). According to Bremer, the liquid seized was at step three of five steps required in the manufacture of methamphetamine. The two additional steps to complete the process required the addition of hydrogenchloride gas, filtering, and drying it down. Until then, there is no completed product.

From Bremer’s testimony, it is clear that the manufacturing process necessary to make the drug a usable product had not been completed at the time of the seizure. The drug tax stamp was therefore not required. Consequently, we conclude the drug tax stamp conviction cannot stand.

Accordingly, we vacate the court of appeals decision on the drug tax stamp conviction and sentence, reverse the district court judgment of conviction and sentence on this charge, and remand for resentenc-ing. We affirm the decision of the court of appeals on all the other issues as well as on Rhiner’s claims of ineffective assistance of counsel. We also affirm the district court’s judgment of conviction on the conspiracy charge.

COURT OF APPEALS DECISION VACATED IN PART AND AFFIRMED IN PART; DISTRICT COURT JUDGMENT REVERSED IN PART AND AFFIRMED IN PART; CASE REMANDED.


source: Caselaw Access Project

author: /s/Paul H. Anderson Associate Justice

license: Public Domain

text:
    Sharon ANDERSON, Respondent, v. The SALVATION ARMY, and Zurich American Insurance Group/Chesterfield, Services, Inc., Relators.
    No. A03-971.
    Supreme Court of Minnesota.
    Oct. 21, 2003.
    James A. Wade, Jessica L. Durbin, Johnson, Killen & Seiler, P.A., Duluth, for Relator.
    Robert C. Falsani, Matthew P. Bandt, Falsani, Balmer, Peterson & Quinn, Duluth, for Respondent.
   ORDER

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that the decision of the Workers’ Compensation Court of Appeals filed June 27, 2003, be, and the same is, affirmed without opinion. See Minn. R. Civ.App. P. 136.01.

Employee is awarded $1,200 in attorney fees.

BY THE COURT:

/s/Paul H. Anderson Associate Justice


author: RUSSELL A. ANDERSON, Justice.

text:
    Henry L. PATTERSON, Petitioner, Appellant, v. STATE of Minnesota, Respondent.
    No. C6-03-247.
    Supreme Court of Minnesota.
    Oct. 23, 2003.

      Sara Goldman, Freedom Forum of New York City, New York, NY, Stephen W. Cooper, Minneapolis, MN, for Appellants.
    Michael A. Hatch, Minnesota Attorney General, St. Paul, MN, Amy Klobuchar, Hennepin County Attorney, Jean Elizabeth Burdorf, Assistant County Attorney, Minneapolis, MN, for Respondent.
   OPINION

RUSSELL A. ANDERSON, Justice.

Henry Laverne Patterson was found guilty, following a jury trial, of first-degree premeditated murder for the death of three people and on direct appeal we affirmed. State v. Patterson, 587 N.W.2d 45 (Minn.1998). In 2002, Patterson petitioned for postconviction relief, alleging that he was denied effective assistance of counsel at trial and also alleging that the trial court was without jurisdiction because “various elements of the offense were not charged in the complaint, or found by the jury.” He also claimed that he was denied access to the trial record. The postconviction court, without an evidentiary hearing, denied Patterson’s petition and we affirm.

On review of a postconviction court’s denial without an evidentiary hearing of a petition for postconviction relief, we resolve any doubts about whether an evidentiary hearing is required in favor of the petitioner; yet if the petition, files and record conclusively show that the petitioner is entitled to no relief, we will not require an evidentiary hearing. Minn. Stat. § 590.04, subd. 1 (2002); Boitnott v. State, 582 N.W.2d 243, 245 (Minn.1998). We conclude, as did the postconviction court, that the petition, files and record conclusively show that Patterson is entitled to no relief.

We consider first whether the postcon-viction court erred by denying without evi-dentiary hearing Patterson’s claim of ineffective assistance of trial counsel. The gist of Patterson’s ineffective assistance claim is that an “alibi” witness, Leonard McAdoo, was not permitted to testify because Patterson’s trial counsel failed to give notice of an alibi defense and also failed to disclose McAdoo as a witness. On direct appeal we reviewed the trial court’s evidentiary ruling precluding McA-doo from testifying and held that the trial court had not abused its discretion and, further, that Patterson was not prejudiced by the ruling. To give context to our consideration of his postconviction claim, we repeat essential facts from our earlier opinion.

Patterson was convicted of three counts of first-degree premeditated murder for the deaths of his ex-girlfriend’s mother, the mother’s 9-year-old son, and a 13-year-old neighbor. On direct appeal we affirmed. The bodies of the three victims were found in the basement of the mother’s townhome on the morning of June 28, 1996. The estimated time of death was that morning, between 12 and 1 a.m. The victims’ injuries included knife wounds, blunt force injuries to the face, head wounds caused by a hammer, and strangulation. Antonio Brayboy, who pleaded guilty pursuant to a plea agreement to three counts of accessory to first-degree murder, watched Patterson murder the victims and testified in great detail as to the instruments Patterson used, the location and types of wounds inflicted, and the order in which the wounds were inflicted. Brayboy’s testimony was in accord with reports of the medical examiner and various investigators.

After both the state and defense rested, and immediately before final argument, Patterson’s trial counsel attempted to call Leonard McAdoo, Patterson’s chemical-abuse counselor. McAdoo was expected to testify that he had a counseling session with Patterson between 4:00 and 4:45 p.m. on June 27, 1996, some 7 to 8 hours before the estimated time of the murders. McA-doo’s testimony was intended to impeach Brayboy’s testimony and the testimony of others as to Patterson’s whereabouts between 4:00 and 4:45 p.m. Patterson’s trial counsel, who had failed to disclose McAdoo as a witness, alleged a mix-up regarding the import of McAdoo’s testimony although the record indicated the nondisclosure had been calculated. As a sanction for nondisclosure of the witness, the trial court did not allow McAdoo to testify.

On direct appeal, we held that the trial court did not abuse its discretion by precluding the testimony of McAdoo as a sanction for faffing to disclose the witness. We concluded that the state would have had no reasonable means of rectifying the prejudice to the state. We also concluded that “McAdoo’s testimony was not crucial to Patterson’s defense,” that it would have been cumulative and would have impeached only the testimony of other witnesses regarding the timeframe of earlier events leading up to the murders. Patterson, 587 N.W.2d at 51. We concluded that “[t]he preclusion of such testimony did not impede Patterson’s ability to present a defense.” Id.

Patterson has revived the evidentiary ruling regarding witness McAdoo to support his postconviction claim that he was denied effective assistance of counsel at trial. The postconviction court denied the claim without an evidentiary hearing, relying in part on the determination in our earlier opinion that Patterson was not prejudiced by the preclusion of McAdoo’s testimony.

In order to support his ineffective-assistance claims, Patterson must allege facts that demonstrate (1) that his trial counsel’s performance fell below an objective standard of reasonableness, which we refer to as the performance prong; and (2) that there is a reasonable probability that, but for counsel’s errors, the result of the murder trial would have been different, which we refer to as the prejudice prong. Gates v. State, 398 N.W.2d 558, 561 (Minn.1987) (citing Strickland v. Washington, 466 U.S. 668, 694, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984)). We need not address both the performance and prejudice prongs if one is determinative. Strickland, 466 U.S. at 697, 104 S.Ct. 2052. In our case, the prejudice prong is determinative.

Under the prejudice prong, Patterson must allege facts that demonstrate that there is a reasonable probability that, but for his counsel’s errors, the result of the trial would have been different. “A reasonable probability is a probability sufficient to undermine confidence in the outcome.” Gates, 398 N.W.2d at 561 (quoting Strickland, 466 U.S. at 694, 104 S.Ct. 2052). Under Strickland, Patterson has the burden of actually showing that, absent counsel’s errors, the jury would have had a reasonable doubt respecting guilt and thus the outcome of the trial would likely have been different. 466 U.S. at 694, 104 S.Ct. 2052; Gates, 398 N.W.2d at 563. On direct appeal, however, we considered the consequences of trial counsel’s failure to give notice of the witness and concluded that the preclusion of McAdoo’s testimony was not prejudicial. “McAdoo’s testimony would have been cumulative and covered a time frame hours before the murders. The preclusion of such testimony did not impede Patterson’s ability to present a defense.” Patterson, 587 N.W.2d at 51. Since Patterson cannot satisfy the prejudice prong of Strickland, he is not entitled to an evidentiary hearing. We hold that Patterson’s ineffective assistance of counsel claim fails the prejudice prong of Strickland v. Washington and that the postconviction court did not abuse its discretion by denying the claim without evidentiary hearing.

We next consider Patterson’s allegation that the trial court was without jurisdiction because “various elements of the offense were not charged in the complaint, or found by the jury.” Patterson has failed to identify the “various elements” not charged or found by the jury, and we have made plain that an evidentia-ry hearing is not required when the allegations in a postconviction petition are merely argumentative assertions without factual support. Ferguson v. State, 645 N.W.2d 487, 446 (Minn.2002). We conclude that Patterson’s allegations regarding jurisdiction are mere argumentative assertions without any factual support and that an evidentiary hearing is not required.

Finally, we consider Patterson’s claim that he has been denied access to the trial record. Patterson alleges that the trial record has been destroyed. The record, however, has been retained by the Henne-pin County Court Administrator, having been returned to the court administrator after judgment had been entered on Patterson’s direct appeal. See Minn. R.Crim. P. 29.03, subd. 4 and 28.02, subd. 9; Minn. R. Civ.App. P. 111.04 and 136.03, subd. 2. We hold that there is no merit to Patterson’s claim that he has been denied access to the record.

Affirmed.

      . Patterson suggests that this standard is improper in light of the United States Supreme Court decision of Miller-El v. Cockrell, 537 U.S. 322, 123 S.Ct. 1029, 154 L.Ed.2d 931 (2003). But Miller-El involves the jurisdictional prerequisite for obtaining review of the denial of habeas relief under the federal Anti-terrorism and Effective Death Penalty Act of 1996 and is therefore inapposite here. See Miller-El, 123 S.Ct. at 1034.

      . That the preclusion of McAdoo’s testimony was not prejudicial to Patterson is no longer open to review. See Zenanko v. State, 587 N.W.2d 642, 645 (Minn.1998) (basing claim on an issue "specifically addressed on direct appeal is without merit.’’); Black v. State, 560 N.W.2d 83, 86 (Minn.1997).


author: /s/Kathleen A. Blatz Chief Justice

text:
    In re INTERIM PROCEDURE FOR REMOVAL/APPEAL OF CONCILIATION COURT PROCEEDINGS TO DISTRICT COURT.
    Nos. C6-84-2134, CX-89-1863.
    Supreme Court of Minnesota.
    Oct. 29, 2003.
   ORDER

In an opinion filed August 26, 2003, the court of appeals held that the procedure in Minn. R. Civ. P. 4.05 must be used to effect service by mail on the opposing party in order to remove/appeal a case from conciliation court to district court and that compliance with the procedure in Minn. Gen. R. Prac. 521(b) is not effective. Roehrdanz v. Brill, 668 N.W.2d 217 (Minn.App.2003). This court has granted review of that decision. To avoid confusion among the numerous pro se parties who litigate in conciliation court, it is necessary and appropriate to provide interim guidance on the permissible procedure for removal/appeal of a case from conciliation court to district court. By doing so, we express no view on the ultimate outcome of the appeal.

Based upon the files, records and proceedings herein,

IT IS HEREBY ORDERED that effective immediately compliance with either Minn. R. Civ. P. 4.05 or Minn. Gen. R. Prac. 521(b) shall be considered effective service by mail of a demand for removal/appeal from conciliation court to district court, pending final disposition of Roehrdanz v. Brill, 668 N.W.2d 217 (Minn.App.), rev. granted (Minn. Oct. 29, 2003) (No. CX-03-137).

BY THE COURT:

/s/Kathleen A. Blatz Chief Justice


author: WILLIS, Judge.

text:
    TRAVERTINE CORPORATION, Respondent, v. LEXINGTON-SILVERWOOD, a Minnesota Limited Partnership, Appellant.
    No. A03-210.
    Court of Appeals of Minnesota.
    Oct. 22, 2003.

      Timothy R. Duncan, Donald R. McNeil, Steven R. Little, Coleman, Hull & Van VUet, PLLP, Minneapolis, MN, for respondent.
    Curtis D. Smith, Jerrie M. Hayes, Moss & Barnett, P.A., Minneapolis, MN, for appellant.
    Considered and decided by WILLIS, Presiding Judge; TOUSSAINT, Chief Judge; and SHUMAKER, Judge.
   OPINION

WILLIS, Judge.

Appellant challenges the district court’s order granting respondent’s motion to stay arbitration. Because we conclude that appellant received a valid assignment of the compensation due from respondent and that the assignment allows appellant to compel arbitration, we reverse.

FACTS

The underlying dispute in this case concerns the claim of appellant Lexington-Silverwood, L.P. that it was assigned the compensation that James E. Lennon was due under a “management agreement” to which Lennon, George Berkey, and respondent Travertine Corporation, a real-estate development venture, were parties.

In August 1989, Travertine entered into the management agreement with Lennon and Berkey. The agreement provides that Lennon and Berkey would serve as the board of directors and officers of Traver-tine and would “provide all of the management services necessary to undertake the land acquisition, assembly and disposition” described in Travertine’s business plan. In return for their services, Travertine agreed to pay Lennon and Berkey a percentage of its net profits.

The management agreement provides that if Travertine terminates the agreement, Lennon and Berkey would be entitled to compensation for their services up to the termination date. Disputes under the agreement are subject to an arbitration clause, which provides that

[i]n the event of a dispute between the parties with reference to the interpretation of this agreement or their rights hereunder, the same shall be submitted to arbitration.

And the agreement further provides that it is

binding on the parties and their respective personal representatives, successors and assigns; provided, however, that the rights and obligations of Berkey/Lennon shall not be assignable except that Ber-key may assign to Lennon or Lennon assign to Berkey such rights and obligations.

In February 1992, Berkey assigned all of his rights under the management agreement to Lennon. In May 1996, Lexington-Silverwood obtained a judgment against Lennon in a matter unrelated to Travertine. In settlement of the judgment, Lennon purported to assign to Lexington-Silverwood his rights under the management agreement with Travertine. The assignment agreement provided that Lexington-Silverwood “has an equitable assignment of Lennon’s stock in Traver-tine” and that “Lennon agrees to transfer all other compensation, including anything due Lennon from his management agreement with Travertine.”

Travertine cancelled the management agreement in early 2000. Lexington-Sil-verwood filed a demand for arbitration in March 2002, alleging that, as Lennon’s as-signee, it was entitled to the compensation due him under the management agreement and that Travertine had refused to pay it. Travertine moved the district court for an order staying arbitration. The district court determined that Lennon’s transfer of his right to compensation was not a valid present assignment, concluding that even if the assignment were enforceable, it was only an assignment of Lennon’s right to receive compensation and not his right to demand arbitration. The court granted Travertine’s motion to stay arbitration, and this appeal follows.

ISSUES

I. Did the district court err by concluding that the assignment to appellant is invalid?

II. Did the district court err by concluding that even if the assignment to appellant were valid, appellant was not entitled to compel arbitration?

ANALYSIS

I.

Lexington-Silverwood first argues that it received a valid assignment of Lennon’s right to receive compensation under the management agreement. No “particular form of words is required for an assignment, but the assignor must manifest an intent to transfer and must not retain any control or any power of revocation.” Minn. Mut. Life Ins. Co. v. Anderson, 504 N.W.2d 284, 286 (Minn.App.1993), review denied (Minn. Oct. 19, 1993). An effective assignment requires the manifestation of intent to make a present transfer of a right without further action by the parties to the assignment agreement. Id.

While the assignment agreement here provides Lexington-Silverwood with an “equitable assignment” of Lennon’s Travertine stock, Lennon also agreed to “transfer all other compensation ... due Lennon from his management agreement with Travertine.” The assignment agreement requires no further action by the parties with respect to Lennon’s compensation, and Lennon retained no control over the compensation and no power of revocation. Travertine contends that Lennon could not assign his right to compensation because, at the time of his agreement with Lexington-Silverwood, he had not yet performed under the management agreement and therefore had no right to receive compensation. But the agreement between Lennon and Lexington-Silver-wood is a valid present assignment of Lennon’s future rights. See Mut. Ben. Life Ins. Co. v. Canby Inv. Co., 190 Minn. 144, 151, 251 N.W. 129, 133 (1933) (noting that “[c]ontingent interests, expectancies, and things resting in mere possibility only are assignable”).

Travertine argues that, even if Lennon made a present assignment of his future right to receive compensation, the management agreement’s non-assignment clause renders the assignment unenforceable. Contract interpretation is a legal issue, which 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).

Minnesota caselaw on the validity of assignments of compensation is limited. In Wilkie v. Becker, the supreme court stated that the right to receive payment may be assigned “unless there is something in the terms of the contract manifesting the intention of the parties that it shall not be assigned.” 268 Minn. 262, 267, 128 N.W.2d 704, 707 (1964) (quoting 6 Am.Jur. 2d Assignments § 16); see also In re Jones, 337 F.Supp. 620, 625 n. 14 (D.Minn.1971) (citing Wilkie for the proposition that “it is possible under Minnesota law to assign the proceeds of a contract even if the contract itself is not assignable”). Here, the contract provides that “rights and obligations ... shall not be assignable,” but there is no language specifically addressing the assignment of the right to receive payment.

Under the common-law presumption in favor of free alienability of contractual rights and obligations, an assignment of compensation under a contract is enforceable notwithstanding a non-assignment clause. For example, the Restatement (Second) of Contracts provides that

[a] contract term prohibiting assignment of rights under the contract, unless a different intention is manifested,
(a) does not forbid assignment of ... a right arising out of the assignor’s due performance of his entire obligation; [and]
(b) gives the obligor a right to damages for breach of the terms forbidding assignment but does not render the assignment ineffective.

Restatement (Second) of Contracts § 322(2) (1981).

Applying Missouri law, the Eighth Circuit adopted the Restatement in Cedar Point Apartments, Ltd. v. Cedar Point Inv. Corp., 693 F.2d 748 (8th Cir.1982). The court held that a non-assignment clause that does not explicitly prohibit the “power” to assign or render void an assignment made in violation of the clause does not make the assignment unenforceable by the assignee. See id. at 754. Rather, the assignment, if otherwise valid, is enforceable, and the obligor may seek damages from the assignor for breach of the non-assignment clause. Id. Numerous other jurisdictions have adopted the Restatement’s rule. See, e.g., Bel-Ray Co., Inc. v. Chemrite (Pty) Ltd., 181 F.3d 435, 442 (3d Cir.1999); Pro Cardiaco Pronto Socorro Cardiologica S.A. v. Trussed, 863 F.Supp. 135, 137 (S.D.N.Y.1994); Lomas Mortgage U.S.A., Inc. v. W.E. O’Neil Constr. Co., 812 F.Supp. 841, 844 (N.D.Ill.1993); Owen v. CNA Ins./Cont’l Cas. Co., 167 N.J. 450, 771 A.2d 1208, 1218 (2001); Rumbin v. Utica Mut. Ins. Co., 254 Conn. 259, 757 A.2d 526, 531-33 (2000); Macklowe v. 42nd St. Dev. Corp., 170 A.D.2d 388, 566 N.Y.S.2d 606, 606-07 (1991).

Here, the management agreement does not explicitly limit Lennon’s power to assign, nor does it explicitly render assignments void. Further, the contract provides that it “shall be binding on the parties and their respective ... assigns.” This language supports an inference that the non-assignment clause, if it was intended to apply to the assignment of compensation, gives Travertine a right to damages for breach of the clause but does not render Lennon’s assignment ineffective. See Cedar Point Apartments, 693 F.2d at 754 (citing clause that binds assignee in holding that non-assignment clause does not preclude power to assign). We conclude, therefore, that the non-assignment clause does not render void Lennon’s assignment of compensation to Lexington-Silverwood.

II.

Having determined that Lexington-Silverwood received a valid assignment of Lennon’s right to receive compensation, we next consider whether Lexington-Silverwood may compel arbitration to enforce the payment of the compensation due under the management agreement. Arbitration is favored as a speedy, informal, and relatively inexpensive method for resolving controversies, Lickteig v. Alderson, Ondov, Leonard & Sween, P.A, 556 N.W.2d 557, 562 (Minn.1996), but the district court “may stay an arbitration proceeding commenced or threatened on a showing that there is no agreement to arbitrate,” Minn.Stat. § 572.09(b) (2002).

When evaluating the issue of arbitrability on a motion to stay arbitration, courts ascertain the intent of the parties from the language of the arbitration agreement. Minn. Fed’n of Teachers, Local 331 v. Indep. Sch. Dist. No. 361, 310 N.W.2d 482, 484 (Minn.1981). The inquiry into the parties’ intent is a question of law, reviewable de novo. Johnson v. Piper Jaffray, Inc., 530 N.W.2d 790, 795 (Minn.1995). Doubts about whether the parties` intended to arbitrate a dispute are resolved in favor of arbitration, “whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitra-bility.” Id. (quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983)).

The provision of the management agreement that makes the agreement “binding on the parties and their respective ... assigns” makes no exception for the agreement’s arbitration clause. Further, a “valid assignment generally operates to vest in the assignee the same right, title, or interest that the assignor had in the thing assigned.” State ex rel. Southwell v. Chamberland, 361 N.W.2d 814, 818 (Minn.1985); see also Ill. Farmers Ins. Co. v. Glass Serv. Co., Inc., 669 N.W.2d 420 (Minn.App.2003) (holding that assignee of an insured is subject to mandatory arbitration provisions of Minnesota’s No-Fault Act). Here, the plain language of the management agreement provides that Lennon may demand arbitration of disputes concerning his rights under the management agreement, which includes his right to receive compensation. By virtue of receiving a valid assignment of Lennon’s right to receive compensation, Lexington-Silverwood also received the right to demand arbitration of disputes concerning payment of this compensation. We conclude, therefore, that Lexington-Silver-wood may compel arbitration to enforce its assignment.

DECISION

The district court erred by concluding that the assignment to appellant was invalid and that appellant was not entitled to compel arbitration.

Reversed and remanded.


author: G. BARRY ANDERSON, Judge. WRIGHT, Judge

text:
    Jeff WIEGAND, on behalf of himself and all persons similarly situated, Appellant, v. WALSER AUTOMOTIVE GROUPS, INC., and all related dealerships including but not limited to: Walser Plymouth C., L.L.C., d/b/a Walser Chevrolet; et al., Respondents.
    No. A03-250.
    Court of Appeals of Minnesota.
    Oct. 28, 2003.

      Thomas J. Lyons, Jr., John H. Goolsby and Thomas J. Lyons, Thomas Lyons & Associates, Little Canada, for appellant.
    William M. Hart, Melissa Dosick Rieth-of, Meagher & Geer, P.L.L.P., Minneapolis, for respondent Walser Automotive Group, Inc.
    Considered and decided by HARTEN, Judge, G. BARRY ANDERSON, Judge, and WRIGHT, Judge.
   OPINION

G. BARRY ANDERSON, Judge.

Appellant Jeff Wiegand sued respondent Walser Automotive Group (Walser), asserting that Walser’s misrepresentations violated Minn.Stat. § 325F.69, subd. 1 (2002), and that he was entitled to damages for this violation pursuant to Minn. Stat. § 8.81, subd. 3a (2002). In this appeal from the district court’s dismissal of Wiegand’s claim for failure to state a claim under Minn. R. Civ. P. 12.02(e), Wiegand argues that the district court erred when it dismissed his claim by ruling that Wiegand could not show reliance on respondents’ alleged misrepresentations. We affirm.

FACTS

On or about September 26, 1998, Wie-gand visited a Walser dealership to purchase an automobile. In his complaint, Wiegand alleged that a Walser representative told Wiegand that he was required to purchase a $1,500 service contract in order to obtain financing. The parties do not dispute that the service contract stated that financing could not be made contingent on the purchase of a service contract. The document includes the following language above the signature line on the service contract, “I understand that the purchase of this service contract is not required in order to obtain financing or to purchase this vehicle.” Wiegand also alleged that a Walser representative told him that he had to purchase a $340.37 credit insurance policy in order to obtain financing. The sales contract states, “Credit insurance is not required.” Wiegand further alleged that a Walser representative told him that after he made 12 monthly payments to the bank, he could refinance at a lower annual percentage rate (APR). After making the 12 monthly payments, Wiegand contacted a bank employee who told him that the bank would not refinance. The parties do not dispute that the payment schedule set out in the sales contract signed by Wiegand does not provide for a lower APR after 12 monthly payments.

Wiegand brought a claim against Walser as part of class action litigation, alleging violations of Minn.Stat. § 325F.69, subd. 1 (2002), a provision of the Minnesota Consumer Fraud Act (CFA), and Minn.Stat. § 168.71(a), (b) (2002), a provision of the Minnesota Motor Vehicle Retail Installment Sales Act. Walser moved to dismiss the complaint for failure to state a claim under Minn. R. Civ. P. 12.02(e), and the district court granted Walser’s motion. This appeal, which only raises issues related to section 325F.69, subd. 1, followed.

ISSUE

Did the district court err when it dismissed Wiegand’s claim because reliance on the alleged misrepresentation in an action under the Consumer Fraud Act could never be proven?

ANALYSIS

Wiegand argues that the district court erred when it granted Walser’s motion pursuant to Minn. R. Civ. P. 12.02(e) for failure to state a claim upon which relief can be granted, and dismissed Wie-gand’s section 325F.69, subd. 1 claim. When reviewing a dismissal pursuant to rule 12.02(e), an appellate court must determine “whether the complaint sets forth a legally sufficient claim for relief.” Bodah v. Lakeville Motor Express, Inc., 663 N.W.2d 550, 553 (Minn.2003). Thus, the applicable standard of review is de novo. Id. “[I]t is immaterial whether or not the plaintiff can prove the facts alleged, and we will not uphold a Rule 12.02(e) dismissal ‘if it is possible on any evidence which might be produced, consistent with the pleader’s theory, to grant the relief demanded.’ ” Martens v. Minnesota Min. & Mfg. Co., 616 N.W.2d 732, 739-40 (Minn.2000) (citation omitted) (quoting Northern States Power Co. v. Franklin, 265 Minn. 391, 395, 122 N.W.2d 26, 29 (1963)).

Wiegand brought his claim pursuant to two statutes that, together, permit an individual to seek damages for a violation of Minnesota’s consumer fraud statutes. Minn.Stat. § 325F.69 (2002), prohibits fraud and misrepresentation related to the sale of merchandise. See Flynn v. American Home Products Corp., 627 N.W.2d 342, 351 (Minn.App.2001).

The act, use, or employment by any person of any fraud, false pretense, false promise, misrepresentation, misleading statement or deceptive practice, with the intent that others rely thereon in connection with the sale of any merchandise, whether or not any person has in fact been misled, deceived, or damaged thereby, is enjoinable as provided herein.

Minn.Stat. § 325F.69, subd. 1 (2002). Thus, section 325F.69, subd. 1, authorizes enjoining violators of the statute. Minn. Stat. § 8.31, subd. 3a (2002), the Private Attorney General statute, authorizes a private action seeking damages for a violation of Minn.Stat. § 325F.69. See Flynn, 627 N.W.2d at 351; see also Ly v. Nystrom, 615 N.W.2d 302, 310 (Minn.2000).

In addition to the remedies otherwise provided by law, any person injured by a violation of any of the laws referred to in subdivision 1 may bring a civil action and recover damages, together with costs and disbursements, including costs of investigation and reasonable attorney’s fees, and receive other equitable relief as determined by the court.

Minn.Stat. § 8.31, subd. 3a (2000).

Wiegand’s challenge on appeal hinges on the distinction between a private action seeking damages pursuant to the CFA and a common law fraud action. A claim pursuant to Minn.Stat. § 8.31, subd. 3a, alleging a violation of Minn.Stat. § 325F.69, subd. 1, has two elements: (1) there must be an intentional misrepresentation relating to the sale of merchandise, and (2) the misrepresentation must have caused damage to the plaintiff. Group Health Plan, Inc., v. Philip Morris Inc., 621 N.W.2d 2, 12 (Minn.2001) (noting that “to state a claim that any of the substantive statutes has been violated, the plaintiff need only plead that the defendant engaged in conduct prohibited by the statutes and that the plaintiff was damaged thereby.”); Minn.Stat. § 325F.69, subd. 1 (prohibiting misrepresentation); Minn. Stat. § 8.31, subd. 3a (requiring injury “by violation” of consumer fraud laws, including Minn.Stat. § 325F.69). The plaintiff’s reliance on the defendant’s misrepresentation, however, is not an independent, third element of a claim pursuant to MinmStat. § 325F.69, subd. 1, and Minn.Stat. § 8.31, subd. 3a. Group Health, 621 N.W.2d at 12 (stating that “[ajllegations of reliance are therefore not necessary to state a claim under section 8.31, subdivision 3a, for damages resulting from a violation.”).

Group Health clarified the role of reliance in a section 8.31, subd. 3a, action. Although it explicitly held that reliance is not an independent element of a private action for damages based on a violation of Minn.Stat. § 325F.69, subd. 1, it also held that reliance is a necessary component of the causation element of such a claim.

[A]s a practical matter it is not possible that the damages could be caused by a violation without reliance on the statements or conduct alleged to violate the statutes. Therefore, in a case such as this, it will be necessary to prove reli-anee on those statements or conduct to satisfy the causation requirement.

Group Health, 621 N.W.2d at 13.

In contrast to a CFA claim, common law fraud requires a showing of reliance. See Flynn, 627 N.W.2d at 349 (stating that fraudulent misrepresentation requires that “representation caused the other party to act in reliance”).

In passing consumer fraud statutes, the legislature clearly intended to make it easier to sue for consumer fraud than it had been to sue for fraud at common law. The legislature’s intent is evidenced by the elimination of elements of common law fraud, such as proof of damages or reliance on misrepresentations. (emphasis in original)

State by Humphrey v. Alpine Air Prods., Inc., 500 N.W.2d 788, 790 (Minn.1993).

Ruling on Walser’s motion to dismiss, the district court concluded that the reliance necessary to prove the causation element in this CFA action could never be proven. Although Wiegand alleged that the Walser representative’s oral representation prompted the purchase of the service contract and credit insurance and caused him to believe that refinancing would be possible, the district court concluded that because the contracts Wiegand signed contradicted these oral representations, “case law is clear that such reliance can never be proven.”

The district court relied on Scott v. Forest Lake Ghrysler-Plymouth-Dodge, 598 N.W.2d 713, 720 (Minn.App.1999), review denied in part (Minn. Nov. 17, 1999) (denying review on consumer-fraud issue), rev’d on other grounds, 611 N.W.2d 346 (Minn.2000) and cited it for the proposition that “when oral representations contradict clear and unambiguous contract language, reliance on the oral representation is unjustifiable as a matter of law.” In Scott, the defendant dealership sold a vehicle to Scott, the plaintiff in an action brought under section 325F.69, subd. 1. Id. at 715. Scott alleged that a representative of the dealership orally represented that the credit terms of a retail installment contract represented the final agreement, but the language of a conditional delivery agreement signed by Scott “expressly stated that the vehicle was delivered to Scott conditionally subject to financing approval.” Id. at 720. Scott also alleged that a representative of the dealership stated that the vehicle’s price would be reduced if Scott signed a retail installment contract with a higher interest rate than he had originally agreed to pay. Id. This court held that the district court properly granted summary judgment in favor of the dealership where “Scott cite[d] no authority applying Minn.Stat. § 325F.69, subd. 1, when oral representations contradicted clear and unambiguous contract language, and the contract language at issue was written in normal type and not hidden among standard form clauses.” Id. Thus, we concluded that summary judgment was proper when a plaintiff could not show that its reliance on the dealership’s oral representations was reasonable because those representations were clearly and unambiguously contradicted by language contained in a written contract. Id.

We recognize that in Scott we cited authority addressing common law fraud. See St. Croix Printing Equip., Inc. v. Rockwell Int’l Corp., 428 N.W.2d 877, 882 (Minn.App.1988) (stating that in common law fraud action, “reliance on an oral representation is unjustifiable as a matter of law only if the written contract directly contradicts the oral representation”), review denied (Minn. Nov. 16, 1988). We did not distinguish in Scott between CFA and common law fraud cases as to what constitutes justifiable reliance. Our decision in Scott was reviewed by the Minnesota Supreme Court and the portion of our decision regarding reasonable reliance was not reversed. See Scott v. Forest Lake Chrysler-Plymouth-Dodge, 611 N.W.2d 346 (Minn.2000).

We conclude that the district court here properly decided that the complaint did not set forth a sufficient claim for relief. As noted above, the causation element of a claim pursuant to section 325F.69, subd. 1, requires that reliance on the defendant’s statements be proven. Group Health, 621 N.W.2d at 13. Scott addresses reliance as it relates to the causation necessary to establish a CFA claim, and we follow its holding.

Both by the language contained in his complaint, and by his reference to the contracts in question, Wiegand has alleged facts establishing that, as a matter of law, cannot prove causation. Id. By operation of the rule announced in Scott, it is impossible for Wiegand to produce evidence showing that he would be entitled to relief. We must therefore affirm the district court. Cfi Martens, 616 N.W.2d at 739-40 (stating that “we will not uphold a Rule 12.02(e) dismissal if it is possible on any evidence which might be produced, consistent with the pleader’s theory, to grant the relief demanded”).

Wiegand alleged that a representative of Walser told him that he was required to purchase a $1,500 service contract in order to obtain financing. But the service contract, referenced by and attached to the complaint, expressly stated that financing could not be made contingent on its purchase. Wiegand also alleged in his complaint that a Walser representative told him that he had to purchase a $340.37 credit insurance policy in order to obtain financing. But the sales contract, also referenced by and attached to the complaint, states that “[c]redit insurance is not required.” Wiegand also alleged in the complaint that a Walser representative told him that, after he made 12 monthly payments to the bank, he could refinance at a lower annual percentage rate (APR). After making the 12 monthly payments, Wiegand contacted a bank employee who told him that the bank would not refinance. But the payment schedule contained in the sales contract referenced by and attached to the complaint expressly states that Wiegand must make 52 payments at a 19.75% interest rate and does not provide any option for a lower APR. Each of the oral misrepresentations alleged by Wiegand is contradicted by direct, clear, and unambiguous contractual language included as part of his pleadings.

While it is undisputed that the Consumer Fraud Act clearly reflects the legislature’s intent to “make it easier to sue for consumer fraud” than to sue for common law fraud, Alpine Air Prods., Inc., 500 N.W.2d at 790, that is not the same as the elimination of any reliance requirement for purposes of a rule 12 motion. Appellant argues thoroughly and clearly the proposition that any consumer under the CFA may assert, for rule 12 purposes, oral misrepresentations directly refuted by written contract between the parties to support a claim. Appellant’s argument, if correct, represents a significant departure from the traditional view that written contracts are important documents and not lightly disregarded. See Minneapolis Public Housing Authority v. Lor, 591 N.W.2d 700, 704 (Minn.1999) (stating, “Unambiguous contract language must be given its plain and ordinary meaning, and shall be enforced by courts even if the result is harsh.”).

Group Health carefully limited the change in a reliance requirement in a CFA action noting specifically that “[t]he type of proof required to satisfy the causation-based reliance factor may be different in a case of different scope or based on different causes of action.” Group Health, 621 N.W.2d at 16 n. 10. We are unwilling to extend Group Health, and to adopt a position directly contrary to Scott, in the absence of clear direction from the supreme court that, for rule 12 purposes, the CFA permits a cause of action where alleged oral misrepresentations directly contradict otherwise unobjectionable contractual language. Thus, as a matter of law, Wie-gand’s reliance on those oral misrepresentations was not justified and cannot form the basis of a cause of action under the CFA.

DECISION

Because, as a matter of law, Wiegand could not prove causation with the facts alleged in his complaint, the district court properly granted Walsers motion to dismiss for failure to state a claim upon which relief may be granted.

Affirmed.

WRIGHT, Judge

(dissenting).

Because application of the common law doctrine of justifiable reliance to Consumer Fraud Act cases eviscerates the legislature’s intent to provide broader consumer protection than that found in common law fraud cases, I respectfully dissent. The Consumer Fraud Act, Minn.Stat. § 325F.69 (2002), clearly reflects the legislature’s intent to “make it easier to sue for consumer iraud than it had been to sue for fraud at common law.” State by Humphrey v. Alpine Air Prods., Inc., 500 N.W.2d 788, 790 (Minn.1993). This intent is evinced by “the elimination of elements of common law fraud, such as proof of damages or reliance on misrepresentations.” Id. (emphasis in original). To fulfill this purpose, reliance has been eliminated as an element of the Consumer Fraud Act. Minn.Stat. § 825F.69 (creating cause of action for a false promise or misleading statement made in connection with a sale with the intent that others will rely on it, regardless of whether “any person has in fact been misled, deceived, or damaged” by the fraud); Alpine Air Prods., Inc., 500 N.W.2d at 790.

Allegations of misrepresentations made with the intent to induce the customer to rely on the misrepresentations are sufficient to plead a claim under the Consumer Fraud Act. See LeSage v. Norwest Bank Calhoun-Isles, N.A., 409 N.W.2d 536, 541 (Mnn.App.1987) (holding that, in suit for damages, genuine issues of material fact under the Consumer Fraud Act were presented in allegations that defendant made misrepresentations of fact known to him with an intent that the plaintiffs rely on the statements and invest their money). While reliance is an element of common law fraud, Flynn v. Am. Home Prods. Gorp., 627 N.W.2d 342, 349 (Minn.App.2001), allegations of reliance are not necessary to state a claim under the Consumer Fraud Act for damages resulting from a violation brought pursuant to Minn.Stat. § 8.31, subd. 3a (2002), the private attorney general statute. Group Health Plan, Inc. v. Philip Morris Inc., 621 N.W.2d 2, 12 (Minn.2001). Here, Wiegand need only allege (1) an intentional misrepresentation relating to the sale of merchandise and (2) damages caused by the misrepresentation. Id. A review of the complaint establishes that Wiegand has set forth a legally sufficient claim for relief.

The district court, however, dismissed this case for failure to state a claim, based on our ruling in Scott v. Forest Lake Chrysler-Plymouth-Dodge, 598 N.W.2d 713 (Minn.App.1999), rev’d on other grounds 611 N.W.2d 346 (Minn.2000), which imports common law reliance, the precise element that the legislature has intentionally eliminated, into Consumer Fraud Act cases. Group Health makes clear that reliance is a component of causation that must be proved in Consumer Fraud Act suits brought under Minn.Stat. § 8.31, subd. 3a. 621 N.W.2d at 12. But nothing in the Group Health decision can be read to require Wiegand to meet the heightened common law standard of justifiable reliance to prove causation, particularly in light of the Consumer Fraud Act’s abrogation of the common law to make it easier for consumers to sue for fraud than proceeding at common law. Id. (“Imposing a requirement to plead common law reliance in a statutory claim intended to alleviate the burdens of a common law fraud action would be contrary to the legislature’s intent.”) If, as the majority opinion concludes, the common law standard of justifiable reliance applies, the result ignores the legislature’s intent, removes the broader consumer protection against fraud available under the Consumer Fraud Act, and renders the Act indistinguishable from common law fraud.

“The legislature may, by statute, expand the necessary connection between conduct and injury necessary to permit suit.” State by Humphrey v. Philip Morris, Inc., 551 N.W.2d 490, 495 (Minn.1996). The legislature did not exclude suits for damages under Minn.Stat. § 8.31, subd. 3a, from its intent to provide broader consumer protection. Rather, section 8.31, subdivision 3a, expressly includes the Consumer Fraud Act among those statutes where private suits are authorized to encourage aggressive prosecution of statutory violations. Philip Morris, 551 N.W.2d at 495. Indeed, the Group Health court rejected the imposition of a reliance standard in Consumer Fraud Act cases that would effectively “reinstate the strict common law reliance standard that ... the legislature meant to lower for these statutory actions.” 621 N.W.2d at 15.

To prove the “causal nexus” enunciated in Group Health, Wiegand need only prove what he has pled — that the alleged oral misrepresentations caused him to suffer damages. See id. at 13-14. Whether the causal nexus exists is a disputed question of fact that, at this early stage in the proceedings, is not ripe for resolution. Accordingly, I would reverse the district court’s dismissal of the case for failure to state a claim and remand for further proceedings.

      . Group Health analyzed a plaintiffs suit for damages based on violations of two other statutes in addition to Minn.Stat. § 325F.69, and thus language in the opinion often refers to these as "the substantive statutes.” Group Health, 621 N.W.2d at 5-6 (analyzing Minn. Stat. §§ 325F.67, 69, subd. 1, 325D.13 (2000)).


author: VANDE WALLE, Chief Justice.

text:
    2003 ND 153
    STATE of North Dakota, Plaintiff and Appellee, v. Darren BALLWEG, Defendant and Appellant. State of North Dakota, Plaintiff and Appellee, v. Kathy Materi, Defendant and Appellant.
    Nos. 20030051, 20030052, 20030053.
    Supreme Court of North Dakota.
    Oct. 23, 2003.

      R. Scott Stewart, State’s Attorney, Langdon, ND, for plaintiff and appellee.
    Lindsey D. Haugen (argued) and Steven M. Light, Larivee & Light, Grand Forks, ND, for defendants and appellants.
   VANDE WALLE, Chief Justice.

[¶ 1] Darren Ballweg (“Ballweg”) appealed from the trial court judgments and convictions following his conditional guilty pleas to manufacturing methamphetamine and theft of property. Kathy Materi (“Materi”) appealed a trial court judgment and conviction following her conditional guilty plea for manufacturing methamphetamine. They contend the trial court erred in denying their motion to suppress evidence seized while executing a search warrant. We affirm.

I

[¶ 2] On April 9, 2002, a district judge issued a search warrant for Ballweg and Materi’s premises. Chief Deputy Greg Fetsch prepared the affidavit requesting the search warrant. The affidavit contained information regarding events which occurred between March 2 and April 9, 2002. Deputy Fetsch stated that on March 2, Dale Kuchar of the Nekoma Farmers Elevator reported a full anhydrous tank was missing from its inventory and had to be assumed stolen. On March 11, Kuchar reported someone had seen the anhydrous tank in Ballweg’s yard.

[¶ 3] Deputy Fetsch and Sheriff Zeis went to Ballweg’s farmyard. Ballweg was there when they arrived. It appeared he was in the process of unloading the contents of a trailer into a burning barrel. Fetsch and Zeis questioned Ballweg. Deputy Fetsch stated Ballweg was “very nervous.” Ballweg informed the officers he received the anhydrous tank the previous fall and never used it on his crops because it snowed. The officers went to look at the tank and noticed its gauge read 86 percent, and it “appeared to have been there for a while as there were no fresh tracks around.” Ballweg did not accompany the officers to look at the tank but instead got into his vehicle and drove away. Deputy Fetsch stated this was “very suspicious behavior,” but he did not explain why.

[¶ 4] As they were walking back to their vehicle Ballweg returned and spoke to the officers. He told them he used the anhydrous to gas some rats on the farm. He stated he could not remember whether he picked the tank up from the elevator or whether it had been delivered. As the officers were leaving the farm, they noticed a garage on the property had its windows boarded up, its door padlocked from the outside, and one side completely covered with a blue tarp. Deputy Fetsch stated, “This made us suspicious as to why it was concealed so no one could look inside it.”

[¶ 5] After leaving Ballweg’s farmyard, Deputy Fetsch went to the Nekoma Elevator to speak with Kuchar. Kuchar stated there was no record of the tank being removed from the elevator. He explained the process Nekoma used for keeping track of tanks and told Fetsch that Ball-weg had called and told him he used some of the anhydrous to gas rats on the farm. Deputy Fetsch stated, “Anhydrous ammonia is a key ingredient in the manufacture of methamphetamine.”

[¶ 6] Deputy Fetsch told Kuchar to go get the tank and see if any anhydrous was missing from it. Kuchar reported one hundred pounds was missing. Deputy Fetsch spoke with Ballweg’s father who stated they received the tank in October and could not apply the anhydrous because of snow.

[¶ 7] On April 7, Deputy Fetsch received a report that Ballweg bought some items used in the process of making methamphetamine from the Devils Lake Wal-Mart. Along with other purchases, Ball-weg “purchased 3 boxes of Sudafed, 96 count per box, 2 packages of 4 AA Lithium batteries, 2 packages of non-latex rubber gloves, 1 package of latex gloves, and 2 boxes of baking soda.” Deputy Fetsch stated:

Sudafed and lithium from that type of battries (sic) is also key ingredients used in the manufacturing of methamphetamine. Baking soda is commonly used as a cutting agent in meth manufacturing. Gloves are also used by the manufacturers of methamphetamine because of the toxcity (sic) of the chemicals and the anhydrous will burn hands that are unprotected by rubber gloves.

[¶ 8] The affidavit also contained information Deputy Fetsch received from North Dakota Highway Patrolman Dana King. The previous Friday night, Trooper King followed a suspicious vehicle registered to Chad Lee into Ballweg’s yard at 2:00 a.m. Trooper King pulled into the yard and checked out Lee. While this was occurring, Ballweg came out of the house to see what was going on and instead of talking with them he got a flashlight out of a vehicle and came back. Trooper King found this suspicious because they were parked under a yard light, but he did not explain why. According to the affidavit, Ballweg stated he knew Lee when asked by King. Deputy Fetsch discovered Lee recently got off probation for felony possession of methamphetamine and misdemeanor possession of marijuana.

[¶ 9] Deputy Fetsch concluded the affidavit by describing the land Ballweg and his father farmed. He found there were buildings “capable of housing a meth lab” at three different locations. Based upon the foregoing information, a search warrant was issued for Ballweg’s premises. As a result of the evidence discovered during the search, Ballweg and Materi were each charged with manufacturing methamphetamine and Ballweg was charged with theft of property.

[¶ 10] Ballweg and Materi filed a motion to suppress the evidence seized during the search. The trial judge denied the motion, holding there was probable cause to issue the search warrant and, even if there was not, the good faith exception to the exclusionary rule applied. On appeal, they contend the affidavit did not establish probable cause to search and the good faith exception to the exclusionary rule should not apply to this situation.

II

[¶ 11] The Fourth Amendment of the United States Constitution, made applicable to the states by the Fourteenth Amendment, and Article I, § 8 of the North Dakota Constitution require searches and seizures to be reasonable and warrants to be issued only upon a showing of probable cause. The existence of probable cause is a question of law. State v. Rangeloff, 1998 ND 135, ¶ 16, 580 N.W.2d 593. “Probable cause to search exists ‘if the facts and circumstances relied on by the magistrate would warrant a person of reasonable caution to believe the contraband or evidence sought probably will be found in the place to be searched.’ ” State v. Thieling, 2000 ND 106, ¶ 7, 611 N.W.2d 861 (quoting State v. Johnson, 531 N.W.2d 275, 278 (N.D.1995)).

[¶ 12] The totality-of-the-circumstances test is used to determine whether sufficient evidence was presented to a magistrate to establish probable cause, independent of the trial court’s findings. State v. Damron, 1998 ND 71, ¶ 7, 575 N.W.2d 912.

“Although each bit of information ..., by itself, may not be enough to establish probable cause and some of the information may have an innocent explanation, ‘ “probable cause is the sum total of layers of information and the synthesis of what the police have heard, what they know, and what they observed as trained officers ... which is not weighed in individual layers but in the ‘laminated’ total.” ’ ”

Id. (citations omitted). The magistrate evaluates all the evidence and makes a practical, common sense decision whether probable cause exists to search a particular place. Id. at ¶ 6. We generally defer to a magistrate’s determination of probable cause so long as there was a substantial basis for the conclusion, and doubtful or marginal cases should be resolved in favor of the magistrate’s determination. Id.

[¶ 13] Ballweg and Materi contend Deputy Fetsch’s affidavit did not establish probable cause. They contend the information in the affidavit was misleading, conclusory, and described normal, everyday conduct.

IV

[¶ 14] Ballweg and Materi argue the affidavit was misleading because it falsely implied the anhydrous tank was stolen even though Deputy Fetsch knew before he submitted the affidavit that the tank had not actually been stolen. Ball-weg and Materi rely on Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978), which was applied by this Court in State v. Morrison, 447 N.W.2d 272, 274 (N.D.1989). Under Franks:

[W]here the defendant makes a substantial preliminary showing that a false statement knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in the warrant affidavit, and if the allegedly false statement is necessary to the finding of probable cause, the Fourth Amendment requires that a hearing be held at the defendant’s request. In the event that at that hearing the allegation of perjury or reckless disregard is established by the defendant by a preponderance of the evidence, and, with the affidavit’s false material set to one side, the affidavit’s remaining content is insufficient to establish probable cause, the search warrant must be voided and the fruits of the search excluded to the same extent as if probable cause was lacking on the face of the affidavit.

Franks, at 155-56, 98 S.Ct. 2674. “The Franks standard has been extended to statements that are misleading by omission.” State v. Holzer, 2003 ND 19, ¶ 7, 656 N.W.2d 686 (citing Rangeloff, 1998 ND 135, ¶ 9, 580 N.W.2d 593). Negligent or innocent mistakes are not enough to establish reckless or deliberate falsity. Dam-ron, 1998 ND 71, ¶ 9, 575 N.W.2d 912. The alleged misleading facts must affect the magistrate’s determination of probable cause. Morrison, at 274. Whether there is reckless or deliberate falsity is a finding of fact and is reviewed under the clearly erroneous standard. Damron, at ¶ 10 (quoting Morrison, at 275). “A finding of fact is clearly erroneous if, although there may be some evidence to support it, the reviewing court on the entire evidence, is left with a definite and firm conviction a mistake has been made.” Id.

[¶ 15] Ballweg and Materi never specifically requested a Franks hearing. However, a suppression hearing was held, during which the trial court heard testimony regarding the information in the affidavit. In denying the motion to suppress, the trial court found the affidavit was not misleading.

[¶ 16] Ballweg and Materi’s contention that the statements regarding the anhydrous tank were misleading does not withstand review. At the suppression hearing, Deputy Fetsch testified the tank ended up in Ballweg’s yard by mistake, and he reached this conclusion before he applied for the search warrant. Deputy Fetsch concluded there was a mistake regarding the anhydrous tank because Ballweg was never charged with theft. But, the fact Ballweg was not charged with stealing the tank does not necessarily mean he possessed it legally; it could mean there was insufficient evidence to prosecute him. By recounting the report from Kuchar and providing Ballweg’s explanation, Deputy Fetsch presented the district judge with enough information to determine the significance of the tank in her probable cause analysis. He did not mislead the district judge with regard to the anhydrous tank. There was no reckless or deliberate falsity or omission which would require setting aside the statements regarding the anhydrous tank.

[¶ 17] Furthermore, the fact the anhydrous tank may have been stolen is not material to the probable cause analysis in this case. Although the purpose for the anhydrous tank on the farm may have created greater suspicion had it been stolen, perhaps suggesting it would be used for an illegal purpose, the material fact regarding the anhydrous was its availability when considered with the items purchased at the Devils Lake Wal-Mart. Anhydrous is the one ingredient needed to make methamphetamine that is not available in stores. Sandy Hansen, Meth: A Growing Concern for Small Communities, Valley City Times Record, September 17, 2003, at 1; cf. State v. Corum, 2003 ND 89, ¶ 4, 663 N.W.2d 151 (“Anhydrous ammonia, pseudoephedrine, and batteries are all used to manufacture methamphetamine”). In this case, the fact the anhydrous tank may have been stolen was not necessary to finding probable cause to search the premises, but the availability of anhydrous along with the other information presented in the affidavit was necessary.

In order to succeed on a Franks challenge based on an allegation of omitted information, the defendant must show: “(1) that the police omitted facts with the intent to make, or in reckless disregard of whether they thereby made, the affidavit misleading, ... and (2) that the affidavit if supplemented by the omitted information would not have been sufficient to support a finding of probable cause.” State v. Winkler, 552 N.W.2d 347, 352 n. 1 (N.D.1996) (quoting United States v. Lucht, 18 F.3d 541, 546 (8th Cir.1994)).

Holzer, 2003 ND 19, ¶ 7, 656 N.W.2d 686. Informing the district judge that Ballweg was not going to be charged with stealing the anhydrous tank would not have negated probable cause in this case because there would still have been information establishing Ballweg had access to anhydrous. Therefore, the information regarding the anhydrous tank was not misleading and was properly evaluated by the district judge insofar as there was neither reckless or deliberate falsity nor omitted information that would have eliminated probable cause.

V

[¶ 18] Ballweg and Materi further contend the affidavit did not contain enough information regarding criminal activity to establish probable cause to search because it described “normal, everyday conduct.” The standard of proof necessary to establish guilt at trial is not necessary to establish probable cause. State v. Hage, 1997 ND 175, ¶ 10, 568 N.W.2d 741 (quoting State v. Ringquist, 433 N.W.2d 207, 212 (N.D.1988)). The relevant inquiry is not whether conduct is innocent or guilty, but what degree of suspicion attaches to it. Illinois v. Gates, 462 U.S. 213, 245, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983); State v. Guthmiller, 2002 ND 116, ¶ 13, 646 N.W.2d 724. “Circumstantial evidence may alone establish probable cause to support a search warrant.” State v. Duchene, 2001 ND 66, ¶ 13, 624 N.W.2d 668 (quoting State v. Wamre, 1999 ND 164, ¶ 6, 599 N.W.2d 268)).

A.

[¶ 19] Ballweg and Materi argue the covered windows and tarp on the garage should have only caused suspicion and further investigation, not probable cause. See State v. Lewis, 527 N.W.2d 658, 663 (N.D.1995) (“[Suspicion, without anything more specific, does not amount to probable cause to search”). In Lewis, this Court found that an affidavit did not establish probable cause to believe the Lewises were growing marijuana in their home. Id. at 663. The affidavit for the search warrant in Lewis included information regarding the purchase of indoor growing supplies. Id. at 660. It also revealed that the west and south upstairs windows of the residence were covered while the other windows on that floor were not, a thermal imaging device had detected extra heat loss in that area of the house, and the Lewises’ electricity consumption had increased greatly. Id. We observed that insulating windows was normal during the winter in North Dakota and the growing supplies were as consistent with growing marijuana as they were with growing other plants indoors. Id. at 662-63. “We refuse[d] to view diligent efforts to reduce heat loss, without more, as circumstantial evidence of an indoor marijuana grow operation sufficient to support the issuance of a search warrant.” Id. at 663.

[¶ 20] This case is distinguishable from Lewis in two respects. First, here the building boarded up was a detached garage, not a residence. Although it is entirely innocent to conceal a detached garage, a greater degree of suspicion may attach to a completely concealed garage than to a residence that has its windows insulated. See State v. Dallmann, 441 N.W.2d 912, 919 (N.D.1989) (stating outbuildings and pastureland are not accorded the same “special protection” as the home under the Fourth Amendment).

[¶ 21] Second, there is more evidence indicating drug activity in this case than there was in Lewis. In Lewis, there was no indication marijuana was being grown with the equipment purchased. Here, the affidavit contained evidence concerning the specific ingredients and supplies used to manufacture methamphetamine. Ball-weg and Materi had access to anhydrous and had purchased 288 capsules of Su-dafed, baking soda, and other supplies used in the process of manufacturing methamphetamine. All of these products have normal, everyday uses. However, together they are also used to manufacture methamphetamine. For example, “extracting the principal compound pseu-doephedrine from Sudafed tablets is the initial step in manufacturing methamphetamine.” Commonwealth v. Hayward, 49 S.W.3d 674, 675 (Ky.2001). Baking soda is commonly used as a cutting agent. Cf. State v. Mische, 448 N.W.2d 415, 418 (N.D.1989) (“A cutting agent is illegal drug paraphernalia”). A high degree of suspicion attaches to the collective purchase of ingredients and supplies used to manufacture methamphetamine. Considering the availability of anhydrous, the purchase of Sudafed in an amount inconsistent with personal use, the purchase of a cutting agent and other supplies used to manufacture methamphetamine, and the condition of the garage, the laminated total of the layers in this case establishes a substantial basis from which a person of reasonable caution could conclude there was probable cause to search Ballweg and Materi’s premises for evidence of a methamphetamine manufacturing operation. See Corum, 2003 ND 89, ¶ 27, 663 N.W.2d 151 (holding evidence indicating the defendant stole anhydrous, purchased other supplies for manufacturing methamphetamine, kept the ingredients and finished product in his home, and had prior drug convictions established probable cause to search his home); see also Hayward, at 677 (“Possessing the primary precursor ..., ephedrine or pseudoephedrine, along with all the other necessary chemicals for the manufacture of methamphetamine provided a legally sufficient basis for the jury to find that Appellant was trafficking in methamphetamine”).

B.

[¶22] Ballweg and Materi claim the information provided by Trooper King regarding Chad Lee did not establish any suspicion of criminal activity. The information supplied by Trooper King in this case was reliable. See Hage, 1997 ND 175, ¶ 16, 568 N.W.2d 741 (“observations of fellow law enforcement officers involved in a common investigation are also considered a reliable basis in a magistrate’s probable cause determination”). Deputy Fetsch independently discovered the information regarding Lee’s probation. See id. The fact Trooper King relayed that Ballweg stated he knew Lee could also be evaluated because hearsay can provide a basis for probable cause. Id. at ¶ 15; see also N.D.R.Crim.P. 41(c)(1). Nevertheless, the question remains whether the substance of the information regarding Lee added anything to the probable cause determination.

[¶ 23] “ ‘[M]ere suspicion that persons visiting the premises are connected with criminal activity will not suffice’ for issuance of a wárrant to search the premises.” Thieling, 2000 ND 106, ¶ 12, 611 N.W.2d 861 (quoting 2 Wayne R. La-Fave, Search and Seizure § 3.7(d), at 374 (3d ed.1996)). In Thieling, the affidavit referred to three instances regarding Thieling’s associations. Id. This Court found:

This evidence is of little or no probative value. Associating at one’s home with one who was merely charged with a drug crime three and a half years ago, associating with one’s own brother who was convicted of a drug crime about seventeen years ago, and associating with the roommate of a person convicted of drug crimes are very remote links to drug activities. There is no specific information indicating the persons visited Thieling’s home on more than one occasion and there is no indication of what the persons did while at Thieling’s home.

Id. (footnote omitted). This Court found the information regarding Thieling’s associations in connection with the other minimal evidence of drug activity was at most “a very thin layer” in the probable cause analysis. Id.

[¶ 24] The information regarding Chad Lee in this case is similar to the information in Thieling. However, there is more evidence of drug activity in this case because of the presence of the anhydrous, Sudafed, and other supplies used to manufacture methamphetamine. See id. at ¶ 9 (indicating the only evidence of drug activity was baggies, plastic, and tin foil which are common household goods). The affidavit in this case did not rely merely on household goods, but was based on the collective purchase of most of the ingredients and supplies used to make the actual drug. Therefore, the association evidence regarding Chad Lee has some higher degree of suspicion attached to it than the association evidence in Thieling. Although this is a thin layer in the probable cause analysis, it could properly be evaluated in determining whether there was probable cause to search the premises.

C.

[¶ 25] Under the totality of the circumstances, there was sufficient information presented to the district judge from which a person of reasonable caution could conclude evidence of a methamphetamine manufacturing operation would be found at Ballweg and Materi’s premises. There was other questionable information contained within Deputy Fetsch’s affidavit. However, we conclude the magistrate had a substantial basis to issue the search warrant without considering this information. Although the information in the affidavit describes innocent conduct when observed in a piecemeal fashion, the combination of the presence of anhydrous, the collective purchase of the large quantity of Sudafed and other supplies used in the process of manufacturing methamphetamine, and the condition of the garage, created a substantial basis for the district judge to conclude probable cause existed to search the premises.

VI

[¶ 26] The trial judge determined that if there was not probable cause to issue the search warrant, the good faith exception to the exclusionary rule would nevertheless apply to this situation. Because we find the affidavit established probable cause to search Ballweg and Materi’s premises, we do not consider whether the good faith exception applies.

VII

[¶27] The judgments of the district court are affirmed.

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


author: SANDSTROM, Justice.

text:
    2003 ND 162
    In the Interest of R.F. Rosalie Etherington, Ph.D., Petitioner and Appellee, v. R.F., Respondent and Appellant.
    No. 20030288.
    Supreme Court of North Dakota.
    Oct. 23, 2003.
    Leo A. Ryan, Special Assistant Attorney General, Jamestown, for petitioner and ap-pellee; submitted on brief.
    Thomas E. Merrick, Jamestown, for respondent and appellant; submitted on brief.
   SANDSTROM, Justice.

[¶ 1] R.F. is appealing from a Southeast Judicial District Court order denying her petition for discharge from the North Dakota State Hospital. A continuing mental health treatment order was entered on January 8, 2003, requiring her to remain hospitalized and be treated at the North Dakota State Hospital until January 8, 2004, a period of one year, or until further order of the court. R.F. exercised her right to petition the court for discharge. N.D.C.C. § 25-03.1-31(2). The district court appointed an independent expert to examine her and to furnish a report to the court. R.F. argues the court’s finding that she continues to require hospitalization is clearly erroneous. We conclude the district court did not err in finding that R.F. continues to be mentally ill, she is a person requiring treatment, and no adequate alternative treatment exists.

[¶ 2] At the hearing on a petition for discharge, “the burden of proof is the same as in an involuntary treatment hearing.” N.D.C.C. § 25-03.1-31(2). Clear and convincing evidence must establish that the person requires treatment. N.D.C.C. § 25-03.1-19.

[¶ 3] Two experts, one of whom was R.F.’s own independent expert examiner appointed by the court, testified that R.F. suffers from obsessive compulsive disorder. Their testimony also supports the district court’s findings that R.F.’s mental illness substantially impairs her capacity for self-control and that there is a reasonable expectation that serious risk of harm will occur if she is not treated. A person requiring treatment also has the right to the least restrictive means of treatment. N.D.C.C. § 25-03.1-40(2). The testimony supports the district court’s finding that no other adequate alternative exists.

[¶ 4] We affirm the order denying R.F.’s petition for discharge, concluding the district court’s findings are not clearly erroneous.

[¶ 5] GERALD W. VANDE WALLE, C.J., and WILLIAM A. NEUMANN, CAROL RONNING KAPSNER and MARY MUEHLEN MARING, JJ., concur.