text:
    Steven EASTON, Appellee, v. Jeanette HOWARD, Defendant, American Family Mutual Insurance Company (Member of American Family Insurance Group), Appellant.
    No. 06-0936.
    Supreme Court of Iowa.
    June 20, 2008.

      Ted J. Wallace, Davenport, for appellant.
    Jason D. Walke of Gunderson, Sharp and Walke, L.L.P., Des Moines, for appel-lee.
   WIGGINS, Justice.

An uninsured motorist carrier appeals a jury verdict alleging substantial evidence does not support the verdict. Our court of appeals affirmed the judgment of the district court by finding substantial evidence supported the verdict. However, upon further review, we find that substantial evidence did not support a finding that the driver of the vehicle was negligent; therefore, we vacate the decision of the court of appeals, reverse the judgment of the district court as to the uninsured motorist carrier, and remand the case to the district court to enter judgment in favor of the uninsured motorist carrier.

I. Background Facts and Proceedings.

Steven Easton and his girlfriend, Jeanette Howard, traveled with their daughters to the home of Howard’s parents. They arrived at the residence at approximately noon and left between ten and eleven o’clock that evening. Howard consumed approximately ten cans of beer throughout the day while Easton consumed between six to eight beers.

At the end of the evening, Howard drove the couple’s pickup truck the sixty or seventy miles back to their home. Howard drove because Easton did not want to jeopardize his commercial driver’s license by operating a motor vehicle after drinking. The drive home was uneventful.

When Easton and Howard arrived home, he suggested they leave their residence to have a discussion outside the presence of their children. Howard drove them to a local park approximately one mile from their home. At the park the couple argued. When they left the park Howard turned in the opposite direction of their home. Howard drove approximately one mile in the wrong direction before making a u-turn.

Before she completed the u-turn, Easton emerged from the passenger-side door of the pickup truck. There were no other vehicles on the road when Howard made the u-turn. Although Howard does not know how fast she was traveling when she made the u-turn, she did not turn the vehicle any sharper than she ordinarily did when making such a turn. There were no marks on the road to indicate the path of the vehicle or its speed. Howard was able to come to a stop after she realized Easton had left the truck. Howard admits she was still “drunk” at the time she left the park, and that “as far as [she] know[s]” she was still drunk at the time she made the u-turn.

Easton was not wearing his seatbelt at the time he left the truck. Easton has no memory of the incident, and Howard did not see how Easton left the vehicle.

Easton filed a petition against Howard alleging her negligence was a proximate cause of the damages Easton suffered when he hit the ground. Easton joined American Family Mutual Insurance Company as a party because it provided uninsured motorist coverage.

There were three possible theories presented at trial as to how the incident occurred: (1) the door was defective and Easton fell out of the truck; (2) Howard made a sharp u-turn and as a result Ea-ston accidentally pulled on the passenger-side door handle, opened the door himself, and fell out; and (3) Easton voluntarily opened the door of the truck and tried to jump out. The defendant’s expert engineer, who inspected the truck, testified he could not conclusively rule out any of these theories.

As to the first theory, that the door latch failed and Easton fell from the truck, Easton’s testimony was that the door did not latch properly all of the time. Howard’s testimony at trial was that the door latched fine. However, an American Family claims investigator testified that during an interview Howard told her there were some problems with the door not closing.

The expert engineer testified he could not find anything defective with the door latch. He testified there was some weather strip molding loose around the passenger door, and when he manually moved the molding six to eight inches to purposefully interfere with the door, the door only locked in the secondary position, not the primary position. The expert clarified on cross-examination the molding did not inhibit the opening and closing of the door unless he moved it. He further testified even if the door latched in the secondary position, Easton would still have needed to pull on the handle to open the door. He also testified he could not rule out the possibility that the door malfunctioned but that it was unlikely. Finally, the expert testified he did not know how much Easton weighed, how fast Howard was driving, or how much force Easton could have generated against the door.

Additionally, Howard testified the truck had a standard dome light that would come on when the vehicle doors were open. The expert, who inspected the dome light and dashboard warning lights in the vehicle, testified they were all working properly. Howard testified she did not notice any beeps, lights, or other noises to signal the door was ajar when they left the park.

As to the second theory, that Easton accidentally opened the door and fell out, the expert testified that due to the placement of the door handle, it is possible someone would grab for the handle during a u-turn and accidentally open the door. The expert testified this might be especially likely during a sharp u-turn.

As to the final theory, that Easton purposefully opened the door and tried to jump from the vehicle, the expert testified he could not conclude it is more likely than not Easton jumped from the vehicle. Howard made a written statement that was introduced into evidence that indicated Easton fell out of the truck. In her statement Howard also stated she was not sure if the door was latched or shut. When confronted about the statement on direct examination by Easton, Howard testified she told the police the truth. There was also testimony by the American Family claims investigator that during her interview with Howard she learned Easton “fell” out of the truck. On cross-examination, however, Howard testified she believed Easton opened the door himself and jumped out. She reasoned that they were arguing heavily and every time Howard and Easton would argue, Easton would want “to get away from the situation like in the past when he’s left for days at a time.”

Easton testified it was possible that he opened the door himself. A physical therapy record was introduced at trial that indicated Easton was injured when he “jumped from a moving truck.” Easton testified he did not tell his physical therapist this information.

At the conclusion of the evidence, American Family moved for a directed verdict, arguing there was insufficient evidence to prove Howard was negligent, or that her negligence caused Easton’s injury. The court overruled the motion.

After the parties debated the jury instructions, the court submitted only two specifications of negligence to the jury. The specifications were whether Howard was operating the vehicle while intoxicated and whether she failed to maintain control of the vehicle. The jury was instructed they had to find Howard negligent in both respects for Easton to recover.

The jury returned a verdict in favor of Easton. They found Howard was sixty-five percent at fault and assigned the remaining thirty-five percent of the fault to Easton. American Family filed a motion for judgment notwithstanding the verdict, or in the alternative a motion for new trial, arguing Easton failed to prove negligence and proximate cause. The court denied American Family’s motion. American Family appealed, and we routed the case to the court of appeals.

The court of appeals affirmed the judgment of the district court. American Family petitioned for further review, which we granted.

II. Issue.

The only issue we must decide is whether substantial evidence supports the verdict.

III. Scope of Review.

Our rule governing motions for judgments notwithstanding the verdict provides:

If the movant was entitled to a directed verdict at the close of all the evidence, and moved therefor, and the jury did not return such verdict, the court may then either grant a new trial or enter judgment as though it had directed a verdict for the movant.

Iowa R. Civ. P. 1.1003(2). The purpose of the rule is to allow the district court an opportunity to correct any error in failing to direct a verdict. Bangs v. Maple Hills, Ltd., 585 N.W.2d 262, 268 (Iowa 1998); Meeker v. City of Clinton, 259 N.W.2d 822, 827 (Iowa 1977). A motion for judgment notwithstanding the verdict must stand on the grounds raised in the movant’s motion for directed verdict. Watson v. Lewis, 272 N.W.2d 459, 461 (Iowa 1978).

We review the district court’s denial of a directed verdict for correction of errors at law. Anderson v. State, 692 N.W.2d 360, 363 (Iowa 2005). In doing so we view the evidence in the light most favorable to the nonmoving party and take into consideration all reasonable inferences that could be fairly made by the jury. Felderman v. City of Maquoketa, 731 N.W.2d 676, 678 (Iowa 2007). If substantial evidence in the record supports each element of a claim, the motion for directed verdict must be overruled. Id. When reasonable minds would accept the evidence as adequate to reach the same findings, evidence is substantial. Id. On appeal our role is to determine whether the trial court correctly determined there was sufficient evidence to submit the issue to the jury. Id.

IV. Discussion.

The district court’s marshalling instruction explained to the jury that in order for Easton to recover he had to prove the following propositions:

1. The defendant [Howard] was negligent in the operation of the motor vehicle in both of the following ways:
a. Operating a motor vehicle while intoxicated.
b. Failure to maintain control of a motor vehicle.
2. The negligence of the defendant [Howard] was a proximate cause of damage to the plaintiff.

(emphasis added).

Neither party objected to this instruction; thus, it is the law of the case. Boham v. City of Sioux City, 567 N.W.2d 431, 435 (Iowa 1997). As to Easton’s burden of proof, the court instructed the jury as follows:

Whenever a party must prove something they must do so by the preponderance of the evidence.
Preponderance of the evidence is evidence that is more convincing than opposing evidence. Preponderance of the evidence does not depend upon the number of witnesses testifying on one side or the other.

Under the first proposition of the mar-shalling instruction, the fact that Howard was intoxicated at the time of the incident is insufficient to prove her negligence. The record must show substantial evidence to support that Howard failed to maintain control of her vehicle in order for Easton’s negligence claim to survive American Family’s motion for directed verdict. Felderman, 731 N.W.2d at 678.

On the issue of failure to maintain control, the district court instructed the jury as follows:

A driver must have her vehicle under control. It is under control when the driver can guide and direct its movement, control its speed and stop it reasonably fast.

A violation of this duty is negligence. This instruction is consistent with the common-law duty of a driver to maintain control of his or her vehicle. Matuska v. Bryant, 260 Iowa 726, 734, 150 N.W.2d 716, 720-21 (1967).

Negligence is fault, and it is the plaintiffs burden to prove fault by a preponderance of the evidence. Fanelli v. Illinois Cent. R.R., 246 Iowa 661, 664, 69 N.W.2d 13, 15 (1955). It is not to be assumed from the mere fact of an accident and an injury. Id. One theory of how the incident occurred is that Howard made a sharp u-turn causing Easton to accidentally pull the handle of the truck door, open it, and fall out; however, there is no direct or circumstantial evidence other than the mere fact of the accident and Easton’s injuries to prove this theory.

There were no witnesses to the incident other than Howard and Easton. Howard testified she did not turn the vehicle any sharper than she ordinarily did when making such a turn, and she was able to come to a complete stop once she noticed Easton left the vehicle. Howard’s vehicle left no skid, scuff, or other marks on the pavement that would indicate her vehicle sharply changed directions or that her vehicle was traveling at a high rate of speed when she attempted to make the u-turn. The inside passenger door of the vehicle did not exhibit any damage indicating Ea-ston was thrown against the door.

The contradictory testimony by Howard and Easton as to whether Easton “jumped” or “fell” out of the truck does not make either theory more convincing than the other. Additionally, the evidence supports the conclusion that the door latch was working properly at the time of the incident.

Without presenting any evidence other than the fact Howard was intoxicated and that Easton left the vehicle when Howard attempted to execute the u-turn, the jury is left to speculate as to whether she lost control of her vehicle at the time of the incident. As we have said long ago:

Undoubtedly it is not enough there is a mere possibility that the injury is chargeable to the negligence of defendant, and a recovery may not rest wholly on conjecture. There is no case for a jury where the evidence leaves the happening of the accident a mere matter of conjecture and as consistent with the theory of absence of negligence as with its existence. Undoubtedly the plaintiff fails if as matter of law the testimony is in equipoise. Undoubtedly it does not suffice where a conclusion which is consistent with the theory of the plaintiff is as matter of law equally consistent with some other theory. But as said in Lunde v. Cudahy, 139 Iowa 688, 697, 117 N.W. 1063, 1068 (1908), this does not require plaintiff to prove either negligence or proximate cause beyond a reasonable doubt, and where the proven circumstances are such that different minds may reasonably draw different conclusions, or where all the known facts point to the negligence of the defendant as the cause, then, though the evidence be wholly circumstantial, proximate cause is for a jury. It suffices that inferences which plaintiff demands may fairly be drawn.

George v. Iowa & S.W. Ry., 183 Iowa 994, 997-98, 168 N.W. 322, 323 (1918) (internal citations omitted).

These principles of law are still good today. We find the evidence supporting Easton’s theory that Howard failed to maintain control of her vehicle is equally consistent with the evidence supporting American Family’s theory that Easton opened the door to exit the vehicle when Howard slowed the vehicle to make the u-turn. We have previously stated:

“Under our law it is just as pernicious to submit a case to a jury and permit the jury to speculate with the rights of citizens when no question for the jury is involved, as it is to deny to a citizen his trial by jury when he has the right.”

True v. Larimore, 255 Iowa 451, 460, 123 N.W.2d 5, 10 (1963) (quoting J.C. Penny Co. v. Robison, 128 Ohio St. 626, 193 N.E. 401, 404 (1934)). Accordingly, the record did not contain substantial evidence to support the verdict, and the district court should have granted American Family’s motions for directed verdict and judgment notwithstanding the verdict.

V. Disposition.

Because we did not find substantial evidence to support the jury’s verdict on the issue of Howard’s negligence, we vacate the decision of the court of appeals, reverse the judgment of the district court, and remand the case to the district court to enter judgment in favor of American Family.

DECISION OF COURT OF APPEALS VACATED; JUDGMENT OF DISTRICT COURT REVERSED, AND

CASE REMANDED WITH DIRECTIONS.

All justices concur except BAKER, J., who takes no part.


source: Caselaw Access Project

author: GILDEA, Justice.

license: Public Domain

text:
    Beth McGLOTHLIN, creditor, Respondent, v. Michael STEINMETZ, et al., Debtors, and State Farm Insurance Companies a/k/a State Farm Fire and Casualty Company, garnishee, Appellant.
    No. A06-1016.
    Supreme Court of Minnesota.
    June 19, 2008.

      William Laurence Moran, Murnane Brandt, St. Paul, MN, for Appellant.
    Stephen R. O’Brien, Keith D. Johnson, Minneapolis, MN, for Respondent.
   OPINION

GILDEA, Justice.

This case arises out of an underlying personal injury action in which Beth McGlothlin sought damages against Dawn and Michael Steinmetz for injuries McGlothlin suffered as a result of a severe dog bite at the Steinmetz home. The Steinmetzes had a homeowners insurance poiicy issued by appellant-garnishee State Farm Insurance Companies. State Farm appeals from an unpublished decision of the court of appeals, McGlothlin v. Steinmetz, No. A06-1016, 2007 WL 1599035 (Minn.App. June 5, 2007), reversing the district court’s denial of McGlothlin’s motion to add State Farm as a party and to file a supplemental complaint pursuant to Minn.Stat. § 571.75, subd. 4 (2006). Because we conclude that the court of appeals applied the appropriate standard of review and that McGlothlin demonstrated probable cause that State Farm might be liable for her injuries, we affirm.

The parties do not dispute the facts that are material to the determination of this case. Those facts show that on April 8, 2003, a dog owned by the Steinmetzes attacked and bit McGlothlin on the nose and that the attack took place at the Steinmetz home. McGlothlin filed a complaint against the Steinmetzes, alleging negligence and seeking damages for medical expenses incurred and emotional distress suffered as a result of the attack. The Steinmetzes and McGlothlin entered into a Miller-Shugart settlement, collectible only from State Farm. Based on the settlement, the district court ordered that judgment be entered in favor of McGlothlin in the amount of $300,000 — the liability coverage limit under the Steinmetzes’ homeowners insurance policy.

Pursuant to Minnesota’s garnishment statute, McGlothlin next served a garnishment summons and disclosure on State Farm. State Farm denied any liability based on the definition of “insured” in the Steinmetzes’ homeowners insurance policy. The policy defined “insured” as “you and, if residents of your household: * * * your relatives.” The policy excludes insureds from coverage for bodily injury. Because, according to State Farm, McGlothlin was a “resident,” of the Steinmetz home, she was an insured and thus excluded from coverage for the injury at issue.

McGlothlin then moved the district court to permit the addition of State Farm as a party to the action and to grant leave for her to file and serve a supplemental complaint on State Farm pursuant to Minn. Stat. § 571.75, subd. 4. State Farm opposed the motion and submitted an affidavit from a claims representative, which contained factual information on which State Farm relied in denying coverage. In reply, McGlothlin submitted affidavits from herself and the Steinmetzes. Based on these affidavits, McGlothlin argued that she was not a resident of the Steinmetz home and that State Farm had erroneously denied liability.

According to the affidavits, in May 2002, when she was 24 years old, McGlothlin began working for a marketing firm in Hopkins, Minnesota. She earned $14.16 per hour and her employer paid for her health insurance. When she took this job, McGlothlin was living with her parents in Bloomer, Wisconsin, on the farm where she was raised. McGlothlin and Dawn Steinmetz are half-sisters, and during the same month she began working in Hopkins, McGlothlin began living at the Steinmetz home in Eagan, Minnesota, during the work week in order to reduce her commute to work.

McGlothlin continued this living arrangement throughout 2002 and into 2003. McGlothlin spent weekends at her parents’ home and weeknights at the Steinmetz house. At the beginning of each work week, McGlothlin drove directly from Wisconsin to her job in Hopkins. She would stay at the Steinmetz home Monday through Thursday nights and then drive directly from her job back to Wisconsin at the end of each work week. If McGlothlin was not working on a Friday, she would drive from Hopkins to Wisconsin on Thursday night.

Regarding the arrangement with the Steinmetzes, the record reflects that McGlothlin paid them $150 per month for rent and utilities. She had a key to their house and her own room there, where she was permitted to keep some of her clothes. McGlothlin had access to the Steinmetz kitchen, but she ate out frequently and purchased her own food, which she kept in a separate refrigerator near her room in the basement. She typically stayed in her room in the evening and did not interact with the Steinmetzes. Dawn Steinmetz traveled often for work and was not typically home during the week, and she and McGlothlin would not talk to one another while she was away. McGlothlin was responsible for cleaning her room and the nearby bathroom. She occasionally fed and walked the Steinmetz dogs, but was not required to do so.

With respect to her parents’ home in Wisconsin, McGlothlin also had a key to this house and had her own room there. But she paid no rent to her parents for her accommodations at their home, and when she was with her parents, the family typically ate meals together from groceries purchased by McGlothlin’s parents. Her parents also assisted McGlothlin financially by helping to pay student loans and medical bills, and by providing other spending money. McGlothlin’s chores at her parents’ home included cleaning the entire house, laundry, and caring for her dogs and cat. McGlothlin lists her mailing address as her parents’ home, although her employer listed both her parents’ and the Steinmetzes’ addresses as her places of residence for employment records. McGlothlin’s car is registered and insured in Wisconsin. She holds a Wisconsin driver’s license, and is registered to vote there. McGlothlin’s checking and savings accounts are located in Wisconsin, but she has a Minnesota cellular telephone number.

After a hearing on McGlothlin’s motion to add State Farm as a party and for leave for her to file and serve a supplemental complaint, the district court issued an order denying the motion. The court concluded that “[t]he undisputed facts of this case support a finding that, at a minimum, Ms. McGlothlin had dual residency in Bloomer, Wisconsin and at her sister’s home in Eagan, Minnesota.” Because the court concluded that McGlothlin was a resident of the Steinmetz home, she was excluded from coverage under the insurance policy. The court therefore held that McGlothlin had not established probable cause that State Farm was liable, and it denied McGlothlin’s motion.

The court of appeals reversed. Applying a de novo standard of review, the court determined that the evidence regarding residency was “evenly divided” and “established probable grounds that a reasonable fact-finder might determine that McGlothlin was not a resident of the Steinmetz home and that State Farm, therefore, is liable to McGlothlin under the insurance policy.” McGlothlin, 2007 WL 1599035, at *4. We granted State Farm’s petition for review.

State Farm argues that the court of appeals wrongly applied a de novo standard of review and, in the alternative, that even under a de novo standard the district court should be affirmed. We address each argument in turn.

I.

We first examine whether the court of appeals erred by reviewing de novo the district court’s determination that McGlothlin had not met the garnishment statute’s probable cause standard. Under the statute, “where the garnishee denies liability, the creditor may move the court ⅝ ⅜ ⅞ for an order making the garnishee a party to the civil action and granting the creditor leave to file a supplemental complaint against the garnishee * ⅜ *. If probable cause is shown, the motion shall be granted.” Minn.Stat. § 571.75, subd. 4. State Farm argues that a “determination of ‘probable cause’ in a garnishment action should not be disturbed unless ‘manifestly contrary to the evidence and without reasonable evidentiary support.’ ” (Quoting Altman v. Levine & Tanz, Inc., 256 Minn. 48, 51, 97 N.W.2d 460, 463 (1959).) State Farm further contends that the court of appeals erred when it applied a de novo standard of review in this case. McGloth-lin argues that probable cause determinations should be reviewed de novo.

Outside the specific context at issue in this case — a probable cause determination under the garnishment statute — we have recognized that a probable cause determination is one of law and is reviewed de novo. See Chafoulias v. Peterson, 668 N.W.2d 642, 651 (Minn.2003) (noting that in cases involving the existence of probable cause for a search and seizure, we have stated that “the determination of probable cause is a question of law for the court and that an appellate court makes an independent review of the record to determine probable cause * * * where the historical facts material to the existence of probable cause are not contested”); Shane v. Comm’r of Pub. Safety, 587 N.W.2d 639, 641 (Minn.1998) (“When the facts of a case are undisputed, probable cause is a question of law to be reviewed de novo.”); State v. Lee, 585 N.W.2d 378, 383 (Minn.1998) (noting that “we review the district court’s findings of historical fact relating to the probable cause determination for clear error under the clearly erroneous standard but we independently review de novo the issue of probable cause”); Smith v. Munch, 65 Minn. 256, 260, 68 N.W. 19, 21 (1896) (noting that “[i]t is also the settled law that what facts, and whether particular facts, constitute probable cause, is a question of law for the court; but what facts exist in a particular case, when there is a dispute in reference to them, is a question” of fact).

State Farm cites Altman, 256 Minn. at 51, 97 N.W.2d at 463, which addressed a probable cause determination made in the context of the garnishment statute, in support of its argument that a de novo standard should not apply. In Altman, an attorney sued to recover money for legal services rendered to multiple clients. Id. at 49, 97 N.W.2d at 461. The attorney also “served a garnishment summons on the First National Bank of Minneapolis, which he believed held funds due and owing to the * * * defendants.” Id. at 49, 97 N.W.2d at 461. In response, First National denied that there was anything due and owing from it to any of the defendants. Id. at 50, 97 N.W.2d at 462. Subsequently, the attorney “moved for leave to file a supplemental complaint in the garnishment proceeding and supported his motion by an affidavit indicating that he had probable cause to believe that the garnishee bank had erroneously and wrongfully denied liability.” Id. at 50-51, 97 N.W.2d at 462. The district court found “that a genuine issue of fact remained relative to the garnishment liability and that [the attorney] had submitted enough evidence to justify filing a supplemental complaint against the garnishee bank.” Id. at 51, 97 N.W.2d at 462. On appeal we said, “We will not reverse the findings of the trial court unless they are manifestly contrary to the evidence and without reasonable evidentiary support.” Id. at 51, 97 N.W.2d at 463 (citing Inland Prods. Corp. v. Donovan, Inc., 249 Minn. 387, 82 N.W.2d 691 (1957) (holding that the district court’s finding regarding whether 33 cultivators conformed to contract requirements was contrary to the evidence and without reasonable evidentiary support)). This deferential standard was appropriate because the district court had found that there was a question of fact as to the garnishee’s liability. Id. at 51, 97 N.W.2d at 462. That we were reviewing fact-finding in Altman is confirmed by our citation to Inland Products Corp. v. Donovan, Inc., which involved a factual determination by the district court after a bench trial as to whether cultivators conformed to the parties’ contract that required they be equipped with solid steel pivot shafts. 249 Minn. at 389-90, 82 N.W.2d at 693. Such fact-finding, however, is distinct from a probable cause determination based on undisputed historical facts.

In this case, we are not reviewing the underlying historical facts (e.g., how many nights McGlothlin stayed at the Steinmetz home or for how long) because the parties do not dispute these facts. Rather, we are reviewing the district court’s determination that those underlying facts did not constitute probable cause. The “manifestly contrary to the evidence” standard from Altman is therefore not applicable.

State Farm also notes that in some criminal cases we have afforded deference to district court determinations of probable cause, and argues that we should do likewise in this case. We have explained that where a district court has determined that probable cause exists sufficient to support issuance of a search warrant, “we do not review the lower court’s decision de novo. Rather, we afford ‘great deference’ to the issuing judge’s finding of probable cause.” State v. Harris, 589 N.W.2d 782, 787 (Minn.1999). The deference afforded in the warrant context is grounded in the policy determination that “[w]e do not want the warrant requirement to become so burdensome as to discourage the police from seeking review by a judge.” State v. Gail, 713 N.W.2d 851, 858 (Minn.2006) (internal quotation marks omitted). That policy is not at issue here, and State Farm has directed us to no similar policy-based reasons that would counsel in favor of departing from our usual rule of reviewing legal determinations de novo in the context of the garnishment statute. See Travelers Indem. Co. v. Bloomington Steel & Supply Co., 718 N.W.2d 888, 894 (Minn.2006) (questions of law are reviewed de novo).

Where, as in this case, the material facts are not in dispute, appellate courts should review de novo the determination of whether probable cause exists in a garnishment action. Accordingly, we hold that the court of appeals did not err in applying a de novo standard of review to the district court’s determination of probable cause in this garnishment action.

II.

In the alternative, State Farm argues that even reviewed de novo the district court’s probable cause determination should have been affirmed because McGlothlin presented insufficient evidence to establish probable cause. We must first determine what quantum of proof is necessary to establish probable cause under the garnishment statute; we will then discuss whether McGlothlin alleged sufficient facts to satisfy that standard.

A.

State Farm argues that by determining that the residency evidence was “evenly divided,” the court of appeals recognized that McGlothlin failed to demonstrate probable cause that coverage might exist. Essentially, State Farm argues that in order to satisfy the probable cause standard under Minn.Stat. § 571.75, subd. 4, a creditor must establish that the garnishee is more-likely-than-not liable for the debt. We do not agree.

Minnesota Statutes section 571.75, subdivision 4, does not define “probable cause,” but we have said that the term means “some showing by evidence which fairly and reasonably tends to show the existence of the facts alleged.” Gudbrandsen v. Pelto, 205 Minn. 607, 609, 287 N.W. 116, 117 (1939). At this early stage in the garnishment proceedings, the probable cause determination is not a ruling on the merits, but a decision as to whether the creditor may file a supplemental complaint in order to litigate whether the garnishee is liable for the debt. Whether probable cause has been shown therefore depends not on whether the creditor will ultimately be successful, but rather “on whether the evidence shows probable grounds for believing that the garnishee might be held liable under the policy involved.” Id. at 610, 287 N.W. at 117-18 (emphasis added). We therefore hold that in order to satisfy the probable cause threshold in the garnishment statute, the creditor needs to allege facts that show that it is possible that the garnishee is liable for the debt and must support those facts with evidence that fairly and reasonably tends to show the existence of the facts alleged. Cf. Schroeder v. St. Louis County, 708 N.W.2d 497, 507 (Minn.2006) (“[SJummary judgment is inappropriate if the nonmoving party has the burden of proof on an issue and presents sufficient evidence to permit reasonable persons to draw different conclusions.”); Lee, 585 N.W.2d at 382 (noting that “‘probable cause to search [exists] where the known facts and circumstances are sufficient to warrant a man of reasonable prudence in the belief that the contraband or evidence of a crime will be found’ ”) (quoting Ornelas v. United States, 517 U.S. 690, 696, 116 S.Ct. 1657, 134 L.Ed.2d 911 (1996)). We turn next to examination of the evidence to determine if McGlothlin made this showing.

B.

State Farm argues that the “record is clear” that McGlothlin was a resident of the Steinmetz household at the time of the dog bite and that therefore she did not make the necessary probable cause showing. McGlothlin maintains that because she was a resident of her parents’ home in Wisconsin, she cannot be considered a resident of the Steinmetz home in Minnesota, and therefore she satisfied her probable cause burden. The district court found that “[t]he undisputed facts of this case support a finding that, at a minimum, Ms. McGlothlin had dual residency in Bloomer, Wisconsin and at her sister’s home in Ea-gan, Minnesota.” The court of appeals did not discuss the dual residency issue, and State Farm argues that this failure was erroneous. For her part, McGlothlin argues that the legal concept of dual residency only applies in circumstances where children reside with each of their separated or divorced parents, and that the district court was wrong to apply the concept in this case.

We recognized that someone could be a resident of two places for insurance purposes in American Family Mutual Insurance Co. v. Thiem, 503 N.W.2d 789, 790 (Minn.1993). In that case, 10-year-old Joshua Thiem died from injuries resulting from an automobile accident while riding in an automobile driven by his mother. Id. Joshua’s parents’ marriage had been dissolved 4 years earlier. Id. The question was whether Joshua was a resident of his father’s household for auto insurance coverage purposes. Id. Although Joshua’s mother had sole custody, his father enjoyed reasonable visitation, which he regularly exercised. Id. We determined that based on the undisputed facts, “[t]he nature and extent of Joshua’s routine inclusion in his father’s household, together with the continued provision of space for those routine visits demonstrates that parents and child considered the child a resident of his father’s household as well as his mother’s household.” Id. We concluded that Joshua was a resident of his father’s household because the “record satisfies the criteria enunciated in Firemen’s Ins. Co. of Newark v. Viktora, 318 N.W.2d 704, 706 (Minn.1982) (quoting Pamperin v. Milwaukee Mut. Ins. Co., 55 Wis.2d 27, 37, 197 N.W.2d 783, 789 (1972)).” Thiem, 503 N.W.2d at 790. And we noted that while “it is possible to have only one domicile, it is possible for insurance purposes to be a resident of more than one household.” Id.

But Thiem does not purport to address whether an adult, like McGlothlin, can be a resident of two households for insurance purposes. Because of the preliminary nature of the proceedings here — coming to us on review of a determination of probable cause — it may not be necessary for us to resolve in this case the question of whether dual residency should be recognized outside the narrow confines of the factual setting presented in Thiem. Therefore, before addressing the dual residency question further, we look first at whether McGlothlin met the probable cause standard with regard to her residency at the Steinmetz home.

C.

When determining whether someone is a “resident” for insurance purposes, we look at “the nature of the individual’s relationship with the social unit that makes up the insured’s household and not simply at the individual’s connection to the place where the insured resides.” Lott v. State Farm Fire & Cas. Co., 541 N.W.2d 304, 307 (Minn.1995). We consider three factors to inform our analysis of the residency question: (1) whether the individual and the insured are “living under the same roof’; (2) whether the individual and the insured are living “in a close, intimate and informal relationship”; and (3) whether the intended duration is likely to be substantial or indefinite. Id. at 307-08 (citing Firemen’s Ins. Co. of Newark v. Viktora, 318 N.W.2d 704, 706 (Minn.1982)). The duration factor is “significant” because if the individuals at issue have been living under the same roof in a close, informal relationship for an extended period of time, “it is reasonable to conclude that the parties would consider the relationship in contracting about such matters as insurance.” Viktora, 318 N.W.2d at 706 (internal quotation marks omitted).

Our cases reflect that we utilize the factors to inform the analysis of the residency question, but we do not apply them rigidly. Rather, we interpret the factors broadly so that all aspects of the relationship are examined. See Lott, 541 N.W.2d at 308 (holding that adult son was not a resident of his mother’s household because, inter alia, he did not regularly live in his mother’s home, only spent 10 weekends and 1 full week at her cabin each year, was employed and self-supporting, did not look to his mother for aid, did not maintain any clothing or furnishings at her home, and did not receive mail at either her home or cabin); Viktora, 318 N.W.2d at 707 (concluding that son who lived with his parents for approximately 4 months during a work strike was a resident of his parents’ household because the son had no practical means of supporting himself; he ate, slept, received his mail, and did chores at his parents’ home; his mother did his laundry; and he did not pay rent). Moreover, before we recognized these factors, we followed the same fact-specific analysis and examined the entire nature of the relationship in assessing the residency question. See Rosenberger v. Am. Family Mut. Ins. Co., 309 N.W.2d 305, 309-10 (Minn.1981) (upholding district court’s finding that daughter was a resident in stepfather’s household because she was not self-supporting, had lived in the home for 2 months, had no specific plans to leave the home, and was 19 years old at the time of the accident); Pederson v. All Nation Ins. Co., 294 N.W.2d 693, 695 (Minn.1980) (recognizing that the “determination of ⅜ * * whether individuals are living together as members of the same household rests on the facts of each case”); Fruchtman v. State Farm Mut. Auto. Ins. Co., 274 Minn. 54, 57, 142 N.W.2d 299, 301 (1966) (finding that 27-year-old son was not a resident of mother’s household where he was self-supporting, had not been in the home for any period of time longer than 1 to 2 weeks in duration for the past 2½ years, and at the time of the accident was visiting his mother for a period of no more than 2 weeks); see also Pamperin, 197 N.W.2d at 788 (noting that “the intended duration oftentimes must be determined only after a thorough examination of all the relevant facts and circumstances surrounding the relationship”). With these principles in mind, we proceed to examine the record in the present case.

The record reflects that McGlothlin spent 3 to 4 nights per week at the Steinmetz home, that she had a key to the house and her own bedroom and bathroom there, and that she had been maintaining this arrangement for approximately 11 months at the time of the dog attack. But the record reflects little, if any, evidence that McGlothlin and the Steinmetzes had a close, intimate, or informal relationship. Affidavits indicate that McGlothlin did not eat meals or interact with the Steinmetzes when they were at home together, while in contrast she and her parents regularly ate meals together. McGlothlin’s responsibilities at the Steinmetz house included only cleaning her room and the nearby bathroom. She occasionally fed and walked the Steinmetz dogs, but she was under no obligation to do so. In contrast, McGloth-lin was responsible for cleaning her parents’ entire house, doing laundry, and caring for her dogs and cat. Finally, the Steinmetzes charged McGlothlin monthly rent, and while the amount was relatively small and potentially suggestive of a close relationship, McGlothlin’s parents in contrast charged her no rent.

In order to demonstrate probable cause, McGlothlin only had to show that it was possible that State Farm is liable for her injuries — in other words, that she “might” not be a resident of the Steinmetz home. Gudbrandsen, 205 Minn. at 610, 287 N.W. at 118. McGlothlin produced enough evidence to satisfy this low threshold. Although there is evidence that she lived under the same roof as the Steinmetzes for a long period of time, length of stay alone is not determinative of the residency question, and the duration of McGlothlin’s stay does not compel the conclusion that the Steinmetzes would have considered the arrangement in contracting for insurance. See Viktora, 318 N.W.2d at 706. Moreover, the seemingly overarching concern in the residency cases is whether the relationship between the parties constitutes a “social unit which is something more than a group of individuals who occasionally spend time together in the same place.” Lott, 541 N.W.2d at 307. McGlothlin produced enough evidence to support the reasonable conclusion that her relationship with the Steinmetzes was not that of a social unit. We therefore hold that she demonstrated probable cause and that the district court should have granted her motion. Because we hold that McGlothlin demonstrated probable cause that she might not be a resident of the Steinmetz home, we need not reach the question of whether an adult can be a resident of two households for purposes of insurance.

Affirmed.

MAGNUSON, C.J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.

      . See Miller v. Shugart, 316 N.W.2d 729 (Minn. 1982). A Miller-Shugart agreement protects an insured "who has been left to her own defenses because the insurer refuses to defend against the plaintiff’s liability claim. The insured may escape this costly dilemma if the plaintiff is willing to undertake the burden and risk of collecting the Miller-Shugart settlement from the insurer.” Koehnen v. Herald Fire Ins. Co., 89 F.3d 525, 529 (8th Cir.1996).

      . Garnishment proceedings are governed by statute in Minnesota. See Minn.Stat. ch. 571 (2006). Garnishment is “an ancillary proceeding" to a civil action, Minn.Stat. § 571.71, and may be commenced by service of a garnishment summons together with a garnishment disclosure form, Minn.Stat. § 571.72. In the disclosure, the creditor sets forth the garnishee's indebtedness. Minn. Stat. § 571.75, subd. 1. If, in response to the summons and disclosure, the garnishee denies liability, the creditor may move the court for permission to add the garnishee as a party to the action and for leave to file a supplemental complaint setting forth the facts giving rise to the garnishee's liability. Minn.Stat. § 571.75, subd. 4. The statute directs that such a motion "shall be granted” if probable cause is shown. Id.

      .The policy does not define the terms “resident” or “household,” and it does not contain the names of the individuals insured under the Steinmetz policy.

      . McGlothlin asked her employer to stop using the Steinmetzes’ address as her residence, but it is unclear when she made this request.

      . A determination that de novo review is appropriate in this case is bolstered by the fact that, typically, " [¡Interpretation of an insurance policy and application of the policy to the facts in a case are questions of law that we review de novo.” Am. Family Ins. Co. v. Walser, 628 N.W.2d 605, 609 (Minn.2001); see Meister v. W. Nat'l Mut. Ins. Co., 479 N.W.2d 372, 376 (Minn.1992) ("[T]he interpretation of insurance contract language is a question of law as applied to the facts presented.”).

      . We drew the three factors from Pamperin v. Milwaukee Mutual Insurance Co., 55 Wis.2d 27, 197 N.W.2d 783, 788 (1972). In Pamperin, the Wisconsin Supreme Court said that "no one factor is controlling but that all of the elements must combine to a greater or lesser degree in order to establish the relationship” necessary for a residency determination. Id. at 789.


author: GILDEA, Justice. PAGE, Justice

text:
    STATE of Minnesota, Respondent, v. Johnny RAMBAHAL, Appellant.
    No. A07-512.
    Supreme Court of Minnesota.
    June 19, 2008.

      David Lorin Warg, O’Connell, Wermager & Warg, Hastings, MN, Mark D. Ny-vold, St. Paul, MN, for Appellant.
    Thomas Earl Lockhart, Special Staff Assistant County Attorney, Hastings, MN, Attorney General — Criminal, St. Paul, MN, for Respondent.
   OPINION

GILDEA, Justice.

Appellant Johnny Rambahal is charged with violating Minn.Stat. § 624.713, subd. 1(b) (2006), which prohibits him from possessing a pistol because of a prior conviction for a crime of violence. In the course of discovery, the State disclosed two police reports from a separate robbery investigation. These police reports contain statements of a “concerned citizen,” whom Rambahal argues has exculpatory information in his case. Rambahal successfully moved the district court for an order compelling disclosure of the citizen informant’s identity. The State appealed the order, and in an unpublished decision, the court of appeals reversed. State v. Rambahal, No. A07-512, 2007 WL 2770261 (Minn.App. Sept. 25, 2007). Rambahal now appeals. Because we conclude that the court of appeals erred in assessing the potential helpfulness of the informant’s identity to the defense, we reverse. But because we also conclude that the district court erred in ordering disclosure without considering the public interest, we remand to the district court for further proceedings.

This action arises from a Burnsville police officer’s encounter with Rambahal on January 1, 2007. The complaint alleges that the officer encountered two males walking down the middle of a county road in Dakota County shortly before 1:00 a.m. on New Year’s Day. When the officer got out of her vehicle and approached the men, they verbally identified themselves as Rambahal and Donta Holley. Based on her prior dealings with the two men, the officer radioed for additional officers to come to the scene. The officer also learned from dispatch that there was an outstanding felony warrant for Rambahal. The officer arrested Rambahal on the outstanding warrant. In the course of a pat-down search, another officer discovered a nearly full box of .357-caliber ammunition on Rambahal. Rambahal also had several loose rounds of the same type of ammunition on his person.

After placing Rambahal in the back of her squad car, the officer conducted a search of the immediate area incident to his arrest. The officer found a loaded .357-caliber pistol “on top of the newly fallen snow next to where Rambahal was standing when [the officer] initially had contact with him.” The record does not indicate where Holley was standing in relation to Rambahal or to where the pistol was found. The pistol contained three live rounds, and three rounds had been fired. The ammunition in the pistol was the same caliber as was found on Rambahal.

Rambahal and Holley both waived their Miranda rights. Rambahal told the officer that the pistol did not belong to him and that he did not know who owned the pistol. Holley told the officer that Ramba-hal carried the pistol for protection and that upon seeing the officer, Rambahal dropped the pistol on the ground.

On January 3, 2007, Rambahal was charged with possessing a firearm in violation of Minn.Stat. § 624.713, subd. 1(b), which prohibits “a person who has been convicted of * * * a crime of violence” from possessing a pistol. Rambahal has a prior conviction for third-degree burglary in Ramsey County and is therefore prohibited from possessing a firearm under the statute.

In the course of discovery and about 2 weeks before trial, the State disclosed to defense counsel two police reports pertaining to a string of aggravated robberies in Burnsville. The police reports state that a Burnsville police officer spoke with a citizen informant on December 29, 2006, regarding an aggravated robbery of a Burger King restaurant and of a Kwik Trip store earlier in December 2006. The informant, whose name was not included in the reports, told police he “was scared to have a name on the report because of the level of danger presented by the group committing the robberies.”

The reports reflect that the informant identified a number of individuals as the perpetrators of the robberies, including Holley, Rambahal’s brother, and another individual. The informant also described the weapon that was used in the robberies. The informant stated that he learned from Rambahal that Holley owned the pistol used in the robberies and that Holley was known to carry the pistol under the seat of his vehicle. The informant also stated that his cousin had seen Holley hold the pistol and that the cousin heard Holley say that he should take his pistol and “go get” a person who had made Holley mad.

After receiving the reports and pursuant to Minn. R.Crim. P. 9.01, subd. 2(3), Ram-bahal moved the district court to order the State to disclose the identity of the informant referenced in the police reports. The court heard oral arguments on the issue and thereafter ordered the State to disclose the identity of the informant. In its order, the court found that testimony by the informant that the pistol belonged to Holley would be helpful to Rambahal in overcoming an element of the offense with which he was charged and that it could help Rambahal find other individuals who could corroborate the informant’s information regarding the ownership of the pistol.

The State appealed the district court’s order. In an unpublished decision, the court of appeals reversed. The court held, as a threshold issue, that a “critical impact analysis was not required on an appeal from a discovery order”; and that the district court abused its discretion when it ordered the State to disclose the identity of the informant. Rambahal, 2007 WL 2770261, at *2-3. We granted Rambahal’s petition for review.

I.

As a preliminary matter, we address the issue of critical impact. Minnesota Rule of Criminal Procedure 28.04 provides for pretrial appeals by the State in limited circumstances. As a “threshold matter” in any pretrial appeal by the State, “the state must ‘clearly and unequivocally’ show both that the trial court’s order will have a ‘critical impact’ on the state’s ability to prosecute the defendant successfully and that the order constituted error.” State v. Barrett, 694 N.W.2d 783, 787 (Minn.2005) (quoting State v. Scott, 584 N.W.2d 412, 416 (Minn.1998)); see also Minn. R.Crim. P. 28.04, subd. 2(2). This threshold condition is intended to be a demanding standard and requires the State to show that the ruling “ ‘significantly reduces the likelihood of a successful prosecution.’ ” State v. McLeod, 705 N.W.2d 776, 784 (Minn.2005) (quoting State v. Joon Kyu Kim, 398 N.W.2d 544, 551 (Minn.1987)).

The court of appeals, relying on State v. Renneke, 563 N.W.2d 335, 337 (Minn.App.1997), concluded that the State was not required to show that the district court’s order would have a critical impact on the State’s case because the critical impact requirement applies to pretrial suppression orders, but not to pretrial discovery orders. Rambahal, 2007 WL 2770261, at *2. Furthermore, the court held that the State is not required to show the critical impact of a pretrial order in the unique circumstances presented by an order requiring disclosure of a confidential informant. Id. (citing State v. Solheim, 477 N.W.2d 785, 786-87 (Minn.App.1991) (holding that the State is not required to show that it “would dismiss the prosecution rather than disclose the informant”)).

We have never adopted the court of appeals’ rule exempting the State from demonstrating critical impact in discovery-related pretrial appeals, and such a rule appears to be at odds with our prior cases and the plain language of Minn. R.Crim. P. 28.04. In this case, however, the parties did not petition for review regarding critical impact, and the question of critical impact was not briefed. Because the parties have not briefed the issue of whether we should make an exception to the critical impact requirement for pretrial orders regarding disclosure of a confidential informant’s identity or overrule Solheim, we do not address this issue further in this case.

II.

We turn next to the merits of the issue raised in this appeal. Rambahal argues that the court of appeals erred in concluding that the informant’s identity would not be material to the defense, and that because the district court did not abuse its discretion when it ordered the State to provide the identity of the informant, the disclosure order should be affirmed. The State argues that the informant’s identity was not necessary to the defense because the informant was a mere transmitter of information and could offer no admissible testimony at Rambahal’s trial. Accordingly, the State argues, the district court abused its discretion in ordering disclosure. We review a district court order regarding disclosure of a confidential informant’s identity for an abuse of discretion. See State v. Martinez, 270 N.W.2d 121, 122 (Minn.1978).

The dispute here arises because the common law affords the government a “privilege to withhold from disclosure the identity of persons who furnish information” to law enforcement. Roviaro v. United States, 353 U.S. 53, 59, 77 S.Ct. 623, 1 L.Ed.2d 639 (1957). We have similarly recognized the State’s common law privilege to withhold a confidential informant’s identity because of the State’s “legitimate interest in protecting the identity of persons who provide information to law enforcement.” State v. Litzau, 650 N.W.2d 177, 184 (Minn.2002).

The privilege is not unlimited, however, and it gives way when “the disclosure of an informer’s identity, or of the contents of his communication, is relevant and helpful to the defense of an accused, or is essential to a fair determination of a cause.” Roviaro, 353 U.S. at 60-61, 77 S.Ct. 623; see also Litzau, 650 N.W.2d at 184. When a defendant seeks disclosure of a confidential informant’s identity, “[t]he defendant has the ultimate burden of establishing the need for the disclosure.” State v. Ford, 322 N.W.2d 611, 614 (Minn.1982). There is “[n]o fixed rule with respect to disclosure.” State v. Wiley, 295 Minn. 411, 422-23, 205 N.W.2d 667, 676 (1973). The analysis instead must be done on a case-by-case basis with “[t]he public’s interest in protecting the flow of information ⅜ * * balanced against the individual’s right to prepare his defense.” Id. at 423, 205 N.W.2d at 676. Our cases reflect that the emphasis in this inquiry is on fundamental fairness. See, e.g., Hughes v. Dakota County, 278 N.W.2d 44, 45 (Minn.1978); State v. Houle, 257 N.W.2d 320, 323 (Minn.1977); State v. Werber, 301 Minn. 1, 7-9, 221 N.W.2d 146, 150-51 (1974); State v. Purdy, 278 Minn. 133, 144, 153 N.W.2d 254, 261 (1967).

We have articulated four factors for district courts to consider in determining whether to order disclosure of a confidential informant’s identity: (1) “[wjhether the informant was a material witness”; (2) “[wjhether [the] informer’s testimony will be material to the issue of guilt”; (3) “[wjhether testimony of officers is suspect”; and (4) “[wjhether the informant’s testimony might disclose entrapment.” Syrovatka v. State, 278 N.W.2d 558, 561—62 (Minn.1979) (citing 2 Jack B. Weinstein & Margaret A. Berger, Weinstein’s Evidence § 510(06)). These four factors, however, are not exclusive. See State v. Medal-Mendoza, 718 N.W.2d 910, 919 (Minn.2006) (stating that “[sjpecific factors a district court should consider * ⅜ * include” the Syrovatka factors (emphasis added)). The four factors, instead, are to be used to inform a district court’s analysis, which remains a balancing test between the defendant’s right to prepare a defense and the public’s interest in effective law enforcement. The central focus of this inquiry is “whether disclosure is necessary to a fair determination of the defendant’s guilt.” Ford, 322 N.W.2d at 614.

A. Rambahal’s Interest

In applying the balancing test, a district court must first consider the defendant’s interest in obtaining the identity of the confidential informant. The Syrovatka factors inform a district court’s analysis of a defendant’s interest in disclosure. The parties agree that only the first two Syro-vatka factors are relevant here.

The first Syrovatka factor acknowledges a defendant’s interest in obtaining disclosure in the event that the informant is a material witness. Syrovatka, 278 N.W.2d at 561. Our cases distinguish among informants who are participants in criminal activity, eyewitnesses to that activity, and those simply reporting information to police. See Ford, 322 N.W.2d at 614; Purdy, 278 Minn. at 145, 153 N.W.2d at 262. For example, courts have ordered disclosure in cases where the informant is an active participant in criminal activity. E.g., Roviaro, 353 U.S. at 64, 77 S.Ct. 623. But “[wjhere the informant is merely a transmitter of information * * ⅜ disclosure is generally not required.” Litzau, 650 N.W.2d at 184 (citing Houle, 257 N.W.2d at 323).

It is undisputed in this case that the informant was not an active participant in or an eyewitness to the offense of Ramba-hal possessing a pistol in violation of Minn. Stat. § 624.713. The informant, instead, is most accurately characterized as a transmitter of information. Although our cases ascribe little, if any, weight to a defendant’s interest in disclosure in cases where an informant is a mere transmitter, the materiality of the informant as a witness is not conclusive in the overall analysis. E.g., Purdy, 278 Minn. at 145, 153 N.W.2d at 262 (denying disclosure not only on the fact that the informant was a mere transmitter of information, but also on the fact that the informant was “not a competent witness to the crime itself’ and that “the name of the informant [was] not essential to the defense”). In other words, the fact that the informant is merely a transmitter of information will not be dispositive in all cases. Even in such a circumstance, fundamental fairness requires that the court consider whether the identity of the informant might be helpful to the defense, which leads in this case to consideration of the second Syrovatka factor.

This factor recognizes a defendant’s interest in disclosure where “the informer’s testimony will be material to the issue of guilt.” Syrovatka, 278 N.W.2d at 562. The materiality of an informant’s “possible testimony must be determined by reference to the offense charged * * * and the evidence relating to that count.” Roviaro, 353 U.S. at 62, 77 S.Ct. 623. Where “there is little likelihood that an informer’s testimony will be helpful to defendant in overcoming an element of the crime charged, the disclosure is not required.” Syrovatka, 278 N.W.2d at 562.

The State argues that the second factor relates only to “testimony” from the informant. In this case, according to the State, the informant has no admissible testimony to offer because the information he has consists solely of hearsay accounts about the ownership of the pistol. But it is not always possible to determine in a pretrial setting what information will be admissible during a future trial. This factor therefore should not be read as limited only to those situations where the defendant can prove at the pretrial stage that the informant will offer evidence admissible at trial. Cf. Minn. R. Civ. P. 26.02(a) (noting that a party may discover “[r]ele-vant information” even though it is not admissible at trial as long as the information “appears reasonably calculated to lead to the discovery of admissible evidence.”). Even if it cannot be determined pretrial whether the informant himself could offer admissible evidence, the court should still proceed to examine the nature of the information the informant possesses in order to determine whether disclosure of the informant’s identity is warranted.

The information Rambahal focuses on consists of two of the informant’s statements: (1) that the pistol was owned by Holley and he was known to carry it in his car, and (2) that the informant’s cousin had observed Holley hold the pistol and say that he should take his pistol and “go get” a person who had made him mad. Regarding this information, the court of appeals held that “the state must prove only that Rambahal possessed the pistol, either actually or constructively,” and not that he owned the pistol. Rambahal, 2007 WL 2770261, at *3. The court therefore concluded that “whether Rambahal owned the pistol is not material to whether he possessed” it. Id. Because the second factor was not met, the court of appeals held that the district court erred in ordering disclosure. We conclude that the court of appeals construed the second factor too narrowly.

The overarching concern in applying the Syrovatka factors must be whether disclosing the informant’s identity would be helpful to the defense in overcoming an element of the charge. Litzau, 650 N.W.2d at 184. The information the informant possesses does not have to be dispos-itive, by itself, on an element of the charge, as the court of appeals seems to have concluded. Rather, the information simply needs to be helpful to the defense in overcoming a charge. Id.

In examining the potential for helpfulness, we turn to the facts in the record. The record reflects that the officer encountered two individuals on the Dakota County road on January 1, 2007, but she did not see either individual in possession of the pistol. According to the complaint, the pistol was found on top of the freshly fallen snow, next to where Rambahal was standing. But the complaint also alleges that the officer encountered Holley and Rambahal as they were walking together. The informant’s statements may be material to whether Rambahal was in possession of the pistol because the statements pertain to the other individual present at the scene when the officer found the pistol. Although ownership does not determine possession and cannot by itself overcome an element of the charge, the fact that the other person with Rambahal may have owned the pistol could be “helpful to defendant in overcoming an element of the crime charged.” Syrovatka, 278 N.W.2d at 562 (emphasis added). For example, evidence from the informant might be used to aid in establishing reasonable doubt by supporting a defense theory that Holley, the person who owned the pistol and who was with Rambahal when the pistol was found, was in possession of it on the night in question. In addition, the complaint reflects that Holley told police that Ram-bahal carried the pistol for protection. Evidence from the informant about Holley’s ownership might be admissible to impeach Holley’s version of events, and thus it would be helpful to the defense.

In summary, we conclude that the relevant Syrovatka factors, primarily the second factor, indicate that the information the informant relayed may be helpful to Rambahal’s defense. We turn next to consideration of the balance between Ramba-hal’s interest and the public interest served by the privilege that protects a confidential informant’s identity.

B. Balance Between Rambahal’s Interest and The Public Interest

The United States Supreme Court has highlighted the importance of the government’s privilege to protect the confidentiality of its informants as “furthering] and protecting] the public interest in effective law enforcement.” Roviaro, 353 U.S. at 59, 77 S.Ct. 623. The public interest is served because the privilege encourages performance of the “obligation of citizens to communicate their knowledge of the commission of crimes to law enforcement officials.” Id. We have said that the privilege serves the important purpose of “adding] to police knowledge” because law enforcement “cannot personally know all that goes on in the criminal community.” Purdy, 278 Minn. at 147, 153 N.W.2d at 262.

The district court did not analyze the public interest in its order and memorandum. The court simply concluded that because the informant’s identity was “necessary for [Rambahal] to overcome an element of the crime charged and therefore to prepare a defense,” his need for the identity “necessarily outweighs any hindrance disclos[ure] may have on effective law enforcement.” We agree with the district court that if a defendant shows that disclosure is necessary for him to overcome an element of a charged crime, disclosure would be warranted. But Ramba-hal has not made such a showing.

As demonstrated above, Ramba-hal has shown that the information the informant has may be helpful to his defense. But Rambahal has not shown that the disclosure of the informant’s identity is necessary for him to have a fair trial. For example, the record does not reflect how much of the informant’s information comes from Rambahal himself, when the informant learned his information, when or under what circumstances the informant’s cousin saw Holley with the pistol, and when or under what circumstances the cousin heard Holley say that he owned the pistol. Because this information is not in the record, we conclude that the district court erred in finding that disclosure of the informant’s identity was necessary for Rambahal to overcome an element of the offense.

A defendant does not have to show, however, that the disclosure is necessary for him to overcome an element of the charge in order to overcome the privilege. Disclosure may also be warranted if the informant’s identity is sufficiently helpful to the defense. See Litzau, 650 N.W.2d at 184. But we cannot determine the level of helpfulness in this case because of the deficiencies in the record discussed above regarding the timeliness of the information in relation to the events at issue in this case. In addition, the record does not reflect that the district court gave any consideration to the safety concerns raised by the informant in the police reports. Such considerations are encompassed within the proper analysis of the relevant public interest, and without this information the public’s interest cannot be properly weighed against the potential helpfulness to the defense. In the end, the district court’s decision should articulate if the informant’s information is sufficiently helpful to the preparation of the defense that the public interest must give way to ensure that the defendant receives a fair trial.

Even though the record as it stands is not sufficient to sustain the district court’s conclusion that the privilege should give way, we have recognized that if a defendant “is able to establish a basis for inquiry by the [district] court, then the court should hold an in camera hearing to consider affidavits or to interview the informant in person” in order to determine whether to order disclosure. Ford, 322 N.W.2d at 614; see also State v. Moore, 438 N.W.2d 101, 106 (Minn.1989) (noting that there is a “lesser burden of establishing a basis for inquiry by the court in an in camera hearing” than that required to support a disclosure order). We hold that Rambahal has made the requisite showing in this case based on the potential helpfulness of the informant’s information to meet this “lesser burden.” Accordingly, we remand this matter to the district court for an in camera hearing and further proceedings consistent with this opinion.

Reversed and remanded.

MAGNUSON, C.J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.

Dissenting, PAGE, J.

PAGE, Justice

(dissenting).

I respectfully dissent. In appealing a pretrial order, the State must show clearly and unequivocally that the order will have a critical impact upon the prosecution. State v. McLeod, 705 N.W.2d 776, 784 (Minn.2005). Critical impact is a threshold issue, and “ ‘[i]n the absence of critical impact we will not review a pretrial order.’ ” Id. (quoting In re L.E.P., 594 N.W.2d 163, 168 (Minn.1999)); see also State v. Scott, 584 N.W.2d 412, 416 (Minn.1998) (explaining that the critical impact of the pretrial order must be first determined before deciding whether the order was error); State v. Joon Kyu Kim, 398 N.W.2d 544, 550 (Minn.1987) (explaining that critical impact had been a threshold requirement to review before the establishment of the court of appeals).

Historically, appeals by the government “in criminal cases are something unusual, exceptional, not favored.” Arizona v. Manypenny, 451 U.S. 232, 245, 101 S.Ct. 1657, 68 L.Ed.2d 58 (1981) (citation and quotation marks omitted). The common law rule is that the government has no authority to appeal in a criminal case absent express legislative authorization. Id. “Both prudential and constitutional interests contributed to this tradition. The need to restrict appeals by the prosecutor reflected a prudential concern that individuals should be free from the harassment and vexation of unbounded litigation by the sovereign.” Id. at 246, 101 S.Ct. 1657.

“In Minnesota, the legislature first departed from this longstanding rule in 1967 when it enacted Minn.Stat. § 632.11 (1967) authorizing state appeal of certain pretrial orders.” Kim, 398 N.W.2d at 549. The critical-impact rule “originated in [Minn. Stat. § 632.12 (1967) (requiring state to file critical impact statement with notice of appeal)] and was retained with some modifications by this court after adoption of the Rules of Criminal Procedure.” State v. Barrett, 694 N.W.2d 783, 787 n. 3 (Minn.2005). “There are good reasons for strictly construing the rule granting the prosecution the right to appeal a pretrial order. The appeal occurs while the defendant is awaiting trial, presumed innocent, and possibly confined. The defendant’s right to a speedy trial is also implicated by the prosecution taking a pretrial appeal.” Id. at 787.

The criminal rules require that the prosecutor’s oral notice of intent to appeal a pretrial order include a statement for the record as to how the pretrial order will have a critical impact on the prosecution. Minn. R.Crim. P. 28.04, subd. 2(1). The rules also require that the statement of the case filed with the notice of appeal include a summary statement as to how the pretrial order will have a critical impact on the prosecution. Minn. R.Crim. P. 28.04, subd. 2(2). In other words, a prosecution appeal is authorized if the pretrial order will have a critical impact upon the prosecution. As a corollary, authority for a prosecution appeal of a disclosure order is lacking unless the State makes the requisite threshold showing of harm, which was not done in Rambahal’s case.

Most jurisdictions allow the prosecution to appeal orders suppressing evidence, often by means of statutes that “speak generally of orders ‘suppressing or excluding’ evidence, and have been held applicable to a broad range of pretrial orders limiting the government’s proof at trial.” 7 Wayne R. LaFave, Jerold H. Israel, Nancy J. King & Orín S. Kerr, Criminal Procedure, § 27.3(c) at 39-40 (3d ed. 2007). Several jurisdictions limit these appeals to cases in which the suppressed evidence will have a critical or substantial impact on the outcome of the government’s case. Id. at 42. Hawaii has specifically authorized the immediate appeal of an order denying a prosecution request for a protective order allowing nondisclosure of a witness for personal safety reasons. Haw.Rev.Stat. § 641-13(8) (Supp.2007). But “[m]any jurisdictions allowing prosecution appeals from pretrial interlocutory orders do not extend that authority beyond orders suppressing evidence.” LaFave, supra, at 42-43.

We have read our rules as encompassing prosecution appeals of orders suppressing or excluding evidence. E.g., McLeod, 705 N.W.2d at 787 (holding that exclusion of Spreigl evidence would have a critical impact on pending trial); Scott, 584 N.W.2d at 420 (holding that suppression of confession would significantly reduce the likelihood of a successful prosecution). Our rules limit these appeals to cases in which the suppression or exclusion orders will have a critical impact on the prosecution. Unlike Hawaii, there is no express authorization in our rules for immediate appeal of a disclosure order in the absence of critical impact. We do have “inherent authority to [accept] an appeal in the interests of justice even when the filing or service requirements set forth in a rule or statute have not been met.” Barrett, 694 N.W.2d at 788 n. 4 (citation and quotation marks omitted). Whether this pretrial appeal does or does not merit departure from the threshold requirement to review in the interests of justice, I still do not believe we can reach the disclosure issue without first determining the threshold issue. Therefore, at a minimum, I would have the parties brief the threshold issue.

      . These two reports cover the same events with minor variations and appear to be written by the same police officer, but it is unclear from the record why there are two versions.

      . The parties do not dispute that the pistol used in the robberies is same pistol Rambahal is charged with possessing on January 1, 2007.

      . There is a statutory privilege providing that "[a] public officer shall not be allowed to disclose communications made to the officer in official confidence when the public interest would suffer by the disclosure.” Minn.Slat. § 595.02, subd. 1(e) (2006). The parties do not contend that this privilege is implicated in this case.

      . The U.S. Supreme Court has held that the inquiry depends on “the particular circumstances of each case” and has identified the following nonexclusive factors: "the crime charged, the possible defenses, the possible significance of the informer's testimony, and other relevant factors.” Roviaro, 353 U.S. at 62, 77 S.Ct. 623.


author: ANDERSON, G. BARRY, Justice.

text:
    Scott D. AUGUSTINE, M.D., Appellant, v. ARIZANT INC., et al., Respondents.
    No. A06-12381.
    Supreme Court of Minnesota.
    June 26, 2008.

      David Richard Marshall, Fredrikson & Byron, P.A., Minneapolis, for appellant.
    David B. Potter, Oppenheimer Wolff & Donnelly, Minneapolis, for respondent.
    Michael E. Robinson, Dept, of Justice, Washington, DC, for U.S.
    John Steven Garry, St. Paul, for State.
   OPINION

ANDERSON, G. BARRY, Justice.

Appellant Scott D. Augustine, M.D., founder and former officer of respondent Augustine Medical, Inc., pleaded guilty to a misdemeanor violation of 42 U.S.C. § 1320a-7b(a)(2) (2000) and 18 U.S.C. § 2 (2000). Appellant sought indemnification for his fine and attorney fees from respondent Arizant, Inc., Augustine Medical’s parent company. Arizant refused appellant’s indemnification request, and appellant commenced this action seeking indemnification pursuant to Minn.Stat. § 302A.521 (2006) and the terms of the parties’ separation and release agreement. The jury returned a verdict in appellant’s favor. The court of appeals reversed appellant’s indemnification award, concluding that the district court erred in denying respondents’ motion for summary judgment because appellant’s conviction and sworn admissions conclusively established that he did not act in good faith. Augustine v. Arizant Inc., 735 N.W.2d 740, 744-46 (Minn.App.2007). We reverse the decision of the court of appeals and remand for further proceedings.

Appellant is an anesthesiologist and inventor who founded respondent Augustine Medical, Inc., in 1987 and served as the company’s CEO and chairman of the board. He invented a product known as ‘Warm-Up Active Wound Therapy” for the treatment of chronic wounds. Because Warm-Up is typically administered in nursing homes, outpatient rehabilitation facilities, and home healthcare settings, all of which are heavily dependent on Medicare reimbursement, Augustine Medical considered Warm-Up’s eligibility for Medicare coverage to be an important issue. Appellant testified that the initial determination regarding whether a claim will be reimbursed by Medicare is made by a “fiscal intermediary,” a private insurance company that contracts with Medicare to handle claims for a particular region. According to appellant, a reimbursement claim for an item may be submitted even if a fiscal intermediary has denied coverage, and such claims are often paid on appeal. Augustine Medical received advice regarding Medicare reimbursement for WarmUp from director of reimbursement Paul Johnson, in-house counsel Randy Benham, outside Medicare consultant Phillip Zarlen-go, and the law firms of Oppenheimer Wolff & Donnelly LLP and Vinson & El-kins LLP.

In November 1999, Augustine Medical learned that TriSpan Health Services, a fiscal intermediary, had determined that Warm-Up would not be reimbursed by Medicare. Appellant and other Augustine Medical representatives made a Warm-Up presentation to TriSpan in January 2000, and TriSpan subsequently reversed field and notified Augustine Medical that Warm-Up would be reimbursed by Medicare. But, on June 27, 2000, appellant received a letter from TriSpan that read as follows: “After careful review of your submitted brochures and monographs and a literature review, we have decided that the Warm-Up’ therapy is investigational at this time. We will review the topic as additional studies warrant.” Appellant understood the term “investigational” to refer to devices that have not been approved for marketing by the Food and Drug Administration (FDA). Because the FDA had approved the marketing of Warm-Up in 1997, appellant and others at Augustine Medical were confused by the TriSpan letter.

In e-mails to his colleagues at Augustine Medical, Paul Johnson explained that the TriSpan “letter is a total about face from every verbal communication I have had with three different TriSpan representatives” and that the “letter strongly implies TriSpan will not cover Warm-Up therapy.” Appellant testified that “eventually, we just decided that [the letter] was wrong, and we shouldn’t hand it out.” According to appellant, “We were billing Medicare claim by claim before the letter. And when we didn’t get coverage, we were billing Medicare claim by claim after the letter. So I didn’t see [that] it had any [e]ffect on the rules.”

Augustine Medical personnel learned in July 2000 that Tri-Span had denied reimbursement claims for Warm-Up. In an email to appellant and others at Augustine Medical, Randy Benham cautioned “that we should not assume that TriSpan has decided not to reimburse for Warm-Up. Let’s begin with the assumption that [the author of the TriSpan letter] merely informed us that TriSpan has refused to issue a local rule mandating reimbursement.” Benham testified, however, that he advised the company that customers known to be billing TriSpan should be notified that TriSpan was denying reimbursement claims for Warm-Up.

Southern Medical Distributors, which was part of a government “sting” operation created to uncover Medicare fraud, had ordered Warm-Up from Augustine Medical. Tim Hensley, Augustine Medical’s national sales manager, met with representatives of Southern Medical in Atlanta on August 16, 2000, but he did not disclose the TriSpan letter. In a telephone conversation 6 days later, Hensley told a Southern Medical representative that Augustine Medical did not have anything in writing from TriSpan. Appellant testified that he also spoke with Southern Medical on several occasions and that, when Southern Medical asked him about TriSpan, he explained that TriSpan had denied coverage for Warm-Up. Indeed, in a telephone conversation with a Southern Medical representative on January 22, 2001, appellant stated that TriSpan had deemed Warm-Up investigational and had decided not to cover the product. Appellant reiterated to Southern Medical on March 1 that TriSpan had denied coverage for Warm-Up.

Appellant’s relationship with other members of the board of directors soured, and he resigned as an employee of the company on December 31, 2002. In 2003, appellant, Paul Johnson, Randy Benham, Tim Hensley, Phillip Zarlengo, Arizant, and Augustine Medical were indicted for the felonies of conspiracy to defraud the United States, healthcare fraud, and mail fraud in connection with obtaining Medicare reimbursement for Warm-Up. Augustine Medical pleaded guilty to the felony of conspiracy to defraud the United States in violation of 18 U.S.C. § 371 (2000) and was ordered to pay a criminal fine exceeding $5 million and a civil fine exceeding $7 million. Appellant’s trial was expected to last 3 to 4 months, but about 7 weeks into trial the government offered to dismiss the felony charges against appellant if he would plead guilty to a misdemeanor. On June 29, 2004, appellant pleaded guilty to “knowingly and willfully aid[ing] and abett[ing] others in causing to be withheld from Southern Medical Distributors a material fact for use in determining rights to benefits and payments under * * * the Medicare program” in violation of 42 U.S.C. § 1320a-7b(a)(2) and 18 U.S.C. § 2. Relevant to these proceedings, Paul Johnson, Randy Benham, and Tim Hensley also pleaded guilty to 42 U.S.C. § 1320a-7b(a)(2) violations, and Phillip Zarlengo pleaded guilty to the felony of healthcare fraud in violation of 18 U.S.C. § 1347(2000).

Appellant stipulated to the following facts as the basis for his guilty plea:

1. The Defendant was CEO of Augustine Medical, Inc. (“AMI”), a Minnesota corporation that manufactured and sold Warm-Up Active Wound Therapy (“Warm-Up”).
2. The Defendant knew that claims for WarmUp were periodically submitted by others for reimbursement to the Medicare program, a Federal health care program.
3. On or about June 27, 2000, Defendant Scott D. Augustine received a letter from TriSpan Health Services, a fiscal intermediary of the Medicare program which had earlier approved coverage for WarmUp. TriSpan had now determined that WarmUp was in-vestigational. Defendant believed that this determination was material.
4. Shortly thereafter, the Defendant knowingly and intentionally aided and abetted others in deciding not to disclose the June 27th letter to Southern Medical Distributors.
5. By entering into this Stipulation of Facts, the Defendant admits that the facts set forth herein establish that he knowingly and intentionally aided and abetted the offense 42 U.S.C. Section 1320a-7b(a)(2) as set forth in an Information filed herewith and is in fact guilty of that offense.

Appellant was sentenced to a 3-year probationary term and ordered to pay a $2 million fine. As a result of his conviction, appellant was excluded from participating in the Medicare program for a period of 5 years.

When appellant resigned as an employee of Augustine Medical, he and the company entered into a separation and release agreement, which contained the following indemnification provision:

The Company agrees to indemnify and hold Dr. Augustine harmless from and against all attorney’s fees, costs, disbursements and damages that he may incur as a result of and relating to any act or omission that he allegedly committed while serving as an officer, director and/or employee of the Company to the extent, and subject to the exceptions, that Minnesota law provides.

The separation and release agreement also provided that appellant was eligible to receive phantom stock payments based on increases in the fair market value of the company’s common stock.

In July 2004, appellant requested indemnification for his fine and for his attorney fees incurred in connection with defending against the federal criminal charges to the extent not previously reimbursed. Respondent Arizant denied appellant’s request for indemnification, claiming that appellant had not satisfied the requirements for mandatory indemnification under Minnesota law. Appellant sued respondents Augustine Medical, Arizant, and Ari-zant Healthcare in Hennepin County District Court, seeking indemnification for his fine, unpaid legal fees, and expenses pursuant to Minn.Stat. § 302A.521 and the terms of the parties’ separation and release agreement and damages caused by respondents’ breach of the phantom stock provision in the separation and release agreement.

Appellant and respondents filed motions for partial summary judgment on the issue of indemnification, which the district court denied. The case then went to trial, and the jury found that appellant was entitled to indemnification from respondents in the amount of $2,278,025, that respondents breached the parties’ separation and release agreement in determining the fair market value of the company’s stock, and that appellant should receive phantom stock bonuses of $539,852.50 and $697,999.25 for the years 2006 and 2007, respectively. The district court entered judgment in appellant’s favor, ordering that he recover $3,515,876.70 from respondents, as well as interest and attorney fees. The court of appeals reversed the district court’s awards of indemnification and attorney fees, however, ruling that the district court erred in denying respondents’ motion for partial summary judgment. Augustine, 735 N.W.2d at 744-46. The court of appeals concluded that appellant’s claim for indemnification failed as a matter of law because his conviction under 42 U.S.C. § 1320a-7b(a)(2) and his “sworn admission that he acted with fraudulent intent * * * conclusively establish that he did not act in good faith.” Augustine, 735 N.W.2d at 744-45. The court of appeals also ruled that the district court properly submitted appellant’s breach of contract claim to the jury. Id. at 745-46.

I.

The issue presented in this ease is whether the district court erred in denying respondents’ motion for partial summary judgment. Summary judgment is proper where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law.” Minn. R. Civ. P. 56.03. “In reviewing an appeal from the denial of summary judgment, we must determine whether there are genuine issues of material fact and whether the district court erred in applying the law,” and “we must consider the evidence in the light most favorable to the nonmoving party.” Mumm v. Mornson, 708 N.W.2d 475, 481 (Minn.2006).

Under Minn.Stat. § 302A.521, subd. 2(a), respondents are required to indemnify appellant if appellant (1) “has not been indemnified by another organization or employee benefit plan,” (2) “acted in good faith,” (3) “received no improper personal benefit,” (4) “had no reasonable cause to believe the conduct was unlawful,” and (5) “reasonably believed that the conduct was in the best interests of the corporation.” Minnesota Statutes § 302A.521, subd. 2(b), provides that “[t]he termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contende-re or its equivalent does not, of itself, establish that the person did not meet the criteria set forth in this subdivision.”

The crux of the dispute presented here is whether appellant failed, as a matter of law, to satisfy the good faith requirement of Minn.Stat. § 302A.521, subd. 2(a). “ ‘Good faith’ means honesty in fact in the conduct of the act or transaction concerned.” Minn.Stat. § 302A.011, subd. 13 (2006). As we stated in another context, the “[djetermination of what constitutes good faith necessarily involves factual findings. It is for the trier of fact to evaluate the credibility of a claim of ‘honesty in fact’ and, in doing so, to take account of the reasonableness or unreasonableness of the claim.” Tonka Tours, Inc. v. Chadima, 372 N.W.2d 723, 728 (Minn.1985) (internal citation omitted).

We conclude that genuine issues of material fact existed as to whether appellant acted in good faith. We begin with the observation that under Minn.Stat. § 302A.521, subd. 2(b), which was not cited by the court of appeals, appellant’s guilty plea “does not, of itself, establish that” he failed to act in good faith. Assuming without deciding that it is appropriate to consider appellant’s stipulation and his testimony at his change of plea hearing, appellant’s admissions contained therein do not support the result reached by the court of appeals. Appellant, in entering his plea, did little more than massage the language of the statute. He admitted that he “knowingly and intentionally aided and abetted the offense of 42 U.S.C., Section 1320a-7b(a)(2), by causing to be withheld from Southern Medical Distributors a material fact for use in determining rights to benefits and payments under the Medicare program.” He also acknowledged that he considered the contents of the TriSpan letter to be material and that shortly after receiving the TriS-pan letter he “intentionally and knowingly aided and abetted others in deciding not to disclose that letter * * * to providers.” It is worth noting that in neither his stipulation nor in his testimony at the change of plea hearing did appellant admit that he failed to act in good faith.

Not only do appellant’s admissions made in connection with his plea agreement fail to demonstrate a lack of good faith, but the circumstances surrounding his plea are also less than persuasive as to respondents’ claim that appellant did not act in good faith. The federal government set up an elaborate Medicare “sting” operation. Appellant, along with other employees of the corporation and the corporation itself, was charged with multiple serious felonies. The corporation pleaded guilty to a felony, but after many weeks of trial, the United States offered to dismiss appellant’s felony charges in exchange for a misdemeanor plea. Defendants plead guilty for many reasons — to avoid a felony conviction, to cap otherwise ruinous attorney fees, and to eliminate lengthy trial proceedings. All of these motivations, at the very least, were potentially in play here.

The problems with respondents’ argument do not end with the plea itself, for subsequent to entering his guilty plea, appellant denied acting in bad faith. In his affidavit submitted in opposition to respondents’ motion for partial summary judgment, appellant claimed that “[bjecause all of my actions regarding Warm-Up were made in good faith, I have never admitted that I did not act in good faith.” He explained that the decision not to disclose the TriSpan letter to Southern Medical was made jointly by himself and others at Augustine Medical, and that “[a]t the time that we made the decision, I had no intent to be dishonest or mislead anyone. The decision was made in good faith, because the letter appeared to be inaccurate, it was confusing, and it did not state whether TriSpan intended to cover Warm-Up or not.”

Finally, we turn to the claim of respondents that a party resisting summary judgment is not permitted to simply deny that which was previously asserted. We do not retreat from our prior statement that “affidavits that contradict earlier deposition testimony generally may not be used to create a genuine issue of fact,” Hoover v. Norwest Private Mortgage Banking, 632 N.W.2d 534, 541 n. 4 (Minn.2001), but those are not the facts of this case. Appellant has never disputed his guilty plea and has, in fact, reaffirmed it; but he has also stated that he acted in good faith, and his sworn admissions related to a guilty plea entered into under highly unusual circumstances. Particularly when the evidence is viewed in appellant’s favor, genuine issues of material fact existed as to whether appellant acted in good faith.

We conclude that genuine issues of material fact existed under the unique circumstances of this case. Appellant’s guilty plea to aiding and abetting a violation of 42 U.S.C. § 1320a-7b(a)(2) and his related admissions do not establish, as a matter of law, that he did not act in good faith for purposes of indemnification under Minn. Stat. § 302A.521, subd. 2(a). Accordingly, we hold that the district court did not err in denying respondents’ motion for partial summary judgment, and we reverse the decision of the court of appeals and remand for further proceedings.

Reversed and remanded.

MAGNUSON, C.J., and DIETZEN, J., not having been members of this court at the time of the argument and submission, took no part in the consideration or decision of this case.

      . Respondents Augustine Medical, Inc., and Arizant Healthcare, Inc., became wholly-owned subsidiaries of respondent Arizant, Inc., as part of a January 2003 corporate reorganization.

      . Appellant testified at trial that the government "worked with our lawyers to craft a new misdemeanor” to which he would plead guilty. Appellant had not been charged with the misdemeanor to which he pleaded guilty, and the indictment does not specifically allege that appellant participated in the decision not to disclose the TriSpan letter to Southern Medical Distributors.

      . 42 U.S.C. § 1320a-7b(a)(2) makes it a crime to "at any time knowingly and willfully make[ ] or cause[ ] to be made any false statement or representation of a material fact for use in determining rights to [any benefit or payment under a federal health care program].”

      .18 U.S.C. § 2 reads as follows:
      (a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.
      (b) Whoever willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal.

      . In contrast to appellant’s $2 million fine, Paul Johnson, Randy Benham, and Tim Hensley were fined $100,000 each.

      . It is not necessary to decide here, and we do not decide, whether sworn admissions made in connection with a guilty plea are encompassed within the rule of Minn.Stat. § 302A.521, subd. 2(b), that a guilty plea does not, of itself, establish that a person did not meet the requirements of the indemnification statute. See Minn. R.Crim. P. 15.01, subd. 1(20) (requiring the court, before a guilty plea is accepted in a felony or gross misdemeanor case, to question the defendant under oath as to the factual basis for the plea); Minn. R.Crim. P. 15.02(7) (requiring the court, before a guilty plea is accepted in a misdemean- or case, to "elicit sufficient facts from the defendant to determine whether there is a factual basis for all elements of the offense to which the defendant is pleading guilty”).

      . None of the other elements of Minn.Stat. § 302A.521, subd. 2(a), provide a basis on which summary judgment could be granted in respondents' favor. There is no evidence that appellant has received indemnification from any other source as to the fine and expenses for which he seeks reimbursement or that he has received any improper personal benefit. Furthermore, he testified at trial that he was not aware that his actions were illegal and stated in his affidavit submitted in opposition to respondents' motion for partial summary judgment that he had no reason to believe his conduct was illegal. Finally, appellant testified at trial that he had believed he was acting in the company's best interests with respect to the TriSpan letter, and, in his affidavit submitted in support of his motion for partial summary judgment, he explained that he feared that disclosing the letter would improperly deter potential customers from using Warm-Up.