author: G. BARRY ANDERSON, Judge.

text:
    Norman D. HOLM and NDH, Inc., a Minnesota corporation, Appellants, v. CASINO RESOURCE CORPORATION, f/k/a Rubidell Recreation, Inc., a/k/a Casino Resources, Inc., f/k/a Tecton Corporation, f/k/a Symbio Dynamics Corporation, f/k/a Yoga Youthful Corporation, f/k/a Cosmopolitan Health Spas, Inc., Respondent.
    No. C1-01-216.
    Court of Appeals of Minnesota.
    July 30, 2001.

      Jonathan N. Jasper, Jasper & Walker, P.L.L.C., Anoka, for appellants.
    Kyle E. Hart, Julie A. Doherty, Aaron A. Dean, Fabyanske, Westra & Hart, P.A., Minneapolis, for respondent.
    Considered and decided by R.A. RANDALL, Presiding Judge, BRUCE D. WILLIS, Judge and G. BARRY ANDERSON, Judge.
   OPINION

G. BARRY ANDERSON, Judge.

Appellants challenge the district court’s denial of their motion to vacate an arbitration award and denial of their motions for reconsideration arguing that (1) the district court ignored Minn. R. Civ. P. 6.05 and, as a result, miscalculated the filing deadline; (2) they established, under Minn. R. Civ. P. 60.02(a), “excusable neglect” of counsel; and (3) the motion to vacate was brought within 90 days after appellants discovered fraudulent behavior. Because we conclude that Minn. R. Civ. P. 6.05 applies to a motion to vacate an arbitration award under Minn.Stat. § 572.19, subd. 2 (2000), when the arbitration award is delivered by mail in accordance with MinmStat. § 572.15(a) (2000), we reverse and remand for a hearing on the merits.

FACTS

In 1988, appellants Norman D. Holm and NDH Inc., and respondent Casino Resource Corporation entered into a contract to develop a campground property known as “Pintail Woods.” The contract provided an indemnification right for “legitimate” claims for goods and services ordered by or provided to respondent in connection with the development. The contract also had an arbitration clause: if the parties could not agree that a claim was “legitimate,” the contract required them to arbitrate the dispute according to the rules of the American Arbitration Association (AAA).

Appellants sought indemnification for $158,000 in claims relating to the development, but respondent refused to pay. In 1992, appellants filed a demand for arbitration against respondent with the AAA. The demand was dismissed. In 1998, appellants brought a motion in district court to compel arbitration against respondent; the district court granted appellants’ motion.

In July 1999, appellants filed another demand for arbitration with the AAA. After both parties objected to several proposed arbitrators, the parties agreed that John L. Devney, a shareholder at the law firm of Briggs & Morgan, would be appointed as arbitrator. The arbitrator conducted hearings over three days in April 2000. After the hearings, both parties submitted memoranda and proposed findings. The arbitrator’s award, issued June 2, 2000, granted appellants $23,775.25 and denied attorney fees and interest. The AAA mailed the award to the parties on June 5, 2000. Neither party argues that the mailing of the arbitration award violated Minn.Stat. § 572.15(a) (2000), which provides, among other things, that an arbitrator shall deliver a copy of the award to each party personally or by certified mail, or as provided in the agreement.

On September 6, 2000, appellants served a motion to vacate, arguing that, among other things, the arbitrator failed to disclose a prior personal and professional relationship with the named partners at respondent’s law firm, Fabyanske, Westra & Hart. Appellants asserted that the arbitrator had worked closely with B.C. Hart, a partner at Briggs & Morgan, for 11 years. Hart’s son, Kyle, represented respondent in these arbitration proceedings.

The district court denied appellants’ motion to vacate, holding that the motion was untimely. The district court further concluded that Minn. R. Civ. P. 6.05, which, when a party has a prescribed period to do something after being served, adds three days to the prescribed period when the notice or papers are served by mail, did not apply.

Appellants filed motions for reconsideration. Appellants asserted that an unpublished Minnesota Court of Appeals decision, found persuasive by the district court, had been reversed by the Minnesota Supreme Court. Alternatively, appellants moved to vacate the motion for excusable neglect of counsel under Minn. R. Civ. P. 60.02(a). The district court denied both motions. The district court responded to the reversal of the unpublished opinion by deleting all references to that case from its order. In concluding that Minn. R. Civ. P. 60.02(a) was inapplicable to this case, the district court stated:

I do believe quite strongly that the arbi- ' tration involved here is not a 114 arbitration * * * and that if the [motion to vacate the award] had been filed on the 89th day, we would then be talking about all the General Rules, 60.02; 6.0[5] * * *. But because this Court never got jurisdiction, I don’t look at those rules, I look at the statute, I look at the case law ***.

As support for its decision, the district court cited Component Sys., Inc. v. Murray Enters., 300 Minn. 21, 24-25, 217 N.W.2d 514, 516 (1974) (holding that motions to vacate arbitration awards are absolutely barred if not brought within the 90 day statutory period). This appeal was taken from the district court’s order denying appellants’ motion to vacate as well as appellants’ motions for reconsideration. See In re State & Regents Bldg. Asbestos Cases, 435 N.W.2d 521, 522 (Minn.1989) (stating that an order granting a motion to dismiss on the ground of lack of jurisdiction is appealable).

ISSUE

Did the district court err by failing to apply Minn. R. Civ. P. 6.05 when considering appellants’ motion to vacate the arbitration award?

ANALYSIS

Appellants contend that the district court erred by failing to apply rules 6.05 and rule 60.02(a) of the Minnesota Rules of Civil Procedure when considering the timeliness of their motion to vacate the arbitration award. “We review de novo the construction of a rule of court procedure.” Patterson v. Wu Family Corp., 608 N.W.2d 863, 866 (Minn.2000) (citation omitted).

The Minnesota Rules of Civil Procedure “govern the procedure in the district courts of the State of Minnesota in all suits of a civil nature, with the exceptions stated in Rule 81.” Minn. R. Civ. P. 1. Rule 81.01(a) states that the

rules do not govern pleadings, practice and procedure in the statutory and other proceedings listed in Appendix A insofar as they are inconsistent or in conflict with the rules.

Id. Rule 81.01(c) states that, subject to 81.01(a), all statutes “inconsistent or in conflict with these rules are superseded insofar as they apply to pleading, practice, and procedure in the district court.” Minn. R. Civ. P. 81.01(c). Appendix A to the Minnesota Rules of Civil Procedure is entitled “Special Proceedings Under Rule 81.01” and lists proceedings excepted from the rules of civil procedure “insofar as they are inconsistent or in conflict with the procedure and practice provided by these rules.” Chapter 572, the Minnesota Arbitration Act, is not among the statutes listed in Appendix A. The list of excepted statutes contained in Appendix A of the rules, however, is not exclusive. Peterson v. Peterson, 308 Minn. 297, 304 n. 3, 242 N.W.2d 88, 93 n. 3 (1976). “Regardless, the Minnesota Supreme Court has rejected the notion that district court review of an arbitration award is a special proceeding rather than an ordinary civil action.” Leek v. American Express Property Cas., 591 N.W.2d 507, 510 (Minn.App.1999), review denied (Minn. July 7, 1999) (citing Pulju v. Metropolitan Property & Cas., 535 N.W.2d 608, 608-09 (Minn.1995) (reversing this court’s determination that district court review of arbitration is “special proceeding” pursuant to Minn. R. Civ.App. P. 103.03(g))). We conclude that the Minnesota Rules of Civil Procedure apply to Chapter 572 of the Minnesota statutes.

We next look to rule 6.05 of the Minnesota Rules of Civil Procedure to resolve this matter. Rule 6.05 provides that whenever a party has the right or is required to do some act within a prescribed period after the service of a notice or other paper upon the party, and the notice or paper is served upon the party by mail, three days shall be added to the prescribed time period. Minn. R. Civ. P. 6.05. In declining to apply rule 6.05 to this case, the district court relied on commentary from Minnesota Practice § 6.8, which states that under rule 6.05, a statutory deadline is extended by an additional three days where a party has a right to respond and the notice of judgment or similar document is mailed to a party, but does not apply if a time period runs from the date of filing. See 1 David F. Herr & Roger S. Haydock, Minnesota Practice § 6.8 (1998) (explaining the rule). The district court compared the “delivery” of an arbitration award to the filing of an award and concluded that rule 6.05 did not apply.

We disagree with the district court’s reasoning. Rule 6.05 provides that a statutory deadline is extended by three days where a party has a right to respond to documents served to a party by mail. Id. Appellants clearly had the right to do something — in this case file a motion to vacate — within 90 days after delivery of the award. See Minn.Stat. § 572.19, subd. 2 (2000) (requiring that a motion to vacate be brought within 90 days after “delivery” of an arbitration award). It is undisputed that the arbitration award was delivered to appellants by mail. Rule 5.02 of the Minnesota Rules of Civil Procedure provides that “service by mail is complete on mailing.” The term “service” used in rule 6.05 is analogous with the term “delivery” found in Minn.Stat. § 572.19, subd. 2. Thus, we conclude that delivery of the arbitration award occurred when the decision was mailed on June 5, 2000. Because appellants received a decision in the mail and had a right to respond within a specific time period, it is necessary to add three days to the 90 day statutory period under Minn.Stat. _ § 572.19, subd. 2. The prescribed time period to file the motion to vacate the arbitration award would then expire 93 days after the decision was mailed on June 5, 2000, which was September 6, 2000, the day the motion was served.

Wilkins v. Glencoe, 479 N.W.2d 480 (Minn.App.1992) is useful in analyzing this dispute. In Wilkins, a party removing an action from conciliation court to district court argued that it had three extra days to file the removal action under rule 6.05, because the judgment and notice of judgment were received by mail. Id. at 431. This court agreed, stating:

This case is distinguished from other proceedings which are not governed by Minnesota Rules of Civil Procedure pursuant to Minn. R. Civ. P. 81.01 when the rules are inconsistent with statutory provisions. Those provisions are listed in Appendix A of the rules. For example, eminent domain proceedings under chapter 117 are not governed by the rules when inconsistent. Minn. R. Civ. P. 81.01(a); Appendix A. However, conciliation court proceedings are not listed in Appendix A. Therefore there is no exception and the Minnesota Rules of Civil Procedure apply.

Id.

Using this court’s reasoning from Wilkins, we conclude that the district court erred by failing to apply rule 6.05 when considering appellants’ motion to vacate, brought under Minn.Stat. § 572.19, subd. 2. We further conclude that appellant’s motion to vacate the arbitration award was timely because it was served 93 days from delivery of the award. Therefore, we remand this issue to district court for a hearing on the merits.

Respondent argues that the federal district court in In Flight Sys. v. Paul A. Laurence Co., 715 F.Supp. 1125 (D.D.C.1989), concluded that the Virginia version of rule 6.05 did not apply to * motion to vacate an arbitration award. Id. at 1130. But the federal district court in that case looked to internal AAA rules governing the “delivery” of an arbitration award and concluded that “delivery” occurs when the award is placed in the mail. Id. Contrary to respondent’s belief, In Flight Sys. did not determine whether the rules of civil procedure apply to a motion to vacate an arbitration award.

Appellants alternatively argue that the motion to vacate should be heard on its merits because they established, pursuant to Minn. R. Civ. P. 60.02(a), “excusable neglect” of counsel and because the motion was brought within 90 days after they discovered fraudulent behavior. Because we conclude that the district court erred in failing to apply Minn. R. Civ. P. 6.05 to this case, we need not reach appellants’ alternative arguments.

DECISION

The district court erred in not applying Minn. R. Civ. P. 6.05 to the 90 day calculation for filing a motion to vacate an arbitration award pursuant to Minn.Stat. § 572.19, subd. 2 (2000), when appellants received the arbitration award by mail in accordance with MinmStat. § 572.15(a) (2000).

Reversed and remanded.


source: Caselaw Access Project

author: GORDON W. SHUMAKER, Judge.

license: Public Domain

text:
    Thomas STOCKE, et al., Appellants, v. Allen BERRYMAN, et al., Respondents, and Minneapolis Police Relief Association, Respondent.
    No. C7-01-284.
    Court of Appeals of Minnesota.
    Aug. 7, 2001.
    Review Denied Sept. 25, 2001.

      Karl L. Cambronne, Becky L. Erickson, Chestnut & Cambronne, P.A., Minneapolis, David Lonergan, Stillwater, and Joseph B. Marshall, Marshall & Associates, P.A., Circle Pines, for appellants.
    Judy A. Rogosheske, Best & Flanagan, LLP, Minneapolis, for respondents Berry-man, et al.
    Patrick J. McLaughlin, Dorsey & Whitney, LLP, Minneapolis, for respondent Minneapolis Police Relief Association.
    Considered and decided by AMUNDSON, Presiding Judge, LANSING, Judge, and SHUMAKER, Judge.
   OPINION

GORDON W. SHUMAKER, Judge.

Appellants challenge the district court’s dismissal of their derivative action and request for injunctive relief, arguing that Minn.Stat. ch. 356A (2000) contains no demand requirement and that the Minneapolis police relief association’s bylaws contain an inadequate remedy for removal of directors. Because appellants failed to comply with Minn. R. Civ. P. 23.06 and an adequate remedy exists under the bylaws, we affirm.

FACTS

Appellants are active Minneapolis police officers and are members of the Minneapolis Police Relief Association (MPRA). The MPRA is a nonprofit corporation, organized under Minn.Stat. ch. 423B (2000), that administers a defined-benefit pension plan for Minneapolis police officers hired before June 15, 1980. The MPRA is governed by a board of nine members.

During 1996 and 1997, the MPRA invested $14.93 million in Technimar Industries, Inc., a start-up company engaged in the manufacture and sale of agglomerated stone blocks. Technimar’s prospectus warned of the risk inherent in purchasing its stock, stating:

The securities offered hereby are speculative and involve a high degree of risk and should be purchased only by persons who can afford the loss of their entire investment.

By 1998, the MPRA had lost its entire investment in Technimar, and Technimar was adjudged bankrupt in July of that year.

During the Technimar investment years, respondent Richard Nelson and respondent Allen Berryman were MPRA board members. Nelson was the MPRA’s chief executive officer and Berryman was its secretary. Berryman and respondent Gerald Bridgeman also served on the board of Technimar. Although not a MPRA board member, Bridgeman was the MPRA’s executive director and, in that capacity, he participated in investment transactions with Technimar on behalf of the MPRA.

In February 1999, the appellants sued the respondents “on behalf of nominal defendant” MPRA, alleging breaches of fiduciary duties and seeking damages and in-junctive relief. The ad damnum clause in the complaint prayed for “judgment against [respondents] and on behalf of nominal defendant MPRA * *

While this lawsuit was pending, the appellants filed charges with the MPRA against Berryman, Nelson, and all other board members. The MPRA bylaws provided that members would be entitled to vote on charges filed against directors. The members’ vote did not sustain the charges, and Berryman and Nelson remained on the board.

The respondents then made two dismissal motions in the lawsuit. The first was to dismiss or strike the appellants’ demand for injunctive relief on the ground that the exclusive remedies for directors’ breaches of fiduciary duty are provided by Minn. Stat. eh. 423B and the MPRA bylaws. The district court agreed that the appellants had an adequate remedy under the MPRA bylaws and granted the motion.

The second motion sought the dismissal of the entire action on the grounds that the appellants had failed to satisfy a condition precedent in Minn. R. Civ. P. 28.06 requiring an allegation with particularity of the efforts made to obtain relief from the MPRA board. The complaint contained only a general allegation in that regard. The district court granted this motion as well, ruling that the lawsuit was a derivative action and was subject to the requirements of rule 23.06.

Arguing that the district court has the power to grant injunctive. relief in this action and that a prior demand for board action was not necessary, appellants challenge both dismissals.

ISSUES

1. The MPRA bylaws permit members to file charges against and seek the removal of directors. After the membership voted not to sustain charges against the directors, the district court ruled that in-junctive relief for removal of the directors was not available because the internal corporate remedy was adequate. Was this ruling error?

2. When speculative investments of pension funds resulted in losses to the public corporation administering the pension, certain members sued responsible directors on behalf of the corporation to obtain reimbursement for the losses. The district court ruled that the lawsuit was a members’ derivative action and that the conditions precedent in Minn. R. Civ. P. 23.06 applied. The court ruled that the members had failed to satisfy those conditions and it dismissed the lawsuit. Were these rulings erroneous?

ANALYSIS

I. Equitable Relief

The district court enjoys the discretion to grant or to deny equitable relief and we will not reverse its decision absent a clear abuse-of that discretion. Nadeau v. County of Ramsey, 277 N.W.2d 520, 524 (Minn.1979). “A party may not have equitable relief- where there is an adequate remedy at law available.” ServiceMaster of St. Cloud v. GAB Bus. Servs., Inc., 544 N.W.2d 302, 305 (Minn.1996). Equitable relief is available only upon a showing that no adequate legal remedy exists. Allstate Sales & Leasing Co., Inc. v. Geis, 412 N.W.2d 30, 34 (Minn.App.1987).

In their complaint, the appellants sought judgment that the respondents “be permanently enjoined from acting as a fiduciary with respect to MPRA.” The district court noted that the appellants had already unsuccessfully tried to remove Berryman and Nelson through the removal procedure provided in the MPRA bylaws. The court then said:

This court refuses to disregard the vote by all the members of the MPRA, or substitute its judgment for their judgment. Equitable relief should not be used simply because [appellants] want a second chance to remove [respondents] from the MPRA.

The MPRA is governed in part by Minn. Stat. ch. 423B (2000). That chapter contains the mandate that “[t]he affairs of the association must be regulated by its articles of incorporation and bylaws.” Minn. Stat. § 423B.05, subd. 2. As a nonprofit corporation, the MPRA is also subject to Minnesota Statutes chapter 317A (2000), the Minnesota Nonprofit Corporation Act. Minn.Stat. §§ 317A.001-317A.909 (2000). On the matter of removal of directors, that act states that its procedures are to be followed “unless a different method of removal is provided for in the articles or bylaws.” Minn.Stat. § 317A.223, subd. 1. The MPRA bylaws do in fact provide a different method for the removal of directors:

Charges may be preferred in writing by not less than three (3) members of the Corporation at any meeting of the Corporation or the Board of Directors against any director or officer of the Corporation of neglect of any duty as a member of said Board of Directors or conduct detrimental to the interests of the Corporation, and if, after a full investigation, the charges are sustained by a vote of a majority of the Members, the Cor oration or Board of Directors shall dec! tre the seat held by such director or officer of the Corporation as vacant.

The appellants argue that the .removal procedure in the bylaws is but one of several available remedies. They note, for example, that Minn.Stat. § 356A.09, subd. 2 (2000), provides that “remedies available for a fiduciary breach by a fiduciary are those specified by statute or available at common law.” The appellants argue that the removal procedure in the MPRA bylaws does not involve the necessary determination of whether the respondents breached their fiduciary duties. But the bylaws allow the removal of a director for “neglect of any duty” or “conduct detrimental to the interests of the corporation.” A breach of fiduciary duties, such as alleged and presented to the MPRA membership, surely fell within the stated reasons for removal of directors. Thus, the remedy of removal of a director for breach of fiduciary duty was available under the MPRA bylaws. The district court did not err in holding that this was an adequate remedy and, therefore, equitable relief through the courts is not available.

II. Rule 23.06 Condition

The district court viewed the appellants’ lawsuit as a corporation members’ derivative action and applied Minn. R. Civ. P. 23.06. On questions of law, we are not bound by the district court’s determination. Frost-Benco Elec. Ass’n v. Minnesota Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn.1984). We review interpretations of rules of civil procedure de novo. Jostens, Inc. v. Federated Mut. Ins. Co., 612 N.W.2d 878, 883 (Minn.2000).

The appellants contend that they are not obligated by rule 23.06 because their claims are brought under Minn.Stat. ch. 356A (2000), which mirrors the federal Employee Retirement Income Security Act (ERISA); their claims are individual and not members’ derivative claims; and they are suing as beneficiaries of the MPRA trust fund.

Chapter 356A of the Minnesota Statutes is the Public Pension Fiduciary Responsibility Act. Minn.Stat. §§ 356A.01-356A.13 (2000). In part, it provides that the district court has jurisdiction over a challenge of fiduciary action or inaction. Minn.Stat. § 356A.12, subd. 1. However, there is nothing in Minnesota law that exempts chapter 356A from the rules of civil procedure. See Minn. R. Civ. P. 81 (listing statutes and proceedings exempt from the rules of civil procedure. Chapter 356A is not listed). Although the appellants argue that chapter 356A is a mirror of ERISA and that rule 23.06 does not apply to actions under ERISA, we reject that analogy because state governmental pension plans such as that administered by the MPRA are excluded from ERISA applicability. See 29 U.S.C.A. § 1003(b)(1) (2000).

We also reject the appellants’ argument that they are, in effect, trust beneficiaries who are proceeding against trustees. There is a separate statute governing trusts, trustees, and beneficiaries. See Minn.Stat. §§ 501B.01-501B.90 (2000). The MPRA and its fund are not established under trust law and, we see no reason to apply trust law to circumstances already regulated by directly applicable statutes and rules.

Generally, a shareholder or member of a corporation may not individually assert a direct cause of action that belongs to the corporation. Northwest Racquet Swim & Health Clubs, Inc. v. Deloitte & Touche, 535 N.W.2d 612, 617 (Minn.1995). In deciding whether a claim is direct or derivative, the focus is on the alleged injury. Wessin v. Archives Corp., 592 N.W.2d 460, 464 (Minn.1999). “Where the injury is to the corporation, and only indirectly harms the shareholder, the claim must be pursued as a derivative claim.” Id. To be entitled to bring a direct action, a shareholder or member must be able to allege some injury or harm that is separate and distinct from the injury or harm to the corporation and that is not dependent on the harm to the corporation. National City Bank v. Coopers & Lybrand, 409 N.W.2d 862, 868 (Minn.App.1987), review denied (Minn. Oct. 21, 1987).

The appellants were aware of the derivative nature of the action when they initiated it. They brought the lawsuit “on behalf of’ the MPRA and they requested remedies “on behalf of’ the MPRA. Furthermore, their losses are not direct and are not separate, distinct, and independent from the MPRA’s losses. Their financial tide under their pension rises and falls solely with the financial tide of the MPRA. The appellants suffer no loss unless the MPRA first suffers a loss. Their claim is derivative and is subject to rule 23.06. The district court did not err in so holding.

The appellants concede that they did not make the demand required under rule 23.06. We agree with the district court that the alternative course of showing why the demand would be futile was likewise not satisfied. Their general statement of futility does not satisfy the “particularity” requirement of the rule.

DECISION

Because appellants failed to comply with the demand requirement set forth in Minn. R. Civ. P. 23.06, appellants were not entitled to bring suit against respondents for breach of fiduciary duty.

Affirmed.


author: LANSING, Judge

text:
    NUESSMEIER ELECTRIC, INC., Respondent, v. WEISS MANUFACTURING CO., a foreign corporation, and Cone Mounter Company, its trade name, Respondent, LeSueur Electric Motor Repair, Inc., Appellant.
    No. C5-00-2184.
    Court of Appeals of Minnesota.
    Aug. 14, 2001.
    Review Denied Oct. 16, 2001.

      Robert J. Terhaar, Terhaar, Archibald, Pfefferle & Griebel, LLP, Minneapolis, MN, (for respondent Nuessmeier Electric).
    Bradford J. Roegge, Abrams & Smith, P.A., Minneapolis, MN, (for respondent Weiss Manufacturing Co.).
    Todd S. Lundquist, Lundquist Law Offices, Mankato, MN, (for appellant).

      Considered and decided by AMUNDSON, Presiding Judge, LANSING and SHUMAKER, Judges.
   OPINION

LANSING, Judge

On appeal from judgment in a contribution action, a business tenant in a commercial building argues that as a matter of law it has no common liability with an electric-heater manufacturer to the building owner and the fire insurer for fire damage to the building and its contents. A jury found the tenant and the electric-heater manufacturer negligent for the fire damage and the district court entered judgment on the jury’s apportionment of fault applied to the amount for which the building owner and its subrogated insurer settled their claim against the heater manufacturer. The tenant alternatively argues that it was denied a jury trial on damages. Because we conclude that the tenant has common liability, we affirm the manufacturer’s right to seek contribution. But we reverse and remand for a jury decision on the amount of damages to determine whether the manufacturer paid more than its fair share.

FACTS

Nuessmeier Electric owns a commercial building in Le Sueur. In November 1997, a fire damaged the building and its contents. Following an investigation, the building owner and Federated Mutual Insurance Company, its fire insurer, concluded that the source of the fire was a Co-neMount bearing heater owned and used by LeSueur Electric Motor Repair, a tenant that leased space in the building.

The insurer paid the owner approximately $331,000 for damage to the building and its contents. The owner and the sub-rogated insurer then brought a product-liability action against Weiss Manufacturing Company, the manufacturer of the Co-neMount bearing heater. The subrogated insurer claimed damages of $156,061.87 for structural loss to the building and $175,541.55 for the building owner’s personal property and business losses. The owner claimed damages of $4,292.29 for utility costs, business income loss, extra expenses, and lost rents that were not covered by the fire-insurance policy.

The heater manufacturer brought a third-party contribution claim against the tenant, alleging that the tenant caused the fire by misusing and altering the electric heater. The tenant denied liability and moved for summary judgment, arguing that because it is an imputed co-insured under the building’s fire insurance policy, it could not be liable to the owner or the building’s insurer and thus the common liability essential to a contribution action does not exist. The district court denied summary judgment.

Before trial the owner and the insurer settled with the manufacturer for $175,000. The settlement was in fall satisfaction of all damages arising out of the fire, and left for trial only the manufacturer’s contribution claim against the tenant. At the conclusion of the trial on the contribution claim, the district court submitted special-verdict interrogatories to the jury on negligence and apportionment, but not on the amount of damages. Instead, the court adopted the $175,000 settlement as the total damages amount. The tenant made an offer of proof that the total damages amounted to approximately $350,000. The tenant also moved to dismiss the contribution action on the ground that the manufacturer failed to prove that the settlement was reasonable. The district court denied the motion, reiterating that the damages were established by the $175,000 settlement amount.

The jury attributed 72% of fault to the manufacturer and 28% of fault to the tenant. The district court entered judgment against the tenant for $49,000, representing 28% of the $175,000 settlement amount among the owner, the insurer, and the manufacturer.

The tenant brought posttrial motions challenging the district court’s ruling on common liability and the court’s decision to accept the settlement amount as total damages rather than submitting that determination to the jury. The district court denied the motions, and the tenant appeals, arguing that (1) the manufacturer has no legal right to contribution because the tenant has no common liability with the manufacturer for the fire damage, and (2) the district court erred in failing to allow the jury to determine the total damages caused by the fire because a jury finding was necessary to determine whether the manufacturer had paid more than its fair share of any common liability.

ISSUES

I. Did the tenant’s status as a co-insured under the Bruggeman doctrine extinguish the tenant’s common liability with the manufacturer to the building owner and the subrogated fire insurer?

II. Did the district court err in determining damages to be the amount of the settlement and not submitting the issue to the jury when the settlement involved both common and noncommon damages?

ANALYSIS

Contribution is an equitable doctrine that requires that “persons under a common burden share that burden equitably.” Spitzack v. Schumacher, 308 Minn. 143, 145, 241 N.W.2d 641, 643 (1976). The essential elements of a contribution claim are (1) common liability of two or more actors to the injured party; and (2) the payment by one of the actors of more than its fair share of that common liability. City of Willmar v. Short-Elliot-Hendrickson, Inc., 512 N.W.2d 872, 874 (Minn.1994). Whether the right of contribution exists is a legal issue, which we review de novo. See Hubred v. Control Data Corp., 442 N.W.2d 308, 310 (Minn.1989) (appellate courts independently review district court’s application of law when material facts are not in dispute).

Common liability is created at the instant the tort is committed. Spitzack, 308 Minn. at 145, 241 N.W.2d at 643. It arises when both parties are liable to the injured party for part or all of the same damages. Milbank Mut. Ins. Co. v. Village of Rose Creek, 302 Minn. 282, 284-85, 225 N.W.2d 6, 8-9 (1974). It exists even though the parties’ liability may depend on different legal theories. City of Willmar, 512 N.W.2d at 874 (“[T]he nature of the common liability is of secondary importance to the fact of common liability itself.” (emphasis added) (citation omitted)).

I

The tenant argues that, as a matter of law, it has no common liability with the manufacturer to the building owner and the building’s insurer because it is a de facto co-insured under United Fire & Cas. Co. v. Bruggeman, 505 N.W.2d 87 (Minn.App.1993), review denied (Minn. Oct. 19, 1993). In Bruggeman, we recognized that both a landlord and a tenant have an insurable interest in the property and that rent payments are generally understood to include the cost of insurance, which is purchased to hold an insured harmless from its negligence. Id. at 89-90. Thus, in the absence of a lease provision that expressly requires a tenant to obtain fire insurance on the budding, a landlord’s insurer cannot subrogate against a negligent tenant for damage to the building structure because the tenant is a co-insured under the policy. Id. at 88-90.

Bruggeman, however, does not have the far-reaching effect advanced by the tenant in this case of extinguishing all common liability for negligent acts of a tenant resulting in damage to the building and its contents.

First, Bruggeman’s rationale relies on the landlord and tenant’s shared insurable interest which is limited to the structure that is the subject of the fire policy. See id. at 89. Thus, the doctrine does not shield a tenant from liability for nonstructural losses caused by a fire. See id. The supreme court has confirmed Bruggeman’s narrow application to the co-insured’s interest in the building structure. See Osborne v. Chapman, 574 N.W.2d 64, 67-68 (Minn.1998) (stating that Bruggeman does not extend to a landlord’s claim for lost rent — whether or not covered by insurance — because the tenant has no insurable interest in the lost-rent claim and would not be a co-insured for that coverage).

The Bruggeman doctrine also does not extend to losses incurred by the owner that are not covered by insurance, because the doctrine hinges on the co-insured relationship and would not extend to uninsured losses. See, e.g., Blohm v. Johnson, 523 N.W.2d 14, 15 (Minn.App.1994) (district court allowed entry of judgment against the tenant for the landlord’s uninsured losses).

The subrogated insurer originally claimed damages of $156,061.87 for structural loss to the building and $175,541.55 for personal-property loss that included business losses and damage to the owner’s inventory, furniture, supplies, and equipment. Thus, more than half of the damages claimed by the subrogated insurer are for nonstructural losses. Also, all the damages claimed by the building owner, $4,292.29 for utility costs, business income loss, extra expenses, and lost rents, are for nonstructural losses that are not insured. At a minimum, more than half of the claimed damages fall outside the co-insured, structural damage encompassed by the Bruggeman doctrine. Because both the manufacturer and the tenant could be held liable to the landlord and the subro-gated fire insurer for part of the same damages, they share common liability to them. See Milbank, 302 Minn, at 284-85, 225 N.W.2d at 8-9 (common liability arises when both parties are liable for part or all of the same damages).

Second, we reject the tenant’s argument that the Bruggeman defense to a building insurer’s subrogation action extinguishes the common liability necessary to support a contribution action. The supreme court has held that technical defenses that do not go to the merits of a case do not extinguish common liability even though they eliminate one defendant’s direct obligation to compensate the plaintiff. Jones v. Fisher, 309 N.W.2d 726, 729 (Minn.1981). Consequently, even when a plaintiff could not enforce recovery against a defendant, common liability remains if the factor preventing enforcement is extrinsic to the tort itself — such as failure to provide statutory notice, a covenant not to sue, personal immunity, or the expiration of the statute of limitations — and the acts or omissions of the defendant are otherwise sufficient to subject the defendant to liability. Horton v. Orbeth, 342 N.W.2d 112, 114 (Minn.1984). Because the tenant’s status as a co-insured is extrinsic to its negligence in misusing or altering the defective ConeMount bearing heater, we conclude that the district court did not err in finding that common liability was present.

But the right to seek contribution is not equivalent to the right to recover contribution. Milbank, 302 Minn, at 285, 225 N.W.2d at 9. The right to recover contribution depends on whether one tort-feasor has paid more than its fair share of the loss. “Fair share” is measured by the extent to which each tortfeasor could be liable to the injured parties. See id. (stating that while common liability gives rise to contribution claim, the right to contribution depends on the individual liability of each tortfeasor to the injured party); see also Jones, 309 N.W.2d at 730. Therefore, although the Bruggermn doctrine does not defeat common liability, it is directly relevant to the second element of contribution, that is, whether the manufacturer paid more than its fair share of the common liability.

Both Milbank and Jones are instructive on this point. In Milbank the supreme court recognized that a dramshop and an intoxicated driver had common liability to the heirs of the fatally-injured passengers, but limited the driver’s right to recover contribution by the extent to which the dramshop could be held liable to the heirs. 302 Minn, at 283-86, 225 N.W.2d at 8-9. In Jones the supreme court held that a driver and a dramshop had common liability to the heirs of the fatally-injured pedestrian, but only to the extent that each tortfeasor could be held hable to the heirs. 309 N.W.2d at 730-31.

As in Milbank and Jones, the liability in this case is not equally proportioned, and the damages that the subrogated fire insurer could recover against the tenant are more restrictive than the damages it could recover against the manufacturer. The damage that is common to both the tenant and the manufacturer includes all fire damage except the structural damage. The supreme court recognized this disparity in Jones: “It is only to the extent of these common damages that liability for each co-tortfeasor’s fair share of the loss may be compared.” Id. at 731. The determination of each co-tortfeasor’s fair share also forms part of our consideration on whether the amount of the damages is a jury issue.

II

The second issue is whether the district court erred in failing to submit the damages issue to the jury. In its new-trial motion, the tenant claims that a factual resolution of the damages question was necessary to determine whether Weiss paid more than its “fair share” by settling for $175,000 with the owner and the subro-gated fire insurer. The district court did not submit the damages issue to the jury, and instead determined the damages to be the $175,000 settlement amount. When reviewing a denial of a new-trial motion, this court determines whether the denial involved a violation of a legal right or an abuse of judicial discretion. See La Valle v. Aqualand Pool Co., 257 N.W.2d 324, 328 (Minn.1977).

The scope of the settlement agreement determines the viability of the contribution claim, because a settling tort-feasor can only pursue contribution against a non-settling tortfeasor if the settlement extinguished the liability of the non-settling tortfeasor. Reserve Ins. Co. v. Village of Big Lake, 304 Minn. 148, 153, 230 N.W.2d 47, 50 (1975). In other words, the settling tortfeasor must have removed the threat that the injured party might later proceed directly against the non-settling tortfeasor. Id. at 153-54, 230 N.W.2d at 50 (barring contribution when settlement agreement did not relieve the non-settling co-tortfeasor of potential liability).

Although the settlement agreement among the owner, insurer, and the manufacturer states that only the manufacturer is released, the agreement further states that the $175,000 is “full satisfaction for the entire amount of damages sustained by [the owner] and its insurer in the November 29, 1997 accidental fire.” The settlement agreement also specifically provides that the manufacturer may proceed on its contribution claim against the tenant. We read the “full satisfaction” language in the release as sufficient to support a finding that the tenant has been released from any potential liability. See Gronquist v. Olson, 242 Minn. 119, 126, 64 N.W.2d 159, 164 (1954) (stating that if injured party has accepted full satisfaction for injury suffered by him, he should not be permitted to recover again for the same injury). Whether the district court should submit the issue of damages to the jury when a settling tortfeasor seeks contribution from a non-settling tortfeasor is a more difficult question.

Before trial the district court and the attorneys discussed whether the damages issue should be submitted to the jury. Although the discussion is not on the record, the tenant’s attorney preserved an objection to the district court’s decision, announced the morning of trial, to accept the settlement amount as the damages amount and not to submit the issue to the jury. When the attorneys made a record of their objections at the conclusion of trial, the tenant’s attorney made an offer of proof that the claimed damages amounted to $350,000, not $175,000, and argued that the contribution claim should be dismissed, both because damages had not been proved and decided by the jury and because no determination had been made that the settlement was reasonable.

When the action seeking contribution from a co-tortfeasor is for damages paid pursuant to a settlement agreement that resolves liability for damages that are common to both tortfeasors, a specific factual determination on damages may not be necessary. See Samuelson v. Chicago, Rock Island, & Pacific R.R., 287 Minn. 264, 268-70, 178 N.W.2d 620, 624 (1970) (accepting, without specifically deciding, that a jury determination on the reasonableness of the settlement in a contribution action is sufficient to determine damages when the tortfeasors have common liability for common damages); see also Miller v. Shugart, 316 N.W.2d 729, 735 (Minn.1982) (characterizing Samuelson as recognizing that co-tortfeasor in contribution action must only prove that settlement is reasonable).

But it is problematic to try to reason by analogy from a contribution action in which co-tortfeasors have common liability and common damages to this action in which the manufacturer and the tenant have common liability, but do not have common damages. The primary problem is that in the absence of a fact determination on damages, the settling tortfeasor is allowed to unilaterally bind the non-settling tortfeasor to a damages amount that includes both damages for which it would be liable and damages for which it would not be liable. These amounts, in turn, determine the amount the'settling tortfea-sor would be able to recover in the contribution action.

The legal theory supporting the right of one co-tortfeasor to bind the other to reasonable damages negotiated in a settlement is that the co-tortfeasors have a unified interest in keeping the total damages to the lowest amount the plaintiff is willing to accept; the co-tortfeasors’ adversarial interests in what percentage each must pay is then later determined in a contested trial between them. That alignment of interests is altered, however, when a co-tortfeasor negotiates a settlement that involves both common and noncommon damages. The presumption of validity that flows from the common interest is lost because the allocation of common damages (for which contribution is available) and noncommon damages (for which contribution is unavailable) is itself adversarial, and because the co-tortfeasor has no economic incentive to limit the noncommon damages.

By holding that the settlement amount determined the damages for the contribution action, the district court essentially determined that the entire settlement would be allocated to common damages. This approach raises issues of fairness and due process because nothing in the record supports the full allocation to common damages. See, e.g., Kliniski v. Southdale Manor, Inc., 518 N.W.2d 7, 10 (Minn.1994) (holding that district court erred in allocating entire settlement to employee when workers’ compensation insurer proved substantial claim for past and future compensation payments); Time Ins. Co. v. Opus Corp., 519 N.W.2d 470, 474 (Minn.App.1994) (holding that settlement that attempted to defeat health insurer’s known subrogation claim by reciting that settlement did not include payment for medical expenses would not be enforced).

To avoid an unfair manipulation of contribution liability, and relying on the principles expressed in Milbank and Jones, we conclude that the damages issue should have been submitted to the jury. Contribution is appropriate only when the settling tortfeasor has paid more than its fair share of the loss. City of Willmar, 512 N.W.2d at 874. It is impossible to determine whether the settling tortfeasor has paid more than its “fair share” without a damages determination by the jury. The settling and non-settling tortfeasor have differing obligations for the injured parties’ damages. See Jones, 309 N.W.2d at 731 (contribution is available only for damages that are common to both tortfea-sors); see also Milbank, 302 Minn, at 285, 225 N.W.2d at 9 (holding that settlement amount between injured party and settling tortfeasor does not determine the damages in a contribution action). Thus, the jury must determine the total obligation of the manufacturer to the injured parties before the district court can determine if the manufacturer paid more than its fair share in settling its total obligation for $175,000.

Because we hold that the district court erred in failing to submit the damages issue to the jury, the tenant is entitled to a new trial on damages. A jury determination should be made both on common damages (which includes any fire damage not related to structural loss) and on noncom-mon damages (which includes any fire damage for structural loss).

Once the jury returns its verdict on damages, the district court must determine whether the manufacturer has paid more than its fair share of the loss. This is accomplished by determining the manufacturer’s total obligation for both common and noncommon damages. In making that determination, the district court should apply the manufacturer’s percentage of fault (72%) to both the common and noncommon damages. The percentage reduction applies to the common damages as a result of the jury’s apportionment of fault; the percentage reduction applies to the noncom-mon damages (building structure) because if the subrogated fire insurer had pursued the action to trial, under the logical extension of Bruggeman, the subrogated insurer would have borne the fault of its tenant insured (28%). See Medica, Inc. v. Atlantic Mut. Ins. Co., 566 N.W.2d 74, 76-77 (Minn.1997) (in subrogation, insurer stands in shoes of its insured and acquires rights insured has against third party).

If the $175,000 settlement exceeds 72% of the total common and noncommon damages, then the manufacturer paid more than its “fair share.” If the manufacturer paid more than its fair share, it is entitled to contribution from the tenant for the difference between the $175,000 and 72% of the total damages.

DECISION

Because the manufacturer and the tenant have common liability for the damage to the building and its contents, the district court did not err in finding that the first prong of the contribution test had been met. But because it is impossible to determine on this record whether the manufacturer paid more than its fair share of the common damages, the district court erred in determining that the second prong had been met. Accordingly, we reverse the denial of the new-trial motion and remand for a new trial on damages.

Affirmed in part, reversed in part, and remanded.


author: DANIEL F. FOLEY, Judge

text:
    Douglas HOSKIN, Respondent, v. CITY OF EAGAN, a Minnesota Municipal Corporation, Appellant.
    No. C5-01-283.
    Court of Appeals of Minnesota.
    Aug. 14, 2001.

      S. Todd Rapp, S. Todd Rapp, P.A., Apple Valley, MN, (for respondent).
    Susan M. Sager, Carla J. Heyl, League of Minnesota Cities, St. Paul, MN, (for appellant).
    Considered and decided by ANDERSON, Presiding Judge, AMUNDSON, Judge, and FOLEY, Judge.
   OPINION

DANIEL F. FOLEY, Judge

Respondent property owner petitioned appellant city to vacate its existing public utility and drainage easements so that respondent could subdivide his property. After appellant denied respondent’s request, respondent sought mandamus, which the district court issued. Appellant now seeks review of the court’s order issuing mandamus, arguing that mandamus was not the appropriate method to challenge its decision because mandamus applies to ministerial rather than legislative acts. Appellant further argues that, even if mandamus was the appropriate method to challenge its decision, the district court erred by granting mandamus because appellant had a rational basis for its decision and did not abuse its discretion by denying respondent’s petition to vacate the easements. Because we conclude that appellant had a rational basis for denying respondent’s request to vacate its existing public easements, we reverse.

FACTS

Respondent Douglas Hoskin owns a large residential lot in an Eagan subdivision. Hoskin petitioned appellant City of Eagan (the city) to vacate its existing public utility and drainage easements so that he could subdivide his property into two smaller lots without conflicting with the existing public easements. After holding two public hearings on the matter, the city decided not to vacate the easements.

Hoskin then petitioned the district court for a writ of mandamus. During a hearing on the matter, the district court determined that the writ should be treated as a declaratory judgment action to be decided on sumpary judgment. Ultimately, the court granted summary judgment in favor of Hoskin, reasoning that the city did not have a rational basis for denying Hoskin’s petition to vacate the public easements. This appeal followed.

ISSUE

Is a writ of mandamus an appropriate remedy where an administrative body made a legislative determination, or, in the alternative, if the administrative body had a rational basis for its decision?

ANALYSIS

On appeal from summary judgment, this court examines whether there are any genuine issues of material fact and whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990); see Minn. R. Civ. P. 56.03 (setting forth district court standard for summary judgment).

A court may issue a writ of mandamus “to compel the performance of an act which the law specially enjoins as a duty resulting from an office.” MinmStat. § 586.01 (2000). A reviewing court will reverse the district court’s order on an application for mandamus relief “only where there is no evidence reasonably tending to sustain the [district] court’s findings.” Popp v. County of Winona, 430 N.W.2d 19, 22 (Minn.App.1988) (citing State ex rel. Banner Grain Co. v. Houghton, 142 Minn. 28, 30, 170 N.W. 853, 853 (1919)), review denied (Minn. Nov. 23, 1988). The court need not defer to the district court’s ultimate conclusions of law. Id.

Hoskin argues that the city waived its right to argue whether mandamus is the appropriate remedy because the city conceded this issue in district court by agreeing that a declaratory judgment was the appropriate process for the court to address the city’s refusal to vacate the easements. A review of the transcript demonstrates, however, that the city appeared to be agreeing that a trial was unnecessary in order for the district court to render a decision. The record further demonstrates that the city was arguing that mandamus was inappropriate because Hoskin had another legal remedy available to him; namely, a declaratory judgment action. See MinmStat. § 586.02 (2000) (stating mandamus shall not issue where there is another remedy in ordinary course of law). The court’s memorandum in support of its order granting summary judgment in Hos-kin’s favor treated the case as one of mandamus. Based on this record, the city has not waived its right to argue that the court’s issuance of the writ of mandamus was inappropriate. But it should be noted that the city does not address the declaratory judgment versus mandamus issue on appeal. Instead, the city argues that mandamus is not the appropriate remedy when an administrative body refuses to grant an applicant’s request to vacate public easements.

1. Legislative Act

The city first argues that the district court erred in granting mandamus because the city’s refusal to vacate the public easements was a legislative rather than a ministerial act. Although the city fervently asserts that mandamus cannot be applied to legislative acts because such acts require the city’s exercise of discretion, case law suggests otherwise. Minnesota case law differentiates between zoning matters that are legislative in nature, and those that are quasi-judicial. Honn v. City of Coon Rapids, 313 N.W.2d 409, 416 (Minn.1981). The supreme court has concluded that the standard of review is the same for legislative zoning matters and judicial zoning matters, “namely, whether the zoning authority’s action was reasonable.” Id. at 416-17. The court further recognized that case law expresses the standard in various ways: “Is there a ‘reasonable basis’ for the decision? or is the decision ‘unreasonable, arbitrary or capricious’? or is the decision ‘reasonably debatable’?” Id. at 417. Case law also suggests that a court may issue a writ of mandamus even if an administrative body’s act is discretionary. Mandamus is appropriate if a petitioner has shown that (1) the party against whom a writ is directed had a “clear and present official duty to perform a certain act,” and (2) if the ordered action is discretionary, that failure to perform it “was so arbitrary and capricious as to constitute a clear abuse of discretion.” McIntosh v. Davis, 441 N.W.2d 115, 118 (Minn.1989) (emphasis added) (citations omitted). Based on relevant case law, the city’s argument that the district court could not issue mandamus because the city’s refusal to vacate the public easements was a legislative decision based on its exercise of discretion lacks merit. Instead, a court may issue a writ of mandamus even if the administrative body’s act was a legislative decision if the body’s failure to perform “was so arbitrary and capricious as to constitute a clear abuse of discretion.” Id.

2. Rational Basis/Abuse of Discretion Standard

Before a hearing is held to determine if a lot can be subdivided, the applicant must meet the requirements of Eagan Code § 13.11. If the applicant meets the requirements, then the eity will hold a public hearing on the matter. Eagan Code § 13.11, subd. 3B. The code further provides:

In the case of all platting, the planning commission and the council shall be guided by criteria, including the following, in approving, denying or establishing conditions related thereto:
A. That the proposed subdivision does comply with applicable City Code provisions and the comprehensive guide plan.
* ⅜ * *
C. That the physical characteristics of the site, including, but not limited to, topography, vegetation, * ⅜ * susceptibility to flooding, water storage and retention, are such that the site is suitable for the type of development or use contemplated.
* ⅜ # ⅜
E. That the design of the subdivision or the proposed improvements are not likely to cause environmental damage.
⅜ ⅜ ⅜ H4
G. That the design of the subdivision or the type of improvements will not conflict with easements of record * * *.

Eagan Code, § 13.20, subd. 6.

Relying on Eagan Code, § 13.20, subd. 6, the city argues that, even if this court concluded that the district court could issue mandamus for a legislative act, the city had a rational basis for refusing to vacate the easements and its decision did not constitute an abuse of its discretion. The city’s resolution contains its reasons for refusing to vacate, which do not necessarily correlate with section 13.20. These reasons include:

a.) The city’s public need for the use and enjoyment of the existing drainage and utility easements.
b.) The property’s physical characteristics do not support the creation of the additional lot and residence.
c.) The adjacent properties’ character would be adversely affected if the lots were split.
d.) If the lots were split, one of them would not accommodate a suitable area for the construction of a single-family home in conformance with the city’s code and with the neighborhood’s character.

Although not reduced to 'writing in the city’s resolution, the record does contain evidence, in the form of the minutes from the city’s public hearings on this matter, that supports a rational basis for the city’s refusal to vacate. Hoskin’s attorney offered these minutes for consideration by the district court. At the time Hoskin submitted his application, Eagan was reeling from floods that had devastated the area, resulting in extensive damage. At the final public hearing regarding Hoskin’s application, Councilor Blomquist cautioned:

When they came in with the intent to build these homes and do what they did down there, they were taking in account * * * a drainage. In light of the fact that we’ve had this horrendous, ah, storm, and what has happened there, why would we be taking away more land that held * * * drainage, just to put more surface area and more run off in that pond.

At the same hearing, a developer of the subdivision stated:

I’d like to urge the Council to consider the fact that all the lots in this subdivision that we developed, ah, we intended them to be large. If you approve this, ah, you’re going to be sort of denying the neighbors part of the benefit that they thought they were buying into when they came out there * * *.

In addition, Hoskin’s neighbor stated:

[Hoskin] is going to ruin the look of the neighborhood and he will be gone. He will not have to live with the consequences of his action. He will take the money from the sale of both pieces of property and leave and that’s not exactly kosher with the rest of us. * * * I think it’s just a bad precedent to divide your lot and leave. We have a big lot and all of us could do the same thing. It’s just not a good idea.

The developer also explained that Hos-kin’s lot was platted large purposefully in order to accommodate drainage from the entire subdivision. In light of this information, the council members discussed the purpose of Eagan Code § 13.11. Councilor Carlson stated:

I think what we’re doing here is that we’re taking one of the larger lots and we’re making it one of the smallest lots and is, is that [what] this ordinance was built for. Absolutely not, that’s not what we did it for. ⅜ * * [Hoskin has] to fill to provide for the house, [he has] to move all these easements, [he’s] got a storm sewer going right down the side of ’em, I mean all this is saying something to us and that was this lot is not intended to be subdivided.

These quoted passages and the rest of the hearing transcripts demonstrate that the city took into account the neighbors’ opposition to subdividing the lot, the possible negative effect on drainage if the easements were vacated and moved in light of recent flood damage, and the developer’s original reason for creating a large lot in order to accommodate proper drainage for the entire subdivision. According to the minutes from the hearing, the city took into account the broader impact that vacating the easements might have on the community, including the fact that the easements were meant to help a large group of people and that changing them might adversely affect the city in light of the recent flood damage. In addition, unless the city vacated the existing easements, the lot could not be subdivided because it would conflict with easements of record. These factors correspond with the criteria set forth in Eagan Code § 13.20, subd. 6. Because the hearing transcripts are part of the record and support the city’s decision, we conclude that the city had a rational basis for denying Hoskin’s request to vacate the easements and did not act arbitrarily or capriciously.

The district court, however, reached a different conclusion. As part of its decision, the court reasoned that the city had no rational basis for refusing to vacate the easements if Hoskin’s proposed plan provided adequate easement alternatives. Although the director of public works stated at the public hearing that Hoskiris alternative easement proposal “technically” worked, just because something “technically” works on paper does not mean that it will automatically work if implemented. Considering the city’s recent flood battle, it is not irrational for it to be concerned with altering drainage easements in the area when the current easements seemed effective.

DECISION

Because the record demonstrates that the city had a rational basis for refusing to vacate the public easements, its decision was not so arbitrary and capricious as to constitute a clear abuse of discretion. Therefore the district court erred by granting Hoskin’s petition for a writ of mandamus.

Reversed.

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

      . A ministerial act is “absolute, certain and imperative, involving merely execution of a specific duly arising from fixed and designated fact.” Kari v. City of Maplewood, 582 N.W.2d 921, 923 (Minn.1998) (quotation omitted).


author: SHUMAKER, Presiding Judge.

text:
    In re the Marriage of Cynthia M. BRANCH, n/k/a Cynthia M. Martisko, petitioner, Appellant, v. Dean K. BRANCH, Respondent.
    No. C1-01-166.
    Court of Appeals of Minnesota.
    Aug. 28, 2001.

      Wynn Curtiss, Miller, Steiner & Curtiss, P.A., Hopkins, MN, (for appellant).
    Dean K. Branch, Fergus Falls, MN, pro se respondent.
    Heard and considered by SHUMAKER, Presiding Judge, AMUNDSON, Judge, and PARKER, Judge.

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

   OPINION

SHUMAKER, Presiding Judge.

Appellant-mother challenges the child support magistrate’s calculation of respondent-father’s net monthly income for child support purposes. She alleges that the magistrate erroneously interpreted Minn. Stat. § 518.551, subd. 5(b)(viii) (2000), in allowing a reduction of father’s income by the amount he was paying in child support arrearages for another child who has reached the age of majority and that the district court erroneously affirmed. In the alternative, appellant argues that deducting amounts currently being paid for another child who has reached the age of majority violates public policy. Because the child support magistrate’s interpretation is appropriate and does not violate public policy, and because the district court did not err in affirming the magistrate’s order, we affirm.

FACTS

Appellant Cynthia Martisko, formerly Cynthia Branch, and respondent Dean Branch dissolved their marriage in 1997. The dissolution judgment provided that Martisko would have sole physical custody of the parties’ child, A.B., and that Branch would be obligated to pay monthly child support of $300.

When Martisko sought an increase in child support, Branch objected, arguing that his income had not increased and that his payment of support arrearages for another child should be deducted in calculating income available for support of A.B. Branch had been obligated to pay support for the other child under a California order. This child was born before A.B. and had reached majority prior to the current proceedings. But Branch remains obligated to pay $200 each month to satisfy ar-rearages in the California support.

After a hearing, a child support magistrate determined that the California ar-rearage payments are excluded from Branch’s income for purposes of calculating support for A.B. The magistrate relied on statutory law, stating:

Minn.Stat. [§ ] 518.551, subd. 5(b)(viii) does not make a distinction between an order for current support or an order for arrears. An Obligor is to receive a credit for “a child support or maintenance order that is currently being paid.”

The magistrate then excluded the California monthly arrearages from Branch’s income and ruled that there had been no substantial change in circumstances that would warrant a modification of Branch’s child support obligation.

The district court denied Martisko’s motion for review of the magistrate’s order and affirmed the magistrate’s findings of fact and conclusions of law. Martisko appeals.

ISSUE

Under Minn.Stat. § 518.551, subd. 5(b)(viii) (2000), a child support order that is currently being paid is to be excluded when calculating an obligor’s net monthly income available for child support. Does the exclusion apply to arrearages that the obligor is currently paying for the support of a child who has reached majority?

ANALYSIS

Appellant Martisko argues that because the child in California has reached majority the California support order no longer exists and Branch is paying a judgment for arrearages. She urges that such payments are not excludable from Branch’s income. She also contends that the district court erred in affirming the magistrate’s interpretation of Minn.Stat. § 518.551, subd. 5(b)(viii) (2000), because it violates public policy.

The record does not show that the California arrearages have been reduced to judgment or that a child support order automatically becomes a judgment for any arrearages that exist when the child reaches majority. The record supports the conclusion that Branch had been ordered by a California court to pay support for a child, that Branch fell into arrears on that support obligation, that the child reached majority but arrearages remained, and that Branch is currently paying down those arrearages.

Statutory construction is a. matter of law, which this court reviews de novo. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 393 (Minn.1998). Application of a statute to the undisputed facts of a case involves a question of law, and the district court’s, decision is not binding on this court. Boubelik v. Liberty State Bank, 553 N.W.2d 393, 402 (Minn.1996). Minn.Stat. § 518.551, subd. 5(b)(viii), states that a child support obli-gor’s “[tjotal monthly income (does not include] * * * [a] Child Support * * * Order that is Currently Being Paid.” The statute does not distinguish between payments being made when due and payments to satisfy arrearages. It requires only that there be an order'for child support and that payments under that order are currently being made. There is no contention here that Branch’s California payments are gratuitous;’ rather, he is paying because a court has ordered him to do so.

There is no contention that the California payments are for anything other than child support, albeit past due. Thus, Branch’s California payments fit the plain language. of the statute. When the language of a statute, is clear on its face and free from ambiguity, no interpretation is necessary, or even permissible. Owens v. Water Gremlin Co., 605 N.W.2d 733, 737 (Minn.2000). In such case, the courts must simply apply the statute to appropriate facts. See Deal v. Northwood Children’s Home Soc’y, Inc., 608 N.W.2d 922, 925 (Minn.App.2000) (stating that “[i]n the absence of ambiguity the court must apply the plain language of the statute”), review denied (Minn. June 13, 2000). The magistrate did so.

Martisko also argues that allowing respondent to deduct the $200 violates public policy because it is an egregious result for A.B., who is failing to receive child support that “is rightfully hers.” However, Minnesota law provides that the needs of subsequent children do not necessarily take precedence in determining child support obligations. Minn.Stat. § 518.551, subd. 5f (2000); see, e.g., Bock v. Bock, 506 N.W.2d 321, 324 (Minn.App.1993) (stating that although it is appropriate for the district court to consider obligor’s burden to support subsequent children, a principle with equal force is that the needs of subsequent children cannot be factored into a guidelines calculation); Hayes v. Hayes, 473 N.W.2d 364, 365-366 (Minn.App.1991) (stating that a district court’s discretion in deferring to a later child support obligation is limited by “the long-standing recognition that a child support obligor must favor an established obligation over a subsequently assumed obligation.”); Wollschlager v. Wollschlager, .395 N.W.2d 134, 135-36 (Minn.App.1986) (finding that if ob-ligor is not paying the prior child support order, the prior obligation is to be disregarded in determining child support obligation for subsequent children; however, if the obligor is currently paying the prior support, he is entitled to have the amount deducted from his income). Although we are addressing the issue in the context of current payments of child support arrear-ages, these cases appear to apply to and support the magistrate’s interpretation of Minn.Stat. § 518.551, subd. 5(b)(viii), as well as the district court’s decision to affirm the magistrate’s interpretation. Nothing in these authorities suggests that the consideration of a current obligation for child support arrearages should be treated differently from payments made when due. We, therefore, reject Martis-ko’s public-policy argument.

DECISION

The district court correctly applied Minn.Stat. § 518.551, subd. . 5(b)(viii) (2000), and the application of the statute to child support arrearage payments does not violate public policy.

Affirmed.

      . A copy of the California order is not included in the record for this appeal. However, both parties agree that the payments being made pursuant to the California order are solely for child support arrearages. Martisko argues that the California order is no longer in effect, but there is no showing that the California arrearages have been forgiven, or that child support arrearages are automatically forgiven once the child reaches majority.


author: HALBROOKS, Judge

text:
    Sharon NELSON, Appellant, v. AMERICAN FAMILY INSURANCE GROUP, Respondent.
    No. C4-01-226.
    Court of Appeals of Minnesota.
    Aug. 28, 2001.

      Daniel L. Giles, Christenson, Stoneberg, Giles & Stroup, P.A., Marshall, MN, for appellant.
    Richard Dale, Sioux Falls, SD, for respondent.
    Considered and decided by TOUSSAINT, Chief Judge, HALBROOKS, Judge, and LINDBERG, Judge.

       Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const, art. VI, § 10.

   HALBROOKS, Judge

Appellant won a jury verdict in South Dakota against a negligent driver for losses stemming from a motor-vehicle accident that occurred in South Dakota. She subsequently brought a lawsuit in Minnesota to recover no-fault benefits from her insurer. On cross-motions for summary judgment, the district court granted respondent’s motion and dismissed appellant’s no-fault wage-loss claim. Appellant contends that she is entitled to wage-loss benefits that her insurer should have paid her before the South Dakota verdict was rendered. Appellant asserts that neither the statutory set-off provision nor the theories of accord and satisfaction, collateral estop-pel, or res judicata bar her claims. Because appellant has been compensated for her wage loss, and receipt of no-fault wage-loss benefits would result in a duplicate recovery, we affirm. We do not reach the issues of whether any legal theory advanced by respondent bars appellant’s claim.

FACTS

Appellant Sharon Nelson had automobile insurance with respondent American Family Insurance Group. On March 2, 1990, appellant was involved in a motor-vehicle accident, and, pursuant to her no-fault coverage, respondent paid her the maximum of $20,000 in wage-loss benefits. On May 16,1991, appellant was involved in a second automobile accident that occurred in South Dakota. Respondent denied appellant’s claim for wage-loss benefits arising out of the second accident on the ground that she had not been medically released to return to work by the time the second accident occurred. Appellant never sought arbitration of her no-fault claims pursuant to Minn.Stat. § 65B.525 (Minn. 2000).

Appellant brought a tort claim in South Dakota against the other driver in the May 16, 1991 accident. The jury awarded appellant $87,000 for past wage loss, $53,000 for loss of future earning capacity, and $16,000 for future medical expenses. The judgment was paid in full.

Following the verdict, appellant sued respondent in Minnesota for breach of contract. The parties settled appellant’s claim for medical benefits related to the second accident. Respondent filed a motion for summary judgment on the remaining claim for no-fault wage-loss benefits.

The district court granted summary judgment in favor of respondent. The court held that, in light of the South Dakota jury’s award of $37,000 for past wage loss, “awarding further loss of income damages would frustrate the purpose of the No Fault act by allowing duplicative recovery.” This appeal follows.

ISSUES

1. Did the district court err in its interpretation of the no-fault act?

2. Is respondent entitled to the defenses of res judicata, collateral estoppel, or accord and satisfaction?

ANALYSIS

I.

This is a case of first impression. Because the question requires us to determine the intent and effect of the no-fault act, our review is de novo. American Family Ins. Group v. Schroedl, 616 N.W.2d 273, 277-78 (Minn.2000). A statute should be interpreted, whenever possible, to give effect to all of its provisions; “no word, phrase, or sentence should be deemed superfluous, void, or insignificant.” Amaral v. Saint Cloud Hosp., 598 N.W.2d 379, 384 (Minn.1999) (citing Owens v. Federated Mut. Implement & Hardware Ins., 328 N.W.2d 162, 164 (Minn.1983)). When construing a statute, a court’s goal is to ascertain and effectuate the intention of the legislature. Id.

In the case of the no-fault act, the legislature has stated the statute’s purpose clearly:

To relieve the severe economic distress of uncompensated victims of automobile accidents within this state by requiring automobile insurers to offer and automobile owners to maintain automobile insurance policies or other pledges of indemnity which will provide prompt payment of specified basic economic loss benefits to victims of automobile accidents without regard to whose fault caused the accident;
⅜ ⅜ ⅜ ‡
To correct imbalances and abuses in the operation of the automobile accident tort liability system, to provide offsets to avoid duplicate recovery, * * * and to govern the effect of advance payments prior to final settlement of liability.

MinmStat. § 65B.42 (2000) (emphasis added). When an insured seeks recovery against a tortfeasor, the no-fault act does not “impair or limit tort liability or limit the damages recoverable from any person for negligent acts or omissions.” Minn. Stat. § 65B .51, subd. 5 (2000). Rather, to avoid a double recovery in negligence actions, the statute directs a Minnesota court to offset any tort award by the amount of basic economic benefits already paid or payable by the no-fault provider. Minn. Stat. § 65B.51, subd. 1 (2000).

Here, we agree with the district court that appellant is, in essence, seeking a double recovery. We recognize that this case varies from the more standard no-fault claim, where the no-fault insurer would have paid the insured for causally related losses and any payment would have been offset against a later jury award, assuming that the appropriate request was made. Cf id. The reverse sequence occurred here — appellant obtained a tort award and then challenged a denial of no-fault benefits, asserting that the insurer’s statutory obligation is unaffected by the tort recovery.

We have routinely held that the no-fault act precludes double recoveries regardless of the label. See, e.g., Simpson v. American Family Ins. Co., 603 N.W.2d 860, 864 (Minn.App.2000) (under no-fault act, insured cannot recover future economic damages from insurer until exhausting jury award); LeBeau v. John Deere Ins. Co., 574 N.W.2d 83, 85 (Minn.App.1998) (insured must first exhaust the amount of the settlement allocated for expected medical expenses before being entitled to recover any medical expenses from insurer), review denied (Minn. Mar. 26,1998).

Appellant urges us to adopt a different result because her jury verdict was obtained in South Dakota. Under her reading of the no-fault act, there cannot be an offset for the jury award because there is no Minnesota judgment. We disagree with appellant that the fact that this is a foreign judgment alters the result under the Minnesota statutory scheme. Our courts should apply the law of Minnesota, not South Dakota, when the claim is between a Minnesota resident and her Minnesota insurer. Appellant alludes that there is a difference between Minnesota and South Dakota insurance laws, but her only citation to South Dakota law is a statute that pertains to medical malpractice, not insurance law. See S.D. Codified Laws § 21-3-12 (2000) (discussing admissibility of evidence of special damages insurance from certain collateral sources in personal injury actions for medical malpractice). Moreover, South Dakota, like Minnesota, avoids granting double recoveries. “South Dakota law is explicit and unambiguous in prohibiting a double recovery” in cases involving uninsured-motorist disputes between insurance companies and their insureds. Nickerson v. American States Ins., 616 N.W.2d 468, 472 (S.D.2000) (citation omitted).

Further, the Minnesota no-fault act provides that insureds are entitled to no-fault insurance benefits if they are involved in accidents outside Minnesota. Minn.Stat. § 65B.46, subd. 2 (2000). The offset provision simply states that “[w]ith respect to a cause of action in negligence,” the court must reduce a jury award by “the value of basic or optional economic loss benefits paid or payable.” Minn.Stat. § 65B.51, subd. 1. The provision does not limit the offset to causes of action brought in Minnesota. Reading these two provisions together suggests to us that a foreign verdict should be treated the same as a verdict obtained in Minnesota. See Kalberg v. Park & Recreation Bd. of Minneapolis, 563 N.W.2d 275, 278 (Minn.App.1997) (when construing a statute, a court must “look to the statute as a whole and give effect to all of its provisions”). It would be absurd to say that an insured can be overcompensated if a liability verdict is obtained outside the state but not if it is obtained in Minnesota. State v. Behl, 564 N.W.2d 560, 570 (Minn.1997) (Keith, C.J., dissenting) (“statutes are to be given a sensible construction that avoids unreasonable, unjust, or absurd results” (citing Thoresen v. Schmahl, 222 Minn. 304, 311, 24 N.W.2d 273, 277 (1946))).

Finally, appellant argues that, because she agreed to a 33% contingency-fee arrangement with her attorney in the South Dakota action, the jury award does not fully compensate her. This argument is without merit.

II.

Respondent argues that several defenses — res judicata, collateral estoppel, and accord and satisfaction — serve to bar appellant’s claim. The district court did not address these issues. Because we have concluded that the district court did not err in its application of the no-fault statute, we also decline to address the applicability of these defenses.

DECISION

The district court did not err in holding that payment of no-fault wage-loss benefits under these circumstances would result in a double recovery to appellant and is, therefore, prohibited by the statute.

Affirmed.


author: HARTEN, Judge.

text:
    Dean E. MORLOCK, et al., Respondents, v. ST. PAUL GUARDIAN INSURANCE COMPANY, Appellant.
    No. C2-01-340.
    Court of Appeals of Minnesota.
    Aug. 28, 2001.
    Review Granted Oct. 24, 2001.

      Phillip R. Krass, C. John Jossart, Krass Monroe, P.A., Bloomington, MN, (for respondents).
    Charles E. Lundberg, Michael A. Klu-tho, Bassford, Lockhart, Truesdell & Briggs, P.A., Minneapolis, MN, (for appellant).
    Considered and decided by LANSING, Presiding Judge, HARTEN, Judge, and WILLIS, Judge.
   OPINION

HARTEN, Judge.

Respondents Dean and Judy Morlock brought an action against appellant St. Paul Guardian Insurance Company to recover underinsured motorist benefits after Dean Morlock was injured in a car accident. A jury awarded Dean Morlock $508,060.50 for past and future damages and Judy Morlock $125,000 for loss of consortium. The district court denied appellant insurer’s motion for a new trial, JNOV, and remittitur. The insurer contends on appeal that the district court erred in giving a prejudicial jury instruction and in declining to grant remittitur based on insufficient evidence presented at trial. We reverse and remand for a new trial.

FACTS

On September 15, 1996, an underinsured motorist rear-ended a car driven by respondent Dean Morlock (Morlock) near a highway construction site. Appellant St. Paul Guardian Insurance Company (Guardian) was the underinsured motorist insurance carrier for Morlock’s car. Mor-lock sustained injuries in the accident and, having reached a settlement with the motorist who had rear-ended him, brought an action against appellant to recover under-insured motorist benefits. In the same action, respondent Judy Morlock, Mor-lock’s wife, sought to recover benefits for loss of consortium.

At trial, Morlock testified that he experienced chronic head, neck, and back pain following the accident. Witnesses familiar with Morlock’s life and work activities testified that he had become less active following the accident.

Morlock’s attorney introduced videotaped deposition testimony by Morlock’s treating physicians, one of whom testified that Morlock experienced neck and back pain after the accident and had surgery to repair disks in his back. The same physician noted that Morlock had sustained a back injury in 1957, which resulted in his hospitalization and treatment for back pain intermittently throughout the 1970s to the early 1990s. The physician explained, however, that Morlock’s medical records showed no flare-ups or hospitalizations for back pain during the five years prior to the accident, suggesting that Morlock’s present injuries were caused by the 1996 accident. Nevertheless, the physician acknowledged that the residual effects of the 1957 accident had not been fully resolved and still existed to some degree. He also conceded that some of Morlock’s current complaints were due to pre-existing problems such as degenerative arthritis of the spine and joints.

Morlock’s medical records indicate that he has received treatment for various ailments throughout his lifetime, many of which produced symptoms similar to those he experienced after the 1996 accident. As late as 1991, Morlock received treatment for back pain that the treating physician diagnosed as probable degenerative lumbar arthritis. In videotaped deposition testimony, Guardian’s medical expert testified that, based on his medical records, Morlock’s current medical complaints resulted not only from the car accident, but also from pre-existing medical problems relating to the skeletal system, back, and neck. Morlock’s counsel acknowledged at trial that “there is evidence in this case which could support [a] conclusion that a pre-existing condition is part of the problems that Dean Morlock is experiencing now.”

Over Guardian’s objection, the district court instructed the jury in relevant part as follows:

A person who has a defect or disability at the time of an accident is entitled to damages for any aggravation of that pre-existing condition.
Damages are limited, however, to results which are over and above those which normally followed from the preexisting condition, had there been no accident.
If you cannot separate damages from those caused by the accident, the defendant is liable for all of the damages.

(Emphasis added).

The jury returned a special verdict, awarding Morlock $508,060.50 for past and future damages resulting from the accident, including medical expenses, loss of earning capacity, and pain. The jury awarded Judy Morlock $125,000 for past and future loss of consortium as a result of the accident.

Guardian filed post-trial alternative motions for a new trial, JNOV, and remittitur based, in part, on the district court’s jury instruction concerning pre-existing injuries. The district court denied Guardian’s motions, stating that the jury instruction at issue correctly expressed Minnesota law. This appeal followed.

ISSUES

1. Is Guardian entitled to a new trial because the district court gave an erroneous jury instruction concerning non-separable, pre-existing medical conditions?

2. Is Guardian entitled to remittitur because of insufficient evidence presented at trial?

ANALYSIS

1. Jury Instructions

Guardian contends that the district court erred in instructing the jury concerning pre-existing injuries, arguing that the district court gave an instruction that is both erroneous and prejudicial.

District courts have considerable latitude in selecting language used in jury instructions and in determining the propriety of a specific instruction. Alholm v. Wilt, 394 N.W.2d 488, 490 (Minn.1986). The instructions must be read as a whole, keeping in mind its total impact on the jury. Lindstrom v. Yellow Taxi Co., 298 Minn. 224, 229, 214 N.W.2d 672, 676 (1974). If the instructions are misleading and conflicting on a material issue, a new trial ordinarily should be granted. Id. Further, “[i]f an instruction is erroneous and an appellate court is unable to determine whether the error affected the jury, a new trial should be granted.” Apache Plaza, Ltd. v. Midwest Sav. Ass’n, 456 N.W.2d 729, 733 (Minn.App.1990) (citing Lieberman v. Korsh, 264 Minn. 234, 242, 119 N.W.2d 180, 186 (1962)), review denied (Minn. Aug. 23, 1990).

Here, the district court instructed the jurors that if they could not “separate damages from those caused by the accident, the defendant is liable for all of the damages.” This instruction resembles that set out in 4A Minnesota Practice CIVJIG 91.40 (1999):

There is evidence that (plaintiff) had a pre-existing disability or medical condition at the time of the accident.
(Defendant) is liable only for any damages that you find to be directly caused by the accident.
If you cannot separate damages caused by the pre-existing disability or medical condition from those caused by the accident, then (defendant) is liable for all of the damages.

Guardian disputes the validity of the last sentence in the CIVJIG instruction, which is virtually identical to the instruction given by the district court. Guardian argues that the instruction impermissibly shifts the burden of proof to the defendant in cases involving aggravation of a pre-exist-ing injury.

Blatz v. Allina Health Sys., 622 N.W.2d 376 (Minn.App.2001), review denied (Minn. May 16, 2001), supports Guardian’s position. In Blatz, the instruction at issue im-permissibly “place[d] the burden of proof for the apportionment of aggravation on the at-fault defendant” and thereby extended principles underlying joint and several liability to “circumstances in which they [did] not apply.” Id. at 390. Moreover,

applying the instruction to aggravation of a pre-existing medical condition to apportion damage between that pre-ex-isting condition and an at-fault defendant not only extends Minnesota law but also conflicts with existing caselaw.

Id. at 391-92 (citation omitted).

The Morlocks argue that the instruction at issue does in fact correctly state Minnesota law, but the Minnesota caselaw and foreign precedents on which the Morlocks rely, were considered and rejected by the Blatz court. We accede to the discussion in Blatz and hold that the instruction given in this case misstated Minnesota law.

The Morlocks claim that even if the district court gave an erroneous instruction, appellant nevertheless is not entitled to a new trial. They argue that the district court’s instruction “neither destroyed the substantial correctness of the charge nor created substantial prejudice on a vital issue.” To support this conclusion, they suggest that the jury must have decided that Morlock had no pre-existing injuries and to the extent that he did, those injuries were asymptomatic prior to the 1996 accident.

The evidence adduced at trial, however, does not support the Morlocks’ view. The evidence demonstrated that Morlock has experienced intermittently recurring back pain for several decades. Guardian’s expert offered the opinion — based on Mor-lock’s medical records — that many of Mor-lock’s current complaints stemmed from pre-existing medical conditions related to degeneration of the skeletal system, back, and neck. Morlock’s own expert acknowledged that some of Morlock’s current complaints were likely caused by pre-existing medical conditions rather than the 1996 accident. Such evidence contradicts the proposition that Morlock had no pre-exist-ing injuries or that such injuries were asymptomatic prior to the 1996 accident.

Based on the evidence presented at trial, the jury could have attributed some of Morlock’s present injuries and concomitant damages to his recurring back problems; yet the jury may have been unable to separate the damages caused by the recurring injuries from the injuries caused by the 1996 accident. If so, it is entirely possible, if not probable, that the jury used the district court’s erroneous instruction to conclude that Guardian was liable for all of Morlock’s damages, notwithstanding that not all of those damages were due to the 1996 accident. Because the erroneous instruction may have influenced the jury and because we cannot determine with certainty whether it did, a new trial is warranted on the Morlocks’ claims. See Apache Plaza, 456 N.W.2d at 733 (“If an instruction is erroneous and an appellate court is unable to determine whether the error affected the jury, a new trial should be granted.”).

Guardian also points out that Judy Mor-lock’s claim for loss of consortium derives from her husband’s right to recover from appellant. See, e.g., Huffer v. Kozitza, 375 N.W.2d 480, 482 (Minn.1985). Because Judy Morlock’s claim is inextricably linked to her husband’s, the error in the instructions for Morlock’s claim also affects his wife’s claim. Thus, we hold that a new trial is warranted for Judy Morlock’s claim as well.

2. Remittitur

Because we hold that Guardian is entitled to a new trial, we do not reach the remittitur issue.

DECISION

The district court’s instruction concerning non-separable, pre-existing medical conditions constituted prejudicial error requiring a new trial as to both respondents’ claims.

Reversed and remanded.

      . In Blatz, however, the instruction did not constitute fundamental error requiring a new trial.


text:
    2001 ND 134
    In the Matter of the NAME CHANGE OF THE STATE BAR BOARD to the State Board of Law Examiners.
    No. 20010181.
    Supreme Court of North Dakota.
    July 20, 2001.
   ORDER

[¶ 1] Effective August 1, 2001, the name State Bar Board will change to State Board of Law Examiners. The name “State Bar Board” appears throughout various rules adopted by this Court.

[¶ 2] IT IS HEREBY ORDERED, that wherever “State Bar Board” appears in the North Dakota Rules of Civil Procedure, North Dakota Rules of Court, North Dakota Rules for Lawyer Discipline, the North Dakota Supreme Court Administrative Rules, Rule on Limited Practice of Law by Law Students, North Dakota Rules for Continuing Legal Education, and any other rules adopted by this Court, it means the “State Board of Law Examiners”. The specific affected rules need not be immediately republished with the name change, but will be forwarded to the publishers for inclusion in the next republication of the rules.

[¶ 3] Dated this 20th day of July, 2001.

[¶ 4] GERALD W. VANDE WALLE, C.J.

CAROL RONNING KAPSNER, J. DALE V. SANDSTROM, J. WILLIAM A. NEUMANN, J. MARY MUEHLEN MARING, J.