text:
    COUNTY OF MORRISON, Respondent, v. Gordon K. WHEELER, Sr., et al., Appellants.
    No. A05-2002.
    Court of Appeals of Minnesota.
    Oct. 10, 2006.

      Randall D.B. Tigue, Randall Tigue Law Office, P.A., Minneapolis, MN, for appellant.
    Paul D. Reuvers, Pamela J. Whitmore, Iverson Reuvers, Bloomington, MN, for respondents.
    Considered and decided by KALITOWSKI, Presiding Judge; RANDALL, Judge; and PETERSON, Judge.
   OPINION

RANDALL, Judge.

Appellants, as owners of an adult business, argue: (a) their adult business was open before the enactment of the county ordinance that provided the basis for enjoining its business, so the business is entitled to lawful-nonconforming status under the ordinance; and (b) the ordinance under which the business was enjoined is unconstitutional under the First Amendment because it enacted content-based regulation of constitutionally protected speech, failed to serve a substantial governmental interest, and did not allow for reasonable alternative avenues of communication.

Appellants further argue that because they sufficiently challenged the county’s evidence of secondary adverse effects of adult-use businesses, the burden shifted to the county to produce further evidence showing that its existing regulation was inadequate to address those effects. Finally, appellants argue that the record does not support the county’s purported basis for the ordinance.

Respondents initially argue that appellants cannot challenge the constitutionality of the ordinance. We reject respondent’s argument that the issue of constitutionality of the ordinance is not ripe for review by this court. We will approach it on the merits.

The district court did not err when it granted summary judgment for the county and upheld the constitutionality of the ordinance. The district court did not err when it permanently enjoined operation of the adult-use business. The district court properly granted summary judgment when it determined that the adult-use business did not acquire status as a legal-nonconforming use under the ordinance.

FACTS

In 1995, Morrison County (respondent or the county) considered the issue of adult-entertainment zoning and enacted Section 1202.8 of its zoning code. This zoning ordinance (1995 AUB ordinance) restricted adult-use businesses (AUBs) from operating within 1,320 feet (one-quarter mile) of residential districts, daycare centers, schools, parks, playgrounds, or religious institutions, or within 200 feet of a building licensed to sell alcoholic beverages. In December 2001, the county enacted a moratorium prohibiting any new AUBs in the county for one year. In November 2002, the moratorium was extended for an additional one-year period to December 12, 2003.

On or about October 17, 2003, appellants purchased a piece of property within Morrison County, intending to open an AUB at this location. This property was approximately 930 feet from a building licensed to sell alcoholic beverages and less than 1,320 feet from two dwelling units. Appellants opened the business, Lookin Fine Smut & Porno (LFSP), between October 18 and October 21, 2003.

On October 21, 2003, before the moratorium expired, the county amended the existing AUB ordinance (2003 AUB ordinance) and passed another ordinance that regulated sexually oriented businesses (SOB ordinance). These actions did not become effective until November 3, 2003. The differences between the 2003 AUB ordinance and the 1995 AUB ordinance included an increase in set-back requirements from businesses licensed to sell alcoholic beverages from 200 feet to 1,320 feet, imposing a set-back requirement from “any dwelling unit” rather than from “residential districts, and language restricting AUBs from operating within shore land commercial districts. The county cited concerns over the secondary effects of AUBs as the primary rationale for the changes made. This conclusion was drawn after considering a series of studies that allegedly evidenced an increase in certain crimes, a decrease in property values, and an increase in transmission of sexually transmitted diseases in geographical areas surrounding AUBs.

The county filed a complaint with the district court on October 30, 2003, alleging that LFSP violated the county’s moratorium on opening or expanding AUBs within the county; that LFSP was in violation of the set-back requirements of the 2003 AUB ordinance; or, in the alternative, that LFSP was in violation of other health and food-and-beverage ordinances. With regard to the health ordinance, the county alleged, and LFSP acknowledged, that LFSP did not have a properly functioning septic system. The complaint sought a permanent injunction from the district court to enjoin LFSP from operating as an AUB.

Appellants challenged the request for a permanent injunction based on grounds that they were not in violation of the 1995 zoning ordinance, which was in effect at the time the business opened; that the violation of the health ordinance did not disqualify LFSP from being exempted from subsequent ordinances; and that the interim moratorium was unconstitutional as a complete ban against protected speech. Appellants claim that the 2003 AUB ordinance, even if applicable to appellants’ business, was not adequately supported by the findings of the county and would have the effect of suppressing or substantially reducing access to constitutionally protected speech. Thus, appellants claimed a violation of their rights under the First and Fourteenth Amendments to the United States Constitution. Appellants also filed a counterclaim under 42 U.S.C. § 1983 to redress the county’s alleged deprivation of their constitutional rights.

The district court issued a temporary injunction that prohibited appellants from using their property for “any purpose until such time as the property is equipped with a septic system appropriate for the intended use”, dismissed the food-and-beverage compliance complaint, and reserved the issues involving the moratorium and newly enacted ordinance. The parties later stipulated to a plan for removing septic materials. The stipulation was approved by the district court and provided that the appellant would be permanently enjoined from operating the business until the county approved a septic-materials removal plan. This stipulation also stated that “the [county] will consider the septic issue separate from the adult use issue.”

Both parties moved for summary judgment. The district court issued a decision on the motions and ruled that the moratorium was an unconstitutional based speech regulation “that failed to provide any alternative avenue for expression, with respect to either location ... or content.” The district court also determined that LFSP did not have grandfather rights under the 1995 zoning ordinance because it was not a lawful-nonconforming use at the time the 2003 AUB ordinance went into effect. The court deferred ruling on the constitutionality of the 2003 AUB ordinance and the SOB ordinance and allowed the parties to further develop the issues at an evidentiary hearing.

The district court convened an evidentia-ry hearing for the purposes of determining whether the county provided adequate evidence to support its enactment of the 2003 AUB ordinance and whether the 2003 AUB ordinance provided sufficient alternative locations for AUBs in Morrison County. The district court granted the county’s motion for summary judgment, determining that the AUB ordinance was content neutral, was based on a substantial governmental interest, and provided alternative avenues for expressing protected communication.

ISSUES

1. Did the district court err in determining that LFSP did not attain lawful-nonconforming use rights before the enactment of Morrison County’s permanent zoning ordinance?

2. Is appellants’ challenge to the constitutionality of the 2003 AUD ordinance ripe for review?

3. Did the district court properly determine that Morrison County’s permanent zoning ordinance does not have the effect of suppressing or greatly denying access to constitutionally protected speech?

A. Does a government have an increased evidentiary burden when it seeks to substitute or amend an existing regulation that has the expressed purpose of countering adverse secondary effects purportedly caused by AUBs?
B. Did appellants succeed in casting direct doubt on the county’s evidence or factual findings that support the 2003 AUB ordinance?
C. Did the 2003 AUB ordinance provide reasonable alternative avenues of communication?

ANALYSIS

I. Grandfather Rights

The first issue is whether the LFSP properly established itself as a business and was eligible to receive lawful-nonconforming-use rights (grandfather rights) under the county’s amended AUB ordinance. If LFSP was a legally established business before the amendment of the AUB ordinance, regardless of issues with the septic system, LFSP may apply for a certificate and be allowed to exist under the amended AUB ordinance as a “grandfathered-in” business. If not, LFSP is subject to the laws in existence at whatever time it became (or becomes) a lawful, established business.

“Interpretations of state statutes and existing local zoning ordinances are questions of law that this court reviews de novo.” Buss v. Johnson, 624 N.W.2d 781, 784 (Minn.App.2001). Zoning decisions of a municipal body that require judgment and discretion are reviewed to determine whether the municipal body acted arbitrarily, capriciously, or unreasonably, and whether the evidence reasonably supports the decision made. See Frank’s Nursery Sales, Inc. v. City of Roseville, 295 N.W.2d 604, 608 (Minn.1980). An action is reasonable, or ' not arbitrary, when it bears a reasonable relationship to the purpose of the ordinances. See Arcadia Dev. Corp. v. City of Bloomington, 267 Minn. 221, 227, 125 N.W.2d 846, 851 (1964). Despite a municipality’s broad discretionary power, however, the reviewing court may reverse the municipality’s decision if its reasons are “legally insufficient or if the decision is without factual basis.” Amoco Oil Co. v. City of Minneapolis, 395 N.W.2d 115, 117 (Minn.App.1986).

“A residential zoning ordinance may constitutionally prohibit the creation of uses which are nonconforming, but existing nonconforming uses must either be permitted to remain or be eliminated by use of eminent domain”. County of Freeborn v. Claussen, 295 Minn. 96, 99, 203 N.W.2d 323, 325 (1972), (citing Hawkins v. Talbot, 248 Minn. 549, 80 N.W.2d 863 (1957)). The supreme court later qualified this holding by determining that “uses lawfully existing at the time of an adverse zoning change may continue to exist until they are removed or otherwise discontinued.” Hooper v. City of St. Paul, 353 N.W.2d 138, 140 (Minn.1984). Hooper states that “[violations of ordinances unrelated to land use planning do not render the type of use unlawful.” Id. at 141. Similarly, the supreme court held that “[t]he general rule that only existing lawful uses are entitled to due process protection as nonconforming uses established is directed primarily to the protection of uses established in compliance with then existing zoning classifications.” Id.

Both parties rely on Hooper v. St. Paul as decisive of whether LFSP was a lawful-nonconforming use. In Hooper, the Minnesota Supreme Court determined that the use of the property in question as a carriage house was a valid nonconforming use although the owners had not obtained proper building permits for alterations under the former regulatory scheme. Id. at 142. The court determined that St. Paul’s remedy must be sought “in the enforcement provision of the building code” not “in denying the owners the right to continue the existing [nonconforming] use of the property, a use permitted under the zoning code in effect when the use was established.” Id.

Appellants assert that the rationale utilized in Hooper is directly applicable here and that their use of the property'under the 1995 AUB ordinance, the zoning code in effect when LFSP opened for business, was proper when the use was established. Appellants recognize that the county has the right to enforce the applicable ordinances and regulations regarding the septic system, but assert that LFSP was a lawful-conforming use under the 1995 AUB ordinance and that the county’s attempted enforcement actions are wholly separate from the AUB ordinance passed by the county after the establishment of LFSP. As such, appellants contend they have a right to be considered a lawful-nonconforming use.

The county determined that LFSP did not qualify as a lawful-nonconforming use because it had not sought approval of a plan to rectify pre-existing septic issues. The county contends that without abiding by all county ordinances, LFSP could not have become a legal entity, much less a lawful-nonconforming use. The county argues that LFSP, unlike the carriage house in Hooper, was never a lawful use of the property due to the septic issues, and as such cannot seek protection under the guise of a lawful-nonconforming use.

The district court’s October 15, 2004 order determined that the septic issue is related to land-use planning, and thus distinguished the rationale of Hooper and the cases it relied on. To support this decision, the court noted Morrison County Land Use Control Ordinance sections: (1) 101 (regulating “the location, size, use, and arrangement of lots and buildings in and for the unincorporated portions of Morrison County, Minnesota dividing the county into zoning districts, and providing sewage control and land subdivision regulation for the purpose of promoting health, safety, morals, and general welfare of Morrison County”); (2) 304.6 (discussing on-site sewage treatment systems); (3) 503.1 (requiring land-use permits for “the installation and/or alteration of sewage-treatment systems”); (4) 503.3 (requiring work authorized by a sewer permit to be completed within six months); (5) 703.1 (regulating on-site sewage-treatment-system setbacks in shoreland areas); (6) 909.4 (discussing nonconforming sewage-treatment systems); and (7) 1502.5(e) (providing criteria for evaluating planned-unit developments).

The district court was correct to point out Morrison County’s numerous regulations that deal specifically with sewage management within its Land Use Control Ordinance. These regulations underscore the importance that the county places on sewage management and recognize that sewer and septic management are part and parcel of land-use planning. If businesses are able to avoid compliance with these requirements, a county’s police power to combat potential public nuisances or uses that are unsanitary or unsafe for humans is nearly destroyed. See Almquist v. Town of Marshan, 308 Minn. 52, 64, 245 N.W.2d 819, 825 (Minn.1976) (noting broad police powers of counties and municipalities in land-use planning).

Unlike the facts in Hooper, when the carriage house in question had existed in its location for at least 60 years and been in conformance with local zoning regulations before the regulation change, LFSP attempted to open its doors just days before the enactment of a regulation change at a location that had not previously been in conformance -with septic regulations. While appellants may have called a company regarding the regular pumping of the septic tanks, the county was not consulted regarding this proposed solution. The county suspended the food and beverage licenses of the previous occupant of this location for failure to comply with applicable septic regulations. Without these licenses, the county restricted the previous occupants from operating their business at this location to protect the health of county citizens and protect the natural resources surrounding the facility. Until the previous owners vacated the location, the county remained in continuous contact with them to assure that the septic tanks were being pumped before every event hosted at this location.

This vigilance toward the septic problems at the location in question shows the county’s considerable interest in how this land is used and retaining its ability to regulate such use. If properties were able to avoid this valid form of land-use regulation, we would effectively strip the county of its ability to protect its citizens from public nuisances or unsafe or unsanitary business practices.

Appellants also note a stipulation in the record under which the parties agreed to consider the septic issue separate from the adult-use issue and agreed to a permanent injunction precluding operation of LFSP until appellants comply with the relevant septic requirements. Appellants claim that this stipulation' and the injunction agreed to underscore the county’s other means of enforcement and undercuts the argument that LFSP cannot be a lawful-nonconforming use because of the septic issues. We disagree with appellant’s restrictive interpretation of the stipulation. The stipulation simply shows that there are two distinct arguments in this case and underscores the duty that LFSP had to obtain permission from the county to correct the problems within the septic system. Had LFSP approached the county before opening for business, the administrative zoning process would have been the appropriate forum for this issue. Because LFSP failed to seek the county’s approval, the county was forced to seek an injunction of LFSP’s noncomplying use of the land.

II. Permanent Injunction

Morrison County brought this action in a district court to obtain a permanent injunction which halted any operation of LFSP’s business. LFSP defended on the merits and raised certain defenses which included the constitutional claims that were briefed and argued before this court. Morrison County and LFSP stipulated that the constitutional and septic system issues would be considered separately. The district court held that the septic system was non-conforming under Morrison County’s applicable land-use ordinances and that the 2003 AUB ordinance satisfied the tests that the Supreme Court has put forward to safeguard protected speech.

On appeal, Morrison County claims that LFSP did not have standing to challenge the constitutionality of the 2003 AUB ordinance in district court and therefore the district court had no jurisdiction to hear the constitutional issues.

After examining-the history of the present controversy as set out in the record, we conclude that when Morrison County sought a permanent injunction, it was clear that the constitutionality of the 2003 AUB ordinance would be at issue. The parties stipulating that the constitutional issues and the septic system issues would be considered separately show understanding of the parties that the district court would, at some point, consider the constitutional issues.

With this record, we reject Morrison County’s argument that the district court did not have jurisdiction to hear the constitutional issues. The district court had jurisdiction to hear these,issues. The court entered a final judgment on the constitutionality of the 2003 AUB ordinance, finding in favor of Morrison County. LFSP filed and served a proper and timely appeal.

III. Constitutional Challenge

The district court at summary judgment upheld the constitutionality of the 2003 Morrison County AUB ordinance. Summary judgment is appropriate when no genuine issues of material fact exist and a party is entitled to judgment as a matter of law. City of Elko v. Abed, 677 N.W.2d 455, 460 (Minn.App.2004), review denied (Minn. June 29, 2004); Minn. R. Civ. P. 56.03. On appeal from summary judgment, this court asks two questions: whether there are any genuine issues of material fact and whether the district court erred in its application of the law. Cummings v. Koehnen, 568 N.W.2d 418, 420 (Minn.1997). On undisputed facts, this court reviews whether the district court erred in its application of the law. City of Elko, 677 N.W.2d at 460. The constitutionality of an ordinance presents a legal question, reviewable de novo by this court. Id.

The United States Supreme Court has spoken on ordinances that regulate adult-entertainment businesses and set forth a test to determine if a local governmental unit has unfairly suppressed or denied access to constitutionally protected speech. In Renton v. Playtime Theatres, Inc., 475 U.S. 41, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986), the Supreme Court used a several-step analysis. First, the Court determined that the ordinance in question did not ban AUBs altogether; rather, it only required a minimum distance between adult theaters and sensitive locations. Id. at 46, 106 S.Ct. at 928. Therefore, the regulation was merely a time, place, and manner regulation. Id. The Court considered whether the ordinance was content-neutral or content-based. It determined that because the ordinance was aimed at curing harmful secondary effects of adult theaters and not the content of the movies they showed, the ordinance was content-neutral. Id. at 47-49, 106 S.Ct. at 929-30. Next, the court examined whether the ordinance was designed to serve a substantial governmental interest. Finally, the court concluded that reasonable, alternative avenues of communication remained available. Id. at 51-54, 106 S.Ct. at 930-32.

In City of Los Angeles v. Alameda Books, Inc., 535 U.S. 425, 122 S.Ct. 1728, 152 L.Ed.2d 670 (2002), the Court again used the Renton analysis to determine whether a local ordinance adequately left protected speech reasonably available. In discussing the burden on a party to successfully challenge a municipality’s regulation, the Court stated:

In Renton, we specifically refused to set such a high bar for municipalities that want to address merely the secondary effects of protected speech. We held that a municipality may rely on any evidence that is “reasonably believed to be relevant” for demonstrating a connection between speech and a substantial, independent government interest. 475 U.S. at 51-52, 106 S.Ct. 925; see also, e.g., Barnes v. Glen Theatre, Inc., 501 U.S. 560, 584, 111 S.Ct. 2456, 115 L.Ed.2d 504 (1991) (Souter, J., concurring in judgment) (permitting municipality to use evidence that adult theaters are correlated with harmful secondary effects to support its claim that nude dancing is likely to produce the same effects). This is not to say that a municipality can get away with shoddy data or reasoning. The municipality’s evidence must fairly support the municipality’s rationale for its ordinance. If plaintiffs fail to cast direct doubt on this rationale, either by demonstrating that the municipality’s evidence does not support its rationale or by furnishing evidence that disputes the municipality’s factual findings, the municipality meets the standard set forth in Renton. If plaintiffs succeed in casting doubt on a municipality’s rationale in either manner, the burden shifts back to the municipality to supplement the record with evidence renewing support for a theory that justifies its ordinance. See, e.g., Erie v. Pap’s AM., 529 U.S. 277, 298, 120 S.Ct. 1382, 146 L.Ed.2d 265 (2000) (plurality opinion).

Id. at 438-39,122 S.Ct. at 1736.

Appellants allege that the county’s 2003 AUB ordinance is unconstitutional because it has the effect of suppressing or greatly denying access to constitutionally protected speech. Appellants do not argue that the 2003 AUB ordinance bans AUBs altogether. Thus, the first step of the Supreme Court’s test is not in question. The regulation only limits the location of AUBs and as such qualifies as a time, place, and manner restriction of speech, which has been upheld by the Supreme Court. See Young v. American Mini Theatres, Inc., 427 U.S. 50, 96 S.Ct. 2440, 49 L.Ed.2d 310 (1976). Similarly, the county cited adverse secondary effects of AUBs as the reason for passing the 2003 AUB ordinance. Similar to Renton, it was not the content of the speech within AUBs that the ordinance sought to regulate, making the ordinance content-neutral. The question regarding the constitutionality of the 2003 AUB ordinance is whether the ordinance was designed to serve a substantial governmental interest and whether reasonable alternative avenues of communication remained available.

Appellants specifically assert that because Morrison County’s 1995 AUB ordinance sought to protect county citizens from adverse secondary effects of AUBs, the county must show that the 1995 AUB ordinance was insufficient to accomplish the county’s governmental interest. To support their claim, appellants argue that the county’s evidence of adverse secondary effects of AUBs was sufficiently challenged by appellants’ evidence, so that the burden shifted to the county to supplement the record to renew support for the county’s theory. Finally, appellants assert that the 2003 AUB ordinance so greatly restricts potential locations for AUBs within the county that it removes reasonable alternative avenues of communication.

We must determine: (1) whether there is an increased evidentiary burden on a government when it seeks to substitute or amend an existing regulation that has the expressed purpose of countering adverse secondary effects purportedly caused by AUBs; (2) whether appellants have sue-ceeded in casting direct doubt on- the county’s evidence or factual findings that support the 2003 AUB ordinance; and (3) whether the 2003 AUB ordinance provides reasonable alternative avenues of communication.

Does a government have an increased evidentiary burden tvhen it seeks to substitute or amend an existing regulation that has the expressed purpose of countering adverse secondary effects purportedly caused by AUBs?

Must Morrison County establish the 1995 AUB ordinance has been ineffective in reducing secondary effects of AUBs within the county before passing a subsequent regulation? Appellants argue that such a burden exists and that the district court erred in concluding it does not.

The Renton case has similarities to this case. In Renton, the Supreme Court was asked to consider whether the city of Ren-ton could rely upon evidence gathered from outside its surrounding areas to sustain the ordinance. The Court stated that because Renton had no AUBs within its borders, it did not have a reasonable opportunity to study the effects within its own locale. Renton, 475 U.S. at 51, 106 S.Ct. at 931. Specifically, the Court noted that “The First Amendment does not require a city, before enacting such an ordinance, to conduct new studies or produce evidence independent of that already gathered by other cities, so long as whatever evidence the city relies upon is reasonably believed to be relevant to the problem that city addresses. Id. at 51-52, 106 S.Ct. at 931.

The Supreme Court in Alameda Books also considered an analogous argument from adult businesses affected by a city ordinance. Alameda Books noted that alternative conclusions on the same evidence may be possible, but that requiring a government to counter alternative conclusions would' force communities to show not only that the evidence supports a governmental interest, but also that the evidence does not provide support for any other approach to serve that interest. Alameda Books, Inc., 535 U.S. at 438, 122 S.Ct. at 1736. The Court concluded that the challenged approach to interpreting the evidence was a “plausible reading” but not the “compelled reading” of the study in question. Id. The court stated that precedent held that “a municipality may rely on any evidence that is ‘reasonably believed to be relevant’ for demonstrating a connection between speech and a substantial, independent government interest.” Id. (citing Renton, 475 U.S. at 51-52, 106 S.Ct. at 930-31 and Barnes v. Glen Theatre, Inc., 501 U.S. 560, 584, 111 S.Ct. 2456, 2469-70, 115 L.Ed.2d 504 (1991) (Souter, J., concurring in judgment)). This court previously determined that Alameda Books did not heighten the Renton evidentiary standard for a municipality in showing that its enactment of an ordinance to regulate adult establishments serves a substantial government interest. City of Elko, 677 N.W.2d at 464.

Appellants argue that a different standard should apply in amending an ordinance and that the county must be able to show that its existing regulation proved inadequate to reduce the adverse secondary effects of the AUBs existing within the county. While appellants’ argument is understood, it leads to the necessary conclusion that communities that have already attempted to deal with adverse secondary effects through ordinances must compile information showing that amendment of the ordinances is needed. This argument directly opposes the holding in Renton and would impose a harsh rule on governments seeking to confront what is seen as adverse secondary effects.

Renton and Alameda Books provide the framework by which the court must determine whether the evidence used by the county is sufficient. Appellants argue that the district court erred in concluding that they did not sufficiently call into question the supporting evidence for the 2003 AUB ordinance. There exists no precedent restricting the discretionary power of municipalities in substituting or amending an existing regulation to confront an issue that the governmental unit deems it necessary to address.

Have appellants succeeded in casting direct doubt on the county’s evidence or factual findings that support the 2003 AUB ordinance?

It is also necessary separately to examine the adequacy of the underlying evidence used by the county in justifying the 2003 AUB ordinance. In Renton, the Supreme Court noted that because the city did not have an AUB within its borders, it was not necessary for the city to conduct research into possible adverse secondary effects of an AUB. Renton, 475 U.S. at 51-52, 106 S.Ct. at 931. In Alameda Books, the Court deferred to the city because it was able to show support for its theory that a concentration of adult operations in one locale attracted crime. Alameda Books, 535 U.S. at 442, 122 S.Ct. at 1738. The Court noted that the correct inquiry to determine whether a municipal ordinance is designed to serve a substantial government interest without unreasonably limiting alternative avenues of communication was to ask “whether the municipality can demonstrate a connection between the speech regulated by the ordinance and the secondary effects that motivated the adoption of the ordinance.” Id. at 441, 122 S.Ct. at 1737. Did Morrison County properly establish this connection between the speech regulated and the adverse secondary effect the county sought to reduce?

The county argues that the 2003 AUB ordinance is necessary to counter continued adverse secondary effects of AUBs in Morrison County. The county claims that adverse secondary effects of AUBs continued after the 1995 AUB ordinance was passed. Appellants’ own evidence shows that crime has continued within the county and at the only other AUB in Morrison County.

Appellants note Peek-A-Boo Lounge of Bradenton, Inc. v. Manatee County, Fla., 337 F.3d 1251 (11th Cir.2003), which provides an excellent example of what constitutes direct doubt and what may shift the evidentiary burden back to the governmental unit. Therein, the AUB cited incident rates showing lower crime near the AUB than near surrounding businesses, increases in property values near the AUB, civic awards given to the AUB for contributions to the community, and numerous health and safety inspection records. Id. at 1270-71.

Appellants allege that the county relied on improper evidence in its determination that AUBs provided the impetus for adverse secondary effects. The county relied upon studies from throughout the United States which showed a correlation between AUBs and higher rates of crime, sexually transmitted diseases, and reduced property values. Appellants contend that this evidence is not relevant because Morrison County did not utilize any information regarding its own demographics during the crafting of the 2003 AUB ordinance.

The evidence relied upon by the county included, but is not limited to: a paragraph on a study regarding impacts on nearby properties in St. Paul, Minnesota, among other cities; the Report of the Attorney General’s Working Group on the Regulation of Sexually Oriented Business, Hubert H. Humphrey, III, Attorney General (June 6, 1989), which provided research and guidance to municipalities about the regulation of sexually oriented businesses within Minnesota; and studies from Washington, Illinois, Texas, Virginia, and California that discuss the effects of sexually oriented businesses on local communities.

We understand appellants’ argument that comparisons, even when dressed up, often come down to “apples versus oranges.” However, district courts are allowed to weigh the credibility and determine the weight to be given the evidence that each party offers. The evidence proffered to support appellants’ argument are studies and reports that simply reach a different conclusion than the studies relied on by the county.

This evidence was also used in another case cited by appellants, Daytona Grand, Inc., v. City of Daytona Beach, Fla., 410 F.Supp.2d 1173, 1188 (M.D.Fla.2006) which held a county’s alcohol and public nudity statute unconstitutional based on plaintiffs’ expert testimony discrediting the county’s anecdotal evidence and “highly unreliable data” and plaintiffs’ own local studies showing no adverse secondary effects. The chart prepared by appellants appears to be a comparison with other establishments in the county that serve alcohol. Here, appellants failed to present any additional studies regarding adverse secondary effects or the lack thereof within Morrison County. As in Alameda Books, appellants present a plausible, but not compelling, argument that the studies Morrison County relied on have serious flaws that undercut the county’s discretionary decision in passing the 2003 AUB ordinance. While studies that more closely correspond with the demographics of Morrison County might be helpful to the county in replacing or amending its preexisting ordinance, caselaw indicates that studies or findings specific to Morrison County are not required.

Did the 2003 AUB ordinance provide reasonable alternative avenues of communication?

Appellants assert that because only approximately five percent of all land in Morrison County is, today, available for use by AUBs, the 2003 AUB ordinance fails to provide reasonable alternative avenues of communication. The county responds by arguing that 64 percent of all commercial property meets the criteria for AUB use set forth in the 2003 AUB ordinance.

Renton discusses this issue:

That respondents must fend for themselves in the real estate market, on an equal footing with other prospective purchasers and lessees, does not give rise to a First Amendment violation. And although we have cautioned against the enactment of zoning regulations that have “the effect of suppressing, or greatly restricting access to, lawful speech,” American Mini Theatres, 427 U.S., at 71, n. 35, 96 S.Ct. at 2453 (plurality opinion), we have never suggested that the First Amendment compels the Government to ensure that adult theaters, or any other kinds of speech-related businesses for that matter, will be able to obtain sites at bargain prices. See id., at 78, 96 S.Ct. at 2456 (POWELL, J., concurring) (“The inquiry for First Amendment purposes is not concerned with economic impact”). In our view, the First Amendment requires only that Renton refrain from effectively denying respondents a reasonable opportunity to open and operate an adult theater within the city, and the ordinance before us easily meets this requirement.

Renton, 475 U.S. at 54, 106 S.Ct. at 932.

Appellants make much of the small ratio of land available for use by an AUB under the 2003 AUB ordinance to the total land in area of in Morrison County. However, there remain 354 acres, or 236 sites, in Morrison County that LFSP or any other AUB could pursue as a location for its business. The law requires at least some chance of an alternative source; it does not require that it be immediately available and cheap.

DECISION

LFSP was not a legal nonconforming use at the time it opened its doors for business. Sewer and septic issues are recognized as an element of land-use planning. Appellants purposefully attempted to disregard the county’s inherent authority to regulate land use and are not entitled to lawful-nonconforming-use status

The claims brought before this court were not chosen by appellants. Because the county initiated these claims and chose the issues on which it wanted to base its argument, we reject the county’s objection to the judiciability of certain issues. The constitutionality of Morrison County’s ordinance was put at issue by the county and is addressed, in favor of the county.

Whether a government unit is passing ordinances or amending them in the area of health, human services, police protection or public safety, municipal bodies are historically accorded wide latitude in the evidence they rely on in making a discretionary decision. Counties retain discretion to use studies from other sources to justify their actions.

The standard used to challenge the evidence offered by a municipal body remains the same. Appellants failed to raise direct doubt regarding the studies Morrison County relied on when making its determinations regarding the adverse secondary effects of AUBs.

There is commercial land in Morrison County fit for use by AUBs under the 2003 AUB ordinance. That the land may already be occupied does not change the analysis. AUBs are businesses subject to government restriction like any other. Morrison County is not required to find an actual location for use by an AUB; rather, the county must assure that there are locations at which an AUB could operate.

The Morrison County 2003 AUB ordinance satisfies all prongs of the constitutional tests.

Affirmed.

      . The county phrases its argument variously in terms of jurisdiction, standing, and ripeness. The Minnesota declaratory judgment statute, Minn.Stat. § 555.01-16 (2004), "does not provide a separate test for standing. Rather, the statute is directed towards the 'ripeness’ of a dispute, i.e., ‘when’ it may be brought; standing, on the other hand, is concerned with ‘who’ may bring a suit.” McKee v. Likins, 261 N.W.2d 566, 570 (Minn. 1977) n. 1. The county raises no cognizable argument that this court lacks subject matter jurisdiction to hear this appeal.


source: Caselaw Access Project

author: MARING, Justice. CROTHERS, Justice,

license: Public Domain

text:
    2006 ND 198
    Laura SANDBERG, Plaintiff and Appellant v. AMERICAN FAMILY INSURANCE COMPANY, Defendant and Appellee.
    No. 20050396.
    Supreme Court of North Dakota.
    Sept. 14, 2006.

      Jeffrey S. Weikum, Pagel Weikum Law Firm, Bismarck, N.D., for plaintiff and appellant.
    Lawrence E. King, Zuger Kirmis & Smith, Bismarck, N.D., for defendant and appellee.
   MARING, Justice.

[¶ 1] Laura Sandberg appeals from a summary judgment dismissing her action for uninsured motorist coverage against her uninsured motor vehicle insurer, American Family Insurance Company. We conclude American Family was not adversely affected by Sandberg’s settlement with Workforce Safety and Insurance (‘WSI”), and there are disputed issues of material fact regarding American Family’s statutory right to reduce damages payable to Sandberg for uninsured motorist coverage by the amount paid or payable to her for workers’ compensation benefits. We reverse and remand.

I

[¶ 2] In April 1999, Sandberg was employed as a loss prevention officer for Wal-Mart. She was injured in a motor vehicle-pedestrian accident during the course of her employment, while attempting to stop a suspected shoplifter from leaving the Wal-Mart parking lot in a motor vehicle. She initially received benefits for her injury from WSI; however, WSI subsequently determined Sandberg had misrepresented her physical condition and made false statements to WSI regarding her claim. In September 2000, WSI ordered that Sandberg forfeit all future benefits in connection with her claim and repay $4,108.33 in previously paid benefits. Sandberg did not appeal that decision, and in April 2001, without obtaining American Family’s consent, she executed a settlement with WSI in which she agreed to a “full and complete settlement” of all future workers’ compensation benefits and WSI agreed not to pursue collection of any previously paid benefits unless Sandberg received a settlement in a third-party action. Under the agreement, WSI “retain[ed] its subrogated interest in [Sandberg’s] third party action for all benefits paid on [her] claim” under N.D.C.C. § 65-01-09.

[¶ 3] Neither the driver nor the vehicle involved in the accident had motor vehicle liability insurance, and Sandberg thereafter sought uninsured motorist coverage under her policy with American Family. American Family denied her claim, and she sued American Family for breach of contract and bad faith. The district court concluded Sandberg was not entitled to uninsured motorist coverage under N.D.C.C. § 26.1-40-15.6(7) and her policy with American Family, because she had not obtained American Family’s consent to the settlement with WSI and the settlement adversely affected American Family. The court thereafter granted summary judgment dismissing Sandberg’s action against American Family.

II

[¶ 4] We review this appeal in the posture of summary judgment, which is a procedure for promptly resolving a controversy on the merits without a trial if there are no disputed issues of material fact or inferences that reasonably can be drawn from undisputed facts, or if the only issues to be resolved are questions of law. Ernst v. Acuity, 2005 ND 179, ¶7, 704 N.W.2d 869. A party moving for summary judgment must show there are no disputed issues of material fact. Green v. Mid Dakota Clinic, 2004 ND 12, ¶ 5, 673 N.W.2d 257. On appeal, we view the evidence in the light most favorable to the opposing party, and that party must be given the benefit of all favorable inferences. Hurt v. Freeland, 1999 ND 12, ¶ 7, 589 N.W.2d 551. Whether a district court properly granted summary judgment is a question of law that we review de novo on the entire record. Ernst, at ¶ 7.

Ill

[¶ 5] Sandberg argues her settlement with WSI does not preclude her from pursuing a claim for uninsured motorist coverage against American Family. She argues WSI is not a person who may be legally liable for her injuries and her settlement with WSI did not adversely affect American Family under N.D.C.C. § 26.1-40-15.6(7).

[¶ 6] American Family’s policy with Sandberg allows the limits of her uninsured coverage to be reduced by “[a] payment made or amount payable because of bodily injury under any workers’ compensation or disability benefits law or any similar law.” The policy also provides that the uninsured coverage “does not apply to bodily injury to a person ... [w]ho makes or whose legal representative makes a settlement without [American Family’s] written consent.”

[¶ 7] Our statutory provisions for uninsured and underinsured coverage are contained in N.D.C.C. §§ 26.1-40-15.1 through 26.1-40-15.7, and include language more restrictive than American Family’s policy with Sandberg. Section 26.1-40-15.4(l)(a), N.D.C.C., provides that “[a]ny damages payable to or for any insured for uninsured or underinsured motorist coverage must be reduced by: ... [t]he amount paid, or payable under any workers’ compensation or other similar law, exclusive of nonoccupational disability benefits.” Section 26.1-40-15.6(7), N.D.C.C., provides that “uninsured and underinsüred coverages ... do not apply to bodily injury, sickness, disease, or death resulting therefrom of an insured ... [w]hen the insured, without the written consent of the insurer, shall make any agreement or settlement with any person who may be legally liable therefor, if such agreement adversely affects the rights of the insurer.”

[¶ 8] Those statutory provisions for uninsured motorist coverage require that an unauthorized settlement adversely affect the insurer and are part of American Family’s uninsured coverage with Sandberg. See Milbank Mut. Ins. Co. v. Dairyland Ins. Co., 373 N.W.2d 888, 891-92 (N.D.1985); Richard v. Fliflet, 370 N.W.2d 528, 534-35 (N.D.1985). Uninsured motorist coverage is essentially a function of statute just like underinsured motorist coverage. See Score v. American Family Mut. Ins. Co., 538 N.W.2d 206, 209 (N.D.1995). Sections 26.1-40-15.1 to 26.1-40-15.7, N.D.C.C., outline the current minimum statutory requirements for uninsured motorist coverage. An insurer may provide coverage terms more favorable to its insured than are required by N.D.C.C. §§ 26.1^10-15.1 to 26.1-40-15.7, but not less favorable. N.D.C.C. § 26.1-40-15.7(5). See DeCoteau v. Nodak Mut. Ins. Co., 2000 ND 3, ¶ 17, 603 N.W.2d 906. The minimum scope of coverage provided under the contract of insurance, and our analysis of the issues raised in this appeal, is therefore controlled by the statutory language.

[¶ 9] Statutory interpretation is a question of law, fully reviewable on appeal. GO Comm. ex rel. Hale v. City of Minot, 2005 ND 136, ¶ 9, 701 N.W.2d 865. The primary objective in interpreting a statute is to determine the legislature’s intent. Amerada Hess Corp. v. State ex rel. Tax Comm’r, 2005 ND 155, ¶ 12, 704 N.W.2d 8. Words in a statute are given their plain, ordinary, and commonly understood meaning, unless defined by statute or unless a contrary intention plainly appears. N.D.C.C. § 1-02-02. Statutes are construed as a whole and are harmonized to give meaning to related provisions. N.D.C.C. § 1-02-07. The language of a statute must be interpreted in context and according to the rules of grammar, giving-meaning and effect to every word, phrase, and sentence. N.D.C.C. §§ 1-02-03 and 1-02-38(2). We construe statutes to give effect to all of the provisions, so that no part of the statute is rendered inoperative or superfluous. N.D.C.C. § 1-02-38(2) and (4).

[¶ 10] The plain language of N.D.C.C. § 26.1^0-15.6(7) provides that uninsured coverage does not apply when the insured, without the written consent of the insurer, makes any agreement or settlement with any person who may be legally liable for the insured’s bodily injury, sickness, disease, or death if the agreement adversely affects the rights of the insurer. Generally, consent-to-settlement language like N.D.C.C. § 26.1-40-15.6(7) allows an insurer to avoid its obligation to provide uninsured motorist coverage to an insured when the insured makes an unauthorized settlement with an uninsured tortfeasor, or with insured tortfeasors or their insurance carriers in accidents involving multiple tortfeasors, because the insurer has a right of subrogation against those entities and the insured’s unauthorized settlement operates as a release of the insurer’s subro-gation rights. See 2 Allan I. Widiss & Jeffrey E. Thomas, Uninsured and Un-derinsured Motorist Insurance §§ 17.2 and 18.2 (3d ed.2005); 9 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 124:6 (3d ed.2005).

[¶ 11] American Family does not claim it has a right of subrogation under N.D.C.C. § 26.1-^0-15.5, but that the settlement with WSI adversely affected its rights because WSI would be liable for future medical expenses, disability benefits and potentially a permanent impairment award. The analysis of whether American Family was adversely affected therefore focuses on the meaning of “payable” under N.D.C.C. § 26.1-40-15.4. Sandberg argues “payable” does not include future workers’ compensation benefits. American Family argues “payable” includes Sandberg’s future WSI benefits for the purpose of applying its statutory right to a reduction in uninsured motorist benefits payable under N.D.C.C. § 26.1 — 40—15.4(l)(a).

[¶ 12] Under N.D.C.C. § 26.1-40-15.4(l)(a) an insurer is given a statutory right to reduce any damages payable to the insured for uninsured motorist coverage by the amount “paid or payable” to the insured under any workers’ compensation law. An insurer’s right to reduce damages payable to the insured for uninsured motorist coverage by the amount paid or payable for workers’ compensation is a right to a reduction in the amount paid to or for the insured, and not a right of subrogation against the person responsible for the loss. See DeCoteau, 2000 ND 3, ¶ 13, 603 N.W.2d 906 (holding N.D.C.C. § 26.1-40-15.4(1) was intended to permit an offset against damages payable for benefits paid under workers’ compensation law and first party automobile coverage). In DeCoteau, our Court noted that the testimony of Thomas O. Smith, a representative of the insurance industry, reveals that “[Section 26.1-40-15.4(1) ] does not in any way reduce the amount of coverage that is available for either uninsured or underinsured motorist coverages. It only addresses how one deals with ‘damages’ in determining what amount the insurance company must pay under those coverages.... The only purpose of subsection 1 is to avoid a potential duplication for recovery of the same loss.” DeCoteau, at ¶ 13.

[¶ 13] Under the plain language of N.D.C.C. § 26.1-40-15.4(l)(a), American Family is entitled to reduce the amount payable to Sandberg for uninsured motorist coverage by any amount paid or payable to her for workers’ compensation benefits. WSI has paid Sandberg $4,108.33 in workers’ compensation benefits, and American Family is entitled to a reduction in that amount for any damages payable to Sandberg for uninsured motorist coverage. American Family is also entitled to a reduction for any amount “payable” to her for workers’ compensation benefits. The plain and ordinary meaning of “payable” is an amount “that may, can, or must be paid.” Merriam-Websters Collegiate Dictionary 910 (11th ed.2005). In the context of similar setoff language, “payable” has been defined as that which is presently owing or to be paid in the future, see Cathey v. United States, 35 F.Supp.2d 518, 521 (S.D.Tex.1998); Coutts v. Wisconsin Ret. Bd., 209 Wis.2d 655, 562 N.W.2d 917, 923 (1997), or that which must or may be paid, or an amount that need only be capable of being paid. See Rydingsword v. Liberty Mut. Ins. Co., 224 Conn. 8, 615 A.2d 1032, 1036-37 (1992) (confirming arbitration award for reduction of future workers’ compensation benefits based on present value of those benefits). In this context, we construe “payable” to mean any workers’ compensation benefits Sand-berg would have been paid had WSI not ordered her to forfeit all future benefits in connection with her claim. To hold otherwise would, in essence, allow Sandberg a double recovery and would thwart the legislature’s intent that workers’ compensation is primary and uninsured coverage is secondary. Sandberg settled with WSI for all of her causally related losses and cannot seek double recovery.

[¶ 14] When N.D.C.C. § 26.1-40-15.4(l)(a) is construed together and harmonized with N.D.C.C. § 26.1-40-15.6(7), we conclude an insured’s unauthorized settlement with WSI does not adversely affect the insurer because, notwithstanding the settlement with WSI, the insurer retains its statutory right to reduce the damages payable to the insured for uninsured coverage by the amount paid or payable to the insured under workers’ compensation law. Sandberg’s unauthorized settlement with WSI does not preclude American Family from obtaining a reduction in the amount payable to Sand-berg for uninsured motorist coverage by the amount paid or payable to her under any workers’ compensation law. We therefore conclude American Family has not been adversely affected by her settlement with WSI, and the district court erred in deciding Sandberg’s settlement with WSI adversely affected American Family. Because we conclude Sandberg’s settlement with WSI did not adversely affect American Family’s right to reduce its damages payable to Sandberg for uninsured coverage by any amounts paid or payable to her by WSI, we need not decide if WSI is a “person who may be legally liable” for her injuries under N.D.C.C. § 26.1-40-15.6(7).

[¶ 15] There are unresolved factual issues regarding the extent of Sand-berg’s injuries caused by the accident, and the record does not establish the amount of workers’ compensation benefits she would have been paid. We conclude resolution of those issues is inappropriate for summary judgment. We therefore remand for Sandberg’s action against American Family to proceed to trial. If Sand-berg is successful and awarded damages on special interrogatories for past and future losses, American Family can then move the court to reduce those damages by the amounts which would be paid or payable under the workers’ compensation statutes. The court must then determine the appropriate reduction for workers’ compensation benefits paid or payable and subtract the amount from the damages payable for uninsured motorist coverage by American Family.

IV

[¶ 16] We reverse the summary judgment and remand for further proceedings consistent with this opinion.

[¶ 17] GERALD W. VANDE WALLE, C.J., WADE L. WEBB, D.J., and CAROL RONNING KAPSNER, J., concur.

[¶ 18] The Honorable WADE L. WEBB, D.J., sitting in place of SANDSTROM, J., disqualified.

CROTHERS, Justice,

concurring specially. '

[¶ 19] I specially concur. I agree with the result in this case, but write separately to express respectful concern about the excessive scope in paragraph 10 regarding subrogation, the excessive scope in paragraph 12 regarding legislative history and reduction of coverage, and the apparent blanket conclusion in paragraph 14 that an insurer could never be prejudiced by an unauthorized settlement with WSI.

[¶ 20] Our law proscribes advisory opinions. See Bies v. Obregon, 1997 ND 18, ¶¶ 9-10, 558 N.W.2d 855. This rule exists so that we do not appear to decide collateral matters or matters academically interesting but unnecessary for resolution of the pending case. The rationale underpinning this rule is based on our adversarial system and the idea that competently presented competing claims will secure the truth and lead to “the just, speedy, and inexpensive determination of every action.” N.D.R.Civ.P. 1. See Risch v. North Dakota Workers Compensation Bureau, 447 N.W.2d 308, 312 (N.D.1989) (Meschke, J., concurring) (dicta is “neither dictated by the facts of the cases decided nor derived from adversary presentations”). Stating an apparent conclusion without a controversy pending before the court exposes the judiciary to the danger of improvidently deciding issues and of not sufficiently contemplating ramifications of the opinion. See, e.g., Hovland v. City of Grand Forks, 1997 ND 95, ¶ 8, 563 N.W.2d 384 (“[the previous] court’s discussion of N.D.C.C. ch. 53-08 is a dictum, and we are not compelled by stare decisis to follow it here”) and Olson v. Bismarck Parks and Rec. Disk, 2002 ND 61, ¶ 13, 642 N.W.2d 864 (“These statements are dicta, and we are not compelled by stare decisis to follow them. We do not follow the path outlined in the Hovland dicta here because, under the circumstance of this case, we believe there is a close correspondence between the statutory classification and the legislative goals.” (Internal citation omitted.)).

[¶ 21] Because dicta need not be followed in subsequent cases, inclusion of dicta may have the unsalutary effect of misleading judges and lawyers, and may result in litigants incurring considerable expense funding fruitless arguments before the district courts and on appeal. Here, neither I nor the majority knows whether the majority’s dicta will lead to untoward results. But the danger can be avoided by narrowing the scope of the opinion in this case. The majority has not done so, and I therefore respectfully concur in the result only.

[¶ 22] Daniel J. Crothers


author: VANDE WALLE, Chief Justice. KAPSNER, Justice,

text:
    2006 ND 197
    Cindy L. STENVOLD, Claimant and Appellant v. WORKFORCE SAFETY AND INSURANCE, Appellee, and Economy Oil, Respondent.
    No. 20050344.
    Supreme Court of North Dakota.
    Sept. 14, 2006.

      Stephen D. Little, Dietz & Little Lawyers, Bismarck, ND, for claimant and appellant.
    Jacqueline Sue Anderson, Special Assistant Attorney General, Fargo, ND, for ap-pellee.
   VANDE WALLE, Chief Justice.

[¶ 1] Cindy Stenvold has appealed from a district court judgment affirming an order of Workforce Safety and Insurance (‘WSI”) denying her further disability benefits. We affirm.

I

[¶ 2] On June 1, 2000, Stenvold injured her left heel while working as a service station attendant and cashier. Stenvold was subsequently diagnosed with plantar fasciitis and a heel spur. In November 2000, Stenvold submitted a claim for workers compensation benefits. WSI accepted the claim and awarded medical and disability benefits.

[¶ 3] In April 2001, Stenvold began receiving vocational rehabilitation services. After it was determined Stenvold had reached maximum medical improvement, WSI approved Stenvold’s participation in a skills enhancement program to teach her office procedures and computer basics. During the course of the skills enhancement program, Stenvold began having problems with her hands and wrists. Stenvold had previously had surgery for carpal tunnel syndrome on her wrists in 1992 and 1997. Because of the recurrence of her carpal tunnel difficulties, Stenvold quit the skills enhancement program in January 2002. In March 2002, WSI issued an order suspending Stenvold’s disability benefits for noncompliance with her vocational rehabilitation plan. Stenvold requested a rehearing and, in February 2003, WSI issued an order revoking its prior order suspending disability benefits and reinstated Stenvold’s disability benefits.

[¶ 4] Stenvold underwent a functional capacities assessment which placed her in the sedentary-light category of work. A vocational consultant identified a job option of telephone solicitor for Stenvold. WSI thereafter terminated Stenvold’s disability benefits in December 2003, concluding that Stenvold was employable as a telephone solicitor. Stenvold sought referral to another doctor, who in May 2004 recommended that Stenvold avoid working any job, including telephone solicitor, which required typing or keyboarding.

[¶ 5] Stenvold requested a formal hearing, which began on August 18, 2004, and was continued and reconvened on September 27, 2004. On September 16, 2004, in the interim between the two hearings, Stenvold began working part-time as a telephone solicitor. Following completion of the administrative hearing on September 27, 2004, the administrative law judge (“ALJ”) on November 29, 2004, issued recommended findings of fact and conclusions of law determining that Stenvold’s rehabilitation plan provided her with a reasonable opportunity for substantial gainful employment, and that WSI therefore had not erred in terminating her disability benefits. WSI adopted the ALJ’s recommendations as its final order on December 7, 2004.

[¶ 6] On November 9, 2004, Stenvold’s doctor reexamined her and diagnosed possible “carpal tunnel syndrome of median nerve compression of the wrist.” The doctor ordered a nerve conduction study, which demonstrated nerve damage to her wrists. On December 17, 2004, her doctor advised her to discontinue working. None of this new evidence of Stenvold’s disability was presented to the ALJ or WSI before issuance of the final order on December 7, 2004.

[¶ 7] On December 30, 2004, Stenvold submitted a petition for reconsideration from the final order, noting that her doctor had advised her to terminate her employment. WSI did not respond to the petition for reconsideration, and Stenvold appealed to the district court on February 7, 2005. The district court affirmed WSI’s December 7, 2004, final order.

II

[¶ 8] Courts exercise a limited review in appeals from administrative agency decisions under the Administrative Agencies Practice Act, N.D.C.C. ch. 28-32. Ziesch v. Workforce Safety & Ins., 2006 ND 99, ¶ 8, 713 N.W.2d 525; Victor v. Workforce Safety & Ins., 2006 ND 68, ¶ 12, 711 N.W.2d 188. Under N.D.C.C. § 28-32-46, the district court must affirm an order of an administrative agency unless it finds any of the following are present:

1. The order is not in accordance with the law.
2. The order is in violation of the constitutional rights of the appellant.
3. The provisions of this chapter have not been complied with in the proceedings before the agency.
4. The rules or procedure of the agency have not afforded the appellant a fair hearing.
5. The findings of fact made by the agency are not supported by a preponderance of the evidence.
6. The conclusions of law and order of the agency are not supported by its findings of fact.
7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.
8. The conclusions of law and order of the agency do not sufficiently explain the agency’s rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

On an appeal from the district court’s decision on an administrative appeal, we review the agency order in the same manner. Ziesch, at ¶ 8; Victor, at ¶ 12.

Ill

[¶ 9] Stenvold contends WSI has failed to establish by the greater weight of the evidence that she can obtain and perform substantial gainful employment as a telephone solicitor. She argues her unsuccessful work trial in that position and her doctor’s subsequent determination that she is unable to perform the physical requirements of the job indicate WSI’s decision was in error. However, evidence of the failure of her work trial as a telephone solicitor and of her doctor’s December 17, 2004, recommendation that she discontinue working was not before either the ALJ when he issued his recommended decision on November 29, 2004, or WSI when it entered its. final order on December 7, 2004. WSI argues this evidence therefore could not be considered by the district court or by this Court on appeal.

[¶ 10] An appeal of an administrative agency decision to the district court invokes that court’s appellate jurisdiction. In re Beckler, 2005 ND 33, ¶ 16, 692 N.W.2d 483; Benson v. Workforce Safety & Ins., 2003 ND 193, ¶ 5, 672 N.W.2d 640. The district court’s appellate review is expressly limited to the agency record filed with the court. N.D.C.C. §§ 28-32-44(5) and 28-32-46; Beckler, at ¶¶ 16-17; Miller v. Workforce Safety & Ins., 2004 ND 155, ¶ 11, 684 N.W.2d 641; Lewis v. North Dakota Workers Comp. Bureau, 2000 ND 77, ¶ 9, 609 N.W.2d 445. Section 28-32-45, N.D.C.C., allows a motion to supplement the record, but the district court does not consider the additional evidence and may only remand to the agency for the agency to consider the evidence. Beckler, at ¶ 17; Lewis, at ¶ 9. Stenvold did not move to supplement the record under N.D.C.C. § 28-32-45.

[¶ 11] We have previously addressed the precise issue raised in this case in Wright v. North Dakota Workers Comp. Bureau, 2001 ND 72, 625 N.W.2d 256. In Wright, the claimant injured his back and subsequently underwent retraining and vocational rehabilitation. After a formal hearing, the ALJ determined Wright could obtain and perform substantial gainful employment, and recommended discontinuation of further disability benefits. The Bureau issued a final order adopting the ALJ’s recommendations on March 7, 2000. In the interim between the hearing and the final order, Wright’s doctor had issued a report indicating Wright was permanently disabled from all employment. On March 15, 2000, Wright filed a petition for reconsideration based upon the doctor’s report. WSI denied the petition for reconsideration.

[¶ 12] After an unsuccessful appeal to the district court, Wright appealed to this Court, contending he had established he was not presently capable of working. We noted that, under N.D.C.C. § 28-32-06(2) [now codified at N.D.C.C. § 28-32-24(2)], the Bureau generally may not consider evidence which has not been offered, admitted, and made a part of the official record of the proceeding. Wright, at ¶ 17. Accordingly, because Wright did not submit evidence of the doctor’s report until he petitioned for reconsideration, “the Bureau had no way of knowing the existence of the letter or considering its contents before entering its March 7, 2000, final order.” Id.

[¶ 13] We noted that Wright could have applied to the district court for leave to offer additional evidence to the Bureau under N.D.C.C. § 28-32-18 [now codified at N.D.C.C. § 28-32-45], Wright, at ¶ 18. Stressing that Wright had “failed to utilize procedures available for making” the doctor’s report a part of the record in the case, we concluded the evidence could not be considered on appeal. Id. at ¶ 19. We also noted that Wright could still reapply for benefits based on the new evidence. Id. at ¶ 19 n. 1.

[¶ 14] Our decision in Wright is controlling in this case. The evidence of Sten-vold’s failed work trial and of her doctor’s Decembér 17, 2004, report was not before WSI when it issued its December 7, 2004, final order, and Stenvold failed to utilize available procedures in the district court to make this evidence part of the record on appeal. This evidence therefore may not be considered on appeal.

IV

[¶ 15] Because Stenvold’s sole challenge to WSI’s final order denying her further disability benefits is based not upon the record of the hearing before the ALJ but rather upon evidence which is not included in that record, we affirm the district court judgment affirming WSI’s final order.

[¶ 16] DALE V. SANDSTROM and MARY MUEHLEN MARING, JJ„ and STEVEN L. MARQUART, District Judge, concur.

[¶ 17] The Honorable STEVEN L. MARQUART, District Judge, sitting in place of CROTHERS, J., disqualified.

KAPSNER, Justice,

concurring.

[¶ 18] I agree with the legal analysis of the majority and the conclusion it reaches based upon the record before us.

[¶ 19] I write only to note that WSI exercised its discretion to foreclose introducing further evidence on the issue to be decided. The issue was whether the rehabilitation plan provided a reasonable opportunity for gainful employment. The plan was for Stenvold to get a job as a telemarketer/telephone solicitor. Between the interrupted hearing started on August 18 and continued on September 29, Sten-vold did get a job as a telemarketer, a job at which she had worked for a week prior to the second hearing date. She testified to the difficulties of pain, burning sensation, and numbness she experienced in her hands at the job. The ALJ made specific findings about the testimony. After only one week on the job, Stenvold offered no expert evidence regarding the difficulties she described. The hearing concluded September 29, the ALJ issued a recommended decision on November 29, and WSI issued its final order on December 7.

[¶ 20] In accordance with N.D.C.C. § 28-32-40, Stenvold requested reconsideration of WSI’s final order on December 30. Appended to the request for reconsideration were copies of medical records. Treating those documents as an offer of proof, it appears that if the matter were reopened, Stenvold would be able to introduce evidence that after the hearing she had obtained medical treatment and evaluation of the difficulties experienced at work and a further recommendation regarding continued employment at the job identified in her rehabilitation plan.

[¶ 21] Section 65-05-04, N.D.C.C., provides:

If the original claim for compensation has been made within the time specified in section 65-05-01, the organization at any time, on its own motion or on application, may review the award, and in accordance with the facts found on such review, may end, diminish, or increase the compensation previously awarded, or, if compensation has been refused or discontinued, may award compensation. There is no appeal from an organization decision not to reopen a claim after the organization’s order on the claim has become final.

[¶ 22] WSI chose not to reopen the matter and, as noted by the majority opinion, there was no effort made under N.D.C.C. § 28-32-45 to request the district court remand to introduce additional evidence before the agency. Whether to reopen a matter under N.D.C.C. § 65-05-04 is totally within WSI’s discretion and WSI may legally rely on procedural niceties to support its decision not to do so.

[¶ 23] However, when the precise issue to be determined is the appropriateness of a rehabilitation plan and there is evidence relating to the actual position prescribed, it smacks of an adversarial process to refuse to consider such evidence. Stenvold was, at the time of the hearing, engaged in a work trial and WSI was on notice by her testimony that there were problems. This Court has said: “Because the Bureau acts as both a fact finder and an advocate in considering a worker’s claim and in resolving conflicting evidence, we have repeatedly cautioned that the Bureau ‘must not place itself in a full adversary position to the claimant.’ ” Blanchard v. N.D. Workers Comp. Bureau, 1997 ND 118, ¶ 23, 565 N.W.2d 485 (quoting Hayes v. N.D. Workers Comp. Bureau, 425 N.W.2d 356, 357 (N.D.1988)).

[¶24] The Bureau’s obligation to adequately consider medical evidence is one distinction from the true adversarial process. Hayes, 425 N.W.2d at 357. “The adversarial concept has only limited application to claims for workers compensation benefits, and the Bureau must consider the entire medical record and adequately explain its reason for disregarding medical evidence favorable to the claimant.” Lesmeister v. N.D. Workers Comp. Bureau, 2003 ND 60, ¶ 20, 659 N.W.2d 350.

[¶ 25] It is regrettable that, under circumstances such as this, WSI would exercise its discretion in such fashion and decline to reopen the record for consideration of further medical evidence.

[¶ 26] Carol Ronning Kapsner, Mary Muehlen Maring.


author: MARING, Justice.

text:
    2006 ND 209
    STATE of North Dakota, Plaintiff and Appellant v. Charles ODOM, Defendant and Appellee.
    No. 20060106.
    Supreme Court of North Dakota.
    Oct. 17, 2006.

      Julie A. Lawyer (argued), Assistant State’s Attorney, and James W. Martens, Third-Year Law Student (on brief), Bismarck, ND, for plaintiff and appellant.
    Robert V. Bolinske, Jr., Bismarck, ND, for defendant and appellee.
   MARING, Justice.

[¶ 1] The State of North Dakota appeals the trial court’s order suppressing evidence found during a search of a locked safe in Charles Odom’s hotel room after Odom gave consent to police to search the room. The State claims Odom’s consent to search the room allowed the police to search the safe. We reverse the trial court’s order suppressing the evidence found in the hotel room safe and remand for further proceedings.

I

[¶ 2] On December 4, 2005, a Bismarck Days Inn manager informed Bismarck Police Detective Cody Trom that Odom was staying at the hotel. Trom contacted Detective Paul Olson and informed him a warrant for Odom’s arrest was outstanding and provided Odom’s location. The arrest warrant was for a two-year-old drug paraphernalia charge.

[¶ 3]. Along with Lieutenant Bob Haas, Olson executed the arrest warrant outside the hotel. After Odom’s arrest, Olson and Odom waited inside the hotel for a patrol vehicle to transport Odom. While waiting for the patrol vehicle, and before reading Odom his Miranda rights, Olson spoke with Odom about the arrest warrant, Odom’s hotel room number, and whether there were other individuals staying with Odom in the hotel room. After Odom’s Miranda rights were read, Olson questioned Odom about the presence of narcotics in Odom’s room. Odom initially denied having narcotics in the room. Olson asked how Odom arrived in Bismarck and who picked him up. Odom arrived in Bismarck via bus and was picked up by an acquaintance. Olson knew the acquaintance to be a crack cocaine dealer in Bismarck. Olson again asked Odom several times whether there were narcotics in the hotel room. Odom then admitted the presence of narcotics in his room, but did not reveal the type of narcotics. Olson asked for and received Odom’s consent to search the room. Odom said, “you are going to find it anyway. Go ahead.” Odom did not place any limitations on the scope of his consent.

[¶ 4] Having consent to search Odom’s hotel room, Olson entered the room, confirmed no other individuals were in the room, and did a preliminary sweep of the room for narcotics. By the time Olson began the search, the patrol vehicle had arrived. Odom was placed in the care of the patrol officers. During the initial sweep, Olson found a piece of paper with the known drug dealer’s name and phone number. This suggested to Olson the possibility that narcotic activity had occurred in the room.

[¶ 5] Olson also found the room’s safe was locked and the key was missing. Olson spoke with Odom about the missing key. Odom said he did not have the key and did not know who did. Olson asked the hotel manager for the master key so Olson could open the safe. Odom did not withdraw his consent to search the room. In the safe, Olson found a digital.scale on which was cocaine residue, a bundle of cash totaling just under $1,000, and a “big chunk of crack cocaine.”

[¶ 6] Odom was charged with possession of cocaine with intent to deliver and possession of drug paraphernalia. Odom moved to suppress the safe’s contents as illegally obtained evidence. The trial court granted Odom’s motion to suppress the evidence found in the safe. The trial court found Odom had consented to a search of the room, but retained an expectation of privacy in the safe because he did not give specific consent to search the safe. The State appeals.

II

[¶ 7] The State claims the evidence seized from the safe in Odom’s hotel room was wrongfully suppressed because Odom’s consent to search the room included the locked safe.

[¶ 8] As we recently explained in State v. Graf, 2006 ND 196, ¶ 7, 721 N.W.2d 381 (citations omitted):

In reviewing a district court’s decision on a motion to suppress evidence, we defer to the district court’s findings of fact and resolve conflicts in testimony in favor of affirmance. We will affirm a district court’s decision on a motion to suppress if there is sufficient competent evidence fairly capable of supporting the trial court’s findings, and the decision is not contrary to the manifest weight of the evidence. Our standard of review recognizes the importance of the district court’s opportunity to observe the witnesses and assess their credibility. Questions of law are fully reviewable on appeal, and whether a finding of fact meets a legal standard is a question of law.

[¶ 9] Unreasonable searches and seizures are prohibited by the federal and state constitutions. U.S. Const, amend. IV; N.D. Const, art. I, § 8; State v. Woinarowicz, 2006 ND 179, ¶ 21, 720 N.W.2d 635. “Warrantless searches are unreasonable unless they fall within a recognized exception to the warrant requirement.” State v. Genre, 2006 ND 77, ¶ 17, 712 N.W.2d 624. Consent is a well-established exception to the warrant requirement. Id.

[¶ 10] The scope of an individual’s consent is determined by “considering what an objectively reasonable person would have understood the consent to include.” United States v. Urbina, 431 F.3d 305, 310 (8th Cir.2005). The reasonableness inquiry is applied to the understanding of an officer who is conducting a search. See United States v. Lopez-Vargas, 457 F.3d 828, 830 (8th Cir.2006). Whether a search exceeds the scope of consent is a factual question, subject to the clearly erroneous standard of review. State v. Huether, 453 N.W.2d 778, 782 (N.D.1990).

[¶ 11] Olson asked Odom for consent to search Odom’s hotel room. Odom voluntarily gave consent. Odom’s consent allowed Olson to search the room without a warrant and was not limited. We conclude an objectively reasonable officer would have thought Odom’s unlimited consent extended to any closed or locked container located in the room. Olson, therefore, reasonably believed Odom’s consent included the safe. Specific consent to search every container is not needed when consent to search a room is given. See Florida v. Jimeno, 500 U.S. 248, 251, 111 S.Ct. 1801, 114 L.Ed.2d 297 (1991). Requiring such detailed consent would dictate that police officers inventory a room for every possible item for which specific consent is needed and then ask for specific consent to search each item. This “would impose an impossible burden on the police. It would mean that they could never search closed containers within a dwelling (including hotel rooms) without asking the person whose consent is being given ex ante about every item they might encounter.” United States v. Melgar, 227 F.3d 1038, 1042 (7th Cir.2000). This is a burden we are not willing to impose on North Dakota law enforcement.

[¶ 12] “The scope of a search is generally defined by its expressed object.” Jimeno, 500 U.S. at 251, 111 S.Ct. 1801. When determining reasonableness, a court must consider what the parties knew at the time to be the object of the search. United States v. Martinez, 949 F.2d 1117, 1119 (11th Cir.1992).

[¶ 13] Odom knew the expressed objects of Olson’s intended search were narcotics because Olson repeatedly asked Odom about the presence of narcotics in the hotel room. Odom admitted there were narcotics in the room and gave consent to Olson to search specifically for narcotics by stating, “you are going to find it anyway. Go ahead.” There was no doubt as to the expressed objects of the search. Because narcotics were the expressed objects of the search, Olson’s search of a locked safe in which narcotics were likely to be hidden was reasonable.

[¶ 14] “A suspect may of course delimit as he chooses the scope of the search to which he consents. But if his consent would reasonably be understood. to extend to a particular container, the Fourth Amendment provides no grounds for requiring a more explicit authorization.” Jimeno, 500 U.S. at 252, 111 S.Ct. 1801. A reasonable person may be expected to know that narcotics are generally carried in a container. Id. at 251, 111 S.Ct. 1801. A search is conducted within the scope of consent when there is a failure to object to a continuation of the search. United States v. Santurio, 29 F.3d 550, 553 (10th Cir.1994).

[¶ 15] At no time before or during Olson’s search did Odom withdraw or limit his consent to search the hotel room. Odom could have prevented Olson from searching the safe by indicating to Olson consent did not extend to the safe. Despite ample opportunity, Odom did not do this. With no limitations placed on the search by Odom, Olson reasonably understood the consent to extend to the locked safe.

[¶ 16] In Jimeno, the United States Supreme Court stated, “[i]t is very likely unreasonable to think that a suspect, by consenting to the search of his trunk, has agreed to the breaking open of a locked briefcase within the trunk, but it is otherwise with respect to a closed paper bag.” 500 U.S. at 251-52, 111 S.Ct. 1801. The trial court’s reliance on this statement in granting Odom’s motion to suppress the evidence found in the safe is misplaced. In Jimeno, the Supreme Court reasoned the specific “breaking open,” or damaging, of a briefcase during a search would go beyond the scope of a suspect’s consent. See Jimeno, 500 U.S. at 251-52, 111 S.Ct. 1801. General consent “to search does not include permission to inflict intentional damage to the places or things to be searched.” United States v. Torres, 32 F.3d 225, 231-32 (7th Cir.1994) (citation omitted). In Torres, a police officer, without causing damage, removed six screws from a wooden compartment that contained marijuana. 32 F.3d at 228. The court concluded it was reasonable for the officer to believe the suspect’s consent allowed the officer to open the container by unscrewing the screws. Id. at 232. Here, as in Torres, Olson did not damage or destroy the safe when he opened it with the master key. Therefore, the trial court misapplied the law in Jimeno.

Ill

[¶ 17] The trial court erred in concluding Odom’s consent to a search of his hotel room did not include the locked safe located in the room because Odom gave general consent to a search of the hotel room for narcotics and failed at any time to limit the scope of the search.

[¶ 18] We reverse the trial court’s order suppressing the evidence found in the hotel room safe and remand for further proceedings.

[¶ 19] GERALD W. VANDE WALLE, C.J., DANIEL J. CROTHERS, DALE V. SANDSTROM, and CAROL RONNING KAPSNER, JJ., concur.


text:
    2006 ND 213
    John WITZKE, Plaintiff and Appellant v. Ania Diaz GONZALES, Defendant and Appellee.
    No. 20060155.
    Supreme Court of North Dakota.
    Oct. 17, 2006.

      See also 2006 ND 160, 718 N.W.2d 586.
    John Witzke (pro se), Bismarck, N.D., submitted on brief.
    Ania Diaz Gonzales (pro se), Bismarck, N.D., submitted on brief.
   MARING, Justice.

[¶ 1] John Witzke appealed from a district court order dismissing with prejudice his complaint against Ania Diaz Gonzales. We conclude the district court lacked personal jurisdiction based upon Witzke’s improper service on Gonzales. We modify the dismissal of the action to dismiss without prejudice and affirm the order as modified.

I

[¶ 2] Witzke’s present action stems from contentious encounters with his neighbor, Gonzales. This Court previously summarily affirmed Witzke’s direct appeal from a criminal conviction for attempted criminal mischief when he entered Gonzales’s yard with a shovel intending to damage his neighbor’s security camera. City of Bismarck v. Witzke, 2005 ND 170, 709 N.W.2d 21. This Court also subsequently affirmed a dismissal of Witzke’s lawsuit against the City of Bismarck on grounds of collateral estoppel, privilege, and absolute immunity. Witzke v. City of Bismarck, 2006 ND 160, 718 N.W.2d 586. Witzke characterizes his present action against Gonzales as a civil lawsuit seeking relief from spying video cameras, barking dogs, and an allegedly toxic backyard. Witzke also alleges claims of libel and slander.

[¶ 3] Gonzales moved to dismiss Witz-ke’s complaint. The district court dismissed Witzke’s complaint with prejudice, concluding he failed to make proper personal service upon Gonzales. The court further held his claims were barred by the doctrines of res judicata and collateral es-toppel. Witzke appealed to this Court.

II

[¶ 4] Witzke’s notice of appeal purports to appeal from a “judgment” of dismissal of his complaint entered May 17, 2006. However, this record includes only an “order” dismissing his complaint with prejudice dated May 17, 2006. Although no judgment was entered upon the order dismissing Witzke’s action, the order was clearly intended to be final. See, e.g., Sanderson v. Walsh County, 2006 ND 83, ¶ 4, 712 N.W.2d 842; Van Valkenburg v. Paracelsus Healthcare Corp., 2000 ND 38, ¶ 8 n. 1, 606 N.W.2d 908. Further, while this Court has not directly stated that notices of appeal are to be liberally construed in favor of their sufficiency, we have heard appeals under similar reasoning. See State v. Clark, 1997 ND 199, ¶ 5, 570 N.W.2d 195. We conclude Witzke’s notice of appeal is sufficient to appeal from the final order dismissing his complaint with prejudice.

Ill

[¶ 5] Witzke argues the district court erred in dismissing his complaint with prejudice.

[¶ 6] Rule 3, N.D.R.Civ.P., provides, “A civil action is commenced by the service of a summons.” Rule 4(d)(2), N.D.R.Civ.P., outlines the requirements for service of process upon an individual by mail and provides: “Personal service of process within the state must be made as follows: (A) upon an individual fourteen or more years of age by ... (v) any form of mail or third-party commercial delivery addressed to the individual to be served and requiring a signed receipt and resulting in delivery to that individual.”

[¶ 7] Here, Witzke attempted to serve process upon Gonzales only by regular mail. The record contains an “affidavit of service by mail,” signed by Robert A. Morrell, which was witnessed by Witzke but was not notarized. This purported affidavit does not constitute proper service of process by mail under N.D.R.Civ.P. 4(d)(2)(A)(v). There is also no evidence in the record of a signed receipt by, nor of resulting delivery to, Gonzales. Gonzales’s actual knowledge of Witzke’s suit is not relevant. See Helmers v. Sortino, 545 N.W.2d 796, 799 (N.D.1996). Because Witzke did not properly serve Gonzales, the district court did not acquire personal jurisdiction over Gonzales. See Riemers v. State, 2006 ND 162, ¶ 7, 718 N.W.2d 566.

[¶ 8] “Absent personal jurisdiction, ‘the court is powerless to do anything beyond dismissing without prejudice.’ ” Riemers, 2006 ND 162, ¶ 10, 718 N.W.2d 566 (quoting Western Life Trust v. State, 536 N.W.2d 709, 712 (N.D.1995) (emphasis added)). The district court correctly dismissed Witzke’s action but erred when it decided substantive issues of collateral es-toppel and res judicata, which it was without jurisdiction to address. Therefore, as in Riemers and Western Life Trust, while the district correctly dismissed the action, it erred in doing so with prejudice. Because our conclusion that the district court lacked personal jurisdiction is dispositive of the appeal, we do not address Witzke’s remaining arguments.

IV

[¶ 9] We modify the dismissal of the action to dismiss without prejudice and affirm the order as modified.

[¶ 10] GERALD W. VANDE WALLE, C.J., CAROL RONNING KAPSNER, DALE V. SANDSTROM, and DANIEL J. CROTHERS, JJ., concur.