text:
    MAHONEY & HAGBERG, a Professional Association, n/k/a Mahoney & Emerson, a Professional Association, and Mahoney & Emerson, Ltd., Respondent, v. Tracy L. NEWGARD, Appellant, Sean A. Shiff, et al., Defendants.
    No. A05-1523.
    Court of Appeals of Minnesota.
    April 11, 2006.

      Michael C. Mahoney, Thomas A. Foster, Mahoney & Foster, Ltd., Wayzata, MN, for respondent.
    Michael J. Ford, Heidi N. Thoennes, Quinlivan & Hughes, St. Cloud, MN, for appellant.
    Considered and decided by PETERSON, Presiding Judge, KLAPHAKE, Judge, and HUDSON, Judge.
   OPINION

KLAPHAKE, Judge.

Appellant Tracy L. Newgard, a legal assistant, was sued by respondent law firm Mahoney & Hagberg, P.A., for breach of confidences, invasion of privacy, civil conspiracy, and money owed, after she submitted an affidavit in a separate lawsuit involving a dispute between two shareholders of her former employer, Professional Administration, LLC (PAL), a company that provided legal assistants to work in respondent’s office. Appellant challenges the district court’s order denying her motion to dismiss on the grounds of judicial immunity. We affirm in part and reverse in part.

FACTS

Appellant was assigned to work as a legal assistant in respondent’s law firm by her employer PAL from June 1999 to February 2003. During her employment, appellant worked primarily for Steven V. Hagberg, a principal in the firm. According to appellant, she was dismissed from her employment with PAL because PAL could not afford to pay her. She eventually pursued an action against PAL for unpaid wages and now has an unsatisfied judgment against it totaling $6,837.41. Appellant admits that on April 19, 2003, Hagberg paid her $2,000 as a loan on behalf of respondent, to be repaid when she received her back wages from PAL.

PAL was preceded in interest by Professional Administration Corporation (PAC). After PAC was inadvertently dissolved in 2000 for failure to register as a corporation, the same parties formed PAL, although they dispute the ownership interests in PAL. PAC was initially formed by Stephanie Boldt, Hagberg’s daughter, and Margaret Burns, the daughter of Michael Mahoney, another principal in respondent’s firm. Gina Miller also claims that she is an owner of PAL. Mahoney and Hagberg ceased being law partners in 2003, and the firm is now known as Maho-ney and Emerson, PA.

PAL had a contract with respondent, drafted by Mahoney, to provide office support services to the firm in exchange for 25 percent of respondent’s revenues. Respondent argues that the contract, if enforceable, was for a duration of one year only, but some PAC shareholders argue that they operated under the contract for almost ten years.

Boldt initiated an action against other PAL shareholders and respondent, claiming that they owed her a share of a $9 million jury verdict that respondent won and that other shareholders had improperly forced her out of the business. Boldt’s attorney, Sean Shiff, contacted appellant regarding this action and, according to appellant, told her that if she did not provide an affidavit she would be subpoenaed and deposed on the same information.

Appellant then executed an affidavit that set forth her duties while she was employed by PAL, including her work at respondent’s firm. The affidavit outlined her understanding of the ownership interests in PAL, the fee-splitting agreement between respondent and PAL, and her failure to be paid by PAL. It also set forth details of claimed improper and possibly illegal conduct by Mahoney with regard to two clients’ businesses, as well as his attempt to gain appellant’s assistance in some of that conduct. With regard to one client, appellant’s affidavit stated, as follows:

Mahoney told me he created approximately 50 companies for one of his clients who wanted to use the companies as a means to funnel money through in order to avoid paying so much money in taxes. Mahoney told me to incorporate these companies for him. I told him that I was concerned about this, since I did not want to be the Incorporator, and I knew nothing about the same. He told me that my name would only be listed as the Incorporator until the Articles of Incorporation were formed, at which time, my name would be replaced by the Officers of the companies. So, I incorporated the companies, relying on Maho-ney’s experience and knowledge. Maho-ney then asked me if I would call the IRS and say that I was an officer of these companies. However, I felt very uncomfortable with Mahoney’s request and I told him that I could not lie to the IRS, as I was not an officer of the companies. That made him very angry with me, and his face turned bright red and he started yelling at me because I would not do what he asked of me. Because I would not do this, Mahoney, Burns, and Miller then had to make several phone calls to the IRS and state that they were officers of the companies in order to get federal identification numbers for all of the companies because they needed the numbers by that afternoon.

In response to the affidavit, respondent sued appellant for breach of confidences, invasion of privacy, civil conspiracy, and money owed. Appellant moved to dismiss, claiming that she was “absolutely immune” from suit because her affidavit contained privileged information published in the due course of a judicial proceeding. Appellant challenges the district court’s denial of her motion to dismiss.

ISSUE

Is appellant immune from suit under the doctrine of judicial immunity for information she revealed as a witness during the pendency of a judicial proceeding?

ANALYSIS

The district court implicitly rejected appellant’s claim of immunity. An appellate court may decide an issue not determined by the district court where the question is determinative of the entire controversy and neither party is prejudiced by the lack of a prior ruling, as in the instance of undisputed facts. Harms v. Ind. Sch. Dist. No. 300, 450 N.W.2d 571, 577 (Minn.1990). Whether immunity applies is a legal question subject to de novo review. Gleason v. Metro. Council Transit Operations, 582 N.W.2d 216, 219 (Minn.1998). The party claiming immunity bears the burden of proof. Rehn v. Fischley, 557 N.W.2d 328, 333 (Minn.1997).

Judicial immunity is a fundamental principle of American jurisprudence derived from the English common law. Hoppe v. Klapperich, 224 Minn. 224, 233-34, 28 N.W.2d 780, 787 (1947). “[A] party who files a pleading or affidavit in a judicial proceeding has absolute immunity, though his statements are defamatory and malicious, if they relate to the subject of inquiry.” Matthis v. Kennedy, 243 Minn. 219, 227-28, 67 N.W.2d 413, 419 (1954) (quotation omitted). The absolute immunity of witnesses and parties from claims for damages arising out of their trial testimony is premised on public policy concerns that favor “ascertainment of truth” over self-censorship that may result from witnesses’ “fear of subsequent liability.” Briscoe v. LaHue, 460 U.S. 325, 333, 103 S.Ct. 1108, 1114, 75 L.Ed.2d 96 (1983) (citations omitted).

Judicial immunity is specifically offered to witnesses as well as to other participants in the judicial process, such as judges, prosecutors, or other persons appointed by the court, because “[b]oth types of witness [take] the stand and testiffy] under oath in response to the questions of counsel. Both might be deterred by the prospect of subsequent, vexatious litigation.” Id. at 336 n. 15,103 S.Ct. at 1116 n. 15; see Matthis, 243 Minn. at 224, 67 N.W.2d at 417 (absolute immunity protection extends to judge, jury, parties, counsel, and witnesses). In the same way that trial testimony is privileged, pretrial publications are also absolutely privileged. Pinto v. Internationale Set, Inc., 650 F.Supp. 306, 308 (D.Minn.1986). As a limitation on the privilege, however, the statement at issue must have some relation to or connection with an issue in the case, although that connection need not amount to legal relevance. Matthis, 243 Minn. at 224-25, 67 N.W.2d at 417-18.

Respondent claims that judicial immunity applies only to defamation claims. Traditionally, judicial immunity has applied to protect participants in the judicial process against claims of defamation. Prosser and Keeton on Torts § 114, at 816-17 (W. Page Keeton, et al. eds., 5th ed.1984). “[D]efamatory matter published in the due course of a judicial proceeding is absolutely privileged and will not support a civil action for defamation[.]” Matthis, 243 Minn. at 224, 67 N.W.2d at 417. In Minnesota, nearly all assertions of judicial immunity involve underlying claims for defamation. See, e.g., id., 243 Minn, at 223, 67 N.W.2d at 417; Freier v. Indep. Sch. Dist. No. 197, 356 N.W.2d 724, 728 (Minn.App.1984).

Even if the claim is not for defamation, if it sounds in defamation, absolute immunity applies. The judicial immunity “rule is not to be ‘scuttled’ by pleadings which allege that the wrongful acts resulted from a conspiracy” rather than from defamation. Jenson v. Olson, 273 Minn. 390, 394, 141 N.W.2d 488, 490-91 (1966); see Zagaros v. Erickson, 558 N.W.2d 516, 523 (Minn.App.1997) (cause of action for negligent testimony and defamation are “so intertwined ... that it would be unfair, and probably impossible, to expect a jury to distinguish between the two”; psychologist held to be absolutely immune for trial testimony regarding possible misdiagnosis of one of the parties), review denied (Minn. Apr. 17,1997).

While no published Minnesota case has applied judicial immunity to protect participants in the judicial process from other types of tort claims stemming from their communications, other jurisdictions that have considered this issue have applied it to a broader range of tortious acts, such as perjury or intentional infliction of emotional distress, and some jurisdictions even apply it to all torts. See, e.g., Darragh v. Super. Ct., 183 Ariz. 79, 900 P.2d 1215, 1217-18 (1995) (judicial immunity applied against RICO claims for perjured testimony and other claims related to witness trial and deposition testimony); Silberg v. Anderson, 50 Cal.3d 205, 266 Cal.Rptr. 638, 786 P.2d 365, 371 (1990) (in accordance with California civil code, communications made in judicial proceedings subject to immunity from all torts); Kelley v. Bonney, 221 Conn. 549, 606 A.2d 693, 705 n. 15 (1992) (where other tort claims founded upon same conduct as defamation claims, absolute privilege bars recovery on both types of claims); Levin, Middlebrooks, Mabie Thomas, Mayes & Mitchell, P.A. v. U.S. Fire Ins. Co., 639 So.2d 606, 608 (Fla.1994) (judicial immunity applied to “any act occurring during the course of a judicial proceeding, regardless of whether the act involves a defamatory statement or other tortious behavior”); Bird v. W.C.W., 868 S.W.2d 767, 771-72 (Tex.1994) (privilege extended beyond defamation to cover negligent misdiagnosis claim where essence of claim was that witness’ communications in judicial proceeding caused damages); Price v. Armour, 949 P.2d 1251, 1258 (Utah 1997) (privilege extended to claims of libel and intentional interference with business relations). The public policy reasons for applying judicial immunity to defamatory communications also apply with equal force to other torts that arise from a person’s participation in the judicial process — it is in the public welfare to encourage participants to communicate freely in judicial proceedings.

In this case, respondent has alleged one cause of action to which immunity clearly does not apply, money owed. This claim arises out of Hagberg’s loan of $2,000 to appellant and has no relation to the facts set forth in appellant’s affidavit. Therefore, judicial immunity does not insulate appellant from suit on this claim.

The claims of breach of confidences, invasion of privacy, and civil conspiracy, however, all arise out of the communications contained in appellant’s affidavit and are the sort of claims to which judicial immunity should apply. With regard to the invasion of privacy claim, respondent alleges that appellant’s sharing of confidential information “placed it in a false and defaming position in the public.” This is essentially a defamation claim. The civil conspiracy claim states that the purpose of the conspiracy was “the complete destruction and loss of any value of the Law Firm,” and the breach of confidences claim also suggests that appellant improperly shared private information which she should have kept confidential, to respondent’s detriment. These claims, broadly interpreted, arise only from appellant’s allegedly defamatory statements contained in her affidavit. As such, they are protected under the judicial immunity doctrine.

Respondent claims that appellant’s affidavit reveals confidential communications that are subject to the attorney-client privilege, which itself is supported by public policy rationales that are as compelling as the public policy arguments supporting the judicial immunity rule. See Prior Lake Am. v. Mader, 642 N.W.2d 729, 738-39 (Minn. 2002) (attorney-client privilege exists to encourage client to confide openly with attorney and to enable attorney to act more effectively on client’s behalf). While there is an exception to the attorney-client privilege where a client consults with an attorney to further a crime or commit fraud, it is unclear whether that exception would apply to the alleged dealings between Mahoney and his clients that were referenced in appellant’s affidavit. See State ex rel. Humphrey v. Philip Morris, Inc., 606 N.W.2d 676, 696 (Minn.App.2000), review denied (Minn. Apr. 25, 2000); see also Minn. R. Prof. Conduct 1.2(d) (prohibiting attorney from counseling client to engage in criminal or fraudulent conduct). In any ease, however, the potential harm that may result from the absolute immunity of af-fiants such as appellant is ameliorated by the comprehensive control of the district court over judicial proceedings, including its ability to seal the record, if necessary. Historically, the judicial immunity rule recognizes that possible harm to one individual must be borne to protect the integrity of the judicial process. See Matthis, 243 Minn, at 223, 67 N.W.2d at 417 (judicial immunity rule allows “complete immunity from being called to account for language used” to promote “the public welfare”). For these reasons, appellant’s claim of judicial immunity should not be lost because some of the information she revealed might have been subject to the attorney-client privilege.

DECISION

Because the substance of appellant’s statements contained in her affidavit was the source of respondent’s tort claims for breach of confidences, invasion of privacy, and conspiracy, we hold that judicial immunity applies to appellant for those claims and reverse the district court’s denial of appellant’s motion to dismiss. We affirm the district court’s denial of appellant’s motion to dismiss respondent’s claim for money owed.

Affirmed in part and reversed in part.


source: Caselaw Access Project

author: TOUSSAINT, Chief Judge. RANDALL, J.

license: Public Domain

text:
    Charles J. BENDORF, petitioner, Appellant, v. COMMISSIONER OF PUBLIC SAFETY, Respondent.
    No. A05-1484.
    Court of Appeals of Minnesota.
    April 18, 2006.

      Stefan A. Tolin, Minneapolis, MN, for appellant.
    Mike Hatch, Attorney General, Jeffrey F. Lebowski, Sean R. McCarthy, Peter D. Magnuson, Assistant Attorneys General, St. Paul, MN, for respondent.
    Considered and decided by MINGE, Presiding Judge; TOUSSAINT, Chief Judge; and RANDALL, Judge.
   OPINION

TOUSSAINT, Chief Judge.

Appellant Charles J. Bendorf challenges the district court’s order sustaining the revocation of his driver’s license on the ground that he is entitled to a rescission of the revocation. Because the remedy for scheduling the revocation hearing under a statutory provision subsequently declared unconstitutional is not a rescission but a stay of revocation, we affirm.

FACTS

Minn.Stat. § 169A.53, subd. 3(a) (2002), provided that a judicial-review hearing of a driver’s-license revocation “must be held at the earliest practicable date, and in any event no later than 60 days following the filing of the petition for review.” In 2003, the legislature amended the statute to eliminate the requirement that hearings be held within 60 days after the filing of a petition for review (the 2003 amendment). See 2003 Minn. Laws 1st Spec. Sess. ch. 2, art. 9, § 13, at 1451 (codified at Minn.Stat. § 169A.53, subd. 3(a) (2004)).

On March 13, 2005, appellant was arrested for DWI. His license was revoked, and, on March 21, 2005, he petitioned for judicial review of the revocation. The district court issued an order temporarily reinstating appellant’s driver’s license pending the supreme court’s release of Fedziuk v. Comm’r of Pub. Safety, 696 N.W.2d 340 (Minn.2005), which would address the constitutionality of the 2003 amendment. Fedziuk was released on May 19, 2005; it held that the 2003 amendment was unconstitutional and revived Minn.Stat. § 169A.53, subd. 3(a) (2002), the pre-2003 version of the statute.

The hearing on appellant’s license revocation was held on June 23, 2005, more than 60 days after March 21, 2005, when appellant’s petition for judicial review was filed. On July 8, 2005, the district court issued an order sustaining the revocation. Appellant challenges that order.

ISSUE

Is appellant entitled to rescission of the revocation of his driver’s license because the hearing on the revocation was scheduled under a statutory provision later declared unconstitutional?

ANALYSIS

The facts in this case are not disputed. The application of law to undisputed facts is a question of law, which this court reviews de novo. Morton Bldgs., Inc. v. Comm’r of Revenue, 488 N.W.2d 254, 257 (Minn.1992).

On March 21, 2005, when appellant petitioned for judicial review of the revocation of his driver’s license, the governing statute provided no time period for conducting the review hearing, and the supreme court was considering the constitutionality of the absence of a statutory time period. See Minn.Stat. § 169A.53, subd. 3(a) (2004); see also Fedziuk v. Comm’r of Pub. Safety, 696 N.W.2d 340 (Minn.2005). Before the scheduled hearing on appellant’s revocation, the supreme court held that the absence of a statutory time period was unconstitutional and revived the previous version of the statute, which provided a 60-day time period. Fedziuk, 696 N.W.2d at 348-49. Appellant argues that, because Fedziuk declared unconstitutional the statutory provision under which his hearing was scheduled, he is entitled to a rescission of the revocation. Fedziuk refutes this argument.

Fedziuk states that, because the 2003 amendment was declared unconstitutional, “it is not a law and it is as inoperative as if it had never been enacted.... [T]he version of the Implied Consent Law that is revived is the version that existed immediately prior to the 2003 amendments.” Id. at 349. That version, Minn.Stat. § 169A.53, subd. 3(a) (2002), provides that a judicial review “hearing [of a driver’s license revocation] must be held at the earliest practicable date, and in any event no later than 60 days following the filing of the petition for review.” Minn.Stat. § 169A.53, subd. 2(c) (2002), provides a remedy if the hearing is not conducted within 60 days: “The reviewing court may order a stay of the balance of the revocation.”

This language, in the 1982 version of the statute, was construed in Szczech v. Comm’r of Pub. Safety, 343 N.W.2d 305 (Minn.App.1984):

Minn.Stat. § 169.123(6) (1982), which requires that implied consent hearings “shall be held ... no later than 60 days following the filing of a petition for review,” is directory, not mandatory.
If the hearing is not held within 60 days the driver has a remedy: a stay of the revocation which provides a method of reinstating the Status Quo Ante until the matter may be resolved on the merits.

Id. at 305-06, 309. Thus, the remedy for not providing a hearing within 60 days is not a rescission of the revocation but rather a stay of the revocation. Appellant availed himself of that remedy: his revocation was stayed shortly after he filed his petition for judicial review, and the stay remained in effect until the matter was resolved on the merits. Appellant had the stay to which he was entitled; he is not entitled to a rescission.

Appellant argues that he was prejudiced because the temporary revocation could have been used to enhance his sentence if he had been arrested for DWI again prior to the hearing. See Minn.Stat. § 169A.24 (2004) (first-degree driving while impaired includes violation committed “within ten years of the first of three or more qualified prior impaired driving incidents”); Minn.Stat. § 169A.03, subd. 22 (2004) (“[qualified prior impaired driving incident” includes “prior impaired driving-related losses of license”); Minn.Stat. § 169A.03, subd. 21 (2004) (“Prior impaired driving-related loss of license” includes revocation of license under the implied consent law). But

[defendants may challenge an enhancement provision in a criminal statute when the provision is applied against them. Until that time, they cannot show any direct and personal harm resulting from the criminal enhancement provision, and their challenge is premature. ' Consequently, drivers in the implied consent proceedings do not have standing to challenge the effect of the revocation on a possible future DWI charge.

Nordvick v. Comm’r of Pub. Safety, 610 N.W.2d 659, 663 (Minn.App.2000) (citations omitted). Appellant lacks standing to make this argument.

DECISION

Because the remedy for scheduling the hearing on a driver’s license revocation under a statutory provision that was subsequently declared unconstitutional is not a rescission but a stay of the revocation, we affirm the district court’s order sustaining the revocation of appellant’s license.

Affirmed.

RANDALL, J.

(concurring specially).

I concur in the result that the majority correctly traced the history of the “sixty-day rule.” And the majority correctly points out that if the driver does not get the hearing within 60 days the revocation is not automatically rescinded but instead the driver can file a petition for judicial review, ask for a stay, and the stay will then remain in force until the matter is resolved on the merits.

I suggest that one legislative change is needed. Under the current law, the driver has to retain an attorney (or try to navigate between Scylla and Charybdis appearing pro se), and that takes time, days, or weeks and the cost of time and money to make a routine motion for relief, to which the driver is entitled. That is to the prejudice of the driver, and it is because the state did not follow the direction of the law to conduct the hearing within 60 days. The importance of the 60 days cannot be denied. The Minnesota Supreme Court addressed delays by the state in Fedziuk v. Comm’r of Pub. Safety, 696 N.W.2d 340 (Minn.2005) and flat out declared the elimination of that requirement unconstitutional.

The legislative change needed is simple. The law should state that at midnight on the 60th day, the rescission is automatically stayed without any further action needed by the driver. If the driver is picked up one minute after midnight that morning his license will show rescinded but he is guaranteed a free “pass” when he does have to go to court.

With that provision in place, the state can take whatever time it thinks it needs to get its act in order, and the driver, although not likely to be happy about the initial rescission, now has the satisfaction of knowing he is perfectly legal, without more, after the passage of 60 days. This removes the affirmative burden on the driver to go into court and ask for what we know he is retroactively entitled to.

Put another way, why does the driver have the affirmative burden of seeking what is his? Why is the burden not on the state if it chooses to oppose the stay, to affirmatively have to go to the court on motion and bear the burden of persuasion as to why the rescission should not have been automatically lifted at midnight of the 60th day?

      . Given Fedziuk's reinstatement of the statutory language construed by Szczech, we see no merit in appellant's argument that Szczech was "implicitly overruled” by Fedziuk.


author: KAPSNER, Justice.

text:
    2006 ND 66
    Richard John NESVIG, Plaintiff, Appellant and Cross-Appellee v. R. Gordon NESVIG, Defendant, Appellee and Cross-Appellant.
    No. 20050125.
    Supreme Court of North Dakota.
    March 29, 2006.

      Henry H. Howe, Howe <& Seaworth, Grand Forks, N.D., for plaintiff, appellant and cross-appellee.
    Troy Robert Morley (argued) and Patrick Robert Morley (on brief), Morley Law Firm, Ltd., Grand Forks, N.D., for defendant, appellee and cross-appellant.
   KAPSNER, Justice.

[¶ 1] Richard Nesvig appealed and Gordon Nesvig cross-appealed from a judgment, entered after a second jury trial, dismissing Richard Nesvig’s action against Gordon Nesvig for professional malpractice and breach of fiduciary duty and awarding Gordon Nesvig costs and disbursements. Because we hold the district court did not abuse its discretion in any of its rulings challenged on appeal, we affirm.

I

[¶ 2] Many of the relevant facts are set forth in our prior decision in this case, Nesvig v. Nesvig, 2004 ND 37, 676 N.W.2d 73 (“Nesvig /”), and we will not repeat them except as necessary to assist in resolving the issues raised in this appeal.

[¶ 3] In 1984, Richard Nesvig was severely injured in an automobile accident. Gordon Nesvig represented Richard Nes-vig in a personal injury action that ultimately resulted in a net award of $611,768.18 in December 1993. See Nesvig v. Anderson Bros. Constr. Co., 490 N.W.2d 478 (N.D.1992). Gordon Nesvig deposited the money in an interest-bearing money market account naming Richard Nesvig as beneficiary and Gordon Nesvig as trustee. In July 1998, Richard Nesvig petitioned for appointment of a limited and special conservator. Gordon Nesvig filed a concurrence in the need for a conservator, which stated in part that he had been acting as an informal conservator for Richard Nesvig since 1983, and that the portion of Richard Nesvig’s brain that allows him to make decisions is impaired. In July 1998, Norwest Bank was appointed as Richard Nesvig’s conservator. In August 1998, Gordon Nesvig transferred the remaining balance of $548,100.88 in Richard Nesvig’s money market account to the con-servatorship.

[¶ 4] In 2000, Richard Nesvig sued Gordon Nesvig, alleging Gordon Nesvig breached a fiduciary duty by investing the money in a money market account instead of some other prudent investment. After an initial trial, a jury returned a special verdict, finding that there was no agreement to invest the money in something other than a money market account, and that Gordon Nesvig acted in good faith in failing to return money to Richard Nesvig.

[¶ 5] In Nesvig I, 2004 ND 37, ¶ 24, 676 N.W.2d 73, this Court reversed and remanded, holding the jury instructions and special verdict erroneously limited the jury’s inquiry to whether Gordon Nesvig acted in good faith in failing to return the money to Richard Nesvig and whether there was an agreement to invest the money in something other than a money market account, without consideration of an attorney’s obligation to provide advice appropriate for the situation. Because the instructions did not correctly and adequately inform the jury about the applicable law on an essential issue of the case, a new trial was ordered. Id. After a second trial, the jury found there was an attorney-client relationship between the parties, but Gordon Nesvig had not breached a duty to Richard Nesvig.

II

[¶ 6] In his appeal, Richard Nesvig raises a number of issues regarding the district court’s pretrial and trial rulings, including a number of evidentiary issues.

A

[¶ 7] Richard Nesvig argues the district court erred in quashing a subpoena issued to his own expert witness, Wendell Herman.

[¶ 8] At the second trial, Wendell Herman was subpoenaed by Richard Nesvig to serve as his expert witness on the issue of damages for Gordon Nesvig’s failure to invest Richard Nesvig’s funds prudently. Herman, a vice president and senior trust administrator at Wells Fargo Bank, had testified at the first trial as an expert witness; however, sometime before the second trial in October 2004, Herman’s employer, Wells Fargo, informed him that he would not be allowed to testify at the second trial because of corporate policy. Herman communicated this in correspondence to Richard Nesvig’s attorney as early as June 2004. Herman had previously refused compensation for his expert testimony in the first trial and continued to refuse to accept any payment.

[¶ 9] In a pretrial ruling quashing the trial subpoena for Herman, the district court determined Richard Nesvig was attempting to secure the expert opinion of an unretained expert by use of a subpoena. The district court held that although Richard Nesvig offered Herman consideration in exchange for his expert testimony at the first trial, Herman refused payment, which did not alter Herman’s status as an unre-tained expert at the second trial. The district court also found Richard Nesvig knew Herman would be unavailable to provide expert testimony at the second trial, almost four months before that trial began. The court held it was to Richard Nesvig’s own detriment that he failed to seek another expert.

[¶10] N.D.R.Civ.P. 45(c)(4)(iv), addresses the subpoenaing of unretained experts, and states:

On timely motion, the court by which a subpoena was issued shall quash or modify a subpoena that
(iv) requires disclosure of an unre-tained expert’s opinion or information not describing specific events or occurrences in dispute and resulting from the expert’s study made not at the request of any party.

[¶ 11] We have often said that where a state rule is adopted from a federal rule, we may consider the federal courts’ interpretation of the federal rule as persuasive authority for construing our state rule. See Matrix Props. Corp. v. TAG Invs., 2002 ND 86, ¶ 13, 644 N.W.2d 601; City of Dickinson v. Lindstrom, 1998 ND 52, ¶ 11, 575 N.W.2d 440; see also N.D.R.Civ.P. 1, Explanatory Note.

[¶ 12] We review the district court’s decision to quash a subpoena for an abuse of discretion. See Moore v. State, 2006 ND 8, ¶ 5 (holding trial court did not abuse its discretion in quashing subpoena); State v. Jensen, 333 N.W.2d 686, 692 (N.D.1983) (holding denial of applications for order compelling discovery and for subpoenas duces tecum was not abuse of discretion). An abuse of discretion by the district court is never assumed, and the burden is on the party seeking relief affirmatively to establish it. Flattum-Riemers v. Flattum-Riemers, 2003 ND 70, ¶ 7, 660 N.W.2d 558. The district court abuses its discretion only when it acts in an arbitrary, unreasonable, or unconscionable manner, or when its decision is not the product of a rational mental process leading to a reasoned determination. Id.; Schaefer v. Souris River Telecomm. Coop., 2000 ND 187, ¶ 10, 618 N.W.2d 175. The party seeking relief must show more than the district court made a “poor” decision, but that it positively abused the discretion it has under the rule. Flattum-Riemers, at ¶ 7. We will not overturn the district court’s decision merely because it is not the decision we may have made if we were deciding the motion. Gepner v. Fujicolor Processing, Inc., 2001 ND 207, ¶ 13, 637 N.W.2d 681.

[¶ 13] The language of Rule 45(c)(3)(B)(ii), Fed.R.Civ.P., which is identical to N.D.R.Civ.P. 45(c)(4)(iv), was adopted to address a growing problem of the use of subpoenas to compel the giving of evidence and information by unretained experts, and to provide appropriate protection for the intellectual property of non-party witnesses. See Klay v. All Defendants, 425 F.3d 977, 984 (11th Cir.2005) (discussing the advisory committee notes and explaining the concerns for adopting Rule 45(c)(3)(B)); Heffron v. District Court of Oklahoma County, 77 P.3d 1069, 1082 (Okla.2003) (observing that the rule, rather than being concerned with fairness between litigants to the underlying litigation, has as its purpose the protection of the unretained, non-occurrence expert). The advisory committee notes to Fed. R.Civ.P. 45(c)(3)(B)(ii) reflect the concern of the drafters that the subpoena power could be used to deprive expert witnesses of the opportunity to bargain for the value of their services:

Clause (c)(3)(B)(ii) provides appropriate protection for the intellectual property of the non-party witness; it does not apply to the expert retained by a party, where information is subject to the provisions of Rule 26(b)(4). A growing problem has been the use of subpoenas to compel the giving of evidence and information by unretained experts. Experts are not exempt from the duty to give evidence, even if they cannot be compelled to prepare themselves to give effective testimony, but compulsion to give evidence may threaten the intellectual property of experts denied the opportunity to bargain for the value of their services. Arguably the compulsion to testify can be regarded as a “taking” of intellectual property. The rule establishes the right of such persons to withhold their expertise, at least unless the party seeking it makes the kind of showing required for a conditional denial of a motion to quash as provided in the final sentence of subparagraph (c)(3)(B); that requirement is the same as that necessary to secure work product under Rule 26(b)(3) and gives assurance of reasonable compensation.

Fed.R.Civ.P. 45(c)(3)(B)(ii), Advisory Committee Notes (citations omitted). Thus, the party seeking the compelled testimony must show a substantial need for the testimony or material which cannot be otherwise met without undue hardship, and the party must assure reasonable compensation to the person to whom the subpoena is addressed. Id. The advisory committee notes also provide the following factors to guide a court in whether to exercise its discretion to compel testimony of an unre-tained expert:

[T]he degree to which the expert is being called because of his knowledge of facts relevant to the case rather than in order to give opinion testimony; the difference between testifying to a previously formed or expressed opinion and forming a new one; the possibility that, for other reasons, the witness is a unique expert; the extent to which the calling party is able to show the unlikelihood that any comparable witness will willingly testify; and the degree to which the witness is able to show that he has been oppressed by having to continually testify.

Fed.R.Civ.P. 45(c)(3)(B)(ii), Advisory Committee Notes (citing Kaufman v. Edelstein, 539 F.2d 811, 822 (2nd Cir.1976)).

[¶ 14] Here, in quashing the subpoena, the district court held it could not compel Herman to appear and provide expert testimony because he was an unre-tained expert. It is important to note that Richard Nesvig was not seeking to compel the testimony of an opposing party’s expert, but rather his own expert. During oral argument to this Court, Richard Nes-vig conceded he sought to call Herman only as an expert witness, not as a fact witness. An asserted purpose of Herman’s testimony was to give an analysis of the hypothetical projected earnings for the money held by Gordon Nesvig for Richard Nesvig from December 1993 to August 1998.

[¶ 15] Although Herman testified at the first trial in this case, he refused any compensation and was ultimately prevented by his employer from testifying in the second trial. Relying on Wreath v. United States, 161 F.R.D. 448, 450 (D.Kan.1995), the district court determined for an expert to be “retained” the expert must receive some type of consideration, payment, or reward. See also Smith v. State Farm Fire and Cas. Co., 164 F.R.D. 49, 55-56 (S.D.W.Va.1995) (stating, in the context of Rule 26(a)(2)(B), “[i]n the generally accepted meaning of the term in everyday usage, ‘retained’ or ‘specially employed’ ordinarily implies some consideration, a payment or reward of some kind, as consideration for being ‘retained’ or ‘specially employed.’ ”).

[¶ 16] Richard Nesvig knew as early as four months before the second trial that Herman would not testify at that trial. Yet, on the eve of trial, the district court concluded Richard Nesvig acted to his own detriment in failing to secure a different expert witness or to seek an extension from the court to find another expert. Additionally, Richard Nesvig did not make a sufficient showing to the district court establishing Herman’s testimony was of such a unique nature that another witness could not have been procured. Although it quashed the subpoena, the district court did attempt to ameliorate the situation by permitting Richard Nesvig to read Herman’s testimony from the first trial to the jury in the second trial.

[¶ 17] Based upon our review of the record, we conclude the district court reached its decision through a rational mental process and did not act in an arbitrary, unreasonable, or unconscionable manner. We therefore hold the district court did not abuse its discretion in quashing the subpoena for Herman to testify at the second trial.

B

[¶ 18] Richard Nesvig asserts the district court erred in denying his request to sequester Gordon Nesvig’s expert witness, Grant Shaft.

[¶ 19] Richard Nesvig’s argument is based primarily upon language from N.D.R.Ev. 615, which generally authorizes the court to sequester witnesses and states:

At the request of a party the court shall order witnesses excluded so that they cannot hear the testimony of other witnesses, and it may make the order on its own motion. This rule does not authorize exclusion of ... (iii) a person whose presence is shown by a party to be essential to the presentation of the party’s cause.

[¶ 20] The essential purpose of witness sequestration is to prevent one witness’ testimony from influencing another. See, e.g., R.R. Donnelley & Sons Co. v. North Texas Steel Co., Inc., 752 N.E.2d 112, 133 (Ind.Ct.App.2001). In interpreting language similar to N.D.R.Ev. 615(iii), the Indiana Court of Appeals held a witness whose presence is shown to be essential to the presentation of a party’s case cannot be excluded from the courtroom, and this exemption is used most frequently for expert witnesses, “who are believed to be less susceptible to the temptation to shape their testimony.” R.R. Donnelley & Sons, at 134 (citing Morvant v. Constr. Aggregates Corp., 570 F.2d 626, 629-30 (6th Cir.1978)).

[¶ 21] In United States v. Conners, 894 F.2d 987, 991 (8th Cir.1990), the appellate court ruled there was no abuse of discretion where the trial court permitted an expert in the area of bank examination to be present during trial, because the expert’s presence was essential to his ability to testify effectively regarding exhibits before the jury. In Conners, the court also said there was no showing of substantial prejudice, where the district court found the nature of the expert’s testimony was not “particularly ... susceptible to being tempered or shaped by what he sees or hears in the courtroom.” Id. See also Hollman v. Dale Electronic, Inc., 752 F.2d 311, 313 (8th Cir.1985) (holding the district court should have sequestered witnesses, but concluding the error was harmless because appellants failed to show they were prejudiced by the district court’s refusal); Hampton v. Kroger Co., 618 F.2d 498, 499 (8th Cir.1980) (holding neither error nor prejudice resulted from the district court’s decision initially excluding appellant’s expert witness from observing the parties’ opening statements, but then permitting the expert to be present during the rest of the trial and hear all of the evidence).

[¶ 22] During the second trial, Richard Nesvig requested the district court to exclude expert witness Shaft from the proceedings. Gordon Nesvig argued, however, it was necessary for his expert to hear the trial testimony because the issues were somewhat different from the first trial and neither Gordon Nesvig nor Richard Nesvig had been deposed for the second trial. The district court agreed and permitted experts from both parties to hear the testimony. The district court concluded that since both experts were going to testify as to the attorney-client relationship between Richard Nesvig and Gordon Nesvig, they both needed to hear the facts. Additionally, Richard Nesvig has not demonstrated any prejudice from having both experts hear the testimony. We therefore hold the district court did not abuse its discretion by failing to sequester Gordon Nes-vig’s expert witness during trial.

C

[¶ 23] Richard Nesvig argues the district court erred by not permitting him to cross-examine Shaft about Shaft’s testimony at the first trial.

[¶ 24] Rule 607, N.D.R.Ev., permits any party to attack the credibility of a witness by impeachment. Rule 611(b), N.D.R.Ev., which governs the scope of impeachment by cross-examination, provides:

Cross-examination should be limited to the subject matter of the direct examination and matters affecting the credibility of the witness. The court, in the exercise of discretion, may permit inquiry into additional matters as if on direct examination.

[¶ 25] The district court has wide discretion over the mode and order of presenting evidence. State v. Klein, 1999 ND 76, ¶ 12, 593 N.W.2d 325. The district court, however, in exercising its discretion may preclude cross-examination despite its probative value under N.D.R.Ev. 403, where the question “is unfairly prejudicial ... confuses the issues, misleads the jury, or causes an ‘undue delay, waste of time, or needless presentation of cumulative evidence.’ ” Klein, at ¶ 12. This Court will not disturb the district court’s decision on the scope of cross-examination absent an abuse of discretion. Id.; State v. Osier, 1999 ND 28, ¶ 5, 590 N.W.2d 205.

[¶ 26] The parties here have focused on the apparent failure during the second trial to record certain sidebar conferences relating to Richard Nesvig’s cross-examination of Shaft. Gordon Nesvig argues the issue has not been preserved for review on appeal. We do not address that issue, however, because assuming the issue has been preserved for review, we conclude the district court did not abuse its discretion in limiting Richard Nesvig’s cross-examination of Shaft.

[¶ 27] Richard Nesvig argues the district court erred by limiting and not permitting him to cross-examine Shaft about Shaft’s testimony in the first trial and this Court’s decision in Nesvig I. From our review of the record, however, Richard Nesvig was permitted to cross-examine Shaft about this Court’s ruling in Nesvig I. For example, Gordon Nesvig points to the following exchange in Richard Nesvig’s cross-examination of Shaft:

Q. Well, since we brought up the Supreme Court decision, the Supreme Court says that the good faith in the comment establishes a standard for a lawyer’s decision to deposit money in either a client account or an IOLTA account and does not establish a good faith defense for returning a client’s money or advising the client.
A. I believe—
MR. MORLEY: Object to the ruling, reading from the legal opinion [of the] case.
MR. HOWE: He has given his opinion what the Supreme Court protected him from or requires. This is a legitimate question.
THE COURT: Well, he can answer the question.
A. (The Witness continuing): I believe that is what I just said.
Q. Okay, so that sounds the same as what you just said?
A. But you are confusing an ethical obligation with a malpractice case. And we are not here to determine- — as far as what I understand, Mr. Nesvig’s ethics.
Q. Okay, well, Rule 1.15 — •
A. Yes.
Q. Is a disciplinary rule?
A. Yes, ethical rule.
Q. Okay, so it has no application for attorney malpractice?
A. That is correct with regard to the duty [for] malpractice, that is correct.

[¶ 28] Although Richard Nesvig asserts he was prevented from going into sufficient detail about Nesvig I in his cross-examination, the record reflects the district court was properly concerned with its own role in instructing the jury on the law and preventing confusion. We conclude that in limiting the cross-examination of Shaft, the district court did not act arbitrarily, unreasonably, or in an unconscionable manner.

D

[¶ 29] Richard Nesvig also argues the district court erred in making a number of other evidentiary rulings relating to cross-examination of another witness, prohibiting rebuttal trial testimony, and modifying a prior motion in limine. Richard Nesvig argues the district court abused its discretion by permitting the reading of Wendall Herman’s testimony from the first trial during the second trial, without removing certain testimony which fell within the court’s initial in limine ruling. He additionally argues the court erred by not permitting him to present limited rebuttal testimony by both Richard Nesvig and Lois Nesvig and by preventing him from cross-examining Gordon Nesvig about how he used the portion of the settlement proceeds he received as attorney fees for handling Richard Nesvig’s lawsuit.

[¶ 30] Under N.D.R.Ev. 401, 402, and 403, the district court has broad discretion in admitting or excluding evidence. See Harfield v. Tate, 2004 ND 45, ¶ 7, 675 N.W.2d 155. Relevant evidence is generally admissible. Id. Under N.D.R.Ev. 403, the district court has discretion to exclude relevant evidence if its probative value is substantially outweighed by the danger of unfair prejudice, including testimony which confuses the issues, misleads the jury, or causes undue delay, waste of time, or needless presentation of cumulative evidence. Harfield, at ¶ 7; see also Forster v. West Dakota Veterinary Clinic, Inc., 2004 ND 207, ¶47, 689 N.W.2d 366. Again, we conclude the district court did not abuse its discretion in limiting the cross-examination of Gordon Nesvig or prohibiting testimony by witnesses the court deemed to be repetitive and cumulative.

[¶ 31] Richard Nesvig argues the district court also abused its discretion by permitting certain evidence which exceeded the district court’s previous order granting his motion in limine. However, an in limine ruling is only a preliminary order regarding admissibility of evidence. See Luce v. United States, 469 U.S. 38, 40-41, 105 S.Ct. 460, 83 L.Ed.2d 443 (1984); Evans v. Wal-Mart Stores, Inc., 976 S.W.2d 582, 584 (Mo.Ct.App.1998). A district court’s in limine ruling “is subject to change when the case unfolds, particularly if the actual testimony differs from what was contained in the defendant’s proffer. Indeed even if nothing unexpected happens at trial, the district judge is free, in the exercise of sound judicial discretion, to alter a previous in limine ruling.” Luce, 469 U.S. at 41-42, 105 S.Ct. 460. Therefore, any order sustaining a motion in li-mine and excluding evidence is interlocutory in nature and subject to change by the district court during the course of the trial. See, e.g., Smith v. Associated Natural Gas Co., 7 S.W.3d 530, 536 (Mo.Ct.App.1999).

[¶ 32] Although Richard Nesvig argues the district court abused its discretion by “disregarding” its previous order in limine, the district court was free to do so. Here, the district court permitted the testimony of Wendell Herman from the first trial to be read at the second trial and concluded that testimony needed to be read in substantial part to avoid confusion and aid the flow of testimony. The necessity of modifying the in limine order essentially benefitted Richard Nesvig after he failed to secure an expert witness for the second trial. We hold the district court did not abuse its discretion by permitting testimony that was initially precluded by the court’s in limine order. The remaining instances of alleged error by the district court are without merit.

E

[¶ 33] Richard Nesvig argues the district court improperly awarded costs and disbursements which included an expert witness fee for the time Gordon Nes-vig’s expert witness, Shaft, attended trial to hear the testimony of other witnesses. Richard Nesvig complains that the overall fees claimed for Shaft’s involvement in the second trial exceeded the amount of fees from the first trial and that the fees included Shaft’s time spent “sitting in” on the second trial as preparation time.

[¶ 34] The question of who is a prevailing party for an award of disbursements under N.D.C.C. § 28-26-06 is a question of law, subject to de novo review, while the question of the amounts to be allowed for disbursements is one of fact, subject to an abuse of discretion standard. Dowhan v. Brockman, 2001 ND 70, ¶ 10, 624 N.W.2d 690 (citing Braunberger v. Interstate Eng’g, Inc., 2000 ND 45, ¶¶ 13, 24, 607 N.W.2d 904; Lemer v. Campbell, 1999 ND 223, ¶ 6, 602 N.W.2d 686). The district court is in a much better position than this Court to determine the amount, reasonableness, and necessity of the costs and disbursements sought by the prevailing party. Vogel v. Pardon, 444 N.W.2d 348, 353 (N.D.1989).

[¶ 35] We have previously found no abuse of discretion where an expert’s fee included time spent observing portions of a trial. See Byron v. Gerring Indus., Inc., 328 N.W.2d 819, 824 (N.D.1982) (concluding defendants’ presence at the trial was essential, in addition to the time he was actually testifying, so he could “listen to, and subsequently counter,” plaintiffs expert’s testimony and also aid in understanding the expert witness testimony). As we have already explained, the district court did not abuse its discretion in permitting Shaft to observe the trial in preparation for testifying at the trial. As for the amount of fees, the district court is in a better position than this Court to determine the reasonableness and necessity of these costs and disbursements. From our review of the record, we conclude the district court did not abuse its discretion in awarding costs for Shaft’s attendance at the second trial.

Ill

[¶ 36] In his cross-appeal, Gordon Nesvig asserts the district court erred in not awarding him costs and disbursements for both the first and second trials.

[¶ 37] He argues the district court erred in not awarding him the costs and disbursements from the first trial because he ultimately prevailed at the second trial. Under N.D.C.C. § 28-26-06, the prevailing party determination is based upon the merits, not damages. Dowhan, 2001 ND 70, ¶ 11, 624 N.W.2d 690. “A prevailing party is one ‘in whose favor a judgment is rendered, regardless of the amount of damages awarded.’ ” Id. (quoting Black’s Law Dictionary 1145 (7th ed.1999)). In Lemer, this Court explained:

Generally, the prevailing party to a suit for the purpose of determining who is entitled to costs, is the one who successfully prosecutes the action or successfully defends against it, prevailing on the merits of the main issue, in other words, the prevailing party is the one in whose favor the decision or verdict is rendered and the judgment entered.

Lemer, 1999 ND 223, ¶ 9, 602 N.W.2d 686 (quoting 20 Am.Jur.2d Costs § 12 (1996)) (emphasis added).

[¶38] Here, Gordon Nesvig was not the prevailing party in the first trial after obtaining a judgment of dismissal, because this Court reversed that judgment and remanded for a second trial after we held the jury was improperly instructed upon a “good faith” defense for a professional negligence claim. The subsequent reversal which necessitated the second trial was not occasioned by any fault of Richard Nesvig. Gordon Nesvig also acknowledges this Court has previously held it is inappropriate to award costs from a previous trial where a subsequent trial is held after remand, particularly where the party to be taxed costs and disbursements was not at fault for necessitating the subsequent trial. See, e.g., Kramer v. K.O. Lee and Son Co., 64 N.D. 84, 90, 250 N.W. 373, 375 (1933); Taylor v. Minneapolis, St. P. & S.S.M. Ry., 63 N.D. 332, 344, 248 N.W. 268, 273 (1933); Minneapolis Threshing Mach. Co. v. Huncovsky, 52 N.D. 112, 119, 202 N.W. 280, 283 (1924); Corbett v. Great Northern Ry., 28 N.D. 136, 150, 148 N.W. 4, 9 (1914). Gordon Nesvig is the prevailing party in the second trial, and the district court properly awarded costs and disbursements for only that trial.

[¶ 39] Gordon Nesvig asserts in the alternative that, although he was not the prevailing party after the appeal from the first judgment, he was still a prevailing party after the first trial because his counterclaim awarded him $1,293.96 from Richard Nesvig, which was not reversed in the first appeal and was again included in the final judgment after the second trial. Gordon Nesvig’s counterclaim, which was based upon an accounting oversight, was apparently unopposed at both the first and second trials. This counterclaim can hardly be considered the main issue in this case. We conclude, as a matter of law, that Gordon Nesvig was not a prevailing party at the first trial based upon his minimal, unopposed claim so as to permit an award of costs and disbursements. We therefore hold the district court did not err in denying Gordon Nesvig costs and disbursements from the first trial.

IV

[¶ 40] The district court judgment is affirmed.

[¶ 41] GERALD W. VANDE WALLE, C.J., MARY MUEHLEN MARING, DANIEL J. CROTHERS and DALE V. SANDSTROM, JJ., concur.


author: CROTHERS, Justice.

text:
    2006 ND 69
    Steven THOMPSON, Claimant and Appellant v. WORKFORCE SAFETY AND INSURANCE, Thermal Line Windows, Inc., Appellee and Respondent.
    No. 20050392.
    Supreme Court of North Dakota.
    March 31, 2006.

      Stephen D. Little, Dietz & Little Lawyers, Bismarck, N.D., for claimant and appellant.
    Lawrence E. King, Special Assistant Attorney General, Bismarck, N.D., for appel-lee.
   CROTHERS, Justice.

[¶ 1] Steven Thompson appeals from a judgment affirming an order issued by Workforce Safety and Insurance (“WSI”) denying him further benefits. We affirm.

I

[¶ 2] Thompson was employed as a window assembler. In September 2003, he was swinging a mallet during assembly of a window and felt a sudden pain in his right shoulder and arm. The pain subsided while Thompson was at rest but immediately reoccurred when Thompson returned to work.

, [¶ 3] Approximately one week after the initial injury, Thompson sought treatment for his shoulder and arm pain. He reported no prior problems. This physician assessed the injury as “right shoulder pain” but was unsure of its origin, so Thompson was referred to a different physician for a consultation. Thompson again reported no prior pain or injuries and was prescribed medication and physical therapy.

[¶ 4] WSI accepted Thompson’s claim in October 2003 and paid benefits for his right shoulder injury. Continued treatment revealed Thompson had a right rota-tor cuff tear and abnormalities of the cervical spine on the right side. He was referred to a neurosurgeon and again reported a lack of prior problems.

[¶ 5] WSI notified Thompson in November 2003 that it was not liable for and would not pay for any treatment or condition related to his cervical spine. The letter indicated the procedure for reconsideration, but Thompson did not appeal the decision. After Thompson received a final denial letter in February 2004, he sought reconsideration.

[¶ 6] WSI obtained Thompson’s prior medical and chiropractic records to verify the lack of preexisting problems or conditions in Thompson’s cervical spine. The medical records showed Thompson had repeatedly sought treatment for his neck, back, and right shoulder, including several instances of spontaneous pain in the area, as well as a head and neck problem that required 34 chiropractic treatments in the year preceding his injury.

[¶ 7] Thompson’s neurosurgeon, after being informed of some of Thompson’s pri- or conditions, maintained that it was likely Thompson’s current pain and cervical spine abnormalities were caused by his work-related injury. WSI’s medical director attributed Thompson’s current problems to pre-existing conditions. Following a hearing, Thompson’s Temporary Total Disability benefits were terminated in June 2004.

[¶ 8] Thompson appealed WSI’s decision to the district court, which affirmed. Thompson appeals to this Court from the district court judgment, alleging he showed with reasonable medical certainty that his cervical spine condition was substantially related to his September 2003 work injury.

II

[¶ 9] Decisions of administrative agencies are reviewed in accordance with N.D.C.C. § 28-32-46, which requires:

A judge of the district court must review an appeal from the determination of an administrative agency based only on the record filed with the court. After a hearing, the filing of briefs, or other disposition of the matter as the judge may reasonably require, the court must affirm the order of the agency unless it finds that 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 appeal, we review the decision of the agency, not the decision of the district court, in the same manner. N.D.C.C. § 28-32^19; Bjerklie v. Workforce Safety & Ins., 2005 ND 178, ¶ 9, 704 N.W.2d 818. It is long-established that we do not “make independent findings of fact or substitute our judgment for that of the agency. We determine only whether a reasoning mind reasonably could have determined that the factual conclusions reached were proved by the weight of the evidence from the entire record.” Power Fuels, Inc. v. Elkin, 283 N.W.2d 214, 220 (N.D.1979).

[¶ 10] Thompson argues the greater weight of the evidence showed the September 2003 incident was a substantial factor in causing his cervical spine condition. WSI disagrees, arguing the findings are substantially supported by the record. Taking into account the record before us and the standard of review on appeal, we agree with WSI’s argument.

[¶ 11] The administrative agency has the responsibility to weigh and resolve conflicting medical opinions. Negaard-Cooley v. North Dakota Workers Comp. Bureau, 2000 ND 122, ¶ 18, 611 N.W.2d 898. Here, WSI’s own medical expert, Robert Cooper, M.D., was the only physician that was made fully aware of Thompson’s medical history and reviewed all pri- or records. Cooper testified that the symptoms exhibited by Thompson prior to the September 2003 incident were indicative of cervical spine abnormalities.

[¶ 12] The Administrative Law Judge adopted Cooper’s assessment, noting that each of Thompson’s treating physicians presented inadequate advice and opinions, either ignorant of or failing to account for Thompson’s extensive history of neck, back, and shoulder problems.

[¶ 13] Upon examination of the entire record, we conclude a reasoning mind could reasonably conclude that WSI’s findings were supported by the weight of the record. We therefore affirm the district court judgment affirming WSI’s order denying further benefits to Thompson.

[¶ 14] GERALD W. VANDE WALLE,’ C.J., ALLAN L. SCHMALENBERGER, D.J., MARY MUEHLEN MARING, and CAROL RONNING KAPSNER, JJ., concur.

[¶ 15] The Honorable ALLAN L. SCHMALENBERGER, D.J., sitting in place of SANDSTROM, J., disqualified.


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

text:
    2006 ND 70
    Lanis TOSO, Claimant and Appellant v. WORKFORCE SAFETY AND INSURANCE, Appellee.
    No. 20050143.
    Supreme Court of North Dakota.
    April 3, 2006.
    Rehearing Denied May 17, 2006.

      Reed K. Mackenzie (argued), Mackenzie Dornik, Minneapolis, MN, and Joel F. Ar-nason (appeared), Rosenquist & Arnason, Grand Forks, ND, for claimant and appellant.
    Jacqueline Sue Anderson, Special Assistant Attorney General, Fargo, ND, for ap-pellee.
   VANDE WALLE, Chief Justice.

[¶ 1] Lanis Toso appealed from a district court judgment affirming an order of Workforce Safety and Insurance (“WSI”). WSI issued an order affirming WSI’s right to apply the subrogation statute and to allow WSI to collect 50% of the settlement award Toso received in a third-party action. Toso appealed WSI’s order to the district court. The district court affirmed WSI’s order. On appeal to this Court, Toso argues WSI had no right to apply the subrogation statute to the settlement award because the damages in the third-party action were not related to Toso’s medical expenses and disability benefits paid by WSI. We affirm.

I

[¶ 2] On September 3,1999, Lanis Toso filed a claim for workers compensation benefits in connection with an injury to his left heel which occurred August 25, 1999, while employed as a semi driver. WSI accepted the claim and awarded Toso benefits. Toso received disability benefits, and WSI paid medical expenses for treatment related to his injury. Disability benefits were discontinued when Toso returned to work.

[¶ 3] In June of 2001, Toso commenced a third-party action against Orthopaedic Associates and Dr. Jeffrey Stavenger, alleging negligence in the treatment of Toso’s heel injury. Correspondence contained in the record, in the form of letters exchanged between Toso’s attorney and WSI, shows notice of the third-party action was given to WSI. In the third-party action, Toso contended the alleged negligent treatment did not increase his temporary disability or his medical expenses incurred because of the work-related injury. Toso contended he would have suffered the same temporary disability and medical expense damages had the negligence not occurred. Rather, Toso alleged the only damage caused by the alleged negligent treatment was that the surgery was less successful than it might have been if no negligence had occurred and that, as a result, Toso incurred a greater permanent disability because of the negligence. WSI did not pay Toso permanent disability benefits.

[¶ 4] Toso’s third-party action was settled out of court with the defendants agreeing to pay Toso $82,500. Because the case settled out of court, the trial court made no determination whether the settlement damages arose out of the work injury. The record does not contain a settlement agreement setting out what damages the settling defendants were paying for.

[¶ 5] WSI applied the subrogation statute, N.D.C.C. § 65-01-09, to the entire settlement award which allowed WSI to collect 50% of the settlement award for reimbursement for money it paid for Toso’s medical expenses and disability payments. After Toso requested reconsideration of this order, Toso and WSI agreed to submit the dispute to an Administrative Law Judge (“ALJ”).

[¶ 6] The ALJ’s recommended decision found Toso failed to prove WSI’s subrogation interest under N.D.C.C. § 65-01-09 was improperly applied to his claim. The ALJ found the settlement damages arose out of the work injury and recommended WSI’s order be affirmed. WSI then issued a final order adopting the ALJ’s recommended decision.

II

[¶ 7] On appeal, we review the decision of WSI, not the district court, although the district court’s analysis is entitled to respect. Zander v. Workforce Safety and Ins., 2003 ND 194, ¶ 6, 672 N.W.2d 668. We review WSI’s decision in the same manner as the district court under N.D.C.C. § 28-32^6. Id. 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.

N.D.C.C. § 28-32-46.

[¶ 8] In evaluating WSI’s findings of fact, we do not make independent findings or substitute our judgment for that of WSI, rather, we determine only whether WSI reasonably reached its factual conclusions from the weight of the evidence on the entire record. Hopfauf v. N.D. Workers Comp. Bur., 1998 ND 40, ¶ 8, 575 N.W.2d 436. We affirm WSI’s decision unless its findings of fact are not supported by a preponderance of the evidence, its conclusions of law are not supported by its findings of fact, its decision is not supported by its conclusions of law, or its decision is not in accordance with the law. Id.

[¶ 9] In this case we are asked to decide whether the language of the subrogation statute at N.D.C.C. § 65-01-09 allows WSI to apply the subrogation statute to Toso’s settlement award. WSI applied the subrogation statute to Toso’s settlement award based on its determination that the settlement damages arose out of the work injury. Toso disagreed with that application arguing the settlement damages did not arise out of the work injury.

[¶ 10] WSI argues the district court should not have reached the merits of Toso’s claims but should have summarily affirmed WSI’s order because Toso failed to file a specifications of error as required by N.D.C.C. § 28-32-42(4). Vetter v. N.D. Workers Comp. Bur., 554 N.W.2d 451 (N.D.1996). Whether we decide this case based on the lack of a proper specifications of error or based on Toso’s issue, we still reach the same decision in affirming WSI’s order without deciding the merits of the issue placed before us.

[¶ 11] WSI contends this is a simple matter of statutory requirement. WSI argues the application of N.D.C.C. § 65-01-09 is not limited only to damages for medical expense, disability, vocational rehabilitation, or permanent impairment that may have been recovered in a third-party action. Rather, WSI argues N.D.C.C. § 65-01-09 provides that WSI is subrogated to the rights of the injured employee to the extent of fifty percent of the damages recovered in a third-party action regardless of the nature of the damages recovered.

[¶ 12] Even if we were to agree with Toso’s position that WSI is not subro-gated to any damages that do not arise out of the work injury, we still could not grant Toso’s requested relief because, for the purposes of this case, we would look no further than the issue of whether Toso’s settlement damages were damages that arose out of his work injury. The record provides little or no evidence to help us make that determination. Paragraph four of Toso’s complaint in the third-party action provides that as a consequence of the defendants’ negligence, Toso sustained injuries to his heel which have and will cause him pain, discomfort, and disability, will cause him to incur medical expenses in the future, and will impair his future earning capacity. The issue of whether Toso’s settlement damages arose out of his work injury was never litigated in court nor does the record contain a settlement agreement which speaks to that issue. Toso has known WSI’s position throughout the duration of this case. Toso was aware WSI intended to apply the subrogation statute to the settlement award. Although the statute provides WSI’s subrogation interest may not be reduced by settlement, Toso had the opportunity to structure the settlement to indicate exactly what the damages covered. However, the record does not contain a settlement agreement and therefore gives us no information as to the type of damages the settlement award covered. N.D.C.C. § 65-01-09. We are left to speculate as to whether Toso’s settlement damages arose out of his initial work injury.

[¶ 13] The burden was on Toso to prove that the settlement damages caused by the alleged third-party negligence did not arise out of his initial work injury. N.D.C.C. § 65-01-09. Once a claimant gives notice to WSI that the claimant is going to pursue an action against a third-party, we believe the claimant has the burden of proof as to whether the damages caused by the third-party arose out of the claimant’s work injury because WSI has certain legal obligations upon receiving notice of the third-party action. Id. Once WSI receives notice of a third-party action, if WSI chooses to participate in the action to recover any damages under the subro-gation statute, WSI is required to pay fifty percent of the costs of the action, including part of the attorney’s fees as provided by the statute. Id. WSI is required to pay these costs even when there is no recovery of damages in the third-party action. Id.

[¶ 14] Because we find that WSI’s findings of fact are supported by a preponderance of the evidence, its conclusions of law are supported by its findings of fact, its decision is supported by its conclusions of law, and its decision is in accordance with the law, we affirm WSI’s order that it may apply the subrogation statute to Toso’s settlement award.

[¶ 15] Affirmed.

[¶ 16] JOEL D. MEDD, D.J., and CAROL RONNING KAPSNER, J., concur.

I concur in the result. DALE V. SANDSTROM.

[¶ 17] The Honorable JOEL D. MEDD, D. J., sitting in place of CROTHERS, J., disqualified.

MARING, Justice,

dissenting.

[¶ 18] I respectfully dissent. There is no question that, under our law, WSI is subrogated to the rights of an injured employee to recover a portion of the damages sustained by him caused by the malpractice of a physician which aggravates an original work injury. Polucha v. Landes, 60 N.D. 159, 233 N.W. 264, 270 (1930). The issue presented to our Court for the first time is whether the subrogation right under N.D.C.C. § 65-01-09 is limited to the extent of compensation and benefits WSI “has paid or would otherwise pay in the future” for the negligent physician’s aggravation of the original injury. I am of the opinion that WSI’s “subrogation to the rights of the employee in a malpractice action [is] only to the extent of any compensation it was required to pay for aggravation of the original injury and not for compensation it was required to pay as a result of the accident which did not arise from negligence of the physician.” 8B Ap-pleman, Insurance Law and Practice § 4959, at p. 192 (1981).

[¶ 19] It is important to examine the history and record of this case in order to understand its posture when it was heard by the Administrative Law Judge and by our Court on appeal.

[¶ 20] The record of this case includes the hearing exhibits and the briefs of Toso and WSI for the administrative hearing. The correspondence between Toso’s attorney and WSI reveals that Toso’s attorney notified WSI that Toso had served a summons and complaint on Dr. Stavenger asserting medical negligence in the treatment of his work-related injury. Toso provided WSI copies of the pleadings and both plaintiffs and defendant’s answers to interrogatories. In these documents, Toso provided to WSI the opinion of his expert witness, Dr. Johannes C. Coetzee and defendant’s expert witness, Dr. William T. Simonet. Toso’s attorney informed WSI that Dr. Coetzee would testify that Dr. Jeffrey Stavenger’s failure to properly treat Toso’s injured foot caused an increase in the disability of the foot and that he had no expert witness testimony that Dr. Stavenger’s negligence resulted in medical expenses or wage loss solely attributable to that negligence. WSI was provided defendant’s expert witness answers to interrogatories in which Dr. Si-monet stated Dr. Stavenger followed the appropriate standard of care and that Toso’s claimed problems were all the result of the initial injury. Toso’s attorney proposed to WSI that only benefits paid by WSI as a result of Dr. Stavenger’s aggravation of the original injury were recoverable by WSI from the third-party damages. WSI took the position that, under N.D.C.C. § 65-01-09, it was entitled to recover all of the benefits it had paid from the date of the original injury from any third-party recovery. Toso’s and WSI’s positions never changed.

[¶ 21] Toso settled the medical malpractice claim for $82,500. In a December 29, 2003, letter to WSI, Toso’s attorney took the position “that since no compensation was payable or paid with respect to the third party’s liability, there should be no deduction or obligation to repay any portion of the current settlement.” WSI disagreed and issued a subrogation order claiming a subrogation interest in fifty percent of the settlement proceeds or $41,250. The order apportioned that interest as follows:

WSI’s subrogation interest $41,250.00
Less WSI’s share of attorney fees at 25% $10,312.50
Less WSX’s share of approved costs
(Exclusive of attorney fees) at 50% $ 921.24
Reimbursement to WSI and credit to employer’s account. $30,016.26

Toso had been paid wage loss benefits from August 25, 1999, to May 21, 2001, of $38,886.86 and medical expense benefits of $18,505.42 for a total of $57,392.28. Toso was ordered to remit the sum of $30,016.26 to WSI. Toso requested a hearing and submitted that WSI could only recover amounts caused by the medical negligence it had paid or that would otherwise be payable in the future; that the only damage caused by the medical negligence was an increase in permanent disability of Toso’s foot and that WSI had not paid any benefits for permanent partial disability. The Specification of Issue dated April 5, 2004, and set forth by the ALJ for the hearing was “whether Workforce Safety and Insurance’s subrogation interest pursuant to N.D.C.C. § 65-01-09 was properly applied to Lanny Toso’s settlement of his medical malpractice claim.” In its Order Setting Briefing Schedule and Oral Argument dated April 13, 2004, the ALJ stated counsel for WSI and Toso agreed “that no material facts must be determined to resolve this matter and that an eviden-tiary hearing is therefore not necessary. ...” WSI and Toso each submitted a brief. In his brief, Toso stated that the issue was: “Under N.D.C.C. § 65-01-09, is the WSI subrogation right limited to the ‘injury’ caused by the negligent third party?” WSI’s brief stated: “Toso and WSI have agreed to submit the dispute concerning application of WSI’s subrogation claim under N.D.C.C. § 65-01-09 to the ALJ based upon the stipulated exhibits and written briefs.” Further, addressing Toso’s position that WSI did not pay for any medical expense or wage loss caused by the negligence of Dr. Stavenger, WSI’s brief stated:

WSI took no position with respect to these issues given its interpretation on how N.D.C.C. § 65-01-09 is to be applied to this third party recovery, i.e., the statute does not call for a separation and examination of the type of benefits paid and recoverable in the third party action. If it is ultimately judicially determined that WSI’s interpretation of N.D.C.C. § 65-01-09 is in error, WSI must be permitted the opportunity to evaluate and determine the amount of benefits to which its subrogation claim may be applied in this case.

The ALJ, in her Recommended Findings of Fact, Conclusions of Law, and Order notes that the parties submitted briefs, presented oral argument, and “[n]o testimony was taken and exhibits 1-20 consisting of 90 pages were stipulated to by the parties prior to the hearing and were admitted.” The ALJ stated “[t]he issue to be decided is whether Workforce Safety and Insurance’s subrogation interest pursuant to N.D.C.C. § 65-01-09 was properly applied to Lanny Toso’s settlement of his medical malpractice claim.” The ALJ and the parties treated the issue as a question of law involving the interpretation of a statute. The ALJ recommended that WSI had properly applied N.D.C.C. § 65-01-09 to Lanny Toso’s settlement of his medical malpractice claim. WSI adopted the ALJ’s decision.

[¶ 22] Toso appealed WSI’s final order to the district court on the grounds that the decision was not in accordance with the law pursuant to N.D.C.C. § 65-01-09. The district court affirmed WSI’s final order. Toso then appealed to our Court.

[¶ 23] On appeal, Toso framed his issue: “Under N.D.C.C. § 65-01-09, does WSI’s subrogation right include all benefits paid to an employee, including benefits representing injuries and damages for which the Third Party Defendants is not and could not be liable?” In WSI’s brief on appeal to our Court, it stated:

Toso and WSI agreed to submit the dispute concerning application of WSI’s subrogation claim under N.D.C.C. § 65-01-09 to the ALJ based upon the stipulated exhibits and written briefs.... Again, no adjudication was made as to the factual issues relating to the effect of the alleged medical malpractice on the medical, disability or permanent impairment. The sole issue for the ALJ to determine was whether N.D.C.C. § 65-01-09 was properly applied to the settlement proceeds in Toso’s third party claim.

[¶ 24] Based on my review of this record, the only issue before our Court is whether WSI erred as a matter of law when it concluded it was entitled to reimbursement for all benefits it had paid to Toso from the date of the original injury out of Toso’s medical malpractice settlement. This issue requires our interpretation of N.D.C.C. § 65-01-09 and is a question of law fully reviewable by our Court. Shiek v. N.D. Workers Comp. Bureau, 2001 ND 166, ¶ 17, 634 N.W.2d 493. “The primary purpose of statutory construction is to ascertain legislative intent.” Id. “The Legislature’s intent must be sought initially from the statutory language.” Stutsman County v. State Historical Society of N.D., 371 N.W.2d 321, 325 (N.D.1985).

[¶ 25] In Ness v. St. Aloisius Hospital, 313 N.W.2d 781, 782-83 (N.D.1981), our Court held the provision regarding the Worker’s Compensation Bureau’s (now known as Workforce Safety and Insurance), right to subrogation ambiguous. In that case, we said:

Statutes must be construed to avoid absurd results. When the Legislature uses a term which has a peculiar and appropriate meaning in law, it shall be construed to such peculiar and appropriate meaning. The Bureau’s right is one of subrogation only. Insofar as the Bureau stands in the shoes of Marva D. Ness in her individual capacity, when those rights are barred to the subrogee, Marva D. Ness, they are also barred to the subrogor, the Bureau.

Id. at 783 (citations omitted). WSI’s right of subrogation under N.D.C.C. § 65-01-09 has been changed by the legislature several times. See N.D.R.C. § 65-0109 (1943), N.D.R.C. § 65-0109 (1949); Gimble v. Montana-Dakota Utilities Company, 77 N.D. 581, 44 N.W.2d 198, 200-01 (1950); N.D.C.C. § 65-01-09. First, it prohibited an employee claiming compensation from bringing any third-party action. N.D.R.C. § 65-0109 (1943). Then, it allowed an employee claiming compensation to also bring a third-party action, but granted the Bureau the right to one-hundred percent of the recovery. N.D.R.C. § 65-0109 (1949). The statute currently grants WSI a right to fifty percent of the recovery. N.D.C.C. § 65-01-09. If the language of a statute is ambiguous or of doubtful meaning or if adherence to the strict letter of the statute would lead to an absurd result, a court may resort to extrinsic aids to determine the intent of the legislature. Shiek, 2001 ND 166, ¶ 17, 634 N.W.2d 493.

[¶ 26] In Blaskowski v. ND Workmen’s Compensation Bureau, we held that “[t]he purpose of the Bureau’s subrogation rights is to reimburse the fund, to the extent possible, at the expense of the persons at fault.” 380 N.W.2d 333, 335 (N.D.1986) (citations omitted). We also pointed out that the legislature in 1965 reduced the Bureau’s right to subrogation of third-party recoveries from one-hundred percent to fifty percent. Id. (citing 1965 N.D. Sess. Laws ch. 452). We concluded “[t]his change was apparently made to induce employees to bring actions against third parties who were at fault.” Id. (citing to Minutes of SB 2143, 1981 N.D. Sess Laws, ch. 641).

[¶ 27] In a subsequent case construing N.D.C.C. § 65-01-09, our Court stated “we are not certain that the purpose of § 65-01-09, N.D.C.C., is limited to reimbursing the Bureau for its expenditures. It is clear that by amending § 65-01-09, N.D.C.C., in 1965 that the Legislature intended this statutory provision as an incentive for the worker to pursue and litigate legal claims against culpable third parties.” Lawson v. N.D. Workmen’s Compensation Bureau, 409 N.W.2d 344, 347 (N.D.1987) (citations omitted). Most significantly, we noted “the purpose and intent of Title 65, N.D.C.C., is to protect the injured worker and ensure the prosperity of the State by protecting its wage workers.” Id.; N.D.C.C. § 65-01-01 (stating in relevant part that “[t]he state of North Dakota, ... declares that the prosperity of the state depends in a large measure upon the well-being of its wage workers, and ... sure and certain relief is hereby provided ...)”.

[¶ 28] In Lawson v. N.D. Workmen’s Compensation Bureau, our Court was presented with the correctness of WSI’s calculation of costs under N.D.C.C. § 65-01-09. We concluded that the language creating the statutory formula for costs was somewhat ambiguous, and that “any ambiguity must be interpreted in favor of the worker, Lawson, and in pursuit of the legislative intent, providing a greater incentive to the injured worker to prosecute third-party claims.” Lawson, 409 N.W.2d at 347. Based on our analysis, we held that WSI had to pay fifty percent of the costs of the third-party action despite the language in the statute that the costs should be prorated and adjusted based on the percentage of the total subrogation interest recovered to the total recovery. Id. at 347.

[¶ 29] I am of the opinion that N.D.C.C. § 65-01-09, when read as a whole and applied to third-party malpractice recoveries is ambiguous. The legislative intent appears to be to encourage injured workers to bring third-party actions. The statute is designed to apply to factual situations where the work-related injury and third-party tortious conduct occur simultaneously. Therefore, in the usual situation, wage loss, medical expenses, and other losses will all arise at the time of the original injury.

[¶ 30] However, in a case involving medical negligence, there is a period of time from the original injury to the occurrence of the medical negligence. There is no question that, today, medical negligence cases are costly to pursue and difficult to prove. Common sense and basic math tell us there will be no incentive for an injured worker to pursue the average medical negligence case if N.D.C.C. § 65-01-09 is construed in the manner proposed by WSI. In light of all the changes to N.D.C.C. § 65-01-09 made by our legislature, I am convinced the intent has been to encourage injured workers to bring third-party actions, and I construe the statute with both that intent and the fact that WSI’s 'construction “militates against that desired end” in mind. See N.D.C.C. § 1-02-39; Lawson v. N.D. Workmen’s Comp. Bureau, 409 N.W.2d at 347.

[¶ 31] I also am of the opinion that to interpret only one provision of N.D.C.C. § 65-01-09 is inappropriate. “All sections of a statute must be construed to have meaning because the law neither does nor requires idle acts. In short, we are guided by the common-sense principle that a statute is to be read to give effect to each of its provisions, whenever fairly possible.” Stutsman County v. State Historical Soc. of N.D., 371 N.W.2d 321, 325 (N.D.1985).

[¶ 32] I turn now to the language of our subrogation statute, found at N.D.C.C. § 65-01-09:

When an injury or death for which compensation is payable under provisions of this title shall have been sustained under circumstances creating in some person other than the organization a legal liability to pay damages in respect thereto, the injured employee, or the employee’s dependents may claim compensation under this title and proceed at law to recover damages against such other person. The organization is subrogated to the rights of the injured employee or the employee’s dependents to the extent of fifty percent of the damages recovered up to a maximum of the total amount it has paid or would otherwise pay in the future in compensation and benefits for the injured employee. The organization also has a lien to the extent of fifty percent of the damages recovered up to a maximum of the total amount it has paid in compensation and benefits.

(Emphasis added). When Toso’s workplace injury was first sustained, Dr. Sta-venger had no legal liability to pay any damages. The injury was sustained because a pipe, belonging to Toso’s employer, crushed Toso’s ankle at his employer’s worksite.

[¶ 33] Our subrogation statute cannot even be said to apply until Dr. Stavenger’s alleged malpractice occurred. Only at that point had an injury been sustained “under circumstances creating in some person other than the organization a legal liability to pay damages in respect thereto.” See id.

[¶ 34] The problem with WSI’s position is addressed in Larson’s Worker’s Compensation Law:

An illustration will point up the problem: suppose that the employee suffers a simple injury, for which he or she would ordinarily receive compensation in the amount of $2,000. The injury is aggravated by a physician, so that the actual compensation for which the employer becomes liable is $5,000. The compensation cost, so to speak, of the aggravation is $3,000. Now suppose, under the majority rule, the employer, having paid the employee $5,000 compensation, and having been subrogated to the employee’s malpractice action, recovers $5,000 damages for the aggravation alone from the physician. Under a literal reading of most subrogation statutes, presumably the employer can keep the entire $5,000 to repay itself for its compensation outlay, and presumably there is no “excess” to be paid over to the employee. This is obviously unfair, since the $5,000 damages should be used to repay only the $3,000 outlay attributable to the malpractice, and the other $2,000 should go to the employee. The inequity becomes more glaring when you realize that the original uncomplicated injury might indeed have actually been caused by the employer’s negligence, so that the employee’s money is actually used to reimburse the employer for its own wrong.

Larson’s Worker’s Compensation Law § 112.02(5)(a). In this case, it appears WSI has only reimbursed Toso for damages arising out of the original injury. WSI does not claim to have provided Toso any compensation for the aggravation allegedly caused by Dr. Stavenger. Toso’s recovery from Dr. Stavenger can only be said to have been compensation for the aggravation of the original injury caused by the medical negligence.'

[¶ 35] Other jurisdictions have addressed the issue before us. See Larson’s Worker’s Compensation Laiv § 112.02(5)(a) and (b). In Robinson v. Liberty Mutual Ins. Co., the Illinois Court of Appeals dealt with a very similar situation. 222 Ill.App.3d 443,165 Ill.Dec. 3, 584 N.E.2d 182 (1991). In February 1981, the plaintiff suffered an on-the-job injury to his back. Id. The Illinois Industrial Commission determined the plaintiff was entitled to $6,067.47 in temporary total disability. Id. Plaintiff later learned that an October 1983 back surgery arising out of the on-the-job injury had worsened his condition. Id. Plaintiff filed a petition with the commission in January 1985 seeking additional temporary total disability payments relating back to June 1, 1981. Id. Plaintiff was subsequently awarded $73,899. Id. In April 1985, plaintiff filed a medical malpractice action against the doctor who performed the back surgery. Id. at 182-83. This case was settled with the doctor in 1989 for $350,000. Id. at 183. Plaintiffs employer’s insurer intervened and filed a motion requesting that plaintiffs settlement be “impressed” with a lien in the amount of $79,966.47, the total amount the insurer had paid plaintiff. Id. Plaintiff argued the insurer’s lien could not include the $6,067.47 in benefits paid to him prior to the surgery nor could it claim the entire amount of $73,899.00 subsequently paid to him because a portion of those benefits were for a period before surgery during which plaintiff could not work. Id. The Illinois Court of Appeals, interpreting a statute similar to our own, agreed with the plaintiff, stating its conclusion was in line with other jurisdictions who have ruled:

[T]he employer’s lien should extend to only those expenses attributable to the medical aggravation of the injury; i.e. that the amount of the lien should be limited to the amount that the employer is required to pay because of the malpractice.

Id. at 184 (noting similar holdings in: Dodds v. Stellar, 30 Cal.2d 496, 183 P.2d 658 (1947); Heaton v. Kerlan, 27 Cal.2d 716, 166 P.2d 857 (1946); Industrial Comm’n v. Standard Insurance Co., 149 Colo. 587, 370 P.2d 156, 158 (Co.1962); Breen v. Caesars Palace, 102 Nev. 79, 715 P.2d 1070 (1986); Drypolcher v. New York Telephone Co., 85 A.D.2d 895, 446 N.Y.S.2d 728 (N.Y.App.Div.1981); and citing 2A A. Larson, The Law of Workmen’s Compensation § 72.65(b) (1952)). The court held “plaintiffs original injury was not caused under circumstances creating legal liability on the part of a third party.” The court noted that “to hold otherwise would result in the employee receiving no compensation for pre-malpractice injuries.” Id. at 184(citation omitted).

[¶ 36] The Colorado Supreme Court, concluding a physician is a third person under its statute and subject to common-law liability, held:

Since we have determined that the physician is a third party and that the employer is liable for compensation for the injury caused by the physician’s negligence, it follows that by the express provisions of [the statute] the employer and insurer are entitled to be subrogat-ed to the rights of the employee in his malpractice action against the negligent physician. However, the employee’s claim, being bifurcated, he can recover from the doctor only such damages as flow from the doctor’s negligence. Accordingly, the insurer is subrogated only to the extent of the compensation he is required to pay for aggravation of the original injury by the doctor. Moreover, the insurer is not subrogated for compensation he is required to pay as a result of the accident which did not arise from the negligence of the physician.

Industrial Comm’n v. Standard Insurance Co., 149 Colo. 587, 370 P.2d 156, 158 (Co.1962) (citations omitted). In my opinion, the language in N.D.C.C. § 65-01-09, limiting WSI’s subrogation right to only those injuries “sustained under circumstances creating in some person other than the organization a legal liability to pay damages in respect thereto” clearly does not provide WSI with a right to recover for benefits it paid for the original injury from damages recovered for subsequent medical malpractice. Damages occurring after the malpractice may or may not arise from the aggravation of the injury by the negligent physician. The seriousness of the original injury and the seriousness of the medical negligence will affect the determination.

[¶ 37] WSI is entitled to a subrogation right under N.D.C.C. § 65-01-09 in this case. I am of the view, however, that our statute requires that WSI’s subrogation right be limited to benefits paid arising out of the aggravation of Toso’s original injury. WSI does not, under our statute, receive a right to reimbursement for any compensation WSI paid to Toso for injuries not related to the alleged malpractice aggravation because those injuries were not injuries sustained under circumstances creating in Dr. Stavenger a legal liability to pay damages in respect thereto. In order to be entitled to reimbursement from Toso’s settlement recovery, WSI must establish what benefits it paid through May 21, 2001, were caused solely by the medical negligence. WSI must establish it was compelled to make payments of benefits because of the negligence of Dr. Stavenger. If it can so establish, WSI is then entitled to reimbursement to the extent of those benefits paid due to the negligence of Dr. Stavenger. If there is no evidence that any compensation paid by WSI to Toso was for damages Toso suffered because of the medical negligence, then WSI is entitled to a credit in the amount of $30,016.26 for any benefits it may be obligated to pay in the future which are a result of the medical negligence of Dr. Stavenger. See Breitwieser v. State, 62 N.W.2d 900, 907 (N.D.1954) (holding that a dependent must refund out of her third-party recovery anything paid, but if nothing has been paid there is no reimbursement to the fund and the amount can be claimed as a credit toward future compensation due her).

[¶ 38] I would reverse and remand this case for an evidentiary hearing on whether the compensation WSI paid to Toso is attributable to the aggravation of the original injury caused by Dr. Stavenger and, if so, the amount.

[¶ 39] Mary Muehlen Maring