author: HANSON, Judge

text:
    STATE of Minnesota, Respondent, v. Denarro Tyrone BURKS, Appellant.
    No. C0-00-1671.
    Court of Appeals of Minnesota.
    July 17, 2001.
    Mike Hatch, Minnesota Attorney General, St. Paul, MN; and Amy Klobuchar, Hennepin County Attorney, Linda M. Freyer, Assistant County Attorney, Minneapolis, MN, for respondent.
    Ann McCaughan, Assistant State Public Defender, Minneapolis, MN, for appellant.

      Considered and decided by WILLIS, Presiding Judge, HALBROOKS, Judge, and HANSON, Judge.
   OPINION

HANSON, Judge

On appeal from a conviction of felon in possession of a pistol, appellant argues that he substantially complied with the Interstate Agreement on Detainers by demanding final disposition of the Minnesota complaint in a 1997 request to Wisconsin authorities, even though Wisconsin authorities neglected to forward his request for final disposition to Minnesota authorities. He contends that the district court erred in denying his motion to dismiss the charge, which was not brought to trial until 2000. We affirm.

FACTS

On February 12, 1997, appellant Denar-ro Tyrone Burks was arrested and charged in Hennepin County with being a felon in possession of a pistol under Minn. Stat. .§ 624.713 (1996). In violation of the terms of his conditional release, Burks left Minnesota and was arrested and imprisoned in Wisconsin on a different charge. Upon learning of Burks’ activities, the Hennepin County District Court revoked the conditional release and obtained a de-tainer on Burks through the Dodge County Correctional Institution in Wisconsin.

On July 30, 1997, Burks sought an expedited final disposition of the Hennepin County charge pursuant to the Interstate Agreement on Detainers (“IAD”), codified at Minn.Stat. § 629.294 (2000). He signed the requisite paperwork and gave it to the Wisconsin correctional authorities. A-most three years later, on April 6, 2000, the Wisconsin correctional authorities notified the Hennepin County Attorney that they had failed to complete and forward Burks’ IAD request.

After his release from imprisonment in Wisconsin, Burks stood trial on stipulated facts in Hennepin County on the felon-in-possession charge. Burks brought a motion to dismiss that charge, arguing that the state had failed to timely dispose of the charge while he was detained in Wisconsin, as required by the IAD. The district court denied the motion, concluding that the 180 day deadline for trial on the charge, as mandated by the IAD, does not commence until the detainee’s request was actually received by the Hennepin County Attorney’s Office and the Hennepin County District Court. The court then found Burks guilty of being a felon in possession of a pistol and sentenced him to 18 months, with credit for 548 days served in Wisconsin. Burks was therefore never committed to the Minnesota Department of Corrections. This appeal followed.

ISSUES

1. Did the 180-day deadline for trial on the felon-in-possession charge commence upon appellant’s delivery of his request for final disposition to Wisconsin authorities?

2. Did the district court abuse its discretion by not dismissing the charge against appellant in the interest of justice?

ANALYSIS

Whether a statute has been properly construed is a question of law subject to de novo review. State v. Murphy, 545 N.W.2d 909, 914 (Minn.1996).

I.

The purpose of the IAD is to require prompt disposition of outstanding charges in order to ensure the speedy trial of persons incarcerated in other jurisdictions. Carchman v. Nash, 473 U.S. 716, 720, 105 S.Ct. 3401, 3403, 87 L.Ed.2d 516 (1985); State v. Fuller, 560 N.W.2d 97, 98-99 (Minn.App.1997), review denied (Minn. Apr. 27, 1997). Because the IAD is a compact among 48 states, the District of Columbia, Puerto Rico, the Virgin Islands and the United States, it is state law and “a law of the United States as well.” Reed v. Farley, 512 U.S. 339, 347, 114 S.Ct. 2291, 2296, 129 L.Ed.2d 277 (1994). As such, the IAD is subject to construction by the federal court as well as by the various state courts. Carchman, 473 U.S. at 719, 105 S.Ct. at 3403.

As enacted in Minnesota, the IAD “shall be liberally construed so as to effectuate its purposes.” Minn.Stat. § 629.294, Art. IX (2000). The IAD states in relevant part:

Whenever a person has entered upon a term of imprisonment in a penal or correctional institution of a party state, and whenever during the continuance of the term, of imprisonment there is pending in any other party state any untried * * * complaint on the basis of which a detainer has been lodged against the prisoner, he shall be brought to trial within ISO days after he shall have caxised to be delivered to the prosecuting officer and the appropriate court of the prosecuting officer’s jurisdiction * * * his request for a final disposition to be made of the * * * complaint.

Minn.Stat. § 629.294, Art. 111(a) (emphasis added).

Minnesota’s courts have not ruled on the meaning of “shall have caused to be delivered” for purposes of calculating the 180 day statutory period. But see State ex rel. Chamberlain v. Martinco, 288 Minn. 231, 233, 179 N.W.2d 286, 287 (1970) (stating in dictum that the IAD “provides that the receiving state is required to bring the convict to trial within 180 days after receiving a request from him”) (emphasis added). However, the United States Supreme Court has construed the IAD to provide that the 180 day period does not commence until the court and the prosecutor of the jurisdiction that lodged the de-tainer receive the detainee’s request. Fex v. Michigan, 507 U.S. 43, 51, 113 S.Ct. 1085, 1090, 122 L.Ed.2d 406 (1993). The court stated:

We must reject petitioner’s contention that a prisoner’s transmittal of an IAD request to the prison authorities commences the 180 day period even if the request gets lost in the mail and is never delivered to the ‘receiving’ State.

Id. at 47-48, 113 S.Ct. at 1088-89. While acknowledging that this interpretation may subject a detainee to the whims of a negligent or malicious warden, the court envisioned a significantly worse result if “the prosecution will be precluded before the prosecutor even knows it has been requested.” Id. at 50, 113 S.Ct. at 1090.

II.

Burks argues that his petition was in substantial compliance with the IAD and his motion to dismiss should have been granted for that reason. However, the substantial-compliance cases cited by Burks involve circumstances where the prosecuting jurisdiction had received actual notice of the request for final disposition, even though some aspect of the procedure followed by the detainee was in question. See, e.g., United States v. Reed, 910 F.2d 621, 626 (9th Cir.1990) (deputy’s actions misled detainee and detainee was not provided with the correct trial-request form); Gibson v. Klevenhagen, 777 F.2d 1066, 1058 (5th Cir.1985) (detainee submitted personal letter); State v. Blackburn, 214 Wis.2d 372, 571 N.W.2d 695 (1997) (detainee’s motion was not sent by registered mail and was proferred before de-tainer was lodged against him); Palmer v. Williams, 120 N.M. 68, 897 P.2d 1111, 1115 (1995) (detainee’s filing of motion to dismiss did not constitute substantial compliance with IAD’s notice requirements); State v. Moreau, 287 N.J.Super. 179, 670 A.2d 608, 610 (1995) (recognizing the substantial-compliance doctrine but finding detainee strictly complied with I AD). These cases do not modify the decision in Fex that the 180 day period for speedy resolution of a detainee’s charge commences on the detaining state’s receipt of the request. Fex, 507 U.S. at 51, 113 S.Ct. at 1090.

III.

Burks further contends that the case should have been dismissed in the interest of justice pursuant to Minn.Stat. § 631.21 (2000). Because this statute provides for dismissal only on the court’s own motion or on motion of the prosecuting attorney, it provides no support for a motion to dismiss by Burks.

In any event, the U.S. Supreme Court rejected a similar argument in Fex, concluding that defendant’s “ ‘fairness’ and ‘higher purpose’ arguments are * * * more appropriately addressed to the legislatures of the contracting States, which adopted the IAD’s text.” Fex, 507 U.S. at 52, 113 S.Ct. at 1091.

DECISION

The requirement of the IAD that a detainee be tried on a charge giving rise to a detainer, within 180 days after a request, does not commence until the prosecuting jurisdiction has received the detainee’s request for a final disposition. The district court properly denied appellant’s motion to dismiss.

Affirmed.

      . Notably, Minnesota’s Uniform Mandatory Disposition of Detainers Act, the statute that serves to expedite indictments for a defendant incarcerated in Minnesota who has a pending indictment in a Minnesota court, requires that the indictment be brought to trial ''[w]ithin six months after the receipt of the request and certificate by the court and prosecuting attorney.” Minn.Stat. § 629.292, subd. 3 (2000) (emphasis added).

      . We recognize that one jurisdiction has expressly repudiated the holding in Fex. See State v. Morris, 74 Wash.App. 293, 873 P.2d 561, 565 (1994) (holding that "once the inmate delivers his request to the warden, he has done what the statute obligates him to do to cause it to be delivered”).


source: Caselaw Access Project

author: G. BARRY ANDERSON, Judge

license: Public Domain

text:
    Barbara Jo REID, Respondent, The County of Stearns, Respondent, v. Gary Wayne STRODTMAN, Appellant.
    No. C9-00-1880.
    Court of Appeals of Minnesota.
    July 17, 2001.

      Roger S. Van Heel, Stearns County Attorney, Richard J. May, Assistant Stearns County Attorney, St. Cloud (for respondents).
    Ronald R. Frauenshuh, Jr., Ortonville (for appellant).

      Considered and decided by RANDALL, Presiding Judge, SCHUMACHER and ANDERSON, Judges.
   OPINION

G. BARRY ANDERSON, Judge

Appellant sought to reopen child support proceedings pursuant to Minn. R. Civ. P. 60.02 and Minn.Stat. § 518.145 (2000). The child-support magistrate concluded that those provisions did not apply to proceedings commenced under the Expedited Child Support Process, and denied appellant’s motion. We conclude that the district court erred by failing to apply Minn. R. Civ. P. 60.02 when conducting a review of appellant’s expedited child-support proceedings, but that the error was harmless because appellant was not entitled to relief under the rule, and therefore, we affirm.

FACTS

In 1994, appellant Gary Wayne Strodt-man and respondent Barbara Jo Reid entered into a stipulation, subsequently reduced to an order, which provided that appellant was obligated to pay child support to respondent for their son, T.J.R. In June 1999, the district court served appellant with a proposed order to modify child support. The order based appellant’s net monthly income on Minnesota Department of Economic Security wage estimates. Appellant disagreed with the proposed order and the district court scheduled an August 13,1999 hearing.

On August 12, 1999, appellant sent Kathryn Trossen, a child support officer, a facsimile letter stating that he was unable to attend the August 13, 1999 hearing because he needed to “leave town .” The hearing proceeded without appellant’s participation, and on September 9, 1999, the child support magistrate issued an order modifying appellant’s child-support obligation and imputing income to him based on appellant’s testimony in an earlier proceeding and Department of Economic Security 1997 Wage Estimates for St. Cloud, Minnesota. The court served the order on appellant.

In April 2000, appellant filed a deficient motion for a retroactive and prospective reduction in his child-support obligation. Appellant successfully refiled the motion on June 5, 2000. The motion was heard on June 7, 2000. Appellant (through counsel) requested that the district court vacate the September 9, 1999, order, or, in the alternative, grant a reduction in child support. Appellant argued that he was prevented from appearing at the August hearing because of the difficult nature of an ongoing custody dispute. Appellant testified that he had needed to “get away,” had asked the court for a continuance, and argued that his absence caused the child support magistrate to improperly impute income to him. The child support magistrate orally denied appellant’s request to vacate the September 9, 1999, order. The proceedings continued on the issue of child-support modification.

Before the child support magistrate issued a ruling, appellant’s attorney requested rehearing of the August 13, 1999, proceedings by letter dated June 22, 2000. Appellant’s attorney argued that the child support magistrate’s act of imputing income constituted a “mistake” and “fraud” warranting vacation of the September 9, 1999, order, and cited cases allowing for vacation of marital dissolution judgments for fraud and mistake pursuant to Minn. Stat. § 518.145 (2000). The letter also explains that appellant “believed he was going to be granted a continuance * * * .”

By order dated July 14, 2000, the child support magistrate determined that appellant had not shown cause for vacating the September 9, 1999, order and denied retroactive modification of child support. The magistrate granted prospective modification of appellant’s child-support obligation because appellant had gained custody of two of his children since the last order issued.

On August 9, 2000, appellant moved for “new trial.” Appellant argued that the child support magistrate erred by not considering his June 5, 2000, submission as a motion to vacate the September 9, 1999, order under Minn. R. Civ. P. 60.02, even though appellant had not requested relief under rule 60 in any earlier pleadings or arguments. The child support magistrate treated the August 9, 2000, motion for new 'trial as a motion for review pursuant to Minn. R. Gen. Pract. 372. By order dated August 31, 2000, the child support magistrate concluded that the motion had no basis under Minn.Stat. § 518.145 or several Minnesota Rules of Civil Procedure, including rule 60, and denied the motion.

This appeal follows. Appellant argues that the district court erred by failing to grant a new trial under Minn. R. Civ. P. 60.02 because appellant demonstrated excusable neglect, a basis for reopening under the rule.

ISSUE

Did the district court err by concluding that Minn. R. Civ. P. 60 .02 does not apply to proceedings commenced under the Interim Rules of the Expedited Child Support Process?

ANALYSIS

The orders in this case were entered between July 1, 1999, and June 30, 2001, and are subject to the Interim Rules of the Expedited Child Support Process (hereafter EXPRO rules). Minn. R. Gen. Pract. 360.01; Order of the Minnesota Supreme Court No. C4-99MR4 (Minn. June 19, 2000). This court conducts a de novo review of a child support magistrate’s order on matters of civil procedure under the EXPRO rules. Brazinsky v. Brazinsky, 610 N.W.2d 707, 710 (Minn.App.2000).

A Appealability

As a preliminary matter, respondent argues that appellant did not make Minn. R. Civ. P. 60.02 the basis of his original motion to vacate in the district court and, consequently, the issue is not properly before this court. Rule 60.02 was not raised in any pleadings or arguments until appellant submitted his motion for “new trial” on August 9, 2000. Instead, appellant relied on Minn.Stat. § 518.145, subd. 2 (2000), which provides for reopening of a dissolution decree for mistake, inadvertence, surprise, or excusable neglect, and cited cases applying that statute.

Although appellant did not properly raise his rule 60 argument in the lower court, the child support magistrate considered that argument and issued a corresponding ruling. We therefore address the application of Minn. R. Civ. P. 60.02 to EXPRO proceedings. See- Minn. R. Civ. App. P. 103.04 (permitting this court to “review any other matter as the interest of justice may require”).

B. Reopening

This case began in 1994 as a paternity action commenced under Minn.Stat. § 257.66 (1994). Ordinarily, motions subsequent to a paternity adjudication, other than those concerning custody and visitation, “shall proceed and be determined in accordance with chapter 518” of the Minnesota Statutes. Minn.Stat. § 257.66, subd. 3 (2000). Minn.Stat. § 518.145, subd. 2 (2000), governs the reopening of judgments in marital dissolution cases, and permits new trial for, among other things, “mistake, inadvertence, surprise, or excusable neglect.” Id., subd. 2(1).

Where, however, as here, a party seeks to modify a child support order arising from a paternity action, “a motion for relief under [Minn. R. Civ. P.] 60.02, if timely, is still an available procedure * * Hennepin Cty. Welfare Bd. v. Kolkind, 391 N.W.2d 539, 540-41 & n. 1 (Minn.App.1986). Like Minn.Stat. § 518.145, Minn. R. Civ. P. 60.02(a) provides for relief from judgments, including new trial, based on “[mjistake, inadvertence, surprise, or excusable neglect * * *.” Id.

The EXPRO rules

govern the procedure for all proceedings conducted in the expedited child support process, regardless of whether the presiding officer is a child support magistrate, family court referee, or district court judge.

Minn. R. Gen. Pract. 351.01.

The EXPRO rules explain their relationship with other court rules:

To the extent that other rules of court are inconsistent with these rules, these rules supersede such inconsistent provisions.

Id.

Applicability of Other Rules of Court. To the greatest extent possible, the Advisory Committee has attempted to incorporate into these rules applicable Rules of Civil Procedure, Rules of Evidence, and General Rules of Practice for the District Courts. Unless otherwise incorporated, such other rules of court are not binding on the expedited child support process. However, child support magistrates, court administrators, parties, and attorneys should look to such other court rules for guidance. In doing so, such other rules of court should be applied so as to further the purposes and goals of the expedited child support process as set forth in Rule 351.02 and the accompanying Advisory Comment.

Minn. R. Gen. Pract. 351.01, Advisory Committee Comment.

Thus, the child support magistrate, when considering appellant’s motion for new trial, should have looked to rule 60.02 for guidance if that rule furthered the purpose of the expedited process and was consistent with other EXPRO rules.

The purpose of the EXPRO rules is to establish a process that:

(a) is streamlined;
(b) is uniform across the state;
(c) is easily accessible to the parties; and
(d) results in timely and consistent issuance of orders.

Minn. R. Gen. Prac. 351.02. The Advisory Committee Comment to rule 351.02 explains that the rules should be construed to be “constitutional” and “fair to the parties.” Id.

Although vacating an earlier order and conducting a new trial may not be streamlined or result in the timely issuance of orders, we reject the notion that granting a new trial does not further the purpose of the expedited process. Denying a party relief from excusable neglect or the other reasons warranting rule 60.02 relief compromises fundamental fairness, while mindlessly pursuing rigid compliance with the EXPRO rules.

We also believe that vacating judgment and granting new trial under rule 60.02 are consistent with the EXPRO rules. The EXPRO rules do not provide for rehearing or a procedure for vacating an earlier order. The rules provide for a continuance, which may be granted by the child support magistrate upon a showing of “good cause,” Minn. R. Gen. Pract. 369.03, subd. 1, and provide for motions to correct clerical mistakes, Minn. R. Gen. Pract. 371. The rules also provide for independent magistrate or district court review of child support orders, and that review may include a hearing if only if good cause is shown. Minn. R. Gen. Pract. 372.05, subds. 2, 6. Because the EXPRO rules do not address vacating judgment and granting a new trial for the reasons set forth in Minn. R. Civ. P. 60.02, that rule is consistent with the EXPRO rules.

We conclude that the child support magistrate erred by concluding that appellant’s motion had no basis under rule 60.02. Granting relief from judgments for the reasons set forth in rule 60.02 promotes fairness, a purpose of the EXPRO rules, and the provision is consistent with the EXPRO rules.

C. Harmless Error

Any error, however, will not require reversal if it is harmless. Minn. R. Civ. P. 61. A party seeking relief under Minn. R. Civ. P. 60.02 must establish (1) a reasonable case on the merits; (2) a reasonable excuse for the failure to act; (3) action with due diligence after entry of judgment; and (4) lack of prejudice to the opposing party. Finden v. Klaas, 268 Minn. 268, 271, 128 N.W.2d 748, 750 (1964). All four elements must be proven, but a weak showing on one factor may be offset by- a strong showing on the others. Valley View, Inc. v. Schutte, 399 N.W.2d 182, 185-86 (Minn.App.1987), review denied (Minn. Mar. 18,1987). If the district court fails to apply the four-factor test, this court may apply the test de novo. Carter v. Anderson, 554 N.W.2d 110, 115 (Minn.App.1996), review denied (Minn. Dec. 23, 1996).

Appellant sought a new trial on the basis of excusable neglect but fails to establish sufficient grounds for relief under rule 60.02. First, even accepting appellant’s contention that his case for retroactive reduction in child support is reasonable on the merits, that issue was already litigated in the June 7, 2000 child-support-modification motion proceeding. Appellant was permitted to present both documentary evidence and testimony in support of his claim for a retroactive reduction in child support based on improper imputation of income. The child support magistrate ruled that appellant was not entitled to retroactive modification. Appellant did not appeal that ruling.

Second, appellant has not shown a reasonable excuse for failing to attend the August 13, 1999 hearing. Appellant did not affirmatively request a continuance. Appellant testified that he attempted to telephone court personnel to tell them he would not be able to attend the August 13, 1999 hearing and, because he was unsuccessful, sent a facsimile letter to the court. That letter addresses a number of unrelated issues and in closing states only that, “[f]inally on Friday I can not make it to court because I have to leave town.” Although appellant characterizes this communication as a request for a continuance, it is merely an explanation for his failure to appear. Appellant’s excuses for failing to attend the hearing — having to “leave town” and “get away” — were not reasonable.

The third factor is also weak. Appellant did not act with due diligence after entry of judgment. Appellant did not seek review of the September 9, 1999 order as provided for in the EXPRO rules and did not seek proceedings for modification of child support until April 2000. Cf. Petrich v. Dyke, 419 N.W.2d 833, 835 (Minn.App.1988) (due diligence factor met where motion to vacate brought less than one week after judgment entered); Valley View, Inc., 399 N.W.2d at 185 (due diligence factor met where motion to vacate filed within six days of judgment).

Finally, although granting new trial does not appear to prejudice respondents, the fourth element of the Finden test, the first three factors weigh against granting rule 60.02 relief.

To the extent appellant argues that the child support magistrate’s conclusions concerning his income warrant reopening, he again fails to establish grounds for relief. Rule 60.02 is intended to correct mistake or inadvertence of a party and does not allow for correction of judicial error. Sullivan v. Spot Weld, Inc., 560 N.W.2d 712, 716 (Minn.App.1997), review denied, (Minn. Apr. 24, 1997); Arzt v. Arzt, 361 N.W.2d 135, 136 (Minn.App.1985). District courts are not to review judicial error through application of rule 60; review of judicial error is the function of the appellate courts. Carter, 554 N.W.2d at 114.

The EXPRO rules provide for relief from judicial errors, known to the aggrieved party upon receipt of the order, by motion for review and direct appeal. Minn. R. Gen. Pract. 372, 374. Appellant did not seek either form of review from the child support magistrate’s July 14, 2000 finding that appellant’s income was properly determined by using Minnesota Department of Economic Security wage estimates or from the child support magistrate’s corresponding decision to deny retroactive modification of child support.

We conclude that any error by the child support magistrate in failing to apply Minn. R. Civ. P. 60.02(a) was harmless because appellant is not entitled to relief under that rule.

DECISION

The district court erred by concluding that Minn. R. Civ. P. 60.02 does not apply because that provision farthers the purpose of, and does not conflict with, the Interim Rules of the Expedited Child Support Process. The error, however, was harmless because appellant is not entitled to relief under rule 60.02.

Affirmed.


author: KLAPHAKE, Judge

text:
    AMERICAN NATIONAL GENERAL INSURANCE COMPANY, Appellant, v. Paul Gerald SOLUM, et al., Respondents, Adam Kraus, Party in Intervention.
    No. C8-00-2082.
    Court of Appeals of Minnesota.
    July 17, 2001.
    Review Granted Sept. 25, 2001.

      Michael W. Lowden, Stempel <& Associates, PLC, Hopkins (for appellant).
    Joseph L. Hammell, Rippe, Hammell & Murphy, Caledonia (for respondents).
    Steven E. Tomsche, Tomsche, Sonnesyn & Tomsche, Minneapolis (for intervenor).
    Considered and decided by KLAPHAKE, Presiding Judge, CRIPPEN and STONEBURNER, Judges.
   OPINION

KLAPHAKE, Judge

Appellant American National General Insurance Company (American National) brought this declaratory action against its insureds, respondents Paul and Helen So-lum, to determine whether it was obligated to provide uninsured motorist coverage. American National now challenges the jury’s finding that respondents’ son, Daniel Solum, was the owner of the involved vehicle, a Chevy S-10 truck (Chevy). American National argues that because Helen Solum applied for and received the certificate of title, she complied with the statutory requirements setting out the procedures for transferring a vehicle and extrinsic evidence to the contrary should not have been allowed. We agree and reverse.

FACTS

Daniel Solum had been arrested for driving while intoxicated and was concerned that the Chevy’s license plates would be confiscated. On April 12, 1995, Daniel transferred the certificate of title for the Chevy to his mother, but retained full use of it. The parties acknowledge that the transfer was intended solely to protect the Chevy’s license plates from impoundment.

Daniel and his father began operating a farming partnership in 1996. Daniel drove to the farmstead daily and left the Chevy in front of the house while working in the field. On January 31, 1997, Paul Solum was in an accident while driving the Chevy. American National tendered coverage under Paul’s uninsured motorist benefits because Daniel had allowed the Chevy’s insurance to lapse. The insurance company defended Paul under a reservation of coverage. After an investigation, however, American National discovered the Chevy’s certificate of title listed Helen Solum as owner and refused uninsured motorist coverage.

American National claimed that the policy providing Paul Solum’s uninsured motorist benefits did not cover its insured while occupying a motor vehicle that he owned or leased but failed to insure. Because Paul was driving a vehicle owned by his wife, but not listed under their insurance policy, he is excluded from coverage under his policy.

After considering extrinsic evidence, the jury found that Daniel Solum owned the Chevy. On appeal, American National argues that because the Solums complied with the certificate of title transfer statute, extrinsic evidence should not have been allowed to challenge ownership.

ISSUE

Does completing transfer of title constitute compliance under Minn.Stat. § 168A.10, thus establishing ownership of a vehicle?

ANALYSIS

“On appeal from a declaratory judgment, we apply a clearly erroneous standard to the factual findings but review the trial court’s determination of questions of law de novo.” Rice Lake Contracting Corp. v. Rust Env’t & Infrastructure, Inc., 549 N.W.2d 96, 98-99 (Minn.App.1996), review denied (Minn. Aug. 20, 1996). Application of a statute to the undisputed facts of a case involves a question of law, and the trial court’s decision is not binding on this court. Boubelik v. Liberty State Bank, 553 N.W.2d 393, 402 (Minn.1996).

American National argues that the transfer of title between Daniel and his mother complied with the statute’s filing requirements. The Solums argue that compliance requires completely filling out the certificate of title, which serves as the application, and delivery of the vehicle. Because they omitted answers on the application and delivery of the Chevy never occurred, they argue that compliance was incomplete.

The court is presented with the task of determining what constitutes compliance with Minn.Stat. § 168A.10. An individual who complies with the statute establishes incontrovertible evidence of ownership of the vehicle. Vue v. State Farm Ins. Cos., 582 N.W.2d 264, 266 (Minn.1998); Ameson v. Integrity Mut. Ins. Co., 344 N.W.2d 617, 618 (Minn.1984); Welle v. Prozinski, 258 N.W.2d 912, 916 (Minn.1977). One who fails to comply, however, may introduce extrinsic evidence to prove ownership. Welle, 258 N.W.2d at 916.

When the owner of a motor vehicle- sells or transfers a vehicle, he or she must deliver the certificate of title to the transferee immediately. Minn.Stat. § 168A.10, subd. 1. The transferee must then apply for a certificate of title in his or her own name. Minn.Stat. § 168A.02 (2000). Daniel purchased the Chevy S-10 truck in 1994 and then applied for and received a certificate of title. In 1995, Daniel transferred title to his mother and she signed the certificate. Minn.Stat. § 168.10, subds. 1, 2. The State of Minnesota received and processed the application listing Helen as the owner of the Chevy S-10 truck.

The motor vehicle title statute is procedural; it identifies the necessary steps to transfer a vehicle title from one person to another. Here, the Solums completed the process and Helen Solum received the certificate of title in return. The Solums argue that the omissions on the certifícate of title for the odometer reading and the sale price of the vehicle constitute noncompliance. The omissions in the application, however, did not prevent the state from processing the title. Thus, the Solums substantially complied with the statute in providing-the state with sufficient information to enable the transfer to be processed.

The Solums also argue that they did not comply with the statute because the vehicle was not delivered. While this may be a persuasive argument if the situation involved a transfer for the sale of a vehicle and the transferee sought possession of the vehicle, here Helen did not request delivery. The evidence shows that the parties intended for Daniel to continue to drive the Chevy. Because this was the Solums’ intent, there is no requirement of actual delivery. As the owner of the truck,' Helen was free to allow others to drive and maintain it.

It is well established that courts allow extrinsic evidence to determine ownership of the vehicle to protect the seller of the vehicle from any liability that may occur prior to the certificate of title properly being transferred. See Bank North v. Soule, 420 N.W.2d 598, 601-02 (Minn.1988); Arneson, 344 N.W.2d at 618; Welle, 258 N.W.2d at 916. Cases allowing extrinsic evidence to establish ownership have all addressed situations in which there was an intended transfer, but the paperwork had not been completed. Arneson, 344 N.W.2d at 617 (allowing extrinsic evidence to show that sale of vehicle had occurred two days before accident); Welle, 258 N.W.2d at 916 (permitting noncomplying seller to demonstrate actual facts through extrinsic evidence of sales transaction in order to avoid vicarious liability). Here, the paperwork was in order, the Solums intended to transfer title of the Chevy, but simply did not intend to deal with the responsibilities associated with ownership. There is a strong policy interest against allowing a family owning multiple vehicles to purchase insurance coverage on only one vehicle and recover for injuries while operating the other. See Lynch v. American Family Mut. Ins. Co., 626 N.W.2d 182, 187 (Minn.2001).

We therefore conclude that Helen So-lum’s application and receipt of the certificate of title for the Chevy S-10 truck constituted compliance with Minn.Stat. 168A.10, and the trial court erred in allowing extrinsic evidence..

DECISION

Because the Solums complied with the statutory requirements for transfer of the certificate of title, Helen Solum is the incontrovertible owner of the Chevy S-10 truck. The trial court, therefore, erred in allowing extrinsic evidence to show other claimed ownership of the Chevy.

Reversed.

      . American National raised an alternative argument that the vehicle transfer was an illegal act and that a contract for insurance cannot be based on an illegal act. Because we find that the Solums complied with the statute, we need not reach this argument.


author: PETERSON, Judge

text:
    AMERICAN FAMILY INSURANCE GROUP, Petitioner, Respondent, v. JOSEPH UDERMANN, Appellant.
    No. CX-00-2214.
    Court of Appeals of Minnesota.
    July 17, 2001.
    Review Denied Sept. 25, 2001.

      William J. Cashman, LeAnne D. Bar-tishofski, Rajkowski Hansmeier LTD, St. Cloud (for respondent).
    Michael D. Tewksbury, Tina M. Dobbe-laere, Tewksbury Kerfeld Zimmer, Minneapolis (for appellant).
    Considered and decided by KALITOWSKI, Presiding Judge, PETERSON and LINDBERG, Judges.

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

   OPINION

PETERSON, Judge

After appellant Joseph Udermann was injured in a car accident in the course and scope of his employment, he was awarded medical expenses in a no-fault arbitration proceeding. Respondent American Family Insurance Company, the no-fault insurer, filed a motion in district court to vacate the part of the arbitration award covering chiropractic expenses, arguing that a prior settlement between Udermann and the workers’ compensation carrier covered those expenses. This appeal is from the district court order granting American Family’s motion. We affirm.

FACTS

In July 1996, Udermann was injured in a car accident in the course and scope of his employment. In December 1997, Ud-ermann and the workers’ compensation carrier entered into a settlement for $31,500, which included $6,500 for attorney fees, plus costs and disbursements. The settlement agreement contains the following release and satisfaction clause:

[Udermann] agrees to accept said payments in full, final, and complete settlement and satisfaction of any and all past, present and future claims, known or unknown, related to his personal injury of July 24, 1996, for chiropractic benefits, pain clinic and pain management benefits, psychiatric or psychological benefits, health club including pool therapy, temporary total disability, temporary partial disability, permanent total disability, permanent partial disability, monitoring period compensation, retraining, rehabilitation, supplementary benefits under Minn.Stat. § 176.132, adjustment of benefits under Minn.Stat. § 176.645, claims under Minn.Stat. § 176.82, penalties, attorneys’ fees, attorney fee reimbursement under Minn. Stat. § 176.081, subd. 7, costs, interest, and any other benefits to which he may be entitled under the Minnesota Workers’ Compensation Act. Future non-chiropractic medical benefits are specifically left open subject to the defense of reasonableness and necessity and causal relationship.

(First emphasis added.) Udermann also agreed to resign from his employment and not seek re-employment with that employer in “further consideration of the [settlement] payments.” When the workers’ compensation carrier paid Udermann $25,000 pursuant to the settlement agreement, it issued a notice of benefit payment stating that the payment was for temporary total disability, temporary partial disability, permanent total disability, and permanent partial disability.

Up to the time of the settlement, Uder-mann had not received any chiropractic treatment. He began undergoing chiropractic treatment in April 1999. Uder-mann testified that he began undergoing chiropractic treatment at the recommendation of Dr. Matthew Monsein, who evaluated him in the fall of 1998.

Udermann filed a petition for no-fault arbitration seeking recovery of medical expenses, including charges incurred for chiropractic care. An arbitrator awarded Udermann $10,645.24 for medical expenses, which included $5,447 for chiropractic treatment at Lighthouse Chiropractic Health, and $1,469.16 for mileage. The arbitration award did not address the effect of the workers’ compensation settlement on American Family’s liability for payment of chiropractic expenses. The parties agree that American Family paid the arbitration award except for chiropractic treatment and related mileage expenses.

ISSUE

Does the settlement between Udermann and the workers’ compensation carrier preclude recovery of chiropractic expenses from American Family?

ANALYSIS

Because of the perceived need for consistency in the interpretation of the No-Fault Act, no-fault arbitrators are limited to deciding questions of fact, leaving the interpretation of law to the courts. Weaver v. State Farm Ins. Cos., 609 N.W.2d 878, 882 (Minn.2000). Statutory construction is a question of law subject to de novo review. Hippe v. American Family Ins. Co., 565 N.W.2d 439, 441 (Minn.App.1997).

“To the extent that the No-Fault Act and the Workers’ Compensation Act provide for compensation for personal injuries arising from motor vehicle accidents,” the two acts are in pari materia and must be construed together. Colonial Ins. Co. of Cal. v. Minnesota Assigned Risk Plan, 457 N.W.2d 209, 210 (Minn.App.1990) (citation omitted), review denied (Minn. July 31, 1990). A presumption exists that the same general legislative policy underlies both acts and that together they “constitute a harmonious and uniform system of law.” Id. (citation omitted); see Minn. Stat. § 65B.42 (2000) (purposes of No-Fault Act).

Minn.Stat. § 65B.61, subd. 1, states:

Basic economic loss benefits shall be primary with respect to benefits, except for those paid or payable under a workers’ compensation law, which any person receives or is entitled to receive from any other source as a result of injury arising out of the maintenance or use of a motor vehicle.

See also Minn.Stat. § 65B.61, subds. 2-2a (2000) (disability income loss benefits and survivors’ economic loss benefits are payable only to the extent that they exceed corresponding workers’ compensation benefits).

A claim for basic economic loss benefits shall be paid without deduction for [workers’ compensation] benefits which are to be subtracted pursuant to section 65B.61, if these benefits have not been paid to the claimant before the reparation benefits are overdue or the claim is paid. The obligor is entitled to reimbursement from the person obligated to make the payments or from the claimant who actually receives the payments.

Minn.Stat. § 65B.54, subd. 3 (2000).

Under the terms of the settlement, the workers’ compensation carrier is not liable to pay for chiropractic expenses incurred by Udermann after the date of the settlement. Udermann argues that as a result of the settlement, his chiropractic expenses are no longer “paid or payable under a workers’ compensation law.” Therefore, continues Udermann, because the workers’ compensation carrier is no longer available to pay those expenses, he should be allowed to recover them from American Family.

Udermann cites Raymond v. Allied Property & Casualty Ins. Co., 546 N.W.2d 766 (Minn.App.1996), to support his argument. The Raymond court held that the no-fault insurer was obligated to pay its insured basic economic loss benefits that were due and had not yet been paid by the workers’ compensation carrier. The court explained that because the obligation to pay workers’ compensation benefits is often contested, the purpose of Minn.Stat. § 65B.54, subd. 3, is to provide prompt payment of economic loss benefits to the insured. Id. at 768. The court declined to decide the no-fault insurer’s reimbursement rights because the workers’ compensation benefits had not yet been paid, and, therefore, the issue of reimbursement rights was not properly before the court. Id.

In this case, in contrast to Raymond, Udermann’s workers’ compensation claim has been settled and the benefits paid according to the settlement agreement. The issue is whether Udermann, having entered into a settlement that defeats American Family’s reimbursement rights as to chiropractic expenses, is still entitled to no-fault benefits for chiropractic expenses.

Udermann argues that the primary purpose of the No-Fault Act is to fully compensate injured persons and, therefore, American Family can only avoid paying chiropractic expenses if it proves that a specific dollar amount of the settlement was attributable to chiropractic expenses. We disagree. The legislature specifically designated workers’ compensation benefits as primary with respect to no-fault benefits. Udermann entered into a settlement under which he expressly agreed to accept the settlement

payments in full, final, and complete settlement and satisfaction of any and all * * * future claims, known or unknown, related to his personal injury of July 24, 1996, for chiropractic benefits.

Udermann’s contention that the notice of benefit payment shows that the settlement payment was not intended to compensate him for chiropractic expenses is not persuasive. Given the reference to chiropractic benefits in the settlement agreement, particularly in light of the express exclusion of “[fluture non-chiropractic medical benefits,” the only reasonable inference is that potential future chiropractic expenses were accounted for in the final settlement amount. Because workers’ compensation benefits are primary with respect to no-fault benefits and because Udermann entered into a settlement with the workers’ compensation carrier that compensated him for chiropractic expenses and defeated American Family’s reimbursement rights, Udermann is precluded from recovering no-fault benefits for chiropractic expenses.

We reject Udermann’s argument that our holding will discourage settlements. The only settlements that will be discouraged are those that would undermine the priority system between workers’ compensation and no-fault benefits expressly determined by the legislature.

DECISION

The district court properly concluded that the settlement with the workers’ compensation carrier precluded Udermann from collecting no-fault benefits for chiropractic expenses. The district court properly vacated the part of the arbitration award covering chiropractic treatment and related mileage expenses.

Affirmed.


author: SCHUMACHER, ROBERT H., Judge.

text:
    Daniel J. SCHEIBEL, Respondent, v. ILLINOIS FARMERS INSURANCE COMPANY, an Illinois corporation, Appellant.
    No. CX-01-165.
    Court of Appeals of Minnesota.
    July 24, 2001.
    Review Denied Sept. 25, 2001.

      Gary T. LaFleur, Babcock, Neilson, Mannella, LaFleur & Klint, Anoka, MN, for respondent.
    Thomas S. McEachron, Votel, Anderson & McEachron, St. Paul, MN, for appellant.
    Considered and decided by SCHUMACHER, Presiding Judge, RANDALL and ANDERSON, Judges.
   OPINION

SCHUMACHER, ROBERT H., Judge.

Appellant Illinois Farmers Insurance Company challenges the district court’s decision on the distribution of no-fault insurance benefits to respondent Daniel J. Scheibel. Illinois Farmers contends that the district court erred in interpreting and applying the decision of the Minnesota Supreme Court in Scheibel v. Illinois Farmers Ins. Co., 615 N.W.2d 34 (Minn.2000). We affirm.

FACTS

In March 1996 and again in May 1996, Scheibel was injured in two separate rear-end automobile accidents. He received medical treatment after each accident, including back surgery in November 1996. Scheibel was insured by Illinois Farmers under the same no-fault insurance policy for both accidents.

Scheibel’s policy with Illinois Farmers covered medical expenses up to a limit of $20,000 per accident. Illinois Fanners paid Scheibel a total of $23,558 for his medical expenses for both accidents, unilaterally determining that Scheibel incurred $3,558 in medical expenses as a result of the first accident and that the remainder of his medical expenses were attributable to the second accident. The $23,558 fell short of Scheibel’s total medical expenses of $30,511 for both accidents, leaving unpaid medical expenses of $6,953.

Scheibel contested Illinois Farmers’s apportionment of medical expenses between the two accidents, and, as a result, the matter was submitted to arbitration. The no-fault arbitrator found that Scheibel’s medical expenses and disability and income loss were causally related to both accidents, with 35% of the loss attributable to the first accident and 65% attributable to the second accident. The parties agreed that there were no further issues of fact to be determined.

Scheibel sought confirmation of the arbitration award, seeking payment of all claimed no-fault benefits with interest. Illinois Farmers claimed Scheibel was only entitled to recover no-fault benefits due to the second accident. The district court granted summary judgment in favor of Illinois Farmers, holding that apportionment was improper. This court affirmed. Scheibel v. Illinois Farmers Ins. Co., No. C1-98-2097, 1999 WL 391910, at *3 (Minn. App. June 15, 1999). The supreme court accepted review and stated in part as follows:

It is undisputed that Scheibel’s injuries were 35 percent attributable to the first accident and 65 percent attributable to the second. Because both accidents cumulatively caused Scheibel’s injuries and because his medical expenses are not fully reimbursed under the policy limits attributable to the second accident, we hold that Scheibel is entitled to additional reimbursement under his policy with Illinois Farmers for losses attributable to the first accident. * * * Illinois Farmers, as the insurer on the second accident, is obligated to pay the maximum policy limit of $20,000 for Scheibel’s injuries regardless of the extent to which each accident contributed to the injuries. Further, to the extent that, absent the second accident, Schei-bel would still have a viable claim under his Illinois Farmers policy for injuries suffered in the first accident, he is entitled to payment for medical expenses attributable to the first accident that remain unreimbursed after the $20,000 policy limit for the second accident has been paid. However Scheibel is entitled to recover only that unreimbursed portion of his total medical expenses attributable to the first accident, up to the $20,0Q0 policy limit applicable to the first accident. Conversely, he cannot recover for any loss attributable to the second accident from coverage for the first accident.

Scheibel v. Illinois Farmers Ins. Co., 615 N.W.2d 34, 39 (Minn.2000) (footnote omitted). Accordingly, the supreme court “reversed in part, and remanded for further proceedings.”

On remand, Scheibel moved to enter judgment against Illinois Farmers in the amount of $6,953.93, plus interest. The parties agreed that Scheibel’s total medical expenses resulting from both accidents totaled $30,511 and that Illinois Farmers had already paid $23,558. Scheibel’s counsel argued that the arbitrator’s apportionment of causation was determinative as to the issue of the amount of medical expenses attributable to the first accident. Counsel for Illinois Farmers argued that, in its decision, the supreme court had created a “new standard” and therefore the original arbitrator’s findings were inapplicable. Counsel for Illinois Farmers requested that the matter be re-submitted for arbitration.

The district court found that the parties had arbitrated the factual issues related to causation, that the arbitrator found that Scheibel’s total medical expenses were causally related to both accidents and attributed 35% of the total medical expenses to the first accident and 65% of the total medical expenses to the second accident. Neither party disputes this finding. Applying the supreme court’s decision, the district court determined that Scheibel’s maximum allowable recovery would be $20,000 for the second accident and $10,678 (.35 x $30,511) for the first accident. Because Scheibel had already been paid $3,558 attributable to the first accident, the district court calculated that he had $6,953 of unreimbursed medical expenses and awarded Scheibel that amount plus interest.

ISSUE

Did the district court correctly apply the supreme court’s decision in Scheibel v. Illinois Farmers Ins. Co., 615 N.W.2d 34 (Minn.2000)?

ANALYSIS

The district court’s interpretation of a higher court’s decision presents a question of law subject to de novo review. See State v. Camacho, 561 N.W.2d 160, 170 (Minn.1997).

Illinois Farmers agrees that Scheibel is entitled to receive the maximum $20,000 for the second accident, however, contends that the supreme court’s decision requires an additional hearing to determine the amount that Scheibel may recover under the policy for expenses attributable to the first accident. Specifically, Illinois Farmers argues that the supreme court’s decision requires a factual finding to determine what Schei-bel’s medical expenses would have been had the second accident never occurred. In support of its contentions, Illinois Farmers cites the following sentence from the supreme court’s opinion:

[T]o the extent that, absent the second accident, Scheibel would still have a viable claim under his Illinois Farmers policy for injuries suffered in the first accident, he is entitled to payment for medical expenses attributable to the first accident that remain unreimbursed after the $20,000 policy limit for the second accident has been paid.

Scheibel v. Illinois Farmers Ins. Co., 615 N.W.2d 34, 39 (Minn.2000). Having considered the opinion as a whole, however, we conclude that the supreme court intended no such result and that Illinois Farmers is bound by the original arbitrator’s findings.

Neither party in this case disputes the district court’s conclusion that the original no-fault arbitrator attributed 35% of Schei-bel’s total medical expenses to the first accident and 65% to the second accident. The supreme court concluded that Scheibel should recover “that unreimbursed portion of his total medical expenses attributable to the first accident, up to the $20,000 policy limit applicable to the first accident.” Id.

Illinois Farmers submitted the matter of causation to the arbitrator and does not dispute the resulting factual findings. “[Bjy acquiescing in and participating in the [arbitration] proceeding [the parties] in effect represented that * * * the parties would be bound by the decision and award * * Twomey v. Durkee, 291 N.W.2d 696, 699 (Minn.1980). Here, Illinois Farmers received a full and fair opportunity to argue its case in regard to the causation issue during the original arbitration hearing. The original arbitrator’s decision is final.

Illinois Farmers suggests that the supreme court did not intend for the aforementioned 35% figure to constitute a final adjudication as to the amount that Schei-bel is entitled to recover for the first accident. Illinois Farmers reasons that if the supreme court had so intended, it would not have remanded the matter for further proceedings. Cf. Mattson v. Underwriters at Lloyds of London, 414 N.W.2d 717, 720 (Minn.1987) (holding that appellate court intended reversal of trial court’s decision to conclude litigation, where remand for further proceedings was neither stated nor implied). But an appellate court may remand for further proceedings limited to entering judgment in strict accordance with that appellate court’s instructions. See, e.g., Croaker ex rel. Croaker v. Mackenhausen, 592 N.W.2d 857, 863 (Minn.1999) (remanding to trial court in order to enter judgment consistent with supreme court’s opinion).

We conclude that the supreme court’s opinion directed the district court to award no-fault benefits to Scheibel using the original arbitrator’s factual determinations. The district court did so and applied a formula not inconsistent with the supreme court’s decision. Thus, we hold that the district court did not err in calculating a cap of $10,678 for the first accident and awarding Scheibel $6,953 plus interest.

We recognize that in affirming the decision of the district court, we give tacit approval of apportionment in no-fault cases involving the aggravation of a preexisting injury from a prior accident. This might appear to contravene the supreme court’s apparent rejection of apportionment articulated in Great West Cas. Co. v. Northland Ins. Co., 548 N.W.2d 279, 281 n. 4 (Minn.1996) (“We disagree with the court’s apportioning of PIP benefits, and we consider them payable by the insurer when the insured incurs a compensable loss.”). But as the supreme court noted in Scheibel, the specific holding of Great West did not include a rejection of apportionment. Scheibel, 615 N.W.2d at 38. Further, we find ample support for the use of apportionment in the supreme court’s more recent opinion. See id. at 39 n. 3 (“This formula for the amount of no-fault insurance coverage available to Scheibel to achieve full reparation does rely to some extent on apportionment, which is a concept that we reject in Great West. However, this formula retains the bright line of' liability that we articulated in Great West.”).

DECISION

In apportioning no-fault benefits according to the findings of an arbitrator, the district court properly applied the supreme court’s decision in Scheibel v. Illinois Farmers Ins. Co., 615 N.W.2d 34 (Minn.2000).

Affirmed.


author: KALITOWSKI, Judge

text:
    STATE of Minnesota, Respondent, v. William Allen FRAZIER, Appellant.
    No. C8-00-2230.
    Court of Appeals of Minnesota.
    July 24, 2001.
    Review Granted Sept. 25, 2001.

      Mike Hatch, Attorney General, Natalie E. Hudson, Assistant Attorney General, St. Paul, MN; and Alan Mitchell, St. Louis County Attorney, Duluth, MN, (for respondent).
    John M- Stuart, State Public Defender, Michael F. Cromett, Assistant State Public Defender, Minneapolis, MN, (for appellant).
    Considered and decided by PETERSON, Presiding Judge, KALITOWSKI and FOLEY, Judges.

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

   OPINION

KALITOWSKI, Judge

Appellant contends that Minn.Stat. § 609.229 (1998), the statute that makes it a crime to commit certain enumerated offenses “for the benefit of a gang,” violates the equal protection guarantees of the Minnesota Constitution.

FACTS

Appellant William Allen Frazier sold crack cocaine to confidential reliable informants on November 2 and 9, 1999, and January 29, 2000. In an amended complaint, appellant was charged with one count of first-degree controlled substance crime, two counts of second-degree controlled substance crime, and one count of third-degree controlled substance crime. The state also alleged that all of the offenses were committed for the benefit of a gang, in violation of Minn.Stat. § 609.229 (1998). On August 7, 2000, appellant, who admitted membership in the New Breed Disciples, a criminal gang, pleaded guilty to second-degree controlled substance crime and crime committed for the benefit of a gang. At the plea hearing, the state, appellant, and the district court were aware that appellant intended to contest the constitutionality of section 609.229 at the sentencing hearing.

At his sentencing hearing on September 14, 2000, appellant, a black male, challenged the constitutionality of section 609.229. He presented Minnesota Gang Strike Force statistics indicating that of the 1,025 confirmed gang members in Minnesota, at least 70% are racial minorities. In addition he provided statistics from the Minnesota Sentencing Guidelines Commission indicating that of the 39 persons convicted of crime committed for benefit of a gang, at least 35 were racial minorities.

The district court rejected appellant’s argument and sentenced appellant to the presumptive 48 month executed term on the second-degree controlled substance conviction and an additional consecutive 12 month executed term on the crime committed for the benefit of a gang conviction. On this appeal appellant challenges the constitutionality of his conviction of crime committed for the benefit of a gang.

ISSUES

1. Did appellant waive his right to challenge the constitutionality of Minn.Stat. § 609.229 (1998) on appeal?

2. Does Minn.Stat. § 609.229 violate the equal protection guarantees of the Minn. Const, art. I, § 2?

ANALYSIS

I.

The state, relying on State v. Lothenbach, 296 N.W.2d 854 (Minn.1980), contends that appellant forfeited his right to contest the constitutionality of Minn.Stat. § 609.229 (1998), because the issue was not argued until after appellant pleaded guilty. We disagree. The record indicates that appellant, the district court, and the state all understood at the plea hearing that appellant intended to challenge the statute at the sentencing hearing. Thus, we conclude that, as in Lothenbach, appellant here adequately reserved his right to challenge the constitutionality of section 609 .229 prior to pleading guilty. See id. at 858 (reviewing a defendant’s Fourth Amendment issue although he failed to follow the preferred approach of submitting the case to the district court on stipulated facts to preserve a pretrial claim for appellate review).

II.

Appellant contends that Minn. Stat. § 609.229 has a discriminatory impact because it results in longer prison sentences for minorities and violates the equal protection guarantee of the Minnesota Constitution. “In evaluating challenges to the constitutionality of statutes, * * * the interpretation of statutes is a question of law.” In re Blilie, 494 N.W.2d 877, 881 (Minn.1993) (citation omitted). Accordingly, this court “is not bound by the [district] court’s conclusions.” Id. (quotation omitted). “Minnesota statutes are presumed constitutional, and our power to declare a statute unconstitutional should be exercised with extreme caution and only when absolutely necessary.” In re Haggerty, 448 N.W.2d 363, 364 (Minn.1989) (citation omitted); see also State v. Machholz, 574 N.W.2d 415, 419 (Minn.1998). Appellant bears the burden of demonstrating beyond a reasonable doubt that the statute is unconstitutional. Machholz, 574 N.W.2d at 419.

Federal courts review an equal protection challenge using a rational basis test requiring

(1)a legitimate purpose for the challenged legislation, and (2) that it was reasonable for the lawmakers to believe that use of the challenged classification would promote that purpose.

State v. Russell, 477 N.W.2d 886, 887 (Minn.1991) (citation omitted). But in Minnesota, our courts have applied a more stringent rational basis test than the federal equivalent.

(1) The distinctions which separate those included within the classification from those excluded must not be manifestly arbitrary or fanciful but must be genuine and substantial, thereby providing a natural and reasonable basis to justify legislation adapted to peculiar conditions and needs; (2) the classification must be genuine or relevant to the purpose of the law; that is there must be an evident connection between the distinctive needs peculiar to the class and the prescribed remedy; and (3) the purpose of the statute must be one that the state can legitimately attempt to achieve.

Id. at 888 (quotation omitted). Minnesota courts require “a reasonable connection between the actual * * * effect of the challenged classification and the statutory goals.” Id. at 889 (citation omitted).

In 1991, Minnesota enacted a criminal statute, making it unlawful to commit a crime for the benefit of a gang. 1991 Minn. Laws ch. 279, § 30. The statute defines a criminal gang as any ongoing group with three or more persons that

(1) has, as one of its primary activities, the commission of one or more of the offenses listed in section 609.11, subdivision 9;
(2) has a common name or common identifying sign or symbol; and
(3) includes members who individually or collectively engage in or have engaged in a pattern of criminal activity-

Minn.Stat. § 609.229, subd. 1 (1998). The presumptive sentence for a crime committed for the benefit of a gang is a 12 month executed sentence. Id., subd. 4 (1998).

Under the first prong of the Russell test, we evaluate section 609.229 to see if it provides a “genuine and substantial distinction between those inside and outside the class.” 477 N.W.2d at 889. To meet this standard, the state is required to show more than anecdotal support for classifying gang members differently than nongang members. See id. (finding county attorney’s testimony, about what amounts of controlled substances are commonly sold on the streets, anecdotal).

Appellant contends that as in Russell the state has relied upon only anecdotal evidence to support treating criminal gangs differently than groups that do not fit the definition of a gang under Minn. Stat. § 609.229, subd. 1. We disagree.

Minn.Stat. § 609.229 was enacted, in part, because crimes committed for the benefit of a gang “are more serious” and deserve a greater penalty because of the impact on the victim and the community. Hearing on S.F. No. 809 Before the Senate Criminal Law Subcommittee (April 4, 1991) (statement of Norman Coleman, Assistant Attorney General). The legislature was presented with a number of newspaper articles reflecting the seriousness of the gang problem including an article detailing the dismissal of felony charges in three cases in Hennepin County because witnesses were threatened by gang members.

Moreover, to justify the creation of this new crime, two witnesses presented testimony about the growing problem with criminal gangs in Minnesota. A psychologist with the Minneapolis Public Schools testified that an increasing number of the students are afraid to leave their homes at night because of street gangs, and that he has noticed young children flashing gang signs, the prevalence of gang insignias on students’ folders, and a recent death threat by a gang member against an assistant principal. Id. (statement by Dr. Donald Kodluboy). Further, he hypothesized that if nothing was done to respond to the influx of street gangs, the gangs would become a “permanent part of our community as they are in virtually every other major urban area.” Id. Additionally, the Minnesota President of the NAACP, a member of Operation Take Back, and a Central Minneapolis resident, testified that residents in his neighborhood are living in fear because of gang intimidation. Id. (statement by Lewis Freeman). We conclude that the legislature based its decision to treat street gang members differently from nongang members on more than anecdotal evidence.

Appellant also contends there is no showing that prosecution under statutes defining “traditional criminal offenses” was ineffective in dealing with criminal offenses committed by gang members. But statutes are presumed constitutional, Machholz, 574 N.W.2d at 419, and the legislature concluded that the gang statute was necessary to combat violent street gangs. Thus, the legislature found that statutes defining traditional criminal offenses were not sufficient to deal with crimes committed by gang members. We defer to that finding.

Additionally, appellant contends that the gang statute does not have a rational basis because it does not cover similarly situated organizations that do not have a “common name or common identifying sign or symbol.” But appellant bears the burden of demonstrating beyond a reasonable doubt that a statute is unconstitutional. Id. And appellant fails to identify a similarly situated criminal organization that may escape the gang statute’s purview because it does not have a common name or identifying symbol. Thus, appellant fails to prove beyond a reasonable doubt that the gang statute violates equal protection guarantees.

Appellant also suggests that the gang statute has no rational basis and violates equal protection guarantees because it focuses on “ongoing” gangs as opposed to “disbanded” gangs. We disagree. Disband means to “break up.” The American Heritage Dictionary 401 (2d ed.1985). By its very definition, a disbanded street gang is no longer a threat to the community and thus it is rational for the legislature to focus its efforts on “ongoing” street gangs. Therefore, because the legislature was attempting to combat gang violence, we conclude that section 609.229 shows a “substantial and distinct” reason for creating a harsher penalty for crimes committed by gang members.

Although appellant did not contest section 609.229 under the second and third prongs of Russell, we note that an analysis of both prongs also results in a finding of constitutionality. Under the second prong of the Russell analysis, “there must be an evident connection between the distinctive needs peculiar to the class and the prescribed remedy” proposed by the contested statute. 477 N.W.2d at 888 (quotation omitted). Here, the legislature determined that criminal gangs present a particular threat to the community and thus a harsher penalty is required. By increasing the penalties for gang crimes, the legislature is attempting to address the threat of gang violence and intimidation. Finally, under the third prong of the Russell analysis we conclude that the purpose of the statute is “one that the state can legitimately attempt to achieve.” Id. (quotation omitted).

DECISION

Appellant did not waive his right to contest the constitutionality of MinmStat. § 609.229 (1998) on appeal because the district court, appellant, and the state agreed that appellant could contest the statute at the sentencing hearing. Section 609.229 does not violate the equal protection clause of Minn. Const, art. I, § 2.

Affirmed.


author: HALBROOKS, Judge HANSON, Judge

text:
    INDEPENDENT SCHOOL DISTRICT 833, Respondent, v. BOR-SON CONSTRUCTION, INC., Appellant, v. A. Kamish & Sons, Inc., Central Roofing Company and Spancrete Midwest, Third-party Defendants.
    No. C2-01-77.
    Court of Appeals of Minnesota.
    July 24, 2001.

      Shamus P. O’Meara, Dale 0. Thornsjo, Johnson & Condon, P.A., Minneapolis, MN, (for respondent).
    John M. Anderson, Kelly A. Putney, Bassford Lockhart Truesdell & Briggs, P.A., Minneapolis, MN, (for appellant).
    Considered and decided by WILLIS, Presiding Judge, HALBROOKS, Judge, and HANSON, Judge.
   OPINION

HALBROOKS, Judge

This is a subrogation action brought by the Minnesota School Board Association Insurance Trust (MSBAIT) in the name of respondent Independent School District 833 (ISD 833). ISD 833 sustained property damage resulting from a roofing project. MSBAIT seeks to recover its costs incurred as ISD 833’s insurer for repairs to three elementary schools that were damaged by appellant Bor-Son Construction. The district court ruled that the subrogation-waiver provision did not apply to ISD 833⅛ claim for damage to “non-work” property, and Bor-Son challenges the court’s interpretation of the waiver provision. Because the district court erred in its interpretation of the provision, we reverse.

FACTS

On February 23, 1995, ISD 833 contracted with Bor-Son to repair the roofs of three elementary schools. The contract used was a standard contract designed by the American Institute of Architects (AIA). The terms of the contract required ISD 833 to maintain property insurance and to obtain liability insurance for damages “other than to the [w]ork itself.” The contract also contained a waiver-of-subro-gation clause that barred any claims based on Bor-Son’s “work.” The term “work” was defined as “the construction and services * * * and includes all other labor, materials, equipment and services provided or to be provided by the Contractor

ISD 833 had pre-existing property insurance through MSBAIT that covered the school buildings and their contents. To fulfill its obligation under the contract, ISD 833 purchased a “builder’s risk” endorsement as a supplement to its insurance policy that specifically provided Bor-Son with additional property insurance for the three roofing projects. ISD 833 did not procure any other additional insurance.

Construction began in the summer of 1995. Bor-Son used a temporary water-protection system, which used reinforced polyethylene and a ballast, to protect the interior. But due to heavier-than-anticipated rainfall in June and July, water seeped into the buildings. The parties dispute whether there were adequate precautions taken to prevent water penetration and whether Bor-Son was urged to take greater precautions. Bor-Son completed the roofing projects by the start of the school year and received a notice of substantial completion from the school district’s architect.

The water damaged the schools’ interiors and equipment and led to mold growth, causing $775,086.01 in damages. Ninety percent of these damages were covered by MSBAIT, which subsequently brought this subrogation action against Bor-Son.

Both parties made a motion for partial summary judgment on the issue of the subrogation-waiver clause. ISD 833 argued that the waiver did not apply because the damage to the buildings was on the inside rather than the roofs and, consequently, it was not work-related. Bor-Son argued that ISD 833 waived its subrogation right or, in the alternative, that the damage to the interior of the buildings was work-related.

The district court granted ISD 833’s motion and denied Bor-Son’s motion. The court held that the waiver of the subrogation rights contained in Articles 11.3.5 and 11.3.7 of the contract was limited to claims for damage to the “work.” Because the water damage to the building interiors and subsequent mold growth were not work-related, the district court concluded that the subrogation waiver was inapplicable.

In June 1998, in a case of first impression, the Minnesota Supreme Court interpreted the subrogation-waiver clause in the standard AIA contract. Employers Mut. Cas. Co. v. A.C.C.T., 580 N.W.2d 490 (Minn.1998). The supreme court held that an owner agreed to waive the right to make a claim for damages done only to the “work” if the owner purchases a separate all-risk policy specifically to cover that risk. Id. at 493.

But if the owner relies on an existing policy which is so broad that it covers both “work” and “nonwork” property, it waives the right to sue for all damages done as long as that damage is covered by the policy.

Id.

In light of A.C.C.T., Bor-Son moved for reconsideration of the district court’s rulings on partial summary-judgment motions. The district court denied the motion, finding A.C.C. T. to be distinguishable. In an effort to avoid trial, Bor-Son confessed judgment against it for $791,252.63, but reserved its right to appeal the district court’s interpretation of the subrogation waiver. This appeal follows.

ISSUE

Did the district court err in its interpretation of the subrogation-waiver clause in the insurance policy?

ANALYSIS

We begin by first addressing ISD 833’s argument that this appeal cannot be heard. Because Bor-Son agreed to a confessed judgment, ISD 833 argues that Bor-Son “has admitted liability on virtually all of the non-intentional claims,” including negligence, breach of contract, breach of warranties, and negligent misrepresentation. Given this admission of liability, ISD 833 characterizes Bor-Son’s request on appeal as seeking an advisory opinion. Further, ISD 833 argues that Bor-Son is estopped from bringing this appeal by agreeing to the settlement.

We disagree. First, ISD 833 mischarac-terizes Bor-Son’s claim. We are presented with a justiciable controversy. See Cincinnati Ins. Co. v. Franck, 621 N.W.2d 270, 274 (Minn.App.2001) (“Because the judicial function does not comprehend the giving of advisory opinions, justiciability is necessary in all adjudications.” (citations omitted)). Bor-Son’s claim is justiciable because it involves a definite, concrete assertion of a right emanating from the parties’ contract; it stems from a genuine conflict between parties with adverse interests; and it is capable of specific resolution by judgment. Id.

Second, Bor-Son explicitly reserved the right to appeal and, therefore, is not es-topped by the settlement. The plain language of the settlement clearly indicates that it “is intended to preserve [Bor-Son’s] right to seek reversal” of the district court’s partial summary-judgment decision. See S O Designs USA, Inc. v. Rollerblade, Inc., 620 N.W.2d 48, 53 (Minn.App.2000) (stating that an unambiguous contract must be construed to “give effect to the intention of the parties as expressed in the language they used” (quotation omitted)), revieiu denied (Minn. Feb. 21, 2001). It is illogical to say that the same settlement that explicitly reserved Bor-Son’s right to appeal also prohibits Bor-Son from exercising that right. Respondent’s motion to dismiss the appeal is, therefore, denied, as is appellant’s motion to strike respondent’s motion.

Finding that Bor-Son may properly seek review from this court, we turn to the substantive question of whether a sub-rogee waives the subrogor’s right to sue by purchasing a builder’s endorsement. We start by applying the supreme court’s rulings in A.C.C.T., interpreting duty-to-insure provisions. Employers Mut. Cas. Co. v. A.C.C.T., 580 N.W.2d 490, 493 (Minn.1998). The issue before the supreme court was whether the standard AIA-waiver clause barred the owner’s insurer from bringing a subrogation claim against a contractor for negligently-caused damages. Id. at 491. In A.C.C.T., a medical center entered into a standard AIA contract with A.C.C.T. to remove asbestos. Id. The medical center relied on its existing property-insurance policy to fulfill its obligations under the AIA contract. Id. at 492. After a fire that started in the area where A.C.C.T. was working resulted in damage to both the “work” and “nonwork” areas, the medical center recovered its losses from its insurer, Employers Mutual Casualty Company. Id. The insurer, in turn, brought a subrogation claim, alleging A.C.C.T. was negligent and had breached its contract. Id. A.C.C.T. responded that under the contract, “both parties agreed to waive all rights against the other for damages to the extent that those damages are covered by property insurance.” Id.

The supreme court agreed and reversed this court’s affirmance of the trial court’s denial of summary judgment to A.C.C.T. The supreme court held that the waiver’s distinction between “work” and “nonwork” was “based upon the owner’s decision to purchase a new policy or to rely on an existing one.” Id. at 493. If an owner purchased an all-risk policy that “was specifically to cover the ‘work’ ” and that was separate from any existing property-insurance policy, then the owner only waived the right to sue for damages arising from the “work.” Id. The owner retained its subrogation right to sue for damage to “nonwork” property. But if an owner decided to rely on its existing property insurance, then “it waives the right to sue for all damages done as long as that damage is covered by the policy.” Id.

A builder’s endorsement, such as exists in this case, does not fall squarely within the A.C.C.T. holding. The endorsement represents the owner’s intent to insure something not covered by the existing policy. But an endorsement is “[a]n amendment to an insurance policy.” Black’s Law Dictionary 548 (7th ed.1999). We have construed an endorsement to be part of an existing contract, not a separate and independent document. National Indem. Co. v. Ness, 457 N.W.2d 755, 759 (Minn.App.1990), review denied (Minn. Sept. 14, 1990).

Although the owner is purchasing additional coverage by buying an endorsement, the endorsement becomes part of the existing policy. Id. Because the endorsement cannot “stand” on its own, the owner fulfills its contractual duty to provide insurance on the basis of its preexisting all-purpose policy. ISD 833 did not purchase a separate policy that clearly delineated between “work” and “nonwork.” The underlying policy, supplemented by the endorsement, covers both “work” and “nonwork” property. As a result, ISD 833 waived its subrogation right to sue for covered damages.

This holding is consistent with Lloyd’s Underwriters v. Craig & Rush, Inc., 26 Cal.App.4th 1194, 32 Cal.Rptr.2d 144 (1994), a case that the supreme court found persuasive. See A.C.C.T., 580 N.W.2d at 494. In Lloyd’s Undenoriters, the California Court of Appeals noted that it might have come to a different conclusion had the owner purchased a separate policy that was specifically limited to damages arising from work property. 32 Cal.Rptr.2d at 146 n. 4. Although dictum, the court added that the owner’s policy either “by virtue of an exclusion or for other reasons” must be specifically applicable only to work-related damages. Id.

Reviewing respondent’s endorsement, we find no language that limits this endorsement to only work-related damages. Rather, the endorsement specifically is “[ajttaehed to and forming a part of’ the original policy. Under the standard AIA contract, if an owner wants to preserve subrogation rights to sue for damage to “nonwork” property, the owner must purchase a separate policy, not supplement an existing one. A.C.C.T., 580 N.W.2d at 493.

DECISION

Both respondent’s motion to dismiss the appeal and appellant’s motion to strike respondent’s motion are denied. The district court erred in granting partial summary judgment in favor of ISD 833. Because ISD 833 did not purchase a separate insurance policy, its subrogation right under the AIA contract was waived.

Reversed; motions denied.

HANSON, Judge

(dissenting)

I respectfully dissent. I would affirm the district court’s conclusion that the “Waivers of Subrogation” clause applies only to claims brought under the Builder’s Risk Endorsement; covering loss to the Work, and does not preclude ISD 833’s subrogation claim brought under the preexisting property coverage for damages to non-Work portions of the school property.

This dispute reduces itself to conflict between the contractor’s liability insurance, covering Bor-Son’s performance of the Work, and the owner’s pre-existing property insurance, covering ISD 833’s non-Work property. Since Bor-Son has admitted its liability for negligence, it seems clear that both coverages are implicated, and the question becomes which should be the ultimate source for payment of the damage to non-Work property. That question is determined by the parties construction contract, which allocates the parties’ respective risks and insurance obligations and defines the scope of the Waivers of Subrogation clause.

For context, it is important to note that Bor-Son agreed that it would be liable to indemnify ISD 833 for any damage to non-Work property resulting from its negligence in performing the Work. The construction contract required Bor-Son to obtain liability insurance in order to provide ISD 833 with security for that potential liability. Bor-Son has admitted its liability and ISD 833 now looks to Bor-Son’s liability insurer for payment.

The construction contract also required ISD 833 to obtain insurance, but with a narrow scope. Section 11.3.1 only required ISD 833 to purchase property insurance that insured the interest of both parties in the Work at the site. Thus, the construction contract required Bor-Son to provide liability insurance to cover the risk that Bor-Son would damage ISD 833’s non-Work property, while it required ISD 833 to provide property insurance for damage to both parties’ interest in the Work.

It is noteworthy that the construction contract further provided that if ISD 833 did not obtain the required property insurance for the Work, Bor-Son could obtain it and charge the cost back to ISD 833 by a change order. ISD 833, however, did obtain the specific coverage required by Section 11.3.1. While ISD 833 already had general property coverage under MSBAIT’s self-insured property plan, it did not rely upon that coverage to satisfy its obligation under Section 11.3.1. Instead, it obtained, at an additional cost, a Builder’s Risk Endorsement that specifically covered the Work, identified each of the three school roof projects and added Bor-Son as an “additional plan participant.”

Without going any further, it would seem logical to conclude that, because the damage was to the non-Work portions of ISD 833’s property, the allocation of risks and insuring obligations made in the construction contract would dictate that the liability insurance obtained by Bor-Son would pay the loss. Such a conclusion seems to be necessary to give effect to Bor-Son’s obligation under the construction contract to obtain liability insurance for “claims for damages, other than to the Work itself * * ⅜.” Further, it would seem inappropriate to apply the waiver of subrogation to ISD 833’s pre-existing coverage for property in which Bor-Son had no insurable interest.

The question then becomes whether the parties intended to modify the seemingly clear allocation of risks and insuring obligations by the Waivers of Subrogation clause. That clause contains a waiver by ISD 833 of all rights against Bor-Son for damages “to the extent covered by property insurance obtained pursuant to this Paragraph 11.3 or other property insurance applicable to the Work * * Bor-Son argues, and the majority opinion apparently agrees, that this language constitutes a waiver of subrogation by ISD 833, not only for claims under the Builder’s Risk Endorsement for damages to the Work, but also for claims under ISD 833’s pre-existing property coverage for damages to non-Work. Bor-Son and the majority opinion read Employers Mutual Casualty Co. v. A.C.C.T., Inc., to require this result. See Emps. Mut. Cas. Co. v. A.C.C.T., 580 N.W.2d 490 (Minn.1998) (interpreting the subrogation waivers of sub-rogation clause in the standard AIA contract). I would apply A.C.C.T differently.

It is true that A.C.C.T. ruled that the determinative issue is not whether the damage was to the Work or non-Work, but is “the owner’s decision to purchase a new policy or to rely upon an existing one” Id. at 493. However, I conclude that ISD 833 did purchase “a new policy” within the meaning and intent of A.C.C.T. I do not think the supreme court intended to create an artificial distinction between owners who satisfy their insurance obligations by purchasing stand-alone coverage for the Work and those who satisfy it by purchasing additional coverage for the Work from their existing property insurer under a Builder’s Risk Endorsement. ISD 833 did not rely on its existing coverage, but purchased new, added coverage specifically to satisfy its obligation under the construction contract.

It is, of course, logical that ISD 833 obtained that insurance from the same source. As a school district, ISD 833 is a member of the Minnesota School Boards Association Insurance Trust (MSBAIT), which provides a pooled self-insurance plan. A member’s insured losses are funded by all member school districts. It seems meaningless to require that, if ISD 833 wished to limit its waiver of subrogation to the additional insurance it was obligated to purchase under the construction contract, it must obtain the additional insurance from another source, or in a different form (i.e. as a separate policy rather than as an endorsement).

I read A.C.C.T. to require only that an owner who wishes to limit its waiver must purchase additional coverage that applies only to the Work and names the contractor as an additional insured. Both the owner and the contractor have an insurable interest in the Work until completion.

ISD 833 has supplied copies of two district court decisions involving the purchase by other school districts of similar Builder’s Risk Endorsements to the MSBAIT plan to satisfy their construction insurance obligations. In both cases the court held that these Endorsements should be treated as separate policies under A.C.C.T. See ISD 701 v. H.G. Harvey Constrs., No. 69-C7-98-301098 (St. Louis County Dist. Ct. March 17, 1999) and ISD 2125 v. Winona Heating and Ventilating Co., No. 20-C6-99-000057 (Dodge County District Court March 20, 2000). Each of these decisions concluded that, because the school district did not rely on existing property coverage, but took affirmative steps to acquire and pay for coverage specific to the Work, the waiver of subrogation clause applied only to the Builder’s Risk Endorsement coverage, and subrogation claims could be pursued for claims paid under the pre-existing property coverage.

As noted earlier, the construction contract provided that if ISD 833 did not purchase the insurance for the Work required by Section 11.3.1, Bor-Son could do so and charge the cost to ISD 833. Had Bor-Son done so, this additional coverage would clearly limit the waiver of subrogation to claims paid under the policy purchased by Bor-Son. However, Bor-Son was apparently satisfied that the Builder’s Risk Endorsement fulfilled ISD 833’s obligation under Section 11.3.1. It seems odd to now penalize ISD 833 for having purchased the additional coverage.

I would affirm the district court’s decision that the waiver of subrogation clause does not apply to claims paid under ISD 833’s pre-existing property coverage for damage to non-Work, but only applied to claims paid under the Builder’s Risk Endorsement, which is “the property insurance obtained pursuant to this Paragraph 11.3 * * * applicable to the Work.” It seems incongruous to me to require member school districts to pay for property damage admittedly caused' by Bor-Son’s negligence, when Bor-Son was contractually obligated to insure its liability for that damage.


author: CRIPPEN, Judge.

text:
    AMRESCO RESIDENTIAL MORTGAGE CORP., Respondent, v. Duane A. STANGE, Angela M. Stange, Appellants, John Doe, et al., Defendants.
    No. C8-01-97.
    Court of Appeals of Minnesota.
    July 24, 2001.
    Eric D. Cook, Leonard, O’Brien, Wilford, Spencer & Gale, Ltd., Minneapolis, MN, (for respondent).
    Michael C. Hager, Jane Larson <& Associates, Roseville, MN, (for appellants).
    Considered and decided by KLAPHAKE, Presiding Judge, CRIPPEN and STONEBURNER, Judges.
   OPINION

CRIPPEN, Judge.

Appellants Duane and Angela Stange contend that the district court erred by rejecting their proposal to enlarge the nature and scope of the eviction proceeding to hear their claims that respondent AM-RESCO Residential Mortgage Corporation was not entitled to possession of the property because of alleged defects in their underlying foreclosure. Because appellants have chosen the wrong forum to bring their claims, we affirm.

FACTS

In January 2000, after expiration of the statutory period for redeeming property, respondent AMRESCO Residential Mortgage Corporation initiated eviction proceedings in Crow Wing County District Court against appellants Duane and Angela Stange. In their answer, appellants counterclaimed and asserted affirmative defenses related to the underlying mortgage foreclosure. Appellants alleged that respondent was not entitled to possession of the property because it breached the mortgage contract by (a) refusing in bad faith to accept payment; (b) failing to give notice of default and acceleration; (c) preventing appellants from redeeming the property; and (d) failing to serve appellants with notice of the foreclosure sale.

In June 2000, the court dismissed without prejudice the counterclaims because it found that the claims exceeded the scope of summary eviction proceedings. In January 2001, on the date set for trial, the court entered summary judgment on its own motion in favor of respondent, but later granted appellants’ motion to stay the writ of restitution.

ISSUE

Did the district court err in dismissing the counterclaims?

ANALYSIS

Numerous precedents establish the limited nature and scope of an eviction proceeding, which is summary in nature. E.g., Lilyerd v. Carlson, 499 N.W.2d 803, 812 (Minn.1993); see also Minn.Stat. § 504B.001, subd 4 (2000) (defining eviction as “a summary court proceeding to remove a tenant or occupant from or otherwise recover possession of real property by the process of law set out in this chapter”). As appellants point out, the scope of the proceedings originated with the limited jurisdiction of municipal courts that once heard unlawful detainer proceedings but were not empowered to determine issues related to title. When municipal courts were abolished, this court surmised that district courts having jurisdiction in equity would be able to hear defenses and counterclaims in an eviction proceeding. Sternaman v. Hall, 411 N.W.2d 18, 19 n. 1 (Minn.App.1987). In fact, the Minnesota Supreme Court has suggested in dicta that, even though these proceedings are usually summary in nature, a counterclaim involving title should have been heard in an eviction proceeding to avoid the problems that later arose in a separate title action. Lilyerd, 499 N.W.2d at 812.

Appellants contend that the court should acknowledge the outmoded nature and scope of the proceedings and enlarge the scope because the district courts, which now hear eviction cases, have general subject-matter jurisdiction. More specifically, appellants contend that when a party asserts a counterclaim in an eviction proceeding, the court should convert the action from an eviction action to an ejectment action, an argument appellants did not present to the district court.

Appellants do not dispute that they have an equally valuable, alternate process available to them. They have indicated, in fact, that subsequent to the dismissal of their counterclaims in this action, they commenced a separate proceeding in which they seek to set aside respondent’s foreclosure. Appellants can raise their counterclaims and equitable defenses directly in that separate, district court proceeding, where they can also seek to enjoin prosecution of the eviction action. William Weisman Holding Co. v. Miller, 152 Minn. 330, 332, 188 N.W. 732, 733 (1922). Thus, there is no evident reason to interfere with the summary nature of eviction proceedings. Using the alternate procedure instead of expanding the eviction proceeding accords with the appellate courts’ prior determinations that the district court should uphold the summary nature of eviction proceedings. E.g., Eagan East Ltd. P’ship v. Powers Investigations, Inc., 554 N.W.2d 621, 622 (Minn.App.1996) (reversing decisions the court made on. issues outside the limited scope of the proceeding). This process reinforces the public policy behind having summary proceedings, which is “to prevent parties from taking the law into their own hands.” Mutual Trust Life Ins. Co. v. Berg, 187 Minn. 503, 505, 246 N.W. 9, 10 (1932). See generally Comment, Landlord-Tenant Law: Abolition of Self-Help in Minnesota, 63 Minn. L.Rev. 723 (1979).

We confine our decision to the title-related counterclaims and defenses presented by this appeal and affirm the district court’s dismissal of those counterclaims. But we order that the court’s stay of the writ of restitution be continued for a reasonable period of time in which appellants can assert, and the district court can determine in their pending proceeding, whether their right of possession should be protected by enjoining the writ until the court rules, on their title claims.

DECISION

The district court properly dismissed the counterclaims.

Affirmed.

      . Al oral argument, appellants stated there was only one issue on appeal, but they argued in their brief that the district court erred in granting summary judgment sua sponte. . A court may, sua sponte, grant summary judgment if under the same circumstances it would grant a party's motion for summary judgment. Del Hayes & Sons, Inc. v. Mitchell, 304 Minn. 275, 280, 230 N.W.2d 588, 591-92 (1975). To the extent appellants continue to contest this issue, the district court did not err in granting summary judgment on its own motion.

      . Albright v. Henry, 285 Minn. 452, 459-60, 174 N.W.2d 106, 110 (1970) (construing the municipal-court statute and finding that municipal courts must transfer an unlawful de-tainer case to the district court when an equitable defense is asserted because the court has no jurisdiction to hear the equitable defense); Leader v. Joyce, 271 Minn. 9, 12, 135 N.W.2d 34, 37 (1965) (providing that an unlawful detainer action becomes an ejectment action when it is transferred from the municipal court to the district court).