text:
    2005 ND 68
    Dennis N. STRAND, an individual, on behalf of himself and all others similarly situated, Plaintiff v. U.S. BANK NATIONAL ASSOCIATION ND, and Does 1 through 10, inclusive, Defendants.
    No. 20040068.
    Supreme Court of North Dakota.
    March 31, 2005.
    Rehearing Denied April 29, 2005.

      Brian R. Strange (argued), Strange & Carpenter, Los Angeles, CA, and Dennis E. Johnson (appeared), Johnson & Sun-deen, Watford City, N.D., for plaintiff.
    James R. McGuire (argued), and Wendy M. Garbers (appeared), Morrison & Foer-ster, San Francisco, CA, Sarah Andrews Herman (on brief), and Todd^Ervin Zimmerman (on brief), Dorsey Whitney, Fargo, N.D., for defendants.
    Jerome C. Kettleson, Pearce & Durick, Bismarck, N.D., Christopher R. Lipsett, Wilmer Cutler Pickering Hale and Dorr, LLP, New York, NY, and Daniel H. Squire and Stephen R. Heifetz, Washington, DC, for amici curiae American Bankers Association and North Dakota Bankers Association; submitted on brief.
   KAPSNER, Justice.

[¶ 1] Invoking N.D.R.App.P. 47, the United States District Court for the Central District of California has certified the following questions to this Court:

1) Is a “no class action” provision in an arbitration agreement unconscionable under North Dakota contract law?
2) If yes, is the remainder of the arbitration agreement enforceable?

We conclude that, under the facts presented in the order certifying the questions, the no class action provision in the arbitration agreement is not unconscionable under North Dakota law.

I

[¶ 2] Dennis Strand, a resident of Oregon, was issued a credit card by U.S. Bank, National Association ND (“the Bank”). The credit card agreement states that it is governed by North Dakota law. In October 2001, the agreement between the parties was amended, including addition of a new provision for arbitration of disputes arising from the credit card agreement. That provision states, in pertinent part:

By requesting an Account from us and accepting this Agreement, you agree that if a dispute of any kind arises out of this Agreement, either you or we can choose to have that dispute resolved by binding arbitration. If arbitration is chosen by any party, neither you nor we will have the right to litigate that claim in court or to have a jury trial on that claim, or to engage in pre-arbitration discovery, except as provided for in the arbitration rules. In addition, you will not have the right to participate as a representative or member of any class of, claimants pertaining to any claim subject to arbitration....
Any claim, dispute or controversy (whether in contract, regulatory, tort, or otherwise,'whether pre-existing, present or future and including constitutional, statutory, common law, intentional tort and equitable claims) arising from or relating to (a) the credit offered or provided to you, (b) the actions of you, us or third parties or (c) the validity of this arbitration provision (individually and collectively, “Claim”) must, after an election by you or us, be resolved by binding arbitration in accordance with this arbitration provision and the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) in effect when the Claim is filed.... There shall be no authority for any Claims to be arbitrated on a class action basis. An arbitration can only decide our or your Claim and may not consolidate or join the claims of other persons who may have similar claims.... This arbitration provision shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 through 16.

[¶ 3] In February 2002, Strand brought an action against the Bank, on behalf of himself and all others similarly situated, in the United States District Court for the Central District of California. Strand contends he and other cardholders were wrongly charged excess finance charges and late fees as a result of the Bank’s failure to credit payments on the dates they were received. Strand further argues that the “no class action” provision in the credit card agreement is unconscionable, but is severable from the rest of the arbitration provision, and seeks to proceed with arbitration on a class-wide basis. The federal district court has certified to this Court two questions: Whether a “no class action” provision in an arbitration agreement is unconscionable under North Dakota contract law and, if so, whether the remainder of the arbitration agreement is enforceable.

II

[¶ 4] Unconscionability is a doctrine which allows courts to deny enforcement of a contract because of procedural abuses arising out of the contract’s formation and substantive abuses relating to the terms of the contract. Weber v. Weber, 1999 ND 11, ¶ 11, 589 N.W.2d 358. This Court has summarized the determination to be made by the trial court in assessing whether contractual provisions are unconscionable:

The court is to look at the contract from the perspective of the time it was entered into, without the benefit of hindsight. The determination to be made is whether, under the circumstances presented in the particular commercial setting, the terms of the agreement are so one-sided as to be unconscionable. The principle underlying the Code’s uncon-scionability provisions is the prevention of oppression and unfair surprise.

Construction Assocs., Inc. v. Fargo Water Equip. Co., 446 N.W.2d 237, 241 (N.D.1989) (citations omitted).

[¶ 5] The determination whether a particular contractual provision is unconscionable is a question of law for the court. Knutson v. Knutson, 2002 ND 29, ¶ 16, 639 N.W.2d 495; Terry v. Terry, 2002 ND 2, ¶ 14, 638 N.W.2d 11; Cook v. Hansen, 499 N.W.2d 94, 99 (N.D.1993); Construction Assocs., 446 N.W.2d at 241. This Court has recognized, however, that the determination of unconscionability is dependent upon the factual circumstances of the case. See Knutson, at ¶ 16; Terry, at ¶ 14; Cook, at 99. Because the determination of unconscionability is fact specific, courts must “consider such claims on a case-by-case basis,” Forsythe v. BancBoston Mortgage Corp., 135 F.3d 1069, 1074 (6th Cir.1997), and assess the totality of the circumstances. 17 C.J.S. Contracts ¶ 4 (1999).

[¶ 6] The parties have framed and argued the first certified question as though the determination of unconscionability of a “no class action” clause in an arbitration agreement can be made as a matter of law. Strand argues such clauses will always be unconscionable, and the Bank argues such clauses are authorized by law and would never be unconscionable. Because under North Dakota law the determination of unconscionability is fact specific, we are unable to say that all “no class action” clauses are unconscionable, or that all such clauses are not unconscionable. Our response to the first certified question in this case is necessarily limited to the factual situation set out in the order of certification and accompanying documents.

A

[¶ 7] In assessing unconscionability, the court is to employ “a two-pronged framework: procedural unconscionability, which encompasses factors relating to unfair surprise, oppression, and inequality of bargaining power, and substantive uncon-scionability, which focuses upon the harshness or one-sidedness of the contractual provision in question.” Construction Assocs., 446 N.W.2d at 241. Before assessing procedural and substantive unconscionability, we must first address Strand’s contention that under North Dakota law a party alleging unconscionability need establish only one of the two prongs, and need not demonstrate both procedural and substantive unconscionability to support a showing that the contractual provision is unenforceable. In support of his argument, Strand relies upon the definition of unconsciona-bility quoted in Weber, 1999 ND 11, ¶ 11, 589 N.W.2d 358:

Unconscionability is a doctrine by which courts may deny enforcement of a contract “because of procedural abuses arising out of the contract formation, or because of substantive abuses relating to terms of the contract.” Black’s Law Dictionary, 6th Ed., 1524.

Strand claims the use of the disjunctive conjunction “or” indicates that a showing of either procedural or substantive uncon-scionability will suffice.

[¶ 8] Strand reads too much into the use of the word “or” in the quoted language. There was no issue raised in Weber about the necessity of showing both procedural and substantive unconscionability. The language quoted was merely a general description of the doctrine of un-conscionability. In Construction Assocs., however, we impliedly held that some measure of both procedural and substantive unconscionability must be shown to allow a court to refuse to enforce the unconscionable provisions. See Construction Assocs., 446 N.W.2d at 242-44 (separately addressing both procedural and substantive un-conscionability in affirming the trial court’s refusal to enforce certain contract provisions).

[¶ 9] Courts in other jurisdictions have reached varying results on this issue. Some courts hold that a showing of either procedural or substantive unconscionability is sufficient to invalidate a contract. See Luna v. Household Fin. Corp. III, 236 F.Supp.2d 1166, 1174 (W.D.Wash.2002). Other courts have held that procedural unconscionability by itself is not enough, but substantive unconscionability by itself may be. See Maxwell v. Fidelity Fin. Servs., Inc., 184 Ariz. 82, 907 P.2d 51, 58-60 (1995); see also Gillman v. Chase Manhattan Bank, NA 73 N.Y.2d 1, 537 N.Y.S.2d 787, 534 N.E.2d 824, 828-29 (1988) (noting that a “determination of un-conscionability generally requires a showing that the contract was both procedurally and substantively unconscionable when made,” but recognizing that “there have been exceptional cases where a provision of the contract is so outrageous as to warrant holding it unenforceable on the ground of substantive unconscionability alone”). The majority of courts, however, have held that a showing of some measure of both procedural and substantive uncon-scionability is required, and courts are to employ a balancing test looking at the totality of the circumstances to determine whether a particular provision is unconscionable and unenforceable. See Rous-salis v. Wyoming Med. Ctr., Inc., 4 P.3d 209, 246 (Wyo.2000) (“most courts require a quantum of both and take a balancing approach in applying them”); 1 James J. White & Robert S. Summers, Uniform Commercial Code § 4-7 (4th ed. 1995) (“Most courts take a “balancing approach” to the unconscionability question, and to tip the scales in favor of unconscionability, most courts seem to require a certain quantum of procedural, plus a certain quantum of substantive, unconscionability”).

[¶ 10] One leading commentator has summarized:

The concept of unconscionability was meant to counteract two generic forms of abuses: the first of which relates to procedural deficiencies in the contract formation process, such as deception or a refusal to bargain over contract terms, today often analyzed in terms of whether the imposed-upon party had meaningful choice about whether and how to enter into the transaction; and the second of which relates to the substantive contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, fine-print terms or provisions that seek to negate the reasonable expectations of the nondrafting party, or unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction.
It has been said that this formulation requires a showing that the contract was both procedurally and substantively unconscionable when made. It has often been suggested that a finding of a procedural abuse, inherent in the formation process, must be coupled as well with a substantive abuse, such as an unfair or unreasonably harsh contractual term which benefits the drafting party at the other party’s expense. Another way of viewing this problem is that the fact that a contract is one of adhesion does not itself render the contract unconscionable. The distinction between procedural and substantive abuses, however, may become quite blurred; overwhelming bargaining strength or use of fine print or incomprehensible legalese may reflect procedural unfairness in that it takes advantage of or surprises the victim of the clause, yet the terms contained in the resulting contract — whether in fíne print or legal “gobbledygook” — would hardly be of concern unless they were substantively harmful to the nondrafting party as well. Thus, the regularity of the bargaining procedure may be of less importance if it results in harsh or unreasonable substantive terms, or substantive unconscionability may be sufficient in itself even though procedural unconscionability is not.

8 Richard A. Lord, Williston on Contracts § 18.10 (4th ed.1998) (footnotes omitted).

[¶ 11] The result urged by Strand would lead to absurd consequences. Strand contends a showing of procedural unconscionability alone will suffice to render a contract unenforceable. Because all adhesion contracts will include the most common indicators of procedural uncon-scionability — disparity of bargaining power, lack of bargaining choice, a preprinted standard form contract, and a “take it or leave it” transaction — all adhesion contracts would be unconscionable and unenforceable. Under Strand’s theory, virtually every consumer transaction would be rendered unenforceable.

[¶ 12] The majority view is in accordance with this Court’s conclusion in Construction Assocs., 446 N.W.2d at 244 (citation omitted):

The concept of unconscionability must necessarily be applied in a flexible manner, taking into consideration all of the facts and circumstances of a particular case. The circumstances of this case demonstrate elements of procedural and substantive unconscionability which, when viewed in totality, adequately support the trial court’s conclusion that the clause limiting remedies and excluding consequential damages was unconscionable under the relevant statutory provisions.

We agree with the majority of courts which have addressed the issue and hold that a party alleging unconscionability must demonstrate some quantum of both procedural and substantive unconseionability, and courts are to balance the various factors, viewed in totality, to determine whether the particular contractual provision is “so one-sided as to be unconscionable.” Construction Assocs., 446 N.W.2d at 241.

B

[¶ 13] Procedural unconsciona-bility focuses upon formation of the contract and fairness of the bargaining process, including factors such as inequality of bargaining power, oppression, and unfair surprise. See Construction Assocs., 446 N.W.2d at 241. Courts are more likely to find unconscionability in consumer transactions than in contracts arising in purely commercial settings involving experienced parties. Id. at 242. Under North Dakota law, a consumer transaction which is essentially a contract of adhesion will be examined by the courts with special scrutiny to assure that it is not applied in an unfair or unconscionable manner against the party who did not participate in its drafting. Martin v. Allianz Life Ins. Co., 1998 ND 8, ¶ 16, 573 N.W.2d 823; Farmers Union Grain Terminal Ass’n v. Nelson, 223 N.W.2d 494, 497 (N.D.1974). An adhesion contract is one drafted by experts in the subject matter of the contract and offered on a “take it or leave it” basis. Continental Cas. Co. v. Kinsey, 499 N.W.2d 574, 579 (N.D.1993). In Black’s Law Dictionary 342 (8th ed.2004), an “adhesion contract” is defined as:

A standard-form contract prepared by one party, to be signed by the party in a weaker position, usu. a consumer, who adheres to the contract with little choice about the terms.

[¶ 14] The transaction at issue in this case carries the classic hallmarks of procedural unconscionability — inequality of bargaining power, oppression, surprise, lack of negotiation of terms, a preprinted standard form contract, and a “take it or leave it” transaction. There can be little argument that there is an enormous disparity in bargaining power between the Bank and Strand. The transaction produced a pure adhesion contract — the contract was drafted by the Bank, which had superior knowledge of and expertise in credit transactions; it was a preprinted standard form contract, with no possibility of negotiation of its terms; and it was offered to Strand on a “take it or leave it” basis. The contract with the amendments to the parties’ credit card agreement, including the new arbitration provision, was sent to Strand as a “bill stuffer” with his monthly billing statement. The cardholder was required to notify the Bank in writing within 25 days if he did not accept the new provisions, and his account would then be closed. The arbitration clause at issue in this case was included on page fourteen of the sixteen page “bill stuffer” sent with Strand’s monthly statement. In Construction Assocs., 446 N.W.2d at 242-43, we concluded that procedural uncon-scionability had been established, even in a commercial setting, where there was a substantial inequality of bargaining power, a preprinted form contract was used, there was no allowance for bargaining or negotiation of contract provisions, there were elements of unfair surprise, and there was an actual lack of negotiation of contract terms.

[¶ 15] When one party is in such a superior bargaining position that it totally dictates all terms of the contract and the only option presented to the other party is to take it or leave it, some quantum of procedural unconscionability is established. The party who drafts such a contract of adhesion bears the responsibility of assuring that the provisions of the contract are not so one-sided as to be unconscionable. See Construction Assocs., 446 N.W.2d at 241.

[¶ 16] The Bank argues there can be no procedural unconscionability in this case because the Bank complied with N.D.C.C. § 51-14-02 when it amended the credit card agreement. Section 51-14-02, N.D.C.C., creates certain requirements when a revolving charge agreement is amended:

Upon written notice, a seller may change the terms of any revolving charge agreement, including the credit service charge, if this right of amendment has been reserved. A change under this authority is effective as to existing balances, if within twenty-five days of the effective date of the change, the buyer does not furnish written notice to the seller that the buyer does not agree to abide by the changes. Upon receipt of this written notice by the seller, the buyer has the remainder of the time under the existing terms in which to pay all sums owed to the seller. Any request for additional credit under a revolving charge agreement, including use of a credit card issued under the agreement, after the effective date of the change of terms, including a change in the credit service charge, is deemed to be an acceptance of the new terms, even though the twenty-five days has not expired.

The statute does not specifically authorize wholesale amendment of a credit card agreement by a sixteen-page bill stuffer, nor does it say all amendments to agreements complying with the statutory procedure are necessarily valid and enforceable. The statute merely clarifies that amendment by written notice is allowed, and sets out the procedures for acceptance or rejection which must be abided with or the transaction will be unlawful. The statute does not address unconscionability, nor does it give credit card companies carte blanche to impose upon cardholders whatever terms they desire, regardless of how unfair, one-sided, or oppressive they may be.

[¶ 17] Other courts considering similar arguments, that a finding of procedural unconscionability is precluded if the procedure employed was authorized by a statute, have concluded that the agreements are still subject to unconscionability analysis. See Shea v. Household Bank (SB), Nat'l Ass’n, 105 Cal.App.4th 85, 129 Cal. Rptr.2d 387, 390-91 (2003); Schmaltz v. Nissen, 431 N.W.2d 657, 662 (S.D.1988). Under the Bank’s theory it could use a bill stuffer to make any amendments it desired to the credit card agreement, including adding wholly new provisions which are substantively unconscionable, and although the Bank could not have enforced such provisions had they been included in the original agreement, they would now be insulated from unconscionability analysis by the statute. We refuse to sanction an interpretation of the statute and our law of unconscionability that would lead to such an absurd result.

[¶ 18] We conclude the transaction in this case was procedurally unconscionable.

C

[¶ 19] The gravamen of Strand’s claim that the “no class action” provision is substantively unconscionable is his assertion that he will be left without an effective remedy for the Bank’s alleged wrongful conduct if the clause is enforced. Strand argues that, because his and other cardholders’ individual damages are small, it is impractical to bring separate, individual arbitration proceedings for each claim, and no attorney will be willing to litigate such claims.

[¶ 20] Substantive unconscionability focuses upon the harshness or one-sidedness of the contractual provision in question. Construction Assocs., 446 N.W.2d at 241. In Construction Assocs., at 243-44, this Court held that contractual provisions which limited or excluded the substantive remedies otherwise available at law and left the plaintiff without an effective remedy were substantively unconscionable.

[¶ 21] Merely restricting the availability of a class action is not, by itself, a restriction on substantive remedies. The right to bring an action as a class action is purely a procedural right. Blaz v. Belfer, 368 F.3d 501, 504-05 (5th Cir.2004); Johnson v. West Suburban Bank, 225 F.3d 366, 369 (3d Cir.2000). A class action is not a substantive remedy. Blaz, at 505; Johnson, at 369. Thus, limitation of use of a class action or class arbitration does not prohibit any substantive remedy that would otherwise be available to Strand. The arbitration agreement between the parties specifically requires that the arbitrator “apply applicable substantive law.” All substantive remedies available to Strand in a judicial action, including an award of attorney fees, would be available in arbitration.

[¶ 22] Strand argues that no attorney will be willing to litigate these small claims bn an individual basis, and that enforcement of the “no class action” provision would leave him and other cardholders without an effective remedy. Strand points to no empirical evidence that all attorneys would be unwilling to litigate these claims. Strand’s attorney filed an affidavit stating that he would not accept individual cases involving the amounts at issue here. That is not, however, evidence that no attorney would be willing to accept such cases, particularly where attorney fees are available for prevailing plaintiffs. We recognize that, due to the procedural posture of this case, there was a limited record on this issue and no full-blown evi-dentiary hearing was held. In answering the certified questions, however, we may consider only the facts as stated in the order of certification and accompanying documents.

[¶ 23] Nor has Strand established that he will be left without an effective remedy if the “no class action” provision is enforced. The arbitration provision here requires that the arbitration take place in Strand’s home jurisdiction and provides for advancement of fees and costs by the Bank. Furthermore, if Strand prevails in his claim against the Bank he will be entitled to an award of attorney fees. In Construction Assocs., the parties’ agreement excluded the weaker party’s substantive remedies otherwise available at law, and the “remedy” available under the contract, replacement of the defective product, was “useless” and “amount[ed] to nothing whatsoever.” Construction Assocs., 446 N.W.2d at 244. Strand, however, retains all substantive remedies he would otherwise have without the “no class action” provision. Although the unavailability of a class action or class arbitration may make recovery of damages less convenient for the purported class as a whole, under the facts of this case the arbitration provision between Strand and the Bank creates a chance that Strand can be made whole through individual arbitration.

[¶ 24] Unlike the plaintiff in Construction Assocs., the facts certified to us have failed to show that enforcement of the disputed contractual provision would leave Strand without an effective remedy. We therefore conclude Strand has failed to demonstrate that the “no class action” provision is substantively unconscionable.

D

[¶ 25] Because a showing of both procedural and substantive unconscionability is required to declare a contractual provision unconscionable and unenforceable, we conclude that, under the facts of this case, the “no class action” provision is not unconscionable. The answer to the first certified question is “no.”

Ill

[¶ 26] The federal district court made resolution of the second certified question, relating to severability of the “no class action” clause, contingent on our resolution of the first question. The second question needed to be answered only if we first determined that the “no class action” provision was unconscionable. Because we have determined the “no class action” provision is not unconscionable, we need not address the second certified question.

[¶ 27] GERALD W. VANDE WALLE, C.J., WILLIAM F. HODNY, S.J., BENNY A. GRAFF, S.J., and ROBERT 0. WEFALD, D.J., concur.

[¶ 28] The Honorable BENNY A. GRAFF, Surrogate Judge, the Honorable WILLIAM F. HODNY, Surrogate Judge, and the Honorable ROBERT 0. WEFALD, D.J., sitting in place of NEUMANN, MARING, and SANDSTROM, JJ., disqualified.


source: Caselaw Access Project

author: VANDE WALLE, Chief Justice.

license: Public Domain

text:
    2005 ND 61
    CITY OF HORACE, a political subdivision of the State of North Dakota, Plaintiff and Appellee v. The CITY OF FARGO, a political subdivision of the State of North Dakota, acting by and through its CITY COMMISSION and its Mayor, Bruce W. Furness, Defendant and Appellant.
    No. 20040219.
    Supreme Court of North Dakota.
    March 23, 2005.
    Rehearing Denied April 26, 2005.

      Steven E. McCullough (argued) and Sean M. Fredricks (on brief), Ohnstad Twichell, West Fargo, N.D., for plaintiff and appellee.
    Erik R. Johnson, Assistant City Attorney, Fargo, N.D., for defendant and appellant.
   VANDE WALLE, Chief Justice.

[¶ 1] The City of Fargo appealed from a judgment granting the City of Horace’s application for a writ of certiorari to void Fargo’s annexation proceedings for land in Barnes .and Stanley Townships in Cass County, and to allow Horace’s annexation proceeding for land in Stanley Township to continue. We conclude Fargo’s annexation proceeding for land in Barnes Township was not totally void, and Fargo’s annexation proceeding for land in Stanley Township, which was contiguous to the Barnes Township land, was first in time as to Horace’s annexation proceeding for the same land. We reverse and remand.

I

[¶ 2] This appeal involves the interrelationship of annexation proceedings by Fargo, West Fargo, and Horace. On August 19, 2002, Fargo enacted a resolution to annex a tract of land comprising 2,359 acres within its extraterritorial jurisdiction in> 'Barnes Township. After determining there were insufficient protests to that annexation, Fargo recorded the resolution and an annexation plat of the land with the Cass County Recorder on October 2, 2002.

[¶ 3] Meanwhile, before Fargo commenced that annexation proceeding, the City of West Fargo had commenced an annexation proceeding for part of the same Barnes Township land. Because the land West Fargo sought to annex was within Fargo’s extraterritorial jurisdiction and Fargo protested West Fargo’s annexation, West Fargo submitted its annexation proceeding to mediation under N.D.C.C. § 40-51.2-07.1. West Fargo also sued Fargo to determine which entity had jurisdiction to annex the land that was subject to both the West Fargo and the Fargo annexation proceedings, which they referred to as the “disputed land.” In that lawsuit, West Fargo did not claim any interest in the other land described in Fargo’s August 2002 annexation proceeding, and West Fargo and Fargo referred to that other land as the “undisputed land.” West Fargo alleged its annexation proceeding for the disputed land was first in time, and it had the right to proceed first with its annexation of that land.

[¶ 4] A district court judge ruled Fargo’s attempted annexation of the disputed land was invalid because West Fargo’s annexation proceeding was first in time, and West Fargo had exclusive jurisdiction to complete its annexation proceeding for the disputed land, subject to Fargo’s rights to protest the annexation, to have the matter submitted to mediation, and to petition for an administrative law judge to decide the matter. See N.D.C.C. §§ 40-51.2-07, 40-51.2-07.1, and 40-51.2-08. Certified copies of a writ of certiorari and a judgment were recorded on October 23, 2002, with the Cass County Recorder as document number 1032141, and a handwritten notation was entered on Fargo’s annexation plat that had been recorded on October 2, 2002, stating “See Writ and Judgment Recorded as Document No. 1032141.” Fargo appealed that district court judgment to this Court, but the appeal was dismissed by stipulation after West Fargo and Fargo reached an agreement through mediation under N.D.C.C. § 40-51.2-07.1. Fargo and West Fargo agreed that West Fargo would be allowed to complete its annexation proceeding for the disputed land, and that, except for the disputed land, Fargo would be allowed to annex any area south of 40th Avenue South, which included part of the undisputed land.

[¶ 5] On January 20, 2003, Fargo commenced a proceeding by resolution to annex all of sections 5 and 6 in Stanley Township, which was in Fargo’s extraterritorial jurisdiction and was contiguous to the undisputed land described in Fargo’s August 2002 annexation proceeding. Thereafter, landowners in sections 5 and 6 in Stanley Township petitioned Horace, seeking to have an area within sections 5 and 6 annexed to Horace. On March 3, 2003, Horace held a first reading of an ordinance to annex the petitioned land in sections 5 and 6, and also passed a resolution holding its annexation proceeding in abeyance until Fargo’s January 2003 annexation proceeding was concluded. Some of the landowners who filed petitions with Horace protested Fargo’s annexation of sections 5 and 6, and on November 24, 2003, Fargo determined the protests were sufficient to require submission of its January 2003 annexation proceeding to mediation. On November 25, 2003, Horace reversed its March 3, 2003 decision to hold its annexation proceeding in abeyance. Horace passed a resolution stating it had been under a mistaken impression that Fargo had validly commenced its January 2003 annexation proceeding for the Stanley Township land before Horace had commenced its annexation proceeding for that land, but Horace now believed Fargo’s January 2003 annexation proceeding was not valid because that land was not contiguous to Fargo.

[¶ 6] Horace sued Fargo, seeking a determination that Horace had exclusive jurisdiction to annex the Stanley Township land. Horace alternatively sought to prohibit Fargo from annexing the Stanley Township land unless Horace’s annexation proceeding for that land was completed, or to obtain a declaration that Fargo’s annexation of that land was invalid because it was not contiguous to Fargo.

[¶ 7] The trial court concluded Fargo’s August 2002 annexation proceeding was “void in toto” because Fargo lacked jurisdiction to annex the disputed land. The court decided Fargo’s August 2002 annexation procedure did not substantially comply with annexation statutes, concluding Fargo’s annexation plat, with the subsequent notation to the writ and judgment, was not an accurate map and was inadequate to provide notice of the land that Fargo had annexed because that plat did not refer to the subsequent mediation agreement. The court concluded Fargo was not entitled to de facto annexation of the undisputed land involved in its August 2002 annexation proceeding, because Fargo’s notice of the land it had annexed was not in colorable compliance with annexation law. The court also decided Horace’s lawsuit was not barred by laches or estoppel. The court granted Horace’s application for writ of certiorari and declared Fargo’s August 2002 and January 2003 annexation proceedings void.

II

[¶ 8] Fargo argues its August 2002 annexation proceeding for the undisputed land was valid, because Fargo and West Fargo agreed Fargo was entitled to annex the undisputed land and the prior district court judgment only invalidated the annexation of the disputed land. Fargo argues the annexation plat filed with the Cass County Recorder on October 2, 2002, with the subsequent notation to the writ and the judgment, constituted an “accurate map” under N.D.C.C. § 40-51.2-07(3) for the annexation of the undisputed land. Fargo argues that, because the undisputed land is contiguous to the Stanley Township land that is the subject of Fargo’s January 2003 annexation proceeding, Fargo’s January 2003 annexation proceeding is first in time as to Horace’s March 2003 proceeding. Horace responds Fargo failed to file an “accurate map” under N.D.C.C. § 40-51.2-07 in its August 2002 annexation proceeding, and that proceeding was totally void under the “all or nothing” rule. Horace thus argues the Stanley Township land is not contiguous to Fargo, and Horace’s March 2003 annexation of the Stanley Township land is first in time.

[¶ 9] The issues raised in this appeal require us to consider, for the first time, the “all or nothing” rule and whether or not to apply it to Fargo’s August 2002 annexation proceeding, which, in turn, involves the interpretation of our annexation statutes. The trial court applied the “all or nothing” rule and concluded Fargo’s August 2002 annexation proceeding was “void in toto” because part of that proceeding had been declared invalid by the prior district court judgment. The rationale for the “all or nothing” rule is that annexations are legislative functions, and a municipality’s legislative act in annexing a single tract of land must stand or fall as a whole. Board of County Comm’rs v. Junction City, 233 Kan. 947, 667 P.2d 868, 872-75 (1983); Texas ex rel. American Mfg. Co. v. Fort Worth, 314 S.W.2d 335, 337 (Tex.Civ.App.1958). Under the “all or nothing” rule, courts may not draw boundaries to correct errors in annexations of a single tract of land, because the designation of a boundary is purely a legislative function which can neither be performed by, nor delegated to, the judiciary. Junction City, at 873; Fort Worth, at 337. See City of Carrington v. Foster County, 166 N.W.2d 377, 385 (N.D.1969) (holding annexation statutes imposed nonjudicial duties upon district courts and violated separation of powers principle implicit in state constitution). For reasons hereinafter stated, we conclude our annexation statutes do not support application of the “all or nothing” rule in this case.

[¶ 10] The interpretation of a statute is a question of law, fully reviewable by this Court. Narum v. Faxx Foods, Inc., 1999 ND 45, ¶ 18, 590 N.W.2d 454. The primary objective of statutory construction is to ascertain the Legislature’s intent. Frey v. City of Jamestown, 548 N.W.2d 784, 788 (N.D.1996). The Legislature’s intent must be sought initially from the words used in the statute, giving them their ordinary, plain language meaning. Id. We construe statutes as a whole, with each provision harmonized, if possible. Id.

[¶ 11] The Municipal Annexation Act of 1969, N.D.C.C. ch. 40-51.2, outlines the statutory procedures for a municipality to annex land and was enacted in response to City of Carrington, 166 N.W.2d at 385, which held that the delegation of annexation decisions to district courts violated the separation of powers implicit in our state constitution. See Hearing on H.B. 496 before the Political Subdivisions Committee, 41st N.D. Legis. Sess. (March 11, 1969) (testimony of Scott Anderson, Fargo City Attorney). The 1969 legislation provided that if there were sufficient protests to an annexation resolution, the municipality could petition the attorney general to constitute an annexation review commission to hear and decide the matter. 1969 N.D. Sess. Laws ch. 381, §§ 8 through 16. See Frey, 548 N.W.2d at 788. The 1969 legislation also explicitly authorized liberal construction of the Municipal Annexation Act to encourage the natural and well-ordered development of municipalities, to extend municipal government to areas which form a part of the whole community, to simplify government structure in urban areas, and to recognize the interrelationship and interdependence between a municipal corporation and a contiguous area. 1969 N.D. Sess. Laws ch. 381, § 2 (currently codified at N.D.C.C. § 40-51.2-02).

[¶ 12] The Municipal Annexation Act authorizes two equivalent, but separate and distinct methods for annexation. Frey, 548 N.W.2d at 788-89. One method authorizes owners or electors with property contiguous to a municipality to begin an annexation proceeding by presenting an annexation petition to the municipality. Id. at 788. See N.D.C.C. §§ 40-51.2-03 through 40-51.2-06. The second method permits a municipality to begin an annexation proceeding by adopting a resolution to annex contiguous land. Frey, at 788. See N.D.C.C. § 40-51.2-07.

[¶ 13] Under N.D.C.C. § 40-51.2-03, owners or electors of land contiguous to a municipality may petition a municipality to annex land. If the land petitioned for annexation lies within the extraterritorial zoning or subdivision regulation of another city, the petitioned city must notify the other city of the time and place for consideration of the petition, and if the other city does not consent to the annexation, the petitioned city must stop the annexation or submit the matter to mediation. N.D.C.C. § 40-51.2-05. If the petitioned city annexes the area, it must do so by ordinance, and the annexation becomes effective when a copy of the ordinance and an accurate map of the annexed area, certified by the executive officer of the city, are filed and recorded with the county recorder. N.D.C.C. § 40-51.2-06.

[IT 14] Section 40-51.2-07, N.D.C.C., authorizes a municipality to begin an annexation proceeding by adopting a resolution to annex contiguous land and provides:

The governing body of any city may adopt a resolution to annex contiguous or adjacent territory as follows:
1. The governing body of the city shall adopt a resolution describing the property to be annexed.
2. The governing body of the city shall publish the resolution and a notice of the time and place the governing body will meet to hear and determine the sufficiency of any written protests against the proposed annexation in the official newspaper once each week for two consecutive weeks. The governing body of the city shall mail a notice to the owner of each parcel of real property within the area to be annexed at the person’s last-known mailing address. The notice must inform landowners of the resolution, the time and place of hearing, and the requirement that protests must be filed in writing. The owners of any real property within the territory proposed to be annexed within thirty days of the first publication of the resolution may file written protests with the city auditor protesting against the proposed annexation. No state-owned property may be annexed without the written consent of the state agency or department having control of the property. The governing body of the city, at its next meeting after the expiration of the time for filing the protests, shall hear and determine the sufficiency of the protests.
3. In the absence of protests filed by the owners of more than one-fourth of the territory proposed to be annexed as of the date of the adoption of the resolution, the territory described in the resolution becomes a part of the city. When a copy of the resolution and an accurate map of the annexed area, certified by the executive officer of the city, are filed and recorded with the county recorder, the annexation becomes effective. Annexation is effective for the purpose of general taxation on and after the first day of the next February. However, the city shall continue to classify as agricultural lands for tax purposes all lands in the annexed area which were classified as agricultural lands immediately before the annexation proceedings until those lands are put to another use.
If the owners of one-fourth or more of the territory proposed to be annexed protest, or if a city that has extraterritorial zoning or subdivision regulation authority over the area petitioned to be annexed protests, the city may either stop its pursuit of the annexation or submit the matter to a committee for mediation as provided in section 40-51.2-07.1.

[¶ 15] In 1997, the Legislature amended the Municipal Annexation Act to authorize the governing bodies of cities to enter written annexation agreements regarding the annexation of property located within the extraterritorial zoning or subdivision regulation authority of the cities. See 1997 N.D. Sess. Laws ch. 357, §§ 1 and 2; N.D.C.C. §§ 40-51.2-02.1 and 40-51.2-02.2. The 1997 amendments repealed the provisions authorizing the attorney general to constitute an annexation review commission and created a procedure for mediation of annexation disputes, and, if requested, resolution by an administrative law judge. 1997 N.D. Sess. Laws ch. 357, §§ 6 through 14. See N.D.C.C. §§ 40-51.2-07.1 through 40-51.2-16. The provision for mediation contemplates agreement by all parties, or a determination by the mediator that continued mediation is no longer worthwhile. N.D.C.C. § 40-51.2-07.1. If a city involved in an annexation dispute is not satisfied with the result of mediation, the city may petition the office of administrative hearings to hear the matter, and if the annexation was initiated by resolution under N.D.C.C. § 40-51.2-07, the petition must include an accurate map of the areas sought to be annexed, a description of the area, and the reasons for the annexation. N.D.C.C. § 40-51.2-08. If an administrative law judge renders an annexation decision, N.D.C.C. § 40-51.2-16 provides the land is annexed as of the date of the administrative law judge’s order, and a copy of the resolution with an accurate map of the annexed area, certified by the executive officer of the city, must be filed and recorded with the county recorder. A party dissatisfied with the decision of an administrative law judge may apply to the district court for a writ of certiorari. N.D.C.C. § 40-51.2-15.

[¶ 16] In Fargo’s August 2002 annexation proceeding, a resolution and annexation plat were filed by Fargo on October 2, 2002, with a subsequent notation to the writ and judgment in West Fargo’s lawsuit against Fargo. Fargo had complied with the statutory requirements for its annexation by resolution when it filed the plat. However, West Fargo’s annexation of some of the same land was pending on October 2, 2002, and because that land was in Fargo’s extraterritorial jurisdiction, Fargo protested West Fargo’s annexation and West Fargo submitted its annexation proceeding to mediation under N.D.C.C. § 40-51.2-07.1. West Fargo also sued Fargo to determine which entity had jurisdiction to annex the disputed land. The court ruled West Fargo was first in time and had jurisdiction to complete annexation of the disputed land, subject to Fargo’s right to mediation. The court decided Fargo’s annexation of the disputed land was invalid, and the judgment, which referred to Fargo’s right to mediation, was noted on Fargo’s annexation plat filed on October 2, 2002. Fargo and West Fargo subsequently reached a mediation agreement consistent with the court’s decision. Horace’s argument would require Fargo to start its annexation proceeding over. However, our annexation statutes do not require that result when an annexation dispute has been resolved by mediation, and do not specifically require filing a map if a mediation agreement resolves an annexation dispute. Significantly, a map must be filed if the matter is decided by an administrative law judge. See N.D.C.C. § 40-51.2-16. However, this dispute was not decided by an administrative law judge, and the parties reached a mediation agreement that was consistent with the prior district court decision that was noted on the recorded annexation plat. The parties’ mediation agreement effectively divided Fargo’s August 2002 annexation proceeding into two separate tracts of land, the disputed land and the undisputed land. Because the parties’ mediation agreement effectively divided Fargo’s August 2002 annexation proceeding into two tracts of land, we conclude the provisions for mediation of annexation disputes used in this case militate against the application of the “all or nothing” rule, which is based on the rationale that courts may not draw boundaries to correct errors in annexations of a single tract of land. Junction City, 667 P.2d at 873; Fort Worth, 314 S.W.2d at 337. Although Horace argues it was happenstance that the results of mediation were the same as the court’s decision, it is undisputed the mediation agreement was consistent with the judgment noted on the annexation plat.

[¶ 17] We reject Horace’s claim that Red River Valley Brick Co. v. City of Grand Forks, 27 N.D. 8, 145 N.W. 725 (1914), requires application of the “all or nothing” rule to this case. In Red River Valley Brick, Grand Forks had initially enacted a resolution describing land to be annexed and subsequently enacted an amended resolution to annex a smaller tract of land after some land owners protested the original annexation. Id. at 35-36, 145 N.W. at 731. This Court held the amended annexation resolution was invalid because interested parties had no notice of the contemplated annexation of the land in the amended notice and had no opportunity to protest the annexation. Id. at 36-38, 145 N.W. at 731-32. In reaching that conclusion, this Court strictly construed statutory provisions for annexation because they granted cities extraordinary power to annex land contrary to the protests of people whose interests were affected. Id. That case involved the strict interpretation of our annexation statutes and an amendment to an original resolution without providing appropriate notice to interested parties. Here, the contest is between two political subdivisions of the state.

[¶ 18] In Frey, 548 N.W.2d at 789-90, we considered issues about a landowner’s annexation petition, and we rejected an argument that a failure to exactly comply with a notice requirement in N.D.C.C. § 40-51.2-05 invalidated the landowner’s annexation petition. We recognized our annexation statutes required liberal construction to effectuate their purposes. Frey, at 790 (comparing Red River Valley Brick). We concluded a proceeding on a landowner’s annexation petition and zoning amendment was valid although the municipality, rather than the landowner, published a notice of presentation of the petition as required by N.D.C.C. § 40-51.2-05. Frey, at 790. We said the purpose of the notice requirement was to give interested persons a reasonable opportunity to be heard, and there was no claim that notice was not published. Id. We concluded the defect about the entity publishing the notice, as distinguished from a complete absence of notice, did not defeat the purpose of the notice requirement. Id.

[¶ 19] We conclude Fargo’s annexation plat filed on October 2, 2002, with the subsequent notation to the judgment that was consistent with the parties’ mediation agreement, was sufficient to provide notice of the annexation of the undisputed land in Fargo’s August 2002 annexation proceeding. Construing our annexation statutes liberally to effectuate the purpose of encouraging natural and well-ordered development of municipalities, we conclude the annexation plat, with the subsequent notation, constituted an accurate map under N.D.C.C. § 40-51.2-07(3), and we reject the trial court’s conclusion that Fargo’s August 2002 annexation was totally void. Rather, we conclude that Fargo’s annexation of the undisputed land was valid. We therefore conclude Fargo’s January 2003 annexation of the land in Stanley Township, which was contiguous to the undisputed land involved in Fargo’s 2002 annexation, was first in time as to Horace’s March 2003 annexation proceeding, and Fargo is entitled to proceed with its annexation proceeding.

III

[¶ 20] Because of our resolution of this issue, it is not necessary to address Fargo’s arguments about de facto annexation and about Horace’s lack of standing to bring this action.

IV

[¶ 21] We reverse the trial court’s judgment and remand for proceedings consistent with this opinion.

[¶ 22]DALE V. SANDSTROM, CAROL RONNING KAPSNER, and MARY MUEHLEN MARING, JJ., concur.

[¶ 23] The Honorable WILLIAM A. NEUMANN, a member of the Court when this case was heard, resigned effective March 14, 2005, and did not participate in this decision.


text:
    2005 ND 64
    In the Interests of A.M.S., a minor child, by her Natural Guardian, Tina FARTHING; State of North Dakota, by and through the Stutsman County Social Service Board; and Tina Farthing, Plaintiffs and Appellees v. Milton STOPPLEWORTH, Jr., Defendant and Appellant. State of North Dakota, by and through the Stutsman County Social Service Board, and Tina M. Farthing, Plaintiffs and Appellees v. Milton T. Stoppleworth, Jr., Defendant and Appellant.
    Nos. 20040268, 20040269, 20040270.
    Supreme Court of North Dakota.
    March 23, 2005.

      Mark S. Douglas, Jamestown, ND, for plaintiffs and appellees. Submitted on brief.
    Milton T. Stoppleworth, Jr., pro se, Jamestown, ND. Submitted on brief.
   VANDE WALLE, Chief Justice.

[¶ 1] Milton T. Stoppleworth, who is presently incarcerated, appealed from an order denying his motion for a reduction in child support payments. Stoppleworth argues he presented sufficient evidence to demonstrate a lack of ability to pay a child support award based on an imputed, federal-minimum-wage income while imprisoned. We hold that, as a matter of law, an incarcerated child support obligor whose payment amounts are based on an imputed, federal-minimum-wage income cannot reduce these payments by showing a lack of financial resources due to imprisonment. We affirm the district court’s order.

[¶ 2] Stoppleworth is the father of three minor children involved in this suit. Stoppleworth is presently incarcerated for aggravated assault and reckless endangerment stemming from an altercation with another individual. State v. Stoppleworth, 2003 ND 137, ¶¶1-2, 667 N.W.2d 586. Stoppleworth brought a motion to reduce his child support obligation during his imprisonment. According to Stoppleworth’s motion and supporting affidavit, he is currently ordered to pay $300 per month in child support, consisting of $250 per month for current obligations and an additional $50 per month for arrearages. Stopple-worth’s supporting affidavit states these amounts were calculated pursuant to the imputation of a federal-minimum-wage income under N.D. Admin. Code § 75-02-04.1-07. Stoppleworth seeks to reduce his payment to $20 per month.

[¶ 3] The district court determined that Stoppleworth was not entitled to a reduction in child support payments because his incarceration is a result of his bad conduct, and the court would not permit Stopple-worth to be released from his child support obligation when he brought the circumstances of his imprisonment upon himself. Also, the district court held that Stopple-worth failed to provide any calculations that would warrant a child support reduction.

[¶ 4] Stoppleworth argues the district court erred in failing to accept his proffered evidence regarding a lack of financial resources. Stoppleworth points to his motion, reply brief, application to proceed in forma pauperis, supporting affidavit, and certificate of inmate account and assets, all of which he claims support his lack of resources and satisfy his burden of rebutting the presumption that the original child support figure is correct. Stopple-worth also argues the North Dakota child support system must comply with federal provisions that prohibit the use of non-rebuttable presumptions, and he claims he should be allowed to rebut the $300 presumed support amount by showing an inability to pay.

I.

[¶ 5] Child support determinations involve questions of law subject to a de novo standard of review, findings of fact subject to a clearly erroneous standard of review, and may involve matters of discretion subject to an abuse of discretion standard of review. T.E.J. v. T.S., 2004 ND 120, ¶ 4, 681 N.W.2d 444.

[¶ 6] We have previously dealt with the subject of incarcerated child support obli-gors. Most notably, in Sureras v. Matuska, 548 N.W.2d 384 (N.D.1996), we discussed a case where a district court used the pre-incarceration income of an incarcerated obligor for child support purposes. Id. at 385. We held this imputation was incorrect and instead imputed income based on the federal minimum wage. Id. at 388; N.D. Admin. Code § 75-02-04.1-07(3)(a). Specifically, we stated that a minimum-wage imputation “should be applied to an incarcerated obligor ... who has no other income, who apparently is ineligible for work release, and whose earnings in confinement are less than the minimum wage.” Matuska, 548 N.W.2d at 388. Indeed, we punctuated Matuska’s lack of financial ability to satisfy even this lesser obligation, i.e., the obligation based on the minimum wage as opposed to the obligation based on Matuska’s previously higher earnings. Id. at 388 nn. 6-7. We concluded by noting that imputation of a minimum-wage income “to an incarcerated obligor who has no other income appropriately promotes this state’s strong public policy of protecting the best interests of children and preserving parents’ legal and moral obligations to support their children, while recognizing, but not excusing, the obvious difficulty an incarcerated obligor faces in providing for his or her children.” Id. at 389.

[¶ 7] Matuska does not provide incarcerated obligors with a complete reprieve from their child support obligations due to the financial hardships associated with imprisonment. Matuska repeatedly emphasized the defendant’s lack of financial resources capable of satisfying a minimum-wage-based obligation. In this regard, Matuska necessarily stands for the proposition that incarceration, even if it results in a complete lack of financial resources, is alone no justification for a reduction in child support payments below what a minimum-wage earner, or a person without employment, would owe.

[¶ 8] Nonetheless, Stoppleworth argues his incarceration has stripped him of an ability to satisfy his obligations, which, in turn, should justify a reduction in his minimum-wage-based monthly payments. Stoppleworth largely bases his contention on two cases from other jurisdictions, both of which struck down irre-buttable, mandatory-minimum child support awards on federal grounds. In re Marriage of Gilbert, 88 Wash.App. 362, 945 P.2d 238, 241-42 (1997); Rose ex rel. Clancy v. Moody, 83 N.Y.2d 65, 607 N.Y.S.2d 906, 629 N.E.2d 378, 380 (1993).

[¶ 9] We recently discussed these cases in Interest of R.H., 2004 ND 170, ¶ 9, 686 N.W.2d 107, cert. denied, — U.S. -, 125 S.Ct. 1340, 161 L.Ed.2d 141, 2005 WL 406599. In R.H., the incarcerated defendant, Hernandez, was ordered to make child support payments to reimburse the State for services provided to his child. Id. at ¶ 3. The payment amounts were based on the imputation of a minimum-wage income. Id. at ¶¶2-3. We discussed and reaffirmed the appropriateness of imputing a minimum-wage income to an incarcerated obligor. Id. at ¶¶ 5-6. We considered Hernandez’s assertion that federal law prohibits the use of a mandatory minimum child support order. Id. at ¶¶ 7-11. The applicable federal statute regarding the award of child support states:

There shall be a rebuttable presumption, in any judicial or administrative proceeding for the award of child support, that the amount of the award which would result from the application of such guidelines is the correct amount of child support to be awarded. A written finding or specific finding on the record that the application of the guidelines would be unjust or inappropriate in a particular case, as determined under criteria established by the State, shall be sufficient to rebut the presumption in that case.

42 U.S.C. § 667(b)(2); see also 45 C.F.R. § 302.56(f) and (g) (same language).

[¶ 10] The R.H. Court proceeded to discuss Gilbert and Rose in light of the federal law. R.H., at ¶ 9. We held that the decisions in these two cases were inapplicable to North Dakota law, as North Dakota’s child support provisions explicitly provide that any child support amount is rebuttably presumed to be correct. R.H., at ¶ 10 (discussing N.D.C.C. § 14-09-09.7(3) and N.D. Admin. Code §§ 75-02-04.1-13, 75-02-04.1-09). Indeed, the North Dakota Child Support Guidelines, i.e., the “criteria established by the State,” do provide for many situations in which the presumptively correct amount of child support obtained from the Guidelines can be rebutted. N.D. Admin. Code § 75-02-04.1-09. Specifically, N.D. Admin. Code § 75 — 02—04.1—09(2) (j) creates an allowance for situations “over which the obligor has little or no control.” The regulations continue, however, by stating that, “[f]or purposes of subdivision j of subsection 2, a situation over which the obligor has little or no control does not exist if the situation arises out of ... illegal activity.” N.D. Admin. Code § 75-02-04.1-09(5).

[¶ 11] Under the North Dakota Child Support Guidelines, then, illegal activity is not one of the avenues through which a presumptively correct child support award can be entirely rebutted. We do not believe this result conflicts with federal law. Federal law requires a rebut-table presumption, with the criteria for rebuttal established under state law. See 42 U.S.C. § 667(b)(2). The North Dakota Guidelines provide many grounds on which a presumptively correct award can be rebutted. See R.H., at ¶ 10; N.D. Admin. Code § 75-02-04.1-09. That incarcerated obligors are placed outside these protections does not require a finding that 42 U.S.C. § 667(b)(2) has been violated.

[¶ 12] There is a fundamental distinction between the provisions enacted in Washington and New York and North Dakota’s Child Support Guidelines. Washington and New York created mandatory-minimum monthly payment amounts that could not be rebutted by any obligor in any situation. In contrast, North Dakota created rebuttable guidelines that are defined and limited in certain respects. This is not a distinction without a difference. Logically, a child support obligor cannot automatically be allowed, in every circumstance, to rebut his obligation simply by demonstrating an inability to pay. Rather, as provided in the Child Support Guidelines, there must be standards for rebuttal. Although, because of a change in the Guidelines, the “voluntariness of an obli-gor’s change in financial circumstances does not carry the relevancy it once did in modifying a child support obligation,” Surerus v. Matuska, 548 N.W.2d at 387 (internal quotations omitted), if, for example, an obligor chooses to buy a “toy,” gamble his livelihood away, or fraudulently transfer his assets rather than meet his obligations, one would not seriously expect the courts to ignore, much less reward, such self-inflicted harm. The result is no different when an obligor enters prison by voluntarily violating the law. To be sure, any of these situations might make it difficult or even impossible to satisfy a child support obligation. Nonetheless, an obligor’s errors do not justify punishing the obligor’s innocent children. See N.D. Admin. Code § 75-02-04.1-09(2) (discussing best interests of the supported children); 45 C.F.R. § 302.56(g) (state criteria for rebuttal must take into consideration best interests of child).

[¶ 13] Our conclusion balances the interests of the child with the current, temporary inability to pay that “recognizes the reduced income of the obligor as a result of incarceration but does not totally relieve the obligor of child support payments as a result of that incarceration.” Surerus v. Matuska, 548 N.W.2d at 389 (VandeWalle, C.J., concurring). Nor does the conclusion result in the obligor released from prison with an arrearage in child support so large that it is inconceivable the obligor will be able to earn enough to pay it. Id.

[¶ 14] We believe this is why the federal provisions referenced above give States the authority to establish the criteria for rebuttal and emphasize that rebuttal is only necessary where the presumptively correct award would be “unjust or inappropriate.” 42 U.S.C. § 667(b)(2); 45 C.F.R. § 302.56(g). The equitable principles underlying this result appear not only in federal law, but have been highlighted in our previous decisions as well. See, e.g., Koch v. Williams, 456 N.W.2d 299, 301-02 (N.D.1990).

[¶ 15] Therefore, our Child Support Guidelines have determined that, as a matter of law, financial hardship brought about by incarceration is not a situation in which an award of the presumptively correct amount of child support is “unjust or inappropriate.” To the extent Interest of R.H., 2004 ND 170, ¶ 11, 686 N.W.2d 107, implies that incarcerated obligors can refute a presumptively correct, minimum-wage-based child support award by simply demonstrating an immediate inability to pay, R.H. is hereby explained. This result is not foreclosed by federal law, but, rather, is specifically permitted to be made “under criteria established by the State.”

II.

[¶ 16] We have reviewed Stopple-worth’s other arguments, namely, that his obligation poses an undue hardship and that his incarceration is analogous to a disability that precludes gainful employment, and we find these arguments to be without merit.

'[¶ 17] We affirm the district court’s order.

[¶ 18] CAROL RONNING KAPSNER, MARY MUEHLEN MARING, and DALE V. SANDSTROM, JJ., concur.

[¶ 19] The Honorable WILLIAM A. NEUMANN, a member of the Court when this case was heard, resigned effective March 14, 2005, and did not participate in this decision.


author: SANDSTROM, Justice. MARING, Justice,

text:
    2005 ND 67
    Jerry D. LARSON, Plaintiff and Appellee v. Glenda A. LARSON, Defendant and Appellant.
    No. 20040248.
    Supreme Court of North Dakota.
    March 23, 2005.

      Timothy J. McLarnan of McLarnan, Hannaher & Skatvold, P.L.L.P., Moor-head, MN, for plaintiff and appellee.
    Michael L. Gjesdahl of Gjesdahl & Associates, Fargo, ND, for defendant and appellant.
   SANDSTROM, Justice.

[¶ 1] Glenda Larson appeals a district court order denying her motion to amend a divorce judgment between her and Jerry Larson to include college tuition expenses for the couple’s eighteen-year-old daughter. Concluding the district court did not err in holding it may not order post-minority child support for college expenses, we affirm.

I

[¶ 2] Glenda and Jerry Larson were married on May 6, 1978, and divorced on October 29, 1997. The parties had one child, a daughter, from their marriage, who was twelve years old at the time of the divorce. The district court approved the parties’ property settlement agreement and awarded joint legal custody of the child to both parents. Glenda Larson was awarded primary physical care of the child, and Jerry Larson was granted reasonable and liberal visitation. The district court ordered Jerry Larson to pay child support in the amount of $1,297 per month until the child graduated from high school or attained the age of nineteen years, whichever occurred first. The district court stated that either party could request a review of the child support payments.

[¶ 3] On March 8, 2004, Glenda Larson sought a modification of the divorce judgment to require Jerry Larson to pay post-minority child support for as long as their child attends college and graduate school. Their daughter graduated from high school in May 2004. She excelled in both academic and extracurricular activities in high school and wants to continue her education at one of eight prestigious colleges. Glenda Larson argues that she cannot pay the high tuition at these colleges and that Jerry Larson should help pay for their daughter’s education. Glenda Larson states that her and her husband’s current combined adjusted gross income for a year is roughly the same as tuition at one of the colleges her daughter wants to attend. Glenda Larson claims Jerry Larson has the financial means to contribute to their daughter’s college expenses. Glenda Larson argues it is a detriment to their daughter that Jerry Larson will not pay for any college expenses, because colleges consider the income of both parents, regardless of marital status, in determining the amount of student aid available to a child attending college. The daughter’s top collegiate choice states in its application material that it expects both natural parents, even when divorced or separated, to provide funds for educational expenses on the basis of each parent’s ability to contribute from income and assets. The college also states that both “natural parents will be expected to submit financial information and to provide assistance for the student’s college expenses commensurate with their ability rather than their willingness to contribute.”

[¶ 4] The district court denied Glenda Larson’s motion to award post-minority child support for her daughter, stating it did not have the authority to amend the 1997 divorce judgment.

[¶ 5] Glenda Larson appeals the district court order, arguing the district court erred in finding it did not have authority to amend the original divorce judgment to require Jerry Larson to pay post-minority child support to their daughter for college expenses.

[¶ 6] The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27-05-06. This Court has jurisdiction under N.D. Const. art. VI, § 6, and N.D.C.C. §§ 28-27-01, 28-27-02. The appeal was timely under N.D.R.App.P. 4(a).

II

[¶ 7] Glenda Larson argues the district court had authority under N.D.C.C. § 14-09-08.2 to award post-minority child support for her daughter’s college education.

[¶ 8] This Court uses the following review for child support determinations:

Child support determinations involve questions of law which are subject to the de novo standard of review, findings of fact which are subject to the clearly erroneous standard of review, and may, in some limited areas, be matters of discretion subject to the abuse of discretion standard of review. A court errs as a matter of law when it fails to comply with the requirements of the Guidelines. A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if no evidence exists to support it, or if, on the entire record, we are left with a definite and firm conviction that a mistake has been made.

Buchholz v. Buchholz, 1999 ND 36, ¶ 11, 590 N.W.2d 215 (citations omitted). “Interpretation of a statute is a question of law, fully reviewable on appeal.” Berg v. Berg, 2000 ND 36, ¶24, 606 N.W.2d 895. “In construing a statute, our duty is to ascertain the Legislature’s intent, which initially must be sought from the statutory language itself, giving it its plain, ordinary, and commonly understood meaning. We construe statutes as a whole and harmonize them to give meaning to related provisions.” Boumont v. Boumont, 2005 ND 20, ¶ 8, 691 N.W.2d 278 (citations omitted).

[¶ 9] The North Dakota statute regarding support for children after majority states, in part:

1. A judgment or order requiring the payment of child support until the child attains majority continues as to the child until the end of the month during which the child is graduated from high school or attains the age of nineteen years, whichever occurs first, if:
a. The child is enrolled and attending high school and is eighteen years of age prior to the date the child is expected to be graduated; and
b. The child resides with the person to whom the duty of support is owed.
2. A judgment or order may require payment of child support after majority under substantially the circumstances described in subsection 1.
6. This section does not preclude the entry of an order for child support which continues after the child reaches age eighteen, if the parties agree, or if the court determines the support to be appropriate.

N.D.C.C. § 14-09-08.2

[¶ 10] Jerry Larson argues the district court cannot award post-minority child support, because the parties waived their right to raise the issue by not including it in their divorce agreement. He argues the issue regarding college expenses was raised by Glenda Larson during the divorce negotiations. He argues that because she raised the issue during negotiations and he rejected it, and because the divorce judgment has no language reserving the issue for future review by the district court, she waived her right to later request child support for college expenses.

[¶ 11] This Court has consistently held that parties may not preclude a child from receiving child support, because the right to the support belongs to the child. Sprynczynatyk v. Celley, 486 N.W.2d 230, 232 (N.D.1992). We have said, “Despite an agreement between the divorcing parents, the best interests of children necessitate that a trial court exercise continuing jurisdiction to modify child support.” Sullivan v. Quist, 506 N.W.2d 394, 397 (N.D.1993) (citations omitted). A strong public policy exists that prohibits parental agreements that prohibit or limit the power of a court to modify future child support. Id. The original divorce judgment did not waive Glenda Larson’s right to petition the district court to modify Jerry Larson’s child support payments to pay for college expenses.

[¶ 12] The basic question is the statutory interpretation of N.D.C.C. § 14-09-08.2. Glenda Larson argues N.D.C.C. § 14-09-08.2(6) allows a district court to award post-minority child support for college education, because the statute allows for a district court to award child support after the child reaches the age of eighteen “if the court determines the support to be appropriate.” N.D.C.C. § 14-09-08.2(6). She cites Donarski v. Donarski, 1998 ND 128, 581 N.W.2d 130, to support her proposition that child support for college expenses is allowable under North Dakota law. In Donarski, the parties had helped their two older children pay for their college education, and they established a savings fund for their youngest child’s college education. Donarski at ¶¶ 16, 23. In the original divorce judgment, the district court ordered the father to pay for one-half of the youngest child’s reasonable college education expenses. Id. at ¶ 18. The father appealed, arguing the district court had no authority to order a parent to pay support for an adult child. Id. A majority of this Court held the district court had the authority to award “post-minority support, including college expenses, under appropriate circumstances.” Id. at ¶ 19. The majority in Donarski cited what they believed to be a “ ‘trend toward awarding moneys for the furthering of education for children, including a college education, by the courts of the various States, even though the parents are divorced.’ ” Id. (quoting Davis v. Davis, 268 N.W.2d 769, 778 (N.D.1978), overruled on other grounds by Nelson v. Trinity Medical Center, 419 N.W.2d 886 (N.D.1988)).

[¶ 13] The majority in Donarski and Glenda Larson both cite Zarrett v. Zarrett, 1998 ND 49, 574 N.W.2d 855, and Davis, 268 N.W.2d 769, to support the proposition that a district court has the authority to award post-minority support that includes college expenses. Donarski, 1998 ND 128, ¶ 19, 581 N.W.2d 130. Zarrett and Davis, however, are both factually distinguishable from the case at bar. In Zarrett, the parties entered into a mutually agreed-upon stipulation that obligated the father to pay college expenses. Zarrett, at ¶¶ 2, 14. Jerry Larson and Glenda Larson did not enter into a stipulated divorce agreement that required one of the parties to pay for college expenses. Davis is also factually distinguishable because it is a pre-Child Support Guidelines case, which allowed the creation of a trust fund for minor children under N.D.C.C. § 14-05-25. Donarski, at ¶ 39 (Sandstrom, J., concurring in part, dissenting in part).

[¶ 14] During the legislative session after the Donarski decision, the North Dakota legislature amended N.D.C.C. § 14-09-08.2 by adding a new subsection, which provides: “A judgment or order may require payment of child support after majority under substantially the circumstances described in subsection 1.” 1999 N.D. Sess. Laws ch. 143, § 1. Subsection 1 of the statute applies to a child who attains the age of eighteen before graduating from high school. The new subsection 2 allows a court to award child support after majority only under circumstances similar to that of a child who obtains the age of majority before he or she graduates from high school; it does not allow a court to award post-minority child support for college expenses. “When the wording of a statute is clear and free of all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit.” N.D.C.C. § 1-02-05; Ralston v. Ralston, 2003 ND 160, ¶ 5, 670 N.W.2d 334. The language of subsection 2 is clear. It limits a court’s ability to award post-minority child support to substantially the circumstances in subsection 1, which does not include support for college expenses.

[¶ 15] Glenda Larson argues N.D.C.C. § 14-09-08.2(6) allows a court to award post-minority child support for college expenses. Section 14-09-08.2(6), N.D.C.C., allows a court to award post-minority child support in limited circumstances under which parents have a statutory legal duty to support adult children. Donarski 1998 ND 128, ¶ 42, 581 N.W.2d 130 (Sandstrom, J., concurring in part, dissenting in part). The language, “does not preclude,” in the statute “makes it clear other statutory circumstances when parents are held responsible for the care of their adult children are ‘not preclude[d]’ by the provisions of N.D.C.C. § 14-09-08.2.” Id. This language, coupled with the legislature’s actions after Donarski, indicates the legislature’s intent to limit post-minority child support to circumstances substantially similar to those expressed in the statute. The mere hope that “divorced parents would continue to support their children in seeking college educations ... is a far cry from concluding a court can impose an obligation upon the parents to do so as a matter of law.” Donarski, at ¶ 29 (Vande-Walle, C.J., concurring in part and dissenting in part).

Ill

[¶ 16] Concluding the amended statute prohibits a court from modifying a divorce judgment to include post-minority child support, we affirm the district court’s order dismissing Glenda Larson’s motion for post-minority child support.

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

[¶ 18] The Honorable WILLIAM A. NEUMANN, a member of the Court when this case was heard, resigned effective March 14, 2005, and did not participate in this decision.

MARING, Justice,

dissenting.

[¶ 19] I respectfully dissent. I do not agree with the majority’s conclusion that the addition of subsection 2 to N.D.C.C. § 14-09-08.2 in 1999 is a clear indication that the legislature intended to limit a trial court’s authority to order post-minority support.

[¶ 20] In 1998, this Court determined that, under N.D.C.C. § 14-09-08.2, a trial court has the authority to order payment of post-minority support, including college education expenses, under appropriate circumstances. See Donarski v. Donarski, 1998 ND 128, 581 N.W.2d 130. In the next legislative session following the Do-narski decision, N.D.C.C. § 14-09-08.2 was amended to include the current subsection 2 which reads as follows:

A judgment or order may require payment of child support after majority under substantially the circumstances described in subsection 1.

N.D.C.C. § 14-09-08.2(2).

[¶ 21] The majority argues that the addition of subsection 2 in the first legislative session post-Donarski is indicative of the legislature’s intent to limit post-minority child support to only circumstances substantially similar to that allowed under N.D.C.C. § 14-09-08.2(1). I disagree.

[¶ 22] I am of the opinion that if it was the legislature’s intent to limit a trial court’s authority to award post-minority child support in situations other than that described in N.D.C.C. § 14-09-08.2(1), the legislature would have amended N.D.C.C. § 14-09-08.2(6) to explicitly reflect that such an award is limited to circumstances where parents have a statutory duty to support adult children or would have eliminated altogether that part of subsection 6 which states “or if the court determines the support to be appropriate.” The amendment would not have been the addition of the new language of subsection 2. At the time Donarski was decided by our Court, N.D.C.C. § 14-09-08.2 read:

1. A judgment or order requiring the payment of child support until the child attains majority continues as to the child until the end of the month during which the child is graduated from high school or attains the age of nineteen years, whichever occurs first, if:
a. The child is enrolled and attending high school and is eighteen years of age prior to the date the child is expected to be graduated; and
b. The child resides with the person to whom the duty of support is owed.
2. The person to whom the duty of support is owed shall file an affidavit with the district court stating that the requirements of subsection 1 are met. The clerk of court shall serve the affidavit by first-class mail upon the person owing the duty of support. Upon the filing of the affidavit, the child support continues pursuant to subsection 1. If the person owing the duty of support files a motion with the court, within twenty days subsequent to service of the affidavit, requesting a hearing before the district court, the court shall determine if the requirements of subsection 1 are met and shall enter an order accordingly.
3. This section applies to child support orders concerning children described in subsection 1, regardless of the date of entry of the order, provided that the affidavit described in subsection 2 is filed not later than ninety days after the child graduates from high school or reaches age nineteen,'whichever comes first.
4. This section does not preclude the entry of an order for child support which continues after the child reaches age eighteen, if the parties agree or if the court determines the support to be appropriate.

N.D.C.C. § 14-09-08.2 (1993). Donarski dealt specifically with the interpretation of subsection 4, which became subsection 6 when the legislature amended N.D.C.C. § 14-09-08.2 in 1999. 1999 N.D. Sess. Laws ch. 143, § 1. The wording of these two subsections is identical.

[¶ 23] In Donarski, the parties did not agree to an entry of child support which continued after the child turned eighteen. The only authority for the trial court order of an award of college expenses is the language of the statute:

4. This section does not preclude the entry of an order for child support which continues after the child reaches age-eighteen ... if the court determines the support to be appropriate.

Id. at ¶ 19 (emphasis added). A majority of our Court héld in Donarski that this very statutory language granted a trial court authority to extend child support beyond the age of majority for college expenses based upon full consideration of the particular circumstances of each case and described “the factors a court must consider in directing a parent to pay for costs of a child’s college education.” Id. at ¶ 20. We held “a parent cannot be compelled to contribute to an adult child’s college expenses if the parent’s financial resources are lacking.” Id. at ¶ 21. Clearly college expenses will not be awarded in every case nor, if they are awarded, will the same amount be awarded in every case.

[¶ 24] As pointed out earlier, the language interpreted and relied on by our Court in Donarski has not been changed by the legislature despite the fact it met in 1999, 2001, and 2003.

[¶ 25] The majority in the present case, however, relies on the addition of a new subsection 2 to N.D.C.C. § 14-09-08.2 in 1999 to conclude that the legislature disagreed with our Court’s decision in Donar-ski and decided to limit a trial court’s authority to enter an order awarding child support beyond graduation from high school or the age of nineteen. The only basis for that interpretation is the timing of the amendment to add the new subsection 2. The majority interprets the new subsection'2 to allow “a court to award child support after majority only under circumstances similar to that of a child who obtains the age of majority before he or she graduates from high school; ...” and not for college expenses. The majority then attempts to explain away the unaltered language of N.D.C.C. § 14-09-08.2(6) by incorporating the arguments of the dissenters to the majority opinion of Donarski Donarski 1998 ND 128, ¶ 42, 581 N.W.2d 130 (Sandstrom, J., concurring in part, dissenting in part) and (Vande-Walle, C.J., concurring in part and dissenting in part).

[¶ 26] There is, however, another logical interpretation of N.D.C.C. § 14-09-08.2(2). Subsection 2, which reads, “A judgment or order may require payment of child support after majority under substantially the circumstances described in subsection 1,” can be read to require a judgment or order which requires child support to continue “until the end of the month during which the child is graduated from high school or attains the age of nineteen years, whichever occurs first” is subject to the circumstances (a) and (b) described in subsection 1. See N.D.C.C. § 14-09-08.2(l)(a) and (b). The requirements of subsection 1 are:

a. The child is enrolled and attending high school and is eighteen years of age prior to the date the child is expected to be graduated; and
b. The child resides with the person to whom the duty of support is owed.

N.D.C.C. § 14-09-08.2(1).

[¶ 27] “We interpret statutes to give meaning and effect to every word, phrase, and sentence, and do not adopt a construction which would render part of the statute mere surplusage. When a statute’s language is ambiguous because it is susceptible to differing but rational meanings, we may consider extrinsic aids, including legislative history, along with the language of the statute, to ascertain the Legislature’s intent.” State v. Buchholz, 2005 ND 30, ¶ 6, 692 N.W.2d 105; see also N.D.C.C. § 1-02-39.

[¶ 28] Although the available legislative history is limited in this circumstance, there is no indication the legislature enacted N.D.C.C. § 14-09-08.2(2) as a response to our Court’s decision in Donarski In fact, the existing legislative history indicates that it was another reason entirely that prompted the legislature to add subsection 2 to N.D.C.C. § 14-09-08.2. The following testimony was offered by Blaine Nordwall on behalf of the Department of Human Services to explain the proposed changes to the statute:

The department supports Senate Bill 2073.
During discussions with the regional child support enforcement office staff, they raised concerns about the existing administration of section lf-09-08.2.
Some clerks were charging a filing fee for filing an affidavit that an 18-year old is still in high school.
It has become common for child support orders to require payment of child support after majority, using language parallel to that found in section lf-09-08.2, but which technically removes those orders from the description in subsection 1 (an “order requiring the payment of child support until the child attains majority’).
• Treatment concerning support during summer vacations remains variable.
Obligors have complained that they should be permitted to bring a motion to end the child support if an 18-year old drops out of school.
Senate Bill 2073 resolves all of these problems. It would eliminate the possibility of a filing fee (page 1, line 21). It would apply the section to orders that already require payment of support after the child’s majority (page 1, lines If and 15). It would specify treatment during summer vacations (page 2, lines 14 through 16). And it would give the obligor both knowledge of where the child is enrolled and an opportunity to ask the court to terminate support if the child leaves high school (pagel, lines 18 and 19, and page 2, lines 2 through 5). For all of these reasons, the Department of Human Services urges this committee to recommend a “do pass” on Senate Bill No. 2073.

Hearing on S.B. 2073 Before the Senate Judiciary Comm., 56th N.D. Legis. Sess. (Jan. 11, 1999) (testimony of Blaine Nord-wall, Director, Legal Advisory Unit, Department of Human Services) (emphasis added). It appears the 1999 amendments were made to clarify the administration of the requirements that the child is enrolled and attending high school and living with the custodial parent in order for the extension of support after a child turns 18.

[¶ 29] The fact that courts were entering judgments that did not end support at the age of majority, but extended support beyond the age of majority took those orders out of N.D.C.C. § 14-09-08.2(1) and it was necessary, therefore, to enact subsection 2 to cover those judgments.

[¶ 30] The legislature’s failure to amend N.D.C.C. § 14-09-08.2(6), along with the absence of any discussion related to restricting a trial court’s authority to order post-minority support for college expenses based on Donarski, prior to the 1999 addition of N.D.C.C. § 14-09-08.2(2), convinces me that the majority has not correctly ascertained the legislature’s intent in this matter.

[¶ 31] I, therefore, dissent and would remand the case to the trial court to apply the statute and our holding in Donarski, 1998 ND 128, 581 N.W.2d 130.

[¶ 32] Mary Muehlen Maring