author: LINDBERG, Judge.

text:
    David Brian SWARTHOUT, Appellant, v. MUTUAL SERVICE LIFE INSURANCE COMPANY, Respondent.
    No. CX-01-201.
    Court of Appeals of Minnesota.
    Aug. 7, 2001.

      Steve G. Heikens, Minneapolis, for appellant.
    Doreen Agnes Mohs, Rider, Bennett, Egan & Arundel, Minneapolis, for respondent.
    Considered and decided by TOUSSAINT, Chief Judge, STONEBURNER, and LINDBERG, Judges.
   OPINION

LINDBERG, Judge.

In the process of investigating the possible purchase of an annuity and some insurance from respondent Mutual Service Life Insurance Co. (MSI), appellant David Swarthout signed a release allowing MSI to obtain medical information about him from one doctor. MSI altered the release to acquire additional information from a second doctor and from a clinic. After obtaining information about Swarthout from those sources, MSI transmitted the information to a medical-records database, the content of which was available to all subscribing insurers. Swarthout sued MSI on several theories, including violations of (a) his right to seclusion; (b) Minn. Stat. § 144.335 regarding access to medical records; (c) the Consumer Fraud Act; and (d) the prohibition on fraudulent misrepresentation. The district court, in two partial summary judgment orders, granted MSI summary judgment on these claims. We affirm the district court’s ruling on the questions of consumer fraud and fraudulent misrepresentation. We reverse and remand, however, on Swarthout’s claims for intrusion upon seclusion and for a violation of Minn.Stat. § 144.335.

FACTS

In 1997, Swarthout investigated purchasing life insurance and an investment vehicle from MSI. The agent with whom Swarthout dealt was trainee-agent Steve Jordan, a man Swarthout had known for several years. In making his applications to MSI, Swarthout signed a release allowing MSI to obtain medical information about himself from one doctor. Swarthout ultimately bought an annuity but not insurance from MSI.

After Swarthout’s release was sent to MSI’s office, MSI employees (not including Jordan) added the name of another doctor and of a clinic to the release. MSI then obtained medical information about Swarthout from all three sources. The information showed, among other things, that Swarthout had high blood pressure. MSI later transmitted the medical information it had acquired about Swarthout to the Medical Information Bureau, a medical-information database shared by subscribing insurers.

When Swarthout learned MSI had altered his release and acquired medical information about him without his permission, he sued on various theories, including fraudulent misrepresentation and violations of his right to seclusion, of Minn.Stat. § 144.335 regarding access to medical records, and of the Consumer Fraud Act. By partial summary judgment rulings in April 1999 and April 2000 on these claims, the district court granted MSI summary judgment. The district court ruled that Swarthout had failed to show the damages necessary to support a fraudulent-misrepresentation claim, that the disclosure of Swarthout’s medical information did not meet the “highly offensive” threshold necessary to support a claim of invasion of his right to seclusion, that MinmStat. § 144.335 was inapplicable because this case lacked a doctor-patient relationship, that the lack of a sale of insurance precluded application of the Consumer Fraud Act, and that Swarthout had failed to show the damages necessary to support a CFA violation regarding the annuity. Swarthout appeals.

ISSUES

1. Did the district court err in granting summary judgment on Swarthout’s claim that MSI violated his right to seclusion?

2. Does Minn.Stat. § 144.335 apply to MSI?

3. Is the Consumer Fraud Act applicable here?

4. Did Swarthout show the damages necessary to support a fraudulent-misrepresentation claim?

ANALYSIS

On appeal from a summary judgment, appellate courts ask (1) whether there are any genuine issues of material fact and (2) whether the trial court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). A reviewing court views the evidence in the light most favorable to the party against whom judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993).

I.

The Restatement (Second) of Torts, § 652(b) (1977), states:

One who intentionally intrudes, physically or otherwise, upon the solicitude of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the intrusion would be highly offensive to a reasonable person.

Minnesota adopted this tort, known as intrusion upon seclusion, in 1998. Lake v. Wal-Mart Stores, Inc., 582 N.W.2d 231 (Minn.1998). The tort has three elements: (a) an intrusion; (b) that is highly offensive; and (c) into some matter in which a person has a legitimate expectation of privacy. E.g., Fletcher v. Price Chopper Foods, 220 F.3d 871, 875 (8th Cir.2000). There is

no liability unless the interference with the plaintiffs seclusion is a substantial one, of a kind that would be highly offensive to the ordinary reasonable [person], as the result of conduct to which the reasonable [person] would strongly object.

Restatement (Second) of Torts, § 652(b) cmt. d (1977). In the context of intrusion upon seclusion, questions about

the reasonable person standard are ordinarily questions of fact, * * * but they become questions of law if reasonable persons can draw only one conclusion from the evidence.

Hougum v. Valley Mem. Homes, 574 N.W.2d 812, 818 (N.D.1998) (citations omitted).

Here, the district court granted MSI summary judgment on Swarthout’s claim of intrusion upon seclusion, stating:

[T]he Court does not believe the disclosure of [Swarthout’s] blood pressure medication prescription rises to the threshold level of being “highly offensive to a reasonable person.” Certainly, a person seeking health related insurance must expect such disclosures .

At his deposition, Swarthout stated that he did not want to preclude MSI from getting information from the sources MSI added to his release, he only wanted to be informed if MSI got that information. He also stated that if MSI had given him a release for the doctor MSI added to the release, he would have signed it and that he could not say whether he would have signed a release for the clinic MSI added to the release. Use of improper methods to obtain information does not necessarily satisfy the “highly offensive” prong of the intrusion-upon-seclusion analysis where the information in question could be obtained by a different, proper manner. See Fletcher, 220 F.3d at 876 (noting Kansas Supreme Court holds that, as a matter of law, “unauthorized release of medical information does not constitute highly offensive conduct when that information could have been obtained by proper means” (citing Werner v. Kliewer, 238 Kan. 289, 710 P.2d 1250, 1255-56 (1985))).

Here, after Jordan made representations to Swarthout and Swarthout signed a limited release based at least partially on those representations, MSI altered the release, presented the altered release to various entities as if it had been signed by Swarthout, and obtained medical information about Swarthout from those entities. MSI then took the illicitly obtained information and posted it in a medical-insurance database, making it available to other insurance companies. Viewing this record in the light most favorable to Swarthout we cannot say that, as a matter of law, the altering of Swarthout’s release and the illicit obtaining, conveying, and publicizing of his private medical information was not the “substantial” and “highly offensive” intrusion upon Swarthout’s seclusion that would satisfy the three-prong test for the tort of intrusion upon seclusion. Cf. Restatement (Second) of Torts § 652(b), illus. 4 (stating party’s use of forged court order to, obtain opposing party’s bank records would constitute invasion of privacy). Therefore we reverse the grant of summary judgment on the question of intrusion upon seclusion and remand for further proceedings.

II.

Swarthout sought relief under Minn.Stat. § 144.335, subd. 3a(e) (2000). The district court ruled that this statute did not apply to MSI because it applied to “health providers” with respect to their patients, because Saari v. Litman, 486 N.W.2d 813 (Minn.App.1992), requires a doctor-patient relationship for Minn.Stat. § 144.355, subd. 3a(e), to be applicable, and because the relevant law was actually that of Minn.Stat. §§ 72A.493, .501-504 (2000). Statutory construction is reviewed de novo. In re Improvement of Murray County Ditch No. 34, 615 N.W.2d 40, 45 (Minn.2000) (citing authorities). When construing a statute, the object of doing so is to .effectuate legislative intent and the statute’s entire text is examined to give effect to all of its provisions. Id. at 45-46.

Section 72A.497, subd. 3(c) (2000), addresses access to personal information and health records and states that nothing therein “may reduce or affect a patient’s rights under section 144.335.” Thus, the (assumed) applicability of MinmStat. §§ 72A.493-.501-04 does not render MinmStat. § 144.335, subd. 3 inapplicable.

Saari, which holds that the existence of a doctor-patient relationship is assumed by Minn.Stat. § 144.335, addresses the 1990 version of the statute. Saari, 486 N.W.2d at 814. In 1991, the statute was amended to include the provision at issue here. See 1991 Minn. Laws ch. 319, § 15 (enacting Minn.Stat. § 144.335, subd. 3a(c) (Supp. 1991)); 1992 Minn. Laws ch. 569, § 9 (renumbering Minn.Stat. § 144.335, subd. 3a(c) as Minn.Stat. § 144.335, subd. 3a(e)). That provision states:

A person who negligently or intentionally releases a health record in violation of this subdivision, or who forges a signature on a consent form, or who obtains under false pretenses the consent form or health records of another person, or who, without the person’s consent, alters a consent form, is liable to the patient for compensatory damages caused by an unauthorized release, plus costs and reasonable attorney’s fees.

MinmStat. § 144.335, subd. 3a(e) (emphasis added). In relevant part, “patient” is defined as a “natural person” who has received “health care services.” Minn. Stat. § 144.335, subd. 1(a) (2000). Because Swarthout fits this definition, he is a patient who may be able to recover under the statute. Therefore, the question becomes whether MSI and Swarthout are “persons” who sought medical records and whose medical records were sought under this statute. While Minn.Stat. § 144.335 does not define “person,” “[pjerson” is generally defined to include natural persons and corporate bodies. Minn.Stat. § 645.44, subd. 7 (2000). MSI is a corporate body, Swarth-out is a natural person, and the preface to the definitions in Minn.Stat. § 645.44 (2000) states that the terms defined therein “shall” have the meanings given therein, “unless another intention clearly appears.” Minn.Stat. § 645.44, subd. 1; see Minn. Stat. § 645.44, subd. 16 (2000) (stating “ ‘[s]hall’ is mandatory”). Because MSI and Swarthout fit the relevant definitions, and because Minn.Stat. § 144.335, subd. 3a(e) post-dates the version of the statute construed in Saari, we cannot say that the existence of a doctor-patient relationship is required by MinmStat. § 144.335, subd. 3a(e).

Swarthout also argues that MSI is liable for improperly releasing his records under Minn.Stat. § 144.335, subd. 3a(a). The district court, however, did not address that provision, it is not properly before this court, and we decline to address it. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn.1988) (stating, generally, appellate courts address only issues presented to and decided by district court, party may not raise new issue on appeal, and party may not, on appeal, argue issue presented to district court on theory not presented to the district court.).

III.

The district court rejected Swarth-out’s claim that MSI violated the Consumer Fraud Act, stating the CFA requires a sale and Swarthout’s failure to buy life insurance was “fatal” to his CFA claim. While Swarthout alleges that an “attempted sale” is sufficient to invoke the CFA, MSI alleges Swarthout waived this argument by not citing any authority to this court or to the district court. Under Schoepke v. Alexander Smith & Sons Carpet Co., 290 Minn. 518, 519-20, 187 N.W.2d 133, 135 (1971),

[a]n assignment of error based on mere assertion and not supported by any argument or authorities in appellant’s brief is waived and will not be considered on appeal unless prejudicial error is obvious on mere inspection.

(Citations omitted.)

Here, mere inspection of the CFA shows that fraudulent conduct is prohibited “in connection with the sale of any merchandise, whether or not any person has been in fact misled, deceived, or damaged thereby.” MinmStat. § 325F.69, subd. 1 (2000). “Sale” includes an “attempt to sell any merchandise for any consideration.” Minn.Stat. § 325F.68, subd. 4 (2000). Therefore, Swarthout’s failure to cite any authority did not waive his argument and the lack of a sale was not necessarily fatal to his CFA claim.

After reciting the evidence on which Swarthout relied to avoid summary judgment, the district court stated that “[tjhere is no testimony by anyone yet identified by [Swarthout] that Jordan misrepresented the earning potential of any investment vehicle, or committed any fraudulent act.” (Emphasis added.) Because Swarthout’s argument to this court is limited to whether the parties’ relationship involved a sale or an attempted sale, he has not challenged the determination that Jordan’s conduct did not involve any fraud. And the district court’s ruling on this point is consistent with the fact that, Jordan’s statements were rendered false (if at all) only after they were made, when other MSI employees altered Swarthout’s release. Therefore, we affirm the grant of summary judgment on Swarthout’s CFA claim.

IV.

The district court granted MSI summary judgment on Swarthout’s fraudulent-misrepresentation claim because Swarthout failed to show damages. For purposes of summary judgment, the district court assumed Swarthout had satisfied all of the non-damage elements of his claim. Swarthout notes that, generally, fraud damages are the defrauded person’s out-of-pocket losses but that this measure of damages “does not work well” where the defrauding party’s conduct prevents the defrauded party from protecting himself. The crux of Swarthout’s damage claim on appeal is that he was allegedly improperly rated for insurance purposes. The district court rejected this assertion, stating

there is no evidence [Swarthout] was ever rated (despite explicit instructions from this court [that evidence of such a rating be produced]), or that [Swarth-out] ever paid an inflated premium.

Without having mentioned the question in his brief on the merits, Swarth-out’s reply brief alleges that the deposition of MSI’s doctor addressed Swarthout’s insurance rating. Issues are not properly before this court when they are raised for the first time in a reply brief. McIntire v. State, 458 N.W.2d 714, 717 n. 2 (Minn.App.1990), review denied (Minn. Sept. 28, 1990); see Balder v. Haley, 399 N.W.2d 77, 80 (Minn.1987) (holding issues not briefed are waived). While Swarthout cites discovery materials to support his allegation that he was rated, discovery materials are not generally included in a district court file and no discovery materials are listed on the index to this district court file. Cf Minn. R. Civ. P. 5.04 (excluding responses to requests for documents from filing requirement unless district court orders otherwise). Absent the evidence to which Swarthout refers, we cannot review the district court’s ruling on this point.

DECISION

Because fact issues exist regarding Swarthout’s claim for intrusion upon seclusion and because a doctor-patient relationship is not required for application of Minn.Stat. § 144.335, subd. 3a(e) (2000), we reverse the district court’s grant of summary judgment on these issues and remand for further proceedings. We affirm the district court’s grant of summary judgment on the questions of the Consumer Fraud Act and fraudulent misrepresentation. We express no opinion on how to decide the remanded issues.

Affirmed in part, reversed in part, and remanded.

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

      . Much of Swarthout's discussion of intrusion upon seclusion addresses whether there was an intrusion and whether he had a legitimate expectation of privacy. The district court, however, did not address those points.

      . While Minn. R. Civ.App. P. 103.04 states that an appellate court may address any issue "as the interest of justice requires))]'' the 1998 amendment to that rule requires consideration of whether "proper steps have been taken to preserve issues for review on appeal." Because the applicability of Minn. Stat. § 144.335, subd. 3a(a), was not properly preserved, we decline to exercise our discretion under rule 103.04 to address the question.


source: Caselaw Access Project

author: RANDALL, Judge

license: Public Domain

text:
    PROLIFE MINNESOTA, Respondent, v. MINNESOTA PRO-LIFE COMMITTEE, et al., Appellants.
    No. C2-00-2160.
    Court of Appeals of Minnesota.
    Aug. 7, 2001.
    Review Denied Oct. 24, 2001.

      Paul F. Shoemaker, Shoemaker Law Office, P.A., Minneapolis, MN, (for respondent).
    Harlan M. Goulett, Harlan M. Goulett & Associates, Minneapolis, MN, (for appellants).
    Considered and decided by SCHUMACHER, Presiding Judge, RANDALL, Judge, and G. BARRY ANDERSON, Judge.
   OPINION

RANDALL, Judge

This is an appeal from a temporary restraining order in which the district court enjoined appellants from using the name “Minnesota Pro-Life Committee,” which is similar to the name of respondent’s organization, “Prolife Minnesota.” Respondent’s name is protected under trademark law. Appellants contend that this violates their First-Amendment rights because they were not offered an opportunity to challenge respondent’s version of the facts and law before the order was issued. We affirm and remand for a hearing for a permanent injunction.

FACTS

Respondent Prolife Minnesota was formed in 1989 under Minnesota law. Respondent is also known as “The Billboard People.” Prolife Minnesota’s mission is to educate people about the pro-life message through the media and public awareness campaigns. Respondent is a 501(c)(3) organization.

Appellant Minnesota Life Committee fik/a Minnesota Pro-Life Committee was formed in Spring 2000 by appellant Tim Commers, a former state representative. The purpose of the organization is to raise money to support candidates for political offices who support the pro-life cause. Appellants actively solicit funds through telemarketing. Respondent does not.

Respondent sought a temporary injunction and ex parte restraining order against appellants because respondent discovered that appellants were claiming association and/or identity as respondent. Respondent’s principal officer, Mary Ann Kuhar-ski, claims that she began receiving anonymous complaints by phone in May 2000, claiming “her organization” was responsible for offensive “telemarketing tactics.” It is not disputed that the calls in question, wherein people being solicited for money complained about offensive tactics, came from people calling on behalf of appellants. Respondent has never used telemarketing as a means of raising money in its entire history. On May 27, 2000, Kristi Anderson, who received a telemarketing call at 6:30 a.m., filed a formal consumer complaint with the Minnesota Attorney General’s Office naming “The Billboard People” as the offending organization. The complaint states that Ms. Anderson received the call from an organization calling itself “Prolife Minnesota” and “The Billboard People.” Respondent also received additional phone complaints throughout the summer of 2000, which were traced to calls made by appellants to potential contributors.

In August 2000, respondent received a call from Trudy Clancy asking whether respondent was the same group that she pledged to over the phone. Kuharski claims in her affidavit that Clancy told her the organization to which she pledged money said, “Have you seen the billboards around town? Well, that’s us. We’re the Billboard People.” She wanted to verify that she was sending her pledge to respondent because she admired the organization. After receiving a letter from appellants, which did not contain a phone number, Clancy obtained respondent’s phone number from directory assistance when she asked for appellants’ number. It appears that she did not realize she had been solicited by and actually pledged to appellants rather than to respondent. Later in August 2000, respondent received a similar phone call from another woman wanting to verify that it was really respondent who called her. Again, it was appellants who had actually contacted her.

Kuharski also claimed in her affidavit that at about the same time, her daughter, Christine Klaeges, received a call from appellants’ representative asking for money. When she told the telemarketer that she had already given money to respondent, she was told that appellants did billboards and they were affiliated with respondent. Klaeges insisted this was not correct, but the telemarketer assured her that it was affiliated,

In September 2000, Maurice Huard of Duluth sent in a $15 donation to respondent’s address, which was accompanied by a tear-off sheet from “Minnesota Pro-Life Committee.” Respondent called Huard to verify he intended the donation for respondent, rather than appellants. Finally, Ku-harski claims that a long-time donor stopped donating to respondent after receiving a notice from respondent warning people about the confusion with appellants. The long-time donor wrote “That is it.”

On August 31, 2000, Kuharski contacted Commers to learn if he knew that his telemarketers were telling people they were “The Billboard People” or affiliated with respondent and to tell him that his organization’s name was similar to respondent and confusing the public. Commers claimed that that was not his intent. Ku-harski learned that appellants’ organization did not have an office or phone listing but merely a separate bank account for donated money.

After an exchange of letters between the parties, in which respondent asked appellants to change their name, stop claiming affiliation with respondent, and stop claiming that they are “The Billboard People,” Kuharski did not feel her request was being honored. Respondent then served appellants with a summons and complaint on October 11, 2000, and filed a motion for a temporary restraining order and ex parte restraining order on October 19, 2000. The hearing took place on October 20, 2000, less than 12 hours after appellants received notice of the hearing.

At the hearing, respondent asked that appellants cease using the name “Minnesota Pro-Life Committee.” Appellants agreed to this request and had in fact changed their name with the Secretary of State to “Minnesota Life Committee” before the hearing. Appellants agreed at the hearing that claiming affiliation or an association with respondent or “The Billboard People” was wrong and stated that anyone found doing so in the organization would be fired.

Based on the discussion at the hearing, the district court issued a temporary restraining order (TRO) on October 20, 2000, requiring appellants to cease and desist using the name “Minnesota Pro-Life Committee” and claiming any affiliation or association with “Prolife Minnesota” or “The Billboard People.” Appellants filed an answer and counterclaim to respondent’s motion on October 30, 2000, and asked the district court to dissolve the TRO and dismiss respondent’s complaint in its entirety. They received no response from the district court. This appeal follows.

ISSUE

Is the temporary restraining order against appellants an unconstitutional deprivation of their free-speech rights?

ANALYSIS

The Minnesota Supreme Court has stated:

The granting of an injunction generally rests within the sound discretion of the [district] court, and its action will not be disturbed on appeal unless, based upon the whole record, it appears that there has been an abuse of such discretion.

Cherne Indus., Inc. v. Grounds & Assoc., Inc., 278 N.W.2d 81, 91 (Minn.1979) (citation omitted).

Appellants argue that the district court’s issuing a TRO against appellants is a prior restraint on their speech. Appellants contend that they should have been allowed an opportunity to submit affidavits or briefs to challenge respondent’s version of the facts and the law before the TRO was issued. Further, appellants claim that religious, political, and cultural expression should be granted an exception to trademark law even when a party’s name is deceptively similar to a protected trade name.

A party “likely to be damaged by a deceptive trade practice of another may be granted an injunction against [the party causing the harm].” Minn.Stat. § 325D.45, subd. 1 (2000). The Minnesota Deceptive Trade Practices Act states:

A person engages in a deceptive trade practice when, in the course of business * * *, the person:
(1) passes off goods or services as those of another;
(2) causes likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods or services;
(3) causes likelihood of confusion or of misunderstanding as to affiliation, connection or association with, or certification by, another; * * *
(5) represents that goods or services have sponsorship, approval, [or] characteristics * * * that they do not have ⅜ ⅜ ⅜ ⅜ ⅜
(13) engages in any other conduct which similarly creates a likelihood of confusion or of misunderstanding.

Minn.Stat. ■ § 325D.44, subd. 1 (2000). Further, a corporate name is considered “deceptively similar” to the name of another business

only if the similarity tends to deceive the ordinary purchaser as to the true identity of the goods whereby he is led to believe that he is getting [respondent’s] product when he is in fact getting that of [appellants].

Howards Clothes, Inc. v. Howard Clothes Corp., 236 Minn. 291, 295-96, 52 N.W.2d 753, 757 (1952) (citations omitted). Trademark law’s purpose

is to protect the public from confusion regarding the sources of goods or services and protect business from diversion of trade through misrepresentation or appropriation of another’s goodwill.

Minneapple Co. v. Normandin, 338 N.W.2d 18, 22 (Minn.1983) (citation omitted). “Goodwill” relates to a business’s credibility and reputation for fair dealing and integrity. Lawyers Title Ins. Co. v. Lawyers Title Ins. Corp., 109 F.2d 35, 38 n. 5, 43 n. 38 (D.C.Cir.1939), cert. denied, 309 U.g. 684, 60 S.Ct. 806, 84 L.Ed. 1028 (1940).

■ A TRO may be granted without written or oral notice to the adverse party only if

(1) it clearly appears from specific facts shown by affidavit or by the verified complaint that immediate and irreparable injury, loss, or damage will result to the applicant before the adverse party * ⅜ * can be heard in opposition, and (2) the applicant’s attorney states to the court in writing the efforts, if any, which have been made to give notice or the reasons supporting the claim that notice should not be required.

Minn. R. Civ. P. 65.01.

Appellants do not argue that their name is dissimilar from respondent’s. They concede that point. Rather, appellants argue that they can use a name similar to respondent even though the public could be confused, claiming that there should be an exception to trademark law for religious, political, and cultural expression. Appellants do agree that the First Amendment does not shield a religious or political fundraiser from “impersonating” another person or entity to collect funds for the same cause. While appellants claim they changed their name to Minnesota Life Committee to minimize any risk of future liability, they reserved the right to argue that legally they did not have to change it. Thus, the issue is not moot.

Respondent makes it very clear that it is not claiming a proprietary interest in the words “pro-life” or “Minnesota.” Respondents argue, instead, that using a combination of these words in a manner that is deceptively similar to its name is a trademark infringement. Respondent provided some examples of ways appellants could use pro-life words in their name without infringing on respondent’s trade name such as, “Minnesota Committee for the Election of Pro-Life Candidates,” or the “Committee for Election of Minnesota Pro-Life Politicians.” In addition, respondent is not attempting to censure or exercise prior restraint over any of appellants’ messages, except for appellants’ claim of affiliation or association with “Prolife Minnesota” and “The Billboard People.” That point is not in dispute. Appellants concede that any such claim of affiliation by them with respondent would be improper.

Respondent claims that it is merely protecting the name “Prolife Minnesota,” which has state and federal trademark protection, and “The Billboard People,” which has state trademark protection and is in the process of being registered nationally.

Appellants argue that their speech is subject to protection under a strict-scrutiny analysis because it is political speech, rather than commercial speech. They argue that the restriction is based on the content of their name. Respondent argues that the issue is commercial speech and, thus, less scrutiny is required.

Content-based restrictions on speech survive First Amendment strict-scrutiny analysis only if they are necessary to serve a compelling state interest and are narrowly drawn to achieve that end. Widmar v. Vincent, 454 U.S. 263, 270, 102 S.Ct. 269, 274, 70 L.Ed.2d 440 (1981). Even assuming this case calls for strict scrutiny, the TRO is valid. The state has a compelling interest in protecting property interests in trade names. Cf. College Sav. Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 673, 119 S.Ct. 2219, 2224, 144 L.Ed.2d 605 (1999) (stating trademarks are a constitutionally protected property interest). Further, the restriction on appellants’ speech is narrowly tailored so that it only impacts the use of appellants’ admittedly deceptively similar name.

This matter was not decided on its merits; it was a TRO. “The function of a [TRO] * * * is to preserve the status quo until opportunity is afforded to decide the matter on the merits.” Crosby v. Crosby, 587 N.W.2d 292, 297 (Minn.App.1998) (citation omitted), review denied (Minn. Feb. 18, 1999). Even though appellants received late notice of the TRO hearing, a review of the record and the supporting affidavit by Kuharski show that respondent suffered irreparable injury to its credibility and reputation and would continue to do so if appellants did not stop using the name “Minnesota Pro-life Committee” and claiming they were affiliated or associated with respondent. Respondent experienced numerous incidents where people mistook appellants as respondent. Appellants’ telemarketers repeatedly claimed affiliation or association with “Prolife Minnesota” and “The Billboard People,” which prompted several people, some of them long-time contributors to respondent, to contact respondent to complain about what they believed to be respondent’s telemarketing tactics. Respondent also received a formal complaint from the attorney general’s office for actions performed by appellants. All of these incidents show that the public confused appellants with respondent and are evidence of irreparable injury or damage to respondent. Based on the evidence before the district court, the court did not err in granting respondent the TRO.

The parties at oral argument before this court conceded there was no firm settlement between them before the district court ruled. Therefore, it was proper for the district court to file a written order.

After issuing the TRO, which we affirm today, the district court did not set a date for a hearing for a permanent injunction. Appellants request a final hearing and respondent agrees that appellants are entitled to one. We agree. Both parties should be given a reasonable time to prepare for the hearing, and one should be scheduled at the earliest practical time.

DECISION

The district court acted properly in granting a TRO in favor of respondent. The record contains concrete evidence of significant confusion to people who were solicited by appellants for funds, and clear evidence of ongoing harm to respondent.

The record is clear that many individuals considered the two organizations to be one and the same; there is evidence in the record that telemarketers calling on behalf of appellants did nothing to discourage the confusion.

The district court properly found that respondent met its burden of proof when asking for a TRO. Having said that, appellants are entitled to a hearing on whether a permanent injunction should be issued.

Affirmed and remanded.


author: SCHUMACHER, ROBERT H., Judge.

text:
    WESTCHESTER FIRE INSURANCE COMPANY, assignee of Industrial Indemnity Company, Respondent, v. Frederick HASBARGEN, Appellant.
    No. C7-01-222.
    Court of Appeals of Minnesota.
    Aug. 7, 2001.

      Michael D. Nelson, Ohnstad Twiehell, P.C., West Fargo, ND, for respondent.
    Eric A. Bartsch, Marc A. Al, Kevin R. Prohaska, Lindquist Vennum P.L.L.P., Minneapolis, for appellant.
    Considered and decided by G. Barry ANDERSON, Presiding Judge, RANDALL, Judge, and SCHUMACHER, Judge.
   OPINION

SCHUMACHER, ROBERT H., Judge.

Respondent Westchester Fire Insurance Company, assignee of Industrial Indemnity Company, brought an action to renew a judgment against appellant Frederick Hasbargen that was almost ten years old. Hasbargen argued that the judgment had expired after three years pursuant to Minn.Stat. 550.366, subd. 2 (2000), applicable to judgments for debts on agricultural property. The district court ruled that section 550.366 was inapplicable and renewed the judgment. We reverse.

FACTS

Hasbargen, a farmer, became a member of American Energy, Inc., a North Dakota cooperative, which planned to operate a facility for processing grain into ethyl alcohol. By 1982, Hasbargen, along with some 1,100 other farmers, executed a grain supply agreement with American Energy.

In August 1982, American Energy borrowed $2.5 million from Beneficial Finance Leasing Corporation (Beneficial) and executed a promissory note for that amount. American Energy assigned the grain supply agreements to Beneficial as security and obtained a contract repudiation policy from Industrial Indemnity Company guaranteeing repayment of the loan. American Energy then failed to pay the note when due.

Beneficial demanded delivery of the grain from the farmers without paying them, pursuant to the unconditional delivery obligations contained in the grain supply agreements, but the farmers refused to comply. Industrial Indemnity satisfied the loan obligation and then obtained settlements or money judgments in federal district court against the farmers, including Hasbargen. The judgment of $377,760.80 against Hasbargen was transcribed to the Traverse County District Court where’it was docketed, on September 6,1990.

Industrial Indemnity then assigned its rights under the judgment to respondent Westchester Fire Insurance Company (Westchester) on April 4, 2000, which sued to renew the judgment on April 27,. 2000. Hasbargen asserted that the judgment had expired in 1993 pursuant to the three-year limitation on execution of judgments related to agricultural property under Minn. Stat. 550.366 (2000). The district court rejected Hasbargen’s defense and renewed the judgment which, with postjudgment interest, amounted to $608,279.96. This appeal followed.

ISSUE

Did the district court err in holding that the three-year limitation on the execution of a judgment under MinmStat. 550.366 (2000) does not apply because the judgment was not for a “debt on agricultural property”?

ANALYSIS

Findings of fact will not be reversed unless clearly erroneous. Minn. R. Civ. P. 52.01. Statutory interpretation is a question of law that an appellate court reviews de novo. Harms v. Oak Meadows, 619 N.W.2d 201, 202 (Minn.2000).

In constructing and interpreting Minnesota statutes, the court seeks to effectuate the intent of the legislature. Current Tech. Concepts, Inc. v. Irie Enters., Inc., 530 N.W.2d 539, 543 (Minn.1995). “Words and phrases. are construed * * * according to their common and approved usage,” unless doing so would be inconsistent with the manifest intent of the legislature. Minn.Stat. 645.08(1) (2000). When the language is .unambiguous, the court must apply the plain meaning of the statute. Current Tech. Concepts, 530 N.W.2d at 543. If the statute is reasonably susceptible to more than one meaning, it is ambiguous and the rules of statutory construction will be applied. Id.; Minn.Stat. 645.16. Farm protection statutes are remedial and must be liberally construed to achieve their intended purpose. Harbal v. Federal Land Bank, 449 N.W.2d 442, 446-47 (Minn.App.1989), review denied (Minn. Feb. 21, 1990).

In 1986, the legislature passed a host of laws relating to agriculture to assist farmers. See generally 1986 Minn. Laws ch. 398. Included in this act were laws intended to address the problem of farm foreclosure sales and resulting deficiency judgments, which the legislature found were “debilitating the people foreclosed and taking away their hope for readjustment after foreclosure, which is detrimental to the welfare of the state.” 1986 Minn. Laws ch. 398, art. 19,1.

One of the ways the legislature addressed this problem was to shorten the time in which certain deficiency judgments may be enforced. Rather than the usual ten-year period under Minn.Stat. 550.01 (2000), a judgment to enforce a mortgage debt on agricultural property is subject to a three-year limitation on execution.

A deficiency judgment or personal judgment obtained to enforce a mortgage debt on property used in agricultural production may be enforced by execution, but the judgment may not be executed after three years from the date judgment was entered.

MinmStat. 582.30, subd. 7 (2000). In 1987, the legislature expanded the three-year limit to judgments for debts relating to personal property used in farming operations by enacting MinmStat. 550.366, the statute at issue here. 1987 Minn. Laws ch. 292, 1. Subdivision 2 provides:

A judgment for the unpaid balance of a debt on agricultural property owed by a farm debtor may not be executed upon real or personal property after three years from the date the judgment was entered.

Minn.Stat. 550.366, subd. 2 (2000).

When Westchester Fire sought to renew the judgment, Hasbargen asserted the three-year limit on execution of judgments under subdivision 2. The district court determined that section 550.366 did not apply to Hasbargen because the judgment was not one for an unpaid balance of a debt on personal property used in a farm operation. Instead, the court characterized the judgment as based on breach of contract, albeit a contract of an agricultural nature.

The major area of dispute is whether the judgment here is for “the unpaid balance of a debt.” Hasbargen contends that the word “debt” has broad meaning, reaching not only money, but whatever one is bound to render to another, such as goods or services. See Black’s Law Dictionary 410 (7th ed.1999) (defining debt as “[ljiability on a claim; a specific sum of money due by agreement or otherwise” and a “nonmonetary thing that one person owes another, such as goods or services”). In insolvency proceedings, “debt” has been described as being of “large import,” and includes “all that is due to a man under any form of obligation or promise.” Daniels v. Palmer, 41 Minn. 116, 121, 42 N.W. 855, 857 (1889) (citation omitted) (holding that persons who held receipts for grain were creditors and warehouseman who held grain was debtor for purposes of insolvency law). “A debt includes not merely money due by contract, but whatever one is bound to render to another, whether money, goods, or services.” In re Robinson’s Estate, 175 Misc. 433, 23 N.Y.S.2d 905, 906 (N.Y.Sur.Ct.1940) (citation omitted) (addressing meaning of “indebted” to include repayment of money or redelivery of securities advanced in context of will).

Hasbargen contends that a farmer'may default on a farm obligation, resulting in a debt, in one of two ways. First, a farmer may receive something of value today, such as chemicals, seeds, or equipment, in exchange for future payment, and may default by failing to pay for- the goods. There is no dispute that such a debt would be subject to Minn.Stat. 550.366. Secondly, a farmer who joins an ethanol cooperative also receives something of value today, membership in a cooperative with a fixed market for the product, in .exchange for a promise to deliver something of value in the future, the grain. Hasbargen contends that if the future obligation is unmet by failing to deliver the grain, a default occurs, resulting in a debt. Hasbargen contends these two situations are logically equivalent and both are debts within the meaning of MinmStat. 550.366, subd. 2. See Daniels, 41 Minn. at 122, 42 N.W. at 857 (holding that holders of receipts for grain issued by a warehouseman are creditors within the meaning of the insolvency act). Considering the broad remedial purpose of the act as well as the statutory language, we agree and hold that the farmer’s default on the grain obligation constitutes a debt that is subject to the three-year limit on execution in Minn.Stat. 550.366, subd. 2.

Next, we briefly address whether the debt is on “agricultural property.” Minn.Stat. 550.366, subd. 2. The statute defines agricultural property as “personal property that is used in a farm operation.” Minn.Stat., 550.366, subd. 1(a). Personal property is “[a]ny movable or intangible thing that is subject to ownership and not classified as real property.” Black’s Law Dictionary at 1233. Westchester Fire argues that a future contract to deliver grain does not constitute personal property. But an executory contract for the future delivery of goods is not real property and is subject to ownership. See Griffin v. Minnesota Sugar, 162 Minn. 240, 243-44, 202 N.W. 445, 447 (1925) (applying the Uniform Sales Act and noting that future crops may be subject to mortgages). Thus, it constitutes personal property. Black’s Law Dictionary at 1233. Finally, it appears undisputed that Hasbargen was engaged in a farm operation.

DECISION

The district court erred in renewing the judgment and holding that Minn.Stat. § 550.366, subd. 2 (2000), did not apply to the judgment.

Reversed.


author: TOUSSAINT, Chief Judge

text:
    STATE of Minnesota, City of Minneapolis, Respondent, v. Tyree Duane WASHINGTON, Appellant.
    No. C5-00-1696.
    Court of Appeals of Minnesota.
    Aug. 14, 2001.

      Mike Hatch, Attorney General, St. Paul, MN; and Jay M. Heffern, Minneapolis City Attorney, Lois Regnier Conroy, Assistant City Attorney, Minneapolis, MN, for respondent.
    Leonardo Castro, Fourth District Public Defender, Peter W. Gorman, Assistant Public Defender, Minneapolis, MN, for appellant.

      Considered and decided by TOUSSAINT, Chief Judge, STONEBURNER, Judge, and LINDBERG Judge.

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

   OPINION

TOUSSAINT, Chief Judge

Appellant Tyree Washington contends that the trial court’s failure to dismiss the alternate juror entitles him to a new trial. Because the presence of the alternate juror in the jury deliberations prejudiced appellant and was not authorized by law, we reverse and remand for a new trial.

FACTS

In May 2000, respondent State of Minnesota charged appellant with five misdemeanor counts of criminal conduct. The jury returned a verdict of not guilty on three of the counts and found appellant guilty of assault in the fifth degree, in violation of Minn.Stat. § 609.224, subd. 1(1) (2000), and disorderly conduct, in violation of Minn.Stat. § 609.72, subd. 1 (2000).

The trial court empanelled seven jurors: the standard six jurors for a misdemeanor case and one alternate. The jurors were unaware that one of them was an alternate. All seven jurors participated in the deliberations. Just before the jury returned to the courtroom to publish the verdict, appellant Tyree Washington objected to the presence of the alternate. The trial court did not dismiss the alternate juror finding that appellant’s attorney had acquiesced to the alternate deliberating with the rest of the jury, and denied appellant’s motion for a new trial.

ISSUES

1. Did the trial court err by finding that respondent had met its burden to show appellant was not prejudiced by the presence of the alternate juror during deliberations?

2. Was a seven-member jury authorized by law?

3. Did appellant waive his right to a six-member jury through the actions of his counsel?

ANALYSIS

The interpretation of the rules of criminal procedure is a question of law subject to de novo review. State v. Nerz, 587 N.W.2d 23, 24-25 (Minn.1998).

I.

Prejudice

The rules of criminal procedure provide that “[a]n alternate juror who does not replace a principal juror shall be discharged after the jury retires to consider its verdict.” Minn. R.Crim. P. 26.02, subd. 8 (emphasis added). Underlying this mandate is that an alternate in the jury room can affect the verdict in two ways: (1) by participating in the deliberations, verbally or through “body language”; or (2) by his or her mere presence exerting a “chilling” effect on the regular jurors. United States v. Olano, 507 U.S. 725, 739, 113 S.Ct. 1770, 1780, 123 L.Ed.2d 508 (1993). This court has held that the presence of an alternate in the jury room during deliberations creates a presumption that the defendant incurred prejudice. State v. Crandall, 452 N.W.2d 708, 711 (Minn.App.1990). Thus, the prosecution “bears the burden of showing that the trial court’s error could not reasonably have affected the verdict.” Id. (citation omitted); see also Olano, 507 U.S. at 739, 113 S.Ct. at 1780 (stating that ultimate inquiry is whether intrusion “affect[ed] the jury’s deliberations and thereby its verdict”). To determine whether the state has met its burden, the court considers (1) “the number of jurors exposed to the contact,” including whether the alternate actively participated in the deliberations and for how long; (2) “the weight of the evidence on the merits of the case”; and (3) “the likelihood that prejudice was abated by curative measures.” Crandall, 452 N.W.2d at 711.

In this case, applying the Crandall analysis, we conclude that the alternate’s presence prejudiced appellant. First, although the seventh juror was an alternate, none of the jurors knew there was an alternate. All the jurors had contact with the alternate because the alternate participated in all of the deliberations and, when polled, he assented with the verdict. Second, there was a guilty verdict on two of the five counts. Third, the trial court did not give specific instructions regarding the alternate or take any other curative measures. Thus, the trial court erred in finding that respondent met its burden to demonstrate that appellant was not prejudiced.

II.

Jury Size

Respondent contends that no rule prohibits a jury of seven, therefore absent prejudice to appellant there is no error in allowing the alternate to remain. As concluded above, there was prejudice to appellant. Even if there were no prejudice, however, lack of an express prohibition against seven jurors is not dispositive.

With regard to misdemeanors, the rules provide only for a six-person jury. Authorization for a six-member jury is contained in the definition of a petit jury as “a body of six persons.” Minn. R. Gen. Pract. 802(i). The Minnesota Constitution allows for more than six jurors for felonies or where otherwise provided by rule or law. Minn. Const, art. I, § 6 (“In all [non-felony] criminal prosecutions, the legislature may provide for the number of jurors, provided that a jury have at least six members.”). The Minnesota Rules of Criminal Procedure also allow the parties, with the court’s approval, to stipulate that the jury shall consist of a lesser number than that provided by law.” Minn. R.Crim. P. 26.01, subd. 1(4) (2000). Here, there is no applicable rule or law authorizing a seven-member jury. There is also no claim that the parties agreed to seven jurors much less sought court approval for such an agreement. Because the seventh juror was not authorized, it was error to allow the alternate to remain through deliberations.

III.

Waiver

Respondent also contends that appellant waived his right to object because appellant’s attorney acquiesced in the alternate’s participation. The record indicates, however, that appellant objected just before the jury returned and published the verdict. Regardless of the timeliness of the objection, even if appellant’s attorney had acquiesced, such action would not effectively waive appellant’s right to a six-member jury where appellant himself did not consent to seven jurors. But see United States v. Stewart, 700 F.2d 702, 704-05 (11th Cir.1983) (finding defense counsel’s stipulation to 13 member jury sufficient to waive entitlement to 12 member jury because decision was tactical one).

The criminal rules provide that:

At any time before verdict, the parties, with the approval of the court, may stipulate that the jury shall consist of a lesser number than that provided by law. The court shall not approve such a stipulation unless the defendant, after being advised by the court of the right to trial by a jury consisting of the number of jurors provided by law, personally in writing or orally on the record in open court agrees to trial by such reduced jury-

Minn. R.Crim. P. 26.01, subd. 1(4); see Reed v. United States, 479 U.S. 954, 954, 107 S.Ct. 445, 445, 93 L.Ed.2d 393 (1986) (mem.) (White, J., dissenting from denial of certiorari). The requirement of a fully informed criminal defendant expressly agreeing to a specific deviation from his rights is as critical where more jurors deliberate as where fewer jurors deliberate. It is not possible to gauge the impact a single additional juror will have on the outcome of a trial. Therefore, we decline to limit this rule requiring personal consent to cases where the defendant agrees to fewer jurors than the number required by law.

DECISION

The trial court erred by allowing the alternate juror to decide the case with the rest of the jury. Appellant is entitled to a new trial.

Reversed and remanded.


text:
    Jason J. STOUT, Respondent, v. AMCO INSURANCE COMPANY, Appellant, Andrew Pangrac, et al., Defendants.
    No. CX-01-246.
    Court of Appeals of Minnesota.
    Aug. 21, 2001.

      Steven R. Peloquin, Peloquin & Minge, P.A., New York Mills, for respondent.
    George C. Hottinger, Erstad & Riemer, P.A., Minneapolis, for appellant.
    Considered and decided by TOUSSAINT, Chief Judge, and HALBROOKS and LINDBERG, Judges.
   OPINION

LINDBERG, Judge.

Appellant AMCO Insurance Company contends that the district court erred in finding it liable for the full amount of respondent’s medical expenses instead of the reduced amount that respondent’s medical providers accepted based on their contractual agreements with Medica Choice (through MinnesotaCare) and Medicaid. Appellant also contends that the district court erroneously calculated the statutory interest award. Because we find no error in the district court’s decision, we affirm.

FACTS

In July 1993, respondent Jason Stout injured both of his knees in a car accident. His medical bills totaled $25,638.73— $9,184.90 for injuries to his right knee and $16,453.83 for injuries to his left knee. Respondent submitted a no-fault claim to appellant AMCO Insurance Company because it insured the vehicle that injured respondent in the accident. Appellant contested liability by first claiming that the policy did not cover the accident and later by claiming that the accident did not cause the left-knee injuries. After a jury determined that the automobile was being used for transportation purposes, the district court ordered appellant to pay no-fault and liability coverage for respondent’s injuries. After a second jury determined that the accident caused the left-knee injuries, the district court again ordered appellant to pay for respondent’s injuries.

Meanwhile, the Department of Human Services, through Medicaid and Medica Choice, had paid respondent’s medical bills in accordance with a fee schedule that limited what the medical-service providers could charge for their services. Pursuant to the fee schedule, Medicaid paid $4,341.28 to the medical providers, Medica Choice paid $987.44, and respondent paid $2,627.72. The medical-service providers accepted these payments as payments in full even though the payments were $13,167.29 less than the bills originally submitted.

Respondent brought an action to enforce the judgment when appellant refused to reimburse him for the full amount of the medical bills. The district court found that appellant was responsible for the full amount, up to the $20,000 policy limit, even though respondent would not be liable to the service providers for the $13,167.29 reduction in billing, and also found appellant liable under the statute for interest on the unpaid bills.

ISSUES

1. Did the district court err in determining the amount of respondent’s loss?

2. Does appellant have standing to claim entitlement to medical-expense benefits?

3. Did the district court err when it calculated statutory interest?

ANALYSIS

Statutory construction is a question of law, which this court reviews de novo. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 392-93 (Minn.1998).

1. Amount of loss

Appellant contends that the court should have determined that the amount of respondent’s loss was the amount due after the medical providers reduced respondent’s bills in accordance with their contractual agreements with Medicaid and Medica Choice. The district court rejected this argument for “three separate reasons.” The court found appellant’s position was inconsistent with the no-fault act’s purpose of ensuring prompt payment of expenses, inconsistent with the plain language of the act, and contrary to case law. We find no error in the district court’s reasoning.

The Minnesota No-Fault Automobile Insurance Act provides that “[bjasic economic loss benefits shall be primary.” Minn. Stat. § 65B.61, subd. 1 (2000). The act states that “economic loss benefits are payable monthly as loss accrues,” and “[l]oss accrues not when injury occurs, but as * * * medical ⅜ * * expense is incurred.” Minn.Stat. § 65B.54, subd. 1 (2000). Thus, under the plain language of the act, respondent incurred medical expenses each time he sought treatment, and the bills sent to respondent represent the expenses incurred.

Nevertheless, appellant contends that respondent did not suffer a $25,000 “loss” because the Department of Human Services paid his bills and its medical hen did not include the discounted portion of the bills. Under appellant’s theory, the time to measure loss would be after other insurers have stepped in and negotiated with the medical-service providers to discount the bill. As the district court noted in its memorandum, this argument contravenes two cases holding that a no-fault insurer cannot offset its obligation to pay benefits because other insurers have paid benefits. The Minnesota Supreme Court has held that a no-fault insurer cannot offset its obligation to pay benefits with the benefits already paid by a health-insurance provider. Wallace v. Tri-State Ins. Co., 302 N.W.2d 337, 340 (Minn.1980). And, relying on Wallace, this court held that a no-fault insurer could not offset its obligation to pay benefits with amounts paid by the U.S. Army. Hoeschen v. Mutual Serv. Cas. Ins. Co., 359 N.W.2d 677, 680 (Minn.App.1984), review denied (Minn. Mar. 6, 1985). We find both cases persuasive and hold that the Department of Human Services’ intervening acts do not alter appellant’s obligation to pay benefits.

Both Wallace and Hoeschen recognized that the injured party would receive a windfall if the no-fault insurer paid the full amount. The courts nonetheless ordered the no-fault insurer to pay because its obligation is primary. Wallace, 302 N.W.2d at 340; Hoeschen, 359 N.W.2d at 680. Appellant’s payment of those bills reinforces the act’s overriding purpose to “encourage appropriate medical and rehabilitation treatment * * * by assuring prompt payment for such treatment.” Minn.Stat. § 65B.42(3) (2000). We find unpersuasive appellant’s argument that its payment of the full amount would constitute an unauthorized, double penalty.

2. Standing

Appellant contends that respondent lacks standing.to recover the discounted portion of the bills because respondent has satisfied all his payment obligations. “To have standing, a plaintiff must show a personal stake in the outcome of the controversy, and must allege specific, concrete facts showing she has been personally harmed.” Villars v. Provo, 440 N.W.2d 160, 162 (Minn.App.1989) (citing Warth v. Seldin, 422 U.S. 490, 498-500, 95 S.Ct. 2197, 2205-06, 45 L.Ed.2d 343 (1975)). Even though respondent has no more out-of-pocket expenses, we find that he does have a personal stake in recovering all amounts to which he is entitled under the act. Therefore, he has a personal stake sufficient to satisfy standing requirements.

3. Interest calculation

Appellant contends that the district court erred in determining the date interest began to accrue. The no-fault act subjects an insurer to penalty interest on overdue payments of no-fault benefits. MinmStat. § 65B.54, subds. 1-2 (2000). Payments are overdue if not paid within 30 days of the date they are submitted. Id., subd. 1. Appellant cites no authority for its determination of the proper accrual date, and we find no error in the district court’s calculation of statutory interest.

DECISION

The district court properly held appellant liable for the full amount of respondent’s medical bills, did not err in concluding that respondent had standing, and properly calculated the penalty interest.

Affirmed.

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

      . Respondent, who was uninsured at the time, applied to the Department of Human Services for medical assistance and was accepted.


author: STONEBURNER, Judge

text:
    In the WELFARE OF T.N.Y.
    No. C3-00-2166.
    Court of Appeals of Minnesota.
    Aug. 28, 2001.

      Pamela Marie Miller, William J. Mavity, Mavity & Associates, Minneapolis, MN, (for appellant).
    Susan Gaertner, Ramsey County Attorney, Mark Nathan Lystig, Assistant Ramsey County Attorney, St. Paul, MN, (for respondent).
    Considered and decided by RANDALL, Presiding Judge, STONEBURNER, Judge, and HUSPENI, Judge.

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

   OPINION

STONEBURNER, Judge

Appellant T.N.Y. argues that the evidence is insufficient to support his adjudication of delinquency for' an assault in the second degree. Because the juvenile court based its finding of an intent to cause fear of immediate bodily harm solely on the effect T.N.Y.’s actions had on the victim police officer, and the record does not otherwise support a finding of intent, we reverse.

FACTS

St. Paul police executed a search warrant for appellant T.N.Y.’s family’s home. At the time, only children were in the home. The children testified that they were fearful based on the fact that their house had been shot at previously.

' Before entering the home, the police detonated a “flash-bang device” in the rear of the house for the purpose of distracting or frightening the people in the house. Three police officers entered the front door, using a bunker that displayed the word “POLICE .” The bunker shielded the three officers, who entered single file. A dog charged at Officer Donald Grundhau-ser, who entered first. He pushed the dog away, but when, the dog approached him again, he shot the dog, yelling “[ijt’s the dog.” Once inside, the officers announced their entry and looked to see if anyone was in the front of the house. They found no one. T.N.Y.’s sisters, ages 17 and nine, and his nine-year-old cousin were in the father’s bedroom. T.N.Y., age 13, and his brother, age 16, ran into another bedroom.

The officers proceeded down the hallway and kicked in a bathroom door. Then, T.N.Y.’s brother came out of the bedroom, and following the officers’ directions, he kneeled and then laid down in the hallway facing the officers just outside the bedroom door. T.N.Y. and his brother testified that the brother, not T.N.Y., had their father’s .22 caliber rifle in his hands when he dropped down on his knees. All three police officers testified that T.N.Y.’s brother did not have a gun and that as he laid down, T.N.Y. came out of the bedroom pointing the gun down the hallway in their direction. Officer Donald Chouinard yelled, “Gun,” and yelled more than once at T.N.Y., “Drop the gun, drop the gun.” Officer Chouinard testified that T.N.Y. was not sighting the weapon, did not point the gun in a threatening way directly at the officers, or indicate by his voice or manner that he was going to shoot. All three officers testified that T.N.Y. hesitated and then dropped the gun and layed down on top of it.

T.N.Y.’s counsel attempted to impeach the testimony of Officer Grundhauser and the third officer, John Wright, with their police reports. In their reports, written the day of the incident, both officers omitted the details that T.N.Y. had pointed the gun towards them or hesitated in dropping the gun upon their demands. Officer Chouinard was the only officer to write in his report that T.N.Y. looked out the bedroom door, pointed the gun down the hallway towards them, and took another step out the door before dropping the gun.

The juvenile court found the officers’ testimony “highly credible.” The court stated:

These officers were in a state of heightened alert given the dangerous situation that they found themselves in entering this home. When a human being is in that sense of heightened alert all of their senses are very acute. There was absolutely no hesitation at all by these officers [about] whom the individual was that they saw pointing the gun towards them. Indeed, the testimony at the conclusion of the state’s case of Officer Chouinard was absolutely chilling in terms of how frightened he still was at the prospect of what had transpired in the home nearly two months earlier. This kind of a situation, when a police officer finds him or herself with a gun being pointed at him or her and telling the individual to put the gun down, to put the gun down, and the individual is not responding, clearly understanding that it’s a police officer, is a very, very dangerous situation indeed. And in terms of the intent to cause fear or that being the result, that clearly was palpable to feel that from this officer some two months later.
⅜ ⅜ ⅝ #
I do think the state has met its burden of proof, * * * first of all, that Officer Chouinard was assaulted, that is being placed in fear as he has testified * * *.

The juvenile court found that all of the elements of the delinquency petition for assault in the second-degree had been proved beyond a reasonable doubt. T.N.Y. appeals.

ISSUE

Is the evidence sufficient, as a matter of law, to support appellant T.N.Y.’s adjudication for delinquency of assault in the second degree?

AlNALYSIS

On appeal from a determination that each of the elements of a delinquency petition have been proved beyond a reasonable doubt, “an appellate court is limited to ascertaining whether, given the facts and legitimate inferences, a fact-finder could reasonably make that determination.” In re Welfare of S.M.J., 556 N.W.2d 4, 6 (Minn.App.1996) (citing State v. Merrill, 274 N.W.2d 99, 111 (Minn.1978)). This court must assume that the fact-finder believed the state’s witnesses and disbelieved any contrary evidence. State v. McKenzie, 511 N.W.2d 14, 17 (Minn.1994); State v. Bias, 419 N.W.2d 480, 484 (Minn.1988).

T.N.Y. argues that the juvenile court erred in finding the testimony of the police officers about who had the gun more credible than his and his brother’s testimony. A fact-finder evaluates the credibility of witnesses and need not credit any exculpatory testimony. State v. Hough, 585 N.W.2d 393, 396 (Minn.1998). The officers’ reports and testimony consistently state T.N.Y. held the gun. Therefore, the juvenile court could reasonably find that T.N.Y., not his brother, held the gun.

T.N.Y. argues that the juvenile court cannot find that the police officers’ testimony was credible when their reports directly contradict that conclusion. See Dufrane v. Commissioner of Pub. Safety, 353 N.W.2d 705, 707 (Minn.App.1984) (stating because no evidence directly contradicted district court’s view that police officer’s testimony was more credible, court could make its own assessment of credibility). “Inconsistencies in testimony and conflicts in evidence do not automatically render the testimony and evidence false and are not bases for reversal,” especially when the victim is recounting a traumatic or stressful event. State v. Bakken, 604 N.W.2d 106, 111 (Minn.App.2000) (citations omitted), review denied (Minn. Feb. 24, 2000).

Although the court did not directly address the inconsistencies between the officers’ written reports and their testimony, the court expressly found the officers’ testimony more credible: “There was absolutely no hesitation at all by these officers.” The reports are not directly contradictory to their testimony but simply failed to include details later included in their testimony. In addition, Officer Chouinard’s police report and testimony are consistent with the other officers’ testimony. The juvenile court could reasonably conclude that the officers’ testimony was credible despite the fact that two reports did not provide the detail given in their testimony.

T.N.Y. argues that the evidence is insufficient to support the court’s finding that he intended to cause fear of immediate bodily harm, and that the juvenile court incorrectly based its finding of intent solely on the effect T.N.Y.’s actions had on Officer Chouinard. We agree.

A person commits assault in the second degree if he or she performs an act “with intent to cause fear in another of immediate bodily harm or death” or intentionally inflicts or attempts to inflict “bodily harm upon another” using a dangerous weapon. Minn.Stat. §§ 609.02, subd. 10, .222 (2000). The term “intentionally” is defined as:

[T]he actor either has a purpose to do the thing or cause the result specified or believes that the act performed by the actor, if successful, will cause that result.

Minn.Stat. § 609.02, subd. 9(3) (2000). The term “with intent to” means

[T]he actor either has a purpose to do the thing or cause the result specified or believes that the act, if successful, will cause that result.

Id. subd. 9(4) (2000).

Intent may be proved by circumstantial evidence, including drawing inferences from the defendant’s conduct, the character of the assault, and the events occurring before and after the crime. Davis v. State, 595 N.W.2d 520, 525-26 (Minn.1999). “ ‘The intent of the actor, as contrasted with the effect upon the victim, becomes the focal point for inquiry.’ ” Hough, 585 N.W.2d at 396 (quoting State v. Ott, 291 Minn. 72, 75, 189 N.W.2d 377, 379 (1971)). “The crime is in the act done with, intent to cause fear, not in whether the intended result is achieved.” Id.

The court incorrectly indicated that fear being the result of an act could, by itself, establish intent and found that Officer Chouinard’s fear of immediate bodily harm was “palpable * * * some two months later.” This analysis focuses solely on the officer’s fear and fails to indicate that the court considered the intent of T.N.Y., which must be the “focal point for inquiry.” See id. The court’s finding of intent does not indicate that the court considered T.N.Y.’s conduct, the character of the alleged assault, or the events occurring before and after the crime. Therefore, the juvenile court applied the wrong standard of intent by resting its finding solely on the effect that T.N.Y.’s actions had on Officer Chouinard.

Pointing a weapon at a police officer or another person has been held to supply the requisite intent to cause fear. See State v. Patton, 414 N.W.2d 572, 574 (Minn.App.1987) (concluding defendant brandished knife in a manner that the jury could have found that it was used as a dangerous weapon to cause fear in another of immediate bodily harm); see, e.g., State v. Kastner, 429 N.W.2d 274, 276 (Minn.App.1988) (stating defendant pointed scissors and screwdriver at victim, assumed a position which the victim considered offensive, and made threatening statements to victim), review denied (Minn. Nov. 16, 1988); State v. Soine, 348 N.W.2d 824, 827 (Minn.App.1984) (affirming defendant is convicted of second-degree assault because he brandished a knife “within striking distance” of his victim), review denied (Minn. Sept. 12, 1984). In this case, T.N.Y. was a 13-year-old child facing three police officers protected by a large bunker and pointing their weapons at him. T.NY. did not point the gun directly at the officers nor did he make any threatening comments or motions that would indicate he intended to shoot the gun. T.N.Y. merely hesitated before dropping the gun and complying with the officers’ directions. Therefore, the record is insufficient to support the court’s finding that beyond a reasonable doubt T.NY. intended to cause fear of immediate bodily harm.

DECISION

The juvenile court erred in finding an intent to cause fear of immediate bodily harm based solely on the effect T.N.Y.’s actions had on Officer Chouinard, and the record does not support his adjudication for delinquency of assault in the second degree.

Reversed.

      . A bunker is a large bulletproof shield with a small window, through which the officer looks.


author: SHUMAKER, Judge

text:
    SMA SERVICES, INC., a Minnesota Corporation, d/b/a Susan Lee & Associates, Appellant, v. Gerald Allen WEAVER, Respondent.
    No. C5-01-185.
    Court of Appeals of Minnesota.
    Aug. 28, 2001.

      Michael L. Perlman, St. Louis Park, MN, for appellant.
    Paul W. Chamberlain, Chamberlain Law Firm, Wayzata, MN, for respondent.
    Considered and decided by SHUMAKER, Presiding Judge, AMUNDSON and PARKER, Judges.

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

   OPINION

SHUMAKER, Judge

Appellant SMA Services, Inc., challenges the district court’s dismissal of its complaint premised on conversion of a corporate asset, arguing that the district court erred in ruling that the issue respecting the subject matter of the conversion claim had been determined in the marriage dissolution of the corporation’s sole shareholder and, therefore, the claim is barred by res judicata.

FACTS

During her marriage to respondent Gerald Weaver, Susan Weaver, now known as Susan Lee, formed appellant Minnesota corporation, SMA Services, Inc. Lee is the president, secretary, and sole shareholder of the corporation.

In October 1998, Lee removed Weaver’s name from all SMA business accounts at the Excel Bank. On July 15, 1999, while the parties’ marriage dissolution was pending, Weaver opened an additional SMA checking account and listed a new office address in care of himself. On August 3, 1999, Weaver requested that the bank transfer $25,000 from a legitimate SMA account to the new account Weaver had opened. The bank did so, relying on Weaver’s falsification of authority to transact business on SMA’s behalf.

When he learned of Weaver’s withdrawal, Lee’s attorney requested an emergency court hearing. After the hearing, the district court found that Weaver had no authority to withdraw funds from SMA’s account and that Weaver was aware of the provisions of the temporary order restraining transactions with the parties’ assets. The court ordered Weaver immediately to return the $25,000 to SMA and to cease all representations of involvement and all interference with the corporation. Despite the order, Weaver did not return the money to SMA.

Thereafter, Lee and Weaver negotiated a marital-termination agreement, which purported “to constitute a full, final and complete property settlement between the parties.” During the negotiations, the parties’ respective attorneys specifically discussed Weaver’s $25,000 indebtedness to SMA, but did not specifically mention it in the agreement. The judgment incorporated the marital termination agreement, awarding SMA Services, Inc., to Lee and all amounts in Weaver’s bank account to Weaver, and providing for the disposition of joint debts, separate debts, and undisclosed debts. The judgment is silent as to Weaver’s $25,000 indebtedness to SMA. Judgment was entered on June 8, 2000.

On June 29, 2000, SMA sued Weaver for damages for conversion of $25,000 from the SMA corporate bank account. Weaver moved to dismiss the action on the ground that the claim was barred by res judicata because it had previously been litigated and determined in the marriage dissolution between Weaver and Lee. SMA moved for summary judgment, contending that, because it was not a party to the dissolution, res judicata does not apply.

The district court denied SMA’s motion and granted Weaver’s motion, ruling that

[t]he issue before this court is the same issue addressed in prior litigation. The [pjlaintiff in this case was given a full opportunity to be heard. The prior judgment was based on a stipulation between the parties. There is privity between the parties. Accordingly, the case before the court is barred under the doctrine of res judicata.

SMA challenges this ruling on appeal.

ISSUE

While his marriage dissolution is pending, husband fraudulently obtains $25,000 from the bank account of a corporation in which wife is the sole shareholder, president, and secretary. Husband ignores the court’s order to return the money. The parties engage in settlement negotiations in the dissolution and enter into a marital termination agreement, which is incorporated in the judgment. The agreement and the judgment are silent as to the $25,000. The corporation later sues husband for conversion of the $25,000. Is the claim barred by res judicata?

ANALYSIS

Whether res judicata applies is a question of law, which we review de novo. Hennepin County v. Hanneman, 472 N.W.2d 149, 152 (Minn.App.1991), review denied (Minn. Aug. 29, 1991). Res judica-ta, or claim preclusion, bars all claims that were or should have been included in a claim already adjudicated. Hauser v. Mealey, 263 N.W.2d 803, 806 (Minn.1978).

Res judicata may take the form of either merger or collateral estoppel. Roseberg v. Steen, 363 N.W.2d 102, 105 (Minn.App.1985). Merger, or bar, operates to preclude a subsequent lawsuit on the same cause of action as to matters actually litigated and as to other claims or defenses that could have been litigated. Id. Collateral estoppel only applies to issues actually litigated and that were essential to a previous judgment. Id.

In determining the applicability of res judicata, the court considers whether (1) there was a final judgment on the merits, (2) a second suit involves the same cause of action, and (3) the parties to both were identical or were in privity with identical parties. Hauser, 263 N.W.2d at 807. If any of the three elements is not satisfied, res judicata will not apply. Thus, SMA’s June 29, 2000, complaint is barred by res judicata if it involves the same pertinent facts and law, the same claim as that determined in the marriage dissolution, and the same parties or persons in privity with those parties.

1. Final Judgment on the Merits

In the dissolution proceeding, Lee litigated the claim that Weaver converted $25,000 in funds belonging to the corporation that she owned. The temporary order of August 19, 1999, determined that Weaver had converted the funds and that he was obligated to repay them to the corporation. Because neither the order of August 19 nor its subject matter was mentioned in the final judgment, the order and its subject matter merged with the final judgment. See Trutnau v. Trutnau, 221 Minn. 462, 464, 22 N.W.2d 321, 322 (1946) (holding that where judgment is entered in a divorce case a prior order of the court becomes merged in the judgment and decree and is unenforceable unless specifically referenced in the judgment) (citation omitted). Because a judgment is a final judgment on the merits, Lee’s “conversion” claim was part of a final judgment. See Markert v. Behm, 394 N.W.2d 239, 242 (Minn.App.1986) (noting divorce decree is a final judgment on the merits).

2. Same Claims

“Two causes of action are the same when they involve the same set of factual circumstances or when the same evidence will sustain both actions.” Myers by Myers v. Price, 463 N.W.2d 773, 777 (Minn.App.1990), review denied (Minn. Feb. 4, 1991); see also Anderson v. Werner Continental, Inc., 363 N.W.2d 332, 335 (Minn.App.1985) (holding that claims are identical “if the same operative nucleus of facts is alleged in support of the claims”), review denied (Minn. June 24, 1985).

In the dissolution proceeding, Lee contended that Weaver illegally obtained the transfer to his personal bank account of $25,000 in funds belonging to Lee’s corporation. In the conversion action, SMA contended that Weaver illegally obtained corporate funds to which he was not entitled. The same operative nucleus of facts supports both the claim in the dissolution proceeding and in the conversion action. See Molenaar v. United Cattle Co., 553 N.W.2d 424, 430-31 (Minn.App.1996) (conversion is “an exercise of dominion over the property of another that deprives the owner of possession for an indefinite period of time.”), review denied (Minn. Oct. 15, 1996). No matter what labels are used, the claims in both actions are the same and the same circumstances and evidence are involved for both.

3. Same Parties

Before res judicata will apply, the parties to the separate actions must either be identical or in privity with identical parties. McMenomy v. Ryden, 276 Minn. 55, 58, 148 N.W.2d 804, 807 (1967). “Privity”

expresses the idea that as to certain matters and circumstances, people who are not parties to an action but who have interests affected by the judgment as to certain issues in the action are treated as if they were parties.

Johnson v. Hunter, 435 N.W.2d 821, 823 (Minn.App.1989), rev’d in part on other grounds, 447 N.W.2d 871, 876 (Minn.1989). Privies are those so connected with one another in law as to be identified with each other in interest.- Id.

An individual who has full ownership of a corporation and is in complete control of its affairs is presumed to have a sufficient common interest to be in privity with the corporation.

Miller v. Northwestern Nat’l Ins. Co., 354 N.W.2d 58, 62 (Minn.App.1984) (citations omitted). The parties to this appeal agree that privity is the controlling issue.

Although we recognize SMA is a separate legal entity, Lee solely owned and controlled that entity when she made the claim in the dissolution proceeding that Weaver illegally obtained corporate funds. Thus, under Miller, Lee was in privity with the same party making the claim in the conversion action. Furthermore, because of Lee’s ownership of the corporation, SMA was an asset in the dissolution over which the district court had jurisdiction. See Minn.Stat. § 518.58, subd. 1 (2000) (court has jurisdiction over distribution of parties’ marital property in dissolution proceedings).

DECISION

Because all three factors of res judicata have been satisfied, the district court did not err in ruling that SMA Services, Inc., is precluded from bringing its conversion claim against Weaver.

Affirmed.