author: PORITSKY, Judge.

text:
    In re the MARRIAGE OF Douglas Allan SAMMONS, Petitioner, Respondent, Jennifer Ann Sartwell, f/k/a Jennifer Ann Sammons, Respondent, v. Eleanor A. Sammons, Appellant.
    No. C0-01-1650.
    Court of Appeals of Minnesota.
    April 9, 2002.

      Douglas Alan Sammons, Crystal, MN, pro se respondent; and Jeanette M. Tuzin-ski, Tuzinski & Zick, LLC, Minneapolis, MN, for respondent.
    Esther E. McGinnis, Warren E. Peterson, Peterson, Fram & Bergman, P.A., St. Paul, MN, for appellant.
    Considered and decided by RANDALL, Presiding Judge, KLAPHAKE, Judge, and PORITSKY, Judge.
   OPINION

PORITSKY, Judge.

Eleanor Sammons (“Sammons” or “Eleanor Sammons”) appeals an order denying her motion to vacate selected portions of the dissolution decree that terminated the marriage of her son, Douglas Sammons (“Douglas Sammons”) and his wife, respondent, Jennifer Sartwell. Specifically, Eleanor Sammons challenges those provisions of the decree that impose a constructive trust in favor of Sartwell upon certain properties belonging to Sam-mons. Because the district court did not have jurisdiction to enter a judgment that adversely affected Sammons’s rights when Sammons was not a party to the proceeding, we reverse the district court decision and vacate those provisions of the decree that impose a constructive trust upon Sam-mons’s property.

FACTS

In January 2001, Jennifer Sartwell and Douglas Sammons were divorced after a lengthy separation period beset with court battles. Sartwell and Douglas Sammons had been married since 1988. During their marriage, the couple experienced recurring financial problems relating to both Douglas Sammons’s business (Diversified Securities — -a company providing home security system installation service) and their personal affairs. In 1992, the couple’s failure to make mortgage payments caused them to lose their home. Eleanor Sammons purchased a home for them at 4101 Jersey Ave, in Crystal, Minnesota. Douglas Sammons and Sartwell took title to the home through a warranty deed from Eleanor Sammons in 1994 and assumed the mortgage.

In early 1997, after having his business’s federal and state tax ID numbers revoked for failure to pay sales tax, Douglas Sam-mons sold the remaining assets of Diversified Securities to his mother’s business (Mobile Lock and Safe Co.) for $6,000. Douglas Sammons and Sartwell also executed a promissory note to Eleanor Sam-mons in the amount of her unpaid house-related expenses. Eleanor Sammons also re-acquired the title to the house and moved in with the couple and their children. Sartwell claims that Douglas Sam-mons told her that the purpose of the property transfers to his mother was to protect their home and his business assets from the IRS if complications arose from his tax problems.

In June of 1999, Sartwell and Douglas Sammons entered into a marital termination agreement. According to Sartwell, she was tricked into believing that the purpose of this agreement was not to dissolve the marriage, but to allow Douglas Sammons to regain ownership of his business and his home from his mother. Sart-well maintains she was told that Eleanor Sammons would never sign the home or business back to her son while he was married to Sartwell. The properties were never transferred back to Douglas Sam-mons, and in August of that same year, Douglas Sammons told Sartwell to vacate the house.

Through a series of temporary orders in a domestic abuse proceeding, Sartwell had both Douglas and Eleanor Sammons removed from the house. Ultimately these orders were vacated, and Douglas and Eleanor returned to the home while Sart-well moved into a nearby apartment. In December 1999, in the dissolution proceeding, the district court ordered Douglas Sammons to pay spousal maintenance and child support. Over the ensuing months, Douglas Sammons made no payments to Sartwell. As a result, contempt-of-court proceedings were initiated against Douglas Sammons. In May 2000, Hennepin County prepared a motion and show cause order, the effect of which would have been to join Eleanor Sammons as a party in interest, but Sammons claims she never received the order, and the record does not show that this order was ever served on her. Nor does the record show that an order was entered joining her as a party in the dissolution.

On September 15, 2000, a hearing in the dissolution was held to sort out maintenance and property distribution issues. At the hearing, Douglas Sammons maintained that he was honoring the June 1999 marital termination agreement, which provided for no maintenance payments. Douglas Sammons also stated that he could not pay maintenance in any event, because he was not employed. According to him, his mother would not let him work for her because she did not want Jennifer Sartwell to be able to garnish his wages. Douglas Sammons also stated that he had no ownership interest in either the house or Diversified Securities, Inc., because he transferred the house and sold the business, both to his mother, in 1997 for legitimate financial reasons.

On January 19, 2001, the district court issued its decree. In relevant part, the decree found that Sammons was holding in a constructive trust for her son the following properties: the family home, the assets of Diversified Securities, Inc., and the business property where Mobile Lock and Safe Co. is located. The court awarded Sartwell a mortgage interest in the amount of $10,664.82 on the homestead and a mortgage interest in the amount of $50,000 on the business property and assets, both payable to Sartwell within ninety days of the entry of judgment. Douglas Sammons never made these payments, and Sartwell began a proceeding to reclaim the properties.

In April of 2001, Eleanor Sammons moved to vacate the portions of the dissolution decree that created the constructive trust. In August, the court denied this motion on the ground that Sammons had no standing to challenge any part of the decree because of her failure to join the dissolution proceedings as a party in interest. The court also reiterated that a constructive trust was an appropriate instrument through which the court could gain jurisdiction over the property and distribute it between the parties, due to the fraudulent nature of the property transfers that occurred between Douglas and Eleanor Sammons. At the motion hearing, Sartwell agreed to remove from the constructive trust the property upon which the Mobile Lock and Safe Co. is located, and the court modified the decree accordingly.

On appeal, Eleanor Sammons argues that the district court should have vacated its decree because (1) it lacked jurisdiction over her and her property, and (2) the court erred in imposing a constructive trust upon Sammons’s property because no fraudulent transfers occurred between her and her son. Sartwell argues (1) that Sammons has no right to make this appeal because (a) an order denying a motion to vacate is not an appealable order when the time to appeal the original judgment has expired, and (b) Sammons has no standing to appeal, and (2) that in any case, the district court properly created a constructive trust. In a separate motion, Sartwell has also requested attorney fees for the appeal. Sammons opposes the motion.

ISSUES

I. Is the district court’s order denying Sammons’s motion to vacate portions of the judgment an appealable order?

II. Does Sammons have standing on appeal to challenge those portions of the decree that impose a constructive trust upon her property?

III. Did the court err in imposing a constructive trust upon Sammons’s property?

IV.Is Sartwell entitled to attorneys’ fees on appeal?

ANALYSIS

I.

The denial of a post trial motion to vacate a final judgment is generally not appealable. Angelos v. Angelos, 367 N.W.2d 518, 519 (Minn.1985). Parties may not extend their time to appeal the original judgment by filing a motion to vacate. Carlson v. Panuska, 555 N.W.2d 745, 746 (Minn.1996). The supreme court has held, however, that in some cases denials of motions to vacate may be appealable. Fink v. Shutt, 445 N.W.2d 869, 870 (Minn.App.1989). The critical factor is whether the party appealing participated in the original action, so that an appeal from the judgment would allow the party to also raise the propriety of its vacation. Spicer v. Carefree Vacations, Inc., 370 N.W.2d 424, 425 (Minn.1985). If the party seeking to appeal did not participate in the proceedings leading to the judgment, then an appeal from the judgment would present no issue for appeal on review. Fink, 445 N.W.2d at 870.

Here, the district court rejected Sammons’s motion to vacate, reasoning that Sammons could have intervened in the dissolution. However, whether Sam-mons knew of the dissolution and consciously bypassed an opportunity to join the proceedings is irrelevant. According to Spicer, “[t]he appealability of an order refusing to vacate a * ⅜ * judgment does not depend on whether a defendant had actual knowledge of the suit before the time to appeal from the judgment has expired.” Spicer, 370 N.W.2d at 425 (citation omitted). It is undisputed that, regardless of whether she knew of the dissolution proceeding, Sammons was not a party to it. Because Sammons was never a party to the proceeding and because the decree affected her property interests, appealing the denial of her motion to vacate is the only method by which her arguments can be presented for appellate review. We conclude that Sammons has the right to appeal from the order denying her motion to vacate.

II.

“Standing is a jurisdictional question to be determined by this court.” In re Implementation of Util. Energy Conservation Improvement Programs, 368 N.W.2d 308, 312 (Minn.App.1985).

The district court found that Sam-mons had no standing to make her motion to vacate because she was not a party to the dissolution proceeding. Relying on this finding, Sartwell argues that Sam-mons should have no standing to make this appeal. We disagree. There are two separate responses to Sartwell’s argument, both of which are persuasive.

First, although we have not been directed to any Minnesota authority directly on point, the general rule is that a person may appeal from a judgment that adversely affects his or her rights, even if the person was not a party to the proceeding below.

As a general rule a party or a privy to the record, or one who is injured by the judgment, or who will be benefited by its reversal, may appeal or sue out a writ of error.

4 C.J.S., Appeal and Error, § 156 (emphasis added) (footnote omitted); see In re Estate of Strong, 194 Ill.App.3d 219, 141 Ill.Dec. 155, 550 N.E.2d 1201, 1206 (1990) (“A nonparty has standing to appeal if he has a direct, immediate and substantial interest in the subject matter, which would be prejudiced by the judgment or benefited by its reversal.”).

Second, Minnesota case law, although not directly on point, supports Sammons’s right to a review of an order that adversely affects her rights. Whether a person participated in the underlying proceedings is not determinative of whether that person has standing to appeal the underlying decision. In re Estate of Magnus, 444 N.W.2d 295, 297-98 (Minn.App.1989) (stating that lack of participation in underlying proceeding does not defeat standing to appeal, so long as reviewing court limits scope of appeal to record formed at underlying proceeding; opinion does not address the question of whether the appellants were parties). A party who does not participate in proceedings leading to a default judgment nonetheless has a right to appeal from an order refusing to vacate the judgment. Fink, 445 N.W.2d at 870 (party seeking to appeal had knowledge of underlying proceeding). The denial of a motion to vacate a default judgment is appealable even if the moving party was served with process in connection with, or had actual notice of, the underlying proceeding. Spicer, 370 N.W.2d at 425 (moving party had been served with process in connection with underlying proceeding).

In both Fink and Spicer, defendants had a right to appeal from default judgments. In each case, the defendants had been served with process and were made parties. Thus, they had a clear opportunity to participate in the proceedings prior to the entry of the judgments against them. They were nonetheless allowed to appeal from orders denying their motions seeking relief from the judgments. In our opinion, Sammons is entitled to at least the same right to review as was granted the appellants in Fink and Spicer, since she was not served with process and not made a party in district court, and so never had the opportunity in that court to defend her rights to her property.

Sartwell further contends that Sammons lacks standing to appeal because Sammons knew of the proceedings all along and awaited the outcome before deciding to act. As noted above, the fact that Sam-mons may have had actual knowledge of the pending dissolution action does not prevent her from appealing the denial of her motion to vacate. Id.; Fink, 445 N.W.2d at 870. Moreover, regardless of what Sammons knew of her son’s dissolution, there is no indication in the record that she was served with any pleading indicating that the court was being asked to grant relief against her. As a result, Sammons never received formal notice of Sartwell’s request to impose a constructive trust upon Sammons’s property. We conclude that Sammons was under no obligation to intervene, and her failure to do so does not deprive her of standing to appeal.

III.

Turning to the merits of the appeal, we conclude that district court was without jurisdiction to impose a constructive trust upon Eleanor Sammons’s property. The legal title to the property involved was solely in Sammons’s name. As we have noted, at no time was Sammons a party to the dissolution. The court thus did not have personal jurisdiction to enter a judgment affecting her rights to her property. The district court may not exercise jurisdiction over a nonparty. In re Ferlitto, 565 N.W.2d 35, 37 (Minn.App.1997) (where wife’s attorney was not a party to the dissolution proceeding, district court did not have jurisdiction to order attorney to pay husband $5,000 that wife had taken from parties’ home and used to pay attorney his fees.)

Although it is not clear, it appears that the district court may have been proceeding under the theory that it gained quasi-in-rem jurisdiction over the property in question by reason of Douglas Sammons’s fraudulent (as the court found) transfers of the property to his mother. This theory cannot withstand due-process scrutiny. Government action may not deprive individuals of liberty or property interests without due process, as guaranteed by the Fifth and Fourteenth Amendments of the United States Constitution and Article I, Section 7 of the Minnesota Constitution. See Sartori v. Harnischfeger Corp., 432 N.W.2d 448, 453 (Minn.1988) (stating that due process guarantees are the same under both state and federal constitutions). Due process protections include “notice, a timely opportunity for a hearing, the right to be represented by counsel, an opportunity to present evidence and argument, the right to an impartial decisionmaker, and the right to a reasonable decision based solely on the record.” Humenansky v. Minnesota Bd. of Med. Exam’rs, 525 N.W.2d 559, 565 (Minn.App.1994) (citing Goldberg v. Kelly, 397 U.S. 254, 267-68, 90 S.Ct. 1011, 1020, 25 L.Ed.2d 287 (1970)), review denied (Minn. Feb. 14, 1995). Sammons was not provided with any of these protections prior the district court’s entry of the judgment against her in the dissolution proceeding.

Sartwell contends that because Sam-mons responded by affidavit to another related court matter, this is enough to prove that she had actual notice of her potential involvement in the dissolution proceeding. Sartwell further contends that she requested a constructive trust in one of her pleadings. Based on these facts, Sartwell argues that Sammons should have known that her property was in jeopardy and should not be able to argue on appeal that she did not get sufficient notice. As we stated earlier, however, although Sammons may have had actual notice of the pendency of the dissolution, the record does not show that she had notice that the decree would affect her property interests, nor does it show that she was even aware that Sartwell made a request implicating her property. Despite the arguments raised by Sartwell, any knowledge Sammons may have had about the dissolution proceeding did not give the court personal jurisdiction over her, nor did such knowledge equate to the due process guarantees of required notice and opportunity to be heard.

One of the conclusions of law on which the district court relied when it denied Sammons’s motion to vacate was her failure to intervene in the proceeding pursuant to Minn. R. Civ. P. 24. On appeal, Sartwell cites Erickson v. Bennett, 409 N.W.2d 884, 886-87 (Minn.App.1987), for the proposition that a would-be intervenor is not allowed to await the outcome of a proceeding before deciding to intervene. The conclusion of law reached by the district court and Sartwell’s argument both imply that Sammons had some affirmative duty to intervene in this proceeding, and her failure to do so allowed the district court to distribute her property even though she was not a party. This conclusion is, as a matter of law, incorrect. First, there is no support in Minnesota caselaw for the proposition that if a person could have intervened but did not, the court can nonetheless enter a judgement against that person. Second, the line of cases upon which Sartwell relies is inappo-site because it holds only that the district court does not generally favor post-trial intervention. Brakke v. Beardsley, 279 N.W.2d 798, 801 (Minn.1979). In the present case, Sammons is not attempting to intervene. She is, instead, appealing the denial of a motion to vacate.

Because (1) the district court did have personal jurisdiction over Sammons, and (2) any assertion of quasi-in-rem jurisdiction over her property violated Sammons’s right to due process, we conclude that the district court erred when it imposed a constructive trust upon Sammons’s property. In light of this conclusion, we need not address Sartwell’s claim that Sammons’s actions were a proper basis for the district court to impose such a trust.

IV.

Minn.Stat. § 518.14 allows this court to award attorneys’ fees on appeal if: 1) the fees are necessary for the good faith assertion of the party’s rights; 2) the party from whom the fees are sought has the means to pay them; and 3) the party seeking fees does not have the means to pay them. Minn.Stat. § 518.14, subd. 1, (1) — (3) (Supp.2001). Sartwell claims she cannot afford to pay her attorneys’ fees on appeal. She also claims that Sammons has the ability to pay them for her. While Sartwell supports the claim that she cannot pay her fees, she does not make a showing that Sammons has the ability to pay those fees. Moreover, Sammons does provide documentation, in the appendix to her reply brief, to support her claim that she is not able to pay Sartwell’s fees. Given these facts, it does not appear that Sartwell has established the existence of those elements required by section 518.14 that would entitle her to need-based attorneys’ fees. See Niemi v. Schachtsdmeider, 435 N.W.2d 117, 119-20 (Minn.App.1989) (holding party not entitled to award of attorneys’ fees because she failed to adequately demonstrate a disparity in the financial resources of the parties).

Nor is it appropriate to award conduct-based attorneys’ fees to Sartwell. Section 518.14 allows conduct-based fees to be awarded “against a party who unreasonably contributes to the length or expense of the proceeding.” For the court to award conduct-based fees, the conduct must have occurred within the litigation; behavior occurring outside of the litigation process is not a basis for such fees. Geske v. Marcolina, 624 N.W.2d 813, 819 (Minn.App.2001). There is nothing in the record to suggest that Sammons’s actions within the present appeal contributed unreasonably to the length or expense of the appeal.

DECISION

Because the district court did not have personal jurisdiction over Sammons, and because the assertion of quasi-in-rem jurisdiction over Sammons’s property violated Sammons’s due process rights, we reverse the district court’s decision and vacate those portions of the dissolution decree that impose a constructive trust upon: (1) the real property located at 4101 Jersey Avenue North, Crystal, Minnesota; and (2) the business known as Diversified Security and Mobile Lock & Safe Company. We deny Sartwell’s motion for attorney fees on appeal.

Reversed; motion denied.

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

      . Sartwell actually argues that Sammons appeared in the dissolution proceeding, but this is a misstatement. Sammons appeared in the domestic abuse proceeding, which was a separate action.


source: Caselaw Access Project

license: Public Domain

text:
    In re the Marriage of Kathleen Sue CLARK, Petitioner, Appellant, v. Steven Craig CLARK, Respondent.
    No. CX-01-1428.
    Court of Appeals of Minnesota.
    April 16, 2002.

      Lawrence Downing, Lawrence Downing & Associates, Rochester, for appellant.
    Steven K. Murakami, Bagniefski & Mu-rakami, P.P.L.P., Rochester, for respondent.
    Considered and decided by RANDALL, Presiding Judge, KLAPHAKE, Judge, and PORITSKY, Judge.
   OPINION

PORITSKY, Judge.

Appellant-mother Kathleen Clark petitioned to dissolve her marriage to respondent-father Steven Clark. Discovery disputes occurred regarding whether father fully produced his financial information. After the parties entered into an oral stipulation in court, mother discharged her attorney before the attorney could draft a proposed judgment. Father’s attorney drafted a proposed judgment, but mother’s new attorney objected to entry of a judgment based on it. The court nonetheless adopted father’s proposed judgment. Mother moved to reopen under Minn.Stat. § 518.145, subd. 2 (2000). The district court denied mother’s motion. Mother appeals, challenging the entry of a judgment based on father’s proposed judgment and the denial of her motion to reopen. Both parties seek attorney fees on appeal and to strike portions of the other party’s brief. We affirm in part, reverse in part, and remand. We deny the parties’ motions to strike and remand their motions for fees on appeal.

FACTS

The parties married in 1978 and had four children. Mother’s employment during the marriage was limited. In 1994, father was laid off and received a severance package that he used to go back to school. In 1996, the family started receiving public assistance, and in 1997, father finished school and received a teaching certificate. By spring 1998, the family had accumulated substantial debt but was off public assistance.

The parties separated in July 1999, and father started making monthly support and maintenance payments. Also in July, father liquidated a savings plan, netting $56,164.70 after taxes. He put the money in a joint account and used some of it to pay debts. Mother transferred $80,000 from that account into a second account, which had been a joint account but which she had converted to an account in her name only. Father maintains he learned mother had transferred the money out of the first account when the bank told him he lacked the funds to pay the debt on mother’s car. He also alleges that he did not know mother had converted the second account to an account in her name only. Because he still had the PIN number for the previously-joint second account, he was able to transfer $25,000 back to the first account. At this point, the bank froze the funds, though whether it did so in response to mother’s request to do so or based on bank policy is disputed.

At the time father admitted service of mother’s dissolution papers in September 1999, the parties had three remaining minor children. Also, father, in addition to his teaching, was active in a soccer association and earned soccer-related money. During pretrial proceedings, discovery disputes occurred regarding whether father made full financial disclosure, especially his soccer-related income and his disposition of the savings-plan funds. Mother replaced her first attorney. The parties nonetheless negotiated a stipulation.

On the trial date, the parties read a stipulation into the record. The district court directed mother’s attorney to draft a proposed judgment. Mother, however, discharged her attorney. Notwithstanding, mother’s former attorney, although recently discharged, tendered a proposed judgment. Father’s attorney sent mother’s former attorney a letter objecting to various provisions in the proposed judgment. By this time, mother hired a third attorney. The district court directed father’s attorney to prepare a proposed judgment, and mother’s third attorney sent the district court a letter objecting to the proposed judgment, alleging that it was unfair and that certain provisions went beyond the scope of the stipulation. The letter also sought a hearing regarding father’s proposed judgment. The district court adopted father’s proposed judgment. When the court did so, it did not have a transcript of the oral stipulation. Mother then moved to reopen the resulting judgment under Minn.Stat. § 518.145, subd. 2 and subsequently provided the district court with a transcript of the stipulation. Mother also made a supplemental motion regarding her attempt to reopen the judgment under Minn.Stat. § 518.145, subd. 2, alleging father had misrepresented his income. The district court denied mother’s motion to reopen based on its application of the analysis set out in Tomscak v. Tomscak, 352 N.W.2d 464 (Minn.App.1984) and denied her supplemental motion as untimely. Mother appeals. Each party seeks both attorney fees on appeal and to strike portions of the other party’s brief.

ISSUES

1. Did the district court abuse its discretion in refusing to vacate the parties’ stipulation?

2. Did the district court err in entering a judgment on the stipulation?

3. Did the district court abuse its discretion by denying mother’s motion to reopen the stipulated judgment?

4. Is either party entitled to attorney fees on appeal?

ANALYSIS

I.

Before the district court acted on father’s proposed judgment, mother sent the court a letter objecting to the proposed judgment. Prior to the time judgment is entered on an oral stipulation, a party may seek relief in either or both of two ways. First, the party can seek to withdraw from or vacate the stipulation upon which the proposed judgment is based. See Shirk v. Shirk, 561 N.W.2d 519, 521-22 (Minn.1997) (addressing withdrawal from and vacation of dissolution stipulations). Second, the party can attack the proposed judgment, alleging that the proposed judgment does not accurately reflect the parties’ stipulation. See Minn. R. Gen. Pract. 307(b) (addressing procedure for entering dissolution judgments based on stipulations). Dissolution stipulations are “accorded the sanctity of binding contracts” and a party to a dissolution stipulation cannot withdraw from or repudiate a dissolution stipulation without obtaining either the other party’s consent, or leave of the court for good cause. Shirk, 561 N.W.2d at 521-22. For this reason, absent the other party’s consent, “the court’s permission, and hence a motion, [are] required ” for a party to be relieved of a stipulation. Toughill v. Toughill, 609 N.W.2d 634, 638 (Minn.App.2000) (emphasis added) (footnote omitted). Here, because mother’s letter to the district court was not a motion seeking to vacate the stipulation, any attempt by mother to vacate the stipulation under Shirk was defective and the district court did not abuse its discretion by refusing to vacate the parties’ stipulation.

II.

Mother argues that the district court erred by approving father’s proposed judgment. Citing Minn. R. Gen. Pract. 307(b), she alleges that father’s proposed judgment did not accurately reflect the parties’ stipulation. Rule 307(b), which sets out the procedure for entering a judgment based on a dissolution stipulation, states:

Where a stipulation has been entered orally upon the record, the lawyer directed to prepare the decree shall submit it to the court with a copy to each party. Unless a written, fully executed stipulation is filed or unless the decree contains the written approval of the lawyer for each party, a transcript of the oral stipulation shall be filed by the lawyer directed to prepare the decree. * * * Entry of a decree shall be deferred for 14 days to allow for objections unless the decree contains the written approval of the lawyer for each party.

Interpretation and application of procedural rules are legal issues that are reviewed de novo. Olson v. Synergistic Technologies Bus. Sys., Inc., 628 N.W.2d 142, 163 (Minn.2001); Whalen ex rel. Whalen v. Whalen, 694 N.W.2d 277, 280 (Minn.App.1999). In a case like the present one, where the proposed judgment is based on an oral stipulation, and where the proposed judgment does not contain the written approval of the lawyer for each party, Rule 307(b) contemplates the following procedure: (1) The lawyer who prepares the proposed judgment shall submit it to the court, with copies to each party; (2) The same lawyer shall file with the court a transcript of the stipulation; (3) Before entering judgment, the court shall wait 14 days from the date the transcript is filed and the proposed judgment is served and filed (and if they are filed separately, from the date the later is filed) to allow for objections; (4) If no objection is received with 14 days, the court is free to enter the proposed judgment as the judgment of the court. If any objections are made, the court is obliged to examine the objections and transcript to decide on the appropriate procedure before entering the decree.

Here, father’s proposed judgment was filed on April 2, 2001. On April 5, mother’s attorney sent a letter to the court, objecting to entry of the proposed judgment. The court approved the proposed judgment a week later, and judgment entered on the order for judgment on April 17. We initially note that because Rule 307(b) does not require a motion, the fact that mother made her objections to father’s proposed judgment by letter is sufficient. At the time the judgment was entered, however, the transcript had not been filed. Upon receiving mother’s objections, the court was obliged to defer entering judgment until the transcript was filed and the 14 day period had run.

Mother alleges that the district court erred in adopting father’s proposed judgment because it included provisions beyond those in the stipulation and therefore the parties could not have had a meeting of the minds on those provisions. See Ryan v. Ryan, 292 Minn. 52, 55, 193 N.W.2d 295, 297 (1971) (noting settlement of lawsuit requires “a meeting of the minds on the essential terms of the agreement”). While a district court has the discretion to accept all or part of a proposed stipulation, “generally, [a district court] cannot, by judicial fiat, impose conditions on the parties to which they did not stipulate and thereby deprive the parties of their ‘day in court.’ ” Toughill, 609 N.W.2d at 638-39 n. 1. Here, since father submitted neither a transcript nor the written approval of counsel for both parties, there was no compliance with 307(b). Because Rule 307(b) was not complied with, the district court erred when it signed the proposed judgment.

Mother did, however, later provide the district court a transcript of the stipulation hearing sometime between her May 4 motion to reopen the judgment under Minn. Stat. § 518.145, subd. 2 and her June 8 supplemental motion. In the district court’s memorandum accompanying its order denying mother’s motion to reopen the judgment under Minn.Stat. § 518.145, subd. 2,' the court stated that it had reviewed the transcript and, based on that review, was rejecting mother’s allegations that the proposed judgment did not accurately reflect the parties’ stipulation. Although the court’s analysis of mother’s objections came after the judgment was signed, the error is harmless because Mother received the review that she would have received had the court complied with Rule 307(b). Cf. Minn. R. Civ. P. 61 (stating harmless error to be ignored).

III.

Mother also challenges the district court’s denial of her motion to reopen the judgment under Minn.Stat. § 518.145, subd. 2 (2000). Whether to reopen a dissolution judgment under Minn.Stat. § 518.145, subd. 2, is discretionary with the district court. Haefele v. Haefele, 621 N.W.2d 758, 761 (Minn.App.2001), review denied (Minn. Feb. 21, 2001). Here, the district court denied mother’s motion, basing its ruling on a Tomscak analysis. Tomscak, however, becomes inapplicable once judgment is entered because the “sole relief’ from a stipulated dissolution judgment “lies in meeting the requirements of Minn.Stat. § 518.145, subd. 2.” Shirk, 561 N.W.2d at 522; see Toughill, 609 N.W.2d at 640 (stating “sole” relief from stipulated dissolution judgment lies in satisfying MinmStat. § 518.145, subd. 2, because that statute “functionally overruled Tomscak and its progeny to the extent that those cases allowed vacation of stipulation-based dissolution judgments on grounds other than those listed in the statute”). Therefore, the district court erred in applying the Tomscak analysis to resolve mother’s motion to reopen the judgment under Minn.Stat. § 518.145, subd. 2. An incorrect application of the law constitutes an abuse of the district court’s discretion. See, e.g., Ayers v. Ayers, 508 N.W.2d 515, 518 (Minn.1993) (noting incorrect application of law is an abuse of discretion in custody-cases); Shepard v. City of St. Paul, 880 N.W.2d 140, 143 (Minn.App.1985) (same regarding attorney fees) (citing Jorstad v. IDS Realty Trust, 643 F.2d 1305, 1312 (8th Cir.1981)). Therefore, we reverse the district court’s denial of mother’s motion to reopen. On remand the district court shall address mother’s request for relief under Minn.Stat. § 518.145, subd. 2 and shall do so by applying the analysis applicable to a motion brought under that statute.

Because mother’s supplemental motion was made three days before the hearing on her motion to reopen the judgment, the district court correctly ruled that the supplemental motion was untimely. Minn. R. Gen. Pract. 303.03(a)(1).

IV.

By motion, both parties seek attorney fees on appeal. Neither party’s motion cites authority for their request. See Minn. R. Civ.App. P. 139.06, subd. 1 (requiring motions for attorney fees on appeal to be supported by adequate documentation). Attorney fees are not recoverable absent specific authority allowing their recovery, and dissolution cases can potentially involve several bases for attorney fees, each basis having different requirements for a fee award. Geske v. Marcolina, 624 N.W.2d 813, 816 (Minn.App.2001). Review of the parties’ papers, however, renders it clear that both seek need-based attorney fees under Minn.Stat. § 518.14, subd. 1 (2000). For this reason we will address those aspects of their motions. To the extent either party sought fees for any other reason, their motion is denied.

Attorney fees under Minn.Stat. § 518.14, subd. 1 may be awarded at “any point in the proceeding.” And whether to award need-based attorney fees on appeal is discretionary with this court. Case v. Case, 516 N.W.2d 570, 574 (Minn.App. 1994). Need-based attorney fees as well as costs and disbursements “shall” be awarded “in an amount necessary to enable a party to carry on or contest the proceeding” if the court finds (a) the fees are necessary for a good-faith assertion of rights; (b) the payor has the ability to pay the award; and (c) the recipient lacks the ability to pay his or her own fees. Minn. Stat. § 518.14, subd. 1. Here, a major part of mother’s motion to reopen the judgment under Minn.Stat. § 518.145, subd. 2 is based on her assertions that father fraudulently failed to disclose his income. See Doering v. Doering, 629 N.W.2d 124, 129-30 (Minn.App.2001) (stating, for purposes of reopening a dissolution judgment for fraud under Minn.Stat. § 518.145, subd. 2, fraud includes a party’s failure to make full disclosure), review denied (Minn. Sept. 11, 2001). If, in further proceedings, the district court finds that father had more income than he revealed, such a finding will affect his ability to pay, or receive, fees. The existence of fraud is a factual question. See, e.g., Doering, 629 N.W.2d at 130 (noting district court may summarily dispose of fraud claim only if there are no disputed facts). This court cannot resolve that question. See Kucera v. Kucera, 275 Minn. 252, 254, 146 N.W.2d 181, 183 (1966) (stating “[i]t is not within the province of [appellate courts] to determine issues of fact on appeal”). For that reason, father’s income, and hence his ability to pay his own or mother’s attorney fees, is unclear. We remand both parties’ requests for need-based attorney fees on appeal to be addressed by the district court in light of its determinations on the other remanded issues. See Geske, 624 N.W.2d at 819-20 (remanding issue of appellate attorney fees for determination in light of rulings made on remand).

Having reviewed the record and the portions of each party’s brief that the other party seeks to strike, we deny both parties’ motion to strike as referring to information in the record or as unnecessary in light of our resolution of this appeal, or both. See Minn. R. Civ. P. 110.01 (defining record on appeal as documents submitted to district court).

DECISION

Because mother did not file a motion to vacate the parties’ stipulation, the district court did not abuse its discretion by not vacating the stipulation. Relief under Minn. R. Gen. Pract. 307(b) does not require a motion and mother’s letter was adequate to raise a request for relief under that rule. Although the district court erred when it signed father’s proposed judgment, because it did not have the transcript required by Rule 307(b), the error is harmless because upon mother’s motion to reopen the judgment, the court reviewed the transcript and addressed whether the parties had a meeting of the minds and whether father’s proposed judgment substantively conforms to the parties’ stipulation. On remand, the district court shall address the propriety of reopening the judgment under Minn.Stat. § 518.145, subd. 2. The district court shall address the parties’ requests for attorney fees on appeal. The parties’ motions to strike are denied.

Affirmed in part, reversed in part, and remanded; motions denied 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.

      . We note that while mother’s letter objected to the court taking any action on the stipulation without giving the parties an opportunity for "a full presentation of their positions,” mother did not cite rule 307(b) to the district court until her post-judgment motion. Generally, arguing an issue in a posttrial motion or on appeal, even one previously raised in the district court, on a theory other than the theory upon which that issue was initially argued to the district court precludes the district or appellate court from addressing the newly raised theory. Thiele v. Stick, 425 N.W.2d 580, 582 (Minn.1988) (appeal); Minnesota Mut. Fire & Cas. Co. v. Retrum, 456 N.W.2d 719, 723 (Minn.App.1990) (posttrial motion). Having reviewed the letter and the file, we conclude that, here, the essence of the 307(b) question was presented to the district court in the letter and therefore that we are not precluded from addressing it. The better practice would have been to explicitly cite the specific statute or rule, subdivision, and clause (if necessary) or case language under which a party seeks relief. A failure to do so leaves the district court to guess at the precise basis for the request for relief.

      . We note, however, the difficulties and risks inherent in seeking relief from a district court by letter, including but not limited to, the problem of preserving a complete record of such letter-based proceedings for appellate review. Cf. Minn. R. Civ.App. P. 110.01 (stating record on appeal is "papers -filed in the trial court”) (emphasis added). Such risks and problems make it clear that the better procedure is to serve and file a notice of motion and motion, along with any necessary supporting memorandum, affldavit(s), and other documents, moving the district court not to enter judgment on the proposed judgment. We see no procedural prohibition on combining such a motion with a motion to vacate a stipulation.

      . Mother alleges that when a party asks the district court reopen a stipulated dissolution judgment, the district court may, under Toms-cak, vacate the stipulation on which the judgment is based or grant relief under Minn.Stat. § 518.145, subd. 2 which allows relief from the judgment itself. Therefore, mother concludes, the district court erred in denying her challenge to the judgment by addressing only the Tomscak analysis. This argument is not persuasive. Once a judgment is entered based on a stipulation, the stipulation “is merged into the judgment” and "cannot thereafter be the target of attack by a party seeking relief from the judgment * * * The sole relief from the judgment and decree lies in meeting the requirements of Minn.Stat. § 518.145, subd. 2.” Shirk, 561 N.W.2d at 522 (emphasis added).

      . Section 518.14, subdivision 1 allows awards of need-based and conduct-based attorney fees. Therefore, parties citing Minn.Stat. § 518.14, subd. 1 as the basis for a fee request should specify whether they are seeking need-based fees, conduct-based fees, or both. Whatever type(s) of fees are sought, the party seeking them must also provide an adequate factual basis for the requested award. Minn. R. Civ.App. P. 139.06, subd. 1.

      . That Doering was decided after the district court heard this matter does not mean that Doering is inapplicable here. Generally, case law applies retroactively. Hoff v. Kempton, 317 N.W.2d 361, 363 (Minn.1982).


author: WILLIS, Judge.

text:
    Lori SAVRE, Relator, v. INDEPENDENT SCHOOL DISTRICT No. 283, St. Louis Park, Minnesota, Respondent.
    No. C4-01-1229.
    Court of Appeals of Minnesota.
    April 17, 2002.

      Christina L. Clark, Education Minnesota, St. Paul, MN, for relator.
    Joseph E. Flynn, Jennifer K. Anderson, Knutson, Flynn & Deans, P.A., Mendota Heights, MN, for respondent.
    Considered and decided by WILLIS, Presiding Judge, SHUMAKER, Judge, PARKER, Judge.

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

   OPINION

WILLIS, Judge.

Relator seeks review by writ of certiora-ri of respondent school district’s decision under Minn.Stat. § 122A.40, subd. 5(a) (2000), not to renew her teaching contract. She argues that the district based its decision on an error of law because it failed to provide her with three written evaluations each year. Because the district did not renew relator’s contract for budgetary reasons, and the district otherwise substantially complied with the statute, we affirm.

FACTS

Respondent Independent School District No. 283 (the district) contracted with relator Lori Savre as a probationary teacher, beginning with the 1998-99 school year. The school board renewed relator’s contract each year for the following two school years. Faced with the need to make substantial budget cuts for the 2001-02 school year, the school board decided not to renew the contracts of many probationary teachers, including relator. The school board personally served relator with timely notice under Minn.Stat. § 122A.40, subd. 5 (2000), of its decision not to renew her contract after the end of the 2000-01 school year. Relator appeals by writ of certiorari.

ISSUES

I. Does this court lack jurisdiction to review the school board’s decision not to renew relator’s teaching contract?

II. Does the district’s complete failure to comply with the evaluation provision of MinmStat. § 122A.40, subd. 5 (2000), affect its discretion not to renew relator’s teaching contract?

ANALYSIS

I.

The district argues that because relator did not effectively serve the petition and writ of certiorari on any school-board member within the appeal period, this court has no jurisdiction to review its decision not to renew relator’s contract. For this appeal by writ of certiorari, Minn. Stat. ch. 606 governs the issuance and service of the writ. “[Tjimely service of the issued writ pursuant to Minn.Stat. § 606.02 is required to vest jurisdiction in this court.” In re Termination of Gay, 555 N.W.2d 29, 31 (Minn.App.1996), review denied (Minn. Jan. 7, 1997).

Relator timely served the petition and writ by mail on the school-board chair and on Joseph E. Flynn, a private attorney who had represented the district in other matters. Relator then filed an affidavit with this court stating that she had served the board chair and Flynn by mail. But the district contends that relator’s service was defective in several ways: (1) relator neither served a school-board member personally nor obtained an acknowledgement of service by mail, as the rules of civil procedure require; (2) attorney Flynn was not authorized to accept service on behalf of the district; and (3) relator served the board chair by mail addressed to the district, rather than to her residence. Thus, the district continues, this court must discharge the writ for lack of jurisdiction.

The district argues that the rules of civil procedure, rather than the rules of civil appellate procedure, apply here. The statute that applies to a civil action governs the “appeal period and the acts required to invoke appellate jurisdiction.” Minn. R. Civ.App. P. 115.01. But the appellate rules govern “proceedings for review of orders of administrative agencies, boards or commissions” to the extent that the applicable statute does not supersede the rules. Minn. R. Civ.App. P. 101.01; see In re License Applications of Polk County Ambulance Serv., 548 N.W.2d 300, 301-02 (Minn.App.1996) (noting that statute applicable to writ-of-certiorari review of agency decisions does not supersede appellate rules to extent that it does not prescribe how personal service is effected), review denied (Minn. Nov. 20, 1996).

Because Minn.Stat. ch. 606, the statute applicable here, does not prescribe how service is to be effected, the appellate rules prescribing the manner of service apply. The appellate rules provide:

Service may be personal or by mail. Personal service includes delivery of a copy of the document * * * in any manner provided by Rule 4, Minnesota Rules of Civil Procedure. Service by mail is complete on mailing * * *.

Minn. R. CivApp. P. 125.03. The appellate rules require that papers presented for filing include “either a written admission of service or an affidavit of service.” Minn. R. Civ.App. P. 125.04. Relator served the board chair and Flynn by mail and then executed and filed such an affidavit. Therefore, service on the board chair and Flynn was complete upon mailing, if service was not otherwise defective.

Unlike the appellate rule that requires service on “the agency or body to which [the writ] is directed and upon every party,” Minn.Stat. § 606.02 requires timely service of the issued writ on the “adverse party” and to that extent supersedes the rule. Minn. R. CivApp. P. 115.03. But because Minn.Stat. ch. 606 does not prescribe how an adverse party is to be served, the appellate rule applies. The appellate rule provides that “[s]ervice on a party represented by counsel shall be made on the attorney.” Minn. R. CivApp. P. 125.02.

The district contends that service on Flynn was not effective service on the district because Flynn did not represent the district at the time of service. It argues that a school district generally selects counsel to represent it in a court proceeding after the proceeding is initiated. Because no underlying court action exists in this appeal by writ and because the school district had not decided who would represent it in this matter at the time of service, the district contends that Flynn did not represent the school district within the meaning of Minn. R. Civ.App. P. 125.02.

But relator provided this court with copies of the minutes from the district’s annual school-board meetings; the minutes show that the school board designated Joseph Flynn as primary legal counsel for the district for the 2000-01 and 2001-02 school years. By affidavit, Christina Clark, relator’s counsel, states that she knew Flynn had represented the district on other matters. Clark states that she talked with Flynn regarding relator’s case before relator served the petition and writ, and Flynn said that he would discuss the matter with the district and would contact her with its response. During that conversation, Clark states, Flynn did not tell her that he did not represent the district on this particular matter. When Flynn did not contact her, Clark assumed that the district was not interested in settling the dispute. Under the circumstances, we conclude that Flynn represented the district at time of service.

Because relator served Flynn by mail, as the appellate rules permit, and filed the required affidavit and because Flynn represented the district at the time of service, relator properly served the district. Such service vested jurisdiction in this court to review the school board’s decision not to renew relator’s contract. See In re Minor Modification to Solid Waste Permit SW-61, 448 N.W.2d 877, 877 (Minn.App.1989) (holding that service of petition and writ of certiorari on an assistant attorney general representing state agency satisfies requirement under applicable statute, Minn.Stat. § 14.63, that petitioner serve agency). Because we conclude that relator’s service on Flynn vested this court with- jurisdiction to re.view the district’s decision, we do not reach the district’s claim that relator did not effectively serve the district when it served the board chair at the district’s address.

II.

A reviewing court will reverse a school board’s determination “when it is fraudulent, arbitrary, unreasonable, unsupported by substantial evidence, not within its jurisdiction, or based on an error of law.” Dokmo v. Indep. Sch. Dist. No. 11, 459 N.W.2d 671, 675 (Minn.1990) (citation omitted).

The supreme court has held that as long as a school district substantially complies with the provisions of Minn.Stat. § 122A.40, subd. 5 (2000), the court will not interfere with the district’s decision not to renew a probationary teacher’s contract. Skeim v. Indep. Sch. Dist. No. 115, 305 Minn. 464, 472-73, 234 N.W.2d 806, 812 (1975) (considering district’s obligations under Minn.Stat. § 125.12, subd. 3, the predecessor to Minn.Stat. § 122A.40, subd. 5); Shell v. Indep. Sch. Dist. No. 811, 301 Minn. 442, 443-45, 223 N.W.2d 774, 775 (1974) (same). Relator argues that because the school district did not comply with the statutory requirement to provide relator with three written evaluations each year and, in fact, provided her with no written evaluations at all, it did not substantially comply with Minn.Stat. § 122A.40, subd. 5. Such an error of law, relator argues, means that this court must reverse the district’s decision not to renew her contract.

The district claims that because the statute is directory, rather than mandatory, whether the district substantially complied with the statute does not affect its complete discretion to decide whether to renew relator’s contract. Minn.Stat. § 122A.40, subd. 5(a), provides:

The school board must adopt a plan for-written evaluation of teachers during the probationary period. Evaluation must occur at least three times each year * * *. [Djuring the probationary period any annual contract with any teacher may or may not be renewed as the school board shall see fit. However, the board must give any such teacher whose contract it declines to renew for the following school year written notice to that effect before July 1. If the teacher requests reasons for any nonrenewal of a teaching contract, the board must give the teacher its reason in writing, including a statement that appropriate supervision was furnished describing the nature and the extent of such supervision furnished the teacher during the employment by the board, within ten days after receiving such request. The school board may, after a hearing held upon due notice, discharge a teacher during the probationary period for cause, effective immediately * * *.

“[A] statute which does not declare the consequences of a failure to comply may be construed as a directory statute.” Sullivan v. Credit River Township, 299 Minn. 170, 176-77, 217 N.W.2d 502, 507 (1974) (citation omitted). Failure to comply with a directory statute does not necessarily invalidate action taken with respect to that statute. Id. at 177, 217 N.W.2d at 507. The district contends that, therefore, its failure to evaluate relator at least three times each year does not invalidate its decision not to renew her contract. Because the district did not renew relator’s contract for budgetary reasons, and because the district otherwise substantially complied with applicable statutory provisions, we agree.

This court must look at a statute as a whole when construing its specific provisions. Lenz v. Coon Creek Watershed Dish, 278 Minn. 1, 11-12, 153 N.W.2d 209, 217 (1967). Minn.Stat. § 122A.40, subd. 5, contains provisions regarding probationary teaching contracts that apply to decisions not to renew, as well as to immediate, for-cause terminations. When a school district does not renew a probationary teacher’s contract at the end of a school year, the teacher has no right to a hearing regarding that decision. Pearson v. Indep. Sch. Dish No. 716, 290 Minn. 400, 404, 188 N.W.2d 776, 779 (1971) (considering Minn.Stat. § 125.12, subd. 3). But the statute requires that the district provide notice and a hearing when it terminates a probationary teacher immediately, for cause. Minn.Stat. § 122A.40, subd. 5. Therefore, a district’s failure to comply with the statute’s evaluation provision may be important when the district terminates a teaching contract for performance-based reasons. Here, relator concedes that if the district had evaluated her as the statute requires, the result of the evaluations, whether positive or negative, would not have affected the district’s discretion not to renew her teaching contract.

DECISION

' Relator effectively served her petition and writ of certiorari on the school district’s attorney, vesting this court with jurisdiction to review the district’s decision not to renew relator’s teaching contract. The school district’s failure to comply with the evaluation provision of Minn.Stat. § 122A.40, subd. 5, did not affect its complete discretion not to renew relator’s teaching contract for budgetary reasons because the district otherwise substantially complied with applicable statutory provisions.

Affirmed.

      . In 1998, the legislature recodified Minn. Stat. § 125.12, subd. 3, at Minn.Stat. § 122A.40, subd. 5. 1998 Minn. Laws ch. 397, art. 8, § 101.


author: SAM HANSON, Judge.

text:
    Barbara PORCH, on behalf of herself and others similarly situated, Respondent, v. GENERAL MOTORS ACCEPTANCE CORPORATION, Appellant, MIC Property & Casualty Insurance Corporation, Defendant.
    Nos. CX-01-1087, C1-01-1415.
    Court of Appeals of Minnesota.
    April 23, 2002.

      Ronald S. Goldser, J. Gordon Rudd, Jr., David Cialkowski, Zimmerman Reed, P.L.L.P., Minneapolis, for respondent.
    James S. Simonson, Gray, Plant, Mooty, Mooty Bennett, P.A., Minneapolis, Jan T. Chilton, pro hac vice, Severson & Werson, A Professional Corporation, San Francisco, CA, for appellant.
    Considered and decided by HANSON, Presiding Judge, SCHUMACHER, Judge, and HALBROOKS, Judge.
   OPINION

SAM HANSON, Judge.

This class action lawsuit was brought on behalf of borrowers who purchased cars under installment contracts that required them to keep the cars continuously insured and, if they failed to do so, authorized the creditor to buy “physical damage insurance” and to charge each borrower for the “cost of the insurance.” On appeal from orders determining that the coverage obtained and the premium charged were not authorized by the installment contracts, and enjoining the collection of a portion of the premium, appellant creditor argues among other things that the district court erred in concluding that the coverage obtained or the premium charged was in breach of the installment contract or was a violation of the consumer fraud act. Because we conclude that the coverage obtained and the premium charged were authorized by the installment contract, we reverse with directions to enter judgment dismissing the class action.

FACTS

On January 13, 1992, respondent Barbara Porch bought a 1987 Cadillac Seville on credit and signed a motor vehicle retail-installment contract with Thomas Chevrolet. Thomas Chevrolet assigned this contract to appellant General Motors Acceptance Corporation (GMAC), which became the creditor. The installment contract required Porch to maintain continuous physical damage insurance on the car. It provided that:

At any time during the term of this contract, if you do not have physical damage insurance which covers both the interest of you and the Creditor in the vehicle, then the Creditor may buy it for you.

(Emphasis added.)

Porch breached the contract by failing to keep her car insured. When this came to the attention of GMAC, GMAC purchased collateral-protection insurance through a program it had established with MIC Property and Casualty Insurance Corporation (MIC), a duly-licensed Michigan insurance company which is a second-tier subsidiary of GMAC. Under that program, MIC provided a single master insurance policy to GMAC, which obligated MIC to insure all cars identified in collateral-protection certificates issued to borrowers who had allowed their private insurance to lapse. That master policy and the standard form of the collateral-protection certificates are on file with the appropriate insurance regulatory bodies in all states where MIC issues collateral-protection certificates.

On January 31, 1993, MIC issued a collateral-protection certificate that provided collision and specified-perils coverage for Porch’s car, for the coverage period of December 5, 1992 (the date Porch’s insurance lapsed) until January 15, 1995 (the date of the last scheduled payment under the installment contract).

The installment purchase agreement authorizes GMAC to charge the borrower for collateral-protection insurance as follows:

The charge will consist of the cost of the insurance and a finance charge, at the highest lawful contract rate. You agree to pay the charge in equal installments along with the payments shown on the payment schedule.

(Emphasis added.) MIC charged a premium of $1,396 to GMAC for the Porch certificate. GMAC notified Porch that it had purchased the insurance and that it was adding the premium, together with interest of $114.18, to Porch’s installment contract balance, to be reflected in increased monthly payments.

The premium that MIC charged GMAC, and that GMAC included in the balance due from Porch, was calculated from the rate schedules of MIC that are on file with the Minnesota Commissioner of Insurance and the appropriate insurance regulatory bodies in every other state where MIC issues collateral-protection certificates. Those rate schedules reflect the forecasted costs to be incurred by MIC to provide the insurance, divided into four components: (1) losses (what will actually be paid out in claims); (2) expenses incurred to settle claims; (3) operating and administrative expenses; and (4) profit and contingencies. The operating and administrative expenses reflected in the premium include the costs incurred by MIC to track borrowers’ accounts for GMAC to determine when a borrower’s private insurance has lapsed and to notify and warn borrowers about the lapsed insurance, and the costs incurred by GMAC branch offices, and reimbursed by MIC, for customer services the branch offices provide in connection with the notification and warning process.

The process of tracking, notifying and warning borrowers of lapsed insurance produces an inevitable lag between the time that the borrower’s private insurance lapses and the collateral-protection certificate is issued. To avoid loss to GMAC during that lag period, MIC provides collateral-protection coverage with a “day-one coverage” feature, which means that MIC is obligated to make the coverage effective on the date the borrower’s private insurance lapses, even though the lapse is not discovered and the collateral-protection certificate is not issued until a later date.

Porch brought this class action on behalf of all borrowers who purchased cars under identical installment contracts, whose contracts were assigned to GMAC, who breached their contracts by failing to keep their cars continuously insured, and who were charged by GMAC for collateral-protection insurance. Porch alleged that the insurance obtained by GMAC included coverages that were of no benefit to the borrowers and that the charge for the insurance was excessive.

The district court certified a plaintiff class of Minnesota customers to whose accounts GMAC had charged collateral-protection premiums. Prior to trial, all counts of the complaint were dismissed except two: (1) breach of contract and (2) violation of the Minnesota Consumer Fraud Act. Just before trial, the district court also dismissed Porch’s claim for damages because Porch could not prove that class members had actually paid amounts in excess of those allegedly authorized by their contracts. The court struck the jury demand and ordered the case to a bench trial on Porch’s claim for injunctive relief only.

The trial proceeded in an unusual manner. Porch called no witnesses, but instead relied on transcripts of depositions and on documentary evidence. GMAC presented the testimony of five expert and fact witnesses, essentially explaining the collateral-protection insurance program. In fact, the district court specifically found that

[wjith a series of knowledgeable and experienced witnesses, GMAC and MIC have demonstrated that their [collateral-protection insurance] program is reasonable, extensively regulated, and in accord with applicable actuarial principles.

But the district court also found that the “day-one coverage” feature of the MIC insurance provided broader coverage and produced a greater premium than were authorized by the installment contracts. The district court determined that the charge for this “increment” of the premium represented a breach of contract and that GMAC’s representation to the borrower that the charge was authorized by the contract constituted a violation of the Minnesota Consumer Fraud Act.

While there was no record evidence to quantify this increment of the premium, the district court found that the tracking and expense reimbursement costs re-fleeted in the premium were closely tied to the increment. Accordingly, the district court ordered injunctive relief against GMAC, barring it from charging or collecting the “day-one increment,” measured by the portion of the premium that reflected the tracking and expense reimbursement costs. The order also requires GMAC to credit borrowers for that increment on all accounts that have already been charged the full collateral-protection premium. This appeal followed.

GMAC filed a motion with this court to strike portions of the deposition transcripts included in Porch’s appendix, claiming that those portions had not been received in evidence at trial. We entered an order deferring decision on the motion.

ISSUES

1. Was the collateral-protection insurance coverage, obtained by GMAC from MIC, broader than the “physical damage insurance” that GMAC was authorized to buy under the installment contracts?

2. Was the amount charged by GMAC to each borrower’s account, for premiums paid to MIC, greater than the “cost of the insurance” that GMAC was authorized to charge under the installment contracts?

ANALYSIS

In an appeal from a bench trial, we do not reconcile conflicting evidence. Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn.1999). We give the district court’s factual findings great deference and do not set them aside unless clearly erroneous. Minn. R. Civ. P. 52.01, Fletcher, 589 N.W.2d at 101. However, we are not bound by and need not give deference to the district court’s decision on a purely legal issue. Frost Benco Elec. Ass’n v. Minn. Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn.1984). When reviewing mixed questions of law and fact, we correct “erroneous applications of law, but accord the [district] court discretion in its ultimate conclusions and review such conclusions under an abuse of discretion standard.” Rehn v. Fischley, 557 N.W.2d 328, 333-34 (Minn.1997).

I

We begin our analysis with the breach-of-contract claim. All parties and the district court agreed that the contract was unambiguous and, as such, its interpretation is a question of law. City of Virginia v. Northland Office Props. Ltd. P’ship, 465 N.W.2d 424, 427 (Minn.App.1991), review denied (Minn. Apr. 18, 1991). Language in an unambiguous contract is given its “plain and ordinary meaning.” Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 67 (Minn.1979) (citations omitted). We read the contract terms in the context of the entire contract. Kauffman Stewart, Inc. v. Weinbrenner Shoe Co., 589 N.W.2d 499, 501 (Minn.App.1999).

The district court’s analysis of the breach-of-contract claim merged what we believe are two separate concepts under the installment contracts: the scope of the insurance coverage and the cost of the insurance. The district court found, in part, as follows:

Throughout the relevant period, GMAC purchased and charged customers for physical damage insurance. However, the premium GMAC charged Porch for its [collateral-protection insurance] coverage from MIC was for more than just loss or damage to the [Porch’s] vehicle as permitted under the terms of the contract.

We believe that it is necessary to separate the issues of coverage and cost, since each is governed by different language in the installment contracts.

Scope of Insurance Coverage

Under the installment contracts, GMAC is authorized to buy “physical damage insurance.” The collateral-protection certificate issued on January 31, 1993, to GMAC as named insured and Porch as purchaser, provided collision and specified-perils coverage, subject to identified deductibles and coverage limits. The specified-perils coverage applied to loss to the car caused by: fire or explosion; theft; windstorm, hail or earthquake; flood; mischief or vandalism; and the sinking, burning, collision or derailment of any conveyance transporting the vehicle. These coverages are the typical components of “physical damage insurance.” Porch does not contend, and the district court did not find, that the coverages described on the collateral-protection certificates were not authorized by the installment contracts.

This distinguishes the present case from Logan v. Norwest Bank Minn. N.A., 603 N.W.2d 659 (Minn.App.1999). There, the collateral-protection insurance, obtained by the creditor when the borrower allowed the car insurance to lapse, included coverages for filing errors and omissions, mechanic’s liens, repossession expense and premium deficiency. We held that genuine issues of material fact precluded summary judgment against the borrower on her class action claim that these coverages were not authorized under an installment contract that required only fire, theft and collision insurance. Id. at 664. Here, in contrast, the collateral-protection certificate issued for Porch’s car did not provide any unauthorized coverage.

Further, the master policy issued by MIC to GMAC does not provide any coverage separate from or additional to the coverage provided on each collateral-protection certificate. Instead, the master policy confirms that MIC only insures the property specifically described in each collateral-protection certificate that is issued to a borrower whose private insurance has lapsed.

Porch argues, and the district court agreed, that the “day-one coverage” feature somehow provides an additional, unauthorized coverage. Thus, in its memorandum, the district court states:

GMAC has not obtained coverage for damage to the individual borrower’s car; it has obtained coverage for all its uninsured losses throughout the entire segment of its portfolio participating in the [automated insurance follow-up] program. When an individual borrower like Mrs. Porch is found to have lapsed coverage, a portion of the cost of the broad coverage already purchased by GMAC is simply passed on to her. The shifting of the entire risk of uninsured losses to MIC means that the prorated charge to Porch must necessarily be higher than if GMAC had merely replaced her lapsed coverage (which is what the contract says GMAC will do) and charged her for that replacement.

This argument misconstrues the collateral-protection insurance provided by MIC as being something greater than the cumulative coverages provided under the collateral-protection certificates. Our reading of the MIC master policy, and the standard form of the collateral-protection certificates, confirms that MIC does not insure GMAC’s uninsured losses in the abstract, or separate and apart from the coverage of specific cars purchased by specific borrowers whose private insurance has lapsed.

While it is clear that the goal of GMAC was to reduce its uninsured losses, and it worked with MIC to create “day-one coverage” to avoid losses that could not be detected by tracking, that goal was not achieved by some form of portfolio coverage that insured GMAC against uninsured losses. Instead, that goal was achieved by insuring the losses that would otherwise have been uninsured, through the issuance of individual certificates to each borrower whose private policy lapsed. In fact, “day-one coverage” is necessary if GMAC is to remedy the harm caused by a borrower’s breach of the obligation to provide continuous coverage — without “day-one coverage,” there would be an inevitable gap between the end of the borrower’s insurance and the beginning of the replacement insurance. Stated more directly, we construe the words “physical damage insurance” to include collateral-protection insurance that is designed to assure that the coverage is continuous over the life of the installment contract. The “day-one coverage” feature meets this definition.

Whether the premium for this insurance is greater because the lapse of coverage cannot always be detected by tracking, and a certain number of certificates will be issued after a loss has already occurred, goes not to the question of whether the coverage was authorized by the installment contract, but to the question of whether the charge to the borrower for the resulting premium exceeds the authorized “cost of the insurance,” as discussed next.

Cost of the Insurance

The district court found that MIC’s premiums took into account

losses to otherwise uninsured vehicles where the lapse in private insurance has come to GMAC’s attention only because of the loss and subsequent cessation of payments.

The court found that

MIC’s premiums passed on to the class members were higher than they would have been if the premiums had simply been based upon the risk of damage to the class member’s vehicle, as provided for in the contract.

To the extent that this finding was based upon the assumption that day-one coverage was an added coverage, separate from that provided under each collateral-protection certificate, it would be a misconstruction of the insurance issued by MIC, as discussed above. To the extent this finding reflects the view that the premium charged by MIC for the collateral-protection insurance was in excess of the “cost of the insurance” that GMAC was authorized by the installment contract to charge to borrowers, a further analysis is required.

We begin with the recognition that the terms that authorize GMAC to charge the borrower for collateral-protection insurance are extremely broad, stating only “the cost of the insurance.” Without some limiting language in the installment contract, we find it difficult to disagree with GMAC’s simplest argument, that the cost of the insurance is the amount GMAC pays for it — that is, the premium that MIC charges and GMAC pays. Clearly, the ordinary meaning of the word “cost,” in the context of the purchase of insurance, is the premium.

Support for this seemingly simplistic construction of “the cost of the insurance” is provided by the general rule in insurance law that, where no rate is specified in a policy, the law implies the obligation to pay the usual and customary premium. See, e.g., Parlier Fruit Co. v. Fireman’s Fund Ins. Co., 151 Cal.App.2d 6, 311 P.2d 62, 72 (1957); Miss. Farm Bureau Mut. Ins. Co. v. Todd, 492 So.2d 919, 930 (Miss.1986); 5 Eric Mills Holmes, Holmes’ Appleman on Insurance 24.14 (2d ed.1996). And the law further implies that the usual and customary premium is the premium on file with the appropriate insurance regulatory authority. See, e.g., Keniston v. Am. Nat’l Ins. Co., 31 Cal.App.3d 803, 811, 107 Cal.Rptr. 583 (1973) (holding premium was not excessive where approved by the insurance commissioner); Pac. Fire Ins. Co. v. Donald, 148 Tex. 277, 224 S.W.2d 204, 207 (1949) (stating “[sjince the rates had been fixed by the State Insurance Commission, it was not essential that they be specifically agreed to by the parties.”); Curtis v. Mitchell-Vincent Co., 362 S.W.2d 180, 180 (Tex.App.1962) (holding premium was not excessive where approved by the insurance commissioner).

As a Michigan corporation, MIC is required to file with the Michigan Commissioner of Insurance “every manual of classification, every manual of rules and rates, every rating plan, and every modification” of any of the foregoing which it proposes to use. Mich. Comp. Laws § 500.2108 (1993). Once its premium rates were filed and made effective, MIC was legally obligated to adhere to those rates:

No insurer shall make or issue a contract or policy except in accordance with filings which are in effect for said insurer as provided in this chapter * * *.

Mich. Comp. Laws § 500.2412 (1993). Similarly, as a foreign insurance corporation doing business in Minnesota, MIC was required to obtain a license from the Minnesota Commissioner of Commerce. Minn.Stat. § 60A.07, subd. 4 (2000). As a licensed insurer, MIC was required to

file with the commissioner all rates and all changes and amendments of rates made by it for use in this state not later than their effective date.

Minn.Stat. § 70A.06, subd. 1 (2000). And, “[n]o rates contained in a filing shall become effective unless they have been filed with the commissioner.” Id. Further, “[n]o policy form shall be delivered or issued for delivery unless it has been filed with the commissioner.” Minn.Stat. 70A.06, subd. 2 (2000).

While the above discussion relates to the contract for insurance between an insurance company and its insured (in this case, MIC and GMAC), and we recognize that GMAC could have contractually bound itself to charge some other rate to its borrowers, we find it difficult to construe the broad terms “the cost of insurance” as requiring some rate different from the one MIC filed with the appropriate insurance regulators. In the absence of specific limiting terms, we construe the words “the cost of insurance” to mean the premium rates paid by GMAC to MIC, pursuant to rate filings made by MIC with appropriate insurance regulators. Because Porch makes no claim that the premiums MIC charged to GMAC were not calculated according to the filed rates, we conclude that the premium was not excessive and that it was the cost of the insurance to GMAC.

Even if we were to look beyond the premium charged by MIC and consider the reasonableness of the underlying costs reflected in that premium, we would still conclude that the charges made by GMAC to its borrowers for collateral-protection insurance were authorized by the installment contract. The undisputed testimony before the district court was that the cost of tracking and the related expense reimbursements were considered as an appropriate acquisition cost for collateral-protection insurance, equivalent to the advertising, marketing and agency commissions reflected in the premiums for standard automobile policies. As such, these costs are part of the past and prospective expense experience of an insurer, which is appropriately considered in determining the premium. Minn.Stat. § 70A.05(1) (2000); Mich. Comp. Laws 500.2403(l)(a) (1993).

It is true that the “day-one coverage” feature of MIC’s collateral-protection insurance may increase its loss experience, because it may require MIC to cover losses that have already occurred. It is likewise true that the resulting premium that MIC must charge for “day-one coverage” will be higher than the premium it would charge if its coverage were not made effective prior to the date that the collateral-protection certificate is issued. But we do not think that a borrower who has breached the installment contract by allowing private insurance to lapse can legitimately complain that the cost of collateral-protection insurance may be higher because other borrowers have likewise allowed their private insurance to lapse. Moreover, the undisputed testimony was that the premiums charged by MIC were lower than the rates of other insurance companies that provide collateral-protection insurance, by as much as 25%.

Absent some specific language in the installment contract requiring that the losses attributable to other borrowers be eliminated from the insurer’s loss experience for the calculation of the premium, it would not be reasonable to read “the cost of insurance” to require such an exclusion.

II

The district court concluded that GMAC had violated the consumer fraud act by stating to plaintiff that the premium charged to her was provided under the terms of her installment contract. This conclusion was based upon the district court’s finding that the statement was incorrect because the premium Porch was charged was higher than that “provided under the terms of [her] installment contract.” Our conclusion that the charges made to members of the class for collateral-protection insurance were authorized by the installment contract negates this finding and, accordingly, we reverse the conclusion that GMAC violated the consumer fraud act. Further, our decision on the breach-of-contract claim makes it unnecessary for us to address GMAC’s other arguments, including those made in GMAC’s motion to strike portions of Porch’s appendix. That motion is accordingly denied.

DECISION

The district court erroneously found that GMAC breached the installment contracts with borrowers. The collateral-protection insurance GMAC purchased from MIC qualified as “physical damage insurance” and the premiums that GMAC charged to borrowers’ accounts qualified as “the cost of the insurance” under the installment contract. Because the premium GMAC charged borrowers’ accounts was authorized by the installment contract, GMAC did not violate the consumer fraud act.

Reversed; motion denied.

      . While we need not reach GMAC’s primary jurisdiction argument, we recognize the validity of a related argument that the reasonableness of premium rates promulgated pursuant to insurance laws cannot be collaterally attacked in a private action, upon grounds that the insurance company's costs underlying those rates are excessive or inappropriate. See, e.g., Employers Mut. Liab. Ins. Co. of Wis. v. Warshaw Constr. Corp., 51 Misc.2d 709, 273 N.Y.S.2d 745, 746 (N.Y.Sup.Ct.1965) (stating that rates are only subject to judicial review when insurance administrative review procedures are exhausted).


author: LANSING, Judge.

text:
    OAK GLEN OF EDINA, Respondent, v. Tracey BREWINGTON, Appellant.
    No. C8-01-1296.
    Court of Appeals of Minnesota.
    April 23, 2002.

      Michael T. Kallas, Anne D. Byrne, Kal-las & Macdonald LTD, Edina, for respondent.
    Sherry A. Bruckner, Paul R. Birnberg, HOME Line, Minneapolis, for appellant.
    Considered and decided by TOUSSAINT, Presiding Judge, LANSING, Judge, and PORITSKY, 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

LANSING, Judge.

The district court issued an order for the restitution of premises rented under a Section 8 lease, based on the tenant’s repeated failure to pay rent timely. Because the landlord failed to demonstrate the other preconditions necessary for eviction based on repeated minor violations and continued to accept rent payments for six months after the last late rent payment, the landlord failed to establish the material noncompliance necessary to terminate the tenancy and waived its right to evict. We therefore reverse and remand to the district court for determination of the landlord’s alternative grounds for eviction.

FACTS

Tracey Brewington and her three daughters are tenants in federally subsidized rental housing located on Oak Glen Road in Edina. Oak Glen of Edina operates the project-based Section 8 housing complex under mandatory guidelines for participants in the Section 8 housing-assistance program. See 42 U.S.C. § 1437f (1994 & Supp. V 1999); 24 C.F.R. § 247.3 (2001). Under the guidelines, Brewington pays a portion of the rent, based on a percentage of her income, and the Department of Housing and Urban Development (HUD) pays the balance.

During her nearly five-year tenancy, Brewington has made seventeen late rental payments and has had one rent check returned for insufficient funds. Under a permissive section of the HUD-approved lease, Oak Glen imposes a late fee of one dollar each day that the payment is late. Brewington has always paid her rent in the month it was due. Each time Oak Glen accepted a late payment from Brew-ington, it charged and accepted the one-dollar-per-day late fee. Brewington made her last late payment on November 7, 2000. From December 2000 until May 2001, Oak Glen each month accepted timely rental payments from Brewington.

In July of 2001, Oak Glen filed an eviction action against Brewington, alleging nine separate breaches of the lease, including failure to pay rent timely. Brewington unsuccessfully moved to dismiss the action and to exclude evidence prior to the acceptance of the May rent. Following an abbreviated hearing, the district court found that Brewington breached her lease through repeated late payments of rent. The district court made no findings on the other alleged breaches of the lease.

On appeal, Brewington argues that: (1) repeated late payment of rent does not meet HUD’s “material non-compliance” standard necessary to evict a Section 8 tenant, (2) Oak Glen waived its right to evict for repeated late payment of rent when it accepted rent after the alleged breaches occurred, (3) the election-of-remedies doctrine bars the eviction action after acceptance of late fees assessed on the overdue rental payments, and (4) Oak Glen modified the lease to allow for late payment of rent by repeatedly accepting late rent payments without providing notice that further late payments would result in eviction.

ISSUES

I. Did Oak Glen establish that Brew-ingtoris late payment of rent amounted to material noncompliance as required by HUD regulations?
II. Did Oak Glen waive its right to evict Brewington by accepting rent after the alleged breaches of her lease occurred?
III. Did Oak Glen’s acceptance of the late fees constitute an election of remedies or a modification of the lease?

ANALYSIS

A landlord is entitled to recover possession by eviction when a tenant holds over “contrary to the conditions or covenants of the lease or agreement under which that person holds.” Minn.Stat. § 504B.285, subd. 1(2) (2000). Federal law governing subsidized housing “is superimposed upon and consciously interdependent with the substructure of local law relating to housing.” Kargman v. Sullivan, 552 F.2d 2, 11 (1st Cir.1977). The Section 8 housing-assistance program, established by the Housing and Community Development Act of 1974, and codified at 42 U.S.C. § 1437f, imposes specific requirements for termination of a Section 8 tenancy. 42 U.S.C. § 1437f(o)(7)(C) (landlord shall not terminate the tenancy except for serious or repeated violations); 42 § 1437f(o)(7)(E) (any termination of tenancy must be preceded by written notice specifying the grounds for termination). State law may impose on landlords more stringent standards for notice and termination so long as the standards are consistent with federal law and no less stringent. See Soliman v. Cepeda, 269 N.J.Super. 151, 634 A.2d 1057, 1061 (Law Div.1993); Attorney Gen. v. Brown, 400 Mass. 826, 511 N.E.2d 1103, 1106-07 (1987).

I

United States Department of Housing and Urban Development regulations administering section 1437f provide mandatory guidelines for participants in the Section 8 housing-assistance program. See Dep’t of Hous. & Urban Dev. v. Rucker, — U.S. -, 122 S.Ct. 1230, — L.Ed.2d - (2002) (regulations administering section 1437 govern lease terms authorizing eviction). Under 24 C.F.R. § 247.3 (2001), a landlord may terminate a tenancy in a subsidized project for material noncompliance with the rental agreement. Material noncompliance is defined as:

(1) One or more substantial violations of the rental agreement;
(2) Repeated minor violations of the rental agreement that;
(i) Disrupt the livability of the project,
(ii) Adversely affect the health or safety of any person or the right of any tenant to the quiet enjoyment of the leased premises and related project facilities,
(iii) Interfere with the management of the project, or
(iv) Have an adverse financial effect on the project;
(4) Non-payment of rent or any other financial obligation due under the rental agreement (including any portion thereof) beyond any grace period permitted under State law, except that the payment of rent or any other financial obligation due under the rental agreement after the due date, but within the grace period permitted under State law, constitutes a minor violation.

24 C.F.R. § 247.3(c) (emphasis added).

It is undisputed that Brewington was late in paying her rent seventeen times before November 7, 2000, and that after November 7, 2000 and before serving the eviction action in May 2001, Oak Glen accepted Brewington’s timely rent payments six times. Nonpayment of rent beyond a grace period permitted under state law constitutes material noncompliance that justifies terminating the tenancy. At the time Oak Glen brought the eviction action, Brewington was not in arrears on any rental payment. Payment of rent after the due date “within the grace period permitted under state law” is, however, considered a minor violation which, if repeated, and, if it satisfies one of the four preconditions listed, provides a basis for terminating the tenancy under subsection 2.

Minnesota statutes do not use the term “grace period,” and the federal regulations do not provide a definition. “Grace period” generally refers to “[A] period of extra time allowed for taking some required action (such as making payment) without incurring the usual penalty for being late.” Black’s Law Dictionary 70S (7th ed.1999). Brewington contends that the “grace period” referred to in the regulations parallels the ability of the tenant to reinstate the tenancy after an eviction proceeding has been initiated. See Minn.Stat. § 504B.285, subd. 5(c) (2000) (giving tenant up to seven days to submit payment after judicial determination that rent is owing to landlord if lease not otherwise materially breached).

This argument on what constitutes a grace period comports with parallel provisions of landlord-tenant law that allow a tenant involved in an action for eviction based only on nonpayment of rent to redeem the tenancy by submitting specified payments before possession has been returned to the landlord. Minn.Stat. § 504B.291, subd. 1 (2000). If redemption by submitting payment in full allows a tenant to remain in possession so long as the landlord does not have possession, it follows that submitting full payment before an eviction action has even begun, as occurred in this situation, would be deemed to fall within a grace period under state law. Therefore, Brewington’s failure to pay rent timely constitutes a minor violation of the rental agreement.

To evict a tenant for minor violations, the landlord must first show that the actions were repeated. Brewington does not dispute that the late payments were repeated violations. The landlord must also, however, satisfy one of the four preconditions listed in 24 C.F.R. § 247.3(2): that the late payments disrupted the livability of the project, adversely affected the health or safety of any person or the right of any tenant to the quiet enjoyment of the leased premises, interfered with the management of the project, or had an adverse financial effect on the project. 24 C.F.R. § 247.3(2)(i)-(iv).

Oak Glen provided no evidence that the late payments of rent affected its rental business in any manner listed in 24 C.F.R. § 247.3. Although an inference might arise that late payments have an adverse financial effect on the project, Brewington points out that her late fees amounted to 5.5% of her monthly rent, an amount that exceeds what Oak Glen could currently obtain from an interest bearing account. Oak Glen counters that administrative costs must be offset from this computation. These arguments were not presented in the district court, and the court made no finding that one of the four preconditions was satisfied. See Chancellor Manor v. Thibodeaux, 628 N.W.2d 193 (Minn.App. 2001) (district court must make specific findings on issue of material noncompliance with lease terms).

II

Brewington alternatively contends that even if Oak Glen had demonstrated that the repeated minor violations constitute material noncompliance, it waived its right to proceed on that basis when it accepted her timely rent payments for six months after the last untimely payment. We agree.

Waiver has historically been an affirmative defense to an unlawful detainer action. Kenny v. Seu Si Lun, 101 Minn. 253, 257, 112 N.W. 220, 221 (1907); Pnordale Mall Investors v. Farrington, 411 N.W.2d 582, 583 (Minn.App.1987). Generally, a landlord who accepted rent while knowing that breaches of the lease have occurred waived the right to rely on those breaches in an action for unlawful detainer. Priordale Mall, 411 N.W.2d at 584. A principal reason for the waiver rule is to instill a feeling of repose in the tenant; the landlord, by accepting the rent, effectively reaffirms the lease between parties. Id. In other words, the waiver rule provides a sense of security for the tenant that the lease remained in effect.

It is undisputed that, until June 2001, Oak Glen accepted timely rent payments from Brewington, knowing that her last late payment had occurred November 7, 2000. By accepting her timely payment of rent six times following the last late payment, Oak Glen manifested an intent not to evict Brewington for late rent payments.

Oak Glen acknowledges accepting rent until June 2001, but maintains that waiver should not apply when a breach is based on a series of violations. Minnesota does recognize exceptions to the general-waiver rule. See Central Union Trust Co. of New York v. Blank, 168 Minn. 312, 316, 210 N.W. 34, 36 (1926) (holding that waiver rule does not apply if violated lease provision is part of consideration for the lease); Minneapolis Cmty. Dev. Agency v. Powell, 352 N.W.2d 532, 534 (Minn.App.1984) (recognizing that acceptance of rent does not constitute waiver of breach if lease contains nonwaiver provision or when manifest intent to waive is not present). Oak Glen contends that if waiver is applied to this serial violation, a landlord would need to stop collecting rent at the first instance of a late rental payment in order to preserve a cause of action; landlords would then be forced to stop collecting rent for an indeterminate length of time to ascertain whether the tenant’s late payment was an isolated or repeated incident. Oak Glen points to an unpublished opinion of this court that held that the waiver rule did not apply when an accumulation of violations was required to justify eviction. Bossen Terrace v. Price, Nos. C5-98-434, Cl-98^180, 1998 WL 695029 (MinnApp. Oct.6, 1998). The factually distinguishable violations in Bossen, however, constituted assaults and disorderly conduct, which necessitated police action.

The theory of waiver that Brewing-ton advances flows not from the acceptance of each late payment per se but from the pattern of continuing to accept rent after the last breach of that type — specifically, the last late payment of rent. To protect against waiver for this repeated minor violation, the landlord need only refuse to accept the single, final late rental payment. This allows a reasonable balance between the tenant’s reliance on continued tenancy and a landlord’s right to remove the tenant for repeated late payments. Applying the waiver doctrine in this way also comports with established case law. See Kenny, 101 Minn, at 257, 112 N.W. at 222 (stating that acceptance of rent does not bar landlord from taking advantage of the forfeiture resulting from a subsequent or continued breach). Because Oak Glen accepted six timely rental payments after the last late payment, waiver applies.

Ill

Brewington raises two other arguments on appeal. She claims that Oak Glen is barred from bringing an action both because Oak Glen has already accepted late fees for the late rental payments, thus barring it from further action under the election-of-remedies doctrine, and because Oak Glen’s continued acceptance of late rental payments modified the lease to allow for rental payments at later dates in the month. These arguments were raised for the first time on appeal.

Generally, a reviewing court may only review what is shown on the record to have been presented and considered by the trial court when it originally decided the matter. Thiele v. Stick, 425 N.W.2d 580, 582 (Minn.1988). A party may not obtain review by raising the same general issue raised below, but under a new theory. Id. The record shows no evidence that either the election-of-remedies theory, or the modification-of-the-lease theory were argued at the district court; consequently we cannot grant review of the decision based on these theories.

DECISION

The repeated late rental payments constituted minor noncompliance with the Section 8 lease. Oak Glen has failed to present evidence of any of the four preconditions constituting material noncompliance under 24 C.F.R. § 247.3, so as to provide a basis for eviction. Furthermore, Oak Glen waived its right to evict Brew-ington for continued late payments of rent by continuing to accept rent after the last late rental payment occurred. Accordingly, we reverse and remand to the district court to allow Oak Glen to proceed on the remaining grounds alleged for termination of the tenancy.

Reversed and remanded.

      . Minn.Stat. §§ 504B.281-.371, referring to eviction actions, replaced prior Minnesota law dealing with unlawful detainer actions in 1999. 1999 Minn. Laws ch. 199. Prior case law dealing with the principles of waiver, however, still applies under the reorganized statute.