author: MARING, Justice.

text:
    2005 ND 115
    Timothy HOUN, Claimant and Appellant v. WORKFORCE SAFETY AND INSURANCE, Appellee and Bismarck Lumber Company, Respondent.
    No. 20050013.
    Supreme Court of North Dakota.
    June 22, 2005.

      Stephen D. Little, Dietz & Little Lawyers, Bismarck, N.D., for claimant and appellant.
    Lawrence A. Dopson, Special Assistant Attorney General, Bismarck, N.D., for ap-pellee.
   MARING, Justice.

[¶ 1] Timothy Houn appealed from a district court judgment affirming a decision by Workforce Safety and Insurance (“WSI”) which denied him disability benefits. We conclude WSI erred in applying N.D.C.C. § 65-05-08(1) to Houn’s application for disability benefits, and we reverse and remand for WSI to treat Houn’s claim as an original application for disability benefits.

I

[¶2] In August 2001, Houn was unloading a truck while employed by Bismarck Lumber. A pallet he was standing on broke, and he fell four feet to a concrete floor, injuring his right shoulder and lower back. WSI accepted Houn’s claim and paid the medical expenses related to his injury. Houn did not miss five or more consecutive days of work at the time of his injury, and he therefore did not receive disability benefits for his injury. See N.D.C.C. § 65-05-08. Houn terminated his employment at Bismarck Lumber, effective September 25, 2001, and he has not worked since that date. In January 2002, Houn filed a claim with WSI for disability benefits. WSI ultimately denied Houn’s claim for disability benefits, finding Bismarck Lumber had been accommodating Houn’s light duty restrictions, Houn had voluntarily limited his income by quitting his job at Bismarck Lumber, and any loss of earnings resulted from Houn voluntarily quitting his job at Bismarck Lumber and not from his work injury. Houn did not appeal that denial of his claim for disability benefits.

[¶ 3] In September 2002, Houn submitted a second claim to WSI for disability benefits, stating he was unable to work because of soreness and pain in his lower back and leg, and he was entitled to disability benefits. Houn requested and received an evidentiary hearing on his claim. There was evidence presented at the hearing that Houn’s condition had worsened, he had been advised not to return to work due to his work-related injury, and it was unlikely he would be able to return to his previous type of employment. There was also some evidence that Houn had unsuccessfully attempted to procure employment firom November 2002 to the fall of 2003. An administrative law judge (“ALJ”) said WSI had not had an opportunity to determine whether Houn’s limitation of income after September 5, 2002, was justified. The ALJ determined Houn’s compensable work injury had worsened, he would have permanent functional limitations as a result of that change in his medical condition, and he would not be able to work at jobs suitable to his skills, education, and work experience. The ALJ recommended remanding the case to WSI to determine whether Houn was entitled to disability benefits under its continuing jurisdiction provided for in N.D.C.C. § 65-05-04. WSI rejected the ALJ’s recommendation and decided Houn was not entitled to disability benefits because, under the procedure and criteria for reapplications for disability benefits when disability benefits have been discontinued, he had not shown an actual wage loss due to a significant change in his compensable physical condition. See N.D.C.C. § 65-05-08(1). WSI decided Houn had not incurred an actual wage loss, because he had voluntarily left his job with Bismarck Lumber. The district court affirmed WSI’s decision.

II

[¶ 4] Under N.D.C.C. §§ 28-32-46 and 28-32-49, we affirm an administrative agency’s order unless:

1. The order is not in accordance with the law.
2. The order is in violation of the constitutional rights of the appellant.
3. The provisions of this chapter have not been complied with in the proceedings before the agency.
4. The rules or procedure of the agency have not afforded the appellant a fair hearing.
5. The findings of fact made by the agency are not supported by a preponderance of the evidence.
6. The conclusions of law and order of the agency are not supported by its findings of fact.
7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.
8. The conclusions of law and order of the agency do not sufficiently explain the agency’s rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

We exercise restraint in deciding whether an agency’s findings of fact are supported by a preponderance of the evidence, and we do not make independent findings or substitute our judgment for that of the agency. Wanner v. North Dakota Workers Comp. Bureau, 2002 ND 201, ¶ 8, 654 N.W.2d 760. Rather, we decide whether a reasoning mind reasonably could have decided the agency’s findings were proven by the weight of the evidence from the entire record. Id. Although an administrative construction of a statute by the agency administering the law is ordinarily entitled to some deference if that interpretation does not contradict clear and unambiguous statutory language, questions of law, including the interpretation of a statute, are fully reviewable on appeal from an administrative decision. Zander v. Workforce Safety & Ins., 2003 ND 194, ¶ 6, 672 N.W.2d 668.

Ill

[¶ 5] Houn argues WSI did not provide him with a fair post-hearing adjudication. He claims WSI improperly rejected the ALJ’s recommended decision without reviewing a transcript of the hearing and after improperly communicating with its attorney.

[¶ 6] A similar claim about the timing of the preparation of a transcript was made in Schultz v. North Dakota Dep’t of Human Servs., 372 N.W.2d 888, 891-93 (N.D.1985). In Schultz, at 891, a transcript of an administrative hearing had not been prepared, but an electronic recording of the hearing was available when an administrative decision-maker rejected a hearing examiner’s recommendation. This Court said an administrative decision-maker need not actually hear the witnesses testify or hear oral argument, but the decision-maker must consider and appraise the evidence before reaching a decision. Id. at 892. This Court concluded the record reflected the decision-maker stated he had considered and appraised the hearing officer’s findings and conclusions, and this Court said review was limited to a review of the decision-maker’s decision under the appropriate standard of review with the caveat that the decision should be sufficient to explain the decision-maker’s rationale for not following the hearing examiner’s recommendation. Id. See N.D.C.C. § 28-32-46(8) (stating “conclusions of law and order of the agency [must] sufficiently explain the agency’s rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge”).

[¶ 7] Here, WSI’s decision states the ALJ’s recommended decision had been reviewed, and the ALJ’s legal analysis was rejected. WSI’s decision was based on a disagreement about legal issues, and we reject Houn’s argument about the lack of a transcript.

[¶ 8] Houn also claims WSI’s outside counsel had improper communications with WSI in violation of our decision in Miller v. Workforce Safety & Ins., 2004 ND 155, 684 N.W.2d 641. In Miller, at ¶ 3, WSI’s outside litigation counsel communicated with an attorney with WSI about an ALJ’s recommended decision. We concluded the communications to someone other than the decision-maker raised concerns about how, or whether, information was passed on to the decision-maker, and we suggested a better approach would be to send the letter directly to the decision-maker with a copy to opposing counsel. Id. at ¶ 10. We remanded to WSI for an evidentiary hearing to ascertain whether there were any improper ex parte communications and, if so, to place them in the record. Id. at ¶ 12.

[¶ 9] Here, WSI’s outside litigation counsel’s letter to WSI’s decision-maker complied with our suggestion in Miller. Houn nevertheless asks us to take judicial notice of WSI’s post-hearing procedures as shown in the evidentiary hearing on the remand in Miller. Houn has not provided this Court with any information to establish those procedures, and we conclude he has not shown any improper communications to WSI’s decision-maker. We therefore reject Houn’s arguments that WSI failed to provide him with a fair post-hearing adjudication.

IV

[¶ 10] Houn argues he is unable to work at the type of job he had at Bismarck Lumber because of his work-related injury, and he is entitled to an assessment of his right to disability benefits under N.D.C.C. § 65-05-04. Houn argues this Court’s decision in Wendt v. North Dakota Workers Comp. Bureau, 467 N.W.2d 720 (N.D.1991), applies, because he has never received disability benefits and his “reapplication” for benefits does not fit within the terms of N.D.C.C. § 65-05-08(1), which applies to reapplications “[w]hen disability benefits are discontinued” and requires an actual wage loss caused by a significant change in the com-pensable medical condition. Houn seeks a remand to WSI under N.D.C.C. § 65-05-04. WSI responds, asserting N.D.C.C. § 65-05-08(1) applies to Houn’s reapplication for benefits. WSI argues that because Houn quit his job with Bismarck Lumber, he failed to show an actual wage loss caused by a significant change in his compensable medical condition. He, therefore, was not entitled to disability benefits under our cases dealing with reapplications for disability benefits after benefits have been discontinued.

[¶ 11] Under N.D.C.C. § 65-01-11, a claimant seeking workers compensation benefits has the burden of proving by a preponderance of the evidence that he is entitled to receive benefits. Claimants thus must prove by a preponderance of the evidence that they are eligible for disability benefits. Gronfur v. North Dakota Workers Comp. Fund, 2003 ND 42, ¶ 6, 658 N.W.2d 337. Section 65-01-02(14), N.D.C.C., defines “disability” to mean “loss of earnings capacity and may be permanent total, temporary total, or partial.” As relevant to the issues in this case, N.D.C.C. § 65-05-08, deals with applications for disability benefits and provides, in part:

No benefits may be paid for disability, the duration of which is less than five consecutive calendar days. An employer may not require an employee to use sick leave or annual leave, or other employer-paid time off work, before applying for benefits under this section, in lieu of receiving benefits under this section, or in conjunction with benefits provided under this section, but may allow an employee to use sick leave or annual leave to make up the difference between the employee’s wage-loss benefits and the employee’s regular pay. If the period of disability is five consecutive calendar days’ duration or longer, benefits must be paid for the period of disability provided that:
1. When disability benefits are discontinued, the organization may not begin payment again unless the injured employee files a reapplication for disability benefits on a form supplied by the organization. In case of reapplication, the award may commence no more than thirty days before the date of reapplication. Disability benefits must be reinstated upon proof by the injured employee that:
a. The employee has sustained a significant change in the compensa-ble medical condition;
b. The employee has sustained an actual wage loss caused by the significant change in the compen-sable medical condition; and
c. The employee has not retired or voluntarily withdrawn from the job market as defined in section 65-05-09.3.
4. An employee shall request disability benefits on a claim form furnished by the organization. Disability benefits may not commence more than one year prior to the date of filing of the initial claim for disability benefits.
6. It is the burden of the employee to show that the inability to obtain employment or to earn as much as the employee earned at the time of injury is due to physical limitation related to the injury, and that any wage loss claimed is the result of the com-pensable injury.
7. If the employee voluntarily limits income or refuses to accept employment suitable to the employee’s capacity, offered to or procured for the employee, the employee is not entitled to any disability or vocational rehabilitation benefits during the limitation of income or refusal to accept employment unless the organization determines the limitation or refusal is justified.
8. The organization may not pay disability benefits unless the loss of earning capacity exceeds ten percent. The injured employee may earn up to ten percent of the employee’s preinjury average gross weekly earnings with no reduction in total disability benefits. The employee must report any earnings to the organization for a determination of whether the employee is within the limit set in this subsection.

[¶ 12] WSI has continuing jurisdiction when an original claim has been timely filed, and WSI, on its own motion or on application, may review a previous decision and may end, diminish, or increase compensation previously awarded or, if compensation has been refused or discontinued, may award compensation. N.D.C.C. § 65-05-04. Under that statute, an unappealed WSI decision is res judicata unless WSI reopens the claim, but the res judicata effect extends only to matters adjudicated at the time of that decision and does not extend to future changes in the claimant’s medical condition. Lass v. North Dakota Workmen’s Comp. Bureau, 415 N.W.2d 796, 800-01 (N.D.1987).

[¶ 13] In Wendt, 467 N.W.2d at 728, we held a discharge for just cause did not automatically prevent an employee from receiving disability benefits. We said a justifiable discharge suspends an injured employee’s right to wage loss benefits, but the suspension will be lifted with proof the employee’s work-related disability is the cause of the employee’s inability to find or hold new employment. Id.

[¶ 14] In Gronfur, 2003 ND 42, ¶¶ 11-15, 658 N.W.2d 337, however, a majority of this Court construed N.D.C.C. § 65-05-08(1), a statute enacted after the decision in Wendt, and held a claimant reapplying for previously discontinued disability benefits must show an actual wage loss caused by a significant change in medical condition. See also Sorlie v. Workforce Safety & Ins., 2005 ND 83, ¶¶ 14-16, 695 N.W.2d 453; Beckler v. Workforce Safety & Ins., 2005 ND 33, ¶¶ 9-13, 692 N.W.2d 483; Bachmeier v. North Dakota Workers Comp. Bureau, 2003 ND 63, ¶¶ 11-16, 660 N.W.2d 217; Lesmeister v. North Dakota Workers Comp. Bureau, 2003 ND 60, ¶¶ 22-24, 659 N.W.2d 350. The Gronfur majority said, “[t]o demonstrate an actual loss of wages or remuneration as a result of a .change in the claimant’s compensable medical condition, the claimant must necessarily first demonstrate that he was earning wages from employment when the change in his medical condition occurred and must then show that the change caused at least a partial loss of those wages.” Gronfur, at ¶ 12. The Gronfur majority rejected the claimant’s attempt to equate actual wages with earning capacity. Id. at ¶ 13. The Gronfur majority recognized the inconsistency of using “actual wage loss caused by a significant change in the compensable medical condition” as the basis for reapplying for disability benefits instead of diminution of earning capacity, but the majority concluded the legislature clearly made “actual wage loss” the requirement for restarting previously discontinued disability benefits. Id. at ¶ 14.

[¶ 15] WSI urges us to apply Gronfur to this case. WSI relies on its prior final decision denying Houn disability benefits because he voluntarily left his employment with Bismarck Lumber without medical authorization. WSI argues, because Houn has never returned to work and has never established a new wage, principles of res judicata and Gronfur preclude him from receiving disability benefits. WSI claims not applying Gronfur would create an unwarranted disparity in the treatment of claimants based on whether they initially received disability benefits following their work injury and would create two sets of rules for claimants.

[¶ 16] The plain language of N.D.C.C. § 65-05-08(1) applies to a reapplication for disability benefits “when disability benefits are discontinued.” Although Houn had a previous claim for disability benefits denied, he never received disability benefits for his work-related injury. Houn’s “reapplication” does not fit within the plain and unambiguous language of N.D.C.C. § 65-05-08(1), and the Gronfur line of cases. We therefore conclude N.D.C.C. § 65-05-08(1) does not control Houn’s claim for disability benefits.

[¶ 17] WSI argues, even if N.D.C.C. § 65-05-08(1) and Gronfur do not apply to Houn, the “clear intent of the Gronfur line of cases is to require a claimant who returns to WSI after an earlier adjudication as to his entitlement to disability benefits, and again requests disability benefits, to show that he has suffered an actual wage loss, as well as a change in condition.” However, the majority opinion in Gronfur, 2003 ND 42, ¶ 14, 658 N.W.2d 337, clearly recognized the inconsistency between using “actual wage loss” and “loss of earnings capacity” and said the legislature nevertheless had made that choice for restarting previously discontinued disability benefits. WSI’s reliance on the Gronfur line of cases is misplaced because Houn has not previously received disability benefits.

[¶ 18] We conclude WSI erred in applying N.D.C.C. § 65-05-08(1) to Houn’s application for disability benefits. Moreover, the ALJ in this case determined Houn’s compensable work injury had worsened, he would have permanent functional limitations as a result of that change in his medical condition, and he would not be able to work at jobs suitable to his skills, education, and work experience. In applying N.D.C.C. § 65-05-08(1) to Houn’s claim, WSI did not adequately address those determinations by the ALJ. Under these circumstances, Houn’s failure to appeal the initial denial of disability benefits does not limit our review. We conclude a remand is necessary for WSI to treat Houn’s claim as an original application for disability benefits. See N.D.C.C. § 65-05-08(6), (7), and (8).

V

[¶ 19] We reverse and remand for proceedings consistent with this opinion.

[¶ 20] GERALD W. VANDE WALLE, C.J., CAROL RONNING KAPSNER, and DALE Y. SANDSTROM, JJ., concur.


source: Caselaw Access Project

author: SANDSTROM, Justice.

license: Public Domain

text:
    2005 ND 117
    Judith MARTIN, Petitioner and Appellant v. STUTSMAN COUNTY SOCIAL SERVICES and the Department of Human Services for the State of North Dakota, Respondents and Appellees.
    No. 20050019.
    Supreme Court of North Dakota.
    June 22, 2005.

      Anita A. Flatt (argued), Legal Services of North Dakota, Fargo, N.D., and Richard R. LeMay (appeared), Legal Services of North Dakota, Minot, N.D., for petitioner and appellant.
    Jean R. Mullen, Assistant Attorney General, Office of Attorney General, Bismarck, N.D., for respondents and appellees.
   SANDSTROM, Justice.

[¶ 1] Judith Martin appeals a district court judgment affirming an administrative order that she is not eligible to receive home- and community-based services, because she lives in an environment that is a threat to her health and safety. We affirm.

I

[¶ 2] Martin is disabled and receives medicaid benefits through Stutsman County Social Services (“Social Services”). After Martin broke her leg on June 10, 2003, she was admitted to a nursing center from which she was later discharged on October 1, 2003. Prior to her discharge, she applied for' home-based services under the Medicaid Waiver for the Aged and Disabled Program. The home-based services program is designed to help aged and disabled persons who are at risk of being institutionalized, and it would pay for services Martin would receive at home to help her cope with her disabilities. She requested funding for personal care services to assist her during the day from the time she wakens until she goes to bed at night. She requires the use of a lift and personal assistance to transfer in and out of bed and to and from her wheelchair. Home-based services would pay a maximum of $2,400 for a 30-day month.

[¶ 3] Social Services ruled that Martin was not eligible for home-based services, because it estimated the cost would be more than $2,400, and it ruled the services would be provided under conditions that were a threat to her health and safety. Martin appealed, and an administrative law judge (“ALJ”) recommended to the executive director of the Department of Human Services (“Department”) that home-based services should not be provided to Martin. The Department adopted the ALJ’s proposed findings of fact, conclusions of law, and order. The Department found that Martin’s care would cost less than the $2,400 allowed by home-based services, but ordered that Martin be denied services because she and her husband smoke in a home in which an oxygen tank is being used. The Department found that Social Services overestimated the cost of Martin’s care, but held that Social Services correctly found there were “safety concerns due to Judith Martin and Harold Martin, as well as Ms. Jung, the caregiver, smoking in the apartment as Mr. Martin used oxygen in the home.” The Department affirmed Social Services’ denial of home-based services, concluding Martin was not eligible for the services because she and her husband smoked in her apartment while her husband used an oxygen tank for breathing. On petition for reconsideration, the Department acknowledged that Martin, but not her husband, smoked in her apartment, and the Department reaffirmed the rest of its order.

[¶ 4] Martin appealed the Department’s ruling to the district court. The district court affirmed the denial of benefits, holding that smoking in a house where someone is using oxygen is dangerous. It held the act of smoking near an oxygen tank is a “contraindicated practice” as defined in the North Dakota Administrative Code, requiring the Department to deny services to Martin. Martin appeals the district court judgment.

[¶ 5] The district court had jurisdiction under N.D. Const, art. VI, § 8, and N.D.C.C. § 28-32-42. Martin’s appeal to this Court is timely under N.D.C.C. § 28-32^49 and N.D.RApp.P. 4(a). This Court has jurisdiction under N.D. Const. Art. VI, §§ 2 and 6, and N.D.C.C. § 28-32-49.

II

[¶ 6] Martin argues the Department erred in adopting the ALJ’s recommendations finding that Martin’s husband was a smoker and concluding that Martin’s smoking creates a threat to her health and safety because her husband uses an oxygen tank to breathe. Martin argues there was no evidence presented as to the amount of oxygen that would be present in the apartment nor was evidence produced regarding the likelihood of a fire or an explosion occurring if she smoked in her bedroom while her husband used oxygen in a separate room. Martin claims, especially because she is not the person using the oxygen tank, the Department imper-missibly concluded it is common knowledge that smoking around oxygen is dangerous.

[¶ 7] Social Services argues that smoking near an oxygen tank is dangerous and that it is explicitly considered dangerous under the North Dakota Administrative Code. It argues Martin was properly denied services, because the Administrative Code’s examples of “contraindicated” client behaviors that can lead to termination of services include smoking while oxygen is being used nearby.

[¶ 8] “ ‘When a decision of an administrative agency is appealed from the district court to this Court, we review the decision of the agency.’ ” Steen v. N.D. Dep’t of Human Services, 1997 ND 52, ¶ 7, 562 N.W.2d 83 (quoting Walton v. N.D. Dep’t of Human Services, 552 N.W.2d 336, 338 (N.D.1996)). Our review of administrative agency decisions is limited. Huff v. N.D. State Bd. of Medical Examiners Investigative Panel B, 2004 ND 225, ¶ 8, 690 N.W.2d 221.

Under N.D.C.C. §§ 28-32-46 and 28-32-49, the district court, and this Court on further appeal, must affirm an administrative agency decision unless one of the following is present:
1. The order is not in accordance with the law.
2. The order is in violation of the constitutional rights of the appellant.
3. The provisions of this chapter have not been complied with in the proceedings before the agency.
4. The rules or procedure of the agency have not afforded the appellant a fair hearing.
5. The findings of fact made by the agency are not supported by a preponderance of the evidence.
6. The conclusions of law and order of the agency are not supported by its findings of fact.
7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.
8. The conclusions of law and order of the agency do not sufficiently explain the agency’s rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

Id. In reviewing an administrative agency decision, we do not substitute our judgment for that of the agency or make independent findings. Id. We decide only whether a reasoning mind reasonably could have concluded the findings were supported by the weight of the evidence in the entire record, and we defer to the hearing officer’s opportunity to judge the credibility of witnesses. Id. An agency’s decisions on questions of law are fully reviewable. Linser v. Office of Attorney General, 2003 ND 195, ¶ 6, 672 N.W.2d 643.

A

[¶ 9] Martin argues the ALJ erred in finding that her husband smokes. The ALJ’s recommended findings and order provided:

Ms. Martin and her husband smoke in their home. At the time of the assessment, they also allowed Ms. Jung, Ms. Martin’s care provider, to smoke in the home. Harold Martin uses oxygen in the home. It is common knowledge among reasonable and prudent persons, that lighting a match or lighter and smoking in an environment where oxygen is present is extremely dangerous as there is a risk of fire or explosion. Further, it is a contraindicated practice which is specifically spelled out in the Department’s rules as an immediate threat to the health or safety of a client, and which can form the basis for denial or termination of Medicaid Waiver program services. N.D. Admin. Code § 75-08-28-11(5). The rule reads that “smoking while using oxygen” is a contraindicated practice. Id. Ms. Martin took the rather naive approach that her behavior is not prohibited under the rule because she does not use oxygen, she only smokes in her own bedroom, and her husband leaves his oxygen out of her room; therefore, she is not smoking while using oxygen. Such an argument is simplistic and specious. It ignores the obvious, that it is dangerous and may be deadly to have open flames or smoke in an environment which is enriched with oxygen, and oxygen, being a gas, permeates the entire apartment. Clearly, the Department may deny Medicaid Waiver program services to Ms. Martin on the basis that her behavior and/or her husband’s behavior in smoking in their home, in which he uses oxygen, is a threat to Ms. Martin’s safety and is therefore, a contraindicated practice under the Department’s rule.

(Emphasis added.)

[¶ 10] The Department adopted the ALJ’s recommendations and denied Ms. Martin home-based services. It held “the evidence of record further shows that the behavior of Ms. Martin and her husband in smoking in the home, in which Mr. Martin uses oxygen, is a contraindicated practice which is an immediate threat to the health or safety of Ms. Martin, under N.D. Admin. Code § 75-03-23-11(5).” Martin requested a rehearing from the Department, arguing the ALJ erred in recommending a finding that Ms. Martin’s husband smokes. In its “Order upon Petition for Reconsideration,” the Department stated, “Even if Mr. Martin does not smoke, the evidence showed Mrs. Martin does smoke in the home while Mr. Martin uses oxygen. Therefore, the environment is not safe and presents an immediate threat to the health and safety of Mr. and Mrs. Martin.”

[¶ 11] Martin’s argument that the agency committed reversible error when it incorrectly found her husband smokes is not a factor in this case, because the Department found Martin’s behavior, standing alone, was a “contraindicated practice” as defined in the North Dakota Administrative Code. We, therefore, must consider whether Martin’s smoking creates a risk requiring the termination of home-based services.

[¶ 12] The Department regulations governing the denial and termination of services provide:

Termination of all SPED program [service payments for elderly and disabled program] and medicaid waiver program services or immediate termination of a specific service must be considered by the department through its aging services division when continued service to the client presents an immediate threat to the health or safety of the client, the provider of services, or others. Examples of client behaviors that could lead to termination of services include physical abuse of the provider or contraindicated practices, like smoking while using oxygen. The county social service board shall inform the client in writing the reason for the termination, the right to appeal, and the appeal process, as provided for in chapter 75-01-03.

N.D. Admin. Code. § 75-03-23-11(5) (emphasis added).

[¶ 13] “While an administrative agency is certainly bound by its own duly issued regulations, an agency nevertheless has a reasonable range of informed discretion in the interpretation and application of its own rules.” Bottineau County Water Resource Dist. v. N.D. Wildlife Society, 424 N.W.2d 894, 900 (N.D.1988) (citations omitted). “Thus, courts generally defer to an agency’s reasonable interpretation when the language is so technical that only a specialized agency has the experience and expertise to understand it or when the language is ambiguous.” Id. “No deference is called for when the regulating language is clear.” Id. We construe administrative regulations under well-established principles for statutory construction. North Dakota Dep’t of Human Services v. Ryan, 2003 ND 196, ¶ 11, 672 N.W.2d 649. “A cardinal rule of statutory construction requires interpretation of related provisions together, if possible, to harmonize and to give meaning to each provision.” Id.

[¶ 14] We have recently held, “An applicant for medicaid benefits must prove eligibility.” Roberts v. N.D. Dep’t of Human Services, 2005 ND 50, ¶ 7, 692 N.W.2d 922. It is uncontradicted that Martin smokes and lives in the same household in which her husband uses an oxygen tank to breathe. The assessment report states that during a meeting in Martin’s apartment, Martin lit a cigarette in front of a social worker and told her that she had given her care provider permission to smoke in the apartment. We need not decide whether it is common knowledge that a person smoking in a separate room could cause a fire or an explosion if a person in another room is using an oxygen tank, because we conclude the Department was not unreasonable in concluding that Martin’s smoking was a “contraindicated practice.” See Gross v. N.D. Dep’t of Human Services, 2004 ND 24, 673 N.W.2d 910 (under the deferential standard of review of agency decisions, this Court concluded a reasoning mind could reasonably conclude from the entire record that an agency’s interpretation and application of the administrative code was correct).

B

[¶ 15] Martin argues the Department’s rules exceed the authority granted to it by statute. This Court has held that it is a “basic rule of administrative law that an administrative regulation may not exceed statutory authority or supersede a statute, and that a regulation which goes beyond what the Legislature has authorized is void.” Moore v. N.D. Workmen’s Compensation Bureau, 374 N.W.2d 71, 74 (N.D.1985).

[¶ 16] “Administrative rule-making power is predicated on the theory that in certain subjects of governmental regulation public interest is better served by delegating a part of detailed lawmaking to expert administrators who are especially familiar with the subject the legislature has directed them to regulate.” Gofor Oil, Inc. v. State, 427 N.W.2d 104, 107 (N.D.1988). “There are many things upon which wise and useful legislation must depend which cannot be known to the lawmaking power, and must therefore be a subject of inquiry and determination outside of the halls of legislation.” Id. (citations omitted).

[¶ 17] The enabling statute authorizes the Department to “take actions, give directions, and adopt rules as necessary to carry out the provisions” of the human services programs chapter of the code. N.D.C.C. § 50-06.2-03(6). The statute gives the Department the power to make programs available to “individuals who, on the basis of functional assessments, income, and resources, are determined eligible for the services in accordance with rules adopted by the state agency.” N.D.C.C. § 50-06.2-03(5). The Department has the power to make available, through county agencies or human services centers, all services on behalf “of those individuals and families determined to be eligible for those services under criteria established by the state agency.” N.D.C.C. § 50-06.2-03(3).

[¶ 18] The North Dakota legislature expressly granted the Department the ability to adopt rules governing the eligibility of individuals for its services. The Department did not exceed its authority by defining “contraindicated practices” that could threaten the health or safety of clients, service providers, or others.

[¶ 19] A reasoning mind could reasonably conclude that Martin’s smoking while oxygen was being used in the home was a “contraindicated” activity under the administrative code. We, therefore, conclude the Department’s holding that Martin failed to establish her eligibility for benefits is supported by a preponderance of the evidence and is in accordance with the law.

[¶ 21] GERALD W. VANDE WALLE, C.J., CAROL RONNING KAPSNER, and MARY MUEHLEN MARING, JJ., concur.

Ill

[¶ 20] We affirm the district court judgment affirming the Department’s decision.


author: GILBERTSON, Chief Justice.

text:
    2005 SD 66
    STATE of South Dakota, Plaintiff and Appellant, v. Marty MULLER, Defendant and Appellee.
    No. 23360.
    Supreme Court of South Dakota.
    Argued April 27, 2005.
    Decided June 1, 2005.

      Lawrence E. Long, Attorney General, Sherri Sundem Wald, Assistant Attorney General, Pierre, SD, for plaintiff and appellant.
    Scott R. Bratland of Austin, Hinderaker, Hopper, Strait & Bratland, Watertown, SD, for defendant and appellee.
   GILBERTSON, Chief Justice.

[¶ 1.] Defendant moved to suppress all evidence obtained during a traffic stop in Watertown, South Dakota. Defendant alleged the traffic stop was in violation of his Fourth Amendment rights, as the officer’s stop was based on erroneous information relayed by the Watertown police dispatch alleging Defendant’s license plates were expired. As a consequence of the traffic stop, Defendant was arrested on suspicion of driving under the influence and driving under revocation. During the traffic stop, Defendant alleged he had renewed his license plates in Milbank, South Dakota. After a hearing on the motion to suppress, the trial court held that a traffic stop and subsequent arrest are invalid when an arresting officer acts upon information in records, which, though correct when put into records, has been erroneously retained in records through the fault of the State record keeping agency.

[¶ 2.] We reverse.

FACTS AND PROCEDURE

[¶ 3.] On November 22, 2003, at approximately 1:42 a.m., Marty Muller (Defendant) was observed driving a yellow Firebird in Watertown, South Dakota, by city police officer Tim Toomey. Officer Toomey’s attention was drawn to Defendant’s vehicle because of a loud exhaust system and because it was traveling ten miles per hour on snow packed roads. Of-fleer Toomey followed Defendant’s vehicle and observed it make several turns, traveling northbound, then westbound, turning southbound and westbound again. The license plate on Defendant’s vehicle was covered with snow that obscured the lower half of the plate where current registration stickers are normally located. However, Officer Toomey was able to see the numbers on the plate and initiated a license plate check. Officer Toomey was informed by the Watertown police dispatch that the license plate had expired in March 2003.

[¶ 4.] Based on this information, Officer Toomey initiated a traffic stop by engaging the vehicle stop lights on his patrol car. Defendant’s vehicle traveled one block to Third Street, turned northbound and turned into a parking lot before stopping. Once the vehicle stopped, Officer Toomey approached Defendant’s vehicle and wiped the snow off of the license plate and found a registration sticker that appeared to be current and .valid.

[¶ 5.] Officer Toomey then approached Defendant’s driver side window in order to explain why he had initiated the traffic stop. When Officer Toomey made eye contact with Defendant, he immediately noticed Defendant’s eyes were blood shot. As Officer Toomey leaned down to speak with Defendant in his vehicle, he noted an odor of an alcoholic beverage emanating from Defendant’s vehicle.

[¶ 6.] Defendant was asked for his driver’s license, but was able to produce only a South Dakota identification card. Defendant stated he had no other identification with him. Defendant was also unable to produce proof of registration, but was able to produce an expired insurance card. During the conversation, Officer Toomey observed Defendant’s actions were slow, and his speech was slurred.

[¶ 7.] Officer Toomey then asked Defendant to come back to the patrol car in order to determine why Defendant’s plates were coming back as expired. As Defendant walked toward the patrol car, he was staggering. Once in the patrol car, Officer Toomey noted an odor of alcoholic beverage on Defendant’s breath as he spoke. Officer Toomey requested a driver’s license check on Defendant, and was told by dispatch that Defendant’s license was revoked. Defendant alleged he had renewed his plates in Milbank, South Dakota, but was unable to produce a current registration.

[¶ 8.] Based on Officer Toomey’s observations of Defendant’s slurred speech, staggering, and the odor of alcohol on Defendant’s breath, additional officers were called to the scene to assist with field sobriety tests. Defendant was charged with driving under the influence under SDCL 32-23-1, and driving under revocation under SDCL 32-12-65(1). ■ The State gave Defendant notice via a Part II Information that it intended to seek revocation of driving privileges under SDCL 32-23-4 for a third DUI offense.

[¶ 9.] At a motion to suppress hearing, Officer Toomey testified he pulled Defendant over based on the expired plate check, and not because the license plate was partially obscured by snow or because of the loud exhaust. Officer Toomey testified he was still uncertain why Defendant’s license plates had come back as expired when Defendant had what appeared to be a current registration sticker displayed on the plates. Officer Toomey testified that he had never encountered a situation where a license plate check came back as expired and the vehicle had what appeared to be a valid sticker displayed on the license plate. .Officer Toomey also testified he had dispatch run the registration in addition to the plate, and the registration still came back expired. Finally, Officer Toomey testified he did not know whether or not the registration sticker was valid, only that it appeared valid to him and that the dispatch report he obtained after the arrest still indicated expired plates.

[¶ 10.] The trial court found that Officer Toomey’s traffic stop was based on the information provided by police dispatch. In its conclusions of law, the trial court held the Watertown police dispatch office is an agency of the State of South Dakota. The trial court also held the computer inaccuracy, even if unintended, amounted to a capricious disregard for the rights of Defendant. The trial court held a stop and subsequent arrest are invalid when an officer acts upon information in records, which though correct when put into records, no longer applies and which through the fault of the system, has been retained in the records. Finally, the trial court held the stop of Defendant’s vehicle was a violation of Defendant’s constitutional and statutory rights and entered an order suppressing all evidence obtained during the traffic stop.

[¶ 11.] The State’s motion to reconsider was denied by the trial court. The State raises one issue on appeal:

The trial court erred by granting Defendant’s motion to suppress evidence.

STANDARD OF REVIEW

[¶ 12.] We traditionally review a trial court’s decision to suppress evidence under an abuse of discretion standard. State v. Wilson, 2000 SD 133, ¶ 7, 618 N.W.2d 513, 516 (citing State v. Durke, 1999 SD 39, ¶ 11, 593 N.W.2d 407, 409). However, a trial court’s decision based on an error of law can be by definition an abuse of discretion. State v. Vento, 1999 SD 158, ¶ 5, 604 N.W.2d 468, 469. “Our review of a motion to suppress based on an alleged violation of a constitutionally protected right is a question of law examined de novo.” State v. Stanga, 2000 SD 129, ¶ 8, 617 N.W.2d 486, 488 (citing Ornelas v. United States, 517 U.S. 690, 699, 116 S.Ct. 1657, 1663, 134 L.Ed.2d 911, 920 (1996) (proper standard of review of Fourth Amendment challenges is de novo); United States v. Khan, 993 F.2d 1368, 1375 (9th Cir.1993); State v. Hirning, 1999 SD 53, ¶ 9, 592 N.W.2d 600, 603.) “The existence of reasonable suspicion is a question of law which is fully reviewable by this Court” under the de novo standard of review. State v. Herrboldt, 1999 SD 55, ¶ 7, 593 N.W.2d 805, 807 (quoting State v. Lownes, 499 N.W.2d 896, 898 (S.D.1993)).

ANALYSIS AND DECISION

[¶ 13.] The trial court erred by granting Defendant’s motion to suppress evidence.

[¶ 14.] The text of the Fourth Amendment provides:

The right of the people to be secure in their persons, ■ houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

US Const, amend. IV. The Fourth Amendment’s prohibition against unreasonable searches and seizures applies when a vehicle is stopped by law enforcement. Vento, 1999 SD 158, ¶ 8, 604 N.W.2d at 470 (citing State v. Richards, 1998 SD 128, ¶ 11, 588 N.W.2d 594, 596 (citing Delaware v. Prouse, 440 U.S. 648, 653, 99 S.Ct. 1391, 1396, 59 L.Ed.2d 660, 667 (1979))). An officer is required to have a “specific and articulate suspicion of a violation before an automobile stop will be justified” under the Fourth Amendment. Id. (quoting State v. Cuny, 534 N.W.2d 52, 53 (S.D.1995)). The standard for determining whether a factual basis existed for the traffic stop is as follows:

While the stop may not be the product of mere whim, caprice or idle curiosity, it is enough that the stop is based upon “specific and articulable facts which taken together with rational inferences from those facts, reasonably warrant the intrusion.” State v. Herrboldt, 1999 SD 55, ¶ 7, 593 N.W.2d 805, 808 (quoting Spenner v. City of Sioux Falls, 1998 SD 56, ¶ 14, 580 N.W.2d 606, 611). Under these standards, it is well established that a traffic violation, however minor, creates sufficient cause to stop the driver of a vehicle.” Whren v. United States, 517 U.S. 806, 810, 116 S.Ct. 1769, 1772, 135 L.Ed.2d 89, 95-[96] (1996); State v. Kenyon, 2002 SD 111, ¶ 16, 651 N.W.2d 269, 274.

State v. Akuba, 2004 SD 94, ¶ 15, 686 N.W.2d 406, 413 (quoting State v. Chavez, 2003 SD 93, ¶ 16, 668 N.W.2d 89, 95).

[¶ 15.] We have previously held that an officer’s subjective beliefs about a mistake of law, or his intentions, cannot invalidate a stop, as long as the circumstances of the stop, when viewed objectively, justified the action. Vento, 1999 SD 158, ¶ 11, 604 N.W.2d at 470 (citing Whren, 517 U.S. at 813, 116 S.Ct. at 1774, 135 L.Ed.2d at 98; Scott v. United States, 436 U.S. 128, 138, 98 S.Ct. 1717, 1723, 56 L.Ed.2d 168, 177 (1978); United States v. Cummins, 920 F.2d 498, 501 (8th Cir.1990)). We have also held the opposite to be true: if an officer unreasonably, subjectively, and mistakenly, believes that a motorist has violated a traffic law, there is no reasonable articulable suspicion sufficient to uphold a search under the Fourth Amendment. Webb v. South Dakota Dept. of Commerce and Regulation, 2004 SD 63, ¶ 10, 680 N.W.2d 661, 665.

[¶ 16.] “[A] reasonable investigation of a traffic stop may include asking for the driver’s license and registration, requesting the driver to sit in the patrol car, and asking the driver about his destination and purpose.” Akuba, 2004 SD 94, ¶ 20, 686 N.W.2d at 415 (citing United States v. Ramos, 42 F.3d 1160, 1163 (8th Cir.1994)). As long as the officer “still has some ‘objectively reasonable articulable suspicion’ that a traffic violation ‘has occurred or is occurring[,]’ ” an officer’s request of a driver’s license and registration will be reasonably related in scope to the circumstances that justified the stop in the first place. United States v. McSwain, 29 F.3d 558, 561 (citing United States v. Soto, 988 F.2d 1548, 1554 (10th Cir.1993) (speeding); United States v. Trimble, 986 F.2d 394 (10th Cir.1993) (expired license plate); United States v. Rivera, 867 F.2d 1261, 1263 (10th Cir.1989) (tailgating); United States v. Guzman, 864 F.2d 1512, 1519 (10th Cir.1988) (seat belt violation)).

[¶ 17.] In the instant case, Officer Too-mey relied on the information relayed to him by the Watertown police dispatch, that Defendant’s plates and registration were expired. The question at the motion to suppress became: was it reasonable for a police officer to rely on erroneous information transmitted by police dispatch? The trial court answered this question in the negative, asserting that the inaccurate information maintained in the State’s computerized vehicle registration system could be imputed to Officer Toomey because the Watertown police dispatch is an agency of the State. The trial court further held that “[a] computer inaccuracy, even if unintended, of this nature amounts to a capricious disregard for the rights of the Defendant as a citizen of the United States.”

[¶ 18.] This is an issue of first impression in South Dakota. Other jurisdictions that have addressed the issue include New York, the United States District Court for the District of Nevada, Iowa and Vermont. The issue turns in these jurisdictions on whether law enforcement maintains the computer database from which the erroneous data was retrieved.

[¶ 19.] In People v. Jennings, 54 N.Y.2d 518, 446 N.Y.S.2d 229, 430 N.E.2d 1282 (1981), the defendant was pulled over by a Hempstead city police officer for traffic violations and subsequently arrested when a standard warrant check indicated an outstanding warrant, which was later found to be invalid. The outstanding warrant was valid when entered into the New York State Identification and Intelligence System, and the National Crime Information Center (NCIC) databases. Id. at 521, 446 N.Y.S.2d 229, 430 N.E.2d 1282. However, the warrant had been executed nine months prior and vacated four months prior to the traffic stop, but not purged from either database. Id. The court in that case held the arrest was invalid and all evidence obtained as a result was suppressed as poisoned fruits of the unlawful arrest. Id. at 523, 446 N.Y.S.2d 229, 430 N.E.2d 1282. That court relied on the rationale of the “fellow officer” rule in Whiteley v. Warden, 401 U.S. 560, 91 S.Ct. 1031, 28 L.Ed.2d 306, that an officer may rely on information communicated to him by another officer in making an arrest, but if “the warrant turns out to be invalid, any evidence seized as a result of the arrest will be suppressed notwithstanding the reasonableness of the arresting officers reliance upon the communication.” Id. at 522, 446 N.Y.S.2d 229, 430 N.E.2d 1282 (citing Whiteley, 401 U.S. at 568, 91 S.Ct. at 1037, 28 L.Ed.2d at 313).

[¶20.] In People v. McElhaney, 146 Misc.2d 748, 552 N.Y.S.2d 825, 826 (N.Y.Sup.Ct.1990), a stolen car alarm was entered into a computer system upon receipt of a report of the vehicle’s theft by the owner. The car was subsequently recovered by the New York City police, and the owner obtained a written release from a New York County assistant district attorney and retrieved her vehicle. Id. At the time of the retrieval, police at the impound lot were unable to remove the stolen car alarm from them computer system, but nevertheless allowed the owner to leave with the vehicle. Id. The next day, a police officer spotted the car in a hotel parking lot, ran the plates and was advised it was listed as a stolen car. Id. When the owner attempted to leave with the car, she was arrested and a gun was found in her handbag. Id. The court in that case held there was no probable cause for the arrest and suppressed the handgun evidence. Id. at 827. That court relying on the “fellow officer” rule in Jennings, 54 N.Y.2d 518, 446 N.Y.S.2d 229, 430 N.E.2d 1282, noted the police had engaged in “inexcusable neglect [that] jeopardized the liberty of a crime victim” by failing to either update the police department’s computer records immediately or by not releasing the car to the owner until the record could be updated. Id.

[¶ 21.] In United States v. Mackey, 387 F.Supp. 1121 (D.Nev.1975), an arrest was held invalid and evidence suppressed after information relayed from California law enforcement through the NCIC and received by a Las Vegas police officer was found to be in error. The information in that case was false, in that the warrant for the defendant’s arrest had been complied with five months prior to the arrest. Id. at 1122. That court noted that the information contained in the NCIC database is the property of the various law enforcement agencies which submit data to the system. Id. at 1123. That court noted that the inaccurate information could result in the defendant’s arrest, booking, search and detention at any time by a routine check by the police. Id. at 1124.

[¶ 22.] The jurisdictions of Iowa and Vermont have reviewed the issue of whether incorrect information provided by the department of motor vehicles, or some other similar state agency, is chargeable to law enforcement agencies under the “fellow officer” or collective knowledge theory. In State v. Ewoldt, 448 N.W.2d 676 (Iowa Ct.App.1989), police officers requested both an automatic and a manual check of the driver’s license of the defendant, who the officers personally knew had recently been arrested for operating while intoxicated, as the officers suspected the individual was driving while under revocation. The license check came back as revoked, and Ewoldt was stopped for the offense of driving under a revoked license. Id. at 677. During the traffic stop the officers noted signs of intoxication and administered field sobriety tests, some of which Ewoldt failed. Id. Ewoldt submitted to an intoxilyzer test that indicated an alcohol concentration of .143. Id. After the arrest, the computer data relied upon by the arresting officers was proved to be incorrect, in that Ewoldt’s revocation was scheduled to take effect thirty days after the traffic stop took place. Id. Therefore, Ewoldt was not driving on a revoked license at the time of the traffic stop and subsequent arrest. Id. Ewoldt challenged the stop, contending the inaccuracy of the Department of Transportation driver’s license records should be imputed to the police officers who stopped him, thereby invalidating the stop for lack of reasonable suspicion. Id. Driver’s license records are maintained in Iowa by the Department of Transportation. Id. at 678. Iowa courts are required to provide the Department with OWI conviction records, thus making the Department the central repository for all license information. Id. That court noted that a mistaken basis for a stop will not necessarily invalidate the stop, as long as reasonable suspicion is based on articula-ble facts from a reasonably trustworthy source of information. Id. (citing State v. Morris, 227 N.W.2d 150, 152 (Iowa 1975)). The court held that the officers based their stop on information compiled by the Department of Transportation and did not know, and could not reasonably be expected to have known, that the information was inaccurate. Id. The stop was upheld and the evidence obtained was held to be admissible. Id.

[¶23.] Similarly in State v. Lanoue, 156 Vt. 35, 587 A.2d 405 (1991), an officer believed Lanoue’s right to operate a motor vehicle was under suspension, and initiated a driver’s license check through the Department of Motor Vehicles computer database. The information provided by the computer database verified that Lanoue’s license was under suspension. Id. at 406. The information in the Department of Motor Vehicles system was later found to be incorrect. Id. Although Lanoue’s right to operate had been suspended on August 13, 1987, it was reinstated at 12:01 a.m. on September 17, 1987, forty-five minutes before the traffic stop, but was not transferred to the Department of Motor Vehicles computer until after the stop had been made. Id. That court held that the incorrect information provided by the Department of Motor Vehicles was not chargeable to a law enforcement agency for the same reasons used by the Iowa court in Ewoldt, 448 N.W.2d 676, that is, the Department of Motor Vehicles is entrusted by statute to record and maintain driver’s license records, and is an official source of such information that is independent of law enforcement agencies. Id. at 407.

[¶ 24.] Jennings; McElhaney and Mackey are distinguishable from the instant case, in that the database relied upon by Officer Toomey was not maintained and updated by the Watertown Police Department itself, or by another law enforcement agency. Instead, the motor vehicle registration database is maintained by the South Dakota Department of Revenue and Regulation, which is charged with the duty of performing all “functions, duties, and services with respect to the registration and licensing of motor vehicles -” SDCL 32-1-3. The registration application process and collection of fees is conducted by the county treasurer of the vehicle owner’s county of residence, and fees and information are submitted to the Department of Revenue and Regulation. SDCL 32-1-6 and 32-5-2. The South Dakota Department of Revenue and Regulation and the county treasurers are independent of law enforcement agencies.

[¶ 25.] Officer Toomey had a reasonable and objective belief that Defendant might be driving with expired plates upon observing the vehicle and its partially covered license plate. Officer Toomey obtained information through police dispatch from the Department of Revenue and Regulation registration database that indicated Defendant’s plates were expired, which gave him a reasonable and objective belief that Defendant was driving with expired plates. Even after observing what Officer Toomey subjectively believed to be a valid renewal sticker, he was objectively justified in proceeding with the traffic stop based on his observation and the fact that he had never received incorrect vehicle registration information through dispatch from the Department of Revenue and Regulation. It is objectively reasonable for an officer to further investigate the inconsistency between a visual inspection of a registration sticker and information obtained from computerized records maintained by a separate and trustworthy state agency when the officer has never before received incorrect information from that agency.

[¶ 26.] Officer Toomey did not exceed the limits of a lawful investigative detention in violation of the Fourth Amendment, as he was conducting a brief investigatory stop to determine if Defendant was driving with expired plates. Officer Toomey was within the scope of the original stop when he asked for Defendant’s driver’s license, registration and insurance coverage information, and when Toomey asked Defendant to accompany him to and sit in the patrol car during the investigation. Evidence of Defendant’s intoxication and driving with a revoked license was obtained during the scope of a proper investigatory stop, and is thus admissible at trial on the charges of driving under the influence and driving under revocation.

[¶ 27.] Reversed.

[IT 28.] SABERS, KONENKAMP, ZINTER, and MEIERHENRY, Justices, concur.

      . The Codington County State's Attorney did not submit a brief in opposition to the motion to suppress, nor did he object to the trial court’s proposed findings of fact and conclusions of law, or submit his own. Therefore, the State is precluded from arguing on appeal that Defendant’s vehicle registration and sticker were not valid.

      . The State is precluded from arguing the good faith exception to the reasonable suspicion requirement on appeal, as it failed to present it to the trial court. State v. Eidahl, 495 N.W.2d 91, 94 (S.D.1993). We leave that issue for another day.

      . The New York State Identification and Intelligence System is a database system maintained by the New York Division of Criminal Justice Services, which contains criminal records, personal appearance data, fingerprints, photographs, and handwriting samples collected and submitted by qualified law enforcement agencies and the judicial system. NY Executive Law § 837 (McKinney 2003).

      .The National Crime Information Center is under the authority of the Federal Bureau of Investigation, and is a collection of identification, criminal identification, crime and other records submitted by and exchanged with authorized officials of federal, state, and municipal law enforcement agencies and penal institutions. United States v. Mackey, 387 F.Supp. 1121, 1123 (D.Nev.1975). Each contributing agency is responsible for verifying the accuracy of their data. Id. at 1123.

      . We have never had a case before us where foe vehicle registration records maintained by the Department of Revenue and Regulation were alleged to be in error. This is not to say that such an occurrence is impossible. Our holding today should not be interpreted as condoning sloppy record keeping by any state agency charged with maintaining computerized databases, as allowing erroneous information to be used as a basis for traffic stops, or arrests, provides no incentive for state agencies to exercise the level of care necessary to ensure accuracy and trustworthiness.


author: LAVORATO, Chief Justice.

text:
    IOWA SUPREME COURT BOARD OF PROFESSIONAL ETHICS AND CONDUCT, Complainant, v. W. Michael SHINKLE, Respondent.
    No. 05-0151.
    Supreme Court of Iowa.
    June 24, 2005.

      Charles L. Harrington and David J. Grace, Des Moines, for complainant.
    W. Michael Shinkle, Kansas City, Mo., pro se.
   LAVORATO, Chief Justice.

Ten years after the alleged ethical violations, Willie T. Lard, Jr. filed a complaint against attorney W. Michael Shinkle in connection with a workers’ compensation case in which Shinkle had represented Lard. Almost three years passed before the Iowa Supreme Court Board of Professional Ethics and Conduct filed its complaint against Shinkle based on Lard’s complaint. Those charges included neglect, misrepresentation, and advancing money to Lard during Shinkle’s representation of him. The Grievance Commission found that the Board had proven only the latter charge and recommended a public reprimand. We agree with the Commission’s finding and recommendation.

I. The Complaint.

The Board alleged the following. First, Shinkle failed to file in a timely manner a claim for compensation for Lard, which constituted neglect of a client’s legal matter. Second, Shinkle concealed his neglect and misrepresented the status of this matter to Lard. Last, Shinkle paid Lard money at various times to placate Lard, hoping that the case would “just go away.” These actions were in violation of DR 6-101(A)(3) (lawyer shall not neglect a client’s legal matter), DR 7-101(A) (lawyer shall not fail to seek the lawful objectives of a client, fail to carry out an employment contract, or prejudice or damage a client), DR 1-102(A)(4) (lawyer shall not engage in conduct involving dishonesty, fraud, deceit, or misrepresentation), and DR 5-103(B) (lawyer shall not advance financial assistance to a client while representing the client in connection with contemplated or pending litigation). These actions were also in violation of DR 1-102(A)(1) (lawyer shall not violate a disciplinary rule), (5) (lawyer shall not engage in conduct that is prejudicial to the administration of justice), and (6) (lawyer shall not engage in any other conduct that adversely reflects on the fitness to practice law).

II. Scope of Review.

Shinkle has not appealed under Iowa Court Rule 35.11. Nevertheless, we review the record de novo. Iowa Ct. R. 35.10(1). Although we give respectful consideration to the Commission’s recommendation, we ultimately decide what discipline is appropriate under the unique facts of each case. Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Wickey, 679 N.W.2d 1, 2 (Iowa 2004). This means we may impose a lesser or greater sanction than the discipline the Commission recommends. Id.; Iowa Ct. R. 35.10(1).

The Board has the burden to prove its allegations of lawyer misconduct by a convincing preponderance of the evidence. Id. “This burden of proof is greater than that in a civil case but less than that in a criminal case.” Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Lesyshen, 585 N.W.2d 281, 283 (Iowa 1998).

III. Facts

In our review of the record we are hampered, as was the Commission, by the undue delay as described above. In the intervening years, Shinkle lost much of the documentation relating to Lard’s case because of several office moves, office flooding on multiple occasions, and Shinkle’s failure to preserve computer information regarding the case. However, several important documents that are critical to Shinkle’s defense were available because Lard had retained them. Additionally, Shinkle was able to find some office notes, medical information, and letters pertaining to this matter.

Lard, Deborah Lard, and Shinkle testified at the disciplinary hearing. Deborah Lard is Lard’s wife from whom he was separated at the time of the hearing. While reviewing the record, we noted many inconsistencies in the testimony of Lard and Deborah, not only in connection with the documentation that was available but also between themselves. In contrast, Shinkle’s testimony was substantially consistent with that documentation. We therefore give his testimony considerably more weight.

Based on the documentation that was available and testimony from Lard, Deborah, and Shinkle, we find the following facts.

Following his graduation from law school in 1970, Shinkle practiced law in Des Moines as a securities lawyer. Later he became a trial lawyer, handling various types of litigation, including securities litigation. His office was in Davenport where he was associated with several law firms. Beginning in the mid-1980s, Shinkle became a solo practitioner until March 2000 when he joined a Kansas City law firm. Since the mid-1980s, Shinkle’s practice has been limited mostly to defending an odo-rant manufacturer in explosion cases.

Shinkle first represented Lard in the late 1970s in a discrimination case against Lard’s union. On November 30, 1989, Lard had his first meeting with Shinkle regarding the matter that ultimately gave rise to this disciplinary hearing. Shinkle produced some handwritten office notes that confirm this.

At the time he met with Shinkle, Lard had been recovering from injuries he received fourteen months earlier on September 7, 1988, while working on a barge on the Mississippi River for his employer, J.F. Brennan Co. Lard fell and injured his back. Lard had been receiving workers’ compensation benefits under the Longshoremen’s and Harbor Workers’ Compensation Act and had received approximately $32,000 in benefits when he visited with Shinkle about the case. Before this time, Lard had been dealing on his own with his employer’s insurance carrier, Wausau Insurance Companies.

On September 11, 1989, Lard, at the request of the carrier, was seen by Dr. Patrick W. Hitchon at the University of Iowa Hospitals and Clinics. Dr. Hitchon told Lard that he should either undergo a myelogram and CT or go back to work. In October Lard underwent the recommended studies. A letter from Dr. Hit-chon, dated December 5, 1989, is in evidence and states what the doctor told Lard in October: If Lard believes his pain is incapacitating, surgery would be offered; if Lard decides against surgery, he should return to work at the earliest opportunity. Lard told Shinkle what the doctor had said; however, Lard said he was fearful of any surgical procedure and would not agree to undergo surgery.

On December 23, 1989, Shinkle received a letter dated December 18,1989, from the employer’s carrier. . The carrier stated that it had been informed by a rehabilitation specialist that Lard had retained Shin-kle. The carrier also stated that it had information from the University of Iowa Hospitals and Clinics concerning Lard’s option of having surgery or returning to work immediately. Apparently, the carrier had information that Lard did not want surgery in which event, the carrier stated, no further compensation benefits were owed because Lard was capable of returning to work. The carrier further stated it was filing form LS-207, Notice of Controversion, with the U.S. Department of Labor in Chicago, in which it would controvert Lard’s right to continuing compensation.

As a result of the December 18 letter, Lard, Deborah, and Shinkle met on several occasions sometime in December or early January to discuss Lard’s potential back surgery. After considerable pressure from Deborah and Shinkle, Lard reluctantly agreed to the surgery, which occurred on January 17, 1990. Meanwhile, on December 21, 1989, the carrier filed the form LS-207 and sent a copy only to Lard. Shinkle did not become aware of this filing until some time later when Lard gave him a copy of the form.

On December 28, 1989, the carrier sent out a form captioned “Notice of Final Payment or Suspension of Compensation Payments” to Lard. Again, the notice was sent only to Lard. The form indicated that Lard had received compensation of $32,029.37 and that he had one year to file a claim from the date of last payment. Shinkle was not aware of this letter either until some time later when Lard gave him a copy.

On February 7, 1990, the United States Department of Labor wrote Lard inviting him to respond to his employer’s .objection to payment of any further compensation benefits to him. The letter advised Lard that, without a response from him, the employer’s controversion would be upheld and the case closed. Although the letter indicates a copy was sent to Shinkle, Shin-kle testified he did not receive it and that Lard gave him a copy shortly before March 22,1990.

Shinkle’s receipt of the February 7 letter from Lard prompted Shinkle to respond on March 22, 1990. In that letter, Shinkle informed the Department of Labor that Lard had undergone surgery and for that reason the controversion was moot. Shinkle also informed the Department of Labor that he had not received the February 7 letter, which Lard had recently given him, and asked the agency to send future documents to his full and correct address.

Some time later, Lard told Shinkle that the carrier had resumed paying Lard’s compensation benefits. A.s Lard was receiving compensation benefits, he also was receiving post-surgery rehabilitation treatments to enable him to return to work. Those treatments continued until July 1990. While these disciplinary proceedings were pending, Shinkle discovered documents from the Bettendorf Physical Therapy Center relating to the treatments.

Contrary to Lard’s testimony that he wanted to be rehabilitated so he could return to work, those treatment documents belie his testimony. A discharge report dated July 19, 1990 from the Bet-tendorf Physical Therapy Center stated that Lard was discharged because of lack of progress related to incompatibility of Lard’s goal (finding out what is wrong with him) and the program’s goal (returning to work), potential secondary gain from remaining dysfunction, and test results indicating Lard was trying to magnify his symptoms. To compound the deceitfulness in his testimony, Lard further testified that he never said these things to the physical therapists that were treating him.

The next significant date is August 6, 1990. On that date Lard’s doctor sent a letter to the carrier with a copy to Lard, stating that Lard could return to work without restrictions in September 1990. Significantly, no copy was sent to Shinkle. On August 9 the carrier sent Lard a letter enclosing a copy of the August 6 letter from his doctor and informing Lard that he was released to return to work on September 1, 1990. Again, no copy of this letter was sent to Shinkle. Lard did not provide Shinkle with copies of these letters until much later.

On August 31, 1990, the carrier sent Lard a letter enclosing a check for $129.81, representing temporary total disability payments through August 31, 1990. The letter informed Lard that because his doctor had released him to full employment without restrictions as of September 1, 1990, temporary disability payments have ceased. On the same day — August 31— the carrier sent Lard a notice of final payment or suspension of compensation payments. The notice contained the following language: “Any claim for compensation, to be valid, must be filed IN WRITING with the Deputy Commissioner, OWCP, WITHIN ONE YEAR after the date of injury or date of last payment of compensation.” The notice stated that the date of last payment was August 31, 1990 and that Lard had been paid a total of $46,582.81 in benefits. Neither the August 31 letter nor the August 31 notice of final payment indicates that Shinkle was sent a copy.

On October 26, 1990, the carrier wrote Lard a letter informing him that it would no longer pay for any more prescription refills. That prompted Lard to seek Shin-kle’s help in that regard. In the course of their discussions, Lard provided Shinkle with the August 6 letter from the doctor stating that Lard could return to work and the August 31 letter from the carrier stating Lard could return to work without restrictions on September 1, 1990.

During the course of this conversation with Lard, Shinkle asked Lard if he had gotten a LS-207 form or notice of final payment or follow-up letter from the Labor Department as he had in December 1989 and February ■ 1990. Lard denied receiving any such forms, notices, or follow-up letters. What Lard had neglected to tell Shinkle was that he indeed had received a notice of final payment from the carrier on August 31,1990, which informed Lard that he had one year from August 31, 1990 to file a claim. Lard and Shinkle disagree on whether Lard gave that critical notice to Shinkle at that meeting. Lard claims he did; Shinkle claims he did not.

Thereafter, Shinkle performed a number of services for Lard that are consistent with Shinkle’s claim that Lard had not given him the August 31, 1990 notice of final payment. For example, in March 1991, Shinkle wrote a letter to the Betten-dorf Physical Therapy Center concerning scheduling Lard for further evaluation because Lard was complaining of pain and because of that pain Lard had not gone back to work.

On May 10, 1991, Shinkle wrote to Lard’s local union, stating that he represented Lard and that if Lard was incapable of working or capable of only light duty work, he would like to see Lard’s workers’ compensation benefits restarted. On the same day, Shinkle wrote to Dr. Richard L. Kreiter, asking him to evaluate Lard and give an opinion as to Lard’s physical status.

On May 26, 1991, Shinkle wrote to Dr. Eugene Collins. In that letter Shinkle stated that Dr. Kreiter had given Shinkle his name and requested Dr. Collins to evaluate Lard. In a letter dated July 2 from Dr. Collins to Shinkle, Dr. Collins agreed to consider further testing after reviewing all of Lard’s records. On the same day, Shinkle wrote a hand-delivered letter to Dr. Collins enclosing payment for an initial interview and history of Lard. Shinkle said he was in the process of obtaining copies of all of Lard’s medical records and would send them to Dr. Collins.

August 31, 1991 was the last date for Lard to file a claim contesting the cessation of compensation benefits. Nothing was filed.

On September 16, 1991, Shinkle wrote a hand-delivered letter to Dr. Collins which included medical records from the University of Iowa Hospitals and Clinics.

On September 30,1991, Lard underwent a cervical myelogram that revealed an “old interbody fusion of C5 with 6” and a “fairly large extradural defect on -the nerve root sleeve at the C6-7 level on the left side. This could be due to a herniated disc and/or a hypertrophic spur.” On October 4 Dr. Collins wrote to Shinkle opining that Lard’s current problem was due to the original accident and that additional surgery was recommended. The words “additional surgery” in the letter are circled and a line was drawn to a handwritten note, initialed by Shinkle, that says, “Told Willie — He says no.”

Notes from a meeting with the Lards on April 4, 1992 say, “Second Surgery? — ‘No way’ ... Said no 2d surgery — no go.”

Lard did not undergo a second surgery and has never gone back to work. Lard has only worked odd jobs since his injury on the barge. At the time of the disciplinary hearing, Lard was unemployed. He testified that he never heard that Dr. Collins said he needed a second surgery. Lard denied any discussion between him, Deborah, and Shinkle, and his former doctor regarding a second surgery. Deborah and Shinkle testified that the three of them indeed had discussed Lard’s need for a second surgery.

Shinkle testified he believed that a second surgery would rectify Lard’s back problems and that the carrier would insist on the surgery before it would agree to recommence any compensation benefits. For these reasons, he and Deborah persisted in their efforts to convince Lard to have the surgery.

In the fall of 1993, Lard told Shinkle that he had changed his mind and would have the second surgery. Shortly, thereafter, Shinkle prepared a draft claim for compensation that he intended to file with the Labor Department. This draft states in part:

In view of the [foregoing], and in view of the fact that Employee did not receive either a Notice of Final Payment or Notice of Controversion of Right to Compensation, Employee respectfully requests that disability payments in the sum of $454.15 per week be paid to him and that he receive back payments of an amount sufficient to compensate him for [a] reasonable period of time that he should have been receiving said weekly disability payments.

When Shinkle met with Lard to discuss the draft, Lard, for the first time, told Shinkle that he had found an envelope he had received from the carrier that he had not opened until shortly before the meeting. That was the first time that Shinkle saw the notice of final payment or suspension of compensation payments dated August 31, 1990. During that discussion, Shinkle told Lard that nothing could be done because the one-year period had run.

Notwithstanding the fact that Lard received over $46,000 in compensation benefits, the only compensation Shinkle received from Lard for his services in this matter was $500. Shinkle’s trust account ledger shows that he received a $500 retainer from Lard on October 11, 1990. Although Lard claims he had a contingent fee contract, Shinkle testified there was no such agreement. Other than Lard’s testimony, there is no proof that such an agreement was reached. The trust account ledger showing a retainer for $500 is the only written evidence on this point. This evidence supports Shinkle’s testimony.

Shinkle admits from time to time he gave money to Lard, Deborah, and their daughter in response to specific requests from them during the representation and after the representation ended. From November 1989 until October 1993 — the time during which Shinkle represented Lard— he wrote checks to Lard totaling $1750.

Both Lard and Deborah testified that Shinkle was advancing the funds and that Shinkle would get the money back when he settled the case. The money, they said, was used to help pay bills because Lard was out of work. There is no written evidence to support the Lards’ claim that Shinkle would get the money back when he settled the case.

Shinkle on the other hand testified that he gave the money because of his long association with the family and he wanted to help them. In addition, Shinkle said he felt bad that he and Deborah may have pushed Lard too strongly to undergo the first surgery over Lard’s objections and his failure to convince Lard to undergo the second surgery. Shinkle denied that he gave the money expecting it to be paid back out of any settlement. Shinkle also denied the Board’s claim that he gave the money to placate Lard, hoping that the case would go away.

Like the Commission, we find that Shin-kle’s payments may have caused the Lards to believe these payments were not gifts but advances on some type of further settlement. However, given the. lack of any evidence to support the Lards’ testimony, we are not convinced that the Lards’ expectations were correct or that Shinkle made the payments to placate Lard, as the Board claimed.

IV. Commission’s Findings.

The Commission found that the Board failed to prove the allegations of neglect and misrepresentation. We agree and adopt this finding.

We have defined neglect as follows:

Neglect is not defined by our rules of ethics, but it has generally been recognized to involve indifference and a consistent failure to perform those obligations that a lawyer has assumed, or a conscious disregard for the responsibilities a lawyer owes to a client. Neglect is more than ordinary negligence and usually involves multiple acts or omissions. It is a form of professional incompetence that often involves procrastination, such as a lawyer doing little or nothing to advance the interests of a client after agreeing to represent the client.
An attorney who fails to file a claim on behalf of a client within the statute of limitations period is not necessarily subject to a professional disciplinary action.

Iowa Supremo Ct. Bd. of Prof'l Ethics & Conduct v. Moorman, 683 N.W.2d 549, 551-52 (Iowa 2004) (citations omitted).

Here, as mentioned, the evidence was that the August 31, 1990 notice of final payment or suspension of compensation payments commenced the one-year limitation period for filing a claim. That notice was not sent to Shinkle. All of Shinkle’s actions thereafter are consistent with his testimony that he did not learn of the notice until the fall of 1993 when Lard gave Shinkle the notice. Like the Commission, we do not think Shinkle would have (1) continued to seek medical treatment for Lard, (2) continued to seek medical opinions in Lard’s favor, and (3) prepared the draft compensation claim had Shinkle known the limitation period had expired. At most, Shinkle may have been less than careful in not contacting the carrier when he learned in October 1990 that thé carrier refused to pay for any more prescription refills. But Shinkle’s failure in this regard does not rise to the level of neglect for disciplinary purposes.

Moreover, the record is devoid of any evidence that Shinkle concealed any neglect or misrepresented the status of the claim to Lard, as the Board alleged. We therefore agree with the Commission’s dismissal of charges based on alleged violations of DR 1-102(A)(4), DR 6-101(A)(3), and DR,7-101(A).

The Commission, however, did find that Shinkle violated DR 5-103(B) when he gave Lard $1750 during his representation of Lard. We likewise agree with and adopt this finding.

As mentioned, Shinkle freely admitted, and his checks establish, that he gave Lard $1750 while he was representing Lard. That Shinkle gave Lard the money because the Lards were in financial need does,not make the conduct any less unethical. Comm. on Prof'l Ethics & Conduct v. Humphreys, 524 N.W.2d 396, 398 (Iowa 1994) (rule prohibiting an attorney from giving client money, does not make any exception when given out of humanitarian concern for client’s poor financial situation) (citing Comm. on Prof'l Ethics & Conduct v. Bitter, 279 N.W.2d 521, 523 (Iowa 1979)). Moreover, that Shinkle was already representing Lard at the time he gave the money to Lard does not eliminate the unethical nature of the act. See Humphreys, 524 N.W.2d at 398.

The Commission also found that the payments to Lard violated DR 1-102(A)(1), which prohibits a lawyer from violating a disciplinary rule. Because we find that Shinkle violated DR 5-103(B) by making the payments to Lard, we agree with and adopt this finding of the Commission.

The Commission did not find that the payments to Lard violated DR 1-102(A)(6), which prohibits a lawyer from engaging in any other conduct that adversely reflects on the fitness to practice law. However, because of the following finding made by the Commission, with which we agree and adopt, we find that such payments did violate DR 1-102(A)(6):

It is also the Commission’s determination that the payment of checks or cash to the Lards caused a miscommunication or unrealistic expectations. The Lards believed that they had further claims. They believed that the payments were not [gifts] but advances on some type of further settlement. Mr. Shinkle maintained that they were gifts. The post 1993 payments coupled with bad communication caused confusion and may have deterred the Lards from seeking other remedies on their behalf.

DR 1-102(A)(6) implicates more than legal competence. Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Stowers, 626 N.W.2d 130, 133 (Iowa 2001). It also embraces one’s character and one’s suitability to act as an officer of the court. Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Mulford, 625 N.W.2d 672, 683 (Iowa 2001). Giving a client money that resulted in miscommunication or unrealistic expectations and prevented the client from seeking other remedies certainly reflects on Shinkle’s fitness to practice law because such conduct lessens public confidence in the legal profession. See Stowers, 626 N.W.2d at 133 (“DR 1-102(A)(6) applies to ‘conduct that lessens public confidence in the legal profession.’ ” (Citation omitted.)).

Unlike the Commission, we find that Shinkle did not violate DR 1-102(A)(5), which prohibits a lawyer from engaging in conduct prejudicial to the administration of justice. While there is “no typical form of conduct that prejudices the administration of justice,” a “common thread” is that “the attorney’s act hampered the efficient and proper operation of the courts or of ancillary systems upon which the courts rely.” Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Steffes, 588 N.W.2d 121, 123 (Iowa 1999). Shin-kle’s act of giving money to Lard does not seem to us to impact the “efficient and proper operation of the courts.”

V. Discipline.

Selecting the appropriate discipline in any disciplinary case requires that we “ ‘consider the respondent’s fitness to continue in the practice of law, deterrence of others from similar conduct, and assurance to the public that the courts will maintain the ethics of the profession.’ ” Bitter, 279 N.W.2d at 523 (citation omitted).

We have said that violation of DR 5-103(B), avoiding acquisition of an interest in litigation, alone “does not constitute a serious infraction.” Humphreys, 524 N.W.2d at 398. One attorney received a two-month suspension for violating this provision by advancing money to clients, neglecting a client’s matter in respect to clearing a title objection in a real estate matter, having twenty-six probate delinquencies, and adding his name as payee on a client’s check. Bitter, 279 N.W.2d at 524-25, 527.

Shinkle was given a private admonition in 1987 for neglect, a violation different from the violations proven here. He has no other disciplinary record.

In light of the foregoing and given the unique facts of this case, we think the Commission’s recommendation of a public reprimand is appropriate.

Costs are taxed to Shinkle pursuant to Iowa Court Rule 35.25.

ATTORNEY REPRIMANDED.


author: CARTER, Justice.

text:
    Timothy G. GALBRAITH and Margaret Galbraith, Appellants, v. ALLIED MUTUAL INSURANCE COMPANY, A Division of Nationwide Insurance Company, Appellee.
    No. 03-1065.
    Supreme Court of Iowa.
    June 24, 2005.

      Warren L. Bush, Wall Lake, for appellants.
    James W. Redmond and Rosalynd J. Koob of Heidman, Redmond, Fredregill, Patterson, Plaza, Dykstra & Prahl, L.L.P., Sioux City, for appellee.
   CARTER, Justice.

Timothy G. Galbraith, a personal-injury claimant in the district court, and his wife Margaret Galbraith, as a consortium claimant, appealed from an adverse summary judgment in their action against Allied Mutual Insurance Company (Allied). The Galbraiths allege bad faith by an insurer in delaying payment of underinsured motorist benefits. The district court had granted summary judgment for the insurer, and the court of appeals reversed that decision. After reviewing the record and considering the arguments presented, we vacate the decision of the court of appeals and affirm the judgment of the district court.

Timothy Galbraith was injured on April 23, 1998, when a pickup driven by Wendell Warntjes crossed the centerline of the road and struck the vehicle that Galbraith was operating. Galbraith sustained head injuries in the collision. He later sued Warntjes and Warntjes’ wife, who was the co-owner of the vehicle Warntjes was operating. The Galbraiths later amended their petition to assert that Warntjes was acting within the course of his employment with Scott Guy at the time the collision occurred. Guy was added as a defendant to the Galbraiths’ claim, as was Allied, based on a claim that the defendants were under-insured. The district court severed the claim against Allied to be tried after the claims against the other defendants were resolved.

The underinsured-motorist provisions in the Galbraiths’ policy with Allied provided:

[Allied] will pay all sums which an “insured” is legally entitled to recover as compensatory damages from the owner or operator of an “underinsured motor vehicle” resulting from “bodily injury” to any person caused by an accident.
[Allied] will only pay after an “insured’s” rights to the proceeds of all liability insurance bonds or policies have been determined by judgment or settlement agreement.

On April 30, 2001, Allied was informed by the Galbraiths’ counsel that the Warntjes-es’ liability insurer had offered to pay its policy limits of $100,000 to settle the claim. The letter indicated the belief that Guy’s policy did not provide coverage for Warntjes and that it was anticipated that no other liability insurance was applicable to this claim through either Guy or the Galbraiths. The April 30 letter contended that the Galbraiths’ total damages exceeded $150,000 and demanded payment of Allied’s policy limits of $50,000.

Allied then sought to take Guy’s deposition concerning the existence of other liability insurance. On May 4 counsel for the Galbraiths wrote counsel for Allied and stated it would be necessary to obtain a sworn statement from Guy in order to settle the claims against the parties other than Allied. That letter further indicated that, if Allied did not tender its policy limits when that settlement was concluded, the Galbraiths’ petition against Allied would be amended to assert a bad-faith claim. Before Guy’s affidavit had been received and prior to the time the case was settled, the Galbraiths on May 21 moved for leave of court to amend their petition and assert a bad-faith claim against Allied for refusal to tender its policy limits.

While the application for leave to amend was pending, Allied on June 11 offered $25,000 (in addition to $5000 of medical payments already received by the Gal-braiths) in order to settle its underinsured-motorist liability. On June 15, 2001, counsel for the Galbraiths wrote to counsel representing Allied declining the $25,000 offer and indicating that they intended to proceed with the prosecution of their bad-faith claim. This letter indicated that a signed affidavit had been obtained from Guy stating that he had no liability insurance coverage for the Galbraiths’ claims. The letter further stated “the Galbraiths have now agreed to accept $100,000.00 from the insurance carrier (Hawkeye Security) for Warntjes and intend to fully release Warntjes and Hawkeye Security.”

On June 25 Allied tendered its policy limits to the Galbraiths in settlement of its underinsured-motorist liability to those insureds. As provided in the policy, the $50,000 policy limit was, reduced by the $5000 in medical payments already received by the Galbraiths. On June 27 the district court granted the Galbraiths’ application for leave to amend their petition and assert a bad-faith claim against Allied.

Allied filed a motion for summary judgment concerning the bad-faith claim pending in the district court. The court initially overruled that motion on the ground that there were issues of material fact with regard to whether the extent of the Gal-braiths’ claims against the tortfeasor were so clearly established that Allied acted in bad faith by delaying payment. Allied filed a motion to reconsider the court’s summary-judgment ruling. In reconsidering the summary judgment motion, the court focused not only on the strength of the Galbraiths’ claims against the tortfea-sor but also on the timing of Allied’s decision to tender its policy limits.

The district court noted in this regard that the settlement agreemefit between the • Galbraiths, the Warntjeses, Guy, and Hawkeye Security Insurance Company had not been completed until June 28, 2001. This was three days after Allied had already tendered its policy limits. The district court concluded that Allied had no obligation to make payments under its un-derinsured-motorist coverage until final settlement of the claims against the alleged tortfeasors. Based on that premise, the court sustained Allied’s motion for summary judgment.

I. Scope of Review.

Our review of summary judgment rulings is for correction of errors at law. Am. Soil Processing, Inc. v. Iowa Comprehensive Petroleum Underground Storage Tank Fund Bd., 586 N.W.2d 325, 329 (Iowa 1998); Iowa R.App. P. 6.4. We must determine whether, based on the undisputed material facts, the moving party is entitled to judgment as a matter of law. Am. Soil Processing, 586 N.W.2d at 329; Hegg v. Hawkeye Tri-County REC, 512 N.W.2d 558, 559 (Iowa 1994).

II. Determination of First-Party, Bad-Faith Claims.

In first-party, bad-faith claims, the plaintiff must show (1) the absence of a reasonable basis for denying the claim, and (2) the insurer knew or had reason to know that its denial was without a reasonable basis. Thompson v. United States Fid. & Guar. Co., 559 N.W.2d 288, 291 (Iowa 1997); Morgan v. Am. Family Mut. Ins. Co., 534 N.W.2d 92, 96 (Iowa 1995). In determining whether issues of material fact exist for purposes of deciding motions for directed verdict or for summary judgment made by insurers sued for bad faith, the rules are the same as for other types of cases. Thompson, 559 N.W.2d at 290-91. This means that to succeed on such motions the insurer must demonstrate that a reasonable trier of fact could not determine that the insurer lacked a reasonable basis for denying or for delaying payment of the claim. Id. In resolving bad-faith issues in underinsured-motorist insurance matters, we have recognized that, if the underlying third-party tort action is fairly debatable as to either the facts or the law, this circumstance provides a reasonable basis for denial of underinsured-motorist benefits. Wetherbee v. Econ. Fire & Cas. Co., 508 N.W.2d 657, 661-62 (Iowa 1993). The fact that a reasonable trier of fact could return a verdict on the tort claim in excess of other available insurance does not establish that a claim is not fairly debatable if a reasonable trier of fact could also return a verdict that would not implicate the underinsured coverage. Id.

In reviewing the decision of the district court, the court of appeals concluded that it was not proper to rely on the date of the signed settlement agreement in the underlying tort action in determining when Allied became responsible for paying the Galbraiths the benefits to which they were entitled under their underinsured-motorist insurance. The court opined that a jury could find that a binding oral settlement agreement had been reached between the parties at an earlier date. The court of appeals stated the issue as follows:

In order to uphold the district court’s conclusion it must appear, as a matter of law based upon undisputed facts, that no settlement agreement occurred prior to June 25, the date Allied tendered the underinsured motorist policy limit. If there is a disputed issue of material fact regarding whether an enforceable settlement agreement was reached prior to this date, the district court must be reversed.

We must respectfully disagree with the court of appeals.

In situations in which an underin-sured-motorist claim has been paid by the insurer but a bad-faith claim is made with respect to the timing of the payment, factors other than the strength of the underlying tort suit may be of crucial significance on the issue of the insurer’s bad faith. That is the situation here. An un-derinsured-motorist carrier cannot be expected to make payment to its insured prior to the time that the underlying tort litigation has been fully resolved and a determination has been made concerning the presence or absence of liability insurance available for payment of the claim. The insurer is not required to accept the insured’s word as to such matters and may demand adequate documentation.

The fact that the Galbraiths may have been able to enforce an earlier oral agreement if no written agreement had been forthcoming did not defeat Allied’s right to insist on a-signed written agreement as documentation for payment of the Gal-braiths’ claim. Moreover, it appears that throughout the negotiations both the Gal-braiths and Allied were proceeding on the basis that the Guy affidavit was essential to the conclusion of any settlement. Allied was not advised as to the obtaining of the Guy affidavit until June 15, the time at which its earlier settlement offer was rejected. The insurer was not required to accept this affidavit as true on its face and could reasonably take additional time to investigate the provisions of Guy’s liability policy with another company that had been identified in the affidavit. As the district court correctly concluded, the timing of the negotiations and the settlement were such as to preclude a determination of bad faith on Allied’s part with respect to the time at which it paid the Galbraiths’ underinsured-motorist claim.

We have considered all issues presented and conclude that the decision of the court of appeals must be vacated. The judgment of the district court is affirmed.

DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED.