author: KALITOWSKI, Judge.

text:
    ISLES WELLNESS, INC., n/k/a Minneapolis Wellness, Inc., et al., Appellants, v. PROGRESSIVE NORTHERN INSURANCE CO., a Delaware corporation doing business in the State of Minnesota, Respondent (A04-485, A04-486, A04-489), Defendant (A04-487, A04-488), Allstate Indemnity Company, a Delaware corporation doing business in the State of Minnesota, Defendant (A04-485, A04-486, A04-489), Respondent (A04-487, A04-488).
    Nos. A04-485 to A04-489.
    Court of Appeals of Minnesota.
    Dec. 14, 2004.

      Michael J. Weber, Weber Law Office, Minneapolis, MN, for appellants.
    Richard S. Stempel, Eric S. Hayes, Stempel & Associates, P.L.C., Hopkins, MN, for respondents.
    Katherine A. McBride, Leatha G. Wol-ter, Meagher & Geer, P.L.L.P., Minneapolis, MN, for amicus curiae Insurance Federation of Minnesota.
    Considered and decided by HUDSON, Presiding Judge; KALITOWSKI, Judge; and KLAPHAKE, Judge.
   OPINION

KALITOWSKI, Judge.

This case is an appeal from a judgment of the Hennepin County District Court, entered pursuant to an order and memorandum granting respondents’ motion for partial summary judgment, dismissing appellants’ complaints, and dismissing respondents’ counterclaims. Appellants'— Isles Wellness, Inc. (n/k/a Minneapolis Wellness), A Licensed Physical Therapy, Inc., and Licensed Massage Therapist, Inc. — are clinics in the Twin Cities that provide chiropractic, physical therapy, and massage services. Respondents, Progressive Northern Insurance Company and Allstate Indemnity Company, are providers of automobile insurance in Minnesota. Appellants contend that the district court erred in holding that appellants violated the corporate practice of medicine doctrine.

FACTS

Jeannette Couf, a layperson not licensed as a healthcare provider, opened the first of the three appellant clinics in the fall of 2000. Couf is the sole shareholder of all three clinics. Appellants are not organized under the Minnesota Professional Firms Act. See Minn.Stat. § 319B (2002). Instead, appellants are organized under the Minnesota Business Corporation Act. See Minn.Stat. § 302A (2002). Appellants provided treatment to various individuals involved in car accidents who had no-fault insurance through respondents. Appellants employed various people, including licensed chiropractors, to perform these treatments. Respondents initially covered these treatments, but then stopped paying appellants in the spring of 2002.

Forty-nine of appellants’ clients assigned their claims to appellants. Appellants then brought five suits against respondents alleging breach of contract and a violation of the Minnesota Fair Claims Practices Act. The parties agreed that these 5 cases would represent and resolve all 49 claims. Respondents brought a counterclaim in each case alleging violations of the corporate practice of medicine doctrine and the Minnesota Professional Firms Act. Respondents also claimed that appellants misrepresented material facts, and that respondents were required by law to investigate the claims.

Appellants brought a motion for partial summary judgment based on the following grounds: (1) respondents did not contest appellants’ medical claims on the merits and were in violation of the Minnesota No-Fault Automobile Insurance Act; (2) respondents should not now be allowed to contest appellants’ claims because respondents failed to comply with statutory procedures and deadlines for processing claims; and (3) respondents lacked credible supporting evidence for the supposed grounds upon which respondents were relying to deny appellants’ claims, and the grounds were not legally valid reasons for denying payment.

Respondents also brought a motion for partial summary judgment arguing that, because appellants violated the corporate practice of medicine doctrine and the Minnesota Professional Firms Act, appellants’ contracts for payment of claims were void. Respondents further argued that the contracts were voidable on public policy grounds. Respondents allege that Couf was running a “patient mill” by aggressively recruiting accident victims for the appellant clinics and dictating the frequency and course of treatment. Respondents claim that Couf coerced patients and sometimes paid them to receive treatment, insisted on approving all bills to ensure that the chiropractors followed her directions, and billed the maximum amount. Respondents allege that Couf terminated or asked chiropractors to resign if they did not follow Couf s treatment regime.

The district court filed an order holding that, because appellants practiced healing in violation of the corporate practice of medicine doctrine, all appellants’ claims were dismissed. The district court did not reach any other issues, including appellants’ arguments regarding the Minnesota No-Fault Automobile Insurance Act, the Minnesota Fair Claims Practices Act, or whether respondents had evidence that any of the treatments were not reasonable or necessary. Nor did the district court reach respondents’ argument that, apart from the corporate practice of medicine doctrine, appellants violated public policy in the organization and operation of their clinics. Because the district court did not reach these issues, we limit our review to the district court’s application of the corporate practice of medicine doctrine.

ISSUE

Did the district court err in deciding that appellants violated the corporate practice of medicine doctrine?

ANALYSIS

On an appeal from summary judgment, this court asks two questions: (1) whether there are any genuine issues of material fact; and (2) whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). This court must examine the evidence in the light most favorable to the party against whom judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993).

Appellants argue that Minnesota law allows regular business corporations to provide chiropractic, physical therapy, and massage therapy, as long as duly licensed professionals are responsible for directly and independently providing the healthcare services. More specifically, appellants reject the premise that their clinics were organized in violation of the so-called corporate practice of medicine doctrine. Appellants argue that, in Minnesota, the corporate practice of medicine doctrine extends, if at all, to only a handful of healthcare professionals as identified by either statute or common law. Appellants state that, because no Minnesota statute or case prohibits appellants from hiring chiropractors, physical therapists, or massage therapists, appellants did not violate the corporate practice of medicine doctrine.

The district court, relying solely on Granger v. Adson, 190 Minn. 23, 250 N.W. 722 (1933), determined that appellants were “practicing healing” in violation of the corporate practice of medicine doctrine. The district court examined Gran-ger and concluded that its holding prohibits the practice of medicine or healing by a corporation. The district court explained that, although the Granger court did not identify its holding as the adoption of the corporate practice of medicine doctrine, it would use the term because “both parties use it, it is convenient, and it has been used by reporters to Minnesota statutes.” See Minn.Stat. Ann. § 319B.01 reporter’s notes (West 2004) (stating that, until the enactment of the statutes comprising the Minnesota Professional Firms Act under chapter 319, “the corporate practice of medicine doctrine prevented a for-profit corporation from furnishing medical services and thereby prevented doctors from organizing a practice as a corporation.”) (citing Granger, 190 Minn. at 26-27, 250 N.W. at 723).

Our application of Granger to these facts leads us to conclude that it is both distinguishable on its facts and limited in its holding. Thus, even if we assume that the Granger court adopted the corporate practice of medicine doctrine, we conclude the district court erred in holding that Granger bars the corporate employment of chiropractic, physical therapy, or massage therapy practitioners.

Granger involved a layman (non-doctor), Mr. Granger, who conducted “health audits” for subscribers to his service for a fee. Granger, 190 Minn. at 24, 250 N.W. at 722. These health audits consisted of blood pressure tests and urine samples from subscribers that Granger would send to a licensed pathologist for analysis. Id. The pathologist would report the results of his analysis to Granger, who would then present the results to the subscriber and offer advice regarding diet, habits, and exercise, or refer the subscriber to a physician. Id.

The supreme court determined that in acting as he did, Granger was personally practicing medicine in violation of Minnesota law. Id. at 25, 250 N.W. at 723 (citing 1927 Minnesota statute providing that it is a gross misdemeanor to practice medicine in Minnesota without a license). The supreme court also concluded that Granger was practicing healing in violation of Minnesota law. Id. at 27, 250 N.W. at 723-24 (citing 1927 Minnesota statute defining the practice of healing to include the diagnosis or analysis of the condition of human health). The supreme court held that the contract between Granger and the pathologist was illegal, against public policy, and void. Id., 250 N.W. at 724.

Here, the district court specifically determined that the appellant clinics were not practicing medicine as defined by Minnesota law. See Minn.Stat. § 147.081 (2002) (defining the unlawful practice of medicine and stating penalty). Rather, the district court found that appellants engaged in the practice of healing as defined by Minnesota law. But unlike the Granger court, the district court did not find that any individuals practiced healing without the proper licensing or certification. See Minn.Stat. § 146.01 (2002) (defining the practice of healing). Instead, the district court voided appellants’ contracts solely on its application of the corporate practice of medicine doctrine, concluding that “any contract [appellants] have for practicing healing is illegal, against public policy, and void.”

To support its conclusion that Granger prohibits both the practice of medicine and the practice of healing by a corporation, the district court cited the following language in Granger:

In In re Disbarment of Otterness, 181 Minn. 254, 232 N.W. 318, 73 A.L.R. 1319, we said that a corporation or layman could not indirectly practice law by hiring a licensed attorney to practice law for others for the benefit or profit of such hirer. We are just as firmly convinced that it is improper and contrary to statute and public policy for a corporation or layman to practice medicine in the same way.

Granger, 190 Minn. at 26-27, 250 N.W. at 723. But even assuming that this language adopts the corporate practice of medicine doctrine in Minnesota, we conclude that Granger cannot be read to bar the corporate employment of chiropractic, physical therapists, or massage therapists. Granger involved an individual whose actions were found to constitute the practice of medicine. Id. at 25, 250 N.W. at 723. Here, the conduct relied on by the district court involves the corporate ownership of a chiropractic clinic. And although the Granger court drew an analogy between a corporation indirectly practicing law and indirectly practicing medicine, it did not extend this reasoning to the practice of healing. Thus, we cannot conclude that the corporate ownership of a chiropractic clinic violates the supreme court’s holding in Granger.

In addition, there are no statutes that support a prohibition against the corporate employment of chiropractic, massage therapy, and physical therapy practitioners. And appellants note that the Minnesota Legislature recently introduced but failed to pass a bill prohibiting the corporate practice of chiropractic. S.F. 3228 (Minn. 2001-02) (proposing that it be unlawful in Minnesota for any firm, other than one organized pursuant to the Minnesota Professional Firms Act, to practice chiropractic). Further, with respect to the practice of healing, the legislature has statutorily prohibited only the corporate practice of dentistry. See Minn.Stat. § 150A.11 (2002) (stating that it is unlawful for any person to practice dentistry under the name of a corporation or company). We presume that the legislature would not have found it necessary to bar the corporate practice of dentistry if, because of the holding in Granger, there existed a broader prohibition to the corporate practice of healing.

In conclusion, because the district court did not address the merits of appellants’ other claims or respondents’ counterclaims, including respondents’ allegations regarding Couf s involvement in the appellant clinics, we limit our decision to the district court’s application of the corporate practice of medicine doctrine. Assuming that, in Granger, Minnesota adopted the corporate practice of medicine doctrine, we conclude that it does not prohibit the corporate employment of chiropractic, physical therapy, or massage therapy practitioners.

DECISION

Because neither statutes nor caselaw bars the corporate employment of chiropractic, physical therapy, or massage therapy practitioners, we reverse the decision of the district court and remand for further proceedings consistent with this opinion.

Reversed and remanded.


source: Caselaw Access Project

author: MEIERHENRY, Justice.

license: Public Domain

text:
    2004 SD 124
    NATIONAL FARMERS UNION PROPERTY AND CASUALTY COMPANY, Plaintiff and Appellant, v. FARM AND CITY INSURANCE COMPANY, Defendant and Appellee.
    Nos. 23192, 23199.
    Supreme Court of South Dakota.
    Argued Oct. 6, 2004.
    Decided Nov. 17, 2004.

      Roy A. Wise of Richardson, Wyly, Wise, Sauck & Hieb, Aberdeen, SD, for plaintiff and appellant.
    Melissa E. Neville of Bantz, Gosch & Cremer, Aberdeen, SD, for defendant and appellee.
   MEIERHENRY, Justice.

[¶ 1.] This is a case of first impression in South Dakota. National Farmers Union Property and Casualty Company [NFU] filed a declaratory judgment action requiring the trial court to determine the relative priority between an umbrella insurance policy and a primary insurance policy with an “other insurance” clause. The trial court determined the policies were mutually repugnant and each insurer was required to pay its pro rata share of the damages. We reverse.

FACTS

[¶ 2.] On January 16, 1999, Gene Fre-drickson [the driver] was involved in a serious motor vehicle accident while permissively driving a pickup owned by Larry Lorenzen. The accident was caused by the driver’s negligence. The six occupants in the other vehicle were injured, two of them seriously.

[¶ 3.] At the time of the accident, the driver was covered by a “Personal Auto Policy” issued by Farm & City Insurance Company. This policy provided liability limits of $25,000 per person and $50,000 per accident and covered the insured when permissively driving a non-owned vehicle. The owner of the vehicle was covered by two separate policies issued by NFU. The first was a “Private Passenger Automobile” policy with liability limits of $250,000 per person and $500,000 per occurrence. The second was a “Personal Umbrella Policy” which provided an additional $1,000,000 of liability coverage. The permissive driver was covered as an “additional insured” under both the NFU primary policy and the NFU umbrella policy.

[¶ 4.] The vehicle owner’s insurance company, NFU, settled the claims resulting from the accident for a total of $735,000. This was $235,000 in excess of the vehicle owner’s primary policy limit. NFU paid the settlement amount in full, and then brought a declaratory judgment action seeking reimbursement from Farm & City in the amount of $50,000, the limit of the driver’s Farm & City policy. Farm & City maintained that it was not liable because its policy was last in priority. In the alternative, Farm & City asserted that if it were liable, it would only be liable for its pro rata share of the excess settlement, which would be $11,186. Farm & City also asserted that because NFU settled on its own and paid the entire claim, NFU was a volunteer, thus eliminating its right to contribution. The trial court ruled NFU was not a volunteer. The court determined the policies were mutually repugnant and required Farm and City to pay its pro rata share of the excess settlement amount. Neither party was awarded costs or disbursements. NFU appeals.

STANDARD OF REVIEW

[¶ 5.] The evidence presented to the trial court consisted of contract documents and stipulated facts. Thus, “we confine our review to determining whether the circuit court correctly applied the law and properly interpreted the contracts.” Carstensen Contracting, Inc. v. Mid-Dakota Rural Water System, Inc., 2002 SD 136, ¶ 8 n. 2, 653 N.W.2d 875, 877. The circuit court’s conclusions of law are reviewed de novo. Parks v. Cooper, 2004 SD 27, ¶ 20, 676 N.W.2d 823, 829. Additionally, construction of an insurance contract is a question of law, reviewable de novo. Mahan v. Avera St. Luke’s, 2001 SD 9, ¶ 15, 621 N.W.2d 150, 154.

ISSUE

Whether the trial court erred in determining the insurance policies were mutually repugnant and ordering Farm & City to contribute its pro rata share of the settlement amount.

DECISION

Mutual Repugnance and Assignment of Pro Rata Liability

[¶ 6.] We have not previously decided the issue of priority between an umbrella insurance policy and a primary insurance policy with an “other insurance” clause. The parties do not dispute that the primary coverage insurance policy of the vehicle owner must be exhausted first. Thus, the first $500,000 of the settlement amount was paid under that policy. The dispute is over which policy must next be applied to the $235,000 of the settlement amount remaining.

[¶ 7.] The negligent driver had an auto policy with a $50,000 per accident limit, which would cover him in the event he caused injury as the permissive driver of another’s vehicle. However, the policy stated, “[A]ny insurance we provide for a vehicle you do not own shall be excess over any other collectible insurance.” (Emphasis added.) The owner of the vehicle had an umbrella policy with a $1,000,000 limit. His policy stated, “If a covered person has other collectible insurance that covers damages which this policy also covers, this policy shall be excess to and will not contribute with such other insurance. This does not include insurance bought to apply in excess of the retained limit plus the limit of liability of this policy.” (Emphasis added.) Each of the policies requires that other collectible insurance be exhausted before it will pay. We are being asked to decide how this apparent impasse should be resolved.

[¶ 8.] There are three possible resolutions to this problem. The first is to interpret the policies as requiring the umbrella policy to be exhausted before looking to the non-owner driver’s liability coverage. See Unigard Ins. Group v. Royal Globe Ins. Co., 100 Idaho 123, 594 P.2d 633 (1979). The second is to find the policies to be mutually repugnant and render each insurer liable for a pro rata share of the remaining damages owed. See Royal Indent. Co. v. Metro. Cas. Ins. Co. of N.Y., 80 S.D. 541, 128 N.W.2d 111 (1964) (applying pro rata liability where two primary liability policies were mutually repugnant). The third is to interpret the policies as requiring the non-owner’s liability policy to be exhausted before looking to the owner’s umbrella policy. See LeMars Mut. v. Farm & City Ins., 494 N.W.2d 216 (Iowa 1992). The parties agree that a majority of courts in this country follow the third approach and require the non-owner’s liability policy to be exhausted before looking to the umbrella policy. See Michael P. Sullivan, J.D., LL.M., Annotation, Automobile Insurance: Umbrella or Catastrophe Policy Automobile Liability Coverage As Affected By Primary Policy “Other Insurance” Clause, 67 A.L.R.4th 14 (1989). This Court hereby adopts the majority rule.

[¶ 9.] As a general rule, in a dispute over the relative priority of insurance policies, the language of the policies is determinative. See Am. Concept Ins. Co. v. Certain Underwriters at Lloyds of London, 467 N.W.2d 480, 482 (S.D.1991). The trial court determined the excess coverage provisions of the policies were mutually repugnant. The court then determined that both insurance companies were liable on a pro rata basis according to South Dakota caselaw. See Royal Indem. Co., 80 S.D. at 546-47, 128 N.W.2d at 113-14. Although a finding that the policies were mutually repugnant was not unreasonable, we look here to the policies and their purposes as a whole. “This court must construe all provisions of the policy together and ascertain the intention of the parties, if possible.” Helmbolt v. LeMars Mut. Ins. Co., Inc., 404 N.W.2d 55, 59 (S.D.1987). In doing so, we conclude that only the NFU umbrella policy is a true excess policy and is, therefore, last in priority of payment.

[¶ 10.] In arriving at this conclusion, we first examine the language of the excess insurance clauses of the respective policies. The clause in the NFU umbrella policy states as follows:

4. Other insurance.

If a covered person has other collectible insurance that covers damages which this policy also covers, this policy shall be excess to and will not contribute with such other insurance. This does not include insurance bought to apply in excess of the retained limit plus the limit of liability of this policy. (Emphasis added.)

The clause in the Farm & City policy states:

Other insurance

If there is other applicable liability insurance we will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide for a vehicle you do not oum shall be excess over any other collectible insurance. (Emphasis added.)

[¶ 11.] Farm & City points to the NFU umbrella policy language which excludes another policy “bought to apply in excess of the retained limit plus the limit of liability of this policy.” Farm & City argues that this clause requires the exhaustion of the limits of both NFU’s primary and umbrella policies before Farm & City would become liable. A closer look at the NFU umbrella policy does not support Farm & City’s premise. Clearly, the first part of the “Other Insurance” clause in the NFU umbrella policy makes it an excess policy when “a covered person has other collectible insurance that covers damages which this policy also covers.” The exception is when insurance is purchased “to apply in excess of the retained limit plus the limit of liability” of NFU’s umbrella policy. The applicable policy definition of “retained limit” is the limit of the “required underlying insurance” plus “any other insurance available to a covered person.” Consequently under NFU’s policy terms, Farm & City would only be last in priority if the policy were specifically purchased to apply over and above the underlying liability policy plus the umbrella policy. Farm & City is unable to show by contract language or otherwise that its primary coverage policy was purchased for the purpose of liability in excess of another’s primary and umbrella coverage. As stated by the Colorado Court of Appeals concerning a very similar provision, “the intent of the language of the proviso cannot accurately be divined without recognizing that there has been developed a tertiary level of liability insurance, sometimes referred to as ‘secondary excess coverage.’ ” Allstate Ins. Co. v. Frank B. Hall & Co. of California, 770 P.2d 1342, 1347 (Colo.Ct.App.1989) (citing Lumbermens Mut. Cas. Co. v. Allstate Ins. Co., 51 N.Y.2d 651, 435 N.Y.S.2d 953, 417 N.E.2d 66 (1980)). The Colorado court concludes that the exception proviso “refers to a third tier of insurance that treats the umbrella coverage as underlying insurance and specifically refers to that coverage.” Id.

[¶ 12.] The plain meaning of the NFU proviso in this case refers to this third tier of insurance. Unless some other insurance was purchased for the specific purpose of covering amounts in excess of the umbrella policy coverage, the umbrella policy is true excess coverage and “will not contribute with such other insurance.” Here the Farm & City personal auto policy was purchased by the driver to provide primary liability coverage and was only excess if another insurance covered the damage. The policy was not purchased as a secondary excess umbrella policy. Only the vehicle owner’s personal umbrella policy was intended to be a true excess insurance policy.

[¶ 13.] In addition to the contract language, the premiums paid for the policies also indicate which policy is the “umbrella or true excess insurance policy.” See Am. Concept Ins. Co., 467 N.W.2d at 483. Here, the $1,000,000 NFU umbrella policy premium was $211 annually while the $50,000 Farm & City auto policy premium was $108 for two months of coverage. In addressing this same issue, the Iowa Supreme Court ruled against Farm & City. See LeMars Mut. Ins. Co., 494 N.W.2d 216. The Iowa court analysis is instructive:

The “umbrella” nature of the LeMars Mutual policy is clear from the policy title, “Personal Excess and Catastrophe Liability Policy,” its terms which provide that liability coverage will be in excess in nearly all cases, and the premium paid. [Appellee’s insured] paid a yearly premium of only $120 for excess coverage of $1,000,000 over his primary coverage.
Appleman stated the majority rule on this issue: “[U]mbrella coverages, almost without dispute, are regarded as true excess over and above any type of primary coverage, excess provisions arising in regular policies in any manner, or escape clauses.” [8A Appleman Insurance Law and Practice § 4909.85, at 455 (1981).] We believe that resolution of the question of priority in payment must come, as the majority rule indicates, from a common sense look at the basic function each policy was intended to serve. Competing “other insurance clauses” in the Farm & City and LeMars Mutual policies, which normally would invoke contract construction rules, must yield to a finding of the insurance policies’ main functions.
We are further persuaded to find the umbrella policy the true excess insurer in this case by the great weight of authority so holding in other jurisdictions which have considered the question. See, e.g., Allstate, 770 P.2d [1342] at 1342; Illinois Emcasco Ins. Co. v. Continental Casualty Co., 139 Ill.App.3d 130, 93 Ill.Dec. 666, 487 N.E.2d 110 (1985); State Farm Fire & Casualty Co. v. Li Mauro, 65 N.Y.2d 369, 492 N.Y.S.2d 534, 482 N.E.2d 13 (1985); Safeco Ins. Co. v. Insurance Co. of North America, 522 S.W.2d 867 (Tenn.1975); see also Umbrella Policy-Other Insurance, 67 A.L.R.4th § 4 at 14.
The insuring intent of the LeMars Mutual umbrella insurance policy is to provide excess insurance in cases such as this. A primary insurance provider cannot hide behind an excess insurance clause in its “other insurance” provision to require an umbrella insurer to cover liability for its insured. We hold that Farm & City’s primary insurance policy must be exhausted before the umbrella policy of LeMars Mutual may be reached for payment of the settlement damages.

Id. at 219. The Eighth Circuit Federal Court of Appeals in addressing this issue stated the applicable rule succinctly: “[A]n insurer that issued a “true excess” or “umbrella” policy is not liable for any portion of the loss until the primary insurer’s policy limit has been exhausted, even if the primary policy contains an other-insurance clause.” National Sur. Corp. v. Ranger Ins. Co., 260 F.3d 881, 884 (8thCir.2001) (applying Iowa law).

[¶ 14.] The trial court erred in finding the policies mutually repugnant. Here, the “true excess” or “umbrella” policy is the NFU policy.

Volunteer

[¶ 15.] Farm & City argues that NFU should be precluded from seeking contribution because NFU’s payment of the full amount of the claim was voluntary. Farm & City cites American Reliable Ins. Co. v. St. Paul Fire & Marine Ins. Co., 79 S.D. 226, 110 N.W.2d 344, (1961), in support of this argument. The following is the explanation of the “volunteer” principle taken from that case:

It appears well settled that there is no right of contribution among insurers whose policies as in the instant case contain pro rata clauses limiting liability. ... [I]f each of several insurers contracts to pay such proportion of the loss to result from the destruction of the insured premises as the amount insured by such insurer bears to the whole insurance effected on the property, none of them has any right to contribution from the others, nor will the payment of the whole loss by any of them discharge the liability of the others, for in such a case the contracts are independent of each other ...[.]
... [I]n case of concurrent insurance an insurer paying more than its share of the loss for which all insurers are liable, may compel contribution. The reason for a different rule in case of pro rata or coinsurance is thus stated: But in the different policies concerned in this case there is no concurrent liability. Each insurer, by the distinct terms of his contract, makes himself liable for a certain and definite fractional part of the loss, to be calculated in the manner stipulated in the policies.

Id. at 230-231, 110 N.W.2d 344 (internal citations omitted). In the instant case, there is no pro rata provision in the NFU umbrella policy, thus the volunteer argument offered by Farm & City is inapplicable. In addition, the volunteer principle described above applies in cases of contribution. As explained below, the equitable reimbursement being sought here is actually subrogation, rather than contribution.

Equitable Contribution verses Equitable Subrogation

[¶ 16.] NFU has never denied that both its primary policy and umbrella policy covered this risk and that it would have to pay a significant portion of the damages, and NFU accepted this responsibility. The trial court’s declaratory judgment found that before NFU settled the claim, it put Farm & City on notice that it would be seeking contribution. Farm & City maintained that it was not liable because its policy was last in priority. Based on the stipulated facts of this case, the trial court ruled that the parties were only concurrently liable and applied the doctrine of equitable contribution as the ground for NFU’s reimbursement from Farm & City. However, this Court has found that Farm & City was primarily liable in relation to the NFU umbrella policy. “It is well settled that one secondarily liable, who is forced to pay because of the refusal, or failure after demand, of the one primarily liable to discharge the obligation, has the right of indemnity from the one primarily liable.” Maryland Cas. Co. v. American Family Ins. Group of Madison, Wis., 199 Kan. 373, 385, 429 P.2d 931, 941 (1967) (citing Aetna Cas. & Sur. Co. v. Buckeye Union Cas. Co., 157 Ohio St. 385, 392, 105 N.E.2d 568, 571-72). Consequently, equitable contribution is not the appropriate ground for relief under the circumstances of this case. However, since Farm & City was, in fact, primarily liable, the doctrine of equitable subrogation is the appropriate ground for reimbursement.

[¶ 17.] Equitable subrogation applies when “an insurer has paid the principal debtor’s obligation to the common underlying claimant, and thereafter succeeds to the claimant’s rights against the principal debtor.... This doctrine encompasses actions in which an excess insurer sues a primary insurer for reimbursement.” Progressive Ins. Co. v. Universal Cas. Co., 347 Ill.App.3d 10, 19, 282 Ill.Dec. 953, 961, 807 N.E.2d 577, 585 (2004) (citing T. Hamilton & T. Stark, Excess-Primary Insurer Obligations and the Rights of the Insured, 69 Def. Couns. J. 315, 318 (2002)); See also Church Mut. Ins. Co. v. Smith, 509 N.W.2d 274, 276-77 (S.D.1993) (discussing excess insurer’s recovery of attorney’s fees from primary insurer by subro-gation). Accordingly, NFU is entitled to recover under the equitable remedy of subrogation.

[¶ 18.] We hold that NFU is entitled to reimbursement in the amount of the Farm & City policy limits. Therefore, we reverse and remand for the trial court to enter a judgment in favor of NFU in the amount of $50,000 plus interest. In addition, as the prevailing party NFU is entitled to costs and disbursements under SDCL 15-17-37.

[¶ 19.] GILBERTSON, Chief Justice, and SABERS, KONENKAMP, and ZINTER, Justices, concur.

      . As a condition to issuing the umbrella policy, the insured was required to have certain amounts of underlying coverage.

      . Where courts have recognized equitable contribution between co-insurers they have required that the interests insured must be common to both insurers. See Great West Cas. Co. v. Canal Ins. Co., 901 F.2d 1525, 1527 (10thCir.1990); Am. States Ins. Co. v. Hartford Accident & Indem. Co., 218 Kan. 563, 571, 545 P.2d 399, 407 (1976). It is generally held that excess and primary insurers do not have the common interest required. See Cincinnati Ins. Co. v. River City Const. Co., 325 Ill.App.3d 267, 274, 258 Ill.Dec. 987, 993, 757 N.E.2d 676, 682 (2001) ("it is well established that excess insurers cannot seek equitable contribution from primary insurers").


author: CARTER, Justice.

text:
    SIERRA CLUB, Appellee, Hawkeye Fly Fishing Association, Intervenor-Appellee, v. WAYNE WEBER LLC, Appellant.
    No. 03-0654.
    Supreme Court of Iowa.
    Dec. 3, 2004.

      Eldon McAfee of Beving, Swanson & Forrest, P.C., Des Moines, for appellant.
    Wallace L. Taylor, Cedar Rapids, for appellee Sierra Club.
    Philip H. Dorff of Hopkins & Huebner, P.C., Des Moines, for intervenor-appellee Hawkeye Fly Fishing Association.
    Paul S. Swinton of Morain, Burlington & Pugh, P.L.C., West Des Moines, for ami-cus curiae Iowa Pork Producer’s Association.
    Christina L. Gruenhagen, West Des Moines, for amicus curiae Farm Bureau Federation.
   CARTER, Justice.

Wayne Weber LLC (Weber), a livestock producer, appeals from a decree enforcing a mediated settlement of a nuisance action and other claims seeking injunctive relief against the spreading of manure by Weber. The appellees are Sierra Club, the plaintiff in the nuisance action, and Hawk-eye Fly Fishing Association, an organization that intervened and joined in Sierra Club’s claims for relief. After reviewing the record and considering the arguments presented, we affirm the district court’s decree.

In early 1998, Weber contracted with Murphy of Iowa, Inc. (Murphy), a corporation that sold hogs to meatpackers. The contract contemplated that Weber would construct three confinement finishing buildings and accompanying manure storage structures on its land in Allamakee County to be used in the production of hogs owned by Murphy and Stoecker Farms, Inc.

The confinement facilities began operating in November 1998. Each confinement facility houses 1100 head of finishing hogs. Manure storage facilities are adjacent to the confinement buildings. The manure in these structures has been applied to croplands near the confinement facilities after the crops have been harvested. The fields where the manure has been applied are in the watershed of French Creek. French Creek is a popular trout stream managed by the Iowa Department of Natural Resources (DNR).

Weber consulted with DNR with respect to construction of these confinement facilities. DNR concluded that Weber did not need to obtain a National Pollutant Discharge Elimination System (NPDES) permit for the project because the facilities were designed so as to never discharge manure.

In September 1999, Sierra Club and persons who own property near Weber’s hog confinement facilities filed an action against Weber, Murphy, and Stoecker Farms, asserting common-law and statutory nuisance claims, violation of the public-trust doctrine, trespass, and negligence. An additional claim in the nature of a citizens’ action was asserted pursuant to Iowa Code section 455B.111 (1999). In June 2000, Hawkeye Fly Fishing Association intervened in the action and joined in Sierra Club’s claims. In addition to the claims we have described, Sierra Club and the intervenor urged the court to determine that the DNR acted improperly in failing to require an NPDES permit for these facilities.

Weber filed a motion for summary judgment with respect to the permit issue, and the motion was granted by the district court. Trial of the other issues was set to commence on July 9, 2002. Approximately three weeks prior thereto the parties participated in mediation. At the conclusion of the mediation, the parties acknowledged their agreement to a resolution of the issues and dictated their understanding of that agreement as part of a tape-recorded record.

The parties of the present appeal agree that the substance of their mediated agreement was to be incorporated in a consent decree. In an effort to carry out that understanding, Sierra Club and the intervenor presented a proposed decree. Weber then submitted a contrasting decree that interpreted the settlement agreement differently. Sierra Club and the in-tervenor then filed a motion requesting that the court adopt their version of the settlement agreement. After receiving evidence concerning the proposed buffer areas, the district court concluded that the decree proposed by Sierra Club and the intervenor represented the agreement of the parties and entered a decree corresponding with that which they proposed.

The provisions of the decree to which Weber objects in whole or in part are as follows:

1. No waste from the hog confinement operation at issue in this case, or from any other source, will be applied to the parcel of land in section 24 of the French Creek Township, Allamakee County, designated as Parcel No. 2 on the map attached to this Decree, from and after the date this Decree is entered.
2. The aforementioned Parcel No. 2 may continue to be planted in row crops, but Weber shall install a buffer strip 200 feet in width along the south and west sides of the parcel. The buffer strip on the west side of Parcel No. 2 shall be installed where Parcel No. 2 drains to the west onto the adjacent property. This buffer strip shall contain prairie grasses that are deep-rooted and will maximize soil retention and water infiltration, and will be installed and managed for the primary purpose of protecting French Creek from runoff and soil erosion from parcel No. 2.
In lieu of installing 200-foot wide prairie grass buffers, Weber may at his discretion, plant the 100-foot portion of the buffer strips adjacent to the crop fields in bromegrass, which is not a prairie grass, with the remaining 100 feet closest to French Creek planted in a deep-rooted warm-season prairie grass. Weber will be allowed to hay the brome-grass area as long as a minimum height of 6 inches is maintained. No livestock grazing will be conducted on this buffer strip. Implementation and management practices recommended by NRCS will be followed to install the buffers, to keep the bromegrass from encroaching into the prairie grass portion of the buffer strip, and to ensure the quality and integrity of the buffer strips.
No waste will be applied to the buffer strips.
3. Waste from the aforementioned hog confinement operation may continue to be applied to the parcels of land in sections 13 and 18 of French Creek Township designated as Parcel No. 1 on the map attached to this Decree.
4. The aforementioned Parcel No. 1 may continue to be planted in row crops, but Weber shall install a buffer strip 200 feet in width on the north and west boundaries of Parcel No. 1, as noted on the map attached to this Decree. The total 200 feet of buffer may include any grass areas located on land adjacent to the areas of Parcel No. 1 required to have a buffer strip. This buffer strip shall consist of prairie grasses that are deep-rooted and will maximize soil retention and water infiltration, and will be installed and managed for the primary purpose of protecting French Creek from runoff and soil erosion from Parcel No. 1.
In lieu of installing 200-foot wide prairie grass buffers, Weber may at his discretion plant the 100-foot portion of the buffer strips adjacent to the crop fields in bromegrass, which is not a prairie grass, with the remaining 100 feet planted in a deep-rooted warm-season prairie grass. Weber will be allowed to hay the bromegrass area as long as a minimum height of 6 inches is maintained. Livestock grazing, using established good management practices (rotational grazing or flash grazing) as recommended by NRCS may be conducted on the bromegrass strips, and proper fence will be installed and maintained to keep livestock out of the prairie grass areas. Implementation and management practices recommended by NRCS will be followed to install the buffers, to keep the bromegrass from encroaching into the prairie grass portion of the buffer strips, and to ensure the quality and integrity of the buffer strips.
No waste will be applied to the buffer strips.
6. Weber will not apply waste from the aforementioned hog confinement operation, or from any other source, to any other or additional parcels of land that are west of the aforementioned parcels 1 and 2. It is anticipated by the court that any such further or additional parcels would be outside the French Creek watershed, with the exception of a location immediately to the east of Parcel No. 1.

The map to which reference is made in the decree is shown below.

Although the district court refers to its decree as a consent decree, it was clearly not such. It was a decree resolving a dispute concerning the terms of the settlement agreement. Weber argues that it did not agree to several of the restrictions contained in the court’s decree. It contends it did not agree that the cover to be planted on the 200-foot buffer strips could not be bromegrass or that it could not harvest hay from the buffer areas nor graze livestock thereon. Weber also asserts that it did not agree to refrain from applying manure on the buffer strips required for parcel 1 or not to apply manure from other sources in the areas prohibited by the decree. Finally, Weber disputes the provisions relating to locating a portion of the buffer area on land adjacent to the areas required to have a buffer strip. We will separately discuss each of these contentions. Other facts of importance will be provided in our discussion of the legal issues presented on the appeal.

I. Scope of Review.

This is an action to interpret and enforce by way of prospective injunctive relief an oral agreement dictated into the record of the mediation proceeding and, as such, is an ordinary action to be reviewed for errors at law. Iowa Code § 611.3 (2001); Iowa R.App. P. 6.4.

II. Standards for Interpreting Settlement Agreements.

Settlement agreements are essentially contracts, and general principles of contract law apply to their creation and interpretation. City of Dubuque v. Iowa Trust, 587 N.W.2d 216, 221 (Iowa 1998); Fees v. Mut. Fire & Auto. Ins. Co., 490 N.W.2d 55, 58 (Iowa 1992). The intent of the parties controls the interpretation issues. Magina v. Bartlett, 582 N.W.2d 159, 163 (Iowa 1998). In order to be bound, the contracting parties must manifest their mutual assent to the terms sought to be enforced. Kristerin Dev. Co. v. Granson Inv., 394 N.W.2d 325, 331 (Iowa 1986).

III.Weber’s Arguments.

The district court’s decree mandates that the buffer strips on both parcel 1 and parcel 2 shall contain prairie grasses that are deep-rooted with the alternative that Weber, at its discretion, may choose to only plant prairie grass on that half of the buffer strips closest to French Creek and plant bromegrass on the half of the buffer strips adjacent to his crop fields. Weber contends that it did not agree that bromegrass could not be utilized on the entire portion of both buffer strips. That practice, it urges, would constitute an acceptable conservation practice sufficient to satisfy the purposes of the mediated settlement agreement. When Weber objected to the proposed requirement for deep-rooted prairie grass cover for the buffer areas in the district court, that court received evidence concerning the relative conservation advantages of prairie grass over bro-megrass. This data supports a finding that prairie grass is clearly preferable to bromegrass for the purposes of preventing runoff and erosion. It also established that bromegrass is not a type of prairie grass. The parties’ agreement, as it was tape-recorded at the conclusion of the mediation session, expressly provided that a “form of plant that is deep rooted of a prairie variety which will maximize soil retention and water infiltration” must be employed. We are convinced that the district court’s action in requiring the use of prairie grass was consistent with the agreement of the parties.

The provisions in paragraphs 2 and 4 that authorize Weber at its discretion to plant bromegrass on that half of the buffer strips farthest removed from French Creek was inserted in the decree as the result of Sierra Club and the inter-venor having proposed that disposition as an offer of compromise. Because Weber did not agree to this proposed compromise, the district court’s inclusion of the partial bromegrass alternative in the decree seems to have treated Weber more favorably than it was entitled to be treated under the terms of the agreement that specifically called for prairie grass. However, because Sierra Club and the inter-venor have not challenged the half bro-megrass alternative, that provision of the decree will stand.

Weber next argues that it did not agree to restrictions on harvesting forage from the buffer strips or restrictions against spreading manure thereon. In examining the record made with respect to whether bromegrass should have been allowed for the cover of the buffer areas, it appears that Weber’s argument in the district court with respect to harvesting hay was directed entirely to the proposition that he should be permitted to plant the entire portion of both buffer areas in, bro-megrass. The record indicated that the deep-rooted prairie grasses required by the decree would not be suitable for forage in any event. If Weber elects the one-half bromegrass alternative, it is permitted to harvest the bromegrass from the buffer strips subject to the six-inch limitation provided in the decree. There is no express provision in the decree prohibiting it from cutting the prairie grass, but given the terms of the agreement, this may not be done if it disturbs the effectiveness of the buffer strip for purposes of preventing runoff and erosion. This is consistent with the parties’ agreement.

Although there is no express mention in the tape-recorded memorialization of the mediated agreement of a prohibition against the spreading of manure on the buffer strip required for parcel 1, to allow this to occur would clearly contravene the manifest purpose of requiring a buffer strip between areas where manure will be spread and the French Creek watershed. We believe such a prohibition is to be inferred from the context of the agreement and was properly included in the court’s decree. The Restatement (Second) of Contracts speaks to this matter as follows:

[T]he actions of the parties may show conclusively that they have intended to conclude a binding agreement, even though one or more terms are missing or are left to be agreed upon. In such cases courts endeavor, if possible, to attach a sufficiently definite meaning to the bargain.
An offer which appears to be indefinite may be given precision by usage of trade or by course of dealing between the parties. Terms may be supplied by factual implication, and in recurring situations the law often supplies a term in the absence of agreement to the contrary.

Restatement (Second) of Contracts § 33 cmt. a (1979). We believe this principle supports the district court’s action in prohibiting the spreading of manure on the buffer area required for parcel 1 and, in addition, supports the restrictions against grazing on the buffer strips.

Weber contends that it only agreed that manure from the confinement facilities subject to the litigation could not be spread in the prohibited areas and that the agreement was not intended to preclude the spreading of manure from other sources. We agree with the district court that to allow this to happen would be completely inconsistent with the purpose of the settlement agreement. Moreover, the tape-recorded memorialization of the agreement provides “there will be no manure spread except to those areas east of section 24 and the home place.” We are unable to interpret this language as only referring to manure from the facilities involved in the litigation.

As a final matter, Weber argues that the provision in paragraph 4 of the decree, which provides that “the total 200 feet of buffer may include any grass areas located on land adjacent to the areas of Parcel No. 1 required to have a buffer strip” unduly seeks to burden land owned by persons who are not parties to the agreement. This provision in the decree provides an opportunity for Weber to maximize its tillable acres by placing the buffer strips on adjacent land. Of course, this may only be accomplished with the consent of those who own the adjacent property. Those owners will only be burdened if they agree to the conditions that must be maintained for the buffer strips. If they do not agree, the strips must be placed on Weber’s property.

IV. Appeal by Sierra Club and Inter-venor.

Sierra Club and the intervenor attempt to appeal from the district court’s grant of partial summary judgment rejecting their claim that Weber was required to have an NPDES permit. Any opportunity to now challenge that ruling is foreclosed by the terms of the proposed decree proffered to the court by Sierra Club and the intervenor and ultimately incorporated in the court’s final judgment. Those terms included the following:

Upon the entry of this Decree by the court, this Decree shall constitute a complete and final settlement of all claims which were asserted, or could have been asserted, by Sierra Club and Hawkeye Fly Fishing Association against the Defendants in this case.

This unambiguous language applies to all claims in the litigation, including the claim involving the need for Weber to obtain an NPDES permit.

We have considered all issues presented and conclude that the district court’s decree should be affirmed in all respects.

AFFIRMED.

All justices concur except LARSON, J., who takes no part.

      . Neither the individual plaintiffs nor Murphy and Stoecker Farms, Inc. are parties to this appeal.

      . The tape-recorded agreement was as follows:
      [Intervenor’s Counsel]: The ’ settlement reached today will be consummated by virtue of a written agreement, but the purpose of this dictation is to temporarily memorialize those terms. The parcel referred to as 24 in the French Creek water shed, Mr. Weber and Prestige Stecker have agreed will not be used for spreading manure. It will continue to be row cropped. However, there will be a 200 foot buffer of a grass or some other form of plant that is deep rooted of a prairie variety which will maximize soil retention and water infiltration. Those buffers will be located on the south side of Parcel 24 and on the west side of Parcel 24. With respect to the property that we have referred to as the home place, that is the homestead of Mr. and Mrs. Weber, the agreement that was reached is that there will be a 200 foot buffer strip of plant material as previously identified planted on the, it is difficult to describe, but on Exhibit 1 we have outlined the area on which that will be planted.
      [Weber’s Counsel]: That may also be referred, on the previous description of the 200 foot buffer on the Section 24 parcel, that that is also shown on Exhibit 1.
      [Intervenor’s Counsel]: That is correct. Both of the buffers are referred to on Parcel 24 on Exhibit 1. It appears from the topographical map of the French Creek water shed that any further spreading of manure will occur outside of the French Creek water shed with the exception of a piece of property located immediately to the east of the homestead property of Mr. and Mrs. Weber. Counsel for the Webers has indicated that there will be no (recording interrupted)
      [Intervenor’s Counsel]: Prior to the interruption we were discussing an area of land immediately to the east of the Weber homestead where manure will be applied to make up for the manure that will not be applied on Parcel 24. Counsel for the Web-ers has indicated that under no circumstances would manure be spread on fields situated closer to French Creek than the homestead area of the Webers. Is that the correct statement, Eldon?
      [Weber’s Counsel]: Yes, I believe so.
      [Weber's Counsel]: Is that correct?
      Wayne Weber: I am kind of lost. What is meant by the homestead?
      [Weber’s Counsel]: The property where you live. No manure application will occur closer to the property, to the French Creek, than the property where you live right now. Wayne Weber: I am kind of confused.
      [Intervenor's Counsel]: We are back on the record after a brief discussion concerning the issue of spreading of manure in fields located in the French Creek water shed. The parties I believe have agreed now that there will be no manure spread except to those areas east of Section 24 and the home place in Allamakee county. Further, the terms and provisions of the settlement will be converted into a consent decree as quickly as possible. I should also mention on behalf of HFFA that the settlement we have agreed here to today is contingent upon the approval of the Board of Directors of Hawkeye Fly Fishing Association. With that I will turn it over to other counsel.
      Counsel for all other parties ratified the agreement, as did their principals upon the submission and review of same.

      . This is the location designated in paragraph 3 of the decree as "the parcels of land in sections 13 and 18."


author: VOGEL, P.J.

text:
    In re the DETENTION OF Meredith SEEWALKER, Meredith Seewalker, Appellant.
    No. 03-0764.
    Court of Appeals of Iowa.
    July 14, 2004.

      Mark Smith, First Assistant Public Defender, and Steven L. Addington, Assistant Public Defender, for appellant.
    Thomas J. Miller, Attorney General, and Roxanne M. Ryan and Denise Timmins, Assistant Attorneys General, for appellee.
    Heard by VOGEL, P.J., and HECHT and VAITHESWARAN, JJ.
   VOGEL, P.J.

Meredith Seewalker appeals his civil commitment, pursuant to Iowa Code chapter 229A (2003), contending the district court erred in refusing to instruct the jury that he is presumed to not be a sexually violent predator. Finding no error in the court’s refusal, we affirm.

Background Facts and Proceedings.

Meredith Seewalker was born in 1976 and has a history of sex offending. His first offenses occurred when he was seventeen years old. In 1994 he was convicted of two counts of lascivious acts with a child for incidents involving a thirteen-year-old girl and her six-year-old sister. After being waived to adult court, he pled guilty to the charges and received probation. That probation was revoked in 1995 when he committed another act against an eleven-year-old girl. Based on this act, Seewalker entered a guilty plea to third-degree sexual assault and was sentenced to an indeterminate term of incarceration, not to exceed ten years.

On December 2, 2002, prior to his release from prison, the State filed a petition alleging Seewalker to be a sexually violent predator under Iowa Code chapter 229A. The district court determined there was probable cause for the matter to proceed to trial and ordered Seewalker be held pending trial. In March 2003 a jury trial was held, at which time Seewalker requested the court instruct the jury that he be presumed to not be a sexually violent predator. The court rejected his proposed instruction. The jury then entered a verdict finding Seewalker to be a sexually violent predator. Seewalker appeals, claiming error in the court’s refusal to give the jury the proposed instruction.

Scope of Review.

Trial court determinations regarding jury instructions are reviewed on appeal for errors of law. Iowa R.App. P. 6.4; State v. Breitbach, 488 N.W.2d 444, 449 (Iowa 1992). The scope of review of constitutional issues is de novo. In re Detention of Garren, 620 N.W.2d 275, 278 (Iowa 2000).

Jury Instruction.

Iowa Code section 229A.7(4) states, in pertinent part, that “[a]t trial, the ... jury shall determine whether, beyond a reasonable doubt, the respondent is a sexually violent predator.” Seewalker believes this enhanced burden expressed in the beyond-a-reasonable-doubt language carries along with it a presumption of non-predator, similar to the presumption of innocence in a criminal setting. In passing, he also asserts without any discussion “the due process clause of the Fifth Amendment still applies, and Respondent is entitled to a presumption that he is not a sexually violent predator.” Seewalker primarily rests his argument for the necessity of including the presumption instruction on a public policy rationale commented on in Taylor v. Kentucky, 436 U.S. 478, 98 S.Ct. 1930, 56 L.Ed.2d 468 (1978). He believes that inclusion of the instruction would have the effect of directing the mindset of jurors and would guide them to not base their decision on the present situation of the accused, but rather strictly on the evidence. See id. at 484-85, 98 S.Ct. at 1934, 56 L.Ed.2d at 474-75, (citing 9 J. Wigmore, Evidence § 2511 (3d ed.1940)).

The right to a fair trial is a fundamental liberty interest secured by the Fourteenth Amendment. Drope v. Missouri, 420 U.S. 162, 172, 95 S.Ct. 896, 904, 43 L.Ed.2d 103, 113 (1975). As long as a requested instruction correctly states the law, has application to the case, and is not stated elsewhere in the instructions, the court must give the requested instruction. Adam v. T.I.P. Rural Elec. Coop., 271 N.W.2d 896, 901 (Iowa 1978). However, error in giving or refusing a jury instruction does not merit reversal unless it results in prejudice to the defendant. See State v. Kellogg, 542 N.W.2d 514, 516 (Iowa 1996).

Following the trial, Seewalker proposed the following jury instruction:

Meredith J. Seewalker is presumed to not be a sexually violent predator. The presumption requires you to put aside all suspicion, which might arise from the present situation of the Respondent. This presumption that he is not a sexually violent predator remains with the Respondent throughout the trial unless the evidence proves beyond a reasonable doubt that he is a sexually violent predator.

We first note that such a presumption-of-non-predator instruction is not statutorily required. Moreover, we find it significant that a commitment proceeding under Iowa’s sexually violent predator law, Iowa Code chapter 229A, is civil in nature. Garren, 620 N.W.2d at 280. The inference to be drawn from this fact is that civil commitment proceedings, thus, do not implicate the full panoply of protective constitutional rights as are present in criminal proceedings. See Allen v. Illinois, 478 U.S. 364, 375, 106 S.Ct. 2988, 2995, 92 L.Ed.2d 296, 308 (1986). In Allen v. Illinois, the United States Supreme Court addressed whether an individual who had been civilly committed as a “sexually dangerous person” was entitled to the Fifth Amendment’s guarantee against compulsory self-incrimination. Id. at 364, 106 S.Ct. at 2989, 92 L.Ed.2d at 302. The court held that he was not. Id. at 375, 106 S.Ct. at 2995, 92 L.Ed.2d at 308. It reasoned that because the civil commitment proceedings were not “criminal” within the meaning of the Fifth Amendment, due process “does not independently require application of the privilege” against self-incrimination. Id.

Likewise, in this case we conclude See-walker was not entitled to a “presumption-of-non-predator” instruction. While we agree the beyond-a-reasonable-doubt standard is a stringent one and likely adopted by the legislature in recognition of the possibility of the loss of liberty for an individual found to be a sexually violent predator, see In re Detention of Williams, 628 N.W.2d 447, 455, (Iowa 2001) (“Although the statute is civil in nature, the liberty interests at stake prompted the legislature to impose a higher burden of proof on the State.”), the concept “presumption of innocence” is clearly drawn from the criminal sphere and simply has no applicability to this type of case. We also find it noteworthy that the presumption-of-innocence instruction is not necessarily even constitutionally mandated in a criminal action. See Kentucky v. Whorton, 441 U.S. 786, 789, 99 S.Ct. 2088, 2090, 60 L.Ed.2d 640, 643 (1979). Based on guidance found in Taylor v. Kentucky, 436 U.S. 478, 98 S.Ct. 1930, 56 L.Ed.2d 468, the Supreme Court stated in Whorton:

[t]he failure to give a requested instruction on the presumption of innocence does not in and of itself violate the Constitution. Rather, under Taylor, such a failure must be evaluated in light of the totality of the circumstances — including all the instructions to the jury, the arguments of counsel, whether the weight of the evidence was overwhelming, and other relevant factors — to determine whether the defendant received a constitutionally fair trial.

441 U.S. at 789, 99 S.Ct. at 2090, 60 L.Ed.2d at 643.

Furthermore, we find persuasive the State’s contention that the civil commitment proceedings of chapter 229A are unlike criminal matters in other respects, and as such, do not require the added protections afforded by a presumption-of-non-predator instruction. For instance, a person committed under chapter 229A is entitled to an annual review, see Iowa Code § 229A.8(2), in which he or she has the right to demonstrate success with the treatment program. See id. § 229A.8 (rebutting the presumption that commitment should continue when “a committed person no longer suffers from a mental abnormality which makes the person likely to engage in predatory acts constituting sexually violent offenses if discharged, or the committed person is suitable for placement in a transitional release program.”). Thus, as the State notes, unlike an incarcerated criminal, the committed person holds the key to his or her own freedom.

Regardless, we conclude the instructions actually given by the court adequately conveyed the message to the jury regarding the State’s enhanced burden of proof in this civil commitment proceeding. The district court instructed the jury no less than three times of the State’s burden to prove Seewalker was, beyond a reasonable doubt, a sexually violent predator. In light of these instructions, we believe there could have been no confusion as to the State’s burden of proof in this matter. The instructions were clear and unambiguous: the State held the burden of proof on every element of its claim and that proof was to be established beyond a reasonable doubt. Compare Taylor v. Kentucky, 436 U.S. at 486, 98 S.Ct. at 1935, 56 L.Ed.2d at 476 (holding that, in light of its rather “Spartan instructions” on the burden of proof together with other circumstances potentially prejudicial to the defendant, the trial court’s failure to instruct on the presumption of innocence violated the petitioner’s rights under the Due Process Clause of the Fourteenth Amendment).

Accordingly, we conclude Seewalker, in a civil commitment proceeding, possessed neither a constitutionally nor a statutorily protected right to have the jury instructed that he was presumed to not be a sexually violent predator. The absence of the instruction did not prejudice Seewalker nor deny him a fair trial. The district court thus did not err in refusing his requested instruction.

AFFIRMED.

      . We do note, however, that although these proceedings are civil in nature some rights afforded defendants in criminal prosecutions are also granted to respondents in civil commitment cases. See generally Iowa Code § 229A.5 (the right to a preliminary hearing to determine whether probable cause exists to proceed to trial); Iowa Code § 229A.6(1) (the right to assistance of counsel); Iowa Code § 229A.7(2) (the right to a speedy trial); Iowa Code § 229A.7(3) (the right to a jury trial); Iowa Code § 229A.7(4) (burden of proof on State beyond a reasonable doubt); Iowa Code § 229A.7(4) (right to a unanimous jury verdict).


author: ANDERSON, RUSSELL A., Justice.

text:
    David DYRDAL, Appellant, v. GOLDEN NUGGETS, INC., Respondent, Ron Micke, et al., Respondents.
    No. A03-214.
    Supreme Court of Minnesota.
    Dec. 16, 2004.

      Garth Gerald Gavenda, Christopher Kent Wachtler, Collins Buckley Sauntry & Haugh, P.L.L.P., St. Paul, MN, for Appellant David Dyrdal.
    Boris Parker, Patrick Michael Anderson, Floyd E. Siefferman, Jr., Saliterman & Siefferman, P.C., Minneapolis, MN, for Respondent Golden Nuggets, Inc.
    Delray Lynn Sparby, Thief River Falls, MN, for Respondent Ron Micke, et al.
   OPINION

ANDERSON, RUSSELL A., Justice.

In this case we affirm summary judgment dismissing a lessee’s claim that he did not receive notice of sale sufficient to exercise a contractual right of first refusal to purchase the land he was leasing. We hold that when, as in this case, the lease provides the lessee with right of first refusal but is otherwise silent regarding the right, the lessor need only provide reasonable notice of the essential terms of an offer of sale to trigger the lessee’s obligation to timely exercise his right of first refusal. We acknowledge that upon receiving notice of sale, the lessee may need to clarify or investigate uncertainties or ambiguities in essential sale terms before exercising the lessee’s first refusal right, but we also hold that such inquiry, and lessor’s response thereto, must be reasonable, timely and in good faith.

In 1988, appellant David Dyrdal (Dyr-dal) began leasing 630 acres of land in the Red River Valley from respondent Golden Nuggets, Inc. (Golden Nuggets). In 1999, Golden Nuggets’ farm manager, who was also its real estate agent, renegotiated the lease with Donovan Dyrdal (Donovan), Dyrdal’s brother. Donovan had power of attorney for Dyrdal and acted in Dyrdal’s behalf throughout this matter. Prior leases gave Dyrdal 45 days from offer of sale to accept or reject the offer but the 1999 lease provided only that Dyrdal “has first right of refusal to purchase land if it were to be sold.”

In early August 2001, Golden Nuggets’ farm manager orally notified Dyrdal of an offer to purchase the land. By letter of August 8, 2001, Golden Nuggets’ attorney in Nebraska notified Dyrdal that his right of first refusal had terminated on August 6 at 8:15 a.m. and that Golden Nuggets had a buyer who would pay $252,000. Dyrdal replied by letter of August 15, asserting that he had 45 days to exercise his right, relying apparently upon the terms of the prior lease. On August 16, Golden Nuggets’ Nebraska attorney responded by fax to Dyrdal’s letter, indicating that he was enclosing copies of a purchase agreement, and stating, “I find nothing in the present lease giving you 45 days to exercise your option of right of first refusal. The written lease controls the terms * * Dyr-dal replied on August 16, indicating that he had received faxed transmissions that were not legible and requesting legible copies of the transmissions. Dyrdal wrote, “Upon receipt of that information the 45 days I have to exercise my rights will commence.”

It appears from the record that on August 13, 2001 Dyrdal received by fax transmission a partially illegible copy of a purchase agreement dated August 9, 2001, providing for sale of the land by Golden Nuggets to respondent Micke Pokel Farms. Although partially illegible, the faxed copy of the agreement clearly provides for a $265,000 cash sale.

On August 21, Dyrdal received a fully typed but unsigned version of the August 9 purchase agreement. When compared with the partially illegible copy received earlier, the unsigned typed version discloses the identical standard form agreement and identical agreement terms. Both versions clearly indicate a sale price of $265,000, a down payment of $15,000, and a closing date on or before February 5, 2002. During the months that followed, Dyrdal made no attempt to exercise his right of first refusal and had no further communications with Golden Nuggets until, by complaint dated December 19, 2001, Dyrdal sued Golden Nuggets and Micke Pokel Farms and one of its general partners, Ron Micke, for breach of the lease. Dyrdal alleged that the land was not “farmable” because Golden Nuggets had failed to repair damage to ditch walls and embankments. Dyrdal also alleged that he had been denied the right of first refusal to purchase the land. Dyrdal filed a notice of lis pendens with the Marshall County Recorder. Golden Nuggets denied the allegations and counterclaimed, alleging that Dyrdal had disrupted the pending sale by filing the notice of lis pendens and that the disruption would result in loss of a “ § 1031 exchange” tax benefit.

Golden Nuggets and Micke Pokel Farms filed motions for summary judgment dismissing Dyrdal’s complaint. At a prehear-ing conference on the motions, the district court denied Dyrdal’s discovery request for information about other land purchases or attempted land purchases by Micke Pokel Farms. Dyrdal asserted, without factual support, that Micke Pokel Farms had conspired to buy other lands that Dyr-dal or his family owned or were farming. The district court subsequently granted the motions for summary judgment dismissing Dyrdal’s complaint. The court concluded Golden Nuggets had no duty under the lease to provide “farmable” land, and that Dyrdal had been afforded his right of first refusal but had failed to exercise it. Concluding that Dyrdal had initiated the lawsuit in bad faith based only upon “suspicions” and “personal opinion,” the district court awarded costs, fees and attorney fees to Golden Nuggets and Micke Pokel Farms. The court of appeals reversed the award of bad faith attorney fees but otherwise affirmed the district court, also concluding that Dyrdal had been afforded this right of first refusal but had failed to exercise it. Dyrdal v. Golden Nuggets, Inc., 672 N.W.2d 578, 586, 589 (Minn.App.2003). We received cross-petitions for review but granted only Dyrdal’s petition seeking review of summary judgment dismissing his claim that he was denied right of first refusal. We affirm.

I.

On appeal from summary judgment, we consider whether there are genuine issues of material fact, and whether either party is entitled to judgment as a matter of law. Christensen v. Milbank Ins. Co., 658 N.W.2d 580, 584 (Minn.2003). The party opposing summary judgment may not establish genuine issues of material fact by relying upon unverified and con-elusory allegations, or postulated evidence that might be developed at trial, or metaphysical doubt about the facts. See Funchess v. Cecil Newman Corp., 632 N.W.2d 666, 672 (Minn.2001); DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn.1997).

Gemdne issues of material fact

We turn to the question of whether there are genuine issues of material fact that preclude summary judgment. Under power of attorney from Dyrdal, his brother, Donovan, negotiated and signed the 1999 lease and also acted on Dyrdal’s behalf throughout this matter. Donovan admitted at his deposition that he knew from copies of the purchase agreements he received in August 2001 that the sale price for the land was $265,000, that the down payment was $15,000, and that closing was to be on or before February 5, 2002. The only term that he did not understand in the purchase agreement concerned the land exchange. Yet, in the district court and the court of appeals, and now in this court, Dyrdal claims that there are genuine issues of material fact regarding the terms of the purchase agreement. He claims that Golden Nuggets agreed orally to sell the land to him before agreeing to sell the land to Micke Pokel Farms. Golden Nuggets denies that there was such an agreement and, in any event, an oral agreement to sell land is not enforceable under the statute of frauds. See Minn. Stat. § 513.05 (2002). Dyrdal next claims that he “heard” of a “land exchange” that might have altered the sale terms in the purchase agreement, but he made no inquiry concerning a “land exchange.” The “land exchange” would not affect sale terms, however, because it concerned a “1031 land exchange” allowing Golden Nuggets to reinvest sale proceeds to avoid capital gains tax. See 26 U.S.C. 1031 (2000).

Dyrdal also claims that he was misinformed as to the sale price when Golden Nuggets’ attorney first wrote advising him of a sale price of $252,000; yet, as already noted, his brother, Donovan, who acted for him with power of attorney throughout this transaction, admitted that he knew in August 2001 that the sale price for the land was $265,000, that the down payment was $15,000, and that closing was to occur on or before February 5, 2002. Dyrdal also asserts that he had doubts concerning terms of the sale because Golden Nuggets’ farm manager and real estate agent had a history of engaging in “questionable business practices.” Such general and con-clusory allegations fail to raise fact issues that would defeat summary judgment in this ease. See Funchess, 632 N.W.2d at 672. Finally, Dyrdal’s reliance upon “general comments around town” that the sale was proceeding on terms other than those stated in the purchase agreement is but metaphysical doubt that will not defeat summary judgment. See DLH, Inc., 566 N.W.2d at 71. We conclude that Dyrdal has failed to establish genuine issues of material fact concerning the essential terms of the purchase agreement. Dyrdal received a legible copy of the purchase agreement by August 21, 2001, and he made no inquiry regarding the sale terms during the 45 days that he insists he had to exercise his first refusal right.

Discovery violation

Dyrdal also argues that the district court abused its discretion when it denied his discovery request for information about other land purchases or attempted land purchases by Micke Pokel Farms. Dyrdal asserts, without factual support, that Micke Pokel Farms was conspiring to buy other land that he or his family owned or were farming. We conclude that the district court did not abuse its discretion when it denied Dyrdal’s discovery request and agree with the district court that the discovery of other land purchases or attempted land purchases by Micke Pokel Farms is not relevant to this case, nor would it lead to the discovery of admissible evidence regarding this case. See Shetka v. Kueppers, Kueppers, Von Feldt & Salmen, 454 N.W.2d 916, 919 (Minn.1990) (“information subject to discovery must, at least, be likely to lead to relevant admissible evidence”); Erickson v. MacArthur, 414 N.W.2d 406, 407 (Minn.1987) (stating that absent a clear abuse of discretion, a district court’s decision regarding discovery requests in civil actions will not be reversed on appeal).

II.

We turn next to the question of whether Golden Nuggets and Micke Pokel Farms are entitled to summary judgment as a matter of law. We have long recognized the right of parties to freely contract, and will enforce legal rights according to contract terms. See Rose Revocable Trust v. Eppich, 640 N.W.2d 601, 610 (Minn.2002); James Quirk Milling Co. v. Minneapolis & St. Louis R. Co., 98 Minn. 22, 23, 107 N.W. 742, 742 (1906). Here, the lease clearly provided Dyrdal with the right of first refusal to purchase the land if it were sold, but the lease contained no provision regarding notice of sale by the lessor nor any provision for response to such notice by the lessee.

The right of first refusal is not an option to purchase but it “limits the right of the owner to dispose freely of its property by compelling the owner to offer it first to the party who has the first right to buy.” 25 Richard A. Lord, Williston on Contracts § 67:85 (4th ed.2002). The right ripens into an option when the owner receives a bona fide third party offer and notifies the holder of the right. Id.; Parkr-Lake Car Wash, Inc. v. Springer, 352 N.W.2d 409, 411 (Minn.1984).

Dyrdal argues that the notice of sale must be made with “exactitude” as to all sale terms, citing our decision in Minar v. Skoog, 235 Minn. 262, 50 N.W.2d 300 (1951). In Minar, the lessee’s right of first refusal was triggered by notice from the lessor of a third party’s offer to purchase the leased property. The lessee responded to the notice by accepting the offer to purchase, but also by requiring that the lessor agree to additional sale terms. We held that the lessee’s response to the offer failed because it did not match with “exactitude” the offer of sale contained in the notice. Id. at 266, 50 N.W.2d at 302. Minar reflects the standard for evaluating offer and acceptance, but does not address the question before us as to the sufficiency of the notice required to trigger the right of first refusal.

We have not previously considered what constitutes sufficient notice to trigger the right of first refusal. As a matter of first impression, we conclude, as did the court of appeals, that absent express agreement between the parties regarding the nature of notice activating a right of first refusal and its sufficiency, the lessor need provide only reasonable notice of the essential terms of an offer of sale to trigger the lessee’s obligation to timely respond. See John D. Stump & Assocs., Inc. v. Cunningham Mem’l Park, Inc., 187 W.Va. 438, 419 S.E.2d 699, 706 (1992). When, as here, the contract provides no deadline for accepting or rejecting the offer of sale, acceptance must be within a reasonable time. Stone v. Harmon, 31 Minn. 512, 515, 19 N.W. 88, 89 (1884). We acknowledge that upon receiving notice, a lessee may have to clarify or investigate uncertainties and ambiguities of essential terms, but we also conclude that such an inquiry must be done within a reasonable time and that both the lessee, in making inquiry, and the lessor, in responding to the inquiry, must act timely, reasonably and in good faith. See Stump, 419 S.E.2d at 706; Koch Indus., Inc. v. Sun Co., Inc., 918 F.2d 1203, 1212 n. 6 (5th Cir.1990); Barkley-Cupit Enters., Inc. v. Equitable Life Assurance Soc’y of the U.S., 157 Ga.App. 138, 276 S.E.2d 650, 654 (1981); see also 25 Lord, supra, § 67:85 at 503 (discussing example of “bad faith” attempt by owner to deprive lessee of right of first refusal).

Applying these standards to this case, we conclude that requiring Dyr-dal to respond within 48 hours to oral notice of sale was not reasonable, but by asserting his right and by requesting and receiving legible copies of the purchase agreement, Dyrdal received reasonable notice of the essential sale terms. We also conclude that by failing to inquire further concerning the sale terms, and by failing to accept or reject the sale terms within the 45 days he maintains that he had to accept or reject the offer, Dyrdal forfeited his right of first refusal and summary judgment dismissing his claim was properly granted.

Affirmed.

ANDERSON, G. BARRY, J„ not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.

      . Golden Nuggets contends that the price included in the August 8, 2001 letter was a typographical error. This is the only time that a price other than $265,000 was provided, although Dyrdal alleges, and Golden Nuggets denies, that Dyrdal had an oral contract with one of Golden Nuggets’ owners to purchase the land for $252,000.

      . A "1031 exchange” allows for the equity received from a sale of investment property to be reinvested into "like kind” property of equal or greater value without payment of capital gains tax. See 26 U.S.C. § 1031 (2000). Golden Nuggets intended to reinvest the sale proceeds in land in Nebraska, thereby avoiding capital gains taxes.

      . With regard to an unrelated sale in which Dyrdal’s nephew, Greg Dyrdal, abandoned his claim that he was denied his right of first refusal, Dyrdal asserts that Golden Nuggets' farm manager may have misrepresented the sale terms by guaranteeing a third-party buyer a renter. Dyrdal also claims that Golden Nuggets’ farm manager acquired and used confidential information about Dyrdal's farming operation, overstating disaster payments in reports to the federal government.

      . In our discretion, we decline to address Dyrdal's argument, first raised before this court, that Golden Nuggets anticipatorily breached the lease. See Thiele v. Stick, 425 N.W.2d 580, 582 (Minn.1988) (stating that we generally review only issues presented to and considered by the trial court); see also Minn. R. Civ.App. P. 103.04 (giving court discretion to address an issue not determined by the district court). In passing, we note that anticipatory breach is the “unconditional repudiation of a contract, either by words or acts, which is communicated to the other party prior to the time fixed for his performance^]” In re Haugen, 278 N.W.2d 75, 79 n. 6 (Minn.1979). Here, Dyrdal asserted that he had 45 days to exercise his right and that Golden Nuggets responded to his request for a legible copy of the purchase agreement. In our view, this does not constitute an "unconditional repudiation” communicated by Golden Nuggets before the time fixed for performance of the contract.


author: PER CURIAM. PAGE, Justice

text:
    STATE of Minnesota, Respondent, v. Robert Allen SHATTUCK, Appellant.
    No. C6-03-362.
    Supreme Court of Minnesota.
    Dec. 16, 2004.
   ORDER

PER CURIAM.

This case was heard on the court’s oral calendar on November 30, 2004. The court has decided the substantive issue but desires briefing on four specific questions relating to remedy.

Based upon all the files, records and proceedings herein,

It is the determination of this court that, in accordance with the rule of Blakely v. Washington, — U.S. -, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004), the district court’s imposition of an upward durational departure under Minn.Stat. § 609.109, subd. 4 (2002), from the Minnesota Sentencing Guidelines’ presumptive sentence violated appellant’s Sixth Amendment right to trial by jury. We note that because imposition of the presumptive sentence is mandatory absent additional judicial findings under the legislatively-created Guidelines regime, the presumptive sentence is the maximum penalty authorized solely by the jury’s verdict for the purposes of Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000). The test of Apprendi is one of functional effect rather than form. Id. at 494, 120 S.Ct. 2348. Because the Guidelines regime permits the district court to durationally depart upward from a presumptive sentence after finding aggravating factors not considered by the jury, it unconstitutionally usurps the role and undermines the function of the jury. A full opinion will follow.

IT IS HEREBY ORDERED that the parties shall, within 30 days of this order, file and serve supplemental briefs on the issue of remedy. Without foreclosing the possibility of imposing the presumptive sentence, at a minimum the briefs shall address the following questions:

(1)Whether the portions of the Sentencing Guidelines that unconstitutionally allow the district court to impose an upward durational departure based on facts not reflected in the jury’s verdict or admitted by the defendant are sever-able from the remainder of the Guidelines. See Minn.Stat. § 645.20 (2002); City of Duluth v. Sarette, 283 N.W.2d 533, 537 (Minn.1979).
(2) If the unconstitutional portions of the Guidelines properly may be severed, whether this court has the inherent authority to authorize the use of sentencing juries and a bifurcated trial process.
(3) Whether a sentencing jury or a bifurcated trial process implicates double jeopardy concerns.
(4) In the present case, what specific remedy is appropriate? In particular, does the fact that the district court denied appellant’s request to place before the jury aggravating factors that would, if found, justify sentencing enhancement, affect the disposition of this matter?

PAGE, Justice

(concurring in part and dissenting in part).

I concur with the court’s determination that the district court’s imposition of an upward durational sentencing departure violated Shattuck’s Sixth Amendment right to a jury trial under Blakely v. Washington, 542 U.S. -, 124 S.Ct. 2531 (2004). I respectfully dissent, however, from the order directing supplemental briefing on the issue of remedy. Supplemental briefing is neither necessary nor appropriate. “The presumptive sentence is the maximum penalty authorized solely by the jury’s verdict.” Under the sentencing guidelines, “imposition of the presumptive sentence is mandatory absent additional judicial findings.” Because the judicial findings made here were void ab initio and of no legal effect, I would remand to the district court for imposition of the presumptive sentence. See generally State v. Geller, 665 N.W.2d 514, 517 (Minn.2003), Williams v. State, 361 N.W.2d 840, 843-44 (Minn.1985). Any responsibility for fixing the “Blakely problem” lies with the legislature and not this court.