author: PER CURIAM.

text:
    2003 ND 22
    In the Matter of the Application for DISCIPLINARY ACTION AGAINST William E. McKECHNIE, a Member of the Bar of the State of North Dakota. Disciplinary Board of the Supreme Court of the State of North Dakota, Petitioner, v. William E. McKechnie, Respondent.
    No. 20020194.
    Supreme Court of North Dakota.
    Feb. 19, 2003.

      Loralyn K. Hegland, Assistant Disciplinary Counsel, Bismarck, ND, for petitioner.
    James S. Hill, Zuger Kirmis & Smith, Bismarck, ND, for respondent.
   PER CURIAM.

[¶ 1] Wilham E. McKechnie and Disciplinary Counsel have filed objections to a hearing panel’s report and order of discipline suspending McKechnie from the practice of law for 30 days and ordering he pay costs of the disciplinary proceedings for his violation of N.D.R. Prof. Conduct 1.1 and 1.4(b). We conclude there is clear and convincing evidence McKechnie violated N.D.R. Prof. Conduct 1.4(b), and we order that he be publicly reprimanded and pay the costs of the disciplinary proceedings in the amount of $5,375.59.

I

[¶ 2] McKechnie was admitted to practice law in North Dakota on October 5, 1981. On January 5, 1996, Dennis Foll-man retained McKechnie to investigate a possible discrimination or sexual harassment lawsuit he might have against his former employer, Upper Valley Special Education Unit (“Upper Valley”). McKechnie told Follman the statute of limitations on his claim would be three years from the date of Follman’s June 2, 1995 resignation from Upper Valley. McKech-nie had Follman sign an authorization so McKechnie could obtain Follman’s personnel file from Upper Valley. At that time, Follman paid McKechnie $1,500, which McKechnie categorized in his records as $500 for costs and $1,000 for a retainer. No written fee agreement between McKechnie and Follman was executed.

[¶ 3] McKechnie met with Follman in February 1996 and again told him he had three years from the date of his resignation to commence the lawsuit. Follman told McKechnie he was not ready to file the lawsuit at that time because “I wanted to take a look at some medical concerns ... and I didn’t want to have a conflict between the sexual harassment claim and the medical one at the time.”

[¶ 4] On October 10, 1996, McKechnie sent Follman a $500 check noted “retainer refund,” but the check was unaccompanied by an explanatory letter. On January 17, 1997, Follman sent a letter to McKechnie requesting an itemized billing for the $1,000 he had paid in 1996. Follman also informed McKechnie he anticipated that McKechnie could still represent him in his lawsuit against his former employer and that he had not hired another attorney. Following the April 1997 Grand Forks flood, McKechnie wrote Follman a letter on June 16,1997, stating:

It has been several months since we heard from you and I would like to touch base with you with regard to representation of your claim. We have now reach [sic] a sense of normalcy in Grand Forks and I am ready to proceed on your behalf. Please contact me at your earliest convenience to discuss.

In May 1998, Follman wrote a letter to McKechnie advising him that he wanted to resume his case against Upper Valley. McKechnie and Follman then entered into a written fee agreement providing for a contingent fee if a recovery was obtained in the sexual harassment case.

[¶ 5] In late May 1998, Follman sued Upper Valley. The trial court dismissed the lawsuit, concluding Follman’s claims were barred by the three-year statute of limitations because Follman discovered the facts which formed the basis of his claim in January 1995. This Court affirmed in Follman v. Upper Valley Special Educ. Unit, 2000 ND 72, 609 N.W.2d 90.

[¶ 6] A petition for discipline was filed against McKechnie in June 2001. Following a hearing, the hearing panel found McKechnie violated N.D.R. Prof. Conduct 1.1, which states that a lawyer shall provide competent representation, and N.D.R. Prof. Conduct 1.4(b), which states that a lawyer shall explain matters related to the representation to the extent reasonably necessary to permit the client to make informed decisions. The panel recommended that McKechnie be suspended from the practice of law for 30 days and that he pay the costs of the disciplinary proceedings. McKechnie and Disciplinary Counsel filed objections with this Court.

II

[¶ 7] We review disciplinary proceedings de novo on the record. In re Disciplinary Action Against Howe, 2001 ND 86, ¶ 6, 626 N.W.2d 650. We accord due weight to the findings, conclusions, and recommendations of the hearing panel, but we do not act as a mere “rubber stamp.” In re Disciplinary Action Against McDonald, 2000 ND 87, ¶ 13, 609 N.W.2d 418. Disciplinary counsel bears the burden of proving each alleged violation of the disciplinary rules by clear and convincing evidence. In re Disciplinary Action Against Seaworth, 1999 ND 229, ¶ 24, 603 N.W.2d 176. Each disciplinary case must be considered upon its own facts to decide what discipline, if any, is warranted. Disciplinary Board v. Edwardson, 2002 ND 106, ¶ 9, 647 N.W.2d 126.

A

[¶ 8] Disciplinary Counsel argues the hearing panel erred in granting McKechnie’s motion to strike his prior disciplinary history from the petition for discipline. The original petition for discipline listed as “an aggravating factor, under Standard 9.22(a), NDSILS,” five prior admonitions McKechnie had received, and the circumstances underlying each violation. McKechnie moved to strike the prior disciplinary offenses because they were “presumptively confidential admonitions” and irrelevant and prejudicial during the initial phase of the disciplinary proceedings. The hearing panel agreed and granted the motion.

[¶ 9] Admonitions are a form of “nonpublic” discipline. N.D. Stds. Imposing Lawyer Sanctions 2.5; In re Disciplinary Action Against Boulger, 2001 ND 210, ¶ 16, 637 N.W.2d 710. Disciplinary Counsel agrees admonitions are confidential, but argues the proceedings become public under N.D.R. Lawyer Discipl. 6.1B once a petition for discipline is filed with the board, and because the disciplinary history of the attorney may be considered in deciding the degree of discipline to be imposed under N.D. Stds. Imposing Lawyer Sanctions 9.22, the disciplinary history becomes part of the public record of the case. See Matter of Disciplinary Action Against Garcia, 366 N.W.2d 482, 485 (N.D.1985).

[¶ 10] We recognize the inconsistency created when disputes over a proper sanction in a public disciplinary proceeding result in the disclosure of otherwise nonpublic disciplinary offenses. We agree with McKechnie that the details of prior private discipline should not be alleged in a petition for public discipline. A prior disciplinary history is relevant only in assessing sanctions after the allegations in the petition for discipline have been proven by clear and convincing evidence. Detailing prior admonitions in the petition could prejudice the hearing panel’s consideration of the evidence in assessing the validity of the underlying charges. Compare State v. Saul, 434 N.W.2d 572, 575 (N.D.1989) (holding if criminal defendant stipulates to prior DUI convictions when charged under enhancement provisions of N.D.C.C. § 39-08-01, the submission of evidence of the defendant’s prior convictions to a jury constitutes prejudicial and reversible error). Although due process requires fair notice as to the precise nature of the disciplinary charges, see Matter of Disciplinary Action Against Hawkins, 2001 ND 55, ¶ 17, 623 N.W.2d 431; McDonald, 2000 ND 87, ¶ 33, 609 N.W.2d 418, we believe fair notice is accomplished in a case such as this with a general allegation in the petition for discipline stating aggravating circumstances under N.D. Stds. Imposing Lawyer Sanctions 9.22(a) will be presented at a later stage of the hearing. Details of the prior nonpublic violation need not and should not be alleged. Consequently, we conclude the hearing panel did not err in striking the detailed allegations of McKechnie’s prior disciplinary offenses from the original petition for discipline.

[¶ 11] McKechnie argues that, notwithstanding the hearing panel’s attempt to purify the record pending the hearing, references to the prior disciplinary history stemming, from their original publication deprived him of a fair hearing. However, the hearing panel granted McKechnie’s motion to strike, and we must presume the panel did not consider the details of the disciplinary history in finding McKechnie violated the rules of professional conduct. Although details of the prior admonitions were published by the media, we do not view this as depriving McKechnie of a fair hearing before the panel.

B

[¶ 12] Disciplinary Counsel argues the hearing panel erred in excluding Foil-man from the proceedings except when he testified. At the beginning of the hearing, McKechnie moved to exclude all witnesses, including Follman, from the proceedings under N.D.R.E 615. Disciplinary Counsel did not object, and the hearing panel granted the motion. Because Disciplinary Counsel did not object at the hearing, we decline to address the matter.

C

[¶ 13] Disciplinary Counsel argues the hearing panel erred in refusing to admit in evidence, for impeachment purposes, a letter McKeehnie wrote to Disciplinary Counsel during the early stages of these proceedings. Disciplinary Counsel did not lay a foundation for impeaching McKechnie with prior inconsistent statements, see Sather v. Bigger, 107 N.W.2d 38, 40-41 (N.D.1961), and has not shown how this evidence was critical to the case. We conclude the hearing panel did not err.

D

[¶ 14] McKeehnie argues there is no evidence that McKeehnie violated any of the ethical rules in this case because Disciplinary Counsel presented no expert evidence of the applicable standard of care to support the charges. McKeehnie presented expert testimony of a trial attorney who opined that McKechnie’s actions in accepting $1,500 to investigate the claim during the initial consultation, in advising Follman about the statute of limitations, and in his response to Follman’s correspondence, met the applicable standard of care under the circumstances. The expert witness also testified an attorney-client relationship did not exist until the written fee agreement was executed in May 1998. Disciplinary Counsel argues the hearing panel should not have admitted this testimony.

[¶ 15] We have said that expert testimony regarding the interpretation of the rules of professional conduct and whether a rule has been violated is inappropriate in a disciplinary proceeding. See Boulger, 2001 ND 210, ¶ 13, 637 N.W.2d 710. Interpretation of the rules of professional conduct, like interpretation of statutes, is a question of law for a court to decide. See Hawkins v. Comm’n for Lawyer Discipline, 988 S.W.2d 927, 936 (Tex.Ct.App.1999). “Although opinions of qualified writers and amicus briefs [on the interpretation of disciplinary rules] are considered by this court, they are not an appropriate subject of expert testimony.” In re Masters, 91 Ill.2d 413, 63 Ill.Dec. 449, 438 N.E.2d 187, 192 (1982).

[¶ 16] Although expert testimony is generally necessary in a legal malpractice action to establish the professional’s standard of care and whether the professional’s conduct in a particular case deviated from that standard of care, Richmond v. Nodland, 501 N.W.2d 759, 761 (N.D.1993), expert testimony on the standard of care required in a malpractice action is not required to aid the trier of fact in determining whether an attorney’s actions violate the rules of professional conduct. Hawkins, 988 S.W.2d at 936. Disciplinary proceedings differ significantly, both procedurally and substantively, from civil legal malpractice actions. See 3 R. Mallen and J. Smith, Legal Malpractice § 19.7, at p. 103 (5th ed.2002) (“Legal Malpractice ”); see also Olson v. Fraase, 421 N.W.2d 820, 828 (N.D.1988) (holding although conduct proscribed by a rule of professional conduct may also be relevant in determining whether an attorney has breached a civil duty an attorney owes a client, a violation of the rules does not itself form the basis for a claim for relief against a wrongdoing attorney). Whereas the rules of professional conduct set a minimum level of conduct with the consequence of disciplinary action, malpractice liability is premised upon the conduct of the reasonable lawyer under the particular circumstances. See Legal Malpractice § 19.7, at p. 104; see also Matter of Disciplinary Action Against Jaynes, 267 N.W.2d 782, 784 (N.D.1978) (stating the “fact that an injured party may recover from a lawyer in a malpractice action is in itself not sufficient to maintain the necessary high standard”). In In re Disciplinary Action Against Howe, 2001 ND 7, ¶ 6, 621 N.W.2d 361, we rejected an argument that expert evidence of the standard of care is necessary to support charges in a disciplinary proceeding and quoted the hearing panel’s resolution of the issue with approval:

In this case the standard of care is set forth in the rules themselves. There is no issue as to what the standard of care is. There is no dispute as to the interpretation of the standard of care, nor is the standard that of what a reasonably competent attorney might do under the same or similar circumstances.

As the court stated in In re Conduct of Leonard, 308 Or. 560, 784 P.2d 95, 100 (1989), expert witness testimony under these circumstances “amount[s] to nothing more than an oral brief as to why one particular construction of the governing disciplinary rule would not be violated by a particular hypothetical set of facts. The accused was able to make the same legal arguments through counsel, and did so. The evidence was not admissible.”

[¶ 17] We conclude Disciplinary Counsel was not required to present expert testimony of the standard of care to support the charges in this case. We further conclude the expert testimony presented by McKechnie was not necessary to “assist the trier of fact to understand the evidence or to determine a fact in issue.” N.D.R.E 702. We will ignore the expert testimony in our de novo review. See Boulger, 2001 ND 210, ¶ 13, 637 N.W.2d 710.

E

[¶ 18] McKechnie argues he cannot be disciplined for an ethical violation because there was no attorney-client relationship established with Follman during 1996.

[¶ 19] “Traditionally, it has been said that the lawyer-client relationship begins when the client acknowledges the lawyer’s capacity to act in his behalf and the lawyer agrees to act for the benefit and under the control of the client.” ABA/BNA Lawyers’ Manual On Professional Conduct, at 31:101 (2002) ("ABA/BNA Manual ”). The existence of an attorney-client relationship is a fact question, necessarily dependent on the particular circumstances of the case. Moen v. Thomas, 2001 ND 110, ¶ 13, 628 N.W.2d 325. An attorney-client relationship may be implied from the conduct of the parties. Stormon v. Weiss, 65 N.W.2d 475, 520 (N.D.1954). “[I]t may arise when a putative client reasonably believes that a particular lawyer is representing him and the lawyer does not disabuse the individual of this belief.” ABA/BNA Manual, at 31:101. See also Moen, at ¶ 15. The existence of the relationship does not depend on an express contract or the payment of fees. Moen, at ¶ 13.

[¶ 20] Here, Follman met with McKechnie in January 1996 and, according to Follman, McKechnie advised him that he had “a good claim, highly winnable” against Upper Valley and that he had three years from the date of his resignation to bring the lawsuit. Follman paid McKechnie $1,500, and McKechnie’s staff prepared a “New Client Sheet” for the “sexual harassment” claim showing Foil-man had paid $500 in “costs” and a $1,000 “retainer.” McKechnie obtained Follman’s personnel file from Upper Valley and met with Follman in February 1996 to further discuss the case. Although no formal written fee agreement was executed at that time and McKechnie considered the $1,500 as merely an “investigative retainer,” Foil-man testified he believed the $1,500 was paid to McKechnie “[t]o handle my claim.” Follman’s belief that McKechnie was acting as his attorney in the sexual harassment matter is a reasonable belief under the circumstances, and McKechnie’s unexplained “retainer refund” was insufficient to attempt to dispel that belief. We conclude an attorney-client relationship existed beginning in January 1996.

F

[¶ 21] -McKechnie argues there is no clear and convincing evidence that he violated N.D.R. Prof. Conduct 1.1, which provides:

A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.

[¶ 22] Disciplinary Counsel’s theory for the violation is straightforward. McKechnie advised Follman in 1996 that Follman had three years from the date he resigned from Upper Valley to file the suit under the North Dakota Human Rights Act, N.D.C.C. ch. 14-02.4. However, under the Act, Follman’s suit had to be filed within three years of the last discriminatory incident. See Follman, 2000 ND 72, ¶ 5, 609 N.W.2d 90. Because McKechnie gave Follman incorrect legal advice about the statute of limitations, which resulted in Follman’s case being dismissed, Disciplinary Counsel argues McKechnie violated N.D.R. Prof. Conduct 1.1.

[¶ 23] We note the California Supreme Court’s concern over “the problems inherent in using disciplinary proceedings to punish attorneys for negligence, mistakes in judgment, or lack of experience or legal knowledge.” Lewis v. State Bar of California, 28 Cal.3d 683, 170 Cal.Rptr. 634, 621 P.2d 258, 261 (1981). We share that concern. In C. Wolfram, Modern Legal Ethics § 5.1, at p. 190 (1986) (footnotes omitted), the author states:

To date, the enforcement of competence standards has been generally limited to relatively exotic, blatant, or repeated cases of lawyer bungling. Lawyers who make some showing of effort, and who do nothing other than perform badly, rarely appear in the appellate reports in discipline cases. The lawyers who are disciplined for incompetence have usually aggravated their situation. For example, several cases involve lawyers who, after them incompetent work, concocted elaborate schemes or lies to deceive a client whose case was mishandled. Most decisions and official ABA policy insist that a single instance of “ordinary negligence” is usually not a disciplinary violation, although some decisions hold a lawyer to a standard of ordinary care that is similar to that required in malpractice cases ... or discipline a lawyer for a single instance of neglect. Consistent with that position, courts will discipline lawyers when the neglect is accompanied by some other violation, as an impermissible conflict of interest, or when the acts of negligence are repeated.

[¶ 24] We agree with the observation of the Arizona Supreme Court in Matter of Curtis, 184 Ariz. 256, 908 P.2d 472, 477-78 (1995) (footnote omitted):

Neither failure to achieve a successful result nor mere negligence in the handling of a case will necessarily constitute an ER 1.1 violation. We recognize the important distinction between conduct by an attorney that is simply negligent and conduct that rises to the level of an ethical violation. Clearly, the Bar must be vigilant in guarding the rights of clients, “but care should be taken to avoid the use of disciplinary action ... as a substitute for what is essentially a malpractice action.” See In re Myers, 164 Ariz. 558, 561 n. 3, 795 P.2d 201, 204 n. 3 (1990) (citations and internal quotations omitted); see also In re Mulhall, 159 Ariz. 528, 531, 768 P.2d 1173, 1176 (1989) (noting that negligently allowing a statute of limitations to run does not constitute an ethical violation). Thus, although not every negligent act violates an ethical rule, neglect in investigating the facts and law necessary to present a client’s claim crosses the fíne line between simple neglect and conduct warranting discipline.

See also The Florida Bar v. Neale, 384 So.2d 1264, 1265 (Fla.1980) (stating the “rights of clients should be zealously guarded by the bar, but care should be taken to avoid the use of disciplinary action ... as a substitute for what is essentially a malpractice action”); In re Complaint as to Conduct of Gygi, 273 Or. 443, 541 P.2d 1392, 1396 (1975) (stating “we are not prepared to hold that isolated instances of ordinary negligence are alone sufficient to warrant disciplinary action”); Committee on Legal Ethics v. Mullins, 159 W.Va. 647, 226 S.E.2d 427, 430 (1976) (stating “[c]harges of isolated errors of judgment or malpractice in the ordinary sense of negligence would normally not justify the intervention of the ethics committee”), overruled on other grounds, Committee on Legal Ethics v. Cometti, 189 W.Va. 262, 430 S.E.2d 320, 330 (1993); 1 R. Mallen and J. Smith, Legal Malpractice § 1.9, at p. 45 (5th ed.2000) (stating “[Ordinary negligence should not warrant discipline”).

[¶ 25] Our caselaw accords with this view. In In re Disciplinary Action Against Nassif, 504 N.W.2d 311 (N.D.1993), this Court publicly reprimanded for a violation of N.D.R. Prof. Conduct 1.1 a lawyer who, among other things, allowed a statute of limitations to run on a client’s claim. However, Nassif involved more than an isolated instance of ordinary negligence. In Nassif, 504 N.W.2d at 312, 315, the lawyer was “oblivious[] to the statute of limitation,” was unaware of the date of the client’s injury, failed to communicate with the client, and when the client sought to change representation for her claim, the lawyer told her “he was still entitled to ‘my share of the money,’ ” and would continue to handle her claim. In In re Disciplinary Action Against Orvik, 549 N.W.2d 671 (N.D.1996), we accepted a stipulation for discipline where the lawyer violated N.D.R. Prof. Conduct 1.1 and other rules by failing to file an action within the time required by the applicable statute of limitations and by failing to inform the client of the legal significance of the error until almost five years after the lawyer was hired to bring the action.

[¶ 26] In this ” case, McKechnie gave Follman incorrect legal advice about the statute of limitations and Follman’s case was dismissed for failure to file within the limitations period. This evidence shows nothing more than an isolated instance of ordinary negligence, or error of judgment. We conclude there is no clear and convincing evidence that McKechnie violated N.D.R. Prof. Conduct 1.1.

G

[¶ 27] McKechnie argues there is no clear and convincing evidence that he violated N.D.R. Prof. Conduct 1.4(b), which provides:

(b) A lawyer shall explain matters related to the representation to the extent reasonably necessary to permit the client to make informed decisions.

[¶ 28] The record shows McKechnie’s contacts with Follman regarding the lawsuit were sporadic and, at times, confusing. McKechnie mailed Follman a $500 “retainer refund” without any further explanation. The advice McKechnie did provide regarding the statute of limitations was incorrect. Although Follman told McKechnie of the dates incidents of harassment occurred at Upper Valley, McKechnie did not advise Follman during the ensuing two and one-half years that an action would have to be filed within three years from the date of the alleged wrongdoing. McKechnie argues that he gave Follman a copy of the applicable statute of limitations which would have advised him of the applicable limitations period. However, Follman paid McKechnie for his legal expertise and advice, and McKechnie could not satisfy his duty to explain matters related to the representation by simply providing Follman with a copy of the applicable statute, particularly when McKech-nie specifically advised Follman he had until three years after his resignation to bring suit.

[¶ 29] We conclude there is clear and convincing evidence that McKechnie violated N.D.R. Prof. Conduct 1.4(b).

Ill

[¶ 30] The hearing panel recommended that McKechnie be suspended from the practice of law for a period of 30 days under N.D. Stds. Imposing Lawyer Sanctions 2.2, and ordered that McKechnie be assessed the costs of the disciplinary proceedings in the amount of $5,375.59. McKechnie argues that a reprimand is more appropriate and that he should not be assessed any attorney fees and costs of the proceedings. Disciplinary Counsel argues this Court should suspend McKech-nie’s license to practice law for six months and one day, and that McKechnie be assessed the costs of this review in addition to the costs recommended by the hearing panel.

A

[¶ 31] The violation of N.D.R. Prof. Conduct 1.4(b) is premised on McKechnie’s failure to correctly advise Follman about the statute of limitations and the status of the representation. Rule 4.53, N.D. Stds. Imposing Lawyer Sanctions, provides:

4.53 Reprimand is generally appropriate when a lawyer:
(a) demonstrates failure to understand relevant legal doctrines or procedures and causes injury or potential injury to a client....

[¶ 32] We believe a public reprimand is an appropriate sanction under the circumstances. Although prior disciplinary offenses are aggravating factors under N.D. Stds. Imposing Lawyer Sanctions 9.22(a), we do not view McKechnie’s prior admonitions as warranting a sanction more severe than a public reprimand.

B

[¶ 33] Unless otherwise ordered by the court or hearing panel, costs and expenses of disciplinary proceedings must be assessed against the lawyer if discipline is imposed. Howe, 2001 ND 86, ¶ 35, 626 N.W.2d 650. Although an allegation of misconduct involving another client of McKechnie was dismissed by the hearing panel in these proceedings, the allegations of misconduct involving Follman comprised the major part of the hearing. The evidence relating to McKechnie’s alleged violations of N.D.R. Prof. Conduct 1.1 and 1.4(b) overlapped. We agree with the hearing panel and order that McKechnie pay the costs of the disciplinary proceedings in the amount of $5,375.59. We deny Disciplinary Counsel’s request that McKechnie be assessed the attorney fees and costs of this review.

IV

[¶ 34] We conclude McKechnie violated N.D.R. Prof. Conduct 1.4(b), and we order that he be publicly reprimanded and pay the costs of the disciplinary proceedings in the amount of $5,375.59.

[¶ 35] GERALD W. VANDE WALLE, C.J., WILLIAM A. NEUMANN, MARY MUEHLEN MARING, CAROL RON-NING KAPSNER, and DALE V. SAND-STROM, JJ., concur.

      . The Legislature has since shortened the limitations period. See N.D.C.C. § 14-02.4-19.


source: Caselaw Access Project

author: VANDE WALLE, Chief Justice.

license: Public Domain

text:
    2003 ND 17
    Duane Thomas MOEN, Plaintiff and Appellant, v. STATE of North Dakota (OMB), Defendant and Appellee.
    No. 20020226.
    Supreme Court of North Dakota.
    Feb. 19, 2003.
    Rehearing Denied March 5, 2003

      Duane T. Moen, pro se, Devils Lake, N.D.
    Douglas A. Bahr, Assistant Attorney General, Attorney General’s Office, Bismarck, N.D., for defendant and appellee.
   VANDE WALLE, Chief Justice.

[¶ 1] Duane Thomas Moen appealed from a district court order for judgment which dismissed his claim against the State of North Dakota, the Office of Management and Budget (“OMB”). We affirm.

[¶ 2] Moen started working as a temporary employee for the North Dakota State Parks and Recreation Department (“Department”) in 1987. At that time, temporary employees were not eligible for coverage under the uniform group insurance program. They became eligible to participate in this program and the North Dakota Public Employees Retirement System in August 1989. See N.D.C.C. § 54-52.1-03.4 (describing the ability of temporary employees to participate in the uniform group insurance program); N.D.C.C. § 54-52-02.9 (describing how temporary employees may elect to participate in the public employees retirement system). However, temporary employees must pay their own insurance premiums, and the State does not make any retirement contributions for them.

[¶ 3] At trial, Moen testified about his desire to obtain state benefits but stated he never asked any state employee about his eligibility. He also testified he had been working with attorneys on the issue for the past four years. Because he did not know temporary employees could already receive state benefits, Moen contacted legislators in the spring of 1999, hoping they could create a benefit program for temporary employees. Moen then learned from a Department manager that he could participate in the insurance program and the retirement system; he specifically stated he learned of this entitlement on April 11, 1999. Although he chose to obtain health insurance through the State, Moen did not elect to participate in the retirement plan. Moen asserts he did not learn about the established system for providing temporary employees with benefits until the summer of 1999.

[¶ 4] Moen filed a notice of claim with the OMB on November 16, 1999, more than 180 days from April 11, 1999 — the date he learned he could obtain state benefits. Moen sought compensation for the extra money he paid in private health insurance premiums when he could have participated in the group health insurance program at a lower cost. He also claimed he would have participated in the retirement program if he had learned about it earlier. After the OMB denied his claim twice, Moen filed his claim in small claims court, and the State removed the action to district court. The district court ruled Moen failed to comply with the notice of claim provision in N.D.C.C. § 32-12.2-04(1) and dismissed the complaint with prejudice due to a lack of jurisdiction.

[¶ 5] Under N.D.C.C. § 32-12.2-04(1):

A person bringing a claim against the state or a state employee for an injury shall present to the director of the office of management and budget within one hundred eighty days after the alleged injury is discovered or reasonably should have been discovered a written notice stating the time, place, and circumstances of the injury, the names of any state employees known to be involved, and the amount of compensation or other relief demanded.

A party seeking to bring a claim against the State or its employees must strictly comply with the requirements of N.D.C.C. § 32-12.2-04(1). Ghorbanni v. N.D. Council on the Arts, 2002 ND 22, ¶ 8, 639 N.W.2d 507. A court lacks subject matter jurisdiction to entertain a lawsuit in the absence of a timely filing of a notice of claim under N.D.C.C. § 32-12.2-04(1). Ghorbanni, at ¶ 8 (citing Kautzman v. McDonald, 2001 ND 20, ¶ 11, 621 N.W.2d 871; State v. Haskell, 2001 ND 14, ¶ 9, 621 N.W.2d 358; Cooke v. Univ. of N.D., 1999 ND 238, ¶ 9, 603 N.W.2d 504; Earnest v. Garcia, 1999 ND 196, ¶ 7, 601 N.W.2d 260; Allied Mut. Ins. Co. v. Dir. of the N.D. Dep’t of Transp., 1999 ND 2, ¶ 16, 589 N.W.2d 201).

[¶ 6] In response to the dismissal of his claim pursuant to the 180-day notice period, Moen explains: he did not contemplate filing a claim in April 1999 when he learned about his eligibility for state benefits because he thought a new program had been implemented, since none of the legislators he had contacted told him he was already eligible for benefits. Moen asserts he realized he had a claim in the summer of 1999, after he learned about the existing system for providing temporary employees with benefits.

[¶ 7] We are troubled by the district court’s failure to make any findings of facts when it dismissed Moen’s claim. When presented with conclusory or missing findings of fact, we ordinarily would remand; however,

we will not do so when, through inference or deduction, we can discern the rationale for the result reached by the trial court. We may rely on implied findings of fact when the record enables us to understand the factual determinations made by the trial court and the basis for its conclusions of law and judgment.

Almont Lumber & Equip. v. Dirk, 1998 ND 187, ¶ 13, 585 N.W.2d 798 (citations omitted); see also Holtz v. Holtz, 1999 ND 105, ¶ 18, 595 N.W.2d 1.

[¶ 8] Here the district court necessarily made an implicit finding that Moen discovered or reasonably should have discovered his claim on or before April 11, 1999, and accordingly dismissed his claim. The Order for Judgment states: “The Court, having considered the record, trial brief and oral argument of the parties, ruled from the bench that the Court lacks jurisdiction over plaintiffs claim because plaintiff did not comply with the notice of claim provision of N.D.C.C. § 32-12.2-04(1)....” The district court judge also told Moen, “the law ... basically requires these kinds of claims to be submitted within 180 days, and if they are not submitted, this Court basically has no choice but to dismiss the claim.”

[¶ 9] Even assuming Moen did not have actual knowledge of his claim on April 11, 1999, the notice provision of N.D.C.C. § 32-12.2-04(1) extends beyond mere “discovery” of a claim; it states a claimant must file a claim “within one hundred eighty days after the alleged injury is discovered or reasonably should have been discovered.” (emphasis added). Moen testified about his longtime concern about benefits for temporary employees. Prior to April 11, 1999, Moen contacted state legislators and worked with attorneys about benefits, but he failed to ask the Department or any other state employees about the issue. Thus, the record convinces us the district court implicitly found Moen discovered or reasonably should have discovered his claim on or before April 11,1999.

[¶ 10] Moen also argues the State, as an employer, should have an affirmative obligation to its employees to inform them about the benefits available to them. The State had no statutory duty to inform Moen about benefits. Although N.D. Admin. Code § 71-03-04-02, promulgated by the Public Employees Retirement System Board, states an “agency shall inform its employees of their right to group insurance and the process necessary to enroll,” Moen cites no legal authority which entitles him to seek damages from the State due to an agency’s failure to comply with this administrative directive.

[¶ 11] Because Moen was not within the 180-day notice period when he filed his notice of claim with the OMB on November 16, 1999, the district court properly dismissed his claim under N.D.C.C. § 32-12.2-04(1). We affirm.

[¶ 12] CAROL RONNING KAPSNER, MARY MUEHLEN MARING,

WILLIAM A. NEUMANN and DALE V. SANDSTROM, JJ„ concur.

      . We treat this as an appeal from the subsequently entered consistent judgment. See, e.g., Hentz v. Hentz, 2001 ND 69, ¶ 1 n. 1, 624 N.W.2d 694.


author: NEUMANN, Justice.

text:
    2003 ND 18
    Hayley WAGNER, a minor, by and through her parents, Peter WAGNER and Lori Wagner, Plaintiff and Appellee, v. Ronald and Deborah SQUIBB, Defendants and Appellants, and Thomas Semmens, Defendant.
    No. 20020237.
    Supreme Court of North Dakota.
    Feb. 19, 2003.

      Donald L. Peterson of Peterson Law Office, Minot, ND, for defendants and appellants.
    James E. Nostdahl of Pringle & Herig-stad, P.C., Minot, ND, for plaintiff and appellee.
   NEUMANN, Justice.

[¶ 1] Ronald and Deborah Squibb (“the Squibbs”) appeal from the trial court’s amended judgment as a matter of law, entered in favor of plaintiff Hayley Wagner, who appears by and through her parents, Peter and Lori Wagner (“the Wag-ners”). We affirm.

[¶ 2] On December 27, 1998, one of the Squibbs’ dogs bit Hayley Wagner. The Squibbs were out of town at the time of the incident, but had asked Thomas Sem-mens to care for the Squibbs’ house and dogs during their absence. At the time of the incident the dogs were loose in front of the house. Semmens had been told to keep the dogs either in the house or in their pen. At the close of evidence, the Wagners moved for judgment as a matter of law. This motion was denied. A jury returned a verdict finding Semmens 80 percent at fault and the Squibbs 20 percent at fault. The jury found Semmens was the Squibbs’ agent, but also found Semmens was not acting within the scope of his authority. Judgment was entered July 2, 2001. On July 24, 2001, the Wag-ners moved again for judgment as a matter of law, claiming there was no legally sufficient evidentiary basis for the jury to find Semmens was not acting within the scope of his authority and, therefore, the Squibbs were liable. The trial court granted the motion June 21, 2002, finding Semmens was acting within the scope of his agency authority when he allowed the dogs to get outside the house and pen. The Squibbs appeal.

[¶ 3] The Squibbs argue the trial court abused its discretion in granting judgment as a matter of law. The Squibbs argue reasonable persons could differ on the issue of whether Semmens was acting within the scope of his authority when the dogs got outside, because the jury itself found Semmens was not acting within the scope of agency on the day of the incident. “A trial court’s decision on a motion for judgment as a matter of law is fully reviewable on appeal.” Howes v. Kelly Services, Inc., 2002 ND 131, ¶ 7, 649 N.W.2d 218.

[¶ 4] If a trial court does not grant a motion for judgment as a matter of law at the close of all evidence, a trial court may later decide the legal questions raised by the motion. N.D.R.Civ.P. 50(b). “Judgment as a matter of law” now replaces the terms “directed verdict” and “judgment notwithstanding the verdict” in the rule. Id., Explanatory Note. The standard for determining whether judgment as a matter of law should be granted is the same as that for a directed verdict or judgment notwithstanding the verdict. Id. When ruling on a motion for a judgment as a matter of law, “the court must decide whether the evidence is such that, without weighing the credibility of the witnesses or otherwise considering the weight of the evidence, reasonable men could reach but one conclusion as to the verdict.... ” Anderson v. Kroh, 301 N.W.2d 359, 362 (N.D.1981).

[¶ 5] When an appeal is taken in a case in which an evidentiary hearing has been held, the appellant has a duty to provide this Court with a transcript of the proceedings. N.D.R.App.P. 10(b). The transcript must be sufficient to allow “a meaningful and intelligent review of the alleged error.” State v. Kensmoe, 2001 ND 190, ¶ 14, 636 N.W.2d 183. An appellant assumes the consequences and the risk for the failure to file a sufficient transcript. Id. If the record on appeal does not allow for a meaningful and intelligent review of the trial court’s alleged error, we will decline review of the issue. Id.

[¶ 6] In the present case, the Squibbs argue there was no specific evidence as to how the dogs got outside the house and, therefore, reasonable persons could well have found the dogs got outside despite Semmens. In order to determine whether reasonable persons could reach differing conclusions on this issue, we would need to review the record evidence. The Squibbs, however, have failed to file a transcript of the trial court proceedings to permit a meaningful and intelligent review of such evidence. Therefore, we cannot, say the trial court abused its discretion in granting the Wagners’ motion for judgment as a matter of law.

[¶ 7] The trial court’s amended judgment is affirmed.

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


author: SANDSTROM, Justice.

text:
    2003 ND 24
    Jamie HARTMAN, Plaintiff, Appellee and Cross-Appellant, v. ESTATE OF Anthony J. MILLER, deceased, aka Tony J. Miller, deceased, Defendant, and American Family Mutual Insurance Company, Defendant, Appellant and Cross-Appellee.
    No. 20020167.
    Supreme Court of North Dakota.
    Feb. 19, 2003.

      Charles T. Edin (argued), Charles T. Edin, P.C. Law Office, and Robert V. Bol-inske, Bismarck, N.D., for plaintiff, appel-lee and cross-appellant.
    William C. Severin, Severin, Ringsak & Morrow, Bismarck, N.D., for defendant, appellant and cross-appellee.
   SANDSTROM, Justice.

[¶ 1] American Family Mutual Insurance (“American Family”) appeals from a judgment awarding its insured, Jamie Hartman, damages for American Family’s bad faith in handling her claim for uninsured motorist coverage. Hartman cross-appeals from a partial summary judgment denying her no-fault benefits for treatment of post-traumatic stress disorder. We hold American Family was not entitled to judgment as a matter of law on Hartman’s bad-faith claim, and emotional injuries with physical manifestations are a bodily injury under the insurance policy’s no-fault provisions. We affirm in part, reverse in part, and remand for further proceedings.

I

[¶ 2] Hartman was injured in a single vehicle rollover in November 1998, while riding in a pickup owned and driven by Anthony Miller. Miller’s pickup was uninsured, but Hartman was an additional insured under her mother’s family car policy with American Family. Hartman and Miller were involved in a relationship when Hartman lived in Dickinson. Hartman ended their relationship in July 1998, after Miller had threatened her. Hartman then moved to Bismarck and lived with her mother. In November 1998, Hartman agreed to meet with Miller. On November 27, 1998, Miller met Hartman after she finished work, and they went to two bars in Bismarck, where they consumed alcoholic beverages. During the evening, Miller became upset and jealous. He subsequently drove himself and Hartman around Bismarck, and he eventually pulled off Highway 83 north of Bismarck and rapidly accelerated his pickup on a gravel road. Miller’s pickup began to fishtail and rolled several times, injuring both Miller and Hartman. As a result of the rollover, Miller was charged with reckless endangerment.

[¶ 3] Miller later died as a result of injuries sustained in an unrelated accident. In July 2000, Hartman sued Miller’s estate for negligence and American Family for no-fault benefits to treat post-traumatic stress disorder and for uninsured motorist coverage. Hartman alleged American Family’s conduct in refusing to pay benefits and in failing to pay those benefits in a timely manner breached American Family’s obligation to act in good faith and to deal fairly with her. American Family answered that post-traumatic stress disorder was not a bodily injury for purposes of no-fault benefits. American Family also claimed the rollover was not an “accident” for purposes of uninsured motorist coverage and it was permitted to raise any defenses available to Miller on the issues of liability and damages. See Fetch v. Quam, 530 N.W.2d 337, 341 (N.D.1995) (allowing insurer unrestricted intervention to present all claims and defenses that uninsured motorist could have raised).

[¶ 4] American Family moved for partial summary judgment on Hartman’s claim for no-fault benefits to treat post-traumatic stress disorder. Hartman discovered a statement by Miller to a Dickinson law enforcement officer in which Miller said he did not intend to kill Hartman and he would have driven the pickup off a bridge or into a bridge if he had wanted to kill her. Hartman thereafter moved to amend her complaint to allege a separate bad-faith claim that American Family breached its obligation of good faith and fair dealing when, without conducting a reasonable investigation, it denied Hartman’s claim for uninsured motorist coverage on the ground the rollover was not an accident. American Family then moved for a “declaratory judgment” determination that the rollover was not an accident.

[¶ 5] The trial court granted American Family partial summary judgment on Hartman’s claim for medical expenses to treat post-traumatic stress disorder, concluding the disorder was not a “bodily injury” under the applicable no-fault law. The court denied American Family’s motion for “declaratory judgment,” concluding factual issues existed about whether the rollover was an accident. The court also granted Hartman’s motion to amend her complaint to allege American Family acted in bad faith in denying her claim for uninsured motorist coverage without conducting a reasonable investigation.

[¶ 6] A jury found the rollover was an accident, Miller was 75% at fault and Hartman was 25% at fault for Hartman’s damages, and Hartman incurred $2,200 in past economic damages, $2,750 in future economic damages, and $5,000 in past noneco-nomic damages. The jury also found American Family acted in bad faith in handling Hartman’s uninsured motorist claim, and awarded her $20,000 for the bad-faith claim, plus reasonable costs, expenses, and attorney fees. American Family appealed, and Hartman cross-appealed.

[¶ 7] The trial court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27-05-06. American Family’s appeal and Hartman’s cross-appeal are timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, §§ 2 and 6, and N.D.C.C. § 28-27-01.

II

[¶ 8] American Family argues the trial court abused its discretion in granting Hartman’s motion to amend her complaint to allege bad faith. American Family argues discovery of Miller’s statement to a Dickinson law enforcement officer did not resolve whether the rollover was an accident. American Family argues coverage was fairly debatable with or without that statement, and it was not bad faith as a matter of law to assert a coverage dispute. American Family argues the bad-faith issue should not have been submitted to the jury.

A

[¶ 9] Complaints are construed liberally to accomplish substantial justice. Kaler v. Kraemer, 1998 ND 56, ¶ 7, 574 N.W.2d 588. Rule 15(a), N.D.R.Civ.P., permits amendments to pleadings and authorizes a trial court to freely grant amendments when justice requires. A trial court may grant or deny amendments to pleadings under N.D.R.Civ.P. 15(a), and we will not reverse the court’s decision absent an abuse of discretion. Messiha v. State, 1998 ND 149, ¶ 7, 583 N.W.2d 385. A trial court abuses its discretion when it acts arbitrarily, unconscionably, or unreasonably, or when its decision is not the product of a rational mental process leading to a reasoned determination. Narum v. Faxx Foods, Inc., 1999 ND 45, ¶ 29, 590 N.W.2d 454.

[¶ 10] Hartman’s initial complaint alleged American Family was responsible for certain no-fault benefits, including medical expenses to treat post-traumatic stress disorder, and Hartman was also entitled to uninsured motorist coverage. Hartman alleged American Family’s refusal to pay those benefits in a timely manner constituted a breach of American Family’s obligation to act in good faith and to deal fairly with her. Hartman’s amended complaint added a separate allegation that American Family failed to conduct a reasonable investigation of her claim. Although American Family asserts Hartman’s initial complaint alleged bad faith only for the failure to pay no-fault benefits to treat post-traumatic stress disorder, a liberal construction of that complaint is that her bad-faith claim alleged the failure to pay both no-fault benefits and uninsured motorist coverage in a timely manner. Moreover, in granting Hartman’s motion to amend her complaint, the trial court recognized that amendments should be freely given when justice requires. The court said the bad-faith issue was a jury question, because evidence of Miller’s statement to the Dickinson law enforcement officer could be considered evidence of a failure to investigate. The court also decided American Family had ample opportunity to prepare for issues raised by the amendment. Under these circumstances, we cannot say the trial court’s decision to allow Hartman to amend her complaint was arbitrary, unconscionable, or unreasonable, or was not the product of a rational mental process leading to a reasoned decision. We conclude the court did not abuse its discretion in allowing Hartman to amend her complaint.

B

[¶ 11] American Family argues the trial court erred in denying its motion for judgment as a matter of law on Hartman’s bad-faith claim. In Peterson v. Traill County, 1999 ND 197, ¶ 7, 601 N.W.2d 268 (citations omitted), we outlined our standard of review of a motion for judgment as a matter of law:

The standard of review on a motion for judgment as a matter of law under N.D.R.Civ.P. 50 is the same as the standard applied to motions for directed verdict before the rule was modified in 1994. The trial court’s decision on a motion brought under N.D.R.Civ.P. 50 to grant or deny judgment as a matter of law is based upon whether the evidence, when viewed in the light most favorable to the party against whom the motion is made, leads to but one conclusion as to the verdict about which there can be no reasonable difference of opinion. In determining whether the evidence is sufficient to create an issue of fact, the trial court must view the evidence in the light most favorable to the non-moving party, and must accept the truth of the evidence presented by the non-moving party and the truth of all reasonable inferences from that evidence. A trial court’s decision on a motion for judgment as a matter of law is fully reviewable on appeal.

[¶ 12] An insurer has a duty to act fairly and in good faith in dealing with its insured, including a duty of fair dealing in paying claims, providing defenses to claims, negotiating settlements, and fulfilling all other contractual obligations. See Fetch v. Quam, 2001 ND 48, ¶ 12, 623 N.W.2d 357; Corwin Chrysler-Plymouth, Inc. v. Westchester Fire Ins. Co., 279 N.W.2d 638, 643 (N.D.1979). The gravamen of the test for bad faith is whether the insurer acts unreasonably in handling an insured’s claim. Fetch, at ¶ 12. An insurer acts unreasonably by failing to compensate an insured for a loss covered by a policy, unless the insurer has a proper cause for refusing payment. Id. at ¶ 13. In Fetch, at ¶ 18, we said, as a matter of law, an insurer is not guilty of bad faith for denying a claim if the claim is fairly debatable, or if there is a reasonable basis for denying the claim or delaying payment. Whether an insurer acts in bad faith is ordinarily a question of fact. Id. at ¶ 12; Corwin Chrysler-Plymouth, at 643-44.

[¶ 13] American Family’s policy provided uninsured motorist coverage for compensatory damages for “bodily injury,” which Hartman was legally entitled to recover from Miller. The policy required the bodily injury to be caused by an “accident” arising out of the use of the uninsured motor vehicle, but did not define “accident.” American Family argues it was entitled to judgment as a matter of law on Hartman’s bad-faith claim because further investigation would not have resolved whether the rollover was an accident. American Family argues that issue remained fairly debatable one week before trial and argues a coverage issue that must be submitted to a jury is fairly debatable as a matter of law.

[¶ 14] In Wall v. Pennsylvania Life Ins. Co., 274 N.W.2d 208, 216 (N.D.1979) (quoting Continental Cas. Co. v. Jackson, 400 F.2d 285, 288 (8th Cir.1968)), when the word accident was not defined in an insurance policy, this Court said:

“ ‘The word “accident” as used in this case means happening by chance, unexpectedly taking place, not according to the usual course of things.
“ ‘You are instructed in this regard that if the insured does a voluntary act, the natural and usual, and to be expected result of which is to bring injury upon himself, then ... [an injury] so occurring is not an accident. But if the insured does a voluntary act, without knowledge or reasonable expectation that the result thereof will be to bring injury upon himself ... then a bodily injury ... is caused by accident.’

(Alteration in original.)

[¶ 15] In Corwin Chrysler-Plymouth, 279 N.W.2d at 644, in the context of a bad-faith claim against an insurer, this Court said an insurer is held to know North Dakota law regarding the interpretation of an insurance contract. The insurer in that case claimed the insurance policy did not cover employee embezzlement because the embezzlement did not occur when the policy was in force. Id. at 641-42. This Court said the policy did not define the time when the loss through employee embezzlement must occur, and the insured was held to know that because the policy was ambiguous and would support one interpretation that supported liability and one that did not, the interpretation that supported liability would be adopted. Id. at 642 (citing Wall, 274 N.W.2d at 215). This Court held the trial court’s finding of bad faith was not clearly erroneous, concluding if litigation ensued, the insurer undoubtedly would be liable for the balance of the insured’s claim because the insurer had no valid ground to continue to deny liability after the employee explained she took all but, at most, $500 during the period of coverage. Id. at 644.

[¶ 16] American Family is held to know North Dakota law regarding the meaning of accident in an insurance policy, and the trial court instructed the jury on that definition. Here, Burleigh County Deputy Robert Benson investigated the rollover and interviewed Miller at the scene of the accident. According to Benson, Miller stated he “had turned the corner, accelerated, kicked her down, and began to fishtail and he lost control of the vehicle.” Hartman stated Miller was jealous and upset and talked about death and dying before the rollover, and he intentionally accelerated his pickup and caused it to fishtail. Hartman testified that a few days after the rollover, Miller told her the rollover was an accident and was not done on purpose. According to Burleigh County Deputy Gary Schaffer, Hartman told him that Miller was angry and had intentionally accelerated his pickup and driven wild on purpose. Deputy Schaffer testified that after looking at Deputy Benson’s crash report and speaking with Hartman’s mother, he had concerns about whether the rollover was intentional and believed Miller “was attempting to seriously hurt or kill either himself or [Hartman], or both.” Deputy Schaffer testified that as a result of the rollover, Miller was charged with felony reckless endangerment, which is defined in N.D.C.C. § 12.1-17-03 as creating a substantial risk of serious bodily injury or death to another under circumstances manifesting extreme indifference to the value of human life. Deputy Schaffer also contacted Dickinson Police Officer Charles Rummel after learning that Miller had threatened Hartman in Dickinson in July 1998. Rummel interviewed Miller about the rollover. Miller told Rummel the rollover was not intentional and was an accident. Miller told Rummel that if he had intentionally wanted to harm Hartman, he would have driven the vehicle off a bridge or into a bridge.

[¶ 17] American Family’s in-house counsel raised the accident issue in an internal memo on June 28, 1999, and suggested getting an admission from Miller that he intended to roll the vehicle and to kill or hurt Hartman. American Family has cited no evidence to show it followed that suggestion. Rather, Sharon Many Horses, an American Family claim adjuster, testified Miller gave American Family a December 1998 statement that he “was just screwing around” when the rollover occurred, and she was “not sure how to answer” a question regarding what evidence American Family had to indicate the rollover was intentional.

[¶ 18] Hartman’s initial complaint alleged her bad-faith claim was based on American Family’s refusal to pay benefits in a timely manner. The rollover occurred on November 27, 1998. In July 2000, twenty months after the rollover, Hartman sued American Family for uninsured motorist coverage and for no-fault benefits. Although American Family claimed the rollover was the result of Miller’s intentional conduct and was not an accident, American Family did not bring a separate declaratory judgment action during those twenty months to resolve the uncertainty about coverage. See N.D.C.C. § 32-23-06 (authorizing declaratory judgment to decide coverage or duty to defend); Midwest Cas. Ins. Co. v. Whitetail, 1999 ND 133, ¶ 12, 596 N.W.2d 341 (holding factual disputes about coverage may be decided in declaratory judgment action). Many Horses testified that until Hartman’s lawyer sent a demand to American Family, it had done “nothing” with the file, and Many Horses testified American Family never denied Hartman’s claim.

[¶ 19] The trial court instructed the jury that American Family’s duty to act in good faith in dealing with Hartman included a duty of fair dealing in paying claims, providing defenses to claims, negotiating settlements, and fulfilling its contractual obligations. See Fetch, 2001 ND 48, ¶ 12, 623 N.W.2d 357; Corwin Chrysler-Plymouth, 279 N.W.2d at 643. Whether American Family breached that duty in this case is a question of fact. See Fetch, at ¶ 12; Corwin Chrysler-Plymouth, at 643-44. Although American Family initially may have questioned whether the rollover was an accident, American Family is held to know North Dakota law regarding the meaning of accident in an insurance policy, and its failure to resolve the coverage issue and to require its insured to bring an action twenty months after the rollover is evidence of bad faith. We conclude American Family was not entitled to judgment as a matter of law on Hartman’s bad-faith claim.

C

[¶ 20] Relying on Whitetail, 1999 ND 133, 596 N.W.2d 341, American Family argues the trial court erred in denying its motion for “declaratory judgment” because there was conflicting evidence about whether the rollover was an accident. American Family’s reliance on Whitetail is misplaced. In Whitetail, at ¶ 3, an insurer brought a declaratory judgment action to determine coverage. We concluded there were disputed issues of fact about coverage and duty to defend, and in the context of the declaratory judgment action, we reversed and remanded for a determination of those issues. Id. at ¶¶ 11-15. American Family’s motion for “declaratory judgment” in Hartman’s action against Miller and her insurer was, in effect, a motion for summary judgment on the issue of whether the rollover was an accident. On this record, American Family was not entitled to summary judgment in its favor on that issue.

Ill

[¶ 21] American Family argues the trial court abused its discretion in refusing to offset economic damages awarded to Hartman to the extent of no-fault benefits paid or to be paid by American Family. The jury awarded Hartman $2,200 in past economic damages and $2,750 in future economic damages. American Family claims it paid Hartman $6,940 in no-fault benefits for economic loss for Hartman’s past medical bills and sought a setoff from the $4,950 awarded to her for economic damages. American Family argues it has already paid more in no-fault benefits for economic loss than the jury awarded and claims it is entitled to a setoff under N.D.C.C. § 26.1-41-08 against past and future economic loss to the extent American Family has paid or will pay no-fault benefits.

[¶ 22] Basic no-fault benefits are benefits for economic loss from accidental bodily injury and are limited to $30,000 per person for one accident. N.D.C.C. § 26.1-41-01(2). Economic loss means medical expenses, rehabilitation expenses, work loss, replacement services loss, survivors’ income loss, survivors’ replacement services loss, and funeral, cremation, and burial expenses. N.D.C.C. § 26.1-41-01(7). Under N.D.C.C. § 26.1-41-06(1)(a), Hartman was entitled to basic no-fault benefits from American Family.

[¶23] Miller’s pickup was not insured, and American Family provided Hartman with uninsured motorist coverage under N.D.C.C. ch. 26.1-40. An insurer’s right to reduce damages payable to any insured for uninsured motorist coverage is governed by N.D.C.C. § 26.1-40-15.4(1)(b), which authorizes a reduction for amounts paid or payable for coverage for medical payments and personal injury protection.

[¶ 24] In denying American Family’s request for an offset, the trial court explained there was no double recovery:

Evidence of past medical expenses were not allowed into evidence at trial. American Family claims because of the no-fault payments made on Hartman’s medical expenses, there would be double recovery if the verdict was not offset by the amount paid by American Family for medical expenses. It would be unjust to allow American Family to successfully keep out evidence of medical expenses and allow them to offset any amount awarded by the jury for the expenses presented at trial by Hartman’s lost wages. The Court also agrees with Hartman that future economic damages in the amount of $2,750 awarded by the jury ... cannot be setoff against the amounts paid by American Family under no-fault for past medical expenses. The request of American Family to offset the jury’s award of $4,950 for economic damages is denied.

[¶ 25] Here, the parties do not claim the basic no-fault limit of $30,000 was exhausted. The parties also do not dispute American Family has paid Hartman basic no-fault benefits of $6,940 for past medical expenses. Hartman did not introduce evidence of those past medical expenses at trial, and her evidence of past economic damages was limited to past wage loss. Although Hartman is not entitled to double recovery for economic damages, the trial court’s explanation indicates she has not received a double recovery for economic damages. We are not persuaded the trial court abused its discretion in refusing American Family’s request for an offset.

IV

[¶ 26] In Hartman’s cross-appeal, she argues the trial court erred in dismissing her claim for no-fault benefits for medical expenses to treat post-traumatic stress disorder. Hartman argues post-traumatic stress disorder with physical manifestations is a “bodily injury” under American Family’s no-fault personal injury protection endorsement.

[¶ 27] Under the personal injury protection endorsement, American Family was obligated to pay for medical expenses incurred for “bodily injury.” The policy defined bodily injury to mean “bodily injury to or sickness, disease or death of any person.”

[¶ 28] The trial court granted American Family partial summary judgment on Hartman’s claim for these no-fault benefits, ruling:

In determining whether bodily injury includes PTSD I rely on Anderson v. AMCO Ins. Co., 541 N.W.2d 8 (Minn.App.1995). The definition and coverage for bodily injury, sickness or disease under Anderson case is analogous to North Dakota law and the policy in this case. I find the American [Family] language is not ambiguous and the policy does not cover mental injuries.
The testimony provided by Hartman regarding PTSD and the physical manifestations may relate to the accident, but no evidence related the PTSD to any injury received in the rollover accident. Because the PTSD is not related to any bodily injury received in the accident, it is not covered by the bodily injury language of the policy. I find any PTSD alleged would not be covered under the bodily injury language of the no-fault coverage. I find there is no material issue of fact, and American [Family] is entitled to dismissal of the claim for no-fault benefits as a matter of law.

[¶ 29] In Anderson, 541 N.W.2d at 9, the Minnesota Court of Appeals considered an insured’s claim for no-fault coverage for psychological treatment of panic attacks that the insured claimed arose out of an automobile accident. The court said although the panic attacks produced some physical effects such as “spells during which she feels her heart is racing, her legs are weak, she feels vertiginous and occasionally nauseous, and occasionally her mouth feels dry,” the insured did not seek treatment for those physical effects. Id. at 9 n. 1. The court held Minnesota’s statutory no-fault provisions did not mandate coverage for treatment of the panic attacks. Id. at 9-10. The court also rejected the insured’s argument that the no-fault policy’s definition of “bodily harm” should be construed to include “panic attacks,” in part because the insured did not allege the panic attacks resulted in physical manifestations. Id. at 10-11.

[¶ 30] In Trinh v. Allstate Ins. Co., 109 Wash.App. 927, 37 P.3d 1259, 1260, review denied, 147 Wash.2d 1003, 53 P.3d 1007 (2002), an insured witnessed the death of her best friend when he was hit by an uninsured drunk driver while helping the insured change her flat tire. The insured was diagnosed with post-traumatic stress disorder and sought coverage under the uninsured motorist provisions of her automobile insurance policy. Id. The insurer claimed post-traumatic stress disorder was not a bodily injury under the insured’s uninsured coverage. Id. In Trinh, 37 P.3d at 1262, 1264, the insured alleged the post-traumatic stress disorder was accompanied by physical manifestations, which included weight loss, hair loss, fragile fingernails, loss of sleep, headaches, stomach pains, and muscle aches. The court said:

While other jurisdictions are divided on this issue, many courts have held that allegations of physically-manifested emotional distress fall within “bodily injury” coverage in the insurance context. A law review article observes that “[e]ven courts that have concluded that nonphysical harm does not constitute bodily injury have held otherwise when the emotional distress produces discernible physical symptoms.” And, many jurisdictions that deny “bodily injury” coverage for purely emotional injuries have indicated that there would be coverage if an emotional injury were accompanied by physical manifestations.

Id. at 1262-63 (footnotes omitted).

[¶ 31] The Washington Court of Appeals relied on policy language that defined “bodily injury” to mean “sickness” or “disease” and on persuasive precedent that construed emotional injuries accompanied by physical manifestations to mean bodily injury. Id. at 1264. The court concluded “bodily injury” includes emotional injuries that are accompanied by physical manifestations, and the insured had raised a genuine issue of material fact about whether she was a victim of chronic post-traumatic stress disorder with physical manifestations. Id.

[¶ 32] In Muchow v. Lindblad, 435 N.W.2d 918, 921 (N.D.1989), this Court addressed the bodily harm requirement for a tort claim for negligent infliction of emotional distress and recognized that transitory, non-recurring physical phenomena do not constitute bodily harm, but long and continued physical phenomena may constitute physical illness and bodily harm. Muchow is consistent with the conclusion in Trinh that bodily injury includes emotional injuries accompanied by physical manifestations.

[¶ 33] Here, American Family’s personal injury protection endorsement specifically defined bodily injury to mean “bodily injury to or sickness, disease or death of any person.” Under that definition, we agree with the rationale of Trinh that post-traumatic stress disorder with physical manifestations falls within that definition of bodily injury. We conclude the term, “bodily injury” within the meaning of American Family’s personal injury protection endorsement includes post-traumatic stress disorder accompanied by nontransitory physical manifestations.

[¶ 34] Here, Hartman presented evidence the rollover was a substantial contributing cause of her post-traumatic stress disorder, and her disorder resulted in physical manifestations including vomiting, weight loss, severe headaches, loss of sleep, night sweats, and nightmares. We conclude summary judgment on this issue was not appropriate. We reverse the partial summary judgment and remand for proceedings consistent with this opinion.

V

[¶ 35] Hartman argues she is entitled to attorney fees and costs for this appeal and asks this Court to remand to the trial court to award her additional attorney fees and costs for defending this appeal.

[¶ 36] In Corwin Chrysler-Plymouth, 279 N.W.2d at 643, this Court said an insurer who does not act in good faith in handling an insured’s claim may be liable for all damages and detriment proximately caused by the breach, including attorney fees. Here, the jury decided Hartman was entitled to recover reasonable costs and expenses, including reasonable attorney fees, incurred in bringing this action. The trial court awarded her attorney fees through the jury trial, but denied her attorney fees for post-judgment proceedings. Because we remand to the trial court for further proceedings, the trial court may consider this issue on remand.

VI

[¶ 37] We affirm in part, reverse in part, and remand for proceedings consistent with this opinion.

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


author: MARING, Justice.

text:
    2003 ND 19
    STATE of North Dakota, Plaintiff and Appellee, v. Johnathan HOLZER, aka Jonathon Holzer, Defendant and Appellant.
    No. 20020180.
    Supreme Court of North Dakota.
    Feb. 19, 2003.
    Rehearing Denied March 26, 2003.

      Chad R. McCabe, Bismarck, N.D., for defendant and appellant.
    Julie A. Lawyer, Assistant State’s Attorney, Bismarck, N.D., for plaintiff and ap-pellee.
   MARING, Justice.

[¶ 1] Johnathan Holzer appeals from a criminal judgment entered following a conditional plea of guilty to Possession of Methamphetamine, Possession of Drug Paraphernalia, and Manufacturing Methamphetamine. We affirm.

[¶ 2] On December 11, 2001, Bismarck police officers pulled over a vehicle and subsequently arrested its occupants for possession of drug paraphernalia. One of the occupants, who claimed to be Joshua Steen, was brought to the Bismarck Police Department for processing. WMe at the police department, the man continued to insist his name was Joshua Steen, despite the officers’ doubts. Finally, after being recognized by a police detective, the man was forced to admit he had been lying about his identity and he was Jayson Steen, not Joshua Steen. At the time, Jayson Steen (“Steen”) was subject to an outstanding arrest warrant. In exchange for being released, Steen offered information regarding the operation of a methamphetamine lab.

[¶ 3] Steen told the officer he had been at 224 Connecticut Street the night before, where he had seen approximately two grams of methamphetamine in the bathroom and an eighth of a gram of methamphetamine on the kitchen counter. Steen told the officer the residence was a trailer house belonging to his brother, Joshua Steen, but that Jonathan Holzer (“Holzer”) had kicked Joshua out and was staying there with Joshua’s wife, Wendy Steen. Steen also said there was a brown van belonging to Joshua Steen in front of the residence. Steen told the officer that while he was at the residence, he observed several “masonry [sic] jars” and approximately 10 bottles of ephedrine tablets, which are used in the making of methamphetamine. Finally, Steen stated a batch of methamphetamine had been “cooked” at the residence the night before and Holzer was the one who had done the “cooking.” This information was presented before a magistrate in order to get a search warrant. The officer who testified at the hearing said nothing about Steen lying about his identity or the fact that Steen had offered the information in return for his release.

[¶ 4] Based on the information presented, a search warrant was issued for the residence at 224 Connecticut Street and the brown van located in the front yard. The execution of the warrant led to the arrest of Holzer on charges of drug possession and manufacturing.

[¶ 5] Holzer requested a hearing and moved to suppress the evidence obtained through the search warrant, claiming the warrant was issued in violation of his Fourth Amendment rights and his rights under Article I, Section 8 of the North Dakota Constitution. The trial court judge denied Holzer’s Motion to Suppress. Thereafter, Holzer entered a conditional plea of guilty to the offenses, reserving his right to appeal the suppression issue.

[¶ 6] On appeal, Holzer argues that the evidence obtained with the search warrant should be suppressed because when applying for the warrant, the police officer failed to inform the judge that Steen, the informant, had initially lied about his identity and had provided the information in exchange for his own release. Holzer contends if this information as to Steen’s credibility had been provided, probable cause to issue the warrant would not have existed and the warrant would not have been issued. We disagree.

I

[¶ 7] In Franks v. Delaware, 438 U.S. 154, 155-56, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978), the United States Supreme Court discussed the standard to be applied when there are allegations of false or misleading statements having been made in the application for a search warrant:

[W]here the defendant makes a substantial preliminary showing that a false statement knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in the warrant affidavit, and if the allegedly false statement is necessary to the finding of probable cause, the Fourth Amendment requires that a hearing be held at the defendant’s request. In the event that at that hearing the allegation of perjury or reckless disregard is established by the defendant by a preponderance of the evidence, and, with the affidavit’s false material set to one side, the affidavit’s remaining content is insufficient to establish probable cause, the search warrant must be voided and the fruits of the search excluded to the same extent as if probable cause was lacking on the face of the affidavit.

The Franks standard has been extended to statements that are misleading by omission. See State v. Rangeloff, 1998 ND 135, ¶ 9, 580 N.W.2d 593. In order to succeed on a Franks challenge based on an allegation of omitted information, the defendant must show: “(1) that the police omitted facts with the intent to make, or in reckless disregard of whether they thereby made, the affidavit misleading, ... and (2) that the affidavit if supplemented by the omitted information would not have been sufficient to support a finding of probable cause.” State v. Winkler, 552 N.W.2d 347, 352 n. 1 (N.D.1996) (quoting United States v. Lucht, 18 F.3d 541, 546 (8th Cir.1994)).

[¶ 8] In its order denying Holzer’s Motion to Suppress, the trial court did not make a finding on whether the officer recklessly or intentionally omitted the information, but did find that if the officer’s testimony was supplemented with the omitted information, the informant was still rehable. The trial court concluded that none of the “issues raised by the Defendant would have made a significant enough difference to the Court in issuing the search warrant that they are grounds for suppression of the evidence, ...” We agree with the trial court’s conclusion.

[¶ 9] Under the second part of the test, the court must determine whether the omissions, if added into the warrant application, would have defeated probable cause. See United States v. Reivich, 793 F.2d 957, 962 (8th Cir.1986); see also United States v. Jacobs, 986 F.2d 1231, 1235 (8th Cir.1993) (“[T]he defendant must show that the omitted material would be ‘clearly critical’ to the finding of probable cause.”). This means Holzer would have to show that if the police officer’s testimony would have included the alleged omissions, probable cause would not have existed for the judge to issue the search warrant.

[¶ 10] Under the Fourth Amendment to the United States Constitution and Article I, Section 8 of the North Dakota Constitution, probable cause must be established before a search warrant can be issued. Whether probable cause exists is a question of law. See Rangeloff, 1998 ND 135, ¶ 16, 580 N.W.2d 593. This Court has adopted the totality-of-the-circumstances test to review whether the information presented was sufficient to support a finding of probable cause. See id. In applying the totality-of-the-circumstances test, the United States Supreme Court explained:

The task of the issuing magistrate is simply to make a practical, commonsense decision whether, given all the circumstances set forth in the affidavit before him, including the ‘veracity’ and ‘basis of knowledge’ of persons supplying hearsay information, there is a fair probability that contraband or evidence of a crime will be found in a particular place. And the duty of a reviewing court is simply to ensure that the magistrate had a ‘substantial basis for ... [concluding]’ that probable cause existed.

Illinois v. Gates, 462 U.S. 213, 238-39, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983). The touchstone of probable cause is “probability,” not “certainty.” See Reivich, 793 F.2d at 963.

[¶ 11] This Court has acknowledged that making a determination as to probable cause becomes more difficult when information is presented from an informant. See State v. Birk, 484 N.W.2d 834, 836 (N.D.1992). “The reliability of an informant remains pertinent to a determination of whether or not probable cause exists for the issuance of a warrant based upon that informant’s statement, particularly when that informant is a member of the ‘criminal milieu.’ ” State v. Dahl, 440 N.W.2d 716, 718 (N.D.1989). Steen, the informant in this case, cannot be classified as a citizen informant. See Rangeloff, 1998 ND 135, ¶ 4 n. 3, 580 N.W.2d 593 (stating that a citizen informant is someone who volunteers information without wanting anything in return and who is not at risk or in fear of going to jail). Steen more accurately falls into that category of informants who are “themselves criminals, drug addicts, or even pathological liars.” Dahl, at 718. Reliability for such an informant must be established. Id.

A

[¶ 12] Holzer argues that the omission of the fact Steen lied to officers about his identity would have defeated probable cause if added into the .warrant application. The magistrate who issued the warrant in this case, however, was told that Steen was in a vehicle in which drug paraphernalia and methamphetamine had been found and that there was an outstanding warrant for his arrest. The magistrate, therefore, knew Steen’s credibility was questionable. Any additional information as to Steen’s dishonest behavior would have only confirmed what the magistrate already knew.

B

[¶ 13] Holzer also argues omission of the fact Steen gave his statement in exchange for his own release would have defeated probable cause if added into the warrant application. The United States Court of Appeals for the Eighth Circuit has held: “The omission of the fact that the informant is charged with a crime and is cooperating to gain leniency is not a misrepresentation and is not ‘clearly critical’ to the issuing judge.” United States v. Gladney, 48 F.3d 309, 315 (8th Cir.1995) (citing United States v. Wold, 979 F.2d 632, 634 (8th Cir.1992)). Magistrates issuing warrants know that deals are made with informants, who themselves have been charged. Gladney, at 315. “After all, we expect such judicial officers to be only neutral and detached — not naive and ingenuous.” Reivich, 793 F.2d at 963.

[¶ 14] Further, the information Steen provided was a first-hand account of what he saw at the residence at 224 Connecticut Street, including detailed information regarding the location and amounts of methamphetamine, location and types of drug paraphernalia, and ingredients for manufacturing methamphetamine. Steen’s level of specificity in describing the drug activity that was taking place at the residence made it more likely that the information provided was accurate. See Dahl, 440 N.W.2d at 719-20 (indicating that an informant who presents specific details about a crime and crime scene is more likely to be reliable). We conclude considering the totality of the circumstances, especially the detailed, first-hand knowledge Steen provided, failure to inform the magistrate that Steen had lied about his identity and that he had received a deal did not defeat probable cause to issue the search warrant.

II

[¶ 15] Alternatively, Holzer argues that even if his arguments fail under the Franks analysis, our state constitution can grant greater rights than the United States Constitution does. However, Hol-zer merely argues this point without explaining what greater right he contends our state constitution grants or the basis for the right. We will not consider an argument that is not adequately articulated, supported and briefed.

[¶ 16] We, therefore, affirm the trial court’s Criminal Judgment.

[¶ 17] GERALD W. VANDE WALLE, C.J., WILLIAM A. NEUMANN, DALE V. SANDSTROM, and CAROL RONNING KAPSNER, JJ„ concur.