author: WORKE, Judge.

text:
    STATE of Minnesota, Respondent, v. Barbara Lynn POLSFUSS, Appellant (A05-2108), Allen Ferrozzo, Appellant (A05-2563).
    Nos. A05-2108, A05-2563.
    Court of Appeals of Minnesota.
    Aug. 8, 2006.

      Mike Hatch, Attorney General, St. Paul, MN; and Barry A. Sullivan, William G. Hawkins & Associates, Anoka, MN; and Alina Schwartz, Elliott B. Knetsch, Campbell Knutson, P.A., Eagan, MN, for respondent.
    Richard P. Ohlenberg, Otten & Associates, Burnsville, MN, for appellant Pols-fuss.
    Richard L. Swanson, Chaska, MN, for appellant Ferrozzo.
    Considered and decided by WORKE, Presiding Judge; KALITOWSKI, Judge; and HUDSON, Judge.
   OPINION

WORKE, Judge.

In these consolidated appeals from convictions of DWI, appellants argue that chemical tests should have been suppressed because they were taken under an implied consent law that had been declared unconstitutional in Fedziuk v. Comm’r of Pub. Safety, 696 N.W.2d 340 (Minn.2005), because it did not provide for prompt judicial review. Appellants also argue that decisions in the accompanying implied-consent proceedings, either rescinding the revocation of or reinstating the driver’s license, should have collateral-estoppel effect in criminal proceedings, or should at least be given effect, based on public-policy considerations, in the criminal proceedings. Because the portion of the implied-consent law that was declared unconstitutional does not have any affect on the collecting of evidence, we affirm.

FACTS

Appellant Barbara Lynn Polsfuss

On October 9, 2004, a police officer stopped a vehicle driven by appellant Barbara Lynn Polsfuss because she was speeding. Appellant’s eyes were bloodshot, watery, and glassy; she smelled strongly of an alcoholic beverage; and her speech was slow and slurred. Appellant failed several field sobriety tests and a preliminary breath test. Appellant also admitted that she had had a couple of glasses of wine. The results of a blood test revealed that appellant’s alcohol concentration was .13. Appellant was charged with fourth-degree DWI in violation of Minn.Stat. § 169A.27 (2004) and Minn. Stat. § 169A.20, subd. 1(5) (2004).

On July 18, 2005, appellant’s driver’s-license revocation was rescinded based on the holding in Fedziuk v. Comm’r of Pub. Safety, 696 N.W.2d 340 (Minn.2005). Appellant then moved to suppress the test result and any evidence obtained after the test result was requested based on the fact that her driver’s-license revocation was rescinded. Appellant argued that because she did not have an implied-consent hearing within 60 days, the test results should be suppressed in the criminal proceeding. The district court denied appellant’s motion and the parties agreed to proceed with a stipulated-facts proceeding under State v. Lothenbach, 296 N.W.2d 854 (Minn. 1980). On October 10, 2005, the district court concluded that (1) collateral estoppel did not compel suppression of the blood test, (2) there was no basis for suppressing the blood test, (3) the 93-day delay from the time the implied-consent petition was filed to the hearing date did not affect the collection of evidence, and (4) the implied-consent procedure and the related criminal procedure were not inextricably linked so as to mandate suppression. The district court found appellant guilty of misdemean- or DWI.

Appellant Allen Ferrozzo

On September 11, 2004, a police officer received a report that an intoxicated male was leaving a restaurant in a black vehicle. The officer checked the vehicle’s registration and drove to the registered owner’s residence. The officer approached the vehicle after it entered the garage. While speaking with the driver, appellant Allen Ferrozzo, the officer detected the strong odor of an alcoholic beverage on appellant’s breath and observed that his eyes were watery and glassy, and that his face was flushed. Appellant also admitted to consuming beer. Appellant failed field sobriety tests and a preliminary breath test. The officer read appellant the Minnesota Implied Consent Advisory and appellant took a breath test, which indicated an alco: hoi concentration of .262. Appellant was charged with third-degree DWI, in violation of Minn.Stat. § 169A.20, subd. 1(1), (5) (2004), and Minn.Stat. § 169A.26 (2004), and violation of restricted driver’s license, in violation of Minn.Stat. § 171.09 (2004).

In September 2004, appellant moved to suppress the chemical test pending the outcome of Fedziuk. The district court ruled that appellant failed to show that his due-process rights had been violated and denied the motion. In September 2005, the parties agreed to submit the case to the district court on stipulated facts under Lothenbach. The district court found appellant guilty of third-degree DWI.

ISSUE

Did the district courts err in not suppressing chemical-test results in criminal DWI proceedings when the 2003 amendments to the implied-consent law that removed the requirement for prompt judicial review of a prehearing revocation was rendered unconstitutional?

ANALYSIS

Appellants argue that the district courts erred in not suppressing chemical-test results because the tests were “obtained by implementation of an unconstitutional statute.” Appellants rely on Fedziuk v. Comm’r of Pub. Safety, 696 N.W.2d 340 (Minn.2005), to support their contention that the implied-consent law, which was rendered unconstitutional because of due-process violations, should have the effect of suppressing chemical-test results in criminal DWI proceedings. ‘When reviewing pretrial orders on motions to suppress evidence, we may independently review the facts and determine, as a matter of law, whether the district court erred in suppressing — or not suppressing — the evidence.” State v. Harris, 590 N.W.2d 90, 98 (Minn.1999).

In Fedziuk, the supreme court had to determine whether the 2003 amendments to Minnesota’s implied-consent law violated due process. Fedziuk, 696 N.W.2d at 344. Prior to the 2003 amendments, the provision regarding judicial review of a prehearing revocation in the implied-consent law stated that “[t]he hearing must be held at the earliest practicable date, and in any event no later than 60 days following the filing of the petition for review.” Minn.Stat. § 169A.53, subd. 3(a) (2002). The 2003 amendments deleted the time-frame requirement in which to hold a hearing. Fedziuk, 696 N.W.2d at 346. The supreme court held that the implied-consent law as amended was unconstitutional as violating due process because it removed the requirement for prompt judicial review of a prehearing revocation. Id. at 342. The court severed the unconstitutional provision and revived the version of the implied-consent law that existed immediately prior to the 2003 amendments. Id. at 349.

Appellants’ reliance on Fedziuk to support their argument that the test results should be suppressed in a criminal proceeding because the tests were “obtained by implementation of an unconstitutional statute” is misplaced. First, the implied-consent law was not declared unconstitutional in its entirety in Fedziuk. Only the 2003 removal of the requirement for prompt judicial review of a prehearing revocation from the statute was rendered unconstitutional. Id. at 342. The supreme court revived the version of the implied-consent law that existed immediately prior to the 2003 amendments. Id. Second, the due-process guarantees in a civil implied-consent proceeding are different from the due-process guarantees in a criminal proceeding. A driver’s license is an important property interest and is subject to due-process protections. Kleven v. Comm’r of Pub. Safety, 399 N.W.2d 153, 156 (Minn.App.1987). In this context, due process requires a hearing before a person may be deprived of a driver’s license. Heddan v. Dirkswager, 336 N.W.2d 54, 59 (Minn.1983). This requirement is satisfied by “the opportunity to be heard at a meaningful time and in a meaningful manner.” Id. In the criminal context, due process mandates that criminal defendants be treated with fundamental fairn'ess. State v. Richards, 495 N.W.2d 187, 191 (Minn.1992). It is a violation of fundamental fairness when a -breath test is obtained through coercion. State v. Stumpf, 481 N.W.2d 887, 889-90 (Minn.App.1992). Appellants have not shown that they were coerced into submitting to the chemical tests and have not shown how their due-process rights have been violated.

Appellants next argue that their due-process challenge should be analyzed in accordance with several cases that suppressed test results in criminal proceedings because the drivers’ due-process rights were violated by misleading language in the implied-consent advisory. This line of cases began with McDonnell v. Comm’r of Pub. Safety, 473 N.W.2d 848 (Minn.1991). In McDonnell, the supreme court held that the part of the implied-consent advisory that warned of possible criminal penalties violated the due-process rights of first-time offenders who could not be charged with criminal refusal. McDonnell, 473 N.W.2d at 855; see also State v. Wilkens, 492 N.W.2d 275, 277 (Minn.App.1992) (stating that a due-process claim identical with that in McDonnell was raised because the appellant was a first-time DWI offender who consented to a test after he was read the improper implied-consent advisory). The following year, the court in Stumpf held that “an intoxilyzer test obtained through misleading language in the implied consent advisory ... is a violation of due process.” Stumpf, 481 N.W.2d at 889-90. Appellants’ reliance on this line of cases is also misplaced. In these cases, the advisory read to the drivers was misleading. Here, the advisory did not mislead appellants into involuntarily consenting to taking a chemical test. The constitutional violation identified in Fedziuk related only to review proceedings that would occur only long after the advisory was given and the driver had made his decision.

Appellants also argue that the doctrine of collateral estoppel should preclude the use of the test results in criminal proceedings. But that is not the case because Minn.Stat. 169A.53, subd. 3(g) (2004), states that “[t]he civil hearing under this section shall not give rise to an estoppel on any issues arising from the same set of circumstances in any criminal prosecution.” Appellants argue, however, that the civil and criminal proceedings are so intermingled that it is against public policy to use the test results in a criminal proceeding after a driver prevails in an implied-consent proceeding. But appellants could have been convicted of DWI without the prompt and parallel judicial review required by the pre-2003 implied-consent law. Thus, public-policy considerations do not lead to the conclusion that because a driver is permitted to retain his or her driving privileges a chemical test should not be used in a criminal DWI proceeding.

Finally, appellants suggest that this court should decide that Minn.Stat. 169A.53, subd. 3(g) is unconstitutional as a violation of the doctrine of separation of powers. This argument was not raised in the district court; and therefore, we will not consider the argument now. See State v. Sorenson, 441 N.W.2d 455, 457 (Minn.1989) (stating that this court generally will not consider issues raised for the first time on appeal). And this court recently upheld the constitutionality of Minn.Stat. § 169A.53, subd. 3(g), against an identical constitutional challenge. See State v. Lemmer, 716 N.W.2d 657 (2006).

DECISION

Because the portion of the implied-consent law that was declared unconstitutional by Fedziuk regarding judicial review for a license revocation does not have any effect on the evidence obtained for a related criminal DWI proceeding, the district courts did not err in denying appellants’ motions to suppress the results of their chemical tests.

Affirmed.


source: Caselaw Access Project

author: HUDSON, Judge.

license: Public Domain

text:
    Craig JOHANNS, et al., Respondents, v. MINNESOTA MOBILE STORAGE, INC., Appellant.
    No. A05-1578.
    Court of Appeals of Minnesota.
    Aug. 15, 2006.

      Alex W. Russell, Evening & Weekend Law Offices, St. Paul, MN, for respondents.
    Brian A. Wood, William L. Davidson, Sarah Morris, Lind, Jensen, Sullivan & Peterson, P.A., Minneapolis, MN, for appellant.
    Considered and decided by HUDSON, Presiding Judge; WRIGHT, Judge; and WORKE, Judge.
   OPINION

HUDSON, Judge.

On appeal from a district court decision after a jury’s determination of damages on a special verdict, appellant self-storage facility argues that the district court erred in failing to enforce the unambiguous damage limitation in the parties’ rental agreement under the Minnesota Liens on Personal Property in Self-Service Storage Act, Minn.Stat. §§ 514.970-.979 (2004). In a notice of review, respondents contend that in the event this court holds in appellant’s favor on those arguments, the matter must be remanded so that the district court can determine whether the exculpatory clause is unenforceable because of appellant’s willful violation of law. Respondents also contend that the district court’s grant of summary judgment on several other claims was erroneous. Because (a) the parties’ rental agreement is an unambiguous, valid partial exculpatory contract; (b) the language of the act is unambiguous and permits rental agreements that provide limited liability for, but not total exemption from, damages caused by the owner’s negligence; (c) the district court did not reach the issue of whether the owner’s acts were intentional, which would make the exculpatory clause unenforceable due to a willful violation of law; and (d) respondents failed to present specific legal arguments to support their claim that the district court erred in granting summary judgment on several other claims, we reverse and remand.

FACTS

Respondents were moving and needed to temporarily store some of their personal property. After seeing a television commercial for PODS, self-contained storage units that could be brought to the customer’s address for packing and then transported to a warehouse for storage, respondent Craig Johanns called the 800 number listed in the advertisement. He arranged to lease a unit and gave the operator his current address, telephone number, and credit card information. As he later learned, he had spoken with an employee of PODS, Inc. Appellant is a franchisee of PODS, which does the accounting, builds the storage units, and provides supplies for its franchisees. On November 10, 2001, the storage unit was delivered to respondents’ house. Respondent Mary Johanns signed a rental agreement with appellant to lease the unit for $196.97 per month, and paid for the first month by check. The agreement addressed the owner’s liability for negligence, limited damages that respondents could recover for negligence to $5,000, and, among other provisions, included an exception to the exculpatory provision for willful violations of law. Respondents packed the unit, and appellant brought the unit to its storage facility in late November 2001.

Neither PODS nor appellant received any further payments from respondents. Appellant, who had a statutory lien under Minn.Stat. § 514.972 (2004) against the personal property stored in the facility for unpaid rent, eventually enforced the lien and sold respondents’ property at an auction for $1,305.

When respondents learned of the sale, they sued appellant on a variety of claims. The district court granted summary judgment on most of the claims, but allowed the breach-of-contract and bailment claims to proceed to trial. At the trial, the parties presented evidence, in relevant part, regarding the circumstances concerning the respondents’ failure to make payments, notices allegedly sent to respondents, and the auction. Craig Johanns believed that their payments were being automatically made by credit card. Neither Craig nor Mary Johanns recalled receiving any correspondence from appellant or PODS after the storage unit was picked up until March 2002, when Craig received a letter informing him that the storage unit containing their belongings had been sold at auction on February 21, 2002.

Jacqelin Consentino, the vice president of legal-risk management at PODS, testified that PODS had complied with all statutory requirements in Minnesota to enforce the lien against respondents. On cross-examination, however, a number of discrepancies and problems of proof were revealed.

A jury answered two questions on a special verdict form and determined in relevant part that respondents’ damages were $67,750. The district court then resolved most of the remaining issues. It ruled as a matter of law that appellant failed to show that it complied with the procedures for enforcing the lien pursuant to Minn.Stat. § 514.973 (2004). Next, it determined that the $5,000 limit of damages in the contract was invalid under Minn.Stat. §§ 514.976, subd. 4, 514.978 (2004) and awarded damages of $67,750 as found by the jury. Finally, it noted, but did not resolve, the issue of whether appellant acted intentionally such that the exculpatory clause could not be enforced by appellant. This appeal follows.

ISSUES

I. Is a provision in a rental agreement for self-service storage that limits damages to $5,000 an unambiguous, valid exculpatory clause, and, if so, is the clause unenforceable due to willful violation of law?

II. Does Minn.Stat. § 514.975 (2004) bar a rental agreement that provides limited liability for, but not total exemption from, damages due to the negligence of the owner of the self-service storage facility?

III. Did the district court err in granting summary judgment on respondents’ other claims?

ANALYSIS

I

The first issue we address concerns the parties’ rental agreement in which respondents initialed a provision acknowledging that appellant’s liability is limited to $5,000. The district court, although focusing on the statutory analysis addressed in the second section of this opinion, stated in a footnote in its order that appellant arguably acted intentionally in selling respondents’ property, which would render the exculpatory clause unenforceable. Appellant argues that the exculpatory provision is valid, while respondents contend that the contract paragraph at issue, as well as the rental agreement as a whole, is ambiguous and is not a valid exculpatory clause. Further, respondents contend that if the provision is deemed valid, the matter must be remanded to allow the district court to rule on whether appellant acted intentionally, rendering the exculpatory clause unenforceable.

We first address the validity of the exculpatory provision. “[P]arties to a contract may, without violation of public policy, protect themselves against liability resulting from their own negligence.” Schlobohm v. Spa Petite, Inc., 326 N.W.2d 920, 922-23 (Minn.1982) (footnote omitted). The supreme court has “recognized the validity of exculpatory clauses in certain circumstances [although] they are not favored in the law.” Id. at 923. They are “strictly construed against the benefited party.” Id. “If the clause is either ambiguous in scope or purports to release the benefited party from liability for intentional, willful or wanton acts, it will not be enforced.” Id.

Interpretation of a written contract is a question of law reviewed de novo. Alpha Real Estate Co. of Rochester v. Delta Dental Plan of Minn., 664 N.W.2d 303, 311 (Minn.2003). “[C]ourts are to ascertain and give effect to the intent of the parties.” Republic Nat’l Life Ins. Co. v. Lorraine Realty Corp., 279 N.W.2d 349, 354 (Minn.1979). Whether a contract is ambiguous is a question of law. Blattner v. Forster, 322 N.W.2d 319, 321 (Minn.1982). A contract is ambiguous if it is reasonably susceptible to more than one meaning. Trondson v. Janikula, 458 N.W.2d 679, 681 (Minn.1990). If so, courts may use extrinsic evidence to construe the contract. Blattner, 322 N.W.2d at 321.

The provisions of paragraph 6, labeled “Limitation of Lessor’s Liability; Indemnity,” which contains the $5,000 limitation at issue here, provides as follows:

Lessor and Lessor’s Agents will have no responsibility to Tenant or to any other person for any loss, liability claim, expense, damage to property or injury to persons (“Loss”) from any cause, including, without limitation, Lessor and Lessor’s Agents active or passive acts, omissions, negligence or conversion, unless the Loss is directly caused by Lessor’s fraud, willful injury or willful violation of law. Tenant shall indemnify and hold Lessor and Lessor’s Agents harmless from any loss incurred by Lessor or Lessor’s Agents in any way arising out of Tenant’s use of the Unit or Project. Teriant agrees that Lessor’s and Lessor’s Agents total responsibility for any Loss from any cause whatsoever will not exceed a total of $5,000. By placing Initials Here — , Tenant acknowledges that he understands and agrees to the provisions of this paragraph. Regardless of anything stated in this Section 6 to the contrary and as required by Minnesota Statute Section 514.976 [sic], Lessor is not exempt from liability for damage to Tenant’s personal property caused by Lessor’s negligence.

(Emphasis added.) One of the respondents initialed the paragraph.

Appellant contends that the damage limitation, read as a whole and in the context of the entire contract, indicates the intent of the parties to limit damages for negligence to $5,000 and is not susceptible to more than this one reasonable interpretation. Respondents contend that the language of the contract is ambiguous because, in some places, it is completely exculpatory, while in paragraph 6, there is a liability limit of $5,000. Further, they note that paragraph 6 refers to an incorrect statutory section. Finally, some sections of the contract do not include an exclusion from the release of liability for intentional, willful, or wanton acts; further, paragraph 6 does not specifically exclude liability for intentional acts. They argue that the agreement illegally limits all claims and, at the very least, contradicts itself.

Our review of paragraph 6 and the remainder of the rental agreement reveals no ambiguity as to the limit of appellant’s liability; under its plain language, appellant’s liability for negligence is limited to $5,000. Further, this paragraph explicitly provides an exception for “fraud, willful injury, or willful violation of law.” Willful acts include intentional acts. See Black’s Law Dictionary 1593 (7th ed.1999) (defining “willful” as “voluntary and intentional”). Therefore, respondents’ claim that the contract improperly releases the benefited party from liability fails; the argument that the rental agreement should not be enforced due to ambiguity or improper scope of the exculpatory clause has no merit.

Next, we address whether enforcement of the exculpatory clause will contravene public policy. Schlobohm, 326 N.W.2d at 923. On this issue, a two-prong test is applied.

Before enforcing an exculpatory clause, both prongs of the test are examined, to-wit: (1) whether there was a disparity of bargaining power between the parties (in terms of a compulsion to sign a contract containing an unacceptable provision and the lack of ability to negotiate elimination of the unacceptable provision) ... and (2) the types of services being offered or provided (taking into consideration whether it is a public or essential service).

Id. (citations omitted). In addressing the second prong, “courts consider whether it is the type [of service] generally thought suitable for public regulation.” Id. at 925. These include “common carriers, hospitals and doctors, public utilities, innkeepers, public warehousemen, employers and services involving extra-hazardous activities.” Id. (footnotes omitted). Courts also consider whether the party “seeking exoneration offered services of great importance to the public, which were a practical necessity for some members of the public.” Id. at 926; see Yang v. Voyagaire Houseboats, Inc., 701 N.W.2d 783, 790-91 (Minn.2005) (holding that where company providing houseboat acted as innkeeper providing regulated public service, with duty to protect guests, exculpatory clause not enforceable).

Respondents contend that because self-storage companies may foreclose on the lien and auction property without the involvement of the sheriff, they are performing public duties for which exculpatory-clauses are not appropriate. See Minn. Stat. § 514.973 (providing self-service storage lien must be enforced in same manner as warehouse’s liens pursuant to Minn. Stat. § 336.7-210). While self-service storage facilities are regulated, appellant was not required to accept respondents as patrons, and respondents were not required to assent to unreasonable terms or give up a valuable legal right as a condition precedent. See Schlobohm, 326 N.W.2d at 926. As appellant correctly notes, respondents offered no evidence establishing that appellant precluded them from negotiating the terms of the rental agreement. Further, self-storage facilities are widely available, and respondents make no claims to the contrary. Assuming the damage limitation was unacceptable to respondents, they could have selected a different facility. Thus, there was no element of compulsion or public necessity. See id.; Malecha v. St. Croix Valley Skydiving Chib, Inc., 392 N.W.2d 727, 730 (Minn.App.1986) (declining to find a disparity in bargaining power because skydiving services were available elsewhere in the area and despite the fact that appellant had not been provided with waiver forms until just before the jump), review denied (Minn. Oct. 29, 1986). Consequently, the exculpatory clause did not violate public policy, and it is enforceable.

Finally, we address respondents’ argument that, in the event this court upholds the validity of the partial exculpatory clause, this appeal must be remanded to the district court to resolve the issue of whether the clause is unenforceable because appellant acted intentionally. The district court found that appellant failed to comply with Minn.Stat. § 514.973 (2004), and appellant does not challenge this determination. But the court also stated that appellant arguably acted intentionally in selling respondents’ property but did not make a definitive finding. Appellant contends that there is no evidence it acted intentionally and further asserts that because it did not proceed under the exculpatory clause, respondents’ argument is irrelevant.

As discussed above, the section of the rental agreement that is in dispute limits appellant’s liability for damages to $5,000, “unless the Loss is directly caused by Lessor’s fraud, willful injury or willful violation of law.” This exception is consistent with the rule of law that a party may not release itself from liability for wanton and willful conduct. Beehner v. Cragun Corp., 636 N.W.2d 821, 829 (MinmApp. 2001), review denied (Minn. Feb. 28, 2002); see Arrowhead Elec. Coop., Inc. v. LTV Steel Mining Co., 568 N.W.2d 875, 877 (Minn.App.1997) (remanding to resolve factual issue under exculpatory clause of whether damage was caused by willful acts).

The exculpatory clause provides an exception for, among other things, loss that is directly caused by appellant’s willful violation of law. Here, respondents asserted that appellant’s failure to follow Minnesota law on numerous occasions in connection with the rental agreement provision constitutes willful conduct under which the exculpatory clause is unenforceable. Willful conduct includes “a disregard for governing statutes and an indifference to their requirements, or a careless disregard of statutory requirements.” In re Henry Youth Hockey Ass’n, 511 N.W.2d 452, 456 (Minn.App.1994) (addressing whether willful violation of laws and board rules warrants revocation of gambling license), modified in part on other grounds, 559 N.W.2d 410 (Minn.1994).

Appellant contends that there is no evidence it acted willfully. But the district court stated that “[ajrguably [appellant] acted intentionally in selling [respondents’] property.” Our review of the record demonstrates that the evidence presented a fact issue that must be resolved by the district court.

As discussed above, an owner may enforce its lien using the procedures set out in Minn.Stat. § 336.7-210 (2004). Under this provision, appellant was required to give notice to respondents, including “an itemized statement of the claim, a description of the goods subject to the lien, a demand for payment within a specified time not less than ten days after receipt of the notification, and a conspicuous statement that unless the claim is paid within that time the goods will be advertised for sale and sold by auction at a specified time and place.” Minn.Stat. § 336.7 — 210(b)(1), (2) (2004).

Respondents testified that they did not receive any such notice, even though the PODS attorney testified that respondents had provided PODS with their new address. The PODS attorney was unable to find its copy of the notice allegedly sent to respondents and noted that the company has been archiving and shredding old documents. Computer records did not show that the notice of default had been sent, although they indicated a notice of auction had been sent.

Next, after the expiration of the ten-day period in the notice of default, the owner must publish an advertisement of sale once a week for two consecutive weeks, which “must include a description of the goods, the name of the person on whose account the goods are being held, and the time and place of the sale. The sale must take place at least 15 days after the first publication.” Minn.Stat. § 336.7 — 210(b)(5) (2004). Problems also arose in showing these requirements had been met. First, the undated advertisement listed 12 individuals whose storage units were being sold, with only one general description of goods; second, Craig Johanns’s name was incorrectly listed as “Greg Johanns”; and third, according to the evidence produced by the PODS attorney, a February 7, 2002 data entry indicated that the notice of the time and date of the auction was sent to the customer, and the auction was held on February 21, 2002.

In addition, testimony and evidence indicated PODS tried to contact respondents by telephone several times, but the listed numbers had been disconnected. As the district court noted, on December 21, 2001, respondent talked to PODS to create a new PIN number. One minute later PODS placed a past-due call to respondent to notify respondents that their account was past due, but, inexplicably, was unable to make the call because the number had been disconnected. Further, there was disputed testimony regarding whether appellant was supposed to bill respondents’ credit card rather than waiting for respondents’ monthly check to arrive.

From the disputed evidence, we agree with the district court that there is at least a fact question as to whether PODS engaged in willful conduct that would make the exculpatory clause and its $5,000 limitation unenforceable.

Appellant also contends that the issue is irrelevant because it is not asserting the exculpatory defense on appeal. But appellant is clearly relying on the exculpatory provision that provides it is liable only for $5,000 in damages. As discussed above, this exculpatory provision is valid because, among other things, it does not purport to release appellant from liability for willful injury. Thus, appellant’s argument has no merit.

II

The next issue addressed is the interpretation of the Minnesota Liens on Personal Property in Self-Service Storage Act, Minn.Stat. §§ 514.970-.979 (2004). Specifically, we must resolve the validity of the parties’ rental agreement under the act, and whether it may partially limit, but not totally exempt, the owner’s liability for damages caused by its negligence. A self-storage facility is real property “designed and used only for renting or leasing individual storage space in [a] facility” where the occupants have access to the facility only to store and remove their personal property. Minn.Stat. § 514.971, subd. 2(1) (2004). The owner of the facility and the occupant, i.e., the person who rents the storage space, enter into a written rental agreement establishing the terms and conditions of use. Id., subds. 4, 5. “The owner and occupant may not waive or modify the provisions” of the act. Minn.Stat. § 514.978(2004).

The act requires that the rental agreement disclose the owner’s lien rights in the event the occupant does not pay rent, as well as “the extent and the limits of insurance carried by the owner covering the occupant’s personal property stored in the leased premises.” Minn.Stat. § 514.975 (2004). This section also contains the sentence that gives rise to the controversy in this case: “A rental agreement may not exempt an owner from liability for damages to an occupant’s personal property caused by the owner’s negligence.” Id. The issue presented here is whether the owner may partially, rather than totally, exempt its liability for damages caused by its negligence.

Statutory interpretation is a question of law reviewed de novo. Pietsch v. Minn. Bd. of Chiropractic Exam’rs, 683 N.W.2d 303, 306 (Minn.2004). When interpreting a statute, courts will first examine “whether the language of the statute, on its face, is clear or ambiguous.” Molloy v. Meier, 679 N.W.2d 711, 723 (Minn.2004). “A statute is only ambiguous when the language therein is subject to more than one reasonable interpretation.” Am. Family Ins. Group v. Schroedl, 616 N.W.2d 273, 277 (Minn.2000) (citation omitted). Words and phrases are construed according to their “common and approved usage,” unless they are technical words that have acquired a special meaning or are defined in the chapter. Minn.Stat. § 645.08(1) (2004). “If the words of the statute are ‘clear and free from all ambiguity,’ further construction is neither necessary nor permitted.” Owens v. Water Gremlin Co., 605 N.W.2d 733, 736 (Minn.2000) (citation omitted).

The district court recognized that the self-service storage law was silent as to whether damages could be partially exempted. It noted that Minn.Stat. § 514.975 prohibits an owner from exempting itself from its own negligence and that appellant may have acted negligently in enforcing its lien. The court ruled that permitting the owner to limit damages would modify the law and eviscerate its purpose of carefully regulating foreclosure of the lien under the act to vindicate the due-process rights of the consumer.

In resolving the issue, we initially consider the plain language of the statute. Appellant argues that the plain language of the statute does not prohibit the parties from voluntarily agreeing to limit damages, while respondents contend the language is ambiguous and does not resolve the issue, and that the statutory prohibition includes partial exemption from liability-

The statute does not define “exempt.” See Minn.Stat. § 514.971 (providing definitions for some terms used in act). But as appellant argues, when the legislature sought to preclude contract provisions that partially limit the extent of liability, it has done so explicitly. For example, Minn. Stat. § 300.64, subd. 4 (2004), provides that “the certificate [of incorporation] shall not eliminate or limit the liability of a director” for listed acts and omissions. Id. Other statutory provisions similarly provide that directors’ liability for certain breaches, acts, or omissions shall not be eliminated or limited. Minn.Stat. §§ 67A.17, subd. 3 (2004) (township mutual fire insurance companies); 302A.251, subd. 4 (2004) (business corporations); 308B.465, subd. 2 (2004) (cooperative associations). Respondents cite a reference to “partly exempt” in Minn.Stat. § 297A.81, subd. 2(c) (2004).

Again, we must rely on the plain language of the statute, which prohibits an agreement from exempting an owner from liability for negligence. Had the legislature intended to prohibit the agreements from partially exempting or limiting an owner’s liability, it would have done so. Consequently, we conclude that the parties’ agreement to limit damages to $5,000 is consistent with section 514.975 because it does not release or exempt appellant from all liability, but simply partially exempts its potential exposure to $5,000. Further, knowing that appellant’s liábility was limited, respondents could have purchased property insurance covering any claimed value in excess of $5,000 but chose not to do so. While the district court in a footnote found it doubtful that this type of insurance would provide coverage in these circumstances, without a policy before the court, the issue of whether insurance would cover the present situation cannot be resolved. See, e.g., Lathers v. U-Haul Co. of La., 875 So.2d 839, 842 (La.App. 5 Cir.2004) (addressing whether insurance covering contents of storage unit insured loss, but concluding exclusion for theft loss not evidenced by visible signs of forced entry applied and no coverage available), writ denied, 883- So.2d 1059 (La.2004).

This ruling is consistent with the fact that the owner of the self-storage unit is not an insurer of the goods stored there. A paragraph initialed by one of the respondents states that tenant agrees that if the aggregate value of the property exceeds $5,000, the tenant will show proof of insurance. Further, it provides that the tenant agrees that the space is not suitable for storage of heirlooms or irreplaceable property. Another paragraph, although not initialed by respondents, states that property is stored at the tenant’s risk, that it is the tenant’s sole responsibility to obtain insurance, that the lessor will not obtain insurance for the contents, and that the tenant may obtain insurance from the lessor. See Minn.Stat. § 514.975 (providing rental agreement must provide extent and limit of insurance carried by owner covering personal property stored in facility). In the event that it is determined that respondents’ loss arose from appellant’s negligence rather than its willful acts, the contract limited its liability to $5,000, and the respondents arguably could have obtained insurance to cover them losses. Finally, should the legislature choose to change the statutory scheme, it is well within its powers to do so.

In conclusion, because the plain language of the statute prohibits an agreement totally exempting liability, but does not prohibit a partial exemption from liability, a rental agreement may partially exempt the liability of the owner for negligence, although it may not totally exempt it.

Ill

Finally, in the alternative, respondents raise several issues. Respondents have waived their challenge to dismissal of these claims by failing to specifically present legal argument or authority to support their contention that the district court improperly dismissed them. See Minn. R. Civ.App. P. 128.02(d); City of Cloquet v. Cloquet Sand & Gravel, Inc., 312 Minn. 277, 279 n. 1, 251 N.W.2d 642, 644 n. 1 (1977) (stating that where a party provided minimal explanation of an issue and cites no supporting authority, issue will not be considered). We therefore decline to address them.

DECISION

The decision of the district court ruling that neither the statute nor the rental agreement allow a partial exemption for appellant from liability for damages caused by negligence is reversed, and the matter is remanded for a determination of whether respondents’ loss was directly caused by appellant’s intentional acts.

Reversed and remanded.

      . Appellant does not challenge the district, court's determination that it failed to comply with Minn.Stat. § 514.973 (2004) in enforcing its lien or the jury's determination as to the value of the respondents’ property that had been stored with appellant.


author: ROSS, Judge.

text:
    Diane LORIX, individually and on behalf of all others similarly situated, Appellant, v. CROMPTON CORPORATION, et al., Respondents.
    No. A05-2148.
    Court of Appeals of Minnesota.
    Aug. 22, 2006.

      Garrett D. Blanchfield, Jr., Frances E. Baillon, Reinhardt Wendorf & Blanchfield, St. Paul, MN, for appellant.
    Michael A. Lindsay, Michael Skoglund, Dorsey & Whitney LLP, and James S. Simonson, Gray, Plant, Mooty, Mooty & Bennett PA, Minneapolis, MN, and Ian Simmons, Benjamin G. Bradshaw, O’Mel-veny & Myers, LLP, and J. Andrew Read, Jones Day, Washington, D.C., for respondents.
    Considered and decided by SHUMAKER, Presiding Judge; WILLIS, Judge; and ROSS, Judge.
   OPINION

ROSS, Judge.

This is a case about alleged price-fixing under the Minnesota Antitrust Act in the sale of chemicals used in the tire-manufacturing process. In this appeal from judgment on the pleadings for lack of standing, appellant tire-consumer Diane Lorix argues that the district court erred by applying an incorrect standing standard and by determining that her claimed injuries are too remote to confer standing. We conclude that Lorix lacks standing because she does not allege that she is a participant in the market restrained by the alleged antitrust violations. We therefore affirm.

FACTS

Lorix’s complaint asserts that respondents Crompton Corporation, Uniroyal Chemical Company, Inc., Uniroyal Chemical Company Limited, and Bayer Corporation conspired to fix the price of rubber-processing chemicals that are sold for use in manufacturing automobile tires. Lorix does not allege that she purchased any overpriced chemicals herself. Lorix alleges instead that she purchased tires that had been made using these chemicals and that she overpaid because the tire manufacturers passed the overcharges resulting from respondents’ price-fixing of the chemicals along to her as an ultimate consumer of tires. Lorix purports to represent a class of similarly situated consumers.

Respondents moved for judgment on the pleadings, arguing that because Lorix lacks standing, she has failed to state a claim on which relief can be granted. The district court found that Lorix failed to allege that she is a participant in the allegedly restrained market and that Lorix’s injuries are too remote to confer standing. It granted respondents’ motion and dismissed Lorix’s lawsuit. Lorix’s appeal follows.

ISSUE

Did the district court err by determining that Lorix’s injuries are too remote from the alleged antitrust violation to confer standing and by dismissing Lorix’s claims for lack of standing?

ANALYSIS

Lorix argues that the district court erred by dismissing her antitrust claim against respondents. A district court may dismiss a claim on the pleadings when a plaintiff fails to set forth a legally sufficient claim for relief. Minn. R. Civ. P. 12.03. Courts must accept the allegations in the pleadings as true and draw; all inferences in favor of the non-moving party when considering a motion for judgment on the pleadings. Martens v. Minn. Mining & Mfg. Co., 616 N.W.2d 732, 740, n. 9 (Minn.2000). This court reviews de novo whether the district court erred as a matter of law when the facts relating to standing are undisputed. Conant v. Robins, Kaplan, Miller & Ciresi, L.L.P., 603 N.W.2d 143, 146 (Minn.App.1999), review denied (Minn. Mar. 14, 2000).

Lorix challenges the district court’s determination of her lack of standing. To have standing, a party must have “a sufficient stake in a justiciable controversy.” State by Humphrey v. Philip Morris Inc., 551 N.W.2d 490, 493 (Minn.1996) (citing Sierra Club v. Morton, 405 U.S. 727, 731-32, 92 S.Ct. 1361, 1364-65, 31 L.Ed.2d 636 (1972)). A party has standing either by suffering an injury in fact or when standing is conferred by legislative enactment. Nash v. Wollan, 656 N.W.2d 585, 588 (Minn.App.2003), review denied (Minn. Apr. 29, 2003). Both the state and federal antitrust statutes contain language “broadly granting] standing to maintain private antitrust suits.” Philip Morris Inc., 551 N.W.2d at 495; see also Blue Shield v. McCready, 457 U.S. 465, 472, 102 S.Ct. 2540, 2544, 73 L.Ed.2d 149 (1982) (noting that “the lack of restrictive language reflects Congress’ ‘expansive remedial purpose’ ”).

We will look to construction of federal antitrust law when applying the state statute. In 1971, the Minnesota legislature passed the Minnesota Antitrust Act, codifying most of the pre-1971 federal antitrust caselaw and following most provisions of the federal antitrust act. State by Humphrey v. Alpine Air Prods. Inc., 490 N.W.2d 888, 893 (Minn.App.1992), ajfd by 500 N.W.2d 788 (Minn.1993). Consequently, Minnesota antitrust law should be construed consistently with the federal courts’ interpretation of analogous federal antitrust provisions. Keating v. Philip Morris, Inc., 417 N.W.2d 132, 136 (Minn.App.1987).

We must consider the reach of the Minnesota antitrust statute’s damages provision. That provision states that “[a]ny person ... injured directly or indirectly by a violation of [the Minnesota Antitrust Act] shall recover three times the actual damages sustained.... In any subsequent action arising from the same conduct, the court may take any steps necessary to avoid duplicative recovery against a defendant.” Minn.Stat. § 325D.57 (2004). In 1984, the Minnesota legislature added the words “directly or indirectly” to section 325D.57, providing indirect purchasers a cause of action against antitrust violators. 1984 Minn. Laws ch. 458, § 1. The amendment was a response to federal caselaw that bárred indirect purchasers’ claims under the federal antitrust statute. Keating, 417 N.W.2d at 136 (“The legislative history of this amendment indicates that it was a direct response to the [United State’s Supreme Court’s] Illinois Brick decision.”). Resolution of the issue before us hangs on whether the term “indirectly” may be so broadly applied as to include Lorix’s claims against respondents.

Lorix asserts that she was indirectly injured by respondents’ alleged conspiracy to fix the price of then- rubber-processing chemicals. She concedes that she did not purchase respondents’ chemical products. She argues instead that as a result of respondents’ conspiracy, which allegedly resulted in automobile-tire manufacturers being illegally overcharged when buying chemicals necessary in their manufacturing process, these manufacturers passed the overcharges on to tire purchasers. She alleges that the antitrust statute entitles her to damages because she paid a premium for automobile tires because of these overcharges.

Lorix argues that section 325D.57 confers indirect-purchaser standing to any purchaser indirectly injured by an antitrust violation, however attenuated the link between the antitrust violation and the purchase. Lorix would have us read the ambiguous term, “indirectly,” without any limitation whatsoever. At oral argument, Lorix’s counsel expounded, insisting that even those who purchase used goods would have standing to sue a remote manufacturer if the purchaser paid more for the used goods than she would have absent an antitrust violation. Lorix’s counsel also maintained that even a television purchaser would have indirect-purchaser standing to sue an oil company for antitrust violations if price fixing increased the cost of gasoline, which in turn increased the cost of transportation and ultimately the cost of the television. Counsel went so far as to declare that every Minnesota citizen could bring an antitrust suit against rubber-processing chemical manufacturers because price-fixing resulted in the increased price of tires, which in turn increases the cost of transportation and, therefore, the cost of goods transported by truck.

This argument stretches the term “indirectly” far beyond reason. Antitrust violations always “cause ripples of harm to flow” throughout the economy, but antitrust legislation is not intended “to allow every person tangentially affected by an antitrust violation to maintain an action.” McCready, 457 U.S. at 476-77,102 S.Ct. at 2547. Applying Lorix’s argument, even a garage-sale purchaser of a second-hand desk would have standing to maintain an antitrust action against iron suppliers who sold raw materials to bolt manufacturers, who in turn sold bolts to a hardware wholesaler, who sold hardware to the desk builder, who sold desks to the retailer, who sold a desk to Mr. Doe, who finally unloaded it in the garage sale. Although we acknowledge the “expansive grant of standing” in section 325D.57, see Philip Morris Inc., 551 N.W.2d at 496, we presume that the legislature did not intend such an absurd or unreasonable result. Minn.Stat. § 645.17(1) (2004); Olson v. Ford Motor Co., 558 N.W.2d 491, 494 (Minn.1997) (noting that courts will look beyond the literal meaning of a statute’s words if the plain meaning will produce an absurd result). We reject Lorix’s unlimit-ing construction.

Respondents counter, arguing that to have standing to bring an antitrust claim, an indirect purchaser must be a participant in the allegedly restrained market. We agree. Federal courts have consistently held that an antitrust plaintiff must be a consumer or competitor in the market restrained by alleged antitrust violations. Assoc. Gen. Contractors v. Calif. State Council of Carpenters, 459 U.S. 519, 538-39, 103 S.Ct. 897 908-09, 74 L.Ed.2d 723 (1983) (noting that antitrust legislation protects “the economic freedom of participants in the relevant market”); Brunswick, Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977) (requiring that to recover damages, a plaintiff must suffer an “injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful”); S.D. Collectibles, Inc. v. Plough, Inc., 952 F.2d 211, 213 (8th Cir.1991) (noting that “[a] mere causal connection between the alleged antitrust injury and the plaintiffs alleged harm provides an insufficient basis for recovery” and that “standing is generally limited to actual market participants, that is, competitors or consumers”). Lorix argues that federal antitrust-standing cases are inapposite because Minnesota law extends antitrust standing to indirect purchasers who are explicitly barred from maintaining claims under federal antitrust law. But whether an indirect purchaser is allowed to bring suit is “analytically distinct” from the “more difficult question ‘of which persons have sustained injuries too remote [from an antitrust violation] to give them standing to sue for damages.’ ” McCready, 457 U.S. at 476, 102 S.Ct. at 2546 (emphasis added). Minnesota’s response to federal caselaw barring indirect-purchaser claims does not obviate the requirement that an antitrust plaintiff be a participant or competitor in the market restrained by the alleged antitrust violation. Rather, it extends standing to indirect purchasers in that market.

Lorix’s complaint alleges that respondents conspired to fix the price of rubber-processing chemicals they sold to tire manufacturers and that, as a result, she paid more for the tires made with respondents’ rubber-processing chemicals than she otherwise would have paid. Our standard of review requires that we accept these allegations as true. See Martens, 616 N.W.2d at 740, n. 9. But Lorix fails to allege any facts to allow an inference that she is a participant in the rubber-processing-chemical market, which is the market restrained by respondents’ alleged antitrust violations. We therefore conclude that Lorix lacks standing to maintain an antitrust suit against respondents and that she has therefore failed to state a claim upon which relief can be granted.

DECISION

Because Lorix is not a participant in the market restrained by respondents’ alleged antitrust violations, Lorix lacks standing to sue under the Minnesota Antitrust Act. The district court did not err by entering judgment on the pleadings in respondents’ favor.

Affirmed.


author: CROTHERS, Justice.

text:
    2006 ND 174
    Loretta HUNT, Plaintiff and Appellant v. BANNER HEALTH SYSTEM, a Corporation, Defendant and Appellee.
    No. 20050402.
    Supreme Court of North Dakota.
    July 31, 2006.

      Nicholas B. Hall, Hodny Currie Lawyers, Grafton, N.D., for plaintiff and appellant.
    Robert G. Manly (argued) and Kari R. Reichert (on brief), Vogel Law Firm, Moorhead, MN, for defendant and appel-lee.
   CROTHERS, Justice.

[¶ 1] Loretta Hunt appeals from a district court judgment granting Banner Health System’s motion for summary judgment, dismissing Hunt’s action for wrongful termination. We reverse and remand, concluding there are issues of material fact as to the parties’ intent to create a contract for employment and summary judgment was inappropriate.

I

[¶ 2] Hunt began employment at Wedgewood Manor (“Wedgewood”), a nursing facility in Cavalier, North Dakota, in November 2000. Banner Health System (“Banner”) assumed operation and management of Wedgewood in March 2001.

[¶ 3] On June 14, 2001, Banner provided Hunt with a copy of the “West Region Employee Handbook,” for which Hunt signed a written acknowledgment of receipt. The third paragraph of the “Welcome” page of the Banner employee handbook states:

This handbook describes policies and programs in effect at the time it was approved for printing. However, since policies and programs may be added, deleted or revised at any time, this handbook and other local publications can only provide general descriptions or guides and they should not be regarded as a promise to provide specific terms and conditions of employment. Nothing contained herein shall be construed as a guarantee of continued employment. Banner does not guarantee continued employment to employees and reserves the right to terminate or lay off employees.

(Emphasis added.) The handbook also contained policies and procedures addressing progressive discipline, including the details of an employee’s “conditional period,” during which he or she would not be afforded the progressive disciplinary procedure. Also included under “Management Policies” was a paragraph describing the difference between at-will and permanent employees.

[¶ 4] On March 28, 2002, Hunt was disciplined for allegedly handling a resident roughly. Hunt refused to sign the counseling statement describing the incident and told her supervisor, “Screw you.” Banner subsequently terminated Hunt’s employment. Although Hunt had been disciplined several times during her employment, there is no indication the handbook’s progressive disciplinary procedures were followed in processing Hunt’s termination.

[¶ 5] Hunt filed suit, alleging wrongful termination and breach of contract. Banner moved for summary judgment, arguing there were no material facts in dispute and, as a matter of law, Hunt’s employment was terminable at will. The district court granted Banner’s motion, and Hunt appealed.

[¶ 6] On appeal, Hunt argues the district court erred in granting summary judgment because the employee handbook contains conflicting and ambiguous provisions that created an issue of material fact and were inappropriate for disposition via summary judgment. Banner argues Hunt was presumptively at-will and the handbook presented no issues of material fact to defeat that presumption and, in fact, contained an express disclaimer showing its intent not to create a contract for employment.

II

[¶ 7] Whether the district court properly granted summary judgment is a question of law reviewed de novo on the entire record. Heart River Partners v. Goetzfried, 2005 ND 149, ¶ 8, 703 N.W.2d 330. On appeal, this Court determines whether the information available to the district court precluded the existence of a genuine issue. of material fact and therefore entitled the moving party to summary judgment as a matter of law. Id. “Summary judgment is appropriate against parties who fail to establish the existence of a factual dispute on an essential element of a claim on which they will bear the burden of proof at trial.” Id. A ruling court must consider the substantive evidentiary standard of proof when ruling on a motion, considering whether the trier of fact would find the plaintiffs case was proven by the required quality and quantity of the evidence. Id. at ¶ 9. Generally, whether an employee handbook constitutes a contract is a question of fact. See Osterman-Levitt v. MedQuest, Inc., 513 N.W.2d 70, 72 (N.D. 1994).

[¶ 8] Here, the district court concluded Hunt “was put on clear notice” by the provisions in the welcome page of the Banner handbook, which “explicitly and conspicuously served as a disclaimer that the handbook created no promises related to terms or conditions of employment,” and “evidencfed] the employer’s intent to not alter the at will presumption.” Because no additional evidence was presented by either party to establish intent, the district court determined no issues of material fact existed and summary judgment was appropriate. We disagree.

III

[¶ 9] North Dakota, presumes at-will employment: “An employment having no specified term may be terminated at the will of either party on notice to the other, except when otherwise provided by this title.” N.D.C.C. § 34-03-01.

[¶ 10]' This Court has had numerous opportunities to apply N.D.C.C. § 34-03-01 and discuss the effect an employee handbook has on the statutory at-will presumption. In Bailey v. Perkins Rests., Inc., this Court explained an employee handbook “must be read and construed in its entirety and all of its provisions taken into consideration so that the true intent of the parties is determined.” 398 N.W.2d 120, 121 (N.D.1986). In Bailey, an express statement in the handbook that it should not- “be construed to form a contract” evidenced the employer’s intent to not create a contract, despite a progressive disciplinary procedure also contained therein. Id. at 123. This is virtually identical to the reasoning used in Eldridge v. Evangelical Lutheran Good Samaritan Soc’y, 417 N.W.2d 797 (N.D.1987).

[¶ 11] Dicta in Bailey cited numerous jurisdictions, none of which have a statutory at-will presumption, for their “exception to the presumption of at will employment,” explaining that in those jurisdictions “an employer may be contractually bound by promises, express or implied, in employee handbooks with respect to jo'b security and termination procedures.” 398 N.W.2d at 122. However, the Bailey commentary was not intended to undermine the thrust of our statute. In Bykonen v. United Hosp., 479 N.W.2d 140, 142 (N.D.1992), this Court reiterated the importance of assessing the parties’ intent in determining whether a contract existed and not merely searching the handbook for a disclaimer. In Bykonen, a disclaimer was included in the employee handbook, but there was no disclaimer in the policy manual which contained the relied-upon provisions. Id. This Court stated:

United’s handbook contains express language that the policies summarized therein do not create a contract of employment. It may have been prudent for United to have also included a disclaimer in the policy manual. Nevertheless, its failure to do so does not give rise to a reasonable inference that United intended the policies in the manual to override the presumption of at will employment.

Id.

[¶ 12] The presence of a clear, conspicuous, and unambiguous disclaimer may act as an -“escape hatch” in an employee handbook, virtually undoing other implied promises made in the handbook. See Heng v. Rotech Med. Corp., 2004 ND 204, 688 N.W.2d 389 (holding employer was not bound by progressive disciplinary procedure in employee manual because an explicit and conspicuous disclaimer preserved presumption of at-will employment); Jose v. Norwest Bank North Dakota, 1999 ND 175, 599 N.W.2d 293 (concluding an explicit and conspicuous disclaimer in the manual demonstrated the employer’s intent that the manual be used only as a guide). However, such a disclaimer is not a prerequisite to the holding that an employee manual is not a contract.

[¶ 13] Banner asks us to affirm the district court’s judgment, arguing the statement within its manual that “[n]othing contained herein shall be construed as a guarantee of continued employment” is a sufficiently clear and conspicuous disclaimer to nullify all other provisions and procedures within the handbook. This is contrary to our decision in Osterman-Levitt, 513 N.W.2d at 74, in which summary judgment in favor of the employer was reversed.

[¶ 14] In Osterman-Levitt, the employee handbook contained policies implying permanence or structure to the employer-employee relationship, including a probationary period during which an employee could be terminated without notice, a pension plan program for “permanent” employees, and promotion and re-employment procedures. 513 N.W.2d at 73. In Oster-marir-Levitt, the only evidence of the employer’s intent not to create a contract was part of the handbook terminations section, stating, “Employment at the hospital is based upon mutual consent. Either the employee or the hospital may find it necessary to sever the employment relationship” and a statement that management had “the right to determine and change the size composition and/or qualifications of the work force.” Id. This Court concluded that the statements were ambiguous, creating a question of fact and rendering summary judgment inappropriate, because they could “as easily be construed as consistent with the existence of enforceable contract rights as being inconsistent with their existence.” Id. at 74.

[¶ 15] As in Ostermavr-Levitt, Banner’s argument oversimplifies our summary judgment standard, which requires a determination whether issues of material fact exist. Heart River Partners, 2005 ND 149, ¶8, 703 N.W.2d 330. In the context of these types of cases, the question of material fact is whether or not an employer’s employee handbook or personnel policy constitutes an employment contract that overcomes the at-will presumption. Dahlberg v. Lutheran Social Services, 2001 ND 73, ¶ 13, 625 N.W.2d 241. In examining the handbook or policy manual purported to be a contract, the district court must examine the document as a whole to determine the parties’ intent. Id. Here, the language in Banner’s manual simply states it does not guarantee employment. It does not speak to whether the progressive disciplinary procedures will be followed or whether Banner and its employees are contracting on any other aspect of the employment.

[¶ 16] However, Hunt misconstrues our case law when she argues that preservation of the at-will presumption is only accomplished with bold-faced and highlighted disclaimers containing the magic words “This is not a contract.” See Olson v. Souris River Telecommunications Coop., Inc., 1997 ND 10, 558 N.W.2d 333. In Bailey, we stated that the presence of a clear and conspicuous disclaimer in a handbook will operate to preserve the presumption of at-will employment. Bailey, 398 N.W.2d at 123; see also Bykonen, 479 N.W.2d at 142. In Heng, we said: “When provisions in the employee policy manual expressly state that it does not create a contract, the employee is put on clear notice that the manual preserves the presumption of employment at will.” 2004 ND 204, ¶ 13, 688 N.W.2d 389. This language, however, should not be misunderstood to mean that an employer may only escape having his handbook or policy manual construed to be a contract of employment if it includes a clear and conspicuous disclaimer. If, upon consideration of the document as a whole, the handbook or policy manual does not evidence an intent to contract to overcome the at-will presumption, the absence of a clear and conspicuous disclaimer is not controlling. The presence of a disclaimer acts as a factor in an examination of the intent of the document as a whole. The court still is required to examine the document to determine the intent of the parties. When the disclaimer clearly, conspicuously, and unambiguously preserves the at-will presumption and no other evidence overcomes the at-will presumption, the disclaimer will be controlling.

[¶ 17] Here, we conclude Banner’s policies and procedures cannot be read to establish, as a matter of law, that the parties intended to overcome the statutory at-will presumption. The parties’ intent is not made more obvious by reading the so-called “disclaimer.” Indeed, what Banner argues is a disclaimer only conveys that the employment is not guaranteed. It does not indicate whether employment is contractual or at-will. Nor does the absence of a clear and conspicuous disclaimer automatically indicate that the policies and procedures constitute a contract. The district court’s decision focused almost entirely on the sufficiency of the disclaimer and did not take the broader approach of interpreting the handbook as a whole to determine what the parties intended by the handbook.

IV

[¶ 18] Summary judgment was improper because the ambiguities in the handbook created a question of material fact whether the handbook was intended by the parties to establish required terms of the employment relationship. We therefore reverse the judgment and remand this case to district court.

[¶ 19] GERALD W. VANDE WALLE, C.J., THOMAS J. SCHNEIDER, D.J., MARY MUEHLEN MARING, and DALE V. SANDSTROM, JJ., concur.

[¶ 20] The Honorable THOMAS J. SCHNEIDER, D.J., sitting in place of KAPSNER, J., disqualified.


author: SANDSTROM, Justice.

text:
    2006 ND 176
    Debora HENG, Plaintiff and Appellee v. ROTECH MEDICAL CORPORATION and PSI Healthcare, Inc., d/b/a Arrowhealth Medical Supply, Defendants and Appellants.
    No. 20050311.
    Supreme Court of North Dakota.
    Aug. 2, 2006.

      Kirsti Broeder Hourigan (argued) and Patricia R. Monson (on brief), Nilles, Ilvedson, Stroup, Plambeck & Seibo, Ltd., Fargo, N.D., for plaintiff and appellee.
    Matthew D. Greenley (argued) and Adele Hedley Page (appeared), Page Law Firm, LLC, Fargo, N.D., for defendants and appellants.
   SANDSTROM, Justice.

[¶ 1] Rotech Medical Corporation and PSI Healthcare, Inc., doing business as Arrowhealth Medical Supply (collectively “Arrowhealth”), appealed from a judgment awarding Debora Heng $35,195 in damages for her retaliatory discharge claim against the companies and $220,762.92 for her attorney fees, costs, and disbursements. We affirm the award of damages and attorney fees, but we reverse the award of costs insofar as it includes mediation and electronic legal research fees.

I

[¶ 2] Arrowhealth is a medical equipment company that provides on-site setup of home oxygen concentrators and portable liquid oxygen units in North Dakota and other states. Arrowhealth allowed its service technicians, who were not licensed healthcare specialists or respiratory therapists, to set up home oxygen concentrators for its North Dakota patients, after which a respiratory therapist followed up to perform a patient assessment. On August 10, 2001, Heng was hired to manage Arrow-health’s Fargo office. Adam Blumenshein was the regional manager and Heng’s immediate supervisor during her employment.

[¶ 3] In November 2001, Arrowhealth hired Michael Jacobson as a service technician. During his interview, Jacobson asked Heng whether it was legal to have service technicians assemble oxygen systems and instruct patients on their use, because his previous employer had prohibited him from performing those duties as a service technician. Heng told Jacobson that she believed it was legal, and after-wards asked Blumenshein, who told her Arrowhealth’s use of service technicians in this manner complied with North Dakota regulations. Jacobson and another employee continued to question the legality of the practice, and on December 19, 2001, Heng met in Duluth, Minnesota, with Blu-menshein and Julie Johnson, who was a regional director of clinical and marketing for Arrowhealth. Heng brought the subject up at the meeting, and after reading the regulation, Blumenshein and Johnson both said Arrowhealth was in compliance.

[¶ 4] After the meeting, Heng was still concerned that Arrowhealth was violating the law and sought further clarification. On December 21, 2001, Heng called the North Dakota Respiratory Care Board and talked to Board Chairman David Mugge-rud. Heng read the job description for service technicians to Muggerud, and he told her Arrowhealth’s practice of having service technicians assemble oxygen systems and instruct customers in their use violated N.D. Admin. Code § 105-03-01-02, which provides:

Home medical equipment and delivery. North Dakota Century Code chapter 43-42 prohibits the setup and instruction of medical devices related to the practice of respiratory care, gases, and equipment by a nonlicensed health care professional. The delivery and maintenance of medical devices related to the practice of respiratory care, gases, and equipment by a nonlicensed health care professional for the expressed purpose of self-care by a patient or gratuitous care by a friend or family member in the home or extended care facility is permitted.
This maintenance or delivery by the nonlicensed person does not include performing patient assessment, having direct patient contact or patient care relating to home respiratory care, or representing oneself as a certified or registered respiratory care practitioner.

Heng immediately relayed Muggerud’s opinion to Johnson, the regional director of clinical and marketing, who told Heng that she should stop having service technicians assemble oxygen delivery systems or instruct customers for the time being, and that she would contact regional manager Blumenshein about the issue. Heng ordered the Fargo office employees to discontinue the practice for North Dakota customers.

[¶ 5] On December 26, 2001, Heng telephoned Blumenshein while he was on vacation for clarification on how to handle company compliance with the regulation on a long-term basis. Blumenshein told Heng to violate the regulation if necessary and have drivers perform the setups. He expressed displeasure with the regulation and its effect on the company’s contract with the Veterans Administration, which comprised almost 70 percent of Arrow-health’s business in Fargo. Blumenshein was confident that the company’s legal counsel could eventually work out any problems.

[¶ 6] On January 3, 2002, Blumenshein and Johnson met with Heng and other members of the staff at Arrowhealth’s Fargo office. They discussed how the Fargo office was going to ensure compliance with the regulation. Blumenshein also informed Heng she needed to be more friendly with the marketing person at the Fargo office for the office to succeed. On January 18, 2002, Blumenshein went to the Fargo office and terminated Heng’s employment. According to Blumenshein, he terminated Heng because she created a hostile work environment and alienated referral sources.

[¶ 7] Heng sued Arrowhealth in July 2002, alleging breach of contract, retaliatory termination in violation of N.D.C.C. § 34-01-20, and intentional infliction of emotional distress. The district court granted Arrowhealth summary judgment dismissal of Heng’s retaliatory termination and breach of contract claims, and Heng voluntarily dismissed her claim for intentional infliction of emotional distress. In Heng v. Rotech Med. Corp., 2004 ND 204, ¶¶1, 37, 38, 688 N.W.2d,389 (“Heng /”), we affirmed the summary judgment dismissal of the breach of contract claim, but concluded there were disputed issues of material fact on the retaliatory discharge claim that precluded summary judgment. We reversed the judgment insofar as it dismissed the retaliatory discharge claim and awarded Arrowhealth attorney fees based on that claim, and remanded for further proceedings. Id. at ¶ 39. Following a bench trial on remand, the district court ruled in favor of Heng on her retaliatory discharge claim, awarded her $35,195 in damages, and ordered Arrowhealth to pay Heng $220,762.92 for her attorney fees, costs, and disbursements.

II

[¶ 8] Arrowhealth argues the modified burden-shifting test based on McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and adopted by this Court in Schweigert v. Provident Life Ins. Co., 503 N.W.2d 225, 229 (N.D.1993), for purposes of analyzing claims under the North Dakota Human Rights Act, N.D.C.C. ch. 14-02.4, should not be applied to retaliatory discharge claims brought under N.D.C.C. § 34-01-20. According to Arrowhealth, the modified McDonnell .Douglas test, applied in conjunction with N.D.R.Ev. 301, “usurps the ultimate question of retaliation from the district court.”

[¶ 9] We do not address issues raised for the first time on appeal. See, e.g., Edwardson v. Lauer, 2004 ND 218, ¶ 9, 689 N.W.2d 407. As we said in Chapman v. Chapman, 2004 ND 22, ¶ 7, 673 N.W.2d 920 (internal quotations and citations omitted):

One of the touchstones for an effective appeal on any proper issue is that the matter was appropriately raised in the trial court so it could intelligently rule on it. The purpose of an appeal is to review the actions of the trial court, not to grant the appellant an opportunity to develop and expound upon new strategies or theories.

[¶ 10] In Heng I, 2004 ND 204, ¶ 36 n. 1, 688 N.W.2d 389, we noted “[t]he parties apparently agreed, and therefore we will assume for purposes of reviewing the summary judgment, that the McDonnell Douglas rule applies to a retaliatory discharge claim under N.D.C.C. § 34-01-20.” In its trial memorandum on remand, Arrow-health stated that “[a] claim under N.D.C.C. § 34-01-20 is analyzed under the McDonnell Douglas burden-shifting framework,” citing to Dahlberg v. Lutheran Soc. Servs., 2001 ND 73, ¶ 31, 625 N.W.2d 241. In Dahlberg, at ¶ 31 n. 3, this Court noted that the district court in that ease analyzed the plaintiffs retaliation claim under the McDonnell Douglas burden-shifting framework, and because the issue had not been raised, we refused to “decide the applicability of Schweigert to a claim for retaliation under 'N.D.C.C. § 34-01-20.” Several paragraphs later in its trial memorandum, Arrowhealth asserted, “At all times, Plaintiff bears the burden of showing that her termination was motivated by retaliation for protective conduct,” again citing to Dahlberg, at ¶ 31. Arrowhealth did not contend in the district court that the modified McDonnell Douglas burden-shifting framework does not apply to retaliatory discharge claims under N.D.C.C. § 34-01-20. Although Arrowhealth asserts that its vague allegations in its trial memorandum are sufficient to raise the issue for review, the district court obviously did not view these allegations as challenging the applicability of the modified burden-shifting analysis to retaliatory discharge claims, because it did not address the issue. Because Arrowheath failed to raise this issue in the district court, we do not address it.

III

[¶ 11] Arrowhealth challenges several of the district court’s findings and conclusions.

[¶ 12] North Dakota’s “whistle-blower” statute, N.D.C.C. § 34-01-20(l)(a), authorizes an employee to bring a civil action for retaliatory termination if the employer discharges the employee because the employee “in good faith, reports a violation or suspected violation of federal, state, or local law, ordinance, regulation, or rule to an employer, a governmental body, or a law enforcement official.” To establish a prima facie case for retaliatory discharge under the statute, the employee must show (1) the employee engaged in protected activity; (2) the employer took adverse action against the employee; and (3) the existence of a causal connection between the employee’s protected activity and the employer’s adverse action. Dahlberg, 2001 ND 73, ¶ 34, 625 N.W.2d 241. If the employee establishes a prima facie case, the modified McDonnell Douglas burden-shifting framework under which this case was tried requires the employer to prove by a preponderance of the evidence that it had a legitimate, nonretaliatory reason for terminating the employee’s employment. Heng I, 2004 ND 204, ¶36, 688 N.W.2d 389.

[¶ 13] Whether an employee has established a prima facie case of retaliatory discharge is a question of law fully reviewable on appeal. Kachmar v. Sun-Gard Data Sys., Inc., 109 F.3d 173, 177 (3rd Cir.1997); Baker v. Wilmington Trust Co., 320 F.Supp.2d 196, 200 (D.Del.2004); Johnston v. Henderson, 144 F.Supp.2d 1341, 1355 (S.D.Fla.), ajfd, 277 F.3d 1380 (11th Cir.2001). Once an employee presents evidence from which a rational factfin-der could find that the employee engaged in protected activity, the employer took adverse action against the employee, and the existence of a causal connection between the employee’s protected activity and the employer’s adverse actions, those questions, as well as the question whether the employer’s discharge of the employee was motivated by a legitimate reason or an unlawful reason, are questions of fact. Heng I, 2004 ND 204, ¶¶ 20, 34, 37, 688 N.W.2d 389. Under N.D.R.Civ.P. 52(a), findings of fact “shall not be set aside unless clearly erroneous.” A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if no evidence exists to support the finding, or if, on the entire record, we are left with a definite and firm conviction the district court made a mistake. Edward H. Schwartz Constr., Inc. v. Driessen, 2006 ND 15, ¶ 6, 709 N.W.2d 733. A district court’s choice between two permissible views of the weight of the evidence is not clearly erroneous, and our viewing the evidence differently does not entitle us to reverse the district court. Brandt v. Somerville, 2005 ND 35, ¶ 12, 692 N.W.2d 144. On appeal, we do not reweigh conflicts in the evidence, and we give due regard to the district court’s opportunity to judge the credibility of the witnesses. Id.

A

[¶ 14] Arrowhealth argues the district court erred in concluding that Heng established a prima facie case. Specifically, Ar-rowhealth contends the evidence is insufficient to support the court’s findings that Heng’s report of the violation of the regulation to her employer was made in good faith and that her termination from employment was causally related to a good-faith report of a violation of law.

[¶ 15] In Dahlberg, 2001 ND 73, ¶ 36, 625 N.W.2d 241 (internal citation omitted), we quoted from the Minnesota Supreme Court’s decision in Obst v. Microtron, Inc., 614 N.W.2d 196, 202 (Minn.2000), regarding the reporting requirement of the whistle-blower statute:

In order to determine whether a report of a violation or suspected violation of law is made in good faith, we must look not only at the content of the report, but also at the reporter’s purpose in making the report. The central question is whether the reports were made for the purpose of blowing the whistle, i.e., to expose an illegality. We look at the reporter’s purpose at the time the reports were made, not after subsequent events have transpired.

[¶ 16] The district court found that Heng believed Arrowhealth was not complying with North Dakota respiratory care regulations, that she informed regional manager Blumenshein and regional director Johnson of her belief, and that she continually sought clarification from them on how to effectuate corporate compliance with the regulation. The court reasoned that “[a]s the supervisor of the service technicians who are actually violating the regulation [Heng] faced potential consequences for regulation violations or possible patient healthcare concerns due to this practice” and that Heng’s “report of this violation was virtually mandated by [Ar-rowhealth’s] code of conduct, employee handbook and compliance training video.” The court found “no evidence that [Heng] made the report for purposes other than to assure company compliance with North Dakota law.” Although Arrowhealth presented evidence that could be viewed as bad faith on Heng’s part, there is also substantial contrary evidence in the record to support the court’s finding. Heng testified she reported the violation out of concern for Arrowhealth’s oxygen patients, which included her mother before her death. A friend Heng consulted, who is a judge in Minnesota, testified that Heng was concerned about the effect of Arrow-health’s violation on its patients and that he encouraged her to research the matter further and “get it resolved.” We conclude the district court’s finding that Heng’s report of the violation was made in good faith is not clearly erroneous.

[¶ 17] We also conclude the district court’s finding of a causal connection between Heng’s reports of unlawful activity and her termination is not clearly erroneous. In Heng I, 2004 ND 204, ¶ 28, 688 N.W.2d 389 (internal citations omitted), this Court said circumstantial evidence may provide an inference of causation in a retaliatory discharge case:

Proximity in time between the protected activity and the adverse employment action is “particularly significant.” The fact that the employee’s complaints were directed toward or involved the person who ultimately fired her may also provide an inference that the adverse action was related to the protected activity.

See also Anderson v. Meyer Broad. Co., 2001 ND 125, ¶¶ 35, 36, 630 N.W.2d 46. In reversing the summary judgment in this case, we also ruled “a fact-finder could infer Heng’s firing was reasonably proximate to her reports of suspected violations.” Heng I, at ¶ 29.

[¶ 18] The trial court found a causal connection based on “Blumenshein’s reaction to the fact that the North Dakota office would have to comply with the North Dakota regulation, his concern on how this would impact the work being done for the VA cont[r]act (which his company had obtained through a low bid), his direction to [Heng] to violate the regulation if she had to and the proximity in time between [Heng’s] reports and her firing.” There is evidence that using respiratory therapists instead of service technicians to perform setups and provide education services would be more costly to Arrowhealth. The court noted that Heng’s termination occurred only 13 working days after she, “for probably the second or third time,” reported the violation at the December 19, 2001, meeting, and Blumenshein had been on vacation from December 20, 2001, to January 2, 2002. Blumenshein, in a tape-recorded conversation with Heng, said he “hate[d]” the effect the regulation would have on the Veterans Administration contract, the state regulation was a “joke,” Arrowhealth’s lawyers would take it “to a higher level,” and state regulators “would get hit upside the head with a hammer” over their interpretation of the regulation. The circumstantial evidence, considered in its totality, supports the district court’s finding of a causal connection between Heng’s good-faith report of illegal activity and her termination.

[¶ 19] We conclude the district court did not err in concluding that Heng established a prima facie case.

B

[¶ 20] Arrowhealth argues the district court erred in finding it failed to prove that it terminated Heng for legitimate, nonretaliatory reasons.

[¶ 21] In Heng 1, 2004 ND 204, ¶37, 688 N.W.2d 389 (citations omitted), we explained:

The [McDonnell Douglas ] rule explicitly governs the burden of persuasion at trial and creates a presumption of wrongful employment activity if the employee presents a prima facie case. The ultimate question for the factfinder is whether the employer’s adverse action was motivated by a legitimate reason or an unlawful reason. By presenting a prima facie case of retaliatory discharge, the employee has created a genuine issue of material fact on the question of why she was fired, and the employer’s alleged nonretaliatory reasons for the termination merely go to that question of fact. Accordingly, if the employee has presented a prima facie case by presenting evidence from which the factfinder could find she engaged in protected activity, the employer took adverse action, and there was a causal connection between the activity and the adverse action, the employer’s presentation of evidence of a legitimate, nonreta-liatory reason for its action merely creates an issue of fact,....

[¶ 22] Arrowhealth introduced evidence that regional manager Blumenshein was aware of nine behavioral incidents involving Heng. These incidents concerned her strained relationship with another Fargo office employee, a referral source who told Blumenshein she was upset by the way Heng treated her during an office visit, and a “volatile conversation” Heng had with Mark Rye, a Veterans Administration employee and referral source. On the basis of these incidents, Arrowhealth contended Heng was terminated because she caused a hostile work environment and alienated referral sources. However, the district court found Arrowhealth’s stated reasons for terminating Heng were pretex-tual. The court found that Blumenshein had failed to follow any of the disciplinary procedures contained in Arrowhealth’s employee handbook and' had failed to conduct an investigation into the complaints as called for by the handbook. The court found that, had there been an investigation, Arrowhealth would have learned “the stated reasons for [Heng’s] termination did not exist[].” The court found that Heng “did not alienate the Veterans Administration as a referral source,” that Heng’s “supposed, failure to communicate with [the Fargo office employee] was a result of ... Blumenshein telling [Heng] not to talk to her,” and that Heng’s treatment of the referral source was merely a “miscommu-nication [that] could easily have been cleared up.” The court further found that “the office hostility that was cited had existed prior to [Heng’s] hiring and seemed centered on another employee rather than [Heng].” These findings are supported by the evidence.

[¶ 23] The district court reasoned that, “[w]hile [Arrowhealth’s] employees’ handbook gives [Heng] no contractual rights, [Arrowhealth’s] total disregard for company discipline policy evidences motivation for terminating [Heng] other than the reasons stated,” and that “[Arrowhealth’s] rush to terminate [Heng] without any meaningful analysis of the situation, is strong evidence of the pretextural [sic] nature of [Arrowhealth’s] reasons for terminating [Heng].” An employer’s failure to follow its own policies may support' an inference of pretext, see Floyd v. State of Missouri Dept. of Soc. Servs., 188 F.3d 932, 937 (8th Cir.1999); Young v. Warner-Jenkinson Co., Inc., 152 F.3d 1018, 1024 n. 6 (8th Cir.1998), but not when the departure in policy is applied to all employees. See Floyd, at 937; Chock v. Northwest Airlines, Inc., 113 F.3d 861, 864-65 (8th Cir.1997). Although Blumenshein testified that he had never “followed Arrowhealth’s progressive discipline policy,” the ' district court did not find his testimony particularly credible. The court specifically noted in its decision that “Blumenshein, admittedly, has a bad memory.”

[¶ 24] Having reviewed the ■ evidence, we conclude the district court’s finding that Arrowhealth failed to meet its burden of proving it terminated Heng for nonreta-liatory reasons is not clearly erroneous.

IV

[¶ 25] Arrowhealth argues it was prejudiced by the district court’s exclusion of deposition testimony it offered in evidence during the course of the trial.

[¶ 26] In its pretrial statement, Arrow-health indicated it would call Johnson, the regional director of clinical and marketing, and Rye, a Veterans Administration employee and referral source, as witnesses. Heng’s counsel requested Arrowhealth’s counsel to make Johnson, a Minnesota resident who could not be subpoenaed, available to testify during Heng’s case in chief, but Arrowhealth’s counsel refused. The district court granted Heng’s counsel’s motion to read portions of Johnson’s deposition testimony into the record, but denied Arrowhealth’s motion to read additional portions of her deposition testimony at that time. The court ruled Arrowhealth could not introduce its portions until the company presented its defense. After excerpts of Johnson’s deposition were read during Heng’s case in chief, the court nevertheless offered Arrowhealth’s counsel an opportunity to introduce additional excerpts, but she declined, stating, “I’ll deal with it through my witness.” Later during the trial, Arrowhealth’s counsel informed the court that Rye would not be called as a witness. The court granted Heng’s counsel’s motion to introduce portions of Rye’s deposition, but did not allow Arrowhealth’s counsel to introduce the portions of Rye’s deposition that counsel preferred.

[¶ 27] The admission of deposition testimony under N.D.R.Civ.P. 32(a) lies within the district court’s discretion, and reversal is appropriate only upon a clear showing that the court abused its discretion. Fed. Deposit Ins. Corp. v. Jahner, 506 N.W.2d 57, 59 (N.D.1993). A court abuses its discretion when it acts arbitrarily, unconscionably, or unreasonably, or when its decision is not the product of a rational mental process. Davis v. Killu, 2006 ND 32, ¶ 6, 710 N.W.2d 118. Even when a court commits an error on an evidentiary matter, “[n]o error in either the admission or the exclusion of evidence ... is ground for granting a new trial or for setting aside a verdict or for vacating, modifying or otherwise disturbing a judgment or order, unless refusal to take such action appears to the court inconsistent with substantial justice.” N.D.R.Civ.P. 61; see also N.D.R.Ev. 103(a) (“Error may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected”).

[¶ 28] On appeal Arrowhealth asserts only that the “rulings by the court were arbitrary and prejudicial,” without identifying the portions of the depositions they sought to introduce and without explaining how the court’s exclusion of this evidence prejudiced its defense. We conclude the district court did not abuse its discretion in excluding this deposition testimony.

V

[¶ 29] Arrowhealth argues the district court .erred in awarding Heng $207,147.70 for her attorney fees.

[¶ 30] Under N.D.C.C. § 34-01-20(3), a “court may award reasonable attorney’s fees to the prevailing party as part of the costs of litigation.” We review a district court’s decision on attorney fees under an abuse-of-discretion standard. See Vandall v. Trinity Hosps., 2004 ND 47, ¶ 32, 676 N.W.2d 88; City ofMedora v. Golberg, 1997 ND 190, ¶ 18, 569 N.W.2d 257. The factors listed in N.D.R. Prof. Conduct 1.5(a) are intended to guide a district court in determining the reasonableness of an award of attorney fees:

(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) The fee customarily charged in the locality for similar legal services;
(4) The amount involved and the results obtained;
(5) The time limitations imposed by the client or by the circumstances;
(6) The nature and length of the professional relationship with the client;
(7) The experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) Whether the fee is fixed or contingent.

When determining the reasonableness of attorney fees, all factors must be considered, and no single factor controls. T.F. James Co. v. Vakoch, 2001 ND 112, ¶23, 628 N.W.2d 298.

[¶ 31] The record reflects that the district court considered all factors and the lodestar formula, see Golberg, 1997 ND 190, ¶¶ 19-21, 569 N.W.2d 257, in calculating the amount of attorney fees awarded to Heng. The court deducted those fees incurred solely for litigating the intentional infliction of emotional distress and breach of contract claims and deducted fees incurred by a “second chair” counsel during the trial. The court further considered that Arrowhealth’s counsel billed the company in excess of $200,000 in defending the action. A comparison of hours and rates charged by opposing counsel is probative of the reasonableness of a request for attorney fees by prevailing counsel. Gol-berg, at ¶20. We conclude the district court did not abuse its discretion in awarding Heng $207,147.70 for her attorney fees.

VI

[¶ 32] Arrowhealth argues the district court erred in taxing mediation fees and electronic legal research fees as allowable costs.

[¶ 33] Costs and disbursements are governed by N.D.C.C. §§ 28-26-06 and 28-26-10. Courchene v. Delaney Distributors, Inc., 421 N.W.2d 811, 815 (N.D.1988). An award of costs under N.D.C.C. § 28-26-10 is discretionary, and a district court’s decision on an award of disbursements under N.D.C.C. § 28-26-06 will be overturned on appeal only if an abuse of discretion is shown. Riemers v. Anderson, 2004 ND 109, ¶ 14, 680 N.W.2d 280; Andrews v. O’Heam, 387 N.W.2d 716, 732 (N.D.1986).

A

[¶ 34] Arrowhealth contends the district court erred in awarding Heng $1,281.50 in mediation fees as a part of her costs and disbursements.

[¶ 35] Although some courts have concluded that mediation fees are recoverable litigation costs under specific statutory provisions regarding costs, see, e.g., Miller v. Forsyth Memorial Hosp., Inc., 618 S.E.2d 838, 843 (N.C.App.2005); McConnell v. Mothers Work, Inc., 131 Wash.App. 525, 128 P.3d 128, 130 (App.2006), other courts have determined that mediation fees are not recoverable because they are not specifically authorized by statute, see, e.g., Brisco-Wade v. Carnahan, 297 F.3d 781, 782 (8th Cir.2002); J.C. Bldg. Corp. II v. Parkhurst Homes, Inc., 217 Mich.App. 421, 552 N.W.2d 466, 470 (1996), and because the right to recover costs is not synonymous with the right to recover all expenses of litigation. See Kleinke v. Farmers Coop. Supply & Shipping, 202 Wis.2d 138, 549 N.W.2d 714, 717-18 (1996). Compare N.D.C.C. § 14-09.1-02 (court may order mediation in child custody, support, and visitation proceedings “at the parties’ own expense”). We need not resolve the general issue here, because the parties entered into a mediation agreement specifically providing that “[t]he fees and expenses will be borne equally by the parties.” Because the parties contractually agreed to share mediation expenses, we conclude the district court abused its discretion in awarding Heng her mediation fees as allowable costs.

B

[¶ 36] Arrowhealth argues the district court erred in awarding Heng $5,143.23 in electronic legal research fees.

[¶ 37] Some courts have ruled that electronic research fees may be separately recovered as costs. See, e.g., Crosby v. Bowater Inc. Retirement Plan, 262 F.Supp.2d 804, 817 (W.D.Mich.2003). Most courts, however, have ruled that computer-aided research, like any other form of legal research, is a component of attorney fees and cannot be independently taxed as an item of costs. See, e.g., Montgomery v. Aetna Plywood, Inc., 231 F.3d 399, 409 (7th Cir.2000); United States v. Merritt Meridian Constr. Corp., 95 F.3d 153, 172 (2nd Cir.1996); Haroco, Inc. v. American Nat’l Bank and Trust Co. of Chicago, 38 F.3d 1429, 1440-41 (7th Cir. 1994); Standley v. Chilhowee R-IV Sch. Distr., 5 F.3d 319, 325 (8th Cir.1993); BD v. DeBuono, 177 F.Supp.2d 201, 209 (S.D.N.Y.2001); Bjornen v. State Farm Fire and Cas. Co., 81 Hawaii 105, 912 P.2d 602, 604-06 (1996). In Uren v. Dakota Dustr-Tex, Inc., 2002 ND 81, ¶ 34, 643 N.W.2d 678, this Court held that attorney travel expenses for discovery are not recoverable as costs but “are part of the attorney’s fees and expenses which are xnormally reimbursed by the client.” See also Braunberger v. Interstate Eng’r, Inc., 2000 ND 45, ¶ 20, 607 N.W.2d 904 (abuse of discretion to award attorney hotel and meal expenses as costs). Under the reasoning of Uren, Braunberger, and the majority of courts that have specifically addressed the question, we conclude that electronic legal research fees are a component of attorney fees and cannot be separately taxed as costs. We conclude the district court erred in awarding Heng electronic research fees as part of her costs.

VII

[¶ 38] We have considered the other issues raised by Arrowhealth and conclude they are without merit. We reverse the judgment insofar as it awards Heng mediation and electronic legal research fees as costs. The judgment is otherwise affirmed.

[¶ 39] GERALD W. VANDE WALLE, C.J., DOUGLAS L. MATTSON, D.J., DALE V. SANDSTROM, CAROL RONNING KAPSNER, and MARY MUEHLEN MARING, JJ., concur.

[¶ 40] The Honorable DOUGLAS L. MATTSON, D.J., sitting in place of CROTHERS, J., disqualified.