author: SANDSTROM, Justice. Kapsner, Justice,

text:
    2004 ND 178
    Mitch EVENSON, Plaintiff and Appellant v. QUANTUM INDUSTRIES, INC., and James H. Page, Defendants and Appellees.
    No. 20040033.
    Supreme Court of North Dakota.
    Sept. 17, 2004.

      Jonathan- P. Sanstead, Pearce & Durick, Bismarck, N.D., for plaintiff and appellant.
    James E. Nostdahl, Pringle & Herig-stad, P.C., Minot, N.D., for defendants and appellees.
   SANDSTROM, Justice.

[¶ 1] Mitch Evenson appealed from a summary judgment dismissing his action against Quantum Industries, Inc. (“Quantum”), and James Page. We affirm, concluding the trial court did not err in determining Evenson had failed to present evidence raising a genuine issue of material fact on his breach of contract and fraud claims.

I

[¶ 2] Quantum has designed and manufactured various products, including the Maximan line of products. The Maximan is a walk-behind skid-steer loader. Page is the president of Quantum.

[¶ 3] On approximately April 5, 2000, Evenson, who owned a laundromat, car wash, and RV park in Minot, visited Quantum’s manufacturing plant in Bottineau, seeking a used skid7steer loader. Evenson was impressed with the Maximan and entered into negotiations with Quantum to become a dealer of Maximan products. In early May 2000, Evenson met with Page and Brad Knudson, Quantum’s sales manager. Evenson alleges that he expressed concerns Quantum would sell off the Maxi-man line to another manufacturer and that Page stated the Maximan line would not be sold.

[¶ 4] On May 15, 2000, Evenson and Quantum executed a written dealership agreement. The agreement included a provision for terminating the agreement:

Termination of the dealer relationship can be made by either party, for any reason, by •written notice.

Evenson began efforts to market the Max-iman in North Dakota and Colorado.

[¶ 5] In August 2000, the Bobcat Company contacted Quantum with questions about the Maximan. Bobcat eventually expressed interest in purchasing the line. On January 24, 2001, Quantum sold the Maximan line, including the exclusive right to market and sell the Maximan, to Bobcat, effectively terminating the dealership agreement with Evenson.

[¶ 6] Evenson brought this action against Quantum and Page in July 2001, alleging breach of contract, fraud, negligent misrepresentation, and unjust enrichment. Quantum and Page moved for summary judgment dismissing the action. The trial court concluded Evenson had failed to raise a genuine issue of material fact on his claims, and Evenson had failed to present evidence from which a jury could find fraud by clear and convincing evidence. Judgment was entered dismissing Evenson’s action, and he appealed.

[¶ 7] The trial court had jurisdiction under N.D. Const, art. VI, § 8, and N.D.C.C. § 27-05-06. The appeal was timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const, art. VI, §§ 2 and 6, and N.D.C.C. §§ 28-27-01 and 28-27-02.

II

[¶ 8] We recently outlined our standard of review of an appeal from a summary judgment in Zuger v. State, 2004 ND 16, ¶¶ 7-8, 673 N.W.2d 615 (citations omitted):

Summary judgment is a procedural device for promptly disposing of a lawsuit without a trial if there are no genuine issues of material fact or inferences which can reasonably be drawn from undisputed facts, or -if the only issues to be resolved are questions of law. ‘Whether summary judgment was properly granted is ‘a question of law which we review de novo on the entire record.’ ” Iglehart v. Iglehart, 2003 ND 154, ¶ 9, 670 N.W.2d 343 (quoting Wahl v. Country Mut. Ins. Co., 2002 ND 42, ¶ 6, 640 N.W.2d 689). On appeal, this Court decides if the information available to the trial court precluded the existence of a genuine issue of material fact and entitled the moving party to summary judgment as a matter of law. 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.
A party resisting a motion for summary judgment may not simply rely upon the pleadings or upon unsupported, conclusory allegations. “Factual assertions in a brief do not raise an issue of material fact satisfying Rule 56(e).” Kemp v. City of Grand Forks, 523 N.W.2d 406, 408 (N.D.1994). “Nor may a party merely reassert the allegations in his pleadings in order to defeat a summary judgment motion.” Id.
The resisting party must present competent admissible evidence by affidavit or other comparable means which raises an issue of material fact and must, if appropriate, draw the court’s attention to relevant evidence in the record by setting out the page and line in depositions or other comparable documents containing testimony or evidence raising an issue of material fact.
In summary judgment proceedings, neither the trial court nor the appellate court has any obligation, duty, or responsibility to search the record for evidence opposing the motion for summary judgment. The opposing party must also explain the connection between the factual assertions and the legal theories in the case, and cannot leave to the court the chore of divining what facts are relevant or why facts are relevant, let alone material, to the claim for relief.
Iglehart, at ¶ 10 (quoting Anderson v. Meyer Broad. Co., 2001 ND 125, ¶ 14, 680 N.W.2d 46 (citations omitted)). Mere speculation is not enough to defeat a motion for summary judgment, and a scintilla of evidence is not sufficient to support a claim. If no pertinent evidence on an essential element is presented to the trial court in resistance to a motion for summary judgment, it is presumed that no such evidence exists.

Ill

[¶ 9] Evenson contends the trial court erred in granting summary judgment dismissing his breach of contract claims, because Quantum breached oral and implied terms of the dealership contract.

A

[¶ 10] Evenson argues that during negotiations for the dealership agreement, he expressed concerns to Page and Knud-son about the Maximan product line being sold. Evenson claims Page assured him the Maximan product line would not be sold. Evenson contends this created an additional term to the parties’ contract, prohibiting sale of the Maximan product line, and Quantum breached this oral term when it sold the Maximan line to Bobcat, effectively terminating Evenson’s dealership agreement. Quantum argues any pri- or oral negotiations were superseded by the parties’ written agreement, which specifically provided the dealership agreement could be terminated by either party at any time for any reason.

[¶ 11] The parol evidence rule is partially codified in N.D.C.C. § 9-06-07:

Written contract supersedes oral negotiations. The execution of a contract in writing, whether the law requires it to be written or not, supersedes all the oral negotiations or stipulations concerning its matter which preceded or accompanied the execution of the instrument.

The parol evidence rule is a rule of substantive law and precludes the use of evidence of prior oral negotiations and agreements to vary or add to the terms expressed in the written contract. Syversen v. Hess, 2003 ND 118, ¶ 5, 665 N.W.2d 23; Des Lacs Valley Land Corp. v. Herzig, 2001 ND 17, ¶¶ 7-8, 621 N.W.2d 860; Radspinner v. Charlesworth, 369 N.W.2d 109, 112 (N.D.1985). All preliminary negotiations, conversations, and verbal agreements are merged into and superseded by the subsequent written contract. Syversen, at ¶ 5; Des Lacs, at ¶ 8; Gajewski v. Bratcher, 221 N.W.2d 614, 626 (N.D.1974). The rule is founded on experience and public policy, created by necessity, and designed to give certainty to a transaction that has been reduced to writing by protecting the parties against the doubtful veracity and uncertain memory of interested witnesses. Syversen, at ¶ 5; Des Lacs, at ¶ 8; Gajewski, at 626.

[¶ 12] Even though we must, for purposes of summary judgment, accept Even-son’s allegations about the prior oral negotiations as true, Page’s alleged assurance that the Maximan product line would not be sold cannot be used to vary or add to the parties’ subsequent written dealership agreement. That agreement gave Quantum the right to terminate Page’s dealership at any time for any reason. The trial court did not err in refusing to enforce the alleged oral term.

B

[¶ 13] Evenson argues Quantum breached an implied term in the contract prohibiting termination of the dealership agreement without good cause. Evenson contends the Maximan constituted “farm machinery” under N.D.C.C. § 51-07-01(1) and therefore his dealership agreement could not be terminated except for “good cause” under N.D.C.C. § 51-07-01.1.

[¶ 14] Quantum contends Evenson did not raise this issue in response to the motion for summary judgment and is therefore precluded from raising it on appeal. Evenson has not drawn our attention to any portion of the record showing this issue was raised in the trial court. When a party fails to raise an issue in the trial court in response to a motion for summary judgment, he is precluded from raising the issue for the first time on appeal. Dimond v. State ex rel. State Bd. of Higher Educ., 2001 ND 208, ¶ 19, 637 N.W.2d 692.

C

[¶ 15] We conclude the trial court did not err in granting summary judgment dismissing Evenson’s breach of contract claims.

IV

[¶ 16] Evenson argues the trial court erred in dismissing his fraud claims against Quantum and Page. Evenson contends he was fraudulently induced to enter into the dealership agreement by Page’s assurance the Maximan product line would not be sold.

[¶ 17] Evenson argued Page’s promise that the Maximan line would not be sold created a term of the contract prohibiting sale of the line. Preliminary oral statements and promises related to the terms of the contract do not provide the basis for a fraud claim if there is a subsequent written contract. See First State Bank v. Moen Enters., 529 N.W.2d 887, 892-93 (N.D.1995). Because Page’s alleged promise related to terms of the contract and there is contradictory language in the parties’ subsequent written contract, we conclude the trial court did not err in granting summary judgment dismissing Evenson’s fraud claim.

V

[¶ 18] The judgment dismissing Even-son’s action against Quantum and Page is affirmed.

[¶ 19] GERALD W. VANDE WALLE, C.J., and MARY MUEHLEN MARING, JJ., concur.

[¶ 20] The Honorable JOHN C. McCLINTOCK, JR., D.J., sitting in place of WILLIAM A. NEUMANN, J., disqualified.

Kapsner, Justice,

dissenting.

[¶ 21] I respectfully dissent. Summary judgment was improperly granted on Ev-enson’s claim for fraud in the inducement. I would. reverse and remand for further proceedings relating to the claim of fraud.

[¶ 22] Evenson sued for fraud alleging he was induced to enter into a contract as a result of representations made by James Page and Quantum that “they would agree not to sell the Maximan product line or the related rights to manufacture, sell and/or market the Maximan to any third party.”

[¶ 23] Fraud is defined in N.D.C.C. § 9-03-08:

Actual fraud within the meaning of this title consists in any of the following acts committed by a party to the contract, or with his connivance, with intent to deceive another party thereto or to induce him to enter into the contract:
1. The suggestion as a fact of that which is not true by one who does not believe it to be true;
2. The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true though he believes it to be true;
3. The suppression of that which is true by one having knowledge or belief of the fact;
4. A promise made without any intention of performing it; or
5. Any other act fitted to deceive.

The party alleging fraud ha§ the burden of proving each element of fraud by clear and convincing evidence. First Union Nat’l Bank v. RPB 2, LLC, 2004 ND 29, ¶22, 674 N.W.2d 1.

[¶ 24] In support of this cause of action, Evenson provided his own sworn testimony about the conversation that he alleges contained the fraudulent representations:

A. The day that I recall was in Brad’s office. Brad was behind his desk, Jim was sitting on a chair in his office. We were talking about some of the problems and so forth that we’d encountered with it and what they were doing to rectify it. I told him that the, you know, I thought it was a great concept. And basically I told him before I would go into a dealership agreement, I wanted to make sure that the product is not going to be sold off.
Q. So that was one of your main concerns at that point? ..
A. ■ Yes.
Q. Okay. And what did they tell you?
A. That it would not be.
Q. Who told you that?
A. Jim.
Q. Do you know the approximate date of that meeting?
A. It was prior to me signing the dealership agreement.

[¶ 25] In addition Evenson provided deposition testimony given by Page that, prior to the- agreement with Evenson, companies owned by Page had developed and sold at least four product lines. During the deposition, Page was also specifically asked about his plans to sell the Maximan line.

Q. Did you plan on selling off the Maximan unit?
A. All of our product lines are for sale at some point.

[¶ 26] For purposes of summary judgment, the trial court was obliged to accept the testimony offered by Evenson as true. Even, applying the heightened burden of proof required to establish fraud, a fact finder who believes the testimony offered could rationally infer that Page intended to sell when he made the representations to Evenson that he would not sell. Much will depend on the fact finder’s determination of the credibility of the witnesses. Even-son has established a genuine issue of material fact on the fraud claim.

[¶ 27] Although the parol evidence rule, as codified in N.D.C.C. § 9-06-07, provides a written contract supercedes oral negotiations, there is an unbroken line of cases recognizing parol evidence is admissible to show a party was fraudulently induced to become a party to a contract, even though the contract is in writing. National Cash Register Co. v. Midway City Creamery Co., 49 N.D. 441, 191 N.W. 762, 764 (1922); Dalheimer v. Lucia, 50 N.D. 78,194 N.W. 925, 928 (1923); Carufel v. Founts, 60 N.D. 91, 232 N.W. 609, 611 (1930); Hartford Accident & Indem. Co. v. Anderson, 155 N.W.2d 728, 730-31 (N.D. 1968); Schue v. Jacoby, 162 N.W.2d 377, 382 (N.D.1968); Frank v. A.O. Smith Harvestore Products, Inc., 456 N.W.2d 125,130-31 (N.D.1990).

[¶ 28] The majority relies upon First State Bank v. Moen Enterprises, 529 N.W.2d 887 (N.D.1995), but I do not find Moen persuasive. In Moen, plaintiffs were alleging the fraud of the bank was to misrepresent that it would provide operating loans for the next year’s crop. The documents signed by the parties said:

“Lender has not committed, and is not committing at this time, to finance Borrower’s next year’s farm loan requirements.” Although the contract in this case says it may be terminated by either party for any reason, it is silent about the rights of the company to sell its product line. The writing does not contradict the allegations Ev-enson asserted about Page’s promises not to sell the product.

[¶ 29] Assuming Evenson’s offered testimony to be true for purposes of- deciding the summary judgment motion, it was error for the trial court to decide, as a matter of law, Evenson could not meet his burden of proving the fraud claim.

[¶ 30] CAROL RONNING KAPSNER, J., and JOHN C. McCLINTOCK, D.J., concur.


source: Caselaw Access Project

author: NEUMANN, Justice.

license: Public Domain

text:
    2004 ND 179
    Michelle HANSEN, Stacey Hanson, and Michelle Hansen, as Personal Representative of the Estates of Gordon and Barbara Erickstad, Plaintiffs and Appellants v. Wayne SCOTT, Ray Parra, Rey Selvera, William H. Brooks, Cathy Doyle, Veronica Ballard, Carl Jeffries, Ethel White, Larry Hermance, Cynthia Lyons, Defendants and Appellees Robert R. Lawrence, John Doe # 1, John Doe # 2, John Doe # 3, John Doe # 4, and John Doe # 5, individually, Defendants.
    No. 20040044.
    Supreme Court of North Dakota.
    Sept. 23, 2004.

      Timothy Q. Purdon (argued), Thomas A. Dickson & Justin Roness of Dickson & Purdon, Bismarck, for plaintiffs and appellants.
    Ranee L. Craft (argued), Ryan D. Clinton, Kristofer S. Monson, Assistant Solicitors General; David A. Harris, Assistant Attorney General, State of Texas, Austin, TX, Scott K. Porsborg (appearance) of Smith Bakke Oppegard Porsborg & Wolf, Bismarck, for defendants and appellees.
    Ken R. Sorenson, Assistant Attorney General, Office of Attorney General, Bismarck, for amicus curiae North Dakota Department of Corrections and Rehabilitation.
   NEUMANN, Justice.

[¶ 1] Michelle Hansen, individually and as personal representative of the estates of Gordon and Barbara Erickstad, and Stacey Hanson, the Erickstads’ daughters (“daughters”) appealed from a summary judgment dismissing their wrongful death and negligence claims against employees of the Texas Department of Criminal Justice (“Texas defendants”). The trial court granted summary judgment dismissing the Texas defendants as immune from suit under Texas law. We affirm.

I

[¶ 2] The daughters’ claims against the Texas defendants stem from the murder of their parents by Brian Erickstad and Robert Lawrence, a Texas parolee. This Court recited the underlying facts in Hansen v. Scott, 2002 ND 101, ¶ 3, 645 N.W.2d 223:

In May 1997, North Dakota accepted Lawrence, a Texas resident, for parole supervision in North Dakota. In June 1997, Lawrence was released from custody in Texas, and he began living with his sister in Mandan, where he was supervised by North Dakota parole officials under the Interstate Compact. In October 1997, Lawrence was convicted of making a false report to law enforcement officials in Morton County, and in December 1997, North Dakota parole officials notified Texas parole officials about Lawrence’s North Dakota conviction and that a second similar charge and driving under suspension and exhibition driving charges were pending against him. In December 1997, North Dakota parole officials also notified Texas parole officials that Lawrence had moved and his new address was not known. In February 1998, Texas parole officials issued a pre-revocation warrant authorizing North Dakota officials to arrest Lawrence. In February 1998, Lawrence was convicted of making a false report to law enforcement officers in Burleigh County, and he was sentenced to one year in prison with three months suspended. In March 1998, Texas dropped its “hold” and its revocation proceedings against Lawrence because of his North Dakota conviction and sentence. On August 24, 1998, Lawrence was released from prison, but he failed to contact his North. Dakota parole officer within 24 hours. On September 11, 1998, North Dakota parole officials informed Texas parole officials that Lawrence had absconded from supervision, and North Dakota was closing its case and recommending Texas issue a warrant for Lawrence’s arrest and return to Texas for revocation proceedings. Gordon and Barbara Erickstad were murdered on September 16,1998.

Lawrence was convicted for the Erick-stad murders. The daughters sued the Texas defendants, claiming they failed to send a complete record of Lawrence’s criminal history to the North Dakota parole officials, negligently supervised Lawrence while on parole, and failed to issue a warrant for his arrest in a timely manner, all of which contributed to their parents’ murder.

[¶ 3] The Texas defendants administer the Interstate Compact for the Supervision of Parolees and Probationers (“Interstate Compact”) for the State of Texas. The Interstate Compact was essentially created to establish a system of rules to regulate the interstate movement of parolees and is individually codified by both North Dakota and Texas. The Interstate Compact allows a state the ability to accept a parolee from a different state if certain conditions are met. After a transfer, the “receiving state will assume the duties of visitation of and supervision over probationers or parolees of any sending state.” N.D.C.C. § 12-56-01(2). At the time of the murders, Lawrence was being supervised in North Dakota under N.D.C.C. ch. 12-56, the Interstate Compact for Out-of-'State Parolee Supervision.

[¶ 4] In the original complaint, the daughters alleged claims against the Texas defendants including wrongful death, sur-vivorship, and 42 U.S.C. § 1983 violations. The trial court granted the Texas defendants motion for summary judgment for lack of personal jurisdiction. The daughters appealed. This Court ruled “personal jurisdiction over the Texas defendants would not offend traditional notions of substantial justice, fair play, or due process of law” and remanded the case to the trial court for further proceedings. Hansen, 2002 ND 101, ¶ 1, 645 N.W.2d 223.

[¶ 5] On remand, the Texas defendants again moved for summary judgment. The trial court issued an opinion and order dismissing the Texas defendants, concluding they were immune under Texas law. The daughters requested certification of the dismissal of the Texas Defendants as a final judgment under N.D.R.Civ.P. 54(b). The trial court granted the request and the daughters appeal.

II

[¶ 6] Summary judgment is a procedural device for the prompt and expeditious disposal of an action without a trial if a party is entitled to judgment as a matter of law, and no dispute exists as to the material facts or the reasonable inferences to be drawn from the undisputed facts, or if resolving disputed facts will not change the result. Azure v. Belcourt Pub. Sch. Dist, 2004 ND 128, ¶ 8, 681 N.W.2d 816. ■ Whether the trial court correctly granted summary judgment is a question of law subject to a de novo standard of review. Iglehart v. Iglehart, 2003 ND 154, ¶ 9, 670 N.W.2d 343.

[¶ 7] Applying Texas law, the trial court concluded the Texas defendants were immune from suit. On appeal, the daughters argued Texas law should not apply because barring the daughters recovery is against North Dakota public policy. The Texas defendants argued, as a matter of comity, the trial court correctly applied Texas immunity law and the limited application was not against the public policy of North Dakota.

[¶ 8] “Comity is a principle under which the courts of one state give effect to the laws of another state ... not as a rule of law, but rather out of deference or respect.” Trillium USA, Inc. v. Bd. of County Com’rs of Broward County, 37 P.3d 1093,1098 (Utah 2001). Courts apply comity “.to foster cooperation, promote harmony, and build good will.” Id. This Court has stated comity is “a willingness to grant a privilege, not as a matter of right, but out of deference and good will.” Dow v. Lillie, 26 N.D. 512, 529, 144 N.W. 1082, 1088 (1914). A primary concern is whether the forum state’s public policies will be compromised if comity is applied. Idr, Schoeberlein v. Purdue Univ., 129 Ill.2d 372, 135 Ill.Dec. 787, 544 N.E.2d 283, 288 (1989) (holding comity was appropriate when the forum state could not be sued under its laws in similar circumstances and application of a sister state’s law was consistent with Illinois policies). The United States Supreme Court has held a state is not required to apply a sister state’s sovereign immunity statutes when it would violate the state’s legitimate public policy. Franchise Tax Bd. v. Hyatt, 538 U.S. 488, 496-97, 123 S.Ct. 1683, 155 L.Ed.2d 702 (2003) (relying on Nevada v. Hall, 440 U.S. 410, 422, 99 S.Ct. 1182, 59 L.Ed.2d 416 (1979)).

[¶ 9] In Hyatt, the Supreme Court reviewed whether the California Franchise Tax Board’s (“CFTB”) total immunity from suit under California law was entitled to full faith and credit in Nevada state court. 538 U.S. at 490, 123 S.Ct. 1683. The Court noted both California and Nevada had conferred immunity on their state agencies and public employees in limited situations. Id. at 492, 123 S.Ct. 1683. However, California granted immunity for intentional torts committed within the scope of employment while Nevada did not. Id. at 492-93,123 S.Ct. 1683. Applying the rules of comity, the Nevada Supreme Court held that because Nevada law granted immunity for state employees’ negligent acts, it was not against the public policy of the state to apply California law granting immunity for the CFTB’s negligent acts. Id. at 493, 123 S.Ct. 1683. The Nevada Supreme Court refused to grant comity to the California law granting immunity for intentional torts, stating Nevada’s interest in protecting its citizens outweighed California’s policy of complete immunity for its taxation agency. Id. at 493-94, 123 S.Ct. 1683. The United States Supreme Court declined to resolve the conflict of laws under the Full Faith and Credit Clause, but affirmed the Nevada court stating, “The Nevada Supreme Court sensitively applied principles of comity with a healthy regard for California’s sovereign status, relying on the contours of Nevada’s own sovereign immunity from suit as a benchmark for its analysis.” Id. at 499,123 S.Ct. 1683.

[¶ 10] In the present case, North Dakota and Texas enacted laws limiting the personal liability of state employees. See N.D.C.C. ch. 32-12.2, Tex. Civ. Prac. & Rem. Code ch. 101. North Dakota provides employees immunity from personal liability for negligent acts within the scope of their employment. N.D.C.C. § 32-12.2-02(1). North Dakota does not provide immunity for “[a]ctions of a state employee that constitute reckless or grossly negligent conduct, malfeasance, or willful or wanton misconduct.” N.D.C.C. § 32-12.2-01(6). Texas law grants a broader immunity to state employees, only allowing suits resulting from motor vehicle accidents occurring within the scope of employment. Tex. Civ. Prac. & Rem. Code § 101.021.

[¶ 11] Applying rules of comity as adopted in Hyatt, North Dakota is not required, nor is it necessary, to grant the Texas defendants the same broad immunity they enjoy in Texas. Franchise Tax Bd. v. Hyatt, 538 U.S. at 493-94, 123 S.Ct. 1683. We hold the Texas defendants are immune from suit to the same extent the State of North Dakota would grant immunity to its employees under North Dakota law. Applying the same level of immunity does not compromise the public policy of North Dakota. The Texas defendants are immune from personal liability for negligent acts committed within the scope of employment but would not be immune for acts of gross negligence or intentional misconduct. The daughters do not allege the Texas defendants’ conduct was grossly negligent or intentional misconduct. Accordingly, as a matter of law, the Texas defendants are immune under Texas law.

Ill

[¶ 12] The trial court applied the choice of laws analysis finding, “[t]he better rule of law requires application of Texas law.” We conclude it is unnecessary to apply the choice of laws analysis. We affirm the trial court’s summary judgment in favor of the Texas defendants based on the principles of comity.

[¶ 13] MARY MUEHLEN MARING, Acting C.J., CAROL RONNING KAPS-NER, J., and NORMAN J. BACKES and WILLIAM F. HODNY, Surrogate Judges, concur.

[¶ 14] The Honorable NORMAN J. BACKES, Surrogate Judge, and the Honorable WILLIAM F. HODNY, Surrogate Judge, sitting in place of VANDE WALLE, C.J., and SANDSTROM, J., disqualified.


author: PER CURIAM.

text:
    2004 ND 180
    In the Matter of the Application for DISCIPLINARY ACTION AGAINST T.L. SECREST, a Member of the Bar of the State of North Dakota. Disciplinary Board of the Supreme Court, Petitioner v. T.L. Secrest, Respondent.
    No. 20040243.
    Supreme Court of North Dakota.
    Oct. 4, 2004.
   REPRIMAND ORDERED

PER CURIAM.

[¶ 1] On April 6, 2004, T.L. Secrest admitted service of the Summons and Petition for Discipline. The Petition for Discipline asserts that Secrest was admitted to practice law in the State of North Dakota on July 13, 1956, and has been an attorney at law since that time. In 1993, Secrest represented Emelia Hirsch regarding estate planning and prepared a revocable trust and an irrevocable trust. The purpose of the irrevocable trust was to avoid estate taxes upon Emelia Hirsch’s death. Secrest assisted in the transfer of property from Emelia Hirsch to the trusts over the course of several years.

[¶ 2] The Petition further asserts that Secrest did not reasonably communicate to Emelia Hirsch the effect of the irrevocable trust he prepared for her for the purpose of minimizing estate taxes, and that Sec-rest did not advise the trustees appointed under the irrevocable trust of their duties and obligations in order to give effect to the purpose of the trust. The Petition alleges that Secrest violated N.D.R. Prof. Conduct 1.1 (Competence) and N.D.R. Prof. Conduct 1.4(B) (Communication).

[¶ 3] On April 24, 2004, Secrest filed his Answer to Petition for Discipline denying that he had violated N.D.R. Prof. Conduct 1.1 and N.D.R. Prof. Conduct 1.4(B).

[¶ 4] Subsequently, on August 30, 2004, Secrest, along with Paul W. Jacobson, Disciplinary Counsel, filed a Stipulation and Consent to Discipline admitting to a violation of N.D.R. Prof. Conduct 1.4(B), which provides that a lawyer shall explain matter related to the representation to the extent reasonably necessary to permit the client to make informed decisions. Secrest agreed to discipline in the form of a reprimand by the Supreme Court, and payment for the costs of the disciplinary proceedings in the amount of $500.

[¶ 5] The Hearing Panel filed its Report on August 30, 2004, accepting the Stipulation and Consent to Discipline finding that Secrest did not reasonably communicate to Emelia Hirsch the effect of the irrevocable trust he had prepared for her, nor did Secrest reasonably advise Emelia Hirsch or the trustees appointed under the irrevocable trust of their duties and obligations under the trust. The Hearing Panel concluded Secrest violated N.D.R. Prof. Conduct 1.4(B), and recommended Secrest be reprimanded by the Supreme Court and pay the costs of the disciplinary proceeding in the amount of $500.

[¶ 6] The matter was submitted to the Court under N.D.R. Lawyer Discipl. 3.1(F)(2). Objections to the Report of the Hearing Panel were due September 19, 2004; no objections were filed. The Court considered the matter, and

[¶7] ORDERED, the Report of the Hearing Panel of the Disciplinary Board is accepted.

[¶ 8] FURTHER ORDERED, T.L. Secrest is reprimanded for violation of N.D.R. Prof. Conduct 1.4(B).

[¶ 9] FURTHER ORDERED, T.L. Secrest pay costs of the disciplinary proceeding in the amount of $500, payable to the Secretary of the Disciplinary Board.

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


text:
    STATE of Iowa, Appellant, v. Karen J. WILKINS, Appellee.
    No. 03-0476.
    Supreme Court of Iowa.
    Aug. 11, 2004.
    Rehearing Denied Oct. 1, 2004.

      Thomas J. Miller, Attorney General, Darrel Mullins, Assistant Attorney General, and Michael L. Wolf, County Attorney, for appellant.
    John J. Wolfe, Clinton, for appellee.
   PER CURIAM.

This is an appeal by the State challenging the district court’s refusal to consider a prior uncounseled OWI conviction for purposes of supporting an offense of third-offense OWI. The defendant, Karen L. Wilkins, cross-appeals, challenging the revocation of her driving privileges. After reviewing the record and considering the arguments presented, we reverse the district court on the State’s appeal and affirm that court on Wilkins’ appeal.

Wilkins was charged with third-offense OWI after a chemical test of her breath imposed pursuant to the implied-consent law revealed an alcohol concentration of .135. As a predicate for a conviction of OWI, third-offense, it was alleged that she had been twice previously convicted of OWI. Wilkins initially pleaded guilty to OWI, third-offense. However, prior to the imposition of sentence, she successfully challenged the degree of that offense on the basis that she was proceeding without counsel at the time of one of her former OWI convictions for which she was granted a deferred judgment. Her conviction in the present case was accordingly reduced to OWI, second offense.

In challenging the district court’s refusal to consider Wilkins’ uncounseled OWI conviction as a basis for enhancing her latest offense, the State urges that, under current federal Sixth Amendment law, prior uncounseled convictions are only invalid for enhancing a later offense or sentence if imprisonment was actually imposed in the prosecution in which the uncounseled conviction was obtained. It premises this contention on the decision of the Supreme Court in Nichols v. United States, 511 U.S. 738, 114 S.Ct. 1921, 128 L.Ed.2d 745 (1994). There, the Court determined that an enhancement of a sentence based on prior uneounseled misdemeanor convictions does not violate the Sixth Amendment unless the prior uncounseled offenses actually resulted in imprisonment. Nichols, 511 U.S. at 746-47, 114 S.Ct. at 1927, 128 L.Ed.2d at 754. The Nichols majority overruled a prior plurality decision in Baldasar v. Illinois, 446 U.S. 222, 100 S.Ct. 1585, 64 L.Ed.2d 169 (1980). We recognized that result in State v. Tovar, 656 N.W.2d 112, 114 (Iowa 2003). The State contends that, because Wilkins received a deferred judgment in regard to her un-counseled guilty plea, there was never any actual incarceration on which to premise a Sixth Amendment claim.

I. The Continuing Viability of State v. Cooper.

This court accepted the Baldasar plurality opinion in State v. Cooper, 343 N.W.2d 485, 486 (Iowa 1984), stating that “the reasoning of Baldasar and our own view of the importance of counsel” dictated that two prior uncounseled convictions could not be used to enhance a theft conviction to theft in the third degree. By implication, we adhered to the view of the Baldasar plurality that this rule applies to any conviction in which imprisonment might be imposed. We are now asked to follow the Nichols decision and recognize that uncounseled misdemeanor convictions are not invalid for enhancement purposes unless imprisonment was actually imposed for the uncounseled conviction.

Wilkins argues that, because the result in our Cooper case was premised in part on “our own view of the importance of counsel,” see 343 NW.2d at 486, we should continue to follow that precedent. We disagree. Cooper was commenting on an interpretation of the Sixth Amendment of the federal constitution in which only four justices joined. Consequently, we believe that the reference to our view of the matter was intended as an affirmation of the view of the Sixth Amendment expressed by the justices in the Supreme Court’s plurality opinion. That view of the federal constitution has now been unambiguously rejected in Nichols. We are therefore not at liberty to continue to follow our holding in Cooper. Because Wilkins was not imprisoned with respect to her prior misdemeanor conviction, her motion based on a denial of counsel should have been rejected.

Although Wilkins attempts, for the first time on appeal, to assert a violation of the state constitution, that issue was not raised in the district court. Wilkins’ motion to reduce her conviction from third-offense OWI to second-offense OWI was expressly premised on the Sixth Amendment. No state constitutional claim was made. Consequently, we will not consider that issue on appeal.

II. Waiver and Double Jeopardy.

Wilkins urges that, because the county attorney filed an amended charge of second-offense OWI following the district court’s ruling, to which he ultimately pled guilty, the State has waived the issue argued on this appeal. In the alternative, she contends that the protection against double jeopardy precludes reinstatement of the original conviction and sentence for OWI, third offense. We reject both of these contentions.

The county attorney’s action in filing the amended charge was not voluntary because it was the product of the court’s erroneous ruling in setting aside Wilkins’ original conviction. See State v. Raim, 381 N.W.2d 635, 637 (Iowa 1986). Nor is the protection against double jeopardy implicated in regard to our reinstatement of the original conviction and sentence. This has been a single criminal proceeding involving the substitution of an erroneous judgment for a prior correct judgment and an appellate review correcting that error. See State v. Pexa, 574 N.W.2d 344, 347 (Iowa 1998). Our action is similar to the procedure that was sustained against a double-jeopardy challenge in State v. Iowa District Court, 464 N.W.2d 233, 236 (Iowa 1990).

III. The Cross-Appeal.

Wilkins cross-appeals, asserting that the district court improperly imposed a six-year revocation of her driving privileges pursuant to Iowa Code section 321J.4(4). The arguments presented in support of this contention were rejected in State v. Grogan, 385 N.W.2d 254, 255 (Iowa 1986), which held that the statutory six-year revocation is properly imposed irrespective of whether the prior convictions on which it was based resulted from un-counseled pleas of guilty. We continue to adhere to that view.

We have considered all issues presented and conclude that the judgment of the district court should be reversed on the State’s appeal and the matter remanded to the district court for reinstatement of Wilkins’ conviction for third-offense OWI upon her plea of guilty. Any lesser conviction and sentence that has been imposed for the offense should be rescinded. The order of the district court revoking Wilkins’ driving privileges is affirmed.

REVERSED AND REMANDED ON THE STATE’S APPEAL; AFFIRMED ON DEFENDANT’S APPEAL.

      . Because the dispositive ruling was an order sustaining Wilkins' motion in arrest of judgment, the State may appeal as of right pursuant to Iowa Code section 814.5(l)(c) (2001).

      . In the subsequent decision of State v. Moe, 379 N.W.2d 347, 349 (Iowa 1985), we viewed the decision in Cooper as an application of the federal Sixth Amendment.


author: CARTER, Justice.

text:
    CITY OF OTTUMWA and Iowa Municipal Workers’ Compensation Association, Appellants, v. Russell POOLE, Appellee.
    No. 02-1493.
    Supreme Court of Iowa.
    Sept. 1, 2004.

      Donna R. Miller and Peter M. Sand of Grefe & Sidney, P.L.C., Des Moines, for appellants.
    William B. Tharp and Dennis W. Emanuel of Webber, Gaumer & Emanuel, P.C., Ottumwa, for appellee.
   CARTER, Justice.

The City of Ottumwa (the city) and Iowa Municipal Workers’ Compensation Association (IMWCA), its workers’ compensation claim administrator, appeal from the district court’s decree granting rescission of an' agreement between the city and Russell Poole for a special case settlement of Poole’s workers’ compensation claim. The district court ordered rescission of the agreement based on its finding that a claims representative of IMWCA misrepresented certain material information and failed to disclose material information in the handling of Poole’s workers’ compensation claim. The court of appeals reversed the district court decree, concluding that the claims representative made no material misrepresentations and that her disclosures were sufficiently complete and accurate to preclude granting rescission of the agreement that had been negotiated between the parties. After reviewing the record and considering the arguments presented, we affirm the decision of the court of appeals and reverse the district court decree.

Poole sustained a back injury in March 2001 while working as a transit driver for the city. The employer’s examining physician gave him a four-percent impairment rating, and his designated physician gave him a six-percent impairment rating. Poole was paid temporary disability benefits first premised on the four-percent disability rating and later on the six-percent disability rating.

Poole contacted the workers’ compensation commissioner’s office requesting information on filing a claim. He was told by that office that IMWCA was handling the administration of workers’ compensation claims by employees of the City of Ottum-wa. He was advised by the commissioner’s office that in contacting IMWCA he should request interest on any benefits owed and not yet paid. The commissioner’s office mailed Poole information concerning whole-body impairment prepared by the American Medical Association.

Poole then contacted IMWCA and conversed with Toni Lockwood, a claims specialist, concerning his entitlement to workers’ compensation benefits. She informed him that he should send a demand letter and gave him advice concerning the information to be included therein. Thereafter, Poole wrote to IMWCA describing the circumstances surrounding his injury, the nature of his medical treatment, his disability rating, permanent work restrictions, and an estimate of future lost wages. He demanded $350,000 as a lump-sum settlement of all claims including future medical benefits.

One month later, Lockwood responded to Poole’s demand and advised him that the $350,000 request exceeded the maximum benefits payable for permanent total disability, which would have been $106,990. The letter went on to state:

Based on several factors which include a minimal permanent partial disability rating, and being a nonsurgical injury, we are able to extend an offer to you for 10% to the body less the amount of PPD paid at the- time of settlement. The 10%⅜ 500 weeks = 50 weeks of benefits at your compensation rate of $213.98 which totals $10,699.00. The total amount of PPD paid thus far has been 22 weeks at your rate of $213.98 which totals $4707.46. Please keep in mind that previously we had voluntarily agreed to pay the additional 2% to the body which was the difference between Dr. Carlstrom (treating physician) and Dr. Riggens (IME physician) impairment ratings.
We look forward to receiving your response in the near future.

Later, a telephone conversation took place between Poole and Lockwood concerning the foregoing settlement offer. Following this conversation, Poole faxed to IMWCA a written acceptance of the offer.

When the formal documents to be presented to the workers’ compensation commissioner were tendered to Poole for his signature, he refused to sign them. The city and IMWCA then brought an action for specific performance of the settlement agreement. Poole filed a counterclaim seeking rescission. The district court heard the evidence and found that an enforceable agreement had been reached between the parties. In considering Poole’s counterclaim, the court ruled that he had established grounds for rescission based on a misrepresentation of material facts and a failure to disclose material facts. Other facts of importance will be discussed in our consideration of the legal issues presented.

I. Scope of Review.

This was an action in equity for specific performance of a contract in which the defendant counterclaimed for rescission. Consequently, our review is de novo. Iowa R.App. P. 6.4. When considering the credibility of witnesses, the court gives weight to the findings of the trial court but is not bound by them. Iowa R.App. P. 6.14(6)⅛0.

II. The Specific Performance Issue.

Agreements for special case settlements are not binding unless approved by the workers’ compensation commissioner pursuant to Iowa Code section 85.35. If an agreement has been reached for the submission of a special case settlement to the commission, it may be specifically enforced to the extent of ordering a party to sign the documents necessary for that purpose. Dillon v. City of Davenport, 366 N.W.2d 918, 925-26 (Iowa 1985). In such specific enforcement actions, the court does not act to influence the decision of the commissioner under section 85.35.

III. Rescission Issue.

We have recognized that an action to rescind a contract based on misrepresentations is an equitable action that does not depend on knowledge of the falsity or intent to deceive. Rubes v. Mega Life & Health Ins. Co., 642 N.W.2d 263, 269 (Iowa 2002); Alpen v. Chapman, 179 N.W.2d 585, 590 (Iowa 1970). To prevail on a rescission theory based on misrepresentation, the party requesting relief must prove (1) a representation, (2) falsity, (3) materiality, (4) an intent to induce the other to act or refrain from acting, and (5) justifiable reliance. Hyler v. Gamer, 548 N.W.2d 864, 872 (Iowa 1996). We have recognized that in some instances a failure to disclose material facts may be the equivalent of a false assertion. First Nat’l Bank v. Broim, 181 N.W.2d 178,182 (Iowa 1970).

The Restatement (Second) of Contracts speaks to the issue of nondisclosure as follows:

A person’s non-disclosure of a fact known to him is equivalent to an assertion that the fact does not exist in the following cases only:
(a) where he knows that disclosure of the fact is necessary to prevent some previous assertion from being a misrepresentation or from being fraudulent or material.
(b) where he knows that disclosure of the fact would correct a mistake of the other party as to a basic assumption on which that party is making the contract and if non-disclosure of the fact amounts to a failure to act in good faith in accordance with reasonable standards of fair dealing.
(c) where he knows that disclosure of the fact would correct a mistake of the other party as to the contents or effect of a writing, evidencing or embodying an agreement in whole or in part.
(d) where the other person is entitled to know the fact because of a relation of trust and confidence between them.

Restatement (Second) of Contracts § 161 (1981). With respect to paragraph (d) of the Restatement rule, we have recognized that, if a workers’ compensation claims representative assumes the role of an ad-visor to a claimant, all relevant facts must be disclosed in reaching a settlement agreement. Harrison v. Keller, 254 Iowa 267, 271, 117 N.W.2d 477, 480 (1962). The comment to paragraph (d) of the Restatement rule states:

The rule stated in Clause (d) supplements that stated in § 173 with respect to contracts between parties in a fiduciary relation. Where the latter rule applies, as in the case of a trustee, an agent, a guardian, or an executor or administrator, its more stringent requirements govern. Even where a party is not, strictly speaking, a fiduciary, he may stand in such a relation of trust and confidence to the other as to give the other the right to expect disclosure. Such a relationship normally exists between members of the same family and may arise, in other situations as, for example, between physician and patient. In addition, some types of contracts, such as those of suretyship or guaranty, marine insurance and joint adventure, are recognized as creating in themselves confidential relations and hence as requiring the utmost good faith and full and fair disclosure.

Restatement (Second) of Contracts § 161 cmt. f.

In evaluating Lockwood’s role in the handling of Poole’s workers’ compensation claim, we are unable to conclude that it involved a relation of trust and confidence sufficient to invoke an enhanced duty of disclosure. The only actual advice given to Poole by Lockwood, as disclosed by the record, was with respect to the information to be included in a settlement demand. Insurance agents regularly request information from claimants that pertains to their claims. Lockwood’s actions in this regard did not establish a relationship of trust and confidence with Poole. It is clear from the record that her dealings with him thereafter were at arms’ length. As such she could negotiate with him based on circumstances that she deemed favorable to her evaluation of the claim. She was not required to bring up factors that might militate in favor of a larger award. That would have amounted to bidding against herself.

Poole’s claims of falsity and failure of necessary disclosure are that Lockwood misrepresented his functional impairment rating as a body-as-a-whole disability rating and that she misinformed him by stating that he would not be entitled to future medical benefits. In carefully viewing the record with regard to these claims, we are convinced that Lockwood’s reference to “a minimal permanent partial disability rating,” was understood by both Poole and her as referring to the four-percent functional rating and six-percent functional rating previously obtained from Poole’s examining physicians. Those were ratings of which both parties were aware. Although Poole is correct in contending that functional impairment ratings do not equate with body-as-a-whole industrial disability because the latter is based on lost earning capacity, functional impairments can play an important role in settlement negotiations. Poole’s contention that Lockwood was treating these ratings as conclusive evidence of the extent of his industrial disability is belied by the fact that the percentage of disability involved in the settlement offer was greater than either of the ratings expressed by the doctors who had examined him. In addition, she invited him to make a counteroffer.

Poole also contends that Lockwood misrepresented his entitlement to future medical benefits. Poole’s testimony at trial with respect to the settlement offer was as follows:

Q. You called Toni Lockwood in response to that letter? A. That’s correct.
Q. And you accepted the offer of settlement? A. Yes, sir.
Q. Okay you said that when you read that letter you felt the only thing you were going to get was doctor ratings. Do you remember saying that? A. That’s correct, because that’s what the letter said.
Q. However, she was offering more than what the doctor ratings were, correct? A. That additional four percent?
Q. Yes. A. Yes, sir.
Q. And then when yon called her up to accept the offer, she said, “you should feel free to make a counter instead of accepting the offer,” correct? A. There were some words to that effect. I don’t recall the exact words, sir.

To shortcut the length of cross-examination, the city offered a portion of Poole’s deposition testimony, which was accepted by stipulation. Included in that testimony was the following:

Q.... Let me back up and go over this one more time. You would agree with me that the letter offers you 10 percent of the body less the amount of PPD paid at the time of the settlement? You agree that that’s what it offers? A. Yes.
Q. Then it tells you that 10 percent just by itself would be, correct, 50 weeks? A. Okay. And it said that I was getting $10,699.
Q. That tells you how much 10 percent is by itself; correct? A. Yes.
Q. Then it tells you how much will be subtracted from the 10 percent, which is the amount that’s been paid so far. A. Once again, sir, I don’t feel that that states it’s going to be subtracted. See, that’s what was confusing me and that’s why I called Toni was because I thought I was going to get that in addition, and the more I read it, the more confused I got. That’s why I called Toni for clarification.
Q. Okay. A. And that’s when I got the clarification.
Q. You got the letter and you called Toni to talk to her about the offer ? A. After I had read this over and over trying to understand it.
Q. So you call up Toni. A. Uh-huh.
Q. Can you tell me what you recall of the conversation. A. I apologized for bothering her and told her I had a stupid question, that the more I read this, the more confused I got and could she explain it to me. That’s when she read it through to me that I was only going to get this and that it was based upon what the doctors have said, this 10 percent.
Q. And when you say only get this, you’re referring to 10 percent minus whatever permanency has been paid already? A. Yes. And I, once again, asked her about, “Does this mean also that I don’t get any future medical benefits?” And she told me, “Yes.”

(Emphasis added.)

We find, based on Poole’s own testimony, that the discussion of future medical benefits to which he refers was with regard to the terms of the settlement offer. It did not pertain to his potential entitlement in a litigated setting. We find on our de novo review that Poole has failed to establish grounds for rescission of the settlement based on either false representations or a failure to make required disclosures. The district court erred in rescinding the settlement agreement. The decision of the court of appeals is affirmed. The decree of the district court is reversed, and the matter is remanded to that court for the entry of a decree specifically enforcing the agreement to submit a special case settlement to the workers’ compensation commissioner. Nothing contained in this opinion is intended to influence the action to be taken by the commissioner in approving or failing to approve the special case settlement.

DECISION OF COURT OF APPEALS AFFIRMED; DISTRICT COURT JUDGMENT REVERSED AND REMANDED.


author: WIGGINS, Justice.

text:
    NATIONWIDE MUTUAL INSURANCE COMPANY, Appellant, v. Daniel KELLY, Appellee.
    No. 03-1820.
    Supreme Court of Iowa.
    Sept. 1, 2004.
    Joel J. Yunek of Laird, Heiny, McMani-gal, Winga, Duffy & Stambaugh, P.L.C., Mason City, for appellant.
    Mindi M. Vervaecke of Fitzsimmons & Vervaecke Law Firm, P.L.C., Mason City, for appellee.
   WIGGINS, Justice.

Nationwide Mutual Insurance Company (Nationwide) appeals from an order entered by the district court granting Daniel Kelly (Kelly) summary judgment and denying Nationwide’s motion for summary judgment. The district court interpreted the “other insurance” clause contained in an Iowa underinsured motorist (UIM) policy that restricted damages payable under the UIM coverage to “the highest applicable limit for any one vehicle” to mean the stated limit, not the amount of the benefits collectable under Oregon law. We conclude the district court correctly interpreted the policy and affirm the district court’s order.

I. Background Facts and Procedure.

The facts are undisputed. On December 21, 2001, Kelly suffered personal injuries because of an automobile collision that occurred in Oregon. Kelly was a resident of Iowa. At the time of the incident, Kelly was a passenger in a vehicle owned by Kelly’s mother, Lavonne, and operated by Kelly’s brother. Lavonne was a resident of Oregon. Karleen McLain (McLain) was the driver of the other vehicle involved in the collision. The parties agree McLain was at fault and Kelly was without fault.

Safeco Property and Casualty Insurance Company (Safeco) insured McLain with a $50,000 liability limit. Allstate Insurance Company (Allstate) insured Lavonne’s vehicle under a policy issued in Oregon. Lavonne’s automobile policy contained UIM coverage with a $100,000 stated limit in the declarations.

Kelly’s automobile policy was issued by Nationwide in Iowa, and included UIM coverage with a $50,000 stated limit in the declarations. Nationwide’s policy contains an “other insurance” clause, which provides:

If there is other applicable underinsured motorists coverage available under one or more policies or provisions of coverage:
1. Any recovery for damages may equal but not exceed the highest applicable limit for any one vehicle under this insurance or other insurance providing coverage on either a primary or excess basis.
In addition, if any such coverage is provided on the same basis, either primary or excess, as the coverage we provide under this endorsement, we will pay only our share. Our share is the proportion that our limit of liability bears to the total of all applicable limits for coverage provided on the same basis.
2. Any coverage we provide with respect to a vehicle you do not own shall be excess over any other collectible un-derinsured motorist coverage.

By its terms, the policy provides “excess” UIM coverage.

With the consent of Nationwide, Kelly settled with and released McLain in exchange for payment of the $50,000 liability limit of the Safeco policy. Also with the consent of Nationwide, Kelly settled with and released his UIM claim against Allstate, the primary UIM carrier, for $50,000. In Oregon, the amount payable under a UIM policy is equal to the limits of the uninsured motorist coverage, less the amount received from the tortfeasor’s automobile liability insurance policy. Am. Econ. Ins. Co. v. Canamore, 114 Or.App. 348, 834 P.2d 542, 544-45 (1992). Thus, under Oregon law, Kelly’s recovery under Allstate’s policy was limited to $50,000 even though the stated limit in the policy was $100,000. The parties stipulated Kelly’s damages exceed $150,000.

In a separate action, Kelly filed a petition in Polk County seeking to recover the $50,000 UIM limit under his policy with Nationwide. In the present case, Nationwide filed a petition for a declaratory judgment in Cerro Gordo County alleging it has no obligation to-pay UIM benefits to Kelly. Both parties moved for summary judgment in the declaratory judgment action. The district court denied Nationwide’s motion for summary judgment and sustained Kelly’s motion for summary judgment concluding the highest applicable UIM limit was the $100,000 stated limit in Allstate’s policy, unreduced by the $50,000 deduction required by Oregon law. Therefore, the insurance contract issued by Nationwide provided Kelly UIM coverage up to the limit of $50,000 for the claim Kelly asserted because of the Oregon motor vehicle accident. Nationwide appeals.

II. Issue.

Did the district court correctly interpret the “other insurance” clause contained in Nationwide’s UIM coverage?

III. Scope of Review.

We review a district court’s ruling on a motion for summary judgment for correction of errors at law. Mewes v. State Farm, Auto. Ins. Co., 530 N.W.2d 718, 721 (Iowa 1995). The district court should grant a party’s motion for summary judgment if there is no issue as to any material fact and the moving party is entitled to judgment as a matter of law. West Bend Mut. Ins. Co. v. Iowa Iron Works, Inc., 503 N.W.2d 596, 598 (Iowa 1993).

This appeal also concerns the interpretation of the “other insurance” clause contained in the UIM section of Nationwide’s insurance policy. Where neither party offers any extrinsic evidence concerning the meaning of the policy language, the process of construing or interpreting the meaning of the words used is a matter of law for the court to decide. Cairns v. Grinnell Mut. Reins. Co., 398 N.W.2d 821, 823-24 (Iowa 1987).

IV. Analysis.

The parties disagree over the interpretation of the “other insurance” clause contained in the UIM section of Nationwide’s policy. Nationwide contends that although the UIM coverage in Allstate’s policy issued to Lavonne had a stated limit of $100,000, because of the interpretation given UIM coverage in the Oregon courts, the highest applicable limit of the Allstate policy was only $50,000. Thus, Nationwide concludes it does not have any coverage under its UIM policy because the highest applicable limit under either its policy or Allstate’s policy is only $50,000. Kelly contends the interpretation of UIM coverage used by the Oregon courts only reduces the amount payable under the policy, not the limit of the policy. Thus, the highest applicable limit is Allstate’s UIM coverage, the $100,000 stated limit, thereby requiring Nationwide to pay its limit of $50,000.

The Oregon Court of Appeals interpreted UIM coverage issued in Oregon based upon Oregon Revised Statute section 742.502. Canamore, 834 P.2d at 544-45. Section 742.502(2)(a) of the Oregon statutes provides in relevant part:

A motor vehicle bodily injury liability policy shall have the same limits for uninsured motorist coverage as for bodily injury liability coverage unless a named insured in writing elects lower limits.... Underinsurance benefits shall be equal to uninsured motorist coverage benefits less the amount recovered from other automobile liability insurance policies.

Or.Rev.Stat. § 742.502(2)(a) (1997) (emphasis added). A plain reading of the Oregon statute makes it clear that the statute does not reduce the limits of the Oregon UIM policy for any amounts recovered from other automobile liability insurance policies. Rather, the amounts recovered from other automobile liability insurance policies only reduce the benefits payable under the policy. The highest applicable limit referenced by Nationwide’s policy “other insurance” clause is the $100,000 stated limit of the Allstate UIM policy.

We have carefully considered all of the other issues raised by the parties on appeal and conclude they are without merit or were not properly preserved.

Y. Disposition.

We affirm the district court ruling granting summary judgment in favor of Kelly. The district court was correct in overruling Nationwide’s motion for summary judgment. The highest applicable limit is the Allstate UIM limit of $100,000. Therefore, Kelly is entitled to recover the $50,000 under his Nationwide UIM coverage.

AFFIRMED.

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


author: STREIT, Justice.

text:
    Francis J. PRUSS and City of Cedar Rapids, Appellants, v. CEDAR RAPIDS/HIAWATHA ANNEXATION SPECIAL LOCAL COMMITTEE, City Development Board, and City of Hiawatha, Iowa, Appellees.
    No. 03-1091.
    Supreme Court of Iowa.
    Sept. 15, 2004.

      Francis J. Pruss, Cedar Rapids, pro se.

    David F. McGuire, City Attorney, Cedar Rapids, for appellant City.
    Thomas J. Miller, Attorney General, and Christie J. Scase, Assistant Attorney General, for appellees City Development Board and Special Local Committee.
    James P. Craig, Randal J. Scholer, and Brenda K Wallriehs of Moyer & Bergman, P.L.C., Cedar Rapids, for appellee City of Hiawatha. '
   STREIT, Justice.

A landowner, drawn to the charm of the bright lights and sewer services of Cedar Rapids, resists the annexing embrace of Hiawatha. A .special committee of the City Development Board approved the City of Hiawatha’s petition to involuntarily annex Francis Pruss’s land, and denied a similar request by Cedar Rapids. Pruss and Cedar Rapids complain the Committee’s interpretation of a state annexation law was wrong, because their request was not afforded the “presumption of validity” expressly granted to voluntary annexations. They also argue Cedar Rapids, and not Hiawatha, could better serve the Pruss property. Because we find the Committee acted legally and its decision was supported by substantial evidence, we affirm.

I. Facts and Prior Proceedings

The events and legal proceedings which gave rise to this appeal span nearly eight years and include two prior appeals to this court. City of Hiawatha v. City Dev. Bd., 609 N.W.2d 496 (Iowa 2000) (Hiawatha I); City of Hiawatha v. City Dev. Bd., 609 N.W.2d 532 (Iowa 2000) (Hiawatha II). In the interest of judicial economy, we repeat only the most salient details.

In late 1996 and early 1997, a jurisdictional battle royal erupted among three Linn County municipalities after the City of Hiawatha attempted to involuntarily annex over 1600 acres of unincorporated land in Linn County. See Iowa-Code § 368.11 (2001). The City Development Board contemporaneously received a flurry of applications for voluntary annexation to Cedar Rapids, Robins, and Hiawatha. ■See id. §§ 368.7, 368.9. In one of those applications, Francis Pruss requested annexation of his property to Cedar Rapids.

The Board determined the Hiawatha petition contained common territory with several of the voluntary annexation requests, including the Pruss-Cedar Rapids application. As a consequence, the Board tabled Hiawatha’s petition for involuntary annexation while it decided these pending voluntary annexation proposals. See id. § 368.7(4) (upon receiving competing voluntary and involuntary annexation requests, the Board “shall approve the application for voluntary annexation, if the application meets the applicable requirements of [chapter 368],” unless certain exceptions apply); see also id. § 368.6 (establishing a presumption of validity for voluntary annexations).

The Board denied Pruss’s application for voluntary annexation to Cedar Rapids because it would have created an “island” of unincorporated land surrounded by Cedar Rapids, Hiawatha, and Robins. See id. § 368.7(3) (“The board shall not approve an application which creates an island.”); see also id. § 368.1(10) (defining an island as “land which is not part of a city and which is completely surrounded by the corporate boundaries of one or more cities”). The Board notified the parties, however, that the Pruss application could be “converted” into an involuntary petition. See id. § 368.7(4) (“If an application for voluntary annexation is not approved pursuant to this section, the board shall cause the conversion of the application to a petition ... and shall proceed under section 368.14A.”). A special local committee would then consider this converted involuntary petition with the competing Hiawatha involuntary petition. Id. § 368.14A (providing for appointment of special local committee where two or more pending requests for involuntary annexation concern a common territory). With some modifications the Board approved the other pending voluntary annexation requests.

Hiawatha sought-judicial review and in two separate appeals challenged the Board’s approval of these other voluntary annexations of land to Cedar Rapids and Robins. The Board postponed action on Hiawatha’s petition for involuntary annexation of the Pruss property while these appeals were pending; Hiawatha’s petition had territory in common with the challenged annexations. We ultimately affirmed. See Hiawatha I, 609 N.W.2d at 497 (voluntary annexation of nearly 1000 acres to Cedar Rapids); see also Hiawatha II, 609 N.W.2d at 534 (smaller voluntary annexation to Robins).

After Hiawatha I and Hiawatha II were decided, the Board notified Cedar Rapids it would resume consideration of Hiawatha’s involuntary petition for annexation at an upcoming hearing, at which Cedar Rapids would have the opportunity to discuss a “converted” Pruss application. Cedar Rapids subsequently passed a resolution requesting the Board convert Pruss’s denied application for voluntary annexation into an involuntary annexation, which the City would bring.

In February 2001, the Board ordered the formation of a special local committee to consider the competing Hiawatha and Cedar Rapids petitions for involuntary annexation of the Pruss property. See Iowa Code § 368.14A. Later that same year, the Cedar Rapids/Hiawatha Annexation Special Local Committee voted to approve the Hiawatha petition and dismiss the Cedar Rapids petition. The Committee found Hiawatha had the ability to provide appropriate levels of new municipal services and benefits to the Pruss property. An election was held, and the annexation was approved by a majority of voters. See id. § 368.19.

Pruss filed a petition for judicial review of the Committee’s decision to annex his property to Hiawatha. Cedar Rapids joined the petition, and Hiawatha intervened on behalf of the Committee. The district court affirmed.

Pruss and Cedar Rapids appealed. Their arguments, which are for the most part the same as those raised in the district court, boil down to four claims: namely, they contend the Committee (1) failed to grant the Cedar Rapids annexation request a presumption of validity; (2) wrongly concluded Hiawatha could provide substantial municipal services and benefits not previously enjoyed by the annexed territory; (3) did not give adequate notice of a pre-hearing conference; and (4) improperly ordered the election before filing its written decision.

Additional facts will be set forth below as needed.

II. Standard and Scope of Review

Iowa’s city development statute specifically limits judicial review of a committee decision. It states:

The judicial review provisions of this section and chapter 17A shall be the exclusive means by which a person or party who is aggrieved or adversely affected by agency action may seek judicial review of that agency action. The court’s review on appeal of a decision is limited to questions relating to jurisdiction, regularity of proceedings, and whether the decision appealed from is arbitrary, unreasonable, or without substantial supporting evidence. The court may reverse and remand a decision of the board or a committee, with appropriate directions.

Iowa Code § 368.22. Iowa Code chapter 17A, the Iowa Administrative Procedure Act, generally limits review, with certain enumerated exceptions we need not discuss here. See id. §§ 17A.19-.20; Citizens of Rising Sun v. Rising Sun City Dev. Comm., 528 N.W.2d 597, 599 (Iowa 1995) (explaining interplay between specific limitations of the review provisions of the city development statute and the general limitations of a previous version of the Iowa Administrative Procedure Act). See generally Mycogen Seeds v. Sands, 686 N.W.2d 457, 463-465 (Iowa 2004) (explaining general provisions of current Iowa Administrative Procedure Act). On appeal, we decide whether the district court correctly applied the law. See Mycogen, 686 N.W.2d at 464; Dickinson County v. City Dev. Comm., 521 N.W.2d 466, 468 (Iowa 1994). If our conclusions are the same as those the district court reached, we affirm; if not, reversal may be required. See Mycogen, 686 N.W.2d at 464; Dickinson County, 521 N.W.2d at 468.

The law of annexation is purely statutory. See Citizens of Rising Sun, 528 N.W.2d at 599. The legislature prescribes the conditions of, and procedures for, annexation. See id. Nonetheless, “a failure to literally comply with every word of our annexation statutes is not fatal.” City of Des Moines v. City Dev. Bd., 473 N.W.2d 197, 200 (Iowa 1991). “Substantial compliance ... is sufficient, and legislation establishing the method by which municipal corporate boundaries may be extended is to be liberally construed in favor of the public.” Id.

III. The Merits

A. Conversion and Presumption of Validity

The most contentious and complicated issue in this case is a thorny matter of statutory interpretation:. namely, is Cedar Rapids’ request to annex the Pruss property entitled to a presumption of validity because it was “converted” from Pruss’s denied application for voluntary annexation? This question involves the juxtaposition of two sections of Iowa’s city development statute, which taken together involve three discrete legal principles. Iowa Code section 368.6 establishes (1) a presumption of validity for applications for voluntary annexation; section 368.7 provides (2) a denied voluntary annexation request shall be “converted” into an involuntary annexation petition, but (3) this transformation shall not prejudice the status of the applicant. Pruss argues a converted petition is still entitled to a presumption of validity, because if the presumption of validity did not survive the conversion, so to speak, he would be prejudiced. The Committee, in line with the district court, takes a narrower view.

Because of the complexity of the statute, we think it is best to work through the analysis to be applied in this case step-by-step, and in stride with the actions of the Board and the Committee. We begin with the Board’s initial decision in 1997 to deny the Pruss application for voluntary annexation, while it tabled the contemporaneously filed Hiawatha petition for involuntary annexation which contained common territory. Iowa’s city development statute provides:

If one or more applications for a voluntary annexation and one or more petitions for an involuntary annexation or incorporation for a common territory are submitted to the board within thirty days of the date the first application or petition was submitted to the board, the board shall approve the application for voluntary annexation, if the application meets the applicable requirements of this chapter, unless the board determines by a preponderance of the evidence that the application was filed in bad faith, or that the application as filed is contrary to the best interests of the citizens of the urbanized area, or that the applicant cannot within a reasonable time meet its obligation to provide services to the territory to be annexed sufficient to meet the needs of the territory.

Iowa Code § 368.7(4) (emphasis added). Elsewhere the statute forbids the creation of an island of unincorporated territory. See id. § 368.7(3); see also id. § 368.1(10). In this respect, the Board properly denied the Pruss application for voluntary annexation, because it would have created an island of unincorporated territory, and thus did not meet the applicable requirements of the chapter.

After the Pruss application was denied, the Board notified Cedar Rapids that it might resurrect the denied Pruss application by converting it into an involuntary petition. The relevant portion of the statute states:

If an application for voluntary annexation is not approved pursuant to this section, the board shall cause the conversion of the application to a petition pursuant to section 368.13 and shall proceed under section 368.14A. The conversion of an application to a petition shall not prejudice the status of the applicant.

Id. § 368.7(4); see id. § 368.13 (“The board may request a city to submit a plan for city development or may formulate its own plan for city development. A plan submitted at the board’s initiation must include the same information as a petition and be filed and acted upon in the same manner as a petition.”). Cedar Rapids passed a resolution authorizing the filing of a request to convert Pruss’s, denied application for voluntary annexation into an involuntary annexation, and it was so converted. The Board then formed a special local committee to weigh the two competing involuntary annexation requests. See id. § 368.14A (providing for the formation of a special local committee to adjudicate competing involuntary petitions).

At issue before the special local committee was whether the Cedar Rapids petition was entitled to a presumption of validity. With little explanation, the Committee ruled it was not. The district court affirmed. For the reasons that follow, we agree.

Iowa’s city development statute manifests a preference for voluntary annexation of land when both voluntary and involuntary annexations compete. Hiawatha I, 609 N.W.2d at 501 (citation omitted). This preference is demonstrated in at least two respects in the statute. First, the legislature did not require applications for voluntary annexation to undergo many of the costly procedures which are required of petitions for involuntary annexation, such as public hearings and elections. Gorman v. City Dev. Bd., 565 N.W.2d 607, 609 (Iowa 1997); City of Waukee v. City Dev. Bd., 514 N.W.2d 83, 87-88 (Iowa 1994) (Waukee I); City of Des Moines, 473 N.W.2d at 200; see, e.g., Iowa Code § 368.11 (listing contents of petitions). Second, applications for voluntary annexation are explicitly afforded a presumption of validity. Iowa Code § 368.6; see Hiawatha I, 609 N.W.2d at 501. This presumption results from a stated legislative desire to “give due consideration to the wishes of the residents of territory to be annexed, and to the interests of the residents of all territories affected.by an annexation.” Iowa Code § 368.6. The legislature expressly assumed “a voluntary annexation of territory more closely reflects the wishes of the residents of territory to be annexed....” Id.

The presumption of validity, however, is not a nebulous concept simply inscribed in general terms in the Code. The presumption is specifically borne out in section 368.7, which outlines the procedures for the voluntary annexation of territory. The Board is required to approve such an annexation unless a preponderance of the' evidence shows the application was filed in bad faith, the annexation is contrary to the best interests of the urbanized area, or services cannot be sufficiently provided in a reasonable period of time. Id. § 368.7. Likewise, an application for voluntary annexation must be denied if it runs afoul of other aspects of the statute, such as the prohibition against the creation of islands of unincorporated territory. See id. (application must meet “applicable requirements of this chapter”). If proved, these four conditions — three specific, one general— defeat the presumption of validity for a-voluntary annexation. Otherwise the application must be approved. When read in context with legislative intent as expressly stated in Iowa Code section 368.6, the statute plainly strikes a balance between the wishes of the residents of the territory under consideration for annexation against other important public policy concerns. Pruss’s application for- voluntary annexation of his land to Cedar Rapids was denied because it ran afoul of public policy insofar as it would create an island of unincorporated territory. The legislative aversion to islands simply outweighs the legislative desire to comply with the wishes of the residents of the territory in question.

Pruss now argues this conversion should not prejudice his application in any respect and his application for annexation, although “converted,” should still therefore be afforded a presumption of validity. At the outset, we note it is difficult to understand what form such a presumption would take. Indeed, the only statutorily prescribed mechanism for carrying out such a presumption is embedded in the four de-feasibility conditions set forth above— three specific, one general — which, of course, only apply to voluntary applications. The Cedar Rapids petition for involuntary annexation, albeit converted from Pruss’s application for voluntary annexation, is not itself a voluntary application.

Although Pruss often complains it is nonsensical to refer to the converted annexation request as an involuntary petition because, in truth, he is the only landowner and he consents to annexation to Cedar Rapids, his argument mistakenly equates the legislature’s use of the “voluntary” and “involuntary” nomenclature as an immutable characterization of the consent or lack thereof of the residents of the land sought to be annexed. In truth, the terms are merely shorthand appellations used by the legislature to describe the form, of the action, and do not necessarily reflect the wishes of all the residents of the land in question. While it is true these appellations generally correspond to the preferences of the residents, the correlation is not perfect. The distinction is readily apparent upon a close inspection of the statute: in some voluntary annexations, for example, up to twenty percent of the landowners might not consent. See id. § 368.7 (providing for so-called 80/20 annexation wherein voluntary annexation may be permissible if no more than twenty percent of landowners object). We implicitly recognized this important distinction in Hiawatha I. 609 N.W.2d at 500 (carefully using the terms “consenting” and “nonconsent-ing”).

If accepted, Pruss’s argument that converted involuntary petitions must be afforded a presumption of validity would destroy the statutory framework at issue, which simply puts failed voluntary applications on a level playing field with involuntary applications, for the policy reasons announced above. In many respects, then, Pruss’s argument is the converse of an argument leveled in our first case decided under the new city development statute, City of Des Moines. In that case, we rejected an argument which would have eviscerated the distinction between voluntary and involuntary annexations and resulted in the imposition of all the technical elements of involuntary annexation procedure, including a public hearing and an election, in certain voluntary annexations. See City of Des Moines, 473 N.W.2d at 200. We rejected such an interpretation because it would have “render[ed] meaningless the distinction between voluntary and involuntary annexations” and “thwart[ed] the legislative scheme of distinguishing between [the two].” Id. at 201. The same basic principle applies here; we will not adopt an interpretation of the statute which eviscerates the distinction between voluntary and involuntary annexations.

The better interpretation of the statutory language that “[t]he conversion of [a denied] application to a petition shall not prejudice the status of the applicant” is that conversion should not prejudice the applicant’s status as a valid participant in the process. That is, the mere fact of the prior denial should not be held against the applicant. In the present case, Pruss was not prejudiced; although the Cedar Rapids involuntary petition was filed well after the competing Hiawatha petition (and was thus assigned a new file number, etc.), it was nonetheless considered as if filed contemporaneously with it. See Iowa Code § 368.11 (“Within ninety days of receipt of a petition, the board shall initiate appropriate proceedings or dismiss the petition. The board may combine for consideration petitions or plans which concern the same territory.... The combined petitions may be submitted for consideration by a special local committee pursuant to section 368.14A”). As the trial judge wrote:

[T]he requirement that the status of the applicant not be prejudiced can only mean that a converted petition will be considered to have been timely filed and procedurally correct, and that the Committee, in later considering the converted petition with competing petitions, will not hold the fact that the application originally was not approved against the applicant.... Nothing in the statute or the administrative code grants such a preference to a converted petition. Rather, Pruss and Cedar Rapids were only entitled to have their Petition considered timely filed and procedurally correct, and to be given fair and equal consideration in spite of the fact that their annexation request earlier had been disapproved.

We agree with this analysis in principle, although we reserve the right to determine its precise contours in a case where it is a determinative issue. In this case, we hold the Cedar Rapids petition for involuntary annexation was not entitled to a presumption of validity and therefore Pruss was not “prejudiced” within the meaning of the conversion section of Iowa’s city development statute when the Board made its decision without applying such a presumption.

B. Services

Pruss and Cedar Rapids claim there was not substantial evidence in the record from which the Committee could conclude that Hiawatha could provide substantial municipal services and benefits not previously enjoyed by the annexed territory. See Iowa Code § 368.17(4); Dickinson County, 521 N.W.2d at 468-471; Deer Creek Homeowners Ass’n v. City Dev. Bd., 556 N.W.2d 155, 159 (Iowa Ct.App.1996). Much of the argument centers around whether Hiawatha could provide sanitary sewer service to the area. Pruss and Cedar Rapids point to facts which, they maintain, show why the Committee should have chosen Cedar Rapids and not Hiawatha.

Critical to our decision on this issue is our standard of review, enunciated above. Pruss and Cedar Rapids’ primary complaint is that the Committee’s decision lacked substantial supporting evidence. See Iowa Code § 368.22; City of Des Moines, 473 N.W.2d at 202. There is substantial evidence “[i]f a reasonable person would find the evidence adequate to reach [such] a decision....” City of Des Moines, 473 N.W.2d at 199.

After an exhaustive review of the record, we conclude a reasonable person would find the evidence adequate to reach the conclusion that Hiawatha could provide substantial municipal services and benefits not previously enjoyed by the annexed territory. Although the Committee’s discussion of the issue is limited, Hiawatha contended it would provide the area with a significant bonding capacity, police and fire protection, public works, a library, parks and playgrounds, and sanitary sewer and water services. The Committee apparently accepted Hiawatha’s contentions. There is substantial evidence in the record to support the Committee’s decision, and for this reason it must be upheld. See Iowa Code § 368.17(4).

We recognize there is also substantial evidence in the record to show Cedar Rapids could provide the Pruss property with substantial new municipal services and benefits. Indeed, the Committee appeared to recognize the same, when, after it surveyed Cedar Rapids’ ability to serve the area, it noted that “it was not prohibited from approving either petition.” Review of the relevant hearing transcripts clearly indicates in the final analysis the Committee chose Hiawatha because it determined approval of the Hiawatha petition was in the public interest. The Committee decided that unless it approved the Hiawatha petition, Hiawatha would become landlocked; the Committee determined approval of the Cedar Rapids petition would deprive Hiawatha of any future growth and deny landowners north and west of the Pruss property “a choice between cities in future annexations.”

Although Pruss does not appear to specifically challenge this aspect of the Committee’s decision, we find nothing arbitrary or unreasonable with such an idea. “[L]egislation establishing the methods by which municipal corporate boundaries may be extended is to -be liberally construed in favor of the public.” City of Des Moines, 473 N.W.2d at 200. The Board is charged with “overseeing long-range planning and orderly development of cities.” City of Waukee v. City Dev. Bd., 590 N.W.2d 712, 720 (Iowa 1999) (Waukee II). So long as approval is not otherwise barred, “the committee shall approve any proposal which it finds to be in the public interest.” Iowa Code 368.16. In this case, approval to Hiawatha was not barred and the Committee expressly determined the public interest would be better served if the Pruss property were annexed to Hiawatha and not Cedar Rapids. Cf. Waukee II, 590 N.W.2d at 720-21. The district court properly affirmed the Committee’s decision.

C. Notice & Election

The petitioners’ two remaining arguments may be readily disposed of on error preservation grounds. First, Pruss and Cedar Rapids plaim, the Committee did not provide proper notice of a pre-hearing conference held on May 29, 2001. See Iowa Code § 368.15; Iowa Admin. Code r. 263 — 3.11 (1991) (requiring notice be given to all parties). Hiawatha requested the conference because it wanted to resolve two issues (1) whether the converted annexation petition was entitled to a presumption of validity and (2) whether Hiawatha was permitted to amend its petition to delete those parcels from its proposal which had, in the meantime, been annexed to other municipalities. The district court ruled the petitioners did not preserve error. In the alternative, the court ruled the petitioners could not show prejudice because all parties had actual notice and were present.

Although the petitioners attended the pre-hearing conference and even filed papers in advance of it, they did not claim the Committee failed to provide proper notice. It is well-settled that judicial review of administrative action is limited to questions considered by the agency. Anderson v. City Dev. Bd., 631 N.W.2d 671, 673 (Iowa 2001); McCracken v. Iowa Dep’t of Human Servs., 595 N.W.2d 779, 785 (Iowa 1999); Soo.Line R.R. v. Iowa Dep’t of Transp., 521 N.W.2d 685, 688 (Iowa 1994). We agree with the district court that the petitioners failed to preserve error, and deem this issue waived. See City of Hampton v. Iowa Civil Rights Comm’n, 554 N.W.2d 532, 536 (Iowa 1996).

Pruss and Cedar Rapids also claim the Board improperly ordered the election on the Hiawatha proposal. The relevant statute provides as follows:

If a petition ... is approved, the board shall set a date not less than thirty days nor more than ninety days after approval for a special election on the proposal.

Iowa Code § 368.19. Pruss and Cedar Rapids argue the Board acted illegally because it scheduled the election before issuing its final written opinion. Once again, however, the petitioners failed to raise this argument at the agency level. Petitioners thus failed to preserve error on this issue, as well. See Anderson, 631 N.W.2d at 673.

IV. Conclusion

We find the Committee acted legally and its decision was supported by substantial evidence. Once converted from Pruss’s application for voluntary annexation, the Cedar Rapids petition to involuntarily annex Pruss’s land was not entitled to a presumption of validity. In addition, the decision of the Committee to approve annexation to Hiawatha was supported by substantial evidence. Lastly, Pruss and Cedar Rapids did not preserve error on their challenges to notice of a pre-hearing conference and the holding of an election. We therefore affirm the district court in all respects. All remaining arguments not specifically addressed in this opinion are rejected as lacking merit or moot given our disposition of the principal issues in this case.

AFFIRMED.

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

      . In the district court, Cedar Rapids also argued the Committee was not permitted to allow a pre-hearing amendment to delete lands from its petition which had, in the interim, been voluntarily annexed to other cities, including lands which were the subject of Hiawatha I and Hiawatha II. Cedar Rapids claimed the Committee violated Iowa Code § 368.18 (2001) and the Iowa Administrative Code when it amended the petition before a public hearing was held. The district court disagreed and ruled there was substantial compliance with chapter 368; in the alternative, the court also found the petitioners did not suffer any prejudice. Although the Attorney General, on behalf of the Board and Committee, briefs this issue again, it does not appear that the petitioners have reasserted this argument on appeal. We therefore do not address it.

      . Although not applicable to the present case, the legislature recently lessened the extent of this preference, requiring cities to hold public hearings and provide notice before approving certain voluntary annexations. See 2002 Iowa Acts ch. 1132, §§ 6, 11 (codified at Iowa Code § 368.7(1) (2003)).

      . It is also unclear whether Pruss actually resides on the property in question, or simply owns it. It is unsettled whether the presumption of validity would apply to non-resident owners. See Iowa Code § 368.6 (in discussing presumption of validity, noting legislative desire to give "due consideration to the wishes of the residents of territory to be annexed, and to the interests of the residents of all territories affected by an annexation”) (emphasis added). The parties do not address this possible issue on appeal, however, and we do not consider it.

      . It does not matter that the original reason Pruss's application for voluntary annexation was denied — the creation of an island of unincorporated territory' — had disappeared by the time of the hearing on the converted request on account of other subsequent annexations. (Indeed, had circumstances not so changed, Iowa Code § 368.17(7) would have required the Committee to deny the converted request for annexation.) While at first blush one might presume that the reason which defeated the presumption of validity would still be present after the application was converted to a petition — thereby justifying the continued placement of the converted request "on the same footing” as petitions for involuntary annexation — on further reflection it is apparent that where the process for annexation is long and drawn out, the circumstances that cause denial of the application may change. For example, in some cases, in the lapse of time between the denial of the application for voluntary annexation and the hearing on the resulting converted petition, the ability of the city to which annexation is proposed to provide services to the annexed area might improve. In other cases the best interests of the area might change. It is clear, then, that Iowa's city development statute gives applicants for voluntary annexation “one shot” at a presumption of validity, at a given point in time. It is to this framework that we are bound, which encourages the speedy resolution of problem-free voluntary annexations. Accord City of Des Moines, 473 N.W.2d at 200-01. As Justice Holmes once remarked for the court, "[t]he Legislature has the power to decide what the policy of the law shall be, and if it has intimated its will, however indirectly, that will should be recognized and obeyed.” Johnson v. United States, 163 F. 30, 32 (1st Cir.1908).

      . Hiawatha's sewage is treated by the Cedar Rapids Wastewater Treatment Plant pursuant to a longstanding agreement. Cf. Hiawatha II, 609 N.W.2d at 536 (agreement for library services).