author: WILLIS, Judge. MINGE, Judge

text:
    In re the Marriage of Jeremy James ZANDER, petitioner, Respondent, v. Melinda Alice ZANDER, Appellant.
    No. A05-2094.
    Court of Appeals of Minnesota.
    Aug. 22, 2006.

      Anne Heimkes Tuttle, Tuttle & Berge-son, Shakopee, MN, for respondent.
    Kevin J. Wetherille, Jaspers, Moriarty & Walburg, P.A., Shakopee, MN, for appellant.
    Considered and decided by RANDALL, Presiding Judge; WILLIS, Judge; and MINGE, Judge.
   OPINION

WILLIS, Judge.

In this appeal from a dissolution judgment, appellant wife argues that the district court abused its discretion by denying her motion for amended findings or alternatively a new trial because (1) respondent husband’s change of residence after the dissolution trial is a sufficient basis for amended findings or a new trial; (2) the district court abused its discretion by awarding the parties joint legal and physical custody of their children when the record shows that the parties are unable to communicate or cooperate; and (3) the district court erred by concluding that the per capita payments appellant wife received from the Shakopee Mdewakanton Sioux (Dakota) Community during the parties’ marriage were marital property. Because the record supports the district court’s findings and we agree with the district court’s legal conclusions, we affirm.

FACTS

Appellant Melinda Alice Zander (wife) and respondent Jeremy James Zander (husband) have known each other since grade school, began dating in 1999, and were married in September 2001. Wife has two children, currently ages 15 and 12, from two previous relationships. Husband adopted both children in November 2001. During the marriage, husband was voluntarily unemployed, and wife did not work but received monthly per capita payments from the Shakopee Mdewakanton (Dakota) Sioux Community (Mdewakanton Community). The parties separated in January 2004. After the separation, husband lived in a trailer home owned by wife on the Mdewakanton reservation, and wife lived in Jordan, Minnesota.

In January 2004, husband petitioned for dissolution. In February 2004, the district court issued a temporary order granting the parties joint legal custody and wife sole physical custody of the children, subject to husband’s parenting time. The district court conducted a trial on the dissolution from March 15 to 18, 2005, during which the court heard testimony from 13 witnesses, met in camera with the parties’ children, and received 43 exhibits. In June 2005, the district court issued its dissolution judgment, granting the parties joint legal and physical custody and ordering a division of the parties’ marital property. In July 2005, wife moved for amended findings or, in the alternative, a new trial. The district court denied the motion, and wife’s appeal follows.

ISSUE

Did the district court abuse its discretion by denying wife’s motion for amended findings or a new' trial?

ANALYSIS

Wife appeals from both the dissolution judgment and the district court’s order denying her motion to amend its findings or, in the alternative, for a new trial. A motion to amend findings must be based on the files, exhibits, and minutes of the court, not on evidence that is not a part of the record. Otte v. Otte, 368 N.W.2d 293, 299 (Minn.App.1985) (applying Minn. R. Civ. P. 52.02). When considering a motion for amended findings, a district court “must apply the evidence as submitted during the trial of the case” and “may neither go outside the record, nor consider new evidence.” Rathbun v. W.T. Grant Co., 300 Minn. 223, 238, 219 N.W.2d 641, 651 (1974). This court reviews denials of such motions under an abuse-of-diseretion standard. See Lewis v. Lewis, 572 N.W.2d 313, 315 (Minn.App.1997) (noting that the purpose of a motion to amend findings is to permit the district court to review its own exercise of discretion), review denied (Minn. Feb. 19,1998).

A district court’s findings “shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the [district] court to judge the credibility of the witnesses.” Minn. R. Civ. P. 52.01. A finding is “clearly erroneous” when this court has “the definite and firm conviction that a mistake has been made.” Vangsness v. Vangsness, 607 N.W.2d 468, 472 (Minn.App.2000) (quotation omitted). When determining whether findings are clearly erroneous, this court views the record in the light most favorable to the district court’s findings. Id.

A party may move for a new trial on the grounds of: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence; (3) fraud; (4) a void judgment and decree or order; or (5) satisfaction, release, or discharge of the judgment. Minn.Stat. § 518.145, subd. 2 (2004). This court reviews a district court’s decision whether to order a new trial for an abuse of discretion. Halla Nursery, Inc. v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn.1990).

I.

Wife argues that the district court’s findings regarding husband’s residence are clearly erroneous and that the district court’s failure to amend its findings was an abuse of discretion. According to wife, when the district court made its custody determination, it placed “special emphasis” on the fact that husband resided on the reservation. Wife claims that husband did not intend to continue living on the reservation despite his testimony to the contrary and argues that her claim is supported by the fact that husband left the reservation residence shortly after the dissolution trial and began to live in a home that was not on the reservation.

In its order denying wife’s motion, the district court concluded that because wife’s allegations “concern post-trial conduct,” they “cannot be a basis for amended findings.” The district court found that, because husband “did not promise to live forever in the trailer on the reservation, nor did the Court order or expect him to do so,” there was “no evidence that [husband] misrepresented his intentions to the Court so as to constitute fraud.” The district court also concluded that husband’s “post-trial conduct” was not newly discovered evidence because it was not evidence that existed at the time of the trial.

The record shows that husband lived on the reservation at the time of the dissolution trial. The fact that husband moved after the dissolution trial, even before the district court issued its judgment, is evidence outside the trial record and therefore could not be considered by the district court in determining whether to amend its findings. The district court did not abuse its discretion by denying wife’s motion to amend its findings relating to husband’s residence.

Also, the fact that husband moved from the reservation after the dissolution trial does not show that husband intended to deceive the district court by testifying that he intended to stay on the reservation. The record shows that husband testified that he hoped to move to a larger house in the future and that he did not represent that such a future house would necessarily be on the reservation. And the district court correctly concluded that the fact that husband moved after the dissolution trial is not “newly discovered evidence.” Generally, newly discovered evidence “must have been in existence at the time of trial but not known to the party at that time.” Swanson v. Williams, 303 Minn. 433, 436, 228 N.W.2d 860, 862 (1975). Because wife has provided no evidence of fraud or newly discovered evidence on which a new trial could be ordered, the district court did not abuse its discretion by denying wife’s motion for a new trial.

II.

Wife argues that the district court abused its discretion by awarding the parties joint legal and physical custody of their children when the record shows that the parties are unable to cooperate in raising their children and that an intermediary is necessary to facilitate cooperation between the parties. In its order denying wife’s motion for amended findings or a new trial, the district court concluded that it was “satisfied that the record sufficiently supports the result reached in the Judgment.” Appellate review of a custody determination is limited to determining whether the district court abused its discretion by making findings unsupported by the evidence or by improperly applying the law. Silbaugh v. Silbaugh, 543 N.W.2d 639, 641 (Minn.1996); Pikula v. Pikula, 374 N.W.2d 705, 710 (Minn.1985). To assure proper consideration of children’s best interests, the legislature has identified factors that a district court must consider when making a custody determination. Minn.Stat. § 518.17, subd. 3(a) (2004); see Minn.Stat. § 518.17, subd. 1(a) (2004) (enumerating best-interests considerations). When a party seeks joint physical custody, the district court is required to consider four additional factors: the parents’ ability to cooperate, their methods of resolving disputes, whether it would be detrimental to the child for one parent to have sole authority over the child’s upbringing, and whether domestic abuse has occurred between the parents. Minn.Stat. § 518.17, subd. 2 (2004).

Review of the judgment here shows that the district court made lengthy and detailed findings on the best-interests factors and the joint-custody factors to support its award of joint legal and physical custody. Wife challenges the district court’s findings on two of the four joint-custody factors.

When a district court awards joint legal or physical custody over the objection of one parent, the court must make detailed findings on each of the statutory joint-custody factors and explain how the factors led to the court’s determination that joint custody would be in the best interests of the child. Id. “The court shall use a rebuttable presumption that upon request of either or both parties, joint legal custody is in the best interests of the child.” Id. Here, before trial, husband requested joint legal and sole physical custody of the children, and wife requested sole legal and physical custody. Although at trial wife continued to seek sole physical custody, husband testified that he was in agreement with the custody evaluator’s recommendation for joint legal and physical custody and that he would cooperate with an award of joint custody.

A. Ability of Parents to Cooperate

The district court found that “the parties have the ability to cooperate in parenting the children.” Wife argues, however, that the record demonstrates “a clear inability of the parties to cooperate with respect to raising their children” and shows that the parties are unable to communicate regarding the children and have different parenting philosophies. In support of her position, wife points to (1) the facts that husband allowed their son to rent a violent video game and allowed their daughter to get her ears pierced when husband knew that wife disapproved of both; (2) the fact that husband allowed their daughter to sleep in his bed with him; (3) husband’s testimony that the parties do not agree on parenting styles and do not communicate; and (4) the custody evaluator’s testimony that the parties do not agree on “parenting issues.”

The district court stated that it was “mindful of the fact that the parties have been under stress during the pendency of the dissolution proceeding and that this situation has affected their relationship with each other, including their ability to communicate” but that “the parties have a history of effective co-parenting and have indicated their desire to do what is best for their children.” The district court further found that the “parties have cooperated since the separation with respect to the temporary parenting time arrangements and have worked together with a parenting expeditor and the custody evaluator.” The record supports the district court’s findings.

The parenting-time expeditor testified that the parties “did a fine job” reaching and following through on an agreement regarding a holiday parenting schedule; that wife allowed husband to have extra parenting time with the children; and that, although the parties needed the parenting-time expeditor’s assistance to resolve parenting-time issues during the dissolution, “after divorces are final and things are more resolved that typically people are able to deal with more and more of their issues on their own.”

The custody evaluator testified that despite the fact that she believed this to be “a particularly conflictual dissolution matter,” she recommended joint physical custody because she believes “that the parties would be able to work together despite what ha[d] gone on” during the dissolution because “they have worked very well with [a parenting-time] expeditor.” The custody evaluator testified that she believes that the parties have the same goals and objectives for their children; that “the parties really can agree on ... big issues”; and that “it would be detrimental to the children if one or the other party were to have the children in sole physical custody.” The custody evaluator further testified that she believes that the parties “would learn to co-parent their children as time goes by when all this is over and done”; that the parties’ different parenting styles create a good balance for the children; and that these differences would not cause problems for the parties because they have demonstrated that they love their children and would put them first. The custody evaluator recommended that the parties continue to use a parenting-time expeditor after the dissolution.

Although the record shows that both of the parties testified to having difficulties communicating and agreeing during the dissolution, the record also shows that both cooperated with the parenting-time arrangements and disciplinary issues during the separation and both acknowledge that the children want equal time with both parents. We conclude that the district court’s finding on this joint-custody factor is supported by the record.

B. Methods for Resolving Disputes

The district court found that

[t]he parties have a history of being able to communicate with each other regarding the children’s needs and best interests. The Court does not expect that the parties will always agree with each other regarding parenting decisions, but they have demonstrated their ability to talk, seek and follow guidance, and work things out. The custody evaluator recommends that they use the services of a parenting time expeditor for a period of time following the dissolution to assist them in making the transition from adversarial parties to co-parents. Since they have interacted effectively with an expeditor during the pendency of this case, this appears to be an appropriate way for them to learn to communicate and work together following the dissolution.

Wife argues that in this finding the district court “placed emphasis on the use of a parenting time expeditor to resolve actual parenting decisions not just parenting time disputes” and that a parenting-time expeditor is not statutorily charged with resolving disputes unrelated to parenting time. The purpose of a parenting-time expeditor is “to resolve parenting time disputes by enforcing, interpreting, clarifying, and addressing circumstances not specifically addressed by an existing parenting time order and, if appropriate, to make a determination as to whether the existing parenting time order has been violated.” Minn.Stat. § 518.1751, subd. lb(a) (2004).

We conclude that the district court intended that the parties should continue to use the parenting-time expeditor as they did during the dissolution process and that the district court believed that the parties, with time, could work together on issues relating to their children. When evidence shows that parties to a dissolution are completely unable to communicate and cooperate, joint legal custody is not appropriate. Wopata v. Wopata, 498 N.W.2d 478, 482 (Minn.App.1993) (concluding that district court’s finding that “parents are totally unable to agree” and “communication between them is impossible” did not support a joint-custody award).

But here the record shows that the parties were able to agree to and follow through with a parenting-time schedule and support each other in matters relating to the discipline of the children. The record also shows that the parties live close to each other, allowing the children to transfer between homes without disrupting their school and social lives; that both parties are able to provide the children with a safe home; and that the children have repeatedly stated that they want to spend equal time with each parent. Further, the custody evaluator testified that the children would be harmed if either parent were to have sole physical custody. All of these facts support the district court’s joint-custody award. Although the record could support a different custody award, this court may not substitute its judgment for that of the district court when reviewing custody determinations. McCabe v. McCabe, 430 N.W.2d 870, 873 (Minn.App.1988), review denied (Minn. Dec. 30,1988).

Because the district court made findings on the statutory factors relating to custody, including those related to joint custody, and the record supports its findings, we conclude that the district court did not abuse its discretion by awarding the parties joint legal and physical custody of their children.

III.

Wife challenges the district court’s characterization of her per capita payments from the Mdewakanton Community during the parties’ marriage as marital property. The district court concluded that her “interest in the Mdewakanton Community’s businesses is a non-marital asset, belonging only to her, [but that] the income received from the asset during the parties’ marriage is marital property.”

“Whether property is marital or nonmarital is a question of law, but a reviewing court must defer to the trial court’s underlying findings of fact.” Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn.1997). Property received by either spouse during a marriage is presumed to be marital. Minn.Stat. § 518.54, subd. 5 (2004). A party can rebut this presumption by showing that the property fits into one of the following categories of nonmarital property listed in Minn.Stat. § 518.54, subd. 5:

(a) is acquired as a gift, bequest, devise or inheritance made by a third party to one but not to the other spouse;
(b) is acquired before the marriage;
(c) is acquired in exchange for or is the increase in value of property which is described in clauses (a), (b), (d), and (e);
(d) is acquired by a spouse after the valuation date; or
(e) is excluded by a valid antenuptial contract.

See also Robert v. Zygmunt, 652 N.W.2d 537, 541 (Minn.App.2002) (discussing rebuttal of presumption), review denied (Minn. Dec. 30, 2002). A party claiming a nonmarital interest in property “must prove the necessary underlying facts by a preponderance of the evidence.” Wiegers v. Wiegers, 467 N.W.2d 342, 344 (Minn. App.1991).

Wife argues that the per capita payments she received from the Mdewakanton Community during the parties’ marriage are nonmarital property because the “payments are unique to her birthright as a member of the Mdewakanton Sioux, a sovereign nation.” The district court found that as a member of the Mdewakanton Community; wife “receives monthly per capita payments of approximately $84,000.00, based upon her 2004 federal income tax form 1099” and that these “payments flow from the revenue generated by the Community’s casino and other business interests.” The district court concluded, therefore, that such payments constituted income.

“ ‘Income’ means any form of periodic payment to an individual.” Minn. Stat. § 518.54, subd. 6 (2004). And income acquired from a nonmarital asset during a marriage is marital property that is divisible between parties upon dissolution. Swick v. Swick, 467 N.W.2d 328, 331 (Minn.App.1991) (concluding that the interest that a nonmarital certificate of deposit earned during parties’ marriage was income that should be divided as a marital asset upon dissolution), review denied (Minn. May 16, 1991); see also Gottsacker v. Gottsacker, 664 N.W.2d 848, 854 (Minn. 2003) (“Cash dividends ... [are] income and; therefore, [are] marital property.”) (quoting Nardini v. Nardini, 414 N.W.2d 184, 194 (Minn.1987)); cf. Minn.Stat. § 518.58, subd. 1 (2004) (stating “[i]t • shall be conclusively presumed that each spouse made a substantial contribution to the acquisition of income and property while they were living together as husband and wife”). Further, wife does not argue that she kept the monthly payments she received from the Mdewakanton Community separate from the marital estate. Therefore, even if the funds originating with the Mdewakanton Community could have, been classified as wife’s nonmarital- property, she failed to show that result to be appropriate here. Cf Swick, 467 N.W.2d at 330. Under these circumstances, we . conclude that wife’s monthly payments from the Mdewakanton Community fall within the statutory definition of income and, therefore, such payments received during the marriage are, to the extent that the funds were not expended during the marriage, marital property subject to division upon dissolution.

Wife argues that this court should conclude that the per capita payments are nonmarital property because the “Mdewakanton Sioux Tribal Domestic Relations Code specifically states that all per capita payments are non-marital property belonging to ' the tribal member.” The district court declined to apply this code provision because wife provided no legal authority to support her argument that the provision was controlling authority in the state district court. Husband argues that the code provision may apply to dissolutions brought in the tribal court but does not apply to this matter before the Minnesota state courts. Husband cites 28 U.S.C. § 1360 (2000), which provides:

(a) Each of the States listed in the following table shall have jurisdiction over civil causes of action between Indians or to which Indians are parties which arise in the areas of Indian country listed opposite the name of the State to the same extent that such State has jurisdiction over other civil causes of action, and those civil laws of such State that are of general application to private persons or private property shall have the same force and effect within such Indian country as they have elsewhere within the State:
Minnesota.All Indian country within the State, except the Red Lake Reservation.
(c) Any trib’al ordinance or custom heretofore or hereafter adopted by an Indian tribe, band, or community in the exercise of any authority which it may possess shall, if not inconsistent with any applicable civil law of the State, be given full force and effect in the determination of civil causes of action pursuant to this section.

(Emphasis added.) Because Minnesota law governs this dissolution and because the Mdewakanton Sioux Tribal Domestic Relations Code is inconsistent with Minnesota law, the tribal-code provision relied on by wife does not apply.

Wife relies on Kucera v. Kucera, 275 Minn. 252, 146 N.W.2d 181 (1966), to support her claim that husband should not receive any portion of the per capita payments that she received during their marriage. In Kucera, the supreme court affirmed a district court’s decision to make no property award when the parties had a marriage in name only and lived together for less than a year. 275 Minn, at 256, 146 N.W.2d at 184. Kucera is distinguishable because here the parties lived together during all of their four-year marriage and wife does not claim that their marriage was one in name only.

When the district court concluded that “an equal distribution of the marital property” was “fair and equitable,” it considered the factors in Minn.Stat. § 518.58, subd. 1 (2004), and found that “[w]hile [wife] obviously contributed most of income, [husband] was at least an equal participant in the marriage, and there is some evidence to suggest that he did more than [wife], in terms of parenting and childcare.” The record supports this finding. The district court did not, therefore, abuse its discretion by distributing the marital property equally. See Swanstrom v. Swanstrom, 359 N.W.2d 634, 636 (MinmApp. 1984) (providing that in dissolution cases, district courts have very broad discretion to determine how income and property are to be distributed).

DECISION

Because the record supports the district court’s findings and because we agree with the district court that (1) husband’s change of residence after the dissolution trial is insufficient basis for amended findings or a new trial; (2) the award of joint legal and physical custody to the parties is supported by the record; and (3) the per capita payments wife received from the Mdewakanton Community during the parties’ marriage are income and therefore are marital property subject to division upon dissolution, we affirm the judgment and conclude that the district court did not abuse its discretion by denying wife’s motion for amended findings or a new trial.

Affirmed.

MINGE, Judge

(dissenting).

I concur in parts I and II of the opinion. I dissent from part III. I would hold that the per capita tribal payments received by appellant were nonmarital property. Minnesota recognizes that a gift, bequest, devise, or inheritance is nonmarital. See Minn.Stat, § 518.54, subd. 5(a) (2004). Although the narrow issue presented in part III of this case is a matter of first impression, at least one reported decision addresses the general subject. See Sheppard v. Sheppard, 104 Idaho 1, 655 P.2d 895 (1982). In Sheppard, the Idaho court found that certain assets held in the name of an enrolled member of the Shoshone-Bannock tribe were community property for purposes of a marriage dissolution. Id. at 918. However, that court’s discussion implies that if the assets or their source had originally been solely from the tribe, they may not have qualified as community property. See id. at 918-19.

In the case before us, the distributions are from the Shakopee Mdewakanton Sioux (Dakota) Community, a governmental entity. These distributions are not ordinary dividends from a nonmarital business investment or a distribution to a beneficiary from an established trust. Instead, they are being paid to appellant as an enrolled member of this particular tribal government. The payments to appellant are not guaranteed. They are determined each year by the tribal government. The amount paid is akin to a lump-sum distribution of tribal government assets which would be parallel to the principle distribution of a gift under Minnesota law. I would conclude that the clearly identified proceeds from tribal per capita distributions to appellant are non-marital property and should be treated accordingly in this dissolution proceeding.

Given my conclusion that the application of Minnesota law to this case would result in the classification of the distributions as nonmarital property, I would not reach the question of any inconsistency between this state’s law and the tribal provision in question.

As has been observed, the case before us is apparently a matter of first impression. One would expect that the parties would notify the Shakopee Mdewakanton Sioux (Dakota) Community of the proceeding and that when a provision of its code is in question, the Community would have had an opportunity to make an appearance in this case. The record does not disclose any such notification or appearance.

      . Wife also relies on Coursolle v. Coursolle, No. C0-02-377, 2002 WL 31501904 (Minn. App. Nov. 12, 2002), an unpublished opinion. "Unpublished opinions of the Court of Appeals are not precedential.” Minn.Stat. § 480A.08, subd. 3(c) (2004). Nevertheless, we conclude that Coursolle is distinguishable on the same grounds as Kucera.


source: Caselaw Access Project

author: MAKING, Justice.

license: Public Domain

text:
    2006 ND 175
    STATE of North Dakota ex rel. NORTH DAKOTA HOUSING FINANCE AGENCY, Plaintiff and Appellee v. CENTER MUTUAL INSURANCE COMPANY, a North Dakota corporation, Defendant and Appellant.
    No. 20050224.
    Supreme Court of North Dakota.
    Aug. 2, 2006.

      Douglas Bruce Anderson, Assistant Attorney General, Office of Attorney General, Bismarck, N.D., for plaintiff and appel-lee.
    Chris A. Edison, Storslee Law Firm, P.C., Bismarck, N.D., for defendant and appellant.
   MAKING, Justice.

[¶ 1] Center Mutual Insurance Company (“Center Mutual”) appealed from a district court judgment holding Center Mutual liable to the North Dakota Housing Finance Agency (“NDHFA”) for the amount of an insurance proceeds check paid over a forged endorsement. We affirm, concluding Center Mutual was not discharged on the improperly paid check and was liable to NDHFA for the amount of the check.

I

[¶ 2] In 1994, Brian and Penny Grieme purchased a house in Mandan. They financed the home with a first-time home buyer loan through Bank Center First and executed a mortgage in favor of the Bank. Bank Center First then assigned the loan and mortgage to NDHFA, the state agency that provides financing of home loans which are insured or guaranteed through the first-time home buyer program. Bank Center First continued to service the loan on behalf of NDHFA. The mortgage revenue bonds used to finance the Griemes’ mortgage were held in trust by Norwest Bank of Minnesota (“Norwest”).

[¶ 3] The mortgage required the Griemes to obtain insurance coverage for the home. The Griemes purchased a dwelling insurance policy from Center Mutual. NDHFA and Norwest were listed as loss payees in the insurance policy, and the insurance premium billing notices were mailed to Norwest and NDHFA, in care of Bank Center First.

[¶ 4] The house was damaged by a hail storm in 2001. Center Mutual’s claims adjuster determined that the loss, after adjusting for a $500 deductible, was $4,378. On July 13, 2001, Center Mutual issued a check for $4,378, drawn on Bremer Bank, N.A., made payable jointly to “Brian D. Grieme & Norwest Bank of MN & ND Housing Finance.” Center Mutual mailed the insurance check to Brian Grieme at his new address in Arizona.

[¶ 5] Grieme presented the check for payment to Wells Fargo Bank of Tempe. The check bore the endorsement signature of Brian Grieme, and underneath in hand-printed block letters were the words “Nor-west Bank” and “ND Housing Finance.” The check was processed through the check collection system and was eventually returned to Bremer Bank for payment from Center Mutual’s bank account. The check was paid, and the canceled insurance check was returned to Center Mutual.

[¶ 6] In November 2001, Bank Center First requested that Center Mutual provide it with a copy of the canceled insurance check. Bank Center First then informed Center Mutual that the endorsements of NDHFA and Norwest were forged. Center Mutual advised Bank Center First that it would contact Bremer Bank about the matter. Center Mutual and Bremer Bank ultimately refused to make payment to NDHFA. In the meantime, the Griemes had canceled the insurance policy, defaulted on the mortgage, and filed for bankruptcy.

[¶ 7] NDHFA sued Center Mutual seeking payment of the $4,378, claiming that Center Mutual had breached the terms of the insurance policy and the mortgage and that Center Mutual was liable to NDHFA on the forged check. On cross-motions for summary judgment, the district court determined that Center Mutual was not liable for breach of the insurance contract or the mortgage. The court concluded, however, that Center Mutual should have sought reimbursement for the forged check through the banks which had accepted the forged endorsement, and that Center Mutual was therefore liable to NDHFA for the amount of the check. Center Mutual has appealed, alleging the district court erred in granting summary judgment awarding $4,378 plus interest to NDHFA.

II

[¶ 8] Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. Farmers Ins. Exch. v. Schirado, 2006 ND 141, ¶8, 717 N.W.2d 576. Whether the district court properly granted summary judgment is a question of law that we review de novo on the record. Id. at ¶ 9.

[¶ 9] Summary judgment is appropriate if the issues in the case are such that the resolution of any factual disputes will not alter the result. State ex rel. Stenehjem v. FreeEats.com, Inc., 2006 ND 84, ¶ 4, 712 N.W.2d 828. In this case there are no disputed issues of material fact, and the relevant questions presented on appeal involve the interpretation of statutes. The interpretation and application of a statute is a question of law, which is fully reviewable on appeal. Id. at ¶ 5. Accordingly, this case was appropriate for resolution on the cross-motions for summary judgment.

Ill

[¶ 10] Center Mutual contends the district court erred in holding it liable to NDHFA, because it owed no specific statutory duty to NDHFA to discover the forged endorsement and its obligation on the instrument was discharged when the check was accepted and paid by Bremer Bank. The dispositive issue presented on appeal is whether a joint payee whose endorsement was forged on an instrument has an action on the instrument against the drawer.

A

[¶ 11] The district court concluded that Center Mutual had a duty under N.D.C.C. § 41-04-37 [U.C.C. § 4-406], to discover the forged endorsement and promptly notify Bremer Bank. Section 41-04-37(3) provides:

If a bank sends or makes available a statement of account or items under subsection 1, the customer shall exercise reasonable promptness in examining the statement or the items to determine whether any payment was not authorized because of an alteration of an item or because a purported signature by or on behalf of the customer was not authorized. If, based on the statement or items provided, the customer should reasonably have discovered the unauthorized payment, the customer has a duty to give prompt notification to the bank of the relevant facts.

NDHFA concedes that N.D.C.C. § 41-04-37(3) does not apply to a forged endorsement, and waives any reliance on the statute.

[¶ 12] That does not, however, end our inquiry. This Court will not set aside a correct result merely because the district court assigned an incorrect reason, if the result is the same under the correct law and reasoning. E.g., Cannaday v. Cannaday, 2003 ND 58, ¶ 8, 659 N.W.2d 363; Wilson v. Koppy, 2002 ND 179, ¶ 14, 653 N.W.2d 68.

B

[¶ 13] The crux of this ease lies in Center Mutual’s contention that its obligation on the instrument was discharged when the draft was accepted and paid by Bremer Bank, and charged against Center Mutual’s account. Center Mutual relies upon N.D.C.C. § 41-03-51(3) [U.C.C. § 3-414], which provides:

If a draft is accepted by a bank, the drawer is discharged, regardless of when or by whom acceptance was obtained. Center Mutual thus contends its obligation to NDHFA was discharged when Bremer Bank accepted the check.

[¶ 14] Although N.D.C.C. § 41-03-51 states the general rule regarding discharge of a drawer, the Uniform Commercial Code contains a more specific provision expressly governing discharge when multiple payees are listed on an instrument. See 41-03-10(4) [U.C.C. § 3-110]. When there is a conflict between statutes, we will construe specific statutes to control general statutes. N.D.C.C. § 1-02-07; Case Credit Corp. v. Oppegard’s, Inc., 2005 ND 141, ¶ 16, 701 N.W.2d 891; City of Bismarck v. Fettig, 1999 ND 193, ¶ 15, 601 N.W.2d 247.

[¶ 15] Section 41-03-10(4), N.D.C.C. [U.C.C. § 3-110], provides, in pertinent part:

If an instrument is payable to two or more persons alternatively, it is payable to any of them and may be negotiated, discharged, or enforced by any or all of them in possession of the instrument. If an instrument is payable to two or more persons not alternatively, it is payable to all of them and may be negotiated, discharged, or enforced only by all of them.

Center Mutual does not contend that the check was payable to Grieme, NDHFA, and Norwest alternatively, and therefore under the statute it could only be negotiated, discharged, or enforced by all of them.

[¶ 16] This Court has not previously addressed a drawer’s liability to a non-alternative joint payee whose endorsement was forged on an instrument. In analogous circumstances, courts in other jurisdictions, applying the current version of U.C.C. § 3-110(4) and the substantively identical pre-1990 version [prior U.C.C. § 3-116] of the statute, have held that the drawer is not discharged on the instrument and is liable to the joint payee. See Crystaplex Plastics, Ltd. v. Redevelopment Agency, 77 Cal.App.4th 990, 92 Cal.Rptr.2d 197, 202-04 (2000); General Motors Acceptance Corp. v. Abington Cas. Ins. Co., 413 Mass. 583, 602 N.E.2d 1085,1087-89 (1992) [“GMAC”]; Quintana v. Allstate Ins. Co., 378 N.W.2d 40, 43-44 (Minn.Ct.App.1985); Lee v. Skidmore, 49 Ohio App.2d 347, 361 N.E.2d 499, 500-01 (1976); see also 5A Ronald A. Anderson, Uniform Commercial Code § 3-116:24 (3d ed.1994) (joint action by all payees “is required to discharge the paper”). The purpose of the statute is “to protect the interests of all parties entitled to payment under the instrument.” Quin-tana, at 43. As noted by the court in GMAC:

If one of the several joint payees can receive payment without authority from the others, there is no assurance that the consideration necessary to extinguish the underlying liability of the drawer will reach the other payees. On the other hand, if payment must be made to all or with the authority of all, there is an obvious tendency to force the payees together, to encourage compromise of their conflicting claims, and to put them on notice in such fashion as to permit them to protect their own interests. The latter rule tends to insure the discharge of the underlying obligation of the drawer to all parties and to protect the interest of the various payees in the proceeds — -the two primary purposes prompting the use of joint-payee instruments.

GMAC, at 1088 n. 4 (quoting Note, Discharge of Joint-Payees Instruments, 1 StamL.Rev. 730, 738 (1949)).

[¶ 17] Under the Uniform Commercial Code, “an unauthorized signature is ineffective except as the signature of the unauthorized signer.” N.D.C.C. § 41-03-40(1) [U.C.C. § 3-403], Therefore, “since the forgery of the payee’s name does not have any effect as a signature, it does not pass title to the paper or release the obli-gor on the paper from the obligation to pay the payee.” 6 Ronald A. Anderson, Uniform Commercial Code § 3-404:34 (3d ed.1998); see also Morris v. Ohio Cas. Ins. Co., 35 Ohio St.3d 45, 517 N.E.2d 904, 909 (1988); 6A Anderson, § 3-419:224 (3d ed.1998).

[¶ 18] We find the reasoning of the courts in GMAC and Crystaplex persuasive. In GMAC, Abington Casualty issued an insurance policy on a vehicle owned by Robert Azevedo. GMAC held a security interest in the vehicle and was a loss payee under the insurance policy. The vehicle was damaged, and Abington issued a check payable jointly to Azevedo and GMAC. Azevedo presented the check for payment without GMAC’s endorsement, and the drawee bank paid the check. GMAC then sued Abington as the drawer of the check to recover the insurance proceeds.

[¶ 19] Applying the pre-1990 version of the Uniform Commercial Code, the court concluded that Abington’s obligation on the instrument to GMAC had not been discharged and that Abington remained liable to GMAC as a payee on the instrument:

In this case, the drawee bank accepted the check, and payment was made to a payee. Ordinarily, an underlying debt is discharged when the check is “ ‘drawn on an account with sufficient funds to cover [it] at a solvent bank’ and is delivered to the payee.” First Nat’l Ins. Co. v. Commonwealth, 391 Mass. 321, 326-327, 461 N.E.2d 789 (1984), quoting Terry v. Kemper Ins. Co., 390 Mass. 450, 455, 456 N.E.2d 465 (1983). Even delivery of a check to the payee’s authorized agent who then cashes it, discharges the drawer’s liability. However, in this case, where there are copayees who are not in an agency relationship, a negotiable instrument cannot be discharged by the actions of only one payee. Section 3-116(b) expressly prohibits the discharge of an instrument except by all the payees. “[T]he rights of one [payee] are not discharged without his consent by the act of the other.” Uniform laws comment to G.L. c. 106, § 3-116 at 581 (Law.Co-op.1984). Without this rule, there would be no assurance that all the joint payees would receive payment and that the drawer’s underlying obligation would be fully discharged.
.Prior to the adoption of § 3-116, the common law rule that any joint obligee has power to discharge the promisor by receipt of the promised performance, Restatement of Contracts § 130(a) (1932), had created particular incongruities when applied to negotiable instruments. The unpaid copayee could not collect from the drawer because the instrument was deemed discharged; on the other hand, the unpaid copayee could sue the drawee on a conversion of funds theory. Section 3-116 settles the issue by requiring the endorsements of every joint payee before an instrument can be discharged. The Restatement of Contracts (Second) expressly recognizes this exception to the common law rule.
Prohibiting the discharge of a check without all the necessary endorsements also accords with § 3-603, which discharges a party’s liability on an instrument only if payment or satisfaction is made to a holder. Lacking GMAC’s endorsement, Azevedo could not have taken the check by negotiation and thereby become a holder. § 3-202. Without payment to a holder, the liabilities of the parties to the check are not discharged. § 3-603. This holding also comports with § 3 — 419(l)(c), which provides that payment over a forged endorsement results in liability for conversion rather than acceptance and discharge. Further, to hold that an instrument is discharged when payment is made to one copayee without the endorsement of the other would effectively convert a “payable to A and B” instrument into one “payable to A or B.” Thus, to protect the rights of all joint payees as well as the integrity of the commercial paper itself, we hold that payment of a check to one copayee without the endorsement of the other copayee does not discharge the drawer of either his liability on the instrument or the underlying obligation.

GMAC, 602 N.E.2d at 1087-88 (citations and footnotes omitted).

[¶20] In Crystaplex, the court applied the revised version of the Uniform Commercial Code and relied upon GMAC in holding that payment of a check without the valid endorsements of all payees did not discharge the drawer’s liability, and the payee could recover on the instrument from the drawer. In Crystaplex, the Redevelopment Agency had contracted for construction of a sports park, including a hockey rink. The general contractor employed a subcontractor, and that subcontractor contracted with Crystaplex to supply and install the hockey rink. The Agency issued a check payable jointly to the subcontractor and Crystaplex, and the subcontractor cashed the check without obtaining Crystaplex’s endorsement. Crystaplex sued the Agency as drawer on the check. The court held that payment to a person who is not entitled to enforce the instrument does not discharge the drawer’s liability on the instrument to the payee:

The Uniform Commercial Code Comment to California Uniform Commercial Code section 3-310 discusses subdivision (b)(4) as follows: “There was uncertainty concerning the applicability of former Section 3-802 to the case in which the check given for the obligation was stolen from the payee, the payee’s signature was forged, and the forger obtained payment. The last sentence of subsection (b)(4) addresses this issue. If the payor bank pays a holder, the drawer is discharged on the underlying obligation because the check was paid. Subsection (b)(1). If the payor bank pays a person not entitled to enforce the instrument, as in the hypothetical case, the suspension of the underlying obligation continues because the check has not been paid. Section 3-602(a). The payee’s cause of action is against the depository bank or payor bank in conversion under Section 3-120 or against the draiver under Section 3-309.” (Italics added.) This is precisely the situation here, because the payee who negotiated the check was not entitled to enforce the instrument. The joint payees, acting together, were the persons who could enforce the instrument: “If an instrument is payable to two or more persons not alternatively, it is payable to all of them and may be negotiated, discharged, or enforced only by all of them.” (§ 3110, subd. (d); see also, § 3301.)
“The creditor can proceed under Section 3-309 to enforce the obligation of the debtor, as drawer, to pay the check.” (Italics added.) It is therefore apparent that the payee may maintain an action against the drawer, leaving the drawer to cross-complain against any or all of the other banks involved in the check-cashing process.

Crystaplex, 92 Cal.Rptr.2d at 202-03. As in GMAC, the court equated payment of an instrument without a necessary endorsement to a lost or stolen instrument, and held that the Agency, as the drawer, was liable to Crystaplex on the instrument. Crystaplex, at 202-04.

[¶ 21] We reach the same result here. The forged endorsement of NDHFA on the check did not operate as a signature of NDHFA and therefore, under N.D.C.C. § 41-03-10(4), did not discharge Center Mutual’s obligations as drawer of the instrument. Applying the rationale of GMAC and Crystaplex, we conclude Center Mutual is liable to NDHFA on the instrument.

[¶ 22] This appears to be the logical and intended result under the statutory scheme of the Uniform Commercial Code. Center Mutual had a right to demand reimbursement for the improperly paid check from Bremer Bank when the forged endorsement was brought to Center Mutual’s attention by NDHFA. See N.D.C.C. § 41-04-32(1) (a bank may charge an item which is “properly payable” against the account of its customer); 2 James J. White & Robert S. Summers, Uniform Commercial Code § 18-3 (4th ed.1995) (a check containing a forged endorsement is not “properly payable” under U.C.C. § 4 — 401, and the drawer has a right to reimbursement from its bank for payment of a check bearing a forged endorsement); see also Guardian Life Ins. Co. v. Weisman, 223 F.3d 229, 232 (3d Cir.2000); Pamar Enters., Inc. v. Huntington Banks, 228 Mich.App. 727, 580 N.W.2d 11, 16 (1998); Pavex, Inc. v. York Fed. Sav. and Loan Ass’n, 716 A.2d 640, 644 (Pa.Super.Ct.1998). Thus, when notified of the forged endorsement, Center Mutual could have demanded reimbursement of the amount of the check to its account from Bremer Bank. Because each bank in the collection chain warrants that all signatures on the item are authentic and authorized, see N.D.C.C. § 41-04-19(l)(b) [U.C.C. § 4-207], Bremer Bank as the payor bank and each collecting bank in the chain could have sought reimbursement up through the chain until reaching the depositary bank, Wells Fargo Bank of Tempe. This process for ultimately imposing the loss upon the forger or the depositary bank that dealt directly with the forger has been explained:

As part of an attempt to establish uniform rules governing the relationship between banks and their customers, the UCC allocates the losses caused by forged endorsements on negotiable instruments based on the relative responsibilities of the parties to a transaction. Generally, a drawee bank is not entitled to debit the drawer’s account when the bank pays over a forged endorsement, because an ‘unauthorized signature is wholly inoperative as that of the person whose name is signed.’ N.J.Stat.Ann § 12A:3^04(1) (West 1962). However, a drawee bank which has paid over a forged endorsement can shift the loss ‘upstream’ to previous endorsers, e.g., collecting banks, by way of an action for breach of warranty of good title. Ultimately, the ‘loss falls on the party who took the check from the forger, or on the forger himself.’ Thus, the drawer of the check can usually avoid liability on a check with a forged endorsement simply by showing the unauthorized endorsement and the depositary or initial collecting bank will likely suffer the loss.

Pavex, at 644 (quoting McAdam v. Dean Witter Reynolds, Inc., 896 F.2d 750, 759 (3d Cir.1990)). The Uniform Commercial Code envisions this remedy, rather than requiring the innocent loss payee whose endorsement was forged to directly sue the forger or the depositary bank.

[¶ 23] We conclude the district court did not err in determining that Center Mutual was liable on the instrument to NDHFA.

IV

[¶ 24] Center Mutual alleges there is a genuine issue of material fact concerning the amount of damages to which NDHFA is entitled. Center Mutual claims that NDHFA ultimately made repairs to the Griemes’ house for an amount less than $4,378, the amount of the check, and is only entitled to that lesser amount as damages under N.D.C.C. § 32-03-09.1.

[¶ 25] Section 32-03-09.1, N.D.C.C., governs the measure of damages for injury to property caused by the breach of an obligation not arising from a contract. Center Mutual’s liability to NDHFA is not premised upon injury to property, but is based upon the instrument itself. Under GMAC and Crystaplex, the drawer remains liable upon the instrument to a payee whose endorsement is missing or forged. See Crystaplex, 92 Cal.Rptr.2d at 202-04; GMAC, 602 N.E.2d at 1088-89. A negotiable instrument, including a check, is an unconditional promise to pay a fixed amount of money. See N.D.C.C. § 41-03-04(1) [U.C.C. § 3-104]. Center Mutual adjusted the loss and issued its unconditional promise to pay $4,378 to the named joint payees. Furthermore, Center Mutual, as the drawer of a check paid over a forged endorsement, had the right to have its account recredited for the full amount of the wrongfully paid check. See Guardian Life, 223 F.3d at 232; Pamar Enters., 580 N.W.2d at 16. Under these circumstances, the proper measure of damages was the face amount of the check.

V

[¶ 26] We have considered the remaining issues and arguments raised by the parties and find they are either without merit or are unnecessary to our decision. The judgment is affirmed.

[¶ 27] DALE V. SANDSTROM, Acting C.J., JAMES M. BEKKEN, D.J., CAROL RONNING KAPSNER, and DANIEL J. CROTHERS, JJ., concur.

[¶ 28] The Honorable JAMES M. BEKKEN, D.J., sitting in place of VANDE WALLE, C.J., disqualified.


author: KAPSNER, Justice. SANDSTROM, Justice,

text:
    2006 ND 178
    Jay GABEL, Plaintiff and Appellee v. NORTH DAKOTA DEPARTMENT OF TRANSPORTATION, Defendant and Appellant.
    No. 20060003.
    Supreme Court of North Dakota.
    Aug. 16, 2006.

      Jodi L. Colling (argued) and Thomas A. Dickson (on brief), Dickson Law Office, Bismarck, ND, for plaintiff and appellee.
    Zachary E. Pelham (argued), Assistant Attorney General, Office of Attorney General, Bismarck, ND, for defendant and appellant.
   KAPSNER, Justice.

[¶ 1] The North Dakota Department of Transportation (“Department”) appeals from a district court judgment reversing a hearing officer’s decision to suspend Jay Gabel’s driving privileges for ninety-one days. We affirm the district court judgment.

I

[¶ 2] On April 23, 2005, a dispatcher at the Stutsman County Sheriffs Office sent a radio message to Officer Elizabeth Kapp stating that Chad Steele had reported a vehicle traveling on Highway 281 south of Jamestown that would speed up and slow down, not allowing Steele to pass. Steele also reported the license plate of the vehicle was “JAYBIRD.” Steele continued to follow the driver relaying his location to the dispatcher on his cell phone. Steele’s information was relayed from the dispatcher to Officer Kapp. The record does not reflect how many times Steele attempted to pass, what the road conditions were, how long Steele had been following Gabel, or at what speed Steele was attempting to pass Gabel’s vehicle.

[¶ 3] Officer Kapp passed Steele’s vehicle and located Gabel’s vehicle. Officer Kapp measured the speed of Gabel’s vehicle at 47 miles per hour in a 65 mile per hour zone. There was no posted minimum speed limit in the area. After determining the vehicle’s speed, Officer Kapp stopped Gabel’s vehicle based on the information she received from the dispatcher. Officer Kapp did not report independently viewing a traffic violation. Her testimony indicates she did not observe erratic or suspicious driving. Officer Kapp testified she had not noticed Gabel cross the center line, drive on the shoulder, or commit any moving violation. Officer Kapp stated the stop was based on Steele’s report that Gabel had previously sped up in his own lane, making it difficult for Steele to pass.

[¶ 4] When stopped, Gabel stated he was recently married. He admitted he had been drinking. Officer Kapp testified she administered several field sobriety' tests with Gabel failing each test. Officer Kapp then arrested Gabel for driving under the influence of alcohol.

[¶ 5] At the administrative hearing, Ga-bel claimed Officer Kapp lacked a reasonable and articulable suspicion to justify the traffic stop of his vehicle. Gabel argued a case decided by this Court a day before the administrative hearing precluded the officer from stopping Gabel. See Anderson v. Director, N.D. Dep’t of Transp., 2005 ND 97, 696 N.W.2d 918. The hearing officer concluded the facts in Anderson were distinguishable from the facts in this case because in this case the informant was known by the arresting officer. Gabel’s driver’s license was subsequently suspended.

[¶ 6] Gabel appealed the hearing officer’s decision to the district court arguing that Anderson controlled and the officer did not have an independent basis to support the traffic stop. The district court reversed the hearing officer’s decision, concluding the officer did not have the requisite reasonable and articulable suspicion to stop Gabel’s vehicle. On appeal, the Department argues the identity of the informant was known by the officer and incriminating information was relayed from the dispatcher to the officer making this case distinguishable from Anderson.

II

[¶ 7] Our review of a decision to suspend a driver’s license is governed by N.D.C.C. ch. 28-32. Anderson, 2005 ND 97, ¶ 6, 696 N.W.2d 918. We review the record before the administrative agency and will affirm an agency’s decision unless:

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

N.D.C.C. § 28-32-46.

[¶ 8] We give deference to the Department’s sound findings, but review questions of law de novo. Bjerklie v. Workforce Safety and Ins., 2005 ND 178, ¶ 9, 704 N.W.2d 818; Gray v. N.D. Game and Fish Dep’t, 2005 ND 204, ¶7, 706 N.W.2d 614. In this appeal, the issue before this Court is a question of law, namely whether there existed a reasonable and articulable suspicion for Officer Kapp to stop Gabel’s vehicle.

[¶ 9] To justify the stop of a moving vehicle for investigation, an officer must have a reasonable and articulable suspicion the motorist has violated or is violating the law. City of Fargo v. Ovind, 1998 ND 69, ¶8, 575 N.W.2d 901. The flexible and fact specific inquiry into reasonable and articulable suspicion is not readily, or even usefully, reduced to a neat set of legal rules. State v. Loh, 2000 ND 188, ¶ 5, 618 N.W.2d 477. We have recognized “the test of reasonableness under the Fourth amendment requires careful attention to the severity of the crime.” State v. Anderson, 2006 ND 44, ¶24, 710 N.W.2d 392 (citing State v. Heitzmann, 2001 ND 136, ¶ 18, 632 N.W.2d 1). Nevertheless, observed traffic violations provide officers with the requisite suspicion for conducting investigatory stops. Loh, at ¶ 10. The validity of a stop is evaluated under an objective standard considering the totality of the circumstances. Ovind, at ¶ 8.

[¶ 10] Both the hearing officer and the district court concluded this case was governed by Anderson v. Director, N.D. Dep’t of Transp., 2005 ND 97, 696 N.W.2d 918, although reaching different conclusions. In Anderson, the Cass County Sheriffs Office received a report about a “possible reckless driver or drunk driver” that had hit cones in a construction zone. Id. at ¶ 2. The informant continued to follow the driver until the deputy reached the vehicle. Id. at ¶ 3. The deputy followed Anderson for two miles without observing any illegal or erratic driving before the stop. Id. The informant’s name was not relayed to the officer although the informant had been pulled to the side of the road and was being interviewed by an assisting officer. Id. at ¶ 4. The record was “unclear whether the deputy learned of the construction zone allegation before he stopped Anderson.” Id. The Department suspended Anderson’s license, but the district court reversed because the arresting officer did not have reasonable and articulable suspicion necessary to support the stop. Id. We affirmed the district court’s decision because the “deputy was not acting on a directive from another officer and he did not directly observe illegal activity. Here, the deputy only received information from the dispatcher.” Id. at ¶ 9. We explained the tip was likely reliable or could eventually have become reliable and that the reliability of a tip was to be based on a sliding scale: “As the reliability of the tip moves up on the scale, the quantity of the information sufficient to raise a reasonable and articulable suspicion is less.” Id. at ¶ 18 (citing State v. Miller, 510 N.W.2d 638, 640 (N.D.1994)). But in Anderson, even though the tip was or could have been sufficiently reliable, the Department failed “to establish that the informant told the dispatcher the suspect hit cones in a construction zone and that the dispatcher gave that information to the deputy.” Id. at ¶ 19. The “bare assertion” of a “possible reckless driver or drunk driver” was not sufficient to justify the stop. Id. at ¶ 21.

[¶ 11] To determine whether an officer has a reasonable and articulable suspicion, we examine the information known to the officer at the time of the stop and information imputed to the officer based on another officer’s directive to make a stop. State v. Boyd, 2002 ND 203, ¶ 15, 654 N.W.2d 392; City of Devils Lake v. Lawrence, 2002 ND 31, ¶ 9, 639 N.W.2d 466 (recognizing that when one officer directs another officer to effectuate a stop without relaying the underlying facts and circumstances, the directing officer’s knowledge is imputed to the acting officer). An officer can use information received from other officers with his or her personal observations to form the factual basis needed for a legal investigatory stop. Boyd, at ¶ 16. We have upheld investigatory stops of vehicles when the stopping officer received information of illegal activity from other officers and the officer corroborated the tip with personal observations. State v. Kenner, 1997 ND 1, ¶ 12, 559 N.W.2d 538. If the surrounding facts and circumstances verify an informant’s reliability, a known informant’s tip can provide a sufficient basis to justify a stop. Miller, 510 N.W.2d at 640-41 (citing Adams v. Williams, 407 U.S. 143, 92 S.Ct. 1921, 32 L.Ed.2d 612 (1972)).

[¶ 12] Officer Kapp testified she knew the informant in her “professional capacity”; she believed he had a criminal record. We have allowed tips from known criminal informants to justify a stop provided the tip is otherwise reliable. State v. Anderson, 2006 ND 44, ¶¶ 13, 17, 710 N.W.2d 392. “As a general rule, the lesser the quality or reliability of the tip, the greater the quantity of information required to raise a reasonable suspicion.” Id. at ¶ 13 (quoting Miller, 510 N.W.2d at 640). “In evaluating the factual basis for an investigatory stop, we must consider the totality of the circumstances, including the quantity, or content, and quality, or degree of reliability, of the officer’s information.” Id. Here, the content and quality of the officer’s information when she made the stop was insufficient to justify a stop of Gabel’s vehicle. The officer was only able to corroborate the location of the vehicle and its license plate but unable to corroborate any illegal activity or other suspicious activity that would confirm the reliability of Steele’s tip. There is nothing from the record in this case that ensures the informant was reliable. Officer Kapp did not testify about the informant’s reliability. Given her testimony, there is nothing in this record to suggest Officer Kapp regarded Steele as other than a member of the “criminal milieu.” Members of the “criminal milieu” must have their reliability established. Id. at ¶ 15. However, we need not determine the reliability of Steele, because, even assuming he was a reliable informant, his tip of a vehicle speeding up and slowing down, not allowing a car to pass is insufficient to support a traffic stop absent corroboration of otherwise illegal activity or suspicious conduct. Driving on a highway slightly below the speed limit is not sufficiently suspicious to support a traffic stop.

[¶ 13] The Department argues this case is stronger than Anderson v. Director, N.D. Dep’t of Transp., 2005 ND 97, 696 N.W.2d 918 because the information relayed to the officer was more specific and provided the officer with evidence of a traffic violation. Officer Kapp testified she observed Gabel driving below the posted speed limit, but she did not notice Gabel cross the center line, drive on the shoulder, or commit any moving violation. The Department does not argue that Gabel’s speed of 47 miles per hour in a 65 mile per hour zone provides a sufficient basis to justify a stop. See, e.g., Johnson v. Sprynczynatyk, 2006 ND 137, ¶ 13, 717 N.W.2d 586 (traveling 8-10 miles per hour in a 25 mile per hour zone does not constitute reasonable and articulable suspicion to support a stop); State v. Brown, 509 N.W.2d 69, 71 (N.D.1993) (evidence that driver is traveling at slower than usual speed does not create reasonable and ar-ticulable suspicion); Salter v. North Dakota Dep’t of Transp., 505 N.W.2d 111, 114 (N.D.1993) (officer did not have reasonable and articulable suspicion to stop a car traveling 30-35 miles per hour in a 50 mile per hour zone even though the car was weaving slightly within own lane).

[¶ 14] The basis of the Department’s argument is that a traffic violation occurred. As authority for this conclusion, the Department cites N.D.C.C. § 39-10-11(2), which states: “the driver of an overtaken vehicle shall give way to the right in favor of the overtaking vehicle on audible signal and may not increase the speed of that driver’s vehicle until completely passed by the overtaking vehicle.” Based on the record we have before us, it is not entirely clear the information Steele conveyed amounted to a violation of this statute. There was no information to suggest Steele made an “audible signal” that he intended to pass. The record we have is limited to Officer Kapp’s testimony:

MR. SHARP: What information did you receive out in the patrol car?
DEPUTY KAPP: That the vehicle,
JAYBIRD, would speed up, slow down, would not allow Mr. Steele to pass him.
MR. DICKSON: You never noticed any crossing of the center line or any driving on the shoulder or anything like that. Isn’t that correct?
DEPUTY KAPP: No.
MR. DICKSON: Okay. You never noticed ... you, yourself, never noticed any moving violations, did you?
DEPUTY KAPP: Other then I locked him in on radar 47 in a 65.
MR. DICKSON: And there’s no minimum speed on that highway, is there?
DEPUTY KAPP: If there’s traffic behind him, he’s impeding traffic.
MR. DICKSON: Officer, there’s no minimum speed on that highway, is there?
DEPUTY KAPP: No, not that I recall.

[¶ 15] Officer Kapp testified she did not observe a traffic violation. The sole reason Officer Kapp gave for justifying the stop was based on Steele’s report that Gabel had previously sped up in his own lane, making it difficult for Steele to pass. Officer Kapp testified that this unverified report provided her with sufficient information that Gabel was an impediment to traffic. Officer Kapp did not independently observe or corroborate Gabel speeding up and slowing down nor did she view Gabel impede the ability of others to pass his vehicle. Based upon the information conveyed, there is only a possibility that a violation had occurred. This is the functional equivalent of the “possible reckless driver or drunk driver” held to be insufficient to establish a reasonable and articu-lable suspicion in Anderson, 2005 ND 97, ¶ 21, 696 N.W.2d 918.

III

[¶ 16] We conclude, under the totality of the circumstances, Officer Kapp did not have a reasonable and articulable suspicion to justify the stop of Gabel’s vehicle. We affirm the district court’s judgment reinstating Gabel’s driving privileges.

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

SANDSTROM, Justice,

dissenting.

[¶ 18]I respectfully dissent. The tip the officer received was reliable and specific. Therefore, the traffic stop was justified. Although the majority ultimately declares them to be dicta, the majority’s statements obscure established Fourth Amendment jurisprudence, blurring the standards between a citizen informant and a criminal informant and between reasonable suspicion and probable cause. Then, in its penultimate paragraph, the majority returns to what it has told us does not matter in order to erroneously conclude that because the officer did not corroborate the tip, the stop was not justified. I would affirm.

I

[¶ 19] The majority misstates the standard of review in administrative appeals. At ¶ 8, citing Bjerklie v. Workforce Safety and Ins., 2005 ND 178, ¶ 9, 704 N.W.2d 818, and Gray v. N.D. Game and Fish Dep’t, 2005 ND 204, ¶ 7, 706 N.W.2d 614, the majority says, “We give deference to the Department’s sound findings, but review questions of law de novo.” But that is not the standard enunciated in either Bjerklie or Gray. The majority’s attempt to limit deference to “sound findings” is inconsistent with this Court’s jurisprudence ever since the standard — based on constitutional separation of powers — was set forth in Power Fuels v. Elkin, 283 N.W.2d 214, 222 (N.D.1979):

In construing the “preponderance of the evidence” standard to permit us to apply the weight-of-the-evidence test to the factual findings of an administrative agency, we do not make independent findings of fact or substitute our judgment for that of the agency. We determine only whether a reasoning mind reasonably could have determined that the factual conclusions reached were proved by the weight of the evidence from the entire record.

II

[¶20] “The reasonable and articulable suspicion standard requires more than a ‘mere hunch,’ but less than probable cause.” Lapp v. N.D. Dep’t of Transp., 2001 ND 140, 11, 632 N.W.2d 419. “ ‘Reasonable suspicion to justify a stop exists when “a reasonable person in the officer’s position would be justified by some objective manifestation to suspect potential criminal activity.” ’ ” Kappel v. Dir., N.D. Dep’t of Transp., 1999 ND 213, ¶ 7, 602 N.W.2d 718 (quoting City of Fargo v. Ovind, 1998 ND 69, ¶ 8, 575 N.W.2d 901). “[T]he reasonable suspicion standard does not require an officer to see a motorist violating a traffic law or to rule out every potential innocent excuse for the behavior in question before stopping a vehicle for investigation.” Id. at ¶ 10.

[¶ 21] “As the reliability of the tip moves up on the scale, the quantity of the information sufficient to raise a reasonable and articulable suspicion is less.” Anderson v. Dir., N.D. Dep’t of Transp., 2005 ND 97, ¶ 18, 696 N.W.2d 918. In the context of an anonymous informant’s tip, “our cases have required that the officer corroborate the tip by observing some behavior on the part of the driver, either illegal or indicative of impairment, that alerts the officer to a possible violation.” State v. Miller, 510 N.W.2d 638, 642 (N.D.1994). In the context of a known informant’s tip, however, our cases have held that the information a tip provides can itself be sufficient to raise a reasonable and articulable suspicion. Miller, at 640-41. As the United States Supreme Court said in Adams v. Williams:

In reaching this conclusion, we reject respondent’s argument that reasonable cause for a stop and frisk can only be based on the officer’s personal observation, rather than on information supplied by another person. Informants’ tips, like all other clues and evidence coming to a policeman on the scene, may vary greatly in their value and reliability. One simple rule will not cover every situation. Some tips, completely lacking in indicia of reliability, would either warrant no police response or require further investigation before a forcible stop of a suspect would be authorized. But in some situations — for example, when the victim of a street crime seeks immediate police aid and gives a description of his assailant, or when a credible informant warns of a specific impending crime — the subtleties of the hearsay rule should not thwart an appropriate police response.

407 U.S. 143, 147, 92 S.Ct. 1921, 32 L.Ed.2d 612 (1972).

III

[¶ 22] The majority argues that because the informant had a criminal record, implying he was a member of the “criminal milieu,” Officer Kapp had to corroborate the known informant’s tip before she could have a reasonable and articulable suspicion. The majority states, at ¶ 12, “Officer Kapp testified she knew the informant in her ‘professional capacity’; she believed he had a criminal record.” In misdirected dicta in State v. Anderson, the opinion differentiated between a member of the “criminal milieu” and a citizen informant. 2006 ND 44, ¶15, 710 N.W.2d 392. “A member of the ‘criminal milieu’ is someone ‘who is himself involved in criminal activity or is, at least, someone who enjoys the confidence of criminals.’ ” Id. (quoting State v. Dahl, 440 N.W.2d 716, 718 (N.D. 1989)). But Dahl related to probable cause, not reasonable suspicion. Anderson did not discount reasonable suspicion because of the so-called “criminal milieu” argument. The majority is unable to cite any case in the United States in which a tip from a known informant discounted reasonable suspicion because a known informant was part of the “criminal milieu.” Nor can the majority cite any other case in the United States that says a “criminal record,” without more, equals being part of the “criminal milieu.” We said, however, that a citizen informant is someone who volunteers the information, seeks nothing in return, and is not at risk or in fear of going to jail. Id. Although we did not need to decide whether the informant was a member of the “criminal milieu” or a citizen informant, Id. at ¶ 16, we held the informant was reliable because of the quality of his information:

Greg’s information has a higher indi-cia of reliability because he was a known informant who voluntarily gave Deputy Gress information on prior occasions. Deputy Gress testified that, except for the one occasion, Greg was always truthful. The information Greg gave in this case also had a higher indicia of reliability because Greg was in Jamestown and the information involved events in Fargo, which Officer Crane verified. Greg volunteered the information knowing his son, Daniel, could be arrested if law enforcement learned about Jesse and Daniel’s plan. Greg contacted Deputy Gress because he was worried about Jesse and Daniel’s safety and he wanted Deputy Gress’ help. Greg did not ask for anything in exchange for the information, and he was not at risk of going to jail in connection with this incident.

Id. at ¶ 17.

[¶ 28] Applying the facts of the present case to the definition of “criminal milieu” and citizen informant, this case’s informant is a citizen informant. He volunteered the information. The record contains no evidence that he somehow sought something in return for the tip. Finally, he was at no risk of going to jail, unless he made a false report to law enforcement. The record contains no evidence that the informant was presently involved in criminal activity or enjoyed the confidence of criminals. Therefore, to imply that Mr. Steele was somehow a member of the “criminal milieu,” thus requiring validation of his tip, is baffling. The record does not contain any evidence of what his criminal history was. The majority has basically categorized all informants with a criminal past into the “criminal milieu” without consideration of what the criminal past is or how that past is relevant to the case at hand. The logical conclusion of this premise is that anyone with a criminal past, no matter how long ago or how irrelevant, cannot be a citizen informant. The majority, at ¶ 12, states, “The officer was only able to corroborate the location of the vehicle and its license plate but unable to corroborate any illegal activity or other suspicious activity that would confirm the reliability of Steele’s tip.” Corroboration in this case is not required, because the tip was from a known citizen informant, not a member of the “criminal milieu.” The tip provided sufficient information to give Kapp a reasonable and articulable suspicion.

[¶ 24] The majority is also inconsistent in its conclusions. At ¶ 12, the majority first states, “Here, the content and quality of the officer’s information when she made the stop was insufficient to justify a stop of Gabel’s vehicle.” Five sentences later, however, the majority tells us that it is all dicta, stating, “we need not determine the reliability of Steele, because, even assuming he was a reliable informant, his tip of a vehicle speeding up and slowing down, not allowing a car to pass is insufficient to support a traffic stop absent corroboration of otherwise illegal activity or suspicious conduct.” The majority answered the question of whether the informant was reliable in the negative when it said the quality of the information was insufficient. Validation of the tip is required when the reliability, i.e., the quality of the information is poor. See Anderson, 2006 ND 44, ¶ 13, 710 N.W.2d 392 (emphasis added) (“In evaluating the factual basis for an investigatory stop, we must consider the totality of the circumstances, including the quantity, or content, and quality, or degree of reliability, of the officer’s information.”).

[¶ 25] The majority, at ¶ 15, states, “Officer Kapp did not independently observe or corroborate Gabel speeding up and slowing down nor did she view Gabel impede the ability of others to pass his vehicle.” The majority again confuses the standards that apply to a citizen informant and a criminal informant and to a known informant and an anonymous tip. Officer Kapp could base her reasonable and artic-ulable suspicion on the information provided by the informant. Furthermore, the majority, at ¶ 15, states, “Based upon the information conveyed, there is only a possibility that a violation had occurred. This is the functional equivalent of the ‘possible reckless driver or drunk driver’ held to be insufficient....” Under the reasonable-suspicion standard, however, a “possibility” of a violation is all that is required as long as “ ‘a reasonable person in the officer’s position would be justified by some objective manifestation to suspect potential criminal activity.’ ” Kappel, 1999 ND 213, ¶ 7, 602 N.W.2d 718 (quoting Ovind, 1998 ND 69, ¶ 8, 575 N.W.2d 901). The majority has confused the standards for a known citizen informant and a criminal informant.

TV

[¶ 26] The majority wrongly concludes that this case is indistinguishable from Anderson v. Dir., N.D. Dep’t of Transp., 2005 ND 97, 696 N.W.2d 918. This case is different from Anderson, in which the report communicated to the officer, “possible reckless driver or drunk driver,” was con-clusory in nature, lacking any specified conduct. As in Anderson, the tip in this case was reliable. See Anderson, at ¶ 18 (the tip was of greater reliability because “the deputy was aware before the vehicle stop that the informant could be identified because dispatch had described the informant’s vehicle to him, and in addition, he observed the informant’s vehicle pull over as he stopped Anderson and he knew an assisting officer was interviewing the informant”). Here, the dispatcher communicated the informant’s name and information to Officer Kapp. Officer Kapp knew who the informant was, allowing her to measure the tip’s credibility. Also, the informant was following Gabel’s car, was providing more information to the dispatcher, and was available to be interviewed after the traffic stop was made. Thus, the tip was of greater reliability. In this case, unlike in Anderson, however, the information relayed to the dispatcher and Officer Kapp was far more specific, providing the officer with a reasonable and articulable suspicion. See id. at ¶ 21 (“the communication by the dispatcher to the deputy of the bare assertion of a ‘possible reckless driver or drunk driver,’ is not of sufficient quantity to provide the reasonable and ar-ticulable suspicion sufficient to justify the stop of Anderson’s vehicle”). Here, Officer Kapp was told that “the vehicle, JAYBIRD, would speed up, slow down, [and] would not allow Mr. Steele to pass him.” This information addressed specific conduct, lending more reliability to the informant’s tip. The conduct also described a specific type of erratic driving: impeding a faster moving car’s lawful pass. Section 39-10-11(2), N.D.C.C., specifically requires that an overtaken car allow a faster moving car to pass:

Except when overtaking and passing on the right is permitted, the driver of an overtaken vehicle shall give way to the right in favor of the overtaking vehicle on audible signal and may not increase the speed of that driver’s vehicle until completely passed by the overtaking vehicle.

The majority attempts to ignore this specific, erratic driving by stating, at ¶ 14, “Based on the record we have before us, it is not entirely clear the information Steele conveyed amounted to a violation of this statute. There was no information to suggest Steele made an ‘audible signal’ that he intended to pass.” The fact that every element of the violation may not have been met, however, is irrelevant when measuring Officer Kapp’s reasonable and articula-ble suspicion, because she was not required to know, for a fact, that Gabel had committed a violation. Her job was to respond to a known informant’s specific tip of erratic driving. When Officer Kapp arrived, she observed Gabel driving forty-seven miles per hour in a sixty-five mile-per-hour zone. If “JAYBIRD” was speeding up and slowing down, a slow speed would logically be suspicious conduct to corroborate the tip. Steele’s tip was more than the “functional equivalent” of the tip in Anderson.

V

[¶ 27] Ultimately, Officer Kapp was given a specific, rehable tip from a known informant. Upon arriving at the scene, Officer Kapp observed Gabel driving forty-seven miles per hour in a sixty-five mile-per-hour zone, which, although not illegal, is unusual and would logically be the conduct that might be observed if someone were driving slowly, speeding up to prevent a pass, and then slowing down again. One cannot logically expect, however, that Gabel would continue speeding up to prevent a pass after an officer had arrived on the scene. Therefore, corroboration of the exact conduct Gabel was accused of, in addition to being unnecessary, was unlikely to happen. Officer Kapp did not have to corroborate the tip or observe illegal conduct to have a reasonable and articulable suspicion; the reliable tip alone was enough.

VI

[¶ 28] I would reverse the district court and reinstate the Department’s order.

[¶ 29] Dale V. Sandstrom