author: KAPSNER, Justice.

text:
    2004 ND 185
    Albert KOUBA, Petitioner and Appellee v. John HOEVEN, North Dakota Governor, Executive Officer of all ND State Administrative Agencies and Departments, Respondent and Appellant.
    No. 20040138.
    Supreme Court of North Dakota.
    Oct. 12, 2004.

      Albert Kouba, pro se, Williston, ND, petitioner and appellee.
    Andrew Moraghan, Assistant Attorney General, Bismarck, ND, for respondent and appellant.
   KAPSNER, Justice.

[¶ 1] 'John Hoeven, Governor of the State of North Dakota, appealed a judgment ordering the North Dakota Department of Transportation (“Department”) to issue a replacement motor vehicle operator’s license to Albert Kouba. We conclude Kouba failed to demonstrate a clear legal right to issuance of the license he sought to compel with a petition for a writ of mandamus, and we reverse.

[¶ 2] Kouba’s July 24, 1998, operator’s license expired on March 24, 2002. On March 28, 2002, the Department received a request from Kouba for a renewal license. In his letter, Kouba said he “will not be back in North Dakota for a few months, as I’m on business all across the nation.”" On April 2, 2002, the Department mailed, to Kouba .a license, which stated it was valid without a photo or signature and expires “03-24-2006.” The license was accompanied by a form letter stating in part “[t]his license can be used to legally drive until you are able to return to this state,” and “[u]pon returning to North Dakota, a drivers license with a photo and signature must be obtained immediately.”

[¶ 3] Kouba was stopped and ticketed by law enforcement officers in North Dakota in February, April, and November of 2003, when the officer seized the license issued on April 2, 2002, and mailed it to the Department. In a February 6, 2004, letter, the Department told Kouba he would not be issued a license until he provided, a social security number or a letter from the Social Security Administration verifying he is not eligible for a social security number.

[¶ 4] In a March 1, 2004, petition for a writ of mandamus, Kouba sought “an immediate Order Commanding John Hoeven, North Dakota Governor, to issue Petitioner a North Dakota driver’s license upon receipt of the Writ, as the State of North Dakota refuses to return the drivers license of Petitioner.” A judgment was entered ordering the Department to “issue a replacement driver’s license to [Kouba] without requiring him to provide a social security number so long as [Kouba] meets all other statutory requirements, including photo and signature.” Governor Hoeven appealed, contending Kouba failed to prove he has a clear legal right to an operator’s license.

[¶ 5] A petitioner for a writ of mandamus must demonstrate a clear legal right to performance of the act sought to be compelled by the writ and must demonstrate there is no other plain, speedy, and adequate remedy in the ordinary course of the law. Wutzke v. Hoberg, 2004 ND 42, ¶ 3, 675 N.W.2d 179. Issuance of a writ of mandamus is left to the sound discretion of the trial court. Id. A trial court abuses its discretion if it acts in an arbitrary or capricious manner, or if it misapplies or misinterprets the law. City of Fargo v. Habiger, 2004 ND 127, ¶31, 682 N.W.2d 300.

[¶ 6] Disposition of Kouba’s petition for a writ of mandamus and resolution of this appeal turn on the meaning of N.D.C.C. §§ 39-06-07 and 39-06-19. Section 39-06-07, N.D.C.C., provides, in part:

1. Every application for an instruction permit or for an operator’s license must be made upon a form furnished by the director.
2. Every application must state the full name, date of birth, sex, social security number, residence and mailing address, and briefly describe the applicant. ... The application must contain such other information as the director may require.

Section 39-06-19, N.D.C.C., provides, in part:

1. Every operator’s license issued under this chapter expires and is renewed according to this section.
3. An applicant for renewal must present the application with fee for renewal of license to the director not before ten months before the expiration date of the operator’s license. The director may require an examination of an applicant as upon an original application. After the initial application for a license in this state, the director may not require an applicant for renewal, replacement, or a substitute to provide a social security card unless the applicant is changing the distinguishing number on the license to the applicant’s social security number.
5. Every person submitting an application and fee for renewal of license one year or more after the expiration of a license, except an applicant whose military service has terminated less than thirty days prior to such application, must be treated as a new driver.

The trial court concluded N.D.C.C. § 39-06-07(2) “appears to apply to those applying for new North Dakota licenses, as N.D.C.C. § 39-06-19 is specific to renewals of licenses,” and ordered the Department to “issue a replacement license to the Petitioner without requiring him to provide a Social Security Number so long as the Petitioner meets all other statutory requirements, including photo and signature.”

[¶ 7] “The interpretation of a statute is a question of law, fully reviewable on appeal.” Johnson v. North Dakota Department of Transp., 2004 ND 148, ¶ 5, 683 N.W.2d 886. The primary goal of statutory construction is to ascertain the legislature’s intent. Id. at ¶ 7. We first look at the plain language of the statute and give every word its ordinary meaning, unless a contrary intention plainly appears. Id. at ¶ 7. “We construe the statute as a whole and give effect to each of its provisions, if possible.” Id. at ¶ 7. If possible, we construe two statutes on the same subject to harmonize them and give effect to both. State v. Higgins, 2004 ND 115, ¶ 13, 680 N.W.2d 645.

[¶ 8] Construing N.D.C.C. §§ 39-06-07 and 39-06-19 in accordance with our rules of statutory construction, we conclude that an application for a motor vehicle operator’s license under either statute must contain the applicant’s social security number. While N.D.C.C. § 39-06-19(3), states “[a]fter the initial application for a license ... the director may not require an applicant for renewal ... to provide a social security card,” it does not relieve an applicant of the duty of providing a social security number on the application. We, therefore, conclude Kouba did not present the Department with a complete application containing his social security number, and did not demonstrate a clear legal right to performance of the act sought to be compelled by his petition for a writ of mandamus. We further conclude that the trial court misinterpreted and misapplied the unambiguous provisions of N.D.C.C. §§ 39-06-07 and 39-06-19. Because the trial court misinterpreted N.D.C.C. §§ 39-06-07 and 39-06-19 and Kouba did not demonstrate a clear legal right to performance of the act sought to be compelled by his petition for a writ of mandamus, we conclude the trial court abused its discretion in ordering issuance of a license to Kouba without the provision of a social security number.

[¶ 9] The judgment is reversed to the extent it orders the Department to issue a license to Kouba without requiring him to provide a social security number.

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

      . Kouba has not raised any constitutional issues. Thus, we need not address any possible constitutional impediments to the requirement that an application for a motor vehicle operator’s license contain the applicant’s social security number.


source: Caselaw Access Project

author: GILBERTSON, Chief Justice. ZINTER, Justice SABERS, Justice [¶ 45.] KONENKAMP, Justice,

license: Public Domain

text:
    2004 SD 102
    Jason SCHULTE, Applicant and Appellee, v. Larry LONG, South Dakota Attorney General, and Chris Nelson, Secretary of State, Respondents and Appellants.
    No. 23371.
    Supreme Court of South Dakota.
    Considered on Briefs Sept. 2, 2004.
    Decided Sept. 3, 2004.
    Ron J. Volesky of Volesky Law Firm, Huron, South Dakota, Attorney for applicant and appellee.
    Lawrence E. Long, Attorney General, Jeffrey P. Hallem, Assistant Attorney General, Pierre, South Dakota, Attorneys for respondents and appellants.
   GILBERTSON, Chief Justice.

[¶ 1.] The issue on appeal is whether the Attorney General exceeded his statutory authority by including a statement in the ballot explanation for 2004 Initiated Measure 1 that, if adopted, the measure would exempt food from state and municipal sales and use taxes “and eliminate this source of revenue.” The circuit court held that the phrase “and eliminate this source of revenue” in the Attorney General’s explanation is a negative editorial statement outside the statutory authority granted to him under SDCL 12-13-9. We disagree, however, and conclude that the statement falls within authority granted to the Attorney General by SDCL 12-13-9. Consequently we reverse the judgment and order issuing writ of certiorari.

FACTS

[¶ 2.] On May 4, 2004 Jason Schulte, the current executive director of the South Dakota Democratic Party, filed' an initiative petition in the Secretary of State’s office. The language in the initiated measure was proposed by Schulte. According to the petition, the voters of the State of South Dakota are being asked to approve or reject “An act to exempt food from sales and use taxes.” It proposes to amend SDCL ch. 10-45 (Retail Sales and Service Tax) and SDCL ch. 10-46 (Use Tax) by adding sections providing “There are exempted from the provisions of this chapter and the computation of the tax imposed by it, the gross receipts from the sale of food.” The proposed law also defines what is and is not food. The law proposed in the petition is now designated “Initiated Measure 1.”

[¶ 3.] On July 26, 2004, pursuant to SDCL 12-13-9, the Attorney General delivered an explanation of Initiated Measure 1 to the Secretary of State. It provided:

ATTORNEY GENERAL
2004 BALLOT EXPLANATION
INITIATED MEASURE 1
Title: An act to exempt food from sales and use taxes.
Explanation:
The state collects a sales and use tax on the sale of food. Many cities and towns also collect a municipal sales and use tax on the sale of food.
Initiated Measure 1, if adopted, would exempt food from state and municipal sales and use taxes, and eliminate this source of revenue.
A vote “Yes” will change state law.
A vote “No” will leave state law as it is.

The Secretary of State delivered a certified true and correct copy of Initiated Measure 1 as well as the statement, title, explanation and recitation required by SDCL 12-13-9 to each county auditor on August 9, 2004. SDCL 12-13-1.

[¶ 4.] Schulte, the original sponsor of Initiated Measure 1, applied to the circuit court for a writ of certiorari. He objected to the phrase “and eliminate this source of revenue” in the ballot explanation. He contended that by including this language in the ballot explanation the Attorney General exceeded the authority granted by SDCL 12-13-9.

[¶ 5.] The circuit court entered an order granting the writ of certiorari. It ordered the Attorney General and Secretary of State to direct the county auditors not to print the ballots for the November 2, 2004 election until the issue was resolved.

[¶ 6.] The circuit court heard the matter on August 25, 2004, entered a memorandum decision on August 26, 2004, and filed its judgment and order issuing writ of certiorari on August 27, 2004.

[¶ 7.] The circuit court concluded that the contested language in the explanation constituted a negative editorial statement. The court explained:

The explanation implies that a “yes” vote will strangle state and municipal budgets. It also speculates that the legislature will not replace the revenue affected by the ballot measure. The implication is editorial and negative and the speculation is unwarranted and improper.
The attorney general’s addition of the practical effect of the initiated measure to the legal effect only states one of the many practical effects. There are many other possible detrimental and beneficial effects. Some are obvious and others are conjectural. Listing one practical effect to the exclusion of others is editorial.
In the recent past, the attorney general has remained out of the political fray in explaining ballot measures with revenue consequences. The attorney general’s explanation of the proposed repeal of the video lottery read: “The Constitution authorizes legislative enactment of video lottery. Amendment D removes that authority and will repeal all video lottery laws.” There was no mention that repeal of the video lottery would eliminate that source of revenue. The attorney-general’s explanation of the proposed repeal of the state inheritance tax read: “The State currently imposes inheritance taxes. Amendment C would repeal the state tax on any inheritance on the property of anyone who dies on or after July 1, 2001, and would prohibit the Legislature from enacting a tax on any inheritance.” There was no mention that repeal of the inheritance tax would eliminate that source of revenue. The present appearance of the “eliminate this source of revenue” language in the attorney general’s explanation of Initiated Measure 1 means either the attorney general did not adequately explain the legal effect of the video lottery and inheritance tax ballot measures or it is an editorial comment unrelated to the legal effect of the initiative.
An example illustrates the editorial nature of the remainder of the statement. Governor Rounds has stated publicly that repeal of the sales tax on food will cut taxes by $42,000,000 to the state and $18,000,000 to municipalities (total tax savings of $60,000,000). According to the U.S. Census Bureau, the 2003 estimated population of South Dakota is 764,844. Therefore, adoption of the initiative would save each South Dakotan $78.45 in taxes. Saving taxes is no more a legal effect of passage of the initiative than eliminating revenue. Yet if the attorney general’s explanation said “lower taxes” instead of “eliminate revenue,” the explanation would cast a more favorable light on the initiated measure. Both explanations are true. Both are matters of fact and not legal effect. Both are editorial and improper.
The legal effect of the initiated measure which is to “exempt food from state and municipal sales and use taxes” is correctly stated. The negative editorial statement about eliminating revenue is outside the statutory authority granted to the attorney general under SDCL 12-13-9. (footnotes omitted).

[¶ 8.] It ordered the Attorney General to provide a revised explanation to the Secretary of State which omitted the language “and eliminate this source of revenue.” It ordered the Secretary of State to provide the revised explanation to the county auditors.

[¶ 9.] The Attorney General and Secretary of State filed a notice of appeal on August 27, 2004. Because county auditors must have official ballots printed by September 21, 2004 when absentee voting begins, the Attorney General and Secretary of State asked this Court to resolve the issue no later than September 7, 2004 so there would be a reasonable time to print ballots. The briefing schedule was expedited. After full consideration we announce our decision today, September 3, 2004.

ANALYSIS AND DECISION

[¶ 10.] The full text of initiated measure is not printed on the election ballot. Instead SDCL 12-13-11 requires:

The title, explanation, recitation, place for voting, and statement as required by this chapter shall be printed on the ballot in lieu of the law, measure, eonstitu-tional amendment, or other question to be submitted to a vote of the people. All proposed constitutional amendments to be submitted at an election shall be placed on one ballot and all initiated measures or referred laws upon a separate ballot.

Pursuant to SDCL 12-13-9 “the attorney general shall deliver to the secretary of state the statement, the title, the explanation, and a clear and simple recitation of the effect of a Tes’ or ‘No’ vote.” SDCL 12-13-9 further provides:

The explanation shall state succinctly the purpose and legal effect of the proposed amendment to the Constitution, the initiated measure, or the referred law. The explanation shall be a clear and simple summary of the issue and may not exceed two hundred words in length. On the printed ballots, the title shall be followed by the explanation and the explanation shall be followed by the recitation.

[¶ 11.] In deciding the matter before us, we cannot take a side in the debate on the merits of the ballot issue. We also cannot allow that debate to enter the voting booth on the face of the ballot. Our prior cases have examined this statute as to what it requires and what it does not allow. The explanation must be factually accurate, legally accurate, concise, must not address collateral, theoretical or potential consequences of approval or disapproval by the voters, must not be a statement of personal opinion and must not attempt to advocate for or against the ballot question. See generally Hoogestr-aat v. Barnett, 1998 SD 104, 583 N.W.2d 421. However within this legal framework, the Attorney General is granted discretion as to how to author the ballot statement. Gormley v. Lan, 88 N.J. 26, 438 A.2d 519, 525 (1981). Moreover this Court’s function is a limited one. We merely determine if the Attorney General has complied with his statutory obligations and we do not sit as some type of literary editorial board.

[¶ 12.] In Hoogestraat this Court considered whether a ballot explanation satisfied the requirements of SDCL 12-13-9. We noted that:

This Court has, however, considered whether a ballot statement satisfied the requirements of SDCL 12-13-9 which, at that time, required the Attorney General to prepare a “concise” statement of “the purpose and legal effect of each proposed constitutional amendment ... particularly with reference to existing law.” Barnhart v. Herseth, 88 S.D. 503, 513, 222 N.W.2d 131,136 (1974).
The Barnhart court noted that the language “purpose and legal effect” led to the conclusion that a ballot explanation of a proposed constitutional amendment “was to be identified to the electorate in easily understood language enabling the voters to distinguish this amendment from the other ... propositions on the ballot[.]” Barnhart, 88 S.D. at 514, 222 N.W.2d at 137. The court rejected the argument that a ballot explanation must educate the electorate since voters are presumed familiar with proposed amendments through the publicity given the amendments in the time leading up to the election. Id. “[T]he basic purpose of a ballot statement is to identify an amendment to an informed electorate rather than to educate it.” Id., 88 S.D. at 515, 222 N.W.2d at 137.
Consequently the focus of a ballot explanation is restricted. It must clearly, simply, and succinctly identify and summarize the purpose and legal effect of a proposed amendment to an already educated and informed voter who has ten minutes in which to vote. SDCL 12-13-9; SDCL 12-18-15; Barnhart, 88 S.D. at 514, 222 N.W.2d at 137. The legal effect that must be succinctly stated refers to the result that the proposed constitutional amendment "will have upon existing law. See Black’s Law Dictionary 514 (6th ed 1990). It does not refer to collateral, theoretical or potential consequences which may or may not occur.

Hoogestraat, 1998 SD 104, ¶ 10-12, 583 N.W.2d 421, 424.

[¶ 13.] In Hoogestraat we concluded that the explanation that Proposed Constitutional Amendment E “could result in successful lawsuits against the State of South Dakota, under the U.S! Constitution” went beyond the authority granted by SDCL 12-13-9. We said that the explanation

clearly exceeds the purpose of a ballot explanation. It is not a statement of how Proposed Constitutional Amendment E would change existing law. Rather, it is conjecture as to possible consequences of a change in existing law. As such, it has no place in a ballot explanation appearing on the general election ballot. It is purely a statement of opinion which is not appropriate to the political campaign and education process leading up to the election, (footnote omitted).

Hoogestraat, 1998 SD 104, ¶ 13, 583 N.W.2d 421, 424.

[¶ 14.] In this case the ballot explanation provides that “Initiated Measure 1, if adopted, would exempt food from state and municipal sales and use taxes, and eliminate this source of revenue.” The circuit court considered the phrase “eliminates this source of revenue” to be factual, but held that it created negative implications and speculations- and ignored “other possible” effects, whether beneficial or detrimental.

[¶ 15.] We initially observe that the proponents of Initiated Measure 1 drafted the title of the measure, “An act to exempt food from sales and use taxes.” The proponents also controlled the purpose of the measure, “There are exempted from the provisions of this chapter and the computation of the tax imposed by it, the gross receipts from the sale of food.” The Attorney General’s ballot explanation uses both when it titles Initiated Measure 1 “An act to exempt food from sales and use taxes” and explains, in part, “Initiated Measure 1, if adopted would exempt food from state and municipal sales and use taxes[.]”

[¶ 16.] The explanation goes on to state that Initiated Measure 1, if adopted, would “eliminate this source of revenue.” Hoo-gestraat warned that conjecture as to possible collateral, theoretical or potential consequences of a change in existing law had no place in a ballot explanation. 1998 SD 104 at ¶ 12-13, 583 N.W.2d 421, 424. The explanation of Initiated Measure 1, however, provides none of this. Rather, it is a narrowly crafted statement of “the purpose and legal effect”, SDCL 12-13-9, of Initiated Measure 1. The purpose of Initiated Measure 1, as the proponents petition -clearly provided, is to “exempt food from state and municipal sales and use taxes.” The legal effect of exempting food from sales and use taxes is to eliminate revenue formerly generated from the taxation of food. Thus the use of the phrase “eliminate this source of revenue” uses plain, neutral language to accurately explain the direct legal effect of the action proposed by the initiative. Schulte now finds fault with the Attorney General’s failure to state that not all food will be subject to the sales tax repeal and thus his phrase “eliminate this source of revenue” is inaccurate and overstates the potential loss in revenue to the State and its subdivisions. However Schulte is bound by the title to the act which he, and not the Attorney General authored, “An act to exempt food from sales and use taxes” without any reference to potential exemptions.

[¶ 17.] The circuit court erred by concluding that the disputed phrase “and eliminate this source of revenue” was the equivalent of “revenue would be eliminated.” The court either overlooked the word “source” in the disputed phrase or read “source” out of the explanation.

[¶ 18.]' Much of the argument and a substantial portion of the circuit court’s analysis in this case focus on what is implied or suggested by the Attorney General’s lánguage. We cannot here be concerned with implication or suggestion. What is implied or suggested by the language used will obviously lie-in the eye of the - beholder and will necessarily vary from reader to reader and voter to voter. In statutory analysis, we would state that we cannot be concerned with what the legislature should have said or might have said, but what it did say. See e.g. State v. Galati, 365 N.W.2d 575, 578 (S.D.1985). Much the same is true here. We cannot be concerned with what the Attorney General should have said or could have said or might have said or what is implied or suggested by what he did say. Rather we must focus on the language chosen and whether it is an accurate statement of how the , proposed initiative changes existing law.

[¶ 19.] In addition the circuit court observed that the absence of the “eliminate this source of revenue language” in the Attorney General’s ballot explanation of the 2000 proposed repeal of video lottery and the 2000 proposed repeal of the inheritance tax means “either the attorney general did not adequately explain the legal effect of the video lottery and inheritance tax measure or it is an editorial comment unrelated to the legal effect of the initiative.”

[¶ 20.] The Attorney General attempted to use prior ballot explanations as precedent for the disputed language in Constitutional Amendment E. Because these explanations were never challenged we expressed no opinion on whether the language in the prior ballot explanations was proper under SDCL 12-13-9. Hoo-gestraat, 1998 SD 104 at ¶ 13, fn. 4, 583 N.W.2d 421, 424 at fn. 4. For the same reason we express no opinion on the video lottery and inheritance tax explanations. We simply observe that the use of different language in a ballot explanation does not render that language beyond the authority of SDCL 12-13-9 as long as the explanation represents an accurate statement of how the proposed initiative changes existing law.

[¶ 21.] The judgment and order issuing writ of certiorari is reversed.

[¶ 22.] MEIERHENRY, Justice, concurs.

[¶ 23.] ZINTER, Justice, concurs with writing.

[¶ 24.] SABERS and KONENKAMP, Justices, dissent.

ZINTER, Justice

(concurring).

[¶ 25.] I fully join the Court’s opinion and write only to emphasize three points.

[¶ 26.] First, we must remember that our scope and standard of review is limited. This Court’s scope of review in certio-rari is limited to examining the Attorney General’s jurisdiction and authority. SDCL 21-31-1; In the Matter of the Wrongful Payments made by the Brook-ings School District, 2003 SD 101, ¶ 16, 668 N.W.2d 538, 544-545. Furthermore, our standard of review on those issues allows the Attorney General “significant discretion” in carrying out his statutory duty of drafting ballot explanations. Hoogestraat v. Barnett, 1998 SD 104, ¶ 21, 583 N.W.2d 421, 425 (Gilbertson, J., concurring). The two principal reasons for such deference were set forth in Gormley v. Lan, 88 N.J. 26, 38-39, 438 A.2d 519, 525-526. Our case warrants repeating Ban’s extensive discussion of those reasons.

In evaluating the statement drafted by the Attorney General ... we should accord great deference to [the Attorney General’s] determination not only on the basis of settled principles of law, but also because of the glaring inappropriateness of judicial management and supervision of such matters. When within the scope of legislatively-delegated authority, administrative agents’ actions are presumptively valid, and where that authority confers discretion upon those agents, their actions will ordinarily not be overturned by the courts unless they are manifestly corrupt, arbitrary or misleading. We can conceive of few cases where administrative officials’ discretion is of necessity broader than here, given the enormous variety of statements that could properly be drafted within the authority vested in those officials. This being the case, the deference accorded the ... Attorney General must obviously be even greater than is generally the case. Finally, we have traditionally shown special deference to administrative agents charged with implementing the election laws. The other basis for yielding to the judgment of the administrative officers here is the inappropriateness of judicial involvement. Public questions often have substantial political overtones. As here, the drafting of an interpretive statement, as well as the question itself, can pit party against party, the Executive against the Legislature, and region against region. The appearance of impartiality is as important to judicial effectiveness and legitimacy as impartiality itself, and in these matters it will often be impossible to appear impartial. Rare is the case where the inadequacy of the interpretive statement will justify the risk of judicial intervention. That risk inheres not simply in the proposal of an alternative[,] but as well in the mere enjoining of the use of the proposed statement. Either can readily be perceived by one side or the other as both prejudicial to their cause and partial to that of their adversary.

Id. (internal citations omitted).

[¶ 27.] Although this deferential standard of review is no shield to retreat from our constitutional duty in the appropriate case, the rhetoric in this case proves the wisdom of Lan’s reasoning. .Thus, settled law on the Attorney General’s discretion and the inappropriateness of judicial management of ballot explanations both require that we decline Applicant’s invitation to become the ultimate scrivener of this ballot explanation.

[¶ 28.] I also write to point out that Applicant’s position is fatally inconsistent. It should not go unnoticed that this explanation is only three sentences long, and Applicant raises no objection to the first two sentences that frame the issue by indicating that the state, as well as many cities and towns, “collect a sales and use tax on the sale of food.” Applicant only objects to part of the last sentence explaining that passage of the .measure. would eliminate this source of revenue. However, it is incongruent to suggest that it is unlawful to explain one, but not both of the related matters at issue. Stated rhetorically, how can it be lawful to explain that a tax is collected, but unlawful to explain that passage of a new law will eliminate that source of revenue?

[¶ 29.] Finally, from my perspective, it defies logic and common sense to conclude that the “elimination of this source of revenue” is not a “result that the proposed [ ] amendment will have upon existing law.” It is equally nonsensical to conclude that the explanation is not a “recitation of the [purpose and legal] effect of a ‘Yes’ or ‘No’ vote.” See, Hoogestraat v. Barnett, 1998 SD 104, ¶ 8, ¶ 12, 588 N.W.2d at 423-424. The circuit court’s contrary conclusions are based upon a perceived distinction between the initiated measure’s legal effect and its practical effect. However, that is a distinction without a difference. The legal and practical effect of this measure is to repeal a tax and remove that source of revenue from the government’s coffers. Only a hyper-technical parsing of words could suggest that the measure does not legally affect sales and use tax law. Furthermore, the circuit court’s prohibition on any reference to the word “revenue” fails to consider the remaining statutory provisions that give the Attorney General authority to explain the “purpose” of the initiated measure, including an explanation “of the issue.” SDCL 12-13-9. “Revenue” is certainly a purpose of this measure, and it is unquestionably part of the issue.

[¶ 30.] A common sense reading of the Attorney General’s language reflects that it does no more than explain the issue, as well as the purpose and legal effect that the initiated measure will have on existing tax law. Therefore, when all provisions of SDCL 12-13-9 are considered, the Attorney General did not exceed his statutory authority. .

SABERS, Justice

(dissenting).

[¶31.] The last time this Court addressed an Attorney General’s ballot explanation, the author of the majority opinion recognized the tremendous responsibility of this Court and stated: “At stake here is the impartiality and integrity of the voting booth.” Hoogestraat v. Barnett, 1998 SD 104, ¶18, 583 N.W.2d 421, 425 (Gilbertson, J., concurring). Indeed, there are few other things as cherished or as necessary for our government as the act of voting. To aid in this awesome responsibility “[t]he Legislature has seen fit to assist the people in voting on proposed constitutional amendments created by initiative by authorizing the Attorney General to give a brief explanation per SDCL 12-13-9.” Id. When an Attorney General’s ballot explanation, which is printed directly on the ballot and is the last thing a voter sees before casting a vote, loses objectivity, it is objectionable. In this regard, our obligation is no less than that of the Attorney General, to take no sides in the debate on the proposed amendment but, instead, act impartially to ensure a voter is presented with a fair, accurate and concise explanation of the proposed measure. Because the majority opinion allows the Attorney General to breach this requirement, I dissent.

[¶ 32.] I agree with the majority opinion that the analytical framework for reviewing a disputed portion of an Attorney General’s ballot explanation was clearly set forth in Hoogestraat, 1998 SD 104, 583 N.W.2d at 421. We recognized that the significance of the ballot explanation is derived from the fact that “[t]he full text of a proposed amendment to the constitution is not printed on the election ballot in South Dakota.” Id. ¶ 8 (citing SDCL 12-13-11). Rather, the Attorney General is required to prepare an explanation of the proposed amendment by submitting “the statement, the title, the explanation, and a clear and simple recitation of the effect of a Tes’ or ‘No’ vote.” SDCL 12-13-9. “The explanation shall state succinctly the purpose and legal effect of the proposed amendment to the Constitution, initiated measure, or the referred law.” Id. (emphasis added). This explanation “shall be a clear and simple summary of the issue and may not exceed two hundred words in length.” Id.

[¶ 33.] The purpose of the Attorney General’s explanation “is to identify an amendment to an informed electorate rather than to educate it.” Hoogestraat, 1998 SD 104, ¶ 11, 583 N.W.2d at 424 (quoting Barnhart v. Herseth, 88 S.D. 503, 515, 222 N.W.2d 131, 137 (1974)). “[V]oters are presumed familiar with proposed amendments through the publicity given the amendments in the time leading up to the election.” Id. As a result, the ballot explanation is restricted. The scope of the ballot explanation is only to “clearly, simply, and succinctly identify and summarize the purpose and legal effect of a proposed amendment to an already educated and informed voter.” Id. ¶ 12.

[¶ 34.] In paragraph 11, the majority opinion provides:

In deciding the matter before us, we cannot take a side in the debate on the merits of the ballot issue. We also cannot allow that debate to enter the voting booth on the face of the ballot. Our prior cases have examined this statute as to what it requires and what it does not allow. The explanation must 1) be factually accurate, 2) legally accurate, 3) concise, 4) must not address collateral, 5) theoretical or 6) potential consequences of approval or disapproval by the voters, 7) must not be a statement of personal opinion and 8) must not attempt to advocate for or against the ballot question.

(numbers added) (citing Hoogestraat, 1998 SD 104, 583 N.W.2d at 421). The addition of the offending language “and eliminate this source of revenue” makes the explanation:

(1) less factually accurate;
(2) less legally accurate;
(3) less concise;
(4) address collateral consequences;
(5) address theoretical consequences;
(6) address potential consequences;
(7) a possible statement of personal opinion; and,
(8) advocates against the ballot question.

In other words, it fails on all of the eight factors.

[¶ 35.] I disagree completely with the majority opinion on its application of the law of Hoogestraat to these facts. It im-permissibly allows the Attorney General to go beyond the “basic purpose” of the ballot explanation which is to “identify an amendment to an informed electorate rather than to educate it.” Hoogestraat, 1998 SD 104, ¶ 11, 583 N.W.2d at 424. In this regard, the reasoning of the majority opinion relies heavily upon the rationale of the lone dissenter in that case to approve the disputed language as “legal effect.” See Hoogestraat, 1998 SD 104, ¶ 27, 583 N.W.2d at 426 (Amundson, J., dissenting). This is particularly perplexing considering that is a position which the author of the majority opinion did not join and rejected.

[¶ 36.] In this case, the Attorney General and Secretary of State contend that the phrase “eliminate a source of revenue” explains the direct legal effect of the proposed initiative. However, we have recognized that “the direct legal effect that must be succinctly stated refers to the result that the proposed constitutional amendment will have upon existing law.” Id. ¶ 12. Rather than remarking on how the proposed repeal of the food tax would effect existing law, the Attorney General’s explanation directed attention to the financial or “pocketbook” effect the proposal would have if adopted by the voters of the State. This is impermissible under the statutory framework.

[¶ 37.] In comparison, other states have statutorily authorized fiscal impact to be provided to the voters in a ballot summary when considering a proposed amendment. See Proposed Initiated Constitutional Amendment Concerning Unsafe Workplace Environment, 830 P.2d 1031, 1035 (Colo.1992). However, as we recognized in Hoogestraat, South Dakota’s statutory system is unique. Hoogestraat, 1998 SD 104, ¶ 9, 583' N.W.2d at 424. The Attorney General is limited to solely explaining the purpose and legal effect of the proposal with a clear and simple recitation. SDCL 12-13-9. By including matters outside the scope of the “purpose and legal effect” of the proposed amendment, the Attorney General’s explanation was unwarranted and statutorily prohibited. We are not to concern ourselves with the merit of this proposed amendment, that is the business of the electorate. Likewise, the Attorney General cannot interfere with the business of the electorate by intentionally or unintentionally bending to partisan sides in his ballot explanation.

[¶ 38.] Even if one were to accept the majority opinion’s determination that the reference to the effect on revenue is somehow permissible, factually, the disputed portion of the ballot is incorrect in that it indicates that food tax, as a source of revenue, would be “eliminate[d].” However, the initiated measure exempts certain foods from the effect of the proposed measure, making them taxable. For example, “the term, food, does not include alcoholic beverages, tobacco, soft drinks, candy or prepared foods.” In other words, the word “eliminate” is inaccurate and the word “modify” would be accurate. In that regard, the Attorney General’s statement is inaccurate and misleading.

[¶ 39.] Nevertheless, the majority opinion faults the drafters of the measure for not specifying more in their title concerning the exemptions. While the authors of the proposed measure drafted the title, it must be remembered that this was a title, part and parcel of the entire measure, which included the definition of “food.” The majority opinion removes the title from its context, faults the drafters for not defining words in the title, and then shifts the burden of providing an adequate explanation from the Attorney General, the party statutorily required to accurately and fairly explain the measure, to the drafters. It is not the fault of the drafters that the Attorney General did not explain the term “food” in the factual and legal sense it was used within this context. Yet, this is something that would more logically have been within the Attorney General’s mandate to explain the “legal effect” of the proposed measure. Apparently, this was secondary to the impact on revenue.

[¶ 40.] The circuit court properly recognized that the Attorney General’s ballot explanation crossed the line from explanation to advocacy. Even if the Attorney General’s statement were accurate, “it [would be] the accuracy of an advocate.” Gormley v. Lan, 88 N.J. 26, 438 A.2d 519, 526 (N.J.1981). Only with the omission of the offensive provision will the ballot explanation become concise and narrowly crafted as is required by SDCL 12-13-9, or accurate.

[¶ 41.] I dissent for all of these reasons.

A postscript to Attorney General Larry Long:

[¶ 42.] In Hoogestraat at paragraph 18, Justice Gilbertson said: “At stake here is the impartiality and integrity of the voting booth.” Hoogestraat, 1998 SD 104, ¶ 18, 583 N.W.2d at 425. Although he has apparently changed his mind, it is not too late for you to do the right thing.

[¶ 43.] You have won an advantage for your party, a political advantage. But you are the Attorney General for all the people of the State of South Dakota-your job is to fully and faithfully perform the duties of the chief law enforcement officer in the State of South Dakota for all of the people.

[¶ 44.] I encourage you to remove the offending language from the ballot and the voting booth. Do the right thing for all the people of South Dakota.

[¶ 45.] KONENKAMP, Justice,

joins this dissent, except for the postscript.

APPENDIX

INITIATED MEASURE

The following initiated measure was proposed by petition for submission to the voters. This initiated measure will not become effective unless approved by majority vote.

Initiated Measure I

Title: An act to exempt food from sales and use taxes.

Full Text of Initiated Measure I:

WE, THE UNDERSIGNED qualified voters of the state of South Dakota, petition that the following proposed law be submitted to the voters of the state of South Dakota at the general election on November 2, 2004 for their approval or rejection pursuant to the Constitution of the State of South Dakota. The substance of the proposed law is as follows:

Be it enacted by the people of South Dakota.

An act to exempt food from sales and use taxes.

Section 1. That chapter 10-45 be amended by adding thereto a NEW SECTION to read as follows:

There are exempted from the provisions of this chapter and the computation of the tax imposed by it, the gross receipts from the sale of food.

Section 2. That § 10-45-1 be amended by adding thereto four NEW SUBDIVISIONS to read as follows:

“Food,” and “food ingredient,” any substance, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that is sold for ingestion or chewing by humans and is consumed for its taste or nutritional value. The term, food, does not include alcoholic beverages, tobacco, soft drinks, candy, or prepared food;

“Soft drinks,” any nonalcoholic beverages that contain natural or artificial sweeteners. The term, soft drinks, does not include any beverage that contains milk or milk products, soy, rice or similar milk substitutes, or greater than fifty percent of vegetable or fruit juice by volume;

“Candy,” any preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of bars, drops, or pieces. The term, candy, does not include any preparation containing flour and does not require refrigeration;

“Prepared food” any:

(a) Food sold in a heated state or heated by the seller;
(b) Two or more food ingredients mixed or combined by the seller for sale as a single item. The term, prepared food, in this subsection does not include food that is only cut, repackaged, or pasteurized by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the Food and Drug Administration in chapter 3, part 401.11 of its Food Code as of January 1, 2003, so as to prevent food borne illnesses; or
(c) Food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used to transport the food.

Section 3. That chapter 10-46 be amended by adding thereto a NEW SECTION to read as follows:

There are exempted from the provisions of this chapter and the computation of the tax imposed by it, the gross receipts from the sale of food.

Section 4. That § 10 — 46-1 be amended by adding thereto four NEW SUBDIVISIONS to read as follows:

“Food,” and “food ingredient,” any substance, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that is sold for ingestion or chewing by humans and is consumed for its taste or nutritional value. The term, food, does not include alcoholic beverages, tobacco, soft drinks, candy, or prepared food;

“Soft drinks,” any nonalcoholic beverages that contain natural or artificial sweeteners. The term, soft drinks, does not include any beverage that contains milk or milk products, soy, rice or similar milk substitutes, or greater than fifty percent of vegetable or fruit juice by volume;

“Candy,” any preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of bars, drops, or pieces. The term, candy, does not include any preparation containing flour and does not require refrigeration;

“Prepared food” any:

(a) Food sold in a heated state or heated by the seller;
(b) Two or more food ingredients mixed or combined by the seller for sale as a single item. The term, prepared food, in this subsection does not include food that is only cut, repackaged, or pasteurized by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the Food and Drug Administration in chapter 3, part 401.11 of its Food Code as of January 1, 2003, so as to prevent food borne illnesses; or
(c) Food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used to transport the food.

The effective date of this repeal will be July 1, 2005.

      . The full text of Initiated Measure 1 is appended.

      . The Attorney General also jurisdictionally challenges the right of the circuit court to enter relief in this matter in the form of a writ of certiorari. Under SDCL 21-31-1 a writ of certiorari may be granted by a circuit court when an officer exceeds his or her jurisdiction. Thus in this case, the writ is appropriate to determine whether or not the Attorney General properly complied with his legal duties under SDCL 12-13-9. Moreover, cer-tiorari was found to be a proper method of addressing the scope of SDCL 12-13-9 in Hoogestraat.

      . While SDCL 12-13-9 does not allow the Attorney General to render a full-blown legal opinion on the face of the ballot, it does allow an explanation of the "legal effect” of the proposal. Hoogestraat.

      Clearly the language "legal effect” cannot be read out of the statute. The question then becomes what is meant by the statutory language "legal effect.” The word "effect” is defined as "[t]hat which is produced by an agent or cause; result; outcome; consequence.” Black's Law Dictionary 514 (6th ed 1990). "Legal” is defined as "of or pertaining to the law.” Id. at 892. Thus, the plain meaning of "legal effect” includes consequences of or pertaining to the law. (footnote omitted). Hoogestraat, 1998 SD 104 at ¶ 27, 583 N.W.2d at 426 (Amundson, J., dissenting).

        "Purpose” is defined as "That which one sets before him to obtain or accomplish or obtain ... the term is synonymous with the ends sought, an object to be obtained. Black’s Law Dictionary 862 (5th ed Abridged 1991).
      The purpose of taxation is the raising of revenue for governmental purposes. Brink v. Dann, 33 S.D. 81, 103, 144 N.W. 734, 737 (.1913). The legal effect of exempting food from sales and use taxes is eliminating this source of revenue.

      . Under the circuit court's analysis the Attorney General would be deprived of his discretion as, to how to author the ballot explanation, see ¶11, and would be relegated to merely regurgitating the language in the title of the proposed initiative. This would render SDCL 12-13-9’s requirement of explaining the purpose and legal effect of a measure a nullity.

      . There is also nothing in the text of this explanation justifying the circuit court’s conclusions that the explanation (1) implies that a yes vote "will strangle state and municipal budgets,” and, (2) "speculates that the Legislature will not replace the revenue.” Had there been such language (or implication), this would be a different case-.

      . Even with the inclusion of such financial information the explanation “must be clear, concise, true and impartial, and must not consist of argument, nor be such as to likely create prejudice, either for or against the ■ measure.’' Title, Ballot Title and Submission Clause Approved September 4, 1991, 826 P.2d 1241, 1244 (Colo.1992). Likewise, South Dakota's voters deserve nothing less.

      . For instance, the Governor's official statement against the initiated measure filed with the Secretary of State and contained in the record focuses almost exclusively on the loss of revenue and the “funding crisis” should the measure be approved. It is certainly the prerogative of the Governor to take a stand on this issue. However, it is not the Attorney General's job to reinforce any political view by the wording of the ballot explanation.


author: GORS, Circuit Judge.

text:
    2004 SD 103
    Bruce A. CRISMAN, Plaintiff and Appellant, v. DETERMAN CHIROPRACTIC, INC., Defendant and Appellee.
    Nos. 22968, 22976.
    Supreme Court of South Dakota.
    Considered on Briefs April 26, 2004.
    Decided Sept. 8, 2004.

      John K. Nooney of Thomas Nooney Braun Solay & Bernard, Rapid City, South Dakota, Attorneys for plaintiff and appellant.
    Thomas G. Fritz of Lynn Jackson Shultz & Lebrun, Rapid City, South Dakota, Attorneys for defendant and appellee.
   GORS, Circuit Judge.

[¶ 1.] Dr. Crisman sued Determan Clinic after he was fired by Dr. Determan. Dr. Crisman appeals the denial of double damages and the reduction of attorney fees. Dr. Determan filed a notice of review appealing the determination that Dr. Crisman was the prevailing party entitled to attorney fees. We affirm and remand for findings of fact and conclusions of law on attorney fees.

FACTS

[¶ 2.] Dr. Determan owns and operates a chiropractic clinic known as Alternate Healthcare Center of the Black Hills or Determan Chiropractic, Inc., (Determan Clinic) in Rapid City, South Dakota. Dr. Crisman is a licensed chiropractor who began to work for Determan Clinic in October 1996. The relationship between De-terman Clinic and Dr. Crisman was set forth in a document entitled “Employment Agreement” dated October 28, 1996, which expressly noted that it was not an employment contract.

[¶ 3.] The 1996 employment agreement provided that Dr. Crisman was an at-will employee. In a clause, inconsistent with at-will employment, the agreement also provided that the employer would give ninety days written notice prior to terminating the employee. The 1996 employment agreement included a noncompetition agreement. The 1996 employment agreement also provided that “In the event that any legal action or arbitration is filed in connection with this agreement, the prevailing party shall be entitled to all costs and reasonable attorney’s fees in any such action relating to this agreement.”

[¶ 4.] On January 6, 1997, Dr. Crisman and Dr. Determan signed a nine page office policy. The 1997 office policy expressly noted that it was not an employment contract. The office policy made no reference to the ninety days written notice of job termination that was found in the original 1996 employment agreement. Instead the office policy noted that all staff were at-will employees and their employment could end with or without notice at any time. The office policy expanded the non-competition agreement from a 25 mile radius to a 50 mile radius and provided for reimbursement for training costs incurred by the Determan Clinic as damages if the noncompetition agreement was violated.

[¶ 5.] Dr. Crisman was paid on the 15th of each month. Dr. Crisman’s monthly salary was $2,100 plus a percentage of the monthly receipts in excess of $7,000 (80% over $7,000, 35% over $10,400 and 40% over $14,600).

[¶ 6.] Over time Dr. Crisman and Dr. Determan lost confidence in one another.

[¶ 7.] On January 10, 2002, Dr. Deter-man sent a message to, “All Staff & Drs,” which read:

As per our conversation today — you need to show up at our a.m. ‘sched review’ meetings w/your planner. If you don’t show up w/your planner tomorrow — you won’t show up on Monday, and so on for each meeting.

Dr. Crisman had never been required to bring his planner with him to a meeting. Dr. Crisman did bring his planner to the staff meeting on January 11, 2002. When Dr. Determan asked to see it, Dr. Crisman refused, claiming it was personal property like his wallet. Dr. Determan then told Dr. Crisman that he was through and no longer worked at Determan Clinic.

[¶ 8.] On January 15, 2002, Dr. Cris-man sent a letter to Dr. Determan requesting pay for work performed through Saturday, January 12, 2002, and pay for accrued vacation. On January 17th Dr. Crisman asked for his check and was told that it could not be located. Dr. Crisman filed a summons and complaint on January 17, 2002, seeking wages for December 2001 through January 12th plus accrued vacation, double damages and ninety days severance pay. The complaint also sought an accounting of receivables realized by the clinic relating to his employment as well as a declaratory judgment on the noncompetition agreement, costs and attorney fees.

[¶ 9.] Dr. Determan was deposed on March 5, 2002. When asked why Dr. Cris-man was not paid, he replied, “because I have not paid him.” Dr. Determan’s answer, counterclaim and application for restraining order and preliminary injunction sought to enforce the noncompetition agreement in the 1996 employment agreement.

[¶ 10.] Dr. Crisman received his December wages on March 11, 2002. They were later determined to be $161.03 short. He received a partial payment for the first 12 days of January on April 30, 2002.

[¶ 11.] The trial court held that Dr. Crisman was underpaid for December by $161.03, and January by $4,357.67. The court determined that the wages for January needed to include two weeks of vacation and a percentage of receipts prorated through his vacation time. The trial court held that Dr. Crisman was the prevailing party and awarded costs of $3,365.12 and $10,000 in attorney fees.

[¶ 12.] Dr. Crisman appeals the denial of his claim for double damages and reduction of his claim for attorney fees from $35,579.50. Dr. Determan filed a notice of review of the determination that Dr. Cris-man was the prevailing party entitled to attorney fees.

STANDARD OF REVIEW

[¶ 13.] The standard of review for the issue of whether the failure to timely pay wages was oppressive, fraudulent or malicious conduct is a mixed question of fact and law. Baldwin v. National College, 537 N.W.2d 14, 17 (S.D.1995). The trial court’s findings of fact are reviewed under the clearly erroneous standard and findings will not be disturbed unless this Court is left with a definite and firm conviction that an error was made. Id. Conclusions of law are reviewed de novo. Hoffman v. Olsen, 2003 SD 26, ¶ 7, 658 N.W.2d 790, 792. Statutes are interpreted' de novo without deference to the trial court. Estate of Fountain v. Schroeder, 2001 SD 139, ¶ 6, 637 N.W.2d 27, 28. Mixed questions of fact and law are reviewed de novo.. Id.

DECISION

Double Damages

[¶ 14.] Dr. Crisman’s employment was terminated on January 11, 2002. Dr. Cris-man sued on January 17, 2002. Dr. Deter-man did not pay Dr. Crisman’s December wages until March 11, 2002, and did not pay his January wages until April 30, 2002. Both payments were less than the trial court ultimately awarded. SDCL 60.-11-10 requires .prompt payment of wages from an employer upon an employee’s termination at the next regular pay day which was January 15, 2002, for Dr. Crisman’s December 2001 wages. Dr. Crisman asked for double damages under SDCL 60-11-7 which provides:

In any action for the breach of an obligation to pay wages, where a private employer has been oppressive, fraudulent, or malicious, in his refusal to pay wages due to the employee, the measure of damages is double the amount of wages for which the employer is liable.

The trial court held that Dr. Determan’s conduct was not oppressive.

[¶ 15.] “Whether conduct is oppressive is a legal conclusion.” Lien v. Lien, 2004 SD 8, ¶ 30, 674 N.W.2d 816, 825; Landstrom v. Shaver, 1997 SD 25, ¶ 37, 561 N.W.2d 1, 7. A legal conclusion of oppressive conduct must be supported by the trial court’s findings of fact. Baldwin, 537 N.W.2d at 19. In Baldwin, which was also a double damages lawsuit under SDCL 60-, 11-7, this Court applied the dictionary definition of oppressive as “unreasonably burdensome: unjustly severe, rigorous, or harsh.” Id. In South Dakota Civil Pattern Jury Instruction 35-03 oppression is also defined as “conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.”

[¶ 16.] Here, as in Baldwin, there are no facts that support a finding that Dr. Determan’s conduct was “unjustly severe, rigorous, or harsh.” Baldwin, 537 N.W.2d at 19. Dr. Crisman argues that Dr. Deter-man’s conduct was oppressive because he did not give a reason, or alternatively a good reason, for withholding his wages. However, Dr. Crisman sued not just to collect undisputed wages due, but for a judicial determination of the amount of wages due and for other relief. Dr. Deter-man, like National College in Baldwin, was “merely exercising [his] right to have a judicial determination made on the obligation” under the terms of employment. Id.

[¶ 17.] There was a genuine dispute about what Dr. Determan owed Dr. Cris-man. Dr. Crisman not only sued Dr. De-terman for double his December wages but also for an additional ninety days wages under the ninety days notice provision in the original 1996 employment agreement. However, the trial court held that the subsequent 1997 office policy modified the 1996 employment agreement. Consequently, Dr. Crisman was not entitled to ninety days notice and pay before separation. In addition, the monthly bonus payable to Dr. Crisman based on a percentage of the receipts was in dispute. Finally, there was a dispute over whether Dr. Crisman was entitled to vacation pay. The amounts could not be determined until the trial court developed a formula, calculated the December and January wages, and resolved the severance and vacation pay issues. Ultimately, the trial court determined that the wages for both December and January were less than the amount claimed by Dr. Crisman and greater than the amount paid by Dr. Determan. The trial court found that the need to determine a formula and to calculate the wages was evidence that there was a genuine dispute. Therefore, the trial court concluded that there was no oppression. We agree that the delay in payment of the disputed wages in this case, pending a judicial determination, failed to rise to the level of oppression. The trial court did not err by denying double damages.

Attorney Fees

[¶ 18.] The 1996 employment agreement provided that:

In the event that any legal action or arbitration is filed in connection with this agreement, the prevailing party shall be entitled to all costs and reasonable attorney fees in any such action relating to this agreement.

In addition to the judgment for $4,518.70, Dr. Crisman claimed he was entitled to costs and attorney fees under the 1996 employment agreement. The trial court awarded Dr. Crisman $10,000 of the $35,579.50 Dr. Crisman sought for attorney fees. Dr. Crisman appealed the reduction of his fees to $10,000 and Dr. Determan filed a notice of review to appeal the trial court’s determination that Dr. Crisman was the prevailing party. Dr. Determan did not appeal the amount of the attorney fees. We will address Dr. Determan’s notice of review first because Dr. Crisman was not entitled to attorney fees if he was not the prevailing party.

Prevailing Party

[¶ 19.] The standard of review for determining who was the prevailing party is abuse of discretion. SDCL 15-17-37; Ridley v. Lawrence County Com’n, 2000 SD 143, ¶ 12, 619 N.W.2d 254, 259; City of Aberdeen v. Lutgen, 273 N.W.2d 183, 185 (S.D.1979).

[¶ 20.] Dr. Determan challenged whether Dr. Crisman was the prevailing party. According to Dr. Determan, Dr. Crisman did not prevail because he sued under the 1996 employment agreement and the trial court ruled that the 1997 office policy modified the 1996 employment agreement. Dr. Determan then concludes that he prevailed because the trial court awarded Dr. Crisman significantly less than he demanded in his complaint.

[¶ 21.] Dr. Determan cites Geraets v. Halter, 1999 SD 11, ¶ 20-21, 588 N.W.2d 231, 235, where the Geraets sued the Halters for specific performance of a land sale agreement. Instead, they received a money judgment which the Halters did not contest. The court determined the Halters were the prevailing party because the Geraets lost their specific performance claim. By analogy, Dr. Determan argues that since Dr. Crisman sued on the 1996 employment agreement but prevailed under the 1997 office policy, Dr. Crisman actually did not prevail.

[¶22.] On its face, the posture of the appeal supports Dr. Determan’s view because Dr. Crisman appealed the amount of his judgment and the amount of attorney fees awarded. Dr. Determan only noticed for review the trial court’s determination that Dr. Crisman was the prevailing party. Usually, the non prevailing party appeals and the prevailing party does not appeal. However, in the law, nothing is as simple as it looks.

[¶ 23.] Having just presided over the case, the trial court was in the best position to determine which party prevailed. In Lutgen, 273 N.W.2d at 185, this Court held: “The prevailing party is the party in whose favor the decision or verdict is or should be rendered and judgment entered.” While Dr. Determan did succeed in cutting his losses, Dr. Determan still did not prevail. Dr. Crisman not only obtained a money judgment, which was the essence of his lawsuit, but also he prevailed on the noncompetition clause and vacation pay. Dr. Crisman prevailed. Dr. Crisman was not required to prevail on every issue to be the prevailing party. Alvine v. Mercedes-Benz of North America, 2001 SD 3, ¶ 25, 620 N.W.2d 608, 613. The trial court did not abuse its discretion in determining that Dr. Crisman was the prevailing party.

Reasonable Attorney Fees

[¶ 24.] An award of attorney fees is reviewed under the abuse of discretion standard. City of Sioux Falls v. Johnson, 2003 SD 115, ¶ 6, 670 N.W.2d 360, 362.

[¶ 25.] Dr. Crisman sought attorney fees of $35,579.50. The trial court reduced the attorney fees award to $10,000. • Dr. Crisman alleges that $10,000 does not reflect reasonable ■ attorney fees and is an abuse of-discretion. Conversely, Dr. De-terman concedes that the $10,000 award is reasonable if Dr. Crisman is the prevailing party.

[¶ 26.] The American rule is that each party bears the party’s own attorney fees. Public Entity Pool for Liability v. Score, 2003 SD 17, ¶ 7, 658 N.W.2d 64, 67-68. However, attorney fees are allowed when there is a contractual agreement that the prevailing party is entitled to attorney fees or there is statutory authority authorizing an award of attorney fees. City of Aberdeen v. Rich, 2003 SD 27, ¶ 25, 658 N.W.2d 775, 781. Here attorney fees are provided to the prevailing party under the 1996 employment agreement.

. [¶ 27.] This Court has set forth factors for the trial court to consider in setting attorney fees in numerous decisions. Recently, in Duffy v. Circuit Court Seventh Jud. Cir., 2004 SD 19, ¶ 16, 676 N.W.2d 126, 134, and Atchison v. Seventh Judicial Circuit, 2004 SD 20, ¶ 3, 676 N.W.2d 814, 816, this Court determined the factors for consideration in determining court appointed attorney fees:

(1) the time spent and services rendered;
(2) the complexity of the case and difficulty of the questions involved;
(3) the character and importance of the litigation;
(4) the skill required to perform the legal service properly;
(5)'the time limitations imposed by the client or by the circumstances;
(6) the fee customarily charged in the locality for similar legal services;
(7) the experience, reputation, and ability of the lawyer performing the services; and
(8) the possible punishment involved. Duffy, 2004 SD 19, at ¶ 16, 676 N.W.2d at 134.

[¶ 28.] The factors to be considered in awarding attorney fees in a civil case are set forth in City of Sioux Falls v. Kelley, 513 N.W.2d 97, 111 (S.D.1994):

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

[¶ 29.] Similar factors to be considered in awarding attorney fees in divorce cases are set forth in Ryken v. Ryken, 440 N.W.2d 300, 305-06 (S.D.1989); Garnos v. Garnos, 376 N.W.2d 571, 575 (S.D.1985); and Hybertson v. Hybertson, 1998 SD 83, ¶ 24, 582 N.W.2d 402, 407. In addition to considering the property owned by each party, their relative incomes and the liquidity of their assets, the following factors are to be considered:

(1) the intricacy and importance of the litigation,
(2) labor and time involved,
(3) the skill required to draw the pleadings,
(4) discovery procedures utilized,
(5) existence of complicated legal problems,
(6) the time required to try the case,
(7) whether written briefs were required,
(8) whether an appeal to the Supreme Court was involved, and
(9) whether a party has unreasonably increased the time spent on the case.

[¶ 30.] This Court has consistently required trial courts to enter findings of fact and conclusions of law when ruling on a request for attorney fees. Hoffman v. Olsen, 2003 SD 26 at ¶ 10, 658 N.W.2d at 793. Without findings of facts and conclusions of law there is nothing to review. Factors for the trial court to use to consider the reasonableness of attorney fees come from prior cases and the Model Rules of Professional Conduct. Duffy, 2004 SD 19, ¶ 16, 676 N.W.2d at 134.

The fee should not be based on any one single factor but all of these matters should be taken into consideration. The only requirement is that the fee which the court fixes in each case must be reasonable for the services rendered.

Id. While calculation of fees must begin with the hourly fee multiplied by the attorney’s hours:

We are not under the illusion that a ‘just and adequate’ fee can necessarily be ascertained by merely multiplying attorney’s hours and typical hourly fees. However, we are convinced that this simple mathematical exercise is the only legitimate starting point for analysis. It is only after such a calculation that other, less objective factors, can be introduced into the calculus.

Id. The trial court is required “to make specific findings based upon the factors.” Id. at ¶ 18.

[¶ 31.] In this case, the trial court held a hearing on July 1, 2003, to consider findings of fact, conclusions of law, costs and attorney fees. The only finding of fact addressing reasonable attorney fees was 31:

In conjunction with paragraph XIV, sub-part f of Trial Exhibit 1 [Employee Agreement], the Court finds as a matter of fact that the Plaintiff has incurred reasonable attorney fees in the amount of $10,000.

The sole conclusion of law addressing reasonable attorney fees was 18, “Plaintiff is entitled to attorney’s fees in the amount of $10,000.” The trial court stated the following during the hearing on attorney fees held on July 1, 2003:

I’m going to award Dr. Crisman reasonable attorney’s fees based upon the evidence I heard in this case, that everybody heard, I’m going to award attorney’s fees in the amount of $10,000.... The Plaintiff is entitled to attorney’s fees which I have determined to be reasonable, in view of all I have heard in this matter of $10,000 total. That will include sales tax.

The trial court’s reduction of Dr. Cris-man’s attorney fees from $35,579.50 to $10,000 was apparently based on frustration with the parties’ failure to bring up the 1997 office policy which modified the 1996 employment agreement until the trial was in progress. Dr. Crisman sued on the 1996 employment agreement. Dr. Deter-man defended on it. Then the 1997 office policy surfaced. Dr. Crisman had not mentioned it and Dr. Determan had not remembered it. Nevertheless, the 1997 office policy was determinative on several issues, including the noncompetition agreement, vacation pay and the ninety days notice issue. The trial court made it clear that the attorney fees incurred would have been substantially less if the parties had brought up the 1997 office policy in a timely manner. At the hearing on attorney fees, the trial court said “I think maybe both of you spent too much time on this case.”

[¶ 32.] We also note that the $35,579.50 attorney fees plus $3,365.12 costs total $38,944.62 which does not compare favorably with the $4,518.70 judgment recovered. Going one step farther, the maximum potential financial recovery viewed in the light most favorable to Dr. Crisman would have been $30,779.79. The potential recovery pales next to the expenditure of $38,944.62 in costs and attorney fees.

[¶ 33.] The hearing transcript and the findings of fact and conclusions of law do not disclose that the trial court considered the required factors in formulating a conclusion that reasonable attorney fees were $10,000. Johnson, 2003 SD 115, ¶8, 670 N.W.2d at 362-63. Here, as in Atchison, the trial court,

explained the reasons for reducing [the attorney’s] fees, the explanation did not apply the correct legal standard in determining whether the attorney fees were just and reasonable. Consequently, the court did not regularly pursue its authority. We, therefor, remand ... to apply the correct standard and procedure. On remand [the trial court] is to reconsider the reasonableness of [the] attorney fees by taking into consideration all of the reasonableness factors and by giving an explanation based upon those factors.

2004 SD 20, ¶ 10, 676 N.W.2d at 819. We are unable to determine from this record whether the trial court abused its discretion in reducing Dr. Crisman’s attorney fees to $10,000.

CONCLUSION

[¶ 34.] We affirm the denial of double damages. We affirm the determination that Dr. Crisman was the prevailing party entitled to attorney fees under the 1996 employment agreement. We remand for findings of .fact and conclusions of law after consideration of the appropriate factors for award of attorney fees. We award Dr. Crisman $3,000 attorney fees on appeal.

[¶ 35.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER and MEIERHENRY, Justices, concur.

[¶ 36.] GORS, Circuit Judge, for SABERS, Justice, disqualified.

      . Dr. Crisman admitted during his testimony that Dr. Determan had been overpaying him by refiguring the salary calculations Dr. Cris-man submitted. However, when the error was in his favor, Dr. Crisman did not complain.

      . The trial court taxed the full $3,365.12 submitted by Dr. Crisman for costs. Dr. Deter-man did not appeal the award of costs in his notice of review.

      .In his brief, Dr. Determan concedes: "If this Court finds that Dr. Crisman was the prevailing party, $10,000 in attorney fees is more than reasonable.”

      . The potential recovery included December’s wages of $5,252.22 plus the $161.03 underpayment for a total of $5,413.25. Double the undisputed December wages for another $5,252.22. Add January’s wage for twelve days plus two weeks vacation for $4,357.67. Finally add wages for the ninety day notice claimed under the 1996 employment agreement (using December's $5,252.22 as an average) for another $15,756.66. The total is $30,779.79.


author: ERICKSON, Circuit Judge.

text:
    2004 SD 104
    WESTMED REHAB, INC., Appellee, v. DEPARTMENT OF SOCIAL SERVICES, Appellant.
    No. 23010.
    Supreme Court of South Dakota.
    Considered on Briefs April 26, 2004.
    Decided Sept. 15, 2004.

      Robert Gusinsky of Lynn, Jackson, Shultz & Lebrun Rapid City, South Dakota, Attorneys for appellee.
    Lawrence E. Long, Attorney General, Kirsten E. Jasper, Assistant Attorney General Pierre, South Dakota Attorneys' for appellant.
   ERICKSON, Circuit Judge.

[¶ 1.] The South Dakota Department of Social Services (DSS) appeals a circuit court order reversing a DSS decision holding itself entitled to recovery or reimbursement of monies paid for certain equipment provided to Medicaid recipients. As part of its appeal, DSS challenges a circuit court ruling that ARSD 67:16:29:04.02 draws a distinction between a completed certificate of medical necessity (CMN) and a signed CMN for purposes of Medicaid reimbursement. Additionally, it challenges the circuit court's ruling that DSS’s remedy was clearly erroneous in light of .the entire evidence in the record and arbitrary and capricious. We affirm in part, reverse in part and remand.

FACTS ■

[¶2.] WestMed Rehab, Inc. (WestMed) is a durable medical equipment provider (DME provider) under the South Dakota Medicaid program administered by DSS. WestMed submitted claims for payment for equipment provided to Medicaid patients and DSS paid them. In March 1999, DSS conducted a post-payment review of paid claims. DSS found that WestMed had been overpaid based upon WestMed’s failure to properly complete CMNs recorded in patient files.

[¶ 3.] WestMed concedes that the contested CMNs were not signed by the prescribing physician within the mandated timeframe. On the other hand, DSS concedes that the services and equipment were actually provided, were medically necessary and were appropriately priced.

[¶ 4.] A hearing officer upheld DSS’s determination that WestMed was overpaid $71,477.06 due to improperly completed CMNs. On appeal, the circuit court found that ARSD 67:16:29:04.02 does not defeat a claim on the mere technicality that CMNs are not properly signed by the prescribing physician within thirty days of the issuance of the prescription. The circuit court also found that, under these circumstances, the recovery of monies paid for items that were admittedly provided, medically necessary and appropriately priced would be clearly erroneous and arbitrary and capricious.

STANDARD OF REVIEW

[¶ 5.] The parties agree that this action involves an issue concerning the construction and interpretation of an administrative rule and, thus, it is subject to de novo review. Nelson v. South Dakota Bd. of Dentistry, 464 N.W.2d 621, 624 (S.D.1991).

ISSUE ONE

[¶ 6.] Whether DSS erred in determining that it was entitled to reimbursement for Medicaid claims which were supported by an undated, and/or unsigned certificate of medical necessity filed after the thirty day deadline set forth in ARSD 67:16:29:04.02.

[¶ 7.] The circuit court found that the language of ARSD 67:16:29:04.02 draws a distinction between a completed CMN and a signed CMN. The court concluded that, because of the use of different language in two phrases of the rule, the CMN must merely be filled out within thirty days after the date of prescription, but need not be signed or dated. The pertinent phrases are: “[t]he provider shall ensure that a certificate of medical necessity ... is completed, signed, and dated within 30 days after the date of the prescription” and “[flailure to obtain or maintain a properly completed medical necessity form is cause for non-payment.”

[¶ 8.] With regard to the interpretation of administrative rules, this Court’s function has long been clear. In Schroeder v. Dept. of Social Services, 1996 SD 34, ¶ 9, 545 N.W.2d 223, 227-228, this Court once again stated: “Administrative regulations are subject to the same rules of construction as are statutes. When regulatory language is clear, certain and unambiguous, our function is confined to declaring its meaning as clearly expressed, (citations omitted).”

[¶ 9.] “ Words and phrases ... must be given their plain meaning and effect.’ ” Cromwell v. Rapid City Police Dep’t., 2001 SD 100, ¶ 9, 632 N.W.2d 20, 23 (quoting Lekanidis v. Bendetti, 2000 SD 86, ¶ 16, 613 N.W.2d 542, 545). Only where there-is an ambiguity in an agency rule may a court “look to the object of the rule and the evil or mischief which it is designed to remedy and apply a reasonable construction which best accomplishes the purpose of the rule.” Island v. Dept, of Corrections, 1996 SD 28, ¶8, .545 N.W.2d 201, 203 (quoting Nelson v. South Dakota State Bd. of Dentistry, 464 N.W.2d 621, 624 (S.D.1991)). ■ ■

[¶ 10.] Here, there' is no ambiguity. Common sense dictates that a professional care provider in reading the phrase “completed, signed, and dated,” in ARSD 67:16:29:04.02 would conclude that the form needed to be signed and dated to be completed. According to the plain language of this rule, a properly completed medical necessity form is one that is filled out, signed and dated. To give the phrase any other interpretation strains common sense. Thus, we hold that the circuit court erred in drawing a distinction between a completed CMN and a signed CMN.

ISSUE TWO

[¶ 11.] Is the failure to have a certificate of medical necessity form signed and dated by the prescribing physician within thirty days of the issuance of the prescription a basis for denying reimbursement?

[¶ 12.] The circuit court concluded that DSS’s decision was clearly erroneous under SDCL 1-26-36(5) and arbitrary and capricious under SDCL 1-26-36(6). This is a question of first impression in South Dakota. We have never before reviewed a sanction for noncompliance with Medicaid regulations. For reasons set forth below, the standard of review for sanctions imposed for noncompliance with Medicaid regulations is whether the sanction imposed was “[arbitrary and capricious or characterized by abuse of discretion or clearly unwarranted- exercise of discretion.” SDCL 1-26-36(6).

[¶ 13.] In Butz v. Glover Livestock Comm’n Co., 411 U.S. 182, 185-186, 93 S.Ct. 1455, 36 L.Ed.2d 142 (1973), the United States Supreme Court held that when an agency is authorized to impose sanctions for honcompliance with administrative regulations, the agency is entitled to substantial deference, unless its choice of sanctions is “unwarranted in law” or “without justification in fact.”

[¶ 14.] Medicaid was established under Title XIX of the Social Security Act. Participating states provide federally funded medical assistance to certain eligible persons as needed. 42 U.S.C. § 1396. See also SDCL 28-6-1. The program is designed to enable each state, “as far ’as practicable” to proride medical assistance to individuals whose income and resources are insufficient to meet the costs of necessary medical services. Id. Medicaid is primarily administered by the participating state, under a state plan, subject to federal guidelines and constraints. 42 U.S.C. §§ 1396,1396a(a).

[¶ 15.] In order to comply with the Medicaid fraud detection and investigation provisions of the Medicaid Act, ARSD 67:16:29:04.02 • was adopted. The only sanction set forth in ARSD 67:16:29:04.02 for noncompliance is nonpayment. While the regulation provides that failure to obtain a properly signed and completed CMN “is cause” for repayment, that language does not mandate the repayment sanction. Instead, discretion is provided under the state rule, and therefore, lesser but reasonable sanctions may be considered.

[¶ 16.] This appeal does not challenge the validity of the administrative rules, but rather, the reasonableness of their application. In other words, we merely decide whether the sanction imposed was “arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.” SDCL 1-26-36(6).

[¶ 17.] DSS argues that by federal regulation it is required to recover any overpayment made to a provider. 42 C.F.R. § 455.16. DSS overstates its case. Nonpayment or, more appropriately, recovery of overpayments is merely one option or sanction available under the cited federal regulation. In fact, the federal rules envision a continuum of sanctions. 42 C.F.R. § 455.16 indicates that the matter can be resolved by various means such as: sending a warning letter; suspending or terminating the provider from participation in the Medicaid program; seeking recovery of payments made to the provider; or imposing other undefined, but circumstantially appropriate sanctions provided under the state plan. In fact, under South Dakota’s state plan, a consideration of alternatives is necessarily included in exercising the department’s discretion.

[¶ 18.] It is clear that the circuit court’s concern was that the remedy imposed by DSS appears harsh under these circumstances. DSS admits that the thirty day timeframe was established because of problems providers had getting doctors to fill out and sign the CMN at the time the prescription was issued. DSS admits that its review found that the services were actually provided, were medically necessary, and were appropriately priced.

[¶ 19.] There is nothing in statute or rule establishing the prepaymenVpostre-view program. DSS argues that it came into being because the department does not have the manpower to check every claim from every provider so it issues payments based upon the provider’s assurance that the claim is valid. At some later date, a post-payment review is conducted. Beyond explaining the origin of the prepayment/post-review program, that argument is irrelevant to this action. It is not a factor in determining what sanction, if any should be imposed.

[¶ 20.] In this case, the record does not demonstrate that DSS considered any other reasonable sanctions. For example, DSS fails to explain why it could not merely suspend WestMed from the prepayment program and require WestMed’s CMN to be filed prior to payment. Nor does DSS explain why, under the circumstances— particularly with its own finding that the services were actually provided, were medically necessary, and were appropriately priced — the lesser sanctions would be inappropriate.

[¶ 21.] In a case where the validity and medical necessity of the claims is not in dispute, but only the timeliness of the paperwork, imposing the harshest penalty is questionable. By definition, a sanction is arbitrary and unreasonable if it is imposed without considering the imposition of lesser reasonable alternatives. “Imposing a sanction based on an improper understanding of the law is always an abuse of discretion, rendering the sanction arbitrary and capricious and therefore impermissible.” United States v. International Brotherhood of Teamsters, 170 F.3d 136, 143 (C.A.2, 1999)(citing SEC v. Chenery Corp. 318 U.S. 80, 94, 63 S.Ct. 454, 87 L.Ed. 626 (1943)(internal citations omitted)).

[¶ 22.] Because this record does not demonstrate that DSS considered any other reasonable sanction, the circuit court’s finding that DSS’s decision was arbitrary and capricious is affirmed. However, concerning disposition of this issue, the circuit court is reversed and the matter is remanded with instructions to remand to DSS to consider and make findings clearly setting forth the reason repayment was chosen rather than some lesser sanction..

[¶ 23.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER and MEIERHENRY, Justices, concur.

[¶ 24.] ERICKSON, Circuit Judge, for SABERS, Justice, disqualified.

      . ARSD 67:16:29:04.02 provides:
      The provider shall ensure that a certificate of medical necessity as contained in Appendix C at the end of this chapter is completed, signed, and dated within 30 days after the date of the prescription. The medical equipment provider must maintain the certificate of medical necessity in the recipient's clinical record. Failure to obtain or maintain a properly completed medical necessity form is cause for nonpayment, (emphasis added).

      . By this opinion we are not suggesting what remedy is appropriate, but rather that DSS should make findings that clearly reflect the reason for its selection of the sanction it chooses.


author: PER CURIAM.

text:
    CITY OF DES MOINES, Appellant, v. HOUSBY-MACK, INC. and A Development Company, Inc., Appellees.
    No. 02-1998.
    Supreme Court of Iowa.
    July 21, 2004.
    Rehearing Denied Oct. 22, 2004.
    Susan A. Low, Des Moines, for appellant.
    Daniel L. Manning of Connolly, O’Mal-ley, Lillis, Hansen & Olson, L.L.P., Des Moines, for appellees.
   PER CURIAM.

The appeal in this spirited condemnation case is. unusual in that the parties cannot agree even on a list of issues. The City of Des Moines, the condemning authority, complains that its theories about the ownership of the condemned property were not correctly submitted to the jury. Those interested in the property contend that no theory concerning ownership should have been submitted. We reverse and remand.

Housby-Mack, Inc. (Housby) buys, sells, and repairs cement mixer trucks. Housby owned a facility at 106 Southwest 16th Street in Des Moines, where it had painted trucks since the late 1960s. In January 2001, the City of Des Moines (city) condemned the property for the Martin Luther King Parkway. By that time, Housby had moved its main offices ten miles away to 4747 Northeast 14th Street. A Development Company, Inc. (ADC) had leased the Northeast 14th Street property to Housby since 1976. Housby and ADC are closely related companies, owned and operated by the same family.

A Housby representative attended a public meeting regarding the roadway construction schedule in November 1995. In a follow-up letter, the city advised Housby that acquisition of the property was scheduled for late 1997 or 1998. In November 1997 the city council formally approved acquisition. Housby solicited the acquisition schedule. After its May 26, 1998 funding authorization, the city mailed official notice on May 29,1998.

There is conflicting evidence respecting Housby’s attachment to the property. Housby insists the property was invaluable to its truck-painting business because it was “grandfathered” under DNR and EPA environmental regulations. The city counters that in early 1998 Housby attempted to sell the property to Meredith Corporation for $340,000. In addition, Housby attempted to sell the property in 1976, 1981, 1983, 1984, and 1986, and Housby leased the property to Robert Daniels of Truck Painters from 1976 until 1990, suggesting it was not essential to Housby’s operations.

On August 3, 1998, Housby transferred the property by warranty deed to ADC. ADC in turn leased that property back to Housby as part of a new lease, which also embraced the separate commercial property at Northeast 14th Street that ADC had been leasing to Housby since 1976. From the August 3, 1998 transfer until the condemnation in January 2001, neither Hous-by nor ADC made any improvements to the property.

The city’s appraiser considered the property owner-occupied and did not consider Housby’s lease an arm’s length transaction. He therefore appraised the property at $350,000 and assigned no value to any supposed leasehold interest. Hous-by countered that it was entitled to compensation for its leasehold interest based on the “larger parcel” theory.

The Polk County Compensation Commission held a hearing on January 19, 2001, and condemned the property. By this time Housby was the named lessee, while ADC was the titleholder of record. The commission awarded ADC $364,700 for its fee interest and Housby $122,300 for its leasehold interest. The city appealed both awards, and Housby appealed the compensation for its leasehold interest.

The district court allowed the city to present its “sham transaction” theory. The city introduced substantial evidence that Housby and ADC’s sale and leaseback arrangements were not arm’s length transactions. The jury nonetheless awarded ADC $350,000 and Housby $330,000 — increasing Housby’s award for its leasehold interest by more than $200,000. The district court ordered the city to pay attorney fees of $72,720.

On the city’s appeal to us, it contends the two closely related corporations should not receive separate compensation for what is the same taking.

I. Defendants, Housby and ADC, contend a condemnation proceeding is no proper place to resolve ownership disputes. In an appeal under Iowa Code section 6B.18 (2001), the district court acts in an appellate capacity, reviewing only matters that were appropriate for action by the sheriffs jury. Because a sheriffs jury could not resolve property and leasehold issues, the argument goes, the district court jury could not be called upon to consider those matters.

So our first question is whether it was appropriate for the district .court to undertake to resolve issues relating to ownership of the property by the two corporations. We think the answer is clearly yes. See Bourjaily v. Johnson County, 167 N.W.2d 630, 635 (Iowa 1969) (listing cases in which nondamage issues have been considered on appeal of condemnation award). Interest in the property is a possible issue in many condemnation cases, and we have long recognized the district court can resolve them. See Montgomery County v. Case, 212 Iowa 73, 75-77, 232 N.W. 150, 152-53 (1930).

This is the prevailing view in other jurisdictions. Disputes concerning ownership and claims on the property can be resolved as a part of a traditional condemnation proceeding. See Annotation, Necessity of Trial or Proceeding, Separate From Main Condemnation Trial or Proceeding, 'to Determine Divided Interest in State Condemnation Award, 94 A.L.R.3d 696, 700-01 (1979). It was appropriate for the city to raise this challenge as a part of the condemnation proceeding.

II. In many, perhaps most, jurisdictions when the property condemned is subject to a leasehold, the courts apply the “unit rule,” sometimes called the “undivided basis rule.” 26 Am. Jur. 2d Eminent Domain § 260, at 675-76 (1996); 29A C.J.S. Eminent Domain § 190, at 456-58 (1992). In those jurisdictions, condemnations implicate a two-step procedure. First, the total compensation for all property rights is determined. In the second step, the court apportions that award among the various interests. 26 Am. Jur. 2d Eminent Domain § 258, at 673; 29A C.J.S. Eminent Domain § 189, at 455. Our prior cases have rejected the unit rule, holding that the interests of the owner and the lessee should be compensated separately and can exceed the total value of the condemned property. Fritz v. Iowa State Highway Comm’n, 270 N.W.2d 835, 843 (Iowa 1978). But that does not mean the city’s challenge to the corporation’s lease is immaterial.

If the lease was a sham, separate compensation was not appropriate. Courts regularly ignore sham transactions in fixing responsibility in corporate matters. See, e.g., Tannahill v. Aunspach, 538 N.W.2d 871, 873 (Iowa Ct.App.1995) (“[a] corporate entity' may also be disregarded under exceptional circumstances ... [and] [tjhese circumstances include sham corporations serving no legitimate purpose which are used to perpetrate fraud”); ac cord Am. Elec. Power Co. v. United States, 326 F.3d 737, 741-44 (6th Cir.2003) (under the “sham in substance” doctrine, federal courts refuse to recognize transactions effected only for tax benefits); 131 Main St. Assocs. v. Manko, 897 F.Supp. 1507, 1518—20 (S.D.N.Y.1995) (same).

The city offered ample evidence to show the lease was a sham because the property is in reality owned and used by the corporations as a single entity. If that evidence is believed, the jury should not have awarded damages for a leasehold interest because only one ownership of the property is involved. This is not a matter, as the corporation argues, of inappropriate piercing of the corporate veil. It is because the taxpayers should not be called upon to compensate for phantom leases. The trial court should have granted the city’s request that the jury be instructed on its theory: the lease could be disregarded if the jury establishes it to be a sham. This error requires a reversal and remand for a new trial.

III. The city also assigns error in the court’s refusal to direct a verdict in its favor, again because the lease was a sham that did not merit separate compensation. Though there certainly was strong evidence of a sham, the motion was correctly overruled. The city held the burden of proof to show the sham. Iowa R.App. P. 6.14(6)(e). The evidence on the point, though strong, did not establish it as a matter of law. The question whether the lease was a legitimate business arrangement between the corporations must be retried.

IV. Other assignments challenge instructions and rulings, most of which are not likely to recur on remand. One observation, however, seems appropriate. The city challenges the court’s instruction no. 18 relating to the value of the leasehold if the jury finds the lease to be valid. The challenge is well-taken because the instruction as given could have led the jury to conclude that Housby was entitled to compensation merely because condemnation shortens the duration of the leasehold interest. The measure of damages for the taking of a leasehold interest is well-established. It is the “market value of the unexpired term of the lease over and above the rent stipulated to be paid.” Interstate Fin. Corp. v. Iowa City, 260 Iowa 270, 274, 149 N.W.2d 308, 311 (1967); accord Des Moines Wet Wash Laundry v. City of Des Moines, 197 Iowa 1082, 1085, 198 N.W. 486, 488 (1924).

Y. The city also challenges the award of attorney fees, a matter we review for abuse of discretion. Wooldridge v. Cent. United Life Ins. Co., 568 N.W.2d 44, 50 (Iowa 1997). We find no abuse on the basis of the record before the trial court. The matter will necessarily be revisited following trial on remand.

REVERSED AND REMANDED.

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

      . Housby and ADC combined their financial statements in 1998, 1999, 2000, and 2001 because, according to their auditor, "[t]he operations of these entities [were] closely related and the entities are owned by substantially the same stockholders and members of the affiliated entities.”
      The warranty deed and leaseback were certainly not typical business transactions. When Housby deeded the property to ADC, it neglected to update the legal abstract. Moreover, the mortgage with West Bank was never released. The mortgage continued to secure Housby’s "present and future loans and advances” as of the condemnation.
      ADC never paid Housby for the property, provided any sort of promissory note, or established any terms for repayment. Though the deed records the transfer taking place in August 1998, ADC's books did not record the transfer until the end of 1998.
      Jack and Shirley Housby provided West Bank with "continuing guarantees” on May 31, 1998, pledging properties owned by ADC to secure Housby’s debts. These continuing guarantees remained in effect through the date of condemnation.
      Housby’s rent payments were erratic. Housby was often in substantial arrears based on the August 1998 lease. Housby's cash transfers to ADC were called "rent,” but were in turn used to discharge Housby’s obligations, such as real estate taxes that Housby was supposed to pay under the terms of the August 1998 lease.
      An expert witness testified that the sale and leaseback of the property did not reflect a normal business arm’s length transaction.