author: DORIS 0. HUSPENI, Judge

text:
    In re the Marriage of Audrey C. JOHNSON, Petitioner, Appellant, v. James V. JOHNSON, Respondent.
    No. C0-00-1654.
    Court of Appeals of Minnesota.
    May 29, 2001.

      Jeffrey D. Skonseng, Krekelberg Law Firm, Fergus Falls, MN, (for appellant).
    Melinda Lee Hanson, McLarana, Han-naher & Skatvold, Moorhead, MN, (for respondent).
    Considered and decided by WILLIS, Presiding Judge, AMUNDSON and HUSPENI, Judges.
   OPINION

DORIS 0. HUSPENI, Judge

On appeal from an order denying post-decree motions, appellant challenges the district court’s rulings (1) allowing respondent to voluntarily reduce appellant’s portion of respondent’s pension benefits and (2) denying appellant attorney fees and costs. Because the district court did not err in clarifying the amended decree by stating it did not limit respondent’s right to elect survivor annuity benefits and did not abuse its discretion by denying appellant’s request for attorney fees, we affirm.

FACTS

The 30-year marriage of appellant Audrey C. Johnson and respondent James Johnson was dissolved in 1982. Pursuant to the decree, marital assets were divided approximately equally. Respondent’s pension from the U.S. Department of Agriculture was recognized in the decree as a marital asset. While the then-current surrender value of $20,113.36 was awarded to respondent, no division was made of the $159,518 sum found by the court to be the then-present value of the pension. Appellant was awarded temporary maintenance of $500 per month beginning January 1983, with a periodic reduction in that amount over time. Maintenance payments were to cease on December 31,1992.

In December 1986, in response to a motion by appellant and after respondent’s retirement, the district court provided for the division of pension benefit payments between the parties. The resulting amended decree provided that appellant was entitled to receive one-half of 30/34ths of respondent’s pension benefit. The amended decree was silent, however, on respondent’s right to elect survivor’s benefits in the event of his remarriage.

In June 1990, respondent married a second time and elected survivor benefits under his pension for his new wife. He funded the survivor benefits in large part with a lump-sum payment, and in part with the pension annuity. However, because of his election of benefits, both parties’ benefit payments were reduced from September 1992, when respondent filed for spousal benefits for his second wife, until August 1996, when he notified the Office of Personnel Management that his second wife had died. Thereafter, payments to both parties increased.

In February 1999, respondent married a third time. He again elected survivor benefits for his new wife. Due to changes in federal law, however, respondent was unable to fund even a portion of the election with a lump sum payment. The election was, therefore, funded entirely by the pension annuity, which again resulted in reduced payments to both parties.

In July 2000, the district court denied appellant’s requests that (1) she receive one-half of 30/34ths of the monthly pension benefit without reduction for respondent’s elections of survivor benefits for subsequent spouses; (2) she receive repayment of the lost amounts due to the election of survivor benefits; (3) respondent be required to fund by a lump-sum payment any survivor benefits he chose to elect; and (4) she be awarded attorney fees. The court reasoned that in the 1986 amended decree

the court did not intend to hinder the respondent’s right or ability to make elections in the administration of his pension. * * * [AJppellant is entitled to one-half of 30/34ths of the annuity payment after the respondent has made the elections available to him in the administration of his pension, and after the taxes have been paid.

This appeal followed.

ISSUES

I. Did the trial court err by concluding that appellant shall receive one-half (½) of thirty/thirty-fourths (%) of respondent’s pension payment after elections have been made?

II. Did the trial court abuse its discretion in denying appellant’s request for attorney fees?

ANALYSIS

I.

A trial court is accorded broad discretion in regard to the division of property in dissolution actions. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn.1984). If the determination of the trial court is reasonable and finds an acceptable basis in fact and principle, the reviewing court will, and must, affirm. Bollenbach v. Bollenbach, 285 Minn. 418, 426, 175 N.W.2d 148, 154 (1970). If the trial court’s property distribution is against logic and the facts on record, this court will find an abuse of discretion, and must reverse. Rutten, 347 N.W.2d at 50.

Pension division is generally discretionary with the trial court. Faus v. Faus, 319 N.W.2d 408, 413 (Minn.1982). When dividing retirement benefits, the trial court usually uses one of two methods. DuBois v. DuBois, 335 N.W.2d 503, 505 (Minn.1983). The first, the “present cash value” method, treats the pension as an indivisible asset and awards it, including the right to all future pension benefits, to the employee spouse. In doing so, the value of the pension for property-division purposes is set at its “present value” as of the date on which it is valued. In this context, we stress that “present value” is a term of art with a specific meaning. A “ ‘[pjresent value’ discounts an award [to be received in the future] to that amount which, if presently received, could be invested in order to yield the future sum”; it is the amount “which a person would take now in return for giving up the right to receive an unknown number of monthly checks in the future.” Id. at 506 (alteration in original). Thus, if the “present cash value” method of dividing a pension is used, the pension is awarded to the employee spouse at its “present value” and the non-employee spouse is awarded non-pension property in an amount which, in light of the entire property distribution, is required to achieve the equitable property distribution mandated by Minn.Stat. § 518.58, subd. 1 (2000). Under the second method to divide a pension, the “reserved jurisdiction” method, the trial court divides the marital estate but reserves jurisdiction over the division of the pension until retirement and divides the actual monetary benefit at that time. DuBois, 335 N.W.2d at 505.

Here, neither party disputes that the trial court used the “reserved jurisdiction” method in dividing that portion of respondent’s pension benefits. The amended decree issued in 1986 allocated the pension benefit payments between the parties according to an appropriate formula. But the decree was silent on respondent’s right to elect survivor benefits for subsequent spouses.

Appellant argues that the July 2000 order of the district court was not merely a “clarification,” but, in fact, impermissibly altered a final division of property ordered by the court previously, thereby violating provisions of Minn.Stat. § 518.64, subd. 2(e) (2000). That section provides:

Ail divisions of real and personal property * ⅜ ⅜ shall be final, and may be revoked or modified only where the Court finds the existence of conditions that justify reopening a Judgment under the laws of this State.

(Emphasis added.)

We disagree with appellant’s categorization of the July 2000 order and conclude, instead, that the order appropriately clarifies the 1986 amended decree and represents a proper exercise of discretion.

[WJhile a trial court may not modify a final property division, it may issue orders to implement, enforce, or clarify the provisions of a decree, so long as it does not change the parties’ substantive rights.

Redmond v. Redmond, 594 N.W.2d 272, 275 (Minn.App.1999) (citing Potter v. Potter, 471 N.W.2d 113, 114 (Minn.App.1991)).

The substantive rights of the parties remained unchanged after the July 2000 order. Appellant was entitled to receive one-half of 30/34ths of respondent’s pension benefit each month. The language in the amended decree establishing that right does not restrict respondent’s right to make subsequent pension elections. The amended decree was silent on that issue. While appellant could have requested in 1986 that the district court restrict respondent’s right to elect survivor’s benefits for future spouses, there is no indication in the record that such a request was made.

A trial court’s construction of its own decree is given great weight on appeal. Mikoda v. Mikoda, 413 N.W.2d 238, 242 (Minn.App.1987), review denied (Minn. Dec. 22, 1987). Although three district court judges were involved in this matter through the years, “[T]he fact that the judgment was ordered by a predecessor does not limit action of a successor judge on the motion for clarification.” Id. at 241. The court in July 2000, in effect, noted the silence of the 1986 amended decree regarding future freedom afforded respondent in electing survivor’s benefits for subsequent spouses. The court’s declaration that the amended decree “did not intend to hinder” respondent’s right to make elections is entitled to great deference.

The district court’s July 2000 order clarifying the 1986 amended decree finds support in the federal regulations that address division of federal employee pension benefits pursuant to a marriage dissolution decree. The federal regulations support the proposition that appellant’s share of respondent’s gross annuity pension is to be awarded after reducing the annuity to provide survivor annuity benefits. See 5 C.F.R. §§ 838.103 (2000). The regulations require the court order to state the specific type of annuity to which the former spouse’s share calculation should be applied. 5 C.F.R. §§ 838.306, subd. (a) (2000); see also Pleasant v. Pleasant, 97 Md.App. 711, 632 A.2d 202, 210 (1993). The three types of annuities specified by the regulations are: (1) gross annuity, (2) net annuity, and (3) self-only annuity. The gross annuity is defined as “the amount of monthly annuity payable after reducing the self-only annuity to provide survivor annuity benefits, if any, but before any other deduction.” 5 C.F.R. §§ 838.103. A net annuity is the amount of monthly annuity payable after deducting for health benefits, life insurance, or income tax. See id. The self-only annuity is

the recurring unreduced payments under CSRS [Civil Service Retirement System] or FERS [Federal Employees Retirement System] to a retiree with no survivor annuity payable to anyone.

Id.

The regulations require the federal agency responsible for processing the court order to assume that the pensioner retains the right to elect a survivor annuity absent specific restrictions stating otherwise.

Unless the court order otherwise directs, OPM [Office of Personnel Management] will apply the formula, percentage, or fraction [used to determine the former spouse’s share of the pensioner’s annuity] to gross annuity.

5 C.F.R. § 838.306, subd. (b) (2000). Implicit in the federal regulations is the assumption that the former spouse’s share of the pensioner’s annuity is calculated after reduction for survivor annuity benefits. The regulations leave open the possibility that a state court decree of dissolution or divorce may specifically restrict a pensioner’s right to elect survivor benefits for future spouses or may provide for calculation of the former spouse’s share before reduction for survivor benefits. However, the state court must explicitly direct such a calculation. Here, it did not. There is no evidence in the record that appellant asked for such a direction in the court order, but she clearly could have.

Appellant also relies on the Minnesota Rules of General Practice to argue that respondent, when he remarried, accepted additional support obligations with full knowledge of his prior obligations under the dissolution decree. See Minn. R. Gen. Pract. 303.06(d) (2000) (spouse who remarries after dissolution accepts new obligations “with full knowledge of * * * prior obligations”). Appellant further argues that Walker v. Walker, 553 N.W.2d 90 (Minn.App.1996), is relevant and provides guidance in the present situation.

We find appellant’s reliance on the general practice rule and on Walker to be misplaced. Both the rule and Walker address spousal maintenance obligations, which are not at issue in this case. Appellant’s right to receive spousal maintenance ended on December 31, 1992. Here, respondent did not seek to avoid a maintenance obligation because he had no such obligation Rather, he exercised his right to elect a survivor benefit for a subsequent spouse, thus reducing his share and appellant’s share of each monthly pension benefit. After election of survivor’s benefits, appellant continued to receive each month one-half of 30/34ths of respondent’s pension benefit, consistent with the provisions of the 1986 amended decree.

II.

Finally, appellant seeks review of the trial court’s denial of her request for attorney fees.

Absent an abuse of discretion, this court will not disturb a trial court’s decision denying an award attorney fees. Whalen v. Whalen, 594 N.W.2d 277, 282 (Minn.App.1999). An award of need-based attorney fees is proper when the court finds that (1) the fees are necessary for the good-faith assertion of the party’s rights in the proceeding and will not contribute unnecessarily to the length and expense of the proceeding; (2) the party from whom fees, costs, and disbursements are sought has the means to pay them; and (3) the party to whom fees, costs, and disbursements are awarded does not have the means to pay them. Minn.Stat. § 518.14, subd. 1 (2000); see id.

Consideration of these factors in the present case leads us to conclude that the trial court did not abuse its discretion in denying appellant’s request for fees.

Appellant argues additionally that she should be awarded attorney fees incurred on appeal. Minn. R. Civ.App. P. 139.06 dictates that a party seeking attorney fees on appeal “shall submit such a request by motion under [Minnesota] Rule [of Civil Appellate Practice] 127.” Id. Appellant did not file such a motion. We, therefore, decline to award attorney fees on appeal.

DECISION

The trial court did not err by concluding that appellant should receive one-half (⅛) of thirty/thirty-fourths (¾) of respondent’s pension payment after his election of survivor benefits. The trial court did not abuse its discretion when it denied appellant’s request for attorney fees. No attorney fees are awarded on appeal.

Affirmed.

       Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const, art. VI, § 10.

      . This percentage allocation recognized that respondent had continued his employment after dissolution of the marriage.


source: Caselaw Access Project

author: RANDALL, Judge.

license: Public Domain

text:
    SHAW ACQUISITION COMPANY, d/b/a Stewart Lumber Company, Respondent, v. The BANK OF ELK RIVER, Appellant.
    No. C2-00-1803.
    Court of Appeals of Minnesota.
    May 29, 2001.
    Mark J. Johnson, Lang, Pauly, Greger-son & Rosow, Ltd., U.S. Bank Place, Minneapolis, (for respondent).
    James M. Neilson, Matthew A. Anderson, Babcock, Neilson, Mannella, La-Fleur & Klint, P.L.L.P., Anoka, (for appellant).
    Gerald G. Workinger, Jr., Edina, (for amici curiae Minnesota Bankers Association, Mortgage Bankers Association of Minnesota and Independent Community Bankers of Minnesota).
    Considered and decided by SHUMAKER, Presiding Judge, RANDALL, Judge, and PETERSON, Judge.
   OPINION

RANDALL, Judge.

Appellant challenges the district court’s order granting respondent’s motion for summary judgment. Appellant argues that the district court erred in concluding that appellant’s foreclosure sale produced a surplus after appellant’s first-priority mortgage was satisfied. Appellant claims that its split-priority junior mortgage must be satisfied also before respondent’s second-position mechanic’s lien gets paid. We affirm.

FACTS

On March 5,1998, appellant Bank of Elk River acquired two mortgages, $105,000 each, and two notes from Allied Mortgage on two properties (North and South) Allied sought to develop. Both mortgages were recorded the same day. Allied and appellant did not enter into a construction-loan agreement. Appellant advanced $61,731.41 on the North note and $36,731.41 on the South note between March 5, 1998, and March 23, 1998. On the March 23, the first improvements on the North and South properties were visible.

The district court found respondent Shaw Acquisition Company provided lumber and other building materials to the North property in the amount of $26,432.75 and plans and specifications for the improvement of the South property. No lien waivers were requested or given. On December 24, 1998, respondent filed and recorded a mechanic’s lien against both the North and South properties.

On January 26, 1999, respondent filed a summons and complaint to foreclose its mechanic’s lien. After negotiations, the bank and Stewart Lumber entered into a stipulation, which split the priority of appellant’s mortgages. Appellant had advanced approximately $98,000 before respondent’s mechanic’s lien and an approximate $112,000 (excluding costs and interest) after respondent’s mechanic’s lien. The negotiations between the parties gave appellant first position on its initial $98,000 advances, gave respondent’s mechanic’s lien of $43,253.76 a second-priority position, and gave appellant a third position on its remaining advances. Appellant’s advances prior to March 23, 1998, in the amount of $61,731.41 (plus $134.62 in taxes) for the North property and $36,731.41 (plus $183.90 in taxes) for the South property, received first-priority positions. Appellant’s advances on the mortgage after March 23, 1998, were the third priority.

On March 3, 2000, judgment was entered on the mechanic’s-lien foreclosure. The judgment confirmed the stipulation that split the priority of appellant’s mortgages and gave respondent’s mechanic’s lien second position. This judgment was not appealed.

As part of its argument, both appellant and the amici curiae allege facts that would challenge the mechanic’s lien second-priority position. We quickly conclude that the stipulation between the parties and the resulting judgment, which was not appealed, properly gave respondent’s mechanic’s lien a true second-priority position. The primary issue remains, namely, what steps will respondent have to take to receive a distribution from a foreclosure sale. Appellant chose to foreclose on its mortgages by advertisement. At the foreclosure sale on March 23, 2000, appellant bid approximately $245,000 for both parcels. That figure represented the total amount of its first and third-priority mortgages plus all costs and accrued interest. Appellant then sent respondent two letters (one for the North property and one for the South property) on April 4, 2000, informing it that it had until May 23, 2000, to redeem from its second-priority position. The letters noted that respondent could redeem by paying just the first-priority positions amount (approximately $99,000 plus costs).

On April 12, 2000, appellant filed notices of intent to redeem from its third-priority positions (in the event that respondent redeemed from its second-priority position). Respondent then filed a summons and complaint alleging that appellant improperly withheld a surplus from the foreclosure. Respondent defined the surplus as the amount remaining out of appellant’s bid of $245,000 after appellant’s first position of approximately $99,000 was satisfied. The district court granted respondent’s summary-judgment motion concluding the foreclosure produced a surplus after satisfying the first-priority parts of the mortgages. It awarded respondent judgment in the full amount of its second-priority mechanic’s lien. This appeal followed.

ISSUE

Should the proceeds from a foreclosure sale in excess of the amount necessary to satisfy a part of a mortgage with seniority be distributed to valid intervening lienors according to their priority without requiring the junior lienor to redeem? With a split-priority mortgage, when is the most junior portion entitled to distribution when there is a valid intervening lien?

ANALYSIS

When the district court grants summary judgment based on the application of a statute to undisputed facts, the result is a legal conclusion reviewed de novo by the appellate court. Lefto v. Hoggsbreath Enters., Inc., 581 N.W.2d 855, 856 (Minn.1998). The district court determined that there were excess proceeds after appellant’s first-priority parts of the mortgages were satisfied and determined that the excess should be used to extinguish respondent’s second-priority lien prior to application of the proceeds to appellant’s remaining parts of the mortgages in third priority. Appellant argues that under Minn.Stat. § 580.10 (2000), a surplus exists only if the mortgage has been satisfied. Appellant defines its multiple advances, which resulted in both a first and a third position, as “a mortgage.” Appellant cites the statute, which states:

In all cases not provided for in section 580.09, if, after sale of any real estate, made as herein prescribed, there remains in the hands of the officer making the sale any surplus money, after satisfying the mortgage, with interest, taxes paid, and costs of sale, the surplus shall be paid over by such officer, on demand, to the mortgagor, the mortgagor’s legal representatives or assigns.

Id. (emphasis added). We do not dispute the plain language of the statute. We simply note that the words of the statute, when drafted, impliedly understand the word “mortgage” to be a simple undivided mortgage, and appellant concedes that. With that understanding, the statute and respondent’s legal argument, and the stipulation and judgment between the parties for a split priority for appellant falls into place.

That statute does not describe split mortgages. Minnesota’s “race-notice” statute, which has stood for decades and is understood by all lenders and their attorneys, contemplates such a situation. See Axel Newman Heating & Plumbing Co. v. Sauers, 234 Minn. 140, 145, 47 N.W.2d 769, 772 (1951) (holding where advances on a mortgage are optional, subsequent encumbrance takes priority over advances made after mortgagee receives actual notice of subsequent encumbrance). Appellant argued consistently that its first and third positions, to which appellant stipulated, are not separate mortgages, but are single mortgages with split priorities. In a race-notice state, it is a distinction without a difference. Under appellant’s theory, a lender with a first position could then, with impunity, lend money, after five valid intervening liens, take a seventh, eighth, ninth, etc. position, and even if that lender forecloses by advertisement (not by action so as to get a judicial lien), all it would have to do is bid in the cumulative total of its several mortgages, ignore the five valid intervening liens senior to every mortgage except the first, and require all senior-intervening liens to redeem the first.

Appellant contends that those with valid intervening liens should invoke their right to redemption. Here, respondent had the chance to redeem, but it chose not to. Appellant implies that because redemption was available, respondent was required to avail itself of that option. There is no authority that requires a junior lienor to exercise its option to redeem. The right to redeem is separate from the right to recover excess proceeds from a foreclosure sale. If respondent wanted to exercise the option and move its priority position up, it had that choice, but we conclude it was not required, to exercise that option. Rather than invest money into questionable property by redeeming to “move up,” a junior lienor may decide to do nothing and see what the foreclosure bids amount to. Appellant continues to insist that no surplus exists until all parts of the mortgages, first and third priority, etc. (even with split priorities, as here) positions are satisfied claiming that the amount received at a foreclosure must satisfy the entire debt under Minn.Stat. § 580.225 (2000) (stating “amount received from foreclosure sale * * * is full satisfaction of the mortgage debt”). Appellant argues that the term “mortgage debt” includes any and all split-priority mortgages, regardless of the number of valid intervening liens. Appellant argues that if it were to bid only the amount of its first priorities, its third-priority positions would no longer exist because those third-priority positions would be extinguished pursuant to Minn. Stat. § 580.225.

This case does not turn, as appellant claims, on the technical meaning of surplus. As we noted earlier, appellant conceded the statute contemplated the old-fashioned, indivisible, first-position mortgage. The amount of money appellant bid over the amount of its first position was simply a $245,000 bid for two pieces of property. The properties had first-position mortgages of approximately $99,000 (appellant’s), respondent’s second-position lien of approximately $43,000, and then appellant’s third-position mortgages of approximately $112,000 (plus other junior liens not at issue). As respondent argues, appellant as high bidder got the property for $245,000 subject to its own first lien, and next, respondent’s.

Both appellant and amici curiae assert that affirming the district court will result in dire consequences. They assert that banks will be reluctant to lend money on construction projects for fear that their mortgage-money advances (liens) will slip down the ladder of priorities and, thus, recovery of the lender’s principal and interest may be in jeopardy. We can only state that while that might be considered a penalty, there is a simple cure.

It is well settled in this state that a mortgage given to secure future advances, which advances are in fact later made, has priority over mechanics’ liens attaching after the mortgage is given, but before the advances are made, where the making of the advances was obligatory upon the mortgagee under the terms of this contract with the mortgagor.

Erickson v. Ireland, 134 Minn. 156, 158, 158 N.W. 918, 919 (1916) (emphasis added). But if the advances are optional, as is conceded here, because there is no construction agreement setting out obligatory advances, intervening mechanic’s liens have priority. Model Home Bldg., Inc. v. Turnquist, 258 Minn. 53, 56, 102 N.W.2d 717, 719 (1960). Appellant’s failure to have a construction-loan agreement in place that set out obligatory advances resulted in respondent legally obtaining a second-priority position for its mechanic’s lien.

It is rare for a bank to accept a mortgage on a site under construction without entering into a construction-loan agreement. Appellant did just that. The Minnesota Supreme Court outlined the cure. Appellant and amici curiae need only write the proper construction loan agreement. The cure here, to draw up a construction-loan agreement, that will save all advances made after legitimate workmen have improved the lot and filed legitimate mechanics’ liens, is no more difficult than writing and recording a standard first-position purchase-money mortgage.

Finally, both sides spent a considerable amount of time arguing for and against R.B. Thompson v. Rothschild Financial Corp., 1991 WL 222436 (Minn.App.1991), an unpublished decision of this court. We initially note that unpublished opinions of this court are of limited value in deciding an appeal. See Minn.Stat. § 480.08, subd. 3(c) (2000) (“[ujnpublished opinions of the court of appeals are not precedential ”) (emphasis added); Dynamic Air, Inc. v. Bloch, 502 N.W.2d 796, 801 (Minn.App.1993) (stating dangers of mis-citation and unfairness associated with use of unpublished opinions and that while persuasive, “[t]he legislature has unequivocally provided that unpublished opinions are not prec-edential”). Moreover, our decision today does not rest on Rothschild. An examination of Rothschild shows that its fact situation was sui generis. Appellant and the amici curiae are correct in noting that the facts surrounding Rothschild are unique. For instance, the mechanic’s-lien foreclosure action in Rothschild did not occur until years after the original mortgage-foreclosure sale on the property. In addition, the district court determined that there was a surplus from the original foreclosure at the mechanic’s-lien foreclosure action. That determination of a surplus was not appealed. Finally, we also note that the initial foreclosure action occurred in 1984, but the appeal did not reach this court until 1991. Rothschild simply rests on the facts of its case.

DECISION

The district court properly granted respondent’s motion for summary judgment and properly ordered that proceeds from the foreclosure sales in excess of appellant’s first-priority mortgages be distributed to satisfy respondent’s second-priority mechanic’s lien.

Affirmed.


author: STONEBURNER, Judge ROBERT H. SCHUMACHER, Judge

text:
    D.M.S., Appellant, v. Kennedy BARBER, Defendant, The Professional Association of Treatment Homes (PATH), a non-profit Minnesota Corporation, Respondent.
    No. C8-00-2227.
    Court of Appeals of Minnesota.
    June 5, 2001.

      Patrick T. Tierney, Thomas E. MeEllis-trem, Collins, Buckley, Sauntry & Haugh, P.L.L.P., St. Paul (for appellant).
    Jodeen A. Kozlak, Jeanette M. Bazis, Greene Espel, P.L.L.P., Minneapolis (for respondent).
    Considered and decided by STONEBURNER, Presiding Judge, KALITOWSKI and SCHUMACHER, Judges.
   OPINION

STONEBURNER, Judge

Appellant D.M.S. argues that the district court erred by dismissing his claims against respondent Professional Association of Treatment Homes (PATH) for injury from sexual abuse that occurred while he was in foster care, as time-barred. Because at the time appellant sued PATH, the statute of limitations had run on his negligence and respondeat superior claims against PATH, we affirm.

FACTS

D.M.S. was born on September 10, 1979. In the late summer of 1992, D.M.S. was placed, through PATH, in the foster home of defendant Kennedy Barber. Barber repeatedly sexually abused D.M.S. and others placed in his care. At least three other persons have pursued legal actions against Barber and PATH for the abuse. D.M.S. reported the sexual abuse to his mother, who reported the abuse to a PATH representative on February 22, 1993. PATH removed D.M.S. from Barber’s home on that day and after that date D.M.S. was not placed by PATH. D.M.S. had additional voluntary contact with Barber, however, and in early 1994, experienced additional abuse in Barber’s car and in Barber’s home, which was still a PATH foster home at that time.

D.M.S. brought this action against Barber and PATH, alleging injury for the sexual abuse under negligence and respon-deat superior claims, but did not perfect service on PATH until June 8, 1999. PATH moved for summary judgment arguing that the negligence-based claims were barred by the six-year statute of limitations set forth in Minn.Stat. § 541.073 (1992) and that the respondeat superior claims were barred by the two-year statute of limitations for battery claims set forth in Minn.Stat. § 541.07(1) (1992). The district court granted summary judgment in favor of PATH, and D.M.S. appeals.

ISSUE

Did the district court err in holding that the applicable statutes of limitation barred D.M.S.’s claims against PATH?

ANALYSIS

On appeal from summary judgment, this court determines whether there are any genuine issues of material fact and whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). This court must view the evidence “in the light most favorable to the party against whom judgment was granted.” Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993) (citation omitted). When the district court grants summary judgment based on the application of a statute to undisputed facts, the result is a legal conclusion reviewed de novo by the appellate court. Lefto v. Hoggsbreath Enters., Inc., 581 N.W.2d 855, 856 (Minn.1998). The applicability of a statute of limitations is a question of law reviewed de novo. Benigni v. County of St. Louis, 585 N.W.2d 51, 54 (Minn.1998).

1. Statute of limitations for negligence-based claims

Minn.Stat. § 541.073, subd. 2 (1992) provides:

(a)An action for damages based on personal injury caused by sexual abuse must be commenced within six years of the time the plaintiff knew or had reason to know that the injury was caused by the sexual abuse.
(b) The plaintiff need not establish which act in a continuous series of sexual abuse acts by the defendant caused the injury.
(c) The knowledge of a parent or guardian may not be imputed to a minor.
(d) This section does not affect the suspension of the statute of limitations during a period of disability under section 541.15.

A number of disabilities, including infancy, suspend the running of the period of limitation until the disability is removed, “provided that such period, except in the case of infancy, shall not be extended for more than five years, nor in any case for more than one year after the disability ceases.” Minn.Stat. § 541.15(a) (1992).

D.M.S. argues that Minnesota law is well established that he had until age 25 to bring his negligence action for injury based on sexual abuse, relying on W.J.L. v. Bugge, 573 N.W.2d 677 (Minn.1998) and Bertram v. Poole, 597 N.W.2d 309 (Minn.App.1999), review denied (Minn. Sept. 28, 1999). As in this case, W.J.L. and Bertram involve an interpretation of the six-year statute of limitations for sexual abuse actions together with the statute tolling the statute of limitations for infancy, but this case is distinguishable on its facts.

In W.J.L., a 36-year-old woman brought an action against a former teacher for a sexual relationship that began when W.J.L. was 16 years old and ended about two years later. 573 N.W.2d at 679. W.J.L. alleged that after the sexual contact with Bugge ended, she did not think about or talk to anyone about Bugge’s conduct until 1992, when a book she read triggered her thoughts that she had been sexually abused by Bugge. Id. The issue was whether W.J.L. knew or had reason to know more than six years prior to bringing her lawsuit that the alleged abuse had occurred. Id at 680.

“[A]s a matter of law one is ‘injured’ if one is sexually abused.” Id at 681 (quoting Blackowiak v. Kemp, 546 N.W.2d 1, (Minn.1996)). The victim is immediately put on notice of the causal connection between the abuse and the injury so that the statute of limitations begins to run once a victim is abused, unless there is some legal disability such as infancy, that would make a reasonable person incapable of recognizing or understanding that abuse had occurred. Id W.J.L. argued that Blackowiak was wrongly decided. Id W.J.L. contended that she did not recognize, at the time of the abuse, that she had been emotionally injured and “that she was incapable of understanding the nature of the sexual abuse, the extent of her injuries, and the connection between the two until 1992.” Id at 682. The supreme court rejected that argument and held, as in Blackowiak, that W.J.L. had not demonstrated any legal or mental disabilities after infancy preventing her from recognizing or understanding that she had been sexually abused. Id The supreme court treated W.J.L.’s entire infancy as a disability that made her incapable of recognizing or understanding that she had be abused, however, and stated:

Here, absent a disability which serves to delay the running of the statute of limitations, the limitations period under the delayed discovery statute would have begun to run one year after W.J.L. reached the age of majority and expired when she turned 25. W.J.L. does not allege any disability which would have prevented her from pursuing her sexual abuse claims against Bugge within six years of the time she turned 19 years of age.

Id (citation omitted). Because W.J.L. had not brought her action within that time period, the action was time-barred. Id

Bertram involved sisters who claimed to have repressed memories of childhood abuse. 597 N.W.2d at 311. Although this court found that there was a material question of fact about whether the disability of repressed memories existed in addition to the infancy disability, this court nonetheless relied on W.J.L. as establishing an outside limit on such claims. Id at 314. We held that one victim’s claims were not barred because they were brought before she reached the age of 25 and that the other victim’s claims were barred because they were brought after she reached the age of 25. Id

The facts of this case are distinguishable. Here, it is undisputed that D.M.S. knew of the sexual abuse and injury in 1993. D.M.S. does not claim lack of understanding due to infancy or repressed memory. The cause of action against PATH accrued on February 22, 1993 when D.M.S. knew of the abuse, and the tolling of the statute of limitations for the disability of infancy ended one year after he reached age 19. Because the six-year statute of limitations did not expire until after D.M.S.’s 19th birthday, D.M.S. had until February 22, 1999, six years after he knew the abuse occurred, to bring his action.

This ease is almost identical to J.J. v. Luckow, 578 N.W.2d 17 (Minn.App.1998), review denied (Minn. July 16, 1998). J.J. was aware that Luckow’s conduct, which started several years before J.J. was 18, was improper before the abuse ended on August 24, 1989. Id at 18, 20. J.J. did not bring his lawsuit until more than six years after the abuse ended, when he was 24 years old. Id at 19. This court held that the action was barred by the statute of limitations and that J.J. could not take advantage of language in W.J.L., which he asserted, gave him until age 25 to sue. Id. at 21. As in this case, J.J.’s infancy disability provided him no advantage, because his limitation period was shorter under the one-year infancy rule than under the six-year statute of limitations. Id. at 20.

In this case, as in J.J., the abuse was recognized and acknowledged during infancy. D.M.S. does not argue that infancy made him incapable of understanding the abuse, and therefore he is not entitled to. the presumption extended in W.J.L. and in Bertram that the abuse could not reasonably have been discovered during infancy. There is no dispute about when the abuse was known for purposes of triggering the statute of limitations in this case. D.M.S. is in the same situation as all other plaintiffs whose causes of action accrue in infancy. The running of the period of limitations is suspended for not more than one year after the disability ceases. See Id. at 20-21 (citing numerous cases involving actions that accrued in infancy holding that the suspension of the period of limitations is in no case for more than one year after the disability ceases). D.M.S. had six years from the date he knew of the abuse, which was later than one year from the end of his infancy disability, to bring his action against PATH. The district court did not err by granting summary judgment to PATH on the negligence claims.

2. Doctrine of continuous violations

The district court found that the statute of limitations began to run in this action on February 22, 1993, the undisputed date on which D.M.S. was aware of the abuse and was removed from Barber’s home and from PATH’S supervision. D.M.S. argues that under the continuous-violation doctrine, the statute should begin to run from the date of the last abuse in early 1994. We disagree.

The district court correctly concluded that after February 22, 1993, PATH had no duty to protect D.M.S. Under Minnesota law, there is no duty to protect another from the criminal acts of others unless a “special relationship” exists between the parties. H.B. v. Whittemore, 552 N.W.2d 705, 707 (Minn.1996). PATH did not maintain a “special relationship” with D.M.S. after he was removed from the PATH home. See, e.g., Donaldson v. Young Women’s Christian Ass’n, 539 N.W.2d 789, 792 (Minn.1995) (finding no “special relationship” existed where relationship lacked the degree of dependence and control necessary). D.M.S. was no longer in PATH’S custody after February 22, 1993, and PATH exercised no control over D.M.S.’s welfare. The district court did not err by concluding that PATH had no duty to protect D.M.S. after he left PATH’S care in 1993 and that the later acts of Barber cannot be used as the date from which the six-year statute of limitations began to run as to D.M.S.’s claims against PATH.

3. Statute of limitations on respondeat superior claim

The district court granted summary judgment to PATH on D.M.S.’s re-spondeat superior claims based on the two-year statute of limitations for intentional torts contained in Minn.Stat. § 541.07(1) (1992). The parties agree that the statute of limitations for respondeat superior claims is the same as that for the underlying cause of action. See Kaiser v. Mem’l Blood Ctr. of Minneapolis, Inc., 486 N.W.2d 762, 767 (Minn.1992). This court has previously held that when respondeat superior claims are based on intentional torts, the two-year statute of limitations applies rather than the six-year statute of limitations found in Minn.Stat. § 541.073. See Oelschlager v. Magnuson, 528 N.W.2d 895, 902 (Minn.App.1995), review denied (Minn. April 27, 1995). The district court did not err in ruling that the respondeat superior claim was barred by the two-year statute of limitations for Barber’s intentional torts.

DECISION

D.M.S.’s negligence claim against PATH based on injury from sexual abuse is barred by the six-year statute of limitations where D.M.S. did not allege that infancy or any other disability prevented him from recognizing that he had been abused in 1993, and the six-year statute of limitations expired after his 19th birthday and before he started his lawsuit. D.M.S.’s claims against PATH based on respondeat superior are barred by the two-year statute of limitations.

Affirmed.

ROBERT H. SCHUMACHER, Judge

(dissenting).

I respectfully dissent. At issue is how to apply the six-year statute of limitations provision of Minn.Stat. § 541.073, subd. 2 (2000), in conjunction with the disability suspension provision of Minn.Stat. § 541.15 (2000). In W.J.L. v. Bugge, 573 N.W.2d 677 (Minn.1998), the supreme court noted that under these provisions the limitations period begins to run one year after the victim reaches the age of majority and expires at 25 years of age. Id. at 682. In Bertram v. Poole, 597 N.W.2d 309 (Minn.App.1999), review denied (Minn. Sept. 28, 1999), we followed the supreme court and held that the proper limitation period extends to the age of 25. “Absent any other disability, the statute of limitations for sexual abuse in an infancy situation absolutely tolls when the victim reaches the age of 25.” Id. at 313-14. Here, when the action was commenced on June 8, 1999, D.M.S. was 19 years of age, well within the limitations period as articulated in Bertram. I would follow Bertram and reverse.

Regarding the continuing violations doctrine, the statute specifically provides that a plaintiff need not establish which act in a continuous series of sexual abuse acts by the defendant caused the injury. Minn. Stat. § 541.073, subd. 2(b). The district court ruled that there was no evidence that PATH maintained a “special relationship” towards D.M.S. after the February 22, 1993 removal from the PATH home. See, e.g., Donaldson v. Young Women’s Christian Ass’n of Duluth, 539 N.W.2d 789, 792 (Minn.1995) (“special relationship” imposing duty is found where plaintiff is particularly vulnerable and dependent on defendant and defendant holds considerable power over plaintiffs welfare). But D.M.S.’s proffered evidence shows continuous sexual abuse in the PATH home into 1994. Accordingly, the district court erred by fixing the February 22, 1993 removal date as the date of abuse for the statute of limitations period. I would reverse. PATH had a general duty to prevent future abuse to D.M.S. at the PATH home.


author: MARING, Justice.

text:
    2001 ND 102
    Marvin R. REMMICK, Plaintiff and Appellant v. Jeffrey J. WHITMAN, Defendant and Appellee and All other persons unknown who have or claim an interest in the property described in the Complaint, Defendants.
    No. 20000364.
    Supreme Court of North Dakota.
    May 24, 2001.
    Malcolm H. Brown, Malcolm H. Brown, P.C., Bismarck, for plaintiff and appellant.

      Timothy D. Lervick, Rolfson Schulz Ler-vick & Geiermann Law Offices, P.C., Bismarck, for defendant and appellee.
   MARING, Justice.

[¶ 1] Marvin Remmick appeals from a summary judgment quieting title in mineral interests in Jeffrey Whitman. We hold Whitman’s recorded mineral deed was not affected by a subsequent action to foreclose a mortgage on the real property because he was not a named party in the foreclosure action. We affirm.

[¶2] James and Cheryl Whitman owned real property in Kidder County. In 1978 and 1981, they mortgaged the real property to the United States. In 1992, the Whitmans executed a mineral deed for the property to their son, Jeffrey Whitman, and he recorded that deed in May 1992. In 1994, the United States sued James and Cheryl Whitman in federal court to foreclose the mortgage. The United States did not name Jeffrey Whitman as a party in that action. A judgment was entered in the foreclosure action. Remmick thereafter purchased the property at a marshal’s sale, and he was issued a marshal’s deed.

[¶ 3] Remmick brought this quiet title action against Jeffrey Whitman. Whitman admitted Remmick had a surface interest in the real property, but Whitman alleged he owned the mineral interests. Whitman moved for summary judgment. The trial court granted summary judgment, quieting title in the mineral interests in Whitman. The court concluded, under Yttredahl v. Federal Farm Mortgage Corp., 104 N.W.2d 705 (N.D.1960), Whitman’s mineral interests were not terminated by the United States’ foreclosure action. Remmick appealed.

[¶ 4] Remmick argues Jeffrey Whitman’s actual knowledge of the United States’ foreclosure action and sale of the land renders our decision in Yttredahl inapplicable, and there are factual issues regarding Whitman’s knowledge. Rem-mick claims he did not have sufficient time for adequate discovery before the court granted summary judgment, and he therefore was precluded from showing Whitman had actual knowledge of the foreclosure proceeding. Whitman responds his knowledge of the foreclosure proceeding is immaterial under Yttredahl and North Dakota law, and Remmick did not ask the court for a continuance for further discovery under N.D.R.Civ.P. 56(f).

[¶ 5] Summary judgment is a procedural device for the prompt and expeditious disposition of a controversy without a trial if either party is entitled to judgment as a matter of law, and if there is no genuine issue of material fact or if the law is such that resolution of any factual disputes will not alter the result. Dahlberg v. Lutheran Soc. Servs., 625 N.W.2d 241, 2001 ND 73, ¶ 11.

[¶ 6] In Yttredahl, 104 N.W.2d at 707, this Court said:

The rights of a purchaser of the mortgaged premises, or purchaser of a part of the mortgaged premises, who acquired title after the execution of the mortgage but before commencement of the foreclosure action, are not concluded by the judgment or decree in foreclosure proceedings to which he was not made a party. 59 C.J.S. Mortgages § 704, p. 1284; 37 Am.Jur. p. 46; and Tiffany Law of Real Property, 3rd Edition sec. 1534.
Foreclosure of the mortgage by Federal Farm Mortgage Corporation, without naming as parties in such foreclosure action, the owners and holders of royalty interests, did not eliminate the royalty interests of the defendants who are the appellants herein; and the Sheriffs Deeds that were issued and delivered to Federal Farm Mortgage Corporation pursuant to said foreclosure, did not convey and transfer to Federal Farm Mortgage Corporation, the royalty interests of the defendants who are the appellants herein.
When Federal Farm Mortgage Corporation made conveyance to the Yttre-dahls by a Limited Warranty Deed, on November 26, 1943, it did not and could not convey to the Yttredahls, the royalty interests of the defendants who are the appellants herein, for the reason that Federal Farm Mortgage Corporation had, at that time, no right, title or interest, in or to said royalty interests.

[¶ 7] On a petition for rehearing, we said:

If a mortgagee wishes to subject such a grantee’s interest to the mortgage lien he must join the grantee as a party in an action to foreclose the mortgage. If he fails to do so the grantee’s interest is not affected in any way. A sale made pursuant to a special execution issued upon a judgment for foreclosure, sells only the interests of the persons who were parties to the action. A grantee of record who was not made a party to the action retains more than an equity of redemption, he retains his title to the granted interest unimpaired, subject to the lien of the mortgage to the extent that such lien has not been satisfied by the foreclosure sale. Goodenow v. Ewer, 16 Cal. 461, 76 Am.Dec. 540; Berlack v. Halle, 22 Fla. 236, 1 Am.St.Rep. 185; Annotation: 1 Am.St.Rep. [at] 189.
In the instant case, the grantees of perpetual nonparticipating royalties were not made parties to the action to foreclose. Their titles to the royalties were therefore unaffected by the foreclosure and that fact appeared upon the face of the record. The possession of the surface estate by the purchaser of their grantor’s interest at foreclosure sale was no more adverse to them than continued possession by their grantor. In fact if the owners of the royalty interests had known of the foreclosure, they might well have concluded that the mortgagee considered that the mortgagor’s remaining interest in the property was sufficient to satisfy the mortgage and that therefore he was proceeding against that interest alone.

Yttredahl, 104 N.W.2d at 709-710.

[¶ 8] Whitman’s mineral deed was recorded before the United States’ foreclosure action, and he was not a named party in that proceeding. Under Yttredahl, Whitman’s interest in the land is unaffected by the United States’ subsequent foreclosure action, regardless of his actual knowledge of the action. Resolution of the actual knowledge issue will not alter the result in this quiet title action, and we therefore conclude the trial court did not err in granting Whitman summary judgment.

[¶ 9] We affirm the summary judgment.

[¶ 10] VANDE WALLE, C.J., NEUMANN, KAPSNER, and ALLAN L. SCHMALENBERGER, District Judge, concur.

[¶ 11] The Honorable ALLAN L. SCHMALENBERGER, D.J., sitting in place of SANDSTROM, J., disqualified.

      . Remmick has not argued the United States was not required to name Jeffrey Whitman as a party to the foreclosure action.


text:
    2001 ND 101
    TRIPLE QUEST, INC., Plaintiff and Appellant v. CLEVELAND GEAR COMPANY, INC., Defendant and Appellee.
    No. 20000281.
    Supreme Court of North Dakota.
    May 24, 2001.

      Gordon Henry Hansmeier, Rajkowski Hansmeier Ltd., St. Cloud, MN, for defendant and appellee.
    Sidney J. Spaeth, Vogel, Weir, Hunke & McCormick, Ltd., Fargo, for appellant.
    Monte L. Rogneby (on brief), Vogel Law Firm, Bismarck, for appellant.
   MARING, Justice.

[¶ 1] Fun Flight, LLC (“Fun Flight”), as the successor in interest to the claims of Triple Quest, Inc. (“Triple Quest”), appealed from an order dismissing, without prejudice, its damage action against Cleveland Gear Company, Inc. (“Cleveland Gear”). We conclude the order dismissing the action without prejudice based on a contractual forum selection clause is appealable and Fun Flight has standing to pursue the appeal. We further hold the trial court erred in ruling the forum selection clause, as a matter of law, granted exclusive jurisdiction over this action to the courts of Ohio and in ruling, as a matter of law, Cleveland Gear did not waive its right to rely on the forum selection clause. We reverse and remand for further proceedings.

I

[¶ 2] In August 1997, Triple Quest sued Cleveland Gear, an Ohio corporation, in Cass County district court seeking damages for defective gear boxes it had purchased from the company. In its answer, Cleveland Gear asserted various defenses under the' parties’ contract, including an alleged agreement between the parties to litigate contract claims under Ohio law and to venue the action in Cuyahoga County, Ohio. Cleveland Gear also counterclaimed for money due and owing under the contract.

[¶ 3] After conducting discovery, Cleveland Gear moved in May 1999 for partial summary judgment, arguing Ohio law governed the claims between the parties under the contract and Triple Quest’s damages should be limited to the amount it paid Cleveland Gear for the gear boxes. Cleveland Gear did not argue at that time a forum selection clause located in the same paragraph as the choice-of-law clause mandated litigation of the case in Ohio. The trial court denied Cleveland Gear’s request to limit damages, but ruled Ohio law would govern the dispute between the parties.

[¶ 4] In May 2000, Ralph Thomas, a creditor of Triple Quest, purchased all of Triple Quest’s assets at a sheriffs sale. Thomas subsequently assigned his interest in the assets to Fun Flight. Cleveland Gear moved to compel production of documents concerning the sale of Triple Quest’s assets. At the hearing on the motion, Fun Flight argued it was a successor in interest to Triple Quest’s right of recovery under the suit, but could not be hable for any judgment on Cleveland Gear’s counterclaim. The court granted Cleveland Gear's motion to compel production of documents, but did not rule on Fun Flight’s role in the action.

[¶ 5] At the trial court’s suggestion, Cleveland Gear moved to dismiss the action without prejudice so the parties’ agreement “to venue this matter in [Cuya-hoga] County, Ohio” could be enforced. Fun Flight argued the forum selection clause was not exclusive and, alternatively, that Cleveland Gear had waived reliance on the clause by raising affirmative claims in North Dakota court and litigating the action here for three years. The trial court dismissed the action without prejudice, ruling that, under the parties’ contract “the proper venue for this case and the jurisdiction for it is in the state of Ohio,” and Cleveland Gear had not waived reliance on the forum selection clause. The court did not rule on Fun Flight’s motion to substitute parties and to amend the caption of the case. Fun Flight appealed.

II

[¶ 6] Cleveland Gear argues the trial court’s order is not appealable- because it dismisses the action without prejudice.

[¶ 7] We explained the general rule in State v. Gwyther, 1999 ND 15, ¶ 10, 589 N.W.2d 575:

In civil cases it is well-settled that an order dismissing the complaint without prejudice is not appealable. See, e.g., Kouba v. FEBCO, Inc., 1998 ND 171, ¶ 4, 583 N.W.2d 810; Community Homes of Bismarck v. Clooten, 508 N.W.2d 364, 365 (N.D.1993). Those holdings are based upon the civil appeals statute, N.D.C.C. § 28-27-02. This Court has noted that, because either side may commence another action after a civil complaint is dismissed without prejudice, the order dismissing the action neither “determines the action” nor “prevents a judgment from which an appeal might be taken,” as required under N.D.C.C. § 28-27-02(1). Clooten, 508 N.W.2d at 365; Runck v. Brakke, 421 N.W.2d 487, 488 (N.D.1988).

[¶8] Although we have held that an order granting a motion for change of venue within the state requires a N.D.R.Civ.P. 54(b) certification to invoke our interlocutory appellate jurisdiction, see, e.g., Copenhaver v. Geier, 508 N.W.2d 877 (N.D.1993), this Court has not addressed whether an order dismissing an action without prejudice on the ground that jurisdiction or venue is proper in another state is an appealable order. Courts have held, however, that dismissal of an action to enforce a forum selection clause directing litigation be conducted in another jurisdiction is an appealable order, even though it is not on the merits and is without prejudice. See, e.g., Autoridad de Energía Eléctrica de Puerto Rico v. Ericsson, Inc., 201 F.3d 15, 17-18 (1st Cir.2000); Florida Polk County v. Prison Health Services, Inc., 170 F.3d 1081, 1083 (11th Cir.1999); Milk ‘N’ More, Inc. v. Beavert, 963 F.2d 1342, 1345 (10th Cir.1992); Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 277-78 (9th Cir.1984); Whelan Security Co., Inc. v. Allen, 26 S.W.3d 592, 595 (Mo.App.2000). Those courts reason a trial court’s dismissal without prejudice has the practical effect of terminating the litigation in the plaintiffs chosen forum, and is therefore final in the sense that it terminates the controversy in either the state or federal court in which the action was brought.

[¶ 9] In Pelleport, 741 F.2d at 277, the court considered whether an order enforcing a forum selection clause, resulting in the action being transferred from federal to state court, was appealable as a “collaterally final” order under federal law. To constitute a collaterally final order under 28 U.S.C. § 1291, “ ‘the order must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment.’ ” Pelleport, 741 F.2d at 278 (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978)). The court ruled the' order was appealable, reasoning:

The district court’s order meets all three criteria. The order conclusively determines enforceability of the clause, an issue completely separate from the merits of Pelleport’s breach of contract claim. The order is otherwise unreviewable, because it puts the parties out of federal court, and the district court’s decision would be res judicata in the state court.

Pelleport, 741 F.2d at 278.

[¶ 10] The same reasoning applies here. The trial court’s order has the practical effect of “determining] the action” under N.D.C.C. § 28-27-02(1), because it terminates the action in North Dakota by permanently putting the parties out of any North Dakota district court. See generally N.D. Const, art. VI, §§ 1 and 8 (referring to a single “district court” under the unified judicial system). Interpretation of the forum selection clause is an issue completely separate from the merits of Triple Quest’s claims for breach of contract. The order dismissing the action without prejudice to be refiled only in Ohio also “prevents a judgment from which an appeal might be taken” under N.D.C.C. § 28-27-02(1), because there is no action remaining in this state, the same action could not. be brought in this state, and the trial court’s decision would be res judicata in an Ohio court. See generally Minex Resources, Inc. v. Morland, 518 N.W.2d 682, 687 (N.D.1994) (holding res judicata prohibits relitigation of claims raised in prior action between same parties or their privies which were resolved by final judgment in a court of competent jurisdiction).

[¶ 11] We conclude the trial court’s order in this case is appealable.

Ill

[¶ 12] Cleveland Gear argues Fun Flight has no standing to pursue this appeal.

[¶ 13] A party is entitled to have a court decide the merits of a dispute only after demonstrating standing to litigate the issues placed before the court. North Dakota Council of School Administrators v. Sinner, 458 N.W.2d 280, 282 (N.D.1990). To be entitled to appeal a district court order to this Court, the party must be aggrieved by the order by having some legal interest that may be enlarged or diminished by the order. Bernhardt v. Rummel, 319 N.W.2d 159, 160 (N.D.1982). A contractual assignment of rights may confer standing to pursue an appeal. See Rebel v. Nodak Mutual Ins. Co., 1998 ND 194, ¶10, 585 N.W.2d 811. Here, Fun Flight received an assignment of Triple Quest’s interests from the purchaser of Triple Quest’s assets. Cleveland Gear nevertheless argues Fun Flight has no standing because Fun Fhght has not been joined or substituted as a party to this action.

[¶ 14] When an interest is transferred during an action, N.D.R.Civ.P. 25(c) provides “the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party.” Fun Fhght moved to be substituted as a party, but the trial court dismissed the action without ruling on the motion. Even if the trial court’s failure to rule constitutes a denial of the motion, the trial court did not err and Fun Fhght nevertheless has standing to pursue this appeal.

[¶ 15] In North Dakota Mineral Interests, Inc. v. Berger, 509 N.W.2d 251, 254 (N.D.1993), the plaintiff argued the trial court erred in allowing the defendant 'to maintain his claim to a hen after the defendant assigned his interest to a third party. This Court found meritless the plaintiffs argument that, because the trial court did not join the third party in the action, the trial court should not have allowed the case to continue because the third party, and not the defendant, had become the real party in interest.

This hen assignment occurred about five months after the action began. Although N.D.R.Civ.P. 17, requiring that an action be brought in the name of the real party in interest, controls when an interest has been transferred before the suit is begun, N.D.R.Civ.P. 25(c) controls when an interest is transferred during the action. 7C Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure:

Civil 2d, § 1958 ... One treatise explains:

The most significant feature of Rule 25(c) is that it does not require that anything be done after an interest has been transferred. The action may be continued by or against the original party, and the judgment will be binding on his successor in interest even though he is not named. An order of joinder is merely a discretionary determination by the trial court that the transferee’s presence would facilitate the conduct of the litigation.
... Since the matter is discretionary [the court] may refuse substitution if this seems the wisest course.
7C Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure: Civil 2d, § 1958, at pp. 555, 557, 560 [footnotes omitted]. Even if [the plaintiff] had proceeded under N.D.R.Civ.P. 25(c), we could not say the trial court abused its discretion in refusing to substitute or join [the third party] in this case.

Berger, 509 N.W.2d at 254-55. Consequently, when an interest has been transferred during an action, the transferee need not be substituted or joined as a party to bring an appeal.

[¶ 16] To hold Fun Flight has no standing to pursue this appeal would be completely inconsistent with the purposes of N.D.R.Civ.P. 25(c). See Hilbrands v. Far East Trading Co., Inc., 509 F.2d 1321, 1323 (9th Cir.1975) (construing Fed. R.Civ.P. 25(c)). We conclude Fun Flight has standing to appeal.

IV

[¶ 17] Fun Flight argues the trial court erred in concluding the forum selection clause required this case to be litigated exclusively in Ohio.

[¶ 18] The trial court ruled Ohio law governs the dispute between the parties. This ruling was not challenged on appeal, and, therefore, we apply Ohio law to this case. Because the trial court considered matters outside the pleadings to decide the motion to dismiss, we review the dismissal as granting a motion for summary judgment. See State ex rel. Scanlon v. Deters, 45 Ohio St.3d 376, 544 N.E.2d 680, 682 (1989), overruled on other grounds, State ex rel. Steckman v. Jackson, 70 Ohio St.3d 420, 639 N.E.2d 83, 89 (1994). The principal purpose of summary judgment under Ohio law is to enable movement beyond allegations in pleadings and to analyze the evidence so as to ascertain whether an actual need for trial exists. Ormet Primary Aluminum Corp. v. Employers Ins. of Wausau, 88 Ohio St.3d 292, 725 N.E.2d 646, 653 (2000). Summary judgment is proper when there remains no genuine issue of material fact to be litigated and, when construing the evidence most strongly in favor of the nonmoving party, reasonable minds can only conclude that the moving party is entitled to judgment as a matter of law. Welco Industries, Inc. v. Applied Cos., 67 Ohio St.3d 344, 617 N.E.2d 1129, 1132 (1993).

[¶ 19] In Aultman Hosp. v. Cmty. Mut. Ins. Co., 46 Ohio St.3d 51, 544 N.E.2d 920, 923 (1989), the Ohio Supreme Court explained:

In construing any written instrument, the primary and paramount objective is to ascertain the intent of the parties. The general rule is that contracts should be construed so as to give effect to the intention of the parties ... Where the parties, following negotiations, make mutual promises which thereafter are integrated into an unambiguous written contract, duly signed by them, courts will give effect to the parties’ expressed intentions.

(citations omitted). A contract is ambiguous if the contract language is susceptible of two conflicting but reasonable interpretations. United Tel. Co. v. Williams Excavating, Inc., 125 Ohio App.3d 135, 707 N.E.2d 1188, 1200 (1997).

[¶ 20] The contract in this case provides, “Buyer and Seller consent to the jurisdiction of the courts of the State of Ohio and to venue in Cuyahoga County.” In Valmac Indus., Inc. v. Ecotech Mach., Inc., 137 Ohio App.3d 408, 738 N.E.2d 873, 874 (2000), the Ohio Court of Appeals construed a forum selection clause substantively identical to the one in this case, which stated “ ‘For all disputes or controversies which may arise in connection with this Contract, the parties hereby consent to the jurisdiction and venue of the Courts of the State of Georgia, and of the Federal Court sitting in the State of Georgia.’ ” The court stated:

The clause that Ecotech added to its invoice merely states that “for all disputes” concerning their contract the parties “consent to the jurisdiction and venue of the State of Georgia, and of the Federal Courts sitting [in] the State of Georgia.” Concurrent jurisdiction in two or more states is not unheard of, and in complex commercial transactions of this kind is common. The clause plainly waives any right that either party has to object to personal jurisdiction in Georgia. It does not, however, clearly provide that they also waived their right to commence an action on the contract in Ohio, if Ohio has jurisdiction. Because the clause is ambiguous in that regard, the intent of the parties in that respect must be determined by a trier of fact. Lelux v. Chernick (1997), 119 Ohio App.3d 6, 694 N.E.2d 471. It follows, therefore, that the court could not determine that issue ... from the pretrial motions that Ecotech filed.

Valmac, 738 N.E.2d at 875-76 (emphasis in original).

[¶ 21] Based on the Valmac decision, we conclude the language of the forum selection clause in this case is ambiguous as to whether it merely confers jurisdiction in Ohio courts by consent, or makes Ohio the exclusive forum for the adjudication of disputes arising out of the contract. We conclude the trial court erred in dismissing the action based on the contractual forum selection clause because a genuine issue of material fact exists as to the intention of the contracting parties which is not amenable to disposition by summary judgment.

V

[¶ 22] Fun Flight argues the trial court erred in ruling, as a matter of law, Cleveland Gear had not waived reliance on the forum selection clause. Fun Flight contends waiver occurred because Cleveland Gear sought affirmative relief through a counterclaim filed in Cass County and litigated the case in North Dakota for three years before moving for dismissal based on the forum selection clause.

[¶ 23] Waiver is a voluntary relinquishment of a known right, an act showing impliedly or expressly that the party agreed to rely on something other than the strict letter of its agreement. Vocke v. Third Nat’l Bank & Trust Co., 28 Ohio Misc. 58, 267 N.E.2d 606, 617 (Ohio Mun.1971).

Whether or not there has been waiver of all or certain terms of a prior written agreement is a question of fact for the trier of fact. The burden of proof of establishing waiver is upon the party relying on the waiver. That burden of proof must be sustained by a preponderance of the evidence.

Id. The question whether a party’s acts are consistent with a theory of waiver is generally inappropriate for summary judgment disposition. See Starcher v. Reserve Ins. Co., 68 Ohio App.2d 176, 428 N.E.2d 461, 463 (1980).

[¶ 24] In this case, Cleveland Gear pled the forum selection clause in its answer and referenced the clause in its motion for partial summary judgment. Neither Triple Quest nor Fun Flight sought to have the applicability of the clause adjudicated through a pretrial motion. Adjudication of the applicability of the clause was prompted by the trial court. Although three years passed before Cleveland Gear moved for dismissal based on the forum selection clause, Triple Quest had become insolvent during the interim and its assets were purchased by others. Under these circumstances, we conclude a genuine issue of material fact exists whether Cleveland Gear waived its right to rely on the forum selection clause, and summary judgment was improperly granted.

[¶ 25] We conclude the trial court erred in ruling, as a matter of law, Cleveland Gear did not waive its right to rely on the forum selection clause.

VI

[¶ 26] We reverse the order and remand the case for further proceedings.

[¶ 27] VANDE WALLE, C.J., NEUMANN, SANDSTROM, JJ., and GRAFF, D.J.

[¶ 28] BENNY A. GRAFF, D.J., sitting in place of KAPSNER, J., disqualified.

      . In ELCA Enterprises, Inc. v. Sisco Equipment Rental & Sales, Inc., 53 F.3d 186, 191 (8th Cir.1995), the court said "Rule 25 does not substantively determine what actions survive the transfer of an interest; rather, it provides substitution procedures for an action that does survive.” The trial court did not rule on Fun Flight's argument that it is the successor in interest only to Triple Quest’s right of recovery, but cannot be liable for any judgment on Cleveland Gear's counterclaim. Therefore, this issue is not before us on appeal and we do not decide it.

      . Contract forum selection clauses like the one in this case have been construed by other courts to be, as a matter of law, affirmative conferrals of personal jurisdiction by consent, but not negative exclusions of jurisdiction in other courts. See, e.g., Ericsson, 201 F.3d at 18-19; John Boutari and Son v. Attiki Importers, 22 F.3d 51, 52-53 (2nd Cir.1994); Caldas & Sons, Inc. v. Willingham, 17 F.3d 123, 127-28 (5th Cir.1994); Redondo Const. Corp. v. Banco Exterior De Espana, S.A., 11 F.3d 3, 5-6 (1st Cir.1993); Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75, 77-78 (9th Cir.1987). In cases in which forum selection clauses have been held to require litigation in a particular court, the language of the clauses clearly required exclusive jurisdiction. See, e.g., Pelleport, 741 F.2d at 275 (construing clause stating " ‘this Agreement shall be litigated only in the Superior Court for Los An-geles, California (and in no other)' ”); Cumberland Software, Inc. v. Great American Mortgage Corp., 507 So.2d 794, 795 (Fla.App.1987) (construing clause stating " 'the Superior Court of the State of Georgia, County of Cobb, shall have exclusive jurisdiction of any and all actions' ").


author: SANDSTROM, Justice.

text:
    2001 ND 103
    Mark V. LARSON, Plaintiff and Appellee v. NORKOT MANUFACTURING, INC., Western Industries, Inc., and James Page, individually, Defendants, Third-Party Plaintiffs and Appellants, v. McGee, Hankla, Backes & Wheeler, P.C., Third-Party Defendant and Appellee.
    No. 20000321.
    Supreme Court of North Dakota.
    May 24, 2001.

      Lyle W. Kirmis, Zuger Kirmis & Smith, Bismarck, for plaintiff and appellee.
    James L. Norris, P.C., Houston, TX, for defendants, third-party plaintiffs, and appellants.
    Steven A. Storslee, Storslee Law Firm, P.C., Bismarck, for third-party defendant and appellee.
   SANDSTROM, Justice.

[¶ 1] Norkot Manufacturing, Inc., Western Industries, Inc., and James Page (collectively, “Page”) appealed a district court memorandum and order granting the motion of McGee, Hankla, Backes & Wheeler, P.C. (“McGee”), for summary judgment dismissing Page’s third-party complaint against it and granting the motion of Mark V. Larson for summary judgment dismissing Page’s counterclaim against him. We conclude there is a genuine issue of material fact precluding summary judgment. We affirm the stipulated dismissal of Larson’s claim against Page, and reverse the remainder of the judgment, and remand for further proceedings.

I

[¶ 2] In late 1992 and early 1993, Larson, a member of the McGee law firm, represented Page in negotiating a business asset sale involving grinders and the right to manufacture grinders to Rexworks, Inc. Larson drafted an asset purchase agreement and other agreements, which were signed on February 2,1993.

[¶ 3] In a third-party complaint dated January 2,1996, and filed in a South Dakota circuit court on January 3, 1996, Rex-works named Page as a defendant in a lawsuit involving a grinder manufactured by Page and sold by Rexworks, which caught fire and was destroyed. Page was also joined in a Texas lawsuit in March 1996.

[¶ 4] Larson sued Page on January 12, 1998, to recover unpaid legal fees. On February 6, 1998, Page answered and counterclaimed for legal malpractice for failing to include in the sale contracts with Rexworks “any provision in the contract to protect Norkot and Page from liability to parties who may be injured, physically or financially, as a consequence of the use of any of the assets transferred from Norkot to Rexworks.” Page filed a third-party complaint against McGee, alleging the same legal malpractice claim.

[¶ 5] McGee moved for summary judgment dismissing Page’s third-party complaint on the ground that the claim was barred by the statute of limitations. Larson supported McGee’s motion and sought dismissal of Page’s counterclaim on the ground it was barred by the statute of limitations. In a responding affidavit, Page said “Larson never discussed with me that ... we needed to have an indemnity agreement from Rexworks for the products that Rexworks would manufacture after the sale.” Page further averred:

By not knowing that there needed to be such an indemnity agreement, I was unaware that Larson had committed legal malpractice and I was unaware that Norkot and I had been damaged by Larson’s malpractice. The first tune I became aware of Larson’s legal malpractice was when I was served with the third-party petition by Rexworks in the Texas Dirtworks case sometime shortly after April 17,1996 (see attached Exhibit 75).

In an August 17, 2000, memorandum and order granting the motions for summary judgment, the district court ruled:

The first manifestation of potential claim for negligence occurred when Page was served with the complaint in the South Dakota litigation on January 5, 1996. This would have triggered discussions between Page and his attorneys about the indemnification provisions of the agreements.... The written documents and time table objectively show that Page was aware of a potential claim for negligence about indemnification under the 1993 agreements when he was sued for the South Dakota case on January 5, 1996. Since he did not serve his counterclaim until February 6, 1998, the statute of limitations had run and his claim must be barred.

The parties stipulated to dismissal of Larson’s complaint. A judgment was entered dismissing Larson’s complaint, dismissing Page’s counterclaim against Larson, and dismissing Page’s third-party complaint against McGee. Page appealed.

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

II

[¶ 7] Under N.D.R.Civ.P. 56, summary judgment shall be rendered if there is no genuine issue as to any material fact and any party is entitled to judgment as a matter of law. Summary judgment may be issued to dispose of a controversy without trial if either party is entitled to judgment as a matter of law, if there is no dispute as to either the material facts or the inferences to be draw from undisputed facts, or if resolving factual disputes would not alter the result. Mead v. Farmers Union Mut. Ins. Co., 2000 ND 139, ¶ 12, 613 N.W.2d 512.

Ill

[¶ 8] Page contends on appeal, among other things:

Norkot and Page’s position on the present appeal is that the earliest the statute of limitations could have started to run was when Page signed the return receipt on April 20, 1996 on the third-party petition involving the Texas Dirt Works ease; since April 20, 1996, was the first time that Page was aware of any claim of liability against Norkot and Page by Rexworks for a maxigrinder manufactured by Rexworks. Thus Nor-kot and Page’s service of the counterclaim on Larson and the third-party complaint on the Firm on February 6, 1998 was clearly within the two year statute of limitations.

Larson and McGee contend the statute of limitations began to run when Page and Norkot were brought into the South Dakota litigation in January 1996, which provided notice of a potential claim for malpractice, and since they did not commence a claim for malpractice until February 1998, the claim was barred by the two-year statute of limitations.

[f 9] The elements of a legal malpractice action for professional negligence are the existence of an attorney-client relationship, a duty by the attorney to the client, a breach of that duty by the attorney, and damages to the client proximately caused by the breach of that duty. Dan Nelson Constr., Inc. v. Nodland & Dickson, 2000 ND 61, ¶ 14, 608 N.W.2d 267. The two-year statute of limitations under N.D.C.C. § 28-01-18(3) applies to malpractice actions against attorneys. Binstock v. Tschider, 374 N.W.2d 81, 84 (N.D.1985). “A cause of action for legal malpractice does not accrue, and the statute of limitations does not commence to run, until the client has incurred some damage.” Wall v. Lewis, 366 N.W.2d 471, 473 (N.D.1985). We have adopted a discovery rule, which tolls the statute of limitations in malpractice actions until the plaintiff knows, or with reasonable diligence should know, of the injury, its cause, and the defendant’s possible negligence. Jacobsen v. Haugen, 529 N.W.2d 882, 885 (N.D.1995).

[¶ 10] In applying the discovery rule, “the focus is upon whether the plaintiff has been apprised of facts which would place a reasonable person on notice that a potential claim exists. It is not necessary that the plaintiff be subjectively convinced' that he has been injured and that the injury was caused by the defendant’s negligence.” Wall v. Lewis, 393 N.W.2d 758, 761 (N.D.1986). To trigger the running of the statute of limitations, a malpractice plaintiff need not fully appreciate the potential liability or even be convinced of an injury; he or she need only know enough to be on notice of a potential claim. Schanilec v. Grand Forks Clinic, Ltd., 1999 ND 165, ¶ 19, 599 N.W.2d 253. “A malpractice plaintiffs knowledge is ordinarily a question of fact, and summary judgment is rarely appropriate on the issue of when the plaintiff should have discovered there was a potential malpractice claim.” Duncklee v. Wills, 542 N.W.2d 739, 742 (N.D.1996). A malpractice plaintiffs knowledge becomes an issue of law if the evidence is such that reasonable minds could draw but one conclusion. Wall, 393 N.W.2d at 761.

[¶ 11] The district court rejected the signing of the agreements involved in the sale on February 2, 1993, as the date the statute of limitations began to run. The court found the transaction was complex and there were no facts showing Page “should have been placed on notice of a potential claim by simply reading the agreements.” The district court ruled “[t]he first manifestation of potential claim for negligence occurred when Page was served with the complaint in the South Dakota litigation on January 5, 1996.” The City of Rapid City sued Rexworks in South Dakota, alleging a Norkot Maxigrin-der demolition grinder it purchased from Rexworks “malfunctioned, caught on fire and was destroyed.” In a third-party complaint dated January 2, 1996, Rex-works sued Norkot as a third-party defendant, seeking indemnification or contribution for any damages for which Rexworks might be found liable to the City of Rapid City. The Sheriff of Burleigh County, North Dakota, certified that the third-party complaint was served upon Norkot by “delivering to and leaving with Max Rosenberg, P.C., Registered Agent, a true and correct copy thereof’ on January 8, 1996. On February 21, 1996, Norkot’s attorneys filed an answer, counterclaim, and crossclaim dated February 20, 1996, in South Dakota Circuit Court, seeking indemnity or contribution.

[¶ 12] We agree with the trial court that service upon Page of the third-party complaint in the South Dakota litigation “would have triggered discussions between Page and his attorneys about the indemnification provisions of the agreements.” Such discussions reasonably should have provided Page with knowledge sufficient to trigger the running of the statute of limitations. Page’s registered agent received the third-party complaint in the South Dakota litigation on January 8, 1996. Page’s attorneys prepared an answer and counterclaim seeking indemnity or contribution, which was dated February 20, 1996. The parties have not drawn our attention to any record evidence showing when Page was actually apprised of the third-party complaint in the South Dakota litigation or when Page discussed that litigation with attorneys in preparing to respond to the third-party complaint, to determine by what date between January 8, 1996, and February 20, 1996, “discussions between Page and his attorneys about the indemnification provisions of the agreements” should reasonably have taken place. Thus, the record is not clear whether the statute of limitations had run by the time Page served his counterclaim.

[¶ 13] We conclude there is a genuine issue of material fact precluding summary judgment on the question of when Page knew, or with reasonable diligence should have known, of the injury, its cause, and the defendants’ possible negligence. The focus of inquiry is when Page was “apprised of facts which would place a reasonable person on notice that a potential claim exist[ed].” Wall, 393 N.W.2d at 761. The ultimate question with regard to triggering the running of the statute of limitations is when did Page “know enough to be on notice of a potential claim” for legal malpractice. Schanilec, 1999 ND 165, ¶ 19, 599 N.W.2d 253.

IY

[¶ 14] The judgment is affirmed to the extent it dismissed Larson’s claim against Page. The remainder of the judgment is reversed, and the matter is remanded for further proceedings.

[¶ 15] VANDE WALLE, C.J., MARING, KAPSNER, JJ., and HODNY, S.J.

[¶ 16] WILLIAM F. HODNY, S.J., sitting in place of NEUMANN, J., disqualified.

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

      . January 5, 1996, was not the correct date of service in the South Dakota lawsuit. The registered agent for Norkot Manufacturing Company, Inc., was actually served on January 8, 1996.

      . We note courts have imputed an attorney’s knowledge to the attorney's client in determining statute of limitations issues. See, e.g., Preblich v. Zorea, 996 P.2d 730, 736 (Alaska 2000) (client charged with constructive discovery when the client's new attorney should have discovered the client's cause of action against the client’s previous attorney); Vermont Agency of Natural Res. v. Towns, 168 Vt. 449, 724 A.2d 1022, 1025 (1998) ("notice to an attorney sufficient to trigger the statute of limitations is imputed to the client, and will bar a claim, regardless of whether that information was actually communicated to the client").


author: VANDE WALLE, Chief Justice.

text:
    2001 ND 104
    Steve JORGENSON; Ed Loraas; Jeff Nitschke; Kevin Alexander; Roger Amble; David Baldson; Joe Bata; Jared Benson; Rick Benson; Rodger Benson; Don Berge; Lowell Berntson; Neal Berntson; Darrel Biby; Lane Bina; Arvid and John Boe, dba Boe Farms; Arlen Bonde; C-C Seil Farm, Inc.; Jim Cook; Dennis Crockett; Darryl Dahl; Keith and Ted Dahl; Allan and Randy Darling; Tim Du-Bois; Gerald Eberle; Greg Entzminger; Todd Erickstad; Bill and Mike Follman; Ken Forest, dba Forest Farms, Jack Formo, dba Formo Farms; Doug Freije; Malior Gette; Mark Glinz; Alan Goeser; Loren Goeser; Owen Goeser; Roger Gorder; Don and Kent Gussiaas, dba Gussiaas Bros.; Lorin Haagenson; Dennis Hagel; Jerome and Mark Hagemeister; Ron Hegvik; Randy Helle; Rio Himle, dba H & H Farms, Inc.; Ronald Hoffarth; Jim Hofstrand; Scott Howatt; Tim Indergaard; Gerald Jaeger; Jeff Jensen; Dean Johnson; Donald Jonasson, dba Jonasson Farms; Curt Kenner; Susan Kjelland; Gene Kruk; James R. Kutz; Gene Larson, dba G & L Farms; Larry Larson; Robert Linderman; Mitchell Lloyd, dba Lloyd Crop Mgmt., Inc.; Larry Lura; Mitch Lura; Randy Lura; Richard Lynne; Brad McIntosh; Tom Marcotte; Kevin Matejcek; Jim Neumiller; Jon Nitschke; Kenneth Nitschke; Mark Novak; Lee Osowski, dba Evergreen Farms; Brad Paulson; Dale Pesek; Doug Plummer; Jon Polries; Roger Rance; Jerry Rollness; John Rueger; Dale and Kevin Samuelson; Mark Schneider; Jack Skjervheim, dba Skjervheim Farms; Dale and Jim Sondeland, dba Sondeland Bros.; Jeff Stevens; Larry and Tom Tarang, dba Tarang Farms; Rick Tofsrud; Larry Treleaven; Eldon Troftgruben; and Robin Weisz, Plaintiffs, v. AGWAY, INC., Defendant
    No. 20000300.
    Supreme Court of North Dakota.
    May 25, 2001.

      Sarah M. Vogel (argued), Damian J. Huettl (appeared), and Andrew F. Nilles (appeared), Wheeler Wolf, Bismarck, for plaintiffs.
    Duane R. Breitling (argued), Ohnstad Twichell, P.C., Fargo, for defendant.
    Steven E. McCullough (on brief), Ohns-tad Twichell, P.C., West Fargo, for defendant.
    Douglas A. Bahr, Reid A. Brady, David W. Huey, Assistant Attorneys General, Attorney General’s Office, Bismarck, for Amicus Curiae State of North Dakota.
   VANDE WALLE, Chief Justice.

[¶ 1] Under N.D.R.App.P. 47, the United Sates District Court for the District of North Dakota certified the following question of law to this Court:

Whether North Dakota’s Consumer Fraud Act, N.D. Cent.Code Chapter 51-15, may apply to a transaction in which a farmer, who purchased confection sunflower seed for use in cultivating a sunflower crop for subsequent sale, alleges the seed is defective and claims it was marketed and sold in violation of the Act[?]

We conclude N.D.C.C. ch. 51-15 clearly and unambiguously applies to the farmer plaintiffs’ claims, and we answer the certified question yes.

[¶ 2] The District Court’s certification order recited the following facts for consideration with the certified question:

1. Plaintiffs are 90 farmers who bought and planted Agway Royal Hybrid 2073 confection sunflower seed for purposes of cultivation during the 1999 crop year.
2. Plaintiffs have sued Agway under four theories, alleging certain defects in the seed.
3. The four theories advanced by plaintiffs are:
(1) Violation of the deceptive practices provisions of the North Dakota Consumer Fraud Act;
(2) Violation of the false advertising provisions of the North Dakota Consumer Fraud Act;
(3) Breach of implied warranties of merchantability and of fitness for a particular purpose under North Dakota’s Uniform Commercial Code; and
(4) Breach of express warranties under North Dakota’s Uniform Commercial Code.
4. A copy of plaintiffs’ Complaint is attached hereto as Exhibit 1.
5. .The defendant moved to dismiss counts one and two pursuant to Rule 12(b)(6) of the Federal Rules of Civil .Procedure, arguing that the North Dakota Consumer Fraud Act did not apply, as a matter of law, to the transactions at issue. Plaintiffs resist the motion.

[¶ 3] The plaintiffs’ complaint alleges Agway made knowing and deceptive misrepresentations about Royal Hybrid 2073 confection sunflower seed by promoting it as a superior seed with 85 percent or better germination rate, improved plant health, and improved yield. The plaintiffs allege Agway’s misrepresentations constituted consumer fraud and false advertising under N.D.C.C. ch. 51-15.

[¶ 4] The plaintiffs argue N.D.C.C. ch. 51-15 authorizes them to sue Agway for the alleged misrepresentations, because sunflower seeds are “merchandise” and farmers are “persons” who may sue under that chapter. Relying on Ly v. Nystrom, 615 N.W.2d 302 (Minn.2000), Agway argues N.D.C.C. ch. 51-15 only applies to consumer transactions. Agway defines “consumer” as one who “acquires goods or services for direct use or ownership, rather than for resale or use in production or manufacturing.” Agway argues the transactions alleged in the plaintiffs’ complaint are “mercantile” in nature and not consumer transactions, because the plaintiffs purchased the sunflower seeds for production and their alleged damages were incurred in their farming operations. Ag-way argues the “sum and substance” of the plaintiffs’ complaint “is that some 90 farmer-merchants purchased from a seed supplier-merchant seed to use on the farms, to produce other seeds for resale.” Agway claims these “transactions were production-oriented and not consumer-oriented.”

[¶ 5] Resolution of this issue requires interpretation of N.D.C.C. ch. 51-15. The interpretation of a statute is a question of law. E.g., Buchholz v. City of Oriska, 2000 ND 115, ¶2, 611 N.W.2d 886. The primary purpose of statutory construction is to ascertain legislative intent. E.g., Douville v. Pembina County Water Res. Dist., 2000 ND 124, ¶ 9, 612 N.W.2d 270. In ascertaining legislative intent, we look first at the words used in the statute, and we give those words their plain, ordinary, and commonly understood meaning unless they are defined by statute. N.D.C.C. § 1-02-02; Kim-Go v. J.P. Furlong Enters., Inc., 460 N.W.2d 694, 696 (N.D.1990). When a statute is clear and unambiguous on its face, we will not disregard the letter of the statute under the pretext of pursuing its spirit, because legislative intent is presumed clear from the face of the statute. N.D.C.C. § 1-02-05; Douville, at ¶ 9. A statute is ambiguous when it is susceptible to differing, but rational, meanings. Buchholz, at ¶ 2.

[¶ 6] Section 51-15-02, N.D.C.C., defines an unlawful practice as the use of any deceptive act, fraud, false promise, or misrepresentation in connection with the sale or advertisement of any “merchandise”:

The act, use, or employment by any person of any deceptive act or practice, fraud, false pretense, false promise, or misrepresentation, with the intent that others rely thereon in connection with the sale or advertisement of any merchandise, whether or not any person has in fact been misled, deceived, or damaged thereby, is declared to be an unlawful practice.

Section 51-15-09, N.D.C.C., does not preclude an action by “any person against any person who has acquired any moneys or property by means of any” unlawful practice, and provides:

The provisions of this chapter do not bar any claim for relief by any person against any person who has acquired any moneys or property by means of any practice declared to be unlawful in this chapter. If the court finds the defendant knowingly committed the conduct, the court may order that the person commencing the action recover up to three times the actual damages proven and the court must order that the person commencing the action recover costs, disbursements, and actual reasonable attorney’s fees incurred in the action.

[¶ 7] “Merchandise” is defined in N.D.C.C. § 51-15-01(3) as “any objects, wares, goods, commodities, intangibles, real estate, or services.” Under N.D.C.C. § 51-15-01(4), “person” means “any natural person or the person’s legal representative, partnership, corporation, limited liability company, company, trust, business entity, or association, and any agent, employee, salesman, partner, officer, director, member, stockholder, associate, trustee, or cestui que trust thereof.”

[¶ 8] Although N.D.C.C. ch. 51-15 is entitled “consumer fraud and unlawful credit practices,” the word “consumer” does not otherwise appear in the text of N.D.C.C. ch. 51-15. Headnotes describing the title of a chapter of the code do not constitute any part of the statute and may not be used to determine legislative intent. N.D.C.C. § 1-02-12. See Mees v. Ereth, 492 N.W.2d 72, 75 (N.D.1992). Instead, we look to the statutory language used in N.D.C.C. ch. 51-15. The plain and unambiguous language of N.D.C.C. § 51-15-02, prohibits an “unlawful practice” in connection with the sale or advertisement of any “merchandise,” which is broadly defined in N.D.C.C. § 51-15-01(3) as “any objects, wares, goods, commodities, intangibles, real estate, or services.” The definition of merchandise is broad enough to include confection sunflower seeds. Moreover, the clear and unambiguous language of N.D.C.C. § 51-15-09, does not preclude an action by “any person against any person who has acquired any moneys or property by means of any practice declared to be unlawful” under N.D.C.C. § 51-15-02. The broad definition of “person” includes “any natural person” or other business entity, see N.D.C.C. § 51-15-01(4) and “person” is not necessarily limited to “consumer” or “consumer transactions” as defined by Agway. The plain and unambiguous definition of person belies a legislative intent to limit the provisions that do not preclude an action by any person in N.D.C.C. § 51-15-09 to consumer transactions as defined by Agway. The plain and unambiguous definition of “person” manifests a legislative intent that N.D.C.C. ch. 51-15 applies to a farmer who purchases confection sunflower seeds for use in cultivating a sunflower crop for subsequent sale, and who alleges the seed was marketed and sold in violation of N.D.C.C. ch. Slid.

[¶ 9] We therefore hold N.D.C.C. ch. 51-15 applies to the plaintiffs’ action, and we answer yes to the question certified by the United States District Court.

[¶10] SANDSTROM, NEUMANN, MARING, JJ., and BEKKEN, D.J.

[¶ 11] BEKKEN, D.J., sitting in place of KAPSNER, J., disqualified.

      . In Ly 615 N.W.2d at 308, the Minnesota Supreme Court recognized the word "consumer” did not appear in the Minnesolá Consumer Fraud Act, but said the Act’s purpose of protecting consumers was clear from its inception. The court said the Minnesota Consumer Fraud Act is remedial and should be liberally construed in favor of protecting consumers. Id. See also State ex rel. Spaeth v. Eddy Furniture Co., 386 N.W.2d 901, 903 (N.D.1986). In Ly, at 310, the court agreed with a restaurant buyer's argument that the sale of a restaurant was governed by the Minnesota Act, and the buyer's status was more of a consumer of the restaurant business than a buyer of a business for resale. Id. The court said the Minnesota Act was intended to protect a broad, but not limitless, range of individuals from fraudulent and deceptive trade practices, and viewing tire restaurant buyer as a "consumer” did not push application of the Act onto new ground. Id. Ly recognizes a broader application of Agway’s definition of consumer than Agway’s application of its definition, and Ly does not preclude application of the plain language of N.D.C.C. ch. 51-15 to the plaintiffs’ claims.

      . Because the language of N.D.C.C. ch. 51-15 is clear and unambiguous, we do not resort to extrinsic interpretive aids.