author: G. BARRY ANDERSON, Judge.

text:
    AUTO-OWNERS INSURANCE COMPANY, Appellant, v. Ione FORSTROM, et al., Defendants, Mark Anthony Heath, et al., Respondents, Pablo Ojeda-Napoles, et al., Respondents, Heather Tuckee, as parent and natural guardian of Tanner Ray Heath, Respondent, Myron Weege, Jr., as parent and natural guardian of Myron Weege, III, and Brianna Weege, Respondent.
    No. C8-03-296.
    Court of Appeals of Minnesota.
    Oct. 7, 2003.
    R. Stephen Tillitt, Sara N. Wilson, Gisla-son & Hunter, L.L.P., Minnetonka, for appellant.
    Richard C. Scattergood, Rider Bennett, L.L.P., Minneapolis, for respondent Heath.
    Daniel J. Heuel, O’Brien & Wolf, L.L.P., Rochester, for respondents Ojeda-Na-poles.
    William J. Schmitz, Sieben, Grose, Von Holtum & Carey, Ltd., Minneapolis, for respondent Tuckee.
    J.D. Haas, Minneapolis, for respondent Weege.
    Considered and decided by HARTEN, Judge, G. BARRY ANDERSON, Judge, and WRIGHT, Judge.
   OPINION

G. BARRY ANDERSON, Judge.

Appellant Auto-Owners Insurance Company (Owners) appeals from the district court’s grant of summary judgment in favor of respondents, arguing that (a) the court erred when it concluded that extrinsic evidence could not be considered to determine ownership of a vehicle when interpreting an insurance policy, and (b) genuine issues of material fact precluded summary judgment. We affirm in part, reverse in part, and remand.

FACTS

On May 13, 2000, the vehicle driven by Mark Heath (Heath), borrowed from Alisha Dennis (Dennis), struck the vehicle occupied by Pablo and Maria Ojeda-Na-poles (the Ojeda-Napoles). In April 2001, the Ojeda-Napoles commenced a personal injury suit against Heath and Dennis.

Because Heath did not have an insurance policy issued in his own name, one of the insurance coverage matters addressed after the accident was a dispute as to whether an insurance policy Owners issued to lone Forstrom, Heath’s grandmother with whom he lived, provided coverage for Heath’s accident. Forstrom’s policy provided insurance for her own automobile, and also provided coverage for other automobiles:

1. LIABILITY COVERAGE — BODILY INJURY AND PROPERTY DAMAGE
a. The Liability Coverage provided for your automobile also applies to an automobile not:
(1) owned by or furnished or available for regular use to you or anyone living with you ...
⅜ * * *
b. We extend this coverage only:
(1) to you;
(2) to relatives who do not own an automobile[.]

Thus, the policy’s coverage applied to automobiles driven by Forstrom’s relatives who lived in her household and did not own an automobile. In deposition testimony, Heath stated that he “had” a 1991 Oldsmobile Cutlass, but that he did not own it because the vehicle was “in [his] father’s name.” According to Heath, he was in the process of purchasing the vehicle from his parents and was making payments to them. The vehicle was inoperable on the date of the accident, because a head gasket needed repair. Heath also stated that a 1991 GMC Jimmy registered in his name was totaled prior to his May 2000 accident with the Ojeda-Napoles. The district court record contains a printout dated April 9, 2002 entitled “motor vehicle record display” that refers to a 1991 GMC, and contains language stating “OWNER: HEATH MARK ANTHONY.”

On March 12, 2002, the Ojeda-Napoles moved for summary judgment, arguing that because it was inoperable at the time of the accident, the Cutlass did not constitute an automobile for purposes of For-strom’s policy, and therefore Heath was covered by Owners. On April 29, 2002, Owners began a declaratory judgment action, alleging that Owners was not liable for Heath’s accident because Heath was not living with Forstrom at the time of the accident and because he was the registered owner of a motor vehicle.

On June 18, 2002, the district court issued an order denying the Ojeda-Napoles’ summary judgment motion because the court found that the Cutlass was a “motor vehicle.” On September 24, 2002, the Oje-da-Napoles moved for reconsideration of the June 18, 2002 order. On December 13, 2002, the district court issued an order reversing and vacating its June 18, 2002 order, and granting the Ojeda-Napoles’ motion for summary judgment. The district court did not reverse its findings with regard to whether the Cutlass qualified as a motor vehicle, but based its decision that Heath did not own a motor vehicle on the principles announced in Am. Nat. Gen. Ins. Co. v. Solum, 641 N.W.2d 891 (Minn.2002). This appeal by Owners follows.

ISSUES

I. Did the district court err in concluding that Heath did not own a 1991 Oldsmobile Cutlass for purposes of determining insurance coverage?

II. Did the district court err in concluding that, based on the record before the court, Heath did not own a 1991 GMC Jimmy at the time of the accident?

ANALYSIS

When reviewing an appeal from an order for summary judgment, this court asks two question's: “(1) whether there are any genuine issues of material fact and (2) whether the lower courts erred in their application of the law.” State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990) (citation omitted). “On appeal, the reviewing 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).

I.

Owners argues that the district court erred in concluding that Heath did not own a motor vehicle for purposes of interpreting Forstrom’s insurance policy with Owners. Interpretation of statutory law and the language of insurance agreements are both legal issues subject to a de novo standard of review. Dohney v. Allstate Ins. Co., 632 N.W.2d 598, 600 (Minn.2001).

The key issue here is whether Heath owned an automobile at the time of the accident. Heath had liability coverage under the Forstrom policy only if Heath did not own an automobile when the accident occurred. Although the Cutlass was registered in his father’s name, Owners asserts that Heath is the true owner of the vehicle.

Because the language of Forstrom’s policy does not define “owner,” we look to Minnesota law for guidance. See Vue v. State Farm Ins. Cos., 582 N.W.2d 264, 266 (Minn.1998) (stating that where insurance policy did not define “owner,” supreme court looked to statutory law and case law for guidance).

Our analysis begins with Minn.Stat. § 168A.10, part of the Motor Vehicle Certification of Title Act (motor vehicle act), which addresses the presumption of ownership of an automobile based on title. See Solum, 641 N.W.2d at 896. “Prior to the enactment of § 168A.10, the fact that an individual’s name appeared on the certificate of title as the owner of the vehicle was prima facie evidence of his ownership of the automobile. This presumption of ownership was rebuttable rather than conclusive on the issue of ownership.” Id. (quoting Welle v. Prozinski, 258 N.W.2d 912, 916 (Minn.1977)). But after passage of Minn.Stat. § 168A.10, “the presumption of ownership established by the certificate of title, that [prior to 1971] was generally rebuttable, became for the most part conclusive.” Solum, 641 N.W.2d at 899. Thus, the motor vehicle act creates a presumption of ownership in the person listed on a vehicle’s title. See id. at 896 (applying the motor vehicle act to appellant’s attempt to establish ownership of vehicle to determine insurance coverage).

There are, however, circumstances in which the presumption may be rebutted by extrinsic evidence of ownership. See So-lum, 641 N.W.2d at 898 (stating that extrinsic evidence may be used to rebut the presumption of ownership in cases involving both “vicarious liability under the Motor Vehicle Act and liability under the No Fault Act”).

Here, the district court concluded that because a title transfer from Heath’s father to Heath did not occur, Solum required the court to conclusively presume that Heath did not own the car, and introduction of extrinsic evidence of ownership to rebut the presumption was not permitted. On appeal, Owners argues that the district court should have permitted extrinsic evidence regarding ownership of the Cutlass. Owners argues further that if the appellate court determines that the district court erred regarding Heath’s ownership of the Cutlass, then the June 18 order, which denied the Ojeda-Napoles’ summary judgment motion, is still in force because it was not expressly reversed in the December 13 order. The Ojeda-Na-poles argue that the district court did not err when it concluded that Heath’s father was conclusively presumed to be the owner of the Cutlass.

To determine if the present dispute falls into one of the categories where extrinsic evidence is permitted, we must examine Solum and the cases upon which it relies. Paul Solum was involved in an accident while driving an uninsured vehicle registered in the name of his wife, Helen. So-lum, 641 N.W.2d at 893-94. Title to the vehicle had been transferred to Helen from her son, Daniel, who was attempting to avoid seizure of his vehicle as a result of alcohol-related driving offenses. Id. The Solums testified that the transfer to Helen was a formality and that they considered Daniel the owner of the vehicle. Id. If Daniel Solum owned the vehicle, American was obligated to pay the claim, but if Helen Solum owned it, American was not obligated to cover the accident. Id. at 893 & n. 1. American National General Insurance Company (American) sought a declaratory judgment, asserting that because the vehicle was registered to Helen Solum, American was not obligated to pay the claim under the provisions of the Solums’ policy with American. Id. at 893. The supreme court ruled that the Solums were precluded from disputing the validity of the title they perfected, because the So-lums intended Helen’s name to be on the title. Id. at 899-900.

The Solum court based its decision on precedent that permitted extrinsic evidence in only two limited circumstances. First, “where a transferor who had not complied with the transfer provisions of the Motor Vehicle Act was attempting to avoid vicarious liability,” extrinsic evidence was permitted to rebut the presumption of ownership. Id. at 897; see also Welle v. Prozinski, 258 N.W.2d 912 (Minn.1977). Second, extrinsic evidence is admissible to rebut a liability claim under the compulsory insurance provisions of Minn.Stat. § 65B.48, the Minnesota No Fault Act. Solum, 641 N.W.2d at 898; see also Arneson v. Integrity Mut. Ins. Co., 344 N.W.2d 617 (Minn.1984).

Thus, the Solum court specifically and clearly noted that there are only two situations where it is permissible to introduce extrinsic evidence to rebut the presumption of ownership: “[Fjor purposes of vicarious liability under the Motor Vehicle Act and liability under the No Fault Act.” Solum, 641 N.W.2d at 898 (citation omitted).

This case does not fall within either of the exceptions discussed in Solum. Here, there is no attempt to avoid vicarious liability, and there are no claims involving the no-fault act. Rather, Owners is alleging that it has no obligation under the terms of its policy with Forstrom to provide coverage for Heath’s accident. So-lum clearly limits the use of extrinsic evidence and the circumstances outlined in Solum where intrinsic evidence is permitted are not present here. The district court did not err in refusing to consider extrinsic evidence in determining that, as a matter of law, Heath did not own the Cutlass.

Because we conclude that the presumption of ownership may not be rebutted in this case, we need not reach Owners’ argument that the June 2002 order should remain in effect. We also need not reach the Ojeda-Napoles’ argument that the Cutlass does not constitute a motor vehicle under the no-fault act.

II.

Owners also argues that Heath owned a GMC Jimmy, and therefore, was not covered under Forstrom’s policy. The district court stated that it “[did] not have adequate information as to whether or not title to the 1991 [GMC Jimmy] was still registered in Mr. Heath’s name after it was totaled. The Court therefore [could not] conclude that Mark Heath owned the 1991 [GMC Jimmy] at the time of the accident.” Owners maintains that because the evidence shows that the GMC Jimmy was registered in Heath’s name, conclusive ownership of a vehicle has been demonstrated, and thus Owners is entitled to a reversal of the district court’s summary judgment order. The Ojeda-Napoles argue that the district court appropriately refused to accept the evidence presented as indisputable proof of ownership. In the alternative, they argue that because the GMC Jimmy was totaled prior to the accident, it was no longer a “motor vehicle.”

A genuine issue for trial must be established by substantial evidence. DLH, Inc. v. Russ, 566 N.W.2d 60, 69-70 (Minn.1997). “[S]ummary judgment is inappropriate when reasonable persons might draw different conclusions from the evidence presented.” Id. at 69 (citing Illinois Farmers Ins. Co. v. Tapemark Co., 273 N.W.2d 630, 634 (Minn.1978)).

Forstrom’s policy states that “Automobile means a private passenger automobile, a truck, truck tractor, trailer, farm implement or other land motor vehicle.”

As defined by the no-fault act,
‘Motor vehicle’ means every vehicle, other than a motorcycle or other vehicle with fewer than four wheels, which (a) is required to be registered pursuant to chapter 168, and (b) is designed to be self-propelled by an engine or motor for use primarily upon public roads, highways or streets in the transportation of persons or property, and includes a trailer with one or more wheels, when the trailer is connected to or being towed by a motor vehicle.

Minn.Stat. § 65B.43, subd. 2 (2002) (emphasis added). Minn.Stat. § 168.09, subd. 1 (2002) states that “[n]o * * * motor vehicle, except as is exempted by section 168.012, may be used or operated upon the public streets or highways of the state in any calendar year until it is registered as provided in this section.” Id.

There are two genuine issues of material fact presented here. First, there is a genuine issue of material fact as to whether the GMC Jimmy, on the date of the accident, was a motor vehicle. Second, the district court rejected appellant’s claim that registration of the GMC Jimmy was conclusive on the issue of ownership, concluding that it lacked adequate information to determine whether the Jimmy was registered in Heath’s name. But there is no dispute that there is some evidence — in the form of an otherwise unidentified printout; that Heath was the owner of the GMC Jimmy, at least at some point in time. Because the non-moving party in a summary judgment proceeding, in this case, Owners, is entitled to the benefit of reasonable inferences from the evidence, we conclude there is a material fact question as to ownership of the GMC Jimmy. Therefore, because genuine issues of material fact remain as to the status of the GMC Jimmy, and ownership thereof, we reverse and remand for further proceedings.

DECISION

The district court did not err when it ruled that extrinsic evidence could not be introduced to rebut the presumption of ownership of the Cutlass, but because material fact issues remain with regard to the GMC Jimmy, we reverse and remand for further proceedings.

Affirmed in part, reversed in part and remanded.

      . See Wagner v. Sckwegmann’s South Town Liquor, Inc., 485 N.W.2d 730, 733 (Minn.App.1992).


source: Caselaw Access Project

author: GORDON W. SHUMAKER, Judge.

license: Public Domain

text:
    Danny Edward YORAWAY, Petitioner, Appellant, v. COMMISSIONER OF PUBLIC SAFETY, Respondent.
    No. C5-03-241.
    Court of Appeals of Minnesota.
    Oct. 7, 2003.

      Richard L. Swanson, Chaska, for appellant.
    Mike Hatch, Attorney General, Francis Green, III, Darren L. DeJong, Assistant Attorneys General, St. Paul, for respondent.
    Considered and decided by WILLIS, Judge; TOUSSAINT, Chief Judge; and SHUMAKER, Judge.
   OPINION

GORDON W. SHUMAKER, Judge.

Appellant Danny Edward Yoraway challenges the district court’s order sustaining the revocation of his driver’s license under the implied-consent law, arguing that the arresting police officer had no authority to stop him when the alleged illegal driving occurred outside the officer’s territorial jurisdiction and when the factual basis for the stop rested solely on an informant’s observations.

FACTS

The commissioner of public safety revoked appellant Danny Edward Yorawa/s driver’s license for driving while under the influence of alcohol. The district court sustained the revocation. Yoraway contends that the court erred because the stop that led to his arrest and conviction was illegal. The facts are undisputed.

On the evening of May 4, 2002, a private citizen, who identified himself by name, address, and telephone number, called Carver County 911 to report a motorist driving recklessly. The citizen stated that (1) he “just almost got run off the road by a red Acura Integra”; (2) the driver was 45 or 50; (3) there was a woman in the front seat; and (4) the driver was “driving like a maniac ... weavin’ in and out on both sides of the road.” The citizen said the Acura was traveling west on Pioneer approaching the intersection of Audubon.

The 911 operator sent a radio dispatch for a squad to assist, indicating that a caller complained that “he almost got ran off the road and it also sounds like the suspect vehicle passed ‘em (inaudible) vehicles.” The dispatcher described the Acura and indicated that the driving conduct occurred in Chanhassen.

Chaska police officer Brady Juell heard the dispatcher say that the Aeura was “passing in no passing zones and had forced a vehicle off the roadway.” Officer Juell drove his squad east until he saw the Aeura and then he turned the squad around and stopped the car. Yoraway was the driver. The stop occurred outside the Chaska city limits and was based entirely on the citizen’s report as relayed by the 911 dispatcher. Officer Juell did not personally see Yoraway violate any laws before the stop.

Ultimately, a Carver County deputy sheriff arrived at the scene of the stop and arrested Yoraway for driving while under the influence of alcohol.

ISSUES

An on-duty police officer received a dispatch to investigate a vehicle that was being driven recklessly. The vehicle and the driving conduct were described by an identified informant. Based solely on the informant’s information, the officer stopped the vehicle outside his territorial jurisdiction.

1. Did the district court err in concluding that the officer was acting within the scope and course of his employment and therefore could validly stop a vehicle outside the officer’s territorial jurisdiction?

2. Did the district court err when it concluded that the officer could make a valid stop when the officer personally observed no illegality but relied entirely on an identified informant’s description of illegal driving conduct?

ANALYSIS

Yoraway does not dispute the facts surrounding the stop of his car. Rather, he argues that the stop was improper because Officer Juell did not observe any illegal driving within his territorial jurisdiction and was not in fresh pursuit and because the informant’s report did not suggest alcohol-impaired driving. Thus, Yoraway raises solely a legal question as to the officer’s jurisdictional authority to make the stop. “Legal questions are reviewed de novo.” Nordvick v. Comm’r of Pub. Safety, 610 N.W.2d 659, 662 (Minn.App.2000). Furthermore, when the facts are not in dispute, we review the validity of a traffic stop as a question of law. Berge v. Comm’r of Pub. Safety, 374 N.W.2d 730, 732 (Minn.1985).

1. Officer’s Jurisdiction

Yoraway argues that an officer cannot lawfully make an investigatory stop of a motor vehicle when both the alleged illegal driving and the stop occur outside the officer’s territorial jurisdiction unless the officer is in fresh pursuit of the offending driver. It is undisputed that Officer Juell was at no time in fresh pursuit of Yoraway. But fresh pursuit is only one of several bases for an out-of-jurisdiction stop. Minn.Stat. § 629.40 (2002).

An out-of-jurisdiction stop is permitted if the officer is acting “in the course and scope of employment.” Id., subd. 3. The officer then is considered to be “serving in the regular line of duty as fully as though the service was within [the officer’s] jurisdiction.” Id. The meaning of “course and scope of employment” is a question of statutory interpretation and is a legal issue that we review de novo. State v. Meyer, 641 N.W.2d 324, 326 (Minn.App.2002), review denied (Minn. May 14, 2002).

Officer Juell was on duty as a police officer and was driving a police squad car when a dispatcher relayed to him a request for assistance in investigating a citizen’s complaint about Yoraway’s driving. It is beyond reasonable dispute that the employment functions and duties of police officers who are patrolling public streets include the investigation of citizen complaints and the enforcement of traffic laws. Officer Juell responded to an official dispatch requesting the investigation of a complaint that an identified vehicle was being operated recklessly. His response was quintessentially what police officers do in furtherance of their employment duties. See id. at 827-28 (holding that an officer acts within the course and scope of his employment when he acts in furtherance of his employer’s interests).

Yoraway also argues that Minn. Stat. § 629.40 allows only out-of-jurisdiction arrests and does not extend to investigatory stops. This argument is supported neither by legal authority nor common sense. The caselaw has drawn no functional distinction between stops and arrests in applying this statute. See State v. Tilleskjor, 491 N.W.2d 893, 894 (Minn.1992) (upholding an out-of-jurisdiction investigatory stop of a vehicle that led to the arrest of the driver). In a traffic context, more often than not an investigatory stop necessarily precedes a formal arrest. To interpret the statute to permit an arrest but not the stop necessary to effect the arrest would lead to an absurd result. See Minn.Stat. § 645.17(1) (2002) (it is presumed that in enacting a statute the legislature does not intend an absurd or unreasonable result).

2. Factual Basis for the Stop

A law enforcement officer may lawfully stop a motor vehicle if there exists a particularized, objective basis for suspecting the driver of illegal conduct. State v. Hjelmstad, 535 N.W.2d 663, 664 (Minn.App.1995). Although Yoraway mischarac-terizes the basis for Officer Juell’s stop as being a citizen’s generalized and concluso-ry report of “erratic driving,” in fact the officer received from the 911 dispatcher a particularized complaint that the citizen saw Yoraway passing in no-passing zones and almost forcing his vehicle off the road. Unarguably, either type of conduct, passing in no-passing zones or nearly forcing another vehicle off the road, can give rise to a reasonable and objective suspicion of illegality that will suffice to support a lawful traffic stop. See MinmStat. § 169.13, subds. 1, 2 (2002) (reckless or careless driving).

Furthermore, it is not problematic that Officer Juell did not personally witness Yoraway’s illegal driving, for the requisite basis of a traffic stop “may be supplied by information acquired from another person.” Marben v. Dep’t of Pub. Safety, 294 N.W.2d 697, 699 (Minn.1980).

The facts forming the basis of Officer Juell’s stop were supplied by a citizen informant who personally observed Yoraway’s illegal driving. A reliable informant’s factually specific report of unlawful driving will alone justify a stop. Olson v. Comm’r of Pub. Safety, 371 N.W.2d 552, 555 (Minn.1985). The reliability of an identified citizen informant is presumed. Vivier v. Comm’r of Pub. Safety, 406 N.W.2d 587, 589 (Minn.App.1987). The informant here identified himself fully by name, address, and telephone number, and thus was presumed rehable.

However, ultimate reliability depends not only on the identification of the informant but also on the nature of the information he or she gives. See Olson, 371 N.W.2d at 555. We consider the totality of the circumstances in determining whether a “tip” contains sufficient indicia of reliability to justify a traffic stop. Jobe v. Comm’r of Pub. Safety, 609 N.W.2d 919, 921 (Minn.App.2000). Here, the citizen described not only the specific suspicious driving but also the make, model, and color of the car; the approximate age and gender of the driver and the gender of the passenger; the location of the car when the traffic infractions occurred; and the direction in which and specific streets on which the car was traveling. The law requires that there be at least a modicum of specificity as to why the informant believes the driver is driving illegally. Olson, 371 N.W.2d at 556. That requirement was met here.

Yoraway contends that even though the citizen described illegal driving, he did not link that conduct to possible alcohol-impaired driving and, thus, the citizen’s factual reliability was lacking. Even a minor traffic violation may suffice as the basis for an investigatory traffic stop. State v. George, 557 N.W.2d 575, 578 (Minn.1997). The law does not require an informant, or even a law enforcement officer, to reach and articulate an ultimate conclusion as to the reason for the illegal driving before a stop may be made. The law requires only that there be objective, factually specific conduct that reasonably raises a suspicion of illegality. See Olmscheid, v. Comm’r of Pub. Safety, 412 N.W.2d 41, 42 (Minn.App.1987), revieiv denied (Minn. Nov. 6, 1987). Furthermore, we have rejected the suggestion that the mere conclusion of an informant that a driver was “possiblfy] intoxicated” would be a sufficient factual basis for a traffic stop. Rose v. Comm’r of Pub. Safety, 637 N.W.2d 326, 330 (Minn.App.2001), review denied (Minn. Mar. 19, 2002).

DECISION

Because Officer Juell had authority to make a stop outside of his jurisdiction when he was acting within the course and scope of his employment and he also had reasonable, articulable suspicion to make the traffic stop based on the identified informant’s tip establishing illegal activity, we affirm the district court.

Affirmed.


author: MINGE, Judge.

text:
    Debra Lynn BUNDY, et al., Appellants, v. Lou Ann HOLMQUIST, Defendant and third-party plaintiff, Respondent, Kathleen A. Lamm, Defendant and third-party plaintiff, Respondent, Karen M. Johnson, Defendant and third-party plaintiff, Respondent, v. William B. Nelson, et al., Third-party defendants, Respondents.
    No. A03-314.
    Court of Appeals of Minnesota.
    Oct. 7, 2003.

      Randolph T. Brown, Marcus C. Stub-bles, P.A., Long Prairie, for Appellants.
    Paul A. Rajkowski, Leanne D. Bartishof-ski, Rajkowski Hansmeier Ltd., St. Cloud, for respondent Karen Johnson.

      Dyan Ebert, William V. Faerber, Quinli-van & Hughes, P.A., St. Cloud, for respondent Kathleen Lamm.
    Terrence R. Peterson, Scott A. Brehm & Assoc’s, St. Paul, for respondent Lou Ann Holmquist.
    Marcus Christianson, Maschka, Riedy & Ries, Mankato, for respondents William Nelson, Patricia Nelson and Charles Reic-hert.
    Considered and decided by HUDSON, Judge, RANDALL, Judge, and MINGE, Judge.
   OPINION

MINGE, Judge.

Appellants claim that respondent family created a condition on real estate that caused appellant wife’s injuries. The district court granted summary judgment, dismissing the claim on the ground that respondent family had no duty to appellants because the respondent family neither owned nor possessed the property. Because persons who create an unreasonable risk of harm that results in injury are subject to liability for injuries caused by that condition, we reverse and remand for trial.

FACTS

Appellant wife Debra Bundy fell and broke her ankle when she stepped into a small hole. Respondent sisters, Lou Ann Holmquist, Kathleen A. Lamm, and Karen M. Johnson, had inherited from their mother the rural land where the fall occurred. Respondent sisters then sold the entire tract, which included a building site, to respondents Charles Reichert and William Nelson, who are professional developers. The developers entered into a purchase agreement to sell the portion with the buildings to appellant Debra Lynn Bundy and her husband, appellant Rick Bundy.

Three weeks before closing on their purchase, appellants and one of the developers visited the property. When they arrived, the sisters and some of the sisters’ family members were at the property moving their mother’s possessions out of the house and removing flower bulbs from the yard. The sisters had permission to temporarily store items in the house and to remove flower bulbs.

Two days before the closing on their purchase, appellants, with permission from the developers, began moving their possessions into the dwelling. Respondent Nelson even met appellants at the house and helped them gain entry. Incident to moving items into the dwelling, appellant wife stepped into a flowerbed. She asserts that she stepped into a hole, which caused her to fall and injure her ankle. Appellant husband asserts that the hole was concealed by grass approximately 6 to 18 inches tall. A friend of the appellants, who was there to help with the move, also testified that the hole was difficult to see unless it was viewed from a certain angle. Respondent sisters assert that neither they nor others helping them dug out any flowers or bulbs where appellant wife fell.

Appellants moved to make Reichert and Nelson direct defendants; the district court granted the motion. After completion of discovery, respondent sisters moved for summary judgment on the grounds that (1) they did not owe appellants a duty because the sisters did not own the property at the time of appellant wife’s fall; (2) appellant wife had assumed the risk of injury; (3) appellant wife should not have stepped into the flower bed because it was an open and obvious danger; (4) there was not sufficient evidence that the sisters or others acting on their behalf had dug the hole; and (5) appellant wife was a trespasser, and as such was not owed a duty upon which she could recover. The district court granted summary judgment in favor of respondent sisters on the ground that they had sold the premises and were not acting on behalf of Reichert and Nelson. The district court therefore dismissed the sisters from the action, noting that the sisters may still be liable to Reic-hert and Nelson by way of contribution and indemnity. The district court stated that it was declining to reach the issues of assumption of risk, open and obvious danger, causation, and trespass, but went on to state that there were disputed factual issues that would have prevented summary judgment on those issues. Appellants seek review of the district court’s order granting summary judgment in favor of the sisters.

ISSUES
1. Did the district court err by determining that the sisters did not owe a legal duty to appellant wife?
2. Are the sisters entitled to a summary judgment on issues of assumption of risk, open and obvious danger, causation, or trespass?

ANALYSIS

We review a district court’s grant of summary judgment to determine whether there are any genuine issues of material fact and whether the district court erred in applying the law. H.B. ex rel. Clark v. Whittemore, 552 N.W.2d 705, 707 (Minn.1996). We view the evidence in the light most favorable to the party against whom summary judgment was granted, and any doubts about the existence of a material fact are resolved in that party’s favor. Id. There is no genuine issue of material fact “[wjhere the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party.” DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn.1997) (quotation omitted). A genuine issue of material fact exists when there are issues that can be resolved “only by a finder of fact because they may reasonably be resolved in favor of either party.” Id. (quotation omitted).

A defendant in a negligence action is entitled to summary judgment if the record indicates a lack of proof on any of the four requirements of the negligence cause of action: “(1) the existence of a duty of care, (2) a breach of that duty, (3) an injury, and (4) the breach of the duty being the proximate cause of the injury.” Funchess v. Cecil Neuman Corp., 632 N.W.2d 666, 672 (Minn.2001) (citation omitted).

I.

We first address whether the district court erred by finding that respondent sisters did not owe appellants a legal duty. The existence of a legal duty is generally an issue for the court to decide as a matter of law. Larson v. Larson, 373 N.W.2d 287, 289 (Minn.1985). Thus, this court’s review is de novo. See Frost-Benco Elec. Ass’n v. Minnesota Pub. Util. Comm’n, 358 N.W.2d 639, 642 (Minn.1984) (noting that a reviewing court need not give deference to a district court’s decision on a legal issue).

The district court cited Louis v. Louis, 636 N.W.2d 314, 318-19 (Minn.2001), and stated that because it is the landowner or possessor who owes the duty of care to entrants upon the land, the critical issue in the case was who owned or possessed the land where the injury occurred. The district court relied on the Restatement (Second) of Torts § 328 (1965) to conclude that the sisters were neither the owners nor possessors of the land at the time the injury occurred and therefore did not owe appellant a legal duty. Appellants do not challenge the district court’s determination that the sisters were not in possession of the land. Appellants only challenge the district court’s conclusion that the sisters did not owe appellants a legal duty.

Appellants first assert that the district court should have relied on section 383 of the Restatement (Second) of Torts. Section 383 provides that:

One who does an act or carries on an activity upon land on behalf of the possessor is subject to the same liability, and enjoys the same freedom from liability, for physical harm caused thereby to others upon and outside of the land as though he were the possessor of the land.

Restatement (Second) of Torts § 383 (1965). The rule from section 383 was adopted by Minnesota in Dishington v. A.W. Kuettel & Sons, Inc., 255 Minn. 325, 330, 96 N.W.2d 684, 688 (Minn.1959).

By its terms, section 383 applies only when a person is acting “on behalf of the possessor.” The sisters were not acting on behalf of the possessor. It was the sisters who asked for permission to remove the bulbs; they were acting for their own benefit, not for the benefit of the possessor. Appellants’ argument is not persuasive, the plain meaning of section 383 precludes its application in this case.

Next appellants argue that section 386 of the Restatement (Second) of Torts applies in this case and results in the sisters being directly liable to appellant. Section 386 provides:

Any person, except the possessor of land or a member of his household or one acting on his behalf, who creates or maintains upon the land a structure or other artificial condition which he should recognize as involving an unreasonable risk of physical harm to others upon or outside of the land, is subject to liability for physical harm thereby caused to them, irrespective of whether they are lawfully upon the land, by the consent of the possessor or otherwise, or are trespassers as between themselves and the possessor.

Restatement (Second) of Torts § 386 (1965).

The plain language of section 386 makes it clear that liability is not limited to owners, possessors, and people acting on behalf of possessors. The comments to section 386 say that the rule “relates to the liability of trespassers and licensees not acting in the possessor’s behalf but for their own purposes,” and that it applies when “a possessor permits or invites others to come upon his land to use it for their own purposes.” Restatement (Second) of Torts § 386 cmts. a & b. “Licensee by permission” is defined as: “[o]ne who has the owner’s permission or passive consent to enter the owner’s premises for one’s own convenience, curiosity, or entertainment.” Black’s Law Dictionary 932 (7th ed.1999). Here, the sisters had permission to enter the land for a limited purpose. That purpose, digging bulbs, was to benefit the sisters. They were licensees of the possessor and were not acting on the possessor’s behalf. Accordingly, section 386, if followed by Minnesota, governs the liability of the sisters.

Minnesota has not explicitly adopted section 386. The only reported case discussing that section is Carlson v. Rand, 275 Minn. 272, 146 N.W.2d 190 (1966). In Carlson, the plaintiff tripped over a rug located in the storeroom of his mother’s home. Id. His sister, who did not possess or own the home, placed the rug in the storeroom, so he sued his sister for negligence. Id. at 274, 146 N.W.2d at 191-92. The court noted that the plaintiff asserted “that defendant, though not the owner or even an occupant of the place where the accident occurred, had, nevertheless, a duty not to maintain a condition involving an unreasonable risk of physical harm to others,” and went on to note that the plaintiffs contention was based upon section 386. Id. at 276-77, 146 N.W.2d at 193. The court found that the plaintiff had some duty to watch where he was going and that his sister did not maintain a dangerous condition. Id. at 279, 146 N.W.2d at 195. The court noted that section 386 did not apply “in the absence of evidence that defendant by her conduct created a condition she should have recognized as creating ‘an unreasonable risk of physical harm to others.’ ” Id. at 279, 146 N.W.2d at 194. While the court did not explicitly adopt section 386, the court indicated that section 386 would apply if the sister had in fact maintained a dangerous condition.

We conclude that it is appropriate to apply section 386 in this case. Section 386 is consistent with the underlying theory of negligence that “[e]very person in the conduct of his affairs is under a legal duty to act with care and forethought; and, if injury results to another from his failure so to do, he may be held accountable in an action at law.” Roadman v. C.E. Johnson Motor Sales, 210 Minn. 59, 63, 297 N.W. 166, 169 (1941) (quotation omitted). Because section 386 allows appellants to pursue a direct action against the sisters, the district court erred by granting summary judgment on this ground. Appellants must still prove the other elements necessary to establish their right to damages.

II.

Next we examine whether summary judgment in favor of the sisters would have been appropriate on the basis of appellant wife assuming the risk, or on the basis of the hole constituting an open and obvious danger, or on the basis that the sisters did not cause the condition that led to appellant wife’s injury, or on the basis that appellant wife was a trespasser. See Myers v. Price, 463 N.W.2d 773, 775 (Minn.App.1990) (stating that summary judgment shall be affirmed if it can be sustained on any ground), review denied (Minn. Dec. 4, 1991). These arguments were presented to the district court; it determined that they were evidentiary issues that required a trial and declined to address them. The parties press the issues on appeal. The parties disagree whether such determinations are appropriate at this stage of the proceedings and if so whether they are warranted by the record.

A. Assumption of Risk

The district court was asked to grant summary judgment on the ground that appellant wife assumed the risk of injury. A party assumes the risk when the party has: (a) knowledge of the risk; (b) an appreciation of the risk; and (c) a choice to avoid the risk but voluntarily chose to take it. Andren v. White-Rodg ers Co., 465 N.W.2d 102, 104-05 (Minn.App.1991), review denied (Minn. Mar. 27, 1991). The parties in this case disagree over how to frame the issue. Appellants urge the court to frame the issue as follows: Did appellant wife assume the risk of injury by stepping into the hole? Respondent sisters urge the court to frame the issue as follows: Did appellant wife assume the risk of injury by stepping into an overgrown flowerbed without knowing what was underneath?

A summary judgment determination in respondent sisters’ favor would be a determination that as a matter of law appellant wife did assume the risk of injury by stepping into the yard. Such a determination would require a determination that as a matter of law appellant wife had: (a) knowledge of the risk; (b) an appreciation of the risk; and (c) a choice to avoid the risk but voluntarily chose to take it. Andren, 465 N.W.2d at 104-05. But there is a genuine issue of material fact as to whether appellant wife had knowledge of the risk. Appellant alleges that she did not see the hole, and if she did not see the hole, then she did not have knowledge of the risk. Accordingly, the district court was correct, summary judgment that appellant assumed the risk of being injured from stepping in the hole is not appropriate.

B.Open and Obvious Danger

The district court was asked to grant summary judgment on the ground that there was no duty to warn appellant wife of the hole because the hole was an open and obvious danger. Appellants argue that summary judgment on this ground is improper because the hole was concealed.

The Minnesota Supreme Court has adopted section 343A of the Restatement (Second) of Torts, which provides that a possessor of land is not liable to invitees for physical harm that is caused by open and obvious dangers. Peterson v. W.T. Rawleigh Co., 274 Minn. 495, 496-97, 144 N.W.2d 555, 557 (1966) (quoting Restatement (Second) of Torts § 343A (1965)). The rationale underlying this rule is that “no one needs notice of what he knows or reasonably may be expected to know.” Louis, 636 N.W.2d at 322 (quotation omitted). The test for whether a hazardous condition is open and obvious is not whether the injured party actually saw the danger, but whether it was in fact visible. Martinez v. Minnesota Zoological Gardens, 526 N.W.2d 416, 418-19 (Minn.App.1995), review denied (Minn. Mar. 29,1995).

Here, appellant wife and at least two other people testified that the hole was not clearly visible. Because the question is whether the danger is visible, this testimony establishes a factual dispute and prevents a summary judgment determination that the hole posed an open and obvious danger.

C. Causation

Respondent sisters moved for a summary judgment determination that there is not evidence that the sisters dug the hole at issue and that they therefore were not liable for appellant wife’s injuries. Appellants argue that the evidence indicates that respondent sisters, or other family members acting on their behalf, did in fact dig the hole into which she fell. Whether the sisters or their family members dug the particular hole that caused appellant wife to fall is a genuine issue of material fact. Accordingly, a summary judgment determination that the sisters did not cause appellant wife’s injuries is not appropriate.

D. Trespass

Respondent sisters moved for summary judgment on the ground that appellant wife was a trespasser to whom no duty was owed. However, since the record indicates that appellant wife was on the property with the consent of the owner and was therefore not a trespasser, this claim has no factual basis in the record. Summary judgment against appellants would not have been appropriate on this ground.

DECISION

Because section 386 of the Restatement (Second) of Torts allows appellants to pursue a direct action against the sisters, and because the sisters are not entitled to summary judgment on any of the other asserted grounds, we reverse the district court and remand this case for further proceedings.

Reversed and remanded.

      . We note that the issue in Louis v. Louis was whether a landowner owed a legal duty to someone who was injured on the landowner's property. Louis v. Louis, 636 N.W.2d 314 (Minn.2001). While Louis did discuss liability of landowners and possessors, Louis did not say that only owners and possessors owe a legal duty to entrants and licensees onto a particular piece of property. Id.

      . The court in Dishington adopted the rule embodied in section 384 of the first Restatement of Torts. That rule is the same as the rule in section 383 of the Restatement (Second) of Torts.


author: GILBERTSON, Chief Justice. KONENKAMP, Justice SABERS, Justice

text:
    2003 SD 112
    Janet FRITZMEIER, Jay Fritzmeier, Chuck Colmenero, Todd Lundgren, Jack Rentschler, Julie Rentschler, Don Rose, Jean Rose, Mike Wilbur, Steve Brashears and Randy Heaton, Plaintiffs and Appellees, v. KRAUSE GENTLE CORPORATION, Defendant and Appellant, and Blimpie Midwest, L.L.C., Defendant.
    Nos. 22307, 22308.
    Supreme Court of South Dakota.
    Argued May 29, 2003.
    Decided Sept. 10, 2003.
    Rehearing Denied Oct. 21, 2003.

      Rick Johnson of Johnson, Eklund, Nicholson, & Peterson, Gregory, SD, and Thomas J. Nicholson of Johnson, Eklund, Nicholson, & Peterson Sioux Falls, SD, for plaintiffs and appellees.
    Steven W. Sanford of Cadwell, Sanford, Deibert & Garry, Sioux Falls, SD, and Michael A. Dee of Pingel & Templer, P.C., West Des Moines, IA, for defendant and appellant Krause Gentle Corporation.
   GILBERTSON, Chief Justice.

[¶ 1.] This appeal is the result of a jury trial in which eight plaintiffs were awarded compensatory and punitive damages for their allegations of fraudulent misrepresentations against Krause Gentle Corporation (Krause Gentle) which they allege induced them to buy Blimpie Sub franchises. We affirm on all issues except for prejudgment interest.

FACTS AND PROCEDURE

[¶ 2.] Starting in 1993, Krause Gentle of Des Moines, Iowa entered into a series of “Subfranchise Agreements” with Blim-pie International, which entailed the sharing of franchise fees between Krause Gentle and Blimpie International. As part of this business arrangement, Krause Gentle was given the power to engage in “the selling, opening and servicing of all Blim-pie Restaurants” in portions of Iowa and eastern South Dakota. Blimpie Midwest, an L.L.C., was used for operational purposes by Krause Gentle and was primarily owned by William Krause and his family.

[¶ 3.] By 1995, Krause Gentle owned and operated several Blimpie restaurants out of its Kum & Go stores. Additionally, Krause Gentle hired Steve Abbott and Todd Byers as area developers to sell Blimpie franchises to others. Although counsel for Krause Gentle argued that Abbott did not represent Krause Gentle, the jury rejected this and found that Abbott was employed by Krause Gentle. Accordingly, Blimpie Midwest is not a party to this appeal. Eventually, the franchises were sold to eight separate newly formed or existing corporations, consisting of the ten individual plaintiffs in this case. These eight corporations operated nine Blimpie restaurants in South Dakota and Iowa. These franchises had to pay a franchise fee of $18,000 plus make a capital investment for equipment and supplies for an investment averaging in excess of $100,000.

[¶ 4.] The Plaintiffs claim that Abbott and Byers held themselves out as experts concerning the Blimpie business. Although Byers did not testify at trial, Abbott was called as a witness for Krause Gentle and denied the allegations against him. Moreover, the Plaintiffs allege that Abbott and Byers made several fraudulent representations to induce them to buy the Blimpie franchises. Specifically, the Plaintiffs allege that they were told that they could expect “immediate cash flow” from their Blimpie franchises; Defendants approved Plaintiffs’ business plans knowing that Plaintiffs’ projected sales were significantly higher than could be realistically expected; Defendants told Plaintiffs that Blimpie International was in the process of instituting a national advertising program similar to Subway’s and that sales would dramatically increase; Krause Gentle would provide its expertise to enable the businesses to be successful; and some Plaintiffs were directly given the gross sales and net profit figures they could expect.

[¶ 5.] Each of the nine Blimpie franchises lost money and ended up going out of business. Soon thereafter, the Plaintiffs commenced this action against Krause Gentle and Blimpie Midwest, alleging fraud and deceit. The actions were brought in their individual names, not in the names of the corporations. Although Krause Gentle moved to sever the claims against it, the trial court denied its motion. Following a five-week jury trial, the jury returned an 89-page special verdict form against Krause Gentle, awarding compensatory damages to eight of the ten Plaintiffs in an amount totaling $747,115.00, and punitive damages to some of the Plaintiffs in the amount totaling $995,000.

[¶ 6.] Krause Gentle appeals the jury’s verdict. It raises the following issues for review:

1. Whether the trial court abused its discretion when it refused to grant Defendants’ motion to sever.
2. Whether there was sufficient evidence at trial to sustain the jury’s finding of fraud on the part of Krause Gentle.
3. Whether the jury’s determination of damages should be sustained when Plaintiffs brought their claims in their individual capacities.
4. Whether the jury instruction given at trial amounted to prejudicial error.
5. Whether the jury’s awards of punitive damages were inappropriate and excessive.
6. Whether the trial court applied the wrong prejudgment interest rate to the Iowa Plaintiffs judgment against Krause Gentle.

[¶ 7.] Plaintiffs raise the following issue on cross-appeal:

1. Whether the trial court abused its discretion when it ruled that Plaintiff Denton Olson’s testimony was inadmissible hearsay and granted Defendants’ motion to dismiss his claim.

STANDARD OF REVIEW

[¶ 8.] According to Landstrom v. Shaver, 1997 SD 25, ¶ 24, 561 N.W.2d 1, 5, SDCL 15-6-42(b) “allows the trial court the discretion to order separate trials in proper circumstances ‘in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy[.]’ ” (quoting Sybesma v. Sybesma, 534 N.W.2d 355, 360 (S.D.1995)).

[¶ 9.] “When reviewing the sufficiency of the evidence, we accept all evidence favorable to the verdict, and reasonable inferences therefrom, without weighing credibility or resolving conflicts.” Maryott v. First Nat. Bank of Eden, 2001 SD 43, ¶ 21, 624 N.W.2d 96, 104 (citing State v. Buchholz, 1999 SD 110, ¶ 33, 598 N.W.2d 899, 905). If there is evidence if believed by the fact finder that supports the jury’s verdict, then we will affirm. Id.

[¶ 10.] The question of whether a party has standing to maintain an action is a question of law reviewable by this Court de novo. Winter Brothers Underground Inc. v. City of Beresford, 2002 SD 117, ¶ 13, 652 N.W.2d 99, 102.

[¶ 11.] According to Veeder v. Kennedy, 1999 SD 23, ¶ 32, 589 N.W.2d 610, 618, we review jury instructions under the following:

Under our standard of review, we construe jury instructions as a whole to learn if they provided a full and correct statement of the law. Sommervold v. Grevlos, 518 N.W.2d 733, 739 (S.D.1994); Frazier v. Norton, 334 N.W.2d 865, 870 (S.D.1983); Mueller v. Mueller, 88 S.D. 446, 450, 221 N.W.2d 39, 42 (1974). Misleading, conflicting, or confusing instructions create reversible error. Schaffer v. Edward D. Jones & Co., (Schaffer II) 1996 SD 94, ¶ 19, 552 N.W.2d 801, 808; Wallahan v. Black Hills Elec. Co-op., Inc., 523 N.W.2d 417, 423 (S.D.1994). Nonetheless, an appellant must show not only that a particular instruction was erroneous, but also that it was prejudicial, meaning the jury probably would have returned a different verdict if the faulty instruction had not been given. LDL Cattle Co., Inc. v. Guetter, 1996 SD 22, ¶ 32, 544 N.W.2d 523, 530; Sybesma, 534 N.W.2d at 359 (quoting Chambers v. Dakotah Charter, Inc., 488 N.W.2d 63, 64 (S.D.1992)).

(citing Davis v. Knippling, 1998 SD 31, ¶ 4, 576 N.W.2d 525, 526-7).

[¶ 12.] The determination of an applicable statutory interest rate is a question of law. See Wharf Resources (USA) Inc. v. Farrier, 1996 SD 110, ¶ 43, 552 N.W.2d 610, 618. Therefore, the review is de novo.

[¶ 13.] We review an award of punitive damages under the abuse of discretion standard. Leisinger v. Jacobson, 2002 SD 108, ¶ 9, 651 N.W.2d 693, 696. We consider the following question: “[Is] the verdict ... so large as to clearly indicate that it must have been given under the influence of passion or prejudice ... [?[?] ” Id. (citing Grynberg v. Citation Oil & Gas Corp., 1997 SD 121, ¶ 36, 573 N.W.2d 493, 504).

[¶ 14.] The trial court’s eviden-tiary rulings are presumed correct and will not be overturned absent an abuse of discretion. State v. Perovich, 2001 SD 96, ¶ 11, 632 N.W.2d 12, 15 (citing State v. Goodroad, 1997 SD 46, ¶ 9, 563 N.W.2d 126, 129). “The test is not whether we would have made the same ruling, but whether we believe a judicial mind, in view of the law and the circumstances, could have reasonably reached the same conclusion.” Goodroad, 1997 SD 46, ¶ 9, 563 N.W.2d at 129 (citing State v. Rufener, 392 N.W.2d 424, 426 (S.D.1986)). While the “ultimate decision to admit or not admit evidence is renewable under the ‘abuse of discretion’ standard, the court’s preliminary determination of whether the hearsay evidence is reliable will not be overturned unless it is clearly erroneous.” State v. Davi, 504 N.W.2d 844, 849 (S.D.1993) (quoting Matter of R.S.S., 474 N.W.2d 743, 749 (S.D.1991)).

ANALYSIS AND DECISION

[¶ 15.] 1. Whether the trial court abused its discretion when it refused to grant Defendants’ motion to sever.

[¶ 16.] Pursuant to SDCL 15-6-20(a), actions may be joined in certain circumstances. Specifically, this statute provides:

All persons may join in one action as plaintiffs if they assert any right to relief jointly, severally, or in the alternative in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all these persons will arise in the action. All persons may be joined in one action as defendants if there is asserted against them jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all defendants will arise in the action. A plaintiff or defendant need not be interested in obtaining or defending against all the relief demanded. Judgment may be given for one or more of the plaintiffs according to their respective rights to relief, and against one or more defendants according to their respective liabilities.

[¶ 17.] Krause Gentle argues that there is no common question of law or fact that binds all the Plaintiffs. Therefore, it contends that the trial court’s denial of Krause Gentle’s motion to sever deprived Krause Gentle of a fair trial. Plaintiffs argue that because all the franchises suffered from the lack of advertising, lack of sales, and advisors with no experience, the trial court did not abuse its discretion when it found that severing the trials would be a waste of judicial economy.

[¶ 18.] Defendants moved to sever the trials pursuant to SDCL 15-6-42(b), which provides:

The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy may order a separate trial of any claim, cross-claim, counterclaim, or third-party claim, or of any separate issue or of any number of claims, cross-claims, counterclaims, third-party claims, or issues, always preserving inviolate the right of trial by jury as declared by the state or federal Constitution or as given by a statute.

In Landstrom, 1997 SD 25, ¶28, 561 N.W.2d at 5, we articulated the test to determine whether a trial should be severed: “The mere possibility of some prejudice does not justify separate trials where such prejudice is not substantial and there are strong countervailing considerations of economy.” (citation omitted). Furthermore, we stated that the defendants had the burden of proof in establishing that they were prejudiced by the trial court’s refusal to sever. Id.

[¶ 19.] In Martinmaas v. Engelmann, 2000 SD 85, ¶ 42, 612 N.W.2d 600, 610, we held that the trial court did not abuse its discretion when it granted plaintiffs’ motion to consolidate their suits. In that case we noted that many of the witnesses would have given duplicate testimony, there were common questions of law and fact among the consolidated cases, and the alleged acts of liability were contemporaneous to each other. Id., ¶ 41.

[¶ 20.] As in Martinmaas and Land-strom, we find that in the case at hand, in view of the circumstances, the trial court did not abuse its discretion when it denied Defendants’ motion to sever. Krause Gentle cannot meet its burden in showing prejudice. The trial was nearly six weeks in length and eight individual trials would have taken months and would not have been an efficient use of judicial resources. Moreover, in Martinmaas we noted that “each plaintiffs testimony would have been admissible in the others’ cases ...” Id., ¶ 37. The same is true in this case. Because Krause Gentle denied making fraudulent representations to the Plaintiffs, its intent was at issue. Therefore, each of the Plaintiffs testimony would have been admissible in each other’s trials to prove Defendant’s intent. See Novak v. McEldowney, 2002 SD 162, ¶ 13, 655 N.W.2d 909, 914; see also SDCL 19-12-5.

[¶ 21.] It is significant to note that the jury awarded different amounts of compensatory and punitive damages to each of the remaining eight Plaintiffs. After it was instructed that each Plaintiff had to prove his or her case separately, the jury found a different basis of fraud for each Plaintiff. Their verdict shows that they were able to sort and weigh the evidence as it pertained to each Plaintiff. This is directly in contrast to Krause Gentle’s contention that one trial with eight Plaintiffs was confusing and full of chaos.

[¶ 22.] 2. Whether there was sufficient evidence at trial to sustain the jury’s finding of fraud on the part of Krause Gentle.

[¶ 23.] With respect to eight Plaintiffs in this case, the jury found the following: Krause Gentle made the fraudulent representation that national advertising would be implemented “like Subway” upon reaching the 1,500 store national level to Plaintiffs Janet Fritzmeier, Jack Rentschler, Chuck Colmenero, and Randy Heaton. The jury found that Krause Gentle fraudulently promised operational support to Plaintiffs Janet Fritzmeier, Jack Rentschler, Chuck Colmenero, Don Rose, Randy Heaton and Todd Lundgren. The jury found that Krause Gentle made the fraudulent representation that it would provide reasonable assistance in choosing a store location to Plaintiffs Jack Rentschler, Mike Wilbur and Steve Brashears. Finally, the jury found that Krause Gentle made the fraudulent representation that it was knowledgeable in the operation of fast food restaurants to Plaintiff Todd Lund-gren.

[¶ 24.] Krause Gentle argues that under South Dakota and Iowa law, an essential element of fraud claims is the existence of proof that Defendant did not intend to perform the claimed promises when they were made. Furthermore, it claims that the Plaintiffs did not provide any evidence of a deceitful intent on the part of Krause Gentle. For support, it points to Famous Brands, Inc. v. David Sherman Corp., 814 F.2d 517 (8th Cir. 1986). In that case, the Eighth Circuit Court of Appeals held that under South Dakota law “to avoid summary judgment [plaintiff] must offer some evidence of [defendant’s] deceitful intent when [defendant] made its alleged promise.” Id. at 522.

[¶ 25.] However, Famous Brands dealt with a motion for summary judgment on the issue of deceit. The court in that case found that there were no material issues in dispute concerning the issue of deceit and therefore, summary judgment as to the issue of deceit was properly granted. In the instant case, all of Plaintiffs’ evidence went before the jury, and the jury was properly instructed on the Plaintiffs’ burden of proving the elements of fraud and deceit. The Plaintiffs testified as to the alleged representations made by Krause Gentle’s agents. Although some of the alleged promises were for future events, there was evidence to allow the jury to find the superior knowledge claimed by Krause Gentle as to the Plaintiffs, who mostly had no experience with running a franchise or fast-food restaurant, was the basis for a finding of fraud.

[¶ 26.] In Sporleder v. Van Liere, 1997 SD 110, ¶ 13, 569 N.W.2d 8, 11, we stated that “[questions of fraud and deceit are generally questions of fact and as such are to be determined by the jury.” Additionally, in that case we noted that it was the jury’s duty to judge the credibility of the witnesses. Id., ¶ 14, 569 N.W.2d at 12. As in Sporleder and the case at hand, we find that “[t]he jury’s finding that there [was] a promise and that [defendant] never meant to keep the promise is enough to sustain a verdict for fraud and deceit in this case.” Id.

[¶ 27.] In Commercial Property Investments v. Quality Inns, 938 F.2d 870 (8th Cir.1991), the Eighth Circuit Court decided a factually similar case. Plaintiff, who entered into a franchise agreement with defendant, brought a cause of action for fraud. He alleged that several fraudulent misrepresentations and omissions were made to him in order to induce him to enter into the franchise agreement to own and operate a Comfort Inn hotel. Id. at 872. After the district court granted defendant’s motion for summary judgment, the Eighth Circuit reversed and ruled that defendant should not have been granted its motion for summary judgment on plaintiffs fraud claim. Id. at 875. The court found that the plaintiff had relied on defendant’s expertise regarding the viability of a Comfort Inn franchise to plaintiff. Id. at 877.

[¶28.] In the present case, Plaintiffs relied on the expertise of Abbott and Byers. The Plaintiffs were led to believe that Defendants had “superior knowledge” of the fast-food restaurant and would get operational support to make their restaurants profitable. They were told that they could expect immediate cash flows and national advertising. Additionally, they were given sales projections that were not reasonable. Even Krause Gentle’s own Blim-pie franchises were not generating the profits that the Plaintiffs were told that they could expect their own restaurants to generate. Krause Gentle claims that in each instance, the jury found that Krause Gentle made promises of future performance, the promise was performed, just not to Plaintiffs’ satisfaction. However, the jury was properly instructed on the elements of fraud and deceit, and we will not disturb its verdict, absent a showing of prejudice. See Stockmen’s Livestock v. Norwest Bank of Sioux City, 135 F.3d 1236, 1244 (8thCir.1998) (citing Weiszhaar Farms, Inc. v. Tobin, 522 N.W.2d 484, 492 (S.D.1994) (stating that a jury’s verdict should receive “all reasonable inferences that fairly can be drawn from the evidence”)).

[¶ 29.] Krause Gentle next argues that the Plaintiffs each signed a franchise agreement that contained an express acknowledgment that they had been made no representations as to sales, profits, revenues, and so forth. Therefore, it asserts that the Plaintiffs are precluded from alleging that Krause Gentle made fraudulent misrepresentations to them.

[¶ 30.] Initially, we note that the integration clause was part of the franchise contract drafted by Blimpie International, Inc., who was not a party to the lawsuit. In other words, Krause was not a party protected by the terms of the franchise agreement, which they now seek to use as shield from liability.

[¶ 31.] Aside from the fact that Krause Gentle was not a party to the signed contract, it still does not prevail. In Schwaiger v. Mitchell Radiology Associates, P.C., 2002 SD 97, ¶ 11, 652 N.W.2d 372, 377, we stated that “if a written contract is in direct contradiction of an oral representation, reliance on that oral representation, as a matter of law, is unjustified.” However, the facts of the instant case are distinguishable from Schwaiger.

[¶32.] In Schwaiger, we affirmed the trial court’s grant of summary judgment. In so doing, we held that the radiologist’s claims that he was orally promised to be made a full partner were superseded by the written, signed employment contract. Id., ¶ 12, 652 N.W.2d at 377. We noted that there were no specific material facts which indicated plaintiff was fraudulently induced to enter into the initial employment contract. Id., ¶ 15, 652 N.W.2d at 379. It was in essence a freely negotiated contract between doctors who were contracting equals.

[¶ 33.] However, in the case at hand, the Plaintiffs, most who had little or no experience in running a business, each signed a non-negotiable 25-page contract after they received Blimpie literature which contained representations such as “immediate cash flow” and “no restaurant experience necessary.” See Commercial Property, 938 F.2d at 875 (denying summary judgment to defendant by stating that the “oral representations occurred at the outset of the sale, creating a fraudulent foundation for the subsequent dealings”). The Plaintiffs claim that these representations contributed to induce Plaintiffs to sign the franchise agreements. Krause Gentle cannot be allowed to use the non-negotiable written contract as a shield from liability. Furthermore, SDCL 37-5A-86 contemplates franchise cases such as this:

Any condition, stipulation or provision purporting to waive compliance with any provision of this chapter or any rule or order thereunder is void. Any acknowl-edgement provision, disclaimer or integration clause or a provision having a similar effect in a franchise agreement does not negate or act to remove from judicial review any statement, misrepresentation or action that would violate this chapter or a rule or order under this chapter.

[¶ 34.] 3. Whether the jury’s determination of damages should be sustained when Plaintiffs brought their claims in their individual capacity.

[¶ 35.] Under this issue, Krause Gentle argues that Plaintiffs’ recovery for claimed corporate losses is contrary to settled South Dakota and Iowa law. Moreover, it claims that under our holding in Landstrom, 1997 SD 25, 561 N.W.2d 1, a shareholder cannot recover personal damages suffered by the corporation. We find Landstrom clearly distinguishable from the facts of this case.

[¶ 36.] In Landstrom, we adopted the general rule that “an action to redress injuries to a corporation cannot be maintained by a shareholder on an individual basis but must be brought derivatively.” Id. at ¶ 54, 561 N.W.2d at 12 (citing Crocker v. Fed. Deposit Ins. Corp., 826 F.2d 347, 349 (5th Cir.1987); cert denied, 485 U.S. 905, 108 S.Ct. 1075, 99 L.Ed.2d 235 (1988); Meyerson v. Coopers & Lybrand, 233 Neb. 758, 448 N.W.2d 129, 133 (1989); Engstrand v. West Des Moines State Bank, 516 N.W.2d 797, 799 (Iowa 1994)). We further stated an exception to this general rule. Specifically, we recognized that a shareholder may maintain an individual action, he or she must “establish a ‘special injury’ which is separate and distinct from that of other shareholders.” Landstrom, ¶ 54, 561 N.W.2d at 12.

[¶ 37.] However, unlike the present case, in Landstrom, the claims were brought by a minority shareholder against the remaining shareholders in Black Hills Jewelry Manufacturing. Id. ¶ 1, 561 N.W.2d at 2-3. We held that by adopting the majority rule that recovery should be made by the corporation “ensures that all of the corporate participants-stockholders, trade creditors, employees and others will recover according to them contractual and statutory obligations.” Id. ¶ 62, 561 N.W.2d at 14 (citations omitted). Clearly, this reasoning does not apply here. The Plaintiffs operated their Blimpie’s restaurants through wholly-owned corporations. The Plaintiff shareholders were the corporations, so there is no distinction between the two. Further, the damages to the Plaintiffs and Plaintiffs’ corporations are identical. There is no danger of duplication of recovery.

[¶ 38.] The Plaintiffs argue that in the special verdict form the jury specifically found that each Plaintiff purchased a Blim-pie franchise in his/her personal capacity rather than as a corporate agent. They further assert that it is they who were ultimately cheated and defrauded into purchasing the franchises. Most of the corporations were not yet formed when the alleged fraudulent misrepresentations were made to the individual Plaintiffs.

[¶ 39.] Krause Gentle cites to Tri-State Refining v. Apaloosa Company, 431 N.W.2d 311, 313 (S.D.1988), for the proposition that when a person transfers his or her business rights and interest to a corporation, the corporation is the proper party to bring a fraud action. In that case, we found that plaintiff corporation was the real party in interest because the owner of the business at the time the cause of action arose transferred his rights and interests in his business to the corporation. Id. at 313. We held that because defendant did not object to this during trial, the issue was waived for appeal. Id. We noted in Tri-State that the test for deciding whether the proper party brought suit is if the “ ‘one who brings the suit has a real, actual, material, or substantial interest in the subject matter of the action.’ ” Id. (citing Vander Vorste v. Northwestern National Bank, 81 S.D. 566, 572, 138 N.W.2d 411, 414 (1965)).

[¶ 40.] The Plaintiffs testified about the amount of money they personally lost after investing in the Blimpie Franchise. Although Plaintiffs’ damage expert, Jerome Sherman, testified at trial that he calculated damages based upon corporate financial statements and tax returns, the corporations were wholly owned by the Plaintiffs. Additionally many of the corporations were not formed at the time of the fraudulent misrepresentations.

[¶ 41.] 4. Whether the jury instruction given at trial amounted to prejudicial error.

[¶ 42.] Krause Gentle argues that the trial court prejudicially erred in instructing the jury regarding fraud and deceit under Chapter 21-10, franchise fraud under Chapter 37-5A, actual contract fraud under SDCL 53-4-5 and constructive fraud under SDCL 53-4-6. It alleges that instructing the jury to the elements of both deceit and constructive fraud were confusing as to the proper standard of fraud to be applied.

[¶ 43.] After reviewing the record, Krause Gentle was the party that requested a jury instruction for actual and constructive fraud. In this appeal, Krause Gentle claims it mistakenly made this request but cured it by arguing later to the trial court that it should not be given. However, Krause Gentle did not object to its own actual and constructive fraud instruction based on the reasons it now argues in this appeal.

[¶ 44.] It is a well-settled rule of law that “[w]hen a party’s objection at trial is not the same as its objection on appeal, the issue of the improper jury instruction is not preserved for our review.” Grynberg, 1997 SD 121, ¶ 29, 573 N.W.2d at 502. We therefore find no prejudicial error under this issue.

[¶ 45.] 5. Whether the jury’s awards of punitive damages were inappropriate and excessive.

[¶ 46.] Plaintiffs Fritzmeier, Col-menero, Heaton were each awarded punitive damages of $165,000, Plaintiff Lund-gren was awarded punitive damages of $200,000, and Plaintiff Rentschler was awarded punitive damages of $300,000. Three of the Plaintiffs did not receive any punitive damages. Krause Gentle argues this judgment cannot stand. Alternatively, it argues that amount of punitive damages should be the subject of a remittitur and that no more than 50 percent of actual damages would be appropriate.

[¶ 47.] In Leisinger, we set out a five-factor test in determining whether punitive damages are appropriate or excessive. 2002 SD 108, ¶ 19, 651 N.W.2d at 700 (citing Grynberg, 1997 SD 121, ¶ 37, 573 N.W.2d at 504). We consider the following:

(1) the amount allowed in compensatory damages, (2) the nature and enormity of the wrong, (3) the intent of the wrongdoer, (4) the wrongdoer’s financial condition, and (5) all of the circumstances attendant to the wrongdoer’s actions.

Id.

[¶48.] The first factor is the amount allowed in compensatory damages. We have stated that there must be a “reasonable relationship between the punitive damages and compensatory damages but that there is no ‘precise mathematical ratio between’ the two.” Leisinger, 2002 SD 108, ¶ 20, 651 N.W.2d at 700. Furthermore, in Roth, 2003 SD 80, ¶ 58, 667 N.W.2d at 668 we cited to Campbell, in which the Supreme Court stated that as a general proposition, “few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” 123 S.Ct. at 1524. However, the Court went on to state that the amount of the award should be based on the individual facts and circumstances of the case. Id.

[¶ 49.] In the case at hand, the lowest punitive damage award is 1.31 times compensatory damages. The highest ratio of punitive damages to actual damages was for Plaintiff Rentschler. This Plaintiff was awarded $94,075 in compensatory damages and $300,000 in punitive damages, which amounts to punitive damages of 3.19 times the actual damages. In other cases handed down by this Court, we reversed punitive damages where the ratio was much higher. See e.g. Leisinger, 2002 SD 108, 651 N.W.2d 693 (holding that the punitive damages award should be reduced from $120,000 to $25,000); Grynberg, 1997 SD 121, 573 N.W.2d 493 (reducing punitive damages from $4,800,000 to $1,000,000); Roth, 2003 SD 80, 667 N.W.2d 651 (reversing and remanding punitive damages for a proper calculation under the Supreme Court guideposts).

[¶ 50.] Our review does not end here; instead we examine the second factor, the nature and enormity of the wrong. Along with this factor, the Supreme Court applies the guidepost of “disparity between the harm (or potential harm) suffered by the plaintiff and the punitive damages award.” Under this guidepost, the Campbell Court stated that “courts must ensure that the measure of punishment is both reasonable and proportionate to the amount of harm to the plaintiff and to the general damages recovered.” Campbell at 1524. We emphasized in Roth, (see conference opinion), that the defendant’s actions as it related to potential harm that may be inflicted on not only the present victim, but also other victims if it was not deterred was an appropriate consideration. Roth, 2003 SD 80, ¶ 62, 667 N.W.2d at 668. (citing Pulla v. Amoco Oil Co., 72 F.3d 648, 659-60 (8thCir.1995) (additional citations omitted)).

[¶ 51.] In this case, the Plaintiffs sought to better their financial conditions by investing in Blimpies’ franchises. They were fraudulently induced into investing large amounts of money into their fast food restaurants and lost money from the outset. In the case of the Fritzmeiers, they lost the family farm that Janet had inherited from her parents. Based on the facts of the case, the Plaintiffs suffered great financial hardship as a result of Krause Gentle’s actions. Not only were the Plaintiffs harmed, but the possibility of others being fraudulently induced into investing in the Blimpie’s franchise was real.

[¶ 52.] The third factor is the intent of the wrong doer. We stated in Veeder, 1999 SD 23, ¶ 54, 589 N.W.2d at 621:

From intent, we determine ‘the degree of reprehensibility of the defendant’s conduct,’ which is viewed as probably the most important indication of the reasonableness of the punitive damage award.

(quoting Schaffer II, 1996 SD 94, ¶ 32, 552 N.W.2d at 812 (citation omitted)).

[¶ 53.] Furthermore, in Veeder, we stated that “[tjrickery and deceit are more reprehensible than negligence.” 1999 SD 23, ¶ 54, 589 N.W.2d at 621. Here, the jury found that Krause Gentle intentionally made false representations to the Plaintiffs in order to get them to invest their money for the financial gain of Krause Gentle. Promises such as “immediate cash flow” and expertise in helping the restaurants become a success were made to the Plaintiffs. We therefore find that this factor supports the jury’s award of punitive damages.

[¶ 54.] The fourth factor is consideration of the wrongdoer’s financial condition. We look at both net income and net worth. See Grynberg, 1997 SD 121, ¶ 76, 573 N.W.2d at 513. Plaintiffs offered evidence at trial of Krause Gentle’s financial statements for the years 1999 and 2000. In 1999 Krause Gentle had $3,804,000 in net income and $3,164,000 in 2000. Net worth for the two years was $21,000,000 in 1999 and $18,000,000 in 2000. Punitive damages amounted to $995,000. In Leis-inger, we reiterated that “[p]unitive damages must not be so oppressive or so large as to shock the sense of fair-minded persons.” 2002 SD 108, ¶ 23, 651 N.W.2d at 701 (citation omitted). An award of 5.5 percent of Krause Gentle’s net worth in 2000 is not so high that it shocks the senses.

[¶ 55.] The final factor is consideration of all circumstances attendant to the wrongdoer’s actions. In Schaffer II, we focused on the availability of other sanctions and whether a less drastic remedy could achieve the goal of deterring future misconduct. 1996 SD 94, ¶ 42, 552 N.W.2d at 814. Krause Gentle does not argue on appeal that any other sanctions are available and whether a less drastic remedy could be used.

[¶56.] After a review of all the relevant factors, we hold that the punitive damages awarded to Plaintiffs are justified.

[¶ 57.] 6. Whether the trial court applied the wrong prejudgment interest rate to the Iowa Plaintiffs judgment against Krause Gentle.

[¶ 58.] Krause Gentle asserts that the trial court applied the wrong prejudgment interest rate to Iowa Plaintiffs’ award of compensatory damages. The Iowa Plaintiffs in this case are Wilbur, Brashears, Heaton and Lundgren. Instead of applying the interest rate in effect on the date of entry of judgment, it contends that the trial court erroneously applied the interest rate in effect at the time the Plaintiffs filed their original complaint.

[¶ 59.] According to Iowa Code Section 668.13(1), prejudgment interest accrues “from the date of the commencement of the action.” Under 668.13(3), the rate of interest is the rate in effect on the date of judgment, plus two percent.

[¶ 60.] Iowa’s Plaintiffs’ lawsuits were filed on May 15, 1998. Judgment against Defendant was entered on November 20, 2001. The last auction of fifty-two week treasury bills prior to the date of judgment entry was 3.481 percent. Based on that percentage, the correct prejudgment interest rate that should have been applied was 5.481 percent. Apparently erroneously using the last auction of fifty-two week treasury bills immediately prior to May 14, 1998, the trial court applied the rate of 7.407 percent (5.407 percent plus two percent).

[1Í 61.] We, therefore, reverse and remand on the issue of prejudgment interest.

Plaintiffs’ cross appeal.

[¶ 62.] 1. Whether the trial court abused its discretion when it ruled that Plaintiff Denton Olson’s testimony was inadmissible hearsay and granted Defendants’ motion to dismiss his claim.

[¶ 63.] Denton Olson made an offer of proof at trial concerning representations allegedly made to him in Rock Rapids, Iowa. It is alleged that Denton Olson’s brother, Russell Olson, who was president of a bank holding company for a banking company that was owned by William Krause and who was also a member of the Board of Directors of Krause Gentle, told Denton that he should make an investment in a Blimpie franchise that Russell had recently purchased. Russell allegedly told Denton that they could split profits of at least $40,000 if Olson invested in the Blim-pie Franchise that Russell had just purchased. Denton claims Steve Abbott was sitting in on the meeting and never expressed disagreement as to what Russell told Denton.

[¶ 64.] The trial court found the testimony hearsay and ultimately dismissed Denton’s claim for lack of other admissible evidence to support it. Denton argues that this was an abuse of discretion and that Denton’s testimony concerning what his brother allegedly told him should have been admitted at trial because Russell was an agent of Krause Gentle and the statements were made in the presence of Steve Abbott, another Krause Gentle Agent.

[¶ 65.] We agree that the statements at issue can, under certain circumstances and upon proper foundation, be admitted as non-hearsay admissions (i.e. a statement of an agent concerning the matter within the scope of the agency see SDCL 19-16-3(4), Rule 801(d)(2)(D); and nonverbal conduct intended as an assertion by such an agent, see SDCL 19-16-3(2), Rule 801(d)(2)(B)). However, we need not address the admissibility of the statements under these rules because Olson failed to establish prejudice. As we have often observed, “[a]n eviden-tiary ruling will not be overturned unless error is ‘demonstrated ... [and] shown to be prejudicial error.’ Error is prejudicial when, ‘in all probability ... [it] produced some effect upon the final result and affected rights of the party assigning it.’ ” Novak, 2002 SD 162, ¶ 7, 655 N.W.2d at 912 (citations omitted). Here, Olson failed to establish prejudice because, apart from the trial court’s evidentiary ruling, he failed to establish his cause of action by introducing another requisite element of a monetary loss or damage. Because the trial court also relied upon this failure to establish a claim, we decline to review the hearsay issue.

[¶ 66.] ZINTER and MEIERHENRY, Justices, concur.

[¶ 67.] KONENKAMP, Justice, concurs in part and concurs specially in part.

[¶ 68.] SABERS, Justice, concurs specially.

KONENKAMP, Justice

(concurring in part and concurring specially in part).

[¶ 69.] I join the majority opinion on Issues 1 through 6. I join Justice Sabers’ special concurrence on the cross-appeal issue.

SABERS, Justice

(concurring specially).

[¶ 70.] I concur on Issues 1 through 6 and concur specially on Issue 7.

[II71.] SDCL 19-16-3(2) (Federal Rule of Evidence 801(d)(2)(B)) provides in part:

A statement is not hearsay if it is offered against a party and is ...
(2) a statement of which he has manifested his adoption or belief in its truth; or
(4) a statement by his agent or servant concerning a matter within the scope of his agency or employment, made during the existence of the relationship[.]

(Emphasis supplied.)

[¶ 72.] The commentary to FRE 801(d)(2)(B) provides in part:

Under established principles an admission may be made by adopting or acquiescing in the statement of another ... [a]doption or acquiescence may be manifested in any appropriate manner. When silence is relied upon, the theory is that the person would, under the circumstances, protest the statement made in his presence, if untrue. The decision in each case calls for an evaluation in terms of probable human behavior.

(Emphasis supplied.) It is not necessary that the out-of-court statement be against the declarant’s interest at the time it is made. The statement must be adverse to the party’s case at the time of trial and be offered against the party at trial.

Any prior statement of a party is admissible if it is offered against the party at trial. The test is whether the statement is being offered at trial for a purpose that is relevant to the lawsuit. Personal knowledge of the matter admitted is not required, nor is mental capacity. The admission can be oral or written, or nonverbal conduct if intended as an assertion ... [admissions are substantive evidence, and no preliminary foundation by examining the declarant is necessary, the rule being specifically excepted from SDCL 19-14-25 (613(b)).

John W. Larson, South Dakota Evidence, 801.3 (2003 Supp).

[¶ 73.] If Russell Olson was being untruthful in telling his brother that Abbott said the franchise would bring in $40,000 in the first year, surely Abbot would have “protest[ed] the statement made in his presence.” There is nothing in the motion hearing transcript to indicate Abbott protested. However, in order to qualify as an admission, the person making the admission must be a party opponent. Abbott is not a party to this lawsuit and therefore his silence cannot amount to an admission under these facts.

[¶ 74.] Olson argues that Russell was on the board of directors for Krause Gentle and that he was acting as an agent for Krause Gentle when he made the statements regarding profitability. Olson asserts that Russell’s comments were not hearsay because they were an admission under FRE 801(d)(2)(D)(a statement by his agent or servant concerning a matter within the scope of his agency or employment, made during the existence of the relationship). This argument also fails because Olson offered no proof to the jury that Russell was an agent of Krause Gentle. Olson points out that the attorney for Krause Gentle conceded at the hearing on Olson’s offer of proof that Russell was on the board of directors. Olson contends that this amounts to a judicial admission and as such should be deemed a settled fact.

[¶ 75.] In Tunender v. Minnaert, we defined judicial admissions as statements “made in court by a person’s attorney for the purpose of being used as a substitute for the regular legal evidence of the facts at the trial.” Tunender v. Minnaert, 1997 SD 62, ¶ 24, 563 N.W.2d 849, 854 (quoting Black’s Law Dictionary 48 (6th ed 1990) (emphasis in the original)). While the attorney certainly acknowledged that Russell was on the board of directors, he made it abundantly clear’ that he had no intention of allowing his acknowledgement to serve as a substitute for the plaintiffs burden of proving the fact.

[¶ 76.] Olson points to no attempt on the record to present evidence of his brothers directorship before the jury. Indeed, other than his initial offer of proof, the briefs point to no place in this voluminous record where any evidence regarding Olsons claim was presented to the jury. Having failed to establish Russell’s agency, Olson’s claim that Russell’s sales pitch was a statement by Krause Gentle’s agent or servant is insufficient. The Court need not determine whether Olson has shown prejudicial error because Olson failed to lay the proper foundation to bring this conversation before the jury as an admission by party opponent. However, we continue to disagree with the majority opinion’s claim that establishing prejudice is a precondition to establishing error.

      . Average sales in all of the Krause Gentle Corporation Blimpie restaurants for 1994 was $10,384 per month. However, Abbott approved Plaintiffs’ business projections of two and three times that much for average monthly sales.

      . The jury did not find that all misrepresentations were made to all Plaintiffs. See ¶ 23 for the jury’s verdict.

      . Based upon a proposal by Krause Gentle, the trial court submitted an 89-page special verdict form to the jury which it completed as part of its task in arriving at its verdict.

      . See footnote 1.

      . See footnote 1.

      . Unlike the defendant in Roth v. Farner-Bocken Co., (2003 SD 80, 667 N.W.2d 651), Krause Gentle does not argue on appeal that the punitive damage award violates its constitutional due process rights.
      In State Farm Mutual Automobile Insurance Co., v. Campbell, the United States Supreme Court noted that there are "procedural and substantive constitutional limitations" on the award of punitive damages. U.S.-,- , 123 S.Ct. 1513, 1519, 155 L.Ed.2d 585 (2003). The Court reiterated its three guideposts earlier articulated in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996), that reviewing courts should consider when reviewing punitive damages. Id. at 1520. These guideposts are the following:
      1. the degree or reprehensibility of the defendant’s misconduct,
      2. the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award, and,
      3. the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.

        Campbell, 123 S.Ct. at 1520 (citing Gore, 517 U.S. at 575, 116 S.Ct. 1589). See also Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 121 S.Ct. 1678, 1687, 149 L.Ed.2d 674 (2001).

      . In Roth, the defendant had no reason to open anyone else’s mail without permission other than its ex-employee Roth. It did not even have access to other third party mail which il should not have received. However herein, the more Blimpie franchises Krause Gentle sold to members of the public, the more money it made.