author: PAGE, Justice. GILBERT, Justice ANDERSON, Russell A., Justice STRINGER, Justice

text:
    Linda D. HOUSTON, Petitioner, Appellant, v. INTERNATIONAL DATA TRANSFER CORP., Respondent, COMMISSIONER OF ECONOMIC SECURITY, Respondent.
    No. C1-00-2151.
    Supreme Court of Minnesota.
    June 13, 2002.

      Benjamin L. Weiss, Martha A. Eaves, Southern Minnesota Regional Legal Services, St. Paul, Charles H. Thomas, Man-kato, Relator’s Attorneys.
    Lee B. Nelson, Philip B. Byrne, Department of Economic Security, St. Paul, Respondents’ Attorneys.
   OPINION

PAGE, Justice.

Appellant Linda D. Houston was discharged from her employment with respondent International Data Transfer Corp. (International Data) on June 15, 2000. Houston applied for unemployment benefits with respondent Minnesota Department of Economic Security (MDES), but her application was denied because she had been discharged for employment misconduct. Houston appealed and a hearing was held before an unemployment law judge, who found that she had been discharged for reasons other than employment misconduct and, therefore, was qualified to receive unemployment benefits. International Data appealed to the representative of the Commissioner of MDES. The commissioner’s representative concluded that Houston had been discharged for employment misconduct as defined by Minn.Stat. § 268.095, subd. 6(a) (2000) and reversed the unemployment law judge’s decision. The court of appeals affirmed. We reverse.

Houston worked for International Data, a security alarm monitoring company, from March 22, 1999, through June 15, 2000. Her duties as an assistant shift supervisor included handling difficult calls from customers and managing five to seven employees during the third shift. According to the factual findings of the commissioner’s representative, a dealer from Northern Alarm telephoned International Data on June 13, 2000. The dealer identified himself, and indicated that he was calling about an alarm. Houston then asked the caller for his account number. After the caller told Houston that he did not remember his account number, Houston placed the caller on hold while she attempted to determine who had paged the caller. While the caller was on hold, Houston allegedly talked about the caller on the floor. Houston asked fellow employees whether anyone had heard of Glenno’s Pizza. After learning why the caller had been paged, Houston commented to an employee that the caller had given her the incorrect spelling for Glen-no’s Pizza.

Houston then went back on the line to the caller and thanked him for holding. Houston told the caller that he had been contacted because of a low-battery signal from an alarm. The caller indicated that he knew this and that he wanted the battery put on test until the next day. Houston then asked for a password. The caller provided a four-digit number, at which time Houston indicated that she was not showing a password on the caller’s account. The caller again identified his name as well as the company on whose behalf he was calling and Houston responded by saying, “Okay.” The caller became irate and yelled at Houston, “You guys gotta listen — gosh.” Houston responded by telling the caller that she was “listening to ten different things.” Referring to the duration of the test time, she asked the caller, “How long do you want?” The caller replied, “If you’d listen to one thing at a time.” Houston again asked, “Sir, what do you want? How long do you want this on test for?” The caller yelled, ‘Will you listen to a customer for God’s sake.” Houston asked again, “How long do you want this on test?” The caller responded by stating, “Ahh, for Christ’s sake, you don’t give a shit, do you? Ten o’clock tomorrow morning. God damn, if you’d listen to one person at a time, you wouldn’t get confused.” There was a silent pause and the caller said, “Hello?” Houston responded, “I’m still here.” The caller then yelled, “Jesus Christ.” Houston said, “Excuse me,” and said that she was still there. The caller rejoined, “I can be just as smart as you can, lady.” Houston asked, “Sir, do you want this on test or not?” The caller replied, “Are you getting lippy? What did I tell you to do with it?” Houston then said, “Look” and was interrupted by the caller who, in an irate tone said, “Don’t tell me look.” Houston waited on the line a moment and then hung up the telephone. International Data investigated the complaint from the caller and discharged Houston two days later on the basis that she had been rude to a customer.

After applying for unemployment benefits, Houston received notice that she was disqualified from receiving benefits because she had been discharged for employment misconduct, as defined by Minn.Stat. § 268.095, subd. 6(a). Houston appealed and a hearing before an unemployment law judge was held. At the hearing, Kayla Yates, a human resources manager at International- Data, testified that Houston had been through multiple training sessions prior to handling the telephone call in question. Houston’s training included classes about how to deal with angry customers, how to approach people in difficult situations, and how to deal with difficult people. Yates testified that Houston had an “excellent” and “sterling” history dealing with difficult customers. According to Yates, Houston had “the patience to handle difficult customer calls” and was courteous, helpful, and had always been pleasant on .the phone.

Yates explained, however, that rudeness to a caller, such as interrupting, talking over, or hanging up on a caller, is grounds for the employee’s immediate discharge under International Data’s disciplinary system. She also explained that, as part of their training, International Data’s employees are taught to use customer service words during periods of “dead air.” Yates then pointed out that Houston did several things during the telephone conversation that brought her conduct within the scope of the company’s disciplinary policy. Specifically, Houston (1) did not listen attentively to the caller, (2) talked about the caller on the floor, (3) talked over the caller “very rudely,” (4) talked aggressively to the caller, (5) allowed “dead air” while placing the caller’s account on test as opposed to using customer service words, and (6) hung up on the customer. Finally, Yates explained that, because of Houston’s behavior and International Data’s strict policies and procedure, Houston was discharged.

Houston’s account of the telephone conversation was consistent with what can be heard on the tape with one exception — she believed that the caller referred to her as a “dumb bitch” before she responded by stating “excuse me.” Houston stated that she was not trying to talk over the caller and was simply trying to get the information she needed to assist him. She testified that when she said “look,” she “wasn’t * * * being sarcastic or being smart,” but was “trying to say look, sir, if we can’t get anywhere, with him yelling and screaming like he was screaming.” Houston also stated that she hung up on the caller because she was trained that she did not have to accept a caller’s verbal abuse. Houston stated that after the call she reviewed the conversation with a shift supervisor, who told her that she did not need to worry because employees did not need to put up with such abuse.

The unemployment law judge concluded that Houston “did her best to help the [caller]” and that Houston’s hanging up on the caller was “an isolated incident which does not rise to the level of misconduct as defined in [Minn.Stat. § 268.095, subd. 6(a)].” Based on these conclusions, the unemployment law judge found that Houston was not disqualified from receiving benefits.

International Data appealed to the Commissioner of MDES. The commissioner’s representative found that Houston’s “duties included setting an exemplary example for others and also supporting and enforcing all company policies and procedures” and that Houston “was a supervisor and was knowledgeable of the employer’s policies and procedures * * * for handling difficult customers.” The representative found that Houston “did not follow the employer’s procedures with regard to handling the phone call * * * on June 13, 2000” and that she had “engaged in intentional conduct that disregarded] the standards of behavior which the employer had a. right to expect of [its] employees or negligent or indifferent conduct that demonstrate[ed] a substantial lack of concern for the employment.” Based on these findings, the commissioner’s representative concluded that Houston was disqualified from receiving unemployment benefits because she had been discharged for employment misconduct, as defined under Minn.Stat. § 268.095, subd. 6(a). Thus, the commissioner’s representative reversed the unemployment law judge’s decision.

Houston then appealed to the court of appeals, arguing that she did not commit misconduct, as defined in Tilseth v. Midwest Lumber Co., 295 Minn. 372, 374-75, 204 N.W.2d 644, 646 (1973). Rejecting this argument, the court of appeals concluded that, unlike Tilseth, the statutory definition of “employment misconduct” does not require a “wilful or wanton disregard of an employer’s interests” or a “deliberate violation or disregard of standards of behavior.” Instead, the court stated that the statutory definition requires only “intentional conduct * * * that disregards the standards of behavior that an employer has the right to expect of the employee.” Therefore, the court of appeals concluded that Tilseth is no longer good law as to the definition of employment misconduct. The court of appeals went on to affirm the decision of the commissioner’s representative. This appeal followed.

Houston makes the same arguments to this court that she made to the court of appeals. She contends that the definition of employment misconduct in Minn.Stat. § 268.095, subd. 6(a)(1) (2000), is ambiguous because the phrase “intentional conduct * * * that disregards the standards of behavior” is reasonably subject to more than one interpretation. Houston acknowledges that the phrase may be interpreted, as the court of appeals did, to mean intentional conduct, which may after the fact be determined to violate a standard of behavior “that an employer has a right to expect.” Yet, she argues that “it is equally, if not more, reasonable to interpret that language consistently with Tilseth, as requiring an intent to produce the result of violating such a standard.” In support of this argument, Houston relies on our rules of statutory construction, the terms of the statute, the argument that the statutory language was derived from Tilseth, the argument that changes to the definition of employment misconduct, which were made in 1997 and 1999 and have resulted in the current version of Minn.Stat. § 268.095, subd. 6(a), were intended to be technical and not substantive, and this court’s interpretation of similar language in other statutes, namely Minn.Stat. § 609.749 (2000) (setting forth the criminal offenses of harassment and stalking).

In response, International Data argues that the legislature expressly repudiated the Tilseth definition when it established section 268.095, subdivision 6(a)(1), as the exclusive definition of employment misconduct. See Minn.Stat. § 268.095, subd. 6(e) (2000). International Data further argues that the definition of employment misconduct set out in section 268.095, subdivision 6(a)(1), clearly and unambiguously provides that, for an employee’s conduct to constitute misconduct, only the conduct need be intentional, not the disregard itself. According to International Data, the definition does not require that the employee also intended to disregard the standards of behavior the employer has a right to expect. Thus, International Data contends that Houston was properly discharged for employment misconduct under section 268.095, subdivision 6(a)(1).

Before 1997, employment misconduct was undefined by statute. The unemployment compensation statutes provided merely that “discharge for misconduct” was a disqualifying condition for unemployment benefits. See Minn.Stat. § 268.09, subd. 1(b) (1996); Minn.Stat. § 268.09, subd. 1(1) (1971). In 1973, this court interpreted the term “misconduct” in Tilseth, 295 Minn, at 374-75, 204 N.W.2d at 646. The Tilseth definition of “misconduct” remained in place until the legislature statutorily defined the term, now referred to as “employment misconduct,” in 1997. See Act of Apr. 23, 1997, ch. 66, § 49,1997 Minn. Laws 357, 387 (codified at Minn.Stat. § 268.09, subd. 12 (Supp. 1997)). In 1999, the legislature amended the definition of employment misconduct to its current form, which we consider in this case:

Employment misconduct means:

(1)any intentional conduct, on the job or off the job, that disregards the standards of behavior that an employer has the right to expect of the employee or disregards the employee’s duties and obligations to the employer; or
(2)negligent or indifferent conduct, on the job or off the job, that demonstrates a substantial lack of concern for the employment.

Act of Apr. 27, 1999, ch. 107, § 44, 1999 Minn. Laws 378, 421 (codified at Minn. Stat. § 268.095, subd. 6(a)).

We review questions of statutory construction de novo. Hibbing Educ. Ass’n v. Public Employment Relations Bd., 369 N.W.2d 527, 529 (Minn.1985). “The object of all interpretation and construction of laws is to ascertain and effectuate the intention of the legislature. Every law shall be construed, if possible, to give effect to all its provisions.” Minn. Stat. § 645.16 (2000); Boutin v. LaFleur, 591 N.W.2d 711, 715-16 (Minn.1999). “When the words of a law * * * are clear and free from all ambiguity, the letter of the law shall not be disregarded under the pretext of pursuing [its] spirit.” Minn. Stat. § 645.16.

We first consider the language of the statute. Applying the common and approved usage to the words used in section 268.095, subdivision 6(a)(1), we conclude that, for an employee’s conduct to constitute employment misconduct, that conduct must (1) be intentional and (2) disregard standards of behavior the employer has a right to expect or the employee’s duties and obligations to the employer.

For the conduct to be intentional, it must be deliberate, Ress v. Abbott Northwestern Hosp., Inc., 448 N.W.2d 519, 524 (Minn.1989), and not accidental, Am. Family Ins. Co. v. Walser, 628 N.W.2d 605, 611 (Minn.2001). Here, there is no claim that Houston’s conduct was not deliberate. Thus, the first prong of subdivision 6(a)(1) is satisfied.

As it concerns the second prong of subdivision 6(a)(1), “disregard” means “to pay no attention to; leave out of consideration; ignore[;] * * * to treat without due regard, respect, or attentiveness; slight,” Random, House Dictionary of the English Language 569 (2d ed.1987), or “to pay no heed to; to fail to notice or observe; hence, to slight as unworthy of regard or notice,” Webster’s New International Dictionary of the English Language 753 (2d ed.1947). These definitions contemplate that the word “disregard” includes intent that is separate and distinct from the intent to engage in the conduct in question. Thus, for purposes of disqualification from unemployment compensation on grounds of employment misconduct under the statute, there must be a sufficient showing in the record that the employee not only engaged in intentional conduct, but also intended to, or engaged in conduct that evinced an intent to, ignore or pay no attention to his or her duties and obligations or the standards of behavior the employer has a right to expect. This reading of section 268.095, subdivision 6(a)(1), is consistent with the remedial nature of unemployment compensation and the declared public policy that unemployment benefits are for those who are “unemployed through no fault of their own,” Minn.Stat. § 268.03, subd. 1 (2000).

Having thoroughly reviewed the record, we find nothing to indicate that Houston intentionally ignored or paid no attention to her duties and obligations to International Data or the standards of behavior that International Data had a right to expect. Because we find no such disregard, we conclude that the conduct that resulted in Houston’s termination was not employment misconduct within the meaning of section 268.095, subdivision 6(a)(1). Therefore, we hold that the commissioner erred when Houston was denied unemployment benefits on the grounds that Houston was discharged for employment misconduct.

Reversed.

GILBERT, Justice

(dissenting).

I respectfully dissent from the majority opinion. Minnesota Statutes § 268.095, subd. 6 (2000), unambiguously defines “employment misconduct” and the statutory definition no longer requires that the conduct willfully or wantonly disregard an employer’s interests or deliberately violate or disregard the employer’s standards of behavior. Rather, the statute clearly states that employment misconduct is any intentional conduct that disregards the standards of behavior that an employer has the right to expect of the employee. As the majority notes, “disregard” means “to pay no attention to; leave out of consideration; ignore[;] * * * to treat without due regard, respect, or attentiveness; slight.” Accordingly, an employee that intentionally fails to follow her employer’s known policies and procedures and, in doing so, either pays no attention to or neglects to observe the standards of behavior that an employer has the right to expect of the employee, commits “employment misconduct” under Minn.Stat. § 268.095, subd. 6. Contrary to the majority’s holding, there simply is no requirement in the statute that the employee must intend to violate or disregard the employer’s standards of behavior.

When interpreting a statute, we first look at whether the statute’s language, on its face, is clear and unambiguous. Am. Family Ins. Group v. Schroedl, 616 N.W.2d 273, 277 (Minn.2000). Words and phrases in the statute are to be construed according to their plain and ordinary meaning. Id. The unambiguous language used in Minn.Stat. § 268.095, subd. 6, defines “employment misconduct.” This definition does not include the specific intent element of “ ‘wilful or wanton disregard of an employer’s interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee.’ ” Tilseth v. Midwest Lumber Co., 295 Minn. 372, 374-75, 204 N.W.2d 644, 646 (1973) (quoting Boynton Cab Co. v. Neubeck, 237 Wis. 249, 296 N.W. 636, 640 (1941)).

The majority fails to construe Minn.Stat. § 268.095, subd. 6, according to its plain and ordinary meaning. Rather, the majority interprets the statute to say something that its does not — that the employee must intend to ignore or pay no attention to the standards of behavior the employer has a right to expect. While the majority concedes that Houston’s conduct was deliberate in the incident at issue, it adds another requirement not contained in the statute by drawing a distinction between an intent to commit the conduct and an intent to commit the conduct that disregards the standards of behavior that an employer has the right to expect of an employee. In this case, Houston was aware of the zero-tolerance policy and, in the heat of the moment, intentionally committed an act that ignored the policy. Although a holding that Houston committed employment misconduct under Minn.Stat. § 268.095, subd. 6, may lead to an unfortunate result for Houston, her employer has rights too, especially in a business that depends on accurate, clear, unemotional communication when alarm calls are received. Houston’s employer has a right to enforce its policies and establish standards of behavior that it has decided are in the best interests of its business. Because Houston’s intentional conduct disregarded these standards, she committed employment misconduct and should be disqualified from receiving unemployment compensation benefits.

I would affirm the court of appeals.

ANDERSON, Russell A., Justice

(dissenting).

I join in the dissent of Justice Gilbert.

STRINGER, Justice

(dissenting).

I join in the dissent of Justice Gilbert.

      . Section 268.095, subdivision 6(a), provides:
      Employment misconduct means:
      (1) any intentional conduct, on the job or off the job, that disregards the standards of behavior that an employer has the right to expect of the employee or disregards the employee's duties and obligations to the employer; or

        (2) negligent or indifferent conduct, on the job or off the job, that demonstrates a substantial lack of concern for the employment.

      . The Tilseth definition of misconduct provided:
      " * * * [T]he intended meaning of the term 'misconduct' * * * is limited to conduct evincing such wilful or wanton disregard of an employer's interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evil design, or to show an intentional and substantial disregard of the employer's interests or of the employee's duties and obligations to his employer. On the other hand mere inefficiency, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertencies [sic] or ordinary negligence in isolated instances, or good-faith errors in judgment or discretion are not to be deemed 'misconduct' * *

      295 Minn, at 374-75, 204 N.W.2d at 646 (quoting Boynton Cab Co. v. Neubeck, 237 Wis. 249, 296 N.W. 636, 640 (1941)).

      . International Data does not rely on Minn. Stat. § 268.095, subd. 6(a)(2) (2000), in arguing that Houston was discharged for employment misconduct.

      . The term "fault,” as used in section 268.03, subdivision 1, necessarily encompasses some degree of culpability.


source: Caselaw Access Project

author: RUSSELL A. ANDERSON, Justice.

license: Public Domain

text:
    Roland PANGERL, deceased, by JoAnne Pangerl, Respondent, v. ELECTRIC REPAIR & CONSTRUCTION and CNA Commercial Insurance, Relators.
    No. C7-01-2035.
    Supreme Court of Minnesota.
    June 13, 2002.

      Timothy J. McCoy, # 69930, McCoy, Peterson, Jorstad & Brabbit, Minneapolis, MN, for Respondent.
    Janet Monson, # 129884, Aafedt, Forde, Gray & Monson, P.A., Minneapolis, MN, for Relators.
   OPINION

RUSSELL A. ANDERSON, Justice.

The Workers’ Compensation Act provides that the death benefit for an employee’s surviving spouse and dependent children is calculated as a percentage of the deceased employee’s wage at the time of injury, subject to a maximum weekly compensation rate, adjusted annually. The Act further provides that when the last dependent child is no longer dependent, the surviving spouse is paid a weekly benefit for an additional ten years at a rate that is 25 percent less than the “last weekly workers’ compensation benefit payment.”

In this case, the weekly death benefit for the surviving spouse and dependent children was limited to the maximum weekly compensation rate, and now that the children are no longer dependent, we are asked to determine the proper method of calculating the ongoing death benefit for the surviving spouse alone. Specifically, we must decide whether the correct statutory calculation is to reduce by 25 percent the maximum weekly compensation benefit to which the surviving spouse and the children have been entitled or whether the correct statutory calculation is to reduce by 25 percent the surviving spouse and dependent children’s benefit entitlement based upon the deceased employee’s wage at the time of injury, and then subject that determination to the maximum compensation rate. We conclude that the correct statutory method of calculating the 25 percent reduction in benefits is the latter method, and we affirm.

The parties have stipulated to the material facts. Roland Pangerl, an employee of relator Electric Repair & Construction, died on August 12, 1987, as a result of a work-related injury that had occurred on July 23, 1987. He was survived by his spouse, respondent JoAnne Pangerl, and their two children, one born in 1971 and the other in 1978. The employer and its workers’ compensation insurer, relator CNA Commercial Insurance, accepted liability for the injury and death and began paying dependents’ death benefits under the Workers’ Compensation Act, effective July 24,1987.

Roland Pangerl’s weekly wage on the date he was injured was $891.80. Under Minn.Stat. § 176.111, subd. 8 (2000), Roland Pangerl’s surviving spouse and two dependent children were entitled to 66-2/3 percent of his wage at the time of injury, or $694.53 per week. However, the Act also provides a maximum compensation rate equal to the maximum weekly compensation for a temporary total disability. Minn.Stat. § 176.111, subd. 20 (2000). At the time of Roland Pangerl’s injury, the maximum compensation rate for a temporary total disability was $360. The employer and its insurer therefore paid the maximum weekly benefit of $360, which was adjusted annually to match the percentage increase in the statewide average weekly wage, not to exceed six percent annually, in accordance with the provisions of Minn.Stat. § 176.645 (1986).

The employer and its insurer continued payment of benefits for more than 13 years, until January 22, 2001, at which point the employer and insurer filed a petition seeking to reduce payments because both children no longer qualified for presumptive dependent status under the Act. The employer and insurer’s petition for a reduction of the amount of their payments to JoAnne Pangerl by 25 percent cited Minn.Stat. § 176.111, subd. 8, which provides that when the last child is no longer dependent, the surviving spouse shall be paid weekly benefits at a rate that is 25 percent less than the “last weekly workers’ compensation benefit payment.” The employer and its insurer argued that this statutory provision required that the weekly payment be reduced by 25 percent. JoAnne Pangerl argued that there should be no reduction in weekly payments. She argued that the amount of the weekly benefit she received was never increased because of her two dependent children and, therefore, her benefit should not be decreased because of the emancipation of the children. The case was submitted on stipulated facts to a compensation judge, who agreed with JoAnne Pangerl and denied the petition to reduce benefits by 25 percent. The WCCA concluded that because the weekly benefit in this case was never increased because of the children, the emancipation of the children could not serve as the basis for a reduction of the benefit and affirmed by split decision. Pangerl v. Elec. Repair & Constr., 2001 WL 1568320, at *3-*4 (Minn. WCCA Oct. 25, 2001).

I.

We are asked in this case to apply the language of the Workers’ Compensation Act to undisputed facts, which we do de novo. Kloss v. E & H Earthmovers, 472 N.W.2d 109, 112 (Minn.1991). A brief overview of the statutory scheme provides a helpful starting point for our analysis. When an employee dies as a result of a work-related injury, the Act provides for the payment of a death benefit to dependents. See Minn.Stat. § 176.111, subd. 5 (1986). When a deceased employee leaves a surviving spouse and no dependent children, 50 percent of the employee’s weekly wage at the time of the injury shall be paid to the surviving spouse for a period of ten years. Minn.Stat. § 176.111, subd. 6 (2000). When a deceased employee leaves a surviving spouse and one dependent child, 60 percent of the employee’s daily wage at the time of the injury shall be paid for the benefit of the surviving spouse and the dependent child until the child is no longer dependent, at which point the rate of the last weekly benefit is reduced by 16-2/3 percent and is then paid to the surviving spouse for a period of ten years. Minn.Stat. § 176.111, subd. 7 (2000). The reduction of the weekly benefit by 16-2/3 percent returns the weekly benefit, without regard to the annual adjustment, to 50 percent of the deceased employee’s wage.

When the deceased employee leaves a surviving spouse and two dependent children, as was the case here, 66-2/3 percent of the daily wage at the time of the injury shall be paid to the surviving spouse for the benefit of both the spouse and the children until the last child is no longer dependent. Minn.Stat. § 176.111, subd. 8. At the point of emancipation of the last child, the surviving spouse receives a weekly benefit for ten years at a rate that is 25 percent less than “the last weekly workers’ compensation benefit payment.” Id. The reduction of the weekly benefit by 25 percent returns the weekly benefit, without regard to the annual adjustment, to 50 percent of the deceased employee’s wage.

The “last weekly workers’ compensation benefit payment” is defined in MinmStat. § 176.111, subd. 8a (2000) as the workers’ compensation benefit that would have been payable without the application of Minn. Stat. § 176.111, subd. 21 (2000). Subdivision 21 essentially provides that the total of weekly government survivor benefits and workers’ compensation death benefits shall not exceed 100 percent of the deceased employee’s weekly wage at the time of the injury causing death. Minn.Stat. § 176.111, subd. 21.

The Act separately establishes a maximum weekly compensation rate for workers’ compensation death benefits. Minn. Stat. § 176.111, subd. 20. The statute provides that “[t]he total weekly compensation to be paid to full actual dependents of a deceased employee shall not exceed in the aggregate an amount equal to the maximum weekly compensation for a temporary total disability.” Id. Thus, in this case even though 66-2/3 percent of the deceased employee’s weekly wage was $594.53, the maximum weekly compensation could not exceed the maximum weekly compensation for temporary total disability on the date of injury, which was $360. Weekly compensation payments are subject to an annual adjustment that matches the percentage increase in the statewide average weekly wage but may not exceed six percent annually. Minn.Stat. § 176.645.

II.

We now turn to the analysis. The employer and insurer argue that the plain language of the Act requires a 25 percent reduction of the final payment made to the surviving spouse. JoAnne Pangerl argues that the rate of the weekly benefit was never increased above 50 percent of the deceased employee’s wage on account of the dependent children. She argues that because the death benefit she received was never increased on account of her dependent children, the weekly benefit should not be reduced when the children are no longer dependent. We agree.

When interpreting statutory language, we will not disregard the letter of the law under the pretext of pursuing the spirit of the law when the words of a law in their application to an existing situation are clear and free from all ambiguity. Minn. Stat. § 645.16 (2000). When a statute is ambiguous or unclear, on the other hand, we determine legislative intent. Id.

If the surviving spouse’s weekly benefit payment had not been reduced by the maximum compensation provision, then operation of the 25 percent reduction provided in Minn.Stat. § 176.111, subd. 8 would be clear and unambiguous. The surviving spouse would receive a workers’ compensation death benefit at the rate of 66-2/3 percent of the daily wage at the time of the injury until the last dependent child is no longer dependent, and then would receive a benefit at the rate of 50 percent of the daily wage for an additional 10 years. See Minn.Stat. § 176.111, subd. 8. However, because the deceased employee here was a high-wage earner, the maximum compensation rate reduced JoAnne Pan-gerl’s weekly benefit to $360, less than 50 percent of her deceased husband’s weekly wage at the time of injury. The operation of the maximum compensation rate provision in this case introduces ambiguity into the statutory scheme as to whether the 25 percent reduction set forth in subdivision 8 is calculated before or after application of the maximum compensation rate of subdivision 20.

Here, the surviving spouse’s weekly benefit was 66-2/3 percent of $891.80, or $594.53. The maximum weekly compensation rate for injury and death in 1987 was $360. Payment of the weekly benefit at that rate continued until the last dependent child was no longer dependent, which amounted to 13 years of death benefits at the rate of $360, adjusted annually. Where the statute provides for a 25 percent reduction of the last weekly workers’ compensation benefit payment, which is defined as the workers’ compensation benefit that would have been payable without the application of subdivision 21, the question we must answer is which weekly benefit rate is to be reduced by 25 percent? Should the surviving spouse’s weekly benefit that would have been payable without regard to the maximum weekly compensation rate be reduced by 25 percent, which is then subject to the maximum compensation rate? Or should the 25 percent reduction be taken after the initial calculation of the weekly benefit rate and application of the maximum compensation rate, which would result in a 25 percent reduction of the $360 weekly benefit rate? We conclude that the former calculation is the calculation that best reflects the legislature’s intent.

First, we note with approval the emphasis placed by the WCCA on the concept of the surviving spouse’s benefit entitlement. Pangerl, 2001 WL 1568320, at *2. The WCCA noted that “the phrase ‘last weekly workers’ compensation benefit payment’ is specifically defined in subdivision 8a as ‘the workers’ compensation benefit which would have been payable without the application of subdivision 21.’ Here, the wording focuses on the dependents’ benefit entitlement, rather than the amount actually being paid.” Id. (footnote omitted). We agree that the emphasis is on the benefit entitlement.

Second, the language of subdivision 20 appears consistent with this interpretation. Subdivision 20 appears to be a provision that applies once the rate of the weekly death benefit is determined, which means in this case after calculation of the 25 percent reduction. Once the other relevant calculations have been made, then subdivision 20 limits the actual recovery of benefits to the maximum compensation rate because the legislature has framed the maximum compensation rate not as a part of the calculation, but rather, as a limit on “[t]he total weekly compensation to be paid.” Minn.Stat. § 176.111, subd. 20.

Third, our interpretation of the interplay between the maximum compensation provision and the provision for a 25 percent reduction is more consistent with the statutory scheme as a whole. Here, as the WCCA majority concluded, the statutory scheme taken as a whole indicates that the rate of the death benefit should not be reduced when the operation of the maximum compensation rate has effectively prevented its increase.

In the absence of the maximum compensation rate, the Act provides that any eligible surviving spouse will qualify for a weekly death benefit at a rate of 50 percent for ten years. That is, without any dependents, the surviving spouse would qualify for a weekly death benefit at the rate of 50 percent of the wage for ten years. Minn.Stat. § 176.111, subd. 6. With one dependent, the surviving spouse qualifies for a benefit at the rate of 60 percent of the wage for as long as there is a qualifying dependent and then qualifies for a benefit at the rate of 50 percent for ten years. See Minn.Stat. § 176.111, subd. 7. With two dependents, the surviving spouse qualifies for a benefit at the rate of 66-2/3 percent of the wage until the last child is no longer dependent, and then qualifies for a benefit at the rate of 50 percent for ten years. See Minn.Stat. § 176.111, subd. 8. In all cases, once there are no longer dependents or if there never were dependents, the surviving spouse is entitled to a weekly death benefit at the rate of 50 percent for ten years. This scheme demonstrates the legislature’s intent that a surviving spouse with or without dependents will receive a weekly death benefit for 10 years at the rate of 50 percent of the deceased employee’s wage at the time of injury, subject to the maximum weekly compensation rate.

Fourth, an inequity would result if we were to allow reduction of a surviving spouse’s weekly death benefit to some amount less than 50 percent of the deceased employee’s wage at the time of injury and less than the statutory maximum compensation rate. The potential inequity is best illustrated when a work-related death of a high-wage-earning employee occurs, and the surviving spouse has two dependent children who are both about to lose dependency status. Without any dependents, the surviving spouse would qualify for a weekly death benefit at the rate of 50 percent of the wage, subject to the statutory maximum, for ten years. With two dependents, the surviving spouse qualifies for- 66-2/3 percent of the wage, also subject to the statutory maximum, and then qualifies for a death benefit at the rate of 50 percent for ten years, which is also subject to the maximum compensation rate. If, for example, the dependents are emancipated one month following the death of the employee, and the weekly death benefit is reduced by 25 percent at that time, then the surviving spouse would receive benefits for one month at the maximum compensation rate and for 10 years at 25 percent less than the maximum rate, whereas the surviving spouse who never had dependents or whose dependents were emancipated before the death of the employee would receive 10 years of death benefits at the maximum rate. This results in the surviving spouse without dependents receiving an amount that is greater in the aggregate than the amount received by the surviving spouse with dependents who lose dependency status early. We believe such a result would be both unreasonable and absurd, and the legislature is presumed not to intend a result that is unreasonable or absurd. Minn.Stat. § 645.17(1) (2000).

We therefore hold that when a surviving spouse and dependent children receive a weekly workers’ compensation death benefit under Minn.Stat. § 176.111, subd. 8, which is subject to a statutory maximum compensation rate, the benefit to be paid to the surviving spouse for an additional ten years after the last child is no longer dependent is determined by first calculating the surviving spouse’s benefit entitlement without regard to the statutory maximum compensation rate. That weekly benefit amount is then subject to the statutory maximum compensation rate. In this case that results in no reduction in benefits.

Affirmed.

      . The two children lost statutory presumptive dependent status because the older child was more than 25 years old and the younger child was more than 18 years old and no longer attending school. See Minn.Stat. § 176.111, subd. 1 (2000).

      . The Act provides:
      If the deceased employee leaves a surviving spouse and two dependent children, there shall be paid to the surviving spouse for the benefit of the spouse and children 66-2/3 percent of the daily wage at the time of the injury of the deceased until the last dependent child is no longer dependent. At that time the dependent surviving spouse shall be paid weeldy benefits at a rate which is 25 percent less than the last weekly workers' compensation benefit payment, as defined in subdivision 8a, while the surviving child was a dependent, for a period of ten years, adjusted according to section 176.645.
      Minn.Stat. § 176.111, subd. 8.

      . The maximum compensation rate provision provides in part:
      Actual dependents are entitled to take compensation * * * during dependency until 66-2/3 percent of the weekly wage of the deceased at the time of injury is exhausted. The total weekly compensation to be paid to full actual dependents of a deceased employee shall not exceed in the aggregate an amount equal to the maximum weekly compensation for a temporary total disability.
      Minn.Stat. § 176.111, subd. 20.

      . This interpretation is bolstered by the allocation of benefits by rule. The 25 percent reduction of a surviving spouse's benefits conceivably is intended to match the 25 percent increase resulting from two dependent children, when it has occurred. By rule, 25 percent of dependency benefits is allocated to and "shall be paid” for the benefit of dependent children (when there has been no allocation of benefits by a judge). Minn. R. 5220.2930, subp. 2 (2001). Here, there has been no 25 percent increase to match with a parallel 25 percent reduction.

      . The employer and its insurer argue that there are potential inequities that arise if no reduction is made when the children are emancipated, because JoAnne Pangerl’s weekly death benefit has been increased by the presence of dependents in that she will receive a weekly benefit for approximately 23 years rather than only for 10 years. The argument is flawed, however, because the duration of benefits and the rate of benefits are two separate and distinct effects of the presence of dependents. In the absence of the maximum compensation rate, JoAnne Pangerl would have received a weekly death benefit for approximately 23 years, but would have received a benefit at a much higher rate. In other words, the employer and its insurer in any event must pay out benefits for 23 years, but because of the operation of the maximum compensation rate, the payment of benefits in the aggregate will have been dramatically reduced.


author: R.A. RANDALL, Judge.

text:
    HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF ST. PAUL, Petitioner, Respondent, v. Geraldine M. LAMBRECHT, et al., Respondents Below, W.O.A.M., Inc., et al., Respondents Below, Hoyt Development Company, et al., Respondents Below, Shannon Kelly’s, Inc., Appellant.
    No. C7-01-1919.
    Court of Appeals of Minnesota.
    May 21, 2002.

      Kay Nord Hunt, Lommen, Nelson, Cole & Stageberg, P.A., Minneapolis, MN; and John F. Bannigan, Jr., Patrick Kelly, Kelly & Fawcett, P.A., St. Paul, MN, for appellant.
    Marc J. Manderscheid, Lisa M. Agri-monti, Briggs and Morgan, St. Paul, MN, for respondent Housing and Redevelopment Authority.
    Considered and decided by RANDALL, Presiding Judge, SCHUMACHER, Judge, and KLAPHAKE, Judge.
   OPINION

R.A. RANDALL, Judge.

In this condemnation dispute, appellant Shannon Kelly’s, Inc., challenges the district court’s order (1) requiring appellant to repay respondent Housing and Redevelopment Authority of the City of St. Paul (“HRA”) $100,000 under Minn.Stat. § 117.155 and (2) dismissing appellant’s claim for loss of going-concern value because it misapplied City of Minneapolis v. Schutt, 256 N.W.2d 260 (Minn.1977). The HRA also argues that the district court erred in not awarding it prejudgment interest.

FACTS

On July 30, 1997, the HRA, by resolution, provided for the acquisition of “Block 39” in St. Paul, which contains all the property on the block in downtown St. Paul bounded by Fourth, Fifth, Wabasha, and St. Peter Streets. In December 1997, the district court granted the HRA’s petition for condemnation of Block 39. At the time of the condemnation, Shannon Kelly’s Inc., operating as Shannon Kelly’s Brew Pub, was a tenant on the property at 395 Wabasha Street, also designated as Parcel 1 in Block 39. Shannon Kelly’s operated a bar-restaurant at the location since March 1990. James H. McGovern was president and principal shareholder of Shannon Kelly’s. On October 20, 1997, Shannon Kelly’s and Hoyt Development Company entered into a written agreement to lease the property from Hoyt for a term of five years.

On February 5, 1998, Shannon Kelly’s entered into an agreement with the HRA, whereby Shannon Kelly’s received $100,000 in consideration for its interest in the fixtures and leasehold improvements. And one day later, on February 6, 1998, pursuant to the court’s December 1997 order that authorized transfer of title upon payment or deposit of funds, the HRA deposited funds with the court administrator. The HRA’s affidavit accompanying the funds detailed the appraiser’s value of Parcel 1 and the property’s fixtures: the land and improvements were valued at $520,000, and the fixtures were valued at $272,504. The affidavit also noted that Shannon Kelly’s had received a $100,000 advance from the HRA and that the HRA deducted that amount from the deposit.

In July 1999, the court-appointed commissioners determined that the award for Parcel 1 should be $700,000 for the value of the real estate, $263,000 for the value of the trade fixtures, and $77,000 for the going-concern value, for a total award of $1,040,000. In August 1999, Shannon Kelly’s appealed the award of the commissioners, asserting that the damages awarded did not constitute just compensation for the taking. Hoyt also appealed the award, asserting that the damages were inadequate compensation and that the award faded to allocate all condemnation proceeds to Hoyt. The HRA cross-appealed, claiming the award was in excess of the fair market value of the property, was contrary to evidence presented at the commissioners’ hearing, and improperly included an amount for loss of going-concern value when no such loss was established at the hearing.

On December 29, 2000, the district court granted HRA’s motion for partial summary judgment and determined that Shannon Kelly’s could not state a claim for loss of going concern. In April 2001, the district court concluded that the lease between Shannon Kelly’s and Hoyt precluded recovery for the fixtures by Shannon Kelly’s. The court also noted that Shannon Kelly’s released and assigned its malpractice claim against its attorney for any settlement or judgment proceeds it might obtain in the condemnation proceedings, and as a result, Shannon Kelly’s received $174,817.43 in the fall of 1999 from Minnesota Lawyer’s Mutual and received indemnity for up to $100,000 if Shannon Kelly’s was required to repay any part of the $100,000 advance.

On June 29, 2001, after a trial on the valuation issue, a jury found in favor of Hoyt and against the HRA in the amount of $850,000. After the jury verdict, the HRA moved the trial court to enter judgment against Shannon Kelly’s for $100,000 under Minn.Stat. § 117.155 (2000). The district court granted the HRA’s motion on August 31, 2001, and judgment was entered on October 5, 2001. The court concluded that HRA paid Shannon Kelly’s $100,000 as an advance on its claim for trade fixtures, and, because of the April 2001 order, Shannon Kelly’s was not entitled to any part of the advance. The court determined that the language of Minn. Stat. § 117.155 was clear, and, thus, required the court concluded it was to “enter judgment in the original condemnation action in favor of the condemnor for the amount owed in excess of the award as finally determined.” In the August 31, 2001, order, the district court also denied HRA’s motion for prejudgment interest, concluding that the HRA is not entitled to interest when it seeks reimbursement of an overpayment.

Shannon Kelly’s appeals from the district court’s December 29, 2000, order and the August 31, 2001, order and corresponding judgment. The HRA appeals the court’s denial of prejudgment interest in the August 31, 2001, order.

ISSUES

I. Did the district court err in determining that the HRA was entitled to return of the $100,000 it advanced to Shannon Kelly’s under Minn.Stat. § 117.155 (2000)?

II. Did the district court err by not awarding the HRA prejudgment interest? ’

III. Did the district court err in granting the HRA’s motion for partial summary judgment that dismissed Shannon Kelly’s claim for loss of going concern value?

ANALYSIS

I. Return of $100,000 Advance

Shannon Kelly’s argues that the district court erred in concluding that Minn.Stat. § 117.155 (2000) authorizes the return of the $100,000 advance to the HRA.

The construction of a statute is a question of law and reviewed de novo by an appellate court. Hibbing Educ. Ass’n v. Pub. Employment Relations Bd., 369 N.W.2d 527, 529 (Minn.1985). Minn.Stat. § 117.155 provides for payment and partial payment pending appeal:

Except as otherwise provided herein payment of damages awarded may be made or tendered at any time after the filing of the report; * * *. If either the petitioner or any respondent appeals from an award, the respondent or respondents * * * may demand of the petitioner a partial payment of the award pending the final determination thereof, and it shall be the duty of the petitioner to comply with such demand and to promptly pay the amount demanded but not in excess of an amount equal to three-fourths of the award of damages for the parcel which has been appealed, less any payments made by petitioner pursuant to section 117.042; * * *. A partial or full payment as herein provided shall not draw interest from the condemner from the date of payment or deposit, and upon final determination of any appeal the total award of damages shall be reduced by the amount of the partial or full payment. If any partial or full payment exceeds the amount of the award of compensation as finally determined, upon petitioner’s motion, final judgment must be entered in the condemnation action in favor of the petitioner in the amount of the balance owed to the petitioner and is recoverable within the original condemnation action.

Minn.Stat. § 117.155 was amended in 1997. The last sentence was added to the statute and the following was deleted:

If any partial or full payment exceeds the amount of the award of compensation as finally determined, the petitioner shall have a claim against the respondents receiving such payment for the amount thereof, to be recoverable in the same manner as in any civil action.

Minn.Stat. § 117.155 (1996). The amendment eliminated the requirement that the condemning authority initiate a civil action to recover overpayments and instead provided that the condemning authority could recover overpayment in the original condemnation action.

Shannon Kelly’s argues that the $100,000 paid to it was not paid pursuant to Minn.Stat. § 117.155 and was not paid because of the commissioners’ award but rather was made in consideration of Shannon Kelly’s voluntary agreement to immediately convey its entire interest in the fixtures. We disagree.

The record shows that the agreement between Shannon Kelly’s and the HRA was an advance as contemplated by Minn. Stat. § 117.155. The February 5, 1998, agreement states:

[t]he payment acknowledged above is accepted as an advance against, and shall constitute credit against, total compensation to which [Shannon Kelly’s] may ultimately establish it is entitled under applicable law for the loss of its interest in the Fixtures as a result of the acquisition of the Property by the HRA.

Under the plain language of the agreement, the $100,000 was an advance on Shannon Kelly’s condemnation compensation. Even if we were to look beyond the agreement itself, which we have found unambiguous, the record supports only one conclusion: Shannon Kelly’s considered the $100,000 an advance before and after the parties entered into the agreement. Shannon Kelly’s attorney sent a letter to the HRA setting forth Shannon Kelly’s claim for relocation expenses and reimbursement for its trade fixtures. The last line of the letter states, “Consider this as a request for an advance payment toward the termination of that claim.” In an affidavit submitted to the court dated February 19, 1998, McGovern stated he “received an advance payment of $100,000 towards the ultimate settlement of the valuation of said trade fixtures.”

The district court determined that Shannon Kelly’s was not entitled to compensation for the fixtures, and Shannon Kelly’s did not appeal that determination. Shannon Kelly’s received $100,000 for the fixtures. Accordingly, under Minn.Stat. § 117.155, the HRA is entitled to judgment against Shannon Kelly’s for $100,000.

Shannon Kelly’s asserts that Minn. Stat. § 117.155 only applies to return of payments made after a commissioners’ award, and, thus, any payments made by the HRA before the commissioners’ award could not fall under the statute. Shannon Kelly’s supports its position by focusing on the language that “damages awarded may be made or tendered at any time after the filing of the report” and asserting that the “filing of the report” means the commissioners’ award. The argument of Shannon Kelly’s is that the phrase “after the filing of the report” is literal, limits timeframes, and has to be narrowly interpreted. Although “report” is not defined, even presuming it is the commissioners’ award, it does not follow that that time limitation applied to the last sentence of the statute narrowly controls return of overpayments. The last sentence in the statute provides for the return of overpayments “[i]f any partial or full payment exceeds the amount of the award of compensation as finally determined * * MinmStat. § 117.155 (emphasis added). Thus, return of any overpayment is not limited to payments made after the commissioners’ award.

We also recognize that Minn.Stat. § 117.155 provides a mechanism whereby a property owner can obtain partial payment for the taking due to condemnation pending an appeal of the commissioners’ award. Here, the commissioners’ .award was dated July 13, 1999, one year and six months after the HRA deposited funds with the court and received title to the property. Shannon Kelly’s interpretation is at odds with the obvious purpose of the statute, allowing property owners to obtain partial payment for the taking pending resolution of the valuation issue. Under Shannon Kelly’s interpretation, the HRA would be discouraged from entering into early agreements providing for advance payments to property owners; the HRA would wait until the commissioners’ award is filed before making any advance payments or payments directly to the property owners under the quick take statute. Shannon Kelly’s interpretation also results in an obvious windfall to Shannon Kelly’s at the expense of the HRA.

Finally, the HRA asserts that Shannon Kelly’s does not have standing to challenge this ruling because it will be indemnified to the loss of the advance. But the HRA cites no case for the proposition that when one may be indemnified, he losses standing on appeal to contest the loss. Accordingly, we find the HRA’s argument to be without merit.

II. Prejudgment Interest

HRA argues the district court erred in concluding that the HRA was not entitled to prejudgment interest on the $100,000 award. Minn.Stat. § 117.195 (2000) provides for interest in eminent-domain proceedings under Chapter 117:

All damages allowed under this chapter, whether by the commissioners or upon appeal, shall bear interest from the time of the filing of the commissioner’s report or from the date of the petitioner’s possession whichever occurs first. The rate of interest shall be determined according to section 549.09. * * *

Minn.Stat. § 549.09, subd. 1(b) (2000) provides:

Except as otherwise provided by contract or allowed by law, preverdict, preaward, or prereport interest on pecuniary damages shall be computed as provided in clause (c) from the time of the commencement of the action or a demand for arbitration, or the time of a written notice of claim, whichever occurs first, except as provided herein.

(Emphasis added). The district court concluded that because the legislature did not provide for interest in Minn.Stat. § 117.155, HRA was not entitled to interest on the overpayment. We agree.

“Interest on awards in eminent domain proceedings is entirely controlled by statute.” State by Mondale v. Gannons Inc., 275 Minn. 14, 25, 145 N.W.2d 321, 330 (1966) (applying predecessor statute). Minn.Stat. § 117.195, subd. 1 (2000), provides for interest on damages allowed under chapter 117 (condemnation awards). This interest is “on an award of damages and is at the statutory rate of interest on judgments established in Minn.Stat. § 549.09” and is “paid by the condemning authority.” In re Condemnation by City of Minneapolis, 632 N.W.2d 586, 588 (Minn.2001) (citation omitted). Return of an overpayment, although authorized by Minn.Stat. § 117.155, does not constitute an award of “damages” under chapter 117. Because interest on condemnation awards is controlled by statute, and the legislature has not provided for prejudgment interest upon return of an overpayment or advance, the district court did not err by concluding the HRA is not entitled to prejudgment interest under the statute.

III. Loss of Going-Concern Value

Shannon Kelly’s asserts that the district court erred in its December 2000 order by grating summary judgment in favor of HRA, dismissing Shannon Kelly’s claim for going-concern damages, and concluding that, as a matter of law, Shannon Kelly’s did not satisfy the two-part test set forth in City of Minneapolis v. Schutt, 256 N.W.2d 260 (Minri.1977). Shannon Kelly’s argues that it presented sufficient evidence to establish that a genuine issue of material fact exists as to whether the two-part Schutt test was satisfied, and, therefore, it is entitled to a jury trial on the issue of any loss of going-concern damages. We agree.

“On an appeal from summary judgment, we ask two questions: (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). A court shall grant a motion for summary judgment “when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law.” Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993) (citation omitted). A reviewing court need not defer to the district court’s application of the law when the material facts are not in dispute. Hubred v. Control Data Corp., 442 N.W.2d 308, 310 (Minn.1989). In determining whether a genuine issue of material fact exists, the reviewing court must view the evidence in a light most favorable to the non-moving party. Offerdahl v. Univ. of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn.1988).

“The federal and state constitutions mandate that just compensation be paid before the government takes private property under the power of eminent domain.” In re Condemnation by City of Minneapolis, 632 N.W.2d at 589 (citing U.S. Const. amend. V; Minn. Const. art. I, § 13). Going-concern value relates to the goodwill value of a business. See Roth v. Roth, 406 N.W.2d 77, 80 (MinnApp. 1987) (stating goodwill value is transferable property generally defined as amount willing buyer would pay for going concern above book value of assets). The general rule “is that in nearly all cases the lessee is not entitled to recover compensation for loss of ‘going-concern’ value as part of a condemnation award.” Schutt, 256 N.W.2d at 261-62. But courts will permit compensation for loss of going-concern value

where the holder of the interest to be lost by condemnation can show (1) that his going-concern value will in fact be destroyed as a direct result of the condemnation, and (2) that his business either cannot be relocated as a practical matter, or that relocation would result in irreparable harm to the interest.

Id. at 265.

In Schutt, the supreme court cited with approval and discussed several Michigan cases, including City of Lansing v. Wery, 68 Mich.App. 158, 242 N.W.2d 51 (1976); City of Detroit v. Whalings, Inc., 48 Mich. App. 1, 202 N.W.2d 816 (1972); and Michigan State Highway Comm’n v. L & L Concession Co., 31 Mich.App. 222, 187 N.W.2d 465 (1971).

In L & L, the Michigan Court of Appeals concluded that condemnation of a racetrack where an exclusive concession was located could create compensable going-concern damages for the concession-stand operator. L & L, 31 Mich.App. at 239, 187 N.W.2d at 474. The court determined that the value of the concession flowed “from locational advantage and L & Us monopoly position at that location, not conventional customer goodwill.” Id. at 233, 187 N.W.2d at 470. Two years later in Whalings, the court determined that going-concern value was not compensable for the condemnation of a building that contained a men’s clothing store for more than 100 years. Whalings, 43 Mich.App. at 2, 11, 202 N.W.2d at 817, 821. The court stressed that the clothing store’s going-concern value depended “at least as much on the quality of its operation as on its location,” but in L & L, the value “derived no so much from the quality of its products and service as from its monopolistic position.” Id. at 9-10, 202 N.W.2d at 820-21. Finally, in Wery, a hamburger shop had leased the condemned property since 1924. Wery, 68 Mich.App. at 159, 242 N.W.2d at 52. The court considered L & L and Whalings and concluded that while not dispositive, L & L was similar to the hamburger shop. Id. at 164-65, 242 N.W.2d at 54. The court recognized that “[i]n most cases, no compensation is allowed for * * * a going concern value of a business operated on condemned realty.” Id. at 163, 242 N.W.2d at 54. But the court found the hamburger shop

[w]as a unique operation in a unique location. It depended greatly on that location, and any significant move would so greatly impair its business as to nearly destroy it.

Id. at 165, 242 N.W.2d at 55. More recently, this court summarized the differences among L & L, Wery, and Whalings:

The L. & L. Concession and Wery courts allowed recovery where the going-concern value was firmly bonded to the location rather than to the particular owners or service providers. The Whal-ings court did not allow recovery, however, where location was secondary, despite the fact no suitable relocation sites were readily available.

In re Condemnation by Minneapolis Cmty. Dev. Agency, 488 N.W.2d 319, 321 (Minn.App.1992) (citations omitted), review denied (Minn. Sept. 15, 1992). We find Wery supports a conclusion that a fact issue exists in the present case.

Here, Shannon Kelly’s asserts that its going-concern value will be destroyed as a direct result of the condemnation because an essential percentage of its business came from customers who worked within a one and one-half block radius of its business, specifically from the Northern Federal Building, Dayton’s, The Hamm Building, and St. Paul Companies. Shannon Kelly’s claims that the “primary source” of its income is derived from its luncheon business from the customers who work within one and one-half blocks away.

While the record reflects that Shannon Kelly’s concedes that the quality of its food and beverages, its service, and its menu prices are factors in the value of the business on a going concern, we cannot con-elude on this record that the going-concern value is not directly tied to the location. We find it unreasonable to presume (on a motion for summary judgment where inferences are construed against the movant and in favor of the non-moving party) that local lunchtime business customers would willingly travel two, four, six, or eight miles in the limited time available for lunch just to seek out a new restaurant owned by McGovern. Accordingly, we conclude Shannon Kelly’s has established at least that a genuine fact issue exists as to whether its going-concern value will be destroyed as a result of the condemnation.

Shannon Kelly’s also asserts that it satisfied the second part of the Schutt test because his business cannot be relocated as a practical matter or that relocation would result in irreparable harm to the interest. By affidavit, McGovern, Shannon Kelly’s president and principal shareholder, stated he “methodically canvassed every location within the one and one half block radius of 6th and Wabasha together with sites outside that radius,” and that on the date of the taking, “there was no reasonably suited relocation site.” McGovern described that nothing was available across the street from Shannon Kelly’s present location, that the Hamm Building was fully occupied and it wanted no additional restaurants, that a new lessee occupied the “only available and appropriate spot” on 7th Place, and that “[njothing of a size to relocate [the] business was available.” McGovern stated that to locate the business beyond the “one and one half block radius would have resulted in irreparable harm” to the business.

The record shows that McGovern considered purchasing existing businesses in White Bear Lake and Stillwater, and ultimately ended up purchasing an existing restaurant in Willernie. We cannot say, on this record, that such relocation eliminates any fact issue regarding the second Schutt element, namely whether Shannon Kelly’s business cannot be relocated with no irreparable harm to its business. See id. (recognizing “irreparable harm” interpreted as meaning “going-concern value cannot exist apart from the location”). Merely because McGovern could operate a new restaurant in another location somewhere in the state of Minnesota does not indicate that Shannon Kelly’s going-concern value was not based primarily on its location. Likewise, the fact that Shannon Kelly’s could have transferred its liquor license to another location is not disposi-tive if no comparable location was available. See State by Mattson v. Saugen, 283 Minn. 402, 169 N.W.2d 37, 46 (1969) (concluding going-concern value destroyed where liquor license was tied to particular location and good-faith attempt to transfer license to new location failed).

Taking the facts in the light most favorable to Shannon Kelly’s, as we must do, we conclude Shannon Kelly’s has established a genuine issue of material fact. See Offerdahl, 426 N.W.2d at 427 (reviewing court must view evidence in light most favorable to non-moving party). The district court determined on summary judgment that “there are two operating brew pubs in downtown St. Paul so there is nothing unique about the location at 6th Street and Wabasha for a brew pub.” We conclude that whether the location is unique or transferable is a question for the trier of fact.

We find Dep’t of Transp. v. Campbell, 175 Mich.App. 629, 438 N.W.2d 267 (1988), persuasive on this point. Because the supreme court has cited several Michigan going-concern cases approvingly, we find it appropriate to look to Michigan’s caselaw for guidance in the present case. In Campbell, the Michigan Court of Appeals determined that “[w]hether a business is transferable is a factual question and must be determined on a case-by-case basis.” Id. at 631, 438 N.W.2d at 268. We agree.

In Campbell, the court concluded that the district court abused its discretion by refusing to allow the defendant to present evidence of the going-concern value of his business. Id. The defendant asserted that his gas-station business was unique because of its location, that the business could not be transferred, that the location provided increased traffic flow, that he was unable to obtain his previous Shell franchise at the new location, and that none of his former customers patronized the new business. Id. The court concluded that “[t]he uniqueness of a property must be determined by the trier of fact in each case, and defendant was entitled to present evidence on this issue.” Id. L & L also recognized that it “will, of course, be for the trier of fact to determine * * * whether the business * * * was transferable to another location, that is to say, the extent to which, if at all, the business was destroyed by the condemnation.” L & L, 31 Mich.App. at 236, 187 N.W.2d at 472. Because a genuine issue of material fact exists, we conclude the district court erred in granting summary judgment for the HRA on this issue.

Finally, the HRA argues that the district court also correctly based its decision on two remaining grounds. First, the district court, citing Korengold v. City of Minneapolis, 254 Minn. 358, 95 N.W.2d 112 (Minn.1959), concluded that the lease between Shannon Kelly’s and Hoyt terminated upon condemnation and thus that Shannon Kelly’s was not entitled to any part of the condemnation proceeds.

The parties’ lease provides:

The parties hereto agree that if the leased premise, or any part thereof, shall be taken or appropriated for public use by any public or quasi-public authority during the term of this lease, that this lease shall terminate as of the date of such appropriation and all condemnation proceeds shall be the sole property of [landlord]; * * *.

Korengold considered a similar clause and recognized that

[w]ith this type of clause, at least in the absence of a contrary state rule, the tenant has no right which persists beyond the taking and can be entitled to nothing.

Korengold, 254 Minn, at 363, 95 N.W.2d at 115-16; see also In re Matter of Minneapolis Cmty Dev. Agency 417 N.W.2d 127, 129 (Minn.App.1987) (recognizing when a lease terminates upon condemnation, tenant is “entitled to no compensation” for loss of leasehold interest), review denied (Minn. Feb. 24,1988). But Korengold considered the landlord and tenant’s compensation with respect to movable fixtures where the tenant had a right to remove the fixtures upon termination:

Since [the tenant] can and is free to remove his equipment and fixtures and the condemnor has not appropriated said fixtures or equipment, the [tenant’s] rights are in that respect the same as if the lease in question had terminated naturally, the taking of the premises under the condemnation clause of the lease having caused immediate termination.

Korengold, 254 Minn, at 363, 95 N.W.2d at 115-16. The district court examined this provision in two orders. First, in February 2000, the court denied Hoyt’s motion for summary judgment, concluding that a fact issue exited as to whether the trade fixtures were included in the language “all condemnation proceeds.” Second, in April 2001, the court again recognized that the earlier summary-judgment motion was denied because there “appeared to be a fact issue regarding the intent of the parties in” including that provision of the lease. But the court determined that the provision, when read in context with another provision that provided that the tenant “has the right to remove its property and trade fixtures, prior to termination of the lease,” meant that if Shannon Kelly’s did not do so, the landlord would be entitled to the condemnation proceeds for any remaining fixtures. Shannon Kelly’s does not challenge this conclusion on appeal. The district court properly came to its conclusion on that issue.

The parties’ lease, however, contains no comparable clause relating to the going-concern value of the business, and we question whether upon condemnation and termination of the lease, the landlord could establish a claim for the tenant’s loss of going concern value. We do not find Ko-rengold persuasive with respect to a tenants’ interest in its going-concern value. Here, as we have concluded, a fact issue exists as to whether appellant was “free to remove” (i.e., free to relocate) his going-concern value. This is not a case where the landlord and tenant are asserting competing rights over the going-concern award of damages. Rather, the HRA, which was not a party to the lease between Shannon Kelly’s and Hoyt, is asserting that the lease’s terms precluded Shannon Kelly’s from claiming going-concern damages. We conclude the contract language at issue does not extinguish Shannon Kelly’s claim for going concern value.

Second, the HRA argues that the district court correctly determined that es-toppel prevented Shannon Kelly’s from asserting loss of going-concern damages. The district court noted that

it would be inconsistent to claim eligibility for and receive relocation benefits and also claim [loss of going-concern value]. Having used relocation benefits to establish the Manitou Island Inn, Shannon Kelly’s cannot also claim loss of going concern value.

Campbell is an example of a situation where recovery of both relocation and going-concern damages are not inconsistent. The gas-station operator incurred expense relocating his gas station, but may be entitled to going-concern value because of the loss of the franchise. We conclude that relocation and relocation benefits (when you have to relocate, you have to relocate) and retaining a claim for loss of going-concern value are not necessarily inconsistent in all situations. Here, McGovern asserts he was unable to relocate Shannon Kelly’s. The fact that he may have claimed relocation benefits so that he could move his business fixtures is not inconsistent.

We conclude that a genuine issue of material fact exists as to whether Shannon Kelly’s going-concern value will be destroyed as a direct result of the condemnation and whether its business either cannot be relocated as a practical matter, or that relocation would result in irreparable harm to that interest. Accordingly, the district court erred in granting summary judgment for HRA on the issue of going-concern value. We reverse and remand this issue for trial.

DECISION

The district court did not err in concluding that HRA’s $100,000 payment to Shannon Kelly’s constituted an advance under MinmStat. § 117.155 (2000) and that Minn. Stat. § 117.155 authorizes the return of the advance to the HRA. Return of an overpayment does not constitute “damages” under chapter 117, and, because the legislature did not provide for interest in Minn.Stat. § 117.155, the district court correctly concluded that the HRA was not entitled to interest on the overpayment.

Because Shannon Kelly’s has established a genuine issue of material fact with respect to the issue of going-concern damages, the district court erred in granting summary judgment for the HRA on that issue.

Affirmed in part, reversed in part, and remanded.

      . In July 1997, Shannon Kelly’s was a tenant of W.O.A.M., Inc., which was a contract for deed purchaser from the fee owners. The fee owners of the property were Geraldine M. Lambrecht, James L. Lambrecht, Lillian J. Patoile, Geraldine Jenny Graves, Leonard J. Graves, Earl J. Jenny, and Doris O. Jenny. McGovern owned 25% of the equity of W.O.A.M. and was its chief executive officer. W.O.A.M. entered into a purchase agreement to sell the property to Hoyt Development Company, and Shannon Kelly's leased the property from Hoyt.

      . Statutory quick-take procedures under Minn.Stat. § 117.042 (2000) allow a condemning authority to acquire immediate title to and possession of property even before damages for the taking are determined. In re Condemnation by City of Minneapolis, 632 N.W.2d 586, 587 (Minn.2001). To effect a quick take, the condemning authority pays the owner directly or deposits funds with the court equal to the condemning authority’s approved appraisal of value of the property. Id. After payment is deposited with the court, the condemning authority may apply to the court for an order transferring title and possession of the property to the condemning authority. Id. If the property owner contests the appraisal, the court appoints commissioners to determine the damage a property owner has sustained, and any party may appeal the commissioner’s award to the district court. Id.

      . Hoyt has not participated in this appeal.


author: PORITSKY, Judge.

text:
    STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, as a servicing agent of the Minnesota Automobile Assigned Claims Bureau, Respondent, v. TENNESSEE FARMERS MUTUAL INSURANCE COMPANY, Appellant.
    No. C3-01-1870.
    Court of Appeals of Minnesota.
    May 28, 2002.

      Timothy J. Eiden, Melissa A. Harritt, Hansen, Dordell, Bradt, Odlaug & Bradt, P.L.L.P., St. Paul, for respondent.
    James P. Young, Lundquist Law Offices, P.A., Minneapolis, for appellant.
    Considered and decided by RANDALL, Presiding Judge, KLAPHAKE, Judge, and PORITSKY, Judge.
   OPINION

PORITSKY, Judge.

A motor vehicle owned by Tennessee residents and insured by appellant Tennessee Farmers Mutual Insurance Company (“Tennessee Farmers”) was involved in an accident in Minnesota. Two occupants of the Tennessee vehicle were Minnesota residents. Respondent State Farm, as a servicing agent for the Minnesota assigned-claims bureau, paid Minnesota no-fault benefits to the Minnesota occupants, then sought reimbursement from Tennessee Farmers for those no-fault expenses on the ground that Tennessee Farmers had contractually agreed in its policy to provide Minnesota no-fault coverage. The district court granted State Farm’s motion for summary judgment. Tennessee Farmers appeals from the judgment, claiming (1) Minnesota courts have no personal jurisdiction over it; and (2) it has no contractual obligation to provide Minnesota no-fault benefits.

FACTS

On October 8, 1995, a vehicle driven by James Chase and owned by his parents was rear-ended by another vehicle in Minneapolis. James Chase and his parents are residents of Tennessee. Appellant Tennessee Farmers insured the Chase vehicle. Tennessee Farmers is a company incorporated in the state of Tennessee. It has no agents in Minnesota, does not sell any insurance policies in Minnesota, and is not licensed to do business in Minnesota. The Tennessee Farmers policy included a standard territory-of-coverage clause that provided, in relevant part, that the policy coverage applies “only to accidents or losses that occur * * * in the United States of America * * * or in Canada.”

Two Minnesota residents were passengers in the Tennessee vehicle at the time of the accident. The Minnesota occupants made application for Minnesota no-fault benefits under the Tennessee Farmers policy covering the Chase vehicle, but Tennessee Farmers denied the claim. As there was no other source of Minnesota no-fault coverage, the Minnesota occupants applied for no-fault benefits from the Minnesota Automobile Assigned Claims Bureau. The claim was assigned to respondent State Farm, a servicing agent for the assigned-claims bureau, who paid no-fault benefits to the Minnesota residents.

Thereafter, State Farm commenced an action against Tennessee Farmers for reimbursement of no-fault benefits paid to the Minnesota occupants. State Farm claimed that Tennessee Farmers had contractually agreed to provide Minnesota no-fault coverage to the Minnesota occupants through a conformity clause in its policy, and, under the Minnesota no-fault priority provisions, Minn.Stat. § 65B.47, this no-fault coverage would be the primary source of no-fault coverage for the Minnesota occupants.

Tennessee Farmers moved to dismiss the complaint for lack of personal jurisdiction. The trial court denied the motion. State Farm then moved for summary judgment on the coverage issue. Tennessee Farmers opposed the motion, asserting that the conformity clause applied only to liability coverage. The trial court granted summary judgment in favor of State Farm, concluding that, based on the con-forraity clause, Tennessee Farmers agreed to provide the compulsory no-fault coverage for accidents occurring in Minnesota. The trial court entered judgment against Tennessee Farmers for the no-fault benefits and statutory interest. Tennessee Farmers appeals both the finding of jurisdiction and the finding of coverage.

ISSUES

I. Did the trial court err in finding personal jurisdiction over a nonresident auto insurer for a first-party claim, when the policy states that coverage applies “to accidents or losses that occur in the United States” and the claim arose out of a Minnesota accident?

II. Did the trial court err in concluding that Tennessee Farmers contractually agreed to provide Minnesota no-fault benefits?

ANALYSIS

I.

“The determination of whether personal jurisdiction exists is a question of law.” V.H. v. Estate of Bimbaum, 543 N.W.2d 649, 653 (Minn.1996) (citation omitted).

The Due Process Clause limits the power of a state court to exercise jurisdiction over a nonresident defendant. Domtar v. Niagara Fire Ins. Co., 533 N.W.2d 25, 30 (Minn.1995) (citing Kulko v. Superior Court of California, 436 U.S. 84, 91, 98 S.Ct. 1690, 1696, 56 L.Ed.2d 132 (1978)). State courts may constitutionally exercise personal jurisdiction over nonresident defendants who have “minimum contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (quotation omitted).

Minnesota has enacted a long-arm statute to govern the exercise of jurisdiction over nonresident defendants; the long-arm statute is intended to permit Minnesota courts to exercise jurisdiction over such defendants to the full extent that federal constitutional requirements of due process will allow. Valspar Corp. v. Lukken Color Corp., 495 N.W.2d 408, 410 (Minn.1992); see Minn.Stat. § 543.19 (2000) (Minnesota long-arm statute). Thus, if the requirements of the federal constitution are met, the requirements of the Minnesota long-arm statute will necessarily be met. Valspar, 495 N.W.2d at 411.

Jurisdiction may be either general or specific. General jurisdiction is available if the defendant has “continuous and systematic” contacts with the forum state; if so, the nonresident defendant may be sued in the forum state on almost any claim, even when the claim does not arise out of the defendant’s activities in the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984). Here, the record contains no information that Tennessee Farmers had continuous or systemic contacts with Minnesota; instead, the only contact supported in the record is an accident occurring in Minnesota involving a motor vehicle owned by Tennessee residents and insured by Tennessee Farmers. Thus, the record does not support the exercise of general jurisdiction.

With regard to specific jurisdiction, the minimum-contacts inquiry focuses on the relationship among the defendant, the forum, and the litigation. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775, 104 S.Ct. 1473, 1478, 79 L.Ed.2d 790 (1984). The question is whether the nonresident defendant purposefully directed its activities toward the forum state and whether the underlying claim arose out of those activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73, 105 S.Ct. 2174, 2182, 85 L.Ed.2d 528 (1985). The nonresident defendant, through its conduct and connection with the forum state, should reasonably anticipate being haled into the court in that state. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 296-98, 100 S.Ct. 559, 566-67, 62 L.Ed.2d 490 (1980). And even if a showing of minimum contacts has been made, we must also assess whether the exercise of jurisdiction is “reasonable,” that is, whether it comports with traditional notions of fair play and substantial justice. Asahi Metal Indus. Co. v. Superior Court of California, 480 U.S. 102, 113, 107 S.Ct. 1026, 1032-33, 94 L.Ed.2d 92 (1987).

Applying these concepts, we conclude that Tennessee Farmers has sufficient minimum contacts with Minnesota to sustain an exercise of specific jurisdiction and that the exercise of jurisdiction is reasonable. First, Tennessee Farmers purposefully directed its activities toward Minnesota by issuing an insurance policy with a broad territory-of-coverage clause that extends to accidents occurring anywhere in the United States, including Minnesota. The present case, which is a contractual claim under the policy arising out of a Minnesota accident, falls squarely within the geographical limits of this territory-of-coverage clause. Such a result is consistent with our prior decision in Payne v. Mut. Fire and Auto. Ins. Co., 381 N.W.2d 523, 525-26 (Minn.App.1986), review denied (Minn. Mar. 27, 1996). The Payne court reasoned that an auto insurer who purposefully agrees to insure travel within a specified area that includes part of the forum state has sufficient minimum contacts with the forum state. Id. (concluding that Iowa insurer who contractually agreed to defend its insured for accidents occurring within a limited area of Minnesota was subject to personal jurisdiction in Minnesota, even for claims arising from an accident that occurred outside the contractually-limited area).

Tennessee Farmers argues the reasoning in Payne is limited to liability claims in which an insurer has contractually agreed to defend and indemnify its insured for accidents occurring in other states, whereas the present case involves a first-party claim for Minnesota no-fault benefits asserted directly against the nonresident auto insurer. See United Farm Bureau Mut. Ins. Co. v. United States Fid. & Guar. Co., 501 Pa. 646, 462 A.2d 1300, 1306-07 (1983) (holding policy provisions insufficient to create minimum contacts for lawsuit seeking to impose no-fault coverage on nonresident insurer); Batton v. Tennessee Farmers Mut. Ins. Co., 153 Ariz. 268, 736 P.2d 2, 6-8 (1987) (no minimum contacts for lawsuit seeking benefits under the med-pay portion of the auto policy).

We disagree. The broad territory-of-coverage clause in the Tennessee Farmers policy is found in the general policy provisions and does not distinguish between first-party and third-party (i.e., liability) claims. In addition, the first-party claims asserted in this litigation and third-party claims asserted indirectly against the insurer both stem from a similar obligation, that is, from a contractual agreement to provide various coverages. In fact, this first-party claim may present an even stronger case for finding minimum contacts, because this first-party claim is based upon an alleged direct contractual obligation to the Minnesota occupants under the policy provisions, whereas a third-party claim is based upon contractual obligations to the insured.

Second, we find that Tennessee Farmers could reasonably anticipate being haled into Minnesota courts, by virtue of its policy provisions and the inherently mobile nature of the motor vehicle. The broad territory-of-coverage clause contemplates that the motor vehicle may travel outside the state of Tennessee. In addition, the conformity clause at issue in the coverage determination, discussed below, also specifically contemplates out-of-state travel.

We also believe that this exercise of jurisdiction is reasonable. This inquiry includes an evaluation of five factors: (1) the burden on the defendant; (2) the forum state’s interest in resolving the dispute; (3) the plaintiffs interest in receiving convenient and effective relief; (4) the interstate judicial system’s interest in obtaining an efficient resolution of controversies; and (5) the shared interest of the several states in furthering fundamental substantive social policies. Asahi, 480 U.S. at 113, 107 S.Ct. at 1033. We believe that the plaintiffs interest in resolving this coverage issue in Minnesota outweighs the burden on Tennessee Farmers, an insurer with greater resources. We also believe that Minnesota and the interstate judicial system share the interest of resolving all claims, both first-party and third-party, in the state where the accident occurred.

This finding of jurisdiction is consistent with a national trend finding minimum contacts between auto insurers and the forum state based upon territory-of-coverage clauses. See Farmers Ins. Exch. v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911, 913 (9th Cir.1990) (finding minimum contacts where insurer had purposefully connected itself to the forum state by agreeing to defend its insured throughout the United States); Rossman v. Stat Farm Mut. Auto. Ins. Co., 832 F.2d 282, 286-87 (4th Cir.1987) (accord); see also Tamara S. Brandt, OMI Holdings v. Royal Insurance: Applying the Minimum Contacts Test to Territory of Coverage Clauses, 74 Notre Dame L.Rev. 1311, 1330-32 (May 1999) (discussing trend finding minimum contacts between nonresident liability carriers and forum state based upon territory-of-coverage clauses).

While the Minnesota Supreme Court has never addressed this jurisdictional issue involving nonresident auto insurers, it did conclude that a nonresident comprehensive-general-liability (CGL) insurer who agreed to defend its insured for accidents occurring in “Canada and the United States of America” had sufficient contacts with Minnesota for the exercise of personal jurisdiction in a coverage dispute claim. Domtar, 533 N.W.2d at 31-32 (citing Farmers Exch., 907 F.2d at 913-14). In finding jurisdiction, the Court relied upon the broad territory-of-coverage clause coupled with the fact that the CGL insurer had constructive knowledge that its insured, Domtar, had formerly operated a tar manufacturing plant in the state of Minnesota. Domtar, 533 N.W.2d at 33-34. Our decision in the present case is consistent with the reasoning in Domtar: Tennessee Farmers’ policy provisions that specifically contemplate out-of-state travel, coupled with the inherently mobile nature of the motor vehicle, is sufficient to charge Tennessee Farmers with constructive knowledge that the insured motor vehicle may travel to Minnesota and, while in that state, be involved in an accident.

Tennessee Farmers relies on this court’s decision in Zimmerman v. American Inter-Insurance Exch., 386 N.W.2d 825 (Minn.App.1986), review denied (Minn. July 31, 1986), in claiming lack of jurisdiction. Zimmerman involved a claim for Minnesota underinsured benefits against an Iowa insurer who did no business in Minnesota. This court found insufficient minimum contacts. There is a significant distinction between the present case and Zimmerman. Here, as we have noted, the territory-of-coverage clause subjects the insurer to the jurisdiction of Minnesota courts. In Zimmerman, by contrast, this court determined that there was nothing in the policy that subjected the insurer to Minnesota jurisdiction. Id. at 827 (“no contacts were created by the language of the policy.”)

For the reasons set out above, we affirm the trial court’s finding of jurisdiction.

II.

The next issue is whether Tennessee Farmers contractually agreed to provide Minnesota no-fault coverage under its policy provisions.

The interpretation of an insurance contract is a question of law as applied to the facts presented.. Meister v. Western Nat’l Mut. Ins. Co., 479 N.W.2d 372, 376 (Minn.1992). General principles of contract interpretation apply to insurance policies. St. Paul Sch. Dist. No. 625 v. Columbia Transit Corp., 321 N.W.2d 41, 45 (Minn.1982). When insurance policy language is clear and unambiguous, “the language used must be given its usual and accepted meaning.” Bobich v. Oja, 258 Minn. 287, 294, 104 N.W.2d 19, 24 (1960) (citation omitted).

The intent of the contracting parties is to be ascertained, not by a process of dissection in which words or phrases are isolated from their context, but rather from a process of synthesis in which the words and phrases are given a meaning in accordance with the obvious purpose of the insurance contract as a whole.

Cement, Sand & Gravel Co. v. Agric. Ins. Co., 225 Minn. 211, 216, 30 N.W.2d 341, 345 (1947).

State Farm claims that Tennessee Farmers has contractually undertaken to provide Minnesota no-fault benefits under the following conformity clause:

If an accident to which this policy applies occurs in any state or province other than the state in which your covered auto is principally garaged, we will provide limits of liability under this Part A and B for that accident as follows: 1. If the state or province has:
a. a financial responsibility law specifying minimum limits of liability for bodily injury or property damage higher than the limits shown in the Declarations, we will provide the higher specified minimum limits;
b. a compulsory insurance law requiring a nonresident to maintain insurance whenever the nonresident uses a vehicle in that state or province, we will provide the required minimum amounts and types of coverage, or the amounts and types of coverage provided in this policy, whichever is greater.

State Farm claims that no-fault coverage is a required coverage in Minnesota, even for nonresidents, see Minn.Stat. § 65B.50, subd. 2, and that Tennessee Farmers has contractually agreed to provide this coverage under the conformity clause. Tennessee Farmers maintains that the conformity clause applies only to liability coverage. We agree. First, the placement of the conformity clause in the policy supports the conclusion that it only applies to liability (i.e., fault-based) coverage. As with most standard auto policies, the Tennessee Farmers policy includes a declarations page, various endorsements to the standard policy, and a table of contents for the standard policy. In the table of contents, as well as in the body of the policy, the policy provisions are divided into general provisions (such as the definitions, the territory-of-coverage clause, and duties of the insured) and provisions specific to the various coverages (liability coverage, medical payments coverage, uninsured motorist coverage, etc.). The conformity clause upon which State Farm relies is clearly located in the section of the policy dealing with liability coverage. Liability coverage pays for damages “for which any covered person becomes legally hable to pay because of an accident.” It would not include any first-party claims, including Minnesota no-fault.

Second, the language of the conformity clause itself ties the clause to the liability section. The conformity clause is found under the heading “Limit of Liability”. The plain language of the prefatory section states “we will provide limits of liability under this Part A and B.” (Emphasis added.) Part A and B are fault-based coverages for claims against the insured for bodily injury and property damage. Finally, the use of the terms “financial responsibility law” and “compulsory insurance law” reflect the two types of liability coverage used in the various states. See Sanchez Estate v. Colonial Penn Ins., 367 Pa.Super. 198, 532 A.2d 857, 861 (1987) (finding plain language demonstrated purpose of conformity clause was to provide adequate liability coverage to meet requirements of “financial responsibility” and “compulsory insurance” laws of other states; thus, clause did not extend to another state’s no-fault coverage); see also Smetak & van Vliet, Minnesota Motor Vehicle Insurance Manual 248-250 (3d ed.2000) (explaining difference between “financial responsibility” law and “compulsory insurance” law in context of liability coverage).

State Farm further argues that the conformity clause applies to no-fault coverage because the language refers to “minimum amounts and types of coverage”. State Farm asserts that because the term “types” is plural, the conformity clause must refer to coverages other than liability. We disagree. Liability coverage itself encompasses two types of coverage: coverage for claims for bodily injury (Part A) and coverage for claims for property damage (Part B), and the word types is plural to cover both bodily injury and property damage.

In short, the language and context of the policy provisions demonstrate that Tennessee Farmers did not contractually agree to provide Minnesota no-fault coverage for this Minnesota accident. Therefore, we reverse the district court’s finding of coverage.

DECISION

Minnesota courts may constitutionally exercise personal jurisdiction over Tennessee Farmers. But Tennessee Farmers is not contractually obligated to provide Minnesota no-fault coverage to the Minnesota occupants or their subrogee, State Farm. We reverse the trial court’s grant of summary judgment in favor of State Farm and remand with directions to enter judgment in favor of Tennessee Farmers.

Affirmed in part, reversed in part, and remanded.

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

      . See Minn.Stat. § 65B.47, subd. 6 (2000) (permitting no-fault carrier to seek reimbursement from another carrier who has first priority to pay); Minn.Stat. § 65B.64, subd. 2 (2000) (granting expanded subrogation rights to assigned-claims bureau servicing insurer).

      . State Farm does not argue that Tennessee Farmers has a statutory duty to provide no-fault coverage, or could it do so. See Burgie v. League General Ins., Co., 355 N.W.2d 466, 469-70 (Minn.App. 1984), review denied (Minn. Feb.16, 1985) (holding that section 65B.50, subdivisions 1 and 2 (1982) requiring liability and no-fault coverage while out-of-state vehicles are operated in Minnesota applies only to insurers that are licensed to do business in Minnesota); see also Smetak & vanVliet,
        Minnesota Motor Vehicle Insurance Manual 72-77 (3d ed.2000).