author: CADY, Justice.

text:
    Bryan BRUMMER, Appellant, v. IOWA DEPARTMENT OF CORRECTIONS, Appellee.
    No. 01-1733.
    Supreme Court of Iowa.
    May 7, 2003.

      Pamela A. Vandel, Des Moines, for appellant.
    Thomas J. Miller, Attorney General, and Roxann M. Ryan, Assistant Attorney General, for appellee.
   CADY, Justice.

Bryan Brummer was convicted of indecent contact with a child and placed on probation for two years. The nature of Brummer’s conviction required that the Iowa department of corrections evaluate him under the state registration and notification system for sexual offenders. The department determined he presented a moderate risk to commit another sex offense. As an offender in the moderate risk category, Brummer was made subject to enhanced public notification of his conviction, location, and other information. He unsuccessfully challenged his classification in district court, but challenges it again in this appeal. For the reasons that follow, we reverse the decision of the district court and remand for further proceedings.

I. Background Facts and Proceedings.

In July 1998, Bryan Brummer agreed to run a grass roots community support group for adolescents with substance abuse problems in the Denison area. Approximately six months later, in January 1999, Brummer asked a fifteen-year-old female participant in the group for oral sex. The participant complied because “she had felt intimidated by Bryan.” The parents of the girl reported the incident to the Denison police department after learning of it two months later. Brummer was subsequently charged with sexual abuse in the third degree, and later pled guilty to the lesser offense of indecent contact with a minor. He was sentenced to two years probation.

Brummer’s conviction brought him under an umbrella of rules and regulations instituted to monitor convicted sex offenders in Iowa. See Iowa Code §§ 692A.1-.16 (2001); Iowa Admin. Code rs. 661- — 8.301-.305 (department of public safety (including division of criminal investigation)), 201 — 38.1-.3 (department of corrections), 441 — 103.31-35 (department of human services). One of the methods by which such offenders are monitored is a registration and notification system. This system requires any person convicted of any of a broad range of sex offenses to “register with the sheriff of the county of the person’s residence” if the offender is not “incarcerated, in foster care, or in a residential treatment program.” Iowa Code §§ 692A.3(1), 692A.2(4); see also id. § 692A.2(1) (“A person required to register under this chapter shall, upon a first conviction, register for a period of ten years commencing” from the date of release from one of several custodial arrangements.). Then, depending on the registered offender’s assessed risk of committing another sex offense, a differing amount of information about the offender may be disclosed publicly. See id. § 692A.13A.

To aid in assessing offenders, the Iowa department of corrections (Corrections) developed and adopted an assessment instrument that assigns a particular numerical “risk factor value” to a number of “risk factors” that are believed to be indicative of a registrant’s likelihood to reoffend. See id. § 692A.13A(1); Iowa Admin. Code r. 201 — 38.3(1). Each offender is assessed by a Corrections agent who assigns risk factor values based on information gleaned from a limited number of documents. Iowa Admin. Code r. 201 — 38.3(1). Some of the risk factor values include gradations based on the specific nature of the registrant’s offense. For example, the age of the victim may result in an assessed value of twenty points (if the victim was between eleven and sixteen years of age) or thirty points (if the victim was under ten or over sixty-three). An offender earns either all or none of the points in a category unless granted a “departure” from a risk factor value or from an assessed level of risk. The departure can be upward or downward. Interpretive guidelines issued by Corrections indicate a departure “should be used in unique circumstances when the facts of the case warrant a change in score or risk level.”

The goal of an assessment is to produce an accurate “total risk assessment score” for each individual offender. A score of zero to seventy indicates a registrant is a “low” risk to reoffend. A score of seventy-five to one hundred and five indicates a “moderate” risk. A score above one hundred and ten classifies an offender as a “high” risk. Those individuals at the moderate or high risk to reoffend threshold are generally considered “at risk” to reoffend. Iowa Code § 692A.13A(3)(6).

The “name, current address, criminal history, and a current photograph” of low risk offenders “may be provided to any law enforcement agency likely to encounter the registrant.” Iowa Admin. Code r. 661 — 8.304(l)(c )(1) (emphasis added). However, this same information must be provided to appropriate law enforcement agencies for registrants “at risk” to reof-fend. Id. r. 661 — 8.304(l)(c)(2). In addition, at-risk registrants are also subject to more extensive “affirmative public notification,” which may include disclosure of a greater variety of information to a wider scope of persons or agencies. Id.

On January 9, 2001, Corrections notified Brummer that he had been assigned a total risk assessment score of eighty-five, which placed him in the moderate risk category and qualified him for heightened affirmative public notification. Brummer was assessed risk factor values based on the nature of the sexual contact with his victim (twenty-five points), the age of his victim (twenty points), his relationship to his victim (twenty points), the number and nature of his prior crimes (five points), and for a history of drug abuse (fifteen points). He was not granted a departure in any category or from his presumed level of risk.

On January 22, Brummer filed a “Notice of Assessment Findings Appeal Form” with Corrections requesting his assessment be reconsidered and lowered. See id. r. 201 — 38.3(4), (5); see also id. r. 661— 8.304(l)(d )(1) (“Procedures for notifying a registrant of the results of a risk assessment and providing for appeals thereof shall be subject to the rules of the agency conducting the risk assessment.”). He particularly objected to the assignment of risk factor values for the number and nature of prior crimes and history of drug abuse risk factors. Although he acknowledged a prior charge of possession of two grams of marijuana when he was nineteen, Brummer argued that the assignment of both categories was unwarranted due to his voluntary pursuit of drug treatment and his efforts to better his life. His appeal was denied.

Brummer then filed a petition for judicial review of the Corrections decision. He not only raised the same issues he raised in his administrative appeal, but also argued there were constitutional dimensions underlying his risk assessment that necessitated an evidentiary hearing and that the assessment of a risk factor value based on his relationship to his victim was unwarranted. His petition for judicial review was denied on September 27, prompting this appeal.

II. Standard of Review.

We typically review a district court’s decision on a petition for judicial review of agency action for correction of errors at law. Greenwood Manor v. Iowa Dep’t of Pub. Health, 641 N.W.2d 823, 830 (Iowa 2002). The provisions of the Iowa Administrative Procedure Act, particularly the judicial review provisions of section 17A.19(8), govern this review. Id. However, in cases such as this one, where “constitutional issues are raised, ... we must make an independent evaluation of the totality of the evidence and our review ... is de novo.” Simonson v. Iowa State University, 603 N.W.2d 557, 561 (Iowa 1999).

III. The Necessity of an Evidentiary Hearing.

Brummer does not challenge Iowa’s right, generally, to maintain a sex offender registry, conceding “the state has a compelling interest in protecting its citizens by giving prompt notification to potential victims and relevant caregivers with respect to registrants who are accurately determined to be at risk.” Brief for Appellant at 23; see also In re S.M.M., 558 N.W.2d 405, 408 (Iowa 1997) (recognizing the purpose of chapter 692A is “to require registration of sex offenders and thereby protect society from those who because of probation, parole, or other release are given access to members of the public”). Nor does he deny that his conviction for indecent contact with a minor required his registration with the state’s sex offender registry. See Iowa Code § 692A.2(1); Iowa Admin. Code r. 201 — 38.3(2). Instead, Brummer challenges the sufficiency and fairness of the process with which his risk to reoffend was assessed.

Brummer argues that a moderate risk to reoffend assessment and the threatened public notification arising from the assessment impinges on a liberty interest protected by the Due Process Clauses of the federal and state constitutions by permanently and publicly branding him as a sex offender likely to commit another sex offense. See U.S. Const, amends. V, XIV, § 1; Iowa Const. art. I, § 9. He asserts that this proposed infringement entitles him to procedural due process of law in the course of Corrections’ assessment process, namely notice and an opportunity to be heard in the context of a “contested case” proceeding. See Greenwood Manor, 641 N.W.2d at 834 (“A contested case entitles [a party] to an adversarial hearing with the presentation of evidence and arguments and the opportunity to cross-examine witnesses and introduce rebuttal evidence.”). Corrections responds to these assertions by arguing that Brummer was provided adequate notice and was not entitled to an evidentiary hearing because the administrative process underlying the assessment was “other agency action” which does not warrant -extensive due process procedures. See id. (“At most, other agency action entitles affected parties to an informal hearing” in addition to “those procedures voluntarily promulgated by the agency” and “the general requirement that the agency act reasonably”).

As both parties recognize, the core issue raised by Brummer’s appeal is the determination of the precise nature of the agency action that was undertaken in his risk assessment. All agency action falls into one of three categories, each of which involves different procedural processes and protections: “ ‘rulemaking;’ ‘adjudication’ (otherwise known as [a] contested case); and ‘other agency action.’ ” Id. at 833 (citation omitted). Neither party argues that Brummer’s risk assessment constituted rulemaking, but the parties disagree significantly over whether the assessment involved a contested case or other agency action. Because other agency action is defined as “action that does not constitute rulemaking or a contested case” their disr pute evolves into a single key question: is the risk assessment a contested case? Id. at 834. This is a question permeated by important constitutional considerations implicating both the federal and state constitutions.

A contested case is a proceeding “in which the legal rights, duties or privileges of a party are required by Constitution or statute to be determined by an agency after an opportunity for an evidentiary hearing.” Iowa Code § 17A.2(5). Thus, to determine whether particular agency action is a contested case, we must examine whether a hearing is required by statute or constitution. See id.; Greenwood Manor, 641 N.W.2d at 834. However, even if we determine a hearing is required under either body of law, we must also consider whether an exception to the evi-dentiary hearing requirement comes into play. See Greenwood Manor, 641 N.W.2d at 837. We take up each of these questions in turn.

1. Statutory Hearing Requirement.

Brummer has never asserted that he has either an express or implied statutory right to a hearing arising out of his risk assessment. See State v. Webb, 516 N.W.2d 824, 828 (Iowa 1994); Iowa R.App. P. 6.14(l)(c). Moreover, an examination of chapter 692A reveals that such an argument likely would have failed if properly presented. See Greenwood Manor, 641 N.W.2d at 835 (although “the legislature does not need to expressly provide for an evidentiary hearing in order to find the requirement of a contested case” we are “guided by what the legislature said, not what it could have said”).

2. Constitutional Hearing Requirement.

The absence of a statutory hearing claim brings us to the primary fighting issue in this case: whether there is a constitutional right to a hearing as part of the risk assessment process arising from the Due Process Clauses of the federal and Iowa constitutions. See U.S. Const. amends. V, XIV, § 1; Iowa Const. art. I, § 9. “Generally, a person has a constitutional due process right to an evidentiary hearing in accordance with contested case procedures if the underlying proceeding involves adjudicative facts,” i.e., “individualized facts peculiar to the parties, [which] ordinarily ‘ “ ‘answer the questions of who did what, where, when, how, why, with what motive or intent.’ ” ’ ” Greenwood Manor, 641 N.W.2d at 836 (quoting Allegre v. Iowa State Bd. of Regents, 349 N.W.2d 112,115 (Iowa 1984)). However, a party in not entitled to an evidentiary hearing “if the agency decision rests on legislative facts,” or those “generalized factual propositions, often consisting of demo-graphical data and statistics compiled from surveys and studies, which aid the decision-maker in determining questions of policy and discretion.” Id.

Brummer’s case presents the prototypical proceeding involving adjudicative facts. However, the process accorded Brummer up to this point has precluded a full consideration of those facts. Brummer has argued most vociferously over the assessment of risk factor values for a history of drug abuse and the number and nature of prior crimes, but also claimed that there were problems inherent in the assessment of points for the nature of his relationship to his victim. Each of these areas requires determinations resting on adjudicative facts. For instance, the guidelines issued to assist in the assessment process indicate that the “relationship to victim” risk factor category “is used to identify perpetrators who take advantage of their position or status in order to offend such as: doctors, dentists, counselors, clergy, day care workers, teachers etc.” The limited record in this case indicates that Brummer had taken a position “running” meetings “for a youth support group for adolescents with substance abuse problems.” Although this information might indicate that Brummer took “advantage of his position or status in order to offend,” there is no real context in which to evaluate whether this was actually the case.

This absence of context is indicative of the vacuum in which decisions relevant to Brummer were made. Adjudicative facts should have been presented, considered, and processed to determine the appropriateness of assigning a risk factor value and to ensure the fundamental constitutional values guaranteed by the Due Process Clauses and the Iowa Administrative Procedure Act. The facts missing in Brum-mer’s ease are not “generalized factual propositions ... consisting of demographical data and statistics compiled from surveys and studies, which aid the decision-maker in determining questions of policy and discretion,” but are instead “individualized facts peculiar to” Brummer, his offense, and any defense he might mount. Id. Because the underlying proceeding— the risk assessment — involves adjudicative facts, an evidentiary hearing is required unless this case falls under one “of the exceptions to the evidentiary hearing requirement for proceedings involving adjudicative facts.” Id. at 837.

3. Applicability of the Exceptions.

Our previous cases considering the necessity of an evidentiary hearing in the context of a contested case have enumerated four exceptions to the general rule that a hearing is required when an underlying proceeding is based upon adjudicative facts:

[the case involves] (1) interests of an individual that cannot be characterized as either “life, liberty, [or] property” within the meaning of the due process clause of the fourteenth amendment because no entitlement can be established; (2) absence of relevant disputed facts; (3) emergency agency action; and (4) use of inspections, examinations, and testing to determine relevant facts.

Allegre, 349 N.W.2d at 115 (citing Arthur Earl Bonfield, The Definition of Formal Agency Adjudication Under the Iowa Administrative Procedure Act, 63 Iowa L.Rev. 285, 325-35 (1977)). But see Iowa Code § 17A.10A (providing for the application of most contested case procedures “even though there is no factual dispute in the particular case”). None of the latter three exceptions are at issue in this case: there are numerous disputed facts, no indication Brummer’s assessment involved emergency action by Corrections, and no apparent “use of inspections, examinations, and testing to determine relevant facts.” Allegre, 349 N.W.2d at 115 (citation omitted); see also Bonfield, 63 Iowa L.Rev. at 334-35 (defining and explaining the exception arising from the “use of inspections, examinations, and testing”). On the other hand, the first factor presents yet another highly disputed issue: did Brummer even have a cognizable life, liberty, or property interest in the first place? See Allegre, 349 N.W.2d at 115.

Brummer’s entire claim hinges upon his argument that the danger of being incorrectly assessed and the resultant “branding” as a sex offender at risk to commit another sex offense arising from an incorrect assessment implicate a liberty interest. Corrections responds to this argument by asserting that the mere dissemination of Brummer’s status as a convicted sex offender does not implicate a constitutional interest, and no other sufficient interest exists in Brummer’s case. Both parties agree that the resolution of this issue turns on our application of a standard elucidated by the United States Supreme Court in Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976).

In Paul, the Court observed “reputation alone, apart from some more tangible interests such as employment,” is insufficient “to invoke the procedural protection of the Due Process Clause.” Id. at 701, 96 S.Ct. at 1161, 47 L.Ed.2d at 414. This observation created what is now commonly referred to as the “stigma plus” standard. See Jill D. Moore, Comment, Charting a Course Between Scylla and Charybdis: Child Abuse Registries and Procedural Due Process, 73 N.C. L.Rev.2063, 2100 n. 226 (1995) (summarizing the history of the “stigma plus” terminology). Under this standard, a claimant basing a constitutional claim on damage to his reputation must show more than simply damage to his reputation to establish a constitutionally protected liberty interest. See Roth v. Reagen, 422 N.W.2d 464, 467-68 (Iowa 1988). The standard can be met by showing that action taken by a state agency “deprive[s] a person of his or her liberty by damaging the person’s reputation so severely that associational or employment opportunities are impaired or foreclosed.” Bennett v. City of Redfield, 446 N.W.2d 467, 470 (Iowa 1989) (citing Board of Regents v. Roth, 408 U.S. 564, 573, 92 S.Ct. 2701, 2707, 33 L.Ed.2d 548, 558-59 (1972)).

In light of the nature of the issue and the record in Brummer’s case, we agree that the risk of an erroneous assessment and the associated opprobrium arising from such an assessment implicate a liberty interest protected by the Due Process Clauses. We are mindful that a record of conviction for a sex offense is a public record readily accessible, under statutory guidelines, to the general populace. See Iowa Code § 22.7(9). However, sex offender risk assessment and the resulting public notification go far beyond the mere redisclosure of an offender’s conviction. Instead, a Corrections agent takes the additional step of assessing an offender based on a limited documentary record that may or may not provide the best evidence of the factors indicative of an offender’s likelihood to reoffend. See Iowa Admin. Code r. 201 — 38.3(1). Then, after completing the assessment and notifying an offender of the results, and pending limited appellate procedures, the individual’s status as a convicted sex offender together with an additional classification of his risk to reoffend, can be transmitted, in varying extent and degree, to different members of the public. This entire process clearly implicates a liberty interest in that it threatens the impairment and foreclosure of the associational or employment opportunities of persons who may not truly pose the risk to the public that an errant risk assessment would indicate. Ultimately, we believe the Oregon Supreme Court best explained this concept in the course of its consideration of an issue similar to the one presented here:

When a government agency focuses its machinery on the task of determining whether a person should be labeled publicly as having a certain undesirable characteristic or belonging to a certain undesirable group, and that agency must by law gather and synthesize evidence outside the public record in making that determination, the interest of the person to be labeled goes beyond mere reputation. The interest cannot be captured in a single word or phrase. It is an interest in knowing when the government is moving against you and why it has singled you out for special attention. It is an interest in avoiding the secret machinations of a Star Chamber. Finally, and most importantly, it is an interest in avoiding the social ostracism, loss of employment opportunities, and significant likelihood of verbal and, perhaps, even physical harassment likely to follow from designation. In our view, that interest, when combined with the obvious reputational interest that is at stake, qualifies as a “liberty” interest within the meaning of the Due Process Clause.

Noble v. Bd. of Parole & Post-Prison Supervision, 327 Or. 485, 964 P.2d 990, 995-96 (1998).

A liberty interest is at stake whenever a sex offender risk assessment is conducted in Iowa. Thus, none of the exceptions to the general rule calling for an evidentiary hearing are applicable in this case. Brum-mer is entitled to an evidentiary hearing as part of his risk assessment process, and his case must be remanded to Corrections for such a hearing in the context of a contested case proceeding.

IV. Conclusion.

Brummer made the additional claim that, regardless of the nature of the agency action underlying his assessment, portions of his assessment were incorrectly completed. He also requested that we grant him a departure from one or several of his assessed risk factor values or from his total risk assessment score. Our determination that the agency action involved in this case requires an evidentiary hearing means that we do not need to reach these questions. Instead, these issues can be taken up in the context of a contested case proceeding. We remand this case to Corrections for additional proceedings consistent with this opinion.

REVERSED AND REMANDED.

      . Iowa Code section 17A.19(8)(b) (2001) (em- , phasis added) provides, in suits for judicial review, ''[t]he validity of agency action must be determined in accordance with the standards of review provided in this section, as applied to the agency action at the time that action was taken." This principle guides our review of Brummer’s appeal and means that we must focus on the agency’s actions during the time period in which Brummer was notified of his assessment (January 9, 2001), appealed (January 22), and had his appeal denied at the administrative level (February 12). When citing the administrative rules under which Brummer was assessed, both parties cite to the current form of the rules, which includes revisions to the Department of Corrections’ (Corrections) rules adopted pursuant to a rulemaking published March 7, 2001, and effective thirty-five days later, on April II. See Mar. 7, 2001 Iowa Admin. Bull, at 1400 (ARC 0519B). The provisions of Iowa Code section 17A. 19(8)(¾) would seemingly mandate a consideration of the rules in effect before the March 7 revisions given the timing of Brummer's administrative assessment and appeal. However, our conclusions on the nature of the administrative action in this case are the same no matter which rules were in place because the issues raised by Brummer arise under either version of the rules. We have chosen to describe the registry and notification system as it now exists in setting the context for his appeal.

      .Similar laws providing for sex offender registration and community notification exist under federal law as well as the law of every state and the District of Columbia. Smith v. Doe, 538 U.S. -, -, 123 S.Ct. 1140, 1145, 155 L.Ed.2d 164, 175 (2003); see also Wayne A. Logan, A Study in "Actuarial Justice”: Sex Offender Classification Practice and Procedure, 3 Buff.Crim. L.Rev. 593 (2000) (discussing the diversity of methods by which jurisdictions sort and classify offenders potentially subject to registration and community notification). Although there are variations in the registration and notification schemes between jurisdictions, each law is commonly referred to as a "Megan's Law” in recognition of the child, Megan Kanka, whose 1994 sexual assault and murder "gave impetus to laws for mandatory registration of sex offenders and corresponding community notification.” Smith, 538 U.S. at-, 123 S.Ct. at 1145, 155 L.Ed.2d at 175.

      . All agencies responsible for undertaking assessments utilize the risk assessment instrument adopted by Corrections. See Iowa Code § 692A.13A(1); Iowa Admin. Code rs. 661— 8.304(l)(a), 441 — 103.34. Similarly, administrative rules adopted by the Department of Public Safety (Public Safety) describe the method by which public notification is carried out for all offenders,, including those assessed by another agency. See Iowa Code § 692A.13A(3); Iowa Admin. Code rs. 201— 38.3(6), 441 — 103.35.

      . A risk assessor's discretion is eliminated in situations in which an "override” is warranted. An override applies if the offender (1) "has a prior felony conviction for a sex crime,” (2) "inflicted serious physical injury or caused death,” (3) "made a recent threat that he will reoffend by committing a sexual or violent crime,” or (4) if "[tjhere has been a clinical assessment that the offender has a psychological, physical, or organic abnormality that decreases the ability to control impulsive sexual behavior.” If an offender is subject to an override, his risk to reoffend is presumed to be "high.” Brummer’s assessment did not include an override.

      . Affirmative public notification for those registrants at risk to reoffend (moderate or high risk) requires Public Safety to "consult with the county attorney, sheriff, and local law enforcement agencies with jurisdiction in the registrant’s place of residence, employment, school attendance, and other locations that the registrant is known to frequent, regarding appropriate forms of affirmative public notification.” Iowa Admin. Code r. 661— 8.304(l)(c )(2). "[Pjersons likely to encounter the registrant may be notified through the following means[:]”
      1.Notification of agencies or organizations in the community ... where there are potential victims.
      2. Personal or written notification of neighbors ....
      3. Releases to media outlets which cover the community or communities ... including but not limited to the registrant's name and photograph.
      4. Distribution of leaflets to residences and businesses....
      5. Posting of notices in public locations.... Id. Iowa, like other states, also has established a searchable Internet database that includes information on registrants considered at risk to reoffend. See Iowa Sex Offender Registry, at http://www.iowasexoffen-der.com/search.php (implementing Iowa Code section 692A.13(3)(c) and Iowa Administrative Code rule 661 — 8.304(l)(c )(5)).


source: Caselaw Access Project

author: NEUMAN, Justice.

license: Public Domain

text:
    In re the Detention of Danny R. BARKER. State of Iowa, Appellee, v. Danny R. Barker, Appellant.
    No. 02-0320.
    Supreme Court of Iowa.
    May 7, 2003.

      Mark Smith, First Assistant State Public Defender, for appellant.
    Thomas J. Miller, Attorney General, and Denise A. Timmins and Roxann M. Ryan, Assistant Attorneys General, for appellee.
   NEUMAN, Justice.

Respondent, Danny R. Barker, appeals his commitment as a sexually violent predator under Iowa Code chapter 229A (2001). He seeks reversal based on an alleged error in one of the court’s jury instructions. Finding no error, we affirm.

The facts underlying Barker’s commitment are not disputed. He has a history of committing violent sexual assaults, principally against minor boys, dating back to 1981. In 1994 he was convicted of third-degree sexual abuse and incest involving his ten-year-old niece. He was nearing the end of his incarceration for this offense when the State petitioned to have him committed as a sexually violent predator.

Pertinent to this appeal, the trial court gave the following marshalling instruction:

INSTRUCTION NO. 8
To find the Respondent is a sexually violent predator, each of the following elements must be proved beyond a reasonable doubt.
1. The Respondent has been convicted or charged with a crime of sexual violence;
2. The Respondent suffers from a mental abnormality;
3. Because of that mental abnormality, the Respondent has serious difficulty controlling his sexually violent behavior;
4. That such mental abnormality makes the Respondent likely to engage in predatory acts constituting sexually violent offenses if not confined in a secure facility.
If you find from the evidence that each of these elements has been proven beyond a reasonable doubt, then it will be your duty to return a verdict that the Respondent is a sexually violent predator.
If, however, you have a reasonable doubt as to any one of the above elements, then you have a reasonable doubt, and it will be your duty to return a verdict that the Respondent is not a sexually violent predator.

Barker argued at trial, and now urges on appeal, that the court should have added the word “predatory” before the phrase “sexually violent behavior” in the third numbered element above. He claims the modification is required in order to distinguish ordinary criminal recidivist behavior from predatory behavior warranting civil commitment under chapter 229A. The State counters the requested modification would have been superfluous and incorrect. For the reasons that follow, we agree.

I.In two recent cases this court clarified that, in order to conform chapter 229A to the constitutional requirements set out by the Supreme Court in Kansas v. Crane, 534 U.S. 407, 413, 122 S.Ct. 867, 870, 151 L.Ed.2d 856, 862 (2002), the State must prove the respondent has “serious difficulty” in controlling his behavior. In re Detention of Barnes, 658 N.W.2d 98, 101 (Iowa 2003); In re Detention of Gonzales, 658 N.W.2d 102, 103 (Iowa 2003). Although the case now before us was tried before Barnes and Gonzales were decided, the court — over the State’s objection— modified the uniform instruction consistent with Crane.

The question is whether the court was required to go further, as Barker now suggests. He frames his argument this way:

[T]he Iowa law goes further than the Kansas law in outlining who fits the definition of a sexually violent predator. Only those individuals who have serious difficulty controlling predatory acts of sexually violent behavior fit the Iowa definition of a sexually violent predator. Iowa Code § 229A.2(9) (2001) (emphasis added). In Mr. Barker’s case, this is a critical distinction. All the experts who testified, even those retained by the State of Iowa, agreed that, although Mr. Barker had been convicted of multiple sexual offenses, only one of them, the one to which he pled guilty in 1984, fit the Iowa definition of predatory.

II. Barker correctly asserts, and the State concedes, that Iowa’s sexually violent predator statute focuses on “predatory” acts — a concept missing in the Kansas statute at issue in Crane. By definition, the term “predatory” means “acts directed toward a person with whom a relationship has been established or promoted for the primary purpose of victimization.” Iowa Code § 229A.2(5) (emphasis added); see Iowa Uniform Jury Instr. 3700.6 (defining predatory acts). The court incorporated this definition in its jury instructions.

As the record before us reveals, rates of re-offense among incest offenders generally are lower than offense rates among non-incest offenders. Because Iowa’s definition of “predatory” excludes incest offenders, it captures only the offenders with higher recidivism rates, thus narrowing the reach of the statute.

III. Contrary to the argument advanced by Barker on appeal, the court instructed the jury in a manner consistent with Iowa’s statutory scheme and the due process concerns outlined by the Supreme Court in Crane. Not only was the jury required to find that the respondent has serious difficulty controlling his sexually violent behavior, the jury was also required to find that the same mental abnormality making it difficult for Barker to control his behavior makes him likely to engage in predatory acts. This was a correct statement of the law because, contrary to Barker’s suggested coupling (or repetition) of the concepts, the statutory definition of “predatory” relates to the nature of the relationship between the respondent and his victim, not the nature of the sex act itself. In other words, under the Iowa scheme of things, the offending conduct must be sexually violent and against a particular victim to qualify as predatory.

“It is axiomatic that courts must correctly instruct the jury on the law pertaining to material issues supported by evidence in the record.” In re Detention of Williams, 628 N.W.2d 447, 459 (Iowa 2001). A court need not give a requested instruction unless it (1) correctly states the law, (2) has application to the case, and (3) is not covered elsewhere in the instructions. See Beyer v. Todd, 601 N.W.2d 35, 38 (Iowa 1999). Here, the instruction tendered by Barker would have mischaracter-ized the statute by incorrectly modifying “sexually violent behavior” rather than honoring the statute’s focus on the predatory nature of the act as a separate concept involving respondent’s relationship with the victim. The district court properly recognized this distinction, instructing in accordance with the statute. Thus no reversal of Barker’s commitment under chapter 229A is warranted.

AFFIRMED.


text:
    BANKERS STANDARD INSURANCE CO., Appellee, v. Carson P. STANLEY, Appellant.
    No. 02-0284.
    Supreme Court of Iowa.
    May 7, 2003.

      James J. Roth of Roth & Henkels, Du-buque, for appellant.
    John M. Bickel and Robert K. Porter of Shuttleworth & Ingersoll, P.L.C., Cedar Rapids, for appellee.
   CADY, Justice.

In this appeal we must decide if a contested case settlement in a workers’ compensation action under Iowa Code section 85.35 (2001) bars a subsequent claim by the employer and insurer under section 85.22(1) for indemnification in an employee’s action for damages against a third-party tortfeasor for the amount of workers’ compensation paid to the employee. The district court concluded the employer was not barred from seeking indemnification following a contested case settlement. On our review, we reverse the decision of the district court and remand the case for entry of judgment for the employee.

I. Background Facts and Proceedings.

Carson P. Stanley (Stanley) was employed by G-Line Trucking, Inc. He was injured while in the course of his employment on October 1, 1997. The injuries resulted from a motor vehicle accident with the driver of an automobile.

Stanley filed a claim against G-Line Trucking and its compensation carrier, Bankers Standard Insurance Company (Bankers Standard), for workers’ compensation benefits as a result of the injuries sustained from the accident. The claim resulted in a special case compromise settlement between the parties in the amount of $63,065. The written settlement agreement was submitted to the workers’ compensation commissioner for approval.

The workers’ compensation commissioner approved the settlement by an order entered on February 18, 1999. The order provided that the payment of the agreed settlement amount by the employer and insurance carrier would discharge them from further liability to the claimant and constituted “a final bar to any further rights arising under chapters 85, 85A, 86, 87 or 17A, Code of Iowa.”

Stanley subsequently made a claim against the driver of the automobile for damages arising from the October 1997 incident. This claim resulted in a settlement with the driver’s insurance carrier of $50,000. Bankers Standard then brought an action for indemnification against Stanley pursuant to Iowa Code section 85.22(1). Bankers Standard claimed it was entitled to the $50,000 settlement amount, less the amount of attorney fees incurred in obtaining the settlement. Iowa Code § 85.22(1).

Both Stanley and Bankers Standard moved for summary judgment. Stanley argued that indemnification was barred by the language of Iowa Code section 85.35 providing “an approved settlement shall constitute a final bar to any further rights arising under this chapter.” He also argued that the language of the settlement agreement approved by the commissioner barred any indemnification claim.

The district court granted summary judgment for Bankers Standard. It found the intent of the settlement agreement was to protect Bankers Standard from further claims by Stanley, not to protect Stanley from any claim by Bankers Standard for indemnification. Similarly, it concluded the “final bar” language of section 85.35 was only intended to protect employers and insurance carriers from further lawsuits.

Stanley appeals. The sole issue he presents is whether section 85.35 bars indemnification claims following a contested case settlement. He does not pursue his claim raised in district court that the settlement agreement barred the claim.

II.Standard of Review.

This case involves the review of a grant of summary judgment and the interpretation of a statute. Our review is for errors at law. Iowa R.App. P. 6.4.

III. Statutory Construction.

Courts interpret statutes with a goal to effectuate the intent of the legislature. Miller v. Marshall County, 641 N.W.2d 742, 747-48 (Iowa 2002). In determining legislative intent, courts look to the language of the statute, the underlying purpose and policies of the statute, and the consequences of different interpretations. State v. Carpenter, 616 N.W.2d 540, 542 (Iowa 2000). Intent is revealed by what the legislature has said, not by “what it could or should have said.” Theisen v. Covenant Med. Ctr., Inc., 636 N.W.2d 74, 80 (Iowa 2001).

“When a statute is unambiguous,” courts do not need to “look beyond the plain meaning of the express statutory” language. Miller, 641 N.W.2d at 748. If a statute is ambiguous, then the rules of statutory construction are utilized to help ascertain legislative intent. Id.

It is also important to keep in mind that our workers’ compensation laws are for the benefit of the worker. Caterpillar Tractor Co. v. Shook, 313 N.W.2d 503, 506 (Iowa 1981). Consequently, they should be liberally construed with a view toward that purpose. Id.

IV. Interpretation of Iowa Code Section 85.35.

Section 85.35 allows for the settlement of contested workers’ compensation cases. It permits the parties in a contested case to enter into a settlement providing for the final disposition of the claim, subject to approval of the settlement by the workers’ compensation commissioner. The statute also enumerates eight additional conditions and prerequisites. After enumerating these conditions, the statute provides that the approved settlement is binding on the parties and is not an original proceeding. It then sets forth the specific provision at issue in this case:

Notwithstanding any provisions of this chapter and chapters 85A, 85B, 86, and 87, an approved settlement shall constitute a final bar to any further rights arising under this chapter and chapters 85A, 85B, 86, and 87.

Iowa Code § 85.85.

The dispute is generated because section 85.22, one of the “provisions of this chapter,” grants employers a right of indemnification in an employee’s third-party claim for damages. Id. § 85.22. There is otherwise no right to indemnity independent of the statute. See Daniels v. Hi-Way Truck Equip., Inc., 505 N.W.2d 485, 490 (Iowa 1993). Thus, the narrow question we face is whether the legislature intended the settlement of a contested workers’ compensation ease under section 85.35 to bar all statutory workers’ compensation rights of the parties or only the rights of the worker.

We begin by considering the specific language used by our legislature in section 85.35. By itself, this language is plain and clear. It provides, without qualification or limitation, that an approved settlement constitutes “a final bar to any further rights” under the workers’ compensation chapter and successive compatible chapters. A settlement is, of course, an agreement between the employee and employer or insurer, and the workers’ compensation laws grant various rights to these parties. See Iowa Code § 85.35. The workers’ compensation chapter specifically grants the employer or insurer the right to be indemnified when an employee recovers damages in an action against a third party. Id. § 85.22(1). Thus, if section 85.35 means what it says, a contested case settlement bars the rights of an employer or insurer to indemnification against the employee under section 85.22(1).

Bankers Standard argues that the bar to an employer’s right to indemnification was not an intended consequence of the “final bar” language of section 85.35. It asserts it would be illogical to interpret the statute to bar indemnification rights following a settlement, yet permit indemnification if the parties proceed to a final hearing. It also points out that a bar to the right of indemnification is contrary to the purposes and objectives of indemnification because it will permit double recovery for employees following a settlement. Bankers Standard further argues such a bar defeats the goals of encouraging and promoting settlement under section 85.35 because the bar becomes a disincentive for an employer to settle. Bankers Standard believes employers and insurers will reject settlements to preserve their right of indemnification following a hearing.

We agree with Bankers Standard that one of the purposes of providing indemnification under section 85.22(1) is to permit an employer to recoup from tortious third parties money it has been required to pay. Daniels, 505 N.W.2d at 489. Indemnification also prevents double recovery by employees. Id. We also agree the public policy of this state encourages settlement of contested workers’ compensation claims. See Stufflebean v. City of Fort Dodge, 233 Iowa 438, 441-42, 9 N.W.2d 281, 283 (1943) (describing the purposes of the workers’ compensation act, including avoiding litigation and reducing expenses); see also Wright v. Scott, 410 N.W.2d 247, 249 (Iowa 1987) (“The law favors settlement of controversies.”); World Teacher Seminar, Inc. v. Iowa Dist. Ct., 406 N.W.2d 173, 180 (Iowa 1987) (Wolle, J., concurring specially) (listing several Iowa cases supporting settlement). However,’ a prohibition against indemnification following a contested case settlement is neither contrary to the underlying purposes of indemnification or a disincentive to settle.

A legislative bar to indemnification upon settlement of a contested case does not defeat the objectives of indemnification, but merely recognizes that the issue of indemnification, when present, must be considered in the process of settling a contested case because the settlement will otherwise bar the statutory rights of the parties available under the workers’ compensation laws. Thus, the “final bar” language of section 85.35 merely defines the scope of a contested case settlement, which requires the parties to consider all rights within the scope of settlement. Similarly, it is not inconsistent to permit indemnity following a contested hearing but bar indemnity following a contested case settlement. A settlement is a voluntary surrender of rights.

Bankers Standard points out that insurers commonly use their right to indemnity granted under section 85.22(1) as a bargaining chip in negotiating settlements under section 85.35. As a bargaining chip, insurers will agree to waive indemnity as an incentive for the employee to accept the settlement. It is in this manner that the right of indemnity promotes settlement. However, little changes if an employer or insurer is barred from pursuing indemnity following a settlement. The employer or insurer can still play the chip as an incentive to promote settlement. The difference is that the employer or insurer cannot hold the bargaining chip back, but must play it as part of the settlement. Nevertheless, it does not provide a disincentive to settle the case.

Finally, Bankers Standard argues that we have tacitly interpreted section 85.35 to exclude indemnification from the “final bar” provision because we have decided prior cases in which an employer has sought indemnification following a settlement without questioning the employer’s right to pursue indemnification. See Thomas v. Hansen, 524 N.W.2d 145, 147-48 (Iowa 1994). Such cases, however, do not involve the exercise of our authority to interpret statutes, and cannot be used to support a claim for any particular interpretation of a statute. We have never previously been asked to address the issue presented in this case, and we are not restricted in our task by prior cases that did not involve the issue.

The language of section 85.35 contains no limitation on the “final bar to any further rights” other than the bar applies only to those rights arising under chapters 85, 85A, 85B, 86, and 87. Iowa Code § 85.35. Contrary to Bankers Standard’s position, we cannot read something into the statute “ ‘that is not apparent from the words’ ” selected by our legislature. State ex rel. Miller v. Midwest Pork L.C., 625 N.W.2d 694, 699 (Iowa 2001) (citation omitted). A workers’ compensation statute must be construed according to its language. Ehteshamfar v. UTA Engineered Sys. Div., 555 N.W.2d 450, 453 (Iowa 1996). Additionally, the objectives and purposes of the statute are not undermined in any way by an interpretation that bars the right of indemnification. To the contrary, the objectives and purposes of the statute are served. Therefore, we hold that a section 85.35 settlement bars an employer’s and insurer’s indemnification right under section 85.22(1). This interpretation not only matches the language of the statute and promotes its purposes and objectives, but it is also compatible with our obligation to construe workers’ compensation statutes liberally in favor of the worker. It is better for the worker to know, prior to settling a contested case, that the settlement will cut off all rights between the parties, and that the pursuit of any legal rights against a third party after the settlement will be free from a claim of indemnity by the employer or its insurer.

V. Conclusion.

We conclude a settlement under section 85.35 bars an employer’s or insurer’s statutory right to indemnification under section 85.22(1). We reverse the judgment of the district court and remand the case for entry of judgment for Stanley.

REVERSED AND REMANDED.

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


text:
    In re the MARRIAGE OF Charitie S. HOWARD and Dennis M. Howard, Jr. Upon the Petition of Charitie S. Howard, Appellant, and Concerning Dennis M. Howard, Jr., Respondent, Dennis Howard, Sr., and Connie Howard, Intervenors-Appellees.
    No. 02-0211.
    Supreme Court of Iowa.
    May 7, 2003.

      Anjela A. Shutts of Whitfield & Eddy, P.L.C., Des Moines, for appellant.
    Eric R. Eshelman, Des Moines, for ap-pellees.
   CADY, Justice.

In Santi v. Santi 633 N.W.2d 312 (Iowa 2001), we determined that at least one subsection of the Iowa grandparent visitation statute was unconstitutional on its face. In this appeal, we revisit the question of the statute’s constitutionality to determine whether the section of the statute permitting a petition for grandparent visitation when the parents of a child are divorced is also unconstitutional. We conclude that it is unconstitutional on its face, and we reverse the decision of the district court and dismiss this petition for grandparent visitation.

I. Background Facts and Proceedings.

Delainey Howard (Delainey) was born on April 28, 1999. Her parents, Charitie Howard (Charitie) and Dennis Howard, Jr., (Dennis) were in the process of dissolving their marriage. The pending dissolution prompted Dennis’ parents, Connie and Dennis Howard, Sr., (Howards) to file a petition for grandparent visitation to establish their right to visitation with Delai-ney. See Iowa Code § 598.35(1) (permitting a petition for grandparent visitation when “[t]he parents of the child are divorced.”). A final decree was issued in the dissolution action on February 16, 2000. One of the issues decided by the decree was the visitation arrangement under which Dennis and the Howards were to have subsequent contact with Delainey. The district court granted Dennis joint legal custody and unsupervised visitation, but made the exercise of his visitation right contingent on his resumption of drug treatment and counseling. The court did not grant the Howards independent visitation, choosing instead to allow them visitation through their son.

Unfortunately, Dennis failed to pursue drug treatment and counseling as ordered. In March 2000, Charitie filed an application to alter his visitation privileges. In response, the Howards filed a motion for intervention, requesting again that they be granted visitation independent of their son. The district court ordered Charitie and Dennis to participate in mediation to settle on an agreeable revised visitation schedule. When Dennis failed to show for the mediation, the court put in place its own supervised visitation schedule that again did not provide for independent visitation for the Howards. The visitation alteration made no real difference to Dennis — his contact with Delainey was waning — but it made all the difference to the Howards, who wished to have regular contact with their granddaughter and considered the current visitation arrangement an impediment to that goal.

In May 2000, with the possibility of further legal proceedings looming, Charitie and the Howards attempted to cooperate under an informal visitation arrangement. Charitie contacted the Howards to set-up the first visit, which later occurred at a local restaurant. A second visit followed in June. From all outward appearances, both visits went well. During the second meeting, the Howards asked Charitie to allow them to visit Delainey without Chari-tie present. Charitie responded by stating that she wanted her daughter to have a more established relationship with the Howards before taking that step. A third visit soon occurred at a local park, and a fourth followed at the zoo.

During the fourth visit, the Howards requested that Delainey be present at festivities celebrating their twenty-fifth wedding anniversary and asked Charitie to come with Delainey if it would make her feel more comfortable about the visit. Charitie denied the Howards’ request and, in the course of the conversation, stated that she did not foresee a time when she would permit the Howards to have an unsupervised, overnight visit with Delainey. This conversation apparently did irreparable damage to the temporary peace that had been forged between the parties. Soon afterward, the Howards filed an application for modification of the decree of dissolution of Charitie and Dennis’ marriage as it related to grandparent visitation in the district court, seeking once again to establish visitation rights independent of those of their son. Before Charitie was served with the application, one final visit occurred, again at a public park. Charitie was subsequently served with the application and the informal visitation arrangement came to an abrupt end.

At trial, the already tenuous relationship between Charitie and the Howards deteriorated into accusations and finger pointing. The Howards claimed that Charitie had only begrudgingly allowed their visits with Delainey in the first place, and when the visits did occur, they were under the oppressive supervision of Charitie and her mother (Delainey’s maternal grandmother), who had also been present at each meeting. Moreover, they claimed that Charitie maintained a double standard that permitted ample contact with Delainey for her maternal relatives, but insignificant contact for her paternal relatives. Dennis also played a limited role at the trial, testifying in support of the Howards’ application and stating that he favored guaranteed visitation with Delainey for his parents.

Charitie responded to the Howards’ assertions by claiming that she had always wanted to cultivate a relationship between her daughter and her paternal grandparents, but had wanted to do so at a pace suitable to Delainey’s development. She defended her hesitancy in allowing extended, unsupervised visits by claiming the Howards’ lifestyle and various incidents in their past had made her conclude that unsupervised visits were inappropriate. Charitie also expressed concern over the fact that Dennis continued to visit or even live with his parents for periods of time, a situation that she believed could lead to him having contact with Delainey outside of the context of the supervised visitation ordered by the district court.

On September 4, 2001, the district court issued its ruling regarding the application for grandparent visitation, finding that “there was no evidence presented or demonstrated to the Court that visitation ... would be harmful to the minor child.” Although the court recognized “that Charitie has a right as a parent to make decisions regarding her daughter,” it ordered two, four-hour visits monthly between the How-ards and Delainey, unsupervised after the first two visits, but without overnight visitation. On September 6, we issued our opinion in Santi, invalidating as unconstitutional one portion of the Iowa grandparent visitation statute. In response to San-ti, Charitie filed a motion to expand and enlarge' the district court’s initial ruling under Iowa Rule of Civil Procedure 1.904(2) (formerly rule 179(b)). On January 17, 2002, the district court denied the motion concluding that Santi was inapplicable to the case. Charitie appeals from that ruling.

II. Standards of Review.

Although this appeal presents unique factual and legal issues, it also returns us to an area of the law we considered at length in Santi less than two years ago. Santi provided us the opportunity to reexamine Iowa’s grandparent visitation statute in light of the United States Supreme Court’s decision in Troxel v. Granville, 530 U.S. 57, 120 S.Ct. 2054, 147 L.Ed.2d 49 (2000), which introduced a myriad of new constitutional considerations to the discussion of parental decision-making. Although we acknowledged in Santi that we were not bound by federal court analysis of federal constitutional provisions when construing the Iowa Constitution, we also noted that such interpretations could prove helpful. Santi, 633 N.W.2d at 317. For that reason, we undertook a studied consideration of the guidance provided by the Court in Troxel and by other state courts of last resort. That consideration led us to state a number of legal principles applicable to a discussion of a parent’s decisional rights in Iowa, especially as they relate to the grandparent visitation statute.

One of our first conclusions was that challenges to Iowa’s grandparent visitation statute raise “questions of substantive due process and liberty interests in the context of statutory interpretation” obliging us “to review the record de novo, making our own evaluation of the totality of the circumstances.” Santi, 633 N.W.2d at 316. Of course, the nature of the interests at hand required a further consideration of the appropriate level of constitutional scrutiny with which to examine the statute. We acknowledged that Troxel did not follow the strict scrutiny standard of review traditionally used when a statute burdens a fundamental liberty. Santi, 633 N.W.2d at 317. Instead, the Court in Troxel seemed to suggest a more flexible, neutral standard premised largely on the changing shape of the traditional family structure and the strength of the potential competing privacy interests of children and other family members. Troxel, 530 U.S. at 63-64, 87-88, 120 S.Ct. at 2059, 2071-72, 147 L.Ed.2d at 55-56, 69-70 (Stevens, J., dissenting). Several other courts, as well as a number of legal scholars, have noted this subtle alteration and sought to crystallize its meaning and application. See David D. Meyer, Constitutional Pragmatism for a Changing American Family, 32 Rutgers L.J. 711, 713-22 (2001).

Nevertheless, Troxel did not reject the historical notion that the parental caretaking interest is fundamental, but confirmed it as “ ‘perhaps the oldest of the fundamental liberty interests recognized by [the] Court.’ ” Santi, 633 N.W.2d at 317 (quoting Troxel, 530 U.S. at 65, 120 S.Ct. at 2060, 147 L.Ed.2d at 56). Thus, in Santi, we confirmed the protected status of parental caretaking, and specifically held that it must be guarded by the “highest level of scrutiny” when that liberty interest emanates from a decision by fit, married parents. Id. at 318. This approach means that any infringement by the state must be “ ‘narrowly tailored to serve a compelling state interest.’ ” Id. (quoting State v. Klawonn, 609 N.W.2d 515, 519 (Iowa 2000)).

This appeal, of course, involves an examination of a different subsection of the visitation statute in the context of a different set of facts. The Howards have seized on these distinctions, arguing that section 598.35(1) is distinguishable from section 598.35(7) in constitutionally significant ways. In particular, the Howards note that here, unlike Santi, we are dealing with a divorced family with two parental decision-makers who have different opinions on the scope of their daughter’s visitation with her grandparents. This factual distinction, they believe, warrants the application of a lesser degree of scrutiny in our analysis of this subsection of the statute. The Howards also argue we specifically limited the strict scrutiny standard of review in Santi to decisions by fit, married parents. Thus, we must decide if the doctrinal approach adopted in Santi should be followed when the traditional family structure has been altered by divorce.

In deciding this question, we emphasize that divorce or pending divorce do not alone diminish the fundamental interest of parents who make caretaking decisions. Divorce opens the door for courts to resolve disputes between parents, but it does not make parents unfit to make decisions in the best interest of their children. To conclude that a divorce alone permits the state to make choices for an objecting parent (or parents) likely violates the core Troxel precept granting a presumption in favor of a fit parent’s decisions regarding their children. See Troxel, 530 U.S. at 69-70, 120 S.Ct. at 2062, 147 L.Ed.2d at 58-59 (while the Court recognized the changing nature of the traditional family has injected other persons outside the nuclear family into the role of caretaker, it did not limit the presumption to the traditional family unit); see also Joan Catherine Bohl, Grandparent Visitation Law Grows Up: The Trend Toward Awarding Visitation Only When the Child Would Otherwise Suffer Harm, 48 Drake L.Rev. 279, 308 (2000) (discussing the judicial trend toward redefining an “ ‘intact family’ ... in terms of function and purpose” rather than as “a nuclear unit consisting of the child’s married, natural parents”). We think the heightened protection of this valued fundamental interest recognized in Santi should not be altered by the marital status of otherwise fit parents, and the state should have no lesser standard for intervention. Thus, we apply the strict scrutiny analysis to our examination of section 598.35(1). The particular circumstances of the divorce that tend to disrupt the decision-making of parents can be considered as they implicate the compelling interests of the state to intervene. We conclude this traditional constitutional analysis captures our sense of the essential balance between the caretaking interests of parents and the state under our constitution, and we reject any reviewing standard under section 598.35(1) short of strict scrutiny.

III. Compelling State Interest.

Section 598.35(1) allows the court to order grandparent visitation if: (1) the parents are divorced, (2) “visitation is in the best interests of the child,” and (3) “the grandparent ... [has] established a substantial relationship with the child pri- or to the filing of the petition.” Iowa Code § 598.35(1). Because the statute interferes with a fundamental interest, a compelling interest of the state must be demonstrated for the statute to withstand constitutional scrutiny. Thus, we turn first to a consideration of the state’s compelling interest.

We addressed the compelling state interest requirement in the context of our grandparent visitation statute in Santi under that subsection of the statute permitting grandparent visitation when visitation had been unreasonably denied. See id. § 598.35(7). In the context of that particular subsection, we held that the desire of the state to foster close relationships between grandparents and grandchildren fell short of the compelling state interest necessary to justify court-ordered visitation over the objection of fit, married parents. Santi, 633 N.W.2d at 321. However, we declined to decide whether a threshold showing of harm was necessary to establish a compelling interest. Id. Instead, we found the statute was constitutionally flawed because it did not give fit parents the presumption that their decision-making “will benefit their children, not harm them.” Id. Without this presumption, the visitation statute effectively permitted courts to second-guess parental decisions. Id. Thus, the statute was not narrowly tailored to serve any compelling state interest. Id.

We intimated in Santi that divorce was a circumstance that can cause a breakdown of the decision-making of parents. Id. However, this was not to suggest that divorce alone establishes a compelling interest of the state to warrant intrusion into a parent’s decision to deny or limit visitation. We only indicated that divorce, more than the reasonableness of a particular decision to deny visitation, generates the type of concerns that can justify state interference.

We recognize that all fifty states have adopted some type of grandparent visitation statute, and in addressing the constitutionality of these statutes courts differ on the appropriate level of harm necessary to justify state intervention. See Laurence C. Nolan, Beyond Troxel: The Pragmatic Challenges of Grandparent Visitation Continue, 50 Drake L.Rev. 267, 267-68 n. 2 (2002). These differences have arisen as courts struggled with the implications of this country’s long-standing doctrine of parental autonomy, which permits parents to raise their children without state interference except for the most cogent reasons. See id. at 278-80. Yet, some form of harm to a child has traditionally been necessary under the Due Process Clause to support interference by the state in this sensitive area. See Wisconsin v. Yoder, 406 U.S. 205, 233-34, 92 S.Ct. 1526, 1542, 32 L.Ed.2d 15, 35-36 (1972) (Amish children exempt from compulsory education law because they will not be harmed by receiving an Amish education); Pierce v. Soc’y of Sisters, 268 U.S. 510, 534, 45 S.Ct. 571, 573, 69 L.Ed. 1070, 1077-78 (1925) (state cannot interfere with decision by parents to send children to private schools when decision is not inherently harmful). Harm not only has been the prevailing standard of intervention, but it is most suitable in analyzing a grandparent visitation statute. It is consistent with the essential presumption of fitness accorded a parent and is stringent enough to prevent states from meddling into a parental decision by simply making what it believes is a better decision. Nolan, 50 Drake L.Rev. at 280. It also recognizes the challenges inherent in ordering grandparent visitation, including the tremendous burdens and strain placed on the parent-child relationship. See id. at 280-88; McMain v. Iowa Dist. Ct., 559 N.W.2d 12, 14-15 (Iowa 1997) (recognizing grandparent visitation litigation can have a destabilizing impact on children).

Divorce, of course, can alter the decision-making ability of parents to- a point that may generate a sufficient state interest to intervene in areas not affecting fundamental rights, or to invoke the need for special considerations to protect children. See In re Marriage of Vrban, 293 N.W.2d 198, 202 (Iowa 1980) (holding statute allowing court to order noncustodial parent to pay child support for adult child attending school was not unconstitutional even though-married parents were not required to provide such support). Divorce, by necessity, permits the state to intervene to resolve immediate and direct disputes that arise between parents over custody and visitation. Nevertheless, divorce is not the sine qua non of a compelling state interest when non-parents seek to challenge parental decision-making. Instead, a compelling state interest arises when substantial harm or potential harm is visited upon children. See Roth v. Weston, 259 Conn. 202, 789 A.2d 431, 445 (2002); Von Eiff v. Azicri, 720 So.2d 510, 514-16 (Fla.1998); Brooks v. Parkerson, 265 Ga. 189, 454 S.E.2d 769, 772-74 (1995); Blixt v. Blixt, 437 Mass. 649, 774 N.E.2d 1052, 1061 (2002); Hawk v. Hawk, 855 S.W.2d 573, 579-81 (Tenn.1993); Williams v. Williams, 256 Va. 19, 501 S.E.2d 417, 418 (1998); In re Custody of Smith, 137 Wash.2d 1, 969 P.2d 21, 28-29 (1998); Kathleen S. Bean, Grandparent Visitation: Can the Parent Refuse?, 24 J. Fam. L. 393, 408 (1985-86) (arguing the harm standard satisfies the constitutional standard of a compelling state interest). Thus, the presence of harm must be at the center of a grandparent visitation statute, not the mere marital status of parents. See Roth, 789 A.2d at 449 (third-party visitation statute that required no more than disruption of family unit subject to unconstitutional application in the absence of judicially mandated considerations); Nolan, 50 Drake L.Rev. at 290 (statutes that provide for automatic standing to grandparents based on divorce are problematic). The problem with a divorce standard is that it either assumes harm occurs in all families touched by divorce when there is no grandparent visitation or it embraces a standard short of harm. We reject both approaches.

There is no doubt, in a broad sense, that grandparent-grandchild relationships are beneficial and should be promoted. See In re Herbst, 971 P.2d 395, 399 (Okla.1998); Elaine D. Ingulli, Grandparent Visitation Rights: Social Policies and Legal Rights, 87 W.V. L.Rev. 295, 297 (1984-85). Children deprived of the influence of a grandparent may lose important opportunities for positive growth and development. However, such a generalization falls short of establishing the type of harm that would justify state intervention into a parental decision denying contact. In re Herbst, 971 P.2d at 399; see also Santi 633 N.W.2d at 321 (fostering close relations between grandparents and grandchildren is not a compelling state interest). If grandparent visitation is to be compelled by the state, there must be a showing of harm to the child beyond that derived from the loss of the helpful, beneficial influence of grandparents. See Brooks, 454 S.E.2d at 773 (although grandparent visitation may promote the health and welfare of a child, it may only be imposed on objecting parents upon a showing that the failure to order visitation “would be harmful to the child”).

We turn to the three requirements under our grandparent visitation statute to examine if they reveal a sufficient element of harm to support a compelling state interest. We have previously indicated that the element of divorce is, alone, insufficient to establish a compelling state interest for the state to intervene into the issue of grandparent visitation. Similarly, the best interests of a child requirement under the statute is insufficient. See Santi, 633 N.W.2d at 321. Thus, we look to the final requirement of an established, substantial relationship between grandparent and grandchild to determine if this requirement supports a compelling state interest.

On its face, the requirement of an established substantial relationship fails to specify any harm or potential harm to the child. Yet, when a grandparent has established a substantial relationship with a grandchild, as required under our statute, an emotional bond can be created that, if severed, can inflict harm on the child. Roth, 789 A.2d at 445-^16. Such harm can be substantial when the grandparent has developed a substantial relationship over a period of time, something akin to a parental relationship. Id. at 445. Thus, these two factors — the cessation of a substantial existing grandparent-grandchild relationship and sufficient harm — -are in effect “two sides of the same coin.” Id. This connection reveals our legislature, in creating section 598.35, was likely concerned with protecting children from substantial emotional harm by specifically restricting the statute to eases involving a substantial existing relationship. This is the type of standard other jurisdictions have imposed in considering grandparent visitation. See Blixt, 774 N.E.2d at 1061 n. 16 (listing cases from other jurisdictions using comparable standards).

Ordinarily, our preference is to interpret our statutes in a manner to render them constitutional. See Iowa Dep’t of Transp. v. Iowa Dist. Ct., 592 N.W.2d 41, 43 (Iowa 1999). However, even if we assume that such harm is a component of the statute and would be sufficient to satisfy the Due Process Clause, the element of specific harm is not the only constitutional requirement we must consider. We must also consider whether the grandparent visitation statute is narrowly tailored to serve the state’s interest of protecting children from substantial emotional harm.

IY. Narrowly Tailored Statute.

Even if our statute is interpreted to identify a compelling interest of the state, the three requirements utilized by the statute to permit grandparent visitation to take place over the objection of a parent fail to impose the essential limitations demanded by Troxel to narrowly serve the compelling interest to intervene and to safeguard against unwarranted intrusions into the decisions of fit parents. Thus, for the same reasons identified in Santi the statute fails to comport with the Due Process Clause on its face.

The most critical deficiency in the statute is, as we observed in Santi, its failure to require a finding of parental unfitness. Troxel made it clear that when a forum has been created for a court to consider grandparent visitation, the judge must presume a fit parent acts in the best interests of their children, and “so long as a parent adequately cares for his or her children (¿a, is fit), there will normally be no reason for the state to inject itself into the private realm of the family to further question the ability of that parent to make the best decisions concerning the rearing of that parent’s children.” Troxel, 530 U.S. at 68-69, 120 S.Ct. at 2061, 147 L.Ed.2d at 58. This presumption is not simply applicable to joint decisions of fit married parents, but applies to the decisions of all fit parents. See Stanley v. Illinois, 405 U.S. 645, 651-53, 92 S.Ct. 1208, 1212-13, 31 L.Ed.2d 551, 558-59 (1972) (state may not presume parental unfitness and interfere with unwed father’s custody rights absent proof of unfitness). It is parental fitness that gives rise to the presumption, not mere marital status. Divorce does not diminish the parent’s fundamental interest in parenting and does not make them less capable parents. Thus, the divorce requirement under section 598.35(1) does not eliminate the need for the parents to be granted the presumption of fitness. See Roth, 789 A.2d at 449 (statute permitting visitation after a disruption of the family unit provides inadequate protection for the parental interest). The failure of the statute to give the presumption of fitness to parents renders it unconstitutional on its face. Santi, 633 N.W.2d at 321.

Moreover, the other two requirements of section 598.35(1) do not require or even contemplate that the presumption be utilized. The best interest standard is a doctrine that embraces the interests of children, and we have never interpreted it to protect the fundamental parenting interest or to provide a presumption for fit parents. Similarly, the grandparent-grandchild relationship requirement does not address the presumption that fit parents make decisions that benefit their children. There is nothing in either requirement that mandates the judge to give special weight to the parents’ decision. See Troxel, 530 U.S. at 70, 120 S.Ct. at 2062, 147 L.Ed.2d at 59.

Accordingly, the statute on its face not only fails to recognize the degree of harm or potential harm to the child needed to support state intervention, but it fails “to require a threshold finding of parental unfitness.” Santi 633 N.W.2d at 321. It also fails to require the court to consider a parent’s objections to allowing visitation. We believe these provisions must be a part of any grandparent visitation statute under our Due Process Clause.

V. Conclusion.

We conclude section 598.35(1) is unconstitutional on its face. We therefore reverse the district court order granting grandparent visitation.

The requests for appellate attorney fees are denied.

REVERSED AND DISMISSED.

      . At this point in the proceedings, Charitie had already appealed from the court’s original decree order. Therefore, the court concluded it no longer had jurisdiction to rule on the Howards’ request for enhanced visitation because they sought to intervene in a matter that was the subject of a pending appeal. Charitie eventually dismissed her appeal, at which time the Howards filed an application for modification of the decree of dissolution as it related to grandparent visitation.

      . The Howards' brief included a discussion of additional facts and proceedings that went beyond the scope of the issues finalized for appeal as a result of the district court's denial of Charitie’s motion to expand and enlarge its ruling. These additional matters were not considered in deciding this case. See Iowa Rs.App. P. 6.1, .10, .14.

      . Although we refer to Iowa Code section 598.35 (2001) as the “Iowa grandparent visitation statute” to simplify our references to the code section, it should be noted that the statute also allows for visitation petitions to be filed by great-grandparents. Iowa Code § 598.35. Our conclusions on the constitutionality of the statute apply with equal force no matter which generation petitions for visitation.

      . In this appeal, as in Santi v. Santi, the appellant has failed to clearly articulate whether her challenge to the constitutionality of the Iowa grandparent visitation statute arises under the federal or state constitution. Santi v. Santi, 633 N.W.2d 312, 316-17 (Iowa 2001). However, based on the arguments presented by Charitie and defended by the Howards in their briefs and at oral argument, it is apparent that Charitie’s challenge is based on the provisions of the Iowa Constitution, the interpretation of which is our exclusive prerogative. Callender v. Skiles, 591 N.W.2d 182, 187 (Iowa 1999).

      . The mere fact that there is a divorce does not deprive the parent of the presumption, but merely means that the presumption operates separately depending upon whose care and control is at issue. The issue of grandparent visitation addresses whether someone other than the parents are going to have care and control over their children. Thus, when the two parents disagree over grandparent visitation, the court considers the presumption of fitness as it relates to the parent who is being asked to give up his or her care and custody to provide the grandparent visitation. See Natania M. Soto, Note, Family Law: Whose Kids are They, Anyway?: Analyzing Troxel v. Granville and the Current State of Oklahoma’s Grandparent Visitation Statute, 54 Okla. L.Rev. 413, 438-40 (2001).


author: LAVORATO, Chief Justice.

text:
    Timothy L. GARDIN and Tammie S. Gardin, on behalf of themselves and all persons similarly situated, Appellants, v. LONG BEACH MORTGAGE COMPANY, Appellee.
    No. 02-0109.
    Supreme Court of Iowa.
    May 7, 2003.

      Mitchell Taylor of Cray, Goddard, Miller & Taylor, L.L.P., Burlington, Wood R. ■ Foster, Jr. and Jordan M. Lewis of Siegel, Brill, Greupner, Duffy & Foster, P.A., Minneapolis, Minnesota, and Richard J. Bell of Bell Law Office, Mt. Pleasant, for appellants.
    Michael Noyes and Judith L. Herrmann of Lane & Waterman, Davenport, Matthew M. Neumeier and Brian D. Hansen of Jenner & Block, L.L.C., Chicago, Illinois, for appellee.

      Susan M. Boe and Michael A. Giudicessi of Faegre & Benson L.L.P., Des Moines, for amicus curiae Iowa Land Title Association, Iowa Association of Realtors, Iowa Bankers Association, and Iowa Mortgage Association.
    Dennis A. Dietz, Des Moines, for amicus curiae Iowa Finance Authority.
   LAVORATO, Chief Justice.

Timothy L. and Tammie S. Gardin, class action plaintiffs in this case, appeal from a district court ruling sustaining a summary judgment motion filed by the defendant, Long Beach Mortgage Company (Long Beach). The Gardins contend that the district court erred in concluding as a matter of law that Long Beach had not collected fees in violation of Iowa Code section 535.8 (1999) in connection with a loan it made to the Gardins. We affirm.

I. Background Facts and Proceedings.

The Gardins entered into a loan brokerage agreement (Agreement) with Springfield Mortgage Company (SMC) on February 16, 1999. In the Agreement, the Gardins agreed to pay SMC a six-percent “loan commitment fee” if SMC successfully negotiated a loan for the Gardins. The loan was to be secured by a mortgage on residential real estate owned by the Gar-dins.

The Agreement further provided that the loan commitment fee “is a fee to the broker for its service on behalf of the borrower in obtaining the mortgage loan.” Finally, the Agreement provided that “[t]he loan fee ... is an obligation of borrower upon commitment, and shall be paid at the time of the loan closing or out of the loan proceeds subject to the obligation of the borrower....” (Emphasis added.)

On the same day that it entered into the Agreement, the Gardins signed a “loan brokerage disclosure statement.” The disclosure statement stated that SMC was licensed by the State of Iowa pursuant to Iowa Code section 535C.1 et seq. and “has been a mortgage broker of mortgage loans under the name of the broker since [1995].”

Acting pursuant to the Agreement, SMC made arrangements for the Gardins to borrow $39,750 from Long Beach. Long Beach is a wholesale lender and deals only with loan brokers.

SMC hired Rock Island County Abstract & Title Guarantee Company (RICA) as the closing agent for the loan. The closing occurred on May 20, 1999 at the Gardins’ residence in Burlington, Iowa. A number of settlement charges were paid from the loan proceeds, all of which the Gardins included in the loan principal to be amortized over the life of the loan.

On July 13, 2000, the Gardins filed a class action against Long Beach, alleging violations of Iowa Code section 535.8. The statute limits charges that may be imposed on borrowers by lenders in connection with the purchase or financing of real property used for family dwellings. See Iowa Code § 535.8(2)(n), (6). The statute also provides borrowers with a private cause of action to recover all fees not permitted by the statute, together with attorney fees and costs. See Iowa Code § 535.8(2)(d).

Specifically, the Gardins alleged the following settlement charges paid out of the loan proceeds at the closing violated the statute: (1) a “loan origination” fee of $2,385, which exceeded two percent of the amount financed, in violation of Iowa Code section 535.8(2)(a); (2) an “underwriting fee” of $165.50, which was not an authorized charge under Iowa Code section 535.8(2)(6); (3) an “overnight fee” of $40, which was not an authorized charge under Iowa Code section 535.8(2)(5); (4) title insurance charges of $250, payable to a title company other than the Iowa Finance Authority, which was a violation of Iowa Code section 535.8(2)(6 )(10); and (5) a closing fee of $250, which was not agreed to in writing and was a violation of Iowa Code section 535.8(2)(a).

Later, Long Beach filed a motion for summary judgment, which the Gardins resisted. The district court sustained the motion and dismissed the case.

II. Issues.

In its ruling the district court concluded that the $2,385 was a loan broker fee paid directly to SMC, and was therefore not paid to or collected by Long Beach in violation of the law. Similarly, the district court concluded that the $250 closing fee was paid directly to RICA and was therefore not paid to or collected by Long Beach in violation of the law. As for the remaining disputed amounts, the district court concluded that they accounted for less than two percent of the loan. Because the law allows a lender to collect up to two percent of the loan as a processing fee, the court concluded Long Beach could include the remaining disputed amounts in its processing fee.

The Gardins contend the district court (1) applied an unduly narrow meaning of the word “collect” as used in Iowa Code section 535.8; (2) erred in concluding that loan broker fees are not covered by the two percent limitation imposed by Iowa Code section 535.8(2)(a); (3) should have concluded as a matter of law that RICA acted as Long Beach’s agent, rendering Long Beach vicariously liable for RICA’s illegal charges; and (4) erred in concluding a lender may charge fees not otherwise permitted by Iowa Code section 535.8(2)(6) as long as the sum of such fees does not exceed two percent of the loan amount.

In their petition the Gardins challenged the title insurance charges of $250. This amount was paid to RICA and represented a $100 fee for a title insurance commitment and $150 for a title search and abstracting fees. On appeal, the Gar-dins do not dispute the $150 title search and abstracting fees. Instead, for the first time on appeal, the Gardins argue that a $75 location endorsement fee paid out of the loan proceeds at closing was charged in violation of Iowa Code section 535.8(2)(6 )(10). Because they failed to raise this issue in the district court, the Gardins have waived it. See Shill v. Careage Corp., 353 N.W.2d 416, 420 (Iowa 1984) (“It is a basic rule of appellate practice that questions not presented to and not passed on by the trial court cannot be raised or reviewed on appeal.”).

III. Scope of Review.

We review a summary judgment ruling for correction of errors at law. Iowa R.App. P. 6.4; Sons of the Union Veterans of the Civil War v. Griswold Am. Legion Post 508, 641 N.W.2d 729, 731 (Iowa 2002). Summary judgment is appropriate only when the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. Iowa R. Civ. P. 1.981(3); Grinnell Mut. Reinsurance Co. v. Jungling, 654 N.W.2d 530, 535 (Iowa 2002). We examine the record before the district court to determine whether any genuine issue of material fact exists and whether the court correctly applied the law. Sons of the Union Veterans, 641 N.W.2d at 731. Where the only controversy concerns the legal consequences flowing from undisputed facts, summary judgment is the proper remedy. Am. Processing, Inc. v. Iowa Comprehensive Petroleum Underground Storage Tank Fund Bd., 586 N.W.2d 325, 329 (Iowa 1998). Summary-judgment is the appropriate remedy where questions of statutory interpretation are involved. Burton v. Univ. of Iowa Hospitals & Clinics, 566 N.W.2d 182, 185 (Iowa 1997).

IV. Statutory Interpretation.

Because our resolution of the issues involves statutory interpretation, we revisit several basic rules of statutory interpretation. We start with the often-repeated goal of statutory interpretation which is to discover the true intention of the legislature. Bernau v. Iowa Dep’t of Transp., 580 N.W.2d 757, 761 (Iowa 1998).

Our first step in ascertaining the true intention of the legislature is to look to the statute’s language. Id. We do not search beyond the express terms of a statute when that statute is plain and its meaning is clear. State v. Snyder, 634 N.W.2d 613, 615 (Iowa 2001). Moreover, we must read a statute as a whole and give it “its plain and obvious meaning, a sensible and logical construction.” Hamilton v. City of Urbandale, 291 N.W.2d 15, 17 (Iowa 1980). Additionally, we do not construe a statute in such a way that would produce impractical or absurd results. United Fire & Cas. Co. v. Acker, 541 N.W.2d 517, 519 (Iowa 1995).

When the legislature has not defined words of a statute, we look to prior decisions of this court and others, similar statutes, dictionary definitions, and common usage. Bernau, 580 N.W.2d at 761.

V. Statutory Scheme at Issue.

Iowa Code section 535.8(2)(a) provides that “[a] lender may collect” certain fees. These include a “loan processing fee,” which does not exceed two percent of the loan principal. The term “loan processing fee” is not defined in the statute. The lender may also collect a “commitment fee” as agreed to in writing by the parties, without limitation as to the amount of the fee. The statute describes this fee as “compensation to the lender solely for the use of money.” The fee may be collected in addition to the “loan processing fee.” Finally, the lender may collect a “closing fee” as agreed to in writing by the parties, without limitation as to the amount of the fee. The closing fee may be collected in addition to the “commitment fee,” and/or the “loan processing fee.”

Iowa Code section 535.8(2)(6) permits a lender to

collect in connection with a loan any of the following costs which are incurred by the lender in connection with the loan and which are disclosed to the borrower:
(1) Credit reports.
(2) Appraisal fees....
(3) Attorney’s opinions.
(4) Abstracting fees....
(5) County recorder’s fees.
(6) Inspection fees.
(7) Mortgage guarantee insurance charge.
(8) Surveying of property.
(9) Termite inspection.
(10) The cost of a title guaranty issued by the Iowa finance authority pursuant to chapter 16.
Collection of any cost other than as expressly permitted by this lettered paragraph is prohibited.

Iowa Code § 535.8(2)(6) (emphasis added).

Iowa Code chapter 535B applies to mortgage bankers and brokers. “Mortgage banker” and “mortgage broker” are both defined in the statute. See Iowa Code § 535B.1(4), (5). Generally, a “mortgage banker” is one who makes at least four residential mortgage loans per year in Iowa. Iowa Code § 535.1(4). A “mortgage broker” is one who “arranges and negotiates” at least four residential mortgage loans per year in Iowa. Iowa Code § 535.1(5). Both are required to obtain a license from the superintendent of the division of banking of the department of commerce and both may have such license suspended or revoked for violating, among other provisions of law, chapters 535 and 535A. See Iowa Code §§ 535B.4, 535B.7.

Iowa Code chapter 535C applies to loan brokers. Iowa Code section 535C.2(4)(?) specifically excludes from the definition of “loan broker” a “mortgage broker or mortgage banker licensed or registered under chapter 535B.” Pursuant to chapter 535C, a loan broker may collect a fee from a borrower after successfully procuring a loan in accordance with a written broker agreement between the broker and the borrower. See Iowa Code §§ 535C.2A (loan broker’s fee may be assessed or collected from a borrower only after the successful procurement of a loan); .7 (loan brokerage agreement shall be in writing, signed by broker and borrower).

VI. Broker Fee.

As mentioned, the district court concluded the $2,385 was a loan broker fee paid directly to SMC, and was not paid to or collected by Long Beach; therefore, Long Beach did not violate section 535.8(2).

The Gardins concede the $2,385 fee, which they describe as a “loan origination fee” or a “loan processing fee,” was paid directly to SMC. However, they contend that Long Beach “collects” that fee from the Gardins because the loan itself was the source of the funds used to pay it. Therefore, the Gardins contend, Long Beach necessarily “collects” the fee from them over the life of the loan with interest. They argue (1) the term “collect” refers to all settlement charges “collected” by the lender from the borrower in the form of monthly payments and (2) the excessive charges, to whomever paid, ultimately redound to the benefit of the lender.

To resolve this issue, we need look no further than the plain language of the statutes and the agreement between the Gardins and SMC. Reading the statutory scheme as a whole, it is plain to us that Long Beach did not “collect” the six-percent broker fee from the Gardins.

As a preliminary matter, we think the record is not clear enough to make a determination as to whether SMC was a loan broker as defined in section 535C.2(4) or a mortgage broker as defined in section 535B.1(5). Whether it was one or the other, our ultimate conclusion is the same.

Section 535.8 does not define the terms “lender” or “collect.” We therefore look to their common meaning. “Lender” is defined as “a person or entity from which something (esp.money) is borrowed.” Black’s Law Dictionary 913 (7th ed.1999); see also Webster’s Encyclopedic Unabridged Dictionary 1101 (1996) (defining “lend” as “to give (money) on condition that it is returned and that interest is paid for its temporary use”). Given these definitions, we conclude Long Beach was clearly the “lender” in this transaction.

“Collect” is defined as “to receive payment.” Black’s Law Dictionary 238 (5th ed.1979); see also Webster’s Encyclopedic Unabridged Dictionary 403 (defining “collect” as “to receive payment”). As mentioned, the Gardins concede the six-percent fee was paid directly to SMC. Under the plain meaning of “collect,” Long Beach clearly did not receive the payment; SMC did. Therefore, Long Beach did not “collect” this fee and for that reason did not violate section 535.8(2)(a.).

The Gardins’ argument that Long Beach “collected” the fee because the loan was the source of the funds used to pay it leads to an absurd result. The Gardins admitted they understood they were paying a “finders fee” to SMC. Further, the Agreement gave them the choice of whether to pay the fee out of the proceeds of the loan or by a separate check at the closing. Their decision to pay the fee out of the proceeds of the loan should not dictate the outcome of this case. The lender — -which in this case was not a party to the Agreement between the Gardins and SMC— should not be held liable for a choice the borrower made as to how the broker fee was to be paid.

The district court correctly adopted a narrow definition of “collect,” according to the plain meaning of the statute. If the legislature intended for “collect” to have a broader meaning, it should have said so. See Krull v. Thermogas Co., 522 N.W.2d 607, 612 (Iowa 1994) (in searching for legislative intent, the court is bound by what the legislature said, not by what it should or might have said).

VII. Closing Fee.

Using the same reasoning as it did in regard to the broker fee, the district court concluded Long Beach did not “collect” the $250 closing fee paid to RICA; therefore, Long Beach did not violate section 535.8(2)(a).

As they did in regard to the broker fee, the Gardins argue that Long Beach “collected” this fee because the loan itself was the source of the funds used to pay it. For their fallback position, the Gardins contend RICA was an agent of Long Beach as a matter of law, and therefore “collected” the fee on Long Beach’s behalf. They do not dispute the district court’s finding that the $250 closing fee was paid directly to RICA for its services as closing agent.

The same reasoning we applied to the broker fee applies here. The undisputed facts show that Long Beach did not receive the $250 closing fee; RICA did. Long Beach therefore did not “collect” this fee.

Turning to the Gardins’ agency argument, we note that they have the burden of proving RICA was Long Beach’s agent and for that reason Long Beach was vicariously liable for the collection of un-permitted fees paid to RICA. See Benson v. Webster, 593 N.W.2d 126, 130 (Iowa 1999). We recognize an agency relationship exists when there is (1) a manifestation of consent by one person (here Long Beach) that another (RICA) shall act on the former’s behalf and subject to the former’s control and (2) the consent of the latter to so act. Id. The key to determining whether an agency relationship exists is the principal’s right of control. Id.

To establish the alleged agency relationship, the Gardins rely on instructions Long Beach forwarded to all closing agents, including RICA, to follow to ensure compliance with applicable laws pertaining to fees.

For reasons that follow, we conclude as a matter of law there was no agency as the Gardins contend. We first note the district court found as undisputed facts that (1) Long Beach did not hire RICA, rather SMC did; and (2) there was no ongoing or established business relationship between Long Beach and RICA. Therefore evidence of consent to act as well as evidence of control was lacking.

Moreover, we do not view Long Beach’s action in sending the closing instructions to RICA as raising any material fact issue on the question of agency. We conclude that because RICA was collecting the fee on its own behalf for services it performed, it was not collecting the fee for Long Beach for any of its services. The underlying premise of the Gardins’ argument is that Long Beach received the fees through the Gardins’ actions in rolling all the settlement charges into the loan, an argument we have previously rejected.

VIII. Remaining Charges.

The remaining disputed charges include the $175 title insurance, $40 overnight fees, and $165 underwriting fee. As to these charges, the district court concluded that because the total of these charges equaled less than two percent of the loan, the provisions of section 535.8(2)(a) had not been violated regardless of which party had “collected” the disputed amounts. The Gardins contend it was error for the district court to bundle these charges together as it did to meet the two percent limitation.

Whether or not the district court was correct in treating these charges as it did, we reach the same result as the district court by treating each charge separately. The undisputed fact is that RICA received payment for the title insurance ($175) and the overnight fees ($40). Based on our previous analysis, Long Beach — as a matter of law — did not “collect” these amounts.

The remaining amount in dispute — the $165 “underwriting fee” — was collected by Long Beach. This fee was charged to compensate Long Beach for processing the Gardins’ loan. It is therefore a “loan processing fee” that must fit within the two percent limit of section 535.8(2)(a). This amount — -the only loan processing fee that Long Beach “collected” — is well within the two percent limit. Therefore, collection of the fee does not violate section 535.8(2)(a).

IX. Disposition.

Based on the plain meaning of Iowa Code section 535.8(2)(a), we conclude that Long Beach did not “collect” most of the fees of which the Gardins complain in this case. As for the “underwriting fee,” which Long Beach did collect, the collection of that fee was well within the two percent limit of Iowa Code section 535.8(2)(a). For that reason, the collection of that fee did not violate section 535.8(2)(u). Because we find no error in the district court’s summary judgment ruling, we affirm.

AFFIRMED.


author: /s/Paul H. Anderson Associate Justice

text:
    In re Petition for DISCIPLINARY ACTION AGAINST Dylan J. McFARLAND, a Minnesota Attorney, Registration No. 12543x.
    No. C5-02-553.
    Supreme Court of Minnesota.
    May 15, 2003.
   ORDER

On October 16, 2002, this court suspended respondent Dylan J. McFarland for 30 days. In re McFarland, 652 N.W.2d 536 (Minn.2002).

Respondent has filed an affidavit for reinstatement in which he states that he has complied with all conditions for reinstatement imposed in the October 16, 2002 order. The Director of the Office of Lawyers Professional Responsibility has filed an affidavit stating that to the best of the Director’s knowledge, respondent has complied with all conditions of reinstatement, and that the Director does not oppose reinstatement.

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that respondent Dylan J. McFarland is reinstated to the practice of law effective immediately.

BY THE COURT:

/s/Paul H. Anderson Associate Justice