author: STONEBURNER, Judge

text:
    BORDER STATE BANK OF GREENBUSH, Respondent, v. FARMERS HOME GROUP, d/b/a Gopher State Mutual Insurance Company, Appellant.
    No. C3-00-904.
    Court of Appeals of Minnesota.
    Dec. 19, 2000.

      Michael L. Jorgenson, Charlson, Mar-ben & Jorgenson, PA., Thief River Falls, MN, (for respondent).
    Jon A. Hanson, John F. Cook, Minneapolis, MN, (for appellant).
    Considered and decided by STONEBURNER, Presiding Judge, FOLEY, Judge, and MULALLY, Judge.

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

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

   OPINION

STONEBURNER, Judge

Appellant Farmers Home Group (Insurer) challenges the district court’s grant of summary judgment to respondent Border State Bank of Greenbush (Bank). Because we find no error in the district court’s application of law, we affirm.

FACTS

Bank sold property to Louis Haupt on a contract for deed in 1991. Insurer issued a policy covering the property against fire loss. The policy named Haupt as insured and Bank as “mortgagee,” which was defined in the policy to include contract-for-deed vendors. Insurer knew that Bank was a contract-for-deed vendor. The policy provided that losses would be paid to insureds and mortgagees named in the policy “as interests appear” and that the denial of an insured’s claim would not bar valid claims by a mortgagee. The policy further provided that after a covered loss, Insurer could elect to pay the entire mortgage debt plus accrued interest in exchange for a full assignment and transfer of the mortgage and all securities held as collateral for the debt.

The covered property was damaged by fire in October 1997. The amount of the loss was $21,050. Haupt made a timely claim against Insurer pursuant to the policy. Insurer never paid or denied Haupt’s claim because Insurer and the sheriffs department were investigating potential arson.

Bank also made a timely claim against Insurer pursuant to the policy. Insurer acknowledged Bank’s claim by letter dated January 27, 1998, stating “your interest in the Louis Haupt property will be protected to the limits of Mr. Haupt’s policy and in accordance with policy terms and conditions.” The letter also stated:

By this letter, it is intended that the rights of the parties be preserved and that [Insurer] specifically reserves all of its rights and defenses under the policy of-insurance.

Insurer neither paid nor denied Bank’s claim at that time, citing its ongoing arson investigation.

At the time of the fire, Haupt owed a principal balance of $39,885.75 on the contract for deed and was several months in arrears on his payments. He did not make any payments after the fire. Bank canceled the contract for deed, effective June 23,1998.

A few days after canceling the contract for deed, Bank requested Insurer to satisfy Bank’s vendor’s interest in the property. Insurer denied coverage, claiming Bank had forfeited its rights under the policy by canceling the contract. Bank sued Insurer. The parties filed cross-motions for summary judgment. The district court determined that Bank had an insurable interest under the terms of the policy that was not extinguished by cancellation of the contract for deed and therefore granted Bank’s motion for summary judgment. The district court awarded Bank the amount of the damage to the property.

ISSUE

Does a contract-for-deed vendor who is named as a mortgagee in a fire-insurance policy forfeit its rights under the policy by canceling the contract for deed after a covered loss reduces the value of the property to less than the outstanding debt under the contract?

ANALYSIS

This case was submitted to the district court on stipulated facts and supplemental affidavits. No genuine issues of material fact are in dispute. Insurer argues that the district court erred in applying the law. “Where the material facts are not in dispute, a reviewing court need not defer to the district court’s application of the law.” Margaretten & Co. v. Illinois Farmers Ins. Co., 526 N.W.2d 389, 390 (Minn.App.1995) (citing Hubred v. Control Data Corp., 442 N.W.2d 308, 310 (Minn.1989)).

A contract-for-deed vendor used to be held subject to an insurer’s arson defense against the named insured. E.g., Reitzner v. State Farm Fire and Cas. Co., 510 N.W.2d 20, 24-25 (Minn.App.1993). Minnesota’s Standard Fire Insurance Policy was amended to include contract-for-deed vendors in the standard mortgagee clause, so that an insured’s acts no longer defeat a contract-for-deed vendor’s rights under the policy. See MinmStat. § 65A.01, subd. 3 (1994).

Insurer equates cancellation of the contract for deed in this case to a mortgage foreclosure and relies on Margaretten for the proposition that where a mortgagee forecloses after the date of loss and bids in the full amount of the indebtedness upon foreclosure, the mortgagee forfeits its separate rights under the mortgage clause of a fire-insurance policy. See Margaretten, 526 N.W.2d at 390-91. In Margaretten, mortgaged premises were destroyed by fire. Id. at 390. The insurer denied the homeowners’ claim for insurance proceeds because the owners had caused the fire. Id. The mortgagee then filed a claim for mortgagee-interest insurance benefits. Id. The insurer denied that claim because the mortgagee refused to give the insurer a partial assignment of the mortgage. Id. The partial assignment would have given the insurer a claim against the mortgagor equal to the insurance payment. Id. The mortgagee then foreclosed on the mortgage and bid in the full amount owed on the mortgage at the sheriffs sale. Id. After the redemption period elapsed, the property was condemned by the city and demolished. Id. The mortgagee then sued the insurer for fire-insurance benefits. Id. At the time of the suit there was no longer a mortgage and the mortgagee had no interest in the property. See id. The district court granted summary judgment to the insurer, holding that the mortgagee had extinguished any right it had to insurance proceeds by bidding in the full amount of the mortgage at the foreclosure sale. Id. This court affirmed, holding that by discharging the debt through foreclosure, the mortgagee had extinguished its rights to insurance proceeds. Id. at 390-91. We further held that the insurer was justified in requiring the mortgagee to give a partial assignment of the mortgage, which would have balanced the parties’ interests. Id.

Margaretten is distinguishable from the instant case. Insurer never requested and Bank never refused an assignment of the contract for deed. Bank owned the property at the time the loss occurred and continues to own the property. Due to the fire, the value of the property recovered by Bank is less than the outstanding balance on the contract for deed at the time of the cancellation. Bank was insured for this loss under the policy.

Insurer also relies on McKay v. National Union Fire Ins. Co., 182 Minn. 378, 234 N.W. 589 (1931), as support for the proposition that partial or full extinguishment of a mortgage by foreclosure after a loss will reduce the mortgagee’s rights to insurance proceeds by the extent to which the debt has been extinguished. In McKay, the insurer also had the right to be subrogated to the rights of the mortgagee and to take an assignment of the mortgage upon payment of the mortgage debt. Id. at 379, 234 N.W. at 589. The policy in McKay did not insure the owner or mortgagor. Id. at 380, 234 N.W. at 589. The supreme court held that when the mortgagee satisfied the mortgage and discharged its lien, it disabled itself from performing a condition of the contract and thus could not insist upon performance by the insurer. Id. at 380, 234 N.W. at 589-90.

In the instant case, the policy covered the mortgagor as well as Bank. Insurer never elected to pay the balance of the contract in exchange for an assignment of Bank’s rights in the contract and the Bank never refused a requested assignment of its interest in the contract or the property. The district court awarded damages in the amount of the damage caused by the fire rather than the balance due under the contract for deed at the time of the loss, thereby reducing Bank’s rights in insurance proceeds to the extent Bank’s loss was satisfied by the cancellation.

Insurer cites Farmers & Merchants Sav. Bank v. Farm Bureau Mut. Ins. Co., 405 N.W.2d 834 (Iowa 1987), to support the proposition that canceling a contract for deed after a fire loss occurs causes the vendor to forfeit its rights to proceeds from an insurance policy. In that case, contract vendors sold a farm on a contract for deed. The contract required that vendees provide insurance on the property. Id. at 835. Vendees purchased a policy from Farm Bureau with a mortgage clause naming the vendor. Id. Two years later, a fire destroyed a building on the farm. Id. Farm Bureau denied vendees’ claims but did not deny or pay vendor’s claim. Id. Vendor served a notice of cancellation on vendees and resold the farm on contract to a bank for the balance owed by vendees under the original contract. Id. Vendor assigned his interest in his insurance claim against Farm Bureau to the bank. Id. When the bank attempted to collect the unpaid insurance proceeds, Farm Bureau refused to pay, asserting that vendor took the property back in satisfaction of the contract debt, extinguishing vendor’s insurable interest under the contract. Id. at 835-36. The Iowa Supreme Court agreed, holding that the debt was extinguished when vendor forfeited the contract, just as if he had bid in the full amount of a mortgage at a foreclosure sale. Id. at 838. The court noted that “[b]ecause a vendor’s interest in insurance proceeds is measured by the unpaid purchase price, [vendor’s] insurable interest was destroyed by the satisfaction of the contract debt.” Id.

In the instant case, Bank has never fully recovered its loss. The fire damaged the recovered property such that its value was less than the balance under the contract for deed. Bank, unlike the mortgagees in the cases relied on by Insurer, has suffered an uncompensated loss for which it was insured under the policy.

Bank correctly notes that in all of the cases relied on by Insurer, the mortgage (or contract debt) was satisfied in full by foreclosure (or cancellation) and the mortgagees (or contract-for-deed vendors) no longer had any insurable interest in the property at the time their claims were denied. The event that destroys the insurable interest is compensation for the insured’s loss, not merely the event of a foreclosure (or cancellation).

Insurer argues that Bank is no longer in a position to assign the contract for deed, so that Insurer is precluded from exercising its option to pay the contract price and receive an assignment of the contract. Insurer asserts that for this reason Bank is precluded from making a claim under the policy. Insurer, however, never sought and was never denied this remedy. Bank asserts it stands ready to transfer title to the property to Insurer in exchange for payment of the principal and interest due under the contract, a remedy the supreme court recognized as appropriate in a similar case. See Phalen Park State Bank v. Reeves, 312 Minn. 194, 203, 251 N.W.2d 135,140 (1977).

In Phalen Park, the bank began foreclosure proceedings and purchased the property at a sheriffs sale after Reeves defaulted on a mortgage. Id. at 196, 251 N.W.2d at 137. During the redemption period, the bank learned that Reeves’s fire insurance had been terminated and demanded that Reeves replace the insurance. Id. Reeves secured a replacement policy that named the bank as mortgagee. Id. One month later, fire destroyed a building on the property. Id. Reeves chose not to redeem the damaged property, and five days after his redemption period ended, the bank filed a claim against the insurer. Id. at 197, 251 N.W.2d. at 137. The insurer denied the claim, arguing that the policy was invalidated by the bank’s failure to disclose the foreclosure of its mortgage at the time the policy was issued and that the bank, despite its fee interest in the property, did not have an insurable interest. Id. The supreme court held that the bank had no duty to disclose the foreclosure, id., and that the bank’s rights were preserved under the mortgage clause of the policy regardless of the foreclosure because

[a] change in the character of interest from that of mortgagee to that of owner, effected by a sale and purchase on foreclosure, is not sufficient to defeat the insurance granted the mortgagee, since it must likewise be considered that the possibility of such a change was within the contemplation of the parties when the contract was made.

Id. at 204, 251 N.W.2d at 141 (quoting 11 Couch, Insurance 2d, § 42:712). To preserve the insurer’s right to subrogation, the supreme court held that upon payment by the insurer to the bank, the insurer would be subrogated to the bank’s • fee interest in the property. Id. Even though limited in its applicability by the issue of usury, Phalen supports the propositions that a mortgagee does not automatically forfeit rights under the mortgage clause of an insurance policy when it becomes the fee owner of the insured property and that an insurer’s election to subrogate itself to the mortgagee’s rights can be protected by subrogation to the fee interest.

Bank’s position is also supported by Murray County State Bank v. Milwaukee Mut. Ins. Co., 513 N.W.2d 1 (Minn.App.1994), review denied (Minn. May 3, 1994). The bank in Murray County sold property on a contract for deed. Id. at 1. The contract in that case, as here, required that the contract vendees obtain insurance on the property. Id. The insurance company issued a policy naming the bank as the mortgagee. Id. The vendees defaulted on the contract and conveyed the vendees’ interest back to the bank by quitclaim deed without canceling the contract for deed. Id. at 1-2. The home was destroyed by a tornado about a month after this transfer. Id. at 2. As owner of the property in fee simple, the bank made a claim under the policy and sued the insurance company when the claim was denied. Id. On cross-motions for summary judgment, the trial court found in favor of the bank. Id. On appeal, the insurer argued that the district court erred because the bank failed to give notice of the change in ownership. Id. This court affirmed the district court’s ruling that a mortgagor-mortgagee transfer is not a change of ownership for purposes of the mortgage clause of an insurance policy and therefore is not subject to the notice requirement. Id. Insurer also challenged the district court’s determination of damages, arguing that the bank’s interest should be limited to the amount of the mortgage and not the stated policy value. Id. Quoting a New Jersey case, this court concluded that the policy’s “as interests appear” language required only that the protected interest originate in a mortgage; that language did “not strictly define the kind of insurable interest covered by the clause.” Id. at 2-3 (quoting 195 Corp. v. New Jersey Ins. Underwriting Ass’n, 86 N.J. 159, 430 A.2d 203, 206 (1981)). The court noted:

[wjhether the title is obtained by foreclosure or conveyance, the interest increases to that of an owner and as such, is no longer limited to the amount of the mortgage debt.

Id. at 3 (quotation omitted) (citation omitted). The court found that policy concerns mandated this result:

Insurers have received a premium for coverage through a day certain and for protection against a full amount of loss. Under the logical conclusion of [the insurer’s] argument, no one would have an insurable interest in the conveyed property and insurers would therefore reap a windfall profit. We therefore determine the district court properly found full coverage for the Bank’s loss.

Id. (citation omitted).

The district court in the instant case correctly noted that Bank is identified as mortgagee/vendor/loss payee in the insurance contract and that its rights to insurance proceeds should be determined by the provisions of the insurance policy, not the contract for deed. The policy does not list cancellation of the contract for deed as a basis to extinguish the Insurer’s obligation under the policy. Insurer acknowledged Bank’s claim in its January 27, 1998 letter but for its own reasons elected not to pay the Bank the balance on the contract (Bank’s interest as it appeared at that time) and take an assignment of the contract for deed. Bank’s interest subsequently changed to that of owner of the fee interest free of any claim by the contract vendee. Bank was not fully compensated for its loss because 'the fire had reduced the value of the property to less than the outstanding balance under the contract for deed. The trial court correctly concluded that cancellation of the contract for deed did not extinguish Bank’s insurable interest in the property and that the appropriate measure of damages is the amount of loss caused by the fire, which does not exceed the policy limits and which is substantially less than the outstanding balance on the contract for deed at the time of the loss. Any prejudice to Insurer from the Bank’s present inability to assign the contract for deed is due to Insurer’s failure to elect that option at the time of the original demand.

DECISION

Cancellation of a contract for deed does not extinguish a contract-vendor’s rights under the mortgage clause of a fire-insurance policy where damages caused by a covered loss reduce the value of the property to less than the outstanding balance on the contract for deed. The district court’s grant of summary judgment to Bank is affirmed.

Affirmed.

      . The district court awarded Bank $20,950, the residual value of the property after the loss. The amount of damage caused by the fire was $21,050 (only a $100 difference). Neither party challenges the amount awarded; both agree that the award represents the amount of the loss caused by the fire.

        . In some cases cited by appellant, satisfaction occurred when the mortgagee bid in the full amount of the debt at a foreclosure sale. See McKay, 182 Minn. 378, 234 N.W. 589. In others, satisfaction occurred when the value of the recovered property exceeded the outstanding debt or when the property was sold for the balance due under the contract. See Farmers & Merchants, 405 N.W.2d at 838.

      . A central issue in Phalen Park not presented in the instant case was whether the mortgage was usurious and therefore void. The supreme court remanded Phalen Park for a determination of whether there was a valid mortgage. The court stated:
      [W]e stress that our holding has resulted from and is limited to the unique facts and circumstances presented in this case. We do not intend by this decision to depart from the general rule in this state that foe defense of usury is personal to foe borrower.

        Phalen Park, 312 Minn, at 205, 251 N.W.2d at 141.

      . Insurer argues that because Phalen Park and Murray County involve losses that occurred after the banks acquired fee ownership, they are not applicable to the instant case, but Insurer cannot articulate why that would be the case when foe policy language in question is identical to foe instant case and the banks were identified as mortgagees in the policies. If the timing of the loss has any effect, it makes Bank’s case stronger in foe instant case because Bank filed its claim under the policy before it canceled the contract for deed and insurer acknowledged the claim but elected not to pay at that time.


source: Caselaw Access Project

author: CRIPPEN, Judge

license: Public Domain

text:
    STATE of Minnesota, Respondent, v. Corey Ryan WALTHERS, Appellant.
    No. C5-00-337.
    Court of Appeals of Minnesota.
    Dec. 26, 2000.

      Mike Hatch, Attorney General, St. Paul, MN; and Boyd Beccue, Kandiyohi County Attorney, Tracy Perzel, Assistant County Attorney, Willmar, MN, for respondent.
    John E. Mack, Mack & Daby, P.A., New London, MN, for appellant.
    Considered and decided by TOUSSAINT, Chief Judge, CRIPPEN, Judge, and PETERSON, Judge.
   OPINION

CRIPPEN, Judge

Appellant disputes the admission of pri- or-act evidence in the trial in which he was accused of furnishing alcohol to a minor. Because the prior conduct is not probative of an intent, preparation, or plan to commit the charged violation, and because appellant offered no defense of lack of opportunity, knowledge, identity, or mistake, we reverse the conviction and remand the case for disposition by the trial court.

FACTS

The state charged appellant Corey Walthers with ten counts of furnishing alcohol to two minors under Minn.Stat. § 340A.503, subd. 2(1) (1998). The trial was held in January 2000, and the jury acquitted appellant of all but one count, finding that he provided alcohol to 17 year old Joshua Butterfield between June and August of 1997 at appellant’s parents’ home in Kandiyohi County.

As part of the evidence presented at trial, the trial court allowed the testimony of Matthew Beckman, appellant’s roommate in 1996-97. Beckman testified that at another time and in another county, he saw Butterfield and appellant sleeping in the living room surrounded by empty beer cans. He also testified that he never actually observed appellant and Butterfield drinking alcohol or appellant providing Butterfield with alcohol. The trial court found the testimony probative of “the opportunity of the defendant — the preparation and plan” and found that it tended “to show a lack of mistake as to the * * * age of [Butterfield].”

Appellant challenges the conviction and sentence. He contends that the trial court erred in admitting Beckman’s testimony because it was irrelevant and more prejudicial than probative.

ISSUE

Did the trial court clearly abuse its discretion in admitting evidence of another wrong or act?

ANALYSIS

A reviewing court will not reverse the trial court’s admission of evidence of other crimes or bad acts unless an abuse of discretion is clearly shown. State v. Scruggs, 421 N.W.2d 707, 715 (Minn.1988). Where the admissibility is unclear, the court should give the defendant the benefit of the doubt and reject the evidence. State v. DeWald, 464 N.W.2d 500, 503 (Minn.1991). Appellant contends that the trial court abused its discretion in allowing Matthew Beckman’s testimony.

The Minnesota Rules of Evidence provide that “[ejvidence of another crime, wrong, or act” is inadmissible character evidence unless offered “as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.” Minn.R.Evid. 404(b). The trial court admitted Beckman’s testimony as probative of “the opportunity of the defendant — the preparation and plan” and “a lack of mistake” as to Butterfield’s age.

In an appropriate case, evidence of other wrongs or acts may help the state prove the elements of a case by establishing preparation, planning, motive, or intent to commit an offense. Significantly, all cases admitting evidence of other acts involving the defendant and the victim demonstrate the relationship of the parties and the plausibility that one has harmed the other. See State v. Williams, 593 N.W.2d 227, 236-37 (Minn.1999) (admitting evidence of past acts of violence towards the victim to show premeditation), cert. denied by Williams v. Minnesota, 528 U.S. 874, 120 S.Ct. 180, 145 L.Ed.2d 151 (1999); State v. Lynch, 590 N.W.2d 75, 80-81 (Minn.1999) (allowing evidence of subsequent robbery to show identity and modus operandi of masked assailant in felony-murder trial); State v. Kennedy, 585 N.W.2d 385, 391 (Minn.1998) (allowing evidence that the defendant sexually assaulted the victim in a similar manner six months after the charged incident to rebut defendant’s allegation that the victim fabricated the incident); State v. Buggs, 581 N.W.2d 329, 336-37 (Minn.1998) (allowing evidence of defendant’s prior assault of the victim to show motive and intent to kill her); State v. Miller, 573 N.W.2d 661, 675 (Minn.1998) (allowing evidence of a prior bad act to show the strained relationship between defendant and his mother to show motive for killing her); State v. Mills, 562 N.W.2d 276, 285 (Minn.1997) (allowing evidence of' defendant’s prior attempt to poison the victim to show the strained relationship between the victim and defendant and motive and intent for murder); State v. Flores, 418 N.W.2d 150, 159 (Minn.1988) (admitting testimony of defendant’s threats against the victim’s friends to show motive and intent); State v. Black, 291 N.W.2d 208, 215 (Minn.1980) (allowing evidence of other robberies involving defendant to show relationship between the victim and defendant as motive for murder), abrogated on other grounds by State v. Jones, 556 N.W.2d 903, 909 n. 4 (Minn.1996).

None of these issues arise here. No one disputes the friendship between appellant and Butterfield or appellant’s opportunity to furnish alcohol to his friend. And proof of their relationship does not help establish appellant’s plan or motive to do so. As the supreme court noted, even more probative evidence does not tend to establish a plan to violate the liquor laws:

The fact that a young man at different times offered to give intoxicating liquor to two young women does not warrant the inference that he planned to violate the law systematically by furnishing intoxicating liquor to those who wanted it.

State v. Eames, 163 Minn. 249, 252, 203 N.W. 769, 770 (1925).

The trial court also found the testimony probative of appellant’s lack of mistake as to Butterfield’s age. Appellant raised no defense of accident and no defense that he “reasonably and in good faith relied upon representations of proof of age.” Minn.Stat. § 340A.503, subd. 6(b) (1998). Thus, because Butterfield’s age and the friendship between appellant and Butterfield is not disputed, Beckman’s testimony serves no purpose other than to impugn appellant’s character.

Appellant also argues that the evidence was more prejudicial than probative and raises additional questions about the state’s failure to arraign him on the amended complaint, the trial court’s refusal to grant him a continuance, and the sufficiency of the evidence in his conviction. We have considered these issues but find no reason to address them in fight of our decision that the trial court erred by admitting character evidence.

This is a close factual case; indeed, the state insisted that its case was weak and the jury found no cause to convict on all but one count. Appellant is entitled to a new trial because there is reasonable doubt whether the jury would have convicted appellant on that one count if the evidence had not been admitted. See State v. Blasus, 445 N.W.2d 535, 540-41 (Minn.1989) (finding that a new trial must be ordered where error may have prejudiced a close factual case).

DECISION

Appellant is entitled to a new trial because the trial court clearly abused its discretion in admitting evidence of other acts.

Reversed and remanded.


author: SCHUMACHER, Judge.

text:
    Mark WEBER, Appellant, v. Ralph TUCK, Ronald P. Meiners, Respondents.
    No. C5-00-1097.
    Court of Appeals of Minnesota.
    Dec. 26, 2000.

      Francis (Frank) M. Doherty, Michael W. Gill, Hale, Skemp, Hanson, Skemp & Sleik, La Crosse, WI, for appellant.
    Ken D. Schueler, Dunlap & Seeger, P.A., Rochester, for respondent Tuck.
    Robert G. Benner, Goodman, Guzinski & Benner, P.A., Rochester, for respondent Meiners.
    Considered and decided by SCHUMACHER, Presiding Judge, AMUNDSON, Judge, and HALBROOKS, Judge.
   OPINION

SCHUMACHER, Judge.

Appellant Mark Weber appeals the district court’s grant of summary judgment to respondents Ralph Tuck and Ronald P. Meiners. We affirm.

FACTS

Tuck and Meiners jointly owned a parcel of real estate. Tuck offered Weber $6 per hour to help Tuck and Meiners work on the property. Weber accepted the offer. The next day, Meiners instructed Weber to get a ladder and climb to the roof of a building on the property to change a skylight. There was only one ladder tall enough for the task. Meiners told Weber to set the ladder up on a cement pad. Weber did so, and climbed the ladder. Just as he reached the top, the bottom of the ladder slid out from under him. Weber fell and was injured.

The ladder Weber used was the 16 foot tall bottom half of a two-piece aluminum extension ladder. Meiners had borrowed the ladder from a friend, taking only the bottom half. The ladder did not have rubber stops or shoes. Neither Tuck nor Meiners knew that the ladder lacked rubber stops or shoes. An expert retained by Weber opined that there had apparently once been non-slip pads on the ladder’s feet, but that they had worn off through wear and tear. The expert opined that in the condition it was in on the day of the accident, the ladder was unreasonably dangerous for its intended use.

Weber sued Tuck and Meiners for negligence. Meiners moved for summary judgment, and Tuck joined the motion. The district court granted the motion, ruling that the simple tool doctrine barred Weber’s claim.

ISSUE

Does the “simple tool doctrine” bar Weber’s claim?

ANALYSIS

On an appeal from summary judgment, the reviewing court asks whether there are any genuine issues of material fact in dispute and whether the trial court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). We review de novo the district court’s interpretation of the law, Sorenson v. St Paul Ramsey Med. Ctr., 457 N.W.2d 188, 190 (Minn.1990), including whether a duty is owed. Zimmer v. Carlton County Co-op. Power Ass’n, 483 N.W.2d 511, 513 (Minn.App.1992), revieiv denied (Minn. June 10, 1992). We view the evidence in the light most favorable to the party against whom summary judgment was granted and accept as true that party’s factual allegations. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993). Summary judgment on a claim is mandatory against a party with the burden of proof who fails to establish an essential element of his claim because that failure renders all other facts immaterial. Lloyd v. In Home Health, Inc., 523 N.W.2d 2, 3 (Minn.App.1994).

On appeal, Weber argues that the district court erred in granting summary judgment for Tuck and Meiners on the basis of the simple tool doctrine, “under which there is no duty on the part of the master to inspect and to discover defects, if any, in simple tools and instrumentalities the use of which is attended ordinarily with no danger and to warn the servant thereof.” Person v. Okes, 224 Minn. 541, 543, 29 N.W.2d 360, 362 (1947). The supreme court has explained that “the relaxation of the master’s duty and liability rests on the assumed equality of knowledge and ability to discover the defect complained of.” Id. (citation and quotation omitted). There is no dispute that the 16 foot ladder involved in this case is a simple tool. See Dessecker v. Phoenix Mills Co., 98 Minn. 439, 440, 108 N.W. 516, 517 (1906) (12 foot ladder held simple tool).

Weber argues that the district court neglected to take proper account of two supreme court cases arising from the same lawsuit, Cayse v. Foley Bros., Inc., 255 Minn. 176, 96 N.W.2d 238 (1959) (Cayse I ), and Cayse v. Foley Bros., Inc., 260 Minn. 248, 110 N.W.2d 201 (1961) (Cayse II), which provide that the “ ‘simple tool’ doctrine, while it relieves the employer of the duty to inspect and discover defects which arise in the ordinary use of an instrumentality, does not relieve him of the obligation to furnish tools which are initially fit for the uses to which they may be put.” Cayse I, 255 Minn, at 182, 96 N.W.2d at 242. Weber argues that Tuck and Meiners had the obligation to provide him a ladder that was “initially fit” for the use for which it was to be put, and since the ladder they provided had no rubber shoes or stops and was unreasonably unsafe according to Weber’s expert, Tuck and Meiners did not meet that obligation. For that reason, Weber argues, the simple tool doctrine does not apply.

Tuck and Meiners argue that the statement from Cayse I is dictum and therefore not an actual requirement of the simple tool doctrine. The argument has merit; as Tuck points out, Cayse I was decided on a question of statutory interpretation and Cayse II on the question of contributory negligence. Neither case decided that the simple tool doctrine did or did not apply. See Cayse I, 255 Minn, at 181-82, 96 N.W.2d at 242-43; Cayse II, 260 Minn, at 254, 110 N.W.2d at 205. Nonetheless, in Cayse II, the supreme court wrote that “we have held that the simple tool doctrine has no application to the furnishing of tools suitable for the use for which they are to be used,” citing the decision in Cayse I. Cayse II, 260 Minn, at 254 & n. 3, 110 N.W.2d at 205 & n. 3 (emphasis added). Because the supreme court said its statement in Cayse I was a holding, we consider it one.

Assuming then that the “ ‘simple tool’ doctrine * * * does not relieve [an employer] of the obligation to furnish tools which are initially fit for the uses to which they may be put,” Cayse I, 255 Minn, at 182, 96 N.W.2d at 242, the question is whether the ladder in this case was “initially fit” for the use to which it was to be put. Weber argues that because there were no rubber shoes on the ladder when it was provided to him, the ladder was not “initially fit” for the use to which it was to be put.

Tuck and Meiners, however, argue that Weber’s interpretation of the “initially fit” requirement is incorrect. They cite Dally v.. Ward, 223 Minn. 265, 26 N.W.2d 217 (1947), as an illustration of the proper application of the rule. The facts in that case are as follows:

[The injured plaintiff] was engaged in attaching an hydraulic hoist to a farm truck. In the process of this work it became necessary to insert a steel shaft through four bearings or boxes in order to attach the hoist to the frame of the truck. There was no difficulty in inserting the shaft through the first three of' these bearings, but when the end of the shaft reached the fourth box there was difficulty in driving it through that box. It became necessary to drive or pound the other end of the shaft to complete the process of forcing it through the fourth box. One of the defendants had been engaged in tapping or pounding upon the shaft with an ordinary two-pound hammer in order to drive it through this fourth box. After becoming somewhat fatigued, he asked plaintiff to continue the process. Shortly after plaintiff started to tap or pound the end of the shaft, a chip of steel flew off the hammer and struck plaintiff in the eye. As a result, he lost the eye.

Id. at 266, 26 N.W.2d at 218. The supreme court held that the simple tool doctrine barred the employee’s claim. Id. at 267, 26 N.W.2d at 218.

Tuck and Meiners argue that “[o]bviously, the hammer in the Dally case was not fit for the use to which it was put, otherwise the chip of steel would not have struck the plaintiff in the eye.” It follows from Dally, they argue, that even if a simple tool must be “initially fit” for the use to which it is to be put, that does not mean it must be fit for such use every time it is provided to an employee to use.

Indeed, adopting Weber’s interpretation of the simple tool doctrine would rob .the doctrine of most, if not all, of its content. The simple tool doctrine “relieves the employer of the duty to inspect and discover defects which arise in the ordinary use of an instrumentality.” Cayse I, 255 Minn, at 182, 96 N.W.2d at 242. If the duty to provide an employee with a tool “initially fit” for the use to which it was to be put applied every time the tool were given to an employee, it would as a practical matter impose on the employer the very duty to inspect that the simple tool doctrine is designed to prevent.

We can glean further insight into the meaning of the “initially fit” requirement from the circumstances of the case in which the language was used. In Cayse I, the wooden ladder from which the plaintiff fell had been built in the defendant’s own carpentry shop and had been equipped with neither rubber shoes nor safety hooks. Cayse I, 255 Minn, at 178, 96 N.W.2d at 240. From the very start of the existence of the ladder, therefore, it was arguably not fit for the use to which it was to be put; in other words, it was not “initially fit” for such a use. We hold that the Cayse I requirement that a simple tool be “initially fit” for the use to which it is to be put applies to the time when a tool is manufactured.

In this case, Weber’s own expert testified that the ladder had once had non-slip pads on its feet, but that those pads had worn off “due to wear and tear on the ladder.” Unlike the ladder in Cayse I, the ladder in this case was arguably “initially fit” for the purpose to which it was to be put. Its defect, the absence of rubber pads or stops on the feet, arose in the ordinary use of the tool and would have been as obvious to Weber as to Tuck and Meiners. Weber testified that he examined the ladder from top to bottom before using it, nothing obstructed his ability to inspect the ladder, and the “visibility was fine.” Under these circumstances, the rationale underlying the simple tool doctrine suggests that the doctrine should bar Weber’s claim. The district court therefore did not err by ruling that the simple tool doctrine bars Weber’s claim.

We question, however, whether Minnesota law should continue to recognize the simple tool doctrine. As noted above, the simple tool doctrine is based on “the assumed equality of knowledge and ability to discover the defect complained of.” Person, 224 Minn, at 543, 29 N.W.2d at 362 (citation and quotation omitted). In similar circumstances, however, the Minnesota Supreme Court has rejected a rule of law that places the risk of obvious dangers solely on the user of the dangerous item.

In Holm v. Sponco Mfg., Inc., 324 N.W.2d 207, 210 (Minn.1982), a case involving an “aerial ladder,” the supreme court addressed the “latent-patent danger rule which relieves a manufacturer from liability if the dangers of his product are obvious to the user.” Noting that Minnesota law requires an analysis of comparative fault, the supreme court rejected the latent-patent danger rule:

The latent-patent defect rule makes obviousness a complete bar to recovery. It circumvents [the comparative fault statute] and swallows up the assumption of the risk defense. This result is contrary to the public policy of apportioning loss between blameworthy plaintiffs and defendants.

Id. at 213.

The simple tool doctrine suffers from the same flaws, placing the risk of a dangerous simple tool entirely on the employee using the tool and ignoring, in violation of comparative fault principles, the relative fault of the employer that provided the tool. If an employer provides a dangerous simple tool and an employee uses it, we see no sound reason why standard comparative fault principles should not be applied to determine the relative degrees of fault and apportion the loss accordingly. Furthermore, since the rule applies only in employer-employee situations, where most lawsuits for negligence will be barred by the workers’ compensation statutes, we do not foresee a flood of litigation by abandoning the simple tool doctrine and allowing a potential remedy in the few situations where the workers’ compensation statutes do not apply.

This court, however, does not have the authority to make that decision. Though perhaps anachronistic, the simple tool doctrine has not been expressly rejected by either the legislature or the supreme court. Furthermore, as the district court held, it applies in this situation. We therefore must decide this case in accordance with the doctrine.

DECISION

The district court did not err by granting summary judgment to Tuck and Mein-ers.

Affirmed.


author: HARTEN, Judge

text:
    In the Matter of the WELFARE OF K.J.K., JR., a Minor.
    No. CX-00-1337.
    Court of Appeals of Minnesota.
    Jan. 16, 2001.

      John J. Muhar, Itasca County Attorney, Michael J. Haig, Assistant County Attorney, Grand Rapids, MN, (for appellant Itasca County Human Services Department).
    Steven A. Nelson, International Falls, MN, (for respondent Koochiching County Community Services and mother).
    David C. Johnson, Koochiching County Attorney, International Falls, MN, (for Koochiching County Department of Human Services).
    Lyndon F. Larsen, International Falls, MN, (for child).
    Daniel' L. Griffith, Griffith Law Office, International Falls, MN, (Guardian ad li-tem for child).
    Considered and decided by TOUSSAINT, Chief Judge, HARTEN, Judge, FOLEY, Judge.

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

   OPINION

HARTEN, Judge

A social worker for appellant Itasca County filed a CHIPS petition for K.J.K. in the Itasca County Juvenile Court. Venue was properly transferred to respondent Koochiching County, where, by way of disposition, the Koochiching County Juvenile Court ordered appellant transferring county to continue its legal custody of K.J.K. Because retaining custody in another county is not among the CHIPS proceeding dispositions permitted by Minn.Stat. § 260C.201, subd. 1 (Supp.1999), we reverse and remand.

FACTS

K.J.K. was born in 1996. In March 2000, a social worker for appellant Itasca County (Itasca) filed a CHIPS petition for him in the Itasca County Juvenile Court. Because K.J.K.’s mother was in the process of moving to respondent Koochiching County, all parties agreed that case should be transferred to Koochiching County.

The Koochiching County Juvenile Court held a dispositional hearing and ordered that Itasca County Human Services (ICHS) retain custody of K.J.K. and produce a case plan for him. ICHS did not comply. Following another hearing, the Koochiching County Juvenile Court ordered that its earlier order remain in force and that personnel from ICHS and Kooc-hiching County Community Services (KCCS) meet and discuss all outstanding issues in the case.

Because ICHS again did not comply, the Koochiching County Juvenile Court ordered it to appear and show cause why it should not be held in contempt for failing to obey the court’s orders. At the hearing, the order to show cause was vacated, but the parties came to a joint county stipulation on the pre-appeal responsibilities of ICHS and of KCCS in regard to K.J.K. The stipulation provided that ICHS would retain custody and have responsibility for providing protective services. Appellant challenges the Koochiching County Juvenile Court’s orders.

ISSUE

Does a transfer of venue of a CHIPS proceeding confer on the receiving court jurisdiction to retain custody in the transferring county?

ANALYSIS

The application of law to stipulated facts is a question of law, which this court reviews de novo. Morton Bldgs., Inc. v. Commissioner of Revenue, 488 N.W.2d 254, 257 (Minn.1992). There are no relevant facts in'dispute here. Nor is it disputed that the Itasca court properly transferred venue. See Minn.Stat. § 260C.121, subd. 2 (Supp.1999) (providing that “[w]hen it appears that the best interests of the child, society, or the convenience of the proceedings will be served by a transfer, the court may transfer the case to the juvenile court of the county of the child’s residence.”). Further, it is undisputed that the Koochiching County Juvenile Court has the authority to transfer KJ.K’s custody from ICHS to KCCS.

The question before us is whether the Koochiching County Juvenile Court must make that transfer. Minn.Stat. § 260C.201, subd. 1(a) (Supp.1999), provides that, when a child is declared CHIPS, the court shall order one of four dispositions: (1) placing the child, under the protective supervision of the local social services agency, in the home of a parent; (2) transferring legal custody to a child-placing agency or the local social services agency; (3) ordering the provision of special care and treatment; or (4) allowing a child 16 or older to live independently. See also Minn.R.Juv.P. 76.05, subd. 2(a) (same). The Koochiching County Juvenile Court satisfactorily explained why the first option was impossible; the third and fourth options were not applicable. Therefore, the Koochiching County Juvenile Court became obliged to take the remaining option, option (2), and transfer legal custody of K.J.K. to a child-placing agency or the local social services agency. Under the plain wording of the statute, KCCS is the local social services agency because it is situated in Koochiching County and works with the Koochiching County Juvenile Court.

Respondent argues that ICHS is the local social services agency because it was the petitioning agency, and cites Minn. Stat. § 260C.201, subd. 1(a)(1), in support. But that statute provides that, at disposition, after a child is declared CHIPS, a court shall, among other options, “place the child under the protective supervision of the local social services agency or child-placing agency * * It does not provide that the petitioning agency is the local social services agency; it does not mention the petitioning agency.

Neither on its face nor by interpretation does Minn.Stat. § 260C.201, subd. 1, confer jurisdiction on a juvenile court to dispose of a CHIPS proceeding by assigning custody to the social service agency of another county. Thus, law requires that the Koochiching County Juvenile Court transfer KJ.K’s custody to KCCS. We reverse and remand to the Koochiching County Juvenile Court with directions to promptly accomplish that transfer.

Reversed and remanded.

      . This opinion does not concern which county is financially responsible for services provided to K.J.K. See Minn.Stat. § 256G.02, subd. 4, (2000) (county of financial responsibility).


author: GILBERTSON, Justice

text:
    2001 SD 1
    In the Matter of the SUPPORT OBLIGATION OF Carlos Do REGO.
    No. 21485.
    Supreme Court of South Dakota.
    Considered on Briefs Nov. 27, 2000.
    Decided Jan. 3, 2001.
    Kent R. Hagg of Whiting, Hagg & Hagg, Rapid City, SD, Attorneys for ap-pellee DoRego.
    Debra D. Watson, Rapid City, SD, Attorney for appellant Vickie.
   GILBERTSON, Justice

[¶ 1.] In November of 1999, after receiving financial assistance from the State of South Dakota, Vickie sought past and future child support payments from Carlos Do Rego (Do Rego). The circuit court found that the presumption of legitimacy precluded Do Rego’s support obligation and denied Vickie’s claim. We affirm.

FACTS AND PROCEDURE

[¶ 2.] Do Rego and Vickie were romantically involved beginning in 1985 and ending in the fall of 1987. This relationship included several sexual encounters. After the last encounter, in either late October or early November of 1987, Vickie phoned Do Rego, informing him that she was pregnant. There is a dispute as to whether Vickie informed Do Rego that the child was his. Do Rego claims that Vickie told him that she was unsure as to the identity of the father. Vickie denies she made that statement, asserting that she had no doubt who the father was because Do Rego was the only person with whom she had engaged in sexual relations. Vickie was two months along at the time she informed Do Rego of her pregnancy.

[¶ 3.] The relationship between Vickie and Do Rego ended after this revelation. On December 26, 1987, Vickie married Michael, with whom she had previously been romantically involved. Michael and Vickie have remained married since that date. At the time of the marriage, Michael was aware of Vickie’s pregnancy as well as the fact that he was not the father. Vickie’s child, C.R., was born on April 10, 1988. C.R. was given Michael’s last name and has been treated as Michael’s child. After they were married, Michael and Vickie lived in New Jersey for a short time before returning to the Rapid City area.

[¶ 4.] While Michael and Vickie were living in New Jersey, Do Rego attempted to contact Vickie at her previous phone number, which was her parents’ home. He was informed that Vickie had moved out and been married. Do Rego assumed that Vickie had married the father of her child. Although Do Rego was stationed at Ellsworth Air Force Base until January of 1992, there was no further contact between Do Rego and Vickie from the phone conversation in 1987 until November of 1999. At that time, Do Rego received a notice from the State of South Dakota that it would be seeking past and future child support for Vickie’s son, C.R.

[¶ 5.] At Do Rego’s request, a paternity test was performed, revealing a 99.99% probability that he was the father of C.R. A child support hearing was subsequently held before a referee. The referee issued a report recommending the action be dismissed. The referee found that because C.R. was born to Vickie while she was married to Michael, C.R. was the legitimate son of Michael pursuant to the presumption of legitimacy mandated in SDCL 25-8-57. The referee further concluded that, under SDCL 25-8-59, any action contesting the presumption of legitimacy must have been brought within sixty days of C.R.’s birth, because no fraud, duress, or material mistake had occurred. Because this window had long ago closed, C.R. was presumed to be Michael’s legitimate child. Therefore, Do Rego was not legally responsible for the support of C .R. The circuit court adopted the referee’s conclusions. Vickie appeals to this Court, raising the following issue:

Whether the presumption of legitimacy precludes the recovery of child support from the biological father.

STANDARD OF REVIEW

[¶ 6.] There is no dispute of the facts material to a resolution of this issue, therefore we are limited to a question of statutory interpretation. The interpretation of statutes is reviewed as a matter of law under the de novo standard. Cole v. Bd. of Adj., City of Huron, 1999 SD 54, ¶ 4, 592 N.W.2d 175, 176.

ANALYSIS AND DECISION

[¶ 7.] Pursuant to SDCL 25-8-57, “[a]ny child born in wedlock, or born within ten months after dissolution of the marriage, is presumed legitimate to that marriage.... ” Because C.R. was born while Michael and Vickie were married, he is presumed to be a legitimate child of that marriage. “This presumption of legitimacy is one of the very strongest, if not the strongest, presumption known to the law.” In re Kessler’s Estate, 76 S.D. 158, 162, 74 N.W.2d 599, 601 (1956). However, this presumption is not absolute. SDCL 25-8-57 provides that the presumption of legitimacy can be contested, but only “by the husband or wife, or a descendant of one or both of them.” Before she is entitled to receive child support payments, Vickie must rebut the presumption that C.R. is Michael’s legitimate son. Vickie claims that she has rebutted this presumption by obtaining a blood test that established a 99.99% probability that Do Rego is the father of C.R. Vickie also claims that the presumption of legitimacy is rebutted because Do Rego does not contest that he is the father of C.R.

[¶ 8.] Whether this evidence effectively rebuts the presumption of legitimacy will not be reached as the statute of limitation to contest the presumption has expired. Any action to challenge a presumption of legitimacy must be brought within sixty days of the creation of the presumption or within three years of that date in eases of fraud, duress or material mistake of fact. SDCL 25-8-59. The presumption in this case was created on the date of C.R.’s birth, April 10, 1988. Because no fraud, duress or material mistake has been alleged, the presumption of legitimacy could only be contested within sixty days of that date. That period expired long before Vickie challenged the legitimacy presumption in 1999.

[¶ 9.] Vickie claims that the statute of limitation in SDCL 25-8-59 applies only when a presumption of paternity is contested, as opposed to when a presumption of legitimacy is challenged. This argument fails because SDCL 25-8-59 applies to “[a]ny action contesting a rebuttable presumption of paternity as established by §§ 25-8-50 to 25-8-58, inclusive....” By its very language, SDCL 25-8-59 applies to the presumption of legitimacy mandated in SDCL 25-8-57. Vickie’s attempt to distinguish the two presumptions is unpersuasive in light of the statutory language. Therefore, the circuit court was correct in applying the 60 day statute of limitation. Because Vickie did not rebut the presumption of legitimacy within the allowed period of time, she is precluded from challenging it now. We affirm.

[¶ 10.] MILLER, C.J., and SABERS, AMUNDSON and KONENKAMP, JJ., concur.

       Vickie bases this claim on SDCL 25-8-58 which provides that “[g]enetic test results establishing a threshold probability of paternity of ninety-nine percent or more shall create a rebuttable presumption of paternity....”


author: SABERS, Justice.

text:
    2001 SD 8
    Sidney Joe COBLE and Barbara Coble, Plaintiffs and Appellees, v. Chad W. HANSON, Defendant and Appellee, and Infinity Insurance Company, Garnishee and Appellant.
    No. 21473.
    Supreme Court of South Dakota.
    Considered on Briefs on Nov. 27, 2000.
    Decided Jan. 10, 2001.

      Acie W. Matthews of Pruitt, Matthews and Jorgensen, Sioux Falls, for plaintiffs and appellees Coble.
    Melissa C. Hinton of Davenport, Evans, Hurwitz & Smith, Sioux Falls, for appellant.
   SABERS, Justice.

[¶ 1.] The issue is whether SDCL 1-5-4 provides an additional day to make payment on an insurance policy, thereby extending coverage, when the policy provides it is to expire on a Sunday, a legal holiday. The trial court held in the affirmative and we agree.

FACTS

[¶ 2.] Infinity Insurance Company (Infinity) issued a policy of automobile liability insurance to Chad and Carrie Hanson (Hanson) of Winner, South Dakota. The policy covered the period of May 2, 1997 to November 2, 1997. The policy was to expire at 4:02 pm on November 2, 1997. The policy did not provide a grace period.

[¶ 3.] On November 3, 1997, Chad Hanson was involved in .an automobile accident with Sidney Joe Coble. Sometime after the accident on November 3, 1997, Carrie Hanson had the premium hand delivered to Infinity’s insurance agent in Sioux Falls, South Dakota , Infinity was later advised of the loss. The insurance policy was reinstated but with an effective date of November 4, 1997. Infinity denied coverage after further investigation revealed the policy expired before the time of accident.

[¶ 4.] Coble instituted a suit against Hanson. Hanson signed a confession of judgment in favor of Coble. On May 3, 1999 a judgment was filed in Tripp County for $10,140.09. Following the entry of this judgment, Coble commenced garnishment proceedings against Infinity alleging liability for the judgment. Coble filed a motion for summary judgment and Infinity brought a cross motion denying liability. The trial court granted Coble summary judgment determining that Infinity was liable based on SDCL 1-5=4. Infinity appeals.

STANDARD OF REVIEW

[¶ 5.] Our standard of review for summary judgment is well established and briefly is “whether a genuine issue of material fact exists and whether the law was correctly applied.” Manuel v. Wilka, 2000 SD 61, ¶ 17, 610 N.W.2d 458, 462. The issue on appeal involves a question of statutory interpretation. “Statutory interpretation is a question of law, which we review de novo.” In re Estate of Klauzer, 2000 SD 7, ¶ 22, 604 N.W.2d 474, 479.

[¶ 6.] WHETHER THE TRIAL COURT ERRED IN APPLYING SDCL 1-5-4 TO PERMIT THE RENEWAL OF THE INSURANCE CONTRACT.

[¶ 7.] The trial court determined that SDCL 1-5=4 applied to these facts to permit the renewal of the policy despite the stated expiration of the policy term. SDCL 1-5-4 provides:

Whenever any act of a secular nature, other than a work of necessity or mercy, is appointed by law or contract to be performed upon a particular day, which day falls upon a holiday, such act may be performed upon the next business day, with the same effect as if it had been performed upon the day appointed.

This statute applies to these facts.

[¶ 8.] SDCL 1-5-4 applies when “any act ... is appointed by law or contract to be performed upon a particular day.” Hanson’s insurance policy was to expire on Sunday, November 2, 1997 at 4:02 pm. Hanson received an offer of renewal dated October 10, 1997 to extend the insurance coverage from November 2, 1997. The option to renew provided that it had to be exercised by November 2, 1997 at 4:02 pm. The option to renew was appointed by the contract to occur on a Sunday, and therefore could be exercised until November 3, 1997 by 4:02 pm.

[¶ 9.] In Stanley v. Pilker, 40 S.D. 403, 167 N.W. 393 (1918), we held that a party given “until” a certain date to make payment on a land sale contract would be granted another day when the final day to perform was a legal holiday. Stanley, 167 N.W. at 394. The Stanley court made this determination based on R.Civ.C. 1903, § 2461, the predecessor to SDCL 1-5-4. When another day for performance is allowed under SDCL 1-5-4, the act has “the same effect as if it had been performed upon the day appointed.” SDCL 1-5-4. Similarly, the terms of the renewal offer here provided Hanson a date of November 2, 1997 to renew the insurance contract. Because November 2, 1997 was a Sunday, a legal holiday by statute, the offer of renewal could be exercised a day later.

[¶ 10.] The existence of such an option does not automatically operate to extend coverage. “The fact that the policy contained an option for [Hanson] to renew the policy, and that this option continued in force by the terms of the policy [ ] does not extend the policy so as to cover an accident which happened on the following day.” Davis v. Mutual Ben. Health & Accident Ass’n, 168 Okla. 514, 34 P.2d 579, 580 (1934). However, while coverage is not extended another day merely because the policy expires on a holiday, the right to exercise the option to renew does. Id. at 580. If the insured exercises the option within the time allowed by the statute, the coverage extends from the holiday as if the option had been exercised on that day. Id. This does not mean that insurance policies that expire on a legal holiday are automatically extended for additional time, nor does an option not exercised on the next available day, or not exercised at all, extend the coverage. The only thing extended by SDCL 1-5 — 4 is the ability of an insured to renew a policy when the last day to renew was a holiday.

[¶ 11.] Infinity asserts that these facts are controlled by the rule in 43 American Jurisprudence (Second) Insurance § 240:

Even though a policy of insurance expires on a legal holiday, the risk is thereby terminated. Thus, an accident insurance policy does not cover an accident occurring on the day after the date of its expiration as fixed by its term, even though such date was a holiday, and notwithstanding a statute relating to acts appointed by contract to be performed or provided by law to be done on a day which falls on a holiday,

43 AmJur2d Insurance § 240 (1989). However, a review of the case cited as authority for this proposition indicates otherwise.

[¶ 12.] In Upton v. Travelers, Ins. Co., the California Supreme Court held that an option to renew does not extend the policy. Upton v. Travelers, Ins. Co., 179 Cal. 727, 178 P. 851, 852 (1919). “The only thing extended by the statute is the time for exercising the option.” Id. Yet in Upton, unlike this case, the insured failed to exercise that option the day following the legal holiday, and coverage was denied. As these facts are clearly distinguishable, and the underlying authority fails to support Infinity’s position, we find its argument unpersuasive. Instead, we are persuaded by our precedent and the other authorities that recognize Hanson “was granted another day in which he would otherwise have been entitled to perform.” Stanley, 167 N.W. at 394.

[¶ 13.] “An option is a mere offer, and, unless it is accepted within the time limited, it is of no force for any purpose.” Davis, 34 P.2d at 580. An unexercised offer floating in the background does not operate to extend coverage. However, when that option is exercised within the time frame provided by SDCL 1-5-4, it effectively operates to extend coverage “with the same effect as if it had been performed upon the day appointed.” SDCL 1-5-4. Hanson’s renewal is thereby effective as of November 2, 1997 and provided coverage when the accident occurred on November 3,1997.

[¶ 14.] Therefore, we affirm.

[¶ 15.] MILLER, Chief Justice, and AMUNDSON, KONENKAMP, and GILBERTSON, Justices, concur.

      . Hanson testified on deposition that she actually wrote the check on Saturday, November 1, 1997. However, "things got hectic” and she didn’t make it to the mailbox. The accident with Coble occurred the morning of Monday, November 3, 1997. On Monday, November 3, 1997, Hanson’s employer hand delivered a check to Infinity’s agent in Sioux Falls early that afternoon.

      . SDCL 1-5-1 defines every Sunday as a holiday.

      . This secondary authority is also contradicted by 43 AmJur2d Insurance § 845 (1989). "[I]t is generally held, sometimes by virtue of applicable statutes, that where an insurance policy calls for the payment of a premium by a designated date, whether such a day is a due date, the end of a period of grace, or some special date arranged between the parties, and such date falls on a Sunday or legal holiday, payment made or tendered on the next succeeding business day is sufficient.”


author: GILBERTSON, Justice SABERS, Justice

text:
    2001 SD 10
    Jessica Marie GEHRTS, Plaintiff and Appellant, v. Jon BATTEEN and Cindy Nielsen, Defendants and Appellees.
    No. 21456.
    Supreme Court of South Dakota.
    Argued Nov. 30, 2000.
    Decided Jan. 17, 2001.

      Thomas M. Tobin of Tonner, Tobin and King, Aberdeen, South Dakota, Attorneys for plaintiff and appellant.
    Roy A. Wise of Richardson, Groseclose, Wyly, Wise & Sauck, Aberdeen, South Dakota, Attorneys for defendants and appel-lees.
   GILBERTSON, Justice

[¶ 1.] Gehrts was bitten by a St. Bernard owned by Nielsen. Gehrts sued Nielsen in strict liability and in negligence. The trial court granted summary judgment as to both claims. Gehrts appeals and we affirm.

FACTS AND PROCEDURE

[¶ 2.] On July 29, 1995, Cindy Nielsen (Nielsen) visited the home of Jessica Gehrts (Gehrts) to pick up a wreath made by Gehrts’ mother. Nielsen had come directly from dog obedience school with her eight-month-old dog, Wilbur, a St. Bernard. Wilbur was secured in the back of Nielsen’s pickup by a harness attached to a restraining device that had been installed in the pickup box. This device allowed Wilbur to move freely between the sides of the box, but limited his movement between the front and back. While the parties were near the truck, Gehrts asked Nielsen if she could pet Wilbur. Nielsen allowed her to do so. As Gehrts reached up to pet Wilbur, he bit her in the face, causing injuries to her nose and forehead. Gehrts received extensive medical treatment as a result of those injuries.

[¶ 3.] Gehrts sued Nielsen and her husband, Jon Batteen, to recover for her injuries. In her complaint, Gehrts alleged that Nielsen was negligent in failing to restrain or control her dog. Nielsen moved for summary judgment, which was granted. Gehrts appeals the trial court’s ruling and we affirm.

STANDARD OF REVIEW

[f 4.] When reviewing a trial court’s decision to grant summary judgment, we will affirm only if all legal questions have been decided correctly and there are no genuine issues of material fact. Holzer v. Dakota Speedway, 2000 SD 65, ¶ 8, 610 N.W.2d 787, 791 (citations omitted). The nonmoving party will receive the benefit of all reasonable inferences that can be drawn from the facts. Id . It is the responsibility of the moving party to demonstrate the absence of genuine issues of material fact. Id. at 791-92. Only if that burden is met will the moving party be entitled to judgment as a matter of law. Id. at 792. Additionally, summary judgment will be affirmed if it is correct for any reason. Strassburg v. Citizens State Bank, 1998 SD 72, ¶ 5, 581 N.W.2d 510, 513.

ANALYSIS AND DECISION

[¶ 5.] 1. Negligence

[¶ 6.] When wild animals, such as a bear or wolf, are kept as pets, an owner is liable for injuries caused by the animal. Wanvick v. Mulvey, 80 S.D. 511, 513, 127 N.W.2d 433, 434 (1964). This results even if the owner had no prior knowledge of the animal’s propensity to cause harm, and even if the owner has exercised the utmost care in preventing harm.

[¶ 7.] Owners of domesticated animals may also be held liable for harm caused by their pet if the owner knows or has reason to know that the animal has abnormally dangerous propensities. Ban- man v. Auch, 539 N.W.2d 320, 324 (S.D. 1995) (citing Anderson v. Anderson, 41 S.D. 32, 36, 168 N.W. 852, 852-53 (1918)). Again, this liability attaches regardless of the amount of care exercised by the owner. Id. However, this liability is not strict liability. Rather, the failure to act upon the knowledge of an animal’s abnormally dangerous propensities establishes a breach of the duty of care owed by the owner to those that come in contact with the animal. As it is a cause of action sounding in negligence, the defenses of contributory negligence and assumption of the risk are available to temper this liability. Id.

[¶ 8.] Before this breach of duty will affix to an owner, the plaintiff must establish that the owner knew or should have known of that animal’s dangerous propensities. This knowledge is generally imputed to the owner when there is evidence of at least one attack by the animal. In the case of a dog, evidence of the owner’s knowledge that it constantly barked, bared its teeth, and strained at its leash is sufficient to establish dangerous propensities, absent an actual attack. 4 AmJur2d, Animals § 98 (1995).

[¶ 9.] However, in certain instances a cause of action for negligence can survive without the owner’s actual knowledge of an animal’s dangerous propensities. Warwick, 80 S.D. at 513, 127 N.W.2d at 434; 4 AmJur2d, Animals §§ 102, 107. When the owner does not know of the animal’s dangerous propensities, the ordinary negligence standard of foreseeability will still be applied. Id. To recover, the plaintiff must establish that a duty existed between the owner and the victim and that there was a breach of that duty. Thus, when no actual knowledge of dangerousness exists, the plaintiff must establish that as an ordinary, prudent person, the owner should have foreseen the event that caused the injury and taken steps to prevent the injury. Such liability may arise “depending upon the kind and character of the particular animal concerned, the circumstances in which it is placed, and the purposes for which it is employed or kept.” Id. § 102.

[¶ 10.] In the present action, there has been no evidence presented that Nielsen had any knowledge that Wilbur had dangerous propensities. The parties agree that, by nature, St. Bernards are gentle dogs. Nielsen and her husband testified in their depositions that Wilbur had never previously growled, bared his teeth, tried to bite or act aggressively toward any person. In addition, Gehrts admitted that she did not know of any incidents that would have alerted Nielsen to any dangerous propensities. Gehrts argues that the act of an unprovoked biting is evidence of the animal’s dangerous propensity. WTiile other jurisdictions may allow juries to determine after the fact whether the animal had dangerous propensities, such reasoning has been expressly rejected in South Dakota. Tipton v. Town of Tabor, 1997 SD 96, ¶ 23, 567 N.W.2d 351, 361.

[¶ 11.] Nevertheless, Gehrts will still be allowed to recover if she can show that Nielsen failed to use reasonable care in the circumstances in that Nielsen as a prudent person should have foreseen the danger. In support of this claim, Gehrts produced an affidavit from a dog expert who concluded that Nielsen acted in an unreasonable manner when she failed to properly restrain Wilbur. This affidavit was based largely on the fact that the Gehrts family kept a dog at their home, its scent would be on Gehrts, and Nielsen should have known that the smell of a strange dog would make Wilbur act aggressively. However, there is no evidence in the record that Nielsen was aware that Gehrts owned a dog or that the scent of the dog would be on Gehrts. Beyond the assertions in the affidavit, there is no evidence or reason to believe that Nielsen knew, or as a prudent person should have known, that the scent of a strange dog would cause Wilbur to attack Gehrts.

[¶ 12.] Gehrts also claims that Nielsen was negligent in failing to restrain and have control over Wilbur while he was being petted by Gehrts. Wilbur was attached to a harness in the back of the pickup. This harness was specifically designed to secure a large dog. Gehrts claims that Nielsen should have released Wilbur from the harness, taken him out of the truck bed and allowed Gehrts to pet him while Nielsen held the leash. Whether this would have prevented the injury is speculative. It may actually have exacerbated the situation. If Wilbur had become sufficiently agitated to pull free of Nielsen’s control, Gehrts’ injuries may have been much more severe. As the nonmov-ing party, Gehrts has the obligation to “set forth specific facts showing that there is a genuine issue for trial.” SDCL 15-6-56(e). “[P]roof of a mere possibility is never sufficient to establish a fact. ‘When challenging a summary judgment, the non-moving party “must substantiate [her] allegations with sufficient probative evidence that would permit a finding in [her] favor on more than mere speculation, conjecture, or fantasy.” ’ ’’Elliott v. A & B Welding Supply Co., 1999 SD 57, ¶ 16, 594 N.W.2d 707, 710 (internal citations omitted). Gehrts has failed to substantiate her allegations beyond the level of mere speculation or conjecture.

[¶ 13.] There is simply no evidence that Nielsen violated the reasonable person standard of care in her handling of Wilbur. Therefore, Gehrts’ cause of action for negligence cannot survive.

[¶ 14.] 2. Strict Liability

[¶ 15.] Nielsen also urges us to follow the lead of the South Carolina Supreme Court by judicially adopting a strict liability standard for injuries caused by dogs. See Hossenlopp v. Cannon, 285 S.C. 367, 329 S.E.2d 438 (1985). We decline to do so. The overwhelming majority of states that impose strict liability for injuries caused by dogs have done so through legislative mandate. See Ariz.Rev.Stat. Ann. § 11-1025 (West 1990 & Supp. 2000); Cal.Civil Code § 3342 (West 1997); Fla. Stat.Ann. § 767.04 (West 1997 & Supp. 2000); Mass.Gen.Laws Ann. ch. 140, § 155 (West 1995); Mich.Comp.Laws § 287.351 (1996); Minn.Stat.Ann. § 347.22 (West 1990); Neb.Rev.Stat. § 54-601 (1998); N.J.Stat.Ann. § 4:19-16 (West 1998); Wash.Rev.Code.Ann. § 16.08.040 (West 1992). Our legislature has already imposed strict liability on dog owners for damages inflicted upon “poultry or domestic animal[s].” SDCL 40-34-2. While one may question the application of strict liability for damages to livestock, but not for injuries to children, the legislature is the proper place to decide such public policy issues.

[¶ 16.] The trial court’s grant of summary judgment is affirmed.

[¶ 17.] AMUNDSON and KONENKAMP, Justices, concur.

[¶ 18.] MILLER, Chief Justice, and SABERS, Justice, dissent.

SABERS, Justice

(dissenting).

[¶ 19.] SDCL 20-9-1 provides in part: Every person is responsible for injury to the person, property, or rights of another caused by his willful acts or caused by his want of ordinary care or skill....

[¶ 20.] SDCL 20-9-1 declares that every person, which includes a dog owner, is responsible for “injury to the person ... caused by want of ordinary care.” The majority opinion correctly recognizes that “a cause of action for negligence can survive without the owner’s actual knowledge of an animal’s dangerous propensities.” “In the absence of any evidence of viciousness of a dog ... liability for the injuries attach under the due diligence and ordinary care rule.” 4 AmJur2d Animals, § 107 (1995). Yet, while recognizing that knowledge of vidousness is not always required, the majority opinion analysis proceeds as though it is.

[¶ 21.] The owner of a domesticated animal may be subject to a negligence cause of action for harm caused. Bauman v. Auch, 539 N.W.2d 320, 324 (S.D.1995). I agree with the majority opinion’s statement that “Gehrts will still be allowed to recover if she can show that Nielson failed to use reasonable care in the circumstances in that Nielson as a prudent person should have foreseen the danger.” However, I disagree with the premature conclusion that the facts of this case warrant summary judgment for Nielson. “This Court has stated on numerous occasions that summary judgment is generally not appropriate in negligence actions.” Lalley v. Safway Steel Scaffolds, Inc., 364 N.W.2d 139, 140 (S.D.1985); Nemec v. Deering, 350 N.W.2d 53, 56 (S.D.1984); Myers v. Lennox Co-op. Assn., 307 N.W.2d 863, 864 (S.D.1981). In addition, the existence of an affirmative defense, such as contributory negligence, is ordinarily a question of fact to be resolved by the jury. Myers, 307 N.W.2d at 864.

[¶ 22.] An owner of a domesticated animal has a duty to protect individuals if the danger should be reasonably anticipated. Zeeb v. Handel, 401 N.W.2d 536, 537 (S.D.1987). Whether that owner should anticipate such danger is a question of fact to be decided by a jury. Id. “The necessary precautions to be observed or foresight to be exercised are usually questions to be resolved by the jury.” Hardsaw v. Courtney, 665 N.E.2d 603, 607 (Ind.App.1996). “Any given method of restraining a dog may or may not be adequate .under the particular facts of a particular case.” Id.

[¶ 23.] Whether Nielson was negligent: 1) in restraining the dog, 2) allowing the fourteen year old girl to pet the dog, 3) failing to release the dog from the harness, or 4) whether Nielson knew that her coworker, Gehrts’ mother, owned a dog at that house are genuine issues of material fact that should be resolved by a jury. The facts of this case can not be resolved by summary judgment or rubber stamped by appellate review. The majority opinion’s finding that Nielson was not negligent for failing to release the dog from the harness is a function best left to the jury .

[¶ 24.] I would reverse and remand for a jury to determine whether Nielson’s conduct fell below the standard of care. If it was, then and only then, do questions of assumption of the risk or contributory negligence arise. Therefore, I respectfully dissent.

[¶ 25.] MILLER, Chief Justice, joins this dissent.

      . There is no requirement that the attack cause injury to the victim to establish dangerous propensities. The common law "one free bile rule” was expressly rejected in Ross v. Hanson, 86 S.D. 654, 656, 200 N.W.2d 255, 256 (1972).

      . In response to Gehrts argument that the dog should have been released from the harness, the majority opinion states:
      Whether this would have prevented the injury is speculative. It may actually have exacerbated the situation. If Wilbur had become sufficiently agitated to pull free of Neilson's control, Gehrts' injuries may have been much more severe.
      I believe, and South Dakota law provides, that such fact-finding is best left to the jury.