author: G. BARRY ANDERSON, Judge.

text:
    ALPHA REAL ESTATE COMPANY OF ROCHESTER, Appellant, v. DELTA DENTAL PLAN OF MINNESOTA, et al., Respondents.
    No. C7-01-2259.
    Court of Appeals of Minnesota.
    Nov. 18, 2003.
    Review Denied Jan. 20, 2004.

      Timothy J. Hassett, Janet A. Newberg, Felhaber, Larson, Fenlon & Vogt, P.A., St. Paul, MN, for appellant.
    David B. Morse, Eagan, MN, for respondents.
    Considered and decided by KALITOWSKI, Presiding Judge, LANSING, Judge, and G. BARRY ANDERSON, Judge.
   OPINION

G. BARRY ANDERSON, Judge.

Appellant Alpha Real Estate Company (“Alpha”) sued respondents Delta Dental Plan of Minnesota (“Delta”) and Sui Gen-eris Development Company (“Sui Gener-is”), a wholly owned subsidiary of Delta, to enforce the exercise of Alpha’s option to purchase a dental clinic pursuant to Alpha’s lease with Sui Generis; Sui Generis and Delta counterclaimed for breach of contract. After a trial, the district court concluded that Alpha had breached the parties’ contract by failing to pay a five-percent rental surcharge and that the disputed provision was not illegal under federal or state law. Alpha appealed, and this court affirmed. Alpha Real Estate of Rochester v. Delta Dental Plan of Minn., C7-01-2259, 2002 WL 1840897 (Minn.App. Aug. 13, 2002), affd in part, rev’d in part, and remanded, 664 N.W.2d 303 (Minn. 2003). The supreme court affirmed in part and reversed in part and remanded to this court to conduct a de novo review as to whether the five-percent rental surcharge violated state and federal law. Alpha Real Estate of Rochester v. Delta Dental Plan of Minn., 664 N.W.2d 303 (Minn.2003). We affirm in part, reverse in part, and remand for determination of attorney fees.

FACTS

This case arises from the establishment of a dental clinic in Rochester, Minnesota. Delta Dental Plan of Minnesota is a nonprofit health-service-plan corporation that sells and administers dental benefits to group plans, governmental units, and labor unions on a contract basis. In 1995, Delta was experiencing difficulties finding service providers in the Rochester area. Delta contacted Dr. Ted Erickson, a Faribault dentist, and negotiated a contract under which Delta would purchase and construct a dental clinic in Rochester and Erickson would provide the services under a provider agreement. Both parties sought to keep the arrangement confidential.

To implement this plan, Delta formed a wholly owned subsidiary, Sui Generis Development Company, to purchase, construct, and equip the property and to act as landlord. Erickson formed two companies, Alpha Real Estate of Rochester (“Alpha”), which leased the property from Sui Generis, and Apollo Dental Center, PLC (“Apollo”), which leased the property from Alpha. Apollo also entered into a provider agreement with Delta and operated the dental clinic. Apollo is not a party to this appeal.

In 1995, the parties entered into lengthy negotiations concerning the dental clinic. A document known as the 1995 agreement contained the following provision, “If in any one calendar year during the first ten years of the Lease (1996-2005) the adjusted cash receipts exceed $1 million, [Alpha] shall pay to Sui Generis additional rent for that particular year a sum equal to five percent of adjusted cash receipts.” The 1995 agreement also provides that Erickson may purchase the clinic, but, in that event, “the additional five percent rental formula based upon adjusted cash receipts shall continue for the remainder of the ten year period.” The 1995 lease, a separate document, also contains the five-percent rental surcharge clause, but it does not provide that it continues after the sale of the clinic. The 1995 lease was replaced by the 1997 lease, which was drafted to reflect the fact that construction of the building had been completed; it contains the five-percent rental surcharge clause that was in the 1995 lease.

The benchmark amount of $1 million was attained in 1998 and in 1999, but Alpha did not pay the additional sums due under the five-percent clause in 1998 or 1999. Delta served notices of default but took no steps to evict Alpha, which otherwise continued to pay its rent.

In 1999, Alpha attempted to exercise its option to purchase the property, but Delta refused to convey the property unless Alpha agreed to pay the five-percent charge on a continuing basis after the sale pursuant to the 1995 agreement. Alpha sued for specific performance. Delta counterclaimed for breach of contract based on Alpha’s failure to make payments in 1998 and 1999 under the five-percent clause, and a court trial was held.

The district court, finding the lease ambiguous and considering extrinsic evidence, held that the five-percent clause survived Apollo’s exercise of the option to purchase the clinic and this court affirmed. Alpha Real Estate of Rochester v. Delta Dental Plan of Minn., C7-01-2259, 2002 WL 1840897 (Minn.App. Aug. 13, 2002), aff'd in part, rev’d in part, and remanded, 664 N.W.2d 303 (Minn.2003). The supreme court affirmed in part and reversed in part, holding in relevant part that the 1997 lease was a “complete integration” and “that under the 1997 lease Alpha’s five percent additional rent obligation terminates upon the closing of the option to purchase.” Alpha Real Estate Co. of Rochester v. Delta Dental Plan of Minn., 664 N.W.2d 303, 314 (Minn.2003). Under the supreme court’s decision, however, because the $1 million benchmark was achieved in 1998 while the 1997 lease was in effect and “because the district court ordered Alpha to pay Delta $165,500.81 in additional rent for 1998 and 1999,” the challenge to the legality of the five-percent clause remained. Id. Because this court applied an incorrect standard of review in considering the issue, the supreme court remanded to this court for de novo review the issue of “whether the five percent additional rent clause violates federal and state law.” Id. at 314-315. This court then reinstated the appeal.

ISSUES

I. Does the five-percent clause violate the federal anti-kickback statute, 42 U.S.C. § 1320a-7b(b) (Supp. V 1999), or the state law prohibiting conflicts of interest by health-care providers, MinmStat. § 62J.23 (2002)?

II. Does the five-percent clause violate the state prohibition against fee splitting by dentists under Minn.Stat. § 150A.11, subd. 4 (2002)?

III. If the five-percent clause is illegal, is it severable from the remainder of the 1997 contract?

ANALYSIS

Alpha took this appeal from the district courts decision, after a court trial, without making a motion for a new trial. As enunciated by the supreme court, “while permissive, motions for a new trial pursuant to Minn. R. Civ. P. 59.01 are not a prerequisite for appellate review of substantive questions of law when a genuine issue of law is properly raised and considered at the district court level.” Alpha Real Estate Co. of Rochester v. Delta Dental Plan of Minn., 664 N.W.2d 303, 311 (Minn.2003). An appellate court does “not give deference to the district court’s conclusions of law and we review questions of law de novo.” Id.

I.

The supreme court remanded to this court the issue of “whether the five percent additional rent clause violates federal and state law.” Id. at 315. Alpha contends that the five-percent clause is illegal because it violates the federal anti-kickback statute, 42 U.S.C. § 1320(a)-7b(b) (Supp. V 1999), and the state law prohibiting conflicts of interest by health-care providers, Minn.Stat. § 62J.23 (2002). As an initial matter, we note that under Minn. Stat. § 62J.23, subd. 2, the federal anti-kickback statutes and related federal regulations apply to the state statute until the Commissioner of Health adopts rules concerning the section. Because such state rules have not yet been adopted, we apply federal law, and a separate analysis of state law is unnecessary.

“A contract violating law or public policy is void.” Barna, Guzy & Steffen, Ltd. v. Beens, 541 N.W.2d 354, 356 (Minn.App.1995), review denied (Minn. Feb. 27, 1996). A contract may be deemed illegal if it violates the federal anti-kickback statute. See Feldstein v. Nash Cmty. Health Servs., Inc., 51 F.Supp.2d 673, 680 (E.D.N.C.1999) (addressing this issue). Under the federal anti-kickback statute, it is a felony to “knowingly and willfully solicit[ ] or receive[ ] any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind” in return for referrals or purchases, leases, or orders of any goods or services under federal health-care programs. 42 U.S.C. § 1320a-7b(b)(l) (emphasis added).

We focus here on the intent requirement. “Because the anti-kickback statute is a criminal statute with a scienter requirement,” there must be a finding that the requisite intent is present before it can be determined that the contract violates the federal anti-kickback law. Feldstein, 51 F.Supp.2d at 684. Courts have construed the intent requirement somewhat differently. The eighth circuit court of appeals explained it as follows: “Both the plain language of [the anti-kickback] statute, and respect for the traditional principle that ignorance of the law is no defense, suggests that a heightened mens rea standard should only require proof that [the defendant] knew that his conduct was wrongful, rather than proof that he knew it violated ‘a known legal duty.’ ” United States v. Jain, 93 F.3d 436, 441 (8th Cir.1996); see United States v. Starks, 157 F.3d 833, 838 (11th Cir.1998) (applying similar standard). Starks noted that the anti-kickback statute was not highly technical and did not pose a danger “of ensnaring persons engaged in apparently innocent conduct. Indeed, the giving or taking of kickbacks for medical referrals is hardly the sort of activity a person might expect to be legal.” 157 F.3d at 838. In contrast, the ninth circuit required that the defendant have knowledge of the anti-kickback statute and engage in prohibited conduct with specific intent to disobey the law. Hanlester Network v. Shalala, 51 F.3d 1390, 1399-1400 (9th Cir.1995). In any event, under either test, there must be proof that the defendant knew his conduct was wrongful.

In addressing the intent issue here, the district court first found that Alpha’s reliance on Starks was misplaced because there the defendants were found liable for violating the statute based on behavior that was in no way analogous to the behavior exhibited by the defendants in this case. In Starks, the defendants, conscious that their behavior violated the law, accepted kickback payments in parking lots or restaurants and threatened to take women’s babies away if they did not participate in the program from which the defendants were receiving money for their referrals. 157 F.3d at 836-37. The district court also distinguished Jain, in which the defendant was convicted for behavior the jury believed to be egregious, which included payments to the defendant of $1,000, allegedly for marketing, but which were in fact payments for referrals. 93 F.3d at 438. In contrast, the district court in this case concluded there was no intent to violate the anti-kickback law, finding “[t]hat neither Delta, Sui Generis, Erickson nor Alpha had any intent to violate the Federal Law or the State Law with respect to the August 1995 Agreement or the Lease. None of the parties involved thought that they were violating the law.”

In challenging this decision, Alpha argues that the five-percent clause was solicited with illegal intent because the evidence at trial demonstrated that the parties knew their conduct was wrong within the meaning of Jain. Alpha also contends that Delta tried to create various post hoc rationales for the purpose of the payment and asserts that Delta acted as a landlord through, essentially, a sham corporation, Sui Generis, that had no real business purpose. Alpha argues these “have the hallmarks of a corrupt motive or ‘bad purpose’ that fall directly within the definition of knowing and willful conduct under Jain.”

The district court heard extensive trial testimony and rejected the claim that Delta and Sui Generis acted with bad intent. The district court’s findings are not clearly erroneous. Applying the facts as found by the district court, the contract does not violate the anti-kickback statute as a matter of law. The district court’s determination is affirmed.

II.

We next address whether the five-percent clause violated the anti-fee-splitting law for dentists, Minn.Stat. § 150A.11, subd. 4 (2002). The district court ruled that it did not, reasoning that a violation requires a referral with an intent to defraud and that Delta did not have that intent.

The anti-fee-splitting statute provides:

It shall be unlawful for any dentist to divide fees with or promise to pay a part of the dentist’s fee to, or to pay a commission to, any dentist or other person who calls the dentist in consultation or who sends patients to the dentist for treatment or operation, but nothing herein shall prevent licensed dentists from forming a bona fide partnership for the practice of dentistry, nor to the actual employment by a licensed dentist of a licensed dental hygienist or another licensed dentist.

Minn.Stat. § 150A.1I, subd. 4. The corresponding rule states: “A person shall not directly or indirectly offer, give, receive, or agree to receive any fee or other consideration to or from a third party for referral of a patient in connection with the performance of professional services.” Minn. R. 3100.6900 (2001).

Generally, referral fees are deemed against public policy and unenforceable, and “fee-splitting agreements often require a division of labor or responsibility to be consistent with public policy.” Christensen v. Eggen, 577 N.W.2d 221, 225 (Minn.1998) (holding that fee-splitting agreement between attorneys does not comply with rules of professional conduct and is unenforceable without a division of labor or responsibility); see Reyburn v. Minn. State Bd. of Optometry, 24R Minn. 520, 524-25, 78 N.W.2d 351, 355 (1956) (discussing meaning of unprofessional conduct generally).

Analysis of whether a contract constitutes illegal fee splitting “depends upon a conclusion with respect to the nature of the conduct the legislature intended to proscribe.” Wyoming State Bd. of Examiners of Optometry v. Pearle Vision Ctr., Inc., 767 P.2d 969, 973 (Wyo.1989). In splitting fees,

[t]here is a danger that a doctor, knowing that he had to split his fees with one who did not render medical services, might be hesitant to provide proper services to a patient. Conversely, unneeded treatment might be rendered just because of the need to split fees. In either case, the interests of the patient would be compromised.

E & B Mktg. Enters., Inc. v. Ryan, 209 Ill.App.3d 626, 154 Ill.Dec. 339, 568 N.E.2d 339, 342 (1991).

The first issue we address is whether, as the district court determined, the anti-fee-splitting statute requires intent to defraud as the federal anti-kickback statute does. As discussed earlier, the federal statute explicitly contains an intent provision, applying to “whoever knowingly and willfully solicits or receives any remuneration” for referrals. 42 U.S.C. § 1320a-7b(b)(l). In contrast, the anti-fee-splitting statute contains no such language. Minn.Stat. § 150A.11, subd. 4. Consequently, specific intent to defraud is not required.

The next issue is whether the five-percent clause violated the prohibition against dividing fees with one “who sends patients to the dentist.” MinmStat. § 150A.11, subd. 4. Delta argues that the five-percent clause was not a referral tied to patients and there was no evidence that it sent patients to the dentist for treatment. Alpha contends that because it was required to pay Delta a percentage of revenues in exchange for patient referral services— Delta’s marketing efforts — the clause violates the prohibition against fee splitting.

To resolve this, we first review the facts as found by the district court. As we noted in our earlier opinion, the findings on this point are somewhat contradictory. Alpha Real Estate Co. of Rochester v. Delta Dental Plan of Minn., No. C7-01-2259, 2002 WL 1840897, *9 (Minn.App. Aug. 13, 2002). First, the district court found no evidence showing “that either Delta or Sui Generis ever referred any specific patients to the clinic.” It also found that “Alpha has not shown the referral by Delta or Sui Generis of any patients to the clinic who were covered under” a federal health-care program. Nonetheless, the district court found that “Delta receives 5% of all revenue, not just 5% of the revenue received on the basis of patients ‘referred’ to Alpha by Delta.” The district court also found, based on the 1995 agreement, that the purpose of the five-percent clause was “as reimbursement for the risk assumed by Delta under this agreement and also as a partial contribution to defraying Delta’s cost of marketing products in the Rochester area so as to provide a satisfactory volume of patients” for the clinic. To this end, the district court found Delta was marketing its products on behalf of the clinic by “(1) offering to send a marketing letter to IBM employees, (2) transferring patients from two other dental practices, (3) including the Dental Clinic in the IBM marketing fair, and (4) contacting the Mayo Clinic to attempt to have the dental clinic provide general dentistry services for Mayo employees.” The district court, however, characterized the five-percent clause as simply “a return on its investment in building and equipping the dental facility.” We therefore must determine whether these marketing efforts in exchange for a percentage of revenue from patients constitutes illegal fee splitting.

Other jurisdictions are divided on the issue of fee splitting. One court rejected a claim of illegal fee splitting, concluding that the record established that an optometrist did not pay the corporation to send or direct patients to him; instead, it was for the privilege of operating the franchise. Wyoming State Bd., 767 P.2d at 974. The court stated that “[t]he fact that the consideration for that privilege is based in part upon a percentage of the proceeds derived from furnishing optometric services does not make it an agreement for ‘splitting or dividing a fee’ any more than would a consideration for the sublease which was based in part upon a percentage of the optometrist’s income.” Id. The court distinguished cases in which the facts were “sufficiently close to providing or referring patients.” Id. at 973 n. 1. The court also rejected a claim that referrals occurred because the franchise’s advertising specifically encouraged or directed patients to go to the optometrist where the ads, for the most part, directed consumers to the franchise rather than the individual optometrist. Id. at 974.

Other courts have deemed marketing-related fee-splitting arrangements illegal. In one such case, a doctor contracted to have a marketing firm promote his practice to insurance companies, and, in exchange, the marketing firm was to receive a consultant’s fee of ten percent of the insurance billings arising from those referrals. E & B Mktg., 154 Ill.Dec. 339, 568 N.E.2d at 340. The marketing firm alleged breach of contract when the doctor refused to make some of the payments. The doctor argued the provision was illegal. Id. at 339, 568 N.E.2d at 341. The court ultimately found the contract void as constituting illegal fee splitting in violation of the statute regulating physicians. Id. at 339, 568 N.E.2d at 342. The court rejected the claim that there was no violation because there was no direct solicitation of patients where the funds were received from the insurance company. Id. at 339, 568 N.E.2d at 341. The court held that the precise source of the payment was not at issue when the act prohibited “receipt of any fee or commission, direct or indirect, for professional services not actually rendered” and that receipt of such money indirectly violated the law. Id.; see also Sachs v. Saloshin, 138 A.D.2d 586, 526 N.Y.S.2d 168, 169 (1988) (holding that arrangement violated prohibition against fee splitting where dentist paid 20% of his gross revenues from dentistry practice in partial payment for occupancy and use of dental facility under long-term lease).

Finally, in a recent Florida case, the court ruled that a service agreement between a doctor and a medical management company that provided for an annual fee based on a percentage of revenues and billings was illegal because it provided for fee splitting. Gold, Vann & White, P.A. v. Friedenstab, 831 So.2d 692, 694 (Fla.Dist.Ct.App.2002). Although the court found no evidence that the public relations and marketing duties resulted in increased business for the company, “the agreement, itself, impermissibly provided for payment of a percentage of the revenue the management services and practice enhancement would generate and, thus, constituted an indirect method of fees for patient referral in violation [of state statutes].” Id.

While, as in Wyoming State Bd., 767 P.2d at 973, we do not believe that every form of rent calculation involving a percentage of receipts is, as a matter of law, a violation of the anti-fee-splitting law, the agreement in this case crosses the line. The payments here are directly based on the amount of receipts from patients. See Friedenstab, 831 So.2d at 694. Even though there was no direct evidence of referrals, the marketing efforts by Delta constitute an effort to increase the number of patients seen at the clinic. Id. The statute broadly prohibits dentists from dividing fees with those who send patients to a dentist for treatment. Minn.Stat. § 150A.11, subd. 4. This includes payment of fees that are direct or indirect. Minn. R. 3100.6900.

Delta seeks to avoid this conclusion by arguing that neither Alpha nor Apollo, the corporation that has the provider agreement, is a dentist to whom the statute applies. See Minn.Stat. § 150A.11, subd. 4 (prohibiting dentist from dividing fees). This argument has no merit because the prohibition also applies to “indirect” payment or receipt of fees. Minn. R. 3100.6900. Erickson signed the leases as chief manager of Alpha, and there is no dispute that a dentist is the ultimate source of the fees that are divided. Consequently, the five-percent clause is unenforceable.

III.

The final issue to be considered is whether, because the five-percent clause is deemed illegal, the entire contract or just the offending clause should be voided. Although the district court found that the five-percent clause was not illegal, it ruled that if the clause “were found to be illegal and not enforceable, because it is an integral part of the contract, removing that key term would affect the entire contract.”

“[T]he intent of the parties must be ascertained in determining whether contract provisions are severable.” Guercio v. Prod. Automation Corp., 664 N.W.2d 379, 385 (Minn.App.2003). When the intent of the parties can be determined from the writing of the contract, “the construction of the instrument is a question of law for the court to resolve,” and this court need not defer to the district court’s findings. Empire State Bank v. Devereaux, 402 N.W.2d 584, 587 (Minn.App.1987). If, however, the language of the contract is ambiguous, extrinsic evidence may be considered. Id. If disputed extrinsic evidence is considered, the district court determination will not be reversed unless clearly erroneous. Id.

In assessing the parties’ intent, we first examine the language of the lease. In paragraph 20.11 of the 1997 agreement, the parties agreed to a severability clause:

If any covenant, condition, provision, term or agreement of this Lease Agreement shall, to any extent, be held invalid or unenforceable, the remaining covenants, conditions, provisions, terms and agreements of this Lease Agreement shall not be affected thereby but each covenant, condition, provision, term or agreement of this Lease Agreement shall be valid and in force to the fullest extent permitted by law. This Lease Agreement shall be construed and be enforceable in accordance with the laws of the State of Minnesota.

In light of this clear and explicit agreement by the parties in the lease as to the severability of unenforceable clauses, we reverse the district court and hold that the five-percent clause is severable.

Finally, the issue of Alpha’s motion for attorney fees must be addressed. Alpha made a motion for attorney fees, including $37,175.50 for its appeal to this court and $56,978 for its appeal to the supreme court. The supreme court remanded the issue of attorney fees to the district court pursuant to Minn. R. Civ.App. P. 139.06, subd. 2, for adjudication after a final decision on the merits. Likewise, we remand the issue of attorney fees for Alpha’s appeal to this court to the district court for adjudication.

DECISION

We hold that the five-percent clause does not violate the federal and state anti-kickback laws. But we nonetheless conclude that the clause is unenforceable because it violates the state law prohibiting dentists from dividing fees with a third party who sends patients to a dentist, and we hold that the clause is severable from the remainder of the lease.’ We remand for determination of attorney fees.

Affirmed in part, reversed in part, and remanded.

      . We decline to consider an argument made by Delta that was not decided by the district court.


source: Caselaw Access Project

author: SANDSTROM, Justice.

license: Public Domain

text:
    2003 ND 173
    STATE of North Dakota, Plaintiff and Appellee v. Hajrija BECIRAJ, Defendant and Appellant.
    No. 20030035.
    Supreme Court of North Dakota.
    Nov. 13, 2003.
    Rehearing Denied Dec. 19, 2003.

      Lisa K. Fair McEvers, Assistant State’s Attorney, Fargo, for plaintiff and appellee.
    Steven D. Mottinger (on brief) and Douglas W. Nesheim (argued), Fargo, for defendant and appellant.
   SANDSTROM, Justice.

[¶ 1] Hajrija Beciraj is appealing from an East Central Judicial District Court criminal judgment and commitment upon a jury verdict finding her guilty of conspiracy to commit arson in violation of N.D.C.C. §§ 12.1-06-04 and 12.1-21-01. Beciraj argues there was insufficient evidence to support the jury verdict finding her guilty, because no evidence was presented to indicate she knew the mobile home was insured. She also argues it was legally impossible for her to have committed arson, because the insurance had been cancelled. She further argues that hearsay statements and evidence of a prior home fire were improperly admitted. We conclude that sufficient evidence was presented to indicate Beciraj knew the mobile home was insured, that a person does not actually need insurance to be found guilty of damaging one’s property for the purpose of collecting insurance, and that evidence of a prior home fire was properly admitted. Because sufficient evidence was presented to support the jury verdict finding her guilty of conspiracy to commit arson, we affirm.

I

[¶2] On Monday, January 29, 2001, at approximately 9:00 p.m., a fire occurred at the mobile home of Hajrija and Sadik Be-ciraj. Approximately fourteen firefighters came to the scene and found the home unlocked. Investigators found the fire originated near the north wall of the master bedroom at the far west end of the mobile home.

[¶ 3] Hajrija Beciraj was charged with conspiracy to commit arson. A preliminary hearing was held in July 2002, and the district court found probable cause to bind her over for trial. Hajrija Beciraj and her husband, Sadik Beciraj, were tried together in January 2003. Both were found guilty of the charges. This is Hajri-ja Beciraj’s appeal.

[¶ 4] At trial, fire investigator Burton Rutter testified he believed the fire was deliberately set, although no ignitable liquids could be identified, and the investigators were unable to determine the cause of the fire. He testified his belief that the fire was deliberately set was formed after the investigation had eliminated any potential accident or any natural, electrical, or other utility-type source of ignition. He also testified he believed there was a financial motive for setting the fire.

[¶ 5] Rutter testified that during the investigation, Sadik Beciraj asked “where will the money be” and “which bank will the money be in.” After further inquiry, Rutter found that Sadik Beciraj was referring to money donated from the Red Cross and the community. He testified that Sa-dik Beciraj told him he had insurance and knew his policy limits without looking. In November 2000, Sadik Beciraj had taken out an insurance policy on the home with policy limits of $26,000 on the dwelling and $13,000 on the contents. The insurance agent testified that Sadik Beciraj also called to file an insurance claim the day after the fire, but the insurance policy had been cancelled. A neighbor testified that Sadik and Hajrija Beciraj had attempted to sell the home, but the “for sale” sign was removed a few days before the fire. A neighbor also testified Hajrija Beciraj told her that her home was for sale for “cash only” and that her husband needed money for business.

[¶ 6] Rutter and another fire investigator, Jerry Crane, testified the beds in the mobile home had very little bedding and the closets held many empty hangers. Budd Warren, the investigator for the insurance company, testified there was not enough silverware for a family of seven and picture frames were missing their pictures. Neighbors testified they witnessed Hajrija Beciraj carrying bags away from the home on the day of the fire. These bags appeared to be filled with clothes and other household items.

[¶ 7] The district court had jurisdiction under N.D. Const, art. VI, § 8, and N.D.C.C. § 27-05-06. The appeal was timely under N.D.R.App.P. 4(b). This Court has jurisdiction under N.D. Const, art. VI, §§ 2 and 6, and N.D.C.C. § 29-01-12 and 29-28-06.

II

[¶ 8] Beciraj argues there was insufficient evidence to support the jury verdict finding her guilty of conspiracy to commit arson.

[¶ 9] “In a criminal case, due process requires that the prosecution prove each element of the offense beyond a reasonable doubt.” State v. Johnson, 2001 ND 184, ¶ 13, 636 N.W.2d 391.

“In cases challenging the sufficiency of evidence to sustain a conviction we will not weigh conflicting evidence, nor judge the credibility of witnesses; instead, we look only to the evidence most favorable to the verdict and the reasonable inferences therefrom to determine if there is substantial evidence to warrant a conviction.”

State v. Klose, 2003 ND 39, ¶ 19, 657 N.W.2d 276 (quoting State v. Hatch, 346 N.W.2d 268, 277 (N.D.1984) (citations omitted)).

A person commits conspiracy if he agrees with one or more persons to engage in or cause conduct which, in fact, constitutes an offense or offenses, and any one or more of such persons does an overt act to effect an objective of the conspiracy. The agreement need not be explicit but may be implicit in the fact of collaboration or existence of other circumstances.

N.D.C.C. § 12.1-06-04(1).

A person is guilty of arson, a class B felony, if he starts or maintains a fire or causes an explosion with intent to destroy an entire or any part of a building or inhabited structure of another or a vital public facility, or if he starts or maintains a fire or causes an explosion with intent to destroy or damage his own real or personal property for the purpose of collecting insurance for the loss.

N.D.C.C. § 12.1-21-01.

A

[¶ 10] Beciraj argues there was insufficient evidence to support the jury verdict, because under North Dakota law she cannot commit arson against her own property unless she deliberately starts a fire with the intent to collect insurance for the loss. She claims the trial court was presented with no evidence to indicate she had any knowledge that the mobile home or its contents were insured. She also argues there was no evidence presented to show she agreed to commit arson with her husband.

[¶ 11] Substantial evidence exists in this case to prove the elements of conspiracy to commit arson and to warrant a conviction. The evidence showed an agreement between Beciraj and her husband, Sadik Beciraj, and an overt act was committed. Beciraj and her husband took out insurance a few months before the fire. On the day of the fire, neighbors saw Beciraj carrying bags of clothing and other household items away from the mobile home. The mobile home was left unlocked, and none of the family was present at the time of the fire. Sadik Beciraj inquired about getting money from the community and knew the exact insurance limits on his policy. The evidence also suggests Beciraj knew her husband needed money.

[¶ 12] Viewing the evidence most favorable to the verdict, we conclude Beciraj’s activities show she knew the home and its contents were insured and agreed with her husband to commit arson.

B

[¶ 13] Beciraj argues that because her home was not insured, there was insufficient evidence to support the jury verdict finding her guilty. She claims it was impossible for her to have committed arson, because the insurance had been cancelled.

[¶ 14] Construction of statutes is a question of law and therefore fully reviewable. “When a statute’s language is ambiguous or of doubtful meaning, we may consider extrinsic aids, including legislative history, along with the language of the statute, to ascertain the legislature’s intent.” State v. Rambousek, 479 N.W.2d 832, 834 (N.D.1992); N.D.C.C. § 1-02-39(3). Criminal statutes are strictly construed in favor of the defendant and against the government. State v. Rue, 2001 ND 92, ¶ 33, 626 N.W.2d 681.

[¶ 15] Section 12.1-06-04(1), N.D.C.C., requires for conspiracy that a person must agree to engage in conduct that, in fact, constitutes an offense. Title 12.1, N.D.C.C., is modeled after the proposed Federal Criminal Code. State v. Knowels, 2002 ND 62, ¶ 9, 643 N.W.2d 20. Section 12.1-06-04, N.D.C.C., is similar to section 1004 of the Final Report of the National Commission on Reform of Federal Criminal Laws. Because our statute is derived from the proposed Federal Criminal Code, “ ‘the commentary to the ... Code is helpful as an aid in interpreting the intent of our criminal code when the North Dakota statute does not vary in substance from its proposed federal counterpart.’ ” Id. (quoting State v. Haugen, 392 N.W.2d 799, 804 (N.D.1986)). The Final Report provides that conspiracy “is limited to agreements to engage in a crime or crimes which are defined elsewhere.” Final Report of the National Commission on Reform of Federal Criminal Laws § 1004 cmt. 1 at 71 (1971).

[¶ 16] Section 12.1-21-01, N.D.C.C., requires that a person start a fire to destroy or damage his own real property for the purpose of collecting insurance. The statute requires only that the actor start a fire with intent to destroy or damage his property for the purpose of collecting insurance for the loss. There is no statutory requirement that there actually be insurance. The evidence presented makes clear that Beciraj agreed to start a fire to destroy or damage her home. The evidence presented also makes clear that the purpose of this agreement was to collect insurance money.

[¶ 17] We conclude there may be a conspiracy to commit arson even when, unknown to the conspirators, their insurance has lapsed.

[¶ 18] Viewing the evidence most favorable to the verdict, we conclude there was sufficient evidence to show that Beciraj agreed to deliberately start a fire with the intent to collect insurance for the loss.

Ill

[¶ 19] Beciraj also argues statements regarding Sadik Beciraj’s belief his home was insured were made after the alleged conspiracy had ended and therefore should not have been admitted, because the statements were not made in furtherance of the conspiracy.

[¶ 20] Statements made by a co-conspirator in furtherance of a conspiracy may be admitted against any conspirators as an admission by a party opponent. N.D.R.Ev. 801(d)(2)(v). Before the hearsay statements may be used, the trial court must determine “ ‘(1) that a conspiracy existed; (2) that the defendant and the declarant were members of the conspiracy; and (3) that the declaration was made during the course and in furtherance of the conspiracy.’ ” State v. Lind, 322 N.W.2d 826, 838 (N.D.1982) (quoting United States v. Bell, 573 F.2d 1040, 1043 (8th Cir.1978)).

[¶ 21] Beciraj also argues that although the jury instruction regarding a co-conspirator’s declaration accurately stated the law, it was clearly prejudicial because the statements admitted were not made in furtherance of the conspiracy and were admitted without the court having made the findings required in Lind.

[¶ 22] Beciraj claims this evidence was admitted over the objection of counsel; however, the record shows Beci-raj failed to object to the admission of these statements or to the jury instruction during trial. When the appropriate objection is not raised at the district court, the right is waived and cannot be raised for the first time on appeal. State v. Jahner, 2003 ND 36, ¶ 9, 657 N.W.2d 266. Under N.D.R.Crim.P. 52(b), however, “obvious errors or defects affecting substantial rights may be noticed although they were not brought to the attention of the court.” State v. Thorson, 2003 ND 76, ¶ 9, 660 N.W.2d 581. The defendant has the burden of establishing obvious error. Id. Be-ciraj did not allege obvious error in this case.

[¶ 23] We conclude Beciraj waived her right to object to this evidence and the jury instruction when she failed to raise these objections during the trial.

IV

[¶ 24] Finally, Beciraj argues that under N.D.R.Ev. 403 and 404(b), the evidence of a prior home fire was improperly admitted.

[¶ 25] Beciraj contests the district court’s admission of evidence she and her husband had previously suffered a fire and had received recovery assistance, including money, from the community. Beciraj claims this evidence could prejudice the jury. She also claims evidence of other acts to demonstrate the character of a person in order to prove an act conforms with that character is not admissible.

[¶ 26] Rule 403, N.D.R.Ev., provides, “[a]lthough relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.”

[¶ 27] “Rule 403 Vests wide discretion in the trial court to control the introduction of evidence at trial and our review is limited to determining whether that discretion was abused.’ ” State v. Zimmerman, 524 N.W.2d 111, 115 (N.D.1994) (quoting First Nat’l Bank and Trust Co. v. Brakken, 468 N.W.2d 633, 636 (N.D.1991)). ‘While N.D.R.Ev. 403 gives a district court the power to exclude relevant evidence if its probative value is substantially outweighed by the danger of unfair prejudice, that power should be sparingly exercised.” State v. Klose, 2003 ND 39, ¶ 28, 657 N.W.2d 276 (citing State v. Ash, 526 N.W.2d 473, 481 (N.D.1995) (citation omitted)). Evidence of the previous fire was probative of Beciraj’s motive for starting a fire and of her knowledge about receiving a financial benefit from starting a fire. This evidence was also relevant to show a plan.

[¶ 28] Rule 404(b), N.D.R.Ev., provides:

Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. However, it may be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident, provided that the prosecution in a criminal case shall provide reasonable notice in advance of trial, or during trial if the court excuses pretrial notice on good cause shown, of the general nature of any such evidence it intends to introduce at trial.

[¶ 29] The record does not reflect that the evidence of the other fire was offered or received “to prove the character of a person in order to show action in conformity therewith.” The evidence in this case was admissible under Rule 404(b) because the evidence was used to show that Beciraj had a plan for committing arson for the purpose of collecting insurance.

[¶ 30] We conclude the district court did not abuse its discretion in admitting the evidence of a prior home fire.

V

[¶ 31] Because substantial evidence exists to support a conviction for conspiracy to commit arson and because the district court did not abuse its discretion in admitting evidence about prior home fires, we affirm.

[¶ 32] GERALD W. VANDE WALLE, C.J., WILLIAM A. NEUMANN, MARY MUEHLEN MARING and CAROL RONNING KAPSNER, JJ., concur.


author: KAPSNER, Justice.

text:
    2003 ND 169
    Steven D. AKERLIND, individually and on behalf of Busy Bubbles Laundry, a General Partnership, Plaintiff and Appellant v. Steven L. BUCK and Michelle Marie Buck, Defendants and Appellees.
    No. 20030139.
    Supreme Court of North Dakota.
    Nov. 13, 2003.

      Joseph A. Turman, DeMars & Turman, Fargo, for plaintiff and appellant.
    Jonathan P. Sanstead, Pearce & Durick, Bismarck, for defendants and appellees.
   KAPSNER, Justice.

[¶ 1] Steven D. Akerlind appealed from an amended judgment in his action against Steven L. Buck and Michelle Marie Buck for dissolution and an accounting of their Busy Bubbles Laundry business partnership in Fargo. We conclude the district court’s findings on the accounting and distribution of partnership assets and debts is not clearly erroneous, and we affirm.

I

[¶ 2] In January 1996, Akerlind acquired a laundromat business in Fargo and operated it as a sole proprietorship. Aker-lind was an experienced businessman, having owned and operated laundromats and other businesses since 1971. Akerlind eventually decided to get out of the laundry business and met Steven Buck, a nephew of an acquaintance, and told him he wanted a partner to run the laundry. Steven Buck and his wife, Michelle Buck, had no business experience, but on May 18, 1998, the Bucks and Akerlind began a general partnership operating Busy Bubbles Laundry.

[¶ 3] The partnership started with no capital, and Busy Bubbles entered into an agreement with Akerlind to lease the laundromat building and equipment for $4,500 per month. Busy Bubbles agreed to assume an obligation for $91,000 outstanding on a loan Akerlind had obtained for the purchase of equipment for the laundromat. During the course of the partnership, Busy Bubbles also purchased, with partnership funds, a building in West Fargo for storage purposes.

[¶ 4] Akerlind and Michelle Buck were the only partners actively involved in the business. Akerlind handled all of the finances for the business and maintained the equipment. Michelle Buck worked full time at the business and her duties included running the commercial laundry, soliciting customers, filling change and vending machines, cleaning, making deliveries, preparing the payroll, and supervising employees. The parties’ written partnership agreement, eventually entered into on June 2, 1999, provided the “Partnership shall maintain a bank account or bank accounts in the Partnership’s name in a national or state bank,” and “[cjhecks and drafts shall be drawn on the Partnership’s bank account for Partnership purposes only.” It is undisputed that Akerlind commingled partnership revenue with his personal funds in the partnership bank account.

[¶ 5] The partnership came to an end on April 24, 2001, when Akerlind changed the locks on all of the vending machines, change machines, and washers and dryers at the business. Akerlind claimed he did so because he began noticing cash shortages at the business. Akerlind sued the Bucks for dissolution of the partnership and an accounting, claiming Michelle Buck had converted partnership funds to her own use in violation of her duties as a partner and in violation of the partnership agreement. The district court ruled Michelle Buck had not converted partnership funds to her own use, but that Akerlind had breached his fiduciary duty to his partners by commingling partnership funds with his own funds and paying his personal debts out of funds from the partnership checking account.

[¶ 6] The court ruled Akerlind was entitled to retain the laundromat equipment, but ordered the sale of the West Fargo property and items contained therein, and three partnership vehicles. The court ordered the proceeds of the sale be used to satisfy the mortgage on the West Fargo property and to pay Michelle Buck $7,200 for her work at Busy Bubbles during the last nine months of the partnership, with any remainder to be divided equally between the Bucks and Akerlind. Akerlind appealed.

II

[¶ 7] Akerlind argues several of the district court’s findings of fact are clearly erroneous. A finding of fact is clearly erroneous under N.D.R.Civ.P. 52(a) if there is no evidence to support it, if it is clear to the reviewing court that a mistake has been made, or if the finding is induced by an .erroneous view of the law. In re K.M.G., 2000 ND 50, ¶4, 607 N.W.2d 248. A trial court’s findings of fact on appeal are presumed to be correct, and the complaining party bears the burden of demonstrating a finding is clearly erroneous. Piatz v. Austin Mut Ins. Co., 2002 ND 115, ¶ 24, 646 N.W.2d 681. In Moen v. Thomas, 2001 ND 95, ¶ 20, 627 N.W.2d 146 (internal citations omitted), we said:

In a bench trial, the trial court is “the determiner of credibility issues and we do not second-guess the trial court on its credibility determinations.” We do not reweigh evidence or reassess credibility, nor do we reexamine findings of fact made upon conflicting testimony. We give due regard to the trial court’.s opportunity to assess the credibility of the witnesses, and the court’s choice between two permissible views of the evidence is not clearly erroneous.

[¶ 8] Much of the trial was consumed by an examination of the partnership “records” kept by Akerlind. Akerlind handled all of the finances for the partnership, did not keep a separate checking account for partnership business, and commingled partnership funds with his personal funds. When asked why he did not maintain a separate checking account for the partnership, Akerlind testified, “I just never got around to it.” Akerlind explained he would once a year separate his personal financial entries from the partnership’s financial entries in the checking account. His accountant’s trial exhibit was based on Akerlind’s recollection and direction for allocating income and expenses. During trial, Akerlind acknowledged several entries in the exhibit were incorrectly labeled.

[¶ 9] In its decision, the district court noted Akerlind was an experienced businessman and the Bucks were inexperienced business persons. The court noted the business was growing annually. Aker-lind had promised the Bucks they could purchase the laundromat business after three years. Akerlind locked the Bucks out just a short period before the three years expired. The district court specifically found that the “financial records of this business which Akerlind controlled ... are a mess”; that during the course of the partnership, “Akerlind made a number of questionable financial transactions”; and that “Akerlind was not credible on a number of the financial matters he testified about.” We review Akerlind’s challenged findings with these unchallenged findings of the district court in mind.

A

[¶ 10] Akerlind contends the district court’s finding that Michelle Buck did not'cause a cash shortage at the business is clearly erroneous. The court found, contrary to Akerlind’s assertions, that there had been “significant increases in revenue” while Michelle Buck operated the business. The Busy Bubbles Laundry records produced by Akerlind show the monthly deposits for the business increased every month over prior year deposits while Michelle Buck worked there.

[¶ 11] Akerlind argues an increase in monthly revenue does not negate the possibility of cash shortages, and complains the district court should have accepted his testimony that he believed Michelle Buck was stealing partnership funds. Akerlind may be correct that increasing revenues do not necessarily mean there was no cash shortage. The district court specifically found Akerlind’s testimony was not credible on financial matters, and concluded Akerlind did not prove Michelle Buck was converting partnership funds. Under these circumstances, an increase in overall business revenue permits an inference that there were no cash shortages caused by Michelle Buck. We conclude the trial court’s finding is not clearly erroneous.

B

[¶ 12] Akerlind contends the $4,500 per month rent the partnership was supposed to pay him for the building and equipment was never paid and the district court’s finding to the contrary is clearly erroneous. The district court found:

During the course of the partnership, Akerlind made a number of questionable financial transactions. As previously stated he paid approximately $1,000,000 of personal bills out of the Busy Bubbles checking account. He provided the information to the accountant for the preparation of the 1998 and 1999 tax returns for the partnership. These partnership returns show that the $4,500 per month rent to Akerlind was actually paid by the partnership. Akerlind now claims that no such payments were ever made. No 2001 tax return has been filed for this partnership. Akerlind never provided the Bucks with any of the actual financial data for Busy Bubbles or the tax returns. Instead, he provided them with only a Schedule K-l, which they needed for the preparation of their personal tax returns and would periodically provide them with a summary as to how the business was doing. He never told the Bucks that the business was not paying rent or any of its other obligations. From all appearances the business was meeting its expenses.

[¶ 18] Michelle Buck testified that when she would question Akerlind about how the business was doing financially, he would respond that “[e]verything was fine.” The district court obviously did not believe Akerlind’s testimony that he did not receive rent payments, and that a $4,500 monthly payment shown on his records as coming from his personal funds was for a loan on equipment for an unrelated business. Considering the tax returns which indicate the contrary and Michelle Buck’s testimony, we conclude the district court’s finding is not clearly erroneous.

C

[¶ 14] Akerlind argues the Bucks failed to present evidence to dispute the testimony and exhibits presented by his accountant, and the district court’s findings that contradict his evidence are therefore unsupported by the evidence and are clearly erroneous.

[¶ 15] The credibility of witnesses, including expert witnesses, and the weight to be given their testimony, are questions for the trier of fact. E.g., Selzler v. Selzler, 2001 ND 138, ¶ 15, 631 N.W.2d 564. The accountant’s testimony in this case related to documents he prepared setting forth the various checks written on and deposits made to the commingled partnership account. The accountant testified that Akerlind allocated each check and deposit to either the partnership or “other” categories and the accountant merely transferred that information onto the exhibit. The Bucks challenged this evidence and pointed out discrepancies in the exhibit admitted to by the accountant, including $91,000 in partnership loan proceeds incorrectly allocated to the “other” category rather than to a partnership deposit. The district court observed:

During the course of the trial, Akerlind and his accountant offered a schedule that initially showed approximately $1.4 [m]illion dollars of checks being written out of the Busy Bubbles checking account for Busy Bubbles expenses. Upon questioning some of the transactions, this schedule was amended to reflect payments of only approximately $1,000,000 for Busy Bubbles expenses. Also, Akerlind claims that he borrowed money on behalf of the business, but shows the deposits for these borrowings as his personal money and not as an asset of Busy Bubbles.
During this period of time, the Bucks accounted for all of the partnership property and deposited the funds in the partnership checking account. Aker-lind, who controlled these funds, co-mingled the funds with his own personal funds and paid nearly $1,000,000 of personal obligations out of the Busy Bubbles checking account by his own accounting.
Akerlind deposited personal money and paid personal bills out of the Busy Bubbles account. The amount of personal bills paid exceeded personal funds deposited by nearly $250,000.

[¶ 16] We conclude the district court’s findings are supported by the evidence and are not clearly erroneous.

D

[¶ 17] Akerlind claims the district court erred in finding he failed to provide the Bucks with financial information, including the partnership tax returns.

[¶ 18] Under N.D.C.C. § 45-16-03(3), each partner must furnish to a partner:

a. Without demand, any information concerning the partnership’s business and affairs reasonably required for the proper exercise of the partner’s rights and duties under the partnership agreement or chapters 45-13 through 45-21; and
b. On demand, any other information concerning the partnership’s business and affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.

[¶ 19] The evidence established that Aker-lind was responsible for handling the partnership’s financial affairs. Akerlind admitted that he kept books for the partnership only diming 1998 and 1999. Michelle Buck testified they received monthly statements from Akerlind until June 1999 showing $4,500 rent as part of the partnership expenses. Michelle Buck testified they requested a copy of the partnership’s 1998 tax return, but Akerlind told them that the schedule K-l document they received for their personal income taxes was sufficient. Akerlind’s claim that the Bucks always had access to the books because they knew where they were kept is unconvincing when Akerlind was in charge of partnership finances and failed to keep any discernable records during the final two years of the partnership’s existence. We conclude the district court’s finding is not clearly erroneous.

E

[¶ 20] Akerlind also challenges the district court’s award of $7,200 compensation to Michelle Buck for her final nine months of work at Busy Bubbles. The district court found:

Michelle Buck never received a salary for her work at Busy Bubbles. Periodically, she and Mr. Akerlind would empty the coins out of the machines at the business and Akerlind would provide her with some cash for her work at the business. These amounts were minimal, and Michelle Buck received no payment at all for the last nine months she worked at Busy Bubbles.

The court awarded her $7,200 “as the fair value of the pay she should have received during the last nine months of the operation of the partnership.”

[¶ 21] Generally, a “partner is not entitled to remuneration for services performed for the partnership.” N.D.C.C. § 45-16-01(8). Subject to exceptions not relevant here, however, “relations among the partners and between the partners and the partnership are governed by the partnership agreement.” N.D.C.C. § 45-13-03(1). A “partnership agreement thus controls whether or not the partners are entitled to compensation for services provided to the partnership.” First Nat’l Bank of Belfield v. Candee, 488 N.W.2d 391, 397 (N.D.1992). See also Matter of Estate of Thomas, 532 N.W.2d 676, 682 (N.D.1995). The partnership agreement in this case provided the “Managing Partners may pay compensation to any Partner, as they deem reasonable.”

[¶ 22] Akerlind and Michelle Buck constituted a majority of the managing partners. Akerlind acknowledged there was an informal agreement that Michelle Buck be paid for her work at Busy Bubbles. Akerlind testified:

Q Now, had Michelle Buck been paid during that period of time?
A I wouldn’t know. She was supposed to take whatever money she felt she was owed or worked during that time.
Q Did you ever tell her she couldn’t take any?
A No.
Q Was there an accounting between the two of you as to — or between the two partners as to any money taken or removed?
A No.
Q Not at any time?
A No.
Q So how would' — how would one party know what the other party was doing?
A I didn’t.
Q You never discussed it with them?
A She would tell me that she thought she should get more per week or — -I really — I said several times that if you take out a lot of cash, you know, it ends — ends up costing you in the end.
Q What did you mean by that?
A The amount of cash flow.

[¶ 23] Michelle Buck also testified there was an agreement that she be compensated:

THE COURT: So what — -what were you being paid, ma’am? Were you paid by the hour or the month?
THE WITNESS: It started off, we were paid by the hour in the very beginning. We were in the process of trying to find partners to be partners with all or both parties. That was unsuccessful. Then eventually it just went to — we were paid 200 every so often — every week or every other week. Depended on the cash flow. What I was paid, Steve Akerlind was paid. It went— switched off and on. He took half of what I took. Eventually, there was nothing for me to take, so I was getting paid nothing.

[¶ 24] Although this method of conducting a business partnership may be unsound, it was the method chosen by these partners. We believe the district court could find from this evidence there was an informal agreement that Michelle Buck be paid $200 “every week or every other week.” Because Busy Bubbles revenues continued to significantly increase, the court could further find that Michelle Buck was entitled to $200 per week during the last nine months of the partnership. There are at least four weeks in every month, resulting in a total of $800 per month compensation. We conclude the district court’s award of $7,200 for Michelle Buck’s final nine months of work is within the realm of the evidence presented and is not clearly erroneous.

F

[¶ 25] Akerlind argues the district court erred in finding he breached a fiduciary duty by commingling partnership funds with his own funds and by paying his personal debts out of the partnership checking account.

[¶ 26] A partner has a fiduciary duty of loyalty to the partnership and other partners to “account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by the partner of partnership property.” N.D.C.C. § 45-16-04(2)(a). This Court has held that a partner breaches a fiduciary duty if the partner fails to keep fiduciary property separate and distinct and uses partnership property for the partner’s personal benefit. See Engstrom v. Larson, 77 N.D. 541, 563, 44 N.W.2d 97, 109 (1950). See also Welder v. Green, 985 S.W.2d 170, 175 (Tex.App.1998). Whether a person has breached a fiduciary duty is a finding of fact. Matter of Estate of Rohrich, 496 N.W.2d 566, 569 (N.D.1993).

[¶ 27] Akerlind acknowledged commingling partnership funds with his funds and the district court did not accept Aker-lind’s testimony or attempts to show through his records that he did not use partnership funds for his own personal benefit. We conclude the district court’s finding that Akerlind breached a fiduciary duty is not clearly erroneous.

G

[¶ 28] Akerlind contends the district court disregarded evidence that he loaned money to the partnership and claims he is entitled to be reimbursed for the loans.

[¶ 29] Akerlind testified he made loans to the partnership. However, he was unable to testify when the loans were made or point to deposit allocations to the partnership in his records representing those loans. We conclude the district court did not err in refusing to reimburse Akerlind for his alleged loans to the partnership.

Ill

[¶ 30] The amended judgment is affirmed.

[¶ 31] GERALD W. VANDE WALLE, C.J., CAROL RONNING KAPSNER, MARY MUEHLEN MARING, WILLIAM A. NEUMANN and DALE V. SANDSTROM, JJ., concur.