author: WILLIS, Judge.

text:
    Blake Stephen MALLOY, Relator, v. COMMISSIONER OF HUMAN SERVICES, Respondent.
    No. C2-02-1336.
    Court of Appeals of Minnesota.
    March 18, 2003.
    Samuel D. Orbovich, Orbovich & Gart-ner, Chtd., Saint Paul, MN, for relator.

      Mike Hatch, Attorney General, Kerri Stahlecker Hermann, Assistant Attorney General, St. Paul, MN, for respondent.
    Considered and decided by TOUSSAINT, Chief Judge, KALITOWSKI, Judge, and WILLIS, Judge.
   OPINION

WILLIS, Judge.

Relator appeals from the decision of the Commissioner of Human Services to deny reconsideration of relator’s disqualification from providing direct-contact services for licensed facilities and unlicensed personal-care-provider organizations. Relator argues that the commissioner’s decision was based on a reversal of the commissioner’s set-aside of relator’s disqualification, an action that relator contends exceeds the commissioner’s statutory authority. Because we conclude that the commissioner exceeded his statutory authority, we reverse.

FACTS

Relator Blake Stephen Malloy pleaded guilty in October 1998 to misdemeanor theft. In 2000, Malloy applied for a job with a daycare center licensed by respondent Commissioner of Human Services (“the commissioner”). When a criminal-background check revealed Malloy’s misdemeanor conviction, the commissioner disqualified Malloy from providing direct-contact services for facilities licensed by either the Department of Human Services (“DHS”) or the Department of Health, or for unlicensed personal-care-provider organizations. Malloy requested a reconsideration of his disqualification, and the commissioner set aside the disqualification in August 2000, noting that Malloy’s “background study status * * * is now the same as any person who was not disqualified.”

In November 2001, the commissioner found Malloy “culpable for maltreatment” and reversed the earlier set-aside of Mal-loy’s disqualification. The finding of culpability followed an incident in which Malloy allowed a child to leave the daycare center with someone not authorized by the child’s parents to pick the child up. Police located the child, unharmed, 11 hours later. The commissioner’s report on the investigation of the incident concluded that Mal-loy’s conduct constituted maltreatment, but because the child was located unharmed, “the maltreatment for which [Malloy] was culpable [did] not meet the statutory definition of serious or recurring maltreatment.” The commissioner nonetheless reversed the earlier set-aside and disqualified Malloy, concluding that the basis for the 2000 set-aside had changed “in light of the finding of maltreatment” in 2001. Malloy requested reconsideration in December 2001, and the commissioner refused to reverse the disqualification.

In early 2002, Malloy applied for a job with a second DHS-licensed daycare center, and the daycare center submitted a background-study form to the commissioner. In April 2002, the commissioner notified Malloy of his prior disqualification based on his theft conviction and ordered the second daycare center to remove Mal-loy from “any position allowing direct contact” with children at the center. The commissioner also notified Malloy of his right to request reconsideration of the disqualification, and Malloy requested reconsideration. In June 2002, the commissioner refused to set aside the disqualification. This certiorari appeal follows.

ISSUE

Did the commissioner exceed his statutory authority by disqualifying Malloy based on his prior disqualification, which had been set aside?

ANALYSIS

Malloy argues that the commissioner exceeded his statutory authority by denying reconsideration of Malloy’s June 2002 disqualification because the denial was based on the commissioner’s improper November 2001 reversal of a set-aside. Malloy contends that the commissioner was without statutory authority to reverse a prior set-aside, and he points to the statute defining the decision to set aside a disqualification as a “final administrative decision.” He further argues that the November 2001 finding of maltreatment was not a proper basis for disqualification because the maltreatment was found to be neither serious nor recurring.

When reviewing an agency decision, this court determines whether the commissioner violated the constitution, exceeded his authority, engaged in unlawful procedure, erred as a matter of law, issued a decision unsupported by substantial evidence, or acted arbitrarily or capriciously. Minn.Stat. § 14.69 (2002); In re Investigation into Intra-LATA Equal Access & Presubscription, 532 N.W.2d 583, 588 (Minn.App.1995), review denied (Minn. Aug. 30,1995). An agency’s determination is void and subject to collateral attack if made without, or in excess of, statutory power. McKee v. County of Ramsey, 310 Minn. 192, 195, 245 N.W.2d 460, 462 (1976). “Neither agencies nor courts may under the guise of statutory interpretation enlarge the agency’s powers beyond that which was contemplated by the legislative body.” Waller v. Powers Dep’t Store, 343 N.W.2d 655, 657 (Minn.1984) (citation omitted).

The grounds for disqualification from “any position allowing direct contact with persons receiving services from [a DHS] license holder” are set out at Minn.Stat. § 245A.04, subd. 3d (2002). A disqualified individual may request reconsideration of the disqualification, id., subd. 3b(a) (2002), and the commissioner “may set aside the disqualification * * * if the commissioner finds that the individual does not pose a risk of harm,” id., subd. 3b(b) (2002). The commissioner’s decision to grant or deny a reconsideration request is a final administrative decision subject to certiorari review, unless it results from a contested hearing. See id., subd. 3b(e) (2000).

The statutory scheme does not contemplate the commissioner’s reversal of a set-aside of a disqualification. Further, the statute provides that the commissioner’s August 2000 decision to set aside Malloy’s disqualification was a final decision. The commissioner noted as much when informing Malloy of the set-aside, writing that Malloy was thereafter in the same position as someone who had not been disqualified.

Had the November 2001 investigation found Malloy culpable for serious or recurring maltreatment, the commissioner would have been required to disqualify Malloy for that maltreatment. A person “shall be disqualified” if, among other reasons, he is found culpable for maltreatment and the maltreatment is “serious or recurring.” Id., subd.3d(a)(4) (2002). But the record is clear that there was no such finding. The requirement of “serious or recurring maltreatment” in Minn.Stat. § 245A.04, subd. 3d(a)(4), would be rendered superfluous if a person could be disqualified for a finding of maltreatment that falls short of the definition of “serious or recurring.” See Minn.Stat. 645.17(2) (2002) (providing that it must be presumed that the legislature intended the entire statute to be effective and certain).

Because we conclude that the commissioner exceeded his statutory authority, we need not address Malloy’s arguments that the commissioner’s decision was unsupported by substantial evidence or that it violated his due-process rights.

DECISION

The commissioner exceeded his statutory authority by reversing the set-aside of Malloy’s disqualification.

Reversed.

      . Subdivision 3b(e) was amended in 2001. See 2001 Minn. Laws 1st Spec. Sess. ch. 9, art. 14, § 13. Because the change alters Mal-loy's "matured rights,” we apply the law in effect in August 2000, when the commissioner set aside Malloy’s disqualification. See McClelland v. McClelland, 393 N.W.2d 224, 226 (Minn.App.1986), review denied (Minn. Nov. 17, 1986).


source: Caselaw Access Project

author: WILLIS, Judge. G. BARRY ANDERSON, Judge

license: Public Domain

text:
    STATE of Minnesota, Appellant, v. Leann Marie COLBY, Respondent.
    No. C1-02-1795.
    Court of Appeals of Minnesota.
    March 18, 2003.

      Mike Hatch, Attorney General, St. Paul, MN; and Lisa N. Borgen, Clay County Attorney, Pamela Harris, Assistant County Attorney, Moorhead, MN, for appellant.
    Tami Norgard, Fargo, ND, for respondent.
    Considered and decided by SCHUMACHER, Presiding Judge, WILLIS, Judge, and G. BARRY ANDERSON, Judge.
   OPINION

WILLIS, Judge.

Appellant challenges the district court’s stay of adjudication, arguing that there was not a clear abuse of prosecutorial discretion that warranted the stay. Because a stay of adjudication may only be granted when there is a clear abuse of prosecutorial discretion, and because there is no evidence of such an abuse here, we reverse and remand.

FACTS

Respondent Leann Marie Colby was charged with theft under Minn.Stat. § 609.52 (2000). Colby left a Target store with candy worth $27, for which she had not paid. At a plea hearing on the charge, Colby told the court that she had no criminal record and that she intended to plead guilty but was concerned that a theft conviction would prevent her from attending nursing school. The district court stayed adjudication. The state moved for reconsideration, and the district court denied the motion. This appeal follows.

ISSUE

Did the district court err by staying adjudication in the absence of a clear abuse of prosecutorial discretion in the charging function?

ANALYSIS

A district court

may not refuse to adjudicate the guilt of a defendant who tenders a guilty plea * * * or who has been found guilty by a court or jury following a trial.

Minn.Stat. § 609.095(b) (2000); see also 1998 Minn. Laws ch. 367, art. 6, § 1 (adopting section 609.095(b)). Prosecutors have broad discretion regarding the charging function and “ordinarily, under the separation-of-powers doctrine, a court should not interfere with the * * * exercise of that discretion.” State v. Foss, 556 N.W.2d 540, 540 (Minn.1996). The district court’s decision to stay adjudication is within the court’s “inherent judicial power” when the decision is supported by “special circumstances.” State v. Krotzer, 548 N.W.2d 252, 254-55 (Minn.1996). The power to stay adjudication is to be “relied upon sparingly and only for the purpose of avoiding an injustice resulting from the prosecutor’s clear abuse of discretion ” in the exercise of the charging function. Foss, 556 N.W.2d at 541; see also State v. Ohrt, 619 N.W.2d 790, 792-93 (Minn.App.2000) (reversing stay of adjudication when the district court made no findings regarding an abuse of prosecutorial discretion).

The state argues that no special circumstances here justify the district court’s stay of adjudication. The district court specified no special circumstances on the record, but neither Colby’s desire to go to nursing school nor the fact that she had no criminal record would justify the stay. See State v. Twiss, 570 N.W.2d 487, 487 (Minn.1997) (holding that possibility that defendant might lose her job is not a special circumstance); Ohrt, 619 N.W.2d at 792 (holding that lack of a criminal record is not a special circumstance). Further, Colby alleges no abuse of prosecutorial discretion in the charging function.

Colby cites State v. Lattimer, 624 N.W.2d 284, 290 (Minn.App.2001), review denied (Minn. May 15, 2001), in which this court held that a district court’s stay of adjudication was a sentencing decision subject to review under an abuse-of-discretion standard. But we conclude that the decision in Lattimer is in conflict with the supreme court’s decisions in Krotzer and Foss, where the court expressly limited the district court’s power to stay adjudication to cases where there is a clear abuse of prosecutorial discretion in charging. And the legislature has also expressed its preference that a district court adjudicate a defendant guilty following a guilty plea or finding of guilt. See Minn.Stat. § 609.095(b); Lattimer, 624 N.W.2d at 292 (Kalitowski, J., dissenting) (noting the legislature’s stated preference).

DECISION

The district court erred by staying adjudication in the absence of a clear abuse of prosecutorial discretion in the charging function.

Reversed and remanded.

G. BARRY ANDERSON, Judge

(concurring specially).

I concur in the result because the detailed and thorough analysis of the majority opinion makes clear that the combination of Krotzer, Foss, and recent legislative enactments requires reversal here.

And while I agree with the majority analysis, that combination of factors leading to reversal in this matter also leads to the concern that there may be no effective check on the exercise of prosecutorial discretion. Whether that was the intended result is an issue for others to address.


author: HARTEN, Judge.

text:
    In the Matter of the CIVIL COMMITMENT OF Gary R. JANCKILA.
    No. C3-02-2060.
    Court of Appeals of Minnesota.
    March 18, 2003.

      Robert W. Adams, Buffalo, MN, for appellant Gary R. Janckila.
    Thomas N. Kelly, Wright County Attorney, Terry D. Frazier, Assistant County Attorney, Buffalo, MN, for respondent.
    Considered and decided by HARTEN, Presiding Judge, PETERSON, Judge, and HALBROOKS, Judge.
   OPINION

HARTEN, Judge.

Appellant challenges his commitment as mentally ill and the order authorizing involuntary administration of neuroleptic medication, arguing that there was not clear and convincing evidence that he posed a substantial likelihood of physical harm to himself or others and that the finding that he lacked the capacity to refuse neuroleptic medication was clearly erroneous. We affirm.

FACTS

In March 2002, appellant Gary Janckila was charged with criminal damage to property after he complained that he heard noises in a wall of his father’s house and punched holes in the wall. In September 2002, he was charged with felony criminal damage to property after punching or kicking several holes in the walls of a motel room. The police found a loaded handgun in the trunk of appellant’s car and a notebook in the motel room. The police reported that the notebook contained

numerous accounts of police officers seen by [appellant] in the last year, * * * accounts of people who looked at him and the vehicle[s] in which they were driving including directions and license plates, [and] journal entries of waking up in the middle of the night hearing strange noises coming from the walls [and] coming from his mouth.

Appellant was hospitalized for evaluation. After he refused to cooperate or to take medication, a physician at the hospital initiated the commitment process.

At the commitment hearing, appellant testified that he heard noises at each of the nine motels he had lived in during the past couple of years and that the police had been harassing him since 1998. When asked why he punched holes in his father’s wall, appellant testified that he was trying to determine the source of the noise.

The court-appointed examiner, James Alsdurf, Ph.D., testified that appellant “admitted to hearing sounds that he believed were directed toward him that caused him to feel uneasy, uncertain, anxious and concerned about his safety.” When asked whether appellant might be a danger to himself or others, Dr. Alsdurf testified that

there’s no one specific behavior that would indicate that he represents a danger to himself or others. I think it is more the combination of factors that would include things like * * * punching] holes in walls at his father’s home [and] at the motel room. He [has] allegedly — reportedly confronted people in different settings, including his father and strangers, * * * trying to find the source of this noise. So I think he engages in provocative behavior that really could cause danger to him[, because I don’t think he recognizes that people perceive his behavior as threatening toward them.

Dr. Alsdurf diagnosed appellant with delusional disorder and recommended that the district court commit him as mentally ill. The district court ordered that appellant be committed to the Willmar Regional Treatment Center (Willmar RTC).

After appellant refused neuroleptic medication at the Willmar RTC, his treating physician petitioned the district court for an order authorizing the administration of the medication. At the Jarvis hearing, both the treating physician and a court-appointed psychiatrist testified that neuro-leptic medication was clinically indicated and that appellant did not have the capacity to make decisions regarding the use of neuroleptics in his treatment. The district court authorized the administration of the medication.

Appellant challenges both the order of commitment and the order authorizing the administration of neuroleptic medication.

ISSUES

1. Was there clear and convincing evidence that appellant posed a substantial likelihood of physical harm to himself or others?

2. Was the district court’s finding that appellant lacked the capacity to refuse neuroleptic medication clearly erroneous?

ANALYSIS

1. Substantial Likelihood of Harm

In reviewing a commitment, we are limited to an examination of whether the district court complied with the requirements of the commitment act. In re Schaefer, 498 N.W.2d 298, 300 (Minn.App.1993). An appellate court will not reverse a district court’s findings of fact unless they are clearly erroneous. In re McGaughey, 536 N.W.2d 621, 623 (Minn.1995). There must be clear and convincing evidence that a person is mentally ül in order to commit that person. Minn.Stat. § 253B.09, subd. 1(a) (2002). We review de novo the question of whether the evidence is sufficient to meet the standard of commitment. In re Knops, 536 N.W.2d 616, 620 (Minn.1995).

A “person who is mentally ill” is one who has a substantial psychiatric disorder that “poses a substantial likelihood of physical harm to self or others.” Minn Stat. § 253B.02, subd. 13(a) (2002). A substantial likelihood of harm may be demonstrated by

(1) a failure to obtain necessary food, clothing, shelter, or medical care as a result of the impairment;
(2) an inability for reasons other indigence to obtain necessary food, clothing, shelter, or medical care as a result of the impairment and it is more probable than not that the person will suffer substantial harm, significant psychiatric deterioration or debilitation, or serious illness, unless appropriate treatment and services are provided;
(3) a recent attempt or threat to physically harm self or others; or
(4) recent and volitional conduct involving significant damage to substantial property.

Id.

The district court made a number of findings demonstrating that appellant posed a substantial likelihood of harm. It found that appellant was paranoid, that he believed he was under surveillance by the police, that he kept a detailed log of individuals who he believed were watching him, and that he had a loaded handgun in his car. See Minn.Stat. § 253B.02, subd. 13(a)(3) (likelihood of harm shown by threats or attempts to harm self or others); In re Martin, 458 N.W.2d 700, 704-05 (Minn.App.1990) (finding likelihood of harm by threatening, paranoid, and provocative behavior). The district court also found that appellant was homeless, staying in nine different motels in previous months, and that he resisted treatment for his disorder. See Minn.Stat. § 253B.02, subd. 13(a)(1) (likelihood of harm shown by failure to obtain shelter or medical care). Finally, the district court found that appellant had significantly damaged walls at both his father’s home and a motel room. See id., subd. 13(a)(4) (likelihood of harm shown by recent and volitional conduct involving significant damage to substantial property).

Appellant does not challenge these findings, but he argues that they fail to demonstrate that he posed a substantial likelihood of physical harm to himself or others. Appellant focuses his challenge on Minn. Stat. § 253B.02, subd. 13(a)(4). Although we recognize that the district court did not base its determination solely on that provision, we nevertheless address the merits of appellant’s argument.

Under the statute, conduct involving significant damage to substantial property may demonstrate that a person poses a substantial likelihood of physical harm to self or others. Id. The statute does not define “significant damage to substantial property.” Terms in a statute that are not explicitly defined must be construed “according to their common and approved usage.” Minn.Stat. § 645.08(1) (2002). We conclude that punching or kicking eight or nine holes — one measuring two feet by three feet — -in a motel room wall is conduct involving significant damage to substantial property.

Appellant questions how damaging walls demonstrates a substantial likelihood of physical harm. But appellant could certainly harm himself by punching holes in walls. Moreover, the record indicates that appellant’s behavior resulted in confrontations with third persons that could escalate into physical altercations. Appellant testified that his “bangfing] on the walls * * * led to some discussions with other tenants in the motel”; the pre-petition screening report indicated that appellant had “confronted strangers in adjoining motel rooms in the middle of the night thinking that they were somehow threatening him through the stud walls,” and Dr. Alsdurf testified that appellant does not recognize that others perceive his behavior as threatening.

We conclude that there was clear and convincing evidence that appellant posed a substantial likelihood of physical harm to himself or others.

2. Administration of Neuroleptic Medication

Appellant argues that the district court’s finding that he lacked the capacity to make decisions regarding neuroleptic medication was clearly erroneous.

A patient is presumed capable of deciding whether to take neuroleptic medication. Minn.Stat. § 253B.092, subd. 5(a) (2002). But if the court finds that a patient who refuses neuroleptic medication lacks the capacity to decide whether to take the medication, the court may authorize the treating facility to administer the medication. Id., subd. 8 (2002). When determining if a patient has the capacity to make decisions regarding neuroleptic medication, the district court must consider the following:

(1) whether the person demonstrates an awareness of the nature of the person’s situation, including the reasons for hospitalization, and the possible consequences of refusing treatment with neu-roleptic medications;
(2) whether the person demonstrates an understanding of treatment with neu-roleptic medications and the risks, benefits, and alternatives; and
(3) whether the person communicates verbally or nonverbally a clear choice regarding treatment with neuroleptic medications that is a reasoned one not based on delusion, even though it may not be in the person’s best interests.

Id., subd. 5(b) (2002).

The record supports the district court’s finding that appellant lacked the capacity to make decisions regarding the administration of neuroleptic medication. Three mental health professionals testified that neuroleptic medication was clinically indicated and that appellant did not have the capacity to decide whether to take the medication. Specifically, Dr. Alsdurf testified that appellant’s entrenched delusional thinking prevented him from considering the effectiveness, appropriateness, and benefits of neuroleptic medication. Appellant’s treating physician testified that appellant did “not understand his personal situations, the reasons for hospitalization, and the consequences of refusing neuroleptic medications.” When the findings of fact rest almost entirely on expert testimony, the district court’s evaluation of credibility is particularly significant. Knops, 536 N.W.2d at 620. We conclude that the district court’s finding that appellant lacked the capacity to refuse neuroleptic medication was not clearly erroneous.

DECISION

We conclude that there was clear and convincing evidence that appellant posed a substantial likelihood of harm to himself or others and that the district court’s finding that appellant lacked the capacity to refuse neuroleptic medication was not clearly erroneous.

Affirmed.

      . The provision concerning significant damage to substantial property was added in 2001. 2001 Minn. Laws 1st Spec. Sess. ch. 9, art. 9, § 21. The application of the provision is before this court for the first time.


author: KONENKAMP, Justice. SABERS, Justice

text:
    2003 SD 17
    PUBLIC ENTITY POOL FOR LIABILITY, (PEPL), Plaintiff and Appellee, v. David SCORE, Individually and as Personal Representative of the Estate of Gina Score, Defendant, and Tamara Wagaman, Individually, and in her Capacity as an Employee of the State of South Dakota, Defendant and Appellant.
    Nos. 22250, 22251, 22301.
    Supreme Court of South Dakota.
    Argued Nov. 20, 2002.
    Decided Feb. 12, 2003.
    Rehearing Denied March 27, 2003.

      Brent A. Wilbur, Bobbi J. Benson, Pierre, South Dakota, Attorneys for plaintiff and appellee.

      James G. Abourezk, Rita Allen, Sioux Falls, South Dakota, Attorneys for defendant and appellant Tamara Wagaman.
   KONENKAMP, Justice.

[¶ 1.] Along with several other state employees, two juvenile facility supervisors were sued in federal court for their involvement in the death of a juvenile inmate at the State Training School. South Dakota maintains the Public Entity Pool for Liability (PEPL fund) for the defense of tort claims against state employees. While agreeing to defend the other state employees, the PEPL fund declined to defend the two supervisors and brought a declaratory judgment action, seeking a ruling that their conduct was not covered. Following a trial, the circuit court ruled that the PEPL fund was responsible for defending the two supervisors in the federal case and ordered the payment of their attorney’s fees incurred in that suit. One supervisor also sought to recover her attorney’s fees in the declaratory judgment action. In granting summary judgment for the PEPL fund, the circuit court ruled that the supervisor was not entitled to her attorney’s fees in the declaratory case because the PEPL fund’s actions in denying coverage and in seeking declaratory relief were not vexatious or unreasonable. We conclude that there is no legal authority for obtaining an award of attorney’s fees against the PEPL fund in a declaratory action. We also uphold the circuit court’s rulings in two discovery-related disputes.

Background

[¶ 2.] On July 21, 1999, Gina Score, a juvenile resident at the State Training School, collapsed during a 2.4 mile forced run-walk supervised by Tamara Wagaman and Raelene Layne. Score later died in the hospital. Criminal charges were brought against Wagaman and Layne. Both were later acquitted. In a civil complaint dated October 28, 1999, Score’s family brought suit in federal district court against several state employees and others, including Wagaman and Layne. The PEPL fund defends and indemnifies state employees sued for negligence in the course of their employment. See SDCL Chapter 3-22. While agreeing to defend the other state employees under a reservation of rights, the PEPL fund declined to defend Wagaman and Layne. Wagaman hired attorney James G. Abourezk to represent her.

[¶ 3.] On November 22, 1999, the PEPL fund initiated a declaratory judgment action in circuit court, seeking a declaration that it had (1) no obligation to defend Wagaman and Layne in the federal lawsuit, and (2) no obligation to pay any damages award against them. Wagaman counterclaimed, alleging bad faith and breach of contract in failing to pay her legal expenses in the federal lawsuit and in bringing the declaratory judgment action.

[¶ 4.] Attorney Abourezk deposed a number of people, including Governor William Janklow. During that deposition, the Governor refused to answer certain questions, asserting attorney-client privilege. Abourezk then sought a court order to compel answers to these questions. In addition, he attempted to subpoena the Governor to appear at the hearing. The circuit court quashed the subpoena. At the hearing, Abourezk indicated that he wanted to discover the content of the discussions the Governor had with the administrator of the PEPL fund and its attorney concerning the federal lawsuit. Although the court ruled that Janklow prematurely asserted the attorney-client privilege because the questions he refused to answer were preliminary, the court ruled that the content of these conversations were privileged. Abourezk never attempted a follow-up deposition of the Governor. The court refused to grant financial terms against the PEPL fund for the Governor’s refusal to answer the questions.

[¶ 5.] Ultimately, the circuit court ruled that the PEPL fund was responsible for (1) defending Wagaman and Layne in the federal lawsuit and (2) paying all reasonable legal fees the two had previously incurred in that suit. Shortly thereafter, a dispute arose concerning what were reasonable fees for Wagaman’s defense. Because the attorneys defending the other employees on behalf of the PEPL fund were charging $110 per hour, the fund did not want to pay Abourezk a higher hourly rate. However, Abourezk’s agreement with Wagaman was for $125 per hour. To support his claim for his fees, Abourezk subpoenaed the billing records and the partnership agreement of the Johnson, Heidepriem, Miner, Marlow and Janklow law firm, the firm hired to represent the other state employees. The subpoena commanded the partners to produce all their billing records in the federal lawsuit and to produce the documents showing how all money received by the firm is split between the partners. The court granted the Johnson law firm’s motion to quash and awarded financial terms against Abourezk for abuse of the subpoena process.

[¶ 6.] In February 2001, the federal lawsuit was settled, leaving only the question whether the PEPL fund would be responsible for Wagaman’s legal fees in the declaratory action. Both sides moved for summary judgment. The circuit court granted summary judgment for the PEPL fund. Wagaman appeals on the following issues: (1) Whether the court erred in granting summary judgment against Wa-gaman and in favor of the PEPL fund on Wagaman’s counterclaim and motion for defense expenses for the declaratory judgment action. (2) Whether the court abused its discretion in granting terms against Wagaman’s counsel and in favor of the law firm from which Wagaman’s counsel had subpoenaed partnership and fee splitting agreements. (3) Whether the court abused its discretion in denying Wa-gaman’s motion for terms against the PEPL fund, when Wagaman attempted to compel the testimony of Governor Jank-low.

1. Attorney’s Fees for Defending Declaratory Action

[¶ 7.] Wagaman seeks to recover from the PEPL fund her attorney’s fees incurred in this declaratory action. Under the American Rule, the rule prevailing in South Dakota, parties to litigation are required to pay their own attorney’s fees, absent an agreement, statute, or rule to the contrary. SDCL 15-17-38; Boland v. City of Rapid City, 315 N.W.2d 496, 503 n. 4 (S.D.1982). In cases where insureds have sought to recover attorney’s fees against commercial insurers in declaratory judgment actions, those courts applying the traditional American Rule have refused to allow recovery. In other jurisdictions, the traditional rule has been modified or abrogated, by statute or court rule. See Annotation, Jane Massey Draper, Insured’s Right To Recover Attorney’s Fees Incurred in Declaratory Judgment Action To Determine the Existence of Coverage Under Liability Policy, 87 ALR3d 429 (1978).

[¶ 8.] No provision in the South Dakota’s Declaratory Judgment Act allows for an award of attorney’s fees to the prevailing party. See SDCL ch 21-24. Waga-man asserts that § 58-12-3, a provision in our insurance code, authorizes attorney’s fees when an insurer’s refusal to defend its insured is vexatious and unreasonable. She also contends that the PEPL fund contract provides for attorney’s fees in declaratory actions. For the reasons explained below, we conclude that she is not entitled to recover her attorney’s fees in a declaratory action against the PEPL fund.

[¶ 9.] The statute Wagaman cites as authority for recovering her attorney’s fees provides as follows:

In all actions or proceedings hereafter commenced against any employer who is self-insured, or insurance company, including any reciprocal or interinsurance exchange, on any policy or certificate of any type or kind of insurance, if it appears from the evidence that such company or exchange has refused to pay the full amount of such loss, and that such refusal is vexatious or without reasonable cause, ... the trial court and the appellate court, shall, if judgment or an award is rendered for plaintiff, allow the plaintiff a reasonable sum as an attorney’s fee to be recovered and collected as a part of the costs[.]

SDCL 58-12-3 (emphasis added). Waga-man contends that because South Dakota is a self-insured employer and because the PEPL fund vexatiously and unreasonably refused to defend her in the federal suit, she is entitled to her attorney’s fees. On several occasions, this Court has characterized the PEPL fund as a liability self-insurance pool. PEPL v. Winger, 1997 SD 77, ¶ 8, 566 N.W.2d 125, 128 n. 5; Kyllo v. Panzer, 535 N.W.2d 896, 900 (S.D.1995); see generally In re Request for Opinion of Supreme Court, 379 N.W.2d 822 (S.D.1985). Also, because the concepts are similar to insurance, we have adopted insurance law principles in cases of employee coverage questions. See PEPL v. Winger, supra. In Winger, we used those principles in interpreting the statutory provisions governing the PEPL fund to decide what acts fell within an employee’s scope of employment. SDCL 3-22-2(13).

[¶ 10.] Yet, we have never held the PEPL fund accountable under our insurance code. To do so would be to ignore the plain text of § 3-22-18: “The PEPL does not constitute insurance nor may it be considered an insurance company under the laws of South Dakota nor is the PEPL under the jurisdiction of the commissioner of insurance.” Thus, whatever name one might ascribe to it, the PEPL fund is not insurance — not “self-insurance,” “reciprocal insurance,” or “interinsurance.” In creating the PEPL fund and enacting § 3-22-18, the Legislature obviously intended to distinguish between this public liability pool and traditional insurance by excluding the PEPL fund from laws regulating traditional insurance companies. Cf., e.g., City of Arvada v. Colorado Intergovernmental Risk Sharing Agency, 19 P.3d 10, 13 (Colo 2001).

[¶ 11.] The rationale for exempting the PEPL fund from the strictures of the insurance code is apparent. As one California appellate court explained in dealing with a similar fund:

[To subject a self-insurance pool] to the statutory requirements of the Insurance Code would place member entities in the position of having the same duties and obligations as commercial insurers.... Such an arrangement would adversely affect the pool’s ability to provide members cost-effective liability coverage and subsequently defeat the purpose and intent of these self-insuring groups.

City of South El Monte v. Southern Cal. Joint Powers Ins. Auth., 38 Cal.App.4th 1629, 45 Cal.Rptr.2d 729, 731 (1995).

[¶ 12.] SDCL 58-12-3 is an insurance code provision applicable to insurers, self-insurers, and insurance companies. We rigorously defined the scope of an earlier version of § 58-12-8 in the case of Ofstad v. DOT, 387 N.W.2d 539 (S.D.1986). There, we held that because the employer was not an insurer as that term was defined in our statutes, the employer could not be held liable for attorney’s fees as an insurer under § 58-12-3. Here, the circuit court apparently assumed for the sake of argument that § 58-12-3 applied and then ruled that the PEPL fund’s actions in refusing to defend Wagaman and in seeking declaratory relief were not vexatious or unreasonable. We need not go that far. Because § 58-12-3 is inapplicable against the PEPL fund, there is no need to decide whether the fund’s actions were vexatious.

[¶ 13.] Wagaman next contends that her attorney’s fees in this declaratory action may be awarded under the terms of the PEPL fund’s Memorandum of Liability Coverage. Usually, the ultimate determiner in issues over coverage is the liability contract itself. Questions of coverage are properly answered by adverting to the rules of contract law that rely on the intent of the parties. The rules governing the PEPL fund are contained in SDCL ch 3-22 and in the contractual provisions of the “Participation Agreement Between the Public Entity Pool for Liability and the State of South Dakota,” with its attached “Memorandum of Liability Coverage.” The Memorandum provides for both “damage coverage” and “defense coverage.” The section providing for defense coverage states that “defense costs” are payable in addition to the coverage limit. The Memorandum then defines “defense costs” as “fees and expenses generated by and related to the adjustment, investigation, defense or litigation of a claim, including attorney’s fees.” (Emphasis added.) Wa-gaman then argues that attorney’s fees in this declaratory judgment action are “clearly related to the defense and litigation of the claim, and clearly constitute defense costs to which she is entitled by contract.”

[¶ 14.] The contract memorialized in the Participation Agreement and attached Memorandum is between the PEPL fund and State of South Dakota. Wagaman paid no premiums in return for coverage and had no direct contractual relationship with the PEPL fund. The circuit court ruled that as a state employee covered under the PEPL fund agreement, she was entitled to “damage coverage” and “defense coverage” in the federal suit. However, the Memorandum did not authorize payment of attorney’s fees in a declaratory judgment action. The specific language of the Memorandum refers to “defense coverage” and states that the PEPL fund will “defend any claim or suit for damages not excluded hereunder.” Within the same section, the Memorandum states that “defense costs are payable in addition to the coverage limit.” But, as detailed above, defense costs must be “generated by and related to ... a claim.” (Emphasis added.) A claim is “any claim or suit for damages,” not a suit for declaratory judgment.

[¶ 15.] We affirm the circuit court’s grant of summary judgment, although not for the same reasons the court gave.

2. Award of Terms for Subpoena Abuse

[¶ 16.] Attorney Abourezk issued subpoenas, along with notices of taking depositions, to three lawyers in the Johnson firm: Steven Johnson, Matthew Tobin, and Russ Janklow. Johnson and Tobin had participated in defending the state employees in the federal lawsuit. Russ Janklow had not been involved in that case. The subpoenas commanded the attorneys to produce all “billing records and/or statements” submitted to the PEPL fund for work done on the federal case, together with “all records” showing how much was “received as payment” from the PEPL fund, and the hourly rate charged. The subpoenas also commanded the production of the “firm’s partnership agreement and other documents which show how all monies received are split by the partners.”

[¶ 17.] The Johnson firm agreed to turn over its billing records, but moved to quash the subpoenas to the extent that they commanded the firm to produce other materials showing the internal distribution of funds. At the hearing, attorney Abour-ezk denied seeking this information for “political or publicity purposes,” as alleged by attorney Johnson. When asked by the court to explain how these partnership and fee sharing arrangements might lead to relevant evidence on the reasonableness of Abourezk’s fees, Abourezk responded, “It’s relevant in that there’s a potential conflict of interest because the Governor’s son [Russ Janklow], I believe, is receiving money from this contract with the state.” Russ Janklow denied the allegation, saying “I never worked on this case whatsoever and never billed one hour and never represented the State of South Dakota in any respect.”

[¶ 18.] The circuit court concluded that Abourezk “provided no evidence in support [of his] speculation and no explanation as to how that would have any bearing on the reasonableness of the fee that Abourezk was charging Wagaman.” The court ruled that Abourezk issued the subpoena for the fee sharing arrangements and partnership agreement in “bad faith.” It granted the Johnson firm’s motion to quash. The firm requested financial terms, and, after issuing a memorandum opinion explaining its reasoning, the court awarded terms of $350 against Abourezk.

[¶ 19.] On appeal, attorney Abourezk does not argue that the court lacked legal authority to impose terms, but he contends that the court abused its discretion in quashing the subpoenas and in imposing terms. Abourezk believes that he should not have been penalized “for zealously representing his client in discovery when statutes concerning discovery are to be liberally construed.” Our inquiry is two-fold: first, did the court have authority to award terms? And second, were the terms awarded by the court reasonable? Once it is determined that a court has authority to impose sanctions, abuse of discretion is the appropriate standard of review for an order imposing sanctions. Aberle v. Ringhausen, 494 N.W.2d 179, 182 (S.D.1992) (citing Chittenden & Eastman Co. v. Smith, 286 N.W.2d 314, 316 (S.D.1979)).

[¶ 20.] SDCL 15-6-26(b)(l) establishes the general scope and limits of discovery. The rule states:

Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action.... It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.

When discovery efforts go- beyond those subjects not “reasonably calculated to lead to the discovery of admissible evidence,” a court has authority to issue protective orders, quash subpoenas, and grant terms when appropriate. SDCL 15-6-26(e), 37(a)(4), 45(b) and 45(d)(1).

[¶ 21.] SDCL 16-6-45(d)(l) permits the issuance of a subpoena duces tecum commanding “the person to whom it is directed to produce and permit inspection and copying of designated books, papers, documents, or tangible things which constitute or contain evidence relating to any of the matters within the scope of the examination permitted by § 15 — 6—26(b)[.]” A subpoena duces tecum is subject to the provi- ' sions of §§ 15-6-26(c) and 15-6^45(b). SDCL 15-6-26(c) allows for protective orders, authorizing a court to make “any order” that justice requires to protect a person from, among other things, “annoyance, embarrassment, oppression, or undue burden or expense!.]” That statute also states that the provisions of § 15-6-37(a)(4) apply, allowing for the award of reasonable expenses, including attorney’s fees.

[¶ 22.] Having determined that the circuit court had authority to impose terms in these circumstances, we next examine whether the court abused its discretion in so ordering. We note, first, that the award of terms under § 15-6-37(a)(4) is mandatory, rather than discretionary, unless the non-prevailing person’s position was “substantially justified” or “other circumstances make an award of expenses unjust.” In State v. Guthrie, we applied a set of considerations for assessing reasonableness in an award of terms. 2001 SD 89, ¶ 12, 631 N.W.2d 190, 195.

The factors to consider when determining reasonableness include: (1) reasonable hours expended multiplied by a reasonable fee, (2) the severity of the sanction weighted against the equities of the parties, including ability to pay, (3) availability of less drastic sanctions which would prevent future abuses, and (4) other factors including the offending party’s history and degree of bad faith contributing to the violation.

[¶ 23.] Under these factors, we conclude that the court awarded reasonable terms. As to the question whether the subpoenas for the Johnson firm’s internal records were substantially justified, the court found that the “conduct of counsel in this case demonstrates a level of bad faith.” That the subpoena was issued in bad faith necessarily subsumes the notion that it was not substantially justified. Attorney Abourezk could give no explanation on how this information would lead to relevant material on the question of the reasonableness of his charges to Wagaman. To the extent that “other circumstances” might make an award of expenses “unjust,” the circuit court obviously considered those circumstances when it reduced the Johnson firm’s claim. Although the court found the firm’s statement of 6.15 hours and a fee of $100 per hour to be reasonable, it further reduced the award to $350, when it balanced the severity of the sanction and the equities of the parties. Accordingly, we conclude that the court did not abuse its discretion in awarding terms under SDCL 15-6-37(a)(4).

3. Request for Terms for Governor’s Refusal to Answer

[¶24.] In his defense of Waga-man, attorney Abourezk took several depositions, including the deposition of Governor William Janklow. Abourezk asked Janklow: “Do you know who made the decision to withhold coverage to Tamara Wagaman by the PEPL fund?” and “Did you have any discussions with anybody about withholding coverage of the two women?” The Governor refused to answer these questions on the ground of attorney-client privilege. In a hearing on a motion to compel answers to these questions, Abourezk told the court that his purpose in deposing the Governor was to learn the content of the discussions the Governor had with Judy Payne, the PEPL fund administrator. The circuit court ruled that these conversations were privileged, but that the Governor was premature in refusing to answer because the two questions he refused were merely foundational. Abourezk never attempted to retake the Governor’s deposition. In denying terms to Abourezk, the court ruled that he did not prevail on his motion to compel. But our review of the record shows that he did prevail in part. The court reasoned that because the content of the conversations Abourezk sought were privileged, an effort to go beyond the foundational questions would have been futile. Nonetheless, the court ruled that the “decisions that the Governor ultimately made as a result of those discussions cannot be protected by the attorney-client privilege and would have to be disclosed by him.”

[¶ 25.] SDCL 15-6-37(a) encompasses failures to make a disclosure required by §§ 15-6-26(a), 37(a)(2), and failure to answer questions asked under §§ 15-6-30 or 31, to make a designation under §§ 15 — 6—30(b)(6) or 31(a), to answer interrogatories under § 15-6-33, or to respond to requests for inspection under § 15-6-34, all of which may be dealt with by a motion to compel discovery. SDCL 15-6-37(a)(2). When a party only prevails in part on a motion to compel, the court has discretion whether to apportion terms. “If the motion is granted in part and denied in part, the court may apportion the reasonable expenses incurred in relation to the motion among the parties and persons in a just manner.” SDCL 15-6-37(a)(4) (emphasis added). Thus, the court had the discretion to require that each side be responsible for their own expenses.

[¶ 26.] Moreover, a court may deny an award of expenses if it “finds that the making of the motion [to compel] was substantially justified or that other circumstances make an award of expenses unjust.” SDCL 15-6-37(a)(4). Applying the Guthrie criteria set out above, the court found that Abourezk’s statement claiming 43.15 hours of work on the motion to compel was unreasonable. Further, in the interest of equity (the fact that a second deposition was not taken) the court found that no award of expenses was necessary. Finally, the court declared that there was no showing of bad faith on the part of the Governor in refusing to answer questions. Wagaman has failed to show that the court abused its discretion in declining to award terms under § 15-6-37(a)(4).

[¶27.] We affirm the circuit court on all issues.

[¶ 28.] GILBERTSON, Chief Justice, and AMUNDSON, Retired Justice, and TRIMBLE, Circuit Judge, concur.

[¶ 29.] SABERS, Justice, concurs in part and dissents in part.

[¶ 30.] TRIMBLE, Circuit Judge, sitting for ZINTER, Justice, disqualified.

[¶ 31.] MEIERHENRY, Justice, not having been a member of the Court at the time this action was submitted to the Court, did not participate.

SABERS, Justice

(concurring in part and dissenting in part).

[¶ 32.] I concur on Issues 2 and 3 but dissent on Issue 1 because:

1. Wagaman’s superiors used the judicial system to bully Wagaman at her expense while protecting themselves at the State’s expense.
2. Insurance principles apply even if PEPL is not insurance nor an insurance company.
3. The declaratory judgment action was “generated by” and “related to” the claim and the defense of the claim and is covered under PEPL.
4. Genuine issues of material fact exist as to whether the conduct of PEPL was vexatious and unreasonable.

[¶ 33.] 1. Wagaman’s superiors used the judicial system to bully Waga-man at her expense while protecting themselves at the State’s expense.

[¶ 34.] The primary purpose of the youth training facility was to break these youngsters emotionally and physically and reform them into respectful, law-abiding citizens. Part of that program included these walk-runs and the “encouragement” provided by the immediate counselors. Wagaman was doing her job as it was designed and defined by her superiors. She had no control over this policy and was expected to enforce it. Failure to do that job may have resulted in her dismissal. When the policy led to the death of Gina Score, Wagaman’s superiors, who designed the policy, were fully protected by PEPL. Wagaman, the person with the least control over that policy, was left standing alone without protection by her superiors or the fund specifically provided to defend her against this type of action.

[¶ 35.] Being hung out to dry was bad enough, but then Wagaman was forced to deal at her own expense not only with the civil suit in federal court, but also with the criminal case. This declaratory judgment action was the last straw. She had no choice but to defend the declaratory judgment action at her own expense or forfeit her coverage under PEPL. Wagaman’s superiors used her as a scapegoat and used the judicial process to bully her civilly and criminally while they were protected under PEPL. This is a wrong that is not tolerated by the law and should not be tolerated by this Court.

[¶ 36.] 2. Insurance principles apply even if PEPL is not insurance nor an insurance company.

[¶ 37.] Although SDGL 3-22-18 provides that PEPL is not insurance and is not considered an insurance company, we have recognized that principles of insurance law still apply. PEPL v. Winger, 1997 SD 77, ¶ 8, 566 N.W.2d 125, 128 n5; Kyllo v. Panzer, 535 N.W.2d 896, 900 (S.D.1995); See also, ¶ 7, majority opinion (referring to principles of insurance to support a proposition regarding PEPL). We should continue to follow this course and apply principles of insurance law to the PEPL fund, including vexatious or unreasonable refusals to pay.

[¶ 38.] Failure to apply insurance principles would be a travesty of justice.

[¶ 39.] First, by refusing to apply either contract or insurance principles to PEPL, the majority opinion leaves PEPL free of any legal repercussions for acting in bad faith against those it covers.

[¶ 40.] Second, the majority opinion eliminates any judicial oversight of this fund. If principles of insurance do not apply, how can the judicial system enforce such provisions as SDCL 3-22-8? (providing in part, “the PEPL shall pay any valid claim up to the limits established in § 3-22 — 1[.] ”) (emphasis supplied).

[¶ 41.] Third, the majority opinion precludes any recourse for a state employee who is wrongfully denied coverage under the plan, simply because SDCL chapter 3-22 provides no specific or express recourse.

[¶ 42.] The majority opinion refuses to hold PEPL accountable for its actions by stating that to do so “would adversely affect the pool’s ability to provide members cost-effective liability coverage and subsequently defeat the purpose and intent of these self-insuring groups.” That reasoning is flawed because while one purpose of such a pool is that the coverage be “cost-effective,” the primary purpose is to provide liability coverage to State employees. With no judicial or statutory mechanism to ensure that PEPL will provide liability coverage to state employees, coverage would be at the whim of the directors of the fund even though the employee is legally entitled.

[¶ 43.] 3. The declaratory judgment action was “generated by” and “related to” the claim and the defense of the claim and is covered under PEPL.

[¶ 44.] The majority opinion unreasonably constricts the language of the Memorandum. The plain language of that document indicates that attorney’s fees for defending a declaratory judgment action are payable. These fees are “generated by” and “related to” adjustment, defense and litigation of the claim. As noted in the majority opinion, properly payable “defense costs” are defined as, “fees and expenses generated by and related to adjustment, investigation, defense or litigation of a claim.” (emphasis supplied).

[¶ 45.] A different conclusion may have been reached in similar circumstances if PEPL had not brought the declaratory judgment action against Wagaman. When PEPL did so, Wagaman had to defend or forfeit her PEPL coverage. PEPL forced Wagaman to incur these related defense costs by commencing the declaratory judgment action against her. A declaratory judgment action brought to determine whether a claim must be defended is inherently “generated by” and “related to” the claim and the defense of that claim. The sole question in this declaratory judgment action was whether PEPL was obligated to defend a claim. Thus, the action was generated by and directly related to the claim and the defense of that claim and was covered under “defense costs.”

[¶ 46.] 4. Genuine issues of material fact exist as to whether the conduct of PEPL was vexatious and unreasonable.

[¶ 47.] Whether PEPL’s refusal to pay is vexatious or without reasonable cause under SDCL 58-12-3 is a question of fact. Sawyer v. Farm Bureau Mut. Ins. Co., 2000 SD 144, ¶ 29, 619 N.W.2d 644, 652; Isaac v. State Farm Mut. Auto. Ins. Co., 522 N.W.2d 752, 763 (S.D.1994). This record reveals genuine issues of material fact regarding whether PEPL’s conduct was vexatious and unreasonable.

[¶ 48.] First, PEPL’s own investigator determined that Wagaman should be afforded coverage “for any liability that may arise out of this situation.”

[¶ 49.] Second, Wagaman was performing her job according to State policy.

[¶ 50.] Third, PEPL defended ah of Wagaman’s superiors and the nurse for actions equally if not more culpable than hers.

[¶ 51.] Fourth, PEPL did not consult the Attorney General before denying coverage.

[¶ 52.] Whether any one of these acts rose to the level of vexatious or unreasonable refusal to pay is a question of material fact rendering the trial court’s grant of summary judgment premature and improper. See, Department of Revenue v. Thiewes, 448 N.W.2d 1, 2 (S.D.1989) (providing, in a summary judgment action, the evidence must be viewed in a light most favorable to the nonmoving party, the burden of proof is on the movant, and reasonable doubts as to the existence of a genuine issue of material fact should be resolved against the movant); Wilson v. Great Northern Railway Co., 83 S.D. 207, 212, 157 N.W.2d 19, 21 (1968).

[¶ 53.] We should reverse and remand to the trial court to determine these genuine issues of material fact.

      . Although the dissent contends that with this decision the judicial system cannot enforce the provisions of SDCL 3-22-8, and that state employees cannot get redress when they are denied coverage, this is precisely what the circuit court ordered. It found that Waga-man was covered by the PEPL fund and required the fund to pay all her reasonable attorney's fees and expenses in the federal suit against her. The State has not appealed that decision. Despite the dissent's criticism of Wagaman’s superiors, we are bound to base our decision on the record and the issues presented.

      . Our standard of review for summary judgments has been recited in numerous cases and need not be repeated here. See Kobbe-man v. Oleson, 1998 SD 20, ¶ 4, 574 N.W.2d 633, 635.

      . Any discussion of claims against the State or its subsidiaries must include a consideration of sovereign immunity. Sovereign immunity is the right of public entities to be free from liability for tort claims unless waived by legislative enactment. Alden v. Maine, 527 U.S. 706, 715, 119 S.Ct. 2240, 2247, 144 L.Ed.2d 636 (1999) (citations omitted). In the absence of constitutional or statutory authority, an action cannot be maintained against the State. See generally Lick v. Dahl, 285 N.W.2d 594 (S.D.1979); Darnall v. State, 79 S.D. 59, 108 N.W.2d 201 (1961); Griffis v. State, 68 S.D. 360, 2 N.W.2d 666 (1942); Mullen v. Dwight, 42 S.D. 171, 173 N.W. 645 (1919). Our Legislature has defined the conditions for the waiver of sovereign immunity in SDCL 21-32A-2. Under this statute, the State’s liability is limited to the contractual terms governing the PEPL fund.

      . The United States Supreme Court first announced this rule in Arcambel v. Wiseman, 3 U.S.(3 Dall.) 306, 1 L.Ed. 613 (1796); see Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 717-18, 87 S.Ct. 1404, 1406-07, 18 L.Ed.2d 475 (1967). The American Rule is discussed at length in Alyeska Pipeline Serv. Co. v. Wilderness Society, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975).

      . See, e.g., Shepard Marine Constr. Co. v. Maryland Cas. Co., 73 Mich.App. 62, 250 N.W.2d 541, 543 (1976); New Hampshire Ins. Co. v. Christy, 200 N.W.2d 834, 845 (Iowa 1972) (although the insurer was liable for insured’s attorney fees incurred in defending the third party’s suit against the insured, the insurer was not liable, in the absence of fraud, bad faith or stubborn litigiousness, for the insured’s expense for defending the declaratory judgment proceeding brought by the insurer); Lujan v. Gonzales, 84 N.M. 229, 501 P.2d 673, 682 (Ct.App.1972); State Farm Mut. Auto. Ins. Co. v. Vails, 278 Ala. 266, 177 So.2d 821, 826 (1965); Carter v. Virginia Sur. Co., 187 Tenn. 595, 216 S.W.2d 324, 328 (1948); Maryland Cas. Co. v. Sammons, 63 Ga.App. 323, 11 S.E.2d 89, 91-92 (1940); Bonnie Owen Realty, Inc. v. Cincinnati Ins. Co., 283 Ill.App.3d 812, 219 Ill.Dec. 294, 300, 670 N.E.2d 1182, 1188 (1996); Mikel v. American Ambassador Cas. Co., 644 N.E.2d 168, 173 (Ind.App.1994); Vernon Fire & Cas. Ins. Co. v. Sharp, 264 Ind. 599, 349 N.E.2d 173 (1976) (insurer has an absolute right to dispute and litigate claims in good faith); Clemmons v. Zurich Gen. Accident & Liab. Ins. Co., 230 So.2d 887, 895 (La.App.1969); and American Family Mut. Ins. Co. v. Brown, 631 S.W.2d 375, 379 (Mo.App.1982).

      . SDCL 21-24-11 provides: "In any proceeding under this chapter the court may make such award of costs as may seem equitable and just.” Several courts have held that this provision in the Uniform Declaratory Judgment Act does not entitle the prevailing party to attorney’s fees. Chapin v. Collard, 29 Wash.2d 788, 795, 189 P.2d 642, 646 (1948) (the term "costs” is synonymous with the term "expense” and does not include counsel fees; counsel fees are not costs or recoverable expenses); Rocky Mountain Fire & Cas. Co. v. Rose, 62 Wash.2d 896, 385 P.2d 45 (1963); Shepard Marine Constr. Co. v. Maryland Cas. Co., 73 Mich.App. 62, 250 N.W.2d 541 (1976); Spiva v. Phoenix Indem. Co., 167 Cal.App.2d 496, 334 P.2d 614 (1959).

      . In the circuit court, Wagaman also contended that because the PEPL fund committed the tort of bad faith in refusing to defend her, she was entitled to attorney’s fees as damages. She does not raise this contention on appeal. Thus, we consider that issue abandoned.

      . Several other courts have also held that so-called public self-insurance pools are not governed by state codes controlling commercial insurers. See, e.g., Doucette v. Pomes, 247 Conn. 442, 724 A.2d 481 (1999); Young v. Progressive S.E. Ins. Co., 753 So.2d 80, 85-86 (Fla.2000) (holding that a self-insurance pool "does not constitute insurance in any real sense" because it retains the risk of loss); Stratton v. Med. Ctr. Rehab. Hosp., 547 N.W.2d 748, 750 (N.D.1996); Va. Mun. Liab.

        Pool v. Kennon, 247 Va. 254, 441 S.E.2d 8, 10 (1994).

      . Some courts have adopted an exception to the American Rule, applicable to insurance companies. See. e.g. Potomac Residence Club v. Western World Ins. Co., 711 A.2d 1228, 1233 (D.C.App.1997) ("We do not believe that the American Rule was intended to deny counsel fees to an insured where, as here, that insured bought its policy and paid its premiums in order to secure its freedom from having to defend lawsuits and to pay counsel fees.”) In our case, even if the PEPL fund could be treated as commercial insurance company, no one suggests that Wagaman purchased PEPL coverage or paid any premiums. The coverage is provided to South Dakota employees automatically without payment of premiums.

      . The court ruled that conversations among the Governor, the PEPL fund administrator, and the fund's attorney concerning the rendition of legal services to the PEPL fund were protected from disclosure under the attorney-client privilege. SDCL 19-13-3. However, with respect to the two questions that were the subject of the motion to compel, the court’s order stated: "The specific questions propounded to Governor William Janklow at page 44, lines 10 and 13, page 45, line 16 and page 46, line 9 of the deposition taken on May 10, 2000, did not deal with the content of communications between himself and Brent Wilbur [PEPL fund attorney] and are therefore not protected from disclosure by SDCL 19-13-3.”


author: WILBUR, Circuit Judge.

text:
    2003 SD 20
    Ronald ROWLAND, Plaintiff and Appellant, v. LOG CABIN, INC., Defendant and Appellee, Dennis T. Howard, Victoria L. Howard and Dennis Howard, Jr., Defendants.
    No. 22257.
    Supreme Court of South Dakota.
    Considered on Briefs Oct. 8, 2002.
    Decided Feb. 19, 2003.

      Grant G. Alvine of Alvine Law Office, Sioux Falls, South Dakota, attorneys for plaintiff and appellant.
    Gary P. Thimsen and Jennifer L. Woll-man of Woods, Fuller, Shultz & Smith, Sioux Falls, South Dakota, attorneys for defendant and appellee.
   WILBUR, Circuit Judge.

[¶ 1.] Ronald Rowland (Rowland) appeals the trial court’s grant of summary judgment in favor of Log Cabin, Inc. (Log Cabin). We reverse and remand.

FACTS

[¶ 2.] On January 7, 2001, Rowland was at the Log Cabin bar in Sioux Falls. Rowland had been drinking throughout the evening and was under the influence of alcohol. The same evening, Dennis Howard, Sr., (Howard) was also at the Log Cabin bar. Howard had been drinking that evening, and by all accounts, he was also intoxicated.

[¶ 3.] Howard allowed his dog Tyson to enter the Log Cabin. Tyson is an Akita and stands three feet high to the top of its back. Scott Jansen (Jansen), the bartender, asked Howard several times to remove the dog from the bar, but ultimately Jansen allowed the dog to stay. At some point after Tyson was allowed into the bar, Tyson bit Rowland’s face.

[¶ 4.] In explanation of the event, Log Cabin offered the eyewitness testimony of Jansen. Jansen testified that Rowland sat down and was looking at the dog and petting it and that the dog’s head was probably face high with Rowland. At that time, Rowland stuck his thumb in the dog’s mouth and the dog lunged forward and bit him. Jansen further testified that Rowland had pulled upward on the dog, checking the dog’s teeth or the inside of his mouth, stuck his thumb inside of the dog’s mouth and that it was at that point the dog lunged forward.

[¶ 5.] Rowland asserted, however, that before petting or making physical contact with Tyson, he asked Howard if Tyson bit and Howard assured'him that Tyson would not bite. Rowland then began petting Tyson and, without provocation or warning, Tyson viciously attacked him, biting him in the face.

[¶ 6.] The parties dispute the level and intensity of the interaction between Rowland and Tyson.

STANDARD OF REVIEW

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. The nonmoving party will receive the benefit of all reasonable inferences that can be drawn from the facts. It is the responsibility of the moving party to demonstrate the absence of genuine issues of material fact. Only if that burden is met will the moving party be entitled to judgment as a matter of law.

Gehrts v. Batteen, 2001 SD 10, ¶ 4, 620 N.W.2d 775, 777 (internal citations omitted).

ISSUE ONE

[¶ 7.] Whether the trial court erred in finding that Log Cabin did not breach a duty of care to Rowland as a matter of law.

[¶ 8.] In Gehrts, this Court held that even when an owner does not know of an animal’s dangerous propensities the ordinary negligence standard of foreseeability will still be applied. Thus, in such a case against a dog owner, 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.’ ” Gehrts, 2001 SD 10 at ¶ 9, 620 N.W.2d at 778 (citing 4 AmJur2d, Animals § 102 (1995)). In rejecting strict adherence to the “prior similar acts” rule, this Court determined that this test to determine foreseeability is unduly restrictive, that it places too great a burden on a plaintiff and that “ ‘[t]he duty to foresee a risk of harm is dependent upon all the surrounding facts and circumstances and may require further investigation or inquiry before action is taken.’ ” Small v. McKennan Hosp., 403 N.W.2d 410, 413 (S.D.1987) (quoting Ward v. Lacreek Elec tric Association, 83 S.D. 584, 588, 163 N.W.2d 344, 346 (1968)).

[¶ 9.] In contrast, if a plaintiff proves that the dog owner knew or had reason to know of the dog’s dangerous propensity the plaintiff will be deemed to have established the foreseeability element of negligence. Gehrts, 2001 SD 10 at ¶ 8, 620 N.W.2d at 778. Hence, to establish foreseeability, a plaintiff in a dog bite case may either argue to the jury that the owner knew or should have known of the dog’s dangerous propensities or that, under the totality of the circumstances, injury to the plaintiff was reasonably foreseeable.

[¶ 10.] In this case, it is not the dog owner’s negligence that is in question

The question in this case is: Did Log Cabin breach a duty that it owed to Rowland? Rowland, under the law, is considered to be a “business invitee.” A business invitee is defined as a business visitor “ ‘who is invited to enter or remain on land for a purpose directly or indirectly connected with business dealings with the possessor of land.’ ” See Small v. McKennan Hosp., 437 N.W.2d 194, 199 (S.D.1989)(quoting Restatement (Second) of Torts, § 332 (1965)). As a general rule, “the possessor of land owes an invitee or business visitor the duty of exercising reasonable or ordinary care for his safety and is liable for the breach of such duty.” Norris v. Chicago, M., St. P. & P.R. Co., 74 S.D. 271, 273, 51 N.W.2d 792, 793 (1952); Restatement (Second) of Torts, § 343 (1965).

[¶ 11.] Although the duty owed by a business owner to a business invitee and the duty owed by a dog owner to individuals in society have different origins, the reasonable person standard applies to both. Therefore, the question to be asked is whether, as an ordinary, prudent person, Log Cabin should have foreseen the event that caused the injury and taken steps to prevent the injury.

[¶ 12.] The circuit court, which limited the test of foreseeability to “prior similar acts,” held in part:

Rowland was a business invitee of the Log Cabin and as such was owed a duty of reasonable or ordinary care for his safety. The Log Cabin will be liable to Rowland if it knew or should have known the animal was dangerous, that Rowland would fail to appreciate the danger and if Log Cabin failed to protect Rowland against the danger. The issue is the foreseeability of the dog biting Rowland. The test of foreseeability depends on whether there were prior incidents that should have alerted the Log Cabin to the necessity of protecting ■ Rowland from the dog.... Rowland will still be allowed to proceed if he can show that Log Cabin failed to use reasonable care in the circumstances in that Log Cabin and its employees should have foreseen the danger.... However, there is no evidence in the record that the Log Cabin owners or its employees were aware of the dog’s previous behavior or how it was bred or raised. There is no evidence that Log Cabin knew, or should have known, that this dog would attack Rowland, (emphasis supplied).

[¶ 13.] In this case, the trial court limited the test of foreseeability to “whether there were prior incidents that should have alerted the Log Cabin to the necessity of protecting Rowland from the dog.” However, whether Log Cabin knew of any dangerous propensities the dog had is not the sole factor to be considered when determining the foreseeability question. All the surrounding facts and circumstances should have been examined to determine the foreseeability question.

[¶ 14.] As the nonmoving party, Rowland had “the obligation to ‘set forth specific facts showing that there is a genuine issue for trial.’ ” Gehrts, 2001 SD 10 at ¶ 12, 620 N.W.2d at 779 (quoting SDCL 15-6-56(e)). Such evidence exists: One of the customers at the Log Cabin brought his dog, Tyson, into the bar; Tyson is an Akita and stands about three feet tall; Jansen, the bartender, requested that Howard remove the dog from the premises several times; Jansen allowed the dog to stay; Jansen testified that he had never seen Tyson in the bar before and was not familiar with the dog’s temperament or disposition. Whether a reasonable person would have realized that a large, unknown dog roaming free in a small bar with drunken patrons involved an unreasonable risk of harm is a question for a jury.

This Court has repeatedly stated that “[questions of negligence, contributory negligence and assumption of the risk are for the jury in all but the rarest of cases so long as there is evidence to support the issues.” “It is only when reasonable men can draw but one conclusion from facts and inferences that they become a matter of law and this rarely occurs.”

Pettry v. Rapid City Area School Dist., 2001 SD 88, ¶ 7, 630 N.W.2d 705, 708 (quoting Pierce v. City of Belle Fourche, 2001 SD 41, ¶ 22, 624 N.W.2d 353, 356-57) (citations omitted). Therefore, summary judgment was not proper and this case must be remanded for trial.

[¶ 15.] We find Rowland’s other arguments without merit.

[¶ 16.] We reverse the trial court’s grant of summary judgment and remand for a jury to determine whether Log Cabin breached a duty owed to Rowland.

[¶ 17.] GILBERTSON, Chief Justice, and KONENKAMP and ZINTER, Justices, and AMUNDSON, Retired Justice, concur.

[¶ 18.] WILBUR, Circuit Judge, for SABERS, Justice, disqualified.

[¶ 19.] MEIERHENRY, Justice, not having been a member of the Court at the time this action was submitted to the Court, did not participate.

      . Howard was dismissed as a defendant pursuant to Rowland's motion to dismiss.

      . Tyson is an Akita and Rowland suggests that Akitas were initially bred as Japanese guard dogs. Tyson stands three feet high to the top of his back. Furthermore, Rowland asserts the dog has lived its entire life at the end of an eight-foot chain. Whether Log Cabin disputes these facts or not, the facts must be taken in the light most favorable to Rowland and they suggest that Tyson was a foreseeable danger to bar patrons.


author: LAVORATO, Chief Justice.

text:
    Jane Ann WEBER, Appellee, v. Michael Joseph WARNKE, Defendant, and Arthur Winker and Cletus Winker, d/b/a Glidden Body Shop, Appellants.
    No. 00-0638.
    Supreme Court of Iowa.
    Jan. 23, 2003.
    Rehearing Denied March 14, 2003.

      René Charles Lapierre of Klass, Stoik, Mugan, Villone, Phillips, Orzechowski, Clausen & Lapierre, L.L.P., Sioux City, for appellants.
    Gregory T. Racette and Marci B.H. Too-man of Hopkins & Huebner P.C., Des Moines, for appellee.
   LAVORATO, Chief Justice.

Jane Ann Weber sued Arthur Winker and Cletus Winker d/b/a Glidden Body Shop (collectively “Winkers”) and Michael Warnke for injuries resulting from an automobile collision with a vehicle she claimed the Winkers owned. Weber filed a motion for adjudication of law points to determine whether the Winkers in fact owned the vehicle. The district court concluded the Winkers owned the vehicle because they failed to comply with Iowa Code section 321.52(4)(a) (1997), pertaining to out-of-state salvage vehicles, when they allegedly sold the vehicle to Warnke, the driver involved in the collision. The Winkers appealed and we transferred the case to the court of appeals which affirmed. On further review, we vacate the decision of the court of appeals, reverse the judgment of the district court, and remand the case for further proceedings.

I. Background Facts and Proceedings.

On February 3,1998, Weber was driving a motor vehicle that was involved in a collision with a 1986 Mercury Sable driven by Warnke. The Winkers had purchased the Sable from State Farm Insurance Company (State Farm) at the Nebraska Salvage Pool on September 8,1997.

The Winkers purchased the Sable intending to rebuild it or use it for parts. State Farm, as the seller, executed a Nebraska salvage certificate of title for the Sable, and Cletus Winker, on behalf of Glidden Body Shop, executed the document as buyer. The Winkers did not obtain an Iowa certificate of title, salvage or otherwise, before the collision. They believed that because they had a recycler’s license, they could sell salvaged vehicles to individuals in Iowa with a Nebraska salvage certificate of title. However, they also understood the process necessary to obtain an Iowa certificate of title for vehicles purchased out of state.

Warnke worked as an employee for the Winkers and later worked for them on a contract basis. He expressed an interest in buying the Sable from the Winkers after his own 1987 Ford Taurus was totaled in an accident. A purchase agreement for the Sable was signed, and the Nebraska salvage certificate of title was assigned to Warnke on January 12,1998.

One or both of the Winkers told Warnke that he should not drive the Sable until he transferred title and had it inspected. Warnke was an experienced auto body repairman, familiar with the procedure necessary to transfer title when selling and buying automobiles. According to Warnke, every time he asked Arthur Winker for the title to the Sable, Arthur would just issue a new bill of sale for the vehicle. Eventually, Warnke put the license plates from his totaled Taurus on the Sable.

Weber sued Warnke, the Winkers, and State Farm, her insurer, seeking recovery of damages for her personal injuries resulting from the accident. Weber sought recovery from the Winkers on a theory of vicarious liability pursuant to Iowa Code section 321.493 (Supp.1997) and under an employer/employee and master/servant theory. Before trial, Weber dismissed with prejudice the employer/employee claim. Also before trial, Weber dismissed with prejudice her claims against State Farm.

The district court denied the Winkers’ motion for summary judgment. In that motion, the Winkers claimed there had been a bona fide sale of the Sable to Warnke; therefore, pursuant to section 321.493, the Winkers were not liable for Weber’s damages.

Later, Weber filed a motion to adjudicate law points, contending that any “sale” of the Sable to Warnke was ineffective because of the Winkers’ failure to obtain an Iowa salvage certificate of title, as required by Iowa Code section 321.52(4)(a). Therefore, Weber contended, the Winkers owned the Sable on the date of the collision pursuant to section 321.493. The district court ruled as a matter of law that on the date of the collision the Winkers owned the Sable.

Without prejudice to an appeal of the district court’s ruling on Weber’s motion to adjudicate law points, the Winkers stipulated that Warnke was negligent, his negligence was the sole proximate cause of the accident, and Weber’s damages equaled at least $300,000 (the amount of the Winkers’ liability insurance). The matter then proceeded to a jury trial, which resulted in a verdict of $783,549.79 for Weber.

The Winkers appealed from the district court’s ruling on Weber’s motion to adjudicate law points. We transferred the case to the court of appeals, which affirmed the district court ruling. We granted the Winkers’ application for further review.

II. Issue.

The issue we must decide is whether acquiring an Iowa salvage certificate of title pursuant to Iowa Code section 321.52(4) and related administrative rules is a condition precedent to any bona fide sale for liability purposes under section 321.493(2).

III. Scope of Review.

We review a ruling on an adjudication of law points for errors at law. Westfield Ins. Co. v. Economy Fire & Cas. Co., 623 N.W.2d 871, 876 (Iowa 2001). “An adjudication of law points is confined to a determination of legal matters on uncon-troverted pleadings.” Mortensen v. Heritage Mut. Ins. Co., 590 N.W.2d 35, 38 (Iowa 1999) (emphasis added); see Iowa R. Civ. P. 1.454 (formerly rule 116) (repealed effective August 1, 2002).

IV. Applicable Statutes.

Our resolution of the issue depends on our construction of the following three statutes. Iowa Code section 321.498 provides in relevant part:

1. a. [I]n all cases where damage is done by any motor vehicle by reason of negligence of the driver, and driven with the consent of the owner, the owner of the motor vehicle shall be liable for such damage'. For purposes of this subsection, “owner ” means the person to whom the certificate of title for the vehicle has been issued or assigned ....
2. A person who has made a bona fide sale or transfer of the person’s right, title, or interest in or to a motor vehicle and who has delivered possession of the motor vehicle to the purchaser or transferee shall not be liable for any damage thereafter resulting from negligent operation of the motor vehicle by another, but the purchaser or transferee to whom possession was delivered shall be deemed the owner. The provisions of subsection 2 of section 321.45 shall not apply in determining, for the purpose of fixing liability under this subsection, whether such sale or transfer was made.

Iowa Code § 321.493 (Supp.1997).

Iowa Code section 321.45 provides in relevant part:

2. No person shall acquire any right, title, claim or interest in or to any vehicle subject to registration under this chapter from the owner thereof except by virtue of a certifícate of title issued or assigned to the person for such vehicle ...; nor shall any waiver or estoppel operate in favor of any person claiming title to or interest in any vehicle against a person having possession of the certificate of title ... for such vehicle for a valuable consideration except in the case of:
c. A dispute between a buyer and the selling dealer who has failed to deliver or procure the certificate of title as promised, or
d. Except for the purposes of section 321.493.
Except in the above enumerated cases, no court in any case at law or equity shall recognize the right, title, claim or interest of any person in or to any vehicle subject to registration sold or disposed of, or mortgaged or encumbered, unless evidenced by a certificate of title ... duly issued or assigned in accordance with the provisions of this chapter.

Iowa Code § 321.45(2) (1997).

Iowa Code section 321.52(4)(a) (out-of-state sales — junked, dismantled, wrecked, or salvaged vehicles) provides in relevant part:

A vehicle rebuilder or a person engaged in the business of buying, selling, or exchanging vehicles of a type required to be registered in this state, upon acquisition of a wrecked or salvage vehicle, shall surrender the certificate of title or manufacturer’s or importer’s statement of origin properly assigned, together with an application for a salvage certificate of title to the county treasurer of the county of residence of the purchaser or transferee within fifteen days after the date of assignment of the certificate of title for the wrecked or salvage motor vehicle. This subsection applies only to vehicles with a fair market value of five hundred dollars or more, based on the value before the vehicle became wrecked or salvage. Upon payment of a fee of two dollars, the county treasurer shall issue a salvage certificate of title which shall bear the word “SALVAGE” stamped or printed on the face of the title in a manner prescribed by the department. A salvage certificate of title may be assigned to ... a person engaged in the business of purchasing bodies, parts of bodies, frames or component parts of véhicles for sale as scrap metal, a salvage pool, or an authorized vehicle recy-cler licensed under chapter 321H. An authorized vehicle recycler licensed under chapter 321H ... may assign a salvage certificate of title to any person.

Iowa Code § 321.52(4)(a).

V. Analysis.

The district court reasoned that to qualify as a bona fide sale for the purposes of section 321.493, a purchaser must possess an enforceable right against the seller. The court concluded that because the Winkers did not have an Iowa certificate of title, as required by section 321.52(4)(a), they could not transfer their right, title, claim, or interest in the vehicle to Warnke. The transfer attempt by the assignment of the Nebraska salvage certificate of title to Warnke was ineffective; therefore, no bona fide sale or transfer occurred, and the Winkers as “owners” were vicariously liable under section 321.493.

The court of appeals agreed with the district court, concluding that “the transfer of a salvage vehicle differs from the sale or transfer of a vehicle with a regular title in that acquiring an Iowa salvage certificate of title pursuant to section 321.52(4)(a) and related administrative rules is a condition precedent to any bona fide sale or transfer of a salvage vehicle for the purposes of section 321.493(2).”

In their further review application, the Winkers argue that the court of appeals applied “title principles” instead of “ownership principles” to determine vicarious liability under section 321.493. The Winkers contend that this court has never recognized an exception to ownership principles for purposes of section 321.493 where a salvage certificate of title is involved. Rather, the Winkers argue, the court has “consistently maintained” that indices of ownership govern owner’s consent cases.

The purpose of the section 321.493 exception is “to avoid the imposition of liability upon the prior owner merely for failing to effect a transfer of the title certificate to the new owner.” Peterson v. Ford Motor Credit Co., 448 N.W.2d 316, 320 (Iowa 1989); see also Campbell v. LeClaire Wrecking Serv., 380 F.Supp. 555, 558 (S.D.Iowa 1974) (Iowa Code section 321.493 “places the onus of civil liability on all consenting owners except those who, . but for a defective or incomplete transfer of title, would have no ownership interest at all.” (Emphasis added.)). The exception also protects “an innocent third party from the careless operation of a motor vehicle” and makes “the owner responsible for the negligence of one to whom the owner entrusted its operation. Such laws are meant to protect injured persons against the financial irresponsibility of drivers.” Peterson, 448 N.W.2d at 320 (citation omitted).

The section 321.493 exception “removes the problem of registration of the certificate of title, but it imposes a minimum threshold of a bona fide sale or transfer.” Desy v. Rhue, 462 N.W.2d 742, 747 (Iowa Ct.App.1990) (emphasis added). Section 321.493 requires the court “to determine whether there has been a bona fide sale or transfer and to discount the effect of the registration of the vehicle for purposes of establishing liability.” Id. at 745 (emphasis added).

To “hold the legal title” and to have “a bona fide sale or transfer,” a purchaser must, at minimum, possess enforceable rights against the purported seller. Id. Therefore, a contract is a prerequisite to imposing liability on the purchaser. Id. at 745-46.

Weber cites two cases to support her argument that because section 321.493 exempts only section 321.45(2), the provisions of section 321.52(4)(u) must be met for a bona fide sale or transfer to occur. In Campbell, the court concluded a bona fide sale or transfer could not be made unless the transferor complied with the motor vehicle inspection provisions of section 321.238. 380 F.Supp. at 558-59. (Section 321.238 has since been repealed. See 1984 Iowa Acts ch. 1305, § 73.) The court reasoned as follows:

The purpose of the inspection law is to ensure that vehicles operating on the streets and highways of Iowa meet at least some minimal standard of safety and that operation of such vehicles poses no undue threat to the health and well-being of the people and property in the state. It thus seems reasonable and just to hold transferors of motor vehicles to a greater responsibility with regard to inspection of their vehicles than with regard to the proper execution and registration of title documents. While failure to transfer a title properly may make the orderly collection of vehicle taxes more difficult or complicate the financing of vehicle purchases, the operation of potentially unsafe automobiles poses a substantial threat to the lives of all within their reach.
The sale of an uninspected and potentially unsafe vehicle is a transgression of a much greater magnitude [than the failure to execute the proper paperwork, as required by section 321.45]. This may be the reason the legislature did not broaden the [section] 321.45 exemption from civil liability to cover the failure to comply with [section] 321.238.

Campbell, 380 F.Supp. at 558-59.

In Campbell, the court noted that the legislature’s failure to amend section 321.493 to include an exception for those who fail to comply with section 321.238 “seems to be ... [an] indicium of intent to hold liable those owners who fail to satisfy the vehicle inspection law’s requirements.” Id. at 558. The court held that the trans-feror’s failure to have an automobile inspected prior to transferring it to a purported buyer barred the transferor from making a bona fide transfer or sale of that vehicle; therefore, the transferor remained the “owner” for purposes of section 321.493. Id. at 559.

This court cited with approval the above quote from Campbell and reached a similar conclusion in Sullivan v. Skeie Pontiac, Inc., 270 N.W.2d 814, 817 (Iowa 1978). The court explained the different objectives of sections 321.45(2) and 321.238:

For owner’s liability purposes under [section] 321.493, the legislature expressly provided that the certificate of title law in [section] 321.45(2) should not control. But it did not so provide with respect to the inspection law in [section] 321.238. That section is, among other things, a safety measure. The trial court aptly stated, “There is a sound explanation for the legislature’s action, namely, owner’s liability responsibility is a solid motivator to obtain safety compliance before a new buyer takes a motor vehicle onto the highway.”

Id. at 816. The court asked, “how can we say a sale and delivery are bona fide when they are in contravention of the express proscription of [section] 321.238(18) that a person ‘shall not’ sell or transfer a motor vehicle unless a valid inspection certificate is attached?” Id. at 817. Thus, the court held that noncompliance with section 321.238 resulted in retained ownership responsibility under section 321.493 on the part of the transferor. Id. at 817.

There is a “little bit of something” for both sides in Campbell and Sullivan. The two cases support Weber’s assertion that the statutory construction rule of “ex-pressio unis est exclusio alterious ” (expression of one thing is the exclusion of another) applies. The rule recognizes that legislative intent — the polestar of statutory construction — is expressed by omission as well as by inclusion, and the express mention of one thing implies the exclusion of others not so mentioned. Meinders v. Dunkerton Cmty. Sch. Dist., 645 N.W.2d 632, 637 (Iowa 2002). So, the argument goes, because the legislature failed to specifically exempt section 321.52 from section 321.493 (as it did with section 321.45), the provisions of section 321.52(4)(u) must be met for a bona fide transfer or sale to occur.

On the other hand, Campbell and Sullivan also relied heavily on the purpose underlying section 321.238 in reaching the conclusion that the provisions of section 321.238 must be met for a section 321.493 “bona fide sale or transfer” to occur. As mentioned, in both cases the respective courts concluded that section 321.238 was an important safety measure enacted to ensure a minimal standard of safety and protect the health and well-being of the people and property in the state. See Campbell, 380 F.Supp. at 558; Sullivan, 270 N.W.2d at 817. Additionally, in Sullivan, this court relied heavily on the fact that section 321.238(18) expressly prohibited the sale or transfer of a motor vehicle unless a valid certificate of inspection was attached. See Sullivan, 270 N.W.2d at 816-17.

The legislature enacted section 321.52(4) for purposes other than safety. For example, section 321.52(4)(c) provides that the salvage theft examination

shall be for the purposes of determining whether the vehicle or repair components have been stolen. The examination is not a safety inspection and a signed salvage theft examination certificate shall not be construed by any court of law to be a certification that the vehicle is safe to be operated.

Iowa Code § 321.45(4)(c) (emphasis added). Section 321.52 merely describes the steps required to obtain an Iowa salvage certificate of title. See Mulder v. State, 565 N.W.2d 348, 350 (Iowa 1997) (noting that, although “[t]here is no published case law construing section 321.52 ... it seems apparent from the nature of prior amendments to the statute, that the legislature wanted to ensure that consumers were informed about any significant damage and/or prior salvage designations which a vehicle might have had”). Similarly, the administrative rules intended to implement section 321.52 merely describe in greater detail the steps required to obtain an Iowa salvage certificate of title. See Iowa Admin. Code ch. 761-405.

For reasons that follow, we find more persuasive the Winkers’ argument that the provisions of section 321.52(4)(a) are encompassed within the meaning and language of section 321.45(2). Looking at chapter 321 as a whole, we note that section 321.45 is the first section in a portion of chapter 321 entitled “transfers of title or interest.” Section 321.45 lays out the general proposition that title must be transferred with a vehicle. See Iowa Code § 321.45. Section 321.52 appears later in the “transfers of title or interest” portion of chapter 321, and deals specifically with transfer of title for out-of-state salvage vehicles. One can argue that the legislature’s decision to exempt the certificate-of-title requirements of section 321.45(2) from the determination of a “bona fide sale or transfer” for purposes of section 321.493 includes any certificate-of-title requirement, including those for salvage vehicles as specified in section 321.52. The language of section 321.45 supports this argument. See Iowa Code § 321.45(2) (“No person shall acquire any right, title, claim or interest in or to any vehicle subject to registration under this chapter ... except by virtue of a certificate of title ....”) (emphasis added).

The plain language of sections 321.45(2) and 321.493(2) makes clear that possession of a certificate of title is not required to prove whether a bona fide sale or transfer occurred for purposes of fixing liability under section 321.493(2). Those sections do not differentiate between a salvage certificate of title and any other certificate of title. As mentioned, section 321.45(2) refers to “... any vehicle subject to registration under this chapter.... ” Iowa Code § 321.45(2) (emphasis added). Out-of-state salvage vehicles are “vehiele[s] subject to registration under this chapter,” because such vehicles are subject to registration under chapter 321, as provided in section 321.52. Therefore, “certificate of title” in section 321.45(2) refers to any certificate of title, salvage or otherwise. The district court erred when it concluded that the Winkers were “owners” because they failed to comply with the salvage certificate of title provisions of section 321.52(4)(a).

In agreeing with the district court, the court of appeals relied heavily on the fact that the “transfer of a salvage vehicle differs from the sale or transfer of a vehicle with a regular title.” By the plain language of sections 321.45(2) and 321.493, these differences are irrelevant for purposes of fixing liability under section 321.493. The court of appeals erred in concluding otherwise.

VI. Disposition.

In sum, we conclude that Iowa Code section 321.45(2) requires that the right, title, claim or interest of any person in or to “any vehicle subject to registration” must be evidenced by a certificate of title. Iowa Code § 321.45(2) (emphasis added). By its terms, this includes salvage vehicles. Iowa Code section 321.493(2) exempts from consideration the provisions of section 321.45(2) in determining whether a bona fide sale or transfer occurred for purposes of fixing liability for damages resulting from the negligent operation of a motor vehicle. Therefore, the existence of a certificate of title — salvage or otherwise — is irrelevant in determining whether a bona fide sale or transfer occurred here under section 321.493(2). Compliance with Iowa Code section 321.52(4)(a) and related administrative rules is not a condition precedent to the determination of a bona fide sale or transfer under section 321.493(2), and the district court and the court of appeals erred in concluding otherwise.

For all these reasons, we vacate the decision of the court of appeals, reverse the judgment of the district court, and remand the ease for further proceedings consistent with this opinion.

DECISION OF COURT OF APPEALS VACATED; JUDGMENT OF DISTRICT COURT REVERSED AND CASE REMANDED.