author: TOUSSAINT, Chief Judge.

text:
    MUTUAL SERVICE CASUALTY INSURANCE COMPANY, Appellant, v. MIDWAY MASSAGE, INC., et al., Minnesota Institute of Neurology, P.A., Trang Nguyen, et al., Respondents.
    No. A04-1312.
    Court of Appeals of Minnesota.
    March 29, 2005.

      Bradley L. Doty, Jon R. Schindel, Stem-pel & Associates, P.L.C., Hopkins, MN, for appellant.
    Charles J. Lloyd, Livgard & Rabuse, P.L.L.P., Minneapolis, MN, for respondents Midway Massage and Full Circle Physical Therapy.
    Wilbur W. Fluegel, Fluegel Law Office, Minneapolis, MN and John B. Wolfe, Jr., Wolfe & Associates, St. Paul, MN, for respondent Minnesota Institute of Neurology-
    Considered and decided by TOUSSAINT, Chief Judge; HUDSON, Judge; and CRIPPEN, Judge.

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

   OPINION

TOUSSAINT, Chief Judge.

On appeal from a judgment dismissing appellant Mutual Service Casualty Insurance Company’s (MSI) declaratory action for failure to state a claim, MSI argues that respondents Midway Massage, Inc., Full Circle Physical Therapy, Inc., and Minnesota Institute of. Neurology, P.A. are incorporated in contravention to the Minnesota Professional Firms Act, Minn. Stat. §§ 319B.01-.12 (2004). Because the Minnesota Professional Firms Act does not create an express or implied private cause of action, we affirm.

FACTS

Appellant Mutual Service Casualty Insurance Company (MSI) is a no-fault insurer. Following a motor vehicle accident in March 2002, respondents Thai Dinh and Trang Nguyen sought treatment for their injuries from respondents Midway Massage, Inc. (Midway Massage), Full. Circle Physical Therapy, Inc. (Full Circle), and Minnesota Institute of Neurology, P.A. (MIN) (collectively the clinics). Dinh and Nguyen submitted claims to MSI for medical insurance benefits, but MSI denied payment. Consequently, Dinh and Nguyen petitioned for no-fault arbitration.

MSI filed a rule 5(f) statement with the American Arbitration Association opposing Dinh and Nguyen’s petition, arguing that MSI’s defense to the arbitration incorporated legal issues and the arbitrator, lacked jurisdiction. Shortly thereafter, MSI filed a complaint for declaratory relief in Ramsey County District Court, requesting a judgment dismissing or staying the arbitration until the legal issues involved in the declaratory relief action were resolved. The complaint alleges that the treatment expenses submitted by the clinics are barred by the clinics’ violation of the Minnesota Professional Firms Act (MPFA) and the Corporate Practice of Medicine Doctrine (CPMD). MSI also made a separate motion to dismiss or stay Dinh and Nguyen’s upcoming arbitration.

According to the complaint, Full Circle and Midway Massage are incorporated under Minn.Stat. ch. 302A (2002) and they are operated by individuals who are not licensed in massage or physical therapy. MSI argued that Midway Massage and Full Circle were professional firms and, therefore, must elect to incorporate under the MPFA. MIN is incorporated under chapter 302A and the MPFA by a licensed chiropractor. Because MIN employs licensed physicians, MSI argued that MIN was invalidly incorporated under the MPFA. Ultimately, MSI argued that it was absolved from making payments to the insureds who sought treatment from clinics incorporated in contravention to statute, MPFA and the CPMD.

In lieu of filing an answer, the clinics moved to dismiss MSI’s action for failure to state a claim upon which relief can be granted under Minn. R. Civ. P. 12.02(e). Dinh and Nguyen moved to dismiss MSI’s complaint against them for insufficiency of process under Minn. R. Civ. P. 12.02(d). The district court denied MSI’s motion to stay the arbitration in July 2003.

On January 16, 2004, the district court granted the clinics’ motion to dismiss, awarded costs and disbursements, and directed the clinics’ counsel to submit affidavits regarding attorney fees. Additionally, the district court held that the MPFA does not create an express or implied private cause of action and, therefore, MSI had failed to state a claim under rule 12.02(e).

On May 24, 2004, the district court dismissed MSI’s complaint against Dinh and Nguyen for insufficiency of process, incorporated its January 16, 2004 order, and awarded attorney fees to Midway Massage and Full Circle. This appeal follows.

ISSUES

I. Are the issues raised in this appeal moot?

II. Did the district court err by dismissing MSI’s claim based on an alleged violation of the Minnesota Professional Firms Act because the statute does not create a private cause of action?

III. Did the district court abuse its discretion by awarding attorney fees?

ANALYSIS

I.

Midway Massage and Full Circle move to dismiss MSI’s MPFA and CPMD claim on appeal, arguing that the issue is moot and, therefore, this court lacks jurisdiction. “It is well established that this court will hear only live controversies.” In re Inspection of Minn. Auto Specialties, Inc., 346 N.W.2d 657, 658 (Minn.1984). Generally, an appeal will be dismissed as moot if, pending an appeal, an event occurs which makes a decision on the merits unnecessary or an award of effective relief impossible. Id. “The mootness doctrine, therefore, implies a comparison between the relief demanded and the circumstances of the case at the time of decision in order to determine whether there is a live controversy that can be resolved.” In re Application of Minnegasco, 565 N.W.2d 706, 710 (Minn.1997).

Here, while the district court action was pending, Dinh and Nguyen’s no-fault arbitrations proceeded as scheduled. The arbitrator rendered the awards and, subsequent to the dismissal in the district court matter, MSI satisfied the awards in full. MSI’s satisfaction of the arbitration awards renders a decision on the merits of this case unnecessary. Because MSI has paid the benefits, a declaratory judgment that the clinics are improperly incorporated would have no practical effect. As such, MSI’s claim is moot.

But “[t]he mootness doctrine is a flexible discretionary doctrine, not a mechanical rule that is invoked automatically whenever the underlying dispute between the particular parties is settled or otherwise resolved.” State v. Rud, 359 N.W.2d 573, 576 (Minn.1984). Here, without a decision on the merits, future insureds may have to bear the expense of litigating their no-fault benefits. Thus, the issue of whether MSI is liable for expenses incurred at clinics that are alleged to be improperly incorporated is “capable of repetition but likely to evade review.” See Elzie v. Comm’r of Pub. Safety, 298 N.W.2d 29, 32 (Minn.1980). Therefore, we address the merits of MSI’s appeal.

II.

MSI argues that the district court erred by dismissing its MPFA claim for failure to state a claim. This court reviews a dismissal under Minn. R. Civ. P. 12.02(e) de novo. Bodah v. Lakeville Motor Express, Inc., 663 N.W.2d 550, 552 (Minn.2003). The only question before the reviewing court is whether the complaint sets forth a legally sufficient claim for relief. Id.

MSI lacks standing to bring a claim under the MPFA because the MPFA does not create an express or implied private right of action. A statute does not give rise to a civil cause of action unless the statute expressly or implicitly creates a cause of action. Flour Exch. Bldg. Corp. v. State, 524 N.W.2d 496, 498 (MinmApp. 1994), review denied (Minn. Feb. 14, 1995). The MPFA does not contain any explicit language creating a cause of action to challenge an alleged violation of the act’s incorporation provisions. To determine whether a cause of action can be implied from a statute, courts must consider three factors: “(1) whether the plaintiff belongs to the class for whose benefit the statute was enacted; (2) whether the legislature indicated an intent to create or deny a remedy; and (3) whether implying a remedy would be consistent with the underlying purposes of the legislative enactment.” Id. at 499 (citing Corb v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2088, 45 L.Ed.2d 26 (1975)). It is not the province of this court to create a statutory cause of action not provided for by the legislature. See Stubbs v. N. Mem’l Med. Ctr., 448 N.W.2d 78, 83 (Minn.App.1989), review denied (Minn. Jan. 12,1990).

The district court dismissed MSI’s complaint on the first factor, determining that consumers of professional services, and not insurance companies, were the intended beneficiaries of the MPFA. In making this determination, the district court relied on comments to the statute stating that the purpose of the MPFA was to shield professionals against “automatic, vicarious liability for the debts of the organization,” and “to prevent nonprofessionals from interfering with the professional judgment of licensed practitioners.” Minn. Stat. Ann. § 319B.01, reporter’s notes— 1997 (West 2004). While the comments suggest that the legislature intended the MPFA to benefit both professionals as well as consumers, there is no indication that the legislature intended to benefit insurance companies through the professional incorporation statute.

MSI does not challenge the district court’s conclusion that consumers were the MPFA’s intended beneficiaries. Rather, MSI argues that the district court erred because MSI’s interest in preventing unregulated firms (such as the clinics), as well as MSI’s interest in paying medical claims, reflects and comprises the interests of consumers. MSI’s pleaded purpose for initiating this litigation, however, was to avoid reimbursing two consumers for medical services received at the clinics. Moreover, while MSI is a beneficiary of the statute’s regulation and governance of professional firms, it is only an indirect beneficiary, a status insufficient to create an implied private cause of action. See Counties of Blue Earth v. Minn. Dept. of Labor and Indus., 489 N.W.2d 265, 268 (Minn. App.1992) (finding no private cause of action where respondents were not a statute’s “especial beneficiaries”).

Additionally, an analysis of the remaining two factors also demonstrates that the legislature did not intend to create an implied private cause of action under the MPFA. In Minn.Stat. § 319B.11, subd. 8 (2004), the legislature provided that a “board, through the attorney general, may institute proceedings in a district court of this state ... to involuntarily rescind a professional firm’s election.” Hence, the intended remedy for violations of the MPFA is board action through the state attorney general. Finally, MSI fails to demonstrate how creating a private cause of action to challenge a professional firm’s incorporation would advance the legislative purposes of shielding professionals from vicarious liability and protecting professionals from the influence of non-professionals. As such, the district court did not err in concluding that the MPFA does not imply a private cause of action and in dismissing MSI’s complaint under Minn. R. Civ. P. 12.02(e).

III.

MSI also challenges the district court’s award of attorney fees to Midway Massage and Full Circle, arguing solely that the declaratory action was neither brought in bad faith nor based on a frivolous argument. This court will reverse a district court’s award of attorney fees only if the award constitutes an abuse of the district court’s broad discretion. Becker v. Alloy Hardfacing Eng’g Co., 401 N.W.2d 655, 661 (Minn.1987). A district court may award attorney fees as a sanction when, following notice to the offending party and an opportunity to respond, the court determines that either (1) the claims were presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation, or (2) the claims were unwarranted by existing law. Minn.Stat. § 549.211, subds. 2, 3, 5 (2004).

The district court did not abuse its discretion by awarding attorney fees. The clinics’ counsel submitted various letters and an affidavit to the court detailing MSI’s attempts to delay resolution of this matter and to use the discovery process as a means to solicit information regarding the clinics’ patients and practices. Moreover, there was no statutory or prece-dential basis from which MSI could argue that the MPFA contained a private cause of action. Given that there was ample evidence in the record suggesting that MSI filed suit in bad faith to avoid its payment obligations, the district court did not abuse its discretion in awarding fees.

DECISION

Because the MPFA does not provide for a private cause of action. MIS Lacks standing to challenge the clinics’ incorporation. Accordingly, the district court did not err in dismissing MIS’s complaint for failure to state a claim upon which relief may be granted.

Affirmed.

      . The MPFA, Minn.Stat. §§ 319B.01-.12 (2004), permits providers of “professional services" to operate as a corporation with limited liability so long as the ownership interest in the corporation is held by a professional who is licensed to practice in at least one category of services provided by the corporation.

      . MSI’s complaint also alleged that the clinics were incorporated in violation of the Corporate Practice of Medicine Doctrine (CPMD). While this appeal was pending, this court addressed the application of the CPMD to incorporated climes providing chiropractic, physical therapy, and massage services in Isles Wellness, Inc. v. Progressive N. Ins. Co.,
        689 N.W.2d 561 (Minn.App.2004). This court held that the CPMD does not bar the corporate employment of chiropractic, physical therapists, or massage therapists. Id. at 565-66. Isles Wellness is dispositive in this matter. Accordingly, the district court did not err in dismissing MSI’s complaint for failure to state a claim based on the CPMD.


source: Caselaw Access Project

author: MINGE, Judge.

license: Public Domain

text:
    ESTATE OF Linda Jeanne MEALEY, Decedent.
    No. A04-1498.
    Court of Appeals of Minnesota.
    April 26, 2005.

      Kevin A. Spellacy, Gerald L. Thoreen, Quinlivan & Hughes, P.A., St. Cloud, MN, for appellant George Mealey.
    Chad M. Roggeman, David R. Crosby, Aaron J. Crandall, Leonard, Street and Deinard, P.A., St. Cloud, MN, for respondent Carol Wofsey.
    Christopher W. Harmoning, Gray, Plant, Mooty, Mooty & Bennett, P.A., St. Cloud, MN, for respondent W. James Davis.
    Considered and decided by MINGE, Presiding Judge; HUDSON, Judge; and PORITSKY, Judge.

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

   OPINION

MINGE, Judge.

Appellant challenges the district court’s order accepting the final account in the probate of his daughter’s estate. Because appellant has no financial rights affected by the final account that accord him standing to appeal, we affirm.

FACTS

Linda Jeanne Mealey died testate on November 5, 2002, in Sherburne County. She is survived by her spouse, James W. Davis, and her parents, George and June Mealey. On January 30, 2003, her will was admitted to probate and Carol M. Wofsey, the personal representative designated in the will, was appointed to ■ that position.

Other than tangible goods, the will directs that the decedent’s estate be distributed to seven beneficiaries. Devises of the lesser of 8% of the estate or $10,000 each are left to Robin Fall and John Veale, two of the decedent’s friends. Decedent left Davis, her husband, the elective, spousal share under Minnesota law. Davis was given the right to choose which assets of the estate he wished to take to satisfy the bequest. The remaining portion of the estate was divided among four institutions: Cornell University — 50%, the Ocean Conservancy — 25%, Save-the-Redwoods League — 12 1/2%, and Bat Conservation International — 12 1/2%.

As a part of his share, Davis chose to take an Australian home owned by decedent. The personal representative valued the home as of the date Davis received a receipt from the personal representative acknowledging the transfer and used the exchange rate between the United States and Australian dollar at the date of decedent’s death. The personal representative then filed a petition to allow final account, settle, and distribute the estate. This petition included a description of how the home in Australia was valued and how the exchange rate was determined.

The district court scheduled a hearing on the petition for April 15, 2004. The petition and related documents were mailed to all beneficiaries under the will and the attorney general’s office. The personal representative also sent Davis and the charities a form for consenting to the final account. All signed and returned the consent form. The Minnesota Attorney General’s Office also submitted a letter dated April 1, 2004, stating that it did not object to the petition. ■

During 2003, George Mealey, the decedent’s father and the appellant in this case, began reviewing the distribution of the decedent’s estate. Appellant calculated that Davis gained an advantage of approximately $222,000 because the personal representative used an exchange rate and a valuation date highly favorable to him and approximately $185,000 by the interpretation of a provision in the will related to the elective share. Appellant claims that he communicated to the Minnesota Attorney General’s Office his concern that these determinations by the personal representative were inappropriate and asserts that, as a result of appellant’s action, the personal representative agreed to make all the parties aware of the valuation and exchange-rate issues and to present them to the court. The only evidence of this agreement is a letter on February 27, 2004, from the attorney general’s office confirming an agreement between counsel for the personal representative and the attorney general’s office that these issues would be presented to the beneficiaries and the court.

On April 14, 2004, one day before the scheduled hearing, appellant filed a motion to appear as amicus curiae and to be appointed the personal representative. The motion included information related to the valuation of the Australian home and the nature of the bequest to Davis. At approximately the same time, beneficiaries Fall and Veale, the decedent’s friends receiving $10,000 under the will, objected on the same grounds. At the hearing, the district court considered arguments related to whether appellant should be awarded status as amicus curiae and whether Fall and Veale had standing to object to the petition. The court asked for written submissions from the parties on these issues. Although one of the institutional devisees requested the court to consider appellant’s exchange-rate issue, neither Davis nor any of the institutional beneficiaries objected to the valuation of the house or the exchange rate or withdrew their consents.

The district court concluded that Fall and Veale did not have standing to object to the final accounting because their bequests had been satisfied and that they would not be affected by the controversy. The court also rejected appellant’s motions to be awarded amicus curiae status and to be appointed as special administrator. The district court accepted the final account.

ISSUE

Does appellant have standing to appeal the final accounting of his daughter’s probate estate?

ANALYSIS

The threshold question is whether appellant has standing to object to the final account of the decedent’s estate based on a claim that the administration of the estate wrongfully gave Davis too large a share and the institutional beneficiaries too small a share. “Whether a party has standing is a question of law that appellate courts review de novo.” In re Horton, 668 N.W.2d 208, 212 (Minn.App.2003). Although the question of the appellant’s standing was not considered by the district court, “[t]he question of standing cannot be waived and may be raised at anytime.” Id. “Standing is a requirement that a party has sufficient stake in a justiciable controversy to seek relief from a court.” State by Humphrey v. Philip Morris Inc., 551 N.W.2d 490, 493 (Minn.1996). Any party who is aggrieved can take an appeal of a probate matter. Minn.Stat. § 525.712 (2004). An aggrieved person is “one who has been denied some personal or property right, or upon whom has been imposed some burden or obligation by the order appealed from.” Gabel v. Ferodowill, 254 Minn. 324, 336, 95 N.W.2d 101, 110 (1959). Under the probate code an interested person

includes heirs, devisees, children, spouses, creditors, beneficiaries and any others having a property light in or claim against the estate of a decedent, ward or protected person which may be affected by the proceeding.... The meaning as it relates to particular persons may vary from time to time and must be determined according to the particular purposes of, and matter involved in, any proceeding.

Minn.Stat. § 524.1-201 (2004).

Appellant does not fall within the statutory definition of an “interested party.” He has no financial stake in the accounting under the will because he is not a beneficiary. No legal or other rights of appellant are affected by how the will is administered. Appellant’s claim focuses on his desire to ensure that his daughter’s dona-tive intent is implemented. Appellant also argues that he is an aggrieved party because he was involved with an agreement between the attorney general’s office and the personal representative’s counsel to present issues related to the valuation of the house in Australia. The only evidence of this agreement is the February 27, 2004, letter from the attorney general’s office stating that

This letter is to confirm my agreement with [personal representative’s counsel] that the attorneys for the personal representative will ensure that all of the beneficiaries are made aware of the exchange rate issue. In addition, [personal representative’s counsel] informed me that this issue will be presented to the court and the court will be asked to decide what impact the exchange rate has on the valuation of the Australian property.

Appellant claims that this agreement was breached and that he is an aggrieved party. However, this agreement is clearly stated to be between the attorney general’s office and counsel for the personal representative. Therefore, appellant cannot claim aggrieved status as a result of any purported breach. In addition, even assuming that there was some agreement, it is unclear if the agreement was breached because the exchange-rate issue was detailed in the petition to allow the final account that was distributed to all of the parties and submitted to the court. The attorney general wrote to the court that it did not oppose the relief requested in the petition. The appellant cannot gain standing by trying to assert a right that the attorney general’s office has chosen not to assert. See Wurm v. John Deere Leasing Co., 405 N.W.2d 484, 486 (Minn.App.1987) (stating that a party cannot gain standing by asserting the claim of another person).

Appellant also argues that he has standing under the will because public policy supports administration of estates consistent with the testamentary intention of the decedent. Appellant cites New York case-law in support of this claim. Stortecky v. Mazzone, 85 N.Y.2d 518, 626 N.Y.S.2d 733, 650 N.E.2d 391 (1995); Smithers v. St. Luke’s-Roosevelt Hosp. Ctr., 281 A.D.2d 127, 723 N.Y.S.2d 426 (N.Y.App.Div.2001). Smithers stands for the proposition that the administratrix of an estate can enforce the donative intent of the decedent’s gift. 723 N.Y.S.2d at 434-35. The court in Stortecky held that the probate court may act sua sponte to examine the accounting of an estate. 650 N.E.2d at 394-95. These decisions do not stand for the proposition that an individual with no stake in the distribution under the will may gratuitously intervene to advocate for that individual’s understanding of the decedent’s dona-tive intent. Of course, the district court may sua sponte examine the final account and act to correct an inaccuracy or prevent an impropriety. However, the fact that the district court has this prerogative does not give appellant standing to litigate.

Appellant in this case is essentially trying to step into the shoes of one of the benefited institutions or the attorney general to enforce its interest in the case. However, all of the beneficiaries were notified of the issues. The institutions are sophisticated, had access to legal counsel, had enough at stake to give them an incentive to object if they felt the account was wrong, consented to the final account, did not withdraw their consents, and did not appeal. The Minnesota Attorney General’s Office was fully apprised of appellant’s objections and declined to intervene. If appellant were granted standing to appeal, any person would have standing to appeal, despite not having any right or claim that would be affected by the proceeding. This is inconsistent with Minn.Stat. §§ 524.1-201 and 525.712.

Because appellant is not adversely affected by the decision of the district court, he does not have standing to bring this appeal. Appellant does not seek review of his requests to the district court that he be allowed to appear amicus curia or that he be appointed special personal representative; therefore we do not address them in this appeal. Further, given our determination that appellant does not have standing, we do not reach the merits of appellant’s challenge to the account.

DECISION

Because appellant has no financial stake in or legal or other right affected by the accounting of the will, he is not aggrieved by the decision of the district court and does not have standing to appeal the order allowing the final account.

Affirmed.

      . The will was ambiguous regarding the elective share and the augmented estate.


author: HALBROOKS, Judge.

text:
    Carol E. KAHNKE, Appellant, v. Harvey GREEN, et al., Respondents.
    No. A04-1569.
    Court of Appeals of Minnesota.
    April 26, 2005.

      Kevin P. Hickey, Anne C. Towey, Bass-ford Remele, P.A., Minneapolis, MN; and Jonathan E. Olson, Bloomington, MN, for appellant.
    David A. Schooler, Carrie A. Daniel, Jennifer Daugherty, Larson King, LLP, St. Paul; MN, for respondents.
    Considered and decided by HALBROOKS, Presiding Judge; TOUSSAINT, Chief Judge; and ■ HUDSON, Judge.
   OPINION

HALBROOKS, Judge.

The district court reduced appellant’s jury award pursuant to the collateral-source provisions of Minn.Stat. § 548.36 (2004). The district court included payments made to appellant by her healthcare insurer in its collateral-source reduction, based on its determination that the insurer did not properly assert its subro-gation rights. Because we conclude that the insurer’s subrogation rights were reasonably and timely asserted, we reverse and remand for recalculation of the award.

FACTS

In May 2001, appellant Carol E. Kahnke was involved in an automobile accident with respondents Courtney and Harvey Green. Kahnke’s insurer, Medica, paid medical expenses for Kahnke in the amount of $16,088.16. The case was tried to a jury, which found total damages of $114,874. With’ respect to liability, the jury found Kahnke and Courtney Green each 50% at fault for the accident.

The Greens subsequently filed a motion for determination of collateral sources pursuant to Minn.Stat. § 548.36 (2004). A hearing on. the motion was held on April 27, 2004. The Greens argued that the payments made on Kahnke’s behalf by Medica should be included in the collateral-source computation because Medica failed to properly assert a subrogation claim in a timely manner. Kahnke contended that the subrogation claim was properly asserted and, therefore, Medica’s payments on her behalf should not be included in the calculation of collateral-source payments.

The district court ruled in favor of the Greens, noting that “Medica failed to properly assert its subrogation right.” Accordingly, the district court held that “Kahnke must deduct [from the jury award] the [$16,088.16] already paid by Medica for [her] medical bills.” This appeal follows.

ISSUE

Did the district court err in failing to exclude the payments made by Medica on Kahnke’s behalf from the collateral-source deduction it made to the jury award?

ANALYSIS

Kahnke argues that the district court erred in reducing the amount of the jury award by the amount of Kahnke’s medical bills paid by Medica. Minnesota’s collateral-source statute provides, in pertinent part:

Subd. 2. Motion. In a civil action, whether based on contract or tort, when liability is admitted or is determined by the trier of fact, and when damages include an award to compensate the plaintiff for losses available to the date of the verdict by collateral sources, a party may file a motion within ten days of the date of entry of the verdict requesting determination of collateral sources. If the motion is filed, the parties shall submit written evidence of, and the court shall determine:
(1) amounts of collateral sources that have been paid for the benefit of the plaintiff or are otherwise available to the plaintiff as a result of losses except those for ivhich a subrogation right has been asserted; and
(2) amounts that have been paid, contributed, or forfeited by, or on behalf of, the plaintiff or members of the plaintiffs immediate family for the two-year period immediately before the accrual of the action to secure the right to a collateral source benefit that the plaintiff is receiving as a result of losses.
Subd. 3. Duties of the court, (a) The court shall reduce the award by the amounts determined under subdivision 2, clause (1), and offset any reduction in the award by the amounts determined under subdivision 2, clause (2).

Minn.Stat. § 548.36, subds. 2, 3 (2004) (emphasis added). Where the relevant facts are not in dispute, the application of a statute presents a question of law subject to de novo review. Schmuckler v. Creurer, 585 N.W.2d 425, 427 (Minn.App.1998), review denied (Minn. Dec. 22, 1998).

The Greens contend that the district court correctly included the payments made by Medica in its collateral-source calculation because Medica failed to “timely assert and actually assert its subrogation interest.” The Greens argue that Medica did not “assert” its subrogation interest until May 12, six weeks after the jury returned its verdict, when Medica notified them that it had retained counsel and was pursuing its subrogation rights. They further argue that Kahnke’s “failure to mention any subrogation interest prior to trial and her six-week delay in actually raising Medica’s interest post-verdict compels the conclusion that [Kahnke’s] assertion of subrogation rights was improper and untimely.”

The first question we must answer is whether the statute provides for the timing of the assertion of a subrogation right. There is no question that a collateral-source motion must be brought within ten days following entry of the verdict. Minn.Stat. § 548.36, subd. 2. But the statute is silent on when a right of subrogation must be asserted. Given the lack of specificity in the statute, we conclude that the timing of the assertion of a subrogation right must be reasonable. Cf State ex rel. Laurisch v. Pohl, 214 Minn. 221, 228, 8 N.W.2d 227, 231 (1943) (noting that where a statute specifies no time for a public official to perform a duty, that duty must be performed within a reasonable time). The question then becomes whether Medi-ca reasonably and timely asserted its sub-rogation claim.

In Buck v. Schneider, 413 N.W.2d 569 (Minn.App.1987), we concluded that Minn.Stat. § 548.36 “does not require the subrogation right to be asserted in any particular manner. [The statute] refers to ‘asserted’ subrogation rights, we believe, to ensure that waived subrogation rights are not excepted from collateral source deductions.” Id. at 571 (emphasis in original). Buck, therefore, stands for the proposition that, for the purposes of the collateral-source statute, an asserted sub-rogation right is simply one that has not been waived. The issue thus becomes whether or not Medica waived its right to subrogation.

As the Wisconsin Supreme Court has noted, “[o]ne may waive subrogation explicitly in writing, or one may be held to have waived subrogation by conduct.” Jindra v. Diederich Flooring, 181 Wis.2d 579, 511 N.W.2d 855, 859 (1994). There is no evidence here that' Medica waived sub-rogation in writing. We must therefore consider whether it may be deemed to have waived subrogation by conduct.

The Greens contend that Medica waived its right to subrogation because it did not provide timely notification of that right. The Greens argue that they had no notice of Medica’s subrogation rights until they received a letter from Medica’s counsel “formally asserting it” on May 12, 2004. But in an affidavit dated April 2, 2004, the Greens’ trial counsel notes that “[u]pon information and belief, all of the plaintiffs medical bills which were not paid by her no-fault carrier were paid by Medica.” He further notes that to his knowledge Medica “has never notified me of a right to recover its payments or otherwise asserted a subrogation claim in this matter.” This indicates that the Greens were aware that Medica potentially had a subrogation claim for the payments it made on Kahnke’s behalf. More importantly, the Greens acknowledge that the issue of subrogation was raised at the collateral-source hearing on April 27. In fact, Kahnke’s attorney submitted an affidavit with an attached “notice that [he] received from an agent of Medica, asserting Medica’s subrogation claim.” There is no indication in the record that Medica’s subrogation right was waived at this hearing. In addition, in her memorandum in opposition to the collateral-source motion hearing, dated May 11, Kahnke once again notified the Greens that Medica “asserted that it has a subro-gation right that entitles it to recover its expenditures out of proceeds of [Kahnke] in the present case.”

Where one has “actual knowledge of facts which would put one on further inquiry,” notice may be implied. Anderson v. Graham Inv. Co., 263 N.W.2d 382, 384 (Minn.1978) (emphasis omitted). Here, at least by the time of the collateral-source hearing, the Greens had knowledge of the fact that Medica could assert its subrogation right and that this right had not been expressly waived. Thus, notice may be implied as of April 27, the date of the collateral-source hearing, at the latest.

The Greens suggest that Kahnke’s “failure to mention any subrogation interest prior to trial” renders any subsequent assertion “improper and untimely.” But this issue was addressed in Buck, where this court held that a subrogation claim was properly asserted despite the fact that it was first raised in response to the district court’s collateral-source order. 413 N.W.2d at 571.

The Greens cite Group Health, Inc. v. Heuer, 499 N.W.2d 526, 529 (Minn.App. 1993), for the proposition that, for a subro-gation right to be asserted, “actual notice” of the subrogation interest must be given. In that case, however, the issue was not what constituted asserting a subrogation right for purposes of Minn.Stat. § 548.36 (2004), but whether constructive notice of a subrogation interest was adequate to justify setting aside a settlement because the tortfeasor “willfully disregard[ed]” the subrogation rights of the insurer. Group Health, 499 N.W.2d at 529. The court in Group Health concluded that “[i]n order to find willful disregard of an insurer’s subrogation interest, some intent to deceive or defraud must be present. Thus, the notice must be actual.” Id. (emphasis added). Group Health is, therefore, inap-posite to the question presented here.

Even if actual notice was required, it is difficult to characterize Medica’s as- . sertion of its subrogation right as untimely. Subrogation is an equitable doctrine. Id. at 530. Accordingly, its application is governed by equitable principles. See Commercial Union Ins. Co. v. Minn. Sch. Bd. Ass’n, 600 N.W.2d 475, 478-79 (Minn. App.1999) (noting that “[bjecause subrogation is equitable in origin, even when the right is contractual in nature, the terms of the subrogation are governed by equitable principles, unless the contract explicitly provides otherwise”), review denied (Minn. Dec. 21,1999).

Here, the Greens do not suggest that there has been a violation of a statute of limitations, simply that the assertion is “untimely.” Thus, they appear to be invoking the equitable concept of lach-es. While it is trae that laches may be used to deny a remedy where no statute of limitations exists, O’Mulcahey v. Gragg’s Heirs (In re Gragg’s Estate), 45 Minn. 112, 114-15, 47 N.W. 543, 543-44 (1890), it is generally to be applied only where injustice would otherwise result. Ward v. Sherman, 192 U.S. 168, 176-77, 24 S.Ct. 227, 230, 48 L.Ed. 391 (1904); Aronovitch v. Levy, 238 Minn. 237, 242, 56 N.W.2d 570, 574 (1953).

[L]aches is not, like limitation, a mere matter of time; but principally a question of the inequity of permitting the claim to be enforced, — an inequity founded upon some change in the condition or relations of the property or the parties.
... [Laches may be applied] where a court of equity finds that the position of the parties has so changed that equitable relief cannot be afforded without doing injustice, or that the intervening rights of third persons may be destroyed or seriously impaired....

Ward, 192 U.S. at 177, 24 S.Ct. at 230 (emphasis added) (quotations omitted). Although evidence of prejudice is not “essential” for laches to apply, it is an important consideration in determining the reasonableness of a delay. Aronovitch, 238 Minn, at 242-43, 56 N.W.2d at 574.

The Greens have demonstrated no injustice, inequity, or prejudice that would result from the assertion of Medica’s subro-gation right. On the contrary, excluding the payments made by Medica from the collateral-source reduction actually serves the public policy that the statute seeks to promote. As the supreme court has noted, the collateral-source statute is designed to prevent double recovery by a plaintiff. Imlay v. City of Lake Crystal, 453 N.W.2d 326, 331 (Minn.1990). In Buck, we explained:

It has the apparent purpose of preventing windfalls by plaintiffs at the expense of defendants. The apparent purpose of the subrogation exception is to ensure that the amount of collateral sources deducted from the award is the amount to ivhich the plaintiff is actually entitled, and does not include amounts plaintiff must ultimately pay over to a subrogee.

413 N.W.2d at 572 (emphasis added). Because Medica has asserted its subrogation right, no double recovery will occur.

Here, the letter from Medica’s counsel “formally asserting” Medica’s subrogation right was received by the district court on May 12, well in advance of its ruling on the collateral-source issue. We conclude that such timing is reasonable. Thus, the district court erred in failing to exclude the payments made by Medica from the collateral-source reduction of the jury award.

DECISION

Because Medica’s subrogation claim was asserted in a reasonable and timely manner, the district court erred in failing to exclude the payments made by Medica on Kahnke’s behalf from its collateral-source reduction. We therefore reverse and remand for recalculation of the collateral-source payments.

Reversed and remanded.

      . The jury found that “the reasonable value of medical supplies and hospital and medical expenses” incurred by Kahnke as a result of the accident was $37,274. The district court apparently adopted this amount as the amount paid by Medica on Kahnke’s behalf. See Conclusions of Law and Order dated July 15, 2004 (stating that "Kahnke must deduct the $37,274 already paid by Medica for [Kahnke’s] medical bills”). The Greens acknowledge that the district court’s recitation •in its order of the total amount of Medica's payments is in error and that the correct amount paid by Medica is $16,088.16.

      . The hearing was originally scheduled for April 14, 2004, however, counsel for Kahnke failed to appear. The hearing was rescheduled at the district court’s request, after Kahnke's counsel indicated that he had never received notice of the original hearing.

      . It is instructive to note that the court in Group Health discussed whether a tortfeasor "must have notice of the 'assertion of a subro-gation claim.' ” 499 N.W.2d at 529 (emphasis added). This necessarily implies that the notice is separate from the assertion. As set forth in Group Health, "assertion” of a subro-gation claim may occur before there is any notice. See id. at 529-30 (discussing what type of notice of an asserted subrogation claim is required to find willful disregard).


author: HALBROOKS, Judge. ROBERT H. SCHUMACHER, Judge

text:
    Marcus Robert URBAN, a minor, et al., by and through their parent and natural guardian, Todd Michael URBAN, and Todd Michael Urban, individually, Appellants, v. AMERICAN LEGION POST 184, et al., Defendants, The American Legion Department of Minnesota, Respondent, The American Legion and its Subdivisions, Respondent.
    No. A04-1409.
    Court of Appeals of Minnesota.
    April 26, 2005.

      Leo F. Feeney, Richard L. Gill, Randall M. Tietjen, Robins, Kaplan, Miller & Cire-si, L.L.P., Minneapolis, MN, for appellants.
    William M. Hart, Melissa Dosick Rieth-of, Meagher & Geer, P.L.L.P., Minneapolis, MN, for respondent The American Legion Department of Minnesota.
    Daniel A. Haws, Thomas A. Gilligan, Jr., Murnane, Conlin, White & Brandt, P.A., St. Paul, MN, for respondent The American Legion and its Subdivisions.
    Considered and decided by HALBROOKS, Presiding Judge; SCHUMACHER, Judge; and DIETZEN, Judge.
   OPINION

HALBROOKS, Judge.

Appellant Todd Urban, on behalf of himself and his three minor children, challenges the district court’s award of summary judgment on claims brought under Minnesota’s Civil Damages Act against respondents American Legion and American Legion Department of Minnesota. Appellants also challenge the district court’s issuance of protective orders that ended discovery in this matter. On appeal, American Legion and American Legion Department of Minnesota move to strike portions of the appendix to appellants’ brief. Respondent American Legion Post 184 is not a party in this appeal. Because we conclude that the Civil Damages Act does not provide for a cause of action against American Legion or American Legion Department of Minnesota, we affirm the district court’s summary judgment. Because the district court did not abuse its discretion, we affirm the district court’s issuance of the discovery protective orders. We further grant respondents’ motion to strike portions of appellants’ appendix as outside the record on appeal.

FACTS

Appellant Todd Urban, on behalf of himself and his three minor children, commenced an action against American Legion Post 184 (Post 184) under Minnesota’s Civil Damages Act (the Act). On August 10, 2004, Todd and Barbara Ann Urban and their three children were driving on Highway 52 in Pine Island when their car was hit by a vehicle driven by Orvin Roland. As a result of the accident, Barbara Ann died, one child sustained permanent physical disabilities, and another child suffered permanent brain damage. Appellants allege that Roland was intoxicated at the time of the accident and that Post 184 caused his intoxication by illegally selling alcohol to him. Appellants subsequently brought claims under the Act against American Legion (National) and American Legion Department of Minnesota (Department), contending that these entities are vicariously liable for Post 184’s illegal alcohol sale.

National, Department, and Post 184 are separately incorporated entities. The U.S. Congress chartered National in 1919 and authorized it to establish regional and local organizations. National issued charters to both Department and Post 184. Thereafter, both Department and Post 184 separately incorporated in Minnesota. .

According to the “Officer’s Guide,” which is published by National, the local post “is the combat unit of The American Legion” and “is to a large degree autonomous, restricted only by broad general guidelines carried in the National or Department Constitution and By-Laws.” National promulgates recommendations for forming local posts, conducting ceremonies and post meetings, writing post constitutions and bylaws, and using the American Legion’s name and emblems. In part, materials published by National explain that a local post typically “will be unable to remain solvent if its princip[al] source of income is derived from membership dues.” National lists “operation of club rooms and dining facilities for [the local post’s] members” as one of three sources of possible supplementary sources of income. The “Post Operations Manual” lists a number of standards of operation, including, “If the post’s activity center includes a bar, it should always be closed during post meetings. There is no exception to this flat rule. Keep the bar closed during meetings and, obviously, do not permit beverages of any kind to be served or drunk during the meeting.”

National also provides posts with legal advice. For example, the record shows that National has advised local posts to incorporate to protect individual members from liability in dram-shop litigation. National has also advised local posts for tax purposes to obtain club licenses and to serve alcohol only to members.

National has the power to revoke a local post’s charter. Revocation generally occurs due to low membership or the failure of a post to transmit dues owed to National and Department. Revocation can also occur due to misconduct. In at least one instance, a local post’s charter was can-celled because “[it] was a completely illegal post,” “[b]eing operated as a for[-]profit club,” and had been paying fines imposed by the “State Liquor control [board].” Finally, National has the authority to audit or investigate a post’s membership rosters and financial statements.

According to the affidavit of Lyle Foltz, Department Adjutant, Department provides communication between local posts and National, guidance and leadership, and the administration of programs that local posts may choose to participate in, but “has no day-to-day control over Post 184 or any other post.” According to a letter from Lee P. Harris, Deputy Director, National Public Relations, the “Department Adjutant” is “responsible for the daily business operation of the elements of the organization in the state.”

Post 184, located in Pine Island, has about 270 members. It collects dues from its mémbers and transmits a portion to National and Department as required under its constitution. In addition to collecting dues, Post 184 raises 94% of its revenue through the operation of a private club and alcohol sales. Post 184 uses revenue from the club to satisfy membership dues on behalf of members who are unable to pay.

National and Department filed motions for summary judgment, arguing that the Act does not provide a cause of action against them and requested protective orders to stop discovery. The district court granted the requests for summary judgment, concluding that National and Department could not be sued under the Act because neither is a commercial vendor of alcohol or holder of a liquor license. The district court further concluded that even if National or Department could be sued under the Act, appellants failed to raise a genuine issue of material fact on the theory of vicarious liability and failed to provide notice to those entities as required by the Act. The district court also granted National and Department’s motions for discovery protective orders. Appellants argue that the district court erred because (1) the Civil Damages Act applies to entities that are vicariously liable, (2) genuine issues of material fact exist regarding vicarious liability, (3) appellants complied with the Civil Damages Act’s notice requirement, and (4) the district court abused its discretion by granting a protective order to stop all discovery against National and Department.

ISSUES

I. Did the district court err by granting summary judgment on claims brought under the Act against National and Department?

II. Did the district court abuse its discretion by granting National and Department’s motions for discovery protective orders?

ANALYSIS

I.

A. Appellants challenge the district court’s grant of summary judgment, contending that a claim may be brought under the Act against an entity that is vicariously liable for another entity’s illegal sale of alcohol. The district court concluded that the Act does not provide for a claim against an entity that is not a commercial vendor of alcohol or holder of a liquor license. We agree.

On appeal from summary judgment, appellate courts review the record to determine whether there are any genuine issues of material fact and whether the district court erred in its application of the law. Schulte v. Comer Club Bar, 544 N.W.2d 486, 488 (Minn.1996). When the district court grants summary judgment based on the application of a statute to undisputed facts, the result is a legal conclusion, reviewed de novo by appellate courts. Lefto v. Hoggsbreath Enters., Inc., 581 N.W.2d 855, 856 (Minn.1998). Statutory construction is a question of law, which this court reviews de novo. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 393 (Minn.1998).

The objective of all statutory interpretation is to ascertain and effectuate the intent of the legislature. Minn.Stat. § 645.16 (2004). Pursuant to canons of statutory construction, words and phrases should be construed according to rules of grammar and according to their common and approved usage, unless doing so would be inconsistent with the intent of the legislature. Minn.Stat. § 645.08(1) (2004). In determining legislative intent, we presume that the legislature acts with full knowledge of existing caselaw. Minneapolis E. Ry. v. City of Minneapolis, 247 Minn. 413, 418, 77 N.W.2d 425, 428 (1956).

The Act provides a cause of action against “a person who caused the [tortfea-sor’s] intoxication ... by illegally selling alcoholic beverages.” Minn.Stat. § 340A.801, subd. 1 (2004). Prior to the Act, there was no liability at common law for injuries caused by illegal sale of alcohol. Koehnen v. Dufuor, 590 N.W.2d 107, 109 (Minn.1999). Because the Act is a statutory creation, enacted in derogation of the common law, it must be strictly construed. Whitener v. Dahl, 625 N.W.2d 827, 833 (Minn.2001).

In determining whether a claim under the Act could be brought against a social host of a party, the Minnesota Supreme Court has held that liability under the Act only applies to persons “in the business of providing liquor, and not a social host.” Cady v. Coleman, 315 N.W.2d 593, 596 (Minn.1982). Seventeen years later, in another case involving a social host, the supreme court noted that since Cady the legislature had recodified the Act and “left untouched the sweeping holding of ... Cady that only persons in the business of providing liquor are covered by the Act.” Koehnen, 590 N.W.2d at 111. The supreme court further noted:

This court’s holding in Cady in 1982 clearly and unequivocally limited application of the Act to commercial vendors, and despite a recodification of the Act in 1984, a restatement in 1985 and an additional amendment in 1990, the Cady 'holding remains unchanged. Fundamental logic leads to the undeniable conclusion that Cady expresses the will of the legislature and legislative rules of construction so provide.

Id. at 112.

We conclude that, based on legislative intent as previously determined by the Minnesota Supreme Court in Koehnen, the Act' provides for a cause of action only against persons who are in the business of providing liquor. This comports with our rule that statutes in derogation of the common law shall be strictly construed. Additionally, this conclusion is consistent with the plain language of the statute, which proiddes for a cause of action against persons that cause the tortfeasor’s intoxication by “illegally selling alcoholic beverages.”

It is undisputed that National, Department, and Post 184 are separately incorporated entities. Additionally, it is undisputed that neither National nor Department is the holder of any license that allows it to sell liquor in Minnesota and neither owns a private club or bar in the state. In contrast, Post 184 is in the business of selling alcohol — it manages a private club and is the holder of a club license that, under Minn.Stat. § 340A.404, subd. 1(4) (2004), allows it to sell liquor to club members.

Because neither National or Department is in the business of providing liquor, the Act does not provide for a cause of action against either entity. Therefore, the district court did not err in granting National arid Department’s motions for summary judgment.

B. As an alternative argument, appellants contend that even though neither National nor Department is the holder of a liquor license or owner of a private club or bar — and thus not directly in the business of providing liquor — a claim against both parties may be brought under the Act because National and Department are vicariously liable for Post 184’s illegal alcohol sale. The district court concluded that even if a claim may be brought under the Act against an entity that is not in the business of providing liquor but that is nevertheless vicariously liable for an entity in that business, appellants failed to raise a genuine issue of material fact on the essential elements necessary for a finding of vicarious liability. Appellants contend that genuine issues of material fact exist regarding whether National and Department have a relationship with Post 184 that gives rise to vicarious liability on two theories: (1) respondeat superior and (2) alter ego. Before the district court, appellants also argued vicarious liability on the theories of joint venture and joint enterprise, but they have not raised those theories on appeal.

First, appellants argue that genuine issues of material fact exist regarding National and Department’s liability for the acts of Post 184 under the doctrine of respondeat superior. Vicarious liability may be imposed when a master-servant or principal-agent relationship exists between the tortfeasor and a third party. Nadeau v. Melin, 260 Minn. 369, 376, 110 N.W.2d 29, 34 (1961). A principal-agent relationship results “from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other to so act.” Restatement (Second) of Agency § 1 (2004); see also Plate v. St. Mary’s Help of Christians Church, 520 N.W.2d 17, 20 (Minn.App.1994) (noting Minnesota courts have adopted the Restatement definition of agency), review denied (Minn. Oct. 14, 1994). A master in a master-servant relationship is one who “employs an agent to perform service in his affairs and who controls or has the right to control the physical conduct of the other in the performance of the service.” Restatement (Second) of Agency § 2 (2004).

The right to control — and not necessarily the exercise of that right— gives rise to the vicarious liability of a principal or master for the tortious act of his or her agent. Frankie v. Twedt, 234 Minn. 42, 47, 47 N.W.2d 482, 487 (1951). “The determinative right of control is not merely over what is to be done, but primarily over how it is to be done.” Id. As such, “[d]etailed authoritative control must be distinguished from mere designation of work.” Nepstad v. Lambert, 235 Minn. 1, 14, 50 N.W.2d 614, 622 (1951). For example, employees are differentiated from independent contractors because although both contract to do something for the principal, independent contractors are “not subject to any control or right of control with respect to their physical conduct in carrying out the undertaking.” Frankie, 234 Minn, at 47-48, 47 N.W.2d at 487. As such, principals are generally not vicariously liable for the acts of independent contractors. Id.

The record establishes that National has the power to cancel Post 184’s charter for lack of membership, failure to pay dues, or “misconduct.” National may require an audit of Post 184’s financial affairs, including the financial affairs of Post 184’s private club. National also promulgates recommendations for local posts regarding how to run meetings, the use of emblems, and the writing of constitutions and bylaws, and provides legal advice to local posts.

With regard to the relationship between Department and Post 184, the “Department Adjutant” is “responsible for the daily business operation of the elements of the organization in the state.” According to the affidavit of Lyle Foltz, Minnesota’s Department Adjutant, he provides communication between local posts and National, guidance and leadership, and the administration of programs that local posts may choose to participate in. But Department “has no day-to-day control over Post 184 or any other post.”

Considering the evidence in the light most favorable to appellants, there is no genuine issue of material fact on the element of control, which is essential to proving that either National or Department is vicariously liable for the acts of Post 184. The record does not show that National has a right to control the physical undertakings of Post 184’s daily activities. At most, the record shows that National has some power over what Post 184 does, but not over how it does it.

With regard to Department, it could be argued that at least one description of the role of Department Adjudicate suggests the power to control the daily activities of Post 184. But Foltz’s affidavit suggests otherwise. To defeat a motion for summary judgment, a plaintiff must produce sufficient evidence to show a genuine issue of material fact as to each element of the claim. Rouse v. Dunkley & Bennett, P.A., 520 N.W.2d 406, 410-11 (Minn.1994). A mere “scintilla of evidence” that may support the non-moving party’s position is not sufficient. Bondy v. Allen, 635 N.W.2d 244, 248 (Minn.App.2001) (quotation omitted).

Second, appellants argue that genuine issues of material fact exist regarding National and Department’s liability for the acts of Post 184 under the doctrine of alter ego. Generally, a parent corporation cannot be held liable for the wrongdoing of a subsidiary without a showing of improper conduct, fraud, or bad faith. Assoc. of Mill & Elevator Mut. Ins. Co. v. Barzen Int’l, 553 N.W.2d 446, 449 (Minn.App.1996), review denied (Minn. Nov. 20, 1996). For purposes of disregarding the corporate structure to hold one corporation liable for another’s wrongdoing, this court has adopted a two-part test for piercing the corporate veil, established in Victoria Elevator Co. v. Meriden Grain Co., 283 N.W.2d 509 (Minn.1979). Barzen, 553 N.W.2d at 449.

The first prong of the test requires that “a number of’ the following factors must exist to hold a parent corporation liable for the wrongdoing of a subsidiary: (1) insufficient capitalization, (2) failure to observe corporate formalities, (3) nonpayment of dividends, (4) insolvency of debtor corporation, (5) siphoning of funds, (6) nonfunctioning of officers and directors, (7) absence of corporate records, or (8) existence of corporation as a merely fagade for individual dealings. Barzen, 553 N.W.2d at 449-50 (citing Victoria Elevartor, 283 N.W.2d at 512).

Appellants contend that this prong has been met because the existence of local posts is merely a fagade for the dealings of National and Department. But appellants have not supported this assertion with a showing that Post 184 and National or Department commingle their finances or that National or Department improperly raid or use the funds of Post 184. Cf. Chergosky v. Crosstown Bell, Inc., 454 N.W.2d 654, 658 (Minn.App.1990) (piercing corporate veil when shareholder did not maintain a separate corporate checking account and placed all corporate funds in his personal checking account), review denied (Minn. June 15, 1990). Additionally, appellants have not provided evidence of insufficient capitalization, failure to observe corporate formalities, insolvency, nonfunc-tioning of officers and directors, or the absence of corporate records. Cf. Barzen, 553 N.W.2d at 449-50 (concluding that a parent corporation could not be held liable for a subsidiary where the subsidiary was sufficiently capitalized, observed corporate formalities, and kept its own corporate records).

The second prong of the two-part test requires a finding of injustice or fundamental unfairness. Barzen, 553 N.W.2d at 450 (citing Victoria Elevator, 283 N.W.2d at 512). “Doing business in a corporate form in order to limit individual liability is not wrong; it is, in fact, one purpose for incorporating.” Victoria Elevator, 283 N.W.2d at 512. It is in circumstances where the “formalities of corporate existence are disregarded by one seeking to use it” that the corporate existence cannot be allowed to shield the individual from liability. Id.

Appellants contend that National and Department should be liable for the wrongdoing of local posts because (1) bar operations are necessary for the financial solvency of the entire operation, (2) National and Department encourage local posts to operate bars, and (3) both organizations have the power to exercise control over posts’ bar operations. Appellants argue that since National and Department receive the financial benefit of the bar operations it would be unjust to allow them to escape liability that arises from them. We disagree.

Although appellants have shown that Post 184, Department, and National have a relationship where the financial stability of one entity is related to the financial stability of others, they have not shown that these entities have disregarded the formalities of being separately incorporated. As such, they should not be denied the benefit of limiting individual liability by doing business as separately incorporated entities. To defeat summary judgment, appellants needed to raise a genuine issue of material fact on both elements of the alter-ego claim, but failed to do so. Because the district court did not err in awarding summary judgment, we do not reach the issue of whether appellants were required under the Act to give notice to either National or Department.

II.

Appellants argue that the district court abused its discretion when it granted National and Department protective orders, which effectively stayed discovery until after the motions for summary judgment were decided. Absent a clear abuse of discretion, a district court’s decision regarding discovery, including granting protective orders, will not be disturbed by a reviewing court. WDSI, Inc. v. County of Steele, 672 N.W.2d 617, 622 (Minn.App.2003).

At the time the protective orders were issued, there was ample evidence in the record for the district court to properly analyze respondents’ motions for summary judgment, and the district court had already held a hearing on the motions. Disallowing further discovery, which could have been unnecessary and intrusive, depending on the district court’s summary-judgment rulings, did not amount to an abuse of the district court’s discretion. See Minn. R. Civ. P. 26.03 (stating that “[u]pon motion by a party or by the person from whom discovery is sought, and for good cause shown, the court ... may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense”).

DECISION

Because the Act gives rise to a cause of action in derogation of the common law it must be strictly construed, providing for claims only against persons who are in the business of providing liquor, the district court did not err in awarding summary judgment to National and Department. Further, appellants did not raise a genuine issue of material fact concerning the elements necessary to support the theory of vicarious liability. Finally, we conclude that the district court did not abuse its discretion by issuing discovery protective orders.

Affirmed; motion granted.

ROBERT H. SCHUMACHER, Judge

(dissenting).

I respectfully dissent. I believe (1) Minnesota’s Civil Damages Act (the Act) provides for a cause of action against National or Department, (2) appellants raised genuine issues of material fact on the issue of vicarious liability, and (3) appellants complied with the Act’s notice requirement.

1. The district court concluded, as does the majority opinion, that the Act does not provide for a cause of action against National or Department because neither is in the business of selling liquor. But the cases cited in support of this position, including Koehnen v. Dufuor, 590 N.W.2d 107, 109 (Minn.1999), are clearly distinguishable as those eases deal with the issue of social hosts, not the issue of vicarious liability.

Vicarious liability describes a relationship wherein liability is imputed to a principal for the tortious conduct of its agent. See Nadeau v. Melin, 260 Minn. 369, 376-77, 110 N.W.2d 29, 34-35 (1961) (describing imputed liability as arising from relationship between master and servant or principal and agent). In the context of the Act, vicarious liability directs attention to all parties that “caused the intoxication,” including the agent and the principal to whom liability is imputed. See Minn.Stat. § 340A.801, subd. 1 (2004) (providing cause of action “against a person who caused the intoxication ... by illegally selling alcoholic beverages”). A party who is not “directly” in the business of providing liquor, but whose agent is in such a business on the principal’s behalf, falls within the Act’s meaning. See In re Estate of Kroyer, 385 N.W.2d 31, 33 (Minn.App. 1986) (explaining courts presume consistency with common law; a statute is not to be construed in derogation of well-established principles of common-law unless expressly required) (citing Swogger v. Taylor, 243 Minn. 458, 465, 68 N.W.2d 376, 382 (1955)).

Additionally, as much as the Act is an abrogation of common law, it is also a remedial statute and should be given liberal construction to accomplish its purpose. Beck v. Groe, 245 Minn. 28, 34, 70 N.W.2d 886, 891 (1955). The purpose of the Act is to suppress social ills that result from intoxication by providing incentive for those that profit from providing liquor to do everything in their power to avoid making illegal sales. Hollerich v. City of Good Thunder, 340 N.W.2d 665, 668 (Minn.1983); Carlson v. Thompson, 615 N.W.2d 387, 389 (Minn.App.2000), review denied (Minn. Oct. 17, 2000). This purpose is clearly defeated by allowing an organization to proceed with carefree liquor sales by holding significant assets in a separately incorporated entity, one that is not “directly” providing liquor but nevertheless profits from such provisions.

The district court’s order should be reversed since it misconstrues the Act’s meaning and fails to suppress its intended mischief. I note that under a similar act, Michigan’s courts have arrived at the same conclusion. See Kerry v. Turnage, 154 Mich.App. 275, 397 N.W.2d 543, 545, (1986) (holding school district could be held vicariously liable for actions of athletic booster organization, which was district’s agent and illegally sold liquor), review denied (Mich. Jan. 27, 2987).

2. The existence of an agency relationship is a question of fact, PMH Props, v. Nichols, 263 N.W.2d 799, 802 (Minn.1978), and should be decided by the jury unless the evidence is conclusive. Duluth Superior Erection, Inc. v. Concrete Restorers, Inc., 665 N.W.2d 528, 534 (Minn.App.2003). Two elements must be satisfied to support a finding of an agency relationship, including a manifestation by the principal that an agent act for the principal and the right of control by the principal over the agent. Teeman v. Jurek, 312 Minn. 292, 299, 251 N.W.2d 698, 702 (1977). The majority concluded that appellants failed to raise a genuine issue of material fact on the second element. I disagree.

The record reveals that National has the power to cancel a post’s charter for misconduct. In at least one instance, a charter was cancelled in part due to a post’s illegal sale of liquor. National also promulgates rules regulating posts’ management of bar operations. According to the Post Operations Manual, “If the post’s activity center includes a bar, it should always be closed during post meetings. There is no exception to this flat rule.” As for Department, the record shows the Department Adjutant is “responsible for the daily business operation of the elements of the organization in the state.”

Taken in the light most favorable to appellants, this record demonstrates that both National and Department have the right to control the daily operation of Post 184’s private club and liquor sales. Such a right gives rise to the vicarious liability of National and Department for the tortious acts of Post 184. See Frankie v. Twedt, 234 Minn. 42, 45-47, 47 N.W.2d 482, 486-87 (Minn.1951) (stating right to control gives rise to vicarious liability). The district court erred in determining that appellants failed to raise a genuine issue of material fact on the issue of vicarious liability.

3. Minn.Stat. § 340A.802, subds. 1, 2 (2004), requires that persons claiming damages “from a licensed retailer of alcoholic beverages or municipal liquor store ... give written notice to the licensee or municipality” within 240 days of the date of entering an attorney-client relationship. The district court concluded a claim under the Act against National or Department was precluded by appellants’ failure to give the required notice to these parties. The majority opinion does not reach this issue.

It is undisputed that appellants did not notify either National or Department of their claim within the 240-day time period, although notice was given to Post 184. But it is also undisputed that neither National nor Department is a licensed retailer or municipal liquor store. The statute’s plain language only requires that licensed retailers and municipal liquor stores receive the required notice; the Act does not require that notice be given to all potential defendants. See Olson v. Blaeser, 458 N.W.2d 113, 119 (Minn.App.1990) (recognizing Act does not require notice be given to all potential defendants).

Summary judgment in this matter was premature. Appellants should be allowed to proceed with their claims against National and Department.

      . National and Department moved to strike two depositions and an affidavit included in the appendix to appellants’ brief. The contested documents were filed with the district court after the May 7, 2004 hearing on summary judgment. There is no indication from the district court that it considered these documents in making its summary-judgment determination. We have limited our review to the papers actually considered by the district court in malting its summary-judgment determination. See Cressy v. Grassmann, 536 N.W.2d 39, 43 (Minn.App.1995) (stating that the court "will grant a motion to strike material submitted in a party’s appendix when that material did not come before the trial court"), review denied (Minn. Sept. 28, 1995). The motion to strike is granted.


author: MARING, Justice.

text:
    2005 ND 76
    Daryl Jerome MAY, Petitioner and Appellant v. David A. SPRYNCZYNATYK, Director, Department of Transportation, Respondent and Appellee.
    No. 20040232.
    Supreme Court of North Dakota.
    April 11, 2005.

      Mark A. Friese (argued), and Bruce D. Quick (on brief), Vogel Law Firm, Fargo, ND, for petitioner and appellant.
    Douglas B. Anderson, Assistant Attorney General, Bismarck, ND, for respondent and appellee.
   MARING, Justice.

[¶ 1] Daryl May has appealed from a district court judgment affirming a hearing officer’s decision to suspend May’s driver’s license for two years. We affirm, concluding that the failure of the Department of Transportation (“the Department”) to file a transcript of the administrative hearing within twenty days did not require summary reversal of the hearing officer’s decision and that May failed to raise a proper objection to admission of the Intoxilyzer test results.

I

[¶ 2] In the early morning hours of March 6, 2004, a Fargo police officer noticed May’s vehicle being driven in an erratic manner. Upon stopping the vehicle, the officer noticed that May’s eyes were watery and there was a strong odor of alcoholic beverages. May failed field sobriety tests and was arrested for driving under the influence. He was taken to the Cass County Jail, where an Intoxilyzer test showed a blood alcohol concentration of .19 percent.

[¶ 3] May requested an administrative hearing, which was held on March 31, 2004. The hearing officer determined the stop of May’s vehicle was justified and the Intoxilyzer test had been fairly administered in accordance with the State Toxicologist’s approved method. The hearing officer ordered that May’s license be suspended for two years. May appealed to the district court, which affirmed the decision of the hearing officer.

II

[¶ 4] Judicial review of a decision to suspend a driver’s license is governed by the Administrative Agencies Practice Act, N.D.C.C. ch. 28-32. Larsen v. North Dakota Dep’t of Transp., 2005 ND 51, ¶ 4, 693 N.W.2d 39; Kiecker v. North Dakota Dep’t of Transp., 2005 ND 23, ¶7, 691 N.W.2d 266. Under N.D.C.C. § 28-32-46, the district court must affirm an order of an administrative agency unless it finds any of the following are present:

1. The order is not in accordance with the law.
2. The order is in violation of the constitutional rights of the appellant.
3. The provisions of this chapter have not been complied with in the proceedings before the agency.
4. The rules or procedure of the agency have not afforded the appellant a fair hearing.
5. The findings of fact made by the agency are not supported by a preponderance of the evidence.
6. The conclusions of law and order of the agency are not supported by its findings of fact.
7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.
8. The conclusions of law and order of the agency do not sufficiently explain the agency’s rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

On an appeal from a district court’s ruling on an administrative appeal, this Court reviews the agency order in the same manner. N.D.C.C. § 28-32-49; Larsen, at ¶ 4; Ringsaker v. Workforce Safety & Ins. Fund, 2005 ND 44, ¶9, 693 N.W.2d 14.

[¶ 5] This Court exercises a limited review in appeals involving driver’s license suspensions and revocations. Aamodt v. North Dakota Dep’t of Transp., 2004 ND 134, ¶ 12, 682 N.W.2d 308; Wetsch v. North Dakota Dep’t of Transp., 2004 ND 93, ¶ 10, 679 N.W.2d 282. We review the decision of the administrative agency, not the decision of the district court, and our review is limited to the record compiled before the agency. Kiecker, 2005 ND 23, ¶ 8, 691 N.W.2d 266; Wetsch, at ¶ 9. In reviewing an administrative agency’s factual findings, we do not substitute our judgment for that of the agency or make independent findings of fact, but defer to the hearing officer’s opportunity to judge the credibility of the witnesses. Kiecker, at ¶ 8; Aamodt, at ¶ 12. We determine only whether a reasoning mind reasonably could have determined that the factual findings were proved by the weight of the evidence from the entire record. Kiecker, at ¶ 8; Aam-odt, at ¶ 12. Questions of law are fully renewable on appeal. Kiecker, at ¶ 8.

Ill

[¶ 6] May contends that summary reversal of his license suspension is mandated because the Department failed to file a transcript of the administrative proceedings within twenty days of receipt of his notice of appeal.

[¶ 7] Section 39-20-06, N.D.C.C., governs judicial review of a decision to suspend, revoke, or deny a driver’s license, and requires the driver to serve and file a notice of appeal and specifications of error within seven days after the date of the hearing. The statute further provides:

Within twenty days after receipt of the notice of appeal, the director or the hearing officer who rendered the decision shall file in the office of the clerk of court to which the appeal is taken a certified transcript of the testimony and all other proceedings.

[¶ 8] May’s administrative hearing was held on March 31, 2004. May’s notice of appeal and specifications of error were mailed to the Department on April 5, 2004, and filed with the district court on April 6, 2004. The Department mailed the transcript of the administrative hearing on April 29, 2004, and it was filed in the office of the clerk of district court on April 30, 2004. May argues that, even allowing three days for service by mail under N.D.R.Civ.P. 6(e)(1), the Department was required to file the transcript with the district court by April 28, 2004. The Department does not dispute that the transcript was filed a few days late.

A

[¶9] May contends that, the. Department's failure to strictly comply with the requirements of N.D.C.C. § 39-20-06 automatically mandates summary reversal of the decision suspending his license. The Department argues that timely filing of the transcript is not jurisdictional, and reversal is appropriate only if. May shows he was prejudiced by the filing of the transcript a few days late. Resolution of this issue requires consideration of this Court’s decisions in Rudolph v. North Dakota Dep’t of Transp. Dir., 539 N.W.2d 63 (N.D. 1995), and Dettler v. Sprynczynatyk, 2004 ND 54, 676 N.W.2d 799.

[¶ 10] In Rudolph, the Department filed the transcript within twenty days as required by N.D.C.C. § 39-20-06. Nearly two months later the parties discovered that four pages had been omitted from the transcript. The Department supplemented the transcript with the omitted pages, and the district court granted Rudolph’s motion for a fifte'eh-day extension to the briefing schedule to allow him to address the new material.

[¶ 11] On appeal to this Court, Rudolph argued the untimely filing of the complete transcript was jurisdictional and mandated reversal of the decision suspending his license. The Department argued the twenty-day requirement is not jurisdictional and Rudolph had “suffered no prejudice from the slight delay caused by the ‘clerical’ error.” Rudolph, 539 N.W.2d at 66. This Court agreed with the Department, concluding that the twenty-day requirement was not jurisdictional and that the appropriate remedy for a failure to file a complete transcript of the administrative hearing is a remand until the transcript is provided, not dismissal of the action. Id. at 67.

[¶ 12] In Dettler, this Court addressed a driver’s failure to serve and file sufficiently particular specifications of error as required by N.D.C.C. § 39-20-06. Dettler had timely filed specifications of error, but the Department argued the specifications were not particular enough to identify the unlawful seizure and procedural issues Dettler- attempted to raise on appeal. We concluded that Dettler’s specifications of error were not particular enough to adequately preserve those issues for appeal, making it unnecessary to address those issues on the merits. Dettler, 2004 ND 54, ¶¶ 17, 21, 676 N.W.2d 799.

[¶ 13] May argues that Dettler requires strict compliance with all provisions of N.D.C.C. § 39-20-06, and failure of the Department to comply with any of the statute’s requirements automatically mandates summary reversal of the decision suspending his license. He further argues that the holding in Rudolph is inapplicable because this Court’s subsequent decision in Dettler now requires strict compliance with all provisions of N.D.C.C. § 39-20-06, including the requirement that the Department file the transcript of the hearing within twenty days.

[¶ 14] May has misread our holding in Dettler. We did not say that summary reversal was required if a party failed to strictly comply with all of the requirements in N.D.C.C. § 39-20-06. In Dettler we held only that we would decline to address on appeal issues and arguments which had not been adequately identified in the specifications of error. The result in Dettler is analogous to the rule that issues which have not been adequately preserved below will be considered waived and will not be addressed on appeal. See, e.g., State v. Lee, 2004 ND 176, ¶¶ 9-10, 687 N.W.2d 237; State v. Causer, 2004 ND 75, ¶ 16, 678 N.W.2d 552. May’s suggestion that Dettler requires summary reversal for failure to strictly comply with N.D.C.C. § 39-20-06 is also inconsistent with the fact that we went on in Dettler to address other issues which had been adequately identified in the specifications of error. See Dettler, 2004 ND 54, ¶¶ 22-24, 676 N.W.2d 799.

[¶ 15] We conclude that Dettler does not require automatic summary dismissal of a decision suspending a driver’s license when the Department fails to file the transcript within the twenty-day period. Under Rudolph, the twenty-day filing period is not jurisdictional. Because May has failed to allege or prove prejudice caused by the two-day delay in filing the transcript, we conclude the Department’s failure to file the transcript within twenty days does not mandate reversal of the decision suspending May’s license.

B

[¶ 16] May argues that, even if he was not prejudiced by the Department’s delay in filing the transcript, reversal may still be warranted if the Department’s conduct constituted a systemic disregard of the law. May contends the district court should have granted his request to conduct discovery to determine whether the Department was systematically failing to comply with the twenty-day deadline under N.D.C.C. § 39-20-06.

[f 17] When a governmental agency systemically disregards the requirements of the law, a court may reverse a decision in favor of the government to prophylactically ensure that the government acts consistently and predictably in accordance with the law. Kouba v. State, 2004 ND 186, ¶ 14, 687 N.W.2d 466; Kraft v. State Bd. of Nursing, 2001 ND 131, ¶ 48, 631 N.W.2d 572; Greenwood v. Moore, 545 N.W.2d 790, 793 (N.D.1996). To establish systemic disregard, a party must demonstrate some persistent pattern of improper agency conduct, and more than a single miscue by the government is required to evidence institutional noncompliance which amounts to systemic disregard of the law. Kraft, at ¶ 48; Greenwood, at 793. Reversal for conduct which is merely potentially prejudicial, without a showing of actual prejudice, may be warranted as a sanction for institutional noncompliance and systemic disregard of the law if the conduct is commonplace. City of Grand Forks v. Ramstad, 2003 ND 41, ¶29, 658 N.W.2d 731.

[¶ 18] The record in this case does not establish a persistent pattern of improper conduct by the Department, but merely a single violation. May argues, however, that the district court erred in denying his request to conduct discovery to seek evidence of additional instances where the Department failed to timely file the transcript of the administrative hearing. In support of his request, May averred in his brief that he was aware of one other instance where the Department had failed to file a transcript within twenty days of the hearing.

[¶ 19] Discovery decisions are addressed to the trial court’s discretion and will not be reversed on appeal absent an abuse of discretion. Fast v. Mayer, 2005 ND 37, ¶ 14, 692 N.W.2d 138; Dixon v. McKenzie County Grazing Ass’n, 2004 ND 40, ¶ 35, 675 N.W.2d 414. A court abuses its discretion only when it acts in an arbitrary, unreasonable, or unconscionable manner, or when its decision is not the product of a rational mental process. Fast, at ¶ 14. Under the circumstances presented in this case, we conclude the district court did not abuse its discretion in denying May’s request for leave to conduct discovery.

IV

[¶ 20] May contends the hearing officer erred in admitting into evidence the Intox-ilyzer test results. May claims there was a lack of foundation for admission of the test results because the Department failed to establish the chemical test was fairly administered. May bases his claim of lack of foundation on his assertions that there was a facial irregularity on the printed test record and that the Department failed to establish compliance with the State Toxicologist’s approved method because it did not show the standard solution was less than 45 days old and had been used fewer than 50 times.

A

[¶ 21] During administration of the In-toxilyzer test, the certified chemical test operator types in information on an attached keyboard. The Intoxilyzer will at times prompt the operator for a response. In response to one of these prompts, the operator in this case apparently typed “N” rather than “Y” when asked whether the standard solution test had been performed. The printed Intoxilyzer test report shows that the operator responded “N” to this prompt. May now argues there was insufficient foundation to admit the test results because of this facial irregularity.

[¶ 22] The Department argues that May failed to properly object to admission of this evidence and therefore waived any objection he had to its admission. When the printed Intoxilyzer test results, denominated Exhibit 1C, and several other documents were offered into evidence, the hearing officer asked May’s counsel if there were any objections. May’s counsel replied:

I objection [sic] to 1A, B, C second page of 1C. No objection to ID, which apparently consists of two pages. Object to Exhibit IE, and I’ll lay the foundation for those objections through cross-examination. No objection to Exhibit 3, 4, 6, 7, 8, 10. I object to Exhibit 12 on relevance.

A few moments later, during cross-examination of the arresting officer, May’s counsel questioned whether a certification page for one of the exhibits was a photocopy and whether the signature was made with a stamp rather than an original signature. May’s counsel then stated:

I will reserve my objections. I will have certification objections. I don’t think that they’re going to be this dispositive, if I can address them in closing?

[¶ 23] May’s counsel did not make a specific objection to lack of foundation for admission of the Intoxilyzer test result. Nor did May’s counsel, during cross-examination of any of the witnesses, ask about the “N” appearing on the Intoxilyzer test results. Counsel waited until the parties had rested and the evidentiary stage of the hearing had been closed before he first raised the issue of the “N” on the Intoxi-lyzer test result during closing arguments. At that point, counsel argued that the “N” was a facial ambiguity which was contrary to the approved method, and therefoi'e there was no showing of fair administration of the chemical test.

[¶ 24] The admissibility of evidence at an adjudicative hearing before an administrative agency is governed by the North Dakota Rules of Evidence, unless application of the Rules is expressly waived by the hearing officer. N.D.C.C. § 28-32-24(1); Roberts v. North Dakota Dep’t of Human Servs., 2005 ND 50, ¶ 9, 692 N.W.2d 922; Madison v. North Dakota Dep’t of Transp., 503 N.W.2d 243, 246 (N.D.1993). A hearing officer is afforded broad discretion to control the admission of evidence at the hearing, and the decision to admit or exclude evidence •will only be reversed on appeal if the hearing officer abused his discretion. Roberts, at ¶ 9; Knudson v. Director, North Dakota Dep’t of Transp., 530 N.W.2d 313, 316-17 (N.D. 1995).

[¶ 25] Rule 103(a)(1), N.D.R.Ev., requires a party to make a specific objection to proffered evidence:

(a) Effect of Erroneous Ruling. Error may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected, and
(1) Objection. In case the ruling is one admitting evidence, a timely objection or motion to strike appears of record, stating the specific ground of objection, if the specific ground was not apparent from the context ....

In applying N.D.R.Ev. 103(a)(1), this Court has cautioned:

A touchstone for an effective appeal on any proper issue is that the matter was appropriately raised in the trial court, so the trial court could intelligently rule on it.... A party must object at the time the alleged error occurs, so the trial court may take appropriate action if possible to remedy any prejudice that may have resulted. Failure to object acts as a waiver of the claim of error.

State v. Hayek, 2004 ND 211, ¶ 9, 689 N.W.2d 422 (quoting State v. Bell, 2002 ND 130, ¶ 9, 649 N.W.2d 243) (citations omitted); see also State v. Lee, 2004 ND 176, ¶¶ 9-10, 687 N.W.2d 237; State v. Causer, 2004 ND 75, ¶ 16, 678 N.W.2d 552.

[¶ 26] A party must make a specific objection to evidence at the time it is offered for admission into evidence to give the opposing party an opportunity to argue the objection and attempt to cure the defective foundation, and to give the trial court an opportunity to fully understand the objection and appropriately rule on it. See Hayek, at ¶ 10; Lee, at ¶ 10; Western Nat’l Mut. Ins. Co. v. University of North Dakota, 2002 ND 63, ¶¶ 39-40, 643 N.W.2d 4; State v. Helgeson, 303 N.W.2d 342, 346 (N.D.1981); see also State v. Long, 98 Hawaii 348, 48 P.3d 595, 598-600 (2002) (citing numerous cases from other jurisdictions). A general objection of “lack of foundation” is not sufficient to specifically raise issues which are not apparent from the context. N.D.R.Ev. 103(a)(1); Western Nat’l, at ¶ 40; Long, at 600. As noted in Long, at 600, a general “lack of foundation objection” is “insufficient to preserve foundational issues for appeal because such an objection does not advise the trial court of the problems with the foundation.” In Helgeson, at 346, this Court commented on the requirement in N.D.R.Ev. 103(a)(1) that a party state the specific ground of objection:

The rule does not state the precise form which objections to evidence should take. However, at a minimum, the objection should give the opponent the basis of what is objectionable and bring the matter to the trial court’s attention so that the court can rule on the same. These requirements are not met when counsel merely objects to evidence as being immaterial or prejudicial and does not apprise the court of the constitutional nature of the objection to the evidence.

Accordingly, a party objecting to evidence on the basis of lack of foundation must advise the court and the opposing party precisely what foundation is lacking.

[¶ 27] May did not, at the time the Intoxilyzer test results were offered, raise even a general objection of lack of foundation, let alone a specific objection based upon the challenged “N” appearing on the exhibit. Nor did May raise the issue of the operator keying in “N” during cross-examination of the only two witnesses who testified, the arresting officer and the officer who administered the In-toxilyzer test. The only remotely specific objection May raised to the proffered exhibits was a challenge to the certification of the documents. By withholding his argument based upon the “N” on the printed Intoxilyzer test results until closing arguments, May effectively deprived the Department of the opportunity to remedy any alleged defect in foundation for the exhibit.

[¶ 28] May, relying upon Tabert v. North Dakota Dep’t of Transp., 1997 ND 39, 560 N.W.2d 883, contends a general objection to admission of the chemical test results is sufficient unless the hearing officer expressly requests further specification of the objection. Tabert is clearly distinguishable. The objections raised by Ta-bert were far more detailed than the ones in this case, specifically referring to foundation, relevancy, and hearsay. By contrast, May did not even indicate he was objecting to foundation. His objection was nothing more than a general objection without stating any specific grounds.

[¶ 29] This Court concluded Tabert’s objections were specific enough to preserve those issues and he was not required to elaborate on them when asked by the hearing officer during closing arguments whether “he had anything more specific.” Tabert, 1997 ND 39, ¶¶4-7, 560 N.W.2d 883. The Court did indicate, however, that if the hearing officer had asked Tabert to be more specific before ruling on the objections, Tabert would have had to be more specific or risk waiving his objections. Id. at ¶ 7.

[¶ 30] Tabert does not, as May contends, hold that the hearing officer has an affirmative duty to require more specification before ruling on an objection. Rather, Tabert merely indicates that a hearing officer has the authority to request elaboration before ruling on an objection, and the party objecting risks waiving his objection if he fails to do so. However, the initiative is placed upon the party, not the judge or hearing officer, to raise a proper objection. Lee, 2004 ND 176, ¶ 10, 687 N.W.2d 237. A party must raise a specific objection to proffered evidence under N.D.R.Ev. 103(a)(1), and cannot rely upon the hearing officer to request further specification.

[¶ 31] We conclude May failed to timely raise a specific foundation objection to admission of the Intoxilyzer test results based upon the claim of facial irregularity, and thereby waived his objection to the proffered evidence. The hearing officer therefore did not abuse his discretion in admitting the Intoxilyzer test results.

B

[¶ 32] May contends the Intoxilyzer test results were improperly admitted because compliance with the State Toxicologist’s approved method was not shown. Specifically, May contends the hearing officer erroneously admitted a copy of Form 120-1 to establish compliance with the State Toxicologist’s approved method for conducting the Intoxilyzer test. May objected to the Form 120-1 at the hearing, arguing it constituted inadmissible hearsay.

[¶ 33] The Department introduced into evidence a Standard Solution Analytical Report, signed by the State Toxicologist, certifying the solution met the required concentration for a valid test. The Standard Solution Analytical Report further states: “Each bottle of solution may be used on up to 50 Intoxilyzer 5000 tests or forty-five (45) days, whichever comes first.” The Department also introduced a copy of the Form 120-1 for this particular vial of standard solution through the officer who conducted the Intoxilyzer test. Form 120-1 is a ledger documenting each Intoxilyzer test which uses a particular numbered vial of standard solution, and includes the date it was put into use. This Form 120-1 purportedly showed the standard solution used in May’s Intoxilyzer test was less than 45 days old and had been used in fewer than 50 prior tests.

[¶ 34] At the time this case was briefed and argued, this Court had not addressed whether the 45-day, 50-test limitations were part of the State Toxicologist’s approved method, so that compliance was a prerequisite to establishing fair administration of the test under N.D.C.C. § 39-20-07(5). We resolved this issue in City of Bismarck v. Bosch, 2005 ND 12, ¶¶ 9, 11, 691 N.W.2d 260, holding that the guidelines included in the Standard Solution Analytical Report are not part of the approved method, and proof of compliance with those guidelines is not a prerequisite to showing fair administration of the test or to admission of the test results. See also Doll v. North Dakota Dep’t of Transp., 2005 ND 62, ¶ 11, 693 N.W.2d 627. Accordingly, admission of Form 120-I was not necessary to show compliance with the State Toxicologist’s approved method and was not a prerequisite for admissibility of the Intoxilyzer test results.

C

[¶ 35] We conclude the hearing officer did not abuse his discretion in admitting into evidence the Intoxilyzer test results. y

[¶ 36] We have considered the remaining issues and arguments raised by the parties and find they are either without merit or are unnecessary to our decision. The judgment affirming the hearing officer’s decision to suspend May’s license is affirmed.

[¶ 37] GERALD W. VANDE WALLE, C.J., and DALE V. SANDSTROM, J., and JAMES M. BEKKEN, Distinct Judge, concur.

[¶ 38] The Honorable JAMES M. BEKKEN, District Judge, sitting in place of KAPSNER, J., disqualified.

[¶ 39] The Honorable WILLIAM A. NEUMANN, a member of the Court when this case was heard, resigned effective March 14, 2005, and did not participate in this decision.

      . May has not sought any lesser sanction for the Department's failure to comply with N.D.C.C. § 39-20-06.