text:
    STATE of Minnesota, Respondent, v. William Henry WEBSTER, Appellant, Michael Robert McCoy, Appellant.
    Nos. C4-01-1375, C9-0-1422.
    Court of Appeals of Minnesota.
    April 23, 2002.

      William J. Hennessy, Cook County Attorney, Michael J. Boese, Assistant County Attorney, Grand Marais, for respondent.
    James W. Weisberg, Grand Marais, for appellants.
    Considered and decided by TOUSSAINT, Presiding Judge, LANSING, 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

LANSING, Judge.

In consolidated appeals from gross misdemeanor convictions of driving while impaired, William Webster and Michael McCoy challenge the admissibility of In-toxilyzer test results. The district court’s evidentiary rulings did not violate either driver’s limited right to counsel under the Minnesota constitution, and we affirm.

FACTS

A Cook County Deputy arrested Michael McCoy for driving while impaired (DWI) on January 7, 2001. The same deputy arrested William Webster for DWI on February 16, 2001.

For purposes of this appeal, the underlying facts in the two cases are essentially the same. The deputy observed unlawful driving conduct, requested that the driver take a preliminary breath test, transported the driver to the law enforcement center, and read the implied consent advisory. Each driver agreed to take an Intoxilyzer test which produced a test result over .20. Before the hearing, each driver moved to suppress the Intoxilyzer-test results as a violation of his right to counsel, and the district court denied the motion. Each waived the right to a jury trial and submitted the case to the district court on stipulated facts, consistent with the procedures outlined in State v. Lothenbach, 296 N.W.2d 854 (Minn.1980). The court found both drivers guilty of gross misdemeanor DWI.

The facts underlying the two cases diverge on the drivers’ responses to the implied consent advisory. When the deputy asked McCoy if he understood the advisory, McCoy responded ‘Tes, I do.” The deputy asked McCoy if he wished to consult an attorney. McCoy responded, “No.” When the deputy asked McCoy if he would take a breath test, McCoy responded, “I already have.” The deputy replied, “That’s a preliminary breath test. What I want you to take is a breath test using an Intoxilyzer evidentiary test.” McCoy responded, “Oh, I will.” The deputy said, “I’ll ask you again, will you take a breath test?” McCoy said, “Yes.”

When the deputy read the implied consent advisory to Webster, he responded, “I don’t understand.” The deputy read the implied consent a second time. After the second reading, the deputy asked Webster if he understood, and Webster replied that he did. He also said that he wished to consult with an attorney.

The deputy provided Webster with a telephone and a directory and opened the directory to the section for attorneys. At that point, Webster became belligerent and threatened the deputy. The deputy said, “Let me know when you’re done using the phone, okay?” Webster responded, “Done.” Webster had made no calls. The deputy asked, “Are you sure?” Despite making no calls, Webster responded, ‘Tup.” The deputy asked, “Will you take the breath test?” Webster said, “I took it already.” The deputy explained that he had taken a preliminary breath test that established probable cause, but the test he was now being asked to take was an evi-dentiary test that would be submitted in court. Webster responded, “Okay.” The deputy asked him again if he would take the breath test and Webster said, “Yes, I will.”

McCoy did not testify at the suppression hearing. Webster testified that he was confused by the implied consent advisory because he believed he had already taken a breath test. He acknowledged that the deputy explained the difference between the preliminary breath test and the Intoxi-lyzer test before he agreed to take the Intoxilyzer test.

On appeal both McCoy and Webster contend that the district court’s ruling that the Intoxilyzer test was admissible violated their federal constitutional rights because their confusion over the preliminary breath test and the Intoxilyzer test resulted in an unknowing and unintelligent waiver of their right to speak with an attorney.

ISSUE

Does the limited state constitutional right to consult an attorney before deciding whether to submit to chemical testing impose Sixth Amendment waiver procedures?

ANALYSIS

Webster and McCoy contend that the Intoxilyzer test was inadmissible because the test was obtained in violation of their Sixth Amendment right to counsel. This argument misapprehends the nature of Minnesota’s limited right to consult with an attorney before deciding whether to submit to a chemical test.

Minnesota’s recognition of a driver’s right to consult with an attorney before deciding whether to take an alcohol-concentration test has evolved over time. In State v. Palmer, 291 Minn. 302, 305-07, 191 N.W.2d 188, 190-91 (1971), a divided Minnesota Supreme Court expressly rejected the argument that a driver has a right under the Sixth Amendment and the corresponding provision of the Minnesota Constitution to consult with an attorney before deciding whether to provide a breath sample. Id.

The supreme court revisited the issue in Prideaux v. State, Dep’t of Pub. Safety, 310 Minn. 405, 411, 247 N.W.2d 385, 389 (1976), considering whether the decision to refuse chemical testing constitutes a critical stage in a criminal proceeding. The court expressly declined to overrule Palmer but, relying on Minn.Stat. § 481.10 (1976), held that a driver had a statutory right to consult counsel before deciding whether to submit to chemical testing. 310 Minn. at 415-18, 247 N.W.2d at 391-93. The legislature incorporated the Pri-deaux holding into the mandatory implied consent advisory but, in 1984, amended the advisory to state that “after submitting to testing” the driver has a right to consult with an attorney. Minn.Stat. § 169.128, subd. 2(b)(4) (1986).

The effect of this statutory change was tested in Nyflot v. Comm’r of Public Safety, 369 N.W.2d 512 (Minn.1985), appeal dismissed, 474 U.S. 1027, 106 S.Ct. 586, 88 L.Ed.2d 567 (1985). A divided court decided that “a driver arrested for DWI has no right, statutory or constitutional, to consult with counsel before deciding whether to submit to chemical testing.” 369 N.W.2d at 513.

The court again revisited the issue six years later in Friedman v. Comm’r of Pub. Safety, 473 N.W.2d 828 (Minn.1991). The court, again divided, identified a right to counsel independently guaranteed by article I, section 6 of the Minnesota Constitution which attaches at the time an individual is requested to undergo blood alcohol testing. Id. at 833-34. In Friedman the court established the right only under the Minnesota Constitution but used a federal critical stage analysis. Friedman, 473 N.W.2d at 833; see John E. Simonett, An Introduction to Essays on the Minnesota Constitution, 20 Wm. Mitchell L.Rev. 227 (1994).

Thus, the cases that establish a driver’s limited right to consult with an attorney before deciding whether to submit to a chemical test in Minnesota derive that right from article I, section 6 of the Minnesota Constitution, not the Sixth Amendment to the United States Constitution. Generally, the right to legal representation under the federal and state constitutions attaches only at or after a formal charge, preliminary hearing, indictment, information, or arraignment. U.S. v. Gouveia, 467 U.S. 180, 187-89, 104 S.Ct. 2292, 2297-98, 81 L.Ed.2d 146 (1984) (Sixth Amendment right to counsel attaches only “at or after the initiation of adversary judicial proceedings against the defendant” (citation omitted)); State v. Willis, 559 N.W.2d 693, 697 (Minn.1997) (both United States and Minnesota constitutions guarantee right of legal representation that attaches in a criminal proceeding when the state initiates adversary judicial proceeding). The use of “critical stage” methodology in Friedman relies on federal concepts, but does not alter the source of the right. See McDonnell v. Comm’r of Pub. Safety, 473 N.W.2d 848, 853 (Minn.1991). (“Without question the right to counsel guaranteed by the Sixth Amendment * * * does not attach until formal charges are initiated.”)

In their claim that the state is required to demonstrate waiver of an attorney consistent with Sixth Amendment principles as a basis for Intoxilyzer test admissibility, Webster and McCoy mistakenly equate the limited right to counsel with a “Miranda” right, which a suspect who is in custody, but has not been formally charged, may assert before being interrogated. Miranda v. Arizona, 384 U.S. 436, 471-72, 86 S.Ct. 1602, 1626-27, 16 L.Ed.2d 694 (1966). The court-created Miranda right to counsel is specifically designed to protect the Fifth Amendment right against self-incrimination; it is not derived from the Sixth Amendment. Webster and McCoy could not assert a Miranda right to prevent introduction of the evidence because Miranda applies to testimonial evidence and does not apply to questions intended to determine whether the driver will submit to an evidentiary test. South Dakota v. Neville, 459 U.S. 553, 564 n. 15, 103 S.Ct. 916, 923 n. 15, 74 L.Ed.2d 748 (1983); McDonnell, 473 N.W.2d at 855 (Miranda warning not mandated in request for breath test because request does not constitute interrogation).

When the supreme court in Friedman recognized a state constitutional right of representation that attaches at the time an individual is requested to undergo chemical testing, it provided a procedure, commensurate with the limited right, to satisfy the state constitutional requirement of legal representation: the person must be informed of the right, and the police must assist in its vindication by providing a telephone and a reasonable time to contact and talk with counsel. Friedman, 473 N.W.2d at 835.

The transcripts of the deputy’s conversations with Webster and McCoy support the district court’s finding that the Cook County Deputy fully assisted in vindicating Webster’s and McCoy’s limited right to counsel. Although both maintain that they were confused by the advisory because they did not understand the relationship between the preliminary breath test and the Intoxilyzer test, the record does not reasonably support a claim of confusion. McCoy did not testify and thus provided no testimonial basis for any confusion. Furthermore, the transcript establishes that the deputy explained the difference between the two tests. Webster testified that he was initially confused, but acknowledged that the deputy explained the difference between the two tests. In any event, Webster invoked his right to an attorney; thus any confusion could not possibly have affected his right to counsel.

DECISION

Webster’s and McCoy’s limited right to contact and consult with counsel under the Minnesota Constitution, Minn. Const, art. I, § 6, was vindicated, and we affirm both convictions for gross misdemeanor driving while impaired.

Affirmed.


source: Caselaw Access Project

author: R.A. RANDALL, Judge.

license: Public Domain

text:
    In the Matter of the Denial of ELLER MEDIA COMPANY’S APPLICATIONS FOR OUTDOOR ADVERTISING DEVICE PERMITS in the City of Mounds View, Minnesota. Department of Transportation.
    Nos. C0-01-1695, C5-01-1708.
    Court of Appeals of Minnesota.
    April 23, 2002.

      Marvin A. Liszt, David K. Nightingale, Bernick and Lifson, P.A., Minneapolis, for relator Eller Media Company.
    Karen R. Cole, Kennedy & Graven, Chartered, Minneapolis, for relator City of Mounds View.
    David L. Phillips, Assistant Attorney General, St. Paul, for respondent Minnesota Department of Transportation.
    Considered and decided by RANDALL, Presiding Judge, LANSING, Judge, and KLAPHAKE, Judge.
   OPINION

R.A. RANDALL, Judge.

In these consolidated zoning disputes, relators Eller Media Company (“Eller Media”) and the City of Mounds View (“city”) seek review of respondent Minnesota Department of Transportation’s (“DOT”) denial of the Eller Media’s applications to place six billboards in the city. Relators allege that the commissioner’s deputy (1) erred in concluding that the city’s public facilities zone was not a “business area” under Minn.Stat. § 173.08, subd. 1(8) (2000) by reading “business area” to refer to private business exclusively, rather than municipalities, and (2) erred in concluding that the city’s actions were inconsistent with 23 C.F.R. § 750.708 (2000). Eller Media also asserts that the commissioner’s deputy erred in finding that the rezoning of the area was not in compliance with the city’s comprehensive zoning ordinance and that the DOT denied the company due process by not giving the company adequate notice of the reasons for the denial of the company’s applications. The city also argues that the commissioner’s deputy failed to give the city’s zoning deference due under MinmStat. § 173.16, subd. 5 (2000). We reverse in part, affirm in part, and remand.

FACTS

Eller Media is engaged in the business of outdoor advertising, and the city is a municipal corporation. The DOT is responsible for issuing permits for the erection of outdoor advertising devices in areas adjacent to the right-of-way of an interstate or trunk highway. Minn.Stat. § 173.02, subd. 8 (2000).

In 1982, the city adopted a comprehensive zoning plan. The plan designated the property north of Highway 10 as Industrial. In 1984, the city adopted a comprehensive zoning ordinance that rezoned most city owned property as Public Facilities (“PF”) district. The PF district’s purpose is “to provide for land areas, waterways and water areas owned, controlled, regulated, used or proposed to be used by the City.” Permitted uses in the PF district include public buildings and uses; public parks, playgrounds, athletic fields, parking areas, and golf courses; public sewers, water lines and water storage areas; public streets, easements and other public ways, highways and thoroughfares; treatment and pumping facilities and other public service facilities.

Also in 1984, the city rezoned the property on which the five proposed easterly billboards would sit, from Industrial to Conservancy, Recreation, and Preservation (“CRP”) district. The purpose of the CRP district is to “permit the development of major recreational use facilities” on city lands, and “[s]uch recreational use development shall be designed to conserve, preserve and enhance the environment, important natural features and resources, forests and woodlands and control density ⅝ ⅜ ⅞: »

In 1988, the state conveyed to the city the property on which the three proposed most easterly billboards would sit by a quitclaim deed that provided that the property would revert to the state if not used by the city for a public purpose. The city did not change the zoning; it remained CRP. In 1989, Sysco Foods conveyed property to the city that was located to the west of the property granted to the city by the state. The city rezoned the property received from Sysco from industrial to PF.

In 1994 & 1995, the city built and opened The Bridges Golf Course (“the golf course”) on the property north of Highway 10. Three PGA trained professionals run the clubhouse and give lessons. The golf course has a pro shop that sells merchandise, golf clubs, balls, and shoes to the public. A small snack bar serves hot dogs, pizza, beer, and soda. The golf course’s liquor license is held in the name of the golf course manager. The city’s residents do not receive a discounted rate to use the golf course, partially because the course was designed to produce revenue for the city and it was to be paid for by the users. The rates are “the highest or equal to the highest in the area for other nine hole golf courses.” The city advertises the golf course as a “State of the Art Learning Center,” and the golf course appears in Golf Minnesota magazine’s 2000 directory issue. The city maintains a loss of business insurance policy on the property and does not maintain business policies on any other city operations. In 1999, the golf course generated $768,000 in revenue but incurred a net loss of $49,000.

Because the golf course revenues were not sufficient to cover the golf courses’ bond assessment, the city examined ways to increase revenue. In March 1999, the city began considering billboards as an option to generate revenue. On February 14, 2000, the city passed Ordinance No. 637, which allowed on-premise billboards as interim use in PF, CRP, and PUD districts, and Ordinance No. 644, which allowed billboards in a limited district along and north of State Highway 10.

On March 27, 2000, the city passed an ordinance that rezoned the property on which the five easterly billboards were situated from CRP to PF. The city’s community development director testified that zoning was changed from CRP to PF “to bring the golf course land use * * * into consistency with the city zoning code” and that he was “Absolutely sure” that the property was not rezoned to allow billboards. He further testified that the golf club manager indicated in 1997 that the zoning should be changed to PF, but because of staff turnover, the matter was overlooked. City-council-meeting minutes from April 1999 indicate that the city council thought the property was zoned PF at that time. Under the city’s zoning scheme, if the golf course was privately owned, it would be zoned Highway Business District, B-3 or Regional Business District, B-4. The areas surrounding the golf course property are zoned heavy or light industrial, warehouse, or office park.

Also on March 27, 2000, the city approved a resolution to allow Eller Media to construct six billboards on the golf course site and adjacent property. The proposal would provide the city with $4,915,124 during the 15 year term of the lease.

In May 2000, Eller Media submitted six applications to the DOT requesting permits for construction of the billboards. On June 9, 2000, the DOT denied Eller Media’s applications, stating that the locations did “not meet the requirements of the Minnesota Outdoor Advertising Control Act for the erection of Outdoor Advertising Devices.”

The record shows that DOT previously granted sign permits to Eller Media for other property that is owned by governmental agencies including property owned by the Minneapolis Community Development Agency, the MTC Company (a bus company that is municipally owned), the Minnesota State Fair Board, and the Metropolitan Airport Commission. The DOT has also granted sign permits for the Lost Spur Golf Course in Eagan, Minnesota. Unlike the city’s golf course, Lost Spur has a banquet facility, restaurant, and large bar. But Lost Spur does not have a large driving range like the city’s golf course. The city’s golf course had higher revenues than Lost Spur in 1999. Like the city’s golf course, the Lost Spur property is zoned PF.

On December 8, 2000, the parties appeared at a hearing before an administrative law judge (“ALJ”). In February 2001, the ALJ issued an order recommending the permits be approved. In September 2001, however, the commissioner’s deputy issued an order denying Eller Media’s permits on the grounds that (1) the golf course property was not a “business area” under Minn.Stat. § 173.08, subd. 1(8) (2000) and (2) the city’s zoning was not part of a comprehensive zoning plan and thus was inconsistent with 23 C.F.R. § 750.708 (2000). This appeal follows.

ISSUES

I. Did the commissioner’s deputy properly interpret Minn.Stat. § 173.08, subd. 1(8) (2000)?

II. Did the commissioner’s deputy properly interpret 23 CFR § 750.708 (2000)?

III. Did the DOT deny Eller Media’s due process by not giving it adequate notice of the reasons for the denial of the its applications?

IV. Did the commissioner’s deputy fail to give the city’s zoning the deference due to legislative determinations under Minn.Stat. § 173.16, subd. 5 (2000)?

ANALYSIS

I. Business Area Designation

Eller Media and the city argue that the commissioner’s deputy improperly concluded that the city’s public facilities zone was not a “business area” under Minn. Stat. § 173.08, subd. 1(8) (2000) by reading “business area” to refer to private business rather than municipalities and determining a zoning classification based upon ownership rather than use of the property.

Judicial review of an agency decision in a contested case is governed by Minn.Stat. §§ 14.63-.69 (2000). This court may reverse the agency’s decision if the decision is unsupported by substantial evidence, arbitrary or capricious, or affected by other error of law. In re the Matter of Indep. Spent Fuel Storage Installation, 501 N.W.2d 638, 642 (Minn.App.1993), review denied (Minn. July 15, 1993) [hereinafter Spent Fuel Storage ]. An agency’s decision is arbitrary and capricious where “its determination represents its will and not its judgment.” Markwardt v. State Water Ress. Bd., 254 N.W.2d 371, 374 (Minn.1977) (citation omitted). In considering questions of law, “reviewing courts are not bound by the decision of the agency and need not defer to agency expertise.” St. Otto’s Home v. Minn. Dep’t of Human Servs., 437 N.W.2d 35, 39-40 (Minn.1989) (citations omitted). A legal question is presented when an agency’s decision turns on the meaning of words in a statute. Id. at 39. Accordingly, whether the city’s golf course is a “business area” under Minn. Stat § 173.08, subd. 1(8) is a question of law, which we review de novo.

Minn.Stat. Ch. 173 (2000) is Minnesota’s Outdoor Advertising Control Act (“the Act”). The purpose of the Act is to “conserve the natural beauty of areas adjacent to certain highways” by regulating and controlling the erection of advertising devices on land adjacent to highways. Minn. Stat. § 173.01. But the Act recognizes that because

outdoor advertising is an integral part of the business and marketing function * * *, it should be allowed to operate where other business and commercial activities are conducted * * ⅜.

Minn.Stat. § 173.01.

Minn.Stat. § 173.08 prohibits outdoor advertising in an “adjacent area,” which is “any area adjacent to the right-of-way of an interstate or trunk highway.” Minn. Stat. § 173.02, subd. 8. But Minn.Stat. § 173.08 lists several exceptions to the prohibition, including Minn.Stat. § 173.08, subd. 1(8), which allows

advertising devices which are located, or which are to be located, in business areas and which comply, or will comply when erected, with the provisions of sections 173.01 to 173.27;

MinmStat. § 173.02 subd. 9 defines “business area” as

any part of an adjacent area which is (a) zoned for business, industrial or commercial activities under the authority of any law of this state or any political subdivision thereof; or (b) not so zoned, but which constitutes an unzoned commercial or industrial area as herein defined.

The Act requires the commissioner to “comply with federal law and federal rules and regulations relating to billboard control on the interstate and primary systems.” Minn.Stat. § 173.185. Under 23 C.F.R. § 750.703(a) (2000), commercial and industrial zones

are those districts established by the zoning authorities as being most appropriate for commerce, industry, or trade, regardless of how labeled. They are commonly categorized as commercial, industrial, business, manufacturing, highway service or highway business (when these latter are intended for highway-oriented business), retail, trade, warehouse, and similar classifications.

(Emphasis added). Minnesota courts have not interpreted the scope of “business area” in Minn. Stat §§ 178.08, subd. 1(8) and 173.02, subd. 9, and thus, this is a case of first impression.

The commissioner’s deputy adopted the ALJ’s findings detailing the golf course activities and income. The findings establish that the golf course has 24,000 to 30,000 customers a year, generates $800,000 in revenue annually, contains high maintenance turf requiring constant water with the use of an irrigation system, does not give residents a discount, holds a liquor license, and spends $10,000 a year on advertising. But contrary to the ALJ’s conclusion, the commissioner’s deputy determined that the golf course does not constitute a “business area” under Minn. Stat §§ 173.08, subd. 1(8) and 173.02, subd. 9. The deputy commissioner concluded that because the property was zoned PF, it was intended for public use and was not “most appropriate for commerce, industry or trade” as is required under 23 C.F.R. § 750.703(a). The deputy commissioner acknowledged that the DOT interprets “business” to refer to private business, not municipal activities.

First, the definition of business area in Minn.Stat. § 173.02 subd. 9(a) is not ambiguous. “Business area” means any part of an adjacent area that is “zoned for business, industrial or commercial activities under the authority of any law of this state or any political subdivision thereof.” Id. The statute requires that the area be zoned for business, industrial or commercial activities, not that the zoning label state business, industrial or commercial. The statute does not exclude government entities from engaging in business, industrial or commercial activities.

Second, federal regulations with which the commissioner must comply state that commercial and industrial zones “are those districts established by the zoning authorities as being most appropriate for commerce, industry, or trade, regardless of how labeled.” 23 C.F.R. § 750.703(a) (emphasis added). The commissioner focused on the language “as being most appropriate” for commerce, industry, or trade. But this ignores the “regardless of how labeled” language, ignores the actual use of the land, and results in a decision based solely on the zoning label. Additionally, the areas surrounding the golf course property are zoned heavy or light industrial, warehouse, or office park, and thus, the area is “most appropriate” for commerce, industry, or trade.

Third, the law has long recognized that cities engage in business activities. Minnesota’s legislature has expressly granted cities the power to engage in proprietary activities. See, e.g., Minn. Stat § 360.032 (2000) (airports); Minn.Stat. § 412.211, subd. 22 (2000) (sewage and garbage disposal); Minn.Stat. § 412.321 (2000) (gas, light, power and utility services); MinmStat. § 459.14 (2000) (automobile parking facilities); Minn.Stat. § 412.221, subd. 16 (2000) (hospitals); Minn.Stat. § 471.191 (2000) (golf courses, marinas, concert halls, museums, swimming pools, arenas, and athletic fields). Similarly, case law recognizes that cities act in a proprietary capacity by providing certain services and operating certain facilities. See e.g., S. Minn. Mun. Power Agency v. Boyne, 578 N.W.2d 362, 364-65 (Minn.1998) (recognizing legislature granted SMMPA authority to run its affairs like private corporation); City of Staples v. Minn. Power & Light, 196 Minn. 303, 305, 265 N.W. 58, 59 (1936) (water and electric service). Moreover, just like businesses, employees and officers of municipalities are subject to liabilities for their torts when acting within the scope of their employment or duties. Minn.Stat. § 466.02 (2000).

The commissioner’s deputy recognized that cities engage in proprietary functions, but nonetheless determined that it “has little relevance to the determination of whether the PF zone is a ‘business, industrial or commercial zone’ for purposes of the Act.” The commissioner’s deputy noted that the distinction between proprietary and governmental functions applies in cases involving tort liability, constitutional issues, immunity, or estoppel issues but that such a distinction does not apply in zoning cases. This interpretation ignores the longstanding recognition that cities engage in proprietary activities and ignores the DOT’S previous practices of granting permits for billboards on government-owned land and for a privately owned golf course in a PF district. Based on the longstanding law that recognizes that cities engage in various proprietary activities, the plain language of Minn.Stat. § 173.08 subd. 9(a) and 23 C.F.R. § 750.703(a), and the DOT’S previous practices, we conclude the commissioner’s deputy improperly excluded public facility zones from even the possibility of being a business area. The DOT’s decision represented its will and not its judgment and is arbitrary and capricious. See Markwardt, 254 N.W.2d at 374 (stating agency’s decision is arbitrary and capricious where “its determination represents its will and not its judgment”).

Based on undisputed factual findings adopted by the commissioner’s deputy, we conclude the city’s golf course is engaged in business activity. Because the PF zone expressly lists “golf courses” as a permitted use, and the golf course is engaged in business activity, the property is zoned for business activities under Minn.Stat. § 173.02 subd. 9. Accordingly, the commissioner’s deputy improperly concluded that this public facility zone did not qualify as a business area.

The DOT also argues that even if the golf course is commercial in nature, that the activity is merely “incidental” to its primary use and should not be considered a commercial zone under 23 C.F.R. § 750.708(d) (2000). 23 C.F.R. § 750.708(d) provides:

A zone in which limited commercial or industrial activities are permitted as an incident to other primary land uses is not considered to be a commercial or industrial zone for outdoor advertising control purposes.

It is difficult to see how the golf course, being the sole activity conducted on the land and an expressly permitted activity within the PF district, could constitute only “incidental use.”

Finally, the.DOT asserts that even if the golf course is found to be a business area, the lot acquired from Sysco, on which the most westerly billboard would sit, is zoned PF and not engaged in commercial activity. While the property is not developed or currently used for a commercial purpose, it is located in an area where surrounding property is commercial or industrial. The city ordinance permits billboards in the PF district, and the property is located in a “business area.” Thus, the commissioner’s assertion is incorrect.

The commissioner’s deputy’s interpretation that “business area” does not include municipal owned land adds something to the statute that the legislature did not impose. This goes beyond interpretation of the statute and represents its will not its judgment and is thus arbitrary and capricious. See Minn. Power & Light Co. v. Taxing Dist., City of Fraser, 289 Minn. 64, 71, 182 N.W.2d 685, 689 (1970) (commissioner has no power to change statute and if meaning is unambiguous, he must give effect to plain language used by legislature). Accordingly, we reverse the commissioner’s deputy’s decision and order the DOT to issue Eller Media the six permits requested in its May 2000 applications.

II. Comprehensive Zoning under Federal Rule

A. Comprehensive Zoning

Eller Media argues that the commissioner’s deputy’s finding that the city’s action was not taken as part of a comprehensive zoning plan was not supported by the evidence. An appellate court may reverse the agency’s decision if it finds the decision was unsupported by substantial evidence. Spent Fuel Storage, 501 N.W.2d at 642. The substantial evidence test is a quantitative evidentiary test requiring “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Minn. Power & Light Co. v. Minn. Pub. Util. Comm’n, 342 N.W.2d 324, 328 (Minn.1983) (quotation omitted).

The commissioner’s deputy adopted the ALJ’s findings that (1) the city’s comprehensive plan was adopted in 1982 and designated the golf course property as industrial, (2) in 1984, the city adopted an ordinance that rezoned most publicly owned properties to PF, and (3) in 1984, parcels of undeveloped land associated with the golf course was rezoned CRP. CRP was an appropriate designation for the undeveloped land in 1984. It undisputed that CRP was an inappropriate designation under the city’s zoning code after the golf course was built in 1995 and that the appropriate designation was PF. The record contains no evidence to the contrary. City-council-meeting minutes from April 1999 indicate that the city council even thought the property was zoned PF at that time. The city’s community development director testified that zoning was changed from CRP to PF “to bring the golf course land use * * * into consistency with the city zoning code.” Because DOT produced no evidence that PF was not the proper designation under the city’s zoning ordinance and that CRP was no longer permissible, we conclude the city was operating under a comprehensive zoning plan. We reverse the commissioner’s deputy’s decision because it is not supported by substantial evidence.

B. 23 C.R.F. § 750.708

Eller Media and the city argue that the commissioner’s deputy incorrectly concluded that the city’s actions were inconsistent with 23 C.F.R. § 750.708 (2000).

A reviewing court will defer to an agency’s interpretation of its own rule under certain circumstances. Resident v. Noot, 305 N.W.2d 311, 312 (Minn.1981). But here the commissioner is not interpreting the DOT’s regulation; the regulations are federal. “No deference is given to the agency interpretation if the language of the regulation is clear and capable of understanding; therefore, the court may substitute its own judgment.” St Otto’s Home, 437 N.W.2d at 40 (citation omitted).

The commissioner concluded that the city’s actions were not part of comprehensive zoning and were created primarily to permit outdoor advertising structures, and thus that 23 C.F.R. § 750.708(b) does not recognize the zoning for outdoor advertising control purposes. 23 C.F.R. § 750.708(b) provides:

State and local zoning actions must be taken pursuant to the State’s zoning enabling statute or constitutional authority and in accordance therewith. Action which is not a part of comprehensive zoning and is created primarily to permit outdoor advertising structures, is not recognized as zoning for outdoor advertising control purposes.

Under the regulation, the zoning will not be recognized for outdoor advertising control purposes if two requirement are met: the action is (1) not a part of comprehensive zoning and (2) created primarily to permit outdoor advertising structures. Because the city operated under a comprehensive zoning plan, the commissioner incorrectly concluded that the city’s action were inconsistent with 23 C.F.R. § 750.708(b).

Despite the plain language of the regulation, the commissioner asserts that even if the zoning was part of a comprehensive package, it is invalid solely because the action was taken primarily to permit outdoor advertising. In its order, the deputy commissioner asserted that the DOT’S position is “[w]hether or nor the action taken is part of a comprehensive zoning, when it is taken primarily to permit outdoor advertising, it will not be recognized.” This is inconsistent with the plain language of the regulation; it eliminates the “and” and thus eliminates the second prong requirement, namely that the action not be a part of comprehensive zoning.

To support this position, the DOT cites Best Western Tivoli Inn v. Dep’t of Trans., 448 So.2d 1052, (Fl.App.1984), in which the Florida Court of Appeals upheld the Florida DOT’s interpretation of that agency’s version of 23 C.F.R. § 750.708. The Florida DOT had interpreted the agency’s version of 23 C.F.R. § 750.708 as requiring that an “action which is a part of comprehensive zoning, but which is taken primarily to permit outdoor advertising structures, [would] not be recognized by the Department for outdoor advertising control purposes.” Id. at 1055. The Florida Court of Appeals reviewed the state agency’s administrative rule, not the federal regulation. Id. Although Best Western upheld the interpretation based on deference to an agency’s interpretation of its own rule, it recognized that “this interpretation arguably conflicts with the plain, facial meaning of the rule.” Id. Because Best Western did not interpret the federal regulation, we find it unpersuasive.

Because the regulation is not ambiguous, and the commissioner’s interpretation conflicts with the plain language of the regulation, we conclude the commissioner’s decision represented its will and not its judgment and is thus arbitrary and capricious. See Markwardt, 254 N.W.2d at 374 (stating agency’s decision is arbitrary and capricious where “its determination represents its will and not its judgment” (citation omitted)).

III. Denial of Due Process

Eller Media also asserts that the DOT denied it due process by not giving it adequate notice of the reasons for the denial of its permit applications.

“This court reviews de novo the procedural due process afforded a party.” Zellman ex rel. M.Z. v. Indep. Sch. Dist. No. 2758, 594 N.W.2d 216, 220 (Minn.App.1999) (citation omitted), review denied (Minn. Jul. 28, 1999). Due process requires that deprivation of property be preceded by notice and opportunity to be heard. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 542, 105 S.Ct. 1487, 1493, 84 L.Ed.2d 494 (1985). “[I]t is elementary that due process does embrace notice of the claims to be investigated or litigated and an opportunity to present evidence on the issues to be determined.” State v. Duluth, M. & I.R. Ry. Co. 246 Minn. 383, 400, 75 N.W.2d 398, 410 (1956).

The DOT’s initial denial letter did not provide a detailed reason for the denial. And the record shows that the DOT did not specifically refer to 23 C.F.R. § 750.708 (2000) until its January 22, 2001, post-hearing brief. But as the ALJ concluded, and a review of the record supports, the parties addressed the “spot zoning” issue at the hearing, had the opportunity to present testimony and evidence the issue, and did elicit relevant testimony supporting their argument that the rezoning was part of the city’s comprehensive zoning plan. In response to questions by the city’s attorney, the city community development director testified that the property was not rezoned to allow billboards. Eller Media’s attorney elicited similar testimony from the city community development director and specifically questioned him about the city’s zoning map.

Although preferably the DOT should have informed Eller Media of the specific grounds for the denial, Eller Media had the opportunity to elicit relevant testimony, and did so elicit relevant testimony, and Eller Media argued the issue in its reply post-hearing brief. We conclude El-ler Media’s due process rights to adequate notice were not prejudiced.

IV. Lack of Deference to the City’s Zoning Designation

The city argues that the commissioner’s deputy failed to give the city’s zoning the deference due to legislative determinations under Minn.Stat. § 173.16, subd. 5 (2000). A reviewing court will defer to an agency’s interpretation of its own rule under certain circumstances. Noot, 305 N.W.2d at 312. But “[n]o deference is given to the agency interpretation if the language of the regulation is clear and capable of understanding; therefore, the court may substitute its own judgment.” St. Otto’s Home, 437 N.W.2d at 40 (citation omitted).

Minn.Stat. § 173.16, subd. 5 provides for local control over zoning matters:

(a) Whenever a bona fide county or local zoning authority has made a legitimate determination of customary usage and in the judgment of the commissioner, reasonably provides for size, lighting and spacing control of advertising devices, such determination shall be accepted in lieu of the provisions of this chapter in the zoned commercial and industrial areas within the geographical jurisdiction of such authority.
(b) All county and local zoning authorities shall give notice to the commissioner of transportation of the establishment or revision of any commercial and industrial zones pursuant to subdivision 1. * * *
(c) The commissioner may not disapprove any zoning ordinance adopted by a county or local zoning authority that has the effect of establishing a business area unless the zoning ordinance would result in the loss to the state of federal highway funds.

Minn. R. 8810.1400 (1999) requires local zoning authorities to obtain an annual “certification of zoning” for local zoning to apply. The record contains no evidence that the city complied with Minn.Stat. § 173.16, subd. 5(b) by giving the commissioner the required notice or complied with Minn. R. 8810.1400 by requesting or receiving certification.

The commissioner’s deputy concluded that MinmStat. § 173.16, subd. 5 applies when a bona fide zoning authority requests the commissioner to accept the legitimate local zoning applicable to control of advertising devices. The city argues, however, that subdivision (c) sets forth a strong policy statement and should apply even if certification is required under subdivisions (a) and (b). Minn. R. 8810.1400 unambiguously requires local zoning authorities to obtain an annual “certification of zoning” for local zoning in Minn.Stat. § 173.16, subd. 5 to apply. We find the deputy commissioner’s interpretation reasonable, and thus, subdivision (c) does not apply in this case.

DECISION

First, we reverse the commissioner’s decision that Minn.Stat. § 173.08 subd. 1(8) (2000) precluded publicly owned lands from constituting a business area under Minn.Stat. § 173.02, subd. 9(a) (2000). The decision represented the DOT’s will and not its judgment and is arbitrary and capricious. The language of Minn.Stat. § 173.08 subd. 9(a) and 23 C.F.R. § 750.703(a) are unambiguous. Minnesota law recognizes that cities engage in proprietary activities, and DOT previously granted permits on other governmentally owned property. We remand with instructions that the DOT issue Eller Media the six requested permits. Second, we reverse the DOT’s interpretation that action taken primarily to permit outdoor advertising, even if the action is taken as part of a comprehensive plan, is inconsistent with 23 C.F.R. § 750.708. The regulation unambiguously provides otherwise. Third, El-ler Media had adequate notice and was not denied due process. Fourth, the deputy commissioner’s decision that Minn.Stat. § 173.16, subd. 5(c) applies when a bona fide zoning authority requests the commissioner to accept the legitimate local zoning applicable to control of advertising devises pursuant to Minn. R. 8810.1400 (1999) is reasonable.

Reversed in part, affirmed in part, and remanded.

      . The February 14, 2000, ordinance permitted the use of billboards as an interim use upon obtaining a conditional use permit (CUP). On March 27, 2000, the city amended the ordinance again by providing that an interim use permit (IUP) rather than a CUP was required for interim use of billboards.

      . Eagan's PF designation differs slightly from the city’s in that it also lists churches, schools, and hospitals as permitted uses.

      . Even if the language could be construed as ambiguous, we conclude the commissioner's deputy’s interpretation is unreasonable. See St. Otto’s Home, 437 N.W.2d 35, 41 (reversing agency’s definition of term because it was unreasonable).

      . The DOT cited Port Authority of St. Paul v. Fisher, 269 Minn. 276, 132 N.W.2d 183, (1964) to support its argument that a city cannot legally promote a private end. But Port Authority examined the constitutionality of a public entity leasing land and an office building to a private corporation. There is no similar private interest involved in this case, and unlike Port Authority, statutory authority expressly permits cities to operate golf courses. See Minn.Stat. § 471.191.

      . Minn. R. 8810.1400 states:
      For the purposes of Minnesota Statutes, section 173.16, subdivision 5, bona fide zoning authorities may request the commissioner of transportation to accept the legitimate local zoning applicable to control of advertising devices within legally zoned commercial or industrial areas. ⅜ * *
      * * * All requests for certification shall include a copy of the minutes or procedure authorizing the zoning authority to request such certification from the commissioner of transportation.
      All certification shall be on an annual basis and shall be based upon local enforcement. Failure to enforce may result in revocation of certification.


author: KONENKAMP, Justice.

text:
    2002 SD 39
    Albert W. JOSEPH and Elderly and Disabled Services, Inc., Plaintiffs and Appellants, v. Jayne F. KERKVLIET and Convent of Sacred Heart a/k/a Benedictine Sisters, Defendants and Appellees.
    No. 21988.
    Supreme Court of South Dakota.
    Considered on Briefs Feb. 11, 2002.
    Decided March 20, 2002.
    Terry L. Pechota of Viken, Viken, Pe-chota, Leach & Dewell, Rapid City, South Dakota, for plaintiffs and appellants.
    Michael F. Marlow, Shiela F. Woodward of Johnson, Heidepriem, Miner, Marlow & Janklow, Yankton, South Dakota, for defendants and appellees.
   KONENKAMP, Justice.

[¶ 1.] This appeal challenges two decisions of the trial court, first, that certain evidence was improperly excluded from the jury’s consideration, and, second, that, in this motor vehicle accident case, cost-of-replacement, not cost-of-repair, should have been the proper measure of damages. We affirm.

A.

[¶ 2.] On September 6, 1995, Albert Joseph, along with his sister, Elizabeth, and his daughter, Andrea, traveled from Wagner to Yankton in a van owned by Elderly and Disabled Services, Inc. (EDSI). As they entered the Yankton city limits, a vehicle, owned by defendant Benedictine Convent of Sacred Heart and driven by defendant Jayne Kerkvliet, struck the van, causing it to tip onto its side. Joseph, Elizabeth, and Andrea all sustained injuries as a result of the collision. Defendants admitted liability, and the claims of Elizabeth and Andrea were settled. Joseph’s claim for damages went to a jury trial.

[¶ 3.] Albert Joseph has had a history of back problems. He had been in a motor vehicle accident in 1992, and he had undergone back surgery some five or six years earlier, as a result of another motor vehicle accident. He also met with two additional traumatic incidents: in 1998, he fell out of a chair while eating at a café in Pickstown, and three months afterwards he slipped and fell on ice at his home. X-rays taken after the first incident revealed injuries that did not appear in the x-rays taken after the 1995 accident. Following the second incident, Joseph reported to his physician in Wagner that he had pain in his lower back. .

[¶ 4.] In October, 1999, Joseph consulted Dr. Bruce Johnson, a chiropractor in Mitchell. Dr. Johnson suggested that a spinal fusion operation might be necessary. Accordingly, in December, 1999, Joseph consulted Dr. Doran, a neurologist in Omaha, who later performed that operation in Omaha Methodist Hospital. Defense counsel moved in limine to preclude the introduction of evidence concerning Joseph’s spinal fusion surgery. The court granted the motion on grounds that Joseph was prepared to offer no relevant expert testimony to the effect that the accident in question necessitated the operation.

[¶ 5.] The trial court also ruled on the proper measure of damages to be paid to EDSI in consequence of damage to its van. After the accident, defendants made immediate arrangements to have the van repaired without authorization from EDSI. The van was repaired in Yankton at a cost of $12,218.52. EDSI refused to accept return of the vehicle, believing it to be unsafe for use in transporting the elderly and infirm. The trial court ruled that the measure of damages was $12,218.52, the eost-of-repair; that EDSI was entitled both to compensation in money for damage to the van and to the van itself, in unre-paired condition; that EDSI was not entitled both to a repaired van and to money in the amount of $12,218.52; and that defendants were to have thirty days from the date of judgment to remove from the van, if they chose, any parts that had been placed on the van in the course of repair.

[¶ 6.] On appeal, we consider the following issues: (1) Did the circuit court err in ruling that evidence of Joseph’s operation and its cost were inadmissible? (2) Did the court err in ruling that the cost of repair of the van was the correct measure of damages?

B.

[¶ 7.] Joseph argues that the trial court committed reversible error in granting the defense motion to preclude the introduction of evidence of his spinal fusion operation. It is settled law in South Dakota that reversible error cannot be predicated upon the denial of a motion in li-mine. State v. Red Star, 467 N.W.2d 769, 771 (S.D.1991). Our case, however, requires us to rule for the first time on the inverse situation: can a grant of a motion in limine be grounds for reversible error? Several other jurisdictions have confronted this question and have concluded that the failure to make an offer of proof at trial following the grant of a motion in limine waives the issue on appeal. State v. Nor-ville is typical:

A trial court’s ruling granting a motion in limine is interlocutory only and subject to change during the course of trial; such a ruling, therefore, in and of itself, preserves nothing for appeal. Rather, the proponent of the evidence must attempt to present the excluded evidence at trial, and if an objection to the proffered evidence is sustained, the proponent must then make an offer of proof. Such a requirement is strictly applied because a trial judge should be given an opportunity to reconsider [the] prior ruling against the backdrop of the evidence adduced at trial.

23 S.W.3d 673, 685 (Mo.Ct.App.2000) (citations and internal quotations omitted). See also Keeper v. King, 130 F.3d 1309, 1315 (8thCir.l997); State v. Hill, 75 Ohio St.3d 195, 661 N.E.2d 1068, 1077 (1996); McCune v. Neitzel, 235 Neb. 754, 457 N.W.2d 803, 808 (1990); State v. Locklear, 145 N.C.App. 447, 551 S.E.2d 196, 199 (N.C.Ct.App.2001); Wilson v. State, 44 S.W.3d 602, 606 (Tex.App.2001); Ford v. Herman, 316 Ill.App.3d 726, 249 Ill.Dec. 942, 737 N.E.2d 332, 340 (2000); Conway v. Evans, 549 N.E.2d 1092, 1094 (Ind.Ct.App.1990). We find this reasoning persuasive and hereby adopt the view it supports.

[¶ 8.] Thus, the question becomes whether Joseph made an offer of proof at trial or otherwise attempted to introduce evidence concerning his 2000 spinal fusion surgery. Because he deemed it pointless, Joseph made no attempt at trial to introduce the same evidence the trial court earlier prohibited. But neither did he make an offer of proof on this evidence. Therefore, as a matter of law, we hold that Joseph failed to preserve his objection to the trial court’s ruling in limine excluding evidence concerning the spinal fusion surgery.

[¶ 9.] Since we are ruling for the first time on the question of preserving a record for appeal, in fairness we will proceed to examine the evidence Joseph presented for the trial court’s consideration at the motion hearing. Essentially, Joseph argued that the September 1995 accident necessitated the spinal fusion operation. His evidence for this necessity consisted of his own testimony and that of the chiropractor, Dr. Johnson. The need for spinal fusion surgery is obviously to be determined by appropriate expertise. Joseph was not competent to determine for himself that he needed the operation. All he could say was that he did in fact undergo it and that he was billed $57,909 for the procedure. Dr. Johnson’s expertise was limited to the scope of his profession, chiropractic. SDCL 36-5-1, in pertinent part, defines that scope as follows:

Chiropractic is hereby defined to be the science of locating and removing the cause of any abnormal transmission of nerve energy including diagnostic and externally applied mechanical measures incident thereto.

Absent from this definition is any reference to surgical procedures. In Logan v. Dayton Hudson Corp., the appellate court held that the trial court had not abused its discretion in ordering a new trial on grounds that it had improperly admitted a chiropractor’s testimony regarding the need for back surgery. 865 F.2d 789 (6thCir.1989). Similarly, it has been held that chiropractors are unqualified to testify concerning the cost of back surgery. K Mart Corp. v. Rhyne, 932 S.W.2d 140, 146 (Tex.App.1996). As a chiropractor, Dr. Johnson was, therefore, unqualified to testify about either the need or the cost of Joseph’s spinal fusion surgery. And since Joseph offered no evidence that Dr. Johnson was otherwise qualified so to testify on that point, the trial court did not abuse its discretion in granting the motion in limine not to admit his testimony.

C.

[¶ 10.] Plaintiff EDSI argues that it should receive the full market value of the van in its condition before the accident. However, “when a motor vehicle has been damaged by the negligence of another, the proper measure of damages is the cost of repairs and the value of its use during the time it is being repaired.” Thormahlen v. Foos, 83 S.D. 558, 564, 163 N.W.2d 350, 353 (1968). Furthermore, as the trial court noted, a property owner is entitled to the full market value only if the property is totally destroyed in the accident. See 22 Am.Jur.2d Damages § 429 (1988). According to the stipulated facts, the van could be safely and effectively repaired at a cost less than its full market value. As noted above, the trial court ruled, therefore, that cost-of-repair was the appropriate measure of damages.

[¶ 11.] Affirmed.

[¶ 12.] GILBERTSON, Chief Justice, and SABERS and AMUNDSON, Justices, and GORS, Acting Justice, concur.

      . We review a trial court’s evidentiary rulings under an abuse-of-discretion standard. State v. Machmuller, 2001 SD 82, ¶6, 630 N.W.2d 495, 498. To establish that a trial court’s evidentiary ruling requires reversal, a party must show not only that the ruling was an abuse of discretion, but also that it was prejudicial. Carpenter v. City of Belle Fourche, 2000 SD 55, ¶ 7, 609 N.W.2d 751, 756 (citation omitted).

      . Defendants had the van repaired without EDSI's authorization. The trial court found that in so doing defendants frustrated EDSI’s right to be compensated in money. EDSI refused to accept the van in its repaired condition, believing it to be unsafe. The record includes evidence to the contrary. In any case, as the trial court noted, EDSI had the option of accepting $12,218.92 along with the van returned to something approximating its unrepaired state and then selling the van for its salvage value of $3,002.00.


author: NEUMAN, Justice.

text:
    UNITED FIRE & CASUALTY COMPANY, Appellee/Cross-Appellant, v. SHELLY FUNERAL HOME, INC. and Ted Shelly, Appellants/Cross-Appellees, Victor Schenke and Lila Schenke, Intervenors.
    No. 99-1399.
    Supreme Court of Iowa.
    April 3, 2002.
    Rehearing Denied April 22, 2002.

      David J. Dutton and Carolyn A. Rafferty of Dutton, Braun, Staack, & Heilman, P.L.C., Waterloo, for appellant Shelly Funeral Home, Inc.
    Mark A. Roeder of Roeder & Hassler, Manchester, for appellant Ted Shelly.
    Patrick M. Roby and Christopher L. Bruns of Elderkin & Pirnie, P.L.C., Cedar Rapids, for appellee.
    Gerald T. Sullivan and William H. Roemerman of Crawford, Sullivan, Read & Roemerman, P.C., Cedar Rapids, for inter-venors.
   NEUMAN, Justice.

This declaratory judgment action involves coverage questions and a counterclaim for bad faith arising out of the defense of a tort action against a funeral home and its principal employee. The facts in the underlying tort action were bizarre, to say the least. In a nutshell, a jury found that the funeral director abused his access to an apartment owned by the funeral home and then emotionally injured its elderly tenants by repeatedly exposing himself and subjecting them to displays of pornography.

On this appeal, the funeral home contends the district court erred when it failed to enter a judgment against the insurer for alleged bad faith in the defense of the tort suit. The individual employee cites error in the court’s failure to enter judgment for attorney fees he incurred for defending himself. The insurer claims on its cross-appeal that the court erred when it bound the insurer by the jury’s finding of negligent supervision in the underlying case. The insurer also cross-appeals the court’s interpretation of policy provisions pertaining to an “occurrence,” claiming any emotional distress damages were the result of intentional, not accidental, conduct.

Because this declaratory judgment action was tried at law, our review is limited to the correction of legal error. Grinnell Mut. Reins. Co. v. Employers Mut. Cas. Co., 494 N.W.2d 690, 692 (Iowa 1993). The district court’s well-supported factual findings are binding on us. Id. We are not, however, bound by the district court’s legal conclusions. Pierce v. Farm Bureau Mut. Ins. Co., 548 N.W.2d 551, 553 (Iowa 1996). For the reasons that follow, we affirm in part, reverse in part and remand for entry of a judgment for attorney fees.

I. Background Facts and Proceedings.

Plaintiff, United Fire & Casualty Company (hereinafter United Fire), sold a comprehensive general liability policy to defendant, Shelly Funeral Home, Inc. This family-owned mortuary business has operated for three generations in Manchester, Iowa. Defendant Ted Shelly is the grandson of the company’s founder. He became employed by the company in 1966 and, at the time of these proceedings, served as its president.

In addition to his duties as funeral director, Ted managed rental properties owned by the funeral home. As manager, Ted had keys allowing him access to the rental units. One of the funeral home’s properties was rented for many years by an elderly couple, Victor and Lila Schenke. Ted’s relationship with the Schenkes forms the backdrop for this suit over coverage under United Fire’s policy.

In May 1997, the Schenkes sued Shelly Funeral Home, Inc., and Ted Shelly, personally, for damages brought about by Ted’s sexual exploits in their apartment. The Schenkes’ suit rested on a number of theories including intentional infliction of emotional distress, assault, indecent exposure, harassment, trespass, landlord’s failure to provide fit and habitable premises, landlord’s abuse of access, and corporate liability for negligent hiring and supervision. They sought both compensatory and punitive damages. The defendants’ answer and theory of defense rested on Ted Shelly’s claim that his activities with the Schenkes were consensual in nature and unrelated to (and unknown by) his employer, Shelly Funeral Home, Inc. United Fire, disputing coverage, defended the lawsuit under a reservation of rights.

The case was tried to a jury. The jury plainly did not buy Ted’s candid explanation of the sordid events, and it held the funeral home liable for his acts as well as finding it hable for negligent supervision. In accordance with the jury’s verdicts for Lila, the court entered judgment against the funeral home and Ted, jointly and severally, for the sum of $122,500 in compensatory damages and, by way of punitive damages, $40,000 in Lila’s favor against Ted. Joint and several liability was likewise entered in Victor’s favor against both defendants in the sum of $97,500. Both defendants filed notice of appeal.

Shortly after the entry of these judgments, and while appeal was pending, United Fire brought this action to declare its duties and coverage obligations, if any, under the policy. Meanwhile it refused the defendants’ demand to post a superse-deas bond to protect the funeral home from threatened execution by the Schenkes. Both Ted and the funeral home hired new counsel who filed a counterclaim for bad faith. Counsel also negotiated a settlement of the punitive damages award against Ted in the underlying suit and prevailed upon the Schenkes to delay execution on the remainder of their judgment until the coverage questions raised on this appeal could be resolved.

From a judgment declaring that (1) the funeral home’s liability for negligent supervision was covered under the policy, (2) the insurer was not required to reimburse Ted for his attorney fees, and (3) the funeral home was not entitled to a judgment against the insurer for bad faith, all parties have appealed. Further facts will be detailed as they pertain to the issues before us.

II. Issues on Appeal.

Although the funeral home and Ted Shelly are the appellants, and their challenges pertain to the court’s rejection of their claims of bad faith and failure to defend, we think it logical to begin with the coverage questions posed by United Fire’s cross-appeal. In general, an insurer’s objectively reasonable denial of coverage will preclude liability for bad faith. Morgan v. Am. Family Mut. Ins. Co., 534 N.W.2d 92, 96 (Iowa 1995), overruled on other grounds by Hamm v. Allied Mut. Ins. Co., 612 N.W.2d 775 (Iowa 2000). We turn, then, to the coverage questions.

A. Coverage. The policy issued by United Fire to the funeral home insures against perils described in two divisions, coverage A and coverage B.

Under coverage A, United Fire agrees to pay damages for which “the insured” becomes legally liable because of “bodily injury” caused by an “occurrence.” The term “occurrence” is defined to mean “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” An exclusion under coverage A precludes coverage for bodily injury “expected or intended from the standpoint of the insured.” The language of this exclusion incorporates the common definition of “accident.” See Weber v. IMT Ins. Co., 462 N.W.2d 283, 287 (Iowa 1990) (defining “accident” as “an unexpected and unintended event”).

Under coverage B, United Fire agrees to pay sums the insured becomes legally obligated to pay because of “personal injury” caused by an offense arising out of the insured’s business. In this context, “[personal injury” expressly includes an injury “arising out of ... wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of [leased premises].” Coverage B, however, does not apply to personal injury “[a]rising out of the willful violation of a penal statute or ordinance committed by or with the consent of the insured.”

Under a section of the policy captioned “WHO IS AN INSURED,” the policy lists a corporation (such as the funeral home) as well as its “executive officers” and directors “but only with respect to their duties as [the company’s] officers or directors.” The policy affords similar coverage to employees, who are recognized as having “insured” status “but only for acts within the scope of their employment ... or while performing duties related to the conduct of [the named insured’s] business.”

The district court found, and there is no dispute on appeal, that the jury’s verdicts against Ted Shelly for intentional infliction of emotional distress and indecent exposure were “clearly based on intentional conduct and not on an ‘occurrence’ as defined in the policy.” Thus the policy afforded him no coverage, as a director and employee of the corporation, for damages arising from his sexual conduct with the Schenkes. It also appears undisputed that under coverage B, the policy insured against personal injury damages awarded on the basis of landlord’s abuse of access, a provision not requiring proof of an “occurrence.” Thus the record reveals that statutory damages of $5000, assessed jointly and severally against Ted and the funeral home, have been paid by United Fire.

The question is whether United Fire’s policy covers the jury’s compensatory damages verdict against the funeral home based on its negligent supervision of Ted Shelly. United Fire claims it does not, arguing any emotional distress damages suffered by the Schenkes resulted from Ted’s intentional conduct, not an accidental “occurrence.” The funeral home and the Schenkes, as intervenors, counter that the nature of the claim must be examined and the coverage determined from the perspective of the insured. As to this verdict, they argue, damages arose from alleged negligent supervision by the funeral home, not Ted’s incidental (albeit intentional) conduct. And, the argument continues, any damages attributable to the funeral home on this legal theory were accidental, that is, unexpected and unintended, from its perspective as a named insured.

United Fire insists that its policy affords coverage based on the cause of the bodily injury, not on the type of claim asserted by the plaintiff. Thus it asserts “the standpoint of the insured is irrelevant.” In support of its argument, United Fire draws on similar cases from other jurisdictions that have focused on the operative cause of the damages, not the theory of liability asserted by the plaintiff. See State Farm Fire & Cas. Co. v. Doe, 130 Idaho 693, 946 P.2d 1333, 1336 (1997) (no coverage under homeowner’s policy for intentional sex abuse perpetrated on three-year-old by adolescent son of day care provider); Sweet Home Cent. Sch. Dist. v. Aetna Commercial Ins. Co., 263 A.D.2d 949, 695 N.Y.S.2d 445, 446 (1999) (summarily holding that because operative acts of assault and battery are intentional, “it is of no import” that complaint against employer alleged only negligent hiring, retention and supervision); Green Chimneys Sch. for Little Folk v. Nat’l Union Fire Ins. Co., 244 A.D.2d 387, 664 N.Y.S.2d 320, 321 (1997) (intentional nature of alleged acts of sexual harassment, retaliatory discharge and assault preclude coverage limited to an “occurrence” under general liability policy).

As the district court correctly recognized, however, United Fire’s argument cannot be squared with our prior decisions or the pertinent language of its policy. The policy’s intentional acts exclusion specifically applies to bodily injury “expected or intended from the standpoint of the insured.” (Emphasis added.) This court observed in Weber that the term “expected” in such an exclusion denotes knowledge by the “actor” that certain consequences will flow from the intentional actions. Weber, 462 N.W.2d at 287 (quoting City of Carter Lake v. Aetna Cas. & Sur. Co., 604 F.2d 1052, 1058-59 (8th Cir.1979)). Moreover, United Fire’s policy contains a “separation clause,” expressly providing that “[t]his insurance applies ... [separately to each insured against whom claim is made or ‘suit’ brought.” The conduct ascribed to the actor — Shelly Funeral Home — is not intentional sexual misconduct but negligent supervision of its employee.

In Altena v. United Fire & Cas. Co., 422 N.W.2d 485, 488, 490 (Iowa 1988), this court joined the majority of states which hold that when a non-consensual sex act is committed, the law presumes that the perpetrator intended an injury, thereby precluding coverage under a policy containing an intentional acts exclusion. But a negligent supervision claim addresses the negligent acts and omissions of the employer — not the intentional acts of the employee. Godar v. Edwards, 588 N.W.2d 701, 708 (Iowa 1999); see Mork Clinic v. Fireman’s Fund Ins. Co., 575 N.W.2d 598, 600 (Minn.Ct.App.1998) (recognizing negligent hiring and supervision as additional and actionable cause of injuries suffered when clinic employee abused patients). In contrast to the cases cited by United Fire, other courts faced with similar facts and the identical “occurrence” and intentional act provisions before us have found coverage for negligent hiring and supervision. For example, where an insured corporation’s employee sexually molested a minor child on the business premises, one federal court stated:

[I]f an injury occurs without the agency of the insured, it may be logically termed “accidental,” even though it may be brought about designedly by another person.... The test of whether an injury is a result of an accident is to be determined from the viewpoint of the insured and not from the viewpoint of the one that committed the act causing the injury.

Silverball Amusement, Inc. v. Utah Home Fire Ins. Co., 842 F.Supp. 1151, 1157-58 (W.D.Ark.), aff'd, 33 F.3d 1476 (8th Cir.1994) (citations omitted). Similar holdings from other jurisdictions abound. See, e.g., Am. Employers Ins. Co. v. Doe, 165 F.3d 1209, 1212 (8th Cir.1999) (coverage for diocese found for negligent supervision of priest who molested child); Am. States Ins. Co. v. Borbor, 826 F.2d 888, 895 (9th Cir.1987) (coverage for negligent supervision claim against co-owner of daycare center where other co-owner molested children); Capital Alliance Ins. v. Thorough-Clean, Inc., 639 So.2d 1349, 1352 (Ala.1994) (coverage found for janitorial corporation whose employee used access gained through employment to commit rape; intentional act of employee could not be attributed to employer); Lawson v. Straus, 673 So.2d 223, 226 (La.App.1996) (coverage provided to medical clinic company after doctor employed by clinic sexually assaulted clinic employees); Atl. Employers Ins. Co. v. Tots & Toddlers PreSchool Day Care Ctr., Inc., 239 N.J.Super. 276, 571 A.2d 300, 304 (App.Div.1990) (coverage found for negligent supervision claim against family-owned daycare center where husband molested children); Durham City Bd. of Educ. v. Nat’l Union Fire Ins. Co., 109 N.C.App. 152, 426 S.E.2d 451, 456 (1993) (school covered for negligent supervision of middle school basketball coach who raped student); see generally 43 Am.Jur.2d Insurance § 708, at 766 (1982); David S. Florig, Insurance Coverage for Sexual Abuse or Molestation, 30 Tort & Ins. L.J. 699, 712-21 (1994-95).

We are convinced that, when viewed from the funeral home’s perspective, the Schenkes’ injuries were not intended or expected but fit the definition of “occurrence” found in United Fire’s policy. The district court did not err in finding a duty by United Fire to defend and indemnify the funeral home on this ground.

B. Collateral estoppel. United Fire also argues that even if the funeral home is insured for its negligent supervision of Ted Shelly, the court erroneously denied United Fire’s request to retry the negligent supervision issue in the declaratory judgment action. The court’s denial stemmed from a motion to adjudicate law points made by Schenkes as intervenors. They contended, and the district court ultimately concluded, that the covering language of the policy and principles of collateral estoppel prevented United Fire from relitigating issues of negligence tried in the underlying case.

Fundamental principles guide our analysis of this issue. The doctrine of issue preclusion strives to protect litigants from the “vexation of relitigating identical issues with identical parties or those persons with a sufficient connective interest to the prior litigation.” State ex rel. Casas v. Fellmer, 521 N.W.2d 738, 740-11 (Iowa 1994). By stemming unnecessary litigation, the doctrine also promotes judicial economy. Id. at 741. Under a familiar four-part test, the doctrine applies to prevent relitigation if

(1) the issue determined in the prior action is identical to the present issue; (2) the issue was raised and litigated in the prior action; (3) the issue was material and relevant to the disposition in the prior action; and (4) the determination made of the issue in the prior action was necessary and essential to that resulting judgment.

Am. Family Mut. Ins. Co. v. Allied Mut. Ins. Co., 562 N.W.2d 159, 163-64 (Iowa 1997); see Fellmer, 521 N.W.2d at 741; Hunter v. City of Des Moines, 300 N.W.2d 121, 123 (Iowa 1981).

The Schenkes sought to use the doctrine offensively against United Fire who, although not named as a party in the underlying litigation, plainly met the test of being “so connected in interest with one of the parties in the former action as to have had a full and fair opportunity to litigate the ... issue and be properly bound by its resolution.” Fellmer, 521 N.W.2d at 741. This is not uncommon when insurance coverage is at issue. As one noted commentator states:

One who has undertaken to indemnify another against loss arising out of a certain claim and has notice and opportunity to defend an action brought upon such a claim is bound by the judgment entered in such action, and is not entitled, in an action against him for breach of his agreement to indemnify, to secure a retrial of material facts.

18 George J. Couch, Couch on Insurance § 74.816, at 1087 (2d ed.1983); accord Restatement (Second) of Judgments § 39, at 382 (1982).

United Fire seeks exemption from these rules here, claiming that although it mounted a vigorous defense on behalf of the funeral home, errors in the court’s jury instructions on negligent supervision virtually insured a verdict against it. Because the funeral home and Ted Shelly dismissed their appeals over United Fire’s objection and, thus, the alleged error was never addressed, United Fire claims it was error for the court in the coverage case to bind the parties by the jury’s verdict.

Even if we thought there was merit to the alleged instructional error United Fire cites, the fact is the appeal was not pursued. As will be discussed further, United Fire refused to post a supersedeas bond pending appeal. This, in turn, prompted the funeral home and Ted Shelly to negotiate with the Schenkes and, ultimately, forego their appeal in exchange for Schenkes’ promise not to execute on the judgment until these declaratory judgment proceedings were concluded. Under these circumstances, United Fire is in no position to attack the judgment. See Red Giant Oil Co. v. Lawlor, 528 N.W.2d 524, 531-32 (Iowa 1995). And, pursuant to covering language in its policy, United Fire has obligated itself to “pay those sums that the insured becomes legally obligated to pay as damages.”

Because the issues of negligence tried in the underlying action were identical to those sought to be retried here by United Fire, as well as material and relevant to the resulting judgment, we reject United Fire’s claim that it should have been permitted by the court to relitigate those issues in this declaratory judgment action. No error warranting reversal appears.

C. Ted Shelly’s Attorney Fees. Closely related to the coverage question is Ted Shelly’s claim that the district court erred when it refused to enter judgment against United Fire for attorney fees incurred by him in the defense of the Schenkes’ lawsuit. The court denied the claim because, in its words, “[United Fire] provided Mr. Yagla pursuant to their duty to defend.” As Shelly rightly contends on appeal, that finding is not accurate.

Prior to trial, United Fire retained the services of attorney Gene Yagla to defend the funeral home and its employees under the policy while preserving its right to contest coverage. Because of the coverage dispute and possible excess exposure it identified, United Fire encouraged the funeral home (through its director, Ted Shelly) to consult with private counsel. As it turned out, the funeral home’s longtime local counsel, Mike Carr, worked side-by-side with Yagla in preparing for trial. The record reveals they pursued a joint strategy to defend the case on the ground that Ted’s sexual involvement with the Schenkes was consensual and, in any event, the funeral home neither knew about nor condoned it.

On the first morning of trial, circumstances changed. Counsel for the Schenkes balked when he learned that both Yagla and Carr planned to defend both defendants and each expected to exercise strikes of the jury panel, present arguments, and cross-examine each witness. So Yagla withdrew his representation of Ted Shelly, leaving Carr to defend Ted’s interests during the eight-day trial and post-trial proceedings that followed. Pursuant to this arrangement, Carr billed Ted $16,956.24. Ted’s cross-appeal challenges the trial court’s refusal to enter judgment against United Fire for this expense.

Again, fundamental rules guide our resolution of this issue. “The duty to defend is broader than the duty to indemnify.” First Newton Nat’l Bank v. Gen. Cas. Co., 426 N.W.2d 618, 630 (Iowa 1988). The distinction exists because a plaintiffs basis of recovery is necessarily indeterminable until a case is tried. Id. Put another way, the duty to defend arises

whenever there is potential or possible liability to indemnify the insured based on the facts appearing at the outset of the case. In other words, the duty to defend rests solely on whether the petition contains any allegations that arguably or potentially bring the action within the policy coverage. If any claim alleged against the insured can rationally be said to fall within such coverage, the insurer must defend the entire action. In case of doubt as to whether the petition alleges a claim that is covered by the policy, the doubt is resolved in favor of the insured.

Employers Mut. Cas. Co. v. Cedar Rapids Television Co., 552 N.W.2d 639, 641 (Iowa 1996) (citation and quotations omitted).

From the outset, Schenkes’ petition asserted facts invoking United Fire’s duty to defend on several theories, including allegations against both defendants for landlord’s abuse of access. United Fire has satisfied the Schenkes’ judgment to the extent of this claim. Yet it withdrew its representation of Ted Shelly on this or any other claim arguably covered by the policy on the first day of trial. This was plainly contrary to its contractual obligation and duty to defend. See Clark-Peterson Co. v. Indep. Ins. Assocs., Ltd., 514 N.W.2d 912, 915 (Iowa 1994); New Hampshire Ins. Co. v. Christy, 200 N.W.2d 834, 840 (Iowa 1972). The district court’s erroneous ruling on this point must be reversed and judgment entered for Ted Shelly against United Fire on this claim.

D. Insured’s Counterclaim for Bad Faith. In response to United Fire’s declaratory judgment action, the funeral home mounted a sweeping attack on the insurer’s defense strategy or alleged lack thereof. Unsuccessful in those arguments at trial, the funeral home has appealed, citing error in the court’s failure to recognize “several categories of unreasonable conduct that have been judicially labeled as bad faith.” Because most of the funeral home’s arguments address questions of trial strategy, not bad faith, and the remainder center on issues of policy construction that were fairly debatable, we affirm the district court’s judgment for United Fire on this claim.

The parties agree that to establish a claim for first-party bad faith, the insured must prove two facts: (1) that the insurer had no reasonable basis for denying benefits under the policy and, (2) the insurer knew, or had reason to know, that its denial was without basis. Kiner v. Reliance Ins. Co., 463 N.W.2d 9, 12 (Iowa 1990). The first element is objective, the second subjective. Brown v. Danish Mut. Ins. Ass’n, 550 N.W.2d 171, 175 (Iowa Ct.App.1996). If a claim is “ ‘fairly debatable,’ the insurer is entitled to debate it, whether the debate concerns a matter of fact or law.” Dolan v. Aid Ins. Co., 431 N.W.2d 790, 794 (Iowa 1988) (citation omitted); accord Morgan, 534 N.W.2d at 96. “Whether a claim is fairly debatable is appropriately decided by the court as a matter of law.” Morgan, 534 N.W.2d at 96.

Here the funeral home’s claims of bad faith fall into three general categories. First it claims United Fire wrongly interpreted the coverage provisions of the policy and unreasonably delayed in advising the funeral home of its position. Second it assails defense counsel’s trial preparation and strategy, including the initial decision to proceed without hiring separate attorneys for the corporation and Ted Shelly. Third, it faults United Fire’s failure to post a supersedeas bond to prevent execution on the insured’s property while appeal was pending. We shall address each allegation briefly.

1. Delaying coverage decision. In a nutshell, the funeral home claims that United Fire’s dual decision to defend under a reservation of rights and then, following an adverse verdict, to file this declaratory judgment action constitutes bad faith. Like the district court, we find no merit to this contention. The case presented a conundrum from the outset, challenging the parties and the court to sort out intentional from negligent conduct, the knowing actions of an agent from the unsuspecting ignorance of his principal, all overlaid with claims for emotional distress damages under an insuring agreement that covers “bodily injury” in the case of an “occurrence” but “personal injuries” when they stem from other conduct. United Fire’s detailed reservation of rights letter furnished timely notice to its insured that coverage was in dispute. That its position on the disputed issues was objectively reasonable is confirmed by our discussion of coverage elsewhere in this opinion. Moreover, United Fire’s decision to defend the tort action and await suit over coverage pending outcome of the litigation reflects respect for the funeral home’s reputation in the community, rather than bad faith.

2. Trial strategy. The funeral home insists that United Fire had its own interests in mind, rather than its insured’s, when it blindly pursued a “consenting adults” defense, failed to recognize the obvious conflict between the funeral home and Ted Shelly, and insufficiently prepared to counter the merits of the Schenkes’ claims as well as their proof of emotional injury. Beyond the hyperbole, however, these complaints amount to no. more than an attack on strategic decisions made by the insurer’s able and experienced counsel. An insurer’s “sub-par” investigation and evaluation of a claim cannot, standing alone, support a claim of bad faith. Reuter v. State Farm Mut. Auto. Ins. Co., 469 N.W.2d 250, 254 (Iowa 1991). The district court evaluated the factual record on these issues and resolved the controversy in the insurer’s favor. No ground for reversal appears.

3. Failure to post supersedeas bond. The funeral home makes much of the fact that United Fire appealed the Schenkes’ judgment but, “in callous disregard of [the insured’s] plight,” refused to post a supersedeas bond. It alleged at trial, and urges on appeal, that this was evidence not only of bad faith but maliciousness justifying an award of punitive damages. In support it offers the brief response of United Fire’s general counsel who, when questioned about this alleged obligation, agreed “off the top of [his] head,” that the insurer did not have a choice. In his words, “I don’t think they get anywhere if they don’t file an appeal bond on behalf of their insured.”

The district court rejected the lawyer’s casual opinion, relying instead on policy language that plainly makes the decision discretionary with the insurer. Given the insurer’s good-faith doubts about coverage, and the underlying purpose of the bond to secure the judgment, we agree it was reasonable for United Fire not to place itself in a position of assuming liability on the bond no matter the outcome of the appeal. The funeral home cites no authority to the contrary.

Finally, in the absence of proof that United Fire acted in bad faith or was “stubbornly litigious,” the district court correctly denied the funeral home’s plea for attorney fees and expenses in the coverage action. Clark-Peterson Co., 514 N.W.2d at 916.

III. Disposition.

In summary, we affirm the district court’s denial of the funeral home’s claims for bad faith, affirm its judgment for the funeral home on the question of coverage for negligent supervision based on the jury’s verdict in the underlying tort suit, and reverse the court’s ruling on United Fire’s duty to defend Ted Shelly. We remand to the district court for entry of a judgment against United Fire for attorney fees incurred by Ted Shelly in his defense of the litigation involving the Schenkes.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED ON APPEAL; AFFIRMED ON CROSS-APPEAL.

      . The petition, as recast, factually asserted that Ted Shelly “on many number of occasions ... entered into the apartment residence of the Plaintiffs and engaged in continuous and ongoing outrageous conduct and conversation, including but not limited to, exposing his genitals and masturbating in the presence of the elderly Plaintiffs while watching pornographic movies or videos on a VCR provided by [Shelly], and while reading pornographic magazines brought to the Plaintiffs' home by [Shelly].''

      . United Fire objected to an instruction telling the jury that it could find the funeral home liable for negligent supervision if it found “Shelly Funeral Home ... failed to adequately supervise Defendant Ted Shelly.” United Fire claimed there was no factual basis for this fundamental legal premise because Ted, as sole manager of the funeral home, had no supervisor and, hence, allowed himself to commit wrongful acts. The Schenkes and the funeral home countered this argument with proof that Ted was a minority stockholder in the corporation, only one of three directors and that the other directors and stockholders neither knew of, nor condoned, his conduct.

      . United Fire does not contest the number of hours devoted by Carr to legal services performed for Ted Shelly, or the reasonableness of the hourly rates charged.

      . Pertinent language under "Supplementary Payments — Coverages A and B” concerning the cost of bonds to release attachments within the policy limits states: "We do not have to furnish these bonds.”


author: PAUL H. ANDERSON, Associate Justice.

text:
    In re Petition for Disciplinary Action Against Thornton P. ANDERSON, an Attorney at Law of the State of Minnesota.
    No. C6-92-1241.
    Supreme Court of Minnesota.
    April 19, 2002.
   ORDER

PAUL H. ANDERSON, Associate Justice.

On April 3, 2000, the court placed respondent Thornton P. Anderson on unsupervised probation for two years for failing to pay a law-related judgment in favor of a client. In re Anderson, 608 N.W.2d 860, 860-61 (Minn.2000). The order required respondent to make monthly payments to the client and provided that if the judgment was not satisfied within two years, the Director of the Office of Lawyers’ Professional Responsibility could move for a two-year extension of probation.

The Director has filed a motion for extension of probation because, although respondent has been making payments on the law-related judgment, the judgment has not been satisfied. Respondent has not filed a response to the motion.

IT IS HEREBY ORDERED that respondent shall remain on supervised probation for an additional two years subject to the following conditions:

(1) Respondent shall cooperate fully with the Director’s Office in its efforts to monitor compliance with this probation and promptly respond to the Director’s correspondence by the due date. Respondent shall cooperate fully with the Director’s investigation of any allegations of unprofessional conduct that may come to the Director’s attention. Upon the Director’s request, respondent shall provide authorization for release of information and documentation to verify compliance with the terms of this probation.

(2) Respondent shall abide by the Minnesota Rules of Professional Conduct.

(3) Respondent shall make monthly payments of at least $75 to the client on the judgment she has against respondent. Respondent shall provide proof to the Director’s Office of each monthly payment.

(4) Respondent shall make affirmative efforts to (a) increase the amount of the monthly payments to the client and/or (b) obtain financing to either make a lump sum payment to the client on the judgment or to make a complete settlement offer in satisfaction of the judgment. Respondent shall provide the Director’s Office with proof of his efforts at least every three months during the period of probation. In the event that the parties settle, evidenced by a copy of a satisfaction of judgment supplied to the Director’s Office, respondent’s reporting obligations shall be terminated.

(5) If at the end of the two-year extension of probation the judgment has not been completely satisfied, the Director, upon motion to the Court and without need for a petition for disciplinary action, may request the Court to extend respondent’s probation for an additional period of two years, again subject to the other conditions set out above.


author: RUSSELL A. ANDERSON, Associate Justice.

text:
    Raymond H. WAGNER, Respondent, v. CITY OF ST. PAUL, Self-Insured, Relator, Special Compensation Fund, Intervenor.
    No. C3-02-261.
    Supreme Court of Minnesota.
    April 24, 2002.
    Lome L. Bescheinen, Borkon, Ramstad, Mariani, Fishman & Carp, Ltd., Minneapolis, MN, Lewis H. Seitz, Seitz & Associates, Ltd., Golden Valley, MN, for respondent.
    Timothy S. Crom, Todd D. Gardner, Jardine, Logan & O’Brien, P.L.L.P., St. Paul, MN, for relator.
    Karen Swanton, St. Paul, MN, for inter-venor.
   ORDER

RUSSELL A. ANDERSON, Associate Justice.

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that the decision of the Workers’ Compensation Court of Appeals filed January 18, 2002, be, and the same is, affirmed without opinion. See Minn. R. CivApp. P. 136.01, subd. 1(b).

Employee is awarded $600 in attorney fees.


author: EDWARD C. STRINGER, Associate Justice.

text:
    Sheila A. JUDD, Relator, v. DOEGE PRECISION MACHINING, INC., and State Fund Mutual Insurance Company, Respondents, and Juno Tool, Inc., and Employers Insurance of Wausau, Respondents.
    No. C3-02-132.
    Supreme Court of Minnesota.
    April 24, 2002.
    DeAnna M. McCashin, Alexandria, MN, Employee-Appellant.
    Deborah E. Kulinski, St. Paul, MN, Employer-Insurer, Juno/W ausau-Respon-dents.
    Mark S. Lorentzen, Minneapolis, MN, Employer-Insurer,' Doege/State Fund-Respondents.
   ORDER

EDWARD C. STRINGER, Associate Justice.

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that the decision of the Workers’ Compensation Court of Appeals filed January 4, 2002, be, and the same is, affirmed without opinion. See Minn. R. CivApp. P. 136.01, subd. 1(b).