author: GILBERTSON, Chief Justice.

text:
    2006 SD 95
    Tom KAISER and Laura Kaiser, Plaintiffs and Appellants, v. UNIVERSITY PHYSICIANS CLINIC, and Elizabeth Dimitrievich, Defendants and Appellees.
    No. 23652.
    Supreme Court of South Dakota.
    Argued April 26, 2006.
    Decided Nov. 1, 2006.

      Ronald A. Parsons, Jr., Scott A. Abdal-lah of Johnson, Heidepriem, Miner, Mar-low & Janklow, L.L.P., Sioux Falls, South Dakota and Mark W. McNeary of McNeary & Anderson, Aberdeen, South Dakota, Attorneys for appellants.
    Melissa Hinton, Edwin E. Evans, Timothy M. Gebhart of Davenport, Evans, Hur-witz <& Smith, Sioux Falls, South Dakota, Attorneys for appellees.
   GILBERTSON, Chief Justice.

[¶ 1.] Tom and Laura Kaiser (Kaisers) brought a medical malpractice action against University Physicians Clinic and Elizabeth Dimitrievieh, M.D. (Defendants). A jury verdict was rendered in favor of Defendants. Kaisers appeal contending the circuit court erred when it admitted a previously undisclosed exhibit into evidence, allowed the use of two other previously undisclosed exhibits for illustrative purposes, and ruled that Defendants’ expert witness could testify about the exhibits to the jury. We reverse and remand for a new trial.

FACTS AND PROCEDURE

[¶ 2.] Laura and Tom were married in June 1999, and began trying to conceive a child a year after their marriage. The couple was unable to conceive and sought the assistance of an obstetrics and gynecology (OB-GYN) specialist in Aberdeen, South Dakota. Several attempts with intrauterine (artificial) insemination failed to result in a pregnancy. The couple moved to Sioux Falls, South Dakota, in August of 2000. In early 2002, the couple scheduled an appointment with Keith Hanson, M.D., a fertility specialist in Sioux Falls, to resume trying to start their family. However, the day before the appointment Laura discovered she was already pregnant.

[¶ 3.] Laura remained under Hanson’s care through her first trimester and was then referred to Elizabeth Dimitrievieh, M.D., a board-certified OB-GYN specialist at University Physicians Clinic in Sioux Falls. The pregnancy progressed fairly normally except the baby was in a breech position during most of the pregnancy. Laura’s due date was calculated as September 20, 2002.

[¶ 4.] On Monday, September 16, 2002, Laura saw Dimitrievieh for a rash. While at Dimitrievich’s office, Laura’s blood pressure became slightly elevated and she began having a contraction. Dimitrievieh decided to schedule a cesarean section (c-section) for the following morning. Later that evening, Laura began experiencing tightness around her chest and rib cage and telephoned Dimitrievieh. Dimitrievieh advised Laura to meet her at Sioux Valley Hospital for an evaluation.

[¶ 5.] After examining Laura, Dimitrie-vich determined that Laura was in early labor. She also determined that Laura had a borderline temperature and an elevated pulse rate of 112 beats per minute. Dimitrievieh ordered a complete blood count (CBC), which showed a high white count of 20,000 and a “left shift.” The “left shift” gave Dimitrievieh concern that Laura might have a bacterial infection. Given these findings and the baby’s breech presentation, Dimitrievieh determined that an immediate c-section was required. Dimitrievieh ordered a dose of ampicillin, a broad spectrum penicillin, prior to the e-section to cover the possibility of a bacterial infection.

[¶ 6.] At 1 a.m. on Tuesday, September 17, 2002, Spencer Kaiser was delivered by c-section, weighing nine pounds and five ounces. Following the birth, Dimitrievieh brought the uterus outside the abdominal cavity per her standard practice in order to repair the c-section incision. The procedure was routine except Dimitrievich'no-ticed an abnormal vein above the incision in a place blood vessels are normally not seen. Dimitrievich believed the vein was bleeding, so she sutured it. However, the stitches she put in caused more bleeding and Dimitrievich applied a product that assists in halting bleeding. Once the bleeding ceased, Dimitrievich placed the uterus back in the abdominal cavity. Dim-itrievich then ordered antibiotics for an additional twenty-four hours after the c-section due to Laura’s previously elevated heart rate, white blood cell count, and the bleeding from the uterine abnormality. Because the c-seetion had been routine, Dimitrievich did not send the placenta to the pathology laboratory for biopsy and it was discarded per routine hospital procedures.

[¶ 7.] Laura’s recovery appeared to be progressing normally until Thursday, September 19, approximately two days after the surgery. Laura vomited and reported she felt “like things weren’t moving inside,” that she felt bloated and nauseous, and that her stomach was hardening. Dimitrievich ordered a change from a normal diet to a liquid diet, suspecting an ileus — a dysfunction of the bowel common after surgical procedures. On Saturday, September 21, Laura spiked a fever of 102.2 degrees Fahrenheit. Dimitrievich ordered a dose of triple antibiotics and demerol for the pain. Later that evening, Dimitrievich called Maria Bell, M.D., a gynecologist with a subspecialty in gynecological surgery, for a surgical consult.

[¶ 8.] After examining Laura on Monday, September 23, Bell advised her that if she did not improve on the antibiotic treatment in the next twenty-four hours, exploratory surgery would be necessary. On Tuesday, September 24, Bell along with surgeon Robert George, M.D., performed exploratory surgery on Laura to determine the cause of her symptoms.

[f 9.] The surgeons discovered a massive infection in Laura’s peritoneal cavity. The peritoneal cavity and the surface of her organs, including her uterus, bowels, liver and spleen were covered in pus and extensive adhesions, a condition known as peritonitis. Bell and George examined the large and small intestine visually and by “running,” meaning examining by hand, the small intestine and most of the large intestine for evidence of injury. No injury to either the large or the small intestine was found, nor did the surgeons find any sign of an injury that might have occurred during the c-section and subsequently healed over. According to George, there were so many adhesions and so much pus that it was not possible to determine whether an injury had occurred.

[¶ 10.] After cleaning out the peritoneal cavity as best they could, Bell and George concluded that it was necessary to perform a total hysterectomy to remove the uterus, cervix, ovaries and fallopian tubes. Laura’s appendix was also removed. Bell made the decision to remove the organs because of concerns the organs might be the source of the infection, and that it would not clear up if they were left inside the peritoneal cavity. No portions of the large or the small intestine were removed.

[¶ 11.] Organ tissues and cultures from the infected peritoneal fluid were sent to the pathology laboratory for testing. The pathology report indicated that two of eleven samples taken from Laura’s uterus contained microscopic spots of “foreign vegetable matter” measuring six to seven microns each embedded in the surface of the uterine tissue. The pathologist was able to identify it as plant or vegetable matter due to the cell walls of the material, as only plant or vegetable matter has such cell wall formations. However, the vegetable matter could not be identified as partially digested food, nor could its source be determined from the limited samples taken from the uterus. The only definitive determination that could be made was that it was of plant origin as opposed to animal or mineral in origin. The vegetable matter embedded in the uterus was determined not to be the source of the infection, as very little pus was present at their respective locations. Based on the cultures of the peritoneal fluid it was determined that two bacteria normally found in the large intestine, Bacteroides uniformis and Kleb-siella oxytoca, were present in the peritoneal cavity. However, because the placenta had already been disposed of, no further pathological testing could be performed in an attempt to identify the source and cause of the infection, or the nature of the vegetable matter found on the uterus.

[¶ 12.] Laura recovered from the infection and was discharged from the hospital four days after the surgery. She suffered a recurrence of the infection that resulted in a pelvic abscess. However, it was treated without surgical intervention and she recovered.

[¶ 13.] In August 2003, Tom and Laura brought suit against Defendants alleging medical malpractice. Kaisers’ theory of the case was that Dimitrievich had perforated Laura’s bowel during the c-section and that leakage from the bowel had caused the massive infection. Kaisers contended that the presence of the vegetable matter on the surface of Laura’s uterus was a marker that indicated leakage from the bowel had occurred. Kaisers also theorized that the presence of the two bacteria commonly found in the bowel were evidence of the perforation. Although no evidence of a perforation was found by Bell and George when they ran the bowels during the exploratory surgery, Kaisers’ theory was that a small perforation caused by Dimitrievich spontaneously healed over after fecal matter was released into the peritoneal cavity.

[¶ 14.] Defendants’ theory of the case was that Dimitrievich did not injure Laura’s bowel during the c-section. Defendants contended the vegetable matter had been present since before the c-section and its identification as “vegetable” did not identify its source, nor indicate it was food matter ingested by Laura. Identification as vegetable matter only indicated its general character as not being of animal or mineral origin but rather of plant origin. Defendants argued that the source of the vegetable matter was not relevant to the infection as it predated the c-section by at least one week and possibly up to several months.

[¶ 15.] Defendants argued the bacteria found in the culture were common but not unique to the bowel and offered two theories on how the bacteria could have entered Laura’s peritoneal cavity: contaminated amniotic fluid or an ascending vaginal infection resulting from cross-contamination from the anus. Defendants also argued that if there had been a bowel injury, Laura would have become ill within twenty-four to forty-eight hours, with seventy-two hours as the outermost range for an illness to develop after the surgery, rather than almost five days after the surgery.

[¶ 16.] On June 8, 2004, as part of the discovery process, Kaisers served a request for production of documents (third set) concerning expert witnesses. The request asked Defendants to produce (a) a complete copy of each witnesses’ files, (b) a copy of all photographs or other images made in reviewing the case, and (c) copies of any and all other documents, records, notes, and written material in possession of expert witnesses in relation to investigation, analysis and opinions in the matter. Eleven physicians were deposed in preparation for the trial, including the Defendants’ pathology expert witness, Dale Sno-ver, M.D., who was deposed on September 8, 2004. In December 2004, Kaisers filed a motion to compel discovery after Defendants refused to provide general literature and other materials relied upon by their experts.

[¶ 17.] A hearing was held on the matter on January 4, 2005. Defendants argued that no such general literature was in their possession or was being relied upon by Snover as the basis for his opinion. Instead, Snover’s expert testimony was based on his years as a practicing surgical pathologist. The circuit court noted at the hearing that Snover’s reliance on his experience for his expert testimony went to his credibility and the weight of his opinion. The circuit court also noted that if Snover arrived at trial and testified to general literature upon which he had relied, then Kaisers were free to use his deposition testimony to the contrary to impeach his credibility. The circuit court then ordered Defendants to provide whatever new material they had within ten (10) days of their receipt of the same. Both parties' agreed to supplement any material upon which their respective experts were relying within ten days of receipt.

[¶ 18.] Snover’s deposition testimony focused on the vegetable matter found on Laura’s uterus and how long it had been present prior to the c-section. Snover testified that the vegetable matter was surrounded by giant cells, cells that form in the presence of a foreign body and attempt to break it down at a cellular level using enzymes and destroy or eliminate it from the body. He further testified that the giant cells had not simply surrounded the vegetable matter, but had infiltrated it in order to break it apart. Snover testified that the presence and actions of the giant cells provided evidence that the vegetable matter had been present on Laura’s uterus for more than a week prior to the c-section. He estimated it had been present for a month to several months prior to the c-section, and possibly longer. Snover further testified that he did not know the source of the vegetable matter, but that the source was irrelevant to his conclusion that it had been present prior to the date of the c-section. Snover conceded that the two bacteria identified in Laura’s peritoneal fluid are most commonly found in the bowel.

[¶ 19.] Kaisers’ experts testified during depositions that the presence of giant cells was either not significant or that the vegetable matter had to have been deposited during the c-section. Kaisers’ experts noted that vegetable matter is not natural to the surface of the uterus and had to have come from somewhere. They identified the most likely source was the bowel via a perforation made by Dimitrievieh at the time of the c-section. Kaisers’ experts did not eliminate the possibility that an ascending infection from the vaginal tract or a post-operative infection at the site of the surgical incision could have caused the massive infection. However, Kaisers’ experts testified that in their opinion the more likely scenario was a perforation of the bowel at the time of the c-section given the presence of both the vegetable matter and the two bacteria Bacteroides unifor-mis and Klebsiella oxytoca.

[¶ 20.] The case was tried to a Minne-haha County jury on March 15-25, 2005. On Monday, March 21, 2005, the morning of the sixth full day of trial, Snover arrived to testify using as an exhibit a PowerPoint presentation, labeled Exhibit 109, with comparative models of plant material, giant cells and scar tissue formation. Kaisers objected to three slides in the presentation and to any expert testimony regarding the three slides.

[¶ 21.] The circuit court conducted an evidentiary hearing outside the presence of the jury to determine the admissibility of the three exhibits. At the hearing, Kaisers’ counsel argued that the exhibits were not timely disclosed and that he was unable to fully test the evidence on cross-examination due to untimely disclosure. Kaisers argued the three exhibits should not be admitted or testified to by Snover as it was both an irregularity in the proceedings that would prevent Kaisers from having a fair trial, and was unfair surprise.

[¶ 22.] Defendants stated that the three photographs contained on the PowerPoint slides in question had been taken within the last week prior to trial as pathology specimens came across Snover’s desk. The pathology specimen used to create slide eight of the presentation became known to Snover the Friday before he was scheduled to testify. No specific time was identified for when Snover first received the pathology specimens used in slides ten and eleven, other than to say Snover stacked specimens on his desk for later review and then determined which to use in his testimony the week before he was scheduled to testify. Defendants’ counsel stated that she first saw the PowerPoint slides on Sunday evening when Snover arrived in Sioux Falls and she met with him to review his testimony for the following day. Kaiser’s attorney did not challenge this representation.

[¶ 23.] The circuit court did not make a specific finding that Defendants failed to comply with the ten-day order to supplement, nor was there any indication of willfulness or bad faith on the part of Defendants noted by the circuit court. The circuit court appears to have accepted the statements of Defendants’ counsel that the pathology slides became known to Snover the week before trial. The circuit court also made no specific finding as to whether Defendants failed to seasonably supplement the substance of Snover’s testimony per the requirements of SDCL 15-6-26(e)(1).

[¶ 24.] Instead, after the eviden-tiary hearing, the circuit court admitted slide eight as substantive evidence, but limited the admission of slides ten and eleven as demonstrative or illustrative evidence citing SDCL 19-9-7 (Rule 104(a)), 19-9-8 (Rule 104(b)), and 19-9-12 (Rule 105). In so doing the circuit court made no mention that Defendants had failed to seasonably supplement Snover’s deposition as required by SDCL 15 — 6—26(e)(1), or that any sanctions were applicable under SDCL 15-6-87. The circuit court instructed the jury as follows at the time the exhibits were offered and entered into evidence:

10 and 11, I am only going to receive for a limited purpose and that is for demonstrative purposes. 10 and 11, I guess is tissue from another patient. And the doctor is going to use those, I guess, to explain some things to the jury, but — so you can consider it for that purpose, but 10 and 11 doesn’t prove anything else. So, all right, with that, it’s received. The circuit court admitted Slide 8 into evidence outright, while Slides 10 and 11 were admitted for illustrative purposes.

[¶ 25.] Snover testified that slide eight contained an image of scar tissue from a skin biopsy site from an undisclosed patient. Snover testified as follows: “So the question that comes up, and Dr. Smith [Kaisers’ expert] testified to this on Wednesday when he was talking about this material, he said that had he seen scar tissue there he would have been more concerned that this plant material was old rather than new.” Snover testified that the slide illustrated what scar tissue looks like at two to three weeks after biopsy in order for the jury to compare it to the scar tissue along side the vegetable matter on Laura’s uterus, rather than take his word concerning the presence of scar tissue alongside the vegetable matter on her uterus.

[¶ 26.] Snover testified that slide ten contained images of plant material found on an undisclosed patient’s perforated intestine approximately one to two days after an injury to the bowel. Snover’s testimony focused on the lack of giant cells one to two days after the plant material leaked from the perforation. Snover testified that slide eleven contained images of two pieces of plant material found in an undisclosed female patient three to six weeks after she suffered a rectal-vaginal fistula that caused plant material to leak out of the bowel. Snover focused on the presence of giant cells surrounding the plant material, and how one of the pieces of plant matter appeared to be broken up by giant cells at the three to six week mark and also had scar tissue next to it. Snover pointed out for the jury that the other piece of vegetable matter from the same patient had not been broken apart by the giant cells and no scar tissue had yet to appear at the three to six week mark.

[¶ 27.] After six full days of trial, the jury deliberated for two days before returning a verdict for the Defendants. The circuit court polled the jury, and indicated on the record that the six man and six woman jury was split ten to two for the Defendants. The circuit court entered judgment on the verdict on March 29, 2005, which was served on Kaisers on March 31, 2005. The circuit court subsequently denied a motion for a new trial. This appeal followed.

[¶28.] Kaisers raise one issue on appeal: Whether Kaisers were denied a fair trial when the circuit court permitted testimony and use of previously undisclosed exhibits by the Defendants’ expert pathologist.

STANDARD OF REVIEW

[¶ 29.] The trial court’s evidentiary rulings are presumed correct and will not be overturned absent a clear abuse of discretion. State v. Perovich, 2001 SD 96, ¶11, 632 N.W.2d 12, 15 (citing State v. Goodroad, 1997 SD 46, ¶9, 563 N.W.2d 126, 129). “An abuse of discretion refers to a discretion exercised to an end or purpose not justified by, and clearly against reason and evidence.” State v. Henry, 1996 SD 108, ¶ 10, 554 N.W.2d 472, 473 (quoting In re A.R.P., 519 N.W.2d 56, 62 (S.D.1994) (quoting State v. Moriarty, 501 N.W.2d 352, 355 (S.D.1993); State v. Devall, 489 N.W.2d 371, 374 (S.D.1992))). As this Court recently noted in State v. Asmussen: “With regard to the rules of evidence, abuse of discretion occurs when a trial court misapplies a rule of evidence, not when it merely allows or refuses questionable evidence.” 2006 SD 37, ¶ 13, 713 N.W.2d 580, 586 (citing State v. Guthrie, 2001 SD 61, ¶ 30, 627 N.W.2d 401, 415 (citing Koon v. United States, 518 U.S. 81, 100, 116 S.Ct. 2035, 2047, 135 L.Ed.2d 392 (1996))).

ANALYSIS AND DECISION

[¶30.] Kaisers argue that Defendants’ violation of the circuit court’s discovery order under SDCL 15-6-26(e)(3), their failure to seasonably supplement discovery under SDCL 15-6-26(e)(l), and the circuit court’s subsequent admission of those slides into evidence denied them a fair trial. Kaisers contend that the use of the exhibits permitted Snover to draw a direct comparison between the appearance of the vegetable matter and surrounding cellular structures on Laura’s uterus and those found on Snover’s other patients, “directly suggesting to the jury that since the appearance was different and the giant cell formation was not proceeding at the same rate, the vegetable matter could not have emanated form a bowel injury at the time of Laura’s cesarean section.” Kaisers argue that Snover’s ability to use the previously undisclosed slides precluded them from counteracting his testimony.

[¶ 31.] The legislative history, concerning the Federal Rules that govern pretrial discovery, is instructive. In Hickman v. Taylor, the United States Supreme Court examined Federal Rules 26(e) to 37 and concluded the rules were “one of the most significant innovations of the Federal Rules of Civil Procedure.” 329 U.S. 495, 500, 67 S.Ct. 385, 388, 91 L.Ed. 451 (1947). The Court continued:

Thus civil trials in the federal courts no longer need be carried on in the dark. The way is now clear, consistent with recognized privileges, for the parties to obtain the fullest possible knowledge of the issues and facts before trial.

Id. at 501, 67 S.Ct. at 389, 91 L.Ed. 451.

[¶ 32.] At the time of trial in this case, SDCL 15-6-26(e) provided in relevant part:

A party who has responded to a request for discovery with a response that was complete when made is under no duty to supplement his response to include information thereafter acquired, except as follows:
(1) A party is under a duty seasonably to supplement his response with respect to any question directly addressed to (A) the identity and location of persons having knowledge of discoverable matters, and (B) the identity of each person expected to be called as an expert witness at trial, the subject matter on which he is expected to testify, and the substance of this testimony.
(3) A duty to supplement responses may be imposed by order of the court, agreement of the parties, or at any time prior to trial through new requests for supplementation of prior responses.

(emphasis added).

[¶ 33.] Under SDCL 15-6-37(b), a violation of a court order to supplement responses may, at the court’s discretion, result in reasonable sanctions against the disobedient party, but not as a punishment for “general misbehavior.” See Chittenden & Eastman Co. v. Smith, 286 N.W.2d 314, 316 (S.D.1979) (citing Dorsey v. Academy Moving & Storage, Inc., 423 F.2d 858 (5th Cir.1970)). Sanctions may include “[a]n order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence.” SDCL 15-6-37(b)(2)(B). Additional sanctions may include the imposition of costs for bringing a motion to compel production under SDCL 15-6-37(a)(4) and 15 — 6—37(b)(2); an order that the matters or facts involved be taken to be established under SDCL 15-6-37(b)(2)(A); an order striking out pleadings or staying further proceedings until the order is obeyed, dismissing the action or rendering a default judgment against the disobedient party under SDCL 15-6-37(b)(2)(C); an order of contempt of court under SDCL 15-6-37(b)(2)(D).

[¶ 34.] The purpose of sanctions under SDCL 15-6-37(b) is “‘to compel production of evidence and to promote, rather than stifle, the truth finding process.’ ” Haberer v. Radio Shack, a Div. of Tandy Corp., 1996 SD 130, ¶20, 555 N.W.2d 606, 610 (quoting Schrader v. Tjarks, 522 N.W.2d 205, 210 (S.D.1994) (quoting Magbuhat v. Kovarik, 382 N.W.2d 43, 45 (S.D. 1986))). More drastic sanctions under SDCL 15-6-37(b) are appropriate when failure to comply is the result of willfulness, bad faith or fault. Schrader, 522 N.W.2d at 210 (reversing exclusion of testimony as sanction for failure to disclose identity of an expert rebuttal witness); Magbuhat, 382 N.W.2d at 45 (reversing order limiting scope of depositions to discovery by defendants and order denying use of those depositions by plaintiffs at trial for failure by plaintiffs to supplement earlier interrogatories with names of expert witnesses); Chittenden & Eastman Co., 286 N.W.2d at 316 (reversing order of default judgment entered after sanction striking defendant’s answers and affirmative defenses was entered when plaintiff was unable to fully complete interrogatories due to inaccessibility of records through no fault of his own).

[¶ 35.] We have not had occasion to precisely define the meaning of the term “seasonably supplement” in the context of SDCL 15-6-26(e)(l). However, when considering whether a party has failed to seasonably supplement expert witnesses and the substance of their testimony, our holdings have generally focused on three concerns. First, we have focused less on the time element and more on the existence or lack of bad conduct by the party supplementing close to or at trial. See Isaac v. State Farm Mut. Auto. Ins. Co., 522 N.W.2d 752, 762 (S.D.1994); Schrader, 522 N.W.2d at 210. Second, we have given consideration to whether the expert witness or evidence concerned a crucial issue in the case. See Haberer, 1996 SD 130, ¶¶ 21-22, 555 N.W.2d at 610-11; Isaac, 522 N.W.2d at 762; Schrader, 522 N.W.2d at 210; Fullmer v. State Farm Ins. Co., 498 N.W.2d 357, 361-62 (S.D.1993). And finally, we have considered whether the expert witness or the substance of his testimony was substantially different from that disclosed during the discovery process. Haberer, 1996 SD 130, ¶¶ 21-22, 555 N.W.2d at 610-11; Fullmer, 498 N.W.2d at 361-62.

[¶ 36.] We have upheld a circuit court for refusing to admit previously undisclosed evidence when the offending party knew the name of its expert witnesses and of the existence of the evidence at least twenty-four days prior to trial, yet failed to disclose the information until three days before trial. Isaac, 522 N.W.2d at 762. However, we reversed a circuit court for refusing testimony from a plaintiffs rebuttal expert witnesses disclosed ten days before the start of trial, but eighteen days after plaintiffs deposed one expert witness for the defense and eleven days after plaintiffs deposing two additional expert witnesses that challenged the heart of plaintiffs case. Schrader, 522 N.W.2d at 208-12.

[¶ 37.] When the substance of the expert witness’s testimony is alleged to have changed or expanded beyond the scope of discovery, our holdings take into consideration the degree of any such change or expansion. See Haberer, 1996 SD 130, ¶¶ 21-22, 555 N.W.2d at 610-11; Fullmer, 498 N.W.2d at 361-62. We have upheld a circuit court’s ruling granting a new trial as being within its discretion when a party failed to supplement per the provisions of SDCL 15-6-26(e) that its expert witness had changed his opinion two weeks prior to trial. Fullmer, 498 N.W.2d at 361-62 (noting that in bifurcated trial, insurer’s expert witness’s change in testimony “whipsawed” plaintiff with inconsistent positions taken by insurer in two trials as to cause of plaintiffs injury). However, when an expert witness’s testimony did not change and interrogatories included the fact that the expert’s testimony would be based on examination of similar undamaged equipment as that involved in the case, but failed to seasonably supplement where testing of similar equipment would be conducted, we have upheld the circuit court’s discretion to admit such evidence. Haberer, 1996 SD 130, ¶¶ 21-22, 555 N.W.2d at 610-11.

[¶ 38.] Because SDCL 15-6-26(e) is modeled after Federal Rule 26(e), decisions by federal courts interpreting and applying the federal rule provides assistance in applying our state rule. See Miller v. Hernandez, 520 N.W.2d 266, 269 (S.D.1994). Several federal courts have held exclusion of evidence is the proper remedy when a party fails to seasonably supplement pursuant to the 1970 version of Rule 26. See Smith v. Ford Motor Co., 626 F.2d 784, 794 (10th Cir.1980) (citing Coleco Industries, Inc. v. Berman, 567 F.2d 569 (3d Cir.1977), cert denied, 439 U.S. 830, 99 S.Ct. 106, 58 L.Ed.2d 124 (1978); Tabatchnick v. G.D. Searle & Co., 67 F.R.D. 49 (D.N.J.1975)). In Smith, the Tenth Circuit Court of Appeals found reversible error where a party failed to supplement the nature of its expert’s testimony:

Before an attorney can even hope to deal on cross-examination with unfavorable expert opinion he must have some idea of the basis of that opinion and the data relied upon. If the attorney is required to await examination at trial to get this information, he often will have too little time to recognize and expose vulnerable spots in the testimony.

Id. at 799 (quoting Jack H. Friedenthal, Discovery and Use of an Adverse Party’s Expert Information, 14 Stan.L.Rev. 455, 486 (1962)). Similarly, many federal courts have found reversible error when testimony is admitted without prior disclosure pursuant to Rule 26. Id. at 794 (citing Voegeli v. Lewis, 568 F.2d 89, 96 (8th Cir.1977); Shelak v. White Motor Co., 581 F.2d 1155 (5th Cir.1978); Weiss v. Chrysler Motors Corp., 515 F.2d 449 (2d Cir. 1975)).

[¶ 39.] Decisions from other state jurisdictions are also helpful. Courts that have found reversible error where a party has failed to seasonably supplement have done so based on the other party’s inability to effectively conduct cross-examination. The Hawaii Court of Appeals examined the legislative history concerning the 1970 Amendments to the Federal Rules of Civil Procedure. Swink v. Cooper, 77 Hawaii 209, 881 P.2d 1277, 1282 (1994). The court noted that the Advisory Committee to the 1970 Amendments contemplated Rule 26(e) violations could be enforced by the exclusion of evidence at trial. Id. Ultimately, the court upheld the exclusion of testimony from an expert in a medical malpractice action because opposing counsel was given no advance knowledge of a change in the expert’s theory. Id.

[¶40.] An accompanying text to the first draft of the 1970 Amendments to the Federal Rules of Civil Procedure notes:

In cases of this character (involving expert testimony), a prohibition . against discovery of information held by expert witnesses produces in acute form the very evils that discovery has been created to prevent. Effective cross-examination of an expert witness requires advance preparation. The lawyer even with the help of his own experts frequently cannot anticipate the particular approach his adversary’s expert will take or the data on which he will base his judgment on the stand.

Smith, 626 F.2d at 798 (citing McGlothlin, Some Practical Problems in Proof of Economic, Scientific, and Technical Facts, 23 FRD 467, 478 (1958)).

[¶ 41.] The Supreme Court of Kansas upheld a trial court’s exclusion of expert testimony where a defendant hospital failed to seasonably supplement the fact that its expert physician relied on tissue slides in forming the basis of his opinion. Barnes v. St. Francis Hospital & School of Nursing, Inc., 211 Kan. 315, 507 P.2d 288 (1973). The defendant’s expert did not mention the slides during his deposition. Id. at 294. The court noted: “we believe [the expert] should seasonably have amended his deposition by disclosing that he had examined the pathological slides in forming his opinion....” Id.

[¶ 42.] Kaiser’s counsel asked Dr. Sno-ver in his deposition what materials he relied upon in forming his opinion that the vegetable matter found on Kaiser’s uterus predated her c-section. Dr. Snover responded that his experience as a medical professor and pathologist formed the basis of his opinion. He could not provide any literature that supported his theory, nor could he recall any specific patients or other materials he had encountered.

[¶ 43.] In addition to the deposition, Kaiser’s counsel served a request for production of documents requiring Deten-dants to produce “with regard to expert Dale Snover, M.D.:

(a) A complete copy of his file related to this matter;
(f) A copy of all photographs or other images made in reviewing this matter;
(g) Copies of any and all other documents, records, notes, and written material in his possession relating to his investigation, analysis, and opinions in this matter.”

Later, Kaiser filed a motion to compel discovery after Defendants refused to provide all the materials its experts were relying on in their opinions. At the hearing, the following exchange took place between the circuit court and defense counsel:

The Court: And I assume that if the doctor comes up with something new before the trial he will divulge it, and I don’t see any problem with that. Counsel for the defense, do you have any problem with that? That’s the way we usually handle those things.
Defense Counsel: I would agree. Any time an expert will rely upon something at trial, you supplement your disclosure and say this is new information that he’s going to rely upon. And we don’t have any problem with that.

[¶44.] At trial, Dr. Snover for the first time relied on two photos of giant cell formation in and around vegetable matter found in the bodies of two undisclosed patients. Dr. Snover also relied on a third photo of scarring in a third undisclosed patient. Despite the requests for production of documents, the motion to compel, the circuit court’s order, and the requirements of SDCL 15-6-26(e)(l), these photos were not provided to Kaiser’s counsel until the sixth day of trial, only minutes before Dr. Snover was scheduled to testify. The eleventh-hour production of these photos is not consistent with the ongoing duty to seasonably supplement as required by SDCL 15-6-26(e)(l).

[¶ 45.] In this case, Dr. Snover labeled the presence of vegetable material as a “critical issue.” He used the slides to demonstrate his theory to the jury that the vegetable matter predated the c-section. Dr. Snover commented, “[w]hen you see a picture it’s not just me telling you, but hopefully you will be able to see it yourself.” When comparing the plant material in the slides to Kaiser’s, Dr. Snover testified further, “you can see [from the other patient’s slides that] while there is plant material here, this is one to two days, there is no foreign body giant cell reaction.” Later, Dr. Snover held up the third picture and said, “I have illustrated again from — just so you will be able to recognize scar tissue when you see it and don’t have to trust me.”

[¶ 46.] Since this evidence was undisclosed prior to trial, Kaiser’s counsel was unable to effectively cross-examine Dr. Snover. Dr. Snover testified on cross-examination that “given the histological findings I illustrated” the vegetable matter was present in Kaiser’s body for more than one week prior to the c-section. On another occasion, Dr. Snover stated “I believe the histological evidence, stands by itself.” Kaiser’s counsel had no opportunity to examine, test, or consult with his own expert concerning the photos. Nor was Kaiser’s counsel able to ascertain whether the unknown patient’s conditions and surgeries were sufficiently similar to Kaiser’s. Thus, what had previously been a battle of expert opinions had now become a battle of opinions plus the new physical evidence supporting one expert’s view.

[¶ 47.] Defendants argue that Kaiser was on notice that the giant cell theory would be at issue, and therefore, there was no surprise. However, its argument fails to consider that Kaiser was not on notice that three other undisclosed patient’s cases would be used to physically demonstrate, through pictorial evidence, that only Dr. Snover’s opinion was scientifically corroborated.

[¶ 48.] Defendants also maintain that there was no change in Dr. Snover’s position or testimony given at the deposition. However, during his deposition, Dr. Sno-ver testified that he had no physical evidence or medical literature to support his theory. Yet at trial, he was permitted, through the use of the three undisclosed slides, to prove his theory through physical evidence of the formation of giant cells and scarring in other patients. Therefore, to this extent, the basis and support for Dr. Snover’s opinion did change at trial. Through the admission of these undisclosed exhibits, Dr. Snover was allowed to change his testimony through foundational enhancement and now provide the supporting physical evidence that he could not provide when Kaiser’s counsel took his deposition.

[¶ 49.] Permitting Dr. Snover to use the undisclosed photos was an abuse of discretion. The fact that Kaiser’s counsel was unable to effectively cross-examine Dr. Snover about a central issue in the case harmed Kaiser’s substantial rights. The prejudice is obvious and substantial. We reverse and remand for a new trial consistent with this opinion.

[¶ 50.] SABERS, KONENKAMP, and ZINTER, Justices, and, DOBBERPUHL, Circuit Judge, concur.

[¶ 51.] DOBBERPUHL, Circuit Judge, sitting for MEIERHENRY, Justice, disqualified.

      . A normal white count is between 4,500 and 10,000 cells per microliter. Potential common causes of an elevated white count include: infection; certain medications, such as corticosteroids, antibiotics or anti-seizure drugs; severe physical or emotional stress; chronic bone marrow diseases such as a mye-loproliferative disorder; and acute or chronic leukemia. A high white count does not identify a specific problem. Instead, it may indicate an underlying condition, http:/ /www. mayoclinic.com/health/high-white-blood-cell-count/AN00372 (last visited April 6, 2006).

        . A micron is a unit of measure equal to one thousandth (10— ) of a millimeter or one millionth (10— ) of a meter. American Heritage College Dictionary 861 (3d ed.1997). The approximate equivalent is .000039 of an inch. http://www.m-w.com/mw/table/metricsy.htm (last visited April 7, 2006).

      . A demonstrative or illustrative exhibit "is admissible if it clearly depicts the factual situations and will allow the trier of facts to more clearly understand a witness’s descriptions." State v. Hartman, 256 N.W.2d 131, 137 (S.D. 1977) (citing McCormick on Evidence, § 213 (E. Cleary Ed., 2d Ed. 1972)).

      . SDCL 19-9-7 (Rule 104(a)) provides: "Preliminary questions concerning the qualification of a person to be a witness, the existence of a privilege, or the admissibility of evidence shall be determined by the court, subject to the provisions of § 19-9-8. In malting its determination it is not bound by the rules of evidence except those with respect to privileges.”

      .SDCL 19-9-8 (Rule 104(b)) provides: "When the relevancy of evidence depends upon the fulfillment of a condition of fact, the court shall admit it upon, or subject to, the introduction of evidence sufficient to support a finding of the fulfillment of the condition.”

      . SDCL 19-9-12 (Rule 105) provides: "When evidence which is admissible as to one party or for one purpose but not admissible as to another party or for another purpose is admitted, the court, upon request, shall restrict the evidence to its proper scope and instruct the jury accordingly.”

      . This year, we amended SDCL 15-6-26(e) to reflect the 1993 Amendment to Federal Rule 26(e). See 2006 S.D. Sess. Laws ch. 290.

      . Black’s Law Dictionary defines “seasonable” as “[w]ithin the time agreed on; within a reasonable time.” 1379 (8th ed. 2004).

      . In addition to amending SDCL 15-6~26(e) to reflect the 1993 Amendment to Federal Rule 26(e), on July 1, 2006 we also adopted SDCL 15-6-37(c), which provides for harsher sanctions if a party fails to seasonably supplement. See 2006 SD Laws ch 309. Specifically, under SDCL 15-6-37(c), a party who fails to seasonably supplement is "not, unless such failure is harmless, permitted to use as evidence at trial, at a hearing, or on a motion any information not so disclosed.” However, courts can impose other sanctions in lieu of exclusion.

      . At oral argument Kaisers' attorney conceded he found no fault with the ethical conduct of the Defendant’s attorneys concerning this issue. As previously noted, counsel for the Defendant did not become aware of the exhibits until the night before Dr. Snover testified.

      . It is argued that a request for a continuance by Kaiser would have sufficed. The Kansas Supreme Court dealt with this very issue in a similar case. Hagedom by Hagedom v. Stormont-Vail Reg. Med. Center, 238 Kan. 691, 715 P.2d 2 (1986). The court noted:
      How much delay this [a recess] would have occasioned during the trial, and whether it would have rectified the situation, we cannot say. The fact remains that the basis for the doctor's opinion had changed, and there was no supplementation of his deposition.

        Id. at 7. In this case, the circuit judge may have entertained the possibility of a continu-anee or a recess so Kaiser's counsel could consult with his own experts or depose Dr. Snover concerning the pictures. Whether and to what extent that would have been practical is hard to say. Nevertheless, the circuit court admitted the evidence. Kaiser’s counsel objected to the pictures, moved for a new trial, and appealed the issue. He should not be required to raise every possible remedy short of exclusion. However, the circuit court on remand may consider alternatives in fashioning a remedy for the reversible error in this case.


source: Caselaw Access Project

author: ANDERSON, RUSSELL A., Chief Justice. PAGE, Justice ANDERSON, PAUL H., Justice

license: Public Domain

text:
    In the Matter of the WELFARE OF the CHILD OF: T.T.B. and G.W., Parents.
    Nos. A05-1615, A05-1631.
    Supreme Court of Minnesota.
    Oct. 19, 2006.
    Rehearing Denied Dec. 13, 2006.
    Amy J. Klobuchar, Hennepin County Atty, Mary M. Lynch, Asst. Atty, Minneapolis, for appellant Hennepin Cty. H.S.P.H.D.

      Thomas James Vollbrecht, Guy-Uriel E. Charles, Faegre & Benson, L.L.P., Minneapolis, for respondent Yankton Sioux Tribe.
    Jacqueline Marie Beaulieu, Catherine LaRoque, Minneapolis, for respondent T.T.B.
    Jonathan G. Steinberg, Chrastil and Steinberg, P.L.L.P., Minneapolis, for appellant and respondent Guardian Ad Li-tem.
    Leonardo Castro, Chief, Fourth Judicial Public Defender, Peter W. Gorman, Asst. Public Defender, Minneapolis, for respondent G.W.
    Janine LePage, Asst. County Atty, Brainerd, for amicus curiae Minnesota County Atty’s Ass’n.
    Mark D. Fiddler, Fiddler Law Office, Minneapolis, for amicus curiae Nat. Ass’n of Counsel for Children.
    Mark C. Tilden, Native American Rights Fund, Boulder, CO, for amicus curiae Nat. Indian Child Welfare Ass’n.
    Joseph F. Halloran, Jacobson, Buffalo, Schoessler & Magnuson, Ltd., St. Paul, for amici curiae Bois Forte Band of Chippewa, Grand Portage Band of Chippewa, White Earth Band of Chippewa, Upper Sioux Indian Community and Prairie Island Indian Community.
   OPINION

ANDERSON, RUSSELL A., Chief Justice.

This appeal arises from a juvenile protection matter concerning custody of an Indian child. Under both the Indian Child Welfare Act, 25 U.S.C. §§ 1901-1963 (2000) (ICWA), and the Minnesota Indian Family Preservation Act, Minn.Stat. §§ 260.751-.835 (2004), proceedings involving custody of an Indian child who does not reside on and is not domiciled on the reservation must be transferred to the jurisdiction of the tribe upon proper request and “in the absence of good cause to the contrary.” 25 U.S.C. § 1911(b) (2000); Minn.Stat. § 260.771, subd. 3 (2004). The district court in this case concluded there was good cause under ICWA and Minnesota law to deny the transfer of jurisdiction to the tribal court. On appeal, the court of appeals reversed and remanded the matter with instructions to transfer jurisdiction. We reverse and reinstate the district court order.

In April 2003, Hennepin County filed a petition to terminate parental rights or transfer permanent legal and physical custody of A.G., an infant, from respondent mother, T.T.B., and father, M.G. T.T.B. did not appear at the scheduled November 10, 2003, pretrial hearing on this petition and was found in default. On November 15, 2003, T.T.B. gave birth to a son, X.T.B., in Rhode Island. In October 2003, prior to the child’s birth, T.T.B. and respondent G.W., who is described in the proceedings below as the father of X.T.B., had traveled from Minnesota to the Rhode Island home of A.G.M. Upon learning of the open custody proceeding involving A.G. in Minnesota, Rhode Island took X.T.B. into protective custody on November 19, 2003.

On November 21, 2003, Hennepin County filed an amended petition in AG.’s case, adding X.T.B. to the petition. The amended petition sought to terminate T.T.B.’s parental rights to X.T.B., or to transfer permanent legal and physical custody of X.T.B. The same day, the county moved ex parte to have X.T.B. placed in protective care. The district court, acting under Minn.Stat. § 260C.175, subd. 1 (2004), ordered X.T.B. taken into custody under Minn.Stat. § 260C.151, subd. 6 (2004), and under Minn. R. Juv. Prot. P. 28.02. X.T.B. was returned to Minnesota from Rhode Island on or about December 22, 2003, and was placed with his half-sister, A.G., in the home of S.G., A.G.’s paternal grandmother.

At the emergency protective care hearing on December 23, 2003, the district court found the county had made the pri-ma facie showing required under Minn. R. Juv. Prot. P. 30.08, to continue protective care of X.T.B., and the court transferred interim legal custody of X.T.B. to the county. On December 31, 2003, the county filed a separate petition seeking to terminate parental rights or transfer permanent legal and physical custody of X.T.B., and X.T.B. was dismissed from the case involving his half-sister, A.G. T.T.B. was served with the county’s petition to terminate parental rights or to transfer permanent legal and physical custody of X.T.B. on January 9, 2004.

T.T.B. is a member of the Oglala Sioux Tribe, G.W. is a member of the Yankton Sioux Tribe, and X.T.B. was declared by both tribes to be eligible for membership. Both tribes received notice of the proceedings by registered mail on January 16, 2004. In addition, a representative of the county conferred with each of the tribes before placing X.T.B. in the home of S.G.

On February 17, 2004, T.T.B. and G.W. appeared in court for an admit/deny hearing, although the record does not reflect when, or if, G.W. was formally served with the petition to terminate parental rights or transfer permanent custody. At that hearing, a denial was entered on T.T.B.’s behalf, but because G.W. had only recently been appointed counsel, an admit/deny hearing on his behalf was continued to April 20, 2004.

At the continued admii/deny hearing on April 20, 2004, T.T.B.’s counsel told the court that mother favored transfer of custody to A.G.M. in Rhode Island. Counsel for G.W. indicated that G.W.’s mother, B.W., was “interested in being a foster care provider, slash, possible permanency placement” for X.T.B. Again no formal denial was entered on behalf of G.W., but the district court set a pretrial hearing for June 10, 2004, and a trial date of July 22, 2004, for the termination of parental rights and permanent placement. On April 30, 2004, the Yankton Sioux Tribe moved to intervene and participate in the proceedings, indicating by affidavit filed on May 26, 2004, that it was in the best interests of X.T.B. to be granted permanency “in a home approved by” the tribe.

A family group conference addressing the permanent placement of X.T.B. was held on June 4, 2004, but after considerable discussion, the participants could not reach a consensus. T.T.B. and G.W. favored transfer of custody of X.T.B. to A.G.M. in Rhode Island or, alternatively, transfer of custody to G.W. In addition, S.G., the paternal grandmother of X.T.B.’s half-sister, A.G., sought to adopt X.T.B.

Following the family group conference, the district court set deadlines of July 8, 2004, for the exchange of witness and exhibit lists; July 15, 2004, for filing pretrial motions; and July 22, 2004, for the permanency trial. When the schedule proved problematic for G.W.’s counsel, the district court extended the deadline for filing witness and exhibit lists and pretrial motions to July 22, 2004, and postponed the trial to a date to be agreed upon. The court indicated the delay would likely be a matter of “several weeks.”

On July 16, 2004, the county filed an amended petition for the termination of parental rights or transfer of custody that added G.W.’s address and tribal affiliation, added procedural history since the filing of the initial petition in December 2003, and added further grounds for termination of parental rights with respect to both T.T.B. and G.W. On July 21, 2004, G.W. moved for dismissal, claiming the court lacked jurisdiction and disputing grounds for termination of his parental rights. At the same time, G.W. moved to transfer custody of X.T.B. to A.G.M. in Rhode Island. In support of his motion, G.W. filed an affidavit from the Yankton Sioux Tribe’s ICWA director, advocating transfer of custody to A.G.M.

The next day, July 22, 2004, T.T.B. and G.W. moved to transfer jurisdiction of the proceedings to the Yankton Sioux Tribal Court. Later the same day, the district court issued orders setting a hearing on the various pretrial motions for August 12, 2004, an evidentiary hearing on October 5, 2004, and a permanency trial date of October 27, 2004. During the August 12, 2004 hearing, the court denied G.W.’s motion to dismiss, but deferred its ruling on the motion to transfer jurisdiction to allow the Yankton Sioux tribe additional time to file a written acceptance of jurisdiction. Also during the August 12 hearing, the county indicated it would no longer seek termination of parental rights and instead would pursue only permanent placement of X.T.B.

In connection with the potential placement of X.T.B. with A.G.M., Rhode Island conducted a home study under the Interstate Compact on the Placement of Children. The Interstate Compact obligates the receiving state to determine whether placement is suitable, and bars physical transfer of the child until authorities in the receiving state notify the sending agency that the proposed placement does not appear to be contrary to the interests of the child. Minn.Stat. § 260.851 (2004). By written report dated August 5, 2004, Rhode Island recommended against placement of X.T.B. with A.G.M. in Rhode Island. Rhode Island’s decision effectively barred the district court from transferring custody of X.T.B. to A.G.M. for either temporary placement purposes or adoption. See id.

On September 24, 2004, the Yankton Sioux Tribe moved to transfer jurisdiction to its tribal court. The motions to transfer jurisdiction came on for hearing on October 5, 2004. The district court notified the parties by telephone on October 15, 2004, that the motions to transfer jurisdiction were denied. The written order, dated October 27, 2004, cited as grounds for denying transfer that the requests came at an advanced stage of the proceedings. The matter proceeded to trial on stipulated facts; and by order filed on February 17, 2005, legal and physical custody of X.T.B. was transferred to S.G., with whom he had resided since December 23, 2003. The order provided for reasonable visitation/parenting time and recognized that S.G. agreed to ongoing contact with the tribe. Post-trial motions for new trial were denied.

On the appeal of G.W. and the Yankton Sioux Tribe, the court of appeals concluded that good cause did not exist to deny transfer of jurisdiction to the tribal court. The court of appeals therefore reversed and remanded the matter to the district court for transfer of jurisdiction to the Yankton Sioux Tribal Court. We granted expedited review.

I.

Review of the motions to transfer jurisdiction made by T.T.B., G.W., and the Yankton Sioux Tribe requires consideration of two federal acts, several Minnesota statutes, and our own rules of juvenile protection procedure. Consequently, it may be helpful to set out briefly the statutes and rules.

A.

Under the Supremacy Clause, U.S. Const, art. VI, the decision whether to transfer jurisdiction of child custody proceedings to a tribal court must meet the minimum requirements of the Indian Child Welfare Act. Congress enacted ICWA to address the “rising concern in the mid-1970s over the consequences * * * of abusive child welfare practices that resulted in the separation of large numbers of Indian children from their families and tribes through adoption or foster care placement, usually in non-Indian homes.” Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 32, 109 S.Ct. 1597, 104 L.Ed.2d 29 (1989). The aim of the Act is to protect the interests of Indian children and to promote the stability and security of Indian communities and tribes. 25 U.S.C. § 1902 (2000).

ICWA establishes minimum standards for, among other things, the placement of Indian children “in foster or adoptive homes which will reflect the unique values of Indian culture.” 25 U.S.C. § 1902. To that end, ICWA grants the tribal court exclusive jurisdiction over child custody proceedings involving an Indian child who resides or is domiciled on the reservation, or who is a ward of the tribe. 25 U.S.C. § 1911(a) (2000). Minnesota law similarly provides exclusive jurisdiction in the tribal court when the child resides on the reservation. Minn.Stat. § 260.771, subd. 1 (2004).

In the case of an Indian child who neither resides nor is domiciled within the reservation, ICWA and Minnesota law recognize concurrent but presumptively tribal jurisdiction, allowing the child’s tribe to intervene “at any point” in the state court proceedings. 25 U.S.C. § 1911(b) (2000) (jurisdiction); 25 U.S.C. § 1911(c) (2000) (intervention); Minn.Stat. § 260.771, subd. 3 (2004) (granting state courts jurisdiction over proceedings involving an Indian child who does not reside within the reservation or who is not in the legal custody of a person or agency pursuant to an order of a tribal court); Minn.Stat. § 260.761, subd. 6 (2004) (giving the Indian child’s tribe the right to intervene at any point in state court proceedings). ICWA requires that proceedings involving foster care placement of a child neither residing nor domiciled within the reservation be transferred to the jurisdiction of the child’s tribe upon the petition of either parent, the child’s Indian custodian, or the child’s tribe, “in the absence of good cause to the contrary.” 25 U.S.C. § 1911(b). Minnesota law similarly requires transfer of the proceedings to the tribal court “in the absence of good cause to the contrary.” Minn.Stat. § 260.771, subd. 3.

But ICWA and Minnesota law also allow either parent to block the transfer of jurisdiction to the tribal court and allow the tribal court to decline jurisdiction. 25 U.S.C. § 1911(b); Minn.Stat. § 260.771, subd. 3. Thus, under both ICWA and Minnesota law, the state court will retain jurisdiction over foster care placement of an Indian child who neither resides nor is domiciled on the reservation if: (1) transfer of jurisdiction to the tribal court is not requested; (2) either parent objects to transfer; (3) the child’s tribal court declines jurisdiction; or (4) the state court finds “good cause” to deny a request for transfer.

Neither ICWA nor Minnesota law define or provide examples of “good cause” to deny a motion to transfer jurisdiction to the tribal court. However, the Bureau of Indian Affairs (BIA) published guidelines in 1979 for use by state courts in Indian child custody proceedings. BIA Guidelines for State Courts; Indian Child Custody Proceedings, 44 Fed. Reg. 67,-584-67,595 (November 26, 1979). These guidelines are not intended to have binding legislative effect, id. at 67,584, but we have referred to them as offering “some structure to state courts.” Matter of Custody of S.E.G., 521 N.W.2d 357, 361 (Minn.1994) (stating that the BIA Guidelines offer “some structure to state courts” in deciding whether to place an Indian child in a non-Indian home). The guidelines specifically note that the use of the term “good cause” was “designed to provide state courts with flexibility in determining the disposition of a placement proceeding involving an Indian child.” Id. at 362 (quoting BIA Guidelines, 44 Fed. Reg. at 67,584).

The BIA Guidelines indicate that a request to transfer jurisdiction “shall be made promptly after receiving notice of the proceeding.” BIA Guidelines, 44 Fed. Reg. at 67,590. According to the commentary, there is good cause to deny the transfer request when a party who could have petitioned earlier “waits until the case is almost complete to ask that it be transferred to another court and retried.” Id. In addition, the BIA Guidelines offer five criteria for determining “good cause” not to transfer the proceeding to tribal court, one of which is relevant here: “The proceeding was at an advanced stage when the petition to transfer was received and the petitioner did not file the petition promptly after receiving notice of the hearing.” Id. at 67,591. The BIA Guidelines also caution, however, that socioeconomic conditions or the perceived adequacy of tribal social services or court systems may not be considered in determining the existence of good cause. Id.

B.

In ascertaining whether this case was at an advanced stage of the proceedings when the motions to transfer were filed and whether the parties seeking transfer acted promptly after receiving notice, we look next to the federal Adoption and Safe Families Act of 1997 (ASFA), Pub.L. 105-89, 111 Stat. 2115 (1997) (codified primarily, but not exclusively at 42 U.S.C. § 670 et. seq. (2000)). As explained by subsequent legislation, ASFA “promotes stability and permanence for abused and neglected children by requiring timely de-cisionmaking in proceedings to determine whether children can safely return to their families or whether they should be moved into safe and stable adoptive homes or other permanent family arrangements outside the foster care system.” Act of Oct. 17, 2000, Pub. L. 106-314, § 2(3), 114 Stat. 1266 (2000). To that end, ASFA mandates that the state make reasonable efforts to preserve and reunify families, except where a court has determined that reasonable reunification efforts are not required. 42 U.S.C. § 671(a)(15)(B), (D) (2000). ASFA requires, as a condition of receiving federal funding for foster care payments, that the state establish procedures that ensure each child in foster care “has a permanency hearing in a family or juvenile court or another court of competent jurisdiction (including a tribal court) within 12 months of entering foster care.” 42 U.S.C. § 675(5)(C) (2000).

Minnesota law reflects the requirements of ASFA. Under Minn.Stat. § 260C.001, subd. 3 (2004),

[t]he purpose of the laws relating to termination of parental rights is to ensure that:
(1) when required and appropriate, reasonable efforts have been made by the social services agency to reunite the child with the child’s parents in a home that is safe and permanent; and
(2) if placement with the parents is not reasonably foreseeable, to secure for the child a safe and permanent placement, preferably with adoptive parents or a fit and willing relative through transfer of permanent legal and physical custody to that relative.

In addition, MinmStat. § 260C.201 (2004) sets outside limits for permanency determinations. Section 260C.201, subd. 11 (2004), requires a permanency hearing to determine the permanent status of a child not later than 12 months after the child is placed in foster care. For children under the age of 8 years, section 260C.201, subd. lla(a) (2004), requires a hearing within 6 months of the child’s out-of-home placement at which the court is to review the progress of the case, the parent’s progress on the out-of-home placement plan, and the provision of services to parent and child. If the court finds that the parent is not complying with the out-of-home placement plan, or is not maintaining regular contact with the child, the court may order the responsible social services agency to develop a plan for permanent placement of the child away from the parent and to file a petition in support of such permanent placement plan. Id., subd. lla(c)(2) (2004).

C.

The statutory procedures mandated by ASFA and codified in Minnesota Statutes, chapter 260C are mirrored in our Rules of Juvenile Protection Procedure. A permanent placement determination hearing involving a child under the age of 8 years is to commence within 6 months of the child’s placement away from the parent. Minn. R. Juv. Prot. P. 39.02, subd. 1(b). If the court finds that the parent is not complying with the case plan, and the permanency plan is either transfer of custody or termination of parental rights, within 30 days of the permanent placement determination hearing, the responsible social services agency must file a petition supporting the plan. Id. The court must hold a trial on a petition for transfer of custody within 30 days of its filing or within 90 days in the case of a petition for termination of parental rights. Id. Rule 39.05 requires the district court to make a finding and issue an order, within 15 days of the conclusion of the trial, regarding whether the statutory grounds set forth in the petition have or have not been proven. “The timelines for a permanent placement determination hearing are maximum.” 13 Robert Scott & John O. Sonsteng, Minnesota Practice — Juvenile Law & Practice 429 (3d ed. Supp. 2005).

II.

In reliance primarily upon the BIA Guidelines within the context of federal and state placement-determination deadlines, the district court determined that the proceedings in this case were at an advanced stage when the motions to transfer jurisdiction to the tribal court were filed, and that the parties had not acted promptly after receiving notice of the proceedings. Whether there was “good cause” to deny transfer of jurisdiction presents a mixed question of law and fact. While the parties disputed the ultimate placement of the child, the facts surrounding the timing of the motions to transfer jurisdiction to the tribal court were not disputed. The application of a statute to essentially undisputed facts is a question of law that this court reviews de novo. Varda v. Northwest Airlines Corp., 692 N.W.2d 440, 444 (Minn.2005).

A.

This juvenile protection matter commenced with a petition for termination of parental rights or transfer of permanent legal and physical custody of the child, filed on December 31, 2003. The county served the petition on both tribes involved in this case by registered mail on January 16, 2004. For over 7 months, the parties litigated permanent placement. A home study was conducted in Rhode Island. A family group conference was held. Witness and exhibit lists were due on July 8, 2004, pretrial motions were due on July 15, and the matter was originally scheduled for trial on the permanency petition for July 22, 2004. But due to various motions, including the joint motion to transfer jurisdiction filed on July 22, 2004, and the tribe’s separate motion to transfer jurisdiction filed on September 28, 2004, as well as the complicated nature of the proceedings, the permanency trial was postponed to October 27, 2004. By the time the motions for transfer were filed, the procedural rules required the court to have already held the 6-month permanent placement determination hearing. The record reflects that the initial motion for transfer was not made until the day on which the permanency trial was initially scheduled. Accordingly, on these facts examined in the context of all the circumstances, we conclude that these proceedings were at an advanced stage when the motions for transfer were filed.

Respondents, however, contend that the July 22, 2004 joint motion to transfer jurisdiction cannot be considered to have been filed at an advanced stage of the proceedings because it was filed less than a week after the county filed an amended petition to terminate parental rights and more than 3 months before the eventual permanency trial on October 27, 2004. The juvenile protection procedural rules not only permit, but require, the filing of amended petitions at various stages of the proceedings. For example, before a permanent placement determination hearing, the county attorney must file a written report describing the progress of the case and the ease plan; this written report may take the form of a petition to transfer permanent legal and physical custody. Minn. R. Juv. Prot. P. 42.04, subd. 1(a). As a result, it seems to us that the effect of an amended petition on any given stage of the proceedings needs to be addressed on a case-by-case basis, taking into account the nature of the amendment. In this case, the amendment merely served to update undisputed procedural history and did not change the nature of the proceedings. As for the timing of the joint transfer motion in relation to the rescheduled trial, the motion was filed on the same day that witness lists, exhibit lists, and motions in limine were due, indicating that the proceedings were at an advanced stage when the transfer requests were made.

B.

In determining whether there was good cause to deny transfer of jurisdiction to the tribal court, the BIA Guidelines also take into consideration whether the party moving to transfer jurisdiction has acted promptly after receiving notice of the proceedings:

Either parent, the Indian custodian or the Indian child’s tribe may, orally or in writing, request the court to transfer the Indian child custody proceeding to the tribal court of the child’s tribe. The request shall be made promptly after receiving notice of the proceeding. If the request is made orally it shall be reduced to writing by the court and made a part of the record.

BIA Guidelines, 44 Fed. Reg. at 67,590. The commentary notes that inclusion of a time requirement “is designed to encourage the prompt exercise of the right to petition for transfer in order to avoid unnecessary delays.” Id. at 67,591. The commentary also notes:

If a transfer petition must be honored at any point before judgment, a party could wait to see how the trial is going in state court and then obtain another trial if it appears the other side will win. * * * The Act was not intended to authorize such tactics and the “good cause” provision is ample authority for the court to prevent them.

Id. at 67,590.

As indicated, the record shows that T.T.B. and the Yankton Sioux Tribe were served with the petition to terminate parental rights or transfer permanent custody in January 2004. G.W. appeared in court on the petition in February 2004 and was appointed counsel at that time. But T.T.B. and G.W. did not move to transfer jurisdiction until July 22, 2004; and the Yankton Sioux Tribe, which had intervened and participated in some of the proceedings, indicated no interest in transferring jurisdiction until September 24, 2004. Given that T.T.B., G.W., and the Yankton Sioux tribe had notice from the outset of the case that permanent placement of the child was the intended disposition, but waited 6 months and, in the case of the Yankton Sioux tribe, 8 months, to exercise their right to move for transfer of jurisdiction, we conclude that the motions for transfer of jurisdiction in this case were not made promptly after receiving notice of the proceedings.

To be sure, tribal courts are a proper forum for Indian child custody cases. “[W]e must defer to the experience, wisdom, and compassion of the * * * tribal courts to fashion an appropriate remedy” in Indian child welfare cases. Holyfield, 490 U.S. at 54, 109 S.Ct. 1597 (quoting In re Adoption of Halloway, 732 P.2d 962, 972 (Utah 1986)). And we are not unmindful that the good-cause exception for the transfer of cases to tribal courts has been a source of conflict, with some critics arguing that the exception ought to be abrogated because it too easily serves as a means to circumvent ICWA. Kg., Jeanne Louise Carriere, Representing the Native American: Culture, Jurisdiction, and the Indian Child Welfare Act, 79 Iowa L.Rev. 585, 648 (1994) (recommending elimination of good-cause exception). Another commentator, however, found that “today most state courts and state child welfare agencies seem to be making broad-based efforts to comply with the statutory directives, although the occasional blatant flouting of the Act undoubtedly occurs.” Barbara Ann Atwood, Flashpoints Under the Indian Child Welfare Act: Toward a New Understanding of State Court Resistance, 51 Emory L.J. 587, 622 (2002). Here, there is nothing in the record to suggest that resort to the good-cause exception was done for purposes of undermining ICWA. Instead, the record reflects much effort on the part of the district court and the county to comply with ICWA’s directives.

In summary, we conclude that the BIA Guidelines’ “good cause” criteria were met here, and the district court had good cause to deny the motions to transfer jurisdiction of the case to the tribal court. Accordingly, we reverse the court of appeals’ decision and reinstate the district court’s order denying transfer of jurisdiction to the tribal court.

Reversed; district court order denying transfer of jurisdiction to the tribal court reinstated.

PAGE, Justice

(dissenting).

I respectfully dissent. The policy underlying the Indian Child Welfare Act (ICWA) is

to protect the best interests of Indian children and to promote the stability and security of Indian tribes and families by the establishment of minimum Federal standards for the removal of Indian children from their families and the placement of such children in foster or adoptive homes which will reflect the unique values of Indian culture.

25 U.S.C. § 1902 (2000).

The ICWA was enacted because “an alarmingly high percentage of Indian families [had been] broken up by the removal, often unwarranted, of their children from them by nontribal public and private agencies and [because] an alarmingly high percentage of such children [were] placed in non-Indian foster and adoptive homes and institutions.” 25 U.S.C. § 1901, subd. 4 (2000). Congressional hearings and reports chronicled the scale of the abusive child-welfare practices that Native-American families were required to endure:

Studies undertaken by the Association on American Indian Affairs in 1969 and 1974, and presented in the Senate hearings, showed that 25 to 35% of all Indian children had been separated from their families and placed in adoptive families, foster care, or institutions. Adoptive placements counted significantly in this total: in the State of Minnesota, for example, one in eight Indian children under the age of 18 was in an adoptive home, and during the year 1971-1972 nearly one in every four infants under one year of age was placed for adoption. The adoption rate of Indian children was eight times that of non-Indian children. Approximately 90% of the Indian placements were in non-Indian homes.

Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 32-33, 109 S.Ct. 1597, 104 L.Ed.2d 29 (1989) (citing Indian Child Welfare Program, Hearings before the Subcommittee on Indian Affairs of the Senate Committee on Interior and Insular Affairs, 93d Cong., 2d Sess., 3, 15 (statement of William Byler); H.R.Rep. No. 95-1386, p. 9 (1978), 2nd Sess. 1978 U.S.Code Cong. & Admin.News 7530, 7531) (citations omitted). Sadly, as the senate subcommittee hearings make clear, Minnesota’s role in the abusive removal of these children was prominent.

These abusive practices have taken a heavy toll on Native-American culture, as well as Native-American children individually. See Curt Brown, Finding Indian Adoptees’ Pasts, Star Trib. (Minneapolis), July 3, 2006, at B1 (quoting a First Nations Orphan Association official as referring to pre-ICWA policies as “the cultural rape of forced assimilation”); Susan Baxter Quash-Mah & Deb Johnson Shelton, Seeking Permanent Homes for American Indian Children, Native American Times, Nov. 24, 2004, at 4 (noting that the teen suicide rate among Native-Americans is higher than among any other ethnic or racial group and that the suicide rate is even higher for Native-American children raised in non-Native-American homes).

The court relies on authority suggesting that most state court systems and child welfare agencies seem to be making broad-based efforts to fulfill the mandates of the ICWA. See Barbara Ann Atwood, Flashpoints Under the Indian Child Welfare Act: Toward a New Understanding of State Court Resistance, 51 Emory L.J. 587, 622 (2002). However, the court cites no examples of such efforts in Minnesota. Moreover, in the end, the relevant question is not whether states are making broad-based efforts to comply with the ICWA, but rather the question that needs to be asked is whether the states’ efforts are effective. It is not clear that Minnesota’s efforts have been effective. In fact, a report from this court suggests not only that Native-American children continue to be disproportionately placed out of home, but also that the number of such out-of-home placements is increasing. Minnesota Supreme Court, Minnesota’s Court Performance in Child Protection Cases: A Reassessment Under The Federal Court Improvement Program 24 (Dec. 2005). Because the goals of the ICWA appear to be unfulfilled and because, as the court notes, the good-cause exception for the transfer of cases to tribal courts may operate as a mechanism for easy circumvention of the ICWA, I would interpret the good-cause exception narrowly and hold it to be inapplicable to the circumstances of the present case.

Irrespective of whether the good-cause exception was invoked in this case for the purpose of undermining the policy underlying the ICWA, by today’s decision the ICWA is undermined nonetheless, and the goals of the ICWA — yet to be achieved— are placed further out of reach by the precedent this case sets.

Therefore, I dissent.

ANDERSON, PAUL H., Justice

(dissenting).

I join in the dissent of Justice Page.

      . A.G.M. is described in the record as T.T.B.'s former foster care provider, although it appears A.G.M. never had formal physical custody of T.T.B.

      . Minnesota Statutes § 260C.151, subd. 6 (2004), allows the court to order a child to be taken into immediate custody upon findings "that there are reasonable grounds to believe the child is in surroundings or conditions which endanger the child’s health, safety, or welfare that require that the child’s custody be immediately assumed by the court and that continuation of the child in the custody of the parent or guardian is contrary to the child's welfare." The district court’s order refers to "Minn. R. Juv. P. 65.02,” which was renumbered as Minn. R. Juv. Prot. P. 28.02 effective January 1, 2004. Like section 260C.151, Rule 28.02, subd. 1, allows the district court to issue an ex parte order for emergency protective care upon findings that "there is a prima facie showing that the child is in surroundings or conditions that endanger the child's health, safety, or welfare and that require that the child’s custody and care be immediately assumed by the court; and continuation of the child in the custody of the parent or legal custodian is contrary to the child's welfare."

      . The record does not explain the delay in returning X.T.B. to the state from Rhode Island. The record indicates there were proceedings in the Rhode Island courts involving X.T.B., but the nature of those proceedings is not part of the record before us. T.T.B. and the father of A.G. later stipulated to voluntary termination of their parental rights to A.G., who remains with her paternal grandmother, S.G.

      . The Yankton Sioux Tribe ICWA director and the Urban Tribe representative participated in the family group conference. Although the Oglala Sioux Tribe had moved to intervene in the proceedings in February 2004 and its ICWA representative had been invited to the conference, the tribe did not attend.

      . G.W.'s counsel indicated to the district court on August 12, 2004, that she had oral notice of the report's conclusions "within the last month.”

      . G.W. and the tribe also appealed from the district court's determination that it had personal jurisdiction over X.T.B., and that it had subject matter jurisdiction. The court of appeals denied the appeal on these issues and neither G.W. nor the tribe petitioned for their conditional review by our court. As a result, those issues are not before us. The court of appeals also found the district court had abused its discretion in denying transfer to the tribal court on grounds of forum non conveniens. Appellants did not seek further review of this issue and, as a result, it also is not before us. Finally, G.W. appealed from the district court's transfer of legal and physical custody to S.G. and its denial of A.G.M.'s motion to intervene. Because the court of appeals held that the district court had abused its discretion in denying the motion to transfer jurisdiction, the court of appeals did not reach these issues. Neither G.W. nor the tribe sought conditional review of the district court’s transfer of legal and physical custody to S.G., or its denial of A.G.M.'s motion to intervene, and therefore those issues also are not before us here.

      . At oral argument, counsel for respondents stated that the tribe's motion to transfer jurisdiction was filed on September 8, 2004. The motion to transfer is dated September 8, but was not filed in the district court until September 24.

      . In addition, I question the wisdom of blind allegiance to guidelines created in 1979 by the Bureau of Indian Affairs — an agency that bears much of the responsibility for the offensive child welfare practices targeted by the ICWA. Cf. Lisa Demer, Natives receive apology for 1950s racial adoptions, Anchorage Daily News, Apr. 25, 2001, B1.


author: LANSING, Judge.

text:
    Kenneth NEUTGENS, Respondent, v. WESTFIELD GROUP, Appellant.
    No. A06-291.
    Court of Appeals of Minnesota.
    Dec. 5, 2006.

      Robert W. Owens, Jr., Owens Law, L.L.C., Bloomington, MN, for respondent.
    Deborah C. Eckland, Alan P. King, Goetz & Eckland P.A., Minneapolis, MN, for appellant.
    Considered and decided by MINGE, Presiding Judge; LANSING, Judge; and KLAPHAKE, Judge.
   OPINION

LANSING, Judge.

Westfield Group, an issuer of automobile insurance policies, appeals from the district court’s denial of Westfield’s motion to vacate an arbitration award of income-loss benefits under the Minnesota No-Fault Automobile Insurance Act. Westfield argues that the arbitrator exceeded his authority when he allowed the insured, an employee of a corporation in which he is the sole shareholder, to prove income loss by establishing the amount of salary loss as a result of his accident-related injuries without demonstrating a decrease in the corporation’s gross business income. We affirm.

FACTS

An arbitrator awarded Kenneth Neut-gens $20,000 in income-loss benefits under the Minnesota No-Fault Automobile Insurance Act for injuries sustained in a November 2002 automobile accident. At the arbitration hearing Neutgens presented medical evidence of the extent and severity of injuries to his head and spine. Neutgens was hospitalized for two nights and recuperated at home for several months following the accident.

To establish his accident-related income loss, Neutgens provided his W-2 income-tax forms. Neutgens, who owned and operated an excavating business, testified that the injuries sustained in the accident prevented him from performing the responsibilities that he had previously performed for the corporation. These responsibilities included handling the bidding, telephones, receivables, payables, and also grading, excavating, repairing equipment, and transporting equipment and parts. Neutgens’s testimony describing his reduced ability to function physically and cognitively was supported by medical records and additional testimony from his wife and son. Because Neutgens could not perform his usual work responsibilities after the accident, he stopped drawing his usual salary.

Westfield Group, Neutgens’s insurer, withheld Neutgens’s income-loss benefits because Neutgens did not submit the income-tax records for his excavating business. At the hearing Westfield argued that the applicable legal standard required Neutgens to prove a reduction in his gross business income to establish income-loss benefits. Neutgens provided the corporation’s income-tax records but disputed Westfield’s argument that they were necessary to establish his income loss. The arbitrator rejected Westfield’s argument and based the award on Neutgens’s reduction in salary.

Westfield moved in district court to vacate the arbitration award. As the basis for its motion, Westfield argued that the arbitrator had exceeded his authority by holding that Neutgens was not required to prove a reduction in his gross business income in addition to his loss in salary. The district court denied Westfield’s motion and confirmed the award. Westfield now appeals.

ISSUE

Did the arbitrator exceed his authority when he determined income-loss benefits under the Minnesota No-Fault Automobile Insurance Act by calculating the salary loss of the injured employee of a corporation in which he is the sole shareholder, without requiring proof of a reduction in the corporation’s gross income?

ANALYSIS

Under Minnesota law, an arbitrator’s findings of fact are final, but courts must vacate arbitration awards when arbitrators exceed their authority. Minn.Stat. § 572.19, subd. 1(3) (2004); Karels v. State Farm Ins. Co., 617 N.W.2d 432, 434 (Minn. App.2000). No-fault arbitrators exceed their authority when they interpret rather than simply apply the Minnesota no-fault insurance statutes. Johnson v. Am. Family Mut. Ins. Co., 426 N.W.2d 419, 421 (Minn.1988); see also Weaver v. State Farm Ins. Cos., 609 N.W.2d 878, 882 (Minn.2000) (“[N]o-fault arbitrators are limited to deciding questions of fact, leaving the interpretation of law to the courts.”). To determine whether a no-fault arbitrator has interpreted, rather than applied, the law, we review de novo “the arbitrator’s legal determinations necessary to granting relief.” Weaver, 609 N.W.2d at 882.

On appeal Westfield does not dispute that Neutgens was a salaried employee of the corporation before the accident or that Neutgens was unable to work after the accident. Westfield’s sole argument is that the arbitrator exceeded his authority because Minnesota no-fault law requires a self-employed business owner to prove income loss by demonstrating a reduction in gross business income rather than a loss of salary. Our review of the relevant statutes and case law shows that the arbitrator correctly applied the law.

The Minnesota No-Fault Automobile Insurance Act provides that an insured may receive up to $20,000 for income loss arising out of injuries sustained in an auto accident. Minn.Stat. § 65B.44, subd. 1(a)(2) (2004). The Act defines income as “salary, wages, tips, commissions, professional fees, and other earnings from work or tangible things of economic value produced through work in individually owned businesses, farms, ranches or other work.” Minn.Stat. § 65B.43, subd. 6 (2004). Thus, in the ordinary case, an insured receives income-loss benefits by establishing that accident-related injuries resulted in a loss of personal income evidenced by a reduction in salary, wages, tips, commissions, or fees.

Westfield argues that this method of determining income loss does not apply to Neutgens because he was the sole shareholder of the corporation that employed him. For this argument, Westfield relies on language in Rotation Eng’g & Mfg. Co. v. Secura Ins. Co., 497 N.W.2d 292 (Minn. App.1993). In Rotation, the business owner was paid a salary, but his salary was not reduced when he missed 339 hours of work as a result of his disability. 497 N.W.2d at 293-94. Because there was no decrease in the business’s gross income, the business owner was ineligible for income-loss benefits. Id. at 295. In reaching this conclusion, the court discussed the computation of income-loss benefits for a self-employed person. Id. at 294. The opinion states that if the “gross income produced by a self-owned business has decreased during the period of the self-employed owner’s disability, and the decrease is attributable directly and solely to the owner’s disability, that decrease, in the absence of any salary or wage paid, represents ‘other earnings from work.’ ” Id. at 294 (quotation omitted) (emphasis added).

Westfield’s reliance on this language as support for its argument is flawed in two significant ways. First, the language is directed, by its own terms, to claims for income loss “in the absence of any salary or wage paid.” Because it is undisputed that Neutgens received a salary, the language does not apply to Neutgens’s claim. Second, the language is directed at establishing “other earnings from work,” which is a method of demonstrating income loss when the injured claimant does not have available the usual measures of salary, wages, tips, commissions, or professional fees. See Minn.Stat. § 65B.44, subd. 3 (2004) (listing types of earnings that qualify as income).

The language in Rotation is drawn from, and substantially consistent with, Rindahl v. Nat'l Farmers Union Ins. Cos., 373 N.W.2d 294 (Minn.1985). In Rindahl, the court examined an income-loss claim for a farm co-owner who did not receive a wage or salary for farm work. Id. at 298-99. The court recognized that “the self-employed person who takes no salary or wage from the business may recover income loss benefits by proving ... loss of ‘other earnings from work.’ ” Id. at 299. Because Rindahl did not receive a wage or salary, she could not demonstrate a decrease in the ordinary way but, under the statute, could attempt to show the loss of “other earnings from work.” Id.

The Rindahl court held that, although Rindahl’s evidence was not adequate to demonstrate an accident-related loss of earnings, the statute would allow a self-employed individual, who did not receive a salary or wage, to prove loss of “other earnings” if the individual could show that the loss was directly attributable to the individual’s injuries. Id. But Rindahl does not require that a salaried employee who is the sole shareholder of the employing corporation must demonstrate not only a loss of wages or salary, but also a loss in business earnings. Unlike Rindahl, Neut-gens took a salary from the corporation. Thus, Neutgens was able to demonstrate his loss by showing the decrease in his salary.

Contrary to Westfield’s argument, neither Rindahl nor Rotation holds that a reduction in gross business income is the only means by which a self-employed person can prove income loss. Rather, each case acknowledges that gross business income is a satisfactory gauge of loss for a self-employed person when the ordinary measures are unavailable. The Act recognizes that when the customary measures of “salary, wages, tips, commissions, or professional fees” are not available, income may be determined by showing “other earnings” from work or economic production in an individually owned business. Minn.Stat. § 65B.43, subd. 6.

It is undisputed that Neutgens drew a salary before his auto accident. Consequently, it is unnecessary to resort to proof of individual earnings through other means. Following the accident, Neutgens stopped drawing a salary because his injuries prevented him from returning to work in his preaccident capacity. Westfield does not dispute that Neutgens’s inability to work was caused by his injuries. As a salaried employee, Neutgens demonstrated a statutorily-defined measure of income for the arbitrator to consider in reaching his decision on loss attributable to the accident. Neutgens was not required to prove by alternative means what he could demonstrate by primary means.

We recognize that a claimant who is the sole shareholder of the employing corporation will likely have the power to influence the amount of his or her postaccident salary. But “loss” is defined as the “economic detriment resulting from the accident causing the injury.” Minn.Stat. § 65B.43, subd. 7 (2004). Thus the arbitrator determines, as a fact question, whether the income loss is “proximately caused” by the injury. See Minn.Stat. § 65B.44, subd. 3 (2004) (providing for disability and income-loss benefits); Keim v. Farm Bureau Ins. Co., 482 N.W.2d 823, 825 (Minn.App.1992), review denied (Minn. May 21, 1992) (stating that actual amount of income loss is factual question for arbitrator). In this case, however, it is undisputed that Neut-gens’s personal-income loss was directly and solely attributable to his injuries.

In allowing Neutgens to pursue his claim by proving personal-income loss, the arbitrator applied existing law. “Having been required merely to apply, and not to interpret, plain, settled law, the arbitrator did not exceed his authority.” Karels, 617 N.W.2d at 435.

DECISION

Because Minnesota no-fault law permits an individual to prove income loss by showing a reduction in personal income and does not exclude individuals who are employed by corporations in which they are the sole shareholder, the arbitrator did not exceed his authority by relying on the individual’s salary loss to demonstrate this income loss, and we affirm the district court.

Affirmed.


author: KAPSNER, Justice.

text:
    2006 ND 243
    Viola ALLARD, Plaintiff and Appellant v. Karen JOHNSON, Defendant and Appellee.
    No. 20060080.
    Supreme Court of North Dakota.
    Nov. 28, 2006.
    Kevin J. Chapman (argued), Chapman Law Office, Williston, ND, for plaintiff and appellant.
    Karen Johnson (argued), Williston, ND, defendant and appellee pro se.
   KAPSNER, Justice.

[¶ 1] Viola Allard (“Allard”) appeals from a judgment in which the district court did not apply a statutory presumption of insufficient consideration and undue influence by her attorney-in-fact. We reverse and remand for further proceedings.

I

[¶ 2] Allard, a 76-year-old blind woman, brought suit against her former caregiver and attorney-in-fact under a durable power of attorney, Karen Johnson (“Johnson”). Johnson allegedly made unauthorized withdrawals from Allard’s bank account, totaling $28,176.75, for which Johnson cannot provide accounting; purchased a new 2004 GMC pickup in Al-lard’s name, obligating Allard on the note; and insured the pickup in Allard’s name, but failed to pay the insurance premium payments. Before the court could decide the matter, Johnson paid Al-lard for the pickup and the title was transferred to Johnson’s name. All liens associated with the vehicle were released and Allard was exonerated from the obligation to pay the insurance premiums.

[¶ 3] The court held a bench trial on December 14, 2005. After hearing testimony on the matter, the court found the presumption arising under N.D.C.C. § 59-01-16 did not apply and there was insufficient proof to issue a money judgment for the cash withdrawals. The court concluded, however, that Johnson’s purchase of the pickup and the related transactions were a breach of Johnson’s duties as Al-lard’s attorney-in-fact. The court also noted Allard had incurred legal fees to address these issues. The court issued a money judgment against Johnson to pay $2,500 for Allard’s attorney fees.

II

[¶ 4] On appeal, Allard argues the district court erred in not applying the statutory presumption of insufficient consideration and undue influence under N.D.C.C. § 59-01-16. Johnson argues she did not breach her duties as Allard’s attorney-in-fact under the durable power of attorney agreement; she did not commit fraud in purchasing the vehicle; she did not make unauthorized cash withdrawals; and she did not engage in any self-dealing transactions. Johnson did not address the presumption issue raised in Allard’s brief.

Ill

[¶ 5] Allard argues the district court erred when it did not apply the presumption of insufficient consideration and undue influence. Section 59-01-16, N.D.C.C., provides:

All transactions between a trustee and the trust’s beneficiary during the existence of the trust or while the influence acquired by the trustee remains, by which the trustee obtains any advantage from the trust’s beneficiary, are presumed to be entered into by the latter without sufficient consideration and under undue influence.

The district court’s order and judgment stated: “No presumption in favor of the Plaintiff, for undue influence against the Defendant, applies in this case.” The district court erred in making its conclusion. The applicability of the presumption of insufficient consideration and undue influence under N.D.C.C. § 59-01-16 is a conclusion of law, “ ‘because [the] determination describes the legal effect of the underlying factual circumstances.’ ” Estate of Wenzel-Mosset by Gaukler v. Nickels, 1998 ND 16, ¶ 28, 575 N.W.2d 425 (quoting Diocese of Bismarck Trust v. Ramada, Inc., 553 N.W.2d 760, 768 (N.D.1996)). Conclusions of law are fully reviewable by this Court. Burlington N. & Santa Fe Ry. Co. v. Burlington Res. Oil & Gas Co., 1999 ND 39, ¶ 10, 590 N.W.2d 433.

[¶ 6] In this case, Johnson was Allard’s agent under a durable power of attorney since June 4, 2001, “which entails a confidential relationship and fiduciary responsibilities to her.” Roberts v. N.D. Dep’t of Human Servs., 2005 ND 50, ¶ 12, 692 N.W.2d 922 (citing Matter of Estate of Dinnetz, 532 N.W.2d 672, 673-74 (N.D. 1995)). An agent cannot do any act that a trustee is forbidden to do by any of the provisions of sections 59-01-09 to 59-01-19. N.D.C.C. § 3-02-05. In Roberts, at ¶ 12, we stated:

When a confidential relationship or fiduciary duty exists, the person in whom the confidence is reposed is deemed to be a trustee. [Dinnetz,] at 674, n. 2. A trustee must act with the highest good faith toward the beneficiary and may not obtain any advantage over the beneficiary. Id. at 674; N.D.C.C. § 59-01-09. All transactions between a trustee and a beneficiary by which the trustee obtains any advantage from the beneficiary are presumed to be entered into without sufficient consideration and under undue influence. N.D.C.C. § 59-01-16.

The relationship between Johnson and Al-lard under the power of attorney agreement created a trust relationship. Id. Johnson clearly engaged in a self-dealing transaction and obtained an advantage over Allard when she purchased the pickup truck. The trial court found Johnson’s actions “pertaining to the purchase of the 2004 GMC pickup were unethical and inappropriate, and a breach of [Johnson’s] duties as power of attorney for Viola Al-lard.” Chapter 59-01, N.D.C.C., requires a trustee “to act in the highest good faith toward the beneficiary.” N.D.C.C. § 59-01-09; see also N.D.C.C. § 59-01-10 (“Trustee shall not profit by use of property”); N.D.C.C. § 59-01-12 (“Use of influence for own advantage prohibited”); N.D.C.C. § 59-01-15 (“Violation is a fraud against beneficiary”). Johnson violated her fiduciary duties to Allard when she engaged in the self-dealing transactions and the district court erred in failing to apply the statutory presumption under N.D.C.C. § 59-01-16.

IV

[¶ 7] We reverse and remand for further proceedings, concluding the district court erred in determining the statutory presumption under N.D.C.C. § 59-01-16 did not apply. On remand, the district court must apply the presumption.

[¶ 8] GERALD W. VANDE WALLE, C.J., MARY MUEHLEN MARING, DANIEL J. CROTHERS, and DALE V. SANDSTROM, JJ., concur.