author: SANDSTROM, Justice. KAPSNER, Justice,

text:
    2007 ND 166
    Interest of T.E. William PRYATEL, M.D., Petitioner and Appellee v. T.E., Respondent and Appellant.
    No. 20070278.
    Supreme Court of North Dakota.
    Oct. 16, 2007.

      Kenneth L. Dalsted (argued), Special Assistant Attorney General, and Jodi A. Bass (on brief), third-year law student, under the Rule on Limited Practice of Law by Law Students, Jamestown, N.D., for petitioner and appellee.
    Thomas E. Merrick, Jamestown, N.D., for respondent and appellant.
   SANDSTROM, Justice.

[¶ 1] T.E. appeals from a district court order allowing the North Dakota State Hospital to treat him involuntarily with medication until November 20, 2007. We reject T.E.’s argument that the district court’s forced medication order should be reversed because a State Hospital patient cannot be subjected to more than one 90-day medication order under N.D.C.C. § 25-03.1-18.1(3). We further conclude the court’s finding that T.E. refused medication, one of the prerequisites for issuance of a forced medication order under N.D.C.C. § 25-03.1-18.1(l)(a)(2), is not clearly erroneous. We affirm.

I

[¶ 2] T.E. is a 54-year-old male who was arrested for disorderly conduct in Fargo after becoming disruptive at a local driver’s license office. He was incarcerated at the Cass County jail, but the jail staff members were unable to manage his paranoid and disoriented behavior, and the District Court of Cass County issued an order on May 11, 2007, admitting him to the North Dakota State Hospital for treatment until August 9, 2007. T.E. had been admitted to the State Hospital on seven previous occasions and has been diagnosed with schizophrenia and paranoid personality disorder. T.E. did not cooperate with treatment upon his admission to the State Hospital, and although he initially took medication provided for him, he eventually refused further medication.

[¶ 3] On June 1, 2007, the District Court of Cass County issued an order effective until August 9, 2007, to involuntarily treat T.E. with medication, authorizing use of Risperdal, Haloperidol, Chlor-promazine, and Olanzapine. On June 13, 2007, T.E. began receiving intramuscular injections of Olanzapine, which is an anti-psychotic medication used to treat schizophrenia. T.E. has continually taken the medication either by injection or orally since the forced medication order was implemented. T.E. has made progress since receiving the medication. He has been transferred to an open ward, walks the hospital grounds unescorted, works in housekeeping, and participates in treatment activities. T.E. nevertheless continues to express his belief that he does not need medication or treatment.

[¶ 4] On July 20, 2007, Dr. William Pryatel, a State Hospital staff psychiatrist, filed a petition for continuing treatment and a request to treat with medication, listing Risperdal, Haloperidol, and Olanza-pine as the proposed medications. On the request to treat with medication, Dr. Pryatel marked the box stating “[t]he respondent was offered the medication and refused it.” Following a hearing, the District Court.of Stutsman County issued a continuing treatment order on August 22, 2007, committing T.E. to the State Hospital for one year, or until further order of the court. The district court also issued an order to treat with medication, authorizing the State Hospital to treat T.E. involuntarily with Risperdal and Olanza-pine until November 20, 2007.

[¶ 5] The district court had jurisdiction under N.D. Const, art. VI, § 8, and N.D.C.C. § 25-03.1-03. T.E.’s appeal is timely under N.D.R.App.P. 2.1(a) and N.D.C.C. § 25-03.1-29. This Court has jurisdiction under N.D. Const, art. VI, § 6, and N.D.C.C. § 25-03.1-29.

II

[¶ 6] T.E. argues the August 22, 2007, forced medication order should be reversed because it would be his second forced medication order and forced medication is limited to one order of 90 days duration. He contends a State Hospital patient cannot be subjected to more than one 90-day medication order under the terms of N.D.C.C. § 25-03.1-18.1(3), which provides, “[t]he order for involuntary treatment with prescribed medication, however, may not be in effect for more than ninety days.” The State argues, although N.D.C.C. § 25-03.1-18.1(3) specifies that a forced medication order shall not exceed 90 days, the statute does not restrict the number of times a court may review and issue additional 90-day orders.

[¶ 7] Resolution of this issue requires the interpretation of N.D.C.C. § 25-03.1-18.1(3), which is a question of law fully reviewable on appeal. In re G.R.H., 2006 ND 56, ¶ 15, 711 N.W.2d 587. In Public Serv. Comm’n v. Wimbledon Grain Co., 2003 ND 104, ¶¶ 20-21, 663 N.W.2d 186, this Court summarized the rules of statutory construction:

[O]ur duty is to ascertain the Legislature’s intent, which initially must be sought from the statutory language itself, giving it its plain, ordinary, and commonly understood meaning. N.D.C.C. §§ 1-02-02 and 1-02-03. If statutory language is clear and unambiguous, the letter of the statute cannot be disregarded under the pretext of pursuing its spirit, because the Legislature’s intent is presumed clear from the face of the statute. N.D.C.C. § 1-02-05. If statutory language is ambiguous, a court may resort to extrinsic aids, including legislative history, to interpret the statute. N.D.C.C. § 1-02-39. A statute is ambiguous if it is susceptible to meanings that are different, but rational. Shiek v. North Dakota Workers Comp. Bureau, 2002 ND 85, ¶ 12, 643 N.W.2d 721.
Statutes must be construed as a whole and harmonized to give meaning to related provisions, and are interpreted in context to give meaning and effect to every word, phrase, and sentence. Meljie v. North Dakota Workers Comp. Bureau, 2002 ND 174, ¶ 15, 653 N.W.2d 62; Doyle ex rel. Doyle v. Sprynczynatyk, 2001 ND 8, ¶ 10, 621 N.W.2d 353. We presume the Legislature did not intend an absurd or ludicrous result or unjust consequences. McDowell v. Gillie, 2001 ND 91, ¶ 11, 626 N.W.2d 666. We construe statutes in a practical manner and give consideration to the context of the statutes and the purposes for which they were enacted. Grey Bear v. North Dakota Dep’t of Human Servs., 2002 ND 139, ¶ 7, 651 N.W.2d 611.

We believe the statute is ambiguous on this point because it is susceptible to different, but rational, meanings. Therefore, it is appropriate to review the legislative history in interpreting the statute.

[¶ 8] As originally enacted in 1991, N.D.C.C. § 25-03.1-18.1(3) contained the following language:

However, no such provision is effective for more than ninety days, unless prior to the expiration of that time period the treating psychiatrist submits a report to the court indicating that the involuntary treatment with prescribed medication remains appropriate and necessary to effectively treat the patient. Based on such reports, a review of the patient’s progress, and the patient’s concerns, the court may extend its authorization for involuntary treatment with prescribed medication for additional ninety-day periods if the patient remains under an involuntary treatment order.

1991 N.D. Sess. Laws ch. 292, § 3. In 1993 the Legislature eliminated all of the language beginning with and following the word “unless.” See 1993 N.D. Sess. Laws ch. 279, § 10. The statute currently states, “[t]he order for involuntary treatment with prescribed medication, however, may not be in effect for more than ninety days.” Id.

[¶ 9] The 1993 amendment of the statute stemmed from S.B. 2370, which incorporated provisions of another bill introduced that legislative session, S.B. 2365. See Hearing on S.B. 2365 Before Senate Human Services Comm., 53rd N.D. Legis. Sess. (Feb. 10, 1993) (“Senator Mathern suggested amending the intent of SB 2365 into SB 2370, including those amendments originally proposed for SB 2365”); Hearing on S.B. 2370 Before Senate Human Services Comm., 53rd N.D. Legis. Sess. (Feb. 10, 1993) (“Senator Graba motioned to amend the bill to include the main provisions of SB 2365 and address conflicts in definitions”). The proposed amendment to N.D.C.C. § 25-03.1-18.1(3) appeared in S.B. 2365. The chair of the committee that drafted S.B. 2365 testified about the purpose of the amendment:

[S]ubsection 3 provides specifically that the order for involuntary treatment with prescribed medication may no [sic] be in effect for more than 90 days. Under existing law the psychiatrist could submit a report to the court and the court could extend its authorization without hearing. Because of the invasive nature of forced medication the committee felt that it was appropriate if the order was going to be extended that a hearing on the issue be held.

Hearing on S.B. 2365 Before Senate Human Services Comm., 53rd N.D. Legis. Sess. (Feb. 9, 1993) (written testimony of Orell Schmitz, legal counsel for Protection and Advocacy Project). The legislative history clearly reflects the intention of the 1993 amendments to N.D.C.C. § 25-03.1-18.1(3) was not to place a limitation on the number of 90-day forced medication orders that could be issued, but was to require a court hearing before an extension could be granted rather than allowing an extension based only on the report of a psychiatrist.

[¶ 10] Therefore, the district court’s issuance of an additional 90-day forced medication order following a hearing on the matter does not violate N.D.C.C. § 25-03.1-18.1(3).

Ill

[¶ 11] T.E. argues the district court erred in issuing the second forced medication order because he has not refused to take the prescribed medication since he has been subject to the first court order for forced medication.

[¶ 12] Before a district court may authorize involuntary treatment with prescribed medication, the treating psychiatrist and another licensed physician must certify, and the court must find, “[t]hat the patient was offered that treatment and refused it or that the patient lacks the capacity to make or communicate a responsible decision about that treatment.” N.D.C.C. § 25-03.1-18.1(l)(a)(2). In this case, Dr. Pryatel alleged T.E. “was offered the medication and refused it,” not that T.E. “lacks the capacity to make or communicate a responsible decision about the medication.” A district court’s findings by clear and convincing evidence that a patient needs appropriately prescribed medication and refuses it are findings of fact. In re R.A.J., 554 N.W.2d 809, 810 (N.D.1996). A district court’s finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, although there is some evidence to support it, on the entire evidence this Court is left with a definite and firm conviction a mistake has been made. Interest of J.S., 2006 ND 143, ¶ 6, 717 N.W.2d 598.

[¶ 13] Dr. Pryatel, the staff psychiatrist, testified T.E. is simply unable to function without medication. The record reflects that T.E. continuously refused all medications until the first forced medication order was obtained in June 2007. It is also clear from the record T.E. does not believe he needs any treatment or medication and the only reason T.E. was taking the medication before the hearing was because he was forced to do so under the court’s order. Dr. Pryatel testified:

Q: Doctor, part of this hearing is to determine whether or not the Court shall order [T.E.] to continue taking medication despite his refusals. Is he currently still refusing medication?
A: He’s got a court order for medication previous to this. Because of that, we medicate him if he refuses the medication. So, the idea is that if the court order expires, then he will no longer be taking medication.
Q: You stated before that prior to the medication order, he had been refusing medication, is that correct?
A: Correct.
Q: With what frequency was he refusing? Was it every day—
A: Every single dose.
Q: You stated that he doesn’t understand the purpose of his medications?
A: Well, he, I don’t think that he thinks he needs to be on the medication. I don’t think he thinks he has a mental illness, and so, why take the medication if you don’t have any reason to take it?
Q: So, would it be true to say that he doesn’t understand the ramifications of not taking it?
A: Correct.
Q: Does his mental illness substantially impair his ability to make positive judgments?
A: Correct.
Q: And how so?
A: Well, he’s — he would not be taking the medication unless forced to by the court, so that’s an impaired judgment right there, ...
A: He gets it in oral form, but if he refuses, then he gets an injection.
Q: My understanding is that there hasn’t been any refusals for quite some time now.
A: The reason is because the threat, so to speak, is there that if he doesn’t take it then he gets the injection. But if that’s lifted, then — if the court order is lifted, it’ll be soon to be back the other way. That he’ll be refusing the medicine.
Q: ... Does he, has he expressing [sic] to the staff there that he’s agreeable to the treatment?
A: You know, I just over heard [sic] him say, just right now, that I don’t need treatment. So, the only reason he’s accepting treatment is because it’s more or less forced on him.
[¶ 14] T.E. testified:
Q: Would you be willing to take your medicine?
A: Yeah, I could. Yeah.
Q: The Doctor said that you complained and don’t like to take the medication. Is that true?
A: Well, I don’t think it’s the best, they’re too good. I don’t think it’s a good idea to take it. Could be addicting and I could, couldn’t make me feel sick.
Q: Does the medication seem to help you at all?
A: I don’t think so.
Q: If the Judge said you had to take the medication though, would you do it?
A: Yeah, I suppose. I’m taking now.

[¶ 15] We need not address the broader issue of whether a previous refusal of medication that supported issuance of a first forced medication order can constitute a refusal to support issuance of a second forced medication order. The evidence in this case establishes that T.E. will refuse to take medication once the court-ordered medication period expires. We conclude the refusal requirement of N.D.C.C. § 25 — 03.1—18.1(l)(a)(2) can be met when a patient who is not literally refusing medication but is taking medication only because of a prior forced medication order indicates he would not take further medication unless ordered to do so by a court. Cf. In re D.A., 2005 ND 116, ¶ 14, 698 N.W.2d 474 (“although D.A. was taking the Seroquel at the time of the hearing, we believe a mistake was not made in authorizing the use of Risperdal and Haloperidol, in light of the recent history of refusal of Seroquel and the relative brevity of the ninety-day Order to Treat with Medication”). We conclude the district court’s finding that T.E. refused medication is not clearly erroneous.

IY

[¶ 16] The order is affirmed.

[¶ 17] GERALD W. VANDE WALLE, C.J., and DANIEL J. CROTHERS, J., concur.

KAPSNER, Justice,

concurring in part and dissenting in part.

[¶ 18] I concur in Part II of the majority opinion and respectfully dissent from Part III. I would hold the finding that T.E. has refused the medication is clearly erroneous, the petitioner has failed to meet his burden to involuntarily treat T.E. with prescribed medication, and the court’s order to involuntarily medicate T.E. must be vacated.

[¶ 19] To support involuntary medication, each of the factors required by N.D.C.C. § 25 — 03.1—18.1(1)(a), must be proven by clear and convincing evidence. N.D.C.C. § 25-03.1-18.1(3); Interest of C.W., 552 N.W.2d 382, 385 (N.D.1996); Interest of J.S., 528 N.W.2d 367, 368 (N.D.1995). At issue here is the requirement “[t]hat the patient was offered that treatment and refused it.” N.D.C.C. § 25-03.1-18.1(l)(a)(2). There is no evidence, much less clear and convincing evidence, that T.E. has been offered his medicine and refused to take it since the prior order was in place.

[¶ 20] Indeed, counsel for petitioner at oral argument conceded there was no evidence of actual refusal since the prior medication order was issued. Instead, petitioner argues and the majority opinion, interprets refusal to mean taking medication because one is subject to a court order. This makes a mockery of the plain language of the statute.

[¶ 21] This interpretation also defeats the time limitation statutorily imposed by N.D.C.C. § 25-03.1-18.1(3): “The order for involuntary treatment with prescribed medication, however, may not be in effect for more than ninety days.” If taking the medication under a court order is treated as “refusal,” then involuntary treatment orders can be endless rather than finite.

[¶ 22] To give meaningful effect to the 90-day statutory limit, and the evidentiary burden of clear and convincing evidence of the four factors under N.D.C.C. § 25-03.1 — 18.1 (l)(a), when an order is based upon refusal, it must be allowed to end and a new actual refusal established. The procedures for commitment are clear that it is the right of the patient “to be free from unnecessary medication.” N.D.C.C. § 25-03.1-40(10). Further, N.C.C.C. § 25-03.1-33 specifically provides that “[n]o determination that a person requires treatment . .■. operates as an adjudication of legal incompetence, or of the inability to give or withhold consent.”

[¶23] The portions of the transcript cited by the majority make clear that T.E. is taking his medication. The majority says that same evidence proves T.E. “will refuse” to take the medication once the order expires. Prediction does not meet the requirements of the statute. Petitioner must show, by clear and convincing evidence, T.E. “was offered” and “refused” to take the treatment. Prediction does not meet the evidentiary burden; actual refusal is required.

[¶ 24] Allowing an order for involuntary medication to expire to determine whether a patient will thereafter voluntarily continue any needed medications is consistent both with the requirements of N.D.C.C. § 25-03.1-18.1 and the express legislative intent to “[s]afeguard individual rights.” N.D.C.C. § 25-03.1-01(2). Further, from a practical perspective, although an expiration may mean a short lapse in medication, the determination of whether a patient has achieved sufficient insight to voluntarily continue does support a therapeutic objective. An assessment of the patient’s progress or lack of progress cannot be made if a subsequent order is based solely on the prediction that the patient will refuse, despite the fact the patient is currently taking the medication. And in many instances, including T.E.’s, the expiration of a 90-day involuntary medication order will occur well in advance of the expiration of the ongoing continuing treatment order. In T.E.’s case, the treatment order extends until August 22, 2008. The expeditious procedures of Chapter 25-03.1 allow a subsequent involuntary medication order to be quickly obtained, should one be needed and clear and convincing evidence be demonstrated, while T.E. remains under the terms of his treatment order.

[¶ 25] Mary Muehlen Maring


source: Caselaw Access Project

author: GILBERTSON, Chief Justice.

license: Public Domain

text:
    2007 SD 101
    Walter L. BUCHHOLZ, individually and in his capacity, as Personal Representative of the Estate of Linda C. Buchholz, Plaintiff and Appellee v. Harold E. STORSVE, Defendant and Appellant, and South Dakota Retirement System, Defendant.
    No. 24488.
    Supreme Court of South Dakota.
    Argued Aug. 28, 2007.
    Decided Sept. 26, 2007.

      Dylan A. Wilde of Brady & Pluimer, P.C., Spearfish, SD, for plaintiff and appel-lee.
    Steven M. Christensen of Christensen Law Office, Deadwood, SD, for defendant and appellant.
   GILBERTSON, Chief Justice.

[¶ 1.] Linda C. Buchholz (Linda) passed away, leaving a State of South Dakota retirement plan naming her ex-spouse, Harold E. Storsve (Storsve), as the primary beneficiary. Linda’s surviving spouse, Walter L. Buchholz (Buchholz), filed a declaratory judgment action seeking revocation of the retirement plan’s beneficiary designation and an order declaring Buchholz the lawful beneficiary of Linda’s retirement account. The parties filed cross-motions for summary judgment. The circuit court granted Buchholz’s motion for summary judgment. We affirm.

FACTS AND PROCEDURAL HISTORY

[¶ 2.] Linda and Storsve were married on October 18, 1966. On June 10, 1969, Linda began working for Black Hills State College (now Black Hills State University) in Spearfish, South Dakota. As a state employee, Linda participated' in the retirement plan administered through the South Dakota Retirement System (SDRS). She started making contributions on July 1, 1971, and named her then husband, Storsve, as the primary beneficiary of her retirement plan.

[¶ 3.] On June 4, 1975, Linda and Storsve divorced. Neither the divorce decree nor the associated findings of fact and conclusions of law made any reference to Linda’s retirement plan. The only related conclusion stated that “each of the parties [is] awarded all of his or her personal property.” Linda received annual statements setting forth the status of her retirement account, which, until 1996, also listed her designated primary beneficiary. Linda did not amend, change or remove Storsve as the designated beneficiary of her retirement account after their divorce.

[¶ 4.] Linda later married Buchholz on October 1, 1979. Approximately three years after Linda and Buchholz married, Linda quit working for Black Hills State College. Linda passed away on November 8, 2006, while still married to Buchholz. At the time of her death, Storsve was still the named beneficiary on her South Dakota retirement plan. After Linda’s death, SDRS informed Storsve that he was the named beneficiary of Linda’s retirement plan.

[¶ 5.] Despite this designation, Buch-holz claimed that he was entitled to the assets from Linda’s retirement plan and brought a declaratory judgment action to determine his legal rights to the same. Both parties submitted motions for summary judgment. After a hearing on both motions, the circuit court denied Storsve’s motion and granted Buchholz’s concluding that SDCL 29A-2-804 automatically revoked the beneficiary designation in the name of Storsve upon Storsve and Linda’s divorce; that SDCL 29A-2-804 did not violate the Contract Clause of the South Dakota Constitution; and that Buchholz was the lawful beneficiary of Linda’s South Dakota retirement account.

[¶ 6.] Storsve appeals raising the following issues:

1. Whether the circuit court erroneously applied SDCL 29A-2-804(b) to automatically revoke the beneficiary designation in the name of Storsve.
2. Whether application of SDCL 29A-2-804 is unconstitutional.

STANDARD OF REVIEW

[¶ 7.] Both parties moved for summary judgment and the material facts are undisputed. Thus, this Court’s “ ‘review is limited to determining whether the [circuit] court correctly applied the law.’ ” Johns v. Black Hills Power, Inc., 2006 SD 85, ¶ 4, 722 N.W.2d 554, 556 (quotation omitted) (alteration in original). Furthermore, “ ‘[statutory interpretation and application are questions of law, and are reviewed by this Court under the de novo standard of review.’ ” Rotenberger v. Burghduff, 2007 SD 7, ¶ 8, 727 N.W.2d 291, 294 (quotation omitted). We apply the de novo standard when reviewing the constitutionality of a statute. Purdy v. Fleming, 2002 SD 156, ¶ 12, 655 N.W.2d 424, 429 (citations omitted). Furthermore, we have said

[WJhen this Court reviews the constitutionality of-a law, it will be upheld unless it is clearly and unmistakably unconstitutional. That law is presumed to be constitutional. Any challenge must rebut the presumption and prove beyond a reasonable doubt that the law is unconstitutional.

Am. Fed’n of State, County, and Mun. Employees (AFSCME) Local 1922 v. State, 444 N.W.2d 10, 14 (S.D.1989) (internal citations omitted).

ANALYSIS AND DECISION

[¶ 8.] 1. Whether the circuit court erroneously applied SDCL 29A-2-804(b) to automatically revoke the beneficiary designation in the name of Storsve.

[¶ 9.] Prior to 1982, this issue had not been addressed by this Court or by statute. While the Uniform Probate Code was passed by the South Dakota Legislature in 1974, see 1974 SD Sess. Laws ch. 196, and subsequently repealed in 1976, see 1976 SD Sess. Laws ch 175 § 2, ch. 177 § 3, it did not contain the provision that was to become SDCL 29A-2-804, which is at issue in this case. Until 1995, the general rule outside South Dakota in non-UPC states was that divorce did not affect a beneficiary designation. See Girard v. Pardun, 318 N.W.2d 137, 138-40 (S.D.1982). In Girard we adopted this rule. Id. at 140.

[¶ 10.] However, in 1995, South Dakota adopted the Uniform Probate Code (UPC), which resulted in the enactment of SDCL 29A-2-804. This statute provides in pertinent part:

(b) Except as provided by the express terms of a governing instrument, a court order, or a contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce, or annulment, the divorce or annulment of a marriage: (1) Revokes any revocable (i) disposition or appointment of property made by a divorced individual to a former spouse in a governing instrument ....

SDCL 29A-2-804(b) (emphasis added). The statute defines “[governing instrument” as “a will, trust, or other governing instrument executed by the divorced individual before the divorce or annulment of the individual’s marriage to the former spouse.” SDCL 29A-2-804(a)(4). The South Dakota Uniform Probate Code generally defines “[g]overning instrument” to encompass a number of documents, including “a ... retirement, or similar benefit plan....” SDCL 29A-1-20K19). Storsve does not dispute the fact that Linda’s retirement account qualifies as a “governing instrument” under SDCL 29A-2-804(b).

[¶ 11.] Storsve contends that applying SDCL 29A-2-804 in this case violates the fundamental rule of statutory construction that statutes are to only have prospective effect unless a retroactive effect is clearly intended. See Fed. Farm Mortgage Corp. v. Noel, 66 S.D. 481, 285 N.W. 871, 872 (1939). However, the South Dakota Legislature has made it clear that it intended UPC rules of construction, such as SDCL 29A-2-804(b), to apply retroactively. SDCL 29A-8-101 provides in pertinent part:

(a) This code takes effect on July 1, 1995.
(b) Except as provided elsewhere in this code:
(2) This code applies to governing instruments executed by decedents dying on or after July 1, 1995, no matter when executed. Any rule of construction or presumption provided in this code applies to governing instruments executed before July 1, 1995, unless there is a clear indication of a contrary intent ....

(Emphasis added). The governing instrument in this case was executed by Linda who died on November 8, 2006, eleven years after July 1, 1995. Thus, SDCL 29A-2-804(b) applies to the governing instrument provided it is considered a “rule of construction.”

[¶ 12.] Other courts that have addressed this issue have applied the statute retroactively. For instance, the Tenth Circuit Court of Appeals held “the revocation-upon-divorce provision set forth in § 75-2-804(2) is a rule of construction, and thus falls within coverage of the effective-date provision.... ” Stillman v. Teachers Ins. & Annuity Ass’n College Retirement Equities Fund, 343 F.3d 1311, 1317 (10thCir.2003). “[I]n the law of donative transfers, ‘rules of construction ... aid in determining and giving effect to the donor’s intention or probable intention[.]’” Id. (quotation omitted). Since the revocation-upon-divorce statute attempts to effectuate the intention of the donor, it is a rule of construction. Id. The Stillman court reasoned:

The Uniform Probate Code provision on which § 75-2-804(2) is modeled derives from the recognition “that when spouses are sufficiently unhappy with each other that they obtain a divorce, neither is likely to want to transfer his or her property to the survivor on death.” Revocation-upon-divorce statutes “reflect the legislative judgment that when the transferor leaves unaltered a will or trust or insurance beneficiary designation in favor of an ex-spouse, this failure to designate substitute takers more likely than not represents inattention rather than intention.” Thus, § 75-2-804(2) attributes an intent to the donor based on an assessment of a typical donor’s intention. We also note that this statutory attribution of intent is rebuttable. It applies “[e]xcept as provided by the express terms of a governing instrument [such as an annuity contract], a court order, or a contract relating to the division of the marital estate.... ”

Id. at 1318 (internal quotations omitted) (alterations in original). See also Allstate Life Ins. Co. v. Hanson, 200 FSupp2d 1012, 1016 (E.D.Wis.2002) (“[t]he legislature [ ] applied the 1998 revisions retroactively”).

[¶ 13.] Storsve also contends that one of the three exceptions in SDCL 29A-2-804(b) applies in this case; therefore, the general rule that divorce automatically revokes an ex-spouse’s beneficiary designation in a retirement plan does not apply. Revocation of a beneficiary designation is automatic upon divorce “[e]xcept as provided by the express terms of’ (1) “a governing instrument,” (2) “a court order,” or (3) “a contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce, or annulment.” SDCL 29A-2-804(b). Storsve argues that the retirement plan expressly designated himself as the beneficiary; therefore, the first exception applies.

[¶ 14.] However, were we to adopt Storsve’s position that the beneficiary designation alone meets the “express terms of a governing instrument” exception, SDCL 29A-2-804 would never apply because every governing instrument contains this provision, and it is this provision that prompts the necessity of the statute. Thus, a beneficiary designation itself is not sufficient to invoke the express terms exception. See also Lincoln Benefit Life Co. v. Heitz, 468 F.Supp.2d 1062, 1066, 1069 (D.Minn.2007) (recognizing the same express terms exception found in South Dakota’s re-designation statute and holding that the beneficiary designation automatically revoked upon divorce, despite the life insurance policy’s designation of the former spouse as the beneficiary).

[¶ 15.] We hereby interpret the statute to require that the governing instrument contain express terms referring to divorce, specifically stating that the beneficiary will remain as the designated beneficiary despite divorce. Linda failed to indicate any such terms in the SDRS plan. Thus, the “express terms of a governing instrument” exception does not apply.

[¶ 16.] Storsve also argues that Linda’s inactions of not removing him as the beneficiary indicates her intent to leave Storsve as the beneficiary despite the couple’s divorce. However, we observe that courts have considered and rejected this same argument raised by Storsve. An Arizona court held the purpose of the revocation-upon-divorce or re-designation statute, as similar statutes have been termed by various courts, “would be eviscerated if a former spouse could circumvent the automatic revocation effected by the statute by submitting self-serving testimony that the decedent spouse’s inaction reflected an intention to revive his or her designation of the ex-spouse as the beneficiary.” Estate of Lamparella, 210 Ariz. 246, 109 P.3d 959, 966 (Ct.App.Div. 1 2005). Instead, “[i]f a divorced spouse wishes to redesignate the former spouse as the beneficiary post-dissolution, such designation must be in writing and must otherwise comply with applicable policy terms.” Id. at 967. See also Mearns v. Scharbach, 103 Wash.App. 498, 12 P.3d 1048, 1053 (Div. 3 2000) (“any redesignation of [ex-spouse] as a beneficiary had to be in writing”).

[¶ 17.] Herein there is no showing Linda ever read the annual statements she received from SDRS. Her inaction does not equate with consent. Storsve fails in his burden under SDCL 29A-2-804 to show Linda’s inaction rises to a clear indication of a contrary intent to her decree of divorce from Storsve and its complete division of their marital assets. A policy holder’s inaction is insufficient to circumvent application of SDCL 29A-2-804. Based on foregoing, the circuit court did not err when it applied SDCL 29A-2-804 to automatically revoke the beneficiary designation in Linda’s retirement plan.

[¶ 18.] 2. Whether application of SDCL 29A-2-804 is unconstitutional.

[¶ 19.] Storsve further contends that retroactive application of SDCL 29A-2-804 unconstitutionally impairs Linda’s contract with SDRS by disrupting the expectation that the proceeds would go to the named beneficiary. He specifically argues that retroactive application violates the Contract Clause of Article VI, Section 12 of the South Dakota Constitution.

[¶ 20.] When presented with the issue of whether a statute violates the Contract Clause, “[o]ur first inquiry is whether there has been a substantial impairment of the contractual relationship.” AFSCME Local 1922, 444 N.W.2d at 14 (citation omitted). The United States Supreme Court has explained that “[t]his inquiry has three components: [(1)] whether there is a contractual relationship, [(2)] whether a change in law impairs that contractual relationship, and [(3)] whether the impairment is substantial.” GMC v. Romein, 503 U.S. 181, 186, 112 S.Ct. 1105, 1109, 117 L.Ed.2d 328 (1992). Furthermore, even if there is a substantial impairment, the statute will survive “a constitutional attack if the impairment is justified as reasonable and necessary to serve an important public purpose.” Lincoln Benefit, 468 F.Supp.2d at 1067 (citation omitted).

[¶ 21.] A number of courts applying this rubric have determined that applying state re-designation statutes retroactively does not violate the Contract Clause. Stillman, 343 F.3d at 1322; Lincoln Benefit, 468 F.Supp.2d at 1069; Hanson, 200 F.Supp.2d at 1021; Estate of DeWitt, 54 P.3d 849, 859 (Colo.2002); Mearns, 12 P.3d at 1056; Estate of Dobert, 192 Ariz. 248, 963 P.2d 327, 332 (Ct.App.1998). Storsve, however, relies on Whirlpool Corp. v. Ritter, 929 F.2d 1318 (8thCir.1991), wherein the Eighth Circuit Court of Appeals held that a similar Oklahoma statute was an unconstitutional impairment of contracts when applied to insurance contracts entered into before the statute became effective. Id. at 1323. However the Whirlpool decision has been persuasively criticized by both the Joint Editorial Board (JEB) for the Uniform Probate Code and other court decisions. Stillman, 343 F.3d at 1322; Hanson, 200 F.Supp.2d at 1019; DeWitt, 54 P.3d at 859-60; Mearns, 12 P.3d at 1056.

[IT 22.] We first address the alleged impairment of Storsve’s contractual rights. In determining whether the first component is satisfied, i.e., whether there is a contractual relationship, “a party first must demonstrate that the contract gave [him] a vested interest, not merely an expectation interest.” Lincoln Benefit, 468 F.Supp.2d at 1067 (citation omitted); Han son, 200 F.Supp.2d at 1018. This Court has already determined that a beneficiary only has an expectancy interest. Girard, 318 N.W.2d at 140. Therefore, Storsve fails to meet the first component, and thus, our analysis with regards to his contractual rights ends.

[¶ 23.] Storsve also attempts to argue that Linda’s contractual relationship with SDRS was impaired by the retroactive application of SDCL 29A-2-804. Assuming, without deciding, that Storsve may raise the rights of the policyholder, we address whether SDCL 29A-2-804 impaired Linda’s vested right, if that impairment was substantial, and if so, whether it was justified.

[¶ 24.] First, Linda unquestionably had a contract with SDRS in which her rights were vested. See Hanson, 200 F.Supp.2d at 1020 (stating that insured had a vested interest in life insurance contract). Under the contract, SDRS was required to provide the assets in Linda’s retirement account to her designated beneficiary on the occasion of her death. However, the Hanson court held that a similar re-designation statute may have “changed the identity of the presumptive beneficiary, but [it] did not alter either party’s obligations under the contract. [The insured] was required to pay premiums, and [the insurer was] required to pay benefits. Thus, the essential elements of the bargained-for exchange remain[ed] intact.” 200 F.Supp.2d at 1020 (citation omitted); see also Lincoln Benefit, 468 F.Supp.2d at 1069.

[¶ 25.] Furthermore, the Hanson court held that the statute “only created a default rule.” 200 F.Supp.2d at 1020. The re-designation statute did not prevent the policyholder from maintaining an ex-spouse as the beneficiary. Id. Thus, the Hanson court concluded that the statute “did not impose the sort of ‘severe’ restriction that has been found to be ‘substantial.’ ” Id. (citation omitted); see also Stillman, 343 F.3d at 1322 (“[b]ecause no contractual obligation is impaired by [re-designation statute], there is no violation of the federal Contracts Clause in applying the statute here”).

[¶ 26.] The Hanson court further stated that even if it were to find that the re-designation statute substantially impaired the contractual relationship, the statute would nevertheless be upheld because “it serves significant and legitimate public purposes.” Id. at 1020-21. The Lincoln Benefit court also held that such hypothetical impairment

would nonetheless survive a constitutional challenge because the impairment is justified and reasonable in that it serves important public purposes, including promoting uniformity among state law treatment of probate and non-probate transfers and implementing a rule of construction that reflects legislative judgment that ex-spouses often intend to change their beneficiaries.

468 F.Supp.2d at 1069 (citation omitted).

[¶27.] We agree with the majority of courts that have decided the constitutionality issue and hold that SDCL 29A-2-804 does not substantially impair either Storsve’s or Linda’s contractual rights and if substantial impairment was found, it would be justified. Therefore, SDCL 29A-2-804 is constitutional and was appropriately applied.

[¶ 28.] Affirmed.

[¶ 29.] SABERS and KONENKAMP, Justices, and O’BRIEN and BARNETT, Circuit Court Judges, concur.

[¶ 30.] O’BRIEN, Circuit Court Judge, sitting for ZINTER, Justice, disqualified, and BARNETT, Circuit Court Judge, sitting for MEIERHENRY, Justice, disqualified.

      . Defendant South Dakota Retirement System notified this Court that it takes no position in this case, other them that the law be served.

      . Linda named her father as the contingent beneficiary, but he predeceased her.

      . Article VI Section 12 of the South Dakota Constitution states: “No ex post facto law, or law impairing the obligation of contracts or making any irrevocable grant of privilege, franchise or immunity, shall be passed.” Similarly, Article I, Section 10 of the United States Constitution provides: “No State shall ... pass any ... Law impairing the Obligation of Contracts

      . In determining whether a statute violates South Dakota’s Contract Clause, this Court has looked to the United States Supreme Court's analysis of the Federal Constitution's Contract Clause for guidance. See Engelcke v. Farmers’ State Bank, 61 S.D. 92, 246 N.W. 288, 290-91 (1932) (stating the Federal and State Constitutions contain in substance and effect the same provisions).


author: TIEDE, Circuit Judge.

text:
    2007 SD 100
    The ESTATE OF Brustuen H. LIEN a/k/a Bruce Lien and Deanna B. Lien, Plaintiffs and Appellees, v. PETE LIEN & SONS, INC., Defendant and Appellant.
    No. 24286.
    Supreme Court of South Dakota.
    Argued on May 22, 2007.
    Decided Sept. 26, 2007.
    Rehearing Denied Nov. 2, 2007.
    See also 674 N.W.2d 816.

      Mitchell Peterson and Roberto A. Lange of Davenport, Evans, Hurwitz & Smith, Sioux Falls, South Dakota, Attorneys for plaintiffs and appellees.
    Larry M. Von Wald and Ted L. McBride of Beardsley, Jensen & Von Wald, Jeffrey G. Hurd of Bangs, McCullen, Butler, Foye & Simmons, Rapid City, South Dakota, Attorneys for defendant and appellant.
   TIEDE, Circuit Judge.

[¶ 1.] This case involves the continuing conflict between Bruce Lien (Bruce) and Deanna Lien (Deanna) and Pete Lien & Sons, Inc. (PLS or corporation). We previously decided Lien v. Lien, 2004 SD 8, 674 N.W.2d 816 (Lien I), in which Bruce brought an action against PLS and its directors alleging minority shareholder oppression, breach of fiduciary duty, and tor-tious interference with ■ prospective business relations or expectancy and also sought dissolution based on shareholder deadlock. We held that dissolution and liquidation of the corporation’s assets was not warranted and that Bruce had not established minority shareholder oppression or tortious interference. In this appeal, the trial court granted summary judgment in favor of Bruce finding that PLS breached a severance agreement with Bruce and a lease and option to purchase with Bruce and Deanna. PLS appeals. We reverse and remand.

FACTS AND PROCEDURE

[¶ 2.] The history of PLS is outlined in Lien I. PLS was founded in 1944 as a partnership with Bruce, his brother, Charles Lien (Chuck), and their father, Pete Lien, Sr., as the co-equal partners. The business engages in the production of limestone aggregates, lime, sand and gravel, ready mix concrete, masonry block and steel fabrication, reinforcement and warehousing in the Rapid City, South Dakota area and several other states. It was incorporated in 1952 as a South Dakota corporation with the three partners as equal shareholders. Since inception the corporation has restricted the right of a shareholder to freely sell or transfer shares other than to another shareholder. Over the years, Pete Lien Sr. gifted and sold his stock to Bruce and Chuck. When their father died in 1969, Bruce and Chuck inherited the remainder of his stock and each became fifty percent shareholders of the corporation.

[¶ 3.] Following our decision in Lien I, Bruce’s relationship with his brother, Chuck, and PLS remained contentious. In August 2005 PLS became aware that Bruce’s wife, Deanna, had been appointed Bruce’s guardian and conservator. Until that time, Bruce had been paid as an employee of PLS, despite the fact that for several years he had not had any functions or duties associated with PLS. PLS claims that it was concerned about the possible liability of continuing Bruce’s employment with PLS after he had been judicially declared incapable of handling his own affairs. The decision was made to terminate Bruce’s employment. The PLS directors ■ decided to provide Bruce a severance package which would continue his salary, bonuses and corporate perquisites until August 15, 2006. This action was unilaterally taken by the Board and Bruce concedes in his brief that he accepted it without objection. According to an affidavit from Chuck, the directors were particularly concerned about their fiduciary duties to Bruce as a shareholder, especially in light of Lien I, and did not want to deprive Bruce of a return on his shares in PLS. According to Chuck, it was intended that before August 15, 2006, the newly appointed PLS dividend committee would adopt criteria for the directors’ declaration of dividends as a substitute for the salary, bonuses, and perquisites that had been provided to Bruce and Chuck over the years as a means of providing them with returns on their stock holdings.

[¶ 4.] By a hand-delivered letter dated February 1, 2006, Deanna gave notice of her intent to sell all of the shares of PLS stock that she and Bruce owned to Old-castle Materials, Inc. (Oldcastle). The notice was provided pursuant to Article VI of the PLS Amended Articles of Incorporation. The notice stated in part:

In my individual capacity and as guardian and conservator for Bruce H. Lien, I have entered into a Stock Purchase Agreement with Oldcastle Materials, Inc., dated as of January 31, 2006, a copy of which is attached for your reference. The purchase price for the Shares is $35,250;000, subject to the terms and conditions set forth in the Stock Purchase Agreement. The full amount of the purchase price consideration has been paid into an. escrow account pursuant to the terms of the Agreement and the enclosed Escrow Agreement.

(emphasis added). According to the Articles of Incorporation, the Board of Directors of PLS had ten days in which to exercise the option to purchase the shares for the corporation or on behalf of any shareholders.

[¶ 5.] The Stock Purchase Agreement provided that Oldcastle would pay the aggregate amount of $35,250,000 on the closing date, with the amount of $5,000,000 withheld from the. Seller in an Escrow Account. This was identified as the “Deferred Amount” which was to be distributed to Bruce and Deanna if PLS’s profits before interest, taxes, depreciation and amortization (PBITDA) was equal or greater than set forth below for the fiscal year ending December 31, 2006:

Aggregate Amount of Deferred Amount
Target PBITDA Released to Seller
$16,000,000 $6,000,000
$15,000,000 $3,000,000
$14,000,000 $1,000,000

Any remaining portion of the Deferred Amount would be returned to Oldeastle in accordance with the terms of the Escrow Agreement.

[¶ 6.] In the Stock Purchase Agreement under the heading of “Representations and Warranties of the Seller,” Bruce and Deanna identified transactions by PLS with related parties, including the severance agreement with Bruce and a lease and option agreement between PLS, Bruce and Deanna relating to the PLS-owned house in which Bruce and Deanna lived. Under the heading of “Covenants of the Seller,” the agreement provided:

The Seller shall not pursue any claim or commence any Proceedings against the Company (a “Company Claim”) without obtaining the prior written consent of the Buyer, such consent to be withheld in the Buyer’s sole discretion. Upon the request of the Buyer, the Seller shall assign any Company Claim to the Buyer to the extent such assignment is allowed under Applicable Law. The Seller will cooperate "with the Buyer with respect to any Company Claim.

The agreement provided that it would be governed by the laws of the State of New York. The agreement contained a release of liability by Bruce and Deanna. Finally, the Stock Purchase Agreement contained a termination fee in the amount of $5,000,000 to be paid to Oldeastle in the event that the agreement was terminated for reasons other than as a result of a breach by Oldeastle. Therefore, Oldeastle was to receive $5,000,000 from Bruce and Deanna if PLS exercised its right of first refusal and purchased the PLS stock owned by Bruce and Deanna.

[¶ 7.] On February 6, 2006, PLS responded to the notice sent by Deanna with a document entitled “Exercise and Notice of Election on Right of First Refusal.” It provided in part:

The purchase of the Seller’s Shares by the Company shall be subject to the terms set forth in the Stock Purchase Agreement and the Oldeastle Escrow Agreements, which the Company agrees to be legally bound thereby to the same extent Oldeastle is legally bound thereunder. The Purchase Price payable under the Stock Purchase Agreement shall be deposited in an escrow account with The Bank of New York and made available for disbursement to Seller on or before February 10, 2006, subject to the terms of the Stock Purchase Agreement and the Oldeastle Escrow Agreement.

(emphasis added). On February 10, 2006, PLS deposited $35,250,000 with the Bank of New York as provided in the Escrow Agreement. Bruce’s and Deanna’s shares were transferred to PLS.

[¶ 8.] Following the transfer of stock, Pete Lien (Pete), President of PLS, notified Deanna on March 8, 2006, that the salary, bonuses and perquisites which otherwise would have been paid to Bruce under the severance agreement were discontinued effective February 11, 2006, the day following the sale of Bruce’s PLS stock. By letter dated April 3, 2006, Deanna was notified that PLS was terminating her and Bruce’s tenancy in the PLS-owned residence in which they resided. They were told to vacate the property on or before June 1, 2006.

[¶ 9.] Within approximately ten days of the April 3, 2006 letter, this litigation was commenced alleging breach of the lease and option agreement for the PLS-owned house and breach of the severance agreement. Agreeing that there were no material facts genuinely in dispute, both parties moved for summary judgment. PLS argued that it purchased Bruce’s and Deanna’s shares under the terms and conditions of the Stock Purchase Agreement with Oldcastle. It argued that the release, covenant not-to-sue and assignment of claims provisions of that agreement discharged PLS’s obligations to Bruce and Deanna under the severance agreement and the lease and option. The trial court concluded that under PLS’s Articles of Incorporation, Bruce and Deanna were entitled to receive the amount of money which Old-castle had agreed to pay and the only consideration to which PLS was entitled in return was the stock in question. It concluded that the release and covenant not-to-sue did not relieve PLS of liability and that there was no legal basis for PLS to discontinue its severance package to Bruce prior to August 15, 2006. Further, the trial court concluded that the lease and option to purchase was a life-estate in favor of Bruce and Deanna until they consented to a lesser estate or to termination of the life estate. It declared that the lease was not terminated and Bruce’s and Deanna’s option to purchase continued to be exercisable. It awarded Bruce and Deanna judgment in the sum of $456,316.46, which amount was stipulated to by the parties. PLS appeals.

STANDARD OF REVIEW

Summary judgment is properly granted when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” SDCL 15-6-56(c). We will affirm the trial court’s grant or denial of a motion for summary judgment when no genuine issues of material fact exist, and the legal questions have been correctly decided. Titus v. Chapman, 2004 SD 106, ¶ 13, 687 N.W.2d 918, 923 (citing Holzer v. Dakota Speedway, 2000 SD 65, ¶ 8, 610 N.W.2d 787, 791 (citing Bego v. Gordon, 407 N.W.2d 801, 804, (S.D.1987))). We review the circuit court’s conclusions of law under the de novo standard. Id. (citing Sherburn v. Patterson Farms, Inc., 1999 SD 47, ¶ 4, 593 N.W.2d 414, 419 (citing City of Colton v. Schwebach, 1997 SD 4, ¶ 8, 557 N.W.2d 769, 771)).

A-G-E Corp. v. SD Dept. of Transportation, 2006 SD 66, ¶ 13, 719 N.W.2d 780, 785.

[¶ 10.] “ ‘On appeal, this Court can read a contract itself without any presumption in favor of the trial court’s determination.’ ” Id. ¶ 15, 719 N.W.2d at 786 (citing Icehouse, Inc. v. Geissler, 2001 SD 134, ¶ 7, 636 N.W.2d 459, 462 (quoting Thunderstik Lodge, Inc. v. Reuer, 1998 SD 110, ¶ 12, 585 N.W.2d 819, 822)). “Cases involving the interpretation of written documents are particularly appropriate for disposition by summary judgment, such interpretation being a legal issue rather than a factual one.” Kimball Investment Land, Ltd. v. Chmela, 2000 SD 6, ¶ 7, 604 N.W.2d 289, 292 (citing Dale v. Pelton, 365 N.W.2d 1, 3 (S.D.1985); Wilson v. Great N. Ry. Co., 83 S.D. 207, 157 N.W.2d 19, 21 (1968)).

ISSUES AND ARGUMENTS

[¶ 11.] Whether the term “price” as used within the context of the right of first refusal included other consideration related to the terms forming Old-castle’s offer to purchase Bruce’s and Deanna’s shares in PLS.

[¶ 12.] The right of first refusal contained in PLS’s Amended Articles of Incorporation provides:

The stock of the Corporation shall be subscribed for and issued on the condition that the same shall not be sold or transferred (other than to a stockholder of the Corporation) without the holder thereof first giving written notice to the Board of Directors offering to sell the stock to the Corporation, or to the stockholders pro rata, at such price as he is able to obtain a bona fide offer therefore from any other party, and said notice shall contain in addition to the price, the name and address of such prospective purchaser; thereupon the Board of Directors shall have a period of ten (10) days after receipt of said notice either to purchase the stock at said price on behalf of the Corporation or as the agent for any of the stockholders, and the holder shall, upon tender to him of the purchase price, transfer and assign the stock accordingly; and in the event the offer is not excepted as aforesaid, the holder of such stock may sell the same (at any time within thirty (30) days thereafter) to the prospective purchaser on the terms specified in his offer and notice.

(emphasis added). A right of first refusal (ROFR) is a restriction on stock transfer. McCroden v. Case, 1999 SD 146, ¶ 17, 602 N.W.2d 736, 741. “Because restrictions on the sale of stock are not generally favored, such restrictions must be strictly construed.” Id. (citing United States v. Adkins-Phelps, Inc., 400 F.2d 737, 740 (8th Cir.1968); F.H.T., Inc. v. Feuerhelm, 211 Neb. 860, 320 N.W.2d 772, 777 (1982); see also Kerr v. Porvenir Corp., 119 N.M. 262, 889 P.2d 870, 872 (N.M.App.1994)).

[¶ 13.] Bruce and Deanna claim there is a distinction between a ROFR that grants only the right to match the “price” and a ROFR that provides that it is subject to other “terms.” They argue that the ROFR in this case uses the words “price” and “terms” differently. They claim that the “price” is simply the total amount of money that a prospective purchaser agrees to pay for the stock, whereas the word “terms” includes all of the other provisions of the prospective purchaser’s offer, including non-monetary consideration to be received by the prospective purchaser in addition to the stock. Applying the language of the ROFR, they claim PLS had the right only to match the price of the Oldcastle offer, but not to receive or benefit from other terms of the offer.

[¶ 14.] PLS argues that the term “price” used in provisions relating to a ROFR does not simply mean “cash.” It cites to a case from Delaware, Union Oil Company of Calif. v. Mobil Pipeline Co., No.Civ.A. 19395-N, 2006 WL 3770834 (Del.Ch.2006), in which the party which held a ROFR argued that because the ROFR did not require it to match “terms,” it was only required to match “price,” which it narrowly interpreted to mean “cash price.” The Delaware Court of Chancery disagreed with this narrow interpretation:

Unocal’s argument ultimately has no firm support in the case law of this or any other jurisdiction, and is based on an overly simplistic reading of the term “price” that is not warranted in the context of a transaction between these sophisticated business entities. The absence of the word “terms” from the contract language is not material enough to warrant the extreme interpretation that Unocal asserts. That interpretation would prohibit a seller from negotiating a deal with a third party that involved any consideration other than cash. But among sophisticated business entities, the word “price” does not simply mean “cash.” “Price” is essentially equivalent to “consideration,” and in the context of the ROFR, it simply refers to all of the material things that the seller will get in the deal — i.e., all of the consideration-related terms.

Id. at *13. PLS also cites to McMillan v. Dooley, 144 S.W.3d 159, 176 (Tex.Ct.App.2004), which found:

While “price” obviously includes an amount of money, the common and ordinary meaning of “price” does not exclude non-monetary forms of consideration. “Price” is defined in Black’s Law Dictionary 1207 (7th ed 1999) as “[t]he amount of money or other consideration asked for or given in exchange for something else; the cost at which something is bought or sold.”

(emphasis in original).

[¶ 15.] PLS also relies on Abraham Investment Co. v. Payne Ranch, Inc., 968 S.W.2d 518, 524-25 (Tex.Ct.App.1998), which stated that “[pjreferential rights of purchase have a generally well-understood meaning within the business world that the rightholder must be given an opportunity to purchase the property from the property owner on the terms offered by any third party.” “Once the property owner conveys the terms of the offer to the right-holder, the rightholder then has the power to accept or reject the offer.” Id. (citation omitted). “Thus, at the moment a property owner gives notice of his intent to sell, a preferential right ‘ripens’ into an option. The terms of that option are formed by the provisions granting the preferential right and by the provisions within the notiee-of-intent-to-sell given to the rightholder. After the property owner has given his notice-of-intent-to-sell, he cannot change the terms of that offer as long as the option is binding upon the property owner.” Id. (citations omitted).

[¶ 16.] While Bruce and Deanna either criticize or distinguish the cases cited by PLS, they have not cited any case which specifically holds that the word “price” as used in a ROFR such as in this case, means only the cash to be paid and does not include any non-monetary consideration. The problem with Bruce’s and Deanna’s narrow interpretation of the word “price” is that there are commonly non-monetary terms included in a purchase which are part of the consideration to be paid or received in the deal. Those non-monetary consideration terms can affect the price which one party is willing to pay and another is willing to accept.

[¶ 17.] The Stock Purchase Agreement between Bruce, Deanna, and Oldcastle is illustrative of the importance of these non-monetary terms in arriving at a negotiated price. In that agreement, Oldcastle agreed to pay Bruce and Deanna $35,250,000 for the stock, but only upon condition that if the ROFR was not exercised by PLS and Oldcastle purchased the stock, Bruce and Deanna would upon request assign all of their Company Claims to Oldcastle. Bruce and Deanna were also prohibited from suing on those Company Claims without the consent of Oldcastle. It is clear from these provisions that Old-castle was unwilling to have its fifty percent shareholder interest, for which it paid Bruce and Deanna $35,250,000, further reduced in value by giving to Bruce and Deanna the right to continue to collect from PLS or sue under the severance agreement; to continue to live in a $1,000,000 house on almost 160 acres of land rent free with an option to purchase at book value rather than fair market value or to sue under the lease and option; and, to collect on any promissory notes Bruce held from PLS. If it was the intent of the parties that these provisions would survive the purchase by Oldcastle, then the Stock Purchase Agreement would not have contained the assignment and covenant not to sue provisions and their absence would have manifested their intent that the price of $35,250,000 was intended to be exclusive of these other rights which Bruce and Deanna held at the time of the Stock Purchase Agreement.

[¶ 18.] The significance of these non-monetary terms to PLS is obvious. If they are not applicable, PLS has paid $35,250,000 for the right to continue to pay Bruce under the severance agreement; to permit Bruce and Deanna to continue to live rent free in a $1,000,000 house situated on almost 160 acres of land with an option to purchase at book value; and, PLS remains liable under the promissory notes held by Bruce. The “price” to PLS will be significantly greater than the price to Old-castle.

[¶ 19.] “The interpretation of a contract is a question of law.” Pauley v. Simonson, 2006 SD 73, ¶ 8, 720 N.W.2d 665, 667 (citing Ziegler Furniture and Funeral Home, Inc. v. Cicmanec, 2006 SD 6, ¶ 14, 709 N.W.2d 350, 354 (citations omitted)). “This Court looks ‘to the language that the parties used in the contract to determine their intention.’ ” Id. ¶ 8, 720 N.W.2d at 667-68 (quoting Ziegler, 2006 SD 6, ¶ 16, 709 N.W.2d at 355 (other citation omitted)). “ ‘If that intention is clearly manifested by the language of the [agreement], it is the duty of this [C]ourt to declare and enforce it.’ ” Id. (citations omitted) (alterations in original).

[¶ 20.] The ROFR as contained in the Amended Articles of Incorporation does not specify the “price” to be paid for the stock. It does require that before the stock can be sold or transferred other than to a stockholder of the corporation, the holder of the stock must first give written notice to the Board of Directors of the corporation “offering to sell the stock to the Corporation, or to the stockholders pro rata, at such price as he is able to obtain a bona fide offer therefore from any other party.” The ROFR thereafter provides, “in the event the offer is not accepted as aforesaid, the holder of such stock may sell the same ... to the prospective purchaser on the terms specified in his offer and notice.” The offer and notice referred to in this last clause of Article VI can only mean the offer and notice given by the holder of the stock (Bruce and Deanna) to the holder of the ROFR (PLS) on February 1, 2006. Under the plain language of the ROFR, if the offer was not accepted by PLS, Bruce and Deanna could only sell to Oldcastle on the same terms specified in their offer and notice to PLS. There is no dispute that Bruce and Deanna in their notice to PLS stated that they intended to sell their stock to Oldcastle not just for the “price” which they claim PLS is limited to under the ROFR, but also “subject to the terms and conditions set forth in the Stock Purchase Agreement.” In other words, if PLS had elected to not exercise its option to purchase the stock under the ROFR, Bruce and Deanna could have sold their stock to Oldcastle but only on the terms specified in their offer and notice to PLS. The ROFR and the Stock Purchase Agreement make clear that Bruce, Deanna and Oldcastle did not deem themselves bound only by the price, but also by all of the terms specified in the Stock Purchase Agreement. It was the Stock Purchase Agreement which fixed the terms of the offer to PLS because those were the terms specified in their offer and notice to PLS and under which they would have sold to Oldcastle if PLS had not purchased the stock.

[¶ 21.] As discussed earlier in our review of the relevant case law and as discussed above, we must, in addition to looking at the language of the ROFR, also look to the language of the notice of intent to sell to determine the offer made and accepted by the parties. The notice of intent to sell received from Deanna on behalf of herself and Bruce stated the “purchase price for the Shares is $35,250,000, subject to the terms and conditions set forth in the Stock Purchase Agreement.” (emphasis added). This created an option which was formed by the “provisions granting the preferential right” (i.e., the Articles of Incorporation), “and by the provisions within the notice-of-intent-to-sell given to the rightholders,” (i.e., the Stock Purchase Agreement) conveyed to PLS with Deanna’s notice. Abraham, 968 S.W.2d at 524-25. In its exercise and notice of election of right of first refusal, PLS stated that it intended to exercise its right to purchase all of the shares “pursuant to the terms of the parties’ Stock Purchase Agreement” and “related Escrow Agreement[.]” Bruce and Deanna agreed to these terms by accepting payment from PLS and transferring the stock.

[¶ 22.] Under the facts of this case, we must consider the ROFR, the notice of intent to sell and the Stock Purchase Agreement together. PLS was entitled to all of the consideration which was part of the proposed sale to Oldeastle, including the non-monetary consideration. The Stock Purchase Agreement included an assignment of Bruce’s and Deanna’s “Company Claims” and a covenant not-to-sue that required Bruce and Deanna to obtain written consent before pursuing any claims against PLS. PLS performed all of its obligations under the Stock Purchase Agreement and is entitled to the same consideration that Oldeastle was to receive under the Stock Purchase Agreement.

[¶ 23.] Even if PLS is entitled to all the terms and conditions of the Stock Purchase Agreement, Bruce and Deanna claim that the release, covenant not-to-sue, and assignment of claims provisions do not provide a defense for PLS because the claims in this litigation had not accrued at the time of the stock purchase. PLS acknowledges that the Stock Purchase Agreement did not extinguish or release any Company Claims that Bruce and Deanna might have had against PLS. Rather PLS argues that it vested control over those claims in the party acquiring the stock. It argues that this was part of the consideration to be received by the buyer. We agree.

[¶ 24.] The Stock Purchase Agreement provides that it shall be governed by, construed and enforced in accordance with the laws of the State of New York. “We have generally recognized that parties may agree to be bound by the law of a particular state.” Dunes Hospitality, L.L.C. v. Country Kitchen Intern., Inc., 2001 SD 36, ¶ 10, 623 N.W.2d 484, 488 (citation omitted). “Covenants not to sue, requiring that the obligor forbear from bringing any current or future claims against the obligee, are valid in New York.” Kamfar v. New World Restaurant Group, Inc., 347 FSupp2d 38, 50 (S.D.N.Y. 2004) (other citation omitted). “A covenant not to sue ... is executory. The performance it demands is continuous and prospective either permanently or for a limited, stated period of time. The performance, of course, is the obligor’s future forbearance in asserting a claim which exists or may accrue against the obligee.” Colton v. New York Hospital, 98 Misc.2d 957, 965, 414 N.Y.S.2d 866, 873 (N.Y.Sup.1979) (emphasis added).

[¶ 25.] The Stock Purchase Agreement specifically provided:

The Seller will not pursue any claim or commence any Proceeding against the Company (a “Company Claim”) without obtaining the prior written consent of the Buyer, such consent to be withheld in the Buyer’s sole discretion. Upon the request of the Buyer, the Seller shall assign any Company Claim to the Buyer to the extent such assignment is allowed under Applicable Law. The Seller will cooperate with the Buyer with respect to any Company Claim.

As part of the Stock Purchase Agreement, Bruce and Deanna agreed to not pursue any claim or commence any proceeding against PLS without Oldcastle’s consent. Given the contentious history between Bruce and PLS, it was reasonable for Old-castle to wish to prevent Bruce and Deanna from being able to sue PLS after Old-castle purchased their shares. It is also reasonable to conclude that the agreement not to sue and the assignment of Bruce’s and Deanna’s claims and promissory notes were factors taken into consideration by the parties in reaching the $35,250,000 purchase price. The severance agreement, lease/option to purchase, and promissory notes at issue in this case were in existence at the time the Stock Purchase Agreement was executed. They were specifically mentioned in the agreement. Bruce and Deanna agreed in the Stock Purchase Agreement not to pursue any claim or commence any proceeding against PLS without obtaining the prior written consent of the buyer. They also agreed to assign any claim against PLS to the buyer. As the buyer, PLS is entitled to the same consideration as Oldcastle would have received, including control over Bruce and Deanna’s claims. Therefore, PLS is entitled to summary judgment on Bruce and Deanna’s claims. We reverse and remand with direction to the trial court to enter judgment in favor of PLS.

[¶ 26.] GILBERTSON, Chief Justice, and MEIERHENRY, Justice, and WILBUR, Circuit Judge, and MILLER, Retired Justice, concur.

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

[¶ 28.] TIEDE, Circuit Judge, for KONENKAMP, Justice, disqualified.

[¶ 29.] MILLER, Retired Justice, for ZINTER, Justice, disqualified.

      . While this appeal was pending, Bruce Lien died on February 8, 2007. An order allowing the substitution of the Estate of Brustuen H. Lien, a/k/a Bruce Lien, was issued by this Court on June 26, 2007.

      . Bruce had been receiving salary and bonuses averaging nearly $1,000,000 annually.

      . Bruce and Chuck each owned 50 percent of the voting shares. Chuck and members of his family together owned 50 percent of the nonvoting shares. Bruce owned the other 50 percent of the non-voting shares, except for one share transferred to Deanna in September 2004.

      .On the same day that PLS was notified of the Stock Purchase Agreement, Chuck was contacted by a representative of Oldcastle who asked to meet him at the Rapid City Regional Airport. The Oldcastle representative offered Chuck $45,000,000 for his PLS voting stock and the non-voting shares of Chuck and his family. Chuck rejected the offer.

      . A copy of the escrow agreement is not included in the record.

      . In this context, “Company” refers to PLS, not Oldeastle.

      . We note that if Bruce and Deanna believed that PLS’s acceptance subject to the terms and conditions of the Stock Purchase Agreement was not consistent with the terms of the ROFR, they could have refused to accept PLS's payment for the stock and proceeded with the Oldeastle purchase. They would have received the same cash consideration for their shares and would have avoided paying Oldeastle the $5,000,000 termination fee provided for in their agreement in the event PLS exercised its ROFR. Instead, they accepted PLS's payment of $35,250,000 into an escrow account as provided by the Stock Purchase Agreement and transferred the stock to PLS.


author: CADY, Justice.

text:
    TYSON FOODS, INC., Appellant, v. Migdalia HEDLUND, Appellee.
    No. 05-2127.
    Supreme Court of Iowa.
    Oct. 12, 2007.

      Coreen K. Sweeney and Scott A. Sund-strom of Nyemaster, Goode, West, Hansell & O’Brien, P.C., Des Moines, for appellant.
    Randall P. Schueller of Hopkins & Hu-ebner, P.C., Des Moines, for appellee.
   CADY, Justice.

In this appeal we must decide whether an employer may contest liability for an injury to its employee after admitting liability for the injury at a previous alternate medical care hearing. The workers’ compensation commissioner determined the employer was unable to deny liability based on the doctrine of issue preclusion. The district court affirmed. The court of appeals also affirmed, but held the liability issue was not res judicata. Instead, the court of appeals applied the doctrine of judicial estoppel and held the employer was estopped from contesting liability. On further review, we vacate the decision of the court of appeals, reverse the judgment of the district court, and remand to the commissioner for further proceedings.

I.Background Facts and Proceedings.

Migdalia Hedlund (Hedlund) was employed by Tyson Foods, Inc. (Tyson Foods). On January 10, 2005, Hedlund filed a workers’ compensation claim asserting she sustained a work-related injury to her bilateral hands, wrists, elbows, arms, right shoulder, and neck on February 1, 2004.

Hedlund’s treating physician was Dr. Timothy Schurman. On November 8, 2004, Dr. Schurman diagnosed Hedlund with “underlying inflammatory problems, possibly rheumatoid arthritis.” Dr. Schur-man also recommended Hedlund be seen by a rheumatologist.

On January 4, 2005, Tyson Foods submitted a series of written questions to Dr. Schurman. Tyson Foods asked:

1. “Are you able to state within a reasonable degree of medical certainty that the diagnosis of rheumatoid arthritis was caused by her work activities at Tyson Foods, Inc.?”
2. “Your 11/08/04 note indicates ‘possible RA aggravated by the work place’. Did the aggravation physically change the underlying condition?”
3. “Will further treatment be indicated for any work caused injury?”

Dr. Schurman responded in the negative to all three questions.

On February 11, 2005, Dr. Schurman diagnosed Hedlund with “underlying inflammatory arthritis, which has been materially aggravated by the work place.” In a February 18, 2005 letter, Dr. Schurman indicated Hedlund’s condition was aggravated by her work at Tyson Foods.

Tyson Foods considered Dr. Schurman’s opinions to be conflicting and requested an independent medical examination of Hed-lund as allowed by Iowa Code section 85.39 (2005). An appointment with Dr. Delwin Quenzer was scheduled for this purpose. Hedlund, however, believed the appointment with Dr. Quenzer was an attempt to change her treating physician.

As a result, Hedlund filed a petition with the workers’ compensation commissioner for alternate medical care on April 14, 2005 (April petition). At the hearing on the April petition, Tyson Foods clarified that the appointment with Dr. Quenzer was only for the purpose of an Iowa Code section 85.39 independent medical evaluation. Consequently, a deputy commissioner dismissed the petition. In a written dismissal order, the deputy found, “[a]s a result of claimant setting forth that the basis for the application for alternate medical care no longer exists, there is, therefore, no issue to be resolved.” The deputy commissioner also indicated in the order that, “[d]uring the course of the [April alternate medical care] hearing, [Tyson Foods] was asked whether liability was accepted on this claim and the attorney for [Tyson Foods] stated it was.”

Tyson Foods was subsequently not able to reschedule the independent medical examination with Dr. Quenzer and was unable to retain a rheumatologist willing to see Hedlund. Instead, Tyson Foods scheduled the independent medical examination with Dr. Donna Bahls.

On June 6, 2005, Hedlund filed a second petition for alternate medical care (June petition). Hedlund claimed Tyson Foods refused to provide her with the care of a rheumatologist. Tyson Foods filed an answer to the petition, but did not indicate it disputed liability of the claim.

On June 13, 2005, Tyson Foods received the results of Dr. Bahls’ independent medical examination of Hedlund. Based on those results, Tyson Foods filed an amended answer to the second petition for alternate medical care, indicating it was disputing liability.

On June 21, 2005, a deputy workers’ compensation commissioner held a hearing on the second petition for alternate care. Tyson Foods sought to amend its answer to specifically deny liability based on new medical information obtained from Dr. Bahls. The deputy commissioner determined Tyson Foods was precluded under the doctrine of res judicata from contesting liability for the injury after it admitted liability in the first alternate medical care proceeding. Pursuant to a delegation of authority by the workers’ compensation commissioner, the deputy commissioner’s decision constituted final agency action. Consequently, Tyson Foods filed a petition for judicial review with the district court. On December 6, 2005, the district court likewise found the issue of liability to be res judicata.

Tyson Foods appealed, and we transferred the case to the court of appeals. The court of appeals held the doctrine of issue preclusion did not apply because the issue was not actually raised and litigated in the first alternate medical care proceeding. However, it concluded Tyson Foods was judicially estopped from denying liability for Hedlund’s injury after it had conceded the issue at the April alternate medical care hearing.

II.Standard of Review.

“We apply the standards of Iowa Code section 17A.19 in our review of workers’ compensation decisions.” R.R. Donnelly & Sons v. Barnett, 670 N.W.2d 190, 195 (Iowa 2003). “On our review of the district court’s decision, we apply the standards of chapter 17A to determine if our conclusions are the same as those of the district court. If so, we affirm; otherwise, we reverse or otherwise modify.” Winnebago Indus., Inc. v. Haverly, 727 N.W.2d 567, 571 (Iowa 2006) (citing Hill v. Fleetguard, 705 N.W.2d 665, 669 (Iowa 2005)).

In this case, the district court relied on the doctrine of res judicata, as did the deputy commissioner, to support its conclusion that Tyson Foods was precluded from contesting liability. The court of appeals affirmed, but relied on the doctrine of judicial estoppel. As an “equitable doctrine invoked by a court at its discretion,” the appropriate standard of appellate review would normally be for an abuse of discretion. However, on further review from a decision of the court of appeals, we nevertheless review the decision of the district court. Therefore, we review, as did the court of appeals, for corrections of errors at law. IBP, Inc. v. Harpole, 621 N.W.2d 410, 414 (Iowa 2001).

III. Issue Preclusion.

We first consider whether the district court correctly applied the doctrine of res judicata or issue preclusion. One important element of issue preclusion is that the issue to be precluded must have been “raised and litigated” in the previous proceeding. Haverly, 727 N.W.2d at 572. Because the liability issue was admitted in the first proceeding, the issue was not actually raised and litigated. Id. Consequently, the district court erred by holding that Tyson Foods was precluded from contesting liability based on issue preclusion.

IV. Judicial Estoppel.

A. General Principles. We next consider whether the decision of the district court can be upheld under the doctrine of judicial estoppel. Although this theory was not raised or argued before the district court, we have previously stated: “[Bjecause judicial estoppel is intended to protect the integrity of the fact-finding process by administrative agencies and courts, the issue may properly be raised by courts, even at the appellate stage, on their own motion.” Id. at 573.

We first engaged in a comprehensive discussion of the doctrine of judicial estoppel in Vennerberg Farms, Inc. v. IGF Insurance Co., 405 N.W.2d 810 (Iowa 1987). Id. at 814 (observing that “[t]he rule has been sparingly applied in other jurisdictions and only alluded to in our own”). There, we observed that judicial estoppel is a “commonsense doctrine” that “prohibits a party who has successfully and unequivocally asserted a position in one proceeding from asserting an inconsistent position in a subsequent proceeding.” Id. Moreover, it is “designed to protect the integrity of the judicial process.” Id. It applies to administrative proceedings as well as court proceedings. Haverly, 727 N.W.2d at 573-74. The doctrine

addresses the incongruity of allowing a party to assert a position in one tribunal and the opposite in another, thereby creating the perception that at least one court has been misled.

Vennerberg Farms, 405 N.W.2d at 814. Yet, as the United States Supreme Court has observed, “ ‘[t]he circumstances under which judicial estoppel may appropriately be invoked are probably not reducible to any general formulation of principle.’ ” New Hampshire, 532 U.S. at 750, 121 S.Ct. at 1815, 149 L.Ed.2d at 978 (quoting Allen v. Zurich Ins. Co., 667 F.2d 1162, 1166 (4th Cir.1982)). We have likewise been flexible in our past application of the doctrine and view its flexible parameters as a strength in its ability to achieve its goal.

Nonetheless, we have often affirmed

[a] fundamental feature of the doctrine is the successful assertion of the inconsistent position in a prior action. Absent judicial acceptance of the inconsistent position, application of the rule is unwarranted because no risk of inconsistent, misleading results exists.

Vennerberg Farms, 405 N.W.2d at 814; accord Haverly, 727 N.W.2d at 573; Wilson, 666 N.W.2d at 166; Jacobs, 607 N.W.2d at 687; Roach, 524 N.W.2d at 403; Graber, 410 N.W.2d at 228. The judicial-acceptance component of the doctrine is the focal point of the resolution of this case.

B. Judicial Acceptance. The court of appeals held that the admission of liability by Tyson Foods was judicially accepted by the commissioner at the first alternate medical care hearing. Tyson Foods asserts on further review that its initial acceptance of liability was never accepted by the commissioner in rendering the decision.

We have never explicitly defined what constitutes “judicial acceptance.” However, examination of our previous judicial estoppel jurisprudence demonstrates we have found judicial acceptance only when the previous, inconsistent assertion was material to the holding in the first proceeding. For example, we applied the doctrine of judicial estoppel in Wilson v. Liberty Mutual Group, 666 N.W.2d 163 (Iowa 2003). In Wilson,

a workers’ compensation claimant settled his case with his employer under the provisions of Iowa Code section 85.35. As required by that statute, Wilson admitted there was a bona fide dispute with his employer regarding the cause of his injury. His employer’s insurance carrier paid benefits under the settlement agreement. Wilson then filed a lawsuit against the insurance carrier for alleged bad-faith failure to settle the claim.

Haverly, 727 N.W.2d at 574 (citing Wilson, 666 N.W.2d at 165). We held Wilson was estopped from claiming, a bad-faith failure to settle because the court relied on his prior acknowledgement of a bona fide dispute over liability in approving the settlement agreement. Wilson, 666 N.W.2d at 166-67. See generally Iowa Code § 85.35 (requiring parties to a contested case to submit a settlement to the workers’ compensation commissioner for approval). We observed that

[pjlainly Wilson’s position in the bad faith action is inconsistent with the position he asserted in the workers’ compensation litigation. To prevail on his bad faith claim, Wilson would necessarily have to prove that Liberty Mutual had no reasonable basis to deny his claim. Yet in the section 85.35 proceedings before the workers’ compensation commissioner, Wilson successfully asserted there was a bona fide dispute as to whether his injuries were work-related so as to entitle him to additional benefits. These positions are clearly inconsistent.

Wilson, 666 N.W.2d at 167.

In contrast, in Vennerberg Farms we held an issue was not judicially accepted when the position asserted was not material to the disposition of the prior litigation. 405 N.W.2d at 814. In that case, Venner-berg Farms, Inc. was owed money by Stennett Elevator, Inc., a licensed grain dealer, under various deferred-payment contracts. Id. at 812. However, the state commerce commission revoked Stennett Elevator’s grain dealer’s license, resulting in the appointment of a receiver. Id. In such a circumstance, Iowa Code section 542.12 required Vennerberg Farms to file any claims against the grain dealer (Sten-nett) and its surety within 120 days of the revocation of the license. Id. at 811-12.

Vennerberg Farms subsequently filed a claim, which the surety denied as untimely. Id. at 812. Vennerberg Farms then filed a petition in district court, which required the court to decide whether Vennerberg Farms filed its claim within 120 days of the revocation of Stennett’s grain dealer’s license, as required by statute. Id. at 814.

In a previous proceeding, Vennerberg Farms had asserted Stennett’s license was revoked in November of 1983. Id. The surety argued Vennerberg Farms was bound to its assertion in the previous lawsuit under the doctrine of judicial estoppel. Id. However, we refused to apply the doctrine to bind Vennerberg Farms on the grounds that “[t]he precise date of Sten-nett’s license revocation was immaterial in the prior litigation and no particular date can reasonably be claimed to have been accepted unequivocally by the court.” Id.

Consequently, it is apparent judicial estoppel applies only when the position asserted by a party was material to the holding in the prior litigation. This approach most closely tracks the rationale underlying judicial estoppel, as reflected in our prior pronouncement that, “[ajbsent judicial acceptance of the inconsistent position, application of the rule is unwarranted because no risk of inconsistent, misleading results exists.” Id; accord Haverly, 727 N.W.2d at 573; Wilson, 666 N.W.2d at 166; Jacobs, 607 N.W.2d at 687; Roach, 524 N.W.2d at 403; Graber, 410 N.W.2d at 228. When the inconsistent facts are not material to the disposition of the successive proceedings, these facts do not pose a risk of producing inconsistent or misleading results. Consequently, where there is no risk of inconsistent or misleading results, the rationale underlying the judicial estoppel doctrine is not advanced and there is no reason to apply the doctrine.

Vennerberg Farms—our seminal case addressing the doctrine of judicial estop-pel — is an apt example. The date of revocation of Stennett’s grain dealer’s license was not material to the outcome of the first proceeding. That date was, however, dispositive in Vennerberg Farms, 405 N.W.2d at 813, the second proceeding. Yet, even if the two proceedings yielded misleading or inconsistent results, those results did not occur as a result of Venner-berg Farms advancing inconsistent positions regarding the date of revocation in the two proceedings. As Vennerberg Farms implies, the application of the doctrine of judicial estoppel under such circumstances simply does not advance the policy goal of avoiding inconsistent, misleading results.

With these concepts in mind, we turn to the circumstances of this case. There is no doubt Tyson Foods asserted a position in the first proceeding for alternate medical care inconsistent with its position in the second proceeding. Yet, as our cases have developed, the fighting question is whether the inconsistent position asserted in the first proceeding was accepted by the commissioner in the disposition of the matter.

When an injured worker files a petition for alternate medical care, the admission of liability can be, and usually is, an essential issue to the resolution of the matter. Liability is normally an important component of the course of an alternate medical care proceeding because “the commissioner cannot order that the alternate care sought by the employee be furnished by the employer prior to a determination of compensability of the injury.” R.R. Donnelly, 670 N.W.2d at 197. Thus, if the employer accepts liability, the commissioner is permitted to determine the “reasonableness and necessity of medical care sought by an employee as an alternative to the care furnished by the employer.” Id. Conversely, if the employer denies liability, the commissioner must deny the petition. Id. Under this approach, the issue of liability, in both situations, is usually necessary to the disposition of the petition. Accordingly when an employer takes a position on liability during the proceedings on alternate medical care, the commissioner normally relies on that position in disposing of the application. See Haverly, 727 N.W.2d at 575. This case, however, is an exception.

In this case, Tyson Foods clearly took a position on liability at the first hearing. However, the commissioner did not act in any way to dispose of the application based on that position. Instead, the commissioner dismissed the petition solely because the grounds for alternate medical care asserted by Hedlund in the petition were determined to be mistaken, and the mistake was unrelated to the issue of liability or the acknowledgement of liability by Tyson Foods. Once the mistake was clarified at the hearing, the employee no longer needed the commissioner to determine the reasonableness and necessity of the medical care. The alternate medical care issue was rendered moot, and the proceeding was, as a result, a nonevent. The admission of liability by Tyson Foods played no role in the dismissal of the petition by the deputy commissioner. Consequently, judicial estoppel does not apply.

Hedlund argues that the failure to apply judicial estoppel to the circumstances of this case will permit employers to accept liability during the course of a workers’ compensation proceeding for the purpose of controlling medical care, and then later allow employers to deny the claim at the hearing in an effort to avoid responsibility for the injury. She argues this situation will enable employers to undermine the purpose of the alternative medical care process. Tyson Foods acknowledges tension can exist between employers and employees over the control of medical care, but points to its own problems when forced to take a position on liability before all relevant medical information may be known.

We recognize the problems that can arise between the parties over medical care. Yet, we think our existing legal principles, of which judicial estoppel is only one, serve to allay the competing concerns. Even though judicial estoppel applies only when needed to protect the integrity of the judicial process, a “broader analytical framework of estoppel and preclusion doctrines” exists to allow courts to equitably address the concerns of the parties. See Whitacre P’ship, 591 S.E.2d at 879. In other words, there are additional considerations beyond the judicial acceptance component of judicial estoppel to guide in a fair resolution of the concerns over medical care hypothesized by the parties. Such concerns are not presented under this record.

V. Conclusion.

The workers’ compensation commissioner and district court erroneously applied the doctrine of issue preclusion. The doctrine of judicial estoppel does not apply. We vacate the decision of the court of appeals, reverse the judgment of the district court, and remand the case to the workers’ compensation commissioner for further proceedings.

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

      . Section 85.39 provides: "After an injury, the employee, if requested by the employer, shall submit for examination at some reasonable time and place and as often as reasonably requested....” Iowa Code § 85.39 (2005).

      . See Iowa Code § 86.3 (allowing a deputy commissioner the power to issue a final agency decision pursuant to a written delegation of authority by the workers' compensation commissioner).

      . New Hampshire v. Maine, 532 U.S. 742, 750, 121 S.Ct. 1808, 1815, 149 L.Ed.2d 968, 977 (2001).

      . "The mainstream of American jurisprudence,” including a majority of the federal circuit courts of appeal, agrees. See Middleton v. Caterpillar Indus., Inc., - So.2d - (Ala.2007) (Parker, J., concurring) ("A survey of opinions from other jurisdictions indicates that Alabama would join the mainstream of American jurisprudence in adopting an exceeding-discretion standard in matters involving judicial estoppel.”); Stallings v. Hussmann Corp., 447 F.3d 1041, 1046 (8th Cir.2006) ("A majority of our sister circuits that have addressed the issue apply the abuse of discretion standard.”).

      . For example, we have only irregularly required an intent to mislead the court by adoption of the inconsistent positions. Compare Roach v. Crouch, 524 N.W.2d 400, 403 (Iowa 1994) (stating "application of the doctrine requires proof of an intentional attempt to mislead the court with the inconsistency"); Graber v. Iowa Dist. Ct., 410 N.W.2d 224, 228 (Iowa 1987) (stating "an intentional attempt to mislead the court with the inconsistency must be shown”); Vennerberg Farms, 405 N.W.2d at 814 (basing our holding in part on a conclusion that "there is no evidence that Vennerberg misled the court" in the first proceeding), with Haverly, 727 N.W.2d at 573-75 (estopping a party from advancing an inconsistent position, but not requiring intent to mislead the court); State v. Duncan, 710 N.W.2d 34, 43-45 (Iowa 2006) (discussing judicial estoppel, but not mentioning intent to mislead); Wilson v. Liberty Mut. Group, 666 N.W.2d 163, 166-67 (Iowa 2003) (estopping a party’s inconsistent position, but not imposing an intent-to-mislead requirement); State v. Jacobs, 607 N.W.2d 679, 686-87 (Iowa 2000) (discussing judicial estoppel, but not addressing intent to mislead); Ezzone v. Hansen, 474 N.W.2d 548, 549-51 (Iowa 1991) (discussing the "elements” of judicial estoppel, but not mentioning intent to mislead). Our past inconsistency in requiring an intent to mislead reflects national equivocation on the question of whether intent should be relevant to application of judicial estoppel. See Brian A. Dodd, Civil Procedure Intent and the Application of Judicial Estoppel: Equitable Shield or Judicial Heartbreak?, 22 Am. J. Trial Advoc. 481, 481 (1998) (observing "[tjhe degree to which a court will consider the intent of a litigant in the application of judicial estoppel is an issue causing great division among the jurisdictions, with no clear or unequivocal guidelines"). We believe the better approach is to refrain from "establishing] inflexible prerequisites or an exhaustive formula for determining the applicability of judicial estop-pel.” New Hampshire, 532 U.S. at 751, 121 S.Ct. at 1815, 149 L.Ed.2d at 978. As such, a party's intent to mislead is not a mandatory requirement, but may be considered insofar as it is relevant to pursuit of the stated goal of judicial estoppel: protection of the integrity of the judicial process. Whitacre P’ship v. Biosignia, Inc., 358 N.C. 1, 591 S.E.2d 870, 891 (2004) (refusing to impose a scienter requirement but allowing "it would weigh heavily in favor of invoking the doctrine” of judicial estoppel).