author: GILDEA, Justice.

text:
    STATE of Minnesota, Respondent, v. Tavon Tarrel TIMBERLAKE, Appellant.
    No. A06-72.
    Supreme Court of Minnesota.
    Feb. 14, 2008.
   OPINION

GILDEA, Justice.

Appellant Tavon Tarrel Timberlake was charged as a felon in possession of a firearm, in violation of Minn.Stat. § 624.713, subd. 1(b) (2006). Timberlake moved to suppress the gun, arguing that the search was unlawful because police did not have a sufficient basis to stop the motor vehicle in which he was a passenger. The district court denied the motion, and the court of appeals reversed. Because we conclude that police had a sufficient basis to conduct an investigatory stop of the vehicle, we reverse.

We begin with a brief discussion of the facts giving rise to this offense. While on routine patrol on May 30, 2004, St. Paul police officers Robert Jerue and Axel Henry monitored a dispatch call that came in at approximately 11:30 p.m. The dispatch informed squads in the area that the department had received a 911 call from an identified private citizen. The caller told police that a black male and black female were just seen leaving a gas station in a white Pontiac Grand Prix. The female was the driver and the male was the passenger. The caller further explained that while at the gas station “[h]e saw the male get out,” and “[w]hen the male exited the vehicle, something fell off of his lap or out of his pocket, out of his hand.” The caller saw “what he described as a gun to the dispatcher, laying on the ground.” He “then saw the black male passenger quickly pick up the gun and get back into the car.” The caller gave police his name and phone number and said that he would testify if necessary.

The officers were in the area of the gas station, and within a half-minute of hearing the dispatch information, officers Jerue and Henry saw a black female driving a white Grand Prix with a black male riding in the passenger seat. Based on the information they received from the dispatch call, the officers stopped the Grand Prix. After removing the driver and the passenger, who was subsequently identified as Timberlake, police found a loaded semiautomatic handgun under the front passenger seat. Timberlake was then arrested and subsequently charged as a felon in possession of a firearm, in violation of Minn.Stat. § 624.713, subd. 1(b) (prohibiting “a person who has been convicted of * * * a crime of violence” from possessing a pistol or other firearm).

Prior to trial, Timberlake asked the district court to suppress the gun. The court denied the motion. Following a jury trial, Timberlake was found guilty of violating Minn.Stat. § 624.713, subd. 1(b), convicted, and sentenced to 60 months in prison. On appeal, the court of appeals reversed, holding that the police did not have a sufficient basis to stop the vehicle. State v. Timberlake, 726 N.W.2d 509, 516 (Minn.App.2007). Specifically, the court concluded that “mere suspicion that a person possesses a gun is insufficient to warrant a Terry stop, absent additional particular and objective facts which create a reasonable suspicion that the possessor does not have a permit or is otherwise about to commit a crime.” Id. at 514. We granted the State’s petition for review.

We are asked to determine whether the district court erred when it denied Timberlake’s motion to suppress the gun. When we review a pretrial order on a motion to suppress where the facts are not in dispute, as here, we review the decision de novo and “determine whether the police articulated an adequate basis for the search or seizure at issue.” State v. Flowers, 734 N.W.2d 239, 247-48 (Minn.2007).

Both the United States and Minnesota Constitutions protect against “unreasonable searches and seizures.” U.S. Const, amend. IV; Minn. Const, art. I, § 10. To determine whether this constitutional prohibition has been violated, we examine the specific police conduct at issue. See State v. Davis, 732 N.W.2d 173, 178 (Minn.2007). The conduct at issue here is the investigatory stop of a motor vehicle. The United States Supreme Court has held that “an officer may, consistent with the Fourth Amendment, conduct a brief, investigatory stop when the officer has a reasonable, articulable suspicion that criminal activity is afoot.” Illinois v. Wardlow, 528 U.S. 119, 123, 120 S.Ct. 673, 145 L.Ed.2d 570 (2000) (citing Terry v. Ohio, 392 U.S. 1, 30, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968)). We have held that the “principles and framework of Terry [apply when] evaluating the reasonableness of [searches and] seizures during traffic stops even when a minor law has been violated.” State v. Askerooth, 681 N.W.2d 353, 363 (Minn.2004); see also State v. Wiegand, 645 N.W.2d 125, 133 (Minn.2002) (concluding that “the Terry principles are appropriately applied * * * when a motor vehicle is stopped”). The question before us therefore is whether a report from an identified private citizen that a person is carrying a gun in a motor vehicle provides police with a reasonable, articulable suspicion of criminal activity sufficient to justify an investigatory stop of the motor vehicle.

We have recognized that “the reasonable suspicion standard is ‘not high.’ ” State v. Bourke, 718 N.W.2d 922, 927 (Minn.2006) (quoting Richards v. Wisconsin, 520 U.S. 385, 394, 117 S.Ct. 1416, 137 L.Ed.2d 615 (1997)). While the standard is less demanding than probable cause or a preponderance of the evidence, it “requires at least a minimal level of objective justification for making the stop.” Wardlow, 528 U.S. at 123, 120 S.Ct. 673 (citing United States v. Sokolow, 490 U.S. 1, 7, 109 S.Ct. 1581, 104 L.Ed.2d 1 (1989)). Police “must be able to articulate more than an ‘inchoate and unparticularized suspicion or “hunch”’ of criminal activity.” Id. at 123-24, 120 S.Ct. 673 (quoting Terry, 392 U.S. at 27, 88 S.Ct. 1868). They must articulate a “particularized and objective basis for suspecting the particular person stopped of criminal activity.” United States v. Cortez, 449 U.S. 411, 417-18, 101 S.Ct. 690, 66 L.Ed.2d 621 (1981). That standard is met when an officer “observes unusual conduct that leads the officer to reasonably conclude in light of his or her experience that criminal activity may be afoot.” In re Welfare of G.M., 560 N.W.2d 687, 691 (Minn.1997).

The reasonable suspicion standard can also be met based on information provided by a reliable informant. Id. But information given by an informant must bear indicia of reliability that make the alleged criminal conduct sufficiently likely to justify an investigatory stop by police. See Adams v. Williams, 407 U.S. 143, 146-47, 92 S.Ct. 1921, 32 L.Ed.2d 612 (1972) (face-to-face information from a known informant “carried enough indicia of reliability to justify the officer’s forcible stop of [the defendant].”). “We presume that tips from private citizen informants are reliable.” Davis, 732 N.W.2d at 182. This is especially the case “when informants give information about their identity so that the police can locate them if necessary.” Id. at 183 (citing City of Minnetonka v. Shepherd, 420 N.W.2d 887, 888, 890 (Minn.1988), for the proposition “that a tip from an informant identifying himself as ‘a station attendant at the Q Petroleum Station in Minnetonka’ that he had ‘observed an intoxicated driver leave the gas station’ in a vehicle he identified by color and license plate was sufficient to give police reasonable suspicion that the driver was intoxicated”). Timberlake does not dispute the caller’s reliability in this case. Rather, his argument hinges on the legality of possessing a firearm in public.

Timberlake contends that because it is legal in Minnesota for a private citizen to carry a permitted gun in public, police may not conduct an investigatory stop without additional evidence that the possession itself is illegal. For example, Tim-berlake argues the police would need to suspect that the person carrying the gun does not have a valid permit or that some other criminal activity is afoot to warrant an investigatory stop. The State argues that police may conduct an investigatory stop of a motor vehicle without running afoul of the Constitution based on a report of gun possession inside the vehicle, because it is unlawful in Minnesota to possess a gun in a public place without a permit. Because the parties’ arguments are based on Minnesota’s firearm permit law, we turn first to an examination of that statute and our jurisprudence construing it.

Minnesota Statutes § 624.714, subdivision la (2006), provides that “[a] person * * * who * * * possesses a pistol in a motor vehicle * ⅜ * without first having obtained a permit to carry the pistol is guilty of a gross misdemeanor.” We first construed this language in State v. Paige and concluded that “[t]he statute is * * * properly characterized as a ‘general prohibition’ ” on the possession of firearms in public because “[a]nyone having a firearm in a public place may be prosecuted if he has no permit.” 256 N.W.2d 298, 303 (Minn.1977); see also State v. Folstrom, 331 N.W.2d 231, 233 (Minn.1983) (“[Possession of a pistol without a permit [is] a crime * * *.”). We determined in Paige that the “without a permit” language does not add another element to the crime of carrying a pistol in a public place. 256 N.W.2d at 203. Instead of an element of the crime, we said that the “without a permit” language creates an exception to criminal liability that places a burden on the defendant to come forward with some evidence of a permit. Id. at 303-04. Accordingly, we held that the State did not have to prove as part of its case-in-chief that the defendant did not have a permit. Id. at 303.

The State argues that consistent with our determination in Paige that lack of a permit was not an element of the offense, the police in this case did not need to know whether Timberlake had a permit in order to have a reasonable suspicion that Tim-berlake was engaged in criminal activity. We agree that our analysis in Paige supports the conclusion that the officers had a reasonable basis to suspect that Timber-lake was engaged in criminal activity, even without knowing whether he had a permit, based on the caller’s report that he saw Timberlake with a gun in the vehicle. But Timberlake notes that the statute has been amended since Paige, and he appears to suggest that these amendments overrule our construction of the statute in Paige.

Timberlake is correct that the legislature has amended the statute since Paige. Indeed, the legislature made extensive changes to the permitting provisions in the statute. Compare Minn.Stat. § 624.714, subds. 2-5 (1976), with Minn.Stat. § 624.714, subds. 2-4, 6-7 (2006). But the legislature did not change the permit language we construed in Paige as creating an exception to criminal responsibility and not an element of the crime. This language, while it has been recodified from subdivision 1 into subdivision la, is identical now to the language we construed in Paige, and it has been in the statute since it was enacted in 1975. Act of June 4, 1975, eh. 378, § 4, 1975 Minn. Laws 1278, 1281-83. The original language stated, “A person * * * who carries, holds or possesses a pistol * * * in a public place or public area without first having obtained a permit to carry the pistol is guilty of a gross misdemeanor.” Id. at 1281. In 2003, section 624.714, subd. 1, was repealed by the Minnesota Citizens’ Personal Protection Act and replaced by current subdivisions la (permit required; penalty) and lb (display of permit; penalty). Act of Apr. 28, 2003, ch. 28, art. 2, §§ 4-5, 35, 2003 Minn. Laws 265, 274, 290. Current section 624.714, subd. la (2006), is identical in all material respects to section 624.714, subd. 1 (1976), and maintains the phrase “without first having obtained a permit to carry the pistol.” In short, the language used in the statute does not support Tim-berlake’s argument that the legislature intended, with the 2003 amendments, to overrule Paige, and Timberlake has not brought to our attention any discussion by the legislature during the amendment process that would support the conclusion that the legislature intended to overrule Paige.

Not only is the operative language in the statute the same as it was when we decided Paige, but the legislature also added other provisions to the statute that reinforce our conclusion in Paige that the nonexistence of a permit is not an element of the crime, but that the permit holder has the obligation to provide evidence of his permit as a way to avoid criminal responsibility. For example, the legislature has placed the obligation on the permit holder to carry his permit card with him at all times when carrying the pistol and to “display the permit card and identification document upon lawful demand by a peace officer.” Minn.Stat. § 624.714, subd. lb(a). In addition, the legislature also requires that “[u]pon the request of a peace officer, a permit holder shall disclose to the officer whether or not the permit holder is currently carrying a firearm.” Id., subd. lb(d). Finally, we said in Paige that a permit holder could avoid prosecution for carrying a firearm in public by presenting a valid permit and identification to police. 256 N.W.2d at 303. In the 2003 amendments, the legislature specifically included this affirmative defense in the statute. Minn.Stat. § 624.714, subd. lb(b) (“A citation issued for violating paragraph (a) must be dismissed if the person demonstrates, in court or in the office of the arresting officer, that the person was authorized to carry the pistol at the time of the alleged violation.”). These recent provisions lend support to our construction of the statute in Paige.

We conclude that the legislature did not intend to overrule Paige through the Minnesota Citizens’ Personal Protection Act and in fact added provisions that buttress our analysis in Paige. See Minn. Stat. § 645.17(4) (2006) (“[W]hen a court of last resort has construed the language of a law, the legislature in subsequent laws on the same subject matter intends the same construction to be placed upon such language * * *.”).

In addition to his argument about the effect of the statutory amendments, Tim-berlake also argues that Paige has been undermined because, subsequent to Paige, we have treated similar language in other criminal statutes as creating an element of the offense. See State v. Burg, 648 N.W.2d 673, 678-79 (Minn.2002) (interpreting the phrase “without lawful excuse” in the nonsupport of a child statute as an element of the offense and observing that “[b]y embedding the phrase ‘without lawful excuse’ in the definition of the offense, the legislature demonstrated its intent to include the absence of a lawful excuse as one of the facts necessary for a conviction”); State v. Brechon, 352 N.W.2d 745, 750 (Minn.1984) (holding that a claim of right in a criminal trespass case is not a defense but a basic element of the State’s case that the State must prove beyond a reasonable doubt). But we have said that in distinguishing between an element of a crime and an exception to a statute, “[i]n order to place the burden of proving the ‘exception on the defendant, a court must decide that the act in itself, without the exception is ‘ordinarily dangerous to society or involves moral turpitude’ and that requiring the state to prove the acts would place an impossible burden on the prosecution.’” Breehon, 352 N.W.2d at 749 (quoting Williams v. United States, 138 F.2d 81, 82 (D.C.Cir.1943)). Possession of a firearm is distinguishable from nonpayment of child support or criminal trespass in terms of its potential danger to society. For that reason, Burg and Breehon do not undermine our interpretation of the permit provision in Minn.Stat. § 624.714, subd. 1, as an exception to — rather than an element of— the crime of carrying a pistol in a public place. See Paige, 256 N.W.2d at 303.

Timberlake finally relies on our decision in State v. Cripps, 533 N.W.2d 388 (Minn.1995), to support his argument that the investigatory stop in the present case was unlawful because officers had no reason to suspect that unlawful activity was afoot. In Cripps, an officer conducting a check for identification of bar patrons to enforce minimum alcohol consumption age requirements approached the defendant in a bar and asked for identification. Id. at 389-90. When the defendant gave police false identification, she was arrested. Id. at 390. We held that the seizure was unlawful because police failed to articulate “a sufficient individualized suspicion of criminal activity.” Id. at 392. In the case of underage drinking, however, age is an element of the offense. Minn.Stat. § 340A.503, subd. 1(a) (2006) (“It is unlawful for any * * * (2) person under the age of 21 years to consume any alcoholic beverages.”); see also Cripps, 533 N.W.2d at 392 (“An officer can justify an investigative seizure of a person who is in a bar if that person appears to the officer to be under the legal age to consume alcohol.”). Tim-berlake’s reliance on Cripps is therefore misplaced.

In sum, we reaffirm our interpretation of Minn.Stat. § 624.714 set forth in Paige. Based on Paige, we hold that police had a reasonable, articulable suspicion that Tim-berlake was engaged in criminal activity-based on the reliable informant’s report that Timberlake was carrying a gun in a motor vehicle. Accordingly, we reverse the court of appeals’ decision and reinstate Timberlake’s conviction.

Reversed.

      . The informant did not describe the gun in any way or identify it as a pistol.

      . Because the only issue before us is whether the police had a sufficient basis to support a stop of the vehicle, we do not discuss or analyze their post-stop conduct.

      . Timberlake does not argue that police needed probable cause to stop the vehicle. Rather, he assumes that reasonable, articulable suspicion is the applicable standard, and he contends that standard was not met here.

      . Timberlake cites Florida v. J.L. as standing for the proposition that the United States Supreme Court rejected an " 'automatic firearm exception’ to the rule in Terry.” United States v. Ubiles, 224 F.3d 213, 218 (3d Cir.2000) (quoting Florida v. J.L., 529 U.S. 266, 272, 120 S.Ct. 1375, 146 L.Ed.2d 254 (2000)). But the issue in J.L. was whether the informant was reliable and the Court held that he was not. J.L., 529 U.S. at 274, 120 S.Ct. 1375. The Court “did not consider under what circumstances a reliable tip that someone was carrying a gun would provide the police with reasonable suspicion.” United States v. Valentine, 232 F.3d 350, 354 (3d Cir.2000). J.L. therefore does not inform the issue presented in this case.

      . To support his position, Timberlake cites cases from other jurisdictions. See Ubiles, 224 F.3d 213; United States v. DeBerry, 76 F.3d 884 (7th Cir.1996). Cases from other jurisdictions are not particularly helpful because they depend on interpretation of a particular state’s or territory’s gun licensing statute. Here, we rely only on our own interpretation of Minnesota's statute.

      . In Paige, we generally used the phrase "without a permit” rather than specifically referring to the "without first having obtained a permit” language contained in the statute. See 256 N.W.2d at 303.

      . Timberlake contends that our discussion in Paige about whether the phrase "without a permit” is an element of the offense is dictum and therefore not binding. Dicta are generally “considered to be expressions in a court’s opinion which go beyond the facts before the court and therefore are the individual views of the author of the opinion and not binding in subsequent cases.” State ex rel. Poster v. Naftalin, 246 Minn. 181, 208, 74 N.W.2d 249, 266 (1956). In Paige, we held that a conviction for carrying a pistol in a public place had to be reversed because the county attorney introduced the pistol at trial in contravention of a suppression order. 256 N.W.2d at 302. We interpreted the "without a permit” language in order to guide the defendant’s retrial following our remand. Id. That discussion therefore is not dictum.

      . We also noted that if the defendant presents evidence of a permit, the burden shifts back to the State to show that the permit is invalid or has been violated. Paige, 256 N.W.2d at 304.

      . In the 2003 amendments, the legislature added the recognition and declaration "that the second amendment of the United States Constitution guarantees the fundamental, individual right to keep and bear arms. The provisions of this section are declared to be necessary to accomplish compelling state interests in regulation of those rights.” Minn. Stat. § 624.714, subd. 22 (2006). Timberlake does not claim that his Second Amendment rights were violated. We therefore have no occasion to reach that issue in this case.


source: Caselaw Access Project

author: /s/Alan C. Page Associate Justice

license: Public Domain

text:
    In re Petition for DISCIPLINARY ACTION AGAINST Kent Frederick STRUNK, a Minnesota Attorney, Registration No. 288391.
    No. A07-1901.
    Supreme Court of Minnesota.
    Feb. 14, 2008.
   ORDER

On October 5, 2007, the Director of the Office of Lawyers Professional Responsibility filed a petition alleging that respondent Kent Frederick Strunk committed professional misconduct warranting public discipline, namely, failing to competently and diligently handle an appeal, failing to comply with orders of the Minnesota Court of Appeals resulting in dismissal of the client’s appeal, failing to keep the client informed of the status of the case, falsely telling the client the appeal was pending after it had been dismissed by the court of appeals, failing to promptly notify the client of the dismissal of the appeal, in violation of Rules 1.1, 1.3, 1.4(a), 3.4(e), 4.1, 8.4(c), and 8.4(d), Minn. R. Prof. Conduct (MRPC), and making a false statement to the Director, in violation of Rule 8.1(b), MRPC, and Rule 25, Rules on Lawyers Professional. Responsibility (RLPR). Respondent did not serve or file an answer to the petition and, by order filed on November 20, 2007, we deemed the allegations of the petition admitted under Rule 13(b), RLPR. Oral argument was scheduled for February 7, 2008, as to the appropriate discipline to be imposed.

On February 6, 2008, the Director notified the court that the parties had reached a stipulation for disciplinary action. Under the parties’ stipulation, respondent admits the allegations of the petition, waives his procedural rights under Rule 14, RLPR, and with the Director recommends that the appropriate discipline is an indefinite suspension for at least 90 days, with no right to petition for reinstatement under Rule 18(a)-(d), RLPR, for at least 60 days.

The court has independently reviewed the file and approves the jointly recommended disposition.

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that respondent Kent Frederick Strunk is indefinitely suspended from the practice of law for a minimum of 90 days, effective as of the date of filing of this order. Respondent shall comply with Rule 26, RLPR (requiring notice of suspension to clients, opposing counsel, and tribunals). Respondent may petition for reinstatement under Rule 18(a)-(d), RLPR, no less than 60 days after the date of filing of this order. Reinstatement is further conditioned upon successful completion of the professional responsibility portion of the state bar examination within one year of the date of filing of this order, and satisfaction of continuing legal education requirements under Rule 18(e), RLPR. Respondent shall pay costs of $900 pursuant to Rule 24, RLPR.

BY THE COURT:

/s/Alan C. Page Associate Justice


author: LANSING, Judge.

text:
    NORTHLAND TEMPORARIES, INC., Respondent, v. Anthony TURPIN, et al., Appellants.
    No. A06-2201.
    Court of Appeals of Minnesota.
    Feb. 5, 2008.

      Daniel E. Kelly, Marnie E. Fearon, Fel-haber, Larson, Fenlon & Vogt, P.A., Minneapolis, MN, for respondent.
    Bradley A. Kletscher, Susan E. Sheely, Barna, Guzy & Steffen, Ltd., Coon Rapids, MN, for appellants.
    Considered and decided by DIETZEN, Presiding Judge; LANSING, Judge; and ROSS, Judge.
   OPINION

LANSING, Judge.

The district court denied the motion of two minority shareholders of an inactive corporation to vacate a default judgment, entered against them individually, for money that the corporation owed to a temporary-services agency. Because the district court’s determination that the minority shareholders did not have a reasonable defense on the merits relies on an error of law and because the determination that the minority shareholders did not have a reasonable excuse for their failure to submit a timely answer relies on a factual error, we reverse and remand.

FACTS

The Minnesota Secretary of State’s office issued a certificate of incorporation for Manufacturing Out Sourcing Specialists, Inc. on June 22, 1999. Paul Anthony (Paul) Turpin and Tim Turpin are minority shareholders of the corporation; each brother owns twenty-three percent of the corporation’s stock. Their father, David Turpin, is the majority shareholder and owns fifty-four percent of the stock. In this action to recover money for temporary services performed for the corporation, Northland Temporaries, Inc., named only Paul and Tim Turpin as defendants.

Although the secretary of state’s certificate of incorporation was issued for Manu-factoring Out Sourcing Specialists Inc., the corporation’s promotional materials, checks, and invoices, refers to the corporation as “M.O.S.S., Inc.” and sometimes “MOSS, Inc.” In some places, Manufacturing Out Sourcing Specialists is spelled out under the abbreviated version of the name, but in other places “MOSS, Inc.” or “M.O.S.S., Inc.” stands alone. The record indicates that the shareholders of M.O.S.S., Inc. always used the corporate designation “Inc.” in referring to the corporation’s name and that M.O.S.S., Inc.’s promotional materials, checks, and invoices — including a framed handout that hung inside M.O.S.S., Inc.’s office — identified M.O.S.S. as a corporation.

In the summer of 2000 or 2001, a salesman from Northland visited the office of M.O.S.S., Inc., made an oral presentation, and offered M.O.S.S., Inc. the opportunity to hire temporary employees through Northland. The Northland salesman initiated the contact. During his visit, the salesman did not present anyone at M.O.S.S., Inc. with a written contract or discuss the terms of M.O.S.S., Inc.’s potential relationship with Northland other than rates. The record does not contain a written agreement for services other than the conditions that are listed on the reverse side of the employee’s time sheets. But the evidence establishes that M.O.S.S., Inc. regularly hired temporary employees from Northland, beginning shortly after the salesman’s presentation and continuing until November 2005. The invoices that Northland mailed to M.O.S.S., Inc. are addressed to “M.O.S.S.” at the corporation’s address. The timesheets that Northland used to generate its invoices identify the client as “Moss, Inc.” or as “Moss.”

M.O.S.S., Inc. ceased its operations in January 2006. At that time, M.O.S.S., Inc. owed Northland $12,901.31 for services provided by Northland’s employees. In an affidavit, Tim Turpin states that after M.O.S.S., Inc. ceased its operations he received a call from Northland’s general manager asking about payments on the outstanding bill. The affidavit states that he told the general manager that M.O.S.S., Inc. was out of business and that the Tur-pins no longer worked for M.O.S.S., Inc. In a counteraffidavit, Northland’s general manager states that his only telephone conversation with Tim Turpin between June 2005 and June 2006 was Turpin’s telephone call after service of the summons and complaint and was confined to Turpin’s question of whether Northland had a contract for services with the Tur-pins.

In preparing to file suit against M.O.S.S., Inc., counsel for Northland checked with the secretary of state’s office and was unable to find a Minnesota corporation registered under the name “M.O.S.S., Inc.” Northland therefore filed a complaint against “Anthony Turpin and Tim Turpin, d/b/a M.O.S.S.” Northland did not include M.O.S.S., Inc. as a defendant.

Tim Turpin’s affidavit states that after receiving the summons and complaint, he again called Northland’s general manager. He states that he told the general manager that M.O.S.S., Inc. was a subchapter S corporation and that he and his brother were therefore not personally liable for the corporation’s debt. The counteraffidavit of Northland’s general manager states that this was the conversation that was limited to Turpin’s question about whether they had a written contract.

Neither Paul nor Tim Turpin submitted an answer to Northland’s complaint. On January 24, 2006, the Turpins registered a corporation entitled “MOSS, Inc.” with the secretary of state.

The district court entered a default judgment against Paul and Tim Turpin, jointly and severally, in the amount of $13,974.31 on April 7, 2007. The Turpins filed a motion to vacate the default judgment on June 2, 2006. The court denied the motion, and this appeal follows.

ISSUES
I. Do the law and the facts support the determination that the minority shareholders have no reasonable defense on the merits of the action?
II. Do the facts support the determination that the minority shareholders have no reasonable excuse for their failure to submit an answer?
III. What is the remedy if the district court relies on an error of law or fact when applying the factors in Hinz v. Northland Milk & Ice Cream Co., 237 Minn. 28, 53 N.W.2d 454 (1952)?

ANALYSIS

A district court may vacate a final judgment for reasons of “[mjistake, inadvertence, surprise, or excusable neglect.” Minn. R. Civ. P. 60.02(a). Minnesota courts analyze motions seeking relief from orders and judgments under Minn. R. Civ. P. 60.02 by applying a four-factor test that was established in Hinz v. Northland Milk & Ice Cream Co., 237 Minn. 28, 30, 53 N.W.2d 454, 456 (1952). The Hinz factors require consideration of whether the mov-ant has (1) a reasonable defense on the merits; (2) a reasonable excuse for the failure or neglect to answer; (3) acted diligently after notice of entry of the judgment; and (4) demonstrated that no prejudice will occur to the judgment creditor. Id.

The district court has broad discretion in deciding whether to grant or deny a rule 60.02 motion. Kosloski v. Jones, 295 Minn. 177, 180, 203 N.W.2d 401, 403 (1973). But broad discretion does not mean that the discretion is unlimited. Spicer v. Carefree Vacations, Inc., 370 N.W.2d 424, 426 (Minn.1985). Significantly, the Hinz decision itself limits the district court’s discretion by specifically holding that “[i]n the exercise of sound judicial discretion ... it is the duty of the trial court ... to grant a motion to open a default judgment and permit a party to answer” if the party in default shows that it has met each of the requirements in the four-factor test. Hinz, 237 Minn, at 30, 53 N.W.2d at 455-56. The supreme court reaffirmed that requirement in Finden v. Klaas, 268 Minn. 268, 271-73, 128 N.W.2d 748, 750-51 (1964) (reversing denial of motion to vacate because defendant met three factors and, on fourth — absence of reasonable excuse — attorney’s neglect was not attributable to defendant).

The supreme court has also limited the district court’s discretion in deciding motions under rule 60.02 by requiring that the moving party must demonstrate a reasonable defense on the merits before the district court may grant a motion to open a default judgment. See Vrooman Floor Covering Inc. v. Dorsey, 267 Minn. 318, 322, 126 N.W.2d 377, 380 (1964) (reversing an order to reopen judgment when movant failed to show reasonable defense on merits); see also Hengel v. Hyatt, 312 Minn. 317, 319, 252 N.W.2d 105, 106 (1977) (“If no affidavit of merit or other proof of a valid defense is provided, the motion to vacate will be denied.”).

Finally, the supreme court has held that, “if the trial court has acted under a misapprehension of the law,” the decision will be reversed on appeal even though the opening of a default judgment “lies almost wholly within the sound discretion of the trial court.” Sommers v. Thomas, 251 Minn. 461, 469, 88 N.W.2d 191, 196-97 (1958). Similarly, when the district court’s reasons are based on facts not supported by the record, the determination will not be sustained. See Roehrdanz v. Brill, 682 N.W.2d 626, 631-32 (Minn.2004) (evaluating district court’s discretionary ruling on motion to vacate default judgment); Duenow v. Lindeman, 223 Minn. 505, 518, 27 N.W.2d 421, 429 (1947) (reversing order denying motion to vacate because “plain and decisive facts were entirely overlooked by the trial judge”).

In the original complaint, Northland alleged that Paul and Tim Turpin, doing business as M.O.S.S., breached their contract to pay for Northland’s temporary services and, because Northland had provided M.O.S.S. with invoices, Paul and Tim Turpin were liable under an account-stated theory. At the hearing on the motion to vacate, Northland argued that the Turpin brothers were liable because they did not “file for a certificate of assumed name.”

In denying the Turpins’ motion to vacate, the district court applied the four Hinz factors and concluded that the Tur-pins had demonstrated two of the four factors. The record supports the district court’s decision on these factors. First, the district court concluded that they had acted “with due diligence after receiving notice of entry of judgment against them.” Second, the district court concluded that the Turpins had demonstrated that “a vacation of the default judgment results in no substantial prejudice to Northland.” On the remaining two Hinz factors, the district court concluded that the Turpins had not demonstrated that they had a reasonable excuse for failure to answer and that they had not shown that they had a reasonable defense on the merits. We therefore turn to the district court’s analysis on each of these two factors.

I

A reasonable defense on the merits is one that, if established, provides a defense to the plaintiffs claim. Finden, 268 Minn, at 271, 128 N.W.2d at 750. Specific information that clearly demonstrates the existence of a debatably meritorious defense satisfies this factor. Charson v. Temple Israel, 419 N.W.2d 488, 492 (Minn.1988).

The Turpins’ defense is based on the general rule that the employees and shareholders of a corporation are not personally liable for the corporation’s debts. See Minn.Stat. § 302A.425 (2006) (limiting shareholder liability). Northland advances two theories under which this general rule does not apply. We conclude, however, that the Turpins still have a reasonable defense under either of Northland’s theories.

Northland’s first theory is that the Turpin brothers are liable for the debts of the corporation because they were agents acting for an undisclosed or partially disclosed principal. The district court accepted this argument and determined that the Turpins had acted on behalf of M.O.S.S., Inc., a partially disclosed principal. For two reasons, we conclude that the Turpins have a reasonable defense on the merits against this first theory.

First, the evidence in the record does not show that the Turpins personally contracted with Northland on behalf of M.O.S.S., Inc. Cf Haas v. Harris, 347 N.W.2d 838, 840 (Minn.App.1984) (stating person is liable on contract he executes on behalf of partially disclosed principal). The record suggests that the salesman reached an agreement with someone at M.O.S.S., Inc. before sending temporary employees, but nothing in the record indicates that Paul or Tim Turpin personally contracted with Northland or were personally involved in reaching an agreement with Northland.

Second, the facts in the record weigh against Northland’s claim that M.O.S.S., Inc. was an undisclosed or a partially disclosed principal. An agent acts on behalf of a disclosed principal “if, when an agent and a third party interact, the third party has notice that the agent is acting for a principal and has notice of the principal’s identity.” Restatement (Third) of Agency § 1.04(2) (2006). Northland does not dispute that it knew that Paul and Tim Turpin acted on behalf of an entity identified as M.O.S.S., Inc. And Northland does not claim that knowing M.O.S.S., Inc.’s full name was necessary to assess its creditworthiness or its ability to perform duties under the contract. See Restatement (Third) of Agency § 6.02 cmt. b (2006) (stating that when principal is disclosed, third party can assess principal’s reputation, assets, and other indicia of creditworthiness as well as its ability to perform duties under contract).

To the contrary, the record indicates that Northland had notice of M.O.S.S., Inc.’s corporate identity. Northland’s salesman sought out M.O.S.S., Inc. as an entity with which it was interested in doing business. In addition to knowing that M.O.S.S., Inc. was incorporated, Northland knew the location of M.O.S.S., Inc. and the names of M.O.S.S., Inc.’s owners. Furthermore it is reasonable to assume that, after visiting with people at M.O.S.S., Inc., Northland’s salesman had notice of M.O.S.S., Inc.’s basic purpose and structure. Because the record demonstrates that Northland had notice of facts reasonably sufficient to assess M.O.S.S., Inc.’s creditworthiness and ability to perform duties under the contract, Northland has not conclusively shown that M.O.S.S., Inc. was an undisclosed or only partially disclosed principal. Cf. Haas, 347 N.W.2d at 840 (holding that agent acted on behalf of partially disclosed principal because third party did not have notice that principal was incorporated).

Northland’s second theory is that the Turpins do not have a reasonable defense on the merits because they failed to file a “certificate of assumed name.” Under this second theory, Northland claims that the Turpins are personally liable because they violated Minn.Stat. § 333.01 (2006), which prohibits a person from conducting business under an assumed name “unless such person shall file in the Office of the Secretary of State, a certificate setting forth the name and business address under which the business is conducted or transacted.” Under Minn.Stat. § 333.065 (2006), a person who violates Minn.Stat. § 333.01 is subject to penalties and remedies provided in Minn.Stat. § 8.31 (2006) as well as remedies or penalties otherwise available. And according to Minn.Stat. § 8.31, subd. 3(a), any person who is injured by a violation of Minn.Stat. § 333.01 “may bring a civil action and recover damages, together with costs and disbursements ... and receive other equitable relief as determined by the court.”

The Turpins, however, have a reasonable defense on the merits against this “assumed-name” theory. Northland has offered no support for its claim that an acronym is an assumed name under Minn. Stat. § 333.01, and we find no basis for concluding as a matter of law that, unless a corporation wishes to expose its shareholders to personal liability for corporate debt under Minn.Stat. § 333.01, it cannot refer to itself by an acronym reasonably drawn from its name. Furthermore, Northland has not alleged that the Turpins caused injury to Northland by using an acronym. If Northland is able to recover from M.O.S.S., Inc. it will suffer no injury, and, even if it is unable to recover from M.O.S.S., Inc., the Turpins’ use of the acronym has not been linked to Northland’s inability to recover for breach.

Because the Turpins have a reasonable defense on the merits against each of Northland’s theories, we return to the fundamental principle that, in the absence of an agreement to guarantee corporate debt, shareholders and employees are not liable to creditors for debts incurred by the corporation. Minn.Stat. § 302A.425. Because Northland has not conclusively shown that this principle does not apply, the district court misapprehended the law when it determined that the Turpins did not meet the requirements of the first Him factor.

II

The district court also based its decision to deny the Turpins’ motion on the second Him factor, determining that the Turpins do not have a reasonable excuse for their failure or neglect to answer the complaint. The Turpins, by affidavit, assert that they did not answer because the complaint alleged that M.O.S.S. had breached its contract by failing to pay Northland and that they were not personally liable for M.O.S.S., Inc.’s debts. They believed that Tim Turpin’s telephone call to the general manager telling him that they were incorporated would resolve the matter because Northland was also a corporation and would understand that the Turpins were not personally liable. See Guillaume & Assocs., Inc. v. Don-John Co., 371 N.W.2d 15, 19 (Minn.App.1985) (recognizing that lay person’s failure to answer in some circumstances may not be unreasonable).

The district court concluded that the Turpins’ failure to answer was inexcusable because they intentionally disregarded not only the summons and complaint, but also ignored the district court’s order for disclosure, which made it clear that some type of paper must be filed with the court. In reaching this conclusion, the district court relied on the reasoning of Black v. Rimmer, 700 N.W.2d 521 (Minn.App.2005). In Black, the court issued an order requiring an informational statement in July 2003 and entered a default judgment one year later, in July 2004. Id. at 527-28. The court reasoned that although a non-lawyer might not understand the language in a summons, the order for an informational statement makes it clear to anyone that some type of paper must be filed with the court and the failure to respond to that requirement was unreasonable. Id. at 527. In drawing a parallel to Black, the district court apparently overlooked the fact that the court’s order to the Turpins to provide financial disclosure was not issued until May 16, 2006, more than a month after it entered the default judgment against the Turpins. Consequently, unlike the circumstances of Black, the court’s order for disclosure did not give the Turpins additional timely notice that they needed to file papers with the court.

The only other notice evidenced in the record was Northland’s notice of request for a hearing to determine attorneys’ fees. This notice was not served on the Turpins personally but was served by mail to M.O.S.S., Ine.’s business address on February 1, 2006. M.O.S.S., Inc. ceased its operations in January 2006. The evidence in the record does not indicate whether the Turpins received the notice or that any failure to respond was intentional. Because the district court’s decision on the second Him factor was significantly based on facts not supported by the record, the district court’s decision cannot be sustained.

Ill

When appellate courts reverse the district court’s exercise of discretion under rule 60.02, we typically conclude that further proceedings are unnecessary. See Charson, 419 N.W.2d at 492 (remanding only for vacation of judgment and dismissal); Hinz, 237 Minn, at 32, 53 N.W.2d at 457 (reversing); Guillaume, 371 N.W.2d at 19 (ordering default judgment vacated). In this case, however, the district court’s decision was based in part on a factual error. For two reasons we conclude that it is, therefore, appropriate to remand for a reevaluation of the Him factors. First, it is within the province of the district court to resolve factual disputes in testimony and affidavits. Roehrdanz, 682 N.W.2d at 630, 631-32; Roe v. Widme, 191 Minn. 251, 252-53, 254 N.W. 274, 275 (1934). And, second, it is generally for the district court to determine whether a litigant’s excuse for not having answered in time is a reasonable excuse. Standard Oil Co. v. King, 238 Minn. 81, 83, 55 N.W.2d 710, 712 (1952).

We note that the district court, relying again on Black, stated that “[t]o obtain relief under rule 60.02, all four of the [Him ] factors must be present.” Although this is an accurate statement of the standard of review in Black, an element of caution is necessary in its application. As a basis for this holding, Black cites Char-son, 419 N.W.2d at 491. Charson, in reviewing the district court’s denial of a motion to vacate a dismissal, applied a rule 60.02 analysis. 419 N.W.2d at 490-92. The supreme court concluded that Char-son had satisfied three of the Him factors and then stated that “before relief will be granted from a final order or judgment, the moving party must also establish to the satisfaction of the court that it possesses a meritorious claim.” Id. at 491. As authority for this point, the Charson court relied on Hengel, 312 Minn, at 319, 252 N.W.2d at 106. Other appellate decisions have similarly cited Charson for this review standard. See, e.g., Nguyen v. State Farm Mut. Auto. Ins. Co., 558 N.W.2d 487, 490 (Minn.1997) (citing Charson for conclusion that “[a]ll four of the [Him] factors must be satisfied in order to justify relief under [rule 60.02]”).

Charson, however, does not say that all four factors must be met to allow a district court to exercise its discretion and grant relief under rule 60.02. Read carefully, it only states that a litigant seeking relief under rule 60.02 must show a meritorious claim or a reasonable defense on the merits. Charson, 419 N.W.2d at 491. This reading is confirmed by the authority it cites — Hengel, which states that a motion to vacate will be denied if the movant fails to show a meritorious defense. Hengel, 312 Minn, at 319, 252 N.W.2d at 106. Hengel, in turn, refers to Vrooman, 267 Minn. at 322, 126 N.W.2d at 380, which also states that a motion to vacate will be denied if the movant has not demonstrated a reasonable defense on the merits. Hengel, 312 Minn. at 319, 252 N.W.2d at 106.

It is important to note that Him and Finden do not limit the district court’s discretion to grant relief under rule 60.02; they limit the district court’s discretion to deny relief. Hinz, 237 Minn. at 30, 53 N.W.2d at 455-56; Finden, 268 Minn. at 271, 128 N.W.2d at 750. Satisfaction of all four Him factors requires that relief from judgment must be granted. Id. Consequently, these factors provide a relevant framework for the district court in the exercise of its affirmative discretionary power. But we find no solid authority for saying that the district court may only grant relief under rule 60.02 when all four factors have been fully met.

On this record, the facts and the law establish that the Turpins have a reasonable defense based on the general rule that the employees and shareholders of a corporation are not personally liable for the corporation’s debts. On the remaining factor — the reasonableness of the Turpins excuse for failing to respond — we remand to the district court for further consideration. The district court may exercise its discretion to determine whether the motion for relief should be granted, but it is not precluded from granting relief even if it determines that the Turpins’ excuse was not reasonable. We also reverse and remand to the district court the determination on attorneys’ fees, recognizing that it is within the district court’s discretion to condition relief from judgment on the payment of costs associated with the default proceedings. Finden, 268 Minn. at 272, 128 N.W.2d at 751.

DECISION

Because the district court’s determinations that the Turpins failed to show that they have a reasonable defense on the merits and failed to establish that they have a reasonable excuse were significantly affected by mistakes of law and fact, we reverse and remand for reconsideration of the factors set out in Hinz v. Northland Milk & Ice Cream Co., 237 Minn. 28, 53 N.W.2d 454 (1952).

Reversed and remanded.


author: TOUSSAINT, Chief Judge.

text:
    Gary Allen KACHINA, petitioner, Appellant, v. STATE of Minnesota, Respondent.
    No. A07-1400.
    Court of Appeals of Minnesota.
    Feb. 12, 2008.

      Gary Allen Kachina, Columbia Heights, MN, pro se appellant.
    Lori Swanson, Attorney General, St. Paul, MN; and Michael 0. Freeman, Hen-nepin County Attorney, Michael K. Walz, Assistant County Attorney, Minneapolis, MN, for respondent.
    Considered and decided by TOUSSAINT, Chief Judge; LANSING, Judge; and ROSS, Judge.
   OPINION

TOUSSAINT, Chief Judge.

Appellant Gary Allen Kachina has filed a petition for a writ of prohibition challenging the district court’s denial of his motion to correct his sentence. By order filed August 14, 2007, this court construed the petition as a notice of appeal because the district court’s order denying the motion is an appealable order. Because we conclude that the action of the department of corrections (DOC) in assigning appellant to intensive supervised release upon his supervised release is not an improper modification of his sentence, we affirm.

FACTS

Appellant was sentenced in October 2004 to 58 months in prison for first-degree burglary. The DOC developed a release plan for appellant under which he would be placed in a halfway house and assigned to intensive supervised release upon his supervised release. Appellant filed a motion to correct his “sentence” by removing the requirement that he comply with intensive supervised release. The district court, construing the motion as a postconviction petition, denied relief, concluding that the DOC had authority to impose the special conditions of intensive supervised release and that those conditions did not alter the sentence imposed by the sentencing court.

Appellant filed a petition for a writ of prohibition with this court, which we have construed as a notice of appeal from an appealable postconviction order. See State v. Pflepsen, 590 N.W.2d 759, 764 (Minn.1999).

ISSUE

Did the DOC exceed its authority, or infringe on the sentencing authority of the court, by directing that appellant be assigned to intensive supervised release upon his supervised release from prison?

ANALYSIS

Appellant argues that the DOC’s decision to place him on intensive supervised release and impose special conditions of release when he is eligible for supervised release was an unauthorized modification of his sentence. See State v. Henderson, 527 N.W.2d 827, 829 (Minn.1995) (holding that placement of probationer in special supervision program as condition of his probation was “intermediate sanction” that county corrections department did not have authority to impose).

This court reviews a postconviction order to determine whether it is supported by sufficient evidence in the record. See Dukes v. State, 621 N.W.2d 246, 251 (Minn.2001). The postconviction court’s decision will not be reversed absent an abuse of discretion. See id. But appellant presents a legal issue, which is subject to de novo review. See Butala v. State, 664 N.W.2d 338, 338 (Minn.2003).

Intensive supervised release is an intensive supervision program that the DOC is authorized to impose for “all or part of’ the supervised release period. Minn.Stat. § 244.05, subd. 6 (2006). Although the sentence imposed by the district court determines the maximum length of the supervised release period, the court does not set the terms or conditions on which the offender is released. See generally Minn. Stat. § 244.05, subd. 1 (2006) (defining length of supervised release term). The DOC, not the court, revokes supervised release if the offender violates any of the conditions of supervised release. Minn. Stat. § 244.05, subd. 3(2) (2006).

The division of authority that appellant advocates between the court and correctional authorities exists when sentences are stayed. The statute governing stayed sentences provides that the district court may order “intermediate sanctions.” Minn.Stat. § 609.135, subd. 1(a), (b) (2006). The district court has the authority to determine whether probation should be revoked. Minn.Stat. § 609.14, subd. 1(a) (2006). The statute governing supervised release, however, provides that it is the commissioner of corrections that decides whether an inmate’s supervised release is to be revoked. Minn.Stat. § 244.05, subd. 3(2). The supreme court has held that the DOC’s authority over supervised release does not interfere with the functions of the judiciary. State v. Schwartz, 628 N.W.2d 134, 140-41 (Minn.2001). Thus, appellant’s argument that the district court alone has the authority to establish conditions of supervised release is without merit.

Only the district court can impose the conditions of probation. See Henderson, 527 N.W.2d at 829. The district court may not delegate that authority, even to the DOC or to other corrections authority. Id. But, although the conditions of supervised release, including intensive supervised release, may resemble conditions of probation, the status of the offender is significantly different. The legislature has explicitly granted authority over supervised release to the DOC. See Minn.Stat. § 244.05, subd. 3(2) (providing that commissioner of corrections determines whether supervised release should be revoked). The statute specifically authorizes the commissioner of corrections to determine who is placed on intensive supervised release. Minn.Stat. § 244.05, subd. 6. We therefore conclude that the DOC did not exceed its authority in requiring appellant to begin his supervised release term on intensive supervised release.

DECISION

The district court did not err in refusing to remove the intensive supervised release requirement imposed by the DOC and in denying appellant’s postconviction petition.

Affirmed.


author: SANDSTROM, Justice.

text:
    2008 ND 13
    STATE of North Dakota, Plaintiff and Appellee v. Robert DESJARLAIS, Defendant and Appellant.
    Nos. 20070156, 20070157.
    Supreme Court of North Dakota.
    Jan. 22, 2008.
    Nicole E. Foster, Williams County State’s Attorney, Williston, N.D., for plaintiff and appellee.
    Benjamin C. Pulkrabek, Mandan, N.D., for defendant and appellant.
   SANDSTROM, Justice.

[¶ 1] Robert Desjarlais appeals from district court judgments following a jury verdict finding him guilty of three counts of reckless endangerment under circumstances manifesting extreme indifference to human life and one count of fleeing a police officer. We affirm.

I

[¶ 2] In the early morning of October 7, 2006, Williston police officers became involved in a high-speed chase in pursuit of a blue Chevy Lumina. The vehicle was owned by David Fite. During the pursuit, the driver of the vehicle ran numerous stop signs, drove the wrong way on a divided highway, and struck an officer’s vehicle on two separate occasions. Later, Fite’s vehicle was found abandoned in a ravine. About three miles from the ravine where the car was found, Desjarlais was apprehended by officers from the Williams County Sheriffs Department. He had with him a set of car keys, a cell phone, a charger, and a flashlight. The key was used to unlock the vehicle in the ravine. Fite testified the other items were from his vehicle.

[¶ 3] The State charged Desjarlais with three counts of reckless endangerment arising from the incidents that took place on October 7, 2006. At trial, the jury found Desjarlais guilty of three counts of reckless endangerment manifesting extreme indifference to human life and one count of fleeing a peace officer.

[¶ 4] The district court had jurisdiction under N.D. Const, art. VI, § 8, and N.D.C.C. § 27-05-06. Desjarlais’s appeal from the criminal judgments was timely under N.D.R.App.P. 4(b). This Court has jurisdiction under N.D. Const, art. VI, §§ 2 and 6, and N.D.C.C. § 29-28-06.

II

[¶ 5] Desjarlais argues the three counts of reckless endangerment constituted the same offense and therefore the district court should have either instructed the jury on only one offense or merged the three counts and sentenced for one offense. Desjarlais is raising this issue for the first time on appeal.

[¶ 6] Issues not raised at trial generally will not be addressed on appeal unless the alleged error rises to the level of obvious error under N.D.R.Crim.P. 52(b). State v. Frohlich, 2007 ND 45, ¶ 31, 729 N.W.2d 148. As we have recently stated:

In determining whether there has been obvious error, we examine the entire record and the probable effect of the alleged error in light of all the evidence, and the burden is upon the defendant to show the alleged error was prejudicial. An alleged error does not constitute obvious error unless there is a clear deviation from an applicable legal rule under current law. The Court will notice obvious error only in exceptional circumstances when the defendant has suffered a serious injustice.

State v. Austin, 2007 ND 30, ¶ 19, 727 N.W.2d 790 (citations omitted).

[¶ 7] Desjarlais was convicted under N.D.C.C. § 12.1-17-03-of three counts of reckless endangerment under circumstances manifesting extreme indifference to the value of human life. The specific acts of reckless conduct he was found guilty of committing were: 1) driving the wrong way on a divided highway, causing another driver to pull over to avoid a head-on collision; 2) driving a vehicle into a police officer’s vehicle; and 3) driving a vehicle into the officer’s vehicle a second time, causing the vehicle to roll onto its side and injure the officer. These acts all occurred during the police pursuit in the early morning of October 7, 2006.

[¶ 8] Desjarlais argues the three counts of reckless endangerment were part of a continuous course of conduct and therefore they should have been merged into one count. In support of his argument, Desjarlais cites a Minnesota case, State v. Campean, 1999 WL 31165 (Minn. App.1999), in which the defendant was convicted of one count of fleeing police and one count of false imprisonment. She was sentenced to two consecutive one-year and one-day sentences for each conviction. Id. She argued the sentence for fleeing an officer should have been vacated because it arose from the same behavioral incident as the false imprisonment charge. Id. The court held the convictions arose out of the same behavioral incident and vacated the sentence imposed for the fleeing conviction. Id. In reaching its decision, the court stated:

The Johnson court devised a test for examining whether the charged violations arose from a single behavioral incident. State v. Johnson, 273 Minn. 394, 404, 141 N.W.2d 517, 524 (Minn.1966). This test requires the sentencing court to determine whether the two incidents occurred in “substantially the same time and place” and whether they arose out of a “continuous and uninterrupted course of conduct, manifesting an indivisible state of mind or coincident errors of judgment.” Id. at 405,141 N.W.2d at 524. Utilizing this test, the question of whether multiple offenses arose out of the same behavioral incident necessarily “depends on the facts and circumstances of the particular case.” State v. Bookwaiter, 541 N.W.2d 290, 294 (Minn.1995). Notably, the supreme court has declared that multiple sentences may not be used for two offenses if the defendant substantially contemporaneously committed the second offense in order to avoid apprehension for the first offense. State v. Hawkins, 511 N.W.2d 9, 13 (Minn.1994) (quoting State v. Gibson, 478 N.W.2d 496, 497 (Minn.1991)).

Id.

[¶ 9] The Minnesota decision, however, was based on a specific Minnesota statute, which provides:

Except as provided in subdivisions 2, 3, 4, and 5, and in sections 609.251, 609.585, 609.21, subdivision lb, 609.2691, 609.486, 609.494, and 609.856, if a person’s conduct constitutes more than one offense under the laws of this state, the person may be punished for only one of the offenses and a conviction or acquittal of any one of them is a bar to prosecution for any other of them. All the offenses, if prosecuted, shall be included in one prosecution which shall be stated in separate counts.

MinmStat. § 609.035 subd. 1 (2007). Des-jarlais concedes we have no similar statute in North Dakota.

[¶ 10] Neither Desjarlais nor the State has been able to call our attention to a North Dakota statute or caselaw clearly establishing the law on when multiple counts are or are not appropriate in cases such as this. There is no obvious error when a rule of law is not clearly established. State v. Weaver, 2002 ND 4, ¶ 17, 638 N.W.2d 30 (“An alleged error does not constitute obvious error unless there is a clear deviation from an applicable legal rule under current law.”). We conclude the district court did not commit obvious error affecting Desjarlais’s substantial rights.

Ill

[¶ 11] Desjarlais’s other argument regarding the sufficiency of the evidence is without merit, and the district court judgments are affirmed.

[¶ 12] GERALD W. VANDE WALLE, C.J., WILLIAM F. HODNY, S.J., DANIEL J. CROTHERS, and MARY MUEHLEN MARING, JJ., concur.

[¶ 13] The Honorable WILLIAM F. HODNY, Surrogate Judge, sitting in place of KAPSNER, J., disqualified.


author: CROTHERS, Justice.

text:
    2008 ND 12
    Earl R. VAN SICKLE and Harold R. Van Sickle, Plaintiffs and Appellants v. HALLMARK & ASSOCIATES, INC., Frank Celeste, William R. Austin, Phoenix Energy, Bobby Lankford and Earskine Williams, collectively known as “Interest Holders” NEWCO, and their successors in interest, Missouri Breaks, LLC, Defendants and Appellees.
    No. 20070154.
    Supreme Court of North Dakota.
    Jan. 22, 2008.

      Robert S. Rau (argued), Bosard, MeCut-cheon & Rau, Ltd., Minot, N.D., and Max D. Rosenberg (on brief), Fargo, N.D., for plaintiffs and appellants.
    Jon R. Brakke, Vogel Law Firm, Fargo, N.D., for defendants and appellees.
   CROTHERS, Justice.

[¶ 1] Earl and Harold Van Sickle appeal from a summary judgment dismissing their action against Hallmark & Assoc., Inc., Frank Celeste, William R. Austin, Phoenix Energy, Bobby Lankford, and Earskine Williams, collectively referred to as “Interest Holders”; NEWCO, and their successors in interest, Missouri Breaks, LLC, for breach of contract, conversion, and tortious interference. We conclude the district court made a legal error in concluding it did not have jurisdiction to decide whether the Van Sickles are entitled to payment for pre-confirmation royalties. We affirm the court’s dismissal of the conversion, tortious interference, and post-bankruptcy royalties claims, but reverse the court’s decision on the pre-con-firmation royalties claim, and remand for further proceedings consistent with this opinion.

I

[¶ 2] The Van Sickles each own a .0013125 percent royalty interest in oil and gas produced by the Missouri Breaks Unit No. 1 oil and gas well located in McKenzie County. The well is operated under the terms of four leases. Comanche Oil Company was the original lessee, but in September 1997, Comanche Oil’s interest was assigned to Athens/Alpha Gas Corporation. Athens/Alpha subsequently conveyed approximately a 50 percent interest in the well to the Interest Holders, and continued operating the well.

[¶3] In 2002, Athens/Alpha filed for Chapter 11 bankruptcy. A reorganization plan was confirmed by the bankruptcy court on May 5, 2005. The reorganization plan provided for the formation of Missouri Breaks, LLC, and Athens/Alpha’s working interest in the well was transferred to Missouri Breaks. After confirmation of the reorganization plan, Missouri Breaks began operating the well and was required to pay Athens/Alpha’s creditors using the revenue from its portion of the working interest under the terms of the reorganization plan. To be eligible to receive payments from Missouri Breaks under the terms of the reorganization plan, Athens/Alpha’s creditors had to file a claim in the bankruptcy proceeding, or the confirmed reorganization plan or a final order of the bankruptcy court had to specifically allow their claim. The Van Sickles did not receive notice of the bankruptcy proceeding by mail, were not listed as scheduled creditors, and did not file a claim.

[¶ 4] In October 2006, the Van Sickles sued the Interest Holders and Missouri Breaks for breach of contract, conversion, and intentional tortious interference, alleging the defendants did not pay royalties after they began operating the well in January 2005. The complaint was later amended to include claims against these same defendants for royalties on oil and gas produced before the reorganization plan was confirmed. Missouri Breaks started sending the Van Sickles royalty payments for oil and gas produced after it began operating the well.

[¶ 5] The defendants moved for summary judgment arguing they are not responsible for any pre-confirmation royalties, any claims for pre-confirmation royalties were discharged in the bankruptcy proceedings, and all post-bankruptcy royalties have been paid. The Van Sickles moved for partial summary judgment on the issue of liability for pre-confirmation royalties under the breach of contract, conversion, and tor-tious interference claims.

[¶ 6] After a hearing, the district court granted the defendants’ motion for summary judgment and denied the Van Sickles’ motion. The court ruled:

“It appears the Plaintiffs were owed money from Athens/Alpha. This money was for oil sold by Athens/Alpha from the well.
Athens/Alpha filed bankruptcy. The Plaintiffs never filed a claim in the Athens/Alpha bankruptcy.
A reorganization plan for Athens/Alpha was approved, and in that plan secured creditors of Athens/Alpha were to be paid in full.
The Plaintiffs claim to be secured creditors of Athens/Alpha. I find no case law or statute to support the Plaintiffs’ claim to be secured creditors. The Plaintiffs were unsecured creditors of Athens/Alpha, and any return they may get from that claim must be through the bankruptcy court.”

The court dismissed the Van Sickles’ pre-confirmation claims with prejudice. The court dismissed the Van Sickles’ post-bankruptcy claims against Missouri Breaks without prejudice, ruling that Missouri Breaks provided an accounting of the interest in the well and made royalty payments after it began operating the well and that the Van Sickles did not claim the accounting was in error.

[¶ 7] In an addendum to the order granting summary judgment, the district court concluded Missouri Breaks was the only proper defendant. The court said, “[wjhile not part of the motion in chief, in oral arguments the Defendants pointed out, correctly, that only Missouri Breaks LLC should have been a named Defendant, as all the other entities are separate, and no evidence has been forthcoming by the Plaintiffs as to why the LLC veil should be pierced.”

II

[¶ 8] “‘Summary judgment is a procedural device for promptly disposing of a lawsuit without a trial if there are no genuine issues of material fact or inferences which can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law.’ ” Good Bird v. Twin Buttes School Dist., 2007 ND 103, ¶ 5, 733 N.W.2d 601 (quoting Zuger v. State, 2004 ND 16, ¶ 7, 673 N.W.2d 615). The moving party has the burden of showing there are no genuine issues of material fact. Good Bird, at ¶ 5. “Whether a [district] court has properly granted summary judgment is a question of law which this Court reviews de novo on the entire record.” Id.

III

[¶ 9] The Van Sickles argue the district court improperly granted summary judgment dismissing their breach of contract claim because the bankruptcy reorganization plan is a contract, because they have allowed secured claims which entitle them to payment under the terms of the plan, and because the defendants have breached the contract by not paying the pre-confir-mation royalties. The defendants argue the Van Sickles are not entitled to payment under the reorganization plan because the plan only allows for payment of allowed claims, because the Van Sickles do not have allowed claims, because any claim the Van Sickles may have had to royalties for oil produced prior to confirmation of the reorganization plan was discharged in the bankruptcy proceedings and because any remedy must be sought from the bankruptcy court. The Van Sickles argue their claims could not be discharged because they did not receive- notice of the bankruptcy proceedings.

A

[¶ 10] A confirmed reorganization plan is essentially a binding contract between the debtor and its creditors, and creditors may bring a state law breach of contract action in state court to enforce plan obligations. See Paul v. Monts, 906 F.2d 1468, 1471-76 (10th Cir.1990); Murdock v. Holquin, 328 B.R. 275, 282-83 (N.D.Cal.2005); In re Nylon Net Co., 225 B.R. 404, 406 (Bankr.W.D.Tenn.1998).

[¶ 11] There are three elements of a prima facie case of breach of contract: “(1) the existence of a contract, (2) breach of the contract, and (3) damages which flow from the breach.” Good Bird, 2007 ND 103, ¶ 9, 733 N.W.2d 601. “Breach of contract occurs when there is nonperformance of a contractual duty when it is due.” Id. The party claiming there is a breach has the burden of proof. Id.

[¶ 12] The reorganization plan in Athens/Alpha’s bankruptcy case provides holders of “Allowed Secured Claims” are entitled to payment:

“Class 2 is composed of the holders of Allowed Secured Claims. The holders of claims in this class will be paid in full on the Effective Date and shall also receive interest on any such claim, and any reasonable fees, costs or charges provided for under the agreement under which such claim arose up to the value of the collateral securing such claim. The claims in this class shall be deemed unimpaired under the Plan.”

An “Allowed Secured Claim” is defined as:

“an Allowed Claim, arising on or before the Petition Date that is secured by a valid Lien, as hereinafter defined, on property of the Debtor which is not void or voidable under any state or federal law, including any provision of the Code. That portion of such Allowed Claim exceeding the value of security held therefor shall be an Allowed Unsecured Claim as hereinafter defined.”

A “Lien” is defined in the plan as “any charge against or interest in property to secure payment of a debt or performance of an obligation and includes, without limitation, any judicial lien, security interest, mortgage, deed of trust and statutory lien as defined in § 101 of the Code.”

[¶ 13] The Van Sickles contend they have secured claims because payment of their royalties is protected by a statutory lien under N.D.C.C. § 47-16-39.1. Section 47-16-39.1, N.D.C.C., states “the obligation ... to pay oil or gas royalties to the mineral owner or the mineral owner’s as-signee ... is of the essence in the lease contract, and breach of the obligation may constitute grounds for cancellation of the [oil and gas] lease.” The Van Sickles claim N.D.C.C. § 47-16-39.1 creates a statutory lien because it provides that a royalty owner could potentially cancel the oil and gas lease if the obligation to pay royalties is breached. The district court concluded the Van Sickles do not have secured claims.

[¶ 14] While the Van Sickles claim the district court was incorrect and ask this Court to find they have secured claims, we do not address issues not affecting the outcome of a case. See J.P. v. Stark County Soc. Servs. Bd., 2007 ND 140, ¶ 17, 737 N.W.2d 627. Whether the Van Sickles have secured claims or not, they do not have allowed claims as defined by the reorganization plan. An “Allowed Claim” is:

“(i) a Claim that has been allowed by this Plan or a Final Order of the Bankruptcy Court or (ii) a Claim timely filed with the Clerk of Court scheduled as liquidated, undisputed and non-contingent by the Debtor in the schedules, lists and statement of financial affairs and executory contracts heretofore filed with the Bankruptcy Court as they may be amended or supplemented (collectively the “schedules”), as to which Claim no objection to the allowance thereof has been interposed within the period of time fixed by the Code or by a final order of the Bankruptcy Court, or as to which Claim either an objection to the Claim or an application to amend the schedules with respect to a scheduled Claim has resulted in the allowance of a Claim, in whole or in part, by a final order of the Bankruptcy Court.”

The Van Sickles did not file a claim with the bankruptcy court, and neither the plan nor final order of the bankruptcy court includes their claim. We conclude the Van Sickles are not entitled to payment under the terms of the confirmed reorganization plan, and therefore the defendants did not breach the contract by failing to pay the Van Sickles’ claims.

B

[¶ 15] The Van Sickles also claim the reorganization plan does not apply to them and their claims were not discharged because they did not have notice of the bankruptcy proceedings. While the Van Sickles’ arguments are contradictory and we have concluded the Van Sickles are not entitled to payment under the terms of the reorganization plan, the Van Sickles may still have a valid claim for pre-confirmation royalties because their debts may not have been discharged in the bankruptcy proceedings.

[¶ 16] In a judicial proceeding affecting property rights, due process requires that an interested party have notice of the proceeding to allow the party to present his objections. See Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 313-15, 70 S.Ct. 652, 94 L.Ed. 865 (1950). A debt cannot be discharged in bankruptcy unless the creditor had sufficient notice of the bankruptcy proceedings. Jones v. Chemetron Corp., 212 F.3d 199, 209 (3rd Cir.2000). Under 11 U.S.C. § 523(a), certain debts, including debts not listed or scheduled, are not discharged in bankruptcy proceedings:

“(a) A discharge under section ... 1141 ... of this title does not discharge an individual debtor from any debt—
(3) neither listed nor scheduled under section 521(1) of this title, with the name, if known to the debtor, of the creditor to whom such debt is owed, in time to permit—
(A) if such debt is not of a kind specified in paragraph (2) [actions relating to debts incurred by fraud or misrepresentation], (4) [actions relating to fiduciary misconduct, embezzlement, or larceny], or (6) [actions relating to willful and malicious injury,] of this subsection, timely filing of a proof of claim, unless such creditor had notice or actual knowledge of the case in time for such timely filing....”

The outcome of a bankruptcy reorganization, including the discharge of existing debts, is not binding on a creditor who did not have notice of the bankruptcy proceedings. Bosiger v. U.S. Airways, 510 F.3d 442, 451 (2007). A creditor is not collaterally attacking a bankruptcy order when he claims he did not receive notice of the bankruptcy proceedings and therefore his debt was not discharged; rather, he is attempting to show his claim was not discharged and bring himself within the provisions of 11 U.S.C. § 523. McGhan v. Rutz, 288 F.3d 1172, 1181 (9th Cir.2002); Willows Convalescent Ctrs., Inc. v. Durheim, 434 N.W.2d 677, 679 (Minn.Ct.App.1989).

[¶ 17] While the Van Sickles did not specifically argue 11 U.S.C. § 523 applies, they did argue their debts were not discharged because they did not receive notice of the bankruptcy proceedings. The defendants concede the Van Sickles were not listed as scheduled creditors. The district court did not make any findings about notice, nor could the court validly do so in a summary judgment proceeding. “Notice is a question of fact,” which is generally inappropriate for summary judgment. See Dvorak v. Dvorak, 2007 ND 79, ¶ 14, 732 N.W.2d 698. We conclude there is a factual issue whether the Van Sickles had notice of the bankruptcy proceedings, and if they did not receive notice, they must be allowed to adjudicate their contract claim against a party obligated to pay the pre-confirmation royalties.

[¶ 18] The district court incorrectly concluded any return the' Van Sickles may have on their pre-confirmation claims must be through the bankruptcy court. The bankruptcy court has “original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.” 28 U.S.C. § 1334(b) (2007). When a court adjudicates whether a creditor’s claim has been discharged by deciding whether the creditor had notice or actual knowledge of the bankruptcy proceeding, under 11 U.S.C. § 523(a)(3), it is a proceeding related to the bankruptcy case, and therefore state and federal courts have concurrent jurisdiction to decide the issue. See, e.g., McGhan, 288 F.3d at 1181; Fidelity Nat’l Title Ins. Co. v. Franklin, 179 B.R. 913, 919-25 (Bankr.E.D.Cal.1995); In re Guzman, 130 B.R. 489, 491 (Bankr.W.D.Tex.1991); Willows Convalescent Ctrs., Inc., 434 N.W.2d at 678-79; Corsale v. Pantry Pride Supermarket, Inc., 197 A.D.2d 659, 661, 602 N.Y.S.2d 887 (N.Y.App.Div.1993). We conclude that, while relief might also be sought in the bankruptcy court, the district court has jurisdiction to decide whether the Van Sickles’ pre-confirmation claims were discharged in Athens/Alpha’s bankruptcy proceedings.

C

[¶ 19] Although the Van Sickles are not entitled to payment of pre-confirmation royalties under terms of the reorganization plan, a genuine issue of material fact exists whether the Van Sickles had notice of the bankruptcy proceedings and whether their debts were discharged. The district court has jurisdiction to resolve this dispute and if the Van Sickles did not have notice, to adjudicate the claims surrounding the undischarged debt. We conclude the district court made a legal error and improperly granted summary judgment. We reverse and remand for proceedings to determine whether the Van Sickles had notice of the bankruptcy proceedings, whether their claims were discharged, and related proceedings, if any.

IV

[¶ 20] The Van Sickles also sued for unpaid pre-confirmation royalties based on claims of conversion and tortious interference. The district court granted summary judgment dismissing these claims without explanation. The Van Sickles argue the court improperly granted summary judgment and dismissed these claims.

A

[¶ 21] Conversion is a “tor-tious detention or destruction of personal property, or a wrongful exercise of dominion or control over the property inconsistent with or in defiance of the rights of the owner.” Ritter, Laber and Assocs., Inc. v. Koch Oil, Inc., 2004 ND 117, ¶ 11, 680 N.W.2d 634. The key element of a claim for conversion is that the plaintiff was wrongfully deprived of his property, and there must be “an intent to exercise control or interfere with the use of property to such a degree as to require a forced sale of the plaintiffs interest in the goods to the defendant.” Id.

[¶ 22] Claims for conversion and breach of contract may arise under the same facts. Koch Oil, Inc., 2004 ND 117, ¶ 12, 680 N.W.2d 634. However, whether conduct that constitutes a breach of contract may also be conversion requires a court to look at the origin of the duty owed and the nature of the injury. We have said:

“ ‘Tort obligations are in general obligations that are imposed by law — apart from and independent of promises made and therefore apart from the manifested intention of the parties — to avoid injury to others.’ If the defendant’s conduct— such as negligently burning down a house — would give rise to liability independent of the fact that a contract exists between the parties, the plaintiffs claim may also sound in tort. Conversely, if the defendant’s conduct — such as failing to publish an advertisement — would give rise to liability only because it breaches the parties’ agreement, the plaintiffs claim ordinarily sounds only in contract.”

Id. at ¶ 19 (quoting National Union Fire Ins. Co. v. Care Flight Air Ambulance Serv., Inc., 18 F.3d 323, 326 (5th Cir.1994) (citation omitted)).

[¶ 23] The Van Sickles argue the defendants exercised dominion and control over the oil proceeds, the defendants have an obligation under the lease and the reorganization plan to pay the royalties, and the defendants breached that obligation depriving the Van Sickles of their property rights. The Van Sickles’ claim for unpaid oil and gas royalties is a claim for breach of contract and does not give rise to tort liability under the facts of this case. The district court properly dismissed the Van Sickles’ conversion claim.

B

[¶ 24] To establish a prima facie case of intentional interference with a contract, the plaintiff must prove “(1) a contract existed, (2) the contract was breached, (3) the defendant instigated the breach, and (4) the defendant instigated the breach without justification.” Hilton v. North Dakota Educ. Ass’n, 2002 ND 209, ¶ 24, 655 N.W.2d 60. “Wrongful interference with contractual rights, whether such interference induces or prevents a third person to refrain from forming a contract, or induces such person to break an existing contract, will render the person whose wrongful conduct is responsible for these results liable in damages to the party injured.” Trade ‘N Post, L.L.C. v. World Duty Free Americas, Inc., 2001 ND 116, ¶ 33, 628 N.W.2d 707.

[¶ 25] The Van Sickles claim the defendants tortiously interfered with a contract because they failed to pay the Van Sickles as the lease and reorganization plan require. This is a breach of contract claim. Tortious interference requires a person who is not a party to the contract to interfere with the contract. See Koehler v. County of Grand Forks, 2003 ND 44, ¶25, 658 N.W.2d 741. The Van Sickles contend they have a contract with the defendants, the defendants breached the contract, and the defendants’ breach interfered with the contract. The Van Sickles have failed to establish a pri-ma facie case of tortious interference, and therefore, the Van Sickles’ tortious interference claim was properly dismissed.

V

[¶ 26] The Van Sickles also sued for unpaid royalties they claimed they did not receive for oil and gas produced after Missouri Breaks began post-bankruptcy operation of the well. The defendants provided the Van Sickles with an accounting of the interest in the well for post-bankruptcy production, and the Van Sickles did not claim the accounting was in error. The district court granted summary judgment and dismissed the Van Sickles’ claims for post-bankruptcy royalties without prejudice. The Van Sickles do not challenge the court’s decision on appeal. We affirm the court’s decision to grant summary judgment and dismiss the Van Sickles’ claims for post-bankruptcy royalties.

VI

[¶ 27] The Van Sickles claim the district court erred in concluding only Missouri Breaks was the only party that should have been a named defendant. The Van Sickles contend the Interest Holders are proper defendants because they are working interest holders and they assumed all of Athens/Alpha’s obligations under the reorganization plan and the original lease as Athens/Alpha’s successor and assignee.

[¶ 28] However, the district court did not dismiss the action against the Interest Holders because they are not proper defendants. Any opinion we may give on this issue would be advisory only, and we do not issue advisory opinions. See In re Guardianship of Shatzka, 2003 ND 147, ¶ 8, 669 N.W.2d 95.

VII

[¶ 29] We conclude the district court committed legal error by concluding it did not have jurisdiction to decide whether the Van Sickles are entitled to payment for pre-bankruptcy royalties. We reverse and remand the court’s decision on the pre-bankruptcy royalties and affirm the dismissal of the conversion, tortious interference, and post-bankruptcy claims.

[¶ 30] GERALD W. VANDE WALLE, C.J., LAWRENCE A. LECLERC, S.J., MARY MUEHLEN MARING, and DALE V. SANDSTROM, JJ., concur.

[¶ 31] The Honorable LAWRENCE A. LECLERC, S.J., sitting in place of KAPSNER, J., disqualified.