author: SABERS, Acting Chief Justice.

text:
    2001 SD 123
    ESTATE OF Leslie Mary MARTIN, Deceased.
    No. 21760.
    Supreme Court of South Dakota.
    Considered on Briefs Aug. 28, 2001.
    Decided Oct. 10, 2001.

      Thomas P. Tonner of Tonner, Tobin and King, Aberdeen, for appellants Melody Pulían and Susan Maestas.
    Kennith L. Gosch of Bantz, Gosch, Cremer, Peterson & Sommers, Aberdeen, for appellee Ann Sheridan.
   SABERS, Acting Chief Justice.

[¶ 1.] Prior to taking a trip to Rapid City, Leslie Martin, the decedent, hand-wrote a will leaving all of her property to her daughter, Ann Sheridan. The will left nothing to Martin’s other two daughters,' Susan Maestas and Melodee Pulían. Upon discovery of the holographic will, Ann filed a petition for Formal Probate of Will. Susan and Melodee filed an objection to Probate of Will. The trial court determined that Martin had created a valid and absolute holographic will and admitted the will to probate. Susan and Melodee appeal. We affirm.

FACTS

[¶ 2.] The decedent, Leslie Martin, died on March 17, 2000. She was survived by three daughters, Ann Sheridan, Susan Maestas, and Melodee Pulían. In a writing purporting to be a holographic will, Leslie left all of her property to Ann. She made no provision for Susan or Melodee.

[¶ 3.] Leslie had a very strained relationship with both Melodee and Susan. The rift between Leslie and Melodee resulted from events that occurred during Leslie’s divorce from her husband Bert in April 1997. During the divorce proceedings, Melodee testified for her father. Leslie believed Melodee had sided with Bert and against Leslie. After the divorce, Leslie had little or no contact with Melodee.

[¶ 4.] Leslie and Susan had a tenuous relationship for many years. While Leslie, Ann and Ann’s children were visiting Susan’s family, Susan’s husband disciplined one of Ann’s children. Leslie believed Susan’s husband had physically injured the child and sided with the child. Susan sided with her husband. After the incident, Susan refused any contact with Leslie and would not allow her children to see Leslie or receive gifts or cards from her.

[¶ 5.] Leslie and Ann had a very close relationship. Following her separation from Bert, Leslie spent a great deal of time with Ann and her family. Leslie regularly spent time with Ann’s two children. When Leslie was diagnosed with bowel cancer in late 1999, Ann and her husband helped care for Leslie. Ann also assumed Leslie’s office cleaning responsibilities and used the money received to help pay Leslie’s expenses.

[¶ 6.] On August 22, 1998, prior to a trip to Rapid City, Leslie told her friend Marilyn Thorson that she wanted to leave all of her property to her daughter Ann and Ann’s family. Leslie told Marilyn that she had not contacted a lawyer about drafting a will and wondered if she could just write something out. Marilyn thought Leslie could make an effective will if she wrote out what she wanted done with her property and signed and dated the writing. The will read as follows:

Dated this day,
August 22,1998
If anything should happen to me on this trip to Rapid City. Everything I own is to go to Ann, Sheldon, and McKensey and Bradley Sheridan. Ineulding [sic] rest of money from Bert and the land.
Leslie Mary Martin
405 S. Lincoln St
Groton, So. Dak
57445

Leslie then placed the will in a blue notebook and explained to Marilyn that she had done this “so if something should happen that Ann could find it.” Prior to her death, Leslie had also explained to Ann that anything she “would ever need if something would happen to her would be in this little blue book that she kept in her file cabinet.” Leslie made no other wills.

[¶ 7.] Following Leslie’s death, Ann and Marilyn discovered the holographic will in the blue notebook in Leslie’s file cabinet. On March 30, 2000, Ann filed a Petition for Formal Probate of the holographic will. Melodee and Susan objected to probate of the will, not on the grounds that it was not written by Leslie, but because it was conditional. A hearing was scheduled for July 13, 2000.

[¶ 8.] The trial court determined that the language of Leslie’s will was absolute and not conditional. The court declared that the reference to the Rapid City trip was a motive or reason for drafting the will rather than a contingency upon which the will was based.

[¶ 9.] The trial court supported its determination with extrinsic evidence, including Leslie’s personal diary, Leslie’s comments to hospital staff, and other witness testimony. The diary represented Leslie’s testimony that she wanted all of her property to go to Ann and her family and nothing to Melodee and Susan. The diary further indicated that Leslie believed Mel-odee and Susan wanted no relationship with her and that Ann and her family were her closest friends.

[¶ 10.] The trial court further noted that, while Leslie lay dying in the hospital, she instructed the hospital staff that Melo-dee and Susan not be allowed to talk to her in the hospital. The trial court concluded that Leslie’s conduct immediately preceding her death was consistent with her intention to leave all of her property to Ann and her family.

[¶ 11.] Other testimony offered at trial corroborated the information contained in Leslie’s diaries. Marilyn Thorson testified that before writing the will Leslie told her that she wanted Ann’s children to have her land and, “Ann gets everything else and those other girls are not to get a dime.” Leslie explained to Marilyn that Ann was to get everything because Bert “will never give her a dime and this will be Ann’s share of her money.”

[¶ 12.] Leslie also told several friends that she wanted all of her property to go to Ann and her family. Karen Wolter testified that Leslie had said “I have everything taken care of and everything is to be left to Ann and her family.” Shirley Pulían testified that Leslie told her “I am going to leave everything to Ann and Sheldon and the grandkids and I’m going to cut the other two out because they never had anything to do with me.” Shirley also testified that Leslie had again expressed a desire to leave everything to Ann and her family and nothing to Melodee and Susan in the days immediately preceding Leslie’s death. Susan Quiggle testified that Leslie told her that Susan and Melodee were getting one dollar and “Ann is getting the rest of it.”

[¶ 13.] Based on the language of the will and other testimony, the trial court concluded that: (1) Leslie intended the August 22, 1998 writing to be her will; (2) the will was executed with testamentary intent; and (3) the will was testamentary in character and not the product of undue influence. See Estate of Dokken, 2000 SD 9, ¶ 13, ¶ 27, 604 N.W.2d 487, 491, 495 (explaining requirements for establishing testamentary capacity and existence of undue influence). The trial court declared the will to be absolute and admitted it to probate. Melodee and Susan appeal the trial court’s determination that the will was absolute and not conditional.

STANDARD OF REVIEW

[¶ 14.] This Court reviews a trial court’s findings of fact under the clearly erroneous standard. In Re Estate of letter, 1999 SD 33, ¶ 11, 590 N.W.2d 254, 257.

Under the clearly erroneous standard, the question for this Court is not whether we would have made the same findings that the trial court did, but, whether on the entire evidence, we are left with a definite and firm conviction that a mistake has been committed. That this Court may have found the facts differently had we heard the testimony is no warrant for us to substitute our judgment for the trial court’s carefully considered findings.

Estate of Long, 1998 SD 15, ¶ 9, 575 N.W.2d 254, 256.

[¶ 15.] “Questions of law are reviewed de novo.” Estate of O’Keefe, 1998 SD 92, ¶ 7, 583 N.W.2d 138, 139.

[¶ 16.] WHETHER THE TRIAL COURT ERRED IN DETERMINING THAT LESLIE MARTIN’S HOLOGRAPHIC WILL WAS ABSOLUTE AND NOT CONDITIONAL.

[¶ 17.] Melodee and Susan assert that Leslie’s will was conditional rather than absolute and should not be admitted to probate.

[¶ 18.] In determining whether a will is conditional or absolute the primary inquiry revolves around the testator’s intent. Estate of Taylor, 119 Cal.App.2d 574, 259 P.2d 1014 (1953).

Did the testator intend, by the language used, to make the happening of the possibility referred to a condition precedent to the operation of the will, in which case the instrument is not entitled to probate if the condition is not fulfilled; or did he state the possibility of the happening merely as the motive or reason which led to the making of the instrument and which was carelessly stated in language suggestive of a condition, in which case the will becomes operative on the testator’s death even if the event, the possibility of which appears to have induced the will, has not taken place?

Id.

[¶ 19.] The general rule of will construction favors a finding of testacy over intestacy. 79 AmJur 2d Wills § 745 (1975). Accordingly, when possible, courts should interpret any questionable language as the testator’s motivation in writing the will rather than an expression of condition. Id. See also National Bank of Commerce v. Wehrle, 124 W.Va. 268, 20 S.E.2d 112 (1942); Eaton v. Brown, 193 U.S. 411, 24 S.Ct. 487, 48 L.Ed. 730 (1904). “The courts have inclined toward a construction which will give testamentary effect to the will, and it has been said that a will is to be construed as absolute and not conditional unless the intention to the contrary clearly appears either expressly or by necessary implication from a reading of the language of the will as a whole.” 1 A.L.R.3d 1048 (1965-1999 Supp.).

[¶ 20.] With respect to the testator’s intent, this Court looks first to the language of the will and then to the circumstances surrounding the will’s execution.

Our goal in interpreting a will is to discern the testator’s intent. If the intent is eleaf from the language used, that intent controls. However, “[I]f ... doubt remains as to decedent’s intent, the language used and the circumstances surrounding the execution of the writing will again be examined in light of pertinent rules of construction.”

Estate of Klauzer, 2000 SD 7, ¶ 9, 604 N.W.2d 474, 477 (citing In re Estate of Nelson, 250 N.W.2d 286, 288 (S.D.1977)).

[¶ 21.] An examination of the language of Leslie’s will yields the conclusion that the will was absolute. The language of the will should be construed as absolute and not conditional because the intention to the contrary is neither express nor necessarily implied from a reading of the language of the will as a whole. The trial court properly concluded that the reference to her Rapid City trip was not a condition but “an expression of Leslie’s recognition that she could die.” The trip represented the motivation behind the drafting of the will. This motivating factor is set apart from the remainder of the will and does not render ineffective Leslie’s desire that all of her property go to Ann and her family.

[¶ 22.] An examination of the circumstances surrounding the execution of the will also supports the determination that the will was absolute. Leslie’s conduct and comments to several disinterested individuals, before and after she made the will, and in the days immediately preceding her death, demonstrate that Leslie intended her writing to be an effective disposition of her property. While she recognized she needed to see an attorney to draft a formal will, Leslie clearly intended that her property be given to Ann and her family.

[¶ 23.] The evidence at trial indicated Leslie had a good relationship with Ann and had good reason to leave her property to Ann and her family. Additional evidence illustrated that Leslie was estranged from Susan and Melodee and had reasons for excluding them from her will. The evidence is entirely consistent with Leslie’s desire to leave all of her property to Ann and her family.

[¶ 24.] Melodee and Susan have failed to demonstrate that any of the trial court’s findings are clearly erroneous and we affirm.

[¶ 25.] AMUNDSON, KONENKAMP, and GILBERTSON, Justices, concur.

[¶ 25.] MILLER, Retired Chief Justice, having been a member of the Court at the time this action was submitted to the Court, did not participate.


source: Caselaw Access Project

author: NEUMAN, Justice.

license: Public Domain

text:
    STATE of Iowa, Appellee, v. Milton Wayne OWENS, Appellant.
    No. 00-1030.
    Supreme Court of Iowa.
    Oct. 10, 2001.

      Linda Del Gallo, State Appellate Defender, and Shellie L. Knipfer, Assistant State Appellate Defender, for appellant.
    Thomas J. Miller, Attorney General, Kevin Cmelik, Assistant Attorney General, William E. Davis, County Attorney, and Jerald Feuerbach, Assistant County Attorney, for appellee.

       Senior Judge assigned by order pursuant to Iowa Code section 602.9206 (2001).

   NEUMAN, Justice.

The State charged Milton Owens with being a felon in possession of a firearm, in violation of Iowa Code section 724.26 (1999), as well as a number of drug-related crimes, after Davenport police executed a search warrant at an apartment he occupied. A jury found Owens guilty as charged. Owens now claims he was denied effective legal assistance because trial counsel failed to (1) move to sever trial of the firearm charge from the drug offenses or, (2) timely request that the jury only be asked to answer an interrogatory about the firearm possession, without advising it about his felony status. The State cross-appeals, citing the court’s failure to properly apply sentence-enhancement provisions pertaining to Owens’ habitual offender status and prior drug-related convictions. We affirm the convictions but remand for resentencing.

I. Background Facts and Legal Proceedings.

Davenport police attempted to execute a search warrant at an apartment leased by Sherrie Shelby. When no one answered, the officers broke open the door with a three-foot steel ram. They immediately saw the defendant, Milton Owens, who ran from the kitchen down a hall to a bedroom, yelling, “Police department! Search warrant!”

Two officers who chased Owens to the bedroom found him crouched on the bed, leaning over the far side with his hands on it. Officers found a .22 caliber pistol under the corner of the mattress next to Owens. They also discovered marijuana in the bedroom’s closet floor and shelf, along with men’s clothing.

Further search of the apartment revealed baggies of marijuana in another bedroom, a partial blunt cigar containing marijuana, and a key chain with two keys, one of which fit the vehicle officers observed Owens drive to the apartment, and the other which fit the apartment’s lock. The officers also found an electronic scale, two pagers and a cell phone. There were eighty rounds of .22 caliber ammunition in a hallway closet and a substantial quantity of crack cocaine underneath cookware in the kitchen. Plastic baggies with the corners removed were found in the garbage. Officers testified the corners are used to wrap rocks of cocaine in preparation for sale.

The State charged Owens with possession with intent to deliver cocaine base while in the immediate possession of a firearm, in violation of Iowa Code section 124.401(l)(c) and (e) (Supp.1999); failure to affix a drug tax stamp, in violation of Iowa Code section 453B.12; and being a felon in possession of a firearm, a violation of Iowa Code section 724.26. The trial information also alleged that Owens had previously been convicted of an offense relating to cocaine and had twice been convicted of a felony, making him an habitual offender. See Iowa Code §§ 124.411 (authorizing treble punishment for seeond- or-subsequent drug offenders); 902.8 (habitual offender sentencing).

At trial, the prosecutor told the jury that “the defense and the State stipulate that the defendant has previously been convicted of a felony.” Owens’ counsel readily acknowledged that, by so stipulating, prejudicial details about Owens’ prior criminal history would be kept from the jury. But defense counsel objected to the court’s inclusion of the stipulation in its statement of the case to the jury, contending the stipulation was merely evidence, not fact, and could be accepted or rejected by the jury. The court overruled Owens’ objection to the instruction.

The jury found Owens guilty as charged. Owens then stipulated on the record that the State could not only prove his conviction of two prior felonies but that one of those felonies was drug-related.

, In Owens’ subsequent motions for new trial and in arrest of judgment, he reiterated his claim that the court should not have referred to the felony stipulation in its statement of the case. He also argued, for the first time, that the court should have used an entirely different method of instructing the jury on the felon-in-possession charge. Owens claimed the jury simply should have been asked to answer an interrogatory concerning his firearm possession; then, based on the parties’ stipulation, the court could have entered a guilty verdict on the charge. That way, Owens argued, he would have avoided the prejudice associated with the jury’s knowledge of his felony status. The court, concluding the jury was required to find Owens guilty beyond a reasonable doubt on each of the essential elements of the crimes charged, overruled Owens’ motions.

For the crime of possession with intent to deliver while in control of a firearm, as an habitual offender, the court sentenced Owens to a term of imprisonment not to exceed twenty-five years. Violation of the drug stamp tax act, as an habitual violator, brought a fifteen-year term. The court also imposed a fifteen-year sentence for the felon in possession of a firearm charge. The sentences were ordered to run concurrently.

Owens appeals and the State cross-appeals.

II. Issues on Appeal/Scope of Review.

Owens seeks reversal on alternate grounds, each of which rests on alleged ineffectiveness of trial counsel: (1) that counsel should have moved to sever trial on the felon-in-possession charge from trial on the drug charges, or (2) in keeping with State v. Smith, 576 N.W.2d 634, 637 (Iowa Ct.App.1998), counsel should have urged the court to simply submit an interrogatory to the jury concerning Owens’ alleged firearm possession, without mentioning his felony status. Because Owens’ claims implicate his constitutional right to counsel, our review is de novo. State v. Westeen, 591 N.W.2d 203, 207 (Iowa 1999).

On its cross-appeal, the State claims the court erred in failing to apply the habitual offender enhancement of Iowa Code section 902.9(2) prior to enhancing Owens’ sentence for possession while in control of a firearm under section 124.401(e). It also contends the court erred in concluding the trebling provisions of section 124.411 did not apply to Owens’ sentence. We review these claims for the correction of errors at law. State v. Beach, 630 N.W.2d 598, 600 (Iowa 2001).

III. Analysis.

A. Alleged ineffectiveness of counsel. To prevail on a claim of ineffectiveness of counsel, Owens must show by a preponderance of the evidence that counsel failed to perform an essential duty and that prejudice resulted. State v. Hopkins, 576 N.W.2d 374, 378 (Iowa 1998). Failure to perform an essential duty may be established by proof that counsel’s failure to raise an issue fell outside the normal range of lawyer competency. Westeen, 591 N.W.2d at 207. Ineffectiveness may not be premised, however, on failure to raise an issue having no merit. Id. We turn, then, to the merits of Owens’ claims.

1. Severance of felon-in-possession charge. Iowa Rule of Criminal Procedure 6(1) provides that multiple offenses

which arise from the same transaction or occurrence ... when alleged and prosecuted contemporaneously, shall be alleged and prosecuted as separate counts in a single complaint, information or indictment, unless, for good cause shown, the trial court in its discretion determines otherwise.

A decision under the rule is subject to reversal only upon proof of abuse of trial court discretion. State v. Geier, 484 N.W.2d 167, 172 (Iowa 1992); State v. Bair, 362 N.W.2d 509, 512 (Iowa 1985).

The parties do not dispute the fact that the charges of possession with intent to deliver, failure to affix a drug tax stamp and felon in possession of a firearm all arose from the same incident. The question is whether, had the motion to sever been made by trial counsel, the court would have exercised its discretion to sever the felon-in-possession charge from the others. We, of course, cannot speculate about what the court might have done had the motion been made. But our prior cases teach that the goal of rule 6(1) is to achieve “judicial economy through the join-der of related offenses.” State v. Lam, 391 N.W.2d 245, 249 (Iowa 1986). Assuming a proper motion had been made, the burden would have rested upon Owens to prove that any prejudice resulting to him from a joint trial outweighed the State’s interest in judicial economy. Id. at 251. So the question before us is this: Would it have been an abuse of trial court discretion not to find good cause to sever in these circumstances? For the reasons that follow, we think not.

Owens contends that, by its very nature, a felon-in-possession charge puts the jury on notice of a defendant’s status as a felon, thereby injecting unfairness into its deliberations. Indeed, this appears to be the conclusion reached in the case upon which Owens relies for reversal, State v. Smith. There, under similar facts, the court observed that “[t]he prejudice discretionary severance seeks to prevent includes that which inherently attends evidence of a defendant’s other crimes.” Smith, 576 N.W.2d at 637. Owens asks this court to draw from this observation a per se rule compelling severance whenever the State charges a felon with being in possession of weapons alorig with other related charges. But such a rule will not be found in Smith. The court’s decision ultimately rested on its conclusion that good cause supporting a consolidation order may be overcome by “showing the jury is unable to compartmentalize the evidence offered to prove each consolidated charge.” Id. Because the court of appeals believed the trial court’s efforts in that regard failed, it remanded for a new trial. Id.

In any multi-charge trial, the court faces the challenge of striking a proper balance between the “antipodal themes of ensuring [a] defendant a fair trial and preserving judicial efficiency.” Id. at 636 (quoting State v. Geier, 484 N.W.2d 167, 173 (Iowa 1992)). We believe the trial court met that challenge in Owens’ case. The evidence concerning Owens’ status as a felon was imparted in a one-sentence stipulation read by the prosecutor at the close of the State’s case. The specific felony was not identified, nor were facts concerning the crime detailed for the jury. Moreover, the court gave a specific limiting instruction telling the jury it could only consider the stipulation in relation to the felon-in-possession charge. When the State charges crimes separately and the court gives a limiting instruction, we presume the jury follows the instruction, thereby minimizing any possible prejudice. See State v. Oetken, 613 N.W.2d 679, 689 (Iowa 2000); State v. Brown, 397 N.W.2d 689, 697 (Iowa 1986).

Additionally, the State’s usual interest in judicial economy was increased here by the fact that Owens’ drug-possession charge also involved proof that he was in immediate possession or control of a firearm. Had the trials been severed, the State would have been required to reintroduce, for a second jury, identical evidence regarding Owens’ control of the .22 caliber revolver on the night in question. While such duplication of effort must be expended in a case where the potential for prejudice is great, we are not convinced that potential has been shown here.

In conclusion, when we balance possible prejudice to Owens’ right to a fair trial with the State’s interest in judicial efficiency, we cannot say Owens has met the showing necessary to require severance. Accordingly, his trial counsel did not breach an essential duty by failing to raise the issue. No ground for reversal appears.

2. Special interrogatory. Owens also contends his trial counsel should have timely asked the court to submit an interrogatory concerning his firearm possession in place of the uniform marshalling instruction and verdict form on the felon-in-possession charge. He claims the instructions, as given, required the jury to find he was a felon, a matter to which he had already stipulated. This, he claims, unfairly prejudiced him. He insists the jury only needed to determine whether, during the incident in question, he was in the immediate possession or control of a firearm.

Owens again relies on the court of appeals’ decision in Smith for his argument. There, without citation of authority, the court suggested that a defendant’s stipulation to a prior felony “eliminat[es] the need for the State to prove this essential element of the offense of a felon in possession of a firearm.” Smith, 576 N.W.2d at 637. The court went on to suggest that “remaining elements of this offense len[d] themselves to discreet and efficient resolution by the use of special interrogatories or a supplemental trial information.” Id. Postponing for a moment the question of whether the court of appeals was correct in these conclusions, we note that Owens’ post-trial motion, renewed on appeal, is diametrically opposed to his position at trial. At trial Owens’ counsel insisted his stipulation was merely “evidence,” not “fact.” He objected to the court’s inclusion of the stipulation in its statement of the case, yet insisted the State was required to prove both his status as a felon and his firearm possession beyond a reasonable doubt under the uniform marshall-ing instruction.

We need not try to reconcile Owens’ inconsistent courses because, in any event, counsel was not ineffective for failing to seek a separate interrogatory regarding gun possession. When a prior conviction forms an essential element of the current charge, rather than merely furnishing the basis for an enhanced sentence, the jury must determine guilt on that element beyond a reasonable doubt; answering an interrogatory will not suffice. State v. Cook, 565 N.W.2d 611, 614-15 (Iowa 1997). Even if the defendant stipulates to guilt on an element of an offense, the court must still instruct the jury as to the stipulation. State v. Walton, 311 N.W.2d 110, 113 (Iowa 1981). It is from this stipulation that the jury determines a defendant’s guilt beyond a reasonable doubt. To the extent Smith holds contrary to these decisions, we hereby overrule it.

Because Owens was not entitled to avoid a marshalling instruction, and verdict form, on the question of his guilt for the crime of felon in possession of a firearm under Iowa Code section 724.26, his counsel was not ineffective for failing to object to the uniform instructions given.

B. Sentencing issues. On cross-appeal, the State alleges two errors in the trial court’s application of statutory sentence enhancements. First, it insists the court should have applied the habitual-offender enhancement of Iowa Code section 902.9(2), which is fifteen years, before doubling the sentence for possession of a firearm pursuant to section 124.401(l)(e), for a total sentence of thirty years rather than twenty-five. Second, it claims the court should have tripled this thirty-year sentence because Owens’ previous conviction for a drug tax stamp violation constitutes a drug offense under the enhancement provisions of section 124.411.

We review these challenges to the trial court’s interpretation and application of sentencing statutes for correction of errors at law. State v. Stephenson, 608 N.W.2d 778, 784 (Iowa 2000).

1. Habitual offender and firearm possession enhancements. Iowa Code section 124.401(l)(c) specifically provides that any violation of its subsection is a class “C” felony. While section 902.9(3) provides that the maximum sentence for most class “C” felonies is ten years, subsection (3) specifically states this only applies to those who are not habitual offenders. Habitual offenders are sentenced to a term not to exceed fifteen years pursuant to section 902.9(2). An habitual offender is

any person convicted of a class “C” or “D” felony, who has twice before been convicted of any felony in a court of this or any other state, or of the United States....

Iowa Code § 902.8.

The issue before us concerns the interaction between the habitual-offender enhancement and the firearm possession enhancement required by Iowa Code section 124.401(l)(e). We recently addressed this question in State v. Sisk, 577 N.W.2d 414 (Iowa 1998). Sisk was convicted and sentenced for delivery of a controlled substance as a second offender and as an habitual offender. After Sisk stipulated to two prior convictions for class “C” felonies, one under chapter 124, the court sentenced him to an indeterminate term of forty-five years by tripling the fifteen-year habitual offender sentence of section 902.9(2) in accordance with section 124.411. Sisk, 577 N.W.2d at 416.

We affirmed the court’s sentence, relying on State v. Draper, 457 N.W.2d 600 (Iowa 1990). Id. In Draper, we determined the habitual-offender enhancement imposed pursuant to section 902.9 “dovetailed” with section 204.401 (which is now section 124.401) because section 902.9 applies “to any person convicted of a felony,” even though the chapter governing drug-related crimes has its own enhancement provisions for second and subsequent offenses. Draper, 457 N.W.2d at 603. We concluded that chapter 204, which was chapter 124 at the time we decided Sisk, merely borrowed from chapter 902 in calculating sentences for those who had violated chapter 204 more than once. Id.; see Sisk, 577 N.W.2d at 416.

The analysis we applied in Sisk and Draper applies with equal force to Owens. Owens, who stipulated to convictions for two class “C” or class “D” felonies, was an habitual offender as defined by section 902.8. Even though a violation of section 124.401(l)(c) constitutes a class “C” felony, the usual ten-year sentence mandated by section 902.9(3) does not apply because Owens is an habitual offender. The district court should have looked first to 902.9(2), which required it to sentence Owens to a term not to exceed fifteen years. Only then should the court have doubled this sentence pursuant to the firearm enhancement found in section 124.401(l)(e) for a total sentence not to exceed thirty years.

Accordingly, we vacate Owens’ sentence and remand for resentencing, applying the sentence enhancements in the proper order.

2. Second or subsequent drug offense enhancement. Iowa Code section 124.411 provides:

1. Any person convicted of a second or subsequent offense under this chapter, may be punished by imprisonment for a period not to exceed three times the term otherwise authorized. ...
2. For the purposes of this section, an offense is considered a second or subsequent offense, if, prior to the person’s having been convicted of the offense, the offender has ever been convicted under this chapter or under any state or federal statute relating to narcotic drugs or cocaine, marijuana, depressant, stimulant, or hallucinogenic drugs.

(Emphasis added.) Owens stipulated he had previously been convicted of failure to affix a drug tax stamp in violation of Iowa Code section 453B.12. Yet, he asserts that section 124.41 l’s enhancement is inapplicable in this case for two reasons. First, he contends the enhancement was only intended to apply to prior convictions under Iowa Code chapter 124 (“this chapter”) and similar convictions from other states and federal jurisdictions, but not “other” Iowa statutes. This is the argument relied on by the district court for its decision. The State counters that the phrase “any state or federal statute” includes Iowa statutes not specifically listed.

Alternatively, Owens asserts his conviction under section 453B.12 does not qualify as a conviction under a statute “relating to narcotic drugs or cocaine, marijuana, depressant, stimulant, or hallucinogenic drugs.” See Iowa Code § 124.411(2). He claims section 453B.12 is a taxing statute, not a criminal drug statute. The State counters that the statutory term “related” suggests a broad application of the enhancement provision, not limited to possession or delivery statutes.

Our goal in interpreting section 124.411 is — as with all statutes — to give effect to the legislature’s intent. State v. Sailer, 587 N.W.2d 756, 759 (Iowa 1998). We start by looking at the words used by the legislature, id., and may not look beyond those words when the language and meaning of a statute are unambiguous. State v. Haberer, 532 N.W.2d 757, 759 (Iowa 1995). Moreover, we are obliged to look at what the legislature said, not what it might have or could have said. Id. Finally, we give words their ordinary and common meaning absent any specific legislative definition or meaning in law. State v. McCoy, 618 N.W.2d 324, 325 (Iowa 2000).

We first turn to whether section 453B.12 is “any state or federal statute” as provided in section 124.411(2). Owens claims that if the legislature intended to include section 453B.12 in this group, it would have specifically named that section, just as it specifically referred to chapter 124 as “this chapter.” However, Owens’ interpretation would require us to read “other” into the statute before the words “state or federal statute.” This would be incompatible with the legislature’s choice of the modifier “any” which means “one selected without restriction.” Webster’s Ninth New Collegiate Dictionary 93 (1986). Moreover, we think the interpretation Owens urges would create an absurd and anomalous result. We can conceive of no legitimate reason for the legislature to exempt Iowa drug dealers from an enhancement required to be imposed on drug dealers convicted in other states. See Draper, 457 N.W.2d at 604 (statutes should be construed to avoid unreasonable and absurd results).

That brings us to the second question — whether a conviction for failure to affix a drug tax stamp is “any state or federal statute relating to narcotic drugs or cocaine, marijuana, depressant, stimulant, or hallucinogenic drugs.” Iowa Code § 124.411(2) (emphasis added). The common definition of “relate” is “to have a relationship with or a connection.” Webster’s Ninth Collegiate Dictionary 994 (1986). The intended breadth of the statute is thus clear: A prior conviction under any state or federal statute having a relationship with or connection to cocaine or other narcotic drugs is considered a second or subsequent offense for the purpose of enhancement in accordance with section 124.411(1).

Iowa Code section 453B.12 fits this definition of a second or subsequent offense. The statute makes it a class “D” felony for a “dealer distributing, offering to sell, or possessing taxable substances without affixing the appropriate stamps, labels, or other official indicia....” Iowa Code § 453B.12. A taxable substance is defined by section 453B.1(10) as

a controlled substance, a counterfeit substance, a simulated controlled substance, or marijuana, or a mixture of materials that contains a controlled substance, counterfeit substance, simulated controlled substance, or marijuana.

Section 453B.1(1) defines a controlled substance as those defined in section 124.401, which includes cocaine. Thus, section 453B.12 has a relationship with or connection to the narcotic drugs listed in section 124.411(2).

Because we conclude that Iowa Code section 453B.12 is “any state or federal statute relating to narcotic drugs,” we vacate the sentence imposed by the district court and remand for resentencing consistent with the enhancement permitted under section 124.411.

IV. Conclusion.

We affirm Owens’ convictions for possession with intent to deliver cocaine, failure to affix a drug tax stamp, and felon in possession of a firearm. However, because the court incorrectly applied the applicable sentencing enhancements, we remand for resentencing in accordance with this opinion.

APPEAL AFFIRMED; CROSS APPEAL REVERSED AND REMANDED FOR RESENTENCING.

SNELL, S.J., participates in lieu of STREIT, J., who takes no part.

      . All statutory references will be to the 1999 Code unless otherwise indicated.

      . An additional charge of possession of marijuana with intent to deliver was dismissed on the first day of trial.

      . Section 902.9(3) states ''[a] class 'C felon, not a habitual offender, shall be confined for no more than ten years....” (Emphasis added.)

      . This section states:
      A person in the immediate possession or control of a firearm while participating in a violation of this subsection [124.401(1)] shall be sentenced to two times the term otherwise provided by law, and no such judgment, sentence, or part thereof shall be deferred or suspended.
      Iowa Code § 124.401(l)(e).


author: SACKETT, C.J.

text:
    John D. JOHNSON, Petitioner-Appellant, v. DEPARTMENT OF CORRECTIONS, Respondent-Appellee.
    No. 00-0463.
    Court of Appeals of Iowa.
    Aug. 29, 2001.

      John D. Johnson, Anamosa, pro se.
    Thomas J. Miller, Attorney General, and John R. Lundquist, Assistant Attorney General, for appellee.
    Considered by SACKETT, C.J., and VOGEL and VAITHESWARAN, JJ.
   SACKETT, C.J.

Petitioner-Appellant John D. Johnson appeals the district court’s dismissal of his petition for judicial review following denial by the Iowa Board of Parole (parole board) of either parole or work release for petitioner, who is a prisoner currently serving three consecutive ten-year sentences for a 1990 conviction of third-degree sexual abuse. Petitioner claims on appeal that the Department of Corrections (DOC) violated his constitutional right to due process by refusing his request that he be allowed 1) to review and “correct” the information upon which the parole board relied in denying him parole or work release; 2) to appear in person before the parole board; and 3) to be informed of the specific reasons he was denied parole or work release. Petitioner also argues that the district court erred in declaring that, due to his failure to exhaust all administrative remedies, it lacked jurisdiction to rule on his petition. We affirm.

On October 5, 1990, petitioner, age fifty-three, was sentenced to three consecutive ten-year terms after a jury verdict found him guilty of three separate counts of third-degree sexual abuse. Evidence at trial indicated that petitioner had engaged in a sexual relationship with a seventh-grade girl. The pre-sentence investigation indicated petitioner had sexually abused his two daughters between ages nine and sixteen. The sentencing judge recommended defendant serve the entire thirty-year sentence, whether or not he received treatment, “for the protection of the community.”

Beginning in September 1994, and continuing through September of 1999, the parole board annually reviewed petitioner’s case to evaluate his eligibility for work release or parole. After each yearly review the parole board concluded, “In view of the seriousness of the crime for which you were convicted, the Board believes that a parole at this time would not be in the best interest of society.” Petitioner appealed directly to the district court following the 1999 decision by the parole board to deny him parole or work release.

We first address petitioner’s contention that the district court erred in finding it did not have jurisdiction to address his appeal because petitioner had not exhausted his administrative remedies. A party must exhaust any available administrative remedies before seeking relief in the courts. To apply this doctrine, two conditions must be met: 1) an adequate administrative remedy must exist for the claimed wrong; and 2) the governing statutes must expressly or impliedly require the remedy to be exhausted. Riley v. Boxa, 542 N.W.2d 519, 521 (Iowa 1996). The district court is deprived of jurisdiction over the case if administrative remedies are not exhausted. Keokuk County v. H.B., 593 N.W.2d 118, 122 (Iowa 1999). See also Iowa Coal Mining Co., Inc., v. Monroe County, 555 N.W.2d 418, 431 (Iowa 1996).

In this case an adequate administrative remedy does exist: The Iowa Administrative Code provides an inmate may appeal “any action of the [parole] board staff or board that affects that person .... ” Iowa Admin. Code r. 205-15.1(17A). This appeal must be received at the parole board office, or postmarked, within ten days of the receipt of notice of the action appealed. The board is not required to consider untimely appeals. Iowa Admin. Code r. 205-15.3(3)(17A).

Further, it is implicit in the Iowa Administrative Code that the administrative remedy must be exhausted before further appeal. The Code provides that an inmate “may appeal any action of the [parole] board staff or board.” Iowa Admin. Code r. 205-15.1(17A). It also provides that the board of parole ... “shall review the appeal.” Iowa Admin. Code r. 205-15.4(17A). We therefore interpret the phrase “may appeal” in this section, for purposes of the exhaustion doctrine, to require that any appeal, if filed, be made to the administrative agency. See Riley, 542 N.W.2d at 522-3.

Petitioner claims that the exhaustion requirement does not apply in his case because further appeals to the parole board are an inadequate and fruitless remedy. We disagree. Petitioner has presented no facts or specific allegations upon which to base his claim that the remedy provided by appealing to the parole board is inadequate or fruitless. Petitioner assumes, based on the fact that the articulated reason for denial of parole has been the same since 1994, that the parole board is essentially applying a rubber stamp to his case without considering the facts. Perceived bias on the part of the administrator does not implicate the futility of the appeal. The futility exception is concerned with the adequacy of the remedy, not a perceived predisposition of the decision maker. Iowa Coal Mining, Co., 555 N.W.2d at 431; North River Ins. Co., v. Iowa Div. of Ins., 501 N.W.2d 542, 546 (Iowa 1993). Furthermore, there is no evidence that the petitioner’s attempts to appeal were impeded by the parole board. See Bugely v. State, 464 N.W.2d 878, 880 (Iowa 1991). We affirm the district court’s conclusion that it lacked jurisdiction in this case due to petitioner’s failure to exhaust his administrative appeals.

Even if the district court had had jurisdiction, however, it was correct in ruling that petitioner’s due process rights were not violated by the parole board. Under Iowa Code section 906.3 (1999) the grant or denial of parole or work release is not a contested case as defined in Iowa Code section 17A.2. Therefore an inmate denied parole is not entitled to the full administrative hearing procedure outlined in section 17A.12. The board’s action qualifies as “other agency action.” Sindlinger v. Iowa State Bd. of Regents, 503 N.W.2d 387, 389 n. 1 (Iowa 1993). We review “other agency action” under the standards set forth in Iowa Code section 17A.19(10) (Supp.1999).

There is no evidence that the parole board’s action in this case violated these standards. Under Iowa Code section 906.4 (1999), the parole board, using its discretion, may release on parole or work release an offender whose release will not be to the detriment of the community. In this case the parole board denied the petitioner release due to the severity of his crime and its determination that he was still a threat to the community. The board notified petitioner of these reasons. Petitioner was convicted of sexually abusing a seventh grader, between thirty and forty times, all the while bribing and threatening her not to tell, and cajoling her into trusting him. The sentencing judge recommended petitioner serve his full thirty-year sentence. At this point petitioner has been incarcerated for only about one third of that sentence. The parole board’s decision denying petitioner release was reasonable and properly within its discretion as provided in section 906.4. We affirm the district court’s finding the parole board did not prejudice the substantial rights of the petitioner in denying him parole or work release.

AFFIRMED.


author: James H. Gilbert Associate Justice

text:
    Roger NELSON, Respondent, v. JOHNSON BUILDERS AND DEVELOPERS and State Farm Group, Employer and Insurer, and Fullerton Building Systems and CNA Insurance Company, Employer and Insurer, and Fullerton Building Systems and U.S.F. & G., Relators, and HealthPartners, Inc., and Prairie Rehabilitation Services, Intervenors.
    No. C5-01-1451.
    Supreme Court of Minnesota.
    Nov. 13, 2001.
    Mark W. Shepherd, Worthington, for re-spondenVemployee-Roger Nelson.
    Douglas J. Brown, Minneapolis, for Employer/Insurer-Johnson Builders & Developers and State Farm Froup.
    Philip C. Warner, Minneapolis, for Employer/Insurer-Fullerton Building Systems and CNA Companies.
    Terry B. Lewis, Bloomington, for Rela-tors-Fullerton Building Systems and U.S.F.&G.
    Mark L. Laschansky, Minneapolis, Pro se for Intervenor-Health Partners, Inc.
    LeAnn Schweback, Sioux Falls, SD, Pro se for Intervenor-Prarie Rehabilitation.
   ORDER

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that the decision of the Workers’ Compensation Court of Appeals filed July 30, 2001, be, and the same is, affirmed without opinion. See Minn. R. Civ.App. P. 136.01, subd. 1(b).

Employee is awarded $600 in attorney fees.

BY THE COURT:

James H. Gilbert Associate Justice


text:
    Timothy K. KORDELL, Respondent, v. TAPPERS, INC., and American Compensation Insurance Company/RTW, Relators, HealthPartners, Inc., Fairview Hospital & Health Service, DuChien Chiropractic, Inc., Orthopaedic Consultants, Minnesota Department of Labor and Industry/VRU, Intervenors.
    No. C9-01-1467.
    Supreme Court of Minnesota.
    Nov. 13, 2001.
    Cousineau, McGuire & Anderson, Chartered, Thomas J. Peterson, Minneapolis, for relators.
    Law Office of Thomas D. Mottaz, David B. Kempston, Anoka, for respondent.

      Heacox, Hartman, Mattaini, Koshmrl, Cosgriff <& Johnson, P.A., Gregory Heacox, St. Paul, for intervenor Fairview Hosp. & Health Service.
   ORDER

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that the decision of the Workers’ Compensation Court of Appeals filed August 1, 2001, be, and the same is, affirmed without opinion. See Minn. R. Civ.App. P. 136.01, subd. 1(b).

Employee is awarded $600 in attorney fees.

BY THE COURT:

/a/ Edward C. Stringer Associate Justice


author: LANCASTER, Justice. GILBERT, Justice PAGE, Justice

text:
    PROGRESSIVE SPECIALTY INSURANCE COMPANY, Petitioner, Appellant, v. Kelly June WIDNESS, By and Through her parent and natural guardian Shelia WIDNESS, Respondent, Adonna Ermal Enyart, by and through her parents and natural guardians, Gordon and Dixie Enyart, et al., Defendants.
    No. C7-00-33.
    Supreme Court of Minnesota.
    Nov. 21, 2001.

      Scott A. Brehm, Scott A. Brehm & Associates, St. Paul, for appellant.
    H. Patrick Weir, Jr., Leland F. Hagen, Leland Hagen Law Office, Ltd., Fargo, ND, for respondent.
   OPINION

LANCASTER, Justice.

In this case, we are asked to decide whether the Minnesota No-Fault Automobile Insurance Act requires that an insurer provide residual liability coverage to the child of a named insured when the child is not a named insured and is driving a vehicle not owned by anyone in the named insured’s household, with permission of the vehicle owner. We conclude it does not.

On August 8, 1994, an uninsured vehicle owned by Melissa Baardsen was involved in a one-vehicle rollover accident in Dead Lake Township in Otter Tail County. The vehicle was driven with Baardsen’s permission by 16-year-old Adonna Enyart. Three passengers, including the respondent, Kelly Widness, were riding in the vehicle. Widness alleged personal injuries as a result of the accident and brought an action against Baardsen and Enyart in district court.

At the time of the accident, Adonna Enyart lived with her mother, Dixie En-yart, who was the sole named insured on an automobile insurance policy with appellant Progressive Specialty Insurance Company (Progressive). The policy provided an opportunity to list “additional drivers” but Adonna, in addition to not being a named insured, was not listed as an additional driver. Progressive denied residual liability coverage to Adonna for claims arising out of the accident and filed suit in district court, seeking a declaratory judgment that the residual liability coverage under Dixie Enyart’s policy did not extend to Adonna while driving Baardsen’s vehicle and that Progressive had no duty to defend or indemnify her for any claims arising out of the accident.

The district court denied Progressive’s motion for summary judgment, finding that the terms of Progressive’s policy with Dixie Enyart conflicted with the No-Fault Act and concluding that the policy, when amended to conform to the statutes, provided nonowned vehicle liability coverage for Adonna requiring Progressive to defend and indemnify her for bodily injury claims arising from the accident. Widness in turn requested summary judgment. In response to Widness’s motion, Progressive urged the court to reconsider its previous ruling against Progressive but, in the alternative, acknowledged that summary judgment in favor of Widness was appropriate because there were no factual disputes. Consistent with the findings of fact and conclusions of law contained in its order denying Progressive’s motion for summary judgment, the district court granted summary judgment to Widness.

Progressive appealed and the court of appeals affirmed. The court determined that at the time of the accident Adonna was an “insured” under the No-Fault Act and that the No-Fault Act required Progressive to provide residual liability coverage for an insured while using a nonowned car. Progressive Specialty Ins. Co. v. Widness ex rel. Widness, 613 N.W.2d 781, 783-84 (Minn.App.2000). We reverse.

On appeal from summary judgment, we determine whether there are any genuine issues of material fact and whether the trial court erred in its application of law. Interstate Fire & Cas. Co. v. Auto-Owners Ins. Co., 433 N.W.2d 82, 84 (Minn.1988). Because the facts in this case are undisputed, only questions of statutory and contract interpretation remain; these are questions of law subject to de novo review. Hertz Corp. v. State Farm Mut. Ins. Co., 573 N.W.2d 686, 688 (Minn.1998).

The court of appeals and district court both assumed that, as written, Dixie Enyart’s insurance policy with Progressive did not extend nonowned vehicle liability coverage to Adonna and moved directly to consider Widness’s argument that a policy excluding such coverage would run afoul of the No-Fault Act. We first consider whether the policy in fact excludes such coverage. General principles of contract interpretation apply to insurance policies. Lobeck v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246, 249 (Minn.1998). Where the language of the policy is clear and unambiguous, it is given its usual and accepted meaning. Id. If it is ambiguous, it will be construed against the insurance company, as drafter of the contract. See Current Tech. Concepts, Inc. v. Irie Enterprises, Inc., 530 N.W.2d 539, 543 (Minn.1995).

Dixie Enyart’s policy with Progressive contains a Minnesota Amendatory Endorsement, Part I of which states, with respect to “Liability to Others”:

We will pay, on behalf of an insured person, damages, other than punitive damages, for which any insured person is legally liable because of bodily injury * * * caused by accident and arising out of the ownership, maintenance or use of your insured car ⅜ * ⅜.
Additional Definitions Used in this Part Only
When used in Part I “Insured person” or “Insured persons” means:
1. You or a relative while driving your insured car.
2. You while driving any private passenger car other than your insured car.
3. Any other person driving your insured car.
[5.] The following persons not identified by name as an insured while residing in the same household with the named insured and provided the following persons are not identified by name in any contract under the No-Fault Automobile Insurance Act:
a. A spouse.
b. Other relatives of a named insured.
c. A minor in the custody of a named insured or a relative residing in the same household with a named insured.

Under the policy, “You” is defined to be the policyholder named in the declarations section of the policy, as well as the policyholder’s spouse, if living in the same household. The parties agree that the vehicle Adonna Enyart was driving at the time of the accident was not “your insured car” under Dixie Enyart’s insurance policy.

Progressive acknowledges that Adonna, as an “insured person,” would have liability coverage under her mother’s policy if her liability arose out of use of the car for which the policy was written (“your insured ear”), but goes on to argue that liability coverage for use of a nonowned vehicle is limited to “[y]ou while driving any private passenger car other than your insured car,” where “you” is limited to the 'named insured and spouse. The contract language in Part I and the definitions applicable to Part I make resident family members “insured” while driving the insured vehicle, but do not cover nonowned vehicles driven by nonspouse family members. We agree with the district court’s and the court of appeals’ determinations that, unless the No-Fault Act requires it, the language in Dixie Enyart’s policy does not include Adonna as an insured.

We turn, then, to the question of whether the Minnesota No Fault Automobile Insurance Act requires that Adonna En-yart receive nonowned vehicle liability coverage under her mother’s policy with Progressive. If so, the policy will be amended to conform to the requirements of the statute.

The No-Fault Act requirement for maintenance of residual liability insurance is tied to vehicles; it requires a vehicle owner to maintain liability insurance for that vehicle. The Act requires the “owner of a motor vehicle * * * [to] maintain * * * a plan of reparation security * * * insuring against loss resulting from liability imposed * ⅜ ⅜ for injury * * ⅜ sustained by any person arising out of the ownership, maintenance, operation or use of the vehicle.” Minn.Stat. § 65B.48, subd. 1 (2000) (emphasis added). The Act further requires insurance contracts to state liability limits for the vehicles required to be insured under the Act. “Each plan of reparation security shall also contain stated limits of liability, exclusive of interest and costs, with respect to each vehicle for which coverage is thereby granted * * *.” Minn.Stat. § 65B.49, subd. 3(1) (2000) (emphasis added).

Respondent argues that residual liability insurance required by the Act is not limited to vehicles that are required to be insured under section 65B.48, subd. 1, but follows family members of the vehicle’s owner whenever they drive, regardless of whether the vehicle they drive is the one for which insurance is required or not. The argument is presented in two stages, which simply stated are: first, that all resident family members are “insured,” and second, that all insureds have liability insurance while driving all vehicles, with certain exceptions not relevant here.

First then we examine whether Adonna Enyart is an “insured” for purposes of the Act. Here we readily agree with respondent. The Act leaves no doubt as to who is “insured.” The definition of “insured” in the No-Fault Act is almost identical to additional definition number five in Part I of the Minnesota Amendato-ry Endorsement to the policy.

[T]he named insured and the following persons not identified by name as an insured while (a) residing in the same household with the named insured and (b) not identified by name in any other contract for a plan of reparation security complying with [the No-Fault Act] as an insured:
(1) a spouse,
(2) other relative of a named insured or
(3) a minor in the custody of a named • insured or of a relative residing in the same household with a named insured.
A person resides in the same household with the named insured if that person’s home is usually in the same family unit* * *.

Minn.Stat. § 65B.43, subd. 5 (2000). At the time of the accident, Adonna Enyart was living with her mother, was not identified by name on any other insurance policy, and she is both a relative of the named insured and a minor in custody of the named insured. Therefore, Adonna is “insured” under the statute.

We turn then to stage two of respondent’s argument, which focuses on Minn.Stat. § 65B.49, subd. 3(2) (2000). There, the Act requires a residual liability insurer to “pay, on behalf of the insured, sums which the insured is legally obligated to pay as damages because of bodily injury * * * arising out of the ownership, maintenance or use of a motor vehicle * * *.”

Respondent urges us to conclude that the language of subdivision 3(2), “a motor vehicle,” is clear and unambiguous, and means any motor vehicle (being driven with the owner’s permission). This is essentially what the court of appeals held; that Enyart is an “insured” under the Act, she was driving “a” motor vehicle, and the Act requires Progressive to insure against any residual liability she might incur while driving whether or not the vehicle she is driving is insured under the policy.

We are not persuaded that the statute is clear and unambiguous in this regard. The statute uses the term “a” motor vehicle rather than, for example, “any” motor vehicle, or similar language that signals an intentional broadening, through subdivision 3(2), of the coverage mandated in other subdivisions of the statute. Subdivision 3(2) is part of the No-Fault Act and we read it in conjunction with the Act as a whole. See Anderson v. Comm’r of Taxation, 253 Minn. 528, 533, 93 N.W.2d 523, 528 (1958).

The provisions in the Act that mandate residual liability coverage, sections 65B.48, subd. 1, and 65B.49, subd. 3(1), expressly reference coverage in terms of the vehicle rather than the driver. Section 65B.48, subd. 1, provides that the owner of a motor vehicle must maintain liability insurance for injury from operation of “the” motor vehicle. Section 65B.49, subd. 3(1), specifies the minimum limits for the mandated residual liability coverage that must be maintained “with respect to each vehicle.” The emphasis in these subdivisions on residual liability insurance attaching to the insured vehicle is consistent with our prior observation that unlike first-party coverage that follows the person, liability coverage follows the vehicle. Lobeck, 582 N.W.2d at 250; Hilden v. Iowa Nat. Mut. Ins. Co., 365 N.W.2d 765, 769 (Minn.1985). It is unlikely that section 65B.49, subd. 3(2), was intended to change this focus without doing so more definitively.

The language in subdivision 3(2) that is the crux of respondent’s argument, “arising out of the maintenance or use of a motor vehicle,” is also used in other parts of the No-Fault Act to define the circumstances when the mandated first-party coverage, basic economic loss benefits, are available — that is, when injuries or damages arise from the use of a motor vehicle as opposed to non-vehicle-related activities (or from motorcycle activity since a motorcycle is not a motor vehicle under the Act). See Minn.Stat. § 65B.46, subds. 1, 2 (2000). It is more likely that when the same phrase was used in section 65B.49, subd. 3(2), it was to prescribe the same condition on residual liability coverage — that is, injuries must be motor vehicle related — rather than to contradict the prior provisions that connect this third-party coverage to the insured vehicle. We conclude that the mandatory aspect of residual liability insurance is coverage for the insured vehicle, so that if the insured vehicle is the at-fault vehicle in an accident, there will be liability coverage.

This view is consistent with the historical development of third-party liability concepts in Minnesota. In 1974 in connection with enacting the No-Fault Act, the legislature repealed much of the previous automobile insurance legislation, which was codified under the Safety Responsibility Act. See Act of April 11, 1974, ch. 408, § 33, 1974 Minn. Laws 762, 786; Minn. Stat. ch. 170 (1974).

Relevant to the issue here of liability coverage for permissive drivers of others’ vehicles is a section of the Safety Responsibility Act that remains in effect today. Minnesota Statutes § 170.54 (2000) provides that “[wjhenever any motor vehicle shall be operated within this state, by any person other than the owner, with the consent of the owner, express or implied, the operator thereof shall in case of accident, be deemed the agent of the owner of such motor vehicle in the operation thereof.”

A related section of the Safety Responsibility Act that did not survive the enactment of the no-fault legislation provided that the owner’s liability insurance policy would “insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured, against loss from liability imposed by law for damages arising out of the ownership, maintenance or use of such motor vehicle or motor vehicles.” Minn.Stat. § 170.40, subd. 2(2) (1971). Thus the emphasis in the Safety Responsibility Act was on making sure that there would be coverage when the vehicle was the at-fault vehicle, even if the owner or named insured was not the driver. The focus was not on assuring that all permissive drivers had their own portable liability coverage.

After the No-Fault Act, the Safety Responsibility Act provision remains that makes permissive drivers the agents of the vehicle owners. Minn.Stat. § 170.54. The section in the Safety Responsibility Act requiring liability coverage for permissive drivers was repealed, but it is likely due to the fact that the same coverage was provided by the No-Fault Act’s residual liability requirement. That is, residual liability must cover the vehicle even if a permissive driver is at fault. See 1 Michael K. Steenson, Minnesota No-Fault Automobile Insurance 185 (2d ed. 1999) (“The consent provision of the [S]afety [Responsibility [A]ct was retained when the [N]o-[F]ault [A]ct was passed. In spite of the omission of language similar to section 170.40, it seems clear that the mandated [residual liability] coverage is the same as under prior law.”).

This reading, that permissive drivers are covered under the insurance of the vehicle they are driving, is consistent with our observation in Toomey v. Krone, 306 N.W.2d 549, 550 (Minn.1981), that the No-Fault Act did not alter the basic framework of liability law. The No-Fault and Safety Responsibility Acts taken together provide the legal requirements for coverage of a vehicle such as that being driven by Enyart in this case.

Further, we have upheld exclusions that are inconsistent with respondent’s broad reading of subdivision 3(2). In Toomey, we upheld the validity of a policy that excluded liability coverage for a named insured’s resident relatives when driving vehicles owned by the relatives but not listed in the policy. 306 N.W.2d at 550. More recently in Lobeck, we upheld the validity of an automobile insurance policy provision that excluded coverage for an insured where the insured’s liability to a third party arises while the insured is driving a vehicle without permission. 582 N.W.2d at 250. If the No-Fault Act, and subdivision 3(2) in particular, requires provision of residual liability coverage for all “insureds” when driving “any” vehicle, these exclusions would not have been valid.

Our precedent as stated in Toomey and Lobeck is also significant in that we emphasized what we reiterate today, that liability coverage differs from first-party coverage under the No-Fault Act and is coverage that follows the vehicle rather than the person. The reading of section 65B.49, subd. 3(2), that is urged upon us by respondent Widness would untether liability insurance from the vehicle and make it dependent upon where the driver of an uninsured vehicle happens to live. That sort of inquiry into the residence of a person driving a vehicle in order to determine whether there is liability coverage would represent a dramatic departure from our prior reading of the No Fault Act and the distinctions that we have made between first-party and third-party coverage under the Act.

Respondent’s reliance on the language “a motor vehicle” in the statute would be a slim reed upon which to rest a dramatic departure from settled no-fault first-party and third-party liability coverage law. For one thing, the language appears in a subdivision following a paragraph defining what vehicles must be covered by insurance and, second, had the legislature meant that single phrase to be as encompassing as respondent urges us to read it, the legislature could easily have said “any motor vehicle” rather than “a motor vehicle.” Because the legislature did use the phrase “a motor vehicle” and because there is nothing else in the No-Fault Act, the Safety Responsibility Act, or in our prior case law to indicate that liability coverage must extend to the same persons and under the same circumstances as first-party liability coverage, we reverse the court of appeals.

Reversed.

GILBERT, Justice

(dissenting).

I respectfully dissent from the majority opinion. The majority’s holding will deny coverage to all parents who have purchased no-fault insurance to provide coverage for their minor children of driving age living in their households in case of an accident while the “insured” minor is driving another’s car with the permission of the owner of that car. The majority has “no doubt” that Adonna Enyart is an “insured” under the No-Fault Act. Despite this recognition, the majority denies coverage even though none of the exclusions in Progressive’s policy are applicable to the facts of this case. Furthermore, the majority mistakenly fails to recognize the differences between Minn.Stat. § 65B.48, subd. 1 (requiring that every vehicle owner maintain a plan of reparation security) and Minn.Stat. § 65B.49, subd. 3 (addressing the requirements of each plan of reparation). In doing so, the majority fails to recognize that the No-Fault Act unambiguously states that a residual liability insurer is legally obligated to pay under the circumstances of this case.

The majority begins its decision by mis-characterizing the district court’s decision. The majority states that it agrees with the district court that unless the No-Fault Act requires it, the language in Dixie Enyart’s policy does not include Adonna as an insured. In fact, the district court concluded that Progressive’s policy did provide non-owned vehicle coverage for Adonna En-yart’s use under these facts and that there were no applicable exclusions relating to bodily injury claims and, therefore, Progressive has a duty to defend and indemnify the bodily injury claims arising out of this accident. The district court found a conflict between the definition of “you” and “your” on the declaration page of the policy with the definition of “insured” as defined in the Minnesota No-Fault Automobile Insurance Act. The court of appeals held that Progressive’s provisions on limitation of liability under these circumstances violated the minimum coverage required under the No-Fault Act and were therefore void.

The majority’s decision erroneously interprets ambiguous and sometimes conflicting language within the 27 page no-fault policy in favor of the insurer. In addition, the majority’s decision is contrary to the scope and purpose of the No-Fault Act. In support of its decision, the majority cites cases involving policy exclusions (Lobeck (excluding liability coverage for driving without permission) and Too-mey (excluding liability coverage for insured’s relatives if they owned their own vehicles)) and then adds an exclusion to Progressive’s policy for a resident relative driving a nonowned vehicle. The majority’s conclusion is ironic because exclusion No. 10 within Progressive’s policy only excludes liability coverage for:

Bodily injury or property damage arising out of the ownership, maintenance or use of any vehicle, other than your insured car, which is owned by or furnished or available for regular use by you or a relative.

There is nothing in the record indicating that Adonna Enyart either owned the vehicle involved in the accident or that it was furnished or available to her for regular use. Accordingly, this policy exclusion does not apply to Adonna Enyart. Adon-na Enyart’s use of an acquaintance’s vehicle was not excluded from coverage and was a risk that appears to be directly contemplated in the policy because this case involved a permissive short-term or one-time use of another’s vehicle.

In denying coverage, Progressive argues that Adonna Enyart, age 16, was not an “insured person” in this case because the car she was driving was not the “insured car” under her mother’s policy. However, the way the policy provisions are written, it is unclear what Progressive is trying to accomplish with respect to certain areas of coverage. For example, the policy definition of “insured person” as it relates to liability to others includes “a minor in the custody of a named insured.” In an amendment to Part 1 of the policy where liability to others is covered, the policy states that “[it] will pay, on behalf of an insured person, damages ⅜ * ⅜ for which any insured person is legally liable because of bodily injury and property damage caused by accident and arising out of the * * * use of your insured car * * The policy definition of “your insured car” includes four sub-parts, one of which states “any car ⅞ ⅝ ⅜ not owned by you while being driven temporarily as a substitute for any other vehicle described in this definition, because of its withdrawal from normal use due to breakdown, repair, servicing, loss or destruction.” If these definitions of “insured person,” and “your insured car” were inserted into the amendment to Part 1 of the policy where liability to others is covered, it would read:

We will pay, on behalf of Adonna En-yart, damages for which Adonna Enyart is legally liable because of bodily injury and property damage caused by accident and arising out of the use of any car not owned by Dixie Enyart while being driven temporarily as a substitute for any other insured car because of its withdrawal from normal use due to breakdown, repair, servicing, loss or destruction.

Therefore, Progressive would have been obligated to provide coverage in this case if Adonna Enyart had been temporarily using any vehicle, including Baardsen’s vehicle, as a substitute for any “insured car” under the policy because of that insured car’s breakdown, repair, servicing, loss or destruction. This cuts against the majority’s conclusion that “[t]he contract language in Part I and the definitions applicable to Part I * * * do not cover nonowned vehicles driven by nonspouse family members.”

For a parent trying to read these policy provisions and determine whether their child will be covered, the policy is at a minimum ambiguous. Most people would assume Progressive’s policy would cover their children while driving motor vehicles with permission because the policy states that “insured” includes “a minor in the custody of a named insured * ⅜ *.” Furthermore, as illustrated above, the policy clearly provides coverage in certain circumstances where a policyholder’s minor child drives a nonowned vehicle. The majority states, however, that the policyholder must also read the definitions in conjunction with the rest of the policy, and when that is done, it is clear that the minor is only insured while driving a named policyholder’s insured car and not while driving another’s car with permission. Under the majority’s interpretation, this policy’s no-fault coverage would differ within the family unit depending on which vehicle is being driven. The majority comes to this conclusion by discussing insured vehicles in terms of the intricate differences between the terms “a motor vehicle” and “each motor vehicle” contained in the No-Fault Act while ignoring the common sense interpretation and the policy definitions of “insured person” and “your insured car.” Even when the definitions are read in conjunction with the rest of the policy, its provisions are ambiguous at best.

“Ambiguous terms in an insurance policy are to be resolved against the insurer and in accordance with the reasonable expectations of the insured.” Minnesota Mining and Mfg. Co. v. Travelers Indem. Co., 457 N.W.2d 175, 179 (Minn.1990); Columbia Heights Motors, Inc. v. Allstate Ins. Co., 275 N.W.2d 32, 36 (Minn.1979). Based on the definition of “insured,” it is reasonable for Dixie Enyart to expect that her 16-year-old daughter living -with her and in her custody would be covered under her policy if she is involved in an accident while driving another’s car that is not furnished for regular- use and is used with the owner’s permission. The policy plainly states that, as a minor in Dixie Enyart’s household, Adonna Enyart is included as an insured. In addition, the policy clearly provides coverage for an insured while driving any vehicle not owned by the policyholder if that vehicle is being borrowed temporarily as a substitute for any insured vehicle because of the insured vehicle’s breakdown, repair, or servicing. Progressive should not be allowed to exclude Adonna Enyart from coverage simply because her mother’s car was not being repaired at the time Adonna used Baardsen’s car.

The policy only attempts to exclude coverage as follows: “no person shall be considered an insured person if the person drives a vehicle without the owner’s expressed permission.” The policy further provides “this provision, though, does not apply to the named insured or to those persons identified in additional definition 5 above.” Based on the second sentence in the exception to the definition of insured person, a minor in the custody of the insured is still considered an insured, even when they drive a vehicle without the owner’s expressed permission. This could easily lead one to believe that a child is included as an insured even when they are driving another’s car without permission, which would in turn lead one to believe that her child is certainly covered when driving another’s vehicle with permission, as was the case here.

There is also nothing in the record that supports the proposition that Adonna En-yart was an unknown driver to Progressive. While it is true that she was not listed, Progressive does not offer any proof that they did not know that she was a driver within this family. Moreover, the policy provides that “[h]igher premiums are charged for drivers based upon the number of penalty points accumulated ⅜ * * » it further provides in the “chargeable accidents” sections that “[pjoints are assigned for each accident that occurred during the experience period involving the applicant or anyone else who usually operates the motor vehicle. Points are assigned regardless of which vehicle is being driven at the time of the accident.” (Emphasis in policy.) Accordingly, premium adjustments focus on the driver, not the applicant, and regardless of the vehicle.

Even if one accepts the majority’s conclusion that Progressive’s policy did not provide coverage for Adonna Enyart in this case, the majority also ignores the plain language of the No-Fault Act. Under the No-Fault Act, Progressive is liable to pay, on behalf of Adonna Enyart, damages recoverable by Widness arising out of Adonna Enyart’s use of a motor vehicle. See Minn.Stat. § 65B.49, subd. 3(2). Despite this clear language, the majority engages in a lengthy discussion of other provisions of the No-Fault Act and concludes that the statute is not clear and unambiguous.

When the language of a statute is plain and unambiguous, it manifests the legislative intent and we must give the statute its plain meaning. Kersten v. Minnesota Mut. Life Ins. Co., 608 N.W.2d 869, 874-75 (Minn.2000). This court has held that words and phrases are to be construed “according to rules of grammar and according to their most natural and obvious usage ⅜ * ⅜.” Amaral v. Saint Cloud Hospital, 598 N.W.2d 379, 384 (Minn.1999).

As the majority points out, the No-Fault Act requires every “owner of a motor vehicle * * * [to] maintain * ⅜ * a plan of reparation security * * * insuring against loss resulting from liability imposed * * ⅜ for injury * ⅜ ⅜ sustained by any person arising out of the ownership, maintenance, operation or use of the vehicle.” Minn. Stat. § 65B.48, subd. 1. The majority then uses the language from section 65B.48, subd. 1, to define the scope of a plan of reparation security. This is improper because according to the No-Fault Act a “[p]lan of reparation security” is defined as “a contract * * ⅜ under which there is an obligation to pay the benefits described in section 65B.49.” Minn.Stat. § 65B.43, subd. 15. Therefore, section 65B.49 defines the scope of the No-Fault Act’s residual liability insurance coverage. As discussed above, section 65B.49, subd. 3(2), unambiguously requires an insurer to insure against any residual liability an insured incurs as a result of the “maintenance or use of a motor vehicle.” This provision should be given its plain meaning — the same meaning as this court has given to the phrase “maintenance or use of a motor vehicle” when considering its usage in section 65B.44 — “for an injury to arise out of the use of a motor vehicle, there must exist a causal connection between the injury and the use of an automobile for transportation purposes.” Nadeau v. Austin Mut. Ins. Co., 350 N.W.2d 368, 370 (Minn.1984) (citations omitted). Widness’s injuries are causally connected to Adonna Enyart’s use of an automobile and Progressive should be required to pay Widness’s damages on behalf of Enyart.

The majority also attempts to minimize the scope of the phrase “use of a motor vehicle” contained in section 65B.49, subd. 3(2), by referencing section 65B.49, subd. 3(1). The majority claims that subdivision 3(1) “specifies the minimum limits for the mandated residual liability coverage that must be maintained ‘with respect to each vehicle,’ ” and that the emphasis of this provision is that residual liability insurance should only attach to the insured vehicle. The majority takes this phrase out of context and in doing so misinterprets the subdivision as a whole. Section 65B.49, subd. 3(1), requires that “each plan of reparation security shall also contain stated limits of liability * * * with respect to each vehicle for which coverage is thereby granted ⅜ ⅜ *>> jmpües ⅛¾⅛ each pjan 0f rep_ aration security may contain coverage for more than one vehicle and that the limits of liability must be stated with respect to each vehicle for which coverage is granted under the plan of reparation security. This reading of section 65B.49, subd. 3(1), rather than the majority’s reading, is consistent with section 65B.49, subd. 3(2), which indicates that residual liability insurance extends to circumstances involving “the use of a motor vehicle” and not just circumstances where there is the “use of the motor vehicle.”

The majority opinion also interprets the threshold requirement that all vehicle owners have insurance as meaning other family members driving nonowned vehicles on occasion are not required to have insurance. The No-Fault Act requires every owner of a registered motor vehicle in Minnesota to purchase reparation security. Minn.Stat. § 65B.48, subd. 1. Under the majority’s reading of the statute, a minor who is a licensed and an authorized driver but does not own a vehicle, as is the case here, is not required to have such coverage. The only way a minor that does not own a vehicle would have reparation security is if she is covered through her parents’ policy. The fact that the legislature intended this coverage for minors within family policies is evidenced by the No-Fault Act’s definition of “insured.” The No-Fault Act defines a minor driver under the facts presented here as an insured under the family’s policy. While the majority attempts to analogize this case to Toomey and Lobeck, these cases are distinguishable in that they involved policy exclusions related to facts not present in this case. There simply are no statutory or policy exclusions that apply to the facts presented in this case.

Both the insurance policy issued by Progressive in this case and the majority opinion create great uncertainty for families with minors and open up a significant gap in our No-Fault Act coverage. Resolving the ambiguity in Progressive’s policy in favor of Adonna Enyart in accordance with the reasonable expectations of the named insured requires the court to find that the policy provides coverage for damages arising out of Adonna Enyart’s use of Baard-sen’s car. The majority holds the statute was not “clear and unambiguous,” but they ignore the conflicting and ambiguous language within the policy. Furthermore, the No-Fault Act unambiguously provides coverage for Adonna Enyart based on the facts of this case.

I would affirm the court of appeals.

PAGE, Justice

(dissenting).

I join in the dissent of Justice Gilbert.

      . The policy provides that any terms of the policy that conflict with Minnesota statutes "are hereby amended to conform to the statutes.”

      . The effect of this provision is ignored by the majority.

      . The only evidence in the record is answers to requests for admissions admitting that Adonna Enyart was not listed as a named insured or as an additional driver.

      . Section 65B.49, subd. 2, states that "[e]ach plan of reparation security shall provide for payment of basic economic loss benefits.” Basic economic loss benefits are recoverable where an injury arises out of the maintenance or use of a motor vehicle and all this requires is a causal connection between the injury and the use of an automobile for transportation purposes. Nadeau, 350 N.W.2d at 370. Therefore, it does not make sense to interpret “maintenance or use of a motor vehicle” to mean one thing under section 65B.49, subd. 2, and mean something different under section 65B.49, subd. 3.


author: WILBUR, Circuit Judge.

text:
    2001 SD 124
    In the ESTATE OF Fred W. ZOSS, Deceased, Prairie Home Cemetery Association of Butler Township, a/k/a Butler Cemetery Association, Plaintiff and Appellant, v. SOUTH DAKOTA DEPARTMENT OF REVENUE and Sanborn County, Defendants and Appellee.
    No. 21742.
    Supreme Court of South Dakota.
    Argued Aug. 29, 2001.
    Decided Oct. 17, 2001.
    Bradley G. Zell and Christopher C. Moen, Miller, for plaintiff and appellant.
    Allen J. Eide, Pierre, for defendant and appellee Department of Revenue.
   WILBUR, Circuit Judge.

[¶ 1.] Prairie Home Cemetery Association of Butler Township, a/k/a Butler Cemetery Association [Prairie Home], received a gift of personal property from the estate of Fred Zoss. Department of Revenue [Department] assessed inheritance tax which Prairie Home paid under protest. The circuit court denied Prairie Home’s application for an exemption from the tax. Prairie Home appeals and we affirm.

FACTS

[¶ 2.] The parties stipulated to the following pertinent facts:

[¶ 3.] Since 1899 Prairie Home has operated as a nonprofit cemetery, selling plots and conducting burials. Fred Zoss, a Sanborn County resident, died on or about August 2, 1996. By and through his living trust, Zoss gave Prairie Home a gift of personal property valued at $551,764.71. Prairie Home prepared an inheritance tax report and indicated that, due to its tax-exempt status, no inheritance tax was owing.

[¶ 4.] Subsequently, the Department inquired into Prairie Home’s Internal Revenue Service [IRS] exemption status. Prairie Home was unable to locate documents verifying its exemption status. On April 28, 1998, Prairie Home’s attorney drafted and filed new documents re-creating the cemetery association. Prairie Home then requested tax-exempt status from the IRS, which issued an exemption letter on May 27, 1999. The letter recognized the cemetery as exempt under § 501(c)(13) of the Internal Revenue Code.

[¶ 5.] On June 7, 1999, the Department assessed inheritance tax in the amount of $153,673.41 on Zoss’s gift to Prairie Home. Prairie Home paid the tax under protest and appealed the Department’s decision to the circuit court. The circuit court denied the request for a refund and dismissed the complaint, holding that Prairie Home was not an organization entitled to tax exemption under South Dakota law. Prairie Home’s motion for a new trial was denied. This appeal followed.

STANDARD OF REVIEW

[¶ 6.] This Court interprets statutes under a de novo standard of review; no deference is given to the decision of the trial court. In re Estate of Karnen, 2000 SD 32, ¶ 7, 607 N.W.2d 32, 35.

[¶ 7.] In addition, statutes exempting property from taxation should be strictly construed in favor of the taxing power. Robinson & Muenster Assoc., Inc., v. South Dakota Dep’t of Revenue, 1999 SD 132, ¶ 7, 601 N.W.2d 610, 612. “The words in such statutes should be given a reasonable, natural, and practical meaning to effectuate the purpose of the statute.” Id.

DECISION

ISSUE ONE

[¶ 8.] Prairie Home is not entitled to an exemption from inheritance tax under SDCL 1041-9.2.

[¶ 9.] SDCL 10^=0-23(2) exempts from inheritance tax transfers to a “charitable, benevolent or religious society or institution or foundation as defined in §§ 10-4-9 to 1041-9.3, inclusive.” Examination of SDCL 10-4-9, 1041-9.1 and 10-4-9.3 reveals that those sections are inapplicable here. SDCL 10-4-9.2 is the only provision that may permit Prairie Home to qualify for the SDCL 10-40-23(2) exemption. SDCL 10-4-9.2 provides:

Property owned by a benevolent organization and used exclusively for benevolent purposes is exempt from taxation.
A benevolent organization is any lodge, patriotic organization, memorial association, educational association, cemetery association or similar association. A benevolent organization must be nonprofit and recognized as an exempt organization under sections 501(c)(3), 501(c)(7), 501(c)(8), 501(c)(10) or 501(c)(19) of the United States Internal Revenue Code of 1986, as amended, and in effect on January 1, 1992. However, if any such property consists of improved or unimproved property located within a municipality not occupied or directly used in carrying out the primary objective of the benevolent organization owning the same, such property shall be taxed the same as other property of the same class is taxed. However, if any such property consists of agricultural land, such property shall be taxed the same as other property of the same class is taxed. For the purposes of this section, an educational association is a group of accredited elementary, secondary or postsec-ondary schools. For the purposes of this section, a benevolent organization also includes a congressionally chartered veterans organization which is nonprofit and recognized as an exempt organization under section 501(c)(4) of the United States Internal Revenue Code of 1986, as amended, and in effect on January 1,1992.
For purposes of this section, benevolent purpose means an activity that serves the poor, distressed or underprivileged, promotes the physical or mental welfare of youths or disadvantaged individuals, or relieves a government burden,

(emphasis added). Therefore, to be exempt from taxation under SDCL 10-4-9.2, Prairie Home must, at the time of the decedent’s death, (1) be a cemetery association; (2) be nonprofit; and (3) be recognized as an exempt organization under sections 501(c)(3), 501(c)(7), 501(c)(8), 501(c)(10) or 501(c)(19) of the United States Internal Revenue Code (IRC).

[¶ 10.] On the date of Zoss’s death, August 2, 1996, Prairie Home did not exist except as an informal nonprofit cemetery association. It was officially created on April 28, 1998. In addition, Prairie Home did not obtain exemption status under IRC § 501(c)(13) from the IRS until May 27, 1999.

[¶ 11.] The circuit court ruled that Prairie Home was not entitled to an exemption from South Dakota’s inheritance tax because its IRC designation (§ 501(c)(13)) was not included in SDCL 10 — 4—9.2. Prairie Home argues that either the Legislature erred in omitting this IRC section or the statute must be construed to read “cemetery association” as analogous with “cemetery corporation.” However, this question need not be reached because the circuit court faded to address the fact that inheritance tax is calculated as of the date of death. In re Estate of Johnson, 89 S.D. 149, 230 N.W.2d 236 (1975). As previously noted, Prairie Home did not exist as a recognized cemetery association on the date of Zoss’s death, therefore, it could not qualify as exempt from inheritance taxes under the first criteria of SDCL 10-4-9.2. In addition, although Prairie Home had been informally in existence for 100 years, at the time of Zoss’s death, it had no IRS tax-exempt recognition under any subdivision of § 501(c). Therefore, it could not meet the third criteria of SDCL 10-4-9.2. When Zoss died and inheritance tax on his gift to Prairie Home accrued, Prairie Home could only meet the second criteria of the statute, i.e. that it was nonprofit. This was insufficient to be exempted from South Dakota’s inheritance tax.

[¶ 12.] We have consistently held that “if the circuit court reaches the right conclusion for the wrong reason, we will nonetheless affirm.” In re Estate of Perry, 1998 SD 85, ¶ 29, 582 N.W.2d 29, 35 (citations omitted). We affirm the circuit court on this issue.

[¶ 13.] We need not reach the additional arguments submitted by Prairie Home to decide this appeal.

[¶ 14.] Judgment is affirmed.

[¶ 15.] SABERS, Acting Chief Justice, and AMUNDSON, KONENKAMP, and GILBERTSON, Justices, concur. MILLER, Retired Chief Justice, was a member of the Court at the time this action was submitted, but was disqualified and did not participate.

[¶ 16.] WILBUR, Circuit Judge, sitting for MILLER, Retired Chief Justice, disqualified.

      . This attorney is not Prairie Home’s appellate counsel.

      . The defendants in this case are the Department and Sanborn County. Sanborn County is a defendant because it received 10% of the inheritance tax collected by the Department pursuant to SDCL 1041-67.

      . SDCL 10-41-61, in relevant part, provides that ''[a]ll inheritance taxes imposed by this code shall take effect and accrue upon the death of the decedent....”