author: MARING, Justice.

text:
    2003 ND 168
    STATE of North Dakota, Plaintiff and Appellee v. $17,515.00 IN CASH MONEY, $50.00 in Cash Money, Daniel Olivarez, Defendants and Alice Olivarez, Defendant and Appellant.
    No. 20030008.
    Supreme Court of North Dakota.
    Nov. 13, 2003.
    Sharon Wilson Martens, State’s Attorney, Grafton, for plaintiff and appellee.
    Henry H. Howe, Howe & Seaworth, Grand Forks, for defendant and appellant.
   MARING, Justice.

[¶ 1] Alice Olivarez has appealed from a judgment ordering forfeiture of cash found during execution of a search warrant. We affirm, concluding Olivarez was not entitled to a jury trial on the forfeiture and the trial court did not apply an erroneous standard of proof.

I

[¶ 2] On January 2, 2002, police officers executed a search warrant at the home of Daniel Olivarez, Jr., and Alice Olivarez. Officers found 191 bags of cocaine in an open safe on the dresser in the Olivarezes’ bedroom. On the dresser next to the safe was a $50 bill. Officers found $17,515.00 in a backpack located on the bed near the dresser. Subsequent lab tests also found residue of marijuana in the backpack.

[¶ 3] The State instituted forfeiture proceedings, alleging the money was derived from illegal drug transactions. At trial, one of the officers who executed the search warrant testified to the circumstances surrounding the search and the discovery of the money in close proximity to the cocaine. Alice Olivarez testified that the money was not derived from drug transactions, but that $15,000.00 of the money had been a gift from Daniel’s father. She further testified she kept the money in the backpack rather than a bank because she was afraid that her creditors could get it if it was in the bank.

[¶ 4] The trial court found that the money was derived from illegal drug transactions and ordered it forfeited to the State. A judgment of forfeiture was entered, and Alice Olivarez appealed.

II

[¶ 5] Olivarez contends the court erred in denying her demand for a jury trial. The State instituted this forfeiture proceeding under N.D.C.C. ch. 19-03.1, which clearly envisions that the matter is to be heard by the court without a jury:

Hearing on contested forfeiture — Order releasing or forfeiting property. If an answer is filed within the time limits in this chapter, the forfeiture proceedings must be set for hearing before the court.... If the court finds that the property is not subject to forfeiture under this chapter, the court shall order the property released to the owner or other person with a legal interest in the property as that person’s right, title, or interest appears. The court shall order the property forfeited if it determines that such property or an interest therein is subject to forfeiture.

N.D.C.C. § 19-03.1-36.6.

[¶ 6] Olivarez contends this procedure is unconstitutional, arguing a jury trial is required under N.D. Const, art. I, § 13, which provides: “The right of trial by jury shall be secured to all, and remain inviolate.” This provision neither enlarges nor restricts the right to a jury trial, but merely preserves the right as it existed at the time of the adoption of our constitution. Peters-Riemers v. Riemers, 2002 ND 72, ¶ 5, 644 N.W.2d 197; Daley v. American Family Mut. Ins. Co., 355 N.W.2d 812, 814-15 (N.D.1984); City of Bismarck v. Altevogt, 353 N.W.2d 760, 764 (N.D.1984); Union State Bank v. Miller, 335 N.W.2d 807, 808 (N.D.1983); In re R.Y., 189 N.W.2d 644, 651 (N.D.1971). This provision preserves the right to a jury trial in all cases in which it could have been demanded as a matter of right at common law at the time of the adoption of our constitution. Peters-Riemers, at ¶ 5; General Elec. Credit Corp. v. Rickman, 338 N.W.2d 814, 817 (N.D.1983); In re R.Y., at 651. The right to a trial by jury as it existed under law at the time of adoption of the constitution is governed in this case by the Compiled Laws of Dakota Territory (1887). See Altevogt, at 764; Peters-Riemers, at ¶ 6.

[¶ 7] At the time of the adoption of our constitution in 1889, no cause of action existed for forfeiture of the proceeds of illegal drug transactions. The 1887 Code provided that a criminal conviction worked no forfeiture of property except in cases of treason or when specifically provided by statute:

No conviction of any person for crime works any forfeiture of any property, except in the cases of any outlawry for treason, and other cases in which a forfeiture is expressly imposed by law.

1887 Compiled Laws of Dakota Territory § 6958. This statutory provision excluding forfeitures unless expressly provided by law remained in effect, with slight variation, until the new criminal code became effective in 1975. See N.D.C.C. § 12-06-28, repealed by 1973 N.D. Sess. Laws ch. 116, § 41.

[¶ 8] The 1887 Compiled Laws also included a provision specifying: “In this territory there is no common law in any case where the law is declared by the codes.” 1887 Compiled Laws of Dakota Territory § 2605; see also N.D.C.C. § 1-01-06. Because § 6958 “declared” the law regarding forfeitures for criminal acts, specifically providing forfeiture only in cases of outlawry for treason or when “expressly imposed by law,” there was no separate common law of forfeiture for criminal acts.

[¶ 9] Olivarez has not cited, nor have we located, any provision in the 1887 Code imposing a forfeiture for proceeds of illegal drug transactions. The legislature enacted the current provision authorizing forfeiture of money used in illegal drug transactions in 1983. See 1983 N.D. Sess. Laws ch. 256, § 1; N.D.C.C. § 19-03.1-36(l)(h).

[¶ 10] It is axiomatic that, because there was no available action in this state for forfeiture of proceeds from illegal drug transactions at the time the constitution was adopted, there was no right to a jury trial in such an action. The legislature created a new statutory proceeding when, nearly a century after adoption of the constitution, it authorized forfeiture of property, including money, used in illegal drug transactions. We agree with courts in other jurisdictions which have held that, under similar circumstances, there is no constitutional right to a jury trial in a forfeiture proceeding. See Swails v. State, 263 Ga. 276, 431 S.E.2d 101, 103 (1993); State Conservation Dep’t v. Brown, 335 Mich. 343, 55 N.W.2d 859, 861-62 (1952); In re Forfeiture of 301 Cass Street, 194 Mich.App. 381, 487 N.W.2d 795, 798 (1992); State v. One 1921 Cadillac Touring Car, 157 Minn. 138, 195 N.W. 778, 780 (1923); State v. Morris, 103 N.C.App. 246, 405 S.E.2d 351, 352-53 (1991); Helms v. Tennessee Dep’t of Safety, 987 S.W.2d 545, 547 (Tenn.1999). We agree with the rationale of the Supreme Court of Georgia in Swails, at 103 (citations omitted):

The provision of our State Constitution regarding the right to jury trial “means that it shall not be taken away, as it existed in 1798, when the [first] instrument was adopted, and not that there must be a jury in all cases. New forums may be erected, and new remedies provided, accommodated to the ever shifting state of society.” Flint River Steamboat Co. v. Foster, 5 Ga. 194, 207-208 (1848). Obviously, the right to jury trial in drug forfeiture proceedings did not exist in 1798. This is true because the statute authorizing drug forfeiture is a “new remedy” which did not exist at common law, but which was enacted subsequent to 1798 so as to accommodate the “shifting state of society.” “[T]here is no state constitutional right to a jury trial with respect to proceedings of statutory origin unknown at the time the Georgia Constitution was adopted.” Benton v. Ga. Marble Co., 258 Ga. 58, 66(4), 365 S.E.2d 413 (1988). Since the provisions of OCGA § 16 — 13— 49 create a statutory proceeding which was unknown in 1798, it follows that the General Assembly was authorized to provide for a bench trial in that proceeding and that the trial court in the instant case correctly overruled appellant’s challenge to the constitutionality of OCGA § 16-13-49(o)(6) and (p)(6).

[¶ 11] The forfeiture provisions of N.D.C.C. ch. 19-03.1 create a statutory proceeding and new remedies which were unknown at the time our constitution was adopted in 1889. Accordingly, there is no right under N.D. Const, art. I, § 13, to a jury trial in proceedings under the statute.

Ill

[¶ 12] Olivarez contends the trial court applied an erroneous standard of proof and improperly placed the burden upon her to show that the money was not derived from illegal drug transactions. Olivarez argues the State has the burden to prove by a preponderance of the evidence that the money was derived from illegal drug transactions.

[¶ 13] The legislature has spelled out the applicable standards and burdens of proof in a forfeiture proceeding under N.D.C.C. ch. 19-03.1. Section 19-03.1-36.2, N.D.C.C., provides:

Forfeiture proceeding as civil action— Standard of proof. Forfeiture proceedings are civil actions against the property to be forfeited and the standard of proof is a preponderance of the evidence.

The applicable burdens of proof in a contested forfeiture proceeding are enunciated in N.D.C.C. § 19-03.1-36.6:

If an answer is filed within the time limits in this chapter, the forfeiture proceedings must be set for hearing before the court. At the hearing, the state shall establish probable cause for instituting the forfeiture action following which any owner or person with a legal interest in the property to be forfeited who has filed an answer to the complaint has the burden of proving that the property to be forfeited is not subject to forfeiture under this chapter. If the court finds that the property is not subject to forfeiture under this chapter, the court shall order the property released to the owner or other person with a legal interest in the property as that person’s right, title, or interest appears. The court shall order the property forfeited if it determines that such property or an interest therein is subject to forfeiture.

[¶ 14] We have previously interpreted the statute as setting forth a two-step process. In State v. One 1990 Chevrolet Pickup, 523 N.W.2d 389, 394 n. 3 (N.D.1994), we noted that “the government first must show probable cause to institute forfeiture proceedings and then the burden shifts to the claimant.” See also Rick Maixner & Sidney Hertz Fiergola, Constitutional Issues in North Dakota Asset Foreclosure Law After Austin v. United States, Alexander v. United States, and United States v. Good Real Property, 70 N.D.L.Rev. 851, 852 (1994) (“Once the government has established probable cause that the asset is forfeitable, the burden shifts to the claimant to prove by a preponderance of the evidence that the property should not be forfeited.”). We explained the burden-shifting procedure:

Probable cause is only a minimal, threshold burden. This burden requires the State to establish only that reasonable grounds exist to believe that the property was “probably connected with criminal activity.” State v. Rydberg, 519 N.W.2d 306, 308 (N.D.1994), quoting State v. Ringquist, 433 N.W.2d 207, 212 (N.D.1988)_ If the State has not proved that there was probable cause to seize [the claimant’s] pickup for use in a felony, the case is over, and the pickup must be returned. But this is only the first stage of proof that the trial court must decide in a forfeiture case.
If probable cause for seizure is proven, the trial court still must go to the second stage and weigh the evidence under a preponderance standard to determine whether to forfeit the pickup. Thus, if [the claimant] proved that it was more probable that his pickup was only used in a misdemeanor, and not in a felony, then the trial court should deny forfeiture and return the pickup to him.

One 1990 Chevrolet Pickup, at 394-95 (citations omitted).

[¶ 15] The statute does not provide that, if the claimant comes forward with evidence tending to show that the property was not involved in illegal drug activity, the burden shifts back to the State to prove the property is forfeitable. Rather, the statute clearly provides that, once the State establishes probable cause to believe the property is forfeitable, the ultimate burden of proof shifts to the claimant to prove by a preponderance of the evidence that the property is not forfeitable. That is precisely the standard applied by the trial court in this case. The court first found there was probable cause to believe the money was derived from illegal drug sales, and then concluded Olivarez had failed to show that the money had not come from illegal drug sales.

[¶ 16] We conclude the court did not apply an incorrect standard of proof.

IV

[¶ 17] We have considered the remaining arguments raised by Olivarez and find them to be without merit. The judgment is affirmed.

[¶ 18] GERALD W. VANDE WALLE, C.J., WILLIAM A. NEUMANN, DALE V. SANDSTROM, and CAROL RONNING KAPSNER, JJ„ concur.


source: Caselaw Access Project

author: SANDSTROM, Justice. VANDE WALLE, Chief Justice,

license: Public Domain

text:
    2003 ND 164
    Dean WANGLER, Plaintiff and Appellant, v. Ron LEROL and Farmers Union Mutual Insurance Company, Defendants and Appellees.
    No. 20030066.
    Supreme Court of North Dakota.
    Nov. 13, 2003.

      Bryan L. Van Grinsven (argued) and Jennifer Neigum-Stanley (appeared), appearing under the Rule on the Limited Practice of Law by Law Students, McGee, Hankla, Backes & Dobrovolny, Minot, N.D., for plaintiff and appellant.
    E. Thomas Conmy III (argued) and Mark R. Hanson (on brief), Nilles, Hansen & Davies, Ltd., Fargo, N.D. for defendant and appellee Ron Lerol.
    Carlton J. Hunke (argued) and Leah Marie Warner (on brief), Fargo, N.D., for defendant and appellee Farmers Union Mutual Insurance Company.
   SANDSTROM, Justice.

[¶ 1] Dean Richard Wangler appealed from a judgment awarding him $2,531.77 plus costs and disbursements from Ronald Orvin Lerol, but dismissing the remaining claims against Lerol and Farmers Union Mutual Insurance Company in his action arising out of an injury Wangler suffered during the course of his employment at Pine Ridge Company. We conclude the district court did not err in granting summary judgment dismissing Wangler’s claim that Lerol and Farmers Union are equitably estopped from denying insurance coverage under the circumstances, and we affirm that part of the judgment. We further conclude the court erred in ruling Wangler’s Miller-Shugart settlement agreement with the alleged tortfeasor, Pine Ridge, released Pine Ridge from any liability for Wangler’s personal injuries, thus making an assignment of its negligence claim against Lerol and Farmers Union ineffective. We reverse the judgment insofar as it dismisses Wangler’s negligence claim against Lerol and Farmers Union, and we remand for further proceedings.

I

[¶2] Wangler was employed by Pine Ridge, a corporation engaged in turkey farming, located near Rugby and partially owned by T.M. Snortland. The turkey farm was located on land owned by Snort-land and his sister, Laura Fairfield. Lerol is an insurance agent who sold Farmers Union insurance policies to Pine Ridge, Snortland, and Fairfield.

[¶ 3] On August 5, 1998, Wangler was injured while working at Pine Ridge. In July 1999, Wangler brought a negligence action against Pine Ridge, which did not carry workers compensation insurance. Pine Ridge submitted a claim through Ler-ol to Farmers Union, and Farmers Union assumed the defense of Pine Ridge under a reservation of rights in a farm liability policy that had been purchased through Lerol. Although the farm liability policy included coverage for employee liability claims, only Snortland and Fairfield were named insureds, and not Pine Ridge. After determining that Pine Ridge was not covered under an additional farmowners property policy or a farm umbrella policy issued through Lerol, Farmers Union withdrew its defense of Pine Ridge in Wangler’s action.

■ [¶ 4] After Farmers Union denied coverage, Pine Ridge sued Lerol and Farmers Union in October 1999 to recover damages it may have to pay as a result of Wangler’s personal injury action. Pine Ridge claimed Lerol negligently failed to procure employee liability insurance for Pine Ridge and claimed Farmers Union was vicariously liable for the acts and omissions of its insurance agent, Lerol, under principles of respondeat superior.

[¶ 5] In March 2000, Wangler and Pine Ridge entered into a Miller-Shugart settlement agreement. In McPhee v. Tufty, 2001 ND 51, ¶ 10 n. 1, 623 N.W.2d 390, we explained a Miller-Shugart agreement:

Under Miller v. Shugart, 316 N.W.2d 729 (Minn.1982), an insured defendant may settle a plaintiffs claims and stipulate judgment may be collected only from the proceeds of an insurance policy. See Medd v. Fonder, 543 N.W.2d 483, 485 (N.D.1996). The stipulated judgment is not conclusive on the insurer, and the plaintiff judgment creditor has the burden of showing the settlement was reasonable and prudent. See Rebel v. Nodak Mut. Ins. Co., 1998 ND 194, ¶ 5 n. 1, 585 N.W.2d 811.

[¶ 6] The agreement here provided that Pine Ridge “stipulates to a judgment against it, and in favor of [Wangler], in the amount of $200,000.00”; Wangler “will in no way seek to collect this judgment from [Pine Ridge]”; the “judgment is explicitly not satisfiable by attachment nor shall it become a lien upon any of the assets of [Pine Ridge]”; Wangler “will only seek to satisfy this judgment from Farmers Union”; and “[i]f called upon by [Pine Ridge], [Wangler] will cause to be delivered a release or Quit Claim Deed or other document as to the property of [Pine Ridge] affected by the judgment, with the sole exception of liability which may be found to attach to the policy of insurance issued by Farmers Union.” Pine Ridge agreed to “assign[] to [Wangler] its rights to pursue insurance coverage from Farmers Union ... for the judgment either by garnishment, declaratory judgment action, or otherwise.” ■ In a separate document, Pine Ridge also assigned to Wangler “all of its right, title, interest, claim, and demand” in its negligence action against Lerol and Farmers Union.

[¶ 7] In August 2001, the district court granted partial summary judgment in favor of Lerol and Farmers Union. The court ruled the Miller-Shugart agreement had released Pine Ridge from any monetary liability for Wangler’s bodily injuries, resulting in a lack of necessary damages from Lerol’s alleged errors and omissions in failing to procure insurance coverage to support the negligence action. The court also ruled, because Lerol could not be hable, Farmers Union could not be hable under a respondeat superior theory. The court concluded, however, that Wangler could recover the costs and expenses Pine Ridge incurred in defending his lawsuit. The court also allowed Wangler to be substituted as a party in Pine Ridge’s action against Lerol and Farmers Union, and permitted Wangler to amend the complaint to ahege Farmers Union was estopped from denying that it had issued an insurance pohcy to Pine Ridge providing coverage for Wangler’s injuries because Lerol had represented to Pine Ridge that it had employee liability coverage.

[¶ 8] In January 2003, the district court granted summary judgment dismissing Wangler’s remaining claim that Farmers Union was estopped from denying insurance coverage in this case. The court ruled “as a matter of law the statements made in this case are insufficient to create coverage which otherwise did not exist.” The court awarded Wangler $2,531.77 plus costs and disbursements against Lerol for the costs and expenses incurred by Pine Ridge in defending Wangler’s personal injury action, and dismissed the remainder of the claims.

[¶ 9] The district court had jurisdiction under N.D. Const, art. VI, § 8, and N.D.C.C. § 27-05-06. Wangler’s appeal was timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, § 2, and N.D.C.C. §§ 27-02-04 and 28-27-01.

II

[¶ 10] Summary judgment is a procedure for the prompt and expeditious disposition of a controversy without trial if either party is entitled to judgment as a matter of law, if no dispute exists as to either the material facts or the inferences to be drawn from undisputed facts, or if resolving factual disputes would not alter the result. Grinnell Mut. Reinsurance Co. v. Center Mut. Ins. Co., 2003 ND 50, ¶ 9, 658 N.W.2d 363. On appeal, we review the evidence in the light most favorable to the party opposing the summary judgment motion. Ramey v. Twin Butte Sch. Dist., 2003 ND 87, ¶ 7, 662 N.W.2d 270. Factual issues become appropriate for summary judgment when reasonable minds can draw but one conclusion from the evidence. Jones v. Barnett, 2000 ND 207, ¶ 4, 619 N.W.2d 490.

A

[¶ 11] Wangler does not claim any of the Farmers Union insurance policies as written provide coverage for his injuries. Rather, Wangler argues Pine Ridge has an employee liability insurance contract with Farmers Union based on representations made by its agent, Lerol. Wangler argues the district court improperly granted summary judgment dismissing his claim that Farmers Union is estopped from denying coverage under the circumstances.

[¶ 12] This Court has said the doctrines of waiver and estoppel will not operate to create an insurance contract that never existed. See National Farmers Union Prop. & Cas. Co. v. Michaelson, 110 N.W.2d 431, 438-39 (N.D.1961); Conklin v. North Am. Life & Cos. Co., 88 N.W.2d 825, 831 (N.D.1958). This is the majority rule. See Annot., Doctrine of estoppel or waiver as available to bring within coverage of insurance policy risks not covered by its terms or expressly excluded therefrom, 1 A.L.R.3d 1139, 1144 (1965). Other courts have recognized exceptions to the rule, and Wangler relies on an exception requiring that he prove “(1) ‘a misrepresentation as to the fact or extent of coverage, innocent or otherwise, by the insurer or its agent, and (2) reasonable reliance by the insured thereon to his ultimate detriment.’ ” Countryside Oil Co., Inc. v. Travelers Ins. Co., 928 F.Supp. 474, 481 (D.N.J.1995) (quoting Martinez v. John Hancock Mut. Life Ins. Co., 145 N.J.Super. 301, 367 A.2d 904, 911 (Ct.App.Div.1976)). Even if we were to recognize this exception to the general rule, we agree with the district court that Wangler has failed to raise a genuine issue of material fact to support his claim.

[¶ 13] Wangler relies on an affidavit of Snortland, one of the owners of Pine Ridge, who said it was “my understanding that Pine Ridge employees were covered under the liability policy as well as the umbrella policy in place.” Snortland stated:

Mr. Lerol conducted an annual review of insurance policies with me. During those reviews we discussed my personal insurance as well as business coverage, including Pine Ridge. On each occasion, I asked Mr. Lerol, “Now, we’re covered aren’t we?” At no time did he indicate that there was no liability insurance coverage for Pine Ridge. Relying on Mr. Lerol’s representations, no separate liability coverage was secured for Pine Ridge nor was workers compensation coverage reinstated.

[¶ 14] Wangler relies on several cases from other jurisdictions to support his es-toppel argument. However, the facts in those cases are markedly different from the facts related in Snortland’s affidavit. As the district court noted, all of the cases Wangler relies upon involved situations in which the misrepresentations were in the form of a definite statement or act indicating that a particular insurance policy provided a specific type of coverage. See, e.g., Ivey v. United Nat’l Indem. Co., 259 F.2d 205, 209 (9th Cir.1958) (evidence created issue of estoppel where agent told insured his duck hunting business was covered by comprehensive personal Lability policy); Golden Gate Motor Transp. Co. v. Great Am. Indem. Co., 6 Cal.2d 439, 58 P.2d 374, 378 (1936) (estoppel where insured requested specific insurance coverage for a specific vehicle); Kramer v. United Servs. Auto. Ass’n, 436 So.2d 935, 937 (Fla.App.1983) (complaint stated cause of action for estoppel where insurer informed insured her new car was covered for 30 days); Peninsular Life Ins. Co. v. Wade, 425 So.2d 1181, 1183 (Fla.App.1983) (estoppel was established where agent told insured that policy would pay full benefits from date of issuance); Harr v. Allstate Ins. Co., 54 N.J. 287, 255 A.2d 208, 219-20 (1969) (prima facie case of estoppel was established where insured asked agent to cover business merchandise stored in basement and agent advised insured it was fully covered); Allstate Ins. Co. v. State Farm Mut. Auto. Ins. Co., 67 Or.App. 623, 679 P.2d 879, 882 (1984) (estoppel where insured’s son reasonably relied on agent’s representation that his auto was covered); State Auto. Cas. Underwriters v. Ruotsalainen, 81 S.D. 472, 136 N.W.2d 884, 887 (1965) (estoppel where agent assured insured that policy covered liability arising out of use of towed tool trailer); Farmers Mut. Auto. Ins. Co. v. Bechard, 80 S.D. 237, 122 N.W.2d 86, 93 (1963) (estoppel was established where agent represented to insured that he was covered regardless of what he was driving or what kind of work he was doing); Dodge v. Aetna Cas. & Sur. Co., 127 Vt. 409, 250 A.2d 742, 744 (1969) (estoppel was established where insured informed agent he was enlarging his business and asked agent for all insurance necessary for the business); Marlin v. Wetzel County Bd. of Educ., 212 W.Va. 215, 569 S.E.2d 462, 473 (2002) (estoppel was established where agent prepared certificate of insurance naming Board as additional insured).

[¶ 15] Snortland’s ambiguous question to Lerol after their annual insurance reviews, “Now, we’re covered aren’t we?”, is distinguishable from the specific questions and assurances present in these cases. Snortland does not explain in his affidavit exactly what Lerol said to him in response to his question, and does not describe any definite statement or act by Lerol or Farmers Union that would lead Snortland to believe Pine Ridge had employee liability coverage. Viewed in the light most favorable to Wangler, this evidence does not suggest that Lerol engaged in any affirmative action to lead Snortland to an incorrect belief about insurance coverage.

[¶ 16] We conclude the district court did not err in granting summary judgment dismissing Wangler’s claim that there is insurance by estoppel in this case.

B

[¶ 17] Wangler argues the district court erred in dismissing his negligence claim against Lerol and Farmers Union. In explaining the dismissal, the court said:

The Miller-Shugart agreement had released Pine Ridge from any monetary liability for Wangler’s bodily injury. Since Pine Ridge could not incur any damages for Wangler’s bodily injury based on Lerol’s alleged errors and omissions in failing to procure coverage, it no longer had that claim against Ler-ol. Since Lerol could not be liable, Farmers was no longer responsible on a theory of respondeat superior for Ler-ol’s failure to procure coverage.

The district court’s reasoning is similar to the analysis used by some courts in determining whether a Miller-Shugartr-type settlement, consisting of a stipulated judgment, covenant not to execute, and assignment of claims, is enforceable against an insurer.

[¶ 18] The approach courts have taken on this issue was summarized in Freeman v. Schmidt Real Estate & Ins., Inc., 755 F.2d 135 (8th Cir.1985). In Freeman, the insured, Catron, was involved in a vehicle collision with Freeman, and when Freeman sued Catron, Catron’s insurance company paid its vehicle liability limits of $50,000 to Freeman. Catron claimed his insurance agent had agreed to obtain a $300,000 automobile policy covering all of Catron’s vehicles. Freeman and Catron settled, with Catron confessing judgment for $350,000 and costs, Freeman agreeing not to execute on any amount of the judgment in excess of $50,000, and Catron assigning his cause of action against the insurance agency for failing to obtain the $300,000 policy. Freeman, as assignee, then sued the insurance agency and the insurer, alleging they were negligent and breached an oral contract in failing to obtain the additional $300,000 insurance policy. The magistrate dismissed the action, concluding, because Catron did not become legally obligated to pay by virtue of the covenant not to execute, he would have been entitled to nothing under the policy, and, consequently, Catron suffered no damages. The magistrate concluded Freeman received no enforceable rights from Catron under the assignment.

[¶ 19] The U.S. Court of Appeals for the Eighth Circuit, in a two-to-one decision resolving an open question under Iowa law, summarized the state of the law on whether an insurer may be liable to an injured party when the insured is protected by an agreement not to execute on the judgment:

First, under the typical liability insurance policy, an insurer must reimburse the insured only as to amounts which the insured “shall become legally obligated to pay as damages.” A covenant not to execute, some courts hold, is merely a contract, and not a release, such that the underlying tort liability remains and a breach of contract action lies if the injured party seeks to collect his judgment. Thus, the tortfeasor is still “legally obligated” to the injured party, and the insurer still must make good on its contractual promise to pay. State Farm Mutual Automobile Insurance Co. v. Paynter, 122 Ariz. 198, 593 P.2d 948, 953 (Ct.App.1979); Globe Indemnity Co. v. Blomfield, 115 Ariz. 5, 562 P.2d 1372, 1375 (Ct.App.1977); cf. Critz v. Farmers Insurance Group, 230 Cal.App.2d 788, 41 Cal.Rptr. 401, 410 (1964) (agreement holding tortfeasor harmless as to judgment in excess of his insurance coverage doesn’t foreclose suit against insurer for bad-faith failure to settle). An uninsured party would then be injured by the agent’s negligence in failing to procure a policy because he would have the outstanding “liability” against which he sought to insure.
The policy rationale used by other states reaching the result urged by Freeman focuses primarily on the right of the insured to protect himself from bad faith conduct of his insurer. For example, the Nebraska Supreme Court has held that an insured, and thus the insurer, is “legally obligated to pay” within the meaning of the policy despite an agreement not to execute when the insured enters into such an agreement to protect himself from the insurer’s denial of coverage and refusal to defend under the policy. Metcalf v. Hartford Accident & Indemnity Co., 176 Neb. 468, 126 N.W.2d 471 (1964). The Nebraska court stressed that the insurer had “repudiated its obligation” to the insured, id., 126 N.W.2d at 476, and some element of misconduct by the insurer generally has been present in the cases in which courts have followed Met-calf E.g., American Family Mutual Insurance Co. v. Kivela, 408 N.E.2d 805, 813 (Ind.Ct.App.1980) (insurer “abandoned” insured when it refused to defend on the ground that the policy had been revoked for false statements on the application); Griggs v. Bertram, 88 N.J. 347, 443 A.2d 163 (1982) (insurer faded to promptly notify insured that it was denying coverage). Even those courts which base their findings of liability on the distinction between a release and a covenant not to execute acknowledge the policy implications of an opposite conclusion — settlements such as the one here would no longer serve their intended purpose. E.g., Paynter, 593 P.2d at 953.
Cases reaching the result urged by the insurers here give the “legally obligated to pay” language the practical construction adopted by the magistrate: An insured protected by a covenant not to execute has no compelling obligation to pay any sum to the injured party; thus, the insurance policy imposes no obligation on the insurer. Stubblefield v. St. Paul Fire & Marine Insurance Co., 267 Or. 397, 517 P.2d 262, 264 (1973) (en banc); Bendall v. White, 511 F.Supp. 793, 795 (N.D.Ala.1981); Huffman v. Peerless Insurance Co., 17 N.C.App. 292, 193 S.E.2d 773, 774, cert. denied, 283 N.C. 257, 195 S.E.2d 689 (1973). An individual who is uninsured due to an agent’s negligence then will have suffered no damages, as he would have had no rights under the policy anyway. While this interpretation does prevent use of settlements such as that entered into by the parties here, we agree with the magistrate that Iowa public policy does not require a different result in this case.

Freeman, 755 F.2d at 137-139 (footnotes omitted). A minority of jurisdictions have followed the rule the Eighth Circuit predicted the Iowa Supreme Court would adopt. See, e.g., Lida Mfg. Co., Inc. v. United States Fire Ins. Co., 116 N.C.App. 592, 448 S.E.2d 854, 857 (1994); State Farm Fire and Cas. Co. v. Gandy, 925 S.W.2d 696, 719 (Tex.1996). [¶ 20] In 1995, the Iowa Supreme Court had the opportunity itself to consider the question. In Red Giant Oil Co. v. Lawlor, 528 N.W.2d 524, 532-33 (Iowa 1995), the court rejected the Freeman court’s conclusion and held a covenant not to execute is merely an agreement rather than a release, the underlying tort liability remains, a breach of contract action is available if the injured party seeks to collect the confessed judgment, and the stipulated judgment does not eliminate the fact of damages. Consequently, the court ruled, because there remained outstanding liability against the insured who had confessed judgment in favor of the injured party, there was “potential damage” caused by an insurance agent’s failure to procure the correct coverage, and the action against the agent was viable if there was no insurance coverage. Id. at 533. The Iowa court thus aligned itself with the vast majority of courts to have considered the question since Freeman was decided. See, e.g., Gray v. Grain Dealers Mut. Ins. Co., 871 F.2d 1128, 1133 (D.C.Cir.1989) (involving assigned action against insurance company); McLellan v. Atchison Ins. Agency Inc., 81 Hawaii 62, 912 P.2d 559, 564-565 (Ct.App.1996) (involving assigned action against insurance agent); Guillen ex rel. Guillen v. Potomac Ins. Co., 203 Ill.2d 141, 271 Ill.Dec. 350, 785 N.E.2d 1, 13 (2003) (involving assigned action against insurance company); Campione v. Wilson, 422 Mass. 185, 661 N.E.2d 658, 663 (1996) (involving assigned action against insurance agent); Lancaster v. Royal Ins. Co. of America, 302 Or. 62, 726 P.2d 371, 375 (1986) (involving assigned action against insurance company); Kobbeman v. Oleson, 574 N.W.2d 633, 637 (S.D.1998) (involving assigned action against insurance agent); Tip’s Package Store, Inc. v. Commercial Ins. Managers, Inc., 86 S.W.3d 543, 555 (Tenn.Ct.App.2001) (involving assigned action against insurance agent); Gainsco Ins. Co. v. Amoco Prod. Co., 53 P.3d 1051, 1060-61 (Wyo.2002) (involving assigned action against insurance company). See also J. Harris, Note Judicial Approaches to Stipulated Judgments, Assignments of Rights, and Covenants Not to Execute in Insurance Litigation, 47 Drake L.Rev. 853, 858 (1999). However, if the insured does execute a full release of liability, the insured has no right to recover against the insurance company that can be assigned to an injured party. See, e.g., Clock v. Larson, 564 N.W.2d 436, 438 (Iowa 1997); Tip’s Package Store, 86 S.W.3d at 555.

[¶ 21] The validity of Miller-Shugart agreements has been recognized in North Dakota for more than a decade. See McPhee v. Tufty, 2001 ND 51, 623 N.W.2d 390; Rebel v. Nodak Mut. Ins. Co., 1998 ND 194, 585 N.W.2d 811; Ohio Cas. Ins. Co. v. Homer, 1998 ND 168, 583 N.W.2d 804; Fisher v. American Family Mut. Ins. Co., 1998 ND 109, 579 N.W.2d 599; Hanneman v. Continental W. Ins. Co., 1998 ND 46, 575 N.W.2d 445; D.E.M. v. Allickson, 555 N.W.2d 596 (N.D.1996); Medd v. Fonder, 543 N.W.2d 483 (N.D.1996); Dundee Mut. Ins. Co. v. Balvitsch, 540 N.W.2d 609 (N.D.1995); Sellie v. North Dakota Ins. Guar. Ass’n, 494 N.W.2d 151 (N.D.1992). In Miller v. Shu- garb, 316 N.W.2d 729, 732 (Minn.1982), the Minnesota Supreme Court approved the settlement mainly on policy grounds without specifically addressing whether the agreement extinguished any damages the insured could suffer, even though the court observed the stipulated “judgment effectively liquidates defendants’ personal liability.” See J. Harris, Note, 47 Drake L.Rev. at 858 (noting “most recent decisions concerning the use of this procedure do not even address the question of whether the provider is ‘legally obligated to pay’ under the terms of its policy”). The Minnesota Court of Appeals has indicated it is an open question whether a stipulated tort judgment eliminates damages and defeats assigned claims. See Peterson v. Brown, 457 N.W.2d 745, 748, 750 (Minn.Ct. App.1990). Nevertheless, we believe the Minnesota Supreme Court’s approval of Miller-Shugart settlements defeats any argument that a stipulated tort judgment accompanied by a covenant not to execute, rather than an actual release of liability, eliminates the fact of damages. A Miller-Shugart settlement agreement cannot coexist with a rule declaring an insured incurs no damage from an agreement to confess judgment accompanied by a covenant not to execute and an assignment of claims. If the district court’s analysis were accepted, Miller-Shugart settlements would be invalid and useless because an abandoned insured would be precluded from settling within policy limits with injured third parties.

[¶ 22] The Miller-Shugart agreement in this case was not a “release” of Pine Ridge’s liability. Wangler only agreed to not seek to collect the stipulated judgment from Pine Ridge. Wangler also agreed that, if requested, he would deliver a “release or Quit Claim Deed” as to Pine Ridge’s property “affected by the judgment,” but specifically excluded from that promise “liability which may be found to attach to the policy of insurance issued by Farmers Union.” The agreement is a contract, rather than a release, the underlying tort liability remains, and a breach of contract action lies in favor of Pine Ridge if Wangler seeks to collect the judgment against its assets. We conclude the agreement did not extinguish Pine Ridge’s damages and the district court erred in dismissing Wangler’s negligence action on this basis.

[¶ 23] Although the Miller-Shugart agreement did not eliminate the fact of damages, the agreement itself is of no relevance to Wangler’s negligence action against Lerol. In St. Michel v. Burns and Wilcox, Ltd., 433 N.W.2d 130 (Minn.App.1988), the Minnesota Court of Appeals ruled a Miller-Shugart agreement between the injured plaintiff and an insured could not be enforced against insurance agents. The court noted that in a typical Miller-Shugart agreement, the rights and obligations between the insured and insurer are grounded on an insurance policy contract, and reasoned:

We agree with appellants that their situation is different from the circumstances in Miller. The agent’s situation is not like the existing contractual relationship between an insured and insurer. The insurer’s responsibilities under the contract exist at the time the claim arises between the plaintiff and the insured, but the agent’s obligation to indemnify ... arises only after ... the agent’s substitute liability is confirmed by agreement or litigation. During the interim, there is an inadequate relationship to justify the risk and eventual burden of a settlement.
It is evident that in Miller the supreme court undertook a delicate balancing of burdens and risks and resolved them against the interest of an insurer. Different questions are involved in applying the same rule of law to a case which does not involve existing contractual responsibilities between an insured and insurer, and Miller does not support this application.

Id. at 135. Consequently, the settlement agreement is not probative on the issues of Lerol’s fault or Pine Ridge’s damages. See Campione, 661 N.E.2d at 663. Wangler, as the assignee, will have to prove his negligence action against Lerol in full. See Kobbeman, 574 N.W.2d at 636-37.

C

[¶ 24] Lerol and Farmers Union argue Wangler’s respondeat superior claim against Farmers Union is not properly before us because Wangler failed to re-allege it after the trial court dismissed the claim in the August 2001 partial summary judgment and allowed Wangler to amend the complaint.

[IT 25] Lerol and Farmers Union rely on State Bank of Kenmare v. Lindberg, 471 N.W.2d 470, 475 (N.D.1991), in which this Court quoted Dahl v. Winter-Truesdell-Diercks Co., 62 N.D. 351, 355, 243 N.W. 812, 813 (1932), for the general proposition that “an amended pleading, ‘which is complete in itself and does not refer to, or adopt, the prior pleading, supersedes it, and the original pleading ceases to be a part of the record, being in effect abandoned, or withdrawnAlthough in Lindberg, at 475, we noted the Dahl holding was “consistent with current thought under modern pleading,” we nevertheless reviewed the merits of the appellants’ argument contained in their original counterclaim even though it was not raised in their amended counterclaim.

[¶26] Many of the federal courts of appeals refuse to require a plaintiff to replead dismissed claims to preserve the right to appeal the dismissal. See Young v. City of Mount Ranier, 238 F.3d 567, 572-73 (4th Cir.2001); In re Crysen/Mon-tenay Energy Co., 226 F.3d 160, 162 (2d Cir.2000); Dunn v. Air Line Pilots Ass’n, 193 F.3d 1185, 1191 n. 5 (11th Cir.1999); Parrino v. FHP, Inc., 146 F.3d 699, 704 (9th Cir.1998); USS-POSCO Indus, v. Contra Costa County Bldg. & Constr. Trades Council, 31 F.3d 800, 811-12 (9th Cir.1994); Davis v. TXO Prod. Corp., 929 F.2d 1515, 1517-18 (10th Cir.1991); Wilson v. First Houston Inv. Corp., 566 F.2d 1235, 1238 (5th Cir.1978), vacated on other grounds, 444 U.S. 959, 100 S.Ct. 442, 62 L.Ed.2d 371 (1979); Blazer v. Black, 196 F.2d 139, 143-44 (10th Cir.1952) (dicta); see also 35A C.J.S. Federal Civil Procedure § 445 (2003). These courts have reasoned it is “needlessly formalistic” to require a plaintiff to replead claims already dismissed. Young, 238 F.3d at 572; see also 6 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil 2d § 1477, at pp. 560-61 (1990) (criticizing the general rule). The “futily exception” to the general rule, In re Crysen/Montenay Energy Co., 226 F.3d at 162, has arisen because, “[b]y dismissing the claims ..., the district court has quite clearly given its view of the viability of the claims, a view not made any clearer or more final by requiring the plaintiff to re-allege the already rejected claims.” Young, 238 F.3d at 572; see also Dunn, 193 F.3d at 1191 n. 5. A “rule requiring plaintiffs who file amended complaints to replead claims previously dismissed on their merits in order to preserve those claims merely sets a trap for unsuspecting plaintiffs with no concomitant benefit to the opposing party.” Davis, 929 F.2d at 1518 (footnote omitted). Courts have also reasoned, “[i]f the plaintiff were required to reallege claims dismissed on summary judgment to avoid waiving them, plaintiffs counsel would be forced to bear the risk of sanctions to preserve his client’s right to appeal.” Parrino, 146 F.3d at 704; see also USS-POSCO Indus., 31 F.3d at 812. One court further reasoned, “such an approach spawns piecemeal appeals.” Wilson, 566 F.2d at 1238.

[¶ 27] We agree with the reasoning of these courts and conclude a plaintiff need not replead dismissed claims in an amended complaint to preserve the right to appeal the dismissal. To the extent Dahl is inconsistent with our conclusion, it is expressly overruled. The district court’s dismissal of the respondeat superi- or claim against Farmers Union is properly before this Court. See Security State Bank v. Orvik, 2001 ND 197, ¶ 6, 636 N.W.2d 664 (holding nonappealable interlocutory orders, such as partial summary judgments, are reviewable in an appeal from a final judgment).

[¶28] Generally, entities are liable for torts committed by their agents while acting within the scope of their employment. Binstock v. Fort Yates Pub. Sch. Dist., 463 N.W.2d 837, 841-42 (N.D. 1990). Section 3-03-09, N.D.C.C., provides “a principal is responsible to third persons for the negligence of the principal’s agent in the transaction of the business of the agency, including wrongful acts committed by the agent in and as a part of the transaction of the business.” We have concluded the district court improperly dismissed Wangler’s negligence claim against Lerol. If Lerol is found to be negligent, there could be a basis for imputing Lerol’s negligence to Farmers Union. Therefore, we conclude the court erred in dismissing the respondeat superior claim against Farmers Union.

Ill

[¶ 29] We affirm the summary judgment dismissing Wangler’s claim that Ler-ol and Farmers Union are equitably es-topped from denying insurance coverage. We reverse the summary judgment dismissing Wangler’s negligence action against Lerol and Farmers Union and remand for further proceedings.

[¶ 30] WILLIAM A. NEUMANN, WILLIAM J. HODNY, S.J., and MARY MUEHLEN MARING, JJ., concur.

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

VANDE WALLE, Chief Justice,

concurring specially.

[¶ 32] I authored the opinion in State Bank of Kenmare v. Lindberg, 471 N.W.2d 470 (N.D.1991) for the Court. In that case we did review the merits of the argument of the appellants “contained in their original counterclaim even though it was not raised in their amended counterclaim,” while citing Dahl v. Winter-Truesdell-Diercks Co., 62 N.D. 351, 243 N.W. 812 (1932) for the proposition ascribed by the majority opinion.

[¶ 33] With one exception I agree with the majority’s reliance on the federal cases which refuse to require a plaintiff to re-plead dismissed claims to preserve the right to appeal the dismissal. My exception concerns whether the defendant understands the plaintiff has not repleaded the dismissed claim solely because it was dismissed and not for other reasons such as a new theory of the cause of action or a concession on the plaintiffs part, that the trial court was legally correct in its reasons for dismissing the claim. While a “rule requiring plaintiffs who file amended complaints to replead claims previously dismissed on their merits in order to preserve those claims merely sets a trap for unsuspecting plaintiffs,” Davis v. TXO Production Corp., 929 F.2d 1515, 1518 (10th Cir.1991), so too may the failure to replead the dismissed claim be a trap for unsuspecting defendants who are led to believe the plaintiffs intend to abandon the dismissed claim by their failure to replead. It is not inconceivable that plaintiffs may abandon a dismissed claim because the trial court was obviously correct in dismissing the claim or that the amended pleading frames a new cause of action which is inconsistent with the continued viability of the dismissed claim. The paramount purpose of a complaint is, after all, to inform the defendant of the nature of the claim being asserted against the defendant by the plaintiff. N.D.R.Civ.P. 7; Vande Hoven v. Vande Hoven, 399 N.W.2d 855 (N.D.1987).

[¶ 34] There is no assertion here that Lerol and Farmers Union were misled by Wangler’s failure to reallege the responde-at superior claim in the amended complaint. It may be that Lerol and Farmers Union were misled by State Bank of Kenmare’s citation to Dahl. However, it is clear both defendants realized we might review the dismissed claim, as we did in State Bank of Kenmare, because both defendants briefed the respondeat superior claim on its merits.

[¶ 35] I concur in the result reached by the majority opinion.

[¶ 36] Gerald W. Vande Walle, C. J.

      . Carrier Agency, Inc. v. Top Quality Bldg. Prod., Inc., 519 N.E.2d 739 (Ind.App.1988), relied on by Lerol and Farmers Union to support the argument that there are no damages in this case, is unpersuasive under the circumstances, because the case does not involve a Miller-Shugart type settlement agreement.


author: KAPSNER, Justice. NEUMANN, Justice, MARING, Justice,

text:
    2003 ND 167
    Frances M. REINEKE, Plaintiff, Appellee and Cross-Appellant, v. Ronald K. REINEKE, Defendant, Appellant and Cross-Appellee.
    No. 20030014.
    Supreme Court of North Dakota.
    Nov. 13, 2003.

      Brenda A. Neubauer, Neubauer & Oster, Bismarck, N.D., for plaintiff, appellee and cross-appellant.
    Theresa L. Zimmerman, American Legal Services, Bismarck, N.D., for defendant, appellant and cross-appellee.
   KAPSNER, Justice.

[¶ 1] Ronald K. Reineke (“Reineke”) appealed from the judgment entered in the divorce action brought by Frances M. Rei-neke (“Michels”), and she cross-appealed. We affirm the judgment and remand with directions to retain jurisdiction.

I

[¶ 2] The parties married in 1983. The parties had two children, a son, born in 1985, and a daughter, born in 1988. In October 2001, Reineke began a social relationship with Betty Althoff and told Michels he wanted a divorce. The relationship with Althoff became intimate on December 31, 2001, or January 1, 2002. Michels sued for divorce in February 2002. In March 2002, Reineke, his daughter, Althoff, and Althoffs children visited a Mend of Althoffs in Nebraska. Reineke and Althoff shared a room, while Reineke’s daughter and Althoffs children slept in another room. Reineke stayed at Althoffs home about once a week until he moved out of the family home in April 2002.

[¶ 3] The judgment entered on December 5, 2002, granted the parties a divorce, divided the marital property, ordered Rei-neke to pay rehabilitative spousal support of $300 per month from November 15, 2002, through November 15, 2006, or until Michels remarries, awarded Michels primary physical custody of the children, set a visitation schedule, and ordered Reineke to pay child support of $638 per month. Reineke appealed the judgment and Mi-chels cross-appealed.

II

Reineke’s Appeal

a. Property and Support

[¶ 4] Reineke contends the court’s property distribution awarded him a negative $1,823.37 and awarded Michels $34,088 and is clearly erroneous. He contends the award of rehabilitative spousal support of $300 per month for four years to Michels is also clearly erroneous.

[¶ 5] The trial court in a divorce case must equitably distribute the marital property. N.D.C.C. § 14-05-24; Sommers v. Sommers, 2003 ND 77, ¶8, 660 N.W.2d 586. While a property distribution need not be equal to be equitable, the trial court must explain a substantial disparity. Sommers, at ¶ 8. A trial court’s determinations regarding division of property are treated as findings of fact and will not be reversed unless they are clearly erroneous. Hogan v. Hogan, 2003 ND 105, ¶ 14, 665 N.W.2d 672. There are no set rules for distributing marital property, but to assist in its determination, courts follow established caselaw setting out certain guidelines, known as the Ruff-Fischer guidelines, Hogan, at ¶ 19, derived from Ruff v. Ruff 78 N.D. 775, 52 N.W.2d 107 (1952), and Fischer v. Fischer, 189 N.W.2d 845 (N.D.1966).

[¶ 6] Under N.D.C.C. § 14-05-24.1, a trial court in a divorce case “may require one party to pay spousal support to the other party for any period of time.” We recently addressed permanent and rehabilitative spousal support in Sommers, 2003 ND 77, ¶ 16, 660 N.W.2d 586 (quoting Sommer v. Sommer, 2001 ND 191, ¶ 14, 636 N.W.2d 423) (citations omitted):

We recognize permanent spousal support and rehabilitative spousal support as two distinct remedies. Permanent spousal support is generally appropriate when the disadvantaged spouse cannot be equitably rehabilitated to make up for the opportunities lost in the course of the marriage. Furthermore, permanent spousal support may be awarded “where the marriage has been of long duration and the dependent spouse has health problems or is of such an age that adequate rehabilitation is unlikely.” In contrast, rehabilitative spousal support is appropriate “when it is possible to restore an economically disadvantaged spouse to independent economic status or to equalize the burden of divorce by increasing the disadvantaged spouse’s earning capacity.” However, even when the disadvantaged spouse is capable of rehabilitation, our Court has recognized permanent spousal support as an appropriate remedy to ensure the parties equitably share the overall reduction in their separate standards of living.

We continued:

When justified by the facts, rehabilitative support is preferred over permanent spousal support. Fox, 1999 ND 68, ¶ 21, 592 N.W.2d 541. “Nevertheless, when there is substantial disparity between the spouse’s incomes that cannot be readily adjusted by property division or rehabilitative support, it may be appropriate for the court to award indefinite permanent support to maintain the disadvantaged spouse.” Id. While we have not endorsed the equalization of income between divorcing spouses as a measure of spousal support, Riehl, 1999 ND 107, ¶ 17, 595 N.W.2d 10, a difference in earning power is a proper factor for consideration in prescribing spousal support, Pfliger v. Pfliger, 461 N.W.2d 432, 436 (N.D.1990).

Sommers, at ¶ 17.

[¶ 7] “Questions of property division and spousal support cannot be considered separately or in a vacuum, but ordinarily must be examined and dealt with together, especially when there is a large difference in earning power between the spouses.” Sommers, 2003 ND 77, ¶ 15, 660 N.W.2d 586. When awarding spousal support, the trial court is to apply the Ruff-Fischer guidelines, van Oosting v. van Oosting, 521 N.W.2d 93, 100 (N.D.1994). A trial court’s determination of spousal support is reviewed as a finding of fact and will only be overturned if it is clearly erroneous. Corbett v. Corbett, 2002 ND 103, ¶ 4, 646 N.W.2d 677.

[¶ 8] Thus, the Ruff-Fischer guidelines apply to both property division and spousal support, which ordinarily must be considered together, and a trial court’s spousal support and property division determinations are findings of fact that are subject to the clearly erroneous standard of review. Under the Ruff-Fischer guidelines, the following factors should be considered:

the respective ages of the parties to the marriage; their earning abilities; the duration of the marriage and the conduct of each during the marriage; their station in life; the circumstances and necessities of each; their health and physical conditions; their financial circumstances as shown by the property owned at the time; its value and income-producing capacity, if any, and whether it was accumulated or acquired before or after the marriage; and such other matters as may be material.

Shields v. Shields, 2003 ND 16, ¶ 7, 656 N.W.2d 712 (quoting Mellum v. Mellum, 2000 ND 47, ¶ 15, 607 N.W.2d 580). “Under the Ruff-Fischer guidelines, both economic and noneconomic fault are proper factors for the trial court to consider in dividing marital property.” McDowell v. McDowell, 2001 ND 176, ¶ 6, 635 N.W.2d 139.

[¶ 9] Michels was 48 years old at the time of trial. She has two years of college and works as a records clerk in a medical clinic, earning about $19,000 per year. She has multiple sclerosis. Reineke was 47 years old at the time of trial. He works as a truck driver, earning about $32,000 per year. He has diabetes and has anxiety attacks. The trial court considered the Ruff-Fischer guidelines. For the property distribution, the court considered and made findings about the parties’ ages, health, and incomes, the length of the marriage, and, among other things:

For most of the marriage Ron has been a controlling spouse. Testimony was received that he demeaned Fran and would do so in public. Ron expected to be waited upon and was controlling as to finances of the marriage. Ron was involved in a relationship with Betty pri- or to the divorce proceedings.
15. The parties borrowed $10,000 from Fran’s family to buy the house and are expected to pay this back. The remaining balance is approximately $8,100.

The court explained the disparity in the property distribution:

6. The Court notes the length of the marriage, the controlling nature of Ron and the actions of Ron contributing to the divorce as reasons for the unequal asset allocation. The Court further notes the loan from Fran’s family for the home, if not paid back, will result in less inheritance for Fran as testified to by her mother.

The court found Michels needed rehabilitative spousal support:

12. The Court finds Fran has been disadvantaged by the marriage to Ron. Ron throughout the marriage has controlled the finances and has placed the family in a situation of debt. Such debt is with the family even though Fran’s family helped to finance the home. The Court finds Fran will need a period of support to recover and be able to become self-supportive.

[¶ 10] From our review of the entire record, we conclude the trial court’s property distribution and spousal support award are not clearly erroneous.

b. Child Custody

[¶ 11] Reineke contends the trial court’s award of primary physical custody of the parties’ teenage children to Michels is clearly erroneous.

[¶ 12] “We exercise a limited review of child custody awards in divorce cases.” Schmidt v. Schmidt, 2003 ND 55, ¶ 5, 660 N.W.2d 196. Under N.D.C.C. § 14-09-06.1, a trial court must award the custody of an unmarried minor child “to a person ... as will, in the opinion of the judge, promote the best interests and welfare of the child.” In making an initial custody determination, the court must determine a child’s best interest and welfare by considering the following factors, when applicable, under N.D.C.C. § 14-09-06.2(1):

a. The love, affection, and other emotional ties existing between the parents and child.
b. The capacity and disposition of the parents to give the child love, affection, and guidance and to continue the education of the child.
c. The disposition of the parents to provide the child with food, clothing, medical care, or other remedial care recognized and permitted under the laws of this state in lieu of medical care, and other material needs.
d. The length of time the child has lived in a stable satisfactory environment and the desirability of maintaining continuity.
e. The permanence, as a family unit, of the existing or proposed custodial home.
f. The moral fitness of the parents.
g. The mental and physical health of the parents.
h. The home, school, and community record of the child.
i. The reasonable preference of the child, if the court deems the child to be of sufficient intelligence, understanding, and experience to express a preference.
j. Evidence of domestic violence-
k. The interaction and interrelationship, or the potential for interaction and interrelationship, of the child with any person who resides in, is present, or frequents the household of a parent and who may significantly affect the child’s best interests. The court shall consider that person’s history of inflicting, or tendency to inflict, physical harm, bodily injury, assault, or the fear of physical harm, bodily injury, or assault, on other persons.
l. The making of false allegations not made in good faith, by one parent against the other, of harm to a child as defined in section 50-25.1-02.
m. Any other factors considered by the court to be relevant to a particular child custody dispute.

“A custody determination is a finding of fact that will not be set aside on appeal unless it is clearly erroneous.” Schmidt, 2003 ND 55, ¶ 5, 660 N.W.2d 196. “A trial court’s findings of fact are presumptively correct, and we view the evidence in the fight most favorable to the findings.” Id.

[¶ 13] Here, the trial court found, with regard to factor c:

Allegations have been made there is not sufficient food in the home of Fran. No proof other than statements made by [the daughter] to Ron were presented to this court. Fran has been the parent who has taken care of the needs of the children such as doctors appointments, cooking and other needs of the children.

With regard to factor i, the court found:

The parties stipulated that [the daughter] desires to five with Ron. The Court looks at the actions taken by Ron in involving [the daughter] in these proceedings as inappropriate and discounts [the daughter’s] desires because of these actions. The court views [the daughter’s] relationships with adults through Ron and her actions in taking photos of the home as inappropriate. The court discounts the desires of [the daughter] in determining custody.

Thus, the court implicitly found that consideration of factors c and i favored Mi-chels. The court specifically found that consideration of factors b, d, e, f, k, and m favored Michels. The court specifically found factors g and l favored neither. The court found there was no domestic violence. The court did not find either party was favored by consideration of factors a and h. The court did not find that consideration of any factor favored Reineke.

[¶ 14] From our review of the record, we conclude the trial court’s custody determination is not clearly erroneous.

c. Child Testimony

[¶ 15] Reineke contends the court erred in refusing to allow the children to testify.

[¶ 16] Under N.D.C.C. § 14-09-06.2(1)(i), one of the factors the court must consider in making a child custody determination is “[t]he reasonable preference of the child, if the court deems the child to be of sufficient intelligence, understanding, and experience to express a preference.” “Generally, a trial court has wide discretion regarding the examination of witnesses, and, under appropriate circumstances, a court may refuse to allow a witness to testify.” Fargo Women’s Health Org., Inc. v. Larson, 391 N.W.2d 627, 630 (N.D.1986). Under N.D.R.Civ.P. 61, “[n]o error in either the admission or the exclusion of evidence ... is ground for granting a new trial or ... otherwise disturbing a judgment or order, unless refusal to take such action appears to the court inconsistent with substantial justice.”

[¶ 17] The legislature has determined that fourteen-year-old children are capable of acting responsibly in a variety of matters. See, e.g., N.D.C.C. § 14-10-17 (“Any person of the age of fourteen years or older may contract for and receive examination, care, or treatment for sexually transmitted disease, alcoholism, or drug abuse vfithout permission, authority, or consent of a parent or guardian.”); N.D.C.C. § 27-20-34 (prosecution of a child of fourteen or more years of age for delinquent conduct designated a crime or offense may be transferred from juvenile court to another court); N.D.C.C. § 30.1-27-03 (“A minor of fourteen or more years may prevent an appointment of the minor’s testamentary guardian from becoming effective, or may cause a previously accepted appointment to terminate.”); N.D.C.C. § 30.1-27-06 (“The court shall appoint [as guardian] a person nominated by the minor, if the minor is fourteen years of age or older, unless the court finds the appointment contrary to the best interests of the minor.”); N.D.C.C. § 47-24.1-14 (on petition of a minor who has attained the age of fourteen years, a court may order a custodian of the minor’s property to deliver or pay to the minor so much of the custodial property as the court considers advisable); N.D.C.C. § 47-24.1-18 (a minor who has attained the age of fourteen years may designate a successor custodian if none has been designated, and may petition the court to remove a custodian and to designate a successor custodian). Thus, there is a legislative policy that children of the age of those involved in this case can and do make significant decisions in their fives, which courts must consider in determining children’s custody preferences, and in making custody decisions.

[1118] Although N.D.C.C. § 14-09-06.2(1) only requires a court to consider a child’s reasonable custodial preference, without guaranteeing a right to testify, we conclude the trial court abused its discretion by refusing to allow the fourteen and seventeen-year-old children in this case to testify, without first assessing whether the children were of sufficient intelligence, understanding, and experience to express a preference.

[¶ 19] Although we have concluded the trial court abused its discretion in refusing to allow the children to testify without such an assessment, we do not reverse the court’s custody determination, because the court assumed the daughter preferred to live with her father in making its determination, and, under the trial court’s analysis, consideration of the statutory factors overwhelmingly favored Michels.

d. Custody Investigator

[¶ 20] Reineke contends the trial court erred in denying his request for appointment of a custody investigator. The appointment of a custody investigator under N.D.C.C. § 14-09-06.3 or a guardian ad litem under N.D.C.C., § 14-09-06.4 is committed to the trial court’s discretion. Green v. Green, 1999 ND 86, ¶ 9, 593 N.W.2d 398. We are not persuaded that the trial court abused its discretion in denying-Reineke’s request for appointment of a custody investigator.

Ill

Michels’s Cross-Appeal

a. Spousal Support

[¶ 21] Michels contends “[a]n award of rehabilitative spousal support in the amount of $300.00 per month for four years, or until Fran remarries, is clearly erroneous.”

[f 22] Michels earns about $19,000 per year and Reineke earns about $32,000 per year. The evidence shows neither party is likely to earn significantly more money in their present positions. While the award of $300 per month is not clearly erroneous, we are not certain of the rationale underlying the trial court’s decision to end spousal support after four years. We have “recognized permanent spousal support as an appropriate remedy to ensure the parties equitably share the overall reduction in their separate standards of living.” Sommers v. Sommers, 2003 ND 77, ¶ 16, 660 N.W.2d 586 (quoting Sommer v. Sommer, 2001 ND 191, ¶ 14, 636 N.W.2d 423). When there is a substantial disparity in divorcing parties’ incomes, a permanent support award may be appropriate. Sommers, at ¶ 17. “While we have not endorsed the equalization of income between divorcing spouses as a measure of spousal support,” id., this Court upheld such an award in Glander v. Glander, 1997 ND 192, ¶ 18, 569 N.W.2d 262. Although “the trial court would not have erred in awarding permanent spousal support or rehabilitative support without reduction,” Sommers, at ¶ 18, we conclude the award was not clearly erroneous.

[¶ 23] We further conclude, however, that the court should have retained jurisdiction for possible modification of the spousal support obligation.

If trial courts find no immediate need for awarding permanent spousal support, they should retain jurisdiction to do so beyond a temporary award, when facing uncertainty about the need for permanent support. This will further the interests of a spouse potentially in need of support on a permanent basis by leaving the award open for later modification.

van Oosting v. van Oosting, 521 N.W.2d 93, 101 (N.D.1994). With her multiple sclerosis, much lower income than Rei-neke, and slim chance of substantially increasing her income in her present position, Michels clearly is “a spouse potentially in need of support on a permanent basis.” Id. We, therefore, direct the trial court to modify the judgment on remand to retain jurisdiction to award spousal support in the future, should subsequent circumstances demonstrate a need for modification of the support award.

b. Attorney Fees and Costs

[¶ 24] Michels contends the trial court abused its discretion in not awarding her attorney fees under N.D.C.C. § 14-05-23. “An award of attorney fees in a divorce action under N.D.C.C. § 14-05-23 is within the sound discretion of the trial court and will not be set aside absent an abuse of discretion.” Kautzman v. Kautzman, 1998 ND 192, ¶ 32, 585 N.W.2d 561. “The principal factors for consideration in awarding attorney fees in a divorce action are the parties’ needs and ability to pay.” Id. “The trial court may also consider whether one party’s actions unreasonably increased the time spent on the dispute.” Id. Considering the disparity in the property distribution, Michels’s needs, and Reineke’s ability to pay, in light of his needs and his child support and spousal support obligations, we conclude the trial court did not abuse its discretion in failing to award Michels attorney fees.

IV

[¶ 25] The judgment is affirmed and the matter is remanded to the trial court for modification of the judgment to retain jurisdiction over spousal support.

[¶ 26] GERALD W. VANDE WALLE, C.J., and DALE V. SANDSTROM, JJ., concur.

NEUMANN, Justice,

concurring and dissenting.

[¶ 27] I concur in almost all of the majority’s opinion. The only exception is paragraph 18, the majority’s holding that it is, as a matter of law, error not to permit fourteen and seventeen-year-old children to testify regarding custody if called as witnesses.

[¶ 28] Most children experiencing the upheaval of divorce would prefer that the parents find a way to resolve their differences, drop their divorce, and live happily ever after in the same house with one another and with their children. Children desperately want — desperately need — the love of both parents in the midst of such great upheaval. Asking them to choose one parent over the other in such a situation is barbaric. Subjecting their children to such trauma merely for the sake of victory is a clear indication of the strength of the self-centered madness that engulfs too many divorcing parents. Our courts should do as much as possible to discourage such madness and the resulting trauma.

[¶ 29] I realize there are cases in which a child’s strongly held, well-founded opinion on custody should be expressed to the courts, particularly where there has been some form of genuine mistreatment or abuse. Fortunately, such cases are still the exception, not the rule, and clearly such facts were not present in this case. Here, the trial court explicitly found the appellant had inappropriately attempted to recruit the children to his side of the battle. The trial court cited this inappropriate manipulation of the children as the basis for its decision not to hear the children’s testimony.

[¶ 30] This Court’s failure to recognize the abusive nature of such manipulative exploitation encourages short-sighted parents to traumatize their children by attempting to recruit them in the parents’ self-centered battle. I cannot fault a trial court for trying to discourage such behavior, and I cannot join that part of the majority’s opinion finding such fault.

[¶ 31] WILLIAM A. NEUMANN and MARY MUEHLEN MARING, JJ., concur.

MARING, Justice,

concurring and dissenting.

[¶ 32] I concur in the majority opinion with the exception of that part holding the trial court abused its discretion when it refused to allow the children of the parties to testify as to their preferences and other matters and that part holding the trial court did not err when it failed to award permanent spousal support.

[¶ 33] The majority opinion concludes the trial court abused its discretion by refusing to allow the children to testify “without first assessing whether the children were of sufficient intelligence, understanding, and experience to express a preference.” Competency of a person to be a witness is to be determined by the trial court. See State v. Oliver, 78 N.D. 398, 49 N.W.2d 564, 574 (1951). The majority recognizes the trial court has broad discretion in not only the admission of evidence, but the refusal to allow a witness to testify. See Fargo Women’s Health Org., Inc. v. Larson, 391 N.W.2d 627, 630 (N.D.1986).

[¶ 34] Under N.D.C.C. § 14-09-06.2(l)(i), “[t]he reasonable preference of the child, if the court deems the child to be of sufficient intelligence, understanding, and experience to express a preferenee[,]” must be one of the factors the court considers in a custody determination. Therefore, in the context of the statute, the trial court’s determination of whether the child is competent to be a witness entails an analysis of whether the child is of “sufficient intelligence, understanding, and experience” to express a preference for one parent over the other parent.

[¶ 35] In the present case, an interim custody order was sought and Reineke offered, at that time, affidavits signed by the children to support his position. Judge Riskedahl ordered that the mother, Michels, receive interim custody and stated:

The record also establishes that the defendant has engaged in a pattern of intimidating and threatening behavior towards the plaintiff, especially since the initiation of the divorce process. At one point he had the locks on the house changed, and effectively “locked out” the plaintiff for several days.
The record of the case suggests that the defendant, although hard working and certainly financially supporting his family, has exercised a pattern of controlling behavior towards his wife and children. The “style of conduct” exhibited by the defendant indicates to the Court that it should not give considerable weight to the affidavits of the children, indicating they prefer that custody be placed with their father. It appears that the defendant’s method of dealing with people would be such that the children would be in an awkward and uncomfortable situation if they tended to disagree with their father. It is apparent that he has attempted to draw them into the circumstances of the marital discord and wishes to have them “take sides” in support of him. The Court also concludes that the way in which the defendant has exposed his children to this extra-marital affair does not reflect a concern on his part for their best interests.

Judge Romanick, who ultimately tried this case, noted in his order denying the appointment of a custody investigator that he had reviewed the documentation filed with the interim order and Judge Riskedahl’s interim order before arriving at his decision on the motion.

[¶ 36] At trial, the trial court delayed its ruling until it had heard a full day of testimony and then invited each party to make an offer of proof why the court should allow the children to testify. After considering the evidence that Reineke’s counsel said would be offered by the fourteen-year-old daughter, the court concluded that the daughter would basically testify, “I want to live with Dad.” No offer of proof was made as to the testimony of the minor son. See N.D.R.Ev. 103(a)(2); Wagner v. Peterson, 430 N.W.2d 331, 332 (N.D.1988) (holding without an offer of proof, die court cannot determine if the exclusion of the testimony was prejudicial). Further, Reineke never requested that the court interview the children in chambers.

[¶ 37] The trial court found Michels stipulated that the minor daughter preferred i:o live with Reineke. The preference of the minor child was, therefore, in evidence. Reineke never makes it clear on the record or in his brief what other testimony by the minor daughter was relevant to the court’s consideration of custody or visitation. Both on the record and in his brief, there are only general statements by Reineke’s counsel that the minor child’s testimony “would have collaborated their father’s testimony, counteracted the testimonies of the mother’s witnesses and would have provided imperative insight into the relationship between the children and their mother.”

[¶ 38] The trial court’s findings clearly indicate that it concluded the fourteen-year-old daughter was not of sufficient maturity, intellect, or experience to competently testify on any matters. The trial court found the minor daughter had been “acting out” since the divorce and “has had trouble following direction from her mother.... ” The trial testimony was that the minor daughter was acting unruly, yelling, throwing things, and breaking things, and that she was angry and full of emotion. Furthermore, the trial court found that Reineke had the children read all the allegations made by each party and had inappropriately drawn them into the divorce proceeding, including having the minor daughter take pictures of the home to further his position that the home was messy. The trial court clearly determined the will of the minor daughter was being controlled by Reineke and concluded she was not of sufficient maturity to make an intelligent choice and be a competent witness.

[¶ 39] Although I believe it is preferable for a trial court to interview the children in chambers on the record with counsel for the parties present when deciding whether a child is of sufficient “intelligence, understanding, and experience” to state a preference, N.D.C.C. § 14-09-06.2(1)(i) does not require that procedure. Whether to interview a child to determine the child’s preference is a matter within the trial court’s discretion. See Tasker v. Tasker, 395 N.W.2d 100, 103 (Minn.Ct. App.1986); Paryzek v. Paryzek, 776 P.2d 78, 81 (Utah Ct.App.1989); Palmer v. Palmer, 138 Vt. 412, 416 A.2d 143, 144 (1980). Here, the record indicates the trial court heard evidence that went directly to the maturity of the minor daughter to be able to intelligently and independently testify. A court may refuse to consider a child’s preference if the child is not mature. McDowell v. McDowell, 2001 ND 176, ¶ 20, 635 N.W.2d 139. I believe that when the welfare of a child is involved, a trial court does not abuse its discretion if it assesses the child’s competence through evidence such as was introduced in this case, rather than through an interview.

[¶ 40] Furthermore, in this case, the photographs of the mother’s home taken by the daughter came into evidence and Reineke testified to things his minor daughter told him. The minor daughter's testimony would have been subject to an objection that it was cumulative.

[¶ 41] The majority string cites numerous statutes and appears to take the position that a fourteen-year-old child should be permitted to testify because she is fourteen. Our Court has never held the age of a child is the determinative fact in concluding whether a child is mature and has the capacity to make an intelligent choice in a child custody case. See Barstad v. Barstad, 499 N.W.2d 584, 588 (N.D.1993). In Palmer, 416 A.2d at 144, the Supreme Court of Vermont declined to agree that because a fourteen-year-old child is allowed by statute to select their guardian, children fourteen and older must be allowed to voice their preference regarding custody and visitation. The trial court refused to hear the desires of the fourteen and fifteen-year-old children. The Vermont Supreme Court held the trial court had not abused its discretion when the evidence supported the award of custody. “The decision to allow a child to testify as to custody preference is in the trial court’s discretion, and, absent a showing that it clearly abused its discretion, will not be placed in error.” Id.

[¶ 42] I am concerned the majority opinion fails to recognize that in custody disputes, children can be “victimized by the animosities of their parents.” Jordana v. Corley, 220 N.W.2d 515, 524 (N.D.1974) (Vogel, J., concurring). Also, “a child’s preference ... may, in some instances, be motivated by goals and ambitions which undermine the significance of that preference and may, in fact, be detrimental to the child’s best interests.” Alvarez v. Carlson, 524 N.W.2d 584, 590 (N.D.1994). Custody disputes are traumatic situations for children and subjecting them to stating a preference for one parent adds more trauma, especially if it involves testimony in open court. Irreparable injury to the parent-child relationship may result from such confrontation. Therefore, every effort should be made by the trial court when a child states a preference, to determine if the child’s preference is the result of undue influence by a parent. See Bar-stad, 499 N.W.2d at 588. Children during their minority often change their preference from one parent to the other. See Judith S. Waflerstein et al., The Unexpected Legacy of Divorce 116 (2000) (stating “In following these alliances over the years, I find that the vast majority are short-lived and can even boomerang. Children are capricious allies. They soon become bored or ashamed of their mischief. Not one alliance lasted through adolescence and most crumbled within a year or two.”).

[¶ 43] Under the facts of this case and where the children’s preference was stipulated to on the record, the trial court did not abuse its discretion by not holding an in-chamber interview of the children.

[¶44] I respectfully dissent also from that part of the majority opinion affirming the trial court’s award of rehabilitative spousal support in place of permanent spousal support. Our standard of review is clearly erroneous. Sommer v. Sommer, 2001 ND 191, ¶ 8, 636 N.W.2d 423. A trial court’s findings are clearly erroneous if there is no evidence to support its findings, they are induced by an erroneous view of the law, or even if there is some evidence to support its findings, we are left with a definite and firm conviction a mistake has been made. Id. I am of the opinion that the trial court erred in applying our law on rehabilitative and permanent spousal support to the facts of this case, and I am left with a firm conviction a mistake has been made.

[¶ 45] The trial court distinguishes between permanent spousal support and rehabilitative spousal support in its findings. It states that permanent spousal support is appropriate when the economically disadvantaged spouse cannot be equitably rehabilitated. Further, rehabilitative spousal support is an attempt to provide education, training, or experience that will enable the recipient to achieve “adequate” or “appropriate” self-support while improving her employment skills. The trial court also notes that “[s]pousal support is aimed at balancing the burdens and disadvantages created by the divorce.” The trial court found that Michels has been disadvantaged by the marriage to Reineke. However, the trial court errs in awarding only rehabilitative spousal support and finding that Michels will need “a period of support to recover and be able to become self-supportive.” The evidence does not support that Michels can be rehabilitated, is able to “recover,” or able to become “self-supportive.”

[¶ 46] We have distinguished permanent and rehabilitative spousal support:

There are two types of spousal support. Permanent spousal support is appropriate to provide traditional maintenance for a spouse who is incapable of rehabilitation. Rehabilitative spousal support, on the other hand, is awarded to provide a disadvantaged spouse time and resources to acquire an educational, training, work skills, or experience that will enable the spouse to become self-supporting.

van Oosting v. van Oosting, 521 N.W.2d 93, 100 (N.D.1994) (citations omitted).

[¶ 47] In van Oosting, the wife was 44 years of age, had no education beyond high school, had a limited work experience, suffered from Multiple Sclerosis, which was in remission, was depressed as a result of the divorce, and had to adjust to handling her own affairs. The trial court awarded the wife one year of spousal support to rehabilitate herself. Our Court held that the trial court’s award of rehabilitative support was clearly erroneous and we remanded directing the trial court to award permanent support subject to future modification. Id. at 100,101. We pointed out that under the Ruff-Fischer guidelines, the court is :o consider the health and physical condition of the parties. See Fischer v. Fischer, 139 N.W.2d 845, 852 (N.D.1966); Ruff v. Ruff, 78 N.D. 775, 52 N.W.2d 107, 111 (1952). We highlighted the significance the health and physical condition of the parties has in determining support and stated:

Our sister-state, Minnesota, is in agreement with our holdings emphasizing the importance of the health of the parties when awarding support....
The Minnesota legislature has not only codified the factors to be taken into account when awarding spousal support, but has also created a “presumption” for permanent spousal support when there is uncertainty as to its necessity. (Citation omitted.) This approach is helpful.

van Oosting, at 101.

[¶ 48] Under the facts of this case, permanent spousal support is necessary for the parties to equitably share in the burdens of the divorce. The marriage is of long duration, the parties have been married for 19 years and together two years prior to marriage, for a total of 21 years together. Michels is 48 years old and has Multiple Sclerosis, which is a progressive disease. The trial court found her Multiple Sclerosis could cause difficulties in the future concerning her ability to remain employed. Michels earns about $19,000 per year as a records clerk in a medical clinic and has completed two years of college. Her salary is approximately 60 percent of what Reineke earns as a truck driver for Waste Management, which is about $32,000 per year. In addition, he receives overtime on a regular basis.

[¶49] The trial court found that Rei-neke desired out of the marriage because he had started a relationship with someone else, that he had been a controlling spouse, and that he had been demeaning to Mi-chels in public. The trial court found the parties lived a middle income life. Although Michels received the home in the divorce, the trial court found it was in need of $11,000 of repairs, ordered Michels to pay the first mortgage, one-half of the second mortgage, and the entire $8,100 remaining on the loan from her parents to purchase the home.

[¶ 50] In its findings of fact, the trial court found Michels was “not expecting any significant raises in the near future and appears to have topped out as to work levels.” Accordingly, there is nothing in the evidence that Michels situation will improve, change, or that she will be able to “recover.” The only thing that may change, and for the worse not the better, is Michels’ Multiple Sclerosis, which the trial court noted “is a concern.” In light of Michels’ age, the fact she has “topped out as to work levels,” and her significant health problem of Multiple Sclerosis, rehabilitation is unlikely. Permanent spousal support is the appropriate remedy to ensure the parties equitably share the reduction in their separate standards of living. Under the majority opinion, the issue of spousal support is reserved and Michels, in four years, would have the burden of showing a material change in circumstances justifying a modification. Yet the trial court’s findings make it clear that it does not expect anything will change with respect to the parties’ financial situation. The trial court also found Reineke “does not expect any significant raises in the near future.” In order to modify an award of spousal support, there must be a showing of a material change in circumstances, which “is something substantially affecting the financial abilities or needs of a party.” Sommer, 2001 ND 191, ¶ 18, 686 N.W.2d 428 (citation omitted). Michels will be unable to make this showing unless her Multiple Sclerosis affects her ability to work in four years. Otherwise, her spousal support will end even though the parties’ finances remain unchanged and there remains no expectation for her to rehabilitate or “recover.”

[¶ 51] I would reverse and remand, directing the trial court to enter an award of permanent spousal support in the amount of $300 per month.

[¶ 52] I, therefore, concur in part and dissent in part.

[¶ 53] Mary Muehlen Maring

      . The December 2, 2002, findings of fact, conclusions of law, and order for judgment provides: "Fran shall be entitled to resume use of her maiden name Michels.” The December 5, 2002, judgment provides: "Fran shall resume use of her maiden name Mi-chels.” Therefore, we will refer to the parties as "Reineke”and “Michels.”


text:
    2003 ND 171
    STATE of North Dakota, Defendant and Appellee v. Sadik BECIRAJ, Plaintiff and Appellant.
    No. 20030030.
    Supreme Court of North Dakota.
    Nov. 13, 2003.
    Rehearing Denied Dec. 19, 2003.

      Mark Anthony Beauchene (submitted on brief), Wold Johnson, P.C., Fargo, for plaintiff and appellant.
    Tracy Jo Peters (submitted on brief), Assistant State’s Attorney, Fargo, for defendant and appellee.
   MARING, Justice.

[¶ 1] Sadik Beciraj (“Beciraj”) appeals a criminal judgment entered upon a jury verdict finding him guilty of conspiracy to commit arson. We affirm his conviction.

I

[¶ 2] A fire broke out in Beciraj’s Fargo, North Dakota, trailer in January of 2001. Neither Beciraj nor his wife were home at the time. Fire investigators determined the origin of the fire was the north wall of the master bedroom. Beciraj was charged, by information, with conspiracy to commit arson. Prior to trial, the State notified Beciraj that it may introduce evidence under N.D.R.Ev. 404(b).

[¶ 3] Before trial, Beciraj moved in li-mine to prevent the State from introducing evidence of a previous fire in Beciraj’s former home. The State argued it would use the evidence to show Beciraj’s knowledge that after the former fire he received money from the American Red Cross (“Red Cross”) and the community. The trial court denied the motion and directed Beciraj’s counsel to make appropriate objections during the trial.

[¶ 4] At trial, a fire investigator testified the trailer contained suspicious evidence, such as nearly empty closets with many empty hangers and pictures missing from picture frames. The fire investigator also testified that Beciraj immediately explained that he had received money after the previous fire and asked where the donations from the Red Cross and the community would be and which bank would have them this time. Beciraj’s counsel objected to the testimony citing N.D.R.Ev. 403 and argued the evidence of the former fire was too prejudicial because it also involved a fire. The trial court sustained the objection as to certain testimony and overruled it as to other testimony-

[¶ 5] In closing arguments, the State commented,

[The Becirajs] also knew that they would get money if the trailer burned down by funds that would be set up from the community or from the Red Cross. They had a previous fire and collected money from those sources from donations from different people to the tune of about $15,000. We’re not just talking a small amount of money. It was a significant amount of money they got before, and they knew that they would get that again.

Beciraj’s counsel did not object to these comments during closing arguments. A jury found Beciraj guilty, and the trial court sentenced Beciraj to three years imprisonment, with two years and 305 days suspended for a period of three years supervised probation.

[¶ 6] Beciraj appeals the criminal judgment entered upon a jury verdict finding him guilty of conspiracy to commit arson. On appeal, Beciraj’s only argument is that the State’s comments in closing argument were obvious error.

II

[¶ 7] In this case, defense counsel did not preserve the issue for appeal by objecting to the State’s comments, moving for a mistrial, or seeking a curative instruction from the trial court. Therefore, Beciraj must prove an obvious error under Rule 52(b) which states, “[ojbvious errors or defects affecting substantial rights may be noticed although they were not brought to the attention of the court.” N.D.R.Crim.P. 52(b). We exercise our authority to notice obvious error cautiously and only in exceptional circumstances where the defendant has suffered serious injustice. State v. McClean, 1998 ND 21, ¶ 9, 575 N.W.2d 200.

[¶ 8] We have adopted the framework the United States Supreme Court identified in United States v. Olano, 507 U.S. 725, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993) to analyze “plain error” under F.R.Crim.P. 52(b). See State v. Olander, 1998 ND 50, ¶ 14, 575 N.W.2d 658 (stating that while N.D.R.Crim.P. 52 differs from the federal rule by using the word “obvious” instead of “plain,” we will use the Olano analysis because it is largely consistent with our cautious application of N.D.R.Crim.P. 52(b)); see also N.D.R.Crim.P. 52, Explanatory Note (noting the use of obvious instead of plain). Under Olano, before an appellate court may notice a claimed error that was not brought to the attention of a trial court, the appellant must prove “(1) an error, (2) that is plain, and (3) affects substantial rights.” Olander, at ¶ 14.

Ill

[¶ 9] An obvious error is defined as a clear deviation from an applicable legal rule. Olander, 1998 ND 50, ¶ 14, 575 N.W.2d 658. On appeal, Beciraj argues the State made improper comments in its closing argument. Generally, this Court does not reverse a criminal conviction on the basis of inappropriate prosecutorial comments in closing argument unless the trial court clearly abused its discretion. State v. Thiel, 411 N.W.2d 66, 71 (N.D.1987).

[¶ 10] We conclude the trial court did not commit obvious error when it did not exclude the State’s comments in closing ar^piment regarding the prior fire. The State commented only on facts which the trial court had already admitted into evidence. The following exchange occurred during the testimony at trial:

A. At the outset of the interview before Inspector Crane or I asked any questions, Mr. Beciraj immediately inquired, “Where will the money be at?” And he followed up with, “Which bank will the money be in?” I was confused. Inspector Crane and I weren’t acquainted with what he was asking, and he proceeded to explain that following a previous house fire he had had, that the Red Cross and citizens in Fargo had donated moneys—
MR. EDINGER: Objection. Pretrial motion.
THE COURT: Overruled.
THE WITNESS: — and we determined that that was the basis of his inquiry was to — he was wondering where the funds would be donated in this instance. We did explain to him that we had no involvement in that particular aspect of his — his loss, and that we weren’t able to enlighten him on which bank the donated funds would exist.
Q. (Ms. Peters continuing) And did he tell you when this previous fire had taken place?
A. Yes, ma’am.
MR. MERTZ: Objection to relevance.
THE COURT: Sustained.
Q. (Ms. Peters continuing) Was there any indication that the previous fire was suspicious?
MR. MERTZ: Objection.
MR. EDINGER:- Objection. Pretrial motion.
THE COURT: Sustained.

Beciraj did not appeal the evidentiary rulings on the testimony on which the State based its closing argument comments. During closing argument, the party may refer to any evidence admitted at trial. The trial court did not commit obvious error because the State’s comments were based on admitted testimony and they did not encompass any facts not admitted into evidence.

IV

[¶ 11] Although Beciraj does not frame his issue to include a claim of erroneous evidentiary rulings concerning the testimony of the previous fire, he argues the testimony is inadmissible because its prejudicial effect substantially outweighs its probative value under N.D.R.Ev. 403. We conclude the trial court properly admitted the testimony regarding the previous fire.

[¶ 12] The State argues the purpose of the fire investigator’s testimony is to show knowledge or motive under Rule 404(b). Rule 404(b), N.D.R.Ev., which prohibits the use of character evidence except for certain purposes, provides:

(b) Other Crimes, Wrongs, or Acts. Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. However, it may be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident, provided that the prosecution in a criminal case shall provide reasonable notice in advance of trial, or during trial if the court excuses pretrial notice on good cause shown, of the general nature of any such evidence it intends to introduce at trial.

Under Rule 404(b), after reasonable notice to the defense,' the prosecution may use evidence of other crimes, wrongs, or acts to show motive, intent, preparation, plan, or knowledge. N.D.R.Ev. 404(b). The prosecution may not use the evidence to prove the character of a person in order to show conformity therewith. Id. Rule 404(b) “does not authorize automatic admission merely because the proponent advances a proper purpose for the evidence; instead, the relevance and probative value of the evidence must be demonstrated.” State v. Osier, 1997 ND 170, ¶ 4, 569 N.W.2d 441. Evidence offered under Rule 404(b) is subject to the test of Rule 403, which excludes relevant evidence if its probative value is substantially outweighed by its unfair prejudicial effect. N.D.R.Ev. 404(b); see also State v. Christensen, 1997 ND 57, ¶ 7, 561 N.W.2d 631 (stating that following the Rule 404(b) analysis, the trial court must finally determine if, under Rule 403, the probative value of the evidence is outweighed by the prejudicial effect).

[¶ 13] Under Rule 404(b), evidence of knowledge or motive is admissible. N.D.R.Ev. 404(b). During the motion in limine and trial, the State specifically stated the testimony was offered to prove motive or knowledge and not to show Beciraj’s propensity to set fires. The State, in its closing argument, stated Beeiraj knew he would receive money from the Red Cross or the community again for the loss of his property. The State’s closing argument referred to evidence that had been properly admitted under Rule 404(b) to show knowledge or motive for conspiracy to commit arson, and therefore, the trial court did not err in not excluding those comments.

[¶ 14] Evidence that Beeiraj discussed with the fire investigator receiving money from the Red Cross and the community when the previous fire destroyed his home and personal belongings establishes Beci-raj’s knowledge that he will again receive money if another fire destroys his property. Such knowledge is highly probative of a financial motive to conspire to commit arson. The trial court sustained Beciraj’s objection to evidence tending to show the prior fire may have been suspicious, thereby demonstrating its balancing of the probative value of the evidence versus its prejudicial effect, as required under N.D.R.Ev. 403.

[¶ 15] We conclude the trial court did not abuse its discretion when it admitted the testimony regarding the previous fire and did not commit obvious error by allowing the State to refer to that testimony in its closing argument.

V

[¶ 16] We affirm Beciraj’s judgment upon the jury verdict finding him guilty of conspiracy to commit arson.

[¶ 17] GERALD W. VANDE WALLE, C.J., WILLIAM A. NEUMANN, DALE V. SANDSTROM and CAROL RONNING KAPSNER, JJ., concur.