text:
    Donald G. STELZNER, et al., Relators, v. COMMISSIONER OF REVENUE, Respondent.
    No. C0-00-715.
    Supreme Court of Minnesota.
    Feb. 8, 2001.

      Regan & Vincent, PLC, Thomas M. Re-gan, Minneapolis, for Relators.
    Mike Hatch, Attorney General, Craig R. Anderson, Assistant Attorney General, Tax Litigation Division, St. Paul, for Respondent.
   OPINION

BLATZ, Chief Justice.

Relators Donald and Donna Stelzner appeal from the Minnesota Tax Court’s decision affirming an order of the Commissioner of Revenue assessing Minnesota state income taxes, penalties, and interest for each of the taxable years from 1987 through 1993. On appeal to the tax court, the Stelzners argued that they were domiciled in Nevada, not Minnesota, and raised federal constitutional issues challenging the tax assessment. In the alternative, the Stelzners argued that the commissioner should be equitably estopped from collecting the taxes, penalties, and interest and that they had shown reasonable cause to support abatement of late filing and late payment penalties. The tax court found that the Stelzners were nondomiciliary residents under Minn.Stat. § 290.01, subd. 7(2) (2000), the nondomiciliary resident statute. In addition, the tax court concluded that application of the nondomicili-ary resident statute to tax the Stelzners’ entire income does not implicate the Commerce Clause and rejected the Stelzners’ other constitutional challenges, equitable estoppel claim, and abatement arguments. In this appeal, the Stelzners assert that, as nondomiciliary residents, Minnesota’s taxation of their income earned primarily in interstate commerce violates the Commerce Clause of the United States Constitution. In the alternative, the Stelzners argue that good faith rebanee on their tax preparer to file all necessary returns constitutes reasonable cause to abate late filing and late payment penalties. We affirm.

The essential facts underlying this case are not in dispute. Donald and Donna Stelzner were born and raised in Minnesota and were married in Nevada in 1958. The Stelzners worked in various positions in the gaming industry and also engaged in acquiring, improving, and selling residential property in Nevada and Minnesota, including a residence located on West Calhoun Parkway in Minneapolis, Minnesota. The Stelzners resided there from 1983 until mid-1999, during which time the Stel-zners spent more than $400,000 remodeling and expanding the property. From 1983 through 1993, the Stelzners received homestead status for the West Calhoun Parkway property. During the 1987 through 1993 audit period, the Stelzners also occupied a studio condominium in Las Vegas, Nevada.

The Stelzners spent the majority of their time in Minnesota during the audit period, with Donald Stelzner spending approximately 300 or more days per year and Donna Stelzner spending more than 350 days per year. Nonetheless, the Stel-zners considered themselves residents and domiciliaries of Nevada and maintained Nevada drivers’ licenses and voter registration. An audit of the Stelzners’ 1984 tax return by the Internal Revenue Service determined that the Stelzners were domiciliaries of Nevada for federal tax purposes and allowed office and other “away from home” expense deductions for the West Calhoun Parkway property.

In the 1970’s, Donald Stelzner developed a foreign currency exchange business serving the casino industry in New Jersey, Illinois, Nevada, some Native American tribal lands, and the Canadian Province of Ontario. The resulting companies, Bond Mortgage Forex and Bond Mortgage New Jersey, are Nevada-based general partnerships with the Stelzners as the only partners. At their high point, the Stelzners’ business operation accounted for approximately 85 percent of the foreign currency exchange generated by the Nevada and New Jersey casino industry. Recently, competition from banks and exchange houses has significantly reduced the Stel-zners’ customer base.

Throughout the audit period, the Stel-zners’ income was generated primarily from this currency exchange business. Donald Stelzner traveled to client casinos, purchased the accumulation of client casinos’ foreign currency with U.S. cash or-cash equivalents, provided on-site inspection and verification, and arranged for transportation of the currency to foreign banks or other repositories. The Stel-zners monitored currency accumulations and rates and consolidated currency for movement to foreign banks and exchange houses at a favorable exchange margin. In the interim, currency was secured in bank vault facilities or on properties owned or leased by the Stelzners, including the West Calhoun Parkway property. During the audit period the Stelzners performed the monitoring functions primarily from Minneapolis. The actual currency transactions occurred primarily outside of Minnesota.

Because this mode of operation required Donald Stelzner to transport large amounts of U.S. and foreign currencies and negotiable instruments, safety was a major concern. The Stelzners believed that living outside the geographic area of client casinos increased their personal security. Minneapolis was chosen, in part, because the Stelzners believed that Minneapolis would be viewed as an inconvenient and unlikely location for routing foreign currency. The Stelzners also recognized that Minneapolis was well-suited for their business given the location of the Minneapolis/St. Paul airport and the Federal Reserve Bank. Based on these considerations of security and convenience, the Stelzners purchased the West Calhoun Parkway property and made modifications to provide additional security.

In the early 1980’s, the Stelzners hired Dale Korpi, an attorney and certified public accountant, to prepare their tax returns. Donald Stelzner gave Korpi two or three years of previous returns and explained that he and his wife were domiciled in Nevada, where no state income tax return is required, but had business purposes for being in Minnesota. As he had with previous tax preparers, Donald Stel-zner informed Korpi that the Stelzners had no Minnesota income and had never filed a Minnesota tax return. This representation was consistent with Minnesota tax law because, at that time, Minnesota’s definition of “resident” for individual income tax purposes excluded individuals domiciled in another state. MinmStat. § 290.01, subd. 7 (1986) (defining resident as “any individual domiciled in Minnesota and any other individual maintaining an abode therein * * * who shall not * * * have been domiciled outside the state”).

In 1987, the definition of “resident” was amended to include “any individual domiciled outside the state who maintains a place of abode in the state and spends in the aggregate more than one-half of the tax year in Minnesota * * * .” Act of May 28, 1987, ch. 268 art. 1, § 10, 1987 Minn. Laws 1044-45 (codified at Minn.Stat. § 290 .01, subd. 7(2) (2000)). Sometime during or after 1987, Korpi informed Donald Stel-zner of an amendment to the Minnesota income tax law that modified the definition of resident. Stelzner testified in the tax court proceedings that he intended to follow up on the comment that a change had occurred, but did not pursue it any further. Korpi continued to file only federal returns for the Stelzners.

After an audit of the taxable periods from 1987 through 1993, the commissioner concluded that the Stelzners were nondo-miciliary residents of Minnesota for each year of the audit period and issued an order finding the Stelzners liable for Minnesota income taxes, penalties, and interest for each of those years. The total amount assessed was $402,673.87. The Stelzners filed an administrative appeal, which the commissioner denied. The Stel-zners appealed that determination to the Minnesota Tax Court.

Before the tax court, the Stelzners challenged the commissioner’s assessment claiming that they were domiciliarles of Nevada, not Minnesota, and that application of Minn.Stat. § 290.01, subd. 7(2), the nondomiciliary resident statute, to tax their entire income violated the Commerce Clause, the Equal Protection Clause, and the Due Process Clause of the United States Constitution. In the alternative, the Stelzners argued the State should be equitably estopped from assessing the income taxes because the State provided false and misleading information and any penalties should be abated because the Stelzners could show reasonable cause for failing to file Minnesota income tax returns during the audit period.

Pursuant to the process outlined in Erie Mining Co. v. Commissioner of Revenue, 343 N.W.2d 261 (Minn.1984), the tax court referred the Stelzners’ federal constitutional issues to the Ramsey County District Court, and the district court subsequently transferred the issues back to the tax court for decision. The tax court affirmed the commissioner’s determination assessing income tax liability for the Stel-zners’ entire income during the audit period. Because the tax court determined the Stelzners were nondomiciliary residents under MinmStat. § 290.01, subd. 7(2), it was not necessary to reach the issue of whether the Stelzners were domiciled in Nevada. In addition, the tax court found that Korpi informed the Stelzners about changes to the Minnesota income tax law modifying the definition of “resident.” The tax court also concluded that application of the nondomiciliary resident statute to tax the Stelzners’ entire income did not implicate the Commerce Clause, and rejected the Stelzners’ other constitutional challenges, equitable estoppel claim, and abatement arguments. Following the trial, the tax court denied the Stelzners’ motion to amend the findings of fact and judgment.

The Stelzners now appeal on writ of certiorari arguing that, as nondomiciliary residents, Minnesota’s tax on their entire income generated primarily from transactions occurring outside of the state violates the Commerce Clause of the United States Constitution. In the alternative, the Stel-zners argue that late filing and payment penalties should be abated because the Stelzners can show reasonable cause for failing to file Minnesota individual income tax returns.

I.

First, the Stelzners contend that, as applied to them, Minnesota’s tax on nondomiciliary residents’ entire individual income violates the Commerce Clause because their entire income is subject to state tax, even though the income is derived primarily from transactions in interstate commerce. The tax court rejected the Stelzners’ Commerce Clause argument, and we review this legal conclusion of the tax court de novo. Nagaraja v. Comm’r of Revenue, 352 N.W.2d 373, 376 (Minn.1984).

The income tax obligation the Stelzners challenge results from the application of three statutes: Minn.Stat. § 290.01, subd. 7(2), which defines the Stelzners as nondo-miciliary residents; Minn.Stat. § 290.014, subd. 1 (2000), which provides that the entire net income of resident individuals will be taxed; and Minn.Stat. § 290.17, subd. 1(a) (2000), which excludes resident individuals from the allocation rules allowing apportionment of income among the states where the income was generated. The combined effect of these statutes subjects the Stelzners’ entire income to Minnesota state income tax. The Stel-zners argue this places a disproportionate state tax burden on income earned primarily through transactions occurring outside of Minnesota in violation of the Commerce Clause.

The Commerce Clause states that “[t]he Congress shall have power * * * To regulate commerce * * * among the several states.” U.S. Const. art. I, § 8, cl. 3. While the express language is an affirmative grant of power to Congress, the Commerce Clause has long been held to implicitly limit the states’ power to regulate interstate commerce. Quill Corp. v. North Dakota, 504 U.S. 298, 309, 312, 112 S.Ct. 1904, 119 L.Ed.2d 91 (1992). This negative implication, known as the “dormant” Commerce Clause, bars state action that discriminates against or places an undue burden on interstate commerce. Quill Corp., 504 U.S. at 310, 312, 112 S.Ct. 1904.

Commerce Clause challenges require a two-step inquiry. First, we must determine whether application of Minnesota’s nondomiciliary resident statute to tax the Stelzners’ entire income implicates the Commerce Clause. Luther v. Comm’r of Revenue, 588 N.W.2d 502, 510 (Minn.), cert. denied, 528 U.S. 821, 120 S.Ct. 66, 145 L.Ed.2d 57 (1999). If so, the second question is whether the Commerce Clause is violated. Luther, 588 N.W.2d at 510-11. Because states have wide latitude in establishing their taxation schemes, and statutes will be declared unconstitutional only when absolutely necessary, the Stelzners bear a heavy burden at each step of the inquiry. Id. at 508.

In order to show that the Commerce Clause is implicated, the Stelzners must demonstrate that Minnesota’s taxation of their entire income has a “substantial effect on an identifiable interstate economic activity or market.” Luther, 588 N.W.2d at 511. “The dormant Commerce Clause protects markets and participants in markets, not taxpayers as such.” Gen. Motors Corp. v. Tracy, 519 U.S. 278, 300, 117 S.Ct. 811, 136 L.Ed.2d 761 (1997). Therefore, the dormant Commerce Clause will not apply unless there is actual or prospective competition between entities in an identifiable market and state action that either expressly discriminates against or places an undue burden on interstate commerce. Tracy, 519 U.S. at 300, 117 S.Ct. 811. Furthermore, this impact must be more than merely incidental. United States v. Lopez, 514 U.S. 549, 559, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995).

We recently addressed a Commerce Clause challenge to Minnesota’s nondomi-ciliary resident statute in Luther v. Commissioner of Revenue, 588 N.W.2d at 510-12. In Luther, the taxpayer was a Florida domiciliary who owned a home in Minnesota and also spent time in Minnesota to attend board of directors’ meetings for a Minnesota corporation. Id. at 504-05. The commissioner determined that Luther was a nondomiciliary resident under Minn. Stat. § 290.01, subd. 7(2), because she owned a home in Minnesota and spent more than one-half of the tax year here. Luther, 588 N.W.2d at 505. We affirmed Luther’s status as a nondomiciliary resident and rejected Luther’s Commerce Clause argument that Minnesota’s nondo-miciliary resident statute taxed her right to interstate travel. Luther, 588 N.W.2d at 511-12. In upholding the application of the tax to her income we recognized that it was not Luther’s movement across state lines, but her worldwide net income that was being taxed because “through her substantial contacts with Minnesota, she availed herself of the many services, benefits, and protections provided to her by Minnesota.” Id. at 511. Conduct that occurred solely in Minnesota — her presence in the state for more than one-half the year and ownership of an abode in the state — triggered Minnesota income tax La-bility, and application of the nondomiciliary resident statute to Luther did not implicate the Commerce Clause. Luther, 588 N.W.2d at 512.

The commissioner contends that Luther is dispositive here, and the Stelzners’ income was taxed solely on the basis of their undisputed nondomiciliary resident status. As such, the level and location of the Stel-zners’ business activity is irrelevant, the tax does not substantially affect interstate commerce, and the Commerce Clause is not implicated. In contrast, the Stelzners argue that basing taxation on a taxpayer’s status as a Minnesota resident does not shield the tax from Commerce Clause scrutiny. The Stelzners also attempt to distinguish Luther, arguing that they are major participants in a significant and competitive multi-state and international market, while the only interstate activity in Luther was interstate travel. However, even if we were to accept this distinction, the Stelzners have failed to show how this application of the nondomiciliary resident income tax operates to discriminate against or unduly burden interstate commerce.

The Stelzners contend that the tax placed on income generated outside of Minnesota implicates the Commerce Clause because it burdens their ability to continue as major participants in a competitive interstate market. While the Stel-zners argue that Minnesota’s taxation of their entire individual resident income is out of proportion to the actual income-generating activities occurring in Minnesota, the Stelzners have not shown anything more than an incidental impact on their cost of doing business in interstate commerce. This is not sufficient evidence of either discrimination against or an undue burden on interstate commerce to implicate the Commerce Clause. Because we hold that the Stelzners have failed to show that the Commerce Clause is implicated here, we need not reach the question of whether Minnesota’s tax on the Stelzners’ entire income violates the Commerce Clause.

II.

Finally, the Stelzners argue that their penalties should be abated because they have shown reasonable cause for failure to file returns during the audit period. The commissioner has the discretion to abate penalty charges “if in the commissioner’s opinion the failure to timely pay the tax or failure to timely file the return is due to reasonable cause.” Minn.Stat. § 270.07, subd. 1(e) (2000). The tax court affirmed the commissioner’s determination of penalties and interest. In reviewing the tax court’s section 270.07 reasonable cause finding, we determine whether sufficient evidence exists to support the tax court’s decision. Fridlund Sec. Co. v. Minn. Comm’r of Revenue, 430 N.W.2d 154, 166 (Minn.1988).

The Stelzners contend their good faith belief that they were not required to file a Minnesota income tax return, combined with reliance on their tax preparer to prepare all necessary' returns, constitutes reasonable cause. In support, the Stelzners cite to United States v. Boyle, in which the United States Supreme Court determined that “[w]hen an accountant or attorney advises a taxpayer on a matter of tax law, such as whether liability exists, it is reasonable for the taxpayer to rely on that advice.” 469 U.S. 241, 251, 105 S.Ct. 687, 83 L.Ed.2d 622 (1985). The Stelzners argue Boyle applies because they relied on Korpi’s advice that a Minnesota return was not needed. While the Stelzners did not explicitly ask for and receive tax advice on this matter, they maintain that the “advice” took the form of Korpi’s conduct— specifically, his failure to prepare a Minnesota return when he knew the Stelzners’ circumstances and knew of the tax law change.

In further support of their reasonable cause argument, the Stelzners point to the Third Circuit Court of Appeals’ decision in Hatfried, Inc. v. Comm’r of Internal Revenue, 162 F.2d 628, 631-35 (3d Cir.1947), in which the court discussed reasonable cause language for penalties arising from failure to file a particular federal tax return. In Hatfned, the court determined that it was reasonable for a taxpayer to rely on an accountant’s advice. Id. at 635. In doing so, the court inferred that a misstatement on a tax return must have been “made on the accountant’s advice and in reliance upon that advice” because the regular accountant for the taxpayer had prepared the return knowing all the facts and circumstances. Id. at 632. This inference of reliance on the accountant’s advice allowed the court to reach the legal conclusion that the taxpayers had shown reasonable cause. Id at 635.

The Stelzners urge us to likewise conclude that they reasonably relied on Kor-pi’s “advice” in depending on him to file the necessary tax returns. However, a critical difference exists between this case and Hatfried. Here, the tax court found that Korpi “informed [the Stelzners] about amendments to the Minnesota income tax law modifying the definition of ‘resident’ for state income tax purposes.” Stelzner v. Comm’r of Revenue, No. 7005, — N.W.2d -, -, 2000 WL 37865, at *2 (Minn. T.C. Jan. 12, 2000). This factual finding defeats the Stelzners’ reasonable cause argument, because, as Korpi informed the Stelzners of a relevant law change, it was not reasonable for them to disregard Korpi’s statement and continue in the belief that no Minnesota return was necessary. Without reliance on their tax preparer’s advice, the Stelzners cannot make a reasonable cause argument under Boyle.

We will not disturb the tax court’s finding that Korpi informed the Stelzners of a relevant income tax law change if the record contains sufficient evidence to support the finding. F-D Oil Co. v. Comm’r of Revenue, 560 N.W.2d 701, 704 (Minn. 1997). Donald Stelzner was asked at trial whether there was “any further discussion of law changes in Minnesota, in or about 1987, relating to the legal definition of Minnesota residency.” In response, Donald Stelzner acknowledged that Korpi had mentioned a Minnesota law change that the two needed to discuss. Having heard Donald Stelzner’s testimony, the tax court found that Korpi informed the Stelzners in general terms of a modification to the term “resident” in the state income tax law. Stelzner, — N.W.2d -, -, 2000 WL 37865, at *2. The Stelzners advance a different interpretation of the testimony, arguing that Donald Stelzner’s response was seasoned by the audit and years of appeals on the matter, and only indicates that Donald Stelzner was aware that some law had been changed. However, “[t]he tax court is in the best position to assess the credibility and sincerity of witnesses.” F-D Oil Co., 560 N.W.2d at 706. Accepting this factual finding, there is sufficient evidence in the record to support the tax court’s determination that the Stelzners cannot show reasonable cause for their failure to file Minnesota state income tax returns during the audit period; therefore, penalty abatement is not warranted.

The Stelzners have failed to demonstrate that Minnesota’s taxation of their entire nondomiciliary resident income earned primarily from their multi-state and international business operation implicates the Commerce Clause; therefore, we affirm the decision of the tax court. Furthermore, there is sufficient evidence in the record to support the tax court’s determination that the Stelzners have not shown reasonable cause for penalty abatement and to affirm the commissioner’s assessment of penalties and interest.

Affirmed.

      . Because the Stelzners claim to be domiciled in Nevada, where there is no individual state income tax, there is no issue of multiple taxation in this case. While not applicable in the instant case, we note that Minn.Stat. § 290.06, subd. 22 (2000) protects nondomi-ciliary residents from multiple taxation by allowing a credit for income taxes paid to the domicile jurisdiction to offset Minnesota income tax liability.


source: Caselaw Access Project

author: BLATZ, Chief Justice. PAGE, J.,

license: Public Domain

text:
    Tammara Stimpert SCHONS, et al., Petitioners, Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Respondent.
    No. C6-99-1246.
    Supreme Court of Minnesota.
    Feb. 8, 2001.

      Grannis & Hauge, P.A., Michael J. Dwyer, Virginia A. Dwyer, Eagan, for Appellants.
    Meagher & Geer, P.L.L.P., Katherine A. McBride, Minneapolis, for Respondent.
    Schwebel, Goetz & Sieben, P.A., Sharon L. Van Dyck, Minneapolis, for Amicus Curiae Minnesota Trial Lawyers.
   OPINION

BLATZ, Chief Justice.

In this case, we are required to determine the proper application of Minn.Stat. § 65B.49, subd. 3a(5) (2000), of Minnesota’s No Fault Automobile Insurance Act (the “No Fault Act”) to the underinsured motorist (UIM) benefits claim of a passenger injured in an automobile accident involving two negligent drivers. Appellant Tammara Stimpert Schons seeks UIM benefits from her automobile policy with respondent State Farm Mutual Automobile Insurance Company because her damages exceed the UIM and liability benefits available to her under the negligent drivers’ insurance policies. Schons now challenges summary judgment for State Farm, arguing that the district court and court of appeals erred in concluding that Schons cannot recover UIM benefits from her own policy because her $50,000 UIM limit is no greater than her host driver’s $50,000 UIM limit. We affirm.

The facts of this case are not disputed. Schons was a passenger in Rebecca Vogl’s automobile on January 17, 1997, when drifting snow caused the automobile to collide head-on with Donna Bjorklund’s automobile. Schons suffered extensive physical injury and lost wages. Both drivers were negligent and both were underin-sured.

Vogl had automobile insurance through State Farm with $50,000 each in liability and UIM coverage. Bjorklund had $50,000 in liability coverage through Austin Mutual. Schons had $50,000 in UIM coverage through State Farm on an automobile not involved in the accident. In settlement of her bodily injury claims, Schons received $50,000 in liability benefits from Vogl’s State Farm policy and $48,000 in liability benefits from Bjorklund’s Austin Mutual policy.

Because Schons’ damages exceeded the two drivers’ liability limits, Schons sought UIM benefits from Vogl’s policy. Vogl’s insurer paid Schons $50,000 for Bjork-lund’s underinsured negligence, but Vogl’s policy excluded UIM coverage for Vogl’s negligence because her insurer had already paid liability benefits.

Despite this payment, Schons’ damages still exceeded the amount of liability and UIM benefits she received. Schons therefore sought $50,000 in additional UIM benefits from her own State Farm policy to cover Vogl’s underinsured negligence. State Farm denied coverage, claiming that section 65B.49, subd. 3a(5) of the No Fault Act prohibited Schons from receiving UIM benefits under her own policy because she had received maximum benefits from Vogl’s policy and because the $50,000 UIM limit on Schons’ policy did not exceed Vogl’s $50,000 UIM limit. Schons then filed suit against State Farm in Lyon County District Court. The parties brought cross-motions for summary judgment. The district court agreed with State Farm’s reasoning and granted its summary judgment motion while denying Schons’. The court of appeals affirmed in Schons v. State Farm Mutual Automobile Insurance Co., 604 N.W.2d 125, 128 (Minn.App.2000).

I.

On appeal from summary judgment, this court reviews whether there are any genuine issues of material fact and whether the lower courts erred in their application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). The facts here are undisputed, so the only issue is the correct application of the No-Fault Act. Statutory interpretation is a question of law subject to de novo review. Hibbing Educ. Ass’n v. Pub. Employment Relations Bd., 369 N.W.2d 527, 529 (Minn.1985).

Minnesota Statutes § 65B.49, subd. 3a(5) is the part of the No Fault Act that sets forth the order in which an injured party should seek UIM coverage from relevant policies. Thommen v. Ill. Farmers Ins. Co., 437 N.W.2d 651, 653 (Minn.1989). Section 65B.49, subd. 3a(5) states:

If at the time of the accident the injured person is occupying a motor vehicle, the limit of liability for uninsured and underinsured motorist coverages available to the injured person is the limit specified for that motor vehicle. However, if the injured person is occupying a motor vehicle of which the injured person is not an insured, the injured person may be entitled to excess insurance protection afforded by a policy in which the injured party is otherwise insured. The excess insurance protection is limited to the extent of covered damages sustained, and further is available only to the extent by which the limit of liability for like coverage applicable to any one motor vehicle listed on the automobile insurance policy of which the injured person is an insured exceeds the limit of liability of the coverage available to the injured person from the occupied motor vehicle.

Minn.Stat. § 65B.49, subd. 3a(5). The parties agree that as an unrelated passenger in Vogl’s motor vehicle, Schons is not “an insured” with respect to this vehicle under the No-Fault Act, and that Schons’ uncompensated damages remain greater than the $50,000 she seeks from her insurer. Therefore, Schons is entitled to receive “excess [UIM] insurance protection” from her policy “to the extent by which the limit of liability for like coverage applicable to any one [of Schons’ own motor vehicles] exceeds the limit of liability of the coverage available to [Schons from Vogl’s vehicle].” Id. This part of subdivision 3a(5) is the primary subject of this appeal.

Schons urges this court to reverse summary judgment for State Farm and hold that UIM benefits paid under Schons’ policy would not be “excess insurance protection” under subdivision 3a(5) because the UIM benefits paid under Vogl’s policy covered Bjorklund’s — not Vogl’s — underin-sured negligence. In essence, Schons argues that where, as here, there are two underinsured tortfeasors, the No-Fault Act allows the injured passenger to look to the host driver’s policy as primary coverage for the second driver’s underinsured negligence, and to the passenger’s own policy as primary coverage for the host driver’s underinsured negligence. Schons therefore claims that because subdivision 3a(5) is inapplicable, she may collect the full extent of her own UIM coverage regardless of whether her UIM limits exceed Vogl’s. This argument is unpersuasive.

First, we note that the reasoning set forth in the court of appeals cases cited by the parties does not directly address the issue before us. Schons relies on Davis v. American Family Mutual Insurance Co., 521 N.W.2d 366 (Minn.App.1994), and Lahr v. American Family Mutual Insurance Co., 528 N.W.2d 257 (Minn.App.1995), for the proposition that UIM coverage under Schons’ own policy is not “excess” to UIM benefits received from Vogl’s insurer for Bjorklund’s negligence. In Davis, the court of appeals held that subdivision 3a(5) did not prohibit an injured passenger in a single-car accident from recovering UIM benefits under his own policy where an exclusion in the driver’s policy prohibited the passenger from receiving UIM benefits from the driver. 521 N.W.2d at 369-70. Although the court reasoned that the passenger’s own UIM coverage was not “excess insurance protection” because the passenger did not receive primary UIM benefits from the driver, the court also noted that subdivision 3a(5) applies to an injured passenger “only when that person seeks UIM benefits under his or her own policy after already qualifying for UIM benefits from another source.” Davis, 521 N.W.2d at 369-70. Schons was involved in a two-car accident and received UIM benefits “from another source” — i.e., from Yogi’s policy. Consequently, the reasoning set forth in Davis does not apply to the issue before us.

The court of appeals’ reasoning in Lahr v. American Family Mutual Insurance Co. is equally inapplicable. The court held that subdivision 3a(5) did not prohibit Lahr, an injured passenger who received UIM benefits from her own policy for the host driver’s negligence, from recovering UIM benefits from her host driver’s policy for the second driver’s negligence. See Lahr, 528 N.W.2d at 260. Although Lahr potentially could recover UIM benefits both from her own policy and from the host driver’s policy, the UIM limits on Lahr’s policy exceeded those of the host driver’s policy by more than the amount Lahr received from her own insurer. Id. at 258. Thus, the court of appeals did not decide whether Lahr could recover from both policies if her own UIM policy limits did not exceed the limits of her host driver’s policy.

In affirming summary judgment for State Farm in the instant case, the court of appeals relied heavily on its decision in Jirik v. Auto-Owners Insurance Co., 595 N.W.2d 219 (Minn.App.1999), rev. granted and remanded on other grounds (Minn. Sept. 14, 1999). In Jirik, Danielle, a minor child, was injured when her mother’s automobile collided with a truck. Id. at 220. Danielle’s parents were divorced and Danielle apparently was insured under both parents’ policies. Id. Her mother’s policy paid UIM benefits to Danielle for the other driver’s underinsured negligence, but Danielle sought additional UIM coverage from her father’s policy for her mother’s underinsured negligence. Id. at 221. Although Danielle was “an insured” under her mother’s policy pursuant to the No-Fault Act, she argued that subdivision 3a(5) did not prohibit additional recovery because her father’s policy would provide primary UIM coverage, not excess insurance protection, for her mother’s underin-sured negligence. Jirik, 595 N.W.2d at 222-23; see Minn.Stat. § 65B.49, subd. 3a(5) (“[I]f the injured person is occupying a motor vehicle of which the injured person is not an insured, the injured person may be entitled to excess insurance protection* * *.”) (emphasis added). The court of appeals rejected Danielle’s argument, holding that she could not seek benefits from her father’s policy because she was an insured under the policy covering the host vehicle. Jirik, 595 N.W.2d at 223.

In Schons, the court of appeals cited Jirik as precedent for rejecting the claim that Schons sought primary, not excess, UIM coverage from her own insurer. Schons v. State Farm Mut. Auto. Ins. Co., 604 N.W.2d 125, 128 (Minn.App.2000). Jirik, however, did not involve the statutory language relevant here. Because the injured passenger in Jirik was “an insured” under the host driver’s policy, the second sentence of subdivision 3a(5) rendered her ineligible for UIM coverage beyond that available from the host driver. Minn.Stat. § 65B.49, subd. 3a(5). Thus, Jirik does not resolve the issue in Schons’ case, which centers on the third sentence of subdivision 3a(5).

Having determined that the reasoning set forth in the cases cited by the parties and lower courts does not address the specific question before us, we turn to subdivision 3a(5) itself. The function of subdivision 3a(5) is to connect an injured passenger’s total UIM benefit recovery to the limit specified for the motor vehicle the passenger occupied. Hanson v. Am. Family Mut. Ins. Co., 417 N.W.2d 94, 96 (Minn.1987) (recognizing that the 1985 amendments to the No-Fault Act “reflect a broad policy decision to tie underinsured motorist and other coverage to the particular vehicle involved in an accident”). An exception to this general rule occurs where an injured passenger has preselected a greater level of UIM coverage than the amount covering the host vehicle. Becker v. State Farm Mut. Auto. Ins. Co., 611 N.W.2d 7, 13 (Minn.2000). Because Schons’ and Vogl’s UIM limits are the same, Schons is not entitled to recover additional UIM benefits from her own insurer ,

This interpretation is supported by the third sentence of subdivision 3a(5), which specifically renders it irrelevant whether UIM benefits were paid for Vogl’s or Bjorklund’s underinsured negligence so long as Vogl’s UIM coverage was “available” to Schons. Minn.Stat. § 65B.49, subd. 3a(5) (mandating a comparison between the UIM coverage limits on any motor vehicle owned by the injured passenger and the “limit of liability of the coverage available to the injured person from the occupied motor vehicle.”) (emphasis added); see also Theodore J. Smetak, Underinsured Motorist Coverage in Minnesota: Old Precedents in a New Era, 24 Wm. Mitchell L.Rev. 857, 939 (1998) (“The [excess] coverage provision was designed to allow policy-holders the opportunity to pre-select the minimum level of insurance coverage that would be available for any given accident.” (emphasis added)). Here, it is undisputed that $50,000 of UIM benefits was available to Schons from Vogl’s policy, albeit for Bjorklund’s under-insured negligence.

Although Schons might have recovered more than $50,000 if she had preselected a higher level of UIM coverage, she could not reasonably expect to recover more than the $50,000 of UIM coverage for which she paid premiums. Schons received exactly $50,000 coverage from her host driver’s insurer. Regardless of whose underinsured negligence Vogfs UIM payments covered, the plain text of subdivision 3a(5) prohibits additional recovery under these facts because Schons’ UIM coverage limits do not exceed the limit of UIM coverage “available * * * from the occupied motor vehicle.” Consequently, the district court’s grant of summary judgment for State Farm is consistent with the text of subdivision 3a(5) and with the gqal of connecting a passenger’s recoverable UIM benefits to the host vehicle’s policy unless the passenger’s preselected level of UIM coverage exceeds the host vehicle’s UIM limits.

II.

Amicus curiae, the Minnesota Trial Lawyers Association, argues that subdivision 3a(5) is only a priority scheme that does not eliminate coverage available under Minn.Stat. § 65B.49, subd. 4a (2000). Subdivision 4a provides:

With respect to underinsured motorist coverage, the maximum liability of an insurer is the amount of damages sustained but not recovered from the insurance policy of the driver or owner of any underinsured at fault vehicle. If a person is injured by two or more vehicles, underinsured motorist coverage is payable whenever any one of those vehicles meets the [statutory] definition of un-derinsured motor vehicle * * *. However, in no event shall the underinsured motorist carrier have to pay more than the amount of its underinsured motorist limits.

MinmStat. § 65B.49, subd. 4a.

Although neither party discusses the effect of subdivision 4a on the instant case, amicus argues that subdivision 4a “clearly contemplates” the possible involvement of two or more vehicles in a single accident and only excuses an insurer from paying UIM benefits greater than the policyholder’s UIM limits. It is not disputed that Schons’ insurer is not being asked to pay more than Schons’ $50,000 UIM policy limits. Amicus therefore argues that, regardless of subdivision 3a(5), primary UIM coverage is available from Schons’ policy to cover Vogl’s underinsured negligence.

Despite this characterization of the relationship between subdivisions 3a(5) and 4a, subdivision 4a’s historical context indicates that the subdivision is largely irrelevant to the priority scheme in subdivision 3a(5). Prior to 1989 amendments, subdivision 4a stated:

With respect to underinsured motor vehicles, the maximum liability of an insurer is the lesser of the difference between the limit of underinsured motorist coverage and the amount paid to the insured by or for any person or organization who may be held legally liable for the bodily injury; or the amount of damages sustained but not recovered.

Minn.Stat. § 65B.49, subd. 4a (1988). Under this statutory format, an insurer liable for underinsured motorist benefits had a maximum liability of the policy’s UIM limits minus any amount already paid by or on behalf of the at-fault party. Johnson v. Am. Family Mut. Ins. Co., 426 N.W.2d 419, 422 n. 1 (Minn.1988). Thus, UIM policy limits were reduced by other benefits paid to an injured party even if the benefits paid were not UIM benefits. This was known as the “limits less paid” approach. Neuman v. State Farm Mut. Auto. Ins. Co., 492 N.W.2d 530, 533 (Minn.1992).

In 1989, subdivision 4a was amended to convert the “limits less paid” approach into an “add-on” approach. Neuman, 492 N.W.2d at 531 n. 3. To accomplish this goal, the statute as amended in 1989 entitles an injured party to the full extent of a policy’s UIM coverage without having to subtract the amount already paid in liability benefits. Minn.Stat. § 65B.49, subd. 4a (2000). The statute also makes UIM coverage payable, but not necessarily required of a particular insurer, if any single automobile is underinsured in a multi-vehi-cle accident. Id; see also 1 Michael K. Steenson, Minnesota No-Fault Automobile Insurance, 209 (2d ed., LEXIS® Law Publ’g Issue 9 1999). Finally, the statute ensures that a UIM insurer will not have to pay more than its policyholder’s UIM limits. See Minn.Stat. § 65B.49, subd. 4a. Despite amicus’ arguments that “subdivision 4a articulates the scope of the coverage available under any given policy,” subdivision 4a only ensures that an insurer will not have to pay more than the lesser of the injured party’s uncompensated damages or the UIM limits on the insured’s policy. Subdivision 4a is therefore separate from subdivision 3a(5)’s priority and limitation scheme.

Accordingly, we hold that subdivision 3a(5) prohibits Schons from recovering UIM benefits from her insurer. We also conclude that subdivision 4a does not entitle Schons to such recovery. The decision of the court of appeals is affirmed.

Affirmed.

PAGE, J.,

(concurring specially).

I concur in the result. I write separately because I believe that the court’s analysis is not only faulty, but unnecessary. This case involves a claim for UIM benefits under a policy of insurance issued to Schons for injuries received while an occupant in an underinsured motor vehicle involved in an accident with a second under-insured motor vehicle. Her injuries were caused by the negligence of both drivers involved in the accident. Schons received the occupied vehicle’s liability policy limits of $50,000 and $48,000 from the $50,000 liability policy covering the second vehicle. Schons also received $50,000 in UIM benefits from the occupied vehicle’s policy because of the second vehicle’s UIM status. Because the occupied vehicle’s insurance policy precluded Schons from receiving any UIM benefits based on its UIM status, Schons seeks to recover UIM benefits from a policy of insurance covering her own vehicle.

The court holds that Minn.Stat. § 65B.49, subd. 3a(5) (2000), precludes recovery under Schons’ insurance policy because the UIM limits under her policy do not exceed the limit of UIM benefits available from like coverage contained in the occupied vehicle’s policy. Section 65B.49, subdivision 3a(5), sets out when a person injured due to the negligence of the driver of an underinsured motor vehicle is entitled to excess insurance protection. Under that section, “excess insurance protection is limited to * * * the extent by which the limit of liability for like coverage * ⅜ ⅝ exceeds the limit of liability of the coverage available to the injured person from the occupied motor vehicle.” In this case, the occupied motor vehicle’s insurance policy precludes Schons from recovering UIM benefits for the occupied vehicle’s underin-sured status. Thus, there is no like coverage available for Schons’ automobile insurance policy to exceed and, therefore, the excess insurance protection provisions of Minn.Stat. § 65B.49, subd. 3a(5), are inapplicable to this case.

Moreover, the result reached by the court fails to meet the legislative purposes underlying the enactment of the No-Fault Act. Denying people like Schons UIM benefits from the policy covering their own vehicle does absolutely nothing to “relieve uncompensated victims from the economic stress caused by automobile accidents.” The act s other purposes are not implicated. Schons has not received any payment for the underinsured status of the vehicle she was occupying at the time of the accident. Further, there is no source for such a payment other than the UIM benefits Schons purchased for her vehicle. Therefore, there is no danger of a duplicate recovery were she to receive UIM benefits under her policy. Further, there is no danger that she would be overcompensated because her damages exceed the amount available under all possible sources of insurance coverage, including the UIM benefits being sought here. Finally, there is no risk that Schons’ UIM coverage would be effectively converted into liability coverage. Cf. Myers v. State Farm Mut. Auto. Ins. Co., 336 N.W.2d 288, 291-92 (Minn.1983) (upholding insurance policy language as properly preventing the conversion of UIM coverage into third-party liability coverage).

In addition to the legislative purposes being frustrated, it appears that the premium Schons paid for UIM coverage for her vehicle was wasted. As the occupant of a vehicle that had $50,000 in UIM coverage, she was entitled to and did receive the benefit of that coverage for the underin-sured status of the other vehicle involved in the accident. Although Schons purchased UIM coverage, she will receive no UIM benefits to compensate her for the injuries she received as a result of the negligence of the driver of the occupied underinsured vehicle. Thus, having paid the premium, Schons gets nothing for it under these circumstances.

Because section 65B.49, subdivision 3a(5), does not apply, I believe that Schons, on the facts presented by this case and the purposes underlying the No Fault Act, absent any other provision precluding recovery, is entitled to recover UIM benefits from her automobile insurance policy.

Analysis of subdivision 3a(5) is unnecessary, however, because the outcome of this case is controlled by Minn.Stat. § 65B.49, subd. 3a(6) (2000), which expressly precludes recovery on these facts. Subdivision 3a(6) provides:

Regardless of the number of policies involved, vehicles involved, persons covered, claims made, vehicles or premiums shown on the policy, or premiums paid, in no event shall the limit of liability for uninsured and underinsured motorist coverages for two or more motor vehicles be added together to determine the limit of insurance coverage available to an injured person for any one accident.

MinmStat. § 65B.49, subd. 3a(6). The language of this provision is clear and unambiguous. UIM coverages for two vehicles may not “be added together to determine the limit of insurance coverage available to an injured person for any one accident.” Id. Because Schons seeks to add together the UIM coverage from the occupied vehicle with that of her own vehicle to “determine the limit of insurance coverage available,” id., to her from the accident, subdivision 3a(6) operates to preclude recovery.

      . Relying on subdivision 3a(5)’s statement that excess insurance protection is available "only to the extent by which the limit of liability for like coverage applicable to [the insured's motor vehicle] exceeds the limit of liability of the coverage available * * * from the occupied motor vehicle” (emphasis added), Schons also argues that she is entitled to UIM benefits from her own insurer because the $50,000 her insurer would pay for Vogl's negligence is not like the $50,000 Vogl’s insurer paid for Bjorklund’s negligence. A plain reading of subdivision 3a(5) indicates, however, that "like coverage” simply refers to UIM coverage. Therefore, the statute only requires a comparison between UIM coverage limits on the host driver's vehicle and UIM limits on the passenger's own vehicle.

      . "However, if the injured person is occupying a motor vehicle of which the injured person is not an insured, the injured person may be entitled to excess insurance protection afforded by a policy in which the injured party is otherwise insured.” Minn.Stat. § 65B.49, subd. 3a(5).

      . The No-Fault Act’s stated purposes are "to (1) relieve uncompensated victims from the economic stress caused by automobile accidents, (2) prevent overcompensation of automobile accident victims, * * * and (5) prevent automobile accident victims from receiving duplicate recovery.” Scheibel v. Ill. Farmers

        Ins. Co., 615 N.W.2d 34, 37 (Minn.2000) (citing Minn.Stat. § 65B.42 (2000)).

      . We have recognized that subdivision 3a(6) was enacted in an effort to eliminate "stacking” of coverages. Broton v. W. Nat. Mut. Ins. Co., 428 N.W.2d 85, 88 (Minn.1988). "Stacking” refers to applying the coverage limits on multiple vehicles under which the injured person is insured to one accident, Wasche v. Milbank Mut. Ins. Co., 268 N.W.2d 913, 917 (Minn.1978), which is not .what Schons seeks. While the elimination of stacking may have been the purpose behind subdivision 3a(6), "The letter of the law shall not be disregarded under the pretext of pursuing the spirit.” Minn.Stat. § 645.16 (2000). By its terms, subdivision 3a(6) does much more than eliminate stacking. It expressly prohibits adding the limits of liability for any two or more motor vehicles to determine the limit of underinsured or uninsured coverage.


author: RUSSELL A. ANDERSON, Justice.

text:
    STATE of Minnesota, Respondent, v. Carlos Ondre SESSIONS, Appellant.
    No. CX-99-2187.
    Supreme Court of Minnesota.
    Feb. 8, 2001.

      John M. Stuart, State Public Defender, Marie Wolf, Asst. State Public Defender, Minneapolis, for Appellant.
    Michael A. Hatch, State Attorney General, St. Paul, Amy Klobuchar, Hennepin County Attorney, Paul R. Scoggin, Asst. Hennepin County Attorney, Minneapolis, for Respondent.
   OPINION

RUSSELL A. ANDERSON, Justice.

Appellant Carlos Ondre Sessions was convicted of first-degree murder in violation of Minn.Stat. § 609.185(8) (2000) (intentional murder in the course of committing a burglary) and was sentenced to life in prison. We consider whether the trial court erred by communicating with the jury outside of open court without appellant’s knowledge, consent or presence, and without making a contemporaneous record of jury communications and communications with counsel. We hold that the trial court erred by engaging in substantive communications with a deliberating jury outside of open court, without the appellant’s knowledge, consent or presence, and without the presence of appellant’s counsel and the prosecutor, but that, under the circumstances, the error was harmless beyond a reasonable doubt.

We also consider whether it was error for the trial court to accede to appellant’s specific request that the lesser-included offense of second-degree murder not be submitted for jury consideration. We hold that the trial court did not abuse its discretion in not submitting the lesser-included offense of second-degree murder for jury consideration. We also consider the sufficiency of the evidence and hold that the evidence was sufficient to support the jury’s verdict. We affirm.

On December 11, 1998, police officers found Lillian Enrooth’s body in a pool of blood at the bottom of the basement stairs in her South Minneapolis home. Earlier that morning, bank officials had become suspicious of a man trying to cash a check on the victim’s account and had notified police, who then conducted a welfare check at the victim’s home and discovered her body.

A forensic expert concluded that En-rooth’s death was the result of homicidal violence. The expert estimated that the time of death was within a few hours of 9 a.m. on December 11. According to the forensic expert, a combination of injuries, none immediately fatal, caused the death. The victim, who was 83 years old, suffered two sharp wounds to the back of her head, two slashes to her neck, a dislocated right elbow, a fractured left arm that broke the skin, a lacerated liver, four broken ribs, two fractures of her jaw, a spinal injury and fractured thyroid cartilage. One of the injuries to her face indicated that En-rooth was wearing dentures when she was struck. Her dentures were found on the second story of the home next to clumps of her hair.

Investigators found blood on the interior handles of Enrooth’s front door, front porch door, the basement door and doorknob, on the wall along the basement stairs and at the bottom of the stairs. Investigators also found bloody partial shoeprints leading up the stairs from the body, partial shoeprints on broken window glass in the back of the home — the suspected point of entry — and dresser drawers at the bottom of the main floor stairs. The victim’s purse and checks were missing.

About 9 a.m. on December 11, appellant went to the home of his cousin, Marquice Harrison, and asked her to cash some checks on the'account of a woman. Harrison testified, “He [appellant] said they belonged to someone who had no use for them.” Harrison directed appellant to a neighbor, Carmen Allen, who enlisted her boyfriend, Lorenzo Haynes, to assist with cashing the checks. Haynes cashed one of Enrooth’s checks. Appellant then approached Joseph Knoebel, a stranger to appellant, and asked Knoebel to help him cash a check. Knoebel cashed a check on Enrooth’s account for $599 and less than an hour later attempted to cash a second check for $2,500. He left the bank when a teller took the check to a bank manager after requiring that Knoebel place his thumbprint on the check. Knoebel returned to tell bank officials that he did not believe the check was “good.” Police arrested him and went to the victim’s home to conduct a welfare check, at which time they found her body.

Authorities located Haynes by entering his Minnesota identification number, which was on the check he cashed, through a police computer system. Haynes in turn identified Allen and Harrison to authorities. Harrison identified appellant to police and identified him in a photo lineup. Allen also identified appellant in a photo lineup and told police that appellant provided the check that Haynes cashed. Investigators then searched appellant’s apartment and found a pair of appellant’s athletic shoes with blood on them. Forensic experts concluded that the treads on appellant’s athletic shoes significantly matched the partial footprints on the stairs and broken glass in the victim’s home.

In addition to finding blood on appellant’s shoes, investigators found blood inside appellant’s girlfriend’s car. Appellant, who had his own set of keys for the vehicle, was driving the car December 11. One DNA test of the blood on appellant’s shoes, the car panel, door window, weather stripping, gearshift lever and console cover matched the victim’s DNA type and did not match appellant’s DNA type. In addition, the predominant, or strongest, DNA type on the steering wheel also matched the victim’s DNA type. A second DNA test revealed that the DNA type on the shoes, car panel, door window and gear shift matched the victim’s DNA type. The second test revealed a mixture of DNA from two individuals, with the predominant type matching the victim’s DNA type. A forensic scientist testified that 99.9989 percent of the population could be excluded as the source of the DNA on appellant’s shoes, the car panel, door window and gearshift lever and as the source of the predominant DNA type found on the console cover. The victim could not be excluded as a source.

The trial court read to the jury the parties’ stipulation that, if called, a forensic document examiner would testify that the checks that Haynes and Knoebel cashed were not written by Allen, Haynes or Knoebel. The expert also would testify that the writings on the face of the checks included numerous significant similarities to appellant’s writing samples and that it is highly probable that appellant wrote those checks.

Before instructing the jury, the trial court and the prosecutor agreed that the jury should be permitted to consider the lesser-included offense of second-degree murder. Appellant and his counsel requested that the trial court not instruct the jury on second-degree murder and the trial court acceded to appellant’s request.

After the jury retired to begin their deliberations, shortly before noon on October 21, 1999, the trial court asked counsel if they wished to be telephoned in the event that the jury requested further instructions and both counsel answered in the affirmative.

The jury’s guilty verdict was received in open court, on the record, at 12:08 p.m. on October 22 and appellant immediately was sentenced to the mandatory term of life in prison. No mention was made, and no record made, of written questions and answers exchanged the previous afternoon between the jury and court during jury deliberations. Seven months later, in anticipation of this appeal and on motion of the state’s appellate counsel, efforts were made to reconstruct the record from the memories of the trial court and trial counsel.

The trial court recalled telephoning each counsel after the jury submitted its questions, and that counsel agreed to the answers that the court proposed and also agreed that the answers could be written and delivered to the jury room. Trial counsel for the state agreed with the court’s recollection of events, but appellant’s trial counsel could not remember if the telephone conversation with the court took place. All agreed that appellant was not told of the jury’s questions nor consulted regarding the trial court’s proposed answers, and all agreed that appellant did not waive any right to be present.

In an effort to reconstruct the record, the court attached the original notes that contained the jury’s questions and the court’s answers. All of the notes were stamped “Filed, Hennepin County Court Administrator, 2:04 p.m., October 22, 1999.” One note, signed by the jury foreperson with time and date notations of 3 p.m., October 21, reads: “Please reiterate the explanation of ‘beyond a reasonable doubt.’ ” A second note, dated October 21, but without signature or time notation, reads, “Define reasonable doubt.” A third note, signed by the jury foreperson with time and date notations of 4:37, October 21, reads, “Can we see the transcript; Do we know when cheek 5206 was written to the water company?”

A police sergeant testified that check 5206, written to a water company, was the last check that Enrooth wrote. The check was not an exhibit at trial. The trial court’s written answer to the jury’s note regarding check 5206 was as follows: “There isn’t a transcript of any testimony. You must decide the case based upon your collective recollection of the evidence actually presented to you through the wit-nesse’s [sic] testimony, the exhibits and the stipulations.” The trial court signed the answer, noting the date and time, 5:50 p.m., October 21. The trial court’s recollection is that notes one and two concerning reasonable doubt were- one question. The court sent to the jury a typed answer, unsigned and without time or date notations, patterned after the instruction it gave jurors at the end of closing arguments. The court’s answer was taken verbatim from Criminal Jury Instruction 3.03:

Proof beyond a reasonable doubt is such proof as ordinarily prudent men and women would act upon in their most important affairs. A reasonable doubt is a doubt based upon reason and common sense. It does not mean a fanciful or capricious doubt, nor does it mean beyond all possibility of doubt.

10 Minn. Dist. Judges Ass’n, Minnesota Practice — Jury Instruction Guides, Criminal, CRIMJIG 3.03 (4th ed.1999).

Someone printed the word “WHIM” under the word “capricious” on the trial court’s typed answer. It appears that the trial court did not make a copy of any of its answers for the record before sending them into the jury room, but the trial court believes that a juror wrote “WHIM” on the instruction after it was delivered to the jury room. The trial court’s typed answer also is stamped “Filed, 'Hennepin County Court Administrator, 2:04 p.m., October 22,1999.” This suggests that the note was retrieved from the jury room and marked by the court administrator approximately two hours after the jury returned its verdict.

I.

We first consider whether the trial court erred in communicating with the jury outside of open court, without appellant’s knowledge, consent or presence, and without making a contemporaneous record of the communications with the jury or counsel. Through the Confrontation Clause, the Sixth Amendment to the United States Constitution grants a defendant the right to be present at all stages of trial. See Lewis v. United States, 146 U.S. 370, 374, 13 S.Ct. 136, 36 L.Ed. 1011 (1892); see also Minn.R.Crim.P. 26.03, subd. 1(1) (“The defendant shall be present * * * at every stage of the trial”). Responding to a deliberating jury’s question is a stage of trial. State v. Hudspeth, 535 N.W.2d 292, 295 (Minn.1995); see also Fed.R.Crim.P. 43; 3A Charles Alan Wright, Federal Practice and Procedure: Criminal 2d § 724 (1982) (“[Communications [occur] between the court and jury in the absence of the defendant and, not infrequently, his counsel. That such communications are entirely improper is settled.”). Thus, the general rule is that a. trial court judge should have no communication with the jury after deliberations begin unless that communication is in open court and in the defendant’s presence. State v. Schifsky, 243 Minn. 533, 543, 69 N.W.2d 89, 96 (1955). The court’s response to the jury in this case in appellant’s absence and without obtaining a waiver from appellant violated his Sixth Amendment right to be present and Rule 26.03, subd. 1(1).

In addition, the Criminal Rules require that a deliberating jury be conducted into open court whenever the jury requests a review of testimony or other evidence or desires to be informed on any point of law. See Minn.R.Crim.P. 26.03, subds. 19(2), 19(3). The instruction is mandatory (“shall be conducted to the courtroom”) and does not depend on the form or the substance of the court’s response. Because the trial court responded to the jury in writing outside of open court and in the absence of a waiver from appellant, the court violated Minn.R.Crim.P. 26.03, subds. 19(2) and 19(3).

The state characterizes the absence of appellant as “innocuous” and suggests that it is not unreasonable to, allow trial courts to render noncontroversial answers, after notice to counsel, “without the need to assemble the entire trial ensemble in the courtroom.” Our focus is not on the inconvenience of calling necessary personnel into open court, but on the public interest. “The public interest requires that parties to lawsuits or defendants on trial should have nothing to complain of or suspect in the administration of justice.” Schifsky, 243 Minn. at 543, 69 N.W.2d at 96. Where the rules explicitly require proceedings in open court, and, without defendant’s consent, those proceedings are not conducted there, the defendant and society generally lose confidence in the integrity of the proceeding.

Just as troubling is the court’s failure to place on the record any communications with counsel or jury during deliberations. We are left to review a record reconstructed seven months after trial using only recollections of seemingly brief conversations. Generally speaking, a reconstructed record cannot be as precise or comprehensive as a record made at the time of trial. At a minimum, the lack of a record compounds the lack of confidence society can have in the integrity of the proceedings. We caution district courts to make a contemporaneous record of each stage of trial, particularly a stage as delicate as communications with the jury and with counsel during deliberations. A record is critical to ensure adequate appellate review and a fair process.

Even if a defendant is wrongfully denied the right to be present at every stage of trial, a new trial is warranted only if the error was not harmless. Schifsky, 243 Minn. at 542, 69 N.W.2d at 96. If the verdict was surely unattributable to the error, the error is harmless beyond a reasonable doubt. State v. Juarez, 572 N.W.2d 286, 292 (Minn.1997). When considering whether the erroneous exclusion of a defendant from judge-jury communications constitutes harmless error, we consider the strength of the evidence, id. at 291, and substance of the judge’s response. State v. Kindem, 338 N.W.2d 9, 16-17 (Minn.1983).

The state’s evidence was strong. Nearly the entire population, but for the victim, can be excluded as a source of the blood found on appellant’s shoes and on the console panel, window and gearshift lever in the car he was driving on the day of the murder. Imprints of appellant’s shoes were consistent with prints found in the victim’s home. In addition, appellant had the victim’s checks at or shortly after the time of death, telling his cousin the checks belonged to someone who had no use for them.

A second factor in assessing harmless error in the context of judge-jury communication outside the defendant’s presence is the substance of the trial court’s responses. Id. at 16-17. The court did not issue any new instructions in its responses, and the instruction repeated did not favor the prosecution or defense. In response to the jury’s question regarding the date of the check to the water company, the court appropriately advised jurors that they were to decide the case based upon their own collective recollection of the evidence. As such, the court’s communications with the jury were not prejudicial to the rights of the appellant. See Schifsky, 243 Minn. at 546, 69 N.W.2d at 98. Therefore, we hold that the verdict was surely unattributable to the error and appellant is not entitled to a new trial.

II.

We next turn to the trial court’s decision not to submit the lesser-included offense of second-degree murder for the jury’s consideration. A trial court has discretion to determine whether to instruct the jury on lesser offenses, but must instruct on a lesser offense if the evidence warrants the instruction. State v. Lee, 282 N.W.2d 896, 899 (Minn.1979). A trial court instructs on a lesser offense if it is a lesser-included offense and if the evidence reasonably supports a conviction of the lesser degree and justifies a “not guilty” verdict of the greater offense. State v. Leinweber, 303 Minn. 414, 422, 228 N.W.2d 120, 125-26 (1975).

An exception to this rule arises if a defendant asks the trial court not to instruct the jury on a lesser-included offense and the court honors the request. A. defendant then is precluded from raising the issue on appeal. State v. Berry, 309 N.W.2d 777, 785 (Minn.1981).

Appellant does not dispute that he requested that the trial court not instruct the jury on the lesser-included offense and the' court honored the request. Appellant is precluded from raising the issue on appeal. Id.

III.

Appellant claims that the evidence presented is not sufficient to sustain a guilty verdict on first-degree murder (intentional murder in the course of committing a burglary). We review the evidence and any inference from it in a light most favorable to the verdict. State v. DeWald, 463 N.W.2d 741, 748 (Minn.1990). We assume that the jury believed the state’s witnesses and disbelieved testimony to the contrary. State v. Wahlberg, 296 N.W.2d 408, 411 (Minn.1980).

Blood consistent with the victim’s DNA type and inconsistent with appellant’s DNA type was on appellant’s shoes, car panel, door window and gearshift lever in the car appellant drove the day that the victim’s body was found. The forensic scientist testified that 99.9989 percent of the population, but not the victim, was excluded as the source of the DNA on the shoes, car panel, door window and gearshift lever and of the predominant DNA type on the console cover. Partial footprints leading away from the victim and on the broken window glass were consistent with the soles of appellant’s shoes. The injuries inflicted on the 90 pound woman and the distance over which they were inflicted evince an intent to kill her. Appellant possessed Enrooth’s checks within hours of her death and stated to his cousin that the owner of the checks no longer would need them. The evidence, viewed in a light most favorable to the verdict, supports the jury’s decision to convict appellant of first-degree murder.

We hold that the trial court committed error by engaging in substantive communications with a deliberating jury outside of open court, without the appellant’s knowledge, consent or presence, and without the presence of appellant’s counsel and the prosecutor, but that, under the specific circumstances, the error was harmless beyond a reasonable doubt. The court did not err in acceding to appellant’s request to not submit a lesser-included offense of second-degree murder for jury consideration. Finally, the evidence was sufficient to support the jury’s verdict.

Affirmed.

      . If differences arise as to the veracity of the record, the differences are submitted to the trial court and the record is made to conform. If anything material is omitted from or misstated in the record, the trial court on motion of a party or on its own initiative may have the omission or misstatement corrected and approve a supplemental record. Minn.R.Civ. App.P. 110.05; see also Minn.R.Crim.P. 28.01, subd. 2 ("Except as otherwise provided in these rules, the Minnesota Rules of Civil Appellate Procedure to the extent applicable shall govern appellate procedures in such cases.”).


author: G. BARRY ANDERSON, Judge

text:
    In re the Marriage of Jean K. HAEFELE, Petitioner, Respondent, v. Richard J. HAEFELE, Appellant.
    No. C4-00-670.
    Court of Appeals of Minnesota.
    Jan. 2, 2001.
    Review Denied Feb. 21, 2001.

      A. Larry Katz, Elizabeth Boleyn Bowling, Katz & Manka, Ltd., Minneapolis, MN, (for respondent).
    Kay Nord Hunt, Lommen, Nelson, Cole & Stageberg, P.A., Minneapolis, MN, (for appellant).
    Considered and decided by KLAPHAKE, Presiding Judge, HARTEN, Judge, and G. BARRY ANDERSON, Judge.
   OPINION

G. BARRY ANDERSON, Judge

Appellant argues the district court (1) abused its discretion by reopening the dissolution judgment and by improperly valuing and dividing marital property; (2) deprived him of due process of law by combining the proceeding to reopen the judgment with the evidentiary hearing on the property division questions; and (3) abused its discretion by awarding respondent need-based and conduct-based attorney fees. Because the evidence shows the parties’ marital termination agreement contained material mistakes, we affirm the district court’s decision to reopen the judgment based on that agreement. Because we conclude the combined reopening and property division proceedings deprived appellant of his due process rights, we reverse and remand for further proceedings and, if necessary, revaluation and redistribution of the marital property. In addition, we remand the issue of attorney fees.

FACTS

The parties, both age 55, were married in 1968 and have two emancipated children. Appellant is an attorney. Family law is a meaningful part of his practice. Respondent is an artist, and operates a small shop to display her work. Appellant actively marketed respondent’s artwork, and managed the parties’ finances and taxes. The parties owned outright, or had an ownership interest in, eight properties including the marital home. In the summer of 1997, the parties sought to dissolve their marriage and executed a martial termination agreement (MTA).

Appellant drafted the dissolution documents. Though respondent consulted with an independent attorney, that attorney ultimately did not help her with the dissolution. Appellant drafted the dissolution petition and named respondent as petitioner. Appellant did not, however, draft a required waiver of counsel document for his wife’s signature. Instead, appellant included a “Legal Advice” clause in the MTA.

The district court initially rejected the MTA because it contained ambiguous contractual terms concerning the parties’ future business dealings with each other and support of their adult children. After the parties amended the MTA, the district court accepted it and entered a judgment in August 1997.

In March 1998, respondent sought to reopen the judgment, claiming mistake and fraud. The district court ordered evi-dentiary hearings. The evidence showed differences between the property values assigned in contemporaneous sale, tax, and loan documents and the values assigned in the MTA. In addition, appellant had, for the purpose of the MTA, evaluated respondent’s art inventory. He concluded the inventory was worth $875,000. An art expert retained by respondent later appraised the inventory at $43,800. The district court found fraud and mistake warranting reopening the August 1997 judgment based on appellant’s representation of both his own and his wife’s interests and on the differences in property valuations. The district court revalued the assets and redistributed the marital property equally, awarding appellant and respondent each $723,400.

ISSUES

I. Did the district court abuse its discretion by reopening the dissolution judgment on the basis of fraud and mistake?

II. Did the district court deny appellant due process?

III. Did the district court abuse its discretion by ordering appellant to pay need-based and conduct-based attorney fees?

ANALYSIS

I.

Appellant first contends that the district court erred by reopening the dissolution judgment because the district court (1) misunderstood the law and (2) misapplied the law. This court will not disturb a district court’s decision to reopen a dissolution judgment absent an abuse of discretion. Kornberg v. Kornberg, 542 N.W.2d 379, 386 (Minn.1996).

A. District Court’s Reliance on Case Law

This court reviews purely legal issues, such as case law relied upon by the district court, de novo. Shirk v. Shirk, 561 N.W.2d 519, 521 (Minn.1997). Once a stipulation is merged into a judgment, the “sole relief’ lies in meeting the requirements of Minn.Stat. § 518.145, subd. 2 (1998). Shirk, 561 N.W.2d at 522. Minn. Stat. § 518.145, subd. 2 provides:

Reopening. On motion and upon terms as are just, the court may relieve a party from a judgment and decree * * * and may order a new trial or grant other relief as may be just for the following reasons:
(1) mistake, inadvertence, surprise or excusable neglect;
(3) fraud, whether denominated intrinsic or extrinsic, misrepresentation, or other misconduct of an adverse party. .

Id

Respondent brought a motion to reopen the August 1997 judgment and vacate the MTA, and the district court’s findings of fact expressly recognize Minn.Stat. § 518.145, subd. 2 as the controlling authority. Appellant claims, however, that the court erred by relying on additional authority that predated Shirk. First, the district court cited Tomscak v. Tomscak, 352 N.W.2d 464, 466 (Minn.App.1984) for the proposition that “courts can set aside a stipulation upon a showing of fraud, duress, or mistake.” Second, the district court relied on Ellesmere v. Ellesmere, 359 N.W.2d 48, 52 (Minn.App.1984) for the proposition that a court “may exclude a stipulation where there has not been a full disclosure and where the requisite waiver of counsel is absent.”

Despite relying on cases that predate Shirk, the district court has not erred in its legal analysis. Shirk “essentially recognized that the 1988 amendment [to Minn.Stat. 518.145] functionally overruled Tomscak and its progeny to the extent that those cases allowed vacation of stipulation-based dissolution judgments on grounds other than those listed in the statute.” Toughill v. Toughill, 609 N.W.2d 634, 640 (Minn.App.2000) (emphasis added). Thus, a district court does not err by relying on pre-Shirk or pre-amendment cases where the circumstances meet the statutory requirements of section 518.145. See Shirk, 561 N.W.2d at 521-22 (explaining that if circumstances meet the statutory requirements of Minn.Stat. § 518.145, reliance on pre-amendment case law is not error). We note that even a district court’s reliance on gre-Shirk or pre-amendment authority that is contrary to the statute is not reversible error if the error is harmless. See Minn.R.Civ.P. 61 (stating harmless error to be ignored).

Tomscak provides that courts may vacate a stipulation for fraud, duress, or mistake. Tomscak, 352 N.W.2d at 466. These are appropriate bases for reopening a judgment and decree under section 518.145, which provides for reopening where there has been “mistake * * * fraud * * * misrepresentation, or other misconduct of an adverse party.” Minn. Stat. § 518.145, subds. 1, 3. Duress, while not specifically listed in Minn.Stat. § 518.145, can nonetheless constitute other misconduct of an adverse party. Hestekin v. Hestekin, 587 N.W.2d 308, 310 (Minn.App.1998). The district court did not commit reversible error by placing limited reliance on Tomscak.

Ellesmere allows courts to exclude a stipulation where there has not been a full disclosure by an opposing party and where a party has not executed a waiver of counsel. Ellesmere, 359 N.W.2d at 52. In this case, the district court recognized that appellant, an attorney, drafted the MTA’s provisions and managed most of the finances of the parties. Respondent alleged appellant failed to prepare the required separate waiver of counsel for respondent’s signature (as is required by Minn. R.Gen.Prac. 306) and did not disclose accurate financial information to respondent. These acts could properly be characterized as “mistake,” “inadvertence,” “excusable neglect,” or even “misrepresentation” or “misconduct” — all bases for reopening judgments under section 518.145. The district court did not commit reversible error by relying on Ellesmere for the proposition that inadequate disclosure and waiver may justify reopening a judgment under Minn. Stat. § 518.145.

Appellant also disputes the district court’s finding that reopening turned on assessment of whether the MTA was unfair. Although unfairness is not the sole criteria for reopening, it is one of three elements of marital dissolution fraud. Kornberg, 542 N.W.2d at 387. The district court did not err by considering unfairness.

B. District Court’s Application of the Law

Appellant next asserts that the district court’s “reasons for vacation are not in accord with Minn.Stat. § 518.145, subd. 2,” and argues that the findings that may be read to support reopening are clearly erroneous.

We will not find an abuse of discretion unless the district court’s resolution of the matter “is against logic and the facts on record * * *.” Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn.1984) (citation omitted). Factual findings that resolve whether the judgment was the product of fraud, duress, or mistake will be upheld unless they are clearly erroneous. Hestekin, 587 N.W.2d at 310. “That the record might support findings other than those made by the trial court does not show that the court’s findings are defective.” Vangsness v. Vangsness, 607 N.W.2d 468, 474 (Minn.App.2000).

The district court made numerous findings showing that the MTA’s marital property values differed from the values shown on contemporaneous documents prepared for business or tax purposes. The district court found that, in valuing the marital property, appellant sometimes used tax records, sometimes relied on past appraisals, and sometimes tried to determine the present value of the property himself. Other times, he and respondent just agreed on what they thought the subject property was worth. A careful review of the record shows that these district court findings are not clearly erroneous.

The district court also found that appellant managed the parties’ properties, completed the parties’ joint tax returns, and involved himself in the marketing of appellant’s artwork. The district court found that appellant, without expert assistance, valued respondent’s artwork and assumed that she would sell each of the nearly 70,000 prints in her art inventory. Appellant appraised the prints at $875,000, but an art expert assessed their present value and testified the total worth was less than $45,000. The district court found respondent questioned, but relied on, appellant’s valuation methods because of his legal and business experience. These findings also have a basis in the record and are not clearly erroneous.

Appellant argues there is evidence that respondent read, understood, and signed the MTA, did not obtain neutral appraisals, and had access to the parties’ financial records. See Maranda v. Maranda, 449 N.W.2d 158, 166 (Minn.1989) (vacation of judgment supported where, among other things, wife denied access to parties’ finances). Appellant also argues that respondent testified she was familiar with the value of her art. See Bury v. Bury, 416 N.W.2d 133, 136 (Minn.App.1987) (owner of property is presumptively acquainted with its value).

But appellant’s financial records show that the values assigned to the property for purposes of the MTA sometimes differed significantly from nearly contemporaneous values assigned to the same property for business or tax purposes. See John v. John, 322 N.W.2d 347, 348 (Minn.1982) (vacation of judgment upheld where wife agreed to stipulation without being fully informed of the consequences). Respondent testified that she relied on appellant’s business and legal expertise when accepting the valuations as accurate and was led to believe she did not need to seek outside assistance. Appellant, on the other hand, testified that respondent was not pressured to accept the values and was not prevented from enlisting the help of others.

Where evidence relevant to a factual issue consists of conflicting testimony, the district court’s decision is necessarily based on the credibility of the witnesses. Hamilton v. Hamilton, 396 N.W.2d 91, 94 (Minn.App.1986). We give district courts broad discretion precisely because they are in the best position to determine which witnesses are credible and to weigh the evidence. See In re D.L., 486 N.W.2d 375, 380 (Minn.1992) (stating that “the trial court retains broad discretion because of its opportunity to observe the parties and hear the witnesses”). Here, the evidence supports the district court finding that there were material mistakes in the MTA property values. Appellant’s lack of art expertise, for example, may have caused a property value disparity greater than $800,000.

It is highly unlikely to the point of improbability that had respondent known the scope and magnitude of these mistakes she would have agreed to the MTA’s terms. This is no ordinary case of buyer’s remorse where a party to the MTA had second thoughts; we have here an MTA, and consequently a judgment, that is riddled with errors, inconsistencies and assumptions with no supporting evidence. On this record, the district court’s decision to vacate the MTA and reopen the dissolution judgment on the basis of mistake was not an abuse of discretion.

We do not, however, agree with the district court’s determination that that the facts support a finding of intentional fraud. Fraud, in a marital dissolution context, consists of (1) an intentional course of material misrepresentation or nondisclosure; (2) having the result of misleading the court and opposing counsel; and (3) making the property settlement unfair. Komberg, 542 N.W.2d at 387. Though the differences between the property values listed in the MTA and the values shown on contemporaneous financial documents are significant, some of those differences favor respondent and there is ho discernable pattern that suggests appellant intentionally altered values for dissolution purposes.

Instead, the record shows that a combination of carelessness, haste, use of improper valuation methods and lack of experience in valuing art may have contributed to the mistaken property valuations. We affirm the ruling of the district court to reopen the judgment and vacate the MTA based on material mistake pursuant to Minn.Stat. § 518.145 subd. 2.

II.

Appellant argues that the district court denied him due process, alleging that (1) the district court erred by combining the reopening and property division evi-dentiary hearings; (2) the district court’s findings show a bias against him; (3) the district court did not have the authority to stay the earlier judgment pending the motion hearing; and (4) the district court erred by reserving the issue of spousal maintenance because neither party raised it.

A. Proceedings

In a preliminary order, the district court ordered a hearing on mistake or misrepresentation, to be followed by hearings concerning the value and equitable distribution of property. At an early hearing, the district court explained that respondent first needed to show fraud or mistake before the court would take additional evidence concerning property valuation. After the art expert testified, the district court decided to conduct combined eviden-tiary hearings concerning property values in order to determine (1) whether to reopen the dissolution judgment and (2) how to value and divide the property. The court explained the trial format and appellant’s attorney did not object. Several scattered days of trial took place over the next year. Appellant now argues the combined evidentiary hearings confused various burden of proof standards and prevented him from effectively presenting property-value evidence. We agree and reverse and remand.

Due process requires that a hearing be “fair, practicable, and reasonable.” Saturnini v. Saturnini, 260 Minn. 494, 498, 110 N.W.2d 480, 483 (1961). Notice and hearing are the fundamental aspects of due process. Baker v. Baker, 481 N.W.2d 871, 873 (Minn.App.), rev’d on other grounds, 494 N.W.2d 282 (Minn.1992). The colloquies on November 3, 1998 and March 22, 1999 between the district court and appellant’s trial counsel show that appellant’s trial counsel became confused about exactly when the hearing changed from a hearing on the motion to reopen to an evidentiary hearing on the issue of property division. The distinction is critical because the burdens of proof differ.

A district court’s allocation of the burden of proof is subject to de novo review. See Snyder Elec. Co. v. Fleming, 305 N.W.2d 863, 867 (Minn.1981); Engelby v. Engelby, 479 N.W.2d 424, 426-27 (Minn.App.1992) (determining which party had burden of proof without deferring to trial court). For the purposes of reopening a dissolution judgment, the moving party bears the burden of proof. See Minn.Stat. § 518.145, subd. 2 (moving party must prove at least one of the statutory grounds for reopening by a preponderance of the evidence). In contrast, a district court’s decisions valuing and dividing marital property are made on the evidence submitted by both parties, but neither party bears an affirmative burden of proof. See generally Minn.Stat. § 518.58 (1998) (governing division of marital property). It is a common practice for each party to present expert testimony or appraisal evidence concerning the value of the property, after which the district court judges the weight and credibility of that evidence. See Kitchar v. Kitchar, 553 N.W.2d 97, 102 (Minn.App.1996) (addressing competing appraisals), review denied (Minn. Oct. 29, 1996); Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn.1988) (explaining that reviewing courts generally affirm a district court’s credibility determinations, since the district court is in the best position to assess witnesses).

In this case, the district court’s mid-trial decision to take evidence on property values before determining whether to reopen proceedings confused these standards and, understandably, appellant’s counsel. Our careful reading of the November 3, 1998 and March 22, 1999 hearing transcripts shows that, because the district court did not rule on respondent’s motion to reopen and vacate, appellant did not know when to cease rebutting appellant’s fraud and mistake claims and when to begin affirmatively presenting property value evidence for division purposes.

Appellant has shown specific prejudice arising from the lack of notice caused by the combined proceeding. See Bloom v. Hydrotherm, Inc., 499 N.W.2d 842, 845 (Minn.App.1993) (for reversal, a party must show error and resulting prejudice), review denied (Minn. June 23, 1993). Appellant testified that some of the marital property was subject to tax-increment financing and loan encumbrances totaling over $450,000. While respondent did not dispute the existence of these encumbrances, the district court nonetheless rejected appellant’s testimony about the amount of encumbrances because appellant did not support his testimony with documentary evidence. The district court then divided the property based on the evidence it deemed credible. Appellant claims that if he had understood the necessity of establishing property values for division purposes, he would have conducted independent art and property appraisals and presented additional evidence concerning tax-increment financing and loan encumbrances against some of the marital property.

The district court’s rejection of appellant’s unchallenged testimony for lack of documentary support, thereby rejecting over $450,000 of presumably verifiable marital debt, underscores the danger of conducting a combined proceeding without providing clear notice of the burdens of proof. See Tasker v. Tasker, 395 N.W.2d 100, 104-05 (Minn.App.1986) (holding district court’s rejection of appellant’s uncon-troverted valuation testimony compelled remand). Though appellant’s trial counsel might have either objected to the combined hearing or presented documentary evidence of the encumbrances, considering the circumstances, we will not punish appellant for confusion on the part of his attorney. See Charson v. Temple Israel, 419 N.W.2d 488, 491 (Minn.1988) (explaining reviewing courts’ reluctance to punish client for attorney’s oversight).

We conclude that the district court’s decision to combine reopening and property division proceedings into one evi-dentiary hearing confused burdens of proof and thereby prejudiced appellant. Accordingly, we hold that a district court considering motions to reopen dissolution judgments pursuant to Minn.Stat. § 518.145, subd. 2 violates a party’s right to due process by conducting the proceeding in such a way as to deny a party notice of evidentiary burdens of proof. We reverse and remand to allow the district court to consider additional property-value evidence, and, if necessary, amend the findings of fact and conclusions of law. Given the result reached here, we need not address appellant’s argument that the district court improperly valued and divided the property.

B.Bias

In posttrial motions, appellant unsuccessfully sought to remove the district court judge for bias, claiming that the findings of fact demonstrated animosity toward him. A party may remove a judge for bias upon a showing of affirmative prejudice. Minn.R.Civ.P. 63.08; see Uselman v. Uselman, 464 N.W.2d 130, 139 (Minn.1990) (holding a party must bring a motion demonstrating “prejudice or implied or actual bias” if the party failed to remove the judge before trial). We will not reverse a district court’s decision to deny a removal motion absent an abuse of discretion. Carlson v. Carlson, 390 N.W.2d 780, 785 (Minn.App.1986), review denied (Minn. Aug. 20, 1986).

It should come as no surprise that the district court, having found not only mistake but also fraud and misrepresentation, necessarily made less-than-flattering findings concerning appellant. Having carefully reviewed the unfavorable findings in light of the entire record, we conclude that they do not constitute an affirmative showing of bias and that the district court did not abuse its discretion by denying appellant’s motion for removal.

C. Stay

Appellant complains that the district court lacked the authority to stay the effect of the June 1997 dissolution judgment during the district court’s review of respondent’s motion to reopen. Because appellant did not raise this issue in his posttrial motions, we decline to review it. Thiele v. Stich, 425 N.W.2d 580, 582-83 (Minn.1988).

D. Spousal Maintenance

Appellant argues that the district court should not have reserved the issue of spousal maintenance because the MTA made no provision for maintenance. District courts are vested with broad discretion to determine whether to reserve maintenance. Maeder v. Maeder, 480 N.W.2d 677, 679 (Minn.App.1992), review denied (Minn. Mar. 19, 1992). In this case, the district court’s reservation of maintenance was well within its discretion. The district court correctly observed that unless there is a completed, equitable redistribution of property, respondent may be left without sufficient means to provide for her reasonable needs. See generally MinmStat. § 518.552 (1998) (allowing district courts to award maintenance in dissolution proceedings if one spouse is unable to provide for his or her reasonable needs).

Although the MTA did not provide for spousal maintenance and respondent did not request it, the district court’s decision merely to reserve the maintenance issue pending a resolution of the unique property issues in this case was not an abuse of discretion. See Toughill, 609 N.W.2d at 638-39 n. 1. (noting that a district court generally may not, by judicial fiat, impose conditions on the parties to which they did not stipulate and deprive the parties of their day in court).

III.

Finally, appellant contests the district court’s decision to award respondent attorney fees. The district court awarded respondent attorney fees based on both her need for fees and appellant’s conduct. See Minn.Stat. § 518.14 (1998) (bases for attorney fee awards). A district court’s attorney fee award will be reversed only for an abuse of discretion. Kronick v. Kronick, 482 N.W.2d 588, 536 (Minn.App.1992).

Need-based attorney fee awards require the district court to find that (1) the fees are needed for a party’s good faith assertion of rights; (2) the pay- or can pay the fees; and (3) the recipient cannot. Minn.Stat. § 518.14. District courts may, in their discretion, award additional fees “against a party who unreasonably contributes to the length or expense of the proceedings.” Id. The crux of appellant’s claim is that the record lacks support for the district court’s findings of the parties’ financial conditions and appellant’s misconduct. We do not set aside findings of fact unless they are clearly erroneous. Minn. R.Civ.P. 52.01.

The district court found sufficient grounds for need based attorney fees and also found appellant’s misconduct supported the fee award. The district court concluded that appellant failed to produce discovery and cooperate throughout the trial. The record shows that appellant’s failure to cooperate required an unusual posttrial order for discovery. But, appellant’s failure to produce adequate evidence is intertwined with the combined nature of the reopening and property division hearings in this case. Because we find the combined trial format a denial of due process for lack of notice, appellant’s failure to produce evidence alone cannot support an award of conduct-based fees.

We cannot discern, however, whether other conduct would support an award of fees or what portion of entire award is attributable to need-based fees. The district court did not make findings sufficient to show what combination of need or conduct support all, or different parts of, the entire award. This precludes effective review. Moreover, our decision to remand for further trial anticipates redistribution of the marital property. Redistribution necessarily affects the underlying findings of fact that now support need-based attorney fees. Under these circumstances, we remand the issue of attorney fees to the district court.

DECISION

When reviewing a motion to reopen dissolution proceedings pursuant to Minn. Stat. § 518.145, subd. 2 (1998), a district court does not err by relying on case authority to the extent that the cases were decided on grounds now enumerated in the statute. A district court considering a motion to reopen under section 518.145, subd. 2 denies a party due process if the district court’s failure to give clear notice of the hearing structure and changing burdens of proof prejudices that party.

Affirmed in part, reversed in part, and remanded.

      . Appellant relies on Toughill for his argument that Tomscak and progeny are overruled. That is not a correct reading of Toug-hill. In Toughill, we incidentally recognized the limits Shirk places on earlier case law, including Tomscak. Toughill, 609 N.W.2d at 639-40. Moreover, Toughill differs significantly from this case. There, the appellant-husband, by pre-trial motion, sought to rescind the MTA before it had been incorporated into a judgment. Id. at 637-38. The criteria of Minn.Stat. § 518.145 at issue here did not apply in Toughill.

      . For example, while one part of the judgment estimates that market value of the parties’ homestead to be $350,000, the judgment elsewhere assigns different values to the home based on encumbrances against the property. The judgment assigns a Chaska property a tax market value of $131,400, but this amount is inconsistent with both appellant’s testimony and with a number of exhibits. There are similar confusing aspects to the valuations of the parties' interests in the duplex and a farm.