source: Caselaw Access Project

author: BLATZ, Chief Justice.

license: Public Domain

text:
    STATE of Minnesota, Appellant, v. Richard Joseph JACOBSON, Respondent.
    No. A03-1782.
    Supreme Court of Minnesota.
    June 9, 2005.

      Michael A. Hatch, Minnesota Attorney General, St. Paul, MN, James C. Back-strom, Dakota County Attorney, Phillip D. Prokopowicz, Chief Deputy, Hastings, MN, for Appellant.
    Joseph S. Friedberg, Lisa Lodin Peral-ta, Minneapolis, MN, for Respondent.
   OPINION

BLATZ, Chief Justice.

This case comes to us on appeal from questions certified to the Minnesota Court of Appeals from the Dakota County District Court regarding two mistake of law defenses — reliance on advice of counsel and reliance on an official interpretation of the law. Respondent, Richard Joseph Jacobson, was charged with conspiracy to procure unlawful voting and conspiracy to commit forgery. At a pretrial hearing, the state brought a motion seeking to exclude evidence concerning an unrelated election law complaint and the response to that complaint by the Dakota County Attorney’s Office. The district court granted the state’s motion, barred Jacobson from asserting the defenses of reliance on advice of counsel and reliance on an official interpretation of the law, and certified two questions to the court of appeals. The court of appeals held that the defenses of good faith reliance on the advice of counsel and good faith reliance on an official interpretation of the law are “available defense[s] to a defendant charged with a specific intent crime” and that the district court prematurely concluded that any reliance was unreasonable. State v. Jacobson, 681 N.W.2d 398, 410 (Minn.App.2004). The court of appeals further held that Jacobson is entitled to present evidence of his reliance as part of his due process right to present a defense and explain his conduct. Id. We hold that evidence of Jacobson’s mistake of law is admissible because it is relevant to whether he intended to break the law — an element of the conspiracy charges.

At the time of the events alleged in the complaint, Jacobson was the owner and operator of “Jakes,” a strip club located at 15981 Clayton Avenue in Coates, Minnesota. For several years, Jakes has been the subject of substantial local legal controversy. On October 11, 2002, the Dakota County Treasurer-Auditor’s Office reported that it received 93 Minnesota voter registration cards and voter change of address cards listing 15981 Clayton Avenue, Coates, Minnesota — Jakes’ address- — as the voters’ place of residence. While the registrants signed the voter registration cards certifying that they “maintain[ed] residence at the address given on the registration form,” Dakota County property tax records indicate that Jakes is a “bar/tavern” with four bathrooms and no bedrooms.

On October 14, 2002, investigating officers executed a search warrant for Jakes and a vehicle registered to Jacobson. While inside Jakes, the officers found 13 blank voter registration forms and two completed voter registration cards listing 15981 Clayton Avenue, Coates, Minnesota as the voters’ place of residence. In the vehicle, officers found 26 blank voter registration forms and a highlighted copy of voter registration statutes. The officers found no evidence that anyone was residing at Jakes. Jacobson was subsequently charged with conspiracy to procure unlawful voting in violation of Minn.Stat. § 204C.14(e) (2004) and Minn.Stat. § 609.175 (2004), and conspiracy to commit forgery in violation of Minn.Stat. § 609.63, subd. 1(6) (2004), and § 609.175. Jacobson pleaded not guilty to the charges.

Subsequent to his pleas of not guilty, Jacobson filed a motion to dismiss on due process grounds. In connection with the motion, Jacobson submitted an affidavit stating that for the past several years he had retained an attorney, Randall Tigue, to attend to various civil matters. Jacobson averred that, in July 2002, Tigue showed him a copy of Minnesota’s voting and election laws and a letter from Chief Deputy Dakota County Attorney Phillip Prokopowicz to Minneapolis Assistant Clerk and Director of Elections Suzanne Griffin. The letter to Griffin, dated June 4, 2002, concerned possible violations of voter registration and election laws by Minneapolis police officers who registered to vote using their work addresses rather than their home addresses. The matter had been referred by the Hennepin County Attorney’s Office to the Dakota County Attorney’s Office, presumably because of a conflict of interest. In the letter, Chief Deputy Prokopowicz informed the city that the Dakota County Attorney’s Office had concluded that there was no criminal wrongdoing by the police officers and thus the office was closing its investigation of the matter. Jacobson asserted in his affidavit that “[w]ith Mr. Tigue’s counsel and [advice], and relying on a review of Minnesota’s election laws and the letter by Mr. Prokopowicz,” he and several of his employees “devised a plan to get people to register to vote using Jakes as a residence.”

In response to Jacobson’s assertions in his affidavit, the state filed a motion to exclude (1) “any documentation, testimony, or reference to an election law complaint made by [Suzanne] Griffin, Minneapolis Assistant City Clerk-Director of Elections, regarding alleged violations of voter registration election laws by various Minneapolis police officers”- and (2) “any documentation, testimony, or reference to the disposition of the * * '* complaint by thé Dakota County Attorney’s Office.” At the hearing on the state’s motion to exclude, the state clarified that its motion included Tigue’s testimony regarding Prokopowicz’s letter, any advice Tigue may have given Jacobson based on the letter, and any reference to the advice. The state argued in its memorandum that this evidence was irrelevant and unduly prejudicial. In addition, the state argued that there is no legal defense of advice of legal counsel and that even if the defenses of reliance on the advice of legal counsel and reliance on an official interpretation of the law exist as a general matter, the defenses could not be asserted in the instant ease because these defenses require a showing that the defen7 dant used due diligence and care. ;

Jacobson opposed the state’s motion on five separate grounds. He argued that the challenged evidence (1) was relevant to the issue of his intent; (2) was relevant to establish the defenses of reliance on the advice of counsel and reliance on an official interpretation of the law; (3) had significant probative value and no basis existed to exclude it on grounds of confusion; (4) was not hearsay, or alternatively, it was admissible as an exception to the hearsay rule; and (5) had to be admitted to protect Jacobson’s constitutional right to present a defense.

The district court granted the state’s motion to exclude the evidence at issue and barred Jacobson from asserting the defenses of reliance on advice of counsel and reliance on an official interpretation of the law. Without directly addressing whether the defenses exist in Minnesota, the court concluded that, under the circumstances, Jacobson could not assert the defenses because his reliance on advice of counsel and reliance on the Dakota County Chief Deputy’s letter as- an official interpretation of the law was “unreasonable.” The court further concluded that the excluded evidence was irrelevant because the state “does not have to prove that the Defendant and others beliéved those registering to vote would not be criminally prosecuted.”

After ruling in favor of the state, at Jacobson’s request pursuant to Minn. R.Crim. P. 28.03, the district court stayed further proceedings and certified to the court of appeals two questions as important and doubtful:

1. Whether the defenses of reliance on advice of counsel and on an official interpretation are available to the Defendant under Minnesota law?
2. Whether the defenses of reliance on advice of counsel and on an official interpretation are available to defendant as a matter of law given the , District Court’s finding that any reliance was not reasonable?

The court of appeals answered both questions in the affirmative. Jacobson, 681 N.W.2d at 404-07. The court of appeals also concluded that Jacobson is- entitled to present evidence of his reliance- as part of his due process- right to present a defense and explain his conduct. Id. at 408. The state petitioned this court for review of the court of appeals’ decision, which we granted.-

Under Minn. R.Crim. P. 28.03, a district court, at the defendant’s request or with the defendant’s consent, shall certify to the court of appeals any question which is “so important or doubtful as to require a decision of the Court of Appeals.” A certified question is a question of law which this court reviews de novo. State v. Tennin, 674 N.W.2d 403, 406 (Minn.2004).

The questions certified in this case, although framed in terms of the “defenses” of reliance on advice of counsel and reliance on an official interpretation, are fundamentally evidentiary issues relating to Jacobson’s intent. Accordingly, we will focus our analysis of these two questions on the evidentiary issues. See State v. Larivee, 656 N.W.2d 226, 228 (Minn.2003) (stating that when the “district court fails to properly frame the issues, the appellate court has the authority to clarify the questions certified”).

Jacobson has been charged with conspiracy to procure unlawful voting and conspiracy to commit forgery. Under Minnesota law, conspiracy occurs when one “conspires with another to commit a crime” and requires proof that “in furtherance of the conspiracy one or more of the parties does some overt act.” Minn.Stat. § 609.175, subd. 2. The state argues that the intent required under this statute is intent to commit the underlying acts. However, in explaining the intent required to establish conspiracy we have stated: “A conscious and intentional purpose to break the law is an essential element of the crime of conspiracy * * *.” State v. Kuhnau, 622 N.W.2d 552, 556 (Minn.2001) (emphasis added). Similarly, CRIMJIG 5.11 states that the actions of the conspirators “must be the result of a preconceived and mutual intention to commit a crime.” 10 Minn. Dist. Judges Ass’n, Minnesota Practice — Jury Instruction Guides, Criminal, CRIMJIG 5.11 (4th ed. 1999) (emphasis added). We reaffirm our statement in Kuhnau and hold that the intent necessary to prove conspiracy is the intent to “break the law.”

As a general rule, mistake or ignorance of the law is not a defense. Cheek v. United States, 498 U.S. 192, 199, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991); State v. King, 257 N.W.2d 693, 697 (Minn.1977). It is assumed that “[a]ll members of an ordered society are presumed either to know the law or, at least, to have acquainted themselves with those laws that are likely to affect their usual activities.” King, 257 N.W.2d at 697-98. But, a mistake of law “defense” has been recognized in limited circumstances when the mistake “negatives the existence of a mental state essential to the crime charged.” 1 Wayne R. LaFave, Substantive Criminal Law § 5.6(a), at 395 (2d ed. 2003). For example, in Cheek v. United States, the United States Supreme Court determined that when a federal tax law requires “willfulness” as an element of the offense, the defendant’s good faith belief that he is not violating the law could negate intent because “willfully,” as used in certain federal tax laws, requires the specific intent to violate the law. 498 U.S. at 200, 111 S.Ct. 604.

A mistake of law- that negates the mental state of the charged offense is not a “defense” in the sense that the defendant carries the burden of persuasion. Rather the evidence relates to disproving or negating an element of the crime .charged. In this circumstance, a mistake of law “defense” is actually an application of the principle that “the Due Process Clause protects the accused against conviction except upon proof beyond a reasonable doubt of every fact necessary to constitute the crime with which he is charged.” In re Winship, 397 U.S. 358, 364, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970); see LaFave, supra, § 5.6(a), at 395 (“Instead of speaking of ignorance or mistake of fact or law as a defense, it would be just as easy to note simply that the defendant cannot be convicted when it is shown that he does not have the mental state required by law for the commission of that particular offense.”); 1 Paul H. Robinson, Criminal Law Defenses § 62(b), at 248 (1984); cf. State v. Hage, 595 N.W.2d 200, 205 (Minn.1999) (addressing the allocation of the burden of proof for defenses and recognizing that a defendant cannot “be required to shoulder the burden of persuasion for her proffered defense when the mitigating circumstance or issue disproves or negates an element of the crime charged”).

Here, Jacobson’s mistake of law is relevant to negate the intent for the crime charged because conspiracy requires proof of a “conscious and intentional purpose to break the law.” Kuhnau, 622 N.W.2d at 556. Thus, if Jacobson believed in good faith that it was legal to procure others to fill out voter registration cards listing Jakes as their residence, he would not have the requisite intent for conspiracy. We therefore hold that evidence relating to a defendant’s misunderstanding of the law is admissible when relevant to whether the defendant had the intent required for the charged offense.

We now turn to the state’s argument that, even if the “defenses” of reliance on advice of counsel and reliance on an official interpretation of the law exist in Minnesota, any reliance by a defendant must be reasonable in order to assert the defenses at trial. The state argues that Jacobson is precluded from using any evidence of his reliance at trial because the district court found that Jacobson’s reliance on advice of counsel and on an official interpretation of the law was unreasonable. We disagree. As we stated above, the “defenses” at issue here are fundamentally evidentiary issues relating to the defendant’s mental state. Because the existence of intent is a question of fact, it must be submitted to the jury. Morissette v. United States, 342 U.S. 246, 274, 72 S.Ct. 240, 96 L.Ed. 288 (1952).

In Cheek, the Supreme Court stated that “[cjharacterizing a particular belief as not objectively reasonable transforms the inquiry into a legal one and would prevent the jury from considering it.” 498 U.S. at 203, 111 S.Ct. 604. In the Court’s view, “forbidding the jury to consider evidence that might negate willfulness would raise a serious question under the Sixth Amendment’s jury trial provision.” Id. Thus, the Court in Cheek held that the defendant’s good faith belief that the tax laws did not impose any duties on him did not have to be objectively reasonable in order to be considered by the jury as evidence negating his intent. Id. Similarly, evidence of Jacobson’s mistake of law based on his reliance on the advice of his attorney and on the letter from Chief Deputy Dakota County Attorney Prokopowicz is relevant to the issue of Jacobson’s intent and thus need not be objectively reasonable to be presented to the jury. Of course, as the Court noted in Cheek, the more unreasonable the beliefs, “the more likely the jury will consider them to be nothing more than simple disagreement with known legal duties.” 498 U.S. at 203-04, 111 S.Ct. 604.

We therefore hold that, on the record before us and based on the pending charges, Jacobson has a right to present evidence that he relied on Tigue’s advice and on Chief Deputy Dakota County Attorney Prokopowicz’s letter regarding the Minneapolis police officer matter. Our holding is grounded in constitutional law and our recognition that it is “fundamental that criminal defendants have a due process right to explain their conduct to a jury.” State v. Brechon, 352 N.W.2d 745, 751 (Minn.1984); see also In re Oliver, 333 U.S. 257, 273, 68 S.Ct. 499, 92 L.Ed. 682 (1948) (stating that “an opportunity to be heard in his defense” is “basic in our system of jurisprudence”). While the district court can impose limits on the testimony of a defendant, the limits must not trample on the defendant’s right to a fair trial. Brechon, 352 N.W.2d at 751 (recognizing the district court’s ability to control the trial, but disapproving of the district court’s broad exclusionary order “because it raises serious constitutional questions relating to a defendant’s right to testify”).

Affirmed.

      . On October 4, 2002, a federal district court filed an order closing Jakes. The federal district court specifically found that Jakes had previously been closed by federal court order for operating a sexually-oriented business in violation of city ordinances and that, after the reopening of the business, the nature of the business continued to violate city ordinances.

      . We note that Coates has a population of approximately 163 people. U.S. Census Bureau Fact Sheet, Census 2000 Demographic Profile Highlights, at http://factfinder.cen-sus.gov (last visited June 2, 2005). The record in this case reflects that the city is governed by a four-member city council and a mayor. In November 2002, two council seats and the mayor position were on the ballot. All three positions were contested.

      . After reading a Star Tribune article regarding the investigation of the Minneapolis police officers' possible violation of voter registra- • tion and election laws in which Prokopowicz was quoted, Tigue contacted the Dakota County Attorney’s Office and requested a copy of any written opinion relating to the matter. In response, Prokopowicz sent him a copy of the letter he had written to the assistant city clerk. Jacobson stipulated that, with the exception of Tigue's written request for a copy of any written opinion on the police officer matter, there was no other contact with the county attorney’s office regarding the registration or election laws or the legitimacy of Jacobson's plan.

      . In so holding, we recognize that the court of appeals' statement that the requisite intent was "intent to conspire,” Jacobson, 681 N.W.2d at 405, is incorrect.

      . The state conceded at oral argument that, if the intent for conspiracy requires intent to break the law, the - excluded evidence would be admissible, subject to the usual rules of evidence.


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

text:
    AMERICAN FAMILY INSURANCE GROUP, Respondent, v. Mark KIESS, Appellant.
    No. A03-1764.
    Supreme Court of Minnesota.
    June 16, 2005.
    Francis E. Stephens, L. Michael Hall Law Office, St. Cloud, MN, for Appellant.
    LeAnne D. Miller, Rajkowski Hansmeier Ltd., St. Cloud, MN, for Respondent.

      James Ballantine, Schwebel, Goetz, & Sieben, Minneapolis, MN, Amicus.
   OPINION

BLATZ, Chief Justice.

Appellant Mark Kiess appeals from a decision by the court of appeals holding that under Minn.Stat. § 65B.54, subd. 1 (2004), respondent American Family Insurance Group (American Family) was obligated to pay interest on a no-fault claim 30 days after American Family received actual notice of the claim, which occurred in this case when Kiess filed a petition for arbitration. Because American Family had notified him that it was discontinuing payment of future claims, Kiess argues that case law and public policy dictate that interest began to accrue 30 days after he received the medical care underlying the claim, approximately 52 months before he filed his arbitration petition. We affirm.

Kiess was injured in a two-vehicle automobile accident in February 1996. At the time of the accident, Kiess had no-fault automobile insurance coverage through American Family, which paid Kiess’s no-fault claims for several months following the accident. In August 1996, American Family notified Kiess it was discontinuing his no-fault benefits because, pursuant to an independent medical examination, American Family had determined that Kiess no longer required medical care for injuries related to the accident. In its letter discontinuing no-fault benefits, American Family stated:

Given the results of the Independent Medical Examination, we must respectfully deny any further claims or pay*ment for diagnostic testing, chiropractic and/or medical care. All no-fault benefits from your auto policy for this accident will be discontinued at this time. You may wish to forward any future medical billings to your health insurance carrier for consideration of payment.

In the same letter, American Family advised Kiess that he had the statutory “right to' demand arbitration of this claim if the amount claimed is $10,000.00 or less.”

Kiess continued to experience neck and back pain, and in June 1997 he underwent surgery to address these problems at a cost of $12,597.76. Kiess did not submit this additional no-fault claim to American Family or notify the insurer of his surgery at that time. Instead, Kiess submitted his medical bills to his health insurer, Blue Cross & Blue Shield of Minnesota (Blue Cross), which paid the bills in full.

In March 1999, Blue Cross notified Kiess that, under the subrogation-recovery provision of his health insurance policy, Blue Cross was entitled to recover the claims it had paid if Kiess collected benefits from a third party. Kiess, in fact, did file a claim against the other driver in the accident and received a settlement offer of $25,000. Kiess’s attorney notified Blue Cross of this settlement offer by telephone and Blue Cross then sent a letter to Kiess’s attorney dated September 2001. The letter stated that Blue Cross was waiving its subrogation interest in the matter as a result of the telephone conversation with Kiess’s attorney, which caused Blue Cross to conclude that Kiess’s accident had “significant causation and liability issues.”

In November 2001 — two months after Blue Cross waived its subrogation rights— Kiess filed an arbitration petition against American Family, asserting that the insurer was liable for no-fault benefits covering the cost of the surgery paid for by Blue Cross. To bring the $12,597.76 claim within the $10,000 statutory limit for arbitration, Kiess waived $2,597.76 of his claim. See Minn.Stat. § 65B.525, subd. 1 (2004). In May 2002, Kiess amended his arbitration petition, claiming that American Family was liable for an additional $7,125 of interest. This amount represented interest for non-payment of the no-fault claim, calculated pursuant to Minn.Stat. § 65B.54, subds. 1 and 2 (2004). When calculating the interest due, Kiess included the 52 months that passed from 30 days after his surgery in June 1997 to the time he filed his petition for arbitration in November 2001. He then added the five months that had passed while arbitration was pending. In all, the interest Kiess demanded covered a total of 57 months.

The arbitrator awarded Kiess $17,125, the full amount of his claim. After the arbitrator denied American Family’s mo: tion to reduce the award, American Family moved to vacate the award in district court. The court denied the motion and issued an order confirming the award. American Family then appealed to the court of appeals.

American Family raised four issues at the court of appeals, including whether Kiess was entitled to interest under Minn. Stat. § 65B.54, subd. 1, from the time he incurred his losses or only from the time he provided American Family with actual notice of the losses. In resolving this issue, the court of appeals reversed the district court and held that American Family’s interest liability did not begin when Kiess received the care underlying his no-fault claim. Am. Family Ins. Group v. Kiess, 680 N.W.2d 552, 558 (Minn.App.2004). Rather, the court of appeals concluded that American Family’s interest liability began 30 days after Kiess provided the insurer with actual notice of his losses, which in this case occurred when Kiess filed his arbitration petition. Id. Both Kiess and American Family sought review by this court. We granted Kiess’s petition, limiting our review to the court of appeals’ interpretation of Minn. Stat. § 65B.54, subd. 1.

The Minnesota No-Fault Automobile Insurance Act (Act) is set forth in Minn.Stat. §§ 65B.41-.71 (2004). The section at issue here states in relevant part:

Basic economic loss benefits are payable monthly as loss accrues. Loss accrues not when injury occurs, but as * * * expense is incurred. Benefits are overdue if not paid within 30 days after the reparation obligor receives reasonable proof of the fact and amount of loss realized * * *.

Minn.Stat. § 65B.54, subd. 1. Once overdue, payments bear simple interest at the rate of 15% per year. Id., subd. 2. The issue presented is whether, under section 65B.54, subd. 1, an insured is obligated to provide a no-fault carrier with actual notice of a loss incurred in order to be eligible for mandatory interest when the insurer had previously discontinued the insured’s no-fault benefits pursuant to an independent medical examination.

We review questions of statutory construction de novo. Am. Family Ins. Group v. Schroedl, 616 N.W.2d 273, 277 (Minn.2000). “The object of all interpretation and construction of laws is to ascertain and effectuate the intention of the legislature.” Minn.Stat. § 645.16 (2004). “When the language of a statute is plain and unambiguous, that plain language must be followed.” Vlahos v. R & I Constr. of Bloomington, Inc., 676 N.W.2d 672, 679 (Minn.2004). We construe words and phrases “according to rules of grammar and according to their most natural and obvious usage unless it would be inconsistent with the manifest intent of the legislature.” Id.

Kiess asserts that by discontinuing his no-fault benefits, American Family constructively denied all of Kiess’s future claims and thereby waived its right to receive notice under section 65B.54, subd. 1. According to Kiess, it would have been “futile” for him to continue to submit bills to American Family after his benefits had been discontinued. Thus, even though American Family had paid all submitted claims prior to the discontinuation of Kiess’s no-fault benefits and had received no notice that Kiess had incurred subsequent losses related to injuries sustained in the car accident, Kiess contends he is entitled to interest from 30 days after his back surgery in June 1997. Notwithstanding the plain language of the statute requiring reasonable proof of the fact and amount of loss realized, Kiess appeals to “principles of fundaméntal fairness” and argues that “imposing constructive notice on [American Family] is not inequitable.” American Family responds that the discontinuation letter sent to Kiess did not constitute a waiver of its statutory right to receive notice of ongoing medical claims, and that the plain language of the statute dictates that Kiess’s benefits should not be considered “overdue” until 30 days after American Family received actual notice of Kiess’s additional losses.

We have previously interpreted Minn. Stat. § 65B.54, subd. 1, in other contexts. See, e.g., Pederson v. All Nation Ins. Co., 294 N.W.2d 693, 696 (Minn.1980); Haagenson v. Nat’l Farmers Union Prop. & Cas. Co., 277 N.W.2d 648, 653 (Minn.1979). The precise facts of this case present a question of first impression for this court, however. The statute in question expressly provides that benefits are overdue 30 days after an insurer has received “reasonable proof of the fact and amount of loss realized.” Minn.Stat. § 65B.54, subd. 1. We conclude that when these words are interpreted according to their most natural and obvious usage, the statute requires insureds to provide insurers with actual notice of additional losses. Concluding otherwise would require us to read the words “proof’ and “fact” out of the statute entirely. The parties do not dispute the fact that Kiess did not provide American Family with any notice of the losses he incurred after the discontinuation of his benefits until he filed his arbitration petition. Therefore, Kiess’s no-fault benefits were not “overdue” until 30 days after he filed the arbitration petition.

. In arguing that we should interpret section 65B.54, subd. 1, to provide for constructive notice, Kiess relies heavily on Perry v. State Farm Mutual Automobile Insurance Co., 506 F.Supp. 130 (D.Minn.1980). In that case, the federal district court held that an insured’s widow was entitled to- interest under section 65B.54, subd. 1, from the time her claim was constructively denied. 506 F.Supp. at 134. However, unlike the case at hand, Perry involved a contract dispute and focused on the resolution of liability issues. Moreover, the court in Perry neither cited nor discussed the requirement in section 65B.54 that interest be calculated from the time an insurer receives “reasonable proof of the fact and amount of loss realized.” Because Perry did not acknowledge the statute’s notice requirement or discuss how that requirement could be reconciled with a theory of constructive notice, the case provides no guidance in resolving the question at hand.

We are also not persuaded by Kiess’s argument that interpreting the statute to allow for constructive notice serves the purposes of the No-Fault Act. See Minn. Stat. § 65B.42(l)-(5) (2004). The Act expressly seeks to relieve the “severe economic distress” of automobile accident victims and to assure that accident victims receive “prompt payment” for necessary treatment. Minn.Stat. § 65B.42(1), (3). Interpreting the interest statute to require actual notice promotes prompt payment in two ways. First, because no-fault insurers can only pay claims they know about, the interest statute’s notice requirement gives insureds an incentive to submit their claims promptly. Second, insurers are motivated to promptly pay upon notice in order to avoid a 15% interest surcharge. The notice requirement also promotes the relief of the economic distress of accident victims by assuring that once insureds provide insurers with actual notice of any loss, the victims will be compensated for the use of their money if the insurer fails to pay within 30 days. See Burniece v. Ill. Farmers Ins. Co., 398 N.W.2d 542, 544 (Minn.1987) (stating that the interest statute is intended to compensate insureds for the use of their funds and encourage prompt payment of benefits).

Here, Kiess delayed notifying American Family of his losses for over four years. We do not believe that such a delay is encouraged or supported by the Act’s express policy objectives. See Minn.Stat. § 65B.42(1)-(5). While Kiess urges the court to recognize his theory of constructive notice and hold that such notice furthers the policies undergirding the Act, we leave it to the legislature to weigh the implications of amending the statute to allow for constructive notice. In doing so, we acknowledge that the responsibility of evaluating the direct or collateral benefits and consequences of such proposed statutory changes are best addressed by the legislature.

On a final note, we disagree with the concurrence’s focus on the possible collateral consequences of interpreting the statute in accordance with its plain language and our need to prevent those consequences by applying principles of equitable estoppel. Specifically, the concurrence addresses the hardships imposed on insureds who have no health insurance when no-fault benefits are discontinued. Although we acknowledge the hardship faced by all such situated individuals, the fact that some insureds do not have health insurance does not dictate a different conclusion in this case. The issue is “What does an insured have to do to obtain additional no-fault coverage when the insured disagrees with the insurer’s decision that no further testing or care is needed?” Whether an individual has health insur-anee does not change the requirement that the insured must bring an arbitration petition in order to determine if additional no-fault coverage is warranted. In recognition of this, the statute is written to encourage prompt resolution of such disputes by requiring both notice to the insurer of an insured’s additional claims and payment of interest by the insurer if meritorious claims are not paid within 30 days.

Accordingly, we affirm the court of appeals’ decision and hold that Kiess is entitled to collect interest beginning 30 days after he filed his arbitration petition in November 2001. We remand to the district court for proceedings in accordance with this opinion.

Affirmed.

MEYER, J., files concurring opinion joined by PAGE, J.

MEYER, Justice

(concurring).

I agree with the' májority that Minn. Stat. § 65B.54, subd. 1, plainly states that an insured must provide an insurer with actual noticé of losses incurred in order for interest on the claim to begin to accrue. However, I respectfully take issue with the conclusion that — absent legislative intervention — an insurer’s conduct can never be interpreted as a waiver of its right to statutory notice. Such a position ignores the realities of the practice of no-fault insurance law in this state and places a heavy burden on insureds — who, the majority now holds, are not eligible for penalty interest under the statute even if they follow plainly-stated directions given to them by their insurance companies to submit their medical bills elsewhere.

The question we face in this decision is whether appellant Kiess is entitled to collect interest under section 65B.54, subd. 1, from the time he incurred his medical bills or only from the time he filed for arbitration of his discontinued benefits. Here, Kiess received a letter from American Family specifically stating that “[a]ll no-fault benefits from your auto policy for this accident will be discontinued at this time. You may wish to forward any future medical billings to your health insurance carrier for consideration of payment.” Accordingly, Kiess submitted the bills he subsequently incurred to his medical insurance carrier, Blue Cross. Blue Cross paid Kiess’s surgery bills in full, then waived its subrogation interest in the matter. Kiess subsequently brought a petition for arbitration against American Family for $10,-000 — the statutory limit — and $7,125 in penalty interest.

The majority concludes that Kiess is entitled to penalty interest only from the time he filed his petition for arbitration because the statute plainly states that an insurer must pay interest from the time it receives “reasonable proof of the fact and amount of loss realized.” Minn.Stat. § 65B.54, subd. i. I agree with the majority that the statute requires actual notice. However, rather than ending the analysis there, I would go on to apply common law equitable principles of waiver and estoppel and consider whether American Family is barred from asserting its right to statutory notice.

We have- previously concluded that, in certain cases, waiver and estoppel defenses are not abrogated by statutes. In Neuberger v. Hennepin County Workhouse, 340 N.W.2d 330, 331-32 (Minn.1983), we held that an employer was estopped from pleading a statutory time bar where, based on the employer’s statement that he was “just as well off on disability,” an employee did not timely file a workers’ compensation claim. See also Kahn v. State, 289 N.W.2d 737, 745 (Minn.1980) (holding where agent of employer misled the employee’s husband into believing her injury was not compensable, and employee failed to timely file a claim as a result, employer was estopped from asserting the time bar); Brekke v. THM Biomedical, Inc., 683 N.W.2d 771, 775 (Minn.2004) (stating that waiver and estoppel defenses were not superseded or abrogated by statute in question). Similarly, in L & H Transport, Inc. v. Drew Agency, Inc., we stated that “[a] defendant’s conduct can be such as to es-top that defendant from asserting a time limitation contained in an insurance policy” where it would be “unjust, inequitable, or unconscionable” to allow the defendant to do so. 403 N.W.2d 223, 227 (Minn.1987). In Neuberger we stated that our conclusion that the statute did not supersede the worker’s right to assert equitable estoppel comported with the “general policy of compensation law, that benefits should be provided for all injuries that are reasonably compensable under the statute.” 340 N.W.2d at 332.

The No-Fault Act does not specifically preclude an insured from asserting equitable defenses where the purposes of the Act would be served, and our court has never interpreted the statute to abrogate such defenses. As the majority has noted, the Act expressly seeks to relieve the “severe economic distress” of automobile accident victims and to assure that accident victims receive “prompt payment” for necessary treatment. MinmStat. § 65B.42(1), (3). In eases like the one at hand, where an insurance company discontinues an insured’s coverage and tells the insured that he “may wish to forward any future medical billings to your health insurance carrier for consideration of payment,” the insured should have the right to argue that the insurer is equitably estopped from asserting its right to notice under section 65B.54, subd. 1.

A party seeking to invoke the doctrine of equitable estoppel has the burden of proving (1) that promises or inducements were made; (2) that the party reasonably relied upon the promises; and (3) that the party will be harmed if estoppel is not applied. Hydra-Mac, Inc. v. Onan Corp., 450 N.W.2d 913, 919 (Minn.1990). In the case at hand, Kiess could not succeed in arguing equitable estoppel because, although American Family induced Kiess to send his bills to his health insurance carrier, and Kiess reasonably relied on those instructions, Kiess could not establish that he was harmed by not receiving statutory interest on a $10,000 windfall. Kiess received necessary treatment that was promptly paid for and thus cannot argue that the purposes of the Act would be furthered by awarding him interest in this case.

However, it is not hard to imagine an injured person in other circumstances who would, in fact, be harmed by relying on the language of a termination of benefits letter like the one American Family sent in this case. Many people do not have health insurance to which they can “forward” additional bills — or they have health insurance with limited coverage or high deductibles. In such cases, a person whose no-fault benefits have been discontinued will likely pay his or her additional medical expenses out of pocket, pay medical expenses on credit, or not seek out necessary additional medical care. In such cases, the Act’s purposes — to relieve the “severe economic distress” of automobile accident victims and to assure that accident victims receive “prompt payment” for necessary treatment — are served by equitably estop-ping an insurer from asserting its right to notice under the statute.

It is at odds with the purposes of the Act to insist that an injured person continue to submit medical bills to a no-fault insurer that has discontinued benefits and directed the injured person to submit his or her bills elsewhere. In the practice of no-fault law in this state; an insured simply should not bear the burden of having to analyze and interpret discontinuation letters in relation to the larger statutory scheme in order to determine whether to follow the instructions given by an insurance company. Rather, because insurance companies are sophisticated entities well-versed in the nuances and intricacies of the Act, they should bear the risk of being equitably estopped from asserting their right to notice in those cases where the insured has been harmed by reasonably relying on statements in a discontinuation letter.

Thus, I would hold that, in cases in which an insured receives a letter like the one at issue here, then reasonably relies on the insurance company’s instructions in such a way that subverts the purposes of the No-Fault Act, the insurer is equitably estopped from asserting its right to notice under section 65B.54, subd. 1.

PAGE, Justice

(concurring).

I join in the concurrence of Justice Meyer.

      . The record does not indicate whether Kiess initiated his suit against the other driver's liability carrier before or after Blue Cross notified Kiess of its subrogation rights.

      . The other three issues raised by American Family were 1) whether the arbitrator had proper jurisdiction; 2) whether Kiess had standing; and 3) whether American Family was entitled to a collateral-source deduction equal to the amount Blue Cross paid for Kiess’s medical claims. The court of appeals affirmed the district court on each of these three issues. Kiess, 680 N.W.2d at 555, 560.

      . This delay, in whole or part, may have been due to the fact that Blue Cross provided coverage for his medical treatment and Kiess did not have to expend his own funds. Thus one of the purposes of the interest penalty — to compensate for the use of an insured’s funds — is not at issue here. See Burniece, 398 N.W.2d at 544.

      . The concurrence relies on cases interpreting our Workers’ Compensation Act in support of es argument that equitable estoppel should be applied to the No-Fault Act. The parties do not cite, nor have we found, any precedent in which we have previously applied equitable estoppel to the No-Fault Act. It is not clear whether the cases cited by the concurrence support such a conclusion. Because this issue does not require resolution in this case, we do not address it.


author: RANDALL, Judge.

text:
    Byron Kendall LEWIS, petitioner, Appellant, v. STATE of Minnesota, Respondent.
    No. A04-1476.
    Court of Appeals of Minnesota.
    June 14, 2005.

      John M. Stuart, State Public Defender, Ngoc Nguyen, Assistant Public Defender, Minneapolis, MN, for appellant.
    Mike Hatch, Attorney General, St. Paul, MN; and Doug Johnson, Washington County Attorney, Heather Pipenhagen, Assistant County Attorney, Stillwater, MN, for respondent.
    Considered and decided by RANDALL, Presiding Judge; MINGE, Judge; and CRIPPEN, Judge.

       Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const, art. VI, § 10.

   OPINION

RANDALL, Judge.

Appellant challenges the denial of his pro se petition for postconviction relief. Because appellant’s consecutive sentences were a departure from the sentencing guidelines entitling him to representation by a public defender and because the post-conviction court violated appellant’s right to counsel by not properly informing appellant of the existence of this right, we reverse and remand.

FACTS

In November 1999, appellant Byron Lewis was charged with two counts of first degree aggravated robbery, ten counts of second degree assault, ten counts of kidnapping, two counts of theft over $2500, and two counts of felon in possession of a pistol. These charges arose from multiple robberies of movie theaters with a handgun.

On January 18, 2000, appellant pleaded guilty to one count of first degree aggravated robbery in violation of Minn.Stat. § 609.245, subd. 1 (2000) and one count of felon in possession of a firearm in violation of Minn.Stat. §§ 609.11 (2000) and 624.713, subd. 1(b) (2000). As part of the plea agreement all other charges in Washington County were dismissed. Both at the plea hearing and in the petition to enter a plea of guilty, appellant was informed he would be sentenced to 108 months, the guideline sentence for first degree aggravated robbery, and 60 months, the guideline sentence for felon in possession of firearm, and that the sentences would be served consecutively. On February 4, 2000, appellant was sentenced in accordance with the plea agreement to consecutive sentences of 108 months for first degree aggravated robbery, and 60 months for felon in possession of a firearm. Appellant was represented by counsel throughout all the proceedings, including the plea hearing.

Appellant filed a pro se petition for post-conviction relief on March 26, 2004, seeking to withdraw his guilty plea. A copy of this petition was sent to the state public defender’s office. On June 7, 2004, the postconviction court filed an order denying appellant’s petition without a hearing. The order held that appellant had been represented by counsel at all times and the record clearly showed that appellant understood the sentences were to be consecutive and therefore waived his right to be sentenced under the guidelines. On June 17, 2004 (after the hearing), the state public defender’s office sent a letter to the court requesting to file a supplemental memorandum in the matter. On June 21, 2004, the postconviction court denied the request because an order had already been filed disposing of the matter. The denial of the petition for postconviction relief was appealed to this court.

ISSUES

I. Did the district court depart from the sentencing guidelines by imposing consecutive sentences?

II. Did the district court err in failing to notify appellant of his right to a public defender before denying his petition for postconviction relief?

ANALYSIS

A postconviction court’s findings are reviewed to determine whether there is sufficient evidence in the record to support them. Dukes v. State, 621 N.W.2d 246, 251 (Minn.2001). The district court’s findings of fact will be upheld if not clearly erroneous. Id.. The decisions of a postcon-viction court will not be disturbed unless the court abused it discretion. Id.

I.

Sentencing Guidelines

The first issue is whether imposing appellant’s sentences consecutively was a departure from the sentencing guidelines. Unless it falls into one of the exceptions, the imposition of consecutive sentences is a departure from the sentencing guidelines. Minn. Sentencing Guidelines II.F. Minnesota Sentencing Guidelines II.F.2 allows a court to impose a permissive consecutive sentence for “[m]ultiple current felony convictions for crimes against persons.” Whether something is a crime against a person is a legal issue reviewed de novo. State v. Myers, 627 N.W.2d 58, 62 (Minn.2001).

The Minnesota Sentencing Guidelines do not define what constitutes a crime against a person. Under Minnesota caselaw this determination depends on the nature of the underlying conduct, not on how the crime is nominally classified. See Myers, 627 N.W.2d at 62-63; State v. Notch, 446 N.W.2d 383, 385 (Minn.1989); State v. Henderson, 394 N.W.2d 561, 563-64. Minnesota courts have found that even though burglary is a property crime, if it involves threatening the occupant with a knife it is a crime against a person. Notch, 446 N.W.2d at 385. Likewise a conviction for obstructing legal process was a crime against a person where it involved attempting to overpower and take away the handgun of a police officer who was driving at the time because it posed a special danger to a person’s life. Myers, 627 N.W.2d at 63.

The state contends that possession of a firearm by a felon is a crime against a person. While it is true that an individual must have been convicted of a crime of violence to be restricted from possessing a firearm under Minn.Stat. 624.713, subd. 1(b) (2000), and that possession of a weapon by a felon is considered a violent crime for purposes of increased sentences under Minn.Stat. § 609.1095, subd. 1(d) (2000), classification of possession of a firearm as a violent crime does not necessarily make it a crime against a person. Here, the use of the weapon during the commission of the crime is included in the elements of appellant’s aggravated first-degree robbery conviction. See Minn. Stat. § 609.245, subd. 1 (2000). Unlike Myers or Notch, the separate charge for possession of a firearm by a felon does not include any threat to a person and is not directed against a person. The underlying crime is just possession of a firearm. There is no requirement that it be “used.” Possession of a firearm by a felon, by itself, is not automatically a crime against a person. For this reason, sentencing appellant to consecutive sentences constituted a departure from the sentencing guidelines.

II.

Notice of Public Defender

The next issue is whether the district court erred by denying appellant’s petition for postconviction relief without notifying appellant of his potential right to a public defender.

A person who is financially unable to obtain counsel may apply for representation with the public defender. Minn.Stat. § 590.05 (2004). When pursuing postcon-viction relief, such a person is entitled to be represented by a public defender. Id. But, this entitlement exists only if (a) the person has not already had a direct appeal of the conviction, and (b) the person did not plead guilty and receive an imposed sentence that was a presumptive sentence or a downward departure. Minn.Stat. §§ 590.05; 611.14, subd. 2 (2004). If the petitioner/defendant files the petition without the assistance of counsel, the court administrator must send a copy of the petition to the state public defender’s office and advise the petitioner of such referral. Minn.Stat. § 590.02 (2004).

In PcLone v. State, the petitioner for posteonviction relief did not request a public defender, but the court administrator neglected to forward a copy of the petition to the state public defender’s office. 658 N.W.2d 896, 899 (Minn.App. 2003). The petition was denied without a hearing. Id. at 898. This court held that the failure of the court administrator to send this notice to the state public defender’s office meant that appellant had been denied his right to representation. Id. at 899-900. This court stated that the “right to counsel is deeply engrained in our society’s notions of fairness and justice” and that if proper procedure had been followed and counsel assigned, the merits of the petitioner’s arguments may have been viewed very differently. Id. at 899. This court then reversed and remanded to allow the petitioner to start over while represented by counsel. Id. at 900.

Here appellant is entitled to be represented by a public defender because he did not have a direct appeal and his guilty plea resulted in a sentence that was not the presumptive sentence or a downward departure. See Minn.Stat. § 590.05. In this cáse the court administrator sent the notice to the state public defender as required by statute. However, the public defender did not respond for about three months, and by then, the posteonviction court had already issued an order denying the petition for posteonviction relief. Unlike Paone, the court administrator’s duty of sending a copy of the petition- to the state public defender’s office was fulfilled.

The question, therefore, is whether appellant had the right to have the court inform him of his right to have counsel appointed for the posteonviction petition. The decision in Paone is consistent with a finding that appellant has a right to be informed of the right to counsel. Paone states that the right to counsel is an important right and concludes that the court’s failure to notify counsel of the case violated that right. 658 N.W.2d at 899-900. Importantly, our supreme court has stated that “Minnesota has a long tradition of assuring the right to counsel” and that the two most fundamental rights embodied in the Minnesota Bill of Rights are the right to counsel and the right to trial by jury. Friedman v. Comm’r of Pub. Safety, 473 N.W.2d 828, 831, 835 (Minn.1991).

The district court has a statutory duty to inform a petitioner that the petition has been forwarded to the state public defender’s office. Minn.Stat. § 590.02. As expressed by Friedman and Paone the right to an attorney in Minnesota is an important one. This right to counsel, of necessity and common sense, includes a right that the “right” be communicated to a petitioner. The district court has this duty to inform a pro se petitioner of the possible eligibility for representation by a public defender. It is unrealistic to assume a criminal defendant knows of this right or the conditions that must be satisfied to qualify for this right. Once the district court communicates this to the petitioner, the court can determine upon request whether the- petitioner meets the conditions to be entitled to representation by a state public defender.

We conclude the failure to communicate to appellant the possibility of representation by the public defender violated appellant’s right to counsel in the same way that the district court’s failure in Paone to forward the petition to the public defender’s office violated that petitioner’s right to counsel. Both kept a posteonviction petitioner from becoming aware of his right to the assistance of counsel. See 658 N.W.2d at 899-900.

Appellant also challenges his sentence on the grounds that his waiver of his right to be sentenced under the sentencing guidelines was not knowing, intelligent and voluntary as required by State v. Givens, 544 N.W.2d 774, 777 (Minn.1996). That we do not find. It appears from the record that the petitioner and his attorney understood the sentence petitioner had agreed to.

We reverse and remand to allow appellant to start over in his postconviction proceeding, this time represented by the state public defender. We make no determination on the underlying merits of appellant’s case.

DECISION

Imposing appellant’s sentences consecutively represented a departure from the guidelines. Appellant’s crime of possession of a firearm as a felon, was not a crime against a person.

Appellant was entitled to representation by a public defender on his petition for postconviction relief because he met the standard. The postconviction court did not communicate to appellant his right to court-appointed counsel. Thus, it became error for the district court to deny appellant’s unrepresented petition for postcon-viction relief. We therefore reverse and remand for proceedings consistent with this opinion.

Reversed and remanded.

      . It is not contested that aggravated first-degree robbery is a crime against a person.

      . The rule stated in Givens was modified by a later decision in State v. Misquadace, 644 N.W.2d 65 (Minn.2002). However, the holding in Misquadace was not retroactive. Id. at 72.


text:
    COMMUNITY PARTNERS DESIGNS, INC., Respondent, v. CITY OF LONSDALE, Appellant.
    No. A04-1919.
    Court of Appeals of Minnesota.
    June 14, 2005.

      Mark T. Solstad, John C. Beatty, East-lund, Solstad, Cade, & Hutchinson, Savage, MN, for respondent.
    Kyle E. Hart, Daniel L Abelson, Fa-byanske, Westra, & Hart, P.A., Minneapolis, MN, for appellant.
    Considered and decided by RANDALL, Presiding Judge; MINGE, Judge; and’ CRIPPEN, Judge.

       Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const, art. VI, § 10.

   OPINION

RANDALL, Judge.

Respondent (CPD) sued appellant city, contending that the city breached an agreement to pay for engineering services. Appellant moved to compel binding arbitration and stay the action, which the district court denied. Appellant brought this action arguing that the district court erred because a valid arbitration agreement exists, the city did not waive the agreement, and the dispute falls within the agreement. We reverse.

FACTS

On January 17, 2002, appellant contracted with respondent for engineering services. The contract addressed a variety of work and established a fee schedule. In addition, the contract contained an arbitration clause. The clause applied to disputes that may arise from the contract. The contract also included a termination clause. That clause states the appellant could terminate the contract with ten days notice but appellant must pay for services performed.

Respondent performed work, under the contract and received some payment. However, respondent’s records show a failure to pay dating back to March 5, 2003. The delinquent accounts continued until 2004. On January 16, 2004, appellant terminated the agreement according to the termination clause included in the contract. In accordance with the termination clause in the contract, respondent requested payment for services rendered. In documents dated January 26, 2004, respondent itemized the ■' unpaid invoices totaling $176,756.19. In a February 9, 2004 document respondents billed an additional $14,620.18 for a total debt of $191,376.37.

Respondent and appellant continued to disagree as to the amounts owed. Finally on June 21, 2004, respondents filed suit for breach of contract, unjust enrichment and promissory estoppel. On July 6, 2004, appellant served respondent with a draft motion to dismiss. On September 2, 2004, appellant moved to stay the action and compel binding arbitration in accordance with the contract. On September 29, 2004, the district court issued an order denying appellant’s motion. The order did not contain findings of fact or conclusions of law. This appeal followed.

ISSUE

Did the district court err in denying the appellant’s motion to stay the proceedings and compel binding arbitration?

ANALYSIS

Appellant argues that the district court erred in its determination that respondent’s claims need not be submitted to arbitration pursuant - to the terms of the parties’ arbitration agreement. An appellate court will review de novo a district court’s decision denying a motion to compel arbitration. Johnson v. Piper Jaffray, Inc., 530 N.W.2d 790, 795 (Minn.1995). “Determining whether a party has agreed to arbitrate a particular dispute is a matter of contract interpretation.” Id. In an action to compel arbitration, this court looks to the parties’ intentions as evidenced by the arbitration agreement’s language. Minnesota Fed’n of Teachers v. Indep. Sch. Dist. No. 361, 310 N.W.2d 482, 484 (Minn.1981).

A. Validity and Scope

Arbitration is a proceeding favored by the law as an efficient and inexpensive means of resolving disputes between contracting parties. Correll v. Distinctive Dental Servs., P.A., 607 N.W.2d 440, 445 (Minn.2000); Ehlert v. W. Nat’l Mut. Ins. Co., 296 Minn. 195, 199, 207 N.W.2d 334, 336 (1973). “When considering a motion to compel arbitration, the court’s inquiry is limited to (1) whether a valid arbitration agreement exists, and (2) whether the dispute' falls within the scope of the arbitration agreement.” Amdahl v. Green Giant Co., 497 N.W.2d 319, 322 (Minn.App.1993). But if there is no agreement to arbitrate, or if the controversy sought to be arbitrated is not within the scope of the contract’s arbitration clause, the court may interfere to protect a party from being compelled to arbitrate. Local 1119, AFSCME v. Mesabi Reg’l Med. Ctr., 463 N.W.2d 290, 295 (Minn.App.1990). However, if the scope of an agreement is reasonably debatable, the issue of arbitrability is to be determined initially by the arbitrator. Minnesota Teamsters Pub. & Law Enforcement Employees’ Union, Local 320 v. County of St. Louis, 611 N.W.2d 355, 359 (Minn.App.2000).

Generally, contracting parties are free to determine the scope and extent of their arbitration agreement, Lucas v. Am. Family Mut. Ins. Co., 403 N.W.2d 646, 648 (Minn.1987), and a written agreement to arbitrate is presumptively “valid, enforceable, and irrevocable.” Minn.Stat. § 572.08 (2004). Arbitration provisions are generally considered binding, and a significant body of authority exists supporting their enforcement. Mikel D. Johnson, Into the Void: Minnesota Limits Application of the Prima Paint Doctrine-Onvoy, Inc. v. Shal, LLC, 31 Wm. Mitchell L.Rev. 579, 581 (2004). Thus, if an agreement to arbitrate exists, the court must compel binding arbitration. Minn.Stat. § 572.09(a) (2004); Michael-Curry Co., Inc. v. Knutson Shareholders Liquidating Trust, 449 N.W.2d 139, 141 (Minn.1989).

Appellant argues that the arbitration provision is valid and that the present dispute falls within the scope of the provision. That provision provides that:

Arbitration of all questions in dispute under this [ajgreement shall be the choice of either party and shall be in accordance with the rules of the American Arbitration Association. This [ajgreement shall be specifically enforceable under the prevailing arbitration law and judgment (sic) upon the award rendered may be rendered in the court of the forum, state or federal, having jurisdiction. The decision of the arbitrators shall be a condition precedent to the right of any legal action.

This arbitration agreement, appellant argues, is nearly identical to arbitration clauses in other cases in which the Minnesota Supreme Court has ordered arbitration. See Har-Mar, Inc. v. Thorsen & Thorshov, Inc., 300 Minn. 149, 150-51, 218 N.W.2d 751, 753 (1974); Grover-Dimond Assocs. v. Am. Arbitration Ass’n., 297 Minn. 324, 325-26, 211 N.W.2d 787, 788 (1973). Further, appellant argues that the present claims arise from the alleged failure of the city to pay respondent and, thus, clearly fall within the scope of the arbitration agreement.

Respondent argues, on the other hand, that the agreement is ambiguous, extralegal, and non-binding.' Respondent also argues that at the district court level, besides raising claims on the grounds of breach of contract, it also raised equitable arguments of promissory estoppel and unjust enrichment. Respondent argues that these equitable claims are outside of the scope of remedies implied within' the contract, even if the contract calls for arbitration. We agree with appellant" that the contract is not unclear and that this matter belongs in arbitration.

Here, the contract sets forth in its provisions the requirement to arbitrate. The language of the contract states that either party shall have the choice to arbitrate.,. Logically this means that either party can demand arbitration. We conclude it cannot mean, as respondent urges, that “either party can bypass arbitration.” Respondent’s interpretation would make the entire paragraph meaningless.

The arbitration agreement is presumptively binding per Minnesota law. See Minn.Stat. § 572.08. It appears as if respondent is attempting to confuse the issue and negate its obligation to arbitrate this matter by arguing that rule 114 makes the arbitration prejudicial, since now there would be 'two nonbinding arbitrations. We disagree with respondent. Its argument is premised on the contract to arbitrate being “nonbinding.” We have concluded that it is binding!

Also, we reject respondent’s contention that this dispute falls outside of the scope of the arbitration agreemént. Contracts by their nature, involve the possibility of breach. If respondent’s arguments were validated by this court — it is hard to imagine any agreement to arbitrate that would be enforceable. Respondent presents run-of-the-mill breach of contract claims, and simply desires to be paid for work performed under the contract. Such claims were anticipated by the arbitration agreement.

B. Waiver

Next, appellant argues that it has not waived its right to arbitration. Minnesota favors arbitration as a means of conflict resolution, but the right to arbitration may be waived. Hughes v. Lund, 603 N.W.2d 674, 676 (Minn.App.1999). Waiver is the voluntary and intentional relinquishment of a known right. Har-Mar, 300 Minn. at 156-57, 218 N.W.2d at 756. The Minnesota Supreme Court addressed the issue of waiver in Brothers Jurewicz, Inc. v. Atari, Inc., 296 N.W.2d 422 (Minn.1980). The court noted:

Even though parties have an agreement to arbitrate disputes, an attempt by one of the parties to enforce such an agreement may under certain circumstances be challenged on the grounds of laches and waiver. We have held consistently that a party to a contract containing an arbitration provision will be deemed to have waived any right to arbitration if judicial proceedings based on that contract have been initiated and have not been expeditiously challenged on the grounds that disputes under the contract are to be arbitrated.

Id. at 428 (citations omitted). The party alleging waiver must provide evidence that the party that is alleged to have waived the right possessed both knowledge of the right in question and the intent to waive that right. Ill. Farmers Ins. Co. v. Glass Serv. Co., 683 N.W.2d 792, 798 (Minn.2004). Action by the party seeking arbitration which is inconsistent with the right to arbitration is not enough to support a finding of waiver unless such action is accompanied by prejudice to the objecting party. Hughes v. Lund, 603 N.W.2d at 676. As a general rule, issues of waiver and laches should be decided by the arbitrator rather than the court. Brothers Jurewicz. 206 N.W.2d at 426-27. The court defers to the arbitrator because these procedural issues are often intertwined with the substantive dispute intended for arbitration; we do not want to try an issue in two different forums. Id. at 427.

Appellant argues that it has not waived its right to arbitrate under the contract, because it notified respondent from the beginning of the present proceedings of its right to arbitrate under the contract. Respondent, on the other hand, argues that because appellant did not make a good faith effort to carry out the objective of the contract, it has impliedly waived any right arising from the contract to compel arbitration. Respondent seeks to bolster this argument with a supplemental letter submitted to this court, directing attention to Minn.Stat. § 471.425 (2004), which provides in part:

A municipality must pay each vendor obligation according to the terms of the contract or, if no contract terms apply, within the standard payment period unless the municipality in good faith, disputes the obligation If an invoice is incorrect, defective or otherwise improper, the municipality must notify the vendor within ten days of the date of receipt. Upon receiving a corrected invoice from the vendor, the municipality must pay the obligation within the standard payment period defined in subdivision 2.

Id., subds. 2, 3. Respondent argues that appellant’s disregard for the requirements of Minn.Stat. § 471.425 is evidence of appellant’s bad faith. We disagree. ■

Here, the timing of the preliminary encounter between the parties regarding payment is not outside of the norm when there is a dispute over services and payment on a contract. Respondent filed suit on June 21, 2004, and appellant responded with a draft motion on July 6, 2004, thereby notifying respondent that it would seek arbitration per the terms of the contract. On September 2, 2004, appellant moved to stay the action and compel binding arbitration in accordance with the contract. Although respondent argues that appellant acted in bad faith by not paying the invoices from March 5, 2003 through January 26, 2004, there was nothing stopping respondent from demanding payment on the debt, nor was there anything stopping respondent from initiating arbitration proceedings itself. We can understand respondent’s frustration. It is a business claiming to have performed services for the City of Lonsdale, and it appears the city has been both’ slow to pay and slow to go into any type of forum to resolve the issue. But we are riot going to rewrite the contract to substitute a district court lawsuit for the ealled-for arbitration. As obvious dicta, we suggest both parties move speedily to resolve a simple dollar and cents issue.

We find nothing in the record that would reflect a voluntary and intentional relinquishment of the right to arbitrate by appellant.

DECISION

The parties’ arbitration agreement was valid; it was not ambiguous; the dispute was within the scope contemplated by the arbitration agreement, and there was no waiver of the right to arbitrate this matter.

We reverse the district court’s order denying appellant’s motion to compel binding arbitration.

Reversed.

      . The record presented to this court does not make clear whether the parties' claims were considered by the district court, because the court did not provide a basis for its order.

      . In Har-Mar, the arbitration provision provided:
      Arbitration of all questions in dispute under this Agreement shall be at the choice of either party and shall be in accordance with the provisions, then obtaining, of the Standard Form of Arbitration Procedure of The American Institute of Architects. This Agreement shall be specifically enforceable under the prevailing arbitration law and judgment upon the award rendered may be entered in the court of the forum, state or federal, having jurisdiction. The decision of the arbitrators shall be a condition precedent to the right of any legal action, action.
      300 Minn, at 151, 218 N.W.2d at 753.
      In Grover-Dimond v. Am., the arbitration provision provided:
      Arbitration of all questions in dispute under this Agreement shall be at the choice of either party and shall be in accordance with the provisions, then obtaining, of the Standard Form of Arbitration Procedure of The American Institute of Architects. This Agreement shall be specifically enforceable under the prevailing arbitration law and judgment upon the award rendered may be entered in the court of the forum, state or federal, having jurisdiction. The decisions of the arbitrators shall be a condition precedent to the right of any legal action.
      297 Minn, at 325-26, 211 N.W.2d at 788.

      . Respondent argues that this court should deny enforcement of this agreement because the district court is already required to use non-binding alternative dispute resolution (ADR) pursuant to Minn. R. Gen. Pract. 114.01. Minn. R. Gen. Pract. 114 was adopted in response to the legislature’s mandate in 1993 that the supreme court promulgate rules establishing a “statewide alternative dispute resolution program. ” Nguyen v. State Farm Mut. Auto. Ins. Co., 558 N.W.2d 487, 489 n. 3 [Minn. 1997). Minn.Stat. § 484.76, subd. 1 (2004), directed that in most nonfamily law matters, “the rules shall require the use of nonbinding alternative dispute resolution processes in all civil cases, except for good cause shown.” The Rules state that "[a]ll civil cases are subject to Alternative Dispute Resolution (ADR) processes, except for those actions enumerated in Minn. Stat. § 484.76 and Rules 111.01 and 310.01 of these rules.” Minn. R. Gen. Pract. 114.01.
      Basically, respondent argues that enforcement of this arbitration agreement could result in double non-binding arbitration, because if this case makes it past the first arbitration (per the agreement in the contract) — the case may be required to pass through a second arbitration because the district court is required to demand a pretrial ADR proceeding per rule 114. As a result, respondent continues, it is absurd to require very expensive pre-litigation, nonbinding arbitration. Respondent further states that appellant's reliance on post-1994 cases is misplaced because those cases focus on binding arbitration cases.

      . Respondent relies on Niazi v. St. Paul Mercury Ins. Co., 265 Minn. 222, 231, 121 N.W.2d 349, 356 (1963) (stating in dicta that parties to an arbitration agreement are under a duty to act in good faith and failure to act in good faith should be treated as an implied waiver of the arbitration provision and if it results in demonstrable prejudice to the insured, the insurer should be denied resort to arbitration)'. This language is dicta, and although instructive, it is not binding on this court. See State v. Soukup, 656 N.W.2d 424, 431 (Minn.App.2003), review denied (Minn. Apr. 29, 2003). Also, we cannot assume from this record that, as a matter of law, appellants acted in bad faith.