author: DANIEL F. FOLEY, Judge

text:
    ST. PAUL FIRE & MARINE INSURANCE COMPANY, as a subrogee of the Minnesota Indian Primary Residential Treatment Center, Inc,, Appellant, v. HONEYWELL, INC., Respondent.
    No. C0-99-1324.
    Court of Appeals of Minnesota.
    May 30, 2000.

      Thomas R. Thibodeau, Johnson, Killen, Thibodeau & Seiler, P.A., Duluth, and Edward M. Kay, Clausen Miller P.C., Chicago, IL, for appellant.
    Jeannine L. Lee, Flynn & Gaskins, P.L.L.P., Minneapolis, for respondent.
    Considered and decided by TOUSSAINT, Chief Judge, PETERSON, Judge, and FOLEY, Judge.
   OPINION

DANIEL F. FOLEY, Judge

On April 3, 1997, appellant St. Paul Fire and Marine Insurance Company, as subro-gee of the Minnesota Indian Primary Residential Treatment Center (treatment center), filed a complaint alleging respondent Honeywell (1) breached its contract for preventive service, maintenance, and repair of the treatment center’s equipment and furnaces, and (2) negligently failed to properly service, maintain, and repair a furnace in the treatment center administration building. Appellant alleged respondent’s breach and negligence caused a furnace fire that resulted in $290,000 in damage to the treatment center. Respondent’s motion for summary judgment was denied and the case went to trial.

By special verdict form, the jury found the fire at the treatment center was directly caused by respondent’s (1) breach of its contract to service, maintain, and inspect the furnace, and (2) negligent failure to service, maintain, inspect, or repair the furnace. While the jury found the treatment center 20 percent contributorily negligent for the damages caused by the fire, the court initially ordered judgment for appellant and struck the jury’s 20 percent contributory negligence finding against the treatment center after considering appellant’s posttrial motions. Thereafter, respondent moved for JNOV or, alternatively, for a new trial.

Despite the jury’s special verdict in favor of appellant, the district court rejected appellant’s theory that respondent caused the October 14, 1995 fire by failing to properly tighten a pump flare fitting in November 1994 and perform preventive maintenance service in the fall of 1995. With regard to the loose flare fitting, the district court found there was no competent evidence to support appellant’s assertions and that any evidence that respondent altered or loosened the flare fitting before the fire was “speculative and based improperly on the occurrence of the accident.” In addition, the district court concluded that appellant’s theory was .contrary to the uncontroverted evidence that the furnace did not leak or malfunction between November 1994 and 1995. The district court also rejected appellant’s claim that respondent failed to provide preventive maintenance service because the contract had no specified date for such service, and the claim is speculative and improperly based on the occurrence of the fire itself. Concluding there was no competent evidence to sustain the verdict, the district court granted JNOV.

Appellant challenges the district court order granting respondent’s motion for JNOV or alternative motion for a new trial. Because there is sufficient evidence to sustain the jury verdict, we reverse and reinstate the jury verdict.

FACTS

In 1980, the treatment center contracted with respondent to provide “preventive maintenance,” replace components that are “worn, failed, or doubtful,” and provide emergency service. The contract also required respondent to make a minimum of “eight visits per year,” perform periodic maintenance, and “do seasonal start-ups in the spring and fall.” Following the addition of the administration office building in 1988, respondent agreed to service the administration building furnace in addition to the treatment center’s other four furnaces.

Jeff Johnson, the treatment center’s business manager, testified that only respondent serviced the furnaces. Jerry Lundberg is the service representative assigned to service and maintain the treatment center’s furnaces. As reflected by Lundberg’s service reports, he typically performed preventive maintenance on the furnaces in September and October, but the contract did not specify a particular date for such service. The service reports indicate that annual fall preventative maintenance was performed each year except 1995.

On November 3, 1994, Lundberg was called to service the administration building furnace because it had a “funny odor” and “didn’t seem to be burning properly.” Lundberg’s service report indicates “blow back on Adminstration furnace” due to lottery tickets blocking the chimney elbow. Linda Bubacz, a housekeeper for the treatment center, called Lundberg on November 11, 1994, after detecting no heat in thfe administration building, smelling oil in the furnace room, and observing a puddle of oil on the floor. Lundberg’s November 11, 1994,' service report indicates there was “no heat in office area,” the “pump couplings [were] stripped,” and he “replaced [the] couplings.” While the parties dispute whether “office' area” meant the administration building or offices in the treatment center, Johnson testified that Lundberg meant the “office area in the administration building,” and Bubacz testified that she took Lundberg to the administration building furnace room.

In order to fix a stripped pump coupling, Lundberg testified that he had to remove the pump. Lundberg explained removing the pump required him to loosen the upper flare fitting on the pump, loosen the fitting on the supply line (the inlet supply of pressure to the pump), and loosen set screws fastening the pump to the burner housing. After loosening those items, Lundberg testified that the pump slides right out and that nothing has to be done to the fitting on the output tube attached to the pump. He explained that after replacing the stripped coupling he restarted the furnace and observed it in operation to determine if it was working properly.

While Lundberg returned to the treatment center on at least three occasions during the 1994-95 heating season for routine inspection of the furnaces, he noted nothing out of the ordinary. Johnson, who entered the furnace room twice daily to turn lights on and off, did not report any malfunctioning or problems prior to the fire. Similarly, Bubacz did not detect the smell of fuel oil after Lundberg’s November 11, 1994 service call, despite entering the furnace room weekly for cleaning supplies.

On October 14, 1995, Karen Lindholm noticed black smoke in the administration building while retrieving a vacuum cleaner. Lindholm reported the fire to fellow employees Keith Lind and Curt Rainey who sounded the fire alarm. Rainey and Lind went to the administration building with fire extinguishers and discovered the fire after opening the furnace room door. Rai-ney testified that he simply saw a big flame until he unloaded the fire extinguisher on the flame and saw the furnace was burning. Other than the furnace, Rainey saw nothing else burning in the furnace room. While the record does not indicate whether Rainey closed the furnace room door before leaving, his trial testimony shows he hurried to leave the furnace room.

Fire departments from Perch Lake and Cloquet responded to the fire. Cloquet fireman, Brad Juntunen, testified at a May 22, 1998 deposition that he remembered the furnace room door being open, but also that he recalled having to pry open the interior and exterior doors to the furnace room. While Juntunen did not recall using foam to fight the fire, he explained the inside crew was using a line from the Perch Lake fire engine and only knew that Cloquet’s engine did not use foam. Instead, Juntunen explained that the firemen used traditional water and ventilation methods to extinguish the fire and testified that the fire was difficult to extinguish because it rekindled itself several times. The evidence shows that the Perch Lake Fire Department billed the treatment center for the use of foam and some firemen recall using foam, while others do not. Steve Olson, Perch Lake Volunteer Fire Department’s fire chief, reported that the fire originated in the furnace room based upon his review of the burn patterns and interviews with the firemen. Olson arrived after the fire had been extinguished. Therefore, his conclusion that fuel oil had ignited was based on the firemen’s statements regarding the difficulty of extinguishing the fire and the use of class b foam, which is typically used to extinguish combustible liquid fires. Because firemen reported having to shut off a valve controlling the flow of Duel oil, Olson also concluded the fuel line failed as a result of the fire and fuel oil continued to pump from an underground tank.

Mark Germain, a fire investigator from the State Fire Marshall’s Office, investigated and photographed the fire scene the day of the fire. Germain found no evidence of leaking oil lines to the furnace, oil on the floor or anything combustible burning at or near floor level between the furnace and the furnace room door. Based on his burn-pattern analysis and witness statements, Germain concluded the fire originated inside the furnace or right outside the furnace. Germain also testified there was no lower burn damage to substantiate a fuel oil leak except towards the front of the furnace and the burn patterns corroborate Rainey’s statement that the fire came from inside the furnace. Crawford Wiestling, a fire cause and origin investigator, visited the fire scene on October 18, 1995. During his initial investigation, Wiestling photographed the furnace room, furnace room door, and debris, and took smudge samples from various locations in the structure. On October 27, Wiestling and Sid Bhatt, a professional engineer specializing in oil furnace fires, examined the fire scene and Wiestling reported checking the fuel oil valve. Following their on-site investigation, Wiestling and Bhatt loaded the furnace on a trailer and transported it to a storage locker in Prior Lake.

In July 1996, potentially interested parties removed the furnace from the storage locker for inspection. The burner was removed during this inspection. At a second inspection in September 1996, the pump and transformer were tested and leaks were found at the shaft seal and pump gasket. Following a decision to conduct additional testing on the burner in Plymouth, Bhatt discovered a loose flare fitting. In June 1997, Bhatt and Honeywell representatives returned to the treatment center to further investigate the fire scene and other oil furnaces.

Following his investigations, Wiestling found no evidence of oil residue on the floor and a lack of lower burn damage to the furnace room door, interior doorframe, and hallway. Wiestling testified that the fire damage was limited to the top of the furnace room door and “high tracking” across the tops of adjacent doors. Wies-tling noted evidence of low burning only between the furnace and the door and full radiant heat impingement on the inside of the furnace room door. Additionally, Wiestling concluded there was no fuel oil ablaze on the floor in front of the furnace because the casing on the pump was not oxidized, the fuel housing “still retained its bright shiny color,” and the electrical conduit behind the wall had not been affected by high heat at floor level. Based on his investigations, observations, and the evidence, Wiestling concluded the fire started inside the furnace and traveled by “radiant energy” out the furnace’s inspection port.

On October 27, 1995, Bhatt visually inspected and photographed the furnace and furnace room and disassembled electrical components to inspect the circuits. While Bhatt did not observe fuel oil residue on the floor or much evidence of floor-level fire damage, he observed significant heat damage to electrical wire insulation at elevated locations. Bhatt also testified that the soot he found in the combustion chamber was abnormal for a “properly operating furnace.” During the joint inspections of the burner, Bhatt found a loose flare fitting while loosening the fitting connecting the oil tube to the pump and carbon deposits around the loose flare fitting. Based on his examination of the burner and observations of the furnace and furnace room, Bhatt opined the fire was caused by delayed ignition of the furnace from oil leaking around the loose fitting.

■ Respondent’ retained Richard “Smokey” Dyer, a fireman with 25 years experience investigating fires, to determine the origin of the fire, its probable ignition source, what material was originally ignited, and the mode of propagation. To render his conclusions, Dyer reviewed physical evidence collected from the- furnace room and reports prepared by the Cloquet and. Perch Lake Fire Departments, the State Fire Marshall’s office, and the independent fire investigator. Dyer also reviewed numerous photographs and the deposition testimony of treatment center employees, eyewitnesses, and experts. At trial, Dyer admitted he is neither a furnace expert nor qualified to testify as to how the oil leaked or was ignited.

Respondent also hired John Forss to determine the cause of the fire. However, Forss, a 30-year Honeywell employee, testified at trial that he does not consider himself an expert in determining the cause and origin of fires. Forss currently owns his own consulting firm and handles 100-150 claims annually for respondent. Forss attended the joint inspections of the furnace and burner in July 1996 and the disassembly, inspection, and testing of the burner in September 1996. To render his conclusions and opinion, Forss reviewed the fire reports, maintenance service reports, statements, depositions, and manuals from other furnace burner manufacturers. In addition, Forss visited the treatment center in June 1997 to look at the facility’s other oil'furnaces and pumps to help visualize the system prior to the fire.

ISSUES

I. Did the district court err in granting respondent’s motion for JNOV?

II. Did the district court err in further ordering that respondent’s alternative motion for new trial be granted in the event JNOV is reversed or vacated?

ANALYSIS

I.

A district court’s grant of JNOV raises a question of law, which is reviewed de novo. Diesen v. Hessburg, 455 N.W.2d 446, 449 (Minn.1990). JNOV should not be granted unless the evidence, viewed in the light most favorable to the verdict, is “practically conclusive against the verdict and reasonable minds can reach only one conclusion.” Id. at 452 (citation omitted). However, a district court may grant JNOV and set aside a special verdict when the evidence does not sustain the verdict or the jury’s findings are contrary to the law. Id. In this case, each party presented a theory of causation and evidence in support of its position.

Causation Theories

Appellant’s furnace-fire expert, Sid Bhatt, opined Lundberg’s failure to tighten the flare fitting after servicing the furnace in November 1994 directly caused the fire. Because a loose flare fitting would cause oil to leak or spray while the furnace was running, Bhatt explained that oil would be sucked into the burner tube and coat the porcelain insulators and ends of the electrodes with a sticky buildup of dirt, lint, and particles. Bhatt testified that electric current would flow through the contaminated materials on the insulators, bypassing the high voltage output that should be going to the electrodes to produce a spark. He explained that electric current flowing through the contaminants could short out the furnace or cause arcing and sparking on the insulator surfaces. Until the contaminants are burned off and the spark returns to the nozzle, Bhatt explained that furnace ignition would be delayed, causing a larger than normal volume of oil vapor and air to collect. Concluding the resulting ignition could be a puff, bang, or worse, Bhatt opined that delayed furnace ignition caused the fire.

Alternatively, respondent argued the fire was caused by an oil leak, resulting from a sudden failure of the pump seal after treatment center personnel left the furnace room on October 13, 1995. Respondent contended oil vapors ignited in the normal operation of the furnace after oil had accumulated in the furnace and spilled onto the furnace room floor. In support of its “sudden failure” causation theory, respondent presented the testimony of Richard “Smokey” Dyer and John Forss.

Based on his examination of photographs two and a half years after the fire occurred, Dyer found no evidence of radiant heat impinging the furnace room door at the level of the furnace inspection port, excessive heat damage to the furnace’s interior, or combustible materials in the furnace room to be ignited by radiant heat. Instead, Dyer found low burn damage in the southwest corner of the furnace room and significant damage to the entire inside of the furnace room door.

Based on the low-level burn patterns in the southwest corner of the furnace room, the firemen’s use of foam and their difficulty in extinguishing the fire, and the lack of other combustible materials in the furnace room to support the fire, Dyer opined fuel oil vapors ignited in the furnace vestibule and heated the spilled oil on the concrete floor to its flash point, spreading the fire throughout the furnace room. While Germain and Wiestling did not find evidence of fuel oil on the furnace room floor, Dyer still concluded it was a fuel oil fire on the floor because the fire would have consumed most of the fuel oil and there was no absorbent material to retain the fuel oil vapors.

Dyer testified that the burn patterns were consistent with a two-gallon fuel oil fire and the proper concentration of fuel oil vapors will ignite around 110 degrees Fahrenheit. The evidence shows it was 30-40 degrees outside on October 14, 1995 and on-scene inspectors did not detect fuel oil on the floor. Moreover, Dyer did not test or inspect similar furnace models to determine if the front wall of the furnace or the concrete floor could reach 110 degrees and admitted he is neither a furnace expert nor qualified to testify as to how the oil leaked or was ignited.

Dyer rejected appellant’s theory that the fire communicated throughout the room by radiant heat energy. Because the aluminum insulation inside the furnace was not melted, despite its melting temperature of 1200. degrees, Dyer concluded the furnace did not reach 2000-2500 degrees Fahrenheit or give off radiant heat rays. Although Rainey and Lind said nothing about seeing a fire on the floor and reported seeing and fighting the fire inside the furnace, Dyer interpreted their deposition testimony to mean they discharged the extinguishers in the direction of the furnace. Other than considerable damage to the furnace, Dyer found no evidence consistent with an internal furnace fire and rejected all other possible fire causes.

Forss attended the joint inspection where Bhatt discovered the loose flare fitting. Forss opined Lundberg’s service in November 1994 did not cause the loose flare fitting to leak because the furnace went through the 1994-95 winter heating season without incident. Instead, he concluded the fitting became loose on the day of the fire because a loose fitting prior to the fire would have dripped fuel oil and nobody detected the smell of fuel oil. While Forss could not explain how the flare fitting became loose, he believed it might have loosened during a knock down of the room following the fire or during transportation for off-site inspection of the furnace and burner.

Because the loose flare fitting and fuel oil leak were not detected, Forss opined some external, unpredictable event, like sudden wear or failure of a component, caused the properly serviced oil furnace in the administration building to leak oil and start the fire. While Dyer testified that fuel-oil vapors must reach 110 degrees to ignite, Forss explained that the oil leaking from the pump into the furnace vestibule is hot enough to light the vapors. Therefore, Forss concluded a sudden increase in pressure in the oil line caused the oil pump seal to blow, resulting in a continuous oil leak into the lower compartment of the burner and spilling onto the concrete floor.

Forss disagreed with Bhatt’s delayed ignition theory because he did not believe that (1) the flare fitting at the end of the output tube would have to be loosened to replace a stripped coupling; (2) oil would spray out of the loose flare fitting; and (3) oil coating the electrodes would result in delayed ignition. Because a pump leak, unlike a loose fitting leak, would cause the continuous flow of oil even if the furnace shut down, Forss rejected appellant’s causation theory. Even if the oil was sucked into the burner’s combustion chamber, Forss testified he would still conclude a pump, leak caused-the fire because arcing and sparking would not fool the furnace’s flame sensor and burner control, which would have shut down the furnace when ignition did not occur within the set time period.

Review of the Verdict

By special verdict form, the jury found respondent directly caused the fire by negligently failing to service, maintain, inspect or repair the treatment center furnace, and breaching its service and maintenance contract.. In granting JNOV, the district court concluded appellant’s causation theory was speculative and not supported by competent evidence. In considering a motion for JNOV, a district court “must view all the evidence in the light most favorable to the verdict” and “may not weigh evidence or judge witness credibility.” B & H Inv. Co. v. Union Stockyards Co. of Fargo, 513 N.W.2d 264, 267 (Minn.App.1994), review denied (Minn. May 17, 1994). If a jury verdict has any reasonable evidentiary support, both the trial court and appellate court must accept it as final Brubaker v. Hi-Banks Resort Corp., 415 N.W.2d 680, 683 (Minn.App.1987), review denied (Minn. Jan. 28, 1988). De novo review requires this court to examine the record to determine whether the evidence can support the special jury verdict, and is consistent with the law. Diesen, 455 N.W.2d at 452.

Appellant’s causation theory is supported by evidence showing that (1) Lund-berg replaced a pump coupling on the administration building furnace on November 11, 1994, (2) Lundberg had to remove some flare fittings to replace the pump coupling; (3) a loose flare fitting leaks oil; (4) a loose flare fitting can be discovered by proper inspection; and (5) Bhatt discovered carbon deposits on the sides of a loose flare fitting. There is expert testimony that a properly tightened flare fitting will not loosen by itself even under the extreme conditions of a fire and no other flare fittings were found loosened from the fire or transportation. Respondent’s service contract does not specify a date for fall maintenance of the furnaces, but the evidence shows Lundberg provided such service in September and October each year except 1995, the year of the fire. While Lundberg testified about his maintenance service on numerous other occasions, he was unable to recall his November 11, 1994 service of the administration building furnace.

As additional support for its theory that the fire started inside the furnace, appellant presented evidence and photographs illustrating more extensive burn damage to the upper portion of the walls, door, and doorframe of the furnace room. After investigating the fire scene, Germain and Wiestling each concluded it was an internal furnace fire rather than a floor fire because the burn patterns showed less lower burn damage. In addition, both parties agree no fuel oil residue was detected on the floor. But while appellant contends the lack of detection is evidence of respondent’s negligent maintenance and breach of the service contract, respondent argues the fuel oil was burned off by the fire or that there was no loose flare fitting or oil leak to be detected. This conflict in the evidence was for the jury to resolve.

Moreover, appellant argues the lack of damage on the exterior side of the furnace room door is consistent with an internal furnace fire because a fire on the floor would have damaged the lower portion of both sides of an open furnace room door. While the parties dispute whether the furnace room door was open during the fire, the evidence is inconclusive. Appellant contends it is reasonable to infer Rainey left the furnace room door open because he testified he was in a hurry to get away from the fire. Cloquet fireman Juntunen initially testified he believed the door to the furnace room was open when they arrived, but later recalled firemen having to pry open both doors to the furnace room.

Appellant also contends it was an internal furnace fire because Rainey and Lind said they discharged fire extinguishers on the furnace and saw flames coming up from the furnace’s interior. In contrast, respondent argues it was a combustible fuel-oil fire on the floor because the fire was fought with foam. While the parties dispute the use of foam, the evidence shows that the Perch Lake Fire Department billed the treatment center for the use of foam, the Cloquet fire engine parked behind the building did not use foam, and some fireman recalled using foam, while others did not.

Each party presented its causation theory. Respondent only objected to Bhatt’s testimony regarding whether its negligent maintenance and failure to inspect the administration building furnace directly caused the fire. While there is conflicting expert opinion testimony and evidence regarding causation, the record amply supports the jury’s special verdict findings that Honeywell caused the fire by negligently failing to service and maintain the furnace and breaching its service and maintenance contract. The central issue as to causation — the start of the fire — was a jury question. Because we cannot conclude the evidence is practically conclusive against the verdict such that reasonable minds can reach only one conclusion, JNOV was improper. Id.

In addition, the jury’s verdict is consistent with the law. It is within the province of the jury to weigh conflicting testimony and determine witness credibility. Tsudek v. Target Stores, Inc., 414 N.W.2d 466, 469 (Minn.App.1987), review denied (Minn. Dec. 13, 1987). Causation is a question of fact for the jury and the jury’s finding will not be set aside unless it is manifestly and palpably contrary to all the evidence viewed in the light most favorable to the verdict. Savage v. K-Mart Corp., 393 N.W.2d 25, 27 (Minn.App.1986). In concluding appellant failed to establish causation, the district court impermissibly weighed evidence and judged witness credibility. See B & H Inv. Co., 513 N.W.2d at 267 (requiring district court to view evidence in light most favorable to verdict without weighing evidence or judging witness credibility). A verdict is not rendered contrary to law simply because the district court believed the evidence supported an alternative result. See Covey v. Detroit Lakes Printing Co., a Div, of Forum Pub. Co., 490 N.W.2d 138, 142 (Minn. App.1992) (explaining jury’s answers will not be set aside unless perverse and palpably contrary to the evidence); Tsudek, 414 N.W.2d at 469 (refusing to disturb special verdict if it is reconcilable on any theory). Because there is competent evidence to sustain the verdict and causation presents a question of fact for the jury, not a question of law for the court, the district court erred in granting JNOV.

II.

The trial court further ordered that in the event JNOV was reversed or vacated, respondent’s motion for new trial was granted because the “jury’s verdict is not justified by the evidence and is contrary to law.” A district court’s discretion to grant a new trial will not be disturbed absent a clear abuse of that discretion. Halla Nursery, Inc. v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn.1990). However, a district court should not grant a new trial

unless the verdict is so contrary to the preponderance of the evidence as to imply that the jury failed to consider all the evidence or acted under some mistake or from some improper motive,bias, feeling or caprice, instead of honestly and dispassionately exercising its judgment. • •'

Lamb v. Jordan, 333 N.W.2d 852, 855-56 (Minn.1983) (citation omitted); see also Eliason v. Textron, Inc., 400 N.W.2d 805, 807 (Minn.App.1987) (explaining new trial motions should be granted cautiously and reluctantly). Here, the evidence justifies the verdict and there is no indication the jury failed to consider all the evidence or acted under some mistake, improper motive, bias, or caprice. Therefore, we must also reverse 'the district court’s order granting respondent’s alternative motion for new trial.

In its reply brief, appellant stresses that “the case essentially turned upon the credibility of the witnesses.” We agree. Appellant seeks reinstatement of the judgment entered upon the special verdict, which we grant by this decision. The effect of this decision is to reinstate the 20 percent finding of fault entered against the treatment center.

DECISION.

The district court improperly granted JNOV. because the jury’s special verdict findings that respondent’s negligence and breach of contract .caused the fire were supported by the record and consistent with the law. The district court improperly granted respondent’s alternative motion for new trial because there was sufficient evidence to sustain the verdict and no indication of juror misconduct was shown. Thus, we reverse and remand with instructions to reinstate the jury verdict and to otherwise proceed in accordance with this decision.

Reversed and remanded.

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


source: Caselaw Access Project

author: SCHUMACHER, Judge

license: Public Domain

text:
    Patrick J. SUTTON, on behalf of himself and all others similarly situated, Appellant, v. VIKING OLDSMOBILE NISSAN, INC., Respondent.
    No. C2-99-1843.
    Court of Appeals of Minnesota.
    June 2, 2000.

      Thomas J. Lyons, Jr., Consumer Justice Center, Maplewood, for appellant.
    William L. Davidson, Sarah E. Morris, Lind, Jensen, Sullivan & Peterson, Minneapolis, for respondent.
    Considered and decided by ANDERSON, Presiding Judge, SCHUMACHER, Judge, and PETERSON, Judge.
   OPINION

SCHUMACHER, Judge

Appellant Patrick J. Sutton, on behalf of himself and all others similarly situated, sued respondent Viking Oldsmobile Nissan, Inc., alleging Minnesota Motor Vehicle Retail Installment Sales Act violations, consumer fraud, common-law fraud, breach of contract, and breach of fiduciary duty. Viking brought a motion for summary judgment on all claims, which the district court granted. We affirm in part and reverse in part.

FACTS

Sutton bought a truck from Viking. In' connection with the sale, Viking also sold Sutton an extended service contract for $1,495 and two credit insurance policies that cost a total of $1,527.69. Sutton financed these purchases as part of the installment financing for the truck. The retail installment sales contract Sutton signed stated that these amounts would be paid to others on his behalf:

Itemization of the Amount Financed:
⅜ ⅜ ⅜ ⅝
(4)Amounts Paid to Others on my behalf: Service contract $ 1495.00
To public officials $ 9.50
To insurance companies $ 1527.69
Total Amounts Paid to Others $ 3032.19

It is undisputed, however, that Viking did not pay $3,032.19 to others on Sutton’s behalf. Viking paid North American Warranty Services $752 for the extended service contract and kept the remaining $743 as profit. Viking did pay $1,527.69 as a credit insurance policy premium to American National Insurance Company, but received back $152.77 as a commission. Sutton testified that if he had known that Viking would keep almost 50% of the cost of the extended service contract as profit, he would have tried to negotiate a lower price. If the dealership had been unwilling to negotiate a lower price, Sutton testified that he would not have purchased the service contract.

ISSUE

Did the district court err by granting Viking’s summary judgment motion?

ANALYSIS

On an appeal from summary judgment, we ask whether there are any genuine issues of material fact in dispute and whether the trial court erred in applying the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). We review the district court’s interpretation of the law de novo, including questions of statutory interpretation. Sorenson v. St. Paul Ramsey Med. Ctr., 457 N.W.2d 188, 190 (Minn.1990). We view the evidence in the light most favorable to the party against whom summary judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993). We will affirm a grant of summary judgment if- it can be sustained on any ground. Winkler v. Magnuson, 539 N.W.2d 821, 828 (Minn.App.1995), review denied (Minn. Feb. 13, 1996).

1. Sutton first contends that Viking violated the Minnesota Motor Vehicle Retail Installment Sales Act, which provides that “[e]very retail installment -contract '* * * shall contain all the agreements of the parties.” .Minn.Stat. § 168.71(a)(1) (1998). Sutton .denies that he had any unwritten agreement with Viking for it to keep part of the money it. charged him for the extended service contract or to receive a commission on the sale of the credit insurance. The gravamen of Sutton’s suit is that Viking received its profits without his knowledge, because the contract led him to believe that those amounts would be paid to others on his behalf.' There is no evidence that Sutton had any agreement with Viking concerning the profits it would receive or keep. Absent such an agreement, Viking did not violate the Minnesota Motor Vehicle Retail Installment Sales Act provision requiring the retail installment sales contract to include “all the agreements of the parties.” The district court properly granted summary judgment on this claim.

2. Sutton next claims that Viking violated the Prevention of Consumer Fraud Act, which provides as follows:

The act, use, or employment by any person of any fraud, false pretense, false promise, misrepresentation, misleading statement or deceptive practice, with the intent that others rely thereon in connection with the sale of any merchandise, whether or not any person has in fact been misled, deceived, or damaged thereby, is enjoinable as provided herein.

Minn.Stat. § 325F.69, subd. 1 (1998). As a consumer protection statute remedial in nature, the consumer fraud act is to be liberally interpreted in favor of protecting consumers. Boubelik v. Liberty State Bank, 553 N.W.2d 393, 402 (Minn.1996). Sutton argues that because the entire amounts for the extended service contract and the credit insurance policies were not actually paid to others on his behalf, Viking used a false promise, misrepresentation, or misleading statement in connection with its sale of merchandise to him.

Indeed, Viking did not pay to others the entire $1,495 the contract listed as an “Amount Paid to Others on [Sutton’s] behalf’ for the extended service contract. Instead, Viking paid North American Warranty Services $752 for the extended service contract and kept the remaining $743. Similarly, while Viking did pay to American National Insurance Company the entire $1,527.69 listed on the retail installment sales contract as an amount paid to “insurance companies,” that entire amount was not paid to the insurance companies “on [Sutton’s] behalf.” Instead, Viking received back $152.77 from American National Insurance Company as a commission on the sale of the policies. As a result, Viking made a “false promise, misrepresentation [or] misleading statement” within the meaning of the consumer fraud act with regard to these payments.

Viking nonetheless argues that Sutton cannot show a prima facie violation of the consumer fraud act because he cannot show that Viking made a “material misrepresentation.” Viking argues that because Sutton testified that he knew that Viking would receive part of the price of the service contract, its failure to accurately say so on the retail installment sales contract was not a material misrepresentation.

This argument fails for several reasons. First, the statute contains no requirement that any misrepresentation be “material.” A minor or inadvertent misrepresentation might not be actionable if the retail seller lacked “intent that others rely thereon in connection with the sale of any merchandise,” Minn.Stat. § 325F.69, subd. 1, but if the retail seller makes an immaterial misrepresentation with the intent that a consumer rely on it in connection with the sale of merchandise, nothing in the statute prevents the misrepresentation from being actionable. See Ullom v. Independent Sch. Dist. No. 112, Chaska, 515 N.W.2d 615, 617 (Minn.App.1994) (court may not add words to statute).

Second, for the purpose of this appeal, Sutton did not, as Viking alleges, “specifically admití ] that he knew Viking would retain part of the purchase price of the service contract.” Sutton testified in part as follows:

Q: Did you realize at the time that some part of the $1495 would be Viking’s share?
A: No, I figured it was the insurance company or the people that had the service contract.

Although Sutton later gave an answer that Viking relies upon for its assertion, that answer is less clear than his first one, because it is phrased in present tense, rather than in past tense referring to what Sutton knew at the time of the transaction. Because we view the evidence in the light most favorable to the party against whom summary judgment was granted, Fabio, 504 N.W.2d at 761, we must reject Viking’s interpretation of Sutton’s testimony.

Finally, the plain language of the statute forecloses Viking’s argument. The statute provides that false statements and misrepresentations made with the intent that a consumer rely on them in connection with the sale of merchandise violate the statute “whether or not any person has in fact been misled, deceived, or damaged thereby.” Minn.Stat. § 325F.69, subd. 1. Sutton’s alleged knowledge' that Viking would retain part of the $1,495 is therefore irrelevant: even if he knew that, and therefore was not deceived by the contract’s statement to the contrary, such a misstatement made with the intent to induce reliance is still actionable, according to the plain terms of the statute.

The district court held that even if there had been a misrepresentation, Sutton was not entitled to judgment “because there is no evidence that he was damaged.” It is true that, despite the statute’s language providing a cause of action “whether or not any person has in fact been * * * damaged thereby,” Minn. Stat. § 325F.69, subd. 1, the Minnesota Supreme Court has held that absent “injury,” there is no basis for recovery under the consumer fraud act. K.A.C. v. Benson, 527 N.W.2d 553, 562 (Minn.1995). But the district court clearly erred by stating there was no evidence Sutton was damaged. Sutton testified that if he had known the extent of Viking’s profit on the service contract, he would have negotiated a lower price or refused to buy it. Sutton therefore either overpaid for the service contract or lost the opportunity to refuse to buy it because of the large profit Viking, would make on it. That financial detriment is an “injury,” and the district court erred by concluding otherwise.

Therefore, Viking did in fact make a misrepresentation in connection with the sale of merchandise within the meaning of the consumer fraud act. The only question that remains is whether Viking intended Sutton to rely on the misrepresentation, and that is a question of fact. The district court erred by awarding summary judgment to Viking on this claim.

3. Sutton also argues that Viking made an intentional misrepresentation rendering it liable for common-law fraud. An intentional misrepresentation claim requires plaintiffs to allege that defendant (I) made a representation (2) that was false (3) having to do with a past or present fact (4) that is material (5) and susceptible of knowledge (6) that the representer knows'to be false or asserts without knowing whether the fact is true or false (7) with the intent to induce the other person to act (8) and the person .in. fact is induced to act (9) in reliance on the representation (10)that the plaintiff suffered damages (II) attributable to the misrepresentation. Florenzano v. Olson, 387 N.W.2d 168, 174 n. 4 (Minn.1986).

Relying on an unpublished federal district court opinion, the district court held there was a

presumption that as a reasonable consumer, the Plaintiff knew or should have known that the Defendant was being compensated for selling the products and services to him,

implying that it was unreasonable as a matter of law for Sutton to irely on the contract’s representation that the entire cost of the service contract was being paid to others on Sutton’s behalf. But there is no such presumption in Minnesota law. In fact, Minnesota law is to the contrary, providing that the reasonableness of a plaintiffs reliance is ordinarily a question of fact for the jury. Nicollet Restoration, Inc. v. City of St. Paul, 533 N.W.2d 845, 848 (Minn.1995). The reasonableness of Sutton’s reliance on the express terms of the contract is a question of fact inappropriate for summary judgment.

The district court also erred by stating that Sutton had produced “no evidence that Defendant intended to defraud the Plaintiff when it failed to itemize the

commissions it received from the contract.” But “[t]here is no doubt of fraudulent intent when the misrepresenter knows or believes the matter is not as he or she represents it to be.” Florenzano, 387 N.W.2d at 173. Contrary to the district court’s finding, Sutton did adduce evidence that could lead a rational trier of fact to conclude that Viking knowingly and falsely represented that the entire $1,495 would be paid to others on Sutton’s behalf. The question of fraudulent intent is usually for the jury. Haven v. Neal, 43 Minn. 315, 316, 45 N.W. 612, 613 (1890). The district court erred in basing summary judgment on this ground.

The court also erred when it said that Sutton

presented no evidence that he would have sought or discovered more favorable terms on the credit life and credit disability insurance and service contract had he known the Defendant was to receive the commissions.

As noted above, Sutton testified that if he had known that Viking would keep almost 50% of the cost of the extended service contract as profit, he would have tried to negotiate a lower price for the service contract. If the dealership had been unwilling to negotiate a lower price in such a situation, Sutton testified, he would not have purchased the service contract. This was sufficient evidence to preserve for the jury the issue whether Sutton was damaged as the result of Viking’s misrepresentation.

Sutton has alleged facts sufficient to make out a prima facie case of common-law fraud. The district court erred in granting summary judgment for Viking on this claim.

4. Sutton also brought a breach of contract claim. But a plaintiff may not recover for breach of contract without showing damages resulting from the breach. Lipka v. Minnesota Sch. Employees Ass’n, Local 1980, 537 N.W.2d 624, 631 (Minn.App.1995), aff'd, 550 N.W.2d 618 (Minn.1996). Sutton suffered no damages from any breach of contract Viking may have committed. Sutton received the benefit of his bargain, because he got the insurance and service contract. Sutton’s damages, if any, resulted from the contractual misrepresentation, not from Viking’s failure to actually pay the amount on the contract. Absent damages resulting from the breach itself, Sutton may not recover for breach of contract. The district court did not err in granting summary judgment for Viking on this claim.

5. Finally, the district court found that no fiduciary relationship arose between Viking and Sutton because they were negotiating a commercial transaction at arm’s length. Absent a showing of special circumstances, this has long been the law in Minnesota. See, e.g., Shema v. Thorpe Bros., 240 Minn. 459, 467, 62 N.W.2d 86, 91 (1953) (“[I]t is clear that the parties were dealing at arm’s length, and in such a situation a fiduciary relationship cannot be said to exist between the parties.”). The district court did not err in granting summary judgment on this claim.

Our resolution of these issues makes it unnecessary for us to address Sutton’s contention that the district court erred by unquestioningly adopting the respondent’s proposed findings.

DECISION

We affirm the district court’s grant of summary judgment on the Minnesota Motor Vehicle Retail Installment Sales Act, breach of contract, and breach of fiduciary duty counts. We reverse the district court’s grant of summary judgment on the consumer fraud and common-law fraud counts.

Affirmed in part and reversed in part.


author: LANSING, Judge

text:
    In the Matter of Manuel ROBLEDO.
    No. CX-99-2108.
    Court of Appeals of Minnesota.
    June 6, 2000.

      Allan R. Poncin, Minneapolis, for appellant Robledo.
    Mike Hatch, Attorney General, St. Paul, for respondent state.
    Amy Klobuehar, Hennepin County Attorney, Carolyn A. Peterson, Thomas G. Lavelle, Assistant County Attorneys, Minneapolis, for respondent county.
    Considered and decided by HARTEN, Presiding Judge, LANSING, Judge, and DAVIES, Judge.
   OPINION

LANSING, Judge

On appeal from recommitment as a mentally ill person, Manuel Robledo contends that the district court violated Minn.Stat. § 253B.13, subd. 1 (1998), by allowing petitioners to use consecutive-recommitment procedures even though his original commitment had expired. Because the statutory procedures for consecutive recommitment require a new petition, hearing, and determination to be completed before the expiration of any existing commitment order, we reverse.

FACTS

Manuel Robledo was committed as a mentally ill person to the Minneapolis Veterans’ Affairs Medical Center and the Ano-ka-Metro Regional Treatment Center (AMRTC) on July 1, 1998. At a review hearing the following December, the court continued Robledo’s commitment through September 30, 1999, under Minn.Stat. §§ 253B.12, .13 (1998).

On September 29, 1999, one day before Robledo’s commitment was due to expire, Hennepin County and AMRTC (petitioners) filed three petitions. One petition requested recommitment, the second requested continued administration of neuro-leptic drugs (a Jarvis order), and the third requested an emergency extension of- the current orders until completion of a hearing. The recommitment petition was accompanied by the required examiner’s statement from ' Robledo’s treating psychologist.

The court issued an ex parte emergency order continuing the December 1998 orders. Robledo challenged the ex parte order at his consecutive-recommitment hearing, contending that the order violated the statutory recommitment provisions and his constitutional rights to notice, legal representation, and a hearing within 72 hours of the commitment petition. The court rejected Robledo’s arguments and ordered Robledo’s continued involuntary institutionalization until September 30, 2000. Robledo appeals the recommitment.

ISSUE

Does MinmStat. § 253B.13 (1998) permit the court to temporarily extend an involuntary commitment until completion of a hearing and determination on a petition for consecutive recommitment?

ANALYSIS

The Minnesota Commitment and Treatment Act provides for an initial commitment period not to exceed six months. Minn.Stat. § 253B.09, subd. 5 (1998). If the person is confined more than 60 days, the act requires the custodial facility to provide a report indicating,, among other things, whether the patient is in need of further care and treatment. Minn.Stat.. § 253B.12, subd. 1(b) (1998).

The commitment act requires the court to hold a review hearing within 14 days of receipt of the report and before the initial commitment expires to determine whether there is clear and convincing evidence that the patient requires continued commitment. Id., subds. 2a, 4 (1998). If the court concludes that continued commitment is required, it may order the continued commitment for a specific time, not to exceed 12 months. Minn.Stat. § 253B.13, subd. 1 (1998).

The statute prohibits a further extension of commitment beyond the expiration of the continued commitment unless specific procedures are followed:

At the conclusion of the prescribed period, commitment may not be continued unless a new petition is filed pursuant to section 253B.07 and hearing and determination made on it.

Id. (emphasis added). Consecutive recom-mitment after expiration of a continued commitment incorporates the petition requirement of an initial commitment hearing but is subject to the statutory standard of proof for the continued commitment after a review hearing, rather than the standard applicable to an initial commitment. Id.

The standard of proof for an initial commitment is higher than the standard of proof for continued commitment after a review hearing. Compare Minn.Stat. § 253B.02, subd. 13 (1998) (defining mentally ill person as one who has made recent attempt or threat to physically harm self or others or recent failure to provide necessities), ivith Minn.Stat. § 253B.12, subd. 4 (specifying that determinations for continued treatment need not be based on finding of recent attempt or threat to physically harm self or others or recent failure to provide necessities, but must be based on finding that patient is likely to attempt physical harm or to fail to provide necessities).

Whether the lower consecutive-re-commitment standard of proof applies to Robledo’s commitment depends on whether the petitioners complied with the statutory conditions governing consecutive re-commitment. The petitioners argue that the language of section 253B.13, subdivision 1, stating that “commitment may not be continued unless a new petition is filed pursuant to section 253B.07 and hearing and determination made on it” need not be strictly applied and that the district court may temporarily extend a continued-commitment order. Robledo, on the other hand, argues that such an extension violates the statute. We agree with Roble-do’s interpretation of the statute.

Our function in interpreting statutes is to ascertain and effectuate legislative intent. Minn.Stat. § 645.16 (1998). When a statute is free from ambiguity, we look only at its plain language. Id.; Tuma v. Commissioner of Econ. Sec., 386 N.W.2d 702, 706 (Minn.1986). Plain meaning takes into account the whole structure of the statute and the context of the challenged language. King v. St. Vincent’s Hosp., 502 U.S. 215, 221, 112 S.Ct. 570, 574, 116 L.Ed.2d 578 (1991). We presume plain and unambiguous statutory language manifests legislative intent. Lenz v. Coon Creek Watershed Dist., 278 Minn. 1, 9, 153 N.W.2d 209, 216 (1967).

To apply petitioners’ statutory interpretation, we would have to disregard the plainly stated requirement that commitment may not be continued beyond the date specified in the continued-commitment order after the review hearing “unless a new petition is filed pursuant to section 253B.07 and hearing and determination made on it.” Minn.Stat. § 253B.13, subd. 1 (emphasis added).

The plain meaning and significance of this language is confirmed by its context and function in the statutory commitment process. The legislature has specified that a mentally ill person may be subject to an involuntary commitment — initially, and after a review hearing, and even after consecutive recommitment — only for a determinate length of time. Indeterminate sentences are reserved for defined categories of patients who pose a danger to society, such as those committed as mentally ill and dangerous, sexually dangerous, or with sexual psychopathic personalities. See Minn.Stat. §§ 253B.18, subd. 3 (1998) (allowing continued commitment for indeterminate period for those found to be mentally ill and dangerous); .185, subd. 1 (Supp.1999) (applying provisions pertaining to mentally ill and dangerous persons to sexually dangerous persons and' persons with sexual psychopathic personalities).

Giving effect to the plain language requiring a hearing and determination also is consistent with the philosophy underlying the commitment act. Courts have repeatedly recognized the critical importance of restricting a state’s power .to confine individuals for noncriminal reasons. See Foucha v. Louisiana, 504 U.S. 71, 77-80, 112 S.Ct. 1780, 1784-85, 118 L.Ed.2d 437 (1992); O’Connor v. Donaldson, 422 U.S. 563, 580, 95 S.Ct. 2486, 2496, 45 L.Ed.2d 396 (1975) (Burger, C.J., concurring); In re Linehan, 594 N.W.2d 867, 872 (Minn.), cert. denied, — U.S. -, 120 S.Ct. 587,

145 L.Ed.2d 488 (1999); In re Blodgett, 510 N.W.2d 910, 914 (Minn.1994). The curtailment of a person’s liberty through physical restraint suspends a fundamental right and must be undertaken only with scrupulous due-process protection. Blodgett, 510 N.W.2d at 914 (citing Foucha, 504 U.S. at 80, 112 S.Ct. at 1785). The supreme court .has emphasized the judiciary’s constitutional duty to safeguard the substantive and procedural rights of the most vulnerable members of our human community. See Linehan, 594 N.W.2d at 872 (reviewing constitutionality of Sexually Dangerous Person Act). Judicial safeguards are necessary both because the mentally ill are least able to assure their own protection and because it is attention to our duty to the mentally ill that maintains us as a human community.

Petitioners argue that even if we construe MinmStat. § 253B.13, subd. 1, to limit application of the lower standard of proof to consecutive recommitment hearings held before the expiration of an existing continued-commitment period, it substantially complied with the higher standard of proof applicable to an initial commitment. See Minn.Stat. § 253B.09, subd. 1 (incorporating definition of mentally ill person, requiring recent attempt or threat of physical harm, from Minn. Stat. § 253B.02, subd. 13(a)). We disagree.

The entire procedure, as well as the resulting commitment order, was focused on the propriety of continuing Rob-ledo’s commitment, rather than on whether he should be initially committed as a mentally ill person. We are also unpersuaded by the county’s argument that extension of a continued-commitment period may be required due to crowded court calendars. The record demonstrates that the requests of the county and AMRTC were filed only one day before Robledo’s existing continued commitment period was to expire. Finally, the county makes no claim that it complied with the 72-hour hearing requirement applicable to an initial commitment petition. See MinmStat. § 253B.07, subd. 7 (1998). Failure to provide a hearing to a proposed patient being held in a treatment facility under a judicial hold within 72 hours is a clear violation of the patient’s substantive due-process rights. Doe v. Madonna, 295 N.W.2d 356, 365 (Minn.1980).

By issuing an ex parte order extending Robledo’s commitment beyond the September 30, 1999, expiration of his continued-commitment period, the district court violated the statutory requirements governing consecutive recommitment. Because the ex parte order continuing the commitment was unauthorized, application of the standard of proof governing continued commitment, rather than the standard governing an initial commitment, was improper.

Our conclusion that Robledo’s consecutive recommitment was improper does not preclude petitioners from seeking Roble-do’s commitment if they believe that it is necessary and justified by the facts. The petitioners may choose to file a petition for initial commitment and to proceed under section 253B.07, and to seek an emergency 72-hour hold. We express no opinion on the likely outcome of an initial-petition procedure. But we do note that this court’s decision does not become final immediately and will not be reduced to judgment for at least 30 days after filing or until any petition for further review is denied by the supreme court. Minn. R. Civ.App. P. 136.02; see In re Stilinovich, 479 N.W.2d 731, 736 (Minn.App.1992).

DECISION

The district court’s consecutive recom-mitment of appellant as a mentally ill person is reversed. Because the statute does not provide for continuation of an existing commitment, absent compliance with the plain language requiring a hearing and determination on the recommitment petition, the district court erred in issuing an ex parte order extending Robledo’s commitment on an interim basis prior to a hearing and a commitment determination.

Reversed.


author: DAVIES, Judge.-

text:
    In re the Marriage of Diane Renee RUMNEY, petitioner, Respondent, v. Mark Wayne RUMNEY, Appellant.
    No. C9-99-1838.
    Court of Appeals of Minnesota.
    June 6, 2000.

      Bonnie L. Kleman, Kleman Law Firm, Willmar, for respondent.
    Rodney C. Hanson, Anderson, Larson, Hanson & Saunders, P.L.L.P., Willmar, for, appellant.
    Considered and decided by SHUMAKER, Presiding Judge, CRIPPEN, Judge,, and DAVIES, Judge.
   OPINION

DAVIES, Judge.-

Appellant Mark Rumney challenges the amount of child support awarded in a dissolution action. Appellant argues that the trial court erred in not applying a Hor-tis/Valento adjustment in child support to reflect the fact that the children spend 39% of their time with him. We affirm, concluding that the Hortis/Valento formula is to be applied as a guidelines application only when the parties have joint physical custody or when, although one parent has sole physical custody,' the other parent provides a nearly equal amount of actual physical care.

FACTS

Appellant and respondent Diane Rum-ney were married in 1985. They have two children, born in 1987 and 1993. Respondent began dissolution proceedings in February 1998.

The parties signed a marital-termination agreement, resolving most issues. The contested issues were tried at a hearing before the court in June 1999. The trial court issued findings of facts, conclusions of law, and order for judgment in two parts. Part I was the stipulated settlement between the parties; Part II covered the contested issues, including child support.

The parties stipulated that physical custody would be awarded to respondent, with reasonable and liberal visitation for appellant. They also stipulated to a visitation schedule that provides for the children to be with respondent 61% of the time and with appellant 39% of the time.

The trial court decided the issue of child support after a hearing. The court found that respondent’s net income was $1,505 per month, with monthly expenses of $1,7Í5. Her child-care expenses averaged $191 per month, after county assistance.

The court found, that appellant, due to absenteeism and tardiness, lost a job that-had provided a net monthly income of more than $2,000, but the court found the evidence insufficient to rule that he had willfully become underemployed. The court found appellant’s net monthly income from his current job to be $1,455. The court also found that appellant could provide medical coverage through his new employer at a more favorable rate than respondent could obtain and ordered him to provide that coverage. The court found appellant failed to submit information regarding his monthly expenses or his childcare expenses.

Applying the guidelines formula of Minn.Stat. § 518.551, subd. 5(b) (Supp. 1999), to appellant’s current income, the court ordered him to pay $437 a month in child support. The court also ordered him to pay $48 per month for child-care expenses, except during the months of June, July, and August. Respondent was given responsibility for the first $75 of extracurricular expenses, and the parties share equally any expense above that amount. Each party was awarded one dependent tax deduction.

The trial court considered applying the Hortis/Valento formula, but concluded that it was not applicable. The court found that, because respondent had custody 61% of the time and appellant had custody just 39% of the time, the parents do not share child-care responsibilities to an extent that justifies application of Hortis/Valento.

ISSUE

Did the trial court err in failing to apply the Hortis/Valento guidelines in setting appellant’s support obligation?

ANALYSIS

Appellant does not dispute the trial court’s findings, but rather argues that the failure to apply the Hortis/Valento formula to these findings is a legal error. This court reviews questions of law de novo and does not defer to the decision of the trial court. Ayers v. Ayers, 508 N.W.2d 515, 518 (Minn.1993).

The trial court has considerable discretion in determining a child-support obligation. Broas v. Broas, 472 N.W.2d 671, 673 (Minn.App.1991). Minn.Stat. § 518.551, subd. 5(b), sets forth guidelines based on an obligor’s income, however, and a trial court must consider these guidelines. But the guidelines are rebuttable presumptions from which the trial court may deviate. Minn.Stat. § 518.551, subd. 5(i) (Supp.1999). When deviating, the trial court must make written findings addressing why the deviation is in the best interests of the child. Id. In making this best-interest determination, the court examines the income of the parents, the needs of the child, the standard of living the child would have enjoyed but for the dissolution, and which party receives the dependency exemptions. Minn.Stat. § 518.551, subd. 5(c) (Supp.1999).

A refinement of the guidelines has evolved for parents who have joint physical custody; each parent then becomes the obligor during the time the children are in the physical custody of the other parent. Hortis v. Hortis, 367 N.W.2d 633, 635-36 (Minn.App.1985). This approach was reaffirmed by Valento v. Valento, 385 N.W.2d 860 (Minn.App.1986), review denied (Minn. June 30, 1986), in which the court stated that, in a joint-physical-custody situation, a party’s support obligation is determined by the guidelines during the time the other parent has custody. Id. at 862-63.

The use of the Hortis/Valento formula has been extended to include some custody arrangements short of joint physical custody. Tweeton v. Tweeton, 560 N.W.2d 746 (Minn.App.1997), review denied (Minn. May 28, 1997). In Tweeton, although the father was designated as having sole physical custody, the children divided their time equally between the parties. Id. at 747. Based on this, this court chose not to “elevate the form of the custody arrangement * * * over the substance”; rather, in such a situation, use of the Hortis/Valento formula was required as a guidelines application, just as with joint physical custody. Id. at 748. The Hortis/Valento formula is considered a guidelines calculation in such situations, not a departure from the guidelines. Id.

A panel of this court has recently determined that 45% of custodial care may have a significance that calls for use of the Hortis/Valento/Tweeton guidelines formula. See Rogers v. Rogers, 606 N.W.2d 724 (Minn.App.2000) (approving use of Hor-tis/Valento modified guidelines when custody is split 55/45%), review granted (Minn. May 16, 2000).

The case before us does not reach the Rogers standard and we fear that any further extension of the modified guidelines will result in both rigidity and uncertainty. We can also predict that parents with physical custody will be reluctant to agree to liberal visitation, foreseeing the loss of child-support funds with each additional day of visitation. When visitation has financial consequences, each day may become more intensely bargained. Rather than encouraging cooperation with- the non-custodial parent, this gives the custodial parent a financial reason to discourage additional visitation.

The statutory guidelines were enacted by the Minnesota legislature because of a perceived “failure of the courts to award child support in a fair and consisr tent manner * * * .” Kathleen E. Pontius, Minnesota’s Child Support Guidelines: Toward a Fair and Rational Standard for Child Support, 9 Hamline L.Rev. 459, 463 (1986) (quotation omitted). Important to the legislature was that children have a right to the standard of living they would have enjoyed had the marriage not been dissolved. Id. at 466. Implicit is the idea that “the non-custodial parent has an obligation to commit a certain amount óf in-comé to the , children as a priority over other' expenses.” Id. at 480. Thus, the guidelines focus on the needs of the child, rather than on equalizing child-support obligations between the parents. Hortis/Va-lento has the effect of creating a set-off that reduces the guidelines award. That is a consequence we are unwilling to impose on the facts of this case.

Appellant has asked us to adjust the statutory guidelines because he, though a non-custodial parent, provides a “significant amount of physical care.” Appellant suggests that this adjustment should be based on the precise percentage of time the children are to be in his physical care. He argues that Hortis/Valen-to/Tweeton require this as a guidelines application and that not using this formula constitutes a deviation from the guidelines. We decline to continue down this path.

When joint physical custody is not the custodial arrangement, use of a brightline rule to trigger Hortis/Valento is tempting. But using a strict percentage rule as a guidelines approach is contrary to the assumption — basic to the dissolution laws — that support and visitation are separate and distinct issues. See Minn.Stat. § 518.175, subd. 1(a) (1998) (“A parent’s failure to pay support because of the parent’s inability to do so shall not be sufficient cause for denial of visitation.”). Because appellant would be allowed to exercise his visitation privileges even if he were unable to meet his support obligation, we do not see that full exercise of visitation privileges justifies a reduction in support.

Tweeton was partially premised on the assumption that either parent could be an obligor for purposes of support. Tweeton, 560 N.W.2d at 748 (“statute merely provides that support can be ordered from a parent ‘owing a duty of support,’ specifying this may include ‘either or both parents’ ”). Since the Tweeton decision, this has been clarified by 1998 Minn. Laws ch. 382, art. I, § 4, which amends the statutory definition of “obligor”' to read:

“Obligor” means a person obliged to pay maintenance or support. A person who is designated as the sole physical custodian of a child is presumed not to be an obligor for purposes of calculating current support under section 518.551 unless the court makes specific written findings to overcome this presumption.

Minn.Stat. § 518.54, subd. 8 (1998).

This provision suggests that the statutory guidelines, except in cases of joint physical custody, are presumed to apply without a Tweeton adjustment. It also reminds us that there is a difference between joint physical custody and sole physical custody with liberal visitation. See Minn.Stat. § 518.003, subd. 3(c), (d) (1998) (“ ‘Physical custody and residence’ means the routine daily care and control and the residence of the child.” * * * “ ‘Joint physical custody’ means that the routine daily care and control and the residence of the child is structured between the parties.”).

In order to deviate from the guidelines, a district court must make the required findings. Minn.Stat. § 518.551, subd. 5(i). Here, appellant provided 39% of the care for the children; but he presented no evidence that his expenses were increased unduly because of the amount of visitation or that the children’s welfare while in his care was diminished because of the support obligation.

We now limit the use of the Hor-tis/Valento/Tweeton guidelines modification to cases logically comparable to those cases: when parties have joint physical custody or when the non-custodial parent provides a nearly equal amount of physical care, as in Tweeton and Rogers. In all other cases, the statutory guidelines are presumed to apply without a Hortis/Valen-to modification and the trial court may make such a modification only by making written findings justifying the adjustment as a deviation. MinmStat. § 518.551, subd. 5(i).

DECISION

The trial court did not err by declining to apply a Tweeton-type reduction to appellant’s support obligation.

Affirmed.

      . Ms. Pontius, counsel to the Senate Judiciary Committee, also held that position at the time the guidelines were formulated.


text:
    FORD CONSUMER FINANCE COMPANY, INC., Plaintiff, Joan Elizabeth Johnson, Appellant, v. CARLSON AND BREESE, INC., Respondent, Michael J. Mika, et al., Defendants.
    No. C2-99-1602.
    Court of Appeals of Minnesota.
    June 6, 2000.

      John T. Peterson, Cindi S. Matt, Johnson, Larson & Peterson, Buffalo, for appellant.
    Bruce P. Grostephan, Peterson, Eng-berg & Peterson, Minneapolis, for respondent.
    Considered and decided by HARTEN, Presiding Judge, DAVIES, Judge, and FOLEY, Judge.
   OPINION

DANIEL F. FOLEY, Judge

Appellant Joan Johnson challenges the district court’s conclusion that a 1993 quiet title action extinguished the basis for her adverse possession claim even though her immediate predecessor-in-interest was not bound by that action. We affirm.

FACTS

This case involves a disputed triangle of lakefront property that Joan Johnson claims she acquired title to by adverse possession. In the district court’s record, the chain of title for the property begins in 1974, when Sally and James Norgren conveyed it to Anthony and Francis De-nardo by warranty deed. In 1989, Miles and Kara Nelson acquired the property from the Denardos by contract for deed, the warranty deed passing in 1992. When the Nelsons purchased the property, they executed a mortgage in favor of Ford Consumer Finance Co., Inc. (Ford). The parties dispute whether the property description in the mortgage included the disputed triangle.

In 1993, respondent Carlson and Breese, Inc. (Carlson) brought an action to quiet title on some lakefront land, including the triangle of land possessed by the Nelsons. The Nelsons were' properly named and served, but they failed to appear and a default judgment was entered against them. Although they attempted to vacate the judgment, they ultimately abandoned their claim by stipulation and it was dismissed with prejudice. Carlson did not name or serve Ford as a defendant in that 1993 action.

In 1995, Ford foreclosed on the Nelson’s mortgage. In January 1998, Ford commenced the present quiet title action, alleging a scrivener’s error and requesting reformation of a legal description to include the disputed triangle. Subsequently, Ford conveyed its interest in the property to Johnson. Ford conveyed the property “as is” with a limited warranty deed and an express addendum in the purchase agreement that the land did not have any lakefront footage. Ford assigned its rights under this litigation and withdrew from active participation in the case. Johnson’s alleged interest in the property derives from her predecessor-in-interest, Ford.

Following trial and a posttrial motion to amend, the district court determined that Johnson’s basis for an adverse possession claim was extinguished by the Nelsons’ failure to contest the 1993 quiet title action. The district court also ruled that the 1993 quiet title action placing title in Carlson was not binding on Ford because it was a known defendant that was not named or personally served. Although the district court concluded that the 1993 judgment was nonbinding as to Ford, it still concluded Carlson was the exclusive owner of the disputed land. Johnson moved for a new trial and the motion was denied.

ISSUE

Did the district court err in concluding that Johnson’s basis for an adverse possession claim was extinguished because mortgagee Ford did not have a possessory interest in the disputed property at the time of the 1993 quiet title action?

ANALYSIS

We review de novo a district court’s order denying a party’s motion for a new trial based upon an error of law. Stoebe v. Merastar Ins. Co., 554 N.W.2d 733, 735 (Minn.1996); see Frost-Benco Elec. Ass’n v. Minnesota Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn.1984) (legal questions reviewed de novo). To establish a claim for adverse possession, the claimant must show by clear and convincing evidence that the possession was actual, open, hostile, continuous, and exclusive for at least the statutory period. Roemer v. Eversman, 304 N.W.2d 653, 653 (Minn.1981); see MinmStat. § 541.02, (1998) (setting statutory time period at 15 years). The possession of successive occupants, if there is privity between them, may be tacked to make adverse possession for the requisite period. Fredericksen v. Henke, 167 Minn. 356, 360, 209 N.W. 257, 259 (1926).

Johnson argues that the district court should have found that she had acquired title by adverse possession because her predecessor-in-interest, Ford, was not bound by the 1993 quiet title action. She claims that a mortgagee’s adverse possession claim is not extinguished if the parties with possessory rights at the time of a quiet title action failed the contest the claim and a default judgment is entered against them. We note initially that it is unclear whether Ford had any interest in the disputed triangle of property. While there is evidence in the record that the Nelsons intended to offer, and Ford intended to take a security interest in the disputed triangle, it is not clear that Ford actually took such an interest. Further, even if Ford had an interest, it could not have become a possessory interest until after Ford foreclosed in 1995. Thus, to demonstrate adverse possession for the 15-year statutory period, Johnson must rely on possession by Ford’s predecessors in interest, the Nelsons.

We agree with the district court that Johnson cannot rely on the Nelson’s possession because that possession was cut off by the 1993 judgment in the quiet title action. See Minn.Stat. § 559.02 (1998) (judgment binding on all persons over whom district court has jurisdiction); Mathews v. Lightner, 85 Minn. 333, 335, 88 N.W. 992, 993 (1902) (noting that judgment as to state of title is binding and conclusive on parties and contingent interests “if all parties are brought before the court that can be brought before it”); Richard R. Powell & Patrick J. Rohan, 16 Powell on Real Property § 91.07[2], at 91-43 (1999) (continuity requirement of adverse possession claim interrupted when judgment obtained against claimant). Because the continuity of the Nelson’s adverse possession was cut off by the 1993 quiet title action, Johnson cannot tack on that previous period of possession. Cf. Olson v. Burk, 94 Minn. 456, 458, 103 N.W. 335, 336 (1905) (acknowledgement by adverse claimant of owner’s title before statute has run breaks continuity and prevents subsequent tacking). Because Johnson fails to meet the continuous possession requirements for the statutory duration, we conclude that the district court did not err in determining that her claim fails despite its finding that the 1993 quiet title judgment did not bind Ford.

Johnson asserts that the result here is at odds with policies that protect parties with nonpossessory interests. Johnson admits that there is no Minnesota precedent directly on point. But relying on Pergament v. Boring Properties, Ltd., 599 N.W.2d 146 (Minn.1999), she argues that the effect of the decision below was to improperly decrease the value of Ford’s mortgage by changing the mortgaged land from lakefront property to land without lakefront.

Pergament addressed the mortgage exception to the merger doctrine in the context of easements. Id. at 147. There, the supreme court concluded that to protect a mortgagee of a dominant estate, the mortgage exception to the merger doctrine would allow the mortgagee to obtain the benefit of an easement even after unity of title had extinguished the easement if that mortgagee’s interest later became posses-sory. Id. Johnson urges the panel to adopt a similar exception to the doctrine of adverse possession to protect the interests of mortgagees.

Johnson’s argument, however, presupposes that Ford did, in fact, have an interest in the disputed triangle prior to the quiet title action. As we have previously noted, it is not clear that Ford actually had any interest in the disputed triangle. If it did have any interest, it was only that which the Nelsons could have conveyed to it. Moreover, even if the Nelsons were able to convey some inchoate interest in the parcel, this interest was not possessory until sometime after 1995 when Ford foreclosed, well after the 1993 quiet title action vested title in Carlson.

Johnson supports her equitable argument that Ford’s claim should not be extinguished by arguing that, had Ford been a named party with notice in the 1993 action, it would have stepped in to protect its interests in the 1993 quiet title action. This argument is unpersuasive. While there is evidence that the value of Ford’s interest in the land would be diminished, there is nothing in the record to support Johnson’s contention that Ford would have taken any action. Such a conclusion would be speculative. Thus, after the 1993 judgment extinguished the Nelsons’ claim for adverse possession, Ford could no longer claim that its interests were harmed or that the value of its security was impaired because Ford’s potential possessory interest in the disputed triangle was dependent upon the Nelsons’ interest. Additionally, Johnson’s commitment to protecting the nonpossessory interests of mortgagees seems somewhat inauthentic since she, not Ford, is the one who actually stands to benefit from a decision in her favor. Therefore, we conclude that although the value of Ford’s mortgage may have been impaired by Carlson’s failure to name and sertie it as a defendant in the 1993 quiet title action, Johnson still has no recourse to a claim of adverse possession as a way of vindicating Ford’s interests.

DECISION

Neither the law nor the equities favor reviving a claim of adverse possession by Johnson against Carlson under these circumstances. The district court did not err in concluding that Johnson’s action to quiet title fails because the 1993 quiet title action extinguished Ford’s basis for a claim of adverse possession.

Affirmed; motions denied.

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

      . The Wright County Assessor testified at trial that Johnson’s property was assessed as including 25 feet of lakeshore for an estimated market value of $65,200 in 1998. From the value of the mortgage Ford took from the Nelsons ($61,980.25) compared with Johnson’s purchase price ($40,000), the difference in value of Johnson’s land without the disputed triangle may be roughly $20,000.

      . We also note that both parties make motions to strike portions of each other's documents on appeal. Carlson contends that Johnson’s reply brief contains matters outside the record. It does not. See Minn. R. Civ. App. P. 110.01 (record on appeal consists of “the papers filed in the trial court, the exhibits, and the transcript of the proceedings.”). Johnson's accusation that Carlson makes unsupported factual assertions is similarly unfounded. Accordingly, we deny both parties' motions to strike.


author: PER CURIAM.

text:
    1999 ND 82
    In the Matter of the Application for DISCIPLINARY ACTION AGAINST Lynn M. BOUGHEY, A Member of the Bar of the State of North Dakota. Disciplinary Board of the Supreme Court of North Dakota, Petitioner, v. Lynn M. BOUGHEY, Respondent.
    No. 990124.
    Supreme Court of North Dakota.
    May 7, 1999.
    Paul W. Jacobson, Assistant Disciplinary Counsel, Bismarck.
    Timothy Q. Purdon, Dickson Law Office, Bismarck. ■
   INTERIM SUSPENSION ORDERED.

PER CURIAM.

[¶ 1] On May 3, 1999, an Application for Order of Interim Suspension of Lynn M. Boughey, a member of the Bar of North Dakota, with attached certified copies of the Information, Amended Information, Plea Agreement, Transcript of Plea Hearing dated April 7, 1999, and Order Deferring Imposition of Sentence in State of North Dakota v. Lynn Martin Boughey, Ward County Criminal No. 98-K-499, was filed under Rule 4.1, North Dakota Rules for Lawyer Discipline (N.D.R. Lawyer Discipl.), by Assistant Disciplinary Counsel Paul W. Jacobson. The Application shows that Lynn M. Boughey was admitted to practice as an attorney and counselor at law in the Courts of North Dakota on September 29, 1988, and since that time his name has appeared on the roll of attorneys admitted to the Bar of North Dakota.

[¶ 2] On April 7, 1999, Mr. Boughey entered into a Plea Agreement wherein he was adjudged guilty of the offense of violating Section 27-13-08(3), N.D.C.C., for Misconduct of an Attorney. Under Section 27-13-08(3), N.D.C.C., an attorney is guilty of a class A misdemeanor if he willfully receives any money or other property for or on account of any money or debt which he has not laid out or become answerable for.. On April 13, 1999, the trial court entered an Order Deferring Imposition of Sentence based on the Plea Agreement. Disciplinary Counsel requests immediate suspension of Mr. Boughey for conviction of a serious crime under Rule 4.1(C), N.D.R. Lawyer Discipl., .involvingfraud, deceit or misappropriation.

[¶ 3] On May 5, 1999, Mr. Boughey filed a Motion in Opposition to Immediate Suspension or, In the Alternative, Motion to Set Aside. or Modify Interim Suspension with supporting Brief and attachments, requesting that the Court not enter an immediate suspension. In the alternative, Mr. Boughey requests that the Court, find good cause to set aside or modify the interim suspension until the civil disciplinary process is completed.

[¶ 4] Having considered the matter, the Court hereby ORDERS, that Lynn Martin Boughey’s license to practice law in the State of North Dakota is SUSPENDED effective Monday, May 10, 1999, and until further order of this Court.

[¶ 5] IT IS FURTHER ORDERED, that Mr. Boughey give notice as required in Rule 6.3, N.D.R. Lawyer Discipl., and that proof of compliance be filed with the Supreme Court by May 20,1999.

[¶ 6] WILLIAM A. NEUMANN, MARY MUEHLEN MARING, JJ., RALPH R. ERICKSON, District Judge, concur.

■ [¶ 7] Chief Justice GERALD W. VANDE WALLE, Justice DALE V. SANDSTROM, and Justice CAROL RONNING KAPSNER, deeming themselves disqualified, did not participate in this decision, the Honorable RALPH R. ERICKSON, District Judge, sitting.