text:
    M.N., Appellant, v. D.S., Respondent.
    No. C9-00-437.
    Court of Appeals of Minnesota.
    Aug. 22, 2000.

      M.N., Minneapolis, pro se appellant.
    Gregory T. Spalj, Aaron A. Dean, Fa-byanske, Westra & Hart, P.A., Minneapolis, for respondent.
    James Tarsney, St. Louis Park, for ami-cus curiae Minnesota Lawyers for Life, Inc.
    Considered and decided by HALBROOKS, Presiding Judge, DAVIES, Judge, and PETERSON, Judge.
   OPINION

DAVIES, Judge.

Appellant M.N. challenges the district court’s order granting summary judgment to respondent D.S. We affirm.

FACTS

In March 1995, appellant M.N. discovered she was pregnant and notified respondent D.S. that she believed he was the father. D.S., who was married to another woman, hired a lawyer and advised M.N., through the lawyer, that he would either: (1) pay child support for the unborn child after paternity was established; or (2) negotiate a settlement with M.N.

M.N. hired her own lawyer to conduct settlement negotiations with D.S.’s attorney. On May 19,1995, the parties reached a settlement. In effect, the parties negotiated the terms of an offer for a unilateral contract. The agreement, which they signed, provided that D.S. would pay M.N. $75,000, plus medical and legal expenses, if M.N. would terminate her pregnancy. The settlement agreement contained a release clause, which provided that, “upon completion of the abortion procedure, and payment of the required sums, [D.S.] is released from all claims related to [M.N.’s] pregnancy and the termination thereof.” M.N.’s attorney requested that a provision be added to the agreement stating that each party was entering into the agreement “voluntarily, without any threats, duress, or coercion by the other party.” D.S. unconditionally agreed to pay M.N.’s legal fees regardless of whether or not she decided to have the abortion.

M.N. traveled on her own to Madison, Wisconsin, and obtained a legal abortion, thus accepting the unilateral contract offer. According to Wisconsin law, M.N. was required to wait 24 hours before the procedure to ensure that she had the “fullest opportunity to give her voluntary and informed consent” before electing to undergo the abortion. Wis. Stat. § 253.10(l)(a), (3)(c) (1997-98). Additionally, M.N. signed a statutorily required consent form, acknowledging that her decision to have the abortion was a product of her free will and that no one “forced or coerced” her into making the decision to terminate her pregnancy. Subsequently, D.S. paid M.N. the $75,000 called for by the agreement and her medical and legal expenses. Thus, he fulfilled the terms of the parties’ agreement.

In May 1997, M.N. sued D.S. for intentional and negligent infliction of emotional distress, battery, and fraud and misrepresentation. In her complaint, M.N. alleged that she suffered psychological and emotional damages because D.S. coerced her into having an unwanted abortion by promising that he would marry her when his divorce was final and that he promised they would later have a baby together. In her complaint, M.N. also alleged that the settlement agreement was unconscionable, against public policy, and extracted under duress and coercion.

In October 1999, D.S. brought a motion for summary judgment, arguing that the district court should dismiss with prejudice all of M.N.’s claims because: (1) claims for alleged breaches of promises to marry are barred by Minnesota Statutes, chapter 553; (2) the claims were barred by the doctrine of release because M.N. signed a settlement agreement, accepted payment of more than $75,000, and released him from further liability; and (3) the decision whether to conceive or bear a child is not actionable regardless of motivation. M.N. submitted a pro se brief, arguing that her claims raised genuine issues of material fact and were not barred by law. On December 27, 1999, the district court granted D.S.’s motion for summary judgment and dismissed M.N.’s claims with prejudice, concluding that the claims were statutorily barred because they were predicated on D.S.’s alleged promise to marry M.N. and that M.N, was barred from litigating her claims based on release and waiver.

ISSUE

Are tort claims predicated on an alleged promise to marry barred by public policy under Minnesota Statutes, chapter 553 (1998)?

ANALYSIS

Appellant M.N. challenges the district court’s grant of D.S.’s motion for summary judgment, asserting that: (1) the release provision contained in the settlement agreement is unenforceable because it violates public policy; (2) her tort claims are not barred by Minnesota Statutes, chapter 553, because they do not stem from a breach of a promise to marry; and (3) she presented genuine issues of material fact regarding her claims of coercion, duress, and fraud.

On appeal from summary judgment, this court must determine whether any genuine issues of material fact exist and whether the district court erred in applying the law. Lubbers v. Anderson, 539 N.W.2d 398, 401 (Minn.1995). Statutory interpretation is a question of law subject to de novo review. Automated Bldg. Components, Inc. v. New Horizon Homes, Inc., 514 N.W.2d 826, 828 (Minn.App.1994), review denied (Minn. June 15, 1994). “The object of all interpretation and construction of laws is to ascertain and effectuate the intention of the legislature.” Minn.Stat. § 645.16 (1998).

The Minnesota legislature has abolished the civil actions for seduction and breach of promises to marry. 1978 Minn. Laws ch. 515, codified at Minn.Stat. § 553.01-03 (1998) (abolishing civil causes of action for breach of promise to marry, alienation of affections, criminal conversation, and seduction). The reason for abolishing these causes of action is expressed by the ■ legislature in Minn.Stat. § 553.01 (1998), which provides:

Actions based upon alleged alienation of affections, criminal conversation, seduction and breach of contract to marry, have been subject to grave abuses, have caused intimidation and harassment, to innocent persons and have resulted in the perpetration of frauds. It is declared as the public policy of the state that the best interests of the people of the state will be served by the abolition of these causes of action.

The effect of this statute is illustrated by R.E.R. v. J.G., 552 N.W.2d 27, 28 (Minn. App.1996). In R.E.R., an estranged husband sued his minister and church because the minister had had an affair with his wife, ending the marriage. The husband sued on claims of breach of fiduciary duty, false representation, intentional infliction of emotional distress, breach of a duty of reasonable care, tortious hiring, illegal conspiracy, and joint enterprise. Id. The trial court granted a motion for summary judgment, concluding that the essence of the husband’s claims was that the minister alienated his former wife’s affections and ruined his marriage. Id. This court affirmed the trial court’s order granting summary judgment on all of the husband’s claims, concluding that, because husband’s losses flowed from the alienation of his former wife’s affection, they were not recoverable because the legislature has outlawed “heart balm” actions. Id. at 29.

Here, M.N. brought four causes of action against D.S., which included claims for: (1) intentional infliction of emotional distress; (2) fraud; (3) negligent infliction of emotional distress; and (4) battery. By name, these are all tort claims and M.N. did not specifically assert a claim for a breach of a promise to marry. But when we analyze the specific allegations she makes to support each of her claims, it is clear that the essence of each is that D.S. promised to leave his wife and to marry and have a baby with her in the future.

First, in her claim for intentional infliction of emotional distress, M.N. asserts that she “suffered bodily harm and psychological injury so severe that no reasonable person could be expected to endure it” as a result of D.S. forcing her to have an unwanted abortion through the use of false representations regarding his intention to “have a committed relationship and to have children with her.”

Second, in her claim for fraud and misrepresentation, M.N. contends that she experienced “physical and emotional pain and suffering and lost wages and earning capacity” as a result of D.S.’s false promises that, if she had an abortion, “he would divorce his wife and marry [her] and they would have children together.”

Third, in her claim for negligent infliction of emotional distress, M.N. asserts that she suffered “physical and psychological injury, including extreme emotional distress,” because D.S. “engaged in outrageous and malicious conduct” towards her by coercing her into having an abortion through fraud and false representations. The claimed fraud and false representation was D.S.’s alleged promise that he would leave his wife, marry her, and that they would have children together.

Finally, in her battery claim, M.N. claims that she suffered physical and emotional pain and suffering because D.S. forced her to have an unwanted abortion through duress, coercion, fraud, and other unconscionable means. Again, the coercion and fraud asserted was D.S.’s alleged promise that he would leave his wife, marry M.N., and that they would have children together.

Although M.N.’s claims are couched in terms of civil tort claims, the behavior on which M.N.’s claims and damages are based is, in the end, D.S.’s alleged breach of a promise to marry and impregnate her after she had an “unwanted” abortion.

Minnesota law not only bars specific claims for breach of a promise to marry, it also bars any other claim for damages that is predicated on a promise to marry. See Minn.Stat. § 553.01 (stating best interests of people and public policy served by abolition of actions based on breach of contract to marry); see also R.E.R, 552 N.W.2d at 29-30 (other tort claims barred by heart-balm statute).

This case is very similar to Perry v. Atkinson, 195 Cal.App.3d 14, 240 Cal.Rptr. 402 (1987). In Perry, a woman brought a tort claim for fraud and deceit against a man married to someone else with whom she had had a sexual relationship. She alleged that she terminated a pregnancy based on defendant’s false promises that he would impregnate her the following year. The California Court of Appeals affirmed the district court’s dismissal, concluding that, although the cause of action was couched in terms of a tort, the behavior on which the claim was based was breach of a promise to impregnate and that California public policy prohibited a lawsuit based on a promise to impregnate. Id. at 404-06.

Also, if no cause of action can exist in tort for a fraudulent promise to marry, then logically no cause of action can exist for a fraudulent promise by a married man to leave his wife and impregnate a woman who is not his wife.

To allow M.N. s tort claims, predicated on D.S.’s alleged promise to marry, would defeat the legislature’s stated purpose in abolishing heart-balm actions.

Additionally, in M.N.’s complaint, she alleges that D.S. misrepresented his intentions to leave his wife, marry her, and have children with her in the future. Usually, lack of a present intention to perform at the time a promise is made is a relevant consideration in a claim of misrepresentation. It also is a relevant distinction between a contact claim and a fraud claim in tort. In this matter, however, it is irrelevant whether or not D.S. had an intention to perform at the time of the alleged promise to marry. To make such a distinction in cases such as this would revive claims that have been abolished by Minnesota Statutes, chapter 553.

Because we hold that M.N.’s claims were barred by Minnesota Statutes, chapter 553, we need not address her other arguments.

DECISION

Although M.N.’s claims are couched in terms of torts, the claims and damages are predicated on an alleged promise to marry. Because actions based on a promise to marry have been abolished by Minnesota Statutes, chapter 553, the district court correctly granted D.S.’s motion for summary judgment.

Affirmed.

      . A misrepresentation claim cannot be predicated on a representation of future act unless the record affirmatively shows that, at the time the promisor made the promise, he did not intend to perform. Vandeputte v. Soderholm, 298 Minn. 505, 508-09, 216 N.W.2d 144, 147 (Minn.1974).


source: Caselaw Access Project

author: DAVIES, Judge.

license: Public Domain

text:
    RICE LAKE CONTRACTING CORP. and City of Two Harbors, Respondents, v. RUST ENVIRONMENT AND INFRASTRUCTURE, INC., n/k/a Earth Tech Consulting, Inc., Appellant, GME Consultants, Ltd., Defendant.
    No. C5-00-130.
    Court of Appeals of Minnesota.
    Aug. 22, 2000.
    Review Denied Oct. 26, 2000.

      Gregory T. Spalj, Tien T. Cai, Fa-byanske, Westra & Hart, P.A., Minneapolis, for respondents Rice Lake Contracting and City of Two Harbors.
    Larry M. Nord, Orman & Nord, Duluth, for respondent City of Two Harbors.
    Robert J. Huber, Leonard, Street and Deinard, P.A., Minneapolis, for appellant.
    Considered and decided by HALBROOKS, Presiding Judge, DAVIES, Judge, and PETERSON, Judge.
   OPINION

DAVIES, Judge.

Appellant challenges the trial court’s legal conclusions regarding indemnity, differing site-conditions, and damages. We affirm as modified.

FACTS

Respondent City of Two Harbors (Two Harbors) contracted with respondent Rice Lake Contracting Corp. (Rice Lake) to improve Two Harbors’ sewage-treatment plant. Two Harbors had earlier hired appellant Rust Environment and Infrastructure, Inc. (Rust), and GME Consultants, Inc. (GME), as consulting engineers on the project. After completing the improvement, Rice Lake sued Two Harbors for breach of contract, claiming that Two Harbors owed it an additional $2,166,750 for rock excavation. Two Harbors filed a third-party complaint against Rust and GME.

Rice Lake and Two Harbors then entered into a settlement agreement whereby Two Harbors paid Rice Lake $200,000 and executed a conditional promissory note to Rice Lake for $1,585,402. The note was payable only out of the proceeds, if any, from legal claims Two Harbors was to assert against Rust and GME. Rice Lake agreed to pay for pursuing Two Harbors’ suit against Rust and GME and was granted full control over the case. The case has produced two previous appeals: Rice Lake Contracting Corp. v. Rust Environment and Infrastructure, Inc., 549 N.W.2d 96 (Minn.App.1996), review denied (Minn. Aug. 20, 1996), and Rice Lake Contracting Corp. v. Rust Environment and Infrastructure, Inc., 1998 WL 148082 (Minn. App.1998), review denied (Minn. May 28, 1998).

On this third appeal, the main issue is whether Two Harbors’ indemnity claims are limited to the $200,000 that Two Harbors actually paid. Rust argues that a common-law indemnity rule allows recovery only of amounts that have actually been paid or for which the indemnitee is unconditionally liable.

At trial, the judge first determined that Rust’s claim that the bedrock discovered at the site was a differing site-condition failed, as a matter of law. (This ruling is also at issue in this appeal.) A jury then found that Two Harbors incurred a $2,166,750 liability to Rice Lake under the construction contract that Rust prepared for Two Harbors. The jury also found that $1,994,378 of that amount should be paid by Rust because its negligence in preparing the contract and supervising performance caused the city to incur this much of its liability to Rice Lake. Notwithstanding the jury’s verdict, the trial court entered judgment against appellant Rust for just $1,785,402 (plus prejudgment interest), ruling that the settlement agreement between Two Harbors and Rice Lake limited Rust’s liability — and Rice Lake’s recovery — to this amount (the conditional promissory note plus the $200,000 paid).

The trial court denied Rust’s motion for a new trial or amended findings. This appeal followed.

ISSUES

1. Did the conditional promissory note provide a basis for an indemnity claim?

2. Was the award of prejudgment interest proper?

3. Did the trial court err in rejecting the differing site-condition claim?

4. Was the jury damage award properly calculated?

ANALYSIS

This case involves statutory and contract interpretation, which are questions of law subject to de novo review. Meister v. Western Nat’l Mut. Ins. Co., 479 N.W.2d 372, 376 (Minn.1992).

I.

A right of indemnity arises when a party seeking indemnity has incurred liability due to a breach of a duty owed to it by the one sought to be charged, and such a duty may arise by reason of a contractual obligation. Altermatt v. Arlan’s Dep’t Stores, 284 Minn. 537, 538, 169 N.W.2d 231, 232 (1969). “Indemnity usually requires that one party reimburse another entirely for its liability.” Zontelli & Sons, Inc. v. City of Nashwauk, 373 N.W.2d 744, 755 (Minn.1985).

Under Minn. R. Civ. P. 14.01, a joint tortfeasor need not wait until it has made the actual payment to bring an indemnity claim, but may institute a third-party action in conjunction with the original claim. Grothe v. Shaffer, 305 Minn. 17, 25, 232 N.W.2d 227, 232 (1975). When such a third-party action is brought, the indemnity claim is contingent on the outcome of the original action. Id., 232 N.W.2d at 233.

In this case, instead of pursuing the original action between them, Two Harbors and Rice Lake entered into a settlement agreement whereby Two Harbors paid Rice Lake $200,000 and executed a conditional promissory note. The settlement allowed Rice Lake to step into Two Harbors’ place in pursuing an indemnity action against Rust. Success in that action was the condition on which the note became payable.

This procedure is different from the usual approach with an indemnity claim, but indemnity is “an equitable doctrine that does not lend itself to hard-and-fast rules, and its application depends upon the particular facts of each case.” Zontelli, 373 N.W.2d at 755.

Rust argues that the settlement agreement limits Two H„_ >i‘s' third-party indemnity claim against Rust to the $200,000 Two Harbors actually paid to Rice Lake because, for indemnity purposes, the conditional promissory note is not payment. Rust argues that common-law indemnity requires actual payment. In support of this proposition Rust references a Restatement of Restitution comment:

[W]here the secondary obligor [here Two Harbors] gives a negotiable instrument as conditional payment he is not entitled to indemnity until the instrument has been paid or he has become unconditionally liable to a transferee of the instrument. * * * Before such time, the duty of the primary obligor [here Rust] has not been discharged and the benefit to him cannot be measured.

Restatement of Restitution § 76 cmt. c (1937).

Rust is correct that liability could not arise from Two Harbors’ conditional payment to Rice Lake. But here, the payment ceased to be conditional once the jury determined, first, that Rice Lake was entitled to $2,166,750 under its contract with Two Harbors and, second, that Rust’s negligence caused $1,994,378 of this obligation. Therefore, Two Harbors’ claim against Rust is no longer limited to the $200,000 actually paid by Two Harbors to Rice Lake; the promissory note became unconditionally payable for indemnity purposes when Two Harbors’ liability to Rice Lake and Rust’s liability to Two Harbors was established.

Furthermore, during the time the note remained conditional, no procedural rule barred Rice Lake and Two Harbors from pursuing the indemnity claim. Were we to rule that such a bar existed, parties in the position of Rice Lake and Two Harbors would be precluded from settlements, like this one, that serve judicial efficiency by turning three-sided disputes into two-sided conflicts.

We note also that the issues Rust faced at trial after the Rice Lake-Two Harbors settlement were precisely those it confronted before the settlement. There was some realignment of the parties, but, at bottom, Two Harbors was simply put in the role of a neutral. In most cases, turning a party into a neutral will simplify the trial.

II.

Rust also argues that prejudgment interest was improperly included in the judgment. The settlement agreement limited Rice Lake’s recovery to the amount of the conditional promissory note for $1,585,402 plus the cash payment, without any reference to prejudgment interest. Neither Rice Lake nor Two Harbors can now claim prejudgment interest on the damages award when Two Harbors’ conditional liability and therefore Rice Lake’s recovery were capped by the promissory note. See Summit Court, Inc. v. Northern States Power, Co., 354 N.W.2d 13, 15 (Minn.1984) (after party executes release and satisfaction of judgment, that party may not later claim prejudgment interest). The trial court improperly awarded prejudgment interest and the judgment is reduced by the amount of that interest award.

III.

Rust claims that it is entitled to a new trial on the issue of damages because the trial court erred in determining, as a matter of law, that it was not entitled to an adjustment based on a differing site-condition.

A differing site condition may generally be described as a subsurface or other unknown physical condition at the site which differs materially from that indicated in the contract or from that which is ordinarily encountered, which leads to a material change in the cost of construction.

City of Morton v. Minnesota Pollution Control Agency, 437 N.W.2d 741, 743 (Minn.App.1989).

To prevail on its claim of a differing site-condition, Rust must prove cumulatively that

(i) the contract documents must have affirmatively indicated or represented the subsurface conditions which form the basis of the plaintiffs claim; (ii) the contractor must have acted as a reasonably prudent contractor in interpreting the contract documents; (iii) the contractor must have reasonably relied on the indications of subsurface conditions in the contract; (iv) the subsurface conditions actually encountered, within the contract site area, must have differed materially from the subsurface conditions indicated in the same contract area; (v) the actual subsurface conditions encountered must have been reasonably unforeseeable; and (vi) the contractor’s claimed excess costs must be shown to be solely attributable to the materially different subsurface conditions within the contract site.

Weeks Dredging & Contracting, Inc. v. United States, 13 Cl.Ct. 193, 218 (Cl.Ct.1987), aff'd 861 F.2d 728 (Fed.Cir. Sept.2, 1988) (emphasis added). The elements are cumulative, not in the alternative. Id.

Element (iv) in the above list of elements required to establish a differing site-condition is critical. It is that the subsurface conditions actually encountered differ materially from the subsurface conditions that had been indicated to exist in the contract area. There is here no genuine factual dispute on this issue because the uncontested evidence showed: (1) GME’s soil report contained the result from a boring sample that indicated that one of the five soil exploration borings was unable to advance despite 50 blow weights; (2) a GME engineer stated that based on these reports he would expect bedrock at the site; (3) Rust defined “rock” for purposes of the project as a “blow count” in excess of 50 blow weights with no penetration; (4) bedrock was found in prior construction projects at the site; (5) Rust estimated that 800 cubic yards of rock excavation would be required for the project; and (6) the bid form solicited separate unit prices for rock excavation.

The trial court did not err in determining that there was no genuine issue of fact and, as a matter of law, Rust was not entitled to an adjustment based on a differing site-condition.

IV.

Rust finally argues that damages were improperly calculated, claiming the amount of the judgment should be reduced by the actual cost of the rock excavation. The jury was instructed to deduct the cost of the rock excavation from the damage award and presumably did so. The trial court properly concluded that Rust is not entitled to have the cost of rock excavation subtracted from the settlement agreement. To do so would give Rust double credit.

DECISION

The trial court did not err in ruling that the conditional promissory note became payable for indemnity purposes after a jury determined the secondary and primary obligors’ liability, or in finding that a differing site-condition was not present. The trial court erred in awarding prejudgment interest when the settlement agreement did not provide for payment of prejudgment interest. The principal judgment amount of $1,785,402 is otherwise proper.

Affirmed as modified.


author: HARTEN, Judge

text:
    Peter W. MORTON, Respondent, v. Gregg N. DYSTE, M.D., Appellant.
    No. C8-00-381.
    Court of Appeals of Minnesota.
    Aug. 29, 2000.
    Mark A. Hallberg, MacKenzie & Hall-berg, P.A., Minneapolis (for respondent).

      William H. Leary, III, Kyle M. Thomas, St. Paul (for appellant).
    Considered and decided by HARTEN, Presiding Judge, PETERSON, Judge, and PARKER, Judge

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

   OPINION

HARTEN, Judge

The district court denied appellant’s motion for summary judgment and purported to certify a question as important and doubtful pursuant to Minn. R. Civ.App. P. 103.03(h). Because the district court did not specify the precise legal question being certified, we dismiss the appeal.

FACTS

Between August 27, 1995, and September 26, 1995, appellant Gregg N. Dyste, M.D., treated respondent Peter W. Morton for a spinal cord injury. The treatment was unsuccessful and respondent became a C3-4 quadriplegic; he is respirator-dependent. At the time of the treatment, the statute of limitations for medical malpractice claims was two years. Minn.Stat. § 541.07(1) (1994). In 1999, MinmStat. § 541.076 (Supp.1999), increased the statute of limitations from two to four years.

On August 26, 1999, respondent sued appellant, alleging medical malpractice. Appellant moved for summary judgment, arguing that respondent’s claim was time-barred. The district court denied the motion and purported to certify a question as important and doubtful pursuant to Minn. R. Civ.App. P. 103.03(h).

ISSUE

Did the district court specify the precise legal question being certified?

ANALYSIS

Minn. R. Civ.App. P. 103.03(h) provides that an appeal may be taken from an order that denies a motion for summary judgment “if the trial court certifies that the question presented is important and doubtful[J” It is the district court’s responsibility to determine whether an issue merits certification. State v. Anderson, 300 N.W.2d 172, 172 (Minn.1980). In making that determination, the district court must make a reasoned inquiry as to whether the issue comports with the rule, i.e., whether the issue is in fact “important and doubtful.” See Jostens, Inc. v. Federated Mut. Ins. Co., 612 N.W.2d 878, 884 (Minn. 2000) (listing the factors district courts should consider when determining whether an issue is important and doubtful). The appellate court has a duty to ensure compliance with certification requirements.

[Appellate courts] will no longer accept certified questions unless the trial court first specifies the question presented. To do otherwise would force [appellate courts] to speculate as to the reasons for the certification request and would in effect, require the rendering of an impermissible advisory opinion.

Duxor Inv. Aktiengesellschaft v. Investment Rarities, Inc., 413 N.W.2d 502, 501 (Minn.1987).

[The requirement for a specific certified question] should come as no surprise to the bench and bar. Forewarnings of the imposition of such a requirement have appeared in at least two recent cases. See Jablonski v. Mutual Serv. Cas. Ins. Co., 408 N.W.2d 854, 855 n. 2 (Minn. 1987) and Farmers & Merchants State Bank of Pierz v. Bosshart, 400 N.W.2d 739, 740 n. 2 (Minn.1987).

Id. n. 2. See also F. & H. Inv. Co. v. Sachman-Gilliland Corp., 305 Minn. 155, 157-58, 232 N.W.2d 769, 772 (1975) (holding that “[t]he certification should be carefully and precisely framed so as to present distinctly and clearly the question of law involved and should not be presented until the record is developed to the point where the question is relevant and presents a substantive issue”) (quotation and citation omitted); King v. Watonwan Farm Serv. Co., 430 N.W.2d 24, 26 (Minn.App.1988) (dismissing certified question because “the trial court did not make findings of fact explaining its ruling, nor specified the precise legal question”).

Here, the district court order simply provides

that the issue presented in the attached Court Order Denying Motion for Summary Judgment, dated December 6, 1999, presents an issue which is important and doubtful * * *.

The order states only that “[appellant’s] motion to dismiss is denied,” and the attached memorandum of law does not specify a precise legal question. Accordingly, the purported certification is defective.

DECISION

Because certification is defective, we dismiss the appeal.

Appeal dismissed.


author: RANDALL, Judge

text:
    STATE of Minnesota, Respondent, v. Aaron David KATES, Appellant.
    No. C3-98-1467.
    Court of Appeals of Minnesota.
    Aug. 29, 2000.
    Review Denied Oct. 26, 2000.

      Mike Hatch, Attorney General, Thomas R. Ragatz, Assistant Attorney General, St. Paul; and Ross Arneson, Blue Earth County Attorney, Mankato (for respondent).
    Ann McCaughan, Assistant State Public Defender, Minneapolis (for appellant).
    Considered and decided by DAVIES, Presiding Judge, RANDALL, Judge, and ANDERSON, Judge.
   OPINION

RANDALL, Judge

Appellant challenged his conviction on three counts of criminal sexual conduct, asserting the district court erred in denying his motion to sever the charges because they related to different victims. This court agreed, determined that the error was not harmless, and remanded to the district court. The supreme court granted respondent state’s petition for review. The supreme court held that this court erred by applying a harmless-error analysis rather than the Spreigl analysis as set forth in State v. Profit, 591 N.W.2d 451 (Minn.1999). The supreme court remanded to this court for reconsideration in light of Profit. We again reverse and remand to the district court for separate trials relating to each victim on the remaining charges.

FACTS

Appellant Aaron David Kates held a party at his apartment in January 1997. J.S., who was then 15 years old, attended with her 16-year-old friend T.L. They had smoked marijuana before going to the party and both were drinking alcohol at the party. According to J.S.’s testimony, Kates began talking with her during the party, took her into a bedroom, shut the door, and turned off the light. They kissed, but J.S. told Kates she did not want to have sex with him. Kates unfastened his pants and pushed J.S.’s head down towards his penis. When J.S. tried to leave, Kates pushed her down to the floor and began to kiss her breasts. J.S. left the room when someone came to the bedroom door. J.S. later joined T.L. in the bathroom, and Kates followed her. T.L. testified that while they were all in the bathroom, Kates tried to push her head towards his exposed penis, and she left the bathroom. J.S. testified that after T.L. left, J.S. again told Kates she did not want to have sex, but she eventually gave in, and Kates had intercourse with her.

C.L. testified that on May 30, 1997, when she was 13 years old, she and her 15-year-old friend T.H. stayed overnight at Kates’s apartment. The girls had been drinking alcohol and smoking marijuana before going to his apartment and continued drinking after they arrived at his apartment. C.L. passed out on the couch, and T.H. slept in the bedroom with Kates. During the night, Kates came out of his bedroom and asked C.L. for a condom, and C.L. gave him one. Kates then rubbed his penis on her face. C.L. turned away, and Kates left. In the morning, Kates woke C.L. and had intercourse with her.

T.H. testified that although she slept in the same bedroom with Kates on May 30, 1997, she did not have intercourse with him that night. According to T.H., Kates left the bedroom twice that night, and C.L. later told her about the assault. T.H. testified that she and Kates had consensual intercourse once or twice in April 1997.

Kates admitted throwing the January party but denied going into the bedroom with J.S. and denied being in the bathroom with J.S. or T.L. He also testified that he allowed T.H. and C.L. to use his phone on May 30, 1997, but did not allow them to stay overnight with him.

Kates was charged with (a) two counts of third-degree criminal sexual conduct and two counts of fourth-degree criminal sexual conduct against J.S.; (b) one count of indecent exposure towards T.L.; (c) one count of third-degree criminal sexual conduct against C.L.; and (d) one count of third-degree criminal sexual conduct against T.H. Kates moved to sever the charges for the incidents involving C.L. and T.H. from the January 1997 incidents involving J.S. and T.L. The district court denied his motion. After a jury trial, Kates was convicted of one count each of third- and fourth-degree criminal sexual conduct involving J.S. and convicted of one count of third-degree criminal sexual conduct against T.H. The jury found Kates not guilty of the other charged offenses.

On appeal, the state did not dispute that joinder of the charges relating to C.L. and T.H. with the charges relating to J.S. and T.L. was error. This court concluded that the district court erred by refusing to sever the charges and determined that this error was not harmless. State v. Kates, 598 N.W.2d 693 (Minn.App.1999). The supreme court granted the state’s petition for review. The supreme court accepted as true the state’s concession that the join-der was improper. State v. Kates, 610 N.W.2d 629, 631 (Minn.2000). But the supreme court then went on to state that, as articulated in State v. Profit, 591 N.W.2d 451 (Minn.1999), the Spreigl analysis is the correct framework for evaluating “whether an erroneous failure to sever is so prejudicial that reversal is necessary.” Kates, 610 N.W.2d at 631 (citation omitted). The supreme court set aside this court’s harmless error analysis. Id. The supreme court remanded to this court for reconsideration in light of Profit. Id.

ISSUE

Applying a Spreigl analysis, was the district court’s error in refusing to sever so prejudicial that reversal for new trials is necessary?

ANALYSIS

Joined offenses must be part of a single behavioral incident or course of conduct. State v. Profit, 591 N.W.2d 451, 458 (Minn.1999), cert. denied, — U.S. ——-, 120 S.Ct. 153, 145 L.Ed.2d 130 (1999). The state concedes that the district court erred when it denied Kates’s motion to sever the joined offenses. Thus, the only issue is whether this error mandates reversal of Kates’s convictions. See State v. Kates, 610 N.W.2d 629, 631 (Minn.2000) (recognizing state concedes error and remanding to this court to resolve whether district court’s error necessitates reversal).

The supreme court has directed us that the Spreigl analysis is the “proper framework” for evaluating whether an error in failing to sever is so prejudicial that a reversal is mandated. Id. (citing Profit, 591 N.W.2d at 460-61). If evidence relating to each charged offense would have been admissible as Spreigl evidence in separate trials, joinder of the charges was not prejudicially erroneous. See State v. Conaway, 319 N.W.2d 35, 42 (Minn.1982) (holding although joinder possibly improper, it was not prejudicial because evidence of each offense would have been admissible as Spreigl evidence in trial of other).

Whether Spreigl evidence is admissible “is governed by Minn. R. Evid. 404(b) and subject to Minn. R. Evid. 403.” Profit, 591 N.W.2d at 461 (citation omitted). Evidence of other bad acts may not be used as character evidence to show a defendant conformed with this character. Minn. R. Evid. 404(b). The evidence is carefully limited to demonstrating “motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.” Id. It is improper for the state to claim “motive, opportunity, intent, * * * or absence of mistake or accident” as a subterfuge to prove a defendant’s propensity or disposition to commit a crime. See State v. Nunn, 561 N.W.2d 902, 907 (Minn.1997) (stating evidence of other crimes inadmissible to prove defendant’s propensity or disposition to commit crimes).

Even if offered for a proper purpose under Minn. R. Evid. 404(b), evidence should be excluded pursuant to Minn. R. Evid. 403 if the danger of unfair prejudice, confusion of the issues, or misleading the jury outweighs the probative value of the evidence. Profit, 591 N.W.2d at 461. Spreigl evidence may only be admitted if

(1) there is clear and convincing evidence that defendant participated in the Spreigl offense; (2) the evidence is relevant and material to the state’s case, and (3) the probative value of the evidence is not outweighed by its potential for unfair prejudice.

State v. Robinson, 604 N.W.2d 355, 363 (Minn.2000) (citation omitted).

In Profit, the defendant was convicted of all charges after a trial on improperly joined offenses. Profit, 591 N.W.2d at 458, 460. Thus, the supreme court did not need to address whether there was clear and convincing evidence of all the offenses. In contrast, Kates was acquitted on three of the five charges related to his alleged actions in January, and he was acquitted of the alleged May offense. This fact, of record, makes it impossible to apply the first prong of the Spreigl admissibility test.

Kates agrees there may have been clear and convincing evidence that he committed the April offense involving T.H. But because Kates was acquitted on the May charge after the joined trial, it is impossible to now determine, on appellate review with hindsight, whether there was clear and convincing evidence that Kates committed the May offense. Making a clear and convincing evidence determination, even with its lesser standard than proof beyond a reasonable doubt, after an acquittal by a jury, would require an appellate court to weigh evidence and literally retry the case. That is a role appellate courts try to avoid. Cf. Robinson, 604 N.W.2d at 363 (stating in determining admissibility of Spreigl evidence “trial court must determine that * * * there is clear and convincing evidence that defendant participated in the Spreigl offense” (emphasis added)); Kucera v. Kucera, 275 Minn. 252, 254, 146 N.W.2d 181, 183 (1966) (observing “it is not within the province of [appellate courts] to determine issues of fact on appeal”). Importantly, if Kates had been tried and acquitted on the May offense before a trial on the January offenses, the May offense could not have been admitted at the trial on the January offenses. See State v. Wakefield, 278 N.W.2d 307, 309 (Minn.1979) (stating “under no circumstances ” may evidence of crime for which defendant has been acquitted be admitted at trial on another offense (emphasis added)).

Kates agrees there was clear and convincing evidence of the two January charges on which he was convicted in the joined trial. But as to the three January charges on which Kates was acquitted, indecent exposure towards T.L. and one count each of third- and fourth-degree criminal sexual conduct involving J.S., the only way to determine the existence of clear and convincing evidence would be for this court to retry this evidence from a cold record and find “clear and convincing evidence” despite a jury verdict of not guilty. Making this factual determination exceeds the role and ability of appellate courts. Additionally, had a trial on the April and May charges been held after the trial on the January charges, assuming Kates had again been acquitted of three of the five January charges, evidence relating to the charges from the January incident for which Kates was acquitted would have been inadmissible in a trial on the April and May charges. See id.

Due process and fundamental fairness, not to mention common sense, dictate we cannot now, with hindsight, conclude there is clear and convincing evidence that Kates committed the four offenses on which he was acquitted. Absent clear and convincing evidence that Kates committed all the offenses tried in the erroneously joined trial, the first prong in the Spreigl analysis has not been met in this case. Because all three prongs must be fulfilled before Spreigl evidence is admissible, we need not address the second and third prongs. See Robinson, 604 N.W.2d at 363 (listing three requirements for admitting Spreigl evidence and joining those requirements with “and”). Kates’s improperly joined trial included evidence that would not have been admissible as Spreigl evidence in separate trials. The district court’s refusal to separate these offenses was prejudicial error. See Minn. R.Crim. P. 17.03, subd. 3(1)(2) (requiring severance of offenses or charges if they are not related). With the jury verdict now in, containing acquittals on more counts than there were convictions, the state cannot satisfy the first prong of the Spreigl test.

DECISION

The district court’s refusal to grant Kates’s motion to sever was prejudicially erroneous because evidence of all the joined, charged offenses could not have been introduced as Spreigl evidence in separate trials. We reverse and remand for two separate fair trials, replete with due process, for Kates. The judicial system should be able to accomplish this. Kates is entitled to a new trial on the alleged January incident charges on which he was previously convicted and a new trial on the charge stemming from the alleged April incident.

Reversed and remanded.

      . "On motion of the prosecuting attorney or the defendant, the court shall sever offenses or charges if * * * the offenses or charges are nol related ⅞ * * .” Minn. R.Crim. P. 17.03, subd. 3(l)(a) (emphasis added).

      . Kates asserts that the district court should have severed the charges into three trials, one for the January offenses, one for the April offense, and one for the May offenses. Despite this assertion, in his motion to sever Kates requested only that the court sever the April and May charges from the January charges and “[l]hat the trial regarding [the April and May charges] be heard on January 7 and 8, 1998.” Thus, the issue is whether the district court could have properly admitted evidence from the January incidents as Spreigl evidence in a trial on the April and May offenses.


author: MAKING, Justice.

text:
    2000 ND 164
    DAKOTA NORTHWESTERN ASSOCIATES LIMITED PARTNERSHIP, Applicant and Appellant, v. BURLEIGH COUNTY BOARD OF COUNTY COMMISSIONERS, Respondent and Appellee.
    No. 20000039.
    Supreme Court of North Dakota.
    Aug. 24, 2000.

      Lawrence R. Klemin, Bucklin, Klemin & McBride, Bismarck, for applicant and appellant.
    Rick Lee Volk, Assistant State’s Attorney, Bismarck, for respondent and appel-lee.
   MAKING, Justice.

[¶ 1] Dakota Northwestern Associates Limited Partnership (“Dakota”) appeals from a judgment affirming the decision of the Burleigh County Board of County Commissioners (“the Board”) on applications for abatement of real estate taxes for the years 1995, 1996, and 1997. We conclude the Board’s decision was not arbitrary, capricious, or unreasonable, and we affirm..

I

[¶ 2] Dakota owns a commercial office building in downtown Bismarck. The property was originally assessed at $5,191,000 for the years 1995, 1996, and 1997.Dakota hired appraiser Joseph Ibach to provide a retrospective appraisal of the property for 1995, 1996, and 1997. Ibach determined the market value of the property in the relevant years was $3,000,-000, less $400,000 for deferred maintenance on the building which reduced its value.

[¶ 3] Dakota filed applications for abatement of the real estate taxes for the years 1995, 1996, and 1997, requesting the assessed value of the property be reduced to $2,600,000 in accordance with Ibach’s appraisal. Upon learning there was $400,000 in deferred maintenance on the building, the City Assessor recommended the $5,191,000 assessed value be reduced to $4,791,000. At a hearing on April 28, 1998, the Bismarck City Commission adopted the assessor’s recommendation of $4,791,-000.

[¶ 4] In tax abatement proceedings, the City Commission’s decision is a recommendation to the Board of County Commissioners, which makes the final decision. See N.D.C.C. § 57-23-06. The recommendation of the City Commission was conveyed to the Board, which held hearings on the matter on July 6 and August 3, 1998. The Board set the value of the property at $4,791,000, the amount recommended by the City Commission.

[¶ 5] Dakota appealed to the district court, which remanded for consideration of additional evidence. On remand, the Board considered an appraisal prepared by Todd Reid for the mortgagee on the property. Reid’s appraisal valued the property at $3,250,000 as of March 1, 1998. Also considered upon remand was a second appraisal prepared by Ibach for a new lender on the property. Ibach’s second appraisal determined the value of the property in December 1998 was $3,000,000, taking into account that the $400,000 in deferred maintenance had been completed.

[¶ 6] The Board also considered the assessor’s valuations of the property for the years 1998 and 1999. For 1998, the assessor valued the property at $5,191,000. For 1999, the assessor reduced the value to $4,200,000 because a major tenant had moved out of the building.

[¶ 7] At a July 7, 1999, hearing, the Board considered the evidence and discussed the various valuations of the property. Ultimately, the Board decided to value the property for the years 1995, 1996, and 1997 at $4,200,000, the same amount at which it was assessed in 1999. The district court affirmed the Board’s decision, and Dakota appealed to this Court.

II

[¶8] Our review of a local governing body’s assessment of value for tax purposes is limited by the doctrine of separation of powers. See Lindteigen v. City of Bismarck, 1997 ND 123, ¶ 6, 565 N.W.2d 47; National Sun Industries, Inc. v. Ransom County, 474 N.W.2d 502, 506 (N.D.1991); Ulvedal v. Board of County Commissioners, 434 N.W.2d 707, 709 (N.D.1989). Taxation of property is a legislative function, not a judicial function, and courts may not substitute their judgment for that of the local governing body. Pic v. City of Grafton, 1998 ND 202, ¶ 11, 586 N.W.2d 159; Ulvedal, at 709. A reviewing court may not reverse the Board’s decision simply because it finds some of the evidence more convincing; rather, the reviewing court may reverse only where there is such an absence of evidence or reason that the Board’s decision is arbitrary, capricious, or unreasonable. Trollwood Village Limited Partnership v. Cass County Board of County Commissioners, 557 N.W.2d 732, 734 (N.D.1996); Ulvedal, at 709. A decision of a local governing body is arbitrary, capricious, or unreasonable only if it is not the product of a rational mental process, by which the facts and the law are considered together for the purpose of achieving a reasoned and reasonable interpretation. Douville v. Pembina County Water Resource District, 2000 ND 124, ¶ 5, 612 N.W.2d 270; Graber v. Logan County Water Resource Board, 1999 ND 168, ¶ 7, 598 N.W.2d 846; Lindteigen, at ¶ 6.

[¶ 9] For tax assessment purposes, property must be valued at its true and full value:

Beginning with the year 1981, all assessors and boards of equalization shall place the values of all items of taxable property at the true and full value of the property except as otherwise specifically provided by law, and the amount of taxes that may be levied on such property for the year 1981 and each year thereafter must be limited as provided in this chapter.

N.D.C.C. § 57-02-27.1. “True and full value” is defined, in pertinent part, in N.D.C.C. § 57-02-01(15):

“True and full value” means the value determined by considering the earning or productive capacity, if any, the market value, if any, and all other matters that affect the actual value of the property to be assessed.

Under N.D.C.C. § 57-23-04(l)(h), “the board of county commissioners may abate or refund, in whole or in part, any assessment or tax upon real property ... [w]hen the assessment on the complainant’s property is invalid, inequitable, or unjust.” Dakota asserts the assessment in this case does not reflect the true and full value of the property, and is inequitable and unjust.

[¶ 10] Much of Dakota’s argument is focused upon alleged weaknesses in the assessor’s valuation of the property. Dakota challenges the factual underpinnings of and rationale for the assessor’s valuation, arguing Ibach’s appraisals were based upon more equitable financial figures and better reasoning. These are matters which go to weight and credibility, and do not rise to the level of arbitrary, capricious, or unreasonable action. As this Court explained in Ulvedal, 434 N.W.2d at 710:

The city assessor’s opinion about value was not overpowering, particularly when compared with the appraisal by taxpayers’ experts. But the limited scope of judicial review does not permit the courts to weigh the material on value to determine which part of it is more convincing. Weighing factual material for tax purposes is the responsibility of county commissioners, not the courts. Since we cannot say that the city assessor’s figures were unreasonable, we cannot say that the Board’s decision to confirm that valuation for the assessment was arbitrary, capricious or unreasonable. The Board’s decision was based on reasonable evidence before it.

[¶ 11] It is not the function of this Court to micro-manage decisions of local taxing bodies in valuing property for tax assessment purposes. In this case we cannot say the assessor’s figures were unreasonable, and therefore it was for the Board to assess credibility and give whatever weight it determined appropriate to the various expert appraisals.

[¶ 12] Dakota argues the Board’s final decision to value the property at $4,200,000 for 1995, 1996, and 1997 was not based upon any evidence in the record and was entirely arbitrary. The evidence of value in this case for the years in question included Ibach’s original appraisal of $2,600,000, Ibach’s second appraisal of $3,000,000, Reid’s appraisal of $3,250,000, and the assessor’s appraisal of $4,791,000. Dakota in essence argues the Board had to select one of those values, and could not select another figure within the range of those values.

[¶ 13] The tax assessment valuation process is not intended to be a form of “final-offer arbitration,” in which each party submits a final offer and the arbitrator must select one or the other. See Black’s Law Dictionary 100 (7th ed.1999). The Board, in considering an application for abatement, must determine the true and full value of the property based upon all of the evidence. See N.D.C.C. §§ 57-02-01(15), 57-02-27.1, and 57-23-04. In doing so, the Board may choose a value within the range of the evidence, so long as there is some basis for the Board’s determination in the evidence.

[¶ 14] We agree with the rationale expressed by the district court in its memorandum opinion:

The decision made by the commissioners was not a decision to adopt any single evaluation of the building. Instead, they decided the true and full value of the property was $4.2 million — an amount they had agreed was the true and full value for 1999. The decision appears to be a consensus reached by a well-informed group and well within the boundaries of the evaluations of the values set by the assessor and the appraisers. It would not have been unreasonable for the county commissioners to accept the value set by the assessor or either of the appraisers and it was not unreasonable for them to agree that the property was worth more than the appraisers indicated and less than the assessor indicated.

[¶ 15] In this case, the County Commissioner who moved to set the .value at $4,200,000 explained that he believed Ibach’s appraisal was too low and the assessor’s appraisal was too high. He therefore moved to set the valuation for 1995, 1996, and 1997 at $4,200,000, the same as the amount assessed for 1999. While we may not have chosen to value the property at that amount, and further explanation by the Board would have been helpful, we cannot say the Board’s decision is not the result of a rational mental process. Accordingly, its decision is not arbitrary, capricious, or unreasonable.

[¶ 16] The judgment affirming the Board’s decision is affirmed.

[¶ 17] GERALD W. VANDE WALLE, C.J., WILLIAM A. NEUMANN, CAROL RONNING KAPSNER, JJ., LAURIE A. FONTAINE, D.J., concur.

[¶ 18] The Honorable LAURIE A. FONTAINE, D.J., sitting in place of SANDSTROM, J., disqualified.

      . In eminent domain and inverse condemnation cases this Court has repeatedly stated the factfinder's determination of value of the property will be upheld on appeal if it falls within the range of the values presented in the evidence. See, e.g., City of Devils Lake v. Davis, 480 N.W.2d 720, 726 (N.D.1992); Kraft v. Malone, 313 N.W.2d 758, 762 (N.D. 1981); Hultberg v. Hjelle, 286 N.W.2d 448, 452, 458 (N.D.1979); State v. Livingston, 270 N.W.2d 556, 557 (N.D.1978); Northern States Power Co. v. Effertz, 94 N.W.2d 288, 292 (N.D.1958).

      . We urge Boards of County Commissioners to provide, in the future, a full explanation of their rationale when determining valuation of property in tax abatement proceedings.


author: KAPSNER, Justice.

text:
    2000 ND 163
    GRINNELL MUTUAL REINSURANCE COMPANY, Plaintiff and Appellee, v. FARM & CITY INSURANCE COMPANY, Intervenor and Appellee, and Casey Leikas, Vernon Leikas, Gail Leikas, Thomas Zander, individually, and as representative of all heirs-at-law of June Zander, deceased, and Thomas Zander, as personal representative of the Estate of June Zander (collectively referred to as Zanders), Defendants and Appellants. Thomas Zander, Plaintiff and Appellant, v. American Family Mutual Insurance Company, Defendant, Third-Party Plaintiff and Appellant, v. Grinnell Mutual Reinsurance Company and Farm & City Insurance Company, Third-Party Defendants and Appellees. American Family Mutual Insurance Company, Plaintiff and Appellant, v. Grinnell Mutual Reinsurance Company and Farm & City Insurance Company, Defendants and Appellees.
    Nos. 990394-990396 and 20000010.
    Supreme Court of North Dakota.
    Aug. 24, 2000.

      Charles A. Stock (argued), Johannson, Rust, Fagerlund, Yon & Stock, Crookston, for plaintiff and appellee, third-party defendant and appellee, and defendant and appellee Grinnell Mutual Reinsurance Company.
    Douglas W. Gigler (argued), Nilles, Hanson & Davies, Ltd., Fargo, for intervenor and appellee, third-party defendant and appellee, and defendant and appellee Farm & City Insurance Company.
    Timothy Q. Purdon (submitted on brief), Dickson Law Office, Bismarck, for defendant and appellant Casey Leikas.
    David R. Bossart (appeared), David R. Bossart Law Firm, PC, Fargo, for defendants and appellants Vernon Leikas and Gail Leikas.
    Daylen D. Ramstad (argued), Wegner, Fraase, Nordeng, Johnson & Ramstad, Fargo, for defendant and appellant Thomas Zander.
    Steven L. Marquart (appeared), Cahill & Marquart, Moorhead, MN, for defendant, third-party plaintiff and appellant, and plaintiff and appellant American Family Mutual Insurance Company.
   KAPSNER, Justice.

[¶ 1] Casey Leikas, Vernon Leikas, Gail Leikas, Thomas Zander, and American Family Mutual Insurance Company appeal from summary judgments declaring that Grinnell Mutual Reinsurance Company (“Grinnell”) and Farm & City Insurance Company (“F & C”) have no duty to indemnify or defend the Leikases. We affirm, holding the Grinnell and F & C policies did not conflict with N.D.C.C. § 39-16.1-ll(2)(b) and there was no genuine issue of material fact whether Casey Leikas had permission to use his parents’ vehicle at the time of the December 6, 1997, automobile accident.

I

[¶ 2] Since his graduation from high school in 1992, Casey Leikas has suffered from drag and alcohol problems. He has been in and out of school and spent time in the military. Casey unsuccessfully attempted several rehabilitation programs for his drug and alcohol problems, and has several times returned to live at the farm home of his parents, Vernon and Gail Lei-kas.

[¶ 3] In 1997, Casey moved to Fargo. On November 21, 1997, approximately two weeks before the accident, Casey was arrested for DUI, driving without insurance, and possession of marijuana. At the time of his arrest, Casey was driving his own vehicle, a 1983 Buick. After Casey spent the weekend in jail and pleaded guilty to the charges, he moved back to his parents’ home.

[¶ 4] Shortly thereafter, Vernon Leikas procured an insurance policy in Casey’s name from F & C to cover Casey’s 1983 Buick. Vernon and Gail Leikas’s vehicles, a 1996 Chevrolet pickup and a 1996 Oldsmobile, were insured under a policy issued by Grinnell.

[¶ 5] On December 5, 1997, Vernon and Gail Leikas left for a vacation to Florida. On the day before they left, Vernon Leikas explicitly told Casey he was not to drive their vehicles while they were gone. Casey was told the only exception was that he could drive the four-wheel-drive pickup to a neighboring aunt’s farm to get snow removal equipment if there was a heavy snowfall and Casey could not get out of the yard with his own car to get to work. In preparation for their trip, the Leikases moved Casey’s car to the attached garage nearest the house and placed the opener for that garage door in Casey’s car. The 1995 Oldsmobile, which normally was parked in that garage, was moved to the detached garage some distance from the house.

[¶ 6] On December 5, 1997, Casey drove his parents to the airport in his car. At the airport, Vernon again told Casey not to drive their vehicles while they were gone. Casey spent the day at work. That evening, Casey drank extensively and smoked marijuana.

[¶ 7] The next day Casey got up at noon and returned to Fargo, this time driving his parents’ 1995 Oldsmobile. He spent the afternoon drinking in bars. As he was returning home at approximately 5:00 p.m., Casey ran a stop sign on a rural road and collided with a vehicle driven by Thomas Zander. Zander’s vehicle then struck a third vehicle. Zander’s wife, June, was killed in the crash, and Thomas Zander was injured.

[¶ 8] Zander sued Casey, Vernon, and Gail Leikas. Grinnell, the insurer of the 1995 Oldsmobile, brought a declaratory judgment action to determine coverage. F & C which insured Casey’s 1983 Buick, intervened, seeking a declaration it had no obligation to provide no-fault coverage to Casey or to indemnify or defend any of the Leikases. This declaratory judgment action was consolidated with two other pending actions: Thomas Zander’s suit against his own insurer, American Family, for uninsured motorist coverage, and American Family’s suit against Grinnell and F & C to recover its payment of uninsured motorist coverage.

[¶ 9] Grinnell and F & C moved for summary judgment, arguing they had no obligations under their respective policies because Casey was using his parents’ vehicle without permission at the time of the accident. The district court determined there was no genuine issue of material fact on the issue of permission and granted summary judgments in favor of Grinnell and F & C. The Leikases, Zander, and American Family appealed.

II

[¶ 10] The appellants assert the provisions in the Grinnell and F & C policies excluding liability coverage when a vehicle is used without permission are contrary to N.D.C.C. § 39-16.1-ll(2)(b) and are void. Section 39-16.1-11(2) is part of the financial responsibility law, and requires that an owner’s policy of liability insurance:

a. Must designate by explicit description or by appropriate reference all motor vehicles with respect to which coverage is thereby to be granted; and
b. Must insure the person named therein and any other person, as insured, using such motor vehicle or motor vehicles with the express or implied permission of such named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of such motor vehicles ....

[¶ 11] The Grinnell policy on the 1995 Oldsmobile provided liability coverage for non-named persons using the vehicle, but excluded coverage “if the person uses a vehicle without having sufficient reason to believe that the use is with permission.” The F & C policy issued to Casey on his 1983 Buick provided liability coverage for any damages for which an insured became legally liable because of an automobile accident, but excluded coverage “for any person ... [u]sing a vehicle without a reasonable belief that that person is entitled to do so.” The appellants argue there is an inherent conflict between the policy exclusions and the statutory requirements because the policy exclusions focus upon whether the driver reasonably believed he had permission, while the statute focuses upon whether the named insured has expressly or impliedly granted permission.

A

[¶ 12] Under the facts of this case, N.D.C.C. § 39-16.1-11(2) does not require coverage under the F & C liability policy. The statute focuses upon coverage which must run with the vehicle — it requires that the policy “designate by explicit description or by appropriate reference all motor vehicles” covered, and then requires specific coverage for the named insured or other persons “using such motor vehicle or motor vehicles” for damages arising out of the ownership, maintenance or use of “such motor vehicles.” We have previously held our financial responsibility laws allow an insurer to insure fewer than all vehicles driven by the named insured. State Farm Mutual Automobile Insurance Co. v. LaRoque, 486 N.W.2d 235, 240 (N.D.1992). In LaRoque, at 240, we held that, “[b]y requiring a designation of all covered vehicles, [N.D.C.C. § 39-16.1-11(2) ] contemplates the circumstance that there will be vehicles not designated and therefore not covered.”

[¶ 13] The accident did not involve the vehicle designated under the F & C policy, Casey’s 1983 Buick. Rather, the policy coverage at issue is for Casey’s use of another vehicle. Under these circumstances, N.D.C.C. § 39-16.1-11(2) does not apply to the F & C policy.

B

[¶ 14] Grinnell argues its policy does not violate the statute because, although it does use different language than the statute, it actually provides all of the coverage mandated by the statute and is, in fact, broader than the statute. We agree.

[¶ 15] Section 39-16.1-ll(2)(b), N.D.C.C., requires coverage if a person is using the vehicle “with the express or implied permission of [the] named insured.” Grinnell’s policy provides coverage if a person uses the vehicle with “sufficient reason to believe that the use is with permission.” Both provisions employ an objective, reasonable man standard to determine whether the use was permissive. Clearly, if the named insured has given express or implied permission to use the vehicle, then the driver would have “sufficient reason to believe” the use was with permission. Thus, we interpret the Grin-nell policy to provide coverage whenever the insured has given express or implied permission to use the vehicle. Grinnell’s policy provides broader coverage than the statute requires by also providing coverage when the named insured has not given express or implied permission, but the driver has reason to believe he has permission.

[¶ 16] Chapter 39-16.1, N.D.C.C., specifies the minimum coverage required to satisfy our financial responsibility laws. See RLI Insurance Co. v. Heling, 520 N.W.2d 849, 852 (N.D.1994); 7 Lee R. Russ, Couch on Insurance § 109.19 (3d ed.1997). The statute does not prevent insurers from providing broader coverage than is statutorily required. See Haser v. Maryland Casualty Co., 78 N.D. 893, 896, 53 N.W.2d 508, 510 (1952); 7 Russ, Couch on Insurance, supra, at § 109.21. We interpret the challenged language in the Grinnell policy to provide broader coverage than is required under N.D.C.C. § 39-16.1-11(2), and consequently there is no conflict between the statute and the policy language. See Wallen v. Acosta, 799 F.Supp. 83, 86 (D.Kan.1992).

Ill

[¶ 17] The appellants assert summary judgment was improperly granted because there is a genuine issue of material fact whether Casey had permission to use the 1995 Oldsmobile at the time of the accident.

[¶ 18] Summary judgment under N.D.R.Civ.P. 56 is a procedural device for prompt and expeditious disposition of a controversy without a trial if there is no genuine issue of material fact or if the law is such that resolution of the factual disputes will not alter the result. Dinger ex rel. Dinger v. Strata Corp., 2000 ND 41, ¶ 14, 607 N.W.2d 886. In considering a motion for summary judgment, the court may examine the pleadings, depositions, admissions, affidavits, interrogatories, and inferences to be drawn from that evidence. Black v. Abex Corp., 1999 ND 236, ¶ 23, 603 N.W.2d 182. Although the party seeking summary judgment bears the initial burden of showing there is no genuine issue of material fact, the party opposing the motion may not simply rely upon the pleadings, or upon unsupported, concluso-ry allegations. Dinger, at ¶ 14; Black, at ¶ 23. Rather, the resisting party must present competent admissible evidence by affidavit or other comparable means which raises an issue of material fact, and must, if appropriate, draw the court’s attention to relevant evidence in the record by setting out the page and line in depositions or other comparable documents containing testimony or evidence raising an issue of material fact. Barnes v. St. Joseph’s Hospital, 1999 ND 204, ¶ 9, 601 N.W.2d 587.

[¶ 19] The appellants argue the district court, in concluding there was no genuine issue of material fact on permission, ignored evidence demonstrating a “custom of usage” of Casey’s prior use of the 1995 Oldsmobile. The evidence relied upon by the appellants is that Casey was a family member living on the family farm; Gail had allowed Casey to use the 1995 Oldsmobile on prior occasions when he had specifically asked for permission; Casey had driven the vehicle with Vernon and Gail in the car on family vacations; the keys were left in the 1995 Oldsmobile when Vernon and Gail went to Florida; and Vernon and Gail had trusted Casey to “look after” the farm and their vehicles while they were on vacation.

[¶ 20] Our prior cases make it clear an insurer may exclude liability coverage for persons using a vehicle without permission, including family members. See Midwest Casualty Insurance Co. v. Whitetail, 1999 ND 133, ¶¶ 5-7, 596 N.W.2d 341; Close v. Ebertz, 1998 ND 167, ¶ 24, 583 N.W.2d 794. Thus, the mere fact Casey was a family member does not mandate coverage if he did not have permission to drive the vehicle.

[¶ 21] The appellants’ argument ignores the direct, uncontradicted evidence that Vernon expressly told Casey not to drive the 1995 Oldsmobile while Vernon and Gail were in Florida. Vernon unequivocally testified in his deposition that he told Casey on two separate occasions, at home on December 4 and at the airport on December 5, not to use the vehicle. In his deposition, Casey acknowledged his father had explicitly told him not to use the 1995 Oldsmobile, and he knew when he took the vehicle on December 6 he did not have permission to do so. When asked why he had driven his parents’ vehicle when he knew he had been expressly forbidden from doing so, he replied he had done so “to defy my parents.”

[¶ 22] The evidence of Casey’s prior usage of the 1995 Oldsmobile, relied upon by the appellants to demonstrate a “custom of usage,” predates Vernon’s explicit prohibition of use communicated to Casey on December 4 and 5, 1997. Even where there has been prior permissive use, the owner may revoke the permission to use the vehicle. See 8 Russ, Couch on Insurance, supra, at § 112.6. A prior continuing permission to use the vehicle is revoked by expressly forbidding use of the car. 8 id. § 112.7.

[¶ 23] Although the issue of permissive use is ordinarily one of fact, summary judgment may be appropriate if the evidence is susceptible to only one conclusion. 8 id. §§ 112.85, 112.87. In Allstate Insurance Co. v. Brown, 920 F.2d 664, 668 (10th Cir.1990) (citations omitted), the court affirmed summary judgment in favor of an insurer in a declaratory judgment action, concluding there was no issue of material fact on permission:

In this case, there are three people whose testimony regarding the issue of permission is relevant: Kendall Brown, the owner of the car, Alfred Brown, his father, and William Brown, the driver. All of these witnesses, including William Brown himself, deny that William had any sort of permission to use his brother’s car. Given this deposition testimony, the trial court was correct in determining that there was no credible evidence from which a reasonable person could conclude that William Brown had any kind of permission, implied or otherwise, to drive his brother’s car.

[¶24] The appellants have not drawn our attention to any admissible evidence to contradict the clear, explicit deposition testimony of Vernon and Casey indicating Vernon expressly told Casey not to use the 1995 Oldsmobile. Evidence that Casey had been given permission to use the vehicle on prior occasions does not create an issue of material fact on implied permission or “custom of usage” when there is uncontradicted evidence Casey was told not to drive the vehicle while his parents were in Florida. The district court did not err in concluding the appellants failed to raise a genuine issue of material fact and summary judgment was warranted.

IV

[¶ 25] We have considered the remaining issues raised by the appellants and find them to be without merit. The judgments are affirmed.

[¶ 26] GERALD W. VANDE WALLE, C.J., DALE V. SANDSTROM, WILLIAM A. NEUMANN, JJ., ALLAN L. SCHMALENBERGER, D.J., concur.

[¶ 27] The Honorable ALLAN L. SCHMALENBERGER, D.J., sitting in place of MARING, J., disqualified.

      . The parties have not argued N.D.C.C. § 39-16.1-11(3) applies in this case, and we therefore do not consider that issue.


author: VANDE WALLE, Chief Justice. GLASER, Surrogate Judge,

text:
    2000 ND 165
    Boyd ADDY and Tom Hutchens, dba the M.A.H.D. Group, L.L.C., Plaintiffs and Appellants, v. Guy MYERS, Defendant, and Nancy Myers, individually and as part of M.A.H.D., L.L.C., Defendants and Appellees.
    No. 990387.
    Supreme Court of North Dakota.
    Aug. 31, 2000.

      Richard B. Baer, P.C., Bismarck, for plaintiffs and appellants.
    Chad C. Nodland, P.C., Bismarck, for defendants and appellees.
   VANDE WALLE, Chief Justice.

[¶ 1] Boyd Addy and Tom Hutchens appealed from a judgment dismissing their action against Guy and Nancy Myers. We hold the trial court did not clearly err in finding Nancy Myers did not intend to assume personal liability for the debt of the M.A.H.D. Group, L.L.C., a limited liability company. We affirm.

I

[¶ 2] In June 1995, the M.A.H.D. Group was formed under N.D.C.C. ch. 10-32 to establish a restaurant in Bismarck named Ed Foo Yungs. The named owners of the M.A.H.D. Group were Tom Hutchens, Nancy Myers, Great Plains Marketing, Inc., and R.M.C., P.C. Pension Fund. Great Plains Marketing was owned by Lance and Lori Doerr and R.M.C., P.C. Pension Fund was an entity that invested Boyd Addy’s pension funds. Each of the named owners of the M.A.H.D. Group contributed $32,500 and owned 25% of the company. Although they were not all formally named in the M.A.H.D. Group organizational papers, the company informally consisted of four families: Guy and Nancy Myers, Boyd and Deb Addy, Tom and Kathy Hutchens, and Lance and Lori Doerr.

[¶ 3] Ed Foo Yungs opened in February 1996 and in a short time began experiencing financial difficulties. The minutes of a May 15, 1996 meeting for the M.A.H.D. Group state “[i]t was agreed that a $30,000.00 line of credit be set up at BNC National Bank.” According to Boyd Addy and Tom Hutchens, they personally signed for what they described as a $15,000 line of credit for Ed Foo Yungs in May 1996 and for another $15,000 line of credit in July 1996. Boyd Addy and Tom Hutchens testified they loaned the $30,000 to the M.A.H.D. Group and it was to repay BNC National Bank with proceeds from the business.

[¶ 4] In November 1996, Ed Foo Yungs was still experiencing financial difficulties. On November 7, 1996, Boyd Addy, Tom Hutchens, Lance and Lori Doerr, and Guy and Nancy Myers attended a company meeting at the Myers’ home. According to Nancy Myers, she was told Ed Foo Yungs needed another $15,000 line of credit, the money would be borrowed by the M.A.H.D. Group, and it would repay the loan. Her written notes of the meeting reflect an “agreement — line of credit 15,-000.” Typed minutes of that meeting state the business “needfed] $ for rent and to pay bills — $15,000.00 line of credit was agreed upon.” On November 8, 1996, Boyd Addy and Tom Hutchens personally signed for the $15,000 line of credit.

[¶ 5] Ed Foo Yungs continued to experience financial difficulties, and the minutes of a February 13, 1997 meeting state the owners decided to close the business on February 16, 1997. The minutes of a March 26, 1997 meeting state “[i]t was agreed that the $45,000.00 due BNC National would be assumed equally by the Addys, Myers and Hutchens, to be assumed by the 15th of April.” Boyd Addy testified Nancy Myers objected at that meeting to paying $15,000. Guy and Nancy Myers subsequently retained an attorney, who wrote a letter to Lori Doerr requesting the minutes of the March 26 meeting be revised to reflect the Myers had not agreed to assume any personal liability for the $15,000.

[¶ 6] Boyd Addy and Tom Hutchens sued Guy and Nancy Myers. The trial court granted summary judgment for Guy Myers, concluding he was not personally obligated for the $15,000 loan because he was not listed as a capital contributer, an owner, a manager, a governor, or an officer of the company. After a bench trial, the court decided Nancy Myers had not guaranteed repayment of the $15,000 loan because there was no written guaranty signed by her. The court decided the $15,000 loan signed for by Boyd Addy and Tom Hutchens in November 1996 was for the M.A.H.D. Group; however, the company’s articles of organization specifically stated its members were not liable for its debt, obligation, or liability and Nancy Myers did not intend to assume any personal liability for the $15,000 loan. The court refused to reinstate Guy Myers as a defendant because there was no showing he was a named owner of the M.A.H.D. Group, or had done anything to personally obligate himself to pay the $15,000 loan.

[¶ 7] Addy and Hutchens rely on the Articles of Organization and the Limited Liability Company Act for the authority of a majority of the owners to borrow money and incur liabilities. See N.D.C.C. §§ 10-32-23(7) and 10-32-42. However, when claiming Myers is responsible for the debt, the plaintiffs argue the “general rules of the L.L.C. were not followed. It was a loosely run company.” This case demonstrates the problems which arise when parties choose an artificial form of business organization but do not faithfully adhere to the statutory requirements of that form of organization and use its provisions only when it suits their purpose.

II

[¶ 8] Addy and Hutchens argue the trial court erred in dismissing their action on guaranty grounds. Under N.D.C.C. § 22-01-01, a guaranty is a promise to answer for the debt, default, or miscarriage of another person. Except when a guaranty is deemed an original obligation under N.D.C.C. § 22-01-05, a guaranty must be in writing and signed by the guarantor. N.D.C.C. § 22-01-04. To the extent there could be a guaranty under an argument that Nancy Myers guaranteed repayment of the loan by Addy and Hutchens to the M.A.H.D. Group, there is no written guaranty signed by her, and Addy and Hutch-ens have not argued for the application of the exceptions for an original obligation in N.D.C.C. § 22-01-04.

[¶ 9] Addy and Hutchens instead argue the $15,000 loan is not governed by guaranty law, because the M.A.H.D. Group had legal authority to conduct business and borrow money, and at the November 7, 1996 meeting, the company collectively agreed to the additional $15,000 loan and the Myers’ obligation to repay it. Addy and Hutchens argue the Myers are personally liable for repayment of the $15,000 loan.

[¶ 10] The M.A.H.D. Group was established as a limited liability company under N.D.C.C. ch. 10-82, which was enacted in 1993 N.D. Sess. Laws. ch. 92. A limited liability company combines the flow-through income tax advantages and capital structure of a partnership with the limited liability and governance structure of a corporation. See Hearing on S.B. 2222 Before Senate Judicial Committee, 53 rd N.D. Legis. Sess. (Jan 25, 1993) (prepared testimony of William L. Guy III and Jon Strinden). See generally Robert W. Wood, Limited Liability Companies, Formation, Operation, and Conversion, §§ 1.3, 1.10 (1993). Limited liability companies are taxed like partnerships, but are like corporations in that members have limited liability like corporate shareholders. See Hearing on S.B. 2222, supra (prepared testimony of William L. Guy III). See also Wood, Limited Liability Companies, at § 1.3. A limited liability company is a separate business entity and its owners or members are not exposed to personal liability for the entity’s debts unless there are personal guarantees. See Hearing on S.B. 2222, supra (prepared testimony of Jon Strinden). Owners or members of a limited liability company can participate in management of the company without becoming personally liable for the entity’s debt. Id.

[¶ 11] Although a majority of members and owners of the M.A.H.D. Group could take action on its behalf to render it liable for its debt, see N.D.C.C. § 10-32-42, there is a difference between the company itself being hable for its debt and individual owners of the company being personally liable for its debt. Under N.D.C.C. § 10-32-29 and the articles of organization of the M.A.H.D. Group, owners and members of the limited liability company generally are not, merely because of that status, personally liable for a judgment, decree or order of a court, or in any other manner for a debt, obligation or liability of the company. See Water, Waste & Land, Inc. v. Lanham, 955 P.2d 997, 1001-04 (Colo.1998) (holding owner of limited liability company may be personally liable to third party if owner acts as agent for company and fails to disclose existence and identity of principal).

[¶ 12] Moreover, the operating agreement for the M.A.H.D. Group provided a remedy for a member refusing to make additional capital contributions by permitting the member to refuse to contribute any or all of the member’s share of additional capital and incur a proportionate decrease in ownership in the company:

The owners may contribute in proportionate amounts any additional capital deemed necessary for the operation of the Company, provided, however, that in the event that any member deems it advisable to refuse or fails to contribute his share of any or all of the additional capital, then the other members or any one of them may contribute the additional capital not paid in by such refusing member and shall receive therefore an increase in the proportionate share of the ownership or interest in the entire company in direct proportion to the said additional capital contributed. Unless otherwise agreed, the right to make up additional capital contributions of a refusing member shall be available in the same order as the right to purchase in the case of withdrawal or death of a member, as set forth in Paragraphs XV and XVI.

[¶ 18] Here, to the extent the $15,000 loan in November 1996 could be viewed as a capital contribution by the members or owners of the M.A.H.D Group, the members or owners are limited by the remedy provided in the operating agreement. To the extent the additional $15,000 loan constituted debt for the company, the owners or members of the company are not, merely because of that status, personally liable for the company debt under N.D.C.C. § 10-32-29 and the company’s articles of organization.

[¶ 14] Addy and Hutchens nevertheless assert the members waived those personal liability provisions when Nancy Myers agreed to repay the loan. Addy and Hutchens argue the parties entered a separate oral contract for her to personally repay the $15,000 loan. Addy and Hutch-ens argue she is estopped from avoiding her obligation.

[¶ 15] The trial court found Nancy Myers did not intend or agree to assume any personal liability for the debt. According to Boyd Addy, Nancy Myers objected at the March 26, 1997 meeting to paying $15,000. According to Tom Hutch-ens, the final meetings of the company were a “little heated” and “voices were raised” during discussions about the company’s financial circumstances. The minutes of the March 26, 1997 meeting reflect “[i]t was agreed that the $45,000.00 due BNC would be assumed equally by the Addys, Myers and Hutchens.” The Myers subsequently retained an attorney, who wrote a letter to .Lori Doerr requesting the minutes of that meeting be revised to reflect they had not agreed to assume personal liability for the $15,000 loan. Although there is some evidence Nancy Myers believed she might be personally liable for one fourth of the $15,000 loan, her belief was apparently based on her erroneous assumption that owners were personally liable for the debt of a limited liability company. Nancy Myers’ mistaken belief does not constitute an agreement to be personally liable for any part of the $15,000 loan. On this record, we are not left with a definite and firm conviction the trial court made a mistake in finding Nancy Myers did not intend or agree to assume any personal liability for the loan. We therefore conclude the trial court’s finding is not clearly erroneous under N.D.R.Civ.P. 52(a).

Ill

[¶ 16] Addy and Hutchens argue the trial court erred in dismissing Guy Myers as a defendant because he was an active participant in the group. The trial court dismissed Guy Myers because Addy and Hutchens did not show he was a named owner of the M.A.H.D. Group or show he had done anything to personally obligate himself to pay the $15,000 loan. Although Guy Myers may have been an agent for a disclosed principal, Nancy Myers, he was not a named owner or manager of the M.A.H.D. Group and nothing in this record establishes, as an agent for his wife, he was personally liable to Addy and Hutchens for the $15,000 loan.

IV

[¶ 17] We affirm the judgment.

[¶ 18] CAROL RONNING KAPSNER, MARY MUEHLEN MARING, WILLIAM A. NEUMANN, JJ., concur.

[¶ 19] The Honorable GERALD G. GLASER, S.J., sitting in place of SANDSTROM, J., disqualified.

GLASER, Surrogate Judge,

Dissenting.

[¶ 20] I concur with most of what is said in the opinion. Nevertheless, analysis of the undisputed facts leads me to a different conclusion. There is no dispute that a line of credit was given to the plaintiffs Addy and Hutchens and not to the corporation. The Plaintiffs’ exhibit 7, which is the note they signed, demonstrates this. The corporation was never and is not now indebted to the bank for the funds discussed in the opinion. Addy and Hutchens were. They indebted themselves to the bank personally because the corporation could not at that time obtain a line of credit on its own, being a new business. Addy, Hutchens and separately the Doerrs made available to the business the funds to provide working capital with the hope that the business would later repay them out of hoped for profits. The business used the bank loans and made some payments toward interest but not on principal. There were no guarantees or contributions to capital from or to anyone at this point. The business did owe $15,000.00 each to Boyd, Hutchens and Doerrs.

[¶ 21] In due time, the business exhausted these cash infusions and at the much discussed meeting of 11-7-1996 the necessity of obtaining an additional $15,000.00 was again considered. The plaintiffs claim is that it was clearly understood by all parties that “the Myers” would obtain the needed $15,000.00 from the bank by signing a note to the bank for that amount which would then be made available to the business as the previous loans had been. Doing so would equalize each party’s exposure to indebtedness at $15,000.00 or one quarter each of the total indebtedness. There is evidence in the record the Myers explicitly agreed to this or at least didn’t object. The loan was made the next day but only Addy and Hutchens signed the note. Mrs. Myers was not present and there is no clear evidence why she was absent. None of the foregoing suggests the existence of a guarantee on the part of anyone.

[¶ 22] The trial court in its opinion did not find that Nancy Myers did not intend or agree to assume any personal liability for the loan. It stated:

The main issue in this ease is whether or not Nancy Myers guaranteed repayment on the $15,000.00 loan. (See plaintiffs Exhibit 7.)

[¶ 23] The trial Court stated that such a guarantee must be in writing and signed by the guarantor. It wasn’t, of course, because it didn’t exist. Later, in its opinion the trial court does state that:

Defendants Exhibit 4 also show quite plainly that Nancy Myers did not intend to assume any personal liability for the $15,000.00 loan at BNC Bank.

[¶ 24] The only reference to this subject in the minutes which were kept by Mrs. Myers (Exhibit 4) is:

Need for rent and to pay bills— $15,000.00 line of credit was agreed upon.

[¶25] This minute neither “clearly” exonerates or implicates Ms. Myers. If anything, it demonstrates the subject was discussed. Ms. Myers did later object to the assertion that she was responsible for that last loan but this did not occur until March 26,1997.

[¶ 26] I would remand to the trial court with directions to determine whether the plaintiffs have established by the greater weight of the evidence that Mrs. Myers did orally agree with the co-owners that she would be the principal obligor on the last loan obtained from the bank and, if so, was she agreeing to be responsible for one fourth of the entire debt (one fourth of $60,000.00) or for one fourth of the last loan ($3,750.00).

[¶ 27] The trial court declined to consider statements made by Mr. Myers as hearsay. From the nature of the questions, it appears the statements were offered to establish they were made. Their accuracy was not in issue. In any event, statements made by Mr. Myers, the agent and alter ego of Mrs. Myers, are admissible against her.

[¶ 28] Gerald G. Glaser, Surrogate Judge