text:
    2006 ND 185
    Abraham A. UNGAR, Plaintiff and Appellant v. NORTH DAKOTA STATE UNIVERSITY, Defendant and Appellee.
    No. 20050340.
    Supreme Court of North Dakota.
    Aug. 24, 2006.
    Rehearing Denied Oct. 17, 2006.

      John J. Gosbee, Gosbee Law Office, Mandan, N.D., for plaintiff and appellant.
    Tag C. Anderson, Assistant Attorney General, Office of Attorney General, Bismarck, N.D., for defendant and appellee.
   CROTHERS, Justice.

[¶ 1] Abraham A. Ungar appeals from a summary judgment dismissing his claims against North Dakota State University (“NDSU”). We affirm, concluding the district court did not err in applying the doctrines of res judicata and collateral es-toppel, and the court properly concluded Ungar failed to give timely notice under N.D.C.C. § 32-12.2-04 and failed to exhaust his remedies, we affirm.

I

[¶ 2] Ungar is a tenured professor at NDSU. Ungar’s present action against NDSU stems from a letter of reprimand that was issued to him on October 10, 2001, by the Dean of the College of Science and Mathematics and the Chair of the Department of Mathematics. The letter of reprimand addressed two performance issues, specifically that Ungar had improperly administered student evaluations and had inappropriately intimidated and harassed a junior colleague, Tuval Foguel. The letter of reprimand referred to a message written in Hebrew on the top of a document sent by Ungar to Foguel. The message also contained the Hebrew word “warning” written in red ink. Ungar does not dispute he sent the document to Fogu-el with a message written at the top; however, Ungar denied writing the word “warning.” The letter of reprimand was amended on November 28, 2001, to include additional details regarding Ungar’s failure to properly conduct student evaluations.

[¶ 3] Ungar appealed the letter of reprimand to NDSU’s Standing Committee on Faculty Rights (“Committee”), an internal appeals body. After an evidentiary hearing, the Committee found by clear and convincing evidence there was a pattern of intimidation and harassment by Ungar, a full professor, against Foguel, a non-tenured, tenure-track faculty member. The Committee also found Ungar had improperly conducted student evaluations.

[¶ 4] In addition to the internal university appeal, in November 2001, Ungar sued Foguel for tortious interference with contract, alleging Foguel wrongfully caused NDSU to breach Ungar’s contract when Foguel denied writing the word “warning” on the document. Ungar claimed damages for loss of salary increases, harm to his reputation, emotional distress, and costs associated with defending against the disciplinary action. The Attorney General’s office, in conjunction with the Risk Management Division of the Office of Management and Budget (“OMB”), defended Fo-guel, arguing that under N.D.C.C. ch. 32-12.2, an action against a state employee for alleged wrongful action taken within the scope of employment is not authorized and the action must be brought against the State.

[¶ 5] On September 4, 2002, Ungar submitted a notice of claim to OMB under N.D.C.C. § 32-12.2-04(1) alleging violations of his contractual and constitutional rights and seeking damages. OMB denied Ungar’s notice of claim as untimely. In September 2003, the district court dismissed Ungar’s action against Foguel for lack of subject-matter jurisdiction because Ungar had not filed a timely notice of claim with OMB as required by N.D.C.C. § 32-12.2-04. In dismissing, the court found it was “undisputed that both [Ungar and Foguel] were employed by [NDSU] at the time of the occurrence of these matters.” The court also found “that the incident or incidence complained of by [Un-gar] occurred during and in the course of [their employment].” The court concluded that “as a result [Foguel] is a state employee under N.D.C.C. § 32-12.2-04(1)” and that Ungar failed to comply with that statute’s notice requirements. Ungar did not appeal that decision.

[¶ 6] In October 2004, Ungar commenced the present action against NDSU, asserting breach of contract, retaliation, and fraud. After receiving Ungar’s discovery requests, NDSU moved to stay discovery and for dismissal under N.D.R.Civ.P. 12 and 56, arguing Ungar’s action was barred by res judicata and collateral estoppel, and to the extent the complaint could be construed as raising claims against NDSU arising after the prior action was dismissed, those claims were barred by Ungar’s failure to exhaust administrative remedies and timely file a notice of claim.

[¶ 7] The district court granted NDSU’s motion for summary judgment. The court concluded Ungar’s notice of claim filed in September 2002 with OMB was more than 180 days after the discovery of the injury and was properly denied by OMB as untimely. The court held it lacked subject-matter jurisdiction over Un-gar’s claims, other than his breach of contract claims, because he failed to give timely notice to OMB and had not exhausted his remedies through the administrative process at NDSU. The court further held Ungar’s breach of contract claim was barred by the doctrines of res judicata and collateral estoppel. The court concluded that these claims were barred by the unap-pealed judgment dismissing Ungar’s prior action against Foguel. The court reasoned that NDSU was in privity with Foguel, and therefore, Ungar’s present claim is barred by res judicata and collateral estop-pel because Ungar’s claims in the present action stemmed from the conduct of NDSU and Foguel, which was adjudicated in Ungar’s action against Foguel.

II

[¶ 8] Whether a district court properly granted summary judgment is a question of law, which we review de novo on the entire record. Peterson v. North Dakota Univ. Sys., 2004 ND 82, ¶ 6, 678 N.W.2d 163.

[S]ummary judgment ... is a procedural device under N.D.R.Civ.P. 56 for prompt and expeditious disposition of a controversy without a trial if either party is entitled to judgment as a matter of law, and if no dispute exists as to either the material facts or the inferences to be drawn from undisputed facts, or if resolving disputed facts would not alter the result. On appeal, we review the evidence in the light most favorable to the party opposing the motion, and we give that party the benefit of all favorable inferences which reasonably can be drawn from the evidence. The party moving for summary judgment bears the burden of establishing there is no genuine issue of material fact and that, under applicable principles of substantive law, [the movant] is entitled to judgment as a matter of law.

Id. (quoting Green v. Mid Dakota Clinic, 2004 ND 12, ¶ 5, 673 N.W.2d 257 (citations omitted)).

Ill

[¶ 9] Ungar argues his action against Foguel does not preclude this action against NDSU and he has the right to appeal NDSU’s discipline once he exhausted his internal remedies at NDSU. NDSU argues the district court properly held Un-gar’s claims are barred by res judicata and collateral estoppel.

[¶ 10] The doctrines of res judi-cata and collateral estoppel bar courts from relitigating claims and issues in order to promote the finality of judgments, which increases certainty, avoids multiple litigation, wasteful delay and expense, and ultimately conserves judicial resources. Simpson v. Chicago Pneumatic Tool Co., 2005 ND 55, ¶ 8, 693 N.W.2d 612; Riemers v. Peters-Riemers, 2004 ND 153, ¶ 9, 684 N.W.2d 619. The applicability of res judi-cata or collateral estoppel is a question of law, fully reviewable on appeal. See Hofsommer v. Hofsommer Excavating, Inc., 488 N.W.2d 380, 383 (N.D.1992).

[¶ 11] “Although collateral es-toppel is a branch of the broader law of res judicata, the doctrines are not the same.” Id. Res judicata, or claim preclusion, prevents relitigation of claims that were raised, or could have been raised, in prior actions between the same parties or their privies. Id. Thus, res judicata means a valid, existing final judgment from a court of competent jurisdiction is conclusive with regard to claims raised, or those that could have been raised and determined, as to their parties and their privies in all other actions. Peacock v. Sundre Twp., 372 N.W.2d 877, 878 (N.D.1985). Res judicata applies even if subsequent claims are based upon a different legal theory. See Littlefield v. Union State Bank, 500 N.W.2d 881, 884 (N.D.1993). Collateral estoppel, or issue preclusion, forecloses re-litigation of issues of either fact or law in a second action based on a different claim, which were necessarily litigated, or by logical and necessary implication must have been litigated, and decided in the prior action. Hofsommer, 488 N.W.2d at 383. For purposes of both res judicata and collateral estoppel, only parties or their privies are bound by an earlier judgment. Id. at 384.

[¶ 12] This Court has adopted an “expanded” version of privity for res judicata and collateral estoppel. Simpson, 2005 ND 55, ¶ 10, 693 N.W.2d 612. “[Pjrivity exists if a person is so identified in interest with another that he represents the same legal right.” Hofsommer, 488 N.W.2d at 384 (internal quotation omitted). In Hofsommer, at 384 (quoting Stetson v. Investors Oil, Inc., 176 N.W.2d 643, 651 (N.D.1970)), we said:

“The strict rule that a judgment is operative, under the doctrine of res judicata, only in regard to parties and privies, is sometimes expanded to include as parties, or privies, a person who is not technically a party to a judgment, or in privity with him, but who is, nevertheless, connected with it by his interest in the prior litigation and by his right to participate therein, at least where such right is actively exercised by prosecution of the action, employment of counsel, control of the defense, filing of an answer, payment of expenses or costs of the action, the taking of an appeal, or the doing of such other acts as are generally done by parties.”

“Fundamental fairness underlies any determination of privity.” Hofsommer, at 384. A judgment on the merits exonerating a party from liability precludes a subsequent action against a party whose liability, if any, is derivative of or secondary to the exonerated party. Medearis v. Miller, 306 N.W.2d 200, 203 (N.D.1981).

[¶ 13] Ungar argues the district court erred by dismissing his action against NDSU based on res judicata. He claims that once he exhausted his administrative remedies with his internal appeal to the Committee, he was entitled to appeal his disciplinary action to the district court.

[¶ 14] However, the timing of Ungar’s prior action with respect to the letters of reprimand and the initial complaint against Foguel, in addition to the ultimate Committee hearing and decision, is crucial. The initial letter of reprimand signed by the Chairman of the Department of Mathematics and the Dean of the College of Science and Mathematics was issued on October 10, 2001. This letter of reprimand was amended on November 28, 2001, to include additional details about Ungar’s failure to follow proper procedures for student evaluations. On November 29, 2001, Ungar commenced his action against Fo-guel “in his personal capacity.” Ungar’s prior complaint indicates he attached a copy of the initial letter of reprimand to that complaint. Ungar also specifically alleged in his complaint against Foguel, “Because the Letter was not based on justifiable cause, its issuance was a breach of Ungar’s contract with NDSU.... Although the Letter alludes to another alleged deficiency in Ungar’s work, namely the handling of student evaluations ... the Letter would not have been issued but for Foguel’s instigation.”

[¶ 15] In April 2002, while his action against Foguel was pending in the district court, the Committee held a hearing on Ungar’s claims. On May 10, 2002, the Committee denied Ungar’s claims. On June 20, 2002, the letter of reprimand was amended a second time to include further facts supporting the original reasons for discipline, mainly, the failure to conduct appropriate student evaluations and inappropriate harassment of a non-tenured faculty member. Ungar challenged the Committee’s decision in a July 1, 2002, letter to NDSU President Joseph Chapman, who took no apparent action on the Committee’s decision. Ungar provided a notice of claim to OMB in a letter dated September 4, 2002. On September 10, 2002, OMB denied Ungar’s claim regarding the letters of reprimand, concluding his claim was untimely. Finally, Ungar’s action against Foguel was dismissed on September 3, 2003, almost a year after Ungar’s notice to OMB.

[¶ 16] Although Ungar attempts to characterize his present action, in part, as an “appeal” of the Committee’s decision based solely on the relief he has requested, his present action is not an appeal. See Rudnick v. City of Jamestown, 463 N.W.2d 632, 636 (N.D.1990) (a district court does not have appellate jurisdiction unless authorized by statute). Cf. Peterson, 2004 ND 82, ¶ 12, 678 N.W.2d 163 (terminated tenured faculty member must bring separate action in district court because no statute or rule provided an appeal to the district court); Schauer v. Jamestown College, 323 N.W.2d 114, 115-16 (N.D.1982) (nonrenewed private college professor’s employment was contractual and nonstatutory in nature). Ungar’s complaint against NDSU asserts claims based on breach of contract, in addition to a tort claims for retaliation and fraud. These claims and requested relief could have been raised in his prior action, which was ultimately determined to be against NDSU and dismissed more than a year after the Committee’s final decision. Un-gar did not appeal the dismissal of his prior action.

[¶ 17] Ungar nevertheless claims the prior lawsuit is not preclusive of his present action because the prior action asserted Foguel’s conduct was outside of the scope of his employment. Ungar’s argument improperly attempts to collaterally attack the unappealed judgment in the pri- or action. NDSU’s actions relating to the letters of reprimand occurred while Un-gar’s action against Foguel was pending. The prior action included allegations that Foguel had caused NDSU to breach its employment contract with Ungar. The district court in the present action found, “The State, on behalf of NDSU, represented Foguel in the prior action due to his employment as a professor.... The incidents Ungar claims in the instant action stem from the conduct of NDSU and Fo-guel which were adjudicated in the Foguel action.”

[¶ 18] NDSU not only participated in the prior litigation by defending its faculty member, but also maintained that the action was actually against the State, not one of its employees. Although Ungar now argues the district court in the prior action improperly found NDSU and Foguel to be in privity, Ungar is collaterally estopped from attacking the prior unappealed decision.

[¶ 19] The defendant junior faculty member in the prior action and the defendant NDSU in present action had the same interests, such that NDSU represents the same legal right in this ease. We agree with NDSU’s assertion that substantially all of Ungar’s claims could have been brought in his prior action. For these reasons, we hold the district court did not err in applying the doctrines of res judicata and collateral estoppel to bar Un-gar’s claims in this action.

TV

[¶ 20] The district court also held it did not have subject-matter jurisdiction over Ungar’s tort claims based upon Ungar’s failure to give timely notice to OMB and failure to exhaust his remedies. While conceding his notice of claim to OMB was untimely for some of his claims, Ungar now argues his notice of claim was timely for other tort claims, which he should be permitted to pursue.

[¶ 21] Ungar essentially asserts that there is a “continuing series of torts” which occurred within the 180-day period before his September 2002 notice of claim to OMB and which occurred after his notice to OMB. Ungar also argues, somewhat contradictorily, that he should be “allowed to pursue his claim for discrete events” occurring within 180 days before his notice of claim and after his notice.

[¶ 22] Section 32-12.2-04(1), N.D.C.C., requires a claim against a state employee to be presented to OMB within 180 days after the injury is discovered and provides in part:

A person bringing a claim against the state or a state employee for an injury shall present to the director of the office of management and budget within one hundred eighty days after the alleged injury is discovered or reasonably should have been discovered a written notice stating the time, place, and circumstances of the injury, the names of any state employees known to be involved, and the amount of compensation or other relief demanded.

For the district court to have subject-matter jurisdiction over his claims, Ungar must comply with both the N.D.C.C. § 32-12.2-04 notice of claim requirements and the requirement that he exhaust his administrative remedies. See Cooke v. University of North Dakota, 1999 ND 238, ¶¶ 9-11, 603 N.W.2d 504 (holding N.D.C.C. § 32-12.2-04(1) notice of claim requirement and exhaustion of remedies requirement are consistent and a party must comply with both); Dimond v. State ex rel. State Bd. of Higher Educ., 1999 ND 228, ¶¶ 24-26, 603 N.W.2d 66 (barring tort claim for failure to comply with N.D.C.C. § 32-12.2-04); see also Thompson v. Peterson, 546 N.W.2d 856, 863 (N.D.1996) (exhaustion of remedies requirement also applied to constitutional claims). The director of OMB denied Ungar’s claims on September 10, 2002, stating:

Mr. Ungar’s Notice states that the basis of his claim is three letters, the first of which is dated October 10, 2001. Accordingly, the time period in which the statute requires a claim to have been filed would have ended, at the latest, in April 10, 2002. The mere fact that the letter was subsequently modified after Mr. Ungar exercised his internal grievance rights does not extend the time period in which a notice of claim must be submitted.

In disposing of Ungar’s retaliation claims, the district court relied on Ungar’s failure to provide timely notice to OMB and failure to exhaust his remedies. To the extent Ungar implies on appeal, and argued to the district court, that his notice of claim was timely because his injury did not occur until the Committee rendered its decision in May 2002, this Court rejected a similar argument in Cooke, 1999 ND 238, ¶¶ 13-14, 603 N.W.2d 504. Cooke had failed to satisfy the notice of claim requirement because her injury, and allegedly discriminatory appointment, was discovered more than 180 days before she presented notice to OMB. Id. at ¶ 13. Cooke unsuccessfully argued her injury did not “crystallize” until after the administrative process rejected her claim. Id. We held the outcome of the administrative process could not be the cause of Cooke’s alleged injury. Id.

[¶23] Relying on Cooke, the district court here found, “Similarly, the alleged injury to Ungar was discovered when Un-gar received his letter of reprimand, dated October 10, 2001. Therefore, Ungar’s notice was more than 180 days after discovery of the injury and properly rejected by OMB as untimely.” The district court concluded:

Ungar’s notice to OMB states that the claim against NDSU and State is based on the evidence provided in the notice, but specifically asserts seven alleged violations of his contractual and constitutional rights, none of which delineate an act of retaliation. To date, Ungar has not filed notice with OMB in regard to the retaliation claim; therefore, the Court lacks jurisdiction over the retaliation claim due to Ungar’s failure to comply with notice requirements and the Court must dismiss the retaliation claim.

Addressing the issue of exhaustion of remedies, the district court also concluded “Ungar’s retaliation tort claim is not properly before [the district court] because he has not exhausted his remedies through the administrative process, nor has he filed proper notice with OMB.”

[¶ 24] On appeal, Ungar concedes his notice of claim to OMB was untimely with regard to some of his claims. Ungar argues there is “a continuing series of torts” which occurred in the 180-day period before his September 2002 notice and even after his notice. Ungar refers this Court to his amended complaint in this action, specifically paragraphs 11 and 14 relating to the April 2002 Committee hearing and alleged retaliation occurring after the Committee’s process. These claims were not part of the internal appeals process which occurred here; thus, the district court was correct in concluding Ungar had not exhausted his remedies with regard to such claims. Additionally, to the extent that Ungar asserts his September 2002 notice of claim should also apply to “discrete” claims occurring after his notice, this issue does not appear to have been raised to the district court below. Nonetheless, we reject Ungar’s attempts to simultaneously characterize his various claims as both “discrete,” to avoid the notice of claim requirement, and a “continuing series of torts” to avoid the exhaustion of remedies requirement.

[¶ 25] We conclude the district court properly found that Ungar’s notice of claim was untimely and that he failed to exhaust his remedies regarding his retaliation claims, which allegedly occurred in response to Ungar’s exercise of his faculty rights. To the extent Ungar’s claims were not already barred by res judicata and collateral estoppel, we hold the district court properly dismissed Ungar’s remaining claims against NDSU based upon his failure to exhaust his internal administrative remedies and failure to file timely notice with OMB.

V

[¶26] The district court judgment is affirmed.

[¶ 27] GERALD W. VANDE WALLE, C.J., MARY MUEHLEN MARING, CAROL RONNING KAPSNER, and DALE V. SANDSTROM, JJ., concur.


source: Caselaw Access Project

author: MARING, Justice.

license: Public Domain

text:
    2006 ND 186
    Florian JOCHIM, Personal Representative of the Estate of Greg A. Jochim, deceased, Plaintiff and Appellant v. Denise M. JOCHIM, Defendant and Appellee.
    No. 20060038.
    Supreme Court of North Dakota.
    Aug. 24, 2006.

      Donavin L. Grenz, Linton, N.D., for plaintiff and appellant.
    Gerald A. Kuhn, Law Office of Gerald A. Kuhn, PC, Napoleon, N.D., for defendant and appellee.
   MARING, Justice.

[¶ 1] The estate of Greg Jochim appeals from an order vacating judgment and dismissing Greg Jochim’s action for divorce. We conclude an action for divorce abates upon the death of a party, and we affirm.

[¶ 2] On February 11, 2005, Greg Jo-chim filed for divorce from Denise Jochim. The parties stipulated to all the issues except the amount of child support to be awarded, whether spousal support should be awarded, and whether either party should be awarded attorney’s fees. A trial was held on October 6, 2005, to resolve the remaining issues. On October 24, 2005, the district court entered an order for judgment. On November 1, 2005, Greg Jochim was killed in a traffic accident. On November 8, 2005, a judgment and decree of divorce was entered.

[¶ 3] Denise Jochim moved to' vacate the judgment and decree. She argued the marriage terminated upon Greg Jochim’s death and asked the court to vacate the judgment to alleviate any confusion about who are the heirs of Greg Jochim’s estate, who are the beneficiaries of his life insurance policies, and who is entitled to bring a wrongful death action. On January 23, 2006, the district court entered an order vacating the judgment and dismissing the divorce action, after finding the Jochims’ divorce was not final at the time of Greg Jochim’s death and his death abated the divorce action.

[¶ 4] Notice of appeal was filed on behalf of Greg Jochim. Florian Jochim, a personal representative of Greg Jochim’s estate, moved to be substituted as party plaintiff. This Court granted the estate’s motion for substitution.

I

[¶ 5] Greg Jochim’s estate claims the district court abused its discretion in vacating the judgment and dismissing the action because the divorce action did not abate upon Greg Jochim’s death. In support of its claim, the estate cites N.D.R.Civ.P. 25(a)(3), which states an action does not abate upon a party’s death when a verdict has been reached or an order for judgment has been issued. The estate claims- the divorce was effectively granted because a trial was held, the parties stipulated to most of the issues, and the district court issued an order for judgment. The estate also claims there was arguably a contract between the parties for a divorce, citing N.D.C.C. § 30.1-10-02(2), a section of the probate code, and In re Estate of McNamara, 402 N.W.2d 893 (N.D.1987), in support of its claim.

[¶ 6] The decision to vacate a judgment is within the court’s discretion, and its decision will not be disturbed on appeal unless the court has abused its discretion. Gepner v. Fujicolor Processing, Inc., 2001 ND 207, ¶ 13, 637 N.W.2d 681. The court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner. Id.

[¶ 7] A marriage is dissolved only “(1) [b]y the death of one of the parties; or (2)[b]y a judgment of a court of competent jurisdiction decreeing a divorce of the parties.” N.D.C.C. § 14-05-01. The ultimate issue in this case is whether Greg Jochim’s death abated the divorce action.

[¶ 8] In Thorson v. Thorson, 541 N.W.2d 692, 696 (N.D.1996), this Court held a divorce action abates upon a party’s death. Doris Thorson filed for divorce from Allen Thorson, but she died before a trial was held. Id. at 693-94. The district court dismissed the action at Allen Thor-son’s request, finding the divorce action abated upon Doris Thorson’s death. Id. at 694. We affirmed the district court’s decision, and said:

[I]n North Dakota, marriage is a relationship personal to the parties of the marriage. Under section 14-05-01, NDCC, Doris’s and Allen’s marriage was dissolved by Doris’s death. Upon the death, there was no longer a marriage for the trial court to dissolve with a judgment decreeing a divorce.

Id. at 696 (citations omitted). Death destroys the subject matter that forms the basis for a divorce action, terminating the district court’s jurisdiction, and therefore a divorce action abates upon a party’s death. Id.

[¶ 9] Greg Jochim’s estate argues N.D.R.Civ.P. 25(a)(3) supports its claim that the divorce action did not abate on Greg Jochim’s death because, unlike Thor-son, there was an order for judgment in this case. Rule 25(a)(3), N.D.R.Civ.P., states:

After a verdict is rendered or an order for judgment is made in any action, such action shall not abate by the death of any party, but the case shall proceed thereafter in the same manner as in cases where the cause of action survives by law, and substitution of parties shall be allowed as in other cases.

The estate argues divorce actions are not listed as an exception to this rule, and therefore the district court abused its discretion in failing to apply the rule and granting the motion to vacate the judgment. But as we said in Thorson, the death of one of the parties destroys the court’s jurisdiction because there is no marriage upon which the decree can work. Thorson, 541 N.W.2d at 696. “Upon the death, there was no longer a marriage for the [district] court to dissolve with a judgment decreeing a divorce,” the subject matter forming the basis of the action was destroyed and the court’s jurisdiction was terminated. Id. The dissolution of the marital relationship is the object sought to be accomplished by the final decree, and in cases where one party dies before a judgment is entered that object has already been accomplished by the death. Unlike other actions where an injury has already occurred and damages have been incurred, death of a party to a divorce effectively renders a subsequent divorce judgment meaningless because there is no marriage left to dissolve. We conclude N.D.R.Civ.P. 25(a)(3) does not create an exception to the general rule that the death of a party to a divorce action, prior to entry of the final decree of divorce, abates the action and leaves nothing for the district court to decide.

[¶ 10] The estate claims the divorce was already granted when Greg Jo-chim died, because an order for judgment was issued and when combined with the parties’ stipulation constituted a granting of divorce. Although an order for judgment is required before a valid judgment can be entered, alone it is not sufficient to make a divorce final and does not conclude the proceedings. N.D.R.Civ.P. 58 (order for judgment required before judgment entered). A judgment includes any order from which an appeal lies. N.D.R.Civ.P. 54(a). An order for judgment is not ap-pealable. See N.D.C.C. § 28-27-02 (what orders are appealable); Koehler v. County of Grand Forks, 2003 ND 44, ¶ 6 n. 1, 658 N.W.2d 741 (order for judgment not ap-pealable unless there is a subsequently entered consistent judgment). An action is not complete, and is still pending, until a judgment is entered. N.D.R.Civ.P. 58(a) (judgment not effective or final until entered). The Jochims’ marriage was not dissolved at the time of Greg Jochim’s death because a judgment had not been entered, and therefore his death terminated the marriage abating the divorce action.

[¶ 11] The estate also urges us to consider McNamara and N.D.C.C. § 30.1 — 10— 02(2), which is a section of the probate code defining who is not a surviving spouse. But the estate’s reliance on these are misplaced because the case and statute concern probate matters. The issue before us in McNamara was not whether one party’s death dissolved the marriage abating the divorce action, but whether John McNamara, as a surviving spouse, could inherit property owned by Dorothy McNamara after she died before the parties’ divorce was final. McNamara, at 895. At the time of Dorothy McNamara’s death, an interlocutory divorce judgment had been entered and the parties were awaiting the end of a one-year waiting period before their divorce could become final. Id. at 894. This Court said:

The earlier cited California law establishes that the couple’s marital status was not terminated by the interlocutory divorce judgment, and, at the time of Dorothy’s death, John was her spouse under that law. However, because the interlocutory divorce judgment dealt with the couple’s property, it was contractual in nature and became a conclusive adjudication of the couple’s property rights. The dispositive issue is not John’s status as Dorothy’s spouse, but his right to Dorothy’s property which was determined by the interlocutory divorce judgment and was conclusive and res judicata with respect to that issue.

Id. at 896-97. Here, the only issue before us is whether the district court erred in vacating the judgment and dismissing the divorce action. The authorities Greg Jo-chim’s estate cites in support of its argument do not address the issue in this case, but instead concern whether a spouse is entitled to inherit property. Whether Denise Jochim is entitled to a share of Greg Jochim’s estate as a surviving spouse or whether she is entitled to collect any life insurance proceeds or bring a wrongful death action are not issues before us in this case, and we will not decide those issues.

[¶ 12] The sole issue before us is whether the district court abused its discretion in vacating the judgment and dismissing the Jochims’ divorce action. The Jochims’ divorce action was still pending at the time of Greg Jochim’s death, and therefore his death terminated the marriage and abated the divorce action. We conclude the district court’s decision to vacate the judgment and dismiss the action was not arbitrary, unreasonable, or unconscionable, and therefore we affirm.

II

[¶ 13] We conclude the district court did not abuse its discretion in vacating the judgment and dismissing the Jochims’ divorce action, and we therefore affirm.

[¶ 14] GERALD W. VANDE WALLE, C.J., DANIEL J. CROTHERS, DALE V. SANDSTROM, and CAROL RONNING KAPSNER, JJ., concur.


author: CROTHERS, Justice.

text:
    2006 ND 184
    STATE of North Dakota, Plaintiff and Appellee v. Todd Alan DAILEY, Defendant and Appellant.
    No. 20060030.
    Supreme Court of North Dakota.
    Aug. 24, 2006.

      Jerod Elton Tufte, State’s Attorney, Steele, N.D., for plaintiff and appellee; submitted on brief.
    David Neil Ogren, Wishek, N.D., for defendant and appellant; submitted on brief.
   CROTHERS, Justice.

[¶ 1] Todd Dailey appeals from a criminal judgment entered after a jury found him guilty of driving under the influence and manslaughter. We conclude the district court’s statements after the jury returned its verdict do not indicate the court was biased or prejudiced against Dailey and the district court did not abuse its discretion in sentencing Dailey. We affirm.

I

[¶ 2] Dailey was charged with driving while under the influence of intoxicating liquor, a fifth offense in seven years, in violation of N.D.C.C. § 39-08-01, a class C felony; and manslaughter, in violation of N.D.C.C. § 12.1-16-02, a class B felony. After a jury trial on November 15 and 16, 2005, the jury found Dailey guilty of both charges.

[¶3] After the jury verdict was announced, the district court judge told the jury:

THE COURT: Members of the jury, thank you very much. We can’t do this without you. There’s a couple of things I’m going to take care of right now before you take off. The thanks of the Court. I really appreciate you doing this. This is a Kidder County case and the sentencing is going to be in Kidder County. But you should know the Count I, the Driving Under The Influence, this is a fifth offense for Mr. Dai-ley. This is a felony. And Mr. Dailey had written a letter to the Court asking that two of the Judges, Judge Hagerty and Judge Haskell, not be involved because Mr. Dailey thought they knew too much about him because he had been in drug court. Mr. Dailey, you finished drug court in December, 2004, did you not?
MR. DAILEY: August.
THE COURT: August of 2004. And I think when you finished drug court, you went in there for a fifth offense DUI, did you not?
MR. DAILEY: Fourth.
THE COURT: Fourth. All right. Well, in any case, Mr. Dailey is a graduate of drug court, and unfortunately, he’s not a success, one of the people who has not been able to succeed in drug court, and he had that opportunity. So, we are going to have a sentencing up in Kidder County, and that will be after a pre-sentence investigation is ordered. Mr. Dailey, your bond is now going to be revoked. The bail will be retained until we decide what to do with it. The deputy will take you into custody and the sentencing will be held after a pre-sen-tence investigation is taken. So, if you will do that, I will appreciate that.
All right, members of the jury, that completes this matter. Thank you very much for your attention and thank you very much for your service. I really appreciate you taking care of this for us down here in Emmons County. Ok? Thank you.

[¶ 4] Two months later the district court sentenced Dailey to ten years in prison and ordered him to pay a fine of $10,000 on the manslaughter count. The court also sentenced Dailey to five years, with eighteen months in prison and forty-two months suspended for five years, and ordered him to pay a fine of $1,000 on the count of driving under the influence, with both sentences to run concurrently.

II

[¶ 5] Dailey argues the district court judge’s statements to the jury, made after the verdict was announced, indicates the judge was biased or prejudiced against him and the judge should have been disqualified from imposing the sentence. He claims it was unnecessary for the judge to tell the jury about his previous convictions and upcoming sentencing, and the only effect was to raise a question about the judge’s bias or prejudice. He admits the judge could have made the same comments at sentencing, but argues it is not appropriate for a judge to publicly comment on a defendant’s background and other sentencing issues before sentencing. Dailey requests his sentence be vacated and the case remanded for re-sentencing by a different judge.

[¶ 6] “[T]he failure to raise the question of judicial bias in the [district] court ordinarily precludes our review of that question on appeal.” Delzer v. United Bank, 484 N.W.2d 502, 509 (N.D.1992). Dailey did not object to the judge’s comments, raise the issue of judicial bias in the district court, or move for a new trial. Our review is therefore limited to whether the claimed error is obvious error under N.D.R.Crim.P. 52(b). See State v. Bertram, 2006 ND 10, ¶ 17, 708 N.W.2d 913. Error is not obvious unless there is a clear deviation from an applicable legal rule under current law, which affects substantial rights, and requires Dailey to show the error was prejudicial, or affected the outcome of the proceedings. Id. Dailey has the burden of establishing obvious error by showing error that is plain and affects his substantial rights. Id.

[¶ 7] Disqualification decisions are governed by the North Dakota Code of Judicial Conduct. Farm Credit Bank v. Brakke, 512 N.W.2d 718, 720 (N.D.1994). Cannon 3(A)(5), N.D.Code Jud. Conduct, states, “[a] judge shall perform judicial duties without bias or prejudice. A judge shall not, in the performance of judicial duties, by words or conduct manifest bias or prejudice.... ” Cannon 3(E)(1), N-D.Code Jud. Conduct, states, “[a] judge shall disqualify himself or herself in a proceeding in which the judge’s impartiality might reasonably be questioned,....” The “ ‘primary concern is the preservation of public respect and confidence in the integrity of the judicial system,’ ” and even without intentional bias, disqualification may be necessary to satisfy the appearance of justice. Brakke, at 720 (quoting Sargent County Bank v. Wentworth, 500 N.W.2d 862, 877-78 (N.D.1993)). In Brakke, at 720 (quoting Terry v. State, 602 N.E.2d 535, 540 (Ind.Ct.App.1992)), this Court said, “ ‘[t]he law presumes a judge is unbiased and not prejudiced.’ ”

[¶ 8] In this case, the statements the district court judge made were facts the judge learned while presiding over the case. Dailey had four prior DUI convictions, he requested specific judges not preside over the case because of his past relationship with the judges, and he had failed drug court. It is in the nature of the judicial process for a judge to assess the defendant’s conduct and form an opinion on the merits of the case. See State v. Crescenzo, 114 R.I. 242, 332 A.2d 421, 432 (1975). Dailey does not allege any misconduct occurred during the trial. The jury had already reached a verdict and the judge’s statements did not affect the outcome of the trial.

[¶ 9] We cannot say that the district court judge’s comments are any indication of bias or prejudice against Dailey. Rather than being critical, we appreciate that courts explain after the verdict has been reached, what will occur after the jury’s role ends. Jurors may become confused about how they fit into the judicial process and they may feel like their role was not important. See Bethany K. Dumas, Symposium: Communicating with Juries: Jury Trials: Lay Jurors, Pattern Jury Instructions, and Comprehension Issues, 67 Tenn. L.Rev. 701, 705-06 (2000) (many see jury duty as pointless, thankless, and oppressive). Public trust and confidence in the judiciary is promoted when jurors and the public understand why juries are important to the judicial system. Giving the jury information about a defendant and what occurs after the trial has ended will help to clarify the process for jurors and allow them to understand how their role fits into the overall criminal case.

[¶ 10] Dailey admits the district court judge could consider his background and make the same comments during sentencing. These are facts the judge could consider during sentencing, and Dailey could have been sentenced immediately. See State v. Murchison, 2004 ND 193, ¶ 16, 687 N.W.2d 725 (pre-sentence investigation not required). During sentencing, a judge may express his appraisal of the defendant’s conduct and may do so in such a manner that will impress upon the defendant the error of his ways. Simmons v. United States, 302 F.2d 71, 77 (3rd Cir.1962). The judge’s effort to help the defendant understand the wrongful nature of his conduct does not indicate bias or prejudice. Id. We reject Dailey’s claim that the judge erred in making the statements to the jury after the verdict was announced, particularly when the judge could have sentenced Dailey immediately and made the same statements during sentencing.

III

[¶ 11] “Our review of the sentence is generally confined to whether the court acted within the statutory sentencing limits.” Murchison, 2004 ND 193, ¶ 15, 687 N.W.2d 725. A district court judge is allowed the widest range of discretion in sentencing. Id.

[¶ 12] Dailey was sentenced to ten years in prison and ordered to pay a fine of $10,000 on the manslaughter count. Under N.D.C.C. § 12.1-32-01, the maximum penalty for a class B felony is ten years imprisonment, a fine of ten thousand dollars, or both. On the count of driving under the influence, Dailey was sentenced to five years, with eighteen months in prison and forty-two months suspended for five years starting after the ten year incarceration for manslaughter, and ordered to pay a fine of $1,000. Under N.D.C.C. § 12.1-32-01, the maximum penalty for a class C felony is five years imprisonment, a fine of five thousand dollars, or both. Dailey was sentenced within the statutory sentencing limits, and we conclude the court did not abuse its discretion in sentencing him.

IV

[¶ 13] We conclude Dailey failed to show the district court judge’s statements constituted obvious error affecting his substantial rights and the district court did not abuse its discretion in sentencing Dai-ley. We affirm.

[¶ 14] GERALD W. VANDE WALLE, C.J., MARY MUEHLEN MARING, CAROL RONNING KAPSNER, and DALE V. SANDSTROM, JJ., concur.


text:
    2006 ND 187
    ACUITY, a Mutual Insurance Company, Plaintiff and Appellant v. BURD & SMITH CONSTRUCTION, INC., Defendant and Midwest Family Mutual Insurance Company, Chad and Rebecca Caillier, Intervenors and Appellees and Peter L. Johnson and Suzanne M. Larkin, Intervenors.
    No. 20060001.
    Supreme Court of North Dakota.
    Aug. 24, 2006.

      Troy A. Wolf, Oppegard, Wolf & Quinton, Moorhead, MN, for plaintiff and appellant.
    Daniel J. Frisk (appeared), Bredahl, Fisher, Frisk & Grande, Fargo, ND, and Sean J. Mickelson (argued), Terhaar, Archibald Pfefferle Griebel, LLP, Minneapolis, MN, for intervenors and appellees.
   CROTHERS, Justice.

[¶ 1] ACUITY appeals from a summary judgment declaring it was obligated under a commercial general liability insurance (“CGL”) policy to indemnify its insured, Burd & Smith Construction, Inc., for Burd & Smith’s responsibility for damages to an apartment building owned by Chad and Rebecca Caillier. We conclude the CGL policy does not provide coverage to repair or replace a defective roof on the apartment building, but does provide coverage for other property damage to the apartment building. We modify the judgment accordingly, and as modified, we affirm.

I

[¶ 2] The Cailliers sued Burd & Smith and Mark Ehley, alleging the Cailliers contracted with Burd & Smith as a general contractor and Ehley as a subcontractor or employee of Burd & Smith to replace a roof on an apartment building owned by the Cailliers. The City of Fargo issued a building permit to Burd & Smith, as the contractor, to “[rjeplace the roof of the existing apartment complex.” The permit said the “contractor [would] be replacing tar and gravel with [a] new rubber roof.” The Cailliers alleged Burd & Smith and Ehley failed to exercise reasonable care in replacing the roof, including failing to secure the premises against foreseeable water damage, and breached their contract for replacement of the roof. The Cailliers essentially claimed that while replacing the roof, Ehley failed to protect the apartment building from rainstorms, which caused extensive water damage to the interior of the building. Additionally, two building tenants claimed they sustained property loss as a result of water damage and also sued Burd & Smith and Ehley.

[¶ 3] Burd & Smith was insured under a CGL policy issued by ACUITY during the time covered by allegations in the Cail-liers’ complaint. ACUITY provided Burd & Smith with a defense in the Cailliers’ action under a reservation of rights and answered the Cailliers’ complaint, denying that Burd & Smith had contracted with the Cailliers and that Burd & Smith had any involvement with Ehley’s work on the apartment building. Ehley did not answer or appear in the Cailliers’ action. The two tenants’ claims were settled before trial. The district court entered a directed verdict finding Ehley had breached his contract with the Cailliers, and the Cailliers’ negligence claim was not submitted to a jury. A jury found Ehley was not acting as Burd & Smith’s employee or agent when he entered into the contract with the Cailliers; however, the jury found Burd & Smith had ratified Ehley’s contract with the Cailliers and awarded them $370,000 in damages. The district court thereafter concluded the jury’s finding that Burd & Smith had ratified Ehley’s contract with the Cailliers was manifestly contrary to the greater weight of the evidence and granted Burd & Smith’s motion for a new trial.

[¶ 4] ACUITY then commenced this action against Burd & Smith seeking a declaration that the CGL policy did not provide coverage for the Cailliers’ damages in the underlying action. Burd & Smith did not answer or appear in ACUITY’S declaratory judgment action; however, the Cailliers and their insurer, Midwest Family Mutual Insurance Company, intervened. ACUITY moved for summary judgment. While AGUITY’s motion for summary judgment was pending, the Cail-liers and Burd & Smith entered into an agreement under Miller v. Shugart, 316 N.W.2d 729 (Minn.1982), in which Burd & Smith consented to a judgment of $412,788.45 against it on the condition any recovery would be collected only from the proceeds of the CGL policy. See also Sellie v. North Dakota Ins. Guar. Ass’n, 494 N.W.2d 151 (N.D.1992). The agreement said that as a result of water intrusion into the apartment building, the Cailli-ers sustained $412,788.45 in “property damage, lost rental income and additional expenses related to providing alternate living arrangements for several tenants in the [bjuilding.”

[¶ 5] The district court denied ACUITY’S motion for summary judgment and granted the Cailliers summary judgment, concluding ACUITY was obligated to indemnify Burd & Smith for Burd & Smith’s responsibility for damages to the apartment building. The court ruled there was coverage under the insuring provisions of the CGL policy because the Cailliers’ claim against Burd & Smith in the underlying action constituted an “occurrence.” The court decided that the “contractual liability” exclusion did not exclude coverage because Burd & Smith’s liability was not an assumed contract under the language of that exclusion. The court also decided two “damage to property” exclusions were ambiguous and construed them against ACUITY and in favor of Burd & Smith to not exclude coverage for Burd & Smith’s responsibility for damages to the apartment building.

II

[¶ 6] We review this appeal in the posture of summary judgment, which is a procedural device for promptly resolving a controversy on the merits without a trial if either party is entitled to judgment as a matter of law, and if no dispute exists as to either the material facts or the inferences to be drawn from undisputed facts, or if resolving disputed facts would not alter the result. Grinnell Mut. Reinsurance Co. v. Lynne, 2004 ND 166, ¶ 9, 686 N.W.2d 118. Whether a district court properly granted summary judgment is a question of law that we review de novo on the record. Ernst v. Acuity, 2005 ND 179, ¶ 7, 704 N.W.2d 869.

[¶ 7] The issues raised in this appeal involve the interpretation of ACUITY’S CGL policy with Burd & Smith, which is a question of law fully reviewable on appeal. See Fisher v. American Family Mut. Ins. Co., 1998 ND 109, ¶ 5, 579 N.W.2d 599. We independently examine and construe an insurance contract to determine whether there is coverage. Id. In State v. North Dakota State Univ., 2005 ND 75, ¶ 12, 694 N.W.2d 225 (quoting Ziegelmann v. TMG Life Ins. Co., 2000 ND 55, ¶ 6, 607 N.W.2d 898), we summarized our standards for construing an insurance contract:

Our goal when interpreting insurance policies, as when construing other contracts, is to give effect to the mutual intention of the parties as it existed at the time of contracting. We look first to the language of the insurance contract, and if the policy language is clear on its face, there is no room for construction. “If coverage hinges on an undefined term, we apply the plain, ordinary meaning of the term in interpreting the contract.” While we regard insurance policies as adhesion contracts and resolve ambiguities in favor of the insured, we will not rewrite a contract to impose liability on an insurer if the policy unambiguously precludes coverage. We will not strain the definition of an undefined term to provide coverage for the insured. We construe insurance contracts as a whole to give meaning and effect to each clause, if possible. The whole of a contract is to be taken together to give effect to every part, and each clause is to help interpret the others.

Ill

[¶ 8] The CGL policy requires ACUITY to pay “those sums that [Burd & Smith] becomes legally obligated to pay as damages because of bodily injury, [or] property damage ... to which this insurance applies.” The policy provides that the insurance applies “[t]o bodily injury or property damage only if: (a) The bodily injury or property damage is caused by an occurrence that takes place in the coverage territory.” The policy defines “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”

[¶ 9] The coverage provided by ACUITY’S CGL policy is subject to several exclusions which, as relevant to the issues raised in this appeal, provide:

This Insurance does not apply to:
b. Contractual Liability
Bodily injury or property damage for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages:
(1) That the insured would have in the absence of the contract or agreement; or
(2) Assumed in a contract or agreement that is an insured contract, provided the bodily injury or property damage occurs subsequent to the execution of the contract or agreement.
k. Damage to Property
Property damage to:
(5) That particular part of real property on which you or any contractor or subcontractor working directly or indirectly on your behalf is performing operations, if the property damage arises out of those operations; or
(6) That particular part of any property that must be restored, repaired or replaced because your work was incorrectly performed on it.

A

[¶ 10] Relying on Grinnell, 2004 ND 166, ¶¶ 16-18, 686 N.W.2d 118, ACUITY argues the Cailliers’ claims against Burd & Smith are grounded in breach of contract and are not within the scope of coverage provided under the CGL policy. ACUITY argues the Cailliers’ claims for damages are based on allegations of defective workmanship, which does not constitute an accidental “occurrence” under the coverage provisions of the CGL policy.

[¶ 11] ACUITY’S reliance on Grinnell is misplaced because there we were interpreting exclusions from liability and not the scope of coverage of a CGL policy. Nevertheless, in both Grinnell, 2004 ND 166, ¶ 18, 686 N.W.2d 118, and Ernst, 2005 ND 179, ¶ 14, 704 N.W.2d 869, we discussed the purposes of a CGL policy and, in the context of discussing exclusions from liability, distinguished damages occurring to the insured’s work product or project itself from damage to property other than the work product or project:

The exclusions from coverage for property damage ... are generally referred to as “business risk” exclusions, and are designed to exclude coverage for defective workmanship by the insured causing damage to the project itself. The principle behind such exclusions is based on the distinction made between two kinds of risk incurred by a contractor.... The first is the business risk borne by the contractor to replace or repair defective work to make the building project conform to the agreed contractual requirements. This type of risk is not covered by the CGL policy, and the “business risk” exclusions in the policy make this clear. The second is the risk that the defective or faulty workmanship will cause injury to people or damage to other property. Because of the potentially limitless liability associated with this risk, it is the type for which CGL coverage is contemplated. “While it may be true that the same neglectful craftsmanship can be the cause of both a business expense of repair and a loss represented by damage to persons and property, the two consequences are vastly different in relation to sharing the cost of such risks as a matter of insurance underwriting.... The risk intended to be insured is the possibility that the goods, products or work of the insured, once relinquished or completed, will cause bodily injury or damage to property other than to the product or completed work itself, and for which the insured may be found liable. The insured, as a source of goods or services, may be liable as a matter of contract law to make good on products or work which is defective or otherwise unsuitable because it is lacking in some capacity. This may even extend to an obligation to completely replace or rebuild the deficient product or work. This liability, however, is not what the coverages in question are designed to protect against. The coverage [applicable under the CGL policy] is for tort liability for ... [injury to persons and damage to other property] and not for contractual liability of the insured for economic loss because the product or completed work is not that for which the damaged person bargained.”

Grinnell, at ¶ 18 (internal citations omitted) (quoting Glens Falls Ins. Co. v. Donmac Golf Shaping Co., Inc., 203 Ga.App. 508, 417 S.E.2d 197, 200 (1992)).

[¶ 12] As that quotation explains, a CGL policy is not intended to insure business risks that are the normal, frequent, or predictable consequences of doing business and which businesses can control and manage. See 2 Rowland H. Long, The Law of Liability Insurance § 10.01[1] (2006). A CGL policy does not insure the insured’s work itself; rather, it insures consequential damages that stem from that work. Id. As a result, a CGL policy may provide coverage for claims arising out of tort, breaches of contract, and statutory liabilities as long as the requisite accidental occurrence and property damage are present. See 2 Long, at § 10.01[2]; 20 Eric Mills Holmes, Holmes’ Appleman on Insurance §§ 129.1[C] and 129.2[B] (2d ed.2002); Robert J. Franco, Insurance Coverage for Faulty Workmanship Claims Under Commercial General Liability Policies, 30 Tort & Insurance Law Journal 785, 787-89 (1995).

[¶ 13] In American Family Mut. Ins. Co. v. American Girl, Inc., 2004 WI 2, ¶¶ 37-49, 268 Wis.2d 16, 673 N.W.2d 65, the Wisconsin Supreme Court considered an insurer’s argument that faulty workmanship was not an accidental occurrence and contractual losses were not “occurrences” under the insuring provisions of a CGL policy. The court said the policy’s coverage language did not support a distinction between a tort and a contract for purposes of deciding whether a loss was within an initial grant of coverage and an occurrence was not defined by the legal category of the claim. Id. at ¶ 41. The court said if losses actionable in contract were never an occurrence for purposes of an initial grant of coverage, the business risk exclusions later in a policy would be entirely unnecessary. Id. at ¶ 47. See also Vandenberg v. Superior Ct., 21 Cal.4th 815, 88 Cal.Rptr.2d 366, 982 P.2d 229, 244 (1999) (stating coverage controlled by nature of damage and risk involved in light of particular policy provision). The rationale of American Girl is consistent with our rules for interpreting insurance contracts to give meaning to every word and phrase, if possible, and we reject ACUITY’S claim that breach of contract claims are not per se within the scope of coverage of a CGL policy.

[¶ 14] The issue in this case turns on whether there has been property damage caused by an “occurrence” under the policy. ACUITY does not dispute there is property damage as that term is defined in the CGL policy, and the issue is whether the property damage was caused by an “occurrence.” The policy defines “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The policy does not define “accident.” In the context of the interpretation of an insurance policy, we have defined “accident” as “happening by chance, unexpectedly taking place, not according to the usual course of things.” Wall v. Penn. Life Ins. Co., 274 N.W.2d 208, 216 (N.D.1979) (quoting Continental Cas. Co. v. Jackson, 400 F.2d 285, 288 (8th Cir.1968)). See also Kasper v. Provident Life Ins. Co., 285 N.W.2d 548, 553 (N.D.1979).

[¶ 15] Some courts have held that defective workmanship, standing alone, which results in damages only to the work product itself is not an accidental occurrence under a CGL policy. J.Z.G. Res., Inc. v. King, 987 F.2d 98, 101-02 (2d Cir.1993); Pursell Constr., Inc. v. Hawkeye-Security Ins., Co., 596 N.W.2d 67, 70-71 (Iowa 1999); Auto-Owners Ins. Co. v. Home Pride Cos., Inc., 268 Neb. 528, 684 N.W.2d 571, 576-79 (2004); McAllister v. Peerless Ins. Co., 124 N.H. 676, 474 A.2d 1033, 1036-37 (1984); Heile v. Herrmann, 136 Ohio App.3d 351, 736 N.E.2d 566, 568 (1999); L-J, Inc. v. Bituminous Fire & Marine Ins. Co., 350 S.C. 549, 567 S.E.2d 489, 493 (Ct.App.2002). In Auto-Owners, 684 N.W.2d at 578, the Nebraska Supreme Court said that a CGL policy does not provide coverage for faulty workmanship that damages only the insured’s work product, but “if faulty workmanship causes bodily injury or property damage to something other than the insured’s work product, an unintended and unexpected event has occurred and coverage exists.” See also King, 987 F.2d at 101-03 (distinguishing cases that allege faulty workmanship alone and cases that allege damage to property other than the work product); Pursell, 596 N.W.2d at 71 (claimed damages limited to contractor’s work product and were not accidental occurrence); McAllister, 474 A.2d at 1036-37 (claimed damages were for cost of correcting defective landscaping work with no claim that defects had caused damage to property other than the work product); Heile, 736 N.E.2d at 568 (claimed damages all related to contractors own work, not to consequential damages stemming from that work); L-J, Inc., 567 S.E.2d at 493 (faulty workmanship that causes damage to property other than work product is covered accidental occurrence).

[¶ 16] We agree with the rationale of those courts holding that faulty workmanship causing damage to property other than the work product is an accidental occurrence for purposes of a CGL policy. That rationale is consistent with the coverage risks for a CGL policy and the plain and ordinary language of the policy. We conclude property damage caused by faulty workmanship is a covered occurrence to the extent the faulty workmanship causes bodily injury or property damage to property other than the insured’s work product.

[¶ 17] Here, the Cailliers alleged damage to the interior of the apartment building. We conclude that claim is the type of risk covered by a CGL policy and constitutes an “occurrence” under ACUITY’S policy. We therefore conclude the Cailli-ers’ claim against Burd & Smith is within the coverage provisions of ACUITY’S CGL policy.

B

[¶ 18] ACUITY’S policy does not apply to contractual liability for “bodily injury or property damage for which the insured is obligated to pay damages by reason of assumption of liability in a contract or agreement.” ACUITY argues this “contractual liability” provision excludes coverage for any potential liability Burd & Smith would have based on a contract ratification theory. In Fisher, we said “[t]he key to understanding this exclusion, and its very important exception, is the concept of liability ‘assumed’ by the insured,” and “[I]n the CGL policy and other liability policies an ‘assumed’ liability is generally understood and interpreted by the courts to mean the liability of another which one ‘assumes’ in the sense that one agrees to indemnify or hold the other person harmless therefor.” 1998 ND 109, ¶ 9, 579 N.W.2d 599 (emphasis original) (quoting 2 Long, at § 10.05[2]).

[¶ 19] This record does not support ACUITY’S claim that Burd & Smith assumed liability under a contract in the sense that Burd & Smith agreed to indemnify or hold Ehley harmless. Fisher controls this issue, and we conclude the “contractual liability” exclusion does not exclude coverage for the Cailliers’ claimed damages.

C

[If 20] ACUITY argues both “damage to property” exclusions unambiguously exclude coverage for the Cailliers’ claimed damages against Burd & Smith in the underlying action. Exclusion k(5) specifically excludes coverage for “property damage” to “[t]hat particular part of real property on which you or any contractor or subcontractor working directly or indirectly on your behalf is performing operations, if the property damage arises out of those operation,” Exclusion k(6) specifically excludes coverage for “property damage” to “[t]hat particular part of any property that must be restored, repaired or replaced because your work was incorrectly performed on it.”

[¶ 21] The district court concluded the phrases “the particular part of real property” in exclusion k(5) and “that particular part of any property” in exclusion k(6) were ambiguous because they could be interpreted to encompass damage to the entire building, or damage to only the roof of the building. The court thus construed the exclusions to obligate ACUITY to indemnify Burd & Smith for Burd & Smith’s responsibility for damages to the apartment building.

[¶ 22] ACUITY argues the district court’s interpretation is contrary to this Court’s decisions in Grinnell and Ernst and to the overwhelming weight of the authority from other jurisdictions that have interpreted and applied those two “damage to property” exclusions. ACUITY claims those exclusions are clear and unambiguous and exclude coverage for all the Cailliers’ claimed damages to the insured’s work product, which ACUITY argues is the entire apartment building.

[¶ 23] In construing those exclusions, we reiterate that a CGL policy is not a performance bond and is not intended to protect a contractor’s business risk to replace or repair defective work that does not conform to the agreed contractual requirements; rather, the policy is intended to protect the insured from liability because the insured’s goods, products, or work cause bodily injury or damage to property other than the insured’s work product. Ernst, 2005 ND 179, ¶ 14, 704 N.W.2d 869; Grinnell, 2004 ND 166, ¶ 18, 686 N.W.2d 118. See Long, at § 10.01[1].

[¶ 24] Consistent with that purpose, other courts have generally construed those property damage exclusions to exclude coverage when the property damage is to the property on which the insured has contracted to perform operations and not to exclude coverage when the property damage is to property that the insured was not performing operations on. See Hartford Cas. Co. v. Cruse, 938 F.2d 601, 603-04 (5th Cir.1991); Southwest Tank and Treater Mfg. Co. v. Mid-Continent Cas. Co., 243 F.Supp.2d 597, 603-04 (E.D.Tex.2003); American Equity Ins. Co. v. Van Ginhoven, 788 So.2d 388, 391 (Fla.Ct.App.2001); Glens Falls, 417 S.E.2d at 201; Pekin Ins. Co. v. Willett, 301 Ill.App.3d 1034, 235 Ill.Dec. 350, 704 N.E.2d 923, 926-27 (1998); Goldsberry Operating Co., Inc. v. Cassity, Inc., 367 So.2d 133, 134-35 (La.Ct.App.1979); Jet Line Services, Inc. v. American Employers Ins. Co., 404 Mass. 706, 537 N.E.2d 107, 111 (1989); Vinsant Elec. Contractors v. Aetna Cas. & Sur. Co., 530 S.W.2d 76, 77-78 (Tenn.1975). Some courts have specifically recognized that facts in each case are determinative of the particular part of property on which an insured is performing its operations and that buildings may be divided into parts in attempting to determine which part or parts are the object of the insured’s work product. See Goldsberry, 367 So.2d at 134; Vinsant, 530 S.W.2d at 77-78. A common thread for deciding whether there is coverage for property damage is the scope of the insured’s contract. See Hartford Cas. Co., 938 F.2d at 603; Van Ginhoven, 788 So.2d at 391; Goldsberry, 367 So.2d at 134; Jet Line, 537 N.E.2d at 111.

[¶25] In Van Ginhoven, 788 So.2d at 390, the Florida Court of Appeals considered similar property damage exclusions. The court said although some of the terms in those exclusions were not defined in the policy, the terms were clearly understandable, especially because they were modified by other language in the exclusions. Id. at 390-91. The court concluded the exclusions were clear and unambiguous. Id. at 391. In that case, the insured was hired to make spot repairs to a swimming pool, clean the pool surface, and replace up to six tiles in the pool, which required the insured to drain the pool. Id. at 389. While the insured was draining the pool, water table pressure caused the pool to pop out of the ground, which resulted in damages to the pool, pump, heating system, deck, screen enclosure, and surrounding sprinkling system and landscaping. Id. The court held the property damage exclusion excluded coverage for damage to the pool because the insured was working on the pool at the time of the damage. Id. at 390-91. However, because the insured was not working on the plumbing, electrical, deck, patio, screen enclosure, or residence, there was coverage for damage to those items. Id. at 391.

[¶ 26] We agree with the rationale of Van Ginhoven that the terms of these exclusions are not ambiguous when construed in their entirety to give meaning and effect to each word and clause and when construed to effectuate the purpose of CGL policies. We disagree with ACUITY’S argument that the entire apartment building is the insured’s work product or project because that argument ignores the limiting language “particular part of real property” in exclusion k(5) and “particular part of any property” in exclusion k(6). The ordinary meaning of “particular” is “of, relating to, or being a single person or thing,” and “one unit or element among others.” Merriam-Websters Collegiate Dictionary 903 (11th ed.2005). The same source defines “part” as “one of the often indefinite or unequal subdivisions into which something is or is regarded as divided and which together constitute the whole.” Id. at 902-03. Those definitions limit “particular part” to a single unit or piece of property which together constitute the whole property. When those words are considered together and with the other language in the exclusions, they limit the scope of the exclusions to the particular part of real property on which the insured is performing operations, if the property damage arises out of those operations, and to the particular part of any property that must be restored, repaired, or replaced because the insured’s work was incorrectly performed on it. As applied to the case, the record reflects the contract was to replace the roof on the apartment building and not to do any work on any other particular part of the apartment building.

[¶ 27] We conclude the roof is the particular part of the real property on which the insured was performing operations and is the particular part of the property on which the insured’s work was incorrectly performed. Any damages for repair or replacement of a defective roof are excluded from coverage under the CGL policy, but damages to the interior of the apartment building are not the “particular part” of the real property or any property as used in exclusions k(5) and (6). That interpretation is consistent with the purposes of a CGL policy and gives effect to the plain and ordinary meaning of each word and clause in those exclusions.

[¶ 28] Our interpretation here is consistent with Grinnell and Ernst. In Grinnell, 2004 ND 166, ¶¶ 31-34, 686 N.W.2d 118, on appeal, the insured raised an issue about separating the house from the foundation for purposes of determining property damage. However, we held the issue was not adequately briefed or argued on appeal and was waived. Id. at ¶ 33. In Grinnell, the insured’s contract required the entire house to be lifted from the foundation in order to perform the contracted work on the foundation and the “particular part of the real property” the contractor was working on was the entire house. Id. at ¶25. Here, the contract was to replace the roof and did not involve work to the interior of the building. In Ernst, 2005 ND 179, ¶¶ 5, 16, 704 N.W.2d 869, all the claimed damage was to remove defectively installed flooring, purchase replacement flooring, and install the new flooring, and we held an exclusion identical to k(5) excluded coverage. Coverage was excluded in Ernst because the claimed damage was to the insured’s work product, the floor.

[¶ 29] Here, the district court judgment declared ACUITY was obligated to indemnify Burd & Smith for its responsibility for damages to the apartment building. As applied to this case, we conclude exclusions k(5) and (6), when read in their entirety, exclude coverage for repairing or replacing a defective roof on the apartment building, but do not exclude coverage for other property damage to the building. To the extent the Cailliers claim damages to replace or repair defective roofing, we conclude coverage is excluded under the policy. The judgment states that ACUITY “has an obligation under the terms of its policy with Burd and Smith Construction, Inc. to indemnify Burd and Smith Construction, Inc. for its responsibility for the damages occurring to the Cailliers’ apartment building, which occurred in September 1999.” To the extent the judgment could be read to include damage to the roof of the apartment building, we modify the judgment to read: “ACUITY has an obligation under the terms of its policy with Burd and Smith Construction, Inc. to indemnify Burd and Smith Construction, Inc. for its responsibility for the damages occurring to the Cailliers’ apartment building, which occurred in September 1999, excluding damages to the roof.”

IV

[¶ 30] We conclude the CGL policy provides coverage for damage to the interior of the apartment building and excludes coverage for repairing or replacing the defective roof. We modify the judgment accordingly, and as modified, we affirm.

[¶ 31] GERALD W. VANDE WALLE, C.J., MARY MUEHLEN MARING, CAROL RONNING KAPSNER, and DALE V. SANDSTROM, JJ. concur.


author: VANDE WALLE, Chief Justice.

text:
    2006 ND 183
    PEOPLES STATE BANK OF TRUMAN, INC., a Minnesota Corporation, Plaintiff and Appellant v. MOLSTAD EXCAVATING, INC., a North Dakota corporation, Defendant and FGOH20, Inc., d/b/a Fargo Water Equipment, Defendant and Appellee.
    No. 20050444.
    Supreme Court of North Dakota.
    Aug. 24, 2006.

      Ryan R. Dreyer (argued), Gislason & Hunter, L.L.P., New Ulm, MN, and John S. Foster (on brief), Zimney Foster, P.C., Grand Forks, ND, for plaintiff and appellant.
    Thomas R. Olson (argued) and Erin M. Conroy (on brief), Jeffries, Olson & Flom, P.A., Fargo, ND, for defendant and appel-lee.
   VANDE WALLE, Chief Justice.

[¶ 1] Peoples State Bank of Truman (“Bank”), now known as Profinium Financial, brought a summary judgment motion against Molstad Excavating (“Molstad”) claiming the Bank is entitled to $20,000 being held by Molstad. FGOH20 (“Fargo Water”) also brought a summary judgment motion claiming it was entitled to the $20,000 held by Molstad. Judgment was entered in favor of Fargo Water and the Bank appealed. We affirm.

I

[¶ 2] Haycraft Construction, Inc. (“Haycraft”) borrowed money from the Bank. To secure repayment of this debt, Haycraft executed a security agreement pledging as collateral its present and future inventory, present and future accounts, present and future contract rights, and all machinery, equipment, vehicles, furniture, and fixtures then known or thereafter acquired. The Bank filed the security agreement with the Minnesota Secretary of State. This assignment allowed the Bank to collect money owed to Haycraft by other parties if Haycraft failed to pay back the money it borrowed from the Bank.

[¶ 3] The City of Grand Forks awarded Molstad, as the general contractor, a contract to perform work for the City. In February 2002, Molstad entered into a subcontract with Haycraft (“Molstad/Hay-craft agreement”) under which Haycraft would perform some of the work necessary to complete the project for Grand Forks and Molstad would pay Haycraft for its work.

[¶ 4] Paragraph 2 of the Molstad/Hay-craft agreement allowed Molstad to withhold any money it owed to Haycraft if Molstad received notice of any claim arising out of the labor or materials that were furnished for the project. Molstad could also withhold any amount due to Haycraft on account of any actions or failures to act by Haycraft in the performance of the subcontract. Under the Molstad/Haycraft agreement, Haycraft explicitly agreed to pay all costs in connection with completing the project and also agreed to pay the bills as they became due.

[¶ 5] To finish its work for the project, Haycraft bought materials from Fargo Water. Haycraft still owes Fargo Water $20,000, the balance remaining on the account, for the materials. Fargo Water has not charged interest or finance charges on this balance. Haycraft completed all the work it was required to do for the project and Molstad owed Haycraft $21,033.72 for the work Haycraft performed. Molstad did not pay Haycraft because Haycraft still owed Fargo Water $20,000. Molstad withheld the entire $21,033.72 it owed Haycraft.

[¶ 6] In March 2003, Haycraft assigned its accounts receivable to the Bank. Under the assignment, the Bank sent notices to Molstad requesting that Molstad make all payments owed to Haycraft, under the subcontract, to the Bank. Molstad refused to pay the Bank, arguing the contract provision gave Molstad the right to keep the money until Haycraft paid Fargo Water the $20,000 Haycraft owed Fargo Water.

[¶ 7] The Bank sued Molstad to collect the $21,033.72, alleging, among other things, that Fargo Water was not a part of the contract between Molstad and Hay-craft and therefore Molstad had no right to withhold the money. Fargo Water joined the lawsuit between the Bank and Molstad. The Bank wanted the district court to order Molstad to release the $21,033.72 to the Bank. Fargo Water wanted the district court to order Molstad to pay Fargo Water $20,000 and release the remaining $1,033.72 to the Bank.

[¶ 8] The Bank brought a motion for summary judgment to collect from Mol-stad. District Judge Braaten granted, in part, the Bank’s motion for summary judgment and determined: (1) Haycraft properly assigned its right to the Bank; (2) because the Bank’s security interest was subject to all the terms of the subcontract between Molstad and Haycraft, Molstad did not convert the Bank’s collateral by refusing to pay the Bank upon demand; (3) the condition of the subcontract allowed Molstad to withhold payment to Haycraft, or the Bank, until Haycraft, or the Bank, settled Fargo Water’s claim for $20,000; (4) the Bank was entitled to receive $1,033.72 of the amount withheld by Mol-stad and the remaining $20,000 should be withheld by Molstad pending verification that the Fargo Water claim has been settled; and (5) the Bank’s claim for the remaining $20,000 was dismissed without prejudice because once the Bank reaches a settlement of the Fargo Water claim, Mol-stad should release the $20,000 to the Bank.

[¶ 9] Subsequent to the district court decision, the Bank and Fargo Water were unable to reach an agreement on Fargo Water’s $20,000 outstanding claim. The Bank and Fargo Water again filed motions for summary judgment, each claiming they were solely entitled to the $20,000. District Judge Eleven granted Fargo Water’s motion for summary judgment, stating Fargo Water is entitled to the $20,000 and requiring Molstad to release the money to Fargo Water.

II

[¶ 10] The Bank contends the district court erred by violating the law of the case. The Bank argues Judge Eleven violated Judge Braaten’s earlier judgment and order and therefore erred by finding Fargo Water had a claim against Molstad or the City of Grand Forks, by misconstruing the Molstad/Haycraft agreement, and by releasing the $20,000 to Fargo Water. “[A]s generally used, the law of the case is defined as ‘the principle that if an appellate court has passed on a legal question and remanded the cause to the court below for further proceedings, the legal question thus determined by the appellate court will not be differently determined on a subsequent appeal in the same case where the facts remain the same.’ ” Tom Beuchler Const., Inc. v. City of Williston, 413 N.W.2d 336, 339 (N.D.1987). This Court has held the law of the case doctrine “encompasses not only those issues decided on the first appeal, but also those issues decided by the trial court prior to the first appeal which were not presented for review at the first appeal.” Id.

[¶ 11] This Court has stated it agrees with the court in Ellis v. U.S., 313 F.3d 636 (1st Cir.2002), “noting there is a presumption ‘that a successor judge should respect the law of the case’ and ‘orderly functioning of the judicial process requires that judges of coordinate jurisdiction hon- or one another’s orders and revisit them only in special circumstances.’ ” See In re Guardianship and Conservatorship of Onstad, 2005 ND 158, ¶ 11, 704 N.W.2d 554 (stating in footnote 2 that this Court has been less effusive about application of the doctrine in a single proceeding, involving successor judges within a coordinate court and stating the Court found it helpful to quote statements from Ellis).

[¶ 12] The law of the case doctrine has two branches. Ellis v. U.S., 313 F.3d 636, 646 (1st Cir.2002). The branch applicable here “provides that ‘unless corrected by an appellate tribunal, a legal decision made at one stage of a civil or criminal case constitutes the law of the case throughout the pendency of the litigation.’ ” Id. “This means that a court ordinarily ought to respect and follow its own rulings, made earlier in the same case.” Id. “The presumption, of course, is that a successor judge should respect the law of the case.” Id. “The orderly functioning of the judicial process requires that judges of coordinate jurisdiction honor one another’s orders and revisit them only in special circumstances.” Id.

[¶ 13] “The question of what circumstances justify revisiting a ruling previously made in the same proceeding by a judge of coordinate jurisdiction is case-specific.” Id. at 647. The resolution of that question is guided by certain general principles which the Ellis court discussed. Id. The principle most applicable to this case provides that “reconsideration is proper if the initial ruling was made on an inadequate record or was designed to be preliminary or tentative.” Id.

[¶ 14] In an October 5, 2004 Judgment, Judge Braaten ordered:

2. Defendant Molstad Excavating, Inc., is entitled to withhold the $20,000.00 from plaintiff [the Bank] until such time as the Fargo Water, Inc. claim is settled. At that time, Molstad Excavating, Inc., is to release the remaining $20,000.00 to plaintiff [the Bank].
3. This Order and Judgment is without prejudice to plaintiffs claim for $20,000.00 against Molstad Excavating, Inc.

[¶ 15] The earlier order was clearly designed to be tentative pending the settlement of the claim. Fargo Water and the Bank were unable to settle the claim. Without deciding when, under appropriate circumstances, the original judge or a successor judge may revisit a partial summary judgment before final judgment is entered, here, under the terms of Judge Braaten’s order, Judge Eleven needed to again consider the issues necessary to resolve the competing claims.

Ill

[¶ 16] The Bank also contends Fargo Water is not a party to the contract between Molstad and Haycraft and thus cannot sue under the contract provision in question. Therefore, the Bank argues the district court erred by granting summary judgment to Fargo Water.

[¶ 17] The standard of review for summary judgments is well-established. In Zuger v. State, 2004 ND 16, ¶ 7, 673 N.W.2d 615 (citations omitted), this Court explained:

Summary judgment is a procedural device for promptly disposing of a lawsuit without a trial if there are no genuine issues of material fact or inferences which can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. “Whether summary judgment was properly granted is ‘a question of law which we review de novo on the entire record.’ ” On appeal, this Court decides if the information available to the trial court precluded the existence of a genuine issue of material fact and entitled the moving party to summary judgment as a matter of law. Summary judgment is appropriate against parties who fail to establish the existence of a factual dispute on an essential element of a claim on which they will bear the burden of proof at trial.

[¶ 18] Paragraph 2 of the Molstad/Hay-craft agreement provides:

That if notification of any claims have been made against the Sub-Contractor or the Contractor arising out of labor or materials furnished the Project or otherwise on account of any actions or failures to act by the Sub-Contractor in the performance of this Sub-Contract, the Contractor may, at his discretion, withhold such amounts otherwise due or to become due hereunder to cover said claims and any cost or expense arising or to arise in connection therewith pending settlement thereof. The exercise of this right by the Contractor shall not bar the exercise of any other rights of the Contractor herein or by law provided.

[¶ 19] A contract must be interpreted to give effect to the mutual intention of the parties as it existed at the time of contracting. N.D.C.C. § 9-07-03; Ag Acceptance Corp. v. Glinz, 2004 ND 154, ¶ 12, 684 N.W.2d 632. “Construction of a written contract to determine its legal effect is a question of law for the court to decide, and on appeal this Court will independently examine and construe the contract to determine if the trial court erred in its interpretation.” Ag Acceptance Corp., at ¶ 12.

[¶ 20] “A contract made expressly for the benefit of a third person may be enforced by him at any time before the parties thereto rescind it.” N.D.C.C. § 9-02-04. “To enforce a contract between two others, a third party must have been intended by the contracting parties to be benefited by the contract.” Apache Corp. v. MDU Resources Group, Inc., 1999 ND 247, ¶ 10, 603 N.W.2d 891. To determine whether the contract at issue was made expressly for the third party’s benefit, “we must look to the intentions of the parties to the contract.” O’Connell v. Entertainment Enterprises, Inc., 317 N.W.2d 385, 388 (N.D.1982). “The intentions of the parties to a contract must be ascertained from the written contract alone, if possible.” Id. “Another guideline for determining whether a party is a third-party beneficiary, as opposed to an incidental beneficiary, is whether the benefit to the third party was ‘within the contemplation’ of the contracting parties.” Moen v. Norwest Bank of Minot, 647 F.Supp. 1333, 1341-42 (D.N.D.1986).

[¶ 21] In a case where a third party creditor claimed he was expressly benefited by a contract between two other parties, this Court held that payment of a debt claimed by a third party would be an incidental benefit of a contract where “such payment was not expressly provided for.” O’Connell v. Entertainment Enterprises, Inc., 317 N.W.2d 385, 389 (N.D.1982). Because the contracting parties did not expressly intend to benefit the third party, this party was merely an incidental beneficiary to the contract and could not prevail in an action under the contract against the two contracting parties. Id. In another case where a bank agreed to pay all of a customer’s overdrafts, this Court held parties who were paid by the customer’s bank cheeks were only incidental beneficiaries even though they would benefit from the bank’s agreement to pay for the overdrafts. Hellman v. Thiele, 413 N.W.2d 321, 325 (N.D.1987). We held the contract was for the primary benefit of the bank and its customer and any benefits flowing to the third parties were purely incidental. Id.

[¶ 22] In a Minnesota case involving a nearly identical provision as that contained in Paragraph 2, the Minnesota Supreme Court held:

It is true that this provision of the contract undoubtedly gives the contractor the right at his discretion to withhold payments to make sure that the claims of laborers and materialmen are paid. However, the language does not permit the construction now sought by Barnes that it is mandatory for the contractor to withhold such funds. Obviously, the purpose of this type of contract provision is to protect the contractor from unpaid claims of those who have a charge against the project, (emphasis supplied)

Barnes Truck. Serv. v. Hasslen Const. Co., 303 Minn. 311, 227 N.W.2d 563, 566 (1975). We agree with the Minnesota court that these provisions are primarily for the benefit of the owner, Molstad, and Paragraph 2 does not entitle Fargo Water, as a third party beneficiary, to the money withheld. To the extent that the trial court awarded Fargo Water summary judgment as a third party beneficiary, we disagree with the trial court.

[¶ 23] However this does not end our inquiry. We will not set aside a correct result merely because the district court assigned an incorrect reason if the result is the same under the correct law and reasoning. State ex rel. N.D. Housing Finance Agency v. Center Mutual Ins. Co., 2006 ND 175, ¶ 12, 720 N.W.2d 425.

[¶ 24] The trial court held Molstad was contractually entitled to withhold these funds pursuant to Paragraph 2 and the Bank, as an assignee of Haycraft, is also bound by this contractual language. We agree. Paragraph 2 allows Molstad to withhold funds it owes to Haycraft in the event Haycraft does not pay a subcontractor or supplier hired by Haycraft. Hay-craft did not pay its supplier, Fargo Water. Nevertheless, this provision does not allow Molstad to permanently retain the moneys; rather we conclude it allows Mol-stad to pay the subcontractor or supplier out of the withheld funds. While Fargo Water does not have a cause of action against Molstad as a third party beneficiary, Molstad does have the discretion to pay either Fargo Water or the Bank as the assignee of Haycraft. It is for Molstad to consider the consequences of whatever action it takes.

[¶ 25] Here the record reflects in the Affidavit of Molstad Excavating, Inc. In Resistance to Plaintiffs Motion for Summary Judgment, and the attachment thereto of a letter from Douglas Christensen, Attorney for Molstad, that Molstad intends to distribute the $21,033.72 owed to Haycraft Construction Co. as follows:

1. $20,000 will be paid to Fargo Water Equipment to satisfy the balance of invoice # 42330.00
2. $1,033.72 will be paid to Haycraft Construction, Inc.

[¶ 26] The trial court judgment ordered payment of $20,000 to Fargo Water. Because the judgment reflects the announced intention of Molstad and because Molstad had the discretion to distribute the money to Fargo Water or to the Bank, as Haycraft’s assignee, we affirm the judgment.

IV

[¶ 27] Affirmed.

[¶ 28] CAROL RONNING KAPSNER, MARY MUEHLEN MARING, DANIEL J. CROTHERS, and DALE V. SANDSTROM, JJ„ concur.