text:
    2007 ND 163
    RITTER, LABER AND ASSOCIATES, INC.; Elizabeth Cantarine, Personal Representative of the Estate of Eugene A. Burdick; and Russell L. Kiker, Plaintiffs and Appellants v. KOCH OIL, INC., a division of Koch Industries, Inc., Defendant and Appellee.
    No. 20070029.
    Supreme Court of North Dakota.
    Oct. 16, 2007.

      Ronald H. McLean (argued) and Jane L. Dynes (on brief), Serkland Law Firm, Fargo, N.D., Gary J. Gordon (argued), Rider Bennett LLP, Minneapolis, MN, and Marvin L. Kaiser (appeared), Kaiser Law Firm, Williston, N.D., for plaintiffs and appellants.
    Charles F. Webber (argued) and Jerry W. Snider (on brief), Faegre & Benson, Minneapolis, MN, and John W. Morrison, Jr. (appeared), Fleck, Mather & Strutz, Bismarck, N.D., for defendant and appel-lee.
   VANDE WALLE, Chief Justice.

[¶ 1] Ritter, Laber and Associates, Inc., Elizabeth Cantarme, as the personal representative of the estate of Eugene Burdick, and Russell Kiker appeal from a district court judgment approving a settlement in a class action and awarding attorney fees and costs to the plaintiffs and an incentive payment to the three class representatives. We affirm, concluding the court did not err in refusing to reform the parties’ settlement agreement and did not abuse its discretion in awarding attorney fees and incentive payments.

I

[¶ 2] Between 1975 and 1988, Koch Oil, Inc. (“Koch”) purchased oil and gas in North Dakota. For some of its purchases Koch paid the royalty and leasehold owners based upon “hand gauged” measurements at the well site. At the pipeline selling points, when Koch sold the oil to others, a volumetric meter was used to measure the oil. Because of differences in measured volume between the two methods, Koch allegedly paid the owners for less oil than it actually received.

[¶ 3] In 1986, the North Dakota State Tax Commissioner assessed gross production tax and oil extraction tax on the additional oil for tax years 1980 to 1983, and this Court upheld the assessment on appeal. See Koch Oil Co. v. Hanson, 536 N.W.2d 702, 704 (N.D.1995). Upon learning of the disputed measurements, some royalty and leasehold owners brought this class action alleging conversion and unjust enrichment and seeking an accounting. The class included all persons and entities owning royalty and leasehold interests in wells from which Koch purchased or sold oil in North Dakota from 1975 through 1988 where the oil was measured by hand gauging. The class includes approximately 6,000 owners of royalty and leasehold interests in approximately 2,300 wells in North Dakota.

[¶ 4] In three prior appeals, this Court resolved issues relating to certification of the class and summary judgment. See Ritter, Laber & Assoc., Inc. v. Koch Oil, Inc., 2004 ND 117, 680 N.W.2d 634; Ritter, Laber & Assoc., Inc. v. Koch Oil, Inc., 2001 ND 56, 623 N.W.2d 424; Ritter, Laber & Assoc., Inc. v. Koch Oil, Inc., 2000 ND 15, 605 N.W.2d 153. The case was scheduled for trial in April 2005, but the parties reached a tentative settlement agreement shortly before trial. Negotiations ultimately produced a final written settlement agreement.

[¶ 5] The settlement agreement provided for an $18 million fund, with payments to be distributed to class members based upon a mathematical formula set forth in the agreement. The settlement provided that the district court could award part of the fund for attorney fees and actual costs incurred in the litigation. The agreement also provided that Koch would retain any part of the fund which was unclaimed.

[¶ 6] In a January 31, 2006, petition, the plaintiffs requested attorney fees in the amount of $6 million, costs of $634,952, an escrow fund of $106,000 for future litigation expenses, and an incentive payment to the class representatives of $180,000. The trial court allowed attorney fees of $3,930,172, costs of $634,952, an escrow fund of $106,000, and incentive payments of $75,000 to be divided equally among the named class representatives. Subsequently, the plaintiffs filed a motion seeking reformation of the settlement agreement, alleging that one of the figures agreed to in the mathematical formula for calculating payments to individual class members did not accurately reflect the intent of the parties. The district court denied the motion to reform the agreement.

[¶ 7] The plaintiffs in their appeal from the judgment approving the settlement agreement, argue the trial court erred in failing to reform the agreement for mutual mistake and abused its discretion in awarding attorney fees and incentive payments to the class representatives.

II

[¶ 8] The parties engaged in extensive settlement negotiations over a period of several months, resulting in more than twenty separate drafts of the proposed agreement. The agreement included an $18 million settlement fund, with payments to individual claimants calculated according to a complex mathematical formula. Under the formula, each individual claimant would receive a portion of the $18 million fund, after deduction of attorney fees and incentive payments, based upon the percentage of the value of the oil sold by that individual claimant to the value of all oil purchased by Koch in North Dakota during the relevant period. The equation used by the parties in early drafts of the settlement agreement was essentially: (a+b) x [18,000,000 - (c+d) ] where “a” equals the amount Koch had paid to the individual claimant, “b” equals the aggregate amount Koch paid to class members during the relevant period, “c” equals allowed attorney fees, and “d” equals incentive payments approved by the court.

[¶ 9] As negotiations continued, Koch suggested the parties should incorporate an actual number in place of “b” in the formula. Koch ultimately calculated the value of “b” as $4,259,377,938. Koch provided the plaintiffs with full documentation of how it had arrived at that figure, and the plaintiffs affirmatively acknowledge that Koch believed this to be the correct figure, there was no fraud involved, and the number was “based on the best information the parties had at the time.” The parties’ correspondence during the negotiations demonstrates that they knew the $4.2 billion figure was an approximation and not a mathematically exact determination of the value of oil purchased by Koch.

[¶ 10] The final settlement agreement adopted by the parties and approved by the court provided:

The amount of the payment to each Authorized Claimant shall be calculated according to the following mathematical formula:
(a-s-b) * (18,000,000 - (c + d))
where
a = the aggregate amounts paid by Koch directly to the Authorized Claimant for oil purchased from leases in North Dakota, South Dakota, and/or Montana between January 1, 1975 and December 31, 1988, as determined by Koch’s “paid crude” records (excluding purchases of natural gas and natural gas products)
and
b = 4,259,377,938
and
c = Allowed Attorneys’ Pees
and
d = Allowed Incentive Payment

[¶ 11] After the settlement agreement was approved by the court, a claims administrator was appointed. The claims administrator ultimately calculated that the actual aggregate amount of oil purchased by Koch during the relevant period was $3,603,961,778, or $655,416,160 less than the value of “b” agreed to by the parties. Because the agreed upon $4.2 billion denominator in the equation is larger than the actual aggregate purchases, each claimant will receive less from the $18 million settlement fund than if the $3.6 billion figure had been used as the denominator. The court calculated that each claimant would receive approximately 15 percent less under the formula with the $4.2 billion denominator. The plaintiffs claim this was a mutual mistake of fact, and the court should grant equitable reformation of the parties’ agreement to reflect their true intent.

[¶ 12] Reformation is an equitable remedy used to reframe written contracts to accurately reflect the real agreement between contracting parties. Biteler’s Tower Serv., Inc. v. Guderian, 466 N.W.2d 141, 143 (N.D.1991) (quoting Black’s Law Dictionary 1152 (5th ed.1979)). Reformation of a contract for mutual mistake is governed by N.D.C.C. § 32-04-17:

When, through fraud or mutual mistake of the parties, or a mistake of one party which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised on the application of a party aggrieved so as to express that intention so far as it can be done without prejudice to rights acquired by third persons in good faith and for value.

[¶ 13] In Ell v. Ell, 295 N.W.2d 143, 150 (N.D.1980) (citations omitted) (emphasis in original), we explained the basis for granting reformation of a written instrument on the basis of mutual mistake:

We have recognized that equity will grant remedial relief in the nature of reformation of a written instrument, resulting from a mutual mistake, when justice and conscience so dictate. However, in actions for reformation, a presumption arises from the terms of the instrument that it correctly expresses the true agreement and intention of the parties.
Each case involving the reformation of a contract on grounds of fraud or mutual mistake must be determined upon its own particular facts and circumstances. In considering whether or not a mutual mistake exists, the court can properly look into the surrounding circumstances and take into consideration all facts which disclose the intention of the parties.

[¶ 14] A party seeking reformation has the burden to prove by clear and convincing evidence that a written agreement does not fully or truly state the agreement the parties intended to make. Dahl v. Messmer, 2006 ND 166, ¶ 9, 719 N.W.2d 341. For a mutual mistake to justify reformation of an agreement, the party seeking reformation must show that, when the agreement was executed, both parties intended to say something different from what was said in the document. Heart River Partners v. Goetzfried, 2005 ND 149, ¶ 15, 703 N.W.2d 330. Whether there has been a mutual mistake sufficient to support a reformation claim is a question of fact. Id. A district court’s findings of fact will not be reversed on appeal unless they are clearly erroneous. N.D.R.Civ.P. 52(a).

[¶ 15] In denying the plaintiffs’ claim for reformation of the parties’ agreement, the district court stated:

The facts established that the settlement agreement in question was the product of intense negotiations between seasoned attorneys over a protracted period of time. The agreement may have undergone as many as 26 written revisions before the final product was submitted to the Court. The use of a specific number as the denominator in the equation for calculating class members’ claims was deliberate and not inadvertent or mistaken.

[¶ 16] During the settlement negotiation process, the parties included in the mathematical formula for calculating payment of claims to class members the following definition of “b” as the denominator in the equation: “the aggregate amounts paid by Koch directly to the Class Members for all oil lease purchases from selling points within the Belfield Area (Area 951) between January 1, 1975 and December 31, 1988.” When Koch approached the plaintiffs with the idea of inserting a specific number as the denominator for “b” instead of the formulaic expression of the denominator, extensive consideration and analysis of that proposal was undertaken by the plaintiffs before they agreed to insert the $4.2 billion amount as the denominator for “b.”

[¶ 17] The evidence shows the parties were aware, during the negotiations, that the $4.2 billion number proposed by Koch might not be accurate and might constitute as much as a 15 percent deviation from the actual amount of aggregate oil purchased by Koch during the relevant period. With that knowledge, the parties agreed to insert the $4.2 billion number into the formula as the agreed-upon representation of the aggregate oil purchased. Subsequently, the claims administrator determined the actual amounts paid by Koch directly to each claimant. When those amounts were totaled, the parties realized that the actual aggregate amount Koch paid to all class members was $3.6 billion instead of $4.2 billion.

[¶ 18] We conclude the district court’s findings on this issue are not clearly erroneous and they support the court’s conclusion that the plaintiffs have failed to prove by clear and convincing evidence the settlement agreement did not fully or truly state the agreement the parties intended to make. When the plaintiffs agreed to insert the $4.2 billion figure as the denominator in the formula, they were aware the number might not be accurate and the actual number could be higher or lower. The plaintiffs cannot now predicate “mutual mistake” on the ground the actual number was a lower number. The parties were aware of that possibility. Yet, they included no provision for modifying the number if that possibility later became a reality. The parties, after much consideration and negotiation, deliberately intended to include the $4.2 billion amount as the denominator in the formula for calculating payment of claims to class members. When the parties executed the agreement, they were well aware that the actual aggregate purchases might be more or less than the $4.2 billion amount, but they, nevertheless, agreed to use that figure in the formula. Consequently, the fact that the actual number was a lower number does not constitute a mutual mistake. Under these circumstances, we hold the district court did not err in denying the plaintiffs’ claim for reformation of the agreement.

Ill

[¶ 19] The three class representatives requested incentive payments totaling $180,000, in addition to their formula share of the settlement award. The district court awarded incentive payments totaling $75,000, and the class representatives on appeal assert:

The class representatives shouldered a burden and assumed a risk unmatched by any other class member.. It is correct to say that without them there would be no settlement and, thus, no benefit to the class. For all of these reasons, plaintiffs requested incentive payments to each of the class representatives in the amount of $180,000, divided equally, which amounts [to] .33% of the settlement fund. This would award $60,000 to each class representative.
[T]he district court erred in its award of incentive payments to class representatives .... [T]he court erred legally in requiring proof of “extraordinary” effort on behalf of the named plaintiffs, when the law requires careful consideration of the efforts expended and benefits received in pursuing the class action.

[¶ 20] In its memorandum opinion, the district court explained its reasoning for awarding $75,000 in incentive payments:

In the Court’s view the fact that the case had its genesis in Judge Burdick’s realization, upon learning of the Hansen decision, that he might have a cause of action against Koch and the activities of Judge Burdick and the other named class representatives including Elizabeth Cantarme as personal representative of Judge Burdick’s estate, in carrying the brunt of this litigation over a 10-year period (and continuing) warrants an award of an incentive payment. However[,] the fact that this class action lawsuit was a lawyer-driven affair, that there is no evidence that the class representatives rendered extraordinary services to the class, suffered personal hardship or spent substantial time in personal investigation of the case all supports an award of an incentive payment less than requested. After considering the arguments presented, the Court determines that an incentive payment is appropriate and the sum of $75,000 to be divided equally among the named class representatives is fair and reasonable under the circumstances presented.

[¶ 21] This Court has not previously considered the propriety and parameters of incentive awards in class action lawsuits. The federal courts have applied an abuse-of-discretion standard in reviewing a trial court’s decision on the class representative’s request for an award of incentive payments. See Hadix v. Johnson, 322 F.3d 895, 897 (6th Cir.2003); Staton v. Boeing Co., 327 F.3d 938, 978 (9th Cir.2003); Montgomery v. Aetna Plywood, Inc., 231 F.3d 399, 410 (7th Cir.2000). We believe the abuse-of-discretion standard is the appropriate standard of review to apply to this issue. A trial court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner, its decision is not the product of a rational mental process leading to a reasoned determination, or it misinterprets or misapplies the law. Schaefer v. Souris River Telecomm. Coop., 2000 ND 187, ¶ 14, 618 N.W.2d 175.

[¶ 22] Numerous federal courts have authorized incentive awards to class representatives for “their often extensive involvement with a lawsuit.” See Hadix, 322 F.3d at 897. In Roberts v. Texaco, Inc., 979 F.Supp. 185, 200 (S.D.N.Y.1997) (citations omitted), the federal district court explained:

In this Circuit, the Courts have, with some frequency, held that a successful Class action plaintiff, may, in addition to his or her allocable share of the ultimate recovery, apply for and, in the discretion of the Court, receive an additional award, termed an incentive award. The guiding standard in determining an incentive award is broadly stated as being the existence of special circumstances including the personal risk (if any) incurred by the plaintiff-applicant in becoming and continuing as a litigant, the time and effort expended by that plaintiff in assisting in the prosecution of the litigation or in bringing to bear added value (e.g., factual expertise), any other burdens sustained by that plaintiff in lending himself or herself to the prosecution of the claim, and, of course, the ultimate recovery.
Other jurisdictions have likewise granted incentive awards upon substantially the same grounds.

The Seventh Circuit Court of Appeals, in Cook v. Niedert, 142 F.3d 1004, 1016 (7th Cir.1998) (citation omitted), further explained:

Because a named plaintiff is an essential ingredient of any class action, an incentive award is appropriate if it is necessary to induce an individual to participate in the suit. In deciding whether such an award is warranted, relevant factors include the actions the plaintiff has taken to protect the interests of the class, the degree to which the class has benefitted from those actions, and the amount of time and effort the plaintiff expended in pursuing the litigation.

See also Van Vranken v. Atlantic Richfield Co., 901 F.Supp. 294, 299 (N.D.Cal.1995) (criteria courts may consider in determining whether to make an incentive award include the risk to a class representative in commencing suit, both financial and otherwise; the notoriety and personal difficulties encountered by the class representative; the amount of time and effort spent by the class representative; the duration of the litigation; and the personal benefit enjoyed by the class representative as a result of the litigation). Granting of incentive awards is not universal, and in deciding the issue a court must be vigilant in ensuring that the settlement is fair to all members of the class and that the providing of special incentives does not result in the class representatives being more concerned with maximizing those incentives than with obtaining the best results for all class members. See Staton, 327 F.3d at 977; Hadix, 322 F.3d at 897.

[¶ 23] Here, the class representatives assert the district court “erred legally in requiring proof of ‘extraordinary’ effort on behalf of the named plaintiffs, when the law requires careful consideration of the efforts expended and benefits received in pursuing the class action.” We disagree that the district court erred in considering whether the class representatives “rendered extraordinary services to the class.”

[¶ 24] In upholding the lower court’s refusal to grant the lead plaintiff an incentive award, the Seventh Circuit Court of Appeals in Montgomery, 231 F.3d at 410, explained:

While the lead plaintiff was the only named plaintiff, was subjected to a rough deposition, and was portrayed by the Montgomery defendants in an unfavorable light during the litigation, it does not appear that he had to devote an inordinate amount of time to the case or that, as a former employee, he suffered or risked any retaliation by Aetna Plywood.

The federal district court in Weseley v. Spear, Leeds & Kellogg, 711 F.Supp. 713, 720 (E.D.N.Y.1989), likewise refused to grant the class representative a special incentive award after considering “he did not perform any extraordinary services to the class.”

[¶ 25] We conclude the district court considered and weighed the relevant factors in deciding to grant a $75,000 incentive payment to the class representatives. The court recognized the case had “its genesis in Judge Burdick’s realization ... that he might have a cause of action against Koch” and the class representatives “carried] the brunt of this litigation over a 10-year period.” However the court also recognized “this action was a lawyer-driven affair,” and there was no evidence the class representatives “rendered extraordinary services to the class, suffered personal hardship or spent substantial time in personal investigation of the case.” An incentive award, unlike an award of actual compensatory damages, for example, is not capable of a precise determination, and that is why we review the award under the abuse-of-discretion standard. The district court’s decision reflects that it was the product of a rational mental process leading to a reasoned determination, and it was not arbitrary, unreasonable, or unconscionable. We, therefore, conclude the district court did not abuse its discretion in making the award of incentive payments.

IV

[¶ 26] The plaintiffs assert the district court erred in awarding attorney fees. They had requested an award of attorney fees, costs, and expenses totaling $6,740,952. The court awarded them attorney fees, costs, and expenses totaling $4,671,124. The attorney fee portion of that award was $3,930,172 (including paralegal fees).

[¶ 27] In a rare exception to the American rule that parties’ bear their own costs in litigation, a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to reasonable attorney fees from the fund as a whole. Horst v. Guy, 211 N.W.2d 723, 732 (N.D.1973). See also In re Copley Pharm., Inc., 1 F.Supp.2d 1407, 1409 (D.Wyo.1998). Rule 2S(p), N.D.R.Civ.P., authorizes the district court to award attorney fees in class action litigation:

(1) Attorney’s fees for representing a class are subject to control of the court.
(3) If a prevailing class recovers a judgment for money or other award that can be divided for the purpose, the court may order reasonable attorney’s fees and litigation expenses of the class to be paid from the recovery.

Rule 23(p)(5), N.D.R.Civ.P., sets forth the factors the district court must consider in awarding attorney fees in a class action:

(5) In determining the amount of attorney’s fees for a prevailing class the court shall consider the following factors:
(A) the time and effort expended by the attorney in the litigation,' including the nature, extent, and quality of the services rendered;
(B) results achieved and benefits conferred upon the class;
(C) the magnitude, complexity, and uniqueness of the litigation;
(D) the contingent nature of success;
(E) in cases awarding attorney’s fees and litigation expenses under paragraph (4) because of the vindication on an important public interest, the economic impact on the party against whom the award is made; and
(F) appropriate criteria included in the North Dakota Code of Professional Responsibility.

[¶ 28] The district court is considered an expert in determining an award of attorney fees, and its decision concerning the amount and reasonableness of attorney fees will not be overturned on appeal absent a clear abuse of discretion. CybrCollect, Inc. v. North Dakota Dep’t of Fin. Inst., 2005 ND 146, ¶ 39, 703 N.W.2d 285. As we stated in ¶21, a trial court abuses its discretion if it acts in an arbitrary, unreasonable, or unconscionable manner, its decision is not the product of a rational mental process leading to a reasoned determination, or it misinterprets or misapplies the law. Schaefer, 2000 ND 187, ¶ 14, 618 N.W.2d 175; City of Medora v. Golberg, 1997 ND 190, ¶ 17, 569 N.W.2d 257.

[¶ 29] In awarding attorney fees, the district court considered each of the factors under N.D.R.Civ.P. 23(p)(5). The court determined the time, effort, and quality of legal services rendered by the class action attorneys warranted a sizable award of attorney fees in addition to the costs and expenses of the litigation. As a factor in determining the size of the award, the court considered not only the total $18 million fund available for claims but also the potential actual total distribution to the members of the class who had filed timely claims:

In the Court’s view a rational relationship or connection between the amount of attorney’s fees allowed and the actual distribution to the class insures that class counsel has an incentive to be diligent and maximize the amount of the actual recovery likely to be paid to the class. If there is no connection defendants such as Koch have a powerful means to entice class counsel to settle the lawsuit even though the actual distribution to the class may end up to be minimal. The rational relationship adopted by the Court in this case is that allowed attorney’s fees will not exceed the amount of the remaining claim fund that has been claimed assuming that all timely filed claims are paid.
The Court’s decision does not focus only on the actual payout and does consider the other factors discussed by the Court above. Even though some or even all of the Category One claims may be denied, the Court’s decision does not make the award of attorney’s fees contingent on winning the Category One litigation. The decision to not make some of the attorney’s fees contingent on the outcome of the Category One litigation recognizes the considerable time and effort already expended by class counsel and the concessions they have negotiated from Koch regarding Category One claims.

[¶ 30] Relying on the United States Supreme Court decision in Boeing Co. v. Van Gemert, 444 U.S. 472, 100 S.Ct. 745, 62 L.Ed.2d 676 (1980), the plaintiffs assert it was error for the district court to limit the amount of attorney fees based upon the amount distributed to class members filing timely claims rather than based upon the entire $18 million settlement pool of funds.

[¶ 31] The question presented in Boeing Co., 444 U.S. at 477, 100 S.Ct. 745, was whether a proportionate share of fees awarded to lawyers who represented the successful class may be assessed against the unclaimed portion of the fund created by the judgment. The defendant, Boeing Company, asserted attorney fees could only be awarded from the actual claimed funds:

Boeing appealed only one provision of the judgment. It claimed that attorney’s fees could not be awarded from the unclaimed portion of the judgment fund for at least two reasons. First, the equitable doctrine that allows the assessment of attorney’s fees against a common fund created by the lawyers’ efforts was inapposite because the money in the judgment fund would not benefit those class members who failed to claim it. Second, because Boeing had a colorable claim for the return of the unclaimed money, awarding attorney’s fees from those funds might violate the American rule against shifting fees to the losing party. Therefore, Boeing contended, the District Court should award attorney’s fees from only the portion of the fund actually claimed by class members.

The United States Supreme Court concluded attorneys representing a successful class are entitled to fees from the fund as a whole, not just claimed funds:

Since the decisions in Trustees v. Greenough, 105 U.S. 527, 26 L.Ed. 1157 (1881), and Central Railroad & Banking Co. v. Pettus, 113 U.S. 116, 5 S.Ct. 387, 28 L.Ed. 915 (1885), this Court has recognized consistently that a litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney’s fee from the fund as a whole. See Mills v. Electric Auto-Lite Co., 396 U.S. 375, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970); Sprague v. Ticonic National Bank, 307 U.S. 161, 59 S.Ct. 777, 83 L.Ed. 1184 (1939); cf. Hall v. Cole, 412 U.S. 1, 93 S.Ct. 1943, 36 L.Ed.2d 702 (1973). The common-fund doctrine reflects the traditional practice in courts of equity, Trustees v. Greenough, supra, 105 U.S. at 532-537, and it stands as a well-recognized exception to the general principle that requires every litigant to bear his own attorney’s fees, Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. at 257-258, 95 S.Ct. 1612....
Once the class representatives have established the defendant’s liability and the total amount of damages, members of the class can obtain their share of the recovery simply by proving their individual claims against the judgment fund. This benefit devolves with certainty upon the identifiable persons whom the court has certified as members of the class. Although the full value of the benefit to each absentee member cannot be determined until he presents his claim, a fee awarded against the entire judgment fund will shift the costs of litigation to each absentee in the exact proportion that the value of his claim bears to the total recovery....
Their right to share the harvest of the lawsuit upon proof of their identity, whether or not they exercise it, is a benefit in the fund created by the efforts of the class representatives and their counsel. Unless absentees contribute to the payment of attorney’s fees incurred on their behalves, they will pay nothing for the creation of the fund and their representatives may bear additional costs.

Boeing Co., 444 U.S. at 478-480, 100 S.Ct. 745.

[¶ 32] However, in Boeing, the United States Supreme Court did not hold it would be improper for a court, in determining the amount of reasonable attorney fees to award, to consider not only the available settlement fund, but also the amount of actual claims on the fund. The Boeing decision did not address that issue, and Justice Sandra Day O’Connor, writing separately in a denial of a petition for writ of certiorari in International Precious Metals Corp. v. Waters, 530 U.S. 1223, 1223-224, 120 S.Ct. 2237, 147 L.Ed.2d 265 (2000), clarified that the issue was not decided in Boeing:

This case involves an award of attorney’s fees that, by any measure, is extraordinary. Respondents brought a securities class action, alleging that petitioners had fraudulently solicited and stimulated excessive trading of commodities options. The parties ultimately settled the suit, whereby petitioners agreed to create a $40 million “rever-sionary fund” for the class plaintiffs. Under the terms of the settlement, the portion of the fund not claimed by class members and not paid to respondents in attorney’s fees and expenses was to revert to petitioners.
After the parties reached their agreement, the District Court approved respondents’ application for attorney’s fees in the amount of $13,333,333, or one-third of the reversionary fund. The figure was unrelated to the amount actually claimed by class plaintiffs. As it later turned out, the actual distribution to class members was $6,485,362.15. Accordingly, the fee award approved by the District Court was more than twice the amount of the class’ actual recovery. ...
In Boeing Co. v. Van Gemert, 444 U.S. 472, 100 S.Ct. 745, 62 L.Ed.2d 676 (1980), we upheld an award of attorney’s fees in a class action where the award was based on the total fund available to the class rather than the amount actually recovered. Id., at 480-481, 444 U.S. 472, 100 S.Ct. 745, 62 L.Ed.2d 676. We had no occasion in Boeing, however, to address whether there must at least be some rational connection between the fee award and the amount of the actual distribution to the class. The approval of attorney’s fees absent any such inquiry could have several troubling consequences. Arrangements such as that at issue here decouple class counsel’s financial incentives from those of the class, increasing the risk that the actual distribution will be misalloeated between attorney’s fees and the plaintiffs’ recovery. They potentially undermine the underlying purposes of class actions by providing defendants with a powerful means to enticing class counsel to settle lawsuits in a manner detrimental to the class. And they could encourage the filing of needless lawsuits where, because the value of each class member’s individual claim is small compared to the transaction costs in obtaining recovery, the actual distribution to the class will inevitably be minimal....
Although I believe this issue warrants the Court’s attention, this particular case does not present a suitable opportunity for its resolution.

See also Duhaime v. John Hancock Mut. Life Ins. Co., 989 F.Supp. 375, 379 (D.Mass.1997) (proportionality of attorney fee to the relief actually accruing to the class is an important consideration in assessing the reasonableness of the fee award); Van Gemert v. Boeing Co., 590 F.2d 433, 441 (2nd Cir.1978) (in determining fair compensation for class action attorneys the judge may take into account the number of plaintiffs likely to claim from the common fund but the claimed portion of the fund does not place a ceiling on the fee), aff'd, 444 U.S. 472, 100 S.Ct. 745, 62 L.Ed.2d 676 (1980).

[¶33] Here, the district court considered all of the relevant factors in determining the amount of attorney fees to award. On this record, we are not persuaded the district court abused its discretion in considering the relationship of the size of the attorney fees awarded with the amount of funds actually distributed to class members filing timely claims.

[¶ 34] The plaintiffs also assert the district court erred in evaluating the customary fees of local attorneys when the court stated that $175 per hour was “on the high end” of the customary fees charged. The plaintiffs’ summary of fees and costs shows attorney fees earned on an hourly basis totaling $2,837,863 for 16,295.48 attorney hours worked. That computes to an hourly rate of $174.15. With regard to this average hourly wage, the district court stated:

The average of almost $175 an hour for attorney fees is on the high end of the customary hourly fee in this area but of course the average hourly fee would not be for similar legal services because local practitioners are not often involved in class action lawsuits making comparison of the hourly rate difficult to make.

We cannot understand how the plaintiffs can predicate error on this statement by the district court, when the court awarded attorney fees based upon the hourly rate of $174.15 submitted to the court and requested by the plaintiffs. In addition to awarding the plaintiffs the total amount of earned attorney fees and paralegal fees requested on an hourly basis, the court awarded an additional $264,732.50 in attorney fees to reflect the complexity of the litigation and the benefit conferred on the class. The result was a total attorney fee award of $3,930,172 (including paralegal fees), which constitutes 21.83 percent of the total common fund of $18 million available for claims.

[¶ 35] When considering a request for attorney fees in a class action lawsuit, the court takes on a fiduciary role on behalf of the class members:

When an attorney makes a claim for fees from a common fund, his interest is “adverse to the interest of the class in obtaining recovery because the fees come out of the common fund set up for the benefit of the class.” Rawlings v. Prudential-Bache Properties, Inc., 9 F.3d 513, 516 (6th Cir.1993). This divergence of interests requires a court to assume a fiduciary role when reviewing a fee application, because there is often no one to argue for the interests of the class: class members with small individual stakes in the outcome will often fail to file objections because they lack the interest or resources to do so.... Thus ... a court must act as a fiduciary for the beneficiaries of a common fund, weighing the appropriate interests of the beneficiaries in light of the efforts of counsel on their behalf.

In re Copley Pharm., Inc., 1 F.Supp.2d 1407, 1409 (D.Wyo.1998). In response to the plaintiffs’ argument that the district court’s authority in reviewing attorney fees in a class action is limited by an arm’s length settlement agreement among the parties, the Fifth Circuit Court of Appeals stated in Strong v. BellSouth Telecomm., Inc., 137 F.3d 844, 849 (5th Cir.1998):

Counsel’s position underestimates, however, the scope of the court’s duty under Rule 23 to protect absent class members and to police class action proceedings. This duty is not limited to a review of the substantive claims included in the agreement. Instead, the “duty to investigate the provisions of the suggested settlement includes the obligation to explore the manner in which fees of class counsel are to be paid and the dollar amount for such services.” Foster v. Boise-Cascade, Inc., 420 F.Supp. 674, 680 (S.D.Tex.1976), aff'd, 577 F.2d 335 (5th Cir.1978). To fully discharge its duty to review and approve class action settlement agreements, a district court must assess the reasonableness of the attorneys’ fees. See Piambino v. Bailey, 610 F.2d 1306, 1328 (5th Cir.1980). “The purpose of this salutary requirement is to protect the nonparty members of the class from unjust or unfair settlements affecting their rights” as well as to minimize conflicts that “may arise between the attorney and the class, between the named plaintiffs and the absentees, and between various subclasses.” Id. at 1327-28. Moreover, the court’s examination of attorneys’ fees guards against the public perception that attorneys exploit the class action device to obtain large fees at the expense of the class.

[¶ 36] We are convinced the district court took seriously its duty to assess reasonable attorney fees for the lawyers representing the successful class while also insuring that the amount awarded was fair and just for all parties involved. We are not persuaded the district court’s award of attorney fees was arbitrary, capricious, or unreasonable, nor are we persuaded the court misinterpreted or misapplied the law in reaching its decision. We, therefore, conclude the court did not abuse its discretion in awarding attorney fees.

V

[¶ 37] We affirm the judgment.

[¶ 38] DALE Y. SANDSTROM, DANIEL J. CROTHERS, MARY MUEHLEN MARING, and CAROL RONNING KAPSNER, JJ., concur.

      . In the settlement agreement the parties defined "Category 1 Class Members" to mean: the following entities and any of their past and present parents, subsidiaries, affiliated corporations and entities, predecessors, successors, and assigns:
      Amoco; Amerada Hess; Chevron; Tenne-co; Koch Exploration; Aviara Energy; BHP; Diamond Shamrock; Total Petroleum; Union Oil Company of California; Phillips; Murphy; Depco; Louisiana Land & Exploration; Jerry Chambers Exploration; Farmers Union Central Exchange; Petroleum, Inc.; Earl Schwartz Co.; Apache; Conoco; Pure Oil Company; Chandler & Associates; Ladd Petroleum: Unicon; and Samedan. With respect to the foregoing, Koch asserts that it has individualized defenses relating to (among other things) the statute of limitations and consent on the ground that the Category 1 Class Members had either actual notice of potential mismeasurement claims against Koch, or the ability and opportunity to have discovered any mismeasurement by Koch during the time period in question.
      The parties defined "Category 2 Class Members” to mean "all Class Members who are not Category 1 Class Members.”


source: Caselaw Access Project

author: CROTHERS, Justice.

license: Public Domain

text:
    2007 ND 161
    STATE of North Dakota, Plaintiff and Appellee v. Jade Dean HEMMES, Defendant and Appellant.
    Nos. 20070010, 20070011.
    Supreme Court of North Dakota.
    Oct. 16, 2007.

      Peter D. Welte (appeared), State’s Attorney, and Derick Roller (argued), third-year law student, appearing under the rule on the limited practice of law by law students, Grand Forks, ND, for plaintiff and appellee.
    Darla Jane Sehuman, Grand Forks, ND, for defendant and appellant.
   CROTHERS, Justice.

[¶ 1] Jade Dean Hemmes appeals from the district court’s order revoking probation. We affirm, concluding the district court did not err by revoking probation or by denying Hemmes’ transcript request.

I

[¶ 2] Hemmes pleaded guilty to theft of property on May 12, 2000. He was sentenced to one year in prison, which was suspended, supervised probation for five years and payment of restitution. Probation was subject to compliance with conditions, including participating in a treatment program, reporting to a probation officer, avoiding drugs and alcohol, and refraining from violating federal, state, and local laws.

[¶ 3] Hemmes did not comply with the probation order. On November 27, 2006, Hemmes admitted probation violations including drinking, failing to pay restitution, committing disorderly conduct and assault, and failing to report to his probation officer. He denied failing to comply with the treatment program requirement.

[¶ 4] The district court found Hemmes had been “negatively terminated” from the program. Hemmes argues this finding was based on a memorandum sent to the probation office by an employee of the assessment center. The memorandum, as read into the record by a corrections officer, characterizes Hemmes as uncooperative and argumentative with center staff and alleges he threatened suicide. Hem-mes appeals the use of the memorandum because, despite his discovery requests, he did not receive a copy before the revocation hearing. He also argues the court improperly based its findings on the memorandum when neither the author nor the recipient of the memorandum were present to testify. Finally, Hemmes contends he was improperly denied transcripts from previous probation revocation hearings.

II

[¶ 5] Hemmes relies on Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), arguing the district court erred by using information contained in the memorandum to revoke his probation because the memorandum had not been provided to him for review during discovery. The State argues the memorandum is not within the scope of Brady because it is inculpatory and Brady necessitates discovery only of exculpatory documents.

[¶ 6] Brady states: “[T]he suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution.” 373 U.S. at 87, 83 S.Ct. 1194. To establish a Brady violation, the defendant must prove:

(1) the government possessed evidence favorable to the defendant; (2) the defendant did not possess the evidence and could not have obtained it with reasonable diligence; (3) the prosecution suppressed the evidence; and (4) a reasonable probability exists that the outcome of the proceedings would have been different if the evidence had been disclosed.

Syvertson v. State, 2005 ND 128, ¶ 6, 699 N.W.2d 855 (quoting State v. Goulet, 1999 ND 80, ¶ 15, 593 N.W.2d 345). Hemmes states knowledge of the memorandum would have been helpful for impeachment purposes and thus was favorable to the defendant under City of Grand Forks v. Ramstad, 2003 ND 41, ¶ 10, 658 N.W.2d 731 (stating impeaching evidence is included under the first element of the Brady violation test).

[¶ 7] Hemmes offers no authority supporting his conclusion Brady applies to probation revocation proceedings. Further, this Court found no explicit authority from any jurisdiction applying Brady to similar circumstances. See L. Douglas Pipes & William E. Gagen, California Criminal Discovery § 1:115 (3d ed.2006) (stating Brady likely does not apply to probation and parole revocation proceedings). Thus, this is an issue of first impression before this Court. While some courts have mentioned Brady in revocation decisions, they have offered no guidance as to whether the Brady standard is mandatory in such hearings. E.g., United States v. Quiroz, 374 F.3d 682, 684 (8th Cir.2004) (rejecting a Brady argument in a probation proceeding because it was not raised before the lower court and because probationer could not show an effect upon her substantial rights); United States v. Zavala, 839 F.2d 523, 528 (9th Cir.1988) (rejecting Brady claim because the probationer had alternative sources for the documentation). Other courts have explicitly held Brady does not apply to probation revocation proceedings. See State v. Hill, 368 S.C. 649, 630 S.E.2d 274, 279 (2006) (holding Brady does not apply in revocation proceedings because of the lower eviden-tiary threshold); Poole v. State, 167 Ga.App. 321, 306 S.E.2d 394, 395 (1983) (holding a revocation proceeding is not a criminal trial and Brady does not apply); Baltimore v. State, 165 Ga.App. 741, 302 S.E.2d 427, 428 (1983) (holding the trial court did not err in denying a Brady motion because a revocation is not a criminal trial). The language of the Brady decision supports this latter approach.

[¶ 8] Brady states: “A prosecution that withholds evidence on demand of an accused which, if made available, would tend to exculpate him or reduce the penalty helps shape a trial that bears heavily on the defendant.” 373 U.S. at 87-88, 83 S.Ct. 1194 (emphasis added). “Society wins not only when the guilty are convicted but when criminal trials are fair; our system of the administration of justice suffers when any accused is treated unfairly.” Id. at 87, 83 S.Ct. 1194 (emphasis added). Brady’s emphasis on those accused of crimes suggests the application of Brady ceases after the trial stage.

[¶ 9] This is not to say that probationers are without rights. Those rights, however, are limited because probation revocation is not a stage of a criminal prosecution and because of the State’s “overwhelming interest in being able to return the individual to imprisonment without the burden of a new adversary criminal trial.... ” State v. Wardner, 2006 ND 256, ¶ 18, 725 N.W.2d 215. The minimum rights afforded to a probationer include:

written notice of the claimed violations of his probation; disclosure of the evidence against him; an opportunity to be heard in person and to present witnesses and documentary evidence; a neutral hearing body; and a written statement by the factfinder as to the evidence relied on and the reasons for revoking probation.

Id. While Wardner mandates disclosure of evidence adverse to the probationer, this is not the same standard as the Brady requirement, which addresses evidence favorable to the probationer. This Court declines to extend the requirements of Brady to probation revocation proceedings.

Ill

[¶ 10] Hemmes argues the contents of the memorandum.also should have been provided to him under N.D.R.Crim.P. 16, which outlines the evidentiary disclosure requirements in criminal proceedings. The State argues the memorandum is an internal prosecution document and therefore not subject to discovery. Rule 16, N.D.R.Crim.P, mandates that the prosecution must allow the defendant, at his written request, to inspect any documents material to preparing a defense. N.D.R.Crim.P. 16(a)(1)(D). Internal prosecution documents are not discoverable, but this applies only when discovery is not otherwise mandatory under the rule. N.D.R.Crim.P. 16(a)(2). Documentation may be exempt from discovery if it is prepared specifically for the prosecutor’s investigation. State v. Skipton, 339 N.W.2d 87, 89 (N.D.1983).

[¶ 11] The North Dakota Rules of Criminal Procedure do not explicitly state that revocation proceedings are within their scope, but N.D.R.Crim.P. 1 provides: “These rules govern the practice and procedure in all criminal proceedings ....” N.D.R.Crim.P. 1(a) (emphasis added). We have cautioned that “[probation revocation ... is not a stage of a criminal prosecution”', such hearings are included under criminal proceedings. See Wardner, 2006 ND 256, ¶ 18, 725 N.W.2d 215 (emphasis added). Rule 1, N.D.R.Crim.P., specifies the criminal proceedings that are excepted from the authority of the rules, including habeas corpus and extradition proceedings. Probation revocation hearings are not enumerated as an exception. Notably, the procedure for revoking probation is described in N.D.R.Crim.P. 32(f), further indicating the revocation process falls within the scope of the rules.

[¶ 12] Prior to the probation revocation proceeding, Hemmes demanded access to all relevant' documentation ' under N.D.R.Crim.P. 16. The State does not dispute this, but argues the memorandum was withheld because it was1 an internal ■prosecution document exempt from discovery under N.D.R.Crim.P. 16(a)(2). The State further argues the memorandum is an internal prosecution document, because the author was a potential prosecution witness and the recipient was an agent of the State. This argument fails because the record is devoid of evidence showing the memorandum was drafted upon request of the prosecutor or that it was prepared for the probation revocation hearing. Even if the memorandum qualified as an internal prosecution document under N.D.R.Crim.P. 16(a)(2), the exception applies only when the document is not subject to mandatory disclosure under N.D.R.Crim.P. 16(a)(1). Rule 16(a)(1), N.D.R.Crim.P., mandates the prosecution allow the defendant to inspect any documents material to preparing a defense. N.D.R.Crim.P. 16(a)(1)(D). The memorandum is discoverable because the prosecution directly relied on its contents to argue that Hemmes refused to cooperate with the treatment program. We therefore agree that N.D.R.Crim.P. 16 applies to probation revocation proceedings and that Hemmes should have been provided access to the memorandum pursuant to his request. However, the error caused by this omission is harmless.

[¶ IB] “Any error, defect, irregularity or variance that does not affect substantial rights must be disregarded.” N.D.R.Crim.P. 52(a). While the document should have been provided to Hemmes, the contents of the memorandum involve only one of numerous probation violations. Hemmes admitted all other violations, providing sufficient grounds for revocation.

[¶ 14] In a related argument, Hemmes claims the memorandum was improperly used because neither the author nor the recipient of the memorandum were available to testify at his probation revocation hearing. Because the hearsay rule does not apply to revocation hearings, this argument is without merit. See State v. Anderson, 308 N.W.2d 98, 99 (N.D.1981).

[¶ 15] Relying on State v. Chapin, 429 N.W.2d 16, 18-19 (N.D.App.1988), Hemmes further contends the district court relied excessively on the memorandum when making the revocation decision. We concluded in Chapin it is improper for a court to delegate its sentencing authority to an addiction evaluator. Id. at 19. However, “a trial court may utilize an addiction evaluation to advise it in making a sentencing determination, [but] that determination must be made by the court alone after fair and full consideration of the circumstances of the defendant.” Id. Here, there is no evidence the district court improperly delegated authority to revoke Hemmes’ probation. Rather, the court considered information in the memorandum together with Hemmes’ admitted violations to revoke probation.

IV

[¶ 16] As part of his appeal of the district court’s order, Hemmes contends he should have been provided with transcripts of all his previous probation revocation hearings at State expense because the district court mentioned the previous hearings in its findings. Hemmes argues that previous petitions for revocation were based only on his inability to pay restitution and that he could not prove this fact without access to the transcripts from the prior proceedings. The State argues Hemmes does not provide a sufficient showing of need for the transcript.

[¶ 17] Hemmes’ underlying assertion is false. The petition for revocation filed May 12, 2004 was based on failure to pay restitution and on an aggravated assault Hemmes committed in 2002. Regardless, all of the petitions and orders adjudicating the petitions appear within the record. The circumstances surrounding previous revocation proceedings are apparent without the production of a written transcript. The district court therefore did not abuse its discretion denying Hemmes transcripts of the prior revocation proceedings.

V

[¶ 18] The district court’s order revoking Hemmes’ probation and denying Hem-mes’ transcript request is affirmed.

[¶ 19] GERALD W. VANDE WALLE, C.J., and DALE V. SANDSTROM, J., concur.

KAPSNER, Justice, concurring in the result.

[¶ 20] I concur in the result, but do not join in the unnecessary holding in Part II that Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963) does not apply to probation revocation proceedings. Regardless of whether Brady does or should apply in the revocation setting, Hemmes has not established a Brady violation.

[¶ 21] I join in Parts III and IV of the majority opinion.

[¶ 22] Mary Muehlen Maring, J., concurs.


author: KAPSNER, Justice.

text:
    2007 ND 164
    STATE of North Dakota, Plaintiff and Appellee v. Andrea BARENDT, Defendant and Appellant.
    No. 20060370.
    Supreme Court of North Dakota.
    Oct. 16, 2007.
    Rehearing Denied Dec. 13, 2007.

      Lonnie Olson (argued), State’s Attorney, Devils Lake, ND, for plaintiff and appellee.
    Ulysses S. Jones (argued), Jones Law Office, Devils Lake, ND, for defendant and appellant.
   KAPSNER, Justice.

[¶ 1] Andrea Barendt appeals from a criminal judgment following a bench trial for Misapplication of Entrusted Property, a class B felony. Andrea Barendt argues her conviction should be overturned because the State failed to prove every element of the offense beyond a reasonable doubt. Andrea Barendt further contends that, even if sufficient evidence existed to support her conviction, the conviction was against the weight of the evidence. We hold sufficient evidence existed to support the verdict, and Andrea Barendt’s challenge to the weight of the evidence was not properly preserved for appeal. Therefore, we affirm the criminal judgment.

I.

[¶ 2] On April 12, 2002, Ada Barendt executed a general durable power of attorney (“POA”) naming her granddaughter, Andrea Barendt, as her attorney-in-fact. When Ada Barendt gave Andrea Barendt the POA, Ada Barendt was in her eighties and her health was declining. The POA contained a variety of enumerated powers, which allowed for the acquisition, sale, or transfer of Ada Barendt’s property, the use of her financial accounts, and one provision provided that the attorney-in-fact had the authority

[t]o embark upon any program of gifts to my children and their lawful descendants and to continue any program of gifts which I may have commenced and to make transfers in furtherance of any ... pattern of gifts.

The instrument explicitly provided the powers were to be exercised by the attorney-in-fact “for [Ada Barendt’s] benefit.”

[¶ 3] In February 2004, Ada Barendt moved to Good Samaritan, a nursing home, in Devils Lake. At first, Ada Barendt’s Good Samaritan bills and treatment were covered by Medicare because she required a specific type of therapy. After this treatment was no longer necessary, her Medicare coverage ceased. Ada Barendt continued to stay at Good Samaritan, and her personal responsibility for facility bills began. She also began to incur substantial bills for prescriptions at Thrifty White Drug pharmacy.

[¶ 4] Good Samaritan sent Andrea Bar-endt the bills for Ada Barendt’s treatment and care, with the knowledge that Andrea Barendt was Ada Barendt’s attorney-in-fact. For an extended period of time, Andrea Barendt failed to pay Ada Bar-endt’s Good Samaritan bills. After several failed attempts to collect the balance due for Ada Barendt’s care, ■ Good Samaritan was able to contact Andrea Barendt in August 2004, and she paid $18,000 to Good Samaritan in September 2004. At this point, Ada Barendt’s bill for her stay at Good Samaritan had reached approximately $79,000, leaving an unpaid balance of approximately $51,000. Thrifty White Drug also contacted Good Samaritan around this time, explaining Ada Barendt’s unpaid prescription bills had reached approximately $4,000, and the pharmacy was concerned it may have to stop issuing Ada Barendt her prescriptions.

[¶ 5] Good Samaritan contacted the Ramsey County Public Administrator (“Public Administrator”) to explain Ada Barendt’s bills were accumulating and if they remained unpaid, Good Samaritan would have to remove Ada Barendt from the facility. The Public Administrator sought an emergency guardianship and conservatorship. Ada Barendt was placed under temporary guardianship and conser-vatorship in July 2005.

[¶ 6] After receiving guardianship and conservatorship, the Public Administrator conducted an accounting of Ada Barendt’s funds. In the accounting, the Public Administrator discovered numerous transactions he believed had not been undertaken for the benefit of Ada Barendt. The Public Administrator turned over his accounting to the Devils Lake Police Department.

[¶7] Devils Lake Police Department contacted the police in Mattoon, Illinois, where Andrea Barendt resided during the time she served as Ada Barendt’s attorney-in-fact. Lieutenant Taylor of the Mattoon Police interviewed Andrea Bar-endt regarding possible theft. According to the officer’s testimony at trial, Andrea Barendt admitted during the interview to misappropriation of Ada Barendt’s funds, stating she spent money on the purchase of a pick-up truck, illegal drugs, and gambling. Lieutenant Taylor testified about the discovery of a cashier’s check, drawn by Andrea Barendt against Ada Barendt’s account in the amount of $50,000, made payable to Andrea Barendt. Andrea Bar-endt testified she placed these funds in a different account bearing only her name. Devils Lake Police Captain Nannette Martin testified about trial exhibit summaries compiled to demonstrate Andrea Barendt’s ATM withdrawals from Ada Barendt’s account from 2003 to 2005. She testified the ATM withdrawals exceeded $30,000 during this period. She testified thousands of dollars in checks were drawn against Ada Barendt’s account, which Andrea Barendt had made payable to herself, cash, or other facilities to which she owed her personal debts.

[¶ 8] Andrea Barendt was charged with felony Misapplication of Entrusted Property under N.D.C.C. § 12.1-23-07. She was convicted after a bench trial in November 2006. She appeals the conviction.

II.

A. Sufficiency of the Evidence

[¶ 9] When reviewing challenges to the sufficiency of the evidence, this Court draws all inferences in favor of the verdict. E.g., State v. Lusby, 1998 ND 19, ¶ 5, 574 N.W.2d 805. “ ‘This [C]ourt will reverse a criminal conviction only if, after viewing the evidence and all reasonable evidentiary inferences in the light most favorable to the verdict, no rational factfinder could have found the defendant guilty beyond a reasonable doubt.’ ” Id. (quoting State v. Olson, 552 N.W.2d 362, 364 (N.D.1996)).

[¶ 10] Andrea Barendt was charged with Misapplication of Entrusted Property under N.D.C.C. § 12.1-23-07; the charge contains seven elements. State v. Jelliff, 251 N.W.2d 1, 3, 7 (N.D.1977) (citing N.D.C.C. § 12.1-23-07 and providing this charge requires the State to prove (1) the disposal, use, or transfer; (2) of any interest in property; (3) which has been entrusted to defendant; (4) as a fiduciary; (5) in a manner he knows is not authorized; (6) and that he knows to involve a risk of loss or detriment to; (7) the owner of the property). Andrea Barendt challenges the sufficiency of evidence with regard to two of the elements. She contends there was insufficient evidence to prove she had knowledge her purchases and account withdrawals were not authorized at the time they were made. She also argues the evidence is insufficient to show she knew such purchases and account withdrawals involved a risk of loss or detriment to Ada Barendt’s property.

[¶ 11] Andrea Barendt contends the account withdrawals and the purchases were authorized because the general durable POA contained a “laundry list” of powers, which authorized her to do anything Ada Barendt could do. She further argues that if her acts were not actually authorized by the powers conferred to her in the POA, the State failed to provide sufficient evidence for a reasonable factfinder to infer she had knowledge that she acted in an unauthorized manner, therefore defeating the knowledge requirement of the unauthorized act element.

[¶ 12] A power of attorney is a written legal instrument authorizing another to act as one’s agent; the agent holding the power of attorney is the attorney-in-fact. Estate of Littlejohn, 2005 ND 113, ¶ 7, 698 N.W.2d 923 (citing Estate of Mehus, 278 N.W.2d 625, 629 (N.D.1979)). “Because a power of attorney creates an agency relationship, agency principles are applicable in determining the authority and duties of the attorney in fact.” Id. An agency relationship involves both a contractual and a fiduciary relationship, and the interpretation of an attorney-in-fact’s authority is controlled by the rules for construing contracts, unless the fiduciary relationship requires the application of a different rule. Id. (citing Burlington N. & Sante Fe Ry. Co. v. Burlington Res. Oil & Gas Co., 1999 ND 39, ¶ 15, 590 N.W.2d 433). “The clear and explicit language of a contract governs its interpretation and words are construed in their ordinary sense.” Id.

[¶ 13] Ada Barendt’s POA provided in paragraph one:

I, ADA R. BARENDT ... do hereby appoint my granddaughter, Andrea Bar-endt ... as my attorney-in-fact and agent, in my name and for my benefit. I intend to create a Durable Power of Attorney pursuant to Chapter 30.1-30 of the North Dakota Century Code.

(Emphasis added). The clear and explicit language of the POA requires that acts by the agent be done for the benefit of Ada Barendt. The POA authorized Andrea Barendt to make account withdrawals, transfer funds between accounts, and even to purchase property using Ada Barendt’s funds, but such acts were authorized only to the extent to which they were done for the benefit of Ada Barendt.

[¶ 14] Andrea Barendt admitted during her testimony at trial she gambled with some of the money she withdrew from her grandmother’s account. Andrea Barendt testified she purchased a pick-up truck with her grandmother’s money and that she, and not her grandmother, enjoyed the benefits of using the vehicle. Lieutenant Taylor testified Andrea Barendt admitted to using a considerable amount of Ada Barendt’s money on various types of illegal drugs. The statements regarding drug purchases were also recorded in the police report admitted into evidence, although Andrea Barendt denied having made such statements. Andrea Barendt testified she used Ada Barendt’s funds to pay her own personal debts. Evidence presented at trial demonstrated that at the time Andrea Barendt was paying her own debts, Ada Barendt’s debts were going unpaid. Andrea Barendt also withdrew $50,000 in the form of a cashier’s check and deposited the check into an account bearing only her name. She testified she took the money to fund her own start-up eBay internet business. Based upon the evidence presented at trial, a factfinder could reasonably infer Andrea Barendt knew the withdrawal and expenditure of Ada Barendt’s funds was unauthorized when she withdrew and spent the funds because one could infer she knew these acts were not undertaken to benefit Ada Barendt.

■ [¶ 15] Section 12.1-23-07, N.D.C.C., requires the defendant know of the risk of loss or detriment to property. The money withdrawn for gambling was subject to a risk of loss by the very nature of the use of the money. Purchasing illegal drugs with Ada Barendt’s funds caused detriment to the total balance. Andrea Barendt’s other withdrawals and checks for payment of her personal bills detrimentally affected Ada Barendt’s account funds. A reasonable factfinder could also infer that withdrawing a $50,000 cashier’s check to start her own eBay store put Ada Barendt’s funds at risk. For all of these reasons, there was sufficient evidence to infer Andrea Barendt knew of risk of loss or detriment to Ada Barendt’s property at the times she withdrew and spent Ada Barendt’s funds.

[¶ 16] Andrea Barendt contends the POA clearly and explicitly provided for her withdrawals and expenditures in paragraph A(13), which allows the attorney-in-fact:

[t]o embark upon any program of gifts to [Ada Barendt’s] children and their lawful descendants and to continue any program of gifts which [she] may have commenced and to make transfers in furtherance of any estate plan or pattern of gifts.

[¶ 17] Based on this provision, Andrea Barendt argues her actions were expressly authorized because she testified her grandmother had created a pattern of gifting money, paying personal bills, and providing vehicles for Andrea Barendt and Andrea Barendt’s father before the POA was in place. Thus, she argues her transactions amounted only to the continuance or furtherance of a gifting program her grandmother created before the POA was in place. She argues the State did not directly refute her testimony with regard to Ada Barendt’s alleged practice of gifting, and therefore there was insufficient evidence to prove she knew the withdrawal and expenditure of Ada Barendt’s funds was unauthorized. While Andrea Barendt couches the challenge in terms of eviden-tiary sufficiency, it is actually a challenge to the credibility of the evidence.

[¶ 18] The judge in a bench trial is the factfinder, and the judge makes determinations of credibility. See, e.g., State v. Cox, 325 N.W.2d 181, 183 (N.D.1982) (“The trial court, as the fact-finder in [a bench trial] ... [is] the ultimate judge of the credibility of witnesses.”). Because the factfinder may make determinations regarding the credibility of witnesses, the judge is not required to believe a witness’s testimony, even when no direct evidence is offered to the contrary. See id. With the exception of Andrea Barendt’s testimony, there was no other evidence supporting a pattern of gifts. A reasonable judge or factfinder could have simply determined Andrea Barendt’s testimony lacked credibility and thus inferred no pattern of gifting existed, making her actions unauthorized.

B. Weight of the Evidence

[¶ 19] Andrea Barendt next contends her conviction should be overturned because, even if the evidence is sufficient to support a conviction, the weight the district court judge assigned the evidence was improper.

[¶ 20] Andrea Barendt cites State v. Yineman, 2002 ND 145, ¶¶ 9, 10, 651 N.W.2d 648, for the proposition that this Court “must evaluate for itself the credibility of the evidence” and “acts as a ‘thirteenth juror’ and independently assigns value to and weighs evidence.” Appellant misreads the holding in Yineman, which applies this standard not to appellate courts, but instead to trial court judges when moved to grant a new trial or set aside a jury verdict:

If the [trial] court concludes that, despite the abstract sufficiency of the evidence to sustain the verdict, the evidence preponderates sufficiently heavily against the verdict that a serious miscarriage of justice may have occurred, it may set aside the verdict, grant a new trial, and submit the issues for determination by another jury.

Yineman, at ¶ 9 (quoting U.S. v. Lincoln, 630 F.2d 1313, 1319 (8th Cir.1980)) (alteration in original). The independent determination of credibility applies to trial court judges who have the opportunity to preside over the presentation of evidence and observe witnesses as they testify. State v. Oasheim, 353 N.W.2d 291, 293 (N.D.1984) (“[T]he trial judge may, within limits, weigh the evidence and evaluate for himself the credibility of the witnesses.”) (emphasis added).

[¶ 21] This Court does not sit as a “thirteenth juror” to make independent determinations of credibility of witnesses or other evidentiary weight. “[A]t the appellate level we do not substitute our judgment for that of the jury or trial court where the evidence is conflicting, if one of the conflicting inferences reasonably tends to prove guilt and fairly warrants a conviction.” State v. Bergeron, 326 N.W.2d 684, 687 (N.D.1982) (quoting State v. Olmstead, 246 N.W.2d 888, 890 (N.D.1976)). “Reading a cold transcript is not ‘a substitute for hearing and observing witnesses testify.’ ” Bergeron, 326 N.W.2d at 687 (quoting Olmstead, 246 N.W.2d at 890). This Court cannot “second-guess the trial court’s assessment of the credibility and weight of the evidence.” State v. Hafner, 499 N.W.2d 596, 597 (N.D.1993).

[¶ 22] Due to this inability to directly assess the credibility of evidence, this Court only reviews determinations of credibility by engaging in a review of motions for new trial or motions to set aside a jury verdict, which have been denied or granted by a trial court and subsequently appealed. See, e.g., State v. Lusby, 1998 ND 19, ¶ 7, 574 N.W.2d 805. In doing so, this Court does not act as a “thirteenth juror” to weigh the evidence, but applies an abuse of discretion standard in determining whether the trial court properly decided a motion for new trial or to set aside a jury verdict. See id. (reviewing the denial of a motion for new trial and applying an abuse of discretion standard, but not independently assessing the credibility of evidence presented at trial); State v. Oasheim, 353 N.W.2d at 293 (“A trial court may, however, grant a new trial if it determines that the verdict, although supported by legally sufficient evidence, is against the great weight of the evidence .... A motion for new trial on the ground that the verdict is against the weight of the evidence is a matter resting within the sound discretion of the trial court ... [and] will not be set aside unless an abuse of discretion is shown.”). In a bench trial, absent an appeal from a trial court’s decision regarding a motion for new trial, this Court may not attempt to review any decisions related to the weight of the evidence. Bergeron, 326 N.W.2d at 687 (even where conflicting evidence exists, if one of the inferences to be drawn reasonably points to guilt, the appellate court will not substitute its judgment, based only upon “reading a cold transcript,” for the credibility determinations made by a jury or judge in a bench trial). At the end of the trial, Andrea Barendt did not make a motion for new trial. Thus, this Court has no ability to review any motions or issues challenging the weight and credibility of the evidence and the issue has not been properly preserved for appeal.

[¶23] Therefore, we affirm the criminal judgment.

[¶ 24] GERALD W. VANDE WALLE, C.J., MARY MUEHLEN MARING, DANIEL J. CROTHERS, and DALE Y. SANDSTROM, JJ., concur.

      . Further, although the inference that the factfinder determined such evidence lacked credibility would follow from the finding of guilty, the judge in this bench trial made an unusual finding, relating directly to Andrea Barendt’s credibility on this issue:
      It was raised as a defense that the funds that were given to Andrea Barendt were gifts from Ada Barendt, and I do want to make a specific finding that the transactions do not reflect gifts ... as it was Andrea Barendt converting cash to herself or others for the benefit of herself. That's my finding of fact.

      [H]er testimony with regard to gifts I do not find believable.


text:
    2007 ND 165
    Kylan Dennis SAYLER, Plaintiff and Appellant v. NORTH DAKOTA DEPARTMENT OF TRANSPORTATION, Defendant and Appellee.
    No. 20070101.
    Supreme Court of North Dakota.
    Oct. 16, 2007.

      Michael Ray Hoffman, Bismarck, N.D., for plaintiff and appellant.
    Andrew Moraghan, Assistant Attorney General, Office of Attorney General, Bismarck, N.D., for defendant and appellee.
   KAPSNER, Justice.

[¶ 1] Kylan Sayler appealed from a district court judgment affirming an administrative hearing officer’s decision to suspend Sayler’s driver’s license for two years. We affirm, concluding the Department of Transportation (“Department”) filed the administrative hearing transcript with the district court within 20 days of receiving Sayler’s notice of appeal and the police officer properly seized and arrested Sayler for driving under the influence.

I

[¶ 2] On July 14, 2006, Bismarck police officer Scott Betz was on patrol when he received a dispatch to investigate a citizen’s tip regarding a possible drunk driver in a vehicle that was being driven erratically swerving into lanes of on-coming traffic. The citizen had used a cell phone to call the Bismarck police department, which transferred the call to a 911 operator. In addition to describing the erratic driving, the citizen described the suspect’s vehicle and license plate number, and she followed the vehicle until she observed it pull into a driveway. The citizen also observed two police cars arrive at the location and saw the police talking to the driver of the car.

[¶ 3] Officer Betz testified that at the time of the dispatch, he was two seconds away from the street where the suspect vehicle was reportedly located. Officer Betz testified he observed a vehicle just pull into a driveway and no other traffic on the street. Officer Betz also testified he saw a man getting out of the car as he pulled up in his patrol car. Officer Betz testified the vehicle had the same plate numbers dispatch had given out. According to Officer Betz, he then got out of his patrol car and said “Hi” to the man who was then standing in his yard, and the man, later identified as Sayler, responded, “Hi.” Officer Betz testified he then asked Sayler if he could speak with him and Sayler responded that he could. Officer Betz testified that during the conversation, Sayler admitted he had just pulled into his driveway and had been drinking that night. Officer Betz described Sayler’s eyes as bloodshot and glossy.

[¶ 4] Officer Betz testified Sayler then agreed to take the “horizontal gaze nystag-mus” test, which he failed, and Sayler had difficulty following instructions for the “walk and turn” test. Officer Betz testified that at this point, Sayler stated, “I’m drunk.” Sayler was arrested for driving under the influence and transported to the police department where Sayler failed an Intoxilyzer test with a .24 percent blood alcohol concentration.

[¶ 5] Officer Betz issued Sayler a Report and Notice form, including a temporary operator’s permit. Sayler requested an administrative hearing before the Department. After an August 2006 hearing, an administrative hearing officer issued findings of fact, conclusions of law, and an order suspending Sayler’s driving privileges for two years. The district court affirmed the suspension.

II

[¶ 6] This Court’s review of a decision to suspend a driver’s license is governed by the Administrative Agencies Practice Act, N.D.C.C. ch. 28-32. Gabel v. North Dakota Dep’t of Transp., 2006 ND 178, ¶ 7, 720 N.W.2d 433. We review the record before the administrative agency and will affirm an agency’s decision unless:

1. The order is not in accordance with the law.
2. The order is in violation of the constitutional rights of the appellant.
3. The provisions of this chapter have not been complied with in the proceedings before the agency.
4. The rules or procedure of the agency have not afforded the appellant a fair hearing.
5. The findings of fact made by the agency are not supported by a preponderance of the evidence.
6. The conclusions of law and order of the agency are not supported by its findings of fact.
7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.
8. The conclusions of law and order of the agency do not sufficiently explain the agency’s rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

N.D.C.C. § 28-32-46.

[¶ 7] On appeal, this Court “review[s] an appeal from the determination of an administrative agency based only on the record filed with the court.” N.D.C.C. § 28-32-46. This Court does “not make independent findings of fact or substitute our judgment for that of the agency” when reviewing an administrative agency’s factual findings. Kiecker v. North Dakota Dep’t of Transp., 2005 ND 23, ¶ 8, 691 N.W.2d 266 (citation omitted). We determine only whether a reasoning mind reasonably could have determined the factual conclusions reached were proved by the weight of the evidence from the entire record. Power Fuels, Inc. v. Elkin, 283 N.W.2d 214, 220 (N.D.1979). As such, we give deference to the Department’s sound findings, but we will review questions of law de novo. Gabel, 2006 ND 178, ¶ 8, 720 N.W.2d 433; see also Huff v. North Dakota State Bd. of Med. Exam’rs, 2004 ND 225, ¶ 8, 690 N.W.2d 221 (“An agency’s decisions on questions of law are fully reviewable.”).

Ill

[¶ 8] Sayler argues the Department’s violation of N.D.C.C. § 39-20-06, by failing to file the administrative hearing transcript within 20 days of receiving Say-ler’s notice of appeal, requires reversal of his license suspension.

[¶ 9] Section 39-20-06, N.D.C.C., states, in relevant part (emphasis added):

Within twenty days after receipt of the notice of appeal, the director or the hearing officer who rendered the decision shall file in the office of the clerk of court to which the appeal is taken a certified transcript of the testimony and all other proceedings.

This Court has explained the 20-day filing period is not jurisdictional, and a violation does not require automatic summary dismissal of a license suspension decision. See May v. Sprynczynatyk, 2005 ND 76, ¶ 15, 695 N.W.2d 196; Rudolph v. North Dakota Dep’t of Transp. Dir., 539 N.W.2d 63, 66 (N.D.1995). In May, at ¶ 15, this Court concluded reversal of a license suspension was not mandated where the Department had filed the transcript two days late because May had failed to allege or prove prejudice. The record in that case also did not establish “a persistent pattern of improper conduct by the Department, but merely a single violation.” Id. at ¶ 18.

[¶ 10] In this case, the hearing officer’s decision suspending Sayler’s license for two years was issued on August 3, 2006. Sayler’s notice of appeal and specifications of error to the district court indicates the notice was mailed to the Department’s legal division on August 7, 2006. This notice of appeal was filed with the district court on August 8, 2006. The record indicates the transcript of the administrative hearing, however, was not filed in the district court until October 27, 2006.

[¶ 11] In the district court, Sayler argued his suspension should be reversed based upon the Department’s failure to file the transcript within 20 days of receipt of the notice of appeal in violation of N.D.C.C. § 39-20-06. In response to SayT ler’s argument, the Department submitted an affidavit of a Department administrative assistant, stating the Department did not receive Sayler’s notice by mail, but instead only received a copy of the notice by facsimile on October 11, 2006. The affidavit further states that after receiving the notice, the Department prepared the transcript in the same manner as all other transcripts and sent the transcript to both the district court and Sayler’s counsel on October 26, 2006. The transcript was ultimately filed in the district court on October 27, 2006.

[¶ 12] In rejecting Sayler’s argument, the district court concluded, in part, that Sayler failed to establish he had suffered prejudice as a result of the Department’s delay in filing the transcript. On appeal to this Court, Sayler argues a two-month delay in filing the transcript supports a presumption of prejudice and typographical errors make the transcript unreliable. Our resolution of this issue, however, relies upon the plain language of N.D.C.C. § 39-20-06.

[¶ 13] Section 39-20-06, N.D.C.C., requires that the director or hearing officer who rendered the decision file a certified transcript “[w]ithin twenty days after receipt of the notice of appeal.” The statute is thus clear that it is the Department’s actual receipt of a notice of appeal which commences the 20-day period, rather than some other event such as service or filing the notice of appeal. The record here reflects the Department actually received the notice of appeal on October 11, 2006, and the administrative transcript was filed in the district court on October 27, 2006. Based upon these dates, we conclude the Department timely filed the transcript within the 20-day period after receipt of the notice of appeal.

[¶ 14] We are concerned, however, regarding the number of typographical errors cited by Sayler in the transcript. Both the district court and this Court on appeal rely upon the accuracy of the transcription of proceedings before the administrative hearing officer. Although we are concerned with the transcript’s errors, none of the errors change the evidence relied upon by the hearing officer in this case. Furthermore, the record does not establish a systemic disregard of the law or persistent pattern of improper conduct by the Department. Cf. May, 2005 ND 76, ¶ 17, 695 N.W.2d 196; Madison v. North Dakota Dep’t of Transp., 503 N.W.2d 243, 246-47 (N.D.1993).

[¶ 15] We therefore reject Sayler’s claim that he is entitled to reversal of the decision suspending his license under N.D.C.C. § 39-20-06.

rv

[¶ 16] On appeal, this Court looks to the record before the administrative agency. Lee v. North Dakota Dep’t of Transp., 2004 ND 7, ¶ 7, 673 N.W.2d 245. Section 39-20-05(2), N.D.C.C., prescribes the issues to be decided at an administrative hearing:

The hearing ... may cover only the issues of whether the arresting officer had reasonable grounds to believe the person had been driving or was in actual physical control of a vehicle in violation of section 39-08-01 or equivalent ordinance ... whether the person was placed under arrest ... whether the person was tested in accordance with section 39-20-01 or 39-20-03 and, if applicable, section 39-20-02; and whether the test results show the person had an alcohol concentration of at least eight one-hundredths of one percent by weight.

[¶ 17] Sayler argues he was subjected to an illegal seizure and arrest. The Department asserts that Officer Betz’s initial conversation with Sayler was not a seizure and that observations after the encounter gave reasonable suspicion or, in the alternative, that Officer Betz received sufficient information from a reliable citizen, providing the requisite suspicion.

[¶ 18] “All searches and seizures must be reasonable, under the Fourth Amendment of the United States Constitution and Article I, Section 8 of the North Dakota Constitution.” State v. Haibeck, 2004 ND 163, ¶ 9, 685 N.W.2d 512. This Court has defined permissible types of law enforcement-citizen encounters, which include:

(1) arrests, which must be supported by probable cause; (2) Terry stops, see Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968), seizures which must be supported by a reasonable and articu-lable suspicion of criminal activity; and (3) community caretaking encounters, which do not constitute Fourth Amendment seizures.

State v. Olson, 2007 ND 40, ¶ 9, 729 N.W.2d 132 (quoting State v. Torkelsen, 2006 ND 152, ¶ 10, 718 N.W.2d 22). A seizure occurs under the Fourth Amendment “when the officer, by means of physical force or show of authority, has in some way restrained the liberty of a citizen.” City of Jamestown v. Jerome, 2002 ND 34, ¶ 5, 639 N.W.2d 478.

“Under Terry, police may, in appropriate circumstances and in an appropriate manner, detain an individual for investigative purposes when there is no probable cause to make an arrest if a reasonable and articulable suspicion exists that criminal activity is afoot.” Torkelsen, 2006 ND 152, ¶ 11, 718 N.W.2d 22 (citing Anderson v. Director, N.D. Dep’t of Transp., 2005 ND 97, ¶ 8, 696 N.W.2d 918). In reviewing whether an investigative stop is valid, we use an objective standard and look to the “totality of the circumstances.” [State v.] Parizek, 2004 ND 78, ¶9, 678 N.W.2d 154. “The question is whether a reasonable person in the officer’s position would be justified by some objective manifestation to suspect the defendant was, or was about to be, engaged in unlawful activity.” Id.

Olson, 2007 ND 40, ¶ 11, 729 N.W.2d 132. In this case, based upon his findings of fact, the hearing officer concluded: “If there was a legal detention of Sayler at all,” it was supported by reasonable suspicion that Sayler was driving while impaired. The hearing officer concluded the citizen’s information was independently corroborated by the officer, which gave him the right to briefly detain Sayler for further investigation. A citizen informant described erratic driving of crossing into lanes of on-coming traffic and gave the color, make and license number of the vehicle. The citizen followed the vehicle to the point where the police arrived to observe the driver exit the vehicle. The police requested to talk with the driver. The officer had reasonable and articulable suspicion the driver had been driving impaired and sufficient reason to make further inquiry. The driver consented to speak to him.

[¶ 19] Probable cause to arrest a driver for driving under the influence exists if the police officer (1) observes some signs of physical or mental impairment, and (2) has reason to believe the driver’s impairment is caused by alcohol. See Presteng v. Director, N.D. Dep’t of Transp., 1998 ND 114, ¶ 7, 579 N.W.2d 212; Baer v. Director, N.D. Dep’t of Transp., 1997 ND 222, ¶ 11, 571 N.W.2d 829. The hearing officer concluded, “Say-ler’s admission that he had been driving moments before, had been drinking, his appearance, failure of the HGN, and statement that ‘I’m drunk’ gave the officer probable cause to arrest Sayler for DUI.”

[¶ 20] Based upon our review of the record, we conclude a reasoning mind reasonably could have determined the hearing officer’s factual findings were proven by the weight of the evidence from the entire record. Further, regardless of whether Officer Betz’s initial conversation with Sayler constituted a seizure for Fourth Amendment purposes, based upon the totality of the circumstances in this record, we conclude Officer Betz had reasonable and articulable suspicion to stop Sayler in his yard to investigate the citizen’s report of erratic driving and a possible drunk driver. We further conclude Officer Betz had probable cause to arrest Sayler for driving under the influence.

V

[¶21] The district court judgment affirming the administrative hearing officer’s decision is affirmed.

[¶ 22] GERALD W. VANDE WALLE, C.J., DALE V. SANDSTROM, DANIEL J. CROTHERS, and MARY MUEHLEN MARING, JJ., concur.