author: STREIT, Justice.

text:
    STATE of Iowa, Appellant v. Codey Thomas MASSENGALE, Appellee.
    No. 06-1466.
    Supreme Court of Iowa.
    Feb. 29, 2008.

      Thomas J. Miller, Attorney General, Jean C. Pettinger, Assistant Attorney General, and Lewis McMeen, County Attorney, for appellant.
    Robert G. Rehkemper of Gourley, Reh-kemper & Lindholm, P.L.C., Des Moines, for appellee.
   STREIT, Justice.

Codey Massengale was pulled over for speeding and arrested for driving while intoxicated. He held a commercial driver’s license but was driving his noncommercial vehicle at the time of his arrest. He filed a motion to suppress the results of his breath test, challenging the adequacy of the implied consent advisory read to him before he submitted to the breath test. The district court granted Massengale’s motion. It found Massengale’s consent to the test was involuntary because the advisory was inaccurate. We granted the State’s application for discretionary review. Because the advisory read to Mas-sengale violated substantive due process, we affirm the district court.

I. Facts and Prior Proceedings.

Just before 1:00 a.m. on April 2, 2006, an Iowa County deputy sheriff noticed a pickup truck speeding down Fourth Street in Victor, Iowa. The deputy shined his flashlight toward the driver to get his attention. Codey Massengale, the driver, slowed down and pulled over.

When Massengale stepped out of his truck, he was unsteady on his feet, had bloodshot, watery eyes, and smelled of an alcoholic beverage. Massengale admitted he had been drinking beer that night. Massengale begged the deputy not to arrest him for drunk driving because he would lose his job. He promised he would never drink and drive again. Massengale said he knew his blood alcohol concentration was over the legal limit. He failed the horizontal gaze nystagmus test administered by the deputy, and a preliminary breath test indicated his blood alcohol concentration exceeded the legal limit. There was an open beer in the truck.

The deputy arrested Massengale for operating a motor vehicle while intoxicated. He transported Massengale to the Iowa County Jail where Massengale was read the “implied consent advisory.” Massen-gale submitted to a Datamaster breath test, which showed his blood alcohol concentration was .143.

The State charged Massengale with operating while intoxicated (OWI), first offense, in violation of Iowa Code section 321J.2 (2005). Massengale pled not guilty. He filed a motion to suppress the breath test results, which the State resisted. Massengale challenged the adequacy of the implied consent advisory given to him before he submitted to the breath test. He alleged the advisory was inaccurate and misleading with respect to the applicable suspension periods to his commercial driving privileges and therefore “violated due process and rendered [his] ‘consent’ involuntary.” Following an evidentiary hearing, the district court granted Massen-gale’s motion. We granted the State’s application for discretionary review.

II. Scope of Review.

We review constitutional claims de novo. Grovijohn v. Virjon, Inc., 643 N.W.2d 200, 202 (Iowa 2002).

III. Merits.

A. Iowa’s Implied Consent Law. Iowa’s implied consent statute “establishes the basic principle that a driver impliedly agrees to submit to a test [to determine alcohol concentration or presence of a controlled substance] in return for the privilege of using the public highways.” State v. Hitchens, 294 N.W.2d 686, 687 (Iowa 1980). Iowa Code section 321J.6(1) states:

A person who operates a motor vehicle in this state under circumstances which give reasonable grounds to believe that the person has been operating a motor vehicle in violation of section 321J.2 or 321 J.2A is deemed to have given consent to the withdrawal of specimens of the person’s blood, breath, or urine and to a chemical test or tests of the specimens for the purpose of determining the alcohol concentration or presence of a controlled substance or other drugs, subject to this section....

However, a person has the right to withdraw his implied consent and refuse the test. Iowa Code § 321J.9 (“If a person refuses to submit to the chemical testing, a test shall not be given-”). But see id. §§ 321J.10, .10A (allowing chemical testing without consent if, among other things, a traffic incident resulting in death or personal injury reasonably likely to cause death occurred). We have previously said the right to refuse the test is a statutory right and not mandated by the provisions of the United States Constitution. State v. Knous, 313 N.W.2d 510, 512 (Iowa 1981); see Schmerber v. California, 384 U.S. 757, 86 S.Ct. 1826, 16 L.Ed.2d 908 (1966) (holding taking a blood sample against the OWI defendant’s objection did not violate the Fourth or Fifth Amendments of the United States Constitution).

Under Iowa Code section 321J.8, when a peace officer requests a person to submit to chemical testing, the peace officer must advise the person of the consequences of refusing the test as well as the consequences of failing the test. The clear intent of section 321J.8 is to provide a person who has been asked to submit to chemical testing

a basis for evaluation and decision-making in regard to either submitting or not submitting to the test. This involves a weighing of the consequences if the test is refused against the consequences if the test reflects a controlled substance, drug, or alcohol concentration in excess of the “legal” limit.

Voss v. Iowa Dep’t of Transp., 621 N.W.2d 208, 212 (Iowa 2001).

B. Due Process. When Massen-gale was arrested, he held a commercial driver’s license (CDL) but was driving a noncommercial vehicle. Massengale argues the implied consent advisory violates due process because it misled him with respect to the consequences of his decision on his CDL. See U.S. Const, amend. XIV, § 1 (“nor shall any State deprive any person of life, liberty, or property, without due process of law”); Iowa Const, art. I, § 9 (“no person shall be deprived of life, liberty, or property, without due process of law”). As a result, Massengale contends the results of the breath test should be suppressed in his OWI trial. Massengale does not clearly articulate whether he is alleging a procedural or substantive due process violation. Nevertheless, his reference to “fundamental fairness” sufficiently alerted us to a potential substantive due process violation.

A substantive due process analysis begins with an identification of the nature of the right at issue. Miller v. Smokers Warehouse Corp., 737 N.W.2d 107, 111 (Iowa 2007). If a fundamental right is involved, the government may not infringe on that right, “‘no matter what process is provided, unless the infringement is narrowly tailored to serve a compelling state interest.’ ” Bowers v. Polk County Bd. of Supervisors, 638 N.W.2d 682, 694 (Iowa 2002) (quoting Reno v. Flores, 507 U.S. 292, 302, 113 S.Ct. 1439, 1447, 123 L.Ed.2d 1, 16 (1993)). For all other interests, “the Due Process Clause, ‘demands no more than a “reasonable fit” between government purpose ... and the means chosen to advance that purpose.’” Miller, 737 N.W.2d at 111 (quoting Reno, 507 U.S. at 302, 305, 113 S.Ct. at 1447-49, 123 L.Ed.2d at 18); see also State v. Seer-ing, 701 N.W.2d 655, 662 (Iowa 2005) (“If a fundamental right is not implicated, a statute need only survive a rational basis analysis, which requires us to consider whether there is ‘a reasonable fit between the government interest and the means utilized to advance that interest.’ ” (quoting State v. Hernandez-Lopez, 639 N.W.2d 226, 238 (Iowa 2002))).

In this case, there is no fundamental right. Rather, at issue is a statutory right to withdraw one’s implied consent to chemical testing. Thus, we must determine whether there is a reasonable fit between the legislature’s purpose — granting individuals arrested for OWI the right to make a reasoned and informed decision with respect to chemical testing — and the means chosen to advance that purpose— the implied consent advisory. See State v. Bernhard, 657 N.W.2d 469, 473 (Iowa 2003) (stating “[t]he ultimate question is whether the decision to comply with a valid request under the implied-consent law is a reasoned and informed decision”).

Officer Parsons read the following advisory to Massengale before requesting a breath sample from him:

The Implied Consent Law requires that a peace officer advise the person of the following:
Refusal to submit to the withdrawal of a body specimen for chemical testing will result in revocation of your privilege to operate a motor vehicle for one year if you have not previously been revoked within the previous twelve years under the implied consent or drunk driving laws of this state or two years if you have one or more revocations within the previous twelve years....
Refusal to submit to a blood or urine test for drugs other than alcohol or a combination of alcohol and another drug constitutes a refusal and the above mentioned revocation periods apply.
If you consent to chemical testing and the test results indicate an alcohol concentration of eight hundredths or more, or if the test results indicate the presence of a controlled substance or other drug or a combination of alcohol and another drug in violation of [Iowa Code section] 321J.2, the department shall revoke your privilege to operate a motor vehicle for a period of 180 days if you have no revocation within the previous twelve years under the drunk driving or implied consent law, or one year if you have one or more previous revocations under those provisions.

(Emphasis added.) The parties agree this advisory conforms to the requirements set out in Iowa Code section 821J.8, which specifies what information must be conveyed in the implied consent advisory.

Prior to July 1, 2005, Iowa Code section 321J.8 accurately reflected the status of the laws pertaining to license suspensions for individuals (whether they held commercial or noncommercial driver’s licenses) who were arrested for operating while intoxicated and were requested to submit to chemical testing. Effective July 1, 2005, section 321.208 was amended to provide a one year CDL revocation for an individual who refused or failed chemical testing regardless of whether the individual was operating a commercial or noncommercial motor vehicle. The amendment rewrote subsection (2) which now states:

A person is disqualified from operating a commercial motor vehicle for one year upon a conviction or final administrative decision that the person has committed any of the following acts or offenses in any state or foreign jurisdiction while operating a commercial motor vehicle or while operating a noncommercial motor vehicle and holding a commercial driver’s license:
a. Operating a motor vehicle while under the influence of an alcoholic beverage or other drug or controlled substance or a combination of such substances.
b. Refusal to submit to chemical testing required under chapter 321J.

Iowa Code § 321.208(2) (2007) (emphasis added). Thus an individual, such as Mas-sengale, holding a CDL and driving a noncommercial vehicle will lose his commercial driving privileges for one year if he refuses or fails chemical testing. At the time of Massengale’s arrest, neither Iowa Code section 321J.8 nor the implied consent advisory read to Massengale had been amended to reflect the change in section 321.208.

We agree with Massengale the advisory was misleading with respect to the revocation period for commercial driving privileges. The advisory could be interpreted to mean the consequences to one’s CDL for refusing or failing chemical testing are the same as the consequences to one’s noncommercial driving privileges. In other words, it is reasonable to interpret the phrase — “privilege to operate a motor vehicle” — as including the privilege to drive a commercial motor vehicle. Thus, an individual in Massengale’s position would likely believe he would lose his CDL for six months if he failed the test and one year if he refused to submit to testing.

The “reasonable fit” test is certainly deferential to the means the government chooses to advance a legitimate purpose. Nevertheless, the means chosen by the government here — a misleading implied consent advisory — does not advance the purpose of the statute — giving arrested individuals information to make “a reasoned and informed decision” with respect to chemical testing. See Bernhard, 657 N.W.2d at 473; see also Teson v. Dir. of Revenue, 937 S.W.2d 195, 197 (Mo.1996) (holding warning that “mislead[s] the ar-restee into believing that the consequences of refusal are different than the law actually provides” is not “sufficient for purposes of due process”).

The State argues Massengale’s decision to consent to the breath test was not influenced by his misunderstanding because the revocation period was the same for his CDL whether he refused the test or took it and failed it. We cannot be confident Massengale’s decision to submit to testing was unaffected by the State’s misleading and inadequate advisory. Compare Voss, 621 N.W.2d at 212 (holding results of second chemical test for drugs was admissible even though state trooper did not reread the implied consent advisory in part because “there is no evidence in the record that Voss was confused about the consequences of his decision”), with McDonnell v. Comm’r of Pub. Safety, 473 N.W.2d 848, 855 (Minn.1991) (holding an implied consent advisory which misinformed defendant that she might be prosecuted for refusing to submit to testing violated due process). After all, the decision of whether to submit to testing must be made quickly and “will frequently be made without [the] benefit of counsel.” Voss, 621 N.W.2d at 212. Moreover, under Iowa law, there are both civil and criminal penalties for driving under the influence. The department of transportation is required to immediately revoke an individual’s driver’s license for the specified time if the person refuses to submit to chemical testing or if the person takes the test and fails it. Iowa Code §§ 321 J.9, .12. In addition, the State has the authority to prosecute the individual for OWI, which is a serious misdemeanor for the first offense. Id. § 321J.2. A person in Massengale’s position may decide not to provide the State with evidence to convict him for OWI if he understands he is going to lose his CDL for one year whether he failed or refused the test. See State v. Moorehead, 699 N.W.2d 667, 673 (Iowa 2005) (stating “[a] breath test result is important evidence in prosecutions for drunk driving”).

The government has a significant interest in reducing the number of highway accidents due to drunk driving. See Krueger v. Fulton, 169 N.W.2d 875, 878 (Iowa 1969). Moreover, it is legitimate for the government to encourage individuals to consent to testing by penalizing those who refuse testing. However, neither of these interests will be impinged by an implied consent advisory accurately disclosing the consequences to commercial driving privileges. In fact, since Massen-gale’s arrest, the legislature has amended section 321J.8 to include the correct information.

IY. Conclusion.

Under the circumstances, we find a reasonable fit lacking between the government’s purpose in granting OWI suspects the right to make a reasoned and informed decision and the implied consent advisory given in this case. Massengale’s decision to consent to the breath test was not reasoned and informed because the implied consent advisory was misleading with respect to the applicable revocation periods for his CDL. The district court properly granted Massengale’s motion to suppress. We need not address Massengale’s alternative argument that his consent was involuntary. We affirm the district court.

AFFIRMED.

      . All references to the Iowa Code are to the 2005 version unless stated otherwise.

      . The advisory also had a separate paragraph entitled "Implied Consent Advisory for Commercial Motor Vehicle Operators Only.” It states:
      If you are operating a commercial motor vehicle and you submit to chemical testing and the test results indicate an alcohol concentration of four hundredths or more OR if you refuse to submit to chemical testing, you shall be disqualified from operating a commercial motor vehicle for a period of one year.
      The deputy did not read this paragraph to Massengale because Massengale was not driving a commercial motor vehicle at the time of his arrest.

      . Iowa Code section 321J.8 provides:
      A person who has been requested to submit to a chemical test shall be advised by a peace officer of the following:
      1. If the person refuses to submit to the test, the person’s driver’s license or nonresident operating privilege will be revoked by the department as required by and for the applicable period specified under section 321J.9.
      2. If the person submits to the test and the results indicate the presence of a controlled substance or other drug, or an alcohol concentration equal to or in excess of the level prohibited by section 321J.2 or 321J.2A, the person's driver's license or nonresident operating privilege will be revoked by the department as required by and for the applicable period specified under section 321X12.
      3.If the person is operating a commercial motor vehicle as defined in section 321.1 and either refuses to submit to the test or submits to the test and the results indicate an alcohol concentration of 0.04 or more, the person is disqualified from operating a commercial motor vehicle for the applicable period under section 321.208 in addition to any revocation of the person’s driver’s license or nonresident operating privilege which may be applicable under this chapter.
      This section does not apply in any case involving a person described in section 321X7.

      . Section. 321J.8 now includes the following paragraph:
      b. If the person is operating a noncommercial motor vehicle and holding a commercial driver’s license as defined in section 321.1 and either refuses to submit to the test or operates a motor vehicle while under the influence of an alcoholic beverage or other drug or controlled substance or a combination of such substances, the person is disqualified from operating a commercial motor vehicle for the applicable period under section 321.208 in addition to any revocation of the person’s driver’s license or nonresident operating privilege which may be applicable under this chapter.
      2007 Iowa Acts ch. 69.


source: Caselaw Access Project

author: APPEL, Justice.

license: Public Domain

text:
    David E. RICHTER and Lori Falk-Goss, Appellees, v. SHELBY COUNTY, Iowa, Appellant.
    No. 06-1165.
    Supreme Court of Iowa.
    Feb. 29, 2008.
    Marcus Gross, Jr., County Attorney, and Richard C. Schenck and Bryan D. Swain of Salvo, Deren, Schenck & Lauterbach, P.C., for appellant.
    DeShawne L. Bird-Sell of DeShawne L. Bird-Sell, P.L.C., Glenwood, for appellees.
   APPEL, Justice.

In this case, we must decide whether a county is statutorily obligated to provide a legal defense for a sheriffs deputy charged with voluntary manslaughter in connection with a shooting that occurred while the deputy was on duty. The district court held that the county was required to reimburse the deputy for attorneys’ fees arising out of his successful criminal defense. For the reasons expressed below, we reverse.

I. Factual and Procedural Background.

The facts in this matter are undisputed. On December 20, 2004, Shelby County Deputy Sheriff Chad Butler shot and killed Dwayne Jens after a high-speed chase through rural Iowa. Jens was unarmed at the time of the shooting. The parties stipulated in this proceeding that Butler “was on duty at the time that he shot and killed Mr. Jens and was acting in his official capacity as an officer for Shelby County during the incident.”

On the day of the shooting, Butler contacted the plaintiff attorneys in this matter, David Richter and Lori Falk-Goss, to represent him in connection with the shooting. The following day, Shelby County Attorney Marcus Gross, Jr., Chief Deputy Mark Hervey, and Don Shreffler of the Iowa Division of Criminal Investigation interviewed Butler in Richter’s office. At all times during the interview, county attorney Gross was acting as a prosecutor and not providing Butler legal defense.

County attorney Gross presented the matter to a Shelby County grand jury, which indicted Butler on the charge of voluntary manslaughter on February 2, 2005. Following the indictment, Gross withdrew as counsel for the State. On April 18, 2005, Butler’s attorneys submitted a billing statement to Shelby County seeking payment of $14,775 in legal fees and costs. On April 26, 2005, the chairman of the Shelby County Board of Supervisors responded by letter, stating that the board did not have the authority to pay for Butler’s legal expenses. Notwithstanding the rejection of their request for payment, Butler’s attorneys continued to represent him.

After a three-day trial in June 2005, Butler was found not guilty of voluntary manslaughter. Following Butler’s acquittal, Butler’s attorneys presented a bill to the Shelby County Board of Supervisors totaling $68,013.50 in fees and costs arising from the defense. In response, the board once again asserted that it lacked the authority to pay for Butler’s criminal defense.

Butler’s attorneys filed a petition at law in the district court asserting that the county was statutorily required to assume Butler’s defense and prayed for a monetary judgment for the services rendered and costs incurred. The parties tried the action to the court on stipulated facts. Butler’s attorneys claimed that they were entitled to payment of their fees and expenses pursuant to Iowa Code section 331.756(6) (2005), which provides, in part, that the county attorney “shall ... defend all actions and proceedings in which a county officer, in the officer’s official capacity, or the county is interested or a party.”

The district court entered judgment in favor of Butler’s attorneys. The county filed a timely notice of appeal.

II. Standard of Review.

The parties do not agree on the proper standard of review. The county asserts that because the remedy sought by Butler’s attorneys is unjust enrichment, the case was therefore brought in equity and our review is de novo. Iowa R.App. P. 6.4. Conversely, Butler’s attorneys claim that the case was tried at law because the sole basis of relief was statutory in nature. As a result, Butler’s attorneys assert that our review is limited to correction of errors at law. Id

The parties, however, stipulated to all the relevant facts. The only issues presented in this case are questions of law. The sole issue before us is whether Butler’s attorneys, under the stipulated facts, are legally entitled to payment. Our review, therefore, is for correction of errors of law. Sager v. Farm Bureau Mut. Ins. Co., 680 N.W.2d 8,11 (Iowa 2004).

III. Discussion.

Resolution of this case turns on the proper interpretation of Iowa Code section 381.756(6), which is the sole basis asserted by the plaintiffs for payment of Butler’s criminal defense. In relevant part, this Code provision provides that “[t]he county attorney shall: ... (6) Commence, prosecute, and defend all actions and proceedings in which a county officer, in the officer’s official capacity, or the county is interested or a party.” Iowa Code § 331.756(6).

The county raises three arguments against imposition of a statutory obligation to provide for Butler’s criminal defense. First, the county asserts that Butler was not a “county officer” entitled to a defense under the statute. Second, the county argues that Butler was not a party to nor did he defend the underlying action in his official capacity, as the statute requires. Instead, the county argues that Butler defended himself in the criminal case in his personal capacity. Third, the county maintains that even if Butler was statutorily entitled to a criminal defense, he waived such a defense by failing to obtain court approval of his counsel, contrary to the provisions of Iowa Code section 331.759. The county asserts section 331.759 requires court approval of an appointment of other counsel when the county attorney is unable to conduct the defense because of a conflict.

Butler’s attorneys, however, maintain that the county in the stipulation of facts admitted that Butler “was acting within his official capacity as an officer for Shelby County.” As a result, Butler’s attorneys assert that the County is precluded from claiming that Butler was not a “county officer” for the purposes of Iowa Code section 331.756(6) or that he was not acting within the scope of his official capacity at the time of the incident. In any event, Butler’s attorneys argue that Butler should be considered a “county officer” under Iowa Code section 331.756(6) because Butler was appointed as a deputy sheriff under Iowa Code section 331.903, a provision which is found in a division of the Iowa Code entitled “County Officers.”

The attorneys further argue that even if Butler cannot be considered a “county officer,” he, nevertheless, is entitled to recover his defense fees and costs because the county has an “interest” in the criminal proceeding. Butler’s attorneys argue that because the deputy was acting in his official capacity at the time of the incident, the county is greatly interested in the matter. An adverse finding against a peace officer, the attorneys argue, would harm the public regard for law enforcement that is essential to maintain the peace.

On the failure to obtain court approval under Iowa Code section 331.759, Butler’s attorneys maintain that the burden of statutory compliance rested with the county, and not with Butler. When the county attorney withdrew from the proceeding, the county should have sought court approval for the employment of outside counsel to defend Butler. If the county had followed the statutory procedure, the attorneys argue, the court likely would have appointed his chosen counsel. As a result, Butler’s attorneys argue that equitable principles dictate that the county should pay for Butler’s legal defense even though court approval was not obtained.

At the outset, we conclude that there is substantial question as to whether Butler is a “county officer” under the statute. Compare Seeley v. Bd. of County Comm’rs for La Plata County, Colo., 654 F.Supp. 1309, 1313 (D.Colo.1987) (holding that a deputy sheriff is not a “county officer” either under the state constitution or code), and Employees Ret. Sys. v. Lewis, 109 Ga.App. 476, 136 S.E.2d 518, 520-21 (1964) (holding that deputy sheriffs are “public officers” but not “county officers”), with In re Uterhart, 144 Misc. 188, 257 N.Y.S. 348, 348 (NY.Sup.Ct.1927) (holding deputy sheriffs to be county officers under relevant statute). Iowa Code chapter 331 contains a division entitled “County Officers” and lists the county attorney, county auditor, county treasurer, county recorder, and county sheriff. Iowa Code §§ 331.751, 331.501, 331.551, 331.601, 331.651. The county argues this context establishes that the term “county officer” is a term of art used to describe the public officers of the county who to some degree exercise sovereign power. Hegeman v. Kelch, 666 N.W.2d 531, 534 (Iowa 2003); State v. Spaulding, 102 Iowa 639, 649-50, 72 N.W. 288, 291 (1897). Whether the issue was preserved at trial, however, is clouded by the stipulation in which the parties ambiguously agreed that Butler was acting in his official capacity as “an officer for Shelby County” and by the failure of the county to address the issue in its briefing before the district court.

It is not necessary, however, to address Butler’s status as a county officer as he fails to meet an additional requirement in Iowa Code section 331.756(6). Specifically, Iowa Code section 331.756(6) requires that the county defend county officers only where the county officers are parties or interested “in actions or proceedings” in their official capacity. Because Butler was not defending in the underlying criminal action or proceeding in his official capacity, the claim of Butlers’ attorneys fails in this case.

The attorneys erroneously assert that Iowa Code section 331.756(6) gives rise to an obligation to provide a defense for all acts or omissions of an officer while acting within the scope of the officer’s duties. This kind of municipal obligation is created with respect to civil claims by the municipal tort claims act, which provides that municipalities generally have a duty to defend and indemnify municipal officers for any tort claim or demand “arising out of an alleged act or omission occurring within the scope of their employment or duties.” Iowa Code § 670.8. Iowa Code section 331.756(6) uses distinctly different language. It does not provide for a defense or indemnification with respect to “acts or omissions” arising within the scope of employment, but instead limits the duty to defend to “actions and proceedings” where the county officer is a party or interested in his or her official capacity. See In re Roofher’s Appeal, 81 Pa.Super. 482, 482 (Pa.Super.Ct.1923) (holding that statute authorizing hiring of attorney limited “to those matters” in which the municipality has some official duty or which affects its interests).

In determining whether a public officer is defending “in the actions or proceedings” in his or her official capacity, the case of Bartel v. Johnson County, 322 N.W.2d 901 (Iowa Ct.App.1982), is instructive. In Bartel, a sitting county supervisor mounted a successful defense to a challenge to his qualifications to hold office. 322 N.W.2d at 903. The Bartel court held that the county supervisor was not defending “the action” in his official capacity, but rather acted in his personal capacity for his personal benefit even though the case arguably arose from acts taken in his official capacity. Id. at 904.

A similar analysis applies where a public officer is a defendant in a criminal action. In this case, Butler was defending himself in a criminal matter. Unlike in an action brought against the county treasurer or county auditor where the county official is named in the litigation as the responsible county official, Butler in the underlying criminal action was not acting as the representative or agent of the county. His goal was to avoid criminal sanctions personal as to him. The defense in the criminal action was not “in his official capacity” but in his individual capacity for his own benefit. Id. at 903-04 (citing United States v. Waylyn Corp., 130 F.Supp. 783, 786 (D.P.R.1955) (noting that the phrase “in his official capacity” means only his capacity when acting for and in behalf of the county)).

Butler’s attorneys zealously argue that because the parties in this case stipulated that Butler was acting within the scope of his official capacity as an officer of Shelby County at the time of the incident, his attorneys’ fees should be paid under the statute. The fact that the underlying incident arose in the officer’s official capacity, however, is distinct from the issue of whether the officer is defending in “the actions or proceedings” in his official capacity. Because Butler was not defending in “the actions or proceedings” in his official capacity, we hold that under Iowa Code section 331.756(6), Butler is not entitled to a defense at the county’s expense. Id. at 904.

We also reject the alternative argument that the county was “interested” in the criminal proceeding, thereby mandating that the county defend him under Iowa Code section 331.756(6). The statute provides that the county must defend in “actions or proceedings” in which the county is “a party or is interested.” In a statutory context expressly dealing with legal proceedings, the term “interested” refers to a cognizable legal interest. See Birkhofer ex rel. Johannsen v. Birkhofer, 610 N.W.2d 844, 847 (Iowa 2000) (“ ‘One interested in an action is one who is interested in the outcome or result thereof because he has a legal right which will be directly affected thereby or a legal liability which will be directly enlarged or diminished by the judgment or decree therein.’ ” (quoting In re J.R., 315 N.W.2d 750, 752 (Iowa 1982))); Black’s Law Dictionary 1154 (8th ed.2004) (defining “interested party” as a party “who has a recognizable stake (and therefore standing) in the matter”).

The asserted “interest” of Shelby County does not rise to a legal interest in the criminal proceeding. The purported public relations benefit of the vindication of a law enforcement officer does not rise to a legal interest under the statute. Further, while Butler’s attorneys claim that a verdict against Butler would increase Shelby County’s exposure to civil liability, such an indirect interest is not sufficient to give Shelby County standing to litigate in the criminal proceeding and would directly arise only in a subsequent civil action.

Our interpretation of Iowa Code section 331.756(6) is supported by the fact that at common law, public officials were not entitled to mandatory reimbursement of fees resulting from criminal prosecutions absent express statutory authorization. Hall v. Thompson, 283 Ark. 26, 669 S.W.2d 905, 906-07 (1984); Guerine v. City of Northlake, 1 Ill.App.3d 603, 274 N.E.2d 625, 626 (1971); Zimmer v. Town of Brookhaven, 247 A.D.2d 109, 678 N.Y.S.2d 377, 380 (1998). It is improbable that the legislature intended to significantly rework the common law through the language in the statute. Indeed, unlike Iowa, a number of states have expressly overridden the common law approach through clear and unambiguous language, usually under limited circumstances and often on a discretionary rather than mandatory basis. See, e.g., Cal. Gov’t Code § 995.8 (2007); Conn. Gen.Stat. § 58-39a (2007); Fla. Stat. § 111.065(3) (2007); 5 Ill. Comp. Stat. 350/2 (2007); Kan. Stat. Ann. § 75-6108 (2006); Minn.Stat. § 3.736(9a) (2007); NJ.Rev.Stat. § 40A:14-155 (2007); N.C. Gen.Stat. § 143-300.4 (2007); Ohio Rev. Code Ann. §§ 9.87, 109.36-366 (2007); 42 Pa. Cons.Stat. Ann. § 8525 (2007); Utah Stat. Ann. § 63-30a-2 (2007); Wis. Stat. §§ 165.25(6), 895.46 (2007). In order to require Iowa governments to defend or reimburse public officials in criminal proceedings, clear and direct language is required to overcome the traditional approach. See Triplett v. Town of Oxford, 791 N.E.2d at 316 (Mass.2003) (noting that the legislature uses clear language to indemnify public employee for legal fees and costs incurred in defending against criminal charges); Monti v. Warwick Sch. Comm., 554 A.2d 638, 640 (R.I.1989) (holding indemnification statute does not apply to criminal proceedings without clear indication).

We recognize that there may be policy considerations that might support payment of attorneys’ fees and costs of law enforcement officers incurred in the successful defense of criminal actions arising out of acts or omissions within the scope of their authority. The financial burden of a successful defense against criminal charges, as this case demonstrates, can be substantial. Triplett, 791 N.E.2d at 316 (recognizing financial burdens but refusing to extend municipal duty to defend to criminal cases absent legislative enactment); Was-sefv. State, 98 Misc.2d 505, 414 N.Y.S.2d 262, 265 (N.Y.Ct.Cl.1979) (same). In addition, it has been suggested that police officers might be discouraged from effectively pursuing their duties if they were forced to provide their own defense in criminal actions. Van Horn v. City of Trenton, 80 N.J. 528, 404 A.2d 615, 619 (1979). Butler’s attorneys also advance the argument that the morale of law enforcement officers would suffer if they are denied financial support when they are charged criminally over mishaps that occur in the line of duty, and that recruiting qualified officers would be impaired by the lack of governmental support when unfortunate incidents occur.

On the other hand, it can be argued that payment of attorneys’ fees and costs even in cases of successful criminal defenses could encourage law enforcement officers to engage in undesirably risky behavior. Snowden v. Anne Arundel County, 295 Md. 429, 456 A.2d 380, 382 (1983) (citing argument that reimbursement of criminal expenses even of acquitted public official could make an officer less inclined to exercise proper care and restraint). Further, providing a defense for public officers charged with criminal misconduct would create an anomalous situation where the public pays for both the cost of prosecution and the cost of defense even where the defendant is not indigent. Ordinarily non-indigent private parties who are forced to undergo criminal proceedings are required to pay for their defense, and it can be maintained that law enforcement officers are not entitled to different treatment. Finally, it can be argued that the threat of shifting defense costs onto government in the event of an unsuccessful prosecution would unduly dampen the enforcement of criminal laws against public officials, a perverse result in this era of governmental distrust.

Our role in this case, however, is simply to apply existing law to the undisputed facts. Unlike other jurisdictions, the Iowa legislature has not chosen to enact legislation requiring local government to provide a defense for county officers in criminal matters even where the underlying act or omission is within the scope of employment and the officer is acquitted on the underlying charge. Whether there are policy considerations sufficient to justify a change in current law is a legislative matter, about which we express no opinion.

We also express no opinion on the issue of whether Shelby County, in its discretion, could voluntarily elect to pay some or all of Butler’s expenses. See Snowden, 456 A.2d at 380 (upholding ordinance authorizing creation of fund to pay legal expenses incurred by police and fire personnel for civil or criminal offenses arising out of employment); Sonnenberg v. Farmington Twp., 39 Mich.App. 446, 197 N.W.2d 853 (1972) (holding that municipality in its discretion may indemnify police officers for expenses incurred defending criminal charges that arose out of employment). The issue of whether the county has such discretion is not raised in this appeal. We only hold that Shelby County, under Iowa Code section 331.756(6), has no mandatory obligation to pay the claim presented.

IV. Conclusion.

For the reasons expressed above, we hold that under Iowa Code section 331.756(6), Shelby County is not required to pay the fees and costs incurred by Butler in his criminal defense. As a result, the judgment of the district court is reversed.

REVERSED.

All justices concur except LARSON, J., who takes no part.

      . The court’s decision also makes it unnecessary to decide the issue of waiver.


author: /s/Alan C. Page Associate Justice

text:
    In re Petition for DISCIPLINARY ACTION AGAINST Gary K. WOOD, a Minnesota Attorney, Registration No. 118722.
    No. A07-213.
    Supreme Court of Minnesota.
    Feb. 27, 2008.
   ORDER

On July 13, 2006, respondent Gary K. Wood was indefinitely suspended from the practice of law for a minimum period of six months. In re Wood, 716 N.W.2d 341, 348 (Minn.2006). Respondent has not sought reinstatement. On January 29, 2007, the Director of the Office of Lawyers Professional Responsibility filed a petition for disciplinary action alleging that respondent committed professional misconduct warranting public discipline, namely, that he misappropriated client funds, made misrepresentations to conceal that misappropriation, handled and converted client funds while suspended from the practice of law, abandoned a client matter, failed to deposit an advance fee payment retainer into a trust account, failed to notify a client of his July 13, 2006, suspension from the practice of law, made false statements to the Director claiming to have notified all clients of his suspension, and failed to cooperate with the Director’s investigation into his misconduct. The petition alleges that respondent’s conduct violated Rules 1.3, 1.4, 1.15(c)(5), 3.4(c), 4.1, 8.1(a), 8.1(b) 8.4(c), and 8.4(d) of the Minnesota Rules of Professional Conduct, as well as Rule 25 of the Rules on Lawyers Professional Responsibility (RLPR).

Respondent admitted the allegations of the petition, waived his procedural rights under Rule 14, RLPR, and entered into a stipulation with the Director in which they jointly recommended that the appropriate discipline was indefinite suspension pursuant to Rule 15, RLPR, with no right to petition for reinstatement for at least five years, reinstatement further conditioned upon respondent’s compliance with certain conditions.

Following submission of the stipulation, this court ordered the parties to submit briefs on the issue of whether disbarment would be appropriate in light of the professional misconduct to which respondent admitted and the absence of mitigating factors. The Director subsequently explained that the recommended discipline was agreed to because of (1) litigation concerns involving problems of proof; (2) respondent’s partial restitution to his clients and promise to make restitution of any remaining unpaid amount; and (3) respondent’s history of depression and anxiety. In light of the unique circumstances of this case, we approve, as modified, the jointly recommended disposition.

Based on all the files, records, and proceedings herein,

IT IS HEREBY ORDERED that respondent Gary K. Wood’s indefinite suspension from the practice of law is continued with no right to petition for reinstatement for a period of five years from the date of entry of this order. The reinstatement hearing provided for in Rule 18, RLPR, is not waived. Reinstatement is conditioned upon respondent’s: (1) compliance with Rule 26, RLPR (requiring notice of suspension to clients, opposing counsel, and tribunals); (2) successful completion of the professional responsibility examination pursuant to Rule 18(e), RLPR; and (3) satisfaction of continuing legal education requirements pursuant to Rule 18(e), RLPR.

IT IS FURTHER ORDERED that respondent shall pay costs in the amount of $900; disbursements in the amount of $1,308.18 pursuant to Rule 24(d), RLPR; and, within 90 days of entry of this order, restitution to David Wilson in the amount of $1,140.

DIETZEN, J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.

BY THE COURT

/s/Alan C. Page Associate Justice


author: MEYER, Justice.

text:
    McINTOSH COUNTY BANK, et al., Respondents, v. DORSEY & WHITNEY, LLP, Appellant.
    No. A06-486.
    Supreme Court of Minnesota.
    March 6, 2008.

      Thomas C. Atmore, Edward W. Gale, Leonard, O’Brien, Spencer, Gale & Sayre, Ltd., Minneapolis, for respondent.
    Richard G. Mark, Mark G. Schroeder, Jason R. Asmus, Briggs and Morgan, P.A., Minneapolis, for appellant.
    Charles E. Lundberg, Bassford Remele, Minneapolis, for amicus curiae Minnesota Lawyers Mutual Insurance Company.
    Kay Nord Hunt, Lommen, Abdo, Cole, King & Stageberg, P.A., Minneapolis, for amicus curiae Minnesota State Bar Association and Minnesota Defense Lawyers Association.
   OPINION

MEYER, Justice.

Respondents McIntosh County Bank, et al. (respondents) purchased participation interests in a loan sold to them by Miller & Schroeder (M & S). Appellant law firm Dorsey & Whitney, LLP, (Dorsey) was hired by M & S to assist in structuring, documenting, and securing the loan. After the loan was unpaid, the respondents filed a legal malpractice suit against Dorsey, alleging that the respondents were the third-party beneficiaries of the attorney-client relationship between Dorsey and M & S, because M & S intended Dorsey’s services in documenting the loan transaction to benefit the banks that purchased participation interests in the loan. The district court determined that the respondents were neither clients nor third-party beneficiaries, and granted summary judgment to Dorsey. The court of appeals reversed the district court’s grant of summary judgment on implied contract and third-party beneficiary theories of standing, holding that the district court failed to apply the appropriate test to determine whether Dorsey owed a duty to the respondents as third-party beneficiaries. We reverse the court of appeals and affirm the district court’s grant of summary judgment.

The St. Regis Mohawk Tribe (Tribe) and President R.C.-St. Regis Management Company (President) entered into a Fourth Amended and Restated Management Agreement (Management Agreement) dated November 7, 1997. The Management Agreement required President to pay all development expenses for a casino to be opened on the Tribe’s land and to manage the casino once it was built. The Tribe was required to repay the development expenses to President, as well as fees for the management services. The amounts due to President at any particular time were determined with reference to the casino’s revenues. Management contracts and collateral agreements between Indian tribes and casino management companies are subject to approval by the National Indian Gaming Commission (NIGC). 25 U.S.C. § 2711(a) (2000); 25 C.F.R. § 533.1 (2007). The Management Agreement received NIGC approval.

M & S agreed in 1998 to obtain financing for President to fund construction and furnishing of the Tribe’s casino. M & S negotiated two separate loans (St. Regis loans) to President, the first for $8,624,000 and the second for $3,492,000. The loans were to be secured by President’s interest in revenues from the casino. Before closing a loan, M & S typically obtained commitments from banks to purchase participation interests after closing. M & S’s business model called for it to sell 100% of the interest in its loans within one week of closing, and to retain loan servicing. 32 banks (Participants) purchased participation interests in the St. Regis loans. Respondents are 31 of the banks (Bank Participants) and Marshall Investments Corporation, which later entered into sub-servicing agreements with M & S.

Before signing a Participation Agreement with M & S, each Participant was given a closing book, which included copies of the loan documentation and a template of the Participation Agreement. In the Participation Agreement, M & S was called the “Lender,” and the parties defined their relationship as that of “a seller and purchaser of a property interest.” The parties agreed that M & S was the “nominal payee” and “nominal secured party,” and that it was “to generally act as agent for all the Participants in the holding and disposition of the Collateral.” The Participants acknowledged that they purchased their interest “based upon Participant’s own independent examination and evaluation of the Loan transaction and the information furnished with respect to Borrower and without any representations or warranties from Lender as to * * * the value and security of the Collateral.” The Lender was not to be “responsible for any negligence or misconduct on the part of any * * * attorney, * * provided that the Lender shall use reasonable care in the selection of such person or firm.”

In late 1998, M & S retained Dorsey, the appellant here, to assist in structuring, documenting, and securing the loan. Dorsey had previously handled over thirty loans originated by M & S and was familiar with the business model used by M & S and with the Participation Agreement. M & S and Dorsey did not have a written retainer agreement about the St. Regis representation.

One of the loan documents drafted by Dorsey attorney Paula Rindels (Rindels) was a Notice and Acknowledgment of Pledge (Pledge Agreement), signed by President, the Tribe, and M & S. The Pledge Agreement’s enforceability was critical to securing the St. Regis loans. There was no other guarantee. In this document, the Tribe acknowledged that President had pledged to M & S, as security for the St. Regis loans, the amounts payable by the Tribe to President under the Management Agreement.

The Tribe’s signature on the Pledge Agreement was authorized by a Tribal Council Resolution, which conditioned its execution of the Pledge Agreement on inclusion of certain changes to the Management Agreement. One of the changes desired by both President and Tribe was an increased cap on development expenses. A cap increase is a change requiring NIGC approval. The Tribe and President amended the Management Agreement on February 11, 1999, increased the cap, and included the changes in the Pledge Agreement. The amendment to the Management Agreement (Amendment) was submitted to the NIGC for approval. Management contracts or other agreements requiring NIGC approval but not receiving it are void. 25 C.F.R. § 533.7 (2007).

During Dorsey’s preparation of loan documentation for the St. Regis loans, a question arose as to whether NIGC approval of the Pledge Agreement was required. Dorsey submitted the Pledge Agreement to the NIGC for a determination on this issue.

On February 16, 1999, the NIGC notified President and the Tribe that it would need additional time to complete its review of the Amendment. President wished to close the St. Regis loans in mid-February, so that the casino’s grand opening could occur as planned in April. Dorsey advised M & S that NIGC approval was not required for the Pledge Agreement. There are conflicting facts as to whether Dorsey informed M & S of the risk involved in closing without obtaining NIGC approval or an NIGC determination that no approval was required. M & S employee Steven Erickson, manager of the Native American financing gaming group, asserts that Dorsey did not advise M & S of the risk of proceeding without an NIGC determination. Rindels asserts that she discussed the risk with at least one M & S representative prior to closing.

M & S had initially advised Participants that it would not close the loans without NIGC approval. When, it became clear that NIGC approval could not be obtained in time to close the loans in February, M & S wrote to the Participants, recommending that the St. Regis loans be closed despite lack of NIGC approval, and requesting that the Participants vote on the matter. The Participants voted to close the loans. Rindels was aware that M & S had sent this letter, although no Dorsey attorney drafted the letter and the letter included no reference to Dorsey. Erickson asserted that M & S would not have closed the loans if it had known of the risk of closing without NIGC approval. M & S continued to request proof of NIGC approval after the loans closed.

The Bank Participants were aware that M & S had retained Dorsey. There are conflicting facts regarding whether the purpose of the attorney-client relationship between M & S and Dorsey was to benefit the Bank Participants. Erickson said on one hand that M & S retained Dorsey for the benefit of all the lenders, including the Bank Participants, and on the other that Dorsey was retained to represent only M & S. M & S attorney Mary Jo Brenden consulted with Dorsey attorneys about revisions needed in the Participation Agreement to protect the Participants, but Dorsey did not draft the template Participation Agreement. There were no communications between the Bank Participants and Dorsey regarding the St. Regis loan documentation and closing. Dorsey denied being aware of the identities of the actual Bank Participants prior to their purchase of participation interest in the loan and denies that its work for M & S was intended to directly benefit the Bank Participants.

The St. Regis loans were closed on February 24, 1999. By March 1, 1999, M & S had sold most of the participation interest in the loans. The casino opened in April of 1999. Revenue was well below projections, and by February 2000 President had defaulted on the St. Regis loans.

Dorsey, M & S, and some Participants attempted to negotiate a resolution to the problem of the loan default with President and the Tribe in the fall of 2000. At an October 3 meeting, a Tribe representative expressed the opinion that the Pledge Agreement was unenforceable and void because it had not received NIGC approval.

M & S sued President in U.S. District Court for collection of the unpaid loan amounts, and in April 2002 judgment was entered for M & S in the amount of $15,625,528.16. The judgment has not been collected because President has no assets. M & S filed for Chapter 7 bankruptcy relief in January 2002. The Bank Participants and President, in separate actions in New York state courts, attempted to collect from the Tribe, which itself filed a qui tam action against President and respondents, seeking a declaration that the Pledge Agreement was void and unenforceable. On April 11, 2005, the respondents, participant Bremer Business Finance Corporation (Bremer), and the Tribe reached a settlement in which the Tribe paid Bremer and the respondents for their interest in the President judgment.

Having exhausted their efforts to collect on the loans against President and the Tribe, the Bank Participants joined with the M & S bankruptcy trustee and Marshall to bring malpractice claims against Dorsey in bankruptcy court. At issue was Dorsey’s advice to close the loan without waiting for NIGC approval or an NIGC determination that approval was not required. The bankruptcy court dismissed 28 banks’ claims for lack of subject matter jurisdiction, abstained from hearing the remaining participants’ claims, and denied Dorsey’s motion for summary judgment. Bremer’s malpractice action against Dorsey went to trial in bankruptcy court, which recommended a finding that an attorney-client relationship existed between Dorsey and Bremer. In re SRC Holding Corp., 352 B.R. 103, 168-73 (Bankr.D.Minn.2006). On April 6, 2007, the U.S. District Court found on de novo review that Bremer’s attorney-client relationship with Dorsey began only in June 2000, and that Bremer was not a third-party beneficiary at the time the loans were closed by M & S in early 1999. In re SRC Holding Corp., 364 B.R. 1, 27, 33-35 (D.Minn.2007).

Respondents brought this malpractice action in Hennepin County District Court, with claims of professional negligence/malpractice on a third-party beneficiary theory, negligent misrepresentation, breach of contract, and breach of fiduciary duty. The breach of fiduciary duty claim was voluntarily dismissed. Dorsey moved for summary judgment on the remaining claims. The district court granted summary judgment on January 17, 2006, concluding (1) that there was no genuine issue of material fact regarding the existence of an express or implied contract for legal services between the respondents and Dorsey; (2) that the respondents’ reliance on information received from M & S was insufficient to create an attorney-client relationship with Dorsey under a tort theory; (3) that under the third-party beneficiary theory there was no genuine issue of material fact about whether the respondents were the sole and direct intended beneficiaries of Dorsey’s representation of M & S; and (4) that on the negligent misrepresentation claim, in which liability to a non-client arises only if the attorney has acted with fraud, malice, or committed another intentional tort, no genuine issue of material fact existed about whether Dorsey acted in such a way as to incur liability.

The court of appeals affirmed summary judgment on the negligent misrepresentation claim, on a contract-assignment theory, and on the tort theory of an attorney-client relationship, but reversed on the implied contract and third-party beneficiary theories. McIntosh County Bank v. Dorsey & Whitney, LLP, 726 N.W.2d 108, 120-21 (Minn.App.2007). The court of appeals concluded that there were genuine issues of material fact regarding whether the respondents were third-party beneficiaries, and that the district court erred in its application of the law when it did not use the correct test to make that determination. Id. at 116. On the implied contract theory, the court of appeals concluded that there were genuine issues of material fact regarding M & S’s and Dorsey’s understanding of the scope of the representation. Id. at 118. Dorsey petitioned for review.

I.

On appeal from summary judgment, we review the record to determine whether there is any genuine issue of material fact, and whether the district court erred in its application of the law. Nicollet Restoration,, Inc. v. City of St. Paul, 533 N.W.2d 845, 847 (Minn.1995). We must view the evidence in the light most favorable to the nonmoving party. Id. We do not weigh the evidence or make factual determinations. Fairview Hosp. & Health Care Serv. v. St. Paul Fire & Marine Ins. Co., 535 N.W.2d 337, 341 (Minn.1995). There is a genuine issue of material fact when the nonmoving party presents evidence that is “sufficiently probative with respect to an essential element of the non-moving party’s case to permit reasonable persons to draw different conclusions.” DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn.1997). If the material facts are not in dispute, we review the application of the law de novo. Medica, Inc. v. Atl. Mut. Ins. Co., 566 N.W.2d 74, 76 (Minn.1997).

The first issue is whether the respondents have standing to sue Dorsey for legal malpractice as a third-party beneficiary of the attorney-client relationship between M & S and Dorsey. The general rule in legal malpractice is that, in the absence of fraud or another improper motive, an attorney is liable for professional negligence only to a person with whom he has an attorney-client relationship. Marker v. Greenberg, 313 N.W.2d 4, 5 (Minn.1981). If an attorney were to owe a duty to a nonclient, it could result in potential ethical conflicts for the attorney and compromise the attorney-client relationship, with its attendant duties of confidentiality, loyalty, and care. In L & H Aireo v. Rapistan Corp., we held that absent extraordinary and extreme circumstances involving actual fraud, an attorney may not be held liable in damages to his party-opponent. 446 N.W.2d 372, 380 (Minn.1989). We stated that such liability “would undermine the attorney’s duty to zealously represent the client and resolve all doubts in favor of the client.” Id. at 379. “It would also undermine the trust between the attorney and client, which is an essential element of the relationship.” Id.

We have recognized an exception to the general rule of privity in two attorney malpractice cases: Marker, 313 N.W.2d at 5, in which we adopted a balancing test from the California case of Lucas v. Hamm, 56 Cal.2d 583, 15 Cal.Rptr. 821, 364 P.2d 685, 687 (1961), and Admiral Merchants Motor Freight, Inc. v. O’Connor & Hannan, 494 N.W.2d 261, 266 (Minn.1992). Dorsey argues that Marker and Admiral Merchants establish a threshold requirement that a nonclient be a “direct and intended beneficiary” of the attorney’s services; if the nonclient is not the direct and intended beneficiary, the so-called Lucas factors are inapplicable. Dorsey asserts that the Lucas factors are applied only to determine the extent of the duty owed, not whether a duty is owed in the first instance. The respondents argue that Marker adopted the Lucas factors as the primary test to determine whether a plaintiff is a third-party beneficiary of an attorney’s services, with standing to sue the attorney. The court of appeals agreed with the respondents, concluding that the district court erred when it did not apply the Lucas factors to determine whether the respondents had standing to sue. McIntosh, 726 N.W.2d at 116. The court of appeals noted that “Minnesota courts have been inconsistent in defining the proper role of the Lucas factors.” Id. ,

In Marker, a father retained an attorney for estate planning services, including a transfer of real estate to the father and son as joint tenants. 313 N.W.2d at 4. The son sued after his father’s death, complaining of higher estate taxes occasioned by the choice of a joint tenancy rather than a tenancy-in-common. Id. at 4-5. The question in the case was whether the son had standing to sue the attorney for a claim of negligent drafting when the son was never a client of the attorney. Id. at 5. We said that “the third party, in order to proceed successfully in a legal malpractice action, must be a direct and intended beneficiary of the lawyer’s services.” Id. (quoting Brody v. Ruby, 267 N.W.2d 902, 906 (Iowa 1978)). We noted that other courts had found an exception to the general rule of privity in cases involving drafting or executing a will. Id. We ultimately affirmed summary judgment in favor of the attorney, not because the son was not a direct and intended beneficiary of the attorney’s services (he clearly was), but because the attorney had not negligently caused the son to suffer a loss. Id. at 5-6. To determine the extent of the attorney’s duty to the son, we wrote:

In determining the extent of an attorney’s duty to a non-client, courts frequently consider the factors expressed by the Lucas court:
“[T]he determination whether in a specific case the defendant will be held liable to a third person not in privity is a matter of policy and involves the balancing of various factors, among which are the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conduct and the injury, and the policy of preventing future harm.”

Id. at 5 (quoting Lucas, 15 Cal.Rptr. 821, 364 P.2d at 687). We did not explicitly apply every one of the Lucas factors in Marker, but after considering the client’s intent, whether that intent was satisfied by the attorney’s work, and whether the harm the son suffered was caused by the attorney’s actions, we determined that the attorney owed no duty to the nonclient son because the son had received everything the father intended to give him under the will. Id. at 5-6.

Eleven years later, we affirmed the Marker rule in Admiral Merchants. 494 N.W.2d at 266. We said that “an intended third-party beneficiary may.bring an action for legal malpractice in those situations when the client’s sole purpose is to benefit the third party directly, and the attorney’s negligent act caused the beneficiary to suffer a loss.” Id. (citing Marker, 313 N.W.2d at 5). Without detailing our analysis, we concluded that summary judgment was inappropriate under the facts of that case because there remained genuine issues of material fact concerning the existence of an attorney-client relationship under implied contract and tort theories, as well as under the third-party beneficiary exception. Id. at 265-66. We did not draw separate conclusions under each of the theories, but simply remanded the case for further proceedings. Id. at 266.

We reaffirm the rule of law announced in Marker that in order for a third party to proceed in a legal malpractice action, that party must be a direct and intended beneficiary of the attorney’s services. To determine the extent of the duty owed to the direct and intended beneficiary of the attorney’s services, we will consider the so-called Lucas factors. Given the confusion about the meaning of the Marker decision, we think it prudent at this time to elaborate further on the meaning of “a direct and intended beneficiary.”

We turn first to the meaning of a “direct” beneficiary. A party is a direct beneficiary of a transaction if the transaction has as a central purpose an effect on the third party and the effect is intended as a purpose of the transaction. See Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275, 275-76 (1922) (concluding that the law imposes potential liability beyond the parties to the contract when the third party is actually at the heart of the contract). In the words of Justice Cardozo, writing for the court in Glafizer, the benefit to the third party must be “the end and aim of the transaction” before the beneficiary may be called direct. Id. at 275. Requiring that the transaction directly benefit the third party properly serves to prevent nonclients who receive incidental benefits from the representation, or who only receive downstream benefits, from holding the attorney liable.

We turn next to the question of who must be aware of the “intended” beneficiary — the client or the attorney? We described all of the cases we relied on in Marker as “situations in which the attorney by his actions produced an instrument that failed to carry out the testamentary intent of the testator.” Marker, 313 N.W.2d at 5. The testator intended to make a gift to someone, to make someone a beneficiary of his will, and the negligence of the attorney led to that person not receiving the gift. Clearly, the téstator-client’s intent is crucial. However, the “third-party beneficiary” exception as developed in the will context also implies an attorney’s awareness that the client’s intent is to make someone a beneficiary of his will.

The California Supreme Court suggested in Heyer v. Flaig that an intended beneficiary is a person named in the instrument: “In the case of Lucas v. Hamm * * ⅜ we embraced the position that an attorney who erred in drafting a will could be held .liable to a person named in the instrument who suffered deprivation of benefits as a result of the mistake.” 70 Cal.2d 223, 74 Cal.Rptr. 225, 449 P.2d 161, 163 (1969), superseded by statute on other grounds, Cal. Civ. Prac.Code § 340.6 (2006), as recognized in Laird v. Blacker, 2 Cal.4th 606, 7 Cal.Rptr.2d 550, 828 P.2d 691, 700 (1992). Heyer further referred to the intended beneficiaries as “persons whose rights and interests are certain and foreseeable.” Id. at 165. In Lucas, the California Supreme Court emphasized that the promisor-attorney must have understood that the promisee-client intended to benefit the third party. 15 Cal.Rptr. 821, 864 P.2d at 689. In these drafting situations, whether the instruments are wills, trust agreements, or deeds, the attorney is necessarily aware of the client’s intent when the client asks for documents making gifts or transferring property to particular persons named in the instruments.

We conclude that the attorney must be aware of the client’s intent to benefit the third party in order for the exception to be applicable. Such a requirement is in keeping with the fiduciary and ethical duties attorneys owe their clients. Imposing on attorneys a duty toward beneficiaries of whom they are unaware would risk dampening their zealous advocacy on behalf of clients, for fear of harming a third party to whom a duty might later be found to be owed.

Applying these principles to this case, we conclude that the respondents were not direct and intended beneficiaries of the attorney-client relationship between M & S and Dorsey. This case is far from the will-drafting context in which the third-party beneficiary theory was first developed. Bearing in mind that on this motion for summary judgment we must view the evidence in the light most favorable to the nonmoving party, we conclude that the respondents have not produced evidence that a central purpose of the attorney-client relationship between M & S and Dorsey was to affect the respondents or that the purpose of the transaction was to benefit the respondents. The purpose of the transaction was to close the St. Regis loans. The respondents had no direct communication with Dorsey. They acknowledged in their Participation Agreements that they purchased participations in reliance not on M & S but on their own independent evaluation of the loans. The Bank Participants have shown that Dorsey was aware of M & S’s participation model. The depositions and affidavits of Erickson say that M & S expected Dorsey’s work to benefit the Bank Participants, but that only M & S was Dorsey’s client. Even if M & S did intend Dorsey’s work to benefit the purchasers of participations, this would not be enough to impose liability under the test we have clarified above; Dorsey would need to be aware of that intent.

The record does not indicate that Dorsey was aware of that intent. Mary Jo Brenden stated she expected Dorsey would provide advice to benefit both M & S and the Participants, but she points to no conversation in which she expressed that to Dorsey. Although she asked Dorsey for advice in revising the participation agreement, and the changes were for the protection of the Participants, there is no indication that this advice was more than an incidental part of Dorsey’s representation. The names of the Bank Participants were not included in any of the instruments Dorsey drafted. No Bank Participant met with Dorsey attorneys prior to or at closing. There was no communication between the Bank Participants and Dorsey before or at closing. The respondents’ situation is more analogous to that of the plaintiffs in the California case of Goodman v. Kennedy, whose “only relationship to the proposed transaction was that of parties with whom defendant’s clients might negotiate a bargain at arm’s length.” 18 Cal.3d 335, 134 Cal.Rptr. 375, 556 P.2d 737, 743 (1976). The evidence in the record is not sufficiently probative of a third-party beneficiary relationship to allow reasonable persons to draw different conclusions. Because the respondents are not direct and intended beneficiaries, we do not reach the Lucas factors. We reverse the court of appeals and affirm the district court’s grant of summary judgment on this issue.

II.

The second issue is whether an implied contract for legal services existed between the Bank Participants and Dorsey. The court of appeals, pointing to Dorsey’s awareness that M & S would sell participation interests in the loan, and to Dorsey’s familiarity with similar transactions involving M & S, determined that genuine issues of material fact remained regarding Dorsey’s and M & S’s understanding of the scope of the representation. McIntosh, 726 N.W.2d at 117-18.

The contract theory of an attorney-client relationship requires either an express or an implied agreement. Langeland v. Farmers State Bank of Trimont, 319 N.W.2d 26, 30 (Minn.1982). The agreement can be “deduced from the circumstances, relationship, and conduct of the parties.” High v. Supreme Lodge of World, Loyal Order of Moose, 210 Minn. 471, 473, 298 N.W. 723, 725 (1941). Although “it is not expected that the elements of a contract will be as vividly portrayed by the evidence as where an express contract has been pleaded,” reliance on an implied contract “does not relieve [a] plaintiff from his burden of establishing all essential contractual ingredients.” Id. The simple fact that one party benefited from the services of the other does not impose contractual liability. Id. at 474-75, 298 N.W. at 725.

The undisputed facts demonstrate that there was no implied agreement between Dorsey and the respondents. There were no communications between the Bank Participants and Dorsey before closing. There was no notice to Dorsey that it was expected to represent the Bank Participants. Indeed, Dorsey was unable to identify the Bank Participants before closing. Viewing the evidence in the light most favorable to the respondents, the only facts supporting a denial of summary judgment regard understandings between M & S and Dorsey. This evidence is not sufficiently probative of an implied contract to allow reasonable persons to draw different conclusions. The simple fact that the respondents would benefit from Dorsey’s services does not impose contractual liability. As a matter of law, there was no implied contract for legal services between Dorsey and the respondents, and summary judgment is appropriate.

Reversed.

PAGE, J., took no part in the consideration or decision of this case.

DIETZEN, J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.

      . The 32nd bank, Bremer Business Finance Corporation, was unsuccessful in pursuing its claims against Dorsey in bankruptcy court. See In re SRC Holding Corp., 364 B.R. 1, 27, 35 (D.Minn.2007).

      . The NIGC did not determine whether approval of the Pledge Agreement was required, nor did it approve the Pledge Agreement.

      . A qui tam action is brought under a statute allowing a private person to sue for a penalty, part of which the government or a public institution will receive. Black's Law Dictionary 1282 (8th ed.2004). This qui tam action was brought under provisions of the Indian Gaming Regulatory Act, including the former 25 U.S.C. § 81 (1958), which provided for a private right of action to void collateral agreements to management agreements not approved by the NIGC.

      . Our decisions in Marker and in Admiral Merchants have indeed been interpreted inconsistently. In Francis v. Piper, the court of appeals required that the nonclient be an intended beneficiary. 597 N.W.2d 922, 924-(Minn.App.1999). Likewise, in Holmes v.

        Winners Entertainment, Inc., the court of appeals required that the nonclient be a "direct and intended” beneficiary. 531 N.W.2d 502, 505 (Minn.App.1995) (refusing to extend the exception to a shareholder’s claim against the corporation's attorneys). In contrast, the court of appeals in Goldberger v. Kaplan, Strangis & Kaplan, PA. did not articulate a threshold requirement, but concluded that the Lucas factors determine whether a nonclient is a third-party beneficiary. 534 N.W.2d 734, 738 (Minn.App.1995).

      .The Lucas court applied an additional factor not cited by the Marker opinion, namely, "whether the recognition of liability to beneficiaries of wills negligently drawn by attorneys would impose an undue burden on the profession.” 15 Cal.Rptr. 821, 364 P.2d at 688.

      . We concluded that the attorney "owed no duty” to the recipient son. 313 N.W.2d at 5. This is an incorrect statement of our conclusion. We denied relief to the son, not because the attorney owed no duty to the son, but rather because the son received what the father intended. The bequest had adverse tax consequences to the son, but we determined that those consequences were not caused by the attorney's negligence — they naturally resulted from the intention of the father as expressed in his will. Id. at 6. Our conclusion should have been that the attorney "did not breach the duty owed” to the recipient son.

      . The most recent reference we made to the rule from Marker came in a footnote in Pine Island Farmers Coop. v. Erstad & Riemer, P.A., quoting only the "sole purpose” language and noting that the facts of that case did not implicate the exception. 649 N.W.2d 444, 448 n. 4 (Minn.2002). We have not applied Marker since 1992.


author: PAGE, Justice.

text:
    Susan DUNN, et al., Appellants, v. NATIONAL BEVERAGE CORP., a Delaware corporation, et al., Respondents, DTM Distributing, Inc., Defendant.
    Nos. A06-396, A06-397.
    Supreme Court of Minnesota.
    March 6, 2008.

      Phillip R. Krass, Benjamin J. Court, Krass Monroe, P.A., Bloomington, for appellants.
    John Edward Connelly, Elizabeth Shields Keating, Faegre & Benson, L.L.P., Minneapolis, for respondents.
   OPINION

PAGE, Justice.

Appellants Susan Dunn, Richard News-trom, and Twin City Home Juice Company (collectively, Twin City) sued National Beverage Corp. (National Beverage) and DTM Distributing, Inc. (DTM), alleging, among other things, a violation of the Minnesota Franchise Act, Minn.Stat. ch. 80C (2006), and breach of contract. The jury found that National Beverage breached the franchise agreement between the parties and awarded $288,000 in damages for the breach. The jury also found that National Beverage violated the franchise act but awarded no damages for the violation. Twin City filed a post-trial motion for attorney fees under Minn.Stat. § 80C.17, subd. 3. The district court denied the motion, concluding that section 80C.17, subdivision 3, bars an award of attorney fees to a plaintiff who receives no relief under the franchise act. The court of appeals affirmed. We granted Twin City’s petition for review, and, for the reasons discussed below, we.affirm the court of appeals.

In 1972, Twin City entered into a written agreement with Chicago Home Juice that granted Twin City the right to distribute certain Chicago Home Juice products “within Twin City’s marketing area.” Chicago Home Juice also agreed not to sell its products to any customer within Twin City’s defined marketing area without Twin City’s prior written permission. Included among those products was the “Mr. Pure” brand. In 1995, Chicago Home Juice extended its agreement with Twin City for another ten years.

National Beverage acquired Chicago Home Juice in 1999. The asset purchase agreement stated that National Beverage was purchasing “[a]ll business, properties and assets of every kind and description, whether real, personal or mixed, tangible or intangible, wherever located, used or necessary in the operation of the Business.” After National Beverage acquired Chicago Home Juice, National Beverage and Twin City continued to do business in the same manner as Twin City had with Chicago Home Juice.

In March 2002, Twin City sold its assets, including its rights under the agreement with National Beverage, to Service Distributing, Inc. The purchase price was a minimum of $288,000 (to be paid in 48 monthly installments of $6,000 each), plus a share of Service Distributing’s future profits, to a maximum of $850,000 in the aggregate. Service Distributing chose DTM as its sub-distributor for National Beverage’s products. In the summer of 2002, Service Distributing stopped ordering products from National Beverage, either because of National Beverage’s actions (according to Twin City) or because Service Distributing decided to leave the business (according to National Beverage). By letter dated August 19, 2002, National Beverage warned Twin City that it would “take all steps necessary to protect [its] Mr. Pure brand in the Minnesota market.” On August 30, 2002, Service Distributing and Twin City formally terminated the purchase of Twin City’s assets by Service Distributing.

Twin City then entered into a stock purchase agreement with another company, Tri-County Beverage & Supply, Inc. (Tri-County). But National Beverage had begun an at-will, nonexclusive distributor relationship with DTM, the company formerly acting as a sub-distributor for Service Distributing, and had been shipping products to DTM since late August. Dunn testified that National Beverage refused to sell its products to Twin City, forcing Twin City to tell its customers to buy the products from DTM instead. The purchase by Tri-County never closed, according to Twin City, because National Beverage denied the existence of an agreement with Twin City and because National Beverage told Tri-County and other resellers that DTM, not Twin City, was its distributor in the area.

Twin City, along with its owners, Susan Dunn and Richard Newstrom, sued both National Beverage and DTM for damages resulting from the end of Twin City’s relationship with National Beverage. The parties tried several causes of action to a jury in September 2005, including: (1) violation of the Minnesota Franchise Act; (2) breach of contract by both National Beverage and DTM; (3) violation of the Minnesota Deceptive Trade Practices Act; (4) violation of the Minnesota Trade Secrets Act; (5) defamation; (6) tortious interference with contractual relations and prospective business advantage by DTM and National Beverage; and (7) common law business disparagement. At trial, Twin City sought as damages the $375,000 it would have received from the stock sale to Tri-County, plus prejudgment interest, plus a variety of expenses and costs Twin City claimed it incurred and benefits it claimed it did not receive because the stock sale to Tri-County was never finalized, for a total damages claim in excess of $1 million.

Twin City’s counsel prepared the first draft of the special verdict form, which contained 49 questions including subparts. Relevant to this appeal, questions 1 through 4 concerned the breach of contract, and questions 5 through 10 related to the violation of the franchise act. In his closing argument, Twin City’s counsel spoke to the jury first about the breach of contract questions and then the statutory violation questions. In doing so, he told the jury:

If I could make this comment now, so I don’t forget, all of these individual claims are important. They all have legal significance. So even though you might conclude that the damages are the same for the first cause of action and the second cause of action, don’t skip one or not do it full justice. We need answers to all of them even if the damage answer remains the same.

The trial court instructed the jury to determine the amount of money that would compensate Twin City for the breach of contract but did not separately instruct the jury to determine the amount of money that would compensate Twin City for the statutory violation. Furthermore, the court instructed the jury that “[njothing the attorneys say during the trial, including opening statement and closing argument, is evidence. * * * What the attorneys say about the law may be different from what I say. If this happens, you must rely on what I say about the law.”

In answering the special verdict questions, the jury found that National Beverage both breached its contract with Twin City and violated the franchise act. For the breach of contract, the jury awarded $288,000 in compensatory damages. For the franchise act violation, the jury specifically found that National Beverage terminated Twin City’s franchise rights without good cause. However, the jury wrote a zero in the blank for the damages that would compensate Twin City for National Beverage’s franchise act violation.

National Beverage moved for judgment notwithstanding the verdict on the breach of contract, violation of the franchise act, and defamation claims. Twin City moved for prejudgment interest under Minn.Stat. §§ 549.02-.09 (2006) and for attorney fees under the franchise act, which provides that “[a]ny suit authorized under this section may be brought to recover the actual damages sustained by the plaintiff together with costs and disbursements plus reasonable attorney’s fees.” Minn.Stat. § 80C.17, subd. 3. Additionally, Twin City moved for judgment notwithstanding the verdict to award damages of $288,000 for the statutory violation, “should such be necessary to authorize the Court to enter its Order granting Plaintiffs reasonable attorneys’ fees.” In its memorandum to the court, Twin City asserted that the same facts supporting the jury’s breach of contract award also supported an award of damages for the franchise act violation. At the motion hearing, however, Twin City withdrew its motion for judgment notwithstanding the verdict. The district court denied Twin City’s motions for prejudgment interest and attorney fees, as well as National Beverage’s motion for judgment notwithstanding the verdict.

National Beverage appealed the district court’s judgment, and Twin City cross-appealed on the denial of attorney fees. Dunn v. Nat’l Bev. Corp., 729 N.W.2d 637, 641 (Minn.App.2007). The court of appeals affirmed the district court’s rulings. Id. at 655. Twin City petitioned this court to further review the denial of attorney fees, and we granted review.

The general rule in Minnesota is that “attorney fees are not recoverable in litigation unless there is a specific contract permitting or a statute authorizing such recovery.” Barr/Nelson, Inc. v. Tonto’s Inc., 336 N.W.2d 46, 53 (Minn.1983). Because there is no specific language in the parties’ contract permitting the recovery of attorney fees, Twin City can recover attorney fees only if permitted by statute. In this case, the applicable statute is Minn. Stat. § 80C.17, subd. 3, which provides: “Any suit authorized under this section may be brought to recover the actual damages sustained by the plaintiff together with costs and disbursements plus reasonable attorney’s fees.”

We first address Twin City’s argument that an award of attorney fees under section 80C.17, subdivision 3, does not require an award of damages under the franchise act. In Martin Investors, Inc. v. Vander Bie, we rejected the argument that this provision limited awards of attorney fees to suits for monetary damages. 269 N.W.2d 868, 876 (Minn.1978). Noting that the statute “specifically permits a claim for costs and disbursements plus reasonable attorneys fees in ‘[a]ny suit authorized under this section,’ ” and noting that the statute permitted suits for rescission and restitution, we affirmed the district court’s award of attorney fees to plaintiffs who sought and were awarded rescission of the franchise agreement and restitution of their payments to the franchisor. Id. (quoting Minn.Stat. § 80C.17, subd. 3).

Twin City asks us to go one step further and hold that a plaintiff may be awarded attorney fees under section 80C.17, subdivision 3, for a violation of the franchise act even if the plaintiff receives no relief under the act at all. We decline to stretch the statutory language that far. We hold that an award of attorney fees under section 80C.17, subdivision 3, requires that the plaintiff seek and recover some relief under the franchise act.

We therefore turn to the question of whether the jury’s verdict can be construed as awarding any relief to Twin City for a violation of the franchise act. Twin City argues that the jury’s $288,000 award on the breach of contract claim also constitutes an award of damages for the franchise act violation. Thus, in short, we must determine whether the jury’s answers on the special verdict form can be harmonized in a way that suggests the jury granted Twin City relief under the act.

Twin City argues that the jury’s damage awards can and should be harmonized because the jury found National Beverage breached the franchise agreement and because the damages for the breach of the franchise agreement were identical to the damages requested for the violation of the act. According to Twin City, “[a] fair reading of the special verdict form confirms that the jury decided to not award damages for [the statutory violation] because such damages would be duplicative to those awarded [for the breach of agreement].” National Beverage contends that the jury “refused to award any relief’ to Twin City for the statutory violation.

Generally, we will not disturb a damage award unless the “failure to do so would be shocking or would result in plain injustice.” Hughes v. Sinclair Mktg., Inc., 389 N.W.2d 194, 199 (Minn.1986). We have said that appellate courts may not “sit as factfinders,” Raleigh v. Indep. Sch. Dist. No. 625, 275 N.W.2d 572, 576 (Minn. 1978), and are “not empowered to make or modify findings of fact.” Lumpkin v. N. Cent. Airlines, Inc., 296 Minn. 456, 462, 209 N.W.2d 397, 401 (1973).

However, “a special verdict form is to be liberally construed to give effect to the intention of the jury and on appellate review it is the court’s responsibility to harmonize all findings if at all possible.” Kelly v. City of Minneapolis, 598 N.W.2d 657, 662 (Minn.1999). The test is whether the special verdict answers “can be reconciled in any reasonable manner consistent with the evidence and its fair inferences.” Reese v. Henke, 277 Minn. 151, 155, 152 N.W.2d 63, 66 (1967). “If the answers to special verdict questions can be reconciled on any theory, the verdict will not be disturbed.” Hauenstein v. Loctite Corp., 347 N.W.2d 272, 275 (Minn.1984). In State v. Larsen, we noted that “one of the functions of special verdicts is to eliminate the necessity of a new trial” when certain errors occur. 275 Minn. 142, 145-46, 145 N.W.2d 430, 433 (1966). Accordingly, in cases in which special jury verdict answers were inconsistent and irreconcilable, we have changed an answer to conform to the law and the evidence. E.g., Orwick v. Belshan, 304 Minn. 338, 350, 231 N.W.2d 90, 98 (1975); Reese, 277 Minn, at 156, 152 N.W.2d at 67.

After reviewing the record, we conclude that the jury’s special verdict answers can be reconciled because the jury could have found that the breach of contract and the statutory violation, that is, the improper termination of the franchise, were separate events. For example, the jury could have found that National Beverage breached the contract when it began selling products to DTM in August 2002, in violation of the exclusivity provision in the franchise agreement. At the same time, the jury could have found that the franchise was not actually terminated, in violation of the franchise act, until National Beverage refused to sell any more product to Twin City sometime in September of 2002.

Having made those two findings, the jury could then reasonably have found that Twin City’s damages were attributable to the breach of contract and not the franchise act violation. The jury’s award of $288,000 for breach of contract equaled the guaranteed minimum price that Service Distributing had agreed to pay for Twin City’s assets, which purchase agreement Service Distributing rescinded. That is, the jury reasonably could have found that the damages attributable to National Beverage’s breach of the franchise agreement were the $288,000 that Twin City was guaranteed to receive under the sale to Service Distributing. In contrast, National Beverage’s accounting expert testified that the damages attributable to National Beverage’s refusal to do business with Twin City were zero because Twin City, which lost money throughout 2002, was no longer a financially viable business. There was no evidence contradicting that expert opinion. In addition, the expert opined that the agreement between Twin City and Tri-County was not bona fide.

Nor does it appear that the jury’s differing damage awards were either inadvertent or a mistake. As noted previously, in his closing argument, counsel for Twin City expressly told the jurors that each of the individual claims had legal significance and that, “even though [they] might conclude that the damages are the same for the first cause of action and the second cause of action, don’t skip one or not do it full justice.” On this record, we must conclude that the jury took counsel at his word.

Accordingly, we will not disturb the jury’s findings as to the amount of damages awarded for National Beverage’s breach of contract and its franchise act violation. Because we conclude that the jury’s special verdict form answers can be reconciled, we agree with the court of appeals that Twin City did not receive relief under the Minnesota Franchise Act and is, therefore, not entitled to recover attorney fees under the Act.

Affirmed.

DIETZEN, J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this matter.

      . Dunn and Newstrom own Twin City Home Juice Company. Although the company’s name subsequently was changed to Home Juice Citrus Products Mid-West, Inc., we refer to this entity by its historical name of Twin City Home Juice Company.

      . Testimony at trial indicated that Twin City contributed to an “accrual fund” that was used for marketing purposes. The jury found that the relationship between Twin City and Chicago Home Juice constituted a franchise under Minn.Stat. § 80C.01, subd. 4(a) (defining a "franchise” to require, in part, that the franchisee pay "directly or indirectly, a franchise fee”). That determination is not before us.

      . Minnesota Statutes § 80C.17, subd. 1, provides that franchisees may bring civil actions for “damages caused [by the franchisor’s violation of the act], for rescission, or other relief as the court may deem appropriate.”

      . Under Minn.Stat. § 80C.14, subd. 3(b), except for circumstances not applicable here, a franchisor cannot terminate or cancel a franchise except for good cause. Further, except for circumstances not applicable here, a franchisor may not terminate or cancel a franchise without giving the franchisee notice of and an opportunity to cure any defaults under the franchise agreement. Id., subd. 3(a).

      . The jury separately awarded Twin City $64,369.45 for a defamation claim against National Beverage, which award is not at issue here.

      .We note that the Minnesota Rules of Civil Procedure now use the term "judgment as a matter of law”; however, we will use the older term "judgment notwithstanding the verdict” because that was the term in effect at the time of the trial at issue. Minn. R. Civ. P. 50.01.

      . Minnesota Statutes § 80C.17, subd. 1, provides: "A person who violates any provision of this chapter or any rule or order thereunder shall be liable to the franchisee or sub-franchisor who may sue for damages caused thereby, for rescission, or other relief as the court may deem appropriate.”

      . Although Twin City sought as damages the amount it would have received in the stock sale to Tri-County, the jury found there was in fact no contract between Twin City and Tri-County, a finding Twin City does not contest.