author: APPEL, Justice.

text:
    In the Matter of the Estate of Hester Mary Lewis ANTON, Deceased, Gretchen Coy, Appellant, v. Nancy R. Ezarski, Fiduciary of the Estate of Hester Mary Lewis Anton, Appellee.
    No. 05-1534.
    Supreme Court of Iowa.
    April 27, 2007.
    Rehearing Denied May 16, 2007.

      Michael J. Houchins of Zenor, Houchins & Borth, Spencer, for appellant.
    Stephen J. Howell of Newbrough, Johnston, Brewer, Maddux & Howell, L.L.P., Ames, for appellee.
   APPEL, Justice.

In this case, we consider whether the sale of certain property by an attorney-in-fact prior to the death of the testator resulted in ademption of a specific property bequest. The district court found that under the facts and circumstances presented, the bequest was adeemed. The court of appeals affirmed. For the reason set forth below, we reverse.

I. FACTUAL BACKGROUND.

In 1972, the testator, Hestor Mary Lewis Anton (Mary), married Herbert Anton, the father of Gretchen Coy. It was the second marriage for both Herbert and Mary. During this marriage, Gretchen, Mary’s stepdaughter, deeded a piece of real property to her stepmother and father. Herbert and Mary built a duplex on the property. After the death of Herbert in 1976, Mary became the sole owner of the duplex property.

In 1981, Mary executed a will. In the will, she bequeathed half of her interest in the duplex to Gretchen. The remaining half interest was bequeathed to her biological son, Robert Lewis. Mary bequeathed the remainder of her estate to Robert and her daughter, Nancy Ezarski.

In 1986, Mary was involved in a serious automobile accident. After the accident, she lived in a series of nursing homes. For a short period of time, she lived in a nursing home called Riverside. Thereafter, she moved to Green Hills Health Center in Ames, where she had a private suite. Among other things, Mary suffered from Huntington’s Chorea, a malady that impacts the nervous system.

Shortly after the accident, Mary executed a durable power of attorney authorizing her daughter Nancy to manage her financial affairs. The power of attorney took effect immediately. The document was a “durable” power of attorney: it explicitly stated that it would remain in full force and effect until Mary’s death and would be unaffected by any mental or physical disability that might occur after its execution.

From 1986 until Mary’s death on December 2, 2003, Nancy handled her mother’s financial affairs. There is no evidence in the record indicating that Nancy did anything improper in connection with Mary’s assets.

On Memorial Day 1998, Nancy and her mother discussed selling the family residence to provide her mother with necessary support. After this conversation, staff at the nursing home advised Nancy that she should not discuss financial matters with her mother as it would exacerbate her condition and cause distress. As a result of this input from nursing home staff, Nancy and her mother had no further discussions regarding her financial affairs.

Nancy, acting as attorney-in-fact, began selling her mother’s assets in order to pay her ongoing living expenses. Mary was generally aware her assets were being sold off to pay for her expenses. Her only concern was that she would have enough money to continue living at Green Hills. There was, however, no evidence that Mary was ever aware that the duplex was sold.

By 2003, the only asset remaining in Mary’s estate was the duplex. The combined income from that asset and from her husband’s trust was insufficient to meet her ongoing expenses. At this point, Nancy listed the duplex property for sale. Nancy then received a call from Gretchen’s son, who informed Nancy of the terms of Mary’s will and told her she could not sell the duplex.

In light of the phone call from Gretchen’s son, Nancy took the duplex off the market and contacted an attorney, who issued an opinion stating that Nancy had the power and authority to sell the duplex. The attorney also advised, however, that the trustee of the Harold R. Lewis Trust had the discretion to distribute the principal of the trust to Mary for her health, well-being, and maintenance. Nancy then contacted the trust officer at First National Bank to inquire about obtaining a loan from the trust. She was informed that the bank preferred that all of Mary’s assets be sold prior to invading the trust’s principal. As a result, Nancy believed she had no other choice but to sell the property, which was accomplished on August 28, 2003.

The evidence in the record regarding Mary’s capacity at the time of the sale is thin. Nurses’ notes indicate that on April 16, 2003, Mary had “periods of confusion.” A social service progress note dated October 9, 2003, six weeks after the sale, makes reference to “advanced dementia.” Nancy herself appeared to have concerns regarding Mary’s mental state. Nancy indicated in a phone conversation with Gretchen Coy in June 2003 that Mary “sleeps almost all the time.” The letter to Nancy from the estate’s attorney recalled Nancy’s indication that Mary was not competent to handle her affairs at the time the sale of the duplex was being considered. At trial, however, Nancy testified that her mother was “not incompetent” at the time of the duplex’s sale.

The net proceeds of the duplex’s sale were $133,263. Nancy began to pay Mary’s living expenses out of the proceeds. At the time of Mary’s death, the remaining balance was $104,317.38.

II. PRIOR PROCEEDINGS.

After Mary’s death, Gretchen filed a claim with the estate, asserting that she was entitled to $72,625 because of the specific bequest of the duplex in Mary’s 1986 will. Nancy, acting as executor of the estate, disallowed the claim. Gretchen then proceeded to file a claim in probate court.

The estate moved for summary judgment. The estate argued that at the time of the duplex’s conveyance, Mary was not under a guardianship of any kind. The estate further asserted that all other assets previously held by Mary had been liquidated, and that the trustee of the Harold R. Lewis Trust had refused to advance funds from the trust’s principal to pay for Mary’s expenses as long as there were other assets that could be liquidated. As a result, the estate argued that the specific bequest of the duplex had been adeemed by extinction because it was no longer in the estate.

Gretchen countered the motion for summary judgment by asserting that there was a question of fact regarding Mary’s intention in connection with the sale of the duplex. Gretchen cited the conversation she had with Nancy in June 2003, in which Nancy indicated that Mary “sleeps almost all the time.” Gretchen argued that the only clear evidence of Mary’s intent was the original will. Gretchen asserted that at no time did Mary ever indicate to her an intention to alter the terms of her will. Based on this evidence, Gretchen urged the court to deny the estate’s motion for summary judgment.

On March 29, 2005, the district court denied the estate’s motion for summary judgment. The court noted that the summary judgment record shows little, if anything, about whether Mary was consulted about the sale of the duplex and whether she was able to understand her financial circumstances. The court found that there was a genuine issue of material fact as to the mental state of Mary at the time of the duplex’s sale and her involvement, if any, in the decision leading up to the sale.

The matter came to trial on August 10, 2005. On August 25, 2005, the district court entered an order denying Gretchen’s claim. The district court determined that although Mary’s mental abilities were diminishing over the last months of her life and by October 2003 she was suffering from dementia, these facts were irrelevant due to Iowa Code section 633.705(1) (2003), which provides in relevant part:

All acts done by the attorney in fact or agent pursuant to the power during any period of disability or incompetence ... have the same effect and inure to the benefit of and bind the principal and the principal’s heirs, devisees and personal representatives as if the principal were alive, competent and not disabled.

As a result of this statute, the district court reasoned that the power of attorney was not affected even if Mary was disabled or incompetent at the time of the sale of the duplex.

The district court further noted that under these facts, Mary was well aware of the general plan for her support. The district court found that given the choice, Mary’s intent was clear and established: she preferred to sell the assets and remain cared for in the nursing home. As a result, the district court held that the specific bequest in Mary’s will was adeemed by Nancy’s sale of the duplex.

Gretchen appealed the decision of the district court, and the matter was transferred to the court of appeals. The court of appeals affirmed, noting that Nancy had power of attorney which was unaffected by any mental disability that Mary may have had at the time the duplex was sold. The court of appeals adopted the trial court’s finding that the sale of the duplex was clearly a part of the testator’s intent and plan, which had been implemented over the course of several years. As a result, the property was adeemed by its sale. We granted further review.

III. STANDARD OF REVIEW.

The matter is in equity. Review of a determination in equity of the rights and obligations of parties to property devised under a will is de novo under Iowa Code section 633.33. Gustafson v. Fogleman, 551 N.W.2d 312, 314 (Iowa 1996). Weight is given to the trial court’s findings of facts, especially those involving witness credibility, but this court is not bound by the district court’s findings or conclusions of law. In re Estate of Gearhart, 584 N.W.2d 327, 329 (Iowa 1998).

IV. LEGAL BACKGROUND.

A. Iowa Approach to Ademption.

What happens when a testator makes a specific bequest of property in a validly executed will, but the property is missing from the estate at the time of death? The doctrine of ademption by extinction has been developed to address some of the difficulties that arise under these circumstances. Ademption generally means “a taking away,” and, in the context of the law of wills, refers to the removal or elimination of a specific bequest prior to the time of death. Joseph Warren, The History of Ademption, 25 Iowa L.Rev. 290, 292 (1940).

In the early twentieth century, this court adopted the identity theory of ademption. In re Will of Miller, 128 Iowa 612, 617, 105 N.W. 105, 106-07 (1905), overruled in part by Newbury v. McCammant, 182 N.W.2d 147, 149 (Iowa 1970). Under the identity rule, if specifically bequeathed property was not found in the estate at the time of death, the bequest was adeemed. Subsequent to Miller, this court routinely applied the identity rule in a number of similar contexts. In re Estate of Bernhard, 134 Iowa 603, 112 N.W. 86 (1907); In re Estate of Keeler, 225 Iowa 1349, 282 N.W. 362 (1938); In re Estate of Sprague, 244 Iowa 540, 57 N.W.2d 212 (1953). Beginning in the 1960s, however, this court began to depart from the rigid application of the identity theory in all settings.

For example, in In re Estate of Bierstedt, 254 Iowa 772, 119 N.W.2d 234 (1963), this court considered whether the sale by a guardian of specifically bequeathed real estate without the knowledge and consent of an incompetent testator caused ademption by extinction under the identity rule. In this case, the court rejected application of a “rigid identity rule” and applied what it called a “modified intention” approach. The court noted that the order establishing the guardianship demonstrated that Bierstedt was incompetent at the time the land was sold, thereby creating a presumption of lack of testamentary capacity. Bierstedt, 254 Iowa at 774, 119 N.W.2d at 235. As a result, because the testator did not have the testamentary capacity to, in effect, work a change in the will, the sale could not be considered to manifest an intention on the part of the testator to modify the will. Therefore, no ademption occurred. The court in Bierstedt expressly noted, however, that the rulings in Keeler, Sprague, and Bernhard, where competent testators themselves had sold or otherwise disposed of specific devises and bequests, “are sound and we adhere to them.” Id. at 238.

Similarly, in In re Estate of Wolfe, 208 N.W.2d 923 (1973), this court considered whether the destruction of property which was the subject of a specific bequest, contemporaneous with the death of the testator, worked an ademption. In this case, the testator had specifically bequeathed his automobile, a 1969 Buick Electra, to his brother. The testator was killed in an automobile accident in which his automobile was a total loss. Insurance proceeds that included the value of the auto were paid to the estate. The brother claimed he was entitled to the proceeds. In holding for the brother and against the estate, the court rejected the identity rule and emphasized that the intent of the testator is paramount in determining whether an ademption has occurred. Id. at 924. As a result, the court reasoned that where property is missing from the estate because of some act or event involuntary as to the testator, there is no ademption. Id.

In summary, our cases hold that the identity rule will not be rigidly applied in all cases. Under what the court has called the “modified intention theory,” the identity rule will not be applied to cases where specifically devised property is removed from the estate through an act that is involuntary as to the testator. This includes cases where the property is sold by a guardian, or conservator, or is destroyed contemporaneously with the death of the testator. Until now, however, we have not had occasion to consider whether ademption occurs when specifically devised property is sold by an attorney-in-fact.

B. Ademption Cases in Other States Involving Sales of Specifically Devised Property by Attorneys-in-Fact.

At common law, a power of attorney was revoked by the incapacity of the principal. The durable power of attorney was created to avoid the common law result and provide persons with limited means a cost-effective alternative to guardianship proceedings. All fifty states have now enacted statutes authorizing durable powers of attorney. Carolyn L. Dessin, Acting As Agent under a Financial Durable Power of Attorney: An Unscripted Role, 75 Neb. L.Rev. 574, 575-80 (1996).

While there are many eases in other states involving acts of court-appointed guardians where the testators are incompetent, there are only a few cases dealing with the question of whether acts of an agent pursuant to a durable power of attorney cause ademption of specific bequests. The cases have not reached uniform results.

The first ease dealing with the question is In re Estate of Graham, 216 Kan. 770, 533 P.2d 1318 (1975). In this case, a specific devise of real estate was sold by an agent pursuant to a power of attorney to support the testator’s stay in a rest home. After the death of the testator, the beneficiary of the specific bequest sought the balance of the proceeds remaining in the estate.

The Kansas Supreme Court held that no ademption occurred. The court emphasized that the devise was not conveyed with the full knowledge and consent of the testator during his lifetime. Id. at 1321. The court noted that it seemed logical that the same legal principles should apply to a conveyance by an attorney-in-fact acting under a power of attorney as are applicable to the acts of a guardian. Id. The court noted that were the rule otherwise, an attorney-in-fact hostile to one of the beneficiaries may adeem a gift through the sale of specifically devised property. Id. at 1322. The court emphasized, however, that the beneficiary was entitled only to the unexpended balance of the proceeds of specifically devised property. Id.

The Ohio Supreme Court considered this question in In re Estate of Hegel, 76 Ohio St.3d 476, 668 N.E.2d 474 (1996). In this case, Hegel sold the principal’s house after she had become incompetent pursuant to a durable power of attorney. The principal’s will devised the house to Hegel. Upon the principal’s death, Hegel claimed entitlement to the cash proceeds of the sale that remained in the principal’s estate. The probate court held that the devise had been adeemed by extinction. On appeal, the Court of Appeals of Ohio reversed in a 2-1 decision.

The Ohio Supreme Court reversed the court of appeals in a 4-3 decision and held that the specific devise was adeemed. The majority emphasized that while the Ohio legislature had passed a nonademption statute in regard to the actions of court-appointed guardians, it did not extend the rule to agents acting under durable powers of attorney. Id. at 477-78. The majority further noted that it did not regard those acting under powers of attorney as the same as guardians. The majority indicated that attorneys-in-fact have more freedom and can act without court approval as the principal’s alter ego. Id. at 478.

The dissenters emphasized that the critical factor was the testator’s incapacity at the time of sale, not whether the sale was made by a guardian or by agent pursuant to a power of attorney. Id. at 478-80. One dissent emphasized that attorneys-in-fact are a recent occurrence and are often encouraged by estate planners and counselors as a way of avoiding judicial supervision. Further, the dissent argued that under the approach of the majority, an agent could manipulate the sale of property for his or her own benefit.

Relying on the Ohio precedent, the Supreme Court of Nebraska recently held that the sale of a specific devise by an attorney-in-fact resulted in ademption. In re Estate of Bauer, 270 Neb. 91, 700 N.W.2d 572, 578-79 (2005). As in Ohio, the Nebraska legislature adopted an exception to ademption for the sale of property by a conservator or guardian, but not by attorneys-in-fact. In light of the specific action of the legislature exempting actions of conservators and guardians from ademption, the Nebraska Supreme Court refused to extend the exemption “by judicial fiat.” Id. at 579. Further, the Nebraska Supreme Court cited a Nebraska statute that is virtually identical to Iowa Code section 633.705(1), which states that acts done by an attorney-in-fact pursuant to a durable power of attorney bound the principal and successors in interest as if the principal were competent and not disabled. Id. The court reasoned that under this statute, ademption necessarily results from the acts of an attorney-in-fact pursuant to a durable power of attorney.

V. ANALYSIS.

Although the identity rule has been subject to substantial criticism and has been abandoned or substantially altered in the Uniform Probate Code and the Restatement (Third) of Property, neither party questioned its continued vitality either in the district court or on appeal. See Unif. Probate Code § 2-606 (1997) (adopting “ ‘intent’ theory” of ademption); Restatement (Third) of Prop.: Wills and Other Donative Transfers § 5.2(c) (1999) (specific devise fails if property is not in estate “unless failure of devise would be inconsistent with testator’s intent”). Instead, the parties have focused on whether Mary was competent at the time of sale and whether the rule in Bierstedt should be extended to cases involving attorneys-in-fact. In this posture, we do not examine the continued vitality of the identity rule, but simply apply the principles established in our case law to the facts of this case. For the reasons expressed below, we hold that the sale of the duplex by an attorney-in-fact under the circumstances presented did not result in ademption of the bequest.

A. Effect of Sale of Specifically Devised Property by Attorney-in-Fact if Mary was Incompetent at Time of Sale.

If Mary was incompetent at the time of sale of the duplex, the act would clearly be involuntary as to her. The question then arises whether the rule in Bierstedt should be extended to cases involving the sale of specifically devised property by an attorney-in-fact, In re Estate of Graham, 533 P.2d at 1321, or whether the extension should be rejected. In re Estate of Hegel, 668 N.E.2d at 478; In re Estate of Bauer, 700 N.W.2d at 579.

We follow the approach in In re Estate of Graham. It is true, however, that there are some differences between the appointment of a guardian by a court and the selection of an agent with durable power of attorney by a competent testator prior to the onset of any mental infirmity. For example, in the case of the execution of a durable power of attorney, the principal has the power to choose the agent and to approve the scope of the agent’s powers.

The rationale of Bierstedt, however, is that ademption does not occur when specifically devised property is sold as a result of acts that are involuntary to the testator. The rationale of our cases is that ademption occurs where a testator had knowledge of a transaction involving a specific devise, realizes the effect of the transaction on his or her estate plan, and has an opportunity to revise the will. Where these elements are not present, no ademption occurs. The focus of analysis is on the testator and whether the testator has made a deliberate decision not to revise the will, and not on the nature of the agency causing the involuntary act. Bierstedt, 254 Iowa at 775-76, 119 N.W.2d. at 236-37; Wolfe, 208 N.W.2d at 925.

The legal contexts of In re Estate of Hegel and In re Estate of Bauer are distinguishable. In these cases, the legislature had stepped in to amend the probate code to specifically exclude acts of guardians from the rule of ademption. The legislative failure to exclude acts of agents pursuant to durable powers of attorney was found to be significant. The Iowa legislature, however, has not taken action similar to that of the legislatures in Ohio and Nebraska.

The Iowa legislature has, of course, enacted Iowa Code section 633.705(1). The district court held that if, in fact, Mary was disabled or incompetent at the time of the sale of the duplex, section 633.705(1) would cause the specific bequest of the duplex to fail as a result of ademption because the act of the attorney-in-fact would have the same force and effect as the act of the testator.

We do not agree. • Iowa Code section 633.705(1) is a variant of Uniform Power of Attorney Act section 2 (1979), which has been incorporated into the Uniform Probate Code sections 5-01, 5-02 (1997). As indicated above, the purpose of the provision is to change the common law rule that the mental disability of the principal terminated the agency relationship. Gregory S. Alexander, Ademption and the Domain of Formality in Wills Law, 55 Alb. L.Rev. 1067, 1070 (1992). In other words, a purchaser of real estate or other property can be assured clear title when dealing with a duly appointed agent operating pursuant to a valid durable power of attorney.

Our view that section 633.705(1) does not determine whether ademption occurs when property is sold by an agent acting pursuant to a durable power of attorney is supported by the language of the statute. Under section 633.705(1), “acts” of the agent are binding on third persons, including heirs. Here, the agent has not acted to cause an ademption, but only to cause the sale of property. This act — namely the sale of the property — is indeed binding on third parties, including heirs. The statute, however, is silent on the issue of who is entitled to the proceeds of the sale where the principal has made a specific bequest in a will and where identifiable proceeds are found in the estate.

B. Effect of Sale of Specifically Devised Property by Attorney-in-Fact if Mary was Competent at Time of Sale.

In the alternative, assuming that Mary was competent at the time of the duplex’s sale, the question arises as to whether an ademption should occur based, not upon the act of the attorney-in-fact in selling the property, but upon the intent of the testator expressed prior to the sale. Specifically, the estate claims that Mary on Memorial Day 1998 knew that her assets would need to be sold for her support and specifically approved of the sale of her residence by her attorney-in-fact. There appears to have been no specific discussion, however, of the sale of the duplex at any time. Further, it is conceded that Mary had no knowledge of the actual sale of the duplex over five years later. Nancy simply sold it without telling her mother in order to avoid aggravating her condition.

We do not question the wisdom of Nancy’s decision to sell the property without consulting Mary. Our only concern is the legal consequences that flow from it. This case thus raises the question of what result should occur where the principal is competent, but the attorney-in-fact sells a specific devise without the knowledge of the testator.

If Mary was aware of the transaction, was aware of the impact the transaction had on her estate plan, and did not change her will, ademption would, of course, occur under the identity theory. Here, however, Mary only had a general knowledge that assets may need to be sold for her support at some time in the future. This is simply not the same as contemporaneous knowledge that an asset that is subject to a specific devise has, in fact, been removed from the estate. Most ordinary persons would not run down to the lawyer’s office to change their will in light of a remote future contingency that has not been specifically discussed and which may or may not occur in the future. An expression of intent in the indefinite future to sell assets for support is not sufficient to cause ademption under our “modified intention theory” where the testator is not aware that the specific action has taken place. See Restatement (Third) of Agency: Knowledge Requisite to Ratification § 4.06 (2006) (ratification of acts of principal requires full knowledge of underlying transaction); Ellwood v. Mid States Commodities, Inc., 404 N.W.2d 174, 179 (Iowa 1987).

It is true that Nancy did not sell the duplex until all other sources of revenue had been exhausted for her mother’s support. It may well be that, under the circumstances, her mother would have assented to the sale of the duplex in 2003 had she been asked. But under our cases, the relevant issue is not whether Mary would have assented to the sale had she been asked, but rather whether Mary had the opportunity to change her will once she knew that the duplex was no longer part of her estate. Under the record here, she simply did not have that opportunity.

There remains a question of remedy. Gretchen seeks to recover $72,625, or half the proceeds realized upon the sale of the duplex. Some courts have held that where ademption does not occur, the devisee is entitled to the entire value notwithstanding the fact that the proceeds may have been used for the care of the testator. In re Estate of Mason, 62 Cal.2d 213, 42 Cal.Rptr. 13, 397 P.2d 1005, 1007 (1965). We have considered the issue, however, and have held that in cases where specific devises are removed from the estate as a result of an involuntary act, the devisee is entitled only to the proceeds which have not been expended on the support of the testator. Stake v. Cole, 257 Iowa 594, 599-600, 133 N.W.2d 714, 717 (1965). We see no reason to depart from Iowa precedent. As a result, Coy is entitled to $52,158.69.

VI. CONCLUSION.

For the reasons expressed above, we hold that under the facts and circumstances of this case, the sale of the duplex did not cause ademption to the extent that there were specifically identifiable proceeds in the estate at the time of death. The decision of the court of appeals is vacated, the district court judgment is reversed, and the matter is remanded to the district court for proceedings not inconsistent with this opinion.

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


source: Caselaw Access Project

author: MEYER, Justice.

license: Public Domain

text:
    Leon M. PERRY, petitioner, Appellant, v. STATE of Minnesota, Respondent.
    No. A06-1562.
    Supreme Court of Minnesota.
    May 3, 2007.

      Leon M. Perry, Bayport, MN, Pro Se.
    Lori Swanson, Attorney General, St. Paul, MN, Mike Freeman, Hennepin County Attorney, Donna J. Wolfson, Assistant County Attorney, Minneapolis, MN, for Respondent.
   OPINION

MEYER, Justice.

Leon M. Perry appeals from a summary denial of his second petition for postconviction relief arguing that the state’s failure to prove a violation of Minn.Stat. § 609.11 (1994), a firearm sentencing statute, violates his rights under Blakely v. Washington, 542 U.S. 296, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004). We affirm the post-conviction court’s denial of Perry’s petition.

On November 16, 1995, a Hennepin County jury convicted Perry of first-degree premeditated murder under Minn. Stat. § 609.185(a)(1) (2006) for the shooting death of Brian Thomas. The district court sentenced Perry to life in prison.

On direct appeal Perry challenged his conviction, claiming that the district court committed reversible error by admitting into evidence an out-of-court statement implicating Perry in the shooting and alleging that his conviction should be reversed because there were no minorities on the grand jury that indicted him. State v. Perry, 561 N.W.2d 889, 891 (Minn.1997). This court affirmed Perry’s conviction concluding that the district court did not err in admitting the out-of-court statement offered to rebut defense counsel’s assertion that Perry was lied to during his interrogation, denying Perry’s related ineffective assistance of counsel claim, and denying Perry’s claim that his Sixth Amendment rights were violated because he was indicted by a grand jury that included no person of color. Id. at 894-97.

Seven years later, on November 9, 2004, Perry filed his first petition for postconviction relief alleging that the state violated his right to equal protection under the Fourteenth Amendment because there were no persons of color on the grand jury that indicted him. Perry v. State, 705 N.W.2d 572, 574 (Minn.2005). The post-conviction court denied Perry’s petition as procedurally barred under State v. Knaffla, 309 Minn. 246, 243 N.W.2d 737 (1976). On appeal to this court, Perry argued that his Fourteenth Amendment claim was distinct from the Sixth Amendment claim asserted on his direct appeal and therefore not procedurally barred. Perry also asserted a new ineffective assistance of counsel claim on appeal. This court affirmed the denial of postconviction relief and rejected Perry’s ineffective assistance of trial counsel claim. Perry, 705 N.W.2d at 575-76.

Perry filed a second petition for postcon-viction relief on April 21, 2006. In his second petition Perry alleged that his conviction should be reversed in the interests of justice because he did not have sufficient notice that he was being charged with committing a murder with a firearm under Minn.Stat. § 609.11, a firearm sentencing statute, and that the state failed to present the Minn.Stat. § 609.11 issue to a jury as required under Blakely v. Washington and Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000). The postconviction court denied Perry’s petition, finding that Perry was given clear and usual notice with regard to the firearm charge. The postconviction court further concluded that neither Ap-prendi nor Blakely applied to Perry because his conviction was final years before either case was decided and Perry was sentenced pursuant to Minn.Stat. § 609.185(a)(1), which mandates life imprisonment — a penalty that cannot be altered, either up or down, by the district court.

On appeal to this court, Perry argues that Knqffla is inapplicable because his petition involves an issue of subject matter jurisdiction and that under Minn. R.Crim. P. 10.03 the court may take notice of the lack of jurisdiction over an offense at any time during the proceeding. Perry also contends that because the errors he asserts are fundamental and affect his substantive rights, they must be corrected in the interest of justice.

In a postconviction proceeding, the defendant bears the burden of establishing by a fair preponderance of the evidence facts that warrant reopening the case. Minn.Stat. § 590.04, subd. 3 (2006). The scope of our review in a postconviction proceeding is limited to whether there is sufficient evidence to sustain the findings of a postconviction court. Barness v. State, 290 Minn. 509, 510, 187 N.W.2d 111, 112 (1971). A postconviction court’s decision to grant or deny a new trial will not be disturbed unless there is an abuse of discretion. Fox v. State, 474 N.W.2d 821, 824 (Minn.1991).

Claims asserted in a second or subsequent postconviction petition are procedurally barred under this court’s Knaffla rule if they could have been raised on direct appeal or in a previous postconviction petition. Schleicher v. State, 718 N.W.2d 440, 449 (Minn.2006) (citing Jones v. State, 671 N.W.2d 743, 746 (Minn.2003)); see also Knaffla, 309 Minn. at 252, 243 N.W.2d at 741. There are two exceptions to the Knaffla rule: (1) a claim is so novel that the legal basis was not available on direct appeal, or (2) the interests of justice require review. White v. State, 711 N.W.2d 106, 109 (Minn.2006). The second exception applies if fairness requires it and the petitioner did not deliberately and inexcusably fail to raise the claim on direct appeal. Id.

Perry’s second postconviction petition for relief is premised on the inclusion of Minn.Stat. § 609.11 in his indictment. When Perry was indicted, he was charged with one count of murder in the first degree under Minn.Stat. §§ 609.185(1) (1994) (premeditated murder), 609.11 (minimum sentence for firearms) and one count of murder in the second degree under Minn. Stat. §§ 609.19(1) (1994) (intentional murder), 609.11 (minimum sentence for firearms). According to Perry, Minn.Stat. § 609.11 is an element of first-degree murder, or alternately a separate substantive crime, and therefore must be proven beyond a reasonable doubt to both a grand jury and trial jury. Because Minn.Stat. § 609.11 was not submitted to a jury, Perry argues that he was sentenced in violation of Blakely and Apprendi. Perry further asserts that this is a violation of his due process rights under the Sixth and Fourteenth Amendments to the United States Constitution and article 1, sections 6 and 7 of the Minnesota Constitution. Perry contends that because Minn.Stat. § 609.11 is a separate offense, Minn. R.Crim. P. 17.03 was violated because it did not properly appear on the indictment and was not submitted to a jury.

The state responds that Perry’s Minn. Stat. § 609.11 argument is procedurally barred under Knaffla and notes that even if it were not barred, his subject matter jurisdiction claim is without merit because Minn.Stat. § 609.11 is a sentencing enhancement statute, not a separate offense or element of a substantive offense, and jurisdiction has been properly established.

All of the claims raised in Perry’s second petition for postconviction relief are procedurally barred by the Knaffla rule. To the extent that Perry is arguing that Minn. Stat. § 609.11 should have been charged as an independent crime, his argument is Anaj^a-barred. It is clear that Perry knew or should have known about this claim prior to his direct appeal because Perry’s indictment stated that “on or about July 8, 1995, in Hennepin County, Minnesota, LEON MONALITO PERRY, while using a firearm within the meaning of MinnStat. § 609.11 caused the death of Br[i]an Evan Thomas, a human being, with premeditation and with intent to effect the death of that person, or another.” (Emphasis added.) Perry’s failure to raise his claim on direct appeal bars his current claim under Knaffla. See Knaffla, 309 Minn. at 252, 243 N.W.2d at 741.

Moreover, to the extent that Perry argues that Apprendi and Blakely error applies because Minn.Stat. § 609.11 was an element of the crime that should have been proven to the jury beyond a reasonable doubt, this argument is also Knaffla-barred. The Blakely opinion was issued on June 24, 2004. Perry’s first petition for postconviction relief was filed on November 9, 2004. Any Blakely challenge should have been known to Perry at the time of his first petition for postconviction relief and could have been raised at that time; such claims need not now be considered by the court. See Jones, 671 N.W.2d at 746. Therefore, we conclude that the postcon-viction court did not abuse its discretion when it determined that Knaffla barred Perry from raising the claim in his current petition for relief.

We further conclude that neither exception to the Knaffla rule applies because Perry’s claims are not novel and the interests of justice do not otherwise require review. This is not an instance in which the argument that Perry makes was unavailable to him at the time of Perry’s direct appeal or first petition for postcon-viction relief. Second, fairness does not require that we review a claim when Perry has not presented a colorable explanation of why he failed to raise these claims previously.

Even if Perry’s claims were not Knaffla-barred, his claims would fail on the merits. Perry argues that failure to submit Minn.Stat. § 609.11 to the grand jury deprives the court of jurisdiction and that a jurisdictional argument cannot be waived. Contrary to Perry’s assertion, the presence of Minn.Stat. § 609.11 in his indictment does not create a jurisdictional issue. Minnesota Statutes § 609.11 is a sentencing statute. It is used to establish a minimum sentence based on the aggravating factor of having committed a crime while using a firearm, and at the time of Perry’s conviction it did not need to be submitted to a jury. Jurisdiction over criminal offenses is governed by Minn. Stat. § 609.025 (2006). Jurisdiction to convict and sentence a defendant is established if the defendant “commits an offense in whole or in part within this state.” Minn.Stat. § 609.025. Since there is no dispute that Perry committed an offense within the state, jurisdiction exists to convict and sentence Perry.

Perry also incorrectly argues that Apprendi and Blakely apply because Minn.Stat. § 609.11 should have been proven to a jury beyond a reasonable doubt. This court has held that Blakely is inapplicable to collateral attacks on criminal prosecutions. State v. Houston, 702 N.W.2d 268, 273 (Minn.2005). In this case, Perry’s conviction was final almost a decade before Blakely was decided. Perry’s postconviction proceeding is a collateral attack on his conviction to which Blakely is inapplicable.

Affirmed.

      . In State v. Barker, this court found Minn. Stat. § 609.11 (2004) to be unconstitutional to the extent that it authorized the district court to make an upward durational departure without the aid of a jury. 705 N.W.2d 768, 773 (Minn.2005). Minnesota Statutes § 609.11, subd. 7, was amended in 2006 to provide that a factfinder must make any determinations leading to an upward departure. Act of June 1, 2006, ch. 260, art. 1, § 13, 2006 Minn. Laws 707, 717-18 (codified at Minn. Stat. § 609.11, subd. 7 (2006)). Because Perry was sentenced to life imprisonment under Minn.Stat. § 609.185(a)(1) (2006), the changes have no impact on Perry's petition.

      . The legislature relabeled Minn.Stat. § 609.185(1), changing it to Minn.Stat. § 609.185(a)(1) effective July 1, 2002. Act of May 22, 2002, ch. 401, § 15, 2002 Minn. Laws 1673, 1683. None of the relevant language in the statutory provision cited in this opinion was changed. Accordingly, for simplicity, we cite to the 2006 edition of the Minnesota Statutes.


author: 1st Helen M. Meyer Associate Justice

text:
    In re Petition for DISCIPLINARY ACTION AGAINST Carole Jean HALVERSON, a Minnesota attorney.
    No. A07-275.
    Supreme Court of Minnesota.
    May 9, 2007.
   ORDER

The Director of the Office of Lawyers Professional Responsibility has filed a petition for disciplinary action alleging that respondent Carole Jean Halverson committed professional misconduct warranting public discipline, namely, making false statements and defrauding creditors in a bankruptcy proceeding, depositing and retaining personal funds in a client trust account, and failing to cooperate with the Director’s investigation, in violation of Minn. R. Prof. Conduct 1.15(a), 3.3(a)(1), 3.4(c), 8.4(c) and (d), 8.1(b), and Rule 25, Rules on Lawyers Professional Responsibility (RLPR).

Respondent withdraws her answer to the petition, admits her conduct violated the Rules of Professional Conduct, waives her rights under Rule 14, RLPR, and has entered into a stipulation with the Director in which they jointly recommend that the appropriate discipline is a six-month suspension from practice, effective as of the date of filing of this order, subject to the following conditions:

(a) The reinstatement hearing provided for in Rule 18(a)-(d), RLPR, is waived. Respondent shall be reinstated following the expiration of the suspension provided that at least 15 days before the expiration of the suspension period, respondent files an affidavit with the Clerk of Appellate Courts and the Director’s Office establishing that respondent is current with continuing legal education requirements, has fully complied with Rules 24 and 26, RLPR, and has satisfactorily completed all other conditions imposed by this order.
(b) Respondent shall successfully complete the professional responsibility portion of the state bar examination within one year of the date of filing of this order.
(c) Respondent shall comply with Rule 26, RLPR (requiring notice of suspension to clients, opposing counsel, and tribunals).
(d) Upon reinstatement, respondent shall be placed on probation for a period of two years, subject to the following conditions:
(1) Respondent shall cooperate fully with the Director’s Office in its efforts to monitor respondent’s compliance with probation. Respondent shall promptly respond to the Director’s correspondence by the due date. Respondent shall cooperate with the Director’s investigation of any allegations of unprofessional conduct that may come to the Director’s attention. Upon the Director’s request, respondent shall provide authorization for release of information and documentation to verify compliance with the terms of this probation.
(2) Respondent shall abide by the Minnesota Rules of Professional Conduct.

The court has independently reviewed the file and approves of the stipulated discipline except for the waiver of the reinstatement hearing provided for in Rule 18(a)-(d), RLPR. The reinstatement hearing required by Rule 18 is not waived. Respondent may petition for reinstatement after six months from the date of filing of this order.

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

IT IS HEREBY ORDERED that respondent Carole Jean Halverson is suspended from the practice of law for a minimum of six months, subject to the conditions set forth above. Respondent shall pay the sum of $900 in fees and costs under Rule 24, RLPR.

BY THE COURT:

1st Helen M. Meyer Associate Justice


author: WILLIS, Judge.

text:
    In the Matter of the WELFARE OF E.S.C.
    No. A06-707.
    Court of Appeals of Minnesota.
    May 8, 2007.

      Karl E. Robinson, Special Assistant State Public Defender, Winthrop & Wein-stine, P.A., Minneapolis, MN, for appellant.
    Lori Swanson, Attorney General, and Susan Gaertner, Ramsey County Attorney, Jeanne L. Schleh, Assistant County Attorney, St. Paul, MN, for respondent.
    Considered and decided by WILLIS, Presiding Judge; KLAPHAKE, Judge; and SHUMAKER, Judge.
   WILLIS, Judge.

Appellant challenges the district court’s order requiring her to undergo a blood test for the human immunodeficiency virus (HIV). Because we conclude that the district court has no statutory authority to order such a test, we reverse and remand.

FACTS

On February 28, 2006, St. Paul Police Officer Jesse Mollner and Probation Officer Yolanda Galvan were executing juvenile-arrest warrants. A caller had reported that appellant E.S.C., one of the juveniles whom the officers were looking for, was at a house in St. Paul. Upon arriving at the house, the officers were let in by E.S.C.’s sister. Officer Mollner went to the basement, where he found E.S.C. hiding behind a sheet. As Officer Mollner attempted to place E.S.C. under arrest, she became combative, punching the officer and yelling that she was not going to go to jail. Officer Mollner put E.S.C. in handcuffs and was escorting her out of the basement when E.S.C. bit the officer in the upper right arm.

Officer Galvan went to the basement to assist Officer Mollner. The officers were able to get E.S.C. to her feet, and as they moved E.S.C. toward the stairwell, she turned and spat in Officer Galvan’s face. Officer Mollner reported that he saw that “the majority of the spit struck [Officer Galvan’s] eyes, mouth, and nose.” By affidavit, Officer Galvan stated that E.S.C.’s saliva made contact with her eyes and was close to her nose and mouth. E.S.C. was taken from the house to juvenile detention.

On March 1, 2006, the state brought a petition against E.S.C. in juvenile court, alleging that E.S.C. had committed fourth-degree assault of a peace officer, in violation of Minn.Stat. § 609.2231, subd. 1 (2004); and fourth-degree assault of a corrections agent, in violation of Minn.Stat. § 609.2231, subd. 3 (2004). E.S.C. admitted the charges. At the disposition hearing, the state moved the district court on behalf of Officer Galvan for an order requiring E.S.C. to undergo a test for the human immunodeficiency virus (HIV), arguing that because of E.S.C.’s pregnancy, it was clear that she had been sexually active and that there was, consequently, a risk that she was infected with HIV. E.S.C. opposed the motion, arguing that the state had failed to establish a sufficient basis for the test. The district court granted the state’s motion and, as part of its disposition order, directed that E.S.C. undergo an HIV test but also ordered that the result be delivered to the court for in-camera review. Blood was drawn for the test on March 9, and the result was delivered to the district court.

On March 14, E.S.C. moved to stay the district court’s order. The state responded that the motion was moot because the test had already been performed. In addition, the state offered the affidavit of a state public-health epidemiologist, who stated that although “HIV infection as a result of mucous membrane exposure (including tissue around the eye) to the saliva of a person infected with HIV is extremely unlikely,” it is “mathematically possible.” The epidemiologist further opined that “possible exposure to HIV generates anxiety and stress for the person potentially exposed.”

The district court granted E.S.C.’s motion and stayed disclosure of the test result. In its memorandum of law, the district court noted that although Minn.Stat. § 611A.19, subd. 1(a) (2004), provides for HIV testing if a juvenile is adjudicated delinquent of one of several enumerated sex offenses or violent crimes, the list of offenses does not include Minn.Stat. § 609.2231 (2004), the assault statute that E.S.C. violated. The district court sealed the test result, and this appeal follows.

ISSUES

I. Is this appeal moot?

II. Did the district court have the authority to order that E.S.C. undergo an HIV test?

ANALYSIS

I.

The state argues that because E.S.C. has already submitted to the HIV test, this appeal is moot. E.S.C. replies that the appeal is not moot because the result of the test has not been disclosed. Minnesota courts decide only actual controversies and do not issue advisory opinions. In re McCaskill, 603 N.W.2d 326, 327 (Minn.1999). A matter is in controversy only if it involves the definite and concrete assertion of a right — a hypothetical injury is not sufficient. Kahn v. Griffin, 701 N.W.2d 815, 821 (Minn.2005). If on appeal an event occurs that renders granting effectual relief impossible, the matter becomes moot, and the appeal will generally be dismissed. State v. Brooks, 604 N.W.2d 345, 347 (Minn.2000).

The state relies on State v. Brown, 597 N.W.2d 299 (Minn.App.1999), revieio denied (Minn. Sept. 14, 1999), in which the defendant bit the victim several times, and the district court ordered that the defendant undergo an HIV test. Id. at 302. On appeal, the defendant argued that the district court lacked the authority to order him to undergo an HIV test. Id. at 305. Noting that the test had already been performed, this court held that the defendant’s appeal was moot. Id. But as E.S.C. notes, there is no indication in Brown that the test result had been sealed pending appeal. Here, the result has been sealed, and there is effectual relief that this court may grant: the destruction of the test result. We therefore conclude that E.S.C.’s appeal is not moot.

II.

E.S.C. argues that the district court lacked the statutory authority to order the HIV test and that the district court’s order violates her Fourth Amendment and privacy rights under the federal and Minnesota constitutions. Specifically, E.S.C. argues that neither Minn.Stat. § 260B.198, subd. 1 (2006), which governs juvenile dispositions, nor any other statute authorizes this test. The construction of a statute is a question of law, which this court reviews de novo. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 393 (Minn.1998). When construing a statute, this court must first determine whether the text of the statute is ambiguous, that is, whether the statute is reasonably subject to more than one interpretation. Am. Family Ins. Group v. Schroedl, 616 N.W.2d 273, 277 (Minn.2000). If the text of a statute is unambiguous, this court must give effect to the plain meaning of the statute. State v. Anderson, 683 N.W.2d 818, 821 (Minn.2004). But if the text of the statute is ambiguous and construction of the statute is required, our goal is to ascertain and effectuate the legislature’s intent. Am. Family Ins., 616 N.W.2d at 278. The words and phrases of a statute are construed according to their basic and ordinary meanings, and the statute is construed as a whole with each section read in light of the other sections. Id. at 277.

The state concedes that section 260B.198, subdivision 1, does not expressly authorize an HIV test as a disposition in a juvenile matter; rather, the state argues that the list of dispositions in section 260B.198, subdivision 1, is not exclusive. We disagree. The purpose of a juvenile disposition is to “promote the public safety and reduce juvenile delinquency” by “developing individual responsibility for lawful behavior.” Minn.Stat. § 260B.001, subd. 2 (2006). Section 260B.198, subdivision 1, provides that if the district court adjudicates a juvenile delinquent, “it shall enter an order making any of the following dispositions ... which are deemed necessary to the rehabilitation of the child.” (Emphasis added.) The statute is not ambiguous. The qualification of “any of the following” is a limitation on the possible dispositions that a district court may impose. Thus, if the statute does not provide for a given disposition, that disposition is not authorized. Cf. In re Welfare of J.L.Y., 596 N.W.2d 692, 696 (Minn.App.1999) (noting that the district court has wide discretion to select any disposition authorized by statute), review dismissed (Minn. Feb. 15, 2000).

The state argues that if the list of dispositions in section 260B.198, subdivision 1, is exclusive, the district court would be without authority to order community service or to impose a no-contact order as a disposition. But section 260B.198, subdivision 1(b), grants the district court broad authority to place a juvenile on probation, subject to conditions that are for the benefit of a juvenile’s “physical, mental, and moral well-being and behavior,” which permits a district court to require community service or impose a no-contact order as a condition of a juvenile’s probation if community service or the no-contact order would benefit the juvenile.

The state argues further that HIV testing is a form of restitution, which is authorized by section 260B.198. See Minn. Stat. § 260B.198 (2006). Restitution in juvenile cases is governed by both the restitution provision in section 260B.198, subdivision 1(e), and the general restitution statute, section 611A.04. See Minn.Stat. § 611A.04 (2006); In re Welfare of D.D.G., 532 N.W.2d 279, 282 (Minn.App.1995) (providing that in case of conflict, the general restitution statute controls), review denied (Minn. Aug. 30, 1995), and abrogated on other grounds by State v. Palubicki, 727 N.W.2d 662, 667 (Minn.2007). Restitution is an authorized disposition in a juvenile matter if a juvenile’s actions cause injury to a person or damage to property. Minn. Stat. § 260B.198, subd. 1(e). The general restitution statute, in Minn.Stat. § 611A.04, subd. 1(a), provides that a

request for restitution may include, but is not limited to, any out-of-pocket losses resulting from the crime, including medical and therapy costs, replacement of wages and services, expenses incurred to return a child who was a victim of a crime ... to the child’s parents or lawful custodian, and funeral expenses.

Whether a particular item fits within the statutory definition of restitution is a question of law, which this court reviews de novo. State v. Esler, 553 N.W.2d 61, 63 (Minn.App.1996), review denied (Minn. Oct. 15,1996).

The texts of the restitution statutes do not support the state’s argument that requiring an HTV" test is a form of restitution. Section 611A.04, subdivision 1(a), for example, requires a victim to submit an affidavit listing the total dollar amount claimed as restitution, and section 260B.198, subdivision 8, provides that should a juvenile fail “to pay the restitution in accordance with the payment schedule or structure,” the district court may hold a hearing to determine whether the juvenile violated the terms of her probation. (Emphasis added.) Requiring a victim to establish the total dollar amount claimed as restitution and imposing a “payment schedule” on the juvenile are compelling indications that restitution is limited to pecuniary compensation to the victim and does not include requiring a juvenile to undergo an HIV test. See State v. Colsch, 579 N.W.2d 482, 484 (Minn.App.1998) (holding that restitution is limited to economic losses).

Finally, as we noted above, there is a statute that authorizes a district court to order an HIV test in certain circumstances, which, the state concedes, are not present here. As applied to juvenile offenders, Minn.Stat. § 611A.19 (2006), authorizes the district court to order that a juvenile undergo an HIV test if (1) the juvenile is adjudicated delinquent of one of several enumerated sex offenses or violent crimes, (2) the victim requests or acquiesces to the test, and (3) there is evidence that the victim’s broken skin or mucous membrane came into contact with the juvenile’s blood or semen “in a manner which has been demonstrated epidemiolog-ically to transmit the human immunodeficiency virus (HIV).” By establishing these requirements, the legislature has balanced a juvenile’s privacy interest against a victim’s interest in determining the HIV status of her assailant. In effect, the state asks us to upset the balance struck by the legislature either by adding an offense that the legislature did not include to the list of qualifying offenses or by permitting the district court to order an HIV test in circumstances other than those specified in the statute. We do not have that authority. See State v. Hulst, 510 N.W.2d 262, 264 (Minn.App.1994) (providing that the court could not add to a statute’s list of convictions for which refusing to take a chemical test would result in license revocation because the court cannot supply language that the legislature omitted).

We are not without sympathy for the probation officer, and if the legislature agrees with the district court that “the protection [accorded to] public employees and taxpayers by ordering test outweighs” the minimal intrusion that E.S.C. suffered as a result of the test, it can amend section 611A.19 to include section 609.2231 in the list of qualifying offenses. Until it does so, and unless otherwise authorized by section 611A.19, the district court has no authority to order an HIV test as a disposition in a juvenile-delinquency proceeding. Having determined that the district court was without statutory authority to order the test here, we do not reach E.S.C.’s constitutional arguments.

DECISION

Because an HIV test is not an authorized disposition in a juvenile matter, and because section 611A.19 does not apply here, the district court had no authority to order that E.S.C. undergo an HIV test. We reverse and remand with the instruction that the district court destroy E.S.C.’s HIV test result without disclosing it.

Reversed and remanded.


author: HUDSON, Judge.

text:
    WAKEFIELD PORK, INC., Appellant, v. RAM MUTUAL INSURANCE COMPANY, Respondent.
    No. A06-847.
    Court of Appeals of Minnesota.
    May 15, 2007.

      Dustan J. Cross, Mark S. Ullery, Gisla-son & Hunter, L.L.P., New Ulm, MN, for appellant.
    Thomas D. Jensen, William L. Davidson, Lind, Jensen, Sullivan & Peterson, P.A., Minneapolis, MN, for respondent.
    Edward J. Laubach, Jr., Phillip L. Kunkel, Christopher W. Harmoning, Gray, Plant, Mooty, Mooty & Bennett, P.A., Cloud, MN, for amici curiae Minnesota Department of Agriculture; Minnesota Pork Producers Association; AgStar Financial Services, ACA; Minnesota Agri-Growth Council, Inc.; AgCountry Farm Credit Services, ACA; Broiler and Egg Association of Minnesota; Farm Credit Services of Minnesota Valley, PCA; Minnesota Corn Growers Association; Minnesota Farm Bureau Federation; Minnesota Milk Producers Association; Minnesota Soybean Growers Association; Minnesota State Cattlemen’s Association; and Minnesota Turkey Growers Association.
    Charles E. Spevacek, William M. Hart, Meagher & Geer, P.L.L.P., Minneapolis, MN, for amicus curiae Complex Insurance Claims Litigation Association.
    Considered and decided by HUDSON, Presiding Judge; RANDALL, Judge; and WRIGHT, Judge.
   OPINION

HUDSON, Judge.

This is an appeal from summary judgment in favor of respondent insurer on appellant’s declaratory judgment action seeking a determination of coverage and an award for the costs of defending against a complaint alleging common law nuisance, trespass, and negligence related to the operation of appellant’s pig farm. Appellant argues that the district court erred because: (1) the complaint alleged an “occurrence” within the meaning of the insurance policy; (2) the “pollution exclusion” did not preclude respondent’s duty to defend; (3) the incidental-liability coverage for accidental spillage of agricultural chemicals and “damage to property of others” provided an independent basis for arguable coverage and triggered the duty to defend; and (4) the intentional-act exclusion was not applicable. Appellant also argues that it is entitled to recover attorney fees and expenses it incurred in defending against the complaint, costs and disbursements, in addition to attorney fees resulting from this appeal. We affirm.

FACTS

In 1994, Forst Farms entered into an agreement with appellant Wakefield Pork, Inc., under which Forst Farms agreed to construct and operate a confined-animal feeding operation for housing and feeding pigs owned by Wakefield. The Forst Farms’ feeder/fattening pig operation stores the liquid animal waste in a two-stage outdoor concrete manure lagoon from which it is pumped and spread on area fields each autumn. The lagoon contains approximately 1.5 million gallons of manure. The Forst Farm is located approximately three quarters of a mile to the southeast of the residence of Gerald and Judy Wendinger.

In July 2001, the Wendingers filed a complaint against Forst Farms, Inc., and appellant. Wendinger v. Forst Farms, Inc., 662 N.W.2d 546 (Minn.App.2003). Although the case was ultimately tried solely on a theory of nuisance, the initial complaint alleged negligence, nuisance, and trespass, and sought damages and in-junctive relief. Id. at 549. In their complaint, the Wendingers alleged that the pig operation created “extremely noxious and offensive odors and gases” that caused and/or exacerbated their health problems, diminished their quality of life, curtailed their use and enjoyment of their property, and caused a decrease in the market value of their property.

Appellant approached its insurance company, respondent RAM Mutual Insurance Company, seeking defense and indemnification of the Wendinger complaint. Respondent declined to defend or indemnify for the Wendinger complaint because its policies “do not provide coverage for the actions complained of.”

Appellant successfully defended itself against the Wendinger complaint but incurred significant costs in the process. As a result, in an October 13, 2004, declaratory judgment action, appellant alleged that respondent’s denial of coverage was wrongful and sought $278,415.63 in defense costs and attorney fees, costs, and disbursements.

Both parties filed motions for summary judgment, which were heard on December 12, 2005. On March 10, 2006, the district court denied appellant’s motion for summary judgment and granted respondent’s cross-motion for summary judgment. The district court concluded that respondent did not have a duty to defend against the Wendinger complaint and that (1) there was no “occurrence” under the policy because “[hjaving made its decision to site open manure pits near an existing residence, with complete knowledge of the potential liabilities, [appellant] cannot claim that the Wendinger Action involved an ‘accident’ triggering [respondent’s] duty to defend”; (2) “the Wendinger Action falls squarely within the boundaries of [respondent’s] Policies’ pollution exclusion”; (3) the insurance policy’s incidental-liability endorsement does not apply because “the Wendinger Complaint alleged that the Wendinger’s quiet enjoyment of their property had been curtailed” and the insurance policy “does not provide coverage for the insured’s liability for damages due to the loss and enjoyment of property caused by an ongoing nuisance”; (4) the incidental coverage for spillage-of-agricultural-chemicals clause of the policy does not apply because “[t]he odors emanating from the Forst Farm hog facility were not alleged to be accidental or unexpected, and there is no way to construe the allegations in the Wendinger Action as arising from an accidental or unexpected release of noxious odors from the Forst Farm feeding operation;” and (5) the policy’s intended-acts exclusion “has no bearing on the outcome of the parties’ motions.” This appeal follows.

ISSUES

I. Did the district court err by concluding that the Wendinger complaint did not allege an “occurrence” within the meaning of the insurance policy?

II. Did the district court err by concluding that the “pollution exclusion” precluded respondent’s duty to defend against the Wendinger complaint?

III. Did the district court err by concluding that the incidental-liability coverage for accidental spillage of agricultural chemicals and/or “damage to property of others” did not trigger respondent’s duty to defend?

IV. Did the district court err by concluding that there was a genuine issue of material fact with regard to whether the “intentional-act” exclusion precluded respondent’s duty to defend if the duty were otherwise triggered?

ANALYSIS

I

On appeal from summary judgment, this court “ask[s] two questions: (1) whether there are any genuine issues of material fact and (2) whether the [district] court[] erred in [its] application of the law.” State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990).

A motion for summary judgment shall be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law. On appeal, the reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted.

Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993) (citation omitted). No genuine issue for trial exists “[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party.” DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn.1997) (alteration in original) (quotation omitted). To defeat a motion for summary judgment, a party “must do more than rest on mere aver-ments” and must establish a genuine issue for trial with substantial evidence. Id. at 69-71.

Appellant argues that the district court erred by concluding that the Wendinger complaint did not allege an “occurrence” as defined by the insurance policy and that the district court’s conclusions were not supported by the record.

“An insured may recover attorney fees from its insurer if such fees are incurred defending itself against claims by a third party when the insurer has a contractual duty to defend the insured, but has refused to do so.” Andrew L. Youngquist, Inc. v. Cincinnati Ins. Co., 625 N.W.2d 178, 187-88 (Minn.App.2001). Minnesota caselaw recognizes that “an insurer’s duty to defend arises when any part of the claim against the insured is arguably within the scope of protection afforded by the policy.” Franklin v. W. Nat’l Mut. Ins. Co., 574 N.W.2d 405, 406-07 (Minn.1998). The duty to defend “is contractual in nature and is determined by examining the complaint and the policy coverage.” Fanners Union Oil Co. v. Mut. Serv. Ins. Co., 422 N.W.2d 530, 532 (Minn.App.1988).

An insurer bears the burden of establishing that “all parts of the cause of action fall clearly outside the scope of coverage” if it wishes to avoid its duty to defend. Auto-Owners Ins. Co. v. Todd, 547 N.W.2d 696, 698 (Minn.1996). But “[w]here there is no coverage by reason of an exclusionary clause, there is no obligation to defend.” Bobich v. Oja, 258 Minn. 287, 293, 104 N.W.2d 19, 24 (1960). An insurance policy’s exclusions are construed strictly against the insurer. Thommes v. Milwaukee Ins. Co., 641 N.W.2d 877, 880 (Minn.2002). The interpretation of an insurance policy, including whether an insurer has a legal duty to defend or indemnify its insured, is a question of law, which this court reviews de novo. Auto-Owners, 547 N.W.2d at 698.

Here, the relevant portion of the insurance policy, entitled “Personal Liability (Coverage ‘L’),” reads:

We pay, up to our limit, all sums for which an insured is liable by law because of bodily injury or property damage caused by an occurrence to which this coverage applies. We will defend a suit seeking damages if the suit resulted from bodily injury or property damage not excluded under this coverage.

The policy defines an “occurrence” as “an accident which is neither expected nor intended including continuous or repeated exposure to substantially similar conditions.”

Appellant argues that there was an “occurrence” within the meaning of the policy because first, the policy defines an “occurrence” as something that is unintentional, and second, the complaint did not allege that appellant intentionally harmed the Wendingers. We agree.

The Minnesota Supreme Court has concluded that in order for an act to be excluded from coverage under an insurance policy as intentional, a court must find that the insured intended the harm, not merely that it intended to act. Am. Family Ins. Co. v. Walser, 628 N.W.2d 605, 612-13 (Minn.2001). “[W]here there is no intent to injure, the incident is an accident, even if the conduct itself was intentional” and “in analyzing whether there was an accident for purposes of coverage, lack of specific intent to injure will be determinative, just as it is in an intentional act exclusion analysis.” Id. at 612.

We recognize that the facts of Walser are distinguishable, but the opinion speaks broadly and accordingly informs our analysis in this case. Thus, it is dispositive that here, neither party argues that appellant intended to harm the Wendingers. Moreover, respondent does not contest appellant’s contention that it is in compliance with all state environmental regulations and county zoning and use ordinances. With that concession, it would be inconsistent for this court to acknowledge, on the one hand, that appellant’s hog operation is legally operated and fully compliant with all applicable regulations, but to conclude, on the other hand, that appellant acted with a willful disregard or intent to harm its neighbors. Finally, respondent presumably knew that the operation of a pig farm which created approximately 1.5 million gallons of pig manure would likely result in some sort of odor. If respondent wanted to limit its coverage in this situation, it could have easily written it into the policy.

For these reasons, we conclude that the district court erred by concluding that there was no “occurrence” within the meaning of the insurance policy. Before finding a duty to defend, however, we must address whether the policy’s exclusions operated to preclude coverage of the Wen-dinger complaint.

II

Appellant argues that the district court erred by concluding that the insurance policy’s exclusions precluded respondent’s duty to defend the Wendinger complaint because (1) the pollution exclusion applied to neither the damages the Wendingers claimed occurred within their home nor the Wendingers’ personal injury claims; and (2) the pollution exclusion only applied to pollution of the atmosphere, not pollution of the air inside the Wendinger home.

We first address whether the pollution exclusion applies to the Wendinger complaint. The pollution-exclusion provision of the insurance policy excludes from coverage any liability resulting either directly or indirectly from:

[t]he discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon the land, the atmosphere or a water course, body of water, bog, marsh, ground water, swamp or wetland, except as provided by Incidental Liability Coverage (Coverage “N”).

“Provisions in an insurance policy are to be interpreted according to both ‘plain, ordinary sense’ and ‘what a reasonable person in the position of the insured would have understood the words to mean.’ ” Farmers Home Mut. Ins. Co. v. Lill, 332 N.W.2d 635, 637 (Minn.1983) (quoting Canadian Universal Ins. Co. v. Fire Watch, Inc., 258 N.W.2d 570, 572 (Minn.1977)). “Fume” is defined by the American Heritage Dictionary as: “1. Vapor, gas, or smoke, especially if irritating, harmful, or strong. 2. A strong or acrid odor.” The American Heritage Dictionary 734 (3d ed.1996).

The basis of the Wendinger complaint was harm from the “[g]ases, hydrogen sulfide among others,” and the “noxious and offensive odors” that emanated from appellant’s pig farm. Based on the plain meaning of the language in the contract, we conclude that the Wendinger complaint alleged damage from a substance that is plainly covered by the insurance policy’s pollution exclusion.

Furthermore, the insurance policy indicates that the pollution exclusion applies to the Personal Liability (Coverage “L”) portion of the policy, which provides coverage for “bodily injury or property damage caused by an occurrence to which this coverage applies.” The policy defines “property damage” as either “physical injury to tangible property including all resulting loss of use of that property” or “loss of use of tangible property that is not physically injured.” The Wendinger complaint alleged the loss of the use and enjoyment of their property, which is clearly encompassed by the policy’s definition of “property damage.”

Next we consider appellant’s argument regarding the scope of the word “atmosphere.” Relying on Bd. of Regents v. Royal Ins. Co. of Am., 517 N.W.2d 888 (Minn.1994), appellant argues that the pollution exclusion only applies to release of pollution into the atmosphere and not pollution of the air inside the Wendingers’ home. We disagree. In Bd. of Regents, the supreme court addressed whether pollution exclusions excluded coverage for asbestos claims. Id. at 889. The underlying claims were asserted against a manufacturer of asbestos-containing fireproofing material and sought damages for the cost of removing the asbestos from the building. Id. They alleged that asbestos fibers in those materials were released from the fireproofing materials that were installed inside a building. Id. at 891-92.

Differentiating between the pollution of the “atmosphere” and the pollution of the “ah’,” the supreme court concluded:

We are not saying here that air inside a building differs from the air outside, or that the inside and outside air do not intermingle. Rather, within the context of the pollution exclusion, the distinction is not in the air itself but where the air happens to be.... We conclude, therefore, that the term “atmosphere” in the pollution exclusion does not exclude coverage under the primary policies for the contamination or pollution of air within a building.

Id. at 893. However, the pollution alleged in Bd. of Regents was caused by asbestos and originated from inside a building. Id. at 891. Bd. of Regents did not address a situation where contaminants were released “into the atmosphere” from neighboring land and then contaminated or polluted air inside a building. Thus, the facts of this case are readily distinguishable. The Wendinger complaint did not allege damage from pollution that originated from within their home; the complaint was based on pollution released directly into the atmosphere that indirectly affected the inside of their house.

We conclude that the Wendinger complaint fell squarely within the insurance policy’s pollution exclusion. “Where there is no coverage by reason of an exclusionary clause, there is no obligation to defend.” Bobich, 258 Minn. at 293, 104 N.W.2d at 24. The pollution exclusion precluded respondent’s duty to defend under the insurance policy regardless of whether the Wendinger action alleged an “occurrence.”

Ill

Appellant argues that two of the insurance policy’s incidental-liability coverage provisions triggered respondent’s duty to defend despite the pollution exclusions. Appellant argues that respondent had a duty to defend because (1) the Wendinger complaint alleged a “sudden or abrupt and accidental or unexpected” discharge of odor and because manure is an “agricultural chemical”; and (2) that the Wending-er complaint was covered by the “damage to property of others” provision of the policy.

We first address whether the Wendinger complaint alleged a “sudden or abrupt and accidental or unexpected discharge.” The pollution-exclusion provision of the insurance policy excludes from coverage any liability resulting from the discharge of certain materials “except as provided by Incidental Liability Coverage (Coverage ‘N’).” (Emphasis added.) The incidental-liability coverage (Coverage “N”) portion of the policy contains a provision entitled “Accidental Spillage of Agricultural Chemicals”:

When the insured is liable, we pay for bodily injury or property damage or the cost of the cleanup and removal caused by the actual discharge, dispersal, release or escape of agricultural chemicals, liquids or gases, up to a limit of $50,000 per loss, subject to annual aggregate, used or intended for use in usual farming or agricultural operations when the discharge, dispersal, release or escape is both sudden or abrupt and accidental or unexpected.

This court has previously examined the meaning of similar language in the context of groundwater contamination and concluded that

A release is “sudden” if “the incident at issue occurs relatively quickly rather than gradually over a long period of time.” The term “sudden” “carries the temporal connotation of ‘abruptness.’ ” Numerous discharges of contamination that occur over an ongoing period of time do not constitute “sudden” releases, even if each release, by itself, could be termed sudden.

Westling Mfg. Co. v. W. Nat’l Mut Ins. Co., 581 N.W.2d 39, 45 (Minn.App.1998) (citation omitted), review denied (Minn. Sept. 22, 1998). Here, the Wendinger complaint alleged an ongoing, protracted discharge of offensive odor, not a series of isolated events. We apply the Westling definition of “sudden” and conclude that, regardless of whether manure is an “agricultural chemical,” the escape of pollution in this case was not covered by the “accidental-spillage” provision of the policy because it was not a “sudden or abrupt and accidental or unexpected” discharge.

Next we consider appellant’s argument that the district court erred by concluding that the Wendinger complaint was not covered by the “damage-to-property-of-others” provision of the incidental-liability coverage of the policy. The incidental-liability coverage contains a provision entitled “Damage to Property of Others” which reads, in relevant part:

Regardless of an Insured’s legal liability, we pay for property of others damaged by an Insured, or we repair or replace the property, to the extent practicable, with property of like kind and quality. Our limit for this coverage is $500 per occurrence.... The exclusions that apply to Coverages “L” and “M” do not apply to this coverage.

Here, the insurance policy does not define “damage to property of others,” but we note that the provision only refers to repairing or replacing property and sets the limit of such coverage at $500. We adopt the district court’s reasoning on this issue and conclude that this incidental-liability coverage is meant to provide for “repair or replacement of damaged property” and not for “damages due to the loss and enjoyment of property,” which is the type of damage alleged in the Wendinger complaint.

We conclude that because the Wending-er complaint did not fall within the “accidental-spillage” or “damage-to-property-of-others” provisions of the incidental-liability coverage, the district court did not err by concluding that these provisions did not trigger respondent’s duty to defend.

IV

Appellant argues that the district court erred by concluding that there was a genuine issue of fact concerning whether the insurance policy’s “intentional-act” exclusion would preclude respondent’s duty to defend if the duty were otherwise triggered by the Wendinger complaint. Because we conclude that respondent had no duty to defend under the insured’s policy, we decline to address this issue.

Appellant also argues that it is entitled to attorney fees incurred as a result of bringing this action to recover attorney fees and costs associated with defending the Wendinger action. “A party may recover attorney fees and costs incurred in obtaining a declaratory judgment against an insurer for breach of its duty to defend.” Andrew L. Youngquist, Inc., 625 N.W.2d at 187 (citing Morrison v. Swenson, 274 Minn. 127, 138, 142 N.W.2d 640, 647 (1966)). Because respondent was under no duty to defend against the Wen-dinger action, appellant is not entitled to attorney fees.

DECISION

The harm alleged in the Wendinger complaint was excluded by the insurance policy’s “pollution exclusion.” It was not covered by the policy’s incidental-liability coverage provisions. Accordingly, respondent had no duty to indemnify or defend against the Wendinger complaint.

Affirmed.