author: HARTEN, Judge.

text:
    Kirk JACOBSON et al., as co-trustees for the heirs of Adam Jacobson, Deceased, Respondents, v. UNIVERSAL UNDERWRITERS INSURANCE GROUP, Appellant.
    No. CX-01-2031.
    Court of Appeals of Minnesota.
    June 25, 2002.

      Gregory J. Johnson, Karen Melling Van Vliet, Daniel J. Ryan, and Klay C. Ahrens, Johnson & Van Vliet, L.L.P., for appellant.
    John M. Degnan, Kelly A. Putney, Bass-ford, Lockhart, Truesdell & Briggs, P.A., for respondents.
    Considered and decided by WILLIS, Presiding Judge, HARTEN, Judge, and HUSPENI, Judge.

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

   OPINION

HARTEN, Judge.

Appellant argues that the district court erred in granting summary judgment for respondents by finding, as a matter of law that arbitration of respondent’s underin-sured motorist benefits claim should occur in Minnesota and Minnesota law should apply to the claim. Because we conclude that decedent was living in Hennepin County, Minnesota, at the time of the accident, appellant knew that Minnesota law could apply to its policy, and Minnesota has significant ties to the claim, we affirm.

FACTS

Appellant Universal Underwriters Insurance Company (Universal) issued an insurance policy to respondents Kirk and Karen Jacobson, effective from 1 October 1999 to 1 October 2000. The policy’s named insureds included respondents and their son, Adam Jacobson. Respondents live in Gowrie, Iowa, where Adam Jacobson was born and raised.

On 18 May 2000, Adam Jacobson, while a passenger in a friend’s car, was killed in a car accident in Hennepin County. At that time, decedent was attending his second year of automobile mechanic classes at Dunwoody Institute in Minneapolis and was approximately a month from graduation. He had rented an apartment in Hopkins and had worked as a clerk at Glenn’s Convenience Store in Minnetonka. But he maintained an Iowa driver’s license and six days before his death had arranged to have his mail sent to Gowrie, Iowa, upon his graduation from Dunwoody.

Respondents settled a wrongful death tort suit against the driver of the car, collecting the insurance policy limits. In the spring of 2001, respondents sought underinsured motorist benefits from Universal. The parties agree that the policy provides coverage for underinsured benefits. The policy also allows for arbitration of underinsured motorist benefits claims in certain circumstances:

With respect to BODILY INJURY, if WE and an INSURED can’t agree whether the INSURED is legally entitled to recover DAMAGES from the owner or driver of an UNINSURED MOTOR VEHICLE or do not agree as to the amount of DAMAGES, either party may make a written demand for arbitration.
Unless both parties agree otherwise, arbitration will take place in the county in which the INSURED lives. Local rules of law as to arbitration procedure and evidence will apply.

Respondents made written demand for arbitration to take place in Hennepin County; Universal insisted that arbitration occur in Iowa. The parties filed cross-motions for summary judgment on the issue of arbitration venue and whether Minnesota or Iowa law should apply to the claim. On 25 October 2001, the district court granted summary judgment to respondents directing that arbitration be held in Hennepin County. This appeal followed.

ISSUES

1. Did the district court correctly hold that arbitration should occur in Hennepin County?

2. Did the district court correctly find that Minnesota law should govern the arbitration claim?

ANALYSIS

On an appeal from summary judgment, we ask whether there are any genuine issues of material fact and whether the lower courts erred in their application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). “[T]he 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).

1. Venue

The district court granted respondents’ motion for summary judgment, holding that arbitration should occur in Hennepin County and noting that “[t]he plain reading and intent of the policy requires that [decedent] be living in the county where arbitration should occur.” The interpretation of an insurance policy is a question of law subject to de novo review. Metro. Prop. & Cas. Ins. Co. v. Miller, 589 N.W.2d 297, 299 (Minn.1999).

Universal argues that the district court erroneously focused on decedent as the “insured.” Universal contends that respondents Kirk and Karen Jacobson are the “insured[s]” referred to in the policy.

The policy section covering underin-sured motor vehicles defines the “INSURED” as

(1) YOU
* * * *
(4) anyone for DAMAGES they are entitled to recover because of BODILY INJURY sustained by another INSURED.

The policy defines “YOU” as a named insured under the policy. Decedent could recover damages under this definition because he is a named insured. The arbitration clause does not limit the “insured” to a living person. The policy calls for arbitration when the parties cannot agree on the amount of damages due to “bodily injury.” The policy’s definition of bodily injury includes death; and the policy indicates that a decedent’s representative could claim damages. Respondents also could recover damages because they, as decedent’s next of kin, are entitled to damages occasioned by his death.

Respondents have brought this claim in a representative capacity as co-trustees for decedent’s heirs. They have not brought the suit as named insureds or in their personal capacities seeking damages. Accordingly, under the structure of this claim, we conclude that decedent, not respondents, is the “insured” referred to in the arbitration clause.

Notwithstanding the above conclusion, we note that the arbitration clause is ambiguous as applied because both decedent and respondents fit the policy’s definition of “insured.” See Jenoff, Inc. v. New Hampshire Ins. Co., 558 N.W.2d 260, 262 (Minn.1997) (“Ambiguity exists if the language of the policy is reasonably subject to more than one interpretation.”) (citation omitted). We are obliged to resolve this ambiguity against the insurer and in accordance with the reasonable expectations of the insured. Id. (citation omitted); see also General Mills, Inc. v. Gold Medal Ins. Co., 622 N.W.2d 147, 151 (Minn.App. 2001) (when policy is ambiguous, courts apply the doctrine of contra proferentem and resolve ambiguities against the drafter), review denied (Minn. Apr. 17, 2001). Accordingly, the arbitration clause is to be construed against Universal, the drafter and the insurer; such construction would mean that decedent is the “insured.”

Finally, Universal contends that even if decedent is the “insured” referred to in the arbitration clause, arbitration should occur in Iowa because decedent intended to live in Iowa after he graduated. But the policy states that, “arbitration will take place in the county in which the INSURED lives.” This language is unambiguous and should be given its plain and ordinary meaning. See Lobeck v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246, 249 (Minn.1998). At the time of the accident, decedent lived in a rented apartment in Hopkins, attended classes in Minneapolis, and worked in Minnetonka. In short, he lived in Henne-pin County. And because the policy uses “to live” in the present tense, it is irrelevant where decedent “intended to live” after graduation.

The district court correctly decided that arbitration should occur in Hennepin County.

2. Choice of law

Before applying a choice-of-law analysis, a court should first decide if there is a conflict between the laws of the two forums. Nodak Mut. Ins. Co. v. Am. Family Mut. Ins. Co., 604 N.W.2d 91, 93-94 (Minn.2000). As relevant to the instant case, Minnesota law allows for recovery of pecuniary loss, including financial support, comfort, guidance, and protection that decedent would have provided for his next of kin. Under Iowa law, damages would be based on the estimated value of the estate that decedent would have accumulated minus what he would have been expected to consume. The parties agree that there is a conflict.

Minnesota courts have adopted the significant contacts test for determining which state’s law should apply. The test examines the following five factors:

(1) Predictability of results;
(2) Maintenance of interstate and international order;
(3) Simplification of the judicial task;
(4) Advancement of the forum’s governmental interest; and

(5) Application of the better rule of law. Id. at 94 (citations omitted). We will consider each factor.

(1) Predictability of Results
(6) This factor
represents the ideal that litigation on the same facts, regardless of where the litigation occurs, should be decided the same to avoid forum shopping.

Id. Courts place more emphasis on this factor in contract cases so parties have advance notice of which legal system will govern a dispute arising from their contract. Jepson v. Gen. Cas. Co. of Wisconsin, 513 N.W.2d 467, 470 (Minn.1994).

Due to the “unplanned nature of automobile accidents,” this factor is less important in automobile insurance cases. Nodak, 604 N.W.2d at 94 (quoting Hime v. State Farm Fire & Cas. Co., 284 N.W.2d 829, 833 (Minn.1979)). When Universal issued its policy to respondents, decedent was already living in Minnesota. Obviously, Universal could foresee that decedent could be involved in a Minnesota accident and that Minnesota law might be applied to its policy. This factor favors Minnesota law. See Gimmestad v. Gimmestad, 451 N.W.2d 662, 666 (Minn.App.1990) (predictability of results factor favored applying Minnesota law to an insurance policy issued in Texas when an insured was in an accident in Minnesota).

(2) Maintenance of Interstate Order
This factor is
primarily concerned with whether the application of Minnesota law would manifest disrespect for [Iowa’s] sovereignty or vice versa or impede the interstate movement of people and goods.

Medtronic, Inc. v. Advanced Bionics Corp., 630 N.W.2d, 438, 455 (Minn.App.2001) (citation omitted). Courts examine the contacts between the forum state and the case to determine whether to apply the forum state’s law. Jepson, 513 N.W.2d at 471.

The instant case is the type of case that we have recognized to favor application of Minnesota law. The accident occurred in Minnesota, decedent was living in Minnesota, and the summary judgment motions were filed in a Minnesota court. See Gimmestad, 451 N.W.2d at 666 (similar factors favored application of Minnesota law to determine an underinsured motorist benefits claim). Additionally, decedent was riding in a vehicle registered in Minnesota. This factor favors application of Minnesota law.

(3) Simplification of the Court’s Judicial Task

Both parties agree that the arbitrators would be able to correctly apply either Minnesota or Iowa law. Although this factor might be insignificant, this court has recognized that “the judicial task is obviously simplified when a Minnesota court applies Minnesota law.” Medtronic, 630 N.W.2d at 455 (quotation omitted). The same would be true of Minnesota arbitrators applying Minnesota law. Assuming that Minnesota arbitrators would hear the claim, this factor slightly favors application of Minnesota law.

(4) Advancement of the Forum’s Governmental Interest

This factor examines “which choice of law most advances a significant interest of the forum.” Nodak, 604 N.W.2d at 95 (quotation omitted). Minnesota courts have a recognized interest in seeing that all tort victims are fully compensated. See Jepson, 513 N.W.2d at 472 (noting that this is an important governmental interest). This interest is not limited to residents. See Gimmestad, 451 N.W.2d at 666 (nonresident should be fully compensated). Decedent lived in Minnesota at the time of the accident, and the accident occurred here. Minnesota courts “are not called upon to apply rules of law inconsistent with Minnesota’s concept of fairness and equity.” Medtronic, 630 N.W.2d at 455 (quotation omitted). Unlike Minnesota law, Iowa law does not allow for the recovery of pecuniary losses. In applying Iowa’s law, the arbitrators would not compensate decedent’s beneficiaries to the full extent allowed by Minnesota law. This factor also favors application of Minnesota law.

(5) Application of the Better Rule of Law

Because the first four factors favor application of Minnesota law, we need not address the better rule of law factor. See Medtronic, 630 N.W.2d at 455-56; see also Nodak, 604 N.W.2d at 96 (the supreme court has not emphasized this factor for nearly 20 years).

In summary, the factors generally favor application of Minnesota law. Even in close cases, the supreme court has determined that the state where the accident occurred has the strongest governmental interest and its law should apply. Nodak, 604 N.W.2d at 92. We conclude that the district court correctly determined that Minnesota law should apply to the arbitration claim.

DECISION

We hold that arbitration should occur in Hennepin County and that Minnesota law should be applied by the arbitrator.

Affirmed.

      . Appellant argues that decedent's status as an insured under the policy is irrelevant because Iowa law permits survivors to recover under their own policies even if the decedent is not covered by these policies. See Wetherbee v. Econ. Fire & Cas. Co., 508 N.W.2d 657, 661 (Iowa 1993). Iowa law is not binding on this court. And, unlike Wetherbee, this is not a coverage case.

      . The parties also agree that either state has sufficient contacts to the case so the law of either state could be constitutionally applied. See Jepson v. Gen. Cas. Co. of Wisconsin, 513 N.W.2d 467, 469 (Minn.1994).


source: Caselaw Access Project

author: HUSPENI, Judge.

license: Public Domain

text:
    In re RAMSEY COUNTY, o/b/o PIERCE COUNTY, WISCONSIN, Respondent, Gabrielle Joy Hruska, Respondent, v. Ryan M. Carey, Appellant.
    No. C7-01-2052.
    Court of Appeals of Minnesota.
    June 25, 2002.

      Susan E. Gaertner, Ramsey County Attorney, Dawn R. Burlingame, Assistant County Attorney, St. Paul, MN, for respondent Ramsey County.
    Gabrielle Joy Hruska, Prescott, WI, pro se respondent.
    Daniel S. McGrath, Steingart, McGrath & Moore, LLC, Minneapolis, MN, for appellant.
    Considered and decided by RANDALL, Presiding Judge, STONEBURNER, Judge, and HUSPENI, Judge.
   OPINION

HUSPENI, Judge.

On appeal from the denial of his motion to reduce his support obligation, appellant-father, who is totally disabled and lives with his parents, alleges (a) payments by his parents for his expenses should not be imputed to him as income; (b) his current net monthly income is below the poverty line, making child-care cost reimbursement presumptively unreasonable; and (c) equity requires that his support obligation be adjusted to be commensurate with his disability benefits. Because we agree that the magistrate erred in including as income to appellant the value of expenses met by his parents, and because without inclusion of that value in appellant’s income, his child support obligation would be less than his minor child receives as derivative disability benefits, and because payment of child-care costs would be unreasonable, we reverse.

PACTS

In 1999, respondent Ramsey County, on behalf of respondent Gabrielle J. Hruska, filed a paternity action against appellant Ryan M. Carey. After a hearing, the district court adjudicated Carey the father of respondent’s child and, pursuant to the parties’ agreement, entered an order establishing a $300 monthly child support obligation beginning January 1, 2000.

Carey was subsequently adjudicated totally disabled by the Social Security Administration and began receiving disability benefits. At present his sole income is $633 per month in disability benefits. While Carey’s application to be adjudicated as disabled was pending, his parents heeded advice of various mental health advocates and created a supplemental needs trust (the trust) for him.

In August 2000, Carey moved to modify his child support obligation. Prior to the hearing, Carey indicated on the court’s information request form that his expenses were being paid by the trust. Janet Carey, Carey’s mother, who has power of attorney for Carey, represented that Carey’s monthly expenses were at least $3,000.

After a hearing, the magistrate, in an October 24, 2000 order, found that Carey had an imputed monthly income of $3,000 from the trust and $611 in disability benefits. Although the monthly guideline-determined support obligation for an income of $3,611 was $902.75, the magistrate did not modify the support obligation because no motion to increase support was pending. The magistrate granted Carey an adjustment, reducing his required payments by $107.50, to reflect the amount of dependent benefits paid to the minor child from social security. The district court affirmed the magistrate’s order and Carey did not appeal.

In April 2001, Carey again moved to modify his child support obligation. At the hearing on that motion, Janet Carey testified that Carey’s monthly expenses had decreased significantly since October 2000, because Carey was no longer able to live independently and had moved into his parents’ home. The record reflects that the only funds that have been deposited into the trust since January 1, 2001, are Carey’s disability benefits. Janet Carey testified that Carey’s expenses averaged $667 per month and that his disability payments were $633. She also testified that the monthly expenses for running her household, in which she, her husband, and Carey resided, were at least $2,700.

The magistrate imputed $900 per month of in-kind income to Carey during 2001, which was one-third of the Carey household’s monthly expenses. Subtracting out-of-pocket medical expenses of $411.79 from the imputed income and disability payments, the magistrate determined that Carey’s average net monthly income was at least $1,121.21, that guideline support would be at least $280.30, and that Carey had failed to establish a substantial change in circumstances rendering the current support order unreasonable and unfair. The magistrate also ordered that, effective May 1, 2001, Carey’s obligation to provide support for the cost of medical and dental insurance be suspended in each month in which he verified that he received insurance from Minnesota Care or medical assistance. Further, the magistrate denied Carey’s request that his contribution toward child-care costs be modified.

This appeal followed.

ISSUES

1. Does the value of living expenses provided by parents to a totally disabled adult father constitute income that may be used in calculating the father’s child support obligation?

2. Did the father show a substantial change in circumstances rendering the current child support obligation unreasonable and unfair and warranting a modification of his child support obligation?

3. Was the father’s income below the federal poverty fine and would such circumstance render the payment of child-care costs presumptively unreasonable?

ANALYSIS

The parties do not dispute that we are to review this child support magistrate’s decision in the same manner as we would if a district court had made the decision. Brazinsky v. Brazinsky, 610 N.W.2d 707, 710 (Minn.App.2000). District courts have broad discretion when deciding whether to modify child support. Putz v. Putz, No. C7-01-257, 645 N.W.2d 343, 351, 2002 WL 1291822, at *4 (Minn. 2002). We will reverse an order regarding the modification of child support “only if the district court abused its broad discretion” and reached a “clearly erroneous conclusion that is against the logic and the facts on [the] record.” Id.

Carey argues that the magistrate clearly erred by determining that his income changes did not constitute a significant change in circumstances. He argues that (1) his parents’ contribution to his living expenses should not be imputed to him as income for the calculation of his child support obligation; (2) he has shown a substantial change in circumstances because his expenses, and imputed income, have decreased dramatically; and (3) his income is below the federal poverty line and, therefore, making him pay child-care costs is presumptively unreasonable. We find Carey’s arguments to be persuasive.

I.

In setting or modifying child support, the court shall take into consideration “all earnings, income, and resources of the parents * * *.” Minn.Stat. § 518.551, subd. 5(c)(1) (Supp.2001). Income is defined as

any form of periodic payment to an individual including, but not limited to, wages, salaries, payments to an independent contractor, workers’ compensation, unemployment benefits, annuity, military and naval retirement, pension and disability payments.

Minn.Stat. § 518.54, subd. 6 (2000). On this record, the payments made by Carey’s parents for Carey’s expenses are not made to Carey. Therefore, those payments cannot be his “income” under the statutory definition of that term. Neither can we conclude that what is provided for Carey by his parents constitutes either his “earnings” or his “resources.” There is no evidence in the record that Carey has, in any way, “earned” any sums from his parents. Similarly, because there is no indication that Carey has any control over, or input regarding, the use of any of the funds expended by his parents for his expenses, we cannot say that what his parents provide for him can be deemed his “resource.” Thus, he has no income other than his $633 per month in social security disability benefits, he has no earnings, and he has no resources upon which a child support obligation may be imposed.

In addition to the earnings, income, or resources listed in Minn.Stat. § 518.551, subd. 5(c), several statutory mechanisms exist to address any atypical ability a child support obligor may have to satisfy or help satisfy a support obligation. First, Minn. Stat. § 518.551, subd. 5(b)(1) (Supp.2001), provides that when determining child support obligations, the obligor’s income includes “in-kind payments received by the obligor in the course of employment, self-employment, or operation of a business if the payments reduce the obligor’s living expenses.” In Franzen v. Borders, however, we held that expenses paid for room and board that an obligor received while imprisoned did not constitute in-kind income under this section because the expenses were not incurred “in the course of employment.” Franzen v. Borders, 521 N.W.2d 626, 630 (Minn.App.1994) (quoting Minn.Stat. § 518.551, subd. 5(b)(1) (Supp.1993)). Similarly, the expenses met by Carey’s parents here were clearly not expenses incurred “in the course of’ Carey’s employment and, therefore, this subdivision cannot be used to impute income to him.

Second, courts are authorized to impute income to parents who are voluntarily unemployed or underemployed. Minn.Stat. § 518.551, subd. 5b(d) (2000). However, if a person is “mentally incapacitated, it shall be presumed that the parent is not voluntarily unemployed or underemployed.” Minn.Stat. § 518.551, subd. 5b(e) (2000). Carey’s adjudication as totally disabled statutorily requires the presumption that he is not voluntarily unemployed or underemployed pursuant to Minn.Stat. § 518.551, subd. 5b(d).

Third, caselaw makes clear that [Minn.Stat. § ]518.551, subd. 5b(d) does not limit the power of the courts to consider whether an obligor’s unemployment or underemployment is in bad faith toward his or her support obligation.

Putz, 645 N.W.2d at 351, 2002 WL 1291822, at *7. Here, however, there is no allegation that Carey is unemployed or underemployed in bad faith.

Respondents cite to Bamier v. Wells, 476 N.W.2d 795 (Minn.App.1991), in support of their argument that the value of the room, board, and expenses that Carey’s parents provide for him should be included in his income as a “periodic payment.” There is no merit in this argument. In Bamier, we held that gifts “regularly received from a dependable source,” may properly be included in the obligor’s income for support purposes. Id. at 797. In Bamier, the obligor received monthly payments of $838 from his father, and payments of $5,000 from his grandmother each year on his birthday, Easter, and Christmas. Id. at 796. We held that the district court could take those regular, recurring monetary gifts received by the obligor into account when assessing his income for purposes of setting his child support obligation. Id. at 797.

There is a significant distinction between the circumstances of Carey and those of the obligor in Bamier, who was fully employed and received significant cash gifts from his relatives. Importantly, what has been imputed to Carey as “income” are in-kind benefits provided to him by his parents. Unlike the situation in Barnier, the record before us in this case contains no reference to any payments, “periodic” or otherwise, being made to Carey himself by his parents. Moreover, as noted above, Carey has no control over the expenditure of funds on his behalf.

Any “income” imputed to Carey by the magistrate has as its sole source the care and kindness of parents providing to an adult, disabled child those necessities that the child is unable to provide for himself. To label as “income” that which Carey’s parents are providing to him is tantamount to placing upon those parents the obligation to support their grandchild. While Carey’s parents may wish to be generous in their voluntary care and concern for their grandchild, they cannot be legally required to provide monetary support for the grandchild through the guise of imputing as “income” to Carey the value of the services and necessities provided to him by his parents.

II.

Because the magistrate erroneously imputed $900 per month income to Carey, a substantial change in circumstances is now presumed because his guideline-determined child support obligation is more than 20% and more than $50 less than his current obligation. See Minn. Stat. § 518.64, subd. 2(b)(1) (articulating presumptions for support modification proceedings.) Accordingly, his child support obligation may be modified. Minn.Stat. § 518.64, subd. 2(a) (2000) (child support obligation may be modified upon a showing of one or more changes in circumstances, including “substantially increased or decreased earnings of a party,” that renders the prior order unfair and unreasonable).

Without the $900 in imputed income, Carey’s monthly income is $633, and his guideline-determined child support obligation is $107.61. Because the minor child receives social security derivative benefits in excess of that amount, those payments satisfy Carey’s support obligation. Carey owes no current support, except for the derivative benefits provided by social security. See Holmberg v. Holmberg, 578 N.W.2d 817, 827 (Minn.App.1998) (holding that obligor’s child support obligation is offset by social security disability benefits paid on behalf of obligor’s child), aff'd on other grounds,' 588 N.W.2d 720 (Minn.1999).

III.

Carey also argues that his income is below the federal poverty line and that he, therefore, should not be required to contribute toward child-care costs. We agree.

We have previously noted that social security disability benefits are designed to protect the recipient from poverty, and the recipient receives the minimum amount necessary to do so. Becker County Hu man Servs. v. Peppel, 493 N.W.2d 573, 575 (Minn.App.1992). Despite this laudable goal, the amount of benefits Carey receives, $633 per month, still places him below the poverty level, which for the year 2001 for a family of one is approximately $715 per month. 66 Fed.Reg. 10695-10697 (Feb. 16, 2001).

Finally, Minnesota statutory requirements recognize the need to consider whether an obligor falls below the federal poverty level. MinmStat. § 518.551, subd. 5(b) provides:

The court shall review the work-related and education-related child care costs paid and shall allocate the costs to each parent in proportion to each parent’s net income, as determined under this subdivision, after the transfer of child support and spousal maintenance, unless the allocation would be substantially unfair to either parent. There is a presumption of substantial unfairness if after the sum total of child support, spousal maintenance, and child care costs is subtracted from the obligor’s income, the income is at or below 100 percent of the federal poverty guidelines.

Carey’s income, without subtractions of any kind, falls below the federal poverty guidelines. The magistrate’s denial of Carey’s request to modify his child-care cost obligation was based in large measure on the imputation of $900 per month income to him. We have found that imputation to be erroneous and conclude that substantial unfairness would result if Carey were assessed child-care costs in his present circumstances.

DECISION

The value of the room, board, and miscellaneous expenses provided to Carey by his parents does not constitute income for purposes of determining his child support obligation, nor are these items earnings or resources. Excluding this value, the decrease in Carey’s income results in a guidelines support obligation that is more than $50 and 20% less than the current order. Therefore, Carey has demonstrated a presumptive substantial change in circumstances making the current order unreasonable and unfair. Excluding the value of the room, board, and expenses provided by Carey’s parents, Carey’s monthly income is $633, and his guideline-determined child support obligation is $107.61. His child receives social security derivative benefits in excess of that amount. Therefore, we decline to assess a child support obligation beyond the social security derivative benefits now being received by the minor child. Finally, because Carey’s income is below the federal poverty line, it would be substantially unfair to assess child-care costs against him.

Reversed.

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

      . Effective September 1, 2001, Carey's $300 per month support obligation was offset by the current derivative disability benefits from the Social Security's Retirement, Survivors, and Disability Insurance program (RSDI benefit) in the amount of $112 paid to the minor child each month, resulting in a net monthly obligation of $188. Appellant is also the father of another child with a different mother. He has not been assessed child support for that child, who also receives $112 in dependent benefits from the Social Security Administration.

      . Carey appealed directly from the magistrate’s order without seeking review of that order under Minn. R. Gen. Pract. 376.01. The parties do not argue and we do not address the impact of this procedure on our scope of review. See Minn. R. Gen. Pract. 378.01 advisory comm. cmt. (addressing scope of review of rulings made in expedited child support process). Moreover, upon reviewing this record and the arguments made by these parties, we conclude that the ultimate result in this appeal would not change if we were to more fully address the scope of review in this case. Cf. Putz v. Putz, No. C7-01-257, 645 N.W.2d 343, 346-47, 2002 WL 1291822, at *3 n. 5, *4 (2002) (not addressing scope of review but applying the standard of review generally applicable to child support matter where the appeal was taken directly from magistrate's order and parties agreed that the generally applicable standard of review was the proper standard).

      . Ramsey County argues that the magistrate’s reference to "in-kind income” to characterize the value of the necessities provided to Carey by his parents is a word choice and not necessarily an application of Minn.Stat. § 518.551, subd. 5(b)(1), which is the mechanism for imputing "in kind” income. Respondent argues that if we find that Minn.Stat. § 518.551, subd. 5(b)(1), does not apply, the proper inquiry should be whether the value of those gifts should be included in income, regardless of the terminology used. We agree and accordingly examine all mechanisms for imputing income.


text:
    Calvin A. HEUER, et al., Appellants, v. COUNTY OF AITKIN, A Governmental Subdivision, Respondent.
    No. C0-01-2121.
    Court of Appeals of Minnesota.
    June 25, 2002.

      Jeffrey J. Haberkorn, Haberkorn Law Offices, Aitkin, MN, for appellants.

      Bradley C. Rhodes,- Aitkin County Attorney, James P. Ratz, Assistant Aitkin County Attorney, Courthouse West Annex, Aitkin, MN, for respondent.
    Considered and decided by RANDALL, Presiding Judge, STONEBURNER, Judge, and HUSPENI, Judge.
   OPINION

HUSPENI, Judge.

On appeal from summary judgment involving an attempt to establish a prescriptive easement over what are now public lands, appellants allege that (a) the district court erred in applying the statute of limitations in Minn.Stat. § 541.01 (2000) because the statute does not apply to prescriptive easements; (b) even if the statute does apply to such easements, the county did not become the owner of the land in question until after the prescriptive easement had already been established; and (c) equity precludes application of the statute in this case. During the pendency of this appeal, appellants moved to strike an affidavit and its attachments and an unpublished case from the appendix to respondent’s brief, and requested an award of attorney fees. Because the district court’s interpretation of Minn.Stat. § 541.01 comports with legislative intent and sound public policy, we affirm on that issue. Because it is not necessary for the land burdened by an easement to be contiguous to the land benefited, we reverse and remand for a factual determination of whether a prescriptive easement had been established over two of the subject parcels at the time respondent purchased the land. We deny appellants’ motion to strike, and the request for attorney fees.

FACTS

In September 1976, appellants Calvin A. Heuer and Eleanor Heuer purchased lake-shore property in Aitkin County from Catherine Richards. The property had first been subdivided from the remainder of a government lot in December 1924, and was conveyed several times thereafter. Catherine Richards and her husband became owners of the property in 1957. Shortly afterward, a cabin was built on the land.

At the time appellants purchased the property in 1976, a small road leading to their land ran across four, 40-acre parcels. These four parcels were acquired by respondent Aitkin County in 1937,1952, 1972, and 1994, respectively.

At the time this action commenced, the road in question provided access to appellants’ property from the west across respondent’s four parcels of land. It is undisputed that the road existed before Catherine Richards acquired the property in 1957. She used the road throughout the year, repairing and maintaining it. Appellants have also used the road regularly to gain access to their cabin in all seasons of the year. They have maintained it by graveling, draining, and cutting brush to make it passable.

Appellants brought this action seeking a declaratory judgment establishing a prescriptive easement for the road. The district court granted summary judgment for the county, holding that Minn.Stat. § 541.01 (2000), which prohibits the acquisition of title to public lands by adverse possession, applied equally to the establishment of prescriptive easements. The court noted that no evidence had been presented indicating that the proposed easement crossed anything other than a substantial amount of public land, and that the county had owned the majority of the land in question at all times relevant to the complaint.

This appeal followed.

ISSUES

1. Did the district court err in holding that Minn.Stat. § 541.01 (2000) applies to an action seeking to establish a prescriptive easement over public land?
2. Does an issue of material fact exist as to whether appellants have established the requisite 15-year period of cumulative use so as to establish a prescriptive easement over any of the four parcels of property?

ANALYSIS

On appeal from summary judgment, this court asks, first, whether there exist any genuine issues of material fact and, second, whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). No genuine issue of material fact exists “[wjhere the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party.” DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn.1997) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986)). A reviewing court need not, however, defer to a trial court’s decision on a pure question of law. Frost-Benco Elec.- Ass’n v. Minnesota Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn.1984). Statutory construction is a legal question, which this court reviews de novo. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 394 (Minn.1998).

I.

Minn.Stat. § 541.01 (2000) provides, in part:

Actions can only be commenced within the periods prescribed in this chapter, after the cause of action accrues * * *.
Such limitation shall apply to actions by or in behalf of the' state and the several political subdivisions thereof; provided that no occupant of a public way, levee, square, or other ground dedicated or appropriated to public use shall acquire, by reason of occupancy, any title thereto.

Appellants argue that MinmStat. § 541.01 addresses adverse possession, not prescriptive easements, and therefore does not preclude them from establishing a prescriptive easement over respondent’s land. Respondent, to the contrary, urges that by analogy the rules applicable to adverse possession should .also apply to prescriptive easements.

In determining which of the parties’ positions is the more persuasive, a review of the history of Minn.Stat. § 541.01 is informative. Prior to 1899, when the statute of limitations was held to operate against actions brought by the state, private entities, often hailroads, were able to assert actions for adverse possession against the state or a municipal body. See, e.g., Village of Wayzata v. Great N. Ry. Co., 50 Minn. 438, 443-44, 52 N.W. 913, 914 (1892) (occupancy of railroad buildings resting on part of public highway may ripen into adverse possession). But the rule allowing adverse possession to be established against public property was

cautiously applied, and it was held that the statute did not begin to run as to public streets, ways, levees, and grounds until they were required for actual public use.

Murtaugh v. Chicago, Milwaukee & St. Paul. Ry. Co., 102 Minn. 52, 54, 112 N.W. 860, 861 (1907) (citing Parker v. City of St. Paul, 47 Minn. 317, 50 N.W. 247 (1891)) (other citations omitted). In Parker, the Minnesota Supreme Court held that mere non-use for any length of time would not constitute an abandonment of a city’s easement in land for a public street or levee at least until the street or levee is needed for actual public use. 47 Minn, at 319, 50 N.W. at 248. In writing for the court, Justice Mitchell commented:

It may be said * * * that there is a valid reason for a distinction in this regard between public and private rights. The rights of the public are seldom guarded with the degree of care with which owners of private property guard their rights, and, consequently, acts or omissions which might weigh heavily against private persons cannot always be given the same force against the public.

Id. at 318-319, 50 N.W. at 247-48.

The prohibition against acquiring title to public land by adverse possession was added to the Minnesota statutes by 1899 Minn. Laws ch. 65. Murtaugh, 102 Minn, at 54,112 N.W. at 861. Given the common law history, it may be inferred "that the 1899 statutory amendment reflected the object, already recognized at common law, of preserving, where possible, state and municipal rights in land dedicated to public use. Caselaw following the 1899 amendment reiterated this concern by holding that adverse possession was not available to obtain land held in several different public capacities. . See,. e.g., State ex rel. Anderson v. Dist. Court of Kandiyohi County, 119 Minn. 132, 136, 137 N.W. 298, 300 (1912) (land within high water mark of navigable lake cannot be acquired by adverse possession); Murtaugh, 102 Minn, at 55, 112 N.W. at 862 (legislature did not intend to provide for acquisition of title to school lands by adverse possession).

The question we must answer is whether a distinction can be validly drawn bétween the statute’s applicability to adverse possession claims and its application to claims of prescriptive easement. We see no valid reason to create such a distinction. Although inherent differences exist between easements and title to land, Minnesota caselaw has recognized the strong similarities between the two. Rules pertaining to adverse possession are analogous to those governing easements by prescription. Dozier v. Krmpotich, 227 Minn. 503, 507-08, 35 N.W.2d 696, 698-99 (1949). Justice Mitchell’s observation in Parker that the public is less vigilant than private citizens about protecting its property rights against adverse possession, applies with equal vigor, we conclude, to a possible action for prescriptive easement. Therefore, the same public policy considerations that operate to preclude acquiring title to public land by adverse possession support the inference that the legislature intended Minn.Stat. § 541.01 to operate as well to prohibit the acquisition of a prescriptive easement in public land.

Minnesota caselaw is consistent with our conclusion that the statute prohibits establishment of a prescriptive easement in land dedicated to public use. In McCuen v. McCarvel, 263 N.W.2d 64 (Minn.1978), this court rejected a contention that claimants had acquired a prescriptive easement over an area of the defendants’ land formerly occupied by a public ditch. In holding that the claimants’ right to use the ditch was extinguished with the vacation of a town road, this court commented:

Plaintiffs presented no evidence to show that their user of the ditch for drainage was hostile to the town’s rights, but even if it were, they could not acquire an interest adverse to the public’s rights prior to vacation of the town road. Cf. Minn. St. 541.01, which provides that no occupant of a public way or other ground dedicated or appropriated to public use can acquire a title thereto by adverse possession.

Id. at 66 (citations omitted).

Appellants argue that language used by the Minnesota Supreme Court in Rogers v. Moore, 603 N.W.2d 650 (Minn.1999), underscores legal differences between the concepts of adverse possession and prescriptive easements. In upholding a finding that there was clear and convincing evidence, in a case involving two private landowners, of the requisite continuous use of a driveway for a 15-year period, so as to establish a prescriptive easement, the court in Rogers stated:

In adopting the elements of adverse possession for prescriptive easements, we stated that they are “[sjubject [ ] to such differences as are necessarily inherent to the application of the rules in such cases.” * * * [T]hese inherent differences will necessarily revolve around the fundamental difference between possessing land in the case of adverse possession and using land in the case of a prescriptive easement.

Id. at 657 (quoting and citing Romans v. Nadler, 217 Minn. 174,179,14 N.W.2d 482, 485 (1944)). The supreme court continued:

[Continuity of use will vary depending on the type of use, and accordingly the court should not view continuity of use in the context of a prescriptive easement as strictly as in the context of adverse possession.

Id. (citing Romans, 217 Minn, at 179, 14 N.W.2d at 485). We believe that the “fundamental differences” identified in Rogers refer to differences between the “bundle of rights” acquired by adverse possession and those acquired by prescriptive easement, as well as the factual requirements for proof of each cause of action, rather than differences in public policy supporting disparate legal outcomes in statutory interpretation.

Nor are we persuaded by appellants’ reliance on Lindquist v. Weber, 404 N.W.2d 884 (Minn.App.1987), review denied (Minn. June 26, 1987). In Lindquist, this court, in a narrowly-based ruling in equity, upheld a district court’s determination that Minn.Stat. § 541.01 did not operate to defeat an otherwise valid prescriptive easement for access to a lake cabin established over public land. Id. at 887. The Lindquist court noted that “[o]nly a small portion (60 feet) of the access route” crossed over a dedicated public roadway, and that the remainder of the one-mile route lay “exclusively within the boundaries of (private) property.” Id. In contrast, the easement asserted in this case appears to run exclusively, or nearly so, over property owned by respondent.

II.

Appellants contend that even if Minn.Stat. § 541.01 applies, they have established a prescriptive easement pursuant to Minn.Stat. § 541.02 (2000) over at least two of the four parcels in question since they, or their predecessors in title, had established such an easement before Aitkin County purchased those parcels for public use. In order to establish a prescriptive easement, a party must prove use for a period of 15 years, and that such use was open, continuous, actual, hostile, and exclusive. McCuen, 263 N.W.2d at 65.

Use of an easement is presumed to be adverse or hostile when the easement claimant shows open, visible, continuous, and unmolested use for the statutory period that is inconsistent with the owner’s rights, under circumstances from which the owner’s acquiescence may be inferred.

Block v. Sexton, 577 N.W.2d 521, 524 (Minn.App.1998) (citations omitted). The claimant prevails unless the defendant successfully rebuts this presumption. Hartman v. Blanding’s, Inc., 288 Minn. 415, 419, 181 N.W.2d 466, 468 (1970). If the other elements are shown, adverseness will be presumed; where the presumption is unavailable, adverseness becomes a question of fact with the burden on the party claiming the easement to prove the allegation by a preponderance of the evidence. Rice v. Miller, 306 Minn. 523, 525, 238 N.W.2d 609, 611 (1976). In undeveloped or rural areas, occasional or sporadic use may give rise to a prescriptive easement. Block, 577 N.W.2d at 524.

Appellants in this case have presented evidence indicating that the road over all four parcels was used and maintained as far back as 1957, when their predecessors-in-title acquired the lakeshore property. They presented no direct evidence, however, as to the use of the road prior to that date. The record reflects that in 1937, 1952, 1972, and 1994, respondent obtained title to the four parcels over which the road extends. Therefore, an issue of material fact exists as to whether the elements of a prescriptive easement may be established concerning two of the four parcels (those acquired in 1972 and 1994). Because the road was apparently in use for a period of 15 years before respondent gained ownership of those two parcels, appellant may be able to establish that a prescriptive easement was established before they were purchased for public use.

Respondent contends that appellants’ inability to establish the requisite period of use as to two of the four parcels in question effectively defeats their right to a prescriptive easement over the complete length of the road leading to their property. This court has held, however, that an easement is considered appurtenant, or running with the land, if it is intended to benefit the grantee’s land, even if it is not directly adjacent to the grantee’s property. Block, 577 N.W.2d at 525. Therefore, appellants’ inability to prove continuous use of two of the parcels for the statutory period does not operate to defeat their claim for a prescriptive easement as to the other two parcels. Appellants correctly assert that, should they succeed in establishing a prescriptive easement over two parcels, they may be able to petition the town under Minn.Stat. § 164.08 (2000) for a cartway over the remaining land, thus giving them access to their property. Therefore, given the material factual questions that remain, summary judgment was inappropriate. We remand to the district court for further proceedings to permit appellants to attempt to establish a prescriptive easement on the properties acquired by respondent in 1972 and 1994.

Appellants’ last contention is that, if no action at law for a prescriptive easement is available, the principles of equitable estoppel should apply to provide them with an easement over respondent’s land. See City of Rochester v. N. Side Corp., 211 Minn. 276, 280-81, 1 N.W.2d 361, 363-64 (1941) (where rights claimed by an individual were exercised in good faith and held adversely to a city’s rights, it would be inequitable for the city to be able to enforce its rights after remaining silent for over 83 years and benefiting from the individual’s use). In view of our remand to the district court for further proceedings on the question of whether a prescriptive easement can be established over two of the parcels, we need not rule directly on this issue. We note, however, that such estoppel, which most often arises in the context of the abandonment of a dedicated street, requires affirmative action by the public landowner resulting in detrimental reliance by the opposing party. Wolfson v. City of St. Paul, 535 N.W.2d 384, 387 (Minn.App.1995), review denied (Minn. Sept. 28, 1995). No such action and ensuing detrimental reliance occurred here.

Finally, we deny appellants’ motion to strike portions of respondent’s appendix, and appellants’ motion for an award of attorney fees. Appellants’ first objection addresses an affidavit and its attachments providing background information and describing the Long Lake Conservation Center. The lands in issue in this case are a part of the Center. To the extent that any of the challenged affidavit is controversial, it appears to us to be so only in response to the allegation made by appellants for the first time on appeal that their claimed prescriptive easement provides the only access to their property. In its discretion, the district court on remand may consider both parties’ arguments on this issue. A second objection by appellants addresses the inclusion of an unpublished case of this court in the appendix of respondent. Appellants’ objection to inclusion of this case is meritless. If cited in a brief or memorandum of law, a copy of an unpublished opinion must only be provided to other counsel “at the time the brief or memorandum is served.” Minn.Stat. § 480A.08 (2000). Lastly, we decline to award attorney fees.

DECISION

Minn.Stat. § 541.01 (2000) applies to actions to establish prescriptive easements. We reverse and remand for further proceedings on the question of whether a prescriptive easement as to two public parcels may be established. We deny appellants’ motion to strike an affidavit and its attachments from respondent’s appendix, and direct the district court, in its discretion, to consider such evidence on remand, as well as consider appellants’ allegation that the public property at issue in this case constitutes appellants’ sole access to their property. Appellants’ motion to strike the unpublished case from respondent’s appendix is denied, as is the request for an award of attorney fees.

Affirmed in part, reversed in part, and remanded; motions denied.

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

      . Both parties use the term "road" in this appeal. The road, which is not described with particularity in the record, is apparently a small trail providing access to appellants' property from the west.

      . For the first time on appeal, appellants claim that this road provides the sole access to their property.

      . Adverse possession of real property ripens into title when it continues for the requisite statutory period. Romans v. Nadler, 217 Minn. 174, 177, 14 N.W.2d 482, 485 (1944). A prescriptive easement, however, grants only a right to use property and does not carry with it title or a right of possession in the land. Rogers v. Moore, 603 N.W.2d 650, 656 (Minn.1999).

      . This court, in the unpublished case of Lagan v. Nohner, 1989 WL 63, No. C3-88-1712 (Minn.App. Jan. 3, 1989), applied Minn.Stat. § 541.01 to prevent establishment of a prescriptive easement in public land.

      . Minn.Stat. § 164.08, subd. 2(a) (2000), directs the town board to establish, on petition, a cartway for the benefit of
      an owner of a tract of land containing at least five acres, who has no access thereto except over the lands of others, or whose access thereto is less than two rods in width.
      Given the unclear status of the record, a factual determination as to access may be made on remand by the district court.


author: STONEBURNER, Judge.

text:
    Lori JOHNS, Respondent, v. HARBORAGE I, LTD., a/k/a America Live, a foreign limited partnership, FPM, Ltd., Defendants, Jillian’s Entertainment Corporation et al., Appellants.
    No. C1-01-2161.
    Court of Appeals of Minnesota.
    June 25, 2002.

      Frank Vogl, Patrick B. Hennessy, A.R., Hazel J. Uy, A.R., Best & Flanagan, LLP, for respondent.
    Charles E. Gillin, Sarah Sanville, Jar-dine, Logan & O’Brien, PLLP, for appellants Jillian’s.
    Dan Biersdorf, for appellant Harborage I.
    Considered and decided by RANDALL, Presiding Judge, STONEBURNER, Judge, and HUSPENI, Judge.

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

   OPINION

STONEBURNER, Judge.

Appellants Jillian’s Entertainment Corporation and its wholly owned subsidiary, Jillian’s Gator’s of Minneapolis, Inc., (Jillian’s) appeal from the district court’s grant of summary judgment to respondent Lori Johns, ruling that Jillian’s is the successor corporation of Johns’s former employer, Harborage I, Ltd., and is liable to Johns for judgments entered against Harborage I for damages and attorney fees for Johns’s Title VII and Minnesota Human Rights Act claims of sex discrimination. Because we determine that, as a matter of law, Jillian’s is not Harborage I’s successor, we reverse.

FACTS

Respondent Lori Johns was a server, hostess and cashier at Gators Bar and Grill at the Mall of America from January to March 25, 1993. Harborage, Inc. provided the employees for Gators, and Har-borage I managed Gators, as well as several other bars at the Mall of America. In June 1995, Johns sued Harborage, Inc. for employment discrimination under Title VII of the Civil Rights Act of 1964 and the Minnesota Human Rights Act. Confusion over which corporation was actually Johns’s employer for purposes of her discrimination claims was resolved when the district court determined that Harborage, Inc. (which filed bankruptcy during the lawsuit) and Harborage I were a single integrated enterprise, each of which could be considered Johns’s employer for purposes of the lawsuit. Johns amended her complaint to add FPM, Ltd. as a defendant. FPM, Ltd. was the lessee of the Gators’s premises and held the liquor license for the premises.

After a bench trial, the district court issued findings of fact, conclusions of law and an order for judgment on September 8, 1997, finding that Harborage I, as employer, subjected Johns to a hostile work environment based on her sex. The district court awarded damages, including punitive damages and attorney fees, to Johns against Harborage I and dismissed all of Johns’s claims against FPM, Ltd.

Before the district court judgments were entered, Jillian’s entered into an Asset Purchase Agreement (APA) with FPM Ltd. (d/b/a Gators), and various other entities, to purchase the assets of Gators and two other bars, the Minnesota Original Sports Bar and Knuckleheads at the Mall of America, Ltd. Neither Harborage I nor Harborage, Inc. was a party to the APA, but the selling entities share the same mailing address and offices and have common officers with Harborage, Inc. and Harborage I.

In February 1998, Harborage I appealed the district court’s judgments. On May 12, 1998, the APA closed. Pursuant to the APA, Jillian’s agreed to assume certain of the seller’s liabilities and the sellers retained certain liabilities. The assumed liabilities are defined in the APA as “the Seller’s payables up to an amount equal to the saleable inventory * * * of the Business at the Initial Closing Date * * * plus accrued vacation benefits up to [a specified limit].” Retained liabilities are defined in the APA as “all liabilities and obligations, absolute or contingent, known or unknown, due or to become due, now existing or hereafter incurred, of Seller and the Partnerships other than the Assumed Liabilities.” On the closing date, Jillian’s entered into a Transition Services Agreement with Harborage I pursuant to which Harborage I agreed to continue to provide the same administrative and labor services it previously provided to Gators until identified employees of Harborage I became Jillian’s employees.

On November 17, 1998, this court affirmed the district court’s decision; except as to punitive damages. On January 13, 1999, we awarded Johns $12,500 in attorney fees and expenses incurred on appeal. Judgment in this amount was entered against Harborage I on February 24,1999. In March 1999, Johns learned that Har-borage I’s assets had been largely liquidated and Harborage I was unable to satisfy any part of Johns’s judgments.

Johns then moved the district court to amend her complaint to add Jillian’s as defendants, asserting that “beyond any reasonable doubt” Jillian’s is a successor to Harborage I and is liable for the judgment. Harborage I did not oppose the motion which was granted by the district court on September 30, 2000. Jillian’s was served with the amended complaint. Jillian’s answered denying that it is Harbor-age I’s successor and denying that Jillian’s had any contractual relationship with either Harborage I or Harborage, Inc.

After Jillian’s was added to the complaint as a defendant, Johns served a Garnishment Summons and Garnishment Non-Earnings Disclosure on Jillian’s. Jillian’s responded timely, denying liability. Johns then moved for summary judgment against Jillian’s in the underlying lawsuit to which Jillian’s had been added as a defendant.

Johns argued that Jillian’s purchased all of the operating assets of a number of affiliates of Harborage I, all of which shared common offices and officers with Harborage I. Johns also argued that because Jillian’s entered into agreements with Harborage I whereby former employees of Harborage, Inc. became Jillian’s employees and because Jillian’s continues to operate Gator’s essentially unchanged from when Harborage I operated the business, Jillian’s “was and is a direct successor, contractually and otherwise, as employer, of the employees and business operations of the Gator’s in the Mall of America.”

Jillian’s filed a cross motion for summary judgment, objecting to the procedure by which it was made a defendant and denying that it is a successor to Harborage I.Jillian’s argued that it did not purchase any assets from Harborage, Inc. or Har-borage I, or merge with, or acquire or assume any liability of those businesses in any way. Jillian’s noted that Harborage I is an existing entity separate from Jillian’s.

The district court denied the parties’ request for oral argument on the summary judgment motions, granted Johns’s motion for summary judgment, and denied Jillian’s motion for summary judgment. The district court ordered the judgments amended to add Jillian’s as judgment debtors, ruling that under federal or state law, Jillian’s is a successor of Harborage I and is liable for the judgments against Harbor-age I. Jillian’s appeals.

ISSUES

I. Did the district court abuse its discretion by granting Johns’s post-judgment, post-appeal motion to amend the complaint to add Jillian’s as a defendant?

II. Did the district court err by determining as a matter of law that Jillian’s is a successor of Harborage I?

III. If Jillian’s is Harborage I’s successor, is Jillian’s liable for the judgments Johns obtained against Harborage I, including the award of attorney fees by the district court and this court?

ANALYSIS

I. Post-judgment, post-appeal amendment to complaint

Whether a complaint may be amended post-judgment, post-appeal to add a defendant appears to be an issue of first impression in Minnesota. Minn. R. Civ. P. 15.01 provides in relevant part:

A party may amend a pleading once as a matter of course at any time before a responsive pleading is served. * * * Otherwise a party may amend a pleading only by leave of court * * * and leave of court shall be freely given when justice so requires.

The rules regarding amendment of pleadings are to be liberally construed. Carlson v. Hennepin County, 479 N.W.2d 50, 54 (Minn.1992). Amendment of pleadings is a matter within the discretion of the district court and will not be reversed unless the court abused its discretion. Brendsel v. Wright, 301 Minn. 175, 178, 221 N.W.2d 695, 696-97 (1974); Dale v. Pushor, 246 Minn. 254, 262, 75 N.W.2d 595, 601 (1956).

Johns argues that the broad authority to amend a pleading exists even after judgment is entered, citing Minn. R. Civ. P. 15.02 and cases decided pursuant to that rule. Rule 15.02, however, deals with amending pleadings, even post judgment, to conform to issues tried by express or implied consent of the parties. Neither Rule 15.02 nor cases decided pursuant to it provide authority for a post-judgment, post-appeal amendment to a complaint to add a new party.

Cases interpreting the analogous federal rule, Fed.R.Civ.P. 15(a), generally hold that a district court may not consider a motion for leave to amend after judgment is entered, unless the judgment is vacated or set aside under Rule 59 or Rule 60. 6 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1489 (2d ed.1990). In EEOC v. SWP, Inc., however, a post-judgment amendment was allowed pursuant to Fed.R.Civ.P. 25(c) to add as a defendant a corporation that had purchased all of the assets of the originally named-defendant corporation. 153 F.Supp.2d 911, 913-17, 926-27 (N.D.Ind.2001).

In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party.

Fed.R.Civ.P. 25(c). Minnesota has an identical rule, Minn. R. Civ. P. 25.03, but the rule applies only to the transfer of an interest while an action is pending. 1 David F. Herr & Roger S. Haydock, Minnesota Practice § 25.6 (1998). We do not find any authority in this rule for the post-judgment, post-appeal amendment addition of a party and we agree with the majority of the federal decisions holding that post-judgment, post-appeal amendments to add a party are not authorized by Rule 15.

To hold otherwise would enable the liberal amendment policy * * * to be employed in a way that is contrary to the philosophy favoring finality of judgments and the expeditious termination of litigation.

Wright, supra, § 1489.

Minnesota has a comprehensive procedure for pursuing collection of a judgment from a successor corporation set out in the statutes governing garnishment. See Minn.Stat. § 571.71-.932 (2000). Here, Johns issued a garnishment summons to Jillian’s after she amended the complaint. See MinmStat. § 571.71 (2000) (permitting a creditor to issue a garnishment summons against any third party as an ancillary proceeding to a civil action at any time after entry of a money judgment in the civil action). Jillian’s timely responded to the garnishment summons, denying liability, stating that it does not owe money to Harborage I and does not possess any property belonging to Harborage I. Based on this denial, Jillian’s should have been discharged pursuant to MinmStat. § 571.79(a) (2000), unless, prior to discharge, Johns had submitted a motion requesting leave to file a supplemental complaint. In all cases where a garnishee denies liability,

the creditor may move the court at any time before the garnishee is discharged, on notice to both debtor and the garnishee for an order making the garnishee a party to the civil action and granting the creditor leave to file a supplemental complaint against the garnishee and the debtor. The supplemental complaint shall set forth the facts upon which the creditor claims to charge the garnishee. If probable cause is shown, the motion shall be granted.

MinmStat. § 571.75, subd. 4 (2000). Johns did not move to file a supplemental complaint because she had already succeeded in adding Jillian’s to the original complaint.

We hold that the district court abused its discretion by not requiring Johns to follow the procedures set out in the garnishment statute and by granting Johns’s post judgment, post appeal amendment to add Jillian’s as a party to the original lawsuit. The garnishment statute provides the only authority for post-judgment addition of an alleged corporate successor to a judgment-debtor as a party, in a supplemental garnishment complaint. The process permitted by the district court allowed Johns to assert her discrimination claim against an entity that never had any opportunity to defend against the claim, a fundamental violation of due process.

Johns argues that even if the procedure she pursued is flawed, Jillian’s is not prejudiced because proceeding under Minn.Stat. § 571.71 would have resulted in Jillian’s being added as a party to the supplemental complaint and summary judgment would have been pursued, putting Jillian’s in the identical position that resulted from the process she chose. We disagree. Pursuing the garnishment statute would have focused the district court on the necessity to examine whether there is, in fact, probable cause to charge Jillian’s as a garnishee. Johns was allowed merely to assert that Jillian’s is Harborage I’s successor in her amended complaint. Johns completely bypassed an analysis of whether Jillian’s is a successor to Harbor-age I. Allowing Johns to proceed as she did caused the focus of the district court’s analysis to be misplaced to an analysis of successor liability rather than an analysis of whether Jillian’s is Harborage I’s successor.

There is no evidence in the record sufficient to support Johns’s bald assertion that Jillian’s is Harborage I’s successor. We conclude that Jillian’s was substantially prejudiced by the flawed procedure and is entitled to reversal on the procedural issue alone.

Even if Johns’s mere assertion of suc-cessorship is sufficient probable cause of successorship to permit Johns to pursue a supplemental complaint against Jillian’s, Jillian’s should have been granted summary judgment because, as a matter of law, it is not a successor to Harborage I.

II. Jillian’s is not Harborage I’s successor

Harborage, Inc. supplied labor and Harborage I managed Gators prior to Jillian’s acquisition of the assets of FPM, Ltd. and other entities that allowed Jillian’s to become the owner of Gators. Har-borage I is not a party to the APA by which Jillian’s acquired Gators, and Har-borage I continued to exist as a separate corporation after Jillian’s closed on the APA. Jillian’s entered into a separate contract with Harborage I pursuant to which Harborage I provided transition management services and labor for Jillian’s. Johns asserts that this separate contract' made Harborage I a party to the APA because people were the only assets of Harborage I and those people were “acquired” by Jillian’s when they became Jillian’s employees. We disagree.

A corporation is an artificial person, created by law, or under authority of law, as a distinct legal entity, with rights and liabilities which are independent from those of the natural persons composing the corporation. Ordinarily two or more corporations are considered separate and distinct entities even though the same individuals are the incorporators of, or own stock in, the several corporations, and even though such corporations may have the same persons as officers.

Di Re v. Cent. Livestock Order Buying Co., 246 Minn. 279, 288-84, 74 N.W.2d 518, 523 (1956) (footnotes omitted) (holding that, in the absence of fraud or other wrongful purpose, a subsidiary must be treated as a legal entity separate and apart from the parent).

Johns also argues that Jillian’s is the successor to Harborage I because the selling entities shared the same address as Harborage I and had the same persons as officers. But Johns does not allege fraud nor does she contend that Jillian’s shared offices or officers with Harborage I or that Harborage I and any of the selling entities were a “single, integrated operation.”

A “successor” corporation is:

A corporation that, through amalgamation, consolidation, or other assumption of interests, is vested with the rights and duties of an earlier corporation.

Black’s Law Dictionary 1446 (7th ed.1999). Here, Jillian’s did not amalgamate, consolidate or otherwise assume the rights and duties of Harborage I.

Johns completely ignores the requirement that Jillian’s must be a successor to Harborage I and instead focuses on successor liability as established by federal case law for successor corporations. Johns erroneously imports an analysis of the factors that establish successor liability to assert that Jillian’s is Harborage I’s successor. The factors developed in federal case law for successor liability have nothing to do with determining whether a corporation is a successor. The federal cases cited by Johns all support her argument for successor liability but none are relevant to the issue of whether the new corporation is, in fact, a successor.

Johns has made a very persuasive case that the law of successor liability developed in federal courts for Title VII actions should apply to discrimination claims in Minnesota despite Minnesota’s narrower approach to corporate successor liability. By statute:

The transferee is liable for the debts, obligations, and liabilities of the trans-feror only to the extent provided in the contract or agreement between the transferee and transferor or to the extent provided by this chapter or other statutes of this state.

Minn.Stat. § 302A.661, subd. 4 (2000) (emphasis added). The Minnesota Human Rights Act, which by case law applies principles developed by federal courts in Title VII cases, may well be one of the “other statutes” referred to in Minn.Stat. § 302A.661, subd. 4, justifying application of federal successor liability law to discrimination claims in Minnesota. Under the facts of this case, however, we do not reach this issue.

DECISION

Because Jillian’s is not a successor to Harborage I, the district court erred by concluding that Jillian’s is hable for Johns’s judgments against Harborage I. Because Jillian’s is not liable for the judgments against Harborage I, we do not reach Jillian’s argument about the propriety of making it liable for the attorney fees’ awards of the district court and this court.

Reversed.


author: KLAPHAKE, Judge.

text:
    Holly ULSTAD, Appellant, v. Charles BRENNY, Andy Peterson, Respondents.
    No. C9-01-2196.
    Court of Appeals of Minnesota.
    June 25, 2002.

      Stephen D. Gabrielson, Gabrielson Law Offices, Ltd., Sartell, MN, for appellant.
    Frederick L. Grunke, Rajkowski Han-smeier, Ltd., St. Cloud, MN, for respondent Brenny.
    Marcus J. Christianson, Christianson, Stoneberg, Giles & Stroup, P.A., Marshall, MN, for respondent Peterson.
    Considered and decided by KLAPHAKE, Presiding Judge, HALBROOKS, Judge, and HANSON, Judge.
   OPINION

KLAPHAKE, Judge.

Appellant Holly Ulstad was employed by a temporary agency to work at respondent Charles Brenny’s insurance office, where she was injured in a fall. Although she received workers’ compensation through the temporary agency, she brought this negligence action against Brenny. Applying the loaned servant doctrine, the district court determined that the temporary agency was Ulstad’s general employer, that Brenny was her special employer, and that her exclusive remedy was under workers’ compensation law. Ulstad contends that the loaned servant doctrine does not preclude a negligence action against Brenny. We disagree and affirm.

FACTS

On March 4, 1998, Ulstad slipped and fell on some steps, injuring her neck, at Brenny’s Allstate Insurance Agency in Brainerd, Minnesota. Brenny owns the building, and respondent Andy Peterson constructed and installed the steps on which appellant fell.

At the time of her accident, Ulstad was an employee of Checks and Balances, Inc. (C & B). Her actual job duties, as office manager and insurance producer selling various Allstate products, were performed at Brenny’s agency.

Beginning in 1994, Brenny contracted with C & B to provide him with his agency staff, and since that time only employees hired by C & B were placed at his agency. Brenny’s contract with C & B provided that C & B would, as an independent contractor, “employ, manage, and supervise all employees assigned to [respondent’s] location” and would

be responsible for (i) recruiting, hiring, evaluating, supervising, firing and disciplining its employees, (ii) maintaining all necessary personnel and payroll records for its employees, (iii) computing the wages payable to its employees and withholding applicable * * * taxes.

Brenny’s use of C & B as a third-party employer, to hire, supervise, and pay his staff, was consistent with Allstate policy.

Ulstad began working at Brenny’s agency in October 1996. Although she sought the job through Michael Miller, an Allstate district manager, she was hired by C & B. At the time of her hiring, Ulstad, Brenny, and C & B signed a non-compete agreement that referred to Ulstad as a “service provider (employee)” and Brenny as “Allstate Insurance Co. (supervisor).” Also at the time of Ulstad’s hiring, Miller identified several problems with Brenny’s agency that he wanted Ulstad to address in her role as office manager and insurance producer. Brenny had the authority to determine the number of hours Ulstad worked, but Ulstad determined her own work schedule. Brenny and Ulstad also staggered their annual vacations to insure that the office was staffed. Ulstad was covered under C & B’s workers’ compensation insurance policy, and Brenny held this type of insurance only for himself.

After her injury, Ulstad received workers’ compensation benefits from C & B. C & B refused to fill Ulstad’s position at the agency until a doctor determined whether she could return to work.

In November 1998, Ulstad initiated this negligence action against Brenny and Peterson, claiming that Peterson negligently constructed and installed the steps and that Brenny negligently maintained the premises. Brenny moved for partial summary judgment, arguing that Ulstad’s exclusive remedy was under workers’ compensation law. The district court agreed, granted Brenny’s motion for summary judgment, and dismissed Ulstad’s negligence action against Brenny. Thereafter, in accordance with a settlement between Peterson and Brenny on Peterson’s cross-claim against Brenny, the district court dismissed the cross-claim and entered final judgment in favor of Brenny.

ISSUE

Did the district court err in concluding that Ulstad was a loaned servant for purposes of determining whether she was barred from suing Brenny in tort because of the exclusivity provisions of the Workers’ Compensation Act?

ANALYSIS

On appeal from summary judgment, an appellate court’s duty is to determine whether any genuine issues of material fact exist and whether the district court erred in its application of the law. Cummings v. Koehnen, 568 N.W.2d 418, 420 (Minn.1997). “A reviewing court must view the evidence in the light most favorable to the party against whom summary judgment was granted.” Vetter v. Sec. Continental Ins. Co., 567 N.W.2d 516, 520 (Minn.1997) (citation omitted). This court gives de novo review to a district court’s determination of a purely legal question. Frost-Benco Elec. Assoc. v. Minn. Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn.1984); see Meiske v. Lift-Stak & Stor, Inc., 599 N.W.2d 175, 177 (Minn.App.1999) (where there is no factual dispute, review is de novo).

With the exception of excluded types of employment, the Workers’ Compensation Act (act) provides the exclusive remedy for an employee injured in the scope of his or her employment. Minn. Stat. § 176.031, .041 (2000). Here, the district court held that Ulstad was a loaned servant for purposes of the act and that Brenny could not be sued in tort because both he and C & B were considered her employers. Under the loaned servant doctrine,

if an employer loans an employee to another employer for a particular service, that employee may become the employee of the borrowing employer and may look to either employer for workers’ compensation benefits.

Minn. Brewing Co. v. Egan & Sons, Co., 574 N.W.2d 54, 63 (Minn.1998) (citation omitted). The “special employer,” to whom the employee is lent by the “general employer,” is immune from tort suit if three conditions are met:

(1) the employee has made a contract for hire, express or implied, with the special employer; (2) the work being done is essentially that of the special employer; and (3) the special employer has the right to control the details of the work.

Newland v. Overland Exp., Inc., 295 N.W.2d 615, 618 (Minn.1980) (citing Danek v. Meldrum Mfg. & Eng’g Co., 312 Minn. 404, 408, 252 N.W.2d 255, 258 (1977) (seminal case on this subject)).

Ulstad claims that these conditions are not present here and that the loaned servant doctrine does not apply because: (1) C & B does not fit the definition of a labor broker as defined in the case law; (2) the record does not show that Brenny controlled Úlstad’s work; and (3) there was no employment contract, either express or implied, between the Brenny and Ulstad. We address each argument separately below.

Ulstad first contends that C & B does not meet the definition of labor broker. She argues that under the traditional definition of the term, the labor broker knows little or no details of the employee’s work for the special employer. Here, Ul-stad asserts, C & B “directed and controlled her activities.”

A labor broker is defined as a “business [that] hires employees and in effect sells their services to a second employer in need of temporary help.” Smieja v. City of Browerville, 406 N.W.2d 325, 327 (Minn.App.1987). In Danek, 312 Minn, at 408, 252 N.W.2d at 258, the supreme court rejected a control argument similar to the one made here by Ulstad. There, Geradeen Danek was injured while operating a punch press machine as a temporary employee and argued that her labor broker was her true employer because it “hired and had the right to fire * * * [her], compensated her directly, and paid the expenses of her social security taxes and workers’ compensation insurance * * Id. The supreme court rejected Danek’s argument, concluding that the labor broker did not have “the right to control the details of the performance of [Danek’s] work,” and that the work Danek did was solely for her special employer and under its control. Id.; see Smieja, 406 N.W.2d at 827-28 (employee of federally funded summer employment program also employee of school district under loaned servant doctrine, where school district controlled employee’s work).

Likewise, here, C & B retained primary authority over the terms of Ulstad’s employment but did not have control over her daily work. Thus, C & B met the definition of labor broker for purposes of applying the loaned servant doctrine. While the duration of Ulstad’s employment was apparently for an indefinite rather than a temporary term and is longer than the temporary terms of employment contemplated in either Danek or Smieja, these facts tend to support the finding that Brenny was Ulstad’s special employer.

Ulstad next argues that Brenny did not have the right to control the details of her work. While Brenny admitted that Ulstad was never his employee, he stated that he could “control her work,” including her “job performance, job responsibility, what I needed done and how many hours I could request to have her [at work].” In arranging for Ulstad’s employment, the parties contemplated that Ulstad would work only at Brenny’s agency and do his work, as office manager and producer. Thus, while Brenny may not have had actual control over every aspect of Ulstad’s employment, his right to control the essential aspects of her work is dispositive on this issue. The district court properly concluded that Brenny controlled Ulstad’s day-to-day employment for purposes of application of the loaned servant doctrine. See Danek, 312 Minn, at 408, 252 N.W.2d at 258 (person held to be employer of special employer even where general employer controlled her hiring, firing, pay, and payment of other expenses).

Ulstad finally contends that there is no contract, express or implied, between her and Brenny. In considering this aspect of the loaned servant doctrine, Minnesota courts have not required the existence of an actual contract; they only require the employee’s consent to the employment relationship with the special employer. Smieja, 406 N.W.2d at 326-27 (in order for condition of existence of contract to be met, employee must have “understood and consented to an employment relationship” with special employer). Often, the issue of the employee’s consent to the employment relationship is determinative. Id. at 327.

Here, there is strong evidence that Ul-stad consented to the employment relationship. Before being hired to work at Brenny’s agency, she held a similar position at an insurance agency in Rogers, Minnesota. Her relocation to Brainerd was precipitated by a relocation made by her parents to the Brainerd area. Even Ulstad acknowledges that she initiated a transfer of her employment by contacting Miller, her district manager, seeking an assignment at Brenny’s agency. Thus, for purposes of application of the loaned servant doctrine, Ulstad consented to work with Brenny, her special employer. See Danek, 312 Minn, at 412, 252 N.W.2d at 260 (employee deemed to have consented to special relationship when employee given option by labor broker to work at and consented to work at plant as punch press operator).

DECISION

The district court did not err in concluding that Ulstad was a loaned servant and that she was thus barred from suing Bren-ny in tort because of the exclusivity provisions of the Workers’ Compensation Act.

Affirmed.

      . Brenny should note that he may have been underinsured for workers’ compensation by failing to insure Ulstad as his employee. Because Ulstad was considered his loaned servant, she could "look to either employer for workers' compensation benefits.” Minn. Brewing Co., 574 N.W.2d at 63.


author: ENG, Circuit Judge.

text:
    2002 SD 60
    E. Paul AMUNDSON, Plaintiff and Appellant, v. Pamila K. AMUNDSON, Respondent and Appellee.
    No. 21883.
    Supreme Court of South Dakota.
    Considered on Briefs Jan. 7, 2002.
    Decided May 22, 2002.
    Catherine V. Piersol and Leah Piersol Crain of Piersol Law Office, Sioux Falls, South Dakota, Attorneys for plaintiff and appellant.
    Thomas J. Farrell and Sara E. Eng of Strange, Farrell & Johnson, Sioux Falls, South Dakota, Attorneys for defendant and appellee.
   ENG, Circuit Judge.

[¶ 1.] E. Paul Amundson (Paul) brought a petition to terminate alimony after his ex-wife, Pamila K. Amundson (Pamila) remarried. Before the court hearing on the petition, Pamila was granted an annulment of her five month second marriage. Following the alimony termination hearing, the court determined the alimony payments should continue. We affirm.

FACTS

[¶ 2.] The parties divorced on November 2, 1998, with three children born to their marriage. The divorce stipulation granted primary physical custody of the minor children to Pamila with $2,500 child support per month. Pamila was awarded alimony of $15,000 per year for a period of fifteen years, payable from Paul’s quarterly bonus. The alimony was based upon Paul’s $150,000 yearly income and Pamila’s $30,000 income.

[¶ 3.] Pamila married Rick Bauermeis-ter (Bauermeister) on June 17, 2000, conditioned upon his representation that his child from a previous marriage would not reside with them on a regular basis. Immediately, Pamila and Bauermeister experienced problems caused by Bauermeis-ter’s failure to fulfill this promise. Pamila shared the problem with her counsel, Sam Goodhope, and talked about seeking a divorce. Goodhope also talked with Bauer-meister regarding this issue. Goodhope received a letter from Paul’s attorney on June 27, 2000 addressing issues between Paul and Pamila and making reference to the termination of Paul’s alimony obligation because of Pamila’s remarriage. Goodhope and Pamila talked about divorce and annulment during a subsequent meeting.

[¶ 4.] When Paul petitioned for termination of alimony on August 1, 2000, Good-hope realized he could be a potential witness and referred the matter to Pamila’s present counsel. Pamila filed for an annulment on September 25, 2000. On November 7, 2000, the marriage was annulled on the grounds of fraud.

[¶ 5.] The case presents this issue:

Did the trial court err in not granting Paul’s request for cessation of alimony based upon Pamila’s remarriage and err in not finding fraudulent intent in the facts and circumstances surrounding Pa-mila’s annulment?

STANDARD OF REVIEW

[¶ 6.] A trial court’s findings of fact shall not be disturbed on appeal unless clearly erroneous. Pellegrin v. Pellegrin, 1998 SD 19, ¶ 9, 574 N.W.2d 644, 646. The appellate court must give deference to the opportunity of the trial court to “judge the credibility of the witnesses.” Id. (citing Osman v. Keating-Osman, 521 N.W.2d 655, 657 (S.D.1994)). Absent a definite and firm conviction that a mistake has been made, the trial court’s finding of fact will not be overturned under the clearly erroneous standard. Billion v. Billion, 1996 SD 101, ¶ 13, 553 N.W.2d 226, 230. The trial court’s conclusions of law, however, are reviewable pursuant to a de novo standard. Grode v. Grode, 1996 SD 15, ¶ 5, 543 N.W.2d 795, 799. No deference need be given to the trial court’s conclusions of law. Id.

[¶ 7.] A trial court’s decision to modify alimony is reviewed under the abuse of discretion standard. Jameson v. Jameson, 1999 SD 129, ¶ 13, 600 N.W.2d 577, 581 (citing Gunn v. Gunn, 505 N.W.2d 772 (S.D.1993)). “Abuse of discretion” is defined as an exercise of discretion without purpose or justification and against reason and the evidence presented. Tesch v. Tesch, 399 N.W.2d 880, 884 (S.D.1987). In determining whether an abuse of discretion has occurred, the reviewing court does not determine whether it too would have made the same decision, but whether a judicial mind, in light of the law and particular facts of the case, could reasonably reach a similar conclusion. Nelson v. Nelson, 454 N.W.2d 533, 534 (S.D.1990).

DISCUSSION

[¶ 8.] Did the trial court err in not granting Paul’s request for cessation of alimony based upon Pami-la’s remarriage and err in not finding fraudulent intent in the facts and circumstances surrounding Pa-mila’s annulment?

[¶ 9.] The trial court is granted discretion to modify alimony by SDCL 25-4-41. Marquardt v. Marquardt by Rempfer, 396 N.W.2d 753 (S.D.1986) was the first case in South Dakota to declare that remarriage does not automatically terminate an ex-spouse’s obligation to pay alimony. Instead, remarriage merely shifts the burden requiring the recipient to show that extraordinary circumstances exist such that continuation of alimony payments is justified. Id. at 754. The standard set in Marquardt was followed in Peterson v. Peterson, 434 N.W.2d 732 (S.D. 1989); Steffens v. Peterson, 503 N.W.2d 254 (S.D.1993) and most recently in Culhane v. Michels, 2000 SD 101, 615 N.W.2d 580 and Harding-Moyer v. Harding, 2000 SD 126, 616 N.W.2d 899.

[¶ 10.] This Court has consistently stated that it is unreasonable for a dependent spouse to receive financial support from a former spouse and a present spouse at the same time. Marquardt, 396 N.W.2d at 754 (citing In Re Marriage of Shima, 360 N.W.2d 827, 828 (Iowa 1985)). For this reason, this Court has adopted the position that remarriage establishes a prima facie case for termination of alimony absent extraordinary circumstances. Id.

[¶ 11.] There appears to be no rationale to alter the position in the previous fine of cases. By accepting the remarriage (whether annulled or not) as the shifting event, the party who married has the burden of showing what extraordinary circumstances exist for the continuation of alimony payments. If the party can show those extraordinary circumstances, the alimony continues. If they fail to meet the burden, the alimony ends.

[¶ 12.] Another issue considered by the trial court and of importance in considering whether extraordinary circumstances exist for the continuation of alimony is the provision in SDCL 25-3-10 that allows a court to provide for maintenance of a former spouse after an annulment. The statute allows a court to award alimony after an annulment and has been used by courts to justify the termination of alimony from a former spouse. However, those cases generally dealt with a situation where the alimony ended and the party to the annulment was now attempting to reinstate the alimony from the first spouse. See e.g. Glazer v. Silverman, 354 Mass. 177, 236 N.E.2d 199 (1968); Gaines v. Jacobsen, 308 N.Y. 218, 124 N.E.2d 290 (1954). Under circumstances where time has passed and parties have moved on in their lives, there would be a certain injustice in requiring the reinstatement of alimony. However, in this case, we are dealing with the request of the alimony payer to terminate the alimony after a short marriage, which resulted in annulment.

[¶ 13.] The question then is whether the wife has shown those extraordinary circumstances that warrant continuation of her former husband’s alimony obligation after the annulment. The trial court found that the wife earns $30,000 or less each year, works during the hours the children are in school, and has a lifestyle similar to what she had when she was married to Paul which will not be maintained unless the alimony continues. The court further found that the children’s lifestyle has remained the same due to the alimony payments and that the husband’s income has increased. Lastly, the court found that the annulment was not a subterfuge. These factors support the determination by this Court that extraordinary circumstances exist to justify the continuation of the alimony.

[¶ 14.] Since alimony is justified, a question must also be answered as to whether Pamila should receive alimony during the time of her marriage to Bauer-meister. Using the void ab initio standard, the trial court reinstated alimony back to the date of the second marriage. The South Dakota statutes do not use the word void ab initio, but the term means, “null from the beginning.” Black’s Law Dictionary 1568 (7th ed 1999). However, remarriage is the defining act that dictates whether a petition terminating alimony may be brought. The reason for the annulment should make no difference because the ex-spouse did in fact carry through with a remarriage and therefore has crossed the threshold defining when the court can consider whether alimony should continue or not. Using this rationale, the court gives the nonparty to the annulment (Paul) an opportunity to file for termination of the alimony which is a pri-ma facie showing and the burden is upon the party to the annulment (Pamila) to show extraordinary circumstance justifying the continuance of the alimony. Mar-quardt, 396 N.W.2d at 754.

[¶ 15.] Addressing Paul’s allegation that there was fraudulent intent in the facts and circumstances surrounding Pami-la’s annulment, we find the record devoid of evidence that the annulment of the Bauermeister marriage was done with a fraudulent intent.

[¶ 16.] The Marquardt line of cases indicates the party with the burden after the marriage ceremony (Pamila) must show extraordinary circumstances to continue alimony and since the court below found such circumstances, it can use that rationale to allow the payment of alimony during and after the short annulled marriage. There was no error in its decision to order Paul to pay Pamila alimony from and after the date of Pamila’s remarriage.

[¶ 17.] Affirmed.

[¶ 18.] GILBERTSON, Chief Justice, and SABERS and KONENKAMP, Justices, and GORS, Acting Justice, concur.

[¶ 19.] ZINTER, Justice, not having been a member of the Court at the time this action was submitted to the Court, did not participate.

[¶ 20.] ENG, Circuit Judge, for AMUNDSON, Justice, disqualified.