author: HANSON, Justice.

text:
    MOTORSPORTS RACING PLUS, INC., Petitioner, Appellant, v. ARCTIC CAT SALES, INC., Respondent, Polaris Sales, Inc., Respondent, Bombardier Motor Corporation of America, a Delaware corporation, Respondent, Yamaha Motor Corporation, a California corporation, Respondent, International Snowmobile Racing, a Wisconsin corporation, Respondent, International Snowmobile Manufacturers Association, a Michigan corporation, Respondent.
    No. C4-02-530.
    Supreme Court of Minnesota.
    July 24, 2003.

      Wood R. Foster, Jr., Jordan M. Lewis, Vickie L. Loher, Siegel, Brill, Greupner, Duffy & Foster, P.A., Minneapolis, MN, for appellants.
    Anriamarie A. Daley, Gary L. Wilson, Christopher A. Seidl, Robins, Kaplan, Miller & Ciresi, LLP, Minneapolis, MN, for respondent Arctic Cat Sales Inc.
    George W. Soule, Daniel J. Brennan, Bowman '& Brooke, LLP, Minneapolis, MN; and J. Robert Robertson, Andrew A. Kassof, Kirkland & Ellis, Chicago, IL, for respondent Polaris Sales, Inc.
    Robert A. Sehwartzbauer, Paul J. Rob-benolt, Scott M. Stearns, Dorsey & Whitney LLP, Minneapolis, MN, for respondent Bombardier Motor Corporation of America.
    James L. Volling, Jason K. Walbourn, Jesseca R:F. Grassley,' Faegre & Benson LLP, Minneapolis, MN; and Theodore Whitehouse, Willkie, Farr & Gallagher, Washington, DC, 'for respondent Yamaha Motor Corporation, U.S.A.
    Kay Nord Hunt, Stacey A. DeKalb, Stephen C. Rathke, Lommen, Nelson, Cole & Stageberg, P.A., Minneapolis, MN, for respondent International Snowmobile Manufacturers Association.
   OPINION

HANSON, Justice.

Appellant Motorsports Racing Plus, Inc. (MRP) filed suit against the respondents, several snowmobile manufacturers and their trade association (Manufacturers), alleging antitrust violations and commercial torts. The district court determined that MRP had standing to bring the suit but granted summary judgment dismissing it because MRP had failed to present sufficient evidence to show injury in fact caused by Manufacturers. The court of appeals reversed the district court’s determination on standing and remanded with directions to order summary judgment for Manufacturers on the issue of standing. We reverse the court of appeals on the issue of standing and remand to that court for further proceedings.

MRP is a Minnesota company that developed and operated a snowmobile racing circuit in the United States. The peak of MRP’s business occurred in January 1998 when MRP reached an agreement with cable sports network ESPN to televise MRP’s races as part of ESPN’s Winter X-Games. Respondents are snowmobile manufacturers whose products gained exposure on MRP’s racing circuit.

Around the time of the 1998 Winter X-Games, two contract agents of MRP, Joe Duncan and Scott O’Malley, twice offered to buy MRP from its owner, Jerome Dillon. Duncan and O’Malley had provided marketing services to MRP and were instrumental in the growth of the business and securing the relationship with ESPN. Dillon declined to sell. In March 1998, Duncan and O’Malley started their own snowmobile racing circuit, the World Snowmobile Association (WSA). ESPN immediately terminated its agreement to televise MRP races and negotiated an agreement with WSA to organize races for the 1999 Winter X-Games.

MRP’s revenues dropped precipitously after it lost its agreement with ESPN. In July 1998, MRP sold the snowmobile racing circuit portion of its business to WSA under an Agreement to Acquire Snowmobile Racing Program (Agreement). As required by a non-competition clause that was part of the Agreement, MRP has been out of snowmobile racing since then.

Two provisions of the Agreement have received attention in this litigation. The first defined the assets being sold as follows:

1.1 “Assets ” shall mean Snowmobile Racing Program, and all right to promote, sanction and operate MRP race dates; information regarding racers, officials, sponsors and site officials, including all electronic database information; all permits, all sponsor rights and any intangibles and goodwill related to the Snowmobile Racing Program, and race dates identified on Exhibit A.

(Emphasis added.) The second contained MRP’s representation as follows:

6.6 Litigation. There are no claims, actions, suits, proceedings, or investigations (whether or not purportedly on behalf of Seller) pending or threatened against or affecting Seller or the Assets * * *. There is no reasonable basis for any claim, action, suit, proceeding, or investigation against or affecting Seller or the Assets.

(Emphasis added.)

MRP’s complaint alleged that the defection of Duncan and O’Malley, the formation of WSA and the agreement between WSA and ESPN were all 'engineered pursuant to a conspiracy between Manufacturers, Duncan and O’Malley; that the conspirators’ “motivation was simple: they believed they could pay less in advertising and sponsorship and. increase their sales if they collectively controlled their own sno-cross racing circuit, built with the experience, background and contacts of the two former MRP representatives”; and that Manufacturers’ actions violated Minnesota antitrust law and constituted the common law torts of interference with contractual relations, interference with prospective business advantage and civil conspiracy.

Manufacturers moved for summary judgment on the ground that MRP lacked standing to bring the action. Manufacturers made three arguments regarding standing: (1) that MRP had assigned all causes of action when it sold the snowmobile racing business to WSA; (2) that the quoted provisions of the Agreement expressly transferred all causes of action to WSA; and (3) that MRP failed to allege sufficient facts to show an injury in fact caused by Manufacturers.

The district court rejected Manufacturers’ first two standing arguments. As to the third, the court agreed with Manufacturers that MRP had failed to allege sufficient facts to show anything more than “a theoretical dispute as to whether [Manufacturers] actually' conspired against MRP to drive it out of business.” The court concluded .that, “[c]onsequently, MRP has no standing, and summary judgment [for Manufacturers] is proper here.” Although the district court used the term “standing” to describe the legal basis for its decision, the court of appeals and all parties treat the district court’s order as a conclusion that MRP did have standing but that MRP’s failure to allege sufficient facts on causation of antitrust injury was a decision on the merits, not on standing. See Motorsports Racing Plus, Inc. v. Arctic Cat Sales, Inc., 653 N.W.2d 204, 205-06 (Minn.App.2002) (MRP). We will adopt the same nomenclature, using the term “standing” to refer to the argument that MRP assigned all causes of action to WSA and the term “causation” to refer to the argument that MRP failed to show that it sustained injury in fact caused by Manufacturers.

The court of appeals did not address the causation arguments relied upon by the district court but instead held that MRP did not have standing to bring the suit because it sold its right to bring the suit to WSA. Id. at 207. The court based its ruling on the two contractual provisions quoted above and the decision in In re Milk Products Antitrust Litigation, 195 F.3d 430 (8th Cir.1999). MRP, 653 N.W.2d at 206-07.

MRP petitioned for review and Manufacturers filed a conditional cross-petition, asking us to also review the causation grounds for summary judgment if we reversed the court of appeals on standing. We granted MRP’s petition but denied Manufacturers’ cross-petition. Thus, the standing issue is before us, but the causation issue is not.

Although the court of appeals reversed the district court and vacated the summary judgment that the district court had entered on causation, the court of appeals’ remand directed the district court to enter summary judgment dismissing MRP’s complaint for lack of standing. Thus, our standard of review remains that applicable to a grant of summary judgment, which is reviewed de novo. Sentinel Mgmt. Co. v. Aetna Cas. & Sur. Co., 615 N.W.2d 819, 827 (Minn.2000). Further, for purposes of that review, we will accept as true the claim of MRP that Manufacturers conspired with Duncan and O’Malley to put MRP out of business, and that the sale to WSA was made at a discounted price that reflected the harm that the conspiracy had visited on MRP.

The question before us is whether MRP and WSA intended that the asset sale included the assignment to WSA of any antitrust or other commercial tort claims that MRP might have against Manufacturers. That question is not explicitly addressed in the Agreement. Further, there is no evidence that the subject was specifically discussed in the negotiations between MRP and WSA. In fact, WSA disclaims any knowledge that MRP was contemplating any claims and MRP argues that it did not learn of the factual basis for its claims until sometime after the Agreement was finalized. Thus, the question becomes whether the intent to assign the claims should be inferred from either the words that were used in the Agreement or the context in which they were used.

We have said that the primary goal of contract interpretation is to determine and enforce the intent of the parties. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn.1979). Where the parties express their intent in unambiguous words, those words are to be given their plain and ordinary meaning. Minneapolis Pub. Hous. Auth. v. Lor, 591 N.W.2d 700, 704 (Minn.1999) (citing Bob Useldinger & Sons, Inc. v. Hangsleben, 505 N.W.2d 323, 328 (Minn.1993)). But those words are not to be viewed in isolation. Republic Nat’l Life Ins. Co. v. Lorraine Realty Corp., 279 N.W.2d 349, 354 (Minn.1979).

Intent is ascertained, not by a process of dissection in which words or phrases are isolated from their context, but rather from a process of synthesis in which the words and phrases are given a meaning in accordance with the obvious purpose of the contract * * * as a whole.

Id. (citations and internal quotations omitted).

The court of appeals focused on the Agreement’s definition of the assets that were sold by MRP to WSA, which included “any intangibles and goodwill related to the Snowmobile Racing Program.” The court held that MRP’s claims against Manufacturers were “intangibles” and thus were among the assets sold by MRP to WSA. MRP, 653 N.W.2d at 206. The court reinforced this interpretation of “intangibles” by referring to the definition of “General intangibles” contained in Article 9 of the Uniform Commercial Code, a definition which includes “things in action.” See id. (quoting Minn.Stat. § 336.9-102(a)(42) (2002)). Finally, the court rejected MRP’s claim that it did not intend to transfer its causes of action because the Agreement contained MRP’s representation “that there were no claims pending that would affect its assets and no reasonable basis for any claims affecting its assets,” Id. at 207.

MRP maintains that there is no common understanding . in Minnesota law as to whether the term “intangibles” includes causes of action — and especially antitrust claims that arise from the very agreement that refers to “intangibles.” MRP points out that antitrust claims qualify as “commercial tort claims” and that the UCC provision relied on by the court of appeals expressly excludes “commercial tort claims” from its definition of “[g]eneral intangible.” See Minn.Stat. § 336.9-102(a)(42) (2002). Finally, MRP argues that antitrust policy precludes inferring an intent to assign an inchoate antitrust claim from the nonspecific transfer of assets, relying by analogy on federal caselaw that holds that federal antitrust claims may only be assigned when done expressly and with particularity. See Gulfstream III Assocs., Inc. v. Gulfstream Aerospace Corp., 995 F.2d 425, 438-40 (3d Cir.1993).

In considering these arguments, we have been guided by two federal court of appeals decisions regarding the question whether an inference of an intent to assign antitrust claims can be drawn from the sale of the business from which those claims arose.

Manufacturers refer us to In re Milk Products Antitrust Litigation, 195 F.3d at 433. In that case, the district court dismissed a proposed class action alleging price fixing by a group of milk producers, ruling that the proposed class representative, Rainy Lake One Stop, Inc. (“Rainy Lake”), lacked standing because it had sold its antitrust claims when it sold the assets of its business months before joining the lawsuit. Id. The court of appeals recognized that the question of whether Rainy Lake sold its unasserted and presumably unknown antitrust claim along with its other business assets was not addressed in the contract documents. Id. at 435. Applying Minnesota law, the court held, “the district court’s finding that the parties to the sale of substantially all of Rainy Lake’s business assets intended to include an unknown claim arising out of store operations must be affirmed.” Id.

The Minnesota Court of Appeals relied heavily on Milk Products as recognizing that an intent to transfer antitrust claims can be inferred from the sale of the business from which those claims arose where the seller fails to expressly exclude those claims from the sale. MRP, 653 N.W.2d at 206-07. But Milk Products is distinguishable on several grounds.

First, although Milk Products purports to apply Minnesota law, it actually does so at the most general level: it only affirms the primacy of the intent of the parties as the basis for contract interpretation. See MRP, 653 N.W.2d at 206; Milk Products, 195 F.3d at 435-36. To the limited extent that Milk Products goes beyond that general principle, it has only persuasive and not precedential value.

Second, Milk Products arose in the unusual context of the adequacy of the plaintiff to represent the class, and therefore the court’s decision on standing is somewhat diluted by being blended with class action criteria. For example, the court made the public policy argument that it was inappropriate to presume that a seller like Rainy Lake retains the antitrust cause of action after an asset sale, because a

named plaintiff in a large antitrust class action assumes obligations to the class and a duty to produce its books and records in class action discovery. For a small business such as Rainy Lake, these burdens may be significant, and there is no guarantee that a role as named plaintiff will increase its share of any recovery above what it would receive as an absent class member. If the on-going business has been sold prior to discovery of the antitrust claim, the decision whether to take on these burdens should rest with the purchasers.

Milk Products, 195 F.3d at 436.

Third, the nature of MRP’s claim is significantly different from the claim made in Milk Products. In Milk Products, any injury to plaintiff Rainy Lake came from the effects of alleged price fixing on Rainy Lake’s operations prior to the sale. There was no allegation that the price fixing drove Rainy Lake out of business or caused the eventual sale of the business. Further, the alleged price fixing did not impact Rainy Lake’s business as a whole but only impacted the profitability of one of the dozens of products it sold at retail.

Here, in contrast, the sale of MRP’s assets is alleged to be the culmination of Manufacturers’ antitrust conspiracy. Reading the facts in the light most favorable to MRP, Manufacturers’ intent was to drive MRP out of business; Manufacturers’ actions carrying out that intent greatly dimipished the value of MRP; and the eventual sale of MRP’s assets at a price that reflected its now diminished market value is the measure of MRP’s antitrust injury. It would be illogical to infer that MRP intended that a sale at a diminished value would include the assignment of MRP’s claims against those who allegedly caused that diminished value.

Moreover, the purchaser in Milk Products stands in a notably different position from WSA with regard to the alleged antitrust injuries. In Milk Products, the purchaser was not alleged to have any connection to the price fixing, and nothing prevented the purchaser from pursuing the antitrust claims against the milk producers. Thus, it was not illogical to infer that the purchaser intended to purchase any antitrust claims associated with the business. Here, it is alleged that the purchaser, WSA, both participated in and benefited from the anticompetitive actions by Manufacturers. If Manufacturers did conspire and act to damage MRP’s business, that action decreased the market value of MRP’s assets, and the price that WSA ultimately paid for those assets was reduced. WSA would be incapable of pursuing a claim against its own co-conspirators or of proving any injury from a reduction in the market value of MRP’s business. Thus, it would be illogical to infer an intent on the part of WSA to purchase MRP’s claims.

MRP refers us to Sullivan v. National Football League, 34 F.3d 1091 (1st Cir.1994). Former New England Patriots owner William H. Sullivan sued the NFL when the league prevented him from selling shares of the team to the public in the form of publicly traded stock. Id. at 1094. The league required Sullivan to sell the team to a private purchaser; he claimed that this restriction significantly decreased the market value. Id. A jury awarded Sullivan $51 million in damages -for his losses. Id.

On appeal before the First Circuit, the league presented an argument similar to Manufacturers’:

The NFL argues that Sullivan cannot bring this lawsuit because he sold his antitrust claim when he sold the Patriots. The sale contract between Sullivan and KMS Patriots, L.P., provided that Sullivan transferred to the purchasers “all other assets” of the Patriots’ and its holding company, besides those specifically listed and those specifically excluded. None of the listed or excluded assets include an antitrust claim. According to the NFL, the term “all other assets” should be interpreted broadly to include the .present antitrust cause of action.

Id. at 1106 (footnote omitted). Citing two eases from the Third Circuit, the Sullivan court rejected the NFL’s standing argument, holding .that “[ajbsent some express language to the effect that Sullivan was selling his football related ‘antitrust claims’ or, at the very least, ‘causes of action,’ we cannot find that Sullivan ' assigned the present antitrust claim to the purchasers of the Patriots.” Id. (citing Gulfstream, 995 F.2d at 437-40; Leman v. Joyce Int’l, Inc., 10 F.3d 106, 112 (3d Cir.1993)).

The nature of the claim being asserted by MRP is more comparable to Sullivan than to Milk Products. In both Sullivan and the present case, the damage to the business and the discount price at which it was sold are at the crux of the plaintiffs’ claimed injuries. Moreover, MRP’s standing argument is even stronger than Sullivan’s - because of the allegation that the purchaser, WSA, was a participant in the antitrust conspiracy.

Manufacturers argue that policy considerations favor the inference that MRP intended to assign its claims. They point out that any other interpretation is unfair to the purchaser because it “allows the seller to directly interfere with the purchaser’s ability to carry' on the acquired business” by making claims against the purchaser’s customers. Those claims, Manufacturers argue, will disrupt the business and will directly or tangentially draw the purchaser into the litigation. Manufacturers complain that MRP represented to WSA that there were no claims that would affect the assets being sold. Manufacturers propose a rule whereby the onus would be on the seller to expressly exclude the claims from the sale or be deemed to have assigned them.

Manufacturers’ policy arguments are significant in the abstract, but they do not apply to the facts as alleged by MRP. The policy of protecting the purchaser from unwanted interference with the acquired assets is strong when the purchaser is an innocent third person. But MRP alleges that WSA was not an innocent purchaser but instead a participant in and the beneficiary of the antitrust conspiracy. As such, the public policy concerns that underlie the antitrust laws take on greater prominence. The purposes of the antitrust laws would be significantly frustrated if the very sale that was allegedly the objective of the antitrust violation would operate to preclude any claim for that violation.

We conclude that the words “any intangibles * ⅜ * related to the Snowmobile Racing Program,” standing alone, do not have a generally accepted or common plain meaning that should be enforced without regard to the context in which the words were used. In a general sense, any cause of action could be regarded as an “intangible asset,” but the Agreement does not make it plain that the antitrust claim is an intangible asset that is “related to the Snowmobile Racing Program,” such that the intent to transfer it can be inferred solely from the use of the words “any intangibles.” For example, if “related to” means “necessary or appropriate to the future operation of the Program,” the antitrust claims would surely not qualify.

We further conclude that the question of whether general language transferring assets shows an intent to include inchoate antitrust claims is controlled, under the present facts, by the context of the sale and the relationship between the parties. Where the claims relate or are necessary to the ongoing operation of the business by the purchaser, and the seller is going out of business, it is logical to infer that the seller intended to assign the claims and that the purchaser expected to receive them. In contrast, where the seller is not going out of business and the claims have nothing to do with the future of the business, but instead concern injury that is personal to the seller, it is illogical to infer that the seller intended to assign them. Moreover, when the purchaser is alleged to be a member of the antitrust conspiracy that damaged the business and the beneficiary of the resulting discounted purchase price, it would be incongruous to infer that the seller intended to assign the claims to the purchaser.

We therefore hold that when the words “any intangibles * * * related to the Snowmobile Racing Program” are viewed in the context of the entire Agreement, the relationship between the parties, and the nature of the claim asserted by MRP, they do not evidence an intent of the parties to include MRP’s antitrust claims as part of the sale. MRP did not go out of business but sold a portion of its business segment. MRP alleges that the conspirational actions of Manufacturers damaged the value of that portion of its business and made the sale necessary; that the purchaser, WSA, was a participant in the conspiracy; and that WSA benefited by paying a price that was substantially discounted because of the effects of the conspiracy. Assuming those allegations to be true, as we must for purposes of summary judgment, we hold that it was error to infer an intent by MRP to assign the claims or an intent by WSA to receive them.

For the above reasons, we reverse the decision of the court of appeals, reinstate the decision of the district court regarding standing and remand to the court of appeals with instructions to review the district court’s grant- of summary judgment based on causation.

Reversed and remanded.

BLATZ, C.J., and MEYER, J., took no part in the consideration or decision of this case.

      . A district court is to grant a motion for summary judgment when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law. Minn. R. Civ. P. 56.03. On appeal, the reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993).


source: Caselaw Access Project

author: PAGE, Justice. MEYER, Justice

license: Public Domain

text:
    Marcia A. KELLY, Petitioner, Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Respondent.
    No. C0-02-217.
    Supreme Court of Minnesota.
    July 31, 2003.

      Emmett D. Dowdal, Dowdal Law Office, White Bear Lake, MN, for Appellant.
    Katherine A. McBride, John C. Hughes, Meagher & Geer, P.L.L.P., Minneapolis, MN, for Respondent.
    Michael C. Snyder, Pamela J. Spaulding, Meshbesher & Spence, Ltd., Minneapolis, MN, for Amicus Curiae Minnesota Trial Lawyers Association.
   OPINION

PAGE, Justice.

This appeal arises out of cross-motions for partial summary judgment regarding appellant Marcia Kelly’s ability to obtain underinsured motorist (UIM) benefits from respondent State Farm Mutual Automobile Insurance Company (State Farm). As the relevant facts are undisputed, the sole issue before us is whether the exclusion in State Farm’s policy, which would preclude Kelly’s claim for UIM benefits, contravenes Minnesota case law and the language of the Minnesota No-Fault Act, Minn.Stat. §§ 65B.41-.71 (2002).

On September 19, 1998, Kelly’s husband was driving his Dodge Intrepid and negligently caused an accident with an unoccupied motor vehicle injuring Kelly, who was a passenger in the Intrepid. At the time of the accident, Kelly’s husband was the sole owner of the Intrepid, which was insured by State Farm. In addition, both Kelly and her husband were listed as owners of a Pontiac Grand Am, which was also insured by State Farm, but under a separate policy. While Kelly and her husband had separate policies for the Intrepid and the Grand Am, they were both listed as named insureds on each policy.

As a result of the accident, Kelly brought a damage claim against her husband, which State Farm settled by paying Kelly $100,000, the liability limit on the Intrepid. Because her damages exceeded this amount, Kelly filed a claim with State Farm for UIM benefits under the Grand Am policy. State Farm denied her UIM claim contending that under the Grand Am policy the Intrepid was not an “underin-sured motor vehicle” and that allowing Kelly to recover UIM benefits under the Grand Am policy, which also provided liability coverage to her husband, the tortfea-sor, would result in coverage conversion because the UIM policy would be used to supplement her husband’s inadequate liability insurance. ■

Based on State Farm’s denial of her UIM claim, Kelly commenced the instant lawsuit. Ultimately, both parties filed cross-motions for partial summary judgment to resolve the UIM coverage dispute. The district court initially granted Kelly’s motion and denied State Farm’s based on its conclusion that Kelly was entitled to UIM coverage under the Grand Am policy because Kelly had ho ownership interest in the Intrepid and because it did not appear that Kelly was working with her husband to convert her UIM coverage to additional liability coverage for him.

Approximately one month after the district court ruled, the court of appeals decided Johnson v. St. Paul Guardian Insurance Co., 627 N.W.2d 731 (Minn.App.), rev. denied (Minn. Sept. 11, 2001). In Johnson, the court of appeals held that an injured individual, whose injuries exceeded the ' tortfeasor’s liability coverage, could not look to a separate policy providing UIM coverage for the tortfeasor because this would result in impermissibly converting that UIM coverage into more expensive liability coverage to make up for the tortfeasor’s inadequate liability coverage. Id. at 733-34. As a result of Johnson, State Farm moved the district court to reconsider the grant of partial summary judgment in favor of Kelly. On December 17, 2001, the district court reversed its earlier order -and entered judgment in favor of State Farm, finding that under Johnson Kelly was not entitled to UIM benefits because her husband was listed as an insured on the Grand Am policy. In an unpublished opinion, the court of appeals affirmed, concluding that an injured individual could not claim benefits under a tortfeasor’s liability policy as well as benefits under a separate UIM policy owned by the tortfeasor because it would result in an impermissible coverage conversion. Kelly v. State Farm Mut. Auto. Ins. Co., No. C0-02-217, 2002 WL 1837992, at *3 (Minn.App. Aug. 13, 2002). We granted Kelly’s petition for further review and now affirm.

On appeal from a grant of summary judgment when there are no disputed issues of material fact, we review de novo whether the lower court erred in its application of the law. Lynch v. Am. Family Mut. Ins. Co., 626 N.W.2d 182, 185 (Minn.2001); Am. Nat’l Prop. & Cas. Co. v. Loren, 597 N.W.2d 291, 292 (Minn.1999) (stating that interpretation of an insurance contract and the construction of the statutes that govern it are questions of law).

Under the Grand Am policy, State Farm agreed to pay all damages resulting from bodily injury to an insured that the insured is entitled to collect from the driver of an underinsured motor vehicle. The policy defines an “underinsured motor vehicle” as one whose liability limit is less than the amount needed to compensate the insured for his or her damages as long as the at-fault-vehicle is not “furnished for the regular use of you, your spouse or any relative.” Here, the at-fault vehicle, the Intrepid, was owned and regularly used by Kelly’s husband, a named insured on the Grand Am policy, and it is on that basis State Farm denied Kelly’s UIM claim.

Kelly argues that this court should conclude that she is entitled to coverage under the Grand Am policy because the policy exclusion contravenes the underlying purpose of the No-Fault Act and this court’s decision in American Motorist Ins. Co. v. Sarvela, 327 N.W.2d 77, 79 (Minn.1982) (invalidating a policy exclusion that precluded recovery of UIM benefits for which the insured paid a premium and concluding that policy exclusions attempting to prevent UIM coverage from following the person are inconsistent with the Minnesota No-Fault Act). She maintains that her UIM claim should not be denied merely because her husband was listed as an insured on the Grand Am policy and contends that the decision to place a family member’s name on the insurance policy or the title to the automobile is often made by the insurance agent or made for purposes other than insurance and therefore should not be the basis upon which a UIM claim may be denied.

State Farm contends that exclusions such as the one contained in the Grand Am policy are appropriate and consistent with Minnesota law. State Farm argues that to allow Kelly to recover underinsured motorist benefits under the Grand Am policy would permit the conversion of less expensive underinsured motorist coverage (first-party insurance) into more expensive liability coverage (third-party insurance) in a situation in which the insured under the Grand Am policy had the ability to purchase liability coverage in a higher amount for the Intrepid. State Farm contends that to allow such a conversion would be inconsistent with this court’s decision in Petrich v. Hartford Fire Ins. Co., 427 N.W.2d 244 (Minn.1988) (noting that because first-party coverage and third-party coverage contemplate different risks they are assigned different prices).

In general, an insurer’s liability is determined by the insurance contract as long as that insurance policy does not omit coverage required by law and does not violate applicable statutes. Lynch, 626 N.W.2d at 185. In Lynch, we determined that “because the UIM coverage mandated by the [No-Fault] Act is not intended to serve as a supplement for the insured’s inadequate liability coverage, an insurer can write and enforce an exclusion that precludes, that coverage conversion.” Id. at 189. Coverage conversion occurs when UIM benefits are used as a substitute for the tortfeasor’s inadequate liability coverage. Id.; see, e.g., Myers v. State Farm Mut. Auto. Ins. Co., 336 N.W.2d 288, 291 (Minn.1983); Petrich, 427 N.W.2d at 245-46. The purpose of liability insurance is to protect “passengers in [the at-fault] vehicle from negligent driving of the owner or another driving the vehicle,” while,UIM coverage is designed to

protect against a different type of risk, the risk that a negligent driver of another vehicle will have failed to purchase adequate liability insurance; that is, it is intended “to protect the named insured and other additional insureds from suffering an inadequately compensated injury caused by an accident with an inadequately insured automobile.”

Meyer, 371 N.W.2d at 537 (quoting Myers, 336 N.W.2d at 291). When a liability claim is made on one policy and a UIM claim is made on a second policy, both of which list the tortfeasor as an insured, allowing the UIM claim would result in the payment of additional benefits for injuries caused by the negligence of the insured tortfeasor, which is, as we stated in Lynch, the “essence of liability coverage.” 626 N.W.2d at 188.

As noted above, Kelly’s dámages exceeded the liability coverage purchased by her husband on the Intrepid. As a result, he, as the tortfeasor, is hable for Kelly’s damages that exceeded the liability coverage on the Intrepid. To the extent that Kelly is able to obtain benefits under the Grand Am policy for damages exceeding the benefits from the Intrepid policy, her husband receives more liability protection than is provided for in the Intrepid policy. To allow Kelly’s husband to benefit from providing inadequate liability coverage on the Intrepid by supplementing that coverage with cheaper UIM coverage from a separate policy that also names him as an insured results in coverage conversion for which insurance companies may write and enforce policy exclusions. Because, as we said in Lynch, UIM benefits are “not intended to serve as a supplement for the insured’s inadequate liability coverage,” we conclude that under the facts of this case the Grand Am’s policy exclusion of the Intrepid from the definition of “un-derinsured motor vehicle” works to prevent coverage conversion and is therefore permitted and enforceable under the No-Fault Act. Id. at 189.

This conclusion does not, as Kelly contends, conflict with our holding in Sarvela. Sarvela involved a woman injured in a collision with an underinsured automobile while driving her motorcycle. Sarvela, 327 N.W.2d at 77-78. The woman collected the liability policy limits from the auto driver’s insurer and UIM coverage from her motorcycle insurance policy. Id. at 78. She then attempted to collect UIM benefits from a policy she had on another motor vehicle, an automobile that she owned. Id. Her insurer denied the claim, relying on a policy exclusion that precluded coverage if the insured was injured while occupying a motor vehicle that the insured owned. Id. The issue in Sarvela was whether an individual could obtain UIM coverage from two separate policies that she owned when she was injured in a two motor vehicle accident and had already obtained liability benefits from the other person’s motor vehicle insurance. Because the insurance policies from which Sarvela sought UIM coverage did not list the tort-feasor as an insured, the claim at issue in Sarvela was a straightforward first-party insurance claim. See Myers, 336 N.W.2d at 292. Because coverage conversion was not at issue in Sarvela, it provides no guidance here.

Therefore, today’s decision is consistent with Petrich, Myers, Meyer, and Lynch, which held that policy exclusions preventing an insured from using UIM coverage to supplement his or her otherwise inadequate liability insurance are permissible.

Affirmed.

GILBERT, J., and HANSON, J., took no part in the consideration or decision of this case.

DISSENT

MEYER, Justice

(dissenting).

We are faced with the novel question of whether an insurer’s exclusion- of vehicles regularly used by family members from its definition, of “underinsured motor vehicle” contravenes the purpose behind the No-Fault Act as articulated in Minn.Stat. § 65B.42 (2002). I conclude that it does and would hold the exclusion invalid under the facts of this case.

Minnesota Statutes § 65B.42 states that the No-Fault Act was promulgated, in part, “to reheve the severe economic distress of uncompensated victims of automobile accidents within this state * * * without regard to whose fault caused the accident.” In order to achieve that purpose, the legislature mandated that automobile owners insure themselves against situations in which the at-fault party does not have sufficient liability coverage to make whole a victim’s injury. See Minn. Stat. § 65B.49, subd. 3a (2002). In general; policy exclusions that contravene the purpose of the No-Fault Act will not be enforced. See Am. Motorist Ins. Co. v. Sarvela, 327 N.W.2d 77, 79 (Minn.1982); DeVille v. State Farm Mut. Auto. Ins. Co., 367 N.W.2d 574, 576 (Minn.App.1985). We have carved one exception to that general rule, holding that policy exclusions that prevent insureds from converting first-party coverage into third-party liability coverage will be enforced. See, e.g., Lynch v. Am. Family Mut. Ins. Co., 626 N.W.2d 182, 189 (Minn.2001); Petrich v. Hartford Fire Ins. Co., 427 N.W.2d 244, 246 (Minn.1988); Myers v. State Farm Mut. Auto. Ins. Co., 336 N.W.2d 288, 291-92 (Minn.1983). Therefore, we must decide first whether invalidating State Farm’s exclusion of family vehicles from the definition of “underinsured motor vehicle” constitutes improper coverage conversion in this case, and if it does not, whether the exclusion undermines the legislative purpose to protect insureds from the economic losses stemming from injuries caused by underinsured motorists.

In the cases in which we have identified coverage conversion, the insured party has either been attempting to seek UIM benefits under another person’s insurance policy, or attempting to seek UIM benefits under the same policy that provided the liability coverage. See Myers, 336 N.W.2d at 290 (concluding heirs of deceased passenger could not collect UIM benefits under policy of owner of vehicle); Petrich, 427 N.W.2d at 245 (concluding individual injured in one car could not collect UIM benefits from his stepfather’s policy on another car); Meyer, 371 N.W.2d at 536 (concluding insured could not collect UIM from same automobile insurance policy that provided liability coverage); Lynch, 626 N.W.2d at 189 (concluding that to recover UIM under the same policy that had paid liability benefits constituted conversion). Unlike those cases, Kelly is properly attempting to recover UIM under her own insurance policy on the Grand Am, and that policy is not the one that paid the liability coverage. She is not converting her first-party insurance into third-party insurance, but attempting to reap the benefit of the bargain she struck when she and her husband separately insured the Grand Am. See also Kelly v. State Farm Mut. Auto. Ins. Co., No. C0-02-217, 2002 WL 1837992, at *4-5 (Minn.App. Aug. 13, 2002) (Hanson, J., concurring) (explaining why Kelly was not attempting an illicit conversion).

The majority relies almost exclusively on Lynch in reaching its conclusion that Kelly is attempting conversion, despite Lynch’s very different facts. In Lynch we held that the son improperly converted his father’s automobile policy because he had already collected liability insurance under the same policy. Lynch, 626 N.W.2d at 188-89 (“In these cireum-.stances, paying UIM benefits from the same policy results in paying additional benefits for the injuries caused by the negligence of the insured * * * [t]hat is the essence of liability coverage.”). But we went on to conclude that because such conversion was not prohibited by the terms of the insurance policy, it did not contradict the No-Fault Act, and the policy would be enforced, despite the conversion. Id. at 190.

As applied to the facts of this case, Lynch is inapposite because Kelly is not attempting to collect UIM from the same policy that paid her bodily injury liability. State Farm’s definition of “underinsured motor vehicle” is not preventing conversion of first-party insurance to third-party insurance, but preventing an insured from collecting her UIM coverage at all. Under the majority’s result, Kelly receives nothing from her underinsured motorist coverage, despite having paid for such mandatory coverage.

Having concluded that Kelly is not attempting any sort of prohibited policy conversion by claiming UIM benefits, I next examine whether State Farm’s policy definition of an “underinsured motor vehicle” comports with the public policy behind the No-Fault Act. The clear terms of the statute show that the legislature’s intent was “to relieve the severe economic distress of uncompensated victims of automobile accidents within this state * * * without regard to whose fault caused the accident.” Minn.Stat. § 65B.42. In contrast, the policy exclusion in this case leaves Kelly under-compensated for her injuries solely because her husband caused the accident while driving a car he owned. I do not believe the legislature intended marriage to serve as a barrier to an individual’s relief from the “severe economic distress” caused by the negligence of an underin-sured tortfeasor. I certainly do not believe the legislature intended the hyper-technical distinctions between who does and does not receive UIM that the majority introduces — focusing on who has title to the car and who is a named insured on the insurance policy. Therefore, I would conclude that State Farm’s definition is invalid under the facts of this case, and Kelly can recover UIM benefits under her insurance policy on the Grand Am.

We have never before decided whether an insurer can define an “underinsured motor vehicle” in order to prevent one spouse from recovering under his or her UIM coverage when the injury was caused by the other spouse and liability has been paid from a policy on a different vehicle. Faced with this novel question of law, I would hold that State Farm’s definition cannot be enforced to prevent Kelly from receiving UIM under her automobile insurance policy because to do so would contravene the purpose of Minnesota’s No-Fault Act.

      . Under the Intrepid policy, the Intrepid is excluded from the definition of an "underin-sured motor vehicle” for purposes of obtaining UIM benefits. We have upheld this exclusion as proper and consistent with the purposes of the No-Fault Act. See Meyer v. Ill. Farmers Ins. Group, 371 N.W.2d 535, 537 (Minn.1985) (holding that an injured individual cannot obtain both liability coverage and underinsured motorist coverage from the same policy). Kelly does not challenge that exclusion.

      . State Farm also based its denial of Kelly’s claim on its interpretation of the statutory language in Minn.Stat. § 65B.49,'subd. 3a(5) (2002), which it contends limits Kelly's recovery solely to the at-fault vehicle. Because we conclude that the policy exclusion at issue here is enforceable, we need not and therefore do not address this contention.

      . As is probably true for most married couples, Kelly and her husband were both named insureds on each of their automobile insurance policies. It appears that if Kelly’s husband were not named as an insured on the Grand Am, the majority would not find Kelly was attempting improper coverage conversion, and hold the exclusion inapplicable. This distinction seems a feeble basis to deny adequate compensation and is contrary to the statutory requirement of mandatory underin-surance coverage.


author: HANSON, Justice. GILBERT, Justice,

text:
    STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. CINCINNATI INSURANCE COMPANY, Respondent.
    No. C4-02-396.
    Supreme Court of Minnesota.
    July 31, 2003.

      Suzanne Wolbeck Kvas, Stringer & Roh-leder, Ltd., St. Paul, MN, for State Farm.
    Rolf E. Sonnesyn, Chandelle L. Heyer, Tomsche, Sonnesyn & Tomsche, P.A., Minneapolis, MN, for Cincinnati Ins. Co.
   OPINION

HANSON, Justice.

Appellant State Farm Mutual Automobile Insurance Company (State Farm) paid for property damage to the vehicle of its insured, Michelle Miller, resulting from a collision with a vehicle driven by Glen Meyer, the insured of Respondent Cincinnati Insurance Company (Cincinnati). State Farm served on Cincinnati a Petition for Arbitration through Arbitration Forum, Inc., pursuant to an intercompany Automobile Subrogation Arbitration Agreement to which both State Farm and Cincinnati are signatories. When Cincinnati refused to arbitrate, contending that it provided no coverage because Meyer had instructed Cincinnati to riot defend or indemnify, State Farm filed a motion in district court under Minn.Stat. § 572.09(a) (2002) for an order compelling arbitration. The district court denied the motion, holding that Meyer’s refusal to tender the defense to Cincinnati precluded arbitration, and the court of appeals affirmed. We reverse. .

On February 24, 2001, Meyer was involved in a car accident with Miller. The damage to Miller’s vehicle amounted to $2,044.33, which was paid by State Farm to the extent it exceeded Miller’s $500 deductible. Meyer refused to reveal the identity of his insurance provider. According to an affidavit executed by Meyer, Cincinnati informed him that any insurance payment on his behalf would result in nonrenewal of his insurance coverage. Meyer had informed Cincinnati that he would decline coverage, negotiate with State Farm independently, and pay any damages out of pocket. State Farm requested that Meyer pay for the damage incurred to Miller’s vehicle. Meyer offered to pay half of the total damages to Miller’s vehicle, believing that Miller was partially responsible for the accident.

State Farm brought suit against Meyer to recover for the damage resulting from the accident. State Farm subsequently confirmed its belief that Cincinnati provided Meyer’s insurance. State Farm and Cincinnati are both parties to an arbitration agreement, which would normally require arbitration of claims, such as this, that involve a minor accident with no personal injury. State Farm made a motion in district court under Minn.Stat. § 572.09(a) to compel Cincinnati to resolve the dispute through arbitration, pursuant to the arbitration agreement. The court denied the motion.. The court of appeals affirmed the district court, concluding that an insured must tender a defense of a claim as a condition precedent to compelling arbitration under an intercompany arbitration agreement. State Farm Mut. Auto. Ins. Co. v. Cincinnati Ins. Co., 651 N.W.2d 542, 545 (Minn.App.2002).

We review de novo a district court’s determination concerning the scope of an arbitration agreement. Johnson v. Piper Jaffray, Inc., 530 N.W.2d 790, 795 (Minn.1995). State Farm and Cincinnati agree that they are parties to an agreement to arbitrate claims arising from accidents with minor damages of the type incurred here. The parties dispute whether the arbitration agreement mandates that Cincinnati submit the claim to arbitration despite Meyer’s request that Cincinnati not defend or indemnify the claim.

State Farm argues that the arbitration agreement applies because Cincinnati’s only defense to coverage, that Meyer has requested that Cincinnati not defend or indemnify him, amounts to “noncooperation,” and that the arbitration agreement excludes a defense to coverage based on noncooperation. The arbitration agreement includes the following provision:

Signatory companies are bound to forego litigation and in place thereof submit to arbitration any questions or disputes which may arise from any automobile physical damage subrogation or property damage claim not in excess of $100,000.
This Article shall not apply to:
(b) any claim as to which a company asserts a defense of lack of coverage on grounds other than
(1) delayed notice
(2) no notice
(3) noncooperation

Cincinnati argues that the arbitration agreement does not apply because Meyer never tendered defense of the claim. Both the district court and the court of appeals held that a tender of defense is a prerequisite to an insurer’s duty to defend or indemnify, that such a tender is likewise a prerequisite to an insured’s duty to cooperate, and that the failure of Meyer to tender the defense therefore could not be noncooperation. We disagree.

The mandatory insurance scheme of the Minnesota No-Fault Automobile Insurance Act would be seriously undermined if each insured had the right to opt out of coverage after the accident occurred. One important purpose of the No-Fault Act is to provide the remedy of arbitration for property damage claims, and to reduce the number of cases filed in court. Minnesota Statutes § 65B.42 (2002) provides:

The detrimental impact of automobile accidents on uncompensated injured persons, upon the orderly and efficient administration of justice in this state, and in various other ways requires that sections 65B.41 to 65B.71 [Minnesota’s No-Fault Automobile Insurance Act] be adopted to effect the following purposes:
* * * *
(4)to speed the administration of justice, to ease the burden of litigation on the courts of this state, and to create a system of small claims arbitration to decrease the expense of and to simplify litigation, and to create a system of mandatory intercompany arbitration to assure a prompt and proper allocation of the costs of insurance benefits between motor vehicle insurers!.]

Permitting the insured to opt out of coverage would deny the other party and his or her insurer the remedy of arbitration and compel them to file an action in district court.

Further, the No-Fault Act requirement, that every vehicle is covered by insurance, would be defeated if an owner could simply opt out of coverage after an accident had occurred. Thus, the Act requires every owner of a motor vehicle to maintain insurance by making it a crime to fail to provide proof of such insurance (Minn.Stat. § 169.791, subd. 2 (2002)); authorizes the revocation of the owner’s driver’s license for failure to provide proof (Minn.Stat. § 169.792, subd. 7 (2002)); and makes it a crime for an owner to allow anyone to operate the vehicle without insurance and for a driver to operate the vehicle without insurance (Minn.Stat. § 169.797, subds. 2-3 (2002)). An owner of a motor vehicle cannot satisfy these requirements by obtaining proof of insurance before an accident but then withholding that insurance after the accident. In fact, the Act requires that the insurance specifically provide that liability becomes absolute with the occurrence of the accident and cannot thereafter be cancelled or annulled by the actions of the insured. Minn.Stat. § 65B.49, subd. 3(3)(a) (2002).

Cincinnati argues that it is merely responding to the reasonable request of a policyholder not to participate in the resolution of a claim where that participation may result in the loss of the policyholder’s insurance coverage. We, recognize that some policyholders may attempt to privately negotiate settlements with the owner or insurer of the other vehicle. But any desire of a policyholder to retain control of the claim, so as to avoid any adverse impact on the underwriting of the insurance policy, does not release his or her insurer from its obligations under the arbitration agreement.

Similarly, Cincinnati’s concern, that' it might breach some duty to Meyer if it arbitrates this claim against Meyer’s specific directions, is unwarranted. Under the No-Fault Act, an insurer is specifically authorized to settle the claim of another insurer for indemnity, with or without the consent of its insured. Id. Thus, Cincinnati has no legal obligation to honor its insured’s request not to arbitrate the claim; to the contrary, Cincinnati has a contractual obligation to honor State Farm’s demand for arbitration.

Accordingly, we reverse the court of appeals and remand to the district court with instructions to enter an order compelling arbitration and staying State Farm’s action against Meyer. Further, to the extent the district court’s denial of State Farm’s claim for attorney fees under the arbitration agreement was based on the conclusion that Cincinnati had no duty to arbitrate absent a tender of defense by Meyer, we direct the district court to reconsider that claim in light of this opinion.

Reversed and remanded.

DISSENT

GILBERT, Justice,

dissenting.

I respectfully dissent from the majority opinion and would affirm the court of appeals. This case involves a small property damage claim resulting from an accident where the fault between two.drivers is in dispute. Glen Meyer has obtained the mandatory no-fault insurance coverage and as an insured he is not bound to arbitrate the claim that is brought by Michelle Miller. Meyers’ carrier may pursue resolution of the claim on its own, but nothing in the No-Fault Act or the insurance contract prohibits the reparations obligor and its insured from allowing an insured to contest such a claim. Furthermore, the liability coverage provided by Cincinnati has not been cancelled or annulled by agreement between the reparation obligor (Cincinnati) and Meyer, its insured. See MinmStat. § 65B.49, subd. S(3)(a) (2002). Cincinnati stands behind whatever liability • and damage for which Meyer is ultimately adjudicated as being responsible.

There are arbitration provisions within Minnesota’s No-Fault Arbitration Insurance Act. The majority incorrectly concludes that a third-party claimant (as opposed to an insured and the reparation obligor) has been provided with the remedy of arbitration for property damage claims. To the contrary, Minn.Stat. § 65B.42 does “create a system of small claims arbitration to decrease the expense of and to simplify litigation.” Minn.Stat. § 65B.42(4) (2002). However, this provision provides for arbitration procedures concerning claims by an insured against the insured’s reparation obligor for collision damage coverage. See Minn.Stat. § 65B.525, subd. 1 (2002). Likewise, there is mandatory intercompany arbitration of certain claims as required in section 65B.42(4), but these provisions are not at issue in this ease. However, there is no statutory or contractual requirement that Miller or Meyer resolve their dispute through arbitration. Thus, contrary to what the majority holds, the purpose of a system of small claims arbitration -would not be frustrated by allowing an insured to prevent the operation of the No-Fault Act by refusing to tender.

Furthermore, Meyer here has not unilaterally opted out of the mandatory insurance scheme after an accident has occurred. He merely wants to litigate the damage issue, which he has also offered to pay directly once the amount and liability have been determined. Obviously, if he does not make that payment, Cincinnati is required to-make that payment. The insured’s actions are motivated because of premium considerations and possible cancellation of his policy, if he has Cincinnati handle the claim directly. One would think that up to at least the amount of the (non-subrogation) deductible of $500 an insured would be freely able to litigate that issue, notwithstanding the “Automobile Subrogation Agreement.”

The majority recognizes that insureds do privately negotiate settlements with the owner of other vehicles. At oral argument State Farm admitted that it knows many of its insureds do the same thing and they have a policy of allowing such private settlements. This not only helps its insured by keeping premiums down and policies in effect, but' also saves administrative costs and expenses of the reparation obligor of otherwise setting up the claim file, investigating and litigating or arbitrating such claim and possibly making payments on those claims. It appears to be understood by everybody in the industry that this is a widespread practice and it is not even in dispute that the reparation obligor is never released from ultimate responsibility.

Accordingly, I would affirm the court of appeals and' allow this practice to continue. The majority is elevating form over substance. Its legal conclusion is premised on an inaccurate assumption about arbitration requirements between two insureds and elevates the subrogation arbitration agreement between two reparation obligors over the separate rights of two insureds.

      . Although Minn.Stat. § 65B.48, subd. 3 (2002) permits self-insurance, the requirements are substantial and Meyer did not claim that he attempted to qualify for self-insurance.


author: ANDERSON, PAUL H., Justice. PAGE, Justice,

text:
    Violet DENELSBECK, o/b/o herself and others similarly situated, Respondents, v. WELLS FARGO & CO., a Delaware corporation, d/b/a Wells Fargo Bank, N.A., Petitioner, Appellant.
    No. C8-02-594.
    Supreme Court of Minnesota.
    July 31, 2003.

      Richard T. Thomson, David A. Harbeck, Lapp, Libra, Thomson, Stoebner & Pusch, Minneapolis, MN, for Appellant.
    Edwin L. Sisam, Dorothy J. Buhr, Tammy P. Friedrichs, Sisam & Watje, Minneapolis, MN, for Respondent.
    Joseph J. Witt, General Counsel, Edina, MN, for Amicus Curiae MN Bankers Assn.
   OPINION

ANDERSON, PAUL H., Justice.

Respondent Violet Denelsbeck brought this breach of contract action against appellant Wells Fargo Bank, N.A., alleging that Wells Fargo breached the terms of her retirement certificate of deposit. De-nelsbeck contends that Wells Fargo failed to give her adequate notice that it was changing the 12.25% interest rate paid on her certificate to 4.6%. Concluding that Wells Fargo had provided adequate notice, the district court granted summary judgment to Wells Fargo. The court of appeals reversed the grant of summary judgment, concluding that “genuine issues of material fact [existed] regarding whether a substitute contract was formed and whether Wells Fargo provided notice as required by the contract.” Denelsbeck v. Wells Fargo & Co., No. C8-02-594, 2002 WL 31057013, at *1 (Minn.App. Sept. 17, 2002). We reverse.

• On July 11, 1984, Violet Denelsbeck purchased a savings certificate for her Individual Retirement Account from Waseca Savings & Loan. The certifícate was for 84 months, matured on July 11,1991, and had an initial 12.25% interest rate. The certificate’s renewal section provided for automatic renewal every seven years at the market rate in effect for market rate certificates with the same term on the date of renewal. The renewal section read as follows:

Renewal Section: The accountholder agrees that this account shall be automatically renewed at the close of business on the initial maturity date shown above or on the maturity date of any renewal term at a rate of interest equal to the rate in effect on Market Rate Certificates with the same term. The accountholder agrees that automatic renewal shall take place unless (1) the accountholder withdraws the account balance within the seven day grace period referred to in Section 6 below or, (2) the accountholder receives written no--tice from the Association at least 15 days prior to any renewal date that this account shall not be renewed for this type of account. If the latter occurs, the account will be converted to a regular savings account at the Association’s then current interest rate on regular savings accounts or the account-may be renewed at a new interest rate for this type of account at the accountholders’ option.

(Emphasis added.)

In her deposition, Denelsbeck testified that an employee of Waseca Savings & Loan Association named Mary told her when she bought the certificate that the interest rate would be “permanent” and that it would not change ¡as long as Denels-beck retained the certificate. It was not clear from Denelsbeck’s testimony, however, whether Mary meant that the interest rate would be permanent only for the seven-year term of the certificate or for each successive renewal. Denelsbeck further testified that although she read the certificate and understood that Waseca Savings & Loan could change the interest rate if it-gave her 15 days written notice, she “was given to understand it wasn’t likely.”

Through a series of transactions in the 1980s, Waseca Savings & Loan was merged into' First Minnesota Savings Bank, F.S.B. Despite this change in ownership, Denelsbeck asserts that she did not have another conversation with a bank or savings association representative about her certificate until on or around December 4, 1990. Denelsbeck stated that at about that time she received'a call from someone in the IRA Savings Department at First Minnesota who told her, “we can’t pay 12 and a quarter.” Denelsbeck testified she-responded by saying “oh yes, you can, that’s a fixed rate.” Denelsbeck stated that the person then told her that he would check into it further.

That same month, December 1990, First Minnesota was acquired by Norwest Bank Minnesota, N.A. (Norwest). On December 18, 1990, the Retirement Services Department of Norwest sent a letter to Denels-beck stating in relevant part:

We are writing to confirm that the Retirement certificate that you opened at our former First Minnesota Waseca office has been transferred to our Edina branch office.
The terms, conditions, and interest rate of your original certificate remains in effect until maturity, as is reflected on the enclosed replacement certificate.
To avoid any confusion with your certificate, we ask that you please destroy your former certificate document.

The replacement document that accompanied Norwest’s December 18 letter was on a First Minnesota form and was entitled “Rate Change or Internal Transfer Request/ Fixed Rate Retirement Savings Certificate Disclosure.” At the top of the front page of the document, there was a notation that said, “Transferred from Waseca to Edina to have all accounts in same entity.” Reading down the document, it first provided identifying information on Denelsbeck and then provided certain options from which to choose. Account numbers had been typed in one of the options that read:

I request that First Minnesota Saving Bank, F.S.B. transfer my existing Retirement Account Number(s)(A) [account number], * * * to a * * * Retirement Account Number [account number] with the rate and term as shown below in the New Account Summary.

There was a box next to the foregoing option and a line for the “Participant’s Signature.” On her copy of the replacement document, Denelsbeck had not signed on the signature line. Denelsbeck testified that she did not recall returning the replacement document to the bank, but instead she destroyed the original 1984 certificate as directed and kept the replacement document for her files. At the bottom of the replacement document under a section termed New Account Summary, the original terms of the document were restated as follows: original date of issuance 7/11/84, initial maturity date 7/11/91, initial term 84 months, and rate of earnings 12.25%.

The replacement document also had a number of information sections on the back and a statement at the top that read, “This Retirement Savings Certificate is Non-Transferrable and Non-Negotiable.” The renewal section on the back of the document provided:

This account will be automatically renewed at the close of business on the Initial Maturity Date or on the maturity date or any Renewal Term unless (1) it is withdrawn within the 7 day period referred to in the Penalty Clause Section hereof, or (2) at least 15 days prior to a maturity date, the Bank gives written notice to the participant that this account will not be renewed at the earnings rate set forth in the Earnings Section and/or for any other term(s) set forth in this certificate. In such latter event, upon maturity the account will be renewed at such Rate of Earnings and/or such different terms as set forth in said written notice.

(Emphasis added.) Denelsbeck testified at her deposition that it was her understanding the replacement document only changed the account number and did not change the terms of her original certificate purchased in 1984.

On or about July 8, 1991, shortly before Denelsbeck’s certificate matured, Norwest sent a letter to all savings certificate customers acquired from First Minnesota. The letter provided in relevant part that:

Since the merger, we have been considering ways to more efficiently serve you. One way we feel we can do that is to standardize all accounts according to Norwest’s operations. Therefore, effective August 16, 1991 your Savings Certificate/s) will be converted to the Nor-west operations system.
Please be assured that the interest rate and the terms of your current certificate will not be changed. There are, however, some operational changes that become effective with the conversion.

(Emphasis in original.) One of the changes noted in the letter was that effective upon renewal, “[t]he savings certificate will be subject to Norwest’s terms and conditions. (See enclosure.)” Toward the end of the letter, it was reiterated that “[a]s stated earlier, these changes do not affect interest rates or maturity dates for certificates you already hold, until renewal.” (Emphasis added.) A Norwest terms and conditions pamphlet was also enclosed with the letter. On page 15 of this 32-page pamphlet under the “Fixed Rate Statement Certificate Deposits” section is the following provision:

Automatic renewal. My deposit will be renewed at maturity unless I notify you otherwise. It will be renewed for the same term. The renewal rate will be your rate in effect on the maturity date for a new deposit of the same term and amount.

Denelsbeck stated that she did not recall receiving this letter or enclosure from Norwest. Nevertheless, Denelsbeck acknowledges that whether the letter or enclosure were sent is not an issue in this case.

On July 11, 1991, Norwest renewed De-nelsbeck’s certificate for another seven years at an interest rate of 12.25%. At the time, the market rate of interest for new certificates was somewhere between 7 and 9½%. Denelsbeck’s certificate was up for renewal just after the purchase of First Minnesota by Norwest and the conversion of all the First Minnesota accounts. Wells Fargo, Norwest’s successor, asserts that at that time, Norwest was unable to separate those accounts that automatically renewed at the market rate but not below a certain floor from other market rate certificate accounts. Therefore, to avoid the possibility of mistakenly penalizing customers, Wells Fargo asserts that Norwest renewed all accounts at their old rate because it knew that the old rate would be above whatever floor-limit was required by a certificate.

Denelsbeck stated that in December 1997, approximately six months before her certificate was to come due for the second time, she called Norwest to confirm that her certificate was going to renew at the 12.25% interest rate. Denelsbeck said that someone named Lisa answered the phone and told her that her certificate would roll over at the same rate of interest for another term if she did not move it. When Wells Fargo asked Denelsbeck in her deposition about handwritten notes on her copy of her July 30, 1997 bank statement, Denelsbeck stated that she made notes of her conversation with Lisa contemporaneously with the conversation. The handwritten note on the statement included the date and time of the call and the notation, ‘Will renew at same rate of interest and will automatically renew if I don’t touch it.”

When Denelsbeck received her 1997 bank statement from Norwest, it included in the middle of the first page in bold, upper case print the following:

The enclosed IRA disclosure and individual retirement plan is an amendment of your individual retirement plan. Many of the changes are necessary to comply with recent tax law changes. This amendment will be effective unless you notify your banker in writing within 30 days that you do not consent to this amendment. The changes include increased spousal contribution limits, increased threshold income levels and active participant rules for deductible contributions, new withdrawal reasons not subject to the 10% IRS premature distribution penalty and an explanation of how distributions to spousal beneficiaries subject to marital and community property laws will be handled. Questions as to how these changes affect you should be directed to your tax ad-visor.

Wells Fargo contends that included with Denelsbeck’s bank statement was a pamphlet entitled “IRA Disclosure and Individual Retirement Plan.” On the first page of this 47-page pamphlet was a paragraph stating “[t]his disclosure statement is only a brief summary of the Bank’s IRA program. If there is any inconsistency between this summary and the plan documents, the plan documents control.” On page 25 under a section entitled “Time Deposit Investments,” the pamphlet provided that

I will be able to change from one type of investment to another on my investment’s maturity date or within seven calendar days after it. If I do not change my type of investment, you will automatically renew it for the same period.
My renewed investment will be on terms as close to those of my original investment as possible except that the interest rate will be set at the rate you are currently offering on that type of investment.

In addition to the foregoing, there was a section on the back of the first page of the bank statement that provided:

Renewal Policies. If your retirement time account is automatically renewable, at maturity it will automatically renew for a like term, unless, prior to maturity, the Bank notifies you that the Bank will not renew your account. You will have seven calendar days after the maturity date to withdraw funds without penalty.

Denelsbeck acknowledged receiving and having read her December 31, 1997 bank statement. She does not specifically recall receiving the pamphlet enclosed with her bank statement, but she conceded that she likely received it.

Shortly before the second renewal of Denelsbeck’s certificate on July 11, 1998, Norwest sent Denelsbeck a “Time Account Maturity Notice” which provided:

The above account, if renewed, will renew for a like term and mature on 7/11/05. The new rate will be per the terms of the account unless payment is requested.

Wells Fargo contends that two “staffers” were included in the same envelope with the maturity notice. The first staffer was entitled “Terms for All Time Accounts” and described the various terms and conditions governing time accounts held with Norwest. The staffer provided in relevant part:

If your time account is automatically renewable, at maturity it will automatically renew for a like term, unless, prior to maturity, the Bank notifies you that the Bank will not renew your time account. You will have seven calendar days after the maturity date to withdraw funds without penalty.

The second staffer was entitled “How to Obtain Current Interest Rate Information” and provided in relevant part:

The Interest Rate and Annual Percentage Yield that will be paid on your certificate upon renewal have not yet been determined. You may find out what the NEW savings certificate Annual Percentage Yield will be by calling the telephone number listed below on the date your savings certificate matures or first business day thereafter.

On July 11, 1998, Norwest renewed De-nelsbeck’s certificate at a 4.6% interest rate, the then-current market rate. De-nelsbeck stated that she was unaware that her certificate was renewed at 4.6%, and not 12.25%, until she received her December 31, 1998 statement. Sometime after Denelsbeck’s certificate renewed in 1998, Norwest Bank merged with and became part of Wells Fargo.

Denelsbeck brought suit against Wells Fargo alleging that Wells Fargo’s predecessor bank, Norwest, was in breach of contract when it renewed her certificate -at an interest rate of 4.6%, not 12.25% as she expected. After receiving cross motions for summary judgment, the district court concluded that Wells Fargo had provided adequate notice to Denelsbeck • that the rate of her certificate might change and granted summary judgment to Wells Fargo. On appeal, the court of appeals reversed the grant of summary judgment, concluding that “genuine issues of material fact [existed] regarding whether a substitute contract was formed and whether Wells Fargo provided notice as required by the contract.” Denelsbeck, 2002 WL 31057013, at *1. Wells Fargo petitioned for review, which we granted.

I.

In its appeal, Wells Fargo contends that the two stuffers provided with the maturity notice, along with the prior notices, were sufficient to notify Denelsbeck that in 1998 her certificate would renew at the then-current market rate. Denelsbeck does not contest that the stuffers might have been enclosed with her bank statement or that the other pamphlets were enclosed with various documents mailed to her. However, she asserts that the stuf-fers and other notices did not adequately inform her that her certificate would not renew at a 12.25% interest rate.

Summary judgment is proper when there are no genuine issues of material fact and one party is entitled to judgment as a matter of-law. Minn. R. Civ. P. 56.03. In reviewing a summary judgment motion, we must “determine whether any issues of material fact exist and whether the trial court erred in its application of the law.” Ruud v. Great Plains Supply, Inc., 526 N.W.2d 369, 371 (Minn.1995) (citing Offerdahl v. Univ. of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn.1988)). In doing so, we view the evidence in the light most favorable to the nonmoving party. Id. at 371.

In determining whether summary judgment was proper, we must first identify the disputed issues. In this cáse, the parties are contesting (1) whether the replacement document that accompanied Norwest’s December 18, 1990 letter to De-nelsbeck represented a substitute contract, and (2) whether Wells Fargo provided De-nelsbeck with adequate notice that her retirement certificate would renew at the then-current market rate. While preserving the issue whether the replacement document represented a substitute contract, Wells Fargo concentrates its arguments in this appeal on whether the adequacy of notice is a question of fact or law and whether notice was adequate assuming a substitute contract was formed. We will begin our review by examining the issue of notice, assuming that the replacement document formed a substitute contract. We do so because the issue of whether a substitute contract was formed is moot if we conclude that notice was adequate.

Wells Fargo contends that the adequacy of notice is a question of law and that the court of appeals erred when it ruled that the question of adequacy is one of fact to be decided by the jury. In determining whether the adequacy of a notice is a question of law or fact, we must first examine the method by which notice is required. In this case, there are two notice requirements that Wells Fargo must meet. First, federal regulations require that 30 days before maturity Wells Fargo must make specific disclosures to account holders with automatically renewable time accounts with a term longer than one year. Truth in Savings, 12 C.F.R. §§ 230.4(b), 230.5(b)(1) (2003). Second, at least 15 days before the maturity date, Wells Fargo must give Denelsbeck written notice that the terms of her certificate will change. This second requirement is derived from the substitute contract Denels-beck may have had with Norwest. A contract was formed between Denelsbeck and Waseca Savings & Loan when Denelsbeck purchased her original certificate in 1984, see State v. Northwestern Nat’l Bank of Minneapolis, 219 Minn. 471, 482, 18 N.W.2d 569, 575 (1945) (stating a contract exists between bank and those depositing funds in the bank), and a substitute contract was arguably formed when Norwest sent Denelsbeck the replacement document in December 1990.

To evaluate whether these two notice requirements were met requires interpreting the federal regulations and the language of Denelsbeck’s potential contract with Norwest. The construction of a statute or a regulation is a question of law to be determined by the court. St. Otto’s Home v. Minn. Dept. of Human Servs., 437 N.W.2d 35, 39 (Minn.1989). The construction and effect of a contract is also a question of law unless the contract is ambiguous. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn.1979). “A contract is ambiguous if, based upon its language alone, it is reasonably susceptible of more than one interpretation.” Art Goebel, Inc. v. N. Suburban Agencies, Inc., 567 N.W.2d 511, 515 (Minn.1997). The determination of whether a contract is ambiguous is a question of law, id. at 515, but the interpretation of an ambiguous contract is a question of fact for the jury. Turner, 276 N.W.2d at 66. If a contract is unambiguous, the “contract language must be given its plain and ordinary meaning, and shall be enforced by courts even if the result is harsh.” Minneapolis Pub. Hous. Auth. v. Lor, 591 N.W.2d 700, 704 (Minn.1999) (footnotes omitted).

As to the federal regulations, the adequacy of the notice provided by Wells Fargo depends on whether Wells Fargo complied with the detailed requirements of the federal regulations. Because determining compliance with a regulation requires a construction of that regulation, which is a question of law, the determination of the adequacy of the notice provided by Wells Fargo under the federal regulations is a question of law to be determined by the court and could, therefore, be properly addressed in summary judgment.

As for Denelsbeck’s contract with Norwest, Wells Fargo contends that the notice it provided complied with the federal regulations and, therefore, was also sufficient under the contract. Denelsbeck asserts that the replacement document requires that she be informed that her retirement certificate would not renew at the specific interest rate of 12.25% and any notice she received- failed to provide her with that information. We conclude this dispute between the parties is not due to the contract being ambiguous, but rather is due to differing interpretations of the notice required under the contract. A determination of whether the notice Wells Fargo provided to Denelsbeck complies with the terms of the contract involves the construction and effect of the contract, which is also a question of law to be determined by the court and could also be addressed via summary judgment.

II.

Having determined that, in this case, the issue of notice does not involve a dispute as to genuine issues of material fact but rather is a question of law for which summary judgment is appropriate, we can proceed to decide the notice issue based on the record before us. In doing so, we must determine whether the district court erred in its application of the law. We begin our analysis by examining the applicable federal regulations.

Regulation DD provides that the following disclosures must be made 30 days before maturity for time accounts with maturities longer than one year that automatically renew: (1) rate information, (2) compounding and crediting, (3) balance information, (4) fees, (5) transaction limitations, (6) features of time accounts, and (7) bonuses. 12 C.F.R. §§ 230.4(b), 230.5(b)(1). The regulations further provide that if the new interest rate and annual percentage yield are unknown when the disclosures are made, the disclosure should “state that those rates have not yet been determined, the date when they will be determined, and a telephone number consumers may call to obtain [the new] interest rate and the annual percentage yield.” 12 C.F.R. § 230.5(b)(1).

Wells Fargo asserts that' more than 30 days' before the July 11, 1998 maturity date, Denelsbeck received three documents from Norwest. The first document entitled “Time Account Maturity Notice” provided that Denelsbeck’s certificate would renew for a like term and “[t]he new rate will be per the terms of the account.” The second document entitled “How' to Obtain Current Interest Rate Information” provided that the interest rate to be paid on the certificate had not yet been determined, and the new rate could be obtained by calling the telephone number listed. The third document entitled “Terms for All Time Accounts” provided information about the minimum balance required, deposits and withdrawals of principal, withdrawal of interest prior to maturity, renewal policies, interest compounding and crediting, the method used to calculate earned interest, fixed-rate accounts, variable-rate accounts, and early withdrawal penalties. Denelsbeek does not contest that she received these notices or that they complied with the federal regulations. Our review of these documents further indicates that they are in compliance with the requirements of the federal regulations. Therefore, we conclude the notice provided by Wells Fargo to Denels-beck was adequate under the federal regulations.

III.

As previously noted, we cannot end our analysis with the conclusion that Wells Fargo’s notice to Denelsbeek was adequate under the federal regulations. To be entitled to summary judgment, Wells Fargo must have also complied with any notice requirements contained in the contract between Wells Fargo and Denelsbeek as evidenced by the replacement document. Under the replacement document, Denels-beck’s certificate would automatically renew unless at least 15 days before maturity, Wells Fargo gave her written notice that the certificate would “not be renewed at the earnings rate set forth in the Earnings Section and/or for any other term(s) set forth in this certificate.” The replacement document further provides that if written notice is provided, the certificate “will be renewed at such Rate of Earnings and/or such different terms as set forth in said written notice.”

Wells Fargo contends that by complying with the federal regulations, it has also met its contract obligations under the replacement document. Denelsbeek asserts that compliance with the federal regulations does not relieve Wells Fargo from compliance with the notice obligations under the contract. We agree with Denels-beck on this point. While it is true that parties may not contract for less notice than that required by a federal regulation, the parties are free to contract for more stringent notice than those contained in the federal regulations. See Indep. Sch. Dist. No. 877 v. Loberg Plumbing and Heating Co., 266 Minn. 426, 434, 123 N.W.2d 793, 799 (1963). For this reason, we cannot say that compliance with the federal regulations is prima facie evidence of compliance with the terms of a contract. Rather, we must proceed to examine the notice required under the contract to determine what requirements Wells Fargo must meet in order to comply with the contract.

We begin this part of our analysis by examining the notice requirement stated in the replacement document: “at least 15 days prior to a maturity date, the Bank [must] give[ ] written notice to the participant that this account will not be renewed at the earnings rate set forth in the Earnings Section and/or for any other term(s) set forth in this certificate.” The focus of the debate between the two parties is the extent of the notice required by these words. Denelsbeek asserts that Wells Fargo must specifically state in its notice that her certificate would not renew at 12.25%. Wells Fargo contends that informing Denelsbeek that the interest rate on her new certificate could not be determined yet and that she should call a listed telephone number to obtain the new rate, together with the other notices provided, was sufficient to give Denelsbeek notice that her certificate would renew at the then-current market rate, not at 12.25%. Here, we agree with Wells Fargo.

Over 30 days before maturity, Wells Fargo sent Denelsbeek a “Time Account Maturity Notice” that provided that her certificate would renew “for a like term and * * * [t]he new rate will be per the terms of the account.” When determining what is meant by the phrase “the terms of the account,” we first look at the replacement document itself. The replacement document lists.the terms of the account as: original maturity date 7/11/84, initial maturity date 7/11/91, initial term 84 months, and rate of earnings 12.25%. In an accompanying letter, Norwest informed Denelsbeck that “[t]he. terms, conditions, and interest rate of your original certificate remains in effect until maturity, as is reflected on the enclosed replacement certificate.” (Emphasis added.) Thus, at this point, the terms of the account dictated that the interest rate on the certificate should be 12.25%. Subsequently, however, Norwest and Wells Fargo sent Denelsbeck numerous letters, statements, and “stuf-fers” that consistently told her that the terms of her account had changed and that her certificate would now renew at the market rate of interest upon renewal.

In the letter sent in 1991, Norwest informed Denelsbeck that while the conversion to Norwest would not change the current rate of interest on her certificate, upon renewal her certificate would be subject to Norwest’s terms and conditions. The pamphlet included with the letter outlined Norwest’s terms and conditions and included the statement that “[t]he renewal rate will be [Norwest’s] rate in effect on the maturity date for a new deposit of the same term and amount.” Included with Denelsbeck’s December 31, 1997 bank statement was an IRA Disclosure and Individual Retirement Plan pamphlet that provided in relevant part that her investment would renew at terms as close to those of her original investment as possible, except the interest rate would be set at the rate currently being offered on that type of investment. Over 30 days before her certificate renewed in 1998, Wells Fargo sent Denelsbeck a statement, along with the time account maturity notice, entitled “How to Obtain Current Interest Rate Information,” that told her that her interest rate could not be determined and she must call the telephone number listed to obtain her new rate.

These documents, along with a number of other stuffers provided with the various letters and statements sent to De-nelsbeck that we will not discuss in detail here, consistently informed her that the terms of her account had changed and that, upon renewal, the interest rate on her certificate would be the current market rate. Therefore, we conclude that the notice provided by Wells Fargo to Denels-beck was adequate as a matter of law when viewed in the context of the contract requirements.

In reaching the foregoing conclusion, we note that here, even though we have concluded that notice under the federal regulations was sufficient to meet the contract notice requirements, we have come to this conclusion without reaching the issue whether compliance with the federal notice requirements raises a presumption of compliance with the terms of a separate contract. Further, because we hold that notice was adequate under the unambiguous language of the replacement document, it is not necessary for us to address the question whether a substitute contract was formed by the replacement document.

Because we conclude that as a matter of law notice was adequate under both the federal regulations and the contract between Wells Fargo and Denelsbeck, we hold that summary judgment for Wells Fargo is proper. Accordingly, we reverse the court of appeals and reinstate the district court’s grant of summary judgment.

Reversed.

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

DISSENT

PAGE, Justice,

dissenting.

I respectfully dissent. The contract between Denelsbeck and Wells Fargo, as evidenced by the replacement document, provides that “at least 15 days prior to a maturity date, the Bank [must] give[ ] written notice to the participant that this account will not be renewed at the earnings rate set forth in the Earnings Section and/or for any other term(s) set forth in this certificate.” The replacement document further provides that the rate of earnings on the account was 12.25%. Applying the plain and ordinary meaning to the contract language, as we must if we conclude as we have here that the contract is unambiguous, this language requires that Wells Fargo specifically inform De-nelsbeck that, upon renewal, her retirement certificate would not renew at 12.25%. Wells Fargo could have accomplished this task easily by including a statement with the Time Account Maturity Notice that “this account will not renew at the 12.25% interest rate” or that “this account will renew at the market rate currently in effect on the renewal date.” Instead, Wells Fargo sends a generic “stuffer” that states that the interest rate has not yet been determined and provides a telephone number to call to obtain the new rate.

The court contends that this generic staffer provided adequate notice to De-nelsbeck that her certificate was going to renew at an interest rate other than the 12.25% stated in the replacement document. I disagree. This staffer does not specifically tell Denelsbeck that her certificate is not going to renew at 12.25% as required by the contract language. Nor does the staffer even indicate that it relates to Denelsbeck’s retirement certificate. For that reason, I cannot conclude that this staffer adequately informed De-nelsbeck that her certificate would renew at the then-current market rate of return instead of 12.25%.

For the same reason, I also disagree with the court’s conclusion that the multi-paged pamphlets included with customer letters and bank statements sent to De-nelsbeck adequately informed her that the terms of her certificate had changed and that her certificate would renew at the then-current market rate of return. As with the staffer included in the Time Account Maturity Notice, these pamphlets are generic in nature and did not specifically inform Denelsbeck that her account would not renew at 12.25% as required by the replacement document.

Wells Fargo’s reliance on these generic stuffers and pamphlets to provide notice to Denelsbeck that her certificate would renew at the current market rate is made more objectionable by the contradictory messages Denelsbeck received from Wells Fargo and its predecessors. When she first took out her certificate in 1984, De-nelsbeck testified that she was told by Mary at the bank that the interest rate of 12.25% would be “permanent.” Then, shortly before Denelsbeek’s certificate came up for renewal in 1991, Denelsbeck received a call from a young man at the bank who told her that her certificate would not renew at 12.25%. However, six months later Norwest did renew her certificate at 12.25%, even though interest rates were between seven and nine and one-half percent at that time. Shortly before her certificate came up for renewal again in 1998, Denelsbeck testified that she called Norwest and was told by Lisa that her interest rate on renewal would not change as long as she did not remove her funds. However, upon renewal, Norwest renewed her certificate at the then-current market rate of 4.6%.

For the above stated reasons, I conclude that Wells Fargo did not provide adequate notice under the contract as evidenced by the replacement document that Denels-beck’s certificate would not renew at the 12.25%. Accordingly, I would affirm the court of appeals’ reversal of the district court’s grant of summary judgment and remand to the district court to determine whether the replacement document represented a substitute contract.

      . In addition to the two stuffers, Wells Fargo contends that it provided notice to Denels-beck that her certificate would renew in 1998 at the market rate of interest when it sent her (1) the 1991 form letter that provided that upon renewal her certificate would be subject to Norwest's terms and conditions and a pamphlet outlining those terms and conditions, and (2) the IRA Disclosure and Individual Retirement Plan pamphlet with her December 31, 1997 statement.

      . The terms of the originar certificate provided for an automatic renew'd! at the market rate of interést. If the replacement document was not a substitute contract and the ’original certificate terms apply,' Wells Fargo would not' be required to provide notice to Denels-beck that her certificate would renew at the market rate of interest currently in effect.

      . The holding of the court of appeals on the issue of notice is not clear. In the introductory paragraphs of the opinion, the court states "[b]ecause Denelsbeck raises genuine issues of material fact regarding whether a substitute contract was formed and whether Wells Fargo provided notice as required by the contract, we reverse the grant of summary judgment on this issue and remand." Denelsbeck, 2002 WL 31057013, at *1 (emphasis added). With this statement, the court could be stating, as Wells Fargo contends, that the issues of whether the notice provided to Denelsbeck was adequate and whether a substitute contract was formed are both questions of fact that preclude summary judgment. Another interpretation is that the court is stating that the question of whether notice was given to Denelsbeck, and not the adequacy of the notice, is a question of fact. This second interpretation is more consistent with the court of appeals' later comments where the court said:
      We are troubled as well by the question of adequacy of the notice required by the contract. If a jury finds that the First Minnesota notice functions as a substitute contract, the bank notice of impending maturity, containing only a non-specific reference to a method for determining market rates on the maturity date, may be inadequate under the language of the First Minnesota notice, which required a 15 day notice that the certificate will not be renewed at the earnings rate set forth on the face of the certificate.

        Id. at *2 (emphasis added). This later comment by the court indicates that the court did not reach the issue of adequacy of notice.

      . Denelsbeck does not contest that she received the various documents and stuffers discussed from Norwest and Wells Fargo.

      . The dissent contends that the “generic stuf-fers” sent to Denelsbeck were not specific enough under the terms of the contract to inform her that her certificate was going to renew at the then-current market rate of return, and not the 12.25% rate. The dissent then suggests examples of verbiage that Nor-west could have "easily” included in its notice statement which would have made it clear to Denelsbeck that her interest rate was going to change. While we acknowledge that Norwest could have done a better job of informing Denelsbeck that the interest rate on her certificate was going to change and that it is tempting to articulate how Norwest could have done so, articulating a better form of notice is not the issue before this court. Our job is to take the facts of the case and determine under the law whether adequate notice was given. While the dissent takes issue with the use of stuffers, we must look at the big picture as compared to the dissent's piece-meal approach. When we do so, it is clear that each of the stuffers sent to Denelsbeck consistently informed her that her certificate would automatically renew at the market rate in effect on the date of the renewal.