author: HALBROOKS, Judge.

text:
    DELACY INVESTMENTS, INC. d/b/a Commission Express, Appellant, v. Steven Ernest THURMAN, Defendant, Re/Max Real Estate Guide, Inc., Respondent.
    No. A04-1439.
    Court of Appeals of Minnesota.
    March 22, 2005.

      Benjamin R. Skjold, Hellmuth & Johnson, PLLC, Eden Prairie, MN, for appellant.
    Steven J. Lodge, Nash & Lodge, PLLP, Andover, MN, for respondent.

      Considered and decided by HALBROOKS, Presiding Judge, HUSPENI, Judge, and CRIPPEN, Judge.*

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

   OPINION

HALBROOKS, Judge.

Appellant challenges the district court’s grant of summary of judgment to respondent based on the district court’s conclusion that an assignee is not entitled to a greater right in a real-estate commission than an assignor. Appellant argues (1) that the district court erred in interpreting revised article 9 of the Uniform Commercial Code (UCC) as to the assignment of an account receivable and (2) that the UCC does not permit an account debtor to contract away the rights of an assignee after notice of assignment. Because we conclude that the district court did not err, we affirm.

FACTS

Appellant Delacy Investments, Inc., d/b/a Commission Express (CE), is in the business of factoring receivables from real-estate agents. In this business, a real-estate agent can assign or sell his future receivable or commission to CE in exchange for immediate funds. Respondent Re/Max Real Estate Guide, Inc. (Re/Max) is a real-estate brokerage company.

On November 11, 2001, defendant Steven Thurman, a licensed real-estate agent, entered into a master repurchase and security agreement (MRSA) with CE. The substance of the MRSA “grant[ed] to CE a security interest under the [UCC] in all of [Thurman’s] right, title and interest in and to [Thurman’s] current and future accounts receivable.... ” CE perfected its security interest by filing a UCC financing statement with the Minnesota Secretary of State.

On February 25, 2003, Thurman entered into a standard independent-contractor agreement with Re/Max. The agreement details the employment relationship between the two, whereby Thurman agreed to pay Re/Max certain overhead expenses. The agreement explains how Thurman will receive his “commission” from Re/Max and certain “nonpayment remedies.” In pertinent part, the agreement states:

[Thurman] shall be deemed entitled only to 100 percent of the amount by which commissions generated by [Thurman’s] efforts exceed past-due financial obligations imposed by the terms of Paragraphs 4 and 5 of the Agreement. That portion of commissions which does not exceed past-due financial obligations shall be deemed to belong to RE/MAX and shall be used by RE/MAX first to offset arrearages owed by [Thurman].

(Emphasis added.) Thus, in terms of the legal relationships that exist here, CE is an “assignee,” having accepted Thurman’s assignment of his commission by the MRSA. Thurman, in turn, is an “assignor,” having assigned his right of commission to CE. Re/Max is an “account debtor” by virtue of its independent-contractor agreement with Thurman, whereby Re/Max possesses the potential right to receipt of that which Thurman assigned to CE.

In April 2003, Re/Max executed an ac-knowledgement of CE’s security interest in Thurman’s account receivable from the sale of a home on Javelin Avenue and directed that Thurman’s commission from that sale be paid directly to CE. On April 22, 2003, CE and Thurman entered into an Account Receivable Sale and Assignment Agreement (assignment agreement), whereby CE agreed to purchase a $10,000 receivable related to Thurman’s sale of a property on Keller Lake Drive in Burns-ville (Keller Lake property).

On June 7, Re/Max terminated Thurman as a real-estate agent for poor performance, failure to deposit earnest-money payments in a timely manner, and customer complaints. Re/Max asserts that at the time of his termination, Thurman had accumulated $11,126.38 in overhead debts owed to Re/Max. As a result, Re/Max refused to pay the assigned receivable and “applied the commission to Thurman’s balance in accordance with [the independent-contractor agreement],” claiming a right of setoff based on the overhead expenses that Thurman owed. In Re/Max’s words, “because the commissions earned by Re/Max as a result of Thurman’s services did not exceed his past-due financial obligation to Re/Max, Thurman was entitled to no compensation at the Keller Lake closing, and so nothing was paid to CE pursuant to the assignment.”

In June 2003, CE sent Re/Max a demand for immediate payment of the Keller Lake account receivable and sent a notice of default to Thurman. Re/Max did not pay. CE then filed a complaint in district court. Re/Max answered and counterclaimed against Thurman. Both parties moved for summary judgment. The district court denied CE’s motion and granted Re/Max’s, finding that “[CE’s] ability to receive a commission from Re/Max is based upon Thurman’s assignment of a contractual right to receive a commission from Re/Max.” Therefore, the district court determined that “Thurman was not entitled to a commission at the time of the Keller Lake [p]roperty closing.” As a result, it was “impossible for [CE] to obtain a greater right in the commission than Thurman had in the commission.” This appeal follows.

ISSUE

Did the district court err by granting summary judgment to respondent based on its interpretation of article 9 of the Uniform Commercial Code as to assignment of an account receivable?

ANALYSIS

On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact, and (2) whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). Whether a district court has properly construed a statute is a question of law subject to de novo review. Lefto v. Hoggsbreath Enters., Inc., 581 N.W.2d 855, 856 (Minn.1998). When we interpret a statute, we look to see “whether the statute’s language, on its face, is clear or ambiguous. A statute is only ambiguous when the language therein is subject to more than one reasonable interpretation.” Am. Family Ins. Group v. Sckroedl, 616 N.W.2d 273, 277 (Minn.2000) (citation and quotation omitted). If the language in a statute is clear, we will rely on its plain meaning. Minn.Stat. § 645.16 (2004); Correll v. Distinctive Dental Sens., 607 N.W.2d 440, 445 (Minn.2000).

A. The District Court’s Application of Minn.Stat. § 336.9-404

In granting Re/Max’s motion for summary judgment, the district court determined that Thurman was not entitled to a commission at the time of the Keller Lake property closing. The court stated:

The [cjourt finds that [CE’s] ability to receive a commission from Re/Max is based upon Thurman’s assignment of a contractual right to receive a eommission from Re/Max. Under Minn.Stat. § 336.9-404, an assignee’s ' rights are subject to “(1) all terms of the agreement between the account debtor and the assignor ... [.] ” Minn.Stat. § 336.9-404 (2002). “A valid assignment generally operates to vest in the assignee the same right, title, or interest that the assignor had in the thing assigned.” III. Farmers Ins. Co. v. Glass Senice Co. [ ], 669 N.W.2d 420, 424 (MinmApp. 2003) (citation omitted), [rev’d on other grounds, 683 N.W.2d 792 (Minn.2004) ].
In the present action, Thurman was not entitled to collect a commission while his fees were in arrears. There is no question that at the time of the closing on the Keller Lake [pjroperty, Thurman was in arrears in his fees to Re/Max in the amount of approximately $11,126.38. The [cjourt, therefore, finds that Thurman was not entitled to a commission at the time of the Keller Lake [pjroperty closing and that it is impossible for [CE] to obtain a greater right in the commission than Thurman had in the commission.

In challenging summary judgment, CE first argues that the district court erred by applying common law to the dispute, thereby permitting Re/Max to set off its overhead expenses after receiving notice of the assigned account receivable. As a result, CE claims that Re/Max improperly failed to pay it Thurman’s commission for the sale of the Keller Lake property.

Reading the district court’s order in context, we conclude that the district court applied the UCC provision relating to the assignment of an account receivable, even though it also cited a common-law rule expressed in this court’s decision in III. Farmers Ins. Co. v. Glass Serv. Co., 669 N.W.2d 420, 424 (Minn.App.2003) (“[a] valid assignment generally operates to vest in the assignee the same right, title, or interest that the assignor had in the thing assigned”), rev’d on other grounds, 683 N.W.2d 792 (Minn.2004). That rule does not expressly conflict with Minn.Stat. § 336.9-404(a) (2004), the U.C.C. provision governing assignment in account receivables, which states:

(a) Assignee’s rights subject to terms, claims, and defenses; exceptions. Unless an account debtor has made an enforceable agreement not to assert defenses or claims, and subject to subsections (b) through (e), the rights of an assignee are subject to:
(1) all terms of the agreement between the account debtor and assignor and any defense or claim in recoupment arising from the transaction that gave rise to the contract; and
(2) any other defense or claim of the account debtor against the assignor which accrues before the account debtor receives a notification of the assignment authenticated by the assignor or assign-ee.

Id. (emphasis added). The official comment to the provision further explains its meaning:

Subsection (a) ... provides that an as-signee generally takes an assignment subject to defenses and claims of an account debtor. Under subsection (a)(1), if the account debtor’s defenses on an assigned claim arise from the transaction that gave rise to the contract with the assignor, it makes no difference whether the defense or claim accrues before or after the account debtor is notified of the assignment.

Minn.Stat. § 336.9^404 cmt. 2 (emphasis added); see also Restatement (Second) of Contracts § 336, cmt. b (1981) (explaining that an assignor can assign “only what he has” and “is subject to limitations imposed by the terms of that contract [creating the right] and to defenses which would have been available against the [account debtor] had there been no assignment”). The particular issue presented here is one of first impression in Minnesota.

Under Minn.Stat. § 336.9-404(a)(1) (2004), because the rights of CE are subject to all terms of the agreement between Re/Max and Thurman — namely, the independent-contractor agreement giving CE a right to all of Thurman’s commissions which exceed past-due financial obligations to Re/Max — we conclude that CE cannot collect from Re/Max because the commissions earned by Re/Max as a result of Thurman’s sales do not exceed his past-due financial obligations to Re/Max. As we recently explained, “[i]t is black-letter law that an assignee of a claim take no other or greater rights than the original assignor and cannot be in a better position than the assignor.” III. Farmers Ins. Co., 669 N.W.2d at 424. This most basic principle of commercial law is reflected in the Latin phrase nemo dot qui non habet — or, “no one may transfer more than he owns.” Commerce Bank, N.A. v. Chrysler Realty Corp., 244 F.3d 777, 780 (10th Cir.2001).

Our decision is further supported by a number of courts across the country interpreting former § 9-318(1) and revised § 9-404 of the UCC. See Minn.Stat. § 645.22 (2004) (“Laws uniform with those of other states shall be interpreted and construed to effect their general purpose to make uniform the laws of those states which enact them.”). As the Texas Court of Appeals has explained, “when [an] as-signee brings suit against the [account-debtor] ... to enforce rights conferred by the contract, the courts will almost universally agree that the [account-debtor] may assert any defense that might have been asserted against the assignor, being one of the original contract parties.” Irrigation Assoc, v. First Nat’l Bank of Frisco, 773 S.W.2d 346, 348 (Tex.App.1989) (emphasis added). The Sixth Circuit has more recently interpreted the same UCC provision to “clearly limit[ ] the rights of ... the assignee, to those of the assignor ... and make[ ] its right to accounts receivable subject to the provisions of [the account debtor’s] contract with [the assignor].” Nat’l. City Bank, Northwest v. Columbian Mut. Life Ins. Co., 282 F.3d 407, 410 (6th Cir.2002) (emphasis added). In that case, the court concluded that “[t]here is no authority for the proposition that a perfected assignment to a third person takes precedence over a right of recoupment created between the original contracting parties in their contract.” Id.

In Systran Fin. Servs. Corp. v. Giant Cement Holding, Inc., 252 F.Supp.2d 500 (N.D.Ohio 2003), an assignee first entered into a factoring agreement with an assign- or who sold and assigned its accounts receivable to an assignee in exchange for its financing of assignor’s operations. Id. at 502. Thereafter, assignor signed a transportation-services agreement with an account debtor which included an arbitration clause. Id. Assignee argued that it was not bound by this agreement to arbitrate and that it did not receive an assignment of an arbitration clause in a separate contract between the assignor and the account debtor. Id. at 503. According to assign-ee, under its factoring agreement with the assignor, it only received the right to payment of assignor’s accounts. Id. Interpreting UCC § 9-404, the federal court explained that “courts have held that the assignee ‘stands in the shoes of the assign- or’ and is ‘subject to contract defenses or claims of the account debtor arising by virtue of the terms of the contract out of which the receivable was created.’ ” Id. at 505 (quoting Oxford Commercial Funding, LLC v. Cargill, Inc., 2002 WL 31455989, at *3 (N.D.Ill.2002)). The court then concluded that the account debtor may properly assert that the arbitration clause (found in its contract with the assignor) as a defense against the assignee because arbitration was a “term[ ] of the agreement between the account debtor and assignor.” Id. at 506 (alteration in original) (quoting Ohio Rev.Code § 1309.404).

Responding to the concerns raised by the assignee in Systran Fin. Sews. Corp., the court concluded that “[i]f [the assign-ee] did not want to arbitrate disputes over collections from account debtors, it could have contracted with [the assignor] to prevent it from entering into any agreement that contained arbitration clauses. Because it did not do so, it is bound by the arbitration clause.” 252 F.Supp.2d at 506. Similarly, here, if CE did not want to be bound by the independent-contractor agreement between Re/Max and Thurman, it could have contracted otherwise. But it did not, and CE is thereby bound by the independent-contractor agreement between Re/Max and Thurman. As the as-signee, CE cannot assume greater rights than Thurman, the assignor.

B. Subsection (a)(2)

But CE also argues that Minn.Stat. § 336.9-404(a)(2) (2004) does not permit an account debtor to contract away the rights of an assignee after having received notice of a previously-executed assignment. According to CE, subsection (a)(2) limits which setoffs an account debtor may assert against a payment to an assignee after notice of the assignment. CE contends that Re/Max had notice of the assignment on three separate occasions: (1) statutory notice by CE’s filing of the financing statement with the Secretary of State on November 14, 2001, after Thurman’s execution of the MRSA; (2) actual notice that CE was entitled to all of the Thurman receivables when a notice of default regarding the Javelin Avenue property was delivered by certified mail on March 12, 2003; and (3) actual notice from the assignment of the Keller Lake receivable on April 22, 2003. CE argues that Thurman signed the MRSA with CE, giving CE a right to his commission, before Thurman signed the independent-contractor agreement with Re/Max.

The UCC defines “notice” as:
(d) A person “notifies” or “gives” a notice or notification to another person by taking such steps as may be reasonably required to inform the other person in ordinary course, whether or not the other person actually comes to know of it.
(e) ... [A] person “receives” a notice or notification when:
(1) it comes to that person’s attention; or
(2) it is duly delivered in a form reasonable under the circumstances at the place of business through which the contract was made or at another location held out by that person as the place for receipt of such communications.

Minn.Stat. § 336.1-202(d)-(e) (2004). It therefore appears that Re/Max had notice of the assignment between Thurman and CE before its independent-contractor agreement with Thurman.

A perfected security interest is generally effective against creditors “[except as otherwise provided in the Uniform Commercial Code.” Minn.Stat. § 336.9-201(a) (2004) (emphasis added). Minn. Stat. § 336.9-404(a)(l) provides otherwise. See Nat'l. City Bank, Northwest, 282 F.3d at 409-10 (explaining that the subsection clearly limits the rights of the assignee to those of the assignor). As one commentator explains, “[i]t makes no difference whether the defense or claim accrues before or after the account debtor is notified of the assignment if the account debtor’s defenses on an assigned claim arise from the transaction that gave rise to the contract with the assignor.” 20 Brent A. Olson, Minnesota Practice § 10.7.04 (2004). Minn.Stat. § 336.9-404(a)(2) does not govern the dispute here.

The plain language of MinmStat. § 336.9-404(a)(l) makes clear that the rights of CE (as an assignee) “are subject to ... all terms of the agreement between the account debtor and assignor.” Id. Here, the independent-contractor agreement between Re/Max and Thurman limited payment to Thurman to those commissions that exceeded his past-due financial obligations to Re/Max. Because CE can take no greater rights nor be in a better position than Thurman by recovering a commission when Thurman, himself, was not entitled to the commission, the district court did not err by granting summary judgment to Re/Max.

DECISION

Because the plain language of Minn.Stat. § 336.9 — 404(a)(1) (2004) mandates that the rights of an assignee “are subject to ... all terms of [an] agreement between the account debtor and assignor,” we affirm the district court’s grant of summary judgment in favor of respondent.

Affirmed.

      . In its summary-judgment motion, Re/Max questioned the authenticity of this acknowledgment and denied that its representative actually signed the document. Regardless, this does not have a bearing on our decision today.

      . Pursuant to the assignment agreement, CE immediately paid $8,000 to Thurman and promised to pay him an additional $1,000 upon the receipt of the assigned receivable, in exchange for Thurman's assignment of a $10,000 receivable to be paid at the closing on the Keller Lake property.

      . Thurman is not a party to this appeal. A default judgment was entered against him following his failure to plead.

      . There is some dispute as to whether Re/Max properly moved for summary judgment. In its reply brief, CE claims that Re/Max's motion for summary judgment "was contained in its responsive pleading to CE's motion for summary judgment ... [and] created an unjust result because the denial of one [party's] motion for summary judgment is not the basis for granting another party’s motion.” But issues not raised or argued in an appellant’s brief are waived and cannot be revived in a reply brief. McIntire v. State, 458 N.W.2d 714, 717 n. 2 (Minn.App.1990), review denied (Minn. Sept. 28, 1990); see also Minn. R. Civ.App. P. 128.02, subd. 3 ("The reply brief must be confined to new matter raised in the brief of the respondent.”). While CE mentioned in its statement of the case that Re/Max "never formally made a motion for summary judgment or provided the appropriate papers” it did not argue the issue, and we decline to address it here.

      . The district court mistakenly entered "final judgment” on January 20 because claims against Thurman were still pending at that time. CE was therefore forced to appeal to this court, whose order opinion dismissing CE’s appeal did not preclude a proper appeal from a final judgment. Delacy Invs., Inc. v. Thurman, No. A04-451 (Minn.App. Apr. 13, 2004). On July 15, 2004, the district court entered final judgment disposing of all claims. This court accepted jurisdiction and allowed the appeal to proceed "[u]nder the unusual circumstances of this case.” Delacy Invs., Inc. v. Thurman, No. A04-1439 (Minn.App. Sept.28, 2004) (order op.).

      . Both parties cite to Nat'l Trade Trust, Inc. v. Merrimac Constr., 524 N.W.2d 14 (Minn.App.1994). In that case, we held that "[a]n account debtor that erroneously pays the assign- or after receiving notice of assignment waives any claim to a setoff against the assignor raised for the first time after the assigned debt was paid.” Id. at 17 (emphasis in original). Because that case was decided on narrow grounds factually distinguishable from the issue presented here, its application is of little value.

      . The case distinguishes between a right of "recoupment” and "setoff.” "[A] right of 're-coupment' arises from the same transaction or contract that creates an asset whereas 'set-off' is a broader term referring to any claim or demand, however created, that the holder of the asset has against the debtor.” Nat’l. City Bank, Northwest, 282 F.3d at 409 (citing Black’s Law Dictionary 1439-40 (4th ed.1968)).


source: Caselaw Access Project

author: HUDSON, Judge.

license: Public Domain

text:
    In re Judith A. CHOSA, o/b/o Roseblossom CHOSA, petitioner, Respondent, v. Diane TAGLIENTE, Appellant.
    No. A04-1400.
    Court of Appeals of Minnesota.
    March 22, 2005.

      Judith A. Chosa, Ely, MN, pro se respondent.
    William E. Maxwell, Legal Aid Service of NE Minnesota, Virginia, MN, for appellant.
    Considered and decided by TOUSSAINT, Chief Judge; HUDSON, Judge; and PORITSKY, Judge.

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

   OPINION

HUDSON, Judge.

Appellant Diane Tagliente challenges the trial court’s issuance of an order for protection, arguing that the evidence is insufficient to support the order. Because there is insufficient evidence to support the order for protection, we reverse.

FACTS

On February 6, 2004, respondent Judith Chosa petitioned for an order for protection (OFP) from domestic abuse on behalf of her granddaughter, R.C., against R.C.’s mother, appellant Diane Tagliente. R.C. was approximately 19 months old when respondent petitioned for the OFP. Respondent alleged two incidents of domestic abuse in her affidavit: (1) on January 27, 2004, she observed appellant hit Sunrise Chosa, R.C.’s father and respondent’s son, in front of R.C.; and (2) in July 2003, appellant was drunk and passed out in the middle of the road while R.C. was next to her in a baby carriage. Respondent requested custody of R.C. The trial court granted an ex parte temporary order for protection.

At the hearing on the OFP, respondent testified that on January 27, 2004, she observed appellant approach Sunrise from behind and knock him a “foot up in the air, half into the couch, the plants and the wall.” Respondent testified that R.C. was standing there ‘screaming, and that appellant did not pay attention to where R.C. was standing. Appellant admitted that she pushed Sunrise on January 27 after she “lost it” during an argument. Appellant admitted that R.C. was present when she pushed Sunrise.

Regarding the second allegation, appellant admitted that she drank alcohol on the day in question in July 2003, but stated, “most of the time [she] just had a buzz [from the alcohol].” Appellant denied that the baby carriage was in the middle of the road and that she was passed out, but admits she lay on her back briefly.

Respondent made additional allegations at the hearing that were not in her OFP petition. Respondent testified that when R.C. was one month old, appellant, R.C., respondent, and two friends went to a store. Appellant set R.C. in her carrier on the floor in a checkout aisle, unattended. Though R.C. was approximately ten feet from respondent, respondent’s back was turned and she was unaware that appellant had set R.C. in the aisle. Constance Jones, the manager of the store, was “surprise[d]” to see appellant place R.C. on the floor of the checkout aisle and watched “to make sure the baby wasn’t hurt.”

Respondent also testified that sometime after July 2003, she heard R.C. screaming and went to the bathroom where she observed appellant cleaning R.C.’s bottom by running water from the faucet full blast on R.C.’s genitals, while her legs were spread. Respondent testified that appellant was oblivious to the fact that R.C. was “being hurt” and screaming. Appellant admitted that she cleaned R.C.’s bottom by putting it under running water, but says she stopped this practice after respondent confronted her.

Sunrise testified that appellant left R.C. alone in July 2003 while he was doing laundry in another room. He found R.C. screaming, after he had been gone for about an hour. Sunrise testified that R.C.’s diaper looked like it had not been changed in hours. Appellant admitted leaving R.C. alone and not telling Sunrise that she was leaving to return some videos to the library because she thought Sunrise was coming back to where she left R.C.

Both Sunrise and respondent alleged that appellant breastfed R.C. while using alcohol and marijuana. Appellant denied using illegal drugs and/or alcohol while breastfeeding R.C. Appellant testified, “I wasn’t doing any kind of drugs or alcohol when I was nursing her. The only time I did was socially when [respondent] had her, but then I pumped it out when I, before (sic).”

Appellant admitted that R.C. does not receive regular medical care.

On June 2, 2004, the trial court granted R.C. an OFP from appellant for one year. The trial court also awarded respondent sole temporary physical and shared legal custody of R.C., subject to appellant’s parenting time. This appeal follows.

ISSUE

Does the evidence support the trial court’s issuance of a protective order pursuant to MinmStat. § 518B.01 (2004)?

ANALYSIS

The decision to grant an order for protection (OFP) under the Domestic Abuse Act, Minn.Stat. ch. 518B (2004), is within the district court’s discretion. Mechtel v. Mechtel, 528 N.W.2d 916, 920 (Minn.App.1995). District courts are authorized to issue an OFP to “restrain the abusing party from committing acts of domestic abuse.” Minn.Stat. § 518B.01, subd. 6(a)(1) (2004). Domestic abuse includes: (1) physical harm, bodily injury, or assault; or (2) the infliction of fear of imminent physical harm, bodily injury, or assault by one family or household member against another. Id., subd. 2(a)(l)-(2) (2004). In order to establish domestic abuse, a party must show “present harm or an intention on the part of the [alleged abuser] to do present harm.” Andrasko v. Andmsko, 443 N.W.2d 228, 230 (Minn.App. 1989).

A district court’s findings of fact will not be set aside unless they are clearly erroneous. Minn. R. Civ. P. 52.01. This court does not reconcile conflicting evidence; rather, we give great deference to the district court’s factual findings. Id.; see also Porch v. Gen. Motors Acceptance Corp., 642 N.W.2d 473, 477 (Minn.App. 2002), review denied (Minn. June 26, 2002). When reviewing the record, this court looks at the evidence “in the light most favorable to the court’s findings.” Lossing v. Lossing, 403 N.W.2d 688, 690 (Minn.App.1987). A trial court’s finding of fact will be reversed only if, upon review of the entire evidence, a reviewing court is left with the definite and firm conviction that a mistake has been made. Gjovik v. Strope, 401 N.W.2d 664, 667 (Minn.1987).

The trial court found that appellant had committed acts of domestic abuse against R.C., including “[inappropriate hygiene and medical care of the child, leaving the child unattended, active chemical dependency while earing for the child, and overall pattern of behavior endangering the physical well being of the child.”

Appellant argues that the evidence is insufficient to find that appellant physically harmed or inflicted a fear of imminent physical harm on R.C. Appellant also argues that the trial court erred as a matter of law because its findings do not support its conclusion that there was domestic abuse.

Here, the events described in respondent’s petition and at the hearing do not constitute domestic abuse. Because the court did not make a finding of domestic abuse based on appellant’s hitting Sunrise in front of R.C. on January 27, 2004, the only specific allegations of domestic abuse that support the trial court’s findings were incidents that occurred in July 2002 and July 2003. Past abusive behavior is a factor in determining cause for protection, though not dispositive. Boniek v. Boniek, 443 N.W.2d 196, 198 (Minn.App. 1989). But the district court cannot infer that when: (a) appellant left R.C. in the checkout aisle; (b) washed R.C.’s bottom with a stream of water; (c) left R.C. in the house without notifying Sunrise that she was leaving; (d) failed to ensure that R.C. has regular medical checkups; (e) breastfed R.C. after drinking alcohol or using marijuana; and (f) left R.C. unsupervised in her baby carriage while appellant was drunk; that appellant had a present intent to inflict fear of imminent bodily harm.

Moreover, there is no evidence of actual physical harm, bodily injury, or assault arising out of any of these incidents. Arguably, the only allegation that could have constituted physical harm or bodily injury was appellant’s act of washing R.C.’s bottom under a full stream of water. But absent an allegation that the water was hot, we conclude that appellant’s cleaning R.C.’s bottom in this manner was not domestic abuse. Because respondent did not produce evidence of any physical harm nor allege any intent to do present harm, the trial court erred in finding that domestic abuse occurred.

Furthermore, the findings themselves— even if supported by the evidence — do not support the conclusion that there was domestic abuse. See Donovan v. Dixon, 261 Minn. 455, 460,113 N.W.2d 432, 435 (1962) (stating that the reviewing court determines whether the findings support the conclusions of law and judgment). The district court’s findings — inappropriate hygiene and inadequate medical care of the child, leaving the child unattended, active chemical dependency while caring for the child, and an “overall pattern of behavior endangering the physical well being of the child” — may well evidence neglect, but they do not constitute domestic abuse.

Therefore, on this record, the trial court’s finding of domestic abuse is clearly erroneous.

DECISION

The trial court erred by issuing a protection order pursuant to Minn.Stat. § 518B.01 (2004) where the evidence was insufficient to warrant issuance of the order.

Reversed.


author: KAPSNER, Justice.

text:
    2005 ND 56
    Steve JACOB and Donald Huck, Plaintiffs and Appellants, v. NODAK MUTUAL INSURANCE COMPANY, Jon Livers, CEO, Keith Kinzler, President of the Board, and All Other Members of the Board, Individually, and as CEO and Members of the Board of Directors for Nodak Mutual Insurance Company, Defendants and Appellees, and Farm Bureau Life Insurance Company, Defendant.
    No. 20040197.
    Supreme Court of North Dakota.
    March 8, 2005.

      Deborah J. Carpenter, Carpenter Law Offices, Bismarck, N.D., for plaintiffs and appellants.
    Sarah Andrews Herman (argued) and Lynn Block (appeared), Dorsey & Whitney, Fargo, N.D., for defendants and ap-pellees Nodak Mutual Insurance Company, Keith Kinzler, and Members of the Board of Directors.
    Rebecca S. Thiem (argued) and Aaron K. Webb (on brief), Zuger Kirmis & Smith, Bismarck, N.D., for defendant and appel-lee Jon Livers.
   KAPSNER, Justice.

[¶ 1] Steve Jacob and Donald Huck appeal from a judgment dismissing their claims against Nodak Mutual Insurance Company (“Nodak”), Jon Livers, CEO, Keith Kinzler, President of the Board, and all other members of the Board, individually, and as CEO and members of the Board of Directors for Nodak Mutual Insurance Company and Farm Bureau Life Insurance Company, and from an order denying their motions for reconsideration or relief from the judgment. We affirm.

I

[¶ 2] Jacob and Huck were employed by Nodak as two of six regional sales and training managers. On March 7, 2002, Nodak’s Board of Directors adopted a motion to “accept the retirement offer of Jon M. Livers as Executive Vice President & CEO.” On March 11, 2002, Nodak’s Board of Directors adopted three motions: (1) to reconsider its acceptance of Livers’ retirement; (2) to “amend the Main Motion to reject an offer of retirement from ... Livers;” and (3) to “instruct President Kin-zler to take an active role in the management of the Company for the purpose of advising the Board of Directors” and to “begin an investigation and advise the Board.”

[¶ 3] On March 15, 2002, Kinzler issued memoranda to Jacob and Huck, stating, in part:

Please be advised that effective immediately you are placed on a paid leave of absence pending an investigation by appropriate Company officials into your actions as Regional Sales & Training Manager. This investigation will be undertaken immediately to determine whether you have engaged in a course of conduct that is not in the Company’s best interest. In addition, this investigation will aid in determining whether you have violated any provisions of the employee handbook, your job description, or other Company guidelines and rules.
Upon receipt of this memo, you are not permitted to enter upon Company property, including your office....
You will be advised as to your status in the near future and are instructed not to contact any Company Director, employee, officer, or agent pending further notification. Violation of the instructions in this memo will result in your immediate dismissal.

[¶ 4] In a letter of April 3, 2002, the attorney for Huck and Jacob advised the North Dakota Insurance Commissioner that “our firm has been retained by Donald Huck and Steve Jacob to represent them concerning the potential litigation arising from an ‘investigation’ being conducted by Nodak Mutual.” The letter requested the Insurance Commissioner to advise the attorney “when it will be convenient for you to have me inspect and copy the records and documents pertaining to: 1) Your meetings with the Board, its legal counsel, or senior management since January 1, 2002; ... 2) Corporate records on file with your department,” and advised that “[w]hen we have this information, we will be in a better position to assess pursuit of our claims and complaints under the North Dakota Uniform Fair Trade Practices Act as embodied in N.D.C.C. 26.1-04.”

[¶ 5] On April 24, 2002, Nodak’s Board of Directors resolved to terminate its six regional sales and training managers and its vice president of sales and training immediately. By letter of May 3, 2002, Nodak’s attorney advised the attorney for Huck and Jacob, in part:

The information obtained through the investigation was presented to the Board of Directors. The investigation revealed a number of reasons for concern regarding the company structure, particularly as it pertains to the management of our Career Producers. We believe that the current structure, including six managers over the Career Producers, has created significant inefficiencies, potential for miscommunication, and has created serious misunderstanding between the board, agents, and management. It has been an impediment to company initiatives regarding systems and risk management improvements, cooperation, and team work between our field and home office production and underwriting staff. It has improperly focused management energies on new sales rather than providing leadership which focused on optimizing profitability, persistency of renewals, and appropriate risk management in the current market. The Board of Directors has instructed Company management to restructure the Sales and Training Department to better meet the Company’s current needs and goals.
As you likely know, all of Nodak’s RSTMs [regional sales and training managers] became employed approximately two years ago. All are at will employees subject to the employment policies of Nodak Mutual. The Board has determined that the management structure involving six RSTMs is not appropriate. All of the current RSTMs will be terminated effective immediately. They will be continued for purposes of pay and benefits through May 15, 2002.... Although there is no notice or severance requirement under the policies of Nodak Mutual, your clients will specifically be offered the opportunity to receive a severance package equivalent to three months at their current compensation level. The severance package will be contingent upon their agreeing to sign a Confidential Release and Settlement Agreement with the Company.

[¶ 6] In a letter of June 19, 2002, the attorney for Huck and Jacob advised the North Dakota Insurance Commissioner: (1) “[t]his letter is to formally open the complaint process against Nodak Mutual for various and several violations of state law, policy, and court rulings;” (2) her clients’ “firing and those of their fellow regional managers and state sales director were retaliation by the company for having raised the issue of their claims to your department, and also as an egregious power play in violation of the law;” and (3) of her view of the meaning and applicability of several subsections of N.D.C.C. § 26.1-04-03. The letter asserted “Nodak breached the policy of good faith and fair dealing ... committed the tort of ‘outrage’ ... discriminated against older workers,” and “retaliated against my clients for whistle-blowing to your department of the underhanded actions that were going on.” The letter concluded by thanking the Insurance Commissioner “for any help you can provide in the formal filing of this complaint.”

[¶ 7] Huck and Jacob sued, alleging six claims for relief, including the following age discrimination and retaliatory discharge assertions: “Plaintiffs were employees as defined by law in North Dakota Century Code Section 14-02.4-02 (North Dakota Human Rights Act), and both were over the age of 40 at the time of the adverse employer action” and the defendants’ “actions in terminating Plaintiffs[’] employment constitute a ‘discriminatory practice’ as defined in North Dakota Century Code Section 14-02.4-03, not only on the basis of age, but as retaliation for the Plaintiffs having engaged in protected activity.”

[¶ 8] In a memorandum opinion ruling on the defendants’ motions for summary judgment, the trial court said, among other things:

While six of the seven employees eliminated in the restructuring were over the age of 40, the other indicia to indicate age discrimination does not exist in the record. The plaintiffs have also put forth the argument that their challenge to the defendants’ decision to terminate them reflected in communication with the North Dakota Insurance Commissioner was also a basis for retaliation by the defendant company. This assertion is, likewise, unsupported by the eviden-tiary record which has been compiled ....
The alleged discriminatory and retaliatory actions alleged on the part of the company and its Board are not supported by the record....
The Court concludes that the record does not contain sufficient facts to withstand the summary judgment motion. The defendant insurance company, through its Board, had the authority to restructure and to eliminate positions if it determined doing so was in its best interests. The evidence does not lead to a conclusion that i[t] conjured up a basis for termination of the plaintiffs and other employees in their classification because the positions were somehow protected contractually or otherwise. The record falls short of establishing a discriminatory purpose of any kind in the terminations, in spite of the “hard feelings” which may have existed between the various personalities involved.

The trial court also said, in part: “The record is desolate with regard to the contention that the Board was acting ‘at the behest of Livers’ in its decision to eliminate the plaintiffs’ positions, or that Livers was somehow directly involved in bringing about the restructuring.” Finally, the court said, in part, that “the plaintiffs have failed to marshal sufficient evidence to raise genuine issues of material facts, or in other cases have sought relief under legal theories which are simply inapplicable to the record, which should be dismissed as a matter of law.” The court ordered dismissal of the age discrimination and retaliation claims:

Sufficient indication of age discrimination does not exist in the record. Retaliation based on communications with the North Dakota Insurance Commissioner is, likewise, unsupported by the eviden-tiary records. Therefore, Plaintiffs’ age discrimination claim and retaliation claims based on protected activity against Nodak Mutual are DISMISSED with prejudice.

The court also dismissed all the other claims made by Huck and Jacob. The judgment entered on April 7, 2004, dismissed all of the claims brought by Huck and Jacob and awarded Nodak costs and disbursements of $4,433.79.

[¶ 9] Huck and Jacob appealed, contending summary judgment was inappropriate, the trial court erred in denying pretrial motions and in dismissing their defamation claim, and the court erred in denying their postjudgment motions for relief from the judgment.

II

[¶ 10] We deem it necessary to address only the arguments about the age discrimination and retaliatory discharge claims.

[¶ 11] We recently reiterated our standard of review on appeal from a summary judgment:

Summary judgment is a “procedural device for the prompt and expeditious disposition of a controversy without a trial if either party is entitled to judgment as a matter of law, and if no dispute exists as to either the material facts or the inferences to be drawn from undisputed facts, or if resolving disputed facts would not alter the result.” If the issues in the case are such that resolution of any factual dispute will not alter the result, .then summary judgment is appropriate under the law. We review appeals from summary judgment de novo.
(Internal citations omitted). The party seeking summary judgment has the burden of showing no genuine issue of material fact exists, and the party opposing the motion must present competent admissible evidence, not present in the pleadings, which raises an issue of material fact. Black v. Abex Corp., 1999 ND 236, ¶ 23, 603 N.W.2d 182. “Summary judgment is appropriate against a party who fails to establish the existence of a factual dispute on an essential element of her claim and on which she will bear the burden of proof at trial.” Id.

Tibert v. Slominski, 2005 ND 34, ¶ 8, 692 N.W.2d 133.

A

[¶ 12] Under N.D.C.C. § 14-02.4-03, “[i]t is a discriminatory practice for an employer ... to discharge an employee ... because of ... age.” Section 14-02.4-02, N.D.C.C., defines “age” as meaning “at least forty years of age.”

[¶ 13] When considering claims under the North Dakota Human Rights Act, we may look to federal interpretations of corresponding federal statutes for guidance. Koehler v. County of Grand Forks, 2003 ND 44, ¶ 12, 658 N.W.2d 741. “The ADEA is not a vehicle for reviewing the propriety of business decisions.” Faulkner v. Super Valu Stores, Inc., 3 F.3d 1419, 1426 (10th Cir.1993). “The burden of establishing a prima facie case of disparate treatment is not onerous.” Texas Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981). To establish a prima facie case of discrimination under the North Dakota Human Rights Act, a plaintiff must prove: (1) membership in a protected class under the Act; (2) satisfactory performance of the duties of the position; (3) an adverse employment decision; and (4) others not in the protected class were treated more favorably. Koehler, at ¶ 13. If a plaintiff establishes a prima facie case of discrimination, “the burden of persuasion shifts to the employer to rebut the presumption of discrimination by proving by a preponderance of the evidence that its action was motivated by one or more legitimate, nondiscriminatory reasons.” Schweigert v. Provident Life Ins. Co., 503 N.W.2d 225, 229 (N.D.1993). A plaintiff must prove the discharge was unlawful discrimination and “may, but does not necessarily, prevail on the basis of thé prima facie case combined with a finding of the incredibility of the defendant employer’s proffered explanation for its employment decision.” Schuh-macher v. North Dakota Hosp. Ass’n, 528 N.W.2d 374, 379 (N.D.1995).

[¶ 14] “The North Dakota Human Rights Act does not prohibit discharging employees who are over forty years old. It prohibits discharging employees over age forty because of their age.” Schuhmacher, 528 N.W.2d at 381. In Hillesland v. Federal Land Bank Ass’n, 407 N.W.2d 206, 215 (N.D.1987), Hillesland contended “his termination violated the provisions of the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-634, and Chapter 14-02.4, N.D.C.C. The trial court concluded that Hillesland failed to raise a genuine issue of material fact on the age discrimination issue.” This Court agreed with the following reasoning of the trial court:

Plaintiffs fifth claim is for age discrimination. Defendants’ Motion for Summary Judgment should be granted because plaintiff has been unable to demonstrate the capability of presenting a prima facie case that his discharge was based in whole or in part on his age and because, even were he able to do so, plaintiff has been unable to make the requisite showing of any concrete, specific evidentiary basis sufficient to create a material issue of fact that the legitimate business explanation of his discharge substantiated by defendants is pretextual. Plaintiff offers no proof of any age-conscientious statements, writings, policies or discriminatory actions by defendants to or about or with reference to himself or anyone else. He offers no statistical evidence from which any inference of age discrimination might be drawn. He points to no pattern of adverse treatment of older similarly situated employees.... His assertion of a prima facie case rests solely on the notion that he was replaced by a younger man.... Plaintiff simply has failed to offer any evidentiary showing which would support a jury finding of age discrimination, especially in the face of defendants’ plainly articulated legitimate business explanation that plaintiff was discharged because of his involvement with the Westby Transaction.

Id. Thus, we have held that age alone, without other evidence, is insufficient to survive a motion for summary judgment in an age discrimination case. See also Bia-las v. Greyhound Lines, Inc., 59 F.3d 759, 763 (8th Cir.1995) (in a reduction in an employer’s work force, assumption of the plaintiffs duties by a younger person is not in itself enough to establish a prima facie case); Haas v. Montgomery Ward & Co., 812 F.2d 1015, 1016 (6th Cir.1987) (a discharged employee’s replacement by a younger worker is not sufficient to prove the discharge was on the basis of age).

[¶ 15] Huck testified in a deposition:

Q. And do you believe that you were terminated because of your age?
A. Do I feel that? Yes. As well as salary.
Q. And do you have any proof to support that claim?
A. Not at present, no.
Q. Did anyone tell you that you were being terminated because of your age?
A. No.
Q. Have you ever seen any documentation to suggest that you were terminated because of your age?
A. No.
Q. And you have not identified any documents which would support that claim?
A. No.
Q. Are you aware of any documents which would support that claim?
A. No.
Q. Have you been given any information orally by anyone which supports that claim?
A. What was that?
Q. Have you been given any information orally by any person which supports that claim?
A. No.

Jacob testified in a deposition:

Q. Do you believe that you were terminated because you’re 42 years old?
A. I don’t believe that’s the number one reason, but I think, you know, it just gave them — well, in looking for reasons, I wouldn’t say it’s the number one reason, but it happens today in society. It happens. And according to my attorney, I have a right to just put it in.
Q. Did anyone tell you that you were being terminated because of your age?
A. No, and I don’t know why they would do that in this day and age.
Q. Do you have any evidence to support that claim?
A. No, I don’t.

[¶ 16] Thus, Huck and Jacob acknowledged they- had no proof, other than age alone, of age discrimination. We conclude the information available to the trial court precluded the existence of a genuine issue of material fact about Huck’s and Jacob’s claims that they were terminated because of age and entitled the defendants to summary judgment on that claim as a matter of law.

B

[¶ 17] Huck and Jacob have claimed they were terminated in retaliation for reporting violations of law to the North Dakota Insurance Commissioner.

[¶ 18] Sections 14-02.4-01 and 14-02.4-03, N.D.C.C., declare a policy against discrimination and prohibit discharging an employee for “participation in lawful activity off the employer’s premises during nonworking hours which is not in direct conflict with the essential business-related interests of the employer.” Section 14-02.4-18, N.D.C.C., provides, in part, that it is a discriminatory practice to conceal, help, cause or facilitate discrimination or reprisal “against a person by reason of ... participation in lawful activity off the employer’s premises during nonworking hours.” Section 34-01-20(1), N.D.C.C., provides in part: “An employer may not discharge ... an employee ... because ... [t]he employee, or a person acting on behalf of an employee, in good faith, reports a violation or suspected violation of federal, state, or local law, ordinance, regulation, or rule to an employer, a governmental body, or a law enforcement official.”

[¶ 19] “To establish a prima facie case for retaliatory discharge under N.D.C.C. § 34-01-20(1),” a plaintiff must show he or she “engaged in protected activity and that activity was causally related” to his or her termination. Dahlberg v. Lutheran Soc. Servs. of North Dakota, 2001 ND 73, ¶ 35, 625 N.W.2d 241. Section 34-01-20, N.D.C.C., prohibits an employer from discharging an employee for reporting illegalities. Dahlberg, at ¶ 38. Section 34-01-20, N.D.C.C., requires “a ‘report’ to be made for the purpose of blowing the whistle to expose an illegality, and the reporter’s purpose must be assessed at the time the report is made.” Id. In Jose v. Norwest Bank N.D., NA, 1999 ND 175, ¶ 18, 599 N.W.2d 293, we said N.D.C.C. § 14-02.4-03 does not present “a clear public policy against retaliatory discharge for participating in an internal investigation of other employees’ job performances.” The plaintiffs in Jose “invite[d] us to create a public policy exception forbidding retaliatory discharge for participating in internal employee investigations.” Jose, at ¶ 21. “We deeline[d] to do so.” Id. Because the plaintiffs in Jose “have defined no clear public policy which their removal violates, see N.D.C.C. 34-01-20, we conclude the trial court did not err in rejecting their wrongful termination claim.” Id.

[¶ 20] For their retaliatory discharge claims based on the protected activity of reporting illegalities to the North Dakota Insurance Commissioner, Huck and Jacob rely on two letters their attorney sent to the Insurance Commissioner on April 3 and June 19, 2002. By letter of May 3, 2002, Nodak’s attorney advised the attorney for Huck and Jacob that they “will be terminated effective immediately” but “will be continued for purposes of pay and benefits through May 15, 2002.” Thus, the June 19, 2002, letter from the attorney for Huck and Jacob to the Insurance Commissioner could not have led to a retaliatory discharge of Huck and Jacob. We will, therefore, not further address that letter. In her April 3, 2002, letter to the North Dakota Insurance Commissioner, the attorney for Huck and Jacob advised the Insurance Commissioner that her clients had been placed on leave pending a company investigation, requested inspection and copying of records and documents, and said, “[w]hen we have this information, we will be in a better position to assess pursuit of our claims and complaints under the North Dakota Uniform Fair Trade Practices Act as embodied in N.D.C.C. 26.1-04.” The letter does not specify any law alleged to have been violated and relates only to Nodak Mutual’s internal investigation. Under Dahl-berg and Jose, the letter does not qualify as protected activity.

[¶ 21] We conclude the information available to the trial court precluded the existence of a genuine issue of material fact about Huck’s and Jacob’s claims that then.' terminations were retaliatory discharges for engaging in protected activities.

Ill

[¶ 22] As to the other claims asserted by Jacob and Huck, they have failed to demonstrate the record contains any evidence supporting their claims or raising an issue of material fact.

The resisting party must present competent admissible evidence by affidavit or other comparable means which raises an issue of material fact and must, if appropriate, draw the court’s attention to relevant evidence in the record by setting out the page and line in depositions or other comparable documents containing testimony or evidence raising an issue of material fact. Investors Real Estate Trust Properties v. Terra Pacific Midwest, 2004 ND 167, ¶ 5, 686 N.W.2d 140. We thus conclude they are without merit.

IV

[¶ 23] Affirmed.

[¶ 24] GERALD W. VANDE WALLE, C.J., and DALE V. SANDSTROM, and WILLIAM A. NEUMANN, JJ., and WILLIAM F. HODNY, S.J., concur.

[¶ 25] The Honorable WILLIAM F. HODNY, S.J., sitting in place of MARING, J., disqualified.

      . Chapter 26.1-04, N.D.C.C., is entitled "Prohibited Practices In Insurance Business.”


author: NEUMANN, Justice.

text:
    2005 ND 55
    Stephen SIMPSON and Sheri Simpson, Plaintiffs and Appellants, v. CHICAGO PNEUMATIC TOOL COMPANY, Johnson & Bell, Ltd., William Johnson, Dennis C. Cusack and Jerome C. Kettleson, Defendants and Appellees, Robert V. Bolinske, Sr. and Charles T. Edin, Appellants.
    No. 20040133.
    Supreme Court of North Dakota.
    March 8, 2005.
    Rehearing Denied April 13, 2005.

      Robert V. Bolinske, Bismarck, N.D., for appellants.
    John C. Kapsner, Vogel Law Firm, Bismarck, N.D., for defendants and appellees.
   NEUMANN, Justice.

[¶ 1] Stephen and Sheri Simpson, together with their attorneys, Robert V. Bol-inske, Sr., and Charles T. Edin, appealed from a judgment dismissing the Simpsons’ claims against Chicago Pneumatic Tool Company, Johnson & Bell, Ltd., William Johnson, Dennis C. Cusack and Jerome C. Kettleson, denying their motion to compel, and awarding the defendants $17,098.42 in attorney fees, costs and disbursements as a sanction for violating N.D.R.Civ.P. 11(b). We conclude the district court did not err in denying the Simpsons’ motion to compel or in granting summary judgment dismissal of their action on the grounds of res judicata and collateral estoppel. We further conclude the court did not err in determining the Simpsons’ lawsuit was frivolous and imposing monetary sanctions. However, we conclude the court erred in holding the Simpsons jointly and severally liable with their attorneys for Rule 11 monetary sanctions. We affirm in part and reverse in part.

I

[¶ 2] In 1996, the Simpsons sued Chicago Pneumatic and others alleging Chicago Pneumatic negligently manufactured pneumatic air tools that were used by Stephen Simpson at his employment, the pneumatic air tools were defective and unreasonably dangerous for the user, and Stephen Simpson suffered serious injury while using the tools. During pretrial discovery, the Simpsons asked Chicago Pneumatic to produce any photographs and video recordings related to the case. Chicago Pneumatic answered that it had taken surveillance videos of Stephen Simpson and all of the photographs and video recordings had been disclosed. A surveillance videotape was introduced into evidence during the trial. In April 2000, a jury found Chicago Pneumatic was not negligent, the pneumatic air tools were not defective and unreasonably dangerous, and the tools did not cause Stephen Simpson’s injuries.

[¶ 3] After the trial, the Simpsons moved to depose Thomas Twist, the investigator who took the surveillance videotape, and moved for a new trial because they did not believe Chicago Pneumatic had disclosed all of the surveillance videotape. Twist testified the videotape provided to the Simpsons during discovery and introduced at trial did not include all of the videotape he had taken, but Stephen Simpson was not on any of the videotape that had not been provided to the Simpsons. The Simpsons moved to compel production of all the original videotapes taken by Twist. The district court denied the motion to compel and the motion for new trial. In Simpson v. Chicago Pneumatic Tool Co., 2003 ND 31, ¶¶ 1, 11, 657 N.W.2d 261, we affirmed, concluding the district court did not abuse its discretion in denying the post-trial motions.

[¶ 4] In May 2003, about two months after the Simpson decision was filed, the Simpsons brought this action against Chicago Pneumatic and the attorneys who represented the company in the previous action. The Simpsons again alleged that Chicago Pneumatic “tools were defective and caused plaintiff Stephen Simpson serious and disabling injuries,” and the defendants “failed to in fact produce all surveillance videotape plaintiffs were entitled to receive.” The Simpsons alleged the defendants’ conduct violated the North Dakota Rules of Civil Procedure relating to the discovery process, violated the North Dakota Rules of Professional Conduct, violated the due process clauses of the federal and state constitutions, and constituted obstruction of justice, fraud, concealment of evidence, abuse of process, negligent or intentional infliction of emotional distress, and tortious outrage. The Simpsons sought actual and punitive damages as well as an order compelling disclosure of all of the original surveillance videotape in the underlying litigation. The defendants moved to dismiss the complaint under N.D.R.Civ.P. 12(b)(vi), or in the alternative, for summary judgment under N.D.R.Civ.P. 56. The defendants also sought sanctions against the Simpsons and their attorneys under N.D.C.C. § 28-26-01 and N.D.R.Civ.P. 11 for filing a frivolous complaint.

[¶ 5] The district court treated the defendants’ motion as a motion for summary judgment, dismissed the Simpsons’ claims, and denied the motion to compel. The court ruled that principles of res judicata and collateral estoppel barred the action because the “claims relating to the alleged failure of the defendants to disclose certain surveillance video tapes were raised and then addressed by the trial court in Simpson ... both through the plaintiffs’ motion for a new trial and the plaintiffs’ motion to compel post-trial discovery. They were the same claims plaintiffs now present in this action.” The court also found the Simpsons’ claims were frivolous and imposed “Rule 11 sanctions” against the Simpsons and their counsel, “jointly and severally,” for $16,433 in attorney fees and $665.42 in costs and disbursements.

II

[¶ 6] On appeal, the Simpsons and their attorneys argue the district court erred in denying their motion to compel and in granting summary judgment dismissal of their claim of fraudulent concealment and misrepresentation against the defendants on the grounds of res judicata and collateral estoppel.

[¶ 7] Our standard of review for the grant of summary judgment is well-established. In Charles McCauley P’ship, L.L.L.P. v. Tyrone Township, 2004 ND 214, ¶ 3, 689 N.W.2d 410 (quoting Zuger v. State, 2004 ND 16, ¶7, 673 N.W.2d 615 (citations and internal quotations omitted)), we said:

Summary judgment is a procedural device for promptly disposing of a lawsuit without a trial if there are no genuine issues of material fact or inferences which can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. Whether summary judgment was properly granted is a question of law which we review de novo on the entire record. On appeal, this Court decides if the information available to the trial court precluded the existence of a genuine issue of material fact and entitled the moving party to summary judgment as a matter of law. Summary judgment is appropriate against parties who fail to establish the existence of a factual dispute on an essential element of a claim on which they will bear the burden of proof at trial.

[¶ 8] Through the doctrines of res judicata and collateral estoppel, courts bar relitigation of claims and issues to promote the finality of judgments, which increases certainty, discourages multiple litigation, wards off wasteful delay and expense, and conserves judicial resources. Riemers v. Peter s-Riemers, 2004 ND 153, ¶ 9, 684 N.W.2d 619. In Hofsommer v. Hofsommer Excavating, Inc., 488 N.W.2d 380, 383 (N.D.1992) (internal citations omitted), this Court explained:

Although collateral estoppel is a branch of the broader law of res judica-ta, the doctrines are not the same. Res judicata, or claim preclusion, is the more sweeping doctrine that prohibits the re-litigation of claims or issues that were raised or could have been raised in a prior action between the same parties or their privies and which was resolved by final judgment in a court of competent jurisdiction. On the other hand, collateral estoppel, or issue preclusion, generally forecloses the relitigation, in a second action based on a different claim, of particular issues of either fact or law which were, or by logical and necessary implication must have been, litigated and determined in the prior suit.

For purposes of both res judicata and collateral estoppel, only parties or their privies may take advantage of or be bound by a former judgment. Id. at 384. Privity exists if a person is “ ‘so identified in interest with another that he represents the same legal right.’ ” Id. (quoting 46 Am. Jur.2d Judgments § 532, at p. 683 (1969) (footnote omitted)). The applicability of res judicata or collateral estoppel is a question of law fully reviewable on appeal. Hofsommer, at 383.

[¶ 9] The factual allegations the Simpsons rely upon to establish their claim in this case are identical to the factual allegations they had unsuccessfully litigated in Simpson. The Simpsons allege Chicago Pneumatic’s tools were defective and caused Stephen Simpson serious and disabling injuries, directly contrary to the jury’s findings in Simpson, 2003 ND 31, ¶ 2, 657 N.W.2d 261. The Simpsons again allege that the defendants failed to produce all of the surveillance videotape they were required to produce under the district court’s discovery order in the prior proceeding, and rely on the same deposition testimony of Twist that was presented to the court in the prior proceeding to support their claim. One of the reasons given by the district court for denying the motion to compel and motion for new trial in Simpson, at ¶ 11, which was affirmed by this Court, was that Chicago Pneumatic had complied with the court’s discovery order:

[Fjirst of all, I want to say that, again we might be getting into a semantic argument, but it’s my opinion that [Chicago Pneumatic] complied with the Court’s order as the Court wrote the order, and maybe I should have been less specific in the order and just should have said give them all the video tapes and let them decide. But the order did say relevant or related, I don’t know the exact wording, but having to do with Stephen Simpson, and I think a logic common sense reading of that is that if tapes showed Mr. Simpson that they should be turned over, and reading Mr. Twist’s deposition, I don’t believe that there’s any evidence that — -tapes that showed Mr. Simpson exists that have been concealed or withheld from [Simpsons].

[¶ 10] The only difference between this case and Simpson is the addition of Chicago Pneumatic’s attorneys as defendants and the alternative theories pled to justify recovery. This Court has adopted a somewhat “expanded” version of the concept of privity regarding res judica-ta and collateral estoppel. Hofsommer, 488 N.W.2d at 384. Here, the alleged wrongful conduct of the defendants involves the attorneys’ response on behalf of their client to discovery requests and orders. Under these circumstances, privity exists between Chicago Pneumatic and its attorneys in the underlying action for purposes of res judicata and collateral estop-pel. See, e.g., Geringerv. Union Elec. Co., 731 S.W.2d 859, 866 (Mo.App.1987) (law firm which represented client in underlying action was in privity with client in the prior adjudication and could assert collateral estoppel as bar to relitigation of issue resolved in previous lawsuit); Merchants State Bank v. Light, 458 N.W.2d 792, 794 (S.D.1990) (lawyer who prosecuted and directed prior litigation was in privity with client for purposes of res judicata); 47 Am.Jur.2d Judgments § 691 (1995), and cases collected therein.

[¶ 11] Although the Simpsons raise different theories of recovery in this case, res judicata and collateral estoppel apply even though the subsequent claims may be based upon a different legal theory. See Littlefield v. Union State Bank, 500 N.W.2d 881, 884 (N.D.1993). As the court explained in Morgan Consultants v. American Tel. and Tel. Co., 546 P.Supp. 844, 848 (S.D.N.Y.1982):

The mere fact that plaintiffs have conceived some new legal theories in which to clothe the same facts and events that gave rise to the first two actions will not affect the res judicata question. It is “the facts surrounding the transaction or occurrence which operate to constitute the cause of action, not the legal theory upon which a litigant relies.” Expert Electric, Inc. v. Levine, 554 F.2d 1227, 1234 (2d Cir.), cert. denied, 434 U.S. 903, 98 S.Ct. 300, 54 L.Ed.2d 190 (1977).

The Simpsons’ addition of Chicago Pneumatic’s attorneys as defendants and their reliance on different legal theories do not make the doctrines of res judicata and collateral estoppel inapplicable.

[¶ 12] We realize that some courts have recognized the availability of a tort action to remedy spoliation of evidence. See, e.g., Rosenblit v. Zimmerman, 166 N.J. 391, 766 A.2d 749, 754-59 (2001); Annot., Intentional spoliation of evidence, interfering ivith prospective civil action, as actionable, 70 A.L.R.4th 984 (1989). We need not reach that issue in this case. None of the cases we have reviewed suggest that a party who has lost a discovery dispute in a prior legal action has any cause of action against the opposing party based on the same evidence that was considered and rejected by the court in the previous action.

[¶ 13] We conclude the district court correctly determined the Simpsons’ action is barred by principles of res judicata and collateral estoppel. The court did not err in granting summary judgment dismissal of the Simpsons’ claims or in denying their motion to compel.

Ill

[¶ 14] The Simpsons and their attorneys argue the district court erred in imposing sanctions.

[¶ 15] The basis for the court’s award of sanctions is unclear. In the defendants’ answer, they requested attorney fees, costs and disbursements against the Simpsons and their attorneys under N.D.C.C. §§ 28-26-01 and 28-26-31, and N.D.R.Civ.P. 11. The defendants followed with a “Motion for Rule 11 Sanctions” and a “Brief in Support of Rule 11 Sanctions” in which they contended the Simpsons’ complaint violated “the provisions of Rule 11(b)(1),(2), and (3), N.D.R.Civ.P.” These documents were accompanied with a “Safe Harbor Notice to Seek Rule 11 Sanctions” to the Simpsons giving them 21 days to withdraw the summons and complaint. On December 29, 2003, the district court issued an interlocutory order imposing sanctions under N.D.R.Civ.P. 11, but postponing issuance of a final order until the court could determine whether the attorney fees and expenses claimed were reasonable. Also on December 29, 2003, the court issued an interlocutory memorandum decision granting the motions for summary judgment and for attorney fees, in which the court analyzed the propriety of sanctions under both N.D.C.C. § 28-26-01 and N.D.R.CivJP. 11. On March 1, 2004, the court issued an interlocutory memorandum opinion and order modifying the order for judgment in which both N.D.C.C. § 28-26-01 and N.D.R.Civ.P. 11 are discussed. The final judgment, entered on March 11, 2004, dismissed the action and imposed “Rule 11 sanctions” against the Simpsons and their attorneys in the amount of $17,098.42. Because the safe harbor notice was given under N.D.R.Civ.P. 11, Rule 11 appears to have been the major focus of the defendants’ requests for sanctions, and the final judgment refers only to sanctions imposed under Rule 11, we conclude the court assessed Rule 11 sanctions, rather than sanctions under N.D.C.C. § 28-26-01, against the Simpsons and their attorneys.

[¶ 16] Under N.D.R.Civ.P. 11, a district court must award sanctions against an attorney, or a represented party, or both, if the requirements of the rule are violated by them. Dietz v. Kautzman, 2004 ND 119, ¶ 14, 681 N.W.2d 437. We will not disturb a district court’s determination regarding a request for sanctions under Rule 11 unless the court has abused its discretion. Id. at ¶ 15. If there are any factual determinations relevant to the sanction issue, we review the district court’s findings under a clearly erroneous standard. Id.

[¶ 17] In deciding sanctions were appropriate, the district court reasoned:

As noted under Rule 11(b), an attorney by presenting a pleading to a court represents that to the best of their knowledge, information and belief formed after an inquiry reasonable under the circumstances that among other things the allegations and other factual contentions have evidentiary support or are likely to after further investigation. [ ]Rule ll(b)(3)[.] In addition, the attorney represents that the claims and other legal contentions are warranted by existing law or by non-frivolous argument for the extension, modification, or reversal of existing law. Rule 11(b)(2). These requirement[s] are absent in the key allegations of the plaintiffs[’] complaint.
As noted in this trial court’s summary judgment memoranda decision, Paragraph IV of the plaintiffs[’] complaint is totally contrary to the special verdict handed down by the jury in Simpson. ... The jury found that Chicago Pneumatic was not negligent and that their tools were not defective or unreasonably dangerous and did not cause Simpson’s injury.... Attorney Bolinske was the primary attorney in that action. Notwithstanding this judicial determination and result, he still alleges on behalf of his client[s] the opposite.
Likewise, in Paragraphs V, VI and VII of the plaintiffs!’] complaint signed by Attorney Bolinske he alleges that the defendants failed to produce certain surveillance video tape as required. However, in Simpson ... that issue was previously raised by the plaintiffs before the trial court and as a post trial motion for a new trial and post trial motion to compel discovery.... Contrary and opposite to the allegations of Attorney Bol-inske in these three paragraphs of the new complaint, the trial court determined that the defendants had not failed to disclose any video tape required under the court[’]s earlier discovery order.... The Supreme Court of North Dakota affirmed this decision by the trial court relating to discovery.... Consequently, these allegations under paragraphs IV through VII inclusive of the new complaint lack evidentiary support and constitute claims and other legal contentions not warranted by existing law, including the law of the case. This trial court agrees with the defendants^] legal assertion that the doctrine of privity and the principles of Res Judicata preclude these new claims for those reasons and for reasons that they are inconsistent with Rule 11(b)(2) and (3).
In addition to those reasons, the plaintiffs have raised claims that have no basis in law.... For example, a per se violation of an ethical duty and of Rules of Civil Procedure do not create a cause of action against an adversary attorney. There is no available claim as a civil action for obstruction of justice. There is no basis for a due process claim. Because the defendants and their attorneys were within the bounds of the discovery orders imposed on them in the earlier Simpson [case] there are no legitimate facts alleged to support their claim of abuse of process.

[¶ 18] Although attorney Edin had not signed the complaint, the court imposed the Rule 11 sanctions against Edin as well, noting his name listed as an attorney at law was placed immediately below Bol-inske’s name and “Edin notarized the affidavit of service by mail of the complaint and summons thereby evidencing his knowledge of the documents served.” The propriety of imposing Rule 11 sanctions against Edin has not been raised as an issue on appeal.

[¶ 19] We conclude the district court’s findings are not clearly erroneous and the court did not abuse its discretion in imposing sanctions in this case. However, under N.D.R.Civ.P. 11(c)(2)(a), “[m]on-etary sanctions may not be awarded against a represented party for a violation of subdivision (b)(2).” The district court found N.D.R.Civ.P. 11(b)(2) had been violated. Consequently, it was impermissible for the court to hold the Simpsons jointly and severally liable with their attorneys for the monetary sanctions, and we reverse that part of the judgment.

IV

[¶ 20] The judgment is affirmed, except for that part holding the Simpsons jointly and severally liable with their attorneys for Rule 11 monetary sanctions which is reversed.

[¶ 21] GERALD W. VANDE WALLE, C.J., and DALE V. SANDSTROM, and MARY MUEHLEN MARING, JJ., and EVERETT NELS OLSON, S.J., concur.

[¶ 22] The Honorable EVERETT NELS OLSON, S. J., sitting in place of KAPSNER, J., disqualified.


author: MARING, Justice.

text:
    2005 ND 65
    Gene A. BURI, Plaintiff and Appellee v. James A. RAMSEY and Rhonda Ramsey, Defendants and Appellants.
    No. 20040164.
    Supreme Court of North Dakota.
    March 23, 2005.

      Theresa L. Zimmerman, American Legal Services, Bismarck, N.D., for defendants and appellants.
    R. James Maxson, Maxson Law Office, Minot, N.D., for plaintiff and appellee.
   MARING, Justice.

[¶ 1] James and Rhonda Ramsey (“Ramseys”) appeal from a trial court judgment against them awarding damages to Gene Buri for conversion. We affirm in part, reverse in part, and remand for further proceedings in accordance with our opinion.

I

[¶ 2] In August 2002, the Ramseys agreed to purchase a parcel of land from Peter and Helen Weninger (“Weningers”). A handwritten condition included in the purchase agreement stated: ‘Wind Mill & 6 Grain Bins are not included. Seller has right to ingress & egress & have until 1 Apr 03 to Remove Bins & Wind Mill. Buyer will permit Seller To have an Auction in the Quonset in Oct After Closing.” The purchase agreement did not otherwise refer to the grain bins.

[¶ 3] In October 2002, the Weningers held an auction and all six of the grain bins were sold to Buri. Buri had been storing grain in the bins at the time of the land sale in August, and this grain remained in the bins at the time of the auction.

[¶ 4] The events following the auction sale were disputed. Buri claimed that on the same day as the auction he spoke to the Ramseys, informing them that he had purchased the bins. Buri testified that in December 2002, he went to the property to clean the grain out of the bins. While he and his sons were in the process of cleaning the bins, the Ramseys came to the site where the bins were located and said, “You cannot have the grain bins; they’re not yours.” Buri continued to gather the grain and did not respond. Buri testified that he next communicated with the Ram-seys near the end of March 2002, when he called Mr. Ramsey and “told him I was going to get the grain bins. And he said I could not have them, I would be trespassing if I did.” Buri testified that after being threatened with a trespassing charge, he spoke with the state’s attorney and the sheriff regarding the situation but did not again attempt to contact the Ram-seys or remove the bins. His next action was to have his attorney write the Ram-seys a letter on June 26, 2003, threatening legal action if he was not granted access to the land to remove the bins.

[¶ 5] The Ramseys testified that they have never seen or spoken to Buri, not in October after the auction, not in December when Buri claims to have been on them land removing grain, and not in March when Buri claims to have telephoned them. The Ramseys testified that they were out of town, both in December 2002 and March 2003, when Buri claims to have spoken to them. The Ramseys’ daughter, who was home in December 2002, testified that she did see “someone” at the grain bins in December but that she did not know who it was and did not speak to the person. The daughter also testified that her parents were not home at the time, that they traveled off and on during December, and that she could not be sure of the exact dates.

[¶ 6] The Ramseys claim their only knowledge of the grain bin dispute comes from two letters they received after April 1, 2003. The first was a letter their attorney received from the Weningers’ attorney, dated March 31, 2003, asking for an extension of the contractual deadline because the Ramseys had denied the Wen-ingers’ request to pick up the bins. The second was the aforementioned June 2003 letter from Buri’s attorney, threatening legal action.

[¶ 7] After a bench trial, the trial court concluded the Ramseys’ conduct, which included wrongfully detaining the grain bins and denying Buri access to their land to retrieve the bins, constituted conversion. The trial court found damages in the amount of $1300 plus 6 percent interest from January 1, 2003, to the date of judgment and ordered the Ramseys to allow Buri access to their property for thirty-days post-judgment to remove the grain bins. The Ramseys appeal, claiming first, this dispute should have been resolved under contract law; second, even if the law of conversion is applicable, their actions did not constitute conversion; and third, if the conversion is affirmed, the damage award is clearly erroneous.

II

[¶ 8] The Ramseys argue that they could not have converted Buri’s property because they were unaware of any rights Buri had in the bins, that they did not act wrongfully or dispose of either the Weningers’ or Buri’s property, and that Buri suffered no damages. Rather, the Ramseys contend this is a simple contract dispute. The Ramseys assert the terms of the land purchase agreement clearly stated that the Weningers had until April 1, 2003, to remove the grain bins. Failure to remove them by that date resulted in a forfeiture of the bins under the terms of the contract. Therefore, the Ramseys argue they did not wrongfully acquire or deprive anyone of access to the grain bins, which is required for a finding of conversion.

[¶ 9] A determination of whether the trial court correctly employed the law of conversion rather than the law of contract is dependent on a determination of the applicable facts. According to Buri, the Ramseys wrongfully denied him access to the grain bins, preventing him from removing them prior to the April 1 deadline. The Ramseys contend they were unaware Buri had purchased the bins and had never seen or spoken to him prior to the day of trial. Therefore, the Ramseys contend the failure of either Buri or the Weningers to retrieve the bins prior to April 1, 2003, resulted in a forfeiture under the terms of the land purchase contract. The adoption of Buri’s version of events places this dispute within the law of conversion, whereas the adoption of the Ramseys’ version requires the application of contract law.

[¶ 10] “In a bench trial, the trial court is the determiner of credibility issues and we do not second-guess the trial court on its credibility determinations. We do not reweigh evidence or reassess credibility, nor do we reexamine findings of fact made upon conflicting testimony. We give due regard to the trial court’s opportunity to assess the credibility of the witnesses, and the court’s choice between two permissible views of the evidence is not clearly erroneous.” Akerlind v. Buck, 2003 ND 169, ¶ 7, 671 N.W.2d 256 (quotation omitted).

[¶ 11] The trial court found Buri’s testimony and his version of events more credible and, consequently, applied the law of conversion. Giving due regard to the trial court’s assessment of the credibility of the witnesses, we will not reweigh the evidence. The trial court’s factual findings are supported by the record and are not clearly erroneous. Therefore, the trial court’s application of the law of conversion to resolve this dispute is correct.

Ill

[¶ 12] The Ramseys argue that even if the trial court correctly concluded the law of conversion was applicable, it erred when it concluded their actions constituted conversion.

[¶ 13] “We have held the trial court’s determination about whether a conversion has been committed is a finding of fact which will not be overturned on appeal unless it is clearly erroneous.” Paxton v. Wiebe, 1998 ND 169, ¶29, 584 N.W.2d 72. “A finding of fact is clearly erroneous when, although there is some evidence to support it, the reviewing court is left with a definite and firm conviction a mistake has been made.” Id.

[¶ 14] Our Court has held that “[c]onversion consists of a tortious detention or destruction of personal property, or a wrongful exercise of dominion or control over the property inconsistent with or in defiance of the rights of the owner.” Ritter, Laber and Associates, Inc. v. Koch Oil, Inc., 2004 ND 117, ¶ 11, 680 N.W.2d 634; see also Paxton, 1998 ND 169, ¶ 28, 584 N.W.2d 72. “The gist of a conversion is not in acquiring the complainant’s property, but in wrongfully depriving him of it, whether temporarily or permanently, and it is of little relevance that the converter received no benefit from such deprivation.” Paxton, at ¶28 (quoting Christensen v. Farmers State Bank of Richardton, 157 N.W.2d 352, 357 (N.D.1968)). Conversion does not require bad intent on the part of the converter, but only an intent to control or interfere with an owner’s rights to use to an actionable degree. Paxton, at ¶ 28.

[¶ 15] Buri testified that he purchased the grain bins at an auction sale in October 2002 and that the Ramseys told him twice, first in December 2002 and again in March 2003, that he could not remove the bins from their land. Based on this testimony, the trial court found “Gene Buri owned the grain bins as of October 12, 2002” and “the Ramseys wrongfully detained the grain bins by not allowing [Buri] access onto their property ... thus wrongfully deprived him of his right to his property,” thereby satisfying the elements of conversion. We are not left with a definite and firm conviction a mistake has been made. Therefore, we conclude the trial court’s finding that the Ramseys converted Buri’s property is supported by the evidence and is not clearly erroneous.

IV

[¶ 16] The Ramseys argue that granting Buri both the monetary value of the bins and possession of the bins is not authorized under N.D.C.C. § 32-03-23. The issue presented is the proper measure of damages.

[¶ 17] The appropriate standard of review in an appeal challenging a trial court’s award of damages in a bench trial is whether the trial court’s findings of fact on damages are clearly erroneous. Nord v. Herman, 2001 ND 11, ¶ 16, 621 N.W.2d 332; N.D.R.Civ.P. 52(a). Under N.D.R.Civ.P. 52(a), a finding of fact is clearly erroneous if there is no evidence to support it, if it is clear to the reviewing court that a mistake has been made, or if the finding is induced by an erroneous view of the law. In re K.M.G., 2000 ND 50, ¶ 4, 607 N.W.2d 248.

[¶ 18] Section 32-03-23, N.D.C.C., provides alternative bases for valuing converted property:

The detriment caused by the wrongful conversion of personal property is presumed to be:
1. The value of the property at the time of the conversion, with the interest from that time; or
2. When the action has been prosecuted with reasonable diligence, the highest market value of the property at any time between the conversion and the verdict, without interest, at the option of the injured party; and
3. A fair compensation for the time and money properly expended in pursuit of the property.

N.D.C.C. § 32-03-23.

[¶ 19] The trial court’s calculation of damages is expressed in its Memorandum Opinion, which states, in pertinent part:

Pursuant to N.D.C.C. 32-03-23[sic], it basically states that damages are the value of the detriment caused by the wrongful conversion of property to be either the value of the property at the time of the conversion or the highest market value of the property at any time between the conversion and the verdict, provided the action was prosecuted with reasonable diligence. In the case at hand, the plaintiff is asking for double the value of the grain bins ($2,600) plus the right for the plaintiff to go on the property and retrieve his property. It appears to the Court that a reasonable amount of damages would be $1,300, which was the value of the grain bins at the time of conversion, plus interest at the rate of 6% form [sic] January 1, 2003, to the date of judgment, plus the Ramseys must allow Gene Buri the right to access on their property to remove the grain bins within 30 days of the date of judgment.

[¶ 20] We have previously examined the calculation of damage awards under N.D.C.C. § 32-03-23 and concluded that the injured party has the option of choosing either N.D.C.C. § 32-03-23(1) or § 32-03-23(2) to determine the value of the converted property. Harwood State Bank v. Charon, 466 N.W.2d 601, 604 (N.D.1991); National Bank of Harvey v. International Harvester Co., 421 N.W.2d 799, 806 (N.D.1988); Frank v. Schaff 123 N.W.2d 827, 830 (N.D.1963). Section 32-03-23, N.D.C.C., “creates a presumption that the detriment caused by the conversion equals the value of the property.” National Bank, at 804. In Harwood State Bank, our Court considered what type of damages were contemplated by N.D.C.C. § 32-03-23(3). Noting that N.D.C.C. § 32-03-23 and its California equivalent, California Civil Code § 3336, share the Field Civil Code as a common source, our Court considered California’s interpretation of the phrase “time spent pursuing the property” as persuasive. Harwood State Bank, at 605-06. Consequently, a plaintiff may choose either N.D.C.C. § 32-03-23(1) or § 32-03-23(2) to determine the value of the converted property and in addition, under § 32-03-23(3), request reimbursement for specific costs incurred to recover the actual property, which have included “hauling charges, temporary storage charges and travel expenses incurred while searching for the property,” as distinguished from litigation costs. Harwood State Bank, at 605-06.

[¶ 21] However, in Harwood State Bank, 466 N.W.2d 601, National Bank, 421 N.W.2d 799, and Frank, 123 N.W.2d 827, the owners of the converted property were permanently, not just temporarily, deprived of their property.

[¶ 22] In Northrup v. Cross, 2 N.D. 433, 51 N.W. 718 (1892), Cross, a county sheriff, wrongfully confiscated livestock from Northrup and later sold the livestock at auction. Northrup purchased the livestock at the auction, thus regaining possession. Id. Our Court concluded that “[w]hen a party whose property has been wrongfully taken by an officer, and sold at judicial sale, buys such property in at such sale, he is not entitled, in an action of claim and delivery against the officer, to judgment for the value of the property, but only for the sum which it cost him to regain possession, with interest on such sum from the time of payment.” Id. at 719. We noted that this general principle has been applied to conversion cases. Id. Our Court has also concluded the owner of property converted by another can only recover damages for the “actual losses suffered by the [owner].” Frank, 123 N.W.2d at 830 (citing Coan v. Plaza Equity Elevator, 61 N.D. 627, 239 N.W. 620, 624 (1931)).

[¶23] Because we have viewed California case law as persuasive in our interpretation of N.D.C.C. § 32-03-23, we note California courts have concluded “although good faith and mistake are not defenses to an action for conversion, the plaintiffs damages will be reduced if the defendant returns the property or the plaintiff otherwise recovers the property.” Krusi v. Bear, Steams & Co., 144 Cal. App.3d 664, 192 Cal.Rptr. 793, 798 (1983); see also Blewett v. Miller, 131 Cal. 149, 63 P. 157 (1900). “The rule is that, ‘where one recovers his property again which had been unlawfully taken from him, he is considered as having received it in mitigation of damages’; and the measure of damages, in the absence of special damage, is the expense of procuring its return (with interest).” Blewett, at 157 (quoting 1 Sutherland, Damages § 239 (1893)).

[¶ 24] In the present case, Buri asked for “double the value of the grain bins ($2600)” plus the right to retrieve the property. The trial court, after correctly noting that the first step in determining the amount of damages is to employ either N.D.C.C. § 32-03-23(1) or § 32-03-23(2) to value the property, stated further that “[i]t appears ... a reasonable amount of damages would be $1,300 ... plus interest ... plus ... the right to access on their property to remove the grain bins.” This language indicates a misunderstanding of N.D.C.C. § 32-03-23.

[¶ 25] In a situation such as exists in the case at bar, the plaintiff must first elect to utilize either N.D.C.C. § 32-03-23(1) or N.D.C.C. § 32-03-23(2) to establish the value of the property. If the owner elects a return of the converted property, the present value of that property must be considered in mitigation of damages established under subsection 1 or 2 of N.D.C.C. § 32-03-23. See Frank, 123 N.W.2d at 830 (citing Coan v. Plaza Equity Elevator, 61 N.D. 627, 239 N.W. 620, 624 (1931)). The owner also is entitled to damages under N.D.C.C. § 32-03-23(3) which include “[a] fair compensation for the time and money properly expended in pursuit of the property.” N.D.C.C. § 32-03-23(3). Here the record does not indicate evidence of specific costs incurred by Buri in “pursuit” of the converted property under N.D.C.C. § 32-03-23(3). There is also no evidence in the record of any damages caused to Buri by reason of being deprived of the grain bins temporarily; i.e., loss of use and diminution in value. However, if the trial court desires, it can take further evidence on the issue of damages.

[¶ 26] The trial court’s damage award is based on an erroneous view of the law, and we reverse and remand for a damages award consistent with this opinion.

V

[¶ 27] Buri argues that he should be awarded attorney’s fees and costs on appeal. Under N.D.R.App.P. 38, this Court may award attorney’s fees if an appeal is frivolous. Dietz v. Kautzman, 2004 ND 119, ¶ 17, 681 N.W.2d 437. “An appeal is frivolous under Rule 38, N.D.R.App.P., if it is flagrantly groundless, devoid of merit, or demonstrates persistence in the course of litigation which could be seen as evidence of bad faith.” Riemers v. Peters-Riemers, 2004 ND 153, ¶ 38, 684 N.W.2d 619.

[¶ 28] Buri argues the Ramseys’ contention that this is a contractual dispute rather than a conversion is without merit because no contractual relationship existed between the parties. Further, Buri argues that although the Ramseys challenged the trial court's factual findings, they failed to “make any showing the District Court was clearly erroneous in its factual findings.”

[¶ 29] We are not persuaded by Buri’s argument and, in fact, have reversed the trial court’s damage award to Buri. Therefore, Buri’s request for attorney’s fees and costs under Rule 38 is denied.

VI

[¶ 30] We affirm that part of the trial court’s judgment applying the law of conversion and finding the Ramseys’ actions constituted wrongful conversion. We reverse the trial court’s award of damages and remand for further proceedings consistent with this opinion, and we deny Buri’s request for attorney’s fees and costs.

[¶ 31] GERALD W. VANDE WALLE, C.J., CAROL RONNING KAPSNER and DALE V. SANDSTROM, JJ., concur.

[¶ 32] The Honorable WILLIAM A. NEUMANN, a member of the Court when this case was heard, resigned effective March 14, 2005, and did not participate in this decision.