author: MAKING, Justice.

text:
    2006 ND 170
    Gene WEINREIS, Donnell Michels, and Badlands Flight Group, Inc., Plaintiffs and Appellees v. Stephen W. HILL, Defendant, and AeroLease of America, Inc., Defendant and Appellant.
    No. 20060026.
    Supreme Court of North Dakota.
    July 27, 2006.

      Michael J. Maus, Hardy, Maus & Nord-sven, P.C., Dickinson, N.D., for plaintiffs and appellees.
    Lawrence A. Dopson, Zuger Kirmis & Smith, Bismarck, N.D., for defendant and appellant.
   MAKING, Justice.

[¶ 1] AeroLease of America, Inc. (“AeroLease”) appealed from a district court judgment ordering AeroLease to re-convey an airplane and two engines to Badlands Flight Group, Inc. (“Badlands”), and awarding damages. The district court concluded that although Steven W. Hill had ostensible authority as an agent of Badlands, AeroLease did not act in good faith and was negligent in an airplane sale-lease back transaction. Because we conclude the district court did not clearly err in finding AeroLease was negligent, we affirm.

I

[¶ 2] The facts in this case were set forth in Weinreis v. Hill, 2005 ND 127, 700 N.W.2d 692, and we will not repeat them here except as necessary to assist in resolving the issues raised in this appeal.

[¶ 3] In December 2001, Gene Wein-reis, Donnell Michels, and Hill formed Badlands, and shortly after incorporation, Badlands purchased a Beechcraft airplane for $147,500. AeroLease provides financing for financially stressed borrowers by buying airplanes and leasing them back to borrowers. AeroLease’s president is Stanley Shaw. In May 2002, Hill applied to AeroLease for financing. AeroLease agreed to acquire title to the plane, and Badlands, through Hill, was to maintain physical control of the plane and lease it from AeroLease. As part of the transaction, Badlands was to receive a single cash payment of $65,000 and continued use of the plane during a twelve-month lease in exchange for transferring the plane’s title and making monthly lease payments of $1,415 to AeroLease. Badlands had the right to reacquire title to the plane by paying $70,887, representing the initial loan balance plus certain additional fees.

[¶4] AeroLease paid Hill $65,000 for the airplane. Hill made the first three monthly lease payments, but thereafter defaulted. AeroLease then unsuccessfully attempted to repossess the airplane. Weinreis and Michels asserted they had no knowledge of Hill’s transaction with Aero-Lease and had not authorized Hill to enter into the arrangement on behalf of Badlands.

[¶ 5] Following a bench trial, the district court found AeroLease was not a good faith purchaser and would be unjustly enriched if the contract were enforced. In Weinreis, 2005 ND 127, ¶¶ 11-13, 700 N.W.2d 692, we reversed and remanded to the district court for further consideration of whether Hill acted with apparent or ostensible authority to bind Badlands with respect to the transaction with AeroLease.

[¶ 6] In Weinreis, 2005 ND 127, ¶ 14, 700 N.W.2d 692, this Court declined to address issues relating to the applicability of the Uniform Commercial Code, as adopted in North Dakota, because such issues had not previously been raised in the district court. We did, however, invite the district court to consider the U.C.C. on remand, if necessary. Id. Instead, the district court declined to consider U.C.C. applicability, resolving the dispute solely by applying N.D.C.C. § 3-03-03 after finding Hill acted with ostensible authority. Based upon the issues and arguments made to the trial court, we, therefore, again do not address any U.C.C. issues in this appeal.

[¶ 7] On remand, the district court made additional findings and concluded that Hill was indeed cloaked with ostensible authority to act for Badlands. The district court found that Hill had been given secretarial and bookkeeping responsibilities for Badlands, but all major decisions were made jointly by all three principals. The court found Weinreis and Michels were not aware Hill represented himself as the president of Badlands and did not authorize that representation. The court also found Weinreis and Mi-chels first became aware of the arrangement with AeroLease when AeroLease attempted to repossess the plane in December 2002. The district court, however, concluded that even though Hill had ostensible authority, Badlands was not bound by Hill’s actions because Aero-Lease did not act in good faith and was negligent in the sale-lease back transaction. The district court entered judgment requiring AeroLease to reconvey the airplane and engines to Badlands, granting Weinreis, Michels, and Badlands judgment against Hill for $23,828.08 for damages, and granting AeroLease judgment against Hill for $103,309, the value of the plane. AeroLease appealed.

II

[¶ 8] AeroLease argues the district court erred as a matter of law in failing to apply a subjective test in determining Aer-oLease’s good faith, and even under an objective standard of good faith, Aero-Lease acted in good faith. AeroLease also claims the district court clearly erred finding negligence.

[¶ 9] Under N.D.C.C. § 3-03-03, Aero-Lease must have acted with good faith and without ordinary negligence in order to bind Badlands for Hill’s actions under mere ostensible authority. Section 3-03-03, N.D.C.C., states, “A principal is bound by acts of his agent under a merely ostensible authority to those persons only who in good faith and without ordinary negligence have incurred a liability or parted with value upon the faith thereof.” (Emphasis added.) “[Ojrdinary negligence, [shall consist] in the want of ordinary care and diligence.... ” N.D.C.C. § 1-01-17. Further, N.D.C.C. § 1-01-15 provides, “Ordinary care or diligence means such as a person usually exercises about his own affairs of ordinary importance.”

[¶ 10] A district court’s determination of negligence is a finding of fact which will not be set aside on appeal unless it is clearly erroneous under N.D.R.Civ.P. 52(a). Layman v. Braunschweigische Maschinenbauanstalt, Inc., 343 N.W.2d 334, 339 (N.D.1983) (issues of negligence are questions of fact for the trier of fact); F-M Potatoes, Inc. v. Suda, 259 N.W.2d 487, 492 (N.D.1977) (ample evidence in the record supported trial court’s negligence finding). See Miller v. Diamond Res., Inc., 2005 ND 150, ¶ 8, 703 N.W.2d 316 (negligence questions raised genuine issues of material fact precluding summary judgment). A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if no evidence exists to support it, or if the reviewing court, on the entire record, is left with a definite and firm conviction a mistake has been made. Fischer v. Berger, 2006 ND 48, ¶ 8, 710 N.W.2d 886; Albrecht v. Metro Area Ambulance, 2001 ND 61, ¶ 6, 623 N.W.2d 367.

[¶ 11] The district court here, after concluding Hill had acted with ostensible authority, decided AeroLease was negligent based on problems with the documentation AeroLease had received, together with AeroLease paying all consideration to Hill, and not to Badlands. Specifically, the district court made the following findings and conclusion considering AeroLease’s negligence in dealing with Hill:

14. Hill did represent himself to Stan Shaw as the President of Badlands Flight Group, Inc. AeroLease changed the documents to show Hill as president. Weinreis and Michels were not aware that the Bill of Sale filed with FAA listed Hill as the president.
16. The Aircraft Lease Agreement was first initialed by Hill as the lessor, (Badlands Flight Group is the lessee), and signed by Stephen Hill. The Lease Agreement was then initialed by Stan Shaw as lessee and returned to Steve Hill. Steve Hill initialed the lease a second time as lessor and an unidentified person printed the word “President” after his name at the end of the lease.
20. AeroLease has in its files at least four (4) different Bills of Sale of the aircraft. AeroLease did not know which Bill of Sale was submitted to FAA. The first is one where the seller is listed as Stephen Hill. That same Bill of Sale was later changed by someone to change the name of the seller to Badlands Flight Group, Inc., and was signed by Stephen Hill a second time. AeroLease of America admits filling out the top portion of that Bill of Sale and it appears that the person that filled out the top portion also inserted the words “Badlands Flight Group” under Seller. The consideration recited in this Bill of Sale cannot be determined from the documents.
21. There is a separate Bill of Sale which names Badlands Flight Group as the seller and is signed with the name Stephen Hill, but the signature appears not to be genuine. At the top of the Bill of Sale the word “Stan” is written.
23. Hill denies ever modifying any of the Bills of Sale or authorizing anyone else to do so. Stan Shaw of AeroLease testified that he thought it was appropriate to change any portion of the Bill of Sale except the signature.
[T]he Court reaffirms its conclusion ... that AeroLease was negligent in its handling of this purchase.

[¶ 12] Essentially, the district court found AeroLease’s negligent acts included depositing the proceeds of the transaction in Hill’s bank account rather than Badlands’ account, and preparing multiple bills of sale as described above which evidenced its confusion (or knowledge) of the plane’s ownership, in addition to the circumstances surrounding the signing of the lease agreement, which resulted in an unidentified person printing “President” after Hill’s name at the end of the lease. The district court is in the best position to weigh the facts as presented and, apparently, did not find Shaw a credible witness.

[¶ 13] AeroLease argues that its reliance upon Hill’s assertions as president of Badlands was justified, particularly when considering N.D.C.C. § 10-19.1-53 (president of the corporation authorized to sign and deliver contracts) and N.D.C.C. § 10-19.1-56 (providing in absence of an election or appointment of officers, individuals exercising principal officer functions deemed elected to those offices). However, these statutes do not preclude a district court from finding, as a matter of fact, there were facts that should have placed AeroLease on notice, or at least on inquiry, that Hill had no actual authority to bind Badlands to the lease agreement.

[¶ 14] We disagree with AeroLease’s assertion that the district court’s decision required it to routinely perform an extensive investigation to determine Hill was not acting with actual authority. On the contrary, the district court found that the absence of inquires by AeroLease in light of all the circumstances of the transaction here was negligent. The record supports the district court’s findings, and the findings support the negligence conclusion.

[¶ 15] Upon examining the entire record, we are not left with a definite and firm conviction the district court made a mistake in finding AeroLease was negligent in dealing with Hill. The district court concluded that based upon the facts known to AeroLease, a reasonably prudent person would be placed on notice that Hill could not bind Badlands, and ultimately, that AeroLease was negligent in handling the transaction. We conclude the district court did not clearly err in finding Aero-Lease was negligent in its dealings with Hill.

[¶ 16] Therefore even assuming Aero-Lease acted in good faith, because we conclude the district court’s finding that AeroLease did not act “without ordinary negligence” is not clearly erroneous, we conclude that Badlands was not bound by Hill’s actions under N.D.C.C. § 3-03-03.

Ill

[¶ 17] The district court’s judgment is affirmed.

[¶ 18] GERALD W. VANDE WALLE, C.J., MARY MUEHLEN MARING, DANIEL J. CROTHERS, DALE V. SANDSTROM, and CAROL RONNING KAPSNER, JJ., concur.


source: Caselaw Access Project

author: CROTHERS, Justice.

license: Public Domain

text:
    2006 ND 173
    STATE of North Dakota, Plaintiff and Appellee v. Donna BJERKLIE, Defendant and Appellant.
    No. 20050438.
    Supreme Court of North Dakota.
    July 27, 2006.

      Kent M. Morrow, Bismarck, N.D., for defendant and appellant.
    Brandi Sasse Russell, Assistant State’s Attorney, Bismarck, N.D., for plaintiff and appellee.
   CROTHERS, Justice.

[¶ 1] Donna Bjerklie appeals from a criminal judgment upon her entry of a Rule 11, N.D.R.Crim.P., conditional guilty plea to felony theft of services following the district court’s order granting the State’s motion in limine, preventing admission of alternative values for those services. Because the district court abused its discretion in granting the State’s motion, we reverse and remand to give Bjerk-lie an opportunity to withdraw her guilty plea.

I

[¶ 2] In January 2004, Bjerklie secured Vince’s Body Shop (“Vince’s”) to repair her vehicle. She received an estimate from Vince’s for the repairs prior to commencement of the work and was informed verbally and in writing that her car would not be released until the balance was paid in full. A partial payment was tendered after repairs had commenced. On September 28, 2004, Bjerklie, owing a balance of $1,038.45 on the vehicle, issued a $1,000 check to Vince’s, which agreed to release the vehicle for that amount. Bjerklie claims she immediately had the vehicle inspected by a competing body shop and was told much of the invoiced repair work had not been completed. That same day, she initiated a “stop payment” on the check with her bank. The stop payment form noted, “Business hide car for seven months, check to get car.” Bjerklie admitted issuing the check in order to get the car and placing the stop payment.

[¶ 3] After Bjerklie was charged, she requested a jury trial. The State moved to exclude “evidence or testimony regarding any and all reference to insurance claims, estimates, or compensation or dispute as to [Bjerklie’s] bill over the amount charged her to repair her vehicle.” The district court granted the motion in limine, stating:

She came to get her car, here is the statement, she didn’t think the amount was correct, or a reasonable value, she had other alternatives. So the motion in limine is going to be granted. The evidence will not delve into other people’s assessments, but will center upon the presentation of a statement as a fair market value for services rendered, whether or not they were paid for, whether or not they were received, and it is that context she got the car back.

Bjerklie entered a conditional guilty plea, which was accepted by the district court. Bjerklie was sentenced to a six-month jail term, suspended for two years.

II

[¶ 4] Rule 11(a)(2), N.D.R.Crim.P, allows a defendant to enter a guilty plea while preserving his or her right to appeal an adverse determination of certain motions, including motions in limine. State v. Winkler, 552 N.W.2d 347, 356 (N.D.1996). A district court’s ruling on a motion in limine is reviewed for abuse of discretion. A court has broad discretion in deciding whether evidence is relevant, and this Court does not reverse a district court’s decision to admit or exclude evidence on the basis of relevance unless the district court abused its discretion by acting in an arbitrary, unreasonable, or unconscionable manner. Rittenour v. Gibson, 2003 ND 14, ¶ 35, 656 N.W.2d 691.

[¶ 5] Here, the district court’s order granting the State’s motion in limine precluded Bjerklie from providing alternative values for the services, such as estimates from her insurance company or competing businesses. The State argues this is consistent with N.D.C.C. § 12.1-23-05(6), which states that in grading theft of services, the amount used

shall be the highest value by any reasonable standard, regardless of the actor’s knowledge of such value, of the property or services which were stolen by the actor, or which the actor believed that the actor was stealing, or which the actor could reasonably have anticipated to have been the property or services involved.

We disagree. Although a jury could find that the amount invoiced by Vince’s was “the highest value by any reasonable standard,” it was error for the district court to remove that determination from the province of the jury and to deprive Bjerklie of the opportunity to prove a lesser amount was the correct value.

[¶ 6] “It is the jury who is the trier of fact in any court proceedings.” State v. Ebach, 1999 ND 5, ¶ 7, 589 N.W.2d 566. Although we have not specifically addressed the application of N.D.C.C. § 12.1-23-05(6) to a case involving theft of services, our holdings in cases of property theft clearly require a jury be permitted to hear competing values for the same services or property stolen. In State v. Lovejoy, this Court affirmed a conviction for theft of property in which the jury heard several possible values for the items stolen and made a “reasonableness” assessment in accordance with N.D.C.C. § 12.1-23-05(6): 464 N.W.2d 386, 388 (N.D.1990). In State v. Ensz, we upheld a district court’s denial of a motion for acquittal on the basis that the assessment of “value” should be a factual determination by the jury. 503 N.W.2d 236, 238 (N.D.1993). This Court concluded in Ebach:

[Section 12.1-23-05(6), N.D.C.C.,] was enacted to provide wide latitude for determining value. The rationale of this statute is that the highest reasonable value is to be used and the reasonableness of valuation is to be measured against any standard fair under the circumstances. We have stated market value is not necessarily the highest value by any reasonable standard. An appropriate measure of the highest value by any reasonable standard may include the original or replacement cost of the stolen property. As a result, the jury may consider several possible values for the property.

1999 ND 5, ¶ 13, 589 N.W.2d 566 (internal citations omitted).

[¶ 7] On the facts of this case, we are unable to conclude that Bjerklie was appropriately prohibited from presenting alternative values for the services. The State asks us to distinguish our prior holdings because this case involved a stopped check rather than an outright theft, or because services, rather than property, were allegedly stolen. The State has not provided us with a sufficient reason to do so, and we see none. At the same time, our holding in this case should not be read to apply to all other theft of services cases. Due to the specific circumstances present here, including an ambiguous limine order and the absence of a trial to flesh out the issues and provide a record of the evidence accepted and rejected, we are uncertain whether this case is appropriately a criminal proceeding or required a civil action to settle disputed underlying contractual issues. See State v. Brakke, 474 N.W.2d 878, 880 (N.D.1991). Nor are we able to address the issue of “value” in theft of services cases, generally, without a full record. Our holding, therefore, should be viewed within the unique circumstances of this case. We reverse and remand for further proceedings consistent with this opinion.

Ill

[¶ 8] The district court abused its discretion in prohibiting Bjerklie from presenting alternative values for the services. We therefore reverse the district court’s judgment and remand, allowing Bjerklie to withdraw her guilty plea.

[¶ 9] DALE V. SANDSTROM, CAROL RONNING KAPSNER, and MARY MUEHLEN MARING, JJ., concur.

GERALD W. VANDE WALLE, C.J., concurs in the result.


author: CROTHERS, Justice. MARING, Justice,

text:
    2006 ND 171
    Bob L. DVORAK, Plaintiff, Appellee and Cross-Appellant v. Kathleen A. DVORAK, Defendant, Appellant and Cross-Appellee.
    No. 20050405.
    Supreme Court of North Dakota.
    July 27, 2006.

      Ronald A. Reichert, Reichert Law Office, Grand Forks, N.D., for plaintiff, ap-pellee and cross-appellant.

      Suzanne M. Schweigert, Smith Bakke Porsborg & Schweigert, Bismarck, N.D., for defendant, appellant and cross-appel-lee.
   CROTHERS, Justice.

[¶ 1] Kathleen Dvorak appeals and Bob Dvorak cross-appeals from a divorce judgment, entered after remand in Dvorak v. Dvorak, 2005 ND 66, 693 N.W.2d 646, in which the district court divided the parties’ marital property and denied her request to relocate with her children from North Dakota to Albuquerque, New Mexico. We dismiss the cross-appeal, affirm the district court’s relocation decision and property distribution, and remand for consideration of attorney’s fees for this appeal.

I

[¶2] Bob and Kathleen Dvorak were married in 1990, after they lived together for two and one-half years on a family farm near Dickinson, which Bob Dvorak brought into their relationship. They had five children during their relationship and marriage. At the time of the March 2004 divorce trial, Bob Dvorak was a 43 year-old self-employed farmer and rancher with a tenth grade education. Kathleen Dvorak was 46 years old and had a general equivalency degree, a dental assistant degree, a two-year business degree, and a degree in massage therapy. When the couple met, Kathleen Dvorak was working full-time at the Social Security Office in Dickinson. After the birth of the couple’s second child in March 1991, Kathleen Dvorak quit her job at the Social Security Office and assumed the primary responsibility of caring for the children.

[¶ 3] In 2002, Kathleen Dvorak was accepted into massage therapy school in Albuquerque and Bob Dvorak signed a document that said she could take their five minor children to New Mexico while she pursued her massage therapy degree. She moved with the children to New Mexico in December 2002. According to Kathleen Dvorak, she intended to move back to North Dakota in August 2003, after she received her massage therapy degree.

[¶ 4] Bob Dvorak sued Kathleen Dvorak for divorce in March 2003, while she was pursuing her degree and living in New Mexico with the children. The district court entered an interim order allowing Kathleen Dvorak to remain in New Mexico with the children during the divorce proceeding. The court subsequently granted the parties a divorce, awarded Kathleen Dvorak custody of the minor children, and granted Bob Dvorak reasonable visitation. The court denied Kathleen Dvorak’s request to relocate with the children to New Mexico and distributed the parties’ marital estate, which the court found had a total net worth of $890,409.92. The court awarded $881,744 worth of property to Bob Dvorak and $8,715.92 to Kathleen Dvorak. The court said the parties had experienced an increase in net worth of $237,097 since their relationship began in 1988, and to make the distribution equitable, the court awarded Kathleen Dvorak an offsetting monetary award of $114,190. The court also ordered Bob Dvorak to pay Kathleen Dvorak spousal support of $1,000 per month for four years and child support of $510 per month.

[¶ 5] In Dvorak, 2005 ND 66, ¶¶ 18-19, 23-24, 693 N.W.2d 646, we concluded the district court failed to properly analyze the factors for determining whether a custodial parent should be allowed to move children out of the state and failed to adequately explain a substantial disparity in the distribution of the parties’ marital property. We said the district court did not set forth its analysis on the four relocation factors from Stout v. Stout, 1997 ND 61, ¶ 32, 560 N.W.2d 903, and Hawkin son v. Hawkinson, 1999 ND 58, ¶¶ 6, 9, 591 N.W.2d 144, and the court discussed only a portion of the first factor relating to the economic benefit of the move. Dvorak, at ¶ 18. We concluded the district court erred in failing to consider each of the four relocation factors. Id. We said the court could have arrived at the same conclusion in denying Kathleen Dvorak’s request to relocate with the children if it had addressed all four of the relocation factors, but we could not say that it would have reached that determination after considering all four factors. Id. at ¶ 19. In reviewing the district court’s property distribution, we said the court did not explain its rationale for using net income amounts and for the substantial disparity in the property award. Id. at ¶ 23. We acknowledged Bob Dvorak’s argument about placing the family farm in financial duress if the district court had awarded any more property to Kathleen Dvorak, but we said the court’s findings did not enunciate the financial hardship to the farm. Id. We remanded to the district court the issues regarding the relocation of the children, the distribution of the parties’ marital property, and the payment of Kathleen Dvorak’s attorney’s fees for that appeal. Id. at ¶ 34.

[¶ 6] On remand, the district court made further findings on the relocation factors and again denied Kathleen Dvorak’s request to relocate with the children to New Mexico. The district court also made further findings on the distribution of the parties’ marital property, and the court ultimately awarded Kathleen Dvorak $6,000 in attorney’s fees for the previous appeal.

II

[¶ 7] Kathleen Dvorak initially claims the district court failed to hold an eviden-tiary hearing on remand. She claims she “informally” requested and was denied an opportunity to present new evidence.

[¶ 8] In Kautzman v. Kautzman, 2000 ND 116, ¶¶ 6-8, 611 N.W.2d 883, we considered a similar claim about the denial of the opportunity to present additional evidence in a case that had been remanded for further proceedings. We said when we reverse and remand for a district court to address an issue or to redetermine a matter, unless otherwise specified, the district court may decide the case based on the evidence already before it or may take additional evidence. Id. at ¶ 7. We said a district court’s decision about hearing additional evidence will be reversed on appeal only if the court abused its discretion. Id.

[¶ 9] In Dvorak, 2005 ND 66, ¶ 34, 693 N.W.2d 646, we did not explicitly require the district court to take additional evidence. On this record, we cannot say the district court abused its discretion in making further findings without hearing additional evidence.

Ill

[¶ 10] Kathleen Dvorak argues the district court clearly erred in denying her request to change the children’s residence to New Mexico. She argues the court did not give due weight to the continuity and stability of the custodial family and to other non-economie factors. She also claims the court clearly erred in giving more credibility to Bob Dvorak’s testimony than to a custody investigator’s testimony.

[¶ 11] A district court’s decision on relocation is a finding of fact, which will not be reversed on appeal unless it is clearly erroneous. See Stout, 1997 ND 61, ¶ 7, 560 N.W.2d 903. A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, although there is some evidence to support the finding, on the entire evidence, we are left with a definite and firm conviction that a mistake has been made. Id. Under the clearly erroneous standard of review, we do not reweigh the evidence or reassess credibility when there is evidence to support a district court’s findings, and we will not reverse a district court’s decision merely because we might have reached a different result. Hentz v. Hentz, 2001 ND 69, ¶ 6, 624 N.W.2d 694. Moreover, a choice between two permissible views of the weight of the evidence is not clearly erroneous. Tishmack v. Tishmack, 2000 ND 103, ¶ 7, 611 N.W.2d 204.

[¶ 12] Section 14-09-07, N.D.C.C., provides, “[a] parent entitled to the custody of a child may not change the residence of the child to another state except upon order of the court or with the consent of the noncustodial parent.” In Stout, 1997 ND 61, ¶ 32, 560 N.W.2d 903, we recognized relocation disputes require that courts try to accommodate the competing interests of the custodial parent who desires to seek a better life for himself or herself and the child in a different geographical area, the child’s interest in maintaining a meaningful relationship with the noncustodial parent, the noncustodial parent’s interest in maintaining a meaningful relationship with the child, and the state’s interest in protecting the best interests of the child. A court’s primary consideration in relocation cases is whether it is in the child’s best interest to move to another state. Oppegard-Gessler v. Gessler, 2004 ND 141, ¶7, 681 N.W.2d 762. The custodial parent has the burden to prove, by a preponderance of the evidence, that the move is in the child’s best interest. Id.

[¶ 13] In Dvorak, 2005 ND 66, ¶ 16, 693 N.W.2d 646 (quoting Oppegard-Gessler, 2004 ND 141, ¶8, 681 N.W.2d 762), we outlined the relevant Stout-Hawkinson factors for evaluating whether a custodial parent should be allowed to move a child to another state:

1. The prospective advantages of the move in improving the custodial parent’s and child’s quality of life,
2. The integrity of the custodial parent’s motive for relocation, considering whether it is to defeat or deter visitation by the noncustodial parent,
3. The integrity of the noncustodial parent’s motives for opposing the move,
4. The potential negative impact on the relationship between the noncustodial parent and the child, including whether there is a realistic opportunity for visitation which can provide an adequate basis for preserving and fostering the noncustodial parent’s relationship with the child if relocation is allowed, and the likelihood that each parent will comply with such alternate visitation.

[¶ 14] Under the first factor, a district court must weigh the advantages of the move “while recognizing the importance of maintaining continuity and stability in the custodial family.” Tibor v. Tibor, 1999 ND 150, ¶ 11, 598 N.W.2d 480 (quoting Hawkinson, 1999 ND 58, ¶ 11, 591 N.W.2d 144). No single factor is dominant, however, and a minor factor in one case may have greater impact in another case. Dvorak, 2005 ND 66, ¶16, 693 N.W.2d 646.

[¶ 15] In the prior appeal, we remanded because the district court only discussed a portion of the first factor relating to the economic benefit of the move without making findings on the other three factors, and we recognized the first factor includes not only the economic advantage of the move, but also the non-economic advantages for enhancing the custodial family’s life. Dvorak, 2005 ND 66, ¶ 18, 693 N.W.2d 646.

[¶ 16] On remand, the district court discussed and analyzed all four relocation factors. The court found Kathleen Dvorak had not sustained her burden of proving there were non-economic advantages to the children living in New Mexico. The court said although the children were involved in activities in New Mexico, they also were involved in a substantial number of activities in North Dakota. The court also questioned Kathleen Dvorak’s credibility and motive on some issues, including visitation and relocation. The court found Kathleen Dvorak had interfered with Bob Dvorak’s visitation, she would not let him talk to the children on the phone without listening to the conversation, she blocked phone calls from him for two weeks, he was unable to contact the children about 500 times while she had caller identification on her telephone, and she failed to inform him about the children’s activities. The court also found evidence of alienation. The court found Kathleen Dvorak’s motive for relocation was to frustrate Bob Dvorak’s visitation, and his motive for opposing the move was a genuine interest in being close to his children and having them involved with him on the farm. The court also found relocation would have a negative impact on Bob Dvorak’s relationship with his children. The court’s decision was based primarily on credibility assessments, including the court’s determination that Kathleen Dvorak’s credibility on visitation and relocation issues was questionable.

[¶ 17] On appeal, Kathleen Dvorak essentially asks this Court to reweigh the relocation factors and the witnesses’ credibility. However, we do not reweigh the evidence or reassess credibility of witnesses, and we will not reverse a district court’s decision merely because we may have reached a different result. Hentz, 2001 ND 69, ¶ 6, 624 N.W.2d 694. As we recognized in the prior appeal, “[t]he district court could have arrived at the same conclusion had it addressed all the relocation factors, but we do not know it would have.” Dvorak, 2005 ND 66, ¶ 19, 693 N.W.2d 646. On remand, the district court followed our instructions from the prior appeal, and on this record, we are not left with a definite and firm conviction that the district court made a mistake in analyzing and weighing the relocation factors. We therefore conclude the court did not clearly err in denying Kathleen Dvorak’s request to relocate with the children to New Mexico.

IV

[¶ 18] Kathleen Dvorak argues the distinct court clearly erred in distributing the parties’ marital property. She argues the court erred in dividing the increase in net worth of the marital property during the marriage. She asserts the court should have started with an equal division of the parties’ net worth and made any adjustments from that figure. She concedes the court made findings for each Ruff-Fischer factor, but she argues the findings still do not support the substantial disparity in the court’s distribution of the property.

[¶ 19] When a divorce is granted, a district court must make an equitable distribution of the parties’ property and debts under N.D.C.C. § 14-05-24(1). Dvorak, 2005 ND 66, ¶20, 693 N.W.2d 646. We review a district court’s determinations regarding the distribution of property as a finding of fact, and we will not reverse unless the court’s findings are clearly erroneous. Dvorak, at ¶ 20. We have said that a property division need not be equal to be equitable, but a substantial disparity must be explained. Amsbaugh v. Amsbaugh, 2004 ND 11, ¶ 23, 673 N.W.2d 601. In distributing marital property, all the assets must be considered to ensure that a division is equitable. Dvorak, at ¶ 21. After a district court has included all the assets in the marital estate, it must consider the Ruff-Fischer guidelines in its distribution of the parties’ assets. Bladow v. Bladow, 2003 ND 123, ¶ 7, 665 N.W.2d 724. A district court is not required to make specific findings on each Ruff-Fisher guideline, but it must specify the rationale for its determination. Bladoiv, at ¶ 7. The Ruff-Fischer guidelines require the district court to consider:

the respective ages of the parties, their earning ability, the duration of the marriage and conduct of the parties during the marriage, their station in life, the circumstances and necessities of each, their health and physical condition, their financial circumstances as shown by the property owned at the time, its value at the time, its income-producing capacity, if any, whether accumulated before or after the marriage, and such other matters as may be material.

Bladow, at ¶ 7.

[¶ 20] In Dvorak, 2005 ND 66, ¶¶22-23, 693 N.W.2d 646, we said the district court did not articulate its reason for using the net income amount and it did not explain the substantial disparity in the property distribution. We therefore remanded to the district court for further findings. Id. at ¶¶ 24-25. We rejected Bob Dvorak’s argument that the farm would be put in financial distress if Kathleen Dvorak was awarded more property, because the district court did not enunciate the financial hardship to the farm in its findings of fact and conclusions of law and we were unable to discern from the findings of fact or the record whether the property distribution was clearly erroneous. Id. at ¶ 24.

[¶ 21] On remand, the district court made findings on each Ruff-Fischer factor. The court found a substantial part of the marital estate was acquired before the marriage and an equal distribution of the property would be inequitable because it would destroy Bob Dvorak’s ability to earn a living and provide necessary support to Kathleen Dvorak and the children. The court explained it has been difficult for Bob Dvorak to earn a living from the farm and ranch operation and his living expenses have come from the equity in the property. The court found the increase in net farm worth during the parties’ relationship and marriage was $223,757. The court’s findings of fact state that Bob Dvorak

owned 1760 acres of land prior to the marriage and acquired 1,640 after the marriage for a total marital estate of 3,400. Real estate has a current value of $269.71 per acre. If that is applied to the property acquired during the marriage, the property would have a current value of $442,324, without the debt. The marital share of the debt for the 1,640 acres would be $176,021. Considering all the factors, findings and transfers, the Court awards total cash of $213,000 to [Kathleen Dvorak], which considers [her] contribution to the martial [sic] estate. Previously the Court awarded her $114,000. This would be an additional $98,981.

[¶ 22] Although the parties dispute the number of acres acquired after they began their relationship, the record generally reflects the land was acquired by trade and gifts between Bob Dvorak and members of his family. Although the exact number of acres acquired during the parties’ relationship and marriage is not clear and varies between the court’s memorandum decision and findings of fact, the findings of fact govern. See Stillwell v. Cincinnati Inc., 336 N.W.2d 618, 620 n. 3 (N.D.1983). The parties’ financial statements reflect the value of the farm and the net increase in value during the parties’ relationship from which the district court decided to award property based on the net increase in value of the operation during the parties’ relationship and marriage. The court began by awarding each party the property and debts in them possession, which resulted in a net award of $881,744 to Bob Dvorak and a net award of $8,715.92 to Kathleen Dvorak. The court again recognized its award created a substantial disparity and said since the time the parties began their relationship in 1988, the increase in net farm worth was $223,757 and the marital estate had increased by $237,097. The court awarded Kathleen Dvorak an offsetting monetary award of $213,000. The court also awarded Kathleen Dvorak an undivided half interest in all minerals owned by the parties. The district court’s explanation for the disparity in its property distribution is sufficient for us to understand the rationale for its determination and follows our directions from the prior appeal. On this record, we are not left with a definite and firm conviction the court made a mistake in its property distribution. We therefore conclude the court’s property distribution is not clearly erroneous.

V

[¶ 23] Kathleen Dvorak argues she is entitled to attorney’s fees for this appeal. Bob Dvorak has not responded to her request for attorney’s fees, and instead he argues he should be awarded his attorney’s fees for this appeal. In her reply brief, Kathleen Dvorak again requests her attorney’s fees for this appeal and also claims she should be awarded $1,000 in sanctions for Bob Dvorak’s failure to cite to the record in his appellate brief.

[¶ 24] We deny Kathleen Dvorak’s request for sanctions. Under N.D.C.C. § 14-05-23, attorney’s fees may be awarded for an appeal in a divorce action. Simburger v. Simburger, 2005 ND 139, ¶¶ 21, 23, 701 N.W.2d 880. In deciding whether to award attorney fees under N.D.C.C. § 14-05-23, a court must balance the parties’ needs and ability to pay and should consider the property owned by each, their relative incomes, whether property is liquid- or fixed assets, and whether the actions of.either party have increased the time spent on the case. Dvorak, 2005 ND 66, ¶ 32, 693 N.W.2d 646. Although a district court and this Court have concurrent jurisdiction to award attorney fees for an appeal in a divorce, we prefer that the district court decide attorney fees for a divorce appeal. Id. at ¶ 33. We therefore remand to the district court to determine whether attorney fees for this appeal are appropriate under N.D.C.C. § 14-05-23.

VI

[¶ 25] Although Bob Dvorak has cross-appealed from the judgment, in his appellate brief he states “that appeal is now moot.” We therefore dismiss his cross-appeal.

VII

[¶ 26] We affirm the district court’s relocation decision and property distribution, and we remand for consideration of attorney fees.

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

MARING, Justice,

concurring in part and dissenting in part.

[¶ 28] I concur in parts I, II, III, and V of the majority opinion and respectfully dissent from part IV. I am of the opinion the district court clearly erred in distributing the parties’ marital property.

[¶ 29] “In reviewing a property distribution, we start with the assumption the property should be divided equally and, while a property division need not be equal to be equitable, the district court must explain any ‘substantial disparity.’ ” Linrud v. Linrud, 552 N.W.2d 342, 345 (N.D.1996). We remanded this case in Dvorak v. Dvorak, 2005 ND 66, 693 N.W.2d 646, with instructions to the district court. The district court in its May 28, 2004, Findings of Fact, Conclusions of Law, and Order for Judgment said:

This creates a substantial disparity. In making the division, the Court has considered the Rujf-Fischer guidelines, specifically, the Court has given weight to when the property ivas accumulated. According to the evidence, the plaintiff had a net worth of $644,647 in 1988, when they started to live together. It is appropriate for the Court to consider all the time the parties have lived together in dividing their marital property. Since 1988, his net worth has increased by $237,097. Thus, for there to be an equitable division, the defendant needs an offsetting monetary award of $114,190.00 to be paid within 90 days from the entry of the judgment.

(Emphasis added.) We held “[t]he district court did not articulate its reason for using the net income amounts, and it did not explain why there was a substantial disparity in the property amounts.” Dvorak, 2005 ND 66, ¶23, 693 N.W.2d 646. We remanded with instructions to the district court to provide further specific findings on the issue and to sufficiently explain the inequitable distribution. Id. at ¶¶ 23-24. However, although on remand the district court considered the Ruff-Fischer guidelines in its Findings of Fact, Conclusions of Law, and Order for Judgment dated September 22, 2005, it again relied heavily on the fact that Bob Dvorak had brought “substantial assets” into the marriage. The district court also again concluded that “[s]ince 1988, [Bob Dvorak’s] net worth has increased by $237,097. Thus, for there to be an equitable division, the defendant needs an offsetting monetary award of $213,000.00 an increase of $98,981.00 ...” Thus, the district court’s reason for not dividing the property more equally did not change from its first decision to its decision on remand.

[¶ 30] The only additional explanation the district court gave for not dividing the property more equally was that “[i]t would be inequitable to divide the assets equally because it would destroy his ability to earn a living and provide the necessary support to Defendant and the children.” However, having made this finding, the district court then found: “As set forth in his testimony, it has been difficult for him to earn a living from this farm/ranch operation, and his living expenses have come from the equity in the property.” This does not indicate a well managed or viable operation. The district court also found that based on his 1999-2003 tax returns, Bob Dvorak has an average self-employment income for child support purposes of $16,413.40 per year. This finding also does not indicate successful operation of the farming enterprise as an economic unit. See Schoenwald v. Schoenwald, 1999 ND 93, ¶ ¶ 22-23, 593 N.W.2d 350 (affirming equal division of property where there was a long-term marriage and the family farm was not an economically viable business and distinguishing cases where there was an economically viable business operation). The district court in this case was not presented with evidence of a farming operation that was a strong thriving source of income for a family with five children.

[¶ 31] I recognize that “we have recognized the importance of preserving the viability of a business operation like a family farm, and the potential for economic hardship if those type of entities are divided.” Gibbon v. Gibbon, 1997 ND 210, ¶ 7, 569 N.W.2d 707. However, at an income of $16,413.40 per year resulting in child support of $510 per month for five children, this family is already in “economic hardship.” It may be time for Bob Dvorak to find another way to earn a living and support his family.

[¶ 32] The district court also found that the total farm assets as of March 16, 2004, amounted to $1,252,026 and that the total farm liabilities amounted to $383,622 for a net worth of $868,404. This is a substantial net marital estate. The parties own 3,400 acres of land with equity of $533,378 ($917,100-$383,622), approximately of which half was purchased during the marriage. That leaves debt free all machinery, vehicles, equipment, crops, livestock and other farm assets which the court found valued at $334,926.00 as of March 16, 2004. With this amount of equity, it is difficult to understand the district court’s logic in concluding it would be inequitable to divide the assets more equally. Our Court has said, “[t]he goal of preserving a business, however, does not call for a windfall for one spouse.” Linrud, 552 N.W.2d at 346. The district court can structure the property division to allow for relative equality by distribution of farm assets to one spouse with an offsetting monetary award to the other spouse or an award to each spouse of assets, such as real estate. Liquidation is another option, although usually one of last resort.

[¶ 33] Preservation of a farming operation that is not generating enough income for Bob Dvorak to support himself let alone his five children is not a reason to refuse to divide more equally the property of the marriage. Bob Dvorak has an obligation to support his family and may need to get a job just like his former wife, Kathleen Dvorak will need to get a job.

[¶ 34] We have recognized that long-term marriages support an equal distribution of property. Schoenwald, 1999 ND 93, ¶ 23, 593 N.W.2d 350; Horner v. Horner, 2004 ND 165, ¶ 12, 686 N.W.2d 131. The parties were married September 8, 1990, and divorced June 10, 2004, resulting in close to a fourteen-year marriage. In addition, they lived together for two and one-half years. We have held it is appropriate for a court to consider the time parties live together when dividing property if they then marry. See Homer, at ¶ 13. These parties had a sixteen and one-half year relationship. They had five children who, at the time of the divorce, ranged in age from fourteen to nine years old. Kathleen Dvorak was awarded custody of the five children. The district court ordered Kathleen Dvorak to return with the children to North Dakota. She has no job and thus no income. The district court found she quit working when the parties’ first child was born and from 1991 to 2003, and she worked outside the home only for ten months in 1999. In the one year preceding the divorce, she earned $1,500 as a massage therapist. She will receive spousal support of $1,000 per month for four years and $510 per month child support for the five children. This provides her an income of $18,120.00 per year until she can find a job. She received no income-producing property in the distribution of the marital property. She received a cash award of $213,000, which Bob Dvorak can pay over two years with interest at our judgment rate; the personal property in her possession, which is listed on the Rule 8.3, N.D.R.Ct., Property and Debt Listing at a value of $1,915; and, one-half of the minerals under Bob Dvorak’s real estate. Kathleen Dvorak was also given the debt in her possession. Kathleen Dvorak will incur expenses relocating to North Dakota. She and the five children have no home. Kathleen Dvorak will undoubtedly need to use her cash property division to support herself and the parties’ five children. See Marschner v. Marschner, 2001 ND 4, ¶ 16, 621 N.W.2d 339 (holding a disadvantaged spouse is not required to deplete her property division in order to live).

[¶ 35] The district court is required under the Ruff-Fischer guidelines to consider the circumstances of the parties financially, including whether they receive any income-producing property. Bladow v. Bladow, 2003 ND 123, ¶ 7, 665 N.W.2d 724. The district court very superficially touches on these factors in its findings, reiterating the evidence presented by the parties on the circumstances and necessities of each and the property. The district court never recognizes that this was a long-term marriage. It also never recognizes the dire financial situation in which it has left Kathleen Dvorak and the parties’ five children.

[¶ 36] Finally, I am at a loss why the “farm assets” aside from the real estate are not part of the division of the marital estate. The award of property to Kathleen Dvorak is based on the district court’s calculation of the increase in the “farm net worth” from 1988 to 2004 of $223,757. I am of the opinion that the livestock, crops, hay and machinery were marital assets that should not have been considered by the district court in calculating what property Bob Dvorak brought into the marriage. A review of the machinery and equipment listed on the Rule 8.3, N.D.R.Ct., Property and Debt Listing indicates a significant amount was purchased after 1988. Also, the property listing indicates the parties owned $99,000 worth of breeding cows, 24 bulls worth $19,200, and 28 bred heifers worth $12,600. The parties also owned hay, straw oats, feed barley, and hard Red Spring Wheat valued at $60,350 at the time of the divorce. Although, it appears that Bob Dvorak brought into the marriage livestock, crops, machinery and equipment, these are the types of assets that are sold and replaced. The income from the sale of livestock and crops is used to provide the family income and to grow the farm operation. These are the types of assets that are difficult to trace and become co-mingled in the parties’ accounts and after acquired property. I am unable to find a list of the machinery and equipment in the record that Bob Dvorak brought into the relationship in 1988. If such were in evidence then it could be compared to the equipment listed on the Rule 8.3, N.D.R.Ct., listing and it could be determined whether any of that equipment or machinery is still in the parties’ possession. Bob Dvorak has not carried his burden of proof in that regard.

[¶ 37] After a review of this record and our case law, I am of the opinion the district court misapplied the Ruff-Fischer guidelines in determining the division of the parties’ property, and I am left with a firm and definite conviction a mistake has been made. I would reverse and remand for the district court to equally divide the marital estate between the parties.

[¶ 38] Mary Muehlen Maring


author: KAPSNER, Justice.

text:
    2006 ND 168
    STATE of North Dakota, Plaintiff and Appellee v. Billie Jo CAMPBELL, Defendant and Appellant. State of North Dakota, Plaintiff and Appellee v. Thomas David Pinks, Defendant and Appellant.
    Nos. 20050326, 20050337, 20050338.
    Supreme Court of North Dakota.
    July 27, 2006.
    Kent M. Morrow (on brief), Bismarck, N.D., for defendant and appellant Billie Jo Campbell.
    Michael R. Hoffman (argued), Bismarck, N.D., for defendant and appellant Thomas David Pinks.
    Ladd R. Erickson (argued), State’s Attorney, Washburn, N.D., for plaintiffs and appellees.
    Robert P. Bennett, Assistant Attorney General, Office of Attorney General, Bismarck, N.D., as an amicus curiae.
   KAPSNER, Justice.

[¶ 1] In these consolidated cases, Thomas Pinks appeals from a judgment of conviction for being in actual physical control of an automobile while under the influence of alcohol or other drugs and possession of marijuana paraphernalia, and Billie Campbell appeals from a judgment of conviction for possession of marijuana and marijuana paraphernalia. Both claim the admission of a state crime laboratory report violated their Sixth Amendment right to confrontation because the report was a testimonial statement under the holding of Crawford v. Washington, 541 U.S. 36, 124 S.Ct. 1354, 158 L.Ed.2d 177 (2004). Since the resolution of this case makes it unnecessary to decide whether the report is a testimonial statement, we determine the prudent course is not to decide an unnecessary question. Because Pinks and Campbell failed to avail themselves of their opportunity to subpoena the author of the state crime laboratory report, they have waived any potential Confrontation Clause violation. We affirm the trial court’s judgments entered on jury verdicts.

I

[¶2] In mid-January 2005, Pinks and Campbell were confronted about being drug users by a barkeep at the Lewis and Clark Saloon in Washburn. A heated dispute ensued. There was testimony that bar glasses were thrown and a chair was broken over the bar. The proprietor of the saloon called the police. Pinks and Campbell left the scene in a Blazer with its rear window frosted over. The police followed and stopped the Blazer but were unable to confirm who was driving the vehicle because of the frosted windows. When the police officers reached the vehicle, they noticed Pinks was in the front passenger seat and Campbell was in the rear seat. The officer asked who had been the driver. Both stated the driver had run away before the officer arrived. The officer stated that was impossible because there was no tracks in the snow and he did not notice anyone leave the vehicle during his pursuit. Pinks explained the driver jumped out while the vehicle was moving and he had to reach over, hit the brakes, put the vehicle in park, and shut off the engine.

[¶ 3] During the stop, one of the officers noticed a pipe in the front part of the vehicle, a pipe of the type the officer knew was typically used to smoke marijuana. The officer determined Pinks must have thrown it there. Pinks and Campbell were arrested and transported to the police station in separate cars. During a search of the backseat of the patrol car that transported Campbell, officers found a bag they believed contained marijuana residue. Other residue believed to be marijuana was found in one of Campbell’s coat pockets. Pinks was charged with being in actual physical control of an automobile while under the influence of alcohol, criminal mischief, and possession of marijuana paraphernalia. Campbell was charged with possession of marijuana and marijuana paraphernalia.

[¶ 4] At trial, the State relied on a certified report from the state crime laboratory. The report stated the evidence seized from Pinks and Campbell was marijuana. Both Pinks and Campbell objected to the introduction of the report into evidence arguing the report violated their constitutional right to confrontation because the forensic scientist who authored the report did not testify. Neither party subpoenaed the author of the report.

[¶ 5] After receiving the report into evidence, a jury convicted Campbell of all charges. Pinks was found guilty for possession of drug paraphernalia and being in actual physical control of a motor vehicle while under the influence of intoxicating liquor or other drugs, and acquitted of the criminal mischief charge. On appeal, both Pinks and Campbell raise the single issue of whether the district court erred in admitting the state crime laboratory report in violation of their constitutional right to confront their accusers.

II

[¶ 6] The Confrontation Clause provides that “[i]n all criminal prosecutions, the accused shall enjoy the right ... to be confronted with the witnesses against him.” U.S. Const, amend. VI. Our standard of review for a claimed violation of a constitutional right, including the right to confront an accuser, is de novo. State v. Blue, 2006 ND 134, ¶ 6, 717 N.W.2d 558. As we recognized in Blue, the United States Supreme Court has redefined the federal right to confrontation. Id. at ¶ 7. In Crawford v. Washington, 541 U.S. 36, 59, 124 S.Ct. 1354, 158 L.Ed.2d 177 (2004), the Supreme Court held the admission of out-of-court testimonial statements in criminal cases is precluded, unless, when the witness is unavailable to testify, the accused has had a prior opportunity to cross-examine the declarant. Without adopting a precise definition for what constitutes a testimonial statement, the court recognized that testimony means a “solemn declaration or affirmation made for the purpose of establishing or proving some fact.” Crawford, 541 U.S. at 51, 124 S.Ct. 1354 (citing definition of testimony from 1 N. Webster, An American Dictionary of the English Language (1828)).

[¶ 7] In Blue, 2006 ND 134, ¶ 9, 717 N.W.2d 558, we noted the Crawford court’s various formulations defining testimonial statements. Testimonial statements could refer to three classes of statements:

ex parte in-court testimony or its functional equivalent, which includes such things as affidavits, custodial examinations, prior testimony that the defendant was unable to cross-examine, or similar pretrial statements that declar-ants would reasonably expect to be used prosecutorially .... out-of-court statements contained in formalized testimonial materials, such as affidavits, depositions, prior testimony, or confessions .... The final class described by the Supreme Court is comprised of testimonial statements made under circumstances which would lead an objective witness reasonably to believe that the statement would be available for use at a later trial.

Id. (citations and quotation marks omitted).

[¶ 8] We also recognized that Davis v. Washington, — U.S.-, 126 S.Ct. 2266, 165 L.Ed.2d 224 (2006) gave further guidance regarding the distinction between testimonial and nontestimonial statements.

Statements are nontestimonial when made in the course of police interrogation under circumstances objectively indicating that the primary purpose of the interrogation is to enable police assistance to meet an ongoing emergency. They are testimonial when the circumstances objectively indicate that there is no such ongoing emergency, and that the primary purpose of the interrogation is to establish or prove past events potentially relevant to later criminal prosecution.

Blue, at ¶ 11 (citing Davis, 126 S.Ct. at 2273-74). We stated that whether an individual was acting as a witness and in essence “testifying” should be determined by looking to the surrounding circumstances of when a report is made, the nature of the report given, the level of formality when making a report, and the purpose of the report. Id. (citing Davis, 126 S.Ct. at 2276-77).

[¶ 9] In this case, the forensic scientist’s report bears testimony in the sense that it is a “solemn declaration or affirmation made for the purpose of establishing or proving some fact.” Crawford, 541 U.S. at 51, 124 S.Ct. 1354 (citing definition of testimony from 1 N. Webster, An American Dictionary of the English Language (1828)). The report was signed by a state forensic scientist in his official capacity, written on letterhead from the attorney general’s office, crime laboratory division, and created for purposes of providing evidence under N.D.C.C. § 19-03.1-37(4). The report was created for the purpose of establishing the content of the residue found in the pipe, bag, and Campbell’s coat pocket, and was the primary evidence offered to establish the seized property contained marijuana. This procedure is authorized by statute.

[¶ 10] Section 19-03.1-37(4), N.D.C.C., provides:

In all prosecutions under this chapter, chapter 19-03.2, or chapter 19-03.4 involving the analysis of a substance or sample thereof, a certified copy of the analytical report signed by the director of the state crime laboratory or the director’s designee must be accepted as prima facie evidence of the results of the analytical findings.

This statute acts as a substitute for the appearance of a witness who would testify: “I am the director of the state crime laboratory or the director’s designee. This substance was analyzed and it was determined to be marijuana.”

[¶ 11] The certified report certainly has indicia of a testimonial statement in light of Crawford and Davis. To date, courts are split as to whether a lab report such as the one at issue here is testimonial. However, because of our resolution of this case, we need not decide that question today because, even assuming the report is testimonial, no Sixth Amendment violation can exist where a defendant voluntarily does not avail himself of the opportunity to confront a witness. City of Las Vegas v. Walsh, 124 P.3d 203, 209 (Nev.2005).

[¶ 12] Section 19-03.1-37(5), N.D.C.C., provides certain procedural safeguards to protect an accused’s confrontational rights:

Notwithstanding any statute or rule to the contrary, a defendant who has been found to be indigent by the court in the criminal proceeding at issue may subpoena the director or an employee of the state crime laboratory to testify at the preliminary hearing and trial of the issue at no cost to the defendant. If the director or an employee of the state crime laboratory is subpoenaed to testify by a defendant who is not indigent and the defendant does not call the witness to establish relevant evidence, the court shall order the defendant to pay costs to the witness as provided in section 31-01-16.

Under this statute, defendants may subpoena the report’s author. The statute also authorizes an indigent defendant to subpoena the director or employee of the state crime laboratory to testify at the preliminary hearing and trial at no cost to the defendant, making that witness available for confrontation.

[¶ 13] There is nothing in this record to suggest the forensic scientist was unavailable. The statute provided Pinks and Campbell with the opportunity to subpoena the forensic scientist. They did not avail themselves of that opportunity. There may have been strategic reasons for not doing so. As a matter of trial tactics, subpoenaing the scientist, unless there are very sound reasons for challenging the report’s accuracy, could elevate the importance of the report to the fact-finder. It is the opportunity to confront that is constitutionally required. This right can be waived. City of Las Vegas v. Walsh, 124 P.3d 203, 208 (Nev.2005) (recognizing Confrontation Clause objections may be waived by failure to comply with statutory procedures). Because neither Pinks nor Campbell attempted to subpoena the forensic scientist as provided by statute, they have waived their ability to complain of a constitutional violation.

Ill

[¶ 14] Because the statute provided the author of the report would be made available by subpoena and Pinks and Campbell failed to avail themselves of that opportunity to confront the witness, they have waived any potential Confrontation Clause violation. We affirm.

[¶ 15] GERALD W. VANDE WALLE, C.J., MARY MUEHLEN MARING, DANIEL J. CROTHERS, and DALE V. SANDSTROM, JJ., concur.

      . See State v. March, No. 27102, 2006 Mo.App. LEXIS 998, *12 n. 4,-S.W.2d-n. 4, (Mo.Ct.App. June 30, 2006) (compiling a list of jurisdictions addressing whether a lab report is testimonial). See, e.g., United States v. Rahamin, 168 Fed.Appx. 512, 520 (3d Cir. 2006) (recognizing that a DEA laboratory report appeared to be a testimonial statement since it was offered to prove the weight and substance of ecstasy pills, but declining to decide the issue); Belvin v. State, 922 So.2d 1046, 1054 (Fla.Dist.Ct.App.2006) (breath test affidavit attesting to technician’s procedures and observations was testimonial and inadmissible under Crawford); Johnson v. State, 929 So.2d 4, 6 (Fla.Dist.Ct.App.2005) ("lab report prepared pursuant to police investigation and admitted to establish an element of a crime is testimonial hearsay even if it is admitted as a business record"); Shiver v. State, 900 So.2d 615, 618 (Fla.Dist.Ct.App.2005) (affidavit prepared prosecutorially in preparation for trial attesting to proper maintenance on breath test machine was testimonial); People v. Lonsby, 268 Mich.App. 375, 707 N.W.2d 610, 620-21 (2005) (information from lab report intimating that substance on defendant’s shorts was semen was testimonial and inadmissible under Crawford); City of Las Vegas v. Walsh, 124 P.3d 203, 207-08 (Nev.2005) (affidavit attesting that proper method of blood testing was followed was testimonial as it was prepared for litigation); State v. Berezansky, 386 N J.Super. 84, 899 A.2d 306 (2006) (laboratory certificate indicating sample of defendant's blood contained a blood-alcohol level of .33% was a testimonial statement because the report was not a record prepared or maintained in the ordinary course of government business, but was prepared in order to prove an element of the crime and offered in lieu of producing the qualified individual who actually performed the test); People v. Rogers, 8 A.D.3d 888, 891, 780 N.Y.S.2d 393 (N.Y.App.Div.2004) (report verifying presence of alcohol in victim’s blood was prepared for prosecution and thus testimonial); State v. Smith, 2006 Ohio 1661, ¶¶ 5, 18 (Ohio Ct.App. 2006) (a laboratory report of a chemical analysis performed on substance determined to be crack cocaine was a testimonial statement, but defendant waived his confrontation rights by failing to demand the testimony of the laboratory technicians under state statute); Commonwealth v. Carter, 861 A.2d 957, 969-70 (Pa.Super.Ct.2004) (without benefit of Crawford, court held that a lab report verifying the presence of cocaine in items seized from defendant was prepared in preparation for litigation and therefore lacked indicia of reliability traditionally found in business records). But see Pruitt v. Alabama, CR-04-2495, 2006 Ala.Crim.App. LEXIS 121, *13, -So.2d-(Ala.Crim.App. June 30, 2006) (certificate of analysis nontestimonial in nature and admissible under business-record hearsay exception); People v. Johnson, 121 Cal.App.4th 1409, 18 Cal.Rptr.3d 230, 233 (2004) (laboratory report of substance determined to be cocaine used at probation revocation hearing "does not 'bear testimony,’ or function as the equivalent of in-court testimony”); People v. Hinojos-Mendoza, No. 03CA0645, 2005 Colo.App. LEXIS 1206, *10, - P.2d - (Colo.Ct.App. July 28, 2005) (laboratory report establishing quantity and nature of cocaine was not testimonial due in part because the report was not prepared at the express direction of the prosecutor for the purpose of litigation); Commonwealth v. Verde, 444 Mass. 279, 827 N.E.2d 701, 705 (2005) (certificates of analysis showing weight of cocaine not considered testimonial statements, as public records they constituted a recognized exception to Confrontation Clause); State v. Dedman, 136 N.M. 561, 102 P.3d 628, 635-36 (2004) (the unavailability of a nurse that drew blood from defendant did not render report documenting results as inadmissible because it was considered non-testimonial as the testing was generated by a Department of Health employee, not law enforcement, and the report was not investigative or prosecutorial); State v. Forte, 360 N.C. 427, 629 S.E.2d 137, 143 (2006) (DNA results that were not prepared exclusively for trial were non-testimonial since “[t]hey do not fall into any of the categories that the Supreme Court defined as unquestionably testimonial”); State v. Huu The Cao, 626 S.E.2d 301, 305 (N.C.Ct.App.2006) (holding "laboratory reports or notes of a laboratory technician prepared for use in a criminal prosecution are nontestimonial business records only when the testing is mechanical, as with the Breathalyzer test, and the information contained in the documents are objective facts not involving opinions or conclusions drawn by the analyst”); In re J.R.L.G., No. 11-05-00002-CV, 2006 WL 1098944, *2, 2006 Tex.App. LEXIS 3344, ⅜6 (Tex.App. April 27, 2006) (urinalysis lab report from screening done under drug screen compliance check was non-testimonial evidence).


text:
    2006 ND 172
    DEACON’S DEVELOPMENT, LLP, a North Dakota limited liability partnership, Plaintiff and Appellee v. Timothy C. LAMB and Elizabeth Fletcher Lamb, Defendants and Appellants.
    No. 20050147.
    Supreme Court of North Dakota.
    July 27, 2006.
    Rehearing Denied Aug. 16, 2006.

      Timothy C. Lamb (argued), pro se, and Elizabeth Fletcher Lamb (appeared), pro se, Grand Forks, N.D., defendants and appellants.
    Gerard D. Neil, Gerard D. Neil, P.C., East Grand Forks, MN, for plaintiff and appellee.
   CROTHERS, Justice.

[¶ 1] Timothy C. Lamb and Elizabeth Fletcher Lamb (“the Lambs”) appeal from a district court judgment awarding Deacon’s Development, LLP, (“Deacon’s”) $1,598.75 in costs and fees and the right to possess certain property occupied by the Lambs in Grand Forks, North Dakota. We affirm in part, reverse in part, and remand, concluding that the district court correctly determined the contract for deed was properly terminated and correctly ordered eviction but that the district court erred in awarding attorney fees.

I

[¶ 2] The Lambs and Deacon’s entered into a six-month contract for deed, dated January 27, 2004, for the Lambs’ purchase of certain property. The contract required the Lambs to pay Deacon’s $800 per month, from February 15, 2004, through July 15, 2004, when the unpaid principal balance, plus accrued interest, was due and payable in full. The Lambs made two payments during the contract period, both overdue.

[¶ 3] Deacon’s served a notice of cancellation of contract for deed on the Lambs on August 18, 2004, at which point the amount due on the contract exceeded $250,000. Despite the contract having matured and all sums under the contract being due and payable, on approximately October 1, 2004, the Lambs tendered a $2,500 check to Deacon’s. Deacon’s returned the check and subsequently served notice of intention to evict in letter form, via first class mail with return receipt. The notice was received by the Lambs no later than March 18, 2005, and required that the Lambs vacate the premises by March 21, 2005. The Lambs refused to vacate and occupied the premises throughout the proceedings.

[¶ 4] The district court found Deacon’s had properly terminated and cancelled the contract for deed and ordered that the Lambs vacate the premises and pay costs, fees, and attorney fees. The Lambs appealed, arguing Deacon’s failed to follow proper procedure in the eviction action, the contract for deed was improperly drafted and enforced, and the award of attorney fees was improper.

II

[¶ 5] The Lambs first claim the notice of intention to evict did not comply with North Dakota law because the notice was in letter form rather than a distinct, clearly labeled legal document and was improperly served. The Lambs’ argument is without merit.

[¶ 6] Section 33-06-02, N.D.C.C., requires the notice of intention to evict be served at least three, and no more than fifteen, days prior to commencement of eviction proceedings. The notice may be served as a summons is served. Id. The record shows Deacon’s notice was timely served in accordance with Rule 4, N.D.R.Civ.P., and contained adequate, clear information notifying the Lambs of the anticipated eviction action. Deacon’s notice stated, “If you have not vacated the premises in its entirety by Monday, March 21, 2005, Deacon’s Development, LLP will immediately proceed with an eviction.” The statute is silent as to the form of the notice, and the Lambs have not directed us to any statute or case establishing a specific format. We therefore conclude there was no violation of N.D.C.C. § 33-06-02 or Rule 4.

III

[¶ 7] The Lambs claim the recording statute requires a contract for deed be recorded before it can be cancelled. This argument misconstrues section 32-18-05, N.D.C.C., which provides:

In all cases of cancellation by notice of any contract for deed which has been recorded in the office of the recorder, the following documents shall also be recorded in that office: a copy of the notice of cancellation served upon the vendee, together with an affidavit of service and an affidavit of the vendor or the vendor’s assigns that the default of the vendee under the terms of the contract was not cured, after the date of service of such notice, within the time periods provided in section 32-18-04.

[¶ 8] Contrary to the Lambs’ argument, section 32-18-05 does not require the contract for deed be recorded before cancellation. Rather, the statute requires that when the contract has been recorded, certain other documents also must be recorded. This statute does not include an obligation to record as a prerequisite to cancellation, and we have not been provided with a compelling reason to impose one. The Lambs’ argument is therefore without merit.

IV

[¶ 9] The Lambs claim that terms of the contract establishing the unpaid principal balance and interest due and payable on July 15, 2004, were unlawful or that this “balloon” payment provision was unlawfully enforced. The Lambs cite Johnson v. Gray, 265 N.W.2d 861 (N.D. 1978), for their argument that Deacon’s improperly accelerated the balance due under the contract for deed. This argument is rejected because the Lambs were in default when they failed to pay the principal and interest balance upon maturity of the contract on July 15, 2004. The Lambs have not cited any authority supporting the argument the parties could not lawfully contract for a balloon payment, nor have we found any. Moreover, in Johnson this Court held “under Chapter 32-18, N.D.C.C., a seller cannot, upon a buyer’s default, accelerate the payments due on a contract for deed and then base a forfeiture on the buyer’s failure to pay the entire accelerated balance.” Johnson, at 863. Unlike in Johnson, here the balance was due at maturity by agreement, and not due to default. We therefore reject the Lambs’ claims that the contract or the cancellation process were flawed.

V

[¶ 10] The Lambs argue the district court’s award of attorney fees in favor of Deacon’s was improper. We agree.

[¶ 11] North Dakota generally applies the “American Rule,” which assumes each party to a lawsuit bears its own attorney fees. Anderson v. Selby, 2005 ND 126, ¶ 17, 700 N.W.2d 696. Therefore, successful litigants are not allowed to recover attorney fees unless authorized by contract or by statute. Id.

[¶ 12] Deacon’s argues the district court’s attorney fee award was statutorily permitted because of the “frivolous, unsubstantiated claims made by the Lambs.” North Dakota law requires that courts in civil actions award costs and fees, including attorney fees, upon finding a claim for relief was frivolous. N.D.C.C. § 28-26-01(2). Frivolous claims are those which have “such a complete absence of actual facts or law that a reasonable person could not have expected that a court would render judgment in his favor.” Peterson v. Zerr, 477 N.W.2d 230, 236 (N.D.1991); N.D.C.C. § 28-26-01(2). An award under N.D.C.C. § 28-26-01(2) is within the discretion of the district court and will only be disturbed on appeal for abuse of that discretion. Negaard v. Negaard, 2005 ND 96, ¶ 23, 696 N.W.2d 498.

[¶ 13] Here, the district court awarded Deacon’s attorney fees because the Lambs took positions prior to litigation that required Deacon’s to initiate judicial proceedings and because the Lambs sought injunctive relief as part of these judicial proceedings. This is evident from the district court’s findings:

As a result of [the Lambs’] unsubstantiated claims, [Deacon’s] had to initiate this eviction action and defend against [the Lambs’] Complaint in their injunction action. [Deacon’s] is entitled to a judgment in its favor for its costs and disbursements, including reasonable attorney fees.

[¶ 14] The Lambs were defendants in this action. They answered the complaint but did not assert claims for relief by way of counterclaim. As part of their answer, the Lambs opposed cancellation of the contract for deed, resisted eviction, and sought “relief from the court under N.D.C.C. § 32-18-06 for injunctive relief in the Plaintiffs action for cancellation of said contract for deed, and such other relief as this Court deems reasonable and just.”

[¶ 15] The district court awarded attorney fees based in part on the Lambs’ “unsubstantiated claims” that required Deacon’s to initiate the eviction action. In this context, the district court was referring to the Lambs’ positions taken in connection with cancellation of the contract for deed and their refusal to vacate the property. Neither of these acts were taken during or as part of judicial proceedings, nor were they affirmative claims in litigation. Section 28-26-01(2), N.D.C.C., permits recovery of attorney fees only for frivolous “claim[s] for relief.” Positions taken prior to litigation are not claims for relief. See N.D.R.Civ.P. 8(a) (“A pleading which sets forth a claim, for relief, whether an original claim, counterclaim, cross-claim, or third-party claim, must contain (i) a short and plain statement of the claim showing that the pleader is entitled to relief, and (ii) a demand for judgment for the relief the pleader seeks.”); N.D.R.Civ.P. 12(b) (“Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, must be asserted in the responsive pleading thereto if one is required.”); and N.D.R.Civ.P. 54(b) (“If more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or if multiple parties are involved.”) (emphasis added).

[¶ 16] Because positions asserted by the Lambs prior to litigation are not “claims for relief,” the district court did not have authority to award attorney fees under N.D.C.C. § 28-26-01(2). That being the case, the district court abused its discretion, see North Dakota Human Rights Coalition v. Bertsch, 2005 ND 98, ¶ 11, 697 N.W.2d 1 (court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner, its decision is not the product of a rational mental process leading to a reasoned decision, or it misinterprets or misapplies the law), and must be reversed.

[¶ 17] The district court also awarded attorney fees in part based on the Lambs’ request for injunctive relief. The term “claim for relief’ is broad. We are not prepared to say as a matter of law that the Lambs’ affirmative request for an injunction did not constitute a claim for relief. We therefore conclude the district court did not abuse its discretion in awarding attorney fees incurred by Deacon’s for that part of the litigation. However, the record does not provide us with sufficient information to ascertain whether, and if so, how much of, the attorney fee award is proper or improper under our ruling. We therefore remand for determination of Deacon’s attorney fees recoverable under N.D.C.C. § 28-26-01(2) in connection with its defense of the Lambs’ claim for an injunction.

VI

[¶ 18] The Lambs urge sanctions are appropriate against Deacon’s for its attempt to supplement the evidentiary record on appeal. Rule 28(f), N.D.R.App. P., requires appropriate references to the appendix, and Rule 30(a)(1) prohibits inclusion in the appendix items outside the record. Here, Deacon’s included in its brief a narrative detailing the relationship between Deacon’s and the Lambs prior to commencement of this litigation without reference to the record. Additionally, these items were outside the scope of the record. When a review of the record does not support statements in a brief, sanctions may be imposed. Van Dyke v. Van Dyke, 538 N.W.2d 197, 203 (N.D.1995).

[¶ 19] Deacon’s seeks costs for the Lambs’ appeal on the basis it is frivolous under Rule 38, N.D.R.App.P. We have stated, “An appeal is frivolous if it is fragrantly groundless, devoid of merit, or demonstrates persistence in the course of litigation which could be seen as evidence of bad faith.” Mitchell v. Preusse, 358 N.W.2d 511, 514 (N.D.1984).

[¶ 20] The Lambs’ appeal is largely groundless, but they have prevailed on part of the attorney fees issue. Therefore, their appeal is not frivolous and sanctions are not appropriate. However, because Deacon’s violated N.D.R.App.P. 28(f), sanctions are appropriate. Deacon’s is denied costs on appeal in accordance with N.D.R.App.P. 13.

VII

[¶ 21] We affirm in part, reverse in part, and remand, concluding that the district court did not err when holding the contract for deed was properly terminated and ordering eviction but that the district court erred in awarding attorney fees.

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


author: MYREN, Circuit Judge. MEIERHENRY, Justice

text:
    2006 SD 62
    MET LIFE AUTO AND HOME INSURANCE COMPANY, Appellant, v. Gregory C. LESTER, Plaintiff and Appellee, and Luke Weter, Defendant.
    No. 23854.
    Supreme Court of South Dakota.
    Considered on Briefs on Feb. 13, 2006.
    Decided July 12, 2006.
    Rehearing Denied Aug. 15, 2006.
    Anthony P. Bolson of Beardsley, Jensen & Von Wald, Rapid City, South Dakota, Attorneys for appellant.
    George Beal of Beal Law Office, Rapid City, South Dakota, Attorneys for plaintiff and appellee Lester.
   MYREN, Circuit Judge.

[¶ 1.] Met Life Auto and Home Insurance Company (Met Life) appeals a judgment that denied subrogation. We reverse.

FACTS

[¶ 2.] On April 20, 2004, Luke Weter (Weter) backed his car into a brick wall owned by Gregory Lester (Lester). Wet-er was insured by USAA Casualty Insurance Company (USAA). Lester had a homeowner’s property insurance policy with Met Life.

[¶ 3.] Lester sought compensation from Weter’s insurer, USAA. While negotiating with USAA, Lester filed a claim with Met Life. Met Life sent an adjuster who estimated that the damage could be repaired for $3,685.18. Met Life subtracted Lester’s $1000 deductible and issued him a check for $2,685.18. On December 20, 2004, Met Life sent a “1st Notice of Claim” to USAA requesting $2,685.18.

[¶ 4.] Lester believed his damages were greater than those paid by Met Life. He filed an action in small claims court against Weter and his insurer, USAA. Weter removed the action to circuit court. After a settlement conference, Weter and USAA agreed to settle Lester’s claim for a total payment of $9,000. Because USAA had received notice of claim for subrogation from Met Life, the settlement was structured to address that subrogation claim. USAA agreed to deposit the amount of the subrogation claim ($2,685.18) with the clerk of courts to be held for distribution as ordered by the court. The remaining $6,314.82 was paid directly to Lester. The circuit court reviewed the settlement agreement and entered a judgment and order approving settlement and deposit with the clerk. This judgment and order specifically required Lester’s attorney to serve notice of the deposit upon Met Life. Lester’s attorney provided that notice and Met Life filed its objections. Met Life asserted that the circuit court did not have jurisdiction over it because it was not a named party, but then requested the court disburse the entire amount of the deposit to it. Lester responded by arguing that the funds had been deposited with the court under SDCL 15-6-67 and SDCL ch 21-43 and suggested that Met Life should move to intervene if it had concerns over not being a named party.

[¶ 5.] On July 11, 2005, Weter was dismissed from the proceeding. Notice of entry of that order was entered on July 13, 2005. No appeal of that order has been filed. Weter is not participating in this appeal.

[¶ 6.] On July 11, 2005, the circuit court conducted a motion hearing in which Lester and Met Life both participated through their attorneys. Met Life’s attorney made the first argument of the day. He squarely addressed the substantive issue of sub-rogation. He did not claim that the court had no jurisdiction over Met Life. In his responsive argument, Lester’s attorney noted that Met Life earlier claimed lack of jurisdiction. The circuit court suggested that the parties agree to the jurisdiction of the court so that the merits could be addressed and the matter resolved. Both parties agreed and no further argument regarding jurisdiction was made to the court.

[¶ 7.] After listening to the positions of both parties, the circuit court ruled from the bench explaining that this Court’s ruling in Westfield Ins. Co. v. Rowe, 2001 SD 87, 631 N.W.2d 175, requires a review of the specific contractual or policy language to determine the intent of the parties. The circuit court concluded that Met Life’s policy language fell short of excluding application of the made whole doctrine. The circuit court noted that Lester’s claim for damage significantly exceeded the amount paid by Met Life. That significant claim was accepted and paid by USAA, Weter’s insurer.

[¶ 8.] Lester submitted a proposed decision. Met Life filed objections. On August 24, 2005, the circuit court signed a decision essentially identical to the proposed decision. On that same day, the circuit court also entered a judgment effectuating the decision. Lester provided Met Life with notice of entry of the judgment on August 25, 2005. Met Life filed a notice of appeal on October 20, 2005.

ISSUE ONE

[¶ 9.] Did the circuit court have personal jurisdiction over Met Life?

[¶ 10.] At the healing on July 11, 2005, the circuit court suggested that the parties agree to submit to the jurisdiction of the court so that the matter could be resolved. Met Life agreed and made no further arguments about lack of jurisdiction until after the court ruled that the $2,685.18 belonged to Lester.

[¶ 11.] The circuit court clearly had subject matter jurisdiction under SDCL 15-6-67 and SDCL ch 21-43. A person may waive a lack of personal jurisdiction by submitting to the jurisdiction of the court and pleading on the merits. In re Estate of Green, 516 N.W.2d 326 (S.D.1994); Union Bond & Mort. Co. v. Brown, 64 S.D. 600, 269 N.W. 474 (1936). That is what occurred during the July 11, 2005, hearing. Met Life will not be heard now to reassert a lack of personal jurisdiction after having agreed to submit to the court’s jurisdiction.

ISSUE TWO

[¶ 12.] Did the circuit court correctly interpret the subrogation language of Met Life’s policy with Lester?

[¶ 13.] The right to subrogation is not new in South Dakota. A half century ago, this Court stated: “It is a well settled rule of law that an insurer is entitled to subrogation, either by contract or in equity for the amount of the indemnity paid.” Parker v. Hardy, 73 S.D. 247, 248, 41 N.W.2d 555, 556 (1950). Though frequently repeated, that sentence is seldom parsed. Subrogation can arise out of two sources. First, the parties can agree to create a contractual right of subrogation. This is commonly done in insurance policies. Second, equity can require the creation of subrogation based upon the circumstances, even without a contractual obligation.

[¶ 14.] In Julson v. Federated Mut. Ins. Co., 1997 SD 43, ¶ 12, 562 N.W.2d 117, 121 this Court implicitly addressed this distinction between equitable subrogation and contractual subrogation with the following language:

Federated’s contract of insurance specifically provides for Federated’s right to subrogation after making full payment to Julsons as required by its contract. It is undisputed that there is no statement in the policy requiring Julsons to be made whole before subrogation may arise or at the time any settlement is made with any third-party tortfeasors. Thus, there is no question of material fact surrounding the policy language, and the terms are construed according to their plain and ordinary meaning. American Family Mut. Ins. Co. v. Elliot, 523 N.W.2d 100, 102-03 (S.D.1994). The plain language of the policy permits Federated to subrogate, file an action, and settle it after making full payment to Julsons.

[¶ 15.] In short, the language of the Jul-son insurance policy created a contractual right to subrogation. The nature of the subrogation was governed by the terms of that policy. There was no need to apply the principles of equitable subrogation.

[¶ 16.] This Court continued that line of analysis in Westfield, 2001 SD 87 at ¶ 15, 631 N.W.2d at 180:

We recognized in Julson v. Federated Mut. Ins. Co., 1997 SD 43, ¶ 12, 562 N.W.2d 117, 121, that subrogation rights may arise independent of the common law “made whole” doctrine. In Julson, the insurance policy specifically provided the right of subrogation, without any requirement that the insured be made whole. Id. Likewise, Westfield’s policy provides:
If we make a payment under this policy and:
a. The person to or for whom payment was made has a right to recover damages from another, we shall be subrogated to that right
b. The person to or for whom payment is made recovers damages from another, that person shall: (1) hold in trust for us the proceeds of the recovery and (2) reimburse us to the extent of our payment.
Rowe can point to no language in the policy or statutory authority which restricts this right of subrogation to instances where the insured has been made whole. Therefore, Westfield is entitled to reimbursement of the $144,660.69 it paid to Rowe.

[¶ 17.] Similarly, subrogation in this case is created and controlled by the language of the insurance policy between Lester and Met Life. 'Met Life’s subrogation clause in Lester’s policy read as follows:

You must do everything you can to preserve your rights of recovery. When we have paid you for your damage or injury, your right to recover from others who caused the damage or injury will belong to us up to the amount we have paid you for the damage or injury, so don’t sign any release without our permission.

[¶ 18.] The circuit court concluded that this language did not create a right to subrogate in Met Life. This Court conducts a de novo review of the interpretation of contractual language. Gloe v. Union Ins. Co., 2005 SD 30, 694 N.W.2d 252; Sawyer v. Farm Mut. Ins. Co., 2000 SD 144, 619 N.W.2d 644. Although the language in Met Life’s policy is less legalistic than that in Westfield, it clearly and unequivocally creates a right to subrogation. As in Westfield, Lester can “point to no language in the policy or statutory authority which restricts this right of subrogation to instances where the insured has been made whole.” 2001 SD 87 at ¶ 15, 631 N.W.2d at 180. The language of Lester’s insurance policy clearly establishes contractual subrogation and controls the nature and terms of that subrogation.

[¶ 19.] This is not a case of equitable subrogation. “A court of equity is not at liberty to disregard the contract of the parties in this respect where deliberately made and clearly expressed, for equity follows the law and will neither make a new contract for the parties nor violate that into which they have freely and advisedly entered.” Heikkila v. Carver, 378 N.W.2d 214, 219 (S.D.1985) (quoting Jesz v. Geigle, 319 N.W.2d 481, 483 (N.D.1982)). The contract requires that Lester reimburse Met Life for the $2,685.18 it advanced to him.

[¶ 20.] Neither party to this action has requested that we reverse our rulings in Julson and Westfield. We are well aware of the public policy arguments advanced in Westfield Insurance Company, Inc. v. Rowe: The South Dakota Supreme Court Rejects the Common Law Made Whole Doctrine on a Property Insurance Subro-gation Claim, 47 SDLRev 316 (2002). Any significant alteration in the law of contractual subrogation as suggested in that article would be within the province of the South Dakota Legislature. The South Dakota Legislature has not done so in the years since Julson and Westfield were decided and that article was published.

[¶ 21.] The circuit court is reversed and directed to enter a judgment requiring Lester to pay $2,685.18 to Met Life.

[¶ 22.] GILBERTSON, Chief Justice and KONENKAMP and ZINTER, Justices, concur.

[II23.] MEIERHENRY, Justice, concurs in part and dissents in part.

[¶ 24.] MYREN, Circuit Judge, for SABERS, Justice, disqualified.

MEIERHENRY, Justice

(concurring in part and dissenting in part).

[¶ 25.] I agree that Met Life waived the issue of personal jurisdiction. I disagree, however, that the circuit court erred when it denied subrogation.

[¶ 26.] As we have stated, “[i]t is a well settled rule of law that an insurer is entitled to subrogation, either by contract or in equity for the amount of the indemnity paid.” Parker v. Hardy, 73 S.D. 247, 248, 41 N.W.2d 555, 556 (1950). Even though subrogation may be provided by contract, the concept of subrogation originated in equity. We have explained, “ ‘[subrogation is an equitable doctrine and depends upon a just resolution of a dispute under a particular set of facts.’ ” Julson v. Federated Mut. Ins. Co., 1997 SD 43, ¶ 8, 562 N.W.2d 117,120 (citation omitted). Therefore, even if an insured’s right of subrogation arises from contract, we cannot ignore the equitable origin of that right.

[¶27.] Because of its origin in equity, subrogation is subject to the principles of equity. As the Nebraska Supreme Court explained:

It is well established that in the absence of an express provision to the contrary, an insurance policy reaffirms the rights of parties relative to subrogation but does not alter the fundamental principles pertaining to subrogation. Therefore, if a contractual right of subrogation is merely the usual equitable right which would have existed in any event in the absence of a contract, equitable principles control subrogation.

Cont’l W. Ins. Co. v. Swartzendruber, 253 Neb. 365, 370, 570 N.W.2d 708, 711 (1997) (citations omitted) (emphasis added). One principle to which subrogation is subject is the “made whole” doctrine, which states that an insured’s right to subrogation arises only when the insured receives compensation for all of the loss it incurred. See id. at 371, 570 N.W.2d at 712 (“Under principles of equity, an insurer is entitled to subrogation only when the insured has received, or would receive, a double payment by virtue of an insured’s recovering payment of all or part of those same damages from the tort-feasor.”). Therefore, a subrogation clause in an insurance contract does not necessarily preclude application of the “made whole” doctrine.

[¶ 28.] Our cases, however, have not recognized these generally accepted principles of equity. See Westfield Ins. Co. v. Rowe, 2001 SD 87, 631 N.W.2d 175; Jul-son, 1997 SD 43, 562 N.W.2d at 117. In fact, a prominent insurance law commentator deemed our decision in Julson “authority to the contrary” of the general rule that an insurer is entitled to subrogation only after an insured has been made whole. 16 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 223:134 (3d ed 2000). Both Westfield and Julson refused to invoke the “made whole” doctrine because no contractual provision required that the insured be made whole before the insurer sought subrogation. For example, the provision at issue in Westfield stated:

“If we make a payment under this policy and:
a. The person to or for whom payment was made has a right to recover damages from another, we shall be subrogat-ed to that right ...
b. The person to or for whom payment is made recovers damages from another, that person shall: (1) hold in trust for us the proceeds of the recovery and (2) reimburse us to the extent of our payment.”

2001 SD 87, ¶ 15, 631 N.W.2d at 180. The Court concluded that because the insured could “point to no language in the policy or statutory authority which restricts this right of subrogation to instances where the insured has been made whole,” subrogation was appropriate. Id.

[¶ 29.] This case, however, presents a situation ripe for application of the “made whole” rule. The contract provision at issue here merely restates the equitable principle of subrogation; it benefits neither the insurer nor the insured. As Met Life stresses, the provision does not condition its right to subrogation on the insureds being made whole. Cf. Julson, 1997 SD 43, ¶ 12, 562 N.W.2d at 121 (“It is undisputed that there is no statement in the policy requiring [insureds] to be made whole before subrogation may arise”). On the other hand, neither does the provision give Met Life’s subrogation right priority over Lester regarding damages recovered from Weter. There is no language requiring payments to be “held in trust,” and there is no language precluding the application of the “made whole” doctrine.

[¶ 30.] Because the contract provision does not unambiguously abrogate the doctrine, the generally accepted, based-in-equity “made whole” doctrine should apply. Therefore, in the absence of an express limitation, the circuit court correctly concluded that the provision “is a little short.” The “made whole” doctrine precludes Met Life from seeking subrogation until Lester has received full compensation for his damages.

[¶ 31.] The “made whole” doctrine is based on the theory that “where the sum recovered by the insured from the tortfea-sor is less than the total loss and thus, either the insured or the insurer must to some extent go unpaid, the loss should be borne by the insurer for that is a risk the insured has paid it to assume.” DeTienne Assocs. Ltd. P’ship. v. Farmers Union Mut. Ins. Co., 266 Mont. 184, 190, 879 P.2d 704, 708 (1994); see also Julson, 1997 SD 43, ¶ 10, 562 N.W.2d at 121 (quoting a New York Court of Appeals case stated that “[t]he [‘made whole’] rule is based upon the nature of the relationship between the insurer and the insured — if the loss of one of the two must go unsatisfied, it should be the insurer who has been paid to assume the risk of loss.”). This logic is especially relevant here, in light of our well-settled rule of liberal construction in favor of the insured. See Culhane v. W. Nat’l. Mut. Ins. Co., 2005 SD 97, ¶ 19, 704 N.W.2d 287, 293. Because the contract is silent regarding the “made whole” doctrine, we should construe it in favor of Lester. The majority’s decision does the opposite.

[¶ 32.] More important, in the absence of a subrogation clause, this Court would undoubtedly allow an insurer to subrogate based on the equitable principles of subro-gation. In the absence of specific language to the contrary, the insured should also be allowed to invoke the equitable principles of subrogation — in this case, the “made whole” doctrine. The principle of fairness inherent in equity should run to both the insurer and the insured.

[¶ 33.] For these reasons, I would affirm the trial court.

      . For a good example of subrogation created by equity, see Application of Mach, 71 S.D. 460, 465, 25 N.W.2d 881, 883 (1947)(”Subro-gation has been defined by this court as the mode which equity adopts to compel the ultimate discharge of the debt by him who, in good conscience, ought to pay it, and to relieve him whom none but the creditor could ask to pay. The right is not dependent upon an agreement, but rests upon principles of natural justice and equity.”) See also, Buhl v. McDowell, 60 S.D. 22, 242 N.W. 638 (1932).