author: MARING, Justice. NEUMANN, Justice, KAPSNER, Justice,

text:
    2001 ND 166
    Darold B. SHIEK, Claimant and Appellant, v. NORTH DAKOTA WORKERS COMPENSATION BUREAU, Appellee, and North Dakota State University, Respondent.
    No. 20010030.
    Supreme Court of North Dakota.
    Oct. 16, 2001.

      Mark G. Schneider, Schneider, Schneider & Phillips, Fargo, ND, for claimant and appellant.
    Andrew L.B. Noah (argued), and Jacqueline S. Anderson, Special Assistant Attorneys General, Nilles, Hansen & Davies, Ltd., Fargo, ND, for appellee.
   MARING, Justice.

[¶ 1] Darold B. Shiek appealed from a judgment affirming a North Dakota Workers’ Compensation Bureau order denying his claim for further disability benefits. We hold, under the 1991 version of N.D.C.C. 65-05-09.3, claimants who become permanently and totally disabled on or before their intended retirement are eligible for disability benefits after that date, subject to applicable offsets. We reverse and remand with directions to award Shiek appropriate benefits.

I

[¶ 2] In July 1991, Shiek injured his right shoulder during the course of his employment at North Dakota State University (“NDSU”). In August 1991, he filed a claim with the Bureau for workers’ compensation benefits, and the Bureau accepted liability for his claim. Shiek had surgery on his right shoulder, did not work from July 31, 1991 through March 2, 1992, and received disability benefits for that time period.

[¶ 3] Shiek returned to work at NDSU in a modified light duty position on March 3, 1992. In August 1992, he filed a separate claim for benefits regarding an injury to his left knee, which he claimed was injured when he hurt his right shoulder in July 1991. The Bureau consolidated Shiek’s knee-injury and shoulder-injury claims. Shiek missed work from August 4, 1992, when Dr. David Humphrey operated on his left knee, through August 16, 1992, and Shiek received disability benefits for that time period.

[¶ 4] When Shiek returned to work at NDSU on August 17, 1992, he submitted a resignation, effective on September 25, 1992, the date of his sixty-second birthday. Shiek worked from August 17, 1992 until August 31, 1992, when Dr. Humphrey told him to not work through September 3, 1992, because of swelling in his knee. Shiek saw Dr. Humphrey again on September 21 and was advised not to work the rest of the week. Shiek did not return to work, and in accordance with his earlier submitted resignation, left his job with NDSU on September 25,1992.

[¶ 5] Shiek received disability benefits for work missed through September 3, 1992, and he sought further disability benefits from the Bureau. The Bureau denied him further benefits, concluding he voluntarily retired from the workforce on September 25, 1992, and he therefore was not entitled to further disability benefits under the retirement presumption in N.D.C.C. 65-05-09.3.

[¶ 6] In Shiek v. North Dakota Workers Comp. Bureau, 1998 ND 139, ¶¶ 1, 26, 582 N.W.2d 639, we reversed the Bureau’s decision and remanded for further proceedings. We concluded the Bureau erred as a matter of law in deciding that whether Shiek was permanently and totally disabled was irrelevant to the application of the retirement presumption in N.D.C.C. 65-05-09.3. Shiek at ¶ 17. We said, once a claimant establishes permanent and total disability by a preponderance of the evidence, the Bureau must prove, without the aid of the presumption in N.D.C.C. 65-05-09.3, the claimant is voluntarily retired from the labor market instead of forced by the disability from the market. Shiek at ¶ 21. Because the Bureau did not decide whether Shiek was permanently and totally disabled, we reversed and remanded for the proper application of the retirement presumption, the admission of any necessary evidence, and the preparation of findings necessary to properly adjudicate Shiek’s claim for benefits. Id. at ¶ 26.

[¶ 7] On remand, the Bureau decided Shiek was permanently and totally disabled as of September 25,1992, but he was not entitled to further disability benefits because he voluntarily withdrew from the labor force when he retired effective September 25, 1992. The trial court affirmed the Bureau’s decision, and Shiek appealed.

II

[¶ 8] On appeal, we review the Bureau’s decision. Shiek, 1998 ND 139, ¶ 9, 582 N.W.2d 639. We affirm the Bureau’s decision unless its findings of fact are not supported by a preponderance of the evidence, its conclusions of law are not supported by its findings of fact, its decision is not supported by its conclusions of law, its decision is not in accordance with the law or violated the claimant’s constitutional rights, or the Bureau’s rules or procedures deprived the claimant of a fair hearing. Id. See N.D.C.C. §§ 28-32-19 and 28-32-21. Our review of the Bureau’s findings of fact is limited to determining whether a reasoning mind reasonably could have concluded the findings were proven by the weight of the evidence from the entire record. Shiek at ¶ 9. Questions of law are fully reviewable on appeal. Hopfauf v. North Dakota Workers Comp. Bureau, 2000 ND 94, ¶7, 610 N.W.2d 60.

III

[¶ 9] Shiek argues the Bureau misapplied the retirement presumption and our previous decision in Shiek. He argues a claimant who is permanently and totally disabled cannot voluntarily retire from work and his subjective intent to retire on September 25, 1992, is irrelevant because the Bureau found he was permanently and totally disabled on that date. He argues the Bureau’s finding he was permanently and totally disabled on September 25, 1992, dictates, as a matter of law, he did not retire from the labor market voluntarily but was forced from the labor market by his permanent and total disability. Shiek argues he was entitled to further disability benefits because he was permanently and totally disabled on and before the date of his intended retirement. Our consideration of Shiek’s arguments requires an examination of our decision in Shiek and the law in effect in 1992.

[¶ 10] In Shiek, 1998 ND 139, ¶ 10, 582 N.W.2d 639, we explained that, under N.D.C.C. § 65-05-08(2), when a claimant reapplied for disability benefits after their discontinuance, those benefits must be reinstated upon a finding the-employee has sustained a significant change in medical condition which results in actual wage loss attributable to the work injury and the employee has not retired or voluntarily withdrawn from the job market as defined in N.D.C.C. 65-05-09.3. 65-05-09.3, N.D.C.C., provides:

An employee who has retired or voluntarily withdrawn from the labor force is presumed retired from the labor market and is ineligible for receipt of disability benefits under this title. The presumption may be rebutted by a preponderance of the evidence that the worker:
1. Is actively seeking employment;
2. Is available for gainful employment;
3. Has not rejected any job offer made by a former employer, or other bona fide job offer by another employer; and
4. Has not provided the employer, upon written request, with written notice of a scheduled retirement date.
The presumption does not apply to any employee who is permanently and totally disabled as defined under this title.

[¶ 11] In Shiek, 1998 ND 139, ¶ 17, 582 N.W.2d 639, we held the Bureau erred, as a matter of law, in ruling that whether Shiek was permanently and totally disabled was irrelevant to application of the retirement presumption under N.D.C.C. § 65-05-09.3. We said the retirement presumption clearly and unambiguously did not apply to an employee who was permanently and totally disabled. Shiek at ¶ 17. We recognized that excluding permanently and totally disabled employees from the retirement presumption was neither absurd nor ludicrous, because “the right of a permanently and totally disabled employee to have disability benefits ‘continue into retirement years is built into the very idea of workmen’s compensation as a self-sufficient social insurance mechanism.’ ” Shiek at ¶ 17 (quoting Gregory v. North Dakota Workers Comp. Bureau, 1998 ND 94, ¶ 18 n. 5, 578 N.W.2d 101).

[¶ 12] In Shiek, 1998 ND 139, ¶¶ 18-26, 582 N.W.2d 639, we also considered both the Bureau’s argument Shiek failed to establish he was permanently and totally disabled and Shiek’s argument the Bureau was not entitled to the benefit of the presumption because it failed to establish the threshold requirement that he was not permanently and totally disabled. We rejected Shiek’s argument the retirement presumption shifted the burden of proof to the Bureau to establish Shiek was not permanently and totally disabled as one of the threshold requirements giving rise to the presumption. Shiek at ¶ 21. We said:

It would be illogical to require a claimant to prove he or she is totally disabled in order to qualify for benefits for temporary total or permanent total disability under N.D.C.C. 65-05-09, rather than partial disability under N.D.C.C. 65-05-10, but not to have to prove total disability for purposes of N.D.C.C. 65-05-09.3 (1993). We conclude once the claimant has established by a preponderance of the evidence that he or she is totally and permanently disabled, the Bureau must prove, without the aid of a presumption, the claimant is retired from the labor market. In other words, if the claimant demonstrates he or she is permanently and totally disabled, the burden shifts to the Bureau to prove the claimant is not permanently and totally disabled or that the claimant retired from the labor market voluntarily, rather than having been forced from that market by the disability, if the Bureau seeks to hold the claimant ineligible for further benefits. The claimant must still establish his or her disability, as any claimant must do, to qualify for benefits.

Shiek at ¶ 21.

[¶ 13] We concluded the Bureau’s finding Shiek voluntarily retired on September 25,1992, in accordance with his long-standing plan to retire was supported by a preponderance of the evidence. Shiek, 1998 ND 139, ¶22, 582 N.W.2d 639. We said, however, that finding did not give rise to the presumption of retirement under N.D.C.C. 65-05-09.3, if Shiek was permanently and totally disabled. Shiek at ¶ 23. We said the Bureau did not make a finding about whether Shiek was permanently and totally disabled, and we declined to imply a finding on the issue or decide it on the record as a matter of law. Id. at ¶¶ 23-24. We, therefore, reversed and remanded to the Bureau for “proper application of the retirement presumption law, the admission of any necessary evidence, and the preparation of findings necessary to properly adjudicate Shiek’s claim for benefits.” Id. at ¶ 26.

[¶ 14] On remand, the Bureau found that, as of September 25, 1992, Shiek was permanently and totally disabled as defined by N.D.C.C. 65 — 01—02(12)(a). The Bureau also determined Shiek voluntarily withdrew from the labor force and retired from the labor market effective September 25,1992, in accordance with his long-standing plans to retire at age 62 and not because of his work-related injury. The Bureau concluded it had met its burden of proving Shiek retired from the labor market voluntarily rather than having been forced from the market by a disability and he was ineligible for further benefits under N.D.C.C. 65-05-08(2).

[¶ 15] Under our workers’ compensation law, a permanently and totally disabled employee generally is entitled to disability benefits “during such disability.” N.D.C.C. 65-05-09 (1991). See N.D.C.C. 65-05-09 (2001) (“during that disability”). The definition of disability is broader than lost wages, it “means loss of earnings capacity and may be permanent total, temporary total, or partial.” N.D.C.C. 65-01-02(12) (1991). See N.D.C.C. 65-01-02(15) (2001). A permanent total disability is permanent in nature and total in character, and is paid to an employee who is not capable of rehabilitation of earnings capacity. N.D.C.C. 65-01-02(12)(a) (1991). See N.D.C.C. 65-01-02(26) (2001). A claimant’s status as a permanently and totally disabled employee depends on the nature of the injury, the degree of physical impairment, age, education, work history, and vocational rehabilitation potential. N.D.C.C. 65-01-02(12)(a) (1991). See N.D.C.C. 65-01-02(26) (2001). In contrast, N.D.C.C. 65-01-02(12)(b) (1991) defined a temporary total disability as total in character but temporary in nature and paid to the employee until maximum medical recovery with work release to any occupation for which the employee is reasonably suited by aptitude, education, experience, or training.

[¶ 16] The applicable statutory scheme contemplates an employee with a temporary total disability can be rehabilitated and returned to the labor market, but an employee with a permanent total disability cannot be rehabilitated and returned to the labor market. The Bureau’s finding under those definitions that Shiek’s disability was permanent in nature and total in character and that he was not capable of rehabilitation of his earnings capacity on September 25, 1992 when he effectuated his intent to retire is supported by a preponderance of evidence. Although in Shiek, 1998 ND 139, ¶ 17, 582 N.W.2d 639, we said the retirement presumption in N.D.C.C. 65-05-09.3 clearly and unambiguously did not apply to a permanently and totally disabled employee, we did not consider the effect of an intended retirement on the benefits of an employee who became permanently and totally disabled before the actual date of retirement.

[¶ 17] The interpretation of a statute is a question of law which is fully viewable by this Court. Shiek, 1998 ND 139, ¶ 16, 582 N.W.2d 639. The primary purpose of statutory construction is to ascertain legislative intent. Id. In ascertaining legislative intent, we look first at the words used in the statutes, and we give those words their ordinary, plain-language meaning. Id. If a statute is clear and unambiguous on its face, we will not disregard the letter of the statute under the pretext of pursuing its spirit, because legislative intent is presumed clear from the face of the statute. E.g., County of Stutsman v. State Historical Soc’y, 371 N.W.2d 321, 325 (N.D.1985). If, however, the language of a statute is ambiguous or of doubtful meaning or if adherence to the strict letter of the statute would lead to an absurd or ludicrous result, a court may resort to extrinsic aids, such as legislative history, to interpret the statute. Id. We construe statutes to avoid absurd and ludicrous results, and if possible, to give meaning to all provisions of a statutory scheme. Id. A statute is ambiguous if it is susceptible to differing, but rational, meanings. Jorgenson v. Agway, Inc., 2001 ND 104, ¶ 5, 627 N.W.2d 391.

[¶ 18] The Legislature enacted the retirement presumption in 1991 N.D. Sess. Laws ch. 714, § 46. Under the law in effect before 1991, a permanently and totally disabled claimant’s disability benefits were subject both to a social security offset under N.D.C.C. 65-05-09.1 if the claimant was eligible for benefits under 42 U.S.C. § 423, and a retirement offset under N.D.C.C. 65-05-09.2 if the claimant was entitled to social security retirement benefits under 42 U.S.C. §§ 402 and 405 and retired on or after July 1, 1989. In Kallhoff v. North Dakota Workers’ Comp. Bureau, 484 N.W.2d 510, 514 (N.D.1992), this Court held the retirement offset applied only if the claimant both qualified for disability benefits and turned 65 on or after July 1, 1989. In Kallhoff at 514, we concluded “[b]ecause Kallhoff was disabled in 1983, he did not ‘retire’ after July 1, 1989.” In arriving at this conclusion, this Court relied on the definition of “retire” found in N.D.C.C. 65-05-09.3. Kallhoff at 514. We reasoned: “[s]o, retirement is linked with the ordinary and commonly understood meaning that retirement is voluntary. However, there is no statutory presumption of retirement for ‘any employee who is permanently and totally disabled as defined in [Title 65].’ ” Id. In essence, our decision in Kallhoff supports the proposition that a claimant who was permanently and totally disabled before July 1, 1989, could not voluntarily retire after that date.

[¶ 19] Before the retirement presumption was enacted in 1991, our workers’ compensation law did not purport to totally preclude or terminate an award of disability benefits to a claimant who reached retirement age or retired or voluntarily withdrew from the labor force. 65-05-09.3, N.D.C.C., was enacted in 1991 N.D. Sess. Laws ch. 714, § 46. Under the 1991 law, the presumption of retirement clearly and unambiguously does not apply to a permanently and totally disabled employee. See Shiek, 1998 ND 139, ¶ 17, 582 N.W.2d 639. The question is whether a permanently and totally disabled employee can subsequently “retire or voluntarily withdraw from the labor force” resulting in ineligibility for further disability benefits.

[¶ 20] The 1991 version of N.D.C.C. 65-05-09.3 could be construed to totally preclude a claimant from receiving permanent total disability benefits if the claimant subsequently retires or voluntarily withdraws from the labor force. By definition, however, a claimant who is permanently and totally disabled is not capable of rehabilitation of earnings capacity and is effectively unable to do any work, and as we reasoned in Kallhoff, 484 N.W.2d at 514, “disabled workers are not subject to the ordinary prerequisite of voluntariness in deciding when they ‘retire.’ ” When harmonized with the definition of permanent total disability and our interpretation of retired in Kallhoff, the 1991 version of N.D.C.C. 65-05-09.3 also could be construed to mean claimants who become permanently and totally disabled before an intended retirement are eligible for disability benefits because they are unable to do any work. Either interpretation is reasonable, and we therefore resort to extrinsic aids to construe N.D.C.C. 65-05-09.3. See N.D.C.C. 1-02-39.

[¶ 21] The relevant legislative history for N.D.C.C. 65-05-09.3 says, in part:

Section 6 is a new section that creates a rebuttable retirement presumption. It specifies that those who have retired or voluntarily withdrawn from the workforce are not eligible for disability benefits unless they are permanently and totally disabled as defined under the act. The worker does have the opportunity to rebut this presumption with evidence that they are actively seeking employment, are available for employment, have not rejected bona fide job offers and have not provided their employer with written notice of a scheduled retirement date.

Hearing on S.B. 2216 Before Senate Judiciary Committee, 52nd N.D. Legis. Sess. (Feb. 4, 1991) (prepared testimony of Pat Mayer, Assistant Claims and Rehabilitation Manager of Workers’ Compensation Bureau).

[¶ 22] The legislative history for the 1991 version of N.D.C.C. 65-05-09.3 says persons “who have retired or voluntarily-withdrawn from the workforce are not eligible for disability benefits unless they are permanently and totally disabled.” A corollary of that statement is claimants who are permanently and totally disabled are eligible for disability benefits even though they subsequently effectuate an intended retirement.

[¶ 23] Other courts have recognized that permanent disability benefits do not terminate on retirement. See Hilyard Drilling Co., Inc. v. Janes, 462 So.2d 942, 943 (Ala.Civ.App.1985); Bailey v. Litunn Corp., 780 P.2d 1007, 1010-11 (Alaska 1989); Franco v. Industrial Comm’n, 130 Ariz. 37, 633 P.2d 446, 449-50 (1981); State Comp. Ins. Auth. v. Industrial Claim Appeals Office, 786 P.2d 423, 425 (Colo.Ct.App.1989); Broum v. City of Wichita, 17 Kan.App.2d 72, 832 P.2d 365, 368-69 (1992); Inland Steel Co. v. Terry, 464 S.W.2d 284, 285 (Ky.1970); Reves v. Kindell’s Mercantile Co., Inc., 793 S.W.2d 917, 922-23 (Mo.Ct.App.1990); Skrukund v. Gallatin Laundry Co., Inc., 171 Mont. 217, 557 P.2d 278, 281-82 (1976); State ex rel. Baker Material Handling Corp. v. Industrial Comm’n, 69 Ohio St.3d 202, 631 N.E.2d 138, 144-49 (1994); Krugen v. Beall Pipe & Tank Corp., 19 Or.App. 922, 529 P.2d 962, 963 (1974).

[¶ 24] In State ex rel. Baker, 631 N.E.2d at 146-47, the Ohio Supreme Court explained that the rationale for not terminating permanent total disability benefits on retirement was those benefits were designed to compensate an injured employee for impairment of earnings capacity and not for actual wages lost. See also Franco, 633 P.2d at 449-50; State Comp. Ins. Auth., 786 P.2d at 425; Brown, 832 P.2d at 368-69; Inland Steel, 464 S.W.2d at 285. Citing Inland Steel, 464 S.W.2d at 285, the Ohio Supreme Court said “[t]he advent of retirement, regardless of how imminent at the time of disability, will not extinguish or limit the claimant’s right to PTD compensation. If an otherwise compensable injury or disease has rendered the claimant unfit for sustained remunerative employment, ‘what he actually intended to do with his time in the future is immaterial, and the acceptance of retirement benefits is irrelevant.’ ” State ex rel. Baker at 147. The court held that if an employee retires before becoming permanently and totally disabled, the employee is precluded from receiving permanent total disability benefits only if the retirement is voluntary and constitutes an abandonment of the entire job market; however, if the employee retires after becoming permanently and totally disabled, the employee is not precluded from receiving permanent total disability benefits regardless of the nature or extent of the retirement. Id. at 148.

[¶ 25] Professor Larson also explains that permanent total disability benefits do not terminate on retirement: 5 Larson’s Workers’ Compensation Law § 93.02[2][f] at p. 93-38 (2001). See also Shiek, 1998 ND 139, ¶ 17, 582 N.W.2d 639; Gregory, 1998 ND 94, ¶ 18 n. 5, 578 N.W.2d 101.

If permanent disability or death benefits become payable, they are not limited to the period of what would have been claimant’s active working life. In other words, if a person becomes totally permanently disabled at age twenty-five, and is awarded benefits for life, they obviously do not stop when he or she is sixty-five, but extend on into the period of what probably would have been retirement. This being so, if a person is permanently and totally disabled at age sixty, it is not correct to say that benefits should be based on the theory that his or her probable future loss of earnings was only five years of earnings. The right to have compensation benefits continue into retirement years is built into the very idea of workers’ compensation as a self-sufficient social insurance mechanism.

[¶ 26] The Workers’ Compensation Act is remedial legislation, and we construe it to afford relief and avoid forfeiture with the view of extending its benefits to all who fairly can be brought within its provisions. Ash v. Traynor, 2000 ND 75, ¶ 8, 609 N.W.2d 96. The 1991 version of our workers’ compensation law does not explicitly terminate or preclude permanent total disability benefits upon retirement, defines disability as loss of earnings capacity, see N.D.C.C. 65-01-02(12) (1991), authorizes permanent total disability benefits during such disability, see N.D.C.C. 65-05-09 (1991), and defines an employee with a permanent total disability as being incapable of rehabilitation of earnings capacity. See N.D.C.C. 65-01-02(12)(a) (1991). When those provisions are harmonized to give meaning to each, we conclude the 1991 version of N.D.C.C. 65-05-09.3 does not preclude an employee from receiving permanent total disability benefits if the employee becomes permanently and totally disabled before the employee’s intended retirement. The statutory requirement of N.D.C.C. 65-05-08(2)(e) that a claimant has not retired or voluntarily withdrawn from the job market as defined in N.D.C.C. 65-05-09.3 in order to reapply successfully for disability benefits is specifically subject to our interpretation of the definition of “retired” in N.D.C.C. 65-05-09.3. Once an employee is totally and permanently disabled, there no longer exists an option to “voluntarily” retire or withdraw from the labor force. See Kallhoff, 484 N.W.2d at 514. However, if an employee manifests an intent to retire on a particular date, in fact retires on that date and then subsequently becomes totally and permanently disabled, the employee could be said to have retired under the definition in N.D.C.C. 65-05-09.3. To the extent our interpretation of the 1991 version of N.D.C.C. 65-05-09.3 may be contrary to language in Shiek, 1998 ND 139, ¶ 21, 582 N.W.2d 639, we decline to apply that language in Shiek to an employee who becomes permanently and totally disabled on or before an intended retirement date. We hold, as a matter of law under the 1991 version of N.D.C.C. 65-05-09.3, an employee who becomes permanently and totally disabled on or before the employee’s intended retirement date has not “retired or voluntarily withdrawn from the labor force.” See Kallhoff, 484 N.W.2d at 514.

[¶ 27] Here, Shiek became permanently and totally disabled on or before his intended retirement on September 25, 1992. We, therefore, conclude the Bureau erred as a matter of law in determining he was not entitled to permanent total disability benefits after September 25, 1992, subject to the appropriate offset.

[¶ 28] We reverse the judgment and remand with directions to award Shiek benefits in accordance with this opinion.

[¶ 29] GERALD W. VANDE WALLE, C.J., concurring.

NEUMANN, Justice,

concurring specially.

[¶ 30] While Justice Maring makes a strong argument that a workers compensation system should never be permitted to find a permanently and totally disabled worker has voluntarily withdrawn from the labor market, I cannot find such a policy reflected in the statutes that apply in this case. I agree with much of what Justice Kapsner has written about the meaning and interpretation of the applicable statutes, but I cannot agree with her final conclusion regarding the Bureau’s findings of fact. I therefore write separately.

[¶ 31] Section 65-05-09.3, N.D.C.C. (1991) says, “An employee who has retired or voluntarily withdrawn from the labor force is presumed retired from the labor market ....’’ (Emphasis added.) Obviously, those two terms, “labor force” and “labor market,” must mean two different things as the legislature has used them in this statute, even though they might appear to be synonymous. Section 65-05-09.3 goes on to say this presumption can be overcome if the worker shows four things which, taken together, are evidence the worker really is trying to find another job. From all this, I understand “withdrawn from the labor force” to mean “not presently working,” and I understand “retired from the labor market” to mean “not interested in working in the future.” Boiled down to its essence, 65-05-09.3 says a claimant who is voluntarily not presently working is presumed to be not interested in working in the future, and therefore is ineligible for disability benefits unless he shows he really is trying to find another job.

[¶ 32] Section 65-05-09.3 then goes on to say, “The presumption does not apply to any employee who is permanently and totally disabled as defined under this title.” The Bureau has now found that Shiek is permanently and totally disabled. The presumption, therefore, does not apply to him. In Shiek v. North Dakota Workers Comp. Bureau, 1998 ND 139, ¶21, 582 N.W.2d 639 (“Shiek I ”), we stated, “once the claimant has established by a preponderance of the evidence that he or she is totally and permanently disabled, the Bureau must prove, without the aid of a presumption, the claimant is retired from the labor market.”

[¶ 33] According to Justice Maring, this statement is incorrect. Justice Maring argues once the claimant has established total and permanent disability, the Bureau doesn’t get a chance to prove anything more. According to Justice Kapsner, not only is the statement correct, but the Bureau in this case has met its burden of proof. With the greatest respect, I must disagree with both of my colleagues.

[¶ 34] Justice Maring, as I have said, finds an admirable policy reflected in the statutes. Unfortunately, I am not convinced, and therefore cannot agree, that the statutes declare the policy she finds articulated there. Justice Kapsner quite correctly, I believe, states at ¶ 47 that “Retirement from a specific job is insufficient to show removal from the labor market because the presumption does not apply.” Without the presumption, retirement or voluntary withdrawal from the labor force does not, standing alone, prove retirement from the labor market. But Justice Kapsner then refers to and relies on the Bureau’s conclusion that Shiek had retired from the labor market, a conclusion the Bureau has based on Shiek’s long-standing plans to retire from this particular job. That, I would argue, is exactly the presumption the legislature has said the Bureau may not use in this case. The Bureau has concluded Shiek has retired from the labor market because the Bureau has found he had withdrawn from the labor force-retired from a specific job. The Bureau has applied the presumption to reach its conclusion. Reviewing the Bureau’s findings I note many references to Shiek’s plans to retire from this specific job. I find none saying Shiek expressed an intent to quit working entirely.

[¶ 35] Perhaps some confusion was caused by paragraph 22 in Shiek I. The first sentence states, “The Bureau’s finding that Shiek voluntarily retired on September 25, 1992, in accordance with his long-standing plan to retire is supported by a preponderance of the evidence.” Shiek I, 1998 ND 139, ¶ 22, 582 N.W.2d 639. As the author of that opinion, I admit that sentence may be somewhat unclear and possibly misleading. It was intended as a reference to Shiek’s retirement from his particular job, the fact that he had “retired or voluntarily withdrawn from the labor force.” It was not a reference to retirement from the labor market, a very important distinction under 65-05-09.3. The first sentence of paragraph 23 should have made the distinction clear by saying, “That finding, however, does not give rise to a presumption of retirement from the labor market under N.D.C.C. 65-05-09.3 (1993) if Shiek is permanently and totally disabled.” Shiek I at ¶ 23. Unfortunately, because of the issue presented in Shiek I, that distinction was obscured when the opinion immediately went on to discuss the lack of a clear finding that Shiek was permanently and totally disabled.

[¶ 36] However, despite any short-lived confusion that may have been caused by paragraph 22, a careful reading of section 65-05-09.3 and of the rest of Shiek I should have made clear that in the case of a permanently and totally disabled worker something more than a long-standing plan to retire from a particular job was necessary to prove the claimant had retired from the labor market. The Bureau’s findings in this case fail to include that something more. I therefore concur in the result reached by Justice Maring.

[¶ 37] William A. Neumann

KAPSNER, Justice,

dissenting.

[¶ 38] I respectfully dissent.

[¶ 39] The majority opinion overlooks the plain language of N.D.C.C. § 65-05-08 (1991) and overstates the holdings of this Court in Kallhoff v. North Dakota Workers’ Comp. Bureau, 484 N.W.2d 510 (N.D.1992) and Shiek v. North Dakota Workers Comp. Bureau, 1998 ND 139, 582 N.W.2d 639 (‘‘Shiek I ”).

[¶ 40] Under the statutory scheme effective in 1992 an injured claimant with a permanent total disability would ordinarily continue to receive benefits past retirement age subject to certain offsets. That, I agree, is the import of the wording in N.D.C.C. § 65-05-09 (1991), requiring weekly compensation “during such disability.”

[¶ 41] But N.D.C.C. § 65-05-09 is clearly and explicitly limited by the provisions of N.D.C.C. § 65-05-08, which states “[i]f the period of total or partial disability is of five consecutive calendar days’ duration or more, compensation must be paid for the period of disability provided that ” certain conditions are met. (Emphasis added). One of those conditions, when disability benefits have been discontinued and the claimant re-applies for benefits, is the “employee has not retired or voluntarily withdrawn from the job market as defined in section 65-05-09.3.”

[¶ 42] Section 65-05-09.3, N.D.C.C. (1991), provides:

An employee who has retired or voluntarily withdrawn from the labor force is presumed retired from the labor market and is ineligible for receipt of disability benefits under this title. The presumption may be rebutted by a preponderance of the evidence that the worker:
1. Is actively seeking employment;
2. Is available for gainful employment;
3. Has not rejected any job offer made by a former employer, or other bona fide job offer by another employer; and
4. Has not provided the employer, upon written request, with written notice of a scheduled retirement date. The presumption does not apply to any employee who is permanently and totally disabled as defined under this title.

[¶ 43] The statute establishes a rebut-table presumption that a worker who has retired from the labor force has also removed himself or herself from the labor market, but does not permit the presumption to be applied to a worker who is permanently and totally disabled.

[¶ 44] Section 65-05-09.3, N.D.C.C., supplied a “clear sense of direction” to this Court in Kallhoff to interpret the word “retire” even though § 65-05-09.3 was enacted after the injury at issue in the case. Kallhoff 484 N.W.2d at 514. The specific issue in Kallhoff was whether N.D.C.C. § 65-05-09.2 applied to Kallhoff. Id. at 512. N.D.C.C. § 65-05-09.2 (1991) offset federal social security retirement benefits against workers’ compensation disability benefits for “workers who retire on or after July 1, 1989.” (Emphasis added). Kallhoff had been permanently and totally disabled and had been continuously receiving benefits since 1983. Kallhoff, at 511. In 1990, when Kallhoff turned sixty-five, the Social Security Administration automatically converted his social security disability benefits into retirement benefits. Id. The Bureau argued such conversion made Kallhoff a person who “retir[ed] on or after July 1,1989.” Id. at 512.

[¶ 45] This Court held the mere application of federal benefits law did not make Kallhoff a person who had “retired” as required by the statute.

So, retirement is linked with the ordinary and commonly understood meaning that retirement is voluntary. However, there is no statutory presumption of retirement for “any employee who is permanently and totally disabled as defined in [Title 65].”

Id. at 514. Kallhoff cannot be read to say a claimant who is permanently and totally disabled cannot voluntarily retire. Rather it stands for the proposition that where a statute requires a voluntary action (such as retirement), the requirement is not satisfied by the automatic operation of law over which a person has no control.

[¶ 46] Kallhoff is consistent with the later holding of this Court in Shiek I, construing N.D.C.C. § 65-05-09.3. This section permits the Bureau to treat a worker who has retired as if that person had removed himself or herself from the labor market, unless the worker introduces sufficient evidence to overcome the presumption. N.D.C.C. § 65-05-09.3. However, the presumption does not apply to a worker who is permanently and totally disabled. Id. The statute itself recognizes, as stated in Kallhoff and repeated by the majority, that “disabled workers are not subject to the ordinary prerequisite of vol-untariness in deciding when they retire.” Kallhoff 484 N.W.2d at 514; majority at ¶ 20. Retirement, standing alone, is insufficient to establish that a person has voluntarily withdrawn from the labor market.

[¶ 47] In Shiek I, we remanded with the following direction in applying N.D.C.C. § 65-05-09.3:

We conclude once the claimant has established by a preponderance of the evidence that he or she is totally and permanently disabled, the Bureau must prove, without the aid of a presumption, the claimant is retired from the labor market. In other words, if the claimant demonstrates he or she is permanently and totally disabled, the burden shifts to the Bureau to prove the claimant is not permanently and totally disabled or that the claimant retired from the labor market voluntarily, rather than having been forced from that market by the disability, if the Bureau seeks to hold the claimant ineligible for further benefits.

Shiek I, 1998 ND 139, ¶21, 582 N.W.2d 639. To qualify for benefits under N.D.C.C. § 65-05-08, a claimant may not have “retired or voluntarily withdrawn from the job market.” Retirement from a specific job is insufficient to show removal from the labor market because the presumption does not apply. This, however, does not exclude the possibility that the worker may have voluntarily withdrawn from the labor market for reasons not arising from the disabled condition.

[¶ 48] Given the explicit language of N.D.C.C. § 65-05-08 and § 65-05-09.3, it is inappropriate for this Court to create a rule of law that says a totally and permanently disabled worker is eligible for disability benefits without regard to whether the worker may have voluntarily withdrawn from the labor market for reasons separate from his injured condition. It would be rare, I would presume, for a worker to have a voluntary withdrawal from the labor market under conditions of total and permanent disability, but this is a question of fact.

[¶ 49] The Bureau found:

The greater weight or preponderance of the evidence has clearly demonstrated that the claimant, Darold Shiek, voluntarily resigned and retired from the labor market effective September 25, 1992, which was the date of his 62nd birthday. This voluntary action was done in accordance with plans that the claimant had made years before to retire upon reaching the age of 62. This decision was not based upon ... his work-related injuries. A preponderance of the evidence has shown, without the aid of the retirement presumption, that the claimant voluntarily retired from the labor market in September of 1992 rather than having been forced from the market by any disability. As such, the claimant is ineligible for further benefits.

[¶ 50] Given the extensive recitation of evidence on which this finding is based, I would not hold that this finding is unsupported by the record. I would affirm.

[¶ 51] DALE V. SANDSTROM, J., concurs.

      . In Shiek, 1998 ND 139, ¶ 11 n. 2, 582 N.W.2d 639, we recognized:
      N.D.C.C. 65-05-09.3 (1993) was amended by the Legislature in 1995 and 1997. The 1995 amendment to the statute applies to persons who retire or become eligible for social security or other retirement benefits after July 31, 1995. See 1995 N.D. Sess. Laws Ch. 623, § 1. The 1997 amendment was declared to be retroactive to August 1, 1995, and was approved as an emergency measure effective March 13, 1997. See N.D. Sess. Laws Ch. 543, §§ 2, 3 and 4. The substance of the 1995 and 1997 amendments is detailed in Gregory v. North Dakota Workers Compensation Bureau, 1998 ND 94, ¶¶ 18-20, 578 N.W.2d 101. Because the parties have not raised any issues about the possible effects of the amendments on Shiek’s claim for benefits, see Gregory, 1998 ND 94, ¶¶ 26-33, 578 N.W.2d 101, we confine ourselves to the pre 1995 version of N.D.C.C. 65-05-09.3.

      . During the 1991 legislative process, S.B. 2246 was combined with S.B. 2206, which ultimately became the retirement presumption in 1991 N.D. Sess. Laws ch. 714, § 46.

      . Section 65-05-09.2, N.D.C.C., was amended in 1993 to provide:
      This section applies to an employee who becomes entitled to and receives social security retirement benefits after June 30, 1989, or who receives social security retirement benefits that have been converted from social security disability benefits by the social security administration after June 30, 1989.


source: Caselaw Access Project

author: NEUMANN, Justice.

license: Public Domain

text:
    2001 ND 169
    Dennis M. SCHMIDT, Appellant, v. WARD COUNTY SOCIAL SERVICES BOARD and North Dakota Department of Human Services, Appellees.
    Nos. 20010113, 20010114.
    Supreme Court of North Dakota.
    Oct. 16, 2001.

      Richard R. LeMay, Legal Assistance of N.D., Minot, ND, for appellant.
    Jean R. Mullen, Assistant Attorney General, Bismarck, ND, for appellees.
   NEUMANN, Justice.

[¶ 1] Dennis M. Schmidt appeals from a judgment affirming Department of Human Services’ decisions denying his household medicaid and food stamp benefits because funds in a conservatorship established for his seven-year-old son, Bo, were available assets which exceeded the eligibility requirements for either program. We hold Schmidt failed to establish the conservatorship funds were not available assets for purposes of medicaid and food stamp eligibility, and we affirm.

I

[¶ 2] Schmidt and Bo’s mother were divorced. When Bo’s mother died, Bo received about $25,000 as a beneficiary under her insurance policy and he began living with Schmidt. Schmidt applied to the court to establish a conservatorship for the insurance proceeds. In September 1999, the appointing court established a conservatorship for the insurance proceeds and named Schmidt the conservator. The letters of conservatorship state that, unless otherwise ordered by the appointing court, the conservator shall disburse the conser-vatorship funds to Bo at age 23, or sooner under a schedule requiring disbursement of one-fourth of the funds when Bo graduates from high school and enrolls in college, one-third of the remaining funds when he enrolls in his second year of college, one-half of the remaining funds when he enrolls in his third year of college, and the balance when he enrolls in- his fourth year of college.

[¶ 3] When the appointing court established the conservatorship, Bo was receiving medicaid benefits as a dependent child who was deprived due to his mother’s death, and Schmidt was included in the medicaid unit. Schmidt and Bo were also receiving food stamps. In March 2000, Ward County completed recertification of the household’s eligibility for medicaid and food stamp benefits. Ward County notified Schmidt it was terminating the household’s medicaid and food stamp benefits because the household’s available assets, including the conservatorship funds, exceeded the eligibility requirements for either program.

[¶ 4] Schmidt appealed to the Department. After an evidentiary hearing, an administrative law judge (“ALJ”) recommended affirming Ward County’s decisions to terminate the household’s medicaid and food stamp benefits. The Department adopted the ALJ’s recommendations, and the district court affirmed the Department’s decisions.

II

[¶ 5] Under N.D.C.C. §§ 28-32-19 and 28-32-21, we affirm an administrative agency’s decision if its findings of fact are supported by a preponderance of the evidence, its conclusions of law are supported by its findings of fact, its decision is supported by its conclusions of law, its decision is in accordance with the law and does not violate the claimant’s constitutional rights, and its rules or procedures have not deprived the claimant of a fair hearing. Eckes v. Richland County Soc. Servs. Bd., 2001 ND 16, ¶ 6, 621 N.W.2d 851. In reviewing an agency’s findings of fact, we do not make independent findings of fact or substitute our judgment for that of the agency, rather we determine only whether a reasoning mind could have reasonably determined the agency’s factual conclusions were supported by the weight of the evidence. Id. An agency’s decision on questions of law is fully reviewable by this Court. Id.

Ill

[¶ 6] We initially consider the Department’s decision to deny the household medicaid benefits. The Medicaid program was enacted in 1965 as Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq., and is a cooperative federal-state program designed to provide medical care to needy persons. See Kryzsko v. Ramsey County Soc. Seros., 2000 ND 43, ¶ 6, 607 N.W.2d 237; Wahl v. Morton County Soc. Servs. Bd., 1998 ND 48, ¶ 10, 574 N.W.2d 859; Allen v. Wessman, 542 N.W.2d 748, 752 (N.D.1996). States are not required to participate in the Medicaid program, but if a state elects to participate, the federal government shares the cost of the program if the state’s plan complies with the requirements of federal law. Wahl at ¶ 10. North Dakota has elected to participate in the Medicaid program and has designated the Department to implement it. N.D.C.C. § 50-24.1-01.1. Under the authority conferred by N.D.C.C. § 50-24.1-04, the Department has adopted rules for determining medicaid eligibility. See N.D. Admin. Code ch. 75-02-02.1.

[¶ 7] Schmidt argues the Department erred in deciding Bo’s conservatorship funds were an available asset for purposes of determining the household’s medicaid eligibility. In denying the household medicaid benefits, the Department found the conservatorship was a legal device similar to a revocable trust; Bo was considered to have established the conserva-torship with his assets; Schmidt could petition the appointing court to amend the conservatorship and to direct distribution of the conservatorship funds at any time; the appointing court could remove the limitations on the conservatorship and direct distribution of the funds at any time; the conservatorship funds were available to Bo for determining his medicaid eligibility; Bo was not eligible for medicaid benefits because his available assets exceeded the $6,000 limit allowed for a two-person medicaid unit; Schmidt’s eligibility for medicaid benefits arose solely because Bo lived with Schmidt and Bo was a dependent child who was deprived due to his mother’s death; Schmidt did not claim any independent basis for medicaid eligibility; and Schmidt was not eligible for medicaid benefits.

[¶ 8] Schmidt argues the Department’s decision effectively makes Bo responsible for supporting his father. Schmidt argues he is obligated to support Bo and Bo is not required to support him. However, Schmidt does not claim he is separately eligible for medicaid benefits, and his claim arises solely because Bo lived with Schmidt as part of a two-person medicaid unit and Bo was eligible for medicaid benefits as a dependent child who was deprived due to his mother’s death. See N.D. Admin. Code § 75-02-01.2-14. Thus, the household’s eligibility for medicaid benefits requires consideration of Bo’s eligibility for benefits.

[¶ 9] An applicant or guardian of an applicant for medicaid benefits must prove eligibility. N.D. Admin. Code § 75-02-02.1-02.1; Wahl, 1998 ND 48, ¶ 16, 574 N.W.2d 859; Allen, 542 N.W.2d at 752. An applicant without sufficient assets to meet the costs of necessary medical care and services generally is eligible for medicaid benefits. See N.D.C.C. § 50-24.1-02. An applicant is eligible for medicaid benefits if the total value of the medicaid unit’s available assets do not exceed $6,000 for a two-person unit. N.D. Admin. Code § 75-02-02.1-26(2). Assets are “any kind of property or property interest, whether real, personal, or mixed, whether liquid or illiquid, and whether or not presently vested with possessory rights.” N.D. Admin. Code § 75-02-02.1-01(3). Generally, all assets must be considered in determining medicaid eligibility. N.D. Admin. Code § 75-02-02.1-25(1). However, certain assets are exempt from consideration and certain types of property interests are ex-chided. See N.D. Admin. Code §§ 75-02-02.1-25 through 75-02-02.1-28.

[¶ 10] Property held in a trust is considered an asset to the extent the property is actually available to a medicaid applicant or recipient. See N.D. Admin. Code §§ 75-02-02.1-25, 75-02-02.1-31 and 75-02-02.1-31.1. Under medicaid law, an individual is considered to have established a trust if the individual’s assets are used to form all or part of the corpus of the trust and if the trust is established by “a court ... with legal authority to act in place of or on behalf of the individual or the individual’s spouse.” N.D. Admin. Code § 75-02-02.1-31.1(2) (a) (3); 42 U.S.C. § 1396p(d)(2)(A)(iii). The rules for trusts apply regardless of the purpose for which the trust is established and whether there are any restrictions on the use of distributions from the trust. N.D. Admin. Code § 75-02-02.1-31.l(2)(c); 42 U.S.C. § 1396p(d)(2)(C). Under medicaid law, a trust includes “any legal instrument or device, whether or not written, which is similar to a trust.” N.D. Admin. Code § 75-02-02.1-31.l(6)(b). See 42 U.S.C. § 1396p(d)(6).

[¶ 11] The property interest at issue in this case is the conservatorship funds. .Chapter 30.1-29, N.D.C.C., deals with conservatorships and is derived from Uniform Probate Code § 5-401 et seq. Chapter 30.1-29, N.D.C.C., offers a system of protective proceedings to provide for management of a minor’s property. See General Editorial Board Comment, Article V of Uniform Probate Code. The relationship between a conservator and the protected minor is a fiduciary relationship similar to the relationship between a trustee and a beneficiary. See 39 Am.Jur.2d Guardian and Ward § 2 (1999). A conservator has the powers of a trustee. N.D.C.C. § 30.1-29-24(1). In exercising a conservator’s powers, the conservator acts as a fiduciary under the standard of care applicable to trustees. N.D.C.C. § 30.1-29-17. Conservators have the status of trustees, and in the management of property, they both have a similar relationship to the appointing court. See General Editorial Board Comment, Article V of Uniform Probate Code. For example, unless the appointing court directs otherwise, a conservator must account annually to the court for administration of the “trust.” N.D.C.C. § 30.1-29-19. The appointment of a conservator vests in the conservator title as “trustee” to all the protected person’s property. N.D.C.C. § 30.1-29-20. Under N.D.C.C. § 30.1-29-16, anyone interested in the welfare of a protected person may petition for an accounting for the administration of the “trust.” These statutory provisions contemplate that a con-servatorship bears many similarities to a trust, and we agree with the Department that a conservatorship is a legal device similar to a trust within the meaning of the applicable law for determining medicaid eligibility.

[¶ 12] Schmidt nevertheless argues the conservatorship funds are not available to the household because legal impediments preclude access to the funds except for Bo’s college education.

[¶ 13] In determining medicaid eligibility, only assets “actually available” to the applicant are considered. N.D. Admin. Code § 75-02-02.1-25(2). Actually available assets are different from those in hand. Post v. Cass County Soc. Servs. Bd., 556 N.W.2d 661, 664 (N.D.1996). Under N.D. Admin. Code § 75-02-02.1-25(2):

Assets are actually available when at the disposal of an applicant, recipient, or responsible relative; when the applicant, recipient, or responsible relative has a legal interest in a liquidated sum and has the legal ability to make the sum available for support, maintenance, or medical care; or when the applicant, recipient, or responsible relative has the lawful power to make the asset available, or to cause the asset to be made available.

[¶ 14] An asset to which an applicant has a legal entitlement is not unavailable simply because the applicant must initiate legal proceedings to access the asset. Post, 556 N.W.2d at 665. In determining whether an asset is actually available, the central issue is the applicant’s “actual and practical ability to make an asset available as a matter of fact, not legal fiction.” Id. at 664. In Post at 665-66, we upheld an administrative determination that past-due property settlement payments owed under a divorce decree were actually available to a disabled applicant who was legally entitled to the payments under the decree and who had successfully sued to enforce the decree in the past.

[¶ 15] We have recognized a minor’s personal injury award should be left intact until the minor becomes an adult, and parents have the primary obligation to support their children. See Dahner v. Dahner, 374 N.W.2d 604, 605 (N.D.1985). However, in Dahner at 606, we said any rule precluding invasion of a minor’s funds is limited by common sense, and in emergency situations or when no other alternative exists, disbursement may be necessary. We have also recognized the Department decides welfare eligibility, and a supervising or appointing court decides the necessity for release of funds held for a minor. See In Interest of McMullen, 470 N.W.2d 196, 201-02 (N.D.1991). Welfare regulations reflect a basic social policy that welfare recipients must use their own available income and resources before shifting the burden for their support to the public. McMullen at 201. In McMullen at 201, we said the Department may consider the availability of a minor’s personal injury settlement in deciding welfare eligibility. The Department’s decision regarding the availability of a settlement and a supervising court’s decision on the necessity of releasing a minor’s funds are two different issues, and in deciding the necessity of releasing a minor’s funds, the supervising court’s decision must be made without regard to the availability of welfare benefits because social policy dedicates welfare benefits to the truly needy. Id. at 201-02.

[¶ 16] Here, at Schmidt’s request, the appointing court established the con-servatorship with Bo’s insurance proceeds, and “unless otherwise ordered by the Court,” authorized Schmidt, the conservator, to disburse the funds to Bo at age 23, or sooner for his college education. Under N.D.C.C. § 30.1-29-16, a conservator may petition the appointing court for instructions regarding the conservator’s fiduciary responsibilities, and any person may petition the court for an order regarding distribution of the estate. The appointing court specifically reserved the power to amend the conservatorship, and the court has not decided Bo’s needs and the necessity to expend funds from the conservator-ship for his support. Under Dahner and McMullen, the appointing court must make that determination without regard to the availability of public assistance benefits. Schmidt did not present evidence to show the appointing court will not exercise its authority to expend funds from the conservatorship for Bo’s medical needs. Under these circumstances, a reasonable person could reasonably conclude Bo’s con-servatorship funds are available to him, and the Department’s decision that the funds are available is supported by a preponderance of the evidence. Schmidt’s claim for medicaid benefits arises solely because Bo lived with Schmidt as part of the two-person medicaid unit and Bo is a dependent child who is deprived due to his mother’s death. See N.D. Admin. Code §§ 75-02-01.2-14 and 75-02-02.1-05(3)(a). The household is not eligible for medicaid benefits because the conservatorship funds are available to Bo and exceed the maximum asset limit of $6,000 allowed for a two-person medicaid unit. We therefore affirm the Department’s decision denying the household medicaid benefits.

IV

[¶ 17] Schmidt argues Bo’s con-servatorship funds are not available for purposes of determining the household’s food stamp eligibility. In denying the household food stamps, the Department found Bo’s assets must be counted toward the asset limits for the entire household; the conservatorship funds were similar to a revocable trust and were not inaccessible because the appointing court had authority to distribute the conservatorship funds at any time for the best interests of Bo and members of his household; Schmidt failed to establish the appointing court would not exercise its authority to distribute funds to provide food for the household; the funds are an available asset in determining the household’s eligibility for food stamps; and Schmidt is not eligible to receive food stamp benefits because the household’s total nonexempt assets, including the conser-vatorship funds, exceed the $2,000 asset limit for a household.

[¶ 18] The food stamp program is a federal program designed to raise nutrition levels among low-income households. See 7 U.S.C. § 2011. The program is administered by county social service boards, see N.D.C.C. § 50.01.02-03(4), and supervised by the Department. See N.D.C.C. § 50-06-05.1(17). Eligibility for food stamps is governed by uniform federal standards. See 7 U.S.C. § 2014(b); 7 C.F.R. § 273.8(a) (2001). For purposes of food stamp eligibility, a household includes parents living with their natural children. 7 U.S.C. § 2012(i); 7 C.F.R. § 273.1(a) (2001). In order for a household to be eligible for food stamps, the maximum allowable resources, including both liquid and nonliquid assets, of all members of the household must not exceed $2,000. 7 C.F.R. § 273.8(b) (2001). See Lyng v. Castillo, 477 U.S. 635, 638-39, 106 S.Ct. 2727, 91 L.Ed.2d 527 (1986) (upholding requirement that food stamp eligibility be determined on a household basis, rather than individual basis). For purposes of determining food stamp eligibility, Bo is considered part of the household and his resources must be counted toward the household’s resource limits.

[¶ 19] In calculating a household’s resources, 7 C.F.R. § 273.8(c) (2001) includes certain liquid and nonliquid resources and any other property not specifically excluded under 7 C.F.R. § 273.8(e) (2001). Under 7 C.F.R. § 273.8(e)(8)® (2001), resources such as an irrevocable trust, which are not accessible to the household during the period of expected food stamp certification are excluded from a household’s resources and are not available to the household for purposes of food stamp eligibility.

[¶ 20] This conservatorship is a legal device similar to a trust. Under N.D.C.C. § 30.1-29-16, the conservator may petition the appointing court for instructions regarding the conservator’s fiduciary responsibilities, and any person may petition the court for an order regarding distribution. The conservatorship is an ongoing proceeding in which the appointing court may order disbursement of the funds at any time. See N.D.C.C. § 30.1-29-16. The appointing court has authority to remove limitations on the conservator and to direct distributions by the conservator. See N.D.C.C. § 30.1-29-16. Here, the appointing court specifically reserved its authority to amend the conservatorship. The court has not decided Bo’s nutritional needs, and Schmidt did not present evidence to show the appointing court will not exercise its authority to expend funds from the conser-vatorship for those needs. See Jackson v. Jackson, 857 F.2d 951, 954-55 (4th Cir.1988) (stating that requirement to petition court to sell property was not substantial legal or practical impediment and property was available for food stamp eligibility). A reasoning mind could reasonably conclude Bo’s conservatorship is similar to a revocable trust during the period of expected food stamp certification and is not inaccessible to the household. The Departments’s decision that the conservatorship funds are an available resource is therefore supported by a preponderance of the evidence. Because the conservatorship funds are considered an available resource, the household exceeded the $2,000 resource limit for purposes of determining food stamp eligibility. We therefore affirm the Department’s decision denying the household food stamps.

V

[¶ 21] We affirm the district court judgment.

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

      . Under N.D. Admin. Code § 75-02-02.1-01(18), medicaid unit "means an individual, a married couple, or a family with children under twenty-one years of age ... whose income and assets are considered in determining eligibility for any member of that unit.” An applicant or recipient who is also a caretaker of children under twenty-one years of age may select the children who will be included in the medicaid unit. N.D. Admin. Code § 75-02-02.1-08.

      . Schmidt argues the Department’s eligibility decision can be no more restrictive than under 1972 law because North Dakota is a § 209(b) state which opted out of applying Supplemental Security Income criteria for medicaid eligibility. See Wahl, 1998 ND 48, ¶¶ 20-26, 574 N.W.2d 859 (explaining § 209(b) status). However, Schmidt has not identified how the conservatorship funds were unavailable under the medicaid law in effect in 1972, and he presented no evidence at the administrative proceeding to establish the household’s eligibility under the law in effect in 1972.


author: KAPSNER, Justice.

text:
    2001 ND 167
    Bonnie TWOGOOD, Plaintiff and Appellant v. Pat WENTZ, Defendant, Douglas N. Ostrom, Mar Jean Selby, and Betty Jaegar, Defendants and Appellees.
    No. 20010106.
    Supreme Court of North Dakota.
    Oct. 16, 2001.

      David D. Schweigert, Bucklin, Klemin & McBride, Bismarck, for plaintiff and appellant.
    Shawnda R. Reid (argued) and Jerry W. Evenson (on brief), Zuger Kirmis & Smith, Bismarck, for defendants and appellees.
   KAPSNER, Justice.

[¶ 1] Bonnie Twogood appeals a summary judgment dismissing her negligence claim against defendants Douglas N. Os-trom, Mar Jean Selby, and Betty Jaegar (collectively, the “landlords”). In addition to granting summary judgment, the trial court assessed costs in the amount of $1300.00 against Twogood. Twogood paid this cost judgment. Because the cost judgment did not go to the merits of the case and was paid under duress, we find the satisfaction of the cost judgment did not waive Twogood’s right to appeal. Finding no duty on the part of the landlords, we affirm the summary judgment.

I

[¶ 2] On July 1, 1998, Twogood entered residential property owned by the landlords in Turtle Lake to perform her duties as a utilities meter reader. The property was rented to a fourth defendant not involved in this appeal, Pat Wentz. While on the property, Twogood was bitten on her lower left leg by a dog owned by Wentz. Twogood brought suit against Wentz and the landlords, alleging negligence in breaching a duty to exercise reasonable care.

[¶ 3] The landlords moved for summary judgment, arguing they did not owe a duty to Twogood to protect her from injuries caused by Wentz’s dog. They filed affidavits with their motion stating they did not know Wentz kept a dog on the property, and Wentz himself filed an affidavit asserting he had not seen, or had any knowledge of, any vicious propensities in the dog. Twogood did not dispute these statements in the affidavits. The trial court granted summary judgment to the landlords, reasoning they were neither aware Wentz kept a dog on the premises nor did they have reason to know of any vicious propensities of the dog. In addition to granting summary judgment, the trial court also assessed costs in the amount of $1300.00 against Twogood.

[¶ 4] In March of 2001 the cost judgment was transferred to Ward County, the county of Twogood’s residence, and an execution was issued to the Ward County Sheriffs Department. On April 4, 2001, Twogood dismissed her case against Wentz following settlement of her claim against him. On April 23, 2001, Twogood satisfied the cost judgment levied against her. On this same day, she appealed the trial court’s summary judgment order.

II

[¶ 5] A party who voluntarily pays a judgment waives the right to appeal from the judgment. Lyon v. Ford Motor Co., 2000 ND 12, ¶ 13, 604 N.W.2d 453. Twogood argues the satisfaction of the $1300.00 cost judgment was paid under duress after the initiation of collection procedures. The landlords argue Twogood was given ample time to take action other than paying the judgment and that the judgment was voluntarily satisfied. While voluntary payment of a judgment waives the right to appeal, “payment of a judgment under coercion or duress is not a waiver of the right to appeal.” Id. at ¶ 14. The question of whether a judgment has been voluntarily paid and satisfied “depends on the facts and circumstances of the particular case,” and “the burden is on the party moving to dismiss the appeal to show the judgment was voluntarily paid and satisfied.” Id. Where the only showing is that the judgment has been paid, “a presumption arises that the payment was voluntarily.” Id.

[¶ 6] We have stated “payment of a judgment under duress imposed by execution is not voluntary.” Dakota Northwestern Bank National Ass’n v. Schollmeyer, 311 N.W.2d 164, 166 (N.D.1981) (discussing Grady v. Hansel, 57 N.D. 722, 223 N.W. 937 (1929)). In Grady, the judgment was paid “to the sheriff armed with an execution and who made return on the execution.” Grady, at 938. Under these circumstances we held payment cannot be said to be voluntary so as to waive the right of appeal. Id. Similarly, in Scholl-meyer we held payment of a judgment is not voluntary when proceeds of a public auction, conducted in accordance with an agreement signed after a special execution had been issued, are used to satisfy the judgment. Schollmeyer, at 166.

[¶ 7] Although not argued by the parties, a separate basis for holding Twogood has not waived her right to appeal is our prior caselaw differentiating between merits and costs of a case. Two-good paid a cost judgment after an execution was issued to the Ward County Sheriffs Department. “[T]he payment of costs which are only incidental to the judgment and do not in any way go to the merits of the case will not defeat the right to appeal.” St. Vincent’s Nursing Home v. Department of Labor, 168 N.W.2d 265, 266 (N.D.1969). A “ ‘judgment consists of two parts, — one on the merits, and the other for the costs. The payment and satisfaction of the latter is no bar to error proceeding to obtain the reversal’ of the former.” Carroll v. Ryan, 79 N.D. 366, 56 N.W.2d 682, 684 (1953) (quoting Woodward v. State ex rel. Thomssen, 58 Neb. 598, 79 N.W. 164, 164 (1899)).

[¶ 8] In Carroll, a dismissal was entered in favor of the defendant and costs were assessed against the plaintiff in the amount of $147.60. Carroll, 56 N.W.2d at 682. The plaintiff moved for a new trial, which the defendant sought to dismiss on the basis of the plaintiff having already paid the costs. Id. at 684. We denied the motion to dismiss, reasoning the principal judgment was for the dismissal of the action, not the assessment of costs, and therefore waiver of the right to appeal the principal judgment had- not occurred. Id. Carroll is similar to the current situation. The $1300.00 paid by Twogood was only an order for costs. The costs assessed in the current case did not go to the merits of the case. See id. Therefore, payment and satisfaction of a cost judgment does not bar a proceeding to reverse a summary judgment on the merits. See St. Vincent’s Nursing Home, 168 N.W.2d at 266.

Ill

[¶ 9] Twogood argues the trial court erred in granting summary judgment for the landlords because they owe her a duty of care to act as a reasonable person in the management of leased property. The landlords argue summary judgment was proper because they do not owe a duty to Twogood since they neither controlled the property nor had knowledge of the presence or vicious propensities of the dog.

[¶ 10] We review this portion of the appeal under our standards for summary judgment, which promptly resolves a controversy on the merits without a trial if the evidence demonstrates the nonexistence of a genuine issue of material fact, or inferences to be drawn from undisputed material facts, and if the evidence shows a party is entitled to judgment as a matter of law. N.D.R.Civ.P. 56(c); Fetch v. Quam, 2001 ND 48, ¶ 8, 623 N.W.2d 357. “Issues of fact may become issues of law if reasonable persons could reach only one conclusion from the facts.” Fetch, at ¶ 8. Even undisputed facts do not justify summary judgment if reasonable differences of opinion exist as to the inferences to be drawn from those facts. Helbling v. Helbling, 267 N.W.2d 559, 561 (N.D.1978).

[¶ 11] Whether a trial judge properly granted summary judgment is a question of law which we review de novo on the entire record. Fetch, 2001 ND 48, ¶ 8, 623 N.W.2d 357. The party seeking summary judgment bears the initial burden of showing no genuine dispute regarding a material fact exists. Id. at ¶ 9. We review the evidence in the light most favorable to the party opposing the summary judgment motion. Id. at ¶ 8. The opposing party, however, may not simply rely on unsupported and conclusory allegations or denials in the pleadings. Instead, the party must set forth specific facts illustrating there is a genuine issue for trial. N.D.R.Civ.P. 56(e). We have held summary judgment should rarely be granted in negligence cases. Helbling, 267 N.W.2d at 561. By their very nature, negligence claims are usually poor subjects for summary judgment. Latendresse v. Latendresse, 294 N.W.2d 742, 748 (N.D.1980).

[¶ 12] To establish her cause of action for negligence, Twogood must show the landlords had a duty to protect her from injury. See Rogstad v. Dakota Gasification Co., 2001 ND 54, ¶ 12, 623 N.W.2d 382. “We have stated negligence consists of a duty on the part of an allegedly negligent party to protect the plaintiff from injury, a failure to discharge the duty, and a resulting injury proximately caused by the breach of the duty.” Id. If a duty on the part of the landlords does not exist, neither does negligence. See id. Generally, whether a defendant owes a plaintiff a duty of care is a preliminary question of law for the court to determine, but if the existence of a duty depends on resolving factual issues, the trier of fact must ascertain the facts. Pechtl v. Conoco, Inc., 1997 ND 161, ¶ 7, 567 N.W.2d 813. Twogood urges this Court to hold the landlords to the standard of a reasonable person who is a landlord.

[¶ 13] Under our premises liability law, a property owner must have control over the property where the injury occurred in order to find the owner owed a duty to an injured party. Doan v. City of Bismarck, 2001 ND 152, ¶ 13, 632 N.W.2d 815. Before a duty of care is owed, “it must be demonstrated the defendant had control of the premises and, therefore, an opportunity to observe any duty.” Stanley v. Turtle Mountain Gas & Oil, Inc., 1997 ND 169, ¶ 9, 567 N.W.2d 345. “Thus, control is an essential prerequisite for imposition of premises liability.” Doan, at ¶ 13. In the current case, Twogood has not set forth any facts illustrating the landlords had control of the property. She argued the landlords exerted a degree of control over the property because the lease agreement required Wentz to pay for all utilities. This however is not indicative of control over a premises. The landlords did not require Wentz to use a certain type of utility, or any utilities at all. Wentz merely had to pay for whatever he decided to use. The landlords did not control Wentz’s utilities consumption.

[¶ 14] Twogood has not alleged the landlords were in physical control of the property. At the time of the summary judgment motion, none of the landlords resided in North Dakota. Ostrom resided in Arizona, Selby in Georgia, and Jaegar in Montana. The lease agreement was entered into by long distance telephone call between Ostrom and Wentz. Selby and Jaegar did not have knowledge of the terms of the lease agreement. Ostrom stated he entered into a verbal rental agreement with Wentz which transferred control and possession to him. Twogood has not disputed any of these statements.

[¶ 15] Property law “regards the lease as equivalent to a sale of the land for the term of the lease. The lessee acquires an estate in the land, and becomes for the time being the owner and occupier, subject to all of the liabilities of one in possession,.... ” Restatement (Second) of Torts § 356 cmt. a (1965). Section 47-16-01, N.D.C.C., defines the leasing of real property as “a contract by which one gives to another the temporary possession and use of real property for reward and the latter agrees to return such possession to the former at a future time.” N.D.C.C. § 47-16-01. Neither party to this appeal has alleged a valid lease did not exist between Wentz and the landlords. Thus, the landlords had transferred possession and control over the property to Wentz.

[¶ 16] While this jurisdiction has not yet dealt with the issue of a landlord’s liability to a third person for injury by a tenant’s dog, decisions from other jurisdictions are persuasive. The California Court of Appeal, when confronted with that question, held “a duty of care arises when the landlord has actual knowledge of the presence of the dangerous animal and when he has the right to remove the animal by retaking possession of the premises.” Uccello v. Laudenslayer, 44 Cal.App.3d 504, 118 Cal.Rptr. 741, 743 (1975).

[¶ 17] In Uccello, Juliana Uccello was playing at a friend’s house when that family’s dog attacked and injured her. Uccello, 118 Cal.Rptr. at 743-44. The dog owners had entered into a month-to-month tenancy with Laudenslayer, the defendant landlord. Id. at 744. The trial court granted Laudenslayer’s motion for a non-suit at the conclusion of Uccello’s opening statement. Id. at 743. The California Court of Appeal ultimately reversed the granting of a nonsuit, but did recognize “a landlord should not be held liable for injuries from conditions over which he has no control.” Id. at 746. That exertion of control, from which a duty of care would flow, could not be present “without proof that [the landlord] knew of the dog and its dangerous propensities.” Id. at 748. The amount of knowledge required to impose liability to a third person was “actual knowledge and not mere constructive knowledge,” but “a landlord is under no duty to inspect the premises for the purpose of discovering the existence of a tenant’s dangerous animal.” Id.

[¶ 18] The Nebraska Supreme Court, in upholding a grant of summary judgment for the defendant landlord, held:

a landlord is liable for injuries caused by the attack of a tenant’s dog only where the landlord has actual knowledge of the dangerous propensities of the dog and where the landlord, having that knowledge, nevertheless leased the premises to the dog’s owner or, by the terms of the lease, had the power to control the harboring of a dog by the tenant and neglected to exercise that power.

McCullough v. Bozarth, 232 Neb. 714, 442 N.W.2d 201, 208 (1989). In Bozarth, the defendant landlords owned a house which they rented to their daughter and her husband. Id. at 203. The tenants had a dog which bit the seven-year-old plaintiff. Id. at 204. The terms of the rental agreement were not clear as to whether the landlord could evict because of the presence of the dog, or as to any rights or obligations beyond the receipt of rent. Id. at 204-05. The dog was purchased after the beginning of the lease period, but the landlord was aware of the presence of the dog on the premises. Id. The grant of summary judgment was upheld because the plaintiff did not dispute either the defendant’s denial of knowledge of dangerous propensities, or allege the defendants had sufficient control over the premises. Id. at 208.

[¶ 19] Similarly, the Indiana Court of Appeals held a plaintiff must demonstrate a landlord retained control over the property and had actual knowledge of the vicious propensities of a tenant’s dog. Goddard v. Weaver, 558 N.E.2d 853, 854 (Ind.Ct.App.1990). In affirming a trial court’s grant of summary judgment, the Indiana appellate court first focused on the landlord’s lack of control over the area where the plaintiff was attacked by the tenant’s dog. Id. The Indiana court wrote “[because [the landlord] did not retain control over the property, he cannot be liable to [the plaintiff] for the injuries she sustained there.” Id. The Indiana Court of Appeals then examined the landlord’s knowledge of the tenant’s dog: “[f]urthermore, even assuming [the landlord] had control over the property, it is clear from the record that he did not have actual knowledge of Lady’s vicious propensities.” Id. The court held “[i]n the absence of actual knowledge of the vicious propensities of a tenant’s dog, a landlord owes no duty to third persons injured by the dog.” Id.

[¶ 20] From these three cases, the general rule is that a landlord is not hable to a third person for an attack by a tenant’s dog unless the landlord had control of the premises and knowledge of the vicious propensities of the dog. See Uccello, 118 Cal.Rptr. at 746-48; Bozarth, 442 N.W.2d at 208; Goddard, 558 N.E.2d at 854. Ostrom, Selby, and Jaegar have denied both control and knowledge, and the record is devoid of any facts to the contrary. Applying the rule to the facts in this case, the trial court correctly determined the landlords owed no duty to Two-good.

IV

[¶ 21] Twogood’s satisfaction of the cost judgment was only after an execution had been filed with the Ward County Sheriffs Department. Under the circumstances of this case, the payment was not voluntary so as to work a waiver of the right to appeal. Furthermore, the judgment was a cost judgment. The costs assessed did not relate to the merits of the case. Therefore, satisfaction of a cost judgment does not bar a proceeding to reverse a summary judgment on the merits of a case.

[¶ 22] Twogood has been unable to set forth any specific facts illustrating the existence of a genuine issue for trial. She has not produced any facts which demonstrate the landlords were in control of the premises, nor has she produced facts which demonstrate the landlords had any knowledge of the dog’s vicious propensities. The trial court did not err in concluding the landlords owed no duty of care to Twogood. We affirm the summary judgment.

[¶ 23] VANDE WALLE, C.J., and MARING, NEUMANN and SANDSTROM, JJ., concur.


author: SANDSTROM, Justice.

text:
    2001 ND 168
    DAKOTA PARTNERS, L.L.P., f/k/a Dakota Partners, Plaintiff and Appellant, v. GLOPAK, INC., Defendant and Appellee, Michael R. Larson and Robert E. Larson, Defendants.
    No. 20010092.
    Supreme Court of North Dakota.
    Oct. 16, 2001.

      Lowell P. Bottrell of Anderson & Bott-rell, Fargo, ND, for plaintiff and appellant.
    Wickham Corwin of Conmy, Feste, Hubbard, Corwin & Brust, Ltd., Fargo, ND, for defendant and appellee.
   SANDSTROM, Justice.

[¶ 1] Dakota Partners appealed from a South Central District Court judgment denying its breach of contract claims. Concluding the offsets clause in the adden-dums to the contract did not stop Glopak from asserting the defense of fraud, we affirm.

I

[¶ 2] Ray Larson and his sons, Michael and Robert Larson (“the Larsons”), contacted Glopak, Inc., in an effort to sell it the intellectual property rights to their “bag and straw” invention. The “bag and straw” allows single-serving beverages in a small pouch to be easily accessed with the enclosed straw. Glopak purchased the intellectual property rights to the “bag and straw” and agreed to make royalty payments to the Larsons.

[¶ 3] The Larsons sought to have the royalty payments accelerated, but Glopak did not consent. Glopak allowed the Lar-sons to sell their royalty payments to a third party. Dakota Partners then entered into two agreements with Glopak and the Larsons (addendum #2 and addendum # 3) through which Dakota Partners would receive royalty payments owed to the Larsons in exchange for cash advances to the Larsons. Addendum #2 provided, in part:

Glopak was requested by Larson on December 4, 1997, and Glopak has agreed, that payments which become due to Larson under Clauses 7c up to a maximum of Forty Thousand U.S. Dollars ($40,000.00 US) shall be paid to Dakota Partners....

Addendum # 2 also provided, “Glopak agrees that it shall not offset any amount due under Clauses 7c and that said amount is absolutely due and owing.” Dakota Partners insisted on including this language.

[¶ 4] Addendum #3 is identical in form, but addressed the royalties due under clause 7b. Addendum # 3 provided, in part:

Glopak was requested by Larson on January 29, 1998, and Glopak has agreed that payments which become due to Larson under clauses 7b up to a maximum of Fifteen Thousand U.S. Dollars ($15,000.00 US) shall be paid to Dakota Partners....

Addendum # 3 included the same “offset” language as addendum # 2.

[¶ 5] Subsequently, Glopak discovered the Larsons were not the rightful owners of the intellectual property rights to the “bag and straw.” Glopak rescinded its agreements with the Larsons and refused to make payments to Dakota Partners. Dakota Partners filed suit against Glopak and the Larsons for breach of contract. The Larsons did not participate in the court proceedings.

[¶ 6] The trial court found Glopak’s consent to the original royalty agreement and subsequent addendums was obtained through the fraudulent representations of the Larsons. The trial court specifically held “the claims asserted by Dakota Partners against Glopak [we]re based on contracts that have been properly rescinded” and were invalid. While both parties agree the Larsons’ actions were fraudulent, the dispute arises from what effect the fraud had on addendums # 2 and # 3.

[¶ 7] The district court had jurisdiction under N.D.C.C. § 27-05-06. This Court has jurisdiction under N.D. Const. Art VI, § 6, and N.D.C.C. § 28-27-01.

II

[¶ 8] “The construction of a written contract to determine its legal effect is a question of law for the court to decide.” Egeland v. Continental Resources, Inc., 2000 ND 169, ¶ 10, 616 N.W.2d 861. We independently examine the contract to determine whether the trial court erred in its interpretation of the contract. Id.

[¶ 9] The resolution of the dispute depends on the effect of the clause: “Glopak agrees that it shall not offset any amount due under Clauses 7c and that said amount is absolutely due and owing.” Glopak argues the “offset” clause is rendered meaningless because of the underlying fraud but if the clause is to be given meaning, it simply prohibits Glopak from reducing the payments due to Dakota Partners by any counterclaims the Larsons may have. Dakota Partners argues the “offset” clause serves as a waiver of defenses and prohibits Glopak from asserting a fraud defense.

III

A

[¶ 10] The effect of fraud on a waiver-of-defense clause is one of first impression in North Dakota. Three jurisdictions have grappled with the effect fraud has on waiver-of-defense clauses. Kentucky and New York appear to follow the same approach, but South Dakota employs a different analysis. In recent years, however, New York has drifted toward the South Dakota approach.

[¶ 11] Dakota Partners relies on an 1892 Kentucky case, Crabtree v. Atchison, for the proposition that a “certificate” acr companying an assignment verifying a debt is a separate instrument not destroyed by fraud. 93 Ky. 338, 20 S.W. 260, 260-61 (1892). Dakota Partners likens the “offset” clause in the addendums to the certificate in the Crabtree case, and contends Glopak’s waiver-of-defense clause was not destroyed by the Larsons’ fraud.

[¶ 12] The continuing validity of Crab-tree is questionable. In 1893, the year after Crabtree was decided, the same appellate court in Kentucky held fraud destroys both the underlying instrument and any waiver-of-defense clauses executed concurrently with the instrument. Hill v. Thixton, 94 Ky. 96, 23 S.W. 947, 949 (1893). The Hill court appears to have viewed the Crabtree court’s discussion of the effect of fraud on waiver-of-defense clauses as dicta because the Crabtree case was ultimately reversed on other grounds. Id.

[¶ 13] New York followed Kentucky in holding when a waiver-of-defense clause is part of an agreement obtained through fraud, the fraud vitiates not only the original agreement, but the waiver-of-defense clause as well. Manhattan Co. v. Monogram Assoc., Inc., 276 A.D. 766, 92 N.Y.S.2d 579, 580-81 (1949). This Court has echoed this general view of the sweeping effect of fraud, but has not analyzed it in the context of waiver-of-defense clauses. Verry v. Murphy, 163 N.W.2d 721, 731 (N.D.1968) (“fraud vitiates and destroys everything into which it enters”).

[¶ 14] Recent New York cases have turned toward analyzing the nature of the waiver-of-defense clause. General Motors Acceptance Corp. v. Morgese, 161 A.D.2d 1019, 557 N.Y.S.2d 590, 591 (1990) (in the “absence of any defense alleging fraud,” a waiver-of-defense clause is effective to es-top a defense of failure of consideration); PGA Marketing, Ltd. v. Windsor Plumbing Supply, Inc., 124 A.D.2d 576, 507 N.Y.S.2d 721, 722 (1986) (a waiver “of the right to assert any defense, offset or counterclaim” would not preclude a defense of fraud).

[¶ 15] South Dakota’s case law developed through a trio of decisions arriving at the same result as the Kentucky and New York cases but reaching it through a more precise theory. South Dakota looks to the language of the waiver to decide whether the defense of fraud has been waived. First, in Bank of Centerville v. Larson, the South Dakota Supreme Court held the clause “there are no offsets or conditions against this note” was sufficient to prevent a defendant from alleging the note was obtained by fraud. 47 S.D. 374, 199 N.W. 46, 47 (1924). Yet, four years later, when faced with exactly the same waiver-of-defense clause, the South Dakota Supreme Court reached the opposite result and held the clause did not preclude the defendant from asserting a fraud defense. Security Holding Co. v. Christensen, 53 S.D. 37, 219 N.W. 949, 951-52 (1928). The contract claim resulted from a scheme similar to that in the current case.

[¶ 16] In Security Holding Co. v. Christensen, neither party denied the instrument in question was obtained through fraud. Id. at 949-50. The Midland Packing Co. induced Christensen to enter into purchase agreements for shares of Midland’s stock. Id. Midland Packing Co., in turn, sold the agreements to a financial institution, Security Holding Co. Id. at 949. Neither Christensen nor Security Holding Co. was aware of the fraud until the latter attempted to collect on the purchase agreements. Id. at 949-50. The instrument in question included this clause: “There are no offsets or conditions against this note.” Id. at 949.

[¶ 17] The South Dakota Supreme Court held the defense of fraud in the procurement of the instrument was “a defense entirely distinct and different from anything in the nature of either offset or conditions against the note.” Id. at 951. The South Dakota Supreme Court explained its contradictory holdings:

The opinion ... in Bank of Centerville v. Larson does not undertake any analysis of the language of the so-called waiver. It simply assumes that the phrase, “there are no offsets or conditions against the note,” must be construed “as sufficient to cut off all defenses and make the instrument impregnable” in the hands of the purchaser, but this assumption is not justified by the language of [the clause]. The statement, “There are no offsets or conditions against this note,” did not justify the assumption that the maker had thereby waived all defenses to the note....

Id. at 952. Further, the South Dakota Supreme Court held the specific defense of fraudulent procurement was not included in the “offset or conditions” waiver. Id.

[¶ 18] The South Dakota Supreme Court affirmed its decision in Security Holding v. Christensen two years later when deciding Security Holding v. Johnson, 57 S.D. 163, 231 N.W. 536 (1930). The South Dakota Supreme Court held that when a note is procured by fraud, the defendant is not automatically estopped from asserting the defense of fraud, even if the note contained a waiver-of-defense clause. Id. at 538.

B

[¶ 19] Following South Dakota, we conclude an analysis of the language of the waiver is necessary. Our goal when reviewing contracts is to give effect to the mutual intention of the parties. N.D.C.C. § 9-07-03; Continental Cas. Co. v. Kinsey, 499 N.W.2d 574, 577 (N.D.1993). To the extent possible, we give effect to every provision of the contract. N.D.C.C. § 9-07-06; Continental Cas. Co. at 579. Unambiguous language will be given its clear meaning. N.D.C.C. § 9-07-02; State Farm Mut. Auto. Ins. Co. v. LaRoque, 486 N.W.2d 235, 237 (N.D.1992). When a contract term is undefined, we usually look to its clear, ordinary meaning. N.D.C.C. § 9-07-09; Martin v. Allianz Life Ins. Co., 1998 ND 8, ¶ 12, 573 N.W.2d 823.

[¶ 20] The addendums provided, “Glopak agrees that it shall not offset any amount due under Clauses 7c and that said amount is absolutely due and owing.” The disputed word is “offset.”

[¶ 21] “Offset” is defined as “something (such as an amount or claim) that balances or compensates for something else.” Black’s Law Dictionary 1115 (7th ed.1999). “Offset” is synonymous with “setoff.” Id.; A Dictionary of Modern Legal Usage 616 (2d ed.1995); 67 C.J.S. Offset (1978). “Setoff’ is defined as “a defendant’s counterdemand against the plaintiff, arising out of a transaction independent of the plaintiffs claim” or “a debt- or’s right to reduce the amount of a debt by any sum the creditor owes the debtor; the counterbalancing sum owed by the creditor.” Black’s at 1376; see also Modem Legal Usage at 797. The doctrine of setoff is “an equitable doctrine requiring that the demands of mutually indebted parties be set off against each other and that only the balance be recovered.” 20 Am.Jur.2d Counterclaim, Recoupment, Etc. § 6 (1995). See also 80 C.J.S. Set-off & Counterclaim, § 3 (2000) (setoff “allows parties that owe mutual debts to each other to assert amounts owed, subtract one from the other, and pay only the balance”). In a bankruptcy proceeding, setoff allows “entities that owe each other money to apply their mutual debts against each other, thereby avoiding ‘the absurdity of making A pay B when B owes A.’ ” In re Alvstad, 223 B.R. 733, 740 (Bankr.N.D.1998) (internal citations omitted).

[¶ 22] Offset does not encompass every available defense; rather, it involves mutuality of debt. A waiver-of-defense clause stating there shall be no “offset” is not as broad as a waiver of all “defenses.” See Security Holding Co. v. Christensen, 53 S.D. 37, 219 N.W. 949, 951 (1928) (defense of false or fraudulent representations is not contemplated in a waiver of offset). The “offset” clauses in the addendums prohibit Glopak from subtracting any debt owed by the Larsons or Dakota Partners to Glopak from the royalty payments now payable to Dakota Partners, under the addendums. The “offset” clause is not a waiver of the defense of fraud in the procurement of the original royalty agreement. Accordingly, Glopak is not estopped from asserting a fraud defense. The district court did not err.

IV

[¶ 23] The district court’s judgment dismissing all claims asserted by Dakota Partners against Glopak is affirmed.

[¶ 24] GERALD W. VANDE WALLE, C.J., WILLIAM A. NEUMANN, MARY MUEHLEN MARING, CAROL RONNING KAPSNER, JJ., concur.


text:
    2001 ND 165
    CITY OF FARGO, Plaintiff and Appellant v. James Merle GULLEKSON, Defendant and Appellee.
    No. 20010101.
    Supreme Court of North Dakota.
    Oct. 16, 2001.

      See also, 634 N.W.2d 527.

      Stephen R. Dawson, Assistant City Attorney, Fargo, ND, for plaintiff and appellant.
    James Merle Gullekson, defendant and appellee. No appearance.
   KAPSNER, Justice.

[¶ 1] The City of Fargo appeals an order suppressing evidence found during an investigatory stop of James Merle Gullek-son’s vehicle. The City of Fargo contends the trial court erred in its decision the stop was not based on reasonable and articula-ble suspicion. Because the evidence was discovered during a legal investigatory stop, we reverse the trial court’s suppression of the evidence and remand for further proceedings consistent with this opinion.

[¶ 2] Shortly before midnight on the night of October 24, 2000, an anonymous tip of a recklessly driven Ford sport utility vehicle, possibly an Explorer, was called into Fargo Police Department dispatch. Fargo Police Officer Bret Witte responded to the call by positioning himself on an off-ramp of Interstate 29 where he could observe any vehicle traveling in the southerly direction the caller stated the vehicle was traveling. After a short period of time, Officer Witte observed a Ford Bronco, the only vehicle traveling southbound.

[¶ 3] After the Ford Bronco passed him, Officer Witte requested a record check on the license plate number displayed on the Bronco. The check revealed Gullekson was the registered owner of the vehicle, and his operator’s license was under suspension. Officer Witte caught up to the Ford Bronco and upon observing the driver matched the physical description of the registered owner, as found on the registered owner’s operator’s license, stopped the vehicle. After stopping the vehicle and confirming Gullekson’s identity, Officer Witte arrested Gullekson for driving with a suspended license.

[¶ 4] Gullekson pleaded not guilty to the charge and demanded a jury trial. Prior to trial, Gullekson filed a motion to suppress all evidence obtained by law enforcement officers resulting from the stop. Gullekson asserted the evidence he was driving with a suspended operator’s license was the product of an illegal search because Officer Witte did not have reasonable and articulable suspicion a crime was being committed when he made the investigatory stop. The trial court granted the motion and suppressed the evidence, finding “[t]here is no evidence to indicate Officer Witte knew the Defendant or that he actually knew the Defendant was driving the vehicle.” The City of Fargo appealed the order granting the motion to suppress.

[¶ 5] Because of factual and legal similarities, this case was consolidated for oral argument with City of West Fargo v. Ross. City of West Fargo v. Ross, 2001 ND 163, 634 N.W.2d 627. That case is dispositive. For the reasons set forth in Ross, we reverse the trial court’s suppression of the evidence and remand for further proceedings. See id. at ¶¶ 7-12.

[¶ 6] VANDE WALLE, C.J., and MARING, NEUMANN and SANDSTROM, JJ., concur.