author: HANSON, Judge.

text:
    REINSURANCE ASSOCIATION OF MINNESOTA, Now known as RAM Mutual Insurance Company, Appellant, v. Raymond F. TIMMER, Roma Jean Timmer, Individually and d/b/a Timmer Cattle Sales, Respondents, David G. Johnstone, Diane M. Johnstone, Respondents, Lake Country State Bank, Respondents, and Raymond F. Timmer, Defendant and Third-Party Plaintiff, Respondent, v. Allen Hoelscher, d/b/a Hoelscher Insurance Agency, Third-Party Defendant.
    No. C0-01-1681.
    Court of Appeals of Minnesota.
    March 12, 2002.
    Review Denied May 14, 2002.

      Thomas D. Jensen, William L. Davidson, Kimberly Fleming, Lind, Jensen, Sullivan & Peterson, P.A., Minneapolis, for appellant.
    Paul F. Carlson, Kennedy & Nervig, LLP, Wadena, for respondents Timmers.
    David G. Johnstone, Diane M. John-stone, c/o Gregory Leyh, Kansas City, pro se.
    John C. Lervick, Alexandria, for respondent Lake Country State Bank.
    Bradley C. Warner, Moore, Warner & Kruger, St. Paul, for Third-Party Defendant.
    Considered and decided by SCHUMACHER, Presiding Judge, HANSON, Judge, and HUSPENI, Judge.

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

   OPINION

HANSON, Judge.

This is an appeal from summary judgment in a declaratory judgment action. The district court ruled that the Farmer’s Comprehensive Personal Liability policy, issued by appellant insurer, provided coverage for claims made against the respondent insured arising out of the insured’s sale of diseased dairy cows. The district court concluded that the appellant insurer owed duties both to defend and to indemnify respondent insured.

Because we conclude that insured’s cattle sales operation is a “farm operation” under the policy’s language, and that some of the buyer’s claims arguably arise from an “occurrence” and do not fall under any of the policy's exclusions, we affirm the district court’s judgment as to the insurer’s duty to defend. But because we conclude that some of the buyer’s claims do not arise from an “occurrence” or fall under policy exclusions, we reverse the district court’s judgment as to insurer’s duty to indemnify. The insurer’s motion to supplement the record, to include new documents from the underlying action, is denied.

FACTS

Respondents Raymond F. Timmer and Roma Jean Timmer (Timmers) operate a farm in Long Prairie, Minnesota. Since 1988, the Timmers obtained Farmer’s Comprehensive Personal Liability insurance from appellant Reinsurance Association of Minnesota, now known as RAM Mutual Insurance Company (RAM). When the Timmers were sued by respondents David G. Johnstone and Diane M. Johnstone (Johnstones), they tendered the defense of that action to RAM. RAM then brought this action seeking declaratory relief.

In the underlying action, the Johnstones allege that the Timmers sold them 100 dairy cows, some of which were infected with bovine viral diarrhea (BVD) virus. At the time of the sale, the Timmers did not have 100 cows at their farm and obtained 72 of the cows from two other farms and delivered them directly from those two farms to the Johnstones. The Timmers then purchased the remaining cows at three separate auctions, brought these cows to their farm for approximately six days, and then delivered them to the John-stones. The Johnstones allege that the infected cows introduced the BVD virus into their herd, causing loss of milk production, breeding problems and the death of some animals. The Johnstones’ three-count complaint alleges claims for (1) breach of express and implied warranties, (2) fraud and misrepresentation, and (3) consumer fraud in violation of the Minnesota Prevention of Consumer Fraud Act, Minn.Stat. § 325F.68-70.

RAM’s declaratory judgment action asserts that it has no duty to defend or indemnify the Timmers under the policy because the losses claimed by the John-stones arose out of the Timmers’ business activities, separate from their “farm operations”; did not arise out of an “occurrence”; and were the result of risks that were excluded by the policy. Both parties filed cross-motions for summary judgment.

The district court granted the Timmers’ motion for summary judgment, ruling both that RAM had a duty to defend and a duty to indemnify. The court concluded that the policy covered the Johnstones’ claims because, as a matter of law:

(1) the term “farm operations” was ambiguous and should be construed broadly against RAM to include the Timmers’ cattle sales operation;
(2) the introduction of the FVD virus to the Johnstones’ herd was an “occurrence” under the RAM policy;
(3) the loss of or injury to the cows that were healthy before the delivery by the Timmers was “property damage” under the RAM policy;
(4) the consequential damages alleged by the Johnstones, if proven, represent “sums for which [the Timmers are] liable by law because of * * * property damage,” and thus are covered under the RAM policy;
(5) the policy exclusions, including “business activities,” “intentional acts,” “rendering of professional services,” and “owned property” are inapplicable to the undisputed facts;
(6) the “business-risk doctrine” and the “products-sold” exclusion apply only to the loss of or injury to the cows that were infected with the BVD virus before they were delivered by the Timmers to the Johnstones; and
(7) under the facts and circumstances, including RAM’s affirmative conduct on which the Timmers relied, RAM is estopped from denying its duty to defend and indemnify the Timmers.

The district court entered judgment against RAM. This appeal followed.

On appeal, RAM moved to supplement the record to include a transcript and an order of the district court in the John-stones’ case.

ISSUES

I. Should RAM’s motion to supplement the record be granted?

II. Did the district court err by construing the term “farm operations” to include the Timmers’ cattle-selling activities?

III.Are any of the Johnstones’ claims arguably within the coverage of RAM’s policy?

ANALYSIS

The district court can properly determine the construction and interpretation of insurance policies on a motion for summary judgment and appellate courts will review the district court’s decision de novo. See Brown v. State Auto. & Cas. Underwriters, 293 N.W.2d 822 (Minn.1980) (reviewing district court’s grant of summary judgment based on its construction and interpretation of insurance policy provisions); Am. Family Ins. Co. v. Walser, 628 N.W.2d 605, 609 (Minn.2001) (stating appellate courts’ standards of review of district court’s interpretation of an insurance policy). When interpreting insurance policies, appellate courts apply general principles of contract interpretation. Sphere Drake Ins. PLC v. Trisko, 24 F.Supp.2d 985, 991 (D.Minn.1998); Lobeck v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246, 249 (Minn.1998).

“An insurer assumes two duties to its insured: the duty to defend and the duty to indemnify.” St. Paul Fire & Marine Ins. Co. v. Nat’l Chiropractic Mut. Ins. Co., 496 N.W.2d 411, 415 (Minn.App.1993), review denied (Minn. Apr. 29, 1993). “An insurer’s duty to defend is distinct from and broader in scope than the duty to indemnify.” Franklin v. W. Nat’l Mut. Ins. Co., 574 N.W.2d 405, 406 (Minn.1998). The duty to defend arises when any part of the claim against the insured is arguably within the policy’s scope. Metro. Prop. & Cas. Ins. Co. v. Miller, 589 N.W.2d 297, 299 (Minn.1999). If a complaint alleges several claims, and any one of them would require the insurer to indemnify, the insurer must provide a defense against all claims. Franklin, 574 N.W.2d at 406-07.

Conversely, to establish a duty to indemnify, the insured must prove that all claims alleged in the complaint fall within the policy coverage. Otherwise, the possibility that the insured’s liability might ultimately be based solely on a non-covered claim presents genuine issues of material fact that preclude summary judgment. See Minn. R. Civ. P. 56.03 (stating standards for summary judgment); see also Brown, 293 N.W.2d at 825-26 (affirming summary judgment on duty to defend but reversing summary judgment on duty to indemnify where coverage turned on an underlying fact issue). Thus, if any one of the claims alleged in the complaint falls outside of the policy coverage, the question of the duty to indemnify is not ripe and the district court’s judgment must be deferred until the decision in the underlying action is final.

RAM argues that it has no duty to indemnify the Timmers on any of the Johnstones’ claims, and thus it has no duty to defend. Accordingly, we will examine each of the Johnstones’ claims to determine (1) whether RAM arguably has a duty to indemnify the Timmers on any one of them, which would impose a duty to defend, and, conversely, (2) whether RAM clearly has no duty to indemnify the Tim-mers on any one of them, which would preclude summary judgment on the issue of RAM’s duty to indemnify.

For purposes of our examination, we find it convenient to separate the analysis into two parts: first, whether the Tim-mers’ cattle sales operation is an activity to which the policy applies and, second, whether the injuries allegedly suffered by the Johnstones are the result of risks covered by the policy. The district court’s memorandum of law is remarkably thorough, which has significantly assisted our review.

I

Preliminarily, we will address RAM’s two motions to supplement the record to include (1) the partial transcript of a summary judgment motion hearing in the Johnstones’ action and (2) a copy of the district court’s order granting partial summary judgment in the Johnstones’ action.

The record on appeal consists of the “papers filed in the [district] court, the exhibits, and the transcript of the proceedings, if any.” Minn. R. CivApp. P. 110.01. “An appellate court may not base its decision on matters outside the record on appeal, and may not consider matters not produced and received in evidence below.” Thiele v. Stich, 425 N.W.2d 580, 582-83 (Minn.1988). The supreme court, however, has recognized an exception to this rule “when the evidence is documentary evidence of a conclusive nature (uncontrovert-ed) which supports the result obtained in the [district] court.” In re Real Property Taxes for the 1980 Assessment, Village Apartments v. State, 335 N.W.2d 717, 718 n. 3 (Minn.1983) (citations omitted).

The transcript of the hearing in the Johnstones’ lawsuit does not fit within the exception to the rule because it is offered for the purpose of reversing, rather than supporting, the district court. The order granting partial summary judgment in the Johnstones’ action, dismissing the claims for breach of warranties, does not fit within the exception for the same reason. Moreover, it is not final. A decision that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties is not final, and is subject to revision at any time. Minn. R. Civ.App. P. 104.01, subd. 1. For these reasons, we deny RAM’s motion to supplement the record and limit our review to the record before the district court.

II

RAM argues that the district court erred by construing the term farm operations to include the Timmers cattle-selling activities.

Curiously, RAMs policy contains a definition of farm operations but does not use that precise term in describing the coverage being provided. The significance of the term farm operations must be discerned by a process of elimination. Thus, the personal liability coverage (coverage L) is stated broadly as follows:

We pay, up to our limit, all sums for which an insured is liable by law because of bodily injury or property damage caused by an occurrence to which this coverage applies.

But the general exclusions narrow this coverage by providing:

This policy does not apply to liability which results directly or indirectly from:
6. activities related to the business of an insured, ⅝ * *.

And, finally, the policy states that

Business means a trade, a profession or other occupation (not including farming), all whether full or part-time, or the rental of any property to others.

Thus, in this rather awkward manner, the policy provides liability coverage for the activity of “farm operations,” but not for any business activity other than “farming.” Stated more precisely, RAM’s policy applies to claims caused by an occurrence that arises from the Timmers’ farm operations, but does not apply to claims arising from the Timmers’ non-farming business operations. Therefore, if the Timmers’ cattle-selling operation is within the policy’s definition of “farm-operations,” coverage L applies and, conversely, the “business” exclusion does not apply.

A. Ambiguity

If an insurance contract is clear and unambiguous, a reviewing court gives the language its usual meaning. Walser, 628 N.W.2d at 609. Reviewing courts, however, will construe any ambiguity regarding coverage in favor of the insured. Id. An ambiguity exists when a word or phrase in an insurance contract is reasonably subject to more than one interpretation. Reinsurance Ass’n of Minn. v. Hanks, 539 N.W.2d 793, 796 (Minn.1995).

RAM’s policy defines “farm operations” as “those operations usual and incidental to agriculture, including the cultivation of land, raising of farm products and raising and feeding of livestock.” RAM argues that the Timmers’ cattle-selling activities were not “usual and incidental” to agriculture. But RAM is forced to concede that some buying and selling of cattle is usual and incidental to agriculture. RAM’s Vice President of Agency Services, Richard Newton, stated in his deposition that:

The buying and selling of cattle is usually incidental to agriculture if [the farm includes] the raising and feeding of livestock. All farmers buy and sell cattle.

Thus, the real focus of RAM’s argument is on whether “farm operations” is limited to the selling of cows that were first raised and fed on the insured’s farm. RAM argues because many of the cows sold to the Johnstones never set foot on the Timmers’ farm, they were not “raised” by the Tim-mers and, therefore, are not part of the covered farm operations.

The district court concluded that the definition of “farm operations” was ambiguous. It correctly observed that the “raising and feeding” clause is introduced by the verb “including,” which is not a term of limitation. Also, it noted that the policy does not define the term “raised,” leaving open the period of time the cows would have to be on the farm to be considered “raised.” It concluded, therefore, that the activities of raising and feeding the cattle were not shown to be prerequisites to coverage.

We agree with the district court that the definition of “farm operations” does not state that the cows must have been raised on the farm, and that the policy does not define “raised.” As a result, the term “farm operations” can be construed in more than one way and is ambiguous.

[T]he very fact that [insurer’s and insured’s] respective positions as to what this policy says are so contrary compels one to conclude that the agreement is indeed ambiguous.

Gen. Mills, Inc. v. Gold Medal Ins. Co., 622 N.W.2d 147, 153 (Minn.App.2001) (quoting N.W. Airlines, Inc. v. Globe Indem. Co., 303 Minn. 16, 26, 225 N.W.2d 831, 837 (1975)) (first alteration in original), review denied (Minn. Apr. 17, 2001). This ambiguity must be resolved in favor of the Timmers and in favor of coverage. See Walser, 628 N.W.2d at 609 (stating that “any ambiguity regarding coverage is construed in favor of the insured”). Accordingly, we affirm the district court’s decision that the Timmers’ cattle-selling activities were within then- farm operations.

B. Estoppel

The district court also concluded that RAM should be estopped, by its affirmative conduct, from denying that the Timmers’ cattle-selling activities were within their farm operations. The court based that conclusion on several undisputed facts. The Timmers had always disclosed to the insurance agent the actual nature of their cattle-selling activities. The agent conducted several on-site inspections, over the approximately 14 years that the policy was in place, and each time communicated his observations regarding the operation to RAM. See, e.g., Zimmerman v. Bankers’ Cas. Co., 138 Minn. 442, 444-45, 165 N.W. 271, 272 (1917) (imputing agent’s knowledge to the insurer). In fact, the agent specifically asked RAM whether liability coverage would be affected by the fact that “the insured deals in the buying and selling of cattle.” RAM did not respond to this inquiry, but notified the agent that the Timmers did not need separate liability coverage for the cattle-selling office on the farm because “buying and selling cattle is considered part of the normal farming operation and is insured under the [insurance] coverages.” Also, in the first year that RAM issued the policy, RAM paid a claim brought against the Timmers arising out of the sale of a cow that had been treated with antibiotics because the cow’s milk contaminated the purchaser’s entire milk tank.

We agree that these facts support the district court’s conclusion that RAM was estopped from denying that the Tim-mers’ cattle-selling activities were part of their farm operations. RAM correctly notes that estoppel cannot be used to enlarge the coverage of an insurance policy. See Shannon v. Great Am. Ins. Co., 276 N.W.2d 77, 78 (Minn.1979) (stating this rule). But the district court did not enlarge the policy’s coverage. Instead it used the evidence of estoppel to confirm the conclusion reached independently, that the term “farm operations” should be construed to include the Timmers’ cattle-selling activities. This same evidence could also be used as proof of the parties’ practical construction of an otherwise ambiguous term. See J.J. Brooksbank Co. v. Budget Rent-A-Car Corp., 337 N.W.2d 372, 376 (Minn.1983) (stating that the practical construction the parties give to the contract is persuasive evidence of what they intended by it).

Because we agree with the district court that the Timmers’ cattle-selling activities are part of their “farm operations,” and not a “business,” the policy applies to the cattle-selling activities and coverage is not excluded by the policy’s business exclusion.

Ill

RAM argues that even if we determine that the Timmers’ cattle-selling activities are part of their “farm operations,” the Johnstones’ claims do not arise from risks that are covered by the policy. RAM contends that the Johnstones’ claims arise from an intentional act and not an occurrence, involve damages for economic losses that do not qualify as “property damages,” and are excluded from coverage by the business-risk doctrine and “products sold” exclusion.

In determining whether a policy arguably provides coverage, an appellate court must “compare the allegations in the complaint in the underlying action with the relevant language in the insurance policy.” Meadowbrook, Inc. v. Tower Ins. Co., 559 N.W.2d 411, 420 (Minn.1997) (emphasis omitted) (citations omitted). While the district court correctly observed that “Minnesota law does allow the courts to go beyond the face of the complaint when determining the true nature of the claims at issue,” citing Johnson v. AID Ins. Co., 287 N.W.2d 663, 665 (Minn.1980), we are not convinced that the law allows the court to determine coverage on the basis of claims that could have been made (for example, are suggested by the fact pattern) but were not.

Thus, we believe the district court was incorrect in characterizing the John-stones’ complaint as follows:

Plaintiffs Johnstone base their claims against Timmer on alternative theories of negligence, including (a) Defendant Timmer failed to vaccinate the cows for BVD; or (b) Defendant Timmer failed to vaccinate the cows with a vaccine effective against all strains of BVD; or (c) Defendant Timmer failed to employ appropriate procedures in storing and administering an effective vaccine to the animals; or (d) Defendant Timmer was negligent in failing to appropriately examine the dairy cows, thus failing to determine that some of the dairy cows sold to Johnstones were infected with BVD.

Our reading of the complaint suggests that the Johnstones studiously avoided making any claims for ordinary negligence, perhaps to avoid the limitations on economic loss damages. See Minn.Stat. § 604.10 (2000) (providing that economic loss arising from the sale of goods between merchants is not recoverable in tort, except in fraud actions). Thus, we do not think the complaint can reasonably be construed to allege claims for ordinary negligence.

For purposes of determining arguable coverage, we will limit ourselves to the causes of action alleged in the complaint. Those causes of action are for breach of warranties, fraud, and consumer fraud. As to fraud and consumer fraud, because the complaint does not distinguish between intentional and negligent misrepresentation, we conclude that the complaint can reasonably be construed to include both.

We can dispense with any consideration of the Johnstones claims for intentional fraud. In the memorandum accompanying its order, the district court concluded that

R[AM]s duty to indemnify would not extend to any liability of Timmer[s] found to result from fraud or intentional misrepresentation, or from a knowing transfer of animals to [buyer that insured] knew were infected with the BVD virus.

The Timmers have not asked us to review this conclusion. See Minn. R. Civ.App. P. 106 (requiring notice of review for respondent to obtain review of adverse ruling); see also Arndt v. Am. Family Ins. Co., 394 N.W.2d 791, 793 (Minn.1986) (stating this court correctly refused to address respondents’ claims where notice of review was not filed). Thus, we will address only whether the Johnstones’ claims for damages under theories of breach of warranties, negligent misrepresentation, and negligent consumer fraud could arguably require RAM to indemnify the Timmers.

A. Breach of Warranties

Typically, insurance policies do not provide coverage for contractual liabilities, essentially because those liabilities are not based on an “accident” arising from an “occurrence.” See, e.g., Johnson, 287 N.W.2d at 665 (holding that a contractor’s intentional violation of a contract does not establish an “occurrence”). Also, coverage for contractual liabilities generally is precluded by the “intentional acts” exclusion.

The district court concluded, however, that Coverage “N” of RAM’s policy specifically provides “Contracts and Agreements Coverage,” which applies to “contract and warranty claims related to farm operations * * The precise language of Coverage “N” is as follows:

We pay for damages for * * * property damage resulting from liability assumed by an insured under a written contract made before the loss or a warranty of goods and products.

But, in a case involving similar policy language, we specifically held that “ ‘[Contractual liability coverage’ does not cover claims for breach of contract, but only covers tort liabilities of third parties that the insured has assumed by contract with the third party.” In re Liquidation of Excalibur Ins. Co., 519 N.W.2d 494, 497 (Minn.App.1994) (citation omitted), review denied (Minn. Oct. 4, 1994). Because the Johnstones’ breach of warranties claims do not arise from a liability of a third party that the Timmers assumed by contract, we conclude that the Johnstones’ breach of warranties claims are not arguably covered by the RAM policy.

B. Negligent Misrepresentation

Minnesota has adopted the Restatement of Torts definition of negligent misrepresentation:

One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

Florenzano v. Olson, 387 N.W.2d 168, 174 n. 3 (Minn.1986) (quoting Restatement (Second) of Torts § 552 (Tentative Draft No. 12, 1966)); Bonhiver v. Graff, 311 Minn. 111, 122, 248 N.W.2d 291, 298 (1976).

Assuming the Johnstones could prove the Timmers failed to exercise reasonable care in making false representations in connection with the sale of the cows and that the Johnstones relied on those representations, the next question is whether such a negligent misrepresentation claim would be within the coverage of the RAM policy.

Intentional Act v. Occurrence

RAM argues that the district court erred when it found that the John-stones’ negligent misrepresentation claim arose from an “occurrence.” RAM asserts that since the Timmers necessarily intended to make any representation that they did make, any claim arising from a representation would not qualify as an “occurrence” and, for the same reasons, would fall under the policy exclusion for intentional acts.

The policy defines an “occurrence” as “an accident which is neither expected nor intended ⅜ ⅝ ⅜.” The policy’s intentional-acts exclusion defines an intentional act as

any act intended by an insured, or done at the direction of an insured, whether or not the bodily injury or property damage was intended!.]

(Emphasis omitted.) For support, RAM refers to this court’s decision in Tschimperle v. Aetna Cas. & Sur. Co., 529 N.W.2d 421 (Minn.App.1995), review denied (Minn. May 31, 1995).

In Tschimperle, the alleged negligent misrepresentation concerned the value of a tractor, which was said to be worth $149,750 when it was actually worth $59,000. Id. at 423. Our decision that such a misrepresentation would not be within the seller’s liability coverage was based on the conclusion that a misrepresentation of value did not give rise to any “accident” and thus there could be no “occurrence.” Id. at 424. We also noted that the misrepresentation in Tschimperle did not cause any “property damage,” as defined in the policy. Id. at 425.

We do not consider Tschimperle to be applicable to the present facts. Here, it must be assumed that the Timmers intended to make the alleged representations, but a claim of negligent misrepresentation presupposes that they did not intend their representations to be false. Such a negligent misrepresentation may cause an “accident” where, as here, the allegedly false representation causes a buyer to accept delivery of diseased cattle that infect a formerly-healthy herd. That accident was neither expected nor intended and is an “occurrence.” Moreover, since liability for a negligent misrepresentation does not require proof that it was intentionally false, the claim does not fall under the intentional-acts exclusion. That is, the relevant “act” for that exclusion is not the act of making a representation, but the act of making a false representation.

Property Damage

RAM argues that the district court erred because the Johnstones seek damages for economic losses, including lost profits, which are not “property damage” under the policy.

The policy defines “Property Damage” as

a. physical injury to tangible property including all resulting loss of use of that property; or
b. loss of use of tangible property that is not physically injured.

It is true that the term “property damage” does not include economic losses. See, e.g., id. at 425 (stating that lost investments or lost profits are economic losses and not property damage). As noted by the district court, however, it appears that the specific language of the RAM policy enlarges coverage to include damages in addition to “property damage.” Coverage “L” states: “We pay * * * all sums for which an insured is liable by law because of * * * property damage * * *.” (emphasis omitted and emphasis added). Thus, the district court concluded, coverage is not limited to property damage, but includes other damages that flow from property damage.

In reaching this determination, the district court relied in part on this court’s unpublished decision in Western Nat’l Mut. Ins. Co. v. Frost Paint & Oil Corp., No. C3-97-1118, 1998 WL 27247 at *2 (Minn.App. Jan.27, 1998). The policy there provided coverage for “damages because of * * * property damage.” Id. This court determined that, although “lost profits are not a form of ‘property damage’ for insurance coverage purposes[,]” the policy’s express language permitted coverage for consequential losses, including lost profits flowing from physical injury to the insured’s property. Id.

While not precedential, we are persuaded by the Frost Paint analysis. See Dynamic Air, 502 N.W.2d at 800. Although the Johnstones’ lost profits or other consequential damages do not constitute property damage, they are “sums for which [the Timmers may be] liable by law because of ⅜ ⅜ * property damage.”

Business-Risk Doctrine

RAM argues that the district court erred by failing to apply the business-risk doctrine. Under the business-risk doctrine, the risk that an insured’s product will not meet contractual standards is a business risk not covered by a general liability policy. Bor-Son Bldg. Corp. v. Employers Commercial Union Ins. Co., 323 N.W.2d 58, 63 (Minn.1982). As we recognized above, this doctrine applies to the breach of warranty claims, which we agree are not covered under either the personal liability coverage (Coverage “L”) or the incidental liability coverage (Coverage “N”). This doctrine does not apply to the negligent misrepresentation claim, however, because it is not contractually based.

Products-Sold Exclusion

RAM argues that the district court erred by failing to find that the products-sold exclusion bars coverage of all 100 cows insured sold to buyer because the BVD virus arose out of the cows themselves. The policy’s products-sold exclusion applies specifically to those claims brought under the “Personal Liability” section (Coverage “L”). The policy states: Coverage “L” does not apply to liability which results directly or indirectly from: ⅜ ⅜ ⅜: ⅜:

10. property damage to products manufactured, sold, handled or distributed by an insured when the property damage arises out of such products or a part of the products[.]

(Emphasis omitted.)

RAM is correct that this exclusion applies to the cow or cows that were diseased before they were delivered to the John-stones. It does not, however, apply to those cows that were healthy at the time of delivery, or to the Johnstones’ existing herd, that was infected by the diseased cows.

Because a claim for negligent misrepresentation may involve an occurrence, and because none of the policy exclusions defeat coverage as a matter of law, the RAM policy arguably provides coverage for such a claim.

C. Consumer Fraud Act

To the extent that the Johnstones’ consumer fraud claim is based on intentional misrepresentations, there is no arguable coverage under the RAM policy, for the same reason that intentional common law fraud is not covered. But, we have 'construed the Minnesota Consumer Fraud Act to also apply to a negligent or unintentional misrepresentation. Church of the Nativity of Our Lord v. WatPro, Inc., 474 N.W.2d 605, 612 (Minn.App.1991), review granted (1 pet.) (Minn. Oct 11, 1991), review denied (1 pet.) (Minn. Nov 26, 1991) aff'd 491 N.W.2d 1 (Minn.1992). Thus, if the Johnstones are able to sustain their burden of proving that they purchased diseased cows based on the Timmers’ negligent or unintentional misrepresentation, RAM would be.required to indemnify the Timmers for their liability under the Consumer Fraud Act.

DECISION

In sum, because RAM is arguably required to indemnify the Timmers against the Johnstones’ claims for negligent misrepresentation and negligent violation of the Consumer Fraud Act, we conclude that RAM must defend the Timmers against all the claims in the Johnstones’ underlying complaint. We affirm the district court’s summary judgment on this issue. But, because the Johnstones’ other claims are not arguably indemnifiable, we conclude that the district court should have limited its summary judgment to the issue of RAM’s duty to defend and reserved jurisdiction over the issue of indemnification, to await a final determination in the John-stones’ action.

Affirmed in part, reversed in part, remanded, and motion denied.

      . RAM is presently defending the Timmers in the underlying action under a reservation of rights.

      . To the extent that the district court’s decision implies that estoppel more broadly precludes denial of coverage, including denial of the application of policy exclusions, we would not agree because the facts supporting estop-pel only relate to the activities covered by the policy, not to the specific risks arising from those activities.

      . In our unpublished decision in N. Branch Mut. Ins. Co. v. Bloom Lake Farms, Inc., 1995 WL 553875 (Minn.App. Sept.19, 1995), we reached the same conclusion for the identical Coverage "N" in another RAM policy. See Dynamic Air, Inc. v. Bloch, 502 N.W.2d 796, 800 (Minn.App.1993) (holding that unpublished decisions are of persuasive value, at best).


source: Caselaw Access Project

author: R.A. RANDALL, Judge. LANSING, Judge

license: Public Domain

text:
    STATE of Minnesota, Respondent, v. Walter Paul HOPPE, Appellant.
    No. C6-01-843.
    Court of Appeals of Minnesota.
    March 19, 2002.
    Review Denied May 14, 2002.

      Mike Hatch, Attorney General, St. Paul; and Robert E. Pottratz, Melrose City Attorney, Melrose, for respondent.
    John M. Stuart, State Public Defender, Charles F. Clippert, Assistant Public Defender, Minneapolis, for appellant.
    Considered and decided by LANSING, Presiding Judge, RANDALL, Judge, and HUSPENI Judge.

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

   OPINION

R.A. RANDALL, Judge.

Appellant challenges his conviction for gross misdemeanor DWI, arguing that the prosecutor committed prejudicial misconduct in closing argument by suggesting that appellant’s previous DWI convictions showed propensity, indicating a conviction was necessary to protect society, commenting on the defense’s failure to rebut the state’s evidence, and disparaging the defense by telling the jury that appellant was “snowing” the jury and that a portion of appellant’s defense theory was ridiculous. Appellant also argues that the district court erred in admitting Hoppe’s entire Minnesota driving record because the record contained stale impaired-driving convictions from 1987. We reverse and remand.

FACTS

In June 2000, appellant Walter Hoppe was arrested for driving under the influence of alcohol after Hoppe failed a series of field sobriety tests and a preliminary breath test resulted in a .15 reading. The intoxilyzer tests, administered approximately one hour after Hoppe’s arrest, resulted in a .163 and a .165, which yielded an official result of .16. Although Hoppe presented the arresting officer with a yellow driver’s license application from the Department of Motor Vehicles, the officer ran a check of Hoppe’s Minnesota driving record and discovered that his Minnesota driver’s license was revoked. The officer also discovered that Hoppe has two prior impaired-driving convictions in Minnesota from 1987 and four impaired-driving convictions in Montana from 1992 to 1996.

Hoppe was charged with gross misdemeanor driving under the influence of alcohol and gross misdemeanor driving with a blood-alcohol concentration in excess of .10, both of which are based on two or more convictions within ten years of the current incident. Hoppe did not stipulate to his prior convictions so the state offered, and the district court admitted into evidence, Hoppe’s Montana driving record. Hoppe also was charged with gross misdemeanor driving under the influence with a revoked driver’s license due to a prior driving under the influence conviction. Hoppe argued that he reasonably believed his Minnesota driver’s license was not revoked so the state offered, and the district court admitted into evidence, a certified copy of Hoppe’s Minnesota driving record. In addition to the revocation entry, Hoppe’s Minnesota driving record also listed stale impaired-driving convictions from 1987. A jury found Hoppe guilty of all charges, and Hoppe moved the district court for a new trial arguing that the prosecutor committed misconduct in his closing argument. The district court denied Hoppe’s motion, and he now appeals from his conviction.

ISSUES

I. Did the prosecutor commit misconduct in his closing argument, and, if so, does the misconduct require a new trial?

II. Did the district court err in admitting a certified copy of appellant’s entire Minnesota driving record?

ANALYSIS

I. Prosecutorial Misconduct

A reviewing court will not reverse a district court’s denial of a new trial motion based on alleged prosecutorial misconduct unless

the misconduct, considered in the context of the trial as a whole, was so serious and prejudicial that the defendant’s constitutional right to a fair trial was impaired.

State v. Johnson, 616 N.W.2d 720, 727-28 (Minn.2000) (citations omitted).

Hoppe argues that the prosecutor committed misconduct by improperly referring to Hoppe’s prior criminal convictions and suggesting that the prior convictions demonstrated a propensity to commit the charged crime. Specifically, the prosecutor stated:

There are a number of things that I was able to get in for your knowledge about what has been going on in Mr. Hoppe’s life over the past, let’s say fifteen years. Mr. Hoppe, it’s pretty obvious has a serious problem with alcohol and with driving motor vehicles and he has not been able to stop doing both and if he wants to consume alcohol, we people of the state of Minnesota say, you go right ahead, but don’t get behind the wheel. Please. We beg of you, don’t do that, and six times in the past has been ignored. We are now here for number seven.

Although a prosecutor may refer to a defendant’s prior criminal record to impeach the defendant’s character, he may not use prior convictions to gratuitously attack a defendant’s character. State v. DeWald, 463 N.W.2d 741, 745 (Minn.1990). It is also inappropriate for a prosecutor to present arguments calculated to inflame a jury’s passions or prejudices. State v. Salitros, 499 N.W.2d 815, 817 (Minn.1993). Instead of referring to Hoppe’s previous convictions solely to demonstrate the elements of the charged crime, the prosecutor suggested that Hoppe has a serious alcohol problem and has not been able to stop drinking and driving, given his previous six convictions. The implication is that, unless the jury rendered a guilty verdict, Hoppe would continue to drink and drive. We conclude that the prosecutor’s comments were calculated to inflame the jury’s passions by attacking Hoppe’s character; specifically his inability to abstain from drinking and driving and his previous convictions.

Second, Hoppe argues that the prosecutor’s closing argument inflamed the jury’s passions by indicating that a conviction was necessary to protect society. The prosecutor told the jury:

We are trying in the state of Minnesota to do like all the other states are. We are trying to get people to understand that they have to get designated drivers. If you are going to drink, fine, but transportation now becomes something you have to find somebody else to do for you. You have to find a designated driver, somebody, a sober cab, whatever you want to call it, because we’re all out on the roads too and our loved ones are out there and we don’t want something bad happening. And a forty one percent drop in fatalities since 1992— * * * ⅜
There’s been a decrease because we are trying to get the message out to stop drinking and driving. ⅜ * * Your job is to study the evidence and come to the conclusion that there was a drunk driver on the road on June 17th and thank God [the arresting officer] stopped him and got him off the road before he went any further and did any more damage. Six times in thirteen years is time to stop. I would ask you to please do that.

Like the previous comments addressed above, these statements have the effect of inappropriately referring to character evidence and inflaming the jury’s passions. It is improper for a prosecutor to urge the jury to protect society with its verdict. State v. Duncan, 608 N.W.2d 551, 556 (Minn.App.2000), review denied (Minn. May 16, 2000). A prosecutor must not “distract the jury from its proper role of deciding whether the state has met its burden.” State v. Ashby, 567 N.W.2d 21, 27 (Minn.1997) (citation omitted). The inference drawn from these statements is that the jury should convict to protect their “loved ones” and Minnesota’s citizens from future harm. The remarks could also be construed as asking the jury to send Hoppe a message, via a guilty verdict, that it is time for him to stop drinking and driving. Such remarks constitute misconduct. The remarks distract the jury from its duty of determining whether the state met its burden of proof beyond a reasonable doubt.

Third, Hoppe argues that the prosecutor impermissibly commented on Hoppe’s failure to contradict the state’s evidence. The prosecutor argued to the jury:

The defense is going to come and tell you, well, his eyes were red because he was a smoker. And he’s got something wrong with his ankles, that’s the balance problem. And they don’t talk about the horizontal gaze Nystagmus test. Mr. Hoppe at least didn’t try to explain why he was failing that test. Doesn’t have a very good explanation — doesn’t have any explanation for the .16 test result from the intoxilyzer, the two test results there. Folks, there’s an old saying that if something walks like a duck, quacks like a duck, has feathers like a duck, it’s a duck. It’s not something else.

A prosecutor may challenge a defendant’s rebuttal theory without shifting the burden of proof to the defense. State v. Race, 383 N.W.2d 656, 664 (Minn.1986). But it is improper for a prosecutor to comment on a defendant’s failure to contradict testimony. State v. Porter, 526 N.W.2d 359, 365 (Minn.1995). A prosecutor may “specifically argue that there was no merit to the defense,” but the prosecutor is not allowed to belittle the defense. State v. Williams, 525 N.W.2d 538, 549 (Minn.1994).

Hoppe testified at trial that he has bad ankles and sinusitis, which affect his balancing ability. He also testified that he has allergies, is a smoker, and was around smokers the evening of his arrest, which accounted for his bloodshot eyes. He further testified that the bright, flashing lights from the police cars irritated his eyes. The prosecutor could challenge Hoppe’s rebuttal theory that he failed the field sobriety tests for reasons other than intoxication, but the prosecutor should not have commented on Hoppe’s failure to refute the state’s evidence.

Finally, Hoppe argues that the prosecutor disparaged the defense in his rebuttal argument. In response to Hoppe’s argument that the intoxilyzer test was inaccurate, the prosecutor argued to the jury:

[T]he burden is showing a .10 or more. Well, if we have a .16, taken roughly forty five minutes after the stop occurred, and if you look at the intoxilyzer test record which you will have that’s in evidence, you will see that there’s a different amount of air that comes with each sample. You don’t get the same amount of air with each one, so you are going to have a little difference in the test result for each one. For [Hoppe] to extrapolate that and say that means he’s under .10 is ridiculous, so don’t bite that — don’t buy that.

While arguing that Hoppe should have known his driving privileges in Minnesota were revoked, the prosecutor told the jury:

[H]e’s been revoked [in Minnesota] since 1987. In Montana he’s been revoked since '92, when he went out there and got a license and now he wants to come back here in Minnesota and he says that he told this clerk, well, I am revoked in Montana. I forgot about being revoked in Minnesota so please take my eighteen fifty and give me a driver’s license, and now he can walk out the door and how he’s legally able to drive? I hope not. So again you are being snowed and I really hope you don’t let that happen to you.

It is improper to disparage the defense in closing arguments. State v. Griese, 565 N.W.2d 419, 427 (Minn.1997). The prosecutor committed misconduct by disparaging the defense via his reference to the defense’s argument as “ridiculous” and telling the jury not to be “snowed” by the defense.

Evidence of prosecutorial misconduct, however, does not automatically necessitate a new trial. Porter, 526 N.W.2d at 365. The reviewing court “must still determine whether the defendant was denied a fair trial.” Id. (citation omitted). A new trial is warranted if the court cannot determine “with certainty that the misconduct was harmless beyond a reasonable doubt .” Id. (citations omitted).

A prosecutor is a minister of justice who may not seek a conviction at any price. Salitros, 499 N.W.2d at 817. Instead of confining the closing argument to the facts in evidence, the prosecutor ignored his role as a minister of justice and implied that Hoppe’s previous convictions demonstrated a propensity to commit the charged crime. The prosecutor propelled the jury to find Hoppe guilty by suggesting that a conviction was needed to protect society and the jury’s loved ones. The prosecutor then went further and implied that the only way to stop Hoppe’s behavior was to find him guilty. As if that was not enough, the prosecutor suggested that Hoppe was snowing the jury and that Hoppe’s defense was ridiculous.

The state’s closing argument, taken in its totality, far exceeded the bounds of an ethical professional summation. The prosecutor had good evidence against Hoppe and did not have to stoop to such tactics to obtain a guilty verdict. As the supreme court noted over ten years ago, repeated warnings to the prosecution against employing improper trial tactics “appear to have been to no avail.” State v. Merrill, 428 N.W.2d 361, 373 (Minn.1988). “The prosecution can expect a reversal if such tactics are used again.” Id. If the state wants to try this case twice, it now has the chance.

We conclude the prosecutor’s comments were not harmless beyond a reasonable doubt and denied Hoppe the right to a fair trial.

II. Certified Record

Hoppe asserts that the district court committed plain error in admitting Hoppe’s entire Minnesota driving record because the record contained impaired-driving convictions from 1987. This issue is now moot because we are granting Hoppe a new trial based on the state’s prosecutorial misconduct. Because it is one capable of repetition, however, we will comment on it.

One of the charges against Hoppe was gross misdemeanor driving under the influence of alcohol based on the state’s belief that Hoppe’s Minnesota driver’s license was revoked. See Minn.Stat. § 169.129, subd. 1 (Supp.1999) (defining aggravated driving under the influence). Because Hoppe argued that he reasonably believed his license was not revoked, the state was required to prove this element of the charged crime. To do so, the state offered a certified copy of Hoppe’s Minnesota driving record. Hoppe argues that the district court committed plain error in admitting Hoppe’s entire Minnesota driving record because the record contained impaired-driving convictions from 1987. Hoppe asserts that the two convictions were irrelevant and affected his right to a fair trial because the jury learned of his 13 year history of impaired-driving convictions.

At no time did Hoppe object to the admission of the driving record. Absent specific and clear objections raised before the district court, a reviewing court “will generally not consider issues of the admissibility of evidence raised for the first time on appeal.” State v. Tovar, 605 N.W.2d 717, 726 (Minn.2000) (citation omitted). An exception to this rule exists if Hoppe can show that admission of the evidénce was plain error. See State v. Bauer, 598 N.W.2d 352, 363 (Minn.1999). To establish plain error Hoppe must show (1) there was error, (2) that it was plain, and (3) the error affected appellant’s substantial rights. See id. Under a plain error analysis, Hoppe has a “heavy burden of showing that the error was prejudicial and affected the outcome of the case.” See id. at 364 (quotation omitted).

We note that, although the 1987 convictions are listed in Hoppe’s Minnesota driving record, it is speculative to assume that this knowledge substantially prejudiced Hoppe’s jury. Already in evidence, Hoppe’s certified driving record from Montana indicated more than two previous impaired-driving convictions the jury could rely on to find Hoppe guilty of the charged crimes. Also, the jury was instructed that in order to find Hoppe guilty, Hoppe must have two or more impaired-driving convictions within ten years. Because of the evidence against Hoppe and the district court’s jury instructions, the district court’s admission of Hoppe’s entire Minnesota driving record was not plain error. The district court could have, in chambers, with the assistance of both counsel, redacted any part of Hoppe’s Minnesota driving record found to be irrelevant. That the court did not do so does not change our analysis.

Hoppe may consider stipulating to this fact for the second trial because the record is clear that Hoppe’s Minnesota driver’s license was revoked at the time of the incident. If he insists on challenging this issue again, the district court may wish to redact Hoppe’s stale convictions to avoid giving Hoppe the chance to appeal this issue a second time.

DECISION

The prosecutor’s statements during closing argument implying that Hoppe’s previous convictions demonstrate a propensity to commit the charged crime, suggesting that Hoppe will continue to drink and drive unless convicted, implying that a conviction is necessary to protect society, disparaging the defense by stating that Hoppe’s argument was ridiculous, and warning the jury not to be snowed by the defense constitute serious misconduct. The prosecutor’s misconduct denied Hoppe the right to a fair trial.

Reversed and remanded.

LANSING, Judge

(dissenting).

I respectfully dissent. Walter Hoppe pleaded not guilty to three gross misdemeanor charges: driving under the influence of alcohol within ten years of the first of two or more prior impaired-driving convictions, driving with a blood-alcohol concentration in excess of .10 within ten years of the first of two or more prior impaired-driving convictions, and driving under the influence before his driver’s license had been reinstated following its revocation for driving while under the influence of alcohol.

In order to prove that Hoppe was guilty of the gross misdemeanor charges, the state had to prove two or more prior impaired-driving convictions within 10 years of the current charges and that his license was revoked for driving while under the influence. See Minn.Stat. § 169.121, subd. 3(c), .129, subd. 1 (Supp.1999) (defining enhanced gross misdemeanor). Hoppe refused to stipulate to the requisite prior convictions, or that his license was revoked, and the state offered Hoppe’s certified driving record to prove the necessary elements of the offenses.

Hoppe’s defense was that he did not remember whether his Minnesota license was reinstated, that he had a copy of a license application for which he had paid a fee, and that he believed that he was therefore licensed to drive in Minnesota. In summation and rebuttal summation, the prosecutor attempted to persuade the jury that the defense was not credible. The argument was not a model prosecution argument. But even assuming that the majority correctly characterizes the statements as prosecutorial misconduct, the facts do not warrant a new trial.

A defendant is not entitled to a new trial when it can be said with certainty that prosecutorial misconduct is harmless beyond a reasonable doubt. State v. Porter, 526 N.W.2d 359, 365 (Minn.1995). When applying the harmless error test, a reviewing court looks to the basis on which the jury rested its verdict and determines what effect the statements had on the verdict. State v. Ashby, 567 N.W.2d 21, 28 (Minn.1997). If the verdict is surely unattributable to the misconduct, the error is harmless beyond a reasonable doubt. Id. To evaluate the possible effect of misconduct, the court also looks to evidence supporting the defendant’s theory, the length of jury deliberations, and whether the defendant objected to the conduct or sought a curative instruction. See State v. Griese, 565 N.W.2d 419, 428 (Minn.1997); Porter, 526 N.W.2d at 359.

The evidence against Hoppe was overwhelming. The arresting officer observed Hoppe’s vehicle weave within the lane several times and touch the right fog line. After stopping Hoppe’s vehicle and speaking with him, the officer immediately noticed the smell of alcohol. He also observed that Hoppe’s eyes were bloodshot and glassy and that his speech was slow and slurred. After Hoppe got out of his car the officer observed that Hoppe was swaying. Hoppe failed three field sobriety tests, which included the one-legged standing test, the walk-and-turn test, and the horizontal Nystagmus test. Approximately one hour after Hoppe was stopped, he took two intoxilyzer breath tests. The first one indicated Hoppe’s blood alcohol-content was .163. The second test, administered four minutes later, produced a reading of .165.

Hoppe offered little evidence to refute the state’s affirmative proof. He testified that he consumed four cans and one glass of beer. His drinking companion testified similarly. He suggested that he failed the field sobriety tests because of physical limitations. He conjectured that the intoxi-lyzer test results were the product of a faulty machine or an inexperienced test administrator. His attorney suggested to the jury that a .16 result from the breath test one hour after his arrest could mean that he was less than .10 at the time of his arrest, but no evidence supported this argument. Although his attorney made objections, many of which were sustained, the attorney made no objections to the prosecutor’s comments that are challenged on appeal. His attorney sought no curative instruction. The jury reached a guilty verdict on all three charges 80 minutes after it began deliberations.

The district court is in the best position to evaluate the effect of an unprofessional closing argument. Ashby, 567 N.W.2d at 27. The district court denied the new trial and that decision should stand. The prosecutor’s argument was at best inartful and at worst misconduct. But on this record, Hoppe’s convictions were surely unattributable to the prosecutor’s inappropriate statements in summation, and I would affirm.

      . At this point, Hoppe’s attorney objected, and the court sustained the objection, ruling that the prosecutor was arguing facts not received into evidence. Even after the court's ruling, however, the prosecutor continued his previously interrupted sentence.


author: GORDON W. SHUMAKER, Judge.

text:
    STATE of Minnesota, Respondent, v. Gary R. MEYER, Appellant.
    No. C9-01-1078.
    Court of Appeals of Minnesota.
    March 19, 2002.
    Review Denied May 14, 2002.

      Mike Hatch, Attorney General, St. Paul; and Ross E. Arneson, Blue Earth County Attorney, Mankato, for respondent.
    John M. Stuart, State Public Defender, Steven P. Russett, Assistant Public Defender, Minneapolis, for appellant.
    Considered and decided by WILLIS, Presiding Judge, SHUMAKER, Judge, and FOLEY, Judge

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

   OPINION

GORDON W. SHUMAKER, Judge.

Appellant challenges the stop of his vehicle, arguing that because the officer was outside of his territorial jurisdiction and performing only “ministerial” activities when he observed the alleged violation, the officer was not acting in the course and scope of his employment and did not have the authority to stop his vehicle. Because the officer was acting within the course and scope of his employment when he observed the violation, he was acting within his jurisdiction and had the authority to stop appellant’s vehicle. We affirm.

FACTS

Daniel Bunde is employed as a full-time peace officer by the City of Madison Lake in Blue Earth County. After Officer Bunde issues traffic citations, his customary practice is to attach computer printouts of driver and owner registration records to the citations. These records are not available in Madison Lake but may be obtained from the Blue Earth County Law Enforcement Center in Mankato. Officer Bunde routinely drives to Mankato to pick up the records and to retrieve mail intended for the Madison Lake police department.

On April 8, 2000, Officer Bunde was on his way to Mankato to obtain records. He was on duty, was in uniform, and was driving a marked squad car with its radar speed-detection unit activated. As he drove along, he monitored speeds of other vehicles on the road.

Outside the Mankato city limits and beyond the territorial jurisdiction of Madison Lake, Officer Bunde observed a minivan traveling in excess of the speed limit. He confirmed by radar that the vehicle was going more than 85 miles per hour in a 65 miles-per-hour zone. Officer Bunde notified local authorities of his observation and then pursued and stopped the car about three miles south of the Madison Lake city limits. Appellant Gary Meyer was driving the minivan.

While questioning Meyer, Officer Bunde noticed indicia of intoxication. After Meyer failed field sobriety and preliminary breath tests, Officer Bunde arrested him. The state charged Meyer with alcohol-related gross misdemeanors.

Meyer moved to dismiss the charges on the ground that Officer Bunde was outside his jurisdiction when he observed the speeding and when he made the stop and, therefore, he had no authority to make the stop. The district court denied the motion. Meyer then waived his right to jury trial and submitted the case on the omnibus hearing evidence and additional stipulated facts. The district court found Meyer guilty. Meyer appeals, contending that the court’s pretrial denial of Meyer’s motion to dismiss was error.

ISSUE

An on-duty peace officer performing an administrative police function outside his territorial jurisdiction witnessed a traffic violation, stopped the driver, and, after investigating, arrested the driver for alcohol-related offenses. Did the officer lack authority to make an arrest when the offense, the stop, and the arrest occurred outside the officer’s territorial jurisdiction?

ANALYSIS

A peace officer may make a war-rantless arrest within “the jurisdiction of the appointing authority” when he observes the commission of a public offense there. Minn.Stat. § 629.84, subd. l(a)(c) (1998). An officer may also make a war-rantless arrest outside his jurisdiction when he is acting within the course and scope of his employment as a peace officer. Minn.Stat. § 629.40, subd. 3 (1998). If the officer acts within the course and scope of his employment, he is deemed to be “serving in the regular line of duty as fully as though the service was within [the officer’s] jurisdiction.” Id.

Appellant Meyer acknowledges that the resolution of the issue on appeal depends on whether Officer Bunde was acting in the course and scope of his employment when he observed the speeding violation and made the stop and the arrest outside his jurisdiction of Madison Lake. Meyer argues that an officer operates in the course and scope of his employment only while he is performing “a core law enforcement activity.” Here, Meyer contends, Officer Bunde was engaged in a “purely ministerial task” that was not even necessary because there was an alternate means for him to obtain computerized records in Madison Lake by facsimile or mail.

The determination of the meaning of “course arid scope of employment” is a matter of statutory interpretation and is an issue of law that appellate courts review de novo. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 393 (Minn.1998).

Several Minnesota cases have held that a warrantless arrest outside the arresting officer’s jurisdiction is valid if the officer’s suspicion was aroused by an activity that occurred within his jurisdiction. See, e.g., State v. Tilleskjor, 491 N.W.2d 893, 894 (Minn.1992) (stop valid when suspicion aroused inside officer’s jurisdiction but stop occurred outside jurisdiction); Windschitl v. Comm’r of Pub. Safety, 355 N.W.2d 146, 148 (Minn.1984) (stop valid when officer’s suspicion aroused inside officer’s jurisdiction; ensuing chase and arrest occurred outside jurisdiction); Dep’t of Pub. Safety v. Nystrom, 299 Minn. 224, 225, 217 N.W.2d 201, 202 (1974) (stop valid when offensive conduct observed by officers within jurisdiction, but pursuit leads officers outside and arrest occurs outside); Lorenzen v. Comm’r of Pub. Safety, 594 N.W.2d 552, 554 (Minn.App.1999) (stop valid although officer mistaken whether vehicle she.chased outside jurisdiction was same one that aroused her suspicion earlier within jurisdiction).

State v. Bunde, 556 N.W.2d 917 (Minn.App.1996), on which the district court here relied as controlling authority, involved consolidated appeals by the state of the dismissal of charges against two defendants accused of unrelated violations that occurred outside the arresting officer’s territorial jurisdiction.

In the first case in Bunde, a Janesville police officer observed a speeding car within the Janesville city limits, followed it about three miles outside the limits, and then shifted his attention to another car that turned without signaling and was weaving over the center line. The officer arrested the driver of that car for driving while under the influence. We held that, even though the officer was outside his jurisdiction and the offense occurred entirely outside his jurisdiction, he nevertheless was acting in the course and scope of his employment and thus had authority to make the arrest. Id. at 919. We explained that so long as the policing mission itself started within the officer’s jurisdiction, it was irrelevant that the officer did not observe the violation until he was outside his jurisdiction. Id.

In the second case in Bunde, the officer was patrolling outside the Janesville limits when he investigated and then arrested Bunde for driving while under the influence of alcohol. We held that the officer was acting in the course and scope of his employment even though his policing mission commenced outside his territorial jurisdiction. Id. at 920.

In another context, we held that the central factor to consider in determining whether an employee is acting within the course and scope of his employment is whether the conduct is, to some degree, in furtherance of the interests of the employer. Hentges v. Thomford, 569 N.W.2d 424, 428 (Minn.App.1997), review denied (Minn. Dec. 8, 1997).

Meyer does not dispute that Officer Bunde began his on-duty activity in his territorial jurisdiction of Madison Lake, but Meyer would have us limit the course and scope of conduct outside the officer’s geographical jurisdiction to only those police activities related directly to the investigation of crime and the apprehension of criminals. But the cases cited above, coupled with common knowledge, support a broader interpretation of the statutory phrase, “in the course and scope of employment.”

It cannot reasonably be disputed that various administrative and ministerial acts are essential and valid components of law enforcement efforts. Prominent among those acts are writing police reports and assembling and preparing supporting records for the prosecution of persons apprehended during the performance of “core law enforcement activities.” Surely such administrative and ministerial acts are part of the overall “policing mission,” for without them it is difficult to imagine how violators of the law could ever be successfully prosecuted. Moreover, it would be in the interests of Madison Lake, Officer Bunde’s employer, to be able to effectively prosecute persons who allegedly committed public offenses in Madison Lake. By obtaining useful or necessary records, Officer Bunde was acting in furtherance of his employer’s interests.

Meyer also argues that Officer Bunde was not engaging in a valid law enforcement purpose in his trip to obtain records because the records could have been sent to Madison Lake by mail or by facsimile transmission. We find no basis for reading the statutory phrase “course and scope of employment” to mean that an employee is constrained to choose only one among various options for carrying out his employment functions.

Officer Bunde was acting within the course and scope of his employment when he observed Meyer’s speeding violation and when he stopped and arrested Meyer outside the officer’s jurisdiction. The district court did not err in denying Meyer’s motion to dismiss the criminal complaint.

DECISION

Because an on-duty peace officer was acting within the course and scope of his employment when he stopped appellant’s vehicle and arrested appellant outside the officer’s territorial jurisdiction, the stop was valid.

Affirmed.


author: G. BARRY ANDERSON, Judge.

text:
    Michael CHANEY (d/b/a/ The Chaney Group) et al., Appellants, v. MINNEAPOLIS COMMUNITY DEVELOPMENT AGENCY et al., Respondents, and Gesco, Inc., Respondent/Intervenor.
    Nos. C3-01-1349, C1-01-1401.
    Court of Appeals of Minnesota.
    March 26, 2002.
    Review Denied May 28, 2002.

      Alan W. Weinblatt, Donna M. Kasbohm, St. Paul, for appellants.
    Fred Burstein, William J. Maddix, Minneapolis, for respondents MCDA and the City of Minneapolis.
    David Gronbeck, Minneapolis, for re-spondeni/intervenor Gesco, Inc.
    Considered and decided by HARTEN, Presiding Judge, ANDERSON, Judge, and STONEBURNER, Judge.
   OPINION

G. BARRY ANDERSON, Judge.

Respondents, the City of Minneapolis and the Minneapolis Community Development Agency et al. (MCDA), published a request for proposals (RFP) inviting bids to rehabilitate certain property located in Minneapolis. Appellants, Michael and Robert Chaney, submitted a bid. Respondents did not sell the property to appellants but sold it to intervenor, Gesco, Inc. On the same day respondents conveyed the property to intervenor, appellants brought suit claiming, inter alia, racial discrimination and breach of contract. Appellants filed and recorded a notice of lis pendens before intervenor recorded the deed from respondents. The district court then entered two orders dealing with the notice of lis pendens. The first order directed appellants to discharge the notice of lis pendens. Because appellants did not discharge the notice of lis pendens, the district court later issued a second order that did so. Appeals from both orders were consolidated by an order of this court. Because we find that this court cannot grant any effectual relief to appellants, we dismiss this consolidated appeal as moot.

FACTS

On June 28, 1999, MCDA published an RFP, which sought developers to purchase and rehabilitate the property at 1835-37 Park Avenue (the property). Of the four proposals submitted by the September 2, 1999 deadline, as counsel for appellants observed, appellants filed the only complete application.

An October 4, 1999 letter from the MCDA staff to the MCDA operating committee recommended that the property be sold to appellants. The MCDA Board of Commissioners (board) ignored the recommendation and instead approved the sale to Mark Orfield, another developer. It is undisputed that as of September 2, 1999, Orfield’s application did not satisfy all of the RFP’s requirements. The board’s decision was controversial.

On November 12, 1999, the board referred the matter back to the operating committee. Intervenor submitted an unsolicited proposal, and, on April 24, 2000, the executive director of the MCDA recommended selling the property to interve-nor. The board approved the sale and conveyed the property to intervenor by way of a quitclaim deed on June 22, 2000.

On the same day, appellants served a summons and complaint on respondents. On July 14, 2000, appellants recorded a notice of lis pendens in the chain of title of the property. The quitclaim deed from respondents to intervenor was recorded on August 2, 2000.

On March 6, 2001, respondents filed a motion seeking summary judgment on all of appellants’ causes-of-action as well as discharge of the notice of lis pendens. The district court only granted summary judgment on the breach-of-contract claim and did not discharge the notice of lis pendens.

On July 11, 2001, respondents again requested that the notice of lis pendens be discharged. The parties also reached an agreement allowing intervention, and the district court approved the addition of in-tervenor to the litigation.

On July 25, 2001, arguments were heard regarding the notice of lis pendens. Respondents requested that appellants post a surety bond, a request based on Minn.Stat. § 469.044 (2000). The same day, the district court issued an order that required appellants to discharge the notice of lis pendens, and also denied respondents’ request for a surety bond.

Appellants did not comply with the July 25, 2001 order. Another hearing was held on August 2, 2001; respondents and inter-venor requested the district court set and require a supersedeas bond if appellants sought a stay of the discharge of the notice of lis pendens pending appeal. Because counsel for appellants acknowledged that appellants were financially unable to post a $500,000 bond, the district court concluded the issue of the supersedeas bond was moot. Therefore, the district court discharged the notice of lis pendens. This appeal followed.

ISSUES

1. Is this appeal moot?

II. Is intervenor a bona fide purchaser?

ANALYSIS

This court has appellate jurisdiction to review an order discharging a notice of lis pendens. Nelson v. Nelson, 415 N.W.2d 694, 696-97 (Minn.App.1987).

I.

Respondents contend this appeal was rendered moot by appellants’ failure to file a supersedeas bond, which resulted in the discharge of the notice of lis pen-dens. This court has held that

[a] supersedeas bond is not required to perfect an appeal. The trial courts may not compel a party “to file a super-sedeas bond as a condition to his right to an appellate review of the merits of the court’s decision.”

All Lease Co. v. Peters, 424 N.W.2d 320, 321 (Minn.App.1988) (quoting Tourville v. Tourville, 289 Minn. 544, 545, 185 N.W.2d 281, 282 (1971)). A supersedeas bond is simply a prerequisite for a stay while an appeal is heard. Therefore, the failure to post a supersedeas bond, in and of itself, does not render this appeal moot. See Minn. R. Civ.App. P. 108.01, 1998 cmt. (stating “[t]he posting of a supersedeas bond or a request for stay on other grounds is not required for an appeal to be perfected or proceed. However, because the order or judgment that is the subject of the appeal is not generally stayed automatically, a matter may, in some circumstances, become moot while the appeal is pending.”)

The doctrine of mootness dictates that an appellate “court will hear only live controversies and will not pass on the merits of a particular question merely for the purpose of setting precedent.” In re Inspection of Minn. Auto. Specialties, Inc., 346 N.W.2d 657, 658 (Minn.1984). Mootness can be described as

the doctrine of standing set in a time frame: The requisite personal interest that must exist at the commencement of the litigation (standing) must continue throughout its existence (mootness).

Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 189, 120 S.Ct. 693, 709, 145 L.Ed.2d 610 (2000) (quotations omitted). If an appellate “court is unable to grant effectual relief,” the issue will be deemed moot. In re Schmidt, 443 N.W.2d 824, 826 (Minn.1989).

As this court has observed, “we would deem the appeal [of a discharged notice of lis pendens] moot if [respondents] had transferred the property to a bona fide purchaser.” Marque Plumbing, Inc. v. Barris, 380 N.W.2d 174, 176 (Minn.App. 1986), review denied (Minn. Mar. 24, 1986). Therefore, if this court concludes that in-tervenor was a bona fide purchaser, this appeal is moot.

II.

Statutory construction is a question of law, which this court reviews de novo. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 393 (Minn.1998). Here, two statutes are at issue: Minn.Stat. § 557.02 (2000) (providing for notice of lis pendens) and Minn.Stat. § 507.34 (2000) (Minnesota’s race-notice recording statute).

Minn.Stat. § 507.34 protects bona fide purchasers against unrecorded property interests in the form of a race-notice recording statute. See Minn. Cent. R.R. Co. v. MCI Telecomms. Corp., 595 N.W.2d 533, 537 (Minn.App.1999) (recognizing that Minnesota is a race-notice state), review denied (Minn. Sept. 14,1999). The recording statute “does not protect a purchaser who has actual or constructive notice of outstanding rights in another, as the purchaser is then not a bona fide purchaser.” In re Inv. Sales Diversified, 38 B.R. 446, 453 (Bankr.D.Minn.1984) (citing Anderson v. Graham Inv. Co., 263 N.W.2d 382 (Minn.1978)).

A. Actual or Implied Notice

The district court found that “[i]ntervenor was unaware that the [notice of] Lis Pendens had been filed * * * until sometime in January of 2001.” Findings of fact shall not be set aside unless clearly erroneous. Minn. R. Civ. P. 52.01. If there is reasonable evidence to support the district court’s findings of fact, we will not disturb those findings. Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn.1999) (citation omitted).

The record supports the finding that intervenor did not have actual or implied knowledge of the notice of lis pendens; intervenor’s president testified that he had no knowledge of the notice of lis pendens until January 2001. We defer to a district court’s determination of credibility. See Vangsness v. Vangsness, 607 N.W.2d 468, 472 (Minn.App.2000) (holding appellate courts defer to district court’s credibility determinations). Here, the district court’s determination that there was no actual or implied notice was based on testimony presented at the hearing and was not clearly erroneous.

B. Constructive Notice

Since actual or implied notice is not present, intervenor is not bound by the notice of lis pendens absent constructive notice of the action. See Roberts v. Friedell, 218 Minn. 88, 94-95, 15 N.W.2d 496, 499-500 (1944).

“Pursuant to Minn.Stat. § 507.32 [(2000)], a purchaser is charged as a matter of law with constructive notice of any properly recorded instrument.” Howard, McRoberts & Murray v. Starry, 382 N.W.2d 293, 296 (Minn.App.1986). The supreme court has defined constructive notice as

a creature of statute and, as a matter of law, imputes notice to all purchasers of any properly recorded instrument even though the purchaser has no actual notice of the record.

Miller v. Hennen, 438 N.W.2d 366, 369-70 (Minn.1989) (quotation omitted); see also Latourell v. Hobart, 135 Minn. 109, 113—14, 160 N.W. 259, 260-61 (1916).

The right to file a notice of lis pendens is a statutory right granted by Minn.Stat. § 557.02.

[T]he sole function of the lis pendens is to give constructive notice to all the world of the pendency of the action, which is, alone, notice to all persons of the rights and equities of the party fifing the fis pendens in the land therein described.

Trask v. Bodson, 141 Minn. 114, 117, 169 N.W. 489, 490 (1918) (emphasis added) (citing Joslyn v. Schwend, 89 Minn. 71, 74, 93 N.W. 705, 706 (1903)).

Respondents conveyed the property to intervenor prior to the fifing of the notice of fis pendens. A purchaser’s title to property pursuant to a conveyance made prior to the recording of a notice of fis pendens, but not recorded until after the notice of fis pendens is filed, is unaffected by the notice of fis pendens where the purchaser does not have constructive notice of the notice of fis pendens at the time the purchaser acquired an interest in the property. See Roberts, 218 Minn. at 94, 15 N.W.2d at 499 (stating that “the doctrine of lis pendens applies only when a third person attempts to intrude into a controversy by acquiring an interest in the matter in litigation pending the suit” and “neither the rule nor the reason for it applies where a person takes by conveyance prior to the commencement of the suit, without actual notice” (citation omitted)); Moulton v. Kolodzik, 97 Minn. 423, 426, 107 N.W. 154, 155 (1906) (“If, ⅜ * * before the notice is filed, a party to the proceeding [has] executed a deed to a third person, who has not recorded it, such third person is not hampered by the lis pen-dens.” (citations omitted)); Johnson v. Robinson, 20 Minn. 170, 171, 20 Gil. 153, 154-55 (1873) (holding that purchaser not bound by notice of lis pendens when conveyance was completed before notice was filed, but deed was not recorded until after notice was filed).

Appellants claim that two decisions support their argument that intervenor had constructive notice of the notice of lis pen-dens. See generally Marr v. Bradley, 239 Minn. 503, 59 N.W.2d 331 (1953); Fingerhut Corp. v. Suburban Nat’l Bank, 460 N.W.2d 63 (Minn.App.1990). But both Marr and Fingerhut are distinguishable from the present controversy.

1. Marr v. Bradley

In Marr, Agnes Sheff agreed to sell her . property to Marr. Marr, 239 Minn. at 504, 59 N.W.2d at 332. Later, her husband, Frank Sheff, who was not a record owner of the property, agreed to sell the same property to the Bradleys. Id. at 505, 59 N.W.2d at 332. The Sheffs refused to consummate the deal with Marr. Id. Marr sought specific performance, and recorded a notice of lis pendens on April 19, 1945. Id. The Sheffs then provided the Bradleys with an abstract that was continued to April 16, 1945, and did not disclose Marr’s recorded notice of lis pendens. Id. On May 14, 1945, “without having the abstract further continued to date,” the Bradleys paid the Sheffs for the property and received a warranty deed. Id.

The supreme court held that the determination of whether the Bradleys had constructive notice of Marr’s notice of lis pen-dens depended on the validity of the Bradleys’ original agreement with Frank Sheff. Id. at 506-07, 59 N.W.2d at 333. The court held that the agreement between Frank Sheff and the Bradleys was void and gave the Bradleys no rights to the property; therefore, the Bradleys did not have an interest in the property until May 14, 1945, when they received a deed signed by both Agnes and Frank Sheff. Id. at 509, 59 N.W.2d at 334. The court concluded that because Marr’s notice of lis pendens was duly recorded when the Bradleys first obtained an interest in the land on May 14, 1945, the Bradleys had received constructive notice of the Marr-Sheff litigation and their interests were subsidiary to the results of that litigation. Id. at 510-11, 59 N.W.2d at 335.

Marr is dissimilar to the instant case because here intervenor acquired an interest in the property prior to the recording of appellants’ notice of lis pendens. Unlike the void agreement in Marr, there is no claim here that the quitclaim deed is void. Furthermore, the notice of lis pen-dens had not been filed when respondents conveyed their interest in the property to intervenor. Therefore, Marr is not dispos-itive in this case.

2. Fingerhut Corp. v. Suburban Nat’l Bank

At oral argument, appellants claimed that Fingerhut overrules Moulton, 97 Minn. at 423, 107 N.W. at 154, sub silento. We do not agree.

Moulton held that a notice of lis pen-dens is not binding on a purchaser who receives a deed to property before a notice of lis pendens is recorded on that property, even though the purchaser does not record the deed until after the notice of lis pendens has been recorded. Id. Finger-hut is distinguishable on its facts from this case and from Moulton. In Fingerhut, a former Fingerhut employee, Connelly, defrauded the company of a large amount of money and used the money to purchase property. Fingerhut, 460 N.W.2d at 64. Connelly mortgaged the property to Suburban on August 25, 1986. Id. at 65. On August 28, 1986, Fingerhut filed suit against Connelly and, the next day, filed and registered a notice of lis pendens against the property. Id. Suburban did not register its mortgage until September 2, 1986. The Fingerhut court concluded that Suburban was bound by Fingerhut’s notice of lis pendens because Suburban registered its mortgage after Fingerhut’s notice of lis pendens was registered, even though Suburban received the mortgage prior to the notice of lis pendens’ registration. Id. at 65-66.

But Fingerhut differs from the present controversy in a key respect: the property was registered, or Torrens, property. The Fingerhut court recognized that “[t]he necessity of registration to create an interest in the land is what distinguishes registered, or Torrens, property from abstract property.” Id. (citing Mill City Heating & Air Conditioning Co. v. Nelson, 351 N.W.2d 362, 364 (Minn.1984)). Registration was necessary for Suburban to obtain an interest in the land. See Minn.Stat. § 508.47, subd. 1 (2000) (stating that registration of interest is operative act). Such is not the case either in this case or in Moulton. Delivery of the deed here, as in Moulton, gave the intervenor an interest in the property. Because intervenor gained an interest in the property before appellants recorded their notice of lis pen-dens, Fingerhut is inapposite and neither controls our decision here, nor overrules Moulton.

Therefore, because intervenor did not have actual, implied, or constructive notice of the recording of the notice of lis pen-dens, intervenor is a bona fide purchaser. Consequently, intervenor is not bound by any judgment resulting from the action between respondents and appellants. See Johnson, 20 Minn. at 171, 20 Gil. at 155.

Because intervenor is a bona fide purchaser, this appeal is rendered moot. We cannot grant effectual relief to appellants because the property they seek is owned by others unaffected by these proceedings. Therefore, we need not address whether the district court erred in discharging the notice of lis pendens.

DECISION

Appellants seek to reinstate a notice of lis pendens discharged by the district court. Because title to the property at issue is now owned by a bona fide purchaser, who acquired the property prior to the filing of appellants’ disputed notice of lis pendens, this court is unable to grant effectual relief to appellants and this appeal is moot and is therefore dismissed.

Appeal dismissed.

      . For the sake of clarity, we refer to Gesco, Inc. as intervenor, while recognizing that it is a respondent in the instant case.

      . Minn.Stat. § 469.044 allows a public corporation, such as MCDA, to ask for a surety bond when it is involved in litigation that may be injurious to the public interest.

      . Appellants' argument that intervenor was on implied notice because it purchased the property from respondents is also without merit.
      Where we have found implied notice, it has been based upon actual knowledge of facts which would put one on further inquiry, not upon imputed record notice of such facts.

        Anderson, 263 N.W.2d at 384-85 (citations omitted). Consequently, imputing respondents' knowledge to intervenor, without more, would be improper.

      . Other jurisdictions seem to be split regarding this rule. Compare Dime Sav. Bank of New York, FSB v. Sandy Springs Assocs., 261 Ga. 485, 405 S.E.2d 491, 493 (1991) (holding that earlier, unrecorded conveyance not affected by later-filed notice of lis pendens) with W & O Constr. Co. v. IVS Corp., 688 S.W.2d 67, 71 (Tenn.App.1984) (holding that creditor who records lis pendens had priority over bona fide conveyee whose deed was not recorded until after the notice of lis pendens was recorded).

      . The court found that although Frank Sheff signed the Bradleys' purchase agreement, only Agnes Sheff’s name appeared in the chain of title. Id. at 507, 59 N.W.2d at 333.

      . The general rule is that an appeal continues a notice of lis pendens until final judgment is entered on appeal. See Aldrich v. Chase, 70 Minn. 243, 246, 73 N.W. 161, 162 (1897); see also Joslyn, 89 Minn. at 74-75, 93 N.W. at 706.