author: GILBERTSON, Chief Justice.

text:
    2001 SD 134
    The ICEHOUSE, INC., Plaintiff and Appellant, v. Paul GEISSLER and PTG Enterprises, LLC, Defendants and Appellees.
    No. 21768.
    Supreme Court of South Dakota.
    Considered on Briefs Aug. 28, 2001.
    Decided Nov. 7, 2001.

      John K. Nooney, Penny Tibke Platnick, Ryan J. Taylor of Morrill, Thomas, Noo-ney & Braun, LLP, Rapid City, for plaintiff and appellant.
    Mark J. Connot of Gunderson, Palmer, Goodsell & Nelson, Rapid City, for defendants and appellees.
   GILBERTSON, Chief Justice.

[¶ 1.] The Icehouse, Inc. (“Icehouse”) leased portions of a building owned by Paul Geissler and PTG Enterprises, LLC (collectively referred to as “Geissler”). The applicable leases extended through March 5, 2001, with an option to renew for another five-year term held by Icehouse. After a dispute arose as to the parties’ rights under the leases, Icehouse filed a declaratory judgment action. .Geissler filed a counterclaim, alleging numerous material breaches of the leases, and requesting immediate eviction. The circuit court concluded one lease was ambiguous and ordered Icehouse to vacate the premises at the expiration of the lease. We reverse and remand as to the issues raised by Icehouse and affirm as to the issues raised by Geissler upon a notice of review.

FACTS AND PROCEDURE

[¶ 2.] On March 6, 1996, Icehouse executed a lease agreement, referred to as the Warehouse lease, with North Central Supply, Inc. (“North Central”), for portions of a building in Rapid City known as the Manor House Building (“Manor House”). The lease provided for an initial five-year term, and provided Icehouse the option to renew the lease for an additional five-year term. Three specific portions of the Man- or House were leased to Icehouse: a cooler-freezer area, a warehouse bay, and a small office. These areas are not contiguous, but are connected by a common area used by other tenants of the Manor House. Along the common area are a number of loading bays, which are available for use by the tenants of Manor House. Under the terms of the lease, Icehouse was responsible for the purchase and installation of the freezers and coolers. Ownership of the freezers and coolers vests in the Lessor when the lease expires.

[¶ 3.] Icehouse executed another lease with North Central on June 7, 1996, referred to as the Office lease. This lease applied to additional office space in the Manor House. Like the Warehouse lease, the Office lease expired on March 5, 2001, with an option to renew for another five years. The new office space was connected to the warehouse bay and cooler-freezer area by the common area described earlier. Icehouse used these leased areas to operate an ice manufacturing business.

[¶ 4.] North Central sold Manor House to George Taylor on October 4, 1996. In November of 1998, Icehouse and Taylor entered into an oral lease, whereby Ice-house agreed to lease an additional warehouse bay for $1,000 per month. A written agreement for this lease was prepared but never executed by either party. This document is referred to as the “unexecuted lease.” In early 1999, Taylor became interested in selling Manor House. Prior to the sale, Icehouse signed an “Estoppel Certificate.” The purpose of this certificate was to inform potential buyers of the rights and obligations held by the owner of Manor House. The certificate provided that Icehouse held the property “under three (3) written lease agreements dated March 6, 1996, June 7, 1996, and November 1, 1998, respectively.” Taylor eventually sold the property to Geissler on April 19,1999.

[¶ 5.] Approximately one year later, in April of 2000, Geissler requested that Ice-house purchase the Manor House. Ice-house eventually declined to purchase the building on Geissler’s terms. Until that point, Icehouse had paid, and Geissler had accepted, the $1,000 monthly payments pursuant to the oral lease. However, in May 2000, Geissler notified Icehouse he would be raising the rent to $4,000 per month. Rather than pay the increased rent amount, Icehouse vacated the warehouse bay covered by the oral lease. At the same time, Geissler began alleging various breaches of the Warehouse Lease, including unauthorized use of common areas, failure to pay for utilities, unauthorized freezer storage for third parties, contamination of the soil, and failure to remove a junk truck upon timely notice. Geissler also claimed Icehouse was bound by the “hold-over tenant” penalty provisions in the unexecuted lease.

[¶ 6.] On June 12, 2000, Icehouse filed a complaint for declaratory relief, requesting an adjudication of the rights of the parties under the leases. Geissler filed a counterclaim, seeking the holdover tenant penalty and immediate eviction for material breaches of the leases. The parties proceeded to a bench trial on October 12, 2000. The trial court concluded that Geis-sler was not entitled to the holdover penalty because the unexecuted lease was not binding on the parties. It also concluded that assuming Icehouse’s actions were breaches of the leases, none of the alleged breaches were material to the leases, and therefore Geissler was not entitled to rescission and immediate eviction. Finally, the trial court concluded that certain provisions in the Warehouse lease were ambiguous. Because the lease did not contain a severability clause, the trial court felt compelled to cancel the entire lease, thereby precluding Icehouse from exercising its option to renew. As a result, Ice-house was ordered to vacate the premises on March 5, 2001, when the leases expired. Icehouse appeals from the court’s order, raising the following issues:

1. Whether the Warehouse lease is ambiguous.
2. Whether the existence of an ambiguity in a lease precludes the renewal of the lease.
3. Whether the absence of a severability clause requires the termination of the entire lease when particular provisions are unenforceable.

By notice of review, Geissler raises the following additional issues:

4. Whether Icehouse materially breached the leases, justifying rescission and immediate eviction;
5. Whether the terms of the unexecut-ed lease are enforceable;
6. Whether Geissler overcharged Ice-house for water usage;
7. Whether Geissler was entitled to attorney’s fees, costs, and expenses under the lease agreements.

STANDARD OF REVIEW

[¶ 7.] A trial court’s findings of fact are reviewed by this Court under the clearly erroneous standard. Arnold Murray Constr., LLC v. Hicks, 2001 SD 7, ¶ 6, 621 N.W.2d 171, 174. Pursuant to this standard, we will reverse a finding of fact only “if we are left with a definite and firm conviction that a mistake has been made.” Id. “On appeal, this Court can read a contract itself without any presumption in favor of the trial court’s determination.” Thunderstik Lodge, Inc. v. Reuer, 1998 SD 110, ¶ 12, 585 N.W.2d 819, 822 (additional citations omitted). For that reason, the interpretation of contractual provisions is a question of law, which we review de novo. Mahan v. Avera St. Luke’s, 2001 SD 9, ¶ 15, 621 N.W.2d 150, 154. Whether a contractual provision is ambiguous is likewise a question of law, reviewed de novo. St. Paul Fire and Marine Ins. Co. v. Schilling, 520 N.W.2d 884, 886 (S.D.1994) (citations omitted).

ANALYSIS AND DECISION

[¶ 8.] 1. Whether the Warehouse lease is ambiguous.

[¶ 9.] In this action, Icehouse requested a declaration of the parties’ rights under the leases, specifically as to Icehouse’s right to use the common area. The trial court concluded that the Warehouse lease was ambiguous as to the parties’ rights because the lease did not mention the common area. The relevant portion of the lease is section XXVIII, which provides in part:

Vehicle parking will be regulated by a policy that will apply to all tenants and will be developed at a later date. Under such policy, [Icehouse] will be granted exclusive access to the west most door of the south wall to which it is entitled to exclusive possession and reasonable access to docks that it is granted nonexclusive possession of. (emphasis added).

The “west most door” mentioned above lies within the warehouse bay specifically leased by Icehouse under the Warehouse lease. All other docks located in Manor House lie within the “common area.” It is clear from the language quoted above that Icehouse is ¿ntitled to “reasonable access” to those areas. While the word “reasonable” is not defined in the lease, that term alone does not render the provision ambiguous.

[¶ 10.] The trial court also noted section X when making its decision that the lease was ambiguous. That provision provides:

Lessor shall pay for all utilities for the non cooler-freezer warehouse and office areas. Lessor shall install at its expense and [Icehouse] shall pay for all water usage metered through said separate water line to its leased premises.
[Icehouse] shall pay for all of the utility expense for utilities, including electricity and water for the cooler-freezer areas. Separate meters for the electrical usage in the cooler-freezer area shall be utilized to calculate [Icehouse’s] monthly electrical usage for said cooler-freezer area, which meters shall be read by Lessor and Lessor shall bill [Ice-house] monthly for such electrical usage for that area and [Icehouse] shall pay said bill within ten (10) days after being billed by Lessor.
[Icehouse] shall also be responsible for the cost of installation of a new electrical service to [Icehouse’s] leased premises and shall pay all electrical billings for this service directly which new electrical services shall be metered separately. (emphasis added).

At the time of the hearing, no separate metered water line had been installed. Hence, Icehouse was under no obligation to pay for the water used to produce its ice.

[¶ 11.] Pursuant to this provision, Ice-house was responsible for only the electricity used in the cooler-freezer areas. Geis-sler is responsible “for all utilities for the non cooler-freezer warehouse and office areas.” Despite these explicit statements, the trial court concluded that provision was ambiguous.

[¶ 12.] During the peak ice-producing season, Icehouse typically employed portable icemakers and freezers in addition to those in the freezer-cooler area. These icemakers and freezers are positioned in, and use electricity from, the warehouse area. Under the clear terms of the lease, Icehouse is not responsible for electricity used in the warehouse area. Geissler argued, and the trial court concluded, that the lease was ambiguous because Icehouse was not responsible for the electricity used in the production of that ice. We fail to see how that argument creates ambiguity. Geissler is responsible “for all utilities for the non cooler-freezer warehouse and office areas.” When viewed objectively, this phrase can have only one meaning and therefore, no ambiguity exists. See Pesicka v. Pesicka, 2000 SD 137, ¶ 10, 618 N.W.2d 725, 727. The trial court erred in deciding otherwise.

[¶ 13.] When a contract is unambiguous and clear, we determine the parties’ intent from the four corners of the document and extrinsic evidence is not needed. In re Estate of Klauzer, 2000 SD 7, ¶ 14, 604 N.W.2d 474, 478. After declaring the lease provisions ambiguous, the trial court then apportioned the parties’ responsibility for electricity and water. In its conclusions of law, the trial court stated “that certain electricity utilized for purposes of production equipment, although located outside the cooler-freezer warehouse area is the responsibility of the Icehouse, while other electricity which is merely incidental to the use and occupancy of the premises by the Icehouse is the responsibility of the Lessor.” While this disposition may seem equitable and fair, it directly contradicts the terms of the lease, which provide that Geissler “shall pay for all utilities for the non cooler-freezer warehouse and office areas.” There is no distinction made in the Warehouse lease between electricity used for production and electricity “incidentally” used. If the parties had intended to make that distinction, they could have done so. In fact, they did just that in the Office lease. Under that lease, the parties agreed that “Lessor shall be responsible for all general utility expenses consumed upon the premises .... Utility consumption which provides Value added’ to the tenant’s products shall be considered manufacturing utility costs and such costs shall be the sole responsibility of the tenant.” The parties clearly knew how to differentiate between manufacturing and general costs. However, that difference was not incorporated into the Warehouse lease and a court cannot import language into a contract which the parties did not intend. Id. The lease language clearly specifies that Geissler is responsible for all electricity used on the lease premises except the cooler-freezer area. The trial court erred in directing otherwise.

[¶ 14.] The trial court also concluded “that the water utilized by the Ice-house is for purposes of production and is the responsibility of the Icehouse.” This conclusion also clearly contradicts the language of the lease. At the time the Warehouse lease was signed, Icehouse agreed to pay for the water used in the cooler-freezer area, on the condition that the Lessor installed a separate metered water line. That has not been done. If Geissler installs a separate metered water line, Icehouse will then be responsible for the water it uses. Until that time, however, water expense remains Geissler’s responsibility.

[¶ 15.] Again, it may seem equitable and fair to apportion the parties’ responsibilities as the trial court did. However, Ice-house entered into a valid lease agreement with North Central. Pursuant to its obligations under that lease, Icehouse purchased and installed the coolers and freezers. At the expiration of the lease, those coolers and freezers become the property of whoever owns Manor House. The terms of the lease, including the water usage term, were bargained for trade-offs. Geis-sler assumed North Central’s responsibilities when he purchased the Manor House with full knowledge of the accompanying rights and responsibilities. He has failed to fulfill the obligation which would entitle him to receive payment for water usage. We will not relieve Geissler of his obligations simply because it now appears Ice-house received the better bargain. See Roth v. Roth, 1997 SD 75, ¶ 18, 565 N.W.2d 782, 787 (citations omitted). In sum, we reverse the trial court’s conclusion that the lease was ambiguous and reverse its allocation of responsibility under the leases to reflect the clear language of the lease as stated herein.

[¶ 16.] 2. Whether the existence of an ambiguity in a lease precludes the renewal of the lease.

[¶ 17.] After determining the Warehouse lease was ambiguous, the trial court concluded that an ambiguous lease could not be renewed. Because we deem the lease to be unambiguous, this issue becomes moot. Hence, there is no reason why Ice-house cannot exercise its option to renew. The Warehouse lease provides:

Provided [Icehouse] is not in default of this lease agreement, [Icehouse] shall have the option to renew said lease for one additional term of five (5) years, providing that it shall notify Lessor in writing, at least ninety (90) days before the expiration of the lease term of its intention to exercise said option.

Pursuant to this clear language, Icehouse has the option to renew the lease, if proper notice is given and if it is not in default. At trial, the president of Icehouse testified that he intended to exercise the option to renew. Icehouse states in its brief that it gave proper notice of its intent to renew and Geissler has not objected to this claim in his brief.

[¶ 18.] 3. Whether the absence of a severability clause requires the termination of the entire lease when particular provisions are unenforceable.

[¶ 19.] The trial court concluded that certain provisions of the Warehouse lease were ambiguous and therefore unenforceable. As the lease contained no severability clause, the trial court concluded it was forced to cancel the entire lease. Because we reverse the trial court’s conclusions as to ambiguity and enforceability, we need not decide whether the trial court’s cancellation of the lease was warranted.

[¶ 20.] 4. Whether Icehouse materially breached the leases, justifying rescission and immediate eviction.

[¶ 21.] Rescission of a lease “is an equitable remedy, which should only be granted in extraordinary circumstances.” Sejnoha v. City of Yankton, 2001 SD 22, ¶ 11, 622 N.W.2d 735, 739 (citing Mattson v. Rachetto, 1999 SD 51, ¶ 17, 591 N.W.2d 814, 818). In Thunderstik Lodge, we noted that:

As a lease is a contract we will follow the law of contract in regard to breach. “[R]escission of a contract is not generally permitted for a casual, technical, or unimportant breach ..., but only for a breach so substantial as to tend to defeat the very object of the contract.” This Court has held that a breach must be “substantial” and relate to a “material” aspect of the contract to warrant rescission. A “material breach” would defeat “the very object of the contract.”

1998 SD 110 at ¶ 25, 585 N.W.2d at 825 (internal citations omitted). Whether a party’s conduct constitutes a material breach of contract is a question of fact. Moe v. John Deere Co., 516 N.W.2d 332, 335 (S.D. 1994) (citations omitted); Roberts v. Wyman, 135 Idaho 690, 23 P.3d 152, 159 (2000); Kaiser v. Market Square Discount Liquors, Inc., 992 P.2d 636, 640 (Colo.App.1999). As such, the trial court’s finding that none of the alleged breaches were material will be reversed only if clearly erroneous. Arnold Murray Constr., 2001 SD 7 at ¶ 6, 621 N.W.2d at 174. We find no such clear error.

[¶ 22.]. Geissler alleges Icehouse violated the Warehouse lease by:

failing to remove a junk truck after being given notice, failing to pay for water used by the Icehouse, storage of oil drums and resultant contamination from spillage of oil, usage of the ramp area for loading and unloading that was located outside the areas leased by the Ice-house, usage of Manor House electricity for the production of ice, and subletting cooler and freezer warehouse areas of the Manor House without prior written approval.

We have already determined that, as to the issues of usage of water and electricity, Icehouse had complied with the lease provisions. As for the ramp areas, Icehouse was entitled to reasonable access. Geis-sler has failed to establish the trial court was clearly erroneous in finding Icehouse’s use of the ramp areas was so unreasonable as to constitute a material breach. Additionally, Icehouse did not sublet the cooler-freezer space, it merely stored frozen meat for various customers. Subletting involves the transfer of legal right of occupancy, which has not occurred. The matters of the junk truck and oil drum storage, if breaches at all, do not “defeat the very object of the contract” and are therefore not material. Thunderstik Lodge, 1998 SD 110 at ¶ 25, 585 N.W.2d at 825. Geissler has failed to show clear error by the trial court.

[¶ 23.] 5. Whether the terms of the unexecuted lease are enforceable.

[¶ 24.] The trial court concluded that the unexecuted lease was not enforceable, therefore, Icehouse was not subject to the holdover tenant provision contained therein. There is no dispute that Icehouse did not sign the unexecuted lease. However, Geissler argues the unexecuted lease is enforceable because of the Estoppel Certificate signed by Icehouse. That certificate was prepared by George Taylor to facilitate the sale of Manor House and stated that Icehouse “holds the premises under three (3) written lease agreements dated March 6, 1996, June 7, 1996, and November 1, 1998 respectively.” Geissler argues this statement gives effect to all the provisions of the unexecuted lease, including the provision that doubles the rent for periods beyond the term provided in the document, October 31,1999.

[¶ 25.] In its findings of fact, the trial court noted “[t]hat the Oral Lease was never reduced to writing or memorialized by any written document purporting to contain terms and conditions in addition to those of the Oral Lease and that the parties never assented to the terms and conditions of any such purported written document.” We review this finding only for clear error. Arnold, Murray Constr., 2001 SD 7 at ¶6, 621 N.W.2d at 174. Bob Smith, president of Icehouse, testified that he had orally agreed to pay $1,000 per month to rent the second warehouse bay. Pursuant to the oral agreement, Icehouse paid, and the owner accepted, that sum each month. Bob Smith also testified that he had never seen the unexecuted lease before the present litigation. Besides the oral agreement to pay $1,000 per month for a second warehouse bay, there was no meeting of the minds as to any other terms contained in the unexecuted lease, in particular the hold-over penalty. See Jacobson v. Gulbransen, 2001 SD 33, ¶ 22, 623 N.W.2d 84, 90. Even the Estoppel Certificate evidences no provisions other than the property leased and the payment amount. Therefore, we cannot say the trial court was clearly erroneous in finding no meeting of the minds and refusing to enforce the terms of the unexecuted lease.

[¶ 26.] 6. Whether Geissler overcharged Icehouse for water usage.

[¶ 27.] The trial court found that Geissler had charged Icehouse $3,505.37 for water used from June 28, 2000 to September 16, 2000, when Geissler had been billed only $2,872.33 by the City during that same period. Geissler argues this finding was clearly erroneous and points to contrary testimony from the Manor House manager. The trial court’s finding is supported by invoices from the City office to Geissler, which clearly show that Geissler was overcharging Icehouse for water usage. Therefore, the court’s finding is not clearly erroneous.

[¶ 28.] 7. Whether Geissler was entitled to attorney’s fees, costs, and expenses under the lease agreements.

[¶ 29.] Pursuant to the Warehouse lease, Icehouse agreed to

indemnify and save [Geissler] harmless from all penalties, claims, demands, liabilities, expenses and losses, of whatever nature arising from [Icehouse’s] use of the lease premise .... This indemnification shall extend to and include a reasonable attorney fee incurred by [Geissler] for any litigation to which the Lessor is made a party or threatened to be made a party and which arises out of the use and occupation of the lease premises by [Icehouse].

The trial court ruled this provision inapplicable. We agree. These provisions are generally recognized to provide indemnity when third parties bring an action against the indemnitee, but not, as here, when the dispute is between the two contracting parties. See Bridgestone/Firestone, Inc. v. Recovery Credit Services, Inc., 98 F.3d 13, 21 (2d Cir.1996); Hooper Assoc., Ltd. v. AGS Computers, Inc., 74 N.Y.2d 487, 549 N.Y.S.2d 365, 548 N.E.2d 903, 905 (1989); Derr Const. Co. v. City of Houston, 846 S.W.2d 854, 858 (Tex.App.1992); Ray D. Baker Contractor, Inc. v. Chris Nelsen & Son, Inc., 1 Mich.App. 450, 136 N.W.2d 771, 773 (1965).

[¶ 30.] Judgment is reversed and remanded in part as to the issues raised by Icehouse and affirmed as to the issues raised by Geissler.

[¶ 31.] SABERS, AMUNDSON and KONENKAMP, Justices, concur.

[¶ 32.] MILLER, Retired Chief Justice, was a member of the Court at the time this action was submitted, but was disqualified and did not participate.

      . The trial court's order was stayed pending the outcome of this appeal.

      . Therefore, the evidence heard by the trial court as to custom and course of performance under the contract is not relevant to our determination.


source: Caselaw Access Project

author: KONENKAMP, Justice (on reassignment). SABERS, Justice

license: Public Domain

text:
    2001 SD 135
    Beverly PATTERSON, Plaintiff and Appellant, v. Clifford L. LINN, individually, and as Mayor of the City of Sturgis, South Dakota; and, City of Sturgis, South Dakota, a Municipal Corporation, Defendants and Appellees,
    No. 21745.
    Supreme Court of South Dakota.
    Considered on Briefs May 29, 2001.
    Reassigned Sept. 10, 2001.
    Decided Nov. 7, 2001.

      Richard A. Pluimer, Belle Fourehe, for plaintiff and appellant.
    Sarah Hirsch Wittmuss and James S. Nelson of Gunderson, Palmer, Goodsell & Nelson, Rapid City, for defendants and appellees.
   KONENKAMP, Justice (on reassignment).

[¶ 1.] By statute, the mayor in an alder-manic-governed municipality has the authority to remove officers the mayor appointed. Clifford L. Linn, the mayor of Sturgis, summarily fired the city finance officer during her one-year term. The city has a personnel policy outlining legal procedures for discharging employees, but it was not followed. The finance officer brought suit. In granting summary judgment for the mayor and the city, the circuit court concluded that even if the personnel policy applied, it could not override the statute empowering the mayor to remove an officer. We. affirm.

Background

[¶ 2.] Beverly Patterson served as the finance officer for Sturgis, South Dakota. She had worked for the city since April 1980, first as auditor and later as finance officer. On May 3, 1999, she was reappointed to the position, when the mayor executed a warrant of appointment “for the term of one year from and after May 3, 1999, and until your successor is appointed or elected and has qualified.” The Sturgis City Council approved the appointment “for the year 1999-2000.”

[¶ 3.] On the day before Patterson’s termination, the mayor and city council consulted with the city attorney. The attorney advised that Patterson “serves at the pleasure of the mayor, and that the mayor can terminate the finance officer.” This advice was based on counsel’s interpretation of SDCL 9-14-13 and our decision in Finch v. City of Tea, 443 N.W.2d 632 (S.D.1989). The attorney’s opinion did not take into account the city’s personnel policy handbook. This handbook, applicable to “all appointed city officials, management employees, contract employees and part-time employees,” granted employees certain pretermination rights. Its procedures included the right to a hearing and notice.

[¶ 4.] The mayor terminated Patterson’s employment on August 3, 1999. He gave no notice of intended termination, no written statement of charges, no explanation of evidence against her, and no hearing. Later the mayor explained why he gave no reason for his decision: “I felt I didn’t need to. She worked at my pleasure.”

[¶ 5.] Patterson sued under a multiple count complaint. The circuit court granted summary judgment in favor of the may- or and the city, reasoning that Patterson was an at-will employee. One count was settled by the parties, and Patterson now appeals, asserting that the court erred in holding that she did not have an express contract for a one-year term and in ruling that the city’s personnel handbook was inapplicable to her case.

Analysis and Decision

[¶ 6.] Our standard of review for summary judgments has been recited in numerous cases and need not be repeated here. See Kobbeman v. Oleson, 1998 SD 20, ¶ 4, 574 N.W.2d 633, 635. The circuit court ruled, as a matter of law, that Patterson did not have an enforceable one-year contract. As authority for its decision, the court relied on SDCL 9-14-13, granting the mayor power to dismiss an appointed officer at any time without cause.

[¶ 7.] To address Patterson’s claims, we construe SDCL 9-14-13. It specifies the mayoral power to remove officers the mayor appointed:

In an aldermanic-governed first and second class municipality the mayor shall have power except as otherwise provided to remove from office any officer appointed by him, whenever he shall be of the opinion that the interest of the municipality demand such removal, but he shall report the reasons for his removal to the council at its next regular meeting.

SDCL 9-14-13. We discern legislative intent by reading the statute as a whole, along with enactments relating to the same subject. State v. Barton, 2001 SD 52, ¶ 8, 625 N.W.2d 275, 278 (citations omitted). We presume the Legislature intended no absurd or unreasonable purpose. Id. Where a grant of power appears to be delimited by statute, we will strictly resolve against a municipality power taken in excess of that grant. Sioux Falls v. Peterson, 71 S.D. 446, 448, 25 N.W.2d 556, 557 (1946)(interpreting a grant of municipal police power).

[¶ 8.] Patterson hinges her argument on the “except as otherwise provided” language in the statute to assert that the mayor’s removal power was modified by the city employment policy. Statutory removal power of officers is one of the “great” powers afforded municipalities. See Finck v. City of Tea, 443 N.W.2d 632, 634 (S.D.1989). To interpret the phrase “except as otherwise provided” as meaning to permit a city to grant tenure to a city officer makes the statute self-contradictory and contravenes the pattern of municipal governance defined in our statutory scheme. The phrase “except as otherwise provided” can logically apply only to the Legislature’s authority to grant exceptions by statute, not to a city’s authority to make an exception for itself.

[¶ 9.] The power to remove appointed officers is necessary to the exigencies of administrating local government. 12 McQuillan, Municipal Corporations, § 12.233 at 380 (3d ed. 2000). This design is evinced in the plain language of SDCL 9-14-13. It provides that the mayor may remove an officer when, in the mayor’s sole opinion, removal is in the best interest of the municipality. See Finck, 443 N.W.2d at 634. The interpretation Patterson advances clashes with the principles of municipal law upheld in Ruple v. Weinaug:

[The] power given by the constitution or statute to remove an officer from office without notice or hearing may be exercised notwithstanding that by ordinance, by law, or order of appointment, an attempt has been made to fix a definite term of office for the officer, or provide for notice and hearing in removal proceedings.

328 N.W.2d 857, 859 (S.D.1983) (emphases added). City policies, like city ordinances, must stay -within “reasonably strict” adherence to their statutory ambit. City of Marion v. Schoenwald, 2001 SD 95 ¶ 6, 631 N.W.2d 213, 216.

[¶ 10.] Interpreting SDCL 9-14-13 as Patterson advocates would entitle a common council effectively to annul the Legislature’s express grant of removal power and allow an outgoing regime to install officers for an incoming regime. A city council could, at the end of a mayor’s term, grant extended terms of office to existing officers, thus pre-selecting officers to serve under the incoming mayor. As the circuit court recognized, in an aldermanic form of government, such an ordinance could be passed by a majority vote of the aldermen. SDCL 9-8-10. Even a mayoral veto could be overridden by a two-thirds vote of the council. SDCL 9-8-3; SDCL 9-19-11. On Patterson’s theory, what would preclude a city council from granting appointed officials consecutive, extended, or even life terms? This interpretation runs counter to the general management structure of municipalities.

[¶ 11.] With few exceptions, a city council cannot bind future councils: municipalities are prohibited, for example, from incurring indebtedness in excess of that appropriated for a fiscal year. See SDCL 9-21-8 (identifying limited exceptions); SDCL 9-21-15; see also 15 McQuillan, supra § 41.10 at 375. Under SDCL 9-14-13, Patterson’s appointed position was terminable when the mayor decided it was in the city’s best interests. A contrary reading of this statute leads to the inconsonant result that a city can override the powers conferred upon it by the Legislature.

[¶ 12.] Affirmed.

[¶ 13.] GILBERTSON, Chief Justice, and MILLER, Retired Chief Justice, concur.

[¶ 14.] SABERS and AMUNDSON, Justices, dissent.

SABERS, Justice

(dissenting).

[¶ 15.] It is apparent that the plain language of SDCL 9-14-13 provides the May- or with the power to remove employees when it is deemed necessary. In that regard, this statute recognizes that employees appointed by the Mayor may be at-will. The statute, however, does not prevent a Mayor from hiring employees for specific terms. The statute recognizes a limit on the power to remove an employee by conditioning that power with the language “unless otherwise provided.” The language contained in SDCL 9-14-13 is in accord with the rule that South Dakota is an employment at-will state, with exceptions that can remove an employee from the at-will status. SDCL 60-4-4. See also Merritt v. Edson, 437 N.W.2d 528, 529 (S.D.1989) (holding that in the absence of a written contract or specified term of employment the employee is terminable at-will).

[¶ 16.] The majority opinion erroneously states that “to interpret the phrase ‘except as otherwise provided’ as meaning to permit a city to grant tenure to a city officer makes the statute self-contradictory and contravenes the pattern of municipal governance defined in our statutory scheme.” The majority opinion fails to appreciate the fact that Mayor chose to appoint Patterson to a one-year term. Mayor specified the one-year term and Council approved that appointment. Mayor, himself, decided to limit his power to terminate at-will. A city council cannot remove the at-will status, only Mayor can. The facts here also demonstrate that Patterson was appointed and serving under Mayor. The majority opinion states that, if Patterson’s interpretation of SDCL 9-14-13 is adopted, it “would entitle a common council effectively to annul the Legislature’s express grant of removal power and allow an outgoing regime to install officers for an incoming regime.” The majority opinion sets forth a parade of horribles that simply does not exist. This is not a situation where the outgoing officer made “midnight appointments” to preserve his legacy. The majority opinion is addressing an issue that is not there. The majority opinion is not beating a dead horse, it is beating a nonexistent one.

[¶ 17.] The majority opinion seizes on the language of SDCL 9-14-13 to determine that the Mayor hires at-will. Yet, it is clear that in South Dakota at-will employment is the norm, not the exception. SDCL 60-4-M. Why would the Legislature duplicate itself by reasserting the at-will statute in SDCL 9-14-13?

[¶ 18.] Instead, the Legislature has indicated with SDCL 9-14-13 that Mayor has the power to hire and fire any official, even if the person is not at-will, to protect the public when it is deemed necessary. The statute clearly indicates Mayor has the power to remove an employee when he is of “the opinion that the interests of the municipality demand.” The majority opinion relies upon Ruple, 328 N.W.2d at 859, and Finch, 443 N.W.2d at 632, to support its point. This reliance is misplaced. In these cases, we upheld the termination of both employees based on their at-will status. Significantly, neither case involved employees who were hired for a specified term and are therefore distinguishable.

[¶ 19.] The majority opinion mistakes the power to remove an employee to protect the municipality with a blanket rule that no official may be hired unless he or she is at-will. This is tantamount to hamstringing municipal governments. The protections afforded a contract or term employee are a legitimate bargaining tool for the municipality to attract experienced and competent personnel. SDCL 9-14-13 allows municipalities that power, but it also allows the Mayor to get rid of a person with expedience if a problem develops. Nonetheless, this quick action does not relieve the municipality from liability if the removal was without just cause. That determination can only be made at trial.

[¶ 20.] The Mayor hired Patterson for a one-year term and such hiring was approved by the City Council. The warrant of appointment was signed by Patterson and the Mayor. (See Attachment). The position taken by the City and supported by the majority would seem to constitute fraud if the parties were reversed. Patterson proved that Mayor relinquished his power to remove her without regard to liability. Therefore, summary judgment was inappropriate and I respectfully dissent.

[¶ 21.] AMUNDSON, Justice, joins this dissent.

      . In interpreting SDCL 9-14-13, we wrote in Finck that this statute confers on the mayor “full and absolute power to remove appointed officers whenever, in his opinion, the interests of the city require it[.]” Finck, 443 N.W.2d at 634.

      . It is noteworthy that SDCL 9-14-13 is not the only method for removing local appointed officials. Another method for removal is provided in SDCL 3-17-6 and 3-17-7. Furthermore, a municipal officer may be removed by the court for "palpable omission of duty ... oppression, misconduct, or malfeasance in the discharge of the duties of his office." SDCL 9-14-37.

      . As a practical matter, the Legislature could have reasonably contemplated that the inability to limit at-will status could compromise the ability to hire and retain competent and experienced personnel.


author: LANCASTER, Justice.

text:
    STATE of Minnesota, Petitioner, Appellant, v. Jay Joseph GROSSMAN, Respondent.
    No. C8-00-459.
    Supreme Court of Minnesota.
    Dec. 13, 2001.
    Mike Hatch, Atty. Gen., St Paul, James C. Backstrom, Dakota County Atty., Kathryn M. Keena, Asst. Dakota County Atty., Hastings, for appellant.

      Robert D. Sicoli, Sarah M. Aho, Thompson, Sicoli & Aho, Ltd., Minneapolis, for respondent.
   OPINION

LANCASTER, Justice.

This case involves application of the United States Supreme Court’s holding in Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000), to Minnesota’s patterned sex offender sentence enhancement statute, Minn.Stat. § 609.108 (2000).

Jay Grossman was convicted of, inter alia, first-degree criminal sexual conduct (fear of imminent great bodily harm) in violation of Minn.Stat. § 609.342, subd. 1(c) (1998), an offense that carries a maximum sentence of 30 years’ imprisonment. Minn.Stat. § 609.342, subd. 2 (1998). The sentencing court enhanced Grossman’s sentence pursuant to Minn.Stat. § 609.108, subd. 2 (2000), imposing a 40-year sentence after making a series of findings by a preponderance of the evidence. Grossman appealed his sentence, arguing that Minn. Stat. § 609.108, as applied to him, violates Apprendi. The court of appeals accepted Grossman’s argument and remanded for imposition of a 30-year sentence. State v. Grossman, 622 N.W.2d 394, 399 (Minn. App.2001). We affirm.

On November 24,1998, R.C. met a number of her coworkers for happy hour at A1 Baker’s, a restaurant and bar in Eagan, Minnesota. At some point during the evening, R.C. and one of her coworkers left A1 Baker’s and went to Moose Country, a restaurant in Lilydale, Minnesota, to attend a birthday party. R.C., feeling that she was too intoxicated to drive, left her car at A1 Baker’s and rode to Moose Country with her coworker.

The bouncers at Moose Country eventually asked R.C. to leave because they perceived that she was highly intoxicated. R.C. and her coworker left at that time. R.C. wanted to wait outside because she wished to speak with a man who was still inside. After trying for 30-45 minutes to persuade R.C. to ride home with him, her coworker drove home without her.

Meanwhile, Grossman was at Moose Country for a separate birthday celebration. R.C. did not know Grossman or anyone in his party. When Grossman left Moose Country, he saw one or two of his friends talking with R.C. outside. R.C. told them that she was stranded and in need of a ride home. Grossman agreed to give R.C. and a woman in his party a ride home.

Grossman first dropped the other woman off at her apartment in Saint Paul, Minnesota, and then continued on toward A1 Baker’s, where R.C. planned to pick up her car. When they got close to A1 Baker’s, R.C. realized that she was still too intoxicated to drive. She requested that Grossman take her to her friends’ townhouse nearby. Grossman drove around the area in search of the townhouse and parked his car when R.C. spotted a friend’s parked vehicle.

R.C. testified that the next thing she remembered was opening her eyes to find Grossman on top of her, raping her. She was lying on her back in a field, naked from the waist down. R.C. tried to scream, at which point Grossman stopped raping her and put his hands over her mouth. She fought back; biting, punching, kicking, and scratching Grossman. He responded by punching her repeatedly in the face, chest, and stomach. Grossman then placed his hands around R.C.’s neck and began to strangle her. R.C. testified that she could not breathe and that Gross-man only stopped choking her when she pretended to be dead. According to R.C., Grossman then raped her again and left her lying in the field.

R.C. remained in this position for 30 minutes, waiting to move until she was sure Grossman was gone. When she felt it was safe, R.C. got up and knocked on the doors of two houses in the area. The residents called 911 and the police arrived on the scene shortly thereafter.

Testimony of medical personnel established the extent of R.C.’s injuries, including multiple abrasions; scratches on her chest, abdomen, legs, and inner thighs; bruising to her face, forehead, ear, eyes, jaw, neck, chest, arms, legs, and inner thighs; a fractured left rib; a torn lingular frenelum (the tissue that attaches the tongue to the bottom of the mouth); bloodshot eyes and hemorrhaging around the eyes; irritation of the iris; and chipped teeth. In addition, there was testimony that red spots called “petechiae” observed on R.C.’s face and neck were consistent with her having been strangled.

In his testimony at trial, Grossman admitted that he severely beat R.C. and caused her injuries. He denied, however, that he raped R.C. and stated that he never intended to kill her.

The jury returned guilty verdicts on six counts: attempted second-degree murder in violation of Minn.Stat. § 609.19, subd. 1(1) (2000); first-degree assault (great bodily harm) in violation of Minn.Stat. § 609.221, subd. 1 (2000); third-degree assault (substantial bodily harm) in violation of Minn.Stat. § 609.223, subd. 1 (2000); first-degree criminal sexual conduct (fear of imminent great bodily harm) in violation of Minn.Stat. § 609.342, subd. 1(c); first-degree criminal sexual conduct (force or coercion) in violation of Minn.Stat. § 609.342, subd. l(e)(i); and first-degree criminal sexual conduct (mentally impaired, mentally incapacitated, or physically helpless) in violation of Minn.Stat. § 609.342, subd. l(e)(ii).

At the sentencing hearing, the court entered convictions for attempted second-degree murder and first-degree criminal sexual conduct (fear of imminent great bodily harm) and then proceeded to sentence Grossman for first-degree criminal sexual conduct. The court began by noting that “violation of [Minn.Stat. § 609.342] carries with it a penalty of not more than 30 years in prison, a fine of $40,000.00 or both, unless you are determined by this court to be a patterned sex offender [under Minn. Stat. § 609.108], in which case the penalty is not more than 40 years in prison.”

The sentencing court, based upon its review of a court-ordered psychological and psychosexual evaluation, found that Grossman qualified as a patterned sex offender. The sentencing court also made the following findings pursuant to Minn. Stat. § 609.108: that Grossman’s crime was motivated by sexual impulses and was part of a predatory pattern of behavior that had criminal sexual conduct as its goal; that he is a significant danger to the public; that he needs long-term treatment or supervision beyond the presumptive term of imprisonment and supervised release; and that the record was “filled with aggravating circumstances.” After making these findings, the court sentenced Grossman to 40 years’ imprisonment under Minn.Stat. § 609.108, subd. 2.

Grossman appealed his sentence, claiming that the 40-year prison term violates due process. Grossman, 622 N.W.2d at 395. Specifically, he argued that Minn. Stat. § 609.108, as applied to him, runs afoul of Apprendi, in which the Court held that “[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury and proved beyond a reasonable doubt,” 530 U.S. at 490, 120 S.Ct. 2348. Gross-man, 622 N.W.2d at 395.

The court of appeals agreed and “remanded [Grossman’s sentence] for imposition of the statutory maximum sentence of 30 years under Minn.Stat. § 609.342, subd. 2 (1998).” Grossman, 622 N.W.2d at 399. The court of appeals determined that Minn.Stat. § 609.108, subd. 2, authorized the sentencing court to impose an enhanced sentence based on its findings concerning three factual issues. Grossman, 622 N.W.2d at 398. However, the court of appeals read Apprendi to require that all such findings be made by a jury based on proof beyond a reasonable doubt. Grossman, 622 N.W.2d at 399. We granted the state’s petition for review and now affirm the decision of the court of appeals.

This court reviews the constitutionality of a statute de novo. State v. Wolf, 605 N.W.2d 381, 386 (Minn.2000); State v. Chambers, 589 N.W.2d 466, 479 (Minn.1999). Statutes are presumed constitutional. Boutin v. LaFleur, 591 N.W.2d 711, 714 (Minn.1999); Chambers, 589 N.W.2d at 479. A party challenging a statute on constitutional grounds must demonstrate, beyond a reasonable doubt, that the statute violates a provision of the constitution. Wolf, 605 N.W.2d at 386; Boutin, 591 N.W.2d at 714.

Grossman argues that Minn.Stat. § 609.108, as applied to him, violates the rule of due process announced by the Court in Apprendi. In Apprendi, the defendant was charged under New Jersey law with second-degree possession of a firearm for an unlawful purpose. 530 U.S. at 469, 120 S.Ct. 2348. The charges stemmed from his firing several gunshots into the home of an African-American family that had recently moved into a previously all-white neighborhood. Id. A New Jersey statute set the range of penalties for a second-degree offense at 5 to 10 years. Id. at 470, 120 S.Ct. 2348. A separate hate crime statute established an enhanced sentencing range of 10 to 20 years if the trial court found, by a preponderance of the evidence, that the defendant’s offense was committed with a purpose to intimidate an individual or group of individuals because of, inter alia, race. Id. at 468-69,120 S.Ct. 2348.

Apprendi pleaded guilty to the second-degree possession charge. Id. at 469, 120 S.Ct. 2348. The sentencing court then held an evidentiary hearing, concluded by a preponderance of the evidence that Ap-prendi’s crime “was motivated by racial bias,” and sentenced him under the hate crime statute to an enhanced term of 12 years. Id. at 470-71, 120 S.Ct. 2348. Ap-prendi appealed, arguing “that the Due Process Clause of the United States Constitution requires that the finding of bias upon which his hate crime sentence was based must be proved to a jury beyond a reasonable doubt.” Id. at 471, 120 S.Ct. 2348. The New Jersey appellate court upheld the enhanced sentence and the state supreme court affirmed. Id. at 471-72,120 S.Ct. 2348.

The United States Supreme Court reversed and remanded, holding that the procedure employed by the sentencing court violated Apprendi’s constitutional rights under the Due Process Clause of the Fifth Amendment and the notice and jury trial guarantees of the Sixth Amendment, as applied to the states by the Fourteenth Amendment. Id. at 476, 120 S.Ct. 2348 (citing Jones v. United States, 526 U.S. 227, 243 n. 6, 119 S.Ct. 1215, 143 L.Ed.2d 311 (1999)). The Court articulated the following constitutional rule: “Other than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.” Id. at 490, 120 S.Ct. 2348.

Although Grossman was convicted and sentenced prior to the Court’s decision in Apprendi, its holding must be applied on this direct appeal. See Griffith v. Kentucky, 479 U.S. 314, 328, 107 S.Ct. 708, 93 L.Ed.2d 649 (1987) (holding that new rules for the conduct of criminal prosecutions must be applied retroactively to all criminal cases pending on direct review).

Grossman was convicted of and sentenced for first-degree criminal sexual conduct in violation of Minn.Stat. § 609.342, subd. 1(c). Minnesota Statutes § 609.342, subd. 2, provides that an individual convicted of this offense “may be sentenced to imprisonment for not more than 30 years.” Thus, the jury’s guilty verdict exposed Grossman to, at most, a 30-year prison term. Grossman was sentenced to 40 years of imprisonment, a term that exceeded the prescribed statutory maximum for his offense by 10 years.

The sentencing court imposed Gross-man’s enhanced sentence pursuant to Minn.Stat. § 609.108. Subdivision 1(a) of section 609.108 requires a court to impose a sentence of not less than double the presumptive sentence and not more than the statutory maximum sentence when each of the following three conditions is satisfied: First, the court must be imposing a sentence for a conviction of any of four enumerated offenses, including first-degree criminal sexual conduct, or for a conviction of any other predatory crime “if it reasonably appears to the court that the crime was motivated by the offender’s sexual impulses or was part of a predatory pattern of behavior that had criminal sexual conduct as its goal.” Minn.Stat. § 609.108, subd. 1(a)(1) (2000). Second, the court must find “that the offender is a danger to public safety.” Id. subd. 1(a)(2). Third, the court must also find “that the offender needs long-term treatment or supervision beyond the presumptive term of imprisonment and supervised release.” This finding “must be based on a professional assessment by an examiner experienced in evaluating sex offenders that concludes that the offender is a patterned sex offender.” Id. subd. 1(a)(3). As interpreted by this court in State v. Christie, 506 N.W.2d 293 (Minn.1993), the findings required by subdivision 1 must be based on a preponderance of the evidence. Id. at 299.

Section 609.108, subdivision 2, permits a court to impose a sentence of up to 40 years, “notwithstanding the statutory maximum imprisonment penalty otherwise provided for the offense.” A defendant can be sentenced to an increased penalty under subdivision 2 only if “the factfinder determines, at the time of the trial or the guilty plea, that a predatory offense was motivated by, committed in the course of, or committed in furtherance of sexual contact or penetration, as defined in section 609.341, and the court is imposing a sentence under subdivision 1.” Id.

According to the state, the court’s findings under section 609.108, subdivision 1, by themselves, do not authorize imposition of a penalty exceeding 30 years, the prescribed statutory maximum for first-degree criminal sexual conduct. That much is true; a sentence under section 609.108, subdivision 1(a), is limited by the statutory maximum for the substantive offense. From here, the state’s argument proceeds to the proposition that the only finding that subjected Grossman to an enhanced sentence was a determination by “the fact-finder” — in this case, the jury — that his offense “was motivated by, committed in the course of, or committed in furtherance of sexual contact or penetration.” Id. subd. 2. The state urges this court to isolate the “sexual penetration” requirement in determining whether Grossman’s sentence is constitutional in light of Ap-prendi

Because “sexual penetration with another person” is an element of first-degree criminal sexual conduct, the jury’s guilty verdict on this count necessarily included a finding beyond a reasonable doubt that Grossman had engaged in sexual penetration. See Minn.Stat. § 609.342, subd. 1. Yet the jury’s finding of sexual penetration did not, by itself, expose Gross-man to an increased sentence. Section 609.108, subdivision 2, contains the additional mandate that “the court is imposing a sentence under subdivision 1.” As demonstrated above, subdivision 1 requires the sentencing court to make a series of findings by a preponderance of the evidence.

In essence, the sentencing court’s authority to act under subdivision 2 was subject to two conditions precedent: (1) the jury had to find sexual contact or penetration; and (2) the court had to make the findings required by subdivision 1. Both the finding of the jury and those of the court were necessary, but neither was sufficient. To separate the two conditions would be to disregard the text of subdivision 2, which places the conjunctive “and” between them. Interpreting the statute in a manner that ignores its plain and unambiguous language would violate well-established rules of statutory construction. See Burkstrand v. Burkstrand, 632 N.W.2d 206, 210 (Minn.2001); Kersten v. Minnesota Mut. Life Ins. Co., 608 N.W.2d 869, 874-75 (Minn.2000) (“When the language of the statute is plain and unambiguous, it manifests the legislative intent and we must give the statute its plain meaning.”).

The state also argues that the present case can be distinguished from Apprendi on the grounds that, unlike the factor at issue in Apprendi, the factors contained in Minn.Stat. § 609.108, subd. 1, are sentencing factors that relate to the defendant rather than the offense and have been traditionally determined by the sentencing court.

New Jersey made a similar argument in Apprendi, claiming that “[t]he required finding of biased purpose is not an ‘element’ of a distinct hate crime offense, but rather the traditional ‘sentencing factor’ of motive.” 530 U.S. at 492, 120 S.Ct. 2348. The Court characterized New Jersey’s line of reasoning on this point as “nothing more than a disagreement with the rule we apply today,” id. at 492, 120 S.Ct. 2348, and described the distinction between “elements” and “sentencing factors” as “constitutionally novel and elusive,” id. at 494, 120 S.Ct. 2348. As the Court made clear, “the relevant inquiry is one not of form, but of effect — does the required finding expose the defendant to a greater punishment than that authorized by the jury’s guilty verdict?” Id.

Under Apprendi, then, the fact that the findings listed in Minn.Stat. § 609.108, subd. 1, are of a kind traditionally left to the sentencing court rather than the jury is simply not relevant to the constitutional issue at hand. The effect of the sentencing court’s findings, when coupled with the jury’s finding of sexual penetration, was to increase by 10 years the prison sentence to which Grossman was exposed. Due process requires that each of these findings be made by a jury based on proof beyond a reasonable doubt. Apprendi, 530 U.S. at 490, 120 S.Ct. 2348. Thus, Minn.Stat. § 609.108, subd. 2, as applied to Grossman, is unconstitutional.

In Apprendi, the Court quoted Justice Holmes’s observation that ‘[t]he law threatens certain pains if you do certain things, intending thereby to give you a new motive for not doing them.’ ” Apprendi, 530 U.S. at 476, 120 S.Ct. 2348 (quoting Oliver Wendell Holmes, The Common Law 40 (M. Howe ed. 1963)). In this case, it is clear1 that Minnesota threatened Grossman with certain pains — specifically, up to 30 years in prison — if he committed first-degree criminal sexual conduct. Minnesota threatened him with additional pains — specifically, up to an additional 10 years in prison' — if the conditions of Minn. Stat. § 609.108, subd. 2, were satisfied. “As a matter of simple justice, it seems obvious that the procedural safeguards designed to protect [Grossman] from unwarranted pains should apply equally” to all of the facts Minnesota has singled out for enhanced punishment. Apprendi, 530 U.S. at 476,120 S.Ct. 2348.

Affirmed and remanded for imposition of the statutory maximum sentence of 30 years under Minn. Stat. § 609.342, subd. 2.

      . Grossman’s testimony at trial filled in the gap in R.C.’s memory. Grossman stated that he struck R.C. in the face soon after they got out of his car, knocking her unconscious.

      . The Court stated that its analysis on this point "is not [meant] to suggest that the term 'sentencing factor’ is devoid of meaning.” Apprendi, 530 U.S. at 494 n. 19, 120 S.Ct. 2348. The Court explained as follows:
      The term ["sentencing factor”] appropriately describes a circumstance, which may be either aggravating or mitigating in character, that supports a specific sentence within the range authorized by the jury's finding that the defendant is guilty of a particular offense. On the other hand, when the term "sentence enhancement” is used to describe an increase beyond the maximum authorized statutory sentence, it is the functional equivalent of an element of a greater offense than the one covered by the jury’s guilty verdict. Indeed, it fits squarely within the usual definition of an "element” of the offense.

        Id.

      . While Grossman has not made a facial challenge to Minn.Stat. § 609.108, subd. 2, we feel compelled to note our doubts as to whether there are any circumstances under which subdivision 2 could be constitutionally applied.


author: STONEBURNER, Judge.

text:
    Frank HOWARD, d/b/a Protography, Appellant, v. MINNESOTA TIMBERWOLVES BASKETBALL LIMITED PARTNERSHIP, Respondent, Ogden Entertainment, Inc., Respondent.
    No. C3-01-864.
    Court of Appeals of Minnesota.
    Nov. 27, 2001.

      Harvey H. Eckart, Reinhardt and Anderson, St. Paul, MN, for appellant.
    Douglas R. Peterson, Mankato, MN; and David M. Jaffe, Leonard, Street and Deinard, Minneapolis, MN, for respondent Timberwolves.
    Eric J. Rucker, Briggs and Morgan, Minneapolis, MN, for respondent Ogden.
    Considered and decided by STONEBURNER, Presiding Judge, TOUSSAINT, Judge, and WILLIS, Judge.
   OPINION

STONEBURNER, Judge.

On appeal from a grant of summary judgment, appellant Frank Howard argues that the district court made impermissible findings of fact and erred as a matter of law in concluding that the Timberwolves (team) acted as a single entity to limit Howard’s access to the Target Center to photograph team games and did not violate antitrust laws, and erred by granting summary judgment on his claims for tor-tious interference with prospective business relations and contract. Because we agree that the team acted as a single entity as a matter of law, and that the team was justified in the alleged interference with Howard’s contracts to photograph team games, we affirm.

FACTS

The team is one of twenty-nine members of the National Basketball Association (NBA). The team leases space at the Target Center in Minneapolis for home games. The Minneapolis Community Development Agency owns the Target Center. Ogden Enterprises, Inc. has a contract with the city to manage the Target Center on a day-to-day basis. The team has the exclusive right to determine who receives access to the Target Center for its basketball games and who may take photographs.

Howard, doing business as “Protogra-phy,” is a free-lance photographer. He photographs professional sporting events and professional athletes. The team issued Howard a season pass when it started playing at the Target Center so that Howard could photograph every home game, and continued to issue a season pass to Howard for the first four years of the team’s existence. Howard installed his own strobe lights in the arena with Ogden’s permission, and was allowed to leave the lights in place between games.

In the 1993-94 season, Kent Wipf, the team’s media director, discontinued issuing season passes to Howard. Howard’s clients were required to submit a written request to Wipf seeking single-game credentials. Wipf also implemented the NBA’s “four set rule.” This rule allows no more than four sets of lights to be used at any one time during a game, to protect the quality of television broadcasts. The team gives priority use of strobe lights to photographers for the Minneapolis Star Tribune, the St. Paul Pioneer Press, and the team photographer. Howard does not challenge these priorities.

In April 1994, Howard contracted with SkyBox International to photograph team members for a trading-card series during the 1994-95 season. The same year, the NBA implemented a league-wide policy prohibiting teams from providing credentials to photographers on assignment from trading-card companies not having a contractual relationship with the NBA. Sky-Box did not have a contractual relationship with the NBA so Howard was denied credentials and SkyBox repudiated its contract with Howard.

At the beginning of the 1995-96 season, the team contracted with NBA Photos, a subsidiary of the NBA established in 1987, for photography services. NBA Photos installed a set of strobe lights in the arena. NBA Photos has priority use of one of the four sets of strobe lights and this is the priority use that Howard challenges. Revenue from NBA Photos is divided among member teams. NBA Photos has more than 100 experienced photographers, new technologies for photographing games and events, a photographic library with more than three million images and a global distribution network. Because NBA Photos is given priority use to one of the four sets of strobe lights, Howard has been denied credentials on several occasions. He has been issued credentials on eight occasions and denied credentials on six occasions since the team contracted with NBA Photos.

Howard alleges that the team prohibited him from renting his lighting equipment to other photographers and that a trading-card company repudiated an agreement with him to rent his lights and “felt pressured” to rent lights from NBA Photos. Howard asserts that Ogden conspired with the team to create barriers to his ability to photograph Timberwolves games by asking him about insurance on his lights and ultimately asking him to remove his lights between uses. Howard also asserts that Ogden conspired with the team to exclude him from the arena.

Howard sued the team and Ogden alleging: 1) tortious interference with prospective business relations; 2) tortious interference with contract; 3) unreasonable restraint of trade in violation of Minn. Stat. § 325D.51 (2000); 4) establishment, maintenance or use of monopoly power in violation of Minn.Stat. § 325D.52 (2000); and 5) price fixing, allocation of markets and concerted refusal to deal in violation of Minn.Stat. § 325D.53 (2000). The district court granted summary judgment to the team and Ogden, and this appeal followed.

ISSUES

1. Did the district court apply the appropriate standard for summary judgment?

2. Did the district court make impermissible findings of fact, misapply Minnesota antitrust statutes, and improperly shift summary judgment burdens by concluding that the team acted as a single entity and as such is not subject to the antitrust statutes?

3. Did the district court err in granting summary judgment to respondents on appellant’s tortious interference claims?

ANALYSIS

When appealing from summary judgment, we ask whether there are any genuine issues of material fact and whether the lower courts erred in their application of the law. See State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990) (citation omitted).

[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’

DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn.1997) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986)). “[T]he party resisting summary judgment must do more than rest on mere averments.” Id. at 71. A genuine issue for trial must be established by substantial evidence. Id. at 70.

Minnesota antitrust law should be interpreted consistently with federal court interpretations of federal antitrust law unless Minnesota law clearly conflicts. See State by Humphrey v. Alpine Air Prods., Inc., 490 N.W.2d 888, 894 (Minn.App.1992) review granted (Minn. Nov. 17 1992) (holding that Minnesota antitrust law is to be interpreted consistently with the federal courts’ construction of federal antitrust law)

1. Summary judgment standard.

Howard argues that the district court failed to apply the correct standard for summary judgment in antitrust cases. The summary judgment framework for antitrust cases is no different than in any other case. Petmzzi’s IGA Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224, 1230 (3rd Cir.1993). Summary judgment in all cases “is mandatory against a party who fails to establish an essential element” of its claim. Lloyd v. In Home Health, Inc., 523 N.W.2d 2, 3 (Minn.App.1994).

Howard seems to be arguing that because he has labeled his allegations per se violations of Minnesota antitrust law, he has made a prima facie case which is not subject to summary judgment unless the team and Ogden could show a legitimate procompetitive purpose for their acts. Howard asserts that he has produced evidence to show that

[defendants excluded [Howard] from shooting photos; [defendants acted with the intention of reducing competition by reducing access to freelance photographers who compete with NBA Photos; competition among photographers has been reduced; and [Howard] was damaged.

Howard argues that this is precisely what the U.S. Supreme Court and the Minnesota Supreme Court require of a plaintiff to survive summary judgment under either a per se or a rule of reason analysis. But the district court based summary judgment on Howard’s inability to make a pri-ma facie case of antitrust violations because he cannot demonstrate the collusion required to establish his antitrust claims under Minn.Stat. §§ 325D.51 and 325D.53 or that the team was his competitor as required to establish a claim under Minn. Stat. § 325D.52. The district court did not apply an erroneous standard for granting summary judgment in Howard’s antitrust claims.

2. The team acted as a single entity as a matter of law.

A contract, combination, or conspiracy between two or more persons in unreasonable restraint of trade or commerce is unlawful. Minn.Stat. § 325D.51.

Without limiting section 325D.51, the following shall be deemed to restrain trade or commerce unreasonably and are unlawful:
(1) A contract, combination, or conspiracy between two or more persons in competition:
(a) for the purpose or with the effect of affecting, fixing, controlling or maintaining the market price, rate, or fee of any commodity or service;
(b) affecting, fixing, controlling, maintaining, limiting, or discontinuing the production, manufacture, mining, sale or supply of any commodity, or the sale or supply of any service, for the purpose or with the effect of affecting, fixing, controlling, or maintaining the market price, rate, or fee of the commodity or service; or
(c) allocating or dividing customers or markets, functional or geographical, for any commodity or service. * * *
(3) A contract, combination, or conspiracy between two or more persons refusing to deal with another person, except a refusal to deal by associations, trading boards, or exchanges when predicated upon a failure to comply with rules of membership.

Minn.Stat. § 325D.53, subd. 1.

The United States Supreme Court, interpreting Section 1 of the Sherman Act, which is analogous to Minn.Stat. §§ 325D.51 and .53, has drawn a basic distinction between concerted and independent action:

Section 1 of the Sherman Act requires that there be a contract, combination ⅝ ⅜ ⅜ or conspiracy between the manufacturer and other distributors in order to establish a violation. Independent action is not proscribed. A manufacturer of course generally has a right to deal or refuse to deal with whomever it likes, as long as it does so independently.

Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 761, 104 S.Ct. 1464, 1469, 79 L.Ed.2d 775 (1984) (quotation and citation omitted).

Howard does.not dispute that the team is a single entity, but disputes that it acted as such in restricting his access to the arena because Ogden “conspired” with the team to restrict his access. A corporation, however, cannot conspire with itself. See Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 771, 104 S.Ct. 2731, 2741, 81 L.Ed.2d 628 (1984). We agree with the district court that Ogden, as manager of the arena, was required to carry out the directives of the team with regard to access to the arena and use of strobe lights in the arena, and did not act as an economically independent entity to collude or conspire with the team for purposes of antitrust law.

Howard argues that the rule that a corporation cannot conspire with itself applies only to acts of a corporation and its subsidiary. We disagree. Federal antitrust cases make it clear that servicing agents only connected with antitrust defendants by mere circumstance are outside the umbrella of antitrust liability. See Motor Carriers Labor Advisory Council v. Trucking Mgmt., Inc., 711 F.Supp. 216, 223-24 (E.D.Pa.1989) (discussing the scope of agent liability for antitrust claims). The district court did not err by concluding that, as a matter of law, Ogden was a representative of the team and was not acting as a separate entity capable of engaging in a conspiracy with the team to violate antitrust laws.

3. The team is not a competitor of Howard and therefore did not violate Minn.Stat. § 325D.52.

Howard relies on Weinberg v. Chicago Blackhawk Hockey Team, 274 Ill.App.3d 637, 210 Ill.Dec. 860, 653 N.E.2d 1322 (1995) to support his claim that the team violated Minn.Stat. § 325D.52.

The establishment, maintenance, or use of, or any attempt to establish, maintain, or use monopoly power over any part of trade or commerce by any person or persons for the purpose of affecting competition or controlling, fixing, or maintaining prices is unlawful.

MinmStat. § 325D.52.

Weinberg, the publisher of hockey programs, alleged that the Black-hawks violated antitrust law in Illinois by refusing to grant Weinberg media credentials and press access to the hockey stadium for Blackhawks’ practices, press conferences, and post-game interviews. Weinberg, 210 Ill.Dec. 860, 653 N.E.2d at 1323-24. The Blackhawks published a competing program guide and did not want to issue credentials for a publication competing against its publication. Id. at 1324. The Illinois Court of Appeals reversed the district court’s dismissal of Weinberg’s claims for failure to state a claim, concluding that Weinberg had stated a case for violation of the statute under the theory of monopoly leveraging and the essential facilities doctrine. Id. at 1323-26.

Monopoly leveraging occurs where a party has monopoly power in one market, and uses this power to extract a competitive advantage in a second market * * *.
In order to state a claim for monopoly leveraging * * * a plaintiff must allege (1) that defendant has monopoly power in one market, (2) that defendant used this power to exact a competitive advantage for itself in a second market, (3) that the competitive advantage was not won on competitive merits, but rather stemmed from a coercive use of the monopoly power in the first market, (4) that the defendant acted with the intent to gain the unwarranted advantage in the second market, and (5) the anti-competitive conduct resulted in a lessening of competition.

Id. at 1324-25 (citations omitted).

To state a cause of action * * * based on the essential facilities doctrine, a plaintiff "must allege (1) control of the essential facility by a monopolist, (2) a competitor’s inability to practically or reasonably duplicate the essential facility, (3) the denial of the use of the facility to a competitor, (4) the feasibility of providing the facility and (5) that denial has had an anti-competitive effect.

Id. at 1326 (citations omitted).

Howard alleges that the team has a “monopoly” to play basketball in the arena and unlawfully leveraged that lawful monopoly into a monopoly for NBA photos. Howard fails to explain how contracting with one of Howard’s competitors, an entity entirely separate from the team, constitutes monopoly leveraging by the team, denies use of a facility to a competitor of the team, or has any anti-competitive ef-feet. His reliance on Weinberg is misplaced.

Howard relies on a strained reading of Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992) to assert that the team is his competitor. We reject his analogy. Kodak restricted access to parts it manufactured in order to coerce buyers of its equipment into having their equipment serviced by Kodak rather than by independent service providers. Id. at 456-58, 112 S.Ct. at 2076-78 (discussing Kodak’s argument). In the instant case the team entered into a contract to use the services of one of Howard’s competitors on terms that are beneficial to the team. Howard has failed to produce evidence that the team is his competitor or that the team’s contract with NBA Photos has had any anti-competitive effect on a particular market. The district court did not err by concluding that Howard has not alleged facts to establish a violation of Minn.Stat. § 825D.52 under the essential facilities doctrine.

4. Tortious interference claim.

Howard argues that the district court erred in finding that there was no issue of material fact showing that the team and Ogden tortiously interfered with appellant’s contracts. For a claim of tor-tious interference with a contract to survive, plaintiff must show (1) the existence of a contract, (2) that defendant knew of the contract, (3) that defendant intentionally procured a breach of the contract without justification, and (4) that plaintiff suffered injuries as a direct result of the breach. Bouten v. Richard Miller Homes, Inc., 321 N.W.2d 895, 900 (Minn.1982). Based on the legal status of Ogden as merely a representative of the team in these actions, the district court correctly dismissed these claims as to Ogden.

Howard argues that the right to exclude anyone from the arena does not protect the team. This is inaccurate.

There is no wrongful interference with a contract where one asserts in good faith a legally protected interest of his own * * ⅜ believ[ing] that his interest may otherwise be impaired or destroyed by the performance of the contract or transaction.

Kjesbo v. Ricks, 517 N.W.2d 585, 588 (Minn.1994) (quotation omitted). Since the team was merely asserting its right to exclude, whether to limit the number of strobe lights, protect the space available, or enforce the NBA rule prohibiting credentials to photographers whose trading-card clients did not have a contract with the NBA, the acts of exclusion do not amount to tortious interference with Howard’s contracts or potential business relations.

DECISION

A representative acting as a servicing agent is not a separate entity capable of colluding or conspiring for purposes of the antitrust laws. The team was not Howard’s competitor and could not violate Minn.Stat. § 325D.52 by contracting with an actual competitor of Howard. Howard failed to establish essential elements of his antitrust claims and the district court did not apply the wrong standard in granting summary judgment to team and Ogden on those claims. Howard failed to establish tortious interference with prospective business relations or contract. Therefore, we affirm the district court on these issues.

Affirmed.

      . According to the deposition of Ogden official, Jack Larson, Ogden's duties at the Target Center with regard to the team's use of the arena include maintenance, electrical work, ushering, security, setup and changeover, janitorial, and other work from general event usage.

      . In per se cases, injury to competition is presumed because of the nature of the activity in question. See N.W. Wholesale Stationers, Inc. v. Pac. Stationary & Printing Co., 472 U.S. 284, 289, 105 S.Ct. 2613, 2617, 86 L.Ed.2d 202 (1985) (holding the "per se approach permits categorical judgments with respect to certain business practices that have proved to be predominantly anticompeti-tive”). The district court rejected Howard's assertion that he has stated per se antitrust violations.

      . Howard’s reliance on Chicago Prof’l Sport Ltd. P'ship v. Nat'l Basketball Ass’n, 961 F.2d 667 (7th Cir.1992) for the proposition that the team, through its contracts, acted with Ogden "like a cartel to restrict the output of photographs" is misplaced. Chicago Prof l Sports Ltd. actually supports the team’s argument that it is free to contract with photographers. The court acknowledged that, even though producers complain about efforts of business rivals that reduce their profits, judicial relief from real injuries caused by rivalry would harm consumers. Id. at 669. The NBA does not require the team to contract with NBA Photos. The team finds it commercially reasonable to do so.