author: PER CURIAM.

text:
    In re PETITION FOR DISCIPLINARY ACTION AGAINST Gary K. WOOD, a Minnesota Attorney, Registration No. 118722.
    No. A05-389.
    Supreme Court of Minnesota.
    June 29, 2006.

      Betty M. Shaw, Acting Director, Office of Lawyers Professional Responsibility Board, Martin A. Cole, First Assistant Director, St. Paul, MN, for Appellant.
    Gary K. Wood, Edina, MN, for Respondent.
   OPINION

PER CURIAM.

On February 24, 2005, the Director of the Office of Lawyers Professional Responsibility filed a petition for disciplinary action against respondent, Gary K. Wood, alleging professional misconduct that warrants public discipline. On May 10, 2005, this court appointed a referee to hear Wood’s disciplinary action. On October 4, 2005, after a hearing on the petition, the referee concluded that Wood violated Rules 1.3, 1.4, 1.8(a), 3.2, 8.1(a)(3) of the Minnesota Rules of Professional Conduct (MRPC) and Rule 25 of the Rules on Lawyers Professional Responsibility (RLPR). The referee recommended that Wood be indefinitely suspended from the practice of law and not be eligible to apply for reinstatement for at least six months. For the reasons discussed below, we conclude that Wood’s misconduct warrants the recommended discipline.

Wood was admitted to practice law in Minnesota on October 21, 1977, and currently practices law in Minneapolis. Prior to the disciplinary action at issue, Wood received six separate discipline sanctions from the Office of Lawyers Professional Responsibility. Specifically, (1) on October 23, 1987, Wood received an admonition for failing to pursue a workers’ compensation matter and to respond to a client’s telephone calls in violation of Rules 1.3 and 1.4, MRPC; (2) on September 13, 1996, Wood received an admonition for failing to diligently represent a client and not communicating with the client in violation of Rules 1.3 and 1.4, MRPC; (3) on March 28, 2000, Wood received private probation for endorsing settlement checks without the authorization of his law firm, failing to maintain required trust account books and records, failing to provide an accounting for money withheld from a settlement, failing to diligently pursue a client matter, practicing law while on restricted status, failing to pay a court reporter, and failing to cooperate in a disciplinary investigation in violation of Rules 1.3, 1.4, 1.15, 1.15(b)(3), 5.5, 8.1(a)(3), and 8.4(c) and (d), MRPC, and Rule 25, RLPR; (4) in 2001, Wood’s private probation was extended for failing to pay another court reporter in violation of Rule 8.4(d), MRPC; (5) on March 25, 2003, Wood received an admonition for failing to diligently and promptly represent a client in violation of Rule 1.3, MRPC; and (6) on February 26, 2004, Wood received an admonition for failing to diligently represent a client and failing to communicate with his client in violation of Rules 1.3 and 1.4(a), MRPC.

On February 24, 2005, the Director filed the current petition for disciplinary action alleging three counts of professional misconduct. First, the Director alleged that on July 16, 1999, Wood borrowed $20,644.96 from Client A. Wood told the client that he needed the loan to avoid a foreclosure on his home. In return, Wood drafted and signed a hand-written 30-day promissory note, which specified that the note is “payable on demand by [Client A] within 30 days if [Wood] fails to diligently seek refinancing through an approved lender.” Wood did not advise Client A to seek independent counsel about the loan, and Client A did not give Wood a written consent to proceed with the loan without the advice of independent counsel. On April 2, 2004, Client A filed a complaint against Wood with the Director’s office, stating Wood failed to pay back any part of the loan. On April 27, 2004, in response to Client A’s complaint, Wood sent to Client A and the Director an invoice demonstrating that Wood had offset the loan payments against fees owed by Client A and several businesses in which Client A had an interest. Client A, however, was not aware of the offset and disputed the amount of the legal fees that were owed to Wood. The Director concluded that Wood’s behavior in the Client A matter violated Rule 1.8(a), MRPC.

Second, the Director alleged that Wood failed to diligently represent Client B and Client B’s father, Client C. The Director alleged that, in the latter half of 2001, Client B retained Wood to represent him on a matter involving an escrow account held by a title company. Wood failed to take any action on Client B’s matter and failed to respond to the client’s telephone calls. Wood represented Client C in an insurance claim arising from a fire that took place at one of Client C’s properties. Wood failed to inform Client C of an April 2, 2002, hearing and attended the hearing without his client. Wood subsequently admitted that he did not timely comply with the opposing counsel’s motion to compel discovery. The Director concluded that Wood’s behavior in the Client B and Client C matters violated Rules 1.3, 1.4, and 3.2, MRPC.

Third, the Director alleged that Wood failed to cooperate with a disciplinary investigation. Specifically, on June 6, 2003, the Director received a complaint against Wood from one of Wood’s clients, Client D. The complaint stated that Wood failed to deliver to Client D a $25,000 check from the sale of one of Client D’s properties. On June 9, 2003, the Director sent Wood a notice of investigation and requested that Wood meet with the Director on June 24, 2003, and submit a written response before the meeting. On June 24, 2003, Wood met with the Director, but failed to provide a response to Client D’s complaint. Wood then failed to respond to the Director’s July 11, 2003, July 31, 2003, and August 21, 2003, written requests for further information. On September 26, 2003, the Director requested that Wood provide an immediate response to Client D’s complaint. On October 5, 2003, Wood faxed to the Director a response to the complaint, but did not submit other required information until October 30, 2003. The Director concluded that Wood’s noncooperation with the investigation violated Rule 8.1(a)(3), MRPC, and Rule 25, RLPR.

Wood did not answer the Director’s petition, and on March 29, 2005, the Director filed a motion with this court for summary relief under Rule 13(b), RLPR. On April 1, 2005, we ordered that the allegations in the petition be deemed admitted and gave both parties the opportunity to submit briefs by April 25, 2005. On April 5, 2005, Wood requested permission from this court to respond to the Director’s motion for summary relief, to oppose the motion, and to file an answer to the petition. The Director did not oppose the request, and on April 26, 2005, we granted Wood’s motion and later appointed District Court Judge Bruce W. Christopherson as the referee to hear Wood’s disciplinary action.

On September 23, 2005, the referee held a hearing. Client A testified against Wood at the hearing, and his testimony was consistent with the allegations the Director made in the petition for discipline. Client A also testified that, while attempting to obtain a judgment on Wood’s home, he discovered that Wood no longer held the title to the home. Client A then stated that Wood sent him a letter at the beginning of 2005 in which Wood proposed a $200 per month repayment plan, but Client A never received any payments from Wood. Client A testified that he was not aware that Wood was offsetting the loan payments against legal fees and he never authorized such an offset.

Wood testified on his own behalf at the hearing. Wood admitted that he borrowed $20,644.96 from Client A, was not able to secure refinancing on his home, and subsequently, did not make any payment to Client A prior to the hearing. Wood also acknowledged that he did not advise Client A to retain independent counsel with respect to the loan. But Wood insisted that the legal fees he charged Client A accurately reflected the amount of the legal work he had done for Client A. Wood acknowledged that, subsequent to obtaining the loan from Client A, he transferred the title of his home to his daughter, but explained that he had done so to obtain a lower-interest loan on the home. Wood then admitted to the Director’s allegations against him in the matter involving Clients B and C and his failure to cooperate with the Director.

On October 4, 2005, the referee filed his Findings of Fact, Conclusions of Law and Recommendation with this court. As to the Client A matter, the referee found that Wood obtained a loan from Client A in 1999 to avoid a foreclosure on his home. Specifically, Wood received $20,644.96 from Client A on a 30-day promissory note that was prepared by Wood. Wood, however, did not inform Client A that he was involved in a Chapter 13 bankruptcy proceeding. Wood also did not advise Client A to seek independent counsel. Wood failed to obtain refinancing until September 2002 and never repaid any of Client A’s loan despite Client A’s repeated demands for repayment. Later, Wood transferred the title to his home to his daughter.

The referee found that, in his response to Client A’s complaint, Wood indicated for the first time that he had offset the loan payments against fees owed by Client A and by businesses in which Client A held an interest. The referee also found that Client A never agreed to such an arrangement. The referee then found that Wood’s misconduct was aggravated by raising this offset claim “tardily and without warning.”

As to the Client B and Client C matters, the referee found that Wood was retained to represent Client B regarding an escrow account held by a title company in 2001, but failed to take any action and did not respond to Client B’s telephone calls. The referee also found that Wood negligently represented Client C in an insurance claim by failing to timely comply with and notify Client C of a motion to compel.

As to the failure-to-cooperate matter, the referee found that Wood failed to cooperate with the Director’s investigation regarding the complaint of Client D, who made serious allegations against Wood. Wood was first asked to respond to this complaint on June 9, 2003, but did not submit a written response until October 5, 2003. Thereafter, on two other occasions, the Director requested that Wood provide documents to verify parts of this response. Wood, however, did not comply with the Director’s request until October 30, 2003.

The referee found that Wood’s misconduct was aggravated by his disciplinary history, and that there was no “proven mitigation.” The referee then recommended that Wood be indefinitely suspended from the practice of law and not be eligible to apply for reinstatement for at least six months. After the hearing, Wood ordered a hearing transcript; therefore, the referee’s findings of fact and conclusions of law are not binding on our court. Rule 14(e), RLPR (stating a referee’s findings and conclusions are inconclusive and subject to challenge if either party timely orders a transcript and so notifies our court).

In his appeal to our court, Wood argues that the referee erred by refusing to allow Wood to testify at the disciplinary hearing about a previous offer from the Director to resolve this matter and in not finding any mitigating circumstances. We first address Wood’s argument that the referee should have allowed him to testify to the settlement offer from the Director. According to Wood, in November 2004, the Director recommended that Wood receive a public reprimand. Wood further stated that as part of this settlement offer, the Director also required Wood to (1) inform his law firm of the disciplinary charges, (2) reach an agreement with Client A as to a loan payment amount, (3) make arrangements to satisfy the loan, and (4) retain employment with his law firm. In February 2005, Wood’s law firm terminated Wood’s employment, and Wood was not able to meet the Director’s requirements. Subsequently, the Director withdrew the settlement offer. When Wood attempted to testify regarding the Director’s offer at the hearing, the referee ruled that such discussions were inadmissible as settlement negotiations or compromise under Rule 408 of the Minnesota Rules of Evidence.

Wood contends that the referee erred in relying on Rule 408 of the Minnesota Rules of Evidence because the disciplinary hearing is an administrative proceeding and, as such, the Minnesota Rules of Evidence should not apply. Wood also argues that “the content of the offer is relevant to the Director’s recognition of the steps [Wood has] taken to remedy [Wood’s] practice deficiencies and ought to be considered in light of the absence of any further objectionable conduct.” Further, an “increased discipline for a failure to meet a condition over which [Wood] had no control is neither fair nor reasonable.”

Contrary to Wood’s assertion, Rule 9(i)(4), RLPR, specifically provides that in a lawyer discipline proceeding, “[t]he parties shall introduce their evidence in conformity with the [Minnesota] Rules of Evidence except that affidavits and depositions are admissible in lieu of testimony.” As such, Wood’s argument that a lawyer discipline action should not be subject to the Rules of Evidence is without merit.

Wood further claims that, even if Rule 408 of the Minnesota Rules of Evidence applied to the proceeding, the referee still erred in not allowing him to introduce the Director’s previous settlement offer. “Rulings on evidentiary matters are left to the discretion of the district court and will not be reversed absent an abuse of discretion.” In re Westby, 639 N.W.2d 358, 366 (Minn.2002) (citing Jenson v. Touche Ross & Co., 335 N.W.2d 720, 725 (Minn.1983)). In the instant case, the fact that the Director offered Wood a less severe discipline at an earlier date has no relevance to what the appropriate discipline against Wood should be in light of his misconduct nor is it, as Wood argues, an indication of “the Director’s recognition of the steps [Wood has] taken to remedy [Wood’s] practice deficiencies.” Rather, the Director’s previous offer was conditioned upon Wood’s willingness and ability to repay the funds he owed Client A. The change in Wood’s employment status indicates that these requirements were no longer applicable and, accordingly, the Director sought a new set of disciplinary sanctions against Wood based on the changed circumstances and on Wood’s continued failure to repay Client A. For these reasons, we conclude that the referee did not abuse his discretion when he prohibited Wood from testifying to the specifics of the Director’s offer.

Wood next argues that the referee erred in not finding any mitigating circumstances. According to Wood, the recommended discipline is excessive in light of “all the steps [he has] taken to change [his] approach and attitude about [his] practice and expectation of professionalism” and his “efforts to rehabilitate and recompense.”

We give “great deference to a referee’s findings on disputed facts and will not reverse the referee’s findings and conclusions unless they are clearly erroneous.” Westby, 639 N.W.2d at 367. Here, the referee’s finding that there are no mitigating factors is fully supported by the record. Specifically, despite Wood’s assertion that he has taken steps to remedy his past mistakes, he continues to ignore his professional obligations and has been the subject of numerous disciplinary actions by the Director’s office over the years. The fact that the offenses at issue here occurred in the context of a lengthy disciplinary history shows that Wood has not changed his “approach and attitude about [his] practice and expectation of professionalism.” Moreover, despite Wood’s assertion at the disciplinary hearing that he “now [does not] have any of the deficiencies in terms of record keeping, of billing, of client agreements, that [he] had previously,” Wood presented no evidence to support the assertion. We are especially troubled by the fact that (1) between 1999 and 2006, Wood did not repay any of the loan that he owed Client A, and (2) during oral argument before our court, Wood attempted to equate his outstanding loan obligation to an “attorneys fee dispute.” The record does not show that Wood has taken adequate steps to recognize and correct his mistakes, and we conclude that the referee correctly found that “[Wood] presented no proven mitigation.”

Having determined that the referee did not commit the errors that Wood alleges on appeal, we now turn to the question of whether the disciplinary action recommended by the referee is warranted. When considering a petition for lawyer discipline, our court has the ultimate responsibility for determining the appropriate sanction. In re Oberhauser, 679 N.W.2d 153, 159 (Minn.2004). Specifically, we consider four factors: (1) the nature of the misconduct; (2) the cumulative weight of the violations of the rules of professional conduct; (3) the harm to the public; and (4) the harm to the legal profession. Id. (citing In re Singer, 541 N.W.2d 313, 316 (Minn.1996)). Appropriate sanctions are determined on a case-by-case basis after considering both aggravating and mitigating circumstances. In re Wentzell, 656 N.W.2d 402, 408 (Minn.2003). We also look to similar cases for guidance in setting the proper discipline. In re Thedens, 557 N.W.2d 344, 347 (Minn.1997).

In the instant case, the referee reviewed the public reprimand and probation that we issued in In re Eisbach, 577 N.W.2d 479 (Minn.1997), and in In re Hendrickson, 464 N.W.2d 722 (Minn.1991). The referee noted that, although those cases did not result in suspension, Wood’s misconduct matter is significantly more aggravated. Specifically, Wood claims that he credited loan payments against Client A’s legal fees, but he did not mention the offset to Client A until after Client A had filed a complaint against him. Client A, therefore, was never informed of the offset and disputes the offset that Wood claims. Moreover, Wood failed to take reasonable steps to repay the loan, and this misconduct occurred after a lengthy history of disciplinary problems. We agree with the referee’s determination that Wood’s conduct in the Client A matter warrants more serious discipline than what we imposed in In re Eisbach, 577 N.W.2d 479, and in In re Hendrickson, 464 N.W.2d 722.

In addition, Wood’s failure to diligently represent Clients B and C indicates a pattern of continuing neglect. Wood has been given numerous opportunities to alter this pattern of conduct, but has failed to do so. Although isolated and nonserious instances of neglect and noncommunication frequently result in the issuance of an admonition by the Director, this court has publicly disciplined lawyers for a pattern of neglect. See, e.g., In re Mitchell, 368 N.W.2d 273, 273 (Minn.1985); In re Geiger, 621 N.W.2d 16, 23 (Minn.2001). Here, we conclude that Wood’s neglect and non-communication in the Client B and Client C matters warrant public discipline.

Finally, Wood failed to cooperate with the Director in a disciplinary action investigation. In In re Ek, we pointed out that:

[W]e have repeatedly recognized that attorney cooperation is imperative, and have made it clear that a failure to cooperate in a disciplinary investigation constitutes independent grounds for discipline.

643 N.W.2d 611, 614 (Minn.2002). In addition, a lawyer’s noncooperation, when combined with a pattern of neglect and non-communication, has often resulted in the attorney’s indefinite suspension. See, e.g., In re Engel, 538 N.W.2d 906, 907 (Minn.1995); In re Campbell, 603 N.W.2d 128, 132 (Minn.1999). In the instant case, not only was Wood previously admonished for his neglect and noncommunication, he was also previously disciplined for his failure to cooperate with another investigation. For these reasons, we conclude that Wood’s failure to cooperate with the disciplinary investigation warrants a public discipline.

For the above reasons, we conclude that the record fully supports the referee’s factual findings, legal conclusions, and recommendation for discipline. We therefore hold that Wood’s misconduct warrants the discipline recommended by the referee and now order:

1. That respondent, Gary K. Wood, be indefinitely suspended from the practice of law, commencing two weeks from the date of this decision.

2. That respondent shall not be eligible to apply for reinstatement for at least six months after suspension.

3. That respondent comply with the requirements of Rule 18(a)-(e), RLPR.

4. That respondent comply with the requirements of Rule 26, RLPR.

5. That respondent pay to the Director the sum of $900 in costs and an amount for disbursements to be determined in compliance with Rule 24, RLPR.

6. That as a condition for reinstatement, respondent shall present a plan for repayment of the loan to Client A, including a method to determine the amount due and owing. After any reinstatement, continued payments to Client A should be required and monitored.

7. That following reinstatement, respondent be supervised by another attorney for a period of one year.

So ordered.


source: Caselaw Access Project

author: ROSS, Judge.

license: Public Domain

text:
    In the Matter of the WELFARE OF M.R.H.
    No. A05-929.
    Court of Appeals of Minnesota.
    June 13, 2006.
    Review Denied Aug. 15, 2006.

      Mike Hatch, Attorney General, St. Paul, MN; and Douglas H. Johnson, Washington County Attorney, Erin A. Johnson, Assistant Washington County Attorney, Stillwater, MN, for respondent.
    G. Tony Atwal, Assistant State Public Defender, Minneapolis, MN, for appellant.
    Considered and decided by Chief Judge TOUSSAINT, Presiding Judge; ROSS, Judge; and MINGE, Judge.
   OPINION

ROSS, Judge.

Appellant M.R.H. is an adjudicated delinquent who challenges the district court’s order for restitution, arguing that the restitution impermissibly duplicates damages that M.R.H. paid in a civil settlement and is based on losses known to the victims at sentencing. M.R.H. also challenges the portion of the restitution that compensates one of the victims for the value of accrued employment leave that the victim expended to tend to a different, hospitalized victim of M.R.H.’s delinquent conduct. We affirm.

FACTS

A dispute about a fireworks incident escalated into an argument between appellant M.R.H. and Benjamin Kloos on June 28, 2002. M.R.H. punched Kloos in the face. Kloos fell backwards, dashing the back of his head on the pavement. The sudden impact fractured Kloos’s skull, requiring emergency brain surgery and three weeks’ hospitalization. During this period Kloos underwent additional surgery to replace a portion of his skull and spent ten days in a medically induced coma. Benjamin Kloos’s parents spent considerable time tending to him throughout his treatment and recovery. This required them to be away from work, so Benjamin’s father, Michael Kloos, expended “flex leave” and “comp leave” that he had accrued through his employment.

The state filed a delinquency petition charging M.R.H. with first-degree assault, in violation of Minn.Stat. § 609.221, subd. 1 (2000). He pleaded guilty and the district court adjudicated him delinquent. The court imposed a 48-month stayed sentence of incarceration, placed M.R.H. on probation, and ordered M.R.H. to pay restitution to Benjamin Kloos and his family for expenses they incurred as a result of the assault. The district court noted that the Kloos family had submitted a restitution affidavit claiming $21,619.97 of expenses not covered by insurance, and, apparently relying on Minnesota Statute section 611A.04, subdivision 1, the district court commented that restitution is limited to out-of-pocket expenses and losses, “not inelud[ing] any other types of damages that the Kloos family could pursue in a civil action.” Because the Kloos-es’ restitution request had not yet been investigated, the district court reserved deciding the restitution amount.

Benjamin Kloos served a civil lawsuit against M.R.H. and against M.R.H.’s parents in April 2003, alleging that M.R.H. was liable for damages from the assault and that his parents were hable as M.R.H.’s guardians under Minnesota Statutes section 540.18. On September 12, 2004, Benjamin Kloos settled his lawsuit for $50,000, and he released M.R.H. and M.R.H.’s parents from all claims arising from the assault.

Benjamin Kloos’s parents, Michael and Lori Kloos, however, were parties neither to the lawsuit nor to the settlement agreement. Michael and Lori Kloos submitted a restitution request for $21,800.21 in December 2004. They attached a list of losses almost identical to those they originally requested in 2002, including the value of Michael Kloos’s lost wages. M.R.H. contested the propriety of restitution and the amount requested. The district court ordered M.R.H. to pay Michael and Lori Kloos $10,663.49 in restitution. M.R.H. appeals that order.

ISSUE

Did the district court abuse its discretion by ordering M.R.H. to pay $10,663.49 in restitution?

ANALYSIS

M.R.H. maintains that the district court abused its discretion by ordering him to pay Michael and Lori Kloos $10,663.49 in restitution. A crime victim has the right to restitution as part of the disposition of a juvenile-delinquency proceeding that results in an adjudication of delinquency. Minn.Stat. § 611A.04, subd. 1(a) (2004). “A request for restitution may include, but is not limited to, any out-of-pocket losses resulting from the crime,” including medical costs and the replacement of wages and services. Id. A parent of a victim is considered a victim for restitution purposes if she suffers economic harm directly resulting from the crime. State v. O’Brien, 459 N.W.2d 131, 135 (Minn.App.1990). The district court has wide discretion to order reasonable restitution, but there must be a factual basis establishing the victim’s loss. State v. Chapman, 362 N.W.2d 401, 404 (Minn.App.1985), review denied (Minn. May 1, 1985). Whether a particular claim for restitution fits within the statutory definition is a question of law, which this court reviews de novo. State v. Thole, 614 N.W.2d 231, 234 (Minn.App.2000).

M.R.H. argues first that the restitution award is duplicative because the $50,000 settlement of Benjamin Kloos’s civil action compensated Michael and Lori Kloos for the same losses. M.R.H. misreads the scope of the civil suit and its settlement agreement. It is true that the damages Benjamin Kloos claimed in his civil action rest in part on the expenses that Michael and Lori Kloos later requested as restitution. But Michael and Lori Kloos were not parties to Benjamin Kloos’s civil action or to the settlement agreement. A settlement agreement is a contract. Ittel v. Pietig, 705 N.W.2d 203, 207 (Minn.App.2005), review denied (Minn. Jan. 17, 2006). Generally, “nonparties to a contract acquire no rights or obligations under it.” Mon-Ray, Inc. v. Granite Re, Inc., 677 N.W.2d 434, 439 (Minn.App.2004) review denied (Minn. June 29, 2004). As nonparties, Benjamin Kloos’s parents were neither entitled to compensation nor bound to the release of liability.

Even if Michael and Lori Kloos had been parties to their son’s lawsuit, the settlement agreement itself is too limited to foreclose restitution. The agreement provides that Benjamin Kloos will “release, acquit and forever discharge [M.R.H. and his parents] ... of and from any and all actions, claims, damages, costs, loss of service, expenses and compensation” resulting from the assault. As consideration for this release, M.R.H. and his parents paid Benjamin Kloos $50,000. Nothing in the settlement agreement or in the record before us establishes that M.R.H. directed any portion of the $50,000 payment to cover the expenses that Michael and Lori Kloos later claimed in their restitution request. As the agreement expressly declares, the $50,000 payment was consideration for the release of claims, not compensation for the injuries alleged in the lawsuit. Payment under the settlement specifically resolves “a doubtful and disputed claim” and that “payment is not to be construed as an admission of liability.” That M.R.H. had the opportunity to — but did not — incorporate into that agreement a link between the settlement and the parental claims for restitution further undercuts his argument that the settlement should have reduced his obligation to Benjamin Kloos’s parents.

Because Michael and Lori Kloos are not bound by or entitled to the proceeds from the settlement agreement, and because no portion of the $50,000 settlement is attributed to the expenses claimed by Michael and Lori Kloos in their restitution request, settlement of the civil action did not require the district court to limit the amount of restitution awarded to them. The record does not show that any payment compensated Michael and Lori Kloos for their losses arising from the assault. We conclude that the district court did not abuse its discretion by calculating restitution to them without regard to the settlement among M.R.H., M.R.H.’s parents, and Benjamin Kloos.

M.R.H. next argues that the restitution order is statutorily barred because it is based on losses known by the Kloos family at sentencing. A district court may order restitution after the sentencing or dispositional hearing if, among other requirements, the extent of the victim’s loss was unknown at the time of the sentencing or dispositional hearing. Minn.Stat. § 611A.04, subd. 1(b)(3) (2004). But it is the district court’s lack of knowledge that allows it to amend or issue a restitution order after sentencing, not the victim’s. Mason v. State, 652 N.W.2d 269, 272 (Minn.App.2002) (construing subdivision 1(b)(3) to “mean that the court’s knowledge, rather than the victim’s or the state’s,” is determinative), review denied (Minn. Dec. 30, 2002). The record shows that the district court did not know the extent of the Kloos family’s losses at sentencing, and there was no hearing on restitution until the second request. The statute therefore does not bar restitution here.

M.R.H. argues also that the restitution that compensates Michael Kloos for the time he missed from work is improperly awarded because Michael Kloos did not suffer any economic loss. We reject this argument. We have mentioned Benjamin Kloos’s serious injury, his hospitalization, his surgeries, and his coma. The record shows that Michael Kloos expended accrued leave from his employment to tend to Benjamin in the hospital while he was recovering from the assault and consequent surgeries. The operative statute provides that “restitution may include, but is not limited to, any out-of-pocket losses resulting from the crime, including medical and therapy costs, replacement of wages and services.” Minn.Stat. § 611A.04, subd. 1(a) (emphasis added). This broad language gives the district court significant discretion to award restitution, and we will “not construe the statute to exempt certain types of expenses, even though we may consider these expenses inappropriate. To do so ... would run contrary to the clear language of ... section[ ] 611A.04 ..., delegating the decision to the sentencing court.” State v. Tenerelli, 598 N.W.2d 668, 671 (Minn.1999) (alteration in original) (quotation omitted). We note that the term “out-of-pocket” does not, in context, take on a literal meaning. The statute includes “replacement of wages and services” as a compensable “out-of-pocket” loss. Minn.Stat. 611A.04, subd. 1(a). Like unpaid wages, the expenditure of accrued flex leave and comp time do not literally come “out of pocket.” Although accrued leave is not one of the losses specifically listed in the statute, earned but unused leave is a compensable asset, and its loss therefore may be recoverable by a victim-employee through restitution.

We are not persuaded otherwise by M.R.H.’s assertion that Michael Kloos’s employer continued to pay his wages during the time Kloos missed work on his son’s behalf. We have previously offered, at least as dictum, that restitution for the expenditure of accrued sick leave “is clearly related to [the victim’s] economic losses.” State v. Anderson, 507 N.W.2d 245, 247 (Minn.App.1993), review denied (Minn. Dec. 22, 1993). In State v. Colsch, we also explained that section 611A.04, subdivision 1(a), authorizes restitution for economic loss including “damages beyond out-of-pocket expenses.” 579 N.W.2d 482, 484 (Minn.App.1998). The use of accrued leave generally would allow an employee to continue to collect wages during the leave, whether expended by choice or otherwise. The forced expenditure of accrued employment leave, even if wages continue during the leave, is a loss of accumulated compensation. We therefore disagree with M.R.H.’s implicit argument that because Michael Kloos’s employer continued to pay his wages during the leave, Michael Kloos suffered no economic loss. The primary purpose of restitution is to compensate a crime victim by restoring the victim to his or her original financial condition. Id. Michael Kloos’s accrued employment leave was an asset that he could have retained or used for some other purpose (even while collecting wages), but M.R.H.’s delinquent conduct caused him to expend the leave to care for the injured Benjamin Kloos. Because Michael Kloos suffered an economic loss in expending his accrued leave, we conclude that the district court did not err by awarding restitution to cover that loss.

DECISION

We affirm the restitution order. Because Michael and Lori Kloos were not parties to the settlement agreement among Benjamin Kloos, M.R.H., and M.R.H.’s parents, the restitution award was not duplicative. And because Michael Kloos’s use of- his accrued employment leave is an economic loss caused by M.R.H.’s assault on Benjamin Kloos, the district court may order restitution to compensate for that loss.

Affirmed.


author: WILLIS, Judge.

text:
    Paul McCLURE individually and d/b/a McClure Associates, Appellant, v. DAVIS ENGINEERING, L.L.C., et al., Respondents.
    No. A05-1285.
    Court of Appeals of Minnesota.
    June 13, 2006.

      Paul Egtvedt, Egtvedt & Skees, LLP, Minneapolis, MN, for appellant.
    Paul C. Thissen, Jesse R. Orman, Briggs and Morgan, P.A., Minneapolis, MN, for respondents.
    Considered and decided by STONEBURNER, Presiding Judge; KALITOWSKI, Judge; and WILLIS, Judge.
   OPINION

WILLIS, Judge.

Appellant, a manufacturers’ representative operating as a subchapter-S corporation, appeals from the district court’s grant of summary judgment to respondents. Appellant argues that the district court erred by concluding that (1) a corporation cannot be a “commission salesperson” within the meaning of Minn.Stat. § 181.145 (2004); and (2) appellant’s breach-of-contract claim against respondents for a commission is barred by the statute of limitations. Because we conclude that the term “person” in section 181.145 may include a corporation and because appellant’s breach-of-contract claim is not barred by the statute of limitations, we reverse and remand.

FACTS

Appellant Paul McClure, d/b/a McClure Associates, Inc. (McClure Associates), a subchapter-S corporation, challenges the district court’s award of summary judgment to respondents Davis Engineering, L.L.C. and Douglas Machine, Inc. (together referred to as Douglas Machine). Douglas Machine designs, manufactures, and sells customized industrial packaging equipment to end-users. For purposes of this appeal, Douglas Machine agrees that in 1998, Douglas Machine and McClure Associates entered into an oral agreement by the terms of which McClure Associates promised to identify and contact businesses in need of Douglas Machine’s services and products. According to the terms of the contract, Douglas Machine was to pay McClure Associates a 10% commission on the gross invoice price for all sales that McClure Associates brought to Douglas Machine, with payment to McClure Associates to be made when Douglas Machine received payment from the purchaser.

In August 2002, McClure Associates filed a complaint against Douglas Machine, alleging breach of contract, unjust enrichment, and quantum meruit regarding the commission on a sale by Douglas Machine to Novartis Nutrition Corporation. The parties settled the dispute.

But before settlement of the Novartis claim, McClure Associates filed an amended complaint in May 2004, seeking to recover unpaid commissions, penalties, and attorney fees related to Douglas Machine’s sales to Lloyd’s Barbeque Company and Edwards Label. After McClure Associates amended its complaint, Douglas Machine moved for partial summary judgment. The district court granted the motion, finding that (1) McClure Associates was not entitled to the penalties or attorney fees provided for in Minn.Stat. § 181.145 (2004) because a corporation cannot be a “commission salesperson” for the purpose of the statute; and (2) McClure Associates’ claim against Douglas Machine for a commission on the Lloyd’s Barbeque sale was barred by the statute of limitations in Minn.Stat. § 541.07(5) (Supp.1999). In April 2005, a final judgment was entered, and all claims not previously dismissed were dismissed with prejudice. McClure Associates appeals from the judgment.

Because McClure Associates does not challenge the dismissal of its claim for a commission on the Edwards Label sale, the only relevant facts on appeal are those relating to Douglas Machine’s sale to Lloyd’s Barbeque. In the fall of 1998, McClure Associates approached Douglas Machine regarding a possible sale to Lloyd’s Barbeque. In July 1999, Lloyd’s Barbeque ordered equipment from Douglas Machine. Douglas Machine received full payment from Lloyd’s Barbeque by May 2000. Douglas Machine paid McClure Associates a commission of $56,720.50 on this sale, but McClure Associates claims that Douglas Machine still owes a commission of $88,594.50. McClure Associates complained to Douglas Machine regarding the amount of this commission in May 2000 and was told that the “books were closed.”

ISSUES

1. May a corporation be a “commission salesperson” within the meaning of Minn. Stat. § 181.145 (2004)?'

2. Did the district court err by determining that the statute of limitations in Minn.Stat. § 541.07(5) (Supp.1999) bars McClure Associates’ breach-of-contract claim for a commission on the Lloyd’s Barbecue sale?

ANALYSIS

When reviewing an appeal from summary judgment, this court asks whether (1) there are any genuine issues of material fact; and (2) the district court’s application of the law was erroneous. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). Summary judgment shall be granted “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law.” Minn. R. Civ. P. 56.03. On appeal, this court “must view the evidence in the light most favorable to the party against whom judgment was granted.” Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993).

I. May a corporation be a “commission salesperson” within the meaning of Minn.Stat. § 181.145 (2004)?

McClure Associates argues that the district court erred by concluding that a corporation cannot be a “commission salesperson” under Minn.Stat. § 181.145 (2004). Section 181.145 requires prompt payment to a commission salesperson when the salesperson’s employment is terminated or when the salesperson resigns, imposes a penalty on employers who fail to promptly pay commissions earned, and entitles the commission salesperson to reasonable attorney fees if the salesperson is not promptly paid commissions earned. Minn. Stat. § 181.145, subds. 2-4. McClure Associates sought penalties and attorney fees under this statute because of its unpaid commission.

Section 181.145 defines a “commission salesperson” as “a person who is paid on the basis of commissions for sales and who is not covered by sections 181.13 and 181.14 because the person is an independent contractor.” Minn.Stat. § 181.145, subd. 1. The district court found that McClure Associates was an independent contractor and was paid on the basis of commissions, but it concluded that McClure Associates was not a “person” for purposes of the statute because it is a corporation rather than a natural person. Whether a “commission salesperson” under this section may include a corporation is a question that has not been addressed by Minnesota courts.

Statutory interpretation is reviewed de novo. ILHC of Eagan, LLC v. County of Dakota, 693 N.W.2d 412, 419 (Minn.2005). The plain meaning of a statute’s language should guide a court’s interpretation of the statute. Id. Section 181.145 does not define “person.” But Minn.Stat. § 645.44 provides definitions to be applied in interpreting Minnesota statutes that “shall have the meanings given them in this section, unless another intention clearly appears.” Minn.Stat. § 645.44, subd. 1 (2004). Section 645.44 defines “person” as: “ ‘Person’ may extend and be applied to bodies politic and corporate, and to partnerships and other unincorporated associations.” Id., subd. 7 (2004).

On its face, section 181.145, subdivision 1, does not limit the term “person” to natural persons. The definition of “person” in section 645.44 is to apply “unless another intention clearly appears,” and we do not find another clear intention in section 181.145. With the application of this definition, the meaning of “person” in section 181.145, subdivision 1, is plain and unambiguous. Therefore, we conclude that the term “person” in section 181.145, subdivision 1, includes a corporation.

Douglas Machine relies on Fusion, Inc. v. Neb. Aluminum Castings, Inc., 934 F.Supp. 1270, 1273-74 (D.Kan.1996), a decision of a Kansas federal district court that concluded that under Minnesota law, the term “commission salesperson” does not include a corporation. The Fusion court relied on principles of statutory construction to reach its conclusion. See id. (noting that (1) because section 645.44, subdivision 7, predates section 181.145, the legislature was aware of the general definition of “person” when the “commission salesperson” statute was enacted; (2) despite this knowledge, section 181.145, subdivision 2(a), lists “ ‘any person, firm, company, association, or corporation’ and (3) if section 645.44, subdivision 7, applied, the list would be redundant). But under Minnesota law, courts apply rules of statutory construction only when a statute is ambiguous. ILHC of Eagan, LLC, 693 N.W.2d at 419. We conclude that it is inappropriate to apply rules of statutory construction here because section 181.145, subdivision 1, is not ambiguous. Therefore, we do not find the Fusion court’s holding persuasive.

Because a corporation may be a commission salesperson under section 181.145, subdivision 1, the district court erred by concluding that McClure Associates was not a commission salesperson. But McClure Associates’ claim for penalties and attorney fees under section 181.145 is governed by the statute of limitations in Minn.Stat. § 541.07(5) (2004), which provides a two-year statute of limitations “for the recovery of wages or overtime or damages, fees or penalties accruing under any federal or state law respecting the payment of wages or overtime or damages, fees or penalties.”

McClure Associates argues that the applicable triggering event for the statute of limitations under section 181.145 is the termination of the relationship with the commission salesperson. The parties here dispute whether they had a relationship that could be terminated for the purposes of this statute. Because the district court determined that McClure Associates was not a commission salesperson, it did not reach this issue. We therefore remand to the district court for a determination of whether the relationship between McClure Associates and Douglas Machine could be terminated for the purposes of McClure Associates’ claim under section 181.145 and, if so, when such termination occurred.

II. Did the district court err by determining that the statute of limitations in Minn.Stat. § 541.07(5) (Supp.1999) applies to McClure Associates’ breach-of-contract claim for a commission on the Lloyd’s Barbecue sale?

McClure Associates next argues that the district court erred by concluding that McClure Associates’ claim for a commission on the Lloyd’s Barbecue sale is subject to the two- or three-year statute of limitations in Minn.Stat. § 541.07(5) (Supp. 1999) rather than the six-year statute of limitations in Minn.Stat. § 541.05, subd. 1(1) (1998). The construction and applicability of a statute of limitations are questions of law, reviewed de novo. Benigni v. County of St. Louis, 585 N.W.2d 51, 54 (Minn.1998).

In addition to its claim for penalties and attorney fees, McClure Associates made a common-law breach-of-contract claim against Douglas Machine for the allegedly unpaid commission on the Lloyd’s Barbeque sale. McClure Associates argues that the applicable statute of limitations for its breach-of-contract claim is that in Minn.Stat. § 541.05, subd. 1(1). Section 541.05, subdivision 1, provides: “Except where the Uniform Commercial Code otherwise prescribes, the following actions shall be commenced within six years: (1) Upon a contract or other obligation, express or implied, as to which no other limitation is expressly prescribed.”

The district court applied Minn.Stat. § 541.07, which provides a two-year statute of limitations

for the recovery of wages or overtime or damages, fees or penalties accruing under any federal or state law respecting the payment of wages or overtime or damages, fees or penalties except, that if the employer fails to submit payroll records by a specified date upon request of the department of labor and industry or if the nonpayment is willful and not the result of mistake or inadvertence, the limitation is three years. (The term “wages” means all remuneration for services or employment, including commissions and bonuses and the cash value of all remuneration in any medium other than cash, where the relationship of master and servant exists and the term “damages” means single, double, or treble damages, accorded by any statutory cause of action whatsoever and whether or not the relationship of master and servant exists).

MinmStat. § 541.07(5).

Douglas Machine argues that “Minnesota courts have long construed claims related to payment for services to be governed by 541.07(5)” and asserts that because McClure Associates is seeking damages, section 541.07(5) was correctly applied, regardless of whether McClure Associates was an independent contractor or an employee. But this argument ignores the language in section 541.07(5) that defines “damages” as those “accorded by any statutory cause of action.”

In Roaderick v. Lull Eng’g Co., a case relied on by the district court and by Douglas Machine here, the Minnesota Supreme Court noted, “We have held that contractual, as well as statutory, wage claims are governed by the 2-year limitation prescribed by [section] 541.07(5).” 296 Minn. 385, 387-88, 208 N.W.2d 761, 763 (1973). But Roaderick and the other cases cited by Douglas Machine involve claims against employers by persons who had employment contracts with or who were former employees of the employers. See Roaderick, 296 Minn. at 386, 208 N.W.2d at 762; Levin v. C.O.M.B. Co., 441 N.W.2d 801, 802 (Minn.1989); Hendrickson v. Magney Constr. Co., 402 N.W.2d 194, 195 (Minn.App.1987).

It is clear that McClure Associates is not seeking to recover wages, as defined in section 541.07(5), because there was never a master-and-servant relationship between Douglas Machine and McClure Associates. And because McClure Associates’ breach-of-contract claim is not a statutory cause of action, we conclude that the statute of limitations in section 541.07(5) is inapplicable here. Rather, McClure Associates’ breach-of-contract claim for a commission on the Lloyd’s Barbeque sale is subject to the six-year statute of limitations in section 541.05, subdivision 1(1).

Generally, “[a] cause of action accrues when the right to institute and maintain a lawsuit arises, when the action can be brought in a court of law without dismissal for failure to state a cause of action, and it has long been settled that a cause of action for breach of contract accrues on the breach of the terms of the contract.” Levin, 441 N.W.2d at 803 (citations omitted). McClure Associates acknowledges that under its contract with Douglas Machine, “payment would be due at the time of [Douglas Machine’s] receipt of payments.” McClure Associates also acknowledges that in May 2000, it knew that Douglas Machine had received full payment for the Lloyd’s Barbeque sale, and it complained to Douglas Machine regarding the disputed commission.

Therefore, based on the record before us, the breach-of-contract claim arising from the Lloyd’s Barbeque sale accrued in May 2000. Because McClure Associates amended its complaint in 2004 to include its claim for a commission on the Lloyd’s Barbeque sale, its breach-of-contract claim is not barred by the six-year statute of limitations.

DECISION

Because a corporation may be a “commission salesperson” within the meaning of Minn.Stat. § 181.145 (2004), the district court erred by granting summary judgment to Douglas Machine on the ground that McClure Associates was not a commission salesperson. Because McClure Associates seeks damages for common-law breach of contract and amended its complaint to include its claim for a commission on the Lloyd’s Barbeque sale before the expiration of the six-year statute of limitations in section 541.05, subdivision 1(1), the district court erred by concluding that the breach-of-contract claim relating to that sale was barred by the statute of limitations in section 541.07(5).

Reversed and remanded.

      . Paul McClure is the president of McClure Associates, of which he and his wife are the sole shareholders. In his deposition, Paul McClure admitted that McClure Associates is the proper plaintiff in this action against respondents.

      . Davis Engineering was formerly a separate entity, but it is now a business unit of Douglas Machine. For convenience, respondents will be referred to together as Douglas Machine.

      . The district court also dismissed McClure Associates' claim for attorney fees under Minn.Stat. § 325E.37 (2004), and it dismissed McClure Associates’ claim for damages for a commission on the Edwards Label sale. McClure Associates does not challenge on appeal the dismissal of these claims.

      . Minn.Stat. § 181.13 (2004) provides a penalty for an employer's failure to promptly pay wages to a discharged employee; Minn.Stat. § 181.14 (2004) protects an employee who quits or resigns employment by providing that the employee is entitled to the prompt payment of wages or commissions earned.


author: DIETZEN, Judge.

text:
    STATE of Minnesota, Appellant, v. H.A., Respondent.
    No. A05-1792.
    Court of Appeals of Minnesota.
    June 20, 2006.

      Steven M. Tallen, Minneapolis, MN, for appellant.
    H. A., Plymouth, MN, pro se respondent.
    Considered and decided by STONEBURNER, Presiding Judge; DIETZEN, Judge; and HARTEN, Judge.

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

   OPINION

DIETZEN, Judge.

Appellant challenges the district court order and judgment granting respondent’s expungement petition, arguing that the district court abused its discretion by expunging court and executive-branch records. Because the district court’s finding of infringement of respondent’s constitutional rights is clearly erroneous, and the district court failed to find that the benefits of expungement to respondent are commensurate with the disadvantages to the public, we conclude that the district court abused its discretion by exercising its inherent authority to expunge and, therefore, we reverse.

FACTS

In September 2001, appellant State of Minnesota charged respondent H.A. with interference with privacy in violation of Minn.Stat. § 609.746, after he allegedly peered under changing room walls at a 13-year-old girl while she tried on clothes at a mall department store.

Respondent entered an Alford plea to the charge under an agreement staying the imposition of his sentence, on the conditions that respondent commit no similar offenses, complete a sex offender assessment, and either pay a fine or perform community service. Respondent met these conditions, and the guilty plea was vacated and the charge dismissed.

Respondent then filed a petition for ex-pungement of records pertaining to the interference with privacy offense, stating, “I can’t find a job because [of] my records. I need to pay my home’s mortgage. I’m disable[d].” The Bureau of Criminal Apprehension (BCA) did not oppose respondent’s petition. Appellant opposed the petition, arguing that respondent did not meet the statutory requirements for ex-pungement and that there was no basis to expunge the records under the court’s inherent authority.

At the expungement hearing, respondent testified that he sought expungement because he had applied for a position in airport security and feared that his record would adversely affect his employability. Following the hearing, the district court found that

[t]here is arguably an infringement of [respondent’s] constitutional rights. A part of the plea negotiation was that the case would be dismissed upon successful completion of the Stay of Imposition. At the time of the plea, the plea negotiation was understood to include cleaning up the [respondent’s] record after the period of the stay of imposition had elapsed.

The district court concluded that it did not have statutory authority to expunge respondent’s records, but had authority under its inherent powers; and it granted expungement of court records and records of the BCA, other law enforcement agencies, and the city, county, and attorney general’s offices. This appeal followed.

ISSUES

I. Did the district court abuse its discretion by granting expungement of respondent’s court records under its inherent powers?

II. Did the district court abuse its discretion by granting expungement of respondent’s executive-branch records under its inherent powers?

ANALYSIS

I.

Appellant raises two issues on appeal. First, appellant argues that the district court lacked inherent authority to expunge respondent’s court records. Although respondent did not file a brief, the appeal is decided on the merits. Minn. R. Civ.App. P. 142.03.

A district court’s exercise of its inherent power to expunge is a matter of equity, which this court reviews under an abuse-of-discretion standard. State v. Ambaye, 616 N.W.2d 256, 261 (Minn.2000). A district court’s findings of fact will not be set aside unless clearly erroneous. Novack v. Northwest Airlines, Inc., 525 N.W.2d 592, 597 (Minn.App.1995). Clearly erroneous means “manifestly contrary to the weight of the evidence or not supported by the evidence as a whole.” Id. (quotation omitted).

A district court’s inherent authority to issue expungement orders affecting court records is limited to: (1) when the petitioner’s constitutional rights may be seriously infringed by retention of petitioner’s records; and (2) when a petitioner’s constitutional rights are not involved, but the court determines that “expungement will yield a benefit to the petitioner commensurate with the disadvantages to the public from the elimination of the record and the burden on the court in issuing, enforcing and monitoring an expungement order.” Ambaye, 616 N.W.2d at 258 (quotation omitted).

Here, the record provided on appeal does not contain any evidence that future expungement was a condition of the plea agreement, nor does it indicate any other factual basis for a finding of constitutional infringement. The conditions of the plea agreement, which did not include ex-pungement, were stated on the record at the guilty-plea hearing. Further, respondent did not argue that a promise of ex-pungement was made under the plea agreement, or assert any other constitutional infringement as a basis for expungement. Consequently, the district court’s finding of a constitutional infringement is contrary to the record and, therefore, clearly erroneous.

The second ground for expungement under the court’s inherent authority is a determination that respondent’s benefits from expungement are commensurate with the disadvantages to the public and the court. Two recent Minnesota cases discuss the factors relevant to this determination. See id.; State v. Schultz, 676 N.W.2d 337, 341 (Minn.App.2004). In Ambaye, the Minnesota Supreme Court held that the district court did not abuse its discretion by refusing to expunge:

[T]he court stated that the benefit respondent stood to gain from expungement, if granted, would override the very purpose of the background check. Employers, sometimes pursuant to law and sometimes voluntarily, have required background checks in order to “assess any potential risk involved with hiring certain individuals.” Further, the district court reasoned that the public had a “compelling interest in maintaining [respondent’s] record of violence, particularly because the underlying offense [respondent] was charged with was murder in the first degree.” Finally, the district court noted that respondent is “currently gainfully employed, thus his [criminal record] is not preventing him from obtaining employment.”

616 N.W.2d at 261. In Schultz, this court held that the benefits to petitioner were commensurate with the disadvantages to the public and the burden on the court when the record indicated that petitioner had controlled his mental-health issues, undergone “extensive rehabilitation efforts,” not been involved in any criminal incidents since the offense on record, and “has had difficulty overcoming his employment and housing problems.” 676 N.W.2d at 341.

Thus, the factors to be considered by the district court are: (a) the extent that a petitioner has demonstrated difficulties in securing employment or housing as a result of the records sought to be expunged; (b) the seriousness and nature of the offense; (c) the potential risk that the petitioner poses and how this affects the public’s right to access the records; (d) any additional offenses or rehabilitative efforts since the offense, and (e) other objective evidence of hardship under the circumstances. Ambaye, 616 N.W.2d at 261 (seriousness and risk); Schultz, 676 N.W.2d at 341 (difficulties with employment and housing, nature of the offense, subsequent offenses and rehabilitative efforts). While we appreciate the informality of expungement proceedings, we are unable to review whether a grant or denial of expungement constitutes an abuse of discretion unless the district court makes findings or determinations on the record regarding these factors. See, e.g., Crowley Co. v. Metro. Airports Comm’n, 394 N.W.2d 542, 545 (Minn.App.1986) (noting that, absent findings, it is impossible to know what the district court concluded on the issues and, thus, whether denial of a motion was an abuse of discretion).

The first factor requires that the petitioner demonstrate difficulties in securing employment or housing as a result of the criminal records. Here, the district court found that “[t]he benefits to [appellant] of receiving an expungement are to find employment.” But while it is true that respondent sought expungement in order to secure employment, respondent did not indicate a history of unsuccessful employment attempts. Instead, respondent appeared to be seeking expungement in order to obtain a specific position with airport security. And because respondent owns his own home, housing is not an issue. Thus, this factor does not weigh in favor of expungement.

The second factor considers the nature and severity of the offense on record. Although the district court did not address this factor, the record indicates that respondent’s interference-with-privacy offense was committed against a 13-year-old girl. And the legislature recently increased the degree of severity of this offense from a misdemeanor to a gross misdemeanor for a first-time offense, and from a gross misdemeanor to a felony for a second-time offense, signifying its intent to treat this offense more seriously, particularly in regard to repeat offenders. Minn. Stat. § 609.746, subd. 1 (Supp.2005); see 2005 Minn. Laws. ch. 136, art. 17, § 43. Consequently, this factor also does not weigh in favor of expungement.

The third factor compares a petitioner’s potential risk to the public’s right to access the records. The district court found that “[t]here is a strong public interest in maintaining accurate public records. The disadvantages to the public of expungement are that the criminal justice system will have inaccurate files about offenders and prosecutors and courts will not know whether or not a defendant is a first time offender.”

Law enforcement and prosecutorial access to records is particularly important where, as here, the offense is sexual in nature and therefore prone to recidivism. See, e.g., In re C.M., 578 N.W.2d 391, 394 (Minn.App.1998) (taking judicial notice of the problem of sex offender recidivism). The legislature has also deemed commission of an interference-with-privacy offense an indicator of risk in certain employment situations, and, therefore, employers have a legitimate interest in access to such information when making hiring decisions. See, e.g., Minn.Stat. §§ 119B.125, subd. 2(d) (2004) (prohibiting authorization as family child-care provider if person was convicted of, admitted to, or a preponderance of evidence indicates repeat violations of section 609.746 in last ten years); 245C.14-.15 (2004) (disqualifying repeat offenders under section 609.746 from positions involving direct contact with clients receiving human services). Because respondent is seeking employment with airport security, a position of authority involving access to individuals’ persons and property, employer access to records pertaining to this particular offense is clearly relevant. Thus, this factor weighs against expungement.

The fourth factor considers any additional offenses or rehabilitative efforts since the offense on record. The district court stated in its findings that “[t]he City further argues that this offense is similar to one for which [respondent] is currently on probation and as such this case along with the other case, works to establish a pattern of behavior.” A subsequent repeat offense would weigh heavily against ex-pungement, but it is unclear from the record whether there is a factual basis for this finding. The record does not indicate any rehabilitative efforts on respondent’s part. Thus, this factor does not support expungement.

Because the record does not establish the existence of any constitutional infringement, and the demonstrated benefit to respondent is not commensurate with the disadvantages to the public, the district court abused its discretion by granting expungement of respondent’s court records.

II.

Second, appellant argues that the district court’s inherent authority to expunge judicial records does not extend to records maintained by executive agencies, and therefore, the district court erred by ordering expungement of executive-branch records of the BCA, other law enforcement agencies, and the city, county, and attorney general’s offices.

The Minnesota Supreme Court has stated that the inherent authority of courts to control the performance of judicial functions extends to expungement orders affecting court records. State v. C.A., 304 N.W.2d 353, 358 (Minn.1981). But the supreme court cautioned, “Because this authority of the court extends only to its unique judicial functions, courts must proceed cautiously in exercising that authority in order to respect the equally unique authority of the executive and legislative branches of government over their constitutionally authorized functions.” Id. at 358-59 (emphasis added).

The supreme court later applied the “judicial-function” standard to the district court’s decision to expunge the records of a petitioner seeking expungement of police and prosecutorial records after the petitioner was arrested for rape but never charged, concluding that expungement was not necessary to protect a “unique judicial function” because the courts cannot generally control “how prosecutors run their offices or how police departments investigate crimes[,]” and therefore the judiciary had no legitimate interest in expunging or sealing such records. In re Quinn, 517 N.W.2d 895, 900 (Minn.1994). Relying on the Quinn decision, this court subsequently held that:

Expungement becomes essential to the performance of the courts’ fundamental function of protecting legal rights only when a petitioner’s rights have been violated. Thus, absent evidence that executive agents abused their discretion in the performance of a governmental function, the judiciary may not interfere with the executive’s record-keeping function by ordering the expungement of its records.

State v. T.M.B., 590 N.W.2d 809, 812 (Minn.App.1999), review denied (Minn. June 16, 1999). And in State v. Schultz, this court again held that, absent evidence of injustice resulting from an executive agent’s abuse of discretion, the district court oversteps its inherent authority when it orders the executive branch to seal records. 676 N.W.2d at 343-44.

Because the record does not contain evidence that any executive agents abused their discretion, the district court lacked inherent authority to order ex-pungement of respondent’s executive-branch records.

DECISION

Because the district court’s finding of infringement of respondent’s constitutional rights is clearly erroneous, and the district court failed to find that the benefits of expungement to respondent are commensurate with the disadvantages to the public, we conclude that the district court abused its discretion by expunging respondent’s court and executive-branch records under its inherent authority and, therefore, we reverse.

Reversed.

      . District courts have both statutory and inherent powers to grant expungement relief. State v. Davisson, 624 N.W.2d 292, 295 (Minn.App.2001), review denied (Minn. May 5, 2001). The district court has statutory authority under Minn.Stat. § 609A.02, subd. 3 (2004), to expunge all records relating to an arrest if the proceedings were resolved "in favor” of the person petitioning for expungement. See State v. J.Y.M., 711 N.W.2d 139, 141 (Minn.App.2006). Here, the district court properly determined that it lacked statutory authority to expunge respondent’s records because the proceedings were not resolved in respondent's favor. See State v. A.C.H., 710 N.W.2d 587, 589 (Minn.App.2006) ("dismissal after acceptance of a plea and a finding of guilt, most commonly when imposition of sentence is stayed, is not a resolution in the defendant’s favor”). Therefore, the district court's statutory authority to grant ex-pungement is not at issue on appeal.