author: DORIS 0. HUSPENI, Judge DANIEL F. FOLEY, Judge

text:
    Mark P. WIEGEL, and the City of St. Paul Police Federation, Appellants, v. The CITY OF ST. PAUL and John C. Hamilton, Director of the Office of Human Resources, Respondents, Gerald A. Simon, Allen J. Leopold and St. Paul Fire Fighters Local 21, Appellants, v. The City of St. Paul and John C. Hamilton, Director of the Office of Human Resources, Respondents.
    No. C6-00-2050.
    Court of Appeals of Minnesota.
    May 8, 2001.
    Review granted July 24, 2001.

      Mark W. Gehan, Collins, Buckley, Saun-try & Haugh, P.L.L.P., St. Paul, MN, (for appellants).
    Clayton Robinson, St. Paul City Attorney, Gerald T. Hendrickson, Assistant City Attorney, St. Paul, MN, (for respondents).

      Considered and decided by RANDALL, Presiding Judge, FOLEY, Judge, and HUSPENI, Judge.

       BLATZ, C J., took no part in the consideration or decision of this case.

   OPINION

DORIS 0. HUSPENI, Judge

Appellants, contending that they are “aggrieved persons” within the meaning of Minn.Stat. § 13.08, subd. 4 (2000), challenge the district court’s vacation of an award of attorney fees. Because appellants do not meet the definition of “aggrieved persons,” we affirm.

FACTS

Appellant Mark Wiegel is a 16-year veteran of the St. Paul Police Department, and a member of the St. Paul Police Federation. In 1998, Wiegel participated in a promotional examination for the position of police sergeant, administered by the City of St. Paul. The promotional exam was divided into two separate testing stages. Wiegel successfully completed a written and practical exam during stage one, and was invited to return to the testing center for stage two, an oral interview.

After completing the oral interview, Wiegel sought access to the interviewers’ notes and memoranda produced during the oral exam. The City refused to provide Wiegel access to the requested data, noting that Minn.Stat. § 13.34 (2000) of the Minnesota Data Practices Act prohibited the disclosure. Subsequently, the St. Paul Police Federation requested an advisory opinion from the Commissioner of Administration. The commissioner found that neither the identity of the interviewers nor their interview notes were protected from disclosure under Minn.Stat. § 13.34. The City was provided with a copy of the commissioner’s opinion. The City advised the federation that they would not act in conformance with the commissioner’s determination, but would disclose the identity of the interviewers.

Appellant Gerald Simon is employed by the City of St. Paul as a firefighter, and is a member of the St. Paul Firefighters Local 21. In 1999, Simon participated in a promotional examination for the position of fire captain, administered by the City of St. Paul. The exam consisted of three components: (1) “fire simulator” exam, (2) “in-basket” exam, and (3) oral interview. Simon successfully passed two portions of the exam but failed to achieve a passing score on the oral interview. Simon subsequently submitted a request to review the “scoring criteria” and “scores from each board member.” The City refused to disclose the requested data.

Appellant Allen J. Leopold is employed by the City of St. Paul as a firefighter, and is a member of the St. Paul Firefighters Local 21. Both Leopold and Simon participated in the same promotional exam administered by the City of St. Paul. Because Leopold failed to achieve a passing score during the first stage of the exam, he was not given an opportunity to participate in the oral interview portion of the exam. Leopold sought access to the audiotape recorded during the “fire simulator” portion of his exam, and to the interviewers’ scoring sheets prepared during the exam. Subsequently, the St. Paul Firefighters Local 21 submitted a similar request. The City refused to disclose the requested data.

Wiegel, Simon, and Leopold brought an action against the City. Wiegel and the City filed cross-motions for summary judgment. Because of the legal and factual similarity of Wiegel, Simon, and Leopold’s claims, the cases were consolidated. The district court conducted an in camera review of the examination materials. Subsequently, the district court granted appellants’ motion for summary judgment and ordered the City to provide (1) Wiegel and Simon the notes and memoranda prepared during their respective oral interviews, and (2) Leopold the notes and memoranda compiled during the “lire simulator” portion of his exam. The court awarded attorney fees to appellants. Additionally, the court announced a prospective rule:

Defendants in future cases shall provide the examinee with a complete record of the examinee’s testing results, along with the notes and memoranda of each examiner, unless the responsible authority determines that access would compromise the objectivity, fairness or the integrity of the examination process.

Subsequently, the court issued an amended order that provided a period of time during which the City could object to the attorney fees award. Appellants then sought clarification regarding which, if any, of the disputed materials were “examination materials” under Minn.Stat. § 13.34. The City opposed appellants’ request for clarification. The City also sought vacation of the attorney fees award, arguing that this court’s recently released opinion, Washington v. Independent Sch. Dist. No. 625, 610 N.W.2d 347, 349 (Minn.App.2000), controlled in the present case.

The parties could not agree on language to modify the amended order, and the court found that no clarification was necessary. Pursuant to Washington, the court vacated the award of attorney fees. This appeal followed.

ISSUE

Did the district court err by concluding that appellants were not “aggrieved persons” under Minn.Stat. § 13.08, subd. 4 (2000), and therefore not entitled to attorney fees?

ANALYSIS

This court will not reverse a district court’s award or denial of attorney fees absent an abuse of discretion. Becker v. Alloy Hardfacing & Eng’g Co., 401 N.W.2d 655, 661 (Minn.1987). When the determination of the appropriateness of attorney fees involves the construction of Minnesota’s Data Practices Act, a question of law, this court reviews such construction de novo. Deli v. Hasselmo, 542 N.W.2d 649, 655 (Minn.App.1996).

The goal of all interpretation and construction of statutory language is to “ascertain and effectuate the intention of the legislature.” Minn.Stat. § 645.16 (2000). If the words of the statute are “clear and free from all ambiguity,” further construction is neither necessary nor permitted. Id. It is a fundamental rule of statutory construction that words and phrases are to be construed according to their plain meaning. Id.; Kirkwold Constr., Inc. v. M.G.A. Const., Inc., 513 N.W.2d 241, 244 (Minn.1994). A reviewing court may not read ambiguity into an otherwise clear statute under the guise of statutory interpretation. Turna v. Commissioner of Econ. Sec., 386 N.W.2d 702, 706 (Minn.1986).

The Minnesota Government Data Practices Act regulates the collection, creation, storage, maintenance, dissemination, and access to government data in state agencies and political subdivisions. Minn.Stat. § 13.01, subd. 3 (2000). The act establishes a presumption that ah government data is “public” unless there is a federal law, state statute, or temporary classification of data that provides for an exception. Id.

Upon request, “an individual who is the subject of stored private or public data on individuals shall be shown the data” and “informed of the content and meaning of that data.” Minn.Stat. § 13.04, subd. 3 (2000). Appellants sought access to then-individual data in accordance with this provision. In refusing to provide the data, the City claimed that disclosure would compromise the objectivity and fairness of the examination process and that this data was nonpublic, available only by court order.

The district court, after examining the requested data in camera, ordered that it be provided to appellants. Having obtained the relief they sought in district court, appellants contend that the City wrongfully withheld private data to which appellants were entitled as a matter of right, that they are “aggrieved” persons within the meaning of Minn.Stat. § 13.08, subd. 4 (2000), and that they are entitled to attorney fees under that statute, which provides in pertinent part:

any aggrieved person seeking to enforce the person’s rights under this chapter or obtain access to data may bring an action in district court to compel compliance with this chapter and may recover costs and disbursements, including reasonable attorney’s fees, as determined by the court.

Therefore, argue appellants, the district court erred in vacating the attorney fees award it had made initially. The City, while not challenging the decision to make the requested data available, responds that appellants were not entitled to the data as of right, but only pursuant to an order of the court; therefore, appellants were not “aggrieved persons” entitled to attorney fees. In support of this argument, the City relies on Minn. Stat. § 13.34 (2000) which provides:

Data consisting solely of testing or examination materials, or scoring keys used solely to determine individual qualifications for appointment or promotion in public service, or used to administer a licensing examination, or academic examination, the disclosure of which would compromise the objectivity or fairness of the testing or examination process are classified as nonpublic, except pursuant to court order. Completed versions of personnel, licensing, or academic examination shall be accessible to the individual who completed the examination, unless the responsible authority determines that access would compromise the objectivity, fairness, or integrity of the examination process. * * *.

(Emphasis added.)

There is merit to the argument of the City. In its order making the requested data available to appellants, the district court stated:

Defendants in future cases shall provide the examinee with a complete record of the examinee’s testing results, along with the notes and memoranda of each examiner, unless the responsible authority determines that access would compromise the objectivity, fairness or the integrity of the examination process.

This statement of the district court is a clear recognition of the discretion granted to the City to withhold data under certain circumstances. When disclosure is denied under section 13.34, a party may seek relief before the court and may be successful in obtaining that relief. That success, however, is not the equivalent of a determination that there was an entitlement as of right to the requested data.

The district court’s reliance on Washington v. Independent Sch. Dist. No. 625, 610 N.W.2d 347 (Minn.App.2000), in vacating the award of attorney fees was appropriate. In that case, a teacher who had been terminated obtained a court order for disclosure of a school district’s nonpublic protected data concerning the teacher’s personnel records and the investigation of him. Id. at 348. This court determined that the teacher was not an “aggrieved person” entitled to attorney fees; that the school district did not wrongfully withhold data, but rather withheld data that by statute was not accessible to the teacher without a court order. Id. at 349.

The Washington court determined that, although Washington was entitled to seek disclosure of nonpublic data by obtaining a court order, he was not an aggrieved person within the intent of Minn.Stat. § 13.08, subd. 4. Id. Similarly, in this case, although appellants were entitled to seek disclosure of data by seeking court intervention, the City properly exercised its discretion in withholding data which it believed would compromise the objectivity or fairness of the examination process if disclosed.

In this case, the district court inspected the data in camera and determined, in effect, that its release would not compromise the objectivity or fairness of the testing or examination process. In determining the critical issue before this court-whether appellants are “aggrieved parties” entitled to attorney fees-we conclude that they were not. The district court recognized the applicability of section 13.34, analyzed the conduct of the City in consideration of the discretion given responsible authorities under the statute, and incorporated the continuing discretion in its order. Nothing in the court’s order, however, can support even an inference that appellants were entitled to the requested data as a matter of right, or that the City acted wrongfully in withholding the data until ordered to do so.

In both this case and Washington, responsible authorities were entitled under relevant statutes to withhold data until ordered to do so by the court. In neither case, therefore, were those who sought disclosure of the data “aggrieved persons” entitled to attorney fees. The court properly vacated such award here.

DECISION

Because the terms of Minn.Stat. § 13.08, subd. 4 (2000), permit the award of attorney fees and costs to aggrieved persons, appellants are not entitled to such an award.

Affirmed.

DANIEL F. FOLEY, Judge

(dissenting)

I respectfully dissent and would reverse. In vacating the award of attorney fees, the district court, relying on Washington v. Independent Sch. Dist. No. 625, 610 N.W.2d 347, 349 (Minn.App.2000), concluded that the disputed data were not accessi.ble by appellants absent a court order. The majority concurs with that holding, but I disagree.

I would reverse for either of two reasons. First, words and phrases are to be construed according to their plain meaning. Minn.Stat. § 645.08(1) (2000). Interviewer’s notes and memoranda do not constitute “examination materials.” Therefore, Minn.Stat. § 13.34 (2000) is inapplicable to the present case. Second, the goal of all interpretation of statutory language is to “ascertain and effectuate the intention of the legislature.” MinmStat. § 645.16 (2000). By including the word “solely” within Minn.Stat. § 13.34, the legislature intended this word to be given meaning. Even assuming that the requested data were examination data, they are not solely examination materials, and therefore fall outside the scope of Minn.Stat. § 13.34.

The plain language of Minn.Stat. § 13.34, requires that, in order to be considered “examination data,” the data must consist “solely of testing or examination materials, or scoring keys” (emphasis added). This requirement was construed by the commissioner and the district court to include only objective examination materials. Therefore, the court concluded that only the actual exams and/or scoring keys were wholly objective in nature, and appellants were entitled to subjective materials, including the interviewers’ notes and memo-randa. However, the court failed to specify which, if any, of the requested data were classified as examination data under Minn. Stat. § 13.34. But for the court’s qualifying language referencing future examinees, the court’s order does not reference Minn. Stat. § 13.34.

Examination materials consist of the questions posed to examinees, but would not include the interviewers’ impressions of the examinee’s oral responses. The interviewers’ notes and memoranda are not tests, examination materials, or scoring keys. Therefore, Minn.Stat. § 13.34 is inapplicable to the present case. Accordingly, the data sought by appellants would be private data, available for review by the examinee. “Private data on individuals” means data “which is made by statute or federal law applicable to the data: (a) not public; and (b) accessible to the individual subject of that data.” MinmStat. § 13.02, subd. 12 (2000).

The majority reasons that the interviewer’s notes and memoranda were examination materials. Even assuming that the majority is correct in classifying the notes and memoranda as such, the requested information was not “data consisting solely of testing or examination materials, or scoring keys.” The legislature included the phrase “solely” and this court must give effect to the plain language of the statute. The notes and memoranda are not data consisting solely of examination materials, because they include the interviewer’s impressions of the examinee. Even if the notes did contain the examinee’s verbatim responses, these responses likely do not constitute examination materials.

Furthermore, the disclosure of the interviewer’s impressions of the examinee would not compromise the “objectivity or fairness of the testing or examination process.” By disclosing the disputed data, the city would reveal the examinee’s individual responses to oral questions. The exami-nee’s responses, correct or incorrect, may or may not lead one to determine the interviewer’s question. The interviewers’ notes would not disclose information that would compromise the integrity of the testing process. The notes and memoranda do not contain the favored or preferred response, but simply contain the individual interviewer’s impressions of the examinee.

All data compiled by the government is presumed to be accessible by the public unless specifically excluded by law or classification. Minn.Stat. § 13.01, subd. 3 (2000). The disputed data are categorically excluded from Minn.Stat. § 13.34. Because the data are private data on individuals, appellants are entitled to the data.

Unlike Washington, appellants’ right to access was not predicated on obtaining a court order. Appellants were entitled to access to the interviewers’ notes and mem-oranda without a court order. Because appellants were entitled to access to the data as a matter of right, they are “aggrieved persons” entitled to reasonable attorney fees under Minn.Stat. § 13.08, subd. 4 (2000). The common usage of “aggrieved” is “[t]reated wrongfully,” or “offended,” “as by denial of or infringement upon one’s legal rights.” Washington, 610 N.W.2d at 349 (quoting THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE 34 (3d ed. 1992)). Appellants fit the common usage of the term “aggrieved persons.”

Because appellants are entitled to attorney fees and costs under Minn.Stat. § 13.08, subd. 4, for compelling the city to comply with the data practices act, I would reverse.

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

      . Appellants sought access to interviewers’ notes and memoranda. Each interviewer was given a document entitled "Notes” to use during the oral exam. The Notes record the rating the interviewer gave the examinee on each question, and contain additional space for remarks. The exam questions are not contained on the Notes form.
      The Director of Human Services for the City of St. Paul noted that
      the Notes of the [interviewers] are not the "scoring of [the applicants] papers” nor are they “ 'short answer’ questions and answers.” They are the ratings of the applicant's performance at a[sic] the Oral Interview.

      . One is "aggrieved” when ”[t]reated wrongfully,” or “offended,” "as by denial of or infringement upon one's legal rights.” Washington v. Independent Sch. Dist. No. 625, 610 N.W.2d 347, 349 (Minn.App.2000) (quoting The American Heritage Dictionary of the English Language 34 (3d ed. 1992)).

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


source: Caselaw Access Project

author: BERTRAND PORITSKY, Judge

license: Public Domain

text:
    In the Matter of the FINANCIAL RESPONSIBILITY OF FOSTER CARE SERVICES PROVIDED TO T.W.
    No. C9-00-1815.
    Court of Appeals of Minnesota.
    May 29, 2001.

      James R. Olson, Brown County Attorney, James T. Clark, Assistant Brown County Attorney, New Ulm, MN, (for appellant).
    Raymond F. Schmitz, Olmsted County Attorney, Geoffrey A. Hjerleid, Assistant Olmsted County Attorney, Rochester, MN, (for respondent).
    Considered and decided by SHUMAKER, Presiding Judge, HARTEN, Judge, and PORITSKY, Judge.
   OPINION

BERTRAND PORITSKY, Judge

Appellant Brown County and respondent Olmsted County dispute which of them is responsible for the cost of social services provided to a child who was adjudicated in need of protection or services (CHIPS) by the Brown County District Court but was later moved to live with extended family in Olmsted County, where he continued to receive services. The Department of Human Services (DHS) determined that Olmsted County was responsible for the cost of the services. On review, the Olmsted County district court reversed and ruled that Brown County is responsible for the cost of the services. Brown County appeals. We affirm.

FACTS

In February 1998, on a petition filed by Brown County Family Services, the Brown County District Court adjudicated T.W. and his two siblings CHIPS. A March order transferred custody of the children to Brown County for foster placement until mother could care for the children. Later, T.W.’s siblings, but not T.W., were returned to the mother. T.W. went through several foster-care placements and treatment programs in unsuccessful attempts to curb his violent behavior.

In July 1999, T.W.’s case manager sent the Brown County Attorney a letter stating that returning T.W. to his mother was not possible and that the court should address transfer of T.W.’s physical and legal custody to his aunt and uncle in Olmsted County. The county attorney filed a motion for permanent placement allegedly seeking “permanent foster care” for the child. A hearing was set for September.

During September, the child started living with his aunt and uncle, and Olmsted County started providing services for the child. When Olmsted County later billed Brown County for the services, the counties disputed responsibility for the cost of the services.

After the September hearing, the Brown County District Court issued an October order stating that T.W. could not be returned to his mother and awarding permanent legal and physical custody of the child to his aunt and uncle. The order also indicated that any interested party could seek review of the placement. Because the child’s violent behavior continued and the counties’ billing dispute remained unresolved, a December 20 hearing was held, addressing both issues. On December 21, 1999, the Brown County District Court issued an order and memorandum that (a) stated that the October order placed “permanent physical custody” with “permanent foster parents” who reside in Olmsted County; (b) referred to T.W.’s aunt and uncle as T.W.’s “permanent foster parents”; (c) stated Olmsted County was to assume responsibility for the cost of the services for T.W.; (d) stated that if Olmsted County continued to refuse to pay for T.W.’s services, Brown County should make the payments and the responsibility for payment would be decided later; and (e) discharged the Brown County guardian ad litem and all counsel appointed in Brown County.

The Brown County Attorney then sent the Brown County District Court a letter indicating that the order’s references to the child being in foster care meant Brown County could be liable for the cost of the services provided to the child. The Brown County District Court then issued an amended order on December 23 deleting the references to the child being in foster care with his aunt and uncle. The amended order states the child’s permanent legal and physical custody had been transferred to the aunt and uncle.

Olmsted County then asked DHS to determine which county was responsible for the costs associated with the child, and DHS ruled Olmsted County was responsible. On review, the Olmsted County District Court reversed and ruled Brown County was the financially responsible county. Brown County appeals.

ISSUE

Did the district court correctly rule that Brown County was to be responsible for the cost of the services provided to the child?

ANALYSIS

Chapter 256G is the “Minnesota Unitary Residence and Financial Responsibility Act.” Minn.Stat. § 256G.01, subd. 2 (2000). It governs determinations regarding residence and financial responsibility for social services. In re Bratsch, 587 N.W.2d 656, 658 (Minn.App.1999). Interpreting the act is a question of law, which this court reviews de novo. Id.

Under the act, identifying the county financially responsible for social services depends on the circumstances of the case. See Minn.Stat. § 256G.02, subd. 4(b)-© (2000) (containing five definitions of “[cjounty of financial responsibility” for different situations). One definition of “county of financial responsibility” indicates that,

[f]or an individual already having a social service case open in one county, financial responsibility for any additional social services attaches to the''case that has the earliest date of application and has been open without interruption.

Minn.Stat. § 256G.02, subd. 4(e) (2000). Olmsted County argues that this definition makes Brown County the county of financial responsibility in this ease.

T.W. was adjudicated CHIPS in February 1998 and started receiving services from Brown County no later than March 1998 when his custody was transferred from his mother to Brown County for foster placement. Foster care services are “social services” within the meaning of the act. See Minn.Stat. § 256G.01, subd. 3 (2000) (stating act applies to social service programs including “components of the Community Social Services Act, sections 256E.01 to 256E.12”); Minn.Stat. § 256E.03, subd. 2(a)(1) (2000) (defining “Community social services” to include services provided by counties to “families with children under age 18, who are experiencing child dependency, neglect or abuse”). Any social services case opened in Olmsted County for T.W. would not have been opened until after he was moved there in 1999. Additionally, because Brown County was continuously involved with T.W. before he was moved to Olmsted County, the Brown County social services case had been open “without interruption.”

Brown County argues it is not the financially responsible county because Minn. Stat. § 256G.07, subd. 1 (2000) is controlling. With exceptions not invoked here, that provision states:

[A] person who has applied for and is receiving services or assistance under a program governed by this chapter, in any county in this state, and who moves to another county in this state, is entitled to continue to receive that service from the county from which that person has moved until that person has resided in nonexcluded status for two full calendar months in the county to which that person has moved.

This provision does not mention financial responsibility; it says only that if a person moves to a new county, until that person has lived in the new county in “unexcluded status” for two months, the person is enti-tied both to continue receiving the same services received before the move, and to receive those services from the original county. Thus, once the person has been in a new county in “nonexcluded status” for two months, the new county becomes responsible for providing — as opposed to paying for — services. Cf. id., subd. 2 (2000) (requiring county from which service recipient moved to conduct eligibility review and transfer service recipient’s file to county to which service recipient moved and to do so before service recipient has spent two months in “nonexcluded status” in new county). But because section 256G.07, subdivision 1, upon which Brown County relies, does not address the financial responsibility for those services, the identity of the “county of financial responsibility” is determined by Minn.Stat. § 256G.02, subd. 4(e).

DECISION

The district court properly concluded that a change in the identity of the county providing social services under Minn.Stat. § 256G.07, subd. 1 (2000), did not change the identity of the “county of financial responsibility” under Minn.Stat. § 256GÍ.02, subd. 4(e) (2000).

Affirmed.

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

      . A copy of the letter is in the appendix to Olmsted County’s brief, and a copy of the amended order is in the appendix to Brown County’s brief. Neither document, however, is in the district court file. The letter and amended order are critical to this court's identification of the issues presented on appeal. Therefore, we take judicial notice of them. Rigwald v. Rigwald, 423 N.W.2d 701, 704 n. 5 (Minn.App.1988).

      . We note that none of the orders involved in this case specifically identifies the statutory authority under which services for the child were to be provided.


author: DORIS OHLSEN HUSPENI, Judge.

text:
    Lawrence A. JACOBSON, et al., Appellants, v. BOARD OF TRUSTEES OF THE TEACHERS RETIREMENT ASSOCIATION, an Agency of the State of Minnesota, et al., Respondents.
    No. CX-00-2097.
    Court of Appeals of Minnesota.
    May 29, 2001.

      Joseph T. O’Neill, Elizabeth I. Good-paster, Michael D. O’Neill, O’Neill, Grills & O’Neill, P.L.L.P.; and Stewart C. Lop-er, Mary F. Seymour, Loper & Seymour, P.A., St. Paul, MN, (for appellants).
    Mike Hatch, Attorney General, John S. Garry, Jon K. Murphy, Assistant Attorneys General, St. Paul, MN, (for respondents).
    Considered and decided by WILLIS, Presiding Judge, AMUNDSON, Judge, and HUSPENI, Judge.
   OPINION

DORIS OHLSEN HUSPENI, Judge.

Appellants, members of the Teachers Retirement Association (TRA), challenge dismissal by the district court under Minn. R. Civ. P. 12.02(e) of their action against respondents State of Minnesota and the TRA Board of Trustees. The district court determined that the six-year statute of limitations on appellants’ claims of unconstitutional impairment of contract, denial of equal protection, common law breach of contract, promissory estoppel, and unjust enrichment had begun to run as of the effective date of 1989 statutory amendments, which substantially changed or modified appellants’ pension plans, not on the dates when appellants retired and began to collect their pensions. Because the district court correctly determined that the six-year statute of limitations had run on all of appellants’ claims, we affirm the rule 12 dismissal.

FACTS

Appellants are TRA members who taught during the 1968-69 school year and who have already retired or will retire on January 1,1998, or thereafter. When they first became employed as teachers, only one pension fund was available, the “improved money purchase” (IMP) program.

In 1969, the legislature passed the Teachers Retirement Improvement Act of 1969, which made several other pension funds available to TRA members. See 1969 Minn. Laws ch. 485, §§ 1-41. TRA members were offered the opportunity to select from five programs, each of which required increased contributions from the employing school districts and TRA members. Those programs included (1) IMP, (2) a formula and three variable annuity; (3) a combined IMP and variable annuity; (4) a combined formula and variable annuity; and (5) a total variable annuity.

TRA members were required to return a signed election form before July 1, 1972, indicating their choice of program under which their benefits at retirement would be calculated. The Act specifically provided that a member’s acceptance of one of the programs, once made, “cannot be revoked or changed.” 1969 Minn. Laws ch. 485, § 12, subd. 3. If a member did not return an election form, he or she automatically remained in the existing IMP program. Each of the appellants here completed and timely returned an election form sometime prior to July 1, 1972.

Subsequent statutory amendments to the Act altered and eventually eliminated the variable annuity programs, as follows.

In 1973, statutory amendments changed the formula program from a career average salary computation to a computation based on the average of a teacher’s highest five consecutive salaries. 1973 Minn. Laws ch. 728, § 10, subd. 7. These 1973 amendments included a savings clause for teachers who had chosen to remain in the IMP program, to allow them to choose, upon retirement, benefits under the IMP or the formula program, whichever are larger. 1973 Minn. Laws ch. 728, § 27.

In 1974, statutory amendments transferred teachers in the three variable annuity programs into a single program that was half variable annuity and half formula. The amendments further provided that all other teachers rendering service after June 30, 1972, were covered by the formula program. 1974 Minn. Laws ch. 289, § 15.

In 1978, amendments provided that teachers in the variable annuity program would have their future contributions invested in the formula program, instead of the variable annuity program, unless they elected, by June 30, 1978, to continue in the variable annuity program. 1978 Minn. Laws ch. 781, § 7.

Finally, in 1989, amendments transferred past contributions and earnings of teachers in the variable annuity program to the formula program and closed the variable annuity fund. 1989 Minn. Laws ch. 319, art. 9, §§ 1-6. These amendments, which eliminated the variable annuity program and its funding, were effective June 30,1989. Id.

Appellants brought this action against the state and the TRA board on July 10, 2000. Their complaint alleges that they held certain irrevocable contract rights, as created by the 1969 Act, and that respondents’ subsequent legislative amendments to that Act amounted to impairment of contract, denial of equal protection, common law breach of contract, promissory estoppel, and unjust enrichment. In particular, appellants challenge respondents’ conversion of their variable annuity program, which was a primarily stock market-based “defined contribution” pension program, to the formula program, which is an entirely “defined benefit” pension program based on a teacher’s salary and years of service. Appellants further challenge the addition of penalties for early retirement, which were not part of their original irrevocable contracts. Appellants finally allege that the 1973 amendments violated equal protection by creating disparate treatment between those who made no choice during the election period and those who made an election, by giving those who made no election a choice between two pension programs at retirement: the IMP program or the formula program.

ISSUES

1. Did the district court err in determining that appellants’ breach of contract claims are barred because not brought within six years after those claims accrued?

2. Did the district court err in determining that appellants’ equal protection claims are barred under the six-year statute .of limitations?

ANALYSIS

On review of this judgment dismissing appellants’ claims under Minn. R. Civ. P. 12.02(e), we take the facts alleged in appellants’ amended complaint as true. Pederson v. American Lutheran Church, 404 N.W.2d 887, 889 (Minn.App.1987), review denied (Minn. June 30, 1987). Because dismissals under rule 12.02(e) are generally disfavored, a reviewing court will not uphold such a dismissal if “it is possible on any evidence which might be produced, consistent with the pleader’s theory, to grant the relief demanded.” Martens v. Minnesota Mining & Mfg. Co., 616 N.W.2d 732, 739-40 (Minn.2000) (quotation omitted). A motion to dismiss may be proper, however, when it is clear and unequivocal from the face of the complaint that the statute of limitations has run on all the claims asserted. Pederson, 404 N.W.2d at 889.

Issues involving the construction and application of statutes of limitations are questions of law, which appellate courts must review de novo. Benigni v. County of St. Louis, 585 N.W.2d 51, 54 (Minn.1998). “Courts have no authority to extend or modify statutory limitations periods.” Johnson v. Winthrop Laboratories Div. of Sterling Drug, Inc., 291 Minn. 145, 151, 190 N.W.2d 77, 81 (1971) (citation omitted).

I.

Appellants’ claims alleging breach of contract, promissory estoppel, unjust enrichment, and impairment of contract all rest on the same facts, and all are governed by a six-year statute of limitations. Minn.Stat. § 541.05, subd. 1(1), (2), (5) (2000) (actions on express or implied contracts, on liabilities created by statute, or for any other injury to rights of another, not arising on contract and not enumerated elsewhere, must be commenced within six years). The question we must answer here is “when did the six years begin to run?”

The statute of limitations begins to run when “the cause of action accrues.” Minn.Stat. § 541.01 (2000).

A cause of action accrues when the holder of the right to bring the action can apply to the court for relief, and is enabled to commence proceedings to enforce his rights, and from this time the statute of limitations is running.

Everett v. O’Leary, 90 Minn. 154, 157, 95 N.W. 901, 902-03 (1903) (citations omitted).

“A cause of action for breach of contract [generally] accrues at the time of the alleged breach.” Pederson, 404 N.W.2d at 889 (citation omitted). This is true even when actual damages resulting from the breach do not occur until some time afterwards or when the aggrieved party was ignorant of the facts constituting the breach. Bachertz v. Hayes-Lucas Lumber Co., 201 Minn. 171, 176, 275 N.W. 694, 697 (1937); Weston v. Jones, 160 Minn. 32, 36, 199 N.W. 431, 433 (1924).

Appellants argue, first, that their contract claims did not accrue until they retired and applied for pension benefits, citing Butler v. Minneapolis Police Relief Ass’n, 283 Minn. 70, 166 N.W.2d 705 (1969). We disagree. Butler involved a claim to receive pension benefits under statutes existing at the time the plaintiff became eligible for a pension and applied for benefits. Id. at 71-74, 166 N.W.2d at 706-08. Here, appellants do not seek to establish their rights to pension benefits under existing statutes; rather, they challenge changes made by the legislature to their allegedly “irrevocable” contract rights, which they claim were given them by the legislature in the 1969 Act.

In Minnesota, challenges to legislative changes to public pension plans have been characterized as claims alleging unconstitutional impairment of contract. See, e.g., Duluth Firemen’s Relief Ass’n v. City of Duluth, 361 N.W.2d 381, 386 (Minn.1985); Christensen v. Minneapolis Mun. Employees Ret. Bd., 331 N.W.2d 740, 749-52 (Minn.1983); Sylvestre v. State, 298 Minn. 142, 154-55, 214 N.W.2d 658, 666 (1973). In Christensen, 331 N.W.2d at 746-47, a retired public employee sued after his pension was discontinued pursuant to subsequent legislative acts. The supreme court expressly abandoned the “gratuity” approach that had been used in prior cases and adopted a promissory estoppel approach in its analysis of the rights of the employee in that particular case. Id. The court noted that even if a promise may be deemed enforceable against a public employer, that promise is still subject to modification under the state’s policing power. Id. at 749. The court further noted, however, that the state’s policing power is itself constrained by the constitutional prohibition against contract impairment, which requires that any impairments be reasonable and necessary to meet a broad and pressing social or economic need. Id. at 749-50.

To prove a claim alleging unconstitutional impairment of contract, a party must establish the existence of an underlying contract. Thus, in Christensen, 331 N.W.2d at 746-47, a promissory estoppel approach was used; in Sylvestre, 298 Minn. at 156, 214 N.W.2d at 667, the underlying contract between district court judges and the state was analyzed as a unilateral contract; and in Duluth Firemen’s Relief Ass’n, 361 N.W.2d at 386, the retirees failed to establish any type of a contractual right in maintaining a specific benefit level. The statute of limitations was not at issue in any of these cases, however, because suit was brought in each case soon after the enactment of the challenged legislative changes.

When the issue before us is analyzed as one claiming unconstitutional impairment of appellant’s allegedly irrevocable contract rights, we note initially that appellants do not challenge the calculation or payment of their pension benefits under the law as it exists at the time of their retirements. Rather, the gravamen of their complaint involves a challenge to the constitutionality of actions taken by the legislature between 1973 and 1989. We conclude, therefore, that any irrevocable contract rights that appellants might have had would have been breached no later than enactment of the last of the statutory amendments and that a cause of action accrued at the time of that breach. See Pederson, 404 N.W.2d at 889. Thus, appellants’ claims accrued on June 30, 1989.

Appellants argue further, however, and urge that the legislative amendments amounted to an anticipatory repudiation on the part of respondents, thereby providing appellants with the option of suing immediately upon breach or waiting until respondents’ performance was due, and that the statute of limitations did not begin to run until they made their election. As support for their argument, they cite Levin v. C.O.M.B. Co., 441 N.W.2d 801 (Minn.1989). In Levin, the supreme court reversed the district courts’ decisions accelerating accrual of all of an employee’s claims to the date of the employer’s repudiation of a commission agreement, noting that it

has long been established * * * that the renunciation and repudiation of a contract by one of the parties does not set the statute of limitation in motion against the other party although it gives the latter an election to sue immediately.

Id. at 803-04 (citation omitted). The complaint filed by the employee in Levin, however, was similar to an installment contract and alleged a series of breaches arising from repeated failures to pay commissions, each of which occurred only at the close of a contract year. Id. at 803. The supreme court characterized the complaint as asserting separate causes of action with different accrual dates. Appellants’ reliance on Levin is, we believe, misplaced.

As already discussed, appellants’ complaint challenges a series of actions by the legislature, between 1973 and 1989, which they allege unconstitutionally impaired their irrevocable contract rights created by 1969 legislation. Again, as of 1989, this irrevocable contract was modified when the variable annuity program was eliminated and appellants and their contributions were transferred into the formula program. Respondents’ allegedly unconstitutional act occurred when the variable annuity programs that had been chosen by appellants were eliminated, and when funding for these programs was eliminated. We cannot strain to categorize these legislative amendments as an “anticipatory repudiation” of the contract by respondents. The issue is, instead, whether the legislative amendments created an unconstitutional impairment of allegedly irrevocable contract rights. That issue could have, and should have, been raised during the six years following the last amendment.

Respondents note that, as a state agency created by the legislature, the TRA and its board may act only according to its statutory authorization and in compliance with its statutory fiduciary duties. See Stang v. Minnesota Teachers Ret. Ass’n Bd. of Trs., 566 N.W.2d 345, 348 (Minn.App.1997). Thus, as of June 30,1989, it became legally certain that the TRA and its board would be required to follow legislative mandates and eliminate the variable annuity program. See Johnson v. Kansas Pub. Employees Ret. Sys., 262 Kan. 185, 935 P.2d 1049, 1053 (1997) (claim under 42 U.S.C. § 1983, by public employees alleging unconstitutional interference with contract, accrued in 1974, when legislation was enacted abolishing city’s pension plan and consolidating it with county’s plan and when it became legally impossible for employees to continue under city’s plan); see also Smith v. City of Enid, 149 F.3d 1151, 1154 (10th Cir.1998) (impairment of contract claim under 42 U.S.C. § 1983 accrued when public employee received notice of statutory amendment that would require him to terminate his employment after participating in deferred option plan for five years, not when city actually terminated his employment).

Appellants’ claims, which challenge whether respondents could constitutionally modify an allegedly irrevocable contract right to continue in the variable annuity fund, accrued at the latest as of June 30, 1989, the date on which that particular fund was eliminated and appellants’ contributions were transferred into another fund. As of that date, appellants could have brought an action challenging respondents’ actions. Thus, the statute of limitations ran six years after that date, or on June 30,1995.

II.

Appellants’ equal protection claim is based on the 1973 amendments, which included a savings clause allowing TRA members who had chosen the IMP or who had not made an election and were deemed to continue in the IMP program, a choice between receiving benefits upon retirement based on the IMP or on the formula program. Appellants allege that this saving clause created disparate treatment between these TRA members and appellants.

This claim is governed by the six-year residual statute of limitations, Minn. Stat. § 541.05, subd. 1(5) (2000). A cause of action accrues under this statute of limitations when a plaintiff suffers “some” damage or when the claim is sufficiently ripe to overcome a motion to dismiss. Hermann v. McMenomy & Severson, 590 N.W.2d 641, 643 (Minn.1999). The district court concluded that appellants’ equal protection claim was sufficiently ripe to withstand a motion to dismiss no later than 1989, when the state eliminated the variable annuity program, but left untouched the 1973 savings clause, which preserved the IMP as an optional method of calculating retirement benefits for those who had chosen it during the 1969-72 election period.

Appellants argue that respondents’ equal protection violation is a present, continuing one, so as to extend the statute of limitations under the continuing violation doctrine. In Sigurdson v. Isanti County, 448 N.W.2d 62, 67 (Minn.1989), the supreme court recognized that a discriminatory act always has some continuing consequences, but that in determining whether the continuing violation doctrine applies, the “proper focus is upon the time of the discriminatory acts, not upon the time at which the consequences of the acts became most painful.” (Emphasis and quotation omitted.)

In this case, the alleged equal protection violation occurred between 1973 and 1989, when certain TRA members were given the option, at retirement, between two different funds, while appellants were limited to a single fund. Although the consequences of these acts are “most painful” now, when it is apparent that appellant’s plan has not done as well as the other plan, the creation of two classes of TRA members occurred between 1973 and 1989. We conclude that the alleged equal protection violation is thus not a continuing one so as to extend the statute of limitations.

DECISION

The district court’s determination that appellants’ claims are barred by the six-year statute of limitations and its dismissal of appellants’ complaint are affirmed.

Affirmed.

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


author: HANSON, Judge

text:
    In the Matter of Lashawnda BROWN.
    No. C2-01-46.
    Court of Appeals of Minnesota.
    June 5, 2001.

      Linda L. Bogut, Minneapolis, MN, (for appellant).
    Amy Klobuchar, Hennepin County Attorney; John L. Kirwin, Assistant County Attorney, Minneapolis, MN, (for respondent).
    Considered and decided by WILLIS, Presiding Judge, HANSON, and FOLEY, Judges.

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

   OPINION

HANSON, Judge

Appellant contests a district court order continuing her commitment as mentally ill. Appellant argues that the expiration of her initial commitment precluded consideration of the respondent’s late-filed report recommending continued commitment, and that the district court could not avoid that expiration by an ex parte order extending the commitment until a hearing could be held. We reverse and remand.

FACTS

In April 2000, Hennepin County filed a petition to commit appellant Lashawnda Brown to Anoka Metro Regional Treatment Center (“AMRTC”) with a diagnosis of schizophrenia. On April 19, 2000, the district court issued an order to commit Brown for six months, the maximum duration allowed under Minn.Stat. § 253B.09, subd. 5 (2000). That order was stayed upon the condition that Brown voluntarily remain at North Memorial Medical Center and comply with her treatment regime.

On May 2, 2000, the district court revoked the stay of the commitment and Brown entered AMRTC on May 15, 2000. On October 30, 2000, more than six months from the original order of commitment but less than six months from the order revoking the stay, AMRTC filed a treatment report with the district court pursuant to Minn.Stat. § 253B.12, subd. 1 (2000), recommending the continuation of Brown’s initial commitment. The district court then issued an ex parte order extending Brown’s commitment until a hearing could be held on the report.

On November 8, 2000, the district court held the review hearing and found that Brown continued to be diagnosed with schizoaffective disorder. The district court ordered that Brown’s commitment at AMRTC be continued for an additional 12 month period. This appeal followed.

ISSUES

1. When did the six-month term of the initial commitment commence to run?

2. Does the district court have jurisdiction to extend the initial commitment by an ex parte order issued after the initial commitment has expired?

3. Did the district court err in concluding that the evidence supported the continuation of Brown’s commitment?

ANALYSIS

The Minnesota Commitment and Treatment Act allows the court to “commit [a] patient to the least restrictive treatment program or alternative programs which can meet the patient’s treatment needs.” Minn.Stat. § 253B.09, subd. 1 (2000). In reviewing an order of commitment for mental illness, this court is limited to an examination of whether the district court complied with the requirements of the act. In re Schaefer, 498 N.W.2d 298, 300 (Minn.App.1993). The commitment must be justified by findings of fact and conclusions of law that “specifically state the conduct of the proposed patient which is the basis for the final determination.” Minn.Stat. § 253B.12, subd. 7 (2000); In re Frederickson, 388 N.W.2d 717, 723 (Minn.1986). Such findings “shall not be set aside unless cleai'ly erroneous.” Minn.R.Civ.P. 52.01; Schaefer, 498 N.W.2d at 300.

Duration of the Initial Commitment

The initial commitment of a mentally ill patient cannot exceed six months. Minn. Stat. § 253B.09, subd. 5. The act requires the head of the treatment facility to which a patient is committed to file a detailed report on the patient with the committing court prior to the termination of the initial commitment. Minn.Stat. § 253B.12, subd. 1(c). The act further provides that if “no written report is filed within the required time * * * the proceedings must be terminated by the committing court and the patient discharged from the treatment facility.” Minn.Stat. § 253B. 12, subd. 1(e).

Brown contends that AMRTC failed to timely submit its report to the district court. She argues that the court therefore erred by accepting the report, failing to terminate proceedings, failing to discharge her and granting an ex parte order to continue her commitment to allow for a hearing. The central issue is when the six-month period of initial commitment commenced.

Brown maintains that the commencement of the six-month period of her initial commitment was April 19, 2000— the date when the stayed order was issued. Using Brown’s suggested date, the initial commitment period would have expired 11 days prior to the October 30, 2000, issuance of the treatment report, and. any further proceedings thereafter would be unauthorized. See Id., subds. 1(c), 1(e) (requiring a report “prior to the termination of the initial commitment order” and that “[i]f no written report is filed within the required time * * * the proceedings must be terminated by the committing court and the patient discharged from the treatment facility”).

Hennepin County argues that the six-month period of initial commitment commenced on May 2, 2000, when the stay of the commitment was revoked. Using this suggested date, the initial commitment would have expired on November 2, 2000, after the filing of the report but before the hearing on the request that the commitment be continued.

In a 1989 decision, this court rejected an argument similar to Brown’s, that “the commitment period runs from the date the order for commitment issues, regardless of whether the person actually is admitted to the treatment facility.” In re Spence, 434 N.W.2d 477, 478 (Minn.App.1989) (holding that the six-month limitation period for involuntary commitment begins to run from date person arrives at the treatment facility and is physically placed under control of its director, not on the date when the commitment order is issued). However, when this court decided Spence, the statute read as follows: “For persons committed as mentally ill, mentally retarded, or chemically dependent the initial commitment shall not exceed six months.” In 1997, an amendment inserted the following sentence before that language: “The initial commitment begins on the date that the court issues its order or warrant under section 253B.10, subdivision 1.” 1997 Minn. Laws, ch. 217, art. 1, §§ 55-59. Therefore, Spence is no longer relevant to the calculation of the statutory period for an initial commitment under Minn.Stat. § 253B.09, subd. 5.

The amended language clarifies that the six-month period commences on the date the district court issues an order under Minn.Stat. § 253B.10, subd. 1, which in turn refers to the issuance of a “warrant or order committing the patient to the custody of the head of the treatment facility” and “stat[ing] that the patient meets the statutory criteria for civil commitment.” In this case, that would be the April 19 order, which detailed Brown’s mental illness, concluded that she “is a mentally ill person as defined in Minn.Stat. § 253B.02, subd. 13, and is in need of commitment” and committed Brown “to the head of Bristol Place and to the head of the Anoka Metro Regional Treatment Center.”

Ex Parte Order

Because Brown’s initial commitment expired before AMRTC filed the necessary treatment report, the district court should have discharged Brown pursuant to Minn.Stat. § 253B.12, subds. 1(e), 2. Brown argues that the district court improperly issued an ex parte order to extend her commitment after it had expired. We agree, based both upon the reasoning discussed above (the district court was powerless to extend the initial commitment after it had expired) and discussed in this court’s recent decision in In re Robledo, 611 N.W.2d 67 (Minn.App.2000).

The facts of Robledo are similar to those of the present case. Manuel Robledo had one day remaining on his second commitment at AMRTC when it filed a report and petition for continued commitment before the committing court. Id. at 68. The district court issued an ex parte order temporarily extending Robledo’s commitment to facilitate the hearing on AMRTC’s petition for recommitment. Id. This court held that the civil commitment act “prohibits a further extension of commitment beyond the expiration of the continued commitment unless specific procedures are followed.” Id. at 69. Because those specific procedures required that the hearing and determination be made before the present commitment expired, this court reversed the order of recommitment. Id.

Respondent would distinguish Robledo as involving the continuation of a second period of commitment, which is governed by a different section of the act. Minn. Stat. § 253B.13, subd. 1. Respondent contends that the provisions for extending an initial commitment, as relevant here, are different from those applicable in Robledo and authorize an ex parte extension:

For good cause shown, the court may continue the hearing for up to an additional 14 days and extend any orders until the review hearing is held.

(Emphasis added.) Minn.Stat. § 253B.12, subd. 2a. In its motion for an ex parte order to continue Brown’s commitment beyond six months, respondent stated that “scheduling considerations,” and the recommendation in Brown’s treatment report for continued commitment, constituted good cause.

The difficulty with respondent’s argument is that a finding of good cause cannot be used to resurrect a commitment and initiate a hearing once, as in this case, the commitment had already expired. See Minn.Stat. § 253B.12, subd. 2(a) (recognizing that there could be no hearing if the proceedings had been properly terminated for failure to timely file the report, under subdivision 1(e)). Further, scheduling considerations were caused by respondent’s own delays and did not constitute “good cause” for a continuance.

Sufficiency of Evidence

Because we find that Brown should have been discharged before the hearing, we decline to decide whether the evidence at the hearing sustained the district court’s continuation of Brown’s commitment.

DECISION

Appellant’s initial commitment expired before the treatment facility filed its treatment report. Therefore, the district court was required by law to terminate the proceeding and discharge appellant. In such case, the district court had no authority to extend the commitment, conduct a hearing, or order a continued commitment.

Reversed and remanded.

      . We emphasize the following language from Robledo:
      Our conclusion that Robledo's continued recommitment was improper does not preclude petitioners from seeking Robledo’s commitment if they believe that it is necessary and justified by the facts. The petitioners may choose to file a petition for initial commitment and to proceed under section 253B.07, and to seek an emergency 72-hour hold. We express no opinion on the likely outcome of an initial-petition procedure. But we do note that this court's decision does not become final immediately and will not be reduced to judgment for at least 30 days after filing or until any petition for further review is denied by the supreme court. Minn.R.Civ.App.P. 136.02; see In re Stilinovich, 479 N.W.2d 731, 736 (Minn.App.1992).

        Robledo, 611 N.W.2d at 70-71.


author: NEUMANN, Justice.

text:
    2001 ND 95
    Carol Kay MOEN and LaRae A. Thomas, Co-Trustees of the Jay V. Thomas Family Trust, Plaintiffs and Appellees v. Laurie THOMAS, individually and as surviving spouse, heir and personal representative of Jerry J. Thomas, deceased, and his estate, and Kisten Thomas and Tessa Thomas, their minor children, by Laurie Thomas, their guardian, Defendants, Third-Party Plaintiffs and Appellants v. Fred C. Rathert and Neff Cresap Rathert Eiken & Irigoin, P.C., Third-Party Defendants.
    No. 20000169.
    Supreme Court of North Dakota.
    May 22, 2001.

      John H. MacMaster, MacMaster Law Firm, Ltd., Williston, for plaintiffs and ap-pellees.
    Greg W. Hennessy, Hennessy Law Office, P.C., Williston, for defendants, third-party plaintiffs and appellants.
   NEUMANN, Justice.

[¶ 1] Laurie Thomas, Kisten Thomas, and Tessa Thomas have appealed from a judgment which quieted title in certain property in the Jay V. Thomas Family Trust, ordered the trust was entitled to exclusive possession of the property, and awarded damages for the use and occupation of the property. We conclude the trial court did not err in admitting testimony of an oral year-to-year lease and in finding the parties had a year-to-year lease which could be terminated at the end of a yearly term by the trustees. We therefore affirm the judgment.

I

[¶ 2] Laurie was married to Jerry Thomas and they had two daughters, Kis-ten and Tessa. Jerry’s father, Jay, owned a ranch in Williams County. During the marriage, Jerry and Laurie lived on the Thomas family ranch and worked the ranch with Jay.

[¶ 3] Jay died on October 19, 1995. Under the terms of Jay’s will, Jerry received the surface of the ranch headquarters and some additional ranch land. Under Article VII of the will, Jerry also received an option to purchase or lease other ranch land:

I give, devise and bequeath to my son, Jerry Jay Thomas, first option to buy at written estate appraised value all machinery and livestock owned by me at the time of my death, together with the first option on the surface of all rural real estate not otherwise disposed of in this will which is owned by me at such appraised value[.] [A]ll oil, gas and other minerals that I might own under the property sold shall be excepted and reserved to be distributed as hereinafter provided. This option shall include the right to purchase on a contract for deed over a seven year period and the right to use as a down payment on such contract the share received by Jerry Jay Thomas from the non-real estate property distributed to him under this will. I have checked the land values in the area including prices paid for land in recent years. The cropland which will be sold to my son Jerry on a contract for deed is highly erosive and susceptible to blowing. The pasture land is rough and sandy. It is my opinion that the sum of $70.00 per acre average for the cultivated and pasture land is a fair sum. I direct that this be the purchase price in the contract for deed. The contract shall bear interest at 6% per annum on unpaid balances. In the event that this option is not exercised within 180 days after my death, the property shall be sold at a public auction and proceeds distributed equally to my six children and my wife. All cattle and unpaid machinery balances and any balance due on the contract for deed executed pursuant to this article and any cattle owned at the time of my death not otherwise provided for and all unpaid balance on a contract for the sale of machinery to my son Jerry previously executed shall be distributed equally share and share alike to my wife and children, including my son, Jerry. It is my further desire that in the event that my son Jerry not exercise the option to purchase, that my personal representative lease the land reference [sic] in this article to him at a rental of $3.00 per acre. The lease to be for seven years and to contain an option to purchase the real estate described in this article or [sic] a contract over a fifteen (15) year period; the option shall be exercisable during such sever [sic] year lease term, sale price to be market value reduced by actual rental paid, interest to be Bank of North Dakota base rate minus 1 percent.

[¶ 4] The mil was admitted to probate in November 1995, and Jay’s daughter, Donna Sneva, was appointed personal representative. Jerry exercised his option under the will to purchase the machinery and livestock from the estate, but advised the other heirs at a December 1995 family meeting that he was declining the first option to purchase the land. Jerry orally stated, however, that he intended to exercise his right to lease the property. In late 1995 Jerry tendered, and the personal representative accepted, rent for 1996 at $3.00 per acre.

[¶ 5] The family ultimately decided to place the property in trust to administer the surface and mineral interests of the estate. Attorney Fred Rathert, who had drafted Jay’s will and represented the personal representative in probating the estate, drafted the trust agreement which was signed by the family members, including Jerry, on December 3, 1996. Article Three of the trust agreement provided:

The Settlors have transferred to this Trust real property consisting of farm and ranch lands located in Truax Township, Williams County, North Dakota. This property is now leased to Jerry J. Thomas, one of the Settlors. Jerry J. Thomas shall have the right and option to lease the property for agricultural purposes as provided in the Last Will and Testament of Jay V. Thomas, subject however to the rights of the other Settlors to enter and use the property for hiking, hunting or other limited recreational purposes. There shall be no access except to Set-tlors and their immediate families for camping, snowmobiling, motorcycling or other recreational vehicle use at any time. In negotiating and drafting the lease with Jerry J. Thomas, the Trustee shall consult with each Settlor and shall incorporate into such lease such terms and conditions as may be necessary to protect the rights of all parties. The rights to enter and use the property described in this paragraph shall be personal to the Settlors and their immediate famihes and limited number of guests.

Jay’s daughters, LaRae Thomas and Carol Moen, were named co-trustees of the trust.

[¶ 6] Although it was originally contemplated Rathert would draft a written lease between Jerry and the trust, one of the co-trustees advised the office staff at Rathert’s firm that the family would prepare their own lease with Jerry. LaRae Thomas subsequently confirmed this by delivering to Rathert’s office a handwritten note stating: “It is Carol’s and my intention to draw up our own lease agreement following terms stated w/in the Will.” In compliance with these instructions Rathert did not draft a written lease, and no written agreement between Jerry and the trust was ever executed. LaRae Thomas, Carol Moen, and Donna Sneva testified that Jerry told the family he did not want to be bound to a seven-year lease, but preferred to continue renting the property on an oral year-to-year lease. They testified it was at Jerry’s request that no written seven-year lease was executed, and the family agreed to an oral year-to-year lease. In late 1996 Jerry tendered rent for 1997 to the trustees.

[¶ 7] Jerry died in a ranching accident on May 12, 1997. Laurie continued in possession of the property, and discussed with the trustees her desire to rent some of the property. In the fall of 1997 the trustees informed Laurie they would not lease the land to her in 1998. In December 1997 Laurie tendered a check for rent for 1998 to the trustees. They returned the check, notifying her in an accompanying letter that she did not have a valid lease for 1998.

[¶ 8] When Laurie remained in possession, the trustees brought this action against Laurie, Kisten, and Tessa (hereafter collectively “Laurie”) to quiet title to the property, to recover possession, and seeking damages for the value of use and possession of the property after December 31, 1997. Laurie answered and counterclaimed, alleging the seven-year lease and option to purchase under the will was in effect and survived Jerry’s death. Laurie also alleged fraud and breach of fiduciary duty by the trustees.

[¶ 9] Following a bench trial, the trial court found Jerry had a year-to-year lease which terminated at the end of 1997. The court quieted title in favor of the trust, ordered possession of the land be turned over to the trustees, and awarded damages of $19,000 for use and occupation of the property. The court also dismissed the counterclaim. Laurie appealed from the judgment.

II

[¶ 10] Laurie argues the trial court erred in allowing Donna Sneva, LaR-ae Thomas, and Carol Moen to testify that Jerry stated to them and other family members he did not want to be bound to a seven-year lease and that, at his request, they agreed to an oral year-to-year lease. Laurie asserts this testimony was hearsay and should not have been admitted.

[¶ 11] Rule 801(c), N.D.R.Ev, defines hearsay as “a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” If an out-of-court statement is not offered to prove its truth, it is not hearsay. Ehrlich v. Baches, 477 N.W.2d 211, 214 (N.D.1991); State v. Welch, 426 N.W.2d 550, 555 (N.D.1988). A statement offered to prove it was made is not hearsay. Ehrlich, at 214; Welch, at 555.

[¶ 12] We have held that statements offered to prove an oral contract existed are not hearsay, because they are not offered to prove the truth of the matter asserted. See Towne v. Dinius, 1997 ND 125, ¶ 13, 565 N.W.2d 762; In re Estate of Starcher, 447 N.W.2d 293, 297 (N.D.1989); In re Estate of Raketti, 340 N.W.2d 894, 899-901 (N.D.1983). Statements about the terms of, or assent to, an oral contract fall within the category of non-hearsay designated as “verbal acts” or “verbal conduct.” Towne, at ¶ 13; Raket-ti, at 899. The utterance of the words is, in itself, an operative fact which gives rise to legal consequences. Towne, at ¶ 13; Raketti, at 899. Because it is the outward manifestations of assent which govern, not the parties’ secret intentions, it is the mere fact of utterance which is relevant in determining whether there was an oral agreement. Raketti, at 900. It makes no difference whether Jerry was being truthful when he said he did not want to be bound to a seven-year lease and agreed to an oral year-to-year lease, because it is his outward manifestations which determine whether a contract existed. See Raketti, at 900.

[¶ 13] The underlying rationale for the rule is explained in Raketti, 340 N.W.2d at 900 (quoting Creaghe v. Iowa Home Mut. Cas. Co., 323 F.2d 981, 984 (10th Cir.1963)):

“The hearsay rule does not exclude relevant testimony as to what the contracting parties said with respect to the making or the terms of an oral agreement. The presence or absence of such words and statements of themselves are part of the issues in the case. This use of such testimony does not require a reliance by the jury or the judge upon the competency of the person who originally made the statements for the truth of their content. Neither the truth of the statements nor their accuracy are then involved. In the case at bar we are not concerned with whether the insured was truthful or not when he told the agent he wanted the policy cancelled and that he did not need it any more. It is enough for the issues here presented to determine only whether or not he made such statements to the agent. The fact that these statements were made was testified to by the agent, and his competency and truthfulness as to this testimony was subject to testing through cross-examination by counsel for appellant, and this was done at considerable length.”

[¶ 14] We conclude the trial court did not err in admitting testimony about Jerry’s statements because the testimony did not constitute hearsay under N.D.R.Ev. 801(c).

Ill

[¶ 15] Laurie argues Jerry and the trust had entered into a valid seven-year lease with an option to purchase as contemplated under the terms of Jay’s will, and the lease and option survived Jerry’s death. Laurie concedes there was no written lease agreement signed by the parties, but argues there was a valid oral agreement with partial performance.

[¶ 16] A long-term lease with an option to purchase would ordinarily require a signed written agreement. N.D.C.C. §§ 9-06-04(3), 47-10-01. However, partial performance which is consistent only with the existence of the alleged oral contract may be sufficient to satisfy the statute of frauds. See N.D.C.C. § 47-10-01; Felco, Inc. v. Doug’s North Hill Bottle Shop, Inc., 1998 ND 111, ¶ 16, 579 N.W.2d 576; Johnson Farms v. McEnroe, 1997 ND 179, ¶ 19, 568 N.W.2d 920. Laurie contends Jerry had orally exercised his option under Jay’s will for a seven-year lease with an option to purchase, and the payment of rent for 1996 and 1997 constituted partial performance which satisfied the statute of frauds. 4i

[¶ 17] Laurie’s argument ignores the other evidence in the record and the trial court's findings of fact and conclusions of law. Donna Sneva, LaRae Thomas, and Carol Moen testified Jerry told the family members he did not want to be bound to a seven-year lease and requested an oral year-to-year lease instead. They testified Jerry expressed concerns about being able to make the payments if cattle prices went down, and he therefore “did not wish to be beholding [sic] to all of [the other family members] and he did not want a written lease.” The trial court found Jerry had expressly rejected his right to a written seven-year lease under Jay’s will at a family meeting in late 1996:

At this meeting, they discussed the need for a written lease of the land Jerry was renting. Jerry indicated he did not want to be bound by a written lease in case he could not make the payments.

The trial court ultimately determined “Jerry and the trust entered into a one-year lease, commencing January 1, 1997 and terminated December 31, 1997, the end of the one year term.”

[¶ 18] Even if Jerry originally expressed a desire to exercise his option for a seven-year lease under Jay’s will, the parties could subsequently agree to a different lease arrangement. Parties to a contract, including a lease, may by mutual consent terminate, alter, or amend their agreement. See N.D.C.C. §§ 9-09-06, 9-09-07, 47-16-14(2); Mitchell v. Barnes, 354 N.W.2d 680, 682 (N.D.1984); Sonden v. Hanson, 201 N.W.2d 404, 409 (N.D. 1972); First Nat’l Bank v. O’Callaghan, 143 N.W.2d 104, 106 (N.D.1966); Reitman v. Miller, 78 N.D. 1003, 1008-09, 54 N.W.2d 477, 480 (1952); Enderlien v. Kulaas, 25 N.D. 385, 391, 141 N.W. 511, 513-14 (1913) (On Petition for Rehearing). Section 47-16-14(2), N.D.C.C., provides that a lease of real property may be terminated by “the mutual consent of the parties.” Therefore, even if Jerry at one time had a valid seven-year lease, that lease would have been terminated when Jerry expressed that he did not want to be bound by a long-term lease and the parties agreed to an oral year-to-year lease.

[¶ 19] A trial court’s findings of fact will not be reversed on appeal unless they are clearly erroneous. Tishmack v. Tishmack, 2000 ND 103, ¶ 7, 611 N.W.2d 204. A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, after reviewing all the evidence, we are left with a definite and firm conviction a mistake has been made. Id. On appeal, the trial court’s findings of fact are presumed to be correct, and the complaining party bears the burden of demonstrating a finding is clearly erroneous. State ex rel. Heitkamp v. Family Life Services, Inc., 2000 ND 166, ¶ 19, 616 N.W.2d 826.

[¶20] In a bench trial, the trial court is “the determiner of credibility issues and we do not second-guess the trial court on its credibility determinations.” Id. at ¶ 26. We do not reweigh evidence or reassess credibility, nor do we reexamine findings of fact made upon conflicting testimony. Tishmack, 2000 ND 103, ¶ 7, 611 N.W.2d 204; Wachter v. Gratech Co., 2000 ND 62, ¶ 17, 608 N.W.2d 279. We give due regard to the trial court’s opportunity to assess the credibility of the witnesses, and the court’s choice between two permissible views of the evidence is not clearly erroneous. Tishmack, at ¶ 7; Wachter, at ¶ 17.

[¶ 21] The trial court’s findings of fact are amply supported by the record and are not clearly erroneous. Accordingly, the trial court did not err in concluding Jerry and the trust had a one-year lease which expired on December 31,1997.

IV

[¶ 22] We have reviewed the remaining issues raised by Laurie on appeal and find them to be without merit. The judgment is affirmed.

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

      . Donna Sneva testified the other option under Article VII of the will, sale at public auction, was never considered.

      . Laurie also filed a third-party complaint against Rathert and his law firm for legal malpractice. The trial court dismissed the third-party claim by summary judgment, and Laurie filed a separate appeal from that judgment.

      . Laurie has not argued any independent basis for an option to purchase separate from the seven-year lease and option under Jay’s will. Rather, she has forcefully argued any option is inseparable from the seven-year lease. Nor did the trial court make findings regarding any independent basis for the option. We therefore do not address any independent basis for a separate option to purchase.


author: MARING, Justice.

text:
    2001 ND 99
    STATE of North Dakota ex rel. Carol K. OLSON, Executive Director, North Dakota Department of Human Services, Plaintiff and Appellee v. Roxanne HARRISON, Florine Harrison as parent and guardian of Madeline Harrison, Thomas E. Rutten, Howard Nelson, Claims Adjuster, Heinrich and Company, Defendants, and Milwaukee Insurance Company aka Milwaukee Safeguard Insurance Group, Defendant and Appellant.
    No. 20000282.
    Supreme Court of North Dakota.
    May 22, 2001.
    Jean R. Mullen, Assistant Attorney General, Bismarck, for plaintiff and appellee.

      Chris A. Edison, Storslee Law Firm, P.C., Bismarck, for defendant and appellant.
    Larry B. Leventhal (argued), Larry Leventhal & Associates, Minneapolis, MN, and Thomas M. Disselhorst (on brief), Bismarck, for Amicus Curiae Spirit Lake Tribe.
   MARING, Justice.

[¶ 1] Milwaukee Insurance Company, also known as Milwaukee Safeguard Insurance Group, (“Milwaukee”) appeals the July 26, 2000, district court order granting summary judgment to the State of North Dakota ex rel. Carol K. Olson, Executive Director, North Dakota Department of Human Services (“State”), and the judgment entered on August 8, 2000. We affirm.

[¶ 2] In 1999, on the Spirit Lake Reservation, Tracey Dawn Makes Good was operating a vehicle owned by Amaris L. Makes Good, when the vehicle collided with one operated by Roxanne Harrison and owned by Florine Harrison. The collision resulted in the deaths of two individuals and injuries to Roxanne Harrison, Madeline Harrison, and others occupying the Harrison vehicle. The Makes Good vehicle was insured by Milwaukee with a liability limit of $50,000. The Harrison vehicle was not insured.

[¶ 3] Howard Nelson, an insurance claims adjuster for Heinrich and Co., negotiated a settlement between the parties on behalf of Milwaukee. Thomas E. Rutten, an attorney for Milwaukee, filed a petition for approval of a settlement of claims in the Spirit Lake Tribal Court (“Tribal Court”). The petition named, among others, the North Dakota Department of Human Services (“Department”) as a defendant. The clerk of court for the Tribal Court mailed a copy of a notice of a June 17, 1999, hearing on the petition and a copy of the petition to the Department, which the Department received on June 4, 1999.

[¶ 4] The Department did not respond to the notice and petition it received from the clerk of the Tribal Court. After a hearing, the Tribal-Court issued an order approving the proposed settlement to be paid by Milwaukee. In its order, the Tribal Court found, among other things, that the settlement agreement provided for payment of $7,600.00 to Roxanne Harrison and $8,839.72 to Florine Harrison as parent and guardian of Madeline Harrison. The Tribal Court also found:

That the Plaintiffs have not achieved a full recovery because of the limited insurance coverage available to compensate them for their claims and, therefore, the Defendants, Benson County Social Services and North Dakota Department of Human Services shall not be entitled to pursue any subrogation claims against these Plaintiffs.

The Tribal Court concluded “Benson County Social Services and the North Dakota Department of Human Services shall not be entitled to any portion of the settlement approved herein.”

[¶ 5] The State sued Roxanne Harrison, Florine Harrison as parent and guardian of Madeline Harrison, Thomas E. Rutten, Howard Nelson, Heinrich and Co., and Milwaukee in district court, alleging the Department had paid for medical services received by Roxanne Harrison and Madeline Harrison at medical facilities in Devils Lake and Grand Forks, that Florine Harrison and her children, Roxanne and Madeline, had assigned to the State any claims they had against liable third parties, that the State had not been properly served in the Tribal Court proceeding, and that Roxanne Harrison, Florine Harrison on behalf of her minor child, Madeline Harrison, and Milwaukee, among others, were liable for conversion of the money owed to the State.

[¶ 6] The district court concluded “[t]he Spirit Lake Tribal Court did not have subject matter jurisdiction nor was proper service made upon the State,” and granted the State’s motion- for summary judgment in an order issued July 26, 2000. The judgment, entered on August 8, 2000, ordered Roxanne Harrison to pay the State $5,837.43, ordered Madeline Harrison and her guardian to pay the State $6,402.02, authorized the State to take up to $6,402.02 from a trust created for Madeline Harrison to pay the judgment against her, and ordered Milwaukee to pay the State $12,239.45, “with said amount reduced by any amounts collected from Roxanne Harrison and Madeline Harrison and her guardian.”

[¶ 7] On appeal, Milwaukee contends: (1) the district court erred in holding the Tribal Court did not have subject matter jurisdiction and the State was not properly served; (2) the Tribal Court’s order is entitled to recognition as a matter of comity; and (3) the district court erred in denying Milwaukee’s motion for summary judgment based on the State’s failure to exhaust the remedies available to it in Tribal Court.

I

[¶ 8] In granting the State’s motion for summary judgment, the trial court held “[t]he Spirit Lake Tribal Court did not have subject matter jurisdiction nor was proper service made upon the State.”

[¶ 9] “[Ijmmunity from suit is a fundamental aspect of the sovereignty” enjoyed by states under the United States Constitution. Alden v. Maine, 527 U.S. 706, 713, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999). Sovereign immunity, however, “bars suits only in the absence of consent.” Id. at 755, 119 S.Ct. 2240. Article I, § 9, N.D. Const., provides, in part: “Suits may be brought against the state in such manner, in such courts, and in such cases, as the legislative assembly may, by law, direct.” That provision “authorizes the Legislature to direct the manner, the courts, and the cases in which suits may be brought against the State.” Bulman v. Hulstrand Constr. Co., 521 N.W.2d 632, 637 (N.D.1994). Section 32-12-02, N.D.C.C., provides, in part:

An action respecting the title to property, or arising upon contract, may be brought in the district court against the state the same as against a private person.

Section 32-12.2-04(5), N.D.C.C., provides:

A person bringing a legal action against the state or a state employee for a claim shall deliver a copy of the summons, complaint, or other legal pleading in which the claim is first asserted in the action to the director of the office of management and budget at the time the summons, complaint, or other legal pleading is served in the action. This provision is in addition to any applicable rule of civil procedure.

[¶ 10] “Article VI, § 3, provides in part that ‘[t]he supreme court shall have authority to promulgate rules of procedure ... to be followed by all the courts of this state.’ ” State v. Hanson, 558 N.W.2d 611, 614 (N.D.1996). This Court has promulgated N.D.R.Civ.P. 4(b)(4), which provides the manner in which a court acquires personal jurisdiction over the State or a state agency, as with a private person, is through a voluntary appearance or through service of process as provided by a statute, or service of process in accordance with N.D.R.Civ.P. 4. The State did not voluntarily appear in Tribal Court, and no statutory service has been alleged. For a court to otherwise acquire personal jurisdiction over the State, N.D.R.Civ.P. 4(d)(2)(F) requires personal service of process be made:

upon the state, by delivering a copy of the summons to the governor or attorney general or an assistant attorney general and, upon an agency of the state, such as the Bank of North Dakota or the State Mill and Elevator Association, by delivering a copy of the summons to the managing head of the agency or to the attorney general or an assistant attorney general.

[¶ 11] “[Personal jurisdiction depends on proper service of process.” Helmers v. Sortino, 545 N.W.2d 796, 799 (N.D.1996). Under N.D.R.Civ.P. 4(d)(2), “merely because an individual is an employee of a defendant does not cloak that individual with authority to receive process for the defendant, and the plaintiff has the burden to establish that the authority to receive service of process exists between the defendant and the individual served.” Brakke v. Rudnick, 409 N.W.2d 326, 330 (N.D.1987). Applying § 7426, Comp. Laws 1913, which provided in part: “The summons shall be served by delivering a copy thereof ... [i]f the defendant is the state, to the governor or attorney-general,” this Court held, where “[t]he record does not disclose any service on the Attorney General or the Governor ... [t]he court had no jurisdiction of the defendant state of North Dakota.” Company A, First Regiment, Nat’l Guard Training Sch. v. State, 58 N.D. 66, 73, 224 N.W. 661, 664 (1929). This law was previously codified as § 6838, Rev.Code 1905, and § 5252, Rev.Code 1899, and was later codified as § 28-0605, N.D.R.C.1943, which was superseded by N.D.R.Civ.P. 4.

[¶ 12] In light of the foregoing constitutional, legislative and judicial history, the State has not consented to suit without proper service of process. The Legislature and this Court have determined a court may not acquire jurisdiction over the state unless the governor or the attorney general (or, under N.D.R.Civ.P. 4(d)(2)(F), an assistant attorney general or the managing head of an agency of the state) has been served with process in accordance with statute or court rules of procedure.

[¶ 13] Here, the clerk of the Tribal Court mailed a copy of a notice of a June 17, 1999, hearing on the petition and a copy of the petition to “ND Dept, of Human Services ... ATTN: Raymond A. Feist, ADmin.” Feist is an employee of the Department, who on May 20, 1999, sent a letter to Howard Nelson of Heinrich and Co., advising that the State intended to “file a claim on behalf of the Harrisons for medical bills” and that a Medicaid assignment “makes the state’s claim priority [sic] to any other claim.” There was no service of process on the governor, the attorney general, an assistant attorney general, or the managing head of any agency of the State. No official with authority to accept service of process for the State was served in accordance with N.D.R.Civ.P. 4. We conclude, therefore, the district court did not err in ruling the State was not properly served and the Tribal Court did not acquire personal jurisdiction over the State.

II

[¶ 14] Milwaukee contends the Tribal Court order is entitled to recognition as a matter of comity under N.D.R.Ct. 7.2, which provides, in part:

(b) Recognition. The judicial orders and judgments of tribal courts within the state of North Dakota, unless objected to, are recognized and have the same effect and are subject to the same procedures, defenses, and proceedings as judgments of any court of record in this state.

This rule also provides: “If recognition of a judgment is objected to by a party, the recognizing court must be satisfied ... that the ... tribal court had personal and subject matter jurisdiction.” N.D.R.Ct. 7.2.

[¶ 15] Before adopting N.D.R.Ct. 7.2, our Court recognized a tribal court judgment as a matter of comity in Fredericks v. Eide-Kirschmann Ford, Mercury, Lincoln, Inc., 462 N.W.2d 164 (N.D.1990). Relying largely on Hilton v. Guyot, 159 U.S. 113, 16 S.Ct. 139, 40 L.Ed. 95 (1895), we summarized comity between nations:

Comity is a nation’s voluntary recognition and execution of another nation’s laws where the rights of individuals are concerned. Hilton v. Guyot, 159 U.S. 113, 16 S.Ct. 139, 40 L.Ed. 95 (1895).... The court enunciated a number of factors to consider in determining the conclusiveness of a foreign judgment as a matter of comity:
“When an action is brought in a court of this country, by a citizen of a foreign country against one of our own citizens, to recover a sum of money adjudged by a court of that country to be due from the defendant to the plaintiff, and the foreign judgment appears to have been rendered by a competent court, having jurisdiction of the cause and of the parties, and upon due allegations and proofs, and opportunity to defend against them, and its proceedings are according to the course of a civilized jurisprudence, and are stated in a clear and formal record, the judgment is prima facie evidence, at least, of the truth of the matter adjudged; and it should be held conclusive upon the merits tried in the foreign court, unless some special ground is shown for impeaching the judgment, as by showing that it was affected by fraud or prejudice, or that by the principles of international law, and by the comity of our own country, it should not be given full credit and effect.”

Fredericks, 462 N.W.2d at 167, quoting Hilton, 159 U.S. at 205-206, 16 S.Ct. 139. We said: “When enforcement of a foreign judgment is sought as a matter of comity, jurisdiction of the foreign court is presumed.” Fredericks, 462 N.W.2d at 168. We held Eide Kirschmann Ford, Mercury, Lincoln, Inc., “did not overcome the presumption that the tribal court had jurisdiction of the cause and the parties,” and concluded “the district court should have enforced the tribal court judgment as a matter of comity.” Id. at 170-71.

[¶ 16] Under Fredericks, 462 N.W.2d 164, and N.D.R.Ct. 7.2, if a tribal court order or judgment is to be recognized as a matter of comity, the tribal court must have had personal and subject matter jurisdiction. See also Wilson v. Marching-ton, 127 F.3d 805, 811 (9th Cir.1997) (“the existence of both personal and subject matter jurisdiction is a necessary predicate for federal court recognition and enforcement of a tribal judgment.”). Here, the presumption the Tribal Court had personal jurisdiction over the State has been overcome. We conclude the Tribal Court did not acquire personal jurisdiction over the State, because the State was not served with process in accordance with N.D.R.Civ.P. 4 and, therefore, the Tribal Court’s order is not appropriate for recognition as a matter of comity.

III

[¶ 17] Relying on Fredericks v. Eide-Kirschmann Ford, Mercury, Lincoln, Inc., 462 N.W.2d 164 (N.D.1990); Iowa, Mut. Ins. Co. v. LaPlante, 480 U.S. 9, 107 S.Ct. 971, 94 L.Ed.2d 10 (1987); and National Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985), Milwaukee contends the trial court erred in denying it summary judgment, because of the State’s failure to exhaust the remedies available to it in Tribal Court.

[¶ 18] In Fredericks, 462 N.W.2d at 168, we held Eide should have exhausted its tribal court remedies: “If the tribal court erred in its construction and application of the tribal repossession statute, Eide’s remedy was to prosecute its appeal of the original tribal court judgment to completion and to appear in the tribal court after remand and appeal any adverse judgment that might have been entered.”low a Mut. Ins. Co. v. LaPlante, 480 U.S. 9, 107 S.Ct. 971, 94 L.Ed.2d 10 (1987), and National Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985), require generally that a party challenging a tribal court’s assertion of subject matter jurisdiction exhaust its tribal court remedies before challenging the tribal court’s jurisdiction in federal court. In Strate v. A-l Contractors, 520 U.S. 438, 453, 117 S.Ct. 1404, 137 L.Ed.2d 661 (1997), the United States Supreme Court observed that those decisions “enunciate only an exhaustion requirement, a ‘prudential rule,’ based on comity,” and do not expand tribal court jurisdiction.

[¶ 19] Iowa Mut. Ins. Co. v. LaPlante, 480 U.S. 9, 16, 107 S.Ct. 971, 94 L.Ed.2d 10 (1987) required exhaustion of tribal court remedies as a matter of comity, because allowing earlier access to a federal court “would place it in direct competition with the tribal courts, thereby impairing the latter’s authority over reservation affairs,” and allowing adjudication of a tribal court’s subject matter jurisdiction “by any nontri-bal court also infringes upon tribal lawmaking authority, because tribal courts are best qualified to interpret and apply tribal law.” National Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845, 856-857, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985) required exhaustion of tribal court remedies as a matter of comity to allow the tribal court to “evaluate the factual and legal bases for the challenge,” minimize the risk of a procedural nightmare by allowing ,the tribal court to “determine its own jurisdiction and to rectify any errors it may have made,” to “encourage tribal courts to explain to the parties the precise basis for accepting jurisdiction,” and to “provide other courts with the benefit of their expertise in such matters in the event of further judicial review.” Those kinds of considerations attached to issues of subject matter jurisdiction are not implicated in a case like this one, where the question is simply whether the Tribal Court lacked personal jurisdiction over the State of North Dakota. In this case the lack of proper service on the State prevented the Tribal Court from acquiring personal jurisdiction over the State. We conclude the State was not required to exhaust remedies available to it in Tribal Court.

IV

[¶ 20] The order and judgment are affirmed.

[¶ 21] VANDE WALLE, C.J., and NEUMANN, SANDSTROM and KAPSNER, JJ., concur.

      . Because we have concluded the Tribal Court lacked personal jurisdiction over the State, we need not determine if the Tribal Court had subject matter jurisdiction.

      . In National Farmers, the court indicated that exhaustion of tribal court remedies is not required in all instances:
      We do not suggest that exhaustion would be required where an assertion of tribal jurisdiction “is motivated by a desire to harass or is conducted in bad faith,” or where the action is patently violative of express jurisdictional prohibitions, or where exhaustion would be futile because of the lack of an adequate opportunity to challenge the court’s jurisdiction.
      471 U.S. at 856, n. 21, 105 S.Ct. 2447 (citation omitted).