author: LANSING, Judge.

text:
    BORDER STATE BANK OF GREENBUSH, Appellant (A03-1973), Plaintiff (A04-86), v. BAGLEY LIVESTOCK EXCHANGE, INC., Respondent (A03-1973), Defendant (A04-86), Bert Johnson, d/b/a/ Johnson Farms, Respondent (A03-1973), Defendant (A04-86), and Bert Johnson, d/b/a/ Johnson Farms, third-party plaintiff, Respondent (A03-1973), Appellant (A04-86), v. Hal Anderson, third-party defendant, Respondent.
    Nos. A03-1973, A04-86.
    Court of Appeals of Minnesota.
    Dec. 14, 2004.
    Review Denied Feb. 23, 2005.

      Michael L. Jorgenson, Thief River Falls, MN, for appellant Border State Bank of Greenbush.
    Patrick W. Fisher, Troy J. Lefevre, Grand Forks, ND, for respondent Bagley Livestock Exchange, Inc.
    William M. Hart, Erica Gutmann Strohl, Meagher & Geer, P.L.L.P., Minneapolis, MN, and Robert M. Albrecht, Brink, Sobo-lik, Severson, Malm & Albrecht, P.A., Hal-loek, MN, for respondent Bert Johnson, d/b/a Johnson Farms.
    Alan B. Fish, Alan B. Fish, P.A., Roseau, MN, for respondent Hal Anderson.
    Considered and decided by TOUSSAINT, Chief Judge; LANSING, Judge; and CRIPPEN, Judge.

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

   OPINION

LANSING, Judge.

This action arises from a dispute over the enforceability of a security interest and the interpretation of the cattle-sharing agreement that underlies the security interest. The district court, apparently relying on an incorrect argument that an ownership interest was necessary for the security interest to attach, made no findings on the disputed provisions of the agreement. We therefore reverse the district court’s order directing a verdict against the bank, which attempted to enforce the security interest in a conversion claim, and remand for the court to address the disputed provisions. We affirm, however, the jury verdict adjudicating- the claims between the cattlemen on ■ the breach of the underlying cattle-sharing agreement. The record contains competent evidence to sustain the verdict, the special-verdict form conveyed a correct understanding of the law, and the damages assessed by the jury do not require remittitur.

FACTS

Bert Johnson, doing business as Johnson Farms, and Hal Anderson entered into an oral cattle-sharing contract in Decent ber 1997. Approximately-one month later, they memorialized the oral contract in written form. Under the written, instrument, Anderson agreed to care for and breed cattle owned by Johnson and Johnson would receive a “guaranteed” percentage of the annual .calf crop. The contract further provided that the cattle Johnson placed with Anderson were “considered to be owned by Johnson Farms and any offspring is to be sold under Johnson Farms’ name.” The contract required Johnson Farms and Anderson mutually to agree when the calves would be sold and within thirty days of receiving money for the sale, Johnson Farms to pay the “remainder” to Anderson “for his keeping of [the] cattle.”

In the fall of 1998 and 1999, calves bred under the contract were sold under the provisions of the written contract. Anderson testified that in October 1999, Johnson asked him to care for additional cattle on the same terms. Anderson initially declined, explaining to Johnson that he was ending his cattle business because of adverse personal circumstances. Anderson said that his father had died, his mother was in a nursing home, his partner, Linda Peterson, was caring for an ill family member, he had no additional help at his farm, he had insufficient feed for the cattle, and he had not planted hay for the coming winter. Nevertheless, according to Anderson, they continued to discuss their cattle-sharing contract, and he eventually agreed to continue based on certain modifications: (1) the share percentage would be a straight 40/60 split, without Johnson’s “guaranteed” percentage; (2) Johnson would provide feed, including beet tailings; (3) Johnson would provide additional pasture; and (4) the agreement would include approximately 500 cattle, instead of the original 151 cattle.

Johnson testified that he discussed the cattle-sharing agreement with Anderson in October 1999 and that he agreed to send Anderson beet tailings, which were free to him, so long as Anderson paid the cost of shipping. Johnson also testified that he and Anderson agreed that approximately 500 cattle would be cared for under the cattle-sharing agreement, rather than the original 151 cattle. But Johnson denied that he had agreed to provide feed, other than the beet tailings, and denied that he had agreed to change the provision that “guaranteed” that his percentage of the calf crop would be calculated on the initial number of cows regardless of whether each produced a calf that survived.

In March 2000, Anderson negotiated with Border State Bank for loans totaling $155,528. To secure these loans, Anderson granted Border State Bank a security interest in, among other things, all of Anderson’s “rights, title and interest” in all “livestock” then owned or thereafter acquired.

After the modification of the cattle-sharing contract, Johnson made a number of shipments of beet tailings to Anderson. When Johnson stopped the shipments, he sent checks totaling $55,000 to Anderson for the purchase of feed. In November 2000, Anderson encountered difficulty ear-ing for the cattle due to heavy rainfall and lack of feed. The cattle were reclaimed by Johnson, but the calves remained with Anderson for sale. At trial, Anderson testified that some of the cattle that Johnson reclaimed were actually Anderson’s cattle or were cattle that belonged to Evonne Stephens, another person with whom Anderson had a cattle-sharing contract.

In December 2000, 289 calves that had remained with Anderson were sold at Bag-ley Livestock Exchange. The livestock exchange knew of Border State’s security interest in Anderson’s livestock but, after discussing the agreement with Johnson, determined the security interest did not attach to the calves. The livestock exchange issued a check to Johnson Farms in the amount of $119,403. Thereafter, Johnson gave Anderson a check for $19,404, representing Anderson’s share of the sale proceeds, less $55,000 that Johnson claimed as repayment for money advanced to Anderson to purchase feed.

Border State Bank sued Bagley Livestock Exchange and Johnson, contending that they had converted Border State Bank’s perfected security interest in the calves sold in December 2000. In a third-party complaint, Johnson sought indemnity from Anderson, in the event that Border State Bank was successful on its conversion claim. Anderson served a counterclaim against Johnson, asserting breach of contract.

These claims were tried to a jury iii September 2003. Following Border State Bank’s case-in-chief, Johnson and Bagley Livestock Exchange moved for a directed verdict. The district court granted the motion, finding that, under the cattle-sharing agreement, Johnson did not “grant” Anderson an “ownership interest” in the calves. Border State Bank appeals from the directed verdict on its conversion claim.

Following the directed verdict, Anderson presented evidence on his breach-of-contract counterclaim against Johnson, and the counterclaim was submitted to the jury. In response to special-verdict questions, the jury determined that the written contract between Anderson and Johnson had been modified, Johnson breached the contract, and Johnson’s breach directly caused damages to Anderson in the amount of $92,360. Johnson moved for judgment notwithstanding the verdict (JNOV), or, in the alternative, a new trial or remittitur. The district court denied Johnson’s posttrial motions. Johnson appeals from that denial.

ISSUES

I. Did the district court err by issuing a directed verdict against Border State Bank?

II. Does the record contain competent evidence to sustain the verdict?

III. Did the district court abuse its discretion by denying Johnson’s motion for new trial?

IV. Did the district court abuse its discretion by submitting to the jury a special-verdict form that conveyed an incorrect understanding of the law?

V. Were the damages assessed by the jury so unjustified that the district court abused its discretion in denying the posttrial motion for remittitur?

ANALYSIS

I

Border State Bank argues that the district court erred in issuing a directed verdict on its conversion claim. A district court may grant a motion for a directed verdict when, as a matter of law, the evidence is insufficient to present a question of fact to the jury. Zinnel v. Berghuis Constr. Co., 274 N.W.2d 495, 498 (Minn.1979). On review, an appellate court “must independently determine whether an issue of fact exists when the evidence is viewed in a light most favorable to the nonmoving party.” Baber v. Dill, 531 N.W.2d 493, 495 (Minn.1995). In analyzing the propriety of a directed verdict, we review the evidence in a light most favorable to the nonmoving party. Id.

Article 9 of the Uniform Commercial Code, incorporated into Minnesota law, provides that a security interest attaches to collateral, and is enforceable against the debtor or third parties, when (1) value has been given; (2) the debtor “has rights in the collateral or the power to transfer rights”; and (3) the debtor has signed a security agreement that contains a description of the collateral. MinmStat. § 336.9-203(b) (2002). To perfect the security interest, both the security agreement and financing statement must contain an adequate description of the collateral. Prod. Credit Ass’n of W. Cent. Minn. v. Bartos, 430 N.W.2d 238, 240 (Minn.App.1988). We liberally construe descriptions in the security agreement and financing statement because their essential purpose is to provide notice, not to definitively describe each item of collateral. World Wide Tracers, Inc., v. Metro. Prot. Inc., 384 N.W.2d 442, 447 (Minn.1986).

The parties do not dispute that Anderson signed a security agreement and that value was given. The security agreement stated that the collateral included, in part, “all livestock owned or hereafter acquired” and Anderson’s “rights, title and interest” in such livestock. The financing statements covered “all livestock,” whether “now owned or hereafter acquired, together with the proceeds from the sale thereof.” The parties also do not dispute the validity of these descriptions or the assertion that “livestock” includes cattle and calves. What is disputed is whether the bank’s security interest attached to the 289 calves sold in December 2000 under Anderson and Johnson’s cattle-sharing agreement. See Wangen v. Swanson Meats, Inc., 541 N.W.2d 1, 3 (Minn.App.1995) (stating that if security interest attaches to collateral transferred to third party, secured party may repossess collateral or maintain action for conversion), review denied (Minn. Jan. 25,1996).

In directing a verdict against Border State Bank’s conversion claim, the district court did not issue a written order. The district court, instead, briefly stated the decision on the record at the conclusion of Border State Bank’s case-in-chief, following arguments by counsel. Johnson’s attorney couched his argument in terms of “who actually owned these cattle.” The attorney for the cattle exchange cast his argument in terms of a “mutual mistake of fact as to the ownership” and also referred to an “ownership interest.” Anderson’s attorney, in response, argued that “[mjerely titling something in somebody’s name” does not determine “ownership interest.” And the bank’s attorney asserted that the provisions in the contract did not “indicate who owns [the] calves.” The district court stated on the record that the cattle-sharing contract had not “granted” Anderson an “ownership interest” in the calves, specifically finding that “the modifications testified to by Mr. Anderson in the light most favorable to Border State Bank do not modify the terms of the agreement such that an ownership interest is granted.” Based on the arguments presented, the district court apparently determined that, for Border State Bank’s security interest to attach, Johnson would have had to grant Anderson an interest equivalent to ownership.

The provisions of the Uniform Commercial Code’s Article 9, incorporated into Minnesota law, refer to “rights in the collateral,” not solely the “ownership” of the collateral. MinmStat. § 336.9-203(b)(2) (stating security interest may attach to collateral if “the debtor has rights in the collateral or the power to transfer rights in the collateral”). Rights in the collateral, as the term is used in Article 9, include full ownership and limited rights that fall short of full ownership. Minn. Stat. Ann. § 336.9-203 U.C.C. cmt., para. 6 (West 2002) (“A debtor’s limited rights in collateral, short of full ownership, are sufficient for a security interest to attach.”); see also Greenbush State Bank v. Stephens, 463 N.W.2d 303, 306 (Minn.App.1990) (explaining that “ownership” under the UCC can be shared, with each party possessing its own bundle of interests”), review denied (Minn. Feb. 4, 1991). Simply stated, the UCC “does not require that collateral be owned by the debtor.” State Bank of Young Am. v. Vidmar Iron Works, Inc., 292 N.W.2d 244, 249 (Minn.1980).

Other jurisdictions have cautioned against an interpretation that ownership rights are necessary for the attachment of a security interest. For purposes of the UCC, “sufficient rights” arise with far less than full ownership. Kinetics Tech. Int’l Corp. v. Fourth Nat’l Bank of Tulsa, 705 F.2d 396, 398-99 (10th Cir.1983). Ownership or title is not the relevant concern under Article 9; “the issue is whether the debtor has acquired sufficient rights in the collateral so that the security interest would attach.” Fricke v. Valley Prod. Credit, Ass’n, 721 S.W.2d 747, 753 (Mo.Ct.App.1986). The “rights in the collateral” language is a “gateway through which one looks to other law to determine the extent of the debtor’s rights.” Am. Bank & Trust v. Shaull, 678 N.W.2d 779, 788 (S.D.2004). Thus, “[a]ll or some of owner’s rights can be transferred by way of sale, lease, or license [and a] person with transferable rights can grant an enforceable security interest in those rights.” Id. at 788, n. 4. A “security interest will attach to the collateral only to the extent of the debtor’s rights in the collateral”; mere possession of the collateral is insufficient to support an attachment, but. the debtor need not have full ownership. Pleasant View Farms, Inc. v. Ness, 455 N.W.2d 602, 604 (S.D.1990). “The common conceptualization of property rights as consisting of a bundle of sticks is helpful in understanding when a debtor has sufficient rights in an asset to grant an enforceable Article 9 security interest.” First Nat’l Bank of Philip, S.D. v. Temple, 642 N.W.2d 197, 204 (S.D.2002) (quotation omitted).

The district court did not analyze the modified cattle-sharing contract to determine the nature of Anderson’s rights in the calves or whether Anderson’s interests or rights were sufficient to permit attachment of a security interest. We conclude that the standard relied on by the district court is inconsistent with Minnesota law. The application of the incorrect standard prematurely terminated the analysis of the cattle-sharing agreement, which is necessary to determine whether Anderson’s rights in the collateral were sufficient for the bank’s security interest to attach. Findings of fact that are controlled or influenced by errors of law are not final and must be set aside. Webb Bus. Promotions, Inc. v. Am. Elecs. & Entm’t Corp., 617 N.W.2d 67, 73 (Minn.2000). Because the district court applied a standard of ownership that is inconsistent with Minnesota law, its finding that the security interest did not attach was influenced by an error of law.

In applying the correct legal standard, the district court must initially determine whether the cattle-sharing agreement is ambiguous. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn.1979). The agreement suggests ambiguity by stating that the cattle provided by Johnson continue to be “owned” by Johnson, but, with respect to the calves, requiring only that they are to be sold in Johnson’s “name.” When contract language is susceptible to more than one meaning, the interpretation of the contract becomes a question of fact. Trondson v. Janikula, 458 N.W.2d 679, 681 (Minn.1990). The parties whose interests are affected by this determination should have a full opportunity to argue whether the cattle-sharing contract is ambiguous.

For these reasons, we reverse the district court’s order that directed the verdict on Border State Bank’s conversion claim. On remand, the district court shall consider the cattle-sharing agreement to determine whether Anderson had “rights” in the calves, to which the bank’s security interest attached.

II

Johnson argues that the district court erred in denying his posttrial motion for JNOV, contending that “Andersons oral-modification claim is supported by evidence that is so intrinsically incredible and improbable that the jurys verdict cannot stand.”

We review de novo the district court’s denial of a motion for judgment notwithstanding the verdict. Pouliot v. Fitzsimmons, 582 N.W.2d 221, 224 (Minn.1998). On appeal, we do not weigh, the evidence or assess the credibility of the witnesses. Conroy v. Book Automation, Inc., 398 N.W.2d 657, 662 (Minn.App.1987). We will affirm the denial if there is “any competent evidence reasonably tending to sustain the verdict.” Id. But if “the jury’s verdict cannot be sustained on any reasonable theory of the evidence,” the moving party is entitled to judgment notwithstanding the verdict as a matter of law. Obst v. Microtron, Inc., 614 N.W.2d 196, 205 (Minn.2000).

Anderson testified to oral modifications of the cattle-sharing agreement. He explained that in the fall of 1999 he had decided to get out of the cattle business. Because of this decision, he did not plant hay for the upcoming winter and told Johnson that he was not going to care for any more cattle. According to Anderson, in response to his reluctance to continue, Johnson agreed to modify the cattle-sharing contract to provide that (1) the share percentage would be a straight 40/60 split; (2) Johnson would provide feed, including beet tailings; (3) Johnson would provide additional pasture; and (4) the contract would cover approximately 500 cattle. Because of these modifications, Anderson agreed to continue to perform under the agreement.

Johnson testified that he agreed to send Anderson beet tailings, which were free to him, so long as Anderson paid the price of shipping. Johnson also testified that he agreed that approximately 500 cattle would be cared for under the contract and that he would provide some pasture. But Johnson denied that he agreed to provide feed, other than the beet tailings, and denied that he agreed to change the calf-crop percentage.

Johnson made multiple shipments of beet tailings to Anderson. After ending these shipments, Johnson sent checks totaling $55,000 to Anderson for the purchase of feed. Anderson testified that these checks were provided as part of the modified contract whereby Johnson agreed to feed the cattle. Johnson testified that these checks were provided as advances to Anderson, which Anderson was required to repay because under the contract Anderson was responsible for feeding the cattle.

On this record, we conclude that the testimony of Anderson and Johnson would provide support for a jury to decide the dispute either way, depending on whose testimony they found to be more credible. The jury apparently disbelieved Johnson’s testimony that the contract had not been modified and believed Anderson’s testimony that it had. See Merickel v. Erickson Stores Corp., 255 Minn. 12, 16, 95 N.W.2d 303, 306 (1959) (stating modification to written contract may be evidenced by oral agreement); see also Hentges v. Schuttler, 247 Minn. 380, 384, 77 N.W.2d 743, 746 (1956) (stating the testimony of a single witness may legally suffice as evidence upon which to sustain a verdict). Additionally, Anderson’s testimony was corroborated by evidence that Johnson performed under the modified contract by sending beet tailings and money to purchase feed. See Merickel, 255 Minn. at 16, 95 N.W.2d at 306 (observing that modification to written contract may be evidenced by conduct). Because the record contains competent evidence to sustain the verdict, the district court properly denied Johnson’s motion for JNOV.

Ill

Johnson argues, in the alternative, that the district court erred in denying his motion for new trial because the evidence does not justify the verdict.

The granting of a new trial rests in the discretion of the district court, and the district court’s decision will be reversed only for a clear abuse of that discretion. Boschee v. Duevel, 530 N.W.2d 834, 840 (Minn.App.1995), review denied (Minn. June 14, 1995). “A new trial should not be granted unless the verdict is so contrary to the preponderance of the evidence as to imply that the jury failed to consider all the evidence or acted under some mistake or from some improper motive, Mas, feeling or caprice, instead of honestly and dispassionately exercising its judgment.” Lamb v. Jordan, 333 N.W.2d 852, 855-56 (Minn.1983) (quotation omitted).

In Lamb, the Minnesota Supreme Court held that a new trial was required when the only evidence supporting the jury’s verdict was respondent’s testimony, which was “contradicted by logic and other evidence at almost every point.” Id. at 856. Johnson argues that Anderson’s testimony was similarly contradicted by logic and evidence because “the claimed modifications are intrinsically improbable,” “the lone corroborating witness never materialized at trial,” and “Anderson has a history of questionable business dealings.” Johnson also argues that the tactics Anderson used at trial “suggested to the jury that they employ an improper motive or bias as a basis for their verdict.” Specifically, Johnson points to the characterization of Anderson as a struggling, family farmer, in contrast to the characterization of Johnson as a shrewd, powerful businessman.

This argument overlooks Anderson’s testimony that he intended to change jobs and no longer provide care for cattle because of his father’s death, other medical problems in his family, lack of feed, and lack of assistance at his farm. At the time, Anderson was caring for approximately 500 cattle owned by Johnson.

Contrary to Johnson’s contention, it is logical that Johnson would have an interest in Anderson continuing to care for his approximately 500 head of cattle located on Anderson’s farm. It is also logical, given Anderson’s life circumstances, that Johnson would consent to modifications of the agreement to induce Anderson to continue his performance. Additionally, evidence of Johnson’s performance after the alleged modifications substantiates Anderson’s testimony; Johnson began shipping beet tailings to Anderson and provided Anderson with money for the purchase of feed. On this record, we cannot say that the verdict was so contrary to the preponderance of the evidence that it compels a new trial. The district court did not abuse its discretion by denying Johnson’s motion for new trial.

IV

Johnson argues that he is entitled to a new trial because the special-verdict form conveyed an incorrect understanding of the law by asking only one question on oral modification of the cattle-sharing contract, instead of directing the jury to consider each of the claimed modifications separately.

The specific wording of the special-verdict form is left to the discretion of the district court. Dang v. St. Paul Ramsey Med. Ctr., Inc., 490 N.W.2d 653, 658 (Minn.App.1992), review denied (Minn. Dec. 15, 1992). “[A]ll that is required is that the charge as a whole convey to the jury a clear and correct understanding of the law.” Benson v. Northwest Airlines, Inc., 561 N.W.2d 530, 539 (Minn.App.1997), review denied (Minn. June 11,1997).

The special-verdict form asked four questions: “Was the January 23, 1998 contract modified?”; “Did Bert Johnson breach the contract with Hal Anderson?”; “Did Bert Johnson’s breach of the contract directly cause damage to Hal Anderson?”; and “What amount of money will fairly and adequately compensate Hal Anderson for the damages directly caused by Bert Johnson’s breach of the contract?”

Liability for breach of contract requires proof that damages resulted from or were caused by the breach. Nguyen v. Control Data Corp., 401 N.W.2d 101, 105 (Minn.App.1987). The special-verdict form directed the jury to assess Anderson’s damages only if the jury found that the contract was modified, Johnson breached the contract, and Johnson’s breach directly caused damage to Anderson. The special-verdict form conveyed a clear and correct understanding of the law. The district court did not abuse its discretion, and Johnson is not entitled to a new trial.

y

Johnson contends that the district court abused its discretion by denying his motion for remittitur, arguing that a portion of the awarded damages constituted error because Anderson did not own 25 of the cattle for which he claimed damages.

To alter a district courts decision on a motion for remittitur, we must conclude that the court clearly abused its discretion. State by Humphrey v. Briggs, 488 N.W.2d 811, 814 (Minn.App.1992), review denied (Minn. Sept. 15, 1992). A motion for remittitur requires that the district court consider all of the evidence and determine “whether the verdict is within the bounds of the highest sustainable award under the evidence.” McPherson v. Buege, 360 N.W.2d 344, 347 (Minn.App.1984). To warrant overturning a verdict on appeal, the damages must “so greatly exceed adequate compensation as to be accounted for on no other basis than that of passion or prejudice.” Id. (quoting Gilbertson v. Gross, 232 Minn. 373, 375, 45 N.W.2d 547, 548 (1951)).

Anderson’s complaint sought $104,059 in damages for Johnson’s breach of the cattle-sharing contract. On cross-examination, Anderson testified that he sought damages of “over [$]100,000” for breach of contract and for the value of “cows that are missing.” Anderson also testified that some of the missing cows may have belonged to Evonne Stephens. Anderson’s written accounting of damages under the contract alleged that he was owed $117,221 for his share of the December-2000 calf sales, plus feed.

Considering all the evidence, the damages assessed by the jury do not so greatly exceed adequate compensation that they could only be based on passion or prejudice. Furthermore, even if the jury did assess damages related to the 25 cattle purportedly owned by Stephens rather than Anderson, Anderson had standing to maintain the action for damages as bailee of Stephens’s cattle. See Grinnell-Collins Co. v. Ill. Cent. R.R., 109 Minn. 513, 516, 124 N.W. 377, 378 (1910) (reasoning that person in possession of property as bailee may maintain action for loss of that property if it is taken from him or damaged by wrongful act of another). The district court did not abuse its discretion by denying Johnson’s motion for remittitur.

DECISION

Minn.Stat. § 336.9-203(b) (2002) refers to “rights in the collateral.” The district court applied the wrong legal standard by limiting its inquiry to whether Anderson owned the cattle and erred in failing to address whether the debtor held “rights” in the collateral under the cattle-sharing agreement. We reverse the directed verdict on the bank’s conversion claim and remand for further proceedings. Because the record contains competent evidence to sustain the verdict, the special-verdict form conveyed a correct understanding of the law, and the damages assessed by the jury did not so greatly exceed adequate compensation as to require remittitur, we affirm the district court’s denial of Johnson’s posttrial motions.

Affirmed in part, reversed in part, and remanded.


source: Caselaw Access Project

author: WILLIS, Judge.

license: Public Domain

text:
    Stephanie L. MURRAY, Respondent, v. Kathleen PULS, Respondent, Appellant, Prudential Property and Casualty Insurance Company, intervenor, Appellant, Respondent.
    Nos. A04-319, A04-403.
    Court of Appeals of Minnesota.
    Dec. 20, 2004.

      Richard J. Thomas, Chad J. Hintz, Burke & Thomas, P.L.L.P., Saint Paul, MN, for respondent Murray.
    Kay Nord Hunt, Reid R. Lindquist, Lommen, Nelson, Cole & Stageberg, P.A., Minneapolis, MN, for respondent/appellant Puls.
    William L. Davidson, Sara J. Lathrop, Brian A. Wood, Lind, Jensen, Sullivan & Peterson, P.A., Minneapolis, MN, for appellant/respondent Prudential Property and Casualty Insurance Company.
    Considered and decided by MINGE, Presiding Judge; WILLIS, Judge; and HUSPENI, Judge.

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

   OPINION

WILLIS, Judge.

In these consolidated appeals, appellants challenge the district court’s confirmation of an arbitration award and argue that (1) the district court lacked jurisdiction to hear the motion to confirm the award; (2) the district court erred by concluding that the arbitration agreement was ambiguous; and (3) the district court erred by finding that the arbitration agreement allowed respondent to pursue a claim for underin-sured-motorist (UIM) benefits., Because we conclude that the district court had jurisdiction to hear the motion to confirm the arbitration award and that the district court did not err by- concluding that the arbitration agreement was ambiguous and that the agreement allowed respondent to pursue a UIM-benefits claim, we affirm.

FACTS

Appellants Kathleen Puls and Prudential Insurance Company appeal from an order and judgment confirming an arbitration award in favor of respondent Stephanie Murray for damages caused by an automobile accident involving Puls and Murray in 1995. Murray filed suit against Puls in 2001 and sent a Malmin notice to Prudential, her underinsured-motorist insurer, informing it of the suit and of the possibility that she would seek UIM benefits. Prudential did not participate in the lawsuit.

Rather than proceed to trial, the parties agreed to participate in a binding high-low arbitration with a high of $100,000, Puls’s liability limit under her automobile-insurance policy, and a low of $20,000. This agreement was not written, but both parties refer to a letter from Puls’s attorney, Jill Doescher, confirming the agreement with Murray’s attorney, as the arbitration agreement.

Before the arbitration, Doescher left the practice of law, and Timothy Sanda took over Puls’s representation. Doescher did not discuss with Puls the possibility that Murray could seek UIM benefits after the arbitration. At the time that Puls and Murray agreed to arbitration, neither party mentioned whether UIM benefits would be sought in the future.

But as they prepared for the arbitration, Murray’s attorney made it clear to attorney Sanda that Murray planned to seek UIM benefits. Sanda had asked Murray’s attorney whether Murray would be willing to stipulate to her neurosurgeon’s written report instead of using his deposition testimony at the arbitration. Murray’s attorney replied that they planned to use the deposition testimony to increase Murray’s chances of obtaining an arbitration award in excess of Puls’s liability limits in order to seek UIM benefits. The parties also agreed not to inform the arbitrator of the high-low agreement so that he would determine the total amount of Murray’s damages resulting from the automobile accident.

The arbitrator found that Murray was entitled to an award of $217,746.28, in addition to no-fault benefits already paid. Murray’s attorney then sent a Schmidt-Clothier notice of the award to Prudential, inviting it to substitute its draft for Puls’s $100,000 in order to preserve its future subrogation rights. Prudential informed Murray’s attorney that it would not exercise its rights pursuant to Schmidty-Clothier. Puls’s insurance carrier wrote Murray a check for $100,000, and Murray endorsed the check and signed a release relieving Puls from further liability connected with the accident.

Murray’s attorney then wrote to Prudential and demanded the UIM policy limit of $100,000. Murray claims that Prudential refused to pay Murray any UIM benefits and argued that until the arbitration award was confirmed as a judgment, it had no obligation to pay.

Murray brought a motion to confirm the arbitration award in order to seek UIM benefits from Prudential. Murray and Puls stipulated (1) that the court could confirm the arbitrator’s award against Puls in the amount of $100,000; and (2) that the court could confirm the amount of the arbitrator’s award of $217,746.28 as Murray’s total damages resulting from the accident. Puls now disavows the stipulation. Prudential intervened to oppose Murray’s motion to confirm, claiming that Murray and Puls agreed that $100,000 was full satisfaction of Murray’s damages.

In an order dated August 27, 2003, the district court determined that the arbitration agreement was ambiguous regarding whether the parties intended the arbitration award only to satisfy Puls’s liability to Murray or whether the award was to be a complete satisfaction of Murray’s damages. The court ordered discovery regarding the parties’ intentions. After the. completion of discovery, Murray renewed her motion to confirm the arbitration award. The district court confirmed the arbitration award, finding that the parties intended to enter a “Schmidt-type settlement” and understood that Murray could later pursue UIM benefits. Both Puls and Prudential appeal.

ISSUES

I. Did the district court have subject-matter jurisdiction to entertain Murray’s motion to confirm the arbitration award, or did Puls’s satisfaction of the high-low agreement and Murray’s release of Puls render the case moot?

II. Did the district court err by concluding that the high-low arbitration agreement was ambiguous?

III. Did the district court err by concluding that the arbitration agreement allowed Murray to pursue a UIM-benefits claim?

ANALYSIS

I.

Minnesota courts can decide cases only when there is an actual controversy between the parties. N. States Power Co. v. City of Sunfish Lake, 659 N.W.2d 271, 274 (Minn.App.2003). “If ..: an event occurs which makes a decision on the merits unnecessary or an award of effective relief impossible, the appeal will be dismissed as moot.” Id. (quoting In re Inspection of Minn. Auto Specialties, Inc., 346 N.W.2d 657, 658 (Minn.1984)). Issues of subject-matter jurisdiction are reviewed de novo. Burkstrand v. Burkstrand, 632 N.W.2d 206, 209 (Minn.2001).

■ Appellants argue that the district court lacked jurisdiction to' hear the motion to confirm the arbitration award because Puls’s insurance carrier had satisfied the settlement agreement and Murray had released Puls from further liability. Appellants claim that consequently there was no reason to confirm the arbitration award .as a judgment because the district court’s order is moot in the absence of a controversy between Puls and Murray.

The district court’s jurisdiction to entertain Murray’s motion to confirm rests on whether confirming an arbitration award is necessary in order to pursue UIM benefits after the parties reached a settlement through arbitration and provided the underinsured-motorist insurer with a Schmidt-Clothier notice. Before an injured claimant can pursue a UIM-benefits claim, she must first recover from the tortfeasor’s liability-insurance policy. Employers Mut. Cos. v. Nordstrom, 495 N.W.2d 855, 858 (Minn.1993). She can do this either by (1) pursuing a tort claim to a conclusion in a district court action, or (2) settling the tort claim for “the best settlement.” Id. at 857. If the judgment or settlement exceeds the liability coverage limits, the injured party can pursue UIM benefits. Id. & n. 3. If the injured party pursues the “best settlement” option, she must give a Schmidt-Clothier notice to the undérinsured-motorist insurer before maintaining a claim for UIM benefits. Id.

We conclude that arbitration is an appropriate way to arrive at a “best settlement,” but it has been unclear under Minnesota caselaw whether an injured party must first confirm the arbitration award before pursuing UIM benefits. In Butzer v. Allstate Ins. Co., we held that after arbitration of the underlying tort claim neither the underinsured-motorist insurer nor the insured may relitigate the amount of damages. 567 N.W.2d 534, 538 (Minn.App.1997). We explained that an arbitration award is recognized as a “final judgment of both law and fact” and produces a “legal entitlement to underinsured benefits no different from a judgment following a jury verdict.” Id. (quoting Johnson v. Consol. Freightways, Inc., 420 N.W.2d 608, 613 (Minn.1988)). But that case does not discuss whether the arbitration award there had been confirmed.

Minn.Stat. § 572.18 (2002) provides: “Upon application of a party, the court shall confirm an award, unless within the time limits hereinafter imposed grounds are urged for vacating or modifying or correcting the award, in which case the court shall proceed as provided in sections 572.19 and 572.20.” Minn.Stat. § 572.21 (2002) provides: “Upon the granting of an order confirming, modifying or correcting an award, judgment or decree shall be entered in conformity therewith and be enforced as any other judgment or decree.” The plain language of these statutes indicates that an arbitration award is not the equivalent of a tort judgment. An arbitration award cannot be entered, as a judgment unless it is confirmed by the court. Therefore, before a person may recover UIM benefits from his or her underinsured-motorist insurer based on an arbitration award, the award must be judicially confirmed.

Here, Murray informed Prudential of the arbitration award and invited Prudential to substitute its draft and reserve its subrogation rights against Puls. Prudential refused to do so. Murray then accepted payment from Puls’s insurer and released Puls from further liability. Murray tried to enforce her UIM policy, and Prudential refused to pay. Because confirmation of the award is required before pursuing UIM benefits, Murray’s attempt to confirm the arbitration award was not unnecessary, the case was not moot, and the district court had subject-matter jurisdiction to hear the motion to confirm the arbitration award.

II.

Prudential argues that the district court also erred by concluding that the high-low arbitration agreement was ambiguous. We first address Murray’s argument that Prudential’s appeal regarding the issue of the ambiguity of the high-low arbitration agreement is not properly before us in this appeal because Prudential failed to appeal from the August 27, 2003 order and did not identify the August order in its notice of appeal here.

A notice of appeal must contain a statement specifying and describing the judgment or order from which the appeal is taken. Minn. R. Civ.App. P. 103.01, subd. 1(a). Non-appealable orders may be considered on appeal from the judgment if such orders involve the merits or affect the judgment. Thuma v. Kroschel, 506 N.W.2d 14, 19 (Minn.App.1993), review denied (Minn. Dec. 14, 1993).

The August order was not an appealable order. An appeal may be taken from an order confirming or denying confirmation of an arbitration award. Minn.Stat. § 572.26, subd. 1(3) (2002). While the August 2003 order denied Murray’s motion to confirm at that time, it reserved a final decision on whether to confirm or deny confirmation of the arbitration award until discovery was conducted. The district court specifically confirmed the arbitration award in the January order.

The August order affects the judgment because the finding of ambiguity allowed consideration of extrinsic evidence, and the extrinsic evidence affected the judge’s decision to confirm the arbitration award. Because the August order was not an ap-pealable order and it affected the judgment, Prudential may challenge the district court’s finding that the arbitration agreement was ambiguous.

We now turn to the merits. Prudential argues that the high-low arbitration agreement unambiguously limits Murray’s total damages to $100,000 and does not allow Murray to pursue a UIM-benefits claim against Prudential. If the $100,000 was a complete satisfaction of Murray’s claims, Prudential does not need to pay UIM benefits.

Contract principles apply to agreements to arbitrate. Lucas v. Am. Family Mut. Ins. Co., 403 N.W.2d 646, 648 (Minn.1987). Whether a contract is ambiguous is a question of law, on which the reviewing court owes no deference to the district court’s determination. Blackburn, Nickels & Smith, Inc. v. Erickson, 366 N.W.2d 640, 643-44 (Minn.App.1985), review denied (Minn. June 24, 1985). “The interpretation of a contract is a question of law if no ambiguity exists, but if ambiguous, it is a question of fact and extrinsic evidence may be considered.” City of Virginia v. Northland Office Props. Ltd. P’ship, 465 N.W.2d 424, 427 (Minn.App.1991), review denied (Minn. Apr. 18, 1991).

A contract is ambiguous if its language is reasonably susceptible of more than one meaning. Blattner v. Forster, 322 N.W.2d 319, 321 (Minn.1982). The disputed language here is in the letter confirming the high-low arbitration agreement. The letter states: “This will confirm that we have agreed to do a high-low arbitration instead of going to trial in this case. We have agreed on a low of $20,000.00 and a high of $100,000.00.”

Prudential argues that this letter shows that the parties intended that the arbitrator’s award would be full settlement of the claim. Murray argues that the absence of a specific mention in the agreement of UIM coverage made the document ambiguous because the language could also indicate the parties’ intention to obtain a determination of Murray’s actual damages.

An arbitrator often conducts a high-low arbitration without knowing the agreed-upon high or low and decides damages as in an ordinary arbitration. See John W. Cooley & Steven Lubet, Arbitration Advocacy 250 (2d ed.2003). Because the confirmation letter does not clarify whether the high was a complete settlement or a limit on Puls’s liability, and because high-low arbitration agreements concern maximum payment, not maximum damages, the letter could reasonably be susceptible of more than one interpretation. Therefore, the district court did not err by concluding that the arbitration agreement was ambiguous.

III.

Prudential and Puls both argue that the district court erred by concluding that the parties intended to enter into a “Schmidt-type settlement” and by concluding that the high-low arbitration agreement allowed Murray to pursue a UIM-benefits claim. This is a question of fact, and this court will not disturb a district court’s findings of fact unless the findings are clearly erroneous. Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn.1999).

The district court based its finding that the parties intended to enter into a Schmidt-type settlement on the following facts: (1) Murray believed Puls to be un-derinsured and planned to seek UIM benefits from the beginning of the litigation; (2) both parties believed that Murray’s damages would probably exceed Puls’s $100,000 liability-policy limit; (3) there was no discussion or agreement not to seek UIM benefits; (4) “Doescher did not advise [Puls] that Prudential would have sub-rogation rights against her in the event it substituted its draft because she did not consider [Murray’s] right to UIM benefits; not because she understood the agreement prohibited [Murray’s] right to UIM benefits”; and (5) at the time of the arbitration, attorney Sanda understood that Murray planned to seek UIM benefits and “signed an agreement to confirm the arbitration award in the full amount of the damages.”

“A written agreement to submit any existing controversy to arbitration ... is valid, enforceable, and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract.” Minn. Stat. § 572.08 (2002). Prudential argues (1) that there is no evidence that Puls and Murray agreed and understood that a UIM claim would be pursued; and (2) that because there was never a meeting of the minds, the district court’s reliance on post-agreement conduct was improper.

A meeting of the minds is a necessary element of a contract in Minnesota. Minneapolis Cablesystems v. City of Minneapolis, 299 N.W.2d 121, 122 (Minn.1980). Because agreements to arbitrate are governed by contract principles, Murray and Puls’s agreement to arbitrate is unenforceable if there was no meeting of the minds concerning the agreement’s essential elements. Id. The parties agree that the existence or nonexistence of an agreement for a UIM claim to proceed was an essential element of the arbitration agreement.

It is clear that both Puls and Murray agreed to arbitrate, but what is unclear in the agreement is what the parties intended to arbitrate — Murray’s total damages or merely the damages to be paid by Puls. Prudential argues that “[t]he question of the parties’ intent is measured by the meeting of the minds at the time the agreement was made, not upon any subsequent discussions.” But this court has noted that a “simultaneous meeting of the minds” is not required. Peters v. Mut. Benefit Life Ins. Co., 420 N.W.2d 908, 914 (Minn.App.1988).

The requisite mutual assent for the formation of a contract ... does not require a subjective mutual intent to agree on the same thing in the same sense, but may be based on objective manifestations whereby one party by his words or by his conduct, or by both, leads the other party reasonably to assume that he assents to and accepts the terms of the other’s offer.

W. Insulation Servs., Inc. v. Cent. Nat’l Ins. Co. of Omaha, 460 N.W.2d 355, 358 (Minn.App.1990) (quotation omitted). The record shows that before the arbitration took place, Puls’s attorney knew of Murray’s intent to seek UIM benefits and to have the arbitrator determine Murray’s total damages, even if they exceeded the $100,000 limit of the high-low agreement. If Puls intended for the arbitration agreement to limit Murray’s total damages to $100,000, she had the opportunity to reject the proposed arbitration. Puls’s failure to object to Murray’s intent to seek UIM benefits and Puls’s continued participation in the arbitration process manifests the requisite mutual assent that the parties intended to enter into a Schmidt-type settlement and understood that Murray could later pursue UIM benefits. The district court’s finding was not clearly erroneous.

Because there is sufficient evidence in the record other than Puls and Murray’s stipulation to support the district court’s confirmation of the arbitration agreement, Puls’s purported disavowal of the stipulation because her attorney entered into it without her knowledge or agreement is of no consequence.

DECISION

Because judicial confirmation of an arbitration award is necessary in order to pursue a UIM-benefits claim after reaching a “best settlement” through arbitration and providing the underinsured-motorist insurer with a Schmidt-Cbthier notice, the district court had jurisdiction to entertain Murray’s motion to confirm the arbitration award. Because the arbitration agreement was susceptible of more than one interpretation, the district court did not err by concluding that the agreement was ambiguous. Because the conduct of the parties prior to the arbitration showed an understanding that Murray would pursue a UIM-benefits claim, the district court did not err by concluding that the arbitration agreement allowed her to do so.

Affirmed.

      . Malmin v. Minn. Mut. Fire & Cas. Co., 552 N.W.2d 723 (Minn.1996).

      . Murray was born with tethered-cord syndrome, but she experienced no symptoms related to this condition until after the automobile accident. The neurosurgeon who performed surgery on Murray in August and September 1998 testified that the extreme pain Murray experienced in her back resulted from the accident.

      . Schmidt v. Clothier, 338 N.W.2d 256 (Minn.1983).

      . Appellants do not cite this case to support their arguments that the confirmation of the arbitration award was improper. Rather, they seem to rely solely on the fact that Murray has no reason to confirm the award against Puls because Puls has satisfied her obligation.

      . In unpublished decisions relied on by the district court and by the parties, we have determined that "the arbitrator's award could not bind the parties, absent judicial confirmation of the award.” Mattila v. Am. Family Mut. Ins. Co., 1998 WL 170113 at *2, No. CO-97-1982, (Minn.App. Apr.14, 1998); see also Cooper v. State Farm Auto. Cas. Ins. Co., No. C2-97-400 (Minn.App. Sept.9, 1997) (unpublished decision noting that an arbitration award does not conclusively establish damages owed by UIM-benefits carrier unless the arbitration award is confirmed by the court), review denied (Minn. Oct. 31, 1997). We interpreted Minn.Stat. §§ 572.18 and 572.21 to require the judicial confirmation of an arbitration award to effectuate the equivalent of a judgment. Mattila, 1998 WL 170113 at *2. We determine that the plain language of the statute supports this interpretation.

      . Puls argues that the agreement that Murray could pursue UIM coverage was not supported by consideration. But performance of a contract satisfies the element of consideration. Welsh v. Barnes-Duluth Shipbuilding Co., 221 Minn. 37, 44-45, 21 N.W.2d 43, 47 (1945) (also noting that ''[i]n cases of executed contracts, mutuality, lacking while the contract was executory, or, as it is said, at its inception, is supplied by the promisee's subsequent performance”). Here, the agreement between Murray and Puls was to participate in arbitration to determine the amount of damages owed to Murray. Both Murray and Puls, through their attorneys, participated in the arbitration, thus satisfying the requirement of consideration.


author: TOUSSAINT, Chief Judge.

text:
    STATE of Minnesota, Respondent, v. Orlando Manuel BOBADILLA, Appellant.
    No. A03-1891.
    Court of Appeals of Minnesota.
    Dec. 21, 2004.

      Mike Hatch, Attorney General, Thomas Rolf Ragatz, John B. Galus, Assistant Attorney Generals, St. Paul, MN; and Boyd A. Beccue, Kandiyohi County Attorney, Willmar, MN, for respondent.
    John E. Mack, Mack & Daby, P.A., New London, MN, for appellant.
    Considered and decided by TOUSSAINT, Chief Judge; WILLIS, Judge; and CRIPPEN, Judge.

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

   OPINION

TOUSSAINT, Chief Judge.

Appellant Orlando Bobadilla challenges his convictions of first and second-degree criminal sexual conduct, arguing that the trial court abused its discretion in its evi-dentiary rulings and that the evidence is insufficient to support his convictions. We conclude that the trial court properly admitted the victim’s statement to his mother and Bobadilla’s statement against interest, and properly excluded Bobadilla’s statement denying the allegations against him. However, because the victim’s videotaped statement to the child-protection worker and police detective was testimonial in nature, and Bobadilla was not given the opportunity to cross-examine the witness, we reverse in part and remand for a new trial.

FACTS

On Friday, May 2, 2003, Melissa Camar-illo took her three-year-old son, T.B., to visit his father for the weekend. T.B,’s father lived with several relatives, including his brother, appellant Orlando Bobadil-la. Camarillo testified that after picking T.B. up on Sunday at 11:00 p.m., she changed his pull-up and noticed that the area around his anus was red and irritated. When she mentioned this to T.B., he appeared nervous and began playing with his hair. T.B.’s mother reassured him that he could tell her anything and asked him again what happened. T.B. told his mother that “Uncle Orlando had put his finger in his booty.”

T.B.’s parents took him to the hospital that night, where he was examined by Sandra Savage, M.D., who testified that she observed an abnormal erythema or redness around T.B.’s rectum that did not appear to be a diaper rash. She did not see any ulcerations or lesions that would lead her to believe that T.B. had a chronic problem in that area of his body. Dr. Savage opined that the injury was consistent with T.B.’s disclosure that Bobadilla had penetrated T.B.’s anus with his finger, but also stated that it could be consistent with other causes.

Several days later, Cherlynn Molden, a child-protection worker, and Matthew Ak-erson, a police detective, conducted a videotaped interview of T.B. at the Kandi-yohi County Law Enforcement Center. Molden testified that she first drew pictures of T.B. and his parents. She also showed him a picture and asked him to name certain body parts. Later in the interview, Molden asked T.B. whether anyone had hurt his body, and he replied, “Orlando did.” Molden then asked T.B. how appellant had hurt him, and T.B. replied, “[H]e does stuff to my booty ... he put his finger in my booty.” When asked to identify his “booty” on the diagram, T.B. pointed to his buttocks.

Molden also asked T.B. specific questions regarding the circumstances surrounding the alleged sexual assault. First, Molden asked T.B. where and how many times the incident occurred. T.B. replied that it occurred “one time” while he was lying down in his “dada’s” room. Next, Molden asked T.B. if Bobadilla said anything when the incident occurred, and T.B. replied that Bobadilla said he was “sorry.” Finally, Molden asked T.B. where his father was at the time of the incident, and T.B. replied that his father went downstairs to get the “kitty.”

Based on T.B.’s statement to his mother and the videotaped interview, the state charged Bobadilla with first and second-degree criminal sexual conduct. On September 2, 2003, the trial court conducted a competency hearing and concluded that T.B. was not competent to testify at trial. Nonetheless, during a pretrial hearing, the court admitted T.B.’s statement to his mother and his videotaped interview. The court found that the time, content, and circumstances of the statements and the reliability of the recipients of those statements provided sufficient indicia of reliability. But the court excluded, as hearsay, Bobadilla’s statement to Detective Aker-son denying the charges against him.

At Bobadilla’s trial, T.B.’s mother and father, Dr. Savage, Molden, and Detective Akerson testified for the state. The videotaped interview was played for the jury, and Molden testified about the contents of the interview. T.B.’s father testified that he left T.B. alone only when he went to retrieve the cat, and that he was downstairs for a matter of seconds. He acknowledged, however, that he might have told police that he was gone for five minutes or so.

Before the state rested its case, it offered as evidence Bobadilla’s statement, to Detective Akerson, that T.B.’s father was looking for the cat for 15 to 20 minutes. The trial court concluded that the statement was admissible under Minn. R. Evid. 804(b)(3) and 801(d)(2), but only if Detective Akerson could recall Bobadilla’s statement without referring to the transcript. On redirect, Detective Akerson testified that Bobadilla told him that T.B.’s father was looking for the cat for 15 to 20 minutes.

Bobadilla also testified at trial. He testified that he did not recall his statement to Detective Akerson regarding the amount of time T.B.’s father was looking for the cat, and he denied T.B.’s allegation.

On September 4, 2003, the jury found Bobadilla guilty of first and second-degree criminal sexual conduct. Bobadilla was sentenced to 144 months in prison. This appeal follows.

ISSUES

I. Did the trial court abuse its discretion by (1) admitting T.B.’s videotaped statement to the child-protection worker and police detective; (2) admitting T.B.’s out-of-court statement to his mother; (3) admitting Bobadilla’s statement regarding the length of time T.B.’s father was looking for the cat? (4) excluding Bobadilla’s statement to police denying the charges against him.

ANALYSIS

“Evidentiary rulings rest within the sound discretion of the trial court and will not be reversed absent a clear abuse of discretion. On appeal, the appellant has the burden of establishing that the trial court abused its discretion and that appellant was thereby prejudiced.” State v. Amos, 658 N.W.2d 201, 203 (Minn.2003) (citations omitted). If the trial court has abused its discretion in admitting evidence, the reviewing court determines “whether there is a reasonable possibility that the wrongfully admitted evidence significantly affected the verdict.” State v. Post, 512 N.W.2d 99, 102 n. 2 (Minn.1994). If there is a reasonable possibility that the verdict might have been more favorable to the defendant without the evidence, then the error is prejudicial. Id.

Initially, we note that the state is asserting that because Bobadilla never raised his evidentiary claims at trial, he waived his right to raise them on appeal. While issues not raised at trial are generally waived on appeal, State v. Vick, 632 N.W.2d 676, 684-85 (Minn.2001), we reserve the right to consider those issues, particularly when they are raised in criminal cases.

1. T.B. Videotaped Statement

At a competency hearing, the state concluded that three-year-old T.B. was not competent to testify at trial. As a result, the state offered, as substantive evidence, a videotaped interview between T.B. and the child-protection worker and police detective. The trial court admitted the statement, concluding that the time, content, and circumstances of T.B.’s videotaped statement, and the fact that the child-protection worker had no reason to lie and did not ask leading questions, provided sufficient indicia of reliability. Bo-badilla argues that admission of T.B.’s videotaped statement violated his Sixth Amendment right to confront the witness. We agree.

Until recently, out-of-court hearsay statements were admissible if the trial court determined that the statement bore sufficient “indicia of reliability.” Ohio v. Roberts, 448 U.S. 56, 66, 100 S.Ct. 2531, 2539, 65 L.Ed.2d 597 (1980). However, in Crawford v. Washington, 541 U.S. 36, 124 S.Ct. 1354, 158 L.Ed.2d 177 (2004) the United States Supreme Court re-evaluated its prior ruling as it applied to testimonial statements. The Supreme Court explained that, “[rjeliabilty is an amorphous, if not entirely subjective, concept” that “is fundamentally at odds with the right of confrontation.” Id. at 1370-71. As a result, the Supreme Court rejected the Roberts reliability test, holding that where testimonial evidence is at issue, the Sixth Amendment requires that the (1) declarant be unavailable to testify; and (2) defendant have a prior opportunity to cross-examine the declarant. Id. at 1374.

The Supreme Court did not define the term “testimonial,” but listed three different categories of testimonial statements, including statements made during police interrogations. Id. at 1364. While the Supreme Court did not specifically identify videotaped statements to child-protection workers as “testimonial,” this court has held that under Crawford, such statements are “testimonial.” State v. Courtney, 682 N.W.2d 185, 196 (Minn.App.2004), review granted (Minn. Sept. 29, 2004).

In light of the recent caselaw and the facts in this case, we conclude that T.B.’s videotaped statement was testimonial. The child-protection worker interviewed T.B. in the presence of Detective Akerson. She asked T.B. whether anyone had hurt him, who hurt him, and how he was hurt. These circumstances clearly indicate that the interview was conducted for purpose of developing a case against Boba-dilla, and therefore, the answers elicited were testimonial in nature. See Courtney, 682 N.W.2d at 196 (holding that a child’s videotaped statement to child-protection worker and police officer regarding the facts surrounding his mother’s assault was testimonial because the interview was conducted for the purpose of developing a case against the defendant). Because the videotaped statement was testimonial, it is inadmissible because T.B. was unavailable and Bobadilla did. not have a prior opportunity to cross-examine T.B. See Crawford, 124 S.Ct. at 1374. Thus, under Crawford, admission of T.B.’s videotaped statement violated Bobadilla’s Sixth Amendment right to confront T.B. Because Bobadilla was denied his Sixth Amendment right to confront the witness, he is entitled to a new trial. We also note that because T.B.’s videotaped interview was inadmissible under Crawford, the trial court also abused its discretion in allowing the child-protection worker to testify about the contents of that interview. Because we are reversing Bobadilla’s conviction for first and second-degree criminal sexual conduct and remanding for a new trial, we need not address Bobadilla’s sufficiency-of-the-evidence claim.

2. T.B. Statement to his Mother

Next, Bobadilla argues that the trial court erred in admitting T.B.’s statement to his mother. T.B.’s statement to his mother was not testimonial. T.B.’s mother questioned T.B. about the redness around his anus out of concern for his health, not because she expected to develop a case against Bobadilla. Cf. Courtney, 682 N.W.2d at 196 (holding that a child’s videotaped statement was testimonial where the interview was conducted for the purpose of developing a case against the defendant).

Because the statement was not for the purpose of developing a case against Boba-dilla it is not testimonial, under Crawford. See Crawford, 124 S.Ct. at 1374. Instead, we ask whether the trial court abused its discretion in admitting the statement under Minn.Stat. § 595.02, subd. 3 (2002), which sets the standard for determining when out-of-court statements made by children are admissible.

MinmStat. § 595.02, subd. 3, provides that

[a]n out-of-court statement made by a child under the age of ten years ... alleging, explaining, denying, or describing any act of sexual contact ... performed with or on the child ... not otherwise admissible by statute or rule of evidence, is admissible as substantive evidence if:
(a) the court or person authorized to receive evidence finds, in a hearing conducted outside the presence of the jury, that the time, content, and circumstances of the statement and the reliability of the person to whom the statement is made provide sufficient indicia of reliability;
(b) the child ... either
(i) testifies at the proceedings; or
(ii) is unavailable as a witness and there is corroborative evidence of the act; and
(c) the proponent of the statement notifies the adverse party of the proponent’s intention to offer the statement and the particulars of the statement sufficiently in advance of the proceeding at which the proponent intends to offer the statement into evidence to provide the adverse party with a fair opportunity to prepare to meet the statement.

In admitting the T.B.’s out-of-court statement to his mother, the trial court found that (1) T.B. made the statement the same night he returned home from visiting with his father; (2) the statement was not one usually described or volunteered by a child; (3) the mother’s questioning was not suggestive or leading; and (4) the mother had no reason to lie. Accordingly, the court concluded that there was sufficient indicia of reliability to admit the statement. The court also found that even though T.B. was not competent to testify at trial, the consistency of his statement over a period of time, and the fact that his mother had no reason to lie, corroborated his statement. In light of these findings and the requirements of Minn.Stat. § 595.02, subd. 3, we find that the trial court did not abuse its discretion in admitting T.B.’s out-of-court statement to his mother.

S. Bobadilla’s Inculpatory Statement

Bobadilla argues that trial court erred in admitting into evidence his statement to Detective Akerson that T.B,’s father was looking for the cat for 15 to 20 minutes. The trial court concluded that it was a “statement against interest that tended to subject him to criminal liability based on timing,” and admitted the statement under Minn. R. Evid. 804(b)(3) and 801(d)(2).

A Bobadilla’s Exculpatory Statement

Finally, Bobadilla also argues that the trial court erred in excluding, as hearsay, his statement to Detective Akerson denying T.B.’s allegation. Hearsay is an out-of-court statement offered to prove the truth of the matter asserted. Minn. R. Evid. 801(c). Bobadilla offered the exculpatory statement to prove its truth, and therefore, it was hearsay. Because the exculpatory statement was hearsay, and it does not fall within one of the hearsay exceptions, the trial court did not abuse its discretion in excluding the statement.

We conclude that the court acted within its discretion in admitting the statement under Minn. R. Evid. 801(d)(2)(A). Under rule 801(d)(2)(A), a statement is not hearsay if it “is offered against a party and is ... the party’s own statement, in either an individual or a representative capacity.” Because Bobadilla’s statement regarding the amount of time T.B.’s father was looking for the cat was offered against Boba-dilla in order to show that he had the opportunity to sexually assault T.B., the statement is not hearsay under rule 801(d)(2)(A).

DECISION

Because T.B.’s out-of-court statement to his mother was not testimonial, the district court did not abuse its discretion in admitting it as substantive evidence under Minn. Stat. § 595.02, subd. 3 (2002). Further, the district court did not abuse its discretion in concluding that Bobadilla’s inculpa-tory statement was admissible under 801(d)(2)(A). Because Bobadilla’s statement to Detective Akerson denying T.B.’s allegation was hearsay, the district court did not abuse its discretion in excluding the statement.

However, because T.B. was not competent to testify at trial, and Bobadilla did not have a prior opportunity to cross-examine T.B., the district court’s admission of T.B.’s videotaped interview violated Bo-badilla’s right to confrontation. Accordingly, the district court also erred in allowing the child-protection worker to testify about the contents of the videotaped interview. Bobadilla is therefore entitled to a new trial.

Affirmed in part, reversed in part and remanded.


author: GORDON W. SHUMAKER, Judge.

text:
    ZURICH AMERICAN INSURANCE COMPANY, Appellant, v. Donald A. BJELLAND, Respondent.
    No. A04-709.
    Court of Appeals of Minnesota.
    Dec. 28, 2004.

      Scott P. Drawe, Drawe & Heisick, Edi-na, MN, for appellant.
    Michael D. Barrett, Cousineau, McGuire & Anderson, Minneapolis, MN, for respondent.
    Michael D. Carr, Emmer Law Firm, P.A., Maple Plain, MN, for amicus curiae Minnesota Self-Insurers’ Association.
    Considered and decided by SHUMAKER, Presiding Judge, HALBROOKS, Judge, and HUSPENI, Judge.

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

   OPINION

GORDON W. SHUMAKER, Judge.

The district court ordered the entry of two partial summary judgments. The first determined that an alleged third-party tortfeasor in a workers’ compensation sub-rogation action has a right to a jury trial on liability and damages and that the insurer-subrogee is not automatically entitled to the full recovery of benefits paid and payable without first proving liability and damages. Appellant does not challenge this holding.

In the second judgment, the district court adopted the parties’ stipulated conclusion, agreed upon for purposes of appeal, that the appellant-insurer’s recovery of workers’ compensation benefits it paid on behalf of a deceased employee are limited to those damages recoverable under Minn.Stat. § 573.02 (2002), the Wrongful Death Act. Appellant challenges this conclusion, arguing that the 2000 amendments to Minn.Stat. § 176.061 (2002), the subro-gation provisions of the Workers’ Compensation Act, redefined the measure of recovery in such actions as the full amount of benefits paid and payable to the employee.

Because the plain language of the amendments effectively removes any former common law or statutory limitations to recovery in such actions, we reverse the second judgment. And because the parties have stipulated to liability and damages, we remand for the effectuation of the stipulation.

FACTS

In this appeal from a summary judgment, the district court ruled that a workers’ compensation insurer-subrogee, who has paid compensation for a worker’s wrongful death, is limited in its recovery of damages against a third-party tortfeasor to only the amounts recoverable under the Wrongful Death Act, even though some of those amounts are less than the workers’ compensation benefits paid or payable.

Respondent Donald Bjelland failed to stop his semi-traetor-trailer at a stop sign and collided with a car Eugene Bodeker was driving in the course of his employment for Associated Milk Producers, Inc. (AMPI). Bodeker was killed.

Appellant Zurich American Insurance Company, AMPI’s workers’ compensation insurer, paid to Bodeker’s survivors $104,319 in workers’ compensation benefits. That sum included dependency benefits. Dependency benefits required by the Workers’ Compensation Act are greater than those recoverable under the Wrongful Death Act.

Bjelland and Bodeker’s surviving spouse agreed to a Naig settlement for all damages except those recoverable as workers’ compensation benefits. Zurich thereafter sued Bjelland in this subrogation action to recover all workers’ compensation benefits it had paid, irrespective of any limits under the Wrongful Death Act.

Bjelland moved for partial summary judgment determining that he is entitled to a jury trial on the issue of the appropriate amount of dependency damages. Relying on caselaw, Bjelland argued that the subrogee is not automatically entitled to recover the workers’ compensation benefits it paid but rather must prove its damages in a jury trial.

In its cross-motion for summary judgment, Zurich maintained that it is entitled to recover the workers’ compensation benefits paid or payable irrespective of limitations under the Wrongful Death Act.

The district court entered two orders for partial summary judgment, each determining separate issues. In the first', dated December 3, 2003, the court granted Bjel-land’s motion, holding, among other things, that he is entitled to a jury trial on the issue of damages. Even though this partial-summary judgment appears to be reviewable under Minn. R. CivApp. P. 103.04, Zurich does not challenge the district court's ruling and, in fact, concedes that Bjelland is entitled to a jury trial on liability and damages in this subrogation action.

For purposes of obtaining an appellate determination of the proper construction of the workers’ compensation subrogation statutes, the parties requested the district court to adopt their stipulation that (1) if there were a jury trial, the jury would find Bjelland causally negligent in the collision that killed Bodeker; (2) the jury would find damages under the Wrongful Death Act in the sum of $48,336.05; and (3) the fair and reasonable value of the workers’ compensation benefits paid or payable by Zurich is $104,319. In its order dated March 24, 2004, the court adopted this stipulation and also adopted the stipulated conclusion that “Recoverable damages in this workers’ compensation subrogation action are limited to the amount of damages recoverable under the Wrongful Death Act. Minn.Stat. § 573.02.” It is from the partial summary judgment the court entered on this conclusion that Zurich appeals.

ISSUE

The Minnesota Legislature amended four subdivisions of the Workers’ Compensation Act addressing an employer’s right to recover from a third party benefits paid to or on behalf of an employee. The amendments permit recovery regardless of whether such amounts are recoverable by statute or at common law. May the insurer-subrogee recover workers’ compensation benefits it paid for the employee’s wrongful death, irrespective of Wrongful Death Act damages limits?

ANALYSIS

Curiously, each party states a different issue on appeal. Both refer to amendments of certain workers’ compensation statutes and to caselaw pertaining to those statutes prior to the amendments. Zurich urges this court to determine that the amended statutes permit it, as subrogee, to recover workers’ compensation benefits paid or payable even if they exceed common law or statutory limits.

Bjelland states that the appeal “presents a single question” of whether the workers’ compensation amendments “automatically entitle[d] an employer to recover from a tortfeasor, dollar-for-dollar, the full amount of workers’ compensation benefits payable on behalf of an injured employee, or does the employer still retain the burden of proving the nature and extent of damages?”

At least as to these parties, the law of the case settles Bjelland’s issue because the district court granted Bj el-land’s summary judgment motion on that very issue in its December 3, 2003, order, and Zurich does not challenge that ruling on appeal. See State v. Harrington, 504 N.W.2d 500, 503 (Minn.App.1993) (holding that, where appellants did not appeal the validity of an order, the order became the law of the case), review denied (Minn. Sept. 30, 1993).

Furthermore, in its reply brief and on oral argument, Zurich acknowledged and conceded that it is not automatically entitled to recoup the benefits it paid; that it retains the burden of proving both damages and liability; and that the alleged tortfeasor has a right to a jury trial on both liability and damages.

Because Zurich does not seek review of the December 3, 2003, judgment and in fact concedes Bjelland’s issue as reflected in that judgment, we need not discuss the issue further. Additionally, because the parties have stipulated to all material facts on appeal, there are no genuine fact issues to be resolved through a trial. Thus, we are concerned solely with an issue of statutory construction.

Statutory Amendments

Statutory construction is a question of law that this court reviews de novo. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 393 (Minn.1998). We are required to accept the plain meaning of a statute “[w]hen the words ... in their application to an existing situation are clear and free from all ambiguity.” Minn.Stat. § 645.16 (2002).

In 2000, the Minnesota Legislature amended four subdivisions of Minn.Stat. § 176.061 that relate to third-party liability under the Workers’ Compensation Act. 2000 Minn. Laws ch. 447, §§ 4-8. Minn. Stat. § 176.061, subds. 3, 5, 7, 10 (2000). Each subdivision addresses an aspect of an employer’s remedies against a third party who has injured or killed an employee to whom or on whose behalf the employer has paid worker’s compensation benefits.

The language the legislature added to each of the subdivisions is identical, as illustrated in subdivision 3. It gives a right of subrogation or indemnity to an employer who pays workers’ compensation benefits to an employee. The subdivision allows the employer to recover those benefits in an action against a third party and removes all limits on such recovery:

The employer ... may bring legal proceedings against the party and recover the aggregate amount of benefits payable to or on behalf of the employee or the employee’s dependents, regardless of whether such benefits are recoverable by the employee or the employee’s dependents at common law or by statute together with costs, disbursements, and reasonable attorney’s fees of the action.

Minn.Stat. § 176.061, subd. 3 (2000) (emphasis added).

Prior to the amendments, one case expressly addressed the question of damages limits in workers’ compensation subrogation actions. In Tyroll v. Private Label Chems., Inc., 505 N.W.2d 54, 60 (Minn.1993), the supreme court stated that, because the employer steps into the shoes of the employee, the employer “should be limited to recovery of common law damages.”

In its summary judgment memorandum, the district court noted that “the amendment may overrule part of the holding in Tyroll ...." It appears that the court was referring to the damages limits. And Bjel-land tends to concede the overruling of the Tyroll limitation when he notes that “[t]he 2000 Amendments arguably overruled Ty-roll’s limitation on the employer’s recovery to common law damages only.”

A statutory amendment is presumed to be intended to effect a change in the law. Geldert v. Am. Nat’l Bank, 506 N.W.2d 22, 26 (Minn.App.1993), review denied (Minn. Nov. 16, 1993). We also presume that “plain and unambiguous statutory language manifests legislative intent.” Klein Bancorporation, Inc. v. Comm’r of Revenue, 581 N.W.2d 863, 866 (Minn.App.1998), review denied (Minn. Sept. 22, 1998). When a statute is free of ambiguity, we look only to its plain language. Tuma v. Comm’r of Econ. Sec., 386 N.W.2d 702, 706 (Minn.1986). And we do not create ambiguity in an otherwise clear statute under the guise of statutory construction. Minn.Stat. § 645.16.

The language added by the 2000 amendments, repeated four times in four subdivisions addressing the same issue, is unambiguous. Its unmistakable intent is to permit an employer who has paid workers’ compensation benefits to seek to recover all of those benefits without being limited by the common law or any statute. Any statutory or caselaw limitation on the types of damages recoverable under the Wrongful Death Act is thus eliminated by the new language.

Not only is the language of the amendments clear, but, as the amicus curiae brief notes, it is premised on sound public policy. It places the burden of all compensa-ble damages on the culpable tortfeasor rather than on the innocent employer.

We recognize that the district court accepted the parties’ stipulation as to the applicability of the wrongful-death-damages limit so as to facilitate appellate review of the issue. The stipulated conclusion was erroneous, as demonstrated by the amendments to Minn.Stat. § 176.06, subds. 3, 5, 7, 10, and the judgment entered on that conclusion must be reversed.

Subrogation

Bjelland based his argument, now conceded by Zurich, on the premise that Zurich’s rights are co-extensive with Bodeker’s survivors’ rights and thus are subject to the Wrongful Death Act because Zurich obtains its rights only through subrogation.

Under common-law subrogation, the subrogee stands in the shoes of the subrogor and obtains no greater right than the subrogor had. Share Health Plan, Inc. v. Marcotte, 495 N.W.2d 1, 3 (Minn.App.1993), review denied (Minn. Mar. 30, 1993). The logical extension of the subro-gation principle is that Zurich would be limited to Wrongful Death Act damages just as Bodeker’s survivors would be limited in a wrongful-death action against Bjel-land. Kaiser v. Northern States Power Co., 353 N.W.2d 899, 903 (Minn.1984).

But just as the workers’ compensation laws are entirely statutory, the employer derives its right to recover any amount from, a third-party tortfeasor only and solely through the workers’ compensation statutes. Even though the employer’s right is referred to as that of “subrogation,” it is a right created by statute. That right now includes an unlimited recovery of provable damages.

Furthermore, the employer’s right is not limited even to subrogation but rather is also referred to as “a right of indemnity.” Minn.Stat. § 176.061, subds. 3, 10. As an indemnitee, the employer is entitled to be made whole. Lunderberg v. Bierman, 241 Minn. 349, 354, 63 N.W.2d 355, 359 (1954). Thus, either through the principle of statutory subrogation as defined by the workers’ compensation amendments or the principle of indemnity, Zurich is entitled to recover, without limit, such damages as it may prove it is entitled to. Here, it appears that the parties have bound themselves to stipulated liability and damages, and the matter needs to be remanded to the district court to effectuate the stipulation.

DECISION

Because the 2000 amendments to Minn. Stat. § 176.061 (2000), the subrogation provisions of the Workers’ Compensation Act, have effectively redefined the measure of recovery in workers’ compensation subrogation actions as the full amount of benefits paid and payable to the employee, appellant is entitled to the $104,319 paid to employee Eugene Bodeker’s surviving spouse.

Reversed and remanded.


text:
    CITY OF DULUTH, Respondent, v. DULUTH POLICE LOCAL, Respondent, and The Duluth News Tribune, a Division of Northwest Publications, Inc., a Delaware corporation, Appellant.
    No. A04-1372.
    Court of Appeals of Minnesota.
    Dec. 28, 2004.

      Bryan F. Brown, Duluth City Attorney, M. Alison Lutterman, Deputy City Attorney, Duluth, MN, for respondent City of Duluth.
    Thomas F. Andrew, Aaron R. Bransky, Brown, Andrew Signorelli, P.A., Duluth, MN, for respondent Duluth Police Local.
    Joseph J. Roby, Jr., Johnson, Killen Seiler, P.A., Duluth, MN, for appellant.
    Considered and decided by TOUSSAINT, Chief Judge, Presiding; SHUMAKER, Judge; and HALBROOKS, Judge.
   OPINION

GORDON W. SHUMAKER, Judge.

Appellant newspaper challenges the partial final judgment granting a protective order for an arbitrator’s award sustaining a grievance by a discharged police officer and reinstating him to his position, contending that the information is public data under Minn.Stat. § 13.43, subd. 2(a)(5) (2000), because the arbitrator’s award is a final disposition under Minn.Stat. § 13.43, subd. 2(b) (2002). We reverse.

FACTS

On February 24, 2003, the city of Duluth suspended one of its police officers with pay pending investigation into his alleged criminal conduct. The city discharged the officer on June 9, 2003, and, on the same day, respondent Duluth Police Union filed a grievance. An arbitrator heard the matter, sustained the grievance, and reinstated the officer to his position on November 20, 2003.

The Duluth News Tribune sought a copy of the arbitration award from the city. After obtaining an advisory opinion from the Commissioner of Administration that the award was private data in that no disciplinary proceeding occurred because the arbitration award did not result in a sanction to the officer, the city declined to make the award accessible to the public.

The city filed a petition in district court to vacate the award under Minn.Stat. § 572.19 (2002) and moved for a protective order. Appellant News Tribune intervened and moved for an order to compel the city to allow it to inspect and copy the award. The district court granted a protective order, denied the News Tribune’s motion, and entered partial final judgment pursuant to Minn. R. Civ. P. 54.02. This appeal followed.

ISSUES

I. Can respondents challenge an adverse decision by the district court without filing a notice of review?

II. Did the district court err in ruling that the arbitrator’s award was private data because it was not a “final disposition” under Minn.Stat. § 13.43, subd. 2(b) (2002)?

ANALYSIS

Construction of the Minnesota Government Data Practices Act is a question of law reviewed de novo. Navarre v. S. Washington County Sch., 652 N.W.2d 9, 22 (Minn.2002).

I.

The data practices act regulates access to government data, which is defined as “all data collected, created, received, maintained or disseminated” by a political subdivision. Minn.Stat. §§ 13.01, subd. 3, 13.02, subd. 7 (2002). It applies to all political subdivisions, including statutory or home-rule charter cities. Minn.Stat. §§ 13.01, subd. 1, 13.02, subd. 11 (2002). It is undisputed that the city is a political subdivision governed by the data practices act.

Generally, there is “a presumption that government data are public and accessible by the public for both inspection and copying,” unless explicitly classified otherwise. Minn.Stat. § 13.01, subd. 3; Annandale Advocate v. City of Amandole, 435 N.W.2d 24, 27 (Minn.1989). Personnel data, however, are private unless they fit within a category of information specifically identified as public. Minn.Stat. § 13.43, subds. 2, 4 (2002); Annandale Advocate, 435 N.W.2d at 27. We therefore turn to the section in the data practices act addressing personnel data.

Personnel data are “data on individuals collected because the individual is or was an employee of’ a political subdivision. Minn.Stat. § 13.43, subd. 1 (Supp.2003). Here, it is undisputed that the arbitration award is personnel data; at issue is whether the arbitration award falls within the category of personnel data deemed public. The data practices act provides that public data includes “the final disposition of any disciplinary action together with specific reasons for the action and data documenting the basis of the action.... ” Minn.Stat. § 13.43, subd. 2(a)(5).

The first issue under this subdivision is whether a disciplinary action occurred. The Commissioner of Administration gave the opinion that no disciplinary action occurred because the officer was reinstated. The district court ruled that the term disciplinary action “refers to the entire process that begins with a complaint against an employee, and not merely the sanction which may result from such a complaint.” It concluded that where a complaint was made against the officer, culminating in arbitration and subsequent reinstatement, a “disciplinary action” occurred, regardless of the fact that at that stage, no sanction was in effect.

Appellant contended that the district court properly ruled that a disciplinary action occurred. Respondent City of Duluth and respondent Duluth Police Local both argued that the district court erred and that no disciplinary action occurred because the officer was reinstated and, ultimately, no sanction resulted. Neither respondent, however, filed a notice of review.

A respondent may obtain review of a judgment or order that may adversely affect it by filing a notice of review. Minn. R. Civ.App. P. 106. Even if the district court decision is ultimately in favor of respondent, the respondent must file a notice of review to challenge that portion of the decision decided adversely against the respondent. Arndt v. Am. Family Ins. Co., 394 N.W.2d 791, 793 (Minn.1986); Kolby v. Northwest Produce Co., 505 N.W.2d 648, 653 (Minn.App.1993). Because the policy behind rule 106 is “to avoid piecemeal decisions and allow an appellate court to resolve all issues in one proceeding,” the supreme court has deemed this “the exact situation Rule 106 is intended to cover.” Arndt, 394 N.W.2d at 793. Consequently, “[t]his court will not consider a challenge to issues decided adversely to a respondent when the respondent has not filed a notice of review.” Kolby, 505 N.W.2d at 653. The district courts decision that a disciplinary action occurred will adversely affect respondents once a final disposition has occurred pursuant to Minn.Stat. § 13.43, subd. 2(b) (2002), because that is when the data are deemed to be public. Accordingly, respondent’s failure to file a notice of review precludes their challenge to the district court’s adverse determination that a disciplinary action occurred. Because respondents did not file a notice to obtain review of the portion of the decision that was decided adversely to them, namely, that a disciplinary action occurred, they may not obtain review of the decision on appeal.

II.

The primary issue before this court, then, is whether the district court erred in ruling that, because the arbitration award was not a “final disposition,” the information contained in it was not yet public data.

The purpose of interpretation and construction of a statute “is to ascertain and effectuate the intention of the legislature.” Minn.Stat. § 645.16 (2002). To do so, the court will consider the plain meaning of the statute. Navarre, 652 N.W.2d at 29; Minn.Stat. § 645.08 (2002). The statute provides three definitions of “final disposition” covering three situations, only one of which applies here:

For purposes of this subdivision, a final disposition occurs when the state agency, statewide system, or political subdivision makes its final decision about the disciplinary action, regardless of the possibility of any later proceedings or court proceedings. In the case of arbitration proceedings arising under collective bargaining agreements, a final disposition occurs at the conclusion of the arbitration proceedings or upon the failure of the employee to elect arbitration within the time provided by the collective bargaining agreement. Final disposition includes a resignation by an individual when the resignation occurs after the final decision of the state agency, statewide system, political subdivision, or arbitrator.

Minn.Stat. § 13.43, subd. 2(b) (2002) (emphasis added).

In addressing whether the arbitration award was a final disposition, the district court first cited the supreme court’s statement that a final disposition is the “last and final determination of the matter.” Annandale Advocate, 435 N.W.2d at 28. Because the arbitrators award and the district court’s decision could be appealed, the district court ruled that the arbitration award was not a final disposition. But at the time that Annandale Advocate addressed the issue, the data practices act did not yet include the definition of final disposition; the provisions defining final disposition were enacted in 1990, the year after Annandale Advocate was decided. 435 N.W.2d at 24; 1990 Minn. Laws ch. 550, 1. Consequently, we must look at the language of the statutory provision defining final disposition for guidance.

The first and third definitions in Minn. Stat. § 13.43, subd. 2(b), were apparently enacted in response to the supreme court’s ruling in Annandale Advocate, 435 N.W.2d at 28-29, as to the meaning of final disposition in those specific circumstances. While the parties use the language in those definitions in support of their arguments as to the meaning of the definition at issue here, we do not find those arguments conclusive.

Instead, we consider the plain meaning of the statute. Appellant argues that under the plain meaning of the statute, the “conclusion of the arbitration proceedings” constitutes the final disposition, regardless of who won or lost and whether judicial review is available. Minn.Stat. § 13.43, subd. 2(b). It cites a recent case of this court which, in the context of determining the applicability of a statute of limitations, distinguished judicial proceedings from arbitration proceedings, concluding that “suit” “refers specifically to established and traditional judicial proceedings, while arbitration involves the resolution of disputes by non-traditional means.” Vaubel Farms, Inc. v. Shelby Farmers Mut., 679 N.W.2d 407, 412 (Minn.App.2004) (holding that “because suit does not include arbitration North Star cannot claim that a two-year limit for suits bars arbitration”); see also U.S. Fid. Guar. Co. v. Fruchtman, 263 N.W.2d 66, 71 (Minn.1978) (referring to “judicial proceedings to stay or compel arbitration”). Appellant also argues that the entire disciplinary process is a matter of legitimate public interest squarely within the ambit of the data practices act. See Demers v. City of Minneapolis, 468 N.W.2d 71, 74 (Minn.1991) (holding “[tjhere is a compelling need for public accountability, particularly with law enforcement agencies”).

Respondent City of Duluth, however, argues that an arbitration proceeding is not final until the parties have exhausted all procedural remedies under the statute. It notes that the parties to the arbitration proceeding may petition the district court to vacate the award under Minn.Stat. § 572.19 (2002). Although Minn.Stat. § 13.43, subd. 2(b), does not define “conclusion of the arbitration proceedings,” respondent argues that the legislature must have been aware that the entire arbitration process includes appellate remedies available to the parties. It contends that if the legislature had intended to exclude judicial review of the arbitrators award from the meaning of final disposition, it could have said so explicitly. Further, the city argues that this reading is consistent with the legislatures intent to maintain the confidentiality of personnel data until the dispute is finally concluded, to protect the privacy interests of the employee. Annandale Advocate, 435 N.W.2d at 29.

Respondent Duluth Police Local argues that, in any event, the final disposition consists of the facts that the grievance was sustained and that no discipline was imposed because the complaint was not found credible; it should not include the substance of the arbitration award.

In the end, we must rely on the plain language of the statute, which provides that “a final disposition occurs at the conclusion of the arbitration proceedings.” Judicial review is not an arbitration proceeding. See Vaubel Farms, 679 N.W.2d at 412. While, as the statutory definition shows, “final disposition” can mean many things, we must conclude from the clear language of the statute that, under these circumstances, the arbitration award is the final disposition. Consequently, under Minn.Stat. § 13.43, subd. 2(a)(5), the personnel data are public and the protective order that kept the data private is reversed.

DECISION

The decision of the district court holding that the personnel data are not yet public because there has been no final disposition of the arbitration award and granting a protective order is reversed.

Reversed.

      . This court addresses the issue of whether a final disposition occurred in issue two of this opinion.

      . Here, the city petitioned the district court to vacate the arbitrators award and the district court denied the petition. The city appealed, and this court dismissed the appeal as taken from a nonappealable order, but noted that a proper appeal could be taken from an order or judgment confirming the award. City of Duluth v. Duluth Police Local, No. A04-1443 (Minn.App. Sept. 14, 2004) (order).