author: HALBROOKS, Judge AMUNDSON, Judge

text:
    Richard BUCK as trustee for the heirs and next-of-kin of Rhonda Sue Buck, Deceased, Appellant, v. Harrison L. FREEMAN, d/b/a Freeman Fireworks Forever, et al., Kathleen Billington, Minnesota Workers' Compensation Assigned Risk Plan, et al., Respondents.
    No. C9-00-910.
    Court of Appeals of Minnesota.
    Dec. 12, 2000.

      Mark M. Walbran, Walbran, Furness & Leuning, Owatonna, MN, for appellant.
    Paul A. Banker, Robert W. Kettering, Jr., Arthur, Chapman, Kettering, Smetak & Pikala, P.A., Minneapolis, MN, for respondents Freeman, et al.
    Peter C. Sandberg, Dunlap & Seeger, Rochester, MN, for respondent Billington.
    Charles E. Lundberg, Todd J. Thun, Bassford, Lockhart, Truesdell & Briggs, P.A., Minneapolis, MN, for respondents Minnesota Workers’ Compensation Assigned Risk Plan, et al.
    Considered and decided by KALITOWSKI, Presiding Judge, AMUNDSON, Judge, and HALBROOKS, Judge.
   OPINION

HALBROOKS, Judge

Rhonda Sue Buck, an employee of Freeman Fireworks Forever, was killed in an explosion at work. The trustee of her heirs brought a negligence action against the Minnesota Workers’ Compensation Assigned Risk Plan, contending it breached its statutory duty to conduct on-site safety inspections, but the district court ruled the plan was immune from suit under Minn. Stat. § 176.031 (1998). Appellant also sued respondent-owner, contending that as a working employer, he was subject to liability as a grossly negligent coemployee under Minn. Stat § 176.061, subd. 5 (1998). The district court granted summary judgment for Freeman on this claim, holding that the employer may not be found to be a grossly negligent coemployee. This is appeal is taken from the final partial judgment. We affirm.

FACTS

Decedent Rhonda Sue Buck worked for respondent Harrison L. Freeman, doing business as Freeman Fireworks Forever. She was Freeman’s only employee. On April 19, 1996, Freeman mixed flash powder, which decedent then drew from a metal bucket with a metal-handled pot to place into shell casings. An explosion occurred, resulting in Buck’s death. Although the cause of the explosion is not certain, it may have been the result of friction from the metal barrel and metal-handled pot or from static electricity generated by decedent’s snowsuit.

As trustee for the heirs and next-of-kin of decedent, appellant Richard Buck sued decedent’s former employer alleging that Freeman was liable as a grossly negligent coemployee. The district court granted Freeman’s motion for summary judgment, holding that the workers’ compensation act (WCA) was the exclusive remedy against the employer. Buck also sued Freeman’s compensation insurer, the Minnesota Workers’ Compensation Assigned Risk Plan and its related insurers and administrators (MWCARP or insurers) in negligence based on the failure to inspect Freeman’s premises as required by Minn.Stat. § 79.253, subd. 2 (1998). The district court dismissed the claim for lack of subject-matter jurisdiction because the insurers were immune from suit under Minn. Stat. § 176.031 (1998). The district court further held that Minn.Stat. § 79.253, subd. 2, does not create a private cause of action for failure to inspect. An amended judgment was entered April 4, 2000, pursuant to a stipulation under Minn. R. Civ. P. 54.02.

ISSUES

1. Is an employer who performs workplace duties subject to liability as a coemployee, or does the workers’ compensation act provide the exclusive remedy for work-related injuries and fatalities?

2. Are compensation insurers subject to negligence liability or are they protected by the exclusive remedy provisions of Minn.Stat. § 176.031 (1998)?

3. Does Minn.Stat. § 79.253, subd. 2 (1998), create a private cause of action against compensation insurers?

ANALYSIS

On appeal from summary judgment, we review the record to determine whether there are any genuine issues of material fact and whether the district court erred in applying the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). We “must view the evidence in the light most favorable to the party against whom judgment was granted.” Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993).

1. Liability of Employer as Grossly Negligent Coemployee

The exclusive remedy of employees against an employer for injuries sustained in workplace accidents is found within the WCA. Minn.Stat. § 176.031 (1998). This statute guaranteed decedent compensation for any injuries sustained at work and, in exchange, she forfeited her common law rights against Freeman. See Wicken v. Morris, 527 N.W.2d 95, 99 (Minn.1995) .(describing the reciprocal concessions made by employer and employees under the WCA). On the other hand, an employee may be held liable for the personal injuries of a coemployee if the injury is a result of gross negligence or intentional act. Minn.Stat. § 176.061, subd. 5(c) (1998); Dawley v. Thisius, 304 Minn. 453, 456, 231 N.W.2d 555, 557 (1975).

Buck argues that “immunity attaches to conduct not status,” and, therefore, in participating in the activities of a coemployee, Freeman is subject to liability in the same manner as a coemployee. No statute or caselaw directly supports the notion that active performance of duties in the workplace results in abrogation of the employer’s immunity under the exclusive remedy provision of the WCA. Cf. Dawley, 304 Minn. at 456, 231 N.W.2d at 557-58 (establishing that in limited circumstances an employee may be held liable for gross negligence against a coemployee); Wicken, 527 N.W.2d at 98-99 (manager may be liable as coemployee); Stelling v. Hanson Silo Co., 563 N.W.2d 286, 290 (Minn.App.1997) (finding a shareholder of a corporation liable as a coemployee). We will not re-interpret the WCA to narrow employer immunity protections.

We conclude the district court did not err in holding that Freeman, as decedent’s employer, is immune on the negligence claim and is entitled to the protection of the exclusive remedy provisions of the WCA.

2. Dismissal of Action Against MWCARP

A. Insurer’s Immunity under Workers’ Compensation Act

Buck contends that the district court erred in dismissing his claim against MWCARP. The district court determined that it had no subject-matter jurisdiction over the claim because “compensation insurers would be entitled to immunity [under the WCA] since they are subject to the burdens” of the act. If the WCA provides the employee’s exclusive remedy, the district court has no jurisdiction. McGowan v. Our Savior’s Lutheran Church, 527 N.W.2d 830, 833 (Minn.1995). Whether the compensation insurers fall under the exclusive remedy provisions of WCA is a question of statutory interpretation, which is reviewed de novo. Frost-Benco Elec. Ass’n v. Minnesota Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn.1984).

This court has never considered whether the immunity provision of the WCA extends to the acts of an insurer. The plain language of the statute does not include insurers as employers. But in Konken v. Oakland Farmers Elevator Co., 425 N.W.2d 302 (Minn.App.1988), review denied (Minn. Aug. 24, 1988), in considering whether a third party was entitled to the protection of the exclusivity provisions of the WCA, this court noted that

[a] third person, other than the employer’s compensation insurer, is subject to no burdens of the act and consequently, under the scheme of reciprocity, is entitled to no benefits of the act.

Id. at 305 (quoting Modjeski v. Atwell, Vogel & Sterling, Inc., 309 F.Supp. 119, 121 (D.Minn.1969) (emphasis added)). Furthermore, in Modjeski, the court noted that

[t]here is within the statute a clear pattern to create an inseparable identity between the employer and his insurer insofar as compensation and medical benefits for the injured party are concerned.

Modjeski, 309 F.Supp. at 122. In coming to its conclusion, the court in Modjeski relied on several provisions of the WCA in which insurers and employers are treated similarly. Id. at 121-22. Like the courts in Modjeski and Konken, we conclude that a reasonable reading of the statute results in compensation insurers being protected by the exclusive remedy provisions of the WCA. See Heaslip v. Freeman, 511 N.W.2d 21, 22 (Minn.App.1994), review de nied (Minn. Feb. 24, 1994) (in statutory interpretation, a reviewing court must “look first to the specific statutory language and be guided by its natural and most obvious meaning”).

Because insurers are subject to the burdens of the WCA, they are also entitled to the benefits of the exclusive remedy provisions of the WCA. Therefore, the district court did not err in dismissing Buck’s action against the insurers for lack of subject-matter jurisdiction.

B. Private Cause of Action under Minn.Stat. § 79.253, subd. 2 (1998)

Buck contends, in the alternative, that the district court erred in dismissing the action against the MWCARP because Minn.Stat. § 79 .253, subd. 2, establishes a duty of inspection and creates a private cause of action not barred by the exclusivity provisions of the WCA. As a result, Buck argues, the failure to inspect Freeman’s premises gives rise to a negligence claim.

Statutes do not give rise to a civil cause of action unless the liability is explicit or clearly implicated. Semrad v. Edina Realty, Inc., 493 N.W.2d 528, 532 (Minn.1992). The plain language of Minn.Stat. § 79.253, subd. 2, does not explicitly create a cause of action and, therefore, we must decide if one is clearly implied.

There is generally a reluctance on the part of the courts to imply a private right of action. Hoppe by Dykema v. Kandiyohi County, 543 N.W.2d 635, 638 (Minn.1996); Haage v. Steies, 555 N.W.2d 7, 8 (Minn.App.1996) (“Principles of judicial restraint weigh against recognizing statutory rights of action that are not clearly expressed or implied by the legislation.”). In determining whether a private cause of action may be implied, this court must consider

(1) whether appellant belongs to the class for whose benefit the statute was enacted; (2) whether the legislature indicated an intent to create or deny a remedy; and (3) whether implying a remedy would be consistent with the underlying purpose of the [statute].

Flour Exch. Bldg. Corp. v. State, 524 N.W.2d 496, 499 (Minn.App.1994), review denied (Minn. Feb. 14, 1995).

“The purpose of the assigned risk plan is to provide workers’ compensation coverage to employers rejected by a licensed insurance company.” Minn.Stat. § 79.252, subd. 1 (1998). The benefited class, therefore, is employers rejected by the voluntary insurance market. The purpose of the statute is not to establish safety standards or to protect employees from harm, but rather to provide them with compensation insurance, should an accident occur. Implying a cause of action based upon a failure to inspect runs counter to the statute’s purposes.

Here, the legislature did not expressly or clearly imply a private cause of action. An implied remedy would be inconsistent with the purpose of the statute. We, therefore, hold that the district court did not err in finding that no cause of action exists under Minn.Stat. § 79.253, subd. 2.

DECISION

Because an employer is immune from suit under Minn.Stat. § 176.031 (1998), and the performance of duties does not transform an employer into a coemployee for the purposes of the WCA, we affirm the dismissal of the action against respondent Freeman. Furthermore, because Minn. Stat. § 79.253, subd. 2 (1998), does not create a private cause of action, the compensation insurers retain the exclusive remedy protections of Minn.Stat. § 176.031.

Affirmed.

AMUNDSON, Judge

(concurring in part, dissenting in part)

I. Common Law Remedy As Affected By Statute

The majority has crafted a well-reasoned affirmance of the district court’s actions. I concur with much of its logic, but have reservations about not applying Minnesota’s own exclusive remedy statute, Minn.Stat. § 176.031 (1998), and Minnesota’s third-party liability statute, Minn.Stat. § 176.061 (1998), as written, but choosing instead to follow what it perceived to be a clear pattern in the statute granting immunity from suit to workers’ compensation insurance carriers. Legislative trends should have no bearing on interpretation of the existing Minnesota statute. The district court and this court should refrain from speculating on what the Minnesota legislature might do, and should apply the statute as written. The Minnesota act does not deprive an employee of the right to sue a person other than the employer. Only the legislature can grant such immunity and it is not apparent it has done so. The cloak of employer immunity should not be extended by implication to cover the Minnesota Workers’ Compensation Assigned Risk Plan (MWCARP) to protect it from suits for its own negligence.

I would reverse the district court. I would further give a more charitable construction to the safety inspection statute, Minn.Stat. § 79.253, subd. 2 (1998), and hold that the MWCARP is not immune from a liability suit. In the alternative, we should remand the claim against MWCARP in order that discovery might proceed and the evidence be developed as to the acts and/or omissions of the MWCARP with respect to its duty to inspect the employer’s premises under Minn. Stat. § 79.253.

Can an employee’s common law right against a third party be taken away by statute through any means other than direct enactment or necessary implication? Rosenfield v. Matthews, 201 Minn. 113, 275 N.W. 698 (1937), reminds us “[wjhere an injury does not fall within the workmen’s compensation act, the common-law remedy is not affected by it.” Id. at 115, 275 N.W. at 699 (citation omitted). Minnesota law does not expressly alleviate the employee’s common law right to assert a negligence claim against any person “other than the employer.” Minn.Stat. § 176.061, subd. 5, the third-party liability provision, provides in relevant part:

If an injury or death for which benefits are payable is caused under circumstances which created a legal liability for damages on the fart of a party other than the employer * * * legal proceedings may be taken by the employee or the employee’s dependents * * * against the other party to recover damages.

(Emphasis added.) A plain reading of the statute grants immunity to the employer and no one else. If the legislature intended to exclude the employer’s compensation insurer from third-party liability, it could have done so. Clearly, MWCARP is a “party other than the employer” subject to suit. We should not impose the words “and its workers’ compensation insurance company” in the third-party liability section to grant immunity to a person where the legislature did not. See Brandt v. Hallwood Management Co., 560 N.W.2d 396, 400 (Minn.App.1997) (reviewing court cannot supply that which the legislature omits or overlooks).

I am especially mindful that statutes in derogation of the common law must be strictly construed. At common law, an employee could sue his employer for negligence. In 1913, that right was taken away by the legislature and the compensation act was substituted. Of necessity, we strictly construe the compensation act. In Donnelly v. Minneapolis Mfg. Co., 161 Minn. 240, 201 N.W. 305 (1924), an employee suffered an industrial disease which was not then among the enumerated diseases covered under the statute. The employer claimed that it was immune from a negligence suit. The court permitted the employee’s common law negligence claim against the employer, holding:

To the extent that the field is not touched by the [workers’ compensation] statute, it must be considered that the legislature intentionally permitted it to remain under the common law so that either party, employer or employee, can resort to such action as it furnishes for the protection of a common law right.

Id. at 242, 201 N.W. at 306. The Donnelly court strictly construed the compensation act, adding:

Courts are not permitted by construction to carry a statute, particularly one in derogation of the common law, beyond its clearly defined scope. It is for the legislature to limit or extend the operation of its enactments and, even though there are no self-contained limitations, it would be judicial legislation to extend a statute beyond its subject matter.

Id. at 245, 201 N.W. at 307, (emphasis added). The rule of strict construction precludes a grant of immunity to the MWCARP where the legislature did not.

The plain language of Minn.Stat. §§ 176.031 and 176.061 clearly and unambiguously grants immunity only to “the employer” and not to the workers’ compensation insurer. While following the plain meaning rule and thereby subjecting the MWCARP to a negligence claim may produce policy questions for the legislature to answer, those questions are not for this court.

II. Statutory Duty and Liability

The safety inspection statute, Minn.Stat. § 79.253, subd. 2, should be accorded a liberal construction because it protects the lives and health of workers. Under the law, a liberal construction is usually accorded statutes that are grounded on humane public policy. Nordling v. Ford Motor Co., 231 Minn. 68, 76-77, 42 N.W.2d 576, 581-82 (1950). The legislative intent here is obvious — to safeguard the lives and limbs of employees working for Minnesota’s employers who have been turned down by commercial carriers having highly unsafe working conditions or whose work is otherwise hazardous.

The majority relies on the Modjeski case, saying:

There is within the statute a clear pattern to create an inseparable identity between the’ employer and his insurer insofar as compensation and medical benefits for the injured employee are concerned.

Modjeski v. Atwell, Vogel & Sterling, Inc., 309 F.Supp. 119, 122 (D.Minn.1969). In coming to its conclusion, the court in Mod-jeski relied on several areas within the Minnesota Workmen’s Compensation Act (WCA) where insurers and employers are treated similarly. Id. at 121-22. Based on the guidance under Modjeski and implications from the statute, the majority holds that a compensation insurer is protected by the exclusive remedy provisions of the WCA. Modjeski, however, is clearly distinguishable. In Modjeski, suit was brought against a workers’ compensation carrier and the inspection company hired by the insurer to inspect the elevator that failed, causing plaintiff decedent’s death. Id. at 120. The issue was whether the compensation carrier could be a third-party tortfeasor against whom an action could be brought under Minn.Stat. § 176.061. Id. at 121. The court denied plaintiffs right to bring an action against the carrier after interpreting the WCA that was in effect in 1969, stating:

The duty alleged to have been violated here is one that is required of the employer — providing a safe place to work. Even given its most liberal reading the complaint does not allege a violation of any additional duty owed by the insurer to the employee.

Id. at 122-23 (citations omitted).

In Modjeski, the plaintiffs theory of recovery was based upon the insurer’s right to inspect the premises contained in the insurance policy. Appellant’s claim here is based upon the duty to inspect imposed on the MWCARP in a statutory provision outside the WCA. Here, appellant alleges a breach of an additional duty owed by the insurer to the employee imposed by the legislature outside of the compensation act, a significant difference. The statutory duty of the MWCARP to conduct safety inspections, exists independently from the right to inspect reserved in its policy.

The mutual relinquishment of rights and liabilities is not transgressed by the imposition of liability upon a compensation carrier for a negligent inspection. With the adoption of the compensation act, the employee surrendered rights to a common law action, and the employer surrendered the defenses of no negligence, contributory negligence, or the negligence of a fellow servant. The workers’ compensation insurance company was not a participant who surrendered claims or defenses.

One of the leading authorities in workers’ compensation law has criticized decisions, such as Modjeski, which shy from imposing liability on a negligent compensation carrier on the theory that the reciprocity concept will be upset, observing:

Nor does it necessarily follow that the carrier should be treated here exactly the same as the employer. The employer assumes compensation burdens in exchange for tort immunity. The carrier assumes compensation burdens in exchange for payment of an insurance premium. In the one respect that is decisive for present purposes, then, their positions are not identical at all.

2 Arthur Larson & Lex K. Larson, Larson’s Workers’ Compensation § 72.96 (rev. ed.1995) (emphasis added).

Finally, of course, Modjeski is not binding on us. No federal district court’s interpretation of a state statute binds this court and is only to be used as persuasive authority. Arizonans for Official English v. Arizona, 520 U.S. 43, 66 n. 21, 117 S.Ct. 1055, 1068, 137 L.Ed.2d 170 (1997); 20 Am.Jur.2d Courts § 169 (1995).

Professor Larson notes that more than 20 appellate courts have concluded that a compensation carrier can be subject to an employee’s third-party suit. Larson, supra, § 72.91. He suggests that each statute must be examined carefully because of the variability of language in the separate compensation acts. Id. at § 72.93. A decision construing a statute which equates a compensation carrier with the employer is of little assistance in construing a statute, such as Minnesota’s, which does not. Cf. Kifer v. Liberty Mut. Ins. Co., 777 F.2d 1325, 1330-31 (8th Cir.1985) (third-party liability section of Arkansas’ act equates carrier with employer thereby immunizing carrier from liability suit). Moreover, Professor Larson, cautions that “it would be rash at this time to announce that this or that is the majority rule.” Larson, supra, § 72.91.

Following an analysis of the decisions on point, Professor Larson suggests that a distinction should be made between a carrier’s function as a payor of benefits and services, on the one hand, and other functions it assumes in the way of direct or physical performance of services related to the act and concludes that for negligent performance of the latter, the carrier should be liable in tort as a “person other than the employer.” Id. at § 72.97.

The supreme court of New York has construed statutory language in its act, which is virtually identical to Minnesota’s act, and held that the workers’ compensation insurer is not the alter ego of the employer entitled to immunity. Cline v. Avery Abrasives, Inc., 96 Misc.2d 258, 409 N.Y.S.2d 91, 96 (1978). The language of New York’s exclusive remedy statute is:

The liability of an employer * ⅜ ⅜ shall be exclusiye and in place of any other liability whatsoever to such employee * ⅜ * on account of such injury or death.

Id. at 93 (cf. MinmStat. § 176.031 which states, “The liability of an employer * * ■ * is exclusive and in the place of any other liability to such employee, * ⅝ * on account of such injury or death.”). The New York court framed the issue as follows:

[T]he question is not whether an injured employee should be permitted to sue his employer’s compensation carrier in common law negligence but, rather, whether the New York legislative intent, as expressed in this state’s Workmen’s Compensation Law, is to cloak the carrier with the employer’s immunity. In short, the decision must be based upon legislative, rather than judicial, policy.

Id, at 94-95.

The court examined the statute and found that the definition of “employer” did not include the insurer, and that the insurer was separately defined. The statute was clear and not ambiguous and, therefore, there was little room for judicial interpretation. The court concluded that the carrier could not be equated with the employer, stating “courts must interpret the statute as it is written and not extend it to what courts think it should be.” Id. at 96 (emphasis added).

The New York court was unpersuaded by the insurer’s threat that it would stop voluntary inspections if it were subjected to third-party suits, observing that the insurer had a financial self-interest to reduce accidents to reduce losses. The Cline court quoted favorably the argument of Professor Larson:

Just how valuable is the insurer’s safety inspection contribution if it is limited, casual, and supplemental? Would an all-or-nothing responsibility really be a bad thing? Might it not be desirable to be able to assume that anyone undertaking safety inspections around a plant will do a complete job and take the responsibility for it?

Id. at 98 (citing Larson, Workmen’s Compensation Insurer as Suable Third Party, 1969 Duke L.J. 1117,1141-42).

The Iowa Supreme Court similarly recognized an employee’s right to maintain a common law negligence action against the compensation insurer for negligent inspection. Fabricius v. Montgomery Elevator Co., 254 Iowa 1319, 121 N.W.2d 361 (1963). In response to the insurer’s argument that it had only the same liability as that of the employer, the court held that an insurer did not enjoy immunity from its own torts. Id. at 365. The Iowa court declined the insurer’s invitation to speculate what the intent of the Iowa legislature was, stating:

In this regard it is the 'policy of this court not to interpret a statute as depriving one of a common law right unless the statute clearly so states. The power to deprive one of a common law action is vested in the legislature under its police power upon declared public policy.

Id. at 366 (citations omitted) (emphasis added); Rosenfield, 201 Minn, at 116, 275 N.W. at 699 (existing common law right is not to be taken away by statute, unless by direct enactment or necessary implication).

The federal district court of North Carolina allowed an employee to sue a compensation carrier for negligent inspection in Smith v. Liberty Mutual Ins. Co., 409 F.Supp. 1211 (M.D.N.C.1976), aff'd, 598 F.2d 616 (4th Cir.1979). The court analyzed the state compensation law and found no language which equated the insurer with the employer and declined to do so, stating:

In considering a question such as the one raised in this case, it is especially important to heed the advice of late Justice Felix Frankfurther:
“One more caution is relevant when admonished to listen attentively to ivhat a statute says. One must also listen attentively to what it does not say.”

Id. at 1217 (quoting Frankfurther, Some Reflections on the Reading of Statutes, 47 Colum L.Rev. 526, 536 (1947)) (emphasis added).

Applying Justice Frankfurther’s admonition to the question of whether or not an injured employee can maintain a common law action for negligence against the employer’s workmen’s compensation carrier, leads to the straightforward and logical conclusion that such a cause of action is permitted under the terms of the North Carolina statute.

Id. at 1217. In this regard, Professor Larson’s observation is helpful:

To say that it is only equitable that the carrier should enjoy the employer’s immunities to the extent he assumes his burdens may appeal to the court’s sense of symmetry and fairness. The only catch is that this is not what the statute says.

Larson, supra, § 72.96 (emphasis added).

      . Minn.Stat. § 176.031 (1998) provides:
      The liability of an employer prescribed by this chapter is exclusive and in the place of any other liability to such employee * * * entitled to recover damages on account of such injury or death.

      . Minn.Stat. § 176.061, subd. 5(c) (1998), describes liability as follows:
      [a] coemployee working for the same employer is not liable for a personal injury incurred by another employee unless the injury resulted from the gross negligence of the coemployee or was intentionally inflicted by the coemployee.
      There is also an exception to the exclusivity provision for an employer's intentional torts, where an employer’s intentional torts are excepted from the exclusivity provision. Boek v. Wong Hing, 180 Minn. 470, 471-72, 231 N.W. 233, 234 (1930). There are no allegations that Freeman’s acts were intentional.

      . In addition, Buck contends that the district court erred by concluding that the form of Freeman's business was not at issue and that "Freeman so dominated the business to be considered the 'employer' no matter what the form of business organization.” If Freeman organized his business as a corporation, Buck argues, the corporate entity would be the employer and Freeman would "clearly be a co-employee” subject to liability. Minn.Stat. § 176.061, subd. 5(c). But, "the party resisting summary judgment must do more than rest on mere averments.” DLH Inc. v. Russ, 566 N.W.2d 60, 71 (Minn.1997). A genuine issue for trial must be established by substantial evidence. Id. at 69-70. In opposing summary judgment, Buck failed to present evidence that Freeman Fireworks Forever had filed for or received corporate status. As the district court noted, there is no evidence that Freeman's business adopted a corporate name as required by Minn.Stat. § 302A.115, subd. 1(b) (1998).

      . Minn.Stat. § 176.011, subd. 10 (1998), defines an employer as
      any person who employs another to perform a service for hire; and includes corporation, partnership, limited liability company, association, group of persons, state, county, town, city, school district, or governmental subdivision.

      . Minn.Stat. § 79.253, subd. 2, states in relevant part:
      The assigned risk plan shall, through persons under contract with the plan, perform on-site surveys of employers insured by the assigned risk plan and recommend practices and equipment to employers designed to reduce the risk of injury to employees.

      . The assigned risk plan is designed for employers otherwise unable to secure coverage in the voluntary insurance market. The statute mandates that the assigned risk plan conduct on-site inspections and recommend safe practices. Id. The statute also includes a priority schedule for inspections. Under the schedule, Freeman's facility had not been inspected by the time of the accident.

      .Buck also asserts that when a statute imposes a duty of protection, and one neglects that duty, common law negligence applies and liability may be imposed. Osborne v. McMasters, 40 Minn. 103, 104-05, 41 N.W. 543, 543-44 (1889). In other words, to violate the statute is to deviate from the standard of care owed to another. Id. In finding the nonperformance of a legal duty actionable, the court in Osborne remarked that the “object [of the statute] is to protect the public against” this type of harm. Id. at 104, 41 N.W. at 543. But here, the object of this statute is not to protect employees, but rather, to provide insurance to employers that could otherwise not obtain it.

      . See Sota Foods, Inc. v. Larson-Peterson & Assocs., Inc., 497 N.W.2d 276 (Minn.App.1993), wherein the court affirmed the denial of summary judgment in favor of an engineering firm performing services on behalf of a municipality where the engineering firm claimed it was protected from suit under the doctrine of discretionary function immunity. The trial court had determined that the engineering firm was an independent contractor and not protected by municipal immunity. On appeal, this court affirmed the denial of the firm's motion for summary judgment, but found that there were material facts in dispute and, therefore, remanded to give the firm the chance to prove that it qualified for the immunity.

      . Kerner v. Employers Mut. Liability Ins. Co., 35 Wis.2d 391, 151 N.W.2d 72, 75-76 (1967).


source: Caselaw Access Project

author: KLAPHAKE, Judge

license: Public Domain

text:
    Michael GORMAN, Petitioner, Appellant, v. STATE of Minnesota, Respondent.
    No. C2-00-618.
    Court of Appeals of Minnesota.
    Dec. 19, 2000.

      Deborah K. Ellis, St. Paul, MN, for appellant.
    Mike Hatch, Attorney General and Susan Gaertner, Ramsey County Attorney, Darrell C. Hill, Assistant County Attorney, St. Paul, MN, for respondent.
    Considered and decided by KLAPHAKE, Presiding Judge, and HARTEN and ANDERSON, Judges.
   OPINION

KLAPHAKE, Judge

Michael Gorman appeals from the district court’s summary denial of his petition for postconviction relief in which he asserts that he is entitled to a new trial on the grounds of newly discovered evidence and violation of discovery rules by the state. Because appellant has presented evidence that raises legitimate questions as to whether he is entitled to a new trial, we reverse and remand to allow the district court an opportunity to hold an evi-dentiary hearing and make findings to support the grant or denial of postconviction relief.

FACTS

Appellant was charged with first-degree manslaughter and second-degree felony murder for the October 1993 death of a man in a St. Paul bar. At his 1994 trial, appellant testified and acknowledged that he threw a punch at the victim, but asserted that he was acting in self-defense. According to appellant’s testimony, he believed that the victim, who was boasting that he had just spent 18 years in prison for a double murder, was threatening appellant with what appellant believed was a gun or other weapon. On direct appeal, this court affirmed the convictions and sentence. State v. Gorman, 532 N.W.2d 229 (Minn.App.1995). The supreme court accepted review of the sentencing issue only and affirmed appellant’s 450-month sentence as a career offender. State v. Gorman, 546 N.W.2d 5 (Minn.1996).

During a subsequent civil action, appellant’s civil attorney discovered that the victim, who had been referred to at appellant’s criminal trial only as “Willie Thomas,” was also known by another name, “Willie Dixon.” After several attempts, an investigator hired by appellant’s current attorney uncovered other evidence about “Willie Dixon,” including two prior convictions in Missouri for murder and St. Paul police reports indicating that in the months immediately preceding his death, the police had arrested or cited Dixon for various crimes, including assault, possession of drugs, and driving under the influence. At least one of these reports referred to “Willie THOMAS, AKA Willie DIXON.” The officer who prepared this report was one of the investigating officers in appellant’s case and testified at appellant’s Rasmussen hearing.

Other evidence discovered by the investigator included a facsimile sent by the St. Paul police department to the medical examiner’s office several days after the victim’s death, in which the department identified the victim as “Dixon, Willie Henry,” alias “Thomas, Willie NMN,” and requested his palm and finger prints. The investigator also discovered a memorandum from a Ramsey County probation officer to a Ramsey County District Court Judge less than two weeks after the victim’s death, in which the officer notified the judge that Willie Dixon, whom the judge had placed on probation in September, “died on October 17th as a result of a bar fight in St. Paul” and that “this matter should be discharged and the file closed at this time.”

On January 11, 2000, appellant filed this petition for postconviction relief, arguing that he is entitled to a new trial because (1) newly discovered evidence, which the state failed to disclose, regarding the victim’s true identity, prior murder convictions, prior assaultive conduct, and prior contacts with St. Paul police, would have enhanced appellant’s credibility at trial and supported his claim of self-defense; (2) the trial court judge should have removed herself for bias because she had authorized wire taps over a period of three years prior to this offense, in connection with ongoing investigations of appellant’s other activities; and (3) trial counsel was ineffective for failing to file a motion to remove the trial court judge, uncover the information regarding the victim’s true identity, and call other available witnesses whose testimony supported appellant’s self-defense claim.

In support of his petition, appellant submitted three affidavits, one from the investigator hired by appellant’s current attorney, another from his attorney, and a third from his trial attorney, who has since died. With these affidavits, appellant submitted the documents discovered by the investigator, including the records of the victim’s 1976 Missouri murder convictions and St. Paul police records.

The state filed an answer to the petition and submitted a memorandum in opposition, arguing that the court may summarily dismiss or deny the petition because appellant has failed to show conclusively that he is entitled to relief. The state submitted no additional documents or affidavits.

On February 10, 2000, the postconviction court summarily denied the petition, finding that appellant’s “claims are without merit.”

This appeal followed.

ISSUE

Did the district court abuse its discretion by summarily denying appellant’s petition without an evidentiary hearing or findings?

ANALYSIS

Minn.Stat. § 590.01, subd. 1 (1998), allows a defendant to seek postconviction relief “to vacate and set aside the judgment * * * or grant a new trial * * * or make other disposition as may be appropriate.” A defendant has the burden to show, by a fair preponderance of the evidence, facts warranting a new trial. Minn. Stat. § 590.04, subd. 3 (1998). This court will not reverse a postconviction court’s decision “absent an abuse of discretion” and will “consider only whether sufficient evidence supports the postconviction court’s conclusions.” Woodruff v. State, 608 N.W.2d 881, 884 (Minn.2000) (citations omitted).

An evidentiary hearing is required in a postconviction proceeding “[ujnless the petition and the files and records of the proceeding conclusively show that the petitioner is entitled to no relief.” Minn.Stat. § 590.04, subd. 1 (1998). At such a hearing, “the petitioner must show that there are substantial facts in dispute and that his version of the events, if true,” entitle him to relief. Doan v. State, 290 Minn. 105, 108-09, 186 N.W.2d 518, 520 (1971) (remanding for postconviction hearing on issue of volun-tariness of confession). Although findings are not always necessary, particularly if the postconviction judge also presided over trial and if the record clearly and conclusively supports the denial of relief, the record should at least reflect that the court considered the merits of the petition. See Scruggs v. State, 484 N.W.2d 21, 25 (Minn.1992).

Appellant has alleged that he is entitled to a new trial because the state failed to disclose material evidence about the victim that would have significantly enhanced appellant’s credibility at trial and supported his claim of self-defense. Under the facts of this case, appellant’s allegations may be analyzed either as a claim of newly discovered evidence or a violation of Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). Because the ultimate standard of materiality applicable to a Brady violation should be more lenient to the defense than the standard applied to newly discovered evidence, we will discuss and analyze appellant’s claims as a Brady violation. See United States v. Bagley, 473 U.S. 667, 680-81,105 S.Ct. 3375, 3382-83, 87 L.Ed.2d 481 (1985); see also State v. Hunt, 615 N.W.2d 294, 299 & n. 6 (Minn.2000) (noting inquiry-under Minnesota Constitution allows for harmless error analysis for undisclosed evidence, “not granting a new trial where the evidence could not in any reasonable likelihood have affected the judgment of the jury”).

In Brady, 373 U.S. at 87, 83 S.Ct. at 1196-97, the Supreme Court held that “suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution.” The state has an affirmative duty to disclose evidence that is favorable and material to the defense. Id. In Minnesota, this duty is embodied in Minn.R.Crim.P. 9.01, subd. 1(6) (prosecutor “shall disclose to defense counsel any material or information within the prosecuting attorney’s possession and control that tends to negate or reduce the guilt of the accused as to the offense charged”).

The obligation to disclose information favorable to the defense extends to members of the prosecution staff, as well as others participating in the investigation or evaluation of the case. Minn.R.Crim.P. 9.01, subd. 1(7) (requiring state to disclose “material and information in the possession or control of members of the prosecution staff and of any others who have participated in the investigation or evaluation of the case”); State v. Williams, 593 N.W.2d 227, 235 (Minn.1999) (whether prosecutors actually knew of evidence not dispositive for Brady purposes; individual prosecutors have duty to learn of any favorable evidence known to others acting on government’s behalf, including the police), cert. denied, 528 U.S. 874, 120 S.Ct. 180, 145 L.Ed.2d 151 (1999).

Thus, a true Brady violation consists of three components: (1) the “evidence at issue must be favorable to the accused, either because it is exculpatory, or because it is impeaching;” (2) “that evidence must have been suppressed by the State, either willfully or inadvertently;” and (3) “prejudice must have ensued.” Strickler v. Greene, 527 U.S. 263, 119 S.Ct. 1936, 1948, 144 L.Ed.2d 286 (1999).

In this case, appellant has unquestionably established the first two components. This evidence was favorable to appellant, to the extent that it would have bolstered his self-defense claim and his credibility. In addition, the authorities in Ramsey County, including the police, the medical examiner’s office, and the probation department, clearly knew of the victim’s other name and prior history. We therefore conclude that the prosecutor had a duty to disclose this evidence to the defense. See Williams, 593 N.W.2d at 235 (where police, including some of same investigators working on case, knew of victim’s past acts of violence, prosecutors had duty to disclose).

The only issue is whether the failure to disclose this evidence prejudiced appellant and denied him a fair trial under Brady. This inquiry involves consideration of whether the evidence would have been admissible at trial and whether there is a “reasonable probability” that it would have made a difference in the result at trial. Although evidence of a victim’s prior bad acts or bad character is generally inadmissible, an exception exists when a defendant claims self-defense. See State v. Bland, 337 N.W.2d 378, 383 (Minn.1983) (evidence of victim’s character admissible to show intent, knowledge, or plan, but not to show that victim acted in conformity with his bad character). Evidence of the victim’s prior bad acts and character would have been admissible to prove appellant’s state of mind at the time he took a swing at the victim, given appellant’s claim that the victim was boasting that he had just been released from prison for a double murder and his claim that he thought the victim was reaching into his pocket for a weapon. Evidence that the victim had just been released from prison also would have been admissible to bolster appellant’s credibility as to what the victim said to him that evening and would have made less convincing the prosecutor’s statements that appellant had fabricated that part of his story. This evidence undisputedly would have been admissible in some form at trial, had defense counsel known of it.

Within the meaning of Brady, “favorable evidence is material * * * if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different.” Kyles v. Whitley, 514 U.S. 419, 433-34, 115 S.Ct. 1555, 1565, 131 L.Ed.2d 490 (1995) (quotation omitted). A different result is “reasonably probable” when the government’s evidentiary suppression “undermines confidence in the outcome of the trial.” Id. at 434, 115 S.Ct. at 1566 (quotation omitted).

Where evidence is merely “collateral and speculative,” the state’s failure to disclose it may not undermine our confidence in the outcome of a trial. See Williams, 593 N.W.2d at 235. The evidence here, which consisted of prison and police records, was not speculative. Nor does this evidence appear collateral to appellant’s case: it was directly relevant to appellant’s credibility and self-defense claim, and easily could have led the defense to discover other witnesses or evidence favorable to appellant. See State v. Zeimet, 310 N.W.2d 552, 553 (Minn.1981) (new trial necessary, where defendant convicted of third-degree murder for setting fire to house and killing two children, where prosecutor failed to disclose information obtained from children’s grandmother regarding possible culpability and involvement of mother in children’s deaths). Finally, this evidence might have changed appellant’s decision to testify, thus limiting the prosecution’s ability to cross-examine him and impeach his credibility. As this court noted on direct appeal, the state’s case was “weak,” and, up until the point that appellant testified, the testimony “generally showed a confused confrontation, with a number of people near [the victim and] no unequivocal eyewitness testimony that it was [appellant] who threw the first punch.” Gorman, 532 N.W.2d at 234.

Because it appears “reasonably probable” that this evidence may have made a difference in the outcome of appellant’s trial, appellant’s right to a fair trial may have been violated. See State v. Moore, 493 N.W.2d 606, 609 (Minn.App.1992) (defendant entitled to new trial, where state commits prejudicial discovery violation by failing to inform defense of pretrial statement by victim that would have given defendant reason to abandon consent defense that he had decided to raise at trial), review denied (Minn. Feb. 12, 1993). Although appellant argues that we should reverse outright and grant him a new trial, we conclude that a remand is more appropriate to allow the district court judge, who was also the trial court judge in this case, an opportunity to hold an evidentiary hearing and determine whether appellant was prejudiced and denied a fair trial by the state’s failure to disclose this evidence. See Bagley, 473 U.S. at 684, 105 S.Ct. at 3385 (remanding case to Court of Appeals to determine “whether there is a reasonable probability that, had the [evidence] been disclosed to the defense, the result of the trial would have been different”).

Finally, we briefly address the other, alternative bases for relief cited by appellant in his postconviction petition. In one, he alleges that the trial court judge was biased because she had been involved in authorizing wire taps against him. At his sentencing hearing, however, appellant acknowledged that he knew of the judge’s involvement. Because this issue was known at the time of appellant’s direct appeal and not raised, appellant is precluded from raising it in this postconviction proceeding. See Case v. State, 364 N.W.2d 797, 799 (Minn.1985) (citing State v. Knaffla, 309 Minn. 246, 252, 243 N.W.2d 737, 741 (1976)).

Another basis raised by appellant for postconviction relief is ineffective assistance of trial counsel. To establish an ineffective assistance of counsel claim, a petitioner must demonstrate that his counsel’s representations fell below an objective standard of reasonableness. King v. State, 562 N.W.2d 791, 795 (Minn.1997). Appellant criticizes his attorney for failing to seek the trial judge’s removal and failing to call additional eyewitnesses to support his self-defense claim. These are generally matters of trial strategy, upon which this court will not pass judgment. See Gustafson v. State, 477 N.W.2d 709, 713 (Minn.1991). Appellant has failed to allege facts that, if proven true, would be sufficient to support his claim for ineffective assistance of counsel.

DECISION

The petition, files, and record fail to prove conclusively that appellant is entitled to no relief on his claim that the prosecutor failed to disclose evidence that the victim was also known by another name, had a prior criminal record in another state, and had been involved in several other incidents with police in the months immediately preceding his death. We therefore reverse the district court’s summary denial of appellant’s petition for post-conviction relief and remand for an eviden-tiary hearing on the issue of whether the prosecutor’s failure to disclose this evidence denied appellant a fair trial.

Reversed and remanded.

      . To prevail on a claim for a new trial based on newly discovered evidence, a defendant must establish: (1) at the time of trial, the evidence was not within the defendant’s or his attorney’s knowledge; (2) the evidence could not have been discovered through the exercise of due diligence before trial; (3) the evidence is material; and (4) the granting of a new trial "probably” would produce a different result. Dale v. State, 535 N.W.2d 619, 622 (Minn.1995) (postconviction court did not abuse its discretion by denying petition, where newly discovered evidence was cumulative and merely provided further support for defendant's claim that victim used crack cocaine, which was presented at trial through testimony of at least three defense witnesses and rejected by jury). We are convinced that appellant has satisfied the first three requirements. Thus, the only issue under a newly discovered evidence analysis would be whether a new trial "probably” would produce a different result.


author: SANDSTROM, Justice.

text:
    2000 ND 210
    NODAK MUTUAL FARM BUREAU, Plaintiff and Appellee, v. Jason KOSMATKA, Holly Anderson, Nathan Lubarski, Defendants and Appellees, and James E. Nelson, individually, and Kathleen F. Nelson, individually, and as the personal representative of the estate of Matthew E. Nelson, Defendants and Appellants, and Jason Kosmatka, Third-Party Plaintiff, v. Scott Johnson, Third-Party Defendant.
    No. 20000213.
    Supreme Court of North Dakota.
    Dec. 7, 2000.

      Paul R. Oppegard and Troy A. Wolf, Smith Bakke Hovland & Oppegard, Moor-head, MN, for plaintiff and appellee; submitted on brief.
    Robert G. Hoy, Ohnstad Twichell, P.C., West Fargo, ND, for defendant and appel-lee and third-party plaintiff Jason Kosmat-ka. Jeffrey D. Pederson, Wadena, MN, for defendant and appellee Holly Anderson. Robert M. Albrecht, Brink, So-bolik, Severson, Malm & Albrecht, P.A., Hallock, MN, for defendant and appellee Nathan Lubarski. Submitted on brief.
    H. Patrick Weir, Jr., Lee Hagen Law Office, Ltd., Fargo, ND, for defendants and appellants; submitted on brief.
   SANDSTROM, Justice.

[¶ 1] James and Kathleen Nelson appeal from an East Central Judicial District Court order granting partial summary judgment determining the Nelsons were not allowed to receive funds interpleaded by Nodak Mutual Farm Bureau (“No-dak”). Concluding the district court improvidently granted certification under Rule 54(b), N.D.R.Civ.P., we dismiss the appeal.

I

[¶ 2] Jason Kosmatka, Nathan Lubarski, and Holly Anderson were passengers in a vehicle driven by Scott Johnson. Johnson’s vehicle collided with a vehicle driven by James Nelson. Nelson’s son, Matthew Nelson, a passenger in his father’s vehicle, was killed. Kosmatka, Lubarski, and Anderson were injured. A jury awarded the Nelsons $610,000 plus $200,000 for the pain and suffering endured by Matthew Nelson before his death. Johnson was insured under a Nodak policy with bodily injury limits of $50,000 for “each person” and $100,000 for “each occurrence.” No-dak paid the Nelsons $50,000 under the “per person” provision, and the Nelsons sought the remaining $50,000 “occurrence” limit. Due to the possible claims of Kos-matka, Lubarski, and Anderson, Nodak in-terpleaded the remaining $50,000 of Johnson’s policy limits by depositing those funds with the district court.

[¶ 3] Kosmatka sought partial summary judgment to establish the Nelsons were not entitled to collect any of the deposited funds. The district court granted Kosmat-ka’s motion for partial summary judgment and granted a request for Rule 54(b) certification allowing immediate appeal to this Court. The Nelsons have timely appealed. The district court had jurisdiction under N.D.C.C. § 27-05-06. This Court has jurisdiction under N.D. Const. art. VI, § 6, and N.D.C.C. § 28-27-01.

II

[¶ 4] If a trial court expressly determines there is no just reason for delay, Rule 54(b), N.D.R.Civ.P., allows entry of “final judgment adjudicating fewer than all claims or the rights and liabilities of fewer than all parties.” Gessner v. City of Minot, 529 N.W.2d 868, 870 (N.D.1995). “We are not bound by a trial court’s determination and we will review a 54(b) certification to determine if the court abused its discretion.” Id. (citing Janavaras v. Nat’l Farmers Union Prop. & Cas. Co., 449 N.W.2d 578, 580 (N.D.1989)).

III

[¶ 5] Rule 54(b) certification is inappropriate when further developments in the trial court may make an issue moot. Bulman v. Hulstrand Constr. Co., Inc., 503 N.W.2d 240, 242 (N.D.1993). Because of our policy against piecemeal appeals, a party seeking intermediate review has the burden of establishing an unusual hardship in order to obtain a Rule 54(b) certification. Id. at 241.

[¶ 6] Kosmatka moved for partial summary judgment and Rule 54(b) certification of final judgment. The district court’s order granting partial summary judgment and Rule 54(b) certification states:

1. The Order for Partial Summary Judgment ... fully adjudicates all of the Nelsons’ claims in this action. The Nelsons have a right, should they desire, to appeal this Court’s Order.... Whether this Court grants Rule 54(b) Certification or not, the Nelsons’ legal issue will reach the Supreme Court only once.
2. This Court’s Order ... excluding the Nelsons from participation in a share of the deposited funds will directly affect the amounts distributed among the other three claimants. Adjudication of those claims without granting this Rule 54(b) Certification is not an economical use of judicial resources as those adjudications would be subject to reversal and readjudication should a post-trial appeal by the Nelsons be successful. This is an appropriate use of Rule 54(b) Certification.

A

[¶ 7] A party seeking Rule 54(b) certification must establish extraordinary circumstances or, absent review, that unusual hardship would occur. Swenson v. Raumin, 520 N.W.2d 858, 859-60 (N.D.1994). In seeking certification, Kosmatka argued in district court that “delay would simply add uncertainty to any apportionment of the proceeds among the remaining defendants.” Further, Kosmatka argued the district court may have to revisit the apportionment if the Nelsons successfully appeal at the conclusion of the entire case. Finally, Kosmatka argued, “[t]he interests of sound judicial administration and judicial economy clearly favor the entry of a final Judgment on this issue at this time.” Our review of the record and the briefs of the parties does not demonstrate extraordinary circumstances or that unusual hardship would occur in the absence of immediate review.

[¶ 8] Trial courts “must consider ‘the strong policy against piecemeal appeals.’” Bulman, 503 N.W.2d at 241. Also, before all claims are resolved, trial courts must “delineate any unusual or compelling circumstances ... requiring judicial review.” Swenson, 520 N.W.2d at 860. There exists no record evidence of hardship or prejudice if review is denied, other than potentially lengthened proceedings in the district court or possible complication in distribution of funds between the parties. Absent evidence of hardship or prejudice, certification was improper.

[¶ 9] Likewise, Rule 54(b) certification is improper when the only perceivable harm is a second trial in the event of reversal. Id. (citations omitted). The district court concluded certification was required because the case “would be subject to reversal and readjudication should a post-trial appeal by the Nelsons be successful.” While judicial economy in the district court might favor a decision by this Court, the possibility that an order of the district court may be appealed and reversed does not warrant a piecemeal appeal when no prejudice or hardship is shown.

B

[¶ 10] This Court is without authority to render advisory opinions, and “Rule 54(b) certification may not be used to circumvent that restriction.” Bulman, 508 N.W.2d at 241 (citing Janavaras, 449 N.W.2d at 581). “We have said that ‘the presence of a unique or complex controlling issue of law on appeal may be a relevant factor for consideration by the trial court.’ ” Id. (citation omitted). Here, the question of whether the Nelsons may share in the deposited funds is unique, and apparently one of first impression. However, if a trial of the claims below obviates the necessity for our review, our decision on the merits becomes purely advisory. Id. at 241M2.

[¶ 11] The Nelsons, who received one-half of the total available insurance proceeds, seek to satisfy a portion of their remaining judgment from the funds deposited with the district court. Apparently, Johnson is incapable of satisfying the Nelsons’ judgment without the insurance. Three additional claimants are competing with the Nelsons for the insurance funds. The record before us does not indicate whether the three remaining claimants have tried their cases, nor does the record indicate the value of the remaining claims or whether they exceed the funds available. Thus, our decision here could become advisory.

[¶ 12] The district court is correct in stating the Nelsons’ legal issue should reach this Court only once. However, because that appeal may not reach us at all, or if it does it may include additional issues not presently before the Court, immediate review is improper.

[¶ 13] Because further developments in the trial court may make this appeal moot, we conclude the district court abused its discretion in granting Rule 54(b) certification. See Gessner v. City of Minot, 529 N.W.2d 868 (N.D.1995); Ingalls v. Glass Unlimited, Inc., 529 N.W.2d 872 (N.D. 1995); and Bulman v. Hulstrand Constr. Co., Inc., 503 N.W.2d 240 (N.D.1993) (dismissing appeals because further developments at trial may render an appeal moot).

IV

[¶ 14] The appeal is dismissed.

[¶ 15] GERALD W. VANDE WALLE, C.J., WILLIAM A. NEUMANN, MARY MUEHLEN MARING, CAROL RONNING KAPSNER, JJ., concur.

      . This Court previously addressed a different aspect of this case in Nelson v. Johnson, 1999 ND 171, 599 N.W.2d 246.


author: KAPSNER, Justice.

text:
    2000 ND 200
    Leonard Lane O'NEILL, Plaintiff and Appellant, v. Jennifer C. O'NEILL, n/k/a Jennifer C. Oster, Defendant and Appellee.
    No. 20000091.
    Supreme Court of North Dakota.
    Dec. 7, 2000.

      Debra K. Edwardson, Edwardson Law Office, Minot, ND, for plaintiff and appellant.
    H. Malcolm Pippin, Nilles Hansen & Davies, Williston, ND, for defendant and appellee.
   KAPSNER, Justice.

[¶ 1] Leonard Lane O’Neill appealed from an order denying his motion for change of custody. We hold O’Neill has presented a prima facie case for modification of custody and we, therefore, reverse and remand for an evidentiary hearing on his motion.

I

[¶ 2] Leonard O’Neill and Jennifer O’Neill, who is now remarried and is known as Jennifer Oster, were married in 1988 and had two daughters. The older child was born August 2, 1990, and the younger child was born September 12, 1993. O’Neill and Oster were divorced in 1996 and, based upon stipulation, Oster received custody of the girls, with visitation for O’Neill. In August 1999, O’Neill filed a motion for change of custody, requesting the district court to award him custody of the girls with visitation for Oster. Both parties filed briefs and affidavits and, thereafter, the trial court entered an order denying the motion for change of custody on the ground O’Neill had failed to present a prima facie case justifying modification.

[¶ 3] The procedure for resolving a motion to modify custody is provided in N.D.C.C. § 14-09-06.6(4):

A party seeking modification of a custody order shall serve and file moving papers and supporting affidavits and shall give notice to the other party to the proceeding who may serve and file a response and opposing affidavits. The court shall consider the motion on briefs and without oral argument or evidentia-ry hearing and shall deny the motion unless the court finds the moving party has established a prima facie case justifying a modification. If a prima facie case is established, the court shall set a date for an evidentiary hearing.

Under this provision the trial court must set a date for an evidentiary hearing only if the moving party presents a prima facie case. In Helbling v. Helbling, 541 N.W.2d 443, 445-46 (N.D.1995), this Court described a prima facie case and the shifting burdens of proof in the context of child support modification:

The plaintiff or moving party generally bears the burden of proof. If the party bearing the burden of proof presents evidence strong enough, if uncontradict-ed, to support a finding in her favor, that party has made a prima facie case. When the party with the burden of proof establishes a prima facie case, “the burden of going forward with the evidence ... shifts to the defendant. If the defendant can impair the prima facie quality of [i.e., rebut] the case against him, the burden [of going forward] returns to the party having the burden of proof.” If the party having the burden of proof establishes a prima facie case, this party will prevail unless the opposing party offers “proof to the contrary.”

(Citations omitted.)

[¶ 4] When a trial court entertains a motion to change custody of children of divorced spouses, the court applies a two-step process to determine (1) whether there has been a significant change of circumstances following the divorce and custody determination, and (2) whether the change of circumstances affects the child in such an adverse way that it requires a change in the existing custody arrangement to further the best interests of the child. In re K.M.G., 2000 ND 50, ¶4, 607 N.W.2d 248.

[¶ 5] A party seeking custody modification under N.D.C.C. § 14-09-06.6(4) is entitled to an evidentiary hearing if the party brings a prima facie case, by alleging, with supporting affidavits, sufficient facts which, if uncontradicted, would support a custody modification in favor of that party. Generally, the opposing party must rebut a prima facie case by going forward with evidence showing the moving party is not entitled to the relief requested. Helbling, 541 N.W.2d at 445—46; see also Bismarck Baptist Church v. Wiedemann Industries, Inc., 201 N.W.2d 434,. 441 (N.D.1972). Where the opposing party presents counter affidavits which conclusively establish that the allegations of the moving party have no credibility or where the movant’s allegations are, on their face, insufficient, even if uncontra-dicted, to justify custody modification, the court, under N.D.C.C. § 14-09-06.6(4), can find the moving party has not brought a prima facie case and deny the motion without an evidentiary hearing.

[¶ 6] In support of his motion for change of custody, O’Neill filed affidavits implicitly alleging the girls’ physical and mental health may be endangered by residing in their mother’s home. O’Neill made specific charges in support of that implicit allegation. O’Neill stated Oster has a history of drug and alcohol abuse and she may be continuing to use alcohol in spite of her addiction to it. O’Neill claims the girls, at ages 7 and 4, respectively, were exposed to pornographic material in the mother’s home and both girls have demonstrated knowledge and sexual behavior that is not age appropriate. O’Neill stated the girls have exhibited some emotional outbursts, such as the older child “hitting herself in the head with her fists and banging her head against the wall,” which are indicative of potential problems in the home environment. O’Neill asserts persons in the community have reported Oster to social services for inadequate supervision of the girls and some of O’Neill’s friends and family have expressed concern the girls are being ignored while Oster is partying and drinking. O’Neill also asserts the older daughter, at age 8, was left at home alone to care for her sister and infant step-brothers while her mother and current husband were running errands.

[¶7] As permitted by § 14-09-06.4(4), and required by N.D.R.Ct. 3.2 to contest the merits of the motion, Oster filed counter affidavits to O’Neill’s allegations, claiming the girls’ health and welfare is not in any danger and they are being well cared for in their mother’s home. Oster asserts O’Neill’s claims are unfounded and present no basis to change custody. The error of the trial court in this instance is to have weighed the conflicting testimony in order to determine that no prima facie case was made by the movant.

Ill

[¶ 8] While Oster ultimately may be correct that O’Neill’s claims are unfounded, we conclude, as a matter of law, O’Neill has presented sufficiently serious allegations, supported by affidavit, to present a prima facie case warranting an evidentiary hearing on his motion. Allegations, supported by affidavit, demonstrating a custodial environment which may be endangering the childrens’ physical or mental health, are sufficient to raise a prima facie case for change of custody, entitling the movant to an evidentiary hearing. See Quarne v. Quarne, 1999 ND 188, ¶ 12, 601 N.W.2d 266. The trial court’s failure to schedule an evidentiary hearing, therefore, was a violation of N.D.C.C. § 14-09-06.6(4) and is reversible error.

[¶ 9] If, after an evidentiary hearing, the court finds O’Neill’s allegations are false and not made in good faith, the court can award costs and reasonable attorney fees against O’Neill under N.D.C.C. § 14-09-06.6.

[¶ 10] The court’s order is reversed and the case is remanded for an evidentiary hearing on the motion for change of custody.

[¶ 11] GERALD W. VANDE WALLE, C.J., DALE V. SANDSTROM, WILLIAM A. NEUMANN, MARY MUEHLEN MARING, JJ., concur.


author: MARING, Justice.

text:
    2000 ND 205
    STATE of North Dakota, Plaintiff and Appellee, v. George James GLEESON, Defendant and Appellant.
    No. 20000084.
    Supreme Court of North Dakota.
    Dec. 7, 2000.

      Wayne D. Goter, Bismarck, ND, for defendant and appellant.
    Cynthia M. Feland, Assistant State’s Attorney, Bismarck, ND, for plaintiff and appellee.
   MARING, Justice.

[¶ 1] George Gleeson appeals from a judgment of conviction entered upon a jury verdict finding him guilty of driving a motor vehicle while his driver’s license privilege was revoked. We affirm the judgment.

I

[¶ 2] George Gleeson’s driver’s license was revoked on October 8, 1998. On July 15, 1999, Gleeson was arrested for driving a motor vehicle while his license privilege was revoked.

[¶ 3] Gleeson made an initial appearance before the trial court following his arrest. During his initial appearance, Gleeson appropriately answered questions regarding his address and his employment history and stated he understood the charge pending against him.

[¶ 4] The trial court scheduled a pretrial conference for September 13, 1999. Glee-son failed to appear at the pretrial conference apparently because he believed his attorney needed more time to prepare his defense. The pretrial conference was rescheduled for October 5, 1999, and Gleeson did appear. Gleeson expressed to the court that his attorney was inadequate and ineffective. As the pretrial conference progressed, however, Gleeson indicated to the court his court-appointed counsel could continue to represent him.

[¶ 5] Gleeson fired his attorney just before trial. A jury trial was held on March 23, 1999. His attorney made the court aware of his dismissal before trial began. Shortly thereafter, Gleeson changed his mind and allowed his attorney to proceed in representing him.

[¶ 6] During trial, Gleeson did not dispute that he was driving a vehicle while his license was revoked. Instead, he asserted an affirmative defense of lack of notice. He claimed the Department of Transportation (“DOT”) failed to give him notice of the order of suspension. Gleeson stated during his testimony, however, that he had received notice of the suspension. His attorney asked Gleeson if he was confused, and Gleeson responded no. His attorney then asked Gleeson if there was anything more he wanted to add to his testimony, and Gleeson testified about the entire incident in a long narrative. Gleeson testified that he never received notice of the DOT hearing revoking his license. The jury returned a guilty verdict on the offense. That same day, Gleeson filed his Notice of Appeal. At no time during or after the trial did either party or the court raise the issue of Gleeson’s competency.

II

[¶ 7] Gleeson contends the trial court erred in not conducting a competency hearing in order to determine if he was competent to stand trial. Gleeson concedes he did not request a competency hearing during trial. He argues, however, that based on his behavior and testimony throughout the proceedings, the trial court should have ordered a competency hearing sua sponte. We disagree.

[¶ 8] Before we will notice an error not brought to the attention of the trial court it must constitute an obvious error affecting the defendant’s substantial rights. State v. Burke, 2000 ND 25, ¶ 16, 606 N.W.2d 108. An error affecting substantial rights must be prejudicial or affect the outcome of the proceedings. State v. Strutz, 2000 ND 22, ¶20, 606 N.W.2d 886. After reviewing the entire record, we conclude the trial court did not err in failing to order a competency hearing sua sponte of the defendant.

[¶ 9] It has long been held the conviction of a mentally incompetent accused is a violation of constitutional due process. Dusky v. United States, 362 U.S. 402, 80 S.Ct. 788, 4 L.Ed.2d 824 (1960). The United States Supreme Court has summarized the test for determining if an accused is mentally competent to stand trial. Id. A defendant is incompetent when he lacks (1) “sufficient present ability to consult with his lawyer with a reasonable degree of rational understanding” or (2) “a rational as well as factual understanding of the proceedings against him.” Dusky, 362 U.S. at 402, 80 S.Ct. 788. This test is essentially codified at section 12.1— 04-04, N.D.C.C., which states: “No person who, as a result of mental disease or defect, lacks capacity to understand the proceedings against the person or to assist in the person’s own defense shall be tried, convicted, or sentenced for .the commission of an offense so long as such incapacity endures.” On appeal, the issue is not whether the defendant was competent to stand trial, but rather whether the failure to hold a competency hearing constitutes a denial of due process. U.S. v. Day, 949 F.2d 973, 982 (8th Cir.1991).

[¶ 10] Our case law states a competency hearing is required once evidence creating a “reasonable doubt” as to a defendant’s competency is raised. State v. Storbakken, 246 N.W.2d 78, 81 (N.D.1976) (stating that such an inquiry is a requirement of the constitutional due process standard enunciated by Pate ). In order to protect these due process rights the United States Supreme Court in Pate v. Robinson, 383 U.S. 375, 385, 86 S.Ct. 836, 15 L.Ed.2d 815 (1966), concluded that when there is a “bona fide” doubt concerning the defendant’s competency, a trial judge must sua sponte conduct a hearing to determine whether the defendant is competent to stand trial. See Day, 949 F.2d at 981 (quoting Drope v. Missouri, 420 U.S. 162, 172, 95 S.Ct. 896, 43 L.Ed.2d 103 (1975) and Pate, 383 U.S. at 385, 86 S.Ct. 836); see also Griffin v. Lockhart, 935 F.2d 926, 929 (8th Cir.1991). The quantum of doubt required to trigger this duty has best been termed “sufficient doubt.” Griffin, 935 F.2d at 929 n. 2.

[¶ 11] “A successful Pate challenge requires a showing that the trial [court] failed to see the need for a competency hearing when, based on the facts and. circumstances known to [the court] at the time, [it] should have seen such a need.” Day, 949 F.2d at 982. The inquiry, therefore, is whether the “trial judge receive[d] information which, objectively considered, should reasonably have raised a doubt about defendant’s competency and alerted him to the possibility that the defendant could neither understand the proceedings or appreciate their significance, nor rationally aid his attorney in his defense.” Lokos v. Capps, 625 F.2d 1258, 1261 (5th Cir.1980). Although there is no set of facts which invariably establishes a sufficient doubt, the United States Supreme Court has focused on three significant evi-dentiary factors: the defendant’s irrational behavior, the defendant’s demeanor before the trial court, and any prior medical opinions on competence to stand trial. Drope, 420 U.S. at 180, 95 S.Ct. 896. The United States Court of Appeals for the Eighth Circuit focuses also on whether trial counsel questioned the defendant’s competency before the court. Day, 949 F.2d at 982. In some circumstances, one of these factors standing alone may be sufficient evidence in determining whether further inquiry is required. Drope, 420 U.S. at 180, 95 S.Ct. 896. Absent contrary indications, a trial court is entitled to presume the defendant is competent. State v. Heger, 326 N.W.2d 855, 858 (N.D.1982).

[¶ 12] The United States Supreme Court in both Pate and Drope held specific factual circumstances gave rise to a sufficient doubt as to the defendants’ competency. In Pate, the defendant had béen convicted of murdering his wife without obvious explanation or motive. 383 U.S. at 376, 86 S.Ct. 836. The testimony at trial revealed that the defendant had a long history of irrational behavior including walking about in a daze, not responding to questions asked, seeing animals, attempting to burn his wife’s clothing, shooting and killing his son, and shooting himself in the head. Pate, 383 U.S. at 378-83, 86 S.Ct. 836. In Drope, the defendant with four of his acquaintances forcibly raped his wife. 420 U.S. at 165, 95 S.Ct. 896. His irrational behavior included rolling down the stairs when he did not get his way, attempting to choke his wife, the gang rape, and other strange abuses of his wife. Drope, 420 U.S. at 165-66, 95 S.Ct. 896. Furthermore, the defendant shot himself in the stomach before his second day of trial. Id. Under these circumstances, the United States Supreme Court concluded there was sufficient doubt as to the defendants’ competency and failure of the respective judges to conduct a competency hearing denied the defendants of their right to a fair trial.

[¶ 13] In the instant case, there is no similar evidence in the record which would have raised a sufficient doubt regarding Gleeson’s competence. Gleeson claims he was not able to assist his attorney in his own defense because he did not tell his attorney he had notice of the suspension order. Gleeson’s testimony at trial that he had notice of the suspension order came as a surprise to both his attorney and the court. The fact that Gleeson presented surprise testimony at trial, however, is not evidence in and of itself which establishes a sufficient doubt as to his competency to stand trial. Moreover, our Court has stated mental competency does not require the defendant to give perfectly consistent testimony or to be a convincing liar. State v. VanNatta, 506 N.W.2d 63, 68 (N.D.1993). Thus, a sufficient doubt as to competency is not raised simply because Gleeson’s testimony was not consistent with his defense nor because he failed to lie regarding the lack of notice.

[¶ 14] The fact that he did not understand his own defense is also of little significance. In September of 1998, Glee-son was arrested for driving under the influence of alcohol. Subsequently, the Department of Transportation administratively revoked his driver’s license. This case involves a collateral attack on the administrative determination made by the Department to suspend his driver’s license. At trial Gleeson contended his suspension was improper because he did not have notice of it. Gleeson, however, took the stand and testified that he had notice of the suspension, but he did not have notice of the hearing of the suspension. Apparently, Gleeson incorrectly believed his defense was based on his lack of notice concerning the hearing and not the suspension order. Because the DUI charge resulted in both administrative proceedings and court proceedings, Gleeson’s confusion is understandable. Confusion over these various proceedings and defenses attendant to each is common among lay people and would not cause a trial court to have sufficient doubt as to Gleeson’s competency. Moreover, just because the defendant does not understand the proceedings unless they are explained to him or her in simple language does not establish the defendant is incompetent to stand trial. Heger, 326 N.W.2d at 861 (quoting United States v. Glover, 596 F.2d 857, 867 (9th Cir.1979)).

[¶ 15] After Gleeson acknowledged he had notice of the order of suspension, his defense attorney asked him if he had anything else to add to his testimony. Gleeson then testified about the entire incident in one long narrative. Gleeson claims that such testimony should have alerted the court as to his incompetency. A trial court, however, is not required to conduct a full blown hearing every time there is the slightest evidence of incompetency. Storbakken, 246 N.W.2d at 81. Furthermore, lay people have a natural tendency to testify in narratives rather than short statements in response to questions.

[¶ 16] Gleeson’s final argument rests on his claim he lacked rapport with his attorney. During two pre-trial proceedings, Gleeson made certain statements regarding his attorney’s ineffectiveness while at other times he made certain statements praising his attorney. Prior to trial, he filed ethical complaints against the trial court, prosecutor, and his defense attorney. Gleeson, however, at the time of trial agreed to have his attorney represent him, and a review of the record does not manifest he had an inability to assist his attorney in his defense. Mere evidence of complaints and dissatisfaction, without more, does not establish sufficient doubt as to defendant’s competency.

Ill

[¶ 17] We conclude based on our review of the record there were no facts or circumstances present before the trial court which should have created a sufficient doubt of the defendant’s competency so as to warrant a hearing on the issue. Accordingly, the judgment is affirmed.

[¶ 18] GERALD W. VANDE WALLE, C.J., WILLIAM A. NEUMANN, DALE V. SANDSTROM, CAROL RONNING KAPSNER, JJ., concur.

      . North Dakota Century Code § 12.1-04-06, provides: "Whenever there is reason to doubt the defendant's fitness to proceed, the court may order the detention of the defendant for the purpose of an examination by a psychiatrist or a licensed psychologist.” (Emphasis added.) The United States Supreme Court has clearly stated that a court must sua sponte conduct an inquiry into a defendant’s mental capacity if the evidence raises a sufficient doubt as to the defendant's competency at that time. See generally Drope, 420 U.S. 162, 95 S.Ct. 896, 43 L.Ed.2d 103; Pate, 383 U.S. 375, 86 S.Ct. 836, 15 L.Ed.2d 815. Failure to conduct a competency hearing when there is sufficient doubt regarding the mental competency of the accused is a violation of the accused’s due process right to a fair trial. See Drope, 420 U.S. at 172, 95 S.Ct. 896; Pate, 383 U.S. at 385, 86 S.Ct. 836.

      . The United States Court of Appeals for the Eighth Circuit, however, has noted that no single, descriptive phrase has emerged from the cases in our federal courts. Griffin, 935 F.2d at 929 n. 2. Some cases have adopted "bona fide” doubt while others cases have adopted "reasonable doubt.” Id. The Court of Appeals has stated that "bona fide” doubt is a misnomer for purposes of determining whether an evidentiary hearing should be held. Id. It reasons that "it does not convey the correct sense of the test: the question whether an evidentiary hearing is required does not depend on the sincerity, genuineness, etc. of the judge's doubt — [an appellate court] can assume any judge’s doubt has these qualities.” Id. The Court of Appeals has, therefore, determined that “sufficient doubt” is the best term in which to couch the constitutional test. Id. It notes that since Pate, "sufficient doubt” seems to be the phrase most often used by the United States Supreme Court. Id. (quoting Ford v. Wainwright, 477 U.S. 399, 417, 106 S.Ct. 2595, 91 L.Ed.2d 335 (1986), and Drope, 420 U.S. at 180, 95 S.Ct. 896).


text:
    2000 ND 196
    NORTH DAKOTA WORKERS COMPENSATION BUREAU and Empire Oil Company, Plaintiffs and Appellants, v. GENERAL INVESTMENT CORPORATION; NBB Energy Partners I, L.P.; Raymond T. Duncan Oil Properties, Ltd; JEM Trust dated 2/09/93; Corlena Oil Company; KO-OP XVI, RTD; Petroro Corporation; Vincent Joseph Duncan Trust; Meyer Oil Properties; DKD Petroleum, LLC; James R. Oltmans, II; Sally Jane Oltmans; Patricia J. Barnett; Pangloss Oil Partners, LLC; Nomura Babcock & Brown Energy Corporation; Raymond F. Sebastian; MCNIC Oil & Gas Properties, Inc.; Pin Point Partners; Providence Energy Corp.; DEN Trust c/o Duncan Energy Co.; Timothy L. Smith; Bruce E. Johnston; Susan E. Johnston; Leon R. Bailey; Susan G. Bailey; Van Z. Spence; Susan K. Spence; D-T Company; David R. Duncan; Kevin V. Duncan; Leanne J. Paez Duncan; John V. Cestia; Brenda A. Cestia; Robert C. Lentz; Linda L. Lentz; William S. Fallin; Judith L. Fallin; John A. Bettridge; Elizabeth S. Bettridge; Gene R. Carlson; Cynthia L. Carlson; the City of Dickinson; Park District for the City of Dickinson; Burlington Resources; Duncan Oil Partners; Raymond T. Duncan, Trustee of the Raymond Twomey Duncan Trust; Lodgepole, LLC; Raymond T. Duncan; Electra Energy Company; CoEnergy Rockies, Inc., Defendants and Appellees, The Industrial Commission of North Dakota, acting as the North Dakota Housing Finance Agency, an agency of the State of North Dakota; John J. Gulka; Marion R. Gulka; Earl J. Quick; Ruth A. Quick; Reinhold Mayer, Jr. a/k/a Reinhold Mayer; Gertrude Mayer; Diane Hatzenbuehler; Rodney A. Praus; Raynald Praus; Laura F. Praus; Marvin Morel; Judy Morel; Northern Energy Corporation; W.H. Champion; American Royalty Corp.; Lonesome Dove Petroleum, Inc.; Gregory E. Garstang; and U.S. Bank National Association, Defendants.
    No. 20000116.
    Supreme Court of North Dakota.
    Dec. 7, 2000.
    Kent A. Reierson (argued), McKennett Stenehjem Reierson Forsberg & Herman-son, P.C., Williston, for plaintiff and appellant Empire Oil Company.
    Anne Jorgenson Green (appeared), Special Assistant Attorney General, North Dakota Workers Compensation Bureau, Bismarck, for plaintiff and appellant North Dakota Workers Compensation Bureau.
    Lawrence A. Bender (argued), Pearce & Durick, Bismarck, for defendants and ap-pellees NBB Energy Partners I, L.P., Raymond T. Duncan Oil Properties, Ltd, JEM Trust dated 2/09/93, Corlena Oil Company, KO-OP XVI, RTD, Petroro Corporation, Vincent Joseph Duncan Trust, Meyer Oil Properties, DKD Petroleum, LLC, James R. Oltmans, II, Sally Jane Oltmans, Patricia J. Barnett, Pan-gloss Oil Partners, LLC, Nomura Babcock & Brown Energy Corporation, Raymond F. Sebastian, MCNIC Oil & Gas Properties, Inc., Pin Point Partners, Providence Energy Corp., DEN Trust c/o Duncan Energy Co., Timothy L. Smith, Bruce E. Johnston, Susan E. Johnston, Leon R. Bailey, Susan G. Bailey, Van Z. Spence, Susan K. Spence, D-T Company, David R. Duncan, Kevin V. Duncan, Leanne J. Paez Duncan, John V. Cestia, Brenda A. Cestia, Robert C. Lentz, Linda L. Lentz, William S. Falito, Judith L. Falito, John A. Bet-tridge, Elizabeth S. Bettridge, Gene R. Carlson, and Cynthia L. Carlson.
    Timothy A. Priebe, Mackoff, Kellogg, Kirby & Kloster, PC, Dickinson, for defendant and appellee the City of Dickinson.
    Craig C. Smith, Fleck, Mather & Strutz, Bismarck, for defendant and appellee Burlington Resources.
    Albert J. Hardy, Hardy, Maus & Nord-sven, for defendant and appellee General Investment Corporation; and Mary E. Nordsven, Dickinson, for defendant and appellee Park District for the City of Dickinson.
   MARING, Justice.

[¶ 1] The North Dakota Workers Compensation Bureau (“the Bureau”) and Empire Oil Company (“Empire”) have appealed a judgment ruling parties claiming a mineral interest in certain land through the Bureau “have no estate, right, title, lien or interest in title to the mineral estate and mineral leasehold estate in those lands,” and quieting title to the subject lands in General Investment Corporation and the other defendants in the action. We conclude the Bureau and Empire have no interest in the subject mineral estate, and we affirm.

[112] Dickinson Fire and Pressed Brick Co. acquired title to the surface and the mineral estate in the subject land in 1902. In 1928, Dickinson Fire and Pressed Brick Co. mortgaged the land to secure the issuance of bonds and created a trust for the bondholders. The mortgage was foreclosed and a sheriffs certificate, dated December 4, 1934, was issued to M.A. Brannon, Trustee. On December 17, 1934, Brannon assigned the sheriffs certifícate to Dickinson Clay Products Company. The State, through the Bureau, obtained a judgment against Dickinson Clay Products Company for unpaid workers compensation premiums. A May 16, 1939, sheriffs certificate was issued to the State, doing business as the Bureau. On July 30, 1940, the sheriff executed a deed to the State, reciting, in part, he does “hereby, give, grant and convey to the said State of North Dakota all the estate, right, title and interest in and to said land ... of ... said Dickinson Clay Products Company.” The 1940 sheriffs deed was filed for record with the register of deeds on January 21, 1948.

[¶ 3] In 1947, proceedings were brought in district court about the administration of the trust created by Dickinson Fire and Pressed Brick Co. in 1928. In that proceeding, the district court found M.A. Brannon, as trustee for the bondholders, foreclosed and became the owner of the Dickinson Fire and Pressed Brick Co. for the benefit of the bondholders. The court found the “sheriffs certificate issued to the Dickinson Fire and Pressed Brick Company for the sale of the real estate was assigned and delivered to the said Dickinson Clay Products Company” without any consideration and in violation of an agreement between Trustee Brannon, the bondholders, and Dickinson Clay Products Company. On April 2, 1947, the court removed Brannon as the trustee of the trust and appointed J.A. O’Brien and Martin Binek as trustees. The court ordered the trustees to “institute such actions ... as shall be necessary to recover for the said trust the title and possession of that certain real estate ... and any other property, real or personal, in which the said trust has a claim.”

[¶4] By petition of December 2, 1947, O’Brien and Binek sought authority to sell the subject real estate and to compromise claims. The petition recited, in part:

That the title and ownership of said real estate is, and has been since May 16th, 1939, claimed by the State of North Dakota, doing business as The North Dakota Workmen’s Compensation Bureau, under and by virtue of a judgment and execution sale obtained against Dickinson Clay Products Company ... the property can now be sold for an amount several times in excess of its former value.

The petition recited the petitioners had received bids totaling $17,000 for the three tracts involved. The petition further recited:

In order to consummate said sale proposed herein it is necessary to settle the claim of the State of North Dakota in said premises.... That petitioners have been engaged in extended negotiations with the North Dakota Workmen’s Compensation Bureau, and have finally secured an offer from such agency to release its interest in the said premises and convey the same to the petitioners or such parties as may be purchasers for the sum of $1610.05, the principal amount of the judgment obtained by the State ... thus waiving all costs and interest, and also waiving their claim to title to the real estate.

The petitioners sought authority to accept the offers they had received for the real estate, and “to settle the claim of the State of North Dakota for the sum of $1610.05 and to receive such conveyances as may be necessary to properly release the interest of the State in said premises.”

[¶ 5] Minutes of a December 5, 1947, meeting of the Board of Commissioners of the North Dakota Workmen’s Compensation Bureau also reflect negotiations about the Bureau’s claim:

WHEREAS, an action has been commenced by Martin Binek and J.A. O’Brien trustee of a trust ... in which action it is alleged that the Dickinson Clay Products Company had fraudulently obtained the assets of the Dickinson Fire and Press[ed] Brick Company ...
WHEREAS, said action is at issue and the results of a trial of said action being uncertain, and WHEREAS, the bond holders represented by the said trustee have made an offer of compromise ...
WHEREAS, the Attorney General of the State of North Dakota, recommends that said offer be accepted for the reason that said payment will reimburse the Bureau for premiums charged against the Dickinson Clay Products Company during the period involved together with penalties and costs of judgment, said recommendation being further made upon the ground and for the reason that the Workmen’s Compensation Bureau was organized for the purpose of giving protection to injured employees and not for the purpose of making any profit in real estate; and the acceptance of said compromise is further recommended for the reason that it is not certain that the State of North Dakota would prevail in the pending action, and
WHEREAS, it appears it be to the best interest of the North Dakota Workmen’s Compensation Bureau and the North Dakota Workmen’s Compensation Fund to accept said offer of compromise in the sum of $1610.05.
NOW, THEREFORE, BE IT RESOLVED that the proper officers of the State of North Dakota ... hereby are authorized ... to execute a quit claim deed to the General Investment Corporation of Dickinson, North Dakota ... for the following described land....

[¶ 6] On December 13, 1947, the State, for the benefit of the Bureau, executed a quitclaim deed to General Investment Corporation of “all its right, title, interest, claim or demand in and to” the subject land. That quitclaim deed incorporated the resolution adopted by the Board of Commissioners of the North Dakota Workmen’s Compensation Bureau, specifically reciting that the quitclaim deed “is made pursuant to a resolution adopted by the Commissioners of the North Dakota Workmen’s Compensation Bureau on the 5th day of December, 1947, a copy of which has been recorded in the office of the Register of Deeds of Stark County, North Dakota.” On December 23, 1947, the district court issued an order authorizing the bondholders’ trustees to sell the subject land. On January 22, 1948, the trustees delivered a trustee’s deed to the subject land to General Investment Corporation.

[¶ 7] In 1998, the Bureau and Empire brought an action to quiet title in the subject land, alleging the Bureau owned one-half of the minerals underlying the subject land under N.D.C.C. § 38-09-01 and its December 5, 1947, quitclaim deed, and alleging the Bureau had executed an oil and gas lease to Empire in 1997. General Investment Corporation claims an interest in portions of the subject land under the January 22, 1948, trustee’s deed, and the other defendants in the quiet title action claim interests acquired through General Investment Corporation.

[¶ 8] On cross-motions for summary judgment, the district court concluded Brannon’s assignment of the sheriffs certificate was made without consideration, in contravention of the trust, “was ‘absolutely void’” under N.D.R.C.1943, §§ 59-0319 and 59-0415, and “the Bureau obtained no interest in the Subject Lands as a result of the July 30, 1940 sheriffs deed.” The court concluded “the quit claim deed executed by the Bureau did not make the transaction a ‘transfer’ or sale within the meaning of Section 38-09-01 of the North Dakota Century Code.” The court further concluded “the claims of title to the Subject Lands made by all those who claim through the North Dakota Workers Compensation Bureau by virtue of the July 30, 1940 sheriffs deed are invalid and void and without legal or equitable right.” The judgment entered March 24, 2000, quieted title to the subject land “in all the Defendants, as their interests appear of record, against any and all claims of those persons, known or unknown, who claim through the Plaintiff, North Dakota Workers Compensation Bureau, by virtue of July 30, 1940 sheriffs deed.”

[¶ 9] On appeal, the Bureau and Empire contend “[t]he District Court erred by re-litigating Workers Compensation Bureau’s mineral ownership and holding that North Dakota’s automatic reservation statute did not apply.”

[¶ 10] When the State executed the quitclaim deed to General Investment Corporation in 1947, N.D.R.C.1943, § 38-0901, like N.D.C.C. § 38-09-01 now provides in nearly identical language, provided:

In every transfer of land, whether by deed, contract, lease, or otherwise, by the state of North Dakota, or by any department thereof, fifty percent of all oil, natural gas, or minerals which may be found on or underlying such land shall be reserved to the state of North Dakota. Any deed, contract, lease, or other transfer of any such land made after February 20, 1941, which does not contain such reservation shall be construed as if such reservation were contained therein. The provisions of this section shall apply to all lands owned by this state or by any department thereof regardless of how title thereto was acquired.

Thus, the statute generally reserves fifty percent of all oil, natural gas, or minerals whenever the State transfers land owned by the State. The statute “defines and limits the power of the Board in selling state lands,” Convis v. State, 104 N.W.2d 1, 4 (N.D.1960), and “applies according to its terms to all sales of State lands,” Haag v. State, 219 N.W.2d 121, 130 (N.D.1974).

[¶ 11] When the State executed the quitclaim deed in 1947, N.D.R.C.1943, § 65-0424, like N.D.C.C. § 65-04-24, specifically authorized the Bureau to adjust or compromise claims upon defaults in the payment of premiums or premium installments:

Within twenty days after any such default, the bureau shall certify the account in default to the attorney general for the collection of the premium and accrued penalties, together with the further accruing penalties, and whenever an account has been so certified to the attorney general the bureau shall have authority to adjust or compromise the same upon recommendation of the attorney general.

Earlier, Attorney General James Morris, in an opinion of February 11, 1931, said the Bureau “has power to comprise claims and charges for premiums,” which “continues in the Bureau even after judgment has been secured.” Attorney General Morris relied, in part, on Frazier v. Schultz, 54 N.D. 253, 261, 209 N.W. 373, 376 (1926), where this Court said, “it would, indeed, be a somewhat strange policy if those authorized to institute an action must necessarily go through with it to the bitter end, even though a compromise were offered which would be much more advantageous to the county.” Thus, the Bureau was authorized to compromise claims arising out of premium defaults. In compromising its claim, the Bureau relied on the recommendation of the attorney general, who is the head of the State’s legal department, State v. Hagerty, 1998 ND 122, ¶ 19, 580 N.W.2d 139, and generally “ ‘has control of litigation involving the state and the procedure by which it is conducted,’ ’’id. at ¶25 (quoting Bonniwell v. Flanders, 62 N.W.2d 25, 29 (N.D.1953)).

[¶ 12] “Transfer is an act of the parties or of the law by which the title to property is conveyed from one living person to another.” N.D.C.C. § 47-09-01. The State released its claim with a quitclaim deed. A quitclaim deed conveys only the grantor’s interest, if any, in property, rather than the property itself. In re Kuether, 158 B.R. 151, 153 (Bankr.D.N.D. 1993); Bilby v. Wire, 77 N.W.2d 882, 888 (N.D.1956); Frandson v. Casey, 73 N.W.2d 436, 437 (N.D.1955). “The use of a quitclaim deed can be regarded as notice to the purchaser that there may be outstanding equities against the grantor’s title.” 14 Powell on Real Property § 81A.03[l][c] (2000).

[¶ 13] “Because litigation is considered injurious to society, compromises which diminish litigation and promote a peaceful society are favored.” (Citations omitted). Hastings Pork v. Johanneson, 335 N.W.2d 802, 805 (N.D.1983). Thus, “there is a public policy in this state to encourage settlements and to discourage litigation.” Nelson v. Johnson, 1999 ND 171, ¶ 17, 599 N.W.2d 246. “When a settlement agreement is fairly entered into, it disposes of all disputed matters” and “is a final determination upon the merits which should be upheld regardless of the merits of the original controversy.” Hastings Pork v. Johanneson, 335 N.W.2d at 805.

[¶ 14] Against this record of litigation, legislation, negotiation, recommendation by the attorney general, compromise, settlement, and our public policy to encourage settlement and discourage litigation, we conclude the quitclaim deed executed by the State in 1947 reflected a compromise and a settlement releasing the Bureau’s doubtful claim to the subject land and resulting in recovery of unpaid workmen’s compensation premiums, and did not reflect a sale resulting in a “transfer of land” covered by R.C.N.D.1943, § 38-0901. The Bureau’s compromise accomplished its purpose of collecting the premiums due it for the protection of injured workers, without undercutting the public’s interest in reserving mineral interests when the State sells State land. We affirm the judgment, although for a different reason than that relied upon by the district court. We need not address the contention the district court erred in relitigating the interest, if any, initially acquired by the Bureau, as resolution of that issue is not necessary to the determination of this appeal. Kaler v. Kraemer, 1999 ND 237, ¶ 22, 603 N.W.2d 698.

[¶ 15] The judgment is affirmed.

[¶ 16] GERALD W. VANDE WALLE, C.J., WILLIAM A. NEUMANN, DALE V. SANDSTROM, CAROL RONNING KAPSNER, JJ., concur.

      . Attorney General Morris later served on this Court from 1935 through 1964.