This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1994).


Willard O. Vetter, as Trustee for
Vetter Stone Employees Savings
and Retirement Plan, et al.,


Security Continental Insurance Company,
a Delaware life insurance company
(f/k/a Inter-American Insurance
Company of Dover, Delaware), et al.,
Defendants (C3-95-2619),
Appellants (C8-96-374),

Security Continental Insurance Company,
a Delaware Corporation,
Defendant and Cross Claimant


Raymond G. Anker, et al.,
Defendants and Cross Claimants

Security Continental Insurance Company,
a Delaware life insurance company
(f/k/a Inter-American Insurance
Company of Dover, Delaware),
Defendant and Third-Party Plaintiff,
Appellant  (C3-95-2619),


Jackson National Life Insurance Company,
a Michigan corporation, et al.,
Third-Party Defendants,

Filed August 13, 1996
Peterson, Judge

Blue Earth County District Court
File No. C8941236

Russell Pelton, Edward M. Laine, Oppenheimer Wolff & 
Donnelly, 3400 Plaza VII Building, 45 S. Seventh Street, 
Minneapolis, MN  55102 (for Appellant)

David C. Bohrer, Jacquelyne M. Sularz, Two Prudential Plaza, 
45th Floor, 180 North Stetson Avenue, Chicago, Illinois 60601 
(for Appellant)

Christopher J. Dietzen, Larkin, Hoffman, Daly & Lindgren, Ltd., 
1500 Norwest Financial Center, 7900 Xerxes Avenue S., 
Bloomington, MN  55431-1194 (for Respondent)

	Considered and decided by Peterson, Presiding Judge, 
Norton, Judge, and Holtan, Judge.*

U N P U B L I S H E D   O P I N I O N

 	This case involves two appeals consolidated by order of this 
court.  The first appeal arises from the district court's grant of 
respondent's motion for summary judgment and the entry of a final 
judgment.  The second appeal arises from the district court's grant 
of respondent's motion for sanctions against appellant.  We affirm.


	The named plaintiffs in this action purchased individual life 
insurance and group annuity contracts from Inter-American 
Insurance Company of Delaware (Inter-American of Delaware) 
between 1984 and 1986.  The contracts were transferred to Inter-
American Insurance Company of Illinois (Inter-American of 
Illinois) in 1987.  After the transfer, Inter-American of Delaware 
was dormant, although it possessed licenses to write insurance in a 
number of states.  In 1991, after a stock purchase by Delta Dental 
Plan of Illinois to acquire the insurance licenses, Inter-American of 
Delaware's name was changed to appellant Security Continental 
Insurance Company (SCIC).  Inter-American of Illinois became 
insolvent and, in December 1991, was placed in liquidation.
	Because of the insolvency, certain state guaranty 
associations, including the Minnesota Life & Health Insurance 
Guaranty Association (MGA), became responsible for performing 
statutory obligations to protect insureds from losses resulting from 
insurance company insolvency.  MGA entered into a "Loan 
Receipt Agreement" with each of the plaintiffs.  Under the 
agreements, MGA agreed to advance to a reinsurer, later identified 
as respondent Jackson National Life Insurance Company (Jackson 
National),  the sum necessary to keep the contracts in effect.  The 
advances were regarded as loans and were repayable only to the 
extent of any net recovery MGA obtained from any person, 
corporation, or other party with respect to Inter-American of 
Illinois's failure to meet its obligations to plaintiffs.  In exchange 
for the loans, the named plaintiffs released MGA from all claims 
they may have against MGA arising out of contracts issued by or 
through Inter-American of Illinois and Inter-American of 
Delaware.  Plaintiffs also consented to MGA's pursuit of any and 
all claims in the names of the plaintiffs and agreed to cooperate 
with MGA in the pursuit of any claims.
	The National Organization of Life & Health Insurance 
Guaranty Associations, acting as agent for MGA and other state 
guaranty associations, entered into an Agreement for Assumption 
Reinsurance of Ordinary Life and Annuities (Assumption 
Agreement) with Jackson National.  Through the Assumption 
Agreement, effective April 1, 1993, Jackson National assumed 
MGA's statutory obligations.   As consideration for assuming 
MGA's obligations, Jackson National received $1,591,170.38, 
which was based on the accumulated values of the assumed 
contracts on the insolvency date.
	In August 1994, this lawsuit was commenced against SCIC 
to enforce the named plaintiffs' rights under the contracts.  SCIC 
brought in Jackson National as a third-party defendant.  In August 
1995, the district court granted plaintiffs' motion for partial 
summary judgment, concluding that SCIC, the renamed 
corporation previously called Inter-American of Delaware, was 
liable on the contracts.  At the same time, the court denied Jackson 
National's motion for summary judgment.  Jackson National 
renewed its summary judgment motion, and upon reconsideration, 
the district court granted the motion.
	SCIC filed its notice of appeal with respect to the summary 
judgment order on December 14, 1995.  On December 20, 1995, 
the district court granted Jackson National's motion for sanctions 
against SCIC.  Final judgment was entered pursuant to that order, 
as amended.  SCIC filed its notice of appeal with respect to the 
sanctions order, along with a motion to consolidate.  This court 
granted the motion to consolidate.


1.	Standard of review

	On appeal from summary judgment, this court must 
determine (1) whether any genuine issues of material fact exist, 
and (2) whether the district court properly applied the law.  
Offerdahl v. University of Minn. Hosps. & Clinics, 426 N.W.2d 
425, 427 (Minn. 1988).  The evidence must be viewed in the light 
most favorable to the nonmoving party.  Id.  If no facts are 
disputed, this court's only task is to determine whether the trial 
court properly applied the law to the facts at hand.  Magnetic Data, 
Inc. v. St. Paul Fire & Marine Ins. Co., 442 N.W.2d 153, 155 
(Minn. 1989).
2.	Indemnification claim

Indemnity is the remedy securing the right of a 
person to recover reimbursement from another for 
the discharge of a liability which, as between himself 
and the other, should have been discharged by the 

Hendrickson v. Minnesota Power & Light Co., 258 Minn. 368, 
370, 104 N.W.2d 843, 846 (1960), overruled in part on other 
grounds by Tolbert v. Gerber Indus., 255 N.W.2d 362 (Minn. 
1977).  Although originally based upon express or implied 
contract, principles of equity are now considered the proper basis 
for indemnification.  Id. at 370-71, 104 N.W.2d 847.  Because it is 
an equitable doctrine, it "does not lend itself to hard-and-fast 
rules."  Larson v. City of Minneapolis, 262 Minn. 142, 148, 114 
N.W.2d 68, 73 (1962).
	SCIC argues that the district court erred by concluding as a 
matter of law that Jackson National is not liable to SCIC on a 
theory of indemnification.  SCIC claims that Jackson National is 
obligated to pay plaintiffs in this case based on Jackson National's 
Assumption Agreement with MGA.  Thus, the Assumption 
Agreement must be construed to determine Jackson National's 
	"The fundamental approach to construing contracts is to 
allow the intent of the parties to prevail."  Turner v. Alpha Phi 
Sorority House, 276 N.W.2d  63, 66 (Minn. 1979).  "The 
determination of whether a contract is ambiguous is a question of 
law."  Current Technology Concepts, Inc. v. Irie Enterprises, 530 
N.W.2d 539, 543 (Minn. 1995).  "In making that determination, a 
court must give the contract language its plain and ordinary 
meaning."  Id.  If the language is reasonably susceptible to more 
than one meaning, the contract is ambiguous.  Id.
	The Assumption Agreement provides that Jackson National 
would assume "as direct obligations, one hundred percent (100%) 
of the Covered Obligations in force on the Reinsurance Date [April 
1, 1993]."  Covered Obligations are defined as 
those obligations of each of the Participating 
Associations imposed by its respective Guaranty 
Association Act * * *.  For purposes of this 
Agreement, the Covered Obligations shall be the 
same as the obligations of [Inter-American of 
The Assumption Agreement provides that the Participating 
Associations must pay Jackson National certain sums of money 
based upon the Covered Obligations Jackson National assumed; 
the Participating Associations shall retain all rights and claims with 
respect to the Covered Obligations against Inter-American of 
Illinois; and the Assumption Agreement inures to the benefit of the 
parties (Participating Associations and Jackson National) and does 
not confer any rights upon any person other than the parties and 
their successors and permitted assigns.  The Assumption 
Agreement requires Jackson National to pay all death claims 
incurred after the reinsurance date and all requests for cash 
surrender completed after December 1, 1992.
	Based upon the language of the Assumption Agreement, 
Jackson National did not assume Inter-American of Illinois’s 
obligations under the contracts.  It assumed only the statutory 
obligations of MGA with respect to the contracts.  While the 
Covered Obligations are defined in terms of the contracts, they are 
not the policy obligations themselves.  The Assumption Agreement 
explicitly states that the Covered Obligations are "the same as the 
obligations of [Inter-American of Illinois]."  The Agreement does 
not state that the obligations of Inter-American of Illinois are 
Covered Obligations.  Jackson National did not assume the policy 
obligations directly. 
 	In addition, the Assumption Agreement provides that it 
does not confer any rights on persons other than the parties to the 
Agreement.  SCIC is not a party to the Agreement, so it cannot by 
way of the Agreement become entitled to indemnification from 
Jackson National.
	Finally, no equities lie in favor of SCIC for indemnification. 
 If Jackson National were required to indemnify SCIC, it may have 
to pay twice on each covered policy: once to SCIC and once to the 
insureds for death claims or cash surrender.  SCIC, on the other 
hand, would never have to pay on the policies it originated.  All 
equities lie in favor of Jackson National, thereby defeating SCIC's 
claim for indemnification.  The trial court properly granted 
summary judgment in favor of Jackson National with respect to 
SCIC’s indemnification claim.

3.	Contribution claim

	“The right to contribution is an equitable remedy which 
stems from the ideals of fairness and justice.”  In re Estate of 
Sjerven, 370 N.W.2d 66, 69 (Minn. App. 1985), review denied 
(Minn. Sept. 13, 1985).  The threshold requirements for a 
contribution claim under Minnesota law are: (1) "the parties must 
share a common liability or burden"; and (2) "the plaintiff must 
have discharged more than his fair share of the common liability." 
Id.  Equity bases the obligation to contribute upon the benefit of 
being relieved of an obligation.  American Auto. Ins. Co. v. 
Molling, 239 Minn. 74, 78, 57 N.W.2d 847, 850 (1953).
	Requiring SCIC to meet its obligations under the insurance 
contracts will not relieve Jackson National of an obligation.  Under 
the Loan Receipt Agreements between MGA and the named 
plaintiffs, MGA agreed to advance to Jackson National the amount 
necessary to keep the insurance contracts in effect.  The advances 
are regarded as loans from MGA to plaintiffs and are repayable to 
the extent of any net recovery MGA obtains from SCIC.  If MGA 
obtains recovery, it will keep the amount recovered as repayment 
of the loans made to the plaintiffs, and Jackson National remains 
obligated under the Assumption Agreement to pay death claims 
and requests for cash surrender made under plaintiffs' insurance 
contracts.  Because Jackson National remains obligated to make 
these payments even if MGA obtains recovery from SCIC, Jackson 
National will not be relieved of an obligation and, therefore, is not 
obligated to contribute to SCIC. 

4. 	Statutory Sanctions

	In reviewing an award of statutory sanctions, this court 
must review the district court's actions for an abuse of discretion.  
See Uselman v. Uselman, 464 N.W.2d 130, 141 (Minn. 
1990)(holding that the district court abused its discretion in 
awarding statutory sanctions).  A district court abuses its discretion 
when it makes a decision "against logic and the facts on record."  
Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
	A.	Minn. Stat. § 549.21, subd. 2
	Jackson National moved for sanctions, arguing that SCIC 
violated Minn. Stat. § 549.21, subd. 2 (1994) first, by asserting 
frivolous third-party claims, and second, by pursuing such claims 
in bad faith.  The district court rejected the bad faith argument, but 
concluded that the third-party claims were frivolous and unfounded 
and awarded costs and fees.  SCIC challenges this ruling.
	"Generally attorney fees may not be awarded to a successful 
litigant absent specific contractual or statutory authority."  Cherne 
Indus. v. Grounds & Assocs., 278 N.W.2d  81, 96 (Minn. 1979).  
Minn. Stat. § 549.21, subd. 2, grants the district court discretion to 
award fees and costs to the prevailing party if the unsuccessful 
party or attorney (1) acted in bad faith, (2) asserted a frivolous 
claim or defense that is costly to the prevailing party, (3) asserted 
an unfounded position solely for delay or to harass, or (4) 
committed fraud upon the court.  These bases are exclusive and 
standing alone can support a claim for sanctions.  Id.; see also 
Cherne, 278 N.W.2d  at 96 (Minn. 1979)(stating that fees may be 
recovered if the unsuccessful party "acted in bad faith, vexatiously, 
wantonly, or for oppressive reasons").
	SCIC cites Uselman v. Uselman, 464 N.W.2d at 139-140, 
for the proposition that statutory sanctions are not warranted 
without a finding by the district court of bad  faith.  We disagree.  
Uselman indicates that statutory sanctions may be awarded if a 
party's actions constitute any one of the grounds set forth in Minn. 
Stat. § 549.21, subd. 2.  See Uselman, 464 N.W.2d at 140 (district 
court erred in awarding sanctions without finding that party acted 
in bad faith or interposed claims for purposes of delay); see also 
State Bank v. Fabel, 530 N.W.2d 858, 863 (Minn. App. 1995) 
(upholding award of statutory sanctions when losing party asserted 
a frivolous claim that was costly to the other party), review denied 
(Minn. June 29, 1995) .
	The question here is whether the district court abused its 
discretion in concluding that SCIC's claims were frivolous and 
unfounded.  "The basis for a complaint must be entirely unfounded 
and frivolous before an award of fees is proper."  Block v. Target 
Stores, Inc., 458 N.W.2d 705, 713 (Minn. App. 1990), review 
denied (Minn. Sept. 28, 1990).  A party who survives a summary 
judgment motion has no reason to think that the court considers its 
claims frivolous.  Hampton Bank v. River City Yachts, Inc., 528 
N.W.2d 880, 891 (Minn. App. 1995), review denied (Minn. Apr. 
27, 1995).
	SCIC argues that because the district court initially denied 
Jackson National's motion for summary judgment, it was an abuse 
of the court's discretion to award fees and costs.  Cases that dictate 
no sanctions upon survival of summary judgment are not on point, 
however, because SCIC did not survive summary judgment.  On 
reconsideration of the motion for summary judgment, the district 
court granted the motion and explained in its order and 
At the time the court heard Jackson's original motion 
it was in conjunction with four other motions for 
summary judgment.  This court did not properly 
focus on Jackson's motion at that time.  Upon 
reconsideration, it was clear error for the court not to 
focus on the correct issues.

 	In Blattner v. Forster, the supreme court held that
[b]ecause the contract is not ambiguous, it is 
difficult to conclude that Blattners acted other than 
vexatiously in bringing this lawsuit.  The court did 
not abuse its discretion in granting reasonable 
attorneys' fees under Minn. Stat. § 549.21 (1980).

322 N.W.2d 319, 321 (Minn. 1982).  The Assumption Agreement 
is not ambiguous.  It states that it confers no benefits upon 
nonparties and that Jackson National assumed the  obligations of 
MGA, not the obligations of Inter-American of Illinois.  The 
district court did not abuse its discretion in granting sanctions 
pursuant to Minn. Stat. § 549.21.
	B.	Minn. R. Civ. P. 11
	SCIC also argues that the district court erred by awarding 
costs and fees pursuant to Minn. R. Civ. P. 11.  Rule 11 provides 
that attorneys must sign all pleadings and motion papers to certify 
that the information provided 
		is well grounded in fact and is warranted by 
existing law or a good faith argument for the 
extension, modification, or reversal of existing law, 
and that it is not interposed for any improper 

The rule imposes an affirmative duty on counsel "to investigate the 
factual and legal underpinnings of a pleading."  Uselman, 464 
N.W.2d  at 142.  Sanctions are mandatory if the rule is violated.  
Id.  Sanctions should not be imposed if the attorney has an 
objectively reasonable basis for pursuing a factual or legal claim.  
Id. at 143.
	SCIC's claim was based on its interpretation of the 
Assumption Agreement.  The district court concluded that "[u]pon 
a reasonable inspection of the situation, it should have been readily 
apparent to SCIC that Jackson National's only obligation under the 
insurance contracts was to the Minnesota Life and Health 
Insurance Guaranty Association."  
	Objectively, it is not reasonable to interpret the Agreement 
to require Jackson National to assume directly all of Inter-
American of Illinois's obligations under the insurance contracts.  
Jackson National dealt only with MGA.  MGA's only obligations 
with regard to the contracts were its statutory obligations.  It is not 
reasonable to conclude that MGA acted to obtain performance of 
obligations other than its statutory obligations.  Finally, SCIC's 
position ignores completely the Loan Receipt Agreements between 
MGA and the named plaintiffs.  In these agreements, plaintiffs 
consented to MGA's pursuit of any and all claims in the names of 
the plaintiffs and agreed that any net recovery by MGA would be 
used to repay loans made by MGA for the purpose of keeping 
plaintiffs' insurance contracts in effect.  It is not objectively 
reasonable to conclude that recovery by the named plaintiffs will 
benefit Jackson National.  The district court did not abuse its 
discretion in awarding costs and fees pursuant to Rule 11.

     * Retired judge of the district court, serving as judge of the 
Minnesota Court of Appeals by appointment pursuant to Minn. 
Const. art. VI, § 10.
           Although Jackson National assumed the statutory 
obligations of other state guaranty associations, MGA's 
obligations are the only obligations relevant to this case.