author: MR. JUSTICE WEBER MR. JUSTICE SHEEHY,

text:
    STATE OF MONTANA, ex rel., ROBERT BOESE, Petitioner and Relator, v. JIM WALTERMIRE, Secretary of State, State of Montana, Defendant and The Consumer Committee to Decontrol Milk Prices in Montana, Real Party in Interest.
    No. 86-383.
    Submitted Oct. 9, 1986.
    Decided Dec. 10, 1986.
    730 P.2d 375.
    Linnell, Newhall & Martin, Kevin C. Meek, Great Falls, for petitioner and relator.
    Mike Greely, Atty. Gen., Helena, Elwood English, Secretary of State’s office, Helena, for defendant.
    Michael D. Cok, Bozeman, for Consumer Committee to Decontrol Milk Prices.

      Steve McGregor, pro se.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

Petitioner asked this Court to declare Initiative 104 (the Milk Decontrol Initiative) void and invalid, and to enjoin the Secretary of State from allowing it to appear on the November 1986 ballot. In an order signed October 2, 1986, we denied petitioner’s request. This opinion explains the reasoning behind that order.

The issues are:

1. Does petitioner have standing to bring this action?

2. Does the title to Initiative 104 clearly express the subject of the Initiative as required by the Montana Constitution, and does it violate the Constitution by failing to disclose the creation of cooperative associations and the repeal of Fair Trade Rules statutes?

In March 1986 the form of the Milk Decontrol Initiative was approved by the Secretary of State, pursuant to Section 13-27-202(3), MCA. The Attorney General then set forth the statement of purpose, fiscal note, and statement of implication which would appear on the Initiative for circulation. See Section 13-27-312, MCA.

The proponents of the Initiative requested review in District Court of the statement of purpose and the fiscal note pursuant to Section 13-27-316(1), MCA. A compromise agreement was reached between the proponents and the Attorney General. Then the petition was circulated to Montana voters, and enough voter signatures were obtained for the Initiative to be placed on the ballot.

The petitioner, a Montana taxpayer, property owner, elector, and milk producer, asks us to remove the Initiative from the ballot. He argues that this Court has jurisdiction to exercise pre-election review of an initiative and that he has standing to bring this action. He asserts that the title of the Initiative is defective in several ways: (1) it misleads the voters by implying that the state would lose only some, and not all, of its power to regulate the processing, storage, and distribution of milk; (2) it does not disclose that the Initiative gives “special powers and privileges” to cooperative associations; and (3) it fails to disclose the Initiative’s repeal of the Rules of Fair Trade Practices, Sections 81-23-303 through -305, MCA.

I

Does petitioner have standing to bring this action?

Petitioner correctly states that he has standing to bring this action under this Court’s decision in State ex rel. Wenzel v. Murray (1978), 178 Mont. 441, 585 P.2d 633. That case involved a pre-election challenge to a proposed initiative which would have given Montana voters the power to approve or reject any proposed nuclear power facility certified under the Montana Major Facility Siting Act. This Court held “[t]he relator as a taxpayer, property owner and elector, has standing to sue to prevent the waste of public monies .. . and accordingly had the right to bring this action.” Wenzel, 585 P.2d at 638. Like that relator, petitioner is a taxpayer, property owner, and elector. He has standing to bring this action.

II

Does the title to Initiative 104 clearly express the subject of the initiative as required by the Montana Constitution, and does it violate the Constitution by failing to disclose the creation of cooperative associations and the repeal of Fair Trade Rules statutes?

Section 13-27-316(2), MCA, provides for challenges to an initiative’s title by opponents of the initiative:

“If the opponents of a ballot measure believe that the statement of purpose, the statements of implication of a vote, or the fiscal statement formulated by the attorney general pursuant to 13-27-312 do not satisfy the requirements of 13-27-312, they may, within 10 days of the date of certification to the governor that the completed petition has been officially filed, file an action in the district court in and for the county of Lewis and Clark challenging the adequacy of the statement and requesting the court to alter the statement.”

The legislative history of Section 13-27-316, MCA, indicates that the legislature intended a clear and speedy means by which both proponents and opponents could attack the sufficiency of statements of purpose and implication and fiscal notes. The statutory procedure allows district court and Supreme Court review for correction of any deficiencies so that the initiative might still be presented to the voters at the general election. In the present case, the Initiative was certified to the Governor on July 10, 1986. Under the statute the opponents had 10 days from then to file an action in the District Court of Lewis and Clark County. Instead, the petitioner waited until August 19, 1986, to file his petition in this Court. Clearly he failed to make any attempt to follow the statutory procedures of Section 13-27-316(2), MCA.

It is important to consider the procedure set forth in Section 13-27-316(2), MCA, with other sections covering initiatives. Under Section 13-27-202(3), MCA, before a petition for an initiative may be circulated for signatures, a sample sheet must be submitted to the Secretary of State. The Secretary of State then refers a copy of the petition to the Attorney General for his approval and the Secretary of State and Attorney General each review the petition and approve or reject the form. Last, under paragraph 4 of Section 13-27-202, MCA, the Secretary of State makes a final decision on approval or rejection of the form of the petition. If the Secretary of State approves the petition, he sends written notice to the proponents within 28 days of submission. If the Secretary of State rejects the petition, he must send written notice to the proponents within 14 days of submission.

The proponents have a right under Section 13-27-316(1), MCA, within 10 days of notice of the Secretary of State’s rejection or approval, to file an action in the District Court of Lewis and Clark County challenging the adequacy of the statement. In the present case that was done and an agreement was reached so that the challenge was satisfied.

The notice provisions pertaining to the opponents of the measure, such as the petitioner in the present case, do not require that the opponent immediately come into the District Court or otherwise act in order to oppose an initiative. Instead, the statute reasonably allows the initiative procedure to go ahead. The proponents may proceed to obtain signatures on the petition. If they are able to obtain sufficient signatures to meet the statutory requirements for placing the initiative on the ballot, then the petitions must be filed with the Secretary of State. At that point the Secretary of State under Section 13-27-308, MCA, is required to certify to the Governor that the completed petition has been officially filed, entitling the initiative to be placed on the ballot. It is that certification to the Governor which triggers the time in which the opponents of the measure may act. Under Section 13-27-316(2), MCA, the opponents have 10 days after that date to file a challenge in the District Court of Lewis and Clark County. This procedure allows the opponents to an initiative to prepare for a court challenge from the time the petition is initiated until ten days after all necessary voter signatures have been obtained, but does not require them to act until after sufficient signatures have been obtained to allow a vote by the people of Montana. While the ten day period allowed after certification is not long, the statutes provide for immediate access to the courts, Section 13-27-316(3)(a), MCA, and for correction of the challenged title in time so the initiative can still appear on the ballot. The five days allowed for appeal to this Court is similarly of significant benefit because it allows this Court to review the challenge without a time delay which would interfere with the initiative’s appearing on the ballot. We conclude this is a reasonable procedure so far as opponents are concerned.

Petitioner argues that this Court may exercise original jurisdiction over this matter despite his failure to comply with Section 13-27-316(2), MCA. He cites State ex rel. Steen v. Murray (1964), 144 Mont. 61, 394 P.2d 761. In that case, the Secretary of State was enjoined from placing a gambling initiative on the ballot. This Court held that the initiative was unconstitutional on its face because it directly contradicted Art. XIX, Section 2, Mont. Const. In contrast, the petitioner here has failed to demonstrate that the Milk Decontrol Initiative is unconstitutional on its face. Additionally, the the opinion in Steen was issued before Section 13-27-316, MCA, was enacted.

This Court has exercised jurisdiction to consider a pre-election constitutional challenge to an initiative since the enactment of Section 13-27-316, MCA. That case, State ex rel. Harper v. Waltermire (Mont. 1984), [213 Mont. 425,] 691 P.2d 826, 41 St.Rep. 2212, involved a challenge to the text, not the title, of the initiative.

Petitioner cites Article V, Section 11(3), Mont. Const., as the basis for his objections to this Initiative. That section requires that “[e]very bill. . . shall contain only one subject, clearly expressed in its title.” We have a fair provision at Section 13-27-316, MCA, which allows adequate opportunity for both opponents and proponents to go before both the district court and this Court. To excuse the opponent from complying with the statute would eliminate a primary intention of the statute: to allow any insufficiencies of title to be corrected in time for the initiative to be placed on the ballot. If we proceeded as requested by the petitioner, we would substantially negate the initiative right by allowing the petitioner in effect to lie in wait in the weeds and have an initiative eliminated even though the title was correctable under the statutory provisions.

We conclude that to effectively protect and preserve the right which Montanans have reserved to themselves to change the laws of this State through the initiative process, pre-election judicial review should not be routinely conducted. We hold that the petitioner had failed to demonstrate any reason to allow him to sidestep the procedural requirements of Section 13-27-316(2), MCA. In our order dated October 2, 1986, we therefore dismissed the petition.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON and GULBRANDSON concur.

MR. JUSTICE SHEEHY,

concurring and dissenting:

I concur that the petition here should be dismissed. I dissent from the reasons stated by the majority for the dismissal.

In the general election of November 4, 1986, Initiative 104 did not muster enough votes from the electorate to become law. Because of the failure of the Initiative to gain passage, the issues raised by the petition, filed before the general election, have become moot. For that reason alone, the petition should be dismissed. There is no reason to discuss the issues raised by the petition further.

I dissent from the reasons given for the dismissal of the petition by the majority because those reasons are wrong in law and in logic.

The implication to be gained from the majority opinion is that unless the opponents of an initiative measure proceed under Section 13-27-316(2), MCA, they are thereby precluded from any other judicial relief from a flawed initiative proposal. That implication is reached without an adequate discussion in the majority opinion as to the statute that is involved nor its interpretation.

Section 13-27-316(2), is permissive rather than mandatory. Its permissive character is not discussed in the majority opinion and for purposes of this dissent, I set it forth here.

“(2) If the opponents of a ballot measure believe that the statement of purpose, the statements of implication of a vote, or the fiscal statement formulated by the attorney general pursuant to 13-27-312 do not satisfy the requirements of 13-27-312, they may, within 10 days of the date of certification to the governor that the completed petition has been officially filed, file an action in the district court in and for the county of Lewis and Clark challenging the adequacy of the statement and requesting the court to alter the statement. (Emphasis added.)”

Two things ought to be clear from a reading of the foregoing statute. First, it pertains only to statements, and secondly, it is permissive, since the statute uses the word “may.”

In our dissent in Cause No. 86-400, entitled State of Montana, ex rel., Montana Citizens for the Preservation of Citizens’ Rights, et al., plaintiffs and relators vs. Jim Waltermire, Secretary of State, et al., defendants and respondents, and Montana Liability Coalition, real party in interest [224 Mont. 273,] 729 P.2d 1283, [43 St. Rep. 1869], we discussed the effect of that statutory provision. We said in our dissent:

“It is important to note that Section 13-27-316 is not an imperative statute. The word ‘may’ must be interpreted as permissive only. This Court has had a bitter experience in interpreting the word ‘may’ as ‘must,’ which it did in State ex rel. Interstate Lumber Company v. District Court (1918), 54 Mont. 602, 172 P. 1030. The holding was repudiated in Hardenburgh v. Hardenburgh (1944), 115 Mont. 469, 146 P.2d 151, and in Johnson v. Ogle (1945), 117 Mont. 419, 159 P.2d 337. Following up on these cases, this Court in Love v. Mon-O-Co Oil Corporation (1958), 133 Mont. 56, 319 P.2d 1056, again decided that the word ‘may’ should not be given the force of ‘must.’ Our last expression on the subject occurred in Clark Fork Paving, Inc. v. Atlas Concrete and Paving (1978), 178 Mont. 8, 582 P.2d 799, 781, where we said that the word ‘may’ as an exception to the statute [a venue statute] ‘needs to be read as a permissive word, and not as the imperative must.’ ”

The majority opinion does not discuss this statute nor whether it is now by implication giving the word “may” the imperative force of “must” as far as legal actions to correct statements in initiative proposals are concerned. The implication in the majority opinion is that a failure to apply to the District Court in Lewis and Clark County within 10 days of the day of certification to the governor precludes all further judicial review of initiative proposal. That is an unwarranted, unnecessary and improper restriction on the judicial power. When initiative proposals affect directly the interests of the whole people of this state, when the public is vitally interested in the matter, and when the liberties or the property of the people of this state are involved, we should as a Court insist on the full jurisdiction of the district courts and of this Court to review and protect those rights and liberties.

The second issue adverted to by the majority opinion but not properly treated is whether Initiative 104 contained more than one subject.

Article V, Section 11(3), 1972 Mont. Const., provides that: “[e]ach bill . . . shall contain only one subject, clearly expressed in this title.” We held in State ex rel. Steen v. Murray (1964), 144 Mont. 61, 66, 394 P.2d 761, 764, that the provisions of a like constitutional section in the 1889 Montana Constitution applied to initiative procedures.

Because Initiative 104 failed to gain the approval of the electorate, whether the initiative was multiplicitous is also now moot. Instead of so treating the issue, the majority opinion considers the issue foreclosed because the opponents did not bring an action within 10 days from the governors’ certification under Section 13-27-316(2), MCA. That basis for handling the issue is clearly wrong. Section 13-27-316(2) applies to actions brought with respect to the statements contained in the Initiative. The statute does not apply to objections such as multiplicity in an initiative proposal. An initiative which is multiplicitous cannot be cured through an amendment of a statement of purpose because the statement itself will be multiplicitous if it correctly portrays the effect of the initiative. Clearly the right to resort to the judicial power to correct multiplicitous initiatives cannot be considered circumscribed, limited and prohibited by Section 13-27-316(2).

For the reasons foregoing, although I concur in the dismissal of the petition here, I cannot agree with the majority in the reasons given for the dismissal.

MR. JUSTICES HUNT and MORRISON concur in the dissent of MR. JUSTICE SHEEHY.


source: Caselaw Access Project

author: MR. JUSTICE GULBRANDSON MR. JUSTICE MORRISON, MR. JUSTICE SHEEHY,

license: Public Domain

text:
    ALBERT L. BRINKMAN, Plaintiff and Appellant, v. STATE OF MONTANA, State of Montana Institutions, and Henry Risley, Warden, Montana State Prison, Defendants and Respondents.
    No. 86-37.
    Submitted on Briefs June 6, 1986.
    Decided Dec. 11, 1986.
    Rehearing Denied Jan. 13, 1987.
    729 P.2d 1301

      Leonard J. Haxby and David L. Holland, Butte, for plaintiff and appellant.
    Chris D. Tweeten, Agency Legal Services Bureau, Helena, for defendants and respondents.
    Charles E. Erdmann, Montana School Boards Assoc., LeRoy H. Schramm, Montana University System, Helena, for amicus curiae.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Plaintiff Albert Brinkman appeals a Powell County District Court order granting summary judgment to the defendants State of Montana, State of Montana Department of Institutions and Warden Henry Risley in this wrongful termination of employment case. The sole question on appeal is whether the appellant is barred from suing for wrongful discharge because of his failure to exhaust contractual remedies under a collective bargaining agreement. We answer in the affirmative and, therefore, we affirm.

In 1982, appellant worked as a correctional officer at the Montana State Prison. In June of that year, appellant suffered an injury on State property at the prison. He applied for and received workers’ compensation benefits for his injuries. Subsequently, he took leave several times from his job citing a continuing disability from his accident. The Department of Institutions has a written policy on industrial accidents. The policy specifies certain rules and procedures covering injured workers, their absences from work, their return to work and protection for their jobs in the interim. In certain sitúations, the policy requires a worker to submit request for leave forms and a medical statement to the employer to protect the worker’s right to return to work.

In July 1983, appellant had been on leave from work continuously for several months. On July 8, 1983, Prison Personnel Officer John Pemberton sent appellant a letter requesting that appellant complete the accompanying request for leave forms and return those forms with a doctor’s statement to the prison administration. The letter stated that a job would be held for appellant until December 18, 1983, if appellant returned the requested items by July 22, 1983. Further, the prison would consider appellant on unauthorized leave and, therefore, terminated if he did not return the requested items by then. Appellant testified by deposition that no request for leave forms were enclosed with the letter. His wife testified that a prison employee verbally extended the deadline until July 31, 1983, and assured her that request for leave forms would be sent to appellant. Appellant’s wife further testified that the forms were never received. In any event, it is undisputed that appellant did not provide the items to the prison by July 22 or July 31, 1983.

On August 10 or 11, 1983, appellant and his wife went to the prison carrying a doctor’s statement releasing appellant to return to work. Prison employees informed appellant that he had been fired and that he could not be allowed inside the prison main gate. At that time, appellant attempted to contact his union representative, Mr. Beatty, who was apparently then working inside the prison. A prison employee, Osborne, called Beatty for appellant and informed appellant that Beatty could not come for twenty to thirty minutes. Appellant waited for Beatty for about forty minutes. Osborne then called Beatty again at appellant’s request. Beatty said he would arrive to talk with appellant in ten minutes. He failed to arrive within ten to fifteen minutes and Osborne again called him. Osborne called Beatty an unspecified number of times until appellant, feeling uncomfortable and embarrassed, finally left. Appellant concedes that he did not again try to contact his union in any way about the termination of his employment.

In September 1981, after appellant was hired to work at the prison, he signed a form authorizing the prison to deduct union dues from his paycheck and remit them to the Montana Public Employees Association (MPEA). An affidavit submitted by the MPEA’s staff counsel shows that the prison deducted union dues from appellant’s paycheck during all of 1982 and the first three months of 1983. The affidavit states that:

“[T]he fact that Albert Brinkman’s union dues were not paid for the months April, May, June, July and August of 1983 would not disqualify Brinkman from receiving the benefits of the collective bargaining agreement, including its grievance and arbitration procedure, if Brinkman was considered to be an employee of the prison during that time.”

Pemberton, the prison personnel officer, filed an affidavit stating that:

“Permanent employees who take leave without pay status continue to be considered employees of Montana State Prison until their resignation, retirement, or discharge. Albert Brinkman was considered to be an employee until the time of his discharge.”

Appellant admitted in his deposition that he belonged to the regular state prison union.

In March 1983, the MPEA and the state entered into a collective bargaining agreement (CBA) which governed the conditions of employment at the prison. Article II, section five of that agreement states:

“The Employer may discharge any employee with permanent status only for just cause. The Employer shall furnish an employee subject to discharge or suspension with a written statement of the ground and specific reason(s) for such actions and shall in addition notify the Association of the removal of an employee for cause. An employee with permanent status may appeal his/her dismissal, suspension or other punitive disciplinary action through the grievance procedure. This in no way limits management’s prerogative to lay off employees in accordance with Article 13.”

Article X, section four of the CBA provides:

“Any grievance or dispute which may arise between the Parties, involving the application, meaning, or interpretation of this Agreement, shall be settled in the following manner ...”

The agreement then lists specific steps that an employee should proceed through, with the help of his union, to resolve the grievance. The agreement ultimately provides for final and binding arbitration.

Other than appellant’s attempts on August 10 or 11 to contact his union representative, he did not follow the grievance procedure set out in the CBA. In December 1983, appellant filed his complaint in the Powell County District Court alleging (1) that the prison administration fired him in retaliation for his work-related injury, thus vi-dating public policy, and (2) the prison fired him in violation of an implied covenant of good faith and fair dealing. The complaint named the State of Montana, the Montana Department of Institutions, and Warden Henry Risley as defendants. After extensive pretrial discovery, the defendants moved for summary judgment. The lower court granted summary judgment to defendants holding that appellant was barred from further proceedings in court because of his failure to exhaust contractual remedies. This appeal followed.

“The standard of review is clear. Summary judgment is only proper under Rule 56(c), M.R.Civ.P., where the record discloses that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.”

Mutual Service Cas. Ins. Co. v. McGehee (Mont. 1985), [219 Mont. 304,] 711 P.2d 826, 827, 42 St.Rep. 2038, 2039-2040.

Initially we find that, contrary to appellant’s assertion, the CBA clearly covered the terms of appellant’s employment at the time of his termination. Appellant conceded in response to a request for admission that he authorized the prison to deduct union dues from his paycheck. Appellant also testified in deposition that he was a member of the “regular prison union.” The MPEA’s counsel filed an affidavit stating that appellant was covered by the CBA so long as he was considered a prison employee. The prison personnel officer filed an affidavit stating that appellant was considered an employee up until the time of his termination. There is no issue of fact on this point which would preclude summary judgment.

Section 39-31-101, MCA, enacted to establish the official state policy on collective bargaining, states:

“In order to promote public business by removing certain recognized sources of strife and unrest, it is the policy of the State of Montana to encourage the practice and procedure of collective bargaining to arrive at friendly adjustment of all disputes between public employers and their employees.”

Section 39-31-306, MCA, and Section 39-31-310, MCA, also deal with CBAs and are especially relevant to the instant case. Section 39-31-306, MCA, states:

“(1) Any agreement reached by the public employer and the exclusive representative shall be reduced to writing and shall be executed by both parties.
“(2) An agreement may contain a grievance procedure culminating in final and binding arbitration of unresolved grievances and disputed interpretations of agreements.
“(3) An agreement between the public employer and a labor organization shall be valid and enforced under its terms when entered into in accordance with the provisions of this chapter and signed by the chief executive officer of the state or political subdivision or commissioner of higher education or his representative. A publication of the agreement is not required to make it effective.
“(4) The procedure for the making of an agreement between the state or political subdivision and a labor organization provided by this chapter is the exclusive method of making a valid agreement for public employees represented by a labor organization.”

Section 39-31-310, MCA, states:

“Nothing in 39-31-307 through 39-31-310 prohibits the parties from voluntarily agreeing to submit any or all of the issues to final and binding arbitration, and if such agreement is reached, the arbitration shall supersede the fact-finding procedures set forth in those sections. An agreement to arbitrate and the award issued in accordance with such agreement shall be enforceable in the same manner as is provided in this chapter for enforcement of collective bargaining agreements.”

In interpreting the Montana statutes on collective bargaining for public employees, this Court has looked to the federal courts’ construction of the National Labor Relations Act. Small v. McRae (1982), 200 Mont. 497, 651 P.2d 982, In Small, a college dean dismissed the plaintiff as chairman of the college English department. Although a CBA covered the employment relationship, the plaintiff filed suit in district court without first pursuing his remedies under the CBA. This Court stated:

“Only in those cases where it is certain that the arbitration clause contained in a collective bargaining agreement is not susceptible to an interpretation that covers the dispute is an employee entitled to sidestep the provisions of the collective bargaining agreement. (Citation omitted.)”

Small, 651 P.2d at 986. The arbitration clause in this CBA is certainly susceptible to an interpretation covering appellant’s dispute. The CBA states that:

“An employee with permanent status may appeal his/her dismissal, suspension or other punitive disciplinary action through the grievance procedure.”

The affidavit of the MPEA’s counsel states that “MPEA processes grievances based on allegations of discharge without just cause and has done so under this agreement.” Thus, under the quote from Small (immediately above), appellant is not entitled to sidestep the provisions of the CBA.

In Small we also quoted with approval from a United States Supreme Court case:

“As a general rule in cases to which federal law applies, federal labor policy requires that individual employees wishing to assert contract grievances must attempt use of the contract grievance procedure agreed upon by employer and union as the mode of redress. If the union refuses to press or only perfunctorily presses the individual’s claim, differences may arise as to the forms of redress then available. (Citations omitted.) But unless the contract provides otherwise, there can be no doubt that the employee must afford the union the opportunity to act on his behalf. Congress has expressly approved contract grievance procedures as a preferred method for settling disputes and stabilizing the ‘common law’ of the point. (Citations omitted.)
“Union interest in prosecuting employee grievances is clear. Such activity compliments the union’s status as exclusive bargaining representative by permitting it to participate actively in the continuing administration of the contract. In addition, conscientious handling of grievance claims will enhance the union’s prestige with employees. Employer interests, for their part, are served by limiting the choice of remedies available to aggrieved employees. And it cannot be said, in the normal situation, that contract grievance procedures are inadequate to protect the interests of an aggrieved employee until the employee has attempted to implement the procedures and found them so. (Emphasis supplied.)
“A contrary rule which would permit an individual employee to completely sidestep available grievance procedures in favor of a lawsuit has little to commend it. In addition to cutting across the interest already mentioned, it would deprive employer and union of the ability to establish a uniform and exclusive method for orderly settlement of employee grievances. If a grievance procedure cannot be made exclusive, it loses much of its desirability as a method of settlement. A rule creating such a situation ‘would inevitably exert a disruptive influence upon both the negotiation and administration of collective agreements.’ (Citations omitted.)”

Small, 651 P.2d at 986; quoting from Republic Steel Corporation v. Maddox (1965), 379 U.S. 650, 652-653, 85 S.Ct. 614, 616-617, 13 L.Ed.2d 580, 583-584.

This court went on to say that,

“To allow a member of the collective bargaining unit to completely sidestep available procedures would, just as under federal law, exert a disruptive influence upon both the negotiation and administration of collective bargaining agreements and effectively deprive employers and unions of the ability to establish a uniform and exclusive method for the orderly settlement of employee grievances.”

Small, 651 P.2d at 986.

Other courts have addressed the same tort alleged here (wrongful retaliatory discharge for filing a workers’ compensation claim) and held that the plaintiff’s suit was barred for failure to exhaust contractual remedies. See, e.g., Schuyler v. Metropolitan Transit Com’n. (Minn.App. 1985), 374 N.W.2d 453; Payne v. Pennzoil Corp. (Ariz.App. 1983), 138 Ariz. 52, 672 P.2d 1322. We hold that under the Small decision appellant is similarly barred.

In Malquist v. Foley (Mont. 1986), [220 Mont. 176,] 714 P.2d 995, 43 St.Rep. 270, this Court expressed sentiments which may be construed as in conflict with our holding today. Therefore, we find it appropriate to analyze and harmonize the Malquist decision. In Malquist, three union electricians and their union local sued several companies alleging the companies blacklisted the individuals and seeking punitive damages under Section 39-2-803, MCA, entitled “Blacklisting prohibited.” This Court reversed the district court’s holding that the plaintiffs’ suit was pre-empted by federal labor law. In holding that the plaintiffs could pursue their claims in state court, we adopted the following rationale from the Ninth Circuit Court of Appeals;

“A claim grounded in state law for wrongful termination for public policy reasons poses no significant threat to the collective bargaining process; it does not alter the economic relationship between the employer and employee. The remedy is in tort, distinct from any contractual remedy an employee might have under the collective bargaining contract. It furthers the state’s interest in protecting the general public — an interest which transcends the employment relationship. (Citation omitted.)”

Malquist, 714 P.2d at 999, quoting Garibaldi v. Lucky Food Stores, Inc. (9th Cir. 1984), 726 F.2d 1367, 1375. The quote from Garibaldi was not crucial to the holding in Malquist. In Malquist, exhaustion of contractual remedies was not at issue because the plaintiffs’ union determined that the CBA did not cover the conduct complained of.

Nevertheless, the Garibaldi language runs contra our holding today on the plaintiff’s claim for wrongful discharge in violation of public policy. However, subsequent federal cases have limited the broad language used in Garibaldi.

A brief analysis of federal law is appropriate at this point. Section 301 of the federal Labor Management Relations Act (LMRA), 29 U.S.C. Section 185, gives jurisdiction to federal district courts over suits for violations of CBAs covering employees in an industry affecting commerce. Section 301 preempts state court claims alleging violations of those defined CBAs. Allis-Chalmers Corp. v. Lueck(1985), 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206. Section 301 also preempts many state court claims alleging torts which arise out of violations of CBAs.

In Garibaldi, the court held that although the plaintiff was covered by a CBA, Section 301 did not preempt his state court claim alleging wrongful discharge against public policy. The plaintiff claimed that “he was discharged because he reported a shipment of adulterated milk to the health officials after his supervisors ordered him to deliver it.” Garibaldi, 726 F.2d at 1374. Although the Garibaldi passage quoted in Malquist (above) seems to allow any state law claim for wrongful discharge in violation of public policy (even though there is a CBA subject to federal jurisdiction), the Ninth Circuit has subsequently reexamined that idea.

In Olguin v. Inspiration Consol. Copper Co. (9th Cir. 1984), 740 F.2d 1468, the plaintiff alleged he was discharged (1) in violation of an agreement of employment between himself and the company, and (2) in violation of public policy, i.e., in retaliation for safety complaints and for engaging in concerted labor activity. Olguin originally filed his complaint in state court relying mainly on state tort law. The defendant removed the case to federal court claiming federal labor law controlled. The Ninth Circuit affirmed the federal district court rulings which (1) denied a motion to remand to state court, (2) found that all claims arose under federal law which provided exclusive remedies, and (3) dismissed Olguin’s complaint because he had failed to follow procedures in the collective bargaining agreement which his union had entered into. Addressing the claim of wrongful discharge in violation of an agreement of employment, the Ninth Circuit stated:

“Like the personnel policy manual, any independent agreement of employment could be effective only as part of the collective bargaining agreement. That agreement explicitly provides for dismissal on just cause. Even if the ‘wrongful discharge’ is based on state tort law, it is preempted. The agreement provides the same or greater protection of job security that state tort law seeks to provide for nonunionized employees; accordingly federal law preempts state law. (Citation omitted.) Olguin’s alleged right not to be dismissed without just cause is essentially equivalent to a right created by the collective bargaining agreement. It is apparent that the true nature of Olguin’s wrongful discharge complaint concerns the terms and conditions of employment as they are set out in the collective bargaining agreement.”

Olguin, 740 F.2d at 1474.

As to the claim for wrongful discharge in violation of public policy, the court said:

“A tort of wrongful discharge has developed in some states to protect employee job security despite the historical common law rule of employment at will. (Citation omitted.) As we have indicated, this tort is supplanted by the provisions of the collective bargaining agreement. (Citation omitted.)”

Olguin, 740 F.2d at 1475. The court declined to apply the Garibaldi exception to the federal preemption doctrine.

The most telling case is Evangelista v. Inlandboatmen’s Union of Pacific (9th Cir. 1985), 777 F.2d 1390. Plaintiff Evangelista filed suit in state court alleging, among other things, wrongful discharge in violation of public policy. The public policy asserted was the protection of citizens from harassment on the job. The court held that the claim was preempted by federal law since the resolution of the claim turned upon an interpretation of a collective bargaining agreement. The court clarified the Garibaldi decision by stating that in that case

“[w]e reasoned that a state claim for wrongful termination poses no significant threat to the collective bargaining process where it furthers a state interest in protecting the general public which transcends the employment relationship. (Emphasis supplied.)” Evangelista, 777 F.2d at 1401.

Here, appellant’s claims (that he was discharged in violation of (1) public policy, and/or (2) the implied covenant of good faith and fair dealing) do not further a state interest in protecting the general public which. transcends the employment relationship. There is a state interest here but it is completely and inexorably intertwined with the employment relationship. The CBA in this case protects an employee from discharge without just cause and provides for grievance procedures to enforce that protection. Therefore, appellant’s tort claims pose a significant threat to the collective bargaining process and, as such, they are barred.

A federal district court decision, Costello v. United Parcel Service, Inc. (D.C. Pa. 1984), 617 F.Supp. 123, supports our holding today. In Costello, the plaintiff was discharged from his job and his union filed a grievance protesting the discharge. The union pursued the grievance through arbitration until the claim was finally denied. Costello then filed suit in state court alleging, among other things, wrongful discharge in violation of public policy, i.e., in retaliation for filing a workers’ compensation claim. The action was removed to federal court on the basis of assertions of diversity and federal question jurisdiction. The court dismissed the claim holding that the plaintiff’s exclusive remedy was provided by Section 301 of the National Labor Relations Act, generally the exclusive remedy for violations of collective bargaining agreements. The court, relying on Olguin, stated:

“[T]he Commonwealth of Pennsylvania has a legitimate interest in upholding the proper enforcement of its workers compensation laws, and thus in providing a remedy against retaliation for filing a compensation claim. But vindication of that interest is not significantly impeded by Section 301 preemption. The ‘public policy’ involved is directly related to the employment relationship itself. Plaintiff is attempting to sue his employer for damages for wrongful discharge, a matter governed entirely by the collective bargaining agreement.” Costello, 617 F.Supp. at 124-125.

The United States Supreme Court case Allis-Chalmers Corp. v. Lueck (1985), 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206, is also relevant here. The plaintiff there was a union member subject to the terms of a CBA. The CBA incorporated a group health and disability plan and provided a grievance procedure for any insurance related dispute arising from the CBA. Plaintiff sued Allis-Chalmers and Aetna Life and Casualty Company, the insurance plan administrator, in state court for breach of the duty to act in good faith and deal fairly with plaintiff’s disability claims. Plaintiff did not attempt to grieve the dispute first. The Supreme Court of Wisconsin, in Lueck v. Aetna Life Ins. Co. (1984), 116 Wis.2d 559, 342 N.W.2d 699, held that plaintiff’s suit was not preempted by federal law or subject to dismissal for failure to exhaust contractual remedies. The United States Supreme Court reversed holding that Section 301 of the LMRA preempted the state court claim. The Court stated:

“Perhaps the most harmful aspect of the Wisconsin decision is that it would allow essentially the same suit to be brought directly in state court without first exhausting the grievance procedures established in the bargaining agreement. The need to preserve the effectiveness of arbitration was one of the central reasons that underlay the Court’s holding in [Teamsters v.] Lucas Flour [369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593] . . . The parties here have agreed that a neutral arbitrator will be responsible, in the first instance, for interpreting the meaning of their contract. Unless this suit is preempted, their federal right to decide who is to resolve contract disputes will be lost.
“Since nearly any alleged willful breach of contract can be restated as a tort claim for breach of a good-faith obligation under a contract, the arbitrator’s role in every case could be bypassed easily if Section 301 is not understood to pre-empt such claims. Claims involving vacation or overtime pay, work assignment, unfair discharge — in short, the whole range of disputes traditionally resolved through arbitration — could be brought in the first instance in state court by a complaint in tort rather than in contract. A rule that permitted an individual to sidestep available grievance procedures would cause arbitration to lose most of its effectiveness ... as well as eviscerate a central tenet of federal labor-contract law under Section 301 that it is the arbitrator, not the court, who has the responsibility to interpret the labor contract in the first instance. (Citations omitted.) (Emphasis supplied.)”

Allis-Chalmers, 105 S.Ct. at 1915-1916. This case supports our decision to prevent appellant from sidestepping the grievance procedure.

Lastly, we find there is an additional reason barring appellant’s claim for wrongful discharge in violation of the covenant of good faith and fair dealing. In this case, the CBA provided that the employer could only discharge employees for “just cause.” Therefore, we will not imply the covenant of good faith and fair dealing into this employment relationship. We agree with the reasoning of the First Circuit Court of Appeals in Bertrand v. Quincy Market Cold Storage & Warehouse (1st Cir. 1984), 728 F.2d 568.

“This covenant [of good faith and fair dealing] has generally been implied in contracts of employment ‘at will.’ This, however, was not an at will employment contract; the company had negotiated away its right to discharge anyone except for ‘just cause.’ Since there is an explicit contractual provision giving the employee greater protection than the implied covenant, there is no need to imply the covenant. See Blades, Employment At Will v. Individual Freedom: On Limit ing the Abusive Exercise of Employer Power, 67 Colum.L.Rev. 1404, 1410-13 (1967) (comparing the protections of discharge only for just cause provisions in union contracts with the lack of protection given at will employees).”

Bertrand, 728 F.2d at 571.

Moreover, this Court addressed the covenant of good faith and fair dealing in Dare v. Montana Petroleum Marketing Co. (Mont. 1984), [212 Mont. 274,] 687 P.2d 1015, 1020, 41 St.Rep. 1735, 1739, and stated:

“Whether a covenant of good faith and fair dealing is implied in a particular case depends upon objective manifestations by the employer giving rise to the employee’s reasonable belief that he or she has job security and will be treated fairly.”

Section 39-31-306(4), MCA, provides that:

“The procedure for the making of an agreement between the state or political subdivision and a labor organization provided by this chapter is the exclusive method of making a valid agreement for public employees represented by a labor organization.”

Here, the CBA contained the objective manifestations of the employer to the employee about the latter’s status. The employer agreed he would not discharge the employee but for “just cause” and, under Section 39-31-306(4), MCA, no other covenant need be implied.

In response to the dissenting statement of Hon. Frank B. Morrison, Jr., that this opinion deals a serious blow to organized labor, it should be pointed out that upholding a collective bargaining agreement supports the efforts of organized labor and aids them in their efforts to continue to exist as a vital, necessary force. Statements in that same opinion that the defendant was entitled to summary judgment on the facts seem inappropriate, as the trial judge did not make his ruling on that ground, and the statements are not responsive to the issue on appeal.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER and HUNT concur.

MR. JUSTICE MORRISON,

dissenting:

I concur in affirming summary judgment because I find no evidence that plaintiff was terminated for filing a workers’ compensation claim. If he were so fired a violation of public policy would have occurred and the rationale of Garibaldi cited in the majority opinion would or should control.

The majority opinion guts the law of wrongful discharge as applied to union workers-operating under a collective bargaining agreement. The result of this decision handcuffs the state in attempting to prevent unconscionable acts which violate established public policy.

I believe the direction of the Court, perhaps unwittingly, is clear. Greater job security found through a tort remedy, is afforded to non-union employees. They can recover noneconomic compensatory damages plus punitive damages while the union employee is left with the less effective grievance procedure. Organized labor has been dealt another serious blow by this decision. And it was all unnecessary as defendant was entitled to a summary judgment on the facts.

MR. JUSTICE SHEEHY,

dissenting:

I dissent from affirming the summary judgment because I find remaining genuine issue of material fact. The employee has maintained in briefs here and below that he was not a member of the employee’s association, and therefore not bound by the terms of the agreement executed by the association and management. The employer was required to pay a “service charge” equal to the union dues as a condition of his employment, but the evidence is not clear that the employee had joined the association and thereby agreed that the association was his bargaining agent. I would reverse the summary judgment.


author: MR. CHIEF JUSTICE TURNAGE

text:
    In re the MARRIAGE OF STEPHANIE H. SABO, Petitioner and Respondent, and THOMAS I. SABO, Respondent and Appellant.
    No. 86-168.
    Submitted on Briefs Aug. 14, 1986.
    Decided Dec. 11, 1986.
    Rehearing Denied Feb. 3, 1987.
    730 P.2d 1112.
    Henningsen & Purcell, Mark A. Vucurovich, Butte, for respondent-appellant.
    J. David Penwell, Bozeman, for petitioner-respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Thomas Sabo appeals from a December 31, 1985, judgment of the Second Judicial District Court, Silver Bow County. The judgment ordered Thomas to pay Stephanie $7,750 in past child support, pay her $3,904.85 from the sale of marital property, and pay her $2,201.23 in attorney fees plus 10 percent accruing interest.

We reverse in part and affirm in part.

Thomas Sabo raises two issues for our review:

1. Is a non-custodial father, who assumes permanent custody, and support of the children with the consent of the custodial mother, relieved of the obligation , to pay child support accruing after and during the consensual assumption of custody?

2. Did substantial evidence support the court’s finding that Stephanie was a partner with Thomas in SACO Investments?

After sixteen years of marriage, the Sabos were divorced on November 15, 1976, in Silver Bow County. At the time, Thomas was an attorney and Stephanie was a real estate agent. The divorce decree incorporated a settlement agreement in which Thomas agreed to pay Stephanie $125 per month per child, in support for their three minor children. Thomas’ support obligation for his son, Mark, ended in September 1979, when Mark turned eighteen.

Through February 1981, Thomas paid Stephanie $8,375 in child support. In March 1981, Stephanie filed a Uniform Reciprocal Enforcement of Support Act (URESA) claim against Thomas while she was living in Texas. Thomas paid $1,000 on the claim but paid no child support after that date.

In the summer of 1981, both the youngest daughter, Erin, and the youngest son, Matthew, began living permanently with Thomas in Bozeman. Thomas never brought any action to modify the children’s support payments to reflect the change in circumstances. While the children lived with Thomas, Stephanie had weekly dinners with them but made no claim for child support. Matthew turned eighteen in April 1982. Stephanie brought the present action on January 25, 1985, less than one month before Erin turned eighteen.

Issue No. 1

Is a non-custodial father, who assumes permanent custody and support of the children with the consent of the custodial mother, relieved of the obligation to pay child support accruing after and during the consensual assumption of custody?

Generally, when child support becomes due under a dissolution decree, the support becomes a judgment debt similar to any other judgment for money. Section 40-4-208, MCA. In Re Marriage of Carlson (Mont. 1984), [214 Mont. 209,] 693 P.2d 496, 499, 41 St.Rep. 2419. Under this statute, the court may modify a child support award, but only upon a showing of changed circumstances or written consent of the parties. The statute allows only prospective, not retroactive, modification of child support. Section 40-4-208(1), MCA, provides: “[A] decree may be modified by a court as to maintenance or support only as to installments accruing subsequent to the motion for modification.” Previously, we held that the statute barred modification of child support in arrears. “A divorce decree cannot be modified to cancel past due and unpaid child support.” Dahl v. Dahl (1978), 176 Mont. 307, 310, 577 P.2d 1230, 1232. Following the equitable principles expressed in three recent cases, we overrule Dahl and its progeny.

In State of Washington ex rel. Blakeslee v. Horton (Mont. 1986), [222 Mont. 351,] 722 P.2d 1148, 43 St.Rep. 1321, we applied equitable principles to bar collection of past due and unpaid child support installments. Blakeslee noted the totality of the circumstances surrounding the parents’ relationship with the children, and the oral support agreement which had governed their relationship for fourteen years. Citing the Blakeslee district court, we stated:

“The law is clear that the arrearage in child support payment cannot be modified by the court upon any retroactive basis . . . These legal principles, however valid they may be as a general rule, are rendered impotent when the parties mutually agree that they be ignored and also carry out such agreement in actual fact . . . Equity cannot allow the mother to participate in nullification of the purpose of the law in fact and, at the same time, allow her to claim the benefit of it in theory, simply because there is a meter running which can total a dollar loss in child support. [Emphasis added.]” Blakeslee, 722 P.2d at 1050-1051.

Thomas Sabo accepted the children into his home and raised the children without any support from Stephanie, even though she was employed as a real estate agent after her return to Bozeman. Stephanie never asserted that her current request was founded upon any actual need of her children. Furthermore, she never suggested any implied need which had not been satisfied over the years, or which had now arisen and could possibly serve to validate her action at this belated point. See Blakeslee, 722 P.2d at 1151.

Although Thomas took no action to change the terms of the divorce decree, he accepted sole responsibility for the children’s health, welfare and support. During the period of Thomas’ care, Stephanie’s major contribution was sharing her Mexican vacation with Erin. Such inequity cannot validate her claim. “Although legally the mother may have been correct in her claim for child support, equity demands that the claim must fail. This Court has long adhered to such principles of equity.” Blakeslee, 722 P.2d at 1151.

The Sabo children'voluntarily moved in with Thomas. During the entire period the children lived with Thomas, Stephanie neither pursued support payments in arrears nor objected to the shift in custody. By her assent and conduct, Stephanie consented to the arrangement. As we recently held, “[T]he equitable principle arises when the mother has expressly or impliedly consented to an arrangement other than the payment of the judgment.” In Re Marriage of Cook (Mont. 1986), [223 Mont. 293,] 725 P.2d 562, 566, 43 St.Rep. 1732, 1737. This principle acknowledges that the real beneficiaries of the judgment are the children, not the person named in the judgment. In Cook, the mother was awarded custody and child support for the children. A few years after the divorce, the children began living permanently with the father. Upon his petition, the father was granted custody of the children several years later.

On the issue of child support in arrears, we agreed with the Cook district court that the parents had entered into a binding oral agreement modifying support and visitation. The father relied on the agreement to his financial detriment. We concluded that the mother was estopped from enforcing the support provisions of the decree after the date they entered into the oral agreement. “Furthermore, the changes in the children’s residences represented changed circumstances so substantial and continuing as to make enforcement of (the father’s) original and modified support obligation unconscionable.” Cook, 725 P.2d at 566.

Never, during the entire period that the Sabo children were being raised by Thomas, did Stephanie offer any financial assistance to Thomas. In Cook, we noted that circumstances may not allow the mother to collect child support in arrears, “where the husband has made expenditures which constitute substantial compliance with the spirit and intent of the decree.” Cook, 725 P.2d at 566. Thomas has met both the spirit and the purpose of child support obligations. Thomas did not abrogate his duties and obligations under the decree of dissolution. On the contrary, he assumed the duties of the custodial parent by default, after Stephanie relinquished them.

Stephanie consented to the change in custody and support. The question now becomes whether consensual modification of child support is enforceable in Montana and the extent of any such enforcement.

Upon compelling evidence, the doctrine of equitable estoppel may override the provisions of Section 40-4-208, MCA. This principle was best articulated in In Re the Marriage of Jensen (Mont. 1986), [223 Mont. 434,] 727 P.2d. 512, 515, 43 St.Rep. 1891, 1894-1895.

“We therefore hold that in Montana a decree for support may be modified on equitable grounds by a court where there is clear and compelling evidence of the terms of an oral agreement or modification. We further hold such modification may be applied only to maintenance and support payments to be made subsequent to the oral agreement for modification.”

These conclusions “are consistent with both Blakeslee and Cook where we enforced oral agreements pertaining to installments of support subsequently accruing.” Jensen, 727 P.2d at 516, 43 St.Rep. at 1894.

Under the equitable principles of Blakeslee, Cook and Jensen, we hold that Thomas substantially complied with the decree obligations. By her assent and conduct, Stephanie consented to the shift in custody and support. We cannot equitably allow Stephanie to reap a windfall of support payments, if she never made the support expenditures. “A party to an agreement which has been performed for some length of time is estopped to deny its validity.” Jensen, 727 P.2d 516, 43 St.Rep. at 1895. Thomas is therefore relieved of the obligation to pay any child support accruing after and during his consensual assumption of custody.

On Issue No. 1, we reverse.

Issue No. 2

Did substantial evidence support the court’s finding that Stephanie was a partner with Thomas in SACO Investments?

Thomas engaged in business activities with a realtor, Gene Cook, in SACO Investments. SACO’s primary purpose was investment in real estate. During the marriage, SACO bought some parcels known as the Hoff Property. In the settlement agreement, Thomas’ share of the parcels was identified as the jointly-held property of Thomas and Stephanie.

After the divorce, SACO sold the one remaining parcel of the Hoff Property for $14,000. However, Thomas did not tell Stephanie about the sale or give her any money from the sale. Stephanie later learned of the sale from Cook. Thomas contended that Stephanie was not a SACO partner and, therefore, not entitled to any proceeds. However, the District Court found that she was a partner and entitled to one-half of Thomas’ share. Therefore, the court awarded her one-fourth of the total proceeds plus interest, or $3,904.85.

The court’s finding was well supported. Various SACO deeds identify Stephanie as a partner. The deeds were prepared by Thomas as attorney for the partnership. Furthermore, in his original response to Stephanie’s divorce filing, Thomas signed a sworn statement that the only assets he held, personally and apart from the marital estate, were his car and law practice. In addition, Thomas signed the property settlement agreement, listing SACO properties as “jointly held properties.”

These documents, signed by Thomas, are substantial evidence that Stephanie was entitled to participate in the partnership property. We will not set aside the findings of the District Court unless there is a clear abuse of discretion. In Re the Marriage of Perry (Mont. 1985), [217 Mont. 162,] 704 P.2d 41, 43, 42 St.Rep. 1101, 1104. No such abuse existed in this case.

On Issue No. 2, we affirm.

MR. JUSTICES HARRISON, WEBER, MORRISON, SHEEHY, GULBRANDSON and HUNT concur.


author: MR. JUSTICE SHEEHY

text:
    MONTANA TAVERN ASSOCIATION, et al., Plaintiffs and Respondents, v. STATE OF MONTANA, acting By and Through the DEPARTMENT OF REVENUE, Defendant and Appellant.
    No. 86-189.
    Submitted on Briefs Sept. 4, 1986.
    Decided Dec. 11, 1986.
    729 P.2d 1310.

      Michael G. Garrity, Dept, of Revenue, Helena, for defendant and appellant.
    Philip W. Strope, Helena, for plaintiffs and respondents.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

The Department of Revenue, State of Montana, appeals the judgment of the District Court, Second Judicial District, Silver Bow County, enjoining the Department from enforcing its administrative rules to the detriment of the plaintiffs. We affirm the District Court for the reasons set forth below.

In 1984, this Court held electronic poker machines were illegal under the Montana Card Games Act. Gallatin County v. D & R Music & Vending (Mont. 1984), [208 Mont. 138,] 676 P.2d 779, 41 St.Rep. 224. The 49th Legislature of the State of Montana passed H.B. 236, Ch. 720, Laws of 1985 the following year. This law, known as the Video Draw Poker Machine Control Law of 1985, Sections 23-5-601 through -615, MCA, legalized the operation of electronic video draw poker machines in the State of Montana. The effective date of the law was July 1, 1985.

Pursuant to its authority under Section 23-5-605(2), MCA, the Department promulgated emergency administrative rules to become effective July 1, 1985. The Department certified the Notice of Adoption of Emergency Rules to the Secretary of State on June 17, 1985. The reason cited for adoption of the emergency rules was the insufficient time after the end of the 49th Legislative session in which to promulgate permanent rules. The Department further found that the lack of permanent rules between the effective date of the law and the adoption of permanent rules posed an imminent peril to public health, safety, and welfare, and also worked economic hardship on potential licensees and local governments.

On June 27, 1985, plaintiffs Montana Tavern Association and tavern owners Pavlovich, Keith, and Bullock, filed a complaint seeking to enjoin the Department from enforcing certain of its emergency rules. Plaintiffs claimed the Video Draw Poker Machine Control Law authorized three categories of video draw poker machines: (1) all used video poker machines in operation before February 3, 1984; (2) new video poker machines meeting the description and specifications of Section 23-5-606, MCA; and (3) used video poker machines in operation before February 3,1984 meeting all the specifications of Section 23-5-606 except Subsections (4)(j), (4)(k), and (4)(o). Plaintiffs argued that the Department’s emergency rules denied the owners of used video poker machines in category 1 the right to operate their machines. Plaintiffs claimed immediate and irreparable economic injury if they were not allowed to license their unmodified, used machines after July 1, 1985.

In its answer to the complaint, the Department responded that Section 23-5-612(2), MCA, required all used video poker machines to meet the requirements of Section 23-5-606 except Subsections (4)(j), (4)(k), and (4)(o) as a condition precedent to licensure. The Department also argued that its emergency administrative rules complied with the provisions of the statute.

The same day the complaint was filed, the District Court granted a temporary restraining order against the Department, restraining it from enforcing those sections of the emergency rules which imposed the specifications of Section 23-5-606, MCA, upon used video poker machines. The restraining order was to be in effect until a hearing was set on the issuance of a preliminary injunction.

A hearing on the preliminary injunction was held July 8,1985. The District Court found that the Video Draw Poker Machine Control Law was ambiguous, in that it could be construed to authorize three types of machines. The court also found that plaintiffs would be irreparably injured if they were not allowed to operate their unmodified, used machines, and that plaintiffs at that time were unable to buy the necessary modification kits. The court found the public health, welfare and safety would not be endangered by licensing these used machines, and granted plaintiffs’ preliminary injunction.

The Department petitioned this Court for a writ of supervisory control, which was denied October 31, 1985. The District Court extended the preliminary injunction from November 7, 1985 until a final hearing in December, 1985. On February 3, 1986, the District Court entered its final judgment enjoining the Department from enforcing the Video Draw Poker Machine Control Law and its administrative rules in such a way as to deny plaintiffs the right to keep licenses for, and to maintain and operate, used video poker machines which were owned and operated in Montana before February 3, 1984.

The Department raises four issues on appeal:

(1) Whether the District Court properly issued the injunctions requiring the Department to license unmodified, used video poker machines?

(2) Whether the District Court erred in construing Section 23-5-612(2), MCA?

(3) Whether the District Court erred in admitting evidence on legislative intent?

(4) Whether the District Court erred in ordering injunctive relief to persons who were not parties to the lawsuit?

The plaintiffs respond that the issues raised by the Department are moot, since the relief prayed for by the Department (dissolution of the District Court’s injunction) has been available to the Department since June 30, 1986, within the terms of the District Court’s judgment. We find that the issues are not moot.

An issue is moot when, due to an event or passage of time, the issue has ceased to exist and no longer presents an actual controversy. State ex rel. Miller v. Murray (1979), 183 Mont. 499, 503, 600 P.2d 1174, 1176; Baker v. Bink (Mont. 1986), [223 Mont. 375,] 726 P.2d 822, 823, 43 St.Rep. 1801, 1803. In the instant case, the Department was forced to license a total of 474 used video poker machines under the District Court’s injunction. While most of the licenses for these used machines have expired, there are still 13 machines remaining whose licenses expire between November 7, 1986 and January 21, 1987. The District Court’s judgment remains in effect as to these 13 machines until their present licenses expire. Thus an actual controversy exists as to the legitimacy of the licensure of these machines.

The first issue raised by the Department concerns whether the District Court properly issued its injunction. Under Section 27-19-103(4) and (6), MCA, an injunction cannot be granted either to prevent the execution of a public statute by officers of the law or to prevent the exercise of a public office in a lawful manner. The Department argues the District Court’s injunctions prevent the Department, its Director, and employees from enforcing the Video Draw Poker Machine Control Law. We must turn to the terms of the District Court’s injunctions to determine whether those terms are inconsistent with the Video Draw Poker Machine Control Law thereby preventing the Department’s enforcement of it. In reviewing the District Court’s issuance of the injunctions, we will not interfere with the court’s exercise of discretion unless there is a showing of manifest abuse of such discretion. Smith v. Ravalli Co. Bd. of Health (Mont. 1984), [209 Mont. 292] 679 P.2d 1249, 1251, 41 St.Rep. 716, 718; Erie v. State Highway Comm’n. (1969), 154 Mont. 150, 154, 461 P.2d 207, 209.

The District Court’s first temporary restraining order set forth the license criteria to be used by the Department during the pendency of the order. The court ordered all used video poker machines to meet the following basic requirements in addition to all other provisions of the Video Draw Poker Machine Control Law, and the emergency administrative rules not in conflict with the restraining order. The license criteria were:

“(a) Licensee must be a person who has been granted a license under Section 16-4-401(2), MCA, to sell alcoholic beverages for consumption on the premise [sic]. [See Section 23-5-611, MCA.]
“(b) The used machine must be a machine that was owned and operated in the state on or prior to February 3, 1984. County or city tax receipts, county or city license receipts, bills of sale, security documents for conditional sales agreements, or such other kinds of proof of ownership as the Department of Revenue may authorize will be sufficient to establish ownership or operation of a used machine on or before February 3, 1984. [First sentence corresponds to Section 23-5-602(4), MCA; proof of ownership was not described in the statutes or regulations — an applicant merely checked a box on the license application indicating ownership on or before February 3, 1984.]
“(c) The machine must have an expected payback value of one credit played to be at least 80% of the value of the credit. [See Section 23-5-607, MCA.]
“(d) Each used machine must have an electronic device that the department may use to verify the winning percentage. [See Section 23-5-607, MCA.]
“(e) The licensee must pay to the state of Montana the license fee of $1,500 and such other and additional charges as the city or county in his home district may require. [See Section 23-5-612(l)(b), MCA.]
“(f) Each licensee licensed under the authority of this temporary restraining order must make his machines available for inspection by the Department of Revenue at any reasonable time. [See Section 23-5-613, MCA.]”

It is well settled in Montana that the purpose of a temporary restraining order is to preserve the status quo until a hearing can be held to determine whether an injunction should be granted. Boyer v. Karagacin (1978), 178 Mont. 26, 32, 582 P.2d 1173, 1177. None of the criteria set forth by the District Court change or contravene the Video Draw Poker Machine Control Law. If licensees meet the above requirements plus the requirements of the statutes and the non-conflicting portions of the administrative regulations, the Department is required to issue the license. Licensure is mandatory, not permissive, under Section 23-5-612(1)(a), MCA. Thus the District Court’s temporary restraining order did not prevent the Department from executing its duties under the Video Draw Poker Machine Control Law.

The District Court’s preliminary injunction reiterated the above criteria and continued to enjoin the Department from denying licenses to owners of used video poker machines which met the criteria. For the reasons stated above, we again hold that the preliminary injunction did not prevent the Department from executing its duties under the Video Draw Poker Machine Control Law.

The final judgment rendered February 3, 1986, enjoined the Department from enforcing the law in such a way as to deny plaintiffs the right to keep licenses which had been issued pursuant to the court’s orders. The owners of these licenses were allowed to retain their licenses for a one year period from the date of licensure. The licenses could not be renewed, and new licenses for used video poker machines could not be issued for the first time under the terms of the court’s order. Further, the court provided that its order would terminate after June 30, 1986. On that date, the Department was given the choice of terminating the licenses for the used machines and crediting those licensees for the unexpired portion of their licenses, or merely allowing the licenses to expire on their own. The Department has apparently chosen the second alternative — and the last of the licenses granted under the court’s order will expire January 21, 1987.

We do not find any abuse of discretion in the District Court’s final order. An injunction is an equitable remedy fashioned according to the circumstances of the case. Madison Fork Ranch v. L & B Lodge Pole Timber Products (Mont. 1980), 189 Mont. 292, 615 P.2d 900, 906, 37 St.Rep. 1468, 1474; Brown v. Voss (1986), 105 Wash.2d 366, 715 P.2d 514, 517. In this case, the Department adopted its emergency rules on June 27, to be effective July 1. The plaintiffs risked losing their used, unmodified machines on July 1 unless they could buy modification kits or new machines within three days. New kits were not availablfe at that time. Their only remedy was to seek injunctive relief. Under these circumstances the District Court found that plaintiffs would suffer irreparable injury if they lost the use of the used, unmodified machines since the old machines would have to be abandoned or, alternatively, the owners would be forced to buy considerably more expensive new machines. The issuance of an injunction under these circumstances was not unreasonable. It was also proper for the court to structure the terms of the final order so as to protect the licensees and also limit the time for them to come into compliance with the new law.

The second issue concerns whether the District Court erred in construing Section 23-5-612(2), MCA. This Subsection is a grandfather clause for used video poker machines, allowing their licensure until July 1, 1987. The Department argues the court either misconstrued the plain meaning of, or entirely disregarded, the provisions of Section 23-5-612(2).

A general rule of statutory construction is that the intent of the legislature must first be determined from the plain meaning of the words of the statute. Montana Ass’n. of Underwriters v. State, Dept. of Admin. (1977), 172 Mont. 211, 215, 563 P.2d 577, 579. Where the statute is ambiguous, a court will show deference to the interpretations given the statute by the agency charged with its administration. State Dept. of Highways v. Midland Materials (Mont. 1983), [204 Mont. 65,] 662 P.2d 1322, 1325, 40 St.Rep. 666, 669. However, the agency’s interpretation must be reasonable so as to avoid absurd results. Id. Further, where the legislative intent appears contrary to the agency’s interpretation, a court may overturn the interpretation as an abuse of discretion. City of Billings v. Bill ings Firefighters Local No. 521 (1982), 200 Mont. 421, 431, 651 P.2d 627, 632.

We find, as did the District Court, that Section 23-5-612(2) is susceptible to two meanings. “A used video draw poker machine may be licensed under Subsection (1) without meeting the requirements of Section 23-5-606(4)(j), (4)(k), and (4)(o) . . .” could mean either that all used machines may be licensed without meeting the requirements of (4)(j), (4)(k), and (4)(o), or that the used machines must meet all the requirements of Section 23-5-606, MCA, except for (4)(j), (4)(k), and (4)(o). In light of this ambiguity, the court was required to look at the Department’s interpretation of this subsection, and to uphold the interpretation, if reasonable.

The Department interpreted Section 23-5-612(2), MCA, to mean that all used video poker machines must meet all administrative rule specifications and the requirements of' Section 23-5-606, MCA, except (4)(j), (4)(k), and (4)(o). Rule III (4)(a), Emergency Rules, 12 M.A.R. 805 (6/27/85). The result of this interpretation would have been to force all owners of used machines not meeting the above specifications to abandon or modify their machines within three days, since the effective date of the emergency rules was three days after their adoption. Even assuming owners were to try to modify the used machines in that time period, modification kits were not available in the marketplace at that time at a reasonable cost. The District Court’s rejection of the Department’s interpretation of Section 23-5-612(2) was proper, where an affirmance of that interpretation would lead to absurd results.

The Department also argues the court should not have admitted evidence of legislative intent, since the meaning of Section 23-5-612(2), MCA, is clear on its face. As we stated above, Section 23-5-612(2) is susceptible to two meanings, and in light of this ambiguity, the court was entitled to delve into the legislative history of the subsection in order to determine legislative intent. The evidence, consisting of a typed statement signed by members of the 49th Legislative Assembly and the oral testimony of two state representatives, was properly admitted where legislative intent could not be determined from the words of the statute. A reviewing court is not required to rubber-stamp an administrative rule which is inconsistent with a statutory mandate or which frustrates legislative policy. Hi-Craft Clothing Co. v. N.L.R.B. (3rd Cir. 1981), 660 F.2d 910, 914.

The final issue raised by the Department is that the District Court exceeded its personal jurisdiction by granting injunctive relief to persons other than those specifically named as plaintiffs in the complaint. The Department argues that under the provisions of Section 27-19-104, MCA, in an action for injunctive relief initiated by a public interest association, a complaint must set forth the names and addresses of the injured members of the association. The Department reads Section 27-19-104, MCA, together with Section 27-19-105, MCA, to mean that an injunction may only be binding upon parties whose names and addresses appear on the complaint.

We find no merit in this argument. The plaintiff Montana Tavern Association alleged in paragraph II of its complaint that it was a voluntary trade association representing persons holding liquor licenses in the State of Montana. The Department admitted this allegation in its answer. The Department will not now be heard to challenge the adequacy of plaintiff Montana Tavern Association’s capacity. Under Rule 9(a), M.R.Civ.P., challenges to a party’s authority to sue in a representative capacity must be done by specific negative averment, including such particulars as are peculiarly within the pleader’s knowledge. The Department did not meet this requirement by admitting paragraph II of plaintiff’s complaint.

In the interests of judicial economy, it was within the District Court’s equitable jurisdiction to grant temporary injunctive relief to the plaintiffs and others similarly situated where there were common subject matter, facts and issues. The scope of the injunctions was narrow — the preliminary injunction applied only to those liquor license owners who had owned and operated video poker machines before February 3,1984; the final order merely restrained the Department from revoking the licenses of those tavern owners. Additionally, the final order had a built-in termination clause which foreclosed the possibility of relicensing the unmodified machines. The District Court did not abuse its discretion in fashioning this equitable result.

We affirm the order of the District Court and order the parties to bear their own costs.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, MORRISON, WEBER, GULBRANDSON and HUNT concur.

      . The section of the judgment in question states:
      “This order will terminate and have no force and effect after June 30,1986, except for used video draw poker machines previously licensed by the Defendants for twelve (12) month periods. For these machines this order will terminate and have no force and effect after the expiration of the twelve (12) month license period, but not before. However, the Defendants will have the option of terminating such licenses on June 30, 1986, providing they allow licensees credit for the unexpired portion of their license period on said machine on any new license issued for the year commencing July 1, 1986. No used video draw poker machines will be licensed for the first time nor relicensed for a second period under the terms of this order after the date hereof, unless the used machine complies with the Defendants’ administrative rules in effect upon application date.”

      . Section 23-5-612(2). A used video draw poker machine may be licensed under Subsection (1) without meeting the requirements of 23-5-606(4)(j), (4)(k), and (4)(o) if the applicant for licensure can establish to the satisfaction of the department that, on the date of application, he owns or possesses a machine which was owned or operated in the state prior to February 3, 1984. A license issued under this subsection expires 1 year from the date of issuance or on July 1, 1987, whichever occurs first. (Subsection (2) terminates July 1, 1987 — Section 15, Ch. 720, L. 1985.)

      . Testimony of a bar owner at the July 8, 1985 hearing indicated that the only kit available within the next few weeks would cost $2,000, whereas in three or four months, the components could be purchased for $75.


author: MR. JUSTICE HUNT

text:
    DELORES ADSEM, surviving spouse and Personal Representative of the Estate of Richard Allen Adsem, Deceased, Plaintiff and Appellant, v. RICHARD ROSKE and R.H. Grover, Inc., a Montana Corp., Defendants and Respondents.
    No. 86-226.
    Submitted on Briefs Sept. 18, 1986.
    Decided Dec. 11, 1986.
    Rehearing Denied Jan. 6, 1987.
    728 P.2d 1352.
    Small, Hatch, Doubek & Pyfer, John C. Doubek, Helena, for plaintiff and appellant.
    Worden, Thane & Haines, Martin S. King, Missoula, Alexander & Baucus, J. David Slovak, Great Falls, for defendants and respondents.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

This is an appeal from a summary judgment entered by the First Judicial District, Lewis and Clark County in favor of the defendants, Roske and Grover, Inc. Plaintiff Delores Adsem appeals. We affirm.

There are two issues on appeal. Did the District Court err in granting summary judgment? Does the plaintiff have a remedy outside of the Montana Workers’ Compensation Act?

Richard Adsem was killed in a construction accident at the Capital Hill Mall sewer line project in Helena, Montana. He was installing pipe in a trench 11-12 feet deep with no sloping or shoring of the walls when the walls of the trench collapsed and Adsem suffocated. Adsem maintains that the employer knew the trench was unsafe, and that a cave-in was likely and yet ordered him into the trench, which collapsed on him.

Delores Adsem, Richard Adsem’s widow, filed this wrongful death suit against Richard Roske, a co-employee and foreman of the crew, and R.H. Grover, Inc., the company that employed both Adsem and Roske. The suit alleged that the “intentional and malicious acts and omissions” of the defendants caused Adsem’s death.

The District Court granted summary judgment in favor of the defendants. The District Court held that there was “simply nothing in the record which would lead one to believe that Roske or his employer, Grover, intentionally inflicted the injuries upon Adsem of which he later died.” (Emphasis in original.)

The District Court held that the Workers’ Compensation benefits which Adsem had already received was her exclusive remedy and granted summary judgment.

Summary judgment is proper where there are no issues of material fact and the moving party is entitled to judgment as a matter of law. Noonan v. Spring Creek Forest Products, Inc. (Mont. 1985), [216 Mont. 221,] 700 P.2d 623, 42 St.Rep. 759; Herron v. Pack & Co. (Mont. 1985), [217 Mont. 429,] 705 P.2d 587, 42 St.Rep. 1303.

The two issues raised by appellant are two ways of stating the same issue: Did the District Court err in holding that Workers’ Compensation is Adsem’s exclusive remedy? We hold it did not.

The exclusivity provision of Workers’ Compensation is first addressed in Art. II, Section 16, 1972 Mont. Const, which states:

“Courts of justice shall be open to every person, and speedy remedy afforded for every injury of person, property, or character. No person shall be deprived of this full legal redress for injury incurred in employment for which another person may be liable except as to fellow employees and his immediate employer who hired him if such immediate employer provides coverage under Workers’ Compensation Laws of this state .... (Emphasis added.)”

That constitutional mandate is implemented by Section 39-71-411, MCA as to employers and Section 39-71-413, MCA, as to employees. Section 39-71-411, MCA, as to employers provides:

“. . . Except as provided in part 5 of this chapter for uninsured employers and except as otherwise provided in the Workers’ Compensation Act, an employer is not subject to any liability whatever for the death of or personal injury to an employee covered by the Workers’ Compensation Act or for any claims for contribution or indemnity asserted by a third person from whom damages are sought on account of such injuries or death. The Workers’ Compensation Act binds the employee himself, and in case of death binds his personal representative and all persons having any right or claim to compensation for his injury or death, as well as the employer and the servants and employees of such employer and those conducting his business during liquidation, bankruptcy, or insolvency.”

Section 39-71-413, MCA as to employees provides:

“If an employee receives an injury while performing the duties of his employment and the injury or injuries so received by the employee are caused by the intentional and malicious act or omission of a servant or employee of his employer, then the employee or in case of his death his heirs or personal representatives shall, in addition to the right to receive compensation under the Workers' Compensation Act, have a right to prosecute any cause of action he may have for damages against the servants or employees of his employer causing the injury. (Emphasis added.)”

This Court has held that “the ‘intentional harm’ which removes an employer from the exclusivity clause of the Workers’ Compensation Act is harm maliciously and specifically directed at an employee, or class of employees out of which such specific intentional harm the employee receives injuries as a proximate result.” Great Western Sugar Co. v. District Court (1980), 188 Mont. 1, 7, 610 P.2d 717, 720.

Further, we have held that where the facts show only that the employer operated a hazardous and dangerous work place, no intentional conduct exists. Noonan, supra. In Noonan, the facts showed that the planer Noonan was working had been broken for over a month. Noonan had requested that it be fixed but it was not. Noonan was told not to turn the planer off as it would slow production. He was required to run the planer regardless of safety. The on/off switches were mislabeled. The employer knew it was in violation of OSHA regulations. There had been prior accidents on the machine but the employer concealed that fact from Noonan. The employer’s policy was to run the equipment until it broke down, at which time the employees would be laid off. We held such conduct, while negligent, does not rise to the level of intentional conduct. Mr. Justice Morrison, in a concurrence, stated:

“I believe the legislature intended Workers’ Compensation to be the exclusive remedy except in those situations where the defendants’ conduct arose from specific intent rather than willfulness. In other words, an assault would allow a personal injury action. Gross negligence, such as we have here, would not.”

Noonan, 700 P.2d at 626, 42 St.Rep. at 763. That statement is illustrated by Sitzman v. Schumaker (Mont. 1986), [221 Mont. 304,] 718 P.2d 657, 43 St.Rep. 831, in which we held that an employer who repeatedly hit his employee over the head with a lead pipe could be sued in tort for the damages he inflicted under the intentional act exception to the exclusivity rule.

The conduct of the employer in the case at hand is, at most, gross negligence, but it does not rise to the level of intentional conduct as defined in the prior decisions of this Court.

The District Court was therefore correct in granting summary judgment in favor of the defendants. Adsem’s exclusive remedy in the case is under the Workers’ Compensation Act.

Affirmed.

MR. JUSTICES MORRISON, WEBER, SHEEHY and GULBRANDSON concur.