author: JUSTICE TRIEWEILER DISTRICT JUDGE LARSON

text:
    MACKLIN D. BERRY, Plaintiff and Appellant, v. KRTV COMMUNICATIONS, INC., d/b/a KRTV 3, Defendant and Respondent.
    No. 92-330.
    Submitted August 30, 1993.
    Decided December 15, 1993.
    50 St.Rep. 1617.
    262 Mont. 415.
    865 P.2d 1104.

      For Plaintiff and Appellant: Patrick F. Flaherty (argued), Great Falls.
    For Defendant and Respondent: Robert P. Goff and Jean E. Faure (argued), Church, Harris, Johnson & Williams, Great Falls.
    For Amicus Curiae: Donald C. Robinson and J. Richard Orizotti (argued), Poore, Roth & Robinson, Butte (for Patrick Kearney); Daniel B. McGregor, Montana Department of Labor and Industry, and Jerome T. Loendorf, Harrison, Loendorf & Poston, Helena (for Montana Broadcasters).
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Plaintiff Macklin D. Berry commenced this action against defendant KRTV Communications, Inc., in the District Court for the Eighth Judicial District in Cascade County to recover overtime pay, bonuses, statutory penalties, and attorney fees from his employer. The District Court granted his employer’s motion for summary judgment and dismissed plaintiff’s claim with prejudice based on its conclusion that his claim for overtime pay was barred by the federal Fair Labor Standards Act (FLSA) and that he was not entitled to any bonus pay under the plain terms of his employment contract. Plaintiff appeals from the District Court’s decision. We reverse in part, and affirm in part, the judgment of the District Court.

The following issues are presented on appeal.

1. Did the District Court err when it held that plaintiff was a covered employee under the Fair Labor Standards Act found at 29 U.S.C. §§ 201 through 219 (1988), and therefore, that he was not entitled to benefits for overtime work pursuant to § 39-3-405, MCA, of Montana’s Minimum Wage and Maximum Hour Act?

2. Did the District Court err by holding as a matter of law that plaintiff was not entitled to bonus pay pursuant to the terms of his contract with his employer?

FACTUAL BACKGROUND

In his complaint filed in the District Court on October 5, 1990, Berry alleged that he had been employed at KRTV, Inc., from 1986 through 1989 in various capacities. Principal among his responsibilities, however, were news editing and announcing. He alleged that from July 29, 1986, through May 19, 1989, he worked in excess of 1211 overtime hours for which his employer had refused to compensate him at the appropriate rate for overtime work.

Berry also alleged that his contract with KRTV provided for a 14 percent bonus when the station’s local news led its competition under certain circumstances, and that he had satisfied the conditions for the bonus, but that KRTV had refused to pay him.

Berry sought compensation for his overtime pay in the amount of $17,456.56, a bonus in the amount of $10,850.00, the statutory penalties provided for in Montana’s wage statutes, and attorney fees.

In its answer to Berry’s complaint, KRTV denied the substance of his allegations. However, more importantly for purposes of this appeal, it alleged that since he was employed as a news editor and announcer during his tenure at the station, it was not obligated to pay him overtime benefits under the terms of the federal FLSA.

On March 31, 1992, KRTV moved for summary judgment. In support of its motion, it offered affidavits from Donald G. Bradley, Patricia Roberts, and Peter Friden.

Bradley was president of KRTV Communications and stated that the defendant is licensed by the FCC as a television station with call letters KRTV. To establish that it was covered by the provisions of the federal FLSA, he stated that defendant had gross receipts from the operation of its station in excess of $500,000 per year, employed more than one employee, and was engaged in interstate commerce.

Bradley stated that under his ownership the station had employed Berry from December 18, 1986, until May 19, 1989, in various capacities, including bureau chief of the news department, news anchor, and reporter for the news department. He pointed out that his principal responsibilities in those positions included gathering and editing news, and acting as an announcer of news during the station’s nightly news broadcasts.

Bradley stated that Berry’s eligibility for bonus pay was limited by the terms of his written contract for employment, a copy of which was attached to his affidavit. The written contract of employment provided in relevant part as follows:

KRTV will pay you a bonus of 14 percent of your base pay when our local news at 5:30 and 10:00 p.m. leads our competition. Determination will be based on ratings and shares in the DMA [designated market area] according to the same ratings service (Nielsen or Arbitron), for two consecutive rating periods.

Bradley stated that KRTV’s competition were stations known by the call letters KFBB and KTGF, and attached copies of Nielsen and Arbitron ratings during the period of Berry’s employment which established that at no time during that employment did KRTV lead both stations for two consecutive rating periods.

Patricia Roberts was an employee of the Montana Department of Commerce whose affidavit was offered to establish that the population in Great Falls, according to the 1990 census, was 55,097 people, and that the population of the Great Falls metropolitan statistical area (coextensive with Cascade County) was 77,691 people. As will be pointed out later in this opinion, these figures were relevant to determination of whether Berry was covered by, or exempted from, terms of the federal FLSA.

Peter Friden stated that he was the general manager of KRTV during part of the time that Berry was employed there and further described the nature of Berry’s work for the station.

In opposition to his employer’s motion for summary judgment, Berry did not offer facts to controvert those offered by KRTV. Instead, he contended that, based on those undisputed facts, he was entitled to overtime pay pursuant to Montana’s Minimum Wage and Maximum Hour Act found at §§ 39-3-401 through -409, MCA, and our decision in Plouffe v. Farm & Ranch Equipment Company (1977), 174 Mont. 313, 570 P.2d 1106. He also argued that a reasonable interpretation of the bonus provision in his employment contract was that it entitled him to a bonus if KRTV led either of its competitors in the ratings for two consecutive rating periods, and that it had, in fact, done so.

The District Court granted KRTV’s motion for summary judgment by its decision entered on May 6, 1992. In support of that decision, the court found as fact those statements made in the previously discussed affidavits. The only findings of fact challenged by Berry on appeal are findings numbered 11 and 13. In Finding No. 13, the District Court found that Berry’s “competition” was both of the other television stations in Great Falls. In Finding No. 11, the District Court found that Beriy did not meet the requirements for a bonus during the period of his employment with KRTV.

Based on these findings, the District Corot concluded that KRTV is an employer in an enterprise engaged in commerce as those terms are defined in the FLSA at 29 U.S.C. §§ 203(d) and 203(s)(l) (1988), and that Berry was an employee as defined in 29 U.S.C. § 203(e) (1988). The District Court concluded that, although covered by the FLSA, KRTV was not required to pay Berry overtime benefits under that Act based on the exemption provided in 29 U.S.C. § 213(b)(9) (1988), which pertains to announcers and news editors. However, because of its conclusion that Berry was covered under the federal Act, the court concluded that he was entitled to no overtime benefits pursuant to § 39-3-408, MCA, in the Montana Act.

The District Court concluded that its decision was not controlled by our decision in Plouffe, but rather by our more recent decision in Wage Claims of Stewart v. Child and Family Services (1990), 242 Mont. 88, 788 P.2d 913.

Based on these findings and conclusions, Berry’s complaint was dismissed with prejudice and judgment was entered in favor of KRTV.

STANDARD OF REVIEW

This Court reviews an order of summary judgment by utilizing the same criteria used by a District Court initially under Rule 56, M.R.Civ.P. Minnie v. City of Roundup (1993), 257 Mont. 429, 849 P.2d 212. Pursuant to Rule 56(c), summary judgment is proper when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law.

I.

Did the District Court err when it held that plaintiff was a covered employee under the Fair Labor Standards Act found at 29 U.S.C. §§ 201 through 219 (1988), and therefore, that he was not entitled to benefits for overtime work pursuant to § 39-3-405, MCA, of Montana’s Minimum Wage and Maximum Hour Act?

In this case, we are once again called upon to construe the relationship of the federal FLSA and the Montana Minimum Wage and Maximum Hour Act. We have had occasion to do so previously in both Plouffe, 174 Mont. 313, 570 P.2d 1106, and Stewart, 242 Mont. 88, 788 P.2d 913. In Stewart, we summarized the history and purpose of both Acts as follows:

In 1938, Congress passed the Fair Labor Standards Act to prevent the use of unfair trade practices in interstate commerce leading to “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers. ...” 29 U.S.C. § 202(a). To ensure a minimum living standard, the F.L.S.A. establishes a minimum hourly wage, 29 U.S.C. § 206, and a maximum workweek without overtime compensation, 29 U.S.C. § 207. Part of the Act’s enforcement mechanism allows employees to recover all unpaid wages plus an equal amount in liquidated damages for any violation of its wage and hour provisions. 29 U.S.C. § 216(b). Although nationwide in scope, the F.L.S.A. does not cover all employees. See 29 U.S.C. § 203(e); 29 U.S.C. § 213.
In 1971, the Montana Legislature enacted the Minimum Wage and Maximum Hour Act. Like the federal Act, the M.W.M.H.A. ensures workers a minimum living standard by setting minimum hourly wages, § 39-3-404, MCA, and maximum allowable work hours per week, § 39-3-405, MCA. Also like the F.L.S.A., the M.W.M.H.A. allows employees to recover unpaid wages plus up to 100% in liquidated damages, § 39-3-407, MCA; § 39-3-206, MCA.

Stewart, 788 P.2d at 917.

The District Court held that because Berry was covered by the federal Act, he could not recover benefits for overtime work under the Montana Act based on § 39-3-408, MCA, which provides in relevant part that:

(1) The provisions of this part shall be in addition to other provisions now provided by law for the payment and collection of wages and salaries but shall not apply to employees covered by the Fair Labor Standards Act except as provided in subsection (2).

Subsection 2 pertains to minimum wages and is not applicable to this claim. However, the District Court also concluded that while Berry was covered by the federal Act he was not entitled to compensation for overtime worked under that Act pursuant to 29 U.S.C. § 213(b)(9) (1988), which provides that:

(b) Maximum hour requirements. The provisions of § 207 [29 U.S.C. § 207] shall not apply with respect to —
(9) Any employee employed as an announcer, news editor, or chief engineer by a radio or television station the major studio of which is located (A) in a city or town of one hundred thousand population or less, according to the latest available decennial census figures as complied by the Bureau of Census, except where such city or town is part of a standard metropolitan statistical area, as defined and designated by the Office of Management and Budget, which has a total population in excess of one hundred thousand....

On appeal, Berry contends that pursuant to 29 U.S.C. § 213(b)(9) (1988), he was not covered under the FLSA, and therefore, pursuant to our decision in Plouffe, he was entitled to the overtime protection provided for in Montana’s Minimum Wage and Maximum Hour Act. He concludes that, since under the Montana Act there is no exemption for news announcers or editors, he is entitled to overtime pay.

The Montana Department of Labor and Industry has filed an amicus brief in which it concurs with Berry’s position.

KRTV responds that because it is an employer covered by the FLSA, according to criteria set forth in 29 U.S.C. § 203 (1988), its employees are also covered by the terms of the Act. Its argument continues that since it is covered under the federal Act, the Montana law regarding overtime wages is not applicable pursuant to § 39-3-408, MCA, of the Montana Act which excludes from coverage employees covered by the federal FLSA. Finally, it contends that, even though covered by the federal Act, Berry is entitled to no benefits for overtime work under that Act because of the exemption provided for in 29 U.S.C. § 213(b)(9) (1988), and that the necessity of this conclusion is established by our decision in Stewart.

We conclude that the facts in this case are more similar to those in the Plouffe case than in the Stewart case, and therefore, that Plouffe controls our decision.

In Plouffe, the plaintiff was a former employee of the defendant who worked as a farm equipment mechanic for a business engaged in the sale and repair of farm equipment. He sued to recover overtime wages and vacation pay pursuant to Montana’s Minimum Wage and Maximum Hour Act, now codified at §§ 39-3-401 through -409, MCA. His employer defended on the basis that his claim under the Montana Act was preempted by the federal FLSA and that under the federal Act it was exempt from an obligation to pay him overtime benefits. In that case, the employer relied on the very next subsection of 29 U.S.C. § 213(b) (1988) after the one relied on in this case. It provided:

(b) Maximum hour requirements. The provisions of § 207 [29 U.S.C. § 207] shall not apply with respect to —
(10)(A) any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements, if he is employed by a non-manufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers ....

As in this case, the district court in Plouffe concluded that, by the nature of its business, that employer was exempt from the requirements of Montana’s Minimum Wage and Maximum Hour Act and dismissed plaintiff’s complaint. However, on appeal, relying on 29 U.S.C. § 213(b)(10) (1988), we held that the FLSA expressly exempted the employer in this case from paying overtime wages to the plaintiff, and therefore, that the employer was not exempt from payment of overtime wages under the Montana Minimum Wage and Maximum Hour Act.

In arriving at our decision in Plouffe, we concluded that there was an express intent by our national Congress not to preempt the field of wage and hour regulation through the enactment of29U.S.C.§218 (1988), which provides in relevant part that:

(a) No provision of this chapter or of any order thereunder shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher than the minimum wage established under this chapter or a maximum work week lower than the maximum work week established under this chapter....

We concluded that since the class of employees to which Plouffe belonged was exempted from the maximum hour protection of the federal FLSA, and since § 218 of the Act specifically authorized states to enact stricter standards for wages and maximum horns, that:

[T]he Fair Labor Standards Act does not preempt the subject of wage, hour or overtime regulation to the exclusion of Montana’s Minimum Wages and Hours Act ....

Plouffe, 174 Mont. at 313, 570 P.2d at 1109.

In our review of Plouffe, we note that we expressly stated:

We hold that the federal Fair Labor Standards Act expressly exempts the employer in this case from paying overtime wages to plaintiff. Section 207 of the Fair Labor Standards Act provides that no employer shall employ any of his employees for a workweek longer than 40 hours unless such employee receives time and a half his regular rate of pay for the excess. Section 213 provided:

“Exemptions ...
“(b) The provisions of Section 207 of this title shall not apply with respect to — ...
“(10) Any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trailers, trucks, farm implements, or aircraft if employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles to ultimate purchasers.” ....
This exemption from payment of overtime wages clearly applies under the admitted facts of this case.

Plouffe, 570 P.2d at 1107. However, in our concluding summary, we stated as follows:

In summary, we hold that the Fair Labor Standards Act does not preempt the subject of wage, hour or overtime regulation to the exclusion of Montana’s Minimum Wages and Hours Act; that the employer here is not exempt from payment of overtime wages under either the Fair Labor Standards Act exemption or Montana’s Minimum Wages and Hours Act....

Plouffe, 570 P.2d at 1109.

It must be kept in mind that a principal issue in Plouffe was whether the claimant was precluded from coverage under the State Act based on the doctrine of federal preemption. The employer in that case argued that he was exempt from payment of overtime benefits under either state or federal law because the exemption in federal law preempted coverage under the state law. However, after discussing § 218 of the FLSA, we concluded there was no preemption, and that is what was referred to in our summary paragraph when we stated that the employer was not exempt from payment of overtime wages under the federal Act. While unartfully stated, that section clearly referred to the employer’s federal preemption argument. In order that there may be no misunderstanding from Plouffe, we expressly construe the opinion in Plouffe to mean that the federal FLSA exempted the employee from coverage.

The concurring opinion criticizes Plouffe for not discussing § 39-3-408, MCA. However, that section was not raised by the employer as a defense in that case. It makes no difference. Section 39-3-408, MCA, is simply a codification of federal preemption, and by resolving the issue of federal preemption, the Plouffe case addressed the very same issue that is raised in this case pursuant to § 39-3-408, MCA.

KRTV argues that our decision in Plouffe should not control the outcome of this case because 15 years has passed since that decision; its result is questionable in light of our decision in Stewart, and the effect of § 39-3-408, MCA, was not discussed in Plouffe. First, we note that the passage of time has not changed the statutory law relied on in Plouffe, nor the necessary conclusions from its application. Second, we conclude that § 39-3-408, MCA, does not pertain to Berry because pursuant to the exemption provided for in 29 U.S.C. § 213(b)(9) (1988), he is not an employee covered by the FLSA with regard to overtime payment. Finally, the facts in our decision in Stewart are clearly distinguishable from this case.

In Stewart, the plaintiffs were employees of a defendant corporation which provided residential care facilities for the developmentally disabled and multiply handicapped. The duties required that they spend overnight on their employer’s premises. However, if they received five consecutive hours of uninterrupted sleep, they were compensated for only the time they spent attending to clients. If they did not receive five consecutive hours of uninterrupted sleep, they were paid for the entire overnight period. The employer established this policy in reliance on opinions from employees of the Wage and Hour Division of the United States Department of Labor.

The claimants in the Stewart case filed claims for the time spent on their employer’s premises when they were sleeping and uncompensated. In defense to the employees’ claims, the defendant in Stewart argued that since it had been advised by a government official that it was complying with the law, it had an affirmative defense to its employees’ claims pursuant to the good faith defense provided by the Portal-to-Portal Act codified at 29 U.S.C. §§ 216,251 through 262 (1988). The District Court concluded that if the claims were barred under the federal Act, then there was coverage under Montana’s Minimum Wage and Maximum Hour Act. On appeal, we reversed based on a distinction between lack of coverage under the federal Act and an affirmative defense to a claim under the federal Act. Significantly, we noted that “[i]n the present case, the parties do not dispute that the claimants are subject to the F.L.S.A.” Stewart, 242 Mont. 88, 788 P.2d at 918. We distinguished Plouffe on the grounds that the employee in that case was not covered by the Act. We noted that:

In Plouffe v. Farm & Ranch Equipment Co., the F.L.S.A. exempted the employer from federal wage regulation. We held that by enacting F.L.S.A. § 218, Congress declined to preempt the entire field of wage and hour regulations and, therefore, the employee could still rely on the M.W.M.H.A. Plouffe, 174 Mont. at 319-20, 570 P.2d at 1109. Because the F.L.S.A. never applied to the employee, we did not need to decide if the employee was covered by both the federal and the Montana Acts.

Stewart, 788 P.2d at 919.

Finally, we concluded that since the employees in Stewart were covered by the federal Act, and since the employer in Stewart had satisfied the good faith affirmative defense as a matter of law by relying on interpretations of the Administrator of the Wage and Hour Division of the United States Department of Labor in formulating its overnight policies, the employees’ claims were barred.

In summary, Stewart is distinguishable from the present case because the parties in that case did not dispute that the employees were covered by the FLSA; they were not the subject of specific exemption from coverage under the FLSA; and Berry is the subject of special exemption pursuant to 29 U.S.C. § 213(b)(9) (1988) which, as we pointed out in Stewart, requires the conclusion that the FLSA did not apply to him.

We conclude that the Legislature’s intent to provide greater overtime protection for the class of employees to which Berry belongs is further evident from an examination of Montana’s statutory exemptions in comparison to the federal exemptions.

The federal exemptions from overtime protection are found at 29 U.S.C. § 213(b) (1988) and currently include 20 classifications of employees.

The Montana exclusions are found at § 39-3-406(2), MCA, and include 22 classifications of employees which are, for the most part, patterned after their federal counterparts. Notably, however, Montana did not adopt the exclusion found at 29 U.S.C. § 213(b)(9) (1988) which pertains to news editors and announcers employed by television stations.

Therefore, we conclude that pursuant to the exemption found at 29 U.S.C. § 213(b)(9) (1988), Berry was not covered by the federal FLSA with regard to compensation for hours worked over 40 hours per week while he was employed at KRTV. We furthermore conclude that when the Legislature of this State adopted Montana’s Minimum Wage and Maximum Hour Act, it was aware of the exemptions provided for in the federal Act and chose to provide a maximum work week for employees in Berry’s classification which is lower than the maximum work week provided for under the federal FLSA. Therefore, pursuant to 29 U.S.C. § 218 (1988), Montana is not preempted from providing overtime protection to Berry, and he is entitled to overtime compensation pursuant to § 39-3-405, MCA.

II.

Did the District Court err by holding as a matter of law that plaintiff was not entitled to bonus pay pursuant to the terms of his contract with his employer?

Berry was entitled to a bonus during the period of his employment with KRTV when KRTV led its competition for two consecutive rating periods. Berry contends that either of the other two television stations in Great Falls was KRTVs competition, and therefore, if KRTV led either of them for two consecutive rating periods, he was entitled to a bonus. He relies on § 28-3-206, MCA, which provides that language of a contract, when unclear, should be interpreted against the party who caused the uncertainty to exist.

KRTV responded, and the District Court agreed, that pursuant to our decision in Morning Star Enterprises v. R.H. Grover (1991), 247 Mont. 105, 805 P.2d 553, an ambiguity in a contract does not exist unless the contract is subject to two different interpretations and that the language in Berry’s contract is clear and unambiguous. KRTV cites the definition for “competition” from the American Heritage Dictionary where it is defined as “the rivalry between businesses driving for the same customer or market.”

Other than the general rules for construction referred to previously, neither party has cited any authority which directly resolves the dispute over this term in their contract. We are left to determine, as a matter of law, whether the term “competition,” when used to refer to business competitors, means all of those competitors or can pertain to each competitor individually. We look for guidance to Webster’s Ninth New Collegiate Dictionary 268 (1984) where competition, in the sense that it is used in this contract, is defined as “one’s competitors.”

Black’s Law Dictionary, while not discussing “competition” as a description of persons or parties, refers to it as:

Rivalry. The play of contending forces ordinarily engendered by an honest desire for gain. The effort of two or more parties, acting independently, to secure the custom of a third party by the offer of the most favorable terms. It is the struggle between rivals for the same trade at the same time; the act of seeking or endeavoring to gain what another is endeavoring to gain at the same time. [Citations omitted].

Black’s Law Dictionary 355-56 (4th ed. 1968).

We conclude, based on the general usage suggested by the previous authorities, that when used in a commercial setting the term “competition” refers to all those persons or parties competing for the same trade or economic interest. For that reason, we affirm the District Court’s conclusion that KRTV’s “competition,” as referred to in its contract of employment with Berry, included the Great Falls television stations known by the call letters KFBB and KTGF, and that based upon the uncontroverted documentation provided by KRTV, it did not lead its “competition” for two consecutive rating periods during Berry’s period of employment with that station.

Based upon these conclusions, we affirm the District Court’s judgment which dismissed Berry’s claim for payment of a bonus pursuant to the terms of his contract with KRTV, and we reverse that part of the District Court judgment which dismissed Berry’s claim for overtime pay pursuant to the Montana Minimum Wage and Maximum Hour Act.

JUSTICES HUNT, HARRISON and WEBER concur.

DISTRICT JUDGE LARSON

specially concurring.

Although the majority’s result is correct, it is useful to track the Legislature’s actions since Plouffe does not address § 39-3-408, MCA, the pivotal statute in the case at bar.

Plouffe does not raise, nor does it address, the effect of § 39-3-408, MCA, which provides that the overtime pay provision of § 39-3-405, MCA, “shall not apply to employees covered by the Fair Labor Standards Act except as provided in subsection (2).” Subsection (2) is inapplicable in this case. The issue in the case at bar, therefore, is whether plaintiff is “covered by the FLSA.” Plouffe does not address the definition of “covered” as used in § 39-3-408(1), MCA, despite the fact that at the time Plouffe was decided, the predecessor to § 39-3-408(1), MCA, provided that Montana’s minimum wage, maximum hours, and overtime pay provisions “shall not apply to employees covered” by the FLSA. Section 41-2307, R.C.M. 1947. Plouffe, then, did not consider a statute that was highly relevant to the case at bar.

Because Plouffe is unhelpful, and Stewart is distinguishable from the present case, as noted by the majority, the Court must fall back on the legislative history of Montana’s minimum wage and overtime compensation provisions as contained in §§ 39-3-401 through -409, MCA, to determine whether the Legislature intended news editors, such as plaintiff, to be entitled to overtime pay.

As noted by the majority, § 39-3-406, MCA, contains numerous exclusions to Montana’s overtime pay provisions, most of which are patterned on the exclusions in the FLSA. The Montana Legislature has amended § 39-3-406, MCA, six times since 1981, including most recently, in the 1993 regular legislative session. These amendments added a total of twelve exclusions to the statute, none of which relate to news editors employed by television stations in small cities. Thus, despite the fact that the FLSA contains a specific exclusion for such news editors, and despite ample opportunity to do so, the Legislature has never chosen to incorporate that exclusion in the Montana statute. The only possible conclusion is that the Legislature has specifically decided not to exclude news editors in small cities from coverage by the Montana overtime pay provisions.

Thus, the majority is correct in holding that the FLSA does not cover plaintiff in this particular case, and that since plaintiff is not excluded from the Montana overtime pay provisions, plaintiff is entitled to overtime pay pursuant to the Montana provisions.

CHIEF JUSTICE TURNAGE and JUSTICE GRAY join the foregoing special concurrence.


source: Caselaw Access Project

author: JUSTICE WEBER

license: Public Domain

text:
    JEROME J. CATE and the CATE LAW FIRM, P.C., Plaintiffs and Appellants, v. FIRST BANK (N.A.) - BILLINGS, Defendant and Respondent.
    No. 93-150.
    Submitted on Briefs October 5, 1993.
    Decided December 16, 1993.
    50 St.Rep. 1624.
    262 Mont. 429.
    865 P.2d 277.

      For Plaintiffs and Appellants: Robert L. Stephens, Jr., R.L. Stephens, P.C., Billings.
    For Defendant and Respondent: Gregory G. Murphy, Moulton, Bellingham, Longo & Mather, Billings.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal from the Thirteenth Judicial District Court, Yellowstone County, granting First Bank summary judgment on all issues. We affirm.

Appellant appeals the District Court’s grant of summary judgment to First Bank. However, he only argues on appeal count five of his complaint that alleges a breach of the covenant of good faith and fair dealing. Therefore, we consider the following issues on appeal:

1. Did the District Court err in granting summary judgment to First Bank on the issue of breach of the covenant of good faith and fair dealing?

2. Did the District Court err in failing to grant Cate’s cross-motion for summary judgment concerning alteration of records?

Jerome J. Cate (Cate) is a Billings attorney. In 1978, Cate left Billings to accept a position with the Attorney General’s office. He returned to Billings five years later to once again establish his practice. Cate began to borrow money from First Bank in Billings (First Bank). Cate’s initial loan was for $15,000 but within two years the balance owed had escalated to $127,691.

During February of 1985, Cate signed a final promissory note for the entire account balance payable in full by June 14,1985. The loan was to be paid by funds gained from a successful court case. Sometime after the loan became past due, First Bank asked Cate for additional verification that the case would be over soon. The case was settled on September 17,1985, and Cate paid the loan in full.

In November of 1985, Cate’s office manager asked First Bank whether it would lend the Cate firm additional funds. First Bank informed the office manager that it would not lend Cate any more money for the operation of his firm.

Two and one-half years later, on February 2,1988, Cate brought a six count complaint against First Bank alleging: (1) breach of fiduciary duty; (2) breach of contract; (3) defamation of credit; (4) breach of statutory duty; (5) breach of the covenant of good faith and fair dealing; and (6) that the matters alleged in counts one through five constituted wanton and malicious acts entitling Cate to punitive damages. First Bank filed its answer on February 19,1988.

On March 14, 1990, First Bank filed a motion for summary judgment. Several years passed with no action taken on the lawsuit and on March 24,1992, First Bank again moved for summaryjudgment. Cate then filed a cross-motion for summaryjudgment in April of1992, alleging that First Bank had altered his banking records, causing liability on the part of First Bank as a matter of law and that material issues existed precluding summary judgment.

The District Court issued its Order and Judgment on October 12, 1992. That order granted First Bank summary judgment on all issues. Cate appeals this order.

I.

Did the District Court err in granting summary judgment to First Bank on the issue of breach of the covenant of good faith and fair dealing?

Cate argues that First Bank breached its covenant of good faith and fair dealing by refusing to loan him additional money and by altering its own bank records to bolster its decision not to loan him such money. First Bank argues that once Cate paid the overdue $127,691 loan in full, it had no obligation to loan him additional funds. Further, contends First Bank, Cate presented no evidence to the District Court concerning record-tampering. First Bank argues that Cate never modified his initial complaint to add a charge having to do with alteration of records and that letters submitted on appeal from Cate’s alleged expert cannot be considered because they are not part of the record.

The District Court determined that no contract existed between Cate and First Bank following Cate’s payment of the overdue $127,691 loan. According to the court, First Bank was under no obligation to loan more money to Cate. Without a contract, the court determined that First Bank did not breach the covenant of good faith and fair dealing. The court determined that Cate had not supplied it with any evidence to substantiate his claims of alteration of bank records.

On review of a grant of summary judgment, we use the same standard as that of the District Court. We determine whether the moving party has presented evidence that no genuine issues of material fact exist and also whether the moving party is entitled to judgment as a matter of law. Rule 56(e), M.R.Civ.P.; McCracken v. City of Chinook (1990), 242 Mont. 21, 788 P.2d 892. Once this burden has been satisfied, the non-moving party then has the subsequent burden to demonstrate the presence of a genuine issue as to some material fact. Peschel v. Jones (1988), 232 Mont. 516, 760 P.2d 51. The burden carried by the non-moving party must be met with some precision. Duensing v. Traveler’s Companies (1993), 257 Mont. 376, 849 P.2d 203.

Here, First Bank presented evidence that it had satisfied its contract obligation to Cate and that Cate had paid the overdue loan. The record indicates that the contract between Cate and First Bank had been satisfied and that no subsequent contract had been entered into. First Bank presented adequate law to support its contention that it could not be guilty of a breach of the covenant of good faith and fair dealing because no subsequent contract existed between it and Cate. First Bank met its burden and, therefore, the burden shifted to Cate to provide evidence that issues of material fact existed with regard to Cate’s claim of breach of the covenant of good faith and fair dealing.

In order to recover on the theory of the implied covenant of good faith and fair dealing, there must be an enforceable contract to which the covenant attaches. Beaverhead Bar Supply, Inc. v. Harrington (1991), 247 Mont. 117, 805 P.2d 560. Although Cate is correct that the implied covenant is concerned with the “justifiable expectations” of the parties, those expectations concern the parties’ responsibilities under the terms of a contract:

The nature and extent of an implied covenant of good faith and fair dealing is measured in a particular contract by the justifiable expectations of the parties.

Tresch v. Norwest Bank of Lewistown (1989), 238 Mont. 511, 514, 778 P.2d 874, 875-876 citing Nicholson v. United Pacific Ins. Co. (1985), 219 Mont. 32, 41-42, 710 P.2d 1342, 1348.

Cate cites Blome v. First Nat’l Bank of Miles City (1989), 238 Mont. 181, 776 P.2d 525, for the proposition that a contract breach is not needed for the covenant to apply.

The Shiplets seek to distinguish this authority by noting in Nicholson, we held a breach of contract was not a prerequisite to a breach of the covenant, because the implied covenant of good faith is not an obligation arising from the contract itself. Nicholson, 710 P.2d at 1348. While this is true, we also stated the obligation imposed by the covenant is to act reasonably. Under this standard, we have held the ‘minimal requirement! for breach of the covenant is action by the defendant that is ‘arbitrary, capricious or unreasonable, and exceeded plaintiffs’ justifiable expectation [that the defendant act reasonably]! (Emphasis added.)

Blome, 238 Mont. at 188, 776 P.2d 525. Cate then attempts to divorce the finding of a breach of the covenant from a contract altogether. He argues in essence that if he had “justifiable expectations” of continued credit, he has proven a breach of the covenant. This is not true. Those “justifiable expectations” must attach to a party’s actions within the confines of its duties under a contract. If there is no contract, express or implied, concerning continued credit to Cate, then there can be no “justifiable expectations” that are pertinent here.

The Blome decision upon which Cate relies goes on to cite evidence indicating that First Bank acted within the confines of its responsibilities under the terms of its lender contracts. Thus, Cate’s use of Blome for his argument that all that is needed to find First Bank’s breach of the covenant is his “justifiable expectations” concerning future credit is a mischaracterization of the law.

We also stated in Blome that:

Nothing in the evidence suggests anything more than a day-to-day or month-to-month financing arrangement, based upon a review of the financial condition of the borrowers at the time the notes were executed and delivered. Particularly, there is no indication in the Bank memoranda or any oral evidence that the Bank did not expect the notes to be paid when due nor any agreement outside the notes for loans to the Blomes when they needed them, and without regard to the necessity of repayment. (Emphasis added.)

Blome, 238 Mont. at 186, 776 P.2d at 528. The record before us reflects banking circumstances similar to those that existed in Blome. The facts in both cases indicate that the applicable notes and contracts contained specific pay-back dates. Therefore, it was a “justifiable expectation” on the part of both parties that the borrowers would repay the loan on the due dates.

Cate has offered no evidence that a contract existed entitling him to “justifiable expectations” of continued financing. He stated in his own deposition that the bank officer with whom he had discussed a future $250,000 line of credit, did not have the authority to make such an agreement. There is no indication from the depositions that First Bank’s contract contains a provision for future financing once the $127,691 loan amount was paid; thus, no express contract existed concerning future loans. Further, there is no evidence to suggest that First Bank’s conduct implied a future contract. The record contains no evidence of specific terms that would indicate by First Bank’s conduct that they had reached an agreement to continue the financial arrangements. See Section 28-2-103, MCA.

We conclude that because no contract, express or implied, existed between Cate and First Bank to lend Cate additional sums of money, there could be no breach of the covenant of good faith and fair dealing. We hold that the District Court did not err in granting summary judgment to First Bank on the issue of breach of the covenant of good faith and fair dealing.

II.

Did the District Court err in failing to grant Cate’s cross-motion for summary judgment concerning alteration of records?

Cate argues that he was familiar with First Bank comments on his account sheets and that these comments had been changed. Cate also argues that his office manager, Clyde Bonsack, testified during his deposition that the records as produced by First Bank are at variance with the policy and recollection of the officers in connection with their normal preparation. Cate argues that had he been permitted to introduce evidence from his expert, that evidence would have corroborated First Bank’s alteration of records.

First Bank argues that Cate attempted to have his expert added to the list of witnesses a month after the deadline that the court set for the presentation of expert witness lists for both parties. First Bank protested this untimely addition, as it protested the addition of other experts which Cate attempted to add several months after the first attempt. According to First Bank, no law exists that requires it to keep its records of loan comments in any particular form or that prohibits any modification once the comment is written. Further, First Bank argues that indications are that Cate’s expert would testify to the fact that several comments were written on the same day as opposed to the dates listed for loan transactions. First Bank contends that even if this is true, Cate makes no connection between such activity and any “alteration” of records or any impermissible activity on the part of First Bank.

The court stated in its October 14, 1992 order and memorandum that no affidavits or other factual matters were included in the file which would substantiate Cate’s claim of alteration of records.

Cate claims that genuine issues of material fact exist concerning whether bank records were altered so that the court erred in granting summary judgment to First Bank on the issue of the implied covenant of good faith and fair dealing. In order to rebut First Bank’s successful motion for summary judgment, Cate had to prove that genuine issues of material fact existed. Oar Lock Land & Cattle Co. v. Crowley, Haughey, Hanson, Toole, & Dietrich (1992), 253 Mont. 336, 833 P.2d 146. In order to effectuate an adequate rebuttal, Cate had to present facts of a substantial nature; speculative statements are insufficient to raise genuine issues of material fact. First Sec. Bank of Bozeman v. Jones (1990), 243 Mont. 301, 794 P.2d 679.

The record in this case does not contain such substantial facts. Because of the procedural anomalies in this case, it is necessary to lay out the circuitous procedures in order to understand Cate’s lack of substantial facts. In an untimely move, Cate attempted to add expert testimony concerning document analysis over a month beyond the date that the court had set for distribution of fists of each party’s experts. Subsequently, First Bank filed a motion in limine to exclude all of Cate’s experts because he had not complied with the court’s order concerning discovery. Further, Cate’s notices were inadequate, failing to contain any mention of the issues to which each expert would testify as required by Rule 26(b)(4)(A)(i), M.R.Civ.P.

At one point in this action, a substitution of judges occurred which caused delay. The second judge issued an order on September 25, 1991, setting a trial date of November 16, 1992, and a pretrial conference on October 29, 1992. He also set a status conference for October 17, 1991, for the court’s consideration of the approximately ten unresolved motions before it. However, at this status conference, Cate’s representative was not his attorney of record. The judge ordered Cate’s attorney of record to call the court and reschedule the status conference. There is no record that this was ever done. Therefore, there is no final resolution of the various motions in this case, one of which is whether Cate’s expert on documents is able to testify.

Nothing happened until March 24, 1992, when First Bank again filed a motion for summary judgment. In April of 1992, Cate filed a cross-motion for summary judgment based upon his allegation that First Bank altered records and, therefore, he was entitled to summary judgment as a matter of law. In his brief on this motion, Cate attached a copy of the letter from his expert witness, dated March 1, 1990. The letter stated that he had made a “preliminary” analysis of copies of the bank comment sheets. This same letter is also in Cate’s appeal brief.

On May 20, 1992, Cate filed a motion with the District Court to add additional discovery to the record. One of those items is the March 1,1990 letter from his expert on document analysis. The expert who wrote the letter is the same one that Cate had earlier attempted to add to his untimely list of experts.

The letter states that several of the bank loan comments were made at one sitting. No significance is attached to this. Further, the letter which Cate bases his rebuttal on is not the final opinion of its author. The letter states:

My conclusions about the unnatural uniformity of the typed entries and of the initials on the three questioned pages are preliminary in the sense that confirmation would require my analysis of the original record rather than photocopies.

The record contains no indication that the originals were ever sent to the expert. The record contains no affidavit from the expert confirming his initial opinion; nor does it contain an analysis indicating impermissible activity on the part of First Bank.

Although Cate cites § 32-1-491(1), MCA, as the authority for no allowable modification of bank records, he does not explain the huge chasm between the statute’s requirement that banks keep records and his determination that this means that a bank cannot modify such records. Neither does Cate explain how recording several loan comments at one sitting amounts to “alteration of records” or constitutes an impermissible banking activity. Even if First Bank’s general procedure is to record one comment on one day, doing otherwise does not constitute bad faith behavior per se. No authority is presented to us which would indicate that First Bank’s course of dealing here was in any way impermissible activity.

We conclude that Cate has not provided substantial evidence that genuine issues of material fact exist. Neither has he presented any law which would entitle him to summary judgment. We, therefore, hold that the District Court did not err in failing to grant Cate’s cross-motion for summary judgment concerning alteration of records.

Affirmed.

JUSTICES HARRISON, HUNT, NELSON and TRIEWEILER concur.


text:
    ELOISE SIMONS, Claimant, Respondent and Cross-Appellant, v. STATE COMPENSATION MUTUAL INSURANCE FUND and RESERVE STREET PET & FOOD SUPPLY, Defendant, Appellant and Cross-Respondent.
    No. 93-259.
    Submitted on Briefs October 21, 1993.
    Rehearing Denied Feb. 3, 1994.
    Decided December 16, 1993.
    50 St.Rep. 1628.
    262 Mont. 438.
    865 P.2d 1118.

      For Appellant: Kristi Blazer, Assistant Attorney General, Agency Legal Services Bureau, Helena.
    For Respondent: Morgan M. Modine, Modine & Thompson, Missoula.
   JUSTICE WEBER

delivered the Opinion of the Court.

The State Compensation Mutual Insurance Fund (State Fund) appeals the decision of the Workers’ Compensation Court which found in favor of claimant. Claimant cross-appeals the denial of attorney fees, costs and a 20% penalty. We affirm.

The issues presented for our review are:

1. Did the Workers’ Compensation Court err in excluding a previously undisclosed surveillance tape from evidence at trial?

2. Did the Workers’ Compensation Court err in giving greater weight to the testimony of the treating physician than to the testimony of the State Fund’s expert?

3. Did the Workers’ Compensation Court err in denying attorney fees, costs and a 20% penalty?

At the time of the injury involved in this appeal, Eloise B. Simons (Simons) worked as a dog groomer for Reserve Street Pet and Food Supply/A-1 Grooming in Missoula, Montana. She had been a dog groomer for approximately twenty years, at times self-employed and at times working for others.

On June 20,1991, Simons was grooming a standard poodle which weighed over fifty pounds. As she carried the poodle from the grooming table to the bathing tub, her left arm gave way and she dropped the dog to the floor. Simons finished grooming the dog with another worker’s assistance and then sought medical attention for an injury to her left arm and left shoulder.

Two separate claims arose from that accident. Simons was treated for carpal tunnel syndrome and she received benefits under the Occupational Disease Act relative to that injury. She also was treated for an injury to her left shoulder area which involved the rhomboid and trapezius musculature. The shoulder injury is the subject of this appeal.

On the day of injury, Simons sought treatment from Dr. Woltanski at the Western Montana Clinic Now Care facility. On June 25,1991, Simons saw Dr. Moseley, an orthopedic surgeon. Dr. Russo, a neurologist, also examined Simons on that day and confirmed Dr. Moseley’s diagnoses. Dr. Moseley became Simons’ treating physician for both injuries. Dr. Moseley diagnosed bilateral carpal tunnel syndrome and a strain of the left rhomboid muscle group sustained by lifting the dog. He recommended surgical treatment for the carpal tunnel syndrome and physical therapy for the rhomboid strain. Dr. Moseley later testified that his diagnosis and the injury were compatible with the description of the accident supplied to him by Simons.

Dr. Moseley performed carpal tunnel surgery on both wrists. Simons’ claim for the injury to her wrists was settled prior to trial under the Occupational Disease Act. The State Fund accepted liability for Simons’ shoulder injury under the Workers’ Compensation Act.

On August 30,1991, after recovery from the carpal tunnel surgeries, Dr. Moseley noted that Simons was asymptomatic in both hands and the neck and released her to return to work without restrictions. Simons returned to work at Reserve Street Pet and Food Supply/A-1 Grooming for a period of about five weeks, resuming a normal workload and work activities.

On October 2, 1991, after working in her previous occupation for four or five weeks, Simons saw Dr. Moseley for pain in her wrists. On January 17,1992, Simons again saw Dr. Moseley, this time complaining of intermittent pain in the left trapezius and upper rhomboid muscles. Dr. Moseley concluded that Simons suffered from a mild chronic strain syndrome in the upper left trapezius and that the injury should not preclude her from working in an occupation that would not involve vigorous overhead lifting. He further concluded that her condition was medically stationary and was unlikely to improve. Dr. Moseley assessed a 3% whole person impairment, attributing 1% to the left shoulder and 1% to each wrist. Dr. Moseley also restricted Simons from doing work which involved vigorous overhead lifting.

After that determination by Dr. Moseley, Simons asked for and received successive work restrictions. On April 21,1992, Dr. Moseley restricted Simons to lifting no more than 15 pounds overhead and no more than 30 pounds to chest level and restricted Simons from working overhead and at shoulder level. The State Fund then retained a vocational rehabilitation consultant to perform an employ-ability assessment. Relying primarily on information supplied by the time-of-injury employer, the consultant concluded that Simons was employable at Reserve Street Pet and Food Supply/A-1 Grooming.

Dr. Burton performed an independent medical examination of Simons on behalf of the State Fund on August 12,1992. He concluded that Simons’ left shoulder was impaired and the disability caused by the injury would make it difficult for her to work as a dog groomer. He later recanted that conclusion based on evidence that the Workers’ Compensation Court found inadmissible. The Workers’ Compensation Court excluded certain portions of Dr. Burton’s deposition testimony because he was shown a tape of Simons grooming her horses which had not been disclosed to the claimant and because he based a portion of his testimony on a tape of someone — whom he incorrectly assumed was Simons — grooming a standard poodle. The court stated its belief that “reliance upon Dr. Burton’s changed assessment ... would be unfair” and that it was proper to give greater weight to the physician with the greater knowledge of the claimant’s condition — in this case, the treating physician.

The parties stipulated that Simons injured her left arm and shoulder on June 20,1991, while lifting a fifty-pound poodle while at work. The State Fund has paid medical expenses and $747.50 in permanent partial disability benefits to Simons for her left shoulder. It contested the amount of temporary benefits, contended that Simons was not entitled to permanent and rehabilitative benefits, argued that a preexisting left shoulder problem was the cause of the problem and contended that the injury had not resulted in any disability that prevented a return to dog grooming as an occupation.

The Workers’ Compensation Court found in favor of Simons. The findings and conclusions referred to both the dog grooming and horse exercising videotapes as admissible. After that decision, the State Fund requested the Workers’ Compensation Court to amend all findings and conclusions that were based on the inadmissibility of the dog grooming videotapes and requested additional findings and conclusions that allowed for the consideration of Dr. Burton’s testimony based on the dog grooming videotape. The court denied the request because it involved the videotape that led to Dr. Burton’s mistaken assumption that the claimant was the dog groomer depicted in the videotape. The court amended certain findings and conclusions which incorrectly labeled the dog grooming tape as “inadmissible” in its findings.

The court reviewed the record and amended several findings and conclusions, but again determined that Simons had met her burden of proof by establishing by a preponderance of the probative, credible evidence that she suffers a disability due to her shoulder injury. Further facts will be provided as necessary throughout the remainder of this opinion.

L

Did the Workers’ Compensation Court err in excluding a previously undisclosed surveillance tape from evidence at trial?

The State Fund contends that the Workers’ Compensation Court erred when it excluded videotapes and the expert testimony which was based on the videotapes. The videotapes excluded from evidence showed Simons performing various grooming and exercising activities with her horses. One of the videotapes was a lengthy surveillance tape filmed by her former employer without her knowledge. The other tape was an edited version of the first surveillance tape which also showed Simons performing activities. The second surveillance tape excluded the time periods in the first tape when Simons was performing no physical activity and is substantially shorter than the unedited version.

Dr. Burton, the independent medical examiner, had initially concurred with Dr. Moseley, Simons’ treating physician. He later changed his mind after viewing a surveillance videotape and a dog grooming videotape provided by the State Fund for purposes of his expert medical opinion.

Dr. Burton was deposed during the one-day recess of the trial. The Workers’ Compensation Court refused to admit the surveillance videotape and portions of Dr. Burton’s testimony which related to that videotape because the videotape had not been listed as an exhibit in the Pretrial Order pursuant to the requirements of § 24.5.318(5)(g), ARM.

Section 24.5.318(5)(g), ARM, requires disclosure of substantive exhibits intended to prove a material point in issue. Although the court refused to allow the videotape into evidence because the State Fund had not disclosed it prior to the trial, it did allow the testimony of a former co-employee who testified to the contents of the videotape in a manner unfavorable to Simons. The Workers’ Compensation Court stated:

I frankly am not an advocate of surveillance tapes unless they can document that a claimant is essentially giving inconsistent stories [or verbal claims] which are inconsistent with what he or she is doing physically.

The State Fund contends that the videotape demonstrates such inconsistencies between Simons’ stories and her physical actions. It contends that the surveillance videotape was to be used as proper impeachment evidence and, thus, did not require disclosure. It further contends that the desired effect of impeaching the credibility of the witness requires nondisclosure of such evidence. According to the State Fund, the fact that impeachment evidence focuses on substantive issues — as is the case here — does not change its impeachment character; the primary purpose of the videotape was to demonstrate Simons’ ability to do tasks which she claimed an inability to perform.

The State Fund further argues that the outcome of this case was entirely dependent on expert medical testimony to determine whether Simons’ shoulder condition precludes her from employment as a dog groomer and that the medical testimony is entirely dependent on Simons’ statements to the medical providers. The State Fund asserts that Simons’ credibility should be the main focus on appeal and, thus, the impeachment evidence was crucial. We disagree.

The record contains substantial evidence specifically supporting the objective nature of certain medical findings. In this case, the Workers’ Compensation Court excluded the videotape because it portrayed Simons engaged in activities which she said she could perform on a limited basis. It did not impeach her credibility as is argued by the State Fund; rather, it verified portions of her testimony. We conclude that the surveillance videotape was intended to contradict other testimony and, thus, was direct evidence and subject to the requirements of § 24.5.318(5)(g), ARM. We conclude that the State Fund’s failure to list the evidence in the pretrial order resulted in the proper exclusion of the evidence.

Counsel for State Fund argued at trial that in addition to its character as impeachment evidence, the surveillance videotape was also rebuttal evidence. On appeal, she concedes that the tape was not proper rebuttal evidence. She states that she was unable to lay the foundation for the introduction of the surveillance videotape because medical depositions were taken during a one-day recess of the trial. Counsel further states that the order of presentation of evidence should be relaxed in workers’ compensation cases as procedural irregularities often occur (like the one-day postponement here). However, that is not within this Court’s purview. The legislature has spoken to this issue and has directed that the Workers’ Compensation Court is bound by the common law and the statutory rules of evidence. See § 39-71-2903, MCA.

Decisions on the admission of evidence are discretionary trial administration issues and, as such, are subject to review for abuse of discretion. Steer Inc. v. Department of Revenue (1990), 245 Mont. 470, 475, 803 P.2d 601, 603. We conclude that, without prior disclosure, the substantive nature of the surveillance videotape required the Workers’ Compensation Court to deny its admission at trial.

We hold the Workers’ Compensation Court properly exercised its discretion when it excluded the surveillance videotape from evidence because it was undisclosed direct evidence and not impeachment evidence.

II.

Did the Workers’ Compensation Court err in giving greater weight to the testimony of the treating physician than to the testimony of the State Fund’s expert?

The Workers’ Compensation Court concluded that the testimony of Simons’ treating physician, Dr. Moseley, merited greater weight than that of Dr. Burton who performed an independent medical examination of Simons. The court concluded that Dr. Moseley had the greater knowledge of Simons’ condition and, accordingly, his testimony carried greater weight.

Dr. Moseley was Simons’ treating physician for the June 20,1991 injuries. State Fund contends on appeal that fairness requires that Dr. Burton’s testimony be given more weight than Dr. Moseley’s opinions because Dr. Burton has greater knowledge about Simons’ physical condition and abilities, about her medical history, and about the physical requirements of dog grooming. Dr. Burton had been Simons’ treating physician at a previous time when Simons had suffered prior injury in her left shoulder and neck in an automobile accident.

This Court reviews the findings and conclusions of the Workers’ Compensation Court by determining whether there exists substantial credible evidence to support them. Hash v. Montana Silversmith (1993), 256 Mont. 252, 257, 846 P.2d 981, 984. However, where medical testimony is offered by deposition, this Court may review and reweigh the medical deposition testimony. McIntyre v. Glen Lake Irr. Dist. (1991), 249 Mont. 63, 67, 813 P.2d 451, 454.

Dr. Burton’s initial assessment agreed with Dr. Moseley’s opinion. This was based on both his prior treatment of Simons and his independent medical examination conducted subsequent to the June 20,1991 shoulder injury on August 12,1992. It was only after State Fund showed Dr. Burton additional videotapes that Dr. Burton revised his opinion.

One of the videotapes was the shortened version of the inadmissible surveillance videotape of Simons grooming her horse discussed in Issue I above. The other tape was a demonstration of a woman grooming a standard poodle which had been prepared by Simons’ counsel. This videotape depicted the woman carrying a fifty-pound poodle around a grooming shop. Dr. Burton mistakenly believed that the woman demonstrating the grooming of the standard poodle in that tape was the claimant. After viewing these tapes and after having a discussion with State Funds’s vocational rehabilitation consultant, Dr. Burton revised his opinion of Simons’ abilities.

After the State Fund filed its petition for a rehearing, the Workers’ Compensation Court issued its Order on Defendant’s Motion for Rehearing, stating as follows:

The claimant has met her burden of proof by establishing by a preponderance of the probative, credible evidence that she does in fact suffer a disability due to her shoulder injury. This Court generally gives deference to the opinion of the treating physician. In the present case, the treating physician was Dr. Moseley and he concluded that the claimant’s shoulder condition was compatible with her accident. Further, that opinion is consistent with Dr. Burton’s initial conclusion reached after he conducted an independent medical examination. Dr. Burton initially concluded that the claimant suffers a disability due to her shoulder injury.
The Court still believes that it is proper to give the most weight to the opinion of the treating physician in circumstances of the present case. Dr. Burton’s initial assessment change[d] after viewing the horse lunging tape and two dog grooming tapes. In one of the dog grooming tapes, Dr. Burton incorrectly assumed that the person doing the grooming was the claimant. Under such circumstances, the Court does not find sufficient justification for departing from the standard of deferring to the treating physician. ...
Conclusion of Law No. 2, paragraph number 7 on page 12 is amended to read as follows:
... The vocational rehabilitation counselor’s opinion was based on the limited information provided by the claimant’s time-of-injury employer.
Conclusion of Law No. 2, paragraph 10 on pages 12-13 is amended to read as follows:
The Court is somewhat limited in its consideration of the medical evidence. Given the fact that the independent medical examiner, Dr. Burton, initially concluded that the claimant has an impairment or disability due to her shoulder injury and later recanted that conclusion based on an inadmissible videotape and an incorrect assumption as to the identity of a dog groomer in a separate videotape, the Court believes that it would not be proper to give Dr. Burton’s second assessment more weight than that of the treating physician. (Emphasis supplied.)

We agree with the determination of the Workers’ Compensation Court that it would be improper to apportion greater weight to Dr. Burton’s testimony under the circumstances of this case. Although the Workers’ Compensation Court noted that the evidence preponderated in favor of Simons by the “narrowest of margins,” we conclude that the record contains substantial credible evidence to support that conclusion.

We hold the Workers’ Compensation Court did not err in giving greater weight to the testimony of the treating physician than to the testimony of the State Fund’s expert.

m.

Did the Workers’ Compensation Court err in denying attorney fees, costs and a 20% penalty?

On cross-appeal, Simons contends that she is entitled to attorney fees and costs under §§ 39-71-611 and 612, MCA, and that she is entitled to a 20% penalty under § 39-71-2907, MCA. At a minimum, according to Simons, costs should be awarded in this action as costs can be awarded without a finding of unreasonableness.

Section 39-71-611, MCA, mandates an award of costs if the insurer denies liability and the claim is later adjudged compensable. Costs are not mandated in a case such as this one where the insurer accepts liability. Attorney fees are also awarded if the Workers’ Compensation Court determines that the insurer’s conduct was “unreasonable.”

Section 39-71-612, MCA, allows discretionary awards of attorney fees and costs when the amount of an award is controverted and the Workers’ Compensation Court later grants a larger award than that paid or offered by the insurer. Like § 39-71-611, MCA, attorney fees may not be awarded to the claimant unless the court has determined that the insurer’s actions were “unreasonable.”

Section 39-71-2907, MCA, allows the Workers’ Compensation Court to penalize the insurer by awarding 20% more than the full amount of benefits due a claimant when the court determines that there has been unreasonable delay or refusal to make payments.

For an award of a 20% penalty, unreasonable conduct refers and is limited to delay or refusal to make payments. Simons contends that the State Fund did in fact act unreasonably in denying her benefits as the court’s final judgment awarded permanent partial disability benefits of $747.50, wage supplement benefits of $91.39 per week for 495 weeks, temporary total disability benefits of $4,974.10 which covers 24.29 weeks, and total rehabilitation benefits of $2,574.09 which covers 12.57 weeks.

A threshold finding of “unreasonable” conduct on the part of the insurer is necessary in this case for an award of costs and attorney fees. This is not limited to delay or refusal to make payments. The State Fund characterizes this as hinging on whether appellants have acted reasonably in defending Simons’ claim for workers’ compensation benefits.

State Fund argues that a defense in this case was both reasonable and essential because Simons had asked for much more than she was awarded and because her claim was “overreaching.” Simons counters that argument by contending that the question of whether the State Fund acted unreasonably has nothing to do with the amount of benefits which were asked for and the amount subsequently awarded to the claimant by the Workers’ Compensation Corut. We agree and also note that a defense is not reasonable merely because the insurer deems it is necessary to defend a claim. Unreasonable conduct on the part of the insurer also refers to the manner of conducting that defense.

As set forth above, factual findings made by the Workers’ Compensation Court are reviewed to determine whether there is substantial credible evidence in the record to support them. Simons contends that the State Fund has acted unfairly and unreasonably throughout this action. In addition to delay and refusal to make payments, she points out numerous particular examples of alleged unreasonable conduct. This includes the State Fund’s refusal to acknowledge that cash payments were made to Simons by her employer on a weekly basis which would raise the amount of temporary total disability payments and failure to investigate Simons’ claim that she was receiving the incorrect amount of temporary total disability benefits. Simons contends that defense counsel set up an elaborate “sting” operation so that the employer could film her preparing her horse to show to a purported buyer and then attempted to improperly use the evidence at trial. She also cites the State Fund’s refusal to refer her to the rehabilitation panel after she was given a permanent impairment rating and had reached maximum healing. Simons emphasizes the insurer’s refusal to pay wage supplement benefits when she went back to work at a minimum wage job, despite the fact that the treating physician determined Simons had suffered permanent injury and gave her an impairment rating. She also stresses defense counsel’s conduct in conjunction with Dr. Burton’s examination and concurrence with Dr. Moseley and the State Fund’s continued denial of benefits despite the fact that Dr. Burton agreed with Dr. Moseley.

The State Fund objects to Simons’ reference to matters outside the record — the “sting” operation — and contends that a defense was necessary and reasonable.

The court’s Conclusions of Law contain the following statement: The Court has been hindered throughout this case by the convenient forgetfulness of the parties, disappearance of key bits of evidence and the self-serving testimony by the parties. The Court reaches the conclusion that neither party is credible and both parties have been less than candid with the Court. The present case epitomizes Webster’s definition of a dog-and-pony show.

We conclude that there is substantial credible evidence in the record to support this conclusion and the Workers’ Compensation Court’s further conclusion that the insurer’s conduct in this case was not unreasonable.

A finding of “not unreasonable” is not the equivalent of reasonable conduct which should serve as an example for future cases. This case is an unfortunate example of questionable conduct on the part of the employer, the claimant and counsel for the insurer. Unfortunately, this conduct did not cease after the Workers’ Compensation Court issued its judgment. The less than straightforward presentation and occasional distortion of facts in the record — which was characteristic of the State Fund’s brief’s on appeal — is inappropriate and does not facilitate the appellate process.

We hold the Workers’ Compensation Court did not err in denying the claimant an award of attorney fees, costs and a 20% penalty.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, NELSON and GRAY concur.


text:
    JAMES R. WALKER, Claimant and Appellant, v. UNITED PARCEL SERVICE, Employer, LIBERTY MUTUAL FIRE INSURANCE COMPANY, Defendant and Respondent.
    No. 93-270.
    Submitted on Briefs October 28, 1993.
    Decided December 16, 1993.
    50 St.Rep. 1634.
    262 Mont. 450.
    865 P.2d 1113.

      For Claimant and Appellant: Stephen C. Pohl and Chris J. Ragar, Bozeman.
    For Defendant and Respondent: Larry W. Jones, Missoula.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal from a decision by the Workers’ Compensation Court denying permanent partial disability benefits. We reverse.

The sole issue before us is whether the Workers’ Compensation Court erred by determining that claimant’s current medical condition was not caused by the 1985 injury.

James R. Walker (Walker) began his employment with United Parcel Service (UPS) in 1981 and delivered packages in the Bozeman area. Prior to 1985, Walker was in excellent health and was considered to be an excellent employee. On September 12, 1985, Walker suffered a back injury while working for UPS. He stepped off a loading dock, struck his knee against a structure, and strained or sprained his back.

Because of the ensuing pain, Walker was forced to quit work early. The day after the injury, Walker was in severe pain and was unable to move out of his bed. Ultimately, Walker’s wife called an ambulance and Walker was taken to the emergency room and thereafter admitted. Medical personnel determined that Walker’s back was in spasms because of an injury to the ligaments in his lower back. Walker remained in the hospital for four days and was released while still experiencing pain.

He did not work for approximately two and one-half months following his injury. Walker returned to work and continued working for six more years before quitting his employment in January of 1992. He claims that his back has flared up on a number of occasions and that he has had to call the office while on his delivery route for a relief driver. Walker maintains that since the 1985 accident, he has had a persistent, dull pain in his back and that towards the end of every week it would get worse.

Walker’s pain became more severe in July of 1991 and remained with him continually. After calling in for a relief driver in January of 1992, UPS sent Walker home and told him not to return to work until his back was 100% well. He has not returned to work at UPS.

Northwest Mutual notified Walker that he would be receiving benefits because of an occupational disease. Walker believed, however, that he had sustained an injury. In 1992, he filed a petition with the Workers’ Compensation Court for permanent partial disability benefits based upon his 1985 injury. The Workers’ Compensation court heard the matter in December of 1992. The court issued its decision on May 7, 1993, finding that Walker was not permanently disabled as a result of the 1985 injury. Walker appealed.

Did the Workers’ Compensation Court err in denying permanent partial disability benefits based on its conclusion that claimant’s current medical condition was not caused by the 1985 injury?

Walker contends that despite repeated and various treatments for his back condition, his back has never returned to its pre-1985 condition. Walker testified that he had received various treatments from different doctors in the last 6 years but that none of these treatments had completely taken the pain away. He testified that following the 1985 accident, he has experienced flare-ups which caused his pain to escalate severely. On that basis, he contends that he is entitled to permanent partial disability benefits.

Respondents argue that Walker did not prove that the 1985 injury caused his disability. According to respondents, Walker sustained subsequent injuries which were the cause of his current condition. The Workers’ Compensation Court stated:

Because the claimant reached maximum healing prior to the subsequent injuries the Court concludes that the claimant’s current disability was not proximately caused by his September 1985 injury. The claimant’s return to his time of injury job for a period of about six years coupled with subsequent injuries creates a causal chain that is too tenuous to conclude that the 1985 injury is the cause of claimant’s current condition. The medical evidence presented does not establish by a preponderance of the evidence that the claimant’s current condition was caused by his 1985 injury. The doctors generally agree that the 1985 injury weakened the claimant’s back making him more susceptible to injury, however, no doctor would testify that the claimant’s current condition would exist had he not returned to work at UPS. Nor did any of the medical doctors testify that the claimant’s subsequent injuries were mere temporary aggravations of his prior condition and that he had returned to his post 1985 injury condition. The claimant has failed to carry his requisite burden of proof in establishing that the 1985 injury caused his current condition.

The long established standard of review for this Court when considering the decision of the Workers’ Compensation Court is to determine whether there is substantial credible evidence to support the Workers’ Compensation Court’s decision. O’Brien v. Central Feeds (1990), 241 Mont. 267, 786 P.2d 1169. When critical medical testimony is presented through depositions in workers’ compensation proceedings, this Court can assess evidence as well as the lower court. Smith-Carter v. Amoco Oil Co. (1991), 248 Mont. 505, 813 P.2d 405.

It is the claimant’s burden of proof to present a preponderance of the evidence to show that he has sustained an injury and that the injury occurred while he was on the job. Gerlach v. Champion International (1992), 254 Mont. 137, 836 P.2d 35; § 39-71-119, MCA. The claimant must also prove by a preponderance of the evidence that a causal connection exists between his work accident and his current condition. Brown v. Ament (1988), 231 Mont. 158, 752 P.2d 171.

Here, the Workers’ Compensation Court states that no doctor would testify that Walker’s condition was caused by the 1985 accident. The court appears to rely exclusively on Dr. Mohr’s testimony that Walker’s pain was intermittent. Dr. Duane Mohr first saw Walker in 1991. Mohr is a pain management specialist.

When asked if he had any way of knowing to a reasonable medical probability one way or another whether Walker’s ongoing symptoms were caused by that initial injury (in 1985) or whether the ongoing symptoms were caused by simply the requirements of the job, Mohr’s response was: “I can’t be certain.” Dr. Mohr then qualified his answer about Walker’s work activity by indicating that Walker suffered from two different conditions. He stated that he felt the bulging discs from which Walker suffered in 1991 were caused by the day-to-day stress of Walker’s job. The chronic strain in the lower back region was a condition for which he did not have an opinion as to its cause. Nowhere in Mohr’s testimony is there an unqualified refusal to attribute Walker’s total condition to the 1985 injury. Because Dr. Mohr’s testimony is so equivocal, it is not substantial evidence when weighed against the balance of the medical testimony.

Although the Workers’ Compensation Court stated that no doctor would testify that Walker’s condition sprang from the 1985 accident, the record before us does not substantiate the court’s statement. Walker first saw Dr. Bernard M. Varberg, an orthopedic surgeon, when he was injured in 1985. Dr. Varberg testified that Walker had sustained a lower lumbosacral strain or sprain in which the back’s ligaments were stretched. In his deposition, Dr. Varberg testified that Walker’s current condition and the symptoms that he continues to experience are a result of the 1985 injury and his continuing to work. Dr. Varberg last saw Walker in 1986, before he moved from the Bozeman area.

In 1986, Walker was treated by a chiropractor, Dr. Lundgren. Dr. Lundgren’s notes say that Walker’s condition stems from a lifting incident that is similar to an accident for which he was treated in 1985. Dr. Lundgren’s records do not state whether the 1986 incident was an “accident” which caused permanent damage different from that of the 1985 accident or whether it was an aggravation of the 1985 injury. However, we note that Dr. Lundgren did state that he anticipated Walker to be able to return to his pre-1986 condition. This seems to indicate that whatever happened in 1986 was not a permanent injuiy.

Dr. John D. Campbell is an orthopedic surgeon who saw Walker in 1991. He stated during his deposition that the cause of Walker’s condition was the 1985 injury and not Walker’s normal working conditions at UPS. Dr. Gary Cooney, a physician specializing in neurology who has seen Walker from 1991 until the present, testified in his deposition that: “It’s my opinion that the patient’s present back problems are related to an injury that he sustained in a fall in 1985 which never completely healed.”

The court also cites and respondents argue that Walker returned to work in December of 1985 and continued to work for six years. However, this does not mean that Walker was pain free or that his return to work precludes recovery for workers’ compensation benefits because of the 1985 injury.

In a similar 1990 case, this Court stated that a worker who returned to work with carpal tunnel syndrome following an injury and subsequently performed his job better than anyone else was still eligible for disability compensation because of the injury. Kraft v. Flathead Valley Labor & Contractors (1990), 243 Mont. 363, 792 P.2d 1094. Likewise, the fact that Walker returned to his regular job does not indicate that he was completely well or that he was experiencing no pain. His return to work is not relevant to the causation issue.

The Workers’ Compensation Court stated that Walker reported six different accidents to his physicians. There is nothing in the record to support this statement. The court states several times that these “accidents” were identifiable and reported.

An accident is an unexpected traumatic incident or unusual strain which is identifiable by time and place of occurrence, identifiable by member or part of the body affected, and caused by a specific event on a single day or during a single work shift. Section 39-71-119(2), MCA. The record does not corroborate six accidents occurred. While it is clear that following the 1985 injury, Walker saw doctors on and off until 1991 when he began to experience continual severe pain, the record does not indicate whether the incidents that prompted the visits to the doctors were discrete injuries or whether they were aggravations to the 1985 injury.

Because we determine that the claimant has met his burden of proof that his injuries sprang from a 1985 accident, the burden of proof concerning any post-1985 accidents which permanently damaged claimant’s back must fall upon the carrier. Lee v. Group W Cable TCI of Montana (1990), 245 Mont. 292, 800 P.2d 702; § 39-71-703 et seq., MCA. Lee is significant in that the claimant there suffered from what was diagnosed by the doctors as two distinct back injuries. Lee failed to prove that his current problems stemmed from the earlier injury and not the later one as argued by the carrier. Lee is informative because it focuses attention on the importance of medical testimony in workers’ compensation cases.

The doctors in Lee specifically noted two distinct injuries. One of the doctors in Lee specifically stated that the second back injury, from which claimant missed three months of work, was also an exacerbation of the earlier back injury. Lee, 245 Mont. at 298, 800 P.2d at 705. The doctors here have not indicated that Walker suffered from two discrete injuries, suffered at two distinct times. While alleging that six additional “accidents” occurred to Walker’s back, the carrier has not presented evidence that the incidents it alludes to have met the legislature’s definition of accident. Further the carrier has not shown that a causal connection exists between a post-1985 injury and Walker’s current condition. Thus, the carrier has not met its burden concerning any subsequent accidents and the court did not have substantial evidence from which to determine that Walker’s injuries were caused by a post-1985 accident.

We conclude that Walker has met his burden satisfactorily concerning the proximate cause of his current problems. Therefore, we hold that the Workers’ Compensation Court did not have substantial evidence from which to determine that claimant is unqualified for permanent partial disability benefits or that subsequent injuries have caused the disability.

Reversed and remanded for further proceedings consistent with this opinion.

JUSTICES HUNT, TRIEWEILER, NELSON and GRAY concur.


author: JUSTICE HARRISON JUSTICES HUNT and TRIEWEILER JUSTICE NELSON

text:
    JANET HAMAN, d/b/a RAINBOW DISTRIBUTING, Plaintiff and Respondent, v. STATE OF MONTANA, Defendant and Appellant.
    No. 93-295.
    Submitted on Briefs October 21, 1993.
    Decided December 16, 1993.
    50 St.Rep. 1637.
    262 Mont. 458.
    865 P.2d 274.
    For Defendant and Appellant: Robert F. W. Smith, Assistant Attorney General, Gambling Control Division, Helena.

      For Plaintiff and Respondent: Kirk D. Evenson, Marra, Wenz, Johnson & Hopkins, Great Falls.
   JUSTICE HARRISON

delivered the Opinion of the Court.

Janet Haman (Haman) d/b/a Rainbow Distributing sought a declaratory judgment to reverse a decision by the State Gambling Control Division, which concluded that Haman could not obtain a license to purchase and export illegal gambling devices commonly known as pull tabs or break-open tickets. The Ninth Judicial District Corut, Teton County, granted summary judgment in favor of Haman and granted her a license effective July 15,1992. The State appeals. We reverse.

On July 12, 1991, the State received a license application from Haman. Haman sought a license “to manufacture gambling devices that are not legal for public play in the state and are manufactured only for export from the state.” See § 23-5-152(3)(a), MCA. Across the front of the application were these words: “To distribute pull tabs outside of Montana.”

The State attempted to clarify the activity for which Haman sought the license. Subsequently, Haman was notified that she would not be granted a license if she intended to purchase pull tabs, which were not legal for public play in the state (Montana-illegal), from a manufacturer in Montana and then export those pull tabs out of the state.

Haman contacted her attorney, who attempted to persuade the State to change its decision. Haman’s attorney and the State discussed the application on many occasions. Finally, the parties requested that the District Court answer the legal question of whether § 23-5-152(3), MCA, permitted the State to license Haman’s proposed activities. The controversy centered on whether the statute specifically authorized a person to purchase Montana-illegal pull tabs in Montana (emphasis added).

The parties proceeded under the Montana Administrative Procedure Act, § 2-4-702, MCA, which allows a district court to grant a declaratory judgment when the parties dispute the interpretation of a statute. The parties submitted a stipulation of the facts and legal issues along with Haman’s complaint for declaratory judgment.

Both parties moved for summary judgment. On February 12,1993, the District Court granted Haman summary judgment because no rule specifically existed which precluded the State from granting her a license. Further, the court retroactively granted Haman a license effective July 15,1992.

Although both parties raised several issues, we determine that one issue is dispositive: Whether the District Court erred by granting Haman a license pursuant to § 23-5-152(3), MCA, when it justified its decision by declaring that no specific rule prevented the State from granting Haman a license to conduct her proposed activities.

Gambling is a highly regulated activity in Montana. In examining gambling statutes, we are mandated to strictly construe the statutes to only allow gambling activity which is specifically authorized by the statutes. Section 23-5-111, MCA. Article III, § 9 of Montana’s 1972 Constitution states that:

[a]ll forms of gambling, lotteries, and gift enterprises are prohibited unless authorized by acts of the legislature or by the people through initiative or referendum.

Further, § 23-5-111, MCA(1991), states:

In view of Article III, section 9, of the Montana constitution, Chapter 642, [the gambling] Laws of 1989, must be strictly construed by the department [of Justice] and the courts to allow only those types of gambling and gambling activity that are specifically and clearly allowed by Chapter 642, [the gambling] Laws of 1989. Here, the District Court noted the constitutional and statutory

directives of strict construction and specific authorization. The court, however, failed to follow these directives. Instead, the court granted Haman summary judgment because “[t]he Department has never adopted a rule to specifically permit [the] denial of a license in the factual situation of this case.”

Strict construction and specific authorization do not require “a rule to specifically permit [the] denial of a license ... .” Rather, these directives require a gambling statute to specifically authorize the proposed activity; here, the in-state purchase of Montana-illegal pull tabs. We hold that the District Court erred by inverting the constitutional and statutory directives of strict construction and specific authorization.

Haman contends, however, that § 23-5-152(3)(b), MCA (1991), authorized her to purchase the pull tabs in Montana and export them out-of-state. Section 23-5-152(3)(b), MCA (1991), states:

A person may not manufacture or possess an illegal gambling device for export from the state without having obtained a license from the department [of Justice]. [Emphasis added.]

Haman maintains that the disjunctive “or” allows a person to both manufacture and possess illegal gambling devices. She argues that inherent in the word “possess” is the implication that a person can purchase illegal gambling devices within Montana (emphasis added). She concludes that § 23-5-152(3)(b), MCA (1991), specifically authorized her to purchase and export Montana-illegal pull tabs and, therefore, she argues that the State should have created administrative rules which would have allowed her to obtain a license. We disagree.

We are guided by the directives of strict construction and specific authorization. The proposed activity is either specifically authorized or it is not. Further,

“[i]n construing a statute, it is our function as an appellate court to ascertain and declare what in terms or in substance is contained in a statute and not insert what has been omitted.” State v. Crane (1989), 240 Mont. 235, 238, 784 P.2d 901, 903. Whenever possible, this court is to look to the plain meaning of the statute in determining legislative intent. State ex rel. Roberts v. Public Service Commission (1990), 242 Mont. 242, 790 P.2d 489.

Holly Sugar v. Dep’t of Revenue (1992), 252 Mont. 407, 412, 830 P.2d 76, 79.

A plain reading of § 23-5-153(3)(b), MCA (1991), reveals that Haman’s proposed activity — purchasing Montana-illegal pull tabs within Montana — is not authorized. The word “purchase” is not encompassed in the word “possess.” Since “purchase” does not exist in the statute, we refuse to insert that word into the statute. We hold that § 23-5-152(3)(b), MCA(1991), does not specifically allow a person to “purchase” Montana-illegal pull tabs in Montana.

Moreover, § 23-5-152(3)(a), MCA, states:

The department [of Justice] may adopt rules to license persons to manufacture gambling devices that are not legal for public play in the state and are manufactured only for export from the state. [Emphasis added.]

Section 23-5-152(3)(a), MCA, is clear: Montana manufacturers can only export gambling devices, they cannot sell gambling devices in the State of Montana. Thus, it necessarily follows that persons and companies in Montana cannot purchase gambling devices from Montana manufacturers.

In this case, Haman proposed to purchase pull tabs from WorldWide Ticket, a Montana manufacturer. World-Wide Ticket cannot sell pull tabs to in-state buyers. Thus, there is no possible way for Haman to legally purchase pull tabs from World-Wide Ticket.

While the District Court relied on Haman’s argument that the State should have made administrative rules allowing her to obtain a license, we will not fall into the same trap. The State is only required to proceed to rule-making when a gambling statute specifically authorizes the gambling activity. See §§ 23-5-111 and -115(1), (2) and (3), MCA; § 2-4-301, MCA.

Here, § 23-5-152(3)(b), MCA (1991), does not specifically authorize the in-state purchase of pull tabs. Accordingly, we hold that the statute does not compel the State to establish rules for the licensing of persons who purchase Montana-illegal pull tabs within the state.

We reverse the decision of the District Court. We remand this case and direct the court to render a decision consistent with this opinion.

Reversed and remanded.

CHIEF JUSTICE TURNAGE and JUSTICE WEBER concur.

JUSTICES HUNT and TRIEWEILER

specially concurring.

We concur in the results of the majority opinion, but not with all that is said therein.

JUSTICE NELSON

specially concurs.

While I agree with the result of the Court’s opinion and with what is expressed therein, I am not persuaded that the statutory basis which supports the State’s position is clearly enough set forth. I submit that the provisions of § 23-5-152(3), MCA, as regards licensing are dispositive.

Montana law requires that:

In the construction of a statute, the office of the judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted or to omit what has been inserted. Where there are several provisions or particulars, such a construction is, if possible, to be adopted as will give effect to all. (Emphasis added.)

Section 1-2-101, MCA. Applying that canon of statutory construction to §§ 23-5-152(3)(a), (b) and (c), MCA, and reading those sections pari materia, it is clear that the statute enacted by the legislature prohibits the conduct for which Haman claims she is entitled to a license, and that the statute would, likewise, prohibit the Department of Justice (department) from adopting rules to license that conduct.

Section 23-5-152(3)(a), MCA, authorizes the department to adopt rules to license persons who manufacture Montana-illegal gambling devices for export from the state. Section 23-5-152(3)(c), MCA, authorizes a person licensed under § 23-5-152(3), MCA, to import Montana-illegal gambling devices into the state after notifying and receiving authorization from the department. Section 23-5-152(3)(b), MCA, prohibits the manufacture or possession of Montana-illegal gambling devices for export without a license.

The dispositive point, here, is that the only license which is authorized by § 23-5-152(3), MCA, is the one in subsection (3)(a), and that is the license for the manufacture of Montana-illegal gambling devices for export. There is no authorization in subsection (3) for the issuance of a license for possession without manufacture for export.

Even if it had a mind to, the department, under that statutory scheme, could not adopt rules to license possession of Montana-illegal gambling devices (or, as the Court’s opinion points out, the “purchase” of such devices) without manufacture for export. Any such rule would be in derogation of the statute and would be unlawful. See Winchell v. Dep’t of State Lands (1993),_Mont._, 865 P.2d 249.

Accordingly, I specially concur.

JUSTICE GRAY joins in the foregoing special concurrence.