author: CHIEF JUSTICE TURNAGE JUSTICE GRAY,

text:
    ELIZABETH M. KUZARA, Petitioner and Appellant, v. STATE COMPENSATION INSURANCE FUND, Respondent and Insurer for SPRING CREEK COAL COMPANY, Employer and Respondent.
    No. 96-016.
    Submitted on Briefs October 24, 1996.
    Rehearing Denied January 2, 1997.
    Decided November 14, 1996.
    53 St.Rep. 1125.
    279 Mont. 223.
    928 P.2d 136.

      For Appellant: Elizabeth M. Kuzara, Sheridan, Wyoming (Pro Se)
    For Respondent: Charles G. Adams, State Compensation Insurance Fund, Helena.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Elizabeth Kuzara appeals the judgment of the Workers’ Compensation Court granting a directed verdict in favor of the State Compensation Insurance Fund (State Fund). We reverse and remand with instructions consistent with this opinion.

The sole issue on appeal is whether the Workers’ Compensation Court erred when it granted the State Fund’s motion for a directed verdict because Elizabeth Kuzara presented insufficient proof of notice of a work-related injury as required by § 39-71-603, MCA (1993).

FACTUAL BACKGROUND

All references to the facts of this case are obtained from the sworn testimony of Elizabeth Kuzara at the trial held before the Workers’ Compensation Court. It is noted that the judge found Kuzara to be a credible witness, stating, “I can at this point and do assume that she is telling me the truth about her conversations. And indeed I don’t have any reason to disbelieve her and sitting here listening to her and observing her, she impresses me as credible up to this point.” It is further noted that the State Fund did not offer any testimony or evidence at trial rebutting or contradicting the testimony of Kuzara, although it had the opportunity and chose not to do so.

Kuzara was employed as a dragline groundsman by the Spring Creek Coal Company at an open pit coal mine near Decker, Montana. Spring Creek is insured by the State Fund. Kuzara claims that she sustained a work-related injury on July 18, 1993. While cleaning dried mud from a dragline machine shoe, Kuzara suffered intense pain in her lower back, through her hips, and down her right leg. At trial she described the pain as “enough that I had to cease what I was doing — it was like getting an electrical shock almost.” No one other than Kuzara witnessed this incident.

Kuzara worked with Ed Bebee, a dragline operator. Kuzara testified that she did not specifically tell Bebee, a co-worker, about the July 18 incident on the day that it occurred. However, the next day Kuzara could not complete her shift due to back pain. Bebee allowed her to rest inside his dragline cab for the remainder of the shift. While in the cab, Kuzara and Bebee talked about their back injuries for several hours. During that discussion Kuzara informed Bebee, “I thought I’d hurt my back.” She also testified, “I told him at that time that — as far as what led to this, that I thought I had done it when I was down cleaning on the shoe.”

Spring Creek employees participated in a gain-sharing program. Spring Creek set aside a percentage of its profits to be distributed to employees every three months. The program was based on a number of factors, including the number of lost-time accidents reported by employees. Thus, when an employee reported an accident, lost time was subtracted from the employee’s overall gain share, and all other employees’ shares were also reduced. In the quarter immediately preceding her injury, Kuzara earned approximately $950 through Spring Creek’s gain-sharing program.

Kuzara was not scheduled to work on July 20 and 21, 1993. Because she had experienced difficulty sleeping since July 18 and was still in pain, Kuzara called Dr. Robert Wood, a neurosurgeon in Billings, Montana, and scheduled an appointment for August 5,1993. Kuzara worked for the next two weeks after the dragline incident but did not inform Spring Creek or any co-workers about her back problem.

On August 4,1993, Kuzara told her supervisor, Clark Izzard, about her August 5 doctor’s appointment but did not inform him of the reason for it. During the summer of 1993, rumors had circulated among Spring Creek employees that a layoff might occur. Kuzara feared that if she reported her injury to Spring Creek she would be targeted as an injured employee and would be laid off.

Kuzara drove to Billings, Montana, on August 5 for her appointment with Dr. Wood. Following a myelogram, Dr. Wood diagnosed Kuzara with a herniated disc. He recommended surgery to treat the herniated disc. Kuzara then realized she would have to report her injury to Spring Creek.

On August 8, 1993, Kuzara returned home to Decker, Montana. According to Kuzara, she called Izzard at home and told him that she would not be able to come into work the next day. When asked why, Kuzara explained that she had a bad disc and would require back surgery. Kuzara stated at trial that she volunteered the following information to Izzard: “[The injury] was work related, but [Izzard] was — he was asking how it happened. I told him it was from a combination of things over a period of time, but most recently from lifting several weeks earlier, meaning about three weeks earlier, two to three weeks earlier.” Kuzara did not say her injury happened at work but told Izzard that her injury was work related. She informed Izzard that she was getting sick and could not talk anymore and that, if Izzard needed more information concerning her injury, he should contact Bebee, “because [Bebee] knew more than anyone else about [the situation].”

That same evening, Kuzara also called Gene Kilpatrick, Spring Creek’s department superintendent, and told him much of the same information she had told Izzard. At trial, Kuzara testified that she told Kilpatrick, “[The injury] was from operating equipment, from slips and falls. Told him it was mostly from lifting the power cable within the last couple of weeks, several weeks.”

On August 9, 1993, Kuzara called Don Gibboney, Human Resources Manager at Spring Creek. She called him “because I knew I needed to inform him that there was probably some kind of paperwork that needed to be done regarding this, and that they were the folks to call and they’d take care of it.” She informed Gibboney that her back problem was work related, had been determined to be a surgical condition, and was “from a combination of things over a period of time.” Gibboney advised Kuzara to take sick leave and file a claim with Aetna Life and Casualty Company (Aetna), Spring Creek’s group health insurance carrier.

When Gibboney questioned Kuzara about how much sick leave she had accrued, Kuzara responded that she did not know. Gibboney transferred Kuzara to Connie Haugen, who worked in Spring Creek’s Human Resources Department. Kuzara informed Haugen that her back injury was work related. Then, according to Kuzara, Haugen stated that “she would — they would take care of everything. They would handle it all.”

On August 10, 1993, Kuzara spoke with Kilpatrick again. She claims she told him three times that her condition was work related. Spring Creek placed Kuzara on sick leave and encouraged her to file a claim with Aetna. Spring Creek’s Aetna policy did not cover work-related injuries.

Dr. Wood performed back surgery on Kuzara on August 11, 1993, and released her on August 17,1993. By mid-September, Kuzara had not received any paperwork regarding the injury she claims that she reported to Izzard, Kilpatrick, Gibboney, and Haugen on August 8-10, 1993. Concerned that she had not heard from Spring Creek, Kuzara drove to work on September 20,1993, and informed Steve Velasquez, Spring Creek Safety Director, the details of the July 18 dragline incident. This conversation was the first time Kuzara gave specific notice to a Spring Creek supervisor of the exact time, place and nature of her injury. At trial Kuzara testified that she believed she told Velasquez that her condition “was from that incident ... and was brought on also from just years of wear and tear from the mine.”

On October 15, 1993, Kuzara received a phone call asking her to come to Sheridan, Wyoming, to meet with Kilpatrick, Haugen, and Gibboney. In Sheridan, Kuzara learned that her employment would be terminated on October 16, 1993, and that she had no remaining sick leave with Spring Creek. Kuzara contacted the State Fund and was informed that Spring Creek had not filed a workers’ compensation claim for her July 18 injury. Kuzara filed a claim with the State Fund which it denied.

Kuzara filed a petition with the Workers’ Compensation Court seeking an award of benefits under the Montana Workers’ Compensation Act. On November 14, 1995, the matter was heard before the Workers’ Compensation Court. Following Kuzara’s testimony, the State Fund moved for a directed verdict, arguing that based on Kuzara’s testimony there was insufficient evidence to establish that she had provided her employer with sufficient notice of an injury as required by § 39-71-603, MCA (1993). The following exchange then occurred between Kuzara and the court:

THE COURT: Is [the September 20, 1993, discussion with Velasquez] the first time that you told him [about the July 18 incident] or told anybody that?
KUZARA: That I was that specific?
THE COURT: Yeah.
KUZARA: That I was that specific about it, I informed- when I spoke with Clark —
MR. SHEEHY: August 8th?
KUZARA: Yes, August 8th, with Clark and Gene, and then Don Gibboney on August 9th, I wasn’t that specific.
THE COURT: As I recall your testimony, you said you told him that the latest thing had happened while you were lifting several weeks ago.
KUZARA: Right.
THE COURT: And that is as specific you got then?
KUZARA: Right.
THE COURT: Okay. So at the time you talked to these fellows on August 8th, 9th, and 10th, you weren’t keying specifically in on the work that you were doing with the shoe and lifting the grates?
KUZARA: No. I didn’t.
THE COURT: Were you keying in on that day to the — at least the date that this all started, or were you even vague about that at the time?
KUZARA: I was vague about that. I told them several weeks.

Following this discussion, Kuzara’s counsel agreed that there was no additional testimony that would prove Kuzara had provided a more specific report of an injury having occurred on July 18, 1993. The court granted the State Fund’s motion for a directed verdict. In a judgment issued on November 27, 1995, the court deemed Kuzara’s testimony to be credible. The court explained in its findings of fact that Kuzara’s notice was insufficient because it was too vague. Kuzara admitted at trial that at the time of her conversations on August 8, 9 and 10, she had identified no specific incident or series of incidents from which her work-related problems arose and did not do so until after the thirty-day period had expired.

Kuzara, proceeding pro se, appeals the judgment granting the State Fund’s motion for a directed verdict.

STANDARD OF REVIEW

The Workers’ Compensation Court’s determination that Kuzara had presented insufficient evidence to establish notice is a finding of fact. A reviewing court uses a three-step test to determine whether the findings are clearly erroneous. First, if a court’s findings are not supported by substantial credible evidence, they are clearly erroneous. Second, if a court has misapprehended the effect of the evidence, its findings are clearly erroneous. Third, if a review of the record leaves the reviewing court with the definite and firm conviction that a mistake has been committed, the lower court’s findings are clearly erroneous. Spence v. Ortloff (1995), 271 Mont. 533, 535, 898 P.2d 1232, 1233 (citing Interstate Production Credit Ass’n v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287).

DISCUSSION

Did the Workers’ Compensation Court err when it granted the State Fund’s motion for a directed verdict because it concluded that Kuzara had provided Spring Creek with insufficient notice of an injury as required by § 39-71-603, MCA (1993)?

Kuzara argues that she provided sufficient notice of her work-related injury to Spring Creek. Spring Creek and the State Fund counter that Kuzara failed to provide notice of the specific time, place and nature of her injury as required by § 39-71-603, MCA (1993). We agree with Kuzara.

Workers’ compensation laws in effect at the time of a claimant’s injury are controlling. Crittendon v. Terri’s Restaurant & Lounge (1991), 247 Mont. 293, 295, 806 P.2d 534, 535. Because Kuzara claims she was injured on July 18, 1993, this case is governed by the notice provision of § 39-71-603, MCA (1993), which states:

Notice of injuries other than death to he submitted within thirty days. No claim to recover benefits under the Workers’ Compensation Act, for injuries not resulting in death, may be considered compensable unless, within 30 days after the occurrence of the accident which is claimed to have caused the injury, notice of time and place where the accident occurred and the nature of the injury is given to the employer or the employer’s insurer by the injured employee or someone on the employee’s behalf. Actual knowledge of the accident and injury on the part of the employer or the employer’s managing agent or superintendent in charge of the work upon which the injured employee was engaged at the time of the injury is equivalent to notice. [Emphasis supplied.]

The determinative issue in this case is notice. The evidence presented by Kuzara indicates that Spring Creek operated under an informal policy that discouraged its employees from reporting work-related injuries. Spring Creek’s gain-sharing plan discouraged employees from reporting injuries because if one employee reported a work-related injury, all employees stood to lose a percentage of their gain-sharing profits.

Spring Creek argues that Kuzara’s report of a work-related injury was vague in terms of specific time, place, and event. On August 8, 1993, Kuzara called her supervisor, Clark Izzard, and informed him that she was going to require back surgery. Kuzara told Izzard that her injury was work related.

While Kuzara’s statements to Izzard on August 8 could have been more specific in terms of time, place, and event, Izzard could have learned more about what happened by contacting Bebee, as Kuzara suggested. When Kuzara called Izzard on August 8, 1993, Kuzara informed him that she was in significant pain from a post-operative headache and was unable to speak on the telephone any longer. She informed Izzard that if he wanted any additional information, he should contact Bebee, who knew the whole story. Izzard made no attempt to contact Bebee. Had he done so, as Kuzara suggested, Spring Creek could have learned the details of Kuzara’s injury on August 8,1993, which she had already explained to Izzard were work related.

We conclude that during her case-in-chief Kuzara supplied sufficient evidence of notice of her work-related injury to her employer when she informed Izzard on August 8,1993, that he should contact Bebee for more information. However, respondents should have the opportunity to present evidence to rebut Kuzara’s claim that she gave Spring Creek sufficient noticé of her injury. Therefore, we remand this issue to the Workers’ Compensation Court.

Notwithstanding that the Workers’ Compensation Court found Kuzara to have testified truthfully and to be a credible witness, the court granted respondents a directed verdict. We conclude that the Workers’ Compensation Court erred in misapprehending the evidence that supports Kuzara’s claim of having given sufficient notice of her work-related injury.

As a secondary issue to the notice provisions of § 39-71-603, MCA (1993), we also consider principles of estoppel. Equitable estoppel applies when an employer or insurer has taken some positive action which either prevents a claimant from filing a timely claim or leads the claimant reasonably to believe she need not file such a claim. Davis v. Jones (1983), 203 Mont. 464, 466, 661 P.2d 859, 860. Six elements make up the doctrine of equitable estoppel:

1. There must be conduct amounting to a representation or a concealment of material facts;
2. These facts must be known to the party estopped at the time of the conduct, or at least the circumstances must be such that knowledge of them is necessarily imputed to him;
3. The truth concerning these facts must be unknown to the other party claiming the benefit of the estoppel, at the time when it was acted upon by him;
4. The conduct must be done with the intention, or at least with the expectation, that it will be acted upon by the other party, or under such circumstances that it is both natural and probable that it will be so acted upon;
5. The conduct must be relied upon by the other party, and, thus relying, he must be led to act upon it;
6. He must in fact act upon it in such a manner as to change his position for the worse, in other words, he must so act that he would suffer a loss if he were compelled to surrender or forego or alter what he has done by reason of the first party being permitted to repudiate his conduct and to assert rights inconsistent with it.

Davis, 661 P.2d at 860-61.

We now apply the facts provided in Kuzara’s testimony, which the Workers’ Compensation Court found to be credible, to the six elements of estoppel. First, Spring Creek represented to Kuzara and concealed from her material facts. It did so on August 10,1993, when Haugen stated that Spring Creek would take care of everything and when she also encouraged Kuzara to file a nonwork-related claim with Aetna. Haugen had to know that for a claim to be compensable by Aetna it could not be work related. Haugen did not inform Kuzara of this Aetna policy provision.

Second, Spring Creek was aware or should have been aware of the effect its representation and concealment of material facts would have on Kuzara. After being told by Haugen that Spring Creek would take care of everything, Spring Creek could reasonably assume that Kuzara would not file a claim with the State Fund. Additionally, after thirty days, Kuzara would be statutorily barred from filing a claim with the State Fund. Spring Creek was aware of this fact and also knew that Kuzara was unaware of the consequences of filing a claim with Aetna.

Third, Kuzara did not know the truth concerning Spring Creek’s representation and concealment at the time her claim was filed with Aetna. Kuzara did not know what the Aetna policy said or that she had to report her work-related injury to Spring Creek or the State Fund within thirty days in order to receive workers’ compensation benefits.

Fourth, Spring Creek encouraged Kuzara to file a nonwork-related claim with Aetna, expecting that she would file a claim with Aetna and not report her work-related injury to the State Fund. Spring Creek also knew or should have known that after Haugen represented that Spring Creek would take care of everything, Kuzara would not report her injury to the State Fund.

Fifth, Kuzara relied on Haugen’s representation that Spring Creek “would take care of everything. They would handle it all.”

Sixth, by acting on Spring Creek’s representation, Kuzara acted in a manner which changed her position for the worse. Believing that Spring Creek would take care of everything and that Aetna would cover her injury, Kuzara did not file a claim with the State Fund until the thirty-day statutory notice period had expired. By relying on Spring Creek’s representation, Kuzara was placed in a far worse position that she would have been in had she filed a timely claim with the State Fund.

Based on the record before this Court and unless rebutted by substantial credible evidence, Spring Creek’s representation and concealment of material facts led Kuzara reasonably to believe that she did not have to file a claim with the State Fund. Equitable estoppel would therefore be proper to prevent Spring Creek and the State Fund from claiming that Kuzara supplied improper notice under § 39-71-603, MCA (1993). Spring Creek encouraged Kuzara to file a nonwork-related injury claim with Aetna and also told Kuzara that it would “take care of everything.” We hold that unless rebutted by Spring Creek and the State Fund, they are estopped from claiming that Kuzara provided insufficient notice of her work-related injury under § 39-71-603, MCA (1993). As with the issue of notice, respondents should have the opportunity to present evidence during their case-in-chief to rebut the issue of estoppel.

We emphasize that this holding is limited to the narrow facts of this case. The notice Kuzara supplied to her employer was not by any means perfect and is not a model by which employees should notify their employers about work-related injuries.

Remanded to the Workers’ Compensation Court for a continuation of the trial and with respondents to be given the opportunity to present evidence rebutting Kuzara’s claim that she supplied adequate notice of her injury to Spring Creek and to rebut the issue of estoppel.

JUSTICES TRIEWEILER, HUNT and LEAPHART concur.

JUSTICE GRAY,

dissenting.

I respectfully dissent from almost the entirety of the Court’s opinion. Indeed, it is my view that the opinion is so riddled with error as to be difficult to address. My concerns begin with the “Factual Background” set forth by the Court and are heightened by the Court’s discussion of both the issue which is actually before us and the issue which is not, but which the Court inexplicably feels compelled to raise and address.

The Court begins by reciting purported “facts” at some length, observing both there and later in its opinion that the Workers’ Compensation Court determined that Kuzara was credible. It is important to note that the trial court’s credibility determination was limited to her testimony regarding matters at issue in its consideration of the State Fund’s motion for directed verdict; namely, the conversations with various people at Spring Creek Coal on which she relied in attempting to establish that she had provided sufficient notice. Contrary to the Court’s implicit suggestion, the Workers’ Compensation Court did not “find” all of her testimony credible in all particulars; indeed, it could hardly have done so since the State Fund had not presented its version of the “facts.” Moreover, the Court’s suggestion that, in successfully obtaining a directed verdict on the notice issue without the necessity of putting on its case, the State Fund somehow chose not to rebut or contradict the portions of Kuzara’s testimony which did not relate specifically to the notice question at issue in its motion for directed verdict is disingenuous at very least. Kuzara’s testimony on matters apart from the conversations she had with Spring Creek personnel within 30 days of the date of her alleged injury does not establish “facts” for any purpose other than determining whether the notice required by § 39-71-603, MCA (1993), was given and is not relevant to the issue before us as stated at the outset of the Court’s decision.

I also disagree with the standard under which the Court has chosen to review the Workers’ Compensation Court’s decision in this matter. The issue before us is whether that court erred in directing a verdict on the notice question. Our standard in reviewing a court’s decision to direct a verdict certainly is not whether the court’s decision is “clearly erroneous.” Nor do I agree that the Workers’ Compensation Court’s determination that Kuzara presented insufficient evidence to establish notice is a “finding of fact” subject to the clearly erroneous standard of review. Questions relating to the sufficiency of the evidence to meet statutory requirements are questions of law subject to de novo review by this Court to determine whether they are correct. Thus, while I recognize that matters relating to standards of review often seem esoteric or unimportant to some, I register my strenuous objection to what the Court is doing here in applying an incorrect standard of review.

The reason the standard of review matters here is this: under the standard for reviewing findings of fact, this Court need not rely on any legal authority in support of its ultimate conclusion regarding whether the trial court’s findings of fact are sufficiently supported by the record. That is, under the “clearly erroneous” standard, we need only review the record and apply the three-part clearly erroneous test. The Court apparently chooses this standard here because — as will become more apparent later — no legal authority exists for the conclusion it reaches. The only way in which the Court can reach the result it seeks is to skewer the standard of review. I cannot agree.

In addition to applying the wrong standard of review, the Court also misapplies the “clearly erroneous” standard it has chosen. It never determines, pursuant to the first prong of that test, whether the trial court’s alleged “finding” is supported by substantial credible evidence; instead, it proceeds directly to its determination — under the second part of the “clearly erroneous” standard of review — that the Workers’ Compensation Court “misapprehended the effect of the evidence” before it relating to notice. One can only suppose that this is because the Court is aware that the decision it purports to review as a “finding of fact” is not a factual finding at all and, therefore, is not susceptible to a record review to determine whether it is supported by substantial credible evidence.

I do agree with two portions of the Court’s opinion. First, immediately below its “Discussion” heading, the Court correctly states the issue before us as whether the Workers’ Compensation Court erred in granting the State Fund’s motion for a directed verdict based on its conclusion that Kuzara provided her employer with insufficient notice of an injury under § 39-71-603, MCA (1993). Second, the Court correctly quotes the applicable statute.

The problem is that no further mention of the law — either the statute and its requirements or our cases thereunder — appears in the Court’s resolution of the issue before us. The Court does not even bother to try to apply the language of the statute to Kuzara’s testimony to determine the legal question of whether her conversations constituted notice as defined by the statute. The Court’s failure to include even a shred of legal support for the result it reaches here is both transparent and irresponsible.

Applying the statutory terms only briefly here, it is clear from Kuzara’s testimony — as quoted by the Court — that she did not notify Spring Creek Coal or the State Fund of “the time and place where the accident occurred and the nature of the injury...” within 30 days. See § 39-71-603, MCA (1993). It is also clear that neither the employer nor the employer’s managing agent or superintendent in charge of the work upon which Kuzara was engaged at the time of the injury had “[a]ctual knowledge of the accident and injury [,]” as alternatively required by § 39-71-603, MCA (1993).

Instead of applying these statutory requirements to the evidence before it, the Court simply ignores them. In an apparent effort to buttress its totally insupportable resolution of the issue, it goes on to state that Izzard “could have learned more” by contacting Bebee. It cites to no authority under which the employee’s obligation to provide legally sufficient notice directly, or at least establish the employer’s actual knowledge pursuant to the statute, can be “transferred” to the employer. Nor does it cite to any authority under which an employee’s legally insufficient notice becomes sufficient as a matter of law where the employer may have had the means to acquire additional information about the accident and injury. The reason for this total absence of authority is clear: no such legal authority exists.

Furthermore, the Court’s statement — at the end of its discussion of the issue before us — that Spring Creek Coal and the State Fund should have an “opportunity to rebut” Kuzara’s “sufficient evidence of notice” on remand is apparently intended to suggest that the notice issue remains unresolved. The suggestion is an empty one. As discussed above, Kuzara’s testimony about the extent of the notice she gave — taken as true by the Workers’ Compensation Court, this Court and myself — is insufficient as a matter of law to constitute the notice required by § 39-71-603, MCA (1993). It does not need to be rebutted. The Court’s suggestion is merely another outgrowth of its application of the wrong standard of review to the issue before us.

The Court states that, on September 20, 1993, Kuzara informed a Spring Creek supervisor of the details of the July 18 incident. The Court also correctly observes that this was the first such notification by Kuzara of the time, place and nature of her injury. It is clear that this notification was not made within the statutorily-mandated thirty-day period for notice. The Court simply refuses to apply the law to these facts. Applying § 39-71-603, MCA (1993), to the facts regarding notice set forth in Kuzara’s testimony, I would affirm the Workers’ Compensation Court.

Finally, I feel compelled to address the Court’s “equitable estoppel” discussion. This issue is not before the Court. It was neither raised nor argued in the Workers’ Compensation Court and is neither raised nor argued in this Court. Simply put, the Court has “created” this issue out of whole cloth and then resolved it, apparently recognizing that its discussion and resolution of the issue actually before us is transparently incapable of standing alone. Moreover, the Court performs this feat of prestidigitation based on the so-called “facts” in Kuzara’s testimony. There are no facts of record regarding this issue never raised or tried in the Workers’ Compensation Court, however. Likewise, there is no decision by that court for us to review.

This Court raises the issue, makes findings of fact regarding lack of knowledge by Kuzara which even Kuzara’s own testimony does not support, makes further findings regarding Spring Creek’s knowledge from a nonexistent record, and then resolves the question. To say that this entire portion of the Court’s opinion is dicta is true; the Court resolved the only issue before it — albeit erroneously — before reaching out and creating this issue from thin air. But to say that this part of the opinion is dicta is an understatement. This is as extreme an example of lack of respect and regard for this Court’s proper role as I have ever seen.

The Court’s opinion in this case raises “result oriented” opinion writing to an art-form.

I dissent.

JUSTICES NELSON and ERDMANN join in the foregoing dissent.


source: Caselaw Access Project

author: JUSTICE NELSON

license: Public Domain

text:
    JAMES F. KELLY, JUDITH I. KELLY, JAMES R. SMITH, JENNIFER C. SMITH, HARRY C. PIPER, III, AND MARY E. M. PIPER, Plaintiffs and Appellants, vs. BURLINGTON NORTHERN RAILROAD COMPANY, a Delaware corporation, and MONTANA RAIL LINK, INC., a Montana corporation, Defendants and Respondents.
    No. 96-104.
    Submitted on Briefs June 27, 1996.
    Decided November 14, 1996.
    53 St.Rep. 1132.
    279 Mont. 238.
    927 P.2d 4.

      For Appellant: Michael J. Lilly, Berg, Lilly, Andriolo & Tollefsen, Bozeman.
    For Respondent: Christopher B. Swartley, Datsopoulos, MacDonald & Lind, Missoula (Montana Rail Link, Inc.); Jeff Hedger, Kroschel & Yerger, Billings (Burlington Northern Railroad Co.).
   JUSTICE NELSON

delivered the Opinion of the Court.

This is an appeal from the Montana Eighteenth Judicial District Court, Gallatin County. Following a nonjury trial, the District Court denied Plaintiffs’ claims for the declaration of an easement by prescription, by necessity or by implication, and entered judgment for Defendants. From this judgment, Plaintiffs appeal. We reverse.

The following issues are raised on appeal:

1. Did the District Court err in concluding, as a matter of law, that Plaintiffs do not have an easement by necessity?

2. Did the District Court err in concluding, as a matter of law, that Plaintiffs do not have a private prescriptive easement?

3. Did the District Court err in failing to conclude, as a matter of law, that Plaintiffs did not extinguish the private prescriptive easement established by their predecessors-in-interest?

4. Did the District Court err in concluding, as a matter of law, that Plaintiffs do not have an easement by implication?

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs own land in Sunny Bear Estates Subdivision, Gallatin County, Montana. Plaintiffs James and Judith Kelly (Kellys) purchased Tract 1 on September 16, 1983, from Thelma Thompson and Hale Hubbard. Plaintiffs James and Jennifer Smith (Smiths) purchased Tract 2 on June 26,1989, from Mervin and Charlotte Lefferts (Lefferts). Plaintiffs Harry and Mary Piper (Pipers) purchased Tracts 3-12 on May 8, 1990, from Sundance Realty & Investments, Inc. Defendant Burlington Northern Railroad Company (BN) is the owner of a 400’ right-of-way in Section 24, Township 2 South, Range 6 East, M.P.M., Gallatin County, Montana. Defendant Montana Rail Link, Inc. (MRL) claims a leasehold interest in the right-of-way owned by BN.

Sunny Bear Estates is bounded on the west, north and east by rugged mountains and private property. To the south, Sunny Bear Estates is bounded by MRL’s and BN’s railroad right-of-way. Railroad tracks pass through the railroad right-of-way and have existed since March 1883. Running parallel to and south of the railroad right-of-way is the East Frontage Road. The East Frontage Road (old U.S. Highway 10) was originally part of the Bozeman Trail constructed in 1864. Just to the south of the East Frontage Road lies Interstate 90, a controlled access highway.

The nearest public road to Sunny Bear Estates is the East Frontage Road. The East Frontage Road lies south of the railroad right-of-way. A gravel road leaves the East Frontage Road at its east end, runs north and crosses the railroad right-of-way at the planked crossing at issue, and enters Sunny Bear Estates. This railroad crossing is located in the SW 1/4 of the NW 1/4 of Section 24, Township 2 South, Range 6 East, M.P.M., Gallatin County, Montana. Frank King, a long time resident of the area, testified that he started using the crossing in 1926 and that he knew the crossing had been used for an undetermined time before 1926. The second closest road is Moffit Gulch Road, a county road, located one mile to the west of Sunny Bear Estates, over rugged mountain terrain and private property.

Ward I. Stone was the original predecessor-in-interest to part of the property owned by the Kellys, Smiths and Pipers (collectively Plaintiffs). Stone filed his homestead claim on the SW 1/4 of the NW 1/4 of Section 24 (the property) on November 1, 1880, and received his federal patent September 13,1890. Stone conveyed the property to Lester Willson on January 30, 1882. On January 5, 1891, Willson conveyed the property to Northern Pacific Railroad Company (NP Railroad), although the property was to be deeded to Northern Pacific Coal Company (NP Coal). Subsequently in 1891, as discussed later in this opinion, this error was corrected. As a result, NP Railroad owned a 400’ railroad right-of-way across the property, while NP Coal held title to the remainder of the property.

Until October 1,1984, Plaintiffs’predecessors-in-interest used the gravel road and railroad crossing without written permit or easement. On October 1, 1984, BN executed a Private Roadway and Crossing Agreement with Thelma Thompson, Hale Hubbard, the Lefferts, and the Kellys. In the agreement, BN granted a private railroad crossing permit to Thompson, Hubbard, the Lefferts and the Kellys as permittees. The permittees paid a fee for the right to use the crossing, and BN reserved the right to terminate the agreement with 30-days written notice. The permit was for a five-year period. The Kellys requested that their names be removed from the permit in April 1988. Thompson and Hubbard assigned their interest in the private crossing permit to Sundance Realty on August 16, 1987. Subsequently, Sundance Realty assigned its permit to Pipers on April 27, 1990. However, in 1994, Pipers refused to pay the permit fee. Smiths have never executed or been assigned a private crossing permit.

Plaintiffs’ railroad crossing permits apparently are not sufficient to constitute insurable access for title insurance purposes. Consequently, no lending institution will approve construction loans secured by Plaintiffs’properties. In fact, the Pipers have failed to secure financing to construct their home because they did not have insurable access. Therefore, to correct this problem, Plaintiffs filed a complaint seeking an order declaring that they hold legal access easements to their properties.

Plaintiffs filed their Complaint for Declaratory Judgment on February 25,1991. Plaintiffs sought an order declaring that they held an easement for ingress and egress over and across Defendants’ railroad right-of-way. Plaintiffs advanced four alternative theories upon which the relief could be granted: 1) public easement by prescription; 2) private easement by prescription; 3) private easement by implication; and 4) private easement by necessity. Defendants BN and MRL answered and denied the allegations of Plaintiffs’ complaint, and requested that the District Court deny any easement across the railroad right-of-way.

After three motions for summary judgment were denied, the District Court held a nonjury trial on March 16,1995. The District Court entered Findings of Fact, Conclusions of Law, and Order on October 18, 1995. Pursuant to this Order, the District Court held that Plaintiffs’ claims for declaration of an easement by prescription, necessity or implication were denied and entered judgment for Defendants. Following this Order, Plaintiffs filed a Motion to Amend Findings of Fact, Conclusions of Law, and Order on November 3, 1995. On December 15,1995, Plaintiffs’ motion was granted in part and denied in part. However, the District Court did not amend its Order denying Plaintiffs’ claims. The District Court entered judgment in favor of Defendants on January 4,1996. Plaintiffs appeal from this judgment.

STANDARD OF REVIEW

Our standard of review for a district court’s findings of fact is provided by Rule 52(a), M.R.Civ.P, which in part provides:

Findings offact... shallnotbe set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses ....

We have adopted the following three-part test to interpret this rule:

First, the Court will review the record to see if the findings are supported by substantial evidence. Second, if the findings are supported by substantial evidence we will determine if the trial court has misapprehended the effect of evidence. Third, if substantial evidence exists and the effect of the evidence has not been misapprehended, the Court may still find that “[A] finding is ‘clearly erroneous’ when, although there is evidence to support it, a review of the record leaves the court with the definite and firm conviction that a mistake has been committed.”

Public Lands Access Ass’n, Inc. v. Boone and Crockett Club Found., Inc. (1993), 259 Mont. 279, 283, 856 P.2d 525, 527 (quoting Interstate Production Credit v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287).

Our standard of review relating to a district court’s conclusions of law is whether the tribunal’s interpretation of the law is correct. Public Lands, 856 P.2d at 527.

In this case, the District Court concluded, as a matter of law, that Plaintiffs did not establish easements by prescription, by necessity or by implication. In particular, the District Court concluded that Plaintiffs did not have an easement by necessity because at the time unity of ownership was severed, strict necessity did not exist. We review this conclusion of law to determine whether the District Court properly interpreted the law governing easements by necessity.

DISCUSSION

Did the District Court err in concluding, as a matter of law, that Plaintiffs do not have an easement by necessity?

We hold that Plaintiffs do have an easement by necessity and reverse the District Court’s legal conclusion to the contrary. Because this issue is dispositive, we will not address the remaining three issues raised on appeal.

In Amended Conclusion of Law No. 7, the District Court stated in part:

The requirements of an easement by necessity are 1) unity of ownership, and 2) strict necessity at the time the unified tract is severed. ... Unity of title existed on the SW1/4 of the NW1/4 of Section 24 until Northern Pacific Railroad Company quitclaimed its interest in the section to Northern Pacific Coal Company, and the Coal Company quitclaimed the 400’ right-of-way- back to the Railroad on June 4, 1891. There is no evidence in the record that prior to the separation of title, or even at the time the title was separated, that strict necessity existed for the grantor to have an “easement to the outside world” across its remaining lands.

Plaintiffs contend that the District Court erred when it concluded that Plaintiffs did not establish an easement by necessity because they failed to establish strict necessity at the time unity of ownership was severed. Plaintiffs argue that the District Court erroneously applied the facts to the controlling law to reach this conclusion. Defendants argue that the District Court correctly concluded strict necessity did not exist. They support the court’s conclusion by quoting Plaintiff Harry Piper’s testimony that he had not negotiated to purchase an access easement from any neighboring property owners. We conclude that the District Court misinterpreted the strict necessity requirement for easements by necessity.

An easement by necessity is a subspecies of an implied easement. An easement by necessity arises through strict necessity for ingress and egress to a parcel of property. Graham v. Mack (1984), 216 Mont. 165, 175, 699 P.2d 590, 596. Strict necessity is defined by a lack of practical access to a public road for ingress and egress. Wangen v. Kecskes (1993), 256 Mont. 165, 169, 845 P.2d 721, 724. See also, Wagner v. Olenik (1988), 234 Mont. 135, 761 P.2d 822. That is, the purpose of an easement by necessity is “to permit communication with the outside world.” Rathbun v. Robson (1983), 203 Mont. 319, 324, 661 P.2d 850, 853. We have defined an easement by necessity as follows:

[w]here an owner of land conveys a parcel thereof which has no outlet to a highway except over the remaining lands of the grantor or over the land of strangers, a way of necessity exists over the remaining lands of the grantor. Similarly, a way of necessity is found when the owner of lands retains the inner portion conveying to another the balance, across which he must go for exit and access.

Big Sky Hidden Village Owners v. HVI (1996), 276 Mont. 268, _, 915 P.2d 845, 850 (quoting Schmid v. McDowell (1982), 199 Mont. 233, 237, 649 P.2d 431, 433). Furthermore, we have set forth two basic elements to establish an easement by necessity: 1) unity of ownership, and 2) strict necessity at the time the unified tracts are separated. Graham, 699 P.2d at 596.

After reviewing the District Court’s findings of fact and conclusions of law, we find two different explanations as to how unity of ownership was severed in 1891: 1) NP Railroad reserved its 400’ right-of-way when it quitclaimed the property to NP Coal or 2) NP Coal, after acquiring the property from NP Railroad, granted the 400’ right-of-way back to NP Railroad by a separate quitclaim deed. In either case, the result is the same. Under the first explanation, NP Coal’s land “ha[d] no outlet to a highway except over the remaining lands of the grantor [NP Railroad] or over the land of strangers, [therefore,] a way of necessity exist[ed] over the remaining lands of the grantor [NP Railroad].” See Big Sky, 915 P.2d at 850. Under the second explanation, “a way of necessity [existed] when the owner of lands [NP Coal] retained] the inner portion conveying to another [NP Railroad] the balance, across which he [NP Coal] must go for exit and access.” See Big Sky, 915 P.2d at 850. Therefore, as defined in Big Sky, a way of necessity existed over the railroad right-of-way whether NP Railroad reserved or was granted the right-of-way. See Big Sky, 915 P.2d at 850.

However, after reviewing the record, we conclude that unity of ownership was severed as noted in the second explanation above. On May 20, 1891, NP Railroad quitclaimed the SW 1/4 of the NW 1/4 of Section 24 to NP Coal. Subsequently, on June 4, 1891, NP Coal granted NP Railroad a 400’right-of-way across the SW 1/4 of the NW 1/4 of Section 24. As a result of these conveyances, unity of ownership was severed. Therefore, the District Court properly concluded that Plaintiffs satisfied the first element, unity of ownership, to establish an easement by necessity. However, the District Court erred by concluding that strict necessity did not exist at the time unity of ownership was severed.

In 1891, NP Railroad possessed a 400’ right-of-way through NP Coal’s property, while NP Coal possessed title to the remainder of the property, and unity of ownership was severed. In 1891, NP Coal’s property was surrounded to the west, north and east by rugged mountain terrain. The only possible way to access and exit the property was to the south. In fact, the nearest public road to NP Coal’s property was the Bozeman Trail, which later became U.S. Highway 10, and currently is known as the East Frontage Road. The Bozeman Trail, constructed in 1864, ran along the same path as today’s East Frontage Road which is located immediately to the south and adjacent to the railroad right-of-way. Because the railroad right-of-way separated NP Coal’s property from the Bozeman Trail, the only way to reach this public road was to cross the railroad right-of-way. Without access across the railroad right-of-way, NP Coal’s property would be landlocked and unable to “communicate with the outside world.” That is, at the time unity of ownership was severed, the property lacked practical access to a public road for ingress and egress. Therefore, a strict necessity existed. Consequently, an easement by necessity arose.

Defendants attempt to bolster the District Court’s conclusion that strict necessity did not exist by quoting Plaintiff Harry Piper’s testimony that he had not negotiated with his neighbors for an alternative access easement. Defendants claim that this testimony “clearly indicates that strict necessity does not exist for an easement across the railroad right-of-way.” We disagree. Whether Plaintiffs currently have the ability to obtain access easements over their neighbors’ properties is irrelevant. Evidence of strict necessity must be shown to have existed at the time unity of ownership was severed. Graham, 699 P.2d at 596. Plaintiffs established that the property’s unity of ownership was severed in 1891 and that strict necessity existed at that time. Defendants’ evidence concerning Plaintiffs’ easement options at the time of trial does not affect Plaintiffs’ claim that an easement by necessity arose from land conveyances occurring in the last century. See State v. Cronin (1978), 179 Mont. 481, 488, 587 P.2d 395, 399-400.

Thus, Plaintiffs’ indirect evidence, discussed above, establishes that an easement by necessity arose in 1891 because strict necessity existed at the time unity of ownership to the property was severed. Not only was NP Coal’s property surrounded to the west, north, and east by rugged mountain terrain, but was also bounded to the south by the railroad right-of-way. This set of circumstances effectively left NP Coal’s property landlocked, and the requirement of strict necessity was met because the property was without access to a public road. Logic dictates that the only practical means to access or exit the property was to cross the railroad right-of-way to reach the nearest public road, the Bozeman Trail. In fact, Frank King, a long time resident of the area, testified that in 1926 he started using the planked crossing at issue and that he knew the crossing had been used for an undetermined time before 1926. Accordingly, we reverse the District Court and hold that Plaintiffs have an easement by necessity to cross Defendants’ railroad right-of-way at the planked crossing at issue which is located in the SW 1/4 of the NW 1/4 of Section 24, Township 2 South, Range 6 East, M.P.M., Gallatin County, Montana.

Reversed.

JUSTICES GRAY, TRIEWEILER, LEAPHART and ERDMANN concur.


author: JUSTICE HUNT

text:
    MARK A. RUPP, Petitioner and Appellant, v. STATE OF MONTANA, DEPARTMENT OF JUSTICE, MOTOR VEHICLE DIVISION, Respondent and Respondent.
    No. 96-159.
    Submitted on Briefs October 24, 1996.
    Decided November 14, 1996.
    53 St.Rep. 1136.
    279 Mont. 247.
    927 P.2d 1.

      For Appellant: David. E. Stenerson, Hamilton.
    For Respondent: Joseph P. Mazurek, Attorney General, John Paulson, Assistant Attorney General, Helena; James A. Haynes, Hamilton City Attorney, T. Geoffrey Mahar, Deputy Hamilton City Attorney, Hamilton.
   JUSTICE HUNT

delivered the Opinion of the Court.

Appellant Mark A. Rupp (Rupp) appeals the decision of the Twenty-first Judicial District Court, Ravalli County, upholding the suspension of his driver’s license pursuant to § 61-8-402, MCA, the implied consent law. We affirm.

The sole issue presented on appeal is whether the District Court erred in finding that law enforcement had the necessary particularized suspicion to make a vehicle stop and to arrest Rupp for driving under the influence of alcohol.

On December 13, 1995, at approximately 11:40 pm, two Hamilton police officers were sitting in their patrol car observing the entrance to a particular bar in Hamilton. The officers were watching the bar because they had broken up a disturbance at that location earlier and suspected that the individual who caused the disturbance might attempt to return to the bar.

While watching the bar, the officers observed Rupp exit from the establishment and walk down the street. The officers noted that Rupp was unsteady on his feet, weaving and wobbling “all over the sidewalk.” The officers agreed that Rupp appeared to be drunk. While the officers watched, Rupp continued down the street until he turned a corner and they lost sight of him.

The officers immediately started the patrol car and followed Rupp around the comer, a process the testifying officer estimated took five to ten seconds. When they turned the corner, they observed no pedestrians on the street and no vehicles moving, with the exception of a tan pickup parked close to the corner which they observed starting up. At that time, the officers effected a traffic stop of the pickup, of which Rupp was the driver.

The officers requested that Rupp perform a number of field sobriety tests, which he could not complete, and he was arrested for driving under the influence of alcohol. Rupp later refused to perform a breath test to determine his blood alcohol level, and, consequently, his driver’s license was automatically suspended pursuant to § 61-8-402, MCA, the implied consent law. Rupp appealed the suspension of his license, asserting that the officers had lacked reasonable grounds to effect the traffic stop of his vehicle. The District Court affirmed the driver’s license suspension and Rupp appeals.

This Court’s review of a district court’s denial of a petition to reinstate a driver’s license is two-fold. We review the court’s findings of fact to determine whether they are clearly erroneous, and we review the court’s conclusions of law to determine whether they are correct. Anderson v. State of Montana, Department of Justice, Motor Vehicle Division (1996), 275 Mont. 259, 262, 912 P.2d 212, 214 (citing In re Bauer v. State (1996), 275 Mont. 119, 122, 910 P.2d 886, 887).

Section 61-8-402, MCA, is the statutory provision commonly called the implied consent law. Essentially, the implied consent law provides that:

an individual who is arrested for operating a motor vehicle while under the influence of alcohol is deemed to have given his consent to a chemical test for the purpose of determining the alcoholic content of his blood. Refusal to submit to a chemical test results in immediate seizure of the individual’s driver’s license and formal suspension of the driving privilege by the Department of Justice.

In re Gebhardt v. State (1989), 238 Mont. 90, 93, 775 P.2d 1261, 1264. A driver whose license is automatically suspended has the right to contest the validity of the suspension at a hearing before the district court. Section 61-8-403(1), MCA.

However, the district court’s evaluation of the propriety of the driver’s license suspension is not all-encompassing:

The court shall take testimony and examine the facts of the case, except that the issues are limited to whether:
(i) a peace officer had reasonable grounds to believe that the person had been driving or was in actual physical control of a vehicle upon ways of this state open to the public while under the influence of alcohol, drugs, or a combination of the two;
(ii) the person was placed under arrest; and
(iii) the person refused to submit to the test or tests.

Section 61-8-403(4)(a), MCA.

We have stated that “[a] finding of ‘reasonable grounds’ to make an investigative stop, as required by § 61-8-403(4)(a)(i), MCA, is the equivalent of a finding of‘particularized suspicion’to make an investigative stop under § 46-5-401, MCA.” Seyferth v. State of Montana, Department of Justice, Motor Vehicle Division (1996), [277 Mont. 377], 922 P.2d 494, 498 (citing Anderson, 912 P.2d at 214). Section 46-5-401, MCA, provides:

[i]n order to obtain or verify an account of the person’s presence or conduct or to determine whether to arrest the person, a peace officer may stop any person or vehicle that is observed in circumstances that create a particularized suspicion that the person or occupant of the vehicle has committed, is committing, or is about to commit an offense.

Section 46-5-401, MCA.

The issue of whether the particularized suspicion mandated by § 46-5-401, MCA, exists is a question of fact which is dependent on the totality of the circumstances comprising the incident in question. Anderson, 912 P.2d at 214 (citing State v. Reynolds (1995), 272 Mont. 46, 50, 899 P.2d 540, 542-43). Further, “[b]ecause the statute requires some objective manifestation that a person is engaged in criminal activity before a stop can be made, we adopted a two-part test to determine whether an officer had sufficient cause to stop a person.” Seyferth, 922 P.2d at 498. Under this two-part test, the State must show both objective data from which an experienced officer can make certain inferences, and a resulting suspicion that the occupant of the vehicle is or has been engaged in wrongdoing or was a witness to criminal activity. Seyferth, 922 P.2d at 498. See also State v. Gopher (1981), 193 Mont. 189, 194, 631 P.2d 293, 296; Armstrong v. State of Montana, Department of Justice (1990), 245 Mont. 420, 422, 800 P.2d 172, 174; Jess v. State of Montana, Department of Justice, Motor Vehicle Division (1992), 255 Mont. 254, 260, 841 P.2d 1137, 1140-41; Anderson, 912 P.2d at 214.

In this case, it is undisputed that Rupp was placed under arrest and that he refused to submit to a blood-alcohol measuring test. However, Rupp argues that the suspension of his license was nevertheless unlawful because the officer who arrested him did not have the requisite particularized suspicion to believe that he was in physical control of his vehicle while under the influence of alcohol. Specifically, Rupp argues that, while the officers may have seen him walk down the street, they then lost sight of him and, consequently, did not see him enter his vehicle. Therefore, he argues, they did not have a particularized suspicion to stop the pickup because they could not know for certain that he was the driver and, further, the “unknown” pickup driver had not violated any law of this State. Rupp argues that the only data the officers had was purely subjective — the assumption that Rupp’s staggering meant he was drunk and the assumption that the pickup driver was in fact Rupp. This, Rupp contends, falls short of the objective data necessary under to first part of the “particularized suspicion” test.

We disagree. It is obvious that the officers could not know with absolute certainty that Rupp was intoxicated, simply from watching him walk down the street. But absolute certainty is not required. The State need only establish the existence of a particularized suspicion which is supported by “objective data from which an experienced officer can make certain inferences.” Such objective data includes seeing Rupp exit from a bar and watching him stagger down the street. One does not even have to be an experienced police officer to infer from such data that the individual in question is likely to be under the influence of alcohol.

Nor does the fact that Rupp disappeared from the officers’view for five to ten seconds fatally undermine their determination that he had entered and started the tan truck. Again, objective data existed which would support the inference that the individual whom they had observed on the street ten seconds earlier must have climbed into the truck. This objective data included the following facts: Rupp had disappeared from the sidewalk where he had been observed just seconds before; no other persons were observed on the street; no other vehicles were observed starting or moving on the street; and the position of the pickup would allow an individual to enter it in the short time Rupp was out of sight.

Rupp argues that, in theory, he could have “entered an alleyway, entered a building, entered another vehicle, or simply disappeared into the darkness.” We will grant that, in theory, such occurrences are possible. But again, the law enforcement officers did not need absolute certain knowledge in order to effect the stop. Rather, they needed a particularized suspicion which was supported by objective data sufficient to support the experienced officers’ inference. Here, the officers inferred that the intoxicated pedestrian had entered the truck in question and was preparing to drive away. Such an inference was reasonable under the facts of this case, and the District Court did not err in so finding.

Affirmed.

JUSTICES NELSON, GRAY, TRIEWEILER and ERDMANN concur.


author: JUSTICE LEAPHART

text:
    PATRICIA ELAINE MYSSE, Plaintiff and Appellant, v. DUANE C. MARTENS, MARK PINKERTON, DONALD P. BAILEY, individually and as Public Officers, and ROSEBUD COUNTY, a Montana Political Subdivision, Defendants and Respondents.
    No. 96-261.
    Submitted on Briefs August 15, 1996.
    Decided November 14, 1996.
    53 St.Rep. 1139.
    279 Mont. 253.
    926 P.2d 765.

      For Appellant: K. D. Peterson; Peterson & Schofield, Billings.
    For Respondents: Steven J. Lehman; Crowley, Haughey, Hanson, Toole & Dietrich, Billings.
   JUSTICE LEAPHART

delivered the Opinion of the Court.

Patricia Mysse (Mysse) appeals from the order of the Sixteenth Judicial District Court, Rosebud County, granting Defendants’ motion for summary judgment on all counts. We affirm.

We consider the following issues on appeal:

1. Did the District Court err in dismissing Mysse’s due process claims under 42 U.S.C. § 1983?

2. Did the District Court err in dismissing Mysse’s wrongful discharge claim under the Montana Wrongful Discharge Act?

3. Did the District Court err in dismissing Mysse’s age discrimination claim under 29 U.S.C. § 623?

4. Did Mysse raise any valid tort claims or a valid claim for breach of the covenant of good faith and fair dealing?

Factual and Procedural Background

Mysse’s claims arise out of her termination from her position as Coordinator for the Rosebud County Council on Aging. Mysse was originally hired by Rosebud County in 1972 for a six-month pilot program to provide transportation for senior citizens in Rosebud County. She was 49 years old when she was hired. At the end of the six-month period she was hired to continue the program for an indefinite term. In 1978 she received her job description from an organization entitled Action for Eastern Montana which works with senior citizens in the seventeen counties situated in eastern Montana. She operated under two separate job descriptions, one for Coordinator and one for Transportation.

The Coordinator job description contained a requirement that Mysse create a transportation schedule. It also required the employee to carry out other assignments at the direction of the County Commission on Aging. The Transportation job description contained a requirement that the employee make the schedule available to the public through newspaper and radio advertising. Both job descriptions required that the employee possess an acceptable mode of transportation, a Montana chauffeur’s license, and freedom to travel. Both job descriptions contained methods for mileage reimbursement.

For nineteen years Mysse transported senior citizens in her own automobile upon request. She never transported more than three senior citizens at one time. She never established a schedule but, instead, advertised in the paper that transportation was available upon request and arranged transportation accordingly.

In 1990, the Rosebud County Board of Commissioners (Board) surveyed senior citizens on their transportation needs in consideration of using grant monies to purchase a bus. Mysse believed that the Senior Citizen program did not need the bus. She voiced her opposition to the purchase of the bus to the Board. Mysse later testified that she explained to the Board that she was never able to get more than three persons together at any one time and she believed that the bus, which held twelve people, could not be used or coordinated effectively. Although the Board purchased the bus in 1990, Mysse continued to transport senior citizens in her own automobile without making a set schedule.

On January 24, 1992, at a Rosebud County Board meeting, the Board informed Mysse about complaints received from senior citizens regarding her non-use ofthe bus. At least one representative of Action for Eastern Montana was at the meeting and indicated that if the bus was not used for the transportation of seniors, the County could lose the bus due to the fact that it was purchased with specific grant monies. The Board informed Mysse that arranging a bus schedule and driving the bus were conditions of her job in general, and significant responsibilities of her job as Transportation Coordinator.

Mysse was given an opportunity to respond at the meeting. She stated that she would not drive the bus and that she would not create a schedule as she did not think a schedule would work. The Board told her she would either have to drive the bus or she would lose her job. Thereafter, Mysse informed the Board she was quitting. The Board then asked her to reconsider and to either try driving the bus herself, or to find volunteers willing to drive the bus.

The Board sent Mysse a letter the same day giving her notice that she had to arrange a regular bus schedule and drive the bus or that she would be discharged from her employment with Rosebud County. The letter further informed her that she had three days to respond either in person or by written response. Mysse did not respond and on January 29, 1992, the Board sent her a termination letter setting out the specific reasons for the dismissal. The stated reasons were her refusal to comply with the terms of her job description in scheduling and driving the senior citizen bus. The letter informed her that if she thought she had been treated unfairly she could discuss the problem further with the Board. If no resolution could be reached she was to submit a written complaint within five days and she would be afforded an opportunity to be heard and produce witnesses. These procedures were pursuant to Rosebud County’s Personnel Policy on Grievance.

Mysse filed a complaint with, the Board and approximately thirty days after her termination she appeared at a post-termination hearing. At the hearing Mysse alleged that her termination was illegal and she requested monetary compensation for the balance of her employment through her twenty-year milestone with Rosebud County and for retirement benefits she would have received if she had remained employed for twenty years. Mysse presented various witnesses who testified to her exemplary service throughout her years as Senior Citizen Coordinator. The record is silent as to whether Mysse received any benefits beyond what she earned in her nineteen years of employment with Rosebud County.

Mysse originally filed an age discrimination claim with the Human Rights Commission. Subsequently, Mysse filed a complaint with the Sixteenth Judicial District Court, Rosebud County, alleging deprivation of rights or, in the alternative, wrongful discharge. On September 21, 1993, the Human Rights Commission dismissed her case and issued a right to sue letter. The District Court granted Mysse’s motion to file an amended complaint and Mysse filed the amended complaint. The amended complaint alleged deprivation of rights or, in the alternative, discrimination or, in the second alternative, wrongful discharge.

Rosebud County moved for summary judgment. The Honorable Joe L. Hegel, Judge of the Sixteenth Judicial District Court, granted Rosebud County’s motion for summary judgment and dismissed all of Mysse’s claims. Judgment was entered February 8, 1996. Mysse filed a timely Notice of Appeal.

All of Mysse’s claims involve the issue of whether she was terminated for good cause or because of some wrongful action on the part of the Rosebud County Board of Commissioners. The District Court granted summary judgment to the County and the individual Board members because it found that Mysse was discharged for good cause, namely, refusing to obey lawful directives of the Rosebud County Board of Commissioners.

Our standard of review in appeals from summary judgment rulings is de novo. Mead v. M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785. When we review a district court’s grant of summary judgment, we apply the same evaluation as the district court based on Rule 56, M.R.Civ.P. Bruner v. Yellowstone County (1995), 272 Mont. 261, 264-65, 900 P.2d 901, 903. In Bruner, we set forth our inquiry:

The movant must demonstrate that no genuine issues of material fact exist. Once this has been accomplished, the burden then shifts to the non-moving party to prove, by more than mere denial and speculation, that a genuine issue does exist. Having determined that genuine issues of fact do not exist, the court must then determine whether the moving party is entitled to judgment as a matter of law. We review the legal determinations made by a district court as to whether the court erred.

Bruner, 900 P.2d at 903 (citations omitted).

Issues

1. Did the District Court err in dismissing Mysse’s due process claims under 42 U.S.C. § 1983?

42 U.S.C. § 1983 provides a cause of action for persons deprived of constitutional rights by another person acting under color of state or federal law. The Fifth and Fourteenth Amendments to the United States Constitution and Article II, Section 17 of the Montana Constitution, prohibit a government entity from depriving persons of property without due process of law. Mysse claims that she was deprived of her constitutional rights to due process when the Board terminated her employment without a pre-termination hearing. Before Mysse is entitled to due process for the loss of her job she must first demonstrate that she has a protected property interest in her employment.

In Boreen v. Christensen (1994), 267 Mont. 405, 884 P.2d 761, this Court held that administrative regulations of the Department of Military Affairs, mandating that disciplinary action including discharge be taken only for “just cause,” created a property interest in employment for the discharged employee. This Court limited its decision in Boreen to only those employees who “can point to some written contract, state law, or regulation which states or otherwise provides a specified term of employment and, hence, a property interest in continued employment.” Boreen, 884 P.2d at 770.

In the instant case the parties and the District Court have assumed that the Rosebud County Personnel Policy created a property interest for Mysse. Mysse was hired for an indefinite term after the expiration of her six-month probationary period. The record does not contain the Rosebud County Personnel Policy setting forth the conditions of termination or discharge thus precluding this Court from knowing whether the policy included a “just cause” provision or other term of employment, which would give Mysse a property interest in her employment with Rosebud County. Assuming, arguendo, that Mysse possessed a property interest in her continued employment, the next inquiry is whether she was afforded constitutional due process before that property interest was taken away.

In .Boreen., this Court examined the United States Supreme Court’s analysis of the extent of process due a person who has been terminated from their employment in which he or she enjoyed a property interest. The Court in Cleveland Bd. of Educ. v. Loudermill (1985), 470 U.S. 532, 105 S.Ct. 1487, 84 L.Ed.2d 494, concluded that due process simply required oral or written notice to the employee of the reasons for the termination, including an explanation of the employer’s evidence and the opportunity for the employee to respond in “something less” than a full evidentiary hearing before termination, coupled with a full post-termination hearing “at a meaningful time.” Loudermill, 470 U.S. at 545-46, 105 S.Ct. at 1496. The Supreme Court went on to say that the pre-termination hearing need not definitively resolve the propriety of the discharge. It should be an initial check against mistaken decisions — essentially, a determination of whether there are reasonable grounds to believe that the charges against the employee are true and support the proposed action. Loudermill, 470 U.S. at 545-46, 105 S.Ct. at 1495.

While Mysse has a right to due process, Boreen does not give her a right to a full blown hearing prior to termination. The undisputed facts show that Mysse was afforded written notification of her impending discharge and a pre-termination hearing. At the January 24, 1992, meeting with the Rosebud County Board of Commissioners, Mysse was informed that she would have to create a schedule for the bus and either drive the bus herself or find volunteers to drive the bus or she would be fired. Mysse refused to do either and stated that she would quit. The Commissioners asked her to reconsider and advise them within a few days if she would perform her job duties as requested. This meeting clearly meets the Loudermill requirements of avoiding “mistaken decisions” and ascertaining whether the complaints against the employee are true.

Mysse also was provided a full evidentiary post-termination hearing at which she was allowed to call witnesses on her behalf. The District Court did not err in holding that the Rosebud County Board of Commissioners afforded Mysse her constitutional rights to due process upon termination of her employment. We therefore affirm the dismissal of Mysse’s 42 U.S.C. § 1983 claim.

2. Did the District Court err in dismissing Mysse’s wrongful discharge claim under the Montana Wrongful Discharge Act?

A discharge is wrongful under the Act only if:

(1) it was in retaliation for the employee’s refusal to violate public policy or for reporting a violation of public policy;
(2) the discharge was not for good cause and the employee had completed the employer’s probationary period of employment; or
(3) the employer violated the express provisions of its own written personnel policy.

Section 39-2-904, MCA.

Mysse alleged that her discharge was wrongful under § 39-2-904(2), MCA. The Wrongful Discharge Act defines “good cause” as “reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job duties ....” Section 39-2-903(5), MCA.

In order for an employee to defeat a motion for summary judgment on the issue of good cause, this Court requires the employee to prove that the given reason for the discharge, such as failure to perform the services the employee was hired to perform, is a pretext and not the honest reason for the discharge. See Coombs v. Gamer Shoe Co. (1989), 239 Mont. 20, 778 P.2d 885, and Cecil v. Cardinal Drilling Co. (1990), 244 Mont. 405, 797 P.2d 232. “Mere denial or speculation will not suffice, the non-moving party must show facts sufficient to raise a genuine issue.” Cecil, 797 P.2d at 235.

The Board determined that Mysse was not meeting her job responsibilities as described in the job descriptions. She refused to create a transportation schedule and she refused to drive the bus. Although driving the bus was not made an explicit duty in either of the job descriptions it was a reasonable directive given by her employer as part of her overall responsibilities as Transportation Coordinator. No evidence was presented indicating that the purchase of the bus and the requirement that Mysse drive the bus and set up a regular schedule was done for any reason other than to attempt to better serve the senior citizens of Rosebud County.

Mysse’s allegations that she was made a “scapegoat” for the County’s improvident purchase of the bus is unsupported by any factual basis in the record. Mysse may be inferring that her termination saved money thereby vitiating the Board’s “improvident” decision to purchase the bus. However, the fact that the bus was purchased with grant monies and the fact that the Board hired another person to fill Mysse’s position after her termination defeats this inference. Mysse’s allegations that she was made a “scapegoat” for the County’s improvident purchase of the bus is “mere speculation” which does not rise to the level of a “pretext” as defined in Cecil. Mysse’s termination was the direct result of her refusal to drive the bus or create a transportation schedule. The Board terminated Mysse because she refused to satisfactorily perform her job duties. This meets the Wrongful Discharge Act’s definition of good cause and therefore defeats Mysse’s wrongful discharge claim. The District Court did not err in dismissing Mysse’s wrongful discharge claim and we therefore affirm the dismissal of this claim.

3. Did the District Court err in dismissing Mysse’s age discrimination claim under 29 U.S.C. § 623?

According to the Age Discrimination in Employment Act (ADEA), “it shall be unlawful for an employer ... to discharge any individual ... because of such individual’s age.” 29 U.S.C. § 623(a)(1).

This Court defined the standard for analyzing summary judgment motions on discrimination in Heiat v. Eastern Mont. College (1996), 275 Mont. 322, 331-32, 912 P.2d 787, 793. The plaintiff must first allege a prima facie case. Following the plaintiff’s prima facie case:

If the employer comes forward with a legitimate non-discriminatory reason, the plaintiff must then, in addition to having alleged a prima facie case in the complaint, produce evidence that establishes her prima facie case as well as evidence which raises an inference that the employer’s proffered reason is pretextual.
Of course, this does not mean that a plaintiff in a discrimination action always survives summary judgment when the plaintiff calls the employer’s proffered explanation into question. Rather than having to demonstrate with specific facts that the employer’s explanation “is a pretext,” she need only introduce evidence which raises an inference that the employer’s proffered reason is pretextual. To create a genuine issue of material fact as to pretext, the plaintiff must not only introduce evidence from which a reasonable person could infer that she is qualified, she must also introduce evidence that casts doubt on the defendant’s contention that there was a legitimate business justification for defendant’s action.

Heiat, 912 P.2d at 793 (citations omitted; emphasis added).

Assuming that Mysse alleged a prima facie case of age discrimination in her complaint, Rosebud County, as the moving party on a summary judgment motion, must prove that it had a legitimate nondiscriminatory reason for terminating Mysse.

Even though Mysse may have felt that the purchase of the bus in 1990 was a pretext for terminating her due to her age, the Board had legitimate reasons to purchase the bus. The Board conducted a survey of senior citizens and discovered a need for greater transportation opportunities for the seniors. Moreover, so long as the employer’s proffered reason for an adverse employment decision is both honest and nondiscriminatory, its business judgment, no matter how erroneous, cannot be challenged in an age discrimination action. Morton v. Associated Dry Goods Corp. (S.D. Ind. 1992), 792 F.Supp. 1136.

The Board asked Mysse, in her capacity as Transportation Coordinator, to establish a schedule and drive the bus. Mysse refused to do either. Failure to satisfactorily perform job duties (in Mysse’s case failure to perform certain duties at all) is a legitimate nondiscriminatory reason for termination of an employee. See Schultz v. General Elec. Capital Corp. (7th Cir. 1994), 37 F.3d 329; Frazer v. KFC Nat’l Management Co. (D.C. Ga. 1980), 491 F.Supp. 1099 (holding that the ADEAneither prevents employer’s from changing job responsibilities of older employees nor does it allow older employees to walk out on their jobs and sue the employer for age discrimination because they dislike their changed job responsibilities).

It is undisputed that Mysse was terminated because she refused to follow the directive of the Board to drive the bus and because she refused to perform the explicit duty of setting and advertising a regular schedule for the bus. As the moving party on a motion for summary judgment, Rosebud County met its burden of offering a legitimate nondiscriminatory reason for the discharge.

According to the Heiat test, in order to survive a summary judgment motion in a discrimination case, Mysse had to establish a prima facie case of age discrimination. To establish a prima facie case of age discrimination under the ADEA, a plaintiff must either provide direct evidence of discrimination or produce evidence that:

(1) she was in the protected age group; (2) she was performing her job satisfactorily; (3) she was discharged; and (4) she was replaced by a substantially younger person. [Citations omitted.]

Tonack v. Montana Bank of Billings (1993), 258 Mont. 247, 253, 854 P.2d 326, 330. In the present case Mysse failed to make out a prima facie case of age discrimination. Although she was in the protected age group pursuant to the ADEA when she was discharged, (Mysse was 69 when she was terminated) and replaced by a younger person, she was not performing her job satisfactorily. Since Mysse was not able to establish that she was performing her job satisfactorily, she failed to make out a prima facie case of age discrimination.

Furthermore, Mysse failed to raise an inference that Rosebud County’s proffered reason was a pretext for the discharge. The only inference of “pretext” offered by Mysse is that the Board “attempted to make her the scapegoat for their improvident spending.” Not only was the bus purchased with grant monies, but the Board hired another person to fill Mysse’s position after Mysse’s termination. This Court fails to see any logical nexus between the Board’s “improvident” purchase of the bus and its decision to discharge Mysse. This “scapegoat” theory does not raise an inference of pretext as to the Board’s contention that it fired Mysse for legitimate business reasons (Mysse’s refusal to perform reasonable job duties). See Heiat, 912 P.2d at 793.

Mysse also alleges that previous to the January 24,1992, meeting with the Board, one Commissioner asked her if she were going to retire. Mysse concedes that this question arose during casual conversation. This question alone does not give rise to an inference that she was fired for her age rather than fired for refusing to drive the bus. See Bolton v. Scrivner, Inc. (10th Cir. 1994), 36 F.3d 939 (finding that a single comment from a supervisor calling an employee an “old fart” did not show pretext in the employer’s decision not to rehire the employee absent a showing of nexus between those comments and the employer’s decision not to rehire).

Mysse further alleges that she overheard other senior citizens discussing that she may be too old to drive the bus and that the Board should hire a man to drive the bus. The truthfulness of these allegations is irrelevant as the senior citizens had no part in the decision to discharge Mysse from her job. Age related comments by non-decision makers are not material in showing that an employer’s actions are based on age discrimination. Snoey v. Advanced Forming Technology, Inc. (D. Colo. 1994), 844 F.Supp. 1394.

Even if Mysse had made out a prima facie case of age discrimination, she failed to raise an inference that the Board’s decision to discharge her for refusing to drive the bus was a “pretext” for discharging her because of her age. We hold that the District Court did not err in granting Rosebud County’s motion for summary judgment and therefore we affirm the dismissal of Mysse’s age discrimination claim.

4. Did Mysse raise any valid tort claims or a valid claim for breach of the covenant of good faith and fair dealing?

Mysse alleges that the District Court erred by failing to consider or decide other claims and torts alleged by her in her amended complaint. Mysse claims that her complaint sets forth various tort claims including breach of the covenant of good faith and fair dealing, emotional stress, harassment, humiliation, impairment of reputation, pain and suffering, and punitive damages.

Rosebud County and the individual defendants claim that Mysse did not raise any of these issues as separate claims in her amended complaint, except possibly the claim for breach of the covenant of good faith and fair dealing which, according to Rosebud County, is prohibited from being raised as a separate claim under the Montana Wrongful Discharge Act, § 39-2-902, MCA. Rosebud County further alleges that Mysse’s failure to bring these issues to the District Court’s attention in her brief in opposition to their summary judgment motion, or at any other time, forbids her from bringing the issues before this Court for the first time on appeal.

While this Court follows the general rule that complaints are to be construed in a light most favorable to the plaintiff, Kleinhesselink v. Chevron, U.S.A. (1996), 277 Mont. 158, 920 P.2d 108, 110, this Court also recognizes that:

a complaint must state something more than facts which, at most, would breed only a suspicion that plaintiffs have a right to relief. Liberality does not go so far as to excuse omission of that which is material and necessary in order to entitle relief.

Treutel v. Jacobs (1989), 240 Mont. 405, 407, 784 P.2d 915, 916. Mysse’s amended complaint alleged the following violations:

procedural and substantive due process rights as guaranteed by the Fourteenth Amendment of the United States Constitution, the Constitution of the State of Montana as contained in Article II, § 3, Inalienable Rights, § 4 Individual Dignity, and § 17 Due Process of Law.

Mysse alleges, in her opening brief to this Court, that the above violations stated in her amended complaint, encompass the “Montana constitutional tort claims” that she raises on appeal. While Montana adheres to the notice pleading requirements of “a short and plain statement of the claim showing that the pleader is entitled to relief ...” (Rule 8(a), M.R.Civ.P), the claim must give notice to the other party of the facts which the pleader expects to prove, and the facts must disclose the presence of all the elements necessary to make out a claim. See Butte Country Club v. Metropolitan Sanitary & Storm Sewer Dist. No. 1 et al. (1974), 164 Mont. 74, 77, 519 P.2d 408, 409; Story Gold Dredging Co. v. Wilson (1935), 99 Mont. 347, 42 P.2d 1003; Union Bank & Trust Co. v. Himmelbauer et al. (1923), 68 Mont. 42, 216 P. 791; accord Jones v. Community Redevelopment Agency of the City of Los Angeles (9th Cir. 1984), 733 F.2d 646 (interpreting Federal Rule 8(a)(2), Fed.R.Civ.P.).

Mysse in no way indicated in the complaint how her discharge from Rosebud Comity formed the basis of any of the specific torts she refers to in her appellate brief and claims to have raised in the complaint. Mysse’s indication that certain of her federal and state constitutional rights were violated did not give the defendants notice that Mysse was claiming intentional infliction of emotional distress, tortious interference with contract, or any other tort claim. We hold, therefore, that Mysse’s complaint did not adequately aver the tort claims of intentional infliction of emotional distress, tortious interference with employment, or any other tort claim. Because Mysse did not adequately raise the claims of intentional infliction of emotional distress, tortious interference with contract, or any other tort claim in her complaint or at anytime to the District Court, these claims are barred from being raised for the first time on appeal. See Deist v. Wachholz (1984), 208 Mont. 207, 678 P.2d 188.

The only claim set out specifically in the complaint which Mysse alleges the District Court improperly ignored is the claim for breach of the implied covenant of good faith and fair dealing. Rosebud County alleges that Mysse’s claim of breach of the covenant of good faith and fair dealing was either necessarily a part of her claim under 42 U.S.C. § 1983, or if asserted as an independent claim, that it was prohibited by the Montana Wrongful Discharge From Employment Act (WDFEA), §§ 39-2-901 et seq., MCA.

The WDFEA is the exclusive remedy for a wrongful discharge in Montana. See § 39-2-902, MCA. The WDFEA provides that no claim for discharge may arise from common-law remedies such as tort or express or implied contract. See § 39-2-913, MCA. However, the WDFEA does not limit a claimant’s right to plead an independent cause of action in conjunction with a claim under the Act. See Beasley v. Semitool, Inc. (1993), 258 Mont. 258, 853 P.2d 84 (holding that an employee’s claim for breach of the covenant of good faith and fair dealing arising out of compensation-related agreements was not barred by the WDFEA because the claims were not for damages caused by an asserted wrongful discharge); see also Dagel v. City of Great Falls (1991), 250 Mont. 224, 819 P.2d 186 (holding that the employee’s claims for breach of the covenant of good faith and fair dealing, accruing after the effective date of the WDFEA, and arising out of the discharge, were barred by the WDFEA).

As in Dagel, Mysse alleges no separate circumstances apart from her discharge to support a claim of breach of the implied covenant of good faith and fair dealing. Mysse’s only complaint against Rosebud County that could constitute a breach of the implied covenant of good faith and fair dealing is that she was wrongfully discharged after nineteen years of satisfactory performance. This claim is not separate and distinct from her claim of wrongful discharge. Consequently, Mysse’s claim for breach of the implied covenant of good faith and fair dealing is barred by § 39-2-913, MCA, of the WDFEA. Furthermore, because Mysse did not allege any damages arising from this breach separate from the damages arising out of her discharge, the complaint is insufficient to indicate a separate claim. See Beasley, 853 P.2d at 86. Therefore, the District Court did not err in granting summary judgment.

Conclusion

The District Court’s summary judgment order dismissing Mysse’s 42 U.S.C. § 1983 claim, the wrongful discharge claim, and the age discrimination claim is affirmed. We further hold that Mysse’s claim for a breach of the implied covenant of good faith and fair dealing was not only insufficiently pled but is barred by § 39-2-913, MCA, of the WDFEA.

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