Jensen v. State

No. 85-340
IN THE SUPREME COURT OF THE STATE OF MONTANA
1986

CLARE J. JENSEN,
Plaintiff and Appellant,

STATE OF MONTANA, DEPARTMENT OF
LABOR & INDUSTRY, JOB SERVICE
DIVISION, and DAVID HUNTER,
Defendants and Respondents.

APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable Joel G. Roth, Judge presiding.

COUNSEL OF RECORD:

For Appellant:
Marra, Wenz, Johnson & Hopkins; Neal G. Jensen,
Great Falls, Montana

For Respondent:
R. Scott Currey, Dept. of Labor & Industry, Helena,
Montana

Submitted on Briefs: Jan. 16, 1986
Decided: April 17, 1986

Filed: APR 17 1986

Clerk
Mr. Justice John C. Harrison delivered the Opinion of the
Court.

Clare Jensen appeals from an order of the Cascade
County District Court which dismissed Count I1 of his amended
petition for veterans preference in the termination of his
job. We affirm the order of the District Court.
The facts of this case are basically undisputed by the
parties. Appellant Clare Jensen ("Jensen") was hired by the
Employment Security Division, the predecessor of the Job
Service Division of the Department of Labor and Industry, in
1961. When initially hired by the Department, Jensen, a
veteran, claimed and received a n employment preference.
. In
March 1982, Jensen applied for the position of Employment
Manager I11 in the Great Falls Job Service Office. On or
about June 16, 1982, Jensen was informed by the Department
that he was not chosen for the Great Falls manager position.
On June 30, 1982, Jensen was terminated pursuant to a
department-wide reduction in force.
On July 5, 1983, Jensen filed an Amended Petition to
Enforce Employment Preference in the District Court, Eighth
Judicial District, in and for the County of Cascade. His
amended petition contained three counts. Count I alleged
that Jensen was not hired by the respondents, (hereinafter
"Department"), as the manager of the Great Falls Job Service
Office in violation of his veterans preference. Count I1
alleged that he was terminated pursuant to a reduction in
force by the Department in violation of his veterans prefer-
ence, and Count I11 alleged that the 1982 interview process
utilized by the Department in filling the manager's position
violated a rule of the now defunct Montana Merit System
Council.
In July 1983, in response to Jensen's amended petition,
the Department filed a Consolidated Motion that in part asked
the District Court to dismiss Jensen's amended petition. In
August 1983, the parties filed with the District Court a
stipulated set of facts and an agreement that the court would
hear only Jensen's Count I. Paragraph 5 of the Stipulation
dealt with the remaining two counts of Jen.senrs amended
petition. It read:
Petitioner's Counts Two and Three shall
be reserved and that all claims and
defenses arising from Counts Two and
Three are reserved as to all interested
parties. Any statutes of limitation
pertinent to Counts Two and Three are
tolled pending the resolution of
petitioner's Count One.
On September 19, 1983, the District Court issued an
order ruling on Jensen's Count I. The court found that
Jensen had been denied his veterans preference. In addition,
the District Court ordered the Department to appoint Jensen
to the manager's job and to provide him with backpay.
. The
Department appealed this order. In Jensen v. State of Mon-
tana, et al. (Mont. 1984), 689 P.2d 1231, 41 St.Rep. 1971,
this Court affirmed in part and vacated in part the District
Court's order. Th.is Court concluded:
For the foregoing reasons, we vacate that
part of the judgment that addresses
Jensen's remedy and remand to the Dis-
trict Court with directions to order the
Department of Labor and Industry to
reopen the manager position to the origi-
nal applicants, grant Jensen and the
other preferred applicants their prefer-
ence, and otherwise fill the vacancy in
accordance with Crahtree.
Jensen. 689 P.2d at 1235.
 The Department subsequently did reopen the manager's
position in question, reinterviewed the preferred applicants,
including Jensen, and filled the position with a preferred
applicant, not Jensen.
While the Department's appeal involving Count I was
pending before this Court, however, the Montana legislature
met in special session in December 1983 and enacted a new
Veterans' and Handicapped Persons' Employment Preference Act
which became effective December 20, 1983. This new act
retroactively repealed the old Veterans Preference Act under
which Jensen had filed his amended petition. In doing so,
the legislature decreed that claims under the old act were
barred if they were not reduced to judgment on the effective
date of the new act. Only cl.aims that had been reduced to
judgment before December 20, 1383, were enforceable, and no
claims under the old act could be made under the new act.
In February 1985, the Department filed an Amended
Motion to Dismiss asking the District Court to dismiss the
remaining Counts I1 and I11 of Jensen's amended petition.
With regard to Count TI, the subject of this appeal, the
Department argued that Section 14 of the new Veterans
Preference Act (which is now known as the "retroactive
repealer") had the effect of barring Count I1 and its
allegation that Jensen was wrongfully terminated by the Great
Falls Employment office because the person who was retained
in his position was not a veteran. The Department argued
that since Jensen's claim in Count I1 was not reduced to
final judgment before the effective date of the new act
(December 20, 1983), his preference claim was barred.
In March 1985, Jensen filed a Motion of Partial Summary
Judgment as to his Count 111. In June 1985, the District
Court granted the Department's motion to dismiss Counts I1
and I11 of Jensen's amended petition and denied Jensen's
Motion for Partial Summary Judgment. Jensen then commenced
this appeal in which he only appeals that portion of the
District Court's order dismissing Count I1 of his amended
petition.
Jensen presents the following issue for review by this
Court :
Whether Jensen's claim of veterans preference under

Count 11, which was expressly reserved by the Stipulation of
the parties, survived the Montana legislature's "retroactive
repealer."
Jensen's Count I1 is brought pursuant to S$ 10-2-201
through 10-2-206, MCA (repealed 1983) . In Crabtree v. Mon-
tana State Library (M0n.t. 1983), 665 P.2d 231, 40 St.Rep.
963, issued approximately one month before Jensen filed his
amended petition, this Court held that $ 10-2-201 through
5 10-2-206 granted qualified veterans and handicapped civil-

ians an "absolute preference" over non-veterans and
non-handicapped applicants in public employment. Sections
1.0-2-201 through 10-2-206, referred to here as the old Veter-
ans Preference Act, were repealed by the legislature in
special session in December 1983 as part of its adoption of
the new "Montana Veterans' and Handicapped Persons'
Employment Preference Act," S 39-30-101, et seq. MCA.
Section 14 of the act reads:
Section 14. Repealer. Sections 10-2-201
through 10-2-206, MCA, are repealed.
This repeal applies retroactively to bar
any claim of violation or application of
10-2-201 through 10-2-206 that has not
been reduced to judgment, whether or not
the judgment is final, on the effective
date of this act [December 20, 19831.
Claims und.er 10-2-201 through 10-2-206
 that have been reduced to judgment,
whether or not the judgment is final, on
the effective date of this act, are
enforceable. No claim for a violation of
10-2-201 through 10-2-206 may be made
under section 8 of this act [39-30-206
and 39-30-2071.
As the Department points out, the validity of Section
14 was affirmed by this Court in Conboy v. State of Montana
(Mont. 1985), 693 P.2d 547, 42 St.Rep. 120. Jensen now
argues that Count 11, although not yet reduced to judgment,
is not barred by Section 14 due to a Stipulation (quoted
above) between the parties herein "reserving" his claim.
Jensenls argument can be summarized by the following excerpts
from his brief:
The issue in this appeal can be stated
simply: Can the government, obliged as
though a private person to observe the
terms of its contracts, totally repudiate
by a legislative act its earlier express
a.greement to reserve an individual s
claims. That is, can the government
forbid one to pursue a claim which it had
earlier affirmatively promised an
ind-ividual he could preserve?

Simply stated, the Department is now
seeking to backtrack on its earlier
Stipulation, for the sole purpose of
trapping Jensen who relied in good faith
on such written agreement when he did not
bring Count Two on for a hearing and
reduce it to judgment while awaiting the
Department's appeal of Count One. By
abiding by his agreement to wait for
Count One to be resolved, Jensen should
not now be penalized. Judicial economy
was achieved by pursuing Count One to a
conclusion.

For his patience and consideration ...
Jensen should not be thrown out of Court.
Instead, the Department should be com-
pelled to abide by the Stipulation, and
its express agreement to reserve Jensenls
Count Two preference claim pending the
resolution of Count One, even though a
 special session of the blontana
Legislature has intervened.
Jensen's argument in this case, although intriguing and
persuasively written, is flawed and cannot stand. This Court
may sympathize with Jensen's position, but we cannot ignore
the realities of the current law in this state.
Both parties seem to agree that paragraph 5 of the
Stipulation was entered into voluntarily for the purpose of
simplifying litigation. The intent seems to be clear: to
get Count I, apparently viewed by the parties as the key
issue, before the District Court as quickly as possible.
We agree with Jensen that the Stipula.tion should be
viewed as a contract or agreement that is to be interpreted
pursuant to contract principles. See: Olson v. Idaho
Department of Water Resources (Idaho 1983), 666 P.2d 188, and
Thayer v. Federal Life Insurance Company s is. 1935), 258
N.W. 849. Jensen seems to argue that this Stipulation
creates an obligation on behalf of the Department to
"reserve" Jensen's claim for an indefinite period and
regardless of the action of the legislature. As the
Department points out, however, this argument fails to take
into consideration the gratuitous character of Jensen's
und.erlying veterans preference claim.
In Conboy this Court held, in discussing the character
of the veterans preference created by the old preference law,
that :
We hold that the veterans ' preference
rights granted under the repealed portion
of the Veterans Preference Act are not
rights earned through years of service to
the state, but are a gratuity given to
citizens of Montana by the State to show
its appreciation for service in the Armed
Forces. They do not amount to rights
vested in the veterans.
 We further point out that in repealing
the old veterans1 preference law,
§ 10-2-201 through 10-2-206, MCA, the
legislature was not faced with any statu-
tory or constitutional limitations on its
rights of repeal. There is no provision
in that Act or in the Montana Constitu-
tion limiting the leqislaturels right to
repeal the preference.. .. We conclude
that the legislature properly could
repeal the veterans1 preference by a
majority vote at any time and that veter-
ans acting under the old law are deemed
to have acted in contemplation of that
power of repeal on the part of the
legislature.
Conboy, 693 P.2d at 552.
This position adopted in Conboy was recently reaffirmed
by this Court in Femling v. Montana State University (Mont.
1986), 713 P.2d 996, 43 St.Rep. 235, and ~ i c kv. Montana
Department of Highways (Mont. 1985), 711 P.2d 795, 42 St.Rep.
1926. In Fleming, this Court stated:
"A citizen can have no vested right in a
general law which can preclude its
amendment or repeal, and there is no
implied promise on. the part of the state
to protect its citizens against
incidental injury occasioned by changes
in the law." Stanford v. Coram (1903),
28 Mont. 288, 293, 72 P. 655, 656. As
we noted in Conboy v. State (Mont.
1985), 693 P.2d 547, 42 St.Rep. 120, a
veteran acting under the absolute
veterans1 preference statute did so in
contemplation of the legislature's power
of repeal. Statutes may be replaced at
any time, and a person acting under a
statute is "deemed to have acted in
contemplation of this power of repeal."
Section 1-2-110, MCA.

In Conboy, we stated that the preference
statute was a gratuity given to veterans
by the State. It did not amount to a
right vested in the veterans. Conboy,
693 P.2d at 552. We reaffirmed this
conclusion in Nick v. Montana Dept. of
Hwys. (Mont. 1985), 711 P.2d 795, 42
St.Rep. 1926.
Fleming, 713 P.2d at 998.
When viewed in light of Conboy, Femling and Nick, the
Department correctly argues the Stipulation must be viewed as
an agreement to reserve a claim based on a gratuity that the
legislature was empowered to repeal at any time. Jensen and
other veterans are deemed to have "acted in contemplation" of
this power to repeal. In other words, Jensen entered the
Stipulation. with knowledge of the legislature's power to
repeal the old Veterans Preference Law at any time.
Jensen's strong reliance on Perry v. United States
(1935), 294 U.S. 330, 55 S.Ct. 432, 79 L.Ed. 912, indicates
that he is confusing the gratuitous nature of his claim with
the binding contractual nature of the Stipulation. As the
Department points out, a close reading of Perry shows that
the situation in that case is easily distinguishable from the
present case. In Perry, the Court was asked to decide
whether a joint resolution passed by Congress allowing the
United States government to pay off government bonds with
currency rather than gold, as called for in the bond
obligation itself, was proper. The Court found that Congress
could not change its contractual obligation by legislation
once that obligation had been incurred. The implication is
that the bond holder's right to be paid in gold had vested
and once vested could not be tampered with by Congress.
Jensen relies on this case to argue that the Montana
legislature's passage of Section 14 illegally repudiates the
Stipulation or "contract" he had with the Department reserv-
ing his Count I1 claim. Jensen sums up his argument under
this issue by stating:
[I] Perry the point is inescapable: -
n a
qovernment cannot repudiate - -
its own
contracts.
 A government, such as the State of
Montana in this case, must be held to
the terms of its contracts. If its
agent stipulates to reserve the claims
of an individual under an existing
legislative act, that Stipulation cannot
be repudiated and annulled simply on the
pretext of the subsequent "fluctuating
policy" of the Legislature.

Just as the bond before the Court in
Perry was "an obligation of the United
States," so too is the Stipulation
executed by counsel for the Department
an obligation of the State of Montana.
The Department correctly points out, however, that in
Perrv the obligation at issue was a bond obligation creating
vested rights in the bond holder. The government was
attempting to modify these vested rights by giving bond
holders less than they had bargained for. In this case, the
obligation that Jensen relies on is a Stipulation reserving
the enforcement of a claim. It does not create a claim as in
Perry. The Stipulation reserves a claim that can be
eliminated at any time by legislative action. The fact that
the claim was reserved does not change the character of the
claim--it can still be eliminated by the legislature at any
time.
We agree with the Department that Jensen. is attempting
to make a gratuity into a vested right. His argument implies
that the preference creates an obligation, rather than a
gratuity, however this is not the current law in light of
Femling, Nick and Conboy, supra. The Stipula.tion,therefore,
reserved only what existed at the time it was entered into (a
gratuity). It cannot now be used to give Jensen more than he
originally had.
 The District Court's order dismissing Jensen's Count
I1 is affirmed.

We concur:

Justices
Mr. J u s t i c e John C . Sheehy, d i s s e n t i n g :

Justice sometimes t a k e s strange forms. This case is

illustrative.

When J e n s e n f i r s t b r o u g h t h i s c a s e h e r e , J e n s e n v . State

( 1 9 8 4 ) , 689 P.2d 1231, 4 1 St.Rep. 1971, t h i s Court h e l d t h a t

t h e a b s o l u t e p r e f e r e n c e accorcled v e t e r a n s under t h e V e t e r a n s

and Handicapped Civilian Employment Preference Act (5
10-2-201, et seq. PCA) was applicable, and therefore we
remanded the case so that the manager position could be

reopened and a decision made in the accordance with the

preference. I n t h a t c a s e b o t h J u s t i c e H a r r i s o n and myself

d i s s e n t e d , s a y i n g t h a t s i n c e J e n s e n had b o r n e t h e h e a t o f t h e

battle to secure the result that recognized the veterans

p r e f e r e n c e law, h e should b e t h e r e c i p i e n t o f t h a t b e n e f i t .

In a later case involving Charles F. Femling (Mont.

19861, 713 P.2d 9 9 6 , 43 St.Rep. 235, t h i s C o u r t h e l d t h a t t h e

legislature could retroactively withdraw all veterans

p r e f e r e n c e r i g h t s w i t h o u t v i o l a t i n g t h e due p r o c e s s c l a u s e o f

the state or federal constitution. I dissented in the

Femling c a s e on t h e ground t h a t Femling had a p p l i e d f o r s t a t e

employment at a time when he had a statutory right to

preference, he had claimed the preference, his right had

v e s t e d and s o he was e n t i t l e d t o t h e job.

Now, J e n s e n i s back a g a i n . What happened t o him b e f o r e

t h e Department was what we p r e d i c t e d , t h a t t h e Department o f

Labor and I n d u s t r y would n e v e r g r a n t him t h e job t o which h e

had proven his right, but in retaliation for beating the

Department i n c o u r t , t h e appointment would go t o some o t h e r

veteran. The m a j o r i t y opinion now condones this result.
 J dissent from the majority opinion here on the grounds
that Jensen was entitled to the job from the heginning, was
entitled. to the job by reason of his being successful. in the
first Jensen case, and that his right had become vested, as I
argued in Femling, from the time that he demanded the benefit
of the preference law in his application for appointment.
In an era when this country seems to be undergoing a
binge of patriotism with country-rock singers blazing out
their love for the flag, and our armed forces confronting
every two-bit nation in the world, the attitude of this State
through its legislature and courts towards the men and women
who actually gave something of themselves to protect the
country is a contradiction. Rudyard Kipling must have been
looking down the long years to this State when he wrote of
the difference in treatment accorded Tommy Atkins in
peace-time and in war-time:
Then its Tommy this an' Tommy that and "Tommy,
'OW'S your soul?''
But its "Thin red line of 'eroes" when the drums
begin to roll.
The drums begin to roll my boys, the drums begin
to roll.
Oh it's "Thin red line of 'eroes" when the drums
begin to roll.
We aren't no thin red. 'eroes nor we aren't no
blackguards too,
But single men in barricks most remarkable like
you.
An' if sometimes our conduck isn't all your fancy
paints
Why, single men in barricks don't grow into
plaster saints.
While its Tommy this and Tommy that an' "Tommy
fall be'ind",
But it's "Please t-o walk in front, sir" when

-
there's trouble in the wind.
There's trouble in the wind, my boys, there's
trouble in the wind.
Oh it's "Please to walk in front, sir", when
there's trouble in the wind.
R .-
Justice
Mr. Justice Frank B. Morrison j o i g in the dissent of Mr.
Justice John C. Sheehy.