No. 89-157
IN THE SUPREME COURT OF THE STATE OF MONTANA
1989
RAY T. SPERRY,
plaintiff and Appellant,
-vs-
MONTANA STATE UNIVERSITY,
Defendant and Respondent.
APPEAL FROM: ~istrictCourt of the ~ighteenth~udicial~istrict,
In and for the County of all at in,
The Honorable Thomas Olson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Lineberger & ~arris;Douglas D. ~ a r r i s ,Bozeman,
Montana
For Respondent:
Dorothy L. Brownlow; Moore, OIConnell, ~eflingand
Moon, Bozeman, Montana
Submitted on ~riefs: Aug. 3, 1989
Decided: August 30, 1989
Justice Fred J. Weber delivered the Opinion of the Court.
The plaintiff, Ray V. Sperry, brought this action to
recover "conversion compensation" allegedly due him as a
result of a contract conversion that took place in 1967 at
Montana State University. After a bench trial, the District
Court for the Eighteenth Judicial District, Gallatin County,
entered judgment for Montana State University. From this
judgment, Mr. Sperry appeals. We affirm.
The issues are:
1. Did the District Court err in concluding that the
retirement agreement entered into between MSU and Mr. Sperry
constituted a complete waiver and release of all claims he is
now asserting?
2. Is Mr. Sperry's claim barred by the doctrine of
laches?
Mr. Sperry was employed at Montana State University
(MSU) from 1965 through March 31, 1986, retiring as Director
of Continuing Education. At the commencement of his employ-
ment with MSU, and for the next two years, the terms of a
written contract known as the "Montana 12 Contract" governed
his employment. The Montana 12 Contracts allowed employees
to take an eighth quarter leave with pay for research, travel
or any other reason approved by the Board of Regents. Em-
ployees were required to work seven quarters before eligibil-
ity for eighth quarter leave accrued. They were also allowed
to accumulate two quarters, a total of six months.
In 1967, the Board of Regents ordered MSU to terminate
the Montana 12 Contract and convert to a one-year contract.
Mr. Sperry's contract was converted to a fiscal year con-
tract. At that time his annual salary was increased by
$1000, from $7800 to $8800, which constituted a 13% increase
in pay. Mr. Sperry signed an agreement acknowledging and
accepting the change from a Montana 12 Contract to a fiscal
contract which stated that "all accumulated eighth quarter
leave" had been taken, and he waived claim to any future
eighth quarter leave.
From 1967 until retirement in 1986, Mr. Sperry signed
nineteen individual annual employment contracts with MSU, all
of which stated the term of the employment and the agreed
salary for that year. None of these contracts mentioned any
conversion compensation due. Conversion compensation arose
from the replacement of Montana 12 Contracts with the annual
contracts as compensation for the additional time worked
without leave. Mr. Sperry now contends he reached an oral
agreement with MSU entitling him to conversion compensation
amounting to an additional 10% increase in pay.
In April, 1983, Mr. Sperry wrote a letter to Michael F.
Malone, Dean of Graduate Studies, to discuss possibilities of
early retirement and requesting a salary adjustment for the
last three years. The essence of his proposal stated:
Before seriously considering an early retire-
ment, it is imperative that my final average three
year salary be increased significantly. As you
know, according to Regents guidelines, my current
salary is below their guidelines. ..
[Tlhe total cost to the University for my proposal
would be insignificant. The first year savings to
MSU would be $7,708.00. Reflecting a total cost of
between $5,000.00 and $6,000.00 for the three
contract periods. ..
[I] propose the following salary schedule:
1983-84 -- $37,000.00 (actual cost to MSU -
$29,393.00)
1985-86 -- $43,000.00 (9 month contract, July 1,
1985-March 30, 1986)
He wrote a follow-up letter in December, 1986 which stated:
My original correspondence requested a three year
salary adjustment beginning the current academic
year. The primary reason was to increase my last
three years salary for early retirement purposes.
MSU rejected his original offer, so Mr. Sperry submitted the
following request and schedule in his letter:
1) Fiscal year 84-85, I receive a Regents con-
tract with my raise equal to the average MSU
faculty raise for this period.
2) Beginning July 1, 1985, I receive a Regents
contract to the end of March 30, 1986 (9
months) . During this period the contract
would include an average faculty increase. I
also receive an additional 4 years contract
salary based upon the current contract.
Succinctly, I receive 14 times my contracted
salary paid to me in 9 months instead of 12
months. During this period, I would continue
to earn sick leave and vacation time.
3) In the event a universally applied incentive
is offered, all MSU employees opting for early
retirement, the above agreement would not
prejudice me.
In the conclusion of his letter, he stated:
If a satisfactory arrangement is reached
between the University and myself, I will offer a
statement agreeing not to pursue - - -
a past wage
greivance. [sic] (~mfisisadded.)
In a third letter, Mr. Sperry wrote a revised proposal,
changing only the second provision's term of "1/2 year" to
"1/3" and "1 1/2" to "1 1/3If. He restated his agreement "not
to pursue a past wage grievance" if "the [proposed] agreement
is reached."
After an agreement was reached, Mr. Sperrlr wrote a
formal resignation letter on February 9, 1984, to he
effective as of March 31, 1986. These letters of correspon-
dence comprise the "retirement agreement," which is central
to this dispute.
One year after agreement on the terms of retirement, Mr.
Sperry for the first time sought conversion compensation from
MSU in a letter to the Vice President for Academic Affairs,
Dr. Stuart Knapp. He contended that at the time of the 1967
conversion, he was offered a 23% salary increase, received a
13% increase, and 10% is still due and owing as conversion
compensation. Applied retroactively, this amounts to nearly
$30,000 of conversion compensation.
I
Did the District Court err in concluding that the re-
tirement agreement entered into between MSU and Mr. Sperry
constituted a complete waiver and release of all claims he is
now asserting?
The District Court made the following pertinent findings
of fact and conclusions of law:
Findina of Fact:
- On May 11, 1967, plaintiff signed an agreement
#7:
by which he accepted the stated terms on the change
of period of employment. ..
- Although
#8: alleged, no oral agreement with
Robert McCall, plaintiff's supervisor, was estab-
lished with particularity.
- Plaintiff
#9: accepted 19 subsequent
post-conversion employment contracts.
#lo:
- In the subsequent 19 years after conversion,
plaintiff failed to pursue defendant's grievance
procedures for any shortage in his salary since
1967.
#11:
- In January and February 1984, plaintiff
negotiated with defendant's Michael P. Malone, then
acting vice-president for academic affairs, for an
early retirement.
- On February 9, 1984, plaintiff confirmed in a
#12:
memorandum that he found the financial considera-
tions acceptable. In addition, he further stated
that his was an official resignation from the
university effective March 31, 1986.
- As part of the consideration of his retire-
#13:
ment, defendant increased plaintiff ' s final pay to
$45,370 for a nine-month period, and plaintiff
agreed to "not pursue any past wage grievances".
#14:
- Defendant fully complied with all the terms
and conditions of the retirement agreement.
#15: At no time during plaintiff's retirement
G o t i a t i o n discussions with defendant did he
inform defendant he claimed additional compensation
due him from his conversion in 1967, 13 years
previously.
Conclusion of Law:
#2:
- Plaintiff accepted the terms set forth in the
1967-68 employment contract without written formal
concern as to deferred compensation. The retire-
ment aareement entered into between plaintiff and
-~~- -
defendkt constitutes - -
a full waiver and release of
any claims plaintiff --- against defendant
may have had
arisina from salarv or waaes due to plaintiff as a
- - - -
d -
result of his emplgyment iith defendant.
- Plaintiff is not entitled to any additional
#4:
compensation for his employment at MSU. (Emphasis
added.
On appeal, Mr. Sperry contends his own oral testimony
was sufficient to establish conversion compensation was due.
He contends that his direct supervisor indicated his increase
in pay did not include the conversion compensation, but
promised he would receive that additional salary increase at
a later date. Mr. Sperry testified that the only person who
would have known of the alleged oral contract was his direct
supervisor, Robert McCall. Mr. McCall died in 1971. Mr.
Sperry did not raise the issue of conversion compensation
until February 1985, one year after signing the retirement
agreement.
MSU contends there was no such agreement, and any such
claim was waived when he accepted the terms of the retirement
agreement.
Waiver is an equitable doctrine, applicable when there
is an intentional or voluntary relinquishment of a known
right, claim or privilege, or such conduct as warrants an
inference of the relinquishment of such right. State v.
Statczar (Mont. 1987), 743 P.2d 606, 44 St.Rep. 1668; Kelly
v. Lovejoy (1977), 172 Mont. 516, 565 P.2d 321.
Release is defined as the abandonment of a claim to the
party against whom it exists and may be gratuitous or for
consideration.
It is fundamental that an effective release can be
consummated without resort to a particular form of
words, for "all that is necessary is that the words
show an intention to discharge." (Citations
omitted. )
Melo v. National Fuse and Powder Co. (D.Colo. 1967), 267
F.Supp. 611. To be enforceable, a release must at a minimum
be unambiguous, explicit, and unequivocal. Simonson v.
Travis (Utah 1986), 728 P.2d 999, 1002. In Montana, the law
of contracts governs releases. Westfall v. Motors Ins. Corp.
(19621, 140 Mont. 564, 374 P.2d 96.
We conclude that Mr. Sperry's signing of nineteen,
one-year contracts and cashing paychecks over the past nine-
teen years without complaint of no conversion compensation,
in combination with his acceptance of the retirement agree-
ment and his promise not to pursue a past wage grievance,
constitute a complete waiver and release.
An Alaskan Supreme Court holding is comparable to the
case at bar. In that case, the note maker raised no objec-
tion to the credit union's alleged failure to collect inter-
est according to the terms of the loan agreement. This
continued for a three-year period, when each lot subject to
security agreement was sold, despite the fact he was required
to sign the deed to complete the sale of each lot. For each
sale, he had an opportunity to examine the ledger sheet that
showed how the escrow company intended to disburse the pro-
ceeds of each sale. The court held he waived his right to
assert that the credit union breached the loan agreement by
failing to collect interest on the sale of each lot. Jackson
v. Nangle (Alaska 1984), 677 P.2d 242, 249.
In the same way, Mr. Sperry signed his pay checks for
nineteen years with knowledge of any increases and decreases,
but without raising objection regarding the lack of any
conversion compensation.
We conclude that there exists substantial credible
evidence to support the District Court's conclusion that Mr.
Sperry's signing of the retirement agreement waived and
released his right to any wage claims. We affirm the Dis-
trict Court on this issue.
I1
Is Mr. Sperry's claim barred by the doctrine of laches?
On appeal, MSU contends Mr. Sperry's claim is barred by
laches. Although this was not a part of the findings of fact
and conclusions of law of the District Court, the defense of
laches was asserted in the Final Pre-Trial Order, so it is
subject to review by this Court.
Mr. Sperry testified that his direct supervisor indicat-
ed his increase in pay did not include the conversion compen-
sation, but promised he would receive that additional salary
increase at a later date. MSU contends Mr. Sperry received a
13% increase, which included his conversion compensation, and
there was no promise by anyone to pay him further increases.
The only person other than Mr. Sperry, who would have
known of the alleged oral contract was his direct supervisor,
Robert McCall. Mr. McCall died in 1971. Yet, the only time
Mr. Sperry brought the issue of conversion compensation to
the attention of anyone else at MSU was in his February 1985
letter to Michael F. Malone, long after Robert McCall's
death, and after completing the retirement agreement. He did
not raise the issue again until after he retired.
MSU contends that Mr. Sperry's claim for such conversion
compensation is now barred by the equitable doctrine of
laches. We agree. Laches exists where there has been an
unexplainable delay of such duration or character as to
render the enforcement of an asserted right inequitable.
Brabender v. Kit Mfg. Co. (1977), 174 Mont. 63, 67-68, 568
P.2d 547, 549. Where a party is actually or presumptively
aware of his rights but fails to act, laches is appropriate.
Clayton by Murphy v. Atlantic Richfield Co. (1986), 221 Mont.
166, 170, 717 P.2d 558, 561. A party is held to be aware of
their rights where the circumstances he or she knows of are
such as to put an ordinarily prudent person on inquiry.
Johnson v. Estate of Shelton (Mont. 1988), 754 P.2d 828, 831,
45 St.Rep. 887, 891. Mr. Sperry asks for a retroactive wage
increase for the last nineteen years of his employment. He
does not allege that he was unaware of this claim during that
time. We hold Mr. Sperry's claim is barred by the doctrine
of laches.
Although MSU argues that Mr. Sperry's claim is also
barred by the statute of limitations, we find it unnecessary
to discuss that issue in light of our holding on laches.
Furthermore, we will not address Mr. Sperry's contentions
that MSU breached the implied covenant of good faith and fair
dealing. This Court will not address on appeal an issue not
presented to the District Court. Wyman v. DuBray I~andRealty
(Mont. 1988), 752 P.2d 196, 45 St.Rep. 621.
Affirmed.