No. 90-331
IN THE SUPREME COURT OF THE STATE OF MONTANA
1991
JOHN J. STUART AND
LEE J. TICKELL,
Plaintiffs and Appellants,
DEPARTMENT OF SOCIAL AND REHABILITATION
SERVICES, a state agency with the
executive branch of state government,
and the STATE OF MONTANA,
Defendants and Respondents.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
The Honorable Dorothy McCarter, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Edmund F. Sheehy, Jr.; Cannon & Sheehy, Helena,
Montana
For Respondents:
G. Curtis Drake; Keller, Reynolds, Drake, Sternhagen
& Johnson, Helena, Montana
For Amicus:
Carter N. Picotte, Attorney at Law, Helena, Montana
(For Montana Public Employees Association)
Submitted on Briefs: February 13, 1991
Filed: -
MAR 6 1 9
91 Decided: March 6, 1 9 9 1
tlerk
Justice R.C. McDonough delivered the Opinion of the Court.
Plaintiffs, John J. Stuart and Lee J. Tickell, appeal from an
order of the First Judicial District Court, Lewis and Clark County,
granting summary judgment in favor of the Department of Social and
Rehabilitation Services (hereinafter SRS) and the State of Montana
and dismissing plaintiffs' complaint. We affirm in part, reverse
in part and remand.
The issues are:
1. Whether the District Court erred in finding that the
appellants were not denied notice and opportunity for hearing with
respect to forfeiture of their annual leave.
2. Whether the District Court erred in granting summary
judgment on the basis that thc appellants' failure to exhaust
administrative remedies precluded them from challenging the
constitutionality of 5 2-18-617(2), MCA.
3. Whether this Court should assume original jurisdiction
under the Montana Declaratory Judgments Act to resolve the
remaining constitutional issues raised.
John J. Stuart was the Chief of the Personnel Division for
SRS . Lee J. Tickell was the Acting Administrator of the
Centralized Services Division of SRS. On July 21, 1989, the
Director of SRS gave notice by letter to both Stuart and Tickell
that their employment with SRS was terminated as of July 31, 1989,
unless they requested a hearing on the terminations. Both were
advised that they were temporarily suspended without pay pending
a final date of termination. Stuart and Tickell were further
advised that the reasons for their terminations were criminal
mischief charges pending against them for destroying property of
a fellow employee. An additional reason given for Tickell1s
termination was SRS1s conclusion, following an investigation, that
he had committed sexual harassment and other misconduct against
female employees of SRS.
On July 25, 1989, by separate letter, Stuart and Tickell both
requested a hearing on their respective terminations. Both parties
agreed to submit the issue of suspension without pay to a hearing
examiner without a formal hearing. On August 25, 1989, the hearing
examiner issued a proposed order upholding the decision of SRS to
suspend the employees without pay. The issue of the employees
using their accrued compensation or annual leave during the period
of suspension was also brought before the hearing examiner,
however, the hearing examiner refused to rule on the issue stating
that the employees first had to submit their requests to SRS for
a decision consistent with administrative rules and agency policy
pursuant to Section 2.21.8013, A.R.M. SRS adopted the recommended
order of the hearing examiner on August 28, 1989.
On that same day, Stuart and Tickell submitted formal requests
to SRS to use their accrued compensation time and annual leave for
their grievance proceedings. On September 11, 1989, SRStsattorney
sent a letter to appellants1 attorney advising them that SRS would
not offer Stuart and Tickell the right to use accrued compensation
time, and that the use of accrued annual leave was also being
denied until the terminations were final. The appellants were
advised to resubmit their requests for accrued annual leave at that
time.
On September 20, 1989, Stuart was convicted of felony criminal
mischief, and Tickell was convicted of the felony offense of
accountability for criminal mischief. On September 29, 1989, each
appellant was paid one quarter of their accumulated sick leave
pursuant to 5 2-18-618 (5), MCA, and orally notified that they would
not receive their accrued annual leave. On October 10, 1989,
Stuart and Tickell stipulated to waive their rights to the
administrative hearing on their terminations, as a result of the
conviction of criminal charges.
Stuart and Tickell filed the complaint in this action in
District Court on October 6, 1989, challenging the failure of SRS
to reimburse their accrued annual leave upon their termination.
In addition, appellants sought penalties under §§ 39-3-205 and 206,
MCA, as well as a declaratory ruling that they were entitled to
accrued annual leave because they had no notice of forfeiture, and
a declaratory ruling that 2-18-617 (2), MCA, was unconstitutional.
On June 18, 1990, the District Court granted summary judgment in
favor of SRS and plaintiffs appealed.
The first issue is whether the District Court erred in finding
that the appellants were not denied notice and opportunity for
hearing with respect to forfeiture of their annual leave.
Appellants argue that they were never given any notice of
forfeiture and notice of a right to file a grievance and,
therefore, were deprived of their accumulated annual leave without
due process. We disagree. The record shows that the appellants
requested hearings on their terminations and agreed to have a
hearing examiner decide the issue of suspension without pay. They
also brought before the hearing examiner the issue of using accrued
annual leave during the period of suspension, however the hearing
examiner refused to rule on that question and informed appellants
that they should submit their requests in accordance with
administrative regulations. Appellants did so and were notified,
in writing, by counsel for SRS on September 11, 1989, that their
requests were denied. The letter went on to read,
Although SRS is denying the request to use vacation time
now, this may be reviewed when the employees are actually
terminated, which cannot occur with respect to Mr. Stuart
and Mr. Tickell until they have had the administrative
hearing which they have demanded as part of the grievance
procedure. If they wish to resubmit their requests for
unused vacation time upon actual termination, it will be
reconsidered.
Actual termination could not have occurred until Stuart and
Tickell waived their right to the hearings on their terminations
on October 10, 1989. Therefore the issue of whether they were
entitled to their annual leave upon termination could not be
addressed until that time.
In Welsh v. City of Great Falls (1984), 212 Mont. 403, 690
P.2d 406, we stated that an individual can only waive his right to
a hearing if he knew of his right and voluntarily waived that
right. Welsh, 212 Mont. at 411, 690 P.2d at 411. Whether
appellants knew of their right by way of notice or whether they had
independent knowledge of a right to a hearing does not matter.
Here, Stuart was formerly the head of the Personnel Division for
SRS and Tickell the acting administrator of SRS1s Centralized
Services Division. Both had, by experience, superior knowledge of
grievance procedures in their agency and utilized them personally
in grievance matters. In addition, the letter clearly notified
appellants of the fact that they were entitled to request their
annual leave upon actual termination. These facts coupled together
certainly indicate appellants knew they may not receive their
annual leave and, if such were the case, were entitled to a hearing
on the matter.
A waiver of a right can be express or implied by conduct.
Welsh, 212 Mont. at 411, 690 P.2d at 411. The appellants never
attempted to pursue their administrative remedy with respect to
their forfeiture of annual leave. They attempted to proceed
directly to the District Court, and in fact, filed their complaint
in District Court before they had even had their requested hearings
on the matter of their terminations. Such conduct can only be
interpreted to be a voluntary waiver of appellants1 right to a
hearing on their denial of annual leave. The appellants cannot
fail to pursue an available administrative remedy and then turn
around and claim they were denied due process. We hold that the
District Court did not err in finding that the appellants were
afforded sufficient due process with respect to forfeiture of their
annual leave.
The second issue is whether the District Court erred in
granting summary judgment to SRS on the basis that the appellants1
failure to exhaust their administrative remedies precluded them
from challenging the constitutionality of 5 2-18-617, MCA.
The District Court held that since the appellants failed to
give the SRS agency an opportunity to resolve the grievance, all
various constitutional claims made by appellants must fail. The
District Court failed to explain how it reached this conclusion and
we can only surmise that it relied on the arguments made by SRS.
SRS contends that since appellants presented issues suitable for
administrative review in addition to the constitutional issues, the
appellants must first exhaust their administrative remedies. SRS
cites Raynes v. City of Great Falls (1985), 215 Mont. 114, 696 P.2d
423, in support of its argument. Ravnes does not state that all
issues must be constitutional before those issues can be brought
in a declaratory judgment action without exhausting administrative
remedies. The language in Ravnes is somewhat misleading as the
special concurrence therein indicates. It is possible for a
constitutional claim to not be properly before a court in a
declaratory judgment action as was the situation in Ravnes,
however, this does not mean administrative remedies must be
exhausted before bringing a declaratory judgment action to resolve
a constitutional question. This Court has previously held that the
exhaustion doctrine is not applicable to constitutional issues.
See Mitchell v. Town of West Yellowstone (1988), 235 Mont. 104, 765
P.2d 745. SRS also cites Roeber v. State of Montana (1990), 243
Mont. 437, 795 P.2d 424, to support the argument that declaratory
judgment proceedings are unavailable if an administrative remedy
is available. In Roeber, however, there were no constitutional
issues raised. Roeber is inapplicable to the situation here.
Constitutional issues are questions for the courts and not
administrative agencies. As we stated in Mitchell:
When such a bona fide constitutional issue is raised, a
plaintiff has a right to resort to the declaratory
judgment act for a determination of his rights; and he
may not be required to submit himself to the provisions
of the ordinance which he claims are unconstitutional.
.
. . The first business of courts is to provide a forum
in which the constitutional rights of all citizens may
be protected.
Mitchell, 235 Mont. at 109-110, 765 P.2d at 748.
Appellants are not precluded from challenging the
constitutionality of 5 2-18-617, MCA, solely on the basis that they
failed to exhaust their administrative remedies. The
constitutional issues raised, excluding their denial of due process
claim, were properly before the District Court.
The last issue is whether this Court should assume original
jurisdiction under the Montana Declaratory Judgments Act to resolve
the constitutional issues raised by appellants.
Appellants urge this Court to exercise our original
jurisdiction under the Uniform Declaratory Judgments Act, §§ 27-
8-101 et seq., MCA, and resolve the remaining constitutional
issues. The three major factors that must exist before this Court
will exercise its original jurisdiction are:
(1) where constitutional issues of major statewide
importance are involved, (2) where the questions involved
are purely legal questions of statutory or constitutional
construction, and (3) where urgency and emergency factors
exist making the normal appeal process inadequate.
(Citation omitted.)
White v. State (1988), 233 Mont. 81 at 84, 759 P.2d 971 at 973.
Taking each factor individually, we first consider whether the
constitutional issues raised by appellants are of major statewide
importance. Appellants challenge the constitutionality of 5 2-
18-617(2), PICA, on its face and, consequently, challenge a statute
that applies to State employees and has the potential of affecting
all State employees upon their termination. A statute with the
potential of affecting such a large number of individuals across
the State can be classified as major statewide importance.
The second factor requires that there be only legal questions
involved. The District Court granted a summary judgment and could
not have done so if there existed any material issue of fact. In
reviewing the record we agree with the District Court and find the
second factor exists.
However, upon consideration of the third factor, we cannot
conclude that there exists any urgency or emergency factors that
make the normal appeal process inadequate. It is not a situation
where appellants have been suspended and are still waiting for a
decision on whether they have jobs, and similarly, to our knowledge
there exists no immediate circumstances where others need an
expeditious result. The normal appeal process is clearly adequate
in this situation and such being the case, we will not usurp the
jurisdiction of the District Court.
The issue of due process is affirmed. The remaining
constitutional issues of equal protection, improper delegation of
authority and vagueness as they relate to 5 2-18-617(2), MCA, are
remanded to the District Court for further proceedings.