No. 90-292
IN THE SUPREME COURT OF THE STATE OF MONTANA
1991
IN THE MATTER OF THE GRIEVANCE OF:
DORIS I. BRANDER,
Petitioner and Respondent,
DIRECTOR, MONTANA DEPARTMENT OF
INSTITUTIONS,
Respondent and Appellant.
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 Appellant:
James Obie, Legal Counsel, Department of
Institutions, Helena, Montana
For Respondent:
Peter Michael Meloy, The Meloy Law Firm, Helena,
Montana
Submitted on briefs: January 10, 1991
FEB X 9 11991 Decided: February 19, 1991
Filed:
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Justice Terry N. Trieweiler delivered the Opinion of the Court.
Doris I. Brander petitioned the District Court of the First
Judicial District in Lewis and Clark County for judicial review
pursuant to 5 2-4-702, MCA, of a decision by the ~irectorof the
Department of Institutions for the State of Montana. That decision
rejected the findings of the Department s grievance committee to
the effect that petitioner had been wrongfully denied employment
within the Department. The District Court reversed the decision
of the Director and remanded the matter to the Department of
Institutions with the order that it adopt the recommendation of the
grievance committee. From that judgment, the Department appeals.
We affirm.
The Department asserts that the issue on appeal is:
Whether the District Court applied the proper standard for
reviewing an agency decision pursuant to 5 2-4-704, MCA?
Brander asserts that the issue on appeal is more properly
stated as follows:
Whether the ~istrict Court correctly concluded that the
Director of the Department of Institutions failed to properly apply
§ 2-4-621(3), MCA, when reviewing factual determinations made by
its duly appointed grievance committee.
Section 2-7-704, MCA, sets forth the statutory standards for
judicial review of agency decisions. It provides in relevant part
as follows:
2-4-704. Standards of review. (1) ...
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(2) The court may not substitute its judgment for that
of the agency as to the weight of the evidence on
questions of fact.. .. The court may reverse or modify
the decision if substantial rights of the appellant have
been prejudiced because:
(a) the administrative findings, inferences,
conclusions, or decisions are:
(i) in violation of constitutional or statutory
provisions;
(ii) in excess of the statutory authority of the agency;
(iii) made upon unlawful procedures;
(iv) affected by other error of law;
(v) clearly erroneous in view of the reliable,
probative, and substantial evidence on the whole record;
(vi) arbitrary and capricious or characterized bv abuse
of discretion or clearly unwarranted exercise of
discretion; (Underlining added.)
Section 2-4-621, MCA, is also found in the Administrative
Procedure Act in that chapter which sets forth the procedures to
be followed by state agencies in deciding contested cases. Section
621 pertains to those situations where the agency official who
renders the decision is not the person who personally heard or
observed the evidence. Subsection (3) provides in relevant part
as follows:
(3) ...The agency in its final order may reject or
modify the conclusions of law and interpretation of
administrative rules in the proposal for decision but may
not reject or modifv findinas of fact unless the asency
first determines from a review of the comwlete record and
states with particularitv in the order that the findinss
of fact were not based upon competent substantial
evidence or that the proceedings on which the findings
were based did not comply with essential requirements of
law ... (Underlining added.)
r 1
We conclude that an answer to the issue raised by the
appellant is dependent upon the answer to the issue raised by the
respondent. We further conclude that a resolution of those issues
is dispositive of this case, and, therefore decline to address the
second issue raised by the appellant.
Summary of the Facts
Doris Brander went to work at Warm Springs State Hospital as
the medical records supervisor in 1976. From 1981 until 1986, she
worked under the supervision of Jane Edwards, who was the director
of Treatment and Residential Services. During that time,
petitioner had strained relations with Edwards over the appropriate
procedure to be followed in the medical records department and over
petitioner's approach to dealing with employees who were under her
supervision.
In February of 1986, Edwards became the superintendent of the
Montana State Hospital. In that capacity, she recommended to
Carroll South, the Director of the State Department of
Institutions, that the position of medical records supervisor at
Warm Springs be consolidated with the corresponding position at
Galen State Hospital and that there be one supervisor for both
institutions. That recommendation was accepted by South in July
of 1986 and petitioner was advised of the Department's intention
in mid-August of 1986.
Edwards appointed an interview committee consisting of four
people to interview and evaluate applicants for the combined
position. In early September the petitioner and Billy Holmlund,
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her counterpart, at Galen State ~ospital,were notified of the new
position. They were invited to apply and were advised that theirs
were the only applications that would be accepted.
On October 7, the committee interviewed the two applicants and
evaluated them in four areas. The formal appraisal, awarded points
in (1) education and training; (2) work experience; (3) the
interview; and, (4) past work performance. As a result of that
appraisal, Holmlund received a total of 225 points and the
petitioner received 137 points. The following day, petitioner was
notified that Holmlund would be hired for the combined position of
medical records supervisor of the Montana State Hospitals and
petitioner was terminated from employment effective October 24,
1986.
Petitioner filed an employee grievance which was finally
accepted by the Department on December 2, 1986. Pursuant to
Departmental rules for non-union grievances, a three person
committee was selected to hear evidence of the petitioner's
grievance. One committee member was chosen by the petitioner; one
was chosen by the Department; and, those two members selected a
third member to act as chairperson of the committee.
The grievance committee met on July 11, 1988. They heard
testimony from the petitioner, Jane Edwards, and several other
witnesses, including members of the evaluation committee. At the
hearing, petitioner testified that she had not been hired because
she had been treated in a discriminatory fashion by Edwards and
because of other errors made in the evaluation process. Prominent
. 1
among those errors was the interview committeegsfailure to credit
her with 30 points to which she was entitled because of her four
years of education in the field of medical records.
On July 15, 1988, the committee unanimously found that the
petitioner and Edwards had a troubled working relationship which
adversely affected her work evaluations (Ray Lappin, a member of
the evaluation committee had previously testified that in order to
evaluate petitioners prior work performance the committee simply
looked at her evaluation forms. This category, alone, resulted in
petitioner's loss of 67 points compared to Holmlund in the formal
appraisal that was done).
In addition, the grievance committee found as a matter of fact
that the evaluation was unfair to the petitioner because of
inadequate credit to her for her education, inadequate credit to
her for her work experience, and general misapplication of the
interview process which made it unreliable. The committee found
that the cumulative effect of these mistakes was a misapplication
of the Department of Institutions personnel policies and
procedures. As a result, the committee recommended that the
petitioner be made whole by the payment of the salary for a
combined medical records supervisor from the date of her
termination, less any income she might have earned in the interim.
The committeegs unanimous recommendations were passed along
to Carroll South, who had the responsibility for entering a final
decision of the Department of Institutions. Without conducting an
' 1
additional hearing or receiving any additional evidence, South
rejected two of the committees factual findings:
(1) He stated that there was nothing in the record to
indicate that the grievance committee received into
evidence any of the petitioner's performance evaluations
and that, therefore, there was no evidence in the record
to sustain the grievance committee's finding that
petitioner's "troubled relationship with Edwards"
adversely affected her appraisal.
(2) While agreeing that petitioner had been awarded 30
points less than she should have received in her formal
appraisal, he determined that that deficiency, plus any
other irregularities in the interview and appraisal were
not sufficient to have changed the evaluation committee's
overall result.
Based upon these findings, South rejected the recommendations
of the grievance committee.
On November 10, 1988, Brander petitioned the District Court
for the First Judicial District in Lewis and Clark County to review
the Director's decision pursuant to the provisions of 5 2-4-702,
MCA. The District Court considered a transcript of the grievance
committee hearing, the records reviewed by the Director of the
Department and the briefs and arguments of the parties. Based upon
that information, the District Court concluded that there was
factual evidence to support the grievance committees factual
findings and that by rejecting those factually supported findings,
South violated 5 2-4-621(3), MCA. The District Court concluded
that in doing so South exceeded his statutory authority and abused
his discretion under 5 2-4-704, MCA. The District Court reversed
the decision of the Department of Institutions and remanded with
an order that it adopt the recommendation of the grievance
committee.
On appeal, the Department argues that the District Court had
no authority to reverse or modify the Department's decision unless
the petitioner's substantial rights were prejudiced for one of the
reasons set forth in 1 2-4-704, MCA. That is correct.
The appellant then, however, proceeds from the incorrect
premise that the ~istrictCourt's decision was based solely upon
its reversal of factual findings made by the Department and sets
forth authority, including City of Billings v. Billings
~irefighters,Local 251 (1982), 200 Mont. 421, 651 P.2d 627 and
Chagnon v. Hardy Construction Co. (1984), 208 Mont. 420, 680 P.2d
932 for the proposition that an agency's factual determinations
cannot be overturned unless they are clearly erroneous in view of
the evidence in the record. The Department argues that since there
was evidence in the record (the testimony of Jane Edwards) to
support the Director's findings, they were not clearly erroneous.
The Department's argument would be persuasive if the District
Court Is decision was rendered pursuant to 1 2-4-704 (2)(vi), MCA,
which provides in relevant part that:
(2) ... The court may reverse or modify the decision
if substantial rights of the appellant had been
prejudiced because:
(a) The administrative findings, inferences,
conclusions, or decisions are:
(v) clearly erroneous in view of the
reliable, probative, and substantial evidence
on the whole record.
a I
However, the District Courtlsdecision was based upon the next
subparagraph of § 2-4-704, MCA, which allows reversal if the
Department s findings were, (vi) arbitrary or capricious or
characterized by abuse of discretion or clearly unwarranted
exercise of discretion; ... 11
The District Court concluded that it was an abuse of the
Director s discretion to reject the factual findings of the
grievance committee if, in doing so, he violated S 2-4-621 (3), MCA.
That section, as previously pointed out, prohibits the Director,
who neither heard nor personally observed the testimony from
arbitrarily rejecting the factual findings of the grievance
committee which actually did hear and observe the witnesses.
Before he can do so, the Director must first determine from a
review of the complete record that the grievance committee findings
were not based upon "competent, substantial evidence. l1 We agree
with the District Court that if the Director rejected the grievance
committee's factual recommendations in violation of this section,
it constituted an abuse of discretion within the meaning of 5 2-
4-704 (2)(a)(v), MCA.
11.
The remaining issue is whether the District Court properly
concluded from its review of the record that there was competent,
substantial evidence to support the factual findings of the
grievance committee. We conclude that there was.
*
The petitioner testified that in 1985, Edwards threatened her
with disciplinary action for going over her head in a dispute over
the proper procedure for preserving medical records. She further
testified that in a continuation of the bad relationship which was
caused by that experience and in the process of evaluating her as
an employee, Edwards criticized her ability to supervise other
employees. The petitioner clearly testified that she was rated
poorly as an employee by Edwards for these reasons.
Ray Lappin, who succeeded Edwards as the petitioner's
supervisor, and who served as a member of the selection committee
testified that in order to evaluate the applicant's past work
performance, the committee simply looked at her previous evaluation
fo m s .
As a result of past evaluations, Holmlund received 100 points
in her formal appraisal and the petitioner received only 33. If
that disparity was the result of discriminatory action by Edwards,
then it, in combination with the 30 points that the Director admits
petitioner should have received for her prior education would have
more than made up the difference in the total number of points
received by Holmlund and petitioner.
The question is, therefore, whether there was substantial
evidence to support the grievance committee's finding that
petitioner's poor working relationship with Edwards was directly
related to the termation of her employment.
9
The petitioner testified that it did. The direct evidence of
one witness who is entitled to full credit is sufficient for the
proof of any fact. Section 26-1-301, MCA.
Therefore, the District Court was correct in its conclusion
that by rejecting the grievance committee s findings South violated
3 2-4-621(3), MCA.
For these reasons, the District Court decision and order is
affirmed and this matter is remanded to the District Court for
implementation of its judgment dated March 2, 1990 which orders
that:
...The decision of the Department of Institutions is
reversed and the matter is remanded with the order to
adopt the recommendation of the grievance committee.
Affirmed.
We Concur: /
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f
f hief Justice