No. 92-083
IN THE SUPREME COURT OF THE STATE OF MONTANA
JAMES ALLISON,
Plaintiff and Respondent,
v.
JUMPING HORSE RANCH, INC.,
Defendant and Appellant.
APPEAL FROM: District Court of the Fifth Judicial District,
In and for the County of Madison,
The Honorable Frank Davis, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Richard C. Nellen and James A. McLean,
Drysdale, McLean, Nellen & Nellen,
Bozeman, Montana; Michael P. Sand, Sand
Law Offices, Bozeman, Montana
For Respondent:
Edmund P. Sedivy, Jr., and David L. Weaver,
Morrow, Sedivy & Bennett, Bozeman, Montana
Submitted on Briefs: August 6, 1992
Decided: December 8, 1992
Filed:
Justice William E, Hunt, Sr., delivered the opinion of the Court.
Respondent James ~llison brought his claim for wrongful
discharge in the Montana Fifth Judicial District Court, Madison
County. Appellant Jumping Horse Ranch filed a motion for summary
judgment claiming the statute of limitations had passed. The
motion was denied by the District Court. After respondent had
presented his case in chief, appellant moved for a directed verdict
on the same basis as the motion for summary judgment, which was
also denied, The jury returned a verdict in favor of respondent.
Appellant appeals from both denials.
We affirm.
We rephrase appellant's issue as follows:
At what point, under 8 39-2-911(1), MCA, of the Wrongful
Discharge From Employment Act, does the statute of limitations
begin to run?
In 1971, respondent was hired as a ranch manager by Robert M.
.
Beck, owner of the Jumping Horse Ranch, Inc. (hereinafter qtranchtl)
Respondent worked for appellant for approximately 17 years.
Apparently during the 1980s the ranch began losing money. On
July 12, 1988, Beck notified respondent that he was to be
terminated as an employee because Beck believed he was burned out
on ranching and would "jump shipttand start his own outfitting
business. However, on the same day, Beck requested that respondent
stay on until October 1, 1988, to assist and train the new manager,
which respondent agreed to do. Respondent continued to receive his
$3000 monthly salary and benefits. On November 3, 1988, Beck, as
president of the ranch, signed a census report regarding the
ranch's employee pension program which listed respondent's date of
termination as October 1, 1988. On September 29, 1989, respondent
filed a complaint for wrongful discharge against appellant.
Respondent complained that he was wrongfully terminated because of
Mrs. Helen Beck's figrumblings.l'
On May 29, 1990, appellant filed a motion for summary judgment
on t h e basis t h a t the statute of limitations had passed, pursuant
to 5 39-2-911 (1), MCA. The motion was denied. After respondent
presented his case in chief, appellant moved for a directed verdict
on the same basis. This motion was also denied. On January 24,
1992, the jury returned a unanimous verdict in favor of respondent.
Appellant appeals the denial of both motions.
At what point, under 39-2-911(1), MCA, of the Wrongful
Discharge From Employment Act, does the statute of limitations
begin to run?
Appellant argues that the time begins to run from the notice
of discharge.
The legislature has expressly intended that the Wrongful
Discharge From Employment Act be the exclusive remedy for wrongful
discharge. Section 39-2-902, MCA. The Act preempts common law
remedies and alters the statute of limitations that could be
obtained under common law theory for breach of the implied covenant
of good faith and fair dealing. Sections 39-2-913 and -911, MCA.
3
The statute of limitations for bringing a wrongful discharge
claim is governed by § 39-2-911 (I), MCA, which states that "an
action under this part must be filed within 1 year after the date
of discharge. " Section 39-2-903 (2) , MCA, defines "discharge" as
including:
[Clonstructive discharge as defined in subsection (1) and
any other termination of employment, including
resignation, elimination of the job, layoff for lack of
work, failure to recall or rehire, and any other cutback
in the number of employees for a legitimate business
reason. [Emphasis added.]
The statute fails to define "termination of employment" and is
silent as to when the "termination of employment" would become
effective. Therefore, we must determine what was the intention of
the legislature when the Wrongful Discharge From Employment Act was
passed.
In order to make that determination we must first look to the
plain meaning of the words used in the statute. Missoula County v.
American Asphalt, Inc. (1985), 216 Mont. 423, 701 P.2d 990. To
interpret a phrase within the plain meaning rule, ""the language
used must be reasonably and logically interpreted, giving words
their usual and ordinary meaning."" American Asphalt, 701 P.2d at
992 (quoting In re Matter of McCabe (1975), 168 Mont. 334, 339, 544
P.2d 825, 828).
'ITermination of employment" is a term of art and refers to the
existence of the relationship of employer and employee. It has
been defined to mean "a complete severance of the relationship of
employer and employee by positive act on the part of either or
both." Edwards v. Equitable Life Assur. Soc. (Ky. 1944), 177
S.W.2d 574, 577. See also Black's Law ~ictionary1641 (Rev. 4th
ed. 1968). We have previously defined "terminate" as meaning
'Iu[t]o put an end to; to make to cease; to end."" Towne v. Towne
(1945), 117 Mont. 453, 465, 159 P.2d 352, 357, (quoting Webstergs
International Dictionary (2d ed. ) ) .
Appellant contends that respondent failed to file his claim
for wrongful discharge within the applicable statute of limitations
under 5 39-2-911, MCA, and relies on our holding in arti in v.
Special Resource Management, Inc. (1990), 246 Mont. 181, 803 P.2d
1086. In Martin, we stated that the statute of limitations begins
to run on a terminated employee's action for breach of the implied
covenant of good faith and fair dealing on the date of notice given
to the employee. Appellant argues that although Martin did not
address the Wrongful isc charge From Employment Act, the reasoning
behind the decision is still valid in that if a person is standing
on the edge of a cliff and is pushed off, he need not wait to hit
the ground before knowing his cause of action accrued. We
disagree.
We specifically limited the holding in Martin to the facts of
the case. In that case, the appellant was given notice on June 2.6,
1987, that her position would be terminated on July 17, 1987,
slightly more than two weeks after the Wrongful Discharge From
Employment Act became effective. The issue phrased in arti in was
5
It[a]t what point did an actionable cause for termination arise in
this case--upon notice of the termination or when termination
became effective?" [Emphasis added.] Martin, 803 P.2d at 1087.
This Court held that it was upon notice of termination because all
of the elements of her cause of action accrued at the time of
notice, and therefore, the Wrongful Discharge From Employment Act
was not applicable to her cause of action.
In Kitchen Krafters, Inc. v. Eastside Bank (1990), 242 Mont.
155, 789 P.2d 567, which is also a case based on the theory of
breach of the implied covenant of good faith and fair dealing, we
analyzed when an action commenced under § 27-2-102, MCA, by
stating:
(1) For purposes of statues relating to the
time within which an action must be commenced:
(a) a claim or cause of action accrues
when all elements of the claim or cause exist
or have occurred, the right to maintain an
action on the claim or cause is complete and a
court or other agency is authorized to accept
jurisdiction of the action.
(2) Unless otherwise provided by statute, the
period of limitation begins when the claim or
cause of action accrues. Lack of knowledge of
the claim of cause of [sic] action, or its
accrual, by the party to whom it has accrued
does not postpone the beginning of the period
of limitation.
As the language of this statute makes clear, the
statute of limitations does not begin to run until all
elements of a cause of action are in existence. For
example, in a negligence action the plaintiff must prove
four elements:
1) Existence of a duty
2) Breach of the duty
3) Causation
4) Damages.
. . . If these elements are not in existence, the
plaintiff could not successfully bring a cause of action
based upon negligence. Therefore, although one may be
able to establish the existence and breach of a duty, he
cannot successfully assert his cause of action until he
has sustained an injury .
. . .
[Citations omitted.]
Kitchen Krafters, 789 P.2d at 571.
Under the Wrongful Discharge From Employment Act, damages do
not occur until the employee is no longer earning compensation from
the employer, which under the Act is lost wages and fringe
benefits, and this can only occur upon a complete severance of the
employer-employee relationship.
In this instance, there was not a complete severance of the
employer-employee relationship. Respondent continued to work for
appellant for another two months, training another individual as a
ranch manager. He continued to earn his usual pay and benefits.
In addition, appellant signed a pension plan census report stating
that respondent's date of termination was October 1, 1988.
Respondent's cause of action would not accrue until he stopped
earning his salary and benefits. The Wrongful Discharge From
Employment Act grants that an employee may be "awarded lost wages
and fringe benefits for a period not to exceed 4 years from the
date of discharge . . . ." Section 39-2-905(1), MCA. Respondent
lost his wages and fringe benefits on October 1, 1988. We hold
that the District Court did not err in denying appellant's motion
for summary judgment and directed verdict.
We affirm.
Justice
We concur:
1 December 8, 1992
CERTIFICATE OF SERVICE
I
I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:
Michael P. Sand
Sand Law Offices
502 So. 19th Ave.
Bozeman. MT 59715
Richard A. Nellen and James A. McLean
Drysdale, McLean, Nellen & Nellen
1800 W. Koch, Ste 5
Bozeman, MT 59715
Edmund P. Sedivy, Jr. and David L. Weaver
Morrow, Sedivy & Bennett
P.O. Box 1168
Bozeman, MT 59771-1168
ED SMITH
CLERK OF THE SUPREME COURT