NO. 96-032
IN THE SUPREMECOURT OF THE STATE OF MONTANA
1996
320~~s ARTHUR (ART) CLARK,
Plaintiff, Appellant and
Cross-Respondent,
v. li.;/ ++Jlj,tii!i
~:~~~~~~~~~~~~~~~~~~
EAGLE SYSTEMS, INC.; JOHN T. ACKERMAN;
RICHARD B. SCHWEITZER; and RANDAL M. SUNDQUIST,
Defendants, Respondents and
Cross-Appellants.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable G. Todd Baugh, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
K. D. Peterson; Peterson & Schofield,
Billings, Montana.
For Respondents:
Steven J. Lehman; Crowley, Haughey, Hanson,
Toole & Dietrich, Billings, Montana
Submitted on Briefs: July 25, 1996
Decided: November 20, 1996
Filed:
Justice W. William Leaphart delivered the Opinion of the Court.
Thomas Arthur Clark (Clark) appeals from the order of the
Thirteenth Judicial District Court, Yellowstone County, granting
Eagle Systems' (Eagle) motion for summary judgment, concluding that
the Wrongful Discharge From Employment Act (the Act) applied and
that Clark was terminated for good cause, that Clark failed to
state a prima facie case under the Age Discrimination in Employment
Act, that Clark could not prevail on his tortious interference with
contracts claim, and that the Act is the exclusive remedy and
precludes Clark's claim for negligent or intentional infliction of
emotional distress. Eagle cross-appeals from the District Court's
conclusion that the Act applies to Clark's demotion absent a
cessation in employment. We affirm.
We address the following issues on appeal:
1. Did the District Court err in concluding that the
Wrongful Discharge from Employment Act applies to demotions that do
not result in a cessation of employment?
2. Did the District Court err in granting Eagle's motion for
summary judgment on the issue of Clark's claim under the Age
Discrimination in Employment Act?
3. Did the District Court err in granting summary judgment
in favor of the individually-named defendants on Clark's claim of
tortious interference and negligent or intentional infliction of
emotional distress?
Clark was employed with Eagle as the terminal manager in
Billings, Montana. Eagle contracted with Burlington Northern
Railroad (BN) to provide ramp, drayage, and mechanical services for
BN at the Billings terminal. In addition, Eagle is responsible for
loading and unloading trains in a timely manner.
Clark had been employed in the transportation field since 1955
2
and had served in a variety of positions for previous contractors
providing services to the railroad. Clark was hired by Eagle in
May of 1985 and continued to serve as terminal manager in Billings
until November 21, 1991. On that date, Clark met with Dick
Schweitzer (Schweitzer), who was Clark's supervisor, and Schweitzer
notified Clark that he was being replaced the next day as terminal
manager and was being demoted to the position of utility person.
Eagle maintains that Clark was difficult to work with and verbally
abusive to both customers and co-workers. Randal Sundquist
(Sundquist), who was Clark's subordinate and worked as shop and
maintenance supervisor, reported his problems with Clark directly
to Schweitzer in the months before Clark's demotion. Several other
employees at the Billings terminal stated that they had
difficulties with Clark's "paranoia" and harsh discipline.
In May of 1992, Clark filed a complaint with the Montana Human
Rights Commission (HRC) alleging that he had been discriminated
against based on his age. Eagle removed the case to federal court
and, in November of 1993, Clark amended the complaint alleging a
cause of action for tortious interference with contract and joining
John Ackerman, BN's intermodal hub center manager, Sundquist and
Schweitzer as individual defendants. Due to the addition of the
Montana defendants, the federal court lost diversity jurisdiction
and the matter was remanded to state district court in March of
1994.
On March 31, 1994, the HRC issued a right to sue letter.
Accordingly, Clark again amended his complaint alleging a cause of
action for age discrimination against Eagle. On October 25, 1995,
3
the District Court granted summary judgment to defendants on all
issues. Clark appeals from the grant of summary judgment in favor
of the defendants and Eagle cross-appeals from the court's
determination that the Act applies absent a cessation in
employment.
Standard of Review
Our standard in reviewing a district court's grant of a motion
for summary judgment is de nova. Heiat v. Eastern Montana College
(1996), 275 Mont. 322, 327, 912 P.2d 787, 790 (citing Minnie v.
City of Roundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214).
That is, we review an order of summary judgment using the same
criteria as the district court; we are guided by Rule 56,
M.R.Civ.P. Chilbery v. Rose (1995), 273 Mont. 414, 416, 903 P.2d
1377, 1378. Thus, we determine whether a genuine issue of material
fact exists and whether the moving party is entitled to judgment as
a matter of law. Heiat, 912 P.2d at 791 (citing Minnie, 849 P.2d
at 214). Summary judgment is an extreme remedy and should never be
substituted for a trial if a material fact controversy exists.
Heiat, 912 P.2d at 791 (citing Howard v. Conlin Furniture No. 2,
Inc. (1995), 272 Mont. 433, 436, 901 P.2d 116, 118-19).
A party seeking summary judgment has the burden of
establishing a complete absence of any genuine factual issue.
Howard, 901 P.2d at 118. In light of the pleadings and the
evidence before the district court, there must be no material issue
of fact remaining which would entitle a non-moving party to
recover. Howard, 901 P.2d at 118. Once the moving party has met
its burden, the party opposing the summary judgment motion must
4
present material and substantial evidence, rather than conclusory
or speculative statements, to raise a genuine issue of material
fact. Howard, 901 P.2d at 119. In addition, all reasonable
inferences that might be drawn from the offered evidence should be
drawn in favor of the party who opposed summary judgment. Howard,
901 P.2d at 119 (citing Cereck v. Albertson's, Inc. (1981), 195
Mont. 409, 411, 637 P.2d 509, 511).
1. Did the District Court err in concluding that the
Wrongful Discharge from Employment Act applies to demotions that do
not result in a cessation of employment?
Relying on this Court's recent opinion in Howard, the District
Court stated that "the case at bar involves neither a lateral
transfer nor a minor change in job description. Plaintiff was also
absolutely and finally terminated from his managerial position
despite the offer of another, inferior, position." The court
concluded that "a jury might conclude that plaintiff's demotion
qualified as a discharge within the meaning of the Act." Having
determined that the Act did apply, the court went on to conclude
that there was good cause for Clark's reclassification and granted
Eagle's motion for summary judgment on that basis. In reviewing a
district court's conclusions of law, we determine whether the
court's interpretation of the law is correct. Stratemeyer v.
Lincoln County (Mont. 1996), 915 P.2d 175, 177, 53 St.Rep. 245, 246
(citing Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470,
414-75, 803 P.2d 601, 603-04).
Application of the Act hinges on the existence of a
"discharge" or a "constructive discharge." Section 39-2-903, MCA,
5
defines the terms "discharge" and "constructive discharge" as
follows :
(1) "Constructive discharge" means the voluntary
termination of employment by an employee because of a
situation created by an act or omission of the employer
which an objective, reasonable person would find so
intolerable that voluntary termination is the only
reasonable alternative. Constructive discharge does not
mean voluntary termination because of an employer's
refusal to promote the employee or improve wages,
responsibilities, or other terms and conditions of
employment.
(2) "Discharge" includes a constructive discharge
as definedin 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.]
As § 39-2-903, MCA, makes clear, "discharge" includes "constructive
discharge" and "any other termination of employment.tl
In Howard, the plaintiff was terminated from his position as
store manager and subsequently offered a position as a sales person
at a salary of 75 percent less than his previous salary; Howard did
not accept the inferior position. Howard, 901 P.Zd at 118. In the
instant case, however, Clark was replaced as the terminal manager
and immediately reassigned and reclassified as a utility person.
Unlike Howard, the record does not reflect whether there was a
substantial change in salary or benefits. Clark reported for work
the following morning as a utility person and there was no
cessation of employment.
In the instant case, Clark does not allege that he was
constructively discharged. Furthermore, there has not been a
termination of employment within the meaning of the Act. While the
District Court correctly stated the rule we recently announced in
6
Howard--that an absolute and final termination from a managerial
position followed by the offer of an inferior position may be a
termination of employment for purposes of the Act--that rule is
inapplicable in the instant case. Here, Clark was never terminated
from his employment with Eagle nor did he resign. In fact, he
reported to work the following morning and worked as a utility
person until several months later when he became disabled and was
no longer able to perform his duties.
Section 39-2-904, MCA, requires that there must be a
termination of employment before the Act applies. In determining
when the statute of limitations begins to run under the Act, this
Court stated that termination of employment 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."' Allison
v. Jumping Horse Ranch (1992), 255 Mont. 410, 412-13, 843 P.2d 753,
755 (quoting Edwards v. Equitable Life Assurance Sot. (Ky. 1944),
177 S.W.2d 574, 577). Further, in Allison, we recognized that
"[ulnder [the 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."
Allison, 843 P.2d at 756.
In the instant case, there has been no termination--no
"complete severance" of the employment relationship. Unlike
Howard, there has been no cessation of employment followed by an
offer of an inferior position. Under § 39-2-904, MCA, the Act is
inapplicable because there was no termination of Clark's employment
7
relationship. Accordingly, we hold that the District Court was
incorrect in concluding that Clark's demotion qualified as a
discharge under the meaning of the Act.
Although the District Court granted summary judgment for the
wrong reasons, it reached the correct result. We affirm district
court decisions which are correct regardless of the court's
reasoning in reaching the decision. Phillips v. City of Billings
(1988), 233 Mont. 249, 252, 158 P.2d 772, 774. Thus, for the
reasons set forth above, we affirm the summary judgment for Eagle
on Clark's claim for damages under the Wrongful Discharge from
Employment Act.
2. Did the District Court err in granting Eagle's motion for
summary judgment on the issue of Clark's claim under the Age
Discrimination in Employment Act?
In Heiat, 912 P.2d at 793, we announced the standard for
analyzing summary judgment motions in the employment discrimination
context stating that
[tlhe plaintiff must allege a prima facie case of
discrimination in her complaint. In this context, the
plaintiff alleges a prima facie case by asserting that
plaintiff is a member of a protected class, and that a
male colleague with the same credentials, who performs
substantially the same work, receives a higher salary.
The employer seeking summary judgment must then come
forward with a legitimate nondiscriminatory reason for
the disparity. If the employer comes forward with a
legitimate nondiscriminatory reason, the plaintiff must
then, in addition to having alleged a prima facie case in
the complaint, produce evidence that establishes her
prima facie case as well as evidence which raises an
inference that the employer's proffered reason is
pretextual.
Here, Clark alleged a prima facie case of age discrimination:
(1) that he is in a protected age group; (2) that he performed his
8
job in a satisfactory manner; (3) that he was discharged; and (4)
that he was replaced by a substantially younger worker. See Tonack
v. Montana Bank of Billings (1993), 258 Mont. 247, 854 P.2d 326.
Eagle filed a motion for summary judgment on the basis that the
record was devoid of any facts showing age to be a factor in
Clark's reclassification. Eagle satisfied its burden in moving for
summary judgment by presenting a legitimate nondiscriminatory
reason for Clark's demotion; that is, he had failed to
satisfactorily perform his job duties.
Under Heiat
-, the burden was on Clark to respond to Eagle's
motion for summary judgment by, in addition to having alleged a
prima facie case, producing evidence supporting his prima facie
case as well as producing evidence raising an inference that the
employer's proffered reason was pretextual. Clark failed to meet
this burden. He was unable to produce evidence supporting his
prima facie case or evidence raising an inference that Eagle's
proffered reason (failure to satisfactorily perform) was
pretextual.
Although Clark is in a protected age group, he fails to
satisfy the additional elements of the prima facie case. As to the
second element, there are affidavits and depositions from Clark's
supervisors and Eagle employees that he was not performing his job
satisfactorily. As to the third element, we have previously
determined that Clark was not discharged. Finally, Clark was
initially replaced by a 51-year-old man, not a substantially
younger worker. Although Clark asserts that his prior management
position was eventually filled by a substantially younger worker,
9
he makes no more than conclusory statements to support his
allegation that Sundquist's eventual promotion to terminal manager
was in any way related to Clark's age. Clark has not presented
material and substantial evidence, rather, he has made conclusory
or speculative statements. These conclusory and speculative
statements do not create a genuine issue of material fact which
would preclude the grant of summary judgment. Howard, 901 P.2d at
119.
3. Did the District Court err in granting summary judgment
in favor of the individually-named defendants on Clark's claim of
tortious interference and negligent or intentional infliction of
emotional distress?
In light of our holding that the Act does not apply to a
demotion as opposed to a termination, the District Court erred in
ruling that Clark's claims for tortious interference and emotional
distress were preempted by the Act. Nonetheless, since we have
affirmed the District Court's grant of summary judgment on the age
discrimination claim, based on Eagle's unrebutted showing that
Clark's demotion was attributable to unsatisfactory job
performance, logic and consistency dictate that we affirm the
summary judgment as to Clark's remaining claims. It would be
inconsistent for Clark to attribute blame for his demotion to the
individually-named defendants. Accordingly, in keeping with the
ruling holding that Clark was responsible for his own demotion,
Clark has no claim against the individually-named defendants for
infliction of emotional distress or tortious interference with
contract. As we stated earlier in the context of the first issue,
we affirm district court decisions which are correct regardless of
10
the district court's reasoning in reaching its decision. Phillizls,
758 P.2d at 774. Although the District Court granted summary
judgment on tortious interference and emotional distress for the
wrong reasons, the result was correct and is, therefore, affirmed.
Affirmed
We concur:
Justices
11
Justice Terry N. Trieweiler dissenting.
I concur with the majority's conclusion that the plaintiff did
not present substantial evidence that he was discharged from his
position as terminal manager because of his age, and that,
therefore, the District Court correctly dismissed his claim of age
discrimination by summary judgment.
I dissent from the majority's conclusion that Thomas Clark was
not terminated from employment, and therefore, had no claim
pursuant to Montana's Wrongful Discharge From Employment Act (WDEA)
found at §§ 39-Z-901 to -915, MCA. Clark was permanently
terminated from his position as terminal manager at his employer's
Billings facility. He was then offered a totally different job
that he had never performed before as a utility person at
substantially reduced pay. (When the majority states that "the
record does not reflect whether there was a substantial change in
salary, " they ignore Clark's affidavit.) The mere fact that he
took the inferior position simply means that he did everything he
could to mitigate his damages. It does not change the fact that he
was irreversibly terminated from his employment as the defendant's
terminal manager.
This case is indistinguishable in any practical respect from
Howardv. Conlin FurnitureNo. 2, Inc. (1995), 212 Mont. 433, 901 P.2d 116.
Therefore, I conclude that the application of the WDEA is mandated
by that decision, the District Court correctly concluded that it
was applicable, and the majority has erred by trying to distinguish
12
this case based on irrelevant factors which make no practical
difference.
1n Howard, the plaintiff was hired as the defendant's store
manager in 1990 at an annual salary of $50,000 plus a commission,
and was terminated from that position in 1993. Howard, 272 Mont.
at 435-36, 901 P.2d at 118. At the time of his termination from
his managerial position, the plaintiff, like Clark, was offered an
inferior position in the same store. He was offered a sales
position at a salary of $1000 per month plus a commission
opportunity. Howard, 272 Mont. at 435-36, 901 P.2d at 118. The
District Court dismissed the plaintiff's complaint in Howard and we
reversed.
On appeal, the employer in Howard argued, as the employer in
this case argues, that the District Court should be affirmed
because the plaintiff had not been discharged from employment, but
only demoted. Howard, 272 Mont. at 437, 901 P.2d at 119. We set
forth the issue on appeal as follows: "The first sub-issue we must
decide is whether Howard was discharged, or merely demoted,
following which he resigned." Howard, 272 Mont. at 438, 901 P.2d
at 119.
We held that the following facts were significant to our
conclusion that the plaintiff had in fact been discharged from his
position as store manager:
This case does not involve a lateral transfer, nor
a minor change in job description. This case involves
absolute and final termination from a managerial
13
position, followed by an offer of employment in a
functionally different, and substantially inferior,
position with the same employer. To hold, as Conlin
suggests, that termination of employment in a position
that pays over $50,000 per year, and subsequently
offering a position which pays less than 25 percent of
that amount, is not "a termination of employment" would
ignore the plain language of the Act and allow
circumvention of the Act's damage provisions which are
based on wages at the time of termination. Section
39-L-905, MCA.
Howard was informed that he was being terminated as
Conlin's manager. He was then offered a subordinate
position among the sales staff he previously managed.
His refusal to accept an offer of a lesser position, at
best, affects his duty to mitigate his damages. We
conclude that when Howard was terminated from his
managerial position, he was discharged from employment
within the meaning of § 39-2-903(2), MCA, of Montana's
Wrongful Discharge From Employment Act.
Howard, 272 Mont. at 438, 901 P.2d at 119-20.
There are only two distinctions among the facts in the Howard
case and those in this case: (1) Clark accepted the inferior
position, whereas Howard rejected it; and (2) we knew what the
difference in pay was for Howard, while all we know from Clark's
affidavit is that his pay was substantially reduced following his
termination as terminal manager. However, as we noted in Howard,
the fact that the employee did or did not take the inferior
position simply relates to the issue of mitigation of damages, and
whether we know the actual dollar amount by which pay has been
reduced, or simply know that pay has been substantially reduced, is
a distinction that makes no practical difference.
The majority cites Allison v. JumpingHorseRanch, Inc. (1992), 255 Mont.
410, 412-13, 843 P.2d 753, 755, for the proposition that a
14
discharge requires "a complete severance of the relationship of
employer and employee by positive act on the part of either or
both." However, Allison is inapplicable to the facts in this case.
It dealt only with the issue of when the statute of limitations
began to run, based on the facts in that case. That case did not
involve the termination by the employer of one form of employment
and a subsequent offer of substantially inferior employment.
Therefore, the majority's reliance on Allison is misplaced. Howard,
on the other hand, is directly on point and factually
indistinguishable.
The inference from the majority's decision is that, had Clark
turned down the inferior position of utility person, he could have
made a claim for constructive discharge pursuant to the WDEA and
our decision in Howard. However, that suggestion also ignores that
plain language of our decision in Howard. That decision was not
based on our conclusion that by offering the plaintiff an inferior
position he was constructively discharged. It was based on our
conclusion that when he was finally terminated as store manager, he
WZlS "discharged from employment within the meaning of
5 39-2-903 (Z), MCA, of Montana's Wrongful Discharge From Employment
Act." Howard, 272 Mont. at 438, 901 P.2d at 120.
For these reasons, I conclude that Clark has stated a claim
for wrongful discharge pursuant to Montana's Wrongful Discharge
From Employment Act, and that the District Court erred when it
dismissed that claim by summary judgment. I therefore dissent from
15
that part of the majority opinion which affirms the District
Court's dismissal.
Because I conclude that Clark's termination from employment
was covered by the Wrongful Discharge From Employment Act, I
specially concur with that part of the majority opinion which
affirms the District Court's dismissal of Clark's claims for
tortious interference and negligent or intentional infliction of
emotional distress. For those employees covered by the Wrongful
Discharge From Employment Act, common law remedies are preempted
pursuant to § 39-2-913, MCA, and pursuant to 5 39-2-905(3), MCA,
there is no right to recover damages for emotional distress.
/ us ice
Justice William E. Hunt, Sr., joins in the foregoing dissenting
opinion.
16
November 20, 1996
CERTIFICATE OF SERVICE
I hereby certify that the following certified order was sent by United States mail, prepaid,
to the following named:
Steven J. Lehman
Crowley, Haughey, Hanson, Toole & Dietrich
Box 2529
Billings MT 59103-2529
K. D. Peterson, Esq.
Peterson and Schofield
2906 Third Avenue North
Billings MT 59102
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA
BY:
Deputy