No. 96-306
IN THE SUPREME COURT OF THE STATE OF MONTANA
1996
ADELINE EADUS,
Plaintiff and Appellant,
v.
WHEATLAND MEMORIAL
HOSPITAL & NURSING HOME,
Defendant and Respondent. 1.3(1\~
1
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APPEAL FROM: District Court of the Fourteenth Judicial District,
In and for the County of Wheatland,
The Honorable Roy C. Rodeghiero, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Craig W. Holt ; Holt Law Office, Billings, Montana
For Respondent:
James D. Walen; Stacey & Walen, Billings, Montana
Submitted on Briefs: October 24, 1996
Decided: November 14, 1996
Filed:
Justice Karla M. Gray delivered the Opinion of the Court.
Adeline Eadus (Eadus) appeals from the judgment entered on the
order of the Fourteenth Judicial District Court, Wheatland County,
granting Wheatland Memorial Hospital & Nursing Home's (Wheatland)
motion for summary judgment, and from the deemed denial of her Rule
59(g), M.R.Civ.P., motion to amend. We reverse.
The sole issue on appeal is whether the District Court erred
in granting Wheatland's motion for summary judgment on the basis
that Eadus' action was barred under § 39-2-911(2), MCA, because she
failed to exhaust internal grievance procedures prior to filing a
complaint.
Eadus began her employment with Wheatland in 1975. Diane
Jones (Jones), Wheatland's administrator, terminated Eadus'
employment on July 12, 1994. Eadus filed a complaint against
Wheatland in the District Court on March 13, 1995, alleging
wrongful discharge under Montana's Wrongful Discharge From
Employment Act (WDEA). Both parties conducted discovery and the
depositions of Eadus, Jones and Meridith Shelstead, Eadus'
supervisor at the time of the discharge, were taken. A pretrial
order was entered.
A jury trial on Eadus' complaint was scheduled for March 12,
1996. Prior thereto, Wheatland raised the issue of whether Eadus'
action was barred by § 39-2-911 , MCA, because Eadus failed to
(2)
exhaust its internal procedures regarding appeal of a discharge
from employment. Because Wheatland relied, in part, on Jones'
deposition testimony, the District Court converted the matter into
a motion for summary judgment and properly notified the parties of
its decision to do so. During a telephonic conference on the
motion, the parties agreed that no genuine issue of material fact
existed relating to 5 39-2-911,MCA. The parties also agreed that
the District Court properly could determine the summary judgment
motion on the legal issue of whether § 39-2-911(3),MCA, required
Wheatland to provide Eadus with a copy of its written internal
procedures regarding appeal of the discharge where it was
undisputed that Eadus had received a copy of those procedures in
1989.
The District Court subsequently entered its Memorandum and
Order determining that no genuine issue of material fact existed
and that Wheatland was entitled to judgment as a matter of law
because it had substantially complied with the requirements imposed
by § 39-2-911(3), MCA. The court relied primarily on Hoffman v.
Town Pump, Inc. (1992), 255 Mont. 415, 843 P.2d 756. Judgment was
entered dismissing Eadus' complaint and notice of entry of judgment
was served. Eadus filed a Rule 59(g), M.R.Civ.P., motion to amend
which subsequently was deemed denied by operation of law. Eadus
appeals.
Did the District Court err in granting Wheatland's motion
for summary judgment on the basis that Eadus' action was
,
barred under § 39-2-911(2) MCA, because she failed to
exhaust internal grievance procedures prior to filing a
complaint?
Summary judgment is proper when no genuine issues of material
fact exist and the moving party is entitled to judgment as a matter
of law. Rule 56(c), M.R.Civ.P. "Material issues of fact are
identified by looking to the substantive law governing the
proceeding." Matter of Estate of Lien (1995), 270 Mont. 295, 299,
892 P.2d 530, 532 (citation omitted). We review a district court's
grant or denial of a motion for summary judgment de novo, applying
the same Rule 56(c), M.R.Civ.P., criteria used by that court.
Johnson v. Nyhart (1995), 269 Mont. 379, 384, 889 P.2d 1170, 1173
(citations omitted)
Section 39-2-911(1), MCA, contains a one-year statute of
limitations for bringing a wrongful discharge action under the
WDEA. Section 39-2-911(2),MCA, provides that, where an employer
maintains written internal procedures for appealing a discharge,
the limitation period generally is tolled until those procedures
are exhausted.
Section 39-2-911,MCA, further provides, in pertinent part:
(2) If an employer maintains written internal
procedures . . . under which an employee may appeal a
discharge within the organizational structure of the
employer, the employee shall first exhaust those
procedures prior to filinq an action under this part.
The em~lovee's failure to initiate or exhaust available
internal procedures is a defense to an action brouqht
under this part. . . .
(3) If the employer maintains written internal
procedures under which an employee may appeal a discharge
within the organizational structure of the employer, the
employer shall within 7 davs of the date of the discharse
notifv the discharsed employee of the existence of such
procedures and shall supply the discharsed emplovee with
a copy of them. If the emplover fails to complv with
this subsection, the discharaed emplovee need not complv
with subsection (2L.
(Emphasis added.) Thus, the legislature has mandated in § 39-2-
911(2), MCA, that, where an employer has written internal
procedures pursuant to which a discharged employee may appeal a
discharge, the employee must exhaust those procedures prior to
filing a wrongful discharge complaint in the district court. The
penalty for an employee's failure to do so is severe; such a
failure "is a defense to an action brought under [the WDEA] .
Section 39-2-911(2), MCA.
Tn order to facilitate the use of such procedures, however,
and to ensure that an employee is not required to exhaust
procedures of which he or she may be unaware or to which he or she
does not have access, the legislature placed corresponding
obligations on an employer which has such written internal
procedures. Pursuant to § 39-2-911(3), MCA, the employer having
written internal procedures must--within seven days of the
discharge--notify the employee of the existence of such procedures
and supply the discharged employee with a copy of them.
Applying the "material facts" standard from Estate of Lien to
the terms of the statute at issue here, it is clear that the first
two facts material to the availability of the employer defense
contained in § 39-2-911(2), MCA, are whether the employer has
written internal procedures for appealing a discharge and whether
the discharged employee utilized those procedures. These facts are
undisputed in this case. Wheatland has such internal procedures
and Eadus neither initiated nor exhausted those procedures. As a
result, Wheatland was entitled to summary judgment pursuant to the
defense contained in § 39-2-911(2), MCA, provided it met the
requirements of § 39-2-911(3), MCA.
The facts material to § 39-2-911(3),MCA, are whether, within
seven days of the date of the discharge, the employer notified the
employee of the existence of the internal procedures and supplied
a copy of the procedures to the employee. Here, it is undisputed
that Jones notified Eadus of the existence of the internal
procedures at the time she discharged Eadus. It also is undisputed
that Jones did not supply a copy of those procedures to Eadus at
that time or within seven days of the discharge. Therefore, it is
clear that Wheatland did not meet the second requirement contained
in § 39-2-911(3),MCA.
Section 39-2-911(3), MCA, expressly provides that, if the
employer fails to comply with the two requirements therein, the
discharged employee need not comply with the exhaustion of internal
procedures requirement set forth in § 39-2-911(2),MCA. Applying
the plain language of the statute here, Eadus was not required to
exhaust Wheatland's internal procedures and, as a result, Wheatland
was not entitled to judgment as a matter of law based on Eadus'
failure to do so.
Wheatland argues, however, that it was not required to give
Eadus another copy of the internal procedures because she had
received a copy in 1989. It relies, as did the District Court, on
Hoffman. Hoffman is inapplicable here.
In Hoffman, the employee resigned effective August 24, 1989,
and filed a wrongful discharge action, based on constructive
discharge, against his former employer the same day. At the close
of the employee's case in chief at trial, the district court
granted the employer's motion for a directed verdict on the basis
that the employee had not initiated or exhausted internal grievance
procedures prior to bringing suit. Hoffman, 843 P.2d at 757-58.
The employee contended on appeal that, because the employer
did not notify him of the existence of the grievance procedures or
supply a copy of those procedures within seven days, as required by
5 39-2-911(3),MCA, he was not required to initiate or exhaust the
procedures. The employer contended, as Wheatland does here, that
the employee previously had received a copy of the procedures;
indeed, in Hoffman, the employee had utilized them during an
earlier dispute. Thus, according to the employer, the employee had
constructive notice of the procedures and was required to comply
with them. Since he did not, the employer argued that 5 39-2-
911(2), MCA, provided it with a defense to the employee's
constructive discharge action. Hoffman, 843 P.2d at 758.
Under the circumstances before us, we declined to address the
statutory arguments advanced by the parties. Hoffman, 843 P.2d at
758. Instead, we focused on the unique fact that the employee had
filed his complaint on the same day he terminated his employment by
resigning, thereby effectively precluding the employer from
complying with its obligations under § 39-2-911(3),MCA. Hoffman,
843 P.2d at 758. Under that circumstance, we observed that " [ilt
would have been impossible for [the employer] to notify [the
employee] of the written procedures within seven days of the
discharge prior to the commencement of the action." Hoffman, 843
P.2d at 758. On that basis, we concluded that the employee's
immediate filing of a complaint alleging constructive discharge
rendered the employer unable to comply with § 39-2-911(3),MCA, and
did not excuse the employee's § 39-2-911(2), MCA, obligation to
exhaust the available internal grievance procedures. Hoffman, 843
P.2d at 759.
Hoffman does not support Wheatland's position here that Eadus'
1989 receipt of its internal grievance procedures was sufficient to
constitute compliance with its obligation under § 39-2-911(3),MCA,
to provide a copy of such procedures within seven days of the
discharge. In Hoffman, we specifically declined to address the
"constructive notice" argument advanced by the employer as an
alternative to actual compliance with § 39-2-911(3), MCA.
Moreover, Hoffman is distinguishable on the dispositive fact upon
which we premised our decision--namely,the employee's filing of a
wrongful discharge complaint on the very day his resignation based
on an alleged constructive discharge occurred. That fact is not
present here, where Eadus was discharged on July 12, 1994, and
filed her complaint in March of 1995.
Section 39-2-911,MCA, establishes a auid pro auo under which
an employee's failure to exhaust written internal grievance
procedures constitutes a defense against the action, but only when
the employer has met its precedent obligations to notify the
discharged employee of the internal procedures and to provide a
copy of those procedures within seven days of the discharge.
Allowing an employer to rely on "constructive notice" or
"substantial compliance" with the requirements of § 39-2-911(3),
MCA, would unbalance the statutory auid pro auo.
We conclude, therefore, that the requirements contained in
,
5 39-2-911(3) MCA, must be met before an employer can avail itself
of the defense set forth in § 39-2-911(2), MCA. We further
conclude that Wheatland's failure to comply with the second
obligation imposed on it by 5 39-2-911(3), MCA, precluded its
reliance on the "employee's failure to exhaust" defense contained
in 5 39-2-911 , MCA. We hold, therefore, that the District Court
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erred in concluding that Wheatland was entitled to judgment as a
matter of law under 5 39-2-911(2),MCA, and in granting its motion
for summary judgment on that basis
Reversed and remanded. h
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We concur: