July 22 2008
DA 07-0529
IN THE SUPREME COURT OF THE STATE OF MONTANA
2008 MT 255
ALEX ZIER,
Plaintiff and Appellant,
v.
TOM HANCOCK, TOM VAN HOOSE, CBOB
FINANCIAL CORPORATION, k/n/a
BEARTOOTH BANK, JOHN DOE BOARD
OF DIRECTORS I-XVIII,
Defendants and Appellee.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and For the County of Yellowstone, Cause No. DV 06-209
Honorable Ingrid Gustafson, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Torger Oaas, Attorney at Law, Lewistown, Montana
For Appellee:
Mark D. Parker, Parker, Heitz & Cosgrove, Billings, Montana
Submitted on Briefs: June 18, 2008
Decided: July 22, 2008
Filed:
__________________________________________
Clerk
Justice Brian Morris delivered the Opinion of the Court.
¶1 Alex Zier (Zier) appeals from an order of the Thirteenth Judicial District, Yellowstone
County, granting summary judgment to Tom Hancock, Tom Van Hoose, and Beartooth Bank
(collectively “Beartooth”). We affirm.
¶2 Zier presents the following issue for review:
¶3 Whether the District Court properly determined that the Montana Wrongful Discharge
from Employment Act (WDEA) governed Zier’s claim.
PROCEDURAL AND FACTUAL BACKGROUND
¶4 Zier began talking with accountant Pat Davison in 2002 about collaborating to open a
new bank in Billings, Montana. Zier and Davison enlisted Beartooth’s support in this
endeavor. Zier entered into two nearly identical letter agreements with Beartooth. Zier
signed the first agreement on March 17, 2003, and signed the second agreement four months
later on July 1, 2003. Tom Hancock signed the March agreement on behalf of Beartooth,
and Pat Davison signed the July agreement on behalf of Beartooth.
¶5 The agreements provided that Zier would become the president of Beartooth Bank
upon the happening of two contingencies: (1) Beartooth obtaining a contingent charter from
the Division of Banking; and (2) Beartooth receiving approval from the FDIC. The letter
agreements also provided that Zier would receive a salary of $130,000 and benefits. The
letter agreements further provided that Zier would receive annual salary increases. The letter
agreements did not specify an end date.
¶6 Zier left his position as president of another bank and began working for Beartooth in
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March 2003 before either of the contingencies had been met. Zier assisted Beartooth in its
efforts to obtain the FDIC’s approval and the Division of Banking’s approval. He also
assisted Beartooth in attracting investors. Beartooth paid Zier the salary and benefits
provided by the agreements. Beartooth withheld taxes for Zier and Beartooth provided Zier
with W-2 tax forms. The Beartooth board of directors terminated Zier on January 17, 2005.
The directors also did not offer Zier the position of bank president as contemplated by the
letters of agreement. Beartooth had not yet obtained a charter from the Division of Banking
and had not yet received FDIC approval by the time of Zier’s termination.
¶7 Zier alleged that his termination constituted a material breach of Beartooth’s
contractual agreement to hire him as bank president as set forth in the letters of agreement.
Beartooth moved for summary judgment. Beartooth argued that Zier’s contract claim
actually represented a claim for wrongful discharge under the WDEA. Beartooth asserted
that the WDEA provided Zier’s exclusive remedy and prohibited Zier’s claim as Zier had
exceeded the one-year statute of limitations provided in the WDEA. Zier countered that
Beartooth never had hired him as bank president, and, therefore, could not discharge him.
Zier argued that the District Court instead should have applied the eight-year statute of
limitations for breach of a written agreement.
¶8 Zier had testified in a deposition, however, that he had been Beartooth’s employee
between March 2003 and January 2005. Zier testified that he had received an annual salary
of $130,000 and benefits, provided for under the letters of agreement, until January 2005.
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Zier testified that Beartooth had withheld taxes and had supplied him with W-2s. Zier also
testified that he understood that Beartooth had terminated his employment when Beartooth’s
directors informed him in January 2005 that they would not offer Zier a new contract. The
District Court relied upon this evidence to conclude that Zier had been an employee of
Beartooth pursuant to the letter agreements until his discharge.
¶9 The District Court determined that Zier’s claim for relief constituted a wrongful
discharge claim under the WDEA rather than a separate contract action. The WDEA’s one-
year statute of limitations required Zier to bring his claim within one year of the date of his
termination on January 17, 2005. Zier filed his complaint on February 27, 2006. The
District Court concluded that the WDEA’s statute of limitations barred his claims. Zier
appeals.
STANDARD OF REVIEW
¶10 We review de novo a district court’s decision to grant summary judgment. Prosser v.
Kennedy Enterprises, Inc., 2008 MT 87, ¶ 10, 342 Mont. 209, ¶ 10, 179 P.3d 1178, ¶ 10. We
use the same criteria applied by the district court under M. R. Civ. P. 56. Prosser, ¶ 10.
Summary judgment is appropriate when “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is
no genuine issue as to any material fact and that the moving party is entitled to a judgment as
a matter of law.” M. R. Civ. P. 56(c). We draw all reasonable inferences in favor of the
party opposing summary judgment. Prosser, ¶ 10.
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DISCUSSION
¶11 Whether the District Court properly determined that the WDEA governed Zier’s
claim.
¶12 Zier argues that the District Court improperly applied the WDEA to a claim that he
asserts arose only from the letters of agreement. Zier admits that he had performed services
for Beartooth before the letters of agreement were to go into effect. Zier also admits that he
thought he was an “employee” at the time of his termination. Zier argues nevertheless that
the effect of the letters of agreement should govern this issue. Zier maintains that, according
to the terms of the letters of agreement, Beartooth never had hired him as the conditions
upon which the letters of agreement were based had not occurred.
¶13 Zier cites Kneeland v. Luzenac America, Inc., 1998 MT 136, 289 Mont. 201, 961
P.2d 725, for support of his contention that the WDEA could not govern his claim because
Beartooth could not discharge him without first hiring him as bank president. Kneeland
determined that the WDEA applies only where the employee has been discharged. See
Kneeland, ¶ 27 (citing Beasley v. Semitool, Inc., 258 Mont. 258, 262, 853 P.2d 84, 86
(1993)). Zier also argues that his claim arises from a contract for hire similarly not covered
by the WDEA according to Kneeland’s determination that the WDEA does not bar claims
arising from contracts for rehire. See Kneeland, ¶¶ 28-30. Zier finally argues that the letters
of agreement constituted a written contract for a specific term. The WDEA excludes claims
arising from written employment contracts for a specific term. Basta v. Crago, Inc., 280
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Mont. 408, 412-13, 930 P.2d 78, 81 (1996) (citing § 39-2-912, MCA).
¶14 We decline to address the substance of Zier’s contractual claims, however, in light of
the fact that Zier misplaces reliance upon the effectiveness of the letters of agreement. This
Court long has recognized the rule that a plaintiff must allege and prove that a contingency
or condition precedent has been met where the right of recovery depends upon its happening.
Binzel v. Viehmann, 111 Mont. 6, 11, 106 P.2d 187, 189 (1940); J.M. Broat Lumber Co. v.
Van Houten, 66 Mont. 478, 480, 213 P. 1116, 1117 (1923). The Court also has determined
that “[a] party generally cannot be liable for a present breach for failure to perform under a
contract if that party’s obligation to perform is contingent on a condition precedent that has
yet to occur.” Eschenbacher v. Anderson, 2001 MT 206, ¶ 36, 306 Mont. 321, ¶ 36, 34 P.3d
87, ¶ 36 (citing Management, Inc. v. Mastersons, Inc., 189 Mont. 435, 440-41, 616 P.2d 356,
360 (1980)).
¶15 The letters of agreement expressly provided that they would not become effective
until the occurrence of two events. First, Beartooth had to obtain a contingent charter from
the Division of Banking. Second, Beartooth had to receive approval from the FDIC. Zier
acknowledges that neither of these conditions had occurred at the time that Zier filed his
complaint on February 24, 2006. Zier has not demonstrated why the District Court should
have determined that Beartooth faced potential liability for breach of the letters of the
agreement for failure to hire him as president when the conditions upon which the letters of
agreement were based had not yet occurred. Eschenbacher, ¶ 36. The District Court
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properly refused to consider Zier’s claim under a contract theory.
¶16 The WDEA provides the exclusive remedy for wrongful discharge. Section 39-2-902,
MCA. The WDEA also explicitly preempts all common law remedies. It provides that “‘no
claim for discharge may arise from tort or express or implied contract.’” Kulm v. Montana
State University-Bozeman, 285 Mont. 328, 331, 948 P.2d 243, 245 (1997) (quoting § 39-2-
913, MCA). The WDEA defines discharge as any 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 . . . .” Section 39-2-903(2), MCA. The WDEA
defines an employee as “a person who works for another for hire,” who is not an independent
contractor. Section 39-2-903(3), MCA.
¶17 The District Court determined that Zier qualified as an employee. He worked for
Beartooth for hire; he received a salary and benefits; and he received W-2s from Beartooth.
Section 39-2-903(3), MCA. Zier’s claim for relief arose from termination of his
employment with Beartooth. Zier alleged in his complaint that Beartooth wrongfully had
refused to hire Zier as bank president when it discharged him from employment on January
17, 2005. Several exceptions to the WDEA exist. These exceptions include claims where
the employee has not been discharged, Kneeland, ¶ 27 (citing Beasley, 258 Mont. at 262, 853
P.2d at 86), and where the claim arises from a written employment contract for a specific
term, Basta, 280 Mont. at 412-13, 930 P.2d at 81 (citing § 39-2-912, MCA). Zier has failed
to demonstrate that either of these exceptions applied to his claim. ¶¶ 14-15.
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¶18 The WDEA provided the exclusive remedy for Zier’s claim. Zier failed to file his
complaint within one year of the date of his discharge as required by § 39-2-911(1), MCA.
The District Court correctly granted Beartooth’s motion for summary judgment.
¶19 We affirm.
/S/ BRIAN MORRIS
We Concur:
/S/ KARLA M. GRAY
/S/ JOHN WARNER
/S/ W. WILLIAM LEAPHART
/S/ JIM RICE
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