Owens v. Parker Drilling Co.

No. 53-172
IN THE SUPREME COURT OF THE STATE OF MONTANA

1983

WILLIAM OWENS,
Plaintiff and Appellant,
-vs-
PARKER DRILLING CO.,
Defendant and Respondent.

APPEAL FROM: District Court of the Seventh Judicial District,
In and for the County Richland,
The Honorable , Judge presiding.

COUNSEL OF RECORD:

For Appellant:
Lucas & Monaghan; Thomas M. Monaghan argued,
Miles City, Montana

For Respondent :
Habedank, Cumming & Best; Jacque W. Best argued,
Sidney, Montana

Submitted: November 3, 1983

Decided: January 12, 1984

Filed: QWf\li;? 1984

P

-. & &, c$L2&&-.d
a Clerk
 Mr. Justice Frank B. Morrison, Jr. delivered the Opinion
of the Court.
Plaintiff William Owens (Owens) appeals the order of the
District Court, Richland County, granting partial summary
judgment on the issue of punitive damages in an action
alleging discriminatory firing of Owens by defendant Parker
Drilling Company (Parker).
Owens is missing his right arm from three inches below
the elbow. He lost that part of his arm when he was six
years old. Owens has worked as a "roughneck" and drill.
"hand" since 1958 or 1959.
Owens worked for Parker from April 4, 1978 through April
8, 1978. He was discharged from Parker by Roger Hystad at
the direction of his supervisors for the given reason that he
only had one arm. No investigation was made to determine the
ability of Owens to safely and satisfactorily complete all
duties of his employment. The decision to fire was
apparently made on the basis that a one-armed worker is
unsafe per se on a drilling operation.
Parker has a safety manual setting forth minimum
physical requirements for employees prohibiting employment of
persons with "severe disabilities or impairments to arms,
hands, fingers, legs, feet and toes."
Owens was out of work for approximately three days, and
then was hired on by another drilling company. There is
considerable evidence that Owens has at all times been an
able and safe worker on the drilling rigs both before and
after his employment with Parker.
Owens brought this action seeking compensatory damages
for unlawful discharge in violation of sections 49-4-101 and
102, MCA. He also seeks punitive damages for "wrongful,
willful, intentional, malicj.ous, and reckless act of
Defendant in firing Plaintiff."
Parker moved for partial summary judgment on the issue
of punitive damages. The District Court granted the motion,
ruling that plaintiff had failed to establish a genuine
factual issue as to whether the vi-olation of statute was
criminal or wanton, or whether the acts of defendant were
done with sufficiently culpable mental state to justify award
of punitive damages under section 27-1-221, MCA.
The following issues are raised on appeal:
1. Is plaintiff entitled to a trial on the question of
punitive damages where he has established a genuine factual
issue of whether his discharge constituted unlawful
discrimination as defined in sections 49-4-101, 102, MCA?
2. Has plaintiff produced sufficient evidence to
establish a genuine factual issue of whether defendant acted
with "oppression, fraud or malice, actual or presumed,"
entitling him to a recovery of punitive damages?
Owens argues that breach of the statutory duty imposed
by sections 49-4-101, 102, MCA is so culpable, that such a
breach necessarily raises a genuine issue of punitive
damages. We disagree.
The mere fact that the conduct on which the lawsuit is
based is unlawful should not in and of itself authorize a
recovery of punitive damages. Fahrenberg v. Tengel (li
Frs .
1980), 291 N.W.2d 516; Graham v. Turner (Tex. 1971), 472
S.W. 2d 831, 839; Graham v. Clarks Fork National Bank (Mont.
1981), 631 P.2d 718, 721, 38 St.Rep. 1140, 1143-44. Luther
v. Lee (1922), 62 Mont. 174, 179, 204 P. 365, 367. For
example, exceeding the 55 m.p.h. speed limit is unlawful and
may even be intended, but does not rise to the level of
culpability warranting punitive damages unless there is a
high degree of probability that serious harm wil.1 result.
Section 27-1-221, MCA provides for punitive awards in
cases of "actual" malice and "presumed" malice. Thus, where
a statute specifically proscribes conduct which is actually
mal.icious such as theft or a.ssault, punitive damages may be
sought for violation of such a statute. Violation of other
statutes warrants an issue of punitive damages only where
malice may be presumed from the particular facts.
Consideration of recent decisions of this Court will
demonstrate when malice may be presumed from violation of
statute.
In First Security Bank v. Goddard (1-979),181 Mont. 407,
422, 593 P.2d 1040, 1048-1049, we held that malice could be
implied, where the defendant insurance company breached its
duty to settle as soon as possible with its insured in
violation of the insurance code, because the defendant
engaged in a course of conduct "knowing it to be harmful and
unlawful," and its actions were "unjustifiable." Acc.
Ramsbacher v. Hohman (1927), 80 Mont. 480, 487-488, 261 P.
273, 276. Again in Dvorak v. Huntley Project Irrig. Dist.
(1981), 196 Mont. 167, 639 P.2d 62, an intentional failure to
provide water to the rightful claimant in violation of
statute was held to support an award of punitive damages
because the conduct of the defendant was "unjustifiable".
Another discussion of the concept of malice-in-law is
found in Butcher v. Petranek (1979), 181 Blont. 358, 593 P.2d
743. In that case we approved a "recklessness" standard for
presumed malice.
"The jury may also take into account whether the
acts complained of are 'of such a character as to
indicate a reckless disregard of the rights of the
plaintiff' in awarding a 'reasonable amount' of
 punitive damages. Mosback v. Smith Brothers Sheep
Co. (1922), 65 Mont. 42, 46-47, 210 P. 910, 912.
"Elaborating further on the concept of malice, we
stated in 1927 tha.t:

" ...'The term "malice," as applied to torts,
does not necessarily mean that which must proceed
from a spiteful, malignant or revengeful
disposition but a conduct injurious to another,
though proceeding from an ill-regulated mind, not
sufficiently cautious before it occasions an injury
to another.. ..
I " Ramsbacher v. Hohman (1927), 80
Mont. 480, 487-88, 261 P. 273, 276. Id. at 362.

This recklessness standard is the same punitive damages
standard used by this Court in evaluating conduct of
defendants which was not specifically proscribed by statute.
See e.g. Graham v. Clarks Fork National Rank (Mont. 1981),
631 P.2d 718, 721, 38 St.Rep. 1140, 1144, "recklessness";
Shahrokhfar v. State Farm (Mont. 1981), 634 P.2d 653, 657, 38
St.Rep. 1669, 1673, "recklessly"; Derenberger v. Lutey,
(Mont. 1983) , P.2d , 40 St.Rep. 902, 907, "willful
or wanton misconduct"; Ferguson v. Town Pump, Inc. (1978),
177 Mont. 122, 132, 580 P.2d 915, 921, "willful disregard of
duty"; and Cashin v. Northern Pac. Ry. CO. (1934) I 96 Monte

92, 112, 28 P.2d 862, 870, "willful or wanton disregard of
the rights of others."
The use of words like "unjustifiable" and "reckless"
represent attempts of this Court to describe that level of
conduct, whether specifically proscribed by statute or not,
which is so culpable as to warrant an award of punitive
damages.
Much confusion has been generated by inconsistent use of
loosely defined terms such as willfulness, wantonness,
recklessness, gross negligence, and unjustifiable conduct.
To avoid future confusion it is necessary to adopt a
carefully defined standard of conduct and prescribe its legal
significance. We adopt this standard for presumed malice:
When a person knows or has reason to know of facts which
create a high degree of risk of harm to the substantial
interests of another, and either deliberately proceeds to act
in conscious disregard of or indifference to that risk, or
recklessly proceeds in unreasonable disregard of or
indifference to that risk, his conduct meets the standard of
willful, wanton, and/or reckless to which the 1a.w of this
State will allow imposition of punitive damaqes on the basis
of presumed malice.
This standard is more definitive and perhaps more
stringent than those of the past. Certainly the "unjustified
conduct" measure was extremely broad and difficult to apply.
We also emphasize that substantial interests must be
implicated so that an intentional or reckless disregard of
duties that do not protect substamtial interests, does not
give rise to punitive damages. The standard, in substance,
is supported by Restatement of the Law, Torts 2d. 5500,
comment a.
The standard is equally applicable to statutory
violations and other wrongful conduct. Thus, where a statute
is designed to protect the substantial interests of a person
from a high degree of risk, and the statute is violated
either intentionally or recklessly, a jury question of
punitive damages is raised. Punitive damages may also he
awarded under sections 27-1-221, MCA for fraud or oppression.
This holding only defines a standard for "presumed malice. l1
The present case involves a determination of whether the
statute, section 49-4-101, MCA was designed to protect the
substantial rights of employees such as Owens from a high
risk of harm, and whether Parker's alleged violation of the
statute was reckless.
The Discrimination in Employment Statutes, sections
49-4-101, 102, MCA, are enacted to protect the handicapped
person's substantial right to be fairly treated in the
employment relationship.
Section 49-4-101, MCA, provides as follows:
"Discrimination prohibited. It is unlawful to
discriminate, in hiring or employment, against a
person because of the physical handicap of such
person. There is no discrimination where the
nature or extent of the handicap reasonably
precludes the performance of the particular
employment or where the particular employment may
subject the handicapped or his fellow employees to
physical harm."
Section 49-4-102, MCA, provides as follows:
"Penalty - civil remedy. A person who practices
and -
discrimnation in violation of 49-4-101 commits a
misdemeanor and is also liable in a district court
action for civil damages and a-ttorney's fees by the
person discriminated against. Should the person
who allegedly practiced discrimination prevail in
the civil action, he shall he entitled to recover
reasonable attorney's fees from the person who
alleged the discrimnation."
These statutes were specifically designed to protect
handicapped persons from the denial of a substantial right to
fair treatment in the employment relationship; such denial
would result in economic harm to such persons and their
fa.milies, as well as damage to their sense of self esteem.
Violation of this statute warrants a claim for punitive
damages if such violation is shown to be intentional or
reckless. Therefore, the final issue is whether sufficient
evidence has been produced by way of depositions and
interrogatories to establish a genuine issue of reckless
conduct creating a presumption of malice which would support
a claim for punitive damages.
 The following facts have been established prima facie by
Owens :
1. Owens has been missing the forearm on his right side
since he was 6 years old.
2. Owens has been able to fully and safely perform all
of his duties while working on drilling rigs.
3. Owens was fired by Roger Hystad on the sole basis
that since he only had one arm it would not be safe to keep
him on and that it was company policy to therefore fire him.
4. - investigation - - into the ability of Owens
No was made
to safely and fully complete the duties of his employment.
5. No specific facts supported the conclusion that
Owens would be unsafe.
6. A written company policy prohibited hiring of
workers in Owens' condition; although it was also company
policy to qive handicapped persons "every considera.tion.
l1

The above facts, if proven, would support a finding that
the defendant recklessly proceeded in unreasonable disregard
of, and in great risk to, the substantial interests of
plaintiff. Failure to give a person a chance in employment
is the essence of the wrong proscribed by section 49-4-101,
MCA. Failure to even investigate plaintiff's worth could be
found by the jury to be recklessness.
We add that there may be a punitive damage issue on
oppression. In Gary & Purcell v. Automatic Gas et al., No.
82-54 (Mont. Dec. 1983) , we defined oppression to include
acts which constitute an abuse of power. A determination of
whether acts of oppression may be involved should await
presentation of the evidence.
There are those who distrust the lay person's capacity
for reasoned and dispassionate judgment. There are those who
tolerate the juries but feel compelled! to hold tight rein
lest the wretched twelve break the bank. This judicial
chauvinism will, if not checked, inevitably erode the iury
process.
We feel that the parties' peers are best able to define
and measure justice. In any factual setting, where
reasonable minds can disagree, we will vigilantly protect the
peoples' jural function.
The District Court is reversed and the matter is
remanded for trial.

We concur:

Z?4~4,ea/,uwa~\
Chief ust tick

Justices

Hon. Robert M. Holter,
District Judge, sitting in place of
Mr. Justice L. C. Gulbrandson
 Mr. Justice Fred J. Weber dissents as follows:
I do commend the author of the majority opinion for his
attempt to prescribe a standard for presumed malice in
punitive damage cases. I agree that our cases have not set
forth clear guidelines for future litigation.
I dissent because of my belief that the application of
the standard in the present case has reached an unjust
result. Perhaps that is a result of applying a physical
safety standard to a discrimination case. See Restatement of
the Law Second, Torts S500, entitled "Reckless Disregard of
Safety. "
The record in this case shows that the safety director
of Parker Drilling Co. formulated guidelines for hiring and
firing personnel and that these guidelines were posted in the
"doghouse" on the drilling rig. The physical requirement
guidelines for the job of "roughneck" are as follows:
"In order to reduce the possibility of injuries
on-the-job to an employee or injury to fellow
employees caused by an employee's physical
impairment, Parker Drilling Company has set out the
following minimum physical standards for all new
employees working in the field operations on the
drilling rigs.
Minimum Height - 5'6"
Minimum Weight - 130 lbs.
!.linimum Vision with or without corrective glasses -
20/30 in each eye.
Minimum Hearing - 15/20 in ea.ch ear.
Blood Pressure - within normal limit for age of the
individual.
No History of Heart Condition.
No History of Acute Diabetic Condition.
No Congenital Deformity of the Back or Previous
Back Surgery.
No Hernia or Previous Hernia Surgery.
No Severe Disabilities or Impairments to Arms,
Hands, Fingers, Legs, Feet and Toes.
Plaintiff's application for employment with the defendant
company contained the following questions:
"Do you have any cronic illnesses or known medical
limitations? Yes No If yes, explain:"
Plaintiff did not mark the "No" or otherwise mention in his
application that his right hand and a portion of his arm were
missing.
The reasons for the discharge of the plaintiff are
described in the deposition of the operation's manager of
Parker Drilling. In pertinent part he stated:
"Q. What else were you told by either one of these
gentlemen?
"A. I was told that he had only one arm, and that
they felt that he was a safety hazard as far as to
himself, the other crew members. And they wanted
my advice as to whether or not they should fire him
because of the possibility that he - suing us. My
answer to that was, yes, our policy was that we had
to let him go because of our requirements, and that
if they felt like he was a safety hazard, by all
means let him go.

"Q. What are the other reasons, then, why he was
fired?
"A. During the conversation on the telephone with
either Mr. Carter or Heistad [tool pushers on the
rig], they, in addition to him having only one arm
and then feeling that he was a safety hazard, as
far as to himself and the other crew members, that
he was not a good worker and was not performing his
duties properly.
"Q. And what specifically was he not doing with
regard to doing his duties or doing his job?
"A. They told me that they - he was not checking
the engine oil and the water in the radiators, and
that he was asked to do. And that the crew that
was following him had found that the engines were
several gallons low on oil after he was relieved,
and that the - therefore he wasn't checking his
engines properly."
The depositions of the operation's ma.nager and one of
the tool pushers (manager on a drilling rig) established
that, in a combined 30 years of experience working in the oil
fields, neither had ever seen anyone with an arm missing
working as a roughneck or a driller on an oil rig.
 It is also significant to note that plaintiff concludes
he is entitled to punitive damages simply because of the fact
of his being discharged. He does not contend that there was
any wrongful, willful or intentional contract specifically
directed at him. A key element of the majority opinion is
the conclusion that failure to investigate into the capacity
of the plaintiff could be found to be recklessness. That
conclusion is subject to factual question.
In determining whether or not there has been
discrimination, all of section 49-4-101, MCA must be
considered, including the following pertinent part:
"Discrimination prohibited. It is unlawful to
discriminate, . . .There is no discrimination
where the nature or extent of the handicap
reasonably precludes the performance of their
particular employment or where the particular
employment may subject the handicapped or his
fellow employees to physical harm."
Under the specific provisions of the statute, there is
no discrimination in this case if the nature of - the
plaintiff's handicap, that being a missing hand and part of
his arm, reasonably precluded the performance of his job as a
roughneck in the oil field. In addition, there is no
discrimination if that same handicap might subject the
handicapped person or his fellow employees to physical harm.
The wording of the statute allows the type of physical
requirements which were adopted by the defendant employer for
the hazardous work upon an oil rig. While the facts do
demonstrate that the plaintiff has worked successfully on an
oil rig notwithstanding his handicap, he is quite unique.
The record does not indicate others have successfully met
that test. Common sense tends to accept the testimony of the
two persons, who in more than 30 years experience had never
seen another one-armed man working on drilling rigs.
In this instance, the handicap of the plaintiff is such
as to present a real possibility of physical harm to either
the plaintiff or his fellow employees. This exception is
explicity contemplated by the statute as a basis for
concluding there has been no discrimination.
As I reviewed the cases cited in the majority opinion, I
concluded that a common denominator of the Montana cases was
some type of intentional conduct or harm on the part of the
person charged with conduct justifying punitive damages.
This is clearly set forth in Shahrokhfar v. State Farm (Mont.
1981), 634 P.2d 653, 657, 38 St.Rep. 1669, 1673, where the
Court stated:
"Next, appellant alleges error in submission of
punitive damages claiming insufficient evidence of
reprehensible conduct on the part of State Farm.
This contention is disposed of in Graham v. Clarks
- - 1140. (1981), Mont., 631 P.2d-718, 38
Fork Nat. Bank
St.Rep. In the Graham case we found
sufficient evidence to justify the submission of
punitive damages from the following facts: (1) The
defendant had seized plaintiff's cows, mistakenly
thinking they belonged to a bank debtor; and (2)
when the plaintiff attempted to recover his cows,
the bank adamantly refused to divulge their
location and thereafter returned them to the wrong
location. We held that such facts raised an issue
for the jury's consideration of punitive damages
under the 'recklessness' standard enunciated in
Klind v. Valley County Bank (1924), 69 Mont. 386,
222 P.T~ 439. In this case State Farm sued the
wrong person and though advised of its mistake,
refused to make a correction. As in Graham, these
facts are sufficient for the jury to determine that
State Farm acted recklessly and that it be subject
to the sanction of punitive damages."
In the Graham case, the bank had seized cows and refused to
divulge the location or to return them. The cows were
branded with the brand of the person claiming ownership, -
not
the bank's alleged debtor. That is clearly a form of
intentional conduct aimed at the plaintiff. In a similar
manner in Shahrokhfar, the insurance company sued the wrong
person and though advised of its mistake, refused to make a
correction. Again there is intentional conduct specifically
aimed at the plaintiff. This does not mean that punitive
damages are limited to situations where a tortfeasor
intentionally acts to harm a particular plaintiff. However,
I would affirm the universally recognized rule that to
warrant recovery of punitive damages, the act complained of
must not only be unlawful, but must also be characterized by
some circumstance of aggravation. See Allers v. Willis
(Mont. 1982), 643 P.2d 592, 596, 39 St.Rep. 745, 750. In the
present case, plaintiff in substance contends that the
adoption of a written policy prohibiting hiring of workers
who fail to meet minimum physical requirements, without
specifically testing each applicant's individual capacity to
perform constitutes recklessness. I do not find the cited
cases good authority for that conclusion.
While it may be contended that the employment
regulations of the defendant are subject to some question,
the record does not disclose a reckless action and.
unreasonable disregard or indifference to a risk of harm to
the plaintiff.
Under the majority ' s rationale, each person not meeting
the minimum physical qualifications for the job must be
tested individually to determine whether he has unique
capabilities. An employer could be liable for punitive
damages for not investigating past review of the job
application, even if refusal to hire reasonably protected the
handicapped and his fellow employees from physfcal harm.
Respondent's employment standard appears to be specifically
sanctioned under section 49-4-401, MCA. I would therefore
affirm the District Court in its holding that the Court was
precluded from submitting

I join in the above dissent: