Case Title: BONNIE A. HOCHALTER; JAMES A. HLOUCAL; PAIGE WELLS; ROGER DALE BROWN; GENE E. LINN; BONNIE J. KRISKILL; J. LEE VARVARO; STEVEN C. ROZIER; KEVIN J. McGRATH; and NOLAN PEACOCK as Representatives of teh Class City of Gillette, Campbell County, Wyoming Employees V. CITY OF GILLETTE, WYOMING

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 2005-09-28T00:00:00Z

Document:
BONNIE A. HOCHALTER; JAMES A. HLOUCAL; PAIGE WELLS; ROGER DALE BROWN; GENE E. LINN; BONNIE J. KRISKILL; J. LEE VARVARO; STEVEN C. ROZIER; KEVIN J. McGRATH; and NOLAN PEACOCK as Representatives of teh Class City of Gillette, Campbell County, Wyoming Employees V. CITY OF GILLETTE, WYOMING2005 WY 125120 P.3d 674Case Number: 04-217Decided: 09/28/2005
APRIL 
TERM, A.D. 2005

 
 
BONNIE 
A. HOCHALTER; JAMES A. HLOUCAL;

PAIGE 
WELLS; ROGER DALE BROWN;

GENE E. 
LINN; BONNIE J. DRISKILL;

J. LEE 
VARVARO; STEVEN C. ROZIER;

KEVIN J. 
McGRATH; and NOLAN PEACOCK

as 
Representatives of the ClassCity of Gillette,

Campbell 
County, 
Wyoming 
Employees,

 
 
Appellants

(Plaintiffs),

 
 
v.

 
 

CITY OF 
GILLETTE, 
WYOMING,

 
 
Appellee

(Defendant).

 
 
 
 

Appeal 
from the DistrictCourtofCampbellCounty

The 
Honorable Dan Spangler, Judge, Retired

 
 

Representing 
Appellants:

            
 H.W. Rasmussen, Sheridan, Wyoming.

 
 

Representing 
Appellee:

            
Charles W. Anderson, GilletteCity Attorney; BradleyT.Cave and Matt J. Micheli of Holland 
& Hart, LLP, Cheyenne, 
Wyoming.  Argument by Mr. 
Cave.

 
 
Before 
HILL, C.J., and GOLDEN, KITE, and BURKE, JJ., and KALOKATHIS, 
DJ.

 
 
KITE, 
Justice.

 
 
[¶1]      The city of 
Gillette 
(Gillette) adopted a Personnel Policies and Procedures Manual which indicated 
Gillette would provide certain health and life insurance benefits to long-term 
employees following retirement.  In 
2003, Gillette adopted a revised manual which provided a limited amount of money 
to an irrevocable trust to fund the insurance benefits to those qualified 
employees and eliminated some benefits previously offered.  Ten employees (Employees) filed a class 
action against Gillette claiming it was bound by the terms of the first manual. 
They sought a declaratory judgment as to their rights to receive post-retirement 
benefits and an affirmative injunction against Gillette requiring it to fully 
fund those benefits.  They also 
claimed Gillette's action denied them benefits without due process. 

 
 
[¶2]      Gillette filed a 
motion to dismiss for lack of subject matter jurisdiction claiming Employees 
failed to comply with the Governmental Claims Act, Wyo. Stat. Ann. §§ 1-39-101, 
et seq. (LexisNexis 2005) and art. 
16, § 7 of the Wyoming Constitution. The district court 
granted the motion to dismiss and Employees appealed.   We affirm.

 
 
 
 
ISSUES

 
 

 
 
A.        Did 
the District Court improperly dismiss the Appellants' Complaint for lack of 
jurisdiction?

 
 
            
i.          
Did the Appellants comply with the Governmental Claims 
Act?

 
 
            
ii.         
Did the Appellants need to comply with the Wyoming 
Constitution?

 
 
Gillette 
phrases the issues as follows:

 
 
A.        Is an 
affirmative injunction to fund retirement benefits based on an alleged 
contractual right to those benefits a "demand for money" under Wyoming 
Constitution Article 16, § 7?

 
 
            
B.        Did 
Appellants' failure to submit an itemized claim as required by the Wyoming 
Governmental Claims Act prevent subject matter jurisdiction in the District 
Court?

 
 
            
C.        Can 
Appellants act as putative representatives of a class of unidentified claimants 
under the Wyoming Governmental Claims Act?

 
 
            
D.        Did 
Appellants waive any federal claim exceptions to the Wyoming Governmental Claims 
Act by failing to raise a federal law basis of jurisdiction before the District 
Court?

 
 
            
E.        Did 
Appellants' Complaint fail to state a claim under 42 U.S.C. § 
1983?

 
 
 
 
FACTS

 
 
[¶4]      For many years, 
Gillette offered its employees a retirement benefit package which was set out in 
its employee manual.  For employees 
who had 20 years of consecutive service, Gillette offered health insurance 
premiums for benefits similar to those which active employees were receiving and 
a $5,000 life insurance policy.  For 
employees with 30 years of consecutive service, health insurance premiums were 
also offered for their spouses and a $10,000 life insurance policy was to be 
provided upon retirement.  For all 
retired employees, Gillette offered to pay two-thirds of unused sick leave up to 
960 hours accumulated during their employment.  Gillette paid all of these benefits, 
including the death benefit that would have been provided by life insurance, 
from city funds, and as such, the plan was uninsured and 
self-funded.

 
 
[¶5]      In 2002, Gillette 
commissioned an actuarial analysis of the potential cost of continuing to pay 
for the retirement benefits it offered.  
Ultimately, the city council decided to allocate $8,000,000 to an 
irrevocable trust to provide retirement health benefits to everyone employed on 
June 30, 2003, who retired with 20 years of continuous service and the seven 
retirees who met that criteria.  In 
addition, under the new plan, those same benefits would be available to the 
spouses of qualifying employees if they had 30 years of continuous service.  With regard to the life insurance 
benefit, Gillette offered to immediately pay to all currently retired employees 
the present value of a $5,000 death benefit, but eliminated the life insurance 
benefit for future retirees.  When 
the allocated funds were exhausted, the new plan contemplated no additional city 
funding would be made available and the benefits would no longer be 
offered.  On December 15, 2003, the 
city council adopted Resolution 20-21 which established a revised manual 
containing the new benefit plan.

 
 
[¶6]      On May 20, 2004, 
Gillette received a letter signed only by H.W. Rasmussen as counsel for and on 
behalf of "a group of current employees" and "all current and past employees" 
which purported to be the notice required by § 1-39-113, and which generally 
described their claims without indicating the dollar amount claimed.  The names and addresses of the ten 
"representatives of all the employees" were attached to the letter. Those ten 
selected employees then filed a complaint which alleged all employees of 
Gillette constituted a class of potential plaintiffs asserting contractual 
rights against Gillette pursuant to the modification of the employment 
contract.  The ten named plaintiffs 
sought, on behalf of the class, a declaratory judgment recognizing their alleged 
right to receive, upon retirement, payment of health and life insurance benefits 
and cash payment for accumulated, unused sick leave consistent with the original 
manual.  They also sought an 
affirmative injunction "requiring the City as such times as may be necessary to 
adequately and fully fund post-retirement benefits for current employees."  In two sentences, the complaint also 
alleged Gillette modified its "contract obligation" without just compensation 
and without due process.  However, 
it failed to state the legal basis for the due process 
claim.

 
 
[¶7]      The complaint 
alleged Employees had complied with the Governmental Claims Act by sending a 
notice of their claim to Gillette on May 18, 2004.  Gillette filed a motion to dismiss the 
complaint based on the failure of the claim to comply with the Governmental 
Claims Act and art. 16, § 7 of the state constitution which together require the 
notice of claim to contain an itemized statement of the damages claimed and to 
be signed by the claimants under penalty of perjury.  Employees' response to the motion to 
dismiss indicates they had previously filed an earlier action which had included 
specific dollar amounts claimed, but they dismissed that action to eliminate 
those claims and, thus, in their opinion, eliminated the need to comply with the 
constitutional requirement that each claimant file an itemized statement of 
their claim under penalty of perjury.1  

 
 
[¶8]      After a hearing, 
the district court on December 6, 2004, entered an order granting the motion and 
dismissed the complaint holding that it lacked subject matter jurisdiction 
because the complaint was expressly based upon the Governmental Claims Act and 
it failed to identify the members of the class and include an itemized statement 
of the damages asserted and was not signed by the individual claimants under 
penalty of perjury.  The district 
court cited Beaulieu v. Florquist, 
2004 WY 31, ¶14, 86 P.3d 863, 868, (Wyo. 2004) (Beaulieu II) as authority for its 
order.  The employees filed a timely 
appeal.

 
 
STANDARD 
OF REVIEW

 
 
[¶9]      Our standard 
for reviewing a dismissal of a complaint is well 
established:

 
 
According 
to our standard of review we will sustain a dismissal of a complaint only if it 
shows on its face that the plaintiff was not entitled to relief under any set of 
facts.  In considering such a 
motion, the "facts alleged in the complaint are admitted and the allegations 
must be viewed in the light most favorable to plaintiffs."   Dismissal is a drastic remedy, and 
is sparingly granted.  Cranston v. Weston County Weed & Pest 
Bd., 826 P.2d 251, 254-55 (Wyo.1992) (quoting Matter of Paternity of JRW, 814 P.2d 1256, 1259 (Wyo.1991) (citations omitted)).

 
 

Darrar 
v. Bourke, 910 P.2d 572 (Wyo. 
1996).  See also, Wilson v. Town of Alpine, 2005 WY 57, ¶4, 111 P.3d 290, 291 (Wyo. 2005).  We will 
sustain the dismissal of a complaint only when it is certain from the face of 
the complaint that the plaintiff cannot assert any facts that would entitle him 
to relief.  Natrona County v. Blake, 2003 WY 170, 
¶5, 81 P.3d 948, 950-51 (Wyo. 2003).    

 
 
 
 
DISCUSSION

 
 
[¶10]   Employees have taken a unique and 
somewhat contradictory position from the outset of this litigation. They have 
treated their claims as subject to the Governmental Claims Act, apparently 
conceding the claims were based upon a contract and, pursuant to  § 1-39-104(a), were subject to the claim 
procedures of § 1-39-113, and took steps to comply with those procedural 
requirements.  However, they 
purposefully filed no "itemized statement" as required by the statute because, 
they contend, without such amounts their claims were not subject to the 
requirement of art. 16, § 7 of the Wyoming Constitution that claims against the 
government be itemized and signed by the claimants under penalty of perjury, 
requirements which they admittedly did not fulfill.  Additionally, Employees argue they were 
simply seeking a declaratory judgment on their contractual rights upon 
retirement and Gillette would not have been required to pay any amounts certain 
to them in the course of this litigation.  
Therefore, in their view, compliance with the constitutional provision, 
which contemplates actual payment of claims, was not required.  In addition, Employees alleged that 
their retirement benefit rights were denied without due process and without 
compensation.  However, they did not 
specify whether that claim was based upon federal or state law, or 
both.

 
 
[¶11]   Gillette responds by pointing out 
Employees were also seeking an injunction which, if granted, would have required 
Gillette "to adequately and fully fund post-retirement benefits for current 
employees."  Such a claim could not 
be made, Gillette argues, without complete compliance with the statute and art. 
16, § 7 of the state constitution.  
In addition, Gillette contends Employees could not use a declaratory 
judgment to substitute for a breach of contract claim where the alleged breach, 
the unilateral adoption of a new manual with revised retirement benefits, had 
already occurred.  With regard to 
Employees' due process claim, Gillette argues Employees waived any federal law 
claim by failing to plead it, and any state law due process claim would be 
subject to the state constitutional requirements of art. 16, § 7, which 
Employees admittedly failed to meet.

 
 
[¶12]   We find Employees' position in this 
litigation puzzling at best.  They 
agree the Governmental Claims Act, which is directed to tort and contract claims 
against governmental entities, applied to their claims and they filed what they 
claimed was the requisite notice under the Act.  They alleged no tort claims.  Consequently, they must have been 
relying upon a contract claim or the Act would not have applied.  Their complaint referred to the "terms 
of its (Gillette's) contract with City employees" as the basis for their 
injunctive relief claim.  Yet they 
seem reluctant to characterize their claims as contractual and, instead, contend 
the declaratory judgment claim somehow transforms their action to one which does 
not trigger the constitutional requirements.2  We can find no support for that 
result.

 
 
[¶13]   Simply pleading a declaratory 
judgment claim does not remove the claim from the reach of the Governmental 
Claims Act.  As we held in Rocky Mountain Oil & Gas Ass'n v. 
State, 645 P.2d 1163 (Wyo. 1982), when a declaratory judgment action 
also involves contract or tort claims, the Governmental Claims Act applies.  Likewise, in Allen v. Lucero, 925 P.2d 228 
(Wyo. 1996), 
where the plaintiff had tort, contract, and declaratory judgment claims, the Act 
applied.  While Employees apparently 
agree with that conclusion given their concession the Act applied to their 
claims, they seem to be contending that because they filed a declaratory 
judgment action with no specific amounts claimed as currently due and owing, and 
not a breach of contract claim with specific damages which Gillette must pay, 
they can avoid the constitutional requirements of an itemized statement signed 
by each claimant under penalty of perjury.  
In other words, under their theory, they had a governmental claim which 
had to comply with the statute, but not the constitution.

 
 
[¶14]   We find two frailties in Employees' 
position; first, if their claim were successful, Gillette would have been 
required to expend substantial funds, making meaningless their intentional 
omission of any monetary claim from their complaint; and second, they cite no 
authority for the proposition that the statute and the constitution do not both 
apply to all governmental claims.  
In construing art. 16, § 7, this Court long ago determined the wording of 
the constitutional provision is "sufficiently broad and comprehensive to embrace 
all claims and demands for money." Houtz 
v. Bd. of Comm'rs of UintaCounty, 11 Wyo. 152, 70 P. 840, 843 
(1902).  More specifically, this 
Court said, the constitutional requirement applies to any "claim . . . that is 
to be satisfied according to its terms by the payment of money."  Id. 
at 842-43.

 
 
[¶15]   The claims in Houtz did not include damages based in 
tort or contract. Instead, Houtz requested a refund of fines that had been 
wrongfully collected by UintaCounty. The Court concluded that even 
though the case was not a typical claim for money, any suit brought against a 
governmental entity that sought money to be paid out of the governmental 
entity's funds was subject to the requirements of art. 16, § 7.  Similarly, we have acknowledged that a 
plaintiff could not use a mandamus proceeding against a public officer to avoid 
the requirements found in that article.  Appel v. State ex rel. 
Shutter-Cottrell, 9 Wyo. 187, 61 P. 1015, 1017 
(1900).

 
 
[¶16]   As support for their claim that not 
all governmental claims must comply with the constitutional provision, Employees 
cite Beaulieu II claiming it held the 
requirements of the statute and the constitution must be examined separately and 
that somehow supports their position.  
We believe Employees misread Beaulieu II.  The question presented in Beaulieu v. Florquist, 2001 WY 33, 20 P.3d 521 (Wyo. 2001) (Beaulieu I), 
was whether a governmental claim must comply with both the statutory and the 
constitutional requirements and the answer was affirmative.  In Beaulieu II, we held the constitutional 
requirements were jurisdictional. In neither case, did we suggest that 
compliance only with the statute, and not with the constitution, could be 
sufficient in some cases. In fact, in Beaulieu II, we 
stated:

 
 
". . . 
as early as Utah Const. Co. v. State 
Highway Commission, 45 Wyo. 403, 19 P.2d 951, 953 (1933), we held that 
statutes granting the right to sue the state must be construed in consonance 
with the constitution, and that plaintiffs cannot comply with the constitution 
by reducing a claim to judgment and then filing that judgment as a claim against 
the state.  The gist of that dual 
holding is that a claim filed with the governmental entity must meet the 
constitutional, as well as the statutory, requirements.   

 
 

Beaulieu, 
II, 
¶11.

 
 
 [¶17]  Either a claim is subject to the 
requirements applicable to a governmental claim or it is not.  If it is, then it must comply with both 
the statute and the constitution.  
Certainly, there are legal claims which can be made against governmental 
entities pursuant to the Declaratory Judgments Act which do not constitute 
governmental claims subject to the Governmental Claims Act or art. 16, § 7 of 
the constitution.  Those would 
include claims seeking an interpretation of a statute, a constitutional 
provision, or an administrative rule, or actions seeking a writ of mandamus 
forcing governmental entities to perform ministerial functions. See Rocky Mountain Oil & Gas Ass'n, 
 645 P.2d 1163; Board of County Comm'rs of County of Laramie 
v. Laramie County School Dist. Number One, 884 P.2d 946, 950 (Wyo. 1994) 
(the Wyoming Governmental Claims Act expressly excludes claims for 
mandamus).  However, when a claim is 
made which, if successful, will require the expenditure of governmental money in 
satisfaction, then the claim must comply with both the statute and the 
constitution. 

 
 
[¶18]   Employees' claims for a declaratory 
judgment concerning their contract rights to health and life insurance benefits 
and sick leave pay, as well as their claim for injunctive relief seeking 
enforcement of the original benefits, unquestionably seek the expenditure of 
governmental funds. As such, they must comply with both the statute and the 
constitution.  In their opening 
brief, Employees conceded, "[a]ppellants did not include an itemized statement 
of damages asserted."  Yet in their 
reply brief, they suggest their claims were "itemized" because they were 
generically described. While we are not persuaded a general description of the 
nature of the claims constitutes "itemization" as contemplated by the statute 
and the constitution, that issue need not be resolved here because Employees 
readily admit neither the ten individual claimants, nor the members of the 
class, signed the claim under penalty of perjury. The claims, having failed to 
comply with the constitutional requirements, were properly dismissed by the 
district court for lack of subject matter jurisdiction.

 
 
[¶19]   The filing of Employees' claims as 
a class action does not avoid the jurisdictional requirements of the 
Governmental Claims Act and somehow create subject matter jurisdiction.  Mutual of Omaha Ins. Co. v. 
Blury-Losolla, 952 P.2d 1117, 1120-21 (Wyo. 1998).  While nothing in the Governmental Claims 
Act prohibits the use of a class action to obtain relief for a group of 
claimants, compliance with the requirement that all claimants sign the claim 
under penalty of perjury would appear to make a class action less than feasible 
in a governmental claims context.

 
 

[¶20]   Employees cite Martineau v. 
MaricopaCounty, 86 P.3d 912 
(Ariz. Ct. App. 2004) for the proposition that an itemized written statement is 
not required in a declaratory action against a government agency.  However, the facts in that case are 
clearly distinguishable and the court's reasoning is consistent with ours in 
this case.  The claim in 
Martineau involved a challenge to a county policy which required 
constables to complete enhanced safety training in order to carry weapons in 
performance of their duties. The county contended the constables must first 
comply with Arizona's governmental claims statute which 
required the filing of an itemized statement of the claims. Holding the claim 
"would have no direct effect upon the County's financial planning or budgeting," 
the court concluded the itemized statement requirement of the statute did not 
apply.  Id. at 
916.  The nature of the relief 
sought by the Arizona constables is far different than the 
relief requested by Employees in this case, i.e., 
an injunction requiring Gillette to provide money out of its budget to fund 
these retirement benefits.

 
 

[¶21]   The Arizona court also stated, "[o]ur holding today should 
not be understood to allow the filing of an action for monetary damages under 
the guise of seeking declaratory relief without first complying with statutory 
or administratively mandated procedures."  Id.at 917, n.7.  Thus, rather than support Employees' 
arguments, Martineau expressly rejects the precise approach Employees 
took in this case.  We agree with 
the Arizona 
court's reasoning that a primary purpose of the "itemized statement in writing" 
element of a governmental claim notice is to provide the governmental entity 
with warning to assist them in budgeting and financial decision making.  Beaulieu II, ¶13. 
 An 
injunction that would require Gillette to expend millions of dollars from its 
funds certainly implicates this interest.  
The district court correctly decided the Governmental Claims Act and art. 
16. § 7 applied and Employees admitted that they failed to comply with its 
requirements.

 
 
[¶22]   However, the district court did not 
address Employees' due process claim.  
As noted above, the complaint did not include any legal basis for that 
claim or any suggestion whether it was being made under federal or state 
law.  Certainly, under state law, 
the claim would fail for the same reasons the other claims failed unless it was 
based upon an alleged denial of procedural due process.  No such allegation is contained in the 
complaint or Employees' appellate briefs. If Employees intended a federal due 
process claim based on 42 U.S.C. § 1983, they were required to allege "the 
violation of a right secured by the Constitution and laws of the United States, 
and must show that the alleged deprivation was committed by a person acting 
under color of state law."  West v. Atkins, 487 U.S. 42, 48; 108 S. Ct. 2250; 101 L. Ed. 2d 40, (1988).  
Again, no such allegation was made.  
The district court's dismissal of Employees' complaint for failing to 
comply with the Governmental Claims Act and the state constitution does not 
prevent them from pursuing a federal due process claim in a separate 
proceeding.

 
 
 
 
CONCLUSION

 
 
[¶23]   We hold the district court properly 
dismissed Employees' claims under state law for lack of subject matter 
jurisdiction because they failed to comply with the Governmental Claims Act and 
art. 16, § 7 of the Wyoming Constitution.  The claims were not itemized nor signed 
by individual claimants under penalty of perjury.  Neither the district court's order nor 
this opinion addresses any claims Employees may have under federal 
law.

            

 
 
FOOTNOTES

 
 

1The record 
contains a copy of an earlier letter to Gillette signed by the ten 
representative employees which was apparently intended to be the notice of claim 
in support of the earlier action and which included only estimates of the dollar 
amounts involved which were obtained from Gillette's actuarial study and which 
indicated the health insurance benefits were estimated to cost $13,900,000, and 
the unused sick leave to cost less than $2,000,000.  No cost estimate was provided for the 
life insurance benefit.

 

2Gillette 
argues a declaratory judgment is inappropriate when the relief requested is 
essentially damages from a breach of contract citing Jacobsen v. King County Medical Service 
Corp., 160 P.2d 1019, 1021, (Wash. 1945).  We noted in Pullar v. Huelle, 2003 WY 90, ¶6, 73 P.3d 1038, 1040, n.2  (Wyo. 2003) that 
"there is some question whether a declaratory judgment action is an appropriate 
method to seek damages for breach of contract." However, Employees counter that 
no breach has yet occurred because Gillette has not yet failed to pay benefits 
under the new policy. We need not address that issue as Employees' claims fail 
for other reasons.