Case Title: STORCH v BRD OF DIRECTORS

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1976-01-21T00:00:00Z

Document:
No. 12932 I N T H E S U P R E M E C O U R T O F THE STATE O F M O N T A N A 1975 S E Y M O U R L. STORCH, P l a i n t i f f and Appellant, BOARD OF DIRECTORS OF T H E EASTERN M O N T A N A REGION FIVE M E N T A L H E A L T H CENTER, e t a 1. , Defendants and Respondent. Appeal from: D i s t r i c t Court of t h e Sixteenth J u d i c i a l D i s t r i c t , A. B. Martin, Judge presiding. Counsel of Record: For Appellant: Robert L. Stephens, Jr. argued, Billings, Montana For Respondent : Lucas, Jardine & Monaghan, Miles City, Montana James P. Lucas argued, Miles City, Montana Habedank, Cumming & Best, Sidney, Montana Jacque W. Best argued, Sidney, Montana - - Submitted: December 11, 1975 Decided : JArj 2 1 7976 Filed: T;c;,iA; " 1 . ', 14r. J u s t i c e Gene B. Daly delivered t h e Opinion of t h e Court. P l a i n t i f f Seymour L. Storch brings t h i s appeal from a judgment of the d i s t r i c t court, Custer County, t h e Hon. A.B. Martin presiding, dismissing p l a i n t i f f ' s complaint f o r f a i l u r e t o s t a t e a claim upon which r e l i e f may be granted. The individually named defendants i n t h i s action a r e members of t h e Board of Directors of the Eastern Montana Regional Mental Health Center, Region 5. O n December 4 , 1972, p l a i n t i f f Storch was employed on a probationary b a s i s by the tfental Health Center as a drug abuse consultant. During p l a i n t i f f ' s probationary period, board member Ethel Eond made a written recommendation t o Rod L. Newman, Program Director f o r the Center, t h a t torch's employment be terminated. Upon review of t h i s recommendation and other complaints received, t h e Eoard of Directors sought t h e termination of torch's employment with the Center f o r these rea- sons : "I. His physical appearance and body cleanliness a r e not acceptable f o r a professional person i n our community. " 2 . While we recognize t h a t h i s personal l i f e i s a private matter, the Board f e e l s we cannot condone the open i l l i c i t cohabitation. This does not s e t a good example f o r people with problems o r our young people. "3. The medical community has been consulted. The response by the doctors except one has been they would not r e f e r patients t o t h i s man and f e e l t h e Center has deteriora-ted since the addition of t h i s man t o the s t a f f . "4. H i s behavior and actions r e f l e c t upon the Center adversely. W e r e a l i z e t h a t there a r e some people who have benefited from h i s service. But f o r the good of the Center and the continued support from t h e communi- t i e s , we have asked f o r f4r, torch's resignation. f 1 O n May 16, 1973, Rod L. Newman, Program Director, asked Storch f o r h i s resignation. Upon torch's request f o r an explana- t i o n , Newman sent him a l e t t e r l i s t i n g the reasons c i t e d by t h e Center's Board of Directors and advising Storch t h a t a.s a proba- tionary employee, he had no r i g h t t o appeal or hearing. When Storch refused t o resign, h i s employment was terminated, e f f e c t i v e June 15, 1973. With the termination of h i s employment, Storch, through l e g a l counsel, f i l e d a complaint i n Custer County d i s t r i c t court seeking special damages of $250,000, punitive damages of $50,000, and $50,000 f o r injury t o p l a i n t i f f ' s reputation. The three counts of t h e complaint went basically t o the contention t h a t the reasons given by t h e Board i n the l e t t e r requesting p l a i n t i f f ' s resignation were libelous r e f l e c t i o n s on h i s professional a b i l i t y and improper invasions of h i s constitutional r i g h t t o privacy. In answer t o p l a i n t i f f ' s complaint, defendants f i l e d a motion t o dismiss f o r f a i l u r e t o s t a t e a claim upon which r e l i e f may be granted. The motion t o dismiss s t a t e d two basic reasons: 1. That the a c t s complained of were discharged by an agency of s t a t e government a s a governmental function and were therefore subject t o t h e defense of sovereign immunity. 2. That the a c t s complained of were within the proper discharge of an o f f i c i a l duty and were therefore subject t o the defense of absolute privilege. The complaint being dismissed with prejudice the d i s - t r i c t c o u r t ' s judgment operated a s a f i n a l determination upon the merits and was therefore r e s judicata f o r purposes of p l a i n t i f f ' s cause. Thereafter, p l a i n t i f f appealed t o t h i s Court. The sole issue before t h i s Court is whether the d i s t r i c t court erred i n granting defendants' motion t o dismiss. P l a i n t i f f contends t h a t section 83-701, R.C.I.I. 1947, t h e specific statutory provision then i n e f f e c t , waived any sovereign immunity (1889 Constitution i n e f f e c t a t time cause of action accrued) t o the extent t h a t t h e s t a t e o r i t s instrumentalities were insured. This contention erroneously presupposes t h a t l i a - b i l i t y insurance i s the only limitation on waiver of statutory immunity. It i s an established general principle t h a t any statutory waiver of a s t a t e ' s immunity from s u i t i s t o be s t r i c t l y construed. 72 Am Jur 2d, States,Etc., $121. This Court recognized the continuing v a l i d i t y of t h i s principle i n Kish v. Montana S t a t e Prison, 161 Hont. 297, 301, 505 P.2d 891, when it quoted from Kaldahl v. State Highway Commission, 158 ?*font. 219, 221, 490 P.2d "'AS t o l e g a l actions against t h e s t a t e , the 1959 l e g i s l a t u r e passed Chapter 7, T i t l e 83f1 R.C.M. 1947 - " ~ o r t Actions Against the S t a t e , and i n Even sections, sections 83-701 through 83-707, carefully determined how, why, and when the s t a t e could be sued i n a t o r t action. These l e g i s l a t i v e enactments recognized t o r t l i a b i l i t y and e s t a b l i s h immunity of the s t a t e i n excess of a c o l l e c t i b l e insurance. Thus, these s t a t u t o r y provisions provide a remedy against the s t a t e under-certain circumstances. The l e g i s l a t u r e has spoken and we a r e bound by i t s 1 I1 enactments. (Emphasis supplied. ) See also: Valley County v. Thomas, 109 Mont. 345, 97 P.2d 345; S t a t e ex r e l . LaPoint v. D i s t r i c t Court, 69 Mont. 29, 220 P. 88. The s t a t u t e , section 83-701, R.C.M. 1947, provided in pertinent p a r t : "The d i s t r i c t courts of the s t a t e of Montana s h a l l have exclusive jurisdiction t o hear, determine, and render judgment t o the extent of t h e insurance coverage carried by t h e s t a t e of Montana on any claim against t h e s t a t e of Montana f o r money only, accruing on o r a f t e r the passage and approval of t h i s a c t , on account of damage t o o r l o s s of property, o r on account of personal i n j u r i e s o r death caused by the negligence o r wrongful a c t or omission of any employee of the s t a t e of Montana. > ' i 9: >'i" The s t a t u t e expressly r e s t r i c t s waiver of t o r t immunity t o the common t o r t actions f o r recovery of damages f o r personal injury o r death o r damage t o property. Applying the r u l e of s t r i c t construction, the p l a i n t i f f ' s two basic claims of l i b e l and inva- t i o n of privacy do not f i t i n t o the t o r t categories specified i n the s t a t u t e . It thus becomes unnecessary t o discuss the e f f e c t of any l i a b i l i t y in'surance because the f a i l u r e of t h e "certain circun- stances" t e s t of Kaldahl constitutes an absolute bar t o waiver of sovereign immunity. P l a i n t i f f a l s o contends t h a t defendants' r e l i a n c e on the privileged communication defense t o a l i b e l claim i s mis- placed because Montana law requires the absence of malice f o r such a defense. In t h i s case, p l a i n t i f f claims the alleged libelous communication involved malice and therefore the defense could not stand. W e find no merit i n t h i s contention. A privileged communication i s one which, except f o r the circumstances under which it is made, may be defamatory and actionable. Section 64-208, R.C.M. 1947, provides: 11 What communications a r e privileged. A privileged publication i s one made: "1. In the proper discharge of a.n o f f i c i a l duty; "2, In any l e g i s l a t i v e o r j u d i c i a l proceeding, o r in any other o f f i c i a l proceeding authorized by law; "3. In a communication, without malice, t o a person interested therein, by one who i s a l s o interested, or by one who stands i n such r e l a t i o n t o the person interested a s t o afford a reasonable ground f o r supposing the motive f o r the communication innocent, or who i s requested by the person interested t o give t h e information; "4. By a f a i r and t r u e report, without malice of a j u d i c i a l , l e g i s l a t i v e , o r other public o f f i c i a l proceeding, o r of anything s a i d i n the course thereof. " While some of the quoted subsections do mention malice t h e per- t i n e n t subsection 1, says nothing about qualified privilege. Rather it c o n s t i t u t e s an absolute privilege with the only require- ment being t h a t t h e intradepartment communication be one rendered while engaged i n an " o f f i c i a l duty". There ca.n be no doubt t h a t the hiring and f i r i n g of employees i s p a r t of the " o f f i c i a l duty" of Montana Regional Health Centers. The t i t l e of Chapter 246, Laws of 1967, reads: "An Act Expanding Duties and Services of the Dit~i.sion of Mental Hygiene of the S t a t e Board of Public I n s t i - tutions by Establishing and Conducting Mental Health Clinics and Community Comprehensive Mental Health Centers; Creating Regional Mental Health Boards; Pro- viding f o r the Organization Thereof 9~ ik 72. " (Emphasis supplied.) Thus it becomes obvious t h e l e g i s l a t i v e i n t e n t was t o make the mental health center an arm of the s t a t e and hiring and f i r i n g a function of t h a t agency. Whether statements made by such public o f f i c e r s i n r e l a t i o n t o the hiring and f i r i n g of employees nay be subject t o absolute privilege has been answered i n t h e affirmative many times. Under f a c t s similar t o the instant case, t h e United States Supreme Court i n Barr v. >$atteo, 360 U.S. 564, 571, 79 S.Ct. 1335, 3 L ed 2d 1434.,1441, s t a t e d t h a t insofar as a public o f f i c e r was acting within the scope of h i s authority h i s communication was absolutely privileged. See also: Newbury v. Love, 242 F.2d 372; ?.$organ v. Willingham, 424 F.2d 200; Preble v. Johnson, 275 F.2d 275. The Court went on t o say why an absolute privilege was e s s e n t i a l i n such a circumstance, quoting approvingly from Judge Learned Hand's decision i n Gregoire v: Biddle, 177 F.2d 579, 581: 1 I 1 ; J ; 9 : it i s impossible t o know whether the claim i s well founded u n t i l the case has been t r i e d , and t h a t t o submit a l l o f f i c i a l s , the innocent a s well a s t h e g u i l t y , t o the burden of a t r i a l and t o t h e inevitable danger of i t s outcome, would dampen the ardor of all. but the most resolute, o r the most irrespon- s i b l e , i n the unflinching dbscharge of theeir dutiies .* * *"' Since the i n t e r n a l communication was it it shin the proper discharge of an o f f i c i a l duty, it enjoyed an absolute privilege and could therefore not be the subject of l i b e l action. Finally, the f a c t s s t i p u l a t e t h a t p l a i n t i f f wa.s on probationary s t a t u s . The purpose of such s t a t u s i s t o provide a b r i e f period i n which t o measure the employee's a b i l i t y t o perform h i s job before granting him a degree of job security. I f the appropriate s t a t e employer f e e l s t h a t t h e employee i s not measuring up during t h i s probationary period it can dismiss t h a t employee without procedural due process. M.A.C. 2-3.34 (26)-S34160. P l a i n t i f f places heavy r e l i a n c e on Perry v. Sindermann, 408 U.S. 593, 597, 92 S.Ct. 2694, 33 L ed 2d 570,577, f o r h i s claim t h a t the exercise of the r i g h t of privacy constitutes sub- s t a n t i v e due process and a s such i s controlling on the constitut.ional issue i n t h i s case, even though h i s employee s t a t u s was proba- tionary. In Perry the Court stated: "* * * even though a person has no ' r i g h t f t o a valuable governmental benefit and even though the government may deny him the benefit f o r any number of reasons, there a r e some reasons upon which the government may not r e l y . It may not deny a benefit t o a person on a b a s i s t h a t infringes h i s 8, constitutionally protected i n t e r e s t s * -L. I I So the issue becomes whether the dismissal of p l a i n t i f f infringed upon h i s substantive due process r i g h t of privacy. A t the outset, it should be remembered t h a t the exercise of con- s t i t u t i o n a l r i g h t s i s not absolute. In Weber v. Highway Commission of S t a t e of Montana, 333 F.Supp. 561, 564, Judge Russell E. Smith said : "* 9 : +:His exercise of h i s [employee's] r i g h t s t o freedom of speech 9 : * ; ? did not furnish him with 4. a form of job insurance. ' k 9~ " Ye * t h a t the motive f o r the f i r i n g was generated by p l a i n t i f f ' s exercise of h i s f i r s t amendment r i g h t s does not i n m y opinion prevent the Highway Department from dismissing him i f a valid cause f o r dismissal i s shown ik Ji J<" Thus where an overriding government i n t e r e s t can be shown, the employee's exercise of substantive constitutional r i g h t s i s not controlling i n the disposition of the case, Here, the l e t t e r from the Chairman of the Personnel Committee t o the Director of the Eastern Montana Regional Mental Health Board, which forms the core of lai in tiff's complaint, gave several reasons f o r requesting p l a i n t i f f ' s dismissal but the main ingredient was the b e l i e f by the Board of Directors t h a t t h e p l a i n t i f f ' s personal l i f e s t y l e was adversely affecting h i s a b i l i t y t o adequately discharge h i s professional duties. Specifi- c a l l y the Board f e l t t h a t because p l a i n t i f f was engaged i n counseling people with personal problems, h i s own personal philosophies became relevant t o h i s job performance. Since those personal philoso- phies conflicted with what the Board saw a s the goals of the Mental Health Board, it u t i l i z e d i t s authority a s overseer of employee performance t o recommend p l a i n t i f f ' s dismissal. That when an employee's conduct a f f e c t s h i s a b i l i t y t o adequately perform h i s duties he can be discharged i s well established. In Bruns v. Pomerleau, 319 F.Supp. 58, 67, it i s s t a t e d : "ik * J~IiThat he does i n h i s private l i f e , a s with other public employees, should not be h i s employer's concern unless i t can be shown t o a f f e c t i n some degree h i s efficiency i n the performance of h i s duties. ; k ; ? ; k " (Emphasis supplied.) See a l s o : Pickering v. Board of Education, 391 U.S. 563, 88 S. C t . 1731, 20 L ed 2d 811; B a t t l e v. Mulholland, 439 F.2d 321; Pred v. Board of Public Instruction, 415 F.2d 851. Accordingly, the judgment of t h e d i s t r i c t court i s affirmed . J u s t i c e A 7 e Concur: I