Case Title: LOCAL 8 v CITY OF GREAT FALLS

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1977-08-30T00:00:00Z

Document:
No. 13616 I N T H E SUPREME COURT O F T H E STATE O F M O N T A N A 1977 L O C A L # 8 INTERNATIONAL ASSOCIATION O F FIRE FIGHTERS, P l a i n t i f f and Appellant, -vs- CITY O F G R E A T FALLS, Defendant and Respondent. Appeal from: D i s t r i c t Court of t h e Eighth J u d i c i a l D i s t r i c t , Honorable R. J. Nelson, Judge p r e s i d i n g . Counsel of Record: For Appellant: McKittrick and Duffy, Great F a l l s , Montana Joseph Duffy argued, Great F a l l s , Montana For Respondent : Howard Burton and L e s l i e S. Waite, Great F a l l s , Montana L e s l i e S. Waite argued, Great F a l l s , Montana Submitted: June 2 , 1977 Decided: AUG 3 0 7 9 7 7 Clerk M r . Justice Frank I. Haswell delivered the Opinion of the Court, This i s an appeal from an order entered by the d i s t r i c t court, Cascade County, dismissing two counts of a complaint f i l e d by Local /,8, International Association of Firefighters against the City of Great Falls. Local /I8 brought the action for declaratory judgment t o determine the rights of the parties with respect t o longevity pay of firemen employed by the City. Counts I and I1 of Local #8's complaint were dismissed by the d i s t r i c t court for failure t o s t a t e a cause of action under which relief could be granted. Count 111, concerning an un- related matter, is s t i l l pending for t r i a l . Local /I8 i s a labor organization and the certified collective bargaining agent for firemen employed by the 'city. The City is a municipal corporation and i s the employer bargaining agent for collective bargaining purposes. The City and Local /I8 entered into numerous collective bargaining agreements which cover a l l years material t o t h i s case. These agreements cover a l l matters of wages, hours and working conditions affecting the firemen. Since 1937, section 11-1932, R.C.M. 1947 (and i t s predeces- sors) has established minimum wages t o be paid t o firemen employed by f i r s t class c i t i e s such as Great Falls. I n 1957, section 11-1932 was amended t o provide for a higher minimum wage and also longe- vity pay. A fireman thereafter was entitled t o a minimum salary equal t o the statutory base wage plus 1% of the base wage for each year he served up t o 20 years. Thus, i n 1957, when the statutory base wage was $350, a fireman who had served for one year was entitled to a minimum salary of $353.50 ($350.00 + 1% of $350.00 = $353.50). It i s important t o note the 1 % longevity pay was a percentage of the statutory minimum base wage rather than of the actual wage being received by the employee. Thus, i f the employee's actual wage was higher than the statutory minimum wage, section 11-1932 had no effect upon h i s actual salary. Subsequent amendments to section 11-1932 i n succeeding years increased the statutory base wage. A 1975 amendment of section 11-1932 allowed accumulation of longevity beyond 20 years and increased the minimum salary t o $700. Likewise, the collective bargaining agreement executed by the firemen and the City provided for an increase i n salary for the firemen. A t a l l times relevant herein the salary paid by the City t o each fireman exceeded the statutory base salary paus longevity pay. In 1956, the Council of the City of Great Falls passed Resolution No. 4973 dealing with longevity pay for firemen. The Resolution granted longevity pay of 1% per year of service (up t o a maximum of 5%) to those firemen who served more than 20 years. This longevity pay is calculated by computing a percentage of the actual wage received by the fireman rather + than the statutory minimum wage. The purpose and intent of the Resolution is clearly stated in its opening paragraph, which reads : "THAT WHEREAS it i s deemed wise by the Council t o reward faithful Firemen and Policemen who have served said City a f u l l period of a t l e a s t 20 years by an increase of pay so as t o induce a longer tenure of service by the same * * *." This Resolution continued in f u l l force and effect for some I t ' . . t ' ', . - L , . twenty years and was incorporated i n the collective bargaining agreements executed by the parties during t h i s period. Several firemen have served the f u l l period and have become entitled t o the additional longevity pay. These long-tenured firemen have been paid longevity pay by the City i n accordance with the Resolution. - 3 - I n May 1975 the City Commission passed Resolution No. 6759 which repealed Resolution No. 4973 effective July 1, 1975. The stated reason for the repeal of the longevity pay resolution was t o eliminate "double compensation for firemen and policemen" i n light of the 1975 legislative action removing the 20 year l i m i - tation on longevity pay for firemen and policemen. A t the time the City repealed Resolution No, 4973, there was an existing collective bargaining agreement in effect. There were no negotiations with the firemen or Local /,8 t o delete the 20 year longevity provision from the contract. O n August 7, 1975, Local /I8 made formal protest t o the City of the repeal of the longevity pay provision. O n August 21, the City denied and rejected the protest. O n o r about September8 the parties agreed the issues relative t o t h i s case should be pursued through the courts t o determine the rights of the parties. It was agreed the signing of a new collective bargaining agreement in September 1976 would not constitute a waiver of protests and disputes relative t o the repeal of the longevity pay provision. Four issues are before t h i s Court upon appeal: 1 . Whether the City, by virtue of Resolution No. 4973 created contractual rights enuring to the benefit of i t s firemen. 2. Whether the repeal of Resolution No. 4973 was an unconstitutional breach of the collective bargaining agreement then i n effect. 3. Whether the repeal of Resolution No. 4973 was necessary t o eliminate double compensation to the firemen. 4. Whether the dismissal by the d i s t r i c t court of Counts I and I1 of p l a i n t i f f ' s complaint was error. The f i r s t issue concerns the question of whether a contract was created for the benefit of the firemen by the c i t y ' s adoption of Resolution No. 4973 concerning longevity pay. A companion question t o be answered in u C S Q Z " ~ ~ ? ~ ;*is' d-ssue is--whether the City had the authority t o repeal the ordinance i n light of the possible contract created? This precise issue i s a matter of f i r s t impression i n t h i s jurisdiction. The parties c i t e Bartels v. Miles City, 145 Mont. 116, 399 P.2d 768 (1965); State ex rel. Evans v. Fire Dept. Relief Assn., 138 Mont. 172, 355 P.2d 670 (1960); and Clarke v. Ireland, 122 Mont. 191, 199 P.2d 965 (1948), as controlling precedent in regard t o t h i s issue. This line of authority i s clearly dis- tinguishable from the instant case. I n a l l these cases, the employees had contributed moneys into a fund of a certain nature with the expectation of receiving a benefit therefrom. Such i s not the case here and therefore, w e do not rely on these cases. W e further hold that Stephens v. City of Billings, 148 Mont. 372, 422 P.2d 342 (1967) i s not controlling. In Stephens w e held that a seniority rule enacted by a c i t y ordinance could be repealed and no vested contract right was created for the benefit of certain c i t y employees. The fact situations i n Stephens and the instant case are admittedly similar; however, the seniority rule, a s adopted by the ordinance, expressly provided for alteration by appropriate action of the c i t y council. For t h i s reason, S tephens is distinguishable. The long standing general rule i s that the body which enacted an ordinance has the power t o repeal such ordinance. Wright v. City of Florence, 229 S.C. 419, 93 S.E.2d 215 (1956); City Council of Charleston v. Wentworth Street Baptist Church, 4 Strob. 306 (S.C. 1850). A specific grant of authority is not necessary t o repeal ordinances as the general rule implies that power unless otherwise provided. Wright v. City of Florence, supra; 6 McQuillin, Mun.Corp. (3rd Ed.), $ 21-10. This area of law i s summarized i n 6 McQuillin~Mun.Corp.(3rd "The power of repeal extends, generally speaking, t o a l l ordinances. Indeed, a municipal corporation cannot abridge i t s own legislative powers by the passage of irrevocable ordinances. The members of i t s legislative body are trustees for the public, and the nature and limited tenure of t h e i r office impress the ordinances enacted by them with l i a b i l i t y t o change. One council may not by an ordinance bind i t s e l f or i t s successors so as to prevent free legislation in matters of municipal government. Accordingly, i n the absence of a valid provision t o the contrary, a municipal council or assembly having the power t o legislate on, or exercise discretionary o r regulatory authority over, any given subject may exercise that power a t w i l l by enacting o r repealing an ordinance in relation t o the subject, Thus, the power of repeal extends to legislative enactments and, a f o r t i o r i , t o ordinances of an administrative character, a s , for example, an ordinance fixing the f i s c a l year of a municipal corporation. The power does not extend, how- ever, t o authorize impairment of a contract or deprivation of property without due process of law." I n addition to the limitation upon the right of repeal which impairs a contract or deprives one of property without due process of law, a third exception i s generally recognized. This exception exists where an ordinance has been enacted under a narrow limited grant of authority t o do a single designated thing i n the manner and a t the time prescribed by the legislature. In effect, no right of repeal exists a s t o an ordinance that constitutes the exercise of municipal power which is exhausted by i t s single exercise. Clearly an implied contract between the City and Local /I8 was created by Resolution No. 4973. A n offer t o pay longevity was made by the resolution. This offer was accepted by the firemen as evidenced by both the many years of diligent service provided and the incorporation of t h i s provision into subsequent collec- tive bargaining agreements. The stated purpose of the resolution was "to induce a longer tenure of service" by the firemen. That purpose was accomplished. During the 20 year period that followed passage of the resolution, numerous firemen attained the required 20 years of service and became entitled t o the increased pay. Any contention that firemen were not induced t o serve longer terms by the longevity provision is simply not correct. Once the determination is made that a contract was created by Resolution No. 4973, the next question that must be answered is the effect of the repeal of the resolution. A virtually identical issue was discussed i n CYty of Owensboro v. Board of Trustees, 301 Ky. 113, 190 S.W.2d 1005 (1945). In that case an ordinance was passed creating a c i v i l service system for c i t y employees. Several years l a t e r the c i v i l service ordinance was repealed by a second ordinance. Thereafter, the ordinance repealing the c i v i l service ordinance was repealed; The c i t y filed a declaratory judgment action t o determine the status of c i t y employees who were hird or employed by the c i t y during t h i s period. The Kentucky Court of Appeals found that a contract was created by the original c i v i l service ordinance. The rights acquired by c i t y employees who were employed during the operative l i f e of the c i v i l service ordinance could not be affected by the subsequent lawful repeal of the ordinance. In C i t y of Owensboro the court stated: "* * * Consequently, the repealing ordinance annulled, abrogated, and put an end t o the Civil Service Ordinance. It must be admitted, however, that the repeal of it * * * did not and could not affect the vested rights and the inviolable contract of the employees who became such, and qualified hnder the Civil Service Ordinance within its operative life." 109 S.W.2d 1008. Similar r e s u l t s were reached by t h e Kentucky courts i n Hopwood v. City of Paducah, (Ky.1968), 424 S.W.2d 134; R i t t e v. City of Covington, 308 Ky. 792, 215 S.W.2d 980 (1948). W e find t h i s authority persuasive i n the instant case and therefore hold the repeal of Resolution No. 4973 by the City was effective. However, t h i s repeal has absolutely no e f f e c t on the vested contract r i g h t s t o longevity acquired by Great F a l l s firemen during the operative l i f e of the ordinance. A l l firemen who commenced employment a s Great F a l l s firemen o r served i n such a capacity during the e f f e c t i v e period of the ordinance have a vested contractual r i g h t . I n i t s second issue Local #8 complains the City's repeal of Resolution No. 4973 is an unconstitutional enactment which has the e f f e c t of impairing the obligations of the contract between the City and Local #8. Resolution No. 4973 has been incorporated by reference i n t o a l l collective bargaining agree- ments between the p a r t i e s including the one i n e f f e c t a t the time the resolution was repealed. A r t . 11, Section 31, 1972 Montana Constitution s t a t e s t h a t no "law impairing the obligation of contracts * * * s h a l l be passed by the legislature." Constitutional provisions pro- h i b i t i n g the impairment of contractual obligations apply t o municipal ordinances and resolutions. 16 C. J.S. Constitutional Law, $278, p. 1280, s t a t e s : "Ordinances and resolutions passed by the municipal subdivisions of a s t a t e i n pursuance of delegated l e g i s l a t i v e authority of the s t a t e a r e laws within the meaning of constitutional provisions and void i f they impair the obligations of contracts." * *" By repealing Resolution No. 4973, incorporated i n t o the contract between the City and Local #8, the City has attempted t o change the terms of t h i s contract. Such a change v i o l a t e s the foregoing constitutional provision a s well a s the Consti- tution of the United States. This contract between a union and a governmental e n t i t y i s e n t i t l e d t o the same protection of t h e federal and Montana Constitutions t h a t is afforded a contract between individuals. S t a t e ex r e l . Evans v. F i r e Dept. Relief Assn., supra; Clarke v. Ireland, supra; S t a t e ex rel. S t a t e Savings Bank v. Barret, 25 Mont. 112, 63 P. 1030 (1901). W e therefore hold the resolution repealing Resolution No. 4973 i s unconstitutional a s applied t o firemen covered by the contract i n e f f e c t a t the time of the repeal. Appellant's t h i r d issue deals with t h e City's contention the repeal of Resolution No. 4973 was necessary t o eliminate double compensation f o r firemen i n l i g h t of the 1975 l e g i s l a t i v e action removing the 20 year limitation on longevity pay f o r f i r e - men. This i s a f a l s e issue i n t h i s case. The f a c t s c l e a r l y show firemen employed by the City of Great F a l l s have a t a l l times been paid i n excess of the statutory minimum plus longevity. Therefore, a change i n the length of the longevity allowed by s t a t u t e has no e f f e c t on firemen involved herein. Appellant's f i n a l issue deals with the propriety of the dismissal of Counts I and I1 of appellant's complaint. The standard f o r reviewing rulings on motions t o dismiss was recently discussed i n Hasbrouck v. Krsul, 168 Mont. 270, 272, 541 P.2d 1197 (1975), where t h i s Court stated: "In judging the correctness of t h a t order, we apply the s t r i c t standard f o r Federal Rule 12, a f t e r which ~ o n t a n a ' s Rule 12, M.R.Civ.P. was patterned. I n Conley v. Gibson, 355 U.S. 41, 45,46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80,84, it is said: " * * a complaint should not be dismissed for f a i l u r e t o s t a t e a claim unless it appears beyond doubt t h a t the p l a i n t i f f can prove no s e t of f a c t s i n support of h i s claim which would e n t i t l e him t o r e l i e f . "I Further discussion i s found i n Duffy v. Butte Teachers Union, 168 Mont. 246, 252, 541 P.2d 1199 (1975), where t h e Court said: "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 can be granted, Rule 12(b)(6), M.R. Civ.P., i s equivalent t o a demurrer under former c i v i l procedure. Payne v. Mountain States Tel. and Tel. Co., 142 Mont. 406, 409, 385 P.2d 100. A motion t o dismiss admits t o a l l f a c t s well pleaded and i n considering the motion the material allegations of the pleading attacked a r e taken a s true. Deich v. Deich, 136 Mont. 566, 585; 323 P.2d 35. Where a complaint s t a t e s f a c t s s u f f i c i e n t t o c o n s t i t u t e a cause of action upon any theory, then the motion t o dismiss must be overruled. Magelo v. Roundup Coal Mining Co., 109 Mont . 293, 300, 96 P. 2d 932. However, when a complaint alleges f a c t s and, assuming the f a c t s a r e t r u e , there s t i l l is no claim f o r r e l i e f s t a t e d under any theory, a motion t o dismiss must be granted." 168 Mont. 252. W e expressly refuse t o r u l e upon the merits of this case. However with the foregoing standard f o r review i n mind, we hold the d i s t r i c t court erred when it dismissed Counts I and I1 of appellant's complaint. Counts I and I1 a r e simply claims f o r r e l i e f on the basis of a contract between the City and the firemen. Resolution of appellant's previous issues makes it , P abundantly c l e a r appellant's complaint is not so defective a s t o appear beyond a doubt t h a t appellant can prove no s e t of f a c t s i n support of i t s claim which would e n t i t l e it t o r e l i e f . W e reverse* the ruling of the d i s t r i c t court dismissing Counts I and I1 of the complaint and remand t h i s matter f o r t r i a l on the merits. Justice. ............................................. M r . Chief Justice Paul G. Hatifield did not participate in this case.