Title: DUFFY v BUTTE TEACHERS UNION

State: montana

Issuer: Montana Supreme Court

Document:

No. 13038 I N T H E SUPREME C O U R T O F T H E STATE O F MONTANA CARMIE R. D U F F Y and D. COSETTE DUFFY, P l a i n t i f f s and Appellants, BUTTE TFACHERS ' UNION, NUMBER 332, AFL-CIO ; MIKE McCARTHY; EDWARD HEARD; M O N T A N A PHYSICIANS' SERVICE, a corporation; GIL HOXMER; S C H O O L DISTRICT NUMBER ONE O F SILVER BOW COUNTY, M O N T A N A , a p o l i t i c a l subdivision of t h e S t a t e of Montana and body public and corporate; BOARD O F TRUSTEES O F S C H O O L DISTRICT N U M B E R ONE O F SILVER BOW COUNTY, M O N T A N A ; Defendants and Respondents. Appeal from: D i s t r i c t Court of t h e Second J u d i c i a l D i s t r i c t , Honorable W. W. Lessley, Judge presiding. Counsel of Record: For Appellants : Poore, McKenzie, Roth, Robischon and Robinson, Allen R. McKenzie argued, Butte, Montana For Respondents: Henningsen, Purcell & Genzberger, Butte, Montana Robert McCarthy argued, Butte, Montana Hughes, Bennett & Cain, Helena, Montana Alan F. Cafn argued, Helena, Montana John G. Winston, County Attorney, Butte, Montana John J. Parker, Deputy County Attorney, argued, Butte, Montana Submitted: September 22, 1975 Decided: GrT31 I<jj!j Filed : 6CF 3 1 1975 Clerk M r . J u s t i c e Gene B. Daly delivered the Opinion of the Court. This is an appeal from a judgment t h a t granted a l l defendants' motions 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 could be granted, without leave t o r e f i l e . P l a i n t i f f s f i l e d t h e i r o r i g i n a l complaint i n the d i s t r i c t court, Lewis and Clark County, September 23, 1974, against a l l defendants except School D i s t r i c t Number One of Silver B o w County, Montana and i t s Board of Trustees. The complaint charges defendants with conspiracy t o v i o l a t e c e r t a i n r i g h t s of p l a i n t i f f s . Con- solidated motions asking f o r (a) a change of venue, (b) dismissal 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, and (c) a more d e f i n i t e statement a s t o the conspiracy, together with accompanying b r i e f s , were f i l e d by defendants. The venue was changed t o the Second J u d i c i a l D i s t r i c t , Silver B o w County, whereupon p l a i n t i f f s disqualified both d i s t r i c t judges of the Second J u d i c i a l D i s t r i c t . Judge W. W. Lessley, Thirteenth J u d i c i a l D i s t r i c t , assumed jurisdiction. A n amended complaint was f i l e d by p l a i n t i f f s which added defendants School D i s t r i c t Number One of Silver B o w County and the Board of Trustees of School D i s t r i c t Number One, Silver Bow County. Defendants, i n turn, amended t h e i r b r i e f s i n support of the motion t o dismiss. A l l motions were heard by the court. O n April 22, 1975, the d i s t r i c t court entered an order and judgment which granted t h e motions 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, t o a l l defendants. This appeal is from that judgment. The amended complaint pleads t h e corporate capacity of Montana physicians' Service (MPS); the position of the defendant Butte ~ e a c h e r s ' Union Number 332, AFL-CIO (Union), a s representing teachers employed by School D i s t r i c t Number One of Silver B o w County (School D i s t r i c t ) ; and t h e position of Edward Heard and Mike McCarthy a s o f f i c e r s of said Union. Defendant G i l Hoxmer i s an agent of Montana Physicians' Service. P l a i n t i f f s a r e not members of the Union. Pro f o r m allegations a r e included with respect t o School D i s t r i c t Number One of Silver B o w County and its Board of Trustees. It alleges t h a t f o r a number of years contracts existed between t h e Union and M P S providing group medical, surgical and hospital benefits and t h a t pursuant t o these contracts the School D i s t r i c t made contributions t o M P S a t i t s Helena, Montana o f f i c e s on behalf of a l l teachers. That contributions were made on behalf of p l a i n t i f f s , who a r e not members of s a i d Union, t o M P S and t h a t benefits were provided t o p l a i n t i f f s i n accordance with the contract between the Union and M P S a t r a t e s i d e n t i c a l t o those established f o r a l l teachers. Further t h a t a f t e r September 1972, the Union directed M P S t o maintain separate charge h i s t o r i e s f o r nonunion teachers and union teachers. That p r i o r t o September 1973, t h e nonunion teachers "were advised" t h a t they would be separated and segregated from the union teachers f o r health insurance purposes and t h a t they would have t o secure t h e i r own insurance. P l a i n t i f f s chose t o join a group composed of school dis- t r i c t administrators and other nonunion teachers. The health insurance r a t e s f o r the union group was $39.99 per month and f o r t h e administrator nonunion group was $47.65, f o r i d e n t i c a l coverage. The School D i s t r i c t contributed $35 per month t o both union and nonunion teachers. The n e t difference payable by the teachers was $12.65 f o r nonunion teachers and $4.99 f o r union teachers. I I In the amended complaint a provision of t h e Master Agreement" entered i n t o between the School D i s t r i c t and t h e Union f o r the period e f f e c t i v e September 1, 1973, i s s e t f o r t h i n haec verba. This section of t h e agreement provides t h a t on o r before April 1, the Union s h a l l arrange for a medical, surgical and hospital plan f o r the benefit of i t s membership and t h e School D i s t r i c t w i l l make contribution of $35 per month per member teacher toward t h e cost of said plan and a r m g e f o r payroll deductions. P l a i n t i f f s a l l e g e t h a t prior t o July 1973 defendants Union, MPS and Hoxmer entered i n t o a conspiracy t o force p l a i n t i f f s t o become members of t h e Union by i n s i s t i n g on a contract between the Union and - M P S providing f o r discriminatory and excessive r a t e s t o be charaged p l a i n t i f f s and other nonunion teachers. The agreement between the Union and M P S i s alleged t o be unlawful by reason of i t s violation of "Rule 36" of the Master Agreement f o r f a i l u r e by the Union t o w r i t e specifications and receive sealed bids f o r the medical and surgical coverage f o r the Union members; instead t h e Union negotiated a contract of coverage f o r i t s members t h a t discriminated against p l a i n t i f f s and others s i m i l a r l y , situated. The amended complaint further alleges t h i s is i n violation of sections 11-1024, 75-6118, 75-6120, 64-303 and 40-3509, R.C.M. 1947; the due process clause of the F i r s t and Fourteenth Amendments t o the United States Constitution; and, A r t i c l e IT, Section 7, 1972 Montana Constitution. It further alleges t h a t p l a i n t i f f s a r e , i n addition t o not being members of t h e Union, taxpayers of Silver Bow County; t h a t the agreement between the School D i s t r i c t and the Union, which c a l l s f o r a contribution on behalf of a l l teachers i n the amount of $35 per month, i s i l l e g a l i n violation of section 11-1024, and asks t h a t these contributions be repaid t o Silver B o w County (not a party t o t h i s action) by t h e Union and MPS t o the extent they exceed $120 per year per teacher. I n the prayer, p l a i n t i f f s ask t h a t only MPS be required t o repay such amounts. The law on conspiracy i s r e l a t i v e l y well s e t t l e d i n Montana. In 1 5 A C.J.S., Conspiracy, $ 5 l ( 1 ) and 1 ( 2 ) , it is said: 11 9 l ( 1 ) . A c i v i l conspiracy i s a combination of two o r more persons by concerted action t o accomplish an unlawful purpose, o r t o accomplish some purpose not i n i t s e l f unlawful by unlawful means. I I 5 l ( 2 ) . "The e s s e n t i a l elements required t o e s t a b l i s h a c i v i l conspiracy a r e the same a s those required t o establish a criminal conspiracy. In general, t o con- s t i t u t e a c i v i l conspiracy there must be: (1) Two or more persons, and f o r t h i s purpose a corporation i s a person; (2) an object t o be accomplished; (3) a meeting of minds on the object o r course of action; (4) one o r more unlawful overt a c t s ; and (5) damages a s the proximate r e s u l t thereof. + r *I1 In 15A C.J.S., Conspiracy, 2, i t i s further noted t h a t i f the object of an alleged "conspiracy" i s lawful, and the means used t o a t t a i n t h a t object a r e lawful, there can be no c i v i l action f o r conspiracy. The foregoing is t r u e even though damage may r e s u l t t o the p l a i n t i f f s and even though defendants may have acted with a malicious motive. I f such were not the r u l e , obviously many purely business dealings would give r i s e t o an action i n t o r t on behalf of one who may have been adversely affected. Prosser, Law of Torts, 4th Ed., p. 293, notes t h a t it is not r e a l l y the conspiracy which gives r i s e t o a r i g h t of action, but t h e t o r t s which may be committed i n furtherance thereof. Each of these actions would support a claim f o r r e l i e f i t s e l f - - - the only function served by the action of conspiracy being t o connect nonacting but participating members who would not ~ t h e r w ~ s e be l i a b l e t o the one damaged. 11 1 < . ; ' c f ; The g i s t of the action i s not the conspiracy charged, but the t o r t working damage 1 t o the p l a i n t i f f . It is only where means a r e employed, o r purposes a r e accomplished, which a r e themselves t o r t i o u s , that t h e conspirators who have not acted but have promoted the a c t w i l l be held l i a b l e . " 'ro sustain t h e i r action here, then, p l a i n t i f f s must a l l e g e a t o r t committed by one of the alleged conspirators. The decisions of t h i s Court a r e i n accord with the fore- going. In Mustang Beverage Co., Inc. v. Jos. ~ c h l i t z rew wing Co., 162 Mont. 243, 251, 511 P.2d 1, the Court held: "'* * * a combination of individuals f o r t h e i r j o i n t benefit does not c o n s t i t u t e a conspiracy * * * the actionable element of conspiracy i s t h e wrong done t o the p l a i n t i f f s , not t h e combination of persons constituting t h e conspiracy. 1 I t In an e a r l y case t h i s Court noted t h a t freedom of contract is the general r u l e and t h a t persons may grant orwithEio,ld, t h e i r business o r patronage from others without incurring l i a b i l i t y therefor. In Empire Theatre Co. v. Cloke, 53 Mont. 183, 193, 163 P. 107, the Court holding a combination t o do a lawful thing by lawful means i s no conspiracy, said: I I Every person has the r i g h t , singly and i n combination with others, t o deal o r refuse t o deal with whom he chooses; t o reach h i s decision i n t h a t , a s i n a l l other matters, upon o r without good reason; t o regard a s un- friendly a l l those who, with or without j u s t i f i c a t i o n , refuse t o co-operate or sympathize. I I I n Empire Theatre the Court approved the use of a boycott by members of a union against an employer. The general r u l e s e t out i n C.J.S. was approved i n Biering v. Ringling, 74 Mont. 176, 196, 240 P. 829, where the un- lawful a c t was found t o be a plan t o defraud the p l a i n t i f f : 11 1 A conspiracy i s a combination of two o r more persons by some concerted action t o accomplish a criminal o r unlawful purpose o r t o accomplish a purpose, not i n i t s e l f criminal o r unlawful, by criminal o r unlawful means. I I t See also: Mining Securities Co. v. Wall, 99 Mont. 596, 45 P.2d 302; Lindsay & Co. v. Mont. Federation of Labor, 37 Mont. 264, 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., is equivalent t o a demurrer under former c i v i l procedure. Payne v. Mountain States Tel. & 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 con- s t i t u t e a cause of action upon any theory, then t h e motion t o dismiss must be overruled. Nlgelo v. Koundup Coal Mining Co., 109 Nont. 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 true,there s t i l l i s 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. Reducing the well pleaded f a c t s t o t h e i r essence and discarding the l e g a l conclusions, the amended complaint seeks r e l i e f because a f t e r September 1973, p l a i n t i f f s a s nonunion teachers were not permitted by the Union t o remain a s members of the group f o r which the Union contracted f o r health benefits f o r its members from MPS. The School D i s t r i c t or Board of Trustees a r e not included i n the alleged conspiracy. The i l l e g a l a c t inserted by p l a i n t i f f s t o j u s t i f y a t o r t t o r e s u l t i n a conspiracy was f a i l u r e of the Union, under i t s contract with the Board of Trustees f o r t h e benefit of the Union members, t o draw specifications and receive bids f o r t h e i r health coverage. A procedural variation from t h e i r own contract would not be unlawful even i f considered a breach by a party t o the contract who would have standing t o complain. P l a i n t i f f s admit they a r e not Union members and have no standing i n r e l a t i o n t o a contract entered i n t o by the Union f o r the benefit of i t s members. The Union did precisely what it had contracted t o do. There is no l e g a l reason why the Union was required t o permit p l a i n t i f f s t o be members of i t s group. A s t o t h e r o l e of M P S i n t h e transaction alleged i n the complaint, i t was merely a s e l l e r of services. M P S was not a party t o the contract between the Union and the School D i s t r i c t of which p l a i n t i f f s complain, i t merely sold c e r t a i n benefits t o the Union p e r i t s order and other benefits to other groups of School D i s t r i c t employees. Since freedom of contract i s the general r u l e there i s no reason why M P S cannot contract f o r t h e furnishing of services with whatever groups it chooses and charge whatever r a t e s i t f e e l s a r e j u s t i f i e d t o those groups with which it contracts. Great Northern U. Co. v. Public Ser. Com., 88 Mont. 180, 228, 229, 293 P. 294, reads i n part: ²° he general r i g h t to make a contract i n r e l a t i o n t o h i s business i s part of the l i b e r t y of the individual protected by the 14th Amendment of the federal constitution' (Lechner v. N e w York, 198 U.S. 45, 49 L.Ed.937, 25 Sup.Ct.Rep.539), and t h a t ' t h e r i g h t of the owner t o f i x a price a t which h i s property s h a l l be sold o r used i s an inherent a t t r i b u t e of the property i t s e l f ' (State Freight Tax Case, 15 Wall. (U.S.) 232, 278, 21 L.Ed. 146, 163) Jc Jr d c . " See also: Hein v. Fox, 126 Mont. 514, 254 P.2d 1076 (1953). A s noted heretofore, when p a r t i e s merely do what they have a l e g a l r i g h t t o do, and when t h e means used a r e not unlawful-- an allegation i n a complaint t h a t the action amounts t o a ~f ~ o n s p i r a c y " gives no r i g h t of action t o anyone, even i f the p a r t i e s agreed among themselves t o take such action. P l a i n t i f f s next use the violation of section 11-1024, R.C.M. 1947, a s an unlawful a c t t o supply the t o r t f o r t h e con- spiracy, That section d i r e c t s departments, agencies, e t c . of the s t a t e of Montana, and a l l counties, c i t i e s and towns t o contract f o r group health insurance when requested t o do so by two-thirds of t h e i r employees and t o make limited ($10.00) con- tributions t o the cost of such coverage. A t the time School D i s t r i c t Number One contributed $35 t o the cost of a l l teachers' group health insurance there were two opinions of the attorney general of Montana holding t h a t n e i t h e r the grant of power t o enter i n t o and contribute t o the cost of group hospital and medical insurance f o r the benefit of employees, nor the limitation on the amount of such contribution contained i n section 11-1024, were applicable t o school d i s t r i c t s but t h e school d i s t r i c t s had the authority and power t o expend school funds f o r group insurance f o r teachers and employees a s part of the s a l a r i e s and compensation of the teachers and employees. 27 Opinions of the Attorney General No. 49; 30 Opinions of the Attorney General No. 6. While opinions of the attorney general a r e not binding upon t h i s Court, the Board of Trustees of School D i s t r i c t Number 3ne and the Union were e n t i t l e d t o r e l y on and a c t i n accordance with those opinions when they negotiated t h e 1973-1974 Master Agreement. O n February 4, 1974, months a f t e r the Master Agreement was executed, the attorney general issued another opinion i n which he held the previously mentioned two attorney general opinions "were no longer applicable" i n view of t h i s c o u r t ' s decision i n Teamsters v. Cascade Co. Sch.Dist. No. 1, 162 Mont. 277, 511 P.2d 339. 35 Opinions of the Attorney General No. 69. The e f f e c t of t h a t attorney general opinion was short lived. The Montana Legislature amended section 11-1024, e f f e c t i v e March 12, 1974, Montana Session Laws 1974, Chap. 188, by adding t h i s sentence: 11 Provided, however, that f o r employees of elementary and high school d i s t r i c t s premium contributions a r e not subject t o the ten d o l l a r ($10) limitation of t h i s section. " W e hold the $35 contribution was not unlawful. I f it were unlawful it would not help t o e s t a b l i s h a conspiracy under the f a c t s here a s the party t h a t would have violated the section by agreeing t o make, and did make t o a l l p a r t i e s , a payment not authorized by law was the School D i s t r i c t . The violation of other s t a t u t e s pleaded by p l a i n t i f f s have t o do with teachers' r i g h t s , union practices, unfair practices and the l i k e , which have l i t t l e relevancy t o the issue here, lacking a conspiracy. The argument i n b r i e f a s it pertains t o discrimination i n regard t o conditions of employment by f a i l u r e t o belong t o the Union, contrary t o Benson v. School D i s t . No. 1 of Silver B o w County, 136 Mont. 77, 344 P.2d 177 (1959), i s without merit here. Benson was against the school d i s t r i c t f o r contracting with the Union f o r a "security clause" i n the master contract which required teachers t o join o r lose salary benefits. The judgment of the d i s t r i c t court i s affirmed. i ' W e Concur: / d ' Justices.