Title: JOHNSTON v K T MANUFACTURING

State: montana

Issuer: Montana Supreme Court

Document:

NO. 80-376 IN THE SUPREME COURT OF THE STATE OF MONTANA 1981 MALAN F. JOHNSTON, Plaintiff and Appellant, -vs- K & T MANUFACTURING, INC., Defendant and Respondent. Appeal from: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Robert H. Wilson, Judge presiding. Counsel of Record: For Appellant: Calton Law Firm, Billings, Montana For Respondent : Woods and Moe, Billings, Montana Filed: Submitted on Briefs: January 14, 1981 Decided: March 11, 1981. MAR I1 1 % - M r . J u s t i c e Fred J. Weber d e l i v e r e d t h e Opinion of t h e Court. P l a i n t i f f Malan F. Johnston (Johnston) appeals from t h e d e c i s i o n of t h e D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l ~ i s t r i c t , Yel.lowstone County, denying h i s claim f o r wages, p e n a l t i e s , a t t o r n e y fees and c o s t s . W e a f f i r m t h e d e c i s i o n of t h e D i s t r i c t Court. Johnston e n t e r e d i n t o an o r a l c o n t r a c t of employment w i t h K & T Manufacturing, Inc. (K & T) , a Wyoming-based c o r p o r a t i o n , on November 7, 1978. Johnston was h i r e d t o f l y K & T ' s e x e c u t i v e jet a i r p l a n e . There was no e x p r e s s t e r m of employment. I n c i d e n t a l expenses i n c u r r e d by Johnston i n t h e performance of h i s d u t i e s w e r e p a i d by Johnston, and he was reimbursed by K & T a f t e r he submitted expense r e c e i p t s . Johnston submitted a set of p e r i o d i c expense r e c e i p t s total-ing $349.52 j u s t p r i o r t o t h e termination of h i s employment. Johnston was f i r e d on September 1 4 , 1979. On September 15, 1979, he r e c e i v e d a check f o r t h e f u l l amount of wages owed him by K & T. F i v e days l a t e r , September 20, Johnston f i l e d s u i t a g a i n s t K & T. Johnston sued f o r $500 f o r unused v a c a t i o n t i m e , $720.67 f o r employment expenses, $1,000 i n severance pay, $2,063.77 i n s t a t u t o r y p e n a l t i e s f o r K & T ' s f a i l u r e t o pay money due, $2,167 i n a t t o r n e y f e e s , and c o s t s of s u i t . On J u l y 22, 1980, t h e D i s t r i c t Court, s i t t i n g w i t h o u t a jury, found t h a t J o h n s t o n ' s a l l e g a t i o n s w e r e unsupported by s u f f i c i e n t c r e d i b l e evidence, and t h a t n e i t h e r p a r t y was e n t i t l e d t o a t t o r n e y f e e s o r c o s t s . (K & T had counterclaimed f o r damages f o r J o h n s t o n ' s withholding of t h e keys t o t h e a i r p l a n e a f t e r h i s d i s c h a r g e . ) The Court a l s o found t h a t a t t h e t i m e of h i s d i s c h a r g e Johnston was p a i d a l l sums due him from K & T except f o r t h e d i s p u t e d expense claims which were paid on December 18, 1979. K & T paid Johnston $171.46 on t h a t date. This was t h e p o r t i o n of t h e expense r e c e i p t s submitted by Johnston t h a t K & T found t o be reasonable. Johnston argues t h a t a s a r e s u l t of t h e payment of t h e $171.46, K & T should be required t o pay s t a t u t o r y p e n a l t i e s and a t t o r n e y f e e s . Johnston's f i r s t i s s u e i s whether t h e D i s t r i c t Court e r r e d i n n o t holding K & T l i a b l e f o r s t a t u t o r y p e n a l t i e s a s a r e s u l t of K & T ' s f a i l u r e t o pay wages and monies due. The evidence showed t h a t on t h e day of Johnston's discharge K & T owed a then undetermined sum f o r expenses incurred and paid by Johnston. The evidence f u r t h e r showed t h a t K & T paid $171.46 t o Johnston with a December 18, 1979, check. The check bore t h e n o t a t i o n " f u l l expenses due." Johnston claims t h a t t h i s payment was f o r "wages" a s t h a t term i s defined by s e c t i o n 39-3-201(5), MCA, which s t a t e s : "'Wages' includes any money due an employee from t h e employer o r employers, whether t o be paid by t h e hour, day, week, semimonthly, monthly o r yearly and s h a l l include bonus, piecework, t i p s and g r a t u i t i e s of any kind." Johnston argues t h a t reimbursement was n o t made t o him within s i x days a s required under s e c t i o n 39-3-205, MCA, which e s t a b l i s h e s when wages are t o be paid i f an employee i s separated from employment p r i o r t o payday. Johnston f u r t h e r contends t h a t because reimbursement was n o t made within s i x days, t h e penalty of s e c t i o n 39-3-206, MCA, should have been imposed. That s e c t i o n i n p e r t i n e n t p a r t provides: "Penalty f o r f a i l u r e t o pay wages a t t i m e s speci- f i e d i n law . . . A penalty s h a l l a l s o be assessed a g a i n s t and paid by such employer and become due such employee a s follows: a sum equivalent t o t h e f i x e d amount of 5% of t h e wages due and unpaid s h a l l be assessed f o r each day, except Sundays and l e g a l holidays, upon which such f a i l u r e continues a f t e r t h e day upon which such wages were due, ex- c e p t t h a t such f a i l u r e s h a l l n o t be deemed t o continue more than 20 days a f t e r t h e d a t e such wages were due." W e f i n d t h a t the $171.46 payment was n o t wages under s e c t i o n 39-3-201(5), MCA, o r s e c t i o n 39-3-206, MCA. Such payment was an "indemnification of employee" r e f e r r e d t o i n s e c t i o n 39-2-701 (1) , MCA. There i s no s t a t u t o r y penalty f o r t h e f a i l u r e t o indemnify an employee f o r expenditures covered by t h a t s e c t i o n . W e hold t h a t t h e penalty f o r f a i l u r e t o pay wages under s e c t i o n 39-3-206, MCA, does n o t apply t o t h e $171.46 payment. The next i s s u e presented by Johnston i s whether t h e t r i a l c o u r t e r r e d i n n o t finding K & T l i a b l e f o r Johnston's a t t o r n e y f e e s and c o s t s under s e c t i o n 39-3-214, MCA: "Court c o s t s and a t t o r n e y s ' f e e s . (1) Whenever it i s necessary f o r t h e employee t o e n t e r o r main- t a i n a s u i t a t law f o r t h e recovery o r c o l l e c t i o n of wages due a s provided f o r by t h i s p a r t , a re- s u l t i n g judgment must include a reasonable a t t o r n e y ' s f e e i n favor of t h e successful p a r t y , t o be taxed a s p a r t of t h e c o s t s i n t h e case. " ( 2 ) Any judgment f o r t h e p l a i n t i f f i n a proceeding pursuant t o t h i s p a r t must include a l l c o s t s rea- sonably incurred i n connection with t h e proceeding, including a t t o r n e y s ' f e e s . " A s previously s t a t e d , t h e $171.46 payment was not a payment f o r wages. I n a d d i t i o n , Johnston d i d not obtain a judgment f o r wages due so a s t o t r i g g e r t h e s t a t u t o r y requirement f o r an award of reasonable a t t o r n e y f e e s and c o s t s . I n f a c t t h e r e was no judgment f o r t h e p l a i n t i f f a s required under t h e above code s e c t i o n . Johnston has f a i l e d t o meet t h e s t a t u t o r y requirements f o r a t t o r n e y f e e s o r c o s t s . The D i s t r i c t Court decided a g a i n s t Johnston on both i s s u e s . The decision of t h e D i s t r i c t Court i s affirmed. W e concur: ' . Chief J u s t i c e