Title: RIERSON v STATE

State: montana

Issuer: Montana Supreme Court

Document:

N o . 79-32 I N THE SUPREME C O U R T O F THE STATE O F M O N T A N A 1980 A. C. RIERSON, P l a i n t i f f and Appellant, T H E STATE O F IIIONTANA, AND BOARD O F ADMINISTRATION O F PERS, Defendant and Respondent. Appeal from: D i s t r i c t Court of t h e F i r s t J u d i c i a l D i s t r i c t , I n and f o r t h e County o f Lewis and Clark. Honorable Gordon Bennett, Judge p r e s i d i n g . Counsel of Record: For Appellant: Conner, Baiz and Olson, Great F a l l s , Montana Dennis Conner argued, Great F a l l s , Montana For Respondent: Hugh, Bennett, Kellner and S u l l i v a n , Helena, Montana John F. S u l l i v a n argued, Helena, Montana Submitted: February 26, 1980 Urn%& 2 , ; & - Clerk M r . J u s t i c e John Conway Harrison d e l i v e r e d t h e Opinion of t h e Court. Appellant, A 1 ~ i e r s o n , p e t i t i o n e d t h i s Court f o r rehear- i n g of h i s o r i g i n a l appeal, i n which we affirmed t h e D i s t r i c t Court order dismissing h i s o r i g i n a l and amended p e t i t i o n f o r j u d i c i a l review of an a d m i n i s t r a t i v e agency decision. Re- hearing was granted, and t h e cause submitted on b r i e f s . Rierson's case was commenced i n D i s t r i c t Court a s an a c t i o n f o r j u d i c i a l review of a Board of Administration d e c i s i o n which denied Rierson's claim f o r a d d i t i o n a l re- tirement b e n e f i t s . The p e t i t i o n f o r review w a s f i l e d on January 11, 1978, b u t t h e r e was no subsequent s e r v i c e on t h e Board. A n "amended complaint" w a s served on t h e Board over a year later on May 29, 1979. The Board f i l e d a motion t o dismiss Rierson's complaint on t h e grounds t h a t it d i d n o t comply with t h e "prompt s e r v i c e " requirement of t h e Adminis- t r a t i v e Procedure Act. Section 2-4-702 ( 2 ) ( a ) , MCA. The D i s t r i c t Court granted t h e motion t o dismiss, and Rierson appealed t o t h i s Court. I n an opinion dated A p r i l 1, 1980, w e affirmed t h e D i s t r i c t Court f i n d i n g t h a t t h e s i x t e e n and one-half month delay i n serving n o t i c e upon t h e Board was n o t reasonable under t h e f a c t s of Rierson's case. M r . J u s t i c e Sheehy a r - gued i n h i s d i s s e n t t h a t t h e Board d i d n o t have s u b j e c t matter j u r i s d i c t i o n over two of Rierson's t h r e e claims, and s i n c e t h e Board d i d n o t have the a u t h o r i t y t o decide c o n s t i - t u t i o n a l i s s u e s o r t o r t i s s u e s a g a i n s t i t s e l f , ~ i e r s o n ' s p e t i t i o n should be considered one f o r independent r e l i e f t o which t h e "prompt s e r v i c e " requirement would n o t apply. M r . J u s t i c e Daly joined i n t h e d i s s e n t i n g opinion. O n ~ p r i l 11, 1980, Rierson p e t i t i o n e d t h i s Court f o r rehearing based on the position taken by Justices Sheehy and Daly in the dissent. In 1971 the responsibility for the administration of the highway patrol retirement system was transferred from the ~ighway Patrolmen's Retirement Board to the Board of Administration of the Public Employees' Retirement System. Until 1971 a retiring patrolman with more than twenty-five years of service could receive retirement benefits in ex- cess of one-half regular pay. When the responsibilities for the patrolmen's retirement system were transferred, an attorney for the Board of Administration interpreted this practice to be in violation of sections 31-209 and 31-213, R.C.M. 1947. This interpretation was adopted as Board policy on April 21, 1972, and applied prospectively so that patrol- men retiring after April 21 could receive a maximum of one- half pay even if they continued on the job after their twenty-fifth year of service. Rierson retired at the end of his twenty-five years of service on April 8, 1974. Nearly two years later on March 18, 1976, Rierson's attorney demanded an adjustment of Rierson's retirement benefits. In that demand letter Rierson's attorney noted that "a suit will be filed no later than April 9, 1976", and further that, "[tlime is of the es- sence in that the Statute of Limitations is about to run in this matter." The Board responded by suggesting that Rierson avail himself of administrative remedies since the Board had adopted contested case procedures. By a letter dated April 6, Rierson formally requested an administrative hearing before the Board. A hearing was granted and held on July 15, 1976. At the conclusion of that hearing, Rierson's attorney was directed to submit a brief in support of Rierson's p o s i t i o n by August 9, 1976. N o b r i e f w a s forthcoming, and a f t e r s e v e r a l months had elapsed, t h e Board s e n t a l e t t e r t o Rierson's a t t o r n e y advising him t h a t a d e c i s i o n would be made with o r without a b r i e f . Nearly e i g h t months a f t e r t h e hearing, on March 11, 1977, Rierson's b r i e f was submitted. I n h i s b r i e f Rierson claimed t h a t he w a s e n t i t l e d t o a d d i t i o n a l b e n e f i t s because of due process and equal protec- t i o n v i o l a t i o n s and on t h e grounds of promissory estoppel. The hearings examiner responded t o a l l t h r e e claims i n t h e proposed f i n d i n g s of f a c t , conclusions of law and an order denying Rierson a d d i t i o n a l b e n e f i t s on August 25, 1977. The proposed d e c i s i o n was adopted by t h e Board, and Rierson w a s n o t i f i e d of t h e d e c i s i o n on December 12, 1977. O n January 11, 1978, Rierson's a t t o r n e y f i l e d a p e t i - t i o n f o r j u d i c i a l review i n t h e D i s t r i c t Court. Notice was not given t o t h e Board of Rierson's p e t i t i o n . N o f u r - t h e r a c t i o n was taken by Rierson f o r s i x t e e n and one-half months. Then, on May 21, 1979, Rierson f i l e d an "amended complaint" which was served on t h e Board on May 29, 1979. This was t h e Board's f i r s t n o t i c e of any j u d i c i a l proceed- i n g i n t h e case. The Board moved t o dismiss both t h e o r i g i n a l and amended p e t i t i o n s . The D i s t r i c t Court t r e a t e d t h e p e t i t i o n s a s r e q u e s t s f o r j u d i c i a l review which would r e q u i r e "prompt s e r v i c e " of n o t i c e t o t h e Board under t h e Administrative Procedure A c t . Upon rehearing, Rierson contends t h a t t h e ~ i s t r i c t Court e r r e d i n f a i l i n g t o t r e a t h i s p e t i t i o n f o r j u d i c i a l review a s an independent c i v i l a c t i o n t o which t h e "prompt service" requirement would not apply. W e f i n d t h a t i f e r r o r w a s committed, it would n o t have a f f e c t e d t h e d e c i s i o n of t h e D i s t r i c t Court. Although Rierson chose t o have h i s case heard by t h e Board, he argues on appeal t h a t t h e Board's d e c i s i o n i s n o t binding, and, moreover, s i n c e h i s claims d e a l t with c o n s t i - t u t i o n a l i s s u e s and a t o r t claim a g a i n s t t h e Board, h i s claims could not have been resolved by an a d m i n i s t r a t i v e body. Although a p p e l l a n t ' s D i s t r i c t Court a c t i o n was f i l e d under t h e Administrative Procedure Act, on rehearing he a s s e r t s t h a t he should n o t be allowed t o proceed with h i s claim under r u l e s a p p l i c a b l e t o o r i g i n a l D i s t r i c t Court a c t i o n s , unhindered by t h e requirements of a d m i n i s t r a t i v e procedural r e s t r i c t i o n s . It i s i n t e r e s t i n g t o note t h a t although t h e j u r i s d i c t i o n a l i s s u e was f i r s t r a i s e d by J u s t i c e Sheehy i n h i s d i s s e n t , Rierson argues t h a t it has always been h i s i n t e n t i o n t o proceed i n D i s t r i c t Court with an a c t i o n independent of the Board's unrewarding decision. W e must conclude t h a t even i f t h e District Court claim i s an independent c i v i l a c t i o n , o r i g i n a l i n t h a t c o u r t , Rierson's own f a i l u r e t o pursue t h a t a c t i o n has l e f t him without a remedy on appeal. Clearly, i f t h e D i s t r i c t Court a c t i o n i s an independent a c t i o n , Rierson i s bound by t h e s t a t u t e of l i m i t a t i o n s which a p p l i e s t o such a c t i o n s . I n cases where damage t o property r i g h t s is argued, any cause must be brought within two years. Section 27-2-207, MCA. I n h i s r e p l y Rierson a s s e r t s t h a t t h e a p p l i c a b l e l i m i t a t i o n i s t h a t f o r w r i t t e n c o n t r a c t s ( s e c t i o n 27-7-202(1), MCA) which i s e i g h t years, o r o b l i g a t i o n s , o t h e r than a c o n t r a c t , and n o t founded on a w r i t t e n instrument ( s e c t i o n 27-2-202(3), MCA) which i s t h r e e years. Neither of t h e s e s t a t u t e s of l i m i t a t i o n s i s a p p l i c a b l e i n our view. Rierson's claims involved two c o n s t i t u t i o n a l v i o l a t i o n s and a request f o r invocation of t h e d o c t r i n e of promissory estoppel. Only i n t h e broadest sense could these l i m i t a t i o n s be considered t o be c o n t r o l l i n g , and s i n c e t h e r e i s a more s p e c i f i c stat- u t e involving i n j u r y t o personal property r i g h t s , of which r e t i r e m e n t b e n e f i t s are one, w e a r e constrained t o follow t h e more s p e c i f i c s t a t u t e . Section 1-3-225, MCA. See a l s o Butte Country Club v. Dept. of Revenue (1980) , Mont. , 607 P.2d 551, 37 St.Rep. 479. W e a l s o note t h a t Rierson admitted t h e a p p l i c a b i l i t y of a two-year s t a t u t e of l i m i t a t i o n s i n h i s letter t o t h e Board of March 18, 1976. Having concluded t h a t t h e two-year s t a t u t e of l i m i t a - t i o n s i s appropriate i n t h i s case, w e f u r t h e r f i n d t h a t Rierson's D i s t r i c t Court a c t i o n i s barred. Rierson has been aware of t h e e f f e c t of t h e two-year s t a t u t e of l i m i t a t i o n s s i n c e he f i r s t demanded t h a t h i s b e n e f i t s be adjusted i n 1976. The e n t i r e h i s t o r y of t h i s c a s e i s one of n e g l e c t and p r o c r a s t i n a t i o n . H e d i d not approach t h e Board f o r an adjustment u n t i l nearly two years a f t e r h i s retirement. C l e a r l y h i s cause of a c t i o n accrued no l a t e r than h i s re- tirement d a t e , and from t h e record, t h e r e is no excuse f o r a delay of one year and 360 days which would o b l i g a t e t h i s Court t o excuse Rierson's t a r d i n e s s . When he was n o t i f i e d t h a t t h e a d m i n i s t r a t i v e process was over, he had f i v e days remaining within t h e confines of s e c t i o n 27-2-207(1), MCA, t o f i l e h i s independent and o r i g i n a l complaint i n D i s t r i c t Court. Instead, he f i l e d a p e t i t i o n f o r j u d i c i a l review on January 11, 1978, twenty-five days a f t e r h i s n o t i f i c a t i o n of t h e adverse agency r u l i n g . Although t h a t a c t i o n was f i l e d within t h e thirty-day l i m i t a t i o n f o r p e t i t i o n s f o r j u d i c i a l review of a d m i n i s t r a t i v e a c t i o n s , t h i s Court w i l l n o t allow t h e a d m i n i s t r a t i v e appeal period t o be added t o t h e two-year s t a t u t e of l i m i t a t i o n s , thus bootstrapping h i s o r i g i n a l and independent a c t i o n i n t o compliance with t h e s t a t u t e of l i m i t a t i o n s by use of an a d m i n i s t r a t i v e a c t i o n he now contends i s void. Throughout t h e course of Rierson's s u i t a g a i n s t t h e Board, he has had t h e option of an independent D i s t r i c t Court p e t i t i o n f o r r e l i e f . Although urged by t h e Board t o seek a d m i n i s t r a t i v e remedies, he was n o t required t o do so. This Court must r e s p e c t t h e requirement t h a t remedies be sought with some degree of d i l i g e n c e . Rierson knew of t h e new i n t e r p r e t a t i o n of t h e r e t i r e m e n t laws as e a r l y a s June 20, 1972. I n t h e two-year period between t h a t d a t e and h i s retirement i n April of 1974, he made no e f f o r t t o seek any kind of remedy. H i s claims l a y dormant f o r almost an- o t h e r two years u n t i l A p r i l 5, 1976, before he requested an a d m i n i s t r a t i v e hearing. During t h a t hearing, Rierson delayed t h e proceedings f o r another e i g h t months before sub- m i t t i n g h i s b r i e f . This Court w i l l n o t condone manipulation of t h e law s o t h a t a case may be f u r t h e r pursued. To do s o would be an a f f r o n t t o t h e l e t t e r and t h e s p i r i t of t h e s t a t u t e s of l i m i t a t i o n s . Viewed i n t h e b e s t p o s s i b l e l i g h t , Rierson's s u i t a g a i n s t t h e Board s t i l l shows s u b s t a n t i a l evidence of inexcusable neglect. W e f i n d t h a t t h e a c t i o n i n D i s t r i c t Court i s barred by t h e two-year s t a t u t e of l i m i t a t i o n s of s e c t i o n 27-2-207(1), MCA. W e r e a f f i r m t h e D i s t r i c t Court dismissal. We concur: "sng $4ia%&@, Chlef Justice Justices Mr. Justice Daniel J. Shea concurring: I concur with the decision here affirming the trial court's dismissal order. This is a case where the appellant, from beginning to end, slept on his rights. M r . J u s t i c e John C. Sheehy and M r . J u s t i c e Gene B. Daly dissenting: W e i t e r a t e without d i l u t i o n what w e s a i d i n our d i s s e n t t o t h e o r i g i n a l opinion i n t h i s cause (Dissent, Cause No. 79-32, 37 St.Rep. 6 2 7 ) . I n its opinion on t h e p e t i t i o n f o r rehearing foregoing, t h e majority has c i r c l e d the i s s u e s r a i s e d by our d i s s e n t and t h e p e t i t i o n f o r rehearing, i n s o c i r c l i n g , t h e majority has s t i r r e d up as much d u s t a s it d i d i n t h e o r i g i n a l opinion, t o t h e e x t e n t t h a t t h e i s s u e s i n t h i s case are f u r t h e r obscured. Originally, t h i s was a r e l a t i v e l y simple case: Rierson, a r e t i r e d highway patrolman, had p e t i t i o n e d t h e D i s t r i c t Court f o r review of an adverse decision a g a i n s t him by an administra- t i v e agency. H e had f i l e d h i s p e t i t i o n f o r review within 30 days, but i n s t e a d of serving a copy of t h a t p e t i t i o n upon t h e administrative agency, he waited 16 months when he amended h i s p e t i t i o n and served a summons issued upon t h a t p e t i t i o n . The only r e a l i s s u e i n t h i s case is whether t h e provision of s e c t i o n 2-4-702(2) ( a ) , MCA, t h a t a copy of t h e p e t i t i o n f o r review " s h a l l be promptly served upon t h e agency", serves t o prevent t h e D i s t r i c t Court from considering agency excesses of s t a t u t o r y authority i n deciding questions of c o n s t i t u t i o n a l law and a t o r t claim against i t s e l f . W e had suggested some proper answers i n our o r i g i n a l d i s s e n t ; unfortunately our powers of discussion seemed i n s u f f i c i e n t . It had been a happier circumstance f o r us i f t h e majority had simply decided t h a t s i x t e e n months t o make service f a i l e d t o c o n s t i t u t e "prompt" s e r v i c e , t h a t prompt s e r v i c e was j u r i s d i c t i o n a l , and t h a t therefore, Rierson was o u t of court. Instead, t h e majority careened o f f on a s i d e t r i p over t h e s t a t u t e of l i m i t a t i o n s , and w e may be some t i m e g e t t i n g t h i s Court back on t h e road again on t h i s s u b j e c t . -9- The majority buys itself a peck of trouble when it declares in dictum (we hope it will be considered dictum) that the statute of limitations continues to run on separable causes intermingled with the limited cause adjudicable by the admini- strative agency. That dictum is wrong because limitations should be tolled when the claimant is not neglecting to proceed in some forum on a phase of his claim, and when the other party has full notice while the claimant so proceeds of his additional but intermingled claims. Otherwise, as in this case, an admini- strative agency can act in excess of its authority, a ground provided in section 2-4-704, MCA, for which an administrative decision can be set aside, and never be called to account in a court of law because the statute of limitations may have run on the cause which the agency incorrectly assumed jurisdiction to decide. The majority opinion does not deal with our contentions respecting the judicial review statute for administrative cases, section 2-4-702, MCA, and particularly, it has not looked at that statute with respect to the statute of limitations on "independent" or intermingled causes. Again, the first paragraph of that section provides: "A person who -- has exhausted all administrative remedies available within the agency and who is aggrieved by a final decision in a contested case is entitled to judicial review under this chapter. This section -- does not limit utilization of or the scope of judicial review available under ----- other means of review, redress, relief, or trial de -- novo provmed Q statute." Section 22-702(1) (a), MCA. (Emphasis added.) That quoted statute contemplates, in our view, full judicial review not only of causes with which the administrative agency has authority to act upon, but also cases where it violates its constitutional or statutory provisions. Indeed, that is provided, as we have noted, in section 2-4-704(2)(a), MCA. -10- Our second objection to the majority opinion on rehearing in deciding this case on the statute of limitations is that apparently the court had decided incorrectly which statute applies. This case does not concern an "injury to personal property." This was not Rierson's automobile that was damaged; this was, at the least, a liability created by statute governed by section 27-2-211(1) (c), MCA (two-year limitation). We would hold that the pension dispute grows out of the relationship of master and servant which is contractual in nature (53 Am.Jur. 2d 92 Master - and Servant B 1 4 ) , and that either the five-year or eight-year period applies under section 27-2-202, MCA. Rierson's tort action however has a two-year limitation, section 27-2-207, MCA, which again points up the necessity for tolling the statute while he is pursuing his administrative remedy. Certainly the agency should not be allowed to determine a tort action brought against itself. We would reverse and remand to the District Court for further proceedings. Whether he would be successful there, we do not know, but at least the courts of justice would be open to him, 1972 Mont. Const., Art. 11, 5 16, and he would not be deprived of due process. /," Justices 1