NO. 93-223

IN THE SUPREME COURT OF THE STATE OF MONTANA

1994

PATRICK KEARNEY,

Plaintiff, Respondent,

and Cross-Appellant,

v.

KKLF COMMUNICATIONS, INC.,

a Montana Corporation,

Defendant and Appellant.

APPEAL FROM: District Court of the Second Judicial District,

In and for the County of Silver Bow,

The Honorable Jeffrey Sherlock, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

R. D. Corette and Gregory C. Black,

Corette, Pohlman, Allen, Black & Carlson,

Butte, Montana

S. M. Fallis, Jr., and Tom Robertson,

Nichols, Wolfe, Stamper, Nally & Fallis, Inc.,

Tulsa, Oklahoma

For Respondent:

Donald C. Robinson and J. Richard Orizotti,

Poore, Roth & Robinson, Butte, Montana ,z;

Submitted on Briefs: January 7, 1994

Decided: February 17, 1994
Justice Terry N. Trieweiler delivered the opinion of the Court.

Patrick Kearney commenced this action in the District Court

for the Second Judicial District in Silver Bow County alleging that

he was wrongfully discharged from employment and was entitled to

overtime compensation, statutory penalties, and attorney fees.

Following an eight-day jury trial in Bozeman, the jury returned a

verdict in favor of Kearney on the claim for overtime compensation.

However, judgment was entered in favor of Kearney's employer, KKLF

Communications, Inc., on the wrongful discharge from employment

claim. The court awarded certain costs and attorney fees to

Kearney, and denied costs and attorney fees to KXLF. KKLF and

Kearney appeal.

We affirm in part, and reverse in part, the judgment of the

District Court.

The following issues are presented on appeal:

1 . Did the District Court err when it denied KXLF's motions

for summary judgment and for a directed verdict dismissing

Kearney's overtime compensation claim?

2 . Did the District Court err when it held that a five-year

statute of limitations applied to Kearney's overtime compensation

claim?

3 . Did the District Court err when it refused to award

attorney fees to KKLF pursuant to the arbitration provisions of the

Wrongful Discharge from Employment Act?

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4 . Did the District Court improperly award certain court

costs to Kearney?

5 . Did the District Court err when it directed a verdict

against Kearney dismissing his claim that KXLF had violated the

express provisions of its own written personnel policy?

Plaintiff Patrick Kearney was hired as a news reporter in 1981

by KXLF, the Butte station of the MTN television network. In 1986,

Xearney was promoted to the position of news director by his

supervisor, Eon Cass, General Manager of KXLF. At that time, KXLF

was one of four MTN television stations in Montana owned by SJL of

Montana Associates. In December 1986, Evening Post Publishing

Company purchased all of the MTN television stations except the

Billings station, and formed KXLF Communications, Inc. (KXLF), to

operate Station KXLF in Butte.

News broadcasts for the MTN network originated primarily from

Station KTVQ in Billings. The main segment of the news was

broadcast statewide by KTVQ, and each of the local studios produced

a short local segment of the newscast. The broadcast was then

returned to KTVQ for statewide coverage of weather and sports. As

the news director at KXLF, Kearney was responsible for story

selection, reporting, production, and editing of the local segment

of the newscasts.

When Evening Post purchased KXLF, the broadcasts continued to

originate from Billings under the existing MTN network news

agreement. However, in 1988, KXLF management made the decision to

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convert to a completely local news broadcast. Implementation of

this plan required the purchase of new equipment and increased

responsibilities for the director of the news department.

Although Kearney anticipated continuing as news director, Cass

testified that he believed Kearney would not be able to handle the

increased duties and responsibilities. According to Cass, this was

due to Kearney's history of conflicts with other staff members and

problems controlling his temper. On December 6, 1988, Cass

notified Kearney that he was removing him as news director and

offered him the position of sports director. Kearney notified Cass

the following day that he would not accept the demotion to sports

director and thereby terminated his employment with KXLF.

In a complaint filed in the District Court on December 5,

1989, against Evening Post and Ron Cass, Kearney alleged that he

had been constructively discharged from employment without good

cause in violation of § 39-2-904(2), MCA, and that KXLF had

violated the express provisions of its written personnel policy in

violation of 5 39-2-904(3), MCA. Kearney further alleged that he

had worked in excess of 3626 overtime hours for which KXLF had not

compensated him at the appropriate rate of pay. In addition to

damages and overtime compensation, Kearney sought the statutory

penalties provided for in Montana's wage statutes and attorney

fees.

By amended complaint dated February 5, 1989, Kearney added

KXLF as a defendant. The court later permitted Kearney to add a

4
claim for intentional interference with business relationships,

naming SJL of Montana Associates and Kim Allen Nash of KTVQ in

Billings as defendants.

At the close of discovery, all defendants moved for summary

judgment. In an order issued on November 18, 1992, the court

granted summary judgment to Evening Post and Cass, dismissing them

from the action. KXLF's motion for summary judgment regarding the

claims for wrongful discharge and overtime compensation was denied.

A jury trial commenced on November 23, 1992. At the

conclusion of the eight-day trial, the court directed a verdict

against Kearney and dismissed that part of his wrongful discharge

claim which was based on a violation of the express provisions of

the employer's own written personnel policy, but refused to direct

a verdict on the claim for overtime compensation. The jury

returned a verdict in favor of Kearney on the overtime claim in the

amount of $48,986. In regard to the claim that Kearney had been

constructively discharged without good cause, the jury returned a

verdict in favor of KKLF. Finally, the jury found that Nash and

SJL had not interfered with Kearney's business relationships.

In a judgment entered on January 14, 1993, Kearney was awarded

overtime compensation plus the statutory penalty, for a total

amount of $97,972. The court also awarded costs and attorney fees

to Kearney and denied costs and attorney fees to KKLF. From this

judgment, KKLF appeals.

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Kearney cross-appeals from the court's directed verdict in

favor of KKLF on the issue of whether KXLF violated the express

provisions of its written personnel policy.

ISSUE 1

Did the District Court err when it denied KKLF's motions for

summary judgment and for a directed verdict dismissing Kearney's

overtime compensation claim?

KXLF contends that the District Court should have dismissed

the claim for overtime compensation on the basis that Kearney was

a covered employee under the federal Fair Labor Standards Act

(FLSA) found at 29 U.S.C. 55 201through 219 (1988), and therefore,

was not entitled to overtime compensation pursuant to 5 39-3-405,

MCA, of Montana's Minimum Wage and Maximum Hour Act. KKLF asserts

that under § 213(b)(9) of the FLSA, a person employed as an

announcer or news editor in a small market television station such

as KKLF is exempt from overtime compensation benefits.

As conceded in KKLF's reply brief, however, we recently

addressed this precise issue in Benyv.KRTVCommunicacions,Inc. (Mont.

1993), 50 St. Rep. 1617. In Beny, we held that an employee in

Kearney's position is not covered by the FLSA due to the exemption

found at 29 U.S.C. 5 213(b)(9) (1988). Furthermore, because

Montana is not preempted from providing overtime protection

according to 29 U.S.C. 5 218 (1988), we held that an employee such

as Kearney is entitled to overtime compensation under Montana's

wage protection statute. Berry, 50 St. Rep. at 1622.

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Therefore, pursuant to our decision in Beny, Kearney is

entitled to benefits for overtime work as provided in Montana's

Minimum Wage and Maximum Hour Act. The District Court did not err

when it denied KKLF's motions to dismiss this claim.

ISSUE 2

Did the District Court err when it held that a five-year

statute of limitations applied to Kearney's overtime compensation

claim?

Kearney filed his claim for overtime compensation on

December 5, 1989. He sought benefits for the years 1987 and 1988.

KXLF contends that the applicable statute of limitations for

asserting an overtime claim should be two years, and that Kearney

should not be awarded benefits for hours worked prior to

December 5, 1987. This contention is based on 5 27-2-211(1)(c),

MCA, which establishes a two-year limitation for commencing actions

when liability is created by a statute. In this instance, KKLF

contends that liability was based on 5 39-3-405, MCA, which

requires employers to pay additional compensation for hours worked

in excess of 40 hours during a workweek.

The District Court, however, found the applicable statute of

limitations to be five years pursuant to 5 27-2-202(2), MCA, and

this Court Is decision in Intermountain Deaconess Home v. State (1981) , 191

Mont. 309, 623 P.2d 1384. In that case, we held that a five-year

statute of limitations pertains to a wage dispute based on an oral

contract of employment. Seeaho,Popev.Keefer (1979), 180 Mont. 454,

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591 P.2d 206. Although KXLF recognizes this Court's conclusion in

Interrnountain and similar cases, it argues that those cases failed to

properly analyze § 27-2-211, MCA.

The resolution of this issue requires us to reconcile

inconsistent statutes of limitations, both of which have

. .

application to this situation. Kearney did perform services as an

employee of KXLF pursuant to an oral contract of employment, and

KXLF is liable for the payment of overtime wages to Kearney because

of Montana's Minimum Wage and Maximum Hour Act.

In Ritlandv.Rowe (Mont. 1993), 861 P.2d 175, 50 St. Rep. 1183,

and Thielv. TaurusDrillingLtd. 198041 (1985), 218 Mont. 201, 710 P.2d 33,

we addressed the problem of inconsistent statutes of limitations.

In R&land, 861 P.2d at 178, we held that where a substantial

question exists regarding which of two statutes of limitations

should apply, the court should apply the general rule that *'any

doubt should be resolved in favor of the statute containing the

longer limitation." This conclusion was in accord with the public

policy recognized in Thiel, 710 P.2d at 40, which favors access to

our courts and resolution of claims on their merits rather than the

arbitrary bar of the statute of limitations.

We conclude that our decision in Ritkd applies to this case.

Because there is more than one applicable statute of limitations,

the conflict was correctly resolved in favor of permitting

Kearney's claim to be filed. The court did not err when it ruled

8
that a five-year statute of limitations applied to Kearney's claim

for overtime compensation. '

ISSUE 3

Did the District Court err when it refused to award attorney

fees to KKLF pursuant to the arbitration provisions of the Wrongful

Discharge from Employment Act?

Following the court's directed verdict and the jury verdict in

favor of KKLF on Kearney's wrongful discharge claim, KXLF submitted

a bill of costs which included a claim for attorney fees pursuant

to 9 39-2-914(4), MCA (1989), which provides as follows:

A party who makes a valid offer to arbitrate that is

not accepted by the other party and who prevails in an

action under this part is entitled as an element of costs

to reasonable attorney fees incurred subsequent to the

date of the offer.

KKLF sought attorney fees under this section based on its

offer to arbitrate Kearney's claim which was filed on January 31,

1990, and which was subsequently rejected by Kearney. KKLF

contends that it prevailed in the wrongful discharge action, and

therefore, is entitled to reasonable attorney fees because Kearney

did not accept a valid offer to arbitrate.

Relying on this Court's decision in Hojjinanv. TownPump (1992),

255 Mont. 415, 843 P.2d 756, the District Court refused to award

KKLF attorney fees under this section because no written

arbitration agreement existed between the parties. KKLF contends

that Hoffman was incorrectly decided and that 5 39-2-914(4), MCA

(1989) r should be interpreted to cover all employment termination

9
claims, whether or not a written employment agreement contains an

arbitration provision. To support its argument, KXLF notes that

the Wrongful Discharge from Employment Act was amended in 1993 to

delete the requirement of a written arbitration agreement before

attorney fees could be awarded. Chapter 442, Montana Session Laws,

1993.

In Hoffman, 843 P.2d at 759, this Court analyzed the

arbitration provisions of the Wrongful Discharge from Employment

Act and held that the statute clearly requires a written agreement

to arbitrate before attorney fees may be awarded. The amendments

which were enacted in 1993 do not apply to the present case. It is

undisputed that there was no written arbitration agreement between

Kearney and KKLF. Therefore, based on our decision in Hofjinan, we

conclude that the court correctly refused to award KXLF attorney

fees pursuant to this section.

ISSUE 4

Did the District Court improperly award certain court costs to

Kearney?

Following the jury trial, Kearney filed a memorandum of costs

and requested the District Court to assess specific costs of suit

against KXLF. The court awarded all costs as claimed by Kearney,

except for certain paralegal and attorney fees. KKLF contends that

the court erred when it awarded certain costs to Kearney and sets

forth three bases for this claimed error.

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KXLF first contends that Kearney was not the "prevailing

party" in this suit for purposes of recovering costs allowed by

statute because KXLF prevailed on the wrongful discharge claim,

which it maintains was the primary issue in dispute. Furthermore,

KXLF contends that even if Kearney is deemed the prevailing party,

he is entitled to only those costs which are specifically provided

for in § 25-10-201, MCA. Finally, KXLF alleges that the court

erroneously failed to determine the proportion of expenses related

to the overtime claim, as opposed to the wrongful discharge claim,

and award only those costs actually related to the overtime claim.

Section 25-lo-101(3), MCA, provides that costs of suit are

allowed as a matter of course to the plaintiff upon a judgment in

the plaintiff's favor in an action for damages when the amount

recovered is over $50. Kearney clearly received an affirmative

judgment in excess of $50. Although Kearney did not prevail on the

wrongful discharge claim, this did not preclude the court from

awarding costs associated with the litigation.

In Medhusv. Dutter (1979), 184 Mont. 437, 603 P.2d 669, this

Court addressed the question of costs when a judgment is only

partially favorable. We adopted the rule that if a plaintiff files

a complaint in an action covered by 5 25-10-101, MCA, and succeeds

only partially, the plaintiff is entitled to costs. Medhus, 603

P.2d at 674. It is only in situations where a party initiates a

law suit, the defendant counterclaims, and the judgment awards both

parties part of the relief they seek, that the party prevailing on

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the main issue in controversy in the case is entitled to recover

costs. In this case, Kearney was the only party to file a

complaint, and this resulted in entry of judgment in his favor on

the claim that KXLF was liable for overtime compensation.

Therefore, the District Court correctly determined that Kearney was

entitled to his costs of suit pursuant to 5 25-10-101, MCA.

We further note that the Medhus Court did not establish a rule

that a plaintiff who is only partially successful must apportion

litigation costs, and may recover only those costs associated with

the relief granted. Neither has KXLF set forth any authority which

would require the District Court to apportion costs in that manner.

Because of the inherent difficulties and uncertainties that would

result from such a requirement, we decline to adopt a rule which

would require the court to apportion costs where only partial

relief is granted.

KXLF challenges some of the specific costs awarded to Kearney

on the basis that they are not provided for in the pertinent

statute. We have reviewed the record with respect to these

specific items and conclude as follows:

1 . The depositions of Ron Cass, Al Nash, and Viola Vigil

were used at trial, and therefore, are allowable costs. Sage v. Rogem

(1993) I 257 Mont. 229, 848 P.2d 1034: .%TZtXZa v.LeitZke (1988), 232

Mont. 15, 754 P.2d 509.

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2 . The additional deposition expenses related to Viola Vigil

which were awarded are allowable costs pursuant to Rule 30(h)(5),

M.R.Civ.P.

3 . With respect to the costs awarded for photocopy expenses

and exhibit expenses, § 25-10-201(g), MCA, allows the taxing of

costs for "such other reasonable and necessary expenses as are

taxable according to the course and practice of the court or by

express provision of law." We conclude that the trial court's

broad authority for taxing costs permitted the taxing of these

expenses. Cushv. OhkElevator (1984), 210 Mont. 319, 684 P.2d 1041.

4 . Witness fees in the amount of $20.00 were awarded for two

witnesses, John Mizelle and Pat Burns. However, the record

supports KXLF's contention that neither of these witnesses appeared

at trial to testify. Section 25-10-201(l), MCA, allows the taxing

of costs for "legal fees of witnesses, including mileage." We

conclude that the obvious intent of this statute is to allow the

party to whom costs are awarded to recover fees paid to witnesses

who actually appear at trial. Therefore, this expense should not

have been included in the award of costs to Kearney. The court

also awarded costs for serving subpoenas on Mizelle and Burns, and

an additional witness who was neither listed nor called as a

witness during the trial. For the reasons already stated, we

conclude the court erred when it awarded costs for serving

subpoenas on witnesses who did not appear at tria 1 .

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We affirm the District Court's award of costs to Kearney with

the exception that it should be reduced by an amount of $87.90.

ISSUE 5

Did the District Court err when it directed a verdict against

Kearney dismissing his claim that KXLF had violated the express

provisions of its own written personnel policy?

On cross-appeal, Kearney alleges that the court erred when it

directed a verdict against him dismissing his claim under

c, 39-2-904 (3) , MCA, which provides that an employer's violation of

the express provisions of its own written personnel policy

constitutes a cause of action for wrongful discharge. Kearney does

not appeal from the jury's verdict dismissing his alternative

theory of constructive discharge without good cause.

A court may grant a directed verdict only when it appears as

a matter of law that the non-moving party could not recover upon

any view of the evidence, including the legitimate inferences to be

drawn from the evidence. Nautilus Insurance v. First National Insurance ( 19 9 2 ) ,

254 Mont. 296, 837 P.2d 409. A directed verdict for the defendant

is not proper if reasonable persons could differ regarding the

conclusions which could be drawn from the evidence. Moralli v. Lake

County (1992), 255 Mont. 23, 839 P.2d 1287. If there is any

evidence which warrants submission to the jury, a directed verdict

is not proper. Kestell v. Heritage Health Care (1993), 259 Mont. 518, 858

P.2d 3. When reviewing a directed verdict, this Court must

14
consider the evidence in a light most favorable to the non-moving

party. ~toutv.~Ontana~OWer~O. (1988), 234 Mont. 303, 762 P.2d 875.

One of the theories set forth by Kearney to establish wrongful

discharge from employment was that KKLF had a policy of performing

annual evaluations of all of its employees and that such a policy

existed in written form, as confirmed by Pamela Crawford who was

called by Kearney as an expert witness. Kearney alleged that he

had not received an evaluation in either 1987 or 1988 and, because

Cass relied upon Kearney's alleged performance deficiencies to

justify the decision to demote Kearney, he was effectively

discharged from the position of newe director for reasons about

which he was not forewarned and had no opportunity to correct.

Therefore, he contends his constructive discharge was actionable

because it resulted from KKLF's failure to follow the express

provisions of its own policy of evaluating employee performance.

The court granted KKLF's motion for a directed verdict on this

matter based on its finding that Kearney was unable to demonstrate

that KKLF had violated a written personnel policy which "expressly

states that there will written annual evaluations of managers."

The court determined that the statute in question requires a

violation of an express provision of a policy, and because

Kearney's witness had to interpolate the existence of the policy

from several writings, it concluded that KXLF had no express,

written policy to perform annual evaluations.

15
In response to Kearney's argument, KXLF contends that a

directed verdict was proper because the court correctly reasoned

that if the claimed policy had to be established by implication or

inference, there was no express provision giving rise to a claim

for wrongful discharge.

The record demonstrates that Kearney's witness, Pamela

Crawford, testified that KKLF had an express written policy of

performing annual evaluations based on the existence of pre-printed

evaluation forms and a memo from Cass's supervisor, Travis Rockey,

in which he stated, '*[e]ach person should get an evaluation of

their performance at least one time per year." Although KKLF's

employee handbook contains no specific reference to annual

evaluations, Crawford testified that such an express personnel

policy can exist without its inclusion in an employee handbook.

Furthermore, Kearney notes that Cass testified that all employees

of the station were evaluated during 1987 and 1988, using the

pre-printed forms, with the exception of Kearney and the other

employees whom he directly supervised. Cass also admitted that he

had demoted Kearney due to concerns about his ability to supervise

subordinates, but had not documented these concerns or warned

Kearney of his deficiencies in this regard.

Viewing this evidence most favorably to Kearney, we conclude

that conflicting inferences could be drawn from this evidence and

that reasonable persons could conclude that KKLF had an established

16
and express policy of performing annual evaluations which it

violated with respect to Kearney.

In this instance, Kearney was entitled to have the jury

determine whether he met the threshold requirement of showing that

KKLF's personnel policy expressly required annual evaluations of

all its employees. Therefore, we hold that the court erred when it

directed a verdict on this issue.

We reverse the District Court's directed verdict which

dismissed Kearney's claim that KKLF violated the express provisions

of its personnel policy and remand for further proceedings on this

issue. In all other respects, the judgment of the District Court,

reduced by the amount of $87.90, is affirmed.

We concur: