No. 90-292 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1991 

IN THE MATTER OF THE GRIEVANCE OF: 

DORIS I. BRANDER, 

Petitioner and Respondent, 

DIRECTOR, MONTANA DEPARTMENT OF 

INSTITUTIONS, 

Respondent and Appellant. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis and Clark, 

The Honorable Dorothy McCarter, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

James Obie, Legal Counsel, Department of 

Institutions, Helena, Montana 

For Respondent: 

Peter Michael Meloy, The Meloy Law Firm, Helena, 

Montana 

Submitted on briefs: January 10, 1991 

FEB X 9 11991 Decided: February 19, 1991 

Filed: Z'd SmitL e 

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Justice Terry N. Trieweiler delivered the Opinion of the Court. 

Doris I. Brander petitioned the District Court of the First 

Judicial District in Lewis and Clark County for judicial review 

pursuant to 5 2-4-702, MCA, of a decision by the ~irector of the 

Department of Institutions for the State of Montana. That decision 

rejected the findings of the Department s grievance committee to 

the effect that petitioner had been wrongfully denied employment 

within the Department. The District Court reversed the decision 

of the Director and remanded the matter to the Department of 

Institutions with the order that it adopt the recommendation of the 

grievance committee. From that judgment, the Department appeals. 

We affirm. 

The Department asserts that the issue on appeal is: 

Whether the District Court applied the proper standard for 

reviewing an agency decision pursuant to 5 2-4-704, MCA? 

Brander asserts that the issue on appeal is more properly 

stated as follows: 

Whether the ~istrict Court correctly concluded that the 

Director of the Department of Institutions failed to properly apply 

§ 2-4-621(3), MCA, when reviewing factual determinations made by 

its duly appointed grievance committee. 

Section 2-7-704, MCA, sets forth the statutory standards for 

judicial review of agency decisions. It provides in relevant part 

as follows: 

2-4-704. Standards of review. (1) . . . 
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(2) The court may not substitute its judgment for that 

of the agency as to the weight of the evidence on 

questions of fact.. . . The court may reverse or modify 

the decision if substantial rights of the appellant have 

been prejudiced because: 

(a) the administrative findings, inferences, conclusions, or decisions are: 

(i) in violation of constitutional or statutory provisions; 

(ii) in excess of the statutory authority of the agency; 

(iii) made upon unlawful procedures; 

(iv) affected by other error of law; 

(v) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; 

(vi) arbitrary and capricious or characterized bv abuse 

of discretion or clearly unwarranted exercise of 

discretion; (Underlining added.) 

Section 2-4-621, MCA, is also found in the Administrative 

Procedure Act in that chapter which sets forth the procedures to 

be followed by state agencies in deciding contested cases. Section 

621 pertains to those situations where the agency official who 

renders the decision is not the person who personally heard or 

observed the evidence. Subsection (3) provides in relevant part 

as follows: 

(3) . . . The agency in its final order may reject or 

modify the conclusions of law and interpretation of 

administrative rules in the proposal for decision but may 

not reject or modifv findinas of fact unless the asency 

first determines from a review of the comwlete record and 

states with particularitv in the order that the findinss 

of fact were not based upon competent substantial 

evidence or that the proceedings on which the findings 

were based did not comply with essential requirements of 

law . . . (Underlining added.) 
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We conclude that an answer to the issue raised by the 

appellant is dependent upon the answer to the issue raised by the 

respondent. We further conclude that a resolution of those issues 

is dispositive of this case, and, therefore decline to address the 

second issue raised by the appellant. 

Summary of the Facts 

Doris Brander went to work at Warm Springs State Hospital as 

the medical records supervisor in 1976. From 1981 until 1986, she 

worked under the supervision of Jane Edwards, who was the director 

of Treatment and Residential Services. During that time, 

petitioner had strained relations with Edwards over the appropriate 

procedure to be followed in the medical records department and over 

petitioner's approach to dealing with employees who were under her 

supervision. 

In February of 1986, Edwards became the superintendent of the 

Montana State Hospital. In that capacity, she recommended to 

Carroll South, the Director of the State Department of 

Institutions, that the position of medical records supervisor at 

Warm Springs be consolidated with the corresponding position at 

Galen State Hospital and that there be one supervisor for both 

institutions. That recommendation was accepted by South in July 

of 1986 and petitioner was advised of the Department's intention 

in mid-August of 1986. 

Edwards appointed an interview committee consisting of four 

people to interview and evaluate applicants for the combined 

position. In early September the petitioner and Billy Holmlund, 
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her counterpart, at Galen State ~ospital, were notified of the new 

position. They were invited to apply and were advised that theirs 

were the only applications that would be accepted. 

On October 7, the committee interviewed the two applicants and 

evaluated them in four areas. The formal appraisal, awarded points 

in (1) education and training; (2) work experience; (3) the 

interview; and, (4) past work performance. As a result of that 

appraisal, Holmlund received a total of 225 points and the 

petitioner received 137 points. The following day, petitioner was 

notified that Holmlund would be hired for the combined position of 

medical records supervisor of the Montana State Hospitals and 

petitioner was terminated from employment effective October 24, 

1986. 

Petitioner filed an employee grievance which was finally 

accepted by the Department on December 2, 1986. Pursuant to 

Departmental rules for non-union grievances, a three person 

committee was selected to hear evidence of the petitioner's 

grievance. One committee member was chosen by the petitioner; one 

was chosen by the Department; and, those two members selected a 

third member to act as chairperson of the committee. 

The grievance committee met on July 11, 1988. They heard 

testimony from the petitioner, Jane Edwards, and several other 

witnesses, including members of the evaluation committee. At the 

hearing, petitioner testified that she had not been hired because 

she had been treated in a discriminatory fashion by Edwards and 

because of other errors made in the evaluation process. Prominent 
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among those errors was the interview committeegs failure to credit 

her with 30 points to which she was entitled because of her four 

years of education in the field of medical records. 

On July 15, 1988, the committee unanimously found that the 

petitioner and Edwards had a troubled working relationship which 

adversely affected her work evaluations (Ray Lappin, a member of 

the evaluation committee had previously testified that in order to 

evaluate petitioners prior work performance the committee simply 

looked at her evaluation forms. This category, alone, resulted in 

petitioner's loss of 67 points compared to Holmlund in the formal 

appraisal that was done). 

In addition, the grievance committee found as a matter of fact 

that the evaluation was unfair to the petitioner because of 

inadequate credit to her for her education, inadequate credit to 

her for her work experience, and general misapplication of the 

interview process which made it unreliable. The committee found 

that the cumulative effect of these mistakes was a misapplication 

of the Department of Institutions personnel policies and 

procedures. As a result, the committee recommended that the 

petitioner be made whole by the payment of the salary for a 

combined medical records supervisor from the date of her 

termination, less any income she might have earned in the interim. 

The committeegs unanimous recommendations were passed along 

to Carroll South, who had the responsibility for entering a final 

decision of the Department of Institutions. Without conducting an 
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additional hearing or receiving any additional evidence, South 

rejected two of the committees factual findings: 

(1) He stated that there was nothing in the record to 

indicate that the grievance committee received into 

evidence any of the petitioner's performance evaluations 

and that, therefore, there was no evidence in the record 

to sustain the grievance committee's finding that 

petitioner's "troubled relationship with Edwards" 

adversely affected her appraisal. 

(2) While agreeing that petitioner had been awarded 30 

points less than she should have received in her formal 

appraisal, he determined that that deficiency, plus any 

other irregularities in the interview and appraisal were 

not sufficient to have changed the evaluation committee's 

overall result. 

Based upon these findings, South rejected the recommendations 

of the grievance committee. 

On November 10, 1988, Brander petitioned the District Court 

for the First Judicial District in Lewis and Clark County to review 

the Director's decision pursuant to the provisions of 5 2-4-702, 

MCA. The District Court considered a transcript of the grievance 

committee hearing, the records reviewed by the Director of the 

Department and the briefs and arguments of the parties. Based upon 

that information, the District Court concluded that there was 

factual evidence to support the grievance committees factual 

findings and that by rejecting those factually supported findings, 

South violated 5 2-4-621(3), MCA. The District Court concluded 

that in doing so South exceeded his statutory authority and abused 

his discretion under 5 2-4-704, MCA. The District Court reversed 

the decision of the Department of Institutions and remanded with 

an order that it adopt the recommendation of the grievance 

committee. 
On appeal, the Department argues that the District Court had 

no authority to reverse or modify the Department's decision unless 

the petitioner's substantial rights were prejudiced for one of the 

reasons set forth in 1 2-4-704, MCA. That is correct. 

The appellant then, however, proceeds from the incorrect 

premise that the ~istrict Court's decision was based solely upon 

its reversal of factual findings made by the Department and sets 

forth authority, including City of Billings v. Billings 

~irefighters, Local 251 (1982), 200 Mont. 421, 651 P.2d 627 and 

Chagnon v. Hardy Construction Co. (1984), 208 Mont. 420, 680 P.2d 

932 for the proposition that an agency's factual determinations 

cannot be overturned unless they are clearly erroneous in view of 

the evidence in the record. The Department argues that since there 

was evidence in the record (the testimony of Jane Edwards) to 

support the Director's findings, they were not clearly erroneous. 

The Department's argument would be persuasive if the District 

Court Is decision was rendered pursuant to 1 2-4-704 (2) (vi) , MCA, 

which provides in relevant part that: 

(2) . . . The court may reverse or modify the decision 

if substantial rights of the appellant had been 

prejudiced because: 

(a) The administrative findings, inferences, 

conclusions, or decisions are: 

(v) clearly erroneous in view of the 

reliable, probative, and substantial evidence 

on the whole record. 
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However, the District Courtls decision was based upon the next 

subparagraph of § 2-4-704, MCA, which allows reversal if the 

Department s findings were, (vi) arbitrary or capricious or 

characterized by abuse of discretion or clearly unwarranted 

exercise of discretion; . . . 11 

The District Court concluded that it was an abuse of the 

Director s discretion to reject the factual findings of the 

grievance committee if, in doing so, he violated S 2-4-621 (3) , MCA. 

That section, as previously pointed out, prohibits the Director, 

who neither heard nor personally observed the testimony from 

arbitrarily rejecting the factual findings of the grievance 

committee which actually did hear and observe the witnesses. 

Before he can do so, the Director must first determine from a 

review of the complete record that the grievance committee findings 

were not based upon "competent, substantial evidence. l1 We agree 

with the District Court that if the Director rejected the grievance 

committee's factual recommendations in violation of this section, 

it constituted an abuse of discretion within the meaning of 5 2- 

4-704 (2) (a) (v) , MCA. 

11. 

The remaining issue is whether the District Court properly 

concluded from its review of the record that there was competent, 

substantial evidence to support the factual findings of the 

grievance committee. We conclude that there was. 
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The petitioner testified that in 1985, Edwards threatened her 

with disciplinary action for going over her head in a dispute over 

the proper procedure for preserving medical records. She further 

testified that in a continuation of the bad relationship which was 

caused by that experience and in the process of evaluating her as 

an employee, Edwards criticized her ability to supervise other 

employees. The petitioner clearly testified that she was rated 

poorly as an employee by Edwards for these reasons. 

Ray Lappin, who succeeded Edwards as the petitioner's 

supervisor, and who served as a member of the selection committee 

testified that in order to evaluate the applicant's past work 

performance, the committee simply looked at her previous evaluation 

f oms. 

As a result of past evaluations, Holmlund received 100 points 

in her formal appraisal and the petitioner received only 33. If 

that disparity was the result of discriminatory action by Edwards, 

then it, in combination with the 30 points that the Director admits 

petitioner should have received for her prior education would have 

more than made up the difference in the total number of points 

received by Holmlund and petitioner. 

The question is, therefore, whether there was substantial 

evidence to support the grievance committee's finding that 

petitioner's poor working relationship with Edwards was directly 

related to the termation of her employment. 
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The petitioner testified that it did. The direct evidence of 

one witness who is entitled to full credit is sufficient for the 

proof of any fact. Section 26-1-301, MCA. 

Therefore, the District Court was correct in its conclusion 

that by rejecting the grievance committee s findings South violated 

3 2-4-621(3), MCA. 

For these reasons, the District Court decision and order is 

affirmed and this matter is remanded to the District Court for 

implementation of its judgment dated March 2, 1990 which orders 

that: 

. . . The decision of the Department of Institutions is 

reversed and the matter is remanded with the order to 

adopt the recommendation of the grievance committee. 

Affirmed. 

We Concur: / 

hief Justice f*