No. 86-543 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1987 

GREG J. STARK, 

Plaintiff and Respondent, 

-vsTHE CIRCLE K CORPORATION, 

Defendant and Appellant. 

APPEAL FROM: District Court of the Second Judicial District, 

In and for the County of Silver Bow, 

The Honorable Frank M. Davis, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Milodragovich, Dale & Dye; Kim L. Ritter, Missoula, 

Montana 

Streich, Lang, Weeks & Cardon; Lawrence A. Katz argued, 

Phoenix, Arizona 

For Respondent: 

Lynch & Best; John F. Lynch argued, Great Falls, 

Montana 

Submitted: October 21, 1987 

MhR 1' 1986, 

Filed : 

Decided: March 1, 1988 

Clerk 
6. Justice John C. Sheehy delivered the Opinion of the 

Court. 

Circle K Corporation appeals from a jury verdict from 

the Second Judicial District, Silver Bow County. The jury 

awarded Greg Stark (Stark) $200,000 compensatory and $70,000 

punitive damages for breach of the implied covenant of good 

faith and fair dealing relating to his termination. We 

affirm. 

Circle K presents the following issues for our review: 

1. Was there sufficient credible evidence to support a 

jury verdict finding a breach of the covenant of good faith 

and fair dealing in the termination of Stark's employment? 

2. Was there substantial credible evidence for the jury 

to properly award $200,000 of compensatory damages? 

3. Did the District Court improperly allow the economic 

damages summary to be submitted into evidence after 

settlement of instructions? 

4. Was there sufficient credible evidence to support 

the award of punitive damages? 

Stark graduated from Butte High School in 1973. He had 

no other vocational or educational training. Following two 

years of military service, Stark held several jobs, including 

two in the retail grocery business. 

On December 22, 1981, Stark applied for a job with 

Circle K in Butte. The application provided: 

I further understand and agree 

that . . . subsequent to being employed, 1 may be 

dismissed with or without cause. 

Circle K subsequently hired Stark at minimum wage as a. 

clerk on December 29, 1981. Circle K's opinion of Stark's 

ability was manifested by a number of promotions and salary 

increases. On April 24, 1982, he was promoted to assistant 
manager in Butte and received a wage increase. On June 14, 

1982, he received another wage increase because he " [worked] 

hard on the job and is an asset to the company." On July 19, 

1982, he was promoted from assistant manager to acting 

manager in Butte and later, Anaconda. He was promoted to 

"exempt" status manager and given another raise to $1,000 per 

month on Novenlber 1, 1982, because Stark had been "doing a 

good job" and had "good inventory." Positive job evaluations 

resulted in continued pay increases until he was promoted to 

zone manager on November 1, 1983. 

As a zone manager, Stark was responsible for supervising 

eight stores located in Butte, Helena, Townsend, and 

Anaconda. He held the position of zone manager up to the 

date of his termination from Circle K on August 22, 1984. 

His earnings had increased to approximately $17,000 per year 

at that time. In addition, Stark also received a company car 

which he valued at approximately $3,000 per year. 

During the course of Stark's employment, his job 

performance was regularly evaluated. He was consistently 

rated as very good to superior in the company's performance 

review appraisals. Stark's rating as the number one zone 

manager in the district reflected his abilities and 

achievements. 

On April 1, 1984, Don Herring was promoted from zone 

manager to district manager of the Great Falls district. As 

such, he supervised four zone managers and was responsible 

for 25 stores. Herring performed the evaluations of his zone 

managers. He rated Stark as his best zone manager. 

However, Herring soon became alarmed about inventory 

shortages reported by the district stores. During 

conferences in Great Falls with the four zone managers, 

inventory control was discussed. Herring also brouqht in, at 
some point, a new inventory person he had formerly worked 

with in Oregon. 

Preliminary inventory data for the month of August 

indicated a significant inventory loss at three Butte stores 

in Stark's zone. Herring requested that Stark meet him in 

Helena on August 14, 1984. Prior to the meeting, Herring 

prepared a written document entitled "Employee Counseling 

Report." This document, dated August 15, 1984, stated: 

Your inventory's [sic] in three stores are over 

S4,000 short, this is totally unacceptable. You 

are being put on 30 day probation, during this time 

I would expect you to make every effort to correct 

the situation. 

Herring had Stark read the report and requested that he 

sign. Stark refused to sign because he felt the report was 

unfair and inaccurate. Stark stated the report was 

inaccurate because the new inventory person brought in by 

Herring was not conducting the inventories properly. Stark 

also informed Herring that the report was unfair because 

other managers in the district had similar shortages and were 

not written up. Herring indicated he would look into the 

matter. The meeting ended at this point. 

A few days later, Stark attended the usual manager's 

meeting in Great Falls. Herring did not mention the report 

or the inventory shortage at this time. On August 22, 1984, 

Herring and Stark again met in Helena and Herring once more 

offered the report to Stark to sign. Stark again refused and 

was terminated for insubordination relating to his refusal to 

accept responsibility for the inventory shortage. 

The parties disagree as to whether Herring had planned, 

prior to the refusal on August 22, 1984, to fire Stark. 

Herring testified he had no intention of firing Stark unless 

Stark refused to sign the report the second time. The 

evidence showed that Herring had Stark's final pay check with 
him. In addition, Herring brought another zone manager with 

him from Great Falls to drive Stark's company vehicle. The 

other zone manager was dropped off at a near-by coffee shop 

just prior to the Stark-Herring meeting. 

At trial, the amount of inventory shortage was strongly 

contested. Although Herring had indicated at the August 14, 

1982, meeting, that he would check into the figures, he 

failed to do so. Stark indicated at trial that he had 

rechecked the figures and found significant discrepancies. 

Large inventory overages in the three Butte stores for 

September tend to support Stark's allegation. 

The parties also contest whether the termination was in 

accord with Circle K policy. At the time in question, Circle 

K had published a pamphlet setting forth company policy 

entitled "Zone Manager's Guide." The guide required, inter 

alia, consistent discipline, progressive discipline, and 

written rules which are well-known to the employees. This 

type of discipline was designed to "provide guidelines for 

conduct and a set of expectations which an employee may rely 

upon." Punishment should "accurately reflect the nature and 

seriousness of the proven offense znd the employee's prior 

record. " 

Herring admitted the policy guide also applied to a 

district manager disciplining a zone manager. Concerning 

termination, the guide provides: 

Termination -- and the Issue -- of "Just Cause" 

Unemployment compensation is often rewarded because 

the employer has failed to produce evidence of 

"just cause". That is, was this employee 

terminated for a reason related to misconduct, 

negligence on his or her part, which despite 

efforts by the employer could not be corrected? 

When you have decided to terminate the employee, 

consider the following question: 
* Was the employee informed in writing of the rule 

or policy related to this offense? 

* Has the employee been warned previously? 

* Was this warning in writing? 

* Do I have all the facts? 

* Was a final warning issued? 

* Should I check with the District Manager before 

taking action? 

* Have all employes guilty of this violation 

received the same penalty? 

Documentation 

Employees are legally entitled to fair treatment. 

In the event of an arbitration dispute, it is 

frequently the employer who must present evidence 

to support their actions. This evidence comes in 

the form of written warnings, reviews, and/or 

termination reports. Without written support, 

judgments frequently are rendered in the employee's 

favor . 

Make certain that you document. any disciplinary 

actions taken or problems experienced with your 

employees. Be specific. "Failure to follow 

company policy" is not sufficient. What policy? 

Was the employee warned? Are your warnings signed 

by the employee as well as the Zone Manager? 

Be thorough, be fair, and be professional. 

Disciplining for results is a skilled activity. 

Although Herring indicated that he had counseled Stark 

on prior occasions, the August 15, 1984 employee counseling 

report indicates that it was the initial counseling session. 

Stark denied that there was prior counseling. 

Herring also testified that an employee does not have 

the right to refuse to sign a counseling report he or she 

deems incorrect. Stark indicated that company policy allowed 
an employee to refuse to sign an inaccurate or unfair report. 

The testimony of Alan Brown, Circle K's personnel expert, and 

Jim Estes, a Circle K employee and Stark's former supervisor, 

tends to support Stark's position. 

Stark also testified that other zone managers had 

inventory shortages in excess of $2,000 for two or more 

months without receiving an employee counseling report. The 

evidence confirmed Stark's testimony. Those managers were 

also located within the Great Falls District. 

Near the end of Stark's case in chief, Joseph Kasperick, 

a business and economics professor at Montana Tech, testified 

concerning Stark's damages. Professor Kasperick testified, 

inter alia, that his calculations were based on national and 

state data concerning average work life, interest rates, 

price increases, and cost of living increases; that he had 

interviewed Stark; that he had examined Stark's tax records 

and pay slips; that his calculations were based on the 

assumption that Stark would live to the end of his expected 

work life and that he would have held a job with similar pay; 

that the present value of the future difference between what 

Stark would have made and what he would make based on his 

current earnings is approximately $146,000; that Stark had 

suffered approximately $40,000 in foregone income to date; 

and that economic predictions were not exact. Counsel for 

Circle K did not object to Professor Kasperick's conclusions. 

Professor Kasperick was cross-examined by counsel and damages 

were argued during closing argument. Stark also presented an 

employment expert who testified similar jobs were not 

available in the Butte area. 

Following the adverse jury verdict, Circle K moved for a 

judgment notwithstanding the verdict and a new *.rial. Both 

motions were denied. This appeal. followed. 
Circle K contends that there was insufficient evidence 

to support a finding of breach of the implied covenant of 

good faith and fair dealing. Thus, it is alleged the 

District Court improperly denied the motion for a judgment 

notwithstanding the verdict. 

The standard of review is stringent. "The courts will 

exercise the greatest self-restraint in interfering with the 

constitutionally mandated processes of jury decision." 

Barmeyer v. Montana Power Co. (19831, 202 Mont. 185, 191, 657 

P.2d 594, 597. A judgment notwithstanding the verdict is 

proper only where the evidence presented demonstrates a 

complete absence of proof in support of the prevailing party. 

Jacques v. Montana National Guard (1982), 199 Mont. 493, 504, 

649 P.2d 1319, 1325. When examining the sufficiency of the 

evidence, the evidence and all inferences therefrom will be 

considered in a light most favorable to the prevailing party. 

Kukuchka v. Zien~et (Mont. 1985), 710 P.2d 1361, 1363, 42 

St.Rep. 1916, 1917. A court will not substitute its judgment 

for that of the jury. Evidence may be inherently weak and 

still be sufficient to uphold the jury verdict. Anderson v. 

Jacqueth (Mont. 1983), 668 P.2d 1063, 1064, 40 St.Rep. 1451, 

1453. 

Circle K contends the contractual provision providing 

that Stark could be terminated "with or without cause" 

overcomes this heavy burden and precludes a finding of breach 

of good faith and fair dealing. It is alleged that the 

written contractual provision allowing termination without 

cause cannot be modified by oral representations which would 

give rise to a reasonable expectation of anything but "at 

will" employment. Circle K misunderstands the nature of good 

faith and fair dealing. 

In Gates v. Life of Montana Insurance Co. (1982), 196 

Mont. 178, 638 P.2d 1063 (Gates - I) , we recognized that the 
covenant of good faith and fair dealing is applicable to 

employment contracts. The covenant is implied as a matter of 

law based on the public policy of this State. It does not 

depend on contractual terms for its existence, nor is the 

covenant of good faith and fair dealing subject to 

contractual waiver, express or implied. See S 28-2-701 (2) , 

MCA. "The duty arises out of the employment relationship yet 

the duty exists apart from, and in addition to, any terms 

agreed to by the parties." Gates v. Life of Montana 

Insurance Co. (Mont. 1983), 668 P.2d 213, 214, 40 St.Rep. 

1287, 1289 (Gates - 11). Despite the express contract, the 

question of whether the "covenant of good faith and fair 

dealing is implied in a particular case depends upon 

objective manifestations by the employer giving rise to the 

employee's reasonable belief that he or she has job security 

and will be treated fairly." Dare v. Montana Petroleum 

Marketing Co. (Mont. 1984), 687 P.2d 1015, 1020, 41 St.Rep. 

1735, 1739. 

The record demonstrates Stark experienced objective 

manifestations reasonably giving rise to a belief of job 

security. Circle K repeatedly acknowledged Stark's positive 

input to the company. Stark received several promotions; his 

wages increased from minimum wage to $20,000 per year 

including benefits; he consistently received positive job 

evaluations; he was deemed "an asset to the company"; the 

company guide book indicated that generally employees should 

be terminated only after attempts to correct deficiencies; 

and Alan Brown indicated that Stark was a permanent employee. 

We find the evidence considerably more than sufficient for 

the jury to find that Stark had an objectively reasonable 

belief that he would be fired only for good cause. 

In the alternative, Circle K argues that good cause did 

exist to fire Stark. Implicit in Circle K's argument is the 
contention that an employer's determination of "good cause" 

is not subject to review by the jury. Circle K argues that 

the jury cannot decide "whether Herring's instructions [were] 

fair or unfair, necessary or unnecessary;" that Stark must 

blindly obey the commands of a superior. We disagree. 

The implied covenant of good faith and fair dealing is 

designed to prevent the abuses of unfettered discretion 

inherent in a situation of unequal bargaining power. Dare, 

687 P.2d at 1020, 41 St.Rep. at 1740. An employee is not 

required to leap at his masters every command. See Delaney 

v. Taco Time International (Ore. 1984), 681 P.2d 114 

(employee wrongfully terminated for refusal to sign false 

report concerning fellow employee); Wagenseller v. Scottsdale 

Memorial Hospital (Ariz. 1985) , 710 P. 2d 1025 (hospital 

employee stated cause of action following discharge for 

refusal to take part in skit in which buttocks are exposed); 

Tameny v. Atantic Richfield Co. (Cal. 1980), 610 P.2d 1330 

(employee who refused to participate in gasoline price-fixing 

wrongfully discharged); OISullivan v. Mallon (N.J. 1978), 390 

A.2d 149 (x-ray technician cannot be discharged for refusal 

to perform catheterizations when the law requires such 

procedures be performed by a registered nurse or doctor); 

Trombetta v. Detroit, Toledo & Ironton R. Co. (Mich. 1978), 

265 N.W.2d 385 (recognizing potential cause of action for 

wrongful discharge resulting from refusal to falsify 

pollution control reports); and Peterman v. International 

Brotherhood of Teamsters (Cal. 1959), 344 P.2d 25 (employee 

cannot lawfully be discharged for refusal to commit perjury). 

We will not require an employee to sign a written statement 

he believes to be false so that an employer can later justify 

termination. An "employee is entitled to some protection 

from injustice." Gates I, 196 Mont. at 184, 638 P.2d at 

1067. Although an employer is entitled to latitude in making 
business decisions, that latitude cannot be used as a facade 

to justify a breach of the covenant good faith and fair 

dealing. To rebut Stark's allegation, Circle K need only 

have shown a fair and honest reason for termination. 

Flanigan v. Prudential Federal Savings and Loan Assoc. (Mont. 

1986), 720 P.2d 257, 43 St.Rep. 941. 

Circle K apparently failed to do so, however. Contrary 

to Circle K's assertion, the jury, as the trier of fact, does 

determine whether good cause existed. Flanigan, 720 P.2d at 

261, 43 St.Rep. at 946, Dare, 687 P.2d at 1019, 41 St.Rep. at 

1739. The jury is not bound by the employers explanation. 

See Flanigan, supra (employee allegedly terminated as part of 

reduction in force); Crenshaw v. Bozeman Deaconess Hospital 

(Mont. 1984), 693 P.2d 487, 41 St.Rep. 2251 (employee 

allegedly terminated for disrupting continuity of care, 

continually getting in the way of patient care, disorderly 

conduct, breach of confidentiality, etc.); Dare, supra 

(employee allegedly terminated for refusing to clean 

designated areas, having men hang around the station, closing 

the station early, coming in late, and lack of 

responsibility). The cases above indicate that the proffered 

reason does not always conform to the evidence. 

In the instant case, Herring's apparent lack of candor 

may have caused the jury to disbelieve Circle K's entire 

explanation. The record demonstrates that Herring was 

impeached on several matters, that his testimony conflicted 

with prior testimony given at an unemployment compensation 

hearing, and that his testimony conflicted with the 

documentary evidence. This situation led Judge Davis to 

comment : 

[Herring] was not a very good witness. I was 

restless and twisting in my chair at the way he 

responded. I am wondering how that may have 

affected the jury. 
Circle K contends that the inconsistencies in Herring's 

testimony were only matters of opinion and not fabrication. 

We need not reach the issue. The jury as trier of fact, 

determines the credibility of a witness and the reason for 

termination. Flanigan, 720 P.2d at 261, 43 St.Rep. at 946. 

Herring's "apparent" lack of credibility is sufficient for 

the jury to find Circle K did not have a "fair and honest 

reason for termination." Flanigan, supra. The jury also 

could have found that Circle K failed to follow company 

policy as set forth in the Zone Managers Guide. We hold 

there is sufficient credible evidence to support the jury 

verdict. 

Circle K also contends the award of compensatory damages 

is excessive and speculative because Professor Kasperick and 

the jury improperly assumed Stark would have remained with 

Circle K the remainder of his work life. We disagree. 

The standard of review for reversal requires a finding 

that the jury award is so grossly out of proportion as to 

shock the conscience. Frisnegger v. Gibson (1979), 183 Mont. 

57, 598 P.2d 574. Where it appears that the jury did not act 

arbitrarily or capriciously, its decision on the amount of 

damages must stand. The litigants agree that the jury 

determined the amount of damages based on the testimony of 

Professor Kasperick. We do not find such a method of 

determination to be arbitrary or capricious. 

Section 27-1-203, MCA, provides that "damages may be 

awarded . . . for detriment . . . certain to result in the 

future." However, no person can foretell the future. In 

Frisnegger, we construed 5 27-1-203 to require that damages 

need only be reasonably certain. 

While no case in Montana has construed this 

statute, it has always been the practice in Montana 

to instruct juries that future damages need only be 

reasonably certain, and not absolutely certain as 
the statute seems to imply. In holding, as we do, 

that future damages need only be reasonably certain 

under the evidence, it must be granted that in 

determining an award for future damages, a jury, or 

an expert testifying on the subject, must to some 

degree engage in conjecture and speculation. When 

the conjecture and speculation is based upon 

reasonably certain human experience as to future 

events, the jury or trier of fact is entitled to 

rely on that degree of reasonable certainty in 

fixing and awarding future damages. 

183 Mont. at 71, 598 P.2d at 582. 

The record demonstrates that compensatory damages, as 

awarded by the jury, were "reasonably certain" within the 

meaning of Frisnegger. Professor Kasperick properly relied 

upon state and national data, Stark's records and interviews 

with Stark to derive input for his calculations. See Rule 

703, M.R.Evid. (expert may base opinion upon facts or data 

made known to him at or before the hearing). Professor 

Kasperick then stated his conclusions and engaged in an 

exhaustive explanation of his methodology. The fact that 

Professor Kasperick relied upon Stark's hearsay statement 

that he planned to stay with Circle K is not dispositive. 

See Azure v. City of Billings (1979), 182 Mont. 234, 596 ~.2d 

460 (expert may rely upon facts that would not be admissible 

by themselves because they constituted hearsay) . It is not 

unusual for a person who has found success in a chosen 

profession to remain with a company until retirement. The 

jury, as trier of fact, apparently agreed. 

Circle K argues, in effect, that an award of 28 years 

lost income is per se excessive. We disagree. It is 

self-evident that the purpose of damages is to make an 

injured party whole. Stark presented evidence that similar 

work was not available in the Butte area and the amount of 

income he had lost as a result. Stark ' s evidence went 

substantially unrebutted. 
Circle K did not object to Professor Kasperick's 

conclusion nor did it present its own expert on damages or 

employment opportunity. Circle K had the opportunity to 

cross-examine Professor Kasperick and to argue the amount of 

damages in closing argument. Jury instructions 7, 25 and 26 

informed the jury they were not to speculate and should only 

award reasonable damages. Under these circumstances, we do 

not find 28 years to be per se excessive. Stark presented 

sufficient credible evidence for the jury to find he would 

not be able to find comparable employment in Butte. We will 

not substitute our judgment for that of the jury. As the 

District Court indicated, "it would be the height of judicial 

arrogance [for the court] to substitute its own findings and 

beliefs for those [of the] tried and true women of the jury." 

The third issue before the Court concerns the admission 

into evidence of an economic damages summary. Following 

settlement of instructions, counsel for Stark moved to reopen 

his case-in-chief and offered an economic damages summary 

into evidence. The document was admitted over Circle K's 

objection that testimony had closed. 

It has long been the rule in Montana that the propriety 

of a motion to reopen the case is left to the sound 

discretion of the trial court. Alderson v. Marshall (1888), 

7 Mont. 288, 16 P. 576; Cole v. Helena Light & Railway Co. 

(1914), 49 Mont. 443, 143 P. 974; Brange v. Bowen (1920), 57 

Mont. 77, 186 P. 680. No rigid nor fixed formula can or 

should be employed to determine when a motion to reopen is 

proper. The trial court, which has a feel for the case, can 

best determine what is necessary and appropriate to achieve 

substantial justice. Absent a clear abuse of discretion, the 

determination of the trial court will be upheld. Alderson, 

supra. 
In the instant case, the material contained within the 

economic damages summary had been thoroughly presented during 

Stark's case-in-chief. Circle K was not unduly surprised by 

its contents. We find no abuse of discretion. See Brange, 

supra. 

Finally, Circle K contends there is an absence of proof 

to support a verdict granting Stark punitive damages against 

Circle K and therefore a judgment notwithstanding the verdict 

should have been granted. We find there is sufficient 

credible evidence to uphold the jury verdict. 

At the time in question, 27-1-221, MCA, (1983), 

provided that punitive damages may be awarded where "the 

defendant has been guilty of oppression, fraud, or malice, 

actual or presumed . . . " In Flanigan, we recognized that 

the jury can infer malice from a lack of candor on the part 

of the employer. 720 P.2d at 265, 43 St.Rep. at 951. The 

apparent lack of candor on the part of Herring is sufficient 

for the jury to have inferred malice. 

The judgment of the District C-ourt is affirmed. 

/ i 

We Concur: 

Chief Justice 
Mr. Justice L. C. Gulbrandson, dissenting. 

I respectfully dissent. 

The majority, in affirming the award of $200,000 

compensatory damages to include 28 years of lost income in 

the future, and $70,000 punitive seems to rely mainly on (a) 

objective manifestations of job security for Stark, (bl 

evidence of inaccurate inventory figures used by Herring, and 

(c) lack of candor by Herring to infer malice sufficient to 

justify the punitive damage award. 

Any objective manifestations of job security given 

Stark by way of positive write-ups, promotions and salary 

increases were prior to the inventory shortages arising in 

the spring of 1984. From that time, until termination on 

August 22, 1984, there were no positive write-ups, 

commendations, or salary increases for Stark, but there were 

meetings, counsellings, and discussions regarding the serious 

matter of major inventory shortages in the district. The 

inventory shortages supplied to Herring, as District Manager, 

indicated that Stark had the worst inventory shortages of any 

zone manager in Herring's district. The actual inventory 

figures, for Stark's zone, supplied to Herring were: April 

-- $3,469.19 short; May -- $608.70 overage; June -- $1,340.44 

short; July -- $3,244 short; and preliminary August figures 

-- $6,750 short. The September overages obviously were not 

available until after Stark's refusal to sign the employee 

counseling report and subsequent termination on August 22. 

The majority opinion overlooks the fact that Stark was 

present during the inventories, made no objection to the 

figures, signed the inventories, and failed to implement the 

control inventory procedure if he thought the inventory 

figures were incorrect, even though he had participated in 

twenty-three inventories as a manager. The manner in which 
Stark was discharged, in my opinion, did not indicate any 

basis to submit the issue of punitive damages to the jury. 

The record is clear that both meetings between Herring and 

Stark took place in a private, secluded place with no other 

persons present. The discussions were limited to control of 

inventories and the request that Stark sign the counselling 

report. Herring testified that no other Circle K employee or 

manager had ever refused his request to sign the counselling 

report and the evidence is clear that Stark drafted similar 

reports and required that his subordinates sign them. The 

fact that Herring had Stark's final. paycheck with him at the 

second meeting cannot, in my opinion, be used to infer malice 

justifying punitive damages. Herring testified that had 

Stark signed the counselling report upon the second request, 

Stark would not have been terminated, but, in anticipation 

that Stark might again refuse to sign, he had the check 

prepared because he thought he had to deliver an employee's 

final check within 24 hours. Section 39-3-205(2), MCA, is as 

follows: 

(2) When an employee is separated for 

cause from employment by the employer, 

all the unpaid wages of the employee 

shall become due and payable immediately 

upon such separation. 

Section 39-3-206, MCA, provides the following penalties for 

failure to comply with S 39-3-205: 

Any employer, as such employer is defined 

in this part, who fails to pay any of his 

employees as provided in this part or 

violates any other provision of this part. 

shall be guilty of a misdemeanor. A 

penalty shall also be assessed against. 

and paid by such employer and become due 

such employee as follows: a sum 

equivalent to the fixed amount of 5% of 

the wages due and unpaid shall be 

assessed for each day, except Sundays and 
legal holidays, upon which such failure 

continues after the day upon which such 

wages were due, except that such failure 

shall not be deemed to continue more than 

20 days after the date such wages were 

due. 

It seems that a Catch-22 situation has been created 

when an employer, attempting to comply with a statute to 

avoid a misdemeanor conviction and a doubling of wages due an 

employee, can have evidence of said attempts at payment used 

against him to justify an award of punitive damages. 

The transcript of the final oral argument of 

plaintiff's counsel includes the following: 

[Llike Mr. Milodragovich said, you've got 

to send a message to Phoenix, you've got 

to tell these people that in Butte, 

Montana, you've got to follow your 

policies because that is what the law 

says. These people only understand 

money. That is all they understand is 

money. That is the bottom line. That is 

why they are in business. There is an 

exhibit in here that says that the gross 

sales of Circle K Corporation is 1.6 

Billion Dollars. Big, big company. It 

says here that the net worth is 122 

Million Dollars. Now, I would think that 

if a Million dollars was had to be paid 

by this company that they would get it 

right the next time. That they wouldn't 

push people around. That they would 

admit that they did things wrong. That 

is the only way that you are ever going 

to teach these people what they are 

doing. It's like sending a message to 

Phoenix just like Mr. Milodragovich said. 

You know what the crowning glory is in 

this case? It's that Cheryl Wellnitz 

came down from Great Falls with Mr. 

Herring on the 22nd to drive Greg Stark's 

car back. He knew he was going to 

terminate Greg Stark on the 22nd. It 

wasn' t that he gave him another 
opportunity to sign that report. He was 

getting rid of him. He didn't want to 

check into any information. He was 

getting rid of him. His final pay check 

was made out. He had that with him. If 

he didn't intend to fire him, what did he 

have the final pay check for? . . . 

In my opinion, the issue of punitive damages should not 

have been allowed, over objection, to be considered by the 

jury, and the trial judge should have so ruled, based upon 

the evidence presented. 

The failure of the trial judge to dismiss the punitive 

damages claim, and the subsequent refusal to enter judgment 

n.o.v., or to grant a new trial, in my view, constitutes 

reversible error. 

By allowing evidence of the defendant's company's gross 

sales of over 1.5 billion dollars and a net worth of over 122 

million dollars, the entire trial was contaminated with 

highly prejudicial, but wholly irrelevant, evidence. 

I would therefore reverse the judgment entered and 

would remand for a new trial on the issue of breach of the 

covenant of good faith and 

Mr. Justice John Conway Harrison joins in the forgoi,ng dissent 

of Mr. Justice L. C. Gulbrandson. 

Mr. Chief Justice J. A. Turnage co curs in the foregoing dissent 

of Mr. Justice L. C. Gulbrands d n. k "u ef Justice