No. 96-306 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1996 

ADELINE EADUS, 

Plaintiff and Appellant, 

v. 

WHEATLAND MEMORIAL 

HOSPITAL & NURSING HOME, 

1 ,\ \@$ 

Defendant and Respondent. 1.3(1\~ , 

APPEAL FROM: District Court of the Fourteenth Judicial District, 

In and for the County of Wheatland, 

The Honorable Roy C. Rodeghiero, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Craig W. Holt 

For Respondent: 

; Holt Law Office, Billings, Montana 

James D. Walen; Stacey & Walen, Billings, Montana 

Filed: 

Submitted on Briefs: October 24, 1996 

Decided: November 14, 1996 
Justice Karla M. Gray delivered the Opinion of the Court. 

Adeline Eadus (Eadus) appeals from the judgment entered on the 

order of the Fourteenth Judicial District Court, Wheatland County, 

granting Wheatland Memorial Hospital & Nursing Home's (Wheatland) 

motion for summary judgment, and from the deemed denial of her Rule 

59(g), M.R.Civ.P., motion to amend. We reverse. 

The sole issue on appeal is whether the District Court erred 

in granting Wheatland's motion for summary judgment on the basis 

that Eadus' action was barred under § 39-2-911 (2) , MCA, because she 

failed to exhaust internal grievance procedures prior to filing a 

complaint. 

Eadus began her employment with Wheatland in 1975. Diane 

Jones (Jones), Wheatland's administrator, terminated Eadus' 

employment on July 12, 1994. Eadus filed a complaint against 

Wheatland in the District Court on March 13, 1995, alleging 

wrongful discharge under Montana's Wrongful Discharge From 

Employment Act (WDEA) . Both parties conducted discovery and the 

depositions of Eadus, Jones and Meridith Shelstead, Eadus' 

supervisor at the time of the discharge, were taken. A pretrial 

order was entered. 

A jury trial on Eadus' complaint was scheduled for March 12, 

1996. Prior thereto, Wheatland raised the issue of whether Eadus' 

action was barred by § 39-2-911 (2) , MCA, because Eadus failed to 

exhaust its internal procedures regarding appeal of a discharge 

from employment. Because Wheatland relied, in part, on Jones' 
deposition testimony, the District Court converted the matter into 

a motion for summary judgment and properly notified the parties of 

its decision to do so. During a telephonic conference on the 

motion, the parties agreed that no genuine issue of material fact 

existed relating to 5 39-2-911, MCA. The parties also agreed that 

the District Court properly could determine the summary judgment 

motion on the legal issue of whether § 39-2-911(3), MCA, required 

Wheatland to provide Eadus with a copy of its written internal 

procedures regarding appeal of the discharge where it was 

undisputed that Eadus had received a copy of those procedures in 

1989. 

The District Court subsequently entered its Memorandum and 

Order determining that no genuine issue of material fact existed 

and that Wheatland was entitled to judgment as a matter of law 

because it had substantially complied with the requirements imposed 

by § 39-2-911 (3), MCA. The court relied primarily on Hoffman v. 

Town Pump, Inc. (1992), 255 Mont. 415, 843 P.2d 756. Judgment was 

entered dismissing Eadus' complaint and notice of entry of judgment 

was served. Eadus filed a Rule 59(g), M.R.Civ.P., motion to amend 

which subsequently was deemed denied by operation of law. Eadus 

appeals. 

Did the District Court err in granting Wheatland's motion 

for summary judgment on the basis that Eadus' action was 

barred under § 39-2-911 (2) , MCA, because she failed to 

exhaust internal grievance procedures prior to filing a 

complaint? 

Summary judgment is proper when no genuine issues of material 

fact exist and the moving party is entitled to judgment as a matter 
of law. Rule 56(c), M.R.Civ.P. "Material issues of fact are 

identified by looking to the substantive law governing the 

proceeding." Matter of Estate of Lien (1995), 270 Mont. 295, 299, 

892 P.2d 530, 532 (citation omitted). We review a district court's 

grant or denial of a motion for summary judgment de novo, applying 

the same Rule 56(c), M.R.Civ.P., criteria used by that court. 

Johnson v. Nyhart (1995), 269 Mont. 379, 384, 889 P.2d 1170, 1173 

(citations omitted) 

Section 39-2-911(1), MCA, contains a one-year statute of 

limitations for bringing a wrongful discharge action under the 

WDEA. Section 39-2-911(2), MCA, provides that, where an employer 

maintains written internal procedures for appealing a discharge, 

the limitation period generally is tolled until those procedures 

are exhausted. 

Section 39-2-911, MCA, further provides, in pertinent part: 

(2) If an employer maintains written internal 

procedures . . . under which an employee may appeal a 

discharge within the organizational structure of the 

employer, the employee shall first exhaust those 

procedures prior to filinq an action under this part. 

The em~lovee's failure to initiate or exhaust available 

internal procedures is a defense to an action brouqht 

under this part. . . . 

(3) If the employer maintains written internal 

procedures under which an employee may appeal a discharge 

within the organizational structure of the employer, the 

employer shall within 7 davs of the date of the discharse 

notifv the discharsed employee of the existence of such 

procedures and shall supply the discharsed emplovee with 

a copy of them. If the emplover fails to complv with 

this subsection, the discharaed emplovee need not complv 

with subsection (2L. 

(Emphasis added.) Thus, the legislature has mandated in § 39-2- 

911(2), MCA, that, where an employer has written internal 
procedures pursuant to which a discharged employee may appeal a 

discharge, the employee must exhaust those procedures prior to 

filing a wrongful discharge complaint in the district court. The 

penalty for an employee's failure to do so is severe; such a 

failure "is a defense to an action brought under [the WDEA] . 

Section 39-2-911(2), MCA. 

Tn order to facilitate the use of such procedures, however, 

and to ensure that an employee is not required to exhaust 

procedures of which he or she may be unaware or to which he or she 

does not have access, the legislature placed corresponding 

obligations on an employer which has such written internal 

procedures. Pursuant to § 39-2-911(3), MCA, the employer having 

written internal procedures must--within seven days of the 

discharge--notify the employee of the existence of such procedures 

and supply the discharged employee with a copy of them. 

Applying the "material facts" standard from Estate of Lien to 

the terms of the statute at issue here, it is clear that the first 

two facts material to the availability of the employer defense 

contained in § 39-2-911(2), MCA, are whether the employer has 

written internal procedures for appealing a discharge and whether 

the discharged employee utilized those procedures. These facts are 

undisputed in this case. Wheatland has such internal procedures 

and Eadus neither initiated nor exhausted those procedures. As a 

result, Wheatland was entitled to summary judgment pursuant to the 

defense contained in § 39-2-911(2), MCA, provided it met the 

requirements of § 39-2-911(3), MCA. 
The facts material to § 39-2-911(3), MCA, are whether, within 

seven days of the date of the discharge, the employer notified the 

employee of the existence of the internal procedures and supplied 

a copy of the procedures to the employee. Here, it is undisputed 

that Jones notified Eadus of the existence of the internal 

procedures at the time she discharged Eadus. It also is undisputed 

that Jones did not supply a copy of those procedures to Eadus at 

that time or within seven days of the discharge. Therefore, it is 

clear that Wheatland did not meet the second requirement contained 

in § 39-2-911(3), MCA. 

Section 39-2-911(3), MCA, expressly provides that, if the 

employer fails to comply with the two requirements therein, the 

discharged employee need not comply with the exhaustion of internal 

procedures requirement set forth in § 39-2-911(2), MCA. Applying 

the plain language of the statute here, Eadus was not required to 

exhaust Wheatland's internal procedures and, as a result, Wheatland 

was not entitled to judgment as a matter of law based on Eadus' 

failure to do so. 

Wheatland argues, however, that it was not required to give 

Eadus another copy of the internal procedures because she had 

received a copy in 1989. It relies, as did the District Court, on 

Hoffman. Hoffman is inapplicable here. 

In Hoffman, the employee resigned effective August 24, 1989, 

and filed a wrongful discharge action, based on constructive 

discharge, against his former employer the same day. At the close 

of the employee's case in chief at trial, the district court 
granted the employer's motion for a directed verdict on the basis 

that the employee had not initiated or exhausted internal grievance 

procedures prior to bringing suit. Hoffman, 843 P.2d at 757-58. 

The employee contended on appeal that, because the employer 

did not notify him of the existence of the grievance procedures or 

supply a copy of those procedures within seven days, as required by 

5 39-2-911(3), MCA, he was not required to initiate or exhaust the 

procedures. The employer contended, as Wheatland does here, that 

the employee previously had received a copy of the procedures; 

indeed, in Hoffman, the employee had utilized them during an 

earlier dispute. Thus, according to the employer, the employee had 

constructive notice of the procedures and was required to comply 

with them. Since he did not, the employer argued that 5 39-2- 

911(2), MCA, provided it with a defense to the employee's 

constructive discharge action. Hoffman, 843 P.2d at 758. 

Under the circumstances before us, we declined to address the 

statutory arguments advanced by the parties. Hoffman, 843 P.2d at 

758. Instead, we focused on the unique fact that the employee had 

filed his complaint on the same day he terminated his employment by 

resigning, thereby effectively precluding the employer from 

complying with its obligations under § 39-2-911(3), MCA. Hoffman, 

843 P.2d at 758. Under that circumstance, we observed that " [ilt 

would have been impossible for [the employer] to notify [the 

employee] of the written procedures within seven days of the 

discharge prior to the commencement of the action." Hoffman, 843 

P.2d at 758. On that basis, we concluded that the employee's 
immediate filing of a complaint alleging constructive discharge 

rendered the employer unable to comply with § 39-2-911(3), MCA, and 

did not excuse the employee's § 39-2-911(2), MCA, obligation to 

exhaust the available internal grievance procedures. Hoffman, 843 

P.2d at 759. 

Hoffman does not support Wheatland's position here that Eadus' 

1989 receipt of its internal grievance procedures was sufficient to 

constitute compliance with its obligation under § 39-2-911(3), MCA, 

to provide a copy of such procedures within seven days of the 

discharge. In Hoffman, we specifically declined to address the 

"constructive notice" argument advanced by the employer as an 

alternative to actual compliance with § 39-2-911(3), MCA. 

Moreover, Hoffman is distinguishable on the dispositive fact upon 

which we premised our decision--namely, the employee's filing of a 

wrongful discharge complaint on the very day his resignation based 

on an alleged constructive discharge occurred. That fact is not 

present here, where Eadus was discharged on July 12, 1994, and 

filed her complaint in March of 1995. 

Section 39-2-911, MCA, establishes a auid pro auo under which 

an employee's failure to exhaust written internal grievance 

procedures constitutes a defense against the action, but only when 

the employer has met its precedent obligations to notify the 

discharged employee of the internal procedures and to provide a 

copy of those procedures within seven days of the discharge. 

Allowing an employer to rely on "constructive notice" or 

"substantial compliance" with the requirements of § 39-2-911 (3) , 
MCA, would unbalance the statutory auid pro auo. 

We conclude, therefore, that the requirements contained in 

5 39-2-911 (3) , MCA, must be met before an employer can avail itself 

of the defense set forth in § 39-2-911(2), MCA. We further 

conclude that Wheatland's failure to comply with the second 

obligation imposed on it by 5 39-2-911(3), MCA, precluded its 

reliance on the "employee's failure to exhaust" defense contained 

in 5 39-2-911 (2) , MCA. We hold, therefore, that the District Court 

erred in concluding that Wheatland was entitled to judgment as a 

matter of law under 5 39-2-911(2), MCA, and in granting its motion 

for summary judgment on that basis 

Reversed and remanded. 

h 

\ 

We concur: