No. 92-083 IN THE SUPREME COURT OF THE STATE OF MONTANA

JAMES ALLISON, Plaintiff and Respondent,

v. JUMPING HORSE RANCH, INC., Defendant and Appellant.

APPEAL FROM: District Court of the Fifth Judicial District, In and for the County of Madison, The Honorable Frank Davis, Judge presiding.

COUNSEL OF RECORD: For Appellant: Richard C. Nellen and JamesA. McLean, Drysdale,McLean, Nellen & Nellen, Bozeman, Montana; Michael P. Sand, Sand Law Offices, Bozeman, Montana For Respondent: Edmund P. Sedivy, Jr., and David L. Weaver, Morrow, Sedivy & Bennett, Bozeman, Montana

Submitted on Briefs: August 6, 1992 Decided: December 8, 1992 Filed:Justice William 

### E, Hunt, Sr., delivered the opinion of the Court. Respondent James ~llisonbrought his claim for wrongful discharge in the Montana Fifth Judicial District Court, Madison County. Appellant Jumping Horse Ranch filed a motion for summary judgment claiming the statute of limitations had passed. The motion was denied by the District Court. After respondent had presented his case in chief,appellantmoved for a directed verdict

on the same basis as the motion for summary judgment, which was also denied, The 

### jury returned a verdict in favor of respondent. Appellant appeals from both denials. We affirm. We rephrase appellant's issue as follows: At what point, under 8 39-2-911(1), MCA, of the Wrongful Discharge From Employment Act, does the statute of limitations begin to run? In 1971, respondentwas hired as a ranchmanager by Robert 

### M. Beck,owner of theJumpingHorse

### Ranch, Inc. (hereinafterqtranchtl) 

# . Respondent worked for appellant for approximately 17 years. Apparently during the 1980s the ranch began losing money. On July 12, 1988, Beck notified respondent that he was to 

### be terminated as an employee because Beck believed he 

### was burned out

on ranching and would "jump shiptt and start his own outfitting business. However,on the sameday,Beck requested that respondent stay onuntil October 1, 1988,to assist and train the newmanager, which respondent agreed to

### do. Respondent continued to receive

### his$3000 monthly salary and benefits. On November 3, 1988, Beck, as president of the ranch, signed a census report regarding the ranch's employeepension program which listed respondent's date of termination as October 1, 1988. On September 29, 1989, respondent filed 

### a complaint for wrongful discharge against appellant. Respondent complained that he was wrongfully terminated because of Mrs. Helen Beck's figrumblings.l' OnMay 29, 1990, appellant filed a motion for summary judgment

on thebasis that the statute of limitations had passed,

### pursuant to 5 39-2-911 (1)

### , MCA. The motion was denied. After respondent presented his case in chief,appellantmoved for a directed verdict

on the same basis. This motion was also denied. On January 24, 1992,the jury returned a unanimous verdict in favor of respondent. Appellant appeals the denial of both motions. At what point, under 39-2-911(1), MCA, of the Wrongful Discharge From Employment Act, does the statute of limitations begin 

### to run? Appellant 

### argues that the time begins to 

### run from the notice of discharge. The legislature 

### has expressly intended that the Wrongful Discharge From EmploymentAct be the exclusive remedy forwrongful discharge. Section 39-2-902, MCA. The Act preempts common law remedies and alters the statute of limitations that could be obtainedunder common 

### lawtheory forbreach 

### of the implied covenant of good faith and fair dealing. Sections 39-2-913 and -911, MCA. 3The statute of limitations for bringing a wrongful discharge claim is governed by § 39-2-911 (I), MCA, which states that "an action under this part must be filed within 1 year after the date of discharge. " Section 39-2-903 (2)

### , MCA, defines "discharge" as including: [Clonstructivedischargeasdefined in subsection (1)and any other termination of employment, including resignation, elimination of the job, layoff for lack of work, failure to recall or rehire, and any other cutback in the number of employees for a legitimate business reason. [Emphasisadded.] The statute fails to define "termination of employment" and is silent as to when the "termination of employment" would become effective. Therefore,we must determine what was the intention of the legislaturewhen theWrongful Discharge From Employment Act was passed. In order tomake that determinationwe must first look to the plain meaning of thewordsused in the statute. Missoula County v. American Asphalt, Inc. (1985), 216 Mont. 423, 701 P.2d 990. To interpret a phrase within the plain meaning rule, ""the language used must be reasonably and logically interpreted, giving words their usual and ordinary meaning."" American Asphalt, 701 P.2d at 992 (quoting InreMatter ofMcCabe (1975)

## , 168 Mont. 334, 339, 544 P.2d 825, 828). 'ITerminationof employment" is a term of art and refers to the existence of the relationship of employer and employee. It has been defined to mean "a complete severance of the relationship ofemployer and employee by positive act on the part of either or both." Edwards v. Equitable Life Assur. Soc. (Ky. 1944), 177 S.W.2d 574, 577. See also Black's Law ~ictionary1641 (Rev. 4th ed. 1968). We have previously defined "terminate" as meaning 'Iu[t]o put an end to; to make to cease; to end."" Towne v. Towne (1945), 117 Mont. 453, 465, 159 P.2d 352, 357, (quotingWebstergs International Dictionary (2d ed.) )

# . Appellant contends that respondent failed to file his claim forwrongful dischargewithin the applicable statuteof limitations under 5 39-2-911, MCA, and relies on our holding in 

### arti in v. Special Resource Management, Inc. (1990), 246 Mont. 181, 803 P.2d 1086. 

### InMartin,

### we stated that the statute of limitations begins to run on a terminated employee's action for breach of the implied covenant of good faith and fair dealing on the date of notice given to the employee. Appellant argues that although Martin did not address the Wrongful isc charge From Employment

### Act, the reasoning behind 

### the decision 

### is stillvalid in that if 

### a person is standing on the edge of 

### a cliff and is pushed off, he need not wait to 

### hit the ground before knowing his cause of action accrued. We disagree. We specifically limited theholding in Martin to the facts of the case. Inthat case,the appellantwas given notice on June 2.6, 1987, that her position would be terminated on July 17, 1987, slightly more than two weeks after the Wrongful Discharge From Employment Act became effective. The issue phrased in 

### arti in was 5It[a]twhat point did an actionable cause for termination arise in this case--upon notice of the termination or when termination became effective?" [Emphasis added.] Martin, 803 P.2d at 1087. This Court held that it was upon notice of termination because all of the elements of her cause of action accrued at the time of notice, and therefore, the Wrongful Discharge From Employment Act

was not applicable to her cause of action. In Kitchen Krafters, Inc. v. Eastside Bank (1990), 242 Mont. 155, 789 P.2d 567, which is also a case based on the theory of breach of the implied covenant of good faith and fair dealing,we analyzed when an action commenced under § 27-2-102, MCA, by stating: (1) For purposes of statues relating to the timewithin which an action must be commenced: (a) a claim or cause of action accrues when all elements of the claim or cause exist or have occurred, the right to maintain an action on the claim or cause is complete and a court or other agency is authorized to accept jurisdiction of the action.

(2) Unless otherwiseprovided by statute,the period of limitation begins when the claim or cause of action accrues. Lack of knowledge of the claim of cause of [sic] action, or its accrual, by the party to whom it has accrued does not postpone the beginning of the period of limitation. As the language of this statute makes clear, the statute of limitations does not begin to run until all elements of a cause of action are in existence. For example, in a negligence action theplaintiff must prove four elements:

### 1) Existence of a duty 2) 

### Breach of the duty 3) 

### Causation 4) 

### Damages.



# . . . If these elements are not in existence, the plaintiff could not successfullybring a cause of action based upon negligence. Therefore, although one may be able to establish the existence and breach of a duty,he cannot successfully assert his cause of action until he has sustained an injury 

# . . . 

# . [Citations omitted.] Kitchen Krafters, 789 P.2d at 571. Under the Wrongful Discharge From Employment Act, damages do not occuruntil the employee isno longer earning compensation from the employer, which under the Act is lost wages and fringe benefits, and this can only occur upon a complete severance of the employer-employee relationship. In this instance, there was not a complete severance of the employer-employee relationship. Respondent continued to work for appellant for another twomonths, training another individual as a ranch manager. He continued to earn his usual pay and benefits. Inaddition,appellant signed a pension plan census report stating that respondent's date of termination was October 1, 1988. 

### Respondent's cause of action would not accrue until he stopped earning his salary and benefits. The Wrongful Discharge From Employment Act grants that an employee may be "awarded lost wages and fringe benefits for a period not to exceed 4 

### years from the date of discharge 

# . . . ." Section 39-2-905(1), MCA. Respondentlost his wages and fringe benefits on October 1, 1988. We hold that the District Court did not err in denying appellant's motion for summary judgment and directed verdict. We affirm.

Justice

We concur:

# 1 December

### 8,1992 CERTIFICATEOFSERVICE I Iherebycertify that the followingorderwassentby United States mail,prepaid,to thefollowing named:

MichaelP.Sand Sand Law Offices 502So. 19th Ave. Bozeman.MT 59715 Richard A.Nellen andJamesA.McLean Drysdale,McLean,Nellen &Nellen 1800W. Koch,Ste

### 5 Bozeman,MT 59715

EdmundP. Sedivy,Jr.andDavidL.Weaver Morrow,Sedivy&Bennett P.O. Box 1168 Bozeman,MT 59771-1168

EDSMITH CLERKOFTHE SUPREMECOURT