No. 80-153 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1981 

HARRY J. MASSETT, 

Plaintiff and Appellant, 

THE ANACONDA COMPANY, and 

METROPOLITAN LIFE INSURANCE CO., 

Defendants and Respondents, 

Appeal from: District Court of the ThPrd Judicial District, 

In and for the County of Deer Lodge, The Honorable 

Robert Boydr Judge presiding. 

Counsel of Record: 

For Appellant; 

Greg J. Skakles argued, Anaconda, Montana 

For Respondents: 

Poore, Roth, Robischon & Robinson, Butte, Montana 

Robert A. Poore argued, Butte, Montana 

Submitted: ~pril 24, 1981 

2 1961 Filed :-- 
Mr. Justice Frank B. Morrison, Jr., delivered the Opinion of 

the Court 

Plaintiff, Harry J. Massett, a long-time employee of 

the Anaconda Company, brought an action on May 10, 1976, 

against defendant Anaconda Company for an alleged breach of 

a collective bargaining agreement. After engaging in discovery, Anaconda moved for summary judgment. The Deer Lodge 

County District Court granted the motion on February 22, 

1980. Plaintiff appeals. For reasons discussed below, we 

vacate the order of the District Court granting summary 

judgment . 

Plaintiff was employed by the Anaconda Company from 

1944 to 1975. He contends that he became unable to work due 

to illness in January of 1975. 

In April or May 1975, plaintiff first discussed the 

possibility of receiving a disability pension with Anaconda 

Company personnel. Section 2.2 of the pension plan provides 

pension benefits for an employee who has become totally 

disabled by bodily injury or disease so as to be prevented 

"from engaging in any substantial gainful work which, in the 

opinion of a qualified physician appointed by the Employing 

Company, will be permanent and continuous during the remainder 

of the Empl-oyee's lifetime" and which is not self-inflicted, 

the result of service in the armed forces or the result of 

criminal activity. In October of 1975, plaintiff applied 

for a disability pension for the first time. Part of the 

application form supplied by the Company was to be filled 

out by a physician. Plaintiff took the form to Dr. John 

Romito who had been treating his condition. 

The form which Dr. Romito completed contained an erroneous 

definition of total disability. It defined the concept in 
terms of inability due to disease or bodily injury to pursue 

- any gainful employment or occupation whatsoever. The medical 

form contained alternate boxes for the examining physician 

to check, specifying either that the patient was or was not 

totally and permanently disabled. Dr. Romito did not check 

either box, but rather attached a note to the form which 

read: 

"I do not feel this patient can be considered 

totally disabled but he is not able to resume 

his normal employment as a smelterman due to 

exposure to industrial fumes." 

The Company processed the application for disability benefits, 

but ultimately rejected it in November 1975. 

In December 1975, plaintiff's attorney requested new 

medical forms containing a correct definition of total and 

permanent disability. Anaconda representative R. L. Brown 

provided those forms in a letter dated January 5, 1976. 

On the advice of counsel plaintiff came to the Company's 

personnel office on January 26, 1976, and spoke to the 

Company representative, Harry McKernan. Plaintiff told 

McKernan that he would like to receive a "conditional" 30- 

year retirement pension until such time as he could reapply 

for and begin receiving benefits under a disability pension. 

Under section 2.6 of the pension plan, any employee who has 

completed 30 years or more of continuous service to the 

Company but who has not attained the age of 60 may retire 

and receive a so-called "30-year" pension. On December 30, 

1975, plaintiff's attorney had written McKernan a letter 

informing the Company that he had advised his client to 

apply for the 30-year pension and that the Company should 

not construe this application as a waiver of plaintiff's 

claim to a disability pension. Plaintiff asserts that his 

poor financial condition and the Company's denial of his 
original application for a disability pension necessitated 

his applying for a 30-year pension. Plaintiff's retirement 

became effective February 1, 1976. 

On February 6, 1976, Dr. Robert Burroughs, a cardiologist 

in Spokane, Washington, completed a disability pension form 

containing the correct definition of total disability and 

checked the box on the form indicating that plaintiff was 

totally and permanently disabled. That medical form was remitted to the Company on February 17, 1976. On March 24, 

1976, the Company responded that, inasmuch as plaintiff had 

voluntarily applied for and was receiving a 30-year pension, 

the question of his eligibility for a disability pension had 

become "academic." The Company refused to process the claim 

for disability benefits. 

Plaintiff then filed the present action. The trial 

court granted summary judgment to the Anaconda Company 

because, in its view, receipt of the 30-year pension barred 

application for a disability pension and further that the 

plaintiff's failure to implement the contract' s grievance 

procedure barred the maintenance of an action in the courts. 

The following issues are dispositive of this appeal: 

1. May, under the terms of the collective bargaining 

agreement, a retiree apply for a disability pension after he 

has been granted a 30-year pension if he was disabled before 

he retired? 

2. Was the Company guilty of bad faith in rejecting 

plaintiff's claim for disability benefits on grounds that 

his receipt of a 30-year retirement barred a disability 

pension, thereby entitling the plaintiff to bypass the 

grievance procedure and litigate in the District Court? 

At the outset, we note that subject matter jurisdiction 
over this case derives from section 301.(a) of the Labor 

Management Relations Act of 1947 (LMRA) , (Taf t Hartley Act) , 

codified at 29 U.S.C. §185(a). Although, generally the 

National Labor Relations Act preempts state and federal 

court jurisdiction to remedy conduct that is permitted or 

prohibited by the Act (San Diego Building Trades Counci.1 v. 

Garmon (1959), 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775), 

there are a number of significant exceptions. Section 

301(a) of the LMRA expressly authorizes suits in federal 

court for the enforcement of a collective bargaining agreement. 

Federal jurisdiction is not, however, exclusive. It has 

been specifically held that state courts have concurrent 

jurisdiction under section 301 to entertain a suit by an 

individual employee for breach of a collective bargaining 

agreement. Local 174 Teamsters Union et al. v. Lucas Flour 

Co. (1962), 369 U.S. 95, 101, 82 S.Ct. 571, 7 L.Ed.2d 593; 

Charles Dowd Box Co. v. Courtney (1962), 368 U.S. 502, 82 

S.Ct. 519, 7 L.Ed.2d 483. The substantive rules governing 

the interpretation of collective bargaining agreements are 

controlled by federal law which the federal courts must 

fashion from the policy underlying the national labor laws. 

Textile Workers Union v. Lincoln Mills (1957), 353 U.S. 448, 

?idl 917- 18 

456-457, 77 S.Ct. m, 1 L.Ed.2d 972, 980-981. The courts 

may, however, resort to compatible state law to find the 

rule that will best effectuate federal policy. Li.ncol-n 

Mil-ls, supra, 1 L.Ed.2d at 981. 

Except in the rather narrow field of suits to compel 

performance of arbitration agreements (see - United Steelworkers v. Warrior & Gulf Nav. Co. (1960), 363 U.S. 574, 

578-579, 80 S.Ct. 1347, 4 L.Ed.2d 1409), we have found no 

federal authority "suggesting that the nebulous body of 
decisional law envisioned in Lincoln Mills was to be formulated in derogation of the common law of contracts", Lee 

Washington, Inc. v. Washington Motor Truck Transportation 

Employees Health and Welfare Trust (D.C. App. 1973), 310 

A.2d 604. Hence, we see no reason not to apply the same 

rules of construction in cases involving collective bargaining 

contracts as we apply in cases dealing with contract law 

generally. See Clarke v. Ward Baking Co. (D.C.App. 1963), 

191 A.2d 450, 452. 

We turn now to the first issue raised by the plaintiff 

on appeal. The plain language of section 2.2 of the pension 

plan entitles an employee to a disability pension if he 

becomes totally and permanently disabled and if he has 

completed ten years of continuous service to the Company. 

In other words, a worker with the requisite number of years 

of service has a vested right to a disability pension if he 

can show that he became disabled while employed with the 

Company. 

The record shows that the plaintiff had logged well in 

excess of ten years of continuous service to Anaconda as of 

the date he ceased working for the Company. Plaintiff 

claims to have become disabled while he was in the employ of 

the Company. If he can prove that contention, he is entitled to disability benefits. 

The Company argues, however, that the plaintiff rendered 

himself ineligible for any disability benefits by applying 

for a 30-year pension. He thereby relinquished his employment status, Anaconda argues, and became a "pensioner". 

Only employee^"^ the Company insists, may apply for disability 

benefits. We disagree. Plaintiff's acceptance of a 30-year 

pension does not constitute an election of remedies nor a 

waiver. 
As a legal doctrine, election is the exercise of a 

choice of an alternate and inconsistent right or course of 

action. Full knowledge of the nature of inconsistent rights 

and of the necessity of choosing between them are elements 

of election. Eckstein v. Caldwell (1938), 61 R.I. 142, 200 

A. 434, 437 (election of remedies presupposes the knowledge 

of alternatives with an opportunity for choice); Frederickson 

v. Nye (1924), 110 Ohio St. 459, 144 N.E. 299, 301 (in order 

that election of one remedial right shall bar another, the 

rights must be inconsistent and the election must be made 

with knowledge). Plaintiff's application for a 30-year 

retirement can in no sense be understood as an election of 

one out of two potential alternate remedies to the disability 

he allegedly suffered while on the job. The only disabilityrelated remedy he sought was a disability pension. His 

claim to the 30-year pension rested on a different factual 

basis, namely his 30 years of service to the Company. In 

short, the doctrine of election of remedies does not apply 

for the simple reason that the record reveals no alternate 

remedies from which to elect. 

If the plaintiff was indeed disabled while he was still 

an employee with the Company, the only way he could lose his 

vested right to a disability pension would be by waiving 

that right. By definition waiver is the intentional relinquishment of a known right. The record shows that the 

plaintiff has not waived his claim to a disability pension. 

He expressly informed Anaconda representative McKernan that 

he wanted to take out a 30-year pension "conditionally" -- 

i.e., until he could begin receiving a disability pension. 

In addition, his attorney sent a letter to the Company 

stating that his client's application for a 30-year retirement, was not to be understood as a waiver of his claim to 
disability benefits. Clearly the plaintiff did not intend to 

relinquish any right he may have had to a disability pension. 

The mere fact that the Company representatives contended 

that receipt of one kind of pension precluded application 

for another kind did not deprive the plaintiff and his 

attorney of the right to interpret the provisions of the 

pension plan differently. 

The plaintiff does not claim that he is entitled to the 

cumulative benefits of both the disability and the 30-year 

pension. Plaintiff seeks a disability pension because the 

benefits are greater than the benefits available under the 

30-year pension plan. He laid claim to the 30-year pension 

"conditionally" and will only be limited to that plan if he 

cannot qualify for disability benefits. 

The next inquiry is whether the Company acted in good 

faith in refusing to process the application. Anaconda rejected the plaintiff's application because, in its view, the 

plaintiff had voluntarily relinquished his employment status 

and had become a "pensioner" by applying for a 30-year retirement. As such, the Company contended plaintiff was no 

longer eligible for a disability pension because under 

section 2.2 of the pension plan only "employees" are eligible 

for disability. 

The essential inquiry is whether Anaconda asserted that 

defense to plaintiff's application in good faith. If the 

Company acted in bad faith in refusing to implement arbitration, then we would allow the District Court action to go 

forward without resort to the procedure required by the collective bargaining agreement. 

We find the record to be devoid of any indication that 

the Company acted in bad faith. There is no evidence of any 
personal enmity towards, nor of any discrimination against, 

the plaintiff. 

We have considered Anaconda's defense on the merits. 

Because we today disagree with the Company's legal position, 

does not mean that the Company had no right to assert that 

position. 

Where the record lacks any affirmative evidence of bad 

faith, we will neither presume nor accept conclusory assertions 

that a litigant's claim or defense is unjustified unless it 

is so patently frivolous as to plainly exclude any reasonable 

merit. Here we hold that Anaconda's refusal to process 

plaintiff's claim was made in good faith. 

The legal question of plaintiff's eligibility for benefits was a matter for judicial determination. Now that the 

determination has been made, arbitration procedures must follow. 

Section 5.2 of the pension plan provides a grievance procedure 

to settle any medical dispute concerning an employee's 

eligibility for disability pensions. Under that section the 

Company must refer any dispute concerning an applicant's 

disability to a medical board for resolution. 

Accordingly, we remand the case to the ~istrict Court 

with directions to order the Anaconda Company to proceed with 

arbitration. 

We concur: 

Chief Justice 
Mr. Justice Daniel J. Shea dissents and will file a dissenting 

opinion later.