No. 95-026 INTHESUPREMECOURTOFTHESTATE OFMONTANA 1995

WEND1BRUNER,

Plaintiff, Appellant,

YELLOWSTONECOUNTY.ABODY POLITIC, YELLOWSTONECOUNTYATTORNEY, DENNIS PAXINOS, SR., MICHAEL S. MATTHEW, H. ELWOODENGLISH, ANDITS FORMER

APPEAL FROM: District Court of the Thirteenth Judicial District,

In and for the County of Yellowstone, The Honorable William J. Speare, Judge presiding.

COUNSELOFRECORD:

For Appellant: A. Clifford Edwards, Roger W.Frickle, Edwards Law Firm, Billings, Montana For Respondent: Carey E. Matovich, Matovich, Addy & Keller, Billings, Montana

Filed: Submitted onBriefs: April 27, 1995 Decided: August 3, 1995Justice Fred J. Weber delivered the Opinion of the Court.

This is an appeal from grant of summary judgment to the defendants bythe Thirteenth Judicial District Court, Yellowstone county. Weaffirm. The following issue is dispositive of the case: Did the District Court err in granting summary judgment onthe issues of negligent retention and sexual harassment? Plaintiff, Wendi Bruner was employed as a secretary by the Yellowstone County Attorney's Office from August of 1991 until she tendered her resignation onApril 8, 1992. In her resignation, plaintiff claimed that she had been continually sexually harassed by then Deputy County Attorney David Hoefer. OnApril 9, 1992, County Attorney Dennis Paxinos hired a private investigator to investigate plaintiff's allegations and pending the investigator's findings, suspended Hoefer with pay. The investigator concluded that the charges were warranted and Paxinos then terminated Hoefer without pay onMay 19, 1992. In its Memorandum and Order, the District Court pointed out that Hoefer began grievance procedures against the County and on May 22, 1992, the Board of County Commissioners conducted a preliminary hearing and on that date negotiated a compromise settlement with Hoefer. OnJune 1, 1992, Hoefer executed arelease and settlement agreement with the County which provided that Hoefer tendered his voluntary resignation effective May 19, 1992 and released any and all claims between Yellowstone County andhimself in return for $30,000 in settlement. While the $30,000 settlement

2was reported in the media, the settlement agreement contained a

confidentiality clause and terms were not released to the public until after the County officials were compelled to release the documents. OnSeptember I, 1993, plaintiff filed a complaint with the Equal Employment Opportunity Commission, which rejected the claim

as untimely, but issued aright to sue letter. Onthe same date the plaintiff filed a complaint of sexual harassment with the Montana Human Rights Commission (MHRC). In January, 1994, MHRC considered the length of delay in filing, but concluded that the statute of limitations wastolled onanequitable estoppel theory and that plaintiff's claim was timely made, MHRCdismissed the plaintiff's complaint without prejudice but did not issue aright to sue letter. OnApril 1, 1994, plaintiff filed her First Amended Complaint in Yellowstone County District Court charging the defendants with negligent retention andsexual harassment andcharging Hoefer with battery aswell. Following two motions for summary judgment, the District Court held ahearing and thereafter issued its order on November 25, 1994, granting summary judgment to the defendants on all counts. Plaintiff appeals this order. Standard of Review Thestandard of review for agrant of summary judgment is well settled in Montana. This Court will apply the same evaluation as the district court based upon Rule 56, M.R.Civ.P. Themovant must demonstrate that nogenuine issues of material fact exist. Toombs

3v. Getter Trucking, Inc. (1993), 256Mont. 282, 846P.Zd 265. Once

this has been accomplished, the burden then shifts to the nonmoving party to prove, by more than mere denial and speculation, that agenuine issue does exist. S.M. v. R.B. (1993), 261Mont. 522, 862P.2d 1166. Having determined that genuine issues of fact do not exist, the court must then determine whether the moving party is entitled to judgment as amatter of law. Lindey's, Inc.

v. Professional Consultants, Inc. (1990), 244 Mont. 238, 797 P.2d 920. Wereview the legal determinations madeby adistrict court
asto whether the court erred. Matter of Estate of Alcorn (1994), 263Mont. 353, 868P.2d 629. ISSUE Did the District Court err in granting summary judgment onthe issues of negligent retention and sexual harassment? The District Court concluded that the exclusive remedy for injury occasioned by this type of conduct is to be found in the Montana HumanRights Act under §49-2-509(7), MCA. Reference was made to Harrison v. Chance (1990), 244 Mont. 215, 797 P.2d 200, which so holds. The court further concluded that plaintiff had failed to bring her claim in atimely fashion under the relevant statutes whether the 180 day statute or the 300 day statute be applied. Plaintiff had failed to bring aclaim for more than 487 days. The District Court referred to the following allegation in the verified complaint of the plaintiff before the MHRC: Iknewthat Ihad legal rights available to meto suethe County, however, Iwaswilling to forego those rights on condition that Mr. Hoefer beremoved from his employment and would never be in aposition to sexually harass a 4secretary again.

Plaintiff contends the defendants are directly liable to her for negligence in retaining Hoefer, independent of Hoefer's sexually harassing conduct. Plaintiff argues that the defendants knew of Hoefer's conduct toward womenbut did nothing andthat had the defendants acted responsibly, shewould not have been injured byHoefer. Defendants contend that plaintiff cannot bring atort action for negligent retention because it is still atort action which was derived from Hoefer's sexual harassment andthat plaintiff's sexual harassment claim is barred due to its untimeliness. Asthe moving parties for summary judgment, the defendants had to show acomplete absence of any genuine issues of fact deemed material in light of substantive principles that entitle that party to judgment as amatter of law. -, S.M. 862 P.2d at 1168. The defendants contend they satisfied that burden by showing that no material facts existed which would provide a cause of action against the County. Plaintiff also relies upon the letter sent by the County Attorney to Hoefer on May 19, 1992, following her resignation and the independent investigation. The letter contained the following paragraph with regard to Hoefer: Specifically youwere warned byboth Chief Deputy Daniel Schwarz andmyself [Paxinosl that your expectation that [Wendil accompany you to all your court matters had been overdone. Wefurther warned youthat youwere alienating [Wendil from the rest of the staff.

. You were specifically requested to attend a seminar dealing specifically with sexual harassment, which you did. Chief Deputy Schwarz and myself gave you specific instructions to neither take breaks nor have lunch with [Wendi] alone. You were specifically instructed that 5there should always beat least one other support staff

person or fellow attorney to protect both yourself and [Wendi] from any allegations of misconduct or inappropriate behavior. While this letter suggests the possibility that the County Attorney had knowledge of Hoefer's conduct prior to the date of his dismissal, such facts are not material to the resolution of the summary judgment issue. Summary judgment is appropriate where a plaintiff fails to set forth facts which would establish each element of the alleged cause of action. Dvorak v. Matador (19861, 223 Mont. 98, 727 P.2d 1306. Plaintiff merely argues that the defendants knew before her resignation that Hoefer was causing problems. In itself that letter fails to establish the elements of the tort of negligent retention. The letter does demonstrate that the defendants had taken steps to eradicate unprofessional behavior on Hoefer's part. Plaintiff failed to rebut the elements of the affidavit of the County Attorney which established that as soon as the County Attorney was notified by the plaintiff that a problem existed, Hoefer was suspended and investigated. The affidavit establishes without contradiction that Hoefer never worked a day after the plaintiff resigned. Plaintiff failed to set forth any facts demonstrating actual notification to the defendants about Hoefer's behavior until she actually resigned. Thekey question is whether plaintiff could have recovered for negligent retention as a matter of law. TheDistrict Court relied

onHarrison for the proposition that the exclusive remedy for any complaint arising from sexual harassment is §49-2-509(7), MCA.

6Plaintiff argued that her action against the County was not based

upon sexual harassment. Our more recent holding of Hash v. U.S. West COmmUniCatiOn SerViCeS (1994), 886 P.2d 442, at page 445-46 held: Hash asserts that timely filing of adiscrimination claim with the HRCis not aprerequisite to filing with the district court. Wepreviously have resolved this issue against Hash's position. In Harrison v. Chance (1990), 244Mont. 215, 797P.2d 200, weheld that the Act provides the exclusive remedy for sexual discrimination claims. Wedid soonthe basis that a1987 legislative amendment made the Act the exclusive remedy for sexual discrimination. Weheld that the "statutory procedures for discrimination are exclusive remedies and cannot be bypassed." Harrison, 797 P.2d at 203. Like the plaintiff in Harrison, Hash chose to file a discrimination claim in district court without first timely filing her complaint with the HRC.

. The Legislature clearly intended that the Act be the exclusive remedy for discrimination claims. Weadopted this intent in Harrison and maintain it in the instant case. To permit parties to delay filing with the HRC until the HRCfiling time ran out and then file their claims directly in district court would, in asense, gut the Act. Wereaffirm our decision that the HRCis the exclusive remedv for Hash's discrimination claim. (Emphasis supplied.) In Harrison, this court further considered claims for intentional infliction of emotional distress and outrage arising from the charges of sexually explicit conduct andalso theories of wrongful discharge andbreach of the implied covenant of good faith and fair dealing. In our present case, plaintiff has charged the defendants with negligent retention of Hoefer. At that point, the following statement in Harrison is pertinent:

As in this case, any claim based upon sexual harassment can be framed in terms of numerous tort theories. The legislature expressed its intent that the Commission provide the exclusive remedy for illegal discrimination when it enacted subsection (7) of §49-2- 7509, MCA. Toallow such recharacterization of what is at

heart a sexual discrimination claim, would be to eviscerate the mandate of the HumanRights Commission. Harrison, 797 P.Zd at ZOO. Plaintiff contends that the tort she charged hasnothing to dowith Hoefer's sexual harassment. Clearly that is not aproper conclusion. If the sexual harassment were removed from the factual picture, plaintiff would have no tort claim. Because the sexual harassment is at the foundation of her claim of negligent retention, the only remedy she has is in the Montana Human Rights Act, §§ 49-2-101 et seq., MCA. Weconclude that the holdings of Hash andHarrison are controlling andthat the exclusive remedy for the claimed negligent retention of Hoefer and sexual harassment by Hoefer is to be found in the Montana Human Rights Act. Section 49-z-501, MCA, required plaintiff to file her claim with the MHRCwithin 180 days, or if agrievance is filed first, 300days. Plaintiff failed to file her claims within those periods of time. Plaintiff attempts to argue that she agreed not to file charges if the County would fire Hoefer and he could not harass other women. She became frustrated when she learned that the County had paid Hoefer $30,000, and then instituted these proceedings. Plaintiff has failed to demonstrate any contract or agreement

onthe part of the defendants which wasbreached in connection with Hoefer. Plaintiff resigned onApril 8, 1992, and raised to the County Attorney the issue of inappropriate behavior by deputy Hoefer. TheCounty Attorney suspended Hoefer onApril 9, 1992, and

8Hoefer did not work for Yellowstone County after that time.

It is true that the MHRCeventually determined that the statutory filing time should be tolled on atheory of equitable estoppel. However, the District Court specifically considered this issue and concluded that equitable estoppel did not apply sothat the complaint wasuntimely filed. Equitable estoppel is not favored andwill be sustained only upon clear and convincing evidence. Ducham v. Tuma (1994), 265 Mont. 436, 877P.2d 1002. Toconstitute equitable estoppel, there must be conduct amounting to representation or concealment of material facts; these facts must beknown to the party estopped at time of conduct; truth concerning these facts must be unknown to the other party claiming benefit of estoppel at the time it was acted upon; conduct must bedone with intention, or at least with expectation that it will beacted upon bythe other party; conduct must berelied upon bythe other party andthe other party must in fact act upon it in such amanner asto change his position for the

worse. Kephart v. Portmann (1993), 259Mont. 232, 855 P.2d 120. Nothing in the record indicates that the County failed to carry through any representations to plaintiff. Hoefer did not work following the filing of plaintiff's resignation. Plaintiff resigned as of the end of April in 1992, yet it was not until the end of May 1992 that the Commissioners decided to pay Hoefer to resign voluntarily without filing an action against the County. Thus, there never was any representation to plaintiff that the County would not pay Hoefer money to disappear. Plaintiff never

9Justice W.William Leaphart dissenting.

I dissent. For reasons outlined below, Iwould recognize the tort of negligent retention in Montana and reverse the grant of summary judgment. The tort of negligent retention: arises when, during the course of employment, the employer becomes aware or should have become aware of problems with an employee that indicated his [or her] unfitness, andthe employer fails to take further action such as investigating, discharge, or reassignment. Yunker [v. Honeywell], 496 N.W.Zd [4191 423 (quoting Garcia v. Duffy, 492So.2d 435, 438-39 (Fla.Dist.Ct.App. 1986))

. MLv. Arndt (Minn. App. 1995), 531N.W.2d 849, 857 (employee that had previously shot a co-worker and showed aggression towards coworkers was retained). In Vollmer v. Bramlette (1984), 594 F.Supp. 243, the Federal District Court for the District of Montana concluded that an employer has a duty to protect his or her employees from foreseeable employee-caused harms. That court concluded that in the negligent hiring context, "the question of foreseeability, such as which would give rise to a duty of the employer, is aquestion of fact not properly disposed of bysummary judgment." 

### Vollmer, 594F.Supp. at 248.

The basis of responsibility under the doctrine of negligent hiring is the master's ownnegligence in hiring or retaining in his employ an incompetent servant whom the master knows or by the exercise of reasonable care should have known was incompetent or unfit and thereby creating anunreasonable risk of harm to others. Estate of Arrington v. Fields (Tex. Civ. App. 1979), 578 S.W.2d 173, 178. 11

### TheDistrict Court in the case at hand, found that Bruner's

claim for negligent retention wasfounded in unrelenting sexual harassment during her employment andthat the exclusive remedyfor this type of conduct (sexual harassment) is found in the Montana HumanRights Act. Idisagree. Exclusivity only applies if the two remedies share indispensable elements. Sexual harassment under the HRAandnegligent retention donot share indispensable elements. TheHRArequires proof of discrimination. Thetort of negligent retention doesnot. In Retherford v. AT&TCommunications of the Mountain States, Inc. (Utah 1992), 844P.2d949, the plaintiff alleged, amongother claims, that AT&Tnegligently employed several employees who harassed her. The court analyzed whether Utah's AntiDiscriminatory Act (UADA)provided the exclusive remedy for her claims. Thecourt adopted the indispensable element test asthe analytical modelto determine whether astatutory cause of action forecloses acommonlaw remedy. Retherford, 844 

### P.2d at 963. Applying the test, the court first identified the injury that the statute wasdesigned to address. Retherford, 844 

### P.2d at 965. Second, the court examined the elements of the plaintiff's tort claims 

### to determine whether any element of the claim was a necessary element of the statutory cause of action. Retherford,

844 

### P.2d at 965. That court concluded that the UADAaddressed employment discrimination against membersof specified protected groups. Thecourt found that: [nloticeably absent from the list of the indispensable elements of the four claims 

### [oneof which wasnegligent
12

### employment] is aninjury that is atarget of the UAUA:

retaliation for complaints of sexual harassment. While it istrue that all four claims arise out of defendants' retaliatory conduct, preemption dependsonthenature of the injury, not onthe nature of the conduct allegedly responsible for that harm. Retherford, 844P.2d at 967. Iwould apply thetwo-part test from Retherford tothe instant

case. 

### First, the injuries addressed bythe Montana HumanRights Act (HRA)include various employment-related discriminatory acts. Second, theelements ofBruner's tort, negligent retention, require that Bruner prove that Yellowstone County's "negligence inhiring, supervising, orretaining its employees [Hoeferl proximately caused her harm." SeeRetherford, 844P.2d at 967. TheHRAdoes not address negligent retention of an employee who harasses or discriminates against another employee. Rather, theHRAfocuses on the discriminatory acts ofthe employer which directly impact upon the injured employee. TheHRAprovides in relevant part that: (1) It is anunlawful discriminatory practice for: (a) anemployer to refuse employment to aperson, to bar aperson from employment, or to discriminate against aperson incompensation orinaterm, condition, or privilege of employment because of race, creed, religion, color, or national origin or because of age, physical or mental disability, marital status, or sex distinctionL.1 Section 49-2-303(l) (a), MCA. If Bruner werealleging that Yellowstone County washarassing
ordiscriminating against herthen shewouldhaveaclaim under the HRAandanycommonlawharassment anddiscrimination claims against Yellowstone County would bepreempted. Likewise, aclaim against the County baseduponHoefer's harassing conduct would merely be

13

### derivative innature andwouldbepreempted. However, here, Bruner



### is suing Yellowstone County, not for Hoefer's conduct, but for the County's ownnegligence in retaining Hoefer in aposition where, given his prior history of harassing other women, it was foreseeable that hewould harass Bruner. The claim for negligent retention focuses on Yellowstone County's failure to terminate Hoefer once it learned that Hoefer
washarassing womenemployees--i.e. Bruner's predecessors. The factual basis of thenegligent retention claim against Yellowstone County started before Bruner was even hired. Bruner presented deposition testimony from the county attorney indicating that he
was concerned that Bruner's two predecessors would file constructive discharge claims against the County based upon Hoefer's conduct towards them. This testimony certainly raises a question of fact as to the County's prior knowledge (i.e. 

### foreseeability) sufficient todefeat amotion for summaryjudgment
onthe claim of negligent retention. The HRAaddresses discrimination 

### against an employee as opposedtonegligence 

### inhiring orretaining anemployee. Burner's claim of negligent retention is not premised upondiscrimination. Secondly, her claim is based uponthe County's ownactions, not those of Hoefer. Thus, her claim of negligent retention is not preempted bythe HBAandis not controlled bythe time constraints of §49-2-501, MCA,which requires filing with the HRAwithin 180 daysorwith the EEOCwithin 300days. Iwouldreverse the District Court's grant ofsummaryjudgment

14

### onthe question of negligent retention. Idonot believe that the

claim of negligent retention waspreempted by the HRAnor do I believe that the claim of negligent retention is subject to the filing deadlines of the HRA.

Just?&

. I

Justices William E.Hunt, Sr., andTerry N.Trieweiler join in the foregoing dissenting opinion. 

# dJ& Justice



## 7’

./ 4”

ustice

Justice JamesC.Nelson specially concurs.

I concur with the result reached in our opinion because Iam satisfied that application of our decision in Harrison v. Chance (1990), 244Mont. 215, 797P.2d 200, mandates that result. I do not, however, read our opinion asarefusal to recognize the tort of negligent retention in acase involving different underlying facts. Asfar asIamconcerned, that issue remains tobedecided in the future.