### No. 81-65 INTHE SUPREME COURTOF THE STATEOF MONTANA 1982

HELENL. LOVELL, PlaintiffandAppellant,
VS. 

### JOSEPHG. 

### WOLF,City-County Manager for Anaconda-Deer LodgeCounty; andANACONDADEER LODGECOUNTY, a political subdivision, Defendantsand Respondents.

leal from: District Courtof the Third JudicialDistrict, Inand for the County of DeerLodge,Montana HonorableRobert Boyd,Judgepresiding. CounselofRecord: ForAppellant: MichaelJ. 

### McKeon argued,Anaconda,Montana ForRespondents: JohnRadonich, County Attorney, argued, Anaconda,

Montana

Submitted: February 24,

### 1982

rp- '\ 

### Filed:

# APR1 Decided: 

## #&i% $@

### Mr. Justice John Conway Harrison delivered the Opinion of the Court. This is 

### an appeal fro~rla judgment of the District Court; of the Third Judicial District, in and for the County of Deer Lodge, denying Helen Lovell reinstatement and backpay resulting from her discharge from county employment. The appellant, Helen Lovell, 

### isa sixty-five-year-old woman, who was elected to three, four-year terms as the clerkand recorder of Deer Lodge County, Montana, Her first elected term began on January 3, 1967. She then was elected for a term begining in January 1971, and another beginning in 

### January 1975, The last term was to run until January 1979, but on May 2, 

### 1977, a county form of government, consolidating the city and county governments, was put into effect, That charter had certain provisions which are important to the decision in this case. The charter provides: "Article IV, 

### Section3, Duties. "1. 

### The Anaconda-Deer Lodge County Manager shall be the chief administrative officer of thelocalgovernment and shallbe responsible for alladministrative functionsof AnacondaDeer Lodge County, unless otherwise provided by thisCharter. "2. 

### The Manager's responsibilities shall be to: 

# ... c. appoint and remove department heads with the approval of the Commission.

"ArticleV, 

### Section 2. 

### AdministrativeCode. "1. 

### The Administrative Code shall provide the complete plan of organization and structureof Anaconda-Deer Lodge County. "2. 

### The AdministrativeCode shall include: "a. the departmental organization of the government, the nature and scope of each department and 

### rules and procedures for department operation

# ...

### "ArticleV, 

### Section 3. 

### Personnel System. "1. The Anaconda-Deer Lodge County Personnel System shall provide for hiring on the basis of merit and shall include a salary schedule, provisions for vacations, sick leaves, insurance and other benefits for all employees in accordance with provisions of this Charter; procedures for employees to have an opportunity to be heard upon their request pending discharge, suspension or any designated disciplinary action and shall provide for such other procedures as necessary for an equitable Personnel System including honoring of all collective bargaining agreements.

"ArticleX, 

### Section2. 

### Continuity.

"5. All

### Anaconda and Deer Lodge County officials or employees, except the Mayor, City Council members, and County Commissioners, may continue in the performance of their duties according to existing personnel procedures or until their positions are terminated by the Administrative Code. Employees whose positions are terminated by provisions of the Administrative Code shall be given first consideration for other Anaconda-Deer Lodge County employment.

"ArticleX, 

### Section 4. 

### Manager, AdministrativeCode, and Personnel System. "1. 

### The Commission shallappoint theManager on orbeforeAugust 1, 

### 1977. "2. 

### Within nine (9) months of the appointment of 

### the Manager, the Manager shall prepare and submit an AdministrativeCode and Personnel System to the Commission for review, amendment, and adoptionby ordinance. The Code and Personnel System shallnotbe in violation of any union collective bargaining contract in force at the time of adoption of saidCode and System. "3. 

### The Commission shall adopt the Administrative Code and Personnel System by ordinance as submitted or amended within three (3) 

### months of the date of submission by the Manager

# ."4. 

### The method a11d schedule for implementationof theAdministrative Code and Personnel System shall be provided in the ordinances adopting them

# .

# .."

At 

### the time of the institution of the new form of government, May 2, 

### 1977, the Board of County Commissioners of Anaconda-Deer Lodge County passed a resolution providing for a personnel system pursuant to Article V, 

### Section 3, 

### which in effectappointed Helen L. 

### Love11 supervisor, clerk and recorder's office, and provided asfollows: 

# ".

.

# .be it 

### further resolved that the above named individuals serve in the above entitled capacitiesuntil such time asthe charter of theAnaconda-Deer Lodge County 

### is implemented and the various offices and departments are merged and consolidated and until further resolution of the Anaconda-Deer Lodge County Commission." The effectof the resolution astoHelen Love11 was to make her 

### position one of appointment rather than election. In July 1977, the defendant-respondent, Joseph G, 

### Wolf, was appointed manager of the Anaconda-Deer Lodge County. In February 1978, after sixmonths in office, Wolf informed the appellant that she was to record and help Regina Connor, who had been moved at the time of the consolidation from the cityclerk's job to the officeof clerk and recorder. Wolf testified that sometime at the end of 1977 he called the cityand county employees to ameeting in the courtroom of the county courthouse to discuss the job situation and the combining of the cityand county offices, He 

### also testified that at this time he informed county employees thatConnor was tobe the clerk and recorder after the firstof theyear. The appellant testified that shewas not told shewas
no longer clerk and recorder but simply was assigned toother jobs in the office and told to assist Connor and show her around the office. Atno time was there any resolution 

### by theboard of commissioners terminating appellant's job or transferring her to a lesser job in the city-county setup. The appellant testified that sometime in mid-February she

was called toWolf's officewhere he informed her he was not satisfied with her work. At that time he asked her if she had considered retiring, and she informed him shewas unable financially to retire. On March 15, 1978, Wolf again suggested that appellant retire. He told her that her work

was unsatisfactory and that he had had complaints from abstractors. He then informed her she would be terminated

asof March 17. Wolf testified that atthe time he went to work in August 1977 he was familiar with the Resolution No. 1, passed by the commissioners making appellant the supervisor of the clerk and recorder's office. He also testified he

was familiar with the charter which created the AnacondaDeer Lodge County government and that he was aware of the administrative code tobe provided by the commissioners. In addition, Wolf was aware that the charter directed theAnaconda-Deer Lodye countycommission to adopt a personnel system within nine to twelve months. During that period

no personnel or administrative code was adopted by the commission nor was 

### any personnel system adopted or in effect when Wolf demanded the appellant1 s resignation. He testified that while no changes had been made officially, "inhismind" Connor became the clerk and recorder asof the firstof the year, 1978. However, it was not untilMarch 9, 1978, several months later, that Connor was appointed the

### supervisor of the clerk and recorder's office. During this period, from January 1

### toMarch 17, in spiteof a change of duties, the appellant was paid the same salary she was paid

as clerk and recorder. Wolf's recommendation and the commissioners' act on March 9, 1978, were several weeks afterWolf had his firstconversation with the appellant and just a couple of days before the termination of her job in the clerk and recorder's office. Wolf testified that following the Resolution No. 1, 

### dated May 2, 

### 1977, there was no resolution changing the appellantf

### s status until March 1978. Wolf also testified that prior to that time, he had given appellant a verbal warning but had 

### not given her any written notification that shewas under consideration for suspensionor termination. Appellant testified that during the time she was clerk and recorder of Deer Lodge County, as an elected official, shecould notjoin a union because of her elective status. Some question 

### is raised by the respondents alleging thatwhen appellantwas demoted from clerk and recorder to a lesser position in January or February she was required to join the union and, having failed to do so, she has waived her rights to a collective bargaining hearing. However, testimony of both the appellant and the courthouse union shop steward indicates that the appellantmade an effort to join theunion but was eitherdeniedmembership or told that the union would look into the matter for her. Her termination came before anything could be done in her capacity as a nonofficial employee of the Anaconda-Deer Lodge County o f f i c e . Three issuesarepresented forreview:1. Whether the plaintiff-appellant was denied due process when she was discharged from her position as clerk and recorder of Anaconda-Deer Lodge County without a hearing to determine if therewas cause for her termination. 2. Whether the plaintiff-appellant was denied due process rightswhen a new supervisor of clerk and recorder's officeof Anaconda-Deer Lodge County was appointed while the appellant had never been removed officially as clerk and recorder of Deer Lodge County, as required by statute and the local government charter. 

### 3. Whether the plaintiff-appellant 

### isprecluded from maintaining this action if she failed to exhaust the adrninistrative remedies which may have been available to her. In view of the fact that issues one and two, concerning thedue process question, arecontrolliny in this

case and require reversal of the District Court's judgment, the two willbe combined for discussion. The respondents argue that the issues of due process
were not raised at the trial court level and, therefore, cannot be considered on appeal. Chadwick v. Giberson (1980)t Mont. 

## ,618 P.2d 1213, 37 St.Rep. 1723. We do not agree. Here, the due process issue ran through the entire trial and was brought to the attentionof theDistrictCourt by the appellant's proposed findings of fact. There was a specific charge that the county's failure to adopt a "personnel systen~" providing for ahearing before discharges

was a "violation of

# . . .due process.'' The case was tried

as a due process question in spite of the fact that thewords "due processndo not appear ineither thepleadingsor the trial transcript and the due process concern 

### is the pivotal issuepresented inthisappeal. From the city-county manager's first transfer of appellant's duties to his final termination of her employment, appellant's rights under the charter were neither recognized nor protected. The charter dictated how each appointed department head was tobe rernoved, and it required any removal to be approved by the commission. The charter provisions were never followed in the transfer of appellant's duties after her appointment as supervisor of the clerk and recorder's office, and they were not followed in removii~gher from her job until early March. The record indicates that the notary public seal obtained by appellant during the time she was clerk and recorder was still being used up until the time she was fired. In addition, appellant was paid the same salary throughout the entire period until she was terminated. In her capacity as clerk and recorder before the consolidation, the appellant was the general supervisor of her office and did not perform the specificjobs within the office which required special skills. Rather, she was always available to the board of county commissioners as their clerk and carriedout other dutiesof theofficewhich did not require the specialization called for under the new form of government. Following her transfer torecords clerk she was called upon to do technical jobs within the office for which shehad no expertise. One of the reasonsgivenby Manager Wolf for her termination was that he had complaints from two abstractors in town that appellantdid not properlyrecord instruments and her writing was so bad mistakes were being made in the recording. However, the record 

### is also clear thatWolf didnot callthistoher attentionuntil the dayhe notified her that shewas no longer employed, nor was any effort made to train her for the skillsnecessary to stayon thejob. In considering thedue process protection argument of the appellant, we look to three recent casesof thisCourt: Reiter v. Yellowstone County (1981)

## , -Mont. 

## ,627 P.2d 

### - 845, 38 St.Rep. 686; Gates v. Life of Montana Insurance Company (1982), 

### -Mont. 

## - 

## ,638 P.2d 1063, 39 St.Rep. 16; and Nye v. Department of Livestock (1982), Ivlon

### t

# . 1 639 P.2d 498, 39 St.Rep. 49. See: Love, Damages: A Remedy for theViolation of ConstitutionalRights, 67 Cal. Law Rev.

This Court held in Reiter, supra, that to show a property interest or liberty interest in hisjob, and thus be entitled to claim due process protection, an ernployee must be able to point to an independent source such asstate law or an understanding between the employer and the employee. Here, we find three sources by which appellant

can establish a due process protection: (1)the charter; (2) the statute, section 16-5115.12, R.C.M. 1947; and 

### (3) the collective bargaining agreement which we find unnecessary to consider 

### indeciding thiscase. We note that neither Gates nor 

### - Nye had been decided when the parties in this case filed their briefs so they

were not discussed there. However, in addition to Reiter, this Court's holding in 

## - Nye adds strength to appellant's

cause in this matter. There, this Court held on theplaintiff's claim of wrongful discharge that administrative rules may become the source of a public policy which would support a claim of wrongful discharge. In 

## - Nye, as in this case, there was no showing of 

### "just cause" for removal from her statusaspermit clerk. She was, asthe appellanthere, entitled to a proper hearing before termination from her permanent position. We reverse thejudgment of theDistrict Court denying appellant reinstatement in her position as clerk and recorder. The cause 

### is remanded to the District Court with the following instructions: that appellant be reinstated to her position asclerkand recorder; that shebe paid backpay for the period from March 1978 to present, subject to any offsets; and that hearings be held to determine her future statusasan employee of theCityof Anaconda-County of Deer Lodge.

We concur: Justice 

# P--

-- -- ,Chief Justice r,

### Mr. Chief JusticeFrank I. Haswell. speciallyconcurring: I concur in the result on the basis that appellant Love11 was denied due process because there 

### was no valid change in her status and she was discharged without 

### a hearing

# .

P 

# aAt~%&-

Chief Justice