No. 89-446 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1990 

ERNEST ROEBER and THE STATE 

INSTITUTIONAL EMPLOYEES FOR 

EQUAL HOURS, 

Plaintiffs and Respondents, 

STATE OF MONTANA, DEPARTMENT OF 

INSTITUTIONS AND THE MONTANA 

DEVELOPMENTAL CENTER, 

Defendants and Appellants. 

* . > 

APPEAL FROM: District Court of the Fifth Judicial District, 

In and for the County of Jefferson, 

The Honorable Frank Davis, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Nick A. Rotering, Esq., Department of Institutions, 

Helena, Montana 

For Respondent: 

Leonard J. Haxby, Esq., Butte, Montana 

Filed: 

Submitted on Briefs: March 29, 1990 

Decided: July 12, 1990 
Justice Diane G. Barz delivered the Opinion of the Court. 

The State of Montana, Department of Institutions and Montana 

Developmental Center appeal fromthe judgment of the District Court 

for the Fifth Judicial District, Jefferson County, granting 

respondents' petition for declaratory judgment. We reverse and 

remand. 

Respondents are employees of the Montana Developmental Center 

in Boulder. The Developmental Center is operated by the Department 

of Institutions. There are both union and non-union employees at 

the Developmental Center. Union employees are subject to a 

collective bargaining agreement from which respondents, as nonunion employees, are exempt. Respondents were hired from within 

the Center, by bid, and from outside the Center, by application. 

Each of the respondents received a personnel manual and other 

literature describing the general terms of employment. 

Prior to June, 1987, all Center personnel who worked an eight 

hour shift were paid for their half-hour lunch break. In June, 

management notified both union and non-union employees they would 

be required to work an eight hour day with an unpaid half-hour 

lunch break effective June 8, 1987. The grievance filed by the 

union employees was successful and management restored their paid 

half-hour lunch break in accordance with the collective bargaining 

agreement. 

Respondents filed a non-union grievance asserting management 

wrongfully terminated their paid half-hour lunch breaks and 

increased their working hours. Management denied this grievance. 
A three member grievance committee held: 

It would seem that additional information, policies and 

regulations which may have significant bearing on this 

matter were not made available to the committee. 

It cannot be determined whether there is or is not, in 

fact, a contractural [sic] relationship as a result of 

said document; i.e., job announcement. . . 

The committee referred the grievance to the Director of 

Institutions. The Director found as follows: 

It is the decision of the Director to accept the holdings 

of the committee which indicated that the grievants 

failed to sustain the burden of proof and essentially 

affirms management's position. 

The Director accepts and upholds the decision of the 

committee which essentially supports management's 

position in this grievance. 

Respondents then filed a petition for judicial review 

asserting their right to retroactive pay and reinstatement of the 

paid half-hour lunch break. Before the District Court ruled on the 

matter, respondents filed a motion for declaratory judgment seeking 

relief identical that prayed for the petition for judicial 

review. The parties then stipulated to allow respondents to file 

an amended petition. Respondents filed an amended petition for 

judicial review and motion for declaratory judgment. Contained 

within count I were the claims originally asserted in their 

petition for judicial review and within count I1 those set forth 

in the original motion for declaratory judgment. The District 

Court, on stipulation of counsel, converted the hearing on 

respondents1 amended petition to a pretrial hearing on the matter. 

In its findings of fact and conclusions of law filed following oral 

argument, the District Court found that: 
By oral stipulation of counsel, the petition 

for judicial review was converted to a 

declaratory judgment action pursuant to 5 27- 

8-101, MCA, et seq. 

[I]t [had] jurisdiction to determine the legal 

rights of the. parties under the broad 

provisions of the Uniform Declaratory 

Judgments Act embraced by the cited statutes, 

and that counsel for both parties agree[d] 

that the judicial review of the administrative 

decision [was] moot. 

There is no record of an oral stipulation between the parties aside 

from the ~istrict Court's finding. 

The lower court ordered appellants to reinstate the paid lunch 

half-hour and to reimburse respondents for their unpaid lunch 

breaks since June of 1987. Appellants argue the ~istrict Court 

substituted its judgment for that of the administrative decision 

maker by inferring facts not clearly in the record. We note the 

paucity of findings upon which the District Court could rely on 

review. Lower courts may remand petitions for judicial review for 

further proceedings pursuant to 5 2-4-704, MCA. 

The dispositive issue on appeal concerns the standard of 

review applied by the District Court in reversing the decision of 

the Director of Institutions. The lower court's findings of fact, 

as set forth above, conform to the spirit of the Uniform 

Declaratory Judgments Act codified at 5 27-8-101 et seq., MCA. 

Section 27-8-102, MCA, makes evident the purpose and nature of the 

Act : 

This chapter is declared to be remedial; its 

purpose is to settle and to afford relief from 

uncertainty and insecurity with respect to 

rights, status, and other legal relations; and 
it is to be liberally construed and 

administered. 

District courts have significantly less latitude upon judicial 

review of administrative decisions in contested cases pursuant to 

the Montana Administrative Procedure Act (MAPA), Title 2, Section 

4, MCA. Section 2-4-704, MCA, provides: 

The review shall be conducted by the court 

without a jury and shall be confined to the 

record. 

The court may not substitute its judgment for 

that of the agency as to the weight of the 

evidence on questions of fact. The court may 

affirm the decision of the agency or remand 

the case for further proceedings. The court 

may reverse or modify the decision if 

substantial rights of the appellant have been 

prejudiced because: 

(a) the administrative findings, inferences, 

conclusions, or decisions are: 

(i) in violation of constitutional or 

statutory provisions; 

(ii) in excess of the statutory authority of 

the agency; 

(iii) made upon unlawful procedure; 

(iv) affected by other error of law; 

(v) clearly erroneous in view of the reliable, 

probative, and substantial evidence on the 

whole record; 

(vi) arbitrary or capricious or characterized 

by abuse of discretion or clearly unwarranted 

exercise of discretion; or 

(b) findings of fact, upon issues essential 

to the decision, were not made although 

requested. 

Appellants contend the judicial review of the administrative 
decision was not moot and therefore review of that decision 

pursuant to MAPA was proper. District courts may not overturn 

agency decisions unless substantial, credible evidence supporting 

a finding of fact is lacking. Hammerquist v. Employment Sec. Div. 

of the Montana Deptt. of Labor and Indus. (1988), 230 Mont. 347, 

349, 749 P.2d 535, 536. District courts have greater discretion 

in reviewing conclusions of law because of an enhanced ability to 

interpret and apply the law to the facts. City of Billings v. 

Billings Firefighters Local No. 521 (1982), 200 Mont. 421, 430, 651 

P.2d 627, 632. Administrative conclusions of law must be upheld 

by district courts unless they constitute an abuse of discretion. 

Clearly, the District Court the instant case possessed 

broader remedial powers by proceeding under the Uniform Declaratory 

Judgments Act than had it subjected the agency decision to judicial 

review pursuant to MAPA. 

We hold the ~istrict Court improperly proceeded under the 

Uniform Declaratory Judgments Act in this case. 

The purpose of declaratory relief is to 

liquidate uncertainties and controversies 

which might result in future litigation and to 

adjudicate rights of parties who have not 

otherwise been given an opportunity to have 

those rights determined. However, it is not 

the true purpose of the declaratory judgment 

to provide a substitute for other regular 

actions. 

Other jurisdictions have denied the remedy of 

declaratory judgment where appeal by statute 

or otherwise from the actions of 

administrative bodies exists. (Citations 

omitted. ) 

Matter of Dewar (1976), 169 Mont. 437, 444, 548 P.2d 149, 153-54. 
Pursuant to 5 2-4-506, MCA, plaintiffs may bring a declaratory 

action to challenge the validity of a rule. However, § 2-4- 

102(10), MCA, sets forth the rules subject to that section: 

l1Rulelf means each agency regulation, standard, 

or statement of general applicability that 

implements, interprets, or prescribes law or 

policy or describes the organization, 

procedures, or practice requirements of an 

agency. The term includes the amendment or 

repeal of a prior rule but does not include: 

(a) statements concerning only the internal 

management of an agency and not affecting 

private rights or procedures available to the 

public; 

(e) rules implementing the state personnel 

classification plan, the state wage and salary 

plan, or the statewide budgeting and 

accounting system; 

The internal personnel policy at issue in the instant case is 

conspicuously and specifically excluded from the purview of this 

section. In this case, where respondents had a remedy of appeal 

fromthe administrative decision, declaratory relief was improperly 

granted. We reverse and remand for judicial review pursuant to 

The effect of the District Courtfs ruling would be to encumber 

the Department of Institutions and the Montana Developmental 

Center, with a sempiternal [adj.: everlasting; perpetual; eternal, 

Websterfs New World Dictionary 1295 (2nd College ed. 1986)l 

personnel policy unique to this facility. We note the policy 

change brought the affected employees into conformance with the 
State classification plan codified at 88 2-18-201, et seq., MCA. 

Although the union employees are now paid for their lunch breaks 

that policy is subject to change during the periodic renegotiation 

of their collective bargaining agreement. We will not affirm a 

holding which has the effect of prohibiting anv change in this 

policy. 

Reversed and remanded. 

We concur: 

Justices 
Justice John C. Sheehy, dissenting: 

The approach of the majority in this case to the Montana 

Administrative Procedure Act (MAPA) is purblind in every sense of 

the word [purblind: partly blind; lacking in vision, insight or 

understanding. Webstergs New Collegiate Dictionary (1981)l. 

The majority see well enough to find a single remedy by appeal 

from an administrative decision under 5 2-4-704, MCA. They fail 

to see that an equally valid remedy is provided in MAPA for 

declaratory judgments under 5 2-4-506, MCA. 

That section provides: 

2-4-506. Declaratory iudsments on validity or 

application of rules. (1) A rule may be declared 

invalid or inapplicable in an action for declaratory 

judgment if it is found that the rule or its threatened 

application interferes with or impairs or threatens to 

interfere with or impair the lesal riqhts or privileqes 

of the plaintiff. 

(2) A rule may also be declared invalid in such action 

on the grounds that the rule was adopted with an 

arbitrary or capricious disregard for the purpose of the 

authorizing statute as evidenced by documented 

legislative intent. 

(3) A declaratory judgment may be rendered whether or 

not the plaintiff has requested the asency to pass upon 

the validity or applicability of the rule in question . . . (Emphasis supplied.) 

Thus, under MAPA, a district court has not only review 

authority but is given declaratory authority to determine a legal 

question as to the validity or applicability of the rules of state 

government agencies. The district court has the power to declare 

the rule invalid, or that its application, as in this case, is 

invalid. 
There are really no fact issues in this case. There is not 

any dispute from the State or its agency managers that, prior to 

June 1, 1987, the non-union employees here worked an 8-hour shift 

which included a half-hour lunch period. On or about June 8, 1987, 

the State by letter unilaterally directed that these non-union 

employees would lose the paid lunch period and that an additional 

half-hour work period would be added to their schedules. 

The only issues that remain are legal issues, since the facts 

are not in dispute. The employees maintain that they have an 

implied contract for the paid lunch period. The position of the 

State from the record and from its brief is that § 39-4-107, MCA, 

and the policies of the State contained in its management memos and 

employee handbook are the rules which govern the issue. It was 

most appropriate for the District Court to regard the matter as one 

for declaratory judgment and to act under the jurisdiction 

specifically given to it by MAPA under 5 2-4-506, MCA, above. 

Not only did the ~istrict Court properly proceed to consider 

the legal issue here under its power of declaratory judgment 

provided in the Act, but the State recognized this power, and 

stipulated in writinq for the court's consideration of the legal 

issue under its declaratory jurisdiction: 

Come now the parties hereto and hereby stipulate and 

agree that the petitioners [employees] shall be allowed 

to file an amended petition in order to incorporate 

petition for further relief and authorizing the court to 

issue an order allowing the filing of said amended 

petition. 
Let us review the procedure that occurred in this case. On 

September 16, 1987, Ernest F. Roeber filed a grievance on behalf 

of himself and all similarly situated non-union employees of the 

Montana Development Center at Boulder. His grievance was that he 

and his fellow non-union employees had an express or implied 

contract with the State under which the work-day comprised an 

eight-hour shift which included a paid half-hour lunch period. 

Under the grievance procedures established by the Department, a 

three-member committee was convened which heard the grievance. 

After hearing, the grievance committee rendered the following 

decision: 

Held: It would seem that additional information, 

policies and regulations which may have significant 

bearing on this matter were not made available to the 

committee. 

Held: It cannot be determined whether there is or is 

not, in fact, a contractual relationship as a result of 

said document; i.e., job announcement, (see exhibit 6a, 

6b and 6c). 

Recommendation: In the future, non-union job vacancy 

announcements should contain a statement which clearly 

indicates that the terms and conditions of hiring and 

employment are governed by volume I11 of the Montana 

Operations Manual. 

Thereafter, on January 26, 1988, the director of the 

Department of Institutions entered a written decision, in part: 

It is the decision of the Director to accept the holdings 

of the committee which indicated that the grievants 

failed to sustain the burden of proof and essentially 

affirms management's position. 
Considering the recommendation made by the committee, it 

is well taken, but must be taken under advisement. To 

require stipulation of this nature would put a higher 

degree of responsibility on non-union job positions at 

the Montana Developmental Center then presently is 

required in job posting relative to other agencies in 

state government and the Department of Institutions. 

CONCLUSION : The Director accepts and upholds the 

decision of the committee which essentially supports 

management's position in this grievance. 

Thereafter, Roeber filed his petition for judicial review in 

the District Court. While the matter was there pending, Roeber, 

through his counsel, filed a motion for a declaratory judgment from 

the District Court determining that the non-union employees had an 

express or implied contract with the State, which was impaired by 

the action of the Department. The District Court, by letter to 

all counsel, called attention to the motion and requested of 

counsel whether a judicial review proceedings could be converted 

into a declaratory judgment action. The parties met and orally 

stipulated that this should be done, and eventually the written 

stipulation above set forth was executed by counsel for Roeber and 

the State. 

In its findings of fact and conclusions of law, the District 

Court expressed frustration about the grievance procedure at the 

administrative level. The court stated: 

The hearing at the local grievance level was, as this 

Court finds, a "nondecision. The committee concluded 

that it had insufficient evidence to make an informed 

decision. It passed it on by way of an administrative 

appeal to the Director of the Department of Institutions. 
On January 26, 1988, the Department disposed of the 

matter by a Director's decision. The Director, despite 

the "nonde~ision~~ character of the local committee's 

actions, treated it as one, holding that the plaintiff 

had failed to sustain their "burden of prooftt and that 

management had the right to make the change. BY 

upholding management s ttdecisionll there was thus created 

two different categories as far as the paid one-half hour 

lunch period was concerned--one for the union--a 

different one for non-union. 

The District Court went on to determine that it had 

jurisdiction to determine the legal rights of the parties under the 

broad provisions of the Uniform Declaratory Judgments Act, 

particularly because counsel for both parties had asreed that 

judicial review of the administrative decision was now moot. 

Moreover, the District Court found as a fact that there existed an 

implied contract between management and plaintiffs establishing a 

paid one-half-hour lunch as one of conditions of their employment. 

It found a breach by management of the implied contract of 

employment, so the court held in favor of the employees. 

The majority opinion decides the case as though Roeber and his 

associates had elected a grievance form of remedy and could apply 

for none other. This flies in the face of 3 2-4-506, MCA, which 

provides that a declaratory judgment may be rendered "whether or 

not the plaintiff has requested the agency1' to pass upon the 

applicability of the rule in question. This Court should be 

especially unwilling to be used as a pawn, where the appellant in 

this case stipulated in writing to the declaratory procedure 

adopted by the District Court, and then on appeal seeks to evade 

the results of its stipulation. In this case, the administration 

had attempted to impose the same non-paid lunch period upon the 
union employees as upon the non-union employees. However, the 

collective bargaining agreement and grievance filed by union 

employees made the administration back up and reinstate for the 

union employees the paid lunch period. The District Court found 

that factor important. The district judge noted in his memorandum: 

There was, of course, no written contract, except that 

made by the department with the collective bargaining 

unit. It seems to the Court that by agreeing with the 

union as it did on July 1, 1987, management went a long 

way toward acknowledging a long-standing agreement with 

all of its employees. The evidence was persuasive that 

this agreement existed. The agreement may have been 

contrary to the eight hour day statute (5 39-4-107, MCA) ; 

but even that statute has escape clauses in the form of 

provisions for collective bargaining agreements as well 

as the mutual agreement between management and employees 

not covered by union contract. 

The court agrees with plaintiff that the long time 

conduct created an implied contract which could not be 

unilaterally changed as it was . . . 

The truth is the only means for redress for the non-union 

employees in this case is by means of declaratory judgment. The 

grievance procedure is not fitted to handle such questions of law 

as the impairment of contracts and the existence of implied 

contracts. These are legal questions more properly in the sphere 

of judicial action. The legislature considered the possibilities 

and provided a double remedy in cases such as this: one if a 

grievance procedure would remedy the situation, and the other, 

whether or not the grievance procedure sufficed, for a judicial 

remedy by declaratory relief. 
One wonders, now that the majority has ordered a further 

judicial review, what the District Court will find to review. It 

will not be helped by the llnondecision.ll 

I dissent and would affirm the judgment of the District Court. 

I concur with bhe foregoing dissent of Justice Sheehy. 

Justice