No. 89-157 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1989 

RAY T. SPERRY, 

plaintiff and Appellant, 

-vsMONTANA STATE UNIVERSITY, 

Defendant and Respondent. 

APPEAL FROM: ~istrict Court of the ~ighteenth ~udicial ~istrict, 

In and for the County of all at in, 

The Honorable Thomas Olson, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Lineberger & ~arris; Douglas D. ~arris, Bozeman, 

Montana 

For Respondent: 

Dorothy L. Brownlow; Moore, OIConnell, ~efling and 

Moon, Bozeman, Montana 

Submitted on ~riefs: Aug. 3, 1989 

Decided: August 30, 1989 
Justice Fred J. Weber delivered the Opinion of the Court. 

The plaintiff, Ray V. Sperry, brought this action to 

recover "conversion compensation" allegedly due him as a 

result of a contract conversion that took place in 1967 at 

Montana State University. After a bench trial, the District 

Court for the Eighteenth Judicial District, Gallatin County, 

entered judgment for Montana State University. From this 

judgment, Mr. Sperry appeals. We affirm. 

The issues are: 

1. Did the District Court err in concluding that the 

retirement agreement entered into between MSU and Mr. Sperry 

constituted a complete waiver and release of all claims he is 

now asserting? 

2. Is Mr. Sperry's claim barred by the doctrine of 

laches? 

Mr. Sperry was employed at Montana State University 

(MSU) from 1965 through March 31, 1986, retiring as Director 

of Continuing Education. At the commencement of his employment with MSU, and for the next two years, the terms of a 

written contract known as the "Montana 12 Contract" governed 

his employment. The Montana 12 Contracts allowed employees 

to take an eighth quarter leave with pay for research, travel 

or any other reason approved by the Board of Regents. Employees were required to work seven quarters before eligibility for eighth quarter leave accrued. They were also allowed 

to accumulate two quarters, a total of six months. 

In 1967, the Board of Regents ordered MSU to terminate 

the Montana 12 Contract and convert to a one-year contract. 

Mr. Sperry's contract was converted to a fiscal year contract. At that time his annual salary was increased by 

$1000, from $7800 to $8800, which constituted a 13% increase 

in pay. Mr. Sperry signed an agreement acknowledging and 
accepting the change from a Montana 12 Contract to a fiscal 

contract which stated that "all accumulated eighth quarter 

leave" had been taken, and he waived claim to any future 

eighth quarter leave. 

From 1967 until retirement in 1986, Mr. Sperry signed 

nineteen individual annual employment contracts with MSU, all 

of which stated the term of the employment and the agreed 

salary for that year. None of these contracts mentioned any 

conversion compensation due. Conversion compensation arose 

from the replacement of Montana 12 Contracts with the annual 

contracts as compensation for the additional time worked 

without leave. Mr. Sperry now contends he reached an oral 

agreement with MSU entitling him to conversion compensation 

amounting to an additional 10% increase in pay. 

In April, 1983, Mr. Sperry wrote a letter to Michael F. 

Malone, Dean of Graduate Studies, to discuss possibilities of 

early retirement and requesting a salary adjustment for the 

last three years. The essence of his proposal stated: 

Before seriously considering an early retirement, it is imperative that my final average three 

year salary be increased significantly. As you 

know, according to Regents guidelines, my current 

salary is below their guidelines. . . 

[Tlhe total cost to the University for my proposal 

would be insignificant. The first year savings to 

MSU would be $7,708.00. Reflecting a total cost of 

between $5,000.00 and $6,000.00 for the three 

contract periods. . . 

[I] propose the following salary schedule: 

1983-84 -- $37,000.00 (actual cost to MSU - 

$29,393.00) 

1985-86 -- $43,000.00 (9 month contract, July 1, 

1985-March 30, 1986) 
He wrote a follow-up letter in December, 1986 which stated: 

My original correspondence requested a three year 

salary adjustment beginning the current academic 

year. The primary reason was to increase my last 

three years salary for early retirement purposes. 

MSU rejected his original offer, so Mr. Sperry submitted the 

following request and schedule in his letter: 

1) Fiscal year 84-85, I receive a Regents contract with my raise equal to the average MSU 

faculty raise for this period. 

2) Beginning July 1, 1985, I receive a Regents 

contract to the end of March 30, 1986 (9 

months) . During this period the contract 

would include an average faculty increase. I 

also receive an additional 4 years contract 

salary based upon the current contract. 

Succinctly, I receive 14 times my contracted 

salary paid to me in 9 months instead of 12 

months. During this period, I would continue 

to earn sick leave and vacation time. 

3) In the event a universally applied incentive 

is offered, all MSU employees opting for early 

retirement, the above agreement would not 

prejudice me. 

In the conclusion of his letter, he stated: 

If a satisfactory arrangement is reached 

between the University and myself, I will offer a 

statement agreeing not to pursue - a - past - wage 

greivance. [sic] (~mfisisadded. ) 

In a third letter, Mr. Sperry wrote a revised proposal, 

changing only the second provision's term of "1/2 year" to 

"1/3" and "1 1/2" to "1 1/3If. He restated his agreement "not 

to pursue a past wage grievance" if "the [proposed] agreement 

is reached." 

After an agreement was reached, Mr. Sperrlr wrote a 

formal resignation letter on February 9, 1984, to he 
effective as of March 31, 1986. These letters of correspondence comprise the "retirement agreement," which is central 

to this dispute. 

One year after agreement on the terms of retirement, Mr. 

Sperry for the first time sought conversion compensation from 

MSU in a letter to the Vice President for Academic Affairs, 

Dr. Stuart Knapp. He contended that at the time of the 1967 

conversion, he was offered a 23% salary increase, received a 

13% increase, and 10% is still due and owing as conversion 

compensation. Applied retroactively, this amounts to nearly 

$30,000 of conversion compensation. 

I 

Did the District Court err in concluding that the retirement agreement entered into between MSU and Mr. Sperry 

constituted a complete waiver and release of all claims he is 

now asserting? 

The District Court made the following pertinent findings 

of fact and conclusions of law: 

Findina of Fact: 

- #7: On May 11, 1967, plaintiff signed an agreement 

by which he accepted the stated terms on the change 

of period of employment. . . 

- #8: Although alleged, no oral agreement with 

Robert McCall, plaintiff's supervisor, was established with particularity. 

- #9: Plaintiff accepted 19 subsequent post-conversion employment contracts. 

- #lo: In the subsequent 19 years after conversion, 

plaintiff failed to pursue defendant's grievance 

procedures for any shortage in his salary since 

1967. 

- #11: In January and February 1984, plaintiff 

negotiated with defendant's Michael P. Malone, then 
acting vice-president for academic affairs, for an 

early retirement. 

- #12: On February 9, 1984, plaintiff confirmed in a 

memorandum that he found the financial considerations acceptable. In addition, he further stated 

that his was an official resignation from the 

university effective March 31, 1986. 

- #13: As part of the consideration of his retirement, defendant increased plaintiff ' s final pay to 

$45,370 for a nine-month period, and plaintiff 

agreed to "not pursue any past wage grievances". 

- #14: Defendant fully complied with all the terms 

and conditions of the retirement agreement. 

#15: At no time during plaintiff's retirement 

Gotiation discussions with defendant did he 

inform defendant he claimed additional compensation 

due him from his conversion in 1967, 13 years 

previously. 

Conclusion of Law: 

- #2: Plaintiff accepted the terms set forth in the 

1967-68 employment contract without written formal 

concern as to deferred compensation. The retirement -~~ - - aareement entered into between plaintiff and 

defendkt constitutes -- a full waiver and release of 

any claims plaintiff --- may have had against defendant 

arisina --- - 

dfrom salarv or waaes due to plaintiff as a 

result of his emplgyment iith defendant. 

- #4: Plaintiff is not entitled to any additional 

compensation for his employment at MSU. (Emphasis 

added. 

On appeal, Mr. Sperry contends his own oral testimony 

was sufficient to establish conversion compensation was due. 

He contends that his direct supervisor indicated his increase 

in pay did not include the conversion compensation, but 

promised he would receive that additional salary increase at 

a later date. Mr. Sperry testified that the only person who 

would have known of the alleged oral contract was his direct 
supervisor, Robert McCall. Mr. McCall died in 1971. Mr. 

Sperry did not raise the issue of conversion compensation 

until February 1985, one year after signing the retirement 

agreement. 

MSU contends there was no such agreement, and any such 

claim was waived when he accepted the terms of the retirement 

agreement. 

Waiver is an equitable doctrine, applicable when there 

is an intentional or voluntary relinquishment of a known 

right, claim or privilege, or such conduct as warrants an 

inference of the relinquishment of such right. State v. 

Statczar (Mont. 1987), 743 P.2d 606, 44 St.Rep. 1668; Kelly 

v. Lovejoy (1977), 172 Mont. 516, 565 P.2d 321. 

Release is defined as the abandonment of a claim to the 

party against whom it exists and may be gratuitous or for 

consideration. 

It is fundamental that an effective release can be 

consummated without resort to a particular form of 

words, for "all that is necessary is that the words 

show an intention to discharge." (Citations 

omitted. ) 

Melo v. National Fuse and Powder Co. (D.Colo. 1967), 267 

F.Supp. 611. To be enforceable, a release must at a minimum 

be unambiguous, explicit, and unequivocal. Simonson v. 

Travis (Utah 1986), 728 P.2d 999, 1002. In Montana, the law 

of contracts governs releases. Westfall v. Motors Ins. Corp. 

(19621, 140 Mont. 564, 374 P.2d 96. 

We conclude that Mr. Sperry's signing of nineteen, 

one-year contracts and cashing paychecks over the past nineteen years without complaint of no conversion compensation, 

in combination with his acceptance of the retirement agreement and his promise not to pursue a past wage grievance, 

constitute a complete waiver and release. 
An Alaskan Supreme Court holding is comparable to the 

case at bar. In that case, the note maker raised no objection to the credit union's alleged failure to collect interest according to the terms of the loan agreement. This 

continued for a three-year period, when each lot subject to 

security agreement was sold, despite the fact he was required 

to sign the deed to complete the sale of each lot. For each 

sale, he had an opportunity to examine the ledger sheet that 

showed how the escrow company intended to disburse the proceeds of each sale. The court held he waived his right to 

assert that the credit union breached the loan agreement by 

failing to collect interest on the sale of each lot. Jackson 

v. Nangle (Alaska 1984), 677 P.2d 242, 249. 

In the same way, Mr. Sperry signed his pay checks for 

nineteen years with knowledge of any increases and decreases, 

but without raising objection regarding the lack of any 

conversion compensation. 

We conclude that there exists substantial credible 

evidence to support the District Court's conclusion that Mr. 

Sperry's signing of the retirement agreement waived and 

released his right to any wage claims. We affirm the District Court on this issue. 

I1 

Is Mr. Sperry's claim barred by the doctrine of laches? 

On appeal, MSU contends Mr. Sperry's claim is barred by 

laches. Although this was not a part of the findings of fact 

and conclusions of law of the District Court, the defense of 

laches was asserted in the Final Pre-Trial Order, so it is 

subject to review by this Court. 

Mr. Sperry testified that his direct supervisor indicated his increase in pay did not include the conversion compensation, but promised he would receive that additional salary 

increase at a later date. MSU contends Mr. Sperry received a 
13% increase, which included his conversion compensation, and 

there was no promise by anyone to pay him further increases. 

The only person other than Mr. Sperry, who would have 

known of the alleged oral contract was his direct supervisor, 

Robert McCall. Mr. McCall died in 1971. Yet, the only time 

Mr. Sperry brought the issue of conversion compensation to 

the attention of anyone else at MSU was in his February 1985 

letter to Michael F. Malone, long after Robert McCall's 

death, and after completing the retirement agreement. He did 

not raise the issue again until after he retired. 

MSU contends that Mr. Sperry's claim for such conversion 

compensation is now barred by the equitable doctrine of 

laches. We agree. Laches exists where there has been an 

unexplainable delay of such duration or character as to 

render the enforcement of an asserted right inequitable. 

Brabender v. Kit Mfg. Co. (1977), 174 Mont. 63, 67-68, 568 

P.2d 547, 549. Where a party is actually or presumptively 

aware of his rights but fails to act, laches is appropriate. 

Clayton by Murphy v. Atlantic Richfield Co. (1986), 221 Mont. 

166, 170, 717 P.2d 558, 561. A party is held to be aware of 

their rights where the circumstances he or she knows of are 

such as to put an ordinarily prudent person on inquiry. 

Johnson v. Estate of Shelton (Mont. 1988), 754 P.2d 828, 831, 

45 St.Rep. 887, 891. Mr. Sperry asks for a retroactive wage 

increase for the last nineteen years of his employment. He 

does not allege that he was unaware of this claim during that 

time. We hold Mr. Sperry's claim is barred by the doctrine 

of laches. 

Although MSU argues that Mr. Sperry's claim is also 

barred by the statute of limitations, we find it unnecessary 

to discuss that issue in light of our holding on laches. 

Furthermore, we will not address Mr. Sperry's contentions 

that MSU breached the implied covenant of good faith and fair 
dealing. This Court will not address on appeal an issue not 

presented to the District Court. Wyman v. DuBray I~and Realty 

(Mont. 1988), 752 P.2d 196, 45 St.Rep. 621. 

Affirmed.