No. 81-561. 

IN THE SUPREME COURT OF TEE STPATE OF .!.IONTANA 

1982 

JOHN BARNICOAT, 

Plaintiff and Appellant, 

COIb3iviISSIONER OF DEPARTMENT OF 

LABOR AND INDUSTRY, THE EMPLOYMENT 

SECURITY DIVISION, et al., 

Defendants and Respondents. 

Appeal from: District Court of the Fifth Judicial District, 

In and for the County of Jefferson, The Eonorable 

Frank E. Blair, Judge presiding. 

Counsel of Record: 

For Appellant: 

Hartelius & Associates; Cameron Ferguson, Great 

Falls, Montana 

For Respondent : 

, Dept of Labor & Industry, 

Helena, Montana 

Submitted on Briefs: August 26, 1982 

Decided; November 10, 1982 
Nr. Justice Fred J. Weber delivered the Opinion of the Court. 

John Barnicoat brought a legal action against the 

Commissioner of the Department of Labor and Industry claiming 

a refund of unemployment insurance benefits he paid back to 

the State Employment Security Division (Division). The District 

Court of the Fifth Judicial District, Jefferson County, sitting 

without a jury, dismissed Barnicoat's complaint due to his 

failure to exhaust statutory administrative remedies. Barnicoat 

appeals. 

We affirm. 

The following issues are presented for review: 

(I) Is Barnicoat precluded from bringing a legal action 

in a District Court on the grounds that he failed to exhaust 

his administrative remedies. 

(2) Does the Division have the right to demand repayment 

of unemployment insurance benefits paid to an unemployed person 

who later receives back pay for the period of his unemployment 

through a labor grievance arbitration proceeding. 

Barnicoat was employed by the Boulder River School and 

Hospital, Boulder, Montana, from September 1978 to June 18, 

1979, when he was terminated. On June 19, 1979, he applied 

for unemployment insurance benefits and received $1,022 in 

benefits for the period of June 18, 1979, through September 29, 

1979. Barnicoat also filed a grievance through his union, 

the American Federation of State, County, and Municipal Employees, 

contesting the termination. The grievance resulted in a decision 

issued September 24, 1979, reinstating Barnicoat and awarding 

back pay in the amount of $1,004. On November 2, 1979, ~arnicoat 

contacted the ~ivision by telephone and informed them of his 

back pay award and on that same day made payment to the ~ivision 

of $1,000. 

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The first issue is whether Barnicoat is precluded from 

bringing a legal action in a District Court on the grounds 

that he failed to exhaust his administrative remedies. The 

District Court dismissed the action on that ground. 

Subsequent to applying for and receiving unemployment 

benefits, Barnicoat was awarded back pay for the same period. 

Barnicoat's paying the $1,000 back to the Division triggered 

a reconsideration of his claim under section 39-51-2404(2), 

MCA, which provides: 

"(2) The deputy may for good cause reconsider 

his decision and shall promptly notify the 

claimant and such other interested parties of 

his amended decision and the reasons therefore." 

On November 6, 1979, Barnicoat was sent a letter by the 

Division which provided: 

"You were indebted to this agency for $1,022.00 

due to your reward of back-pay. You had received 

checks (14) for weeks ending 6-30-79 through 

9-29-79 at $73.00 each. We are in receipt of 

your check for $1,000.00 which leaves an overpayment balance of $22.00. 

"It is the decision of this agency that you 

refund the amount shown due." 

The letter also included the Division's standard notice of 

appeal, which provides: 

"APPEAL RIGHTS: Any claimant or employer who 

believes that the decision of a Claims Examiner 

is contrary to the law or the facts, may request 

a redetermination from the Claim Examiner, or may 

appeal from his decision through a local office 

of the commission, requesting a review and stating 

the reasons therefor. Appeals must be filed within 

five (5) days after receipt of this notification 

or within seven (7) days after notification is 

mailed. " 

Barnicoat never has paid the remaining $22 requested by the 

Division. 

No request for a redetermination was made by Barnicoat 

nor was any appeal taken from the decision. Section 39-51-2402(4), 

MCA, contains the following requirements on redeterminations or 

appeals : 
"(4) A determination or redetermination shall 

be deemed final unless an interested party 

entitled to notice thereof applies for reconsideration of the determination or appeals therefrom within 5 days after delivery of such 

notification or within 7 days after such 

notification was mailed to his last known address, 

provided that such period may be extended for 

good cause." 

The foregoing statute requires the conclusions that the 

redetermination of the Barnicoat claim by the Division became 

final because of the absence of a request for redetermination 

or an appeal. 

Sections 39-51-2402, -2403 and -2404, MCA, describe the 

appeal process which is provided for claims and redetermination 

of claims. In the initial appeal, an appeals referee makes 

findings and conclusions and furnishes a copy of his decisions 

and the findings and conclusions to the parties. The appeals 

referee's decision becomes final unless further review is 

initiated within the stated periods of time. Next, any dissatisfied party may appeal from the decision of an appeals 

referee to the Board itself. The decision of the Board becomes 

final unless an interested party requests a rehearing or 

initiates judicial review by filing a petition in District 

Court within thirty days of the date of mailing of the Board's 

decision. Section 39-51-2410(1), MCA, in pertinent part 

provides with regard to finality and judicial review: 

"Any decision of the board in the absence of an 

appeal therefrom as herein provided shall become 

final 30 days after the date of notification or 

mailing thereof . . . and judicial review thereof 

shall be permitted only after any party claiming 

to be aggrieved thereby has exhausted his remedies 

before the board." 

The statutory provision allowing judicial review only after 

exhaustion of remedies administratively is consistent with 

prior holdings of this Court: 
"It is a general principle that if an administrative 

remedy is provided by statute, that relief must be 

sought from the administrative body and the statutory 

remedy exhausted before relief can be obtained by 

judicial review." State ex rel. Jones v. Giles (19751, 

168 Mont. 130, 132, 541 P.2d 355, 357. 

Barnicoat repaid to the Division the $1,000 on November 

2, 1979. The Division wrote Barnicoat on November 6, 1979. 

No action was taken in response to the Division letter. 

Barnicoat's attorney wrote a letter to the Division, dated 

December 5, 1980, attempting to challenge the repayment. 

Next, a complaint was filed in District Court by Barnicoat 

on March 12, 1981. 

Barnicoat completely failed to utilize the rehearing 

and appeal processes provided by statute. Barnicoat failed 

to exhaust all of his remedies available within the agency 

and is precluded from requesting judicial review in a District 

Court. The lower court was correct in dismissing the complaint 

on the ground that Barnicoat failed to exhaust his administrative 

remedies. Because of the holding on this issue, it is not 

necessary to consider the second issue. 

Affirmed. 

We Concur: 

e4-4 J,@ad 

C;hief Justice 

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