No. 81-561. INTHE SUPREME COURT OF TEE STPATEOF .!.IONTANA 1982

JOHN BARNICOAT, Plaintiff and Appellant,

COIb3iviISSIONER OF DEPARTMENT OF LABOR AND INDUSTRY, THE EMPLOYMENT SECURITY DIVISION, etal., Defendants and Respondents.

Appeal from: DistrictCourtof the FifthJudicial District, In and for the Countyof Jefferson, The Eonorable Frank E. Blair, Judge presiding.

Counsel of Record: ForAppellant: Hartelius & Associates; CameronFerguson, Great Falls, Montana

For Respondent:



### , Deptof Labor & Industry, Helena, Montana

Submittedon Briefs: August 26, 1982 Decided; November 10, 1982Nr. Justice Fred J. Weber delivered the Opinion of the Court.

John Barnicoatbrought a legal action against the Commissioner of the Department of Labor and Industry claiming

a refund of unemployment insurancebenefits he paid back to the State Employment Security Division (Division). The District Court of the Fifth Judicial District,JeffersonCounty, sitting without a jury, dismissed Barnicoat's complaint due to his failure to exhaust statutory administrativeremedies. Barnicoat appeals. We affirm. The following issues are presented for review:

(I) Is Barnicoatprecluded from bringing a legal action in a District Court on the grounds thathe failed to exhaust his administrativeremedies. (2) Does the Division have the right to demand repayment of unemployment insurancebenefits 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 insurancebenefits 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. -2-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, Barnicoatwas awarded back pay for the sameperiod. Barnicoat's paying the $1,000back 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 shallpromptly 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: "Youwere 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. "Itis 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: "APPEALRIGHTS: Any claimant or employerwho 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 orwithin seven (7)days after notification is mailed.

### " Barnicoat never has paid the remaining $22 requested by the Division. No request for a redeterminationwas made by Barnicoat

nor was any appeal taken from the decision. Section 39-51-2402(4), MCA, contains the following requirements on redeterminationsor appeals:

### "(4) A determination or redetermination shall be deemed finalunless an interested party entitled to notice thereof applies for reconsiderationof the determination or appeals therefrom within 5 days after delivery of such notification or within 7days after such notificationwasmailed to his last known address, provided that such period may be extended for good cause." The foregoing statute requires the conclusions that the redeterminationof 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 isprovided 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 dissatisfiedparty may appeal from the decision of an appeals referee to the Board itself. The decision of the Board becomes final unless an interestedparty requests a rehearing or initiates judicial reviewby 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, inpertinent part provideswith regard to finality and judicial review: "Any decision of the board in the absence of an appeal therefromas hereinprovided 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 reviewonly 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 reliefmust be sought from the administrativebody and the statutory remedy exhausted before relief can be obtained by judicial review." State ex rel. Jonesv. Giles (19751, 168Mont. 130, 132, 541 P.2d 355, 357. Barnicoat repaid to the Division the $1,000 onNovember 2, 1979. The Divisionwrote Barnicoat on November 6, 1979. No actionwas taken in response to the Division letter. Barnicoat's attorneywrote a letter to the Division,dated December 5, 1980,attempting to challenge the repayment. Next, a complaintwas filed in District Court by Barnicoat

onMarch 12, 1981. Barnicoat completely failed to utilize the rehearing and appealprocesses provided by statute. Barnicoat failed to exhaust all of his remedies available within the agency and isprecluded from requesting judicial review in a District Court. The lower courtwas 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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