No. 85-340 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

CLARE J. JENSEN, 

Plaintiff and Appellant, 

STATE OF MONTANA, DEPARTMENT OF 

LABOR & INDUSTRY, JOB SERVICE 

DIVISION, and DAVID HUNTER, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Eighth Judicial District, 

In and for the County of Cascade, 

The Honorable Joel G. Roth, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Marra, Wenz, Johnson & Hopkins; Neal G. Jensen, 

Great Falls, Montana 

For Respondent: 

R. Scott Currey, Dept. of Labor & Industry, Helena, 

Montana 

Submitted on Briefs: Jan. 16, 1986 

Decided: April 17, 1986 

Filed: APR 1 7 1986 

Clerk 
Mr. Justice John C. Harrison delivered the Opinion of the 

Court. 

Clare Jensen appeals from an order of the Cascade 

County District Court which dismissed Count I1 of his amended 

petition for veterans preference in the termination of his 

job. We affirm the order of the District Court. 

The facts of this case are basically undisputed by the 

parties. Appellant Clare Jensen ("Jensen") was hired by the 

Employment Security Division, the predecessor of the Job 

Service Division of the Department of Labor and Industry, in 

1961. When initially hired by the Department, Jensen, a 

veteran, claimed and received a.n employment preference. In 

March 1982, Jensen applied for the position of Employment 

Manager I11 in the Great Falls Job Service Office. On or 

about June 16, 1982, Jensen was informed by the Department 

that he was not chosen for the Great Falls manager position. 

On June 30, 1982, Jensen was terminated pursuant to a 

department-wide reduction in force. 

On July 5, 1983, Jensen filed an Amended Petition to 

Enforce Employment Preference in the District Court, Eighth 

Judicial District, in and for the County of Cascade. His 

amended petition contained three counts. Count I alleged 

that Jensen was not hired by the respondents, (hereinafter 

"Department"), as the manager of the Great Falls Job Service 

Office in violation of his veterans preference. Count I1 

alleged that he was terminated pursuant to a reduction in 

force by the Department in violation of his veterans preference, and Count I11 alleged that the 1982 interview process 

utilized by the Department in filling the manager's position 
violated a rule of the now defunct Montana Merit System 

Council. 

In July 1983, in response to Jensen's amended petition, 

the Department filed a Consolidated Motion that in part asked 

the District Court to dismiss Jensen's amended petition. In 

August 1983, the parties filed with the District Court a 

stipulated set of facts and an agreement that the court would 

hear only Jensen's Count I. Paragraph 5 of the Stipulation 

dealt with the remaining two counts of Jen.senrs amended 

petition. It read: 

Petitioner's Counts Two and Three shall 

be reserved and that all claims and 

defenses arising from Counts Two and 

Three are reserved as to all interested 

parties. Any statutes of limitation 

pertinent to Counts Two and Three are 

tolled pending the resolution of 

petitioner's Count One. 

On September 19, 1983, the District Court issued an 

order ruling on Jensen's Count I. The court found that 

Jensen had been denied his veterans preference. In addition, 

the District Court ordered the Department to appoint Jensen 

to the manager's job and . to provide him with backpay. The 

Department appealed this order. In Jensen v. State of Montana, et al. (Mont. 1984), 689 P.2d 1231, 41 St.Rep. 1971, 

this Court affirmed in part and vacated in part the District 

Court's order. Th.is Court concluded: 

For the foregoing reasons, we vacate that 

part of the judgment that addresses 

Jensen's remedy and remand to the District Court with directions to order the 

Department of Labor and Industry to 

reopen the manager position to the original applicants, grant Jensen and the 

other preferred applicants their preference, and otherwise fill the vacancy in 

accordance with Crahtree. 

Jensen. 689 P.2d at 1235. 
The Department subsequently did reopen the manager's 

position in question, reinterviewed the preferred applicants, 

including Jensen, and filled the position with a preferred 

applicant, not Jensen. 

While the Department's appeal involving Count I was 

pending before this Court, however, the Montana legislature 

met in special session in December 1983 and enacted a new 

Veterans' and Handicapped Persons' Employment Preference Act 

which became effective December 20, 1983. This new act 

retroactively repealed the old Veterans Preference Act under 

which Jensen had filed his amended petition. In doing so, 

the legislature decreed that claims under the old act were 

barred if they were not reduced to judgment on the effective 

date of the new act. Only cl.aims that had been reduced to 

judgment before December 20, 1383, were enforceable, and no 

claims under the old act could be made under the new act. 

In February 1985, the Department filed an Amended 

Motion to Dismiss asking the District Court to dismiss the 

remaining Counts I1 and I11 of Jensen's amended petition. 

With regard to Count TI, the subject of this appeal, the 

Department argued that Section 14 of the new Veterans 

Preference Act (which is now known as the "retroactive 

repealer") had the effect of barring Count I1 and its 

allegation that Jensen was wrongfully terminated by the Great 

Falls Employment office because the person who was retained 

in his position was not a veteran. The Department argued 

that since Jensen's claim in Count I1 was not reduced to 

final judgment before the effective date of the new act 

(December 20, 1983), his preference claim was barred. 

In March 1985, Jensen filed a Motion of Partial Summary 

Judgment as to his Count 111. In June 1985, the District 
Court granted the Department's motion to dismiss Counts I1 

and I11 of Jensen's amended petition and denied Jensen's 

Motion for Partial Summary Judgment. Jensen then commenced 

this appeal in which he only appeals that portion of the 

District Court's order dismissing Count I1 of his amended 

petition. 

Jensen presents the following issue for review by this 

Court : 

Whether Jensen's claim of veterans preference under 

Count 11, which was expressly reserved by the Stipulation of 

the parties, survived the Montana legislature's "retroactive 

repealer." 

Jensen's Count I1 is brought pursuant to S$ 10-2-201 

through 10-2-206, MCA (repealed 1983) . In Crabtree v. Montana State Library (M0n.t. 1983), 665 P.2d 231, 40 St.Rep. 

963, issued approximately one month before Jensen filed his 

amended petition, this Court held that $ 10-2-201 through 

5 10-2-206 granted qualified veterans and handicapped civilians an "absolute preference" over non-veterans and 

non-handicapped applicants in public employment. Sections 

1.0-2-201 through 10-2-206, referred to here as the old Veterans Preference Act, were repealed by the legislature in 

special session in December 1983 as part of its adoption of 

the new "Montana Veterans' and Handicapped Persons' 

Employment Preference Act," S 39-30-101, et seq. MCA. 

Section 14 of the act reads: 

Section 14. Repealer. Sections 10-2-201 

through 10-2-206, MCA, are repealed. 

This repeal applies retroactively to bar 

any claim of violation or application of 

10-2-201 through 10-2-206 that has not 

been reduced to judgment, whether or not 

the judgment is final, on the effective 

date of this act [December 20, 19831. 

Claims und.er 10-2-201 through 10-2-206 
that have been reduced to judgment, 

whether or not the judgment is final, on 

the effective date of this act, are 

enforceable. No claim for a violation of 

10-2-201 through 10-2-206 may be made 

under section 8 of this act [39-30-206 

and 39-30-2071. 

As the Department points out, the validity of Section 

14 was affirmed by this Court in Conboy v. State of Montana 

(Mont. 1985), 693 P.2d 547, 42 St.Rep. 120. Jensen now 

argues that Count 11, although not yet reduced to judgment, 

is not barred by Section 14 due to a Stipulation (quoted 

above) between the parties herein "reserving" his claim. 

Jensenls argument can be summarized by the following excerpts 

from his brief: 

The issue in this appeal can be stated 

simply: Can the government, obliged as 

though a private person to observe the 

terms of its contracts, totally repudiate 

by a legislative act its earlier express 

a.greement to reserve an individual s 

claims. That is, can the government 

forbid one to pursue a claim which it had 

earlier affirmatively promised an 

ind-ividual he could preserve? 

Simply stated, the Department is now 

seeking to backtrack on its earlier 

Stipulation, for the sole purpose of 

trapping Jensen who relied in good faith 

on such written agreement when he did not 

bring Count Two on for a hearing and 

reduce it to judgment while awaiting the 

Department's appeal of Count One. By 

abiding by his agreement to wait for 

Count One to be resolved, Jensen should 

not now be penalized. Judicial economy 

was achieved by pursuing Count One to a 

conclusion. 

For his patience and consideration . . . Jensen should not be thrown out of Court. 

Instead, the Department should be compelled to abide by the Stipulation, and 

its express agreement to reserve Jensenls 

Count Two preference claim pending the 

resolution of Count One, even though a 
special session of the blontana 

Legislature has intervened. 

Jensen's argument in this case, although intriguing and 

persuasively written, is flawed and cannot stand. This Court 

may sympathize with Jensen's position, but we cannot ignore 

the realities of the current law in this state. 

Both parties seem to agree that paragraph 5 of the 

Stipulation was entered into voluntarily for the purpose of 

simplifying litigation. The intent seems to be clear: to 

get Count I, apparently viewed by the parties as the key 

issue, before the District Court as quickly as possible. 

We agree with Jensen that the Stipula.tion should be 

viewed as a contract or agreement that is to be interpreted 

pursuant to contract principles. See: Olson v. Idaho 

Department of Water Resources (Idaho 1983), 666 P.2d 188, and 

Thayer v. Federal Life Insurance Company s is. 1935), 258 

N.W. 849. Jensen seems to argue that this Stipulation 

creates an obligation on behalf of the Department to 

"reserve" Jensen's claim for an indefinite period and 

regardless of the action of the legislature. As the 

Department points out, however, this argument fails to take 

into consideration the gratuitous character of Jensen's 

und.erlying veterans preference claim. 

In Conboy this Court held, in discussing the character 

of the veterans preference created by the old preference law, 

that : 

We hold that the veterans ' preference 

rights granted under the repealed portion 

of the Veterans Preference Act are not 

rights earned through years of service to 

the state, but are a gratuity given to 

citizens of Montana by the State to show 

its appreciation for service in the Armed 

Forces. They do not amount to rights 

vested in the veterans. 
We further point out that in repealing 

the old veterans1 preference law, 

§ 10-2-201 through 10-2-206, MCA, the 

legislature was not faced with any statutory or constitutional limitations on its 

rights of repeal. There is no provision 

in that Act or in the Montana Constitution limiting the leqislaturels right to 

repeal the preference.. . . We conclude 

that the legislature properly could 

repeal the veterans1 preference by a 

majority vote at any time and that veterans acting under the old law are deemed 

to have acted in contemplation of that 

power of repeal on the part of the 

legislature. 

Conboy, 693 P.2d at 552. 

This position adopted in Conboy was recently reaffirmed 

by this Court in Femling v. Montana State University (Mont. 

1986), 713 P.2d 996, 43 St.Rep. 235, and ~ick v. Montana 

Department of Highways (Mont. 1985), 711 P.2d 795, 42 St.Rep. 

1926. In Fleming, this Court stated: 

"A citizen can have no vested right in a 

general law which can preclude its 

amendment or repeal, and there is no 

implied promise on. the part of the state 

to protect its citizens against 

incidental injury occasioned by changes 

in the law." Stanford v. Coram (1903) , 28 Mont. 288, 293, 72 P. 655, 656. As 

we noted in Conboy v. State (Mont. 

1985), 693 P.2d 547, 42 St.Rep. 120, a 

veteran acting under the absolute 

veterans1 preference statute did so in 

contemplation of the legislature's power 

of repeal. Statutes may be replaced at 

any time, and a person acting under a 

statute is "deemed to have acted in 

contemplation of this power of repeal." 

Section 1-2-110, MCA. 

In Conboy, we stated that the preference 

statute was a gratuity given to veterans 

by the State. It did not amount to a 

right vested in the veterans. Conboy, 

693 P.2d at 552. We reaffirmed this 

conclusion in Nick v. Montana Dept. of 

Hwys. (Mont. 1985), 711 P.2d 795, 42 

St.Rep. 1926. 
Fleming, 713 P.2d at 998. 

When viewed in light of Conboy, Femling and Nick, the 

Department correctly argues the Stipulation must be viewed as 

an agreement to reserve a claim based on a gratuity that the 

legislature was empowered to repeal at any time. Jensen and 

other veterans are deemed to have "acted in contemplation" of 

this power to repeal. In other words, Jensen entered the 

Stipulation. with knowledge of the legislature's power to 

repeal the old Veterans Preference Law at any time. 

Jensen's strong reliance on Perry v. United States 

(1935), 294 U.S. 330, 55 S.Ct. 432, 79 L.Ed. 912, indicates 

that he is confusing the gratuitous nature of his claim with 

the binding contractual nature of the Stipulation. As the 

Department points out, a close reading of Perry shows that 

the situation in that case is easily distinguishable from the 

present case. In Perry, the Court was asked to decide 

whether a joint resolution passed by Congress allowing the 

United States government to pay off government bonds with 

currency rather than gold, as called for in the bond 

obligation itself, was proper. The Court found that Congress 

could not change its contractual obligation by legislation 

once that obligation had been incurred. The implication is 

that the bond holder's right to be paid in gold had vested 

and once vested could not be tampered with by Congress. 

Jensen relies on this case to argue that the Montana 

legislature's passage of Section 14 illegally repudiates the 

Stipulation or "contract" he had with the Department reserving his Count I1 claim. Jensen sums up his argument under 

this issue by stating: 

[I] n Perry the point is inescapable: - a 

qovernment cannot repudiate - its - own 

contracts. 
A government, such as the State of 

Montana in this case, must be held to 

the terms of its contracts. If its 

agent stipulates to reserve the claims 

of an individual under an existing 

legislative act, that Stipulation cannot 

be repudiated and annulled simply on the 

pretext of the subsequent "fluctuating 

policy" of the Legislature. 

Just as the bond before the Court in 

Perry was "an obligation of the United 

States," so too is the Stipulation 

executed by counsel for the Department 

an obligation of the State of Montana. 

The Department correctly points out, however, that in 

Perrv the obligation at issue was a bond obligation creating 

vested rights in the bond holder. The government was 

attempting to modify these vested rights by giving bond 

holders less than they had bargained for. In this case, the 

obligation that Jensen relies on is a Stipulation reserving 

the enforcement of a claim. It does not create a claim as in 

Perry. The Stipulation reserves a claim that can be 

eliminated at any time by legislative action. The fact that 

the claim was reserved does not change the character of the 

claim--it can still be eliminated by the legislature at any 

time. 

We agree with the Department that Jensen. is attempting 

to make a gratuity into a vested right. His argument implies 

that the preference creates an obligation, rather than a 

gratuity, however this is not the current law in light of 

Femling, Nick and Conboy, supra. The Stipula.tion, therefore, 

reserved only what existed at the time it was entered into (a 

gratuity). It cannot now be used to give Jensen more than he 

originally had. 
The District Court's order dismissing Jensen's Count 

I1 is affirmed. 

We concur: 

Justices 
Mr. Justice John C. Sheehy, dissenting: 

Justice sometimes takes strange forms. This case is 

illustrative. 

When Jensen first brought his case here, Jensen v. State 

(1984), 689 P.2d 1231, 41 St.Rep. 1971, this Court held that 

the absolute preference accorcled veterans under the Veterans 

and Handicapped Civilian Employment Preference Act (5 

10-2-201, et seq. PCA) was applicable, and therefore we 

remanded the case so that the manager position could be 

reopened and a decision made in the accordance with the 

preference. In that case both Justice Harrison and myself 

dissented, saying that since Jensen had borne the heat of the 

battle to secure the result that recognized the veterans 

preference law, he should be the recipient of that benefit. 

In a later case involving Charles F. Femling (Mont. 

19861, 713 P.2d 996, 43 St.Rep. 235, this Court held that the 

legislature could retroactively withdraw all veterans 

preference rights without violating the due process clause of 

the state or federal constitution. I dissented in the 

Femling case on the ground that Femling had applied for state 

employment at a time when he had a statutory right to 

preference, he had claimed the preference, his right had 

vested and so he was entitled to the job. 

Now, Jensen is back again. What happened to him before 

the Department was what we predicted, that the Department of 

Labor and Industry would never grant him the job to which he 

had proven his right, but in retaliation for beating the 

Department in court, the appointment would go to some other 

veteran. The majority opinion now condones this result. 
J dissent from the majority opinion here on the grounds 

that Jensen was entitled to the job from the heginning, was 

entitled. to the job by reason of his being successful. in the 

first Jensen case, and that his right had become vested, as I 

argued in Femling, from the time that he demanded the benefit 

of the preference law in his application for appointment. 

In an era when this country seems to be undergoing a 

binge of patriotism with country-rock singers blazing out 

their love for the flag, and our armed forces confronting 

every two-bit nation in the world, the attitude of this State 

through its legislature and courts towards the men and women 

who actually gave something of themselves to protect the 

country is a contradiction. Rudyard Kipling must have been 

looking down the long years to this State when he wrote of 

the difference in treatment accorded Tommy Atkins in 

peace-time and in war-time: 

Then its Tommy this an' Tommy that and "Tommy, 

'OW'S your soul?'' 

But its "Thin red line of 'eroes" when the drums 

begin to roll. 

The drums begin to roll my boys, the drums begin 

to roll. 

Oh it's "Thin red line of 'eroes" when the drums 

begin to roll. 

We aren't no thin red. 'eroes nor we aren't no 

blackguards too, 

But single men in barricks most remarkable like 

you. 

An' if sometimes our conduck isn't all your fancy 

paints 

Why, single men in barricks don't grow into 

plaster saints. 

While its Tommy this and Tommy that an' "Tommy 

fall be'ind", 

But it's "Please t-o walk in front, sir" when 

there's trouble in the wind. 

There's trouble in the wind, my boys, there's 

trouble in the wind. 

Oh it's "Please to walk in front, sir", when 

there's trouble in the wind. - 

R .- 

Justice 

Mr. Justice Frank B. Morrison joig in the dissent of Mr. 

Justice John C. Sheehy.