No. 79-32 INTHE SUPREME COURT OF THE STATE OF MONTANA 1980

A. C. RIERSON, Plaintiff and Appellant,

THE STATE OF IIIONTANA, AND BOARD OF ADMINISTRATION OF PERS, Defendant and Respondent.
Appeal from: DistrictCourt of the FirstJudicial District, In and for theCounty of Lewis and Clark. Honorable Gordon Bennett, Judge presiding. Counsel of Record: For Appellant: Conner, Baiz and Olson, Great Falls, Montana Dennis Conner argued, Great Falls, Montana For Respondent: Hugh, Bennett, Kellner and Sullivan, Helena, Montana John F. Sullivan argued, Helena, Montana
Submitted: February 26, 1980

Urn%& 

## 2

,

## ;&- ClerkMr. Justice John Conway Harrison delivered the Opinion of the Court. Appellant, A1~ierson, petitioned this Court for rehearing of his original appeal, inwhich we affirmed the District Court order dismissing his original and amended petition for judicial review of an administrative agency decision. Rehearing was granted, and the cause submitted on briefs. Rierson's 

### case was commenced inDistrictCourt asan action for judicial review of a Board of Administration decision which denied Rierson's claim for additional 

### retirement benefits. The petition for review 

### was filedon January 11, 1978, but there was no subsequent serviceon the Board. An "amended complaint" 

### was served on the Board over a year 

### later on May 29, 1979. The Board filed a motion to dismiss Rierson's complaint on the grounds that 

### it did not comply with the "prompt service" requirement of theAdministrativeProcedure Act. Section 2-4-702 (2)(a)

## ,MCA. The DistrictCourt granted themotion todismiss, and Rierson appealed to thisCourt. In an opinion dated April 

### 1, 1980, 

### we affirmed the District Court finding that the sixteen and one-half month delay in serving notice upon the Board was not reasonable under the facts of Rierson's case. Mr. Justice Sheehy argued inhis dissent that the Board did not have subject matter jurisdiction over two of Rierson's three claims, and since the Board did not have the authority to decide constitutional issues or tortissues against itself, ~ierson's petition should be considered one for independent relief towhich the "prompt service" requirement would not apply. Mr. Justice Daly joined inthe dissenting opinion. On ~pril 11, 1980, Rierson petitioned this Court for rehearing based

### on the position taken by Justices Sheehy and Daly in the dissent. In 1971 the responsibility for the administration of the highway patrol retirement systemwas transferred from the ~ighway Patrolmen's RetirementBoard to the Board of Administration of the Public Employees' Retirement System. Until 1971 a retiring patrolman with more than twenty-five years of service could receive retirementbenefits in excess of one-half regularpay. When the responsibilities for the patrolmen's retirement systemwere transferred, an attorney for the Board of Administration interpreted this practice to be in violation of sections 31-209 and 31-213, R.C.M. 1947. This interpretationwas adopted as Board policy
onApril 21, 1972,and applied prospectively so that patrolmen retiring after April 21 could receive a maximum of onehalf pay even if they continued on the job after their twenty-fifth year of service. Rierson retired at the end of his twenty-five years of service onApril 8, 

### 1974. Nearly two years later on March 18, 1976,Rierson's attorney demanded an adjustment of Rierson's retirementbenefits. In that demand letter Rierson's attorney noted that "a suitwill be filed no later than April 9, 1976",and further that, "[tlime is of the essence in that the Statute of Limitations is about to run in thismatter." The Board responded by suggesting that Rierson avail himself of administrative remedies since the Board had adopted contested case procedures. By a letter dated April 6,Rierson formally requested an administrative hearing before the Board. A hearing was granted and held
on July 15, 

### 1976. At the conclusion of that hearing, Rierson's attorneywas directed to submit a brief in supportof Rierson's position by August 9, 1976. No brief 

### was forthcoming, and after several months had elapsed, the Board sent a letter to Rierson's attorney advising him that
a decisionwould be made with or without a brief. Nearly eightmonths after the hearing, on March 11, 1977, Rierson's brief was submitted. In his brief Rierson claimed thathe 

### was entitled to additional benefits because of due process and equal protectionviolations and on the grounds of promissory estoppel. The hearings examiner responded to 

### all three claims inthe proposed findings of fact, conclusions of law and an order denying Rierson additional benefits on August 25, 1977. The proposed decisionwas adopted by the Board, and Rierson

### was notified of the decision on December 12, 1977. On January 11, 1978, Rierson's attorney filed a petition forjudicial review inthe DistrictCourt. Notice
was not given to the Board of Rierson's petition. No further action was taken by Rierson for sixteen and one-half months. Then, on May 21, 1979, Rierson filed an "amended complaint" which was served on the Board on May 29, 1979. This was the Board's firstnotice of any judicial proceeding inthe 

### case. The Board moved todismiss both the original and amended petitions. The DistrictCourt treated the petitions asrequests forjudicial review which would require "prompt service" of notice to the Board under the Administrative Procedure Act. Upon rehearing, Rierson contends that the ~istrict Court erred infailing to treathis petition for judicial review as an independent civilaction towhich the "prompt service" requirement would not apply. We find that if error


### was committed, it would not have affected the decision ofthe DistrictCourt. Although Rierson chose tohave his case heard by the Board, he argues on appeal that the Board's decision 

### isnot binding, and, moreover, sincehis claims dealtwith constitutional issues and a tortclaim against the Board, his claims could not have been resolved by an administrative body. Although appellant's District Court actionwas filed under theAdministrative Procedure Act, on rehearing he asserts thathe should not be allowed toproceed with his claimunder rules applicable to original DistrictCourt actions, unhindered by the requirements of administrative procedural restrictions. It 

### isinteresting tonote that although the jurisdictional issuewas firstraised by Justice Sheehy inhis dissent, Rierson argues that 

### it has always been his intention toproceed inDistrict Court with
an action independent of the Board's unrewarding decision. Wemust conclude that even if the District Court claim is an independent civil action, original in that court, Rierson's own failure topursue that action has lefthim without a remedy on appeal. Clearly, if the DistrictCourt action 

### is an independent action, Rierson 

### isbound by the statuteof limitationswhich applies to such actions. In
cases where damage toproperty rights 

### is argued, any cause must be brought within two years. Section 27-2-207, MCA. In his reply Rierson asserts that the applicable limitation is that forwritten contracts (section27-7-202(1), MCA) which iseight years, or obligations, other than 

### a contract, and not founded on a written instrument (section 27-2-202(3), MCA) which 

### is three years. Neither of these statutesof limitations 

### is applicable inour view. Rierson's claims involved two constitutional violations and a request forinvocation of the doctrineof promissory estoppel. Only in the broadest sense could these limitations be considered tobe controlling, and since there 

### is a more specific 

### statute involving injury topersonal property rights, of which retirement benefits 

### are one, 

### we areconstrained to follow themore specific statute. Section 1-3-225, MCA. See also Butte Country Club v. Dept. of Revenue (1980)

## , Mont.



## , 607 P.2d 551, 37 St.Rep. 479. We alsonote that Rierson admitted the applicability of a two-year statute of limitations inhis 

### letter to the Board of March 18, 1976. Having concluded that the two-year statuteof limitations 

### is appropriate inthis case, 

### we further find that Rierson's District Court action 

### isbarred. Rierson has been
aware of the effect of the two-year statuteof limitations sincehe firstdemanded that his benefits be adjusted in 1976. The entirehistory of this case is one of neglect and procrastination. He did not approach the Board for an adjustment until nearly two years after his retirement. Clearly his cause of action accrued no later than his 

### retirement date, and from the record, there 

### is no excuse for a delay of one year and 360 days which would obligate this Court toexcuse Rierson's tardiness. When he was notified that the administrativeprocess was over, he had fivedays remaining within the confines of section 27-2-207(1), MCA, to filehis independent and original complaint inDistrict Court. Instead, he filed a petition for judicial review on January 11, 1978, twenty-five days after his notification of the adverse agency ruling. Although that actionwas filedwithin the thirty-day limitation forpetitions for judicial review of administrative actions, thisCourt

### will not allow the administrative appeal period tobe added tothe two-year statute of limitations, thus bootstrapping his original and independent action intocompliance with the statuteof limitations by use of an administrative action he now contends 

### isvoid. Throughout the course of Rierson's suitagainst the Board, he has had the option of an independent District Court petition for relief. Although urged by the Board to seek administrative remedies, he was not required todo so. This Court must respect the requirement that remedies be sought with some degree of diligence. Rierson knew of the
new interpretation of the retirement laws 

### as early asJune 20, 1972. In the two-year period between thatdate and his retirement inApril of 1974, he made no effort to seek any kind of remedy. Hisclaims lay dormant for almost another two years untilApril 5, 1976, before he requested
an administrativehearing. During that hearing, Rierson delayed the proceedings for another eightmonths before submitting hisbrief. This Court

### willnot condone manipulation of the law so that a case may be further pursued. To do so would be an affront to the letter and the spiritof the statutes of limitations. Viewed inthe best possible light, Rierson's suitagainst the Board 

### still shows substantial evidence of inexcusable neglect. We find that the action inDistrictCourt 

### isbarred by the two-year statuteof limitationsof section 27-2-207(1), MCA. We reaffirm the DistrictCourt dismissal.

### We concur: 

# "sng$4ia%&@, Chlef Justice

Justices

Mr. Justice Daniel J. Shea concurring:

I 

### concur with the decision here affirming the trial court's dismissal order. This is a case where the appellant, from beginning to end, slept on his rights.Mr. 

### Justice John C. 

### Sheehy and Mr. 

### Justice Gene B. 

### Daly dissenting:
We iteratewithout dilutionwhat 

### we said inour dissent tothe original opinion inthis cause (Dissent, Cause No. 79-32, 37 St.Rep. 627). 

### In 

### its opinion on thepetition for rehearing foregoing, themajority has circled the issues raised by our dissent and thepetition forrehearing, in so circling, the majority has stirred up 

### as much dust as 

### it did inthe original opinion, tothe extent that the issues inthis case 

### are further obscured. Originally, thiswas a 

### relatively simple case: Rierson,
a retired highway patrolman, had petitioned the District Court forreview of an adverse decision against him by an administrative agency. He

### had filedhispetition for review within 30 

### days, but instead of serving 

### a copy of thatpetition upon the administrative agency, he waited 16 months when he amended his petition and served a summons issued upon thatpetition. The only real issue inthis case 

### iswhether the provision of section 2-4-702(2) 

### (a),MCA, 

### that a 

### copy of the petition for review "shallbe promptly served upon the agency", serves to prevent the District Court from considering agency excesses of statutoryauthority indeciding questions of constitutional law and a tort claim against itself. We

### had suggested some proper
answers inour original dissent; unfortunately our powers of discussion seemed insufficient. It 

### had been a happier circumstance forus if themajority had simply decided that sixteenmonths tomake service failed toconstitute "prompt" service, thatprompt servicewas jurisdictional, and that therefore, Rierson was out of court. Instead, themajority careened off on a side tripover the statuteof limitations, and 

### wemay be some 

### timegetting this Court back on the road again on this subject. -9-

### The majority buys itself a peck of 

### troublewhen it 

### declares in dictum (we hope itwill be considered dictum) that the statute of limitations continues to run on separable causes intermingledwith the limited cause adjudicable by the administrative agency. That dictum is wrong because limitations should be tolled when the claimant is not neglecting to proceed in
some forum on a phase of his claim, and when the other party has full notice while the claimant so proceeds of his additional but intermingled claims. Otherwise, as in this case, an administrative agency can act in excess of its authority, a ground provided in section 2-4-704, MCA, forwhich an administrative decision can be set aside, and never be called to account in a court of law because the statute of limitations may have run on the cause which the agency incorrectly assumed jurisdiction to decide. Themajority opinion does not deal with our contentions respecting the judicial review statute for administrative cases, section 2-4-702, MCA, and particularly, it has not looked at that statutewith respect to the statute of limitations on "independent"
or intermingled causes. Again, the firstparagraph of that sectionprovides: "Aperson who 

### -- has exhausted all administrative remedies availablewithin the agency and who is aggrieved by a final decision in a contested case is entitled to judicial review under this chapter. This section 

### -- does not limit utilization of or the scope of judicial review available under ----- 

### othermeans of review, redress, relief, or trial de -- 

### novo provmed Q 

### statute." Section 22-702(1) (a),MCA. (Emphasisadded.) That quoted statute contemplates, in our view, full judicial review not only of causeswith which the administrative agency has authority to act upon, but also cases where it violates its constitutional or statutoryprovisions. Indeed, that is provided, aswe have noted, in section 2-4-704(2)(a), MCA. -10-

### Our second objection to the majority opinion on rehearing in deciding this case on the statute of limitations is that apparently the court had decided incorrectlywhich statute applies. This case does not concern an "injury to personal property." This was not Rierson's automobile that was damaged; thiswas, at the least, a liability created by statute governed by section 27-2-211(1)(c),MCA (two-year limitation). We would hold that the pension dispute grows out of the relationship of master and servant which is contractual in nature (53

### Am.Jur. 2d 92Master 

### - and Servant 

### B 14), and that either the five-year or eight-year period applies under section 27-2-202,MCA. Rierson's tort action however has a two-year limitation, section 27-2-207,MCA, which again points up the necessity for tolling the statute while he is pursuing his administrative remedy. Certainly the agency should not be allowed to determine
a tort action brought against itself. We would reverse and remand to the District Court for furtherproceedings. Whether he would be successful there,
we do not know,but at least the courts of justice would be open to him, 1972 Mont. Const., Art. 11, 

### 5 16, and he would not be deprived of dueprocess.

/," 

### Justices 

# 1