### NO. 96-03a INTHESUPREME

COURTOFTHESTATEOFMONTANA 1996

MARTIN"DOC"BASTA,

Plaintiff
vs. andAppellant,

CRAGO,INC., d/b/a PRINTING CENTER,aMontana corporation,

Defendant andRespondent.

APPEALFROM: District Court of the Eighth Judicial District,

In andfor the County of Cascade, TheHonorable MargeJohnson, Judgepresiding.

COUNSELOFRECORD:

ForAppellant: John F. Lynch, Lynch & Chisholm, Great Falls, Montana For Respondent: Lon T. Holden, Jardine, Stephenson, Blewett & Weaver, Great Falls, Montana

Submitted onBriefs: July 18, 1996

Decided: December 31, 1996 Filed:

Cl&kJustice James C. Nelson delivered the Opinion of the Court.

This is an appeal from the Eighth Judicial District Court, Cascade County. Following ahearing, the District Court granted Defendant Crago's motion for summary judgment. From this judgment, Plaintiff Basta appeals. Weaffirm. The sole issue raised onappeal is whether the District Court erred when it concluded that Basta and Crago did not enter into a written contract of employment for aspecific term for the purposes of §39-2-912(2), MCA(1991).

FACTUAL ANDPROCEDURALBACKGROUND Defendant Crago, Inc. (Crago) operates alocally-ownedgeneral printing business known as the Printing Center located in Great Falls, Montana. Craig Barber (Barber) is the president, chief executive officer and the only shareholder of the business. Therefore, Barber is Crago's agent. Plaintiff Martin "Dot" Basta (Basta) worked at adifferent local printing shop in Great Falls from 1971 until Barber hired him to work as shop foreman at the Printing Center in March 1992. In December 1991, Barber contacted Basta about hiring him to work for the Printing Center. Over the next two months, Barber sent Basta two letters andamemorandum concerning their employment negotiations. Thememorandum, dated January 23, 1992, referred to "Terms of employment" andwassigned byBarber. Thememorandum set forth several items including medical insurance coverage, vacation time, asalary and bonus figure for the first year of employment,
a salary and undetermined bonus system for the second year of 2employment, and a description of the employment position and

responsibilities. Barber sent the memorandum to Basta with a letter explaining that the memorandum'was a "written copy of what

wehad talked about previously" and requesting that Basta contact Barber sothat they could discuss Basta's starting date. OnMarch 1, 1992, Basta began working at the Printing Center. Barber had hired Basta to perform the shop foreman duties that Barber had performed previously. Barber planned for Basta to take
over Barber's old duties so that Barber could attend to matters concerning expansion of the business. However, Barber's plans were not realized and the economic conditions of the business declined. In response to this economic decline, Barber determined that the payroll must be reduced. Consequently, he discharged Basta on February 26, 1993, and one other employee. OnFebruary 23, 1994, Basta filed his complaint, alleging that he had been wrongfully discharged without good cause pursuant to § 39-2-904(2), MCA(1991). Crago answered anddenied the allegations of Basta's complaint. Crago then moved for summary judgment, alleging that Basta's discharge wasfor good cause. Tosupport the motion, Crago submitted an affidavit indicating that Basta was terminated from employment due to financial stresses within the corporation, a legitimate business reason. The District Court initially denied Crago's summary judgment motion. However, Crago filed a motion for reconsideration. Initially, Basta opposed Crago's motion for reconsideration. However, Basta ultimately conceded that Crago's motion should begranted and requested leave

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### to file anamendedcomplaint. OnSeptember 6, 1995, the District

Court granted both Crago's motion for reconsideration andBasta's motion for leave to file anamendedcomplaint. Basta's amendedcomplaint set forth twoclaims: 1)breach of contract and2) breach of the implied covenant of goodfaith and fair dealing. Crag0 answered and denied the allegations. Thereafter, Crago filed aMotion for 'SummaryJudgment Concerning the Amended Complaint. Crago alleged that the parties never entered into a written contract for a specific term, and, therefore, Basta's claims were barred by Montana's Wrongful Discharge From Employment Act, §39-2-901, et seq., MCA(1991). After reviewing the briefs andconsidering the testimony of Basta and the arguments of counsel at the hearing onthe motion, the District Court granted Crago's motion for summary judgment on December 12, 1995. It is from this judgment that Basta appeals. STANDARD

OFREVIEW Our standard of review for anappeal from anorder granting summary judgment is de nova. 

### Motarie v. Northern Montana Joint Refuse Disposal Dist. (1995), 274Mont. 239, 242, 907 P.2d 154, 156. Wereview the order granting summaryjudgment using the same evaluation asdid the district court, basedonRule 56, M.R.Civ.P. Motarie, 907P.2d at 156. Ourinquiry is set out asfollows:

Themovant must demonstrate that nogenuine issues of material fact exist. Oncethis hasbeenaccomplished, the burden then shifts tothe non-moving party to prove, bymorethan meredenial andspeculation, that agenuine issue doesexist. Having determined that genuine issues of fact do not exist, the court must then determine whether the moving party is entitled to judgment as a
4matter of law. Wereview the legal determinations made

by adistrict court as to whether the court erred. Bruner v. Yellowstone County (19951, 272 Mont. 261, 264-65, 900 P.2d 901, 903 (citations omitted). In the case before us, Basta has not raised an issue concerning any genuine issues of material fact. Instead, Basta only raises the legal issue whether Basta and Crago entered into a written contract of employment for aspecific term. Accordingly,
wereview the District Court's conclusion that Montana's Wrongful Discharge From Employment Act (the Act) bars Basta's breach of contract and breach of covenant claims under § 39-2-913, MCA (1991), because the parties did not enter into awritten contract of employment for aspecific term asrequired by §39-2-912(2), MCA (1991) I to determine if the court was legally correct. DISCUSSION Did the District Court err when it concluded that Basta and Crago did not enter into awritten contract of employment for a specific term for the purposes of §39-2-912(2), MCA (1991)? Basta contends that he and Barber entered into a written contract of employment for aspecific term, and, therefore, the Act does not bar his claims for breach of contract and breach of implied covenant of good faith and fair dealing. Crago responds that Barber and Basta did not enter into awritten contract of employment for aspecific term, and, therefore, the Act does bar Basta's claims. Weconclude that the District Court correctly determined that the parties did not enter into awritten contract

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### of employment for aspecific term, and that the court properly

granted Crago's motion for summaryjudgment. TheAct provides that "noclaim for discharge mayarise from tort or express or implied contract." Section 39-2-913, MCA (1991). Wehave determined that the plain meaning of "claim for discharge" is simply "those claims for damages caused by an asserted wrongful discharge." Beasley v. Semitool, Inc. (1993), 258Mont. 258, 261, 853P.2d 84, 86. Therefore, not all tort or contract claims are barred by § 39-2-913, MCA(19911, merely because they arise from employment. Beaslev, 853 P.2d at 86. Rather, only those tort or contract claims which are "for discharge" will bebarred by539-2-913, MCA(1991). Beaslev, 853 P.2d at 86. In the present case, Basta bases both his breach of contract and breach of covenant claims on his discharge. First, Basta alleges that Cragoviolated the contract with Basta "byvirtue of terminating [Basta] on February 26, 1993.

. . .'I Second, Basta alleges that Crago violated its obligation to act in good faith with Basta "in that termination wasfalse anddishonest in fact." Byvirtue of this language contained in Basta's amendedcomplaint,
we conclude that both claims are "completely and inextricably intertwined with andbased upon" Basta's discharge. SeeBeasley, 853 P.2d at 87. Consequently, Basta's claims are "claims for discharge" andwill bebarred under s39-2-913, MCA(1991), unless
oneof the exemptions to the Act applies. Theexemptions to the Act are set forth asfollows:
639-2-912. Exemptions. This part does not apply to a

discharge: (1) that is subject to any other state or federal statute that provides a procedure or remedy for contesting the dispute. Such statutes include those that prohibit discharge for filing complaints, charges, or claims with administrative bodies or that prohibit unlawful discrimination based on race, national origin, sex, age, handicap, creed, religion, political belief, color, marital status, and other similar grounds.

(2) of an employee covered by awritten collective bargaining agreement or awritten contract of emolovment for aspecific term. [Emphasis added.1 The issue raised on appeal is whether the parties entered into a written contract of employment for aspecific term. If they did, Basta's claims are exempted from the Act pursuant to 539-2-912(2), MCA (1991), and will not be barred under §39-2-913, MCA (1991). If not, Basta's “claims for discharge" are preempted by the Act pursuant to 539-2-913, MCA (1991), andwill be barred In order for the exemption under §39-2-912(2), MCA(1991), at issue here, to apply, there must be (a) awritten contract and (b) this contract must be for a specified term. Under the plain language of the statute, if either the contract is not in writing

or it is not for a specified term, then the exemption does not apply, and Basta's claims will bebarred. Without sodeciding, we will simply assume for purposes of this appeal that Crago's memorandum to Basta was a written contract and that Basta's employment was therefore governed by awritten contract. Wemake this assumption because our determination that, regardless, the contract was not for aspecified term, is dispositive. At best, the memorandum simply states Basta's proposed salary for the first two years of his employment. In fact, nothing in thememorandum sets out aspecific term, whether for two years or more.

The memorandum not only fails to specify atermination date; it does not even designate ahiring date. Indeed, at the time Basta received the memorandum, the parties were still negotiating Basta's starting date. This is evidenced by the letter Barber sent with the memorandum wherein Barber asked Basta to call him to discuss Basta's starting date. Moreover, Basta's testimony at the summary judgment hearing held onNovember 6, 1995, shows that hewasunclear as to what the parties had actually agreed would bethe "specific term" of Basta's employment: Q:

A:

Q:

A: Q:

A: [Mr. Lynch, Basta's attorney] Now, does that agreement [referring to the memorandum]--it--what are the terms of that agreement? Without reading it, I mean, you know, how long was your employment with him to be? [Bastal Whenwefirst talked about this and came out with this, he said I would bewith him for at least five years.

. . .And hetold it in front of me and mywife, hell, I would be there for five years. Hehad no plans of megoing anywhere, that hewas going to keep meemployed. So, then hecame up with this "I'll start you at this, and after a year I'll start you at this figure, and if my business progresses, you'll progress."

. . . And let me ask you this. That agreement doesn't say anything--how many years does that agreement cover? Twoyears. Okay. Wasthere--when you got that agreement, was there any discussion about the five years? Yes, there was. Like I say, hesaid it's good for five years. Or longer. He just said, "I'm not going to let you go." I just took the manfor his 8Q:

A: Q: A:

Q:

A: Q: A:
Q:

A: word. I didn't think I'd have to get awritten contract or anything else. Hesays, "I'm going to do this for you the first year and second year. And you're going to be with me." I trusted him. And I thought, you know, this is agood way for me to go. It's what I like to do is to get shops going. SoIdidn't say, "Well, okay, you've got to write up a five-year agreement or a two-year agreement" or anything. What hewrote down here I took to be agood agreement, that hewould face up to it as aman. But what did you understand that agreement to be, as far as how long? That written agreement? Twoyears. And why is that? Because that's all hedid. Hetold meif--because it has down the first year I'll get somuch and the second year 1'11 get somuch. And hesigned it. I didn't know I'd have to have it notarized or anything else. Orthat I'd have to sign it. Did he say in the cover letter or that agreement that if there was any disagreement with it onyour part, that you would work it out? Yes. That's what it says. And did you disagree with it? No, I did not. I accepted what hehadwritten down here and gave to me. Anddid you feel that that wasyour agreement, what was written down? Yes, I did. After reviewing Basta's testimony, it is apparent that while Basta regarded the memorandum as covering the first two years of his employment, heanticipated that his employment with Crago would last for "at least five years." However, nothing in the evidence supports the conclusion that the parties agreed to either atwoyear or afive-year employment term. Rather, the evidence supports 9

### the conclusion that the parties failed to agree to any specific

term of employment at all; there wassimply nomeeting ofthe minds
onthe term of Basta's employment--whether it wastwoyears, five years or longer. Therefore, basedonthe uncertain nature of both Basta's testimony andthe memorandum,weconclude that the parties did not enter into acontract of employment "for aspecific term." Basta also alleges that Cragoviolated the implied covenant of goodfaith andfair dealing andBasta seeks damagesfor emotional distress. Aswestated above, Basta's claims arenot exempted from the Act under 539-Z-912(2), MCA(1991), because the parties did not enter into awritten contract of employment for aspecific term. Therefore, §39-2-913, MCA(lPPl), controls andBasta's tort claim for breach of implied covenant of good faith is barred. Furthermore, under theAct, Basta cannot seekdamagesfor emotional distress. Section 39-2-905(3), MCA(1991). Seealso Dagelv. City of Great Falls (1991), 250Mont. 224, 238, 819P.2d 186, 194. In sum,weconclude that Basta andCrago did not enter into a written contract of employment "for aspecific term." Therefore, Basta's contract andcovenant claims are not exempted from the Act pursuant to 539-2-912(2), MCA(1991). Accordingly, weaffirm the District Court's conclusion that Basta's breach of contract and breach of implied covenant of good faith and fair dealing are barred bythe Act pursuant to §39-2-913, MCA(1991). Affirmed.We Concur:



### Justices

11Justice Terry N. Trieweiler dissenting.

I conclude that the parties did enter into awritten contract of employment for a specific term within the meaning of §39-Z-912(2), MCA(1991), andtherefore, dissent from the majority opinion. Martin "Dot" Basta worked for Advanced Litho Printing Shop in Great Falls for twenty-one years until hewas induced to leave that employment with a written promise from Craig Barber, owner and operator of the Printing Center, that hewould be employed onmore favorable terms at that business for at least two years. However, less than oneyear after hebegan work for Barber, hewastold that the Printing Center could not afford him and his employment was terminated. Section 3%2-912(2), MCA (1991), provides that the Wrongful Discharge from Employment Act found at §§39-2-901 to -915, MCA, does not preclude a person covered by a written contract of employment for a specific term from enforcing the terms of the employment contract. Section 28-Z-102, MCA, sets forth the necessary elements of a contract. It provides as follows:

It is essential to the existence of acontract that there be: (1) identifiable parties capable of contracting;

(2) their consent; (3) alawful object; and (4) asufficient cause or consideration. The document which wassubmitted to Basta after being prepared and signed by Craig Barber, and which is relied on by Basta as a 12"written contract of employment for aspecific term" provided as

follows : January 23, 1992 TO: Dot Basta FROM: Craig Barber RE: Terms of employment INSURANCE The Printing Center will pay medical insurance for you and your wife. VACATION & DAYSOFF 1STYEAR 3weeks paid vacation plus 5days off as needed $35,000 ayear salary plus abonus, not to exceed $1000 if predetermined goals are met. 2NDYEAR $36,000 ayear salary with a bonus system. (to bedetermined) POSITION & Position: Working Foreman RESPONSIBILITIES Camera Shooting Stripping Training Route &schedule jobs Quality control Employee supervision and training Involvement in customer relations as needed Assisting with the transition from conventional camera work to computer Other duties as need arises
I hope that you find this agreeable and as we had discussed. Sincerely, /s/ Craig Barber Craig Barber 13Thedocument obviously included identification of the parties,

the consent of Craig Barber, a lawful object, and sufficient consideration. There is no question presented regarding the capacity of either party to contract; Barber simply contends, and the District Court agreed, that because Basta had not signed the agreement, his consent had not been provided, and therefore, the agreement was incomplete. The District Court gave the following rationale for its decision:

The Court found quite credible the Plaintiff's testimony, that he left agood job in reliance upon the Defendant's offer of employment for aterm of at least two years, but that offer had to be finalized into a "written contract of employment for aspecific term," if it is to take the Plaintiff's case outside the parameters of the Wrongful Discharge Act. Testimony presented by the Plaintiff established that the Plaintiff accepted the Defendant's offer by leaving his prior employment and beginning work with the Defendant, but his acceptance was not in writing as presented to the Court, but an acceptance based onperformance. Unless both the offer and acceptance is finalized in the form of written contract, it does not appear to be exempted from the requirements of the Wrongful Discharge Act. Section 39-2-912, MCA(1991). I disagree. WhenBasta actually went to work for Barber and fully performed, according to the terms of the contract, from March 1, 1992, until he was terminated on February 26, 1993, he accepted the terms proposed by Barber by performing his responsibilities set forth in the contract. Section 28-2-503, MCA, provides for acceptance in the following manner: (1) Performance of the conditions of aproposal or the acceptance of the consideration offered with aproposal is an acceptance of the proposal. (2) A voluntary acceptance of the benefit of a transaction is equivalent to a consent to all the

14obligations arising from it, so far as the facts are known or ought to be known to the person accepting. Based on Basta's acceptance by performance of the contract terms proposed by Barber, I conclude that there was a completed contract of employment for aspecific term and that all essential

terms of the contract were in writing. Iwould conclude that, when the employer has set forth the conditions of employment in a written document which includes the term of employment and is signed bythe employer, the requirements of 539-Z-912, MCA(1991), have been satisfied. The purpose, after all, of that section's requirement that there be awritten contract is to protect the employer by limiting his employee's remedies to the provisions of the Wrongful Discharge From Employment Act, unless it can be documented that the employer offered him or her something greater than the Act's protections. Here, there is noquestion about the terms of employment which were offered by the employer. Therefore, the requirements of §39-2-912(Z), MCA(19911, have been satisfied. However, based onBasta's testimony to the effect that hefelt Barber had committed to aterm greater than two years during their conversations, the majority concludes that the contract in question does not provide for aspecific term. Idisagree again. The written contract, which is set forth in this opinion, provides for afirst year and asecond year. It provides for the salary to bepaid during each year, andabonus to bedetermined at

15a later date. Based on the plain language in the contract, it

provided for aminimum term of two years employment. At most, the term of employment in defendant's proposed written contract is unartfully drawn and leaves somequestion about whether the term was to extend beyond two years. However, as we have repeatedly held, the author of awritten agreement should not be able to avoid liability for performance of that agreement based

on ambiguities which are his or her own creation. Those ambiguities are to be construed in favor of the party who did not draft the agreement. See,e.g.,Topco,Inc.V.state (1996) , 275 Mont. 352, 360, 912 P.2d 805, 810; Mueskev.Piper,Ja&zy&Hopwood,Inc. (1993), 260 Mont. 207, 216, 859 P.2d 444, 449-50; St.PaulFire&MarineIns.Co.v. Cumiskey(1983), 204 Mont. 350, 363, 665 P.2d 223, 229. For these reasons, I would reverse the order of the District Court and remand to that court for further evidence regarding any defenses Barber might have to Basta's contract claim.

Justices William E. Hunt, Sr., foregoing dissenting opinion. andW.William Leaphart join in the

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