NO. 94-362

IN THE SUPREME COURT OF THE STATE OF MONTANA

1995

MONTE BRIDGEWATER,

Plaintiff and Appellant,

v

STATE OF MONTANA, DEPARTMENT

OF INSTITUTIONS

Defendant and Respondent.

APPEAL FROM: District Court of the Third Judicial District,

In and for the County of Anaconda-Deer Lodge,

The Honorable Ted L. Mizner, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Leonard J. Haxby, Butte, Montana

For Respondent:

James M. Scheier, Department of Justice, Helena,

Montana

Filed:

Submitted on Briefs: February 16, 1994

Decided: August 25, 1995
Justice James C. Nelson delivered the Opinion of the Court.

Appellant, Monte Bridgewater, filed a complaint against the

State of Montana Department of Institutions and the Superintendent

of the Montana State Mental Hospital, Jane Edwards, on November 26,

1990, claiming defamation of character and against the State of

Montana Department of Institutions claiming constructive discharge

from employment. The Montana Third Judicial District Court,

Anaconda-Deer Lodge County, granted Jane Edwards' Rule 12(b) (6)

motion to dismiss, finding her immune from liability under § 2-9-

305, MCA. The District Court also granted the State's motion for

summary judgment on the constructive discharge claim and granted

the State's motion for summary judgment on all but one of the

defamation claims. The Appellant appeals the District Court's June

23, 1993 order granting partial summary judgment. We affirm.

ISSUES

We address the following issues on appeal:

I. Did the District Court err in granting summary judgment on

the constructive discharge claim?

II. Did the District Court err in granting summary judgment

on all but one of the defamation claims?

BACKGROUND

Appellant was an employee of the Montana State Mental Hospital

(Hospital). Accordingly, his employment with the Hospital was

covered by a collective bargaining agreement (CBA) between the

State of Montana and the Warm Springs Independent Union Local

#5070, MFSE, AFT, AFL-CIO, and the Montana State Hospital.

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Appellant suffered a job-related injury in 1985 while working at

the Hospital. As a result of the job injury, he took a number of

extended leaves of absence which resulted in his being absent from

work for a substantial period of time.

In 1989, the Hospital conducted an internal investigation

regarding allegations that Appellant provided prescription and nonprescription drugs to patients and violated hospital policy. The

Hospital suspended Appellant without pay while the Deer Lodge

County Attorney continued the investigation. The Deer Lodge County

Attorney ultimately advised the Department of Institutions that

there may have been criminal conduct but she did not find

sufficient evidence to prove a case beyond a reasonable doubt.

Jane Edwards suspended Appellant for two weeks, reassigned him to

another work area, and placed him on probation for a six-month

period. On May 11, 1989, Appellant filed a grievance concerning

his suspension but returned to work on July 31, 1989. On August

38, 1989, Appellant filed a second grievance concerning his

suspensions. On September 23, 1989, he took a leave of absence

because the suspensions had exacerbated his June, 1985 job injury.

The Hospital notified Appellant that when he returned to work, his

assignment to the Extended Treatment Unit would continue for six

months. On November 30, 1989, Kimberly Lloyd, the personnel

officer, notified Appellant that the Hospital had terminated his

employment because he had exhausted the la-month job preference

period related to the June, 1985 job injury. Appellant did not

file a grievance pursuant to the terms of the CBA, but did file a

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complaint in the Montana Third Judicial District Court claiming

constructive discharge from employment and defamation of character.

The court granted Jane Edwards' motion to dismiss the complaint

based on her immunity under § 2-g-305, MCA. The court also granted

the State's motion for summary judgment on the constructive

discharge and all defamation claims except for the statement made

by Ken Schmidt. Appellant appeals the District Court's order

granting partial summary judgment.

DISCUSSION

Under Rule 56(c), M.R.Civ.P., summary judgment is proper only

when no genuine issue of material fact exists and when the moving

party is entitled to judgment as a matter of law. The moving party

has the initial burden to establish that there are no genuine

issues of material fact. Once that burden has been met, the burden

then shifts to the party opposing the motion to establish

otherwise. Spain-Morrow Ranch, Inc. v. West (1994), 264 Mont. 441,

444, 872 P.2d 330, 331-32. In reviewing a grant of summary

judgment, we will utilize the same criteria as the district court;

our review is de nova. Minnie v. City of Roundup (19931, 257 Mont.

429, 431, 849 P.2d 212, 214.

I. Did the District Court err in granting summary judgment on

the constructive discharge claim?

Appellant contends that the District Court erred in granting

summary judgment on the constructive discharge claim because

genuine issues of material fact still existed. The state argues

that issues of fact did not exist and that § 39-2-912(2), MCA,

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excludes claims brought by employees covered by collective

bargaining agreements. Section 39-2-912 (2), MCA, exempts from the

Wrongful Discharge Act "an employee covered by a written collective

bargaining agreement or a written contract of employment for a

specific term." In fact, 5 39-31-101, MCA, establishes Montana's

policy of encouraging collective bargaining. See Small v. McRae

(1982), 200 Mont. 497, 651 P.2d 982. In Small, we adopted the

following language from the United States Supreme Court:

individual employees wishing to assert contract

grievances must attempt use of the contract grievance

procedure agreed upon by employer and union as the mode

of redress . . . . A contrary rule which would permit an

individual employee to completely sidestep available

grievance procedures in favor of a lawsuit has little to

commend it.

Small, 651 P.2d at 986 (quoting Republic Steel Corporation v.

Maddox (1965), 379 U.S. 650, 652-53, 85 S.Ct. 614, 616-17, 13

L.Ed.2d 580, 583). Therefore, we held that only when it is certain

that the CBA is not susceptible to an interpretation that it covers

the dispute, may an employee sidestep the provisions of the CBA.

Small, 651 P.2d at 986. Where the CBA is susceptible to such an

interpretation, we have held that the appellant must first pursue

remedies under the CBA. Brinkman v. State (19861, 224 Mont. 238,

243, 729 P.2d 1301, 1305. In Allmaras v. Yellowstone Basin

Properties (1991), 248 Mont. 477, 812 P.2d 770, we stated that

a general statutory remedy for wrongful discharge should

not apply to those classes of cases in which the

employees enjoy other specific contractual or statutory

remedies. . . . [Tlort remedies were developed

specifically to provide redress for employees who had no

legal protection against wrongful discharge.

Allmaras, 812 P.2d at 772.

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In this case, Appellant's termination for exhaustion of the

job preference period is a situation which is exclusively covered

by the CBA entered into by Appellant's union. The Appellant does

not dispute that his employment with the Hospital was subject to

this CBA. The CBA contains a grievance provision allowing an

employee to settle disputes with the employer. Moreover, Appellant

exhausted the leave of absence provision in the CBA, which states

in part:

(c) Such leave may be granted at the discretion of the

Superintendent for periods not exceeding twelve (12)

months. Leaves caused by accidents compensated by the

Industrial Accident Board shall not affect seniority

accrual, and the leave shall be extended for up to

eighteen (18) months.

Therefore, we conclude that Appellant must exhaust his contractual

remedies and follow the correct grievance procedure instead of

circumventing the CBA and filing a complaint in district court.

Additionally, the State argued and the District Court agreed

that the common-law doctrine of constructive discharge requires a

showing that the employer rendered working conditions so oppressive

that resignation was the only reasonable alternative. Niles v. Big

Sky Eyewear (1989), 236 Mont. 455, 461, 771 P.2d 114, 118 (citing

Snell v. Montana-Dakota Utilities Co. (1982), 198 Mont. 56, 643

P.2d 841). In this case, the Appellant did not resign, he was

terminated pursuant to the CBA. Therefore, he does not have a

common law claim for constructive discharge. We hold that the

District Court correctly found that on the issue of constructive

discharge, no genuine issues of material fact existed and the State

was entitled to summary judgment as a matter of law.

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II. Did the District Court err in granting summary judgment

on all but one of the defamation claims?

The Appellant argues that genuine issues of material fact

existed and therefore the District Court erred in granting summary

judgment on the defamation claims except for the statement made by

Ken Schmidt. The Appellant alleged several defamatory statements

made by the staff at the Hospital, including statements made to the

county attorney's office, to the press, and to the Appellant in the

presence of others. The statements specifically include a memo

written by Jeff Strum dated June 1, 1989; a letter written by Jane

Edwards dated July 27, 1989; questions asked by Jeff Strum and Jane

Edwards; statements made to the press by Curt Chisholm, and a

statement made by Ken Schmidt to Appellant in the presence of

others.

Defamation includes libel, the written word, and slander, the

spoken word. See § 27-l-801, MCA. Section 27-1-802, MCA, defines

libel as:

a false and unprivileged publication by writing . .

which exposes any person to hatred, contempt, ridicule,

or obloquy or which causes him to be shunned or avoided

or which has a tendency to injure him in his occupation.

In turn, § 27-l-804, MCA, sets forth those publications that are

privileged: "A privileged publication is one made: (1) in the

proper discharge of an official duty . .I' By definition, a

privileged communication is not defamatory, and therefore not

actionable. Small, 651 P.2d at 991; Nye v. Department of Livestock

(1982), 196 Mont. 222, 227, 639 P.2d 498, 501. See also, Starch v.

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Board of Dir. East. Mont. Reg. Five M.H.C. (1976), 169 Mont. 176,

181, 545 P.Zd 644, 647-48. ("[Section 27-l-804(1), MCA] constitutes

an absolute privilege with the only requirement being that the

intradepartment communication be one rendered while engaged in an

'official duty'. There can be no doubt that the hiring and firing

of employees is part of the 'official duty' . . .'I)

The District Court correctly found that the memo, letters,

questions, and statements of Jane Edwards and Jeff Strum were made

in the performance of official duty and thus were absolutely

privileged under 5 27-l-804, MCA. The statement by Curt Chisolm

made to the press as part of an ongoing investigation was within

his official capacity and was also absolutely privileged.

Consequently, we conclude that there were no genuine issues of

material fact, and the State was entitled to summary judgment as a

matter of law. We affirm the District Court's grant of partial

summary judgment.

Because the State did not file a cross appeal, we let stand

the District Court's decision to deny summary judgment on the issue

of Ken Schmidt's alleged defamatory statement.

Pursuant to Section I, Paragraph 3(c), Montana Supreme Court

1988 Internal Operating Rules, this decision shall not be cited as

precedent and shall be published by its filing as a public document

with the Clerk of this Court and by a report of its result to the

west ruoJ.isning company.

AFFIRMED.

We Concur:

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We Concur:
Justice Terry N. Trieweiler specially concurring in part and

dissenting in part.

I concur with that part of the majority opinion which affirms

the District Court's dismissal of the plaintiff's claim for

wrongful discharge. However, I do not do so for the reasons stated

in the majority opinion.

I do not agree that plaintiff has not set forth facts which,

if true, would constitute constructive discharge. Nor do I agree

that he failed to file a grievance regarding the conditions which

led to his leave of absence. Finally, I do not agree that the

grievance procedure was his exclusive remedy pursuant to the

collective bargaining agreement which covered his employment.

However, I do conclude, in spite of the above, that

plaintiff's claim for wrongful discharge is precluded by the plain

terms of Montana's Wrongful Discharge from Employment Act. Section

39-2-912, MCA, of Montana's Wrongful Discharge from Employment Act

states in part that:

This part does not apply to a discharge:

izi 'oi an employee covered by a written collective

bargaining agreement or a written contract of employment

for a specific term.

Because plaintiff's employment was covered by a written

collective bargaining agreement under the plain terms of Montana's

wrongful discharge law, he cannot sue for wrongful discharge.

Therefore, I concur with that part of the majority opinion which

affirms the District Court's dismissal of his claim for wrongful

discharge.

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I dissent from that part of the majority opinion which affirms

the District Court's dismissal of the plaintiff's claim for damages

based on defamation.

In doing so, I am aware of our prior conclusion that the

privilege provided for in § 27-l-804(1), MCA, is an absolute

privilege. Starch v. BoardofDirectors(1976), 169 Mont. 176, 181, 545

P.2d 644, 647-48. However, I disagree with that conclusion. As a

general rule, communications made by public officials during the

discharge of their official duties are, at best, a qualified

privilege. The rule is summarized in the following text:

A s a general rule, communications made by a

subordinate public officer in the discharge of his

official duties are qualifiedly privileged, unless, as

considered supra §§ 69-76, they come within the

protection of absolute privilege. [Those sections are

inapplicable to the facts of this case.] The rule is

applicable where the statement is made with a proper

motive in a proper manner, and where it is based upon

reasonable cause, and where there is no showing of

falsity or knowledge that the statement was untrue, or of

malice.

However, the remarks are not privileged under this

rule unless made in connection with the exercise of

official duties and within the scope of the authority

granted, or where they constitute unfounded and baseless

suspicions which have arisen without proper

investigation.

The qualified privilege attaching to statements made

in connection with official duties may be lost if they

were made with express or actual malice, that is, with

knowledge of falsity or with reckless disregard of

truthfulness, or if the information is published to those

who do not have a sufficient corresponding interest in

the subject matter.

53 C.J.S. LibelandSlander§ 82 (1987) (footnotes omitted).

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In this case, based on the record, there were factual issues

regarding the applicability of the privilege invoked by the

defendants. It remained for a jury to decide whether the

communications complained of were made with a proper motive, based

on reasonable cause and without malice.

For these reasons, I dissent from that part of the majority

opinion which dismissed plaintiff's claim for damages based on his

allegation of defamation. I would reverse the District Court's

order granting summary judgment, dismissing that claim.

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