No. 13038 INTHE SUPREME COURT OF THE STATE OF MONTANA

CARMIE R. DUFFY and D. COSETTE DUFFY, Plaintiffs and Appellants,

BUTTE TFACHERS 

## ' UNION, NUMBER 

### 332, AFL-CIO ; MIKE McCARTHY; EDWARD HEARD; MONTANA PHYSICIANS' SERVICE, a corporation; GIL HOXMER; SCHOOL DISTRICT NUMBER ONE OF SILVER BOW COUNTY, MONTANA, a political subdivision of the Stateof Montana and body public and corporate; BOARD OF TRUSTEES OF SCHOOL DISTRICT NUMBER ONE OF SILVER BOW COUNTY, MONTANA; Defendants and Respondents.

Appeal from: District Court of the Second JudicialDistrict, Honorable W. W. Lessley, Judge presiding. Counsel of Record: For Appellants: Poore, McKenzie, Roth, Robischon and Robinson,

AllenR. McKenzie argued, Butte, Montana For Respondents: Henningsen, Purcell & Genzberger, Butte, Montana Robert McCarthy argued, Butte, Montana Hughes, Bennett & Cain, Helena, Montana Alan F. Cafn argued, Helena, Montana John G. Winston, County Attorney, Butte, Montana John 

### J. Parker, Deputy County Attorney, argued,

Butte, Montana

Submitted: September 22, 1975 Decided: 

## GrT31I<jj!j Filed: 

## 6CF3

## 11975

ClerkMr. Justice Gene B. Daly delivered the Opinion of the Court.

This 

### is an appeal from a judgment that granted all defendants' motions todismiss for failure to statea claimupon which relief could be granted, without leave torefile. Plaintiffs filed their original complaint inthe district court, Lewis and Clark County, September 23, 1974, against all defendants except School District Number One of SilverBow County, Montana and 

### itsBoard of Trustees. The complaint charges defendants with conspiracy toviolate certain rights of plaintiffs. Consolidatedmotions asking for (a) a change of venue, (b) dismissal for failure to statea claimupon which relief can be granted, and (c) a more definite statement as to the conspiracy, together with accompanying briefs, were filedby defendants. The venue was changed tothe Second Judicial District, SilverBow County, whereupon plaintiffs disqualifiedboth districtjudges of the Second Judicial District. Judge W. W. Lessley, Thirteenth Judicial District, assumed jurisdiction. An amended complaint was filedby plaintiffs which added defendants School District Number One of SilverBow County and the Board of Trustees of School District Number One, SilverBow County. Defendants, in turn, amended theirbriefs in support of the motion to dismiss. Allmotions were heard by the court. On April 22, 1975, the district court entered an order and judgment which granted themotions to dismiss for failure to state

### a claimupon which relief can be granted, toalldefendants. This appeal is from that judgment. The amended complaint pleads the corporate capacity of Montana physicians' Service 

### (MPS); the position of the defendant Butte ~eachers' Union Number 332, AFL-CIO (Union), asrepresenting teachers employed by School District Number One of SilverBow County (School District); and the position of Edward Heard andMike McCarthy as officers of said Union. Defendant GilHoxmer 

### is an agent of Montana Physicians' Service. Plaintiffs arenot members of the Union. Pro formallegations areincluded with respect to School District Number One of SilverBow County and 

### itsBoard of Trustees. It alleges that for a number of years contracts existed between theUnion and MPS providing group medical, surgical and hospital benefits and that pursuant tothese contracts the School District made contributions toMPS at

### its Helena, Montana offices

on behalf of allteachers. That contributions were made on behalf of plaintiffs, who arenot members of saidUnion, toMPS and that benefits were provided toplaintiffs inaccordancewith the contract between the Union and MPS atrates identical tothose established forallteachers. Further that after September 1972, the Union directed MPS tomaintain separatechargehistories fornonunion teachers and union teachers. That prior to September 1973, thenonunion teachers "were advised" that they would be separated and segregated from theunion teachers forhealth insurance purposes and that they would have to secure their own insurance. Plaintiffs chose tojoin a group composed of school district administrators and othernonunion teachers. The health insurance rates for theunion group was $39.99 per month and for the administrator nonunion group was $47.65, for identical coverage. The School District contributed $35 per month toboth union and nonunion teachers. The net differencepayable by the teacherswas $12.65 fornonunion teachers and $4.99 forunion teachers.

II In the amended complaint a provision of the Master Agreement" entered intobetween the School District and theUnion for the period effective September 

### 1, 1973, 

### is set forth inhaec verba. This section of the agreement provides that on orbeforeApril 1, the Union shall arrange for a medical, surgical and hospital plan for the benefit of itsmembership and the School District willmake contribution of $35 per month per member teacher toward the cost of said plan and armgeforpayroll deductions. Plaintiffs allege that prior toJuly 1973 defendants Union, MPS and Hoxmer entered into a conspiracy to force plaintiffs tobecome members of theUnion by insistingon a contract between the Union and 

## - MPS providing fordiscriminatory and excessive rates tobe charaged plaintiffs and other nonunion teachers. The agreement between the Union and MPS 

### is alleged tobe unlawful by reason of 

### its violation of "Rule 36" of the Master Agreement for failureby the Union towrite specifications and receive sealedbids for the medical and surgical coverage for the Union members; instead the Union negotiated a contract of coverage for itsmembers that discriminated against plaintiffs and others similarly, situated. The amended complaint further alleges this is inviolation of sections 11-1024, 75-6118, 75-6120, 64-303 and 40-3509, R.C.M. 1947; the due process clause of the First and Fourteenth Amendments to the United States Constitution; and, Article 

### IT, Section 

### 7, 1972 Montana Constitution. It further alleges that plaintiffs are, in addition to not being members of theUnion, taxpayers of SilverBow County; that the agreement between the School District and the Union, which calls for a contribution on behalf of allteachers in the amount of 

### $35 per month, 

### is illegal inviolation of section 11-1024, and asks that these contributions be repaid to SilverBow County (not a party to this action) by the Union and MPS to the extent they exceed $120 per year per teacher. In the prayer, plaintiffs ask that only MPS be required torepay such amounts. The law on conspiracy isrelativelywell settled inMontana. In 15A C.J.S., Conspiracy, 

### $5 l(1) and 1(2), it 

### is said:11 

### 9 l(1). A civilconspiracy is a combination of two or more persons by concerted action to accomplish

an unlawful purpose, or toaccomplish some purpose not in itself unlawful by unlawful means. II 

### 5 l(2). "The essential elements required toestablish a civilconspiracy are the same as those required to establish a criminal conspiracy. In general, toconstitutea civilconspiracy there must be: (1) Two or more persons, and for this purpose a corporation 

### is a person; (2) an object tobe accomplished; 

### (3) a meeting of minds on the object or course of action; (4) one ormore unlawful overt acts; and (5) damages as the proximate result thereof. +r *I1 In 15A C.J.S., Conspiracy, 2, itis further noted that if the object of an alleged "conspiracy" islawful, and the means used to attain that object are lawful, there can be no civilaction for conspiracy. The foregoing 

### is true even though damage may result to the plaintiffs and even though defendants may have acted with a malicious motive. If such were not the rule, obviously many purely business dealings would give rise to an action in tort on behalf of one who may have been adversely affected. Prosser, Law of Torts, 4th Ed., p. 293, notes that it is not really the conspiracywhich gives rise to a right of action, but the tortswhich may be committed in furtherance thereof. Each of these actions would support a claim forrelief itself--- the only function served by the action of conspiracy being to connect nonacting but participating members who would not ~therw~se be liable tothe one damaged.

111

### <. ;'c f; The gist of the action isnot the conspiracy charged, but the tortworking damage 1 to the plaintiff. It is only where means are employed, or purposes are accomplished, which are themselves tortious, that the conspirators who have not acted but have promoted the actwillbe held liable.

## "

'rosustain their action here, then, plaintiffsmust allege a tort committed by one of the alleged conspirators. The decisions of this Court are in accord with the foregoing. In Mustang Beverage Co., Inc. v. Jos. ~chlitz rew wing Co., 162Mont. 

### 243, 251, 511 P.2d 1, the Court held:

# "'*

# ** a combination of individuals for their joint benefit does not constitute a conspiracy 

# *** the actionable element of conspiracy 

### is the

wrong done tothe plaintiffs, not the combination of persons constituting the conspiracy. 1 It In an earlycase this Court noted that freedom of contract 

### is the general rule and that persons may grant orwithEio,ld,their business or patronage from others without incurring liability therefor. In Empire Theatre Co. v. Cloke, 53Mont. 183, 193, 163P. 107, the Court holding a combination to do a lawful thingby lawful means isno conspiracy, said:

I IEvery person has the right, singly and incombination with others, to deal orrefuse todealwith whom he chooses; toreach his decision in that, as in

### allother

matters, upon orwithout good reason; toregard asunfriendly allthose who, with or without justification, refuse toco-operate or sympathize. II In Empire Theatre the Court approved the use of a boycott by members of a union against an employer. The general rule set out inC.J.S. was approved in Biering v. Ringling, 74 Mont. 176, 196, 240 P. 829, where the unlawful actwas found tobe a plan todefraud the plaintiff:

111A conspiracy 

### is a combination of two ormore persons by some concerted action toaccomplish 

### a criminal orunlawful purpose or toaccomplish a purpose, not in itself criminal orunlawful, by criminal orunlawful means. IIt See also: Mining Securities Co. v. Wall, 99 Mont. 596, 

### 45 P.2d 302; Lindsay & Co. v. Mont. Federation of Labor, 37 Mont. 264,

A motion to dismiss for failure to statea claimupon which relief can be granted, Rule 12(b)(6), M.R.Civ.P., 

### is equivalent to a demurrer under former civilprocedure. Payne 

### v. Mountain States

### Tel. & 

### Tel. Co., 142Mont. 406, 409, 385 

### P.2d 100. A motion todismiss admits toallfactswell pleaded and in considering the motion the material allegations of the pleading attacked are taken as true. Deich v. Deich, 136 Mont. 566, 585, 323 P.2d 35. Where a complaint states facts sufficient toconstitutea cause of action upon any theory, then the motion todismissmust be overruled. Nlgelo v. Koundup Coal Mining Co., 109 Nont. 

### 293, 300, 

### 96 P.2d 932. However, when a complaint alleges facts and,assuming the facts are true,there stillisno claim forrelief statedunder any theory, a motion to dismiss must be granted. Reducing the well pleaded facts totheir essence and discarding the legal conclusions, the amended complaint seeks relief because after September 1973, plaintiffs asnonunion teachers

were not permitted by the Union toremain as members of the group forwhich the Union contracted forhealth benefits for itsmembers from MPS. The School District or Board of Trustees arenot included in the alleged conspiracy. The illegal act inserted by plaintiffs tojustify a tort toresult in a conspiracy was failure of the Union, under 

### its contract with the Board of Trustees for the benefit of the Union members, to draw specifications and receive bids for their health coverage. A procedural variation from their

own contract would not be unlawful even ifconsidered a breach by

a party to the contract who would have standing to complain. Plaintiffs admit they are not Union members and have no standing in relation to a contract entered intoby the Union for the benefit of 

### itsmembers. The Union did preciselywhat it had contracted to do. There 

### is no legal reason why the Union was required to permit plaintiffs tobe members of 

### itsgroup. As to the role of MPS in the transaction alleged in the complaint, itwas merely a seller of services. MPS was not a party to the contract between the Union and the School District of which plaintiffs complain, itmerely sold certain benefits to the Union per its order and other benefits to other groups of School District employees. Since freedom of contract is the general rule there is

no reason why MPS cannot contract for the furnishing of services with whatever groups it chooses and chargewhatever rates it feels

arejustified to those groups with which it contracts. Great Northern U. Co. v. Public Ser. Com., 88 Mont. 180, 228, 229, 293 P. 294, reads in part:

### 2° he general right to make a contract inrelation to hisbusiness 

### ispart of the liberty of the individual protected by the 14thAmendment of the federal constitution' (Lechner v. New York, 198 U.S. 45, 49 L.Ed.937, 25 Sup.Ct.Rep.539), and that 'the right of the owner to fixa price atwhich his property shallbe sold orused is an inherent attribute of the property itself' (State Freight Tax Case, 15 Wall. 

### (U.S.) 232, 278, 21 L.Ed. 146, 163) Jc Jr dc." See also: Hein v. Fox, 126 Mont. 514, 254 P.2d 1076 (1953). Asnoted heretofore, when parties merely do what they have a legal right to do, and when the means used arenot unlawful--

an allegation in a complaint that the action amounts to a

~f~onspiracy" gives no right of action to anyone, even if the parties agreed among themselves to take such action. Plaintiffsnext use the violation of section 11-1024, 

### R.C.M. 1947, as an unlawful act to supply the tort for the conspiracy, That section directs departments, agencies, etc. of the state of Montana, and allcounties, citiesand towns to contract for group health insurancewhen requested to do soby two-thirds of their employees and tomake limited ($10.00) contributions to the cost of such coverage. Atthe time School District Number One contributed $35 to the cost of allteachers' group health insurance therewere two opinions of the attorney general of Montana holding that neither the grant of power toenter into and contribute to the cost of group hospital and medical insurance for the benefit of employees,

nor the limitation on the amount of such contribution contained in section 11-1024, were applicable to school districtsbut the school districtshad the authority and power to expend school funds for group insurance for teachers and employees as part of the salaries and compensation of the teachers and employees. 27 Opinions of the Attorney General No. 49; 30 Opinions of the Attorney General No. 6.While opinions of the attorney general are not binding upon this Court, the Board of Trustees of School District Number 3ne and the Union were entitled torely on and act in accordance with those opinions when they negotiated the 1973-1974 Master Agreement. On February 4, 1974, months after the Master Agreement was executed, the attorney general issued another opinion inwhich he held the previously mentioned two attorney general opinions "were no longer applicable" inview of this court's decision in Teamsters v. Cascade Co. Sch.Dist. No. 1, 162Mont. 277, 511P.2d 339. 35 Opinions of the Attorney General No. 69. The effect of that attorney general opinion was short lived. The Montana Legislature amended section 11-1024, effectiveMarch 12, 1974, Montana Session Laws 1974, Chap. 

### 188, by adding this sentence:

11

Provided, however, that for employees of elementary and high school districts premium contributions arenot subject to the ten dollar ($10) limitation of this section. " We hold the $35 contribution was not unlawful. If it were unlawful itwould not help to establish a conspiracy under the facts here as theparty that would have violated the sectionby agreeing to make, and did make to allparties, a payment not authorized by law was the School District. The violation of other statutes pleaded by plaintiffs have to do with teachers' rights, union practices, unfair practices and the like, which have littlerelevancy to the issuehere, lacking a conspiracy. The argument inbrief as it pertains to discrimination in regard toconditions of employment by failure tobelong to the Union,contrary to Benson v. School Dist. No. 1of SilverBow County, 136 Mont. 77, 

### 344 P.2d 177 (1959), iswithout merit here. Benson

was against the school district for contracting with the Union fora "security clause" in the master contract which required teachers tojoin or lose salary benefits. The judgment of the district court 

### is affirmed.

i' We Concur: /



## d' Justices.