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No. 97-309

IN THE SUPREME COURT OF THE STATE OF MONTANA

1998 MT 313N

JOSEPHINE BATOON,

Plaintiff, Respondent, and Cross-Appellant,

v.

CITY OF CONRAD,

Defendant, Appellant, and Cross-Respondent.

APPEAL FROM: District Court of the Ninth Judicial District,

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In and for the County of Pondera,

The Honorable Marc G. Buyske, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Gale R. Gustafson, Gustafson & Rohrer; Conrad, Montana

For Respondent:

Antonia P. Marra, Bell and Marra; Great Falls, Montana

E. June Lord, Attorney at Law; Great Falls, Montana

Submitted on Briefs: July 29, 1998

Decided: December 17, 1998

Filed:

__________________________________________

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Clerk

Justice Jim Regnier delivered the opinion of the Court.

¶1. Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1996 Internal 

Operating Rules, the following decision shall not be cited as precedent but shall be 

filed as a public document with the Clerk of the Supreme Court and shall be 

reported by case title, Supreme Court cause number, and result to the State Reporter 

Publishing Company and to West Group in the quarterly table of noncitable cases 

issued by this Court.

¶2. Josephine Batoon brought this action on October 12, 1989, in the Ninth Judicial 

District Court, Pondera County, against the City of Conrad to recover damages for 

wrongful discharge, defamation, discrimination, and violation of her civil rights by 

reason of the City's termination of her employment on October 14, 1988. The District 

Court dismissed Batoon's claim for defamation upon stipulation of the parties on 

July 25, 1989. On July 13, 1993, the City filed a motion for summary judgment which 

the District Court denied on September 27, 1993. The District Court bifurcated 

Batoon's remaining claims, and concluded with regard to liability that Batoon had 

not abandoned her job by reason of her absence from work and that the City had 

wrongfully discharged her. The District Court further concluded that Batoon's 

discrimination claim and her claim that the City violated her civil rights was 

unsupported by the evidence. On September 16, 1996, the District Court denied the 

City's request to certify its order regarding the liability issue as a final judgment to 

facilitate an appeal. On March 3, 1997, the District Court awarded Batoon costs and 

damages for being wrongfully discharged by the City. On March 6, 1997, the City 

filed a motion for amendment of judgment, which the District Court denied on 

March 7, 1997. On April 4, 1997, the City filed its notice of appeal, and on April 17, 

1997, Batoon field her notice of cross-appeal on the issues of race and age 

discrimination and the violation of her civil rights. We affirm the judgment of the 

District Court.

¶3. The issues presented by the City of Conrad on direct appeal are as follows:

¶4. 1. Did the District Court err when it found that Batoon did not abandon her job 

with the City of Conrad when she failed to report to work for five consecutive days?

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¶5. 2. Did the District Court err when it found that the City of Conrad violated its 

personnel policy?

¶6. 3. Did the District Court correctly determine that Batoon should be entitled to 

lost earnings?

¶7. 4. Did the District Court err when it failed to conclude that the judgment against 

the City should not accrue any interest if affirmed by this Court and paid within two 

years?

¶8. 5. Did the District Court err by not dividing the costs of production of the District 

Court transcript on appeal?

¶9. The issues raised by Batoon on cross-appeal are as follows:

¶10. 1. Did the District Court err when it concluded that Batoon had no property 

interest in her continuing employment with the City of Conrad?

¶11. 2. Did the District Court err when it concluded that the City of Conrad had not 

discriminated against Batoon based upon her age and race? 

FACTUAL BACKGROUND

¶12. The City of Conrad hired Josephine Batoon, a Filipino woman, on September 6, 

1976, as a general office clerk. On July 27, 1988, Batoon requested and obtained from 

the City an extended leave of absence from August 8, 1988, to September 30, 1988. 

Batoon planned to use that time to visit her relatives in the Philippines and to 

complete some personal business. The City granted Batoon's request and both 

parties expected her to return to work on Monday, October 3, 1988.

¶13. Batoon failed to return to work on October 3, 1988, as planned and missed five 

consecutive days of work from October 3, through October 7, 1988. Batoon had no 

prior excuse or permission from the City to miss the five extra days.

¶14. In 1986, Batoon signed a form acknowledging that she had read and understood 

the personnel policies and procedures adopted by the City, and at all times had 

access to the City personnel policies and procedures manual. Section four of the 

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manual, entitled "Employee Discipline and Discharge" provides in pertinent part as 

follows:

4.5.2. Group II Violations

Repeated absences without reasonable excuse (over four inexcusable tardies, and/or two 

inexcusable absences per calendar year shall be considered an offense);

4.5.2.1. Penalties Imposed for Group II Violations.

Employees who commit a first offense violation as outlined under Group II, Section 4.5.2., 

shall receive a written reprimand and/or immediate suspension from work without pay for 

one (1) week.

Employees who commit second-offense violations as outlined under Group II, Section 

4.5.2., within one (1) calendar year from the first-offense violation of Group II, shall be 

terminated from city employment.

On October 6, 1988, the mayor of the City of Conrad, Thomas Hammerbacker, sent a 

letter to Batoon at her Conrad address in which he advised her that her unexcused 

absences from work for the four days from October 3 through October 6, 1988, constituted 

four inexcusable absences from work, or two Group II offenses pursuant to § 4.5.2. Group 

II Violations, within one calendar year. Hammerbacker stated that this warranted her 

termination pursuant to § 4.5.2.1. of the personnel policies and procedures manual unless 

she could show reasonable cause for her actions within twenty-four hours of receipt of his 

letter.

¶15. Batoon received Hammerbacker's letter on October 11, 1988, and on the same 

date, sent a letter to Hammerbacker and the city clerk, Tom Thode, in which she 

explained:

When we were planning our return to Manila, two of my cousins died. Both were from the 

same family. One died in Texas and the remains were shipped home, while the other lady 

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died in her home place. Both of these services were observed by all the family, as customs 

require. I tried to send a cablegram, but I was told that it would take two to three weeks to 

reach the United States because of the political problems. When we arrived in Manila, we 

found we could take a flight right away, so I was not able to place a telephone call, 

because it would take a long time. We flew into Seattle, rested a short while with a relative 

and then we drove straight through to Conrad. I called Tom Thode when I arrived and he 

told me that a letter had been sent to me.

I felt it was [my] responsibility to inform you of the reasons for my delay.

If the City Council wishes to have my resignation, I will supply it.

¶16. On October 14, 1988, the mayor, the city attorney, the city clerk, and three 

members of the city council held a hearing so that Batoon could personally present 

her explanation. Following the meeting, the city council members unanimously 

passed a motion to terminate Batoon. Later that day, the City communicated its 

decision to Batoon by letter in which it explained that her absence from her 

employment constituted two offenses pursuant to § 4.5.2. of the personnel manual 

("Group II Violations") within one calendar year, and was the reason for the 

termination of her employment. 

¶17. On October 11, 1988, the day Batoon received the October 6, 1988, letter from 

the mayor, and before the October 14, 1988, meeting of the city council, the City 

placed an advertisement in the local newspaper for applicants for Batoon's position. 

The City processed twenty-two applications, and interviewed five applicants to fill 

Batoon's position. All of the applicants, according to their high school graduation 

date, appeared to be younger than Batoon at the time of her termination, and all of 

the applicants who were interviewed were Caucasian. 

Issues raised by the City on direct appeal

ISSUE 1

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¶18. Did the District Court err when it concluded that Batoon did not abandon her 

job with the City of Conrad when she failed to report to work for five consecutive 

days?

¶19. The standard of review of a district court's conclusions of law is whether the 

court's interpretation of the law is correct. See Peters v. State (1997), 285 Mont. 345, 

948 P.2d 250.

¶20. The District Court stated in its conclusion of law number ten: 

The Court concludes a reasonable interpretation of the express provisions of the discipline 

policies of the City is that a non-probationary employee whose conduct is a first time 

infraction under either Group I or Group II, could receive a verbal warning or written 

reprimand. 

The District Court further stated that, prior to using punitive discipline, the policy of the 

City is to give the employee notice and an opportunity to correct his or her behavior 

following the employee's first unexcused absence. The District Court concluded that an 

uninterrupted absence for four days without any intervening notice from the City that the 

first absence is considered unexcused, must be treated as a single absence or a single 

offense. This is the case, the District Court concluded, at least until the extended absence 

reaches the level of legal abandonment of the employment. 

¶21. The City maintains that the District Court erred when it found that Batoon did 

not abandon her job after being absent from work for five consecutive days. The City 

gives several explanations regarding why the District Court erred in this respect. In 

the alternative, the City maintains that Batoon made it impossible for the City to 

impose a lesser sanction after her first two unexcused absences, such as a written 

reprimand and one week suspension, because she never notified the City of her 

whereabouts. 

¶22. Batoon contends that the District Court interpreted the law correctly by 

concluding that she did not abandon her job after five unexcused absences. Batoon 

maintains that the theory of abandonment in Montana is typically applied to a 

property interest or right and § 70-9-803, MCA, speaks in terms of years for 

abandonment of certain types of property. Batoon emphasizes that the District Court 

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concluded that there was no evidence from which to deduce intent to abandon her 

job and that there was no honest belief on the part of the City or Batoon that she 

would abandon her job. 

¶23. We agree with the conclusion of the District Court that a reasonable 

interpretation of the express provisions of the City's personnel policies and 

procedures manual is that a non-probationary employee, which Batoon was, whose 

conduct is a first time infraction pursuant to either Group I or Group II, would 

receive a verbal warning or written reprimand. This is consistent with the City's 

policy which requires notice to, and an opportunity for, the employee to correct the 

problematic behavior when the employee is absent from work without excuse for the 

first time. Because nothing in the City's personnel policies and procedures manual 

defines "unexcused absenteeism" or "inexcusable absences," as an absence which 

continues uninterrupted for five days without intervening notice from the City that 

the absence is considered unexcused or inexcusable, the absence must be treated as a 

single absence and a single offense. The City should have complied with its own 

written personnel policies and procedures manual and given Batoon notice of her 

violation and an opportunity to correct the problem. We agree with the District 

Court that regardless of whether Batoon was home to learn of such a notice, the City 

had a duty to make an effort to give her notice of her problematic behavior before 

discharge could result. Because the City violated the express provisions of its own 

written personnel policy and discharged Batoon without following the proper 

procedure, we conclude that the District Court correctly interpreted the law when it 

concluded that the discharge was wrongful pursuant to § 39-2-904(3), MCA.

ISSUE 2

¶24. Did the District Court err when it found that the City of Conrad violated its 

personnel policy?

¶25. As stated above, the District Court concluded that the provisions of the City 

personnel manual regarding employee discipline and discharge required the City to 

give Batoon a verbal or written reprimand and an opportunity to correct the 

problem behavior before discharge could result. Accordingly, the District Court 

concluded that the City wrongfully discharged Batoon pursuant to § 39-2-904(3), 

MCA.

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¶26. The City maintains that Batoon was on notice that two unexcused absences is 

one offense and that two such offenses justifies termination because she was familiar 

with the City's personnel policies and procedures and was aware of the contents of 

the personnel policies and procedures manual. In the alternative, the City contends 

that because Batoon offered to resign, she established her agreement with the City's 

common sense interpretation of the provisions of the personnel policies and 

procedures manual which pertain to Group II violations. The City cites Miller v. 

Citizens State Bank (1992), 252 Mont. 472, 830 P.2d 550, to support its position that 

the City was forced to bypass the first level of sanctions because Batoon did not 

afford the City a sufficient opportunity to impose a sanction for her initial offense 

and that progressive discipline should not be superimposed upon the definition of 

"good cause" in Montana's Wrongful Discharge from Employment Act.

¶27. Batoon argues that according to § 39-2-904, MCA, she need only prove one of 

three elements: (1) that the discharge was in retaliation for her refusal to violate 

public policy or for reporting a violation of public policy; (2) that she was not on 

probationary status and the discharge was not for good cause; or (3) the City violated 

the express provisions of its own written personnel policy. Batoon maintains that she 

satisfied the third element and did not violate the personnel policy when she failed to 

notify the City of her late return from the Phillippines. 

¶28. The standard of review of a district court s findings of fact is whether they are 

clearly erroneous. See Daines v. Knight (1995), 269 Mont. 320, 324, 888 P.2d 904, 906 

(citing Columbia Grain Int'l v. Cereck (1993), 258 Mont. 414, 417, 852 P.2d 676, 678). 

We adopted a three part test in Interstate Prod. Credit Ass'n v. DeSaye (1991), 250 

Mont. 320, 322, 820 P.2d 1285, 1287, to determine whether the findings are clearly 

erroneous. The test provides that: (1) the Court will determine whether the findings 

are supported by substantial evidence; (2) if the findings are supported by 

substantial evidence, the Court will determine if the trial court has misapprehended 

the evidence; (3) if the findings are supported by substantial evidence and that 

evidence has not been misapprehended, this Court may still conclude that "[a] 

finding is clearly erroneous when, although there is evidence to support it, a review 

of the record leaves the court with the definite and firm conviction that a mistake has 

been committed." DeSaye, 250 Mont. at 323, 820 P.2d at 1287 (citing United States v. 

United States Gypsum Co. (1948), 333 U.S. 364, 68 S. Ct. 525, 92 L. Ed. 746); See also 

Daines, 269 Mont. at 324-25, 888 P.2d at 906.

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¶29. Section 4.0 of the City's personnel policies and procedures manual addresses 

"Employee Discipline and Discharge." Section 4.1.(b)(1) states that it is the policy of 

the City in the application of an employee disciplinary procedure to "consider 

corrective discipline before applying punitive discipline, in all appropriate 

instances." "Corrective discipline" is defined in Section 4.2. as constructive, 

corrective action taken to improve employee attendance or performance problems, 

and may involve counseling, may be documented, and may include specific courses of 

action to improve employee behavior. "Punitive discipline" is defined in Section 4.3. 

as action which punishes an employee such as a warning letter, suspension, or 

termination. Section 4.4. of the manual describes the disciplinary steps involved in a 

disciplinary action, and indicates that the discipline may begin at any of the steps 

depending upon the seriousness of the offense. The steps proceed from a verbal 

warning to a written warning to suspension without pay pending discharge.

¶30. Section 4.5. of the policy manual identifies three groups of specified work place 

violations and further identifies the penalties for such violations. Section 4.5.1. 

identifies infractions labeled as "Group I Violations," which include "unexcused 

absenteeism." No definition is provided for "unexcused absenteeism." A first 

infraction pursuant to Group I Violations results in a verbal or written reprimand; 

and a second infraction within one calendar year of the first results in suspension 

without pay for one week. Section 4.5.2. identifies infractions labeled as "Group II 

Violations," which include "repeated absence without reasonable excuse (over four 

inexcusable tardies, and/or two inexcusable absences per calendar year shall be 

considered an offense)." No definition is provided for "inexcusable absences." A first 

offense infraction under Group II Violations results in a written reprimand and/or 

immediate suspension without pay for one week. A second offense infraction within a 

calendar year from the first offense results in termination from employment.

¶31. The District Court concluded, and we agree, that a reasonable interpretation of 

the express provisions of the City's personnel policies and procedures manual is that 

a non-probationary employee whose conduct is a first time infraction according to 

either Group I or Group II would receive a verbal warning or written reprimand 

and/or immediate suspension without pay for one week. Because nothing in the 

policy manual defines "unexcused absenteeism" or "inexcusable absences" we must 

treat Batoon's absence without intervening notice from the City that the absence is 

unexcused or is inexcusable as a single absence or a single offense. As stated above, 

we agree with the District Court that there is no evidence that Batoon's five-day 

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absence was intended to be an abandonment of her position with the City.

¶32. Accordingly, we conclude that the District Court's finding that the City violated 

its written personnel policies and procedures manual in violation of § 39-2-904(3), 

MCA, is supported by substantial evidence. We further conclude that the trial court 

has not misapprehended the evidence and that a review of the record does not leave 

this Court with the definite and firm conviction that a mistake has been committed. 

ISSUE 3

¶33. Did the District Court correctly determine that Batoon should be entitled to lost 

earnings?

¶34. The City maintains that the District Court erred when it determined that 

Batoon is entitled to lost earnings. We have previously held that the standard of 

review regarding an award of damages is abuse of discretion. See Edington v. Creek 

Oil Co. (1984), 213 Mont. 112, 690 P.2d 970. 

¶35. The City's first assignment of error with regard to the District Court's award of 

lost earnings is that Batoon did not actively seek work during most of the four years 

covered by Montana's Wrongful Discharge from Employment Act, § 39-2-905, MCA. 

Specifically, the City argues that Batoon did not seek work for four months 

immediately after her discharge by the City, and later began receiving social security 

retirement and supplemental income in the fall of 1990. The City contends that for 

two and one-half years of the four-year period, Batoon did not seek employment and, 

therefore, did not exercise reasonable diligence to mitigate her damages. Therefore, 

the City maintains, Batoon is not entitled to any damages during those periods of 

time, or is only entitled to a lesser amount of damages. Additionally, the City 

contends that because Batoon's normal life expectancy is sixty-five years of age, any 

award of lost earnings should not encompass any time period beyond that age, or 

August 27, 1991.

¶36. The District Court found that Batoon had applied for jobs with private 

businesses and governmental agencies. The court noted that Batoon moved to Great 

Falls from Conrad in order to find employment, that she applied for numerous jobs 

in writing, that she went to the job service on numerous occasions, and applied for 

jobs which she was capable of performing. The District Court found, and we agree, 

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that the record does not reflect any refusal or failure on Batoon's part to seek 

employment. In fact, the record in this case demonstrates that Batoon went out of her 

way to find employment, and when she could not, she began drawing social security 

as soon as possible in order to support herself. 

¶37. We have held that the burden of proof is on the employer to demonstrate that 

the claimant did not diligently seek employment. See Martinell v. Montana Power Co. 

(1994), 268 Mont. 292, 866 P.2d 421. In this case, the City did not offer any testimony 

to demonstrate that jobs existed in the vicinity of Conrad for which Batoon was 

qualified, or that she turned down any job offers within her geographic area. 

Because the City failed to carry its burden to establish that Batoon did not diligently 

seek employment, we conclude that the District Court did not abuse its discretion 

when it awarded Batoon lost earnings based on its finding that she did not fail to 

diligently seek employment.

¶38. The City's second assignment of error with regard to the District Court's award 

of lost earnings is that because the City discharged Batoon in violation of its 

personnel policy, she is not entitled to four years' worth of damages. The City 

maintains that wrongful discharge based upon a violation of the express provisions of 

an employer's own written personnel policy is the third and least grievous basis for 

wrongful discharge. In support of this assertion, the City offers § 39-2-904, MCA, 

which states:

A discharge is wrongful only if:

(1) it was in retaliation for the employee's refusal to violate public policy or for reporting a 

violation of public policy;

(2) the discharge was not for good cause and the employee had completed the employer's 

probationary period of employment; or

(3) the employer violated the express provisions of its own written personnel policy.

¶39. The City offers no authority for its theory. Moreover, even if the City's theory is 

true, the District Court specifically noted that because it found a violation of the 

City's own personnel policies and procedures manual, it was unnecessary to 

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determine whether the discharge was without good cause. 

¶40. Regardless, § 39-2-905, MCA, does not indicate in any way that one type of 

wrongful discharge is entitled to more or less damages than the others. The only 

limitation on the amount of damages pursuant to that statute is that actual earnings 

within the four years must be deducted from the award and that amount expended 

by the employee to seek new employment must be awarded to the employee. 

¶41. Accordingly, we conclude that the District Court did not abuse its discretion 

when it awarded lost earnings without considering the City's argument that the 

discharge in this case was less reprehensible than the other two reasons for wrongful 

discharge that are mentioned in the statute.

¶42. The City's third assignment of error regarding the District Court's award of 

damages is that Batoon had a duty to accept a job offer in Nevada after her discharge 

by the City. In Dawson v. Billings Gazette (1986), 223 Mont, 415, 417, 726 P.2d 826, 

828, however, we held that while "an injured party is not required to seek 

employment in another line of work or to move to a different locality . . . he or she 

must exercise ordinary diligence." We agree with the conclusion of the District Court 

that Batoon was not required to move to another state in order to satisfy the 

"ordinary diligence" requirement for wrongful discharge damages. In Matter of 

Unfair Labor Practice v. Young (1984), 211 Mont. 13, 686 P.2d 185, we held that a 

discharged employee need only make reasonable attempts to find employment. We 

agree with the District Court that, according to the evidence presented, Batoon did 

seek employment with ordinary diligence and was not required to move to a different 

state to obtain employment. 

¶43. Accordingly, we conclude that the District Court's award of lost earnings to 

Batoon was not an abuse of its discretion.

ISSUE 4

¶44. Did the District Court err when it failed to conclude that the judgment against 

the City should not accrue any interest if affirmed by this Court and paid within two 

years?

¶45. The standard of review of a district court s conclusions of law is whether the 

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court s interpretation of the law is correct. See Carbon County v. Union Reserve Coal 

Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686 (citing Steer, Inc. v. Department of 

Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603-04).

¶46. The City maintains that the District Court erred when it awarded Batoon 

interest in the amount of ten percent simple interest from the date of the District 

Court's judgment. Specifically, the City contends that the District Court's award of 

interest for the first two years after the entry of judgment, is in direct contravention 

of § 2-9-317, MCA, which provides that "[e]xcept as provided in 18-1-404(1)(b), if a 

governmental entity pays a judgment within 2 years after the day on which the 

judgment is entered, no penalty or interest may be assessed against the governmental 

entity."

¶47. Accordingly, the City argues that once the City notified the District Court of this 

statute, the District Court should have, pursuant to our decision in Weber v. State

(1993), 258 Mont. 62, 852 P.2d 117, amended its order and judgment nunc pro tunc

even after the notices of appeal were filed, to provide that no interest may be assessed 

on Batoon's judgment if paid by the City within two years of its entry.

¶48. In Weber, a jury concluded that the State had wrongfully discharged Weber. 

The original judgment did not provide for costs or post-judgment interest. Weber, 

therefore, filed a post-judgment motion to have the court include costs. The court 

granted Weber's motion for costs and also included "interest thereon at 10% per 

annum until paid." The State, thereafter, filed a Rule 59(g), M.R.Civ.P., motion to 

amend the amended judgment in which it requested that the court enter a nunc pro 

tunc order striking the post-judgment interest from the order because of the State's 

immunity to post-judgment interest pursuant to § 2-9-317, MCA. After the motion 

was filed, but prior to the court's decision on the motion, Weber filed his notice of 

appeal and the State filed its cross-appeal. Only after both notices of appeal were 

filed did the district court grant the State's motion and issue a nunc pro tunc order 

assessing costs but eliminating interest on the judgment award pursuant to § 2-9-317, 

MCA.

¶49. Although the facts of this case are similar to those in Weber, a critical distinction 

must be made between the timing of the objection to the award of interest in Weber

and the timing of the objection to the award of interest in this case. In Weber, the 

State objected to the award of interest in its motion to amend the amended judgment 

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prior to either party filing a notice of appeal. In this case, on the other hand, the City 

failed to object to the award of interest until more than five months after the date it 

had filed its notice of appeal.

¶50. Additionally, the City had previously filed a motion in which it requested the 

court to alter and amend the court's judgment with regard to damages. Nowhere in 

that motion did the City object to the court's award of interest.

¶51. Pursuant to Rule 2, M.R.App.P., this Court can review any decision which is 

excepted or objected to by a party. Rule 46, M.R.Civ.P., provides that a party, if he 

or she had the opportunity, has a duty to make known to the trial court its objections 

and exceptions to the court's rulings. We agree with the District Court that the City 

had the opportunity and, therefore, the duty to make known to the trial court when it 

filed its motion pursuant to Rule 59(g), M.R.Civ.P., that it disputed the court's ruling 

on interest. As we held in Story v. City of Bozeman (1993), 259 Mont. 207, 217-18, 856 

P.2d 202, 208, when a party did not solicit a ruling from the district court, but merely 

presented the issue on appeal, the issue is not preserved on appeal. Likewise, in 

Unified Industries v. Easley, 1998 MT 145, 961 P.2d 100, 55 St. Rep. 574, we held that 

issues or theories which are not argued prior to trial are not appealable. If the City 

believed that § 2-9-317, MCA, applied, then it should have argued this before the 

District Court while the District Court still had jurisdiction over the case and while 

the District Court had the opportunity to address the argument.

¶52. Accordingly, we conclude that the District Court did not err when it denied the 

request by the City to remove the award of interest from the judgment amount 

because the City failed to file a motion to alter or amend the judgment in the proper 

manner and in a timely fashion. Because the City did not object to the award of 

interest until after it had filed its notice of appeal, the District Court was deprived of 

further jurisdiction over the issue. We therefore conclude that this issue is not 

appealable because it was not argued or objected to in front of the District Court and 

that the District Court's interpretation of the law is correct.

ISSUE 5

¶53. Did the District Court err by not dividing the costs of production of the District 

Court transcript on appeal?

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¶54. The standard of review of a district court s conclusions of law is whether the 

court s interpretation of the law is correct. See Kreger v. Francis (1995), 271 Mont. 

444, 447, 898 P.2d 672, 674. 

¶55. The City maintains that because Batoon filed a cross-appeal in this case, she is 

responsible for paying a portion of the cost of producing the transcript on appeal. 

The City cites Weber, 258 Mont. at 66-67, 853 P.2d at 120, in support of its position. 

In Weber, the appellant paid the full cost of the transcript; however, he maintained 

that since both parties used the transcript for their appeals both parties should share 

the cost of the transcript. As a result of the appeal in Weber, both parties were 

partially successful and partially unsuccessful and the district court, therefore, 

awarded part of the cost of the transcript to the respondent. On the other hand, in 

this case, both Batoon and the City were unsuccessful in their appeals. We have held 

that only the successful party on appeal is entitled to recover his or her costs from the 

other party. See Weber, 258 Mont. at 66-67, 852 P.2d at 120. Because the City was 

unsuccessful on its appeal, we conclude that it cannot recover any portion of the cost 

of the transcript from Batoon.

¶56. Moreover, Rule 9(b), M.R.App.P., states that "the cost of producing the 

transcript shall be paid by the appellant, or the appellant shall make satisfactory 

arrangements with the reporter for the payment of such cost." Rule 23(h), M.R.App.

P., indicates that the first party to file an appeal is deemed the "appellant" for 

purposes of the other rules of appellate procedure.

¶57. We, therefore, conclude that the District Court's interpretation of the law is 

correct and affirm the judgment of the District Court that the City is responsible for 

the cost of producing the transcript on appeal. 

Issues raised by Batoon on cross-appeal

ISSUE 1

¶58. Did the District Court err when it concluded that Batoon had no property 

interest in her continuing employment with the City of Conrad?

¶59. The District Court's determination that Batoon had no property interest in her 

continuing employment with the City is a conclusion of law. As we stated above, the 

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standard of review of a district court s conclusions of law is whether the court s 

interpretation of the law is correct. See Carbon County v. Union Reserve Coal Co.

(1995), 271 Mont. 459, 469, 898 P.2d 680, 686.

¶60. Batoon maintains that Montana's Wrongful Discharge Act, which requires good 

cause for dismissal, in conjunction with written personnel policies which require due 

process, creates a property interest in employment. Therefore, Batoon contends, she 

was entitled to meaningful due process and a hearing prior to her discharge.

¶61. Batoon bases her claim that the City's personnel policies and procedures 

manual requires due process upon the fact that the manual requires the City to act 

with fairness and consistency toward its employees, that it disallows the firing of an 

employee without specific steps being taken, including the requirement that the 

affected employee be given the opportunity to provide a "reasonable" excuse for his 

or her conduct, and that the manual provides for progressive discipline steps prior to 

dismissal. All of these things, according to Batoon, enhance the employee's 

expectation of continuing employment and a property interest in employment with 

the City.

¶62. The District Court concluded that because Batoon failed to point to any state 

regulation which could arguably create a specified term of her employment with the 

City, she does not have a property interest in her employment. The District Court 

further concluded that the language of the City's personnel policies and procedures 

manual does not rise to the level of the state regulations that this Court interpreted in 

Boreen v. Christensen (1994), 267 Mont. 405, 420, 884 P.2d 761, 770, to give an 

employee a property interest in his or her employment. The regulations interpreted 

in Boreen clearly state that no discharge from employment would occur for nonprobationary employees unless "just cause" was demonstrated. The regulations 

defined "just cause." The District Court concluded that the City's manual does not 

limit the grounds for discharge, as did the regulatory language in Boreen, though it 

does enumerate, in a nonexclusive fashion, certain reasons for which discharge is the 

appropriate discipline. Therefore, the District Court concluded that the language of 

the City's personnel policy does not create a property interest in continued 

employment which cannot be removed without due process.

¶63. The United States Supreme Court has held that an employee is entitled to due 

process in the decision to terminate his or her employment if the employment is or 

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had become a property interest. See Cleveland Bd. of Educ. v. Loudermill (1985), 470 

U.S. 532, 538, 105 S. Ct. 1487, 1491, 84 L. Ed. 2d 494, 501. This Court has held that a 

"property interest" is not created by the Constitution but exists in employment only 

if "some written contract, state law, or regulation . . . states or otherwise provides a 

specified term of employment." Boreen, 267 Mont. at 420, 884 P.2d at 770. The only 

written document which Batoon contends could create a "specified term of 

employment" for non-probationary employees such as herself, is the City's personnel 

policies and procedures manual.

¶64. We agree with the District Court that the language of the City's personnel policy 

manual does not create a property interest in employment sufficient to trigger the 

due process protections afforded by the Fourteenth Amendment of the United States 

Constitution. Accordingly, we conclude that the District Court correctly interpreted 

the law when it concluded that Batoon had no property interest in her continuing 

employment with the City of Conrad.

ISSUE 2

¶65. Did the District Court err when it concluded that the City of Conrad had not 

discriminated against Batoon based upon her age and race? 

¶66. Once again, the standard of review of a district court s conclusions of law is 

whether the court s interpretation of the law is correct. See Kreger v. Francis (1995), 

271 Mont. 444, 447, 898 P.2d 672, 674.

¶67. Batoon maintains that although the District Court was correct when it found a 

prima facie case of age and race discrimination, the District Court erred when it 

failed to conclude that Batoon proved that the City's stated reason for her discharge 

was a pretext. Batoon contends that she did show, by the series of events after her 

arrival from the Philippines, and the hiring of a much younger woman, that her 

discharge was discriminatory in nature. Batoon claims that the District Court 

ignored much of the significant evidence which proved discrimination. For example, 

Batoon maintains that she was much better qualified for her position than the 

younger woman who replaced her. She further alleges that none of the older women 

who applied for Batoon's position were interviewed, and yet these older women had 

better credentials than the woman hired to replace Batoon. She maintains that the 

people interviewed for her position were generally the youngest and least qualified 

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for the position. Batoon concludes that the entire selection procedure for her position 

was a pretense because the City had made its decision to hire a young woman no 

matter who applied.

¶68. The City denies that its discharge of Batoon was predicated upon intentional 

discrimination and maintains that the reason for Batoon's discharge was her 

unexcused week of absence which rendered her unable to satisfactorily perform her 

job duties during that time, caused significant disruption of the City's operations, 

and brought hardship upon her co-workers and supervisor. 

¶69. The District Court concluded that Batoon did not demonstrate by a 

preponderance of the evidence that the City intentionally discriminated against her 

on the basis of her age or race in its decision to terminate her employment and, 

therefore, that the City did not violate the Age Discrimination in Employment Act of 

1967 (ADEA) or Title VII. 

¶70. Once an employee establishes a prima facie case pursuant to McDonnell-Douglas 

Corp. v. Green (1973), 411 U.S. 792, 93 S. Ct. 1817, 36 L. Ed. 2d 668, the burden of 

production shifts to the employer to articulate some legitimate, nondiscriminatory 

reason for the adverse employment decision. Once the employer provides a reason 

for the discharge that is legally sufficient to justify a judgment for the employer, the 

employee has the opportunity to demonstrate that the proffered reason was not the 

true reason for the employment decision. See Texas Dep't of Community Affairs v. 

Burdine, (1981) 450 U.S. 248, 255-56, 101 S. Ct. 1089, 1095, 67 L. Ed. 2d 207, 216-17. 

The employee may prevail in two ways. He or she can demonstrate that a 

discriminatory reason more likely motivated the employer, or demonstrate that the 

employer's asserted reason is not credible. See Burdine, 450 U.S. at 265, 101 S. Ct. at 

1095, 67 L. Ed. 2d at 217.

¶71. We agree with the District Court that although the burdens of production 

alternate according to the McDonnell-Douglas analysis, the ultimate burden of 

persuasion remains with the claimant to establish by a preponderance of the evidence 

that the employer intentionally discriminated against the claimant in the adverse 

employment decision. See St. Mary's Honor Ctr. v. Hicks (1993), 509 U.S. 502, 507, 

113 S. Ct. 2742, 2747, 125 L. Ed. 2d 407, 416. It is not enough to support a conclusion 

of discrimination for a court to simply disbelieve the reason offered by the defendant 

for its decision; rather, the court must also be persuaded that discrimination was the 

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real reason for the employer's action. See St. Mary's Honor Ctr., 509 U.S. at 515, 113 

S.Ct. at 2752, 125 L. Ed. 2d at 422; Heiat v. Eastern Montana College (1996), 275 

Mont. 322, 328, 912 P.2d 787, 791.

¶72. As with the District Court, we conclude that Batoon has not convinced this 

Court that the reason for her discharge was age or race discrimination. Although 

Batoon was replaced by a younger individual, a fact which is sufficient to establish a 

prima facie case of discrimination and satisfy the first prong of the three-part 

McDonnell-Douglas test, the evidence presented is not sufficient to prove by a 

preponderance of the evidence that Batoon's week-long absence was not the actual 

and legitimate reason for her discharge.

¶73. Accordingly, we conclude that the District Court correctly interpreted the law 

when it concluded that the evidence presented is not sufficient to ultimately 

demonstrate that the motive for the replacement of Batoon was her age or race.

¶74. The judgment of the District Court is affirmed.

/S/ JIM REGNIER 

We Concur:

/S/ J. A. TURNAGE

/S/ KARLA M. GRAY

/S/ WILLIAM E. HUNT, SR.

Justice Terry N. Trieweiler specially concurring in part and dissenting in part.

¶75. I concur with the majority's resolution of the five issues raised on direct appeal. 

I also concur with the majority's resolution of the second issue raised on crossappeal. However, I dissent from the majority's conclusion that the plaintiff, 

Josephine Batoon, had no property interest in her continued employment with the 

City of Conrad. 

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¶76. In Boreen v. Christensen (1994), 267 Mont. 405, 884 P.2d 761, we held that 

personnel policies of the State of Montana which provided that the plaintiff in that 

case could not be discharged without "just cause" created a property interest in her 

employment which could not be taken away without due process of law. We 

concluded that the just cause provision provided Boreen with a specified term of 

employment which lasted until there was "just cause" for her termination. For that 

reason, we concluded that she was not an at-will employee.

¶77. We also acknowledged that our prior decisions had not addressed whether the 

Wrongful Discharge From Employment Act creates a property interest in continued 

employment through the good cause requirement found at § 39-2-904(2), MCA. We 

said:

[A]s discussed in some detail below, Stokes did not correctly interpret our prior case law, 

nor have we addressed directly the issue of whether the WDFEA creates a property 

interest in continued employment through the good cause requirement of § 39-2-904(2), 

MCA. That precise issue, moreover, is not presently before this Court, and we are not 

deciding that question in this case.

Boreen, 267 Mont. at 414, 884 P.2d at 766.

¶78. Section 39-2-904(2), MCA, provides that "[a] discharge is wrongful only if . . . 

(2) the discharge was not for good cause and the employee had completed the 

employer's probationary period of employment."

¶79. In other words, employees in Montana are provided the same right to 

employment absent good cause for their termination pursuant to statute that the 

employee in Boreen was provided by administrative rule. Batoon was no less entitled 

to a specified term of employment than Boreen. Based on the reasoning in Boreen, 

Batoon had no less a property interest in her employment than the plaintiff in that 

case, and she was no less entitled to due process before being deprived of that 

property right.

¶80. For these reasons, I dissent from that part of the majority opinion which 

concludes that the plaintiff, Josephine Batoon, had no property interest in continued 

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employment based upon the "good cause" provision found at § 39-2-905(2), MCA, of 

Montana's Wrongful Discharge From Employment Act. I otherwise concur in the 

majority opinion.

/S/ TERRY N. TRIEWEILER

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