NO. 90-184 IN THE SUPREME COURT OF THE STATE OF MONTANA 1991

S.M., J.A.M., M.M., J.K.M., and Plaintiffs and Appellants,

-vsR.B., an individual, and MISS political subdivision of the State of Montana, Defendants and Respondents.

APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable John S. Henson, Judge presiding.

COUNSEL OF RECORD: For Appellant: James P. OIBrienand Randolph J. Stevens; OIBrien Law Offices,Missoula, Montana. For Respondent: LarryJones;Garlington, Lohn & Robinson,Missoula, Montana.

Filed: Submitted on briefs: M~Y 21,1991 Decided: May 23, 1991

I ClerkJustice Fred J. Weber delivered the Opinion of the Court.

The complaint alleges that R.B., an educational aide for the Missoula School District, sexually assaulted four-year-old plaintiff S.M., who was enrolled in the Missoula School District special education program for the developmentally disabled. The defendants include the School District and the School District personnel involved in the special education program. The District Court for the Fourth Judicial District, Missoula County, granted defendants' motion to dismiss the Amended Complaint of the plaintiffs on thegrounds of immunity,and subsequentlygrantedthe motion todismiss the SecondAmended Complaint on the samegrounds. Plaintiffs appeal. We affirm in part and reverse in part. The issues are: 1. Have the Montana statutes and case law interpretations resulted in anambiguity requiring a reversal of the DistrictCourt holding that the defendants are immune under 5 2-9-111, MCA? 2. Does the purchase of insurance waive immunity? 3. Did the District Court improperly fail to rule on plaintiffs' claims under 42 U.S.C. 5 1983? 4. Is 5 2-9-111, MCA, unconstitutional? The facts as alleged in the Amended Complaint and the Second Amended Complaint are as follows: Plaintiffs included S.M., her two parents, and the other two minor children in her family. S.M. was a four-year-old suffering developmental disabilities and was enrolled in the SchoolDistrict's special education program when the acts occurred. Plaintiffs allege that the special education program established

a special relationship between S.M., her family, and the School District. R.B. was an educational aide for the School District, who helped in the education and training of developmentally disabled children attending the School District's program. TheSchool Districtmaintained apolicy of liability insurance insuring against liabilities arising from its negligence. Plaintiffs contend the procurement of such insurance constitutes a waiver of sovereign immunity to the extent of the insurance coverage. Plaintiffs alleged that on or about April 16, 1987, R.B. sexually assaulted S.M. and committed sodomy and attempted rape. S.M. received vaginal lacerations of such severity that reconstructive surgerywill be required at adulthood. She suffers continual nightmares, and has become fearful of school. Plaintiffs alleged that the School District and its employees

were negligent in the hiring, controlling and supervising of 

### R.B.

as an educational aide. Plaintiffs maintain the School District knewor shouldhave knownthatR.B. had Ita predatorypredisposition toward young developmentallydisabled children by virtue of prior reports" thatwarned the School District of 

### R.B. Is ttantisocial and dangerous behaviortt. Plaintiffs alleged seven different causes of action with various theories of liability which will be discussed whereappropriate. In substance the defendants assert that plaintiffs1 claims are barred by the following defenses: doctrine of sovereign immunity; doctrine of respondeat superior; doctrine of exhaustion of remedies; failure to seek administrative review; lack of jurisdiction; claims formonetary damages barred by 5 2-9-108,MCA; claims for punitive damages barred by 5 27-1-221, MCA; and claims barred by 42 U.S.C. 5 1983 (1981). Following the failure of R.B. to appear,plaintiffsmoved for default judgment which was entered against him on September 8,

The School District filed a Rule 12, M.R.Civ.P., motion to dismiss the plaintiffs1 complaint. On January 25, 1990, the District Court granted the motion to dismiss the plaintiffs1 Amended Complaint on the grounds of immunity. Subsequently, the District Court also granted defendants' motion to dismiss plaintiffs1 Second Amended Complaint on the same grounds. From that order,plaintiffs appeal.

Have the Montana statutes and case law interpretations resulted inan ambiguityrequiringa reversal of theDistrict Court holding that the defendants are immune under 5 2-9-111, MCA? Plaintiffs argue there is a statutory ambiguity which is apparentupon a comparison of Ij 2-9-111,MCA, the immunitysection, and 5 20-3-331, MCA, which authorizes the trustees of a school district to purchase insurance coverage against liability for death, injuryordisability of any person. Essentially plaintiffsargue there is no purpose in authorizing a school district to purchase liability insuranceif there is immunity. This contention is cared for in Part I1 of this opinion in which we conclude that the purchase of liability insurance in this case does constitute a waiver of immunity. Plaintiffs contend there is ambiguity as a result of the various cases previously decided in Montana. In particular, plaintiffs rely upon B.M. v. State (1982), 200 Mont. 58, 649 P.2d 425. Plaintiffs argue that in B.M. this Court found there was no governmental immunity for negligence committed under a special education program and that such theory should be applied in the present case. In considering the cases, it is necessary that we first set forth the provisions of 5 2-9-111,MCA: Immunity from suit for legislative acts and omissions. (1)As used in this section: (a) the term ffgovernmental entityffincludes the state, counties,municipalities, and school districts; (b) the term fflegislativebodyff includes the legislature vested with legislative power by Article V ofTheConstitution of theStateofMontana and any local governmental entitygiven legislative powersby statute, including school boards. (2) A governmental entity is immune from suit for an act or omission of its legislativebody or a member, officer, or agent thereof. (3) A member, officer, or agent of a legislative body is immune for damages arising from the lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the legislativebody. (4) The immunityprovided for in this section does not extend to any tort committed by the use of a motor vehicle, aircraft, or other means of transportation. Plaintiffs have not discussed the cases subsequent to B.M. which must be considered. In State ex rel. Eccleston v. MontanaThird Judicial Dist. Ct. (1989), 240 Mont. 44, 53, 783 P.2d 363, 369,the Court set forth the contentionsof theplaintiffs in B.M. and stated: In B.M., theplaintiffs sued the State for negligence in placing a six-year old child in a special education program for educable mentally retarded children. The State was granted summary judgment based on immunity under 

### 5 2-9-111, MCA. We reversed on the grounds that the legislaturehad not enacted legislationto limit the liability of school boards in the administration of special educationprograms. We held that inthe absence of a clear statutory declaration granting immunity it is thisCourt's duty topermit rather than todeny an action for negligence. B.M., 649 P.2d at 427. However, Eccleston pointed out that 

### 5 2-9-111, MCA, was not discussed in B.M. In concluding that under the decisions, the plain language of the statute constitutes a clear statutory declaration granting immunity, the Court said in Eccleston: The plain meaning of the actual language used in 

### 5 2-9-111,MCA, was not discussed in our decision in B.M. v. State. We have decided several other immunity cases since our 1982 decision in

### B.M. In the process, we have arrived at the current construction of 

### 5 2-9-111, MCA, on a case-by-case basis. B.M.'s rule of strict construction still holds true. However it is now clear, particularlyafter ourdecisions in Bieber and Peterson, that the plain language of the statute constitutes a clear statutory declaration granting immunity to the relators in this case. Eccleston, 783 P.2d at 369. The Court then analyzed further and pointed out that the statute granted immunity to both the school district and its individual employees, and stated: Inthis regard, we are not asserting inthisopinion that the statute is unequivocally clear at first glance. Indeed, several interpretations of 5 2-9-111, MCA, have been argued in the line of cases that have come before us since the statute's adoption. However, it is this line of cases, particularly our recent decisions in Bieber and Peterson that has given a specific andreasonable interpretation to the statute based on the plain meaning of the actual language used. Moreover, this interpretation of 5 2-9-111, MCA, leads us to but one conclusion: the statute grants immunity to both the school district and its individual employees in this case. 

### Id. at 369. It is clear that Eccleston disposes of the argument made by the plaintiff. This interpretation was approved in Hayworth v. School Dist. No. 19 (1990), 243 Mont. 503, 795 P.2d 470, in which this Court affirmed the Eccleston rationale and its interpretation of B.M., and reached the conclusion that the claims of theplaintiffs inHavworthwere barred by the immunity found in 

### 5 2-9-111,MCA. In a similarmanner, in Crowell v. School Dist. No. 7 (Mont. 1991), 805 P.2d 522, 48 St.Rep. 81, this Court affirmed the rationaleof Eccleston,holding that the school district inCrowell

was immune from suit for an act or omission of its agent and that the physical education teacher was the agent of the school district. Further the Court concluded that the claim for damages

arose from the lawful dischargeby the teacher of an official duty associatedwith actions of the school district and its legislative body. The Court held that the physical education teacher was immune under 

### 5 2-9-111, MCA. Montana now has a number of consistent interpretations of 

### 5 2-9-111, MCA, which are controlling on the present issue. We conclude that there is no basis for a reversal of the holding of the District Court that the defendants were immune under the provisions of 5 2-9-111,MCA.

### Does thepurchase of insurancewaive immunity? Plaintiffsmaintain that even if the School District and its employees are immune, such immunity is waived to the extent of existing liability insurancecoverage. The School District argues that the grant of immunity is a public right which cannot be waived. InCrowellthisCourt concludedthatthepurchase of insurance may constitute a waiver of immunity by a school district. In Crowell,theplaintiff alleged that thenegligence of thephysical education teacher and the school district caused her injuries. Summary judgment was granted to the defendants based on immunity. On appeal plaintiff contended that any such immunitywaswaived by the schooldistrict's purchase of an insurancepolicy specifically covering teachers and physical training instructors. After an extensive review of Montana legislative history and the case law of other jurisdictions, this Court concluded: WeemphasizethatMontana's statutory provisionsare unique. We conclude that the Montana Legislature has reached the following conclusion: while a school district is granted immunity of various types, a school districtstill isgrantedauthoritytopurchase insurance which may have the effect of waiver of immunity to the extent of the insurance proceeds. We do not find it necessary to imply a waiver, as the intention of the Legislature is clear. That intention isreemphasizedby its authorization of tax levies sufficient to pay for insurance premiums. That intention is consistentwith the legislative theory that a claim against a school district should be paid in a manner similar to payment required of a private party. We conclude that the Legislature has declared its intent to allow a school district towaive immunitytotheextent of the insurance proceeds.Crowell, 805 P.2d at 533. This Court then made the following holding: Balancing all applicable factors, we hold that the purchase by the School District of liability insurance waives its immunitytotheextent of thecoverage granted by the pertinent insurancepolicy. Crowell, 805 P.2d at 534. In accordance with the holding in Crowell, we hold that the purchase by the School District of liability insurancewaives its immunity to the extent of the coverage granted by the pertinent insurance policies. We remand to the District Court for further proceedings consistent with this holding.

Did the District Court improperly fail to rule on plaintiffs' claims under 42 U.S.C. 5 1983? By itsOpinion and Order dated January 25, 1990,the District Court granted defendantsvmotion to dismiss theAmended Complaint with prejudice onthegrounds that thenamed defendantswere immune from suit fordamages under 

### 5 2-9-111, MCA, and cases interpreting that section. The District Court did not specificallyrule on the 5 1983 claims. Plaintiffs contend that the District Court abused its discretion by dismissing those claims. The defendants urge that the doctrine of implied findings should be used to reach the conclusion that the District Court did rule on the federal claims. Ina consideration of the 

### 5 1983 claimsof theplaintiffs, the District Court was required to analyze the complaint, the facts presented to it, and to apply the law in reaching a decision as towhether or not 5 1983 claims were barred. The court did not make such an analysis. Apparently it assumed that the 5 1983 claims would be barred under 5 2-9-111,MCA. We note thatHowlettv. Rose

(1990), 110 S.Ct. 2430, is a case in which the United States Supreme Court concluded that a state immunity defense was not available in a 5 1983 action brought in a state court, when such

a defense would not be available if the action were brought in a federal court. Howlett precludes any implication on ourpart that the District Court properly dismissed 5 1983 claims. We therefore remand this issue for consideration and determination by the District Court. IV Is 5 2-9-111, MCA, unconstitutional? In theirpleadings theplaintiffsbriefly alleged deprivation of constitutionalrights. In a similar manner, plaintiffs' briefs containonlya limitedargumentontheories ofunconstitutionality. It appears that the plaintiffs added constitutional arguments in the hope that if previous contentions failed, theremight be some basis for a reversal on theories of unconstitutionality. Inview of our remand to the District Court on the issues of waiver of immunityby insuranceand also 42U.S.C. 5 1983,itmay be that the plaintiffswill chooseno longertourge the constitutional issues. If they conclude that they wish to present such issues, then both sidesmay present their theories and briefs to the District Court and request an appropriate determination by that court. We note that the District Court 

### did not rule on this issue. We concludeit is not appropriate in this case to consider the issue of unconstitutionality of 5 2-9-111, MCA. We reverse the orders of dismissal of the District Court and remand for further proceedings consistent with this opinion.

/ If 6hief Justice 1

JusticesJustice Terry N. Trieweiler concurring in part and dissenting in part.I concurwith the result of themajority opinion. Based upon this Court's decision in Crowellv. School Dist. No. 7 of Gallatin County, 805 P.2d 522,48 St.Rep. 81 (Mont. 1991), I agree that this

case should be remanded to the District Court for further proceedings consistentwith that opinion. However, I disagreewith the reasoning of the Crowell decision. It is clear tome that the legislature did not authorize the waiver of immunity when it authorized local governmentstopurchase insurance. It authorized localgovernmentstopurchase insurance because itneverdid create the kind of local governmental immunity that has been found to exist by this Court. I also concur in that part of the majority's opinion which remands this case to the District Court for proper consideration of the plaintiffs' claims under 42 U.S.C. 5 1983. I dissent from thatpart of themajority's opinionwhichholds that § 2-9-111, MCA, clearly and unambiguously provides immunity to the Missoula School District and its employees for the acts complained of by the plaintiffs. To understand just how far we have come with this Court's unique brand of judicial activism, it is necessary to put this holding in theproperperspective. Thedefendant,R.B., isaccused of rapingand sodomizing a four-year-old special educationstudent, and in theprocess, causing seriousphysical and emotional injury. In order to immunize the school district and all of its employees, 12this Court had to conclude that the depraved conduct which is complainedofwas "actionby the legislative body." I am confident that themembers of the Board for theMissoula School Districtwill take no satisfaction in this appalling conclusion. Section 2-9-111, MCA, is a poorly worded statute which provides different types of immunity to different defendants. Subsection (2) is relatively straightforward and provides that "[a] governmental entity is immune from suit foran act or omission of its legislative body or a member, officer, or agent thereof

# ."

(Emphasisadded.) However, subsection (3), which pertains to governmental employees in their individual capacities, sets forth a completely different description of when immunity applies. It states: A member, officer, or agent of a legislative body is immune from suit for damages arising from the lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the legislativebody. Section 2-9-111(3), MCA. In this case, plaintiffs sued both the school district and several of its employees. It is obvious from any reasonable interpretation of these two sections that liability of individual governmental employees is granted on a much more limited basis than liability for the governmental entity itself. If not, it would have been a simple matter for the legislature to provide in subsection (2) that "a governmental entity and its emplovees are immune from suit from

an act or omission of its legislative body, or a member, officer, 13or agent thereof. (Emphasis added.) The legislature chose not to do that. Therefore, this Court should not do so. In his concurring opinion to Crowell, Chief Justice J. A. Turnage correctly points out that: I1Inthe construction of a statute, the office of the judge is simply toascertainand declarewhat is in terms or in substancecontained therein, not to insertwhathas been omitted or to omit whathasbeen inserted.I1 Section 1-2-101, MCA. This is the rule of law governing statutory construction, and it is an appropriate and proper rule. There isnoplace for individualpreference or desire to become the rule of law when the Court interprets statutory language. I agree with Chief Justice Turnage1s conclusion regarding the proper role of thisCourt. However, Idisagree that this Courthas adhered to that rule of statutory construction when interpreting § 2-9-111,MCA. If it did, it could certainly not have concluded that the sodomizationand rapeof a four-year-oldspecialeducation student by a teacher's aide was Ifthe lawful discharge of an official duty associatedwith the introduction or consideration of legislation or action by the legislative body." The reason we are at the point we have reached with today's decision is that this Court has ignored the statutory admonishment found in 5 1-2-101,MCA, and substituted its collective personal preference for a literal application of the statutory language found in 5 2-9-111(3), MCA. The misapplication of that statute will result in countless hardships to innocent victims throughout the State of Montana. Iprefer not to be part of blind adherence to precedent which is both legally incorrect and morally indefensible.Furthermore, Idissent fromthatpart of themajority decision which refuses to address the constitutionality of 

### 5 2-9-111,MCA,

as it has been applied by this Court. Theprincipal reason for which thisCourt exists isto enforce the Constitution of the State of Montana. When the legislature, through its statutes (as they are written or as this Court interprets them), violates the ~onstitution,this Court owes Montana's citizens its judgment to that effect. Article 11, § 4,of theMontana constitution provides in part that ''noperson shallbe denied the equal protection of the laws.I' That provision of our state constitution is similar to rights provided for in the 14th Amendment of the United States Constitution. The equal protection clauses of both constitutions go to the very heart of the reason for which this Court exists. They guarantee that all Montana citizens shall be treated fairly. There is no greater example in the recent history of this Court of unfair treatment of Montana citizens than in this Court's recent decisions on the issue of local governmental liability. Those decisions have been inconsistent and irrational. And yet, they deny Montana citizens the most fundamental rights that any citizen in a free country possesses. They denyMontanans the right to use their courts to seek redress fromagovernmentwhich injures them through irresponsible, negligent, or even intentional and unlawful conduct. InMeechv. Hillhaven, 238 Mont. 21, 776 P.2d 488 (1989),this Court held that there is no fundamental right in Montana to fulllegal redress for injuries or damages caused by the unlawful or negligent act of another. Therefore, according to that decision, classifications which give different rights to different classes of tortvictimsneed notpass the strict scrutinytest and need not be justifiedby a compellinggovernmental interest. The stateneed only establish that the disparate treatment of similar claims is rationallyrelated to a state interest. While Idisagree with this Court's decision in Meech, I am satisfied that the patchwork of arbitrary classifications created by this Court's decisions on local governmental liability cannot meet themost liberal rational basis analysis. According to this Court's decisions, if aperson is seriously injured due to the negligent maintenance and signing of roads in Fallon County, that person has no recourse against local government. Miller v. Fallon County, 240Mont. 241, 783 P.2d 419

(1989). However, if that same person sustains the same injuries under the exact same circumstances in the City of Billings, he may be fully compensated. Irionv. Peterson, 807 P.2d 714, 48 St.Rep. 258 (Mont. 1991). What is the rational basis for such a distinction? Under this Court's application of the law, if a local citizen is paralyzed because a county road crew digs a ten foot ditch

across the road and leaves it unmarked at night, that victim is without any remedy. Miller. However, if amember of the sameroad

crewgets into a county truck,runsa red lightand strikes another local citizen,that citizencanbe fullycompensated,nomatter how 16minor his or her injury. 

### 5 2-9-111(4), MCA. What is the rational basis for such a distinction? Under this Court's series of decisions, if a local citizen is injured because he or she slips on the steps at the University of Montana, that person may be fully compensated. Mitchell v. University of Montana, 240 Mont. 261, 783 P.2d 1337 (1989). However, if that sameperson is injured because he slips and falls

on the steps of the local junior high school, he is without a remedy. Eccleston v. District Court, 240 Mont. 44, 783 P.2d 363

(1989). What is the rational basis for such a distinction? Under this Court'sdecisions, if a Montana citizen is injured due to the negligence or illegal conduct of a member of the park board which is appointed by the county commission in Yellowstone County, thatperson may be fully compensated. Koch v. Yellowstone County, 243 Mont. 447, 795 P.2d 454 (1990). However, if that same person is injured due to the negligence of the road foreman hired by thecommissioners forYellowstoneCounty,thatperson iswithout a remedy. Miller. Under this Court's recent decisions, if a citizen of Montana is injured due to the negligence of an employee of the Town of Whitefish, and if that town is responsible enough to purchase liability insurance for the protection of its citizens, then that injuredvictim canbe fully compensated forhis injuries. Crowell. However, if that person's spouse is injured by the same conduct andunderthe samecircumstances,by public officials inKalispell, and if that town is irresponsible enough to go without liability 17insurance, then that person is entitled to no compensation, no matter how disabling or catastrophic his injuries. What is the rational basis for any of these distinctions? If this Court can conceive for a rational basis for the arbitrary classifications of tort victims that have been established by its seriesofdecisions set forth above, then ithas rendered the important constitutional guarantee of "equal protectionl1meaningless, and no one in Montana is protected from the arbitrarywhims that creatediscrimination among its citizens. If the equal protection clause is so meaningless, then the legislature can decide that doctors can be sued, but that lawyers

are immune; that plumbers can be sued, but that carpenters are immune;and that women can be sued,but that men are immune. The ultimate test will be who has the most influential lobby at the legislature. To avoid such situations isexactly whywehave a constitution and a judicial branch of government. However, the majority has abdicated its responsibility to address this critical issue based

on speculation that plaintiffs were not that serious about it in the first place. On appeal, the plaintiffs have clearly raised the fact that they, as victims of abuse in a public school, are being treated differently than if they had suffered the same abuse in a private school. There is no question about the fact that if a four-yearold preschool studentwas sodomized and raped in a private school, sheand her family would be entitled toreasonable compensation for 18ths terril~lcphysical and enotional injuries that she had sustained. On appeal., the plaintiffs have asked this Court to justify that arbitrary class distinction. Tnis Court obviously cannot do so, and so, has, ineffect, told the plaintiffs, ''don't bother us with constitutional te~hnicalities.~~ It is ironicthatduringthesameyearthatMontana became the 48th statetohonor slaincivil rights symbol, Martin Luther King, Jr., this Court refuses to recognize the civil rights of its private citizenswhen inconflictwith local bureaucrats and their agents. I would accept this Court's obligatioi~to decide the constitutionality of 5 2-9-111, MCA, as it has heen applied, and I wculc? find that, 3s it has been applied, it violates the equal protectiol? clause of t21e P!~:?ta:la ~nc? federal Constitutions. For these reasons I dissent fron the majority opinion.

I concur inthe foregoing concurrence and dissent of JusticeJustice Karla M. Gray, concurring in part and dissenting in part.

I agree with the result of themajority opinion in remanding to the District Court for further proceedings in light of the availability of insurance coverage, although I disagree with its rationale in Crowell v. School Dist. No. 7 (Mont. 1991), 805 P.2d 522, 48 St.Rep. 81, that the availability of the coverage is predicated upon a waiver of immunity. I also agree with the majority's remand forconsiderationand determinationof the § 1983 claims. I must, however, respectfully dissent from the Court's interpretation of § 2-9-111,MCA, as it applies to this case and fromtheCourt's refusalto addresstheconstitutional issuebefore it. With regard to the immunity issue, I am not blind to the importance of precedent. However, I cannot assent to the application of this Court's precedents in the area of so-called legislative immunity as it relates to this case. For the Court to expand its previous holdings which were, in my view, legally incorrecttobegin with,toprovide immunity to

### an employee who (if the allegations herein are taken as true) rapes and sodomizes a four-year-old special education student on the basis that the employee was engaged in the lllawful discharge of an official duty associated with action by the legislative body" is beyond the bounds of reason, legal or otherwise. Finally, it is my view that the Court has an obligation to address the equal protection issue which is before it. Theclassifications which have resulted from the Court's immunity rulingsaretroubling,at best,andmay be constitutionallyinfirm. I have not determined whether I believe those classifications can meet the rational basis test. I am,however, convinced that it is time for the Court as a whole to address the question. If it is the Court's view that additional briefing or argument is needed, the Court need only direct such a course of action. We should not careen further down the immunity path without determining whether

we have been a party, through our interpretations of legislative enactments, to depriving the citizens of Montana of their constitutional rights.