Title: MASSETT v THE ANACONDA COMPANY
Citation: N/A
Docket Number: 80-153
State: Montana
Issuer: Montana Supreme Court
Date: June 22, 1981

No. 80-153 I N T H E SUPREME C O U R T O F THE STATE O F M O N T A N A 1981 HARRY J. MASSETT, P l a i n t i f f and Appellant, T H E ANACONDA COMPANY, and METROPOLITAN LIFE INSURANCE CO., Defendants and Respondents, Appeal from: D i s t r i c t Court o f t h e ThPrd J u d i c i a l D i s t r i c t , I n and f o r t h e County of D e e r Lodge, The Honorable Robert Boydr Judge p r e s i d i n g . Counsel o f Record: For Appellant; Greg J. Skakles argued, Anaconda, Montana For Respondents: Poore, Roth, Robischon & Robinson, Butte, Montana Robert A. Poore argued, B u t t e , Montana Submitted: ~ p r i l 2 4 , 1981 2 1961 F i l e d :-- M r . J u s t i c e Frank B. Morrison, Jr., d e l i v e r e d the Opinion of t h e Court P l a i n t i f f , Harry J. Massett, a long-time employee of t h e Anaconda Company, brought an a c t i o n on May 1 0 , 1976, a g a i n s t defendant Anaconda Company f o r an alleged breach of a c o l l e c t i v e bargaining agreement. After engaging i n disco- very, Anaconda moved f o r summary judgment. The Deer Lodge County D i s t r i c t Court granted the motion on February 2 2 , 1980. P l a i n t i f f appeals. For reasons discussed below, w e vacate the order of the D i s t r i c t Court granting summary judgment . P l a i n t i f f was employed by t h e Anaconda Company from 1944 t o 1975. H e contends t h a t he became unable t o work due t o i l l n e s s i n January of 1975. I n A p r i l o r May 1975, p l a i n t i f f f i r s t discussed t h e p o s s i b i l i t y of receiving a d i s a b i l i t y pension with Anaconda Company personnel. Section 2.2 of the pension plan provides pension b e n e f i t s f o r an employee who has become t o t a l l y disabled by bodily i n j u r y o r d i s e a s e so as t o be prevented "from engaging i n any s u b s t a n t i a l g a i n f u l work which, i n t h e opinion of a q u a l i f i e d physician appointed by the Employing Company, w i l l be permanent and continuous during t h e remainder of t h e Empl-oyee's l i f e t i m e " and which i s n o t s e l f - i n f l i c t e d , t h e r e s u l t of s e r v i c e i n the armed f o r c e s o r t h e r e s u l t of criminal a c t i v i t y . I n October of 1975, p l a i n t i f f applied f o r a d i s a b i l i t y pension f o r t h e f i r s t t i m e . P a r t of t h e a p p l i c a t i o n form supplied by the Company was t o be f i l l e d o u t by a physician. P l a i n t i f f took t h e form t o D r . John Romito who had been t r e a t i n g h i s condition. The form which D r . Romito completed contained an erroneous d e f i n i t i o n of t o t a l d i s a b i l i t y . I t defined the concept i n t e r m s of i n a b i l i t y due t o d i s e a s e o r bodily i n j u r y t o pursue any g a i n f u l employment o r occupation whatsoever. The medical - form contained a l t e r n a t e boxes f o r t h e examining physician t o check, specifying e i t h e r t h a t the p a t i e n t was o r was n o t t o t a l l y and permanently disabled. D r . Romito d i d n o t check e i t h e r box, but r a t h e r attached a note t o t h e form which read: " I do n o t f e e l t h i s p a t i e n t can be considered t o t a l l y disabled b u t he is n o t a b l e t o resume h i s normal employment a s a smelterman due t o exposure t o i n d u s t r i a l fumes." The Company processed t h e a p p l i c a t i o n f o r d i s a b i l i t y b e n e f i t s , b u t u l t i m a t e l y r e j e c t e d it i n November 1975. I n December 1975, p l a i n t i f f ' s a t t o r n e y requested new medical forms containing a c o r r e c t d e f i n i t i o n of t o t a l and permanent d i s a b i l i t y . Anaconda r e p r e s e n t a t i v e R. L. Brown provided those forms i n a l e t t e r dated January 5, 1976. O n t h e advice of counsel p l a i n t i f f came t o t h e Company's personnel o f f i c e on January 26, 1976, and spoke t o t h e Company r e p r e s e n t a t i v e , Harry McKernan. P l a i n t i f f t o l d McKernan t h a t he would l i k e t o receive a "conditional" 30- year retirement pension u n t i l such time a s he could reapply f o r and begin r e c e i v i n g b e n e f i t s under a d i s a b i l i t y pension. Under s e c t i o n 2.6 of t h e pension plan, any employee who has completed 30 years o r more of continuous s e r v i c e t o t h e Company b u t who has n o t a t t a i n e d t h e age of 60 may retire and r e c e i v e a so-called "30-year" pension. On December 30, 1975, p l a i n t i f f ' s a t t o r n e y had w r i t t e n McKernan a l e t t e r informing t h e Company t h a t he had advised h i s c l i e n t t o apply f o r t h e 30-year pension and t h a t t h e Company should n o t construe t h i s a p p l i c a t i o n a s a waiver of p l a i n t i f f ' s c l a i m t o a d i s a b i l i t y pension. P l a i n t i f f a s s e r t s t h a t h i s poor f i n a n c i a l condition and the Company's d e n i a l of h i s o r i g i n a l a p p l i c a t i o n f o r a d i s a b i l i t y pension n e c e s s i t a t e d h i s applying f o r a 30-year pension. P l a i n t i f f ' s r e t i r e m e n t became e f f e c t i v e February 1, 1976. O n February 6, 1976, D r . Robert Burroughs, a c a r d i o l o g i s t i n Spokane, Washington, completed a d i s a b i l i t y pension form containing t h e c o r r e c t d e f i n i t i o n of t o t a l d i s a b i l i t y and checked t h e box on t h e form i n d i c a t i n g t h a t p l a i n t i f f was t o t a l l y and permanently disabled. That medical form was re- mitted t o t h e Company on February 17, 1976. O n March 24, 1976, t h e Company responded t h a t , inasmuch a s p l a i n t i f f had v o l u n t a r i l y applied f o r and w a s receiving a 30-year pension, t h e question of h i s e l i g i b i l i t y f o r a d i s a b i l i t y pension had become "academic." The Company refused t o process t h e claim f o r d i s a b i l i t y b e n e f i t s . P l a i n t i f f then f i l e d t h e p r e s e n t action. The t r i a l c o u r t granted summary judgment t o t h e Anaconda Company because, i n its view, r e c e i p t of t h e 30-year pension barred a p p l i c a t i o n f o r a d i s a b i l i t y pension and f u r t h e r t h a t t h e p l a i n t i f f ' s f a i l u r e t o implement t h e c o n t r a c t ' s grievance procedure barred the maintenance of an a c t i o n i n t h e c o u r t s . The following i s s u e s a r e d i s p o s i t i v e of t h i s appeal: 1. May, under t h e t e r m s of t h e c o l l e c t i v e bargaining agreement, a r e t i r e e apply f o r a d i s a b i l i t y pension a f t e r he has been granted a 30-year pension i f he was disabled before he r e t i r e d ? 2. W a s the Company g u i l t y of bad f a i t h i n r e j e c t i n g p l a i n t i f f ' s claim f o r d i s a b i l i t y b e n e f i t s on grounds t h a t h i s r e c e i p t of a 30-year retirement barred a d i s a b i l i t y pension, thereby e n t i t l i n g the p l a i n t i f f t o bypass t h e grievance procedure and l i t i g a t e i n t h e D i s t r i c t Court? A t t h e o u t s e t , we note t h a t s u b j e c t matter j u r i s d i c t i o n over t h i s case d e r i v e s from s e c t i o n 301.(a) of t h e Labor Management R e l a t i o n s A c t of 1947 (LMRA) , (Taf t Hartley A c t ) , c o d i f i e d a t 29 U.S.C. §185(a). Although, g e n e r a l l y t h e National Labor R e l a t i o n s A c t preempts state and f e d e r a l c o u r t j u r i s d i c t i o n t o remedy conduct t h a t i s permitted o r p r o h i b i t e d by t h e A c t (San Diego Building Trades Counci.1 v. Garmon (1959), 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775), t h e r e a r e a number of s i g n i f i c a n t exceptions. S e c t i o n 301(a) of t h e L M R A e x p r e s s l y a u t h o r i z e s s u i t s i n f e d e r a l c o u r t f o r t h e enforcement of a c o l l e c t i v e bargaining agreement. Federal j u r i s d i c t i o n i s n o t , however, exclusive. I t has been s p e c i f i c a l l y h e l d t h a t s t a t e c o u r t s have concurrent j u r i s d i c t i o n under s e c t i o n 301 t o e n t e r t a i n a s u i t by an i n d i v i d u a l employee f o r breach of a c o l l e c t i v e bargaining agreement. Local 174 Teamsters Union et a l . v. Lucas Flour Co. (1962), 369 U.S. 95, 101, 82 S.Ct. 571, 7 L.Ed.2d 593; Charles Dowd Box Co. v. Courtney (1962), 368 U.S. 502, 82 S.Ct. 519, 7 L.Ed.2d 483. The s u b s t a n t i v e r u l e s governing t h e i n t e r p r e t a t i o n of c o l l e c t i v e bargaining agreements a r e c o n t r o l l e d by f e d e r a l law which t h e f e d e r a l c o u r t s must f a s h i o n from t h e p o l i c y underlying t h e n a t i o n a l l a b o r laws. T e x t i l e Workers Union v. Lincoln M i l l s (1957), 353 U.S. 448, ?idl 917- 1 8 456-457, 77 S.Ct. m, 1 L.Ed.2d 972, 980-981. The c o u r t s may, however, r e s o r t t o compatible s t a t e law t o f i n d t h e r u l e t h a t w i l l b e s t e f f e c t u a t e f e d e r a l p o l i c y . Li.ncol-n Mil-ls, supra, 1 L.Ed.2d a t 981. Except i n t h e r a t h e r narrow f i e l d of s u i t s t o compel performance of a r b i t r a t i o n agreements (see - United S t e e l - workers v. Warrior & Gulf Nav. Co. (1960), 363 U.S. 574, 578-579, 80 S.Ct. 1347, 4 L.Ed.2d 1409), w e have found no f e d e r a l a u t h o r i t y "suggesting t h a t t h e nebulous body of d e c i s i o n a l law envisioned i n Lincoln M i l l s was t o be formu- l a t e d i n derogation of t h e common law of c o n t r a c t s " , Lee Washington, Inc. v. Washington Motor Truck Transportation Employees Health and Welfare Trust (D.C. App. 1973), 310 A.2d 604. Hence, w e see no reason n o t t o apply t h e same r u l e s of construction i n cases involving c o l l e c t i v e bargaining c o n t r a c t s a s we apply i n cases dealing with c o n t r a c t law generally. See Clarke v. Ward Baking Co. (D.C.App. 1963), 191 A.2d 450, 452. W e t u r n now t o t h e f i r s t i s s u e r a i s e d by the p l a i n t i f f on appeal. The p l a i n language of s e c t i o n 2.2 of t h e pension plan e n t i t l e s an employee t o a d i s a b i l i t y pension i f he becomes t o t a l l y and permanently disabled and i f he has completed ten years of continuous s e r v i c e t o the Company. I n o t h e r words, a worker with the r e q u i s i t e number of years of s e r v i c e has a vested r i g h t t o a d i s a b i l i t y pension i f he can show t h a t he became disabled while employed with t h e Company. The record shows t h a t t h e p l a i n t i f f had logged well i n excess of t e n years of continuous s e r v i c e t o Anaconda a s of t h e d a t e he ceased working f o r the Company. P l a i n t i f f claims t o have become disabled while he was i n the employ of t h e Company. I f he can prove t h a t contention, he i s en- t i t l e d t o d i s a b i l i t y b e n e f i t s . The Company argues, however, t h a t t h e p l a i n t i f f rendered himself i n e l i g i b l e f o r any d i s a b i l i t y b e n e f i t s by applying f o r a 30-year pension. H e thereby relinquished h i s employ- ment s t a t u s , Anaconda argues, and became a "pensioner". Only employee^"^ t h e Company i n s i s t s , may apply f o r d i s a b i l i t y b e n e f i t s . W e disagree. P l a i n t i f f ' s acceptance of a 30-year pension does not c o n s t i t u t e an e l e c t i o n of remedies nor a waiver. A s a l e g a l d o c t r i n e , e l e c t i o n i s t h e e x e r c i s e of a choice of an a l t e r n a t e and i n c o n s i s t e n t r i g h t o r course of a c t i o n . F u l l knowledge of the nature of i n c o n s i s t e n t r i g h t s and of the n e c e s s i t y of choosing between them a r e elements of e l e c t i o n . Eckstein v. Caldwell (1938), 61 R . I . 142, 200 A. 434, 437 ( e l e c t i o n of remedies presupposes the knowledge of a l t e r n a t i v e s with an opportunity f o r c h o i c e ) ; Frederickson v. Nye (1924), 110 Ohio S t . 459, 1 4 4 N.E. 299, 301 ( i n order t h a t e l e c t i o n of one remedial r i g h t s h a l l bar another, t h e r i g h t s must be i n c o n s i s t e n t and the e l e c t i o n must be made with knowledge). P l a i n t i f f ' s a p p l i c a t i o n f o r a 30-year r e t i r e m e n t can i n no sense be understood a s an e l e c t i o n of one o u t of two p o t e n t i a l a l t e r n a t e remedies t o t h e d i s a b i l i t y he a l l e g e d l y suffered while on t h e job. The only d i s a b i l i t y - r e l a t e d remedy he sought was a d i s a b i l i t y pension. H i s claim t o the 30-year pension r e s t e d on a d i f f e r e n t f a c t u a l b a s i s , namely h i s 30 years of s e r v i c e t o t h e Company. I n s h o r t , t h e d o c t r i n e of e l e c t i o n of remedies does n o t apply f o r the simple reason t h a t t h e record r e v e a l s no a l t e r n a t e remedies from which t o e l e c t . I f t h e p l a i n t i f f was indeed disabled while he was s t i l l an employee with t h e Company, t h e only way he could l o s e h i s vested r i g h t t o a d i s a b i l i t y pension would be by waiving t h a t r i g h t . By d e f i n i t i o n waiver i s t h e i n t e n t i o n a l r e l i n - quishment of a known r i g h t . The record shows t h a t t h e p l a i n t i f f has n o t waived h i s claim t o a d i s a b i l i t y pension. H e expressly informed Anaconda r e p r e s e n t a t i v e McKernan t h a t he wanted t o take o u t a 30-year pension "conditionally" -- i.e., u n t i l he could begin receiving a d i s a b i l i t y pension. I n a d d i t i o n , h i s a t t o r n e y s e n t a l e t t e r t o t h e Company s t a t i n g t h a t h i s c l i e n t ' s a p p l i c a t i o n f o r a 30-year retire- ment, was n o t t o be understood a s a waiver of h i s claim t o d i s a b i l i t y b e n e f i t s . Clearly the p l a i n t i f f d i d n o t intend t o r e l i n q u i s h any r i g h t he may have had t o a d i s a b i l i t y pension. The mere f a c t t h a t t h e Company r e p r e s e n t a t i v e s contended t h a t r e c e i p t of one kind of pension precluded a p p l i c a t i o n f o r another kind d i d n o t deprive t h e p l a i n t i f f and h i s a t t o r n e y of the r i g h t t o i n t e r p r e t t h e provisions of t h e pension plan d i f f e r e n t l y . The p l a i n t i f f does n o t claim t h a t he i s e n t i t l e d t o t h e cumulative b e n e f i t s of both the d i s a b i l i t y and the 30-year pension. P l a i n t i f f seeks a d i s a b i l i t y pension because t h e b e n e f i t s a r e g r e a t e r than t h e b e n e f i t s a v a i l a b l e under t h e 30-year pension plan. He l a i d claim t o t h e 30-year pension "conditionally" and w i l l only be limited t o t h a t plan i f he cannot q u a l i f y f o r d i s a b i l i t y b e n e f i t s . The next i n q u i r y i s whether t h e Company acted i n good f a i t h i n refusing t o process the a p p l i c a t i o n . Anaconda re- jected t h e p l a i n t i f f ' s a p p l i c a t i o n because, i n i t s view, t h e p l a i n t i f f had v o l u n t a r i l y relinquished h i s employment s t a t u s and had become a "pensioner" by applying f o r a 30-year re- tirement. A s such, t h e Company contended p l a i n t i f f was no longer e l i g i b l e f o r a d i s a b i l i t y pension because under s e c t i o n 2.2 of the pension plan only "employees" a r e e l i g i b l e f o r d i s a b i l i t y . The e s s e n t i a l i n q u i r y i s whether Anaconda a s s e r t e d t h a t defense t o p l a i n t i f f ' s a p p l i c a t i o n i n good f a i t h . I f t h e Company acted i n bad f a i t h i n r e f u s i n g t o implement a r b i - t r a t i o n , then w e would allow the D i s t r i c t Court a c t i o n t o go forward without r e s o r t t o t h e procedure required by t h e col- l e c t i v e bargaining agreement. W e f i n d t h e record t o be devoid of any i n d i c a t i o n t h a t t h e Company acted i n bad f a i t h . There i s no evidence of any personal enmity towards, nor of any discrimination a g a i n s t , t h e p l a i n t i f f . W e have considered Anaconda's defense on the merits. Because we today disagree with t h e Company's l e g a l p o s i t i o n , does n o t mean t h a t t h e Company had no r i g h t t o a s s e r t t h a t p o s i t i o n . Where the record lacks any a f f i r m a t i v e evidence of bad f a i t h , w e w i l l n e i t h e r presume nor accept conclusory a s s e r t i o n s t h a t a l i t i g a n t ' s claim o r defense i s u n j u s t i f i e d unless it i s so p a t e n t l y f r i v o l o u s a s t o p l a i n l y exclude any reasonable m e r i t . H e r e we hold t h a t Anaconda's r e f u s a l t o process p l a i n t i f f ' s claim was made i n good f a i t h . The l e g a l question of p l a i n t i f f ' s e l i g i b i l i t y f o r bene- f i t s w a s a matter f o r j u d i c i a l determination. N o w t h a t t h e determination has been made, a r b i t r a t i o n procedures must follow. Section 5.2 of t h e pension plan provides a grievance procedure t o s e t t l e any medical d i s p u t e concerning an employee's e l i g i b i l i t y f o r d i s a b i l i t y pensions. Under t h a t s e c t i o n t h e Company must r e f e r any d i s p u t e concerning an a p p l i c a n t ' s d i s a b i l i t y t o a medical board f o r r e s o l u t i o n . Accordingly, w e remand the case t o the ~ i s t r i c t Court with d i r e c t i o n s t o order t h e Anaconda Company t o proceed with a r b i t r a t i o n . W e concur: Chief J u s t i c e M r . J u s t i c e Daniel J. Shea d i s s e n t s and w i l l f i l e a d i s s e n t i n g o p i n i o n later.