                                                                                        January 24 2012


                                          DA 11-0428

               IN THE SUPREME COURT OF THE STATE OF MONTANA
                                          2012 MT 13



ANACONDA PUBLIC SCHOOLS,
BOARD OF TRUSTEES OF
ANACONDA SCHOOL DISTRICT NO. 10,

              Petitioner and Appellant,

         v.

JAMES D. WHEALON,

              Respondent and Appellee.


APPEAL FROM:          District Court of the Third Judicial District,
                      In and For the County of Anaconda-Deer Lodge, Cause No. DV 10-41
                      Honorable Brad Newman, Presiding Judge


COUNSEL OF RECORD:

               For Appellant:

                      Brenda Wahler, Attorney at Law; Helena, Montana

               For Appellee:

                      Tony C. Koenig, Montana School Boards Association; Helena, Montana



                                                 Submitted on Briefs: December 14, 2011

                                                            Decided: January 24, 2012


Filed:

                      __________________________________________
                                        Clerk
Justice Jim Rice delivered the Opinion of the Court.

¶1    James D. Whealon (Whealon) appeals from an order of the Third Judicial District,

Anaconda-Deer Lodge County, which reversed the ruling of the State Superintendent of

Public Instruction and reinstated the County Superintendent’s summary ruling in favor of

Anaconda Public Schools, Board of Trustees of Anaconda School District No. 10

(District). We affirm. We address the following issues:

¶2    1. Did the District Court err in holding that a county superintendent has authority

to grant summary judgment?

¶3    2. Did the District Court err in reinstating summary judgment in favor of the

District?

¶4    3. Did the District Court err in failing to award attorney fees?

                 FACTUAL AND PROCEDURAL BACKGROUND

¶5    The District employed Whealon as district superintendent from July 1, 2000

through August 15, 2008, pursuant to a series of nearly identical employment contracts.

Whealon’s last contract covered the time period between July 1, 2006 and June 30, 2009,

although he retired on August 15, 2008. The contract provided, in pertinent part:

      2. TERM

      The BOARD, by and on behalf of the District, employs the
      SUPERINTENDENT, and the SUPERINTENDENT accepts employment
      as District Superintendent for the District for a term of three (3) years from
      July 1, 2006 to June 30, 2009.

                                        .   .   .


                                        2
      11. HEALTH, DISABILITY AND OTHER INSURANCE

      During the term of this Agreement, the District shall pay the premium for
      coverage for group health for the SUPERINTENDENT and dependents in
      accordance with the District’s plan of insurance on the same basis as other
      administrative employees of the District.

                                         .   .   .

      17. RETIREMENT, DEATH, DISABILITY

      This Agreement shall be terminated upon the death of the
      SUPERINTENDENT or upon the SUPERINTENDENT’S retirement . . . .

¶6    Upon retirement, Whealon asserted that, under the terms of his contract, he was

entitled to payment of his health insurance premiums by the District until he reached the

Medicare eligibility age of 65. Whealon’s successor, Tom Darnell (Darnell), advised

Whealon that he was not eligible for continued payment of his premiums by the District

and that Whealon would need to pay the premiums himself to maintain his health

insurance coverage. Whealon filed a formal grievance, which Darnell denied. Whealon

appealed to the District’s Board of Trustees, which also denied his claim.

¶7    Whealon appealed to the County Superintendent of Anaconda-Deer Lodge

County, and, after two substitutions of county superintendents, Rachel Vielleux

(Vielleux), County Superintendent of Missoula County, presided over the proceeding.

The District filed a motion for summary judgment, which Whealon opposed. Whealon

argued that summary judgment was inappropriate because there were issues of material

fact in dispute. He argued alternatively that if Vielleux concluded no issues of material

fact existed, then he was entitled to summary judgment rather than the District. Vielleux

                                         3
granted summary judgment to the District, holding that the language of the contract was

unambiguous and that Whealon was not entitled to the claimed benefits beyond the date

of his retirement.

¶8     Whealon appealed to the State Superintendent of Public Instruction, Denise

Juneau (Juneau). Juneau determined that entry of summary judgment is an inappropriate

disposition of an administrative appeal of a contested case under Title 10, chapter 6 of the

Administrative Rules of Montana. On the merits of the dispute, Juneau concluded, “[i]t

is certainly not clear if the language contained in Whealon’s employment contract

intended to include payment of insurance premiums after his retirement from the district.

The language in Whealon’s employment contract is ambiguous.”              Juneau therefore

reversed and remanded the case to Vielleux for an evidentiary hearing.

¶9     The District appealed Juneau’s decision to the Third Judicial District Court. After

briefing and oral argument, the District Court reversed Juneau’s ruling and reinstated

Vielleux’s ruling that the contract was unambiguous and that the District was entitled to

summary judgment. Whealon appeals. Further facts will be discussed herein.

                               STANDARD OF REVIEW

¶10    “Section 2-4-704, MCA, sets forth the statutory standards for judicial review of

administrative decisions.” In the Matter of the Proposed Disciplinary Treatment of the

Occupational Veterinarian’s License of Jeffrey C. Peila, 249 Mont. 272, 279, 815 P.2d

139, 144 (1991); In the Matter of the Fair Hearing of Hofer, 2005 MT 302, ¶ 12, 329

Mont. 368, 124 P.3d 1098. “This Court has interpreted § 2-4-704, MCA, to mean that an

                                         4
agency’s findings of fact are subject to a ‘clearly erroneous’ standard of review while an

agency’s conclusions of law will be upheld if the agency’s interpretation of law is

correct.” Peila, 249 Mont. at 279 (citing Steer, Inc. v. Dept. of Revenue, 245 Mont. 470,

474, 803 P.2d 601, 603 (1990)).

                                     DISCUSSION

¶11   1. Did the District Court err in holding that a county superintendent has authority

to grant summary judgment?

¶12   Whealon argues that Superintendent Juneau correctly held that summary judgment

is an inappropriate disposition in a contested case before a county superintendent, noting

that in L.O. v. Plentywood Sch. Dist. No. 20, OSPI 308-06 (2007), the Superintendent

“strongly discourage[d]” the practice of entering a decision without conducting an

evidentiary hearing.

¶13   The District responds that if no material facts are in dispute, an evidentiary hearing

would be redundant and unnecessary, as only questions of law would remain to be

decided by the county superintendent. In such cases, the District argues, “the County

Superintendent’s obligation under ARM 10.6.104 to ‘hear the appeal’ would be satisfied

by considering the parties’ opposing legal arguments on the questions of law to be

decided.” For purposes of this case, the District asserts that because Vielleux determined

the contract language was unambiguous, the intent of the parties was a question of law,

citing Wurl v. Polson Sch. Dist. No. 23, 2006 MT 8, ¶¶ 16-17, 330 Mont. 282, 127 P.3d

436 (“The construction and interpretation of a written contract is a question of law

                                         5
. . . when a contract term is ambiguous, interpretation of the term involves determining a

question of fact regarding the intent of the parties to the contract.” (citations omitted)).

¶14    Noting that both Admin. R. M. 10.6.104(3) and § 20-3-210(3), MCA, provide that

the county superintendent “shall hear the appeal and take testimony in order to determine

the facts” related to the controversy, the District Court reasoned:

       [A]n evidentiary hearing is not required under the Montana Administrative
       Procedure Act when there are no material facts in dispute. Rather, upon
       finding of a complete absence of disputed material facts, an administrative
       hearing officer may summarily dispose of the case by entering judgment as
       a matter of law based on such undisputed material facts. The same
       reasoning and rule of law applies to contested case hearings before county
       superintendents under Section 20-3-210, MCA, and ARM Chapter 10,
       part 6.

The District Court also noted Admin. R. M. 10.6.108, which requires the county

superintendent to conduct a prehearing conference to consider “the possibility of

obtaining admissions of fact and documents which will avoid unnecessary proof . . . [and]

such other matters as may aid in the disposition of the action,” as well as our decision in

Peila, 249 Mont. 272, 815 P.2d 139.

¶15    In Peila, we interpreted provisions of the Montana Administrative Procedure Act

(MAPA), specifically, § 2-4-601, MCA (“In a contested case, all parties must be afforded

an opportunity for hearing after reasonable notice”), and § 2-4-612, MCA (“Opportunity

shall be afforded all parties to respond and present evidence and argument on all issues

involved.”). Peila, 249 Mont. at 280-81, 815 P.2d at 144. Summary judgment was

granted by the Board of Horse Racing against Peila, and, on appeal, he argued that he had


                                           6
a right to an evidentiary hearing. Peila, 249 Mont. at 280, 815 P.2d at 144. We held that

entry of summary judgment by the Board without a hearing was appropriate:

       Procedural due process requires that parties be given reasonable notice and
       a reasonable opportunity to be heard; these due process requirements are
       reflected in MAPA in §§ 2-4-601, and 2-4-612(1), MCA. Section 2-4-
       612(1), MCA, provides that ‘[o]pportunity shall be afforded all parties to
       respond and present evidence and argument on all issues involved.”
       (Emphasis added.) However, due process does not require development of
       facts through an evidentiary hearing when there are no material factual
       issues in dispute.

Peila, 249 Mont. at 280-81, 815 P.2d at 144 (emphasis added) (citations omitted).

¶16    We agree with the District Court. Section 20-3-210, MCA, and Admin. R. M.

10.6.104, like the statutes at issue in Peila, are silent regarding summary disposition.

However, no purpose would be served by conducting an evidentiary hearing where there

is an absence of disputed material facts, as testimony is unnecessary. In such cases,

consistent with our ruling in Peila, a county superintendent may summarily dispose of a

case by entering summary judgment.

¶17    Whealon also argues the District Court erred by reasoning that he acquiesced to

summary disposition because he offered the alternative argument to the County

Superintendent that, if no material issues of fact existed, then he was entitled to summary

judgment. He argues he was entitled to plead alternatively under Rules 8(a) & (d), M. R.

Civ. P., and that “[a]ppellant simply made a standard alternative argument before the

County Superintendent of School and in doing so did not forfeit his right to

simultaneously maintain that there were disputed issues of material fact.” Whealon is

correct that such alternative pleading is permitted and that he retained the right to argue
                                         7
on appeal that issues of fact precluded summary judgment. However, Whealon misses

the District Court’s point, which is that he argued for the first time on appeal that the

County Superintendent was without authority to enter a summary disposition, despite

requesting that very relief from the County Superintendent. The District Court did not err

in reasoning that Whealon’s cross motion for summary judgment before the County

Superintendent, without more, acquiesced in the County Superintendent’s authority to

enter a summary disposition. See Peila, 249 Mont. at 281, 815 P.2d at 145 (“There were

no material factual issues in dispute in the present case . . . . In addition, the appellant

himself moved for summary judgment, thereby acquiescing to a summary disposition of

the proceedings.”).

¶18    2. Did the District Court err in reinstating summary judgment in favor of the

District?

¶19    We turn to the merits of the entry of summary judgment. The dispute between the

parties centers on whether Paragraph 11 of the Agreement is ambiguous. It states:

       11. HEALTH, DISABILITY AND OTHER INSURANCE

       During the term of this Agreement, the District shall pay the premium for
       coverage for group health for the SUPERINTENDENT and dependents in
       accordance with the District’s plan of insurance on the same basis as other
       administrative employees of the District.

¶20    Whealon argues that the phrases “in accordance with the District’s plan of

insurance” and “on the same basis as other administrative employees of the District”

render the contract ambiguous because extrinsic or parol evidence must be considered to

determine the District’s plan of insurance and the identity of the other administrative
                                         8
employees. The District counters that the meanings of these phrases are uncontested but

that, more importantly, these phrases are irrelevant. Because paragraph 11 states that

“[d]uring the term of this Agreement, the District shall pay the premium for coverage

. . .,” Whealon’s eligibility for this benefit ended when the Agreement’s term ended.

Paragraph 17 provides that the superintendent’s retirement terminates the Agreement.

¶21   “[W]hether an ambiguity exists in a contract is a question of law.” Mary J. Baker

Revocable Trust v. Cenex Harvest States, Coops., Inc., 2007 MT 159, ¶ 19, 338 Mont. 41,

164 P.3d 851; Wurl, ¶ 17. “An ambiguity exists where the language of a contract, as a

whole, reasonably is subject to two different interpretations.” Wurl, ¶ 17. If the court

finds that contract language is ambiguous, it may consider extrinsic or parol evidence to

resolve the ambiguity.    See § 28-2-905, MCA; Baker Revocable Trust, ¶¶ 19-21.

However, if the court finds the language to be unambiguous, then the plain language of

the contract will govern, and the court can look no further. Wurl, ¶ 16 (“where a

contract’s terms are clear and unambiguous, a court must apply the language as written.”)

(citations omitted). Under MAPA, administrative agencies are bound by common law

and statutory rules of evidence. Section 2-4-612(2), MCA.

¶22   We agree with the District Court’s determination that the language of the

Agreement governing this dispute is unambiguous and that the District is entitled to

judgment. Because the language is not reasonably subject to two interpretations, we need

not, and must not, look to extrinsic evidence. The term of the Agreement was from

July 1, 2006 until Whealon’s retirement on August 15, 2008.        Paragraph 11 of the

                                        9
Agreement states that, “During the term of this Agreement, the District shall pay the

premium for coverage for group health for [Whealon] . . . .” (Emphasis added.) This

language can only mean that the District would pay Whealon’s health insurance

premiums from July 1, 2006 to August 15, 2008, and not beyond that time period. The

other specifics of the benefit that may be governed by the phrases “in accordance with the

District’s plan of insurance” and “on the same basis as other administrative employees of

the District” became irrelevant upon Whealon’s retirement because the Agreement

terminated at that time, and his eligibility for the benefit ceased altogether.

¶23    3. Did the District Court err in failing to award attorney fees?

¶24    Whealon asserts that he is entitled to attorney fees for the portion of this action

that constitutes a “suit at law” citing to Talon Plumbing and Heating v. Mont. Dept. of

Lab. and Indus., 2008 MT 376, ¶ 24, 346 Mont. 499, 198 P.3d 213.

¶25    Whether or not a party is entitled to attorney fees is strictly a question of law, and

we will review the district court’s grant or denial of attorney fees for correctness. Avanta

Fed. Credit Union, 2009 MT 458, ¶ 22, 354 Mont. 372, 223 P.3d 863. Ordinarily,

attorney fees are not awarded in contract disputes absent contractual or statutory

authority. Boehm v. Cokedale, 2011 MT 224, ¶ 26, 362 Mont. 65, 261 P.3d 994.

¶26    The contract in this case does not contain an attorney fees provision, and no

statutory authority exists for an award of attorney fees incurred in seeking judicial review

of a decision by the Superintendent of Public Instruction. The District Court did not err

in denying Whealon’s claim for attorney fees.

                                          10
¶27   The District Court is affirmed.



                                             /S/ JIM RICE


We concur:


/S/ BRIAN MORRIS
/S/ PATRICIA COTTER
/S/ BETH BAKER
/S/ JAMES C. NELSON




                                        11
