                                  No. 84-550
                IN THE SUPREME COURT OF THE STATE OF MONTANA
                                         1985



SCHOOL DISTRICT NO. 1 and A,
CASCADE COUNTY,
                           Petitioner and Respondent,


MONTANA DEPARTMENT OF LABOR
and INDUSTRY, GAIL HAHN, TERRY
THOMPSON, et a1 ,  . Respondents and Appellants.




APPEAL FROM:     District Court of the Eighth Judicial District,
                 In and for the County of Cascade,
                 The Honorable Joel G. Roth, Judge presiding.

COUNSEL OF RECORD:

         For Appellants:
                 Hilley & Loring, Great Falls, Nontana
                 James Gardner, Dept. of Labor & Industry,
                 Helena, Montana
         For Respondent :
                 Waite, Schuster    &   Larson, Great Falls, Montana



                                  Submitted on Briefs:     March 7, 1985
                                                Decided:   July 11, 1985


Filed:    $A I. f 1985
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.

      Appellants appeal an order of the District Court of the
Eighth     Judicial   District,    Cascade   County,    denying   their
motion for summary judgment, granting the School District's
motion for summary judgment and finding appellants ineligible
for unemployment compensation during the summer of 1981.             We
affirm.
      The School District planned a district-wide reduction
in its teaching staff in the spring of 1981.           It notified the
six individual appellants in March, 1981 that their teaching
contracts would not be renewed for the 1981-1982 school year.
Each of the appellants immediately challenged the non-renewal
either through the grievance procedure in their collective
bargaining agreement or in a proceeding before the Cascade
County     Superintendent of      Schools using   the    procedure   in
section 20-4-204, MCA.       Eventually all six appellants were
reinstated with back-pay, the right to full advancement on
the salary schedule and no loss of seniority, tenure rights
or benefits as a result of their challenge.                 Those who
expended    funds looking for other teaching positions during
the summer, were reimbursed for those costs by the School
District if they requested it.
      The appellants individually applied          for unemployment
compensation during the summer of 1981.           They were eligible
for and received benefits at that time pursuant to section
39-51-2108, MCA.       This dispute concerns repayment of the
benefits received during those months.
      Gail Hahn was rehired by the School District, on a
part-time basis, on August 25, 1981 and           three weeks later,
became a full-time teacher.        She stopped drawing unemployment
c o m p e n s a t i o n when     rehired.          Terry       Thompson        was    rehired       on

September           21,         1981     and       stopped         drawing           unemployment

compensation.              Howard Hahn was r e h i r e d on a p a r t - t i m e                  basis

on        August          22,      1981,          stopped         drawing            unemployment

compensation,             and    became       full-time        t w o weeks       later.           John

Chase was r e h i r e d by t h e S c h o o l D i s t r i c t i n l a t e J u l y ,                1981

on    a    part-time        basis      and     f i l e d no c l a i m s    f o r unemployment

c o m p e n s a t i o n a f t e r J u l y 25, 1981.        J a n i s Storm was r e h i r e d i n

February o f         1982.        A f t e r h e r r e t u r n an a r b i t r a t o r ruled she

had b e e n t e r m i n a t e d i n v i o l a t i o n o f t h e c o l l e c t i v e b a r g a i n i n g

a g r e e m e n t and o r d e r e d    reinstatement            and back-pay.               She h a s

repaid       t o t h e S t a t e t h e unemployment c o m p e n s a t i o n                s h e drew

after       August      26,      1981,      the    period       f o r which       she      received

back-pay.           Carl        Rosenleaf      was t h e o n l y o n e o f t h e s i x n o t

r e c a l l e d v o l u n t a r i l y by t h e S c h o o l D i s t r i c t .     On March 3 1 ,

1982 an a r b i t r a t o r o r d e r e d h i s r e i n s t a t e m e n t w i t h b a c k pay t o

August       26,   1981.          H e h a s r e p a i d t h e S t a t e t h e unemployment

c o m p e n s a t i o n r e c e i v e d s i n c e August 2 6 ,      1981, t h e p e r i o d f o r

which h e r e c e i v e d back-pay.               When t h e S c h o o l D i s t r i c t r e h i r e d

the       five teachers,          except Rosenleaf,              t h e y w e r e k e p t on t h e

School D i s t r i c t ' s p a y r o l l w i t h t h e i r o r i g i n a l d a t e s o f h i r e .

Rosenleaf,          reinstated           by       the    arbitrator,           also        has     his

o r i g i n a l d a t e of h i r e .

           I n O c t o b e r 1 9 8 2 , t h e Unemployment I n s u r a n c e D i v i s i o n o f

Montana ' s        Department          of     Labor      and     Industry        notified          the

appellants          that        all    unemployment            compensation            should      be

r e p a i d d u e t o t h e i r r e i n s t a t e m e n t s and back-pay          awards.         All

six       appellants        challenged         the      demand.         There        was    also     a

q u e s t i o n on w h e t h e r G a i l Hahn and J a n i s Storm t i m e l y                    filed

t h e i r r e q u e s t f o r review.
        After that review, the Appeals Referee determined that
five of the appellants did not have to repay the summer
unemployment compensation.              The Referee also ruled that since
Janis Storm had not filed a timely appeal, the determination
as to her overpaid benefits would stand.                    The Board of Labor
Appeals       affirmed    the     Referee's       decision        that   the     five
teachers would not have to repay the summer benefits and
reversed      the decision        regarding Janis Storm.                 The Board
concluded that the untimeliness of her appeal was immaterial
and excusable under the circumstances and ruled that none of
the     appellants       had     to     repay     the    summer      unemployment
compensation they had received.
        The    School District appealed             to the District Court
which reversed the decision of the Board of Labor Appeals.
Appellants and the School District agreed that there were no
facts in dispute and made motions for summary judgment.                          In a
memorandum decision and order filed November 15, 1984, the
District Court ruled             that, as a matter of law, the six
teachers were ineligible for unemployment compensation during
the     summer    of     1981     in    accordance       with     the    statutory
provisions of section 39-51-2108, MCA.                      The District Court
also    noted    that    this        ruling   rendered      the     issue of     the
timeliness of the appeal of two teachers moot.
        The issue on appeal is whether the District Court erred
in    concluding that          the     six appellants had           to   repay   the
unemployment compensation they received during the summer of
1981.
        Section     39-51-2108, MCA             provides    that     benefits        to
teachers "may not be paid to an individual for any week of
unemployment which          begins       during    the     period    between     two
successive       academic       years   . . . if    the     individual         has   a
contract        t o perform          s e r v i c e s i n any s u c h c a p a c i t y         f o r any

such       educational            institution             for        both         such     academic

years.       ..     "
          The a p p e l l a n t s a r g u e t h a t ,     a t t h e t i m e they received

benefits,        t h e y d i d n o t h a v e a renewed t e a c h i n g c o n t r a c t f o r

t h e f o l l o w i n g y e a r and t h u s w e r e e l i g i b l e f o r t h o s e b e n e f i t s .

The     School       District         contends        that        appellants          were        fully

r e i n s t a t e d and w e r e i n e x a c t l y t h e same s t a t u s a s i f r e n e w a l

c o n t r a c t s had   been     offered        t o them         i n the      spring of           1981.

Thus,        appellants              were        ineligible             for          unemployment

compensation.              The       School     District         does       not     dispute       that

appelLants         were       eligible        for     the       benefits           when    received

d u r i n g t h e summer o f 1981.

         The      main        considerations             in     this     case        concern        the

d i f f e r e n c e between " r e h i r e d " and " r e i n s t a t e d " and w h e t h e r t h e

f a c t s a r e viewed o n l y from t h e p o i n t i n t i m e o f t h e s p r i n g o f

1.981 o r a r e viewed from t h e t i m e o f t h e h e a r i n g .                   Teachers i n

t h e School D i s t r i c t have been r e h i r e d o r v o l u n t a r i l y r e c a l l e d

after     termination           at    o t h e r times         and w e r e n o t      required        to

r e p a y unemployment b e n e f i t s r e c e i v e d d u r i n g t h e t i m e o f t h e i r

unemployment.            The a p p e l l a n t s h e r e w e r e r e i n s t a t e d and made

whole w i t h no l o s s o f wages, s e n i o r i t y , t e n u r e r i g h t s o r any

other benefits,            u n l i k e t e a c h e r s who w e r e r e h i r e d .         The f u l l

r e i n s t a t e m e n t of a p p e l l a n t s p u t them i n t h e same p o s i t i o n a s

i f t h e y had c o n t r a c t s i n March 1 9 8 1 f o r t h e f o l l o w i n g y e a r .

This      amounts        to    more       than      merely           being        rehired.          The
reinstatement            relates        back,       in        effect,        to     time     of     the

termination          and      appellants         " [have!        a    contract        to     perform

services       ...       for     both       such      academic          years."              Section

39-51-2108,        MCA.
          Section            39-51-2108,            MCA      focuses        on     the        teacher's

continuing                contract         status           rather        than       earnings           in

determining               whether        he     or     she     is     eligible            for       summer

unemployment              benefits.             Other       courts    interpreting               similar

statutes           a l s o recognize          that      status       is    controlling.              They

hold     that        if    t h e claimant has a               reasonable          assurance o r a

r e a s o n a b l e e x p e c t a t i o n o f r e t u r n i n g t o work a f t e r t h e b r e a k

between            two       academic           terms,       unemployment                compensation

b e n e f i t s w i l l be denied.               R e c e i p t o f wages d u r i n g t h e b r e a k

is     not     a      factor.            See,       e.g.,    Friedlander            v.       Employment

Division           (0r.App.        1 9 8 4 ) , 6 7 6 P.2d      314;       P a t r i c k v.    Board o f

Review         (N.J.App.            1979),          409      A.2d     819;        and        Davis      v.

Commonwealth Unemployment Compensation Board o f Review                                               (Pa.

1978),        394         A.2d     1320.             With     reinstatement,                 appellants

regained           the     continuing contract                s t a t u s t h e y had         initially

lost.        T h e i r s t a t u s i s t h e same a s i f t h e c o n t r a c t s had been

renewed i n t h e s p r i n g o f 1 9 8 1 and t h e y had r e c e i v e d no summer

wages a s a r e s u l t of t h a t s t a t u s .               Thus a p p e l l a n t s '       argument

t h a t t h e y s h o u l d n o t have t o r e p a y t h e summer unemployment

b e n e f i t s b e c a u s e no back-pay was a t t r i b u t a b l e t o t h o s e months

must f a i l .

          W e recognize             t h a t the case a t bar d i f f e r s                from t h o s e

cited        above.              Here,     appellants          were        eligible          when     they

i n i t i a l l y s o u g h t b e n e f i t s and s u b s e q u e n t e v e n t s a f f e c t e d t h a t

initial eligibility.                      However, a p p e l l a n t s a r e p r e c l u d e d from

arguing t h a t            subsequent e v e n t s never a f f e c t e l i g i b i l i t y f o r

unemployment               benefits.                Those      appellants           who         received

benefits           for      part     of       the     fall     1981        academic          term    were

required t o repay o r v o l u n t a r i l y repaid t h e p o r t i o n of                             the

benefits           received         for       that     term,        even     though          they    were

eligible           f o r t h o s e b e n e f i t s when r e c e i v e d .          The s u b s e q u e n t
reinstatement affected their fall eligibility and appellants
cannot argue the subsequent reinstatement could not affect
their summer eligibility.
     We therefore hold that the District Court correctly
interpreted section 39-51-2108, MCA and correctly required
that the six individual appellants must repay unemployment
compensation received for the summer of 1981 and affirm the
ruling of the District Court.




We concur:   7




Justices
M.r. Justice William E. Hunt, Sr, dissenting:


        T dissent and would reverse.
        Section 39-51-2108, MCA, states that benefits may not be
paid during the period between successive academic years if
the individual has a contract for both years.           The important
part of this statute that applies here is "if the individual
has a contract for both years."
     The individuals had no contract for both years.                 They
had been advised that their contracts would not be renewed
for the following year.             Because they had no contract they
were properly eligible and properly paid benefits during the
period.
     The majority now holds that these proper payments are
"improper" because        subsequent reinstatement relates back.
The individuals are, therefore, to be placed in the same
position    as   if    they   had    contracts   for both   years.      I
disagree.
     The benefits were properly paid and they cannot now be
made to be improper.          No contract existed for the required
"both years" during the relevant period and it cannot now be
made to exist.        Whether the individuals here were "re-hired"
or "reinstated,'I or whether the contracts were "renewed," it
i.s inescapable that no contract existed during the period in
which benefits were paid.            Absent an existing contract for
the requisite "both years,"            $   39-51-2108 simply does not
apply    to prohibit payment of benefits and            it cannot be
applied to require the individuals to now reimburse for the
benefits properly paid.
