                                                                                                 07/19/2016


                                           DA 15-0441
                                                                                             Case Number: DA 15-0441

              IN THE SUPREME COURT OF THE STATE OF MONTANA
                                          2016 MT 175



LARRY REINLASODER,

               Plaintiff, Appellee,
               and Cross-Appellant,

         v.

CITY OF COLSTRIP,

               Defendant, Appellant,
               and Cross-Appellee.


APPEAL FROM:           District Court of the Thirteenth Judicial District,
                       In and For the County of Yellowstone, Cause No. DV 14-0340
                       Honorable Russell C. Fagg, Presiding Judge


COUNSEL OF RECORD:

                For Appellant:

                       Michael J. Lilly, Bridget W. leFeber, Bert, Lilly, Tollefsen, P.C.;
                       Bozeman, Montana

                For Appellee:

                       William A. D’Alton, D’Alton Law Firm, P.C.; Billings, Montana



                                                     Submitted on Briefs: June 8, 2016

                                                                  Decided: July 19, 2016


Filed:

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

¶1     The City of Colstrip (Colstrip) appeals from the denial of its motions for judgment

as a matter of law and a new trial by the Thirteenth Judicial District Court, Yellowstone

County. Larry Reinlasoder (Reinlasoder) cross-appeals the District Court’s grant of

Colstrip’s motion to amend the judgment. We reverse and remand for entry of judgment

in favor of Colstrip, and do not reach the cross-appeal.

¶2     Because it is dispositive, we address only the following issue:

       Did the District Court err by denying Colstrip’s motion for judgment as a matter
       of law where Reinlasoder failed to contest that he had sexually harassed an
       employee?

                 PROCEDURAL AND FACTUAL BACKGROUND

¶3     “You ain’t getting s--- for Christmas! I’ve just examined your computer and it’s

full of porn, you f------ pervert,” read a captioned picture of Santa Claus attached to a

December 2007 office email from Reinlasoder, one of many instances of misconduct

cited by Colstrip when it discharged Reinlasoder from his position as Colstrip’s Chief of

Police on May 22, 2012. Reinlasoder had held the position since May 17, 2004.

¶4     Reinlasoder sued Colstrip for wrongful discharge. In defense, Colstrip contended

it had fired Reinlasoder for good cause.         Colstrip alleged numerous instances of

misconduct by Reinlasoder that violated Colstrip’s employment policy manual, including

the December 2007 email, a September 2009 email which contained “pornographic

pictures of men and women in various stages of sexual intercourse,” lying about his work

history on his job application, an accusation of Criminal Mischief by the Rosebud County

                                             2
Sheriff’s Office, insubordinate conduct, intimidating a female dispatcher to the point that

she “no longer [felt] comfortable in dispatch without someone else being present,” and,

finally, sexual harassment of a female dispatcher.              Colstrip’s notice and letter of

termination given to Reinlasoder stated that he was “in violation of the City’s work

environment-discrimination policy, in which the City will not tolerate verbal or physical

conduct by any employee which harasses, discriminates, disrupts, or interferes with

another employee’s work performance or which creates an intimidating, offensive, or

hostile environment.”

¶5     At trial, Reinlasoder introduced a letter from Mercedes Kroll (Kroll), a Colstrip

dispatcher, to Mayor Rose Hanser (Hanser). The letter complained about statements

Reinlasoder had made to Kroll. The letter stated that Reinlasoder had asked Kroll, “Do

you want to come see my porn in my office?” When Kroll declined the invitation,

Reinlasoder responded, “You look like a freaky kind of girl that would like porn.” When

called to testify at trial, Kroll reiterated the incident as stated in the letter.

¶6     Reinlasoder introduced a second document that corroborated Kroll’s version of

this event. The second document was a witness statement written by Officer Cory Hert

(Hert). Hert stated he was present during the incident in question, and that Reinlasoder

had asked Kroll, “Would you like me to send you some of my internet porn? You look

like you would enjoy it; you’re kind of freaky that way, aren’t you?” When called to

testify, Hert reiterated the incident as stated in his statement.




                                                 3
¶7     Officer Michael Hayes’ (Hayes) video deposition was then introduced. Hayes

witnessed the incident between Reinlasoder and Kroll. Hayes testified that he “overheard

[Reinlasoder] saying that [Kroll] looked like the freaky kind of girl and that she might

enjoy watching pornography with him. He had invited her to go back to his office to

watch pornography on his computer.”

¶8     When asked what he thought about the allegations, Reinlasoder believed he “may

have said something,” but couldn’t “recall making that statement” because he “[didn’t]

remember.”

¶9     On cross-examination, Kroll admitted she had originally stated in her deposition

that the incident occurred on February 29, 2012, but that her written statement asserted it

occurred on March 6, 2012.

¶10    Colstrip moved for judgment as a matter of law, pursuant to Montana Rule of

Civil Procedure 50(a), at the close of Reinlasoder’s case. Colstrip argued Reinlasoder’s

uncontested sexual harassment of Kroll constituted good cause for termination as a matter

of law.   The District Court denied the motion.         The jury returned a verdict for

Reinlasoder, awarding him $300,000 in damages. Colstrip made a renewed motion for a

judgment as a matter of law, pursuant to Montana Rule of Civil Procedure 50(b), which

the District Court also denied. The District Court granted Colstrip’s motion to amend the

judgment, offsetting unemployment benefits received by Reinloasoder in the amount of

$12,068 from the jury’s award.




                                            4
¶11    Sometime before trial, Kroll filed a complaint with the Human Rights Bureau

against Colstrip for Reinlasoder’s sexual harassment. After the Human Rights Bureau

found reasonable cause to move forward with Kroll’s complaint, Kroll and Colstrip

settled.

                               STANDARD OF REVIEW

¶12    We review the denial of a motion for judgment as a matter of law de novo.

Johnson v. Costco Wholesale, 2007 MT 43, ¶ 18, 336 Mont. 105, 152 P.3d 727.

Judgment as a matter of law is properly granted only when there is a complete absence of

any evidence which would justify submitting an issue to a jury. Johnson, ¶ 13. All such

evidence and any legitimate inferences that might be drawn from the evidence must be

considered in the light most favorable to the party opposing the motion. Johnson, ¶ 13.

However, mere denial or speculation does not create an issue of fact. Johnson, ¶ 28.

Judgment as a matter of law is not proper if reasonable persons could differ regarding

conclusions that could be drawn from the evidence. Johnson, ¶ 13.

                                      DISCUSSION

¶13 Did the District Court err by denying Colstrip’s motion for judgment as a matter
of law where Reinlasoder failed to contest that he had sexually harassed an employee?

¶14    Sections 39-2-901 through -915, MCA, set forth the provisions of the “Wrongful

Discharge From Employment Act.” A discharge is wrongful if it is not for good cause.

Section 39-2-904(1)(b), MCA.       “Good cause” is defined as “reasonable job-related

grounds for dismissal based on a failure to satisfactorily perform job duties, disruption of

the employer’s operation, or other legitimate business reason.” Section 39-2-903(5),
                                             5
MCA. We have defined “a legitimate business reason” as a reason that is not false,

whimsical, arbitrary, or capricious, and one that must have some logical relationship to

the needs of the business. Davis v. State, 2015 MT 264, ¶ 10, 381 Mont. 59, 357 P.3d

320 (citing Buck v. Billings Mont. Chevrolet, 248 Mont. 276, 281-82, 811 P.2d 537, 540

(1991)). In applying this definition we have stressed the importance of the “right of an

employer to exercise discretion over who it will employ and keep in employment.”

Davis, ¶ 10 (internal quotation and citation omitted).       The balance between the

employer’s discretion and “the employee’s equally legitimate right to secure

employment . . . should favor an employee who presents evidence, and not mere

speculation or denial, upon which a jury could determine that the reasons given for his

termination were false, arbitrary or capricious, and unrelated to the needs of the

business.” Kestell v. Heritage Health Care Corp., 259 Mont. 518, 526, 858 P.2d 3, 8

(1993). We have explained that an employer’s discretion is at its greatest when the

discharged employee is in a management position. Sullivan v. Cont’l Constr. of Mont.,

LLC, 2013 MT 106, ¶ 18, 370 Mont. 8, 299 P.3d 832. A chief of police is responsible for

managing an entire police department. Section 7-32-4105, MCA.

¶15   At trial, Reinlasoder factually contested many of Colstrip’s allegations. However,

such factual disputes do not render judgment as a matter of law inappropriate where there

are facts not in dispute that provide “good cause” for discharge from employment. Davis,

¶ 14. Kroll’s testimony, corroborated by two other officers, established she was sexually

harassed by Reinlasoder when, in the workplace, he invited her to view pornography with

                                           6
him because he thought she looked like “a freaky kind of girl that would like porn.”

When Reinlasoder was given the opportunity to deny that this sexual harassment took

place, he repeatedly stated he “could not recall.” Reinlasoder’s equivocation does not

create a material issue of fact. Johnson, ¶ 28.

¶16    In his briefing, Reinlasoder argues that his cross-examination of Kroll created a

material issue of fact with regard to the sexual harassment incident. First, Reinlasoder

argues Kroll stated in her deposition that the incident occurred on February 29th, but her

letter stated it occurred on March 6th. However, Reinlasoder fails to articulate how this

inconsistency created an issue of material fact. The crucial material fact was whether

Reinlasoder made the comments to Kroll. Reinlasoder’s questions on cross-examination

did not dispute that the sexual harassment occurred, but only whether it occurred on

February 29th or March 6th.

¶17    Second, Reinlasoder argues that, while Kroll testified the Human Rights Bureau

found reasonable cause to proceed with Kroll’s complaint, the complaint had nonetheless

been settled before it was adjudicated in a hearing. Again, Reinlasoder fails to articulate

how this testimony created an issue of material fact about the harassment incident. That

the Human Rights Bureau was precluded by settlement from determining in its process

whether Reinlasoder had committed sexual harassment does not contradict the testimony

of Kroll, Hert, and Hayes that the incident actually occurred.

¶18    The uncontested evidence showed Reinlasoder sexually harassed Kroll.

Reinlasoder failed to meet his burden of presenting evidence, “and not mere speculation,”

                                             7
Kestell, 259 Mont. at 526, 858 P.2d at 8, contesting the allegation. Sexual harassment is

unquestionably a “legitimate business reason” or “reasonable job-related grounds for

dismissal” that satisfies the “good cause” standard contained in § 39-2-903(5), MCA.

See Barbara Foster v. Albertson’s, Inc., 254 Mont. 117, 127, 835 P.2d 720, 726 (1992)

(“Sexual harassment is against public policy.”).    Judgment as a matter of law was

therefore appropriate because the undisputed facts precluded Reinlasoder from

establishing the crucial element of his wrongful discharge claim, an absence of “good

cause.” Davis, ¶ 14.

¶19   The amended judgment is reversed and this matter is remanded for entry of

judgment in favor of Colstrip.



                                               /S/ JIM RICE


We concur:

/S/ MIKE McGRATH
/S/ PATRICIA COTTER
/S/ LAURIE McKINNON
/S/ MICHAEL E WHEAT




                                           8
