                             NO.    94-362
           IN THE SUPREME COURT OF THE STATE OF MONTANA

                                   1995

MONTE BRIDGEWATER,
          Plaintiff and Appellant,
     v
STATE OF MONTANA, DEPARTMENT
OF INSTITUTIONS
          Defendant and Respondent.




APPEAL FROM:   District Court of the Third Judicial District,
               In and for the County of Anaconda-Deer Lodge,
               The Honorable Ted L. Mizner, Judge presiding.


COUNSEL OF RECORD:

          For Appellant:

               Leonard J. Haxby, Butte, Montana

          For Respondent:

               James M. Scheier,      Department    of   Justice,   Helena,
               Montana



                            Submitted on Briefs:         February 16, 1994

                                             Decided:    August 25, 1995
Filed:
Justice James C. Nelson delivered the Opinion of the Court.


        Appellant,           Monte Bridgewater,       filed a complaint against the

State of Montana Department of Institutions and the Superintendent

of the Montana State Mental Hospital, Jane Edwards, on November 26,

1990,      claiming defamation of character and against the State of
Montana Department of Institutions claiming constructive discharge

from      employment.             The Montana Third Judicial District Court,

Anaconda-Deer Lodge County, granted Jane Edwards' Rule 12(b) (6)
motion to dismiss, finding her immune from liability under § 2-9-

305, MCA.             The District Court also granted the State's motion for

summary judgment on the constructive discharge claim and granted

the State's motion for summary judgment on all but one of the
defamation             claims.    The Appellant appeals the District Court's June

23, 1993 order granting partial summary judgment.                      We affirm.
                                             ISSUES

We address the following issues on appeal:

        I. Did the District Court err in granting summary judgment on

the constructive discharge claim?

         I I .    Did the District Court err in granting summary judgment

on all but one of the defamation claims?

                                           BACKGROUND
        Appellant was an employee of the Montana State Mental Hospital

(Hospital).                Accordingly,    his employment with the Hospital was

covered          by    a    collective    bargaining    agreement   (CBA) between the

State of Montana and the Warm Springs                       Independent     Union   Local

#5070,       MFSE,         AFT,   AFL-CIO,    and   the   Montana   State    Hospital.
                                                2
Appellant suffered a job-related injury in 1985 while working at

the Hospital.         As a result of the job injury, he took a number of
extended leaves of absence which resulted in his being absent from

work for a substantial period of time.
        In 1989,      the    Hospital    conducted        an     internal    investigation
regarding allegations that Appellant provided prescription and non-

prescription drugs to patients and violated hospital policy.                            The
Hospital suspended Appellant without pay while the Deer Lodge

County Attorney continued the investigation. The Deer Lodge County

Attorney        ultimately   advised    the         Department    of   Institutions    that
there     may have been criminal                    conduct but she did not find
sufficient evidence to prove a case beyond a reasonable doubt.

Jane Edwards suspended Appellant for two weeks, reassigned him to
another work area,           and placed him on probation for a six-month
period.         On May 11, 1989, Appellant filed a grievance concerning

his suspension but returned to work on July 31, 1989.                             On August

38,     1989,     Appellant filed a second grievance concerning his

suspensions.         On September 23, 1989,              he took a leave of absence

because the suspensions had exacerbated his June, 1985 job injury.

The Hospital notified Appellant that when he returned to work, his

assignment to the Extended Treatment Unit would continue for six

months.          On November 30,        1989,        Kimberly    Lloyd,     the   personnel

officer,        notified Appellant that the Hospital had terminated his

employment because he had exhausted the la-month                            job preference

period related to the June, 1985 job injury.                           Appellant did not

file a grievance pursuant to the terms of the CBA, but did file a

                                                3
complaint in the Montana Third Judicial District Court claiming
constructive discharge from employment and defamation of character.

The court granted Jane Edwards'            motion   to dismiss the complaint
based on her immunity under § 2-g-305,          MCA.    The court also granted
the State's motion          for summary judgment on the constructive
discharge and all defamation claims except for the statement made

by     Ken   Schmidt.    Appellant appeals the District Court's order
granting partial summary judgment.

                                  DISCUSSION

        Under Rule 56(c), M.R.Civ.P., summary judgment is proper only
when no genuine issue of material fact exists and when the moving

party is entitled to judgment as a matter of law. The moving party

has the initial burden to establish that there are no genuine

issues of material fact.        Once that burden has been met, the burden
then     shifts     to the party opposing the            motion   to establish

otherwise.        Spain-Morrow Ranch, Inc. v. West (1994), 264 Mont. 441,
444,     872 P.2d    330,   331-32.   In reviewing a grant of summary

judgment, we will utilize the same criteria as the district court;

our review is de nova.       Minnie v. City of Roundup (19931, 257 Mont.

429,    431,   849 P.2d 212, 214.

        I. Did the District Court err in granting summary judgment on

the constructive discharge claim?

        Appellant contends that the District Court erred in granting

summary judgment on the constructive                 discharge    claim because

genuine issues of material fact still existed.               The state argues

that issues of fact did not exist and that § 39-2-912(2), MCA,

                                       4
excludes      claims brought by employees           covered by collective

bargaining agreements. Section 39-2-912 (2), MCA, exempts from the
Wrongful Discharge Act "an employee covered by a written collective

bargaining agreement or a written contract of employment for a
specific term."      In fact,    5 39-31-101, MCA,    establishes   Montana's
policy of encouraging collective bargaining.            See Small v. McRae

(1982),     200 Mont. 497, 651 P.2d 982.          In Small, we adopted the

following language from the United States Supreme Court:

         individual   employees   wishing to    assert   contract
         grievances must attempt use of the contract grievance
         procedure agreed upon by employer and union as the mode
         of redress . . . . A contrary rule which would permit an
         individual employee to completely sidestep available
         grievance procedures in favor of a lawsuit has little to
         commend it.

Small,     651 P.2d at 986 (quoting Republic Steel Corporation v.
Maddox (1965), 379 U.S. 650, 652-53, 85 S.Ct. 614, 616-17, 13

L.Ed.2d 580, 583).     Therefore, we held that only when it is certain

that the CBA is not susceptible to an interpretation that it covers

the dispute, may an employee sidestep the provisions of the CBA.
Small,     651 P.2d at 986.     Where the CBA is susceptible to such an

interpretation,     we have held that the appellant must first pursue

remedies under the CBA.         Brinkman v. State (19861, 224 Mont. 238,

243,     729 P.2d 1301,   1305.     In       Allmaras v. Yellowstone Basin

Properties (1991), 248 Mont. 477, 812          P.2d 770, we stated that
       a general statutory remedy for wrongful discharge should
       not apply to those classes of cases in which the
       employees enjoy other specific contractual or statutory
       remedies. . . .       [Tlort  remedies   were  developed
       specifically to provide redress for employees who had no
       legal protection against wrongful discharge.

Allmaras,     812 P.2d at 772.
                                         5
       In this case, Appellant's termination for exhaustion of the
job preference period is a situation which is exclusively covered

by the CBA entered into by Appellant's union.                The Appellant does
not dispute that his employment with the Hospital was subject to

this CBA.       The CBA contains a grievance provision allowing an

employee to settle disputes with the employer.               Moreover,   Appellant
exhausted the leave of absence provision in the CBA, which states
in   part:

       (c) Such leave may be granted at the discretion of the
      Superintendent for periods not exceeding twelve (12)
      months.   Leaves caused by accidents compensated by the
      Industrial Accident Board shall not affect seniority
      accrual, and the leave shall be extended for up to
      eighteen (18) months.
Therefore, we conclude that Appellant must exhaust his contractual

remedies and follow the correct grievance procedure instead of

circumventing the CBA and filing a complaint in district court.

      Additionally,    the State argued and the District Court agreed
that the common-law doctrine of constructive discharge requires a

showing that the employer rendered working conditions so oppressive

that resignation was the only reasonable alternative. Niles v. Big

Sky Eyewear (1989), 236 Mont. 455, 461, 771             P.2d 114, 118 (citing

Snell v.     Montana-Dakota    Utilities     Co.   (1982),    198 Mont. 56, 643

P.2d 841).      In this case,      the Appellant did not resign, he was

terminated pursuant to the CBA.              Therefore,      he does not have a

common   law   claim   for    constructive    discharge.       We hold that the

District Court correctly found that on the issue of constructive

discharge, no genuine issues of material fact existed and the State

was entitled to summary judgment as a matter of law.
                                        6
       II.     Did the District Court err in granting summary judgment

on all but one of the defamation claims?

      The Appellant argues that genuine issues of material fact

existed and therefore the District Court erred in granting summary
judgment on the defamation claims except for the statement made by

Ken Schmidt.         The Appellant alleged several defamatory statements
made by the staff at the Hospital, including statements made to the

county attorney's office, to the press, and to the Appellant in the

presence of others.              The statements specifically include a memo
written by Jeff Strum dated June 1, 1989; a letter written by Jane

Edwards dated July 27, 1989; questions asked by Jeff Strum and Jane
Edwards; statements made to the press by Curt Chisholm, and a

statement made by Ken Schmidt to Appellant in the presence of

others.

      Defamation includes libel, the written word, and slander, the

spoken word. See § 27-l-801, MCA.                Section 27-1-802, MCA, defines

libel as:

      a false and unprivileged publication by writing . .
      which exposes any person to hatred, contempt, ridicule,
      or obloquy or which causes him to be shunned or avoided
      or which has a tendency to injure him in his occupation.


In   turn,    § 27-l-804, MCA, sets forth those publications that are

privileged:        "A privileged publication is one made:               (1) in the

proper       discharge      of   an   official    duty   .   .I'   By definition, a

privileged communication is not defamatory, and therefore not

actionable.        Small,   651 P.2d at 991; Nye v. Department of Livestock

(1982),      196   Mont. 222, 227, 639 P.2d 498, 501. See also, Starch v.

                                           7
Board of Dir. East. Mont. Reg. Five M.H.C. (1976), 169 Mont. 176,

181, 545 P.Zd 644, 647-48. ("[Section 27-l-804(1), MCA] constitutes

an absolute privilege with the only requirement being that the

intradepartment communication be one rendered while engaged in an

'official duty'.      There can be no doubt that the hiring and firing
of employees is part of the 'official duty' . . .'I)

      The District Court correctly found that the memo, letters,

questions, and statements of Jane Edwards and Jeff Strum were made

in the performance       of official duty and thus were absolutely

privileged under 5 27-l-804, MCA.          The statement by Curt Chisolm

made to the press as part of an ongoing investigation was within
his   official     capacity    and   was   also   absolutely   privileged.

Consequently,      we conclude that there were no genuine issues of

material fact, and the State was entitled to summary judgment as a

matter of law.       We affirm the District Court's grant of partial

summary judgment.
      Because the State did not file a cross appeal, we let stand

the District Court's decision to deny summary judgment on the issue

of Ken Schmidt's alleged defamatory statement.

      Pursuant to Section I, Paragraph 3(c),        Montana Supreme Court

1988 Internal Operating Rules, this decision shall not be cited as

precedent and shall be published by its filing as a public document

with the Clerk of this Court and by a report of its result to the
west ruoJ.isning    company.

      AFFIRMED.


We Concur:

                                      8
We Concur:
Justice Terry N.          Trieweiler specially concurring in part and

dissenting in part.

      I concur with that part of the majority opinion which affirms

the District Court's dismissal of the plaintiff's claim for

wrongful     discharge.    However, I do not do so for the reasons stated
in the majority opinion.

      I do not agree that plaintiff has not set forth facts which,

if   true, would constitute constructive discharge.           Nor do I agree

that he failed to file a grievance regarding the conditions which

led to his leave of absence.           Finally,   I do not agree that the

grievance procedure was his exclusive remedy pursuant to the

collective bargaining agreement which covered his employment.

      However,     I do     conclude, in    spite of    the     above,   that

plaintiff's claim for wrongful discharge is precluded by the plain

terms of Montana's Wrongful Discharge from Employment Act.           Section

39-2-912, MCA, of Montana's Wrongful Discharge from Employment Act

states in part that:

      This part does not apply to a discharge:

            izi 'oi an employee covered by a written collective
      bargaining agreement or a written contract of employment
      for a specific term.

      Because plaintiff's employment was covered by a written

collective bargaining agreement under the plain terms of Montana's

wrongful     discharge    law,   he cannot sue for wrongful discharge.

Therefore,     I concur with that part of the majority opinion which

affirms the District Court's dismissal of his claim for wrongful

discharge.

                                      10
      I dissent from that part of the majority opinion which affirms

the District Court's dismissal of the plaintiff's claim for damages

based on defamation.

      In doing so,    I   am aware of our prior conclusion that the

privilege provided for in § 27-l-804(1), MCA, is an absolute

privilege.    Starch v. BoardofDirectors(1976),   169 Mont. 176, 181, 545

P.2d 644, 647-48.   However,     I disagree with that conclusion. As a

general rule,   communications     made by public officials during the

discharge of their official         duties are, at best, a qualified

privilege.   The rule is summarized in the following text:

           A s a general rule,     communications   made by a
     subordinate  public officer in the discharge of his
     official duties are qualifiedly privileged, unless, as
     considered   supra   §§ 69-76,   they   come   within  the
     protection of absolute privilege.      [Those sections are
     inapplicable to the facts of this case.]      The rule is
     applicable where the statement is made with a proper
     motive in a proper manner, and where it is based upon
     reasonable cause, and where there is no showing of
     falsity or knowledge that the statement was untrue, or of
     malice.

          However, the remarks are not privileged under this
     rule unless made in connection with the exercise of
     official duties and within the scope of the authority
     granted, or where they constitute unfounded and baseless
     suspicions     which  have    arisen   without    proper
     investigation.

          The qualified privilege attaching to statements made
     in connection with official duties may be lost if they
     were made with express or actual malice, that is, with
     knowledge of falsity or with reckless disregard of
     truthfulness, or if the information is published to those
     who do not have a sufficient corresponding interest in
     the subject matter.

53 C.J.S. LibelandSlander 82 (1987) (footnotes omitted).
                        §




                                      11
        In this case, based on the record, there were factual issues

regarding     the applicability of             the privilege   invoked by the

defendants.         It remained for a jury to decide whether the

communications complained of were made with a proper motive, based

on reasonable cause and without malice.

        For these reasons,      I dissent from that part of the majority

opinion which dismissed plaintiff's claim for damages based on his

allegation    of    defamation.     I would reverse the District Court's

order    granting   summary   judgment,    dismissing   that   claim.




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