                                          No. 04-151

               IN THE SUPREME COURT OF THE STATE OF MONTANA

                                         2004 MT 284



KIMBERLY A. ARNOLD,

              Plaintiff and Appellant,

         v.

YELLOWSTONE MOUNTAIN CLUB, LLC,
a Montana Limited Liability Company,

              Defendant and Respondent.




APPEAL FROM:         District Court of the Eighteenth Judicial District,
                     In and For the County of Gallatin, Cause No. DC 2003-252,
                     Honorable Mike Salvagni, Presiding Judge


COUNSEL OF RECORD:

              For Appellant:

                     Edward J. Guza, Drysdale, McLean & Guza, Bozeman, Montana

              For Respondent:

                     Lucy T. France, Garlington, Lohn & Robinson, Missoula, Montana



                                                       Submitted on Briefs: July 7, 2004

                                                                  Decided: October 19, 2004

Filed:

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

¶1     Kimberly A. Arnold (Arnold) appeals from the Order entered by the Eighteenth

Judicial District Court, Gallatin County, granting Summary Judgment in favor of

Yellowstone Mountain Club (YMC) regarding her suit for wrongful discharge from

employment. We reverse.

¶2     We find the following issues dispositive on appeal:

¶3     Did the District Court err in granting Summary Judgment in favor of YMC on the

grounds that there were no issues of material fact:

       (a) regarding compliance with its written personnel policies;

       (b) regarding good cause to discharge Arnold?

                  FACTUAL AND PROCEDURAL BACKGROUND

¶4     On December 11, 2001, Arnold was hired as a housekeeper by YMC, a Montana

Limited Liability Corporation, in Big Sky, Montana. YMC is a private ski and golf resort

where its members may use YMC’s cabins or build their own homes on its property.

Arnold’s primary duties included cleaning cabins and other facilities under the direction of

her supervisor, Ron Skinner (Skinner).

¶5     In May 2002, Arnold was promoted to the position of co-supervisor and cabin master

of the housekeeping department in which she supervised approximately four to twelve

employees. Arnold worked with Skinner to determine how to accomplish the required

housekeeping duties. Arnold obtained training on-the-job and was not provided a formal

written description of her supervisory responsibilities.


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¶6     In August 2002, YMC noted on a Request for Verification of Employment Form that

Arnold’s prospects of continued employment were “excellent.” In addition, no written or

oral reprimands were brought against Arnold by YMC regarding her job performance while

at YMC.

¶7     In the weeks leading up to April 16, 2003, Arnold asserts that she tried to contact Will

Rosbolt (Rosbolt), who was in charge of the overall organization of the housekeeping

department at YMC, on three separate occasions to no avail. Arnold’s purpose in contacting

Rosbolt was to ask him for guidance with regard to her job responsibilities, to ask for an

evaluation, to determine whether she should take direction from him or Skinner, and to

address her desire for more structure within her job. Ultimately, Rosbolt met with Arnold

on April 16, 2003, and Rosbolt subsequently had a discussion with John Reveal (Reveal),

one of the officers of YMC, at which time they determined Arnold should “step back” from

her supervisory position.

¶8     On April 17, 2003, Rosbolt held a meeting with both Arnold and Skinner to discuss

the status of her position compared to Skinner’s. According to Arnold’s deposition, Rosbolt

informed her that she would be removed from her supervisory position, that she would be

a regular member of the housekeeping team, and take direction from Skinner, who was to

become her official supervisor. Arnold ended the meeting thereafter by saying “fuck this,”

and proceeded to walk out of the office. Arnold’s radio fell to the ground, and she made no

attempt to retrieve it. As Arnold was leaving the resort, Rosbolt telephoned security and

indicated that Arnold was being discharged. Arnold learned of her discharge upon exiting


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the resort from a security guard. YMC asserts it discharged Arnold for “unprofessional

conduct” and “use of abusive language.”

¶9      The YMC employee handbook (Handbook) provides for either a three-tiered

approach to termination of an employee for performance issues, or immediate termination

for certain acts. The three-tiered approach is designed to “ensure reasonable treatment” of

YMC employees and proceeds from an informal counseling session, to a formal

documentation in writing, to possible suspension, and finally to ultimate termination of

employment. The Handbook provides for immediate termination if an employee commits

a “serious violation of policy” or if the employee’s performance has not improved after

counseling or written warning.

¶10    On May 13, 2003, Arnold filed a complaint with the Eighteenth Judicial District

Court, Gallatin County, claiming YMC wrongfully discharged her without good cause under

§ 39-2-904, MCA, which induced her to suffer a loss of wages, a loss of fringe benefits, and

a loss of work from her personal clientele who were located on YMC’s property.

¶11    On September 9, 2003, YMC filed a motion for Summary Judgment pursuant to Rule

56, M.R.Civ.P., asserting there were no material issues of fact and that YMC was entitled

to summary judgment as a matter of law because YMC had good cause to end the

employment relationship. On December 30, 2003, the District Court issued an Order

granting YMC’s motion for Summary Judgment concluding there were no disputed issues

of material fact. Arnold appeals.




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                               STANDARD OF REVIEW

¶12    This Court’s review of a district court’s grant or denial of a motion for summary

judgment is de novo. Watkins Trust v. Lacosta, 2004 MT 144, ¶ 16, 321 Mont. 432, ¶ 16,

92 P.3d 620, ¶ 16. Therefore, we use the same Rule 56, M.R.Civ.P., criteria as applied by

the district court. Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901,

903.

¶13    Rule 56(c), M.R.Civ.P., sets forth the framework within which a trial court is to

consider and rule on a motion for summary judgment. It reads in pertinent part as follows:

       Motion and Proceedings Thereon. The motion shall be served at least 10
       days before the time fixed for the hearing. The adverse party prior to the day
       of hearing may serve opposing affidavits. The judgment sought shall be
       rendered forthwith if the pleadings, depositions, answers to interrogatories,
       and admissions on file, together with the affidavits, if any, show that there is
       no genuine issue as to any material fact and that the moving party is entitled
       to a judgment as a matter of law.

¶14    The moving party has the initial burden of establishing the absence of genuine issues

of material fact and entitlement to the judgment as a matter of law. Carelli v. Hall (1996),

279 Mont. 202, 207, 926 P.2d 756, 759. Once the moving party has met the initial burden,

the burden then shifts to the party opposing summary judgment to present evidence raising

a genuine issue of material fact. Owen v. Ostrum (1993), 259 Mont. 249, 255-56, 855 P.2d

1015, 1019. The party opposing the motion for summary judgment cannot rely on mere

allegations in the pleadings, but must present its evidence raising genuine issues of material

fact in the form of affidavits or other sworn testimony. Yarbro, Ltd. v. Missoula Fed. Credit

Union, 2002 MT 152, ¶ 10, 310 Mont. 346, ¶ 10, 50 P.3d 158, ¶ 10.

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¶15    While this Court resolves inferences drawn from the factual record in favor of the

party opposing summary judgment, mere denial, speculation, or conclusory statements are

insufficient to raise genuine issues of material fact. Klock v. Town of Cascade (1997), 284

Mont. 167, 174, 943 P.2d 1262, 1266. A “material” fact is a fact that “involve[s] the

elements of the cause of action or defenses at issue to an extent that necessitates resolution

of the issue by a trier of fact.” Mt. W. Bank, N.A. v. Mine & Mill Hydraulics, Inc., 2003 MT

35, ¶ 28, 314 Mont. 248, ¶ 28, 64 P.3d 1048, ¶ 28 (citing State Med. Oxygen v. American

Med. Oxygen (1994), 267 Mont. 340, 344, 883 P.2d 1241, 1243).

                                       DISCUSSION

¶16    Did the District Court err in granting Summary Judgment in favor of YMC on

the grounds that there were no issues of material fact:

       (a) regarding compliance with its written personnel policies;

       (b) regarding good cause to discharge Arnold?

¶17    Written personnel policies. YMC argues that Arnold was terminated for “use of

abusive and threatening language,” which is conduct expressly listed in the Handbook as

warranting immediate termination. YMC thus contends that it acted in conformity with its

written personnel policies by immediately terminating Arnold, instead of implementing the

three-tiered disciplinary approach to “correct” or “improve” her performance.

¶18    Arnold responds by claiming that genuine issues of material fact exist as to whether

YMC circumvented its own written personnel policies and whether, based on the totality of

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the circumstances, Arnold’s actions were so egregious as to justify immediate termination

in light of Arnold’s unblemished employment record.

¶19    The Handbook provides in pertinent part:

       All instances where disciplinary action is required are to be examined
       thoroughly. Corrective action should be as appropriate to the problem as
       possible and given in the spirit of improving the employee’s performance or
       behavior which resulted in the violation. The circumstances involved, overall
       work record and length of service of the employee involved are to be
       considered as well. Listed below are actions, which, among others and
       depending upon circumstances, will be considered grounds for immediate
       disciplinary action, up to, and including termination. [Emphasis added.]


The actions therein listed as qualifying for immediate discipline include insubordination, use

of abusive or threatening language, discourtesy, rudeness, or other inappropriate behavior

to members, visitors, and/or other employees.

¶20    As the District Court correctly noted, this Court has held that even when employee

handbooks contain a specific disciplinary sequence, immediate termination of an employee

may be appropriate under handbook provisions permitting such a termination. Koepplin v.

Zortman Mining (1994), 267 Mont. 53, 61, 881 P.2d 1306, 1311. In Koepplin, we concluded

that “in the overall context of this case, the [employee’s] threats . . . justified immediate

termination under [the employer’s] personnel policy.” Koepplin, 267 Mont. at 61, 881 P.2d

at 1311. The District Court concluded that, based upon Arnold’s admissions, she had acted

unprofessionally and in violation of the Handbook provisions addressing immediate

termination.



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¶21    However, “unprofessional conduct” is not listed in the Handbook as conduct

justifying immediate termination, and more significantly, the Handbook authorizes

immediate terminations “depending on the circumstances.” Thus, in order to determine the

propriety of an immediate termination, this provision requires, at minimum, consideration

of the events which led up to the employee’s conduct for which she was terminated, and

whether, in that light, she engaged in conduct for which immediate termination was justified.

In sum, the Handbook requires, in addition to the meeting of April 17, 2003, consideration

of the events which led to that meeting.

¶22    In our view, when dutifully considering all of the circumstances here–as alleged by

Arnold and more fully discussed hereinafter–there remains a material issue of fact as to

whether YMC’s immediate termination of Arnold was justified under the Handbook.

Therefore, we hold that the District Court erred in granting summary judgment in favor of

YMC on the grounds that there were no issues of material fact regarding compliance with

its written personnel policies.

¶23    Good cause. Under the Wrongful Discharge from Employment Act (WDEA), a

discharge is wrongful if the discharge was not for good cause and the employee had

completed the employer’s probationary period of employment. Section 39-2-904, MCA.

Good cause is defined by § 39-2-903(5), MCA, 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.”



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¶24    As the party moving for summary judgment, YMC had the burden of establishing

there were no issues of material fact regarding good cause, in light of the substantive legal

principles, entitling YMC to judgment as a matter of law. Smith v. Barrett (1990), 242

Mont. 37, 40, 788 P.2d 324, 326. YMC contends the Court need look no further than the

following undisputed material facts which it claims constitute good cause to discharge

Arnold: (1) the written personnel policies permitted the employer to immediately discharge

an employee for insubordination, use of abusive or threatening language, damage to company

property, discourtesy, rudeness or other inappropriate behavior to members, visitors and/or

other employees; (2) Arnold, by her own admission said, “fuck this” during a meeting with

her supervisor and co-employee; (3) Arnold abruptly terminated the meeting by walking out;

and (4) Arnold dropped her radio on the floor and did not pick it up upon exiting the meeting

and proceeded to drive off the premises. YMC further asserts that Arnold failed to defeat

its contention that she was properly discharged for good cause at the summary judgment

stage because of her failure to offer evidence upon which a fact-finder could determine that

the reason given by the employer was “false, whimsical, arbitrary or capricious, or unrelated

to the needs of the business.” Delaware v. K-Decorators, Inc., 1999 MT 13, ¶ 58, 293 Mont.

97, ¶ 58, 973 P.2d 818, ¶ 58.

¶25    Arnold, as the nonmoving party, claims she presented affirmative evidence to defeat

YMC’s motion for summary judgment regarding whether she was terminated for good cause.

Arnold specifically attests to the following facts: (1) Arnold received no written or oral

reprimands throughout her period of employment while at YMC; (2) Arnold did not fail to

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perform her duties and her behavior did not cause a disruption of YMC’s operation; (3)

YMC noted on a bank financing inquiry form that Arnold’s prospects of continued

employment were “excellent;” (4) YMC did not use any form of progressive discipline

before coming to the determination that Arnold be demoted; (5) Arnold made multiple

attempts to contact Rosbolt prior to the April 17 meeting to discuss her issues of concern

and received no responses; and (6) Arnold requested a performance evaluation of herself as

required per the employee handbook which was refused. Additionally, Arnold contends that

YMC pointed only to acts that occurred on April 17, 2003, and gave no reasons as to why

it was necessary to demote her in light of her overall performance as a co-supervisor.

¶26    In order for an employee to defeat a motion for summary judgment on the issue of

good cause, the employee must “prove that the given reason for the discharge . . . is a pretext

and not the honest reason for the discharge.” Mysse v. Martens (1996), 279 Mont. 253, 262,

926 P.2d 765, 770. Additionally, we have held that summary judgment will be granted if the

nonmoving party presents no evidence that there is an issue of material fact relating to the

wrongful discharge claim. Koepplin, 267 Mont. at 61, 881 P.2d at 1311.

¶27    Arnold, in contrast to the nonmoving party in Koepplin, has offered multiple facts

which dispute YMC’s claim that it had a legitimate business reason to discharge her from

employment. The facts alleged by Arnold occurred prior to her outburst and termination and

allow for the “reasonable inference” to be drawn that YMC’s stated reason for termination

was merely a pretext to avoid facing her concerns and following the three-tiered disciplinary

process. Montana Metal Buildings v. Shapiro (1997), 283 Mont. 471, 474, 942 P.2d 694,

                                              10
696. Prior to expressing her concerns, Arnold had no prior disciplinary problems, performed

her duties well, and YMC expressed that her job prospects were “excellent.” Thus, whether

there were reasons for Arnold’s termination other than the outburst at the April 17 meeting,

establishes an issue of fact for jury determination.

¶28     Accordingly, we conclude that the District Court erred when it granted YMC’s

motion for summary judgment on grounds that there were no issues of material fact regarding

good cause to discharge Arnold.

¶29    Reversed and remanded for further proceedings.



                                                        /S/ JIM RICE


We concur:

/S/ JIM REGNIER
/S/ PATRICIA O. COTTER
/S/ JOHN WARNER
/S/ W. WILLIAM LEAPHART




                                             11
Justice Patricia O. Cotter concurs.

¶30    I concur in the Court’s Opinion, and offer the following additional reason for doing

so.

¶31    The District Court concluded that, by accepting the policies set forth in the Handbook,

Arnold accepted the fact that her violation of certain of the YMC’s policies could result in

immediate termination, and that YMC was not obligated to offer her any additional relief or

consideration. The problem is that, the way the Handbook is written, virtually any

objectionable employee action could result in immediate termination.            Notably, the

Handbook lists 29 circumstances that could justify immediate termination.              These

circumstances include, among others, such innocuous violations as non-compliance with the

dress code or violation of Club vehicle rules, and far more nebulous violations, such as

“negligence in job performance” or “unsatisfactory job performance.” With the latitude

these provisions give to the employer, YMC could justify virtually any immediate

termination, and thus render illusory the Handbook’s promise of thorough examination and

consideration of the circumstances involved in the discipline. See ¶ 19. In other words, this

sweeping immediate termination provision could easily subsume the progressive discipline

provisions of the Handbook.

¶ 32   Under the circumstances presented here, and given the overly broad immediate

termination provisions of this Handbook, I would conclude it was error for the District Court


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to stop its analysis upon finding that one of these many provisions was violated. As the

Court notes, more was required. I therefore concur in the Court’s decision.



                                                /S/ PATRICIA O. COTTER


Justice W. William Leaphart joins in the foregoing Concurring Opinion.


                                                /S/ W. WILLIAM LEAPHART




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