                                                 No.    81-561.

                      I N THE SUPREME COURT O F TEE STPATE O F .!.IONTANA

                                                        1982




J O H N BARNICOAT,

                                   P l a i n t i f f and A p p e l l a n t ,



COIb3iviISSIONER O F DEPARTMENT O F
LABOR AND INDUSTRY, THE EMPLOYMENT
SECURITY D I V I S I O N , e t a l . ,

                                   D e f e n d a n t s and R e s p o n d e n t s .




Appeal from:            D i s t r i c t C o u r t of t h e F i f t h J u d i c i a l D i s t r i c t ,
                        I n and f o r t h e C o u n t y of J e f f e r s o n , T h e E o n o r a b l e
                        Frank E. B l a i r , Judge p r e s i d i n g .


C o u n s e l of R e c o r d :

            For Appellant:

                        Hartelius & Associates;                  C a m e r o n Ferguson,      Great
                        Falls, Montana


           For R e s p o n d e n t :

                                                       ,   D e p t of L a b o r & I n d u s t r y ,
                        Helena,     Montana




                                                 S u b m i t t e d on B r i e f s :   August 26,      1982

                                                                      Decided;        November 1 0 , 1982
Nr. Justice Fred J. Weber delivered the Opinion of the Court.


        John Barnicoat brought a legal action against the

Commissioner of the Department of Labor and Industry claiming

a refund of unemployment insurance benefits he paid back to
the State Employment Security Division (Division).       The District
Court of the Fifth Judicial District, Jefferson County, sitting

without a jury, dismissed Barnicoat's complaint due to his

failure to exhaust statutory administrative remedies.       Barnicoat

appeals.
        We affirm.

        The following issues are presented for review:
        (I) Is Barnicoat precluded from bringing a legal action
in a District Court on the grounds that he failed to exhaust

his administrative remedies.
        (2) Does the Division have the right to demand repayment
of unemployment insurance benefits paid to an unemployed person
who later receives back pay for the period of his unemployment
through a labor grievance arbitration proceeding.

        Barnicoat was employed by the Boulder River School and

Hospital, Boulder, Montana, from September 1978 to June 18,
1979, when he was terminated.    On June 19, 1979, he applied
for unemployment insurance benefits and received $1,022 in
benefits for the period of June 18, 1979, through September 29,
1979.    Barnicoat also filed a grievance through his union,
the American Federation of State, County, and Municipal Employees,
contesting the termination.     The grievance resulted in a decision

issued September 24, 1979, reinstating Barnicoat and awarding
back pay in the amount of $1,004.    On November 2, 1979, ~arnicoat
contacted the ~ivisionby telephone and informed them of his
back pay award and on that same day made payment to the ~ivision

of $1,000.
                                      -2-
     The first issue is whether Barnicoat is precluded from
bringing a legal action in a District Court on the grounds

that he failed to exhaust his administrative remedies.    The

District Court dismissed the action on that ground.

     Subsequent to applying for and receiving unemployment
benefits, Barnicoat was awarded back pay for the same period.
Barnicoat's paying the $1,000 back to the Division triggered

a reconsideration of his claim under section 39-51-2404(2),
MCA, which provides:

     "(2) The deputy may for good cause reconsider
     his decision and shall promptly notify the
     claimant and such other interested parties of
     his amended decision and the reasons therefore."
     On November 6, 1979, Barnicoat was sent a letter by the

Division which provided:
     "You were indebted to this agency for $1,022.00
     due to your reward of back-pay. You had received
     checks (14) for weeks ending 6-30-79 through
     9-29-79 at $73.00 each. We are in receipt of
     your check for $1,000.00 which leaves an over-
     payment balance of $22.00.
     "It is the decision of this agency that you
     refund the amount shown due."

The letter also included the Division's standard notice of
appeal, which provides:

     "APPEAL RIGHTS: Any claimant or employer who
     believes that the decision of a Claims Examiner
     is contrary to the law or the facts, may request
     a redetermination from the Claim Examiner, or may
     appeal from his decision through a local office
     of the commission, requesting a review and stating
     the reasons therefor. Appeals must be filed within
     five ( 5 ) days after receipt of this notification
     or within seven (7) days after notification is
     mailed. "
Barnicoat never has paid the remaining $22 requested by the
Division.
     No request for a redetermination was made by Barnicoat
nor was any appeal taken from the decision.   Section 39-51-2402(4),

MCA, contains the following requirements on redeterminations or

appeals :
     "(4) A determination or redetermination shall
     be deemed final unless an interested party
     entitled to notice thereof applies for recon-
     sideration of the determination or appeals there-
     from within 5 days after delivery of such
     notification or within 7 days after such
     notification was mailed to his last known address,
     provided that such period may be extended for
     good cause."
     The foregoing statute     requires the conclusions that the
redetermination of the Barnicoat claim by the Division became
final because of the absence of a request for redetermination
or an appeal.
     Sections 39-51-2402, -2403 and -2404, MCA, describe the
appeal process which is provided for claims and redetermination
of claims.    In the initial appeal, an appeals referee makes
findings and conclusions and furnishes a copy of his decisions
and the findings and conclusions to the parties.    The appeals
referee's decision becomes final unless further review is
initiated within the stated periods of time.    Next, any dis-
satisfied party may appeal from the decision of an appeals
referee to the Board itself.    The decision of the Board becomes
final unless an interested party requests a rehearing or
initiates judicial review by filing a petition in District
Court within thirty days of the date of mailing of the Board's
decision.    Section 39-51-2410(1), MCA, in pertinent part
provides with regard to finality and judicial review:
    "Any decision of the board in the absence of an
    appeal therefrom as herein provided shall become
    final 30 days after the date of notification or
    mailing thereof . . . and judicial review thereof
    shall be permitted only after any party claiming
    to be aggrieved thereby has exhausted his remedies
    before the board."
The statutory provision allowing judicial review only after
exhaustion of remedies administratively is consistent with
prior holdings of this Court:
     "It is a general principle that if an administrative
     remedy is provided by statute, that relief must be
     sought from the administrative body and the statutory
     remedy exhausted before relief can be obtained by
     judicial review." State ex rel. Jones v. Giles (19751,
     168 Mont. 130, 132, 541 P.2d 355, 357.

     Barnicoat repaid to the Division the $1,000 on November
2, 1979.       The Division wrote Barnicoat on November 6, 1979.

No action was taken in response to the Division letter.
Barnicoat's attorney wrote a letter to the Division, dated

December 5, 1980, attempting to challenge the repayment.

Next, a complaint was filed in District Court by Barnicoat
on March 12, 1981.
     Barnicoat completely failed to utilize the rehearing
and appeal processes provided by statute.      Barnicoat failed

to exhaust all of his remedies available within the agency
and is precluded from requesting judicial review in a District
Court.       The lower court was correct in dismissing the complaint
on the ground that Barnicoat failed to exhaust his administrative
remedies.      Because of the holding on this issue, it is not
necessary to consider the second issue.
    Affirmed.



We Concur:

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  44     C;hief Justice
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