                                           No. 05-364

               IN THE SUPREME COURT OF THE STATE OF MONTANA

                                          2006 MT 168N

                                                _______________________________________

CITY OF LEWISTOWN,

              Plaintiff and Respondent,

         v.

BRETT LLOYD,

              Defendant and Appellant.

                                                 ______________________________________

APPEAL FROM:         District Court of the Tenth Judicial District,
                     In and for the County of Fergus, Cause No. DV 2004-84
                     The Honorable E. Wayne Phillips, Judge presiding.


COUNSEL OF RECORD:

              For Appellant:

                     Gregory W. Duncan, Attorney at Law, Helena, Montana

              For Respondent:

                     Monte Boettger, City Attorney, Lewistown, Montana


                                                   ____________________________________

                                                          Submitted on Briefs: June 28, 2006

                                                                     Decided: July 25, 2006

Filed:


                       ______________________________________
                                        Clerk
Justice John Warner delivered the Opinion of the Court.

¶1     Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1996 Internal

Operating Rules, the following decision shall not be cited as precedent. It shall be filed

as a public document with the Clerk of the Supreme Court and shall be reported by case

title, Supreme Court cause number and result to the State Reporter Publishing Company

and to West Group in the quarterly table of noncitable cases issued by this Court.

¶2     Brett Lloyd appeals an order of the Tenth Judicial District Court, Fergus County,

granting summary judgment in favor of Plaintiff, the City of Lewistown (City). We

reverse and remand.

¶3     In July 2001 the City hired Lloyd as a police officer. As a condition of his

employment Lloyd signed a reimbursement agreement. The agreement required that if he

did not work for the City for at least thirty-six months he would repay the City a portion

of its expenses in sending him to the Montana Law Enforcement Academy for required

training as a peace officer.

¶4     In 1999, the City had negotiated with its police force and entered a Collective

Bargaining Agreement (CBA) with the Montana Public Employees Association (MPEA)

which represented the policemen. Lloyd was a member of the MPEA and the terms and

conditions of his employment were covered by the CBA at the time he was hired and

signed the reimbursement agreement.

¶5     Lloyd resigned November 1, 2002, after he had been employed by the City for

about sixteen months. The City then notified Lloyd that it would seek reimbursement

under the agreement.      The City calculated that $4,064.20 was owed by Lloyd as


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reimbursement under the agreement, deducted from that amount $803.31 that it withheld

from Lloyd’s salary, and demanded payment of the remaining $3,260.39.

¶6    The City, after some negotiations, sued Lloyd in the Fergus County Justice Court

to enforce the reimbursement agreement. The Justice Court granted summary judgment

to the City and awarded the amount prayed for plus attorney fees. Lloyd appealed to the

District Court. The City again moved for summary judgment. The District Court granted

the City’s motion, entered judgment and awarded attorney fees to the City. Lloyd

appeals.

¶7    Lloyd argues that the reimbursement agreement is unenforceable because it was

not bargained for, as is required under Montana law. The District Court concluded that

Lloyd waived this defense because he failed to comply with the mandatory grievance

procedures contained in the CBA.

¶8    This Court reviews a district court’s grant of summary judgment de novo. Watson

v. Dundas, 2006 MT 104, ¶ 16, 332 Mont. 164, ¶ 16, 136 P.3d 973, ¶ 16. We apply the

criteria contained in Rule 56, M.R.Civ.P. According to this rule, the moving party must

establish both the absence of a genuine issue of material fact and entitlement to judgment

as a matter of law. Watson, ¶ 16. The burden then shifts to the non-moving party to

prove by more than mere denial and speculation that a genuine issue does exist. Watson,

¶ 16. If the court determines that no genuine issues of fact exist, the court must then

determine whether the moving party is entitled to judgment as a matter of law. Watson, ¶

16. We review legal determinations made by a district court to establish whether the

conclusions are correct. Watson, ¶ 16.


                                            3
¶9     We conclude that Lloyd was not required to use CBA grievance procedures in this

matter. Lloyd was not the impetus of these proceedings. It was the City (the employer)

that first brought allegations against him. Lloyd simply asserts the defense that the

reimbursement agreement was not bargained for as required by § 39-31-305, MCA, and

is therefore unenforceable. 1

¶10    Under § 39-31-305, MCA, the City, a public employer, is required to bargain

collectively upon the following matters:

       (1) The public employer and the exclusive representative, through
       appropriate officials or their representatives, shall have the authority and
       the duty to bargain collectively. This duty extends to the obligation to
       bargain collectively in good faith as set forth in subsection (2) of this
       section.

       (2) For the purpose of this chapter, to bargain collectively is the
       performance of the mutual obligation of the public employer or his
       designated representatives and the representatives of the exclusive
       representative to meet at reasonable times and negotiate in good faith with
       respect to wages, hours, fringe benefits, and other conditions of
       employment or the negotiation of an agreement or any question arising
       thereunder and the execution of a written contract incorporating any
       agreement reached.

Section 39-31-305(1) & (2), MCA (emphasis added).

¶11    The reimbursement agreement was a condition of employment. The agreement

expressly states:

       [T]he officer’s signing of this Agreement is a condition of his/her being
       hired as a regular full-time probationary police officer with the Department.


1
 In each of the cases cited by the City, to support its grievance argument, it was the
employee, not the employer, that sought relief from the court. As the City quotes in its
brief, “[a] person may not seek judicial relief before available administrative avenues
have been exhausted.” B.G.M. Enterprises v. State Dept. of Social and Rehabilitation
Services (1984), 673 P.2d 1205, 1206. Lloyd did not seek judicial relief here, the City
did.
                                            4
Further, the agreement was a condition of employment because it specified how long

Lloyd was required to work for the City without penalty. New Jersey Transit Authority v.

Local 304 (N.J. Super. Ct. App. Div. 1998), 714 A.2d 329, 332-333 (“the disputed

repayment agreement is literally a term or condition of employment insofar as it specifies

how long employees must work in order to avoid having to repay training costs and how

much of the salary they have earned will be subject to disgorgement if they choose to

leave their jobs earlier.”).   Thus, because the reimbursement was a condition of

employment, § 39-31-305, MCA, requires that the condition be bargained for.

¶12   It is undisputed that the City’s policemen had formed a bargaining unit, that

MPEA was their representative, and that a CBA had been negotiated and signed. If the

reimbursement agreement was not authorized under the CBA then it was not bargained

for, as defined under § 39-31-305(2), MCA, and the agreement is unenforceable. The

City argues that the reimbursement agreement was impliedly authorized by the CBA, and

thus it was bargained for.     However, the CBA does not authorize or even address

reimbursement agreements. Nor does it authorize the City to bargain individually with

employees regarding conditions not expressly addressed. Alternatively, the City argues

that the agreement was authorized by § 7-32-4139, MCA (1999). Even though § 7-32-

4139, MCA, authorized reimbursement agreements, at that time, the City was still

required to comply with § 39-31-305(2), MCA, by bargaining with the MPEA for any

condition of employment. Therefore, as a matter of law, the reimbursement agreement is

unenforceable because it conditioned Lloyd’s employment upon an agreement that was

not bargained for.


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¶13    The judgment of the District Court is reversed and this case is remanded for

further proceedings consistent with this opinion.


                                                    /S/ JOHN WARNER


We Concur:


/S/ KARLA M. GRAY
/S/ W. WILLIAM LEAPHART
/S/ BRIAN MORRIS
/S/ JIM RICE




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