STORCH v BRD OF DIRECTORS

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No. 12932 I N T E SUPREME C U T O THE STATE O M N A A H OR F F OTN 1975 S Y O R L. STORCH, EMU P l a i n t i f f and A p p e l l a n t , BOARD OF DIRECTORS OF THE EASTERN M N A A REGION FIVE OTN M N A HEALTH CENTER, e t a 1. , ETL Defendants and Respondent. Appeal from: D i s t r i c t Court of t h e S i x t e e n t h J u d i c i a l D i s t r i c t , A . B. Martin, Judge p r e s i d i n g . Counsel of Record: For Appellant: Robert L. Stephens, Jr. argued, B i l l i n g s , Montana For Respondent : Lucas, J a r d i n e & Monaghan, Miles C i t y , Montana James P. Lucas argued, Miles C i t y , Montana Habedank, Cumming & Best, Sidney, Montana Jacque W. Best argued, Sidney, Montana - - Submitted: Decided : Filed: T;c;,iA; . ', " 1 December 11, 1975 JArj 2 1 7976 14r. J u s t i c e Gene B. Daly d e l i v e r e d t h e Opinion of t h e Court. P l a i n t i f f Seymour L. Storch b r i n g s t h i s a p p e a l from a judgment of t h e d i s t r i c t c o u r t , Custer County, t h e Hon. A . B . Martin p r e s i d i n g , d i s m i s s i n g p l a i n t i f f ' s complaint f o r f a i l u r e t o s t a t e a claim upon which r e l i e f may be g r a n t e d . The i n d i v i d u a l l y named defendants i n t h i s a c t i o n a r e members of t h e Board of D i r e c t o r s of t h e E a s t e r n Montana Regional Mental Health Center, Region 5 . O December 4 , 1972, p l a i n t i f f n Storch was employed on a p r o b a t i o n a r y b a s i s by t h e tfental Health Center a s a drug abuse c o n s u l t a n t . During p l a i n t i f f ' s p r o b a t i o n a r y p e r i o d , board member E t h e l Eond made a w r i t t e n recommendation t o Rod L. Newman, Program D i r e c t o r f o r t h e C e n t e r , t h a t employment be terminated. torch's Upon review o f t h i s recommendation and o t h e r complaints r e c e i v e d , t h e Eoard of D i r e c t o r s sought t h e t e r m i n a t i o n of torch's employment w i t h t h e Center f o r t h e s e r e a - sons : "I. His p h y s i c a l appearance and body c l e a n l i n e s s a r e not a c c e p t a b l e f o r a p r o f e s s i o n a l person i n our community. While we r e c o g n i z e t h a t h i s p e r s o n a l l i f e i s a p r i v a t e m a t t e r , t h e Board f e e l s we cannot condone t h e open i l l i c i t c o h a b i t a t i o n . This does n o t s e t a good example f o r people w i t h problems o r our young people. "2. "3. The medical community has been c o n s u l t e d . The response by t h e d o c t o r s except one has been t h e y would n o t r e f e r p a t i e n t s t o t h i s man and f e e l t h e Center has d e t e r i o r a - t e d s i n c e t h e a d d i t i o n of t h i s man t o t h e s t a f f . "4. H i s behavior and a c t i o n s r e f l e c t upon t h e Center a d v e r s e l y . W r e a l i z e t h a t t h e r e a r e some people who e have b e n e f i t e d from h i s s e r v i c e . But f o r t h e good of t h e Center and t h e continued support from t h e communit i e s , we have asked f o r f4r, torch's r e s i g n a t i o n . f 1 O May 16, 1973, Rod L. Newman, Program D i r e c t o r , asked n Storch f o r h i s r e s i g n a t i o n . Upon torch's r e q u e s t f o r an explana- t i o n , Newman s e n t him a l e t t e r l i s t i n g the r e a s o n s c i t e d by t h e C e n t e r ' s Board of D i r e c t o r s and a d v i s i n g Storch t h a t a.s a probat i o n a r y employee, he had no r i g h t t o a p p e a l o r hearing. When S t o r c h r e f u s e d t o r e s i g n , h i s employment was t e r m i n a t e d , e f f e c t i v e June 1 5 , 1973. With t h e t e r m i n a t i o n of h i s employment, S t o r c h , through l e g a l c o u n s e l , f i l e d a complaint i n C u s t e r County d i s t r i c t c o u r t seeking s p e c i a l damages of $250,000, p u n i t i v e damages of $50,000, and $50,000 f o r i n j u r y t o p l a i n t i f f ' s r e p u t a t i o n . The t h r e e counts of t h e complaint went b a s i c a l l y t o t h e c o n t e n t i o n t h a t t h e r e a s o n s given by t h e Board i n t h e l e t t e r r e q u e s t i n g p l a i n t i f f ' s r e s i g n a t i o n were l i b e l o u s r e f l e c t i o n s on h i s p r o f e s s i o n a l a b i l i t y and improper i n v a s i o n s of h i s c o n s t i t u t i o n a l r i g h t t o p r i v a c y . I n answer t o p l a i n t i f f ' s complaint, defendants f i l e d a motion t o d i s m i s s f o r f a i l u r e t o s t a t e a c l a i m upon which r e l i e f may be g r a n t e d . 1. The motion t o d i s m i s s s t a t e d two b a s i c r e a s o n s : That t h e a c t s complained of were discharged by an agency of s t a t e government a s a governmental f u n c t i o n and were t h e r e f o r e s u b j e c t t o t h e defense of sovereign immunity. 2. That t h e a c t s complained of were w i t h i n t h e proper d i s c h a r g e of an o f f i c i a l duty and were t h e r e f o r e s u b j e c t t o t h e defense of a b s o l u t e p r i v i l e g e . The complaint b e i n g dismissed w i t h p r e j u d i c e t h e d i s t r i c t c o u r t ' s judgment o p e r a t e d a s a f i n a l d e t e r m i n a t i o n upon t h e m e r i t s and was t h e r e f o r e r e s j u d i c a t a f o r purposes of p l a i n t i f f ' s cause. T h e r e a f t e r , p l a i n t i f f appealed t o t h i s Court. The s o l e i s s u e b e f o r e t h i s Court i s whether t h e d i s t r i c t c o u r t e r r e d i n g r a n t i n g d e f e n d a n t s ' motion t o dismiss. P l a i n t i f f contends t h a t s e c t i o n 83-701, R.C.I.I. 1947, t h e s p e c i f i c s t a t u t o r y p r o v i s i o n then i n e f f e c t , waived any sovereign immunity (1889 C o n s t i t u t i o n i n e f f e c t a t time cause of a c t i o n accrued) t o t h e e x t e n t t h a t t h e s t a t e o r i t s i n s t r u m e n t a l i t i e s were i n s u r e d . This c o n t e n t i o n e r r o n e o u s l y presupposes t h a t l i a - b i l i t y i n s u r a n c e i s t h e only l i m i t a t i o n on waiver of s t a t u t o r y immunity. It i s an e s t a b l i s h e d g e n e r a l p r i n c i p l e t h a t any s t a t u t o r y waiver of a s t a t e ' s immunity from s u i t i s t o be s t r i c t l y construed. 72 Am J u r 2d, S t a t e s , E t c . , $121. This Court recognized t h e c o n t i n u i n g v a l i d i t y of t h i s p r i n c i p l e i n Kish v. Montana S t a t e P r i s o n , 161 Hont. 297, 301, 505 P.2d 891, when i t quoted from Kaldahl v. S t a t e Highway Commission, 158 ?*font. 219, 221, 490 P.2d "'AS t o l e g a l a c t i o n s a g a i n s t t h e s t a t e , t h e 1959 l e g i s l a t u r e passed Chapter 7, T i t l e 83f1 R.C.M. 1947 " ~ o r tActions Against t h e S t a t e , and i n Even s e c t i o n s , s e c t i o n s 83-701 through 83-707, c a r e f u l l y determined how, why, and when t h e s t a t e could be sued i n a t o r t a c t i o n . These l e g i s l a t i v e enactments recognized t o r t l i a b i l i t y and e s t a b l i s h immunity of t h e s t a t e i n excess of a c o l l e c t i b l e insurance. Thus, t h e s e s t a t u t o r y p r o v i s i o n s provide a remedy a g a i n s t t h e s t a t e u n d e r - c e r t a i n circumstances. The l e g i s l a t u r e has spoken and we a r e bound by i t s enactments. 1 I 1 (Emphasis s u p p l i e d . ) - See a l s o : Valley County v. Thomas, 109 Mont. 345, 97 P.2d 345; S t a t e ex r e l . LaPoint v. D i s t r i c t Court, 69 Mont. 29, 220 P. 88. The s t a t u t e , s e c t i o n 83-701, R.C.M. 1947, provided i n pertinent part: "The d i s t r i c t c o u r t s of t h e s t a t e of Montana s h a l l have e x c l u s i v e j u r i s d i c t i o n t o h e a r , determine, and r e n d e r judgment t o t h e e x t e n t of t h e i n s u r a n c e coverage c a r r i e d by t h e s t a t e of Montana on any c l a i m a g a i n s t t h e s t a t e of Montana f o r money o n l y , a c c r u i n g on o r a f t e r t h e passage and approval of t h i s a c t , on account of damage t o o r l o s s of p r o p e r t y , o r on account o f p e r s o n a l i n j u r i e s o r d e a t h caused by t h e n e g l i g e n c e o r wrongful a c t o r omission of any employee of t h e s t a t e of Montana. > i>'i" 9: ' The s t a t u t e e x p r e s s l y r e s t r i c t s waiver of t o r t immunity t o t h e common t o r t a c t i o n s f o r recovery of damages f o r p e r s o n a l i n j u r y o r d e a t h o r damage t o p r o p e r t y . Applying t h e r u l e of s t r i c t c o n s t r u c t i o n , t h e p l a i n t i f f ' s two b a s i c claims of l i b e l and invat i o n of p r i v a c y do n o t f i t i n t o t h e t o r t c a t e g o r i e s s p e c i f i e d i n the statute. I t t h u s becomes unnecessary t o d i s c u s s t h e e f f e c t of any l i a b i l i t y in'surance because t h e f a i l u r e o f t h e " c e r t a i n c i r c u n stances" t e s t of Kaldahl c o n s t i t u t e s an a b s o l u t e b a r t o waiver of sovereign immunity. P l a i n t i f f a l s o contends t h a t d e f e n d a n t s ' r e l i a n c e on t h e p r i v i l e g e d communication defense t o a l i b e l c l a i m i s misplaced because Montana law r e q u i r e s t h e absence of malice f o r such a defense. I n t h i s c a s e , p l a i n t i f f claims t h e a l l e g e d l i b e l o u s communication involved malice and t h e r e f o r e t h e defense could n o t stand. W f i n d no m e r i t i n t h i s c o n t e n t i o n . e A p r i v i l e g e d communication i s one which, except f o r t h e circumstances under which i t i s made, may be defamatory and actionable. Section 64-208, R.C.M. 1947, provides: What communications a r e p r i v i l e g e d . A p r i v i l e g e d p u b l i c a t i o n i s one made: 11 "1. I n t h e proper d i s c h a r g e of a.n o f f i c i a l d u t y ; "2, I n any l e g i s l a t i v e o r j u d i c i a l proceeding, o r i n any o t h e r o f f i c i a l proceeding a u t h o r i z e d by law; "3. I n a communication, without m a l i c e , t o a person i n t e r e s t e d t h e r e i n , by one who i s a l s o i n t e r e s t e d , o r by one who s t a n d s i n such r e l a t i o n t o t h e person i n t e r e s t e d a s t o a f f o r d a r e a s o n a b l e ground f o r supposing t h e motive f o r t h e communication i n n o c e n t , o r who i s r e q u e s t e d by t h e person i n t e r e s t e d t o give t h e information; "4. By a f a i r and t r u e r e p o r t , w i t h o u t malice of a j u d i c i a l , l e g i s l a t i v e , o r other public o f f i c i a l proceeding, o r of anything s a i d i n t h e c o u r s e thereof. " While some of t h e quoted s u b s e c t i o n s do mention malice t h e pert i n e n t s u b s e c t i o n 1, says n o t h i n g about q u a l i f i e d p r i v i l e g e . Rather i t c o n s t i t u t e s an a b s o l u t e p r i v i l e g e w i t h t h e only r e q u i r e ment being t h a t t h e i n t r a d e p a r t m e n t communication be one rendered w h i l e engaged i n an " o f f i c i a l duty". There ca.n be no doubt t h a t t h e h i r i n g and f i r i n g o f employees i s p a r t of t h e " o f f i c i a l duty" o f Montana Regional Health Centers. The t i t l e of Chapter 246, Laws of 1967, r e a d s : "An Act Expanding Duties and S e r v i c e s of t h e Dit~i.sion of Mental Hygiene of t h e S t a t e Board of Public I n s t i t u t i o n s by E s t a b l i s h i n g and Conducting Mental Health C l i n i c s and Community Comprehensive Mental Health Centers; C r e a t i n g Regional Mental Health Boards; Prov i d i n g f o r t h e Organization Thereof 9~ ik 7 2 . " (Emphasis supplied.) Thus i t becomes obvious t h e l e g i s l a t i v e i n t e n t was t o make t h e mental h e a l t h c e n t e r an arm of t h e s t a t e and h i r i n g and f i r i n g a f u n c t i o n of t h a t agency. Whether s t a t e m e n t s made by such p u b l i c o f f i c e r s i n r e l a t i o n t o t h e h i r i n g and f i r i n g of employees nay be s u b j e c t t o a b s o l u t e p r i v i l e g e has been answered i n t h e a f f i r m a t i v e many t i m e s . Under f a c t s s i m i l a r t o t h e i n s t a n t c a s e , t h e United S t a t e s Supreme Court i n B a r r v. >$atteo, 360 U.S. 564, 571, 79 S.Ct. 1335, 3 L ed 2d 1434.,1441, s t a t e d t h a t i n s o f a r a s a p u b l i c o f f i c e r was a c t i n g w i t h i n t h e scope of h i s a u t h o r i t y h i s communication was a b s o l u t e l y privileged. See a l s o : Newbury v. Love, 242 F.2d 372; ?.$organ v. Willingham, 424 F.2d 200; P r e b l e v. Johnson, 275 F.2d 275. The Court went on t o say why an a b s o l u t e p r i v i l e g e was e s s e n t i a l i n such a circumstance, q u o t i n g approvingly from Judge Learned Hand's d e c i s i o n i n Gregoire v: B i d d l e , 177 F.2d 579, 581: 1I 1 ; 9 i t i s impossible t o know whether t h e c l a i m : i s w e l l founded u n t i l t h e c a s e has been t r i e d , and t h a t t o submit a l l o f f i c i a l s , t h e innocent a s w e l l a s t h e g u i l t y , t o t h e burden of a t r i a l and t o t h e i n e v i t a b l e danger of i t s outcome, would dampen t h e a r d o r of a l l . b u t t h e most r e s o l u t e , o r t h e most i r r e s p o n s i b l e , i n t h e u n f l i n c h i n g dbscharge of t h e e i r dutiies *"' J ; .* * Since t h e i n t e r n a l communication was it it shin t h e proper d i s c h a r g e of an o f f i c i a l d u t y , i t enjoyed an a b s o l u t e p r i v i l e g e and could t h e r e f o r e n o t b e t h e s u b j e c t of l i b e l a c t i o n . F i n a l l y , t h e f a c t s s t i p u l a t e t h a t p l a i n t i f f wa.s on probationary s t a t u s . The purpose of such s t a t u s i s t o provide a b r i e f p e r i o d i n which t o measure t h e employee's a b i l i t y t o perform h i s job b e f o r e g r a n t i n g him a degree of job s e c u r i t y . I f the a p p r o p r i a t e s t a t e employer f e e l s t h a t t h e employee i s n o t measuring up d u r i n g t h i s p r o b a t i o n a r y period i t can dismiss t h a t employee w i t h o u t procedural due p r o c e s s . M.A.C. 2-3.34 (26)-S34160. P l a i n t i f f p l a c e s heavy r e l i a n c e on Perry v . Sindermann, 408 U.S. 593, 597, 92 S.Ct. 2694, 33 L ed 2d 570,577, f o r h i s c l a i m t h a t t h e e x e r c i s e of t h e r i g h t o f p r i v a c y c o n s t i t u t e s subs t a n t i v e due process and a s such i s c o n t r o l l i n g on t h e c o n s t i t u t . i o n a l i s s u e i n t h i s c a s e , even though h i s employee s t a t u s was probationary. I n Perry t h e Court s t a t e d : "* * * even though a person has no ' r i g h t f t o a v a l u a b l e governmental b e n e f i t and even though t h e government may deny him t h e b e n e f i t f o r any number of r e a s o n s , t h e r e a r e some r e a s o n s upon which t h e government may n o t r e l y . It may n o t deny a b e n e f i t t o a person on a b a s i s t h a t i n f r i n g e s h i s constitutionally protected i n t e r e s t s -L. I I * 8, So t h e i s s u e becomes whether t h e d i s m i s s a l of p l a i n t i f f i n f r i n g e d upon h i s s u b s t a n t i v e due p r o c e s s r i g h t of privacy. A t t h e o u t s e t , i t should be remembered t h a t t h e e x e r c i s e of cons t i t u t i o n a l r i g h t s i s not absolute. of S t a t e of Montana, 333 F.Supp. I n Weber v. Highway Commission 561, 564, Judge R u s s e l l E. Smith said : "* 9: +:His e x e r c i s e of h i s [employee's] r i g h t s t o freedom of speech 9 : ? d i d n o t f u r n i s h him w i t h ; a form of job insurance. k 9~ " ' * 4. * t h a t t h e motive f o r t h e by p l a i n t i f f ' s e x e r c i s e of h i s does n o t i n m opinion prevent y from d i s m i s s i n g him i f a v a l i d shown ik Ji J<" Ye f i r i n g was generated f i r s t amendment r i g h t s t h e Highway Department cause f o r d i s m i s s a l i s Thus where an o v e r r i d i n g government i n t e r e s t can be shown, t h e employee's e x e r c i s e of s u b s t a n t i v e c o n s t i t u t i o n a l r i g h t s i s n o t c o n t r o l l i n g i n t h e d i s p o s i t i o n of t h e c a s e , Here, t h e l e t t e r from t h e Chairman o f t h e Personnel Committee t o t h e D i r e c t o r of t h e E a s t e r n Montana Regional Mental Health Board, which forms t h e c o r e of lai in tiff's complaint, gave s e v e r a l r e a s o n s f o r r e q u e s t i n g p l a i n t i f f ' s d i s m i s s a l b u t t h e main i n g r e d i e n t was t h e b e l i e f by t h e Board of D i r e c t o r s t h a t t h e p l a i n t i f f ' s personal l i f e s t y l e was a d v e r s e l y a f f e c t i n g h i s a b i l i t y t o adequately d i s c h a r g e h i s p r o f e s s i o n a l d u t i e s . Specifi- c a l l y t h e Board f e l t t h a t because p l a i n t i f f was engaged i n counseling people w i t h p e r s o n a l problems, h i s own p e r s o n a l p h i l o s o p h i e s became r e l e v a n t t o h i s job performance. Since t h o s e p e r s o n a l p h i l o s o - p h i e s c o n f l i c t e d w i t h what t h e Board saw a s t h e g o a l s of t h e Mental Health Board, i t u t i l i z e d i t s a u t h o r i t y a s o v e r s e e r of employee performance t o recommend p l a i n t i f f ' s d i s m i s s a l . That when an employee's conduct a f f e c t s h i s a b i l i t y t o a d e q u a t e l y perform h i s d u t i e s he can be d i s c h a r g e d i s w e l l I n Bruns v. Pomerleau, 319 F.Supp. established. 58, 67, i t i s stated: * "ik J~IiThathe does i n h i s p r i v a t e l i f e , a s w i t h o t h e r p u b l i c employees, should n o t be h i s employer's concern u n l e s s i t c a n be shown t o a f f e c t i n some d e g r e e h i s e f f i c i e n c y i n t h e performance of h i s d u t i e s . ;k ? ;k" (Emphasis s u p p l i e d . ) ; See a l s o : P i c k e r i n g v. Board of Education, 391 U.S. 563, 88 S. C t . 1731, 20 L ed 2d 811; B a t t l e v. Mulholland, 439 F.2d 321; Pred v . Board of P u b l i c I n s t r u c t i o n , 415 F.2d 851. Accordingly, t h e judgment o f t h e d i s t r i c t c o u r t i s affirmed . Justice A 7 e Concur: I

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