BURGESS v SOFTICH

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No. 12850 I N THE SUPREME COURT OF THE STATE O M N A A F OTN 1975 LARRY W. BURGESS, P e t i t i o n e r and Respondent, T N SOFTICH, ADMINISTRATOR, LABOR OY STANDARDS DIVISION, M N A A DEPARTMENT OTN O LABOR AND INDUSTRY, F Respondent and A p p e l l a n t . Appeal from: D i s t r i c t Court of t h e E i g h t e e n t h J u d i c i a l D i s t r i c t , Honorable W. W. L e s s l e y , J u d g e p r e s i d i n g . Counsel o f Record: For Appellant : P e t e r 0 . M a l t e s e a r g u e d , H e l e n a , Montana F o r Respondent : Berg, Angel, A n d r i o l o and Morgan, Bozeman, Montana Gregory 0 . Morgan a r g u e d , Bozeman, Montana Submitted: Decided: Filed : 'P .' 1 ,+ jib J a n u a r y 9 , 1975 MAY 1 4 !: 95 Mr. 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. This i s an a p p e a l from a judgment e n t e r e d i n t h e d i s t r i c t c o u r t , county of G a l l a t i n , g r a n t i n g a w r i t of mandate d i r e c t i n g t h e a d m i n i s t r a t o r of t h e Labor Standards D i v i s i o n , Montana Department of Labor and I n d u s t r y t o g i v e p e t i t i o n e r L a r r y W. Burgess a f u l l h e a r i n g on a c l a i m f o r unpaid wages a s provided by s e c t i o n 411302, R.C.M. 1947. P e t i t i o n e r was employed a s a s e n i o r p r o c e s s e n g i n e e r a t Development Technology, I n c . , Bozeman, Montana, from May 1 5 , 1972, t o October 1 0 , 1973. O October 1 0 , 1973, p e t i t i o n e r ' s employment n was t e r m i n a t e d and p u r s u a n t t o t h e terms of h i s employment was given t h r e e months s e v e r a n c e pay. P e t i t i o n e r contends t h a t under t h e terms of h i s employment he was t o be p a i d a t t h e r a t e of $1,500 p e r month, b u t t h e employer, Development Technology, I n c . , r e f u s e d t o r e c o g n i z e t h i s and p a i d him s e v e r a n c e pay a t t h e r a t e of $1,166 p e r month. P e t i t i o n e r i s a t t e m p t i n g t o c o l l e c t t h e $1,000 which remains unpaid a s severance pay a t t h e claimed r a t e of $1,500 per month. O December 1 3 , 1973, p e t i t i o n e r a s s i g n e d h i s c l a i m f o r n unpaid wages t o t h e Montana Department of Labor and I n d u s t r y , Labor Standards D i v i s i o n , p u r s u a n t t o s e c t i o n 41, 1314.2, R.C.M. 1947. O A p r i l 11, 1974, an a g e n t o f t h e Labor Standards D i v i s i o n n informed p e t i t i o n e r t h a t no h e a r i n g would be h e l d a s r e q u e s t e d ; t h a t t h e a g e n c y ' s manpower and f i n a n c i a l r e s o u r c e s o b l i g a t e s t h e agency t o b e s e l e c t i v e i n i t s c a s e l o a d . F u r t h e r t h a t i t was d i s c r e t i o n a r y w i t h t h e department whether o r n o t t o hold an admini s t r a t i v e hearing. O A p r i l 22, 1974, p e t i t i o n e r f i l e d i n t h e d i s t r i c t c o u r t n a p e t i t i o n f o r an a l t e r n a t i v e w r i t of mandamus compelling t h e de- partment t o hold a f u l l a d m i n i s t r a t i v e h e a r i n g pursuant t o t h e Montana A d m i n i s t r a t i v e Procedure Act, T i t l e 82, Chap. 42, Revised Codes of Montana 1947, and t h e Montana A d m i n i s t r a t i v e Code t o determine t h e v a l i d i t y of p e t i t i o n e r ' s claim, o r t o show c a u s e why t h e department should n o t do so. O t h e same day, A p r i l 22, t h e d i s t r i c t c o u r t i s s u e d t h e n w r i t and s e t t h e h e a r i n g f o r May 20, 1974. c o n t i n u e d , u n t i l June 3 , 1974. Twice t h e h e a r i n g was The department f i l e d i t s motion t o quash May 31, 1974, (1) a l l e g i n g no c l e a r l e g a l d u t y , and (2) a n o t h e r p l a i n , speedy and adequate remedy a t law was a v a i l a b l e to petitioner. P e t i t i o n e r f i l e d a b r i e f i n support of t h e w r i t , and t h e department f i l e d a b r i e f i n support of i t s motion t o quash, p r i o r t o h e a r i n g on June 3 , 1974. O June 3 , 1974, t h e c o u r t heard t h e motion t o quash; n continued t h e h e a r i n g on p e t i t i o n e r ' s w r i t of mandate pending d e c i s i o n on t h e motion t o quash, and ordered f u r t h e r b r i e f s . O n June 21, 1974, t h e c o u r t denied t h e department's motion t o quash. By memorandum t h e c o u r t h e l d : t h a t s e c t i o n 41-1302, R.C.M. raises 1947, t h e q u e s t i o n of t h e department's s t a t u t o r y d u t y ; f u r t h e r , t h a t t h e department has adopted t h e r e l e v a n t s e c t i o n s of t h e Montana A d m i n i s t r a t i v e Act; t h a t i n t e g r a t i n g s e c t i o n 41-1314.2, R.C.M. 1947, on assignment of wage c l a i m s , makes t h e s i t u a t i o n c l e a r e r ; and then concluded: h hat a c t by t h e respondent [ t h e department] i s a c l e a r l e g a l duty under t h e law. The d i s c r e t i o n appears a f t e r t h e hearing, not before. II The d i s t r i c t c o u r t e n t e r e d judgment g r a n t i n g t h e w r i t of mandate on June 28, 1974. From t h a t judgment t h e department a p p e a l s , p r e s e n t i n g two i s s u e s f o r review: 1. The Labor Standards D i v i s i o n has no c l e a r l e g a l duty t o provide Larry W. Burgess w i t h an a d m i n i s t r a t i v e h e a r i n g . 2. A a l t e r n a t i v e , p l a i n , speedy and adequate remedy n i n t h e o r d i n a r y c o u r s e of t h e law e x i s t s . Appellant department c i t e s a u t h o r i t y s u p p o r t i n g t h e r u l e t h a t f o r mandamus t o l i e t h e r e must be a c l e a r l e g a l duty and mandamus w i l l n o t l i e t o c o n t r o l d i s c r e t i o n ; a l l p a r t i e s and t h i s Court a g r e e . Montana's Wage Payment Act, T i t l e 41, Chap. 1 3 , R.C.M. 1947, governs t h e payment of wages earned by employees by employers. S e c t i o n 41-1302, R.C.M. 1947, p r o v i d e s : "It s h a l l be t h e d u t y of t h e commissioner of l a b o r t o i n q u i r e d i l i g e n t l y f o r any v i o l a t i o n s of t h i s a c t , and t o i n s t i t u t e a c t i o n s f o r t h e c o l l e c t i o n of unpaid wages and f o r t h e p e n a l t i e s provided f o r such c a s e s a s h e may deem p r o p e r , and t o hekein, e n f o r c e g e n e r a l l y t h e p r o v i s i o n s of t h i s a c t . " (Emphasis o u r s ) . in Respondent, p e t i t i o r i n d i s t r i c t c o u r t , f a i l s i n h i s ~ argument t h a t I1 a c t i o n s " i n c l u d e " a d m i n i s t r a t i v e h e a r i n g s " a s used t o imply d i s c r e t i o n i n s e c t i o n 41-1302, R.C.M. 1947. Of t h e h e r e t o f o r e quoted p o r t i o n of s e c t i o n 41-1302, t h e f i r s t p a r t p l a c e s a mandatory d u t y on t h e commissioner of l a b o r t o II inquire d i l i - g e n t l y " , t h e second p a r t t o i n s t i t u t e " a c t i o n s " i n such c a s e s a s he may deem p r o p e r , and t h e t h i r d p a r t i s mandatory a s t o e n f o r c i n g The language of t h i s s e c t i o n i s c l e a r and unambiguous. the act. I t needs no i n t e r p r e t i v e h e l p from t h i s Court. The o n l y i n t e r p r e t a t i o n r e q u i r e d concerns t h e scope of "inquire diligently". S e c t i o n 41-1314.1, R.C.M. 1947, g i v e s t h e department powers of i n v e s t i g a t i o n t o determine v i o l a t i o n s o f t h e act, i n c l u d i n g power t o a d m i n i s t e r o a t h s , examine w i t n e s s e s under o a t h , i s s u e subpoenas, and t a k e d e p o s i t i o n s and a f f i d a v i t s i n any proceeding b e f o r e t h e department. This s e c t i o n i s compatible w i t h holding a hearing and/or i n v e s t i g a t i o n . Standing a l o n e i t does n o t r e s o l v e t h e i s s u e h e r e , a s contended by a p p e l l a n t . The t r i a l c o u r t and respondent d i s c u s s s e c t i o n 41-1314.2, R.C.M. 1947, y e t a p p e l l a n t dismissed i t v e r y c a s u a l l y i n i t s r e p l y b r i e f by t h e a s s e r t i o n t h a t i t o n l y a p p l i e s a f t e r t h e commissioner makes a "determination". T h i s s e c t i o n i s a u t h o r i t y t o t a k e wage assignments and s t a t e s i n p a r t : II Whenever t h e commissioner determines t h a t one o r more employees have c l a i m s f o r unpaid wages, he s h a l l , upon t h e w r i t t e n r e q u e s t of t h e employee, t a k e an assignment of t h e c l a i m i n t r u s t f o r such employee, and may m a i n t a i n any proceeding a p p r o p r i a t e t o e n f o r c e t h e c l a i m , i n c l u d i n g liquidated damages pursuant to this act. With the written consent of the assignor, the commissioner may settle or adjust any claim assigned pursuant to this section. " (Emphasis ours). Section 41-1314.2 is one that grants additional authority to the commissioner as it relates to taking assignment of claims in trust. The words "and may maintain any proceeding appropriate to enforce the claim" are words of authority to proceed as a trustee of the employee's claim and not to be construed as granting any discretionary status as it relates to enforcement of the claim or the law generally. It does, however, establish that a determination shall be made and thereafter on request the commissioner shall take I1 in trustr'and proceed in a proper manner. the One of the sections of/~ontanaWage Payment Act, passed the assignment of the claim in 1974, section 41-1314.4, does provide more legislative intent and (though not binding in the instant case as to content), read with section 41-1314.2, R.C.M. 1947, quoted above, adds additional authority for the commissioner to enforce claims in this language: "41-1314.4. Court enforcement of commissioner's determination. A determination by the commissioner of labor and industry made after a hearing as provided in Title 41, chapters 13 and 23, R.C.M. 1947, may be enforced by application by the commissioner to a district court for an order or judgment enforcing the determination, if the time provided to initiate judicial review by the employer has passed. The commissioner shall apply to the district court where the employer has its principal place of business, or in the first judicial district of the state. A proceeding under this section is not a review of the validity of the commissioner's determination." (Emphasis ours). Appellant argues this language only makes the process more discretionary, and that 11 the Commissioner may enforce his determination; he need not do so." (Emphasis ours). This argument suffers from the same problem as that argued as to section 41-1314.2 heretofore:---the failure to realize that this is a section primarily granting authority and not discretion. Section 41-1314.4 grants considerable authority to the commissioner in fact, it speaks to the authority the commissioner has in regard to judicial enforcement of his determinations including the fact that the commissioner's determination is not reviewable under the authority of the section. It speaks of a determination after hearing. Xeading the two sections together, we find a determination must be made and for judicial enforcement there must be a hearing. At this point appellant department's argument that the corrunissioner can make an effective "diligent inquiry" to reach a de~erminationby II investigation" only without a hearing, loses a great deal of its persuasion, if only because the determination cdnnot be judicially enforced without a hearing under the language o i section 41.1314.4, R.C.M. 1947. Appellant's argument that no duty to hold a hearing exists under any circumstances because of administrative problems or if a case arose where the commissioner clearly lacked jurisdiction or utter chaos and atronomical waste of state resources may result is not germane to the problem here and simply begs the question at hand. Further, the trial court and respondent have relied in part on the Montana Administrative Procedure Act, Title 82, Chap. 42, R.C.M. 1947 and the Montana Administrative Code. The Montana Administrative Procedure Act was passed in 1972 to implement Article VI, Section 7, 1972 Montana Constitution and provide the framework regarding functions, powers, and duties of executive agencies and to compile and publish the Montana Administrative Code. Each agency was responsible for providing its portion of the Code within the format prescribed. Section 82-4209, R.C.M. 1947, of the Administrative Procedure Act provides that in a contested case, all parties shall be afforded an opportunity for hearing after reasonable notice. contested case under section 82-4202(3), A means any proceeding before an agency in which a determination of legal rights, duties, or privileges of a party is required by law to be made after an opportunity for a hearing. Section 82-4202, R.C.M. provides: " ~ e f i n i t i o n s . For purposes of t h i s a c t : " (1) 'Agency' means any board, bureau, commission, department, a u t h o r i t y o r o f f i c e r of t h e s t a t e government a u t h o r i z e d by law t o make r u l e s and t o determine c o n t e s t e d c a s e s * * *. 1 "(3) Contested c a s e ' means any proceeding b e f o r e an agency i n which a determination of l e g a l r i g h t s , d u t i e s o r p r i v i l e g e s of a p a r t y i s r e q u i r e d by-law t o be made a f t e r an o p p o r t u n i t y f o r h e a r i n g . , , *I I , k (Emphasis o u r s ) . -. 1 . Section 82-4209, R..C.M. 1947, p r o v i d e s : II Notice-hearing-record. (1) I n a c o n t e s t e d c a s e , a l l p a r t i e s s h a l l be a f f o r d e d an o p p o r t u n i t y f o r h e a r i n g a f t e r r e a s o n a b l e n o t i c e . 11 The Montana Department of Labor and I n d u s t r y under i t s o r g a n i z a t i o n a l r u l e of t h e A d m i n i s t r a t i v e Code, 24-2.1-0100 (2) (b) , has charged i t s Labor Standards D i v i s i o n w i t h t h e "duty of enforcing a l l t h e laws of Montana r e l a t i n g t o hours of l a b o r , c o n d i t i o n s of l a b o r , p r o s e c u t i o n of employers who d e f a u l t i n payment of wages, p r o t e c t i o n of employees >k * *," The Labor Standards D i v i s i o n adopted model procedural r u l e s proposed by t h e a t t o r n e y g e n e r a l a t 24-3.14(2)P1410, Montana A d m i n i s t r a t i v e Code, a s contained i n T i t l e 1, Subc h a p t e r 2, Rules of Procedure 1-1.6(2)-P640 through 1-1.6(2)-P6320, Xontana A d m i n i s t r a t i v e Code. The model procedural r u l e s adopted by t h e Labor Standards D i v i s i o n comment f u r t h e r on t h e d e f i n i t i o n o f "contested c a s e " d e f i n e d i n s e c t i o n 82-4202(3), R.C.M. 1947, a t 1-1.6(2)-P607Oy (2) (a) , Montana A d m i n i s t r a t i v e Code : lI Contested e a s e s provide an o p p o r t u n i t y f o r a person t o o b t a i n a h e a r i n g b e f o r e an agency t o c o n t e s t t h e agency's intended a c t i o n a g a i n s t him o r a c t i o n which d i r e c t l y a f f e c t s him." (Emphasis o u r s ) . Subdivision (3) of 1-1,6(2)-P6070, g e n e r a l l y s t a t e s t h a t among t h e e s s e n t i a l requirements of a c o n t e s t e d c a s e a r e a f a i r h e a r i n g , t h e r i g h t t o j u d i c i a l review upon a proper r e c o r d , and a l l of t h e elements of due process. A p p e l l a n t department does n o t comment on t h e a p p l i c a t i o n o f t h e s e Montana code s e c t i o n s and Montana A d m i n i s t r a t i v e Code s e c t i o q s o t h e r t h a n t o a s s e r t t h a t t h e r e i s no a p p l i c a t i o n h e r e because a If c o n t e s t e d c a s e " i m p l i e s a h e a r i n g which t h e commissioner i s n o t by law r e q u i r e d t o provide a wage c l a i m a n t . This argument overlooks t h e f a c t t h a t t h e s e c t i o n s of t h e A d m i n i s t r a t i v e Code which make i t c l e a r t h a t a h e a r i n g must be g r a n t e d i n t h i s c a s e where t h e board r u l e d a g a i n s t t h e p e t i t i o n e r o r i t s a c t i o n d i r e c t l y a f f e c t s him, were v o l u n t a r i l y adopted by t h e department a s t h e law r e g u l a t i n g procedure b e f o r e i t . A p p e l l a n t f u r t h e r a l l e g e s t h a t respondent h a s an a l t e r n a t i v e , p l a i n , speedy and adequate remedy i n t h e o r d i n a r y c o u r s e a t l a w s o mandamus must f a i l i n any e v e n t . 9103, R.C.M. It c i t e s s e c t i o n 93- 1947, and numerous Montana c a s e s i n s u p p o r t . The a l t e r n a t i v e , p l a i n , speedy and adequate remedy proposed by a p p e l l a n t i s an a l t e r n a t e method of wage c o l l e c t i o n under t h e s t a t u t e t h a t does n o t i n v o l v e t h e Labor Department. I t a p p e a r s t h a t a p p e l l a n t h a s misconstrued s e c t i o n 93-9103, R.C.M. 1947. To deny mandamus under s e c t i o n 93-9103, t h e r e must b e a p l a i n , speedy and a d q u a t e remedy i n t h e o r d i n a r y c o u r s e of law, t h a t can be pursued by t h e p e t i t i o n e r t o compel t h e performance o f a n a c t which t h e law h a s imposed a s a d u t y , i . e . an a l t e r n a t e t o s u p e r s e d e mandamus t h a t i s competent t o a f f o r d t h e r e l i e f on t h e very s u b j e c t m a t t e r of p e t i t i o n e r ' s a p p l i c a t i o n f o r a w r i t of mandate. S t a t e ex r e l . F e d e r a l Land Bank v. Hays, 86 Mont. 58, 282 P. 32; S t a t e ex r e l . Brink v. McCracken, 9 1 Mont. 157, 6 P.2d 869. There- f o r e t h e a l t e r n a t i v e suggested by a p p e l l a n t , n o t b e i n g w i t h i n t h e contemplation of t h e d o c t r i n e of mandamus, must f a i l . W conclude t h a t i n c a s e s wherein t h e d e p a r t m e n t ' s pree l i m i n a r y i n q u i r y i s a g a i n s t t h e wage c l a i m a n t t h e r e i s a c l e a r , l e g a l d u t y , upon r e q u e s t , t o g r a n t a h e a r i n g . The judgment of the district court is affirmed. The cause is remanded to the district court for determination of attorney fees and costs. Justice We Concur: ................................... Chief Justice u - ................................ ....................... Justices. Mr. Chief Justice James T. IJarrison dissenting: I dissent. I do not feel that the laws with relation to payment of wages and protection of discharged employees should be interpreted to require the Commissioner of Labor to hold a hearing upon demand. If a claim asserted by a discharged employee, upon investigation by the Commissioner, appears to be without merit I would not burden the Commissioner by requiring him to hold a hearing to determine what he already knows - the claim lacks merit. Nothing is taken away from an employee, if he is not satisfied with the Commissioner's view he can institute a suit under the statutes and if he is successful he will recDver his wages, costs, penalty and attorney fees. # , Chief Justice. M r . J u s t i c e Castles dissenting: I dissent. The language of s e c t i o n 41-1302, R.C.M. 1947, i s c l e a r t h a t t h e a u t h o r i t y and d i s c r e t i o n o f t h e Labor Standards Division i s such t h a t no one can demand a formal hearing. The duty of t h e commissioner i s t o II inquire diligently". That i s a l l . For analogous wording i n a s t a t u t e , s e c t i o n 16-3101, R. C.M. 1947, r e q u i r e s a county a t t o r n e y t o " d i l i g e n t l y prosecute1'. Yet, we a l l r e c o g n i z e t h a t t h o s e words man t h a t he s h a l l e x e r c i s e his discretion. Here, we have t h e words " i n q u i r e d i l i g e n t l y " . Obviously, i t seems t o me, an i n v e s t i g a t i o n and i n s p e c t i o n would suffice. t h e remedy a t law f o r enforcement of l a b o r claims and wage c o l l e c t i o n under s e c t i o n 93-9103, R.C.M. i s adequate, and t h u s mandamus would n o t b e proper. 1947, Perhaps a w r i t of c e r t i o r a r i , b u t c e r t a i n l y n o t a w r i t of mandamus. State ex r e l . Thompson v. Babcock, 147 Mont. 46, 490 P.2d 808. S e c t i o n 41-1314.2, R.C.M. 1947, a u t h o r i z e s , i n e f f e c t , a power of a t t o r n e y t o t h e commissioner of l a b o r . This a l o n e d i c t a t e s t h a t t h e a c t i o n s of t h e commissioner a r e d i s c r e t i o n a l . Also, t h e d i s c u s s i o n of t h e e f f e c t of t h e Montana Administ r a t i v e Procedure Act on t h e meaning of s t a t u t e s p r e v i o u s l y enacted i s r e t r o a c t i v e reasoning. I do n o t a g r e e . I would r e v e r s e t h e d i s t r i c t c o u r t and deny t h e p e t i t i o n f o r a w r i t of mandamus. --.

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