MASSETT v THE ANACONDA COMPANY

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No. 80-153 I N THE SUPREME COURT O THE STATE OF M N A A F O T N 1981 HARRY J . MASSETT, P l a i n t i f f and A p p e l l a n t , THE ANACONDA COMPANY, a n d METROPOLITAN LIFE INSURANCE CO., 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 o f t h e ThPrd 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 County o f D e e r Lodge, The H o n o r a b l e R o b e r t Boydr J u d g e p r e s i d i n g . Counsel o f Record: For Appellant; Greg J . S k a k l e s a r g u e d , Anaconda, Montana For Respondents: P o o r e , R o t h , Robischon & R o b i n s o n , B u t t e , Montana R o b e r t A . P o o r e a r g u e d , B u t t e , Montana Submitted: F i l e d :-- 2 1961 ~ p r i 2 4 , 1981 l M r . J u s t i c e Frank B. Morrison, J r . , d e l i v e r e d t h e Opinion o f t h e Court P l a i n t i f f , Harry J . M a s s e t t , a l o n g - t i m e employee of t h e Anaconda Company, b r o u g h t an a c t i o n on May 1 0 , 1976, a g a i n s t d e f e n d a n t Anaconda Company f o r a n a l l e g e d b r e a c h of a c o l l e c t i v e b a r g a i n i n g agreement. A f t e r engaging i n d i s c o - v e r y , Anaconda moved f o r summary judgment. The Deer Lodge County D i s t r i c t C o u r t g r a n t e d t h e motion on F e b r u a r y 2 2 , 1980. P l a i n t i f f appeals. For r e a s o n s d i s c u s s e d below, w e v a c a t e t h e o r d e r of t h e D i s t r i c t C o u r t g r a n t i n g summary judgment . P l a i n t i f f was employed by t h e Anaconda Company from 1944 t o 1975. He c o n t e n d s t h a t he became u n a b l e t o work due t o i l l n e s s i n J a n u a r y of 1975. I n A p r i l o r May 1975, p l a i n t i f f f i r s t d i s c u s s e d t h e p o s s i b i l i t y of r e c e i v i n g a d i s a b i l i t y p e n s i o n w i t h Anaconda Company p e r s o n n e l . S e c t i o n 2 . 2 of t h e p e n s i o n p l a n p r o v i d e s p e n s i o n b e n e f i t s f o r a n employee who h a s become t o t a l l y d i s a b l e d by b o d i l y i n j u r y o r d i s e a s e s o as t o be p r e v e n t e d "from engaging i n any s u b s t a n t i a l g a i n f u l work which, i n t h e o p i n i o n o f a q u a l i f i e d p h y s i c i a n a p p o i n t e d by t h e Employing Company, w i l l be permanent and c o n t i n u o u s d u r i n g t h e remainder of t h e Empl-oyee's l i f e t i m e " and which i s n o t s e l f - i n f l i c t e d , t h e r e s u l t of s e r v i c e i n t h e armed f o r c e s o r t h e r e s u l t of criminal activity. I n October of 1975, p l a i n t i f f a p p l i e d f o r a d i s a b i l i t y pension f o r t h e f i r s t t i m e . P a r t of t h e a p p l i c a t i o n form s u p p l i e d by t h e Company was t o be f i l l e d o u t by a p h y s i c i a n . P l a i n t i f f took t h e form t o D r . John Romito who had been t r e a t i n g h i s c o n d i t i o n . The form which D r . Romito completed c o n t a i n e d a n e r r o n e o u s d e f i n i t i o n of t o t a l d i s a b i l i t y . I t defined the concept i n t e r m s of i n a b i l i t y due t o d i s e a s e o r b o d i l y i n j u r y t o p u r s u e any - g a i n f u l employment o r o c c u p a t i o n w h a t s o e v e r . The m e d i c a l form c o n t a i n e d a l t e r n a t e boxes f o r t h e examining p h y s i c i a n t o check, s p e c i f y i n g e i t h e r t h a t t h e p a t i e n t was o r was n o t t o t a l l y and permanently d i s a b l e d . Dr. Romito d i d n o t check e i t h e r box, b u t r a t h e r a t t a c h e d a n o t e t o t h e form which read: " I do n o t f e e l t h i s p a t i e n t can be c o n s i d e r e d t o t a l l y d i s a b l e d b u t he i s n o t a b l e t o resume h i s normal employment a s a smelterman due t o e x p o s u r e t o i n d u s t r i a l fumes." The Company p r o c e s s e d t h e a p p l i c a t i o n f o r d i s a b i l i t y b e n e f i t s , b u t u l t i m a t e l y r e j e c t e d i t i n November 1975. I n December 1975, p l a i n t i f f ' s a t t o r n e y r e q u e s t e d new m e d i c a l forms c o n t a i n i n g a c o r r e c t d e f i n i t i o n of t o t a l and permanent d i s a b i l i t y . Anaconda r e p r e s e n t a t i v e R. L. Brown p r o v i d e d t h o s e forms i n a l e t t e r d a t e d J a n u a r y 5 , 1976. On t h e a d v i c e of c o u n s e l p l a i n t i f f came t o t h e Company's p e r s o n n e l o f f i c e on J a n u a r y 26, 1976, and spoke t o t h e Company r e p r e s e n t a t i v e , Harry McKernan. Plaintiff told McKernan t h a t he would l i k e t o r e c e i v e a " c o n d i t i o n a l " 30y e a r r e t i r e m e n t p e n s i o n u n t i l such time a s he c o u l d r e a p p l y f o r and b e g i n r e c e i v i n g b e n e f i t s under a d i s a b i l i t y p e n s i o n . Under s e c t i o n 2.6 of t h e p e n s i o n p l a n , any employee who h a s completed 30 y e a r s o r more of c o n t i n u o u s s e r v i c e t o t h e Company b u t who h a s n o t a t t a i n e d t h e a g e of 60 may r e t i r e and r e c e i v e a s o - c a l l e d "30-year" p e n s i o n . On December 30, 1975, p l a i n t i f f ' s a t t o r n e y had w r i t t e n McKernan a l e t t e r i n f o r m i n g t h e Company t h a t he had a d v i s e d h i s c l i e n t t o a p p l y f o r t h e 30-year p e n s i o n and t h a t t h e Company s h o u l d n o t c o n s t r u e t h i s a p p l i c a t i o n a s a w a i v e r of p l a i n t i f f ' s c l a i m t o a d i s a b i l i t y pension. Plaintiff asserts that his poor f i n a n c i a l c o n d i t i o n and t h e Company's d e n i a l of h i s o r i g i n a l a p p l i c a t i o n f o r a d i s a b i l i t y pension n e c e s s i t a t e d h i s a p p l y i n g f o r a 30-year p e n s i o n . P l a i n t i f f ' s retirement became e f f e c t i v e F e b r u a r y 1, 1976. On F e b r u a r y 6, 1976, D r . R o b e r t Burroughs, a c a r d i o l o g i s t i n Spokane, Washington, completed a d i s a b i l i t y p e n s i o n form c o n t a i n i n g t h e c o r r e c t d e f i n i t i o n of t o t a l d i s a b i l i t y and checked t h e box on t h e form i n d i c a t i n g t h a t p l a i n t i f f was t o t a l l y and permanently d i s a b l e d . T h a t m e d i c a l form was r e - m i t t e d t o t h e Company on F e b r u a r y 1 7 , 1976. On March 24, 1976, t h e Company responded t h a t , inasmuch a s p l a i n t i f f had v o l u n t a r i l y a p p l i e d f o r and w a s r e c e i v i n g a 30-year p e n s i o n , t h e q u e s t i o n of h i s e l i g i b i l i t y f o r a d i s a b i l i t y p e n s i o n had become "academic." The Company r e f u s e d t o p r o c e s s t h e c l a i m for disability benefits. P l a i n t i f f then f i l e d t h e p r e s e n t action. The t r i a l c o u r t g r a n t e d summary judgment t o t h e Anaconda Company b e c a u s e , i n i t s view, r e c e i p t of t h e 30-year p e n s i o n b a r r e d a p p l i c a t i o n f o r a d i s a b i l i t y p e n s i o n and f u r t h e r t h a t t h e p l a i n t i f f ' s f a i l u r e t o implement t h e c o n t r a c t ' s g r i e v a n c e p r o c e d u r e b a r r e d t h e maintenance of a n a c t i o n i n t h e c o u r t s . The f o l l o w i n g i s s u e s a r e d i s p o s i t i v e of t h i s a p p e a l : 1. May, under t h e t e r m s of t h e c o l l e c t i v e b a r g a i n i n g agreement, a r e t i r e e a p p l y f o r a d i s a b i l i t y p e n s i o n a f t e r h e h a s been g r a n t e d a 30-year p e n s i o n i f he was d i s a b l e d b e f o r e he r e t i r e d ? 2. W a s t h e Company g u i l t y of bad f a i t h i n r e j e c t i n g p l a i n t i f f ' s c l a i m f o r d i s a b i l i t y b e n e f i t s on grounds t h a t h i s r e c e i p t of a 30-year r e t i r e m e n t b a r r e d a d i s a b i l i t y pension, t h e r e b y e n t i t l i n g t h e p l a i n t i f f t o bypass t h e g r i e v a n c e p r o c e d u r e and l i t i g a t e i n t h e D i s t r i c t C o u r t ? A t t h e o u t s e t , we n o t e t h a t s u b j e c t m a t t e r j u r i s d i c t i o n o v e r t h i s case d e r i v e s from s e c t i o n 301.(a) of t h e Labor Management R e l a t i o n s A c t o f 1947 (LMRA) , (Taf t H a r t l e y A c t ) c o d i f i e d a t 29 U.S.C. §185(a). , Although, g e n e r a l l y t h e N a t i o n a l Labor R e l a t i o n s A c t p r e e m p t s s t a t e and f e d e r a l c o u r t j u r i s d i c t i o n t o remedy c o n d u c t t h a t i s p e r m i t t e d o r p r o h i b i t e d by t h e A c t (San Diego B u i l d i n g T r a d e s Counci.1 v . Garmon ( 1 9 5 9 ) , 359 U.S. 236, 79 S . C t . 773, 3 L.Ed.2d t h e r e a r e a number o f s i g n i f i c a n t e x c e p t i o n s . 775), Section 301(a) of t h e L R e x p r e s s l y a u t h o r i z e s s u i t s i n f e d e r a l MA c o u r t f o r t h e enforcement of a c o l l e c t i v e b a r g a i n i n g agreement. F e d e r a l j u r i s d i c t i o n i s n o t , however, e x c l u s i v e . I t has been s p e c i f i c a l l y h e l d t h a t s t a t e c o u r t s have c o n c u r r e n t j u r i s d i c t i o n u n d e r s e c t i o n 301 t o e n t e r t a i n a s u i t by a n i n d i v i d u a l employee f o r b r e a c h o f a c o l l e c t i v e b a r g a i n i n g agreement. Co. L o c a l 174 T e a m s t e r s Union e t ( 1 9 6 2 ) , 369 U.S. 95, 1 0 1 , 82 S . C t . a l . v. Lucas F l o u r 571, 7 L.Ed.2d C h a r l e s Dowd Box Co. v . C o u r t n e y ( 1 9 6 2 ) , 368 U.S. S.Ct. 519, 7 L.Ed.2d 483. 593; 502, 82 The s u b s t a n t i v e r u l e s g o v e r n i n g t h e i n t e r p r e t a t i o n of c o l l e c t i v e bargaining agreements a r e c o n t r o l l e d by f e d e r a l law which t h e f e d e r a l c o u r t s m u s t f a s h i o n from t h e p o l i c y u n d e r l y i n g t h e n a t i o n a l l a b o r l a w s . T e x t i l e Workers Union v . L i n c o l n M i l l s 456-457, 77 S . C t . ? i d l 917-18 m, 1 L.Ed.2d ( 1 9 5 7 ) , 353 U.S. 972, 980-981. 448, The c o u r t s may, however, r e s o r t t o c o m p a t i b l e s t a t e l a w t o f i n d t h e r u l e t h a t w i l l best effectuate federal policy. M i l - l s , s u p r a , 1 L.Ed.2d Li.ncol-n a t 981. E x c e p t i n t h e r a t h e r n a r r o w f i e l d of s u i t s t o compel performance of a r b i t r a t i o n agreements workers v. Warrior 578-579, 80 S . C t . & Gulf Nav. Co. 1 3 4 7 , 4 L.Ed.2d (see U n i t e d S t e e l - ( 1 9 6 0 ) , 363 U.S. 574, 1 4 0 9 ) , w e h a v e f o u n d no f e d e r a l a u t h o r i t y " s u g g e s t i n g t h a t t h e n e b u l o u s body o f d e c i s i o n a l law e n v i s i o n e d i n L i n c o l n M i l l s was t o be formul a t e d i n d e r o g a t i o n of t h e common law of c o n t r a c t s " , Lee Washington, I n c . v. Washington Motor Truck T r a n s p o r t a t i o n Employees H e a l t h and W e l f a r e T r u s t ( D . C . A.2d 604. App. 1 9 7 3 ) , 310 Hence, w e see no r e a s o n n o t t o a p p l y t h e same r u l e s of c o n s t r u c t i o n i n c a s e s i n v o l v i n g c o l l e c t i v e b a r g a i n i n g c o n t r a c t s a s we a p p l y i n c a s e s d e a l i n g w i t h c o n t r a c t law g e n e r a l l y . See C l a r k e v. Ward Baking Co. (D.C.App. 1963), 1 9 1 A.2d 450, 452. W t u r n now t o t h e f i r s t i s s u e r a i s e d by t h e p l a i n t i f f e on a p p e a l . The p l a i n language of s e c t i o n 2.2 of t h e p e n s i o n p l a n e n t i t l e s a n employee t o a d i s a b i l i t y p e n s i o n i f h e becomes t o t a l l y and permanently d i s a b l e d and i f he h a s completed t e n y e a r s of c o n t i n u o u s s e r v i c e t o t h e Company. I n o t h e r words, a worker w i t h t h e r e q u i s i t e number of y e a r s of s e r v i c e h a s a v e s t e d r i g h t t o a d i s a b i l i t y p e n s i o n i f h e c a n show t h a t he became d i s a b l e d w h i l e employed w i t h t h e Company. The r e c o r d shows t h a t t h e p l a i n t i f f had logged w e l l i n e x c e s s of t e n y e a r s of c o n t i n u o u s s e r v i c e t o Anaconda a s of t h e d a t e he c e a s e d working f o r t h e Company. Plaintiff c l a i m s t o have become d i s a b l e d w h i l e he was i n t h e employ of t h e Company. I f he c a n p r o v e t h a t c o n t e n t i o n , he i s en- t i t l e d to disability benefits. The Company a r g u e s , however, t h a t t h e p l a i n t i f f r e n d e r e d h i m s e l f i n e l i g i b l e f o r any d i s a b i l i t y b e n e f i t s by a p p l y i n g f o r a 30-year p e n s i o n . H e t h e r e b y r e l i n q u i s h e d h i s employ- ment s t a t u s , Anaconda a r g u e s , and became a " p e n s i o n e r " . Only employee^"^ t h e Company i n s i s t s , may a p p l y f o r d i s a b i l i t y benefits. W disagree. e P l a i n t i f f ' s a c c e p t a n c e of a 30-year p e n s i o n does n o t c o n s t i t u t e a n e l e c t i o n of remedies nor a waiver. A s a l e g a l d o c t r i n e , e l e c t i o n i s t h e e x e r c i s e of a c h o i c e of an a l t e r n a t e and i n c o n s i s t e n t r i g h t o r c o u r s e of action. F u l l knowledge of t h e n a t u r e of i n c o n s i s t e n t r i g h t s and of t h e n e c e s s i t y of c h o o s i n g between them a r e e l e m e n t s of e l e c t i o n . A. E c k s t e i n v . Caldwell ( 1 9 3 8 ) , 61 R . I . 142, 2 0 0 434, 437 ( e l e c t i o n of remedies p r e s u p p o s e s t h e knowledge of a l t e r n a t i v e s w i t h a n o p p o r t u n i t y f o r c h o i c e ) ; F r e d e r i c k s o n v. Nye ( 1 9 2 4 ) , 110 Ohio S t . 459, 1 4 4 N . E . 299, 301 ( i n o r d e r t h a t e l e c t i o n of one r e m e d i a l r i g h t s h a l l b a r a n o t h e r , t h e r i g h t s must be i n c o n s i s t e n t and t h e e l e c t i o n must be made w i t h knowledge). P l a i n t i f f ' s a p p l i c a t i o n f o r a 30-year r e t i r e m e n t can i n no s e n s e be u n d e r s t o o d a s a n e l e c t i o n of one o u t of two p o t e n t i a l a l t e r n a t e r e m e d i e s t o t h e d i s a b i l i t y he a l l e g e d l y s u f f e r e d w h i l e on t h e job. The o n l y d i s a b i l i t y - r e l a t e d remedy he s o u g h t was a d i s a b i l i t y p e n s i o n . His c l a i m t o t h e 30-year p e n s i o n r e s t e d on a d i f f e r e n t f a c t u a l b a s i s , namely h i s 30 y e a r s of s e r v i c e t o t h e Company. In s h o r t , t h e d o c t r i n e of e l e c t i o n of r e m e d i e s d o e s n o t a p p l y f o r t h e s i m p l e r e a s o n t h a t t h e r e c o r d r e v e a l s no a l t e r n a t e r e m e d i e s from which t o e l e c t . I f t h e p l a i n t i f f was i n d e e d d i s a b l e d w h i l e he was s t i l l a n employee w i t h t h e Company, t h e o n l y way he c o u l d l o s e h i s v e s t e d r i g h t t o a d i s a b i l i t y p e n s i o n would be by waiving that right. By d e f i n i t i o n waiver i s t h e i n t e n t i o n a l r e l i n - quishment of a known r i g h t . The r e c o r d shows t h a t t h e p l a i n t i f f h a s n o t waived h i s c l a i m t o a d i s a b i l i t y p e n s i o n . H e e x p r e s s l y informed Anaconda r e p r e s e n t a t i v e McKernan t h a t he wanted t o t a k e o u t a 30-year p e n s i o n " c o n d i t i o n a l l y " i.e., -- u n t i l he c o u l d b e g i n r e c e i v i n g a d i s a b i l i t y p e n s i o n . I n a d d i t i o n , h i s a t t o r n e y s e n t a l e t t e r t o t h e Company s t a t i n g t h a t h i s c l i e n t ' s a p p l i c a t i o n f o r a 30-year r e t i r e ment, was n o t t o be u n d e r s t o o d a s a w a i v e r of h i s c l a i m t o d i s a b i l i t y benefits. Clearly the p l a i n t i f f did not intend t o r e l i n q u i s h any r i g h t he may have had t o a d i s a b i l i t y p e n s i o n . The mere f a c t t h a t t h e Company r e p r e s e n t a t i v e s contended t h a t r e c e i p t of one k i n d of p e n s i o n p r e c l u d e d a p p l i c a t i o n f o r a n o t h e r k i n d d i d n o t d e p r i v e t h e p l a i n t i f f and h i s a t t o r n e y of t h e r i g h t t o i n t e r p r e t t h e p r o v i s i o n s of t h e pension plan d i f f e r e n t l y . The p l a i n t i f f d o e s n o t c l a i m t h a t he i s e n t i t l e d t o t h e c u m u l a t i v e b e n e f i t s of b o t h t h e d i s a b i l i t y and t h e 30-year pension. P l a i n t i f f seeks a d i s a b i l i t y pension because t h e b e n e f i t s a r e g r e a t e r t h a n t h e b e n e f i t s a v a i l a b l e under t h e 30-year p e n s i o n p l a n . He l a i d c l a i m t o t h e 30-year p e n s i o n " c o n d i t i o n a l l y " and w i l l o n l y be l i m i t e d t o t h a t p l a n i f h e cannot q u a l i f y f o r d i s a b i l i t y benefits. The n e x t i n q u i r y i s whether t h e Company a c t e d i n good f a i t h i n refusing t o process the application. Anaconda re- j e c t e d t h e p l a i n t i f f ' s a p p l i c a t i o n b e c a u s e , i n i t s view, t h e p l a i n t i f f had v o l u n t a r i l y r e l i n q u i s h e d h i s employment s t a t u s and had become a " p e n s i o n e r " by a p p l y i n g f o r a 30-year tirement. re- A s s u c h , t h e Company contended p l a i n t i f f was no l o n g e r e l i g i b l e f o r a d i s a b i l i t y p e n s i o n b e c a u s e under s e c t i o n 2 . 2 of t h e p e n s i o n p l a n o n l y "employees" a r e e l i g i b l e for disability. The e s s e n t i a l i n q u i r y i s whether Anaconda a s s e r t e d t h a t d e f e n s e t o p l a i n t i f f ' s a p p l i c a t i o n i n good f a i t h . If the Company a c t e d i n bad f a i t h i n r e f u s i n g t o implement a r b i t r a t i o n , t h e n w e would a l l o w t h e D i s t r i c t C o u r t a c t i o n t o go forward w i t h o u t r e s o r t t o t h e p r o c e d u r e r e q u i r e d by t h e c o l l e c t i v e b a r g a i n i n g agreement. W e f i n d t h e r e c o r d t o be d e v o i d of any i n d i c a t i o n t h a t t h e Company a c t e d i n bad f a i t h . There i s no e v i d e n c e of any p e r s o n a l enmity towards, n o r of any d i s c r i m i n a t i o n a g a i n s t , the plaintiff. W e have c o n s i d e r e d Anaconda's d e f e n s e on t h e m e r i t s . Because we today d i s a g r e e w i t h t h e Company's l e g a l p o s i t i o n , d o e s n o t mean t h a t t h e Company had no r i g h t t o a s s e r t t h a t position. Where t h e r e c o r d l a c k s any a f f i r m a t i v e e v i d e n c e of bad f a i t h , w e w i l l n e i t h e r presume nor a c c e p t c o n c l u s o r y a s s e r t i o n s t h a t a l i t i g a n t ' s claim o r defense i s u n j u s t i f i e d unless i t i s s o p a t e n t l y f r i v o l o u s a s t o p l a i n l y e x c l u d e any r e a s o n a b l e merit. H e r e we h o l d t h a t Anaconda's r e f u s a l t o p r o c e s s p l a i n t i f f ' s c l a i m was made i n good f a i t h . The l e g a l q u e s t i o n o f p l a i n t i f f ' s e l i g i b i l i t y f o r benef i t s w a s a matter f o r j u d i c i a l determination. Now t h a t t h e d e t e r m i n a t i o n h a s been made, a r b i t r a t i o n p r o c e d u r e s must f o l l o w . S e c t i o n 5 . 2 of t h e p e n s i o n p l a n p r o v i d e s a g r i e v a n c e p r o c e d u r e t o s e t t l e any m e d i c a l d i s p u t e c o n c e r n i n g a n employee's e l i g i b i l i t y f o r d i s a b i l i t y pensions. Under t h a t s e c t i o n t h e Company must r e f e r any d i s p u t e c o n c e r n i n g a n a p p l i c a n t ' s d i s a b i l i t y t o a m e d i c a l board f o r r e s o l u t i o n . A c c o r d i n g l y , w e remand t h e c a s e t o t h e ~ i s t r i c C o u r t t w i t h d i r e c t i o n s t o o r d e r t h e Anaconda Company t o p r o c e e d w i t h arbitration. W concur: e Chief J u s t i c e M r . J u s t i c e D a n i e l J. S h e a d i s s e n t s and w i l l f i l e a d i s s e n t i n g opinion later.

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