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No. 13281 I N THE SUPREME COURT O THE STATE OF M N A A F OTN 1976 THE STATE O MONTANA, F A p p l i c a n t and R e l a t o r , THE DISTRICT COURT OF THE THIRTEENTH JUDICIAL DISTRICT, and t h e HON. CHARLES LUEDKE , ORIGINAL PROCEEDING: Counsel of Record : For R e l a t o r : Anderson, Symmes, Forbes, P e e t e & Brown, B i l l i n g s , Montana James L. J o n e s a r g u e d , B i l l i n g s , Montana J. Michael Young a r g u e d , Helena, Montana F o r Respondents: Keefer and Roybal, B i l l i n g s , Montana N e i l S. K e e f e r a r g u e d , B i l l i n g s , Montana C a t e , Lynaugh, F i t z g e r a l d and Huss, B i l l i n g s , Montana George Huss a r g u e d , B i l l i n g s , Montana Submitted: March 17, 1976 Decided: lidffi'td Filed : i2 1976 Mr. J u s t i c e Frank I . Haswell d e l i v e r e d t h e Opinion of t h e C o u r t . T h i s c a s e i s b e f o r e t h e C o u r t on a n a p p l i c a t i o n f o r a r e m e d i a l w r i t f i l e d by t h e S t a t e of Montana t o p r o h i b i t f u r t h e r p r o c e e d i n g s i n t h e t h i r t e e n t h j u d i c i a l d i s t r i c t c o u r t i n Cause No. 65626, Azure v. C i t y o f B i l l i n g s and S t a t e of Montana. The b a s i c i s s u e r a i s e d i n t h i s proceeding concerns t h e l i a b i l i t y of a c i t y and t h e s t a t e f o r t h e n e g l i g e n t a c t s of c i t y p o l i c e o f f i c e r s i n view o f A r t . 11, 818, 1972 Montana C o n s t i t u t i o n and t h e Montana Comprehensive S t a t e I n s u r a n c e P l a n and T o r t Claims A c t , s e c t i o n 82-4301 e t s e q . , Tort C l a i m s A c t ) 1947 ( h e r e i n a f t e r c a l l e d R.C.M. . The p l a i n t i f f i n No. 65626, J e f f r e y Azure, w a s i n j u r e d i n 1974 when b e a t e n i n a b a r i n t h e C i t y of B i l l i n g s . For some t i m e f o l l o w i n g t h e b e a t i n g h e wandered a i m l e s s l y a l o n g t h e s t r e e t s of B i l l i n g s i n what a p p e a r e d t o be a drunken s t u p o r . A local r e s i d e n t o b s e r v e d Azure a c t i n g s u s p i c i o u s l y and c a l l e d t h e B i l l i n g s p o l i c e department. Two o f f i c e r s a r r i v e d a t t h e s c e n e and a r r e s t e d Azure on a c h a r g e o f drunkenness. Azure w a s booked i n t o t h e c i t y j a i l and h e l d t h e r e f o r a p p r o x i m a t e l y s i x t e e n h o u r s b e f o r e b e i n g taken t o a l o c a l h o s p i t a l f o r treatment. The p l a i n t i f f a l l e g e s h e s u f f e r e d s e r i o u s and permanent b r a i n damage as a r e s u l t o f t h e b e a t i n g and f a i l u r e of t h e C i t y p o l i c e o f f i c e r s t o t a k e him t o a h o s p i t a l f o r m e d i c a l care. P r i o r t o commencing t h i s l a w s u i t , Azure f i l e d a t o r t claim with t h e City. When no a c t i o n w a s t a k e n w i t h i n s i x t y d a y s , he f i l e d t h i s s u i t a g a i n s t t h e C i t y . T h e r e a f t e r Azure f i l e d a t o r t c l a i m a g a i n s t t h e S t a t e of Montana " t o p l a c e t h e S t a t e of Montana on n o t i c e of t h i s c l a i m i n t h e e v e n t t h a t t h e d o c t r i n e s t a t e d i n K i n g f i s h e r v . C i t y of F o r s y t h , 132 Mont. 39, 45, 314 P.2d 876 (1957) i s s t i l l v i a b l e . " More t h a n s i x t y d a y s f o l l o w - i n g , p l a i n t i f f f i l e d a n amended c o m p l a i n t a d d i n g t h e S t a t e as a defendant. S u b s t a n t i a l d i s c o v e r y was u n d e r t a k e n , i n c l u d i n g t h e t a k i n g o f a d e p o s i t i o n from t h e c h i e f of p o l i c e of t h e C i t y . The S t a t e moved t o be d i s m i s s e d and t h e C i t y moved f o r summary judgment. Azure r e s i s t e d b o t h m o t i o n s , c o n t e n d i n g t h a t b o t h t h e C i t y and S t a t e a r e l i a b l e . The S t a t e contended t h a t t h e C i t y i s v i c a r i o u s l y l i a b l e f o r t h e a c t s of i t s employees, and t h a t no m a s t e r - s e r v a n t r e l a t i o n s h i p e x i s t s between t h e S t a t e and members o f t h e B i l l i n g s P o l i c e Department. The C i t y contended t h a t p o l i c e o f f i c e r s of m u n i c i p a l c o r p o r a t i o n s a r e a g e n t s of t h e S t a t e and n o t o f t h e C i t y and t h a t o n l y t h e S t a t e c a n be l i a b l e under t h e d o c t r i n e of r e s p o n d e a t s u p e r i o r . The l a t t e r argument i s based on o u r h o l d i n g s i n K i n g f i s h e r and a l a t e r s u p p o r t i n g d e c i s i o n , B o e t t g e r v. Emp. L i a b i l i t y Assur. Corp., 158 Mont. 258, 262, 490 P.2d 717. On J a n u a r y 1 6 , 1976, t h e d i s t r i c t c o u r t g r a n t e d t h e C i t y ' s motion f o r summary judgment i n i t s f a v o r and d e n i e d t h e S t a t e ' s motion t o d i s m i s s . P l a i n t i f f Azure a p p e a l e d from t h e d e c i s i o n h o l d i n g t h e City not liable. The S t a t e a p p l i e d t o t h i s C o u r t f o r r e l i e f i n o r d e r t o e s t a b l i s h i t s freedom from l i a b i l i t y and o b v i a t e i t s d e f e n s e i n t h e main a c t i o n . On F e b r u a r y 2 4 , 1976, w e e n t e r e d an o r d e r accepting j u r i s d i c t i o n , c o n s o l i d a t i n g t h i s o r i g i n a l proc e e d i n g w i t h t h e pending a p p e a l , and s t a y i n g f u r t h e r p r o c e e d i n g s i n the d i s t r i c t court. The i s s u e s p r e s e n t e d a r e : 1. May t h e C i t y of B i l l i n g s be h e l d l i a b l e f o r t h e neg- l i g e n t a c t s of p o l i c e o f f i c e r s employed by i t ? 2. May t h e S t a t e of Montana be h e l d l i a b l e f o r t h e neg- l i g e n t a c t s of p o l i c e o f f i c e r s employed by Montana m u n i c i p a l i t i e s ? The arguments of a l l p a r t i e s f o c u s on two a r e a s : the v i t a l i t y of t h e K i n g f i s h e r and B o e t t g e r d e c i s i o n s a s t h e y r e l a t e t o m u n i c i p a l l i a b i l i t y f o r p o l i c e c o n d u c t ; and t h e a b r o g a t i o n i n Montana of t h e d o c t r i n e o f s o v e r e i g n immunity t h r o u g h t h e 1972 Montana C o n s t i t u t i o n and t h e T o r t C l a i m s Act. K i n g f i s h e r , d e c i d e d i n 1957, s t a n d s f o r t h e p o s i t i o n l o n g adhered t o by t h e c o u r t s and l e g i s l a t u r e of t h i s s t a t e p r i o r t o 1972 t h a t t h e s o v e r e i g n was immune from s u i t i n t h e a b s e n c e o f i t s c o n s e n t t o be sued. I n an a c t i o n a g a i n s t a c i t y and i t s policeman f o r wrongful d e a t h , it was h e l d t h a t c i t y p o l i c e f u n c t i o n s w e r e "governmental" f u n c t i o n s o r d a i n e d by and f o r t h e b e n e f i t of t h e state a t large. Therefore, " * * * a c i t y policeman i n e n f o r c i n g c i t y o r d i n a n c e s i s a c t i n g a s an a g e n t o f t h e s t a t e , and * * * t h e c i t y i s t h e r e f o r e n o t respon- s i b l e i n damages f o r h i s c o n d u c t . " Taking t h e "agency" f a c t o r one s t e p f u r t h e r , t h i s C o u r t s t a t e d i n Boettger: "Our d e c i s i o n i n K i n g f i s h e r i s n o t bottomed on t h e p r i n c i p l e of s o v e r e i g n immunity a t a l l ; on t h e c o n t r a r y it rests on t h e a b s e n c e of a p r i n c i p a l - a g e n t r e l a t i o n s h i p between t h e c i t y and t h e policemen, t h e r e b y r e n d e r i n g t h e d o c t r i n e of r e s p o n d e a t s u p e r i o r i n a p p l i c a b l e . " The C o u r t a f f i r m e d t h e d i s m i s s a l o f a c i t y and i t s mayor and councilmen from a wrongful d e a t h a c t i o n " b e c a u s e t h e n e c e s s a r y e l e m e n t of agency i s l a c k i n g . " Subsequent t o t h e s e c a s e s t h e 1972 Montana C o n s t i t u t i o n was r a t i f i e d . Art. 11, S18 s t a t e s i n r e l e v a n t p a r t : "The s t a t e , c o u n t i e s , c i t i e s , towns, and a l l o t h e r l o c a l governmental e n t i t i e s s h a l l have no immunity from s u i t f o r i n j u r y t o a p e r s o n o r p r o p e r t y * * *." The T o r t Claims Act of 1973 implements t h e q u o t e d Cons t i t u t i o n a l provision. "Governmental e n t i t i e s " a r e d e f i n e d t o i n c l u d e , among o t h e r t h i n g s , c i t i e s and m u n i c i p a l c o r p o r a t i o n s . s e c t i o n 82-4302 ( 2 ) and ( 3 ) , R.C.M. 1947. S e c t i o n 82-4310 s t a t e s : "Every governmental e n t i t y i s s u b j e c t t o liability for its torts and those of its employees acting within the scope of their employment or duties whether arising out of a governmental or proprietary function." Section 82-4302(4) defines "Employee" as: " * * * an officer, employee, or servant of a governmental entity, including elected or appointed officials, and persons acting on behalf of the governmental entity in any official capacity temporarily or permanently in the service of the governmental entity whether with or without compensation * * *." Clearly Art. 11, 518, and the Tort Claims Act are direct overrulings by the people and the legislature, respectively, of our holdings in Kingfisher and Boettger. Notwithstanding the interpretation advanced in Boettger, Kingfisher is a sovereign immunity case as evidenced by its classic distinction between "governmental" and "proprietary" functions, Kingfisher at 44 and cases cited; see Prosser on Torts 4th ed. 1971, 5131, pp. 977-87. This artificial distinction has been expressly abrogated by the last clause of section 82-4310. As for the "absence of a principal-agent relationship between the city and the policemen", as stated in Boettger, the definition of "employee" in section 82-4302(4) makes such an assertion untenable. In addition, reference to the ~etropolitan Police Law, section 11-1801 et seq., R.C.M. 1947, makes it abundantly clear that the principals of municipal government are in direct control of municipal police departments. The deposition taken of the Billings chief of police establishes several of the facets of a principal-agent relationship, or more accurately a master-servant relationship, between the City and the policemen. The most significant factor in this regard is that the City has the exclusive power to hire and fire its police officers. 53 Am Jur 2d,Master and Servant, 52. See The power in the City to control its policemen in both broad and detailed affairs related to their work brings the policemen squarely within the definition of "employee" and s u b j e c t s t h e C i t y t o l i a b i l i t y under t h e t e r m s of S e c t i o n 82-4310 f o r t o r t s of i t s employees w i t h i n t h e scope o f t h e i r employment o r d u t i e s " * * * acting * * *." While t h e p o l i c e o f f i c e r s a r e t h e s e r v a n t s of t h e C i t y , it c a n n o t be s a i d t h a t t h e y a r e s e r v a n t s o r a g e n t s of t h e S t a t e . The S t a t e e x e r c i s e s no d i r e c t , d e t a i l e d o r d a i l y s u p e r v i s i o n o v e r C i t y policemen; it i s p o w e r l e s s t o a v o i d o r p r e v e n t n e g l i g e n t a c t s by them. I t c a n n o t pay, h i r e o r f i r e C i t y policemen, and i t d o e s n o t p r o v i d e p o l i c e s e r v i c e s f o r t h e C i t y . In short, t h e S t a t e d o e s n o t c o n t r o l t h e a c t i v i t i e s of C i t y p o l i c e o f f i c e r s and c a n n o t be h e l d r e s p o n s i b l e f o r t h e i r n e g l i g e n c e . Furthermore, t h e scheme o f t h e T o r t Claims Act r e v e a l s t h e l e g i s l a t i v e i n t e n t t o make c i t i e s and o t h e r p o l i t i c a l subd i v i s i o n s r e s p o n s i b l e and l i a b l e f o r t h e n e g l i g e n c e o f t h e i r employees, r a t h e r t h a n t h e S t a t e . S e c t i o n 82-4303 p r o v i d e s f o r s t a t e p u r c h a s e of i n s u r a n c e t o c o v e r t h e e x p o s u r e s c r e a t e d by t h e 1972 C o n s t i t u t i o n . S e c t i o n 82-4306 e x t e n d s t o a l l p o l i t i c a l s u b d i v i s i o n s t h e same a u t h o r i t y t o p r o c u r e i n s u r a n c e . Section 82-4309 a u t h o r i z e s p o l i t i c a l s u b d i v i s i o n s t o l e v y t a x e s t o pay t h e premiums f o r such i n s u r a n c e . S e c t i o n 82-4318 a l l o w s t h e g o v e r n i n g body of e a c h p o l i t i c a l s u b d i v i s i o n t o compromise and s e t t l e any c l a i m f i l e d a g a i n s t i t . S e c t i o n 82-4326 a u t h o r i z e s p o l i t i c a l s u b d i v i s i o n s t o l e v y and c o l l e c t t a x e s a t t h e e a r l i e s t p o s s i b l e t i m e t o pay a c l a i m f o r which t h e r e i s no i n s u r a n c e o r o t h e r fund a v a i l a b l e . It i s c l e a r t h a t p o l i t i c a l subdivisions such a s t h e C i t y a r e f i n a n c i a l l y r e s p o n s i b l e , t o t h e e x c l u s i o n of t h e S t a t e , f o r t h e c o n d u c t of t h e i r employees. I n summary, we h o l d t h a t t h e C i t y may be h e l d l i a b l e f o r t h e n e g l i g e n c e of i t s p o l i c e o f f i c e r s and t h e S t a t e i s n o t r e s p o n s i b l e f o r t h e c o n d u c t of C i t y p o l i c e a c t i n g w i t h i n t h e scope of t h e i r employment. K i n g f i s h e r and B o e t t g e r no l o n g e r r e p r e s e n t t h e law i n Montana w i t h r e s p e c t t o m u n i c i p a l l i a b i l i t y f o r p o l i c e c o n d u c t b e c a u s e of t h e a d o p t i o n of t h e 1972 Cons t i t u t i o n and t h e T o r t Claims Act. W e e x p r e s s no o p i n i o n on t h e u l t i m a t e l i a b i l i t y of t h e C i t y under t h e f a c t s o f t h i s case a s t h i s must a w a i t f u r t h e r p r o c e e d i n g s . The 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 t h e C i t y ' s motion and d e n y i n g t h e S t a t e ' s motion. These r u l i n g s a r e v a c a t e d . The motion of t h e C i t y of B i l l i n g s f o r summary judgment i s d e n i e d , and t h e S t a t e ' s motion t o d i s m i s s i s g r a n t e d i n Cause No. 6 5 6 2 6 i n the d i s t r i c t court. Justice W e concur: tices J a c k Shanstrom, d i s t r i c t d g e , s i t t i n g i n p l a c e of M r . h i e £ J u s t i c e James T . H a r r i s o n .

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