LOCAL 8 v CITY OF GREAT FALLS

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No. 13616 I N THE SUPREME COURT OF THE STATE O M N A A F OTN 1977 LOCAL # 8 INTERNATIONAL ASSOCIATION O FIRE FIGHTERS, F P l a i n t i f f and A p p e l l a n t , -vsCITY OF GREAT FALLS, D e f e n d a n t and R e s p o n d e n t . Appeal from: D i s t r i c t Court of t h e Eighth J u d i c i a l D i s t r i c t , H o n o r a b l e R. J. N e l s o n , J u d g e p r e s i d i n g . C o u n s e l o f Record: For Appellant: M c K i t t r i c k and D u f f y , G r e a t F a l l s , Montana J o s e p h Duffy a r g u e d , G r e a t F a l l s , Montana F o r Respondent : Howard B u r t o n and L e s l i e S. W a i t e , G r e a t F a l l s , Montana L e s l i e S. Waite a r g u e d , G r e a t F a l l s , Montana Submitted: Decided: Clerk June 2 , 1977 AUG 3 0 7977 M r . J u s t i c e Frank I. Haswell delivered t h e Opinion of t h e Court, This i s an appeal from an order entered by t h e d i s t r i c t c o u r t , Cascade County, dismissing two counts of a complaint f i l e d by Local /,8, I n t e r n a t i o n a l Association of F i r e f i g h t e r s a g a i n s t t h e City of Great F a l l s . Local /I8 brought t h e a c t i o n f o r d e c l a r a t o r y judgment t o determine t h e r i g h t s of t h e p a r t i e s with r e s p e c t t o longevity pay of firemen employed by t h e City. Counts I and I1 of Local #8's complaint were dismissed by t h e d i s t r i c t c o u r t f o r f a i l u r e t o s t a t e a cause of a c t i o n under which r e l i e f could be granted. Count 111, concerning an un- r e l a t e d m a t t e r , i s s t i l l pending f o r t r i a l . Local /I8 i s a labor organization and t h e c e r t i f i e d c o l l e c t i v e bargaining agent f o r firemen employed by t h e 'city. The City i s a municipal corporation and i s t h e employer bargaining agent f o r c o l l e c t i v e bargaining purposes. The City and Local /I8 entered i n t o numerous c o l l e c t i v e bargaining agreements which cover a l l years m a t e r i a l t o t h i s case. These agreements cover a l l matters of wages, hours and working conditions a f f e c t i n g t h e firemen. Since 1937, s e c t i o n 11-1932, R.C.M. 1947 (and i t s predeces- s o r s ) has e s t a b l i s h e d minimum wages t o be paid t o firemen employed by f i r s t c l a s s c i t i e s such a s Great F a l l s . I n 1957, s e c t i o n 11-1932 was amended t o provide f o r a higher minimum wage and a l s o longev i t y pay. A fireman t h e r e a f t e r was e n t i t l e d t o a minimum s a l a r y equal t o t h e s t a t u t o r y base wage p l u s 1% t h e base wage f o r of each year he served up t o 20 years. Thus, i n 1957, when t h e s t a t u t o r y base wage was $350, a fireman who had served f o r one year was e n t i t l e d t o a minimum s a l a r y of $353.50 of $350.00 = $353.50). ($350.00 + 1% It i s important t o note t h e 1 longevity % pay was a percentage of t h e s t a t u t o r y minimum base wage r a t h e r than of t h e a c t u a l wage being received by t h e employee. Thus, i f t h e employee's a c t u a l wage was higher than t h e s t a t u t o r y minimum wage, s e c t i o n 11-1932 had no e f f e c t upon h i s a c t u a l salary. Subsequent amendments t o s e c t i o n 11-1932 i n succeeding years increased t h e s t a t u t o r y base wage. A 1975 amendment of s e c t i o n 11-1932 allowed accumulation of longevity beyond 20 years and increased t h e minimum s a l a r y t o $700. Likewise, t h e c o l l e c t i v e bargaining agreement executed by t h e firemen and t h e City provided f o r an i n c r e a s e i n s a l a r y f o r t h e firemen. A t a l l times r e l e v a n t h e r e i n t h e s a l a r y paid by t h e City t o each fireman exceeded t h e s t a t u t o r y base s a l a r y paus longevity pay. I n 1956, t h e Council of t h e City of Great F a l l s passed Resolution No. 4973 dealing with longevity pay f o r firemen. per year of s e r v i c e The Resolution granted longevity pay of 1% (up t o a maximum of 5%) t o those firemen who served more than 20 years. This longevity pay i s c a l c u l a t e d by computing a percentage of t h e a c t u a l wage received by t h e fireman r a t h e r than t h e s t a t u t o r y minimum wage. The purpose and i n t e n t of t h e Resolution i s c l e a r l y s t a t e d i n i t s opening paragraph, which reads : "THAT WHEREAS i t i s deemed wise by t h e Council t o reward f a i t h f u l Firemen and Policemen who have served s a i d City a f u l l period of a t l e a s t 20 years by an increase of pay so as t o induce a longer tenure of s e r v i c e by t h e same * * *." This Resolution continued i n f u l l f o r c e and e f f e c t f o r some ' ', . , . twenty years and was incorporated i n t h e c o l l e c t i v e bargaining ' . . t I t L agreements executed by t h e p a r t i e s during t h i s period. Several firemen have served t h e f u l l period and have become e n t i t l e d t o t h e a d d i t i o n a l longevity pay. These long-tenured firemen have been paid longevity pay by t h e C i t y i n accordance with t h e Resolution. - 3 - + I n May 1975 t h e C i t y Commission passed Resolution No. 6759 which repealed Resolution No. 4973 e f f e c t i v e J u l y 1, 1975. The s t a t e d reason f o r t h e r e p e a l of t h e longevity pay r e s o l u t i o n was t o eliminate "double compensation f o r firemen and policemen" i n l i g h t of t h e 1975 l e g i s l a t i v e a c t i o n removing t h e 20 year l i m i t a t i o n on longevity pay f o r firemen and policemen. A t t h e time t h e City repealed Resolution No, 4973, t h e r e was an e x i s t i n g c o l l e c t i v e bargaining agreement i n e f f e c t . There were no n e g o t i a t i o n s with t h e firemen o r Local /,8t o d e l e t e t h e 20 year longevity provision from t h e c o n t r a c t . On August 7 , 1975, Local /I8 made formal p r o t e s t t o t h e City of t h e r e p e a l of t h e longevity pay provision. t h e City denied and r e j e c t e d t h e p r o t e s t . On August 21, On o r about September8 t h e p a r t i e s agreed t h e i s s u e s r e l a t i v e t o t h i s case should be pursued through t h e c o u r t s t o determine t h e r i g h t s of t h e p a r t i e s . I t was agreed t h e signing of a new c o l l e c t i v e bargaining agreement i n September 1976 would not c o n s t i t u t e a waiver of p r o t e s t s and d i s p u t e s r e l a t i v e t o t h e r e p e a l of t h e longevity pay provision. Four i s s u e s a r e before t h i s Court upon appeal: 1. Whether t h e C i t y , by v i r t u e of Resolution No. 4973 c r e a t e d c o n t r a c t u a l r i g h t s enuring t o t h e b e n e f i t of i t s firemen. 2. Whether t h e r e p e a l of Resolution No. 4973 was an u n c o n s t i t u t i o n a l breach of t h e c o l l e c t i v e bargaining agreement then i n e f f e c t . 3. Whether t h e r e p e a l of Resolution No. 4973 was necessary t o e l i m i n a t e double compensation t o t h e firemen. 4. Whether t h e d i s m i s s a l b y t h e d i s t r i c t court of Counts I and I1 of p l a i n t i f f ' s complaint was e r r o r . The f i r s t i s s u e concerns t h e question of whether a c o n t r a c t was c r e a t e d f o r t h e b e n e f i t of t h e firemen by t h e c i t y ' s adoption of Resolution No. 4973 concerning longevity A companion question t o be answered i n u C S Q Z " ~ ~ ;*is' ?~ pay. d-ssue is--whether t h e City had t h e a u t h o r i t y t o r e p e a l t h e ordinance i n l i g h t of t h e p o s s i b l e c o n t r a c t c r e a t e d ? This p r e c i s e i s s u e i s a matter of f i r s t impression i n t h i s jurisdiction. The p a r t i e s c i t e B a r t e l s v. Miles C i t y , 145 Mont. 116, 399 P.2d 768 (1965); S t a t e ex r e l . Evans v. F i r e Dept. Relief Assn., 138 Mont. 172, 355 P.2d 670 (1960); and Clarke v. I r e l a n d , 122 Mont. 191, 199 P.2d 965 (1948), a s c o n t r o l l i n g precedent i n regard t o t h i s i s s u e . This l i n e of a u t h o r i t y i s c l e a r l y d i s - t i n g u i s h a b l e from t h e i n s t a n t case. I n a l l these cases, the employees had contributed moneys i n t o a fund of a c e r t a i n n a t u r e with t h e expectation of r e c e i v i n g a b e n e f i t therefrom. Such i s not t h e c a s e here and t h e r e f o r e , we do n o t r e l y on t h e s e cases. W f u r t h e r hold t h a t Stephens v. C i t y of B i l l i n g s , 148 Mont. e 372, 422 P.2d 342 (1967) i s n o t c o n t r o l l i n g . I n Stephens we held t h a t a s e n i o r i t y r u l e enacted by a c i t y ordinance could be repealed and no vested c o n t r a c t r i g h t was c r e a t e d f o r t h e b e n e f i t of c e r t a i n c i t y employees. The f a c t s i t u a t i o n s i n Stephens and t h e i n s t a n t case a r e admittedly s i m i l a r ; however, t h e s e n i o r i t y r u l e , a s adopted by t h e ordinance, expressly provided f o r a l t e r a t i o n by appropriate a c t i o n of t h e c i t y council. t h i s reason, S tephens For i s distinguishable. The long standing g e n e r a l r u l e i s t h a t t h e body which enacted an ordinance has t h e power t o r e p e a l such ordinance. Wright v. City of Florence, 229 S.C. 419, 93 S.E.2d 215 (1956); City Council of Charleston v. Wentworth S t r e e t B a p t i s t Church, 4 Strob. 306 (S.C. 1850). A s p e c i f i c g r a n t of a u t h o r i t y i s n o t necessary t o r e p e a l ordinances a s t h e general r u l e implies t h a t power unless otherwise provided. 6 McQuillin, Mun.Corp. Wright v. C i t y of Florence, supra; (3rd Ed.), $ 21-10. This a r e a of law i s summarized i n 6 McQuillin~Mun.Corp.(3rd "The power of r e p e a l extends, g e n e r a l l y speaking, t o a l l ordinances. Indeed, a municipal corporation cannot abridge i t s own l e g i s l a t i v e powers by t h e passage of i r r e v o c a b l e ordinances. The members of i t s l e g i s l a t i v e body a r e t r u s t e e s f o r t h e p u b l i c , and t h e n a t u r e and l i m i t e d tenure of t h e i r o f f i c e impress t h e ordinances enacted by them with l i a b i l i t y t o change. One council may n o t by an ordinance bind i t s e l f o r i t s successors so a s t o prevent f r e e l e g i s l a t i o n i n matters of municipal government. Accordingly, i n t h e absence of a v a l i d provision t o t h e c o n t r a r y , a municipal council o r assembly having t h e power t o l e g i s l a t e on, o r e x e r c i s e d i s c r e t i o n a r y o r regulatory a u t h o r i t y over, any given s u b j e c t may e x e r c i s e t h a t power a t w i l l by enacting o r repealing an ordinance i n r e l a t i o n t o t h e s u b j e c t , Thus, t h e power of r e p e a l extends t o l e g i s l a t i v e enactments and, a f o r t i o r i , t o ordinances of an a d m i n i s t r a t i v e c h a r a c t e r , a s , f o r example, an ordinance f i x i n g t h e f i s c a l year of a municipal corporation. The power does not extend, howe v e r , t o a u t h o r i z e impairment of a c o n t r a c t o r d e p r i v a t i o n of property without due process of law." I n a d d i t i o n t o t h e l i m i t a t i o n upon t h e r i g h t of r e p e a l which impairs a c o n t r a c t o r deprives one of property without due process of law, a t h i r d exception i s g e n e r a l l y recognized. This exception e x i s t s where an ordinance has been enacted under a narrow l i m i t e d g r a n t of a u t h o r i t y t o do a s i n g l e designated thing i n t h e manner and a t t h e time prescribed by t h e l e g i s l a t u r e . I n e f f e c t , no r i g h t of r e p e a l e x i s t s a s t o an ordinance t h a t c o n s t i t u t e s t h e e x e r c i s e of municipal power which i s exhausted by i t s s i n g l e e x e r c i s e . Clearly an implied c o n t r a c t between t h e City and Local /I8 was c r e a t e d by Resolution No. 4 9 7 3 . made by t h e r e s o l u t i o n . A n o f f e r t o pay longevity was This o f f e r was accepted by t h e firemen a s evidenced by both t h e many years of d i l i g e n t s e r v i c e provided and t h e incorporation of t h i s provision i n t o subsequent c o l l e c t i v e bargaining agreements. The s t a t e d purpose of t h e r e s o l u t i o n was " t o induce a longer tenure of service" by t h e firemen. purpose was accomplished. That During t h e 20 year period t h a t followed passage of t h e r e s o l u t i o n , numerous firemen a t t a i n e d t h e required 20 years of s e r v i c e and became e n t i t l e d t o t h e increased pay. Any contention t h a t firemen were not induced t o serve longer terms by t h e longevity provision i s simply not c o r r e c t . Once t h e determination i s made t h a t a c o n t r a c t was c r e a t e d by Resolution No. 4973, t h e next question t h a t must be answered i s t h e e f f e c t of t h e r e p e a l of t h e r e s o l u t i o n . A virtually i d e n t i c a l i s s u e was discussed i n CYty of Owensboro v. Board of T r u s t e e s , 301 Ky. 113, 190 S.W.2d 1005 (1945). I n t h a t case an ordinance was passed c r e a t i n g a c i v i l s e r v i c e system f o r c i t y employees. Several years l a t e r t h e c i v i l s e r v i c e ordinance was repealed by a second ordinance. T h e r e a f t e r , t h e ordinance repealing t h e c i v i l s e r v i c e ordinance was repealed; The c i t y f i l e d a d e c l a r a t o r y judgment a c t i o n t o determine t h e s t a t u s of c i t y employees who were h i r d o r employed by t h e c i t y during t h i s period. The Kentucky Court of Appeals found t h a t a c o n t r a c t was c r e a t e d by t h e o r i g i n a l c i v i l s e r v i c e ordinance. The r i g h t s acquired by c i t y employees who were employed during t h e o p e r a t i v e l i f e of t h e c i v i l s e r v i c e ordinance could not be a f f e c t e d by t h e subsequent lawful r e p e a l of t h e ordinance. I n C i t y of Owensboro the court stated: "* * * Consequently, t h e repealing ordinance annulled, abrogated, and put an end t o t h e C i v i l Service Ordinance. I t must be admitted, however, t h a t t h e r e p e a l of it d i d n o t and could n o t a f f e c t t h e vested r i g h t s and t h e i n v i o l a b l e c o n t r a c t of t h e employees who became such, and q u a l i f i e d hnder t h e C i v i l Service Ordinance w i t h i n i t s operative life." 109 S.W.2d 1008. *** S i m i l a r r e s u l t s were reached by t h e Kentucky c o u r t s i n Hopwood v. C i t y of Paducah, (Ky.1968), 424 S.W.2d v. C i t y o f Covington, 308 Ky. 792, 215 S.W.2d 134; R i t t e 980 (1948). W find t h i s authority persuasive i n the i n s t a n t case e and t h e r e f o r e hold t h e r e p e a l of Resolution No. 4973 by t h e C i t y was e f f e c t i v e . However, t h i s r e p e a l h a s a b s o l u t e l y no e f f e c t on t h e v e s t e d c o n t r a c t r i g h t s t o l o n g e v i t y a c q u i r e d by Great F a l l s firemen during t h e o p e r a t i v e l i f e of t h e ordinance. A l l firemen who commenced employment a s Great F a l l s firemen o r served i n such a c a p a c i t y during t h e e f f e c t i v e p e r i o d of t h e ordinance have a v e s t e d c o n t r a c t u a l r i g h t . I n i t s second i s s u e Local #8 complains t h e C i t y ' s r e p e a l of Resolution No. 4973 i s a n u n c o n s t i t u t i o n a l enactment which has t h e e f f e c t of impairing t h e o b l i g a t i o n s of t h e c o n t r a c t between t h e C i t y and Local #8. Resolution No. 4973 h a s been i n c o r p o r a t e d by r e f e r e n c e i n t o a l l c o l l e c t i v e b a r g a i n i n g agreements between t h e p a r t i e s i n c l u d i n g t h e one i n e f f e c t a t t h e time t h e r e s o l u t i o n was repealed. A r t . 11, S e c t i o n 31, 1972 Montana C o n s t i t u t i o n s t a t e s t h a t no "law impairing t h e o b l i g a t i o n of c o n t r a c t s be passed by t h e l e g i s l a t u r e . " *** shall C o n s t i t u t i o n a l p r o v i s i o n s pro- h i b i t i n g t h e impairment of c o n t r a c t u a l o b l i g a t i o n s apply t o municipal ordinances and r e s o l u t i o n s . 16 C. J.S. C o n s t i t u t i o n a l Law, $278, p. 1280, s t a t e s : "Ordinances and r e s o l u t i o n s passed by t h e municipal s u b d i v i s i o n s of a s t a t e i n pursuance of delegated l e g i s l a t i v e a u t h o r i t y o f t h e s t a t e a r e laws w i t h i n t h e meaning of c o n s t i t u t i o n a l p r o v i s i o n s and void i f they impair t h e o b l i g a t i o n s of c o n t r a c t s . " * *" By r e p e a l i n g Resolution No. 4973, i n c o r p o r a t e d i n t o t h e c o n t r a c t between t h e C i t y and Local #8, t h e C i t y h a s attempted t o change t h e terms o f t h i s c o n t r a c t . Such a change v i o l a t e s t h e foregoing c o n s t i t u t i o n a l p r o v i s i o n a s w e l l a s t h e Constit u t i o n of t h e United S t a t e s . T h i s c o n t r a c t between a union and a governmental e n t i t y i s e n t i t l e d t o t h e same p r o t e c t i o n of t h e f e d e r a l and Montana C o n s t i t u t i o n s t h a t i s a f f o r d e d a c o n t r a c t between i n d i v i d u a l s . Assn., S t a t e ex r e l . Evans v. F i r e Dept. R e l i e f supra; Clarke v. I r e l a n d , s u p r a ; S t a t e ex rel. S t a t e Savings Bank v. B a r r e t , 25 Mont. 112, 63 P. 1030 (1901). W t h e r e f o r e hold t h e r e s o l u t i o n r e p e a l i n g Resolution No. e 4973 i s u n c o n s t i t u t i o n a l a s a p p l i e d t o firemen covered by t h e c o n t r a c t i n e f f e c t a t t h e time of t h e r e p e a l . Appellant's t h i r d issue deals with t h e City's contention t h e r e p e a l of Resolution No. 4973 was necessary t o e l i m i n a t e double compensation f o r firemen i n l i g h t of t h e 1975 l e g i s l a t i v e a c t i o n removing t h e 20 year l i m i t a t i o n on l o n g e v i t y pay f o r f i r e men. This i s a f a l s e i s s u e i n t h i s c a s e . The f a c t s c l e a r l y show firemen employed by t h e C i t y of Great F a l l s have a t a l l times been p a i d i n excess of t h e s t a t u t o r y minimum p l u s l o n g e v i t y . T h e r e f o r e , a change i n t h e l e n g t h of t h e l o n g e v i t y allowed by s t a t u t e h a s no e f f e c t on firemen involved h e r e i n . A p p e l l a n t ' s f i n a l i s s u e d e a l s w i t h t h e p r o p r i e t y of t h e d i s m i s s a l of Counts I and I1 of a p p e l l a n t ' s complaint. The s t a n d a r d f o r reviewing r u l i n g s on motions t o d i s m i s s was r e c e n t l y d i s c u s s e d i n Hasbrouck v. K r s u l , 168 Mont. 270, 272, 541 P.2d 1197 (1975), where t h i s Court s t a t e d : " I n judging t h e c o r r e c t n e s s of t h a t we apply t h e s t r i c t s t a n d a r d f o r F e d e r a l a f t e r which ~ o n t a n a ' sRule 1 2 , M.R.Civ.P. p a t t e r n e d . I n Conley v. Gibson, 355 U.S. 78 S.Ct. 99, 102, 2 L.Ed.2d 80,84, i t i s order, Rule 1 2 , was 41, 45,46, said: ** " a complaint should n o t be dismissed f o r f a i l u r e t o s t a t e a claim u n l e s s i t appears beyond doubt t h a t t h e p l a i n t i f f can prove no s e t of f a c t s i n support of h i s c l a i m which would e n t i t l e him t o r e l i e f . "I F u r t h e r d i s c u s s i o n i s found i n Duffy v. B u t t e Teachers Union, 168 Mont. 246, 252, 541 P.2d 1199 (1975), where t h e Court s a i 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 can be g r a n t e d , Rule 1 2 ( b ) ( 6 ) , M.R. Civ.P., i s e q u i v a l e n t t o a demurrer under former c i v i l procedure. Payne v. Mountain S t a t e s T e l . and T e l . Co., 142 Mont. 406, 409, 385 P.2d 100. A motion t o d i s m i s s admits t o a l l f a c t s w e l l pleaded and i n c o n s i d e r i n g t h e motion t h e m a t e r i a l a l l e g a t i o n s of t h e pleading a t t a c k e d a r e taken a s t r u e . Deich v. Deich, 136 Mont. 566, 585; 323 P.2d 35. Where a complaint s t a t e s f a c t s s u f f i c i e n t t o c o n s t i t u t e a cause of a c t i o n upon any t h e o r y , then t h e motion t o d i s m i s s must be o v e r r u l e d . Magelo v. Roundup Coal Mining Co., 109 Mont 293, 300, 96 P. 2d 932. However, when a complaint a l l e g e s f a c t s and, assuming t h e f a c t s a r e t r u e , t h e r e s t i l l i s no c l a i m f o r r e l i e f s t a t e d under any t h e o r y , a motion t o d i s m i s s must be granted." 168 Mont. 252. . W e x p r e s s l y r e f u s e t o r u l e upon t h e m e r i t s of t h i s c a s e . e However w i t h t h e foregoing s t a n d a r d f o r review i n mind, we hold t h e d i s t r i c t c o u r t e r r e d when i t dismissed Counts I and I1 of a p p e l l a n t ' s complaint. Counts I and I1 a r e simply claims f o r r e l i e f on t h e b a s i s of a c o n t r a c t between t h e C i t y and t h e firemen. Resolution of a p p e l l a n t ' s previous i s s u e s makes i t ,P abundantly c l e a r a p p e l l a n t ' s complaint i s n o t so d e f e c t i v e a s t o appear beyond a doubt t h a t a p p e l l a n t can prove no s e t of f a c t s i n s u p p o r t of i t s claim which would e n t i t l e i t t o r e l i e f . W r e v e r s e * t h e r u l i n g of t h e d i s t r i c t c o u r t d i s m i s s i n g e Counts I and I1 of t h e complaint and remand t h i s m a t t e r f o r t r i a l on t h e m e r i t s . Justice. ............................................. M r . Chief J u s t i c e Paul G. H a t i f i e l d did not p a r t i c i p a t e i n this case.

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