Barnicoat v. Commissioner of Department of Labor & Industry , 201 Mont. 221 ( 1982 )

No. 81-561.
I N THE SUPREME COURT O F TEE STPATE O F .!.IONTANA
1982
J O H N BARNICOAT,
P l a i n t i f f and A p p e l l a n t ,
COIb3iviISSIONER O F DEPARTMENT O F
LABOR AND INDUSTRY, THE EMPLOYMENT
SECURITY D I V I S I O N , e t a l . ,
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 of t h e F i f t h 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 C o u n t y of J e f f e r s o n , T h e E o n o r a b l e
Frank E. B l a i r , Judge p r e s i d i n g .
C o u n s e l of R e c o r d :
For Appellant:
Hartelius & Associates; C a m e r o n Ferguson, Great
Falls, Montana
For R e s p o n d e n t :
, D e p t of L a b o r & I n d u s t r y ,
Helena, Montana
S u b m i t t e d on B r i e f s : August 26, 1982
Decided; November 1 0 , 1982
Nr. Justice Fred J. Weber delivered the Opinion of the Court.
John Barnicoat brought a legal action against the
Commissioner of the Department of Labor and Industry claiming
a refund of unemployment insurance benefits he paid back to
the State Employment Security Division (Division). The District
Court of the Fifth Judicial District, Jefferson County, sitting
without a jury, dismissed Barnicoat's complaint due to his
failure to exhaust statutory administrative remedies. Barnicoat
appeals.
We affirm.
The following issues are presented for review:
(I) Is Barnicoat precluded from bringing a legal action
in a District Court on the grounds that he failed to exhaust
his administrative remedies.
(2) Does the Division have the right to demand repayment
of unemployment insurance benefits paid to an unemployed person
who later receives back pay for the period of his unemployment
through a labor grievance arbitration proceeding.
Barnicoat was employed by the Boulder River School and
Hospital, Boulder, Montana, from September 1978 to June 18,
1979, when he was terminated. On June 19, 1979, he applied
for unemployment insurance benefits and received $1,022 in
benefits for the period of June 18, 1979, through September 29,
1979. Barnicoat also filed a grievance through his union,
the American Federation of State, County, and Municipal Employees,
contesting the termination. The grievance resulted in a decision
issued September 24, 1979, reinstating Barnicoat and awarding
back pay in the amount of $1,004. On November 2, 1979, ~arnicoat
contacted the ~ivisionby telephone and informed them of his
back pay award and on that same day made payment to the ~ivision
of $1,000.
-2-
The first issue is whether Barnicoat is precluded from
bringing a legal action in a District Court on the grounds
that he failed to exhaust his administrative remedies. The
District Court dismissed the action on that ground.
Subsequent to applying for and receiving unemployment
benefits, Barnicoat was awarded back pay for the same period.
Barnicoat's paying the $1,000 back to the Division triggered
a reconsideration of his claim under section 39-51-2404(2),
MCA, which provides:
"(2) The deputy may for good cause reconsider
his decision and shall promptly notify the
claimant and such other interested parties of
his amended decision and the reasons therefore."
On November 6, 1979, Barnicoat was sent a letter by the
Division which provided:
"You were indebted to this agency for $1,022.00
due to your reward of back-pay. You had received
checks (14) for weeks ending 6-30-79 through
9-29-79 at $73.00 each. We are in receipt of
your check for $1,000.00 which leaves an over-
payment balance of $22.00.
"It is the decision of this agency that you
refund the amount shown due."
The letter also included the Division's standard notice of
appeal, which provides:
"APPEAL RIGHTS: Any claimant or employer who
believes that the decision of a Claims Examiner
is contrary to the law or the facts, may request
a redetermination from the Claim Examiner, or may
appeal from his decision through a local office
of the commission, requesting a review and stating
the reasons therefor. Appeals must be filed within
five ( 5 ) days after receipt of this notification
or within seven (7) days after notification is
mailed. "
Barnicoat never has paid the remaining $22 requested by the
Division.
No request for a redetermination was made by Barnicoat
nor was any appeal taken from the decision. Section 39-51-2402(4),
MCA, contains the following requirements on redeterminations or
appeals :
"(4) A determination or redetermination shall
be deemed final unless an interested party
entitled to notice thereof applies for recon-
sideration of the determination or appeals there-
from within 5 days after delivery of such
notification or within 7 days after such
notification was mailed to his last known address,
provided that such period may be extended for
good cause."
The foregoing statute requires the conclusions that the
redetermination of the Barnicoat claim by the Division became
final because of the absence of a request for redetermination
or an appeal.
Sections 39-51-2402, -2403 and -2404, MCA, describe the
appeal process which is provided for claims and redetermination
of claims. In the initial appeal, an appeals referee makes
findings and conclusions and furnishes a copy of his decisions
and the findings and conclusions to the parties. The appeals
referee's decision becomes final unless further review is
initiated within the stated periods of time. Next, any dis-
satisfied party may appeal from the decision of an appeals
referee to the Board itself. The decision of the Board becomes
final unless an interested party requests a rehearing or
initiates judicial review by filing a petition in District
Court within thirty days of the date of mailing of the Board's
decision. Section 39-51-2410(1), MCA, in pertinent part
provides with regard to finality and judicial review:
"Any decision of the board in the absence of an
appeal therefrom as herein provided shall become
final 30 days after the date of notification or
mailing thereof . . . and judicial review thereof
shall be permitted only after any party claiming
to be aggrieved thereby has exhausted his remedies
before the board."
The statutory provision allowing judicial review only after
exhaustion of remedies administratively is consistent with
prior holdings of this Court:
"It is a general principle that if an administrative
remedy is provided by statute, that relief must be
sought from the administrative body and the statutory
remedy exhausted before relief can be obtained by
judicial review." State ex rel. Jones v. Giles (19751,
168 Mont. 130, 132, 541 P.2d 355, 357.
Barnicoat repaid to the Division the $1,000 on November
2, 1979. The Division wrote Barnicoat on November 6, 1979.
No action was taken in response to the Division letter.
Barnicoat's attorney wrote a letter to the Division, dated
December 5, 1980, attempting to challenge the repayment.
Next, a complaint was filed in District Court by Barnicoat
on March 12, 1981.
Barnicoat completely failed to utilize the rehearing
and appeal processes provided by statute. Barnicoat failed
to exhaust all of his remedies available within the agency
and is precluded from requesting judicial review in a District
Court. The lower court was correct in dismissing the complaint
on the ground that Barnicoat failed to exhaust his administrative
remedies. Because of the holding on this issue, it is not
necessary to consider the second issue.
Affirmed.
We Concur:
e- J , @ a d
44 C;hief Justice
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