Sch. Dist. No. 1 a Cascade Co. V

No. 84-550
IN THE SUPREME COURT OF THE STATE OF MONTANA
1985
SCHOOL DISTRICT NO. 1 and A,
CASCADE COUNTY,
Petitioner and Respondent,
MONTANA DEPARTMENT OF LABOR
and INDUSTRY, GAIL HAHN, TERRY
THOMPSON, et a1 , . Respondents and Appellants.
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable Joel G. Roth, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Hilley & Loring, Great Falls, Nontana
James Gardner, Dept. of Labor & Industry,
Helena, Montana
For Respondent :
Waite, Schuster & Larson, Great Falls, Montana
Submitted on Briefs: March 7, 1985
Decided: July 11, 1985
Filed: $A I. f 1985
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.
Appellants appeal an order of the District Court of the
Eighth Judicial District, Cascade County, denying their
motion for summary judgment, granting the School District's
motion for summary judgment and finding appellants ineligible
for unemployment compensation during the summer of 1981. We
affirm.
The School District planned a district-wide reduction
in its teaching staff in the spring of 1981. It notified the
six individual appellants in March, 1981 that their teaching
contracts would not be renewed for the 1981-1982 school year.
Each of the appellants immediately challenged the non-renewal
either through the grievance procedure in their collective
bargaining agreement or in a proceeding before the Cascade
County Superintendent of Schools using the procedure in
section 20-4-204, MCA. Eventually all six appellants were
reinstated with back-pay, the right to full advancement on
the salary schedule and no loss of seniority, tenure rights
or benefits as a result of their challenge. Those who
expended funds looking for other teaching positions during
the summer, were reimbursed for those costs by the School
District if they requested it.
The appellants individually applied for unemployment
compensation during the summer of 1981. They were eligible
for and received benefits at that time pursuant to section
39-51-2108, MCA. This dispute concerns repayment of the
benefits received during those months.
Gail Hahn was rehired by the School District, on a
part-time basis, on August 25, 1981 and three weeks later,
became a full-time teacher. She stopped drawing unemployment
c o m p e n s a t i o n when rehired. Terry Thompson was rehired on
September 21, 1981 and stopped drawing unemployment
compensation. Howard Hahn was r e h i r e d on a p a r t - t i m e basis
on August 22, 1981, stopped drawing unemployment
compensation, and became full-time t w o weeks later. John
Chase was r e h i r e d by t h e S c h o o l D i s t r i c t i n l a t e J u l y , 1981
on a part-time basis and f i l e d no c l a i m s f o r unemployment
c o m p e n s a t i o n a f t e r J u l y 25, 1981. J a n i s Storm was r e h i r e d i n
February o f 1982. A f t e r h e r r e t u r n an a r b i t r a t o r ruled she
had b e e n t e r m i n a t e d i n v i o l a t i o n o f t h e c o l l e c t i v e b a r g a i n i n g
a g r e e m e n t and o r d e r e d reinstatement and back-pay. She h a s
repaid t o t h e S t a t e t h e unemployment c o m p e n s a t i o n s h e drew
after August 26, 1981, the period f o r which she received
back-pay. Carl Rosenleaf was t h e o n l y o n e o f t h e s i x n o t
r e c a l l e d v o l u n t a r i l y by t h e S c h o o l D i s t r i c t . On March 3 1 ,
1982 an a r b i t r a t o r o r d e r e d h i s r e i n s t a t e m e n t w i t h b a c k pay t o
August 26, 1981. H e h a s r e p a i d t h e S t a t e t h e unemployment
c o m p e n s a t i o n r e c e i v e d s i n c e August 2 6 , 1981, t h e p e r i o d f o r
which h e r e c e i v e d back-pay. When t h e S c h o o l D i s t r i c t r e h i r e d
the five teachers, except Rosenleaf, t h e y w e r e k e p t on t h e
School D i s t r i c t ' s p a y r o l l w i t h t h e i r o r i g i n a l d a t e s o f h i r e .
Rosenleaf, reinstated by the arbitrator, also has his
o r i g i n a l d a t e of h i r e .
I n O c t o b e r 1 9 8 2 , t h e Unemployment I n s u r a n c e D i v i s i o n o f
Montana ' s Department of Labor and Industry notified the
appellants that all unemployment compensation should be
r e p a i d d u e t o t h e i r r e i n s t a t e m e n t s and back-pay awards. All
six appellants challenged the demand. There was also a
q u e s t i o n on w h e t h e r G a i l Hahn and J a n i s Storm t i m e l y filed
t h e i r r e q u e s t f o r review.
After that review, the Appeals Referee determined that
five of the appellants did not have to repay the summer
unemployment compensation. The Referee also ruled that since
Janis Storm had not filed a timely appeal, the determination
as to her overpaid benefits would stand. The Board of Labor
Appeals affirmed the Referee's decision that the five
teachers would not have to repay the summer benefits and
reversed the decision regarding Janis Storm. The Board
concluded that the untimeliness of her appeal was immaterial
and excusable under the circumstances and ruled that none of
the appellants had to repay the summer unemployment
compensation they had received.
The School District appealed to the District Court
which reversed the decision of the Board of Labor Appeals.
Appellants and the School District agreed that there were no
facts in dispute and made motions for summary judgment. In a
memorandum decision and order filed November 15, 1984, the
District Court ruled that, as a matter of law, the six
teachers were ineligible for unemployment compensation during
the summer of 1981 in accordance with the statutory
provisions of section 39-51-2108, MCA. The District Court
also noted that this ruling rendered the issue of the
timeliness of the appeal of two teachers moot.
The issue on appeal is whether the District Court erred
in concluding that the six appellants had to repay the
unemployment compensation they received during the summer of
1981.
Section 39-51-2108, MCA provides that benefits to
teachers "may not be paid to an individual for any week of
unemployment which begins during the period between two
successive academic years . . . if the individual has a
contract t o perform s e r v i c e s i n any s u c h c a p a c i t y f o r any
such educational institution for both such academic
years. .. "
The a p p e l l a n t s a r g u e t h a t , a t t h e t i m e they received
benefits, t h e y d i d n o t h a v e a renewed t e a c h i n g c o n t r a c t f o r
t h e f o l l o w i n g y e a r and t h u s w e r e e l i g i b l e f o r t h o s e b e n e f i t s .
The School District contends that appellants were fully
r e i n s t a t e d and w e r e i n e x a c t l y t h e same s t a t u s a s i f r e n e w a l
c o n t r a c t s had been offered t o them i n the spring of 1981.
Thus, appellants were ineligible for unemployment
compensation. The School District does not dispute that
appelLants were eligible for the benefits when received
d u r i n g t h e summer o f 1981.
The main considerations in this case concern the
d i f f e r e n c e between " r e h i r e d " and " r e i n s t a t e d " and w h e t h e r t h e
f a c t s a r e viewed o n l y from t h e p o i n t i n t i m e o f t h e s p r i n g o f
1.981 o r a r e viewed from t h e t i m e o f t h e h e a r i n g . Teachers i n
t h e School D i s t r i c t have been r e h i r e d o r v o l u n t a r i l y r e c a l l e d
after termination at o t h e r times and w e r e n o t required to
r e p a y unemployment b e n e f i t s r e c e i v e d d u r i n g t h e t i m e o f t h e i r
unemployment. The a p p e l l a n t s h e r e w e r e r e i n s t a t e d and made
whole w i t h no l o s s o f wages, s e n i o r i t y , t e n u r e r i g h t s o r any
other benefits, u n l i k e t e a c h e r s who w e r e r e h i r e d . The f u l l
r e i n s t a t e m e n t of a p p e l l a n t s p u t them i n t h e same p o s i t i o n a s
i f t h e y had c o n t r a c t s i n March 1 9 8 1 f o r t h e f o l l o w i n g y e a r .
This amounts to more than merely being rehired. The
reinstatement relates back, in effect, to time of the
termination and appellants " [have! a contract to perform
services ... for both such academic years." Section
39-51-2108, MCA.
Section 39-51-2108, MCA focuses on the teacher's
continuing contract status rather than earnings in
determining whether he or she is eligible for summer
unemployment benefits. Other courts interpreting similar
statutes a l s o recognize that status is controlling. They
hold that if t h e claimant has a reasonable assurance o r a
r e a s o n a b l e e x p e c t a t i o n o f r e t u r n i n g t o work a f t e r t h e b r e a k
between two academic terms, unemployment compensation
b e n e f i t s w i l l be denied. R e c e i p t o f wages d u r i n g t h e b r e a k
is not a factor. See, e.g., Friedlander v. Employment
Division (0r.App. 1 9 8 4 ) , 6 7 6 P.2d 314; P a t r i c k v. Board o f
Review (N.J.App. 1979), 409 A.2d 819; and Davis v.
Commonwealth Unemployment Compensation Board o f Review (Pa.
1978), 394 A.2d 1320. With reinstatement, appellants
regained the continuing contract s t a t u s t h e y had initially
lost. T h e i r s t a t u s i s t h e same a s i f t h e c o n t r a c t s had been
renewed i n t h e s p r i n g o f 1 9 8 1 and t h e y had r e c e i v e d no summer
wages a s a r e s u l t of t h a t s t a t u s . Thus a p p e l l a n t s ' argument
t h a t t h e y s h o u l d n o t have t o r e p a y t h e summer unemployment
b e n e f i t s b e c a u s e no back-pay was a t t r i b u t a b l e t o t h o s e months
must f a i l .
W e recognize t h a t the case a t bar d i f f e r s from t h o s e
cited above. Here, appellants were eligible when they
i n i t i a l l y s o u g h t b e n e f i t s and s u b s e q u e n t e v e n t s a f f e c t e d t h a t
initial eligibility. However, a p p e l l a n t s a r e p r e c l u d e d from
arguing t h a t subsequent e v e n t s never a f f e c t e l i g i b i l i t y f o r
unemployment benefits. Those appellants who received
benefits for part of the fall 1981 academic term were
required t o repay o r v o l u n t a r i l y repaid t h e p o r t i o n of the
benefits received for that term, even though they were
eligible f o r t h o s e b e n e f i t s when r e c e i v e d . The s u b s e q u e n t
reinstatement affected their fall eligibility and appellants
cannot argue the subsequent reinstatement could not affect
their summer eligibility.
We therefore hold that the District Court correctly
interpreted section 39-51-2108, MCA and correctly required
that the six individual appellants must repay unemployment
compensation received for the summer of 1981 and affirm the
ruling of the District Court.
We concur: 7
Justices
M.r. Justice William E. Hunt, Sr, dissenting:
T dissent and would reverse.
Section 39-51-2108, MCA, states that benefits may not be
paid during the period between successive academic years if
the individual has a contract for both years. The important
part of this statute that applies here is "if the individual
has a contract for both years."
The individuals had no contract for both years. They
had been advised that their contracts would not be renewed
for the following year. Because they had no contract they
were properly eligible and properly paid benefits during the
period.
The majority now holds that these proper payments are
"improper" because subsequent reinstatement relates back.
The individuals are, therefore, to be placed in the same
position as if they had contracts for both years. I
disagree.
The benefits were properly paid and they cannot now be
made to be improper. No contract existed for the required
"both years" during the relevant period and it cannot now be
made to exist. Whether the individuals here were "re-hired"
or "reinstated,'I or whether the contracts were "renewed," it
i.s inescapable that no contract existed during the period in
which benefits were paid. Absent an existing contract for
the requisite "both years," $ 39-51-2108 simply does not
apply to prohibit payment of benefits and it cannot be
applied to require the individuals to now reimburse for the
benefits properly paid.