Thomas Mercer v. Dennis McGee

November 13 2008
DA 07-0626
IN THE SUPREME COURT OF THE STATE OF MONTANA
2008 MT 374THOMAS C. MERCER and THOMAS C. MERCER
d/b/a UNION SQUARE APARTMENTS,
Petitioners and Appellants,
v.
DENNIS A. McGEE,
Respondent and Appellee.
APPEAL FROM: District Court of the Fourth Judicial District,
In and For the County of Missoula, Cause No. DV-06-1085
Honorable Edward P. McLean, Presiding Judge
COUNSEL OF RECORD:
For Appellants:
Elizabeth A. O’Halloran, Milodragovich, Dale, Steinbrenner & Nygren, P.C.,
Missoula, Montana
For Appellee:
Matthew B. Thiel, Thiel Law Office, Missoula, Montana
Karl J. Englund, Attorney at Law, Missoula, Montana
Submitted on Briefs: August 13, 2008
Decided: November 13, 2008
Filed:
__________________________________________
Clerk
Justice Brian Morris delivered the Opinion of the Court.
¶1 Thomas Mercer (Mercer) appeals the order of the Fourth Judicial District Court,
Missoula County, of September 20, 2007. The District Court order affirmed the Montana
Human Rights Commission’s Order that held that Mercer had discriminated against Dennis
McGee (McGee) based on McGee’s marital status and that had awarded damages to McGee.
We affirm.
¶2 We review the following issues on appeal:
¶3 Did the District Court correctly affirm the Human Rights Commission’s order that
held that Mercer unlawfully had discriminated against McGee because of his marital status?
¶4 Did the District Court correctly affirm the Human Rights Commission’s decision that
awarded damages to McGee?
FACTUAL AND PROCEDURAL BACKGROUND
¶5 McGee and his wife Lynda served as resident managers of the Union Square
Apartments (USA) complex in Missoula. Mercer was part owner of USA and several other
properties in the Missoula area. Mercer originally employed Shelter West, a property
management company, to manage USA.
¶6 Shelter West in turn hired the McGees as an onsite property management team in June
of 1999. Although Shelter West had hired and trained the McGees, Mercer officially
employed them. For ease of reference, throughout this opinion we will refer to Mercer as the
McGees’ employer.
¶7 McGee performed approximately 10 hours each week of light maintenance around the
USA property as part of his management team responsibilities. McGee additionally
maintained full-time employment with Smurfit-Stone Container during this period. Lynda
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received a paycheck from Mercer. McGee did not receive a paycheck from Mercer. Lynda
and McGee received a rent-free apartment plus free cable and free utilities as part of their
compensation.
¶8 Mercer eventually became disillusioned with Shelter West’s services. He hired Lynda
and McGee directly to serve as on-site managers of USA in January of 2002. Mercer took
over the management of other properties owned by him and others in the Missoula area on
February 1, 2002.
¶9 Lynda acted as general manager of Mercer’s new management enterprise. McGee, as
part of his resident manager duties at USA, continued to perform 10 hours of routine
maintenance under the new system. McGee also served as maintenance supervisor, a
position that required him to supervise and perform further maintenance above and beyond
the 10 hours both at USA, and, at other properties managed by Mercer’s personal
management entity. McGee for the first time signed a W-4 on January 9, 2002. McGee
never had signed, or been asked to sign, a W-4 in the almost three years of having served as
resident manager. McGee testified that he had accepted an offer of early retirement from
Smurfit-Stone Container during the same time period based partly on the prospect of
additional employment with Mercer’s new management enterprise.
¶10 The new system worked well for several years. Mercer actively supervised the
management company and maintained regular contact with the McGees. McGee worked
approximately 10 hours each week on resident management duties and 15 to 20 hours each
week doing his maintenance supervisor functions throughout the balance of 2002 and 2003.
McGee received W-2s reporting his income for his separate employment position as
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maintenance supervisor for the tax years 2002, 2003, and 2004. McGee never had received a
W-2 before taking on the maintenance supervisor position in 2002.
¶11 Mercer eventually became concerned about Lynda’s performance. Mercer abruptly
sent a letter to Lynda and McGee informing them that he was firing them. McGee did not
quit his employment. Mercer did not allege any wrongdoing by McGee. The letter
discharged McGee from his resident manager position at USA and emphasized that he was
no longer welcome to perform the additional maintenance supervisor duties “as a vendor to
the property.”
¶12 McGee worked before and after his discharge as a consultant to his former employer,
Smurfit-Stone Container, on a temporary basis. After his discharge, McGee looked for
employment similar to that he had with Mercer. He did not obtain any of the positions for
which he applied. McGee also unsuccessfully attempted to find work through the Montana
Job Service in Missoula. McGee put together a successful proposal to work part-time as a
safety consultant for Smurfit-Stone Container in 2005.
¶13 McGee brought an action for discrimination based on marital status before the
Department of Labor and Industry. McGee alleged that Mercer fired him not due to his own
poor performance, but solely because he was married to Lynda, whose job performance
dissatisfied Mercer. The Hearings Bureau held a contested case hearing. The Hearing
Examiner issued findings and conclusions in favor of McGee. The Hearing Examiner found
that McGee had held two jobs for Mercer, one as on-site manager and the other as
maintenance supervisor. The Hearing Examiner awarded back damages to McGee. The
Hearing Examiner refused to award future damages in light of the fact that McGee already
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had found employment with Smurfit-Stone Container to replace the job that he had lost with
Mercer by the time of the hearing.
¶14 Mercer filed an appeal with the Montana Human Rights Commission. Mercer
asserted that the Hearing Examiner incorrectly found that McGee had held two separate jobs
with him. Mercer argued that the Commission should dismiss the complaint because McGee
had not disputed the legitimacy of his termination from the resident manager position at
USA. The Commission affirmed the Hearing Examiner’s decision in its entirety.
¶15 Mercer filed a petition for judicial review. The District Court affirmed the decision of
the Human Rights Commission. The District Court entered a second order awarding McGee
attorney’s fees. Mercer appeals.
STANDARD OF REVIEW
¶16 We review agency findings to determine whether they are clearly erroneous. Section
2-4-704(2)(a)(v), MCA; Owens v. Montana Dept. of Revenue, 2007 MT 298, ¶ 12, 340
Mont. 48, ¶ 12, 172 P.3d 1227, ¶ 12. We review an agency’s conclusions of law to
determine if they are correct. The same standard of review applies to both the District
Court’s review of the administrative decision and our subsequent review of the District
Court’s decision. Owens, ¶ 12.
¶17 We may not substitute our judgment for that of the agency as to the weight of the
evidence. Section 2-4-704(2), MCA; Owens, ¶ 13. We employ a three-part test to determine
whether an agency’s findings of fact are clearly erroneous: (1) we review the record to see if
substantial evidence supports the findings, (2) if substantial evidence supports the findings,
we determine if the agency misapprehended the effect of the evidence, and (3) if both of the
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above are satisfied, we still may decide a finding is clearly erroneous if a review of the
record leaves the Court with the definite and firm conviction that a mistake has been
committed. Owens, ¶ 13; Benjamin v. Anderson, 2005 MT 123, ¶ 31, 327 Mont. 173, ¶ 31,
112 P.3d 1039, ¶ 31.
DISCUSSION
¶18 Did the District Court correctly affirm the Human Rights Commission’s order that
held that Mercer unlawfully had discriminated against McGee because of his marital status?
¶19 The Montana Human Rights Act (MHRA) prohibits employment discrimination based
on marital status. Section 49-2-303(1)(a), MCA; Vortex Fishing Systems, Inc. v. Foss, 2001
MT 312, ¶ 14, 308 Mont. 8, ¶ 14, 38 P.3d 836, ¶ 14. Mercer argues that the Hearing
Examiner erroneously concluded that McGee had held two separate jobs at the time of his
termination. Mercer further argues that the Hearing Examiner incorrectly determined that
McGee had presented a prima facie case of marital discrimination.
¶20 A plaintiff must prove the following prima facie elements in order to establish an
employment discrimination claim based on marital status: (1) the claimant belonged to a
protected class, (2) the claimant was otherwise qualified for continued employment, and (3)
the claimant was denied employment under circumstances that raise a reasonable inference
that he was treated differently because of this membership in the protected class. Vortex,
¶ 17; Admin. R. M. 24.9.610(2) (1996). Mercer challenges numerous factual findings made
by the Hearing Examiner. Mercer cites no evidence, however, to contradict the findings
made by the Hearing Examiner.
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¶21 Mercer merely presents his version of the events. The Hearing Examiner conducted a
detailed examination of the record. The Hearing Examiner reconciled conflicts between
Mercer’s series of events and McGee’s series of events in making his findings. The Hearing
Examiner pointed to specific evidence in the record to support his findings, including
Mercer’s own writings and testimony. The Hearing Examiner explicitly found that Mercer’s
inconsistent statements undercut the credibility of Mercer’s testimony.
¶22 We may not substitute our judgment for that of the Hearing Examiner as to the weight
of the evidence on questions of fact. Section 2-4-704(2), MCA; Owens, ¶ 13; Benjamin,
¶ 37. As long as we determine that substantial evidence exists to support the findings of the
trier of fact, we may not re-weigh the evidence, but must instead defer to the Hearing
Examiner. Benjamin, ¶ 37. The findings of the Hearing Examiner, especially as to witness
credibility, are entitled to great deference, because a hearing examiner has the unique
opportunity to hear and observe all the testimony entered in the case. Benjamin, ¶ 37.
¶23 The District Court properly deferred to the Hearing Examiner’s unique position as a
finder of fact. Substantial evidence supports the Hearing Examiner’s finding that McGee
had held two separate jobs and that McGee demonstrated the necessary facts to support a
claim of marital discrimination. Nothing in the record indicates that the Hearing Examiner
misapprehended the effects of the evidence. We affirm the District Court on this issue.
¶24 Did the District Court correctly affirm the Human Rights Commission’s decision that
awarded damages to McGee?
¶25 A hearings officer may order any reasonable measures to rectify any harm suffered as
a result of illegal discrimination. Section 49-2-506(1)(b), MCA. Remedies provided by
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Montana’s Human Rights Act seek to return an employee who is a victim of discrimination
to the position that they would have occupied absent the discrimination. Vortex, ¶ 27.
¶26 The Hearing Examiner awarded McGee $30,409 plus interest, based on lost wages
resulting from the discriminatory termination, because McGee could not find suitable
employment to replace the lost work until the following year. The Hearing Examiner
concluded that McGee properly had attempted to mitigate his damages. The Hearing
Examiner refused to award any damages beyond the point where McGee found suitable
replacement work as a safety consultant for Smurfit-Stone Container. The Hearing
Examiner rejected Mercer’s claim that McGee had not in fact worked the hours that he
claimed in 2002, 2003, and 2004, and rejected Mercer’s argument that the additional
consulting work McGee did for Smurfit-Stone Container during 2004 and 2005 should offset
the award. The Hearing Examiner explicitly found that McGee would have been able to
perform the temporary consulting work for Smurfit-Stone Container even if he had continued
to work for Mercer during 2004 and 2005.
¶27 Mercer argues that the Hearing Examiner incorrectly awarded McGee back pay.
Mercer again challenges the Hearing Examiner’s findings of fact by presenting his own
version of events. Mercer contends that this Court should infer that McGee did not actually
work the hours that he claimed in 2002-2004. Mercer likewise argues that we should infer
that McGee had failed to mitigate properly the damages. And Mercer further contends that
we should infer that the work performed by McGee for Smurfit-Stone Container during 2004
and 2005 should offset the damages. We decline to reweigh the evidence. Benjamin, ¶ 37.
Substantial evidence supports the Hearing Examiner’s finding that McGee suffered harm as a
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result of discrimination. Owens, ¶ 13. The Hearing Examiner correctly awarded back pay to
McGee to remedy that harm and make him whole.
¶28 Affirmed.
/S/ BRIAN MORRIS
We Concur:
/S/ KARLA M. GRAY
/S/ JOHN WARNER
/S/ PATRICIA COTTER
/S/ JIM RICE
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