Bates v. Neva

• Decision Date: 03 September 2013
• Docket Number: No. DA 13–0012.,DA 13–0012.
• Citation: 371 Mont. 466,308 P.3d 114
• Parties: Jim BATES, Petitioner/Respondent and Appellee, v. Laura Lee NEVA, Respondent/Charging Party and Appellant.
• Court: Montana Supreme Court

371 Mont. 466

308 P.3d 114

Jim BATES, Petitioner/Respondent and Appellee,

v.Laura Lee NEVA, Respondent/Charging Party and Appellant.

No. DA 13–0012.

Supreme Court of Montana.

Submitted on Briefs June 26, 2013.

Decided Sept. 3, 2013.

For Appellant: Patricia D. Peterman, Michael F. McGuinness; Patten, Peterman, Bekkedahl & Green, PLLC; Billings, Montana.

For Appellee: Jim Bates, self-represented; Fishtail, Montana.

Justice JIM RICE delivered the Opinion of the Court.

[371 Mont. 466]¶ 1 Appellant Laura Lee Neva (Neva) alleges that Appellee Jim Bates (Bates) violated Montana's Human Rights Act (the Act) by halting necessary repairs to the commercial building she rented from him because she rebuffed his sexual advances. Section 49–2–304, MCA (the Public Accommodation Provision), makes it unlawful for a place of public accommodation to deny to a person its “services, goods, facilities, advantages, or privileges” because of a person's sex. Section 49–2–305, MCA (the Real–Estate Transaction Provision), makes it unlawful for an owner, lessor, or manager of a “housing accommodation or improved or unimproved property” to discriminate in the use, sale, lease, or rental of the property because of a person's sex. In her complaint to the Human Rights Commission (the Commission), Neva alleged violation of the Public Accommodations Provision but made no mention of the Real–Estate Transaction Provision. The Commission nevertheless found that Bates violated the Real–Estate Transaction Provision by sexually harassing Neva while she was leasing commercial space from him. The District Court reversed that decision, holding that the Commission's action violated Bates's right to due process. We reverse, and address the issue:

¶ 2 Did the District Court err by concluding due process principles prohibited the Commission from ruling that Bates violated § 49–2–305, MCA, when Neva only specified a violation of § 49–2–304, MCA, in her pleadings?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 During June 2009, Neva agreed to rent from Bates a commercial building she hoped to turn into an art gallery. The building was not immediately tenantable, however. Its roof leaked and other repairs were needed before it was suitable for customers and safe to display artwork. Bates and Neva came to an agreement: Bates would pay for materials and make the repairs; in return, Neva would help with repairs, would not pay rent until the repairs were complete, and would receive a month's free rent once the building was ready to open for business. While they worked together during July 2009 to make the premises tenantable, the repairs were still unfinished months later, and Neva vacated the building without ever having paid rent.

¶ 4 On January 21, 2010, Neva filed a handwritten complaint with the Commission entitled “Sexual Harassment by Landlord.” Neva alleged Bates sexually harassed her in person, over the telephone, and by email. Two weeks later, Neva filed an amended complaint, alleging that Bates was her landlord and that he had stopped making necessary repairs to the building when she rebuked his sexual advances, and, as a result, she was forced to find an alternative location. Neva claimed that Bates's conduct violated the Public Accommodation Provision of the Act. Neither the complaint nor the amended complaint mentioned the Real–Estate Transaction Provision. Bates answered, denying the allegations of sexual harassment and arguing that Neva was never his tenant. In subsequent briefing, Neva and Bates argued over whether Neva was a tenant. Neva alleged that as a tenant she had the right to be free from discrimination from her landlord. Bates argued that no tenancy existed becausehe and Neva had never agreed to specific terms.

¶ 5 On August 29 and 30, 2011, a contested-case hearing was conducted by a hearing officer. Neva and Bates testified. Neva described numerous instances of inappropriate conduct by Bates that made it uncomfortable for her to be in the building. Bates would routinely stand unnecessarily close to Neva while she was working. Once Bates grabbed her right breast to “get her attention.” He told her once that there was a “problem” because he “didn't know what color underwear [she] was wearing.” Another time, while Neva was on her hands and knees planting flowers, Bates approached her holding a strawberry in front of his crotch, telling Neva to “open up and eat this.” On another occasion when Neva was working on her knees, Bates made a comment about Monica Lewinsky. When Neva was using a power blower to clear debris from the roof, Bates told her “what a nice blow job” she was doing. Neva said that Bates would telephone to tell her that he was “naked” and getting in the shower and “just wanted to give [her] some food for thought.” The hearing examiner also admitted six emails Bates sent Neva over a two-day period in July 2009. In part, the emails discussed upcoming plans for repairs, but they also contained explicit sexual comments. Neva testified she never gave Bates reason to think his advances were welcome, but that she was careful not to upset him because she had yet to receive a written lease and was afraid he would renege on their verbal agreement. When she finally told Bates that he was “nothing but a landlord” to her, he stopped making repairs.

¶ 6 Bates explained that he had never prepared a written lease for Neva because rent was not due until the repairs were completed, but testified to aspects of a tenancy relationship between them. Bates conceded he convinced Neva to rent the building instead of purchasing because of the disrepair, and because he felt it would be unwise for Neva, a new business owner, to incur so much debt. According to Bates, he did not withhold repairs because Neva rebuffed his advances; rather, he was unable to continue repairs because Neva installed a security system and refused him access to the building. Bates admitted to sending the emails to Neva and explained that he continued to send them even after she did not respond because he took her silence to mean she was not offended. Bates could not recall whether he had commented on Neva's underwear, but said it would not surprise him because that was the type of “wisecracks” he routinely made.

¶ 7 The hearing officer determined that Bates had sexually harassed Neva, and described Bates's conduct as “severe,” “persistent,” and “patently unwelcome.” He found that Bates discontinued making repairs because Neva rejected his advances and refused to grant him “unfettered access to the premises.” However, the hearing officer concluded that Bates's conduct did not violate the Public Accommodations Provision because Bates's building was private property not open to the public. Without citing the Real–Estate Transaction Provision, the hearings officer concluded that the Act only prohibited discrimination in housing leases, not commercial leases: “The [Act] does not address illegal discrimination in commercial, as opposed to housing, leases between private individuals.”

¶ 8 Neva appealed to the Commission, arguing the hearing officer had erred by concluding the Act did not prohibit discrimination in commercial-lease settings. The Commission agreed with Neva, reasoning that the term “improved or unimproved property” in the Real–Estate Transaction Provision broadly applied to “all types of real estate,” including commercial property. The Commission reversed the hearing officer's dismissal and remanded the case to the hearing officer with leave to take additional evidence as necessary to “determine an appropriate damage award.”

¶ 9 Bates petitioned the District Court for judicial review of the Commission's decision. He argued that the Commission erred by (1) analyzing Neva's discrimination claim under the Real–Estate Transaction Provision, and (2) concluding the Act applied to commercial leases. Concurring with Bates's first argument, the District Court vacated the Commission's decision and reinstated the hearingsofficer's dismissal of Neva's complaint. The District Court reasoned that while Bates may have violated the Real–Estate Transaction Provision, § 49–2–305, MCA, Neva never alleged such discrimination. The District Court concluded that allowing Neva to recover under a statute she never cited would violate Bates's due process rights:

While the Commission determined that the Department had jurisdiction over Neva's Complaint under § 49–2–305, MCA, Neva pled and argued her claim under § 49–2–304, MCA. It is not the province of the Commission or this Court to re-characterize a specific claim brought under a specific statute on behalf of a complainant. Because Neva never requested relief under § 49–2–305, MCA, it would be a violation of Bates' due process rights to allow her to recover on this basis on remand. Notwithstanding Neva's argument that Bates was on notice of a possible claim under § 49–2–305, MCA, it is not Bates' responsibility to guess what is or might be the appropriate statutory claim providing Neva the opportunity for relief.

Thus, the District Court did not reach the issue of whether the Act applied to commercial leases. Neva appeals.

STANDARD OF REVIEW

¶ 10 We review an agency's findings of fact to determine if they are clearly erroneous. Section 2–4–704(2)(a)(v), MCA; Owens v. Mont. Dept. of Revenue, 2007 MT 298, ¶ 12, 340 Mont. 48, 172 P.3d 1227. We review an agency's conclusions of law to determine if they are correct. Section 2–4–704(2)(a)(iv), MCA; Owens, ¶ 12.

DISCUSSION

¶ 11 The Act prohibits discrimination “on the basis of race, creed, religion, color, sex, physical or mental disability, age or national origin” in certain enumerated settings. Arthur v. Pierre Ltd., 2004 MT 303, ¶ 16, 323 Mont. 453, 100 P.3d 987;see§§ 49–2–303, MCA through 49–2–310, MCA. Two of those settings are relevant here: places of public accommodation and real-estate transactions. The Public Accommodation Provision provides:

[I]t is an unlawful discriminatory...