Boehm v. Alanon Club

• Decision Date: 29 July 1986
• Docket Number: No. 85-533,85-533
• Citation: 222 Mont. 373,43 St.Rep. 1341,722 P.2d 1160
• Parties: Clyde R. BOEHM, Jr., Plaintiff and Appellant, v. ALANON CLUB, Defendant and Respondent.
• Court: Montana Supreme Court

Page 1160

722 P.2d 1160

222 Mont. 373

Clyde R. BOEHM, Jr., Plaintiff and Appellant, v. ALANON CLUB, Defendant and Respondent.

No. 85-533.

Supreme Court of Montana.

Submitted on Briefs March 13, 1986.

Decided July 29, 1986.

Nye & Meyer, Jerrold L. Nye, Billings, for plaintiff and appellant.

Peterson, Schofield & Leckie, V. Joe Leckie, Billings, for defendant and respondent.

TURNAGE, Chief Justice.

Clyde Boehm filed a complaint against his former employer, Alanon Club, in the District Court of the Thirteenth Judicial District of the State of Montana, in and for the County of Yellowstone. The court granted defendant's motion for a directed verdict in its favor on Count I of the complaint, and Boehm has appealed. For the reasons stated below, we reverse and remand for a new trial.

Clyde Boehm, appellant, brought suit for damages he received as a result of falling on the property of the respondent, 204 Grand Alanon Club, Inc. (Club). In the second count of the complaint, Boehm claimed damages for wrongful termination from his employment with the Club subsequent to his fall. At the close of plaintiff's case, the Club moved for a directed verdict on both counts. The court granted the motion as to Count I, but denied it as to Count II. Subsequently, the jury found in favor of Boehm on the wrongful termination claim, and neither party has appealed that finding.

Boehm was hired by the Club as a steward in August 1983. His duties included paying the bills, collecting club dues, purchasing and serving snacks and coffee, and cleaning and maintaining the premises. He was paid $100 per week and was allowed to live at the Club.

The accident occurred on the morning of January 3, 1984, while Boehm was still an employee of the Club. It had been raining and snowing that morning from around 8:30 to 11:00. Sometime before 9:00 or 10:00 that morning, Boehm shoveled off the sidewalk leading from the street to the main entrance of the Club and put down a melting agent on the sidewalk to keep the ice melted. Additionally, there was a build-up of ice and snow on both sides of the sidewalk which caused water to run down the sidewalk. Sometime that morning, Boehm returned to the Club after going to the bank and running other errands. As he was walking up the sidewalk, he slipped on some ice and fell, breaking his leg in two places.

Boehm filed a claim under workers' compensation but was denied recovery because the Club did not have workers' compensation insurance, in violation of Sec. 39-71-401, MCA. Boehm then brought an action for damages against the Club which is the subject of this appeal.

Appellant has raised two issues on appeal:

1. In an action for damages against an uninsured employer brought pursuant to Sec. 39-71-508, MCA, must the employee prove negligence or breach of duty by the employer in order to recover?

2. Under the facts established at trial, did the court err in granting respondent's motion for a directed verdict?

I

Appellant brought suit against respondent pursuant to Sec. 39-71-508, MCA (1983). This statute allows an employee to maintain a damage action against his employer for injuries arising out of and in the course of employment. However, only employers who are uninsured, as defined by Sec. 39-71-501, MCA, are subject to such an action. Appellant contends that he should not be required to prove negligence or breach of duty by the employer in order to recover under Sec. 39-71-508. Rather, he seems to assert that because of the theory behind workers' compensation and the policy of construing statutes liberally in favor of the worker, he only needs to show he was injured on the job in order to recover damages for his injuries. We cannot agree with this proposition.

Section 39-71-508, MCA (1983), provides in pertinent part:

An employee who suffers an injury arising out of and in the course of employment while working for an uninsured employer as defined in 39-71-501 ... may elect to either receive benefits from the uninsured employers' fund or pursue a damage action against the employer....

[This statute was amended after appellant was injured.] We hold that the words "damage action," as used in the statute, implies that an employee must prove some fault or breach of duty by the uninsured employer before the employee can recover for his injuries. Normally, the action will be one in negligence; however, negligence is not the only theory of liability encompassed by the statute. Strict or vicarious liability may also apply in appropriate situations.

The only other Montana case to consider this issue held that negligence must be shown in order for an employee to recover for his injuries against an uninsured employer. Chancellor v. Hines Motor Supply Co. (1937), 104 Mont. 603, 69 P.2d 764. Furthermore, case law from other states supports the view that an employee must affirmatively show some fault or breach of duty by the uninsured employer before recovery is allowed.

In Arvas v. Feather's Jewelers (N.M.1978), 582 P.2d 1302, an employee was injured in the course and scope of his employment with an uninsured employer. New Mexico has a statute which allows an employee to maintain an action for "damages" against an uninsured employer, and the employee brought suit against her employer pursuant to this statute. Although the employee did not contend that she did not have to prove negligence in order to recover, in upholding the judgment for the employee the court assumed that ordinary principles of negligence applied.

The same approach was taken by the Supreme Court of West Virginia in Bates v. Sirk (1976), 159 W.Va. 917, 230 S.E.2d 738. In language relevant to Boehm's contention, the court stated:

It is readily admitted by the plaintiff that it is not enough for him to show that he suffered injuries and that the defendant failed to subscribe to the workmen's compensation fund. He acknowledges that before such a case warrants jury consideration he must make a prima facie showing of negligence on the part of the defendant which was the proximate cause of his injuries. [Emphasis added.]

Bates, 230 S.E.2d at 741.

Therefore, case law from other states and a plain reading of the statute supports our holding that in a damage action under Sec. 39-71-508, MCA, an employee must make out a prima facie case of breach of duty by the employer before he can recover for his injuries.

Subsequent to appellant's accident, the legislature amended Sec. 39-71-508 and enacted Sec. 39-71-515, MCA, to close a gap that existed earlier. Unlike the old statute, the amended statute allows an employee to file a claim for benefits from the uninsured employers' fund and pursue a damage action against the uninsured employer at the same time without having to make an election. Furthermore, Sec. 39-71-515 gives an employee an independent cause of action against an uninsured employer by imposing liability simply on the basis of the failure of the employer to be enrolled in a workers' compensation plan on the date of injury. Appellant contends that these amendments apply to his case because they were designed to remedy deficiencies in the prior law and are, therefore, remedial rather than substantive.

The guiding principle in this area is Sec. 1-2-109, MCA, which states: "No law contained in any of the statutes of Montana is retroactive unless expressly so declared." However, it has been held that where a statute is procedural, rather than substantive, Sec. 1-2-109 has no application, and the statute will be applied to a cause of action arising before its enactment. State v. District Court of Fourth Judicial District (1966), 148 Mont. 22, 417 P.2d 109. Therefore, we must determine whether the amendment to Sec. 39-71-508 and the enactment of Sec. 39-71-515 are procedural or remedial, as appellant contends, or whether they are substantive.

The general definition of a substantive or retrospective law has been summarized as follows:

A retrospective law, in the legal sense, is one which takes away or impairs vested rights acquired under existing laws, or creates a new obligation and imposes a new duty, or attaches a new disability, in respect to transactions or considerations already past.

73 Am.Jur.2d Statutes, Sec. 348 (1974). Similarly, this Court held that "[a] substantive law may be defined as that law which creates duties, rights, obligations, and responsibilities." Dunham v. Southside National Bank of Missoula (1976), 169 Mont. 466, 472, 548 P.2d 1383, 1386.

Appellant contends that the intent of the legislature was to remedy the defects that existed in Sec. 39-71-508 so that an uninsured employer would not be able to completely escape liability. That may be true; however, that does not mean the amendment is remedial. This statute, as amended, in addition to Sec. 39-71-515, imposes a new liability or obligation upon uninsured employers that did not exist prior to their enactment. Furthermore, the statutes grant employees a new cause of action or right that did not exist prior to their enactment. Were we to allow appellant the benefit of these newly-enacted statutes, respondent would be subjected to a completely new and wholly independent liability from the one that existed under the statutes in effect at the time of appellant's injury. This result fits exactly within the definition of a substantive law. Thus, to apply the amended statute to appellant's cause of action would be to give it retroactive effect.

A substantive law may be applied retroactively only when expressly so declared or intended by the legislature. Penrod v. Hoskinson, M.D. (1976), 170 Mont. 277, 552 P.2d 325. Dunham, supra. There is no indication in Sec. 39-71-508 nor in Sec. 39-71-515 that the legislature intended these statutes to apply to injuries arising before their enactment. Had the legislature intended such a result, it could have easily indicated it in the statutes. Therefore, since appellant's injury occurred before the enactment of the statutes...