Kearney v. KXLF Communications, Inc.

• Decision Date: 17 February 1994
• Docket Number: No. 93-223,93-223
• Citation: 263 Mont. 407,869 P.2d 772
• Parties: Patrick KEARNEY, Plaintiff, Respondent, and Cross-Appellant, v. KXLF COMMUNICATIONS, INC., a Montana Corporation, Defendant and Appellant.
• Court: Montana Supreme Court

Page 772

869 P.2d 772

263 Mont. 407

Patrick KEARNEY, Plaintiff, Respondent, and Cross-Appellant, v. KXLF COMMUNICATIONS, INC., a Montana Corporation, Defendant and Appellant.

No. 93-223.

Supreme Court of Montana.

Submitted on Briefs Jan. 7, 1994.

Decided Feb. 17, 1994.

R.D. Corette and Gregory C. Black, Corette, Pohlman, Allen, Black & Carlson, Butte, S.M. Fallis, Jr. and Tom Robertson, Nichols, Wolfe, Stamper, Nally & Fallis, Inc., Tulsa, OK, for appellant.

Donald C. Robinson and J. Richard Orizotti, Poore, Roth & Robinson, Butte, for respondent.

TRIEWEILER, Justice.

Patrick Kearney commenced this action in the District Court for the Second Judicial District in Silver Bow County alleging that he was wrongfully discharged from employment and was entitled to overtime compensation, statutory penalties, and attorney fees. Following an eight-day jury trial in Bozeman, the jury returned a verdict in favor of Kearney on the claim for overtime compensation. However, judgment was entered in favor of Kearney's employer, KXLF Communications, Inc., on the wrongful discharge from employment claim. The court awarded certain costs and attorney fees to Kearney, and denied costs and attorney fees to KXLF. KXLF and Kearney appeal.

We affirm in part, and reverse in part, the judgment of the District Court.

The following issues are presented on appeal:

1. Did the District Court err when it denied KXLF's motions for summary judgment and for a directed verdict dismissing Kearney's overtime compensation claim?

2. Did the District Court err when it held that a five-year statute of limitations applied to Kearney's overtime compensation claim?

3. Did the District Court err when it refused to award attorney fees to KXLF pursuant to the arbitration provisions of the Wrongful Discharge from Employment Act?

4. Did the District Court improperly award certain court costs to Kearney?

5. Did the District Court err when it directed a verdict against Kearney dismissing his claim that KXLF had violated the express provisions of its own written personnel policy?

Plaintiff Patrick Kearney was hired as a news reporter in 1981 by KXLF, the Butte station of the MTN television network. In 1986, Kearney was promoted to the position of news director by his supervisor, Ron Cass, General Manager of KXLF. At that time, KXLF was one of four MTN television stations in Montana owned by SJL of Montana Associates. In December 1986, Evening Post Publishing Company purchased all of the MTN television stations except the Billings station, and formed KXLF Communications, Inc. (KXLF), to operate Station KXLF in Butte.

News broadcasts for the MTN network originated primarily from Station KTVQ in Billings. The main segment of the news was broadcast statewide by KTVQ, and each of the local studios produced a short local segment of the newscast. The broadcast was then returned to KTVQ for statewide coverage of weather and sports. As the news director at KXLF, Kearney was responsible for story selection, reporting, production, and editing of the local segment of the newscasts.

When Evening Post purchased KXLF, the broadcasts continued to originate from Billings under the existing MTN network news agreement. However, in 1988, KXLF management made the decision to convert to a completely local news broadcast. Implementation of this plan required the purchase of new equipment and increased responsibilities for the director of the news department.

Although Kearney anticipated continuing as news director, Cass testified that he believed Kearney would not be able to handle the increased duties and responsibilities. According to Cass, this was due to Kearney's history of conflicts with other staff members and problems controlling his temper. On December 6, 1988, Cass notified Kearney that he was removing him as news director and offered him the position of sports director. Kearney notified Cass the following day that he would not accept the demotion to sports director and thereby terminated his employment with KXLF.

In a complaint filed in the District Court on December 5, 1989, against Evening Post and Ron Cass, Kearney alleged that he had been constructively discharged from employment without good cause in violation of § 39-2-904(2), MCA, and that KXLF had violated the express provisions of its written personnel policy in violation of § 39-2-904(3), MCA. Kearney further alleged that he had worked in excess of 3626 overtime hours for which KXLF had not compensated him at the appropriate rate of pay. In addition to damages and overtime compensation, Kearney sought the statutory penalties provided for in Montana's wage statutes and attorney fees.

By amended complaint dated February 5, 1989, Kearney added KXLF as a defendant. The court later permitted Kearney to add a claim for intentional interference with business relationships, naming SJL of Montana Associates and Kim Allen Nash of KTVQ in Billings as defendants.

At the close of discovery, all defendants moved for summary judgment. In an order issued on November 18, 1992, the court granted summary judgment to Evening Post and Cass, dismissing them from the action. KXLF's motion for summary judgment regarding the claims for wrongful discharge and overtime compensation was denied.

A jury trial commenced on November 23, 1992. At the conclusion of the eight-day trial, the court directed a verdict against Kearney and dismissed that part of his wrongful discharge claim which was based on a violation of the express provisions of the employer's own written personnel policy, but refused to direct a verdict on the claim for overtime compensation. The jury returned a verdict in favor of Kearney on the overtime claim in the amount of $48,986. In regard to the claim that Kearney had been constructively discharged without good cause, the jury returned a verdict in favor of KXLF. Finally, the jury found that Nash and SJL had not interfered with Kearney's business relationships.

In a judgment entered on January 14, 1993, Kearney was awarded overtime compensation plus the statutory penalty, for a total amount of $97,972. The court also awarded costs and attorney fees to Kearney and denied costs and attorney fees to KXLF. From this judgment, KXLF appeals.

Kearney cross-appeals from the court's directed verdict in favor of KXLF on the issue of whether KXLF violated the express provisions of its written personnel policy.

ISSUE 1

Did the District Court err when it denied KXLF's motions for summary judgment and for a directed verdict dismissing Kearney's overtime compensation claim?

KXLF contends that the District Court should have dismissed the claim for overtime compensation on the basis that Kearney was a covered employee under the federal Fair Labor Standards Act (FLSA) found at 29 U.S.C. §§ 201 through 219 (1988), and therefore, was not entitled to overtime compensation pursuant to § 39-3-405, MCA, of Montana's Minimum Wage and Maximum Hour Act. KXLF asserts that under § 213(b)(9) of the FLSA, a person employed as an announcer or news editor in a small market television station such as KXLF is exempt from overtime compensation benefits.

As conceded in KXLF's reply brief, however, we recently addressed this precise issue in Berry v. KRTV Communications, Inc. (1993), --- Mont. ----, 865 P.2d 1104. In Berry, we held that an employee in Kearney's position is not covered by the FLSA due to the exemption found at 29 U.S.C. § 213(b)(9) (1988). Furthermore, because Montana is not preempted from providing overtime protection according to 29 U.S.C. § 218 (1988), we held that an employee such as Kearney is entitled to overtime compensation under Montana's wage protection statute. Berry, 865 P.2d at 1111.

Therefore, pursuant to our decision in Berry, Kearney is entitled to benefits for overtime work as provided in Montana's Minimum Wage and Maximum Hour Act. The District Court did not err when it denied KXLF's motions to dismiss this claim.

ISSUE 2

Did the District Court err when it held that a five-year statute of limitations applied to Kearney's overtime compensation claim?

Kearney filed his claim for overtime compensation on December 5, 1989. He sought benefits for the years 1987 and 1988. KXLF contends that the applicable statute of limitations for asserting an overtime claim should be two years, and that Kearney should not be awarded benefits for hours worked prior to December 5, 1987. This contention is based on § 27-2-211(1)(c), MCA, which establishes a two-year limitation for commencing actions when liability is created by a statute. In this instance, KXLF contends that liability was based on § 39-3-405, MCA, which requires employers to pay additional compensation for hours worked in excess of 40 hours during a workweek.

The District Court, however, found the applicable statute of limitations to be five years pursuant to § 27-2-202(2), MCA, and this Court's decision in Intermountain Deaconess Home v. State (1981), 191 Mont. 309, 623 P.2d 1384. In that case, we held that a five-year statute of limitations pertains to a wage dispute based on an oral contract of employment. See also, Pope v. Keefer (1979), 180 Mont. 454, 591 P.2d 206. Although KXLF recognizes this Court's conclusion in Intermountain and similar cases, it argues that those cases failed to properly analyze § 27-2-211, MCA.

The resolution of this issue requires us to reconcile inconsistent statutes of limitations, both of which have application to this situation. Kearney did perform services as an employee of KXLF pursuant to an oral contract of employment, and KXLF is liable for the payment of overtime wages to Kearney because of Montana's Minimum Wage and Maximum Hour Act.

In Ritland v. Rowe (1993), 260 Mont. 453, 861 P.2d 175, 50 St.Rep. 1183, and Thiel v. Taurus Drilling Ltd. 1980-II (1985), 218 Mont. 201, 710 P.2d 33, we addressed the problem of inconsistent statutes of limitations. In Ritland, 861 P.2d at 178, we held that where a...