Marias Healthcare Services, Inc. v. Turenne

• Decision Date: 24 July 2001
• Docket Number: No. 00-236.,00-236.
• Citation: 2001 MT 127,28 P.3d 491,305 Mont. 419
• Parties: MARIAS HEALTHCARE SERVICES, INC., Plaintiff, Respondent, and Cross-Appellant, v. Dr. Annette Yvette Marie TURENNE, Defendant, Counter Claimant and Appellant.
• Court: Montana Supreme Court

28 P.3d 491

2001 MT 127

305 Mont. 419

MARIAS HEALTHCARE SERVICES, INC., Plaintiff, Respondent, and Cross-Appellant, v. Dr. Annette Yvette Marie TURENNE, Defendant, Counter Claimant and Appellant.

No. 00-236.

Supreme Court of Montana.

Submitted on Briefs December 7, 2000.

Decided July 24, 2001.

Frederick F. Sherwood, Reynolds, Motl and Sherwood, P.L.L.P., Helena, MT, For Appellant.

Peter O. Maltese, Attorney at Law, Sidney, MT, For Respondent.

Justice JIM REGNIER delivered the Opinion of the Court.

¶ 1 After a bench trial, the Ninth Judicial District Court, Toole County, dismissed both the claim by Marias Healthcare Services, Inc., and the counterclaim by Dr. Annette Yvette Marie Turenne and denied attorneys fees and costs to both parties. Dr. Turenne appeals, and Marias Healthcare cross-appeals. The appellant, Dr. Turenne, raises several issues, which we restate as follows:

1. Did the District Court err in determining that Dr. Turenne's claim for wages and penalties was not timely filed?

2. Did the District Court properly determine that Dr. Turenne failed to provide proof that Marias Healthcare did not fully compensate her pursuant to the employment contract?

3. Did the District Court err in determining that Dr. Turenne was properly suspended without pay pursuant to the employment contract?

4. Did the District Court err in determining that Marias Healthcare properly deducted the cost of an educational workshop and supplies from Dr. Turenne's compensation?

5. Did the District Court err in determining that Dr. Turenne was not entitled to damages for the cost of replacement medical malpractice insurance coverage?

Both Dr. Turenne and cross-appellant Marias Healthcare appeal the denial of attorney fees. We affirm.

BACKGROUND

¶ 2 On October 14, 1998, Marias Healthcare Services, Inc., a health care facility in Havre, Montana, brought an action against Dr. Annette Yvette Marie Turenne for breach of a written employment contract. Marias Healthcare alleged that Dr. Turenne refused to endorse State warrants made payable to her for Medicaid Services while she was an employee of Marias Healthcare. Dr. Turenne counterclaimed for compensation still due under her employment contract, damages for early termination of her medical malpractice insurance, and for penalties and attorneys fees pursuant to relevant wage statutes. Both parties claimed attorneys fees pursuant to breach of the employment contract.

¶ 3 On October 8, 1999, Dr. Turenne moved for summary judgment, which was subsequently denied by the District Court except for a finding that Marias Healthcare was liable for the early termination of the doctor's malpractice insurance coverage. Marias moved for reconsideration of the motion for summary judgment relating to the medical malpractice insurance coverage issue. The District Court subsequently vacated the summary judgment order relating to malpractice insurance coverage and a bench trial was held on January 18 and 19, 2000.

¶ 4 On March 2, 2000, the District Court issued its Findings of Fact and Conclusions of Law dismissing Marias Healthcare's claim and dismissing Dr. Turenne's counterclaims. In its Findings of Fact and Conclusions of Law, the District Court concluded Dr. Turenne's wage claims were time barred but proceeded to address the merits of her claims. The District Court further ruled that neither party was entitled to attorneys fees or costs. The decision was appealed by Dr. Turenne and cross-appealed by Marias Healthcare.

STANDARD OF REVIEW

¶ 5 We review a district court's findings of fact to determine whether they are clearly erroneous. Daines v. Knight (1995), 269 Mont. 320, 324, 888 P.2d 904, 906. We review a district court's conclusions of law to determine whether its interpretation is correct. Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686.

ISSUE ONE

¶ 6 Did the District Court err in determining that Dr. Turenne's claim for wages was not timely filed?

¶ 7 On October 30, 1997, Marias Healthcare paid Dr. Turenne's salary based on the previous year's salary, failing to take into account the annual cost of living increase. Upon notice of the error, Marias Healthcare reimbursed Dr. Turenne. Dr. Turenne also claims that Marias Healthcare improperly suspended her without pay beginning on October 27, 1997. Dr. Turenne filed wage claims relating to the late pay and suspension pursuant to § 39-3-201, MCA, and § 39-3-206, MCA, against Marias Healthcare on April 30, 1999, as a counterclaim against Marias Healthcare's claim against her for failing to sign outstanding warrants.

¶ 8 Marias Healthcare contends that Dr. Turenne is time barred from raising this claim pursuant to the statute of limitations set forth in § 39-3-207, MCA, which provides that an employee may recover all wages and penalties by filing a complaint within 180 days of a default or delay in the payment of wages. Dr. Turenne argues that Marias Healthcare may not raise a statute of limitations defense because such a defense is an affirmative defense that must have been raised in the original pleadings, and Marias Healthcare first raised the issue in its post trial memorandum. We agree.

¶ 9 A statute of limitations defense is an affirmative defense that is waived if it is not raised in the answer to a claim. See Rule 8(c), M.R.Civ. P. See also Estabrook v. Baden (1997), 284 Mont. 419, 423, 943 P.2d 1334, 1336. Marias Healthcare failed to raise the issue in its original pleadings and is thus barred from raising the defense. Additionally, Marias Healthcare failed to respond to the issue when it was presented to this Court. Thus, we conclude that the District Court erred in determining that Dr. Turenne's wage claims were time barred. In turn, we shall address the merits of her claims.

ISSUE TWO

¶ 10 Did the District Court properly determine that Dr. Turenne failed to prove that Marias Healthcare did not fully compensate her pursuant to the employment agreement?

¶ 11 Dr. Turenne argues that she provided sufficient proof that Marias Healthcare failed to pay her an appropriate salary as required by § 39-3-204, MCA, by miscalculating her monthly income for October 1997 and failing to include a cost of living increase to her base salary. Dr. Turenne claims that she is entitled to damages for such an underpayment pursuant to § 39-3-204, MCA. She also argues that pursuant to § 39-3-206, MCA, a penalty must also be assessed against and paid by Marias Healthcare in an amount not to exceed 110% of the wages due and unpaid.

¶ 12 Marias Healthcare responds that although they miscalculated Dr. Turenne's monthly paycheck in October 1997, Dr. Turenne failed to provide adequate proof that she was not paid her full compensation package as required by the employment contract because Marias Healthcare, upon discovery of the error, fully reimbursed Dr. Turenne in the subsequent paychecks. Marias Healthcare also argues that Dr. Turenne is excluded from a wage claim pursuant to § 39-3-204(3), MCA, which excludes any professional, supervisory, or technical employee who by custom receives wages earned at least once monthly. The District Court concluded that Dr. Turenne was to receive an annual "total compensation package," and that after considering various deduction packages, Dr. Turenne failed to prove that she was underpaid by Marias Healthcare.

¶ 13 Although payment stubs representing a portion of Dr. Turenne's monthly compensation were entered into the record, the evidence is incomplete to determine whether Dr. Turenne was underpaid in terms of her total compensation package for October 1997. The compensation provision of the employment agreement was intentionally flexible for tax purposes, designed to benefit the employee physicians by withholding certain claims from physician paychecks. No evidence was presented by Dr. Turenne as to the appropriate or required monthly level of compensation, accounting for social security, workers compensation or other withholding, or the favorable tax benefits employed by Dr. Turenne, which would adequately demonstrate whether or not Marias Healthcare had provided inadequate compensation. See § 26-1-401, MCA.

¶ 14 Thus, based on the evidence presented, we conclude that the District Court did not err in determining that Dr. Turenne failed to produce sufficient evidence. We need not reach the question as to whether Dr. Turenne's claim was excluded under § 39-3-204(3), MCA.

ISSUE THREE

¶ 15 Did the District Court err in determining that Dr. Turenne was properly suspended without pay pursuant to the employment contract?

¶ 16 Dr. Turenne argues that Marias Healthcare improperly suspended her. She argues that pursuant to the employment contract, she cannot be suspended without pay except under specific circumstances such as limitation or suspension of her license or hospital privileges or the termination of the employment contract and that her suspension was not based on these circumstances. Marias Healthcare argues that the employment contract incorporates other Marias Healthcare policies and procedures which allowed for her suspension without pay. We agree.

¶ 17 In the case at hand, Marias Healthcare and Dr. Turenne signed and executed a valid employment contract that contained specific references to Marias Healthcare policies and provisions. Thus, because the employment contract was adequately bargained for, sufficient consideration was present, and both parties were on notice of the terms of the contract, the inclusion of the referenced policies and procedures is valid. See, e.g., Langager v. Crazy Creek Products, Inc., 1998 MT 44, ¶¶ 20-21, 287 Mont. 445, ¶¶ 20-21, 954 P.2d 1169, ¶¶ 20-21 (holding that the employer was bound by the terms of the employment manual when it was given to the employee and specifically referenced during her employment).

¶ 18 Specifically, the employment contract at issue states in Article XII, paragraph E, that Dr. Turenne shall follow...