McConkey v. Flathead Electric Co-Op.
| Decision Date | 20 December 2005 |
| Docket Number | No. 04-574.,04-574. |
| Citation | 2005 MT 334,125 P.3d 1121,330 Mont. 48 |
| Court | Montana Supreme Court |
| Parties | Warren McCONKEY, Plaintiff and Appellant, v. FLATHEAD ELECTRIC COOPERATIVE, James Malone, and John Does 1 through 5, Defendants and Respondents. |
Patrick G. Frank, Worden Thane P.C., Missoula, Montana, for Appellant.
Donald C. Robinson, Ronald A. Thuesen, Poore, Roth & Robinson, P.C., Butte, Montana, for Respondent Flathead Electric Cooperative.
Tiffany B. Lonnevik, Lonnevik Law Firm, P.C., Kalispell, Montana, Maxon R. Davis, Davis, Hatley, Haffeman & Tighe, P.C., Great Falls, Montana, for Respondent James Malone.
¶ 1 Warren McConkey (McConkey) appeals from an order of the Eleventh Judicial District, Flathead County, granting Respondents' motions for summary judgment and dismissing all of his claims. We affirm.
¶ 2 McConkey raises the following issues on appeal:
¶ 3 1. Did the District Court err in holding that Flathead Electric does not have to pay McConkey 100% of his accrued personal time?
¶ 4 2. Did the District Court err in ruling as a matter of law that there was good cause for McConkey's discharge?
¶ 5 3. Did the District Court err in ruling that Flathead Electric did not violate its written personnel policies in discharging McConkey?
¶ 6 4. Did the District Court err in concluding as a matter of law that Defendant Malone did not libel McConkey?
¶ 7 5. Did the District Court err in dismissing McConkey's claim for infliction of severe emotional distress?
¶ 8 Appellant Warren McConkey was hired as the general manager of Flathead Electric Cooperative (FEC) on March 16, 1988. He held this position until he was terminated on February 13, 2002.
¶ 9 In 1998, FEC acquired PacifiCorp, an investor owned utility that served the urban areas of northwest Montana. FEC paid $110 million for PacifiCorp and increased its customer base from approximately 12,000 to 55,000 subscribers. As FEC's general manager, McConkey developed the plan to acquire the assets of PacifiCorp. McConkey began to implement his acquisition plan in 1996, although it had been his goal to acquire PacifiCorp since he took over as general manager. McConkey actively campaigned for the acquisition, and it was eventually approved by FEC's Board of Trustees (Board). FEC did not seek member approval. The acquisition was highly leveraged, which had a negative effect on FEC's debt/equity ratio, causing it to be ranked lower for borrowing purposes. Also, following the acquisition, it was discovered that PacifiCorp had misstated revenues on its financial statements, which later contributed to FEC's fiscal problems.
¶ 10 In 1999, FEC began to experience financial deficits; $2.08 million in 1999 and $1.2 million in 2000. This was a result of several factors, including the leveraged acquisition of PacifiCorp and the rising costs of energy. Concerning the latter, McConkey stated in his deposition that he thought cooperatives would fare well in an open market pricing environment. This was evinced in the power supply contracts McConkey negotiated wherein the per megawatt purchase price was fixed for the first three years, followed by a five-year contract binding FEC to pay a variable rate based upon a market price index. McConkey believed that FEC would benefit from such a contract because electric supply rates would remain stable. In addition, McConkey believed FEC would be able to secure lower supply costs through greater bargaining power after its acquisition of PacifiCorp.
¶ 11 When FEC's power supply contract switched to open-market pricing, its cost of electrical power increased from approximately $40,000 a month to a high of $840,000 per month. This resulted in revenue deficits that required FEC to increase its electricity rates to its members by 6.9% in April 2000, 29.0% in April 2001, and 12.5% in October 2001. These increases were contradictory to what members had been promised. Thereafter, at a cost of $48,000 to $49,000, FEC retained counsel to explore the possibility of filing for bankruptcy protection.
¶ 12 In August 2001, a special board meeting was held to consider a motion to terminate McConkey as general manager. McConkey's perceived inadequacies and failures were read into the record, in his presence. In addition, a summary of these reasons was prepared by a minority of the members of the Board and presented to McConkey. The motion to terminate McConkey was rejected by a 7 to 5 vote. However, there continued to be controversy over whether McConkey should be retained. McConkey did not accept the criticism from the minority of the Board as something he needed to address in order to keep his job.
¶ 13 In December 2001, a general manager performance review form was completed by each board member. All parties agreed that the results of this review were conflicting; with the reviews falling along lines similar to that of the August 2001 vote.
¶ 14 Thereafter, at a meeting on February 13, 2002, the Board voted unanimously to terminate McConkey as general manager. There had been no change in board members since the August 2001 meeting. A letter was delivered to McConkey stating the reasons for his discharge.
¶ 15 At the time McConkey was terminated he had accrued personal (vacation) time under FEC's policies. He was paid cash for 95% of this accrued personal time.
¶ 16 James Malone was elected to FEC's Board of Trustees in 2001. Shortly after being elected, Malone made it clear to McConkey that he would work to have him fired as general manager. In April 2001, just after assuming his seat on the Board, Malone began writing letters to local newspapers. These letters are the primary basis for McConkey's defamation claim against Malone. In addition to the letters, there were several advertisements placed in local newspapers regarding McConkey and FEC management, which Malone may have had some part in.
¶ 17 Following his termination, McConkey filed a complaint seeking damages from FEC for wrongful discharge alleging that he was not terminated for good cause and that FEC violated its written personnel polices. McConkey further sought damages from FEC for failure to pay personal time, that had accrued prior to his termination, at 100% of his salary. McConkey also filed claims against Malone for libel, and infliction of emotional distress.
¶ 18 The District Court granted FEC's motion for summary judgment and dismissed McConkey's claims against FEC, finding that he was terminated for good cause, FEC did not violate its written personnel policies, and that personal time accumulated by McConkey was not wages pursuant to § 39-3-201(6)(a), MCA. The District Court also granted Malone's motion for summary judgment and dismissed McConkey's libel and emotional distress claims. McConkey appeals.
¶ 19 We review a district court's summary judgment ruling de novo and employ the same method of evaluation, based upon Rule 56, M.R.Civ.P., as applied by the district court. Andrews v. Plum Creek Mfg., LP., 2001 MT 94, ¶ 5, 305 Mont. 194, ¶ 5, 27 P.3d 426, ¶ 5. Summary judgment is proper if the record discloses no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Lutey Const. v. State (1993), 257 Mont. 387, 389, 851 P.2d 1037, 1038. A party seeking summary judgment has the burden of establishing a complete absence of any genuine factual issues. Howard v. Conlin Furniture No. 2, Inc. (1995), 272 Mont. 433, 436, 901 P.2d 116, 118. Once the moving party has met its burden, the opposing party must present material and substantial evidence, rather than mere conclusory or speculative statements, to raise a genuine issue of material fact. Hanson v. Water Ski Mania Estates, 2005 MT 47, ¶ 11, 326 Mont. 154, ¶ 11, 108 P.3d 481, ¶ 11. All reasonable inferences that might be drawn from the offered evidence should be drawn in favor of the party opposing summary judgment. Howard, 272 Mont. at 437, 901 P.2d at 119.
¶ 20 Did the District Court err in holding that Flathead Electric does not have to pay McConkey 100% of his personal time?
¶ 21 FEC provides its employees with "personal time," analogous to vacation time, where the objective is "[t]o make available personal time to be used by an employee for vacation, personal illness, personal accident or other personal business." McConkey argues that the District Court erred in holding that his personal time did not qualify as "wages" pursuant to § 39-3-201(6)(a), MCA, and holding that he was thus not entitled to be paid for all such time he accrued at 100%.
¶ 22 Section 39-3-204(1), MCA, requires that an employer pay its employees "the wages earned by the employee...." (emphasis added). The statute further defines "wages," in part, as "any money due an employee from the employer...." Section 39-3-201(6)(a), MCA. Under a plain reading of the statute, the District Court was correct in concluding that the personal time, as a matter of law, does not automatically qualify as "wages." However, to the extent the employer has obligated itself to pay money for earned but unused personal time, there exists an obligation to pay wages under § 39-3-201(6)(a), MCA. Thus, FEC is liable to McConkey for the amount it agreed to pay. Langager v. Crazy Creek Products, Inc., 1998 MT 44, ¶ 25, 287 Mont. 445, ¶ 25, 954 P.2d 1169, ¶ 25 (). Here, the parties agree that McConkey earned the relevant personal time. The issue is whether the policy set by FEC, that McConkey would be compensated for earned personal time at 95% of his pay rate, is legal.
¶ 23 The employer is free to set the terms and conditions of employment and compensation. Langager, ¶ 25 (quoting Rowell v. Jones & Vining Inc. (Maine 1987), 524 A.2d 1208, 1211). The employee is free to...
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