Storch v. Board of Directors of Eastern Montana Region Five Mental Health Center

• Decision Date: 21 January 1976
• Docket Number: No. 12932,12932
• Citation: 169 Mont. 176,33 St.Rep. 102,545 P.2d 644
• Parties: Seymour L. STORCH, Plaintiff and Appellant, v. BOARD OF DIRECTORS OF the EASTERN MONTANA REGION FIVE MENTAL HEALTH CENTER et al., Defendants and Respondents.
• Court: Montana Supreme Court

Page 644

545 P.2d 644

169 Mont. 176

Seymour L. STORCH, Plaintiff and Appellant, v. BOARD OF DIRECTORS OF the EASTERN MONTANA REGION FIVE MENTAL HEALTH CENTER et al., Defendants and Respondents.

No. 12932.

Supreme Court of Montana.

Jan. 21, 1976.

Robert L. Stephens, Jr., argued, Billings, for plaintiff and appellant.

Lucas, Jardine & Monaghan, Miles City, James P. Lucas, argued, Miles City, Habedank, Cumming & Best, Sidney, Jacque W. Best, argued, Sidney, for defendants and respondents.

DALY, Justice.

Plaintiff Seymour L. Storch brings this appeal from a judgment of the district court, Custer County, the Hon. A. B. Martin presiding, dismissing plaintiff's complaint for failure to state a claim upon which relief may be granted.

The individually named defendants in this action are members of the Board of Directors of the Eastern Montana Regional Mental Health Center, Region 5. On December 4, 1972, plaintiff Storch was employed on a probationary basis by the Mental Health Center as a drug abuse consultant. During plaintiff's probationary period, board member Ethel Bond made a written recommendation to Rod L. Newman, Program Director for the Center, that Storch's employment be terminated. Upon review of this recommendation and other complaints received, the Board of Directors sought the termination of Storch's employment with the Center for these reasons:

'1. His physical appearance and body cleanliness are not acceptable for a professional person in our community.

'2. While we recognize that his personal life is a private matter, the Board feels we cannot condone the open illicit cohabitation. This does not set a good example for people with problems or our young people.

'3. The medical community has been consulted. The response by the doctors except one has been they would not refer patients to this man and feel the Center has deteriorated since the addition of this man to the staff.

'4. His behavior and actions reflect upon the Center adversely. We realize that there are some people who have benefited from his service. But for the good of the Center and the continued support from the communities, we have asked for Mr. Storch's resignation.'

On May 16, 1973, Rod L. Newman, Program Director, asked Storch for his resignation. Upon Storch's request for an explanation, Newman sent him a letter listing the reasons cited by the Center's Board of Directors and advising Storch that as a probationary employee, he had no right to appeal or hearing. When Storch refused to resign, his employment was terminated, effective June 15, 1973.

With the termination of his employment, Stoch, through legal counsel, filed a complaint in Custer County district court seeking special damages of $250,000, punitive damages of $50,000, and $50,000 for injury to plaintiff's reputation. The three counts of the complaint went basically to the contention that the reasons given by the Board in the letter requesting plaintiff's resignation were libelous reflections on his professional ability and improper invasions of his constitutional right to privacy.

In answer to plaintiff's complaint, defendants filed a motion to dismiss for failure to state a claim upon which relief may be granted. The motion to dismiss stated two basic reasons:

1. That the acts complained of were discharged by an agency of state government as a governmental function and were therefore subject to the defense of sovereign immunity.

2. That the acts complained of were within the proper discharge of an official duty and were therefore subject to the defense of absolute privilege.

The complaint being dismissed with prejudice the district court's judgment operated as a final determination upon the merits and was therefore res judicata for purposes of plaintiff's cause. Thereafter, plaintiff appealed to this Court.

The sole issue before this Court is whether the district court erred in granting defendants' motion to dismiss.

Plaintiff contends that section 83-701, R.C.M.1947, the specific statutory provision then in effect, waived any sovereign immunity (1889 Constitution in effect at time cause of action accrued) to the extent that the state or its instrumentalities were insured. This contention erroneously presupposes that liability insurance is the only limitation on waiver of statutory immunity.

It is an established general principle that any statutory waiver of a state's immunity from suit is to be strictly construed. 72 Am.Jur.2d, States, Etc., § 121. This court recognized the continuing validity of this principle in Kish v. Montana State Prison, 161 Mont. 297, 301, 505 P.2d 891, 893, when it quoted from Kaldahl v. State Highway Commission, 158 Mont. 219, 221, 490 P.2d 220:

"As to legal actions against the state, the 1959 legislature passed Chapter 7, Title 83, R.C.M.1947-'Tort Actions Against the State', and in seven sections, sections 83-701 [169 Mont. 180] through 83-707, carefully determined how, why, and when the state could be sued in a tort action. These legislative enactments recognized tort liability and establish immunity of the state in excess of a collectible insurance. Thus, these statutory provisions provide a remedy against the state under certain circumstances. The legislature has spoken and we are bound by its enactments." (Emphasis supplied.)

See also: Valley County v. Thomas, 109 Mont. 345, 97 P.2d 345; State ex rel. LaPoint v. District Court, 69 Mont. 29, 220 P. 88.

The statute, section 83-701, R.C.M.1947, provided in pertinent part:

'The district courts of the state of Montana shall have exclusive jurisdiction to hear, determine, and render judgment to the extent of the insurance coverage carried by the state of Montana on any claim against the state of Montana for money only, accruing on or after the passage and approval of this act, on account of damage to or loss of property, or on account of personal injuries or death caused by the negligence or wrongful act or omission of any employee of the state of Montana. * * *'

The statute expressly restricts waiver of tort immunity to the common tort actions for recovery of damages for personal injury or death or damage to property. Applying the rule of strict construction, the plaintiff's two basic claims of libel and invasion of privacy do not fit into the tort categories specified in the statute. It thus becomes unnecessary to discuss the effect of any liability insurance because the failure of the 'certain circumstances' test of Kaldahl constitutes an absolute bar to waiver of sovereign immunity.

Plaintiff also contends that defendants' reliance on the privileged communication defense to a libel claim is misplaced because Montana law requires the absence of malice for such a defense. In this case, plaintiff claims the alleged libelous communication involved malice and therefore the defense could not stand. We find no merit in this contention.

A privileged communication is one which, except for the circumstances under which it is made, may be defamatory and actionable. Section 64-208, R.C.M. 1947, provides:

'What communications are privileged. A privileged publication is one made:

'1. In the proper discharge of an official duty;

'2. In any legislative or judicial proceeding, or in any other official proceeding authorized by law;

'3. In a communication, without malice, to a person interested therein, by one who is also interested, or by one who stands in such relation to the person interested as to afford a reasonable ground for supposing the motive for the communication innocent, or who is requested by the person interested to give the information;

'4. By a fair and true report, without malice, of a judicial, legislative, or other public official proceeding, or of anything said in the course thereof.'

While some of the quoted subsections do mention malice the pertinent subsection 1, says nothing about qualified privilege. Rather it constitutes an absolute privilege with the only requirement being that the intradepartment communication be...