NO. 80-134
I N THE SUPREME COURT OF THE STATE OF M N A A OTN
W Y E THORNTON, AN
P l a i n t i f f and A p p e l l a n t ,
THE COMMISSIONER OF THE DEPARTMENT OF LABOR AND INDUSTRY, STATE O MONTANA, F
Defendants and Respondents.
Appeal from: D i s t r i c t Court of t h e F i f t h J u d i c i a l D i s t r i c t , I n a n d f o r t h e County o f J e f f e r s o n , Montana Honorable Frank B l a i r , Judge p r e s i d i n g .
C o u n s e l o f Record:
For Appellant:
P a t r i c k F. F l a h e r t y a r g u e d , B o u l d e r , Montana
F r o Respondents:
M a r r a , Wenz, Iwen a n d J o h n s o n , G r e a t F a l l s , Montana James G a r d n e r a r g u e d , Dept. o f L a b o r , H e l e n a , Montana
Submitted: November 2 1 , 1980
Decided: DEC 2 q f$j@($j Mr. J u s t i c e Gene B. D a l y d e l i v e r e d t h e O p i n i o n o f t h e C o u r t . On A u g u s t 1 0 , 1978, a p p e l l a n t f i l e d a wage c l a i m w i t h
t h e Commissioner o f t h e Department o f Labor and I n d u s t r y . A
c o n t e s t e d c a s e h e a r i n g was h e l d i n G r e a t F a l l s o n November
14, 1978. The hearings officer ruled in favor of
respondents. On M a r c h 11, 1 9 7 9 , appellant petitioned the
District Court of the Fifth Judicial District, i n and for
t h e County o f Jefferson, for judicial review of the final
agency decision. The District C o u r t d i s m i s s e d appellant's
p e t i t i o n f o r j u d i c i a l review. Appellant appeals.
A p p e l l a n t was e m p l o y e d as a t r u c k d r i v e r b y r e s p o n d e n t s
John and Simone Furgeri on or about July 17, 1978. He
terminated his employment on August 4, 1978, due to
nonpayment o f wages. A p p e l l a n t was h i r e d f o r $ . 1 3 p e r m i l e
plus $3.00 per hour for unloading and loading. Appellant
claimed he drove 7,250 miles ($942.50), worked 62 hours
($186.00), and accumulated $86.39 in expenses, totaling
$1,214.89 due.
On November 14, 1978, an administrative hearing was
held. The hearings examiner determined there were no
e x p e n s e s d u e a n d t h a t a p p e l l a n t was therefore entitled to
$1,128.50 ($942.50 plus 186.00). The examiner a l s o found
t h a t r e s p o n d e n t s had p a i d a p p e l l a n t $500.00 on September 5
and $281.75 on October 13, 1978, in back wages. The
examiner subtracted $781.75 from $1,128.50 and found
appellant was entitled to $346.75. Pursuant to section
39-3-206, MCA, the examiner assessed a penalty on this
p o r t i o n o f t h e wages d u e which r e s u l t e d i n a n e t amount d u e
appellant of $693.50. [Due t o an arithmetical error the
hearings examiner found $492.50 due appellant; however, using the same formula, the error was corrected at the
h e a r i n g on t h e p e t i t i o n f o r j u d i c i a l r e v i e w . ] The e x a m i n e r
a l s o denied a p p e l l a n t ' s prayer f o r attorney fees.
On appeal the District Court affirmed the examiner's
o r d e r and d e n i e d a p p e l l a n t ' s p e t i t i o n f o r r e v i e w .
There are two issues presented to this Court for
review:
1. Did the District Court err in affirming the
decision of the hearings examiner to assess a statutory
p e n a l t y t o t h e b a l a n c e due a t t h e t i m e o f t h e h e a r i n g r a t h e r
t h a n t h e amount d u e a t t h e i n i t i a t i o n o f t h e p r o c e e d i n g s ?
2. Did the District Court err in affirming the
d e c i s i o n of t h e h e a r i n g s e x a m i n e r r e f u s i n g t o award a t t o r n e y
f e e s t o appellant a t the administrative hearing level?
A p p e l l a n t c o n t e n d s t h a t s e c t i o n 39-3-206, MCA, imposes
a m a n d a t o r y p e n a l t y on a n e m p l o y e r who f a i l s t o p a y wages t o
an employee when the wages become due. By imposing a
penalty on $346.75, which was due at the time of the
hearing, rather than on $1,128.50, which was d u e at the
i n i t i a t i o n o f t h e p r o c e e d i n g s , t h e h e a r i n g s e x a m i n e r and t h e
District Court made a clear error of law in direct
c o n t r a v e n t i o n of t h e s t a t u t e .
A p p e l l a n t f u r t h e r c o n t e n d s t h a t s e c t i o n 39-3-214, MCA,
p r o v i d e s a m a n d a t o r y award o f a t t o r n e y f e e s and c o s t s f o r
e m p l o y e e s who s u c c e s s f u l l y p r o v e a c l a i m f o r u n p a i d wages.
The hearings examiner and the District Court erred in
f a i l i n g t o award a t t o r n e y f e e s and c o s t s a t e i t h e r s t a g e o f
the proceedings.
Respondents' position is t h a t t h i s case involves the
c o n s t r u c t i o n of two s t a t u t o r y p r o v i s i o n s - - s e c t i o n 39-3-206, MCA (the penalty statute), and section 39-3-211, MCA (the statute giving the commissioner discretion to settle or adjust claims upon assignment). In an attempt to promote settlements and avoid lengthy litigation, the commissioner, pursuant to his section 39-3-211, MCA, authority, compromised the penalty because the employer partially paid the wages due appellant prior to the administrative hearing. Respondents contend there exists a rebuttable presumption in favor of the action of an administrative agency. In the absence of a showing of manifest error by the party challenging the agency action, the agency order is deemed valid and enforceable. Appellant failed to meet his burden of proof; therefore, the District Court's order affirming the agency's decision should be affirmed. Concerning the second issue, respondents contend that, pursuant to section 39-3-214, MCA, an award of attorney fees is provided for only when it is necessary to institute "a suit at law" for the recovery of wages. An administrative hearing is not a suit at law. Therefore, neither the commissioner of the Department of Labor and Industry nor the District Court has the authority to award attorney fees for representation in an administrative hearing. The District Court has statutory authority to award attorney fees on a wage claim only for the legal work performed at the District Court level. When reviewing an administrative order, there exists a rebuttable presumption in favor of the decision of the agency, and the burden of proof is on the party attacking it to show that it is erroneous. Partoll v. Anaconda Copper Min. Co. (1949), 122 Mont. 305, 311, 203 P.2d 974; Kerns v. Anaconda Copper Min. Co. ( 1 9 3 0 ) , 87 Mont. 546, 289 P. 563.
T h i s C o u r t may n o t s u b s t i t u t e i t s j u d g m e n t f o r t h a t of the
t r i a l c o u r t or agency a s t o t h e weight of t h e e v i d e n c e on
questions of fact. Section 2-4-704 ( 2 ) , MCA; Robins v.
Anaconda Aluminum Co. ( 1 9 7 8 ) , 1 7 5 Mont. 514, 575 P.2d 67.
W may r e v e r s e o r m o d i f y t h e d e c i s i o n i f s u b s t a n t i a l r i g h t s e
of the appellant have been prejudiced because the
administrative findings, inferences, conclusions, or
decisions are clearly erroneous in view of the reliable,
probative and substantial evidence of the whole record.
Section 2-4-704(2)(e), MCA. I n Brurud v. J u d g e Moving and
S t o r a g e Company, Inc.
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NO. 80-134
I N THE SUPREME COURT OF THE STATE OF M N A A OTN
W Y E THORNTON, AN
P l a i n t i f f and A p p e l l a n t ,
THE COMMISSIONER OF THE DEPARTMENT OF LABOR AND INDUSTRY, STATE O MONTANA, F
Defendants and Respondents.
Appeal from: D i s t r i c t Court of t h e F i f t h J u d i c i a l D i s t r i c t , I n a n d f o r t h e County o f J e f f e r s o n , Montana Honorable Frank B l a i r , Judge p r e s i d i n g .
C o u n s e l o f Record:
For Appellant:
P a t r i c k F. F l a h e r t y a r g u e d , B o u l d e r , Montana
F r o Respondents:
M a r r a , Wenz, Iwen a n d J o h n s o n , G r e a t F a l l s , Montana James G a r d n e r a r g u e d , Dept. o f L a b o r , H e l e n a , Montana
Submitted: November 2 1 , 1980
Decided: DEC 2 q f$j@($j Mr. J u s t i c e Gene B. D a l y d e l i v e r e d t h e O p i n i o n o f t h e C o u r t . On A u g u s t 1 0 , 1978, a p p e l l a n t f i l e d a wage c l a i m w i t h
t h e Commissioner o f t h e Department o f Labor and I n d u s t r y . A
c o n t e s t e d c a s e h e a r i n g was h e l d i n G r e a t F a l l s o n November
14, 1978. The hearings officer ruled in favor of
respondents. On M a r c h 11, 1 9 7 9 , appellant petitioned the
District Court of the Fifth Judicial District, i n and for
t h e County o f Jefferson, for judicial review of the final
agency decision. The District C o u r t d i s m i s s e d appellant's
p e t i t i o n f o r j u d i c i a l review. Appellant appeals.
A p p e l l a n t was e m p l o y e d as a t r u c k d r i v e r b y r e s p o n d e n t s
John and Simone Furgeri on or about July 17, 1978. He
terminated his employment on August 4, 1978, due to
nonpayment o f wages. A p p e l l a n t was h i r e d f o r $ . 1 3 p e r m i l e
plus $3.00 per hour for unloading and loading. Appellant
claimed he drove 7,250 miles ($942.50), worked 62 hours
($186.00), and accumulated $86.39 in expenses, totaling
$1,214.89 due.
On November 14, 1978, an administrative hearing was
held. The hearings examiner determined there were no
e x p e n s e s d u e a n d t h a t a p p e l l a n t was therefore entitled to
$1,128.50 ($942.50 plus 186.00). The examiner a l s o found
t h a t r e s p o n d e n t s had p a i d a p p e l l a n t $500.00 on September 5
and $281.75 on October 13, 1978, in back wages. The
examiner subtracted $781.75 from $1,128.50 and found
appellant was entitled to $346.75. Pursuant to section
39-3-206, MCA, the examiner assessed a penalty on this
p o r t i o n o f t h e wages d u e which r e s u l t e d i n a n e t amount d u e
appellant of $693.50. [Due t o an arithmetical error the
hearings examiner found $492.50 due appellant; however, using the same formula, the error was corrected at the
h e a r i n g on t h e p e t i t i o n f o r j u d i c i a l r e v i e w . ] The e x a m i n e r
a l s o denied a p p e l l a n t ' s prayer f o r attorney fees.
On appeal the District Court affirmed the examiner's
o r d e r and d e n i e d a p p e l l a n t ' s p e t i t i o n f o r r e v i e w .
There are two issues presented to this Court for
review:
1. Did the District Court err in affirming the
decision of the hearings examiner to assess a statutory
p e n a l t y t o t h e b a l a n c e due a t t h e t i m e o f t h e h e a r i n g r a t h e r
t h a n t h e amount d u e a t t h e i n i t i a t i o n o f t h e p r o c e e d i n g s ?
2. Did the District Court err in affirming the
d e c i s i o n of t h e h e a r i n g s e x a m i n e r r e f u s i n g t o award a t t o r n e y
f e e s t o appellant a t the administrative hearing level?
A p p e l l a n t c o n t e n d s t h a t s e c t i o n 39-3-206, MCA, imposes
a m a n d a t o r y p e n a l t y on a n e m p l o y e r who f a i l s t o p a y wages t o
an employee when the wages become due. By imposing a
penalty on $346.75, which was due at the time of the
hearing, rather than on $1,128.50, which was d u e at the
i n i t i a t i o n o f t h e p r o c e e d i n g s , t h e h e a r i n g s e x a m i n e r and t h e
District Court made a clear error of law in direct
c o n t r a v e n t i o n of t h e s t a t u t e .
A p p e l l a n t f u r t h e r c o n t e n d s t h a t s e c t i o n 39-3-214, MCA,
p r o v i d e s a m a n d a t o r y award o f a t t o r n e y f e e s and c o s t s f o r
e m p l o y e e s who s u c c e s s f u l l y p r o v e a c l a i m f o r u n p a i d wages.
The hearings examiner and the District Court erred in
f a i l i n g t o award a t t o r n e y f e e s and c o s t s a t e i t h e r s t a g e o f
the proceedings.
Respondents' position is t h a t t h i s case involves the
c o n s t r u c t i o n of two s t a t u t o r y p r o v i s i o n s - - s e c t i o n 39-3-206, MCA (the penalty statute), and section 39-3-211, MCA (the statute giving the commissioner discretion to settle or adjust claims upon assignment). In an attempt to promote settlements and avoid lengthy litigation, the commissioner, pursuant to his section 39-3-211, MCA, authority, compromised the penalty because the employer partially paid the wages due appellant prior to the administrative hearing. Respondents contend there exists a rebuttable presumption in favor of the action of an administrative agency. In the absence of a showing of manifest error by the party challenging the agency action, the agency order is deemed valid and enforceable. Appellant failed to meet his burden of proof; therefore, the District Court's order affirming the agency's decision should be affirmed. Concerning the second issue, respondents contend that, pursuant to section 39-3-214, MCA, an award of attorney fees is provided for only when it is necessary to institute "a suit at law" for the recovery of wages. An administrative hearing is not a suit at law. Therefore, neither the commissioner of the Department of Labor and Industry nor the District Court has the authority to award attorney fees for representation in an administrative hearing. The District Court has statutory authority to award attorney fees on a wage claim only for the legal work performed at the District Court level. When reviewing an administrative order, there exists a rebuttable presumption in favor of the decision of the agency, and the burden of proof is on the party attacking it to show that it is erroneous. Partoll v. Anaconda Copper Min. Co. (1949), 122 Mont. 305, 311, 203 P.2d 974; Kerns v. Anaconda Copper Min. Co. ( 1 9 3 0 ) , 87 Mont. 546, 289 P. 563.
T h i s C o u r t may n o t s u b s t i t u t e i t s j u d g m e n t f o r t h a t of the
t r i a l c o u r t or agency a s t o t h e weight of t h e e v i d e n c e on
questions of fact. Section 2-4-704 ( 2 ) , MCA; Robins v.
Anaconda Aluminum Co. ( 1 9 7 8 ) , 1 7 5 Mont. 514, 575 P.2d 67.
W may r e v e r s e o r m o d i f y t h e d e c i s i o n i f s u b s t a n t i a l r i g h t s e
of the appellant have been prejudiced because the
administrative findings, inferences, conclusions, or
decisions are clearly erroneous in view of the reliable,
probative and substantial evidence of the whole record.
Section 2-4-704(2)(e), MCA. I n Brurud v. J u d g e Moving and
S t o r a g e Company, Inc. ( 1 9 7 7 ) , 1 7 2 Mont. 249, 563 P.2d 558,
we d e t e r m i n e d that a finding is " c l e a r l y e r r o n e o u s " when,
although t h e r e is evidence t o support it, a review of t h e
entire record leaves t h e c o u r t w i t h t h e d e f i n i t e and firm
conviction that a mistake has been committed. See also
United S t a t e s v. U n i t e d S t a t e s Gypsum Co. ( 1 9 4 8 ) , 333 U.S.
364, 395, 68 S.Ct. 5 2 5 , 5 4 2 , 92 L.Ed. 746, 766.
We f i n d no s u c h p r e j u d i c e h e r e , and t h e decisions of
t h e a d m i n i s t r a t i v e a g e n c y and D i s t r i c t C o u r t a r e a f f i r m e d .
The r o l e of j u d g e s i n c o n s t r u i n g s t a t u t e s i s s t a t e d i n
s e c t i o n 1-2-101, MCA. This Court i n t e r p r e t e d t h a t r o l e i n
amm mil! v . Young ( 1 9 7 5 ) , 1 6 8 Mont. 81, 540 P.2d 971, which
h e l d t h a t t h e c o u r t may n o t o m i t w h a t h a s been i n s e r t e d i n
l e g i s l a t i o n nor i n j e c t what h a s been o m i t t e d . The d u t y o f
the court is simply to construe the law a s it finds it.
Dunphy v. Anaconda Co. ( 1 9 6 8 ) , 1 5 1 Mont. 76, 438 P.2d 660.
With t h i s mandate i n mind, we must now construe the two
s t a t u t e s which a r e t h e s u b j e c t o f t h i s l i t i g a t i o n .
S e c t i o n 39-3-206, MCA, provides: "Any e m p l o y e r , a s s u c h e m p l o y e r is d e f i n e d i n t h i s p a r t , who f a i l s t o pay any o f h i s e m p l o y e e s a s p r o v i d e d i n t h i s p a r t o r v i o l a t e s any o t h e r p r o v i s i o n o f t h i s p a r t s h a l l be g u i l t y o f a misdemeanor. A p e n a l t y s h a l l a l s o be a s s e s s e d a g a i n s t and p a i d by s u c h e m p l o y e r and become d u e s u c h employee a s f o l l o w s : a sum e q u i v a l e n t t o t h e f i x e d amount o f 5% o f t h e wages d u e and u n p a i d s h a l l be a s s e s s e d f o r e a c h d a y , e x c e p t S u n d a y s and l e g a l h o l i d a y s , upon w h i c h s u c h f a i l u r e c o n t i n u e s a f t e r t h e d a y upon which s u c h wages w e r e d u e , e x c e p t t h a t s u c h f a i l u r e s h a l l n o t be deemed t o c o n t i n u e more t h a n 20 d a y s a f t e r t h e d a t e s u c h wages w e r e d u e . " S e c t i o n 39-3-211, MCA, provides:
"Whenever t h e c o m m i s s i o n e r d e t e r m i n e s t h a t o n e o r more e m p l o y e e s h a v e c l a i m s f o r u n p a i d w a g e s , h e s h a l l , upon t h e w r i t t e n r e q u e s t o f t h e e m p l o y e e , t a k e an a s s i g n m e n t o f t h e c l a i m i n t r u s t f o r s u c h e m p l o y e e a n d may m a i n t a i n any proceeding appropriate t o enforce the claim, including l i q u i d a t e d damages p u r s u a n t t o t h i s p a r t . With t h e w r i t t e n c o n s e n t o f t h e a s s i q n o r , t h e commis- - n e r - -s- -t -e o r a a u s t a l l y c l a i m a s s i g n e d sio may e t l - pursuant t o t h i s section." (Emphasis added.) The wage c l a i m s u b m i t t e d and s i g n e d b y a p p e l l a n t
provided : "I hereby authorize the Labor Commissioner to approve a proposed compromise a d j u s t m e n t o r settlement of the claim. In pursuance thereof, I authorize the Labor
Commissioner t o t r a n s f e r , s e l l o r a s s i g n t h i s c l a i m o r any judgment t h e r e o n . " Pursuant t o the authority vested i n the
c o m m i s s i o n e r by s e c t i o n 39-3-211, MCA, h e compromised the p e n a l t y on t h e $500.00 and $281.75 p a i d on S e p t e m b e r 5 and October 13, 1978, r e s p e c t i v e l y .
In the last two fiscal years, the Labor Standards D i v i s i o n p r o c e s s e d an a v e r a g e o f o v e r 900 wage c l a i m s p e r year. Therefore, i n an a t t e m p t t o p r o m o t e s e t t l e m e n t s and avoid lengthy l i t i g a t i o n , t h e c o m m i s s i o n e r compromised t h e p e n a l t y on wages which w e r e p a i d p r i o r t o h e a r i n g . Such a decision is within the commissioner's discretion and f a c i l i t a t e s t h e p u r p o s e o f t h e Wage Payment A c t which i s t o c o l l e c t u n p a i d wages o f employees. However, i n each c a s e ,
the ultimate liability should first be determined and,
t h e r e a f t e r , a compromise may be worked o u t from t h a t amount.
S e c t i o n s 39-1-102 and 39-3-209, MCA.
Appellant was entitled to $1,128.50; he was paid
$781.75. Therefore, $346.75 r e m a i n s d u e f o r u n p a i d wages.
R e s p o n d e n t s owe a p p e l l a n t a n a d d i t i o n a l $346.75 in penalty
p u r s u a n t t o s e c t i o n 39-3-206, MCA, b r i n g i n g t h e n e t amount
d u e a p p e l l a n t $795.50. Appellant has received a p o r t i o n of
wages d u e and is e n t i t l e d t o u n p a i d wages p l u s a p e n a l t y
imposed thereon. No s u b s t a n t i a l r i g h t s of a p p e l l a n t have
b e e n p r e j u d i c e d and t h e a d m i n i s t r a t i v e o r d e r i s a f f i r m e d .
A p p e l l a n t a s k e d f o r a n award o f a t t o r n e y f e e s . I t is a
well-settled principle t h a t attorney f e e s a r e allowable only
when p r o v i d e d f o r by c o n t r a c t o r s t a t u t e . S e c t i o n 39-3-214,
MCA, provides:
" C o u r t c o s t s and a t t o r n e y s ' f e e s . ( 1 ) Whenever i t s h a l l become n e c e s s a r y f o r t h e employee t o e n t e r o r m a i n t a i n a s u i t a t law f o r t h e r e c o v e r y o r c o l l e c t i o n o f wages d u e a s p r o v i d e d f o r by t h i s p a r t , a r e s u l t i n g judgment m u s t i n c l u d e a r e a s o n a b l e a t t o r n e y ' s f e e i n f a v o r of t h e s u c c e s s f u l p a r t y , t o be t a x e d a s p a r t o f t h e costs in the case. ( 2 ) Any j u d q m e n t f o r t h e p l a i n t i f f i n a proceeding pursuant t o t h i s a c t must i n c l u d e a l l c o s t s r e a s o n a b l y i n c u r r e d i n connection with the proceeding, including attorneys' fees." (Emphasis added.)
S e c t i o n 39-3-212, MCA, provides:
"A d e t e r m i n a t i o n by t h e Commissioner of Labor and I n d u s t r y made a f t e r a h e a r i n g may be e n f o r c e d by a p p l i c a t i o n by t h e Commissioner t o a d i s t r i c t c o u r t f o r an o r d e r o r judgment e n f o r c i n g t h e d e t e r m i n a t i o n i f t h e time provided t o i n i t i a t e j u d i c i a l r e v i e w by t h e e m p l o y e r p a s s e d . "
The p a r t i c u l a r l a n g u a g e of t h e s t a t u t e i n d i c a t e s t h a t
an administrative hearing is not a "suit at law." A
" d e t e r m i n a t i o n " made by t h e c o m m i s s i o n e r a s a r e s u l t o f t h e h e a r i n g is n o t a "judgment." I n Massa v . D e p t . of S o c i a l &
R e h a b i l i t a t i o n S e r v i c e s ( 1 9 7 7 ) , 1 7 2 Mont. 60, 560 P.2d 895,
t h e a p p e l l a t e p r o c e d u r e s used c l o s e l y p a r a l l e l t h o s e used i n
the case a t bar. I n t h a t c a s e t h i s C o u r t awarded a t t o r n e y
f e e s o n l y f o r s e r v i c e s r e n d e r e d on a p p e a l . I n t h e absence
of statutory a u t h o r i t y we m u s t affirm the holding of the
District Court and the Department of Labor and Industry
denying a p p e l l a n t a t t o r n e 3
Affirmed.
W concur: e
Chief J u s t i c e