Petaja v. Montana Public Employees’ Association (MPEA)

Petaja v. Montana Public Employees’ Association (MPEA), 2016 MT 143 (June 8, 2016) (Rice, J.; McGrath, C.J., concurring) (5-0, aff’d)

Issue: (1) Whether substantial evidence supported the jury verdict finding MPEA breached its duty of fair representation; (2) whether the jury verdict was contrary to the instructions and the law; (3) whether Petaja’s claim was barred by res judicata; and (4) whether the district court had authority to award attorney fees. 

Short Answer: (1) Yes; (2) no; (3) this claim was waived for purposes of appellate review; and (4) no.


Facts: Petaja was terminated from her position with Lewis and Clark County as the clinic coordinator of the WIC program. The county claimed Petaja was terminated due to reorganization; she claims she was terminated because of her age, 59. Petaja was a member of the collective bargaining unit represented by MPEA.

The CBA grievance procedure has four progressive steps. Petaja asked MPEA to file a step 1 grievance. In response the county offered to employ her as a temporary administrative receptionist for significantly less pay. Petaja accepted the position but refused to waive any rights or claims she had under the CBA. She then requested a step 2 grievance. MPEA scheduled a meeting with its representative, Raymond Berg, and Petaja’s husband, to discuss Petaja’s Step 2 grievance, but Berg refused to meet with Petaja’s husband. Petaja’s husband then hand delivered a letter to Berg, with copy to MPEA counsel, requesting that MPEA either file Petaja’s step 2 grievance or provide her with written confirmation that MPEA was not pursuing the grievance and Petaja had exhausted her remedies under the CBA. MPEA did neither. Instead, MPEA signed a settlement agreement on Petaja’s behalf purporting to resolve all disputes over wages owed to Petaja under the CBA, without reservation of any other claim. MPEA did not tell Petaja it was settling her claim with the county, nor present the settlement agreement to her for her signature.

Petaja filed a discrimination claim against the county with the Human Rights Bureau, which issued a final decision dismissing the claim. Petaja also filed an unfair labor practice complaint against MPEA with the Montana Board of Personnel Appeals, which issued a final decision dismissing her complaint. Petaja then filed suit  in district court against the county, alleging discrimination, and against MPEA, alleging breach of the duty of fair representation. The county pled an affirmative defense that Petaja’s discrimination claim was time barred. MPEA did not contend that Petaja’s fair representation claim was barred by BOPA’s final decision under the doctrine of res judicata.

Procedural Posture & Holding: At trial, the jury returned a verdict for the county on Petaja’s discrimination claim, although the verdict form did not ask the jury to indicate whether that was based on the merits or on the claim being time-barred. The jury returned a verdict against MPEA, finding it liable for $100,000 in damages. After trial, Petaja asked the district court to order MPEA to pay Petaja’s attorney’s fees of $100,975. MPEA did not respond to this request. The district court denied the motion on the ground it had no legal authority to award fees. MPEA appeals from the verdict and Petaja cross-appeals the denial of attorney fees. The Supreme Court affirms.

Reasoning: (1) MPEA’s admissions of fact provided more than a mere scintilla of evidence that MPEA’s conduct was arbitrary, discriminatory or in bad faith.

(2) Because the jury verdict form did not ask the jury to indicate whether it found for the county on the merits or on the basis of the claim being time-barred, it is entirely possible the jury found on the merits for Petaja but also found the claim was time-barred. MPEA cannot prove otherwise, and the Court will not speculate as to how the jury reached its decision. Additionally, although MPEA argues that a union is liable only for increases in the employee’s damages caused by the union’s refusal to process a meritorious grievance, the jury was not so instructed. An instruction without an objection becomes the law of the case.

(3) MPEA did not raise res judicata as an affirmative defense in the trial court, and this Court will therefore not review it on appeal.

(4) No statutory or contractual provision authorizes an award of attorney’s fees here, nor do any of the equitable exceptions apply.

Chief Justice McGrath’s Concurrence: MPEA raised claim preclusion as a defense in its answer, and again in the pretrial order. However, it never brought it to the district court for a decision. The defense was waived not by a pleading failure, but by a failure to pursue it in litigation. Moreover, there was no adjudication, quasi-judicial or otherwise, to support res judicata.