Missoula Cty. v. State

547 P.3d 1268

2024 MT 98

MISSOULA COUNTY, Plaintiff and Appellant,

v.STATE of Montana; Montana Department of Corrections; and Brian Gootkin, in his official capacity as the Director of the Montana Department of Corrections, Defendants and Appellees.

DA 22-0427

Supreme Court of Montana.

Submitted on Briefs: October 18, 2023

Decided: May 7, 2024

APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. ADV-2020-588, Honorable Mike Menahan, Presiding Judge

For Appellant: Brian J. West, Civil Deputy County Attorney, Missoula, Montana

For Appellees: Colleen E. Ambrose, Montana Department of Corrections, Helena, Montana

Justice Jim Rice delivered the Opinion of the Court.

¶1 Missoula County (the County) appeals a June 7, 2022 Order from the First Judicial District Court, Lewis and Clark County, granting summary judgment to the Montana Department of Corrections (DOC) on the County’s claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment.

¶2 We affirm and restate the issues as follows:

1. Whether the District Court correctly concluded the County's contract claims were time-barred, by § 18-1-402, MCA.

2. Whether the District Court correctly concluded the County’s tort claim for breach of the covenant of good faith was not supported by a special relationship.

3. Whether the District Court correctly concluded that the County could not recover under a theory of unjust enrichment.

FACTUAL AND PROCEDURAL BACKGROUND

¶3 The DOC houses inmates under its jurisdiction within county detention centers located throughout Montana. Upon a court’s oral pronouncement of a defendant’s sentence, the DOC assumes responsibility for the costs of confinement. The DOC must pay the costs of holding inmates in local facilities "at a rate that is agreed upon by the arresting agency and the detention center that covers the reasonable costs of confinement, excluding capital constructions costs." Section 7-32-2242(2)(a), MCA (2019).

¶4 In 2012, the DOC, in consultation with the Montana Association of Counties, the Montana Sheriffs and Peace Officers Association, the Montana Highway Patrol, and individual county commissioners, developed a Per Diem Rate Calculation Worksheet. Counties holding DOC inmates utilized the Worksheet to provide information regarding their confinement costs so that reasonable reimbursement rates could be negotiated between the counties and the DOC.

¶5 Missoula County and the DOC entered into a County Detention Center Reimbursement Agreement on January 23, 2015, which set a reimbursement rate of $88.73 per day for each inmate. The initial term of the contract ended on January 31, 2016, but was renewed for an additional two years, which would expire on January 31, 2018.

¶6 Around the same time the 2015 Agreement was being executed, the Montana Legislature undertook consideration of the reimbursement payment for DOC inmates held in county jails and detention centers. The Office of Budget Planning and Programming and the Legislative Services Division requested information from the DOC on its practices and payments. In April 2015, an amendment was made to House Bill 2 (HB 2), the general appropriations bill, which capped the reimbursement rate to be paid to local facilities.¹ The Legislature also adopted a statement of intent in HB 2 declaring its intention to pay no more than $69 per day per inmate in any county detention center for the 2017 biennium. Consequently, on June 1, 2015, the Administrator of the DOC’s Business Management Services Division notified Missoula County Sheriff T.J. McDermott by letter that the reimbursement rate for DOC inmates would be capped at $69, beginning on July 1, 2015, which DOC paid to Missoula County throughout the 2017 biennium.

¶7 While preparing its proposed 2019 biennium budget, the DOC used the S69 rate when calculating its projected county jail reimbursement costs. According to the DOC, it did not explicitly request for continuance of the cap, but merely used that rate to prepare a budget estimate. The 2017 Legislature received testimony from county sheriffs, commissioners, and associations opposing a continuance of the $69 rate cap for the 2019 biennium, but nonetheless decided to maintain the cap and focus instead on reducing the number of DOC inmates housed in county facilities to help counties reduce jail costs.

¶8 By March 2018, the DOC had paid the County for all jail holding costs incurred through January 2018, when the parties’ contract had expired. On April 23, 2020, the County filed this suit, seeking a declaratory judgment that the "reasonable costs of confinement" that must be paid by DOC under § 7-32-2242(2)(a), MCA (2019),² in accordance with the 2012 Per Diem Rate Calculation Worksheet, exceeded the $69 cap, and claiming breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. After both parties moved for summary judgment, the District Court entered an order granting summary judgment to the DOC on all the remaining counts and denying the County’s claims.

¶9 The County appeals.

STANDARD OF REVIEW

[1] ¶10 We review a district court’s grant or denial of summary judgment de novo, following the criteria set forth in M. R. Civ. P. 56. Dick Anderson Constr., Inc. v. Monroe Prop. Co., 2011 MT 138, ¶ 16, 361 Mont. 30, 255 P.3d 1257. Summary judgment is only proper when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. M. R. Civ. P. 56(c)(3).

[2] ¶11 We review a district court’s application of statutes of limitations for correctness. Grant Creek Heights, Inc. v. Missoula Cnty., 2012 MT 177, ¶ 13, 366 Mont. 44, 285 P.3d 1046 (citing Johnson v. Dist. VII, Human Res. Dev. Council, 2009 MT 86, ¶ 18, 349 Mont. 529, 204 P.3d 714).

[3, 4] ¶12 In reviewing a good faith and fair dealing claim, this Court considers whether the party moving for summary judgment has presented substantial evidence to support the requisite "special relationship" to pursue such an action. Story v. Bozeman, 242 Mont. 436, 451, 791 P.2d 767, 776 (1990). Regarding claims of unjust enrichment, we review a district court’s factual findings for clear error and conclusions of law for correctness. See Mont. Digital, LLC v. Trinity Lutheran Church, 2020 MT 250, ¶ 9, 401 Mont. 482, 473 P.3d 1009.

DISCUSSION

¶13 1. Whether the District Court correctly concluded that the County’s contract claims were time-barred by 18-1-402, MCA.

¶14 The County argues the District Court erred by concluding that its contract claims against the DOC were time-barred by the one-year statute of limitations contained in § 18-1-402, MCA. The County contends the one-year limitation in Title 18 applies only to procurement contracts governed by Title 18, not to the Title 7 Interlocal Agreement at issue here, and therefore, the eight-year contract limitation period under § 27-2-202(1), MCA should apply. The County argues that, at a minimum, there exists a dispute over which limitation period applies and therefore this Court should conclude the longer period applies. See Blanton v. Dep’t of Pub. HHS, 2011 MT 110, ¶ 33, 360 Mont. 396, 255 P.3d 1229 ("[W]hen there is substantial question as to which of several statutes should apply, the longest limitations period control.").

[5–7] ¶15 "The starting point for a question of statutory interpretation is the plain language of the statute itself." Smith v. Burlington N. & Santa Fe Ry., 2008 MT 225, ¶ 22, 344 Mont. 278, 187 P.3d 639. "Statutory construction is a ‘holistic endeavor’ and must account for the statute’s text, language, structure, and object." State v. Heath, 2004 MT 126, ¶ 24, 321 Mont. 280, 90 P.3d 426 (citation omitted). "A whole act must be read together and where possible, full effect will be given to all statutes involved." Delaney & Co. v. City of Bozeman, 2009 MT 441, ¶ 22, 354 Mont. 181, 222 P.3d 618.

¶16 Chapter 1 of Title 18, in which § 18-1-402, MCA, is contained, is entitled "Public Contracts Generally." Then, § 18-1-401, MCA entitled "Jurisdiction," provides broadly that "[t]he district courts of the state of Montana shall have exclusive original jurisdiction to hear, determine, and render judgment on any claim or dispute arising out of any express contract entered into with the state of Montana or an agency, board, or officer thereof." Section 18-1-401, MCA (emphasis added). The following section, 18-1-402(2), MCA, states, "in a case in which a settlement procedure is not provided by the contracting agency, the action must be commenced within 1 year after the cause of action has arisen."

[8] ¶17 In contradiction to the County’s argument, the plain text of these provisions, as well as their "language, structure, and object," Heath, ¶ 24, do not limit their application to procurement contracts, but rather are applicable to state contracts generally. While the County correctly notes that Title 18 also addresses contracts that are "characterized by their procurement requirements," this does not preclude application to a broader category of contracts consistent with the text quoted above. Indeed, we previously applied this section to a non-procurement contract in a case involving a school’s alleged failure to renew a coach’s contract, explaining:

The State of Montana is subject to suit in district court "on any claim or dispute arising out of any express contract" with the State or a state entity or officer. Section 18-1-401, MCA …. A plaintiff must file suit within one year after a final administrative decision or, if the contract provides no settlement procedure, within one year after the claim accrues. See § 18-1-402, MCA.

Plakorus v. Univ. of Mont., 2020 MT 312, ¶ 13, 402 Mont. 263, 477 P.3d 311.

¶18 While the subject contract is a Title 7 interlocal agreement, Title 7 provides no separate statute of limitations, and the County provides no statutory basis to establish that...