Montana Supreme Court Affirms Sexual Harassment and Retaliation Findings

Source: Montana Law Week

SEXUAL HARASSMENT: HRC correctly determined that electric co-op office manager was subjected to severe and/or pervasive sexual harassment by GM and not mere “flirting” and was retaliated against… HRC’s “front pay” of $505,957 improperly increased to $1,379,338 by Court, proper damages total is HRC’s $758,454.52… $519,837 fees properly awarded, enhancement properly rejected… Laird affirmed, reversed.

Shalaine Lawson, a CPA, began employment with NorVal Electric Cooperative in Glasgow in 12/10 and became office manager and CFO in 1/15. She received satisfactory evaluations and was given wage increases. In 5/17 GM Craig Herbert began personal interactions with her. During a work-related car ride in 5/17 he asked why she had begun wearing false eyelashes, stating that “when women go and try to improve their looks it’s because they’re looking to have an affair.” Lawson, disturbed by his insinuation, ceased wearing false eyelashes to work. In 6/17 when they were discussing an upcoming conference with NorVal’s bank Herbert asked if she had ever “fooled around” with a banker connected to the conference. Disturbed by the comment, she did not attend the conference. Later that month she mentioned taking her son to a football camp in Bozeman and having a massage while there. Later that day Herbert asked if her husband gave her massages, adding, “I just wanted you to know that given the opportunity I give a really good massage and if we’re ever given the opportunity I would like to get you relaxed.” She did not respond and left Herbert’s office feeling “degraded, dirty, and really uncomfortable.”

Soon thereafter Lawson was in Herbert’s office discussing NorVal’s annual audit and mentioned that her back hurt. He told her to turn around and cross her arms, closed the office door, and approached her from behind. He embraced her, lifted her up, and popped her back, smelling her hair in the process. She felt his actions were inappropriate. After not speaking in several days she was in his office to discuss a work matter. At the end of the conversation he requested a hug, “just for friends,” and then gave her a hug.

In 7/17 while Lawson was using the copy machine Herbert said “you are filling your pants out nicely.” She interpreted it as expressing interest in a sexual relationship and threw the pants away. During that summer he entered her office when she was alone and inquired about her sex life. In 8/17 during a time that NorVal was doing power shutoffs she entered his office and asked, “Are there things that turn you off?” He used the term “turn off” in a sexual manner several times throughout the day in her presence.

During NorVal’s 9/17 board meeting, without Lawson present, several members joked about a sexual relationship between her and Herbert. One had previously accused them of having an affair after her promotion to office manager. She learned of the accusation through Herbert and was upset by it and NorVal’s failure to investigate or allow her to respond. In 10/17 Lawson and Herbert were at a conference in Great Falls. They had arranged to have a work meeting. He asked her to meet him in his hotel room for the meeting and had a key for her. The Hearing Officer found that his purpose was to allow her to enter his room separately to avoid raising suspicions and to engage in sex. She refused and became upset. He texted her later and asked to have the meeting beside the hotel pool, which they completed without incident.

On 10/6, back in NorVal’s offices, Lawson felt that she needed to tell Herbert that she needed to report the hotel incident or find another job. Although she suspected that he would fire her, she informed him that she had documented it. She considered this her initial complaint of sexual harassment because of NorVal’s policy requiring discrimination and harassment to be reported to the supervisor or GM. The HO concluded that Lawson’s actions during the meeting constituted the oral making of a harassment complaint. On 10/9 Herbert and Lawson again met and, despite her request for a Board member to attend, none was present. Herbert informed her that “they needed to work it out or she needed to go,” to which she requested guidance as to how to report her complaint in writing. He told her to speak only with him. When she questioned the propriety, he repeated it. He verbally notified the Board of her complaint. She asked him repeatedly how she could formally submit her complaint. He did not provide instructions and the Board did not meet with her despite her repeated requests.

On 10/10/17 Lawson received a letter from NorVal’s attorney Matthew Knierim notifying her that she was being formally reprimanded by Herbert for creating a toxic environment, failing to understand the chain of command, challenging his authority, criticizing the Board over tax issues, and complaining over a co-worker’s performance, and “this is not acceptable and if it occurs again, you will be immediately terminated for cause.” (Knierim wrote the letter at Herbert’s instance but he had no knowledge of Lawson’s sexual harassment concerns and complaint.) Herbert delivered the letter to Lawson in the office and texted her to call him that evening at which time he offered her a severance package if she would leave immediately. She declined the offer, asserted that she had done nothing wrong, and stated that she just wanted the sexual harassment to end.

The next day Herbert told Lawson that he did not want to sleep with her. He showed her a picture of a woman on his computer and told her that they had spent several months traveling for work, staying in the same room, lying on the same bed, and it was not “a big deal.” Over the following weeks Lawson continued to inquire of Herbert how to properly report her sexual harassment complaint, with no response. She attempted to communicate with Knierim, who said she would have to report to Herbert.

Herbert began treating Lawson in a way she felt degrading or belittling during their work conversations. He told her to notify him whenever she intended to leave the office and removed her from her role as minutes-taker for Board meetings without any job-related justification. She began showering less and stopped wearing nice clothes to “ward him off.” She began suffering a loss of self-worth and confided in her husband about Herbert’s behavior and its effect on her. Her husband began contacting attorneys for advice about recourse for sexual harassment.

He also contacted LCPA Elizabeth Drydahl who strongly recommended Lawson’s hospitalization on account of her severe depression and “plan to harm herself” resulting from “very inappropriate attention from a coworker.” Lawson’s husband took her to the ER where she was diagnosed with “depression and suicidal ideation” and referred to psychiatric NP Jennifer Durward who issued multiple letters forbidding her return to work until conclusion of the sexual harassment investigation. Her eventual report noted that Lawson suffered from a “stress reaction” stemming from “sexual harassment on the job.” Lawson also sought a no-contact order against Herbert from the PD,citing his anger over her accusations.

Lawson contacted the HRB and scheduled an appointment for 11/2/17. She called out of work beginning 11/3/17 for the “extreme stress and anxiety caused by your continued harassment and retaliation and threats.” On 11/10/17 she received a letter from Herbert dated 11/6 notifying her that she was banned from NorVal’s property, her work email and credit card had been revoked, and there would be a meeting to determine her employment. She then received a letter from Knierim dated 11/7 stating that she would be terminated immediately if she pursued a nocontact order. (Knierim testified that he was unaware of her sexual harassment complaint when he drafted this letter.) On 11/21, in response to a request from Lawson to extend her sick leave, Herbert wrote her stating that it would soon expire, reaffirming that he was the sole means of communication with NorVal, and that “all of your previous complaints lodged with NorVal have been investigated.”

Lawson formally filed a complaint with the HRB 11/24/17. Herbert withdrew the severance offer. He disputed her request for extended medical leave because it was based on Durward’s notes, who he stated was “not a physician.” On 1/2/18 Lawson received a payout of her accrued vacation & sick leave but Herbert informed her that she would continue to be listed as an employee until NorVal’s attorneys decided otherwise or she accepted employment elsewhere. She made several attempts to communicate with Herbert and the Board to obtain the results of the asserted investigation but received no response. On 2/5/18 Herbert wrote her that NorVal had filed its Answer with HRB. According to NorVal, she had falsely alleged sexual harassment to cover up “serious deficiencies in your job performance” including a backlog in her work. He told other employees that she was being investigated for possible fraud. No evidence to support such a claim was produced and neither of the 2 accountants hired to fill in for Lawson were asked to investigate such a claim.

On 2/27/18 Lawson amended her complaint to include retaliation. In 4/18 NorVal’s counsel asked her to provide a statement from a “qualified physician” verifying that she was unable to perform her duties. She conferred with Dr. Chris Laviola, PhD, who recommended that she remain off work due to her depression and suicidal ideations. Lawson provided this information to NorVal but received no response. Durward also treated Lawson through 2019, during which she observed a significant reduction in her well-being and connection to the Glasgow community. At the time of Lawson’s suspension her salary was $84,567/yr with 1,184.91/mo benefits. The HRB issued an initial report in 5/18 concluding that no harassment or retaliation had occurred. Lawson filed an objection with the HRC which concluded that the HRB’s initial report was erroneously based on incomplete information or misapprehension of the law and remanded for a hearing. After extensive discovery a contested case hearing was held and Hearing Officer Caroline Holien concluded that she had been subjected to sexual harassment and retaliation and awarded $192,384.89 back pay, $13,635.51 interest on lost wages, $50,000 for emotional distress, and attorney fees. Finding reinstatement not feasible, she found that Lawson was entitled to front pay. Citing Duke (4th Cir. 1991) for the principle that “because of the potential for windfall, [front pay’s] use must be tempered,” she noted that OHA has historically followed the WDEA which allows for lost wages for a maximum of 4 years, and thus awarded $415,786.06 (present value $378,215.59 if paid in a lump sum), reasoning that Lawson worked for NorVal for 7 years prior to going on medical leave and 4 years of front pay would not be unreasonable or an unjust windfall. Both parties appealed to the HRC. NorVal challenged Holien’s finding of discrimination and Lawson argued that she erred by citing the WDEA. The HRC affirmed the finding of discrimination and concluded that use of the WDEA as guidance for calculation of Lawson’s front pay award and the amount of the award were not clearly erroneous. Its final decision slightly altered Holien’s calculations resulting in a small increase in the award: $189,094.30 back pay, $13,402.30 interest on lost wages, $50,000 for emotional distress, and $505,957.92 for a total of $758,454.52 plus attorney fees.

Both parties petitioned for judicial review. Judge Laird upheld the finding of discrimination but concluded that use of the 4-year cap for front pay was arbitrary & capricious and, utilizing Lawson’s expert Ann Adair’s “conservative calculation,” increased Lawson’s front-pay award to $1,379,338, for a total award of $1,631,834.60 plus attorney fees. She conducted a “lodestar” analysis and awarded $519,837 fees and $48,258.88 costs. She declined to apply a multiplier, reasoning that she had already considered Todd Shea’s contingency risk and that the circumstances of his representation did not necessitate a multiplier. NorVal appeals. Lawson cross-appeals Laird’s fee calculation. NorVal argues that the incidents between Herbert and Lawson and its responses do not rise to “severe and/or pervasive” harassment necessary to constitute sexual discrimination as defined in the HRA. It contends that the context of Herbert’s actions was not adequately considered and therefore Laird erred by affirming Holien’s determination that Lawson was subjected to sexual discrimination. However, Holien’s findings are supported by substantial evidence that Herbert subjected Lawson to unwelcome verbal and/or physical conduct of a sexual nature in her work environment. And in consideration of the totality of the circumstances we have little difficulty affirming Holien’s conclusion that a reasonable person would find NorVal’s workplace hostile & abusive. Herbert’s behavior does not constitute “mere intersexual flirtation” as NorVal describes it. NorVal contests Holien’s determination that Lawson was retaliated against by arguing that none of the “constellation” of occurrences fell within the actions listed in ARM 24.9.603(2) and in any event were not materially adverse. However, while not all of the actions constituted material adverse actions, collectively there can be no doubt. There was likewise substantial evidence that NorVal took the actions in retaliation for engaging in protected activities and not for a non-discriminatory purpose such as those offered by NorVal that were merely pretextual. Laird did not err in affirming Holien’s decision that Lawson was subject to retaliation.

Laird erred in increasing Lawson’s front-pay award. Damages are a factual determination for which a court may not substitute its judgment for the agency’s, and may reverse on only narrow grounds including that the agency’s decision is arbitrary & capricious, which Laird determined. §2-4-704(2)(a); MSU-N (Mont. 2021). It is clear that neither Holien nor the HRC applied the WDEA as binding authority. The HRC explained that Holien used it only for guidance. More significantly, Laird’s reasoning that the agency’s reference to the WDEA for a 4-year award was not supported by the findings overlooks that the HRC alternatively determined that Holien’s 4-year award was not clearly erroneous, but rather a correct determination of front pay. Holien premised the 4-year award on Lawson’s 7 years of employment, her likely future difficulties finding similar work, and that this amount would not be unduly speculative, unsupported by the record, or an unjust windfall. The WDEA was no more than a reference point for an award that was otherwise justified by the record. Whether the record may also support a higher award, as Lawson advocates, is not the standard. Board of Oil & Gas Conservation (Mont. 2012) (“A review under the arbitrary and capricious standard ‘does not permit a reversal merely because the record contains inconsistent evidence or evidence which might support a different result. Rather, the decision being challenged must appear to be random, unreasonable or seemingly unmotivated based on the existing record.'”) Under these circumstances, we are hard pressed to conclude that the award was arbitrary & capricious. We conclude that Laird erred in reversing HRC’s front-pay award and therefore reinstate HRC’s determination of front pay.

The record indicates that Shea has practiced law for more than 30 years and attained a good reputation. He initially agreed to charge Lawson $250/hr for his services and $110/hr for paralegal services, but switched to a contingency when it became clear that she would not be able to maintain his fees during the litigation. From 2017 to 2022 he participated in the investigative process before the HRB, appeals to the HRC leading to a contested case hearing, a favorable decision from Holien, and favorable proceedings before the HRC and Court and has handled the appellate proceedings before this Court.

In the District Court he sought compensation at $325/hr and offered expert testimony that this was reasonable given his skills and experience. Laird took guidance from the Kerr (9th Cir. 1975) “lodestar/multiplier test.” She calculated the hours reasonably expended, considered Shea’s skill and performance, the quality of his performance, and the result he obtained, and assessed the difficulty of the case, and concluded that $325/hr and his hours were reasonable and awarded $519,837 fees. She reasoned that the award should not be further enhanced by a “multiplier” because she had considered within her initial lodestar analysis factors that may support a multiplier such as quality of the result, extent of delay, and the economic undesirability of representing the particular class of claims. She reasoned that the increase to $325 reflected “the contingency risk that Shea undertook to represent his client as well as the resulting four-year delay in payment for his services” and “the excellent results obtained and delays in payment.”

Lawson argues that it was inconsistent for Laird to find that Shea charged a reasonable rate of $325 while also finding that $325 reflected the risks & burdens of the litigation, because the $325 is specifically reasonable only for “non-contingency cases.” NorVal notes that the US Supreme Court and this Court have held that a lodestar calculation cannot be enhanced merely based on the risk of contingency representation. Ihler (Mont. 2000) (citing Dague (US 1992)) (“Dague prohibits an enhancement based on contingent risks”).

A “lodestar” amount is calculated by “multiplying the number of hours reasonably spent on the case by an appropriate hourly rate in the community for such work.” Gendron (Mont. 2020) (quoting Tacke (Mont. 2010)). These reasonableness determinations are based on an initial list of factors:

(1) the amount and character of the services rendered;
(2) the labor, time and trouble involved;
(3) the character and importance of the litigation in which the services were rendered;
(4) the amount of money or the value of the property to be affected;
(5) the professional skill and experience called for;
(6) the attorneys’ character and standing in their profession; and
(7) the results secured by the services of the attorneys.

“These factors are nonexclusive, and a district court may rely on other considerations in determining reasonableness.” Id. There is a “strong presumption that the lodestar figure represents a reasonable fee.” Ihler. While a case may justify a multiplier or enhancement, the claimant “has the burden of proving that the requested enhancement is ‘necessary to the determination of a reasonable fee.'” Ihler (citing Dague). To avoid double consideration a multiplier must be determined based on further factors not already considered in the lodestar calculation such as the extent of delay and economic undesirability of representing the class of claims. Audit Services (Mont. 1992); Ihler.

Lawson contends that Laird’s analysis based on the Kerr framework shortchanged consideration of factors such as novelty and difficulty of the questions, her attorney’s preclusion from other employment, time limitations imposed by the circumstances, and awards in other cases. However, while the Kerr factors are not stated identically with the factors of the Montana test, there is considerable overlap and most of the Kerr factors were at least touched upon in Laird’s lodestar analysis. (Notably, her assessment of hours indicated that the case “should have been a simple routine sexual harassment case” were it not for the complications attributed to NorVal’s conduct throughout and the HRB’s initial dismissal.) She stated that she considered additional factors in coming to her lodestar determination, which was her prerogative. Gendron (“A district court may rely on other considerations in determining reasonableness.”). Further, she had wide discretion in determining a reasonable fee award. Id. Thus while the Kerr framework is somewhat different than Montana’s stated framework, and Laird may not have considered all Kerr factors, she had considerable latitude and the award is presumed to be reasonable. We are persuaded that she properly concluded that the award was reasonable and that Lawson has not demonstrated that a multiplier or enhancement was necessary to achieve reasonableness.

NorVal Electric Co-op ordered to pay over $2 million for GM’s sexual misconduct

Story by: AJ Etherington, Billings Gazette.

A Hi-Line electric cooperative has been ordered by a Valley County district judge to pay more than $2 million to the victim of a years-old sexual harassment complaint against the company’s general manager.

NorVal Electric Co-op in Glasgow has been ordered to pay its former office manager and financial officer, Shalaine Lawson, $1,631,834 after Judge Yvonne Laird upheld a ruling by the state’s human rights commission finding NorVal’s general manager, Craig Herbert of Glasgow, sexually harassed Lawson while she was his direct subordinate and then retaliated after she she made a complaint.

The final judgement means NorVal will have to pay the damages plus interest, costs to Lawson of $48,258 and attorney’s fees of $519,837 plus costs or fees incurred trying to collect on the final judgment. After interest is factored in, the total cost to NorVal will likely top $2.4 million.

Herbert remains NorVal’s general manager.

Lawson brought her complaint to the HRC after she confronted her boss and the cooperative’s board about a long-running string of sexually inappropriate comments and touching by Herbert that started in early 2017. Instead of addressing the matter, NorVal’s board deferred to Herbert who retaliated against her, according to the findings of fact from the commission.

In February, Judge Laird affirmed the HRC’s decision. Laird also increased the award Lawson was owed from the company by recalculating front pay damages— meaning wages Lawson would have earned had she been allowed to remain with the company.

Beginning in 2017, Herbert began making inappropriate comments and suggesting he wanted to have an affair with her. On occasions he would touch her by “popping her back” or hugging her, and he often made comments about her sex life. In late 2017, while attending a work-related conference, Herbert invited Lawson to his hotel room for a meeting. Lawson refused and days later confronted Herbert about his conduct.

NorVal’s policy for making a complaint about sexual harassment required the employee to report any complaint to their immediate supervisor or the general manager if the supervisor is the offender. Lawson was left with no recourse. Still, she continued trying to resolve the matter and “move on” by involving the board of directors. After everything failed, she made a complaint to the Montana Human Rights Bureau, which investigated.

The case has gone on for years with the HRB complaint being filed on Nov. 24, 2017, and the final judgement from Laird coming just this past Tuesday — a span of four years.

In addition to the compensation owed Lawson, Laird also ordered NorVal: to amend its harassment policies and procedures so the company can identify, investigate and resolve discrimination complaints; train employees on preventing and remedying discrimination; and obtain approval from the Montana HRB for all of its harassment policies, procedures and training.

Laird, the judge, also sanctioned NorVal’s attorney, Maxon Davis with Davis, Hatley, Haffeman & Tighe, P.C. in Great Falls, for what she called “dilatory tactics” used throughout the case. Dilatory tactics are when lawyers use the procedures of the court system in an abusive way to delay the progress of the court’s proceedings.

The sanctions applied only to post-judgement actions regarding fees and costs owed to Lawson for added attorney fees due to Davis’ omitting information needed by the court to make a decision.

The case of Lawson vs. NorVal has also caught the attention of the federal government. In October 2019, the federal Equal Employment Opportunity Commission filed a lawsuit with U.S. Judge Brian Morris in Great Falls. The suit alleges the same facts as the Montana case, but comes with the teeth of the federal government to issue disciplinary fines against the company and to further compensate Lawson. The federal lawsuit came after efforts by the EEOC to engage NorVal in “informal methods of conciliation” to resolve the case outside of court failed. NorVal rejected any conciliation agreement with the EEOC and the commission described any further efforts as “futile or non-productive.” A hearing for summary judgement is set for Jan. 12, 2022.

Both parties’ attorneys, Davis and Shea, declined to comment on the case. NorVal has 30 days to file an appeal to the Montana Supreme Court, otherwise they have 90 days to pay on the judgment.

Employee Rights Case Against Firm Heads to Hearing

By Eddie Gregg at The Billings Gazette March 18, 2014

An investigation by the Montana Human Rights Bureau has determined that a Helena employee of CTA Architects has “reasonable cause” to believe the company discriminated against her because of health conditions.

The investigator in the case found the “preponderance of the evidence” supports Michelle Campbell’s claim that CTA “cut her hours and eliminated her medical insurance benefit in March 2013 because she disclosed she was pregnant and recently diagnosed with MS.”

Scott Wilson, president of CTA, said Monday he couldn’t discuss any employee issues, adding: “We do deny any discrimination or any wrongdoing” in the case.

Campbell started working as a full-time administrative assistant in CTA’s Helena office in 2009. The Billings-based company has 18 offices across the U.S. and in Canada.

According to the Human Rights Bureau report, Campbell’s employer reduced her position from 40 hours a week to 16 hours a week shortly after she informed her superiors of her pregnancy and diagnosis.

The report states that CTA officials told an investigator that Campbell’s job was reduced to part time as part of a companywide office restructuring triggered by budgeting problems and a projected shortage of work.

The eight-page report was signed on Jan. 14, which gave the parties involved 30 days to reach a settlement. No settlement was reached, so the case will go before a hearing examiner appointed by the Hearings Bureau of the state Department of Labor and Industry.

Wilson said the hearing hasn’t been scheduled, but he is confident CTA will prevail.
Campbell’s attorney, Todd Shea, of Bozeman, said that his client hasn’t been terminated from her job, but that she no longer works in the Helena office.

Since her diagnosis, Campbell has racked up more than $25,000 in outstanding medical bills, according to Shea.

Shea said Tuesday the amount of damages sought in the case hasn’t been determined.
“She cannot get her recommended treatment and medication for her MS treatment as she has no insurance and very little money after her hours were reduced,” Shea wrote in an email to The Gazette. “This has resulted in the exacerbation of her MS symptoms.”

Bozeman Nurse Settles Wrongful Discharge Lawsuit – Shea Law Firm Bozeman, MT

Chronicle Staff | Posted: Friday, February 10, 2012

A Bozeman nurse who claims she was fired after acting as a surrogate mother for a patient has settled her wrongful discharge lawsuit with Billings Clinic.

Anicee Acosta-Yearick contended that Billings Clinic wrongly fired her for ethics violations when she agreed to carry the patient’s baby in 2009, according to court documents.

Acosta-Yearick worked for Bozeman OB/GYN, owned by Billings Clinic, for 16 years before she was fired in January 2010. She was fired because “as a licensed professional nurse, she used her knowledge of private, protected health information to influence and solicit a Billings Clinic patient to enter into a surrogacy contract resulting in personal gain,” which violates the nursing and clinic codes of conduct, court documents state.
Billings Clinic filed an ethics violation complaint against Acosta-Yearick with the Montana Nursing Board, but the board decided the complaint did not justify legal or disciplinary action, according to court records.

Acosta-Yearick claimed she is friendly with the couple who asked for her help, court documents state, and she did not ask for money other than expenses.

Medical providers, who worked with Acosta-Yearick, supported her decision to be a surrogate mother for the patient. They submitted written statements that called into question the clinic’s motives for firing Acosta-Yearick.

The clinic filed to dismiss the case, saying state law protects employers from being sued for wrongful discharge when they have good cause. The clinic’s attorney claimed the accusations of insurance fraud, ethics violations and Acosta-Yearick’s decision to make money from the surrogacy were all valid reasons for firing her.

A Gallatin County judge’s order closing the wrongful discharge lawsuit didn’t include the settlement amount.

In a separate complaint, the insurance commissioner ordered health insurer New West Health Services to pay Acosta-Yearick’s medical bills for maternity care. New West had originally withdrawn its coverage after learning of the surrogate pregnancy.

A federal lawsuit against New West also has been settled and closed.

Insurer must pay bills for surrogate mother’s pregnancy – Nurse’s lawsuit against Billings Clinic Persists

JODI HAUSEN, Chronicle Staff Writer, November 10, 2011

A health insurer that withdrew medical coverage for a Bozeman nurse’s pregnancy after learning it was a surrogacy was ordered by the state to pay her medical bills.

Jameson C. Walker, attorney for the Montana Commissioner of Securities and Insurance, notified New West Health Services that the insurer has to reimburse Anicee Acosta-Yearick for costs associated with her 2009 surrogate pregnancy.

“New West attempt to exclude coverage for surrogacy” but the exclusion outlined in the plan “only applies to costs associated with treatment of infertility – not an ensuing pregnancy by the insured surrogate,” Walker wrote in bold in the Nov. 1 letter.

“The policy also provides for coverage for all pregnancy and does not specifically exclude surrogacy pregnancy,” he continued.  “Even if the exclusion applied to the insured’s surrogacy pregnancy, this would be a violation” of Montana law that makes it unlawful to discriminate “solely on the basis of sex or marital status in the issuance or operation of any type of insurance policy.”

Citing a previous Montana Supreme Court case, Walker continued: “Since pregnancy was a condition unique to women, and the exclusion subjected women to fewer benefits than men, (the policy in question) unlawfully discriminated on the bases of gender.”
New West was given until Dec. 1 to provide the commissioner’s office with proof Acosta-Yearick’s covered pregnancy costs have been paid.

In a lawsuit filed against New West, Acosta-Yearick and her husband, Christopher Yearick, sued to recover more than $11,500 in medical claims.
Although it appears her medical bills will be paid, Acosta-Yearick is still awaiting resolution on a related wrongful discharge lawsuit she filed in Gallatin County District Court against Billings Clinic.

According to the lawsuit, Acosta-Yearick contends Billings Clinic wrongly fired her on grounds she violated the organization’s code of ethics when she agreed to carry an infertile patient’s baby.

Acosta-Yearick worked for Bozeman OB/GYN, owned by Billings Clinic, for 16 years before she was fired in January.  She was terminated because “as a licensed professional nurse, she used her knowledge of private, protected health information to influence and solicit a Billings Clinic patient to enter into a surrogacy contract resulting in personal gain,” which violates the clinic’s code of conduct and a nursing code of ethics, court documents state.

Billings Clinic filed an ethics violation complaint against Acosta-Yearick with the Montana Nursing Board, but the board determined the complaint did not justify legal or disciplinary action, court documents state.

Acosta-Yearick claims she is friendly with the couple who asked for her help.  She did not ask for financial compensation other than expenses.  She carried the woman’s baby as a gift.

Medical providers, who worked with Acosta-Yearick, supported her decision to be a surrogate mother for the patient.  They submitted written statement that called into question the clinic’s motives for firing her.

In her statement Dr. Stacey H. Shomento said that the complaint filed with the nursing board was “a personal vendetta” against Acosta-Yearick.  “I feel very strongly that Anicee has been wrongly accused,” she wrote.

Todd Shea, Acosta-Yearick’s attorney, also alleges in the suit that Billings Clinic violated the nurse’s privacy when they reviewed her medical records without her permission.
The clinic filed to dismiss the case, saying state law protects employers from being sued for wrongful discharge when they have good cause to do so.

The clinic’s attorney, Ed Butler, of Colorado Springs, Colo., calls the case “wholly frivolous” and claims the accusations of insurance fraud, nursing ethics violations and “specifically the propriety of Mrs. Yearick’s decision to become a surrogate mother for a patient…and her financial gain from that decision” are all valid reasons for having fired her.

Bozeman Nurse and Surrogate Mother Suing Billings Clinic, Health Insurer

JODI HAUSEN, Chronicle Staff Writer I Posted: Tuesday, October 11,2011

A Bozeman nurse is suing Billings Clinic and its health insurer, claiming she was wrongfully fired and denied health insurance coverage because she was pregnant as a surrogate mother for her patient.  Anicee Acosta-Yearick filed one lawsuit each against the Billings Clinic and the insurer, New West Health Services.

According to the lawsuits:
Acosta-Yearick was fired on grounds she violated Billings Clinic’s code of conduct and a nursing code of ethics when she agreed to carry an infertile patient’s baby. She is also suing to recover more than $11,500 in medical claims for the pregnancy New West initially paid but later revoked.

In November 2009, Acosta-Yearick became pregnant for a patient at Bozeman OB/GYN where she worked. The baby was born at Bozeman Deaconess Hospital in July 2010. When she was fired in January, Billings Clinic “informed Mrs. Yearick that she was under investigation for insurance fraud” and “interrogated” her about her pregnancy. The clinic filed a complaint against her with the Montana Nursing Board for ethics violations. The clinic fired her because she “used her knowledge of private, protected health information to influence and solicit a Billings Clinic Bozeman OBGYN patient to enter into a surrogacy contract resulting in personal gain.”

But Acosta-Yearick claims she is friendly with the couple who asked for her help. She did not ask for financial compensation other than expenses. She carried the woman’s baby as a gift. “If anyone pushed anyone into signing a legal surrogacy contract, it was I,” the baby’s mother wrote in a statement in the lawsuit. “Yes, Anicee, as my close friend, offered to be my gestational surrogate, but it was I who made the first contact to Anicee.”

Acosta-Yearick claims medical providers at Bozeman OBGYN supported her decision and never questioned her motives when she received pregnancy care.
Dr. Tyler Bradford wrote, “I feel it is wrong for her to be reported to the board of nursing and it would be even more unjust if her license is suspended or revoked as doing so would punish an individual for exhibiting the characteristics that we should all strive for in medicine: selflessness.”

Todd Shea, Acosta-Yearick’s attorney, said another nurse at a Billings Clinic donated her kidney to a patient. He wrote in the brief that she “was praised for her selfless and courageous act.”

Acosta-Yearick claims her termination violated her health care privacy rights, defamed her through slanderous and libelous contentions, was intended to interfere with her economic interests and intentionally inflicted emotional distress.

The lawsuit against New West claims the insurer initially paid Acosta-Yearick’s medical bills but later reneged after a Billings Clinic employee asked the insurer about the legitimacy of the payments. The insurer had no exclusions for “surrogate services” and only added that amendment to the plan after Acosta-Yearick had asked about her benefits and became pregnant with the understanding her medical bills would be covered.

Montana’s state auditor reviewed Acosta-Yearick’s appeal to New West after her benefits were revoked and ruled in her favor, saying “the underlying condition that New West is denying coverage for is pregnancy and child birth. This is a condition exclusive to women.”

Case Dismissed in Disability Discrimination Claim

Source: Montana Law Week

The Shea Law Office represented a property management company against a disability discrimination suit. Below is write up from Montana Law Week.

Geoffrey Angel practices disability and discrimination law. The Baxter Hotel in Bozeman has 7 floors. The 1st floor, mezzanine level, and 2nd floor (really the 3rd floor) are comprised of commercial units which house businesses that are open to the public. The top 4 floors each contain 5 residential units. Angel has owned a residential unit in the Baxter since before 2005 and is a member of the Baxter Homeowners’ Association.

In 11/05 he entered into a lease with Claude Matney for office space on the 2nd floor. During the time he maintained his office there he had no employees. The Baxter was built in 1929. There is a single elevator and stairway from the ground floor to the commercial and residential floors. The stairway is narrow and has turns. The only way persons in wheelchairs or utilizing a walker can access the upper floors is via the elevator. Between 2/08 and 1/09 the stairway from the lobby to the 2nd floor remained unlocked. In 1997 the Association amended the declarations to require that the lobby entrance be locked during Thanksgiving, Christmas, and non-business hours and the elevator locked at all times. It remained unlocked during business hours until 2/1/08. At the time Angel moved his office into the Baxter and for sometime before that the elevator was closed to general passenger use at the recommendation of City inspectors because it needed repairs. The Association instructed building manager Michelle Lindahl (High Street Properties), to inform unit owners that beginning 2/1/08 the elevator would be restricted at all times. She posted a notice around the building. Residents could access the elevator any time with their swipe key cards, and in 1/09 a time clock was installed that would keep it unlocked 8 a.m. to 5:30 p.m. and the by-laws were amended to require that it remain unlocked on the mezzanine and 2nd floors 8-5:30. In 3/08 Angel filed an HR complaint against the Association and High Street alleging discrimination by failing to provide reasonable accommodation for disabled persons by failing to keep the elevator open during business hours. He subsequently moved his office to his residence on Babcock which had been occupied by college students.

Angel, because he practices discrimination law, has standing under the MHRA to pursue this claim as an aggrieved party — anyone who can demonstrate a specific personal and legal interest as distinguished from a general interest and who has been or is likely to be specially and injuriously affected by a violation of the HRA. §49-2-101(2). Angel requested a reasonable accommodation for his clients; while the stairwell remained open, his suggested accommodation that it remain unlocked during business hours was reasonable. Had Baxter done nothing to resolve the issue, it is possible the HO might have found a violation of the reasonable accommodation statute. However, it did finally undertake a reasonable accommodation by installing the time clock and altering the by-laws to require that the elevator remain unlocked during business hours. The real question is whether the delay was so great that it amounted to a failure to accommodate. Terrell (11th Cir. 1998); Selenke (10th Cir. 2001).

The substantial evidence is that the Association acted in good faith. It was bound by law to work with Angel to reach an accommodation and was clearly willing to do so. However, he was essentially unwilling to engage in any dialogue about an appropriate accommodation. His response to the Association was in essence “my way or the highway.” He could have had input into board meetings as to the accommodation but failed to do so. The board spent at least 6 meetings going through the issue of the locked elevator and appropriate means of resolving the conflicting interests that the unit owners had presented (one owner’s complaint that the elevator needed to be restricted in accordance with the by-laws v. Angel’s and Matney’s concerns that it must remain open at all times during business hours). Angel’s primary argument that the board did not act in good faith is essentially that it was in the “back pocket” of David Loseff who owns several of the commercial units, whose motive in shutting down the elevator was allegedly to control ownership of the commercial space. However, the board’s decision came about as a result of a unit owner’s complaint that the by-laws were not being followed and after discussions about security. The decision to restrict access was not dictated by Loseff and was clearly not a power grab by him. Moreover, it does not appear that the decision to implement a time clock and change the by-laws was merely a belated attempt to avoid the consequences of illegal conduct, but was arrived at after careful consideration of legitimate factors such as the competing interests of the unit owners and alternatives to accommodate disabled persons. The greatest concern for the HO is the 9 months it took to arrive at the decision to install the time clock. (Installing it took 1 day after it was ordered.) However, it was not simply a matter of the board up and deciding one day to install a time clock. Over that time it only met at most 8 or 9 times. It had to deal with competing interests among the unit owners, at least one of whom complained that the elevator was not being locked in conformity with the by-laws, and then try to strike a balance between those interests. And then there was the question of the by-laws which required that the elevator remain secured at all times. To even begin implementing Angel’s suggested accommodation the board would have to change the by-laws. Further, although his suggested accommodation was reasonable, it was not necessarily the one the board had to implement. Certain members did not agree with Angel that restricting the elevator to swipe key card use violated the public accommodation statute. Under other circumstances Angel’s decision to move out of the Baxter might have convinced the HO that an undue delay had occurred. However, his decision to move was due to his inability to be in control of the situation. When he moved into the Baxter and then for almost a year the elevator was not available to his disabled clients because it was shut down for safety concerns, undercutting his argument that client access via the elevator was critical to his business, and the building he moved into also suffered from lack of disabled access and despite conducting his business from it for 10 months he has yet to obtain an estimate for constructing a wheelchair ramp. Weighing all the factors, the time between restricting the elevator and implementing the time clock solution did not constitute a delay of such length that it amounted to a failure to accommodate.

In any event, even if Baxter Homeowners violated the public accommodations statute, High Street, as its agent, has no liability to Angel. His argument that it “aided and abetted” the property owner to violate the HRA is not persuasive. The common law rule is that an agent cannot be held liable for aiding and abetting the principal when acting in its official capacity on behalf of the principal. Fiol (Cal. 1996). The California Fair Housing Act contains the identical aiding & abetting provision as in the MHRA. While the MHRA is broad, there is nothing in it indicating intent to abrogate the common law rule. However, the fact that an agent cannot conspire with the principal while acting in its official capacity on behalf of the principal does not insulate an agent from the consequences of its own tortious conduct. 3 AmJur Agency §298. The HO has found no Montana HR case that addresses this issue. However, Pelton (NY 2006) held that the property manager owed no duty to the charging party for its nonfeasance under discrimination law. Angel presented no substantial evidence that High Street’s conduct was anything more than following its duty to the Baxter Homeowners’ Association.

Judgment for Defendants; complaint dismissed.