No. 96-014
IN THE SUPREMECOURT OF THE STATE OF MONTANA
1996
HILANDS GOLF CLUB,
Petitioner and Appellant,
v.
JOAN ASHMOREa/k/a Joan Zirko,
Respondent and Respondent.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable C. B. McNeil, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Mark D. Parker; Parker Law Firm, Billings,
Montana
James H. Goetz; Goetz, Madden & Dunn,
Bozeman, Montana
For Respondent:
Virginia A. Bryan; Wright, Tolliver & Guthals,
Billings, Montana
Submitted on Briefs: May 16, 1996
Decided: July 23, 1996
Filed:
Justice W. William Leaphart delivered the Opinion of the Court.
Appellant, Hilands Golf Club (Hilands), appeals from the
Yellowstone County, Thirteenth Judicial District Court's Order
dismissing Hilands' Petition for Judicial Review with prejudice.
We reverse.
Hilands raises three issues on appeal relating to whether the
failure to serve a Rule 4, M.R.Civ.P., summons on respondent, Joan
Ashmore (Ashmore) and the Montana Human Rights Commission
(Commission) was obviated by their voluntary appearances in the
District Court proceeding. We determine that Hilands' issue number
four is dispositive; that is, whether service pursuant to Rule 5,
M.R.Civ.P., rather than service pursuant to Rule 4, M.R.Civ.P.,
upon parties and non-party agencies to an administrative appeal to
district court is sufficient? Consequently, we restate the
dispositive issue as follows:
Whether, when petitioning for judicial review of an
administrative decision, the Montana Administrative
Procedure Act requires service on agencies and parties
pursuant to the provisions of Rule 4, M.R.Civ.P., as we
held in Fife v. Martin (1993), 261 Mont. 471, 863 P.2d
403, or pursuant to the provisions of Rule 5, M.R.Civ.P.?
BACKGROUND
In 1991, Ashmore brought a claim before the Commission
alleging that Hilands had discriminated, based on gender, in its
public accommodations contrary to § 49-2-304, MCA. A Commission
investigator investigated Ashmore's complaints and found no
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probable cause to believe that Hilands had violated § 49-2-304,
MCA. Ashmore appealed this determination of no probable cause and
the Commission held a contested case hearing on the matter.
Following the hearing, the Commission's final order determined that
Hilands had discriminated in its membership and other policies in
violation of the Human Rights Act, §§ 49-l-101 through 49-4-511,
MCA. The Commission awarded Ashmore damages and ordered broad
relief to address Hilands' discriminatory practices.
Pursuant to 5 2-4-702, MCA, Hilands filed a Petition for
Judicial Review of the Commission's holding. Hilands, by mail,
served copies of the petition for review on Ashmore's attorney and
the attorney for the Commission, pursuant to Rule 5(b), M.R.Civ.P.
However, Hilands did not have a summons issued or served on either
entity.
On July 19, 1994, Ashmore moved to substitute the District
Court judge. Numerous motions for substitution of judge followed.
Ashmore, Hilands, the Commission, and the presiding judge held
conferences to determine which outside judge would be called into
the case. In April, 1995, they ultimately decided on District
Court Judge C. B. McNeil.
In a scheduling conference held May, 1995, counsel for
Ashmore, Hilands and the Commission agreed upon a briefing
schedule. The Commission had participated throughout the District
Court proceedings by joining in the conferences to select a judge,
joining in the scheduling conference, filing notices of appearance,
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and filing motions. However, Hilands consistently maintained that
the Commission was not a party to this action because it had not
been a party to the administrative proceedings below. The
Commission concedes that it was not a party to the administrative
proceedings before the Commission's hearing examiner.
At the May, 1995, scheduling conference in District Court,
Hilands argued that the Commission was not a party to the action
and that, should it wish to participate as a party, it should seek
to intervene pursuant to Rule 24, M.R.Civ.P. Subsequently, the
Commission moved to intervene in the matter and the District Court
denied the motion, holding that the Commission was not properly a
party. See Young v. City of Great Falls (1981), 194 Mont. 513,
515-16, 632 P.2d 1111, 1113.
In August, 1995, Hilands filed its brief on the merits in
District Court. Ashmore's counsel obtained an extension until mid-
October in which to file her answer brief. In early October,
Ashmore filed a Rule 12(b), M.R.Civ.P., Motion to Dismiss. Ashmore
based her Motion to Dismiss on Fife v. Martin (1993), 261 Mont.
471, 863 P.2d 403, arguing that service of process via summons,
pursuant to Rule 4D, M.R.Civ.P., was necessary to establish
jurisdiction in the District Court.
The District Court granted Ashmore's motion and dismissed the
petition with prejudice. The court determined that under § 2-4-
702(2) (a), MCA, copies of the petition for judicial review must be
promptly served upon the agency from which review is sought, in
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this case the Commission, in accordance with Rule 4D(2) (h),
M.R.Civ.P. In other words, the court concluded that Hilands had
failed to serve process upon the Commission, under Rule 4D(2) (h),
M.R.Civ.P., by delivering a copy of the summons and petition to the
Attorney General. The court relied on -,
Fife 863 P.2d 403, for the
proposition that the procedures proscribed under § 2-4-702, MCA,
comprise "a jurisdictional threshold which must be met in order to
vest authority in a district court.1'
Based on its interpretation of Fife, the District Court
concluded that, because the Commission had not been served via the
Attorney General pursuant to Rule 4D(2) (h), M.R.Civ.P., the court
did not have jurisdiction over this matter. Consequently, because
it was too late for Hilands to obtain prompt service on the
Commission and because Hilands had failed to comply with
jurisdictional requirements, the court dismissed Hilands' Petition
for Review with prejudice. Given its conclusion that it had no
jurisdiction to proceed, the court decided it was unnecessary to
address whether or not it had obtained jurisdiction pursuant to
Rule 4B(2), M.R.Civ.P., over Ashmore by virtue of her voluntary
appearances or whether the Commission had voluntarily appeared
through its Motion to Intervene.
STANDARDOF REVIEW
Ashmore based her motion to dismiss on lack of jurisdiction,
Rule 12(b) (1) and (21, M.R.Civ.P. Motions to dismiss are construed
in a light most favorable to the non-moving party, in this case
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Hilands, and should not be granted unless it appears beyond doubt
that Hilands can prove no set of facts ,in support of its claim
which would entitle it to relief. See Lockwood v. W.R. Grace & Co.
(1995) I 272 Mont. 202, 207, 900 P.2d 314, 317; Boehm v. Nelson
(1987), 229 Mont. 452, 453-54, 747 P.2d 213, 214. In considering
the motion, the complaint is construed in the light most favorable
to Hilands and all allegations of fact contained therein are taken
as true. & Lockwood, 900 P.2d at 317; Boehm, 747 P.2d at 214.
The District Court's determination that it did not have
jurisdiction over this case is a conclusion of law. Pike v.
Burlington N. R.R. Co. (1995), 273 Mont. 390, 392-93, 903 P.2d
1352, 1353. We review a district court's conclusions of law to
determine whether the court's interpretation of the law is correct.
Lockwood, 900 P.2d at 317.
DISCUSSION
As discussed earlier, and because in this case we overrule
Fife
-I 863 P.2d 403, we restate the dispositive issue as follows:
Whether, when petitioning for judicial review of an
administrative decision, the Montana Administrative
Procedure Act requires service on agencies and parties
pursuant to the provisions of Rule 4, M.R.Civ.P., as we
held in Fife, 863 P.2d 403, or pursuant to the provisions
of Rule 5, M.R.Civ.P.?
The District Court granted Ashmore's Rule 12(b) Motion to
Dismiss for lack of jurisdiction. The court stated: "Service of
process upon the Human Rights Commission must be made as required
by Rule 4D(2)(h), M.R.Civ.P., by delivering a copy of the summons
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and complaint (herein the petition) to the Attorney General and to
any other party which may be prescribed by statute." The court
determined that, under Fife, the procedures to gain jurisdiction as
prescribed by the Montana Administrative Procedure Act (MAPA),
§§ 2-4-101 through 711, MCA, and Montana's Rules of Civil
Procedure, comprise a jurisdictional threshold which must be met in
order to vest authority in a district court. -,
Fife 863 P.2d at
407. Having concluded that it had no jurisdiction over the
Commission, the court declined to address the issue of whether it
acquired jurisdiction over Ashmore pursuant to Rule 4B(2),
M.R.Civ.P., due to her voluntary appearances.
In her Rule 12(b) Motion to Dismiss, Ashmore argued that,
because Hilands failed to properly and promptly serve a copy of the
summons and petition upon Ashmore, the Commission, and the Attorney
General, under 5 2-4-702, .MCA, and Rule 4D, M.R.Civ.P., the
District Court lacked personal and subject matter jurisdiction to
hear this case. On appeal, Hilands frames the issue as solely a
question of personal jurisdiction. Ashmore now counters that
Hilands' failure to serve a copy of the summons or petition on
Ashmore and the Commission via the Attorney General deprives the
court of subject matter jurisdiction. There is no merit to
Ashmore's contention that failure to serve process pursuant to Rule
4, M.R.Civ.P., deprives the court of subject matter jurisdiction.
Rule 4, M.R.Civ.P., establishes the procedure for acquiring
personal jurisdiction over persons or entities subject to the
court’s jurisdiction. Subject matter jurisdiction exists
independently of personal jurisdiction over the parties.
Article VII, f3 4(2) of the Montana Constitution provides that
the legislature may provide for direct review by the district court
of decisions of administrative agencies. MAPA, Title 2 Chapter 4
at Part 7, provides the procedures for judicial review of
administrative contested cases. MAPAprovides that: "A person who
has exhausted all administrative remedies available within the
agency and who is aggrieved by a final decision in a contested case
is entitled to judicial review under this chapter." Section 2-4-
702, MCA. Thus, the district courts have subject matter
jurisdiction over administrative appeals.
The Human Rights Act sets out the procedures for contested
cases. Sections 49-2-501 through -510, MCA. Contested case
hearings and subsequent proceedings under the Human Rights Act must
be held in accordance with MAPA. Section 49-2-505, MCA. MAPA sets
forth the procedure for initiating judicial review of contested
cases at 5 2-4-702, MCA:
(2)(a) . . proceedings for review must be
instituted by filing a petition in district court within
30 days after service of the final decision of the agency
or, if a rehearing is requested, within 30 days after the
decision is rendered. . . . Copies of the petition must
be promptly served upon the agency and all parties of
record.
Additionally, at 5 2-4-106, MCA, MAPA provides that:
Except where a statute expressly provides to the
contrary, service in all agency proceedings subject to
the provisions of this chapter and in proceedings for
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-
judicial review thereof shall be as prescribed for civil
actions in the district courts.
In other words, service under MAPA shall be as prescribed by the
Montana Rules of Civil Procedure unless a statute expressly
provides otherwise. MCI Telecommunications Corp. v. Department of
Public Serv. Regulation (1993), 260 Mont. 175, 179, 858 P.2d 364,
367. We treat administrative agency appeals to district courts in
a manner similar to other proceedings. MCI, 858 P.2d at 367.
Moreover, we encourage a liberal interpretation of procedural rules
governing judicial review of an administrative decision, rather
than taking an overly-technical approach, so as to best serve
justice and allow the parties to have their day in court. m,
632 P.2d at 1113.
It is uncontested that Hilands timely filed a Petition for
Judicial Review pursuant to 5 2-4-702, MCA. Hilands, by mail,
served copies of the petition upon Ashmore's attorney and upon the
Commission's attorney, pursuant to Rule S(b), M.R.Civ.P. It is
also uncontested that Hilands did not have a summons issued or
served on Ashmore, the Commission, or the Attorney General,
pursuant to Rules 4C and 4D, M.R.Civ.P.
Both Ashmore and the District Court rely on Fife for the
proposition that service of process, as set forth in Rule 4D(2) (h),
M.R.Civ.P., upon the Commission and the Attorney General must be
accomplished in order to vest jurisdiction in a district court.
863 P.2d 403. In -I
Fife Patricia Lee Martin (Martin) assigned her
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rights to collect delinquent, future and present child support
obligations owed her by David Fife (Fife), to the Department of
Social and Rehabilitation Services, Child Support Enforcement
Division (CSED). CSED sought enforcement of its assigned rights.
CSED sent Fife a notice of parental responsibility and set a date
for an administrative hearing on the matter. Fife moved the agency
to dismiss the action on constitutional grounds. After various
administrative proceedings, Fife petitioned the district court for
judicial review naming Martin as the sole respondent. Fife mailed
copies of the petition to Martin and CSED. Fife, 863 P.2d at 405.
On appeal, this Court determined that because Martin had
assigned her rights to CSED, CSED was the real party in interest
and the proper respondent to Fife's petition for judicial review.
Fife had mailed copies of the petition for judicial review to CSED
and Martin, but had not properly named CSED as the respondent in
his petition, nor served CSED pursuant to Rule 4D, M.R.Civ.P. CSED
did not answer the mailed petition for judicial review and CSED did
not appear in court. When Fife subsequently obtained and mailed a
summons to CSED and Martin, CSED refused to acknowledge service of
the summons and complaint as allowed by Rule 4D, M.R.Civ.P. -.....-,
Fife
863 P.2d at 405.
We held, in -I
Fife that MAPA, § 2-4-702, MCA, requires that
service upon a party to an administrative appeal be accomplished
through a Rule 4D, M.R.Civ.P., service of summons. -,
Fife 863 P.2d
at 407. We now overrule this holding in Fife and hold instead
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that, for the purposes of an administrative appeal to the district
court, service upon the parties and the agency, whether the agency
itself is a party or not, pursuant to Rule 5, M.R.Civ.P., is
sufficient.
Under the Rules of Civil Procedure, service can be
accomplished under either of two rules, Rule 4 or Rule 5,
M.R.Civ.P. Under Rule 4, M.R.Civ.P., jurisdiction is acquired
through the service of process. Process, under Rules 4C and 4D,
M.R.Civ.P., requires the issuance and service of a summons upon a
party. Once served with a summons, the party so served is required
to appear and defend. Rule 4C(2), M.R.Civ.P. If the party does
not appear and defend, Rule 4C(2), M.R.Civ.P., provides that
judgment by default will be rendered against him.
However, a petition for judicial review to the district court
is analogous to an appeal, as recognized by this Court, in MCI, 858
P.2d 364. As a prerequisite to judicial review, the parties must
have "exhausted all administrative remedies available within the
agency." Section 2-4-702(l) (a), MCA. By the time the matter is
before the district court for judicial review, the parties have
already been defined through their appearance at, and participation
in, the administrative proceedings. There is no more need to
acquire Rule 4, M.R.Civ.P., personal jurisdiction over these
parties than there would be in an appeal from district court to the
Supreme Court.
That leaves Rule 5(b), M.R.Civ.P., as the only other method
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within the Rules of Civil Procedure for serving parties to an
administrative appeal. As between the only two options for
service, Rule 4, M.R.Civ.P., and Rule 5, M.R.Civ.P., Rule 5,
M.R.Civ.P., is the more logical choice for effecting service. Rule
5, M.R.Civ.P., is designed to give notice via mailing or delivery
of papers and pleadings. Unlike Rule 4, M.R.Civ.P., it is not
designed to acquire jurisdiction over persons, nor does it require
the service of a summons with the attendant requirement that the
served party appear and defend or face a default judgment. While
we recognize that Rule 5, M.R.Civ.P., speaks in terms of serving
"parties," we hold that, for the purposes of service under MAPA, it
is sufficient to mail copies of the Petition for Judicial Review
upon the parties and the agency, whether the agency is itself a
party or not. Accordingly, we hold that Rule 5(b), M.R.Civ.P.,
service by mail is all that is necessary to satisfy the service
requirement of 5 2-4-702, MCA. We reverse the District Court's
conclusion that failure to serve summons and a copy of the petition
upon the Commission through the Attorney General deprived the court
of jurisdiction to proceed.
Finally, we note that the District Court based its dismissal
on its conclusion that it had no jurisdiction over the Commission.
The court did not address its jurisdiction over Ashmore. The
question of whether Ashmore's voluntary appearances subjected her
to the jurisdiction of the District Court pursuant to Rule 4B(2),
M.R.Civ.P., is irrelevant given our holding that service pursuant
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to Rule 5, M.R.Civ.P., is sufficient under 55 2-4-106 and 2-4-
702(2)(a), MCA. Hilands mailed the Petition for Judicial Review to
Ashmore pursuant to Rule 5(b), M.R.Civ.P. This mailing was
sufficient to vest the District Court with jurisdiction over
Ashmore as well as the Commission.
The District Court erred in dismissing Hilands' Petition for
Judicial Review for lack of jurisdiction. Hilands' service of the
petition on Ashmore and the Commission, a non-party, according to
Rule S(b), M.R.Civ.P., was sufficient to satisfy the requirements
of § 2-4-702, MCA.
We reverse.
We concur:
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