Balyeat Law, PC v. Pettit

No

No. 97-647

IN THE SUPREME COURT OF THE STATE OF MONTANA

1998 MT 252

BALYEAT LAW, PC, as Trustee,

Plaintiff and Appellant,

v.

GEORGINA BEVERLY PETTIT,

Defendant and Respondent.

APPEAL FROM: District Court of the Twentieth Judicial
District,

In and for the County of Lake,

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The Honorable C. B. McNeil, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Regan Whitworth, Balyeat Law Offices, Missoula, Montana

For Respondent:

Andrea J. Olsen, Confederated Salish and Kootenai Tribes Tribal Legal Services, Pablo, Montana

Submitted on Briefs: February 18, 1998

Decided: October 20, 1998

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Filed:

__________________________________________

Clerk

Justice William E. Hunt, Sr. delivered the Opinion of the Court.

¶ Balyeat Law, P.C., as Trustee, (Balyeat) appeals from an order of the Twentieth
Judicial District Court, Lake County, granting Georgina Beverly Pettit’s (Beverly)
motion to dismiss for lack of jurisdiction. We affirm.

¶ The following issues were raised on appeal:

¶ 1. Did the District Court err when it addressed whether the Justice Court properly
entered the default judgment and whether the state court had jurisdiction over this
case?

¶ 2. Do the state courts of Montana have subject matter jurisdiction over an action to
collect a debt for medical bills arising out of transactions on the Flathead Reservation,
brought by a non-Indian creditor against an enrolled member of the Confederated
Salish and Kootenai Tribes who resides on the reservation and whose spouse
incurred the debt?

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¶ 3. Do the state courts of Montana have subject matter jurisdiction over an action to
collect a debt for medical bills arising out of transactions that occurred off the
Flathead Reservation but within the State of Montana, brought by a non-Indian
creditor against an enrolled member of the Confederated Salish and Kootenai Tribes
who resides on the reservation and whose spouse incurred the debt?

FACTUAL AND PROCEDURAL BACKGROUND

¶ Beverly Pettit is an enrolled member of the Confederated Salish & Kootenai Tribes
(Tribes). She has resided within the exterior boundaries of the Flathead Reservation
her entire life. The record reveals that she works for Mission Valley Power, a
business entity owned by the Tribes, and that all her assets are located on the
reservation. On August 10, 1991, she married Lyle Pettit. Lyle is not a member of the
Tribes, although he also lives within the exterior boundaries of the Flathead
Reservation.

¶ Lyle incurred medical debts at three medical institutions: St. Luke Community
Hospital (St. Luke’s), Rittenour Medical Clinic, and Community Medical Center. St.
Luke’s is located in Lake County, within the exterior boundaries of the Flathead
Reservation. Rittenour Medical Clinic is located in Sanders County, outside the
exterior boundaries of the Flathead Reservation. The Community Medical Center is
located in Missoula County, also outside the exterior boundaries of the reservation.
Although the District Court made no findings of fact as to when the medical debts
were incurred, it appears from the record that Lyle incurred some of his debts at St.
Luke’s in July 1989 and February 1991, prior to his marriage to Beverly. The
remainder of the debts were incurred after his marriage. None of the medical debts
were incurred by Beverly.

¶ All three medical institutions appointed Balyeat as trustee for Lyle’s debts. On
May 1, 1995, Balyeat filed a complaint in Lake County Justice Court alleging that
Beverly was indebted to it for $1843.60 for goods and services provided to Lyle by
the three medical institutions. Balyeat did not name Lyle as a defendant. On June 14,
1995, the Justice of the Peace entered a default judgment against Beverly for the
requested sum plus interests and costs.

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¶ On January 17, 1996, Beverly filed a motion to set aside the default judgment,
contending in part that the Lake County Justice Court had neither personal nor
subject matter jurisdiction over her because she was a member of the Tribes residing
within the exterior boundaries of the Flathead Reservation and because the debts
were incurred by her husband Lyle both before and during their marriage. On
February 27, 1996, the Justice of the Peace denied her motion without any opinion or
rationale stated.

¶ Beverly appealed to the District Court on March 7, 1996, and on July 17, 1996, the
District Court entered an order granting her motion to dismiss for lack of
jurisdiction. The court did not support its order with any memorandum of opinion or
rationale. Balyeat appealed to this Court. The record on appeal, however, was devoid
of any affidavits, hearing testimony or discovery establishing what the facts actually
were. Moreover, there was no memorandum of opinion or rationale of the court
whose decision we were requested to affirm, modify or reverse. In light of the
complexity and sensitivity of the issues involving state court jurisdiction over
reservation Indians in civil matters, we thus remanded the case to the District Court
with instructions to develop a factual record and render findings of fact, conclusions
of law and a memorandum of opinion. We also instructed the parties on any further
appeal of this case to this Court to cite and argue legal authorities that pertain to the
specific factual record. See Balyeat Law, PC v. Pettit (1997), 281 Mont. 95, 931 P.2d
50.

¶ On August 27, 1997, the District Court entered its findings of fact, conclusions of
law and order, granting Beverly’s motion to dismiss for lack of subject matter
jurisdiction. The court held that the issue of the state court’s jurisdiction was
properly before it, because the issue of the court’s subject matter jurisdiction could
be raised at any time. It applied the three-part test articulated in State ex rel. Iron
Bear v. District Court (1973), 162 Mont. 335, 512 P.2d 1292 and held that the court
did not have jurisdiction over the action because Beverly was a member of the Tribes
and under Montana precedent, the exercise of state jurisdiction would interfere with
reservation self-government. The court further held that the Tribes and the state of
Montana had not agreed to concurrent jurisdiction over debt collection actions
pursuant to Public Law 280. Finally, it held that § 40-2-106, MCA, did not subject
Beverly to liability for Lyle’s debts, because that statute did not confer jurisdiction
which was otherwise precluded, and Beverly had not engaged in significant off-
reservation contacts so as to render her subject to the jurisdiction of the state court

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in this matter. This appeal followed. The case is now ready for review.

STANDARD OF REVIEW

¶ Whether to dismiss a claim based on lack of jurisdiction presents a question of law.
We review a district court’s conclusions of law to determine whether they are
correct. In re Marriage of Skillen (Mont. 1998), 1998 MT 43, ¶ 9, 956 P.2d 1, ¶ 9
(citing Poteat v. St. Paul Mercury Ins. Co. (1996), 277 Mont. 117, 119, 918 P.2d 677,
679).

ISSUE ONE

¶ Did the District Court err when it addressed whether the Justice Court properly entered
the default judgment and whether the state court had jurisdiction over this case?

¶ Balyeat contends that the District Court had no authority to review whether the
Justice Court properly entered a default judgment. It points to § 25-33-303, MCA,
which provides that a party may not appeal a judgment by default rendered in
justice court "except on questions of law which appear on the face of the papers or
proceedings and except in cases when the justice’s or city court has abused its
discretion in . . . refusing to set aside a default or judgment." In this case, Balyeat
argues that although Beverly raised the jurisdictional issue in her motion to set aside
the default judgment, she identified nothing on the face of the complaint that
indicates subject matter jurisdiction may be lacking. It further contends that she
never actually argued that the Justice Court abused its discretion nor did she
establish any evidence supporting such a claim. Balyeat maintains that the court
therefore had no authority either to address the jurisdictional issue or set aside the
default judgment. We disagree.

¶ It is well-settled that the issue of a court’s subject matter jurisdiction may be
presented at any time. See Rule 12(h)(3), M.R.Civ.P. ("Whenever it appears by
suggestion of the parties or otherwise that the court lacks jurisdiction of the subject
matter, the court shall dismiss the action.")(emphasis added). See also In re
Marriage of Skillen, ¶ 10 ("A motion to dismiss based on lack of subject matter
jurisdiction may be raised at any time and by either party, or by the court itself.");

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Geiger v. Pierce (1988), 233 Mont. 18, 21, 758 P.2d 279, 281("It is a fundamental
axiom of our legal system that the issue of subject matter jurisdiction may be invoked
at any time in the course of a proceeding.")(citing In re Marriage of Lance (1984),
213 Mont.182, 186, 690 P.2d 979, 981). This is true even if subject matter jurisdiction
is not attacked until after the entry of default. See, e.g., Larrivee v. Morigeau (1979),
184 Mont. 187, 192, 602 P.2d 563, 566, cert. den., 445 U.S. 964, 100 S.Ct. 1653, 64 L.
Ed.2d 240. In short, a party can never waive or consent to subject matter jurisdiction
where there is no basis for the court to exercise jurisdiction. In re Marriage of
Skillen, ¶ 10 (citing In re Marriage of Miller (1993), 259 Mont. 424, 427, 856 P.2d
1378, 1380). Therefore, notwithstanding Balyeat’s arguments that Beverly did not
present the issue in the proper fashion or identify any legal issues on the face of the
complaint, the issue of subject matter jurisdiction is not waived and the court cannot
refuse to entertain the motion to dismiss. We hold that the District Court did not err
when it considered the issue of the state court’s jurisdiction and did not err in
determining whether the Justice Court had properly entered the default judgment.

ISSUE TWO

¶ Do the state courts of Montana have subject matter jurisdiction over an action to collect
a debt for medical bills arising out of transactions on the Flathead Reservation, brought by
a non-Indian creditor against an enrolled member of the Confederated Salish and Kootenai
Tribes who resides on the reservation and whose spouse incurred the debt?

¶ Balyeat maintains that the state court has jurisdiction over that portion of the
action that relates to the debts Lyle incurred at St. Luke’s, which is located within
the exterior boundaries of the reservation. In presenting this argument, Balyeat does
not distinguish between those debts incurred by Lyle prior to his marriage to Beverly
and those debts incurred after his marriage. It makes no difference in any event,
because we hold that the state court lacks subject matter jurisdiction to resolve the
dispute over all debts incurred at St. Luke’s.

¶ It has long been recognized that tribes are presumed to maintain their inherent
tribal sovereignty and jurisdiction over the activities of both Indians and non-Indians
on reservation lands. Geiger v. Pierce (1988), 233 Mont. 18, 20, 758 P.2d 279, 280
("Generally civil jurisdiction over commercial activities presumptively lies in the

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tribal courts unless affirmatively limited by a specific treaty, provision or federal
statute.")(citing Iowa Mutual Ins. Co. v. LaPlante (1987), 480 U.S. 9, 18, 107 S.Ct.
971, 978, 94 L.Ed.2d 10, 16); In re Marriage of Skillen, ¶ 56 ("As a matter of
sovereignty, tribes are presumed to have jurisdiction over the activity of members
and non-members alike within the exterior boundaries of the reservation.")

¶ In Williams v. Lee (1959), 358 U.S. 217, 223, 79 S.Ct. 269, 272, 3 L.Ed.2d 251, 255-
56, the United States Supreme Court expressly held that in light of the tribes’
inherent sovereignty, absent Congressional Acts, state courts do not have jurisdiction
over debt actions brought by a non-Indian creditor, where the transaction at issue
arose on the reservation. The Supreme Court stated:

Essentially, absent governing Acts of Congress, the question has always been
whether the state action infringed on the right of reservation Indians to make
their own laws and be ruled by them.

Williams, 358 U.S. at 220, 79 S.Ct. at 271, 3 L.Ed.2d at 254. The Supreme Court
concluded that "[t]here can be no doubt that to allow the exercise of state jurisdiction [in
the debt action] would undermine the authority of the tribal courts over Reservation affairs
and hence would infringe on the right of the Indians to govern themselves." Williams, 358
U.S. 223, 79 S.Ct. 272, 3 L.Ed.2d at 255. See also Kennerly v. District Court of the Ninth
Judicial District of Montana (1971), 400 U.S. 423, 429, 91 S.Ct. 480, 483, 27 L.Ed.2d
507, 511 (holding that absent the consent of the tribe in accordance with Public Law 280
and affirmative legislative action by the state, the tribe has exclusive jurisdiction over a
debt collection action arising out of a transaction on the reservation between a non-Indian
creditor and an Indian defendant).

¶ The Montana Supreme Court has consistently applied and confirmed the holdings
in Williams and Kennerly. Based in part upon the test articulated in Williams, this
Court has outlined a three-part test for determining whether the state courts of
Montana have jurisdiction over transactions occurring on the reservation. In State ex
rel. Iron Bear v. District Court (1973), 162 Mont. 335, 346, 512 P.2d 1292, 1299, we
stated:

Before a district court can assume jurisdiction in any matter submitted to it, it
must find subject matter jurisdiction by determining: (1) whether the federal
treaties and statutes applicable have preempted state jurisdiction; (2) whether

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the exercise of state jurisdiction would interfere with reservation self-
government; and (3) whether the Tribal Court is currently exercising
jurisdiction or has exercised jurisdiction in such a manner as to preempt state
jurisdiction.

See also Marriage of Skillen, ¶ 46 (holding that in jurisdictional disputes between tribal
and state courts, the Iron Bear test and a traditional sovereignty analysis apply in the
adjudicatory context).

¶ In accordance with Williams and Kennerly and the three-part test outlined in Iron
Bear, this Court has held that the Montana courts have no subject matter
jurisdiction over a debt collection action such as the one in this case, which arises on
an Indian reservation and is brought by a non-Indian creditor against an enrolled
member of the tribe residing on the reservation. See Geiger, 233 Mont. at 21, 758
P.2d at 281; Security State Bank v. Pierre (1973), 162 Mont. 298, 305, 511 P.2d 325,
329-30. In both Geiger and Pierre, this Court held that state court jurisdiction over
such an action would interfere with tribal sovereignty and tribal self-government.
Geiger, 233 Mont. at 21, 758 P.2d at 281; Pierre, 162 Mont. at 305, 511 P.2d at 329-
30.

¶ Balyeat contends that even though Beverly is a member of the Tribes and resides
on the reservation and even though the transaction arose on the reservation, state
court jurisdiction will not interfere with tribal self-government, because the Tribes
consented to share concurrent jurisdiction with the state courts in this area of law
pursuant to Public Law No. 280, 18 U.S.C. §§ 1161-62, 25 U.S.C. §§ 1321-1326, 28 U.
S.C. § 1360. Enacted in 1953, Public Law 280 provides a procedure whereby states
may assume concurrent jurisdiction over civil causes of action to which a tribal
member is a party and which arise within the boundaries of an Indian reservation.
Pub.L. 280, 28 U.S.C. § 1360. While six states assumed jurisdiction under the
statute’s express terms, other states, including Montana, were entitled to unilaterally
"assume jurisdiction at such time and in such manner as the people of the State shall,
by affirmative legislative action, obligate and bind the State to assumption thereof."
Pub.L. 280, § 7, 67 Stat. 588, 590 (1953). Pursuant to the 1968 Indian Civil Rights
Act, Congress subsequently repealed the provision which authorized the states to
unilaterally assume jurisdiction, and thereafter required the consent of the majority

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of the adult tribal members before the state could assume jurisdiction. 25 U.S.C. §§
1322, 1326. See also In re Marriage of Wellman (1993), 258 Mont. 131, 136-37, 852
P.2d 559, 562 (briefly outlining history of Public Law 280); State ex rel. McDonald v.
Dist. Court (1972), 159 Mont. 156, 159-160, 496 P.2d 78, 80-81 (same).

¶ Although consent of the tribal members was thus not required by Public Law 280
prior to the enactment of the 1968 Indian Civil Rights Act, Montana nevertheless
established a consent procedure in 1963 for extending its civil adjudicatory powers
onto the reservation. See Mont.Sess.Laws, Ch. 81, 1963, now codified at §§ 2-1-301
through 2-1-306, MCA. Subsequently, in 1965, the Confederated Salish and Kootenai
Tribes enacted Tribal Ordinance 40-A (Revised) pursuant to which the Tribes
consented to the assumption of enumerated areas of civil jurisdiction by the state
courts of Montana onto the Flathead Reservation. In accordance with § 2-1-302,
MCA, the governor of Montana thereafter issued the required proclamation dated
October 8, 1965. Pursuant to Public Law 280 and Tribal Ordinance 40-A (Revised),
the laws and jurisdiction of the state of Montana were thereby extended onto the
Flathead Reservation in the following areas:

(a) Compulsory School Attendance

(b) Public Welfare

(c) Domestic Relations (except adoptions)

(d) Mental Health, Insanity, Care of the Infirm, Aged and Afflicted

(e) Juvenile Delinquency and Youth Rehabilitation

(f) Adoption Proceedings (With consent of the Tribal Court)

(g) Abandoned, Dependent, Neglected, Orphaned or Abused Children

(h) Operation of Motor Vehicles upon the Public Streets, Alleys, Roads and Highways

(i) All Criminal Laws of the State of
Montana; and all Criminal Ordinances of
Cities and Towns within the Flathead
Indian Reservation.
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¶ In determining whether Tribal Ordinance 40-A (Revised) extends jurisdiction over
this case, we keep in mind several rules of statutory construction. In general, the role
of this Court has always been "to ascertain and declare what is in terms or in
substance contained therein, not to insert what has been omitted or to omit what has
been inserted." Section 1-2-101, MCA. Statutory language must be construed
according to its plain meaning and if the language is clear and unambiguous, no
further interpretation is required. Lovell v. State Comp. Mut. Ins. Fund (1993), 260
Mont. 279, 285, 860 P.2d 95, 99. Only when the language is ambiguous does the
Court apply rules and principles of statutory interpretation. When construing Indian
law, the canon of construction applied by the courts for over a century and a half has
been to resolve all doubtful expressions in favor of Native Americans. Worcester v.
Georgia (1832), 31 U.S. (6 Pet.) 515, 8 L.Ed. 483; Antoine v. Washington (1975), 420
U.S. 194, 199, 95 S.Ct. 944, 949, 43 L.Ed.2d 129, 134. See also In re Marriage of
Skillen, ¶ 106 (Nelson, J., concurring in part and dissenting in part).

¶ In this case, however, this Court is not asked to simply interpret a state or federal
statute that applies to Native Americans, but we are asked to interpret an ordinance
that was promulgated by the Tribes themselves. Hence, it is even more imperative
that we afford every deference to the Tribes and resolve all ambiguities in its favor.
This is particularly so in this case. The ordinance we are asked to construe is one
whereby the Confederated Salish and Kootenai Tribes voluntarily consented to the
extension of jurisdiction to the Montana courts in very limited areas. Absent the
clearest evidence of the Tribes’ intent to consent to the assertion of authority by state
courts onto their sovereign land, the Tribes retain their exclusive jurisdiction.

¶ For that very reason, this Court has thus held Tribal Ordinance 40-A (Revised)
must be strictly construed so as not to extend state court jurisdiction beyond that
expressly directed by the Tribes. Liberty v. Jones (1989), 240 Mont. 16, 19, 782 P.2d
369, 371. In Liberty, the Court declined to construe the term "public welfare" in the
ordinance so broadly as to include state court jurisdiction in cases that affected the
general happiness, well-being and welfare of the citizens of Montana. Instead we
strictly limited it to the "practical issues of economic assistance to the needy."
Liberty, 240 Mont. at 19, 782 P.2d at 371. We stated that "[i]n the absence of an
express directive giving the State jurisdiction over disputes between tribal members,

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which arise on the reservation, Montana cannot extend its authority over such
controversies." Liberty, 240 Mont. at 19, 782 P.2d at 371 (emphasis added).
Similarly, in this case, the state court does not have jurisdiction over the debt
collection action absent an express Tribal directive.

¶ A review of Tribal Ordinance 40-A (Revised) reveals that the Tribes have not
consented to concurrent jurisdiction over debt collection actions or indeed any
commercial activities. In none of the enumerated areas, did the Tribe expressly agree
to such an extension. Moreover, on this point, our holdings in Pierre and in Geiger
are dispositive. As in this case, in both Pierre and Geiger, the debtors were members
of the Confederated Salish and Kootenai Tribes and in both cases the commercial
transaction occurred on the Flathead Reservation. Tribal Ordinance 40-A (Revised)
thus required interpretation. In Pierre, we examined Tribal Ordinance 40-A
(Revised) and implicitly held that the ordinance did not extend jurisdiction over the
debt action to the Montana courts. Pierre, 162 Mont. at 304, 511 P.2d at 329. See also
Larrivee, 184 Mont. at 201, 602 P.2d at 570-71 (examining Pierre and noting that "a
commercial transaction is not one of the subjects over which the state assumes
jurisdiction through Tribal Ordinance 40-A (Revised)"). Similarly, in Geiger, we
noted that the Tribes had not consented to the assumption by the state of jurisdiction
over commercial debt transactions occurring on the Flathead Reservation. Geiger,
233 Mont. at 20, 758 P.2d at 280. In both cases, the Court thus held that the state
court lacked subject matter jurisdiction because the exercise of such jurisdiction
would interfere with tribal sovereignty and the Tribes’ right of self-government.
Pierre, 162 Mont. at 305, 511 P.2d at 329-30; Geiger, 233 Mont. at 21, 758 P.2d at
281.

¶ Although the Tribes did not expressly consent to the extension of jurisdiction in
debt actions, Balyeat nevertheless contends that the action relating to the debts
incurred at St. Luke’s can be litigated in state court pursuant to sections (d) and (c)
of Tribal Ordinance 40-A (Revised). Again, we disagree.

¶ First, Balyeat cites Liberty, 240 Mont. at 18, 782 P.2d at 371, and argues that
section (d) of the ordinance extends jurisdiction to the Montana courts in the area of
"Medical Health." It contends that because this action involves debts incurred at a
medical institution, the state court thus has jurisdiction. Balyeat’s position is wholly
without merit.

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¶ As Beverly has pointed out in her papers and as the District Court pointed out in
its decision, Balyeat relies on a typographical error in the Liberty opinion. That
opinion misquotes section (d) as extending jurisdiction to the state in the area of
"Medical Health," whereas section (d) actually extends jurisdiction in the area of
"Mental Health." See also Pierre, 162 Mont. at 304, 511 P.2d at 329 (correctly
quoting Tribal Ordinance 40-A (Revised)). Thus, the very premise upon which
Balyeat’s argument is based is flawed.

¶ Balyeat also argues that the matter may be litigated in state court pursuant to
section (c), which extends concurrent jurisdiction to the state in the area of
"Domestic Relations (except adoptions)." Tribal Ordinance 40-A (Revised). Balyeat
points to §§ 40-2-106, -205 through -207, and -210, MCA, and argues that under
Montana law a person is liable for the necessary expenses of her spouse, including
medical expenses. Specifically, § 40-2-106, MCA, provides:

Liability for acts or debts of spouse. Neither husband nor wife, as such, is
answerable for the acts of the other or liable for the debts contracted by the
other; provided, however, that the expenses for necessaries of the family and
of the education of the children are chargeable upon the property of both
husband and wife, or either of them, and in relation thereto they be sued
jointly or separately.

Section 40-2-210, MCA, defines "necessary articles" to include services that are
"reasonably required to provide for the health . . . of the married person. . . ." Balyeat
reasons that these statutory sections fall within Montana’s "domestic relations" law. It
concludes that the Tribes therefore consented to extend jurisdiction to the Montana courts
to litigate actions pursuant to those statutory sections. Hence, the state court has
jurisdiction over its claim that Beverly is liable to it for the debts incurred by Lyle. We
reject Balyeat’s contention.

¶ The sole argument advanced by Balyeat in support of its position rests with its
contention that § 40-2-106, MCA, falls within Montana’s "domestic relations" law.
That statute in fact falls within Title 40, entitled "Family Law," chapter 2, entitled
"Husband and Wife." However, what is at issue is not whether that statute is
contained within Montana’s conception of what constitutes "domestic relations," but
rather whether that statute falls within the Tribes’ definition of "domestic relations."
We conclude that it does not.

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¶ Regardless of whether or not Montana considers § 40-2-106, MCA, to be part of its
so-called "domestic relations" body of law, Balyeat offers no evidence of what the
Tribes themselves intended by the term. It is evident that the Tribes certainly did not
intend the term to be co-extensive with Chapter 2 of Title 40, "Husband and Wife,"
because that would exclude the areas of marriage and termination of marriage,
which are embodied in chapters 1 and 4 of Title 40 but yet are certainly within the
common definition and plain meaning of "domestic relations." Additionally, Balyeat
offers no evidence that the Tribes intended the term "domestic relations" to be co-
extensive with Montana’s entire "Family Law" title. If the Tribes had so intended,
they should have expressly so stated.

¶ Furthermore, it makes no sense that the Tribes intended to extend jurisdiction to
the State in a case such as this. Such an interpretation would render all Tribal
members subject to state court jurisdiction in actions to collect the debts for
necessaries incurred by the spouse on the reservation, even in cases where a tribal-
member spouse who actually incurred the debt is beyond the reach of state court
jurisdiction.

¶ This case at heart remains a debt collection action. Even though Montana has
codified § 40-2-106, MCA in its family law title, we decline to interpret "domestic
relations" in Tribal Ordinance 40-A (Revised) so broadly as to include a debt
collection action against a spouse. Absent an express directive giving the State
jurisdiction over such a dispute, we strictly limit the term "domestic relations" to its
plain and ordinary meaning.

¶ Because the Tribes have not agreed to extend jurisdiction over this matter to the
state courts pursuant to Public Law 280 and Tribal Ordinance 40-A (Revised), we
conclude that state court jurisdiction would interfere with tribal sovereignty. We
hold that the Montana courts do not have jurisdiction over this action against
Beverly to collect on the debt Lyle incurred on the reservation at St. Luke’s.

ISSUE THREE

¶ Do the state courts of Montana have subject matter jurisdiction over an action to collect
a debt for medical bills arising out of transactions that occurred off the Flathead
Reservation but within the State of Montana, brought by a non-Indian creditor against an
enrolled member of the Confederated Salish and Kootenai Tribes who resides on the

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reservation and whose spouse incurred the debt?

¶ As elaborated earlier, the state courts have no authority to exercise jurisdiction
over commercial activities arising on the reservation involving a tribal-member
defendant, because to do so would infringe on the right of the tribe to govern itself.
See, e.g., Williams, 358 U.S. at 223, 79 S.Ct. at 272, 3 L.Ed.2d at 255; Geiger, 233
Mont. at 21, 758 P.2d at 281. In general, however, when tribal members reach
beyond the confines of reservation boundaries to engage in commercial activities,
they are deemed to have submitted themselves to the laws of the state and are thus
subject to state court jurisdiction. Mescalero Apache Tribe v. Jones (1973), 411 U.S.
145, 148-49, 93 S.Ct. 1267, 1270, 36 L.Ed.2d 114, 119 ("Absent express federal law to
the contrary, Indians going beyond reservation boundaries have generally been held
subject to nondiscriminatory state law otherwise applicable to all citizens of the
state."); Little Horn State Bank v. Stops (1976), 170 Mont. 510, 515-16, 555 P.2d 211,
214 (noting that when "tribal members elect[] to leave the reservation and conduct
their affairs within the jurisdiction of the state courts," subject matter jurisdiction
"lies with the state court, not the tribal court."), cert. denied, 431 U.S. 924, 97 S.Ct.
2198, 53 L.Ed.2d 238 (1977). This Court has thus held that the Montana state courts
have jurisdiction over transactions involving a tribal member, when that transaction
involved "‘significant contacts’ with the state outside reservation boundaries."
Crawford v. Roy (1978), 176 Mont. 227, 230, 577 P.2d 392, 393. In State ex rel.
Flammond (1980), 190 Mont. 350, 352, 621 P.2d 471, 472, we again stated that
"Montana may not exercise subject matter jurisdiction over transactions arising on
Indian reservations unless the transaction entails ‘significant’ or ‘substantial’
contacts with the state outside of reservation boundaries."(internal citations omitted).

¶ In this case, Balyeat contends that the state court has jurisdiction over that portion
of the action that relates to debts Lyle incurred at Rittenour Medical Clinic and at
Community Medical Center, because those institutions are located outside the
exterior boundaries of the reservation and all medical care was thus provided outside
the reservation boundaries. In short, it argues that the transactions at those
institutions entailed "significant" or "substantial contacts" with the state.

¶ There is no doubt that if this were an action against Lyle, Lyle would be subject to
state court jurisdiction. By going beyond the confines of the reservation to receive

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such medical care he established substantial contacts with the state and is thus
deemed to have submitted himself to the laws and jurisdiction of the state of
Montana. However, this is an action against Beverly, not Lyle. What is at issue is
thus whether Beverly herself has established "significant" or "substantial" contacts
with the state. We examine the transactions at each institution individually.

A. Rittenour Medical Clinic

¶ With regard to the transaction at Rittenour Medical Clinic, Beverly herself
engaged in absolutely no off-reservation acts that would vest the state court with
jurisdiction over that portion of the debt action. Lyle alone received medical care and
Lyle alone incurred the debts. Balyeat fails to identify any contacts, let alone
"substantial" contacts, engaged in by Beverly which would subject her to the state
court’s jurisdiction.

¶ Instead of identifying any off-reservation contacts, Balyeat once again contends
that Beverly is liable for Lyle’s debts pursuant to § 40-2-106, MCA. The record is not
clear as to whether Beverly and Lyle were married on the reservation or off the
reservation, but Balyeat does not base its argument upon the location of the marriage
ceremony. Instead, Balyeat argues that the mere fact that Beverly is married to Lyle
is enough to subject her to the jurisdiction of the Montana courts. It cites McQuay v.
McQuay (1930), 86 Mont. 535, 539, 284 P. 532, 533, and argues that § 40-2-106,
MCA, creates an agency between spouses. According to Balyeat, when Lyle incurred
debts for medical care he received off-reservation, his off-reservation contacts
constituted "substantial contacts" with the state courts, which in turn were
immediately imputed to Beverly as his agent. She thus became obligated to pay for
them at the moment Lyle incurred them. Once again, we reject Balyeat’s contention.

¶ The logic behind Balyeat’s argument is missing an important step. Assuming § 40-
2-106, MCA, does indeed apply to members of the Confederated Salish and Kootenai
Tribes who reside on the reservation, then Balyeat may be correct in arguing that
Lyle’s off-reservation transactions (which would then be imputed to Beverly)
constitute "substantial contacts" with the State so as to subject Beverly to the
jurisdiction of the state court. However, Balyeat fails to cite any legal authority or
provide any analysis to explain how or why § 40-2-106, MCA, applies to a tribal
member living on the reservation in the first instance or whether § 40-2-106, MCA,
somehow independently confers jurisdiction with the state court. It is our view that

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the off-reservation contacts engaged in by Lyle, cannot also be used to bootstrap
Beverly into state court when she herself has done nothing to submit herself to state
court jurisdiction. Rather, we must first determine whether § 40-2-106, MCA,
independently applies to members of the Tribes residing on the reservation. Only
then do Lyle’s contacts outside the reservation boundaries become relevant.

¶ We conclude that § 40-2-106, MCA, neither applies to Tribal members residing on
the reservation nor somehow independently confers the state court with jurisdiction.
A contrary holding would interfere with tribal sovereignty. As we elaborated
previously, the courts have repeatedly recognized "the Federal Government’s
longstanding policy of encouraging tribal self-government." Iowa Mutual Insurance
Company v. LaPlante (1987), 480 U.S. 9, 14, 107 S.Ct. 971, 975, 94 L.Ed.2d 10, 18
(citations omitted). Aspects of sovereignty include the tribe’s right to exercise
authority over not only its land but also its members. Iowa Mut. Ins. Co., 480 U.S. at
14, 107 S.Ct. at 975, 94 L.Ed.2d at 18 (The policy of encouraging tribal self-
government reflects the fact that Indian tribes retain "‘attributes of sovereignty over
both their members and their territory. . . .’")(citation omitted).

¶ This Court has also emphasized the sovereign right of tribes to govern members
who reside on the reservation, most recently in In re Marriage of Skillen. In that
case, we declined to jeopardize a tribe’s political integrity and its authority to
exercise exclusive jurisdiction over a resident Indian child in a domestic case, even
though the child may have significant off-reservation contacts through a non-Indian
parent. We stated that "sovereignty must include at least the right to exercise
authority over members within tribal boundaries." In re Marriage of Skillen, ¶ 61.
Furthermore, it is well-settled that tribes retain this sovereign right over tribal
members and their land where the Congress has failed to its assert its authority. As
we pointed out earlier in this opinion, the state courts may take no action that
undermines the authority of a tribe to govern itself. Williams, 358 U.S. at 220, 79 S.
Ct. at 271, 3 L.Ed.2d at 254; State ex.rel.Iron Bear, 162 Mont. at 346, 512 P.2d at
1299.

¶ In this case, there is no doubt but that forcing Beverly to defend herself in state
court pursuant to § 40-2-106, MCA, would infringe on the Tribes’ sovereignty over
its members and undermine its authority to govern its own affairs. Beverly is a tribal
member who has resided within the exterior boundaries of the Flathead Indian
Reservation her entire life. She works on the reservation for an entity owned by the

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Tribes, and all her assets are located on the reservation. She has done nothing
personally to avail herself of state law and state court jurisdiction; she has taken no
action by which she could have reasonably expected to be haled into state court.
Subjecting Beverly to a forum other than the one the Tribes established for
themselves risks the potential for conflicting judgments as to whether there is a
spousal agency between her and Lyle so as to render her liable for Lyle’s medical
debts. This in turn will result in a corresponding decline both in the authority of the
Tribes to enact their own laws governing the relationship between spouses for
purposes of liability and debt actions and in the authority of the Tribes to adjudicate
disputes involving their members residing on their land.

¶ Furthermore, as we pointed out earlier, pursuant to the 1968 Indian Civil Rights
Act, and §§ 2-1-301 through 2-1-306, MCA, the Montana courts have jurisdiction
only over those areas of law to which the tribal members expressly consent. As we
held earlier, the Tribes did not agree to extend jurisdiction to the state courts over
debt collection actions against a spouse who is a member of the Tribes residing on the
reservation pursuant to Public Law 280 or Tribal Ordinance 40-A (Revised).
Asserting state court jurisdiction over Beverly pursuant to an area of law to which
the Tribes did not consent, when Beverly herself took no steps to subject herself to
the state court’s jurisdiction, would essentially amount to an unlawful, unilateral
assumption of jurisdiction in violation of both state and federal law.

¶ In sum, we hold that the state court does not have jurisdiction over the action
against Beverly to collect the debts incurred by Lyle at Rittenour Medical Clinic,
because § 40-2-106, MCA, does not apply to members of the Tribes residing within
the external boundaries of the reservation or independently confer the state courts
with jurisdiction, and because Beverly did not engage in significant or substantial
contacts with the state outside the boundaries of the reservation.

B. Community Medical Center

¶ With regard to the transactions at Community Medical Center, Balyeat argues that
Beverly engaged in substantial off-reservation contacts so as to vest the state court
with jurisdiction over that portion of the debt collection action. Specifically, it
identifies a document signed by both Lyle and Beverly on February 7, 1992, which
pertains to at least some of Lyle’s medical bills at that institution. The document is
labeled "Community Hospital Inpatient Account Policies." The top portion of the

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document contains the heading "payment plans" and requests that the patient
choose from one of the payment plans listed. In this case, Lyle requested an extended
time payment plan. The document then outlines the finance charge applied after 60
days from the date the patient is discharged, along with other terms. The middle of
the document contains a box labeled "Release of Information - Financial Agreement
- Assignment of Insurance and Medicare Benefits." Among the terms printed in this
box, the document provides that "I also understand that I am responsible for all
charges incurred regardless of insurance or third party liability. . . ." and "Should I
not pay this account as due, I will be liable for any court, attorney or collection fees
incurred by Community Medical Center in collection of any balance due on the
account for services rendered."

¶ Balyeat characterizes this document as a contract, and argues that by signing it
along with Lyle, Beverly engaged in a commercial transaction which constitutes a
significant contact with the state. Beverly, on the other hand, states that it is not a
contract, and alternatively characterizes it as an "admission document" or an
"account stated." Although each party characterizes it in a light most favorable to
the argument it advances, neither party actually briefs the issue as to whether or not
it is a legal contract that obligates Beverly to pay for Lyle’s debts, and the record
contains no evidence explaining the document or describing the circumstances under
which it was signed.

¶ Similarly, the District Court simply referred to the document as a "financial
agreement for the payment of medical services provided to her husband," and stated
it was a "minimal off-reservation contact." However, it made no findings of fact
regarding the circumstances under which it was signed, and no conclusions of law as
to whether it was a binding contract subjecting Beverly to liability.

¶ Whether or not this document constitutes a binding off-reservation commercial
transaction entered into by Beverly is crucial to a determination as to whether her
signature on this document constitutes a significant contact. However, the Court is
unable to determine whether or not this document is indeed such a contract as
Balyeat suggests.

¶ As the plaintiff in this debt collection action, it is Balyeat who bears the burden of
proving that Beverly entered into a binding off-reservation contract to pay for Lyle’s
debts and that she thereby engaged in a significant contact with the state. It failed to

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carry this burden. It failed to develop a factual record below to explain the document
and the circumstances under which Beverly signed it, and it failed to cite and argue
legal authorities which would establish that the document on its face constitutes a
binding contract.

¶ Accordingly, this Court holds that Balyeat failed to prove that Beverly engaged in
significant off-reservation contacts so as to subject her to the state court’s
jurisdiction. We hold that the state court does not have jurisdiction over the action
against Beverly to collect the debts incurred by Lyle at Community Medical Center.

¶ Affirmed.

/S/ WILLIAM E. HUNT, SR.

We Concur:

/S/ W. WILLIAM LEAPHART

/S/ JAMES C. NELSON

/S/ TERRY N. TRIEWEILER

/S/ KARLA M. GRAY

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