Kenai Peninsula Borough v. English Bay Village Corp.

MOORE, Justice,

dissenting.

The court concludes that the trial court did not abuse its discretion in denying the Kenai Borough’s motion to set aside the default judgment. I would vacate the entry of default judgment under either of two alternative grounds and remand the case for trial.

The majority opinion’s factual recitation from the record is incomplete. So that the reader is able to fully understand and fairly evaluate my reasons for dissenting, I must set forth additional facts which, in my opinion, require a reversal of the trial court’s entry of a default judgment.

I.

In the late 1970s, English Bay entered into a series of contracts for the harvesting of timber on its lands. This resulted in the cutting of approximately 6 million board feet from 1978 through 1980. After 1980, English Bay undertook no further logging or development of those lands.

In 1981, the Borough began levying real property taxes on some of English Bay’s properties.1 English Bay failed to pay the taxes. Consequently, the Borough brought a foreclosure action. In Re Kenai Peninsula Borough 1982 Foreclosure Proceedings on Properties for the Real Property Taxes Delinquent for the Tax Year of 1981, 3KN-82-302 Civ. In August of 1982, the superior court awarded judgment and a decree of foreclosure in favor of the Borough. English Bay did not appeal. Subsequently, the Borough obtained two additional foreclosure judgments on other English Bay properties in 3KN-83-334 Civ. and 3KN-84-139 Civ., covering tax years 1982 and 1983.

The Borough claims that during this entire time it strictly complied with the elaborate statutory procedures for giving notice of the delinquencies and foreclosures.2 English Bay never claimed otherwise.

Although the Borough could have received deeds to the properties on January 3, 1984, pursuant to the first foreclosure action, the Borough granted English Bay an extension until July 1 to pay the taxes and avoid losing the properties. English Bay continued to do nothing in the three foreclosure actions, and it never appealed.

On June 26, 1984, English Bay sent the clerk of court copies of the summons and complaint in the present action, to be filed and then sent to the Borough’s attorney by certified mail. However, there is no additional evidence that filed copies of the com*13plaint and summons were actually served on the Borough. In an affidavit, the Borough’s attorney stated that he received in a certified envelope from English Bay’s attorney

a copy of what was apparently a proposed complaint ... [that] did not contain a court caption or show any evidence that it had been filed. The document was not accompanied by a summons or any other correspondence indicating that a suit had been actually filed.

The Borough’s attorney assumed the un-filed complaint was nothing other than a negotiating ploy, since he was actively negotiating with English Bay’s attorney regarding the earlier foreclosure actions.

A month later, the Borough’s attorney signed a stipulation in the 1982 foreclosure action, 3KN-82-302 Civ., that refers to the present action by name. However, the action number was left blank and was written by hand at a “point much later in time.” The stipulation provided that the Borough would extend English Bay’s redemption period until August 30, 1984, in the foreclosure action, and the Borough would get a similar extension of time to file an answer in the present case.

On October 16, 1984, the superior court issued a preliminary injunction enjoining the Borough from pursuing foreclosure proceedings. The usual clerk’s certification was absent from the face of the document. Instead, a penned notation indicates that a copy was sent to “KPB” — the defendant. The notation was not signed or initialed. In his affidavit, the Borough’s attorney claims he did not receive the copy of the injunction.

English Bay applied for a default. There is no evidence that English Bay’s attorney or the court clerk served the application on the Borough, or that either inquired whether the Borough’s attorney intended to proceed. Nevertheless, on November 26, 1984, the clerk entered a default against the Borough. The clerk’s dated and initialed certification appears on the order. The certification states that a copy was sent to “KPB” — the Borough. In his affidavit, the Borough’s attorney claims he did not receive it.

Meanwhile, for almost a year, the Borough continued to send tax foreclosure notices to English Bay, behaving as if it had no knowledge of the injunction against the Borough. The Borough’s attorney claims that he did not become aware of the lawsuit, injunction, and default until August of 1985, when he received from English Bay copies of the relevant documents and a letter asking the Borough to stop sending further tax foreclosure notices.

For seventeen months after entry of default, English Bay took no action in this case and did not seek a default judgment. Finally, the clerk sent the parties a Notice and Order of Dismissal for Lack of Prosecution pursuant to Civil Rule 41(e). The notice stated: “If good cause to the contrary is not shown within 33 days of the mailing of this notice, this action will be dismissed without further notice.... ” The date of mailing is indicated on the face of the document as May 8, 1986 — a Thursday.

The thirty-three days lapsed on June 10, 1986 — a Tuesday. English Bay had taken no action to prevent dismissal. However, on June 9 or 10, English Bay’s attorney called the court clerk’s office to find out whether the action would be dismissed on the 10th. He spoke with a staff person who stated that the court was busy and would not have a chance to review files to dismiss cases for want of prosecution until at least the end of the week. Based on this conversation, English Bay’s attorney concluded that the case would not be dismissed on June 10. He sent an application for default judgment to the court by regular mail on June 10. The court received and filed the application on June 13, 1986, three days after the thirty-three day limit expired.

Meanwhile, the Borough justifiably believed the case would be dismissed on the thirty-third day, as the court’s Notice and Order of Dismissal plainly stated. The deputy borough attorney personally checked the court’s file on this case on June 12 and found that English Bay had filed nothing during the thirty-three day *14period. The Borough then moved the court to dissolve the 1984 injunction at the same time it dismissed the case. The Borough mailed that motion to English Bay on June 13 and filed it with the court on Monday, June 16, 1986. This was the first time the Borough submitted anything to the court or plainly acknowledged this lawsuit.

Upon learning of English Bay’s application for default judgment, the Borough moved the court to deny it and dismiss the case. That motion was grounded solely on English Bay’s failure to respond timely to the..court’s Notice and Order of Dismissal. The Borough did not state or preserve its defense of lack of proper service. English Bay filed memoranda opposing the Borough’s motion to dismiss and requested oral argument. Without permitting oral argument, the superior court issued judgment in favor of English Bay on July 22, 1986, and awarded $10,000 in attorney’s fees.

The judgment declared that the Borough violated ANCSA by taxing lands which had been logged in prior tax years but were left untouched thereafter. It also declared that the Borough’s 1982 foreclosure judgment void since the taxation was illegal and the judgment was obtained “without providing adequate notice to English Bay.” Furthermore, the judgment permanently enjoined the Borough from pursuing foreclosure proceedings against English Bay for the tax years 1982 and 1983.3

At that point, the Borough inexplicably allowed the thirty-day appeal period to lapse without filing an appeal. Three weeks after the appeal period lapsed, the Borough filed a motion to set aside the default judgment pursuant to Civil Rules 55(e) and 60(b); The Borough argued for relief under subparagraphs (1), (3), and (4) of Civil Rule 60(b). It also presented three defenses which it considered meritorious: lack of proper service,4 res judicata, and proper taxation on the merits.

After oral argument, the superior court denied the Borough’s motion. The court did not reach the question whether the Borough’s defenses were meritorious. Rather, it found that the requirements of Civil Rule 60(b)(1), (3), and (4) were not satisfied.

The Borough appeals from that denial, arguing that (1) Civil Rule 41(e) required the superior court to dismiss this case for lack of prosecution exactly thirty-three days after it issued its Notice and Order of Dismissal, and the court had no discretion to relax the thirty-three day rule;5 (2) pursuant to Civil Rule 55(g), a default judgment should not be permitted against political subdivisions of the State;6 (3) the default judgment violated Civil Rule 24(c) in that it found a statute unconstitutional without giving notice to the State;7 and (4) the judgment is void.

II.

A. Dismissal Pursuant to Alaska R.Civ.P. 41(e)

The Borough argues that Civil Rule 41(e) required the superior court to dismiss this case for lack of prosecution exactly 33 days *15after it issued its Notice and Order of Dismissal and the superior court had no discretion to relax the 33 day rule.8 Civil Rule 41(e) specifically states that “[i]f good cause to the contrary is not shown at a call of the calendar or within 33 days of mailing of a notice to show cause in writing, the action shall be dismissed.” (Emphasis added). Yet the superior court for some unknown reason completely disregarded the plain words of its own Notice and Order of Dismissal. The superior court’s failure to abide by its own order clearly created considerable confusion between the parties. If the court’s order did not mean what it said, then it should not have been issued in the first place.

Consequently, in my view the case was dismissed by operation of law after 33 days.9 See Champion Oil Co., Inc. v. Herbert, 552 P.2d 670, 672 (Alaska 1976) (automatic dismissal). Although it may have been proper for English Bay to move to reopen the case pursuant to Civil Rule 77, any other proceedings, including the court’s entry of default judgment, that occurred in the absence of such a motion should have been declared null and void. However, because the Borough failed to appeal the trial court’s entry of default judgment within the 30-day period, I agree with the majority that this error of law alone would not normally be a ground for relief.

B. The Default Judgment Was Improper in That It Found a Statute Unconstitutional without Giving Notice to the State

Civil Rule 24(c) provides in part:

When the constitutionality of a state statute affecting the public interest is drawn in question in any action to which the state or an officer, agency, or employee thereof is not a party, the court shall notify the Attorney General of Alaska of such fact, and the staff shall be permitted to intervene in the action.

The Borough argues that a default judgment was improper because (1) English Bay’s complaint specifically questioned the constitutionality of state statutes regarding notice in foreclosure proceedings, (2) the court did not notify the Attorney General, and (3) the court’s default judgment impliedly found the statutes unconstitutional. Under Civil Rule 60(b)(1), (2) and (3), these arguments have little to do with mistake, inadvertence, surprise, excusable neglect, newly discovered evidence, or fraud. Nonetheless, the trial court’s failure to notify the attorney general would be serious enough to void a judgment under Civil Rule 60(b)(4) if actual prejudice could be shown. The judgment here clearly resolves the substantive issues of the case, stating:

[T]he Kenai Peninsula Borough violated § 21d of ANSCA, as amended.... [T]he August 11, 1982, Judgment and Decree of Foreclosure entered against English Bay Corporation is void and unenforceable, since it was obtained after illegal taxation and without providing adequate notice to English Bay....

The parties do not dispute that the Borough followed the statutory notice provisions precisely. Yet, for some unexplained reason the superior court held the notice statutes unconstitutional as applied to English Bay.10 In my view, the superior court’s entry of the default judgment on this basis was clearly prejudicial to the state’s interest.

*16Again, because the Borough failed to appeal within the statutory period, this error of law alone would not normally be a ground to set aside the default judgment.

C. The Judgment Is Void

The Borough’s most serious argument is that the judgment is void due to lack of personal jurisdiction. As this court stated in Aguchak v. Montgomery Ward Co., 520 P.2d 1352, 1354 (Alaska 1974) (footnote omitted):

A judgment is void and subject to attack under F.R.Civ.P. 60(b)(4) if the court that rendered it lacked personal jurisdiction over the defendant.... Although under other subsections of Rule 60(b) the mov-ant must show that denial of the motion below was an abuse of discretion in order to prevail on appeal, no question of the lower court’s discretion is presented by a Rule 60(b)(4) motion because the validity of a judgment is strictly a question of law. Nor need the movant show that he could present a meritorious defense in a subsequent proceeding, again because a void judgment is entitled to no respect whatever.

I would reverse the trial court on the ground that the judgment was void due to lack of personal jurisdiction. Under Federal Rule of Civil Procedure 60(b)(4), the wording of which is identical to Alaska Civil Rule 60(b)(4), a judgment is void and subject to attack if the court that rendered the judgment lacked subject-matter jurisdiction or personal jurisdiction or if it otherwise “involves a plain usurpation of power.” 7 J. Moore & J. Lucas, Moore’s Federal Practice II 60.25[2], at 60-225 to 60-229 (2d ed. 1985). Following those guidelines, a reviewing court must first examine whether the superior court had personal jurisdiction over the Borough in the present case.11

Proper service is one way a court can legally obtain personal jurisdiction over a defendant. In the present case, English Bay attempted to serve process on the Borough. However, for the reasons stated below, the attempted service of process was inadequate.

First, service on a public corporation such as the Borough must be made “by delivering a copy of the summons and of the complaint to the chief executive officer or chief clerk or secretary thereof.” Alaska R.Civ.P. 4(d)(9). English Bay claims only to have served the Borough’s attorney. It does not claim to have ever served Borough Mayor Stan Thompson or Borough Clerk Joanne Brindley.

The analogous Federal Rule of Civil Procedure 4(d)(6) allows service upon a municipal corporation only by delivering a copy of the summons and the complaint to the chief executive officer, or as otherwise allowed by state law. Under the federal rule, service is invalid “if process is delivered to one who is not the ‘chief executive officer’ of the entity.” 2 J. Moore & J. Lucas, supra ¶ 4.30, at 4-251 (2d ed. 1986). Given the public importance of lawsuits against boroughs and other public corporations, I favor the same strict interpretation of Alaska Civil Rule 4(d)(9). Here, I do not consider English Bay’s error to be minor. English Bay’s attempted service on the Borough was legally insufficient.

Second, pursuant to Civil Rule 4(d)(9), service upon a borough cannot be accomplished by mail.12 The rule plainly states that process must be “delivered.” Under Federal Rule of Civil Procedure 4(d)(6), “delivery” means personal delivery by one au*17thorized to serve process; mail service is insufficient. 2 J. Moore & J. Lucas, supra, ¶ 4.30, at 4-252; 4A C. Wright & A. Miller, Federal Practice and Procedure § 1109, at 172 (1987); see also Cambridge Mut. Fire Ins. Co. v. City of Claxton, Georgia, 720 F.2d 1230 (11th Cir.1983). I see no reason to construe Alaska’s rule differently. Although mail service is allowed on “corporations” pursuant to Alaska Civil Rule 4(h),13 I interpret “corporations” in Civil Rule 4(h) as excluding public corporations, since “corporations” and “public corporations” are treated differently under Rule 4(d). Since English Bay alleges no service on the Borough other than by mail, its service was invalid.

Third, the Borough claims that it never received any summons whatsoever, and also never received a complaint that had been filed by the court. In an affidavit, the Borough’s attorney admits he received an unfiled copy of a complaint (without a case number), but he assumed it was nothing more than a negotiating threat in the various pending foreclosures. Although English Bay’s affidavits on this point are confusing, they do not seem to contradict the Borough’s attorney. The affidavits indicate that a legal secretary in the office of English Bay’s attorney either mailed or delivered copies of the summons and complaint to the court clerk, to be filed and then mailed to the Borough’s attorney. There is no separate affidavit showing exactly what was mailed to the Borough or when. An envelope was mailed to and received by the Borough’s attorney, as evidenced by a certified mail return receipt. However, English Bay presented no evidence of the contents of that envelope.14 Thus, taking the assertions of the Borough’s attorney at face value, it seems that no proper summons and complaint were ever served.

Even without proper service of process, Alaska courts can acquire personal jurisdiction over a defendant if the defendant makes an appearance. Alaska Statute 09.-05.010 provides: “The voluntary appearance of the defendant is equivalent to the personal service of a copy of the summons and complaint upon the defendant.” 15

The Borough undertook three actions that conceivably could be regarded as voluntary appearances sufficient to confer personal jurisdiction in this action: (1) On July 30, 1984, the Borough’s attorney signed a stipulation in the 1982 foreclosure action (not the present case) that refers to the present action by name. (2) On Juné 16, 1986 — three days after the Borough believed the court would automatically dismiss this case pursuant to Civil Rule 41(e) —the Borough filed a motion to amend the court’s order of dismissal by adding a provision that would dissolve the preliminary injunction against the Borough. In this motion, the Borough did not explicitly make or preserve its defense of lack of *18personal jurisdiction.16 (3) On June 23, 1986, the Borough moved to dismiss the case on the ground that English Bay did not timely respond to the court’s notice to show cause. Again, the Borough did not explicitly preserve its defense of lack of personal jurisdiction.

English Bay also argues that the Borough made a voluntary appearance pursuant to AS 09.05.010 on July 30, 1984, when the Borough attorney signed a stipulation in the 1982 foreclosure action, 3KN-82-302 Civil, that refers to this present action by name. The majority makes reference to this stipulation as being a relevant fact, but does not further embellish on its significance.17 However, since the superior court’s rulings on these post decree motions were influenced in part by this stipulation which shows “the Borough’s awareness” of this pending action, I now address these arguments.

The term “appearance” in AS 09.05.010 refers to personal jurisdiction: the voluntary appearance operates as a substitute for service of process so as to confer personal jurisdiction over the defendant. Many of the cases relied upon by English Bay and the majority involve situations in which the party had been served with process but had not answered.18 In our case, the defendant Borough was never properly served. Since service of process or a voluntary appearance represent the formal initiation of a lawsuit, courts have adopted bright line rules governing these procedures. For example, for service on a public corporation, Alaska Civil Rule 4(d)(9) requires service on the chief executive officer or chief clerk or secretary. These special rules were adopted to prevent precisely the type of mishaps presented in this case.

State courts in other jurisdictions have rejected the idea that an agreement or stipulation extending time to plead or to answer constitutes an appearance for purposes of personal jurisdiction. See generally Annotation, Stipulation Extending Time to Answer or Otherwise Proceed as a Waiver of Objection to Jurisdiction for Lack of Personal Service: State Cases, 77 A.L.R.3d 841, 853-59 (1977 & Supp.1987); Annotation, Appearance to Make Application for Extension of Time or Continuance, or Order in that Regard, as Waiver of Objection to Jurisdiction for Lack of Personal Service, 81 A.L.R. 166, 169 *19(1932). Most courts conclude that such a stipulation is insufficient evidence of a party’s intent to submit to the jurisdiction of the court.19 As the California Supreme Court stated in Busching v. Superior Court, 12 Cal.3d 44, 115 Cal.Rptr. 241, 524 P.2d 369, 373 (1974):

A party who merely seeks an extension of time to plead cannot reasonably be deemed to make a general appearance. His purpose may be to obtain adequate time to determine whether or not to object to the jurisdiction of the court.

(Citations omitted).20 In construing a statute similar to AS 09.05.010, the Oregon Supreme Court held that an unfiled oral stipulation extending time for the defendant to answer did not constitute an appearance. Thoenes v. Tatro, 270 Or. 775, 529 P.2d 912, 917 (1974). The court in Thoenes noted:

[I]n the absence of an estoppel the jurisdiction of the court should not be held to attach for any purpose until the defendant has in some way used the machinery of the court to serve his ends. A motion for an extension Of time would, of course, constitute such use. And a stipulation between the parties for an extension of time, if filed with the court, could be deemed a use of the court’s processes.

(Footnotes omitted; emphasis added). See also Charette v. Eisenbraun, 274 Or. 491, 547 P.2d 612, 613 (1976); State ex rel. Karr v. Shorey, 30 Or.App. 137, 567 P.2d 118, 121 (1977).

In this case the Borough entered into a stipulation with English Bay extending the redemption period for certain property foreclosed upon by the Borough as long as surety bonds were posted. The stipulation was filed with the court under the case heading “In Re Kenai Peninsula Borough 1982 Foreclosure Proceeding on Properties for the Real Property Taxes Delinquent, for the Tax Year of 1981 (Civil Action No. 3KN-82-302 Cl).” In addition, the stipulation stated “[tjhat for and in consideration of the extension of the redemption period stated above, it is hereby agreed that a Stipulation will be executed and filed in the action styled English Bay Corporation v. Kenai Peninsula Borough, case no. 3KN M-563CJ, allowing the Kenai Borough a similar extension of time until the 30th day of August, 1984, to answer the pleadings on file therein.” This stipulation was never executed. Since the existing stipulation was filed in another matter and only referred to a future stipulation, it cannot be regarded as submission to the court’s jurisdiction in this case.

While the stipulation arguably indicates the Borough was aware of the' present action, such awareness is irrelevant to whether the court had personal jurisdiction over the Borough.21 When a court can legally obtain personal jurisdiction over a defendant, it does so either when process is properly served — an affirmative act of the court to establish its power over the defendant — or when the putative defendant *20makes a voluntary appearance or otherwise affirmatively submits to jurisdiction. Mere awareness is too nebulous a concept to constitute a suitable test for personal jurisdiction.22

I agree with the majority that the Borough’s June 16, 1986, motion to the court constituted a voluntary appearance which, pursuant to AS 09.05.010, is equivalent to personal service. In making that motion, the Borough recognized that the case had not been dismissed pursuant to Civil Rule 41(e), and argued that it should be. The June 16 motion was a deliberate submission to the court’s power.

However, while the court had jurisdiction over the Borough on June 16, it erred in granting default judgment to English Bay because the court did not have before it a valid entry of default.23 First, English Bay never served notice of entry of default on the Borough as required by Civil Rule 55(a)(2). Second, the entry of default on November 24, 1984, was invalid since the court did not have jurisdiction over the Borough. Third, no default had yet occurred as of June 16, 1986, and English Bay’s application for entry of default and for a default judgment was not ripe for any judicial decision on the merits.

The majority holds that taking a default judgment without notice of default under Civil Rule 55(c)(1) should not ordinarily be regarded as rendering the underlying judgment void. However, the treatise cited by the court for this proposition also cites several federal cases in which failure to give notice combined with other procedural irregularities was held sufficient to vacate the judgment.24 In light of all the procedural irregularities in this case,25- failure to give notice of the application for default should be grounds to hold the judgment void.

The majority view states that “the dissent’s conclusion that there was no valid application for a default is dubious.” To the contrary, it is the majority that reaches the illogical conclusion that the June 16, *211986, appearance resurrects or cures the invalid November 13, 1984, application for entry of default. This conclusion is farcical because under Civil Rule 12(a) a default did not even exist until twenty days after the Borough appeared and failed to answer the summons and complaint. An application for entry of default cannot be valid on June 23 when the default itself could not have occurred until July. See Alaska R.Civ.P. 55(a). Alaska Statute 09.05.010 specifically states that an appearance “is equivalent to personal service of a copy of the summons and complaint upon the defendant.” (Emphasis added). What then does the word “equivalent” mean? According to Webster’s New World Dictionary, Second College Edition, it means equal in meaning, power, substance and value. Therefore", this lawsuit must proceed under the normal operation and requirements of the civil rules.26 By appearing, the defendant does not consent to the validity of proper service of all previously filed motions and orders.27

Thus, the majority reaches the impossible conclusion that when the trial court granted the default judgment on July 22, 1986, it had before it a valid application for entry of default as well as for a default judgment.28

Even assuming that the entry of default was defective, the majority concludes that the trial court did not err in entering a default judgment without first entering a default. The court cites a number of federal authorities for the proposition that entry of default is largely a formality. These cases are clearly inapplicable to our rule.

*22Unlike the federal rule, Alaska Civil Rule 55(c)(2) contains the following sentence: “When application is made to the court for a default judgment, counsel shall file a memorandum of the default, showing when and against what parties it was entered....” I interpret this sentence as providing that, in Alaska state courts, (1) a valid entry of default must precede a default judgment by the court, and (2) a litigant cannot apply for a default judgment prior to the time that the opposing party has committed the default.

Both of these requirements were violated in this case. First, the court issued the default judgment without a prior valid entry of default. Second, since the court first obtained personal jurisdiction over the Borough on June 16, 1986, when the Borough made a voluntary appearance, the Borough could not have committed any default until twenty days later, in July. See Alaska R.Civ.P. 12(a). English Bay never subsequently applied for a default or a default judgment. Nor did they serve notice of such applications on the Borough. Since no default had yet occurred, English Bay’s earlier applications were nullities.

I would therefore conclude that the superior court plainly usurped its power by issuing a default judgment in the absence of a prior valid entry of default, without valid applications for entry of a default or a default judgment, and in direct violation of AS 09.05.010. Cf. SEC v. Seaboard Corp., 666 F.2d 414, 415, 417 (9th Cir.1982) (default judgment which the court entered for refusal to pay discovery sanction was punitive, not “founded on an exercise of the court’s inherent power,” and void); Compton v. Alton S.S. Co., 608 F.2d 96, 106 (4th Cir.1979) (default judgment resulting from erroneous application of statute was void). Under these circumstances, the default judgment against the Borough is void. Therefore, the court should have set it aside under Civil Rule 60(b)(4).

III.

Alternatively, I would reverse the trial court’s judgment and set aside the default judgment on the grounds that the trial court abused its discretion in not invoking Civil Rule 94 to allow a trial on the merits. Civil Rule 94 provides:

These rules are designed to facilitate business and advance justice. They may be relaxed or dispensed with by the court in any case where it shall be manifest to the court that a strict adherence to them will work an injustice.

This case begs for relief under this rule. Through a veritable extravaganza of procedural snafus and foul-ups, important issues of public policy involving taxation of native lands and the constitutionality of state foreclosure notice statutes were decided on no more than the mere allegations in English Bay’s complaint filed some five years ago. Basic fairness and proper adherence to the requirements of the Alaska Rules of Civil Procedure were ignored or disregarded. These errors were not limited to the parties; they were compounded and exacerbated by the trial court and the clerk of court as well. A state statute providing for notice in foreclosure proceedings was held unconstitutional without the superior court informing the Attorney General of Alaska as required by Civil Rule 24. The superior court failed to follow its own order and dismiss the case for lack of prosecution after the thirty-three day period had run. The superior court erred in entering a default judgment in the absence of a valid entry of default by the clerk of court. When the Borough actually did appear on June 16, 1986, pursuant to AS 09.05.010, but before the Borough was required to answer, the superior court granted English Bay’s premature motion for a default judgment without permitting a mandatory hearing of oral argument by either party.

Looking at the record as a whole, I perceive mass confusion among the parties— confusion substantially caused in part by the superior court’s failure to abide by the plain wording of its own Notice and Order of Dismissal pursuant to Civil Rule 41(e).

Second, I have identified at least three serious errors of the superior court that go beyond mere misinterpretations of law. First, the court held a state statute unconstitutional without first notifying the attor*23ney general. Second, the court issued a default judgment without a prior entry of default and without valid applications for default and default judgment. Third, the superior court failed to comply with the procedural mandate of AS 09.05.010 and the corresponding Civil Rules 4(d)(4); 5(a); 6(a), (c); 12(a); 12(h)(1)(B); 55(a)(2); 77(c)(4)(d), (e), and (f). In fact, the superior court offers no reasons at all for disregarding the proper application of the aforementioned rules of civil procedure. If this kind of action by the superior court is not a usurpation of power, then what is?

Third, I note that English Bay would suffer no prejudice from setting aside the default judgment.29 The record does not show that any discovery has occurred or that any evidence has been presented. Little time or money would have been wasted.

Fourth, while I usually respect the finality of judgments, to let this default judgment stand is to render meaningless at least one, if not three, earlier final judgments obtained by the Borough that were never appealed.30

Fifth, the claims raised by English Bay involve serious questions of federal and state law. One such question is whether state statutory foreclosure notice requirements, as applied to a remote village corporation such as English Bay, are consistent with the due process clauses of the federal and state constitutions. Another is under what circumstances village corporation lands are subject to local real property taxes.

Finally, after examining the record and the Borough’s brief, I am persuaded that its defenses of res judicata and proper taxation on the merits are meritorious. We have stated: “The meritorious defense requirement demands ‘something more than a perfunctory statement that a meritorious defense exists. The defaulting party may be required to demonstrate ... that there is a factual or legal basis for the tendered defense.’ ” Hertz, 704 P.2d at 772 (quoting 6 J. Moore, supra, if 55.10(1) at 53 n. 14 (2d ed. 1983). This the Borough has done. I am convinced that directing the superior court to reopen the proceedings will not be a waste of time or judicial resources. However, I do not imply that those defenses will ultimately prevail, which of course would be determined by the superior court upon remand.

IV.

In conclusion, I would reverse the court on two alternative grounds: (1) the default judgment was void under Civil Rule 60(b)(4), since the superior court plainly usurped its power by issuing a default judgment in the absence of a prior valid entry of default due to lack of personal jurisdiction over the Borough, and because no valid application for entry of a default, or a default judgment, was ever made by English Bay pursuant to Alaska Rules of *24Civil Procedure after the Borough actually first appeared in this lawsuit on June 16, 1986, pursuant to AS 09.05.010; or (2) that the. superior court clearly abused its discretion by not sua sponte applying Civil Rule 94 so as to relax the rules and correct the morass of procedural confusion prevalent throughout the proceedings in this case. I would reverse and remand to the superior court for a trial on the merits.

. Village corporation lands conveyed pursuant to ANCSA are not subject to local real property taxes unless they are "developed or leased." 43 U.S.C. § 1620(d)(1); see also AS 29.53.020(a)(9), (k)(l) (further defining "developed” as the term is used in 43 U.S.C. § 1620(d)(1)). The Borough evidently believed that the lands it was taxing were "developed or leased.” English Bay contends that many of the taxed parcels were never logged or otherwise developed.

. The procedures required at that time were set forth in AS 29.53.010-29.53.390 (repealed by ch. 74, § 88, SLA 1985).

. The court seems to have been unaware that the proceedings had resulted already in judgments in favor of the Borough and that English Bay failed to appeal these judgments in a timely manner.

. Lack of personal jurisdiction could be both a meritorious defense and a ground for relief under 60(b)(4).

. Until amended by Supreme Court Order 834 effective August 1, 1987, Civil Rule 41(e) stated: “If good cause to the contrary is not shown at a call of the calendar or within 33 days of mailing of a notice to show cause in writing, the action shall be dismissed.” The Borough's argument is based on the use of the word "shall” in the rule.

. Alaska R.Civ.P. 55(g) provides: "No default judgment shall be entered against the state or an officer or agency thereof unless the claimant establishes the claim or right to relief by evidence satisfactory to the court.” The Borough urges us to "extend Rule 55(g) and apply it to political subdivisions of the state.”

. Alaska R.Civ.P. 24(c) provides in part:

When the constitutionality of a state statute affecting the public interest is drawn in question in any action to which the state or an officer, agency, or employee thereof is not a party, the court shall notify the Attorney General of Alaska of such fact, and the staff shall be permitted to intervene in the action.

. In my view, the argument was raised below, albeit briefly.

. At oral argument, English Bay’s attorney contended that he mailed his motion for default judgment on June 10, 1986 — the 33rd day after the court’s order to show cause. English Bay contends that its motion was actually made on the day it was mailed, pursuant to Civil Rule 5(b) which states: "Service by mail is complete upon mailing.” However, English Bay is confused. "Service” in Rule 5(b) refers to the transmittal of papers to the other party, not the court. Rule 5 does not say that filing by mail is complete upon mailing. In fact, English Bay’s motion does not indicate whether service on the Borough was ever accomplished.

.Civil Rule 24(e) does not distinguish between whether a statute is challenged as facially unconstitutional or unconstitutional as applied. I see no reason why Rule 24(e) should not apply to both types of challenges.

. The parties do not dispute that the superior court had subject-matter jurisdiction in this suit.

. Alaska R.Civ.P. 4(d) states in part:

The summons and complaint shall be served together_ Service shall be made as follows:
(4) Corporations. Upon a domestic or foreign corporation, by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process.
(9) Public Corporation. Upon a borough or incorporated city, town, school district, public utility district, or other public corporation in the state, by delivering a copy of the summons and of the complaint to the chief executive officer or chief clerk or secretary thereof.

.Alaska R.Civ.P. 4(h) states:

Service of Process by Mail. In addition to other methods of service provided for by this rule, process may also be served within this state or the United States or any of its possessions by registered or certified, mail upon an individual other than an infant or an incompetent person and upon a corporation, partnership, and unincorporated association. In such case, copies of the summons and complaint or other process shall be mailed by the clerk for restricted delivery only to the party to whom the summons or other process is directed or to the person authorized under federal regulation to receive his restricted delivery mail. All receipts shall be so addressed that they are returned to the party requesting the summons or process or his attorney. Proof of service shall be made by affidavit forthwith. Service of process by mail under this paragraph is complete when the return receipt is signed.

. The complaint and summons are in the appellate record, but they contain no notation or clerk’s certification showing that they were mailed to the Borough.

. Alaska R.Civ.P. 12(h) parallels this statutory language, stating:

A defense of lack of jurisdiction over the person, improper venue, insufficiency of process, or insufficiency of service of process is waived (A) if omitted from a motion in the circumstances described in subdivision (g) [entitled “Consolidation of Defenses in Motion” ]; or (B) if it is neither made by motion under this rule nor included in a responsive pleading or an amendment thereof permitted by Rule 15(a) to be made as a matter of course.

. On the other hand, why did the Borough even need to preserve its defense of lack of personal jurisdiction? This motion for post dismissal relief was confined to a singular and ' limited issue, namely the dissolving of a preliminary injunction. This kind of motion could best be described as a “clean up or clarifiction request" as to the scope of the order of dismissal issued pursuant to Civil Rule 41(e). All of the other questions of law that concerned the parties had disappeared and become moot by judicial order of dismissal which ended the lawsuit. Thus, the Borough was not required to preserve its defense of lack of personal jurisdiction because this lawsuit had not yet procedurally been resurrected from the dead. Procedurally, this lawsuit could only have been revived either by (1) the filing of a motion for reinstatement of the case by the court, which if granted would require that the court enter another order vacating the dismissal for good cause shown, or (2) the filing of a brand new lawsuit with a new complaint and a summons issued by the clerk of court accompanied by proper service on the Borough as required by Civil Rule 4(d)(6) and (9).

. The majority opinion states: "In any case by July 27, 1984, Boedeker knew a complaint had been filed and that an answer was due." This statement is simply incorrect. Boedeker denied that the complaint he received showed it was ever filed with the clerk of court before it was mailed to him. Thus, on this date or any time thereafter, until June 16, 1986, the Borough never had been properly or legally served the summons and complaint pursuant to the Civil Rules. No personal jurisdiction ever attached over the Borough in the interim. Neither a formal answer nor any other responsive pleading was due or required. Boedeker's awareness did not obligate him to answer a complaint against the Borough which had never been validly served on its chief executive officer, chief clerk or secretary thereof.

. Lutomski v. Panther Valley Coin Exchange, 653 F.2d 270, 270 (6th Cir.1981); Turner v. Salvatierra, 580 F.2d 199, 200 (5th Cir.1978); Charlton L. Davis & Co. v. Fedder Data Center, Inc., 556 F.2d 308, 310 (5th Cir.1977); Heleasco Seventeen, Inc. v. Drake, 102 F.R.D. 909, 910 (D.Del. 1984); Segars v. Hagerman, 99 F.R.D. 274, 275 (N.D.Miss.1983); United States v. Manos, 56 F.R.D. 655, 659 (S.D.Ohio 1972); Dalminter, Inc. v. Jessie Edwards, Inc., 27 F.R.D. 491, 491 (S.D. Tex.1961); Gazin v. Hoy, 730 P.2d 436, 437 (Nev. 1986); Simonson v. Sittner, 82 N.W.2d 78, 78 (N.D.1957); Peterson v. McMillan, 70 S.D. 56, 14 N.W.2d 97, 97 (1944).

. See Busching v. Superior Court, 12 Ca!3d 44, 115 Cal.Rptr. 241, 524 P.2d 369, 373 (1974); Holtkamp v. States Marine Corp., 165 Cal.App.2d 131, 331 P.2d 679, 681-82 (1958); Paulson v. Faas, 171 So.2d 9 (Fla.App.1965); Higgins v. Beckwith, 14 S.W. 931 (Mo.1890); Rando v. Impresa Navigazione Commercialle S.A, 9 Misc.2d 576, 173 N.Y.S.2d 375 (1957); Aloisi v. Deaton, 34 Misc.2d 116, 226 N.Y.S.2d 176 (1962); Maushart v. Kelly, 10 A.D.2d 630, 196 N.Y.S.2d 935 (1960); Templeman v. Hester, 65 Ohio App. 62, 29 N.E.2d 216 (1940); Thoenes v. Tatro, 270 Or. 775, 529 P.2d 912, 917 (1974); Charette v. Eisenbraun, 274 Or. 491, 547 P.2d 612, 613 (1976); State ex rel. Karr v. Shorey, 30 Or.App. 137, 567 P.2d 118, 121 (1977); Tierney v. Bulletin Co., 19 Pa.D & C2d 81 (1958); Klatte v. McKeand, 78 S.E. 712 (S.C.1913); Simpson v. East T., V. & G. R. Co., 89 Tenn. 304, 15 S.W. 735 (1890). Contra Annotation, 77 A.L.R.3d at 847-53; Annotation, 81 A.L.R. at 166-69.

. See also Benny v. Pipes, 799 F.2d 489, 493 (9th Cir.1986) ("[gjenerally, a motion to extend time to respond gives no hint that the answer will waive all jurisdictional defects, and is probably best viewed as a holding maneuver while counsel consider how to proceed.”).

. The superior court incorrectly based its denial of the Borough’s motion to set aside the judgment in part on the Borough’s awareness of this action. The court stated:

The Borough was aware of this suit apart from the service of the Summons and Complaint. This awareness is shown by the stipulation filed in the lien foreclosure case for extension of time to answer this suit.

. The superior court also based its decision partly on the Borough's failure to file a Civil Rule 12(b) motion challenging personal jurisdiction prior to making a voluntary appearance in June of 1986. The court believed that by not filing such a motion the Borough waived the defense of lack of jurisdiction. I disagree.

Prior to the time a putative defendant receives proper service of process or makes a voluntary appearance, the defendant has no obligation to file a motion challenging jurisdiction, or to do anything, because the court has not yet acquired personal jurisdiction over him or her. Under the analogous federal rule, "until a defendant is properly served with original process he has no duty to answer or make other motions.” 2 J. Moore & J. Lucas, supra, ¶4.09 at 4-119. The same holds true under the Alaska civil rules.

. I disagree with the majority that the Borough did not satisfactorily raise the issue that the entry of default was invalid for lack of service. In its motion to set aside the default judgment, the Borough argued

A judgment is void if a court that rendered it lacked personal jurisdiction over the defendant. As discussed above, under meritorious defenses, since Defendant did not, and never has, received service of process in this case, there is no personal jurisdiction over Defendant, and therefore the default judgment is void.

This argument necessarily includes the contention that the court lacked personal jurisdiction over the defendant at the time of entry of default as well as when the court entered the judgment. The fact that the court gained personal jurisdiction through an appearance before entry of the judgment does not void the Borough’s underlying argument that the court lacked personal jurisdiction before that time because of lack of service.

. The majority argues that the Borough failed to raise the issue that the judgment was void on the grounds it involved a plain usurpation of power. The Borough clearly argued on appeal that the judgment was void under Rule 60(b)(4). Put simply, usurpation or not, a void judgment is a void judgment. See 6 J. Moore & J. Lucas, supra, ¶ 55.05[3], at 55-30 n. 18 (citing Winfield Assoc. Inc. v. Stonecipher, 429 F.2d 1087, 1091 (10th Cir.1970)), ¶ 55.09, at 55-49 (citing Bass v. Hoagland, 172 F.2d 205 (5th Cir.), cert. denied, 338 U.S. 816, 70 S.Ct. 57, 94 L.Ed. 494 (1949)).

. The record shows lack of personal jurisdiction upon entry of default by the clerk, lack of notice upon entry of default by the clerk (Alaska R.Civ.P. 55(a)(1)) (assuming personal jurisdiction existed), failure to give notice of the application for default judgment (Alaska R.CÍV.P. 55(c)(1)), failure to dismiss the case for lack of prosecution pursuant to the court’s order and Rule 41(e), and the unauthorized consideration of a premature request for a default judgment when in fact no default had ever occurred, if the provisions of AS 09.05.010 and the Alaska Rules of Civil Procedure are analyzed properly.

. Timetable and sequence for normal operation of the Alaska Rules of Civil Procedure after Borough’s entry of appearance under AS 09.05.-010:

(1) The Borough’s first appearance on June 16, 1986 meant it had 20 days to file an answer and raise its affirmative defenses, including lack of personal jurisdiction, which can be preserved by motion or a responsive pleading, such as an answer. Alaska R.Civ.P. 12(H)(1)(A)(B).
(2) The Borough had until July 8, 1986 before an answer would be due. No default was possible on June 16 or 23 because none had yet occurred. All of English Bay's applications for entry of default or a default judgment prior to July 8, 1986 were premature, not ripe, and simply a nullity. Nothing in the Alaska Rules of Civil Procedure authorizes premature filings for a default judgment and the majority cites no authority for such a practice, nor any reason for allowing such an irregularity to occur in this case.
(3) July 9, 1986 was the earliest day that English Bay was authorized to apply for an entry of default. Since the Borough appeared on June 16, Civil Rule 55(a)(2) applied, and the clerk of court was forbidden to enter a default not less than three days following service. There is no dispute that English Bay served all pleadings by mail such that an additional three days would be counted before the clerk could enter a default for failure of the Borough to answer. See Alaska R.Civ.P. 6(A), (C). Thus, July 14, 1986, was the earliest date the clerk of court could have legitimately entered a default (not a default judgment).
(4) Next, on July 15, 1986, if the Borough still had not answered, then English Bay would now be authorized to file a motion for the entry of a default judgment based upon the pleadings. Civil Rule 77(c)(4) controls here and requires that the Borough be allowed 15 days, plus three more days, due to mail service, before opposition to the motion must be filed. This date would be August 4, 1986. English Bay would have three days to reply, plus three more days due to mail service which would be August 11, 1986.

Since the parties requested oral argument, and this was a motion for a judgment on the pleadings, the superior court had no option or discretion except to schedule a-hearing on this matter not less than 10 days nor more than 20 days from the date of the filing of the notice for oral argument’. The latest date this hearing could have been scheduled in compliance with the Alaska Rules of Civil Procedure was September 4, 1986.

. See 5 Am.Jur.2d, Appearance § 30, at 504 (1962) ("an appearance [in proceedings after judgment] does not confer jurisdiction or give validity to the judgment, and that although a party is bound to any order of the court made after his general appearance, it does not bind him to orders or judgments made without jurisdiction before his appearance.”)

. Even if the application for a default judgment was erroneously considered revived by the superior court as of the June 23 appearance, it would still be similarly invalid since the default could not have occurred until at least July 21.

Indeed, under Civil Rule 55(a)(2) the clerk could not have entered default against the Borough until at least three days after the application of default, or on July 24.

Thus, the superior court’s actual entry of a default judgment on July 22, 1986 was premature and erroneously entered.

. We have previously stated: "The mere fact that the nondefaulting party will be required to prove his case ... does not constitute prejudice which should prevent a reopening.” Hertz v. Berzanske, 704 P.2d 767, 773 (Alaska 1985) (quoting BDM v. Sageco, Inc., 57 Haw. 73, 549 P.2d 1147, 1150 (1976)).

. Thus, this usually important consideration is absent in this case, where either affirming or reversing seem to be equally disrespectful of the finality of judgments.

The majority expresses its concern for the protection of the finality of judgments as a reason for not setting aside this default judgment. The majority justifies this approach on the technicality that points of appeal numbers 1, 2, and 3 are not being considered because any challenges on these law issues should have been taken by way of a timely appeal which the Borough failed to do.

In the ordinary case, I would agree with the majority’s view on this point. However, the majority's holding cannot be reconciled on the basis of fairness and justice to all the parties here because the validity and finality of the Borough’s three tax foreclosure judgments in 1982-84 are vacated and effectively set aside sua sponte by this court in favor of English Bay. How can this be allowed when English Bay never timely appealed those three judgments, nor properly preserved its defenses in those actions? How can the majority favor English Bay over the Kenai Borough under these circumstances? Or, stated another way, why is the Borough penalized for its technical failure to file a timely notice of appeal on these law issues, while English Bay is exempted from compliance with the rules of appellate and civil procedure and AS 09.05.010, so that the "sanctity” of its default judgment is upheld?