Dept. of Revenue v. Davidson Cattle Co.

• Decision Date: 30 December 1980
• Docket Number: No. 80-292,80-292
• Citation: 37 St.Rep. 2074,190 Mont. 326,620 P.2d 1232
• Parties: The DEPARTMENT OF REVENUE of the State of Montana, Petitioner and Appellant, v. DAVIDSON CATTLE COMPANY, Respondent and Respondent.
• Court: Montana Supreme Court

Page 1232

620 P.2d 1232

190 Mont. 326

The DEPARTMENT OF REVENUE of the State of Montana Petitioner and Appellant, v. DAVIDSON CATTLE COMPANY, Respondent and Respondent.

No. 80-292.

Supreme Court of Montana.

Submitted on Briefs Oct. 23, 1980.

Decided Dec. 30, 1980.

Thomas A. Pouliot, Tax Counsel, Dept. of Revenue, Helena, for petitioner and appellant.

Davidson, Veeder, Baugh, Broeder & Poppler, Billings, for respondent and respondent.

HASWELL, Chief Justice.

The Big Horn County District Court entered a default judgment against the State Tax Appeal Board (STAB) and subsequently denied the Montana State Department of Revenue's (Department) motion to set the default aside. The Department appeals.

This controversy commenced in 1978 when the Department's Corporate Tax Division conducted an audit of Davidson Cattle Company's state corporate license tax returns for the years 1972 through 1976. Following the audit, the Department assessed the taxpayer an additional $10,525.00 in taxes and interest.

The taxpayer protested the additional assessment before the Department. The Department denied the protest on September 13, 1978. An appeal was timely filed with STAB. Following a hearing, STAB entered its findings of fact, conclusions of law and final order affirming the Department's decision on October 3, 1979.

On October 22, 1979, the taxpayer filed a petition for judicial review of the STAB decision in the Big Horn County District Court. On October 23, 1979, the taxpayer mailed a copy of the summons and petition to the attorney who represented the Department at the STAB hearing; on October 29, 1979, a copy of the summons and petition was served upon STAB.

Taxpayer asserts in its brief that its attorney contacted a STAB member in early December on several occasions to inform STAB that an answer to its petition had been due on November 19, 1979. The STAB member was requested to discuss the matter with Helen Peterson, chairperson of STAB, and with the attorney representing the Department. The Department's memorandum filed with the District Court on its motion to set aside the default judgment admits that the Department had knowledge of the taxpayer's intent to take a default. It appears that the Department's attorney contacted taxpayer's counsel prior to a default being taken and stated that "notice and service" upon the Department were required.

On December 21, 1979, the taxpayer mailed a motion for default to the Clerk of the District Court, the Department's attorney and to the chairperson of STAB. On December 24, 1979, the Clerk of Big Horn County District Court entered the default of STAB. On January 30, 1980, the District Court entered a default judgment against STAB for its failure to answer or appear. The judgment further stated that STAB's final order was reversed and that the taxpayer owed no additional corporation license tax to the State for the years in question.

The Clerk of the District Court mailed notice of entry of the default judgment to STAB and the Department on January 31, 1980. On April 14, 1980, the Department filed a motion to set aside the default judgment based on lack of jurisdiction. The District Court entered its order denying the Department's motion on June 24, 1980. The Department appeals.

The first issue presented is whether Davidson Cattle Co. complied with procedural requirements in seeking judicial review. The Department contends that Davidson Cattle Co. failed to comply with section 2-4-702, MCA, and thereby failed to obtain jurisdiction over the Department. The taxpayer asserts that section 15-2-303, MCA, is the applicable statute.

Section 2-4-702, MCA, is contained in Montana's Administrative Procedure Act and provides procedures for initiating judicial review of agency determinations in contested cases. Section 15-2-303, MCA, on the other hand, provides appeal procedures for initiating judicial review of decisions of STAB. These statutes provide in pertinent part, as follows:

"2-4-702. Initiating judicial review of contested cases. (1)(a) A person who has exhausted all administrative remedies available within the agency and who is aggrieved by a final decision in a contested case is entitled to judicial review under this chapter. This section does not limit utilization of or the scope of judicial review available under other means of review, redress, relief, or trial de novo provided by statute.

"(b) A party who proceeds before an agency under the terms of a particular statute shall not be precluded from questioning the validity of that statute on judicial review, but such party may not raise any other question not raised before the agency unless it is shown to the satisfaction of the court that there was good cause for failure to raise the question before the agency.

"(2)(a) Proceedings for review shall be instituted by filing a petition in district court within 30 days after service of the final decision of the agency or, if a rehearing is requested, within 30 days after the decision thereon. Except as otherwise provided by statute, the petition shall be filed in the district court for the county where the petitioner resides or has his principal place of business or where the agency maintains its principal office. Copies of the petition shall be promptly served upon the agency and all parties of record." (Emphasis added.)

"15-2-303. Judicial review of contested cases. (1) Any party to an appeal before the state tax appeal board who is aggrieved by a final decision in a contested case is entitled to judicial review under this part.

"(2) Proceedings for review shall be instituted by filing a petition in district court in the county wherein the taxable property or some portion thereof...