Hilands Golf Club v. Ashmore

Citation922 P.2d 469,277 Mont. 324
Decision Date23 July 1996
Docket NumberNo. 96-014,96-014
PartiesHILANDS GOLF CLUB, Petitioner and Appellant, v. Joan ASHMORE a/k/a Joan Zirko, Respondent and Respondent.
CourtUnited States State Supreme Court of Montana

Mark D. Parker; Parker Law Firm, Billings, James H. Goetz; Goetz, Madden & Dunn, Bozeman, for appellant.

Virginia A. Bryan; Wright, Tolliver & Guthals, Billings, for respondent.

LEAPHART, Justice.

Appellant, Hilands Golf Club (Hilands), appeals from the Yellowstone County, Thirteenth Judicial District Court's Order dismissing Hilands' Petition for Judicial Review with prejudice. We reverse.

Hilands raises three issues on appeal relating to whether the failure to serve a Rule 4, M.R.Civ.P., summons on respondent, Joan Ashmore (Ashmore) and the Montana Human Rights Commission (Commission) was obviated by their voluntary appearances in the District Court proceeding. We determine that Hilands' issue number four is dispositive; that is, whether service pursuant to Rule 5, M.R.Civ.P., rather than service pursuant to Rule 4, M.R.Civ.P., upon parties and non-party agencies to an administrative appeal to district court is sufficient? Consequently, we restate the dispositive issue as follows:

Whether, when petitioning for judicial review of an administrative decision, the Montana Administrative Procedure Act requires service on agencies and parties pursuant to the provisions of Rule 4, M.R.Civ.P., as we held in Fife v. Martin (1993), 261 Mont. 471, 863 P.2d 403, or pursuant to the provisions of Rule 5, M.R.Civ.P.?

BACKGROUND

In 1991, Ashmore brought a claim before the Commission alleging that Hilands had discriminated, based on gender, in its public accommodations contrary to § 49-2-304, MCA. A Commission investigator investigated Ashmore's complaints and found no probable cause to believe that Hilands had violated § 49-2-304, MCA. Ashmore appealed this determination of no probable cause and the Commission held a contested case hearing on the matter. Following the hearing, the Commission's final order determined that Hilands had discriminated in its membership and other policies in violation of the Pursuant to § 2-4-702, MCA, Hilands filed a Petition for Judicial Review of the Commission's holding. Hilands, by mail, served copies of the petition for review on Ashmore's attorney and the attorney for the Commission, pursuant to Rule 5(b), M.R.Civ.P. However, Hilands did not have a summons issued or served on either entity.

Human Rights Act, §§ 49-1-101 through 49-4-511, MCA. The Commission awarded Ashmore damages and ordered broad relief to address Hilands' discriminatory practices.

On July 19, 1994, Ashmore moved to substitute the District Court judge. Numerous motions for substitution of judge followed. Ashmore, Hilands, the Commission, and the presiding judge held conferences to determine which outside judge would be called into the case. In April, 1995, they ultimately decided on District Court Judge C.B. McNeil.

In a scheduling conference held May, 1995, counsel for Ashmore, Hilands and the Commission agreed upon a briefing schedule. The Commission had participated throughout the District Court proceedings by joining in the conferences to select a judge, joining in the scheduling conference, filing notices of appearance, and filing motions. However, Hilands consistently maintained that the Commission was not a party to this action because it had not been a party to the administrative proceedings below. The Commission concedes that it was not a party to the administrative proceedings before the Commission's hearing examiner.

At the May, 1995, scheduling conference in District Court, Hilands argued that the Commission was not a party to the action and that, should it wish to participate as a party, it should seek to intervene pursuant to Rule 24, M.R.Civ.P. Subsequently, the Commission moved to intervene in the matter and the District Court denied the motion, holding that the Commission was not properly a party. See Young v. City of Great Falls (1981), 194 Mont. 513, 515-16, 632 P.2d 1111, 1113.

In August, 1995, Hilands filed its brief on the merits in District Court. Ashmore's counsel obtained an extension until mid-October in which to file her answer brief. In early October, Ashmore filed a Rule 12(b), M.R.Civ.P., Motion to Dismiss. Ashmore based her Motion to Dismiss on Fife v. Martin (1993), 261 Mont. 471, 863 P.2d 403, arguing that service of process via summons, pursuant to Rule 4D, M.R.Civ.P., was necessary to establish jurisdiction in the District Court.

The District Court granted Ashmore's motion and dismissed the petition with prejudice. The court determined that under § 2-4-702(2)(a), MCA, copies of the petition for judicial review must be promptly served upon the agency from which review is sought, in this case the Commission, in accordance with Rule 4D(2)(h), M.R.Civ.P. In other words, the court concluded that Hilands had failed to serve process upon the Commission, under Rule 4D(2)(h), M.R.Civ.P., by delivering a copy of the summons and petition to the Attorney General. The court relied on Fife, 261 Mont. 471, 863 P.2d 403, for the proposition that the procedures proscribed under § 2-4-702, MCA, comprise "a jurisdictional threshold which must be met in order to vest authority in a district court."

Based on its interpretation of Fife, the District Court concluded that, because the Commission had not been served via the Attorney General pursuant to Rule 4D(2)(h), M.R.Civ.P., the court did not have jurisdiction over this matter. Consequently, because it was too late for Hilands to obtain prompt service on the Commission and because Hilands had failed to comply with jurisdictional requirements, the court dismissed Hilands' Petition for Review with prejudice. Given its conclusion that it had no jurisdiction to proceed, the court decided it was unnecessary to address whether or not it had obtained jurisdiction pursuant to Rule 4B(2), M.R.Civ.P., over Ashmore by virtue of her voluntary appearances or whether the Commission had voluntarily appeared through its Motion to Intervene.

STANDARD OF REVIEW

Ashmore based her motion to dismiss on lack of jurisdiction, Rule 12(b)(1) and (2), M.R.Civ.P. Motions to dismiss are construed in a light most favorable to the non-moving party, in this case Hilands, and

                should not be granted unless it appears beyond doubt that Hilands can prove no set of facts in support of its claim which would entitle it to relief.  See Lockwood v. W.R. Grace & Co.  (1995), 272 Mont. 202, 207, 900 P.2d 314, 317;  Boehm v. Nelson (1987), 229 Mont. 452, 453-54, 747 P.2d 213, 214.   In considering the motion, the complaint is construed in the light most favorable to Hilands and all allegations of fact contained therein are taken as true.  See Lockwood, 900 P.2d at 317;  Boehm, 747 P.2d at 214.   The District Court's determination that it did not have jurisdiction over this case is a conclusion of law.  Pike v. Burlington N. R.R. Co.  (1995), 273 Mont. 390, 392-93, 903 P.2d 1352, 1353.   We review a district court's conclusions of law to determine whether the court's interpretation of the law is correct.  Lockwood, 900 P.2d at 317
                
DISCUSSION

As discussed earlier, and because in this case we overrule Fife, 261 Mont. 471, 863 P.2d 403, we restate the dispositive issue as follows:

Whether, when petitioning for judicial review of an administrative decision, the Montana Administrative Procedure Act requires service on agencies and parties pursuant to the provisions of Rule 4, M.R.Civ.P., as we held in Fife, 261 Mont. 471, 863 P.2d 403, or pursuant to the provisions of Rule 5, M.R.Civ.P.?

The District Court granted Ashmore's Rule 12(b) Motion to Dismiss for lack of jurisdiction. The court stated: "Service of process upon the Human Rights Commission must be made as required by Rule 4D(2)(h), M.R.Civ.P., by delivering a copy of the summons and complaint (herein the petition) to the Attorney General and to any other party which may be prescribed by statute." The court determined that, under Fife, the procedures to gain jurisdiction as prescribed by the Montana Administrative Procedure Act (MAPA), §§ 2-4-101 through 711, MCA, and Montana's Rules of Civil Procedure, comprise a jurisdictional threshold which must be met in order to vest authority in a district court. Fife, 863 P.2d at 407. Having concluded that it had no jurisdiction over the Commission, the court declined to address the issue of whether it acquired jurisdiction over Ashmore pursuant to Rule 4B(2), M.R.Civ.P., due to her voluntary appearances.

In her Rule 12(b) Motion to Dismiss, Ashmore argued that, because Hilands failed to properly and promptly serve a copy of the summons and petition upon Ashmore, the Commission, and the Attorney General, under § 2-4-702, MCA, and Rule 4D, M.R.Civ.P., the District Court lacked personal and subject matter jurisdiction to hear this case. On appeal, Hilands frames the issue as solely a question of personal jurisdiction. Ashmore now counters that Hilands' failure to serve a copy of the summons or petition on Ashmore and the Commission via the Attorney General deprives the court of subject matter jurisdiction. There is no merit to Ashmore's contention that failure to serve process pursuant to Rule 4, M.R.Civ.P., deprives the court of subject matter jurisdiction. Rule 4, M.R.Civ.P., establishes the procedure for acquiring personal jurisdiction over persons or entities subject to the court's jurisdiction. Subject matter jurisdiction exists independently of personal jurisdiction over the parties.

Article VII, § 4(2) of the Montana Constitution provides that the legislature may provide for direct review by the district court of decisions of administrative agencies. MAPA, Title 2 Chapter 4 at Part 7, provides the procedures for judicial review of administrative contested cases. MAPA provides that: "A person who has exhausted all administrative remedies...

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