96-703

 No. 96-708

 IN THE SUPREME COURT OF THE STATE OF MONTANA

 

1997

PEGGY ESTABROOK and STATE FARM MUTUAL

AUTOMOBILE INSURANCE COMPANY as 

Subrogee of PEGGY ESTABROOK,

 Plaintiffs and Appellants,

 v.

SHAWN BADEN, AMY CLARK and

HAROLD SMITH,

 Defendants and Respondents.

APPEAL FROM: District Court of the Second Judicial District,

 In and for the County of Silver Bow,

 The Honorable James E. Purcell, Judge presiding.

COUNSEL OF RECORD:

 For Appellants:

 Tracy Morin; Axelberg & Kalkstein, Missoula, Montana

 No appearance was made by Respondents.

 

 Submitted on Briefs: August 28, 1997

 Decided: September 11, 1997

Filed:

 __________________________________________

 Clerk

Justice W. William Leaphart delivered the Opinion of the Court.

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 Plaintiff, State Farm Mutual Automobile Insurance Company (State Farm), as

subrogee of Peggy Estabrook, appeals from the order of the Second Judicial District

Court dismissing its amended complaint with prejudice. We reverse.

 Issue Presented

 May a court, sua sponte, raise the affirmative defense of the statute of 

limitations 

and dismiss a complaint on that basis?

 Background

 State Farm, as subrogee of Peggy Estabrook, filed an amended complaint alleging

that on September 23, 1992, defendant Shawn Baden negligently operated a vehicle

owned by defendants Amy Clark and Harold Smith, thereby colliding with and damaging

Estabrookþs vehicle. It is alleged that Amy Clark and Harold Smith negligently 

entrusted

the vehicle to Shawn Baden and that Clark and Smith were negligent in not having

liability insurance as required by 61-6-301, MCA. 

 State Farm sought and obtained a default judgment against Shawn Baden for

$3,920.83. State Farm then sought a default judgment against defendant Amy Clark for

damages in the amount of $2,715.62 plus an attorney's fee of one-third, $1,066.21. 

 The District Court, noting that it is the practice in the Second Judicial 

District to

limit attorney's fees to twenty percent in default judgment cases, determined that 

State

Farm's request for a fee of one-third "triggered the court to a full review of the 

file." 

In an October 18, 1996 letter to State Farm's counsel, the court questioned the 

propriety

of requesting a one-third fee and also indicated that the claim was barred by the 

two-year

statute of limitations for property damage claims. The court stated: "Before I set 

aside

the Judgment I have already entered [against Baden], I would appreciate your response

to this matter." In his responsive letter to the court, counsel for State Farm 

argued that

in light of this Court's decision in Ritland v. Rowe (1993), 260 Mont. 453, 861 P.2d

175, the three-year statute of limitations for tort claims, 27-2-204, MCA, 

controlled

over the two-year limitation period for property damage claims, 27-2-207, MCA. 

 On November 18, 1996, the District Court issued its order and memorandum (1)

denying the motion for default against Amy Clark; (2) setting aside the default 

judgment

against Shawn Baden; and (3) dismissing, with prejudice, State Farm's amended

complaint. State Farm has appealed from that order contending that the court had no

authority to raise, sua sponte, the Rule 8(c), M.R.Civ.P., affirmative defense of the

statute of limitations and that the District Court applied the incorrect statute of 

limitations.

 Discussion

 This appeal presents the issue of whether a district court may, on its own 

motion,

raise the statute of limitations as a bar to a claim despite the fact that the 

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defendant is in

default for failing to file an appearance and has not raised the statute of 

limitations as an

affirmative defense as required under Rule 8(c), M.R.Civ.P. 

 Rule 8(c), M.R.Civ.P., provides as follows:

 In pleading to a preceding pleading, a party shall set forth affirmatively

 accord and satisfaction, arbitration and award, assumption of risk,

 contributory negligence, discharge in bankruptcy, duress, estoppel, failure

 of consideration, fraud, illegality, injury by fellow servant, laches, license,

 payment, release, res judicata, statute of frauds, statute of limitations,

 waiver, and any other matter constituting an avoidance or affirmative

 defense. When a party has mistakenly designated a defense as a

 counterclaim or a counterclaim as a defense, the court on terms, if justice

 so requires, shall treat the pleading as if there had been a proper

 designation.

 The statute of limitations is one of the affirmative defenses set forth in Rule 

8(c),

M.R.Civ.P. It must be affirmatively pled in the defendant's answer, or it is waived 

as

a defense. Bennett v. Dow Chemical Co. (1986), 220 Mont. 117, 713 P.2d 992. In

Bennett, defendant Rancher's Agra Services, Inc. asked this Court to direct the 

district

court to grant its motion for summary judgment, arguing that the same statute of

limitations that applied to the other defendants applied to Rancher's as well. In 

rejecting

Rancher's argument, we stated:

 We will now consider the request of Rancher's Agra Services, Inc.,

 for this Court to order the District Court to enter summary judgment by

 reason of the running of the statute of limitations in its favor. Rule 8(c),

 M.R.Civ.P., provides that a defense of the running of the statute of

 limitations is an affirmative defense and can only be raised by answer. 

 Taylor v. Dept. of Fish, Wildlife & Parks (Mont. 1983), [205 Mont. 85,

 96,] 666 P.2d 1228, 1233 . . . . Rancher's has never filed an answer nor

 provided this Court with any reason for this failure. We can perceive no

 reason to excuse it from filing an answer. The request is denied. 

Bennett, 713 P.2d at 995-96 (emphasis added).

 Thus, despite the fact that other co-defendants had received the benefit of the

statute of limitations defense, we denied Rancher's request to apply the statute 

because

Rancher's had not affirmatively pled the defense as required by Rule 8(c). Having 

held

that the Rule 8(c) waiver cannot be overcome by motion of the party, we must likewise

conclude that the waiver cannot be suspended, sua sponte, by the court when the 

affected

party has not only failed to file a motion but is in default for failure to appear 

at all. 

 In addressing this issue, other jurisdictions have also concluded that the 

affirmative

pleading requirement of Rule 8(c) is not waived upon the intercession of the 

district court

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on behalf of a defendant and the district court cannot waive the requirement for the

defendant or raise the affirmative defense for the defendant. In Smith v. Rheaume 

(Fla.

Dist. Ct. App. 1993), 623 So.2d 625, the defendant wrote a letter to the trial judge

requesting that charges against her be dismissed as frivolous. The district court, 

sua

sponte, raised the issue of the statute of limitations and dismissed the suit. On 

appeal,

the court, in interpreting a rule identical to our Rule 8(c), M.R.Civ.P., held that 

the

statute of limitations was an affirmative defense which could be waived or raised by 

the

defendant but not by the trial court. Thus, the trial courtþs dismissal was 

reversed. 

Smith, 623 So.2d at 627. Similarly, the Court of Appeals for the District of 

Columbia

held the statute of limitations is an affirmative defense which must be set forth in 

a

responsive pleading and which may be waived if not promptly pleaded. Thus it follows

that if a defendant fails to assert the limitations defense, the court should not 

raise it sua

sponte. Feldman v. Gogos (D.C. Ct. App. 1993), 628 A.2d 103, 105 (citing Davis v.

Bryan (2nd Cir. 1987), 810 F.2d 42, 44). It is error for a trial court to sua sponte

dismiss claims based upon the statute of limitations where the defendant fails to 

file an

answer raising these affirmative defenses or otherwise respond to the pleading. 

Adams

v. Inman (Mo. Ct. App. 1994), 892 S.W.2d 651, 653. But see Exeter Hospital v. Hall

(N.H. 1993), 629 A.2d 88, 90, where the court held that it was unfair for the trial 

court,

after raising the defense of statute of limitations sua sponte, to dismiss the 

hospitalþs

claim on a debt without allowing the hospital to present evidence to rebut the 

defense. 

 We conclude that under Rule 8(c), M.R.Civ.P., a þpartyþ must raise the

affirmative defense of the statute of limitations. If the party fails to appear or, 

having

appeared, fails to raise the statute as a defense, the defense is waived and may not

thereafter be raised by the court, sua sponte, on the partyþs behalf. Accordingly, 

the

District Courtþs order and memorandum of November 19, 1996 is reversed, and this

matter is remanded for further proceedings consistent with this opinion. 

 Since we have concluded that the court erred in raising the statute of 

limitations

defense, we need not determine whether the court applied the correct period of

limitations. Reversed and remanded. 

 /S/ W. WILLIAM LEAPHART

We concur:

/S/ J. A. TURNAGE

/S/ JAMES C. NELSON

/S/ JIM REGNIER 

/S/ TERRY N. TRIEWEILER

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