No. 96-014 IN THESUPREME

COURTOFTHESTATEOFMONTANA 1996

HILANDSGOLFCLUB,

Petitioner andAppellant,
v. JOANASHMORE

a/k/a Joan Zirko, Respondent and Respondent.

APPEALFROM: District Court of the Thirteenth Judicial District,

In andfor the County of Yellowstone, TheHonorable C. B. McNeil, Judge presiding.

COUNSELOFRECORD:

For Appellant: Mark D. Parker; Parker LawFirm, Billings, Montana JamesH. Goetz; Goetz, Madden&Dunn, Bozeman, Montana For Respondent: Virginia A. Bryan; Wright, Tolliver &Guthals, Billings, Montana

Filed: Submitted onBriefs: May16, 1996 Decided: July 23, 1996Justice W.William Leaphart delivered the Opinion of the Court.

Appellant, Hilands Golf Club (Hilands), appeals from the Yellowstone County, Thirteenth Judicial District Court's Order dismissing Hilands' Petition for Judicial Review with prejudice. Wereverse. Hilands raises three issues onappeal relating to whether the failure to serve aRule 4, M.R.Civ.P., summonsonrespondent, Joan Ashmore (Ashmore) and the Montana Human Rights Commission (Commission) was obviated by their voluntary appearances in the District Court proceeding. Wedetermine 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 andnon-party agencies to anadministrative 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., aswe held in Fife v. Martin (1993), 261Mont. 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. ACommission investigator investigated Ashmore's complaints and found no 2probable cause to believe that Hilands had violated §49-2-304,

MCA. Ashmore appealed this determination of noprobable 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 andother policies in violation of the HumanRights Act, §§49-l-101 through 49-4-511, MCA. The Commission awarded Ashmore damages and ordered broad relief to address Hilands' discriminatory practices. Pursuant to 5 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 onAshmore's attorney and the attorney for the Commission, pursuant to Rule 5(b), M.R.Civ.P. However, Hilands did not have asummonsissued or served oneither entity.OnJuly 19, 1994, Ashmore movedto 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. TheCommission hadparticipated throughout the District Court proceedings byjoining in the conferences to select ajudge, joining in the scheduling conference, filing notices of appearance, 3andfiling motions. However, Hilands consistently maintained that

the Commission was not aparty to this action because it had not been a party to the administrative proceedings below. The Commission concedes that it wasnot aparty to the administrative proceedings before the Commission's hearing examiner. At the May, 1995, scheduling conference in District Court, Hilands argued that the Commission wasnot aparty to the action andthat, should it wish to participate asaparty, it should seek to intervene pursuant to Rule 24, M.R.Civ.P. Subsequently, the Commission movedto intervene in the matter andthe District Court denied the motion, holding that the Commission wasnot properly a party. SeeYoungv. City of Great Falls (1981), 194 Mont. 513, 515-16, 632P.2d 1111, 1113. In August, 1995, Hilands filed its brief on the merits in District Court. Ashmore's counsel obtained anextension until midOctober in which to file her answer brief. In early October, Ashmore filed aRule 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. TheDistrict Court granted Ashmore's motion anddismissed 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
4this 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., bydelivering acopy of the summonsandpetition to the Attorney General. Thecourt relied onFife -, 863P.2d 403, for the proposition that the procedures proscribed under §2-4-702, MCA, comprise "ajurisdictional threshold which must bemet in order to vest authority in adistrict court.1' Based on its interpretation of Fife, the District Court concluded that, because the Commission hadnot 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

OFREVIEW Ashmore based her motion to dismiss onlack of jurisdiction, Rule 12(b) (1) and (21, M.R.Civ.P. Motions to dismiss are construed in a light most favorable to the non-moving party, in this case 5Hilands, and should not begranted unless it appears beyond doubt

that Hilands can prove no set of facts ,in support of its claim which would entitle it to relief. SeeLockwoodv. W.R. Grace &Co. (1995)I 272 Mont. 202, 207, 900 P.2d 314, 317; Boehmv. Nelson (1987), 229Mont. 452, 453-54, 747P.2d 213, 214. In considering the motion, the complaint is construed in the light most favorable to Hilands andall allegations of fact contained therein are taken
astrue. & Lockwood, 900 P.2d at 317; Boehm, 747P.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. Wereview a district court's conclusions of law to determine whether the court's interpretation of the law is correct. Lockwood, 900P.2d at 317. DISCUSSION As discussed earlier, and because in this case we overrule Fife -I 863P.2d 403, werestate the dispositive issue asfollows: 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., aswe held in Fife, 863P.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 HumanRights Commission must bemadeas required by Rule 4D(2)(h), M.R.Civ.P., by delivering acopy of the summons

6andcomplaint (herein the petition) to the Attorney General andto

any other party which maybe 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 ajurisdictional threshold which must bemet 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., dueto her voluntary appearances. In her Rule 12(b) Motion to Dismiss, Ashmore argued that, because Hilands failed to properly andpromptly serve acopy of the

summonsandpetition uponAshmore, the Commission, andthe Attorney General, under 5 2-4-702, .MCA, and Rule 4D, M.R.Civ.P., the District Court lacked personal and subject matter jurisdiction to hear this case. Onappeal, Hilands frames the issue as solely a question of personal jurisdiction. Ashmore now counters that Hilands' failure to serve a copy of the summonsor 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 thecourt’s jurisdiction. Subject matter jurisdiction exists

independently of personal jurisdiction over the parties. Article VII, f34(2) of the Montana Constitution provides that the legislature mayprovide for direct review bythe district court of decisions of administrative agencies. MAPA,Title 2Chapter 4 at Part 7, provides the procedures for judicial review of administrative contested cases. MAPAprovides that: "Aperson who has exhausted all administrative remedies available within the agency andwhois aggrieved byafinal decision in acontested case is entitled to judicial review under this chapter." Section 2-4- 702, MCA. Thus, the district courts have subject matter jurisdiction over administrative appeals. The HumanRights Act sets out the procedures for contested
cases. Sections 49-2-501 through -510, MCA. Contested case hearings andsubsequent proceedings under the HumanRights Act must beheld in accordance with MAPA. Section 49-2-505, MCA. MAPAsets forth the procedure for initiating judicial review of contested
cases at 52-4-702, MCA:

(2)(a)

. . proceedings for review must be instituted byfiling apetition in district court within 30days after service of the final decision of the agency or, if arehearing is requested, within 30days after the decision is rendered.

. . . Copies of the petition must be promptly served upon the agency and all parties of record. Additionally, at 52-4-106, MCA,MAPAprovides that:

Except where a statute expressly provides to the contrary, service in all agency proceedings subject to the provisions of this chapter and in proceedings for

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judicial review thereof shall beasprescribed for civil actions in the district courts. In other words, service under MAPAshall be asprescribed by the Montana Rules of Civil Procedure unless a statute expressly provides otherwise. MCITelecommunications Corp. v. Department of Public Serv. Regulation (1993), 260Mont. 175, 179, 858P.2d 364,
367. Wetreat administrative agency appeals to district courts in
a manner similar to other proceedings. MCI, 858 P.2d at 367. Moreover, weencourage aliberal interpretation of procedural rules governing judicial review of an administrative decision, rather than taking an overly-technical approach, so as to best serve justice and allow the parties to have their day in court. m,
632 P.2d at 1113. It is uncontested that Hilands timely filed a Petition for Judicial Review pursuant to 5 2-4-702, MCA. Hilands, by mail, served copies of the petition uponAshmore's attorney andupon the Commission's attorney, pursuant to Rule S(b), M.R.Civ.P. It is also uncontested that Hilands did not have a summonsissued or served on Ashmore, the Commission, or the Attorney General, pursuant to Rules 4Cand4D, M.R.Civ.P. Both Ashmore and the District Court rely on Fife for the proposition that service of process, asset forth in Rule 4D(2) (h), M.R.Civ.P., upon the Commission and the Attorney General must be accomplished in order to vest jurisdiction in a district court.
863 P.2d 403. In Fife -I Patricia LeeMartin (Martin) assigned her

9rights to collect delinquent, future and present child support

obligations owed her by David Fife (Fife), to the Department of Social and Rehabilitation Services, Child Support Enforcement Division (CSED). CSEDsought enforcement of its assigned rights. CSEDsent Fife anotice of parental responsibility and set adate for anadministrative hearing onthe matter. Fife movedthe agency to dismiss the action on constitutional grounds. After various administrative proceedings, Fife petitioned the district court for judicial review naming Martin asthe sole respondent. Fife mailed copies of the petition to Martin andCSED. Fife, 863P.2d at 405. On appeal, this Court determined that because Martin had assigned her rights to CSED,CSEDwasthe real party in interest andthe proper respondent to Fife's petition for judicial review. Fife hadmailed copies of the petition for judicial review to CSED and Martin, but had not properly namedCSEDasthe respondent in his petition, nor served CSEDpursuant to Rule 4D, M.R.Civ.P. CSED did not answer the mailed petition for judicial review andCSEDdid not appear in court. WhenFife subsequently obtained andmailed a
summonsto CSEDandMartin, CSEDrefused to acknowledge service of the summonsandcomplaint asallowed by Rule 4D, M.R.Civ.P. -.....-, Fife 863P.2d at 405. Weheld, in Fife

-I that MAPA,§2-4-702, MCA, requires that service upon aparty to an administrative appeal be accomplished through aRule 4D, M.R.Civ.P., service of summons. -, Fife 863P.2d at 407. Wenow overrule this holding in Fife and hold instead
10that, for the purposes of anadministrative appeal to the district

court, service uponthe parties andthe agency, whether the agency itself is a party or not, pursuant to Rule 5, M.R.Civ.P., is sufficient. Under the Rules of Civil Procedure, service can be accomplished under either of two rules, Rule 4 or Rule 5, M.R.Civ.P. Under Rule 4, M.R.Civ.P., jurisdiction is acquired through the service of process. Process, under Rules 4Cand 4D, M.R.Civ.P., requires the issuance and service of asummonsupon a party. Onceserved with asummons,the party soserved is required to appear and defend. Rule 4C(2), M.R.Civ.P. If the party does not appear and defend, Rule 4C(2), M.R.Civ.P., provides that judgment by default will be rendered against him. However, apetition for judicial review to the district court is analogous to anappeal, asrecognized bythis Court, in MCI, 858 P.2d 364. Asaprerequisite to judicial review, the parties must have "exhausted all administrative remedies available within the agency." Section 2-4-702(l) (a), MCA. Bythe time the matter is before the district court for judicial review, the parties have already beendefined through their appearance at, andparticipation in, the administrative proceedings. There is no more need to acquire Rule 4, M.R.Civ.P., personal jurisdiction over these parties than there would bein anappeal from district court to the Supreme Court. That leaves Rule 5(b), M.R.Civ.P., as the only other method

11within the Rules of Civil Procedure for serving parties to an

administrative appeal. As between the only two options for service, Rule 4, M.R.Civ.P., and Rule 5, M.R.Civ.P., Rule 5, M.R.Civ.P., is the morelogical choice for effecting service. Rule 5, M.R.Civ.P., is designed to give notice via mailing or delivery of papers and pleadings. Unlike Rule 4, M.R.Civ.P., it is not designed to acquire jurisdiction over persons, nor does it require the service of a summonswith the attendant requirement that the served party appear anddefend or face adefault judgment. While

werecognize that Rule 5, M.R.Civ.P., speaks in terms of serving "parties," wehold that, for the purposes of service under MAPA,it is sufficient to mail copies of the Petition for Judicial Review upon the parties and the agency, whether the agency is itself a party or not. Accordingly, wehold that Rule 5(b), M.R.Civ.P., service by mail is all that is necessary to satisfy the service requirement of 52-4-702, MCA. Wereverse the District Court's conclusion that failure to serve summonsandacopyof the petition uponthe Commission through the Attorney General deprived the court of jurisdiction to proceed. Finally, wenote that the District Court based its dismissal
onits conclusion that it hadnojurisdiction over the Commission. The court did not address its jurisdiction over Ashmore. The question of whether Ashmore's voluntary appearances subjected her to the jurisdiction of the District Court pursuant to Rule 4B(2), M.R.Civ.P., is irrelevant given our holding that service pursuant

12to Rule 5, M.R.Civ.P., is sufficient under 55 2-4-106 and 2-4-

702(2)(a), MCA. Hilands mailed the Petition for Judicial Review to Ashmore pursuant to Rule 5(b), M.R.Civ.P. This mailing was sufficient to vest the District Court with jurisdiction over Ashmore aswell asthe Commission. TheDistrict Court erred in dismissing Hilands' Petition for Judicial Review for lack of jurisdiction. Hilands' service of the petition onAshmore andthe Commission, anon-party, according to Rule S(b), M.R.Civ.P., wassufficient to satisfy the requirements of §2-4-702, MCA. Wereverse.

Weconcur:

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