No. 80-292 

IN THE SUPRE1F;E COURT OF THE STATE OF MONTANA 

1980 

THE DEPARTMENT OF REVENUE OF 

THE STATE OF MONTANA, 

Petitioner and Appellant, 

DAVIDSON CATTLE COMPANY, 

Respondent and Respondent. 

a1 from: District Court of The Thirteenth Judicial District, 

In and for the County of Big Horn, The Honorable 

Diane G. Barz, Judge presiding. 

Counsel of Record: 

For Appellant: 

Thomas A. Pouliot, Tax Counsel, Dept. of Revenue, 

Helena, Montana 

For Respondent : 

Davidson, Veeder, Baugh, Broeder & Poppler, 

Billings, Montana 

Submitted on Briefs: October 23, 1980 

Decided :DE~ 3 

Y &' Clerk 
Mr. Chief Justice Frank I. Haswell delivered the Opinion of the 

Court. 

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 servicen 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 hasexhausted 

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 L 

iudicia1 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 af ter service of the final 

decision of the agency or, if a rehearing is 

requested, within 30 days af ter 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. 'I (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 is located (except the taxpayer 

may, at his option, file in the district court 

of the first judicial district) and serving a 

-- copy of the petition -- on the -- state tax appealboard within 30 days af ter servlce of the final 

decision of the state tax appeal board or, if a 

rehearing is requested, within 30 days af ter the 

decision thereon. All parties to the appeal 

shall cause -- to be served -- on the state tax appeal 

board a copy of all pleadings -- and documents -- they 

shall File insuchprocedings. " (Emphasis 

added .) - - 

We note that section 15-2-303, MCA, is a specific statute 

governing appeals from STAB decisions and does not require service of summons or a copy of the petition on the Department. On 

the other hand, section 2-4-702, MCA, is a general statute 

covering judicial review of determinations of any agency which is 

subject to the provisions of the Montana Administrative Procedure Act. 

It requires service on the agency involved, here the Department. A 

specific statute controls over a general statute to the extent of 

any inconsistency. Bryant v. Hall (1971), 157 Mont. 28, 33, 482 

P.2d 147, 149-150; Fickes v. Missoula County (1970), 155 Mont. 

258, 272, 470 P.2d 287, 294; Monarch Lumber Company v. Haggard 
(1961), 139 Mont. 105, 114, 360 P.2d 794, 798; In re Stevenson's 

Estate (1930), 87 Mont. 486, 498, 289 P. 566, 570. 

Of more significance in the present case is the District 

Court's scope of judicial review. The guidelines in this regard 

are provided by section 2-4-704, MCA, which provides as follows: 

2-4-704. Standards of review. (1) The review 

,hall be conducted byThe court without a jury 

.nd shall be confined to the record. In cases 

of alleged irregularities in procedure before 

the agency not shown in the record, proof 

thereof may be taken in the court. The court, 

upon request, shall hear oral argument and 

receive written briefs. 

"(2) The court may not substitute its judgment 

for that of the agency as to the weight of the 

evidence on questions of fact. The court may 

affirm the decision of the agency or remand the 

case for further proceedings: he court may 

reverse or modify the decision if substantial 

rights -- ofthe appellant -- have been prejudiced 

because the administrative findings, inferences, 

conclusions, - or decisions are: 

"(a) in violation of constitutional or statutory provisions; 

" (b) in excess of the statutory authority of 

the agency; 

(c) made upon unlawful procedure; 

"(d) affected by other error of law; 

"(e) clearly erroneous in view of the reliable, 

probative, and substantial evidence on the whole 

record ; 

" (f ) arbitrary or capricious or characterized 

by abuse of discretion or clearly unwarranted 

exercise of discretion; or 

"(g) because findings of fact, upon issues 

essential to the decision, were not made 

a1 though requested . I' 

Separate standards of review for STAB decisions are not 

provided with the exception of section 15-2-303 (4 ) which states 

that the District Court may permit additional evidence notwithstanding section 2-4-704(1), MCA. 

Turning to the default judgment entered in the present 

case, the District Court reversed STAB'S determination and 

granted the relief requested by the taxpayer based on the 

Department's failure to answer or appear. There is no basis for 

this judgment in the record, other than the Department's failure 
to appear. However, the failure to appear does not suspend the 

standards of review. In short, the District Court was not 

entitled to enter a default judgment reversing STAB without 

reviewing the record and complying with the standards of review 

contained in section 2-4-704, MCA. 

The default judgment entered by the District Court is 

vacated and this case is remanded for further proceedings consistent with section 2-4-704, MCA, and this opinion. 

Chief Justice