No. 13570 IN THE SUPREMr COURT OF THE STATE OF MONTANA 1977

WILLIAM 

### F.BEO SPRING, S&' and KATHLEEN R

# .BIG 

### SPRING,, Plaintiffs and Respondents,

THE BLACKFEET TRIBE OF THE BLACKFEET INDIAN RESERVATION, A Corporation, Defendant and Appellant.

Appeal from: District Court of the Ninth Judicial District, Honorable R. D. McPhillips, Judge presiding. Counsel of Record: For Appellant: Philip E. Roy, Browning, Montana Graybill, Ostrem, Warner and Crotty, Great Falls,

Montana Donald Ostrem argued, Great Falls, Montana For Respondents: Frisbee and Moore, Cut Bank, Montana John P. l.1ooreargued, Cut Bank, Montana

Submitted: October 6, 1977 ~ecided:

# JAN1

## 11370 Filed: 

### 'JA

## I.! 1.i.

## 159Mr. Justice Daniel J. Shea delivered the Opinion of the Court:

The Blackfeet Tribe of the ~IBckfeet Indian Reservation, appeals from a default judgment of $20,000 damages for libel entered against the Tribe by the District Court, Glacier County. The basis for the libelactionwas a letter datedMarch 18, 1974, allegedlywrittenby Earl Old Person, Chairman of the Blackfeet Tribe, toWilliam F. Big Spring, Sr. and Kathleen R. Big Spring. The letter concerned the Big Springs, enrolled members of the Blackfeet Tribe, and it was sent to the Big Springs

aswell as toother people outside the reservation. On March 17, 1976, the Big Springs filed a libelaction against the Blackfeet Tribe. The same day, even though the Tribehad not been served with the complaint and summons and had made no appearance, the attorney forBig Springs mailed 

### a request for admissions to the Tribe's attorney, but did not mail

a copy of the summons and complaint. On March 22, 1976, the sheriff served Earl Old Persons with a copy of the summons and complaint. On April 2, Big Springs' attorney served the Tribe's attorney with a supplemental request for admissions. The Tribe failed toappear within 20 days of the date of service. 22 days after service, on April 13, 1976, the Big springs' attorney filed the original sheriff's return on the

summons with the clerk of the district court and then made written request for the clerk to enter the Tribe's default. Default was entered the same day. Three days afterentry of default, on April 16, and without receiving notice of the default, the Tribe fileda motion to dismiss the complaint on the grounds that the court lacked juris-diction over the subjectmatter (the libel action) and personal jurisdiction over the Tribe. The Tribe mailed a copy of itsmotion to dismiss to the Big Springs' attorney. On April 20, with no notice to the Tribe, the Big Springs' attorney filed a written motion to strike the Tribe's motion to dismiss, alleging that the Tribe had no right to filesuch

a motion or to appear after

### its default had been entered. No authoritywas cited. On April 21, the trialcourt granted this ex-parte motion and immediately proceeded tohear evidence on the question of liability and damages. Exhibits were introduced and witnesses were sworn and testified. The court took the matter under advisement. On April 

### 23, the Tribe filed a motion to setaside the default.and to quash the summons and dismiss the complaint. The Tribe setout several grounds to set aside the default including that (1) servicewas not made on the proper person, (2) the tribal chairman had no recollection of ever being served, 

### (3) copies of the complaint and summons could not be found, and 

### (4)the Tribe's attorneyhad no way of determining the exact day of service because the original summons had not been returned to the clerk of court until the day the default was taken. The Tribe again contended the court had no jurisdiction over the subject matter and over the Tribe. The Tribe stressed that it

was appearing specially and not generally. Two hearings were held on the Tribe's motion to set aside the default and dismiss the complaint. The firsthearing was the result of a notice sent by the attorney for the Big Springs

on April 29 setting the hearing date forMay 

### 5. This notice was deficient under Rules 6(d) and 6(e), M.R.Civ.P., which requirea notice of at least eight days if service ismade by mail. Neither the Tribe's attorneynor any of defendants were present atthe hearing. (At a laterhearing the Tribe's attorney sought tojustify his absence atthe firsthearing by stating he was inChicago atthe time and had called the court after learning of thehearing date, and the trialcourt had agreed to a continuance. The court did not deny this.) The court then proceeded with 

### itshearing and received evidence on the question of service of process. Nothing in the record indicates the court ruled on the Tribe's motion to set aside the default, or that a minute entry or other notice was sent to the fribe's attorney informing him of what proceedings had taken place on that day. On June 2, 1976, the Tribe's attorney sent notice by mail to the Big springs' attorney setting a hearing forJune 9 on the Tribe's motion to set aside the default. This notice was also deficient under Rules 6(d) and 6(e), M.R.Civ.P., but attorneys for both parties appeared atthe hearing and therefore notice here 

### isnot at issue. On the date of the hearing, the attorney for the Big Springs filed a motion to quash the Tribe's motion to set aside the default on the grounds that (1) the Tribe had failed to appear atthe prior hearings, (2) the Tribe had no right to make any appearances atthispoint, and 

### (3) the notice was not accompanied by the motion to set aside orby an affidavit. Both attorneys presented their arguments tothe court. The District Court judge stated that normally he would set aside the defaultwhen a motion or pleading was filed "within a reasonable time" afterthe 20 day period, such as this case, but concluded:

# "*** but the problem here, of course, 

### is that it [themotion to set aside the default] was set forhearing and you failed toappear and argue the motion." The court then took the motion under advisement. On June 29, without ruling directly the motion set aside the default, the trialcourt entered 

### its findings of fact and conclusions of law and awarded theBig Springs $20,000 in damages against the Tribe. Judgment was entered July 

### 6 and on the same day the Big Springs' attorney sent a copy of thejudgment and notice of entry of judgment tothe Tribe. On July 12, the Tribe moved to set aside thejudgment. On July 21, 

### in a short order devoid of reasons, the trialcourt denied the motion to set aside thejudgment. The Tribe appeals from the court's rulings failing to set aside the default and failing to set aside thejudgment. On the basis of the total circumstances surrounding the proceedings intheDistrict Court we conclude the Tribe was denied a meaningful opportunity to appear and be heard. The District Court proceedings reek of a denial of due process and the defaultjudgment and default must be set aside. Rule 5(f), M.R.Civ.P., states that proof of service "shall be filedwithin 10 days after service. Failure tomake of proo-f/servicedoes not affect the validity of the service." The rule, as stated, 

### isunconditional. Here, the attorney for the Big Springs did not return and filethe summons with proof of serviceuntil 22 days after service on Earl Old Person. Although this latereturn did not affect the validity of the service forjurisdictional purposes, it did make it difficult for the Tribe's attorney to determine the date of service. Here the summons was returned and filed simultaneously with a motionto take the Tribe's default. It could well be that the failure to return the summons within the time required by the rule could have contributed to the Tribe's failure to appear within the 20 days. Lack of an opportunity to acquire this information, coupled with other circumstances, may be sufficient "good cause" to setaside a default under Rule 55(c), M.R.Civ.P., which states inpart: "For good cause shown the court may set aside an entry of default

# *

# * *.If Henceforth, it shallbe the duty of allprocess servers, be it the sheriff or private persons, to strictly comply with Rule 5(f), M.R.Civ.P. It isthe duty of the process server to return the summons to the clerk of court within 10 days after service, and this duty shallonly be excused under circumstances which constitute "good cause". "Good cause" shall relate only to the difficultywhich the process server has in

### filing the papers with the appropriate clerk of court. The Tribe finds itself ina position of not knowing why the District Court overruled 

### itsmotion to set aside the default. Not only did the trialcourt fail to give reasons for denying the motion to set aside the default, but no ruling was directed to the Tribe's motion. The Tribe's motion was only impliedly overruled by thejudgment against the Tribe. Inmatters of such importance the parties are entitlednot only to a direct ruling from the trialcourt on the motion, but they are also entitled toknow the reasons for the ruling. In itsmotion the Tribe set out substantialgrounds why the default should be set aside, and since the District Court failed to discuss these grounds, we cannot uphold the rule that ajudgment of the trialcourt comes to us aspresumptively correct. We adhere to our rule that thisCourt does not favor defaults, but rather, favors an adjudication on the merits whenever possible. Lindsey v. Keenan, (1946), 118Mont. 312, 322, 165 P.2d 804. See also: Schwab v. Bullock's Inc., (9thCir. 1974), 508 F.2d 353,355; 10Wright & Miller, Federal Practice & Procedure: Civil $2681, pp. 248-251. 

### It follows naturally that if the default must be setaside

somust thejudgment. However, there are independent reasons why the defaultjudgment must be setaside, even if the default was allowed tostand. Once the Tribe filed itsinitialmotion to dismiss before judgment was entered, itwas entitled tonoticeof allsubsequent proceedings, but itwas denied thisnotice. Rule 55(b)(2), M.R.Civ.P., states inpart: 

### "* Jc 

# * If the party againstwhom judgment by default 

### is sought has appeared inthe action, he (or, if appearingby representative, his representative) shallbe servedwithwritten notice of the application forjudgment atleast three days prior to thehearing on such application. 3r

# * *" Section 93-8505, R.C.M. 1947, also entitles 

### a party tonotice of subsequent proceedings after an "appearance" by that party. This section states inpart:

" A defendant appears inan actionwhen he answers, filesH-motion, orgives the plaintiff written notice of hisappearance

# ** *.Ir (Emphasis added). Two days afterdefaultwas entered, but before default judgment was taken, the Tribe filed itsmotion to dismiss on jurisdictional grounds. A motion todismiss on the basis of lack of subjectmatterjurisdiction may be raised atany time. Rule 12(h)(3), M.R.Civ.P.; .W 

# I"gm' dv. McCloskey & Co.,(Brd Cir. 1965), 342 F.2d 495, 497, cert. den. 382 U.S. 823, 86 S.Ct. 52, 15 L ed 2d 68; Rath Packing Co. v. Becker, (9th Cir. 1975), 530 F.2d1295, 1303. Moreover, this Court has long held a motion attacking the complaint, as inthe instant case, is sufficient to act as an appearance. Donlan v. Thompson Falls Copper & Milling-Co., (1910), 42 Mont. 257, 112 P. 445. Even though the Tribe denominated its appearance asa special one, itwas 

### stillan appearance under any circumstances. Under Rule 12, M.R.Civ.P., there 

### isno longer a distinction between general and special appearances. Under Rule 12(b) lack of jurisdiction may be asserted either inthe responsive pleading orby motion; Rule 12(g) allows consolidation of Rule 12(b) defenses; and Rule 12(h)(1) requires a party to raise the defense of lack of personal jurisdiction inhis initialpleading The Tribe complied with each of these rules. Since the Tribe properly appeared, it follows that it was I improper for the trialcourt togrant the Big Springs' ex parte motion to strike the ~ribe's motion todismiss. Once the Tribe filed 

### its appearance theBig Springs were required to givenotice to the Tribe of any opposing motion. Rule 5(a), M.R.Civ.P., provides inpart: 

# "** * Except asother wise provided inthese rules, every

# *** written motion other than one which may be heard exparte, and every written notice

# *

# ** and similarpaper shallbe served upon each of the parties. 

# * **" It 

### is clear the trialcourt had no procedural authority strikethe Tribe's motion todismiss. Once the Tribehad made its appearance by filing itsmotion to dismiss, itwas the duty of the court to require notice to the Tribe of any opposing motion. Moreover, the District Court had a duty to rule on the Tribe's motion before proceeding tojudgment. Paramount ~ublj# Corp. v. Boucher, (1933), 93 Mont. 340, 347, 19 P.2d 223.Even assuming the District Court ruled against the Tribe

on 

### itsmotion to dismiss and the Tribe did not further plead within the time requirements, the Big Springs stillhad the duty to give atleast a three day notice to the Tribe before

a hearing could be held on the Big Springs' application to (2) take judgment. Rule 55(b)/, M.R.Civ.P. This, of course, was not done, and the Tribe had no opportunity toparticipate at the hearing where the trialjudge heard evidence upon which the judgment was based. These failures togive proper noticewere fatal to the judgment. Under the totality of the circumstances such as exist in this case, we can seeno useful punpose in setting aside thejudgment only toallow the parties to relitigate the question of whether the default should be setaside. The entire proceedings were so lacking such as to constitute a denial of due process. The trialcourt has not yet ruled on the issues of jurisdiction over the subject matter and personaljurisdiction over the Tribe, and we refrain from deciding these issues. Similarly, the proper test for damages ina defamation action 

### isnot properly before this Court atthis time. For instructions regarding the correctbasis of damages ina defamation action, however, we direct the Discrict Court's attention toNew York Times Co. v. Sullivan, (1964), 376 U.S. 254, 84 S.Ct. 710, 

### 11L ed 2d 686, 95 ALR2d 1412; Gertz v. Welch, (1974), 418 U.S. 323, 94 S.Ct. 2997, 41L ed 2d 789, and related federal cases. We vacate the defaultjudgment and the default and remand with directions to the District Court to rule on the Tribe'smotion todismiss and proceed furtherunder theproper rules of civilprocedure.

..-. Chief Justice