Submitted on Briefs: February 8, 2017
FROM: District Court of the Third Judicial District, In and
For the County of Deer Lodge, Cause No. DV 15-55 Honorable
Ray Dayton, Presiding Judge
Appellant: Brooke B. Murphy, Adrianna Potts, Matovich, Keller
& Murphy, P.C., Billings, Montana
Appellee: Wade J. Dahood, Knight & Dahood, Anaconda,
Jeremiah Shea Justice
Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
Internal Operating Rules, this case is decided by memorandum
opinion and shall not be cited and does not serve as
precedent. Its case title, cause number, and disposition
shall be included in this Court's quarterly list of
noncitable cases published in the Pacific Reporter and
Liberty Northwest Insurance (Liberty) appeals the denial of
Liberty's Motion to Vacate Default Judgment or for Relief
from Default Judgment Pursuant to M. R. Civ. P. Rule 60(b)(4)
by the Third Judicial District Court, Deer Lodge County. We
address whether deficient service of process denied personal
jurisdiction to the District Court. We reverse.
Susan Thomas filed a workers' compensation claim arising
from a work-related injury occurring on September 16, 2010.
Liberty, a foreign insurer incorporated under the laws of
Oregon, handled Thomas's workers' compensation claim.
While some benefits have been paid, Thomas's medical
benefits remain open. On June 8, 2015, Thomas filed a
Complaint and Demand for Jury Trial, alleging that Liberty
failed to pay certain medical expenses. Thomas's
Complaint asserted four counts: (1) Breach of the Covenant of
Good Faith and Fair Dealing; (2) Negligent and Intentional
Infliction of Emotional Distress; (3) Punitive Damages; and
(4) Violation of the Unfair Trade Practices Act.
Thomas attempted service on Liberty by having the Missoula
County Sheriff deliver a copy of the Summons and Complaint to
Gary Holt, the Claims Team Manager at Liberty's Missoula
field office. The Sheriff completed a Return of Service
stating that he personally served the Summons and Complaint
on December 29, 2015. Upon learning of the attempted service,
Liberty's counsel wrote to Thomas's counsel on
January 4, 2016, and advised him that Liberty is a foreign
insurer and, therefore, must be served through the Montana
Commissioner of Insurance pursuant to § 33-1-602, MCA.
Thomas did not attempt service on Liberty through the
Commissioner. The Missoula County Sheriff's Return of
Service and Summons was filed with the District Court on
February 29, 2016.
On March 14, 2016, Thomas filed a Motion for Entry of Default
Judgment, based on the December 29, 2015 service on Holt at
Liberty's Missoula office. The District Court granted the
motion and, on May 9, 2016, issued a Memorandum and Order on
Judgment against Liberty in the amount of $1, 504, 000. The
Order on Judgment was the first court filing Liberty received
since Liberty's counsel wrote to Thomas's counsel on
January 4, 2016, advising of the inadequate service. On May
31, 2016, Liberty filed a Motion to Vacate Default Judgment.
The District Court did not rule on the Motion within 60 days
of the filing date, and thus it was deemed denied pursuant to
Mont. R. Civ. P. 60(c)(1).
Montana law favors trial on the merits. Judgments by default
are not favored. Brilz v. Metro. Gen. Ins. Co., 2012
MT 184, ¶ 15, 366 Mont. 78, 285 P.3d 494. We review a
deemed denial of a motion to set aside default judgment for a
"slight abuse of discretion." Green v.
Gerber, 2013 MT 35, ¶ 13, 369 Mont. 20, 303 P.3d
729. Where the movant seeks relief from a default judgment on
the ground that the judgment is void, our review is de novo
since the determination of whether or not a judgment is void
is a conclusion of law. Essex Ins. Co. v. Moose's
Saloon, Inc., 2007 MT 202, ¶ 16, 338 Mont. 423, 166
P.3d 451. A judgment is void under Mont. R. Civ. P. 60(b)(4)
when the court issuing the judgment lacked jurisdiction.
Greater Missoula Area Fedn. of Early Childhood Educators
v. Child Start, Inc., 2009 MT 362, ¶ 21, 353 Mont.
201, 219 P.3d 881.
Liberty argues that Thomas failed to properly serve it with
the Complaint and Demand for Jury Trial, which deprived the
District Court of personal jurisdiction over Liberty, and
thus rendered the judgment void. Thomas argues that her
service was proper under M. R. Civ. P. 4, and it was
incumbent upon Liberty to move to quash service. Thomas's
argument relies on M. R. Civ. P. 4(i)(3)(A) which, if
applicable, would ostensibly allow service on Holt at
Liberty's Missoula office. Thomas's reliance on M. R.
Civ. P. 4(i)(3)(A) is misplaced. M. R. Civ. P. 4(i)(3)(D)
provides for service upon a business whose agent or attorney
in fact is authorized by statute to accept service on behalf
of a business. Section 33-1-602, MCA, provides that, as a
foreign insurer, service upon Liberty "may be made
only by service of process upon the commissioner or
upon a deputy or other person in charge of the
commissioner's office during the commissioner's
absence." (Emphasis added.)
We previously addressed this very issue in LaFountaine v.
State Farm Mut. Auto. Ins. Co., 215 Mont. 402, 698 P.2d
410 (1985). In LaFountaine, the plaintiff attempted
to serve State Farm, an Illinois corporation, at its Billings
Claims Office rather than through the Commissioner. We held
that the district court in that matter never obtained
personal jurisdiction over State Farm, as "no valid
service of process was ever made." LaFountaine,
215 Mont. at 405, 698 P.2d at 412. We find no meaningful
distinction between LaFountaine and the present
case. Thomas never obtained service on Liberty through the
Commissioner, as required by § 33-1-602, MCA. Thus,
Liberty was never properly served, and the District Court
never obtained personal jurisdiction over Liberty.
Accordingly, the default judgment entered against Liberty is
We have determined to decide this case pursuant to Section I,
Paragraph 3(c) of our Internal Operating Rules, which
provides for memorandum opinions. In the opinion of the
Court, the case presents a question controlled by settled law
or by the clear application of applicable standards of
review. The District Court's deemed denial of
Liberty's Motion to Vacate Default ...