State ex rel. Stenehjem v. Maras, 958 N.W.2d 475

Attorney General investigated Terpsichore Maras for allegedly soliciting charitable donations without registering, tied to an event called “A Magic City Christmas.”
AG previously sought to enforce investigative subpoenas in a companion enforcement action; later filed this civil suit (July 2018) seeking penalties, restitution, costs, attorney fees, injunction, and cancellation of Maras’s trade name.
Maras filed a counterclaim for abuse of process seeking money damages (>$50,000), alleging the AG’s investigation was retaliatory.
The district court dismissed Maras’s counterclaim for lack of subject-matter jurisdiction because she did not comply with the statutory notice requirement to the OMB director under N.D.C.C. § 32-12.2-04.
The court issued two orders to compel discovery and warned that continued noncompliance could result in sanctions; Maras failed to respond and had been held in contempt in a companion case.
On August 7, 2020 the district court entered default judgment as a discovery sanction, enjoining future solicitation, cancelling the trade name, and awarding civil penalties, restitution, fees, and costs.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Maras’s counterclaim required compliance with N.D.C.C. § 32-12.2-04 notice to OMB to confer jurisdiction	Notice statute is jurisdictional and applies to any claim for money damages against the State; Maras did not provide notice	Statutory notice requirements do not apply to compulsory counterclaims; court had jurisdiction	Court: statute covers “any claim” for money damages against the State (including counterclaims); notice is jurisdictional and strict compliance required; dismissal affirmed
Whether district court abused its discretion by entering default judgment as a discovery sanction	Sanctions, including default, were warranted because Maras repeatedly ignored discovery orders and acted in bad faith	Discovery requests were abusive/duplicative or sought documents Maras did not possess, so default was excessive	Court: trial court has broad discretion; record shows deliberate, bad-faith noncompliance and repeated warnings—default not an abuse of discretion

Voigt v. State, 759 N.W.2d 530 (N.D. 2008) (notice requirements for claims against state are jurisdictional)
Ghorbanni v. North Dakota Council on the Arts, 639 N.W.2d 507 (N.D. 2002) (strict compliance required for statutory notice)
Vorachek v. Citizens State Bank of Lankin, 421 N.W.2d 45 (N.D. 1988) (Rule 37 sanctions include default; standards for discovery sanctions)
Nelson v. Nelson, 923 N.W.2d 386 (N.D. 2019) (appellate review of discovery sanctions; burden on challenger to show abuse of discretion)
Dickinson Air Service, Inc. v. Kadrmas, 397 N.W.2d 55 (N.D. 1986) (interpreted notice statutes in a different statutory context)
Laufer v. Doe, 946 N.W.2d 707 (N.D. 2020) (addressed notice issues under a different damages statute; not controlling here)