IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

JOSEPH SCHOOLEY, Plaintiff/Appellant,

v.

ARTURO PENA, Defendant/Appellee.

FARMERS INSURANCE EXCHANGE, Garnishee/Appellee.

No. 1 CA-CV 21-0216 

Appeal from the Superior Court in Maricopa County

No. CV 2019-011929

The Honorable David W. Garbarino, Judge

AFFIRMED

COUNSEL

Ahwatukee Legal Office PC, Phoenix

By David L. Abney

Co-Counsel for Plaintiff/Appellant

Phillips Law Group, Phoenix

By Sophia J. Augeri, Timothy G. Tonkin

Co-Counsel for Plaintiff/Appellant

Law Office of Broening Oberg Woods & Wilson, Phoenix

By Alicyn Freeman, Kelly Jancaitis

Co-Counsel for Garnishee/Appellee

Lewis Roca Rothgerber Christie LLP, Phoenix

By Lawrence A. Kasten, Steven J. Hulsman

Co-Counsel for Garnishee/Appellee

FILED 5-17-2022
SCHOOLEY v. PENA/FARMERS

Opinion of the Court

2

OPINION

Judge Michael J. Brown delivered the opinion of the Court, in which 

Presiding Judge Randall M. Howe and Judge Brian Y. Furuya joined.

B R O W N, Judge:

¶1 Joseph Schooley appeals the superior court’s order setting 

aside a default judgment entered against Farmers Insurance Exchange 

(“Farmers”) in a garnishment proceeding. He argues the court abused its 

discretion, asserting Farmers failed to show excusable neglect. Because 

Schooley failed to provide notice of his request for default judgment to 

Farmers’ attorney as required by Arizona Rule of Civil Procedure (“Rule”) 

55(a), we affirm. 

BACKGROUND

¶2 Schooley sued Arturo Pena for personal injuries, alleging 

negligence and negligent infliction of emotional distress arising from Pena’s 

discharge of a firearm while driving a car. At the time of the shooting, Pena 

ostensibly had $500,000 in liability coverage under a Farmers homeowner 

insurance policy belonging to his father. Schooley’s attorney, Sophia 

Augeri, submitted a claim to Farmers seeking coverage under the policy. 

Farmers referred the claim to outside counsel, Alicyn Freeman, who denied 

the claim on Farmers’ behalf. 

¶3 Pena failed to defend the action, and Schooley obtained a 

default judgment against him of $525,000. Augeri then contacted Freeman, 

again seeking coverage under the policy. After Freeman denied coverage a 

second time, Augeri threatened to file a bad faith claim and asserted 

Farmers would have to tender reimbursement in any event “when a writ of 

garnishment is served.” 

¶4 After Schooley obtained the writ, he served it and 

supplemental materials (collectively “garnishment packet”) on the Arizona 

Department of Insurance, given that Farmers is a foreign insurer. See A.R.S. 

§§ 20-102(1), 20-221(B). The garnishment packet listed Pena as the debtor,

but did not include the name of the policy holder (Pena’s father) or the 

policy number, mention the coverage dispute, or identify Freeman as 
SCHOOLEY v. PENA/FARMERS

Opinion of the Court

3

counsel. It is undisputed that Schooley did not send the packet to Freeman

or her law firm.

¶5 The garnishment packet was forwarded to Farmers, but the 

intake employee could not find any reference to Pena in Farmers’ records.

As Farmers later informed the superior court, because garnishment actions

involving Farmers are typically filed by creditors seeking to garnish funds 

owed by Farmers’ employees or agents, the packet was internally 

misdirected and never reached Farmers’ legal department.

¶6 Schooley filed a petition for an order to show cause under 

A.R.S. § 12-1583 (outlining procedures if garnishee fails to answer or 

appear), alleging Farmers had defaulted by not responding to the 

garnishment writ within 10 days. The court issued a show-cause order, and 

Schooley served Farmers with the order through the Arizona Department 

of Insurance. Again, Schooley did not notify Freeman. As before, the showcause order was misdirected within Farmers’ various accounting divisions. 

¶7 Schooley filed two briefs with the superior court supporting 

the default judgment, but did not serve either of them on Farmers or 

Freeman. Farmers did not attend the show-cause hearing, where the court 

entered a default judgment against Farmers for approximately $530,000. 

¶8 Two weeks later, Farmers moved to set aside the default 

judgment. Farmers asserted in part that relief was warranted because (1) 

Schooley did not abide by Rule 55’s requirement that notice be provided to 

Freeman, who was known to Schooley as Farmers’ attorney regarding the 

Pena claim; and (2) Farmers’ failure to respond constituted excusable 

neglect under Rule 60(b)(1). Although finding the evidence “thin,” the 

court granted relief and set aside the judgment under Rule 60(b)(1). The 

court declined to rule on whether Rule 55 applied, doubting whether it was 

strictly applicable, but noting nonetheless that it informed how Schooley 

should have proceeded. Schooley timely appealed, and we have 

jurisdiction under A.R.S. § 12-2101(A)(2).

DISCUSSION

¶9 We review a court’s decision on a motion to set aside a default 

judgment for an abuse of discretion. MacLean v. Newgioco Group, Inc., 251 

Ariz. 31, 33, ¶ 8 (App. 2021). We review de novo the interpretation of 

statutes and rules, In re $11,660.00 U.S. Currency, 251 Ariz. 106, 108, ¶ 8 

(App. 2021), but view the facts in the light most favorable to upholding the 

court’s decision, MacLean, 251 Ariz. at 33, ¶ 8. We interpret the language of 

a rule in view of the entire text, considering the context and related
SCHOOLEY v. PENA/FARMERS

Opinion of the Court

4

provisions. See Nicaise v. Sundaram, 245 Ariz. 566, 568, ¶ 11 (2019); State v. 

Hansen, 215 Ariz. 287, 289, ¶ 7 (2007) (courts apply the same principles in 

interpreting statutes and rules). If the text is unambiguous, we apply it as 

written without using other methods of statutory interpretation. State v. 

Jurden, 239 Ariz. 526, 530, ¶ 15 (2016). 

A. Application of Rule 55

¶10 Farmers urges us to affirm on the grounds that Schooley 

failed to provide proper notice of the garnishment proceeding under Rule 

55. Although the superior court declined to rule on this issue, in reviewing 

a judgment we will affirm the court’s ruling “if the result was legally correct 

for any reason.” Gen. Elec. Capital Corp. v. Osterkamp, 172 Ariz. 191, 193 

(App. 1992). Stated differently, “if the judgment can be sustained on any 

theory framed by the pleadings and supported by the evidence, we must 

affirm it.” Id.

¶11 Rule 55 outlines the procedure in a typical civil case for 

obtaining a default judgment. Generally, when a plaintiff seeks a default 

judgment against a defendant who has not yet filed an answer or otherwise 

defended against the action, the plaintiff submits an “application for 

default.” Ariz. R. Civ. P. 55(a)(1), (2). The application must, among other 

things, identify “any attorney known to represent the party claimed to be 

in default in the action in which default is sought or in a related matter.” 

Ariz. R. Civ. P. 55(a)(2)(D) (emphasis added). Additionally, the party 

seeking the entry of default must mail a copy of the application to the 

known attorney, “whether or not that attorney has formally appeared in the 

action.” Ariz. R. Civ. P. 55(a)(3)(B). If the defendant fails to respond within 

10 days, the party is deemed to have defaulted, and the plaintiff may

request a default judgment as outlined under Rule 55(b). See Ariz. R. Civ. 

P. 55(a)(4),(5), and (b). But if the plaintiff fails to notify known counsel of 

the application for default, it would be improper to enter a default 

judgment. See MacLean, 251 Ariz. at 34, ¶ 13 n.3 (suggesting that a Rule 

60(b) motion cannot be denied if counsel was not notified as required under 

Rule 55). 

¶12 A garnishment proceeding, however, is governed by specific

statutory procedures not generally applicable in other civil actions. The 

circumstances in which a garnishor can obtain a default judgment against 

a garnishee are outlined in § 12-1583, which states:

If a garnishee fails to answer within the time specified in the 

writ, the judgment creditor for whom the writ has been issued 
SCHOOLEY v. PENA/FARMERS

Opinion of the Court

5

may petition the court for the issuance of an order requiring 

the garnishee to appear before the court at a time and place 

specified in the order to answer the writ or to file and serve a 

copy of the answer on the judgment creditor for whom the 

writ has been issued, or on his attorney if the party is 

represented by counsel, at least five days before the 

appearance date. If the garnishee fails to appear or file and serve 

the answer after the service of the order requiring the appearance in 

person or answer upon the garnishee, the court may, after judgment 

has been rendered against the judgment debtor, render judgment by 

default against the garnishee for the full amount of the judgment 

against the judgment debtor. 

(Emphasis added.) Section 12-1583 does not address whether civil 

procedure rules are also applicable to the default proceeding. Nonetheless, 

this court has held that Rule 55(b) applies when a party seeks a default 

judgment under § 12-1583 against a garnishee that has already appeared. 

Groat v. Equity Am. Ins. Co., 180 Ariz. 342, 348 (App. 1994). Relying on Groat, 

Farmers argues that Rule 55(a) applies when the garnishee has not yet 

appeared or defended, and the garnishor is thus required to notify known 

counsel of an application for default. 

¶13 Schooley concedes that he did not notify Freeman of the 

garnishment proceedings. He argues nonetheless that Freeman did not 

represent Farmers in a “related matter,” and was therefore not entitled to 

notice under Rule 55(a)(3)(B). Schooley notes that Freeman, on behalf of 

Farmers, declined to provide for Pena’s representation in the underlying 

negligence case. He then suggests that because Freeman never stated she 

would represent Farmers in future proceedings, like the garnishment 

action, such proceedings are not related matters under the rule. Schooley

construes the term “related matter” too narrowly. It is undisputed that 

Freeman represented Farmers in settlement negotiations with Schooley 

regarding his coverage claim, which is the sole basis for the garnishment 

proceedings and the default judgment against Farmers. The only 

reasonable construction of Rule 55(a)(3)(B) is that Freeman represented

Farmers in a “related matter.”

¶14 Notwithstanding our holding in Groat, Schooley argues Rule 

55(a) does not apply, asserting the statutory process for obtaining a default 

judgment in garnishment proceedings “is not the same as the default

judgment procedure outlined in [Rule 55].” We therefore consider whether 

Rule 55(a), including the provision on attorney notification, applies to § 12-
SCHOOLEY v. PENA/FARMERS

Opinion of the Court

6

1583 garnishment proceedings when the garnishee has failed to plead or 

otherwise defend. 

¶15 Garnishment is a stand-alone action that is civil in nature, and 

therefore generally subject to the Arizona Rules of Civil Procedure. See 

Davis v. Chilson, 48 Ariz. 366, 371 (1936); see also Ariz. R. Civ. P. 1 (“These 

rules govern the procedure in all civil actions and proceedings in the 

superior court of Arizona.”). For this reason, in Groat we held that in 

garnishment proceedings, “as in any other civil case, the garnishee must be 

given notice of the application for default judgment as required by Rule 

55(b)(2).” 180 Ariz. at 348. That holding is consistent with A.R.S. § 12-111, 

which states that “[a]ll statutes relating to pleading, practice and procedure 

shall be deemed rules of the court and shall remain in effect as such until 

modified or suspended by rules promulgated by the supreme court.” 

¶16 Schooley contends that § 12-1583 creates a different procedure 

for obtaining default judgment than what is typically required under Rule 

55. According to Schooley, that statute “does not deal with an application 

for default but [instead] deals with a petition for issuance of an order 

requiring the garnishee to appear and serve an answer, with a possible 

penalty for noncompliance being the entry of a default judgment.” Under 

Schooley’s interpretation, once Farmers failed to respond to the show-cause

order by either appearing or filing an answer, he was permitted to proceed 

directly to the default judgment stage without first submitting an 

application for default. Schooley made a similar argument in the superior 

court, asserting that an application for default is simply not a part of the 

garnishment proceedings. To support his interpretation, Schooley notes 

that § 12-1583 makes no explicit reference to Rule 55, an application for 

default, or notice to a known party representing the garnishee. Thus,

Schooley concludes, the requirements of Rule 55(a) do not apply. 

¶17 Schooley’s analysis fails to recognize that procedural rules 

and statutes must be read together and harmonized whenever possible. See 

Groat, 180 Ariz. at 348. Logically, a court cannot enter a default judgment 

against a party without first finding that the party has actually defaulted. 

Thus, despite any specific reference in § 12-1583, the court must first 

conclude that the garnishee is in default before it enters a default judgment. 

To obtain entry of default against a party that has not yet defended, Rule 

55(a)(1) and (3)(B) require a plaintiff to submit an application for default 

and to serve notice of that application on any known attorney. Because

“garnishment is a creature of statute, garnishment proceedings are 

necessarily governed by the terms of those statutes.” Andrew Brown Co. v. 

Painters Warehouse, Inc., 11 Ariz. App. 571, 572 (1970). But the rules of civil 
SCHOOLEY v. PENA/FARMERS

Opinion of the Court

7

procedure still apply when they do not affect “the purpose and efficacy of 

a garnishment proceeding” or “take away from the legislative [r]emedy of 

garnishment in any particular.” See Gonzales v. Whitney, 90 Ariz. 324, 329 

(1961). Requiring Schooley to follow the procedures of Rule 55(a), 

including the attorney notice provision, would not diminish the 

garnishment proceeding or its remedy. See Davis, 48 Ariz. at 371 (requiring 

a copy of the judgment in a garnishment action to be served on the opposing 

party in a manner consistent with the Arizona Rules of Civil Procedure,

even though this procedure was not explicitly required by the garnishment 

statute itself).

¶18 Moreover, holding the garnishor responsible for providing 

notice of an impending default to the known attorney of the garnishee

would only further the objectives of § 12-1583 and Rule 55(a). The purpose

of § 12-1583 is, in part, to provide the garnishee with a second chance at

defending against the garnishment before default is imposed. See Groat, 180 

Ariz. at 348. Rule 55(a) serves the same goal, and its notice requirements 

ensure that the party in default knows of this opportunity. Ruiz v. Lopez, 

225 Ariz. 217, 222, ¶ 15 (App. 2010). Stated another way, Rule 55(a) “is 

designed to ‘virtually eliminate [] any claim of lack of notice as a basis for 

setting aside a default.’” Champlin v. Bank of Am., N.A., 231 Ariz. 265, 267, 

¶ 10 (App. 2013) (citation omitted). And more generally, requiring a 

garnishor to provide Rule 55(a) notice aligns with the principle that civil 

actions, including garnishment proceedings, be resolved on the merits. See 

City of Phoenix v. Collar, Williams & White En’g, Inc., 12 Ariz. App. 510, 513 

(1970); see also Gonzalez v. Nguyen, 243 Ariz. 531, 534, ¶ 11 (2018) (noting that 

“the ‘law favors resolution on the merits’”(citation omitted)).

¶19 Schooley attempts to distinguish Groat on the basis that the 

specific issues there revolved around the garnishee’s stricken answer. He

points to Groat’s holding, which states that once “a garnishee’s answer has 

been stricken as a discovery sanction and the trial court proceeds to enter a 

default judgment, the court must comply with the provisions of A.R.S. 

section 12–1583 and Rule 55(b).” 180 Ariz. at 347. Schooley thus suggests

that Groat requires compliance only with Rule 55(b), not 55(a), and only 

under the unique circumstance where an answer has been stricken. In

Groat, however, we specifically noted that under § 12-1583, “[i]n the 

ordinary default situation in which the garnishee fails to file an answer, the 

garnishee would be entitled to notice and an opportunity to answer. This 

procedure matches the procedure outlined in Rule 55(a) for entry of default 

in other types of civil cases.” 180 Ariz. at 348. The reason Rule 55(a) was 

inapplicable to the specific circumstances in Groat was not that it involved
SCHOOLEY v. PENA/FARMERS

Opinion of the Court

8

a garnishment action, but because the case involved an answer that had 

been stricken. Id.

¶20 We therefore hold that Rule 55(a) applies to garnishment 

proceedings when a garnishor seeks default judgment against a garnishee

that has not yet filed an answer or otherwise defended against the action. 

We do not mean to say that the garnishor must file both a petition for showcause order under § 12-1583 and an application for default under Rule 55. 

However, if the petition seeks entry of default as a remedy, the garnishor 

must serve it on the garnishee’s known counsel in order to comply with 

Rule 55(a)(3)(B). See Groat, 180 Ariz. at 348 (noting that the petition for a 

show-cause order under § 12-1583 serves a similar procedural role as Rule 

55(a)). Because Schooley failed to provide notice of the default proceedings 

to Farmers’ counsel as required by Rule 55(a)(3)(B), the court acted within 

its discretion in setting aside the default judgment. 

B. Attorneys’ Fees and Costs 

¶21 Farmers argues that Schooley brought this appeal without

substantial justification, justifying an award of attorneys’ fees under A.R.S. 

§ 12-349 and ARCAP 25. We conclude otherwise and therefore decline to 

award fees under those provisions. Alternatively, Farmers requests fees 

under A.R.S. §§ 12-341.01 and 12-1580. Because Farmers did not request 

fees under these statutes before the superior court, reliance on them appears 

to have been waived. See Odom v. Farmers Ins. Co. of Ariz., 216 Ariz. 530, 

535, ¶ 18 (App. 2007) (“[A]rguments raised for the first time on appeal are 

untimely and deemed waived.”). 

¶22 In any event, we decline to award Farmers attorneys’ fees 

under either statute. Section 12-341.01, which grants attorneys’ fees to the 

successful party in cases arising out of contract, is not applicable here 

because garnishment proceedings, grounded in statute, are treated as 

independent causes of action. Bennett Blum, M.D., Inc. v. Cowan, 235 Ariz. 

204, 207–08, ¶ 13 (App. 2014) (noting that § 12-341.01 does not apply to 

purely statutory causes of action) (quotation and citation omitted). Section 

12-1580(E) provides for a discretionary fee award to the prevailing party in 

a garnishment proceeding. In our discretion, we deny Farmers’ request. As 

the successful party on appeal, Farmers is entitled to taxable costs upon 

compliance with ARCAP 21. 
SCHOOLEY v. PENA/FARMERS

Opinion of the Court

9

CONCLUSION

¶23 We affirm the superior court’s order setting aside default 

judgment.