NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL

AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

SONG HE, et al., Plaintiffs/Appellees,

v.

COLES PROPERTIES LLC, Intervenor/Appellant.

No. 1 CA-CV 17-0561 

Appeal from the Superior Court in Maricopa County

No. CV2016-053018

The Honorable Steven K. Holding, Judge Pro Tempore

VACATED AND REMANDED

COUNSEL

The Kozub Law Group, PLC, Scottsdale

By William A. Kozub, Richard W. Hundley

Counsel for Plaintiffs/Appellees

Evans Dove Nelson Fish & Grier, PLC, Mesa

By Douglas N. Nelson, Trevor J. Fish, Thomas J. Grier

Counsel for Intervenor/Appellant

FILED 10-23-2018
SONG HE, et al. v. COLES PROPERTIES

Decision of the Court

2

MEMORANDUM DECISION

Judge James B. Morse Jr. delivered the decision of the Court, in which 

Presiding Judge James P. Beene and Judge Michael J. Brown joined.

M O R S E, Judge:

¶1 Coles Properties LLC ("Coles") appeals the superior court's 

order denying Coles' motion to set aside default judgment under Arizona 

Rule of Civil Procedure ("Rule") 60(b).

1 The superior court found that Coles 

was not a party and did not have standing to seek relief under Rule 60(b). 

Because Coles was a party with standing, we vacate the superior court's 

order and remand for the superior court to decide the merits of Coles' 

motion.

FACTS AND PROCEDURAL HISTORY

¶2 Coles and Appellee Song He both claim to be victims of fraud 

perpetrated by Darrell Knoch and Imagine Enterprises, LLC ("Imagine"). 

This appeal concerns Coles' and Song He's claims to real property 

("Property") that Imagine purchased in early 2016 but that Coles currently 

owns.

¶3 On September 28, 2016, Appellees filed suit against Imagine

for fraud and other misdeeds, seeking, among other things, an equitable 

mortgage on the Property, which Imagine owned at that time. Two days 

later, Appellees recorded a lis pendens, giving notice of the pending lawsuit 

and claims against the Property. Upon learning of the lis pendens and 

lawsuit, Coles convinced Imagine to quitclaim the property to it, and on 

December 8, 2016, Coles recorded a quitclaim deed transferring the 

Property from Imagine to Coles. On December 13, 2016, Coles sent 

Appellees a demand letter, telling Appellees that it held legal title to the 

property and requesting that Appellees quitclaim any of their interest to 

Coles. On the same day, Appellees moved for default judgment against 

Imagine and Knoch, requesting, among other forms of relief, that the court 

 

1 The parties' filings and the superior court's order cite to Rule 60(c). 

The Rules were amended in 2017, and what was previously Rule 60(c) is 

currently numbered Rule 60(b). See Ariz. R. Civ. P., prefatory cmt. to the 

2017 amendments.
SONG HE, et al. v. COLES PROPERTIES

Decision of the Court

3

grant a "constructive trust and/or equitable mortgage" against the Property 

and "that Defendant Imagine Enterprises, LLC, be ordered to hold such 

Property as constructive trustees and/or equitable mortgagees for the 

benefit of Plaintiffs."

¶4 Appellees did not notify the superior court that Coles was the 

new owner of the Property, and they did not seek to join Coles as a party

pursuant to Rule 19. Appellees also did not notify Coles of the default 

proceedings. On January 4, 2017, the superior court entered default 

judgment against Imagine and Knoch. Among other relief, the judgment 

granted Song He an equitable mortgage on the Property and, as requested 

by Appellees, ordered Imagine to hold the property "as constructive 

trustees and/or equitable mortgagees for the benefit of Plaintiffs."

¶5 On January 10, 2017, Coles moved to intervene. For reasons 

not important to this appeal, the parties and the superior court determined 

that intervention at that time was not in the interests of the parties, and for 

that reason the court denied the motion without prejudice. Coles later 

renewed its motion to intervene and on May 8, 2017, the court granted 

Coles' motion, finding that Coles met the requirements for a permissive 

intervention under Rule 24(b), and also was entitled to intervention as a 

matter of right under Rule 24(a).

¶6 Upon successfully intervening, Coles moved to set aside the 

part of the default judgment that granted Song He an equitable mortgage 

on the Property, arguing excusable neglect and other extraordinary 

circumstances under Rule 60(b)(1) and (6). The superior court denied the 

motion, finding that Coles was not a party under Rule 60(b), and that Coles 

did not have standing. The court entered final judgment, Coles timely 

appealed, and we have jurisdiction pursuant to Article 6, Section 9, of the 

Arizona Constitution and Arizona Revised Statutes ("A.R.S.") sections 12-

120.21(A)(1) and -2101(A)(1).

DISCUSSION

¶7 Generally, we review rulings on a motion for relief under 

Rule 60(b) for an abuse of discretion. See Gonzalez v. Nguyen, 243 Ariz. 531, 

534, ¶ 11 (2018) ("The rule . . . creat[es] a very broadly worded ground for 

relief, which we construe as investing extensive discretion in trial courts."). 

However, whether a person has standing is a legal question which we 

review de novo. Aegis of Ariz., L.L.C. v. Town of Marana, 206 Ariz. 557, 562, 

¶ 16 (App. 2003).
SONG HE, et al. v. COLES PROPERTIES

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¶8 Coles has standing under traditional standing principles 

because the judgment imposes a mortgage and lessens the value of Coles'

Property. See Biggs v. Cooper ex rel. County of Maricopa, 236 Ariz. 415, 418, 

¶ 8 (2014) ("To have standing, 'a plaintiff must allege a distinct and palpable 

injury.'" (quoting Sears v. Hull, 192 Ariz. 65, 69, ¶ 16 (1998))). Appellees 

argue, however, that Coles cannot seek relief under Rule 60(b) because 

Coles was not specifically mentioned in the judgment and was not a party 

to this action when default judgment was entered. However, Rule 60(b) 

provides that "the court may relieve a party or its legal representative from 

a final judgment," and does not explicitly limit relief to those who were 

parties at the time of the judgment. Ariz. R. Civ. P. 60(b). Coles successfully 

intervened and, therefore, was "a party" at the time the court ruled on the 

motion for relief under Rule 60(b).

¶9 In addition, Coles is Imagine's "legal representative" because 

it stands in the same position as Imagine with respect to the Property. See 

11 Charles Allan Wright & Arthur R. Miller, Federal Practice and Procedure 

§ 2852 (3d ed. 2018) ("The reference to the party's legal representative has 

been construed to refer solely to persons who effectively stand in the shoes 

of a party, such as a trustee or guardian, and not to include the lawyer for 

the party."); Matter of El Paso Refinery, LP, 37 F.3d 230, 234 (5th Cir. 1994) 

("The term was intended to reach 'only those individuals who were in a 

position tantamount to that of a party or whose legal rights were otherwise 

so intimately bound up with the parties that their rights were directly 

affected by the final judgment.'" (quoting Kem Mfg. Corp. v. Wilder, 817 F.2d 

1517, 1520 (11th Cir. 1987))); In re Lovitt, 757 F.2d 1035, 1040 (9th Cir. 1985) 

(interpreting "legal representative" to mean a party's "privy").

2

¶10 Liston v. Butler, 4 Ariz. App. 460 (1966), is instructive. In that 

case, the superior court allowed a non-party to intervene and set aside a

judgment that imposed a lien on his property without naming him. This 

Court affirmed, stating:

We believe that one whose interests are directly affected by a 

judgment in a proceeding to which he is not a party, may 

timely move to set aside such judgment, and the trial court 

 

2 Rule 60(b) is identical in all material respects to Fed. R. Civ. P. 60(b). 

"Although a federal court's interpretation of a federal procedural rule is not 

binding in the construction of our rule, we recognize its instructive and 

persuasive value and that uniformity in interpretation of our rules and the 

federal rules is highly desirable." Flynn v. Campbell, 243 Ariz. 76, 80, ¶ 9 

(2017) (internal quotation marks omitted).
SONG HE, et al. v. COLES PROPERTIES

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after notice and hearing may set aside said judgment and 

grant a motion to intervene.

Id. at 466. Thus, even if Coles had not intervened and was not yet a named

party to the lawsuit when it moved to set aside the judgment, the superior 

court could consider and grant Rule 60(b) relief and allow it to intervene at 

the same time because its "interests are directly affected by [the] judgment."

Id.; cf. Woodbridge Structured Funding, LLC v. Ariz. Lottery, 235 Ariz. 25, 30, 

¶ 23 (App. 2014) ("Because Genex had no right to intervene, it is not entitled 

to Rule 60 relief from the trial court's entry of judgment . . . .").

CONCLUSION

¶11 For the foregoing reasons, we vacate the superior court's 

order denying Coles' motion to set aside and remand for consideration of 

the motion on the merits. As the successful party, Coles is entitled to costs 

on appeal. We defer Coles' request for attorney fees on appeal to the 

superior court's discretion pending resolution of the matter on the merits. 

See Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 204, ¶ 37

(App. 2007).