Court Opinion

ID: 9916315
Source: CourtListenerOpinion
Date Created: 2024-01-09 18:03:34.95584+00
Date Added: 2024-06-11T13:24:59.181823
License: Public Domain

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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

                    BIG BELL 21, LLC, Plaintiff/Appellant,

                                        v.

      TITLE ALLIANCE ELITE AGENCY, LLC, Defendant/Appellee.

                             No. 1 CA-CV 22-0745
                               FILED 01-09-2024

         Appeal from the Superior Court in Maricopa County
                         No. CV2020-003480
          The Honorable Mary C. Cronin, Judge Pro Tempore
    The Honorable Lindsay P. Abramson, Judge Pro Tempore (Retired)

                                  AFFIRMED

                                   COUNSEL

Tiffany & Bosco P.A., Phoenix
By Tina M. Ezzell, Amy D. Sells
Counsel for Plaintiff/Appellant

Lewis Brisbois Bisgaard & Smith LLP, Phoenix
By Michael P. Obert, Jr., Robert C. Ashley
Counsel for Defendant/Appellee
                      BIG BELL v. TITLE ALLIANCE
                           Decision of the Court

                       MEMORANDUM DECISION

Presiding Judge Michael J. Brown delivered the decision of the Court, in
which Judge Andrew M. Jacobs and Judge Samuel A. Thumma.

B R O W N, Judge:

¶1             Plaintiff Big Bell 21, LLC (“Big Bell”) appeals from an order
setting aside a default judgment it obtained against defendant Title Alliance
Elite Agency, LLC (“Title Alliance”). We affirm because the default
judgment is void.

                              BACKGROUND

¶2             Michael Mills sold a residential property in January 2020 and
retained Title Alliance to serve as the title company for the transaction. Title
Alliance performed a title search and discovered a judgment lien against
Mills in Big Bell’s favor.

¶3           On January 8, 2020, Big Bell sent Title Alliance a payoff quote
of about $420,000. Mills’ attorney wrote Title Alliance the next day,
contending Big Bell’s lien was invalid and Mills was entitled to at least
$150,000 of the sale proceeds under a homestead exemption. Mills
provided a homestead affidavit and authorized Title Alliance to wire the
sale proceeds to his personal account. Title Alliance did so when escrow
closed on January 14, 2020.

¶4            Big Bell sued Title Alliance, alleging it negligently
misrepresented the status of the transaction and deprived Big Bell of the
chance to satisfy a portion of its judgment against Mills. Big Bell served its
complaint on Title Alliance’s statutory agent on March 16, 2020. Title
Alliance did not respond to the complaint, and Big Bell applied for entry of
default on April 10. The certificate of service on the application indicates
Big Bell mailed copies to Title Alliance’s statutory agent in Arizona and
general counsel in Pennsylvania. Title Alliance still did not respond or
appear. Big Bell moved for the entry of default judgment on April 27, 2020,
and the court entered default judgment four days later.

¶5           In August 2021, Big Bell garnished funds from Title Alliance’s
Florida escrow account. About six months later, Title Alliance moved to set
aside the default judgment and garnishment, asserting Big Bell had not

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                      BIG BELL v. TITLE ALLIANCE
                           Decision of the Court

complied with Arizona Rule of Civil Procedure (“Rule”) 55(a)(3)(B) because
it never “called, emailed, or mailed a copy of the complaint or the default
application to [Title Alliance’s general counsel]” despite knowing she
represented Title Alliance. Title Alliance also argued excusable neglect
under Rule 60(b)(1), noting its offices were shut down from March 19, 2020
through June 8, 2020 due to the COVID-19 pandemic and mail deliveries
during that timeframe were often delayed or not completed. It also argued
the default judgment was void under Rule 60 because Big Bell’s application
for entry of default was premature, citing an Arizona Supreme Court
Administrative Order (“A.O.”) that, due to the COVID-19 pandemic,
excluded March 16 through 31, 2020, from time calculations under Rule 6.
See Ariz. S. Ct. Admin. Order No. 2020-47. With that time excluded, Title
Alliance argued the deadline to respond to the complaint had not yet
passed when Big Bell applied for entry of default. Title Alliance also asked
the court to set aside Big Bell’s garnishment of its Florida escrow account.

¶6             After full briefing, the superior court set aside the default
judgment, finding the circumstances “leading up to the . . . Default
Judgment to be unique” and concluding that Big Bell “could have done
more to provide notice of the lawsuit and/or the default proceedings.” On
these grounds, the court found “excusable neglect exist[ed] for Title
Alliance’s failure to defend” and granted relief under Rule 60(b)(1).

¶7            Less than a month later, Title Alliance asked the court to
amend its order to also grant relief under Rule 60(b)(6) and direct Big Bell
to return funds it had garnished from the Florida account. The court
clarified that it “considered and ruled on both Rule 60(b)(1) and Rule
60(b)(6) but declined to rule on the argument regarding Rule 60(b)(4).” It
then entered a signed order setting aside the default judgment under Rule
60(b)(1) and (6) but did not rule on Title Alliance’s request for the return of
the garnished funds.

¶8           Big Bell appealed from that order, and we have jurisdiction
under A.R.S. § 12-2101(A)(2). See Ruffino v. Lokosky, 245 Ariz. 165, 168, ¶ 7
(App. 2018).

                               DISCUSSION

¶9             As pertinent here, the superior court may relieve a party from
a final judgment for the following reasons: “(1) mistake, inadvertence,
surprise, or excusable neglect;” “(4) the judgment is void;” or “(6) any other
reason justifying relief.” Ariz. R. Civ. P. 60(b)(1), (4), (6). Generally, we
review orders setting aside default judgments for an abuse of discretion and

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                       BIG BELL v. TITLE ALLIANCE
                            Decision of the Court

view the facts in the light most favorable to upholding the court’s decision.
Olewin v. Nobel Mfg., LLC, 254 Ariz. 346, 350, ¶ 9 (App. 2023). But if a
judgment is void, the superior court must set it aside. Martin v. Martin, 182
Ariz. 11, 14 (App. 1994). This is true no matter how long the moving party
delays in seeking relief, even if the delay is unreasonable. Ruffino, 245 Ariz.
at 169, ¶ 10.

¶10           We first consider Rule 60(b)(4) because it is dispositive. The
superior court did not rule on Title Alliance’s Rule 60(b)(4) arguments, but
we may affirm on any basis supported by the record even if the court did
not consider it. R.O.I. Props. LLC v. Ford, 246 Ariz. 231, 235, ¶ 13 (App. 2019).

¶11          Title Alliance contends the default judgment was void based
on A.O. 2020-47, entered on March 16, 2020, which included the following
time exclusion:

       IT IS FURTHER ORDERED that for the period March 16, 2020
       through March 31, 2020:

       (a) Time is excluded for the purposes of calculating time
       under Rule 6, Rules of Civil Procedure[,] Rule 8, Rules of
       Criminal Procedure Rules 17 and 100, Rules of Procedure for
       the Juvenile Court Rules 2 and 3, Rules of Procedure in
       Eviction Actions and any other rule provisions or statutory
       procedures concerning when court proceedings are held. A
       judge in an appropriate case may extend this exclusion of time
       for good cause.

Ariz. S. Ct. Admin. Order No. 2020-47, at 2 (emphasis added). If this order
applies, Title Alliance’s answer, which ordinarily would have been due on
April 6, would not have been due until April 20, ten days after Big Bell
applied for entry of default.

¶12            Big Bell contends that A.O. 2020-48, entered two days later,
replaced A.O. 2020-47. Not so; our supreme court said that A.O. 2020-48
“revises, clarifies[,] and adds to” A.O. 2020-47. Ariz. S. Ct. Admin. Order
No. 2020-48, at 1. Those revisions included removing Civil Rule 6 from the
time exclusion provision:

       IT IS FURTHER ORDERED that the period March 18, 2020
       through April 17, 2020:

       (a) Is excluded from calculation of time under rule provisions
       and statutory procedures that require court proceedings to be

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                       BIG BELL v. TITLE ALLIANCE
                            Decision of the Court

       held within a specific period of time, including Rule 8, Rules
       of Criminal Procedure; Rules 17, 79 and 100, Rules of
       Procedure for the Juvenile Court; and Rules 2 and 3, Rules of
       Procedure in Eviction Actions. A judge, pursuant to Rule 8,
       may extend this exclusion of time in criminal cases, for good
       cause.

Ariz. S. Ct. Admin. Order No. 2020-48, at 2. But this revision did not take
effect until March 18. Id.

¶13             The time to serve a responsive pleading commences when the
plaintiff serves the summons and complaint. Ariz. R. Civ. P. 12(a)(1). As
noted above, Big Bell served the summons and complaint on March 16,
2020, while A.O. 2020-47 was in effect. Title Alliance’s time to respond was
extended through April 20 and had not yet expired when Big Bell applied
for entry of default. Thus, Big Bell’s application for entry of default was
premature, meaning there could be no resulting effective entry of default.
See Ariz. R. Civ. P. 55(a)(2)(B) (application for entry of default must
“state[ ] that the party ha[d] failed to plead or otherwise defend within the
time allowed by these rules”); 55(a)(4) (“A default is effective 10 days after
the application for entry of default is filed.”).

¶14           Because the superior court lacked the authority to enter the
default judgment against Title Alliance, it is void and therefore had to be
set aside under Rule 60(b)(4). See Ariz. R. Civ. P. 55(b)(1)(A) (stating that
default judgment may be entered against “a defendant who has been
defaulted for not appearing”); Shinn v. Ariz. Bd. of Exec. Clemency, 254 Ariz.
255, 264–65, ¶¶ 33–35 (2022) (clarifying that a judgment is void if the court
lacks the “authority” to render it, even if the court has “jurisdiction” to enter
the judgment); Pemberton v. Duryea, 5 Ariz. 8, 9 (1896) (setting aside a default
judgment that was “unquestionably premature” because the defendant
“was not in default when the judgment was entered against him”); Corbet
v. Superior Court, 165 Ariz. 245, 248 (App. 1990) (noting that if a “default or
default judgment is void,” relief must be granted). Accordingly, we do not
address the parties’ arguments concerning Rule 60(b)(1) and (6).

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                      BIG BELL v. TITLE ALLIANCE
                           Decision of the Court

                              CONCLUSION

¶15           We affirm. Title Alliance is awarded its taxable costs incurred
in this appeal upon compliance with ARCAP 21.

                        AMY M. WOOD • Clerk of the Court
                        FILED: TM

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